Tue October 30 08:02 am 2012 in category Stock exchange releases
Nokian Tyres plc Stock Exchange Release 30 October 2012, 8 a.m.

Nokian Tyres plc Interim Report January-September 2012: Solid sales and result despite softer Q3

Nokian Tyres group’s net sales increased by 19.7% to EUR 1,166.0 million (EUR 974.3 million in 1-9/2011). Operating profit grew to EUR 303.3 million (EUR 261.0 million). Earnings per share increased to EUR 1.85 (EUR 1.66).

Demand for car tyres in Q4 is expected to improve seasonally in Nokian Tyres’ core markets due to the consumer winter tyre sales. Demand in Nordic countries is expected to be flat year-over-year and to grow in Russia on the back of growth in GDP, car sales and an expanding replacement market. In Central Europe the demand will be determined by winter conditions and how successfully inventories in distribution are converted to consumer sales.

Nokian Tyres has during 2012 further improved its position by winning market shares in all markets in winter tyres, especially in Russia and Central Europe. The company’s full year sales in the Nordic countries are expected to be on previous year’s level and in Russia sales will improve clearly compared to 2011. The visibility for Central European sales in Q4 is poor but expected to be below 2011.

Financial guidance (unchanged):
In 2012, the company is positioned to improve Net sales and Operating profit compared to 2011.

Kim Gran, President and CEO:
"Nokian Tyres performed well in a challenging environment even though the third quarter results were below our plans. Our sales in Russia continued to grow more than the market also in Q3 and the Nordic countries sales came in as planned. Our car tyre sales in total improved, but a clearly weaker market and distributor carry-over winter tyre inventories in Central Europe hurt our mix and ASP in Q3, which resulted in lower margins. Cumulatively our Operating profit is well ahead of last year. In the review period improved productivity and successful cost control, as well as higher ASP, were the main factors for good profits.

Our car tyre market shares improved clearly in Russia and in CE on the back of an expanding distribution network, launch of new products, and excellent test results both for summer and winter tyres. In October we have dominated the car magazines’ winter tyre tests in the Nordic countries and Russia, and also scored significant wins in Central Europe which is expected to pay off in the consumer winter tyre season.

A continuous expansion of our distribution network is a cornerstone for our growth. It is encouraging that in a tougher market during the review period we managed to open 76 new Vianor stores, now totalling 986 stores in 24 countries. We will reach our target of exceeding 1,000 stores by the end of 2012.

Increasing production in our Russian factory boosted output (tons) by 16% versus 1-9/2011. Due to a weaker market and lower visibility we decided to cut production volumes during H2 in Finland in order to secure productivity and the ramp up of capacities in Russia.

With the new factory up and running we have presently an inbuilt capability to increase output rapidly to meet market growth without capex and to increase output 50% from existing factories by adding production lines in Russia.

There continues to be dark clouds in the market horizon as Global growth has been slowing down with Europe underperforming the rest of the world. Distribution customers in all markets have been limiting risks by carrying low stock but seasonal winter tyres sales will improve demand in Q4. The fourth quarter consumer winter sales will again be decisive for full year results. Our market geography in Russia and Northern Europe is looking comparatively healthy and offer us good potential."

Read the whole stock exchange release here