Nokian Tyres plc Interim Report 7.5.2008 8.00 a.m.
INTERIM REPORT FOR NOKIAN TYRES PLC JANUARY-MARCH 2008
Strong sales growth and improved operating profit.
The Group's net sales were up by 23.2% to EUR 246.3 million (EUR 199.9 million
in Jan-March 2007). Operating profit rose to EUR 54.4 million (EUR 39.0
million), while earnings per share increased to EUR 0.36 (EUR 0.23). In 2008,
the company is positioned to achieve strong growth in sales and to outperform
the previous year's results. All profit centres are expected to grow and improve
results.
Key figures:
MEUR
Q1/08 Q1/07 Q2/07 Q3/07 Q4/07 2007
Net sales 246.3 199.9 232.6 236.0 356.4 1,025.0
Operating profit 54.4 39.0 50.2 51.6 93.2 234.0
Profit before tax 49.8 35.6 46.9 46.4 85.0 213.8
Profit for the period 45.1 28.1 41.9 37.4 61.4 168.9
Earnings per share, EUR 0.36 0.23 0.34 0.30 0.50 1.37
Equity ratio, % 62.9 59.9 61.8
Cash flow from operations, -78.1 -103.7 -20.4 -89.6 319.4 105.6
(Cash Flow II)
RONA, % (rolling 12 months) 24.4 21.9 24.2
Gearing, % 27.1 40.8 14.3
Kim Gran, President and CEO:
“The first quarter gave a flying start for 2008: sales increased strongly in the
company's core markets, and operating profit saw a clear improvement over the
previous year. The majority of growth in sales came from Russia and other CIS
countries. Both sales of summer tyres and pre-sales of winter tyres were brisk.
The average price of tyres rose as a result of a good sales mix, successfully
implemented price increases and new products. Russian manufacture increased in
line with targets, and the advantages thereof improved the profitability. The
late onset of the summer tyres season is shifting Vianor's result to the second
quarter. The outlook for 2008 is good, and we expect the strong growth to
continue in our key markets."
Market situation
The replacement markets of passenger car tyres in Russia and the CIS countries
grew from the previous year. Markets declined slightly in the Nordic countries
and elsewhere in West Europe. The winter tyre, SUV tyre and high-speed summer
tyre markets accounted for the strongest growth. The main season for the
consumer sales of summer tyres shifted to the second quarter in the Nordic
countries and Russia. The demand for heavy special tyres and truck tyres
continued to be strong. Several tyre manufacturers raised the prices of their
products in response to the higher raw material prices.
NET SALES AND PROFIT
In the period January to March 2008, the Nokian Tyres Group recorded net sales
of EUR 246.3 million (EUR 199.9 million), showing an increase of 23.2% on the
corresponding period a year earlier. Compared with the previous year, the
Group's net sales increased by 1.4% in the Nordic countries, by 64.0% in Russia
and the CIS countries, by 33.7% in North America and fell by 8.8% in Eastern
Europe.
Raw material prices in manufacturing increased by 3.5% in the first quarter
compared to the corresponding period a year earlier.
At EUR 73.4 million (EUR 62.3 million), fixed costs accounted for 29.8% (31.2%)
of net sales.
Nokian Tyres Group's operating profit rose to EUR 54.4 million (EUR 39.0
million). In compliance with IFRS 2, operating profit was burdened by an
non-cash option scheme write-off of EUR 4.2 million (EUR 1.6 million).
Net financial expenses were EUR 4.6 million (EUR 3.4 million). Financial
expenses include EUR 1.8 million in calculatory non-cash expenses related to
convertible bonds. Net financial expenses contain EUR -1,7 million (EUR -0.3
million) of exchange rate differences.
Profit before taxes was EUR 49.8 million (EUR 35.6 million). The Group's tax
rate was reduced to 9.5% as a consequence of tax relieves in compliance with the
Russian agreements. Profit for the period amounted to EUR 45.1 million (EUR 28.1
million) and EPS was EUR 0.36 (EUR 0.23).
The return on net assets (RONA, rolling 12 months) was 24.4% (21.9%). Income
financing after the change in working capital, investments and the disposal of
fixed assets (cash flow II) was EUR -78.1 million (EUR -103.7 million). Equity
ratio was 62.9% (59.9%).
The Group employed an average of 3,661 (3,397) people, and 3,706 (3,513) at the
end of the period. The Vianor tyre chain had 1,461 (1,372) employees at the end
of the period. The number of employees in Russia increased to 521 (376).
Tax rate
The company's tax rate has reduced as a consequence of tax relieves in Russia.
The tax relief is valid for as long as the company gains tax on yields
corresponding to the amount of the Russian investment, and for two years
thereafter.
As the tax relief from Russia has realised according to the agreements and the
uncertainty linked to the relief has reduced materially, the company has revised
its accounting estimate relating to the recognition of tax assets from the tax
relief. The tax asset from the relief is recognised from now on to the probable
realisation value. Due to this change in accounting estimate the first quarter
in 2008 contains a non-recurring EUR 6.5 million tax relief from the second half
of 2007.
The company anticipates the tax rate of the entire year 2008 to be approx. 18%.
PASSENGER CAR TYRES
Q1/08 Q1/07 Change,% Q2/07 Q3/07 Q4/07 2007
Net sales, 190.1 141.4 34.4 146.6 169.7 233.5 691.2
EUR million
Operating profit, 65.0 41.6 56.3 42.0 54.2 74.2 212.0
EUR million
Operating profit, % 34.2 29.4 28.6 32.0 31.8 30.7
RONA,% 33.6 27.4 31.2
(rolling 12 months)
The net sales from Nokian passenger car tyres were up by 34.4% on the previous
year to EUR 190.1 million (EUR 141.4 million). Operating profit amounted to EUR
65.0 million (EUR 41.6 million) and the operating profit percentage was 34.2%
(29.4%). The raise in profits was due to the earlier start of the winter tyre
pre-sales.
Sales of both summer and winter tyres increased clearly over the previous year.
Russia and the other CIS countries accounted for most of the sales growth, but
sales also picked up from the previous year in the Nordic countries and the USA.
The best-selling summer tyres were the SUV and UHP tyres. During the period
under review, pre-sales of winter tyres began in Russia and the other CIS
countries. The sales were boosted by the new studless Nokian Hakkapeliitta R
winter tyre family, which will be launched for the consumers for the first time
in the autumn.
The average tyre prices rose from the previous year as a result of the good
sales mix, new products and successfully implemented price increases.
The production volume rose as a result of the planned capacity increase at the
Russian plant. Increased capacity was not, however, sufficient to meet the
demand for tyres, and sales had to be restricted to Central and Eastern European
countries.
HEAVY TYRES
Q1/08 Q1/07 Change,% Q2/07 Q3/07 Q4/07 2007
Net sales, 27.9 25.6 8.9 24.9 23.1 27.2 100.8
EUR million
Operating profit, 6.3 6.1 3.7 5.8 5.0 5.4 22.3
EUR million
Operating profit, % 22.7 23.8 23.2 21.8 19.9 22.1
RONA,% 38.1 38.9 39.0
(rolling 12 months)
The net sales of Nokian Heavy Tyres totalled EUR 27.9 million (EUR 25.6
million), showing an increase of 8.9% on the corresponding period of the
previous year. Operating profit improved slightly, totalling EUR 6.3 million
(EUR 6.1 million) and the operating profit percentage was 22.7% (23.8%).
The manufacturing of forestry and industrial machinery continued to be brisk,
and sales of Nokian heavy tyres saw growth over the previous year in the Nordic
countries and Central Europe. The increase was strongest in the sales of
forestry tyres, heavy industrial tyres, mining machinery tyres and special
radial agricultural tyres. During the first part of the year the company raised
prices, which, along with a good sales mix, raised average prices.
Although production capacity was in full use and production volumes increased as
planned, delivery capacity was insufficient to meet the high market demand. A
lack of tyre rims also restricted sales and shifted them to the second quarter.
VIANOR
Q1/08 Q1/07 Change,% Q2/07 Q3/07 Q4/07 2007
Net sales, 46.7 46.0 1.6 68.2 56.2 108.1 278.5
EUR million
Operating profit, -10.4 -5.7 -80.5 3.7 -1.4 11.9 8.4
EUR million
Operating profit, % -22.2 -12.5 5.5 -2.5 11.0 3.0
RONA,% 2.6 4.2 6.0
(rolling 12 months)
Vianor's net sales were EUR 46.7 million (EUR 46.0 million), an increase of 1.6%
on the corresponding period of the previous year. Operating profit amounted to
EUR -10.4 million (EUR -5.7 million), expressed as a percentage -22.2% (-12.5%).
Vianor's first quarter sales and profits were low. The spring season of summer
tyres and the sales of related services did not begin during the period under
review in the Nordic countries and Russia, but was shifted to the second
quarter.
The Vianor tyre chain expanded in Russia and Ukraine. At the end of March, the
Vianor network comprised a total of 382 sales outlets, 208 of which were partner
and franchising stores. During the first quarter, a total of 16 new Vianor
outlets were opened.
OTHER OPERATIONS
Truck Tyres
The net sales of Nokian truck tyres were EUR 4.9 million (EUR 4.5 million), up
9.4% on the previous year. The unit's product range mainly consists of winter
products, which do not sell very well at the beginning of the year due to the
seasonal nature of operations.
During the period under review, sales were directed at new market areas in
Ukraine, Poland and Bulgaria. Sales in Russia also developed well, thanks to an
expanded distribution network.
RUSSIA AND THE CIS COUNTRIES
During the period under review, sales in Russia and the CIS countries increased
by 64.0% compared to previous year, and market shares improved. The distribution
network was expanded by signing distribution agreements and through growth of
the Vianor network.
The four production lines of the Russian plant operate continuously in three
shifts, and the plant's production volume and quality level are on target.
An extension of 32,500 square metres has been built adjacent to the existing
plant, which currently has a capacity of four million tyres. Installation of
production machinery has proceeded according to plan, and parts of the new
production lines are already in operation. During 2008, production capacity
will be gradually increased with three new production lines. Also extension work
on the mixing department and the housing project “Hakkapeliitta Village” for the
personnel has commenced.
KAZAKHSTAN
On 19 October 2007, Nokian Tyres announced it had signed an agreement with the
Kazakhstanian multi-industrial company Ordabasy Corporation JSC to build a
green-field passenger car tyre factory in Kazakhstan. Nokian Tyres has a 10%
stake in the joint venture, with the option to increase its ownership to a
minimum of 50%.
Plant start-up is scheduled for 2009. The total investment will be approximately
EUR 160 million, financed through equity of approximately EUR 40 million and
external loans. Nokian Tyres has signed a long-term technical support and
management aid agreement with Ordabasy Corporation.
Construction work on the plant has not yet begun.
INVESTMENTS
Investments during the period under review amounted to EUR 42.7 million (EUR
30.2 million). The company's total investments in 2008 will be approximately EUR
170 million (EUR 117 million), and some EUR 110 million (EUR 92 million) will be
spent on the Russian plant's operations and extension. The remainder comprises
production investments in the Nokia plant, moulds for new products and the
Vianor expansion projects.
OTHER MATTERS
1. Stock options on the Main List of the Helsinki Stock Exchange
The Board of Directors of Nokian Tyres plc has decided to apply for the listing
of stock options 2004C on the Helsinki Stock Exchange effective as of 1 March
2008. There are a total of 245,000 2004C stock options. Each stock option 2004C
entitles the holder to subscribe to ten Nokian Tyres plc shares. The
subscription period for options 2004C commenced on 1 March 2008 and expires on
31 March 2010. The total amount of shares available for subscription with
options 2004C is 2,450,000. The subscription price with stock options 2004C was
EUR 12.28/share on 31st March, 2008. The annually paid dividends shall be
deducted from the share subscription price.
2. Shares subscribed for with stock options
After the increase in share capital registered on 20 December 2007, a total of
898,690 shares were subscribed for with the 2004A bonds with warrants attached
to the Nokian Tyres' Option Scheme of 2004, and 35,730 shares with the 2004B
warrants. The increase in share capital resulting from the subscription, EUR
186,884, was entered in the Trade Register on 26 February 2008. Trading of the
shares along with the old shares began on 27 February 2008. Following the
increase, the number of Nokian Tyres shares is 124,630,700 and the share capital
is EUR 24,926,140.
3. Share price development
The Nokian Tyres' share price was EUR 27 at the end of the review period (EUR
20.50). The average share price during the period was EUR 24.57 (EUR 17.02), the
highest EUR 28.44 (EUR 20.92) and the lowest EUR 19.04 (EUR 13.99). A total of
63,395,294 shares were traded during the period (79,826,504), representing 51%
(65%) of the company's overall share capital. The company's market value at the
end of the period amounted EUR 3,365 billion (EUR 2.514 billion). The company's
percentage of Finnish shareholders was 26% (34%) and 74% (66%) were foreign
shareholders registered in the nominee register. This figure includes
Bridgestone's ownership of approximately 16%.
4. Decision made at the Annual General Meeting
The Annual General Meeting of Nokian Tyres held on 3 April 2008 accepted the
profit and loss statement for 2007 and discharged the Board of Directors and the
President from liability. The final dividend was set at EUR 0.50 per share. The
matching date was 8 April 2008 and the payment date 15 April 2008.
4.1 Board of Directors and auditor
The number of Board members was set at seven. Kim Gran, Hille Korhonen, Hannu
Penttilä, Koki Takahashi, Aleksey Vlasov and Petteri Walldén will continue as
Board members. Kai Öistämö was elected as a new member of the Board. In a
meeting held after the Annual General Meeting, Petteri Walldén was elected
Chairman of the Board.
Authorised public accountants KPMG Oy Ab continue as auditors.
4.2 Remuneration of the Board members
The Annual General Meeting decided that the monthly fee paid to the Chairman of
the Board would be EUR 5,833, or EUR 70,000 per year, while that paid to Board
members was set at EUR 2,917, or EUR 35,000 per year. It was also decided that
each member of the Committee will receive a meeting fee of EUR 500 for each
Committee meeting attended.
In addition, it was decided that, according to the existing practices, 60% of
the annual fee be paid in cash and 40% in company shares, such that in the
period from 4 April to 30 April 2008, EUR 28,000 worth of Nokian Tyres plc
shares will be purchased at the stock exchange on behalf of the Chairman of the
Board and EUR 14,000 worth of shares on behalf of each Board member. This
decision means that the final remuneration paid to Board members is tied to the
company's share performance. No separate compensation will be paid to the
President and CEO for Board work.
4.3 Changes to the Articles of Association
The decision was made to make the following changes to the Articles of
Association:
- sections 3 and 4 of the present Articles of Association will be removed and
the numbering will be revised correspondingly
- section 5 of the Articles of Association will be changed to the following:
“The company's shares belong to the book-entry securities system”
- section 8 of the Articles of Association will be changed to the following:
“Both the Managing Director and the Chairman of the Board may represent the
company alone, and the members of the board, two together.”
- section 10 of the Articles of Association will be changed to the following:
“The company will have one auditor, who must be approved by the Central Chamber
of Commerce. The term of office of the auditor ends with the election of the
following auditor at the Annual General Meeting.”
- section 11 of the Articles of Association will be changed to the following:
“The invitation to the Annual General Meeting must be published no earlier than
three months and no later than one week before the date referred to in Chapter
4:2§ Clause 2 of the Limited Liabilities Companies Act, in accordance with the
board decision, on the company's website and in one national and in one Tampere
regional daily newspaper.”
- section 12 of the Articles of Association will be changed to the following:
“In order to be able to participate in the Annual General Meeting, shareholders
must inform the company no later than the day stated in the meeting invitation,
which may be no earlier than ten days before the meeting. The method of voting
is determined by the chairman of the Annual General Meeting.”
- section 13 of the Articles of Association will be changed to the following:
“The Annual General Meeting must be held annually on a date specified by the
Board of Directors before the end of May. The Annual General Meeting is held in
accordance with the decision by the Board, either at the registered office of
the company or in Tampere or in Helsinki.
The Annual General Meeting must present
1. annual accounts, including profit and loss account, balance sheet and annual
report,
2. auditor's report;
to be decided
3. confirmation of the company's annual accounts,
4. use of profit based on the balance sheet,
5. discharge from liability of the Board members and the Managing Director,
6. remuneration for the Board members and auditor,
7. number of Board members
to be elected
8. Board members,
9. auditor
- section 14 of the Articles of Association will be changed to the following:
”The annual accounts, the Board's annual report and other documents relating to
company operations must be submitted to the auditor by the end of March, and the
auditor must submit his/her report to the Board before 15th April.”
RISKS, INSECURITY FACTORS AND LITIGATIONS IN THE NEAR FUTURE
Roughly 35% of the Group's net sales are generated from euro-denominated sales.
The most important sales currencies in addition to the euro are the Russian
rouble, the U.S. dollar and the Swedish and Norwegian krona. A change of one per
cent in the EUR/RUB exchange rate would cause a change of approximately EUR 4.0
million in the company's net sales. A corresponding change in the EUR/USD
exchange rate would cause a change of approximately EUR 0.5 million in the
company's net sales. A change of one per cent in the EUR/SEK and EUR/NOK
exchange rates would cause a change of roughly EUR 1 million in the company's
net sales.
Nokian Tyres' future risks and uncertainty factors have to do with the
development of the growing markets, the success of winter tyre sales in the key
markets, and the development of raw material prices. The Russian plant capacity
increase has been implemented as planned, but future success depends on the
availability of skilled personnel.
Nokian Tyres has certain pending legal proceedings and litigations in some
countries. At this moment, the company does not expect these proceedings to have
any material impact on the performance or future outlook.
OUTLOOK FOR 2008
The economic growth of Russia and the CIS countries is expected to continue at a
brisk pace. The strong growth in the sales of new cars and the expansion of the
car park is also expected to continue in the next coming years.
Nokian Tyres' prospects for 2008 are good. Demand is increasing for winter
tyres, UHP summer tyres and SUV tyres, particularly in Russia, the CIS countries
and Eastern Europe. In North America, too, prospects in the winter tyre market
have improved, whereas in the Nordic countries and Western Europe markets remain
flat. Manufacture of forestry machinery as well as other machinery and equipment
is active, and the global shortage of heavy special tyres is continuing.
Raw material prices for the whole year 2008 are estimated to be about 7.0%
higher than the previous year. Nokian Tyres' average prices will rise as a
result of new products, improved sales and product mix and price increases.
The company will continue to launch a large number of new products, which,
together with an enhanced distribution network, offer good opportunities for
sales growth and for achieving the desired profit margin. Tyres manufactured in
Russia represent an increasingly large proportion of the Group's sales, which
contributes to sustaining a good profit margin.
Nokian Tyres pays specific attention to growth projects, sales and logistics
management, as well as to expanding the distribution network. Capacity will be
raised in accordance with an accelerated plan in Russia. Heavy Tyres will focus
on production bottlenecks in order to further increase capacity.
Traditionally, the sales and performance of Nokian Tyres are focused on the
second half of the year, and in particular on the last quarter of the year,
owing to the seasonal nature of the operations and the high share of winter
tyres. Growth in Russia and the higher share of pre-sales of tyres have brought
some balance to the seasonality, which shows in more evenly divided sales and
profits within the year.
The year's second quarter has begun as planned, the order book is larger than
last year, and production capacity is higher.
In manufacturing, profit growth in the second quarter will be slightly more
moderate than in the corresponding period a year earlier. Vianor's profit will
improve significantly from its level at the start of the year.
In 2008, the company is positioned to achieve strong growth in sales and to
outperform the previous year's results. All profit centres are expected to grow
and improve their results.
This interim report has been prepared in accordance with IFRS
compliant recognition and measurement principles and the same
accounting policies as in the most recent annual financial
statements, but it has not been prepared in compliance with all
requirements set out in IAS 34 'Interim Financial Reporting'.
The interim report figures are unaudited.
NOKIAN TYRES
CONSOLIDATED INCOME STATEMENT
Million euros 1-3/08 1-3/07 Last 12 1-12/07 Change %
months
Net sales 246.3 199.9 1,071.3 1,025.0 23.2
Cost of sales -133.4 -109.4 -593.1 -569.1 21.9
Gross profit 112.9 90.5 478.2 455.8 24.7
Other operating income 0.3 0.4 2.3 2.4 -19.5
Selling and marketing
expenses -47.8 -40.6 -186.6 -179.4 17.9
Administration expenses -6.1 -5.1 -24.5 -23.5 19.4
Other operating expenses -4.9 -6.2 -20.0 -21.3 -21.4
Operating profit 54.4 39.0 249.4 234.0 39.4
Financial income 19.0 5.6 76.4 63.1 239.6
Financial expenses -23.6 -9.0 -97.8 -83.3 160.9
Profit before tax 49.8 35.6 228.0 213.8 40.0
Tax expense (1 -4.7 -7.4 -42.1 -44.9 -36.7
Profit for the period 45.1 28.1 185.9 168.9 60.3
Attributable to:
Equity holders of the parent 45.1 28.1 185.9 168.9
Minority interest 0.0 0.0 0.0 0.0
Earnings per share from the profit
attributable to equity holders of
the parent
basic, euros 0.36 0.23 1.51 1.37 58.3
diluted, euros 0.35 0.22 1.45 1.31 58.6
KEY RATIOS 31.3.08 31.3.07 31.12.07 Change %
Equity ratio, % 62.9 59.9 61.8
Gearing, % 27.1 40.8 14.3
Equity per share, euro 6.10 4.78 5.76 27.7
Interest-bearing net debt,
mill, euros 206.5 239.6 102.0
Capital expenditure,
mill, euros 42.7 30.2 117.1
Depreciation, mill, euros 12.9 11.1 47.1
Personnel, average 3,661 3,397 3,462
Number of shares (million units)
at the end of period 124.63 122.65 123.70
in average 124.06 122.48 122.95
in average, diluted 131.83 126.75 129.09
1) Tax expense in the consolidated income statement is
based on the taxable profit for the period.
CONSOLIDATED BALANCE SHEET 31.3.08 31.3.07 31.12.07
Non-current assets
Property, plant and equipment 447.0 369.4 419.9
Goodwill 52.6 52.6 52.8
Other intangible assets 7.5 8.1 7.5
Investments in associates 0.1 0.1 0.1
Available-for-sale
financial assets 0.3 0.2 0.2
Other receivables 12.3 0.7 12.8
Deferred tax assets 20.3 19.7 17.7
Total non-current assets 540.0 450.8 511.0
Current assets
Inventories 219.3 198.1 193.2
Trade and other receivables 394.1 313.9 293.0
Cash and cash equivalents 58.9 17.6 158.1
Total current assets 672.3 529.6 644.3
Equity
Share capital 25.0 24.6 24.7
Share premium 154.9 143.6 149.0
Translation reserve -20.8 -1.0 -12.8
Fair value and hedging reserves 0.0 -0.1 0.0
Retained earnings 601.7 419.4 551.9
Minority interest 0.0 0.0 0.0
Total equity 760.9 586.5 712.8
Non-current liabilities
Deferred tax liabilities 28.4 22.8 30.1
Interest bearing liabilities 250.8 113.5 248.7
Other liabilities 2.3 1.9 2.4
Total non-current liabilities 281.5 138.1 281.1
Current liabilities
Trade and other payables 154.2 110.9 148.9
Provisions 1.1 1.0 1.1
Interest-bearing liabilities 14.7 143.7 11.4
Total current liabilities 170.0 255.7 161.4
Total assets 1,212.3 980.4 1,155.4
CONSOLIDATED CASH FLOW STATEMENT 1-3/08 1-3/07 1-12/07
Million euros
Cash flows from operating
activities:
Cash generated from
operations -26.1 -74.1 206.2
Financial items and taxes -37.6 -11.7 -36.3
Net cash from operating
activities -63.8 -85.8 169.9
Cash flows from investing
activities:
Net cash used in investing
activities -46.1 -28.9 -117.7
Cash flows from financing
activities:
Proceeds from issue of share
capital 6.1 1.0 6.5
Change in current financial
receivables and debt 2.2 89.3 -44.4
Change in non-current financial
receivables and debt 3.0 3.0 143.9
Dividends paid 0.0 0.0 -38.0
Net cash from financing
activities 11.3 93.3 68.0
Net change in cash and cash
equivalents -98.5 -21.5 120.3
Cash and cash equivalents at
the beginning of the period 158.1 39.0 39.0
Effect of exchange rate changes 0.6 -0.1 1.2
Cash and cash equivalents at
the end of the period 58.9 17.6 158.1
-98.5 -21.5 120.3
The effect of exchange rate changes EUR 0.6 million in 2008
is included in the net cash from operating activities.
In 2007 that effect was EUR -0.1 million.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Million euros
Fair
value Mino-
Trans- and Retai- rity
Share Share lation hedging ned inte-
capital premium reserve reserves earnings rest Total
Equity,
Jan 1st 2007 24.5 142.7 -2.2 -0.1 391.6 0.0 556.6
Interest rate
swaps, net of
tax 0.1 0.1
Translation
differences 1.3 1.3
Gains/losses
from hedge of
net investments
in foreign
operations,
net of tax -0.1 -0.1
Profit for
the period 28.1 28.1
Total recogni-
sed income and
expenses for
the period 0.0 0.0 1.2 0.1 28.1 0.0 29.4
Exercised
warrants 0.1 0.9 1.0
Share-based
payments 1.6 1.6
Other changes -2.0 -2.0
Change in
minority inte-
rest 0.0
Equity,
Mar 31st 2007 24.6 143.6 -1.0 -0.1 419.4 0.0 586.5
Equity,
Jan 1st 2008 24.7 149.0 -12.8 0.0 551.9 0.0 712.8
Interest rate
swaps, net of
tax 0.1 0.1
Translation
differences -12.4 -12.4
Gains/losses
from hedge of
net investments
in foreign
operations,
net of tax 4.4 4.4
Profit for
the period 45.1 45.1
Total recogni-
sed income and
expenses for
the period 0.0 0.0 -7.9 0.1 45.1 0.0 37.3
Exercised
warrants 0.2 5.9 6.1
Share-based
payments 4.2 4.2
Other changes 0.3 0.3
Change in
minority inte-
rest 0.0
Equity,
Mar 31st 2008 25.0 154.9 -20.8 0.2 601.7 0.0 760.9
SEGMENT INFORMATION 1-3/08 1-3/07 1-12/07 Change %
Million euros
Net sales
Passenger car tyres 190.1 141.4 691.2 34.4
Heavy tyres 27.9 25.6 100.8 8.9
Vianor 46.7 46.0 278.5 1.6
Others and eliminations -18.4 -13.1 -45.6 -40.8
Total 246.3 199.9 1,025.0 23.2
Operating result
Passenger car tyres 65.0 41.6 212.0 56.3
Heavy tyres 6.3 6.1 22.3 3.7
Vianor -10.4 -5.7 8.4 -80.5
Others and eliminations -6.6 -2.9 -8.7 -124.6
Total 54.4 39.0 234.0 39.4
Operating result, % of net sales
Passenger car tyres 34.2 29.4 30.7
Heavy tyres 22.7 23.8 22.1
Vianor -22.2 -12.5 3.0
Total 22.1 19.5 22.8
Cash Flow II
Passenger car tyres -44.4 -83.2 102.3 46.6
Heavy tyres -6.6 -5.9 21.0 -12.4
Vianor -12.9 -7.7 -5.6 -66.2
Total -78.1 -103.7 105.6 24.7
CONTINGENT LIABILITIES 31.3.08 31.3.07 31.12.07
Million euros
FOR OWN DEBT
Mortgages 1.0 0.0 1.0
Pledged assets 41.6 0.0 0.0
OTHER OWN COMMITMENTS
Guarantees 1.4 1.0 1.0
Leasing and rent commitments 93.7 83.9 89.9
Acquisition commitments 27.1 6.2 28.2
INTEREST RATE DERIVATIVES
Interest rate swaps
Notional amount 14.9 15.4 15.0
Fair value 0.0 -0.1 0.1
FOREIGN CURRENCY DERIVATIVES
Currency forwards
Notional amount 395.8 245.6 312.1
Fair value 7.1 1.8 2.6
Currency options, purchased
Notional amount 23.5 39.4 4.8
Fair value 0.5 0.3 0.1
Currency options, written
Notional amount 23.5 36.9 4.8
Fair value -0.2 -0.4 0.0
The fair value of interest rate derivatives is defined by cash flows
due to contracts. Interest rate swaps are wholly designated as cash
flow hedges and their changes in fair value relating to the effective
portion of the hedge is recognised in equity and the potential
ineffective portion is recognised in the income statement.
The fair value of forward exchange contracts is calculated at the
forward rates on the balance sheet closing date on the basis of cash
flows arising from contracts. The fair value of currency options is
calculated using the Garman-Kohlhagen option valuation model.
Foreign currency derivatives are only used to hedge the Group's net
exposure. The changes in fair value of foreign currency derivatives
are reported in the income statement excluding the foreign currency
derivatives that are hedging the foreign currency denominated net
investment in a foreign subsidiary. Hedge accounting is applied for
those hedges and for hedges meeting the hedge accounting criteria the
changes in fair value are wholly deferred in equity except for the
potential ineffective portion and the time value of currency options,
which are recognised in the income statement.
The notional amount of foreign currency derivatives is the euro
equivalent of the contracts' currency denominated amount on the
balance sheet closing date.
Nokian Tyres plc
Raila Hietala-Hellman
Vice President, Corporate Communications
Further information: Mr. Kim Gran, President and CEO,
Tel: +358 10 401 7336
Distribution: OMX and major media
***
Nokian Tyres plc will publish the interim report January-March on Wednesday May
7, 2008 at 8.00 am Finnish time.
The result presentation to analysts and media will be held in Helsinki at 10.00
am Finnish time.
The presentation can be listened through audiocast via internet at
http://www.nokiantyres.com/resultinfo2008q1
To be able to ask questions during the event you can participate in the
conference call. Please dial in 5-10 minutes before the beginning of the event:
+44 (0)20 7162 0025
Password: Nokian Tyres
Stock exchange release and presentation material will be available before the
event from http://www.nokiantyres.com/ir-calendar
After the event the audio recording can be downloaded from the same page.