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Financial responsibility

Our financial responsibility is based on our company’s financial success and ability to create value for stakeholders.

Nokian Tyres contributes to society and communities through the payment of salaries and taxes. We directly employ around 4,800 people around the world. When we include all of our subcontractors, our role as a job creator ecomes even more significant. Our tire factories are
significant employers. The salaries and taxes that we pay support the structures of society and improve the quality of life for thousands of people.

Profitable growth benefits everyone. Nokian Tyres’ ambition is to continue to be the market leader in the Nordic countries and Russia and to grow faster than the market in other main markets. Over a five-year period of 2018–2022, the target is to grow by 50% in Central Europe and double sales in North America.

Heavy Tyres’ ambition is to grow by 50% in four years. With own Vianor, we wanted to increase the EBITDA to +3% by the end of 2019. This target was reached ahead of schedule in 2018.

In November 2018, Nokian Tyres’ Board of Directors decided on new financial targets for 2019–2021. They are:
• Growing faster than the market: CAGR above 5% with comparable currencies
• Healthy profitability: EBIT at the level of 22%
• Good returns for our shareholders: Dividend above 50% of net earnings

You can read more from our Financial Review 2018.

A EUR 100 MILLION LOAN AGREEMENT – TERMS LINKED TO SUSTAINABILITY TARGETS

In May 2019, Nokian Tyres signed a sustainability linked loan agreement with the OP Corporate Bank. The EUR 100 million five-year loan is used for paying off a similar sized loan which was due in May.

Sustainable financing is trending rapidly around the world, and Finnish companies are showing increasing interest towards these types of loan agreements. Financing that is linked to sustainability goals is a way for companies to match their finance strategies even more closely together with corporate sustainability. This makes the goals of corporate sustainability more concrete.

The margin of the loan will increase or decrease dependent on Nokian Tyres meeting three sustainability key performance indicators:

1. Commitment to the indicators defined according to the Science Based Targets initiative, which has been created to lower greenhouse gas emissions.

2. Auditing the human and labor rights in natural rubber processing plants.

3. Reducing workplace accidents.

”All three areas require more steps forward. Reaching our targets means continuous improvement”, says Nokian Tyres VP, Quality & Sustainability Teppo Huovila.

Concrete targets linked to financing also help the financiers to have a meaningful discussion on sustainability and supporting the progress of these targets together with clients.