Fri August 9 08:00 am 2013 in category Stock exchange releases
Nokian Tyres plc Stock Exchange Release 9 August 2013, 8 a.m.

Nokian Tyres plc Interim Report January-June 2013:

Sales and EBIT growth in Q2, improving position in core markets

Nokian Tyres Group’s net sales increased by 1.3% to EUR 419.1 million (EUR 413.8 million in 4-6/2012). Operating profit grew by 6.7% to EUR 120.2 million (112.7). Profit for the period amounted to EUR 85.6 million (95.4). Earnings per share amounted to EUR 0.65 (EUR 0.73).

Nokian Tyres Group’s net sales decreased by 5.7% to EUR 752.2 million (EUR 798.0 million in 1-6/2012). Operating profit was EUR 196.6 million (217.7). Profit for the period amounted to EUR 149.2 million (182.9). Earnings per share amounted to EUR 1.13 (EUR 1.40).


The demand for replacement car tyres in 2013 is expected to be on previous year’s level in Nordic countries with winter tyre demand showing growth. In Russia demand is estimated to show growth in winter tyres but to decrease in summer tyres. In Central Europe total tyre demand is estimated to be down compared to 2012, but winter tyre demand is expected to show growth during H2/2013. The pricing environment for 2013 is challenging for all tyre categories. Margins, however, will be supported by easing of raw material costs (€/kg) by approximately 9.5%, a tailwind of some EUR 45 million, in the full year 2013. Nokian Tyres’ sales are expected to show flat to some growth during 2013. Sales in Russia, Nordic countries and North America are expected to show some growth full year 2013 and sales in Central Europe to pick up in H2/2013 year-over-year.

Financial guidance (updated):

In 2013, the company is positioned to show flat to some growth in Net sales and Operating profit compared to 2012.

Kim Gran, President and CEO:

“Our strong market leader position in the core markets in Russia and Nordic countries is intact and we managed again to increase market share in all our markets. Pre-season sales of our new Hakkapeliitta winter tyre range were good and helped us to book reasonably good results with growth in sales and EBIT during Q2. Headwind continued to be heavy in the European economy, car sales and replacement tyre market being clearly down. We do not foresee any major improvement in the market for 2013 but target to grow and excel on the back of our renewed winter tyre range, expanding distribution and our strong industrial structure.

In the second quarter our strongest cards were Russia and the Nordic countries. Our sales in Russia, our biggest market, continue to exceed last year’s numbers and we managed again to grow winter tyre sales clearly more than average market growth. The best growth rate in Q2, however, came from the Nordic countries supported by the renewed winter tyre range and expanding distribution.

Our profitability remained good, price €/kg was flat due to an improved mix. A strong tailwind from material cost supported margins and offset higher depreciation costs.

We expect the good performance to continue with our new winter tyres spearheaded by Hakkapeliitta 8 being launched to consumers in the second half of the year. The Russian tyre market is growing modestly in 2013, however, car and tyre sales are expected to start to improve during H2 with recently launched state financing support. The Central European winter tyre market has been weak and competitive, but we expect some improvement and an upturn in H2/2013.

During the present phase of slower market growth we continue to develop and improve productivity and our industrial structure. In Q1 we commissioned another line (line 12) in the Russian factory and followed up in Q2 with installation of line 13. This is taking the annualized capacity in Russia to more than 15 million tyres by end of 2013.

We continue to expand our distribution network spearheaded by Vianor. We opened 84 new Vianor stores in the first half of the year, now totalling 1,121 stores in 26 countries. In Russia and CIS Nokian Hakka Guarantee dealership program includes over 2,700 tyre stores and car dealers. A new softer partner franchise model Nokian Authorized Dealer (NAD) has also been rolled out in H1 with 217 shops contracted in Italy, Germany and China.

We are looking into the rest of 2013 with confidence and fighting Hakkapeliitta spirit. After a slow start for the year we managed to improve operations in Q2 and expect to be able to improve our sales and EBIT in H2. With the newly launched next generation of Hakkapeliitta winter tyres and test winner winter and summer tyres, our product offering will be by far the best ever. Our tyre chains Vianor and NAD are to be expanded and our market geography in Russia and Northern Europe is looking comparatively healthy offering us a good base for profitable business. A stronger than expected raw material tailwind will help to offset softer prices and additional costs.”

Read the whole stock exchange release here.