Wed November 1 08:00 am 2017 in category Stock exchange releases

Nokian Tyres plc Interim Report January–September 2017: Strong performance with solid full year expectations

Nokian Tyres plc Interim Report January–September 2017, November 1, 2017, 8:00 a.m.

This release is a summary of Nokian Tyres’ Interim Report January–September 2017. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.

July–September 2017

• Net sales increased by 14.5% to EUR 363.1 million (317.2 in 7–9/2016). Currency exchange rate changes affected net sales negatively by EUR 0.2 million compared with the rates in 7–9/2016.
• Operating profit increased by 21.3% to EUR 89.8 million (74.1). Operating profit percentage was 24.7% (23.3%).
• The profit for the period decreased by 82.8% to EUR 10.2 million (59.4) and included additional taxes and punitive interest of EUR 59 million related to tax year 2011.  
• Earnings per share were EUR 0.08 (0.44).
• Cash flow from operating activities was EUR -88.1 million (-52.5).

January–September 2017

• Net sales increased by 16.3% to EUR 1,082.0 million (930.5 in 1–9/2016). Currency exchange rate changes affected net sales positively by EUR 32.0 million compared with the rates in 1–9/2016.
• Operating profit increased by 20.2% to EUR 242.8 million (202.0). Operating profit percentage was 22.4% (21.7%).
• The profit for the period decreased by 21.1% to EUR 126.7 million (160.6). In Q3/2017, profit included additional taxes and punitive interest of EUR 59 million related to tax year 2011.  
• Earnings per share were EUR 0.93 (1.19).
• Cash flow from operating activities was EUR -134.1 million (-92.5).

Financial guidance (reiterated)
In 2017, with the current exchange rates, net sales and operating profit are expected to grow by at least 10% compared to 2016.

Key figures, EUR million

	7–9 /17	7–9 /16	Change %	1–9 /17	1–9 /16	Change %	2016
Net sales	363.1	317.2	14.5	1,082.0	930.5	16.3	1,391.2
Operating profit	89.8	74.1	21.3	242.8	202.0	20.2	310.5
Operating profit %	24.7	23.3		22.4	21.7		22.3
Profit before tax	67.4	69.2	-2.5	213.4	192.4	10.9	298.7
Profit for the period	10.2	59.4	-82.8	126.7	160.6	-21.1	251.8
Earnings per share, EUR	0.08	0.44	-83.0	0.93	1.19	-21.9	1.87
Equity ratio, %				71.3	71.9		73.8
Cash flow from operating activities	-88.1	-52.5		-134.1	-92.5		364.4
Gearing, %				8.5	9.3		-19.7
Interest-bearing net debt				116.6	121.0		-287.4
Capital expenditure	35.3	30.0	17.6	95.3	74.4	28.0	105.6

Hille Korhonen, President and CEO:

“In January–September 2017, Nokian Tyres demonstrated strong performance in all of its main markets. Our net sales and operating profit improved.

The Passenger Car Tyres business unit showed strong growth during 1–9/2017. Net sales increased in all markets. Operating profit increased clearly year-over-year. In Europe, the trend of sales shifting towards the consumer season has continued. We have been responding to the growing demand by increasing the production volumes at both factories and by building a new production line at the Russian factory. The new line has now been taken into use. In Q3/2017, raw material costs decreased slightly compared with Q2/2017. We estimate that raw material costs will increase by approximately 20% for the full year 2017 compared with 2016. We have implemented the necessary price increases in all markets, and the effect is already visible. We have continued to build the foundation for future growth by launching new products for all our markets.

Heavy Tyres increased its sales, operating profit and production volume. All product segments and market areas showed growth. In particular, sales of agricultural tyres were strong.

Vianor’s (own equity) net sales increased slightly but were affected by the tough pricing environment. The profitability improvement program is proceeding according to plan. Our branded distribution network, including Vianor, NAD, and N-Tyre stores, grew by 232 stores during 1–9/2017.

In September, we held a groundbreaking ceremony in Dayton (Tennessee, USA) to celebrate the beginning of the building work of our third factory. The new factory will be our first manufacturing facility in North America. The site will also house a distribution facility with a storage capacity of 600,000 tyres. Construction is scheduled to begin in early 2018, and production is planned to begin in 2020. Our ambition is to double our sales within North America in the next five years. Our goal is to lead the tyre industry in sustainable manufacturing as well as to make sure that our company is the employer of choice within the greater communities it serves.

In October, we received a tax reassessment decision from the Tax Administration regarding tax year 2011. We consider the reassessment decision of the Tax Administration to be unfounded and we are going to appeal to the Board of Adjustment and, if necessary, continue the appeal process in the Administrative Court.

Our employees have done a great job in improving all aspects of sustainability in our company. Our determination to be a sustainability pioneer in the tyre industry is demonstrated by our safe and eco-friendly products, as well as our inclusion in DJSI World. We are definitely on the right track, and the conditions are great for further improving our operations.”

BUSINESS UNIT REVIEWS  

Passenger Car Tyres  

	7–9 /17	7–9 /16	Change %	1–9 /17	1–9 /16	Change %	2016
Net sales, M€	276.2	234.6	17.7	800.6	667.1	20.0	981.1
Operating profit, M€	98.3	84.4	16.5	259.0	211.4	22.5	305.8
Operating profit, %	35.6	36.0		32.4	31.7		31.2

Heavy Tyres

	7–9 /17	7–9 /16	Change %	1–9 /17	1–9 /16	Change %	2016
Net sales, M€	42.1	37.3	12.9	125.9	113.6	10.8	155.3
Operating profit, M€	7.9	6.0	31.3	22.8	21.0	8.1	28.2
Operating profit, %	18.8	16.2		18.1	18.5		18.2

Vianor  

Equity operations

	7–9 /17	7–9 /16	Change %	1–9 /17	1–9 /16	Change %	2016
Net sales, M€	68.7	66.7	2.9	214.7	209.9	2.3	334.8
Operating profit, M€	-7.0	-6.7**	-5.5	-18.9*	-15.9***	-19.1	-8.1
Operating profit, %	-10.3	-10.0**		-8.8*	-7.6***		-2.4
Equity stores, pcs				196	206		212

* Excluding non-recurring items: Operating profit EUR -17.2 million, operating profit percentage -8.0%.
** Excluding non-recurring items: Operating profit EUR -5.7 million, operating profit percentage -8.5%.
*** Excluding non-recurring items: Operating profit EUR -14.9 million, operating profit percentage -7.1%.

Press and analyst meetings  

Nokian Tyres published its Interim Report for January–September 2017 on November 1, 2017 at 8.00 a.m. Finnish time.

The result presentation for analysts and media will be held on November 1, 2017 at 10.00 a.m. Finnish time at Hotel Kämp (address Pohjoisesplanadi 29, Helsinki). President and CEO Hille Korhonen will present the interim report and answer questions from the audience.

The presentation can be listened to as an audiocast over the Internet at
www.nokiantyres.com/resultinfo-Q3-2017 starting at 10 a.m.

The event can also be attended via conference call. Please dial in 5-10 minutes before the beginning of the event:

FI: +358981710495
UK: +442031940552
SE: +46856642702
US: +18557161597

An audio file of the event will be available on the company’s website later same day.

Reporting schedule 

The Financial Statement Bulletin 2017 will be published on February 2, 2018. Releases and company information will be available at: www.nokiantyres.com/company/investors/. 

Further information:
Hille Korhonen, President and CEO, tel: +358 10 401 7733

Nokian Tyres plc

Antti-Jussi Tähtinen, Vice President, Marketing and Communications

Distribution: Nasdaq Helsinki, media, www.nokiantyres.com 

Attachment: Nokian Tyres’ Interim Report January–September 2017 

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Attachments

Interim Report January-September 2017 
Presentation