Market share, net sales and profitability improved in Q3 year-over-year. Markets
in general flat, Russia stabilizing
Nokian Tyres plc Interim report November 1, 2016, 8.00 a.m.
This release is a summary of Nokian Tyres’ Interim report January–September
2016. The complete report is attached to this release. It is also available on
the company website at https://www.nokiantyres.com/company/investors/.
July–September 2016
· Net sales increased by 2.0% to EUR 317.2 million (311.0 in 7–9/2015).
· Operating profit increased by 2.4% to EUR 74.1 million (72.4). Operating
profit percentage was 23.3% (23.3%).
· The profit for the period increased by 2.9% to EUR 59.4 million (57.7).
· Earnings per share were EUR 0.44 (0.43).
· Cash flow from operating activities improved and was EUR -52.5 million (
-109.8).
January–September 2016
· Net sales decreased by 0.8% to EUR 930.5 million (937.9 in 1–9/2015).
Currency exchange rate changes affected net sales negatively by EUR 34.0 million
compared with the rates in 1–9/2015.
· Operating profit increased by 0.4% to EUR 202.0 million (201.2). Operating
profit percentage was 21.7% (21.5%).
· The profit for the period decreased by 37.6% to EUR 160.6 million (257.5).
In Q1/2015, the company returned the 2007–2010 total additional taxes and
punitive interest of EUR 100.3 million to the financial result based on the
annulment decision made by the Board of Adjustment of Finnish Tax
Administration. Excluding the tax decision, the profit for the period increased
by 2.1% compared to 1–9/2015.
· Earnings per share were EUR 1.19 (1.93).
· Cash flow from operating activities was EUR -92.5 million (-115.5), which
was affected by the payment of EUR 51.0 million in additional taxes with
punitive tax increases and interest concerning the tax years 2007–2010. The
company paid the amount in January 2016.
Financial guidance (reiterated)
In 2016, with the current exchange rates, net sales and operating profit are
expected to remain at the same level compared to 2015.
Key figures, EUR million
+-----------------+-----+------+------+-----+------+-------+-------+
| |7–9 |7–9 |Change|1–9 |1–9 |Change%|2015 |
| |/16 |/15 |% |/16 |/15 | | |
+-----------------+-----+------+------+-----+------+-------+-------+
|Net sales |317.2|311.0 |2.0 |930.5|937.9 |-0.8 |1,360.1|
+-----------------+-----+------+------+-----+------+-------+-------+
|Operating profit |74.1 |72.4 |2.4 |202.0|201.2 |0.4 |296.0 |
+-----------------+-----+------+------+-----+------+-------+-------+
|Operating profit |23.3 |23.3 | |21.7 |21.5 | |21.8 |
|% | | | | | | | |
+-----------------+-----+------+------+-----+------+-------+-------+
|Profit before tax|69.2 |64.6 |7.1 |192.4|201.3 |-4.4 |274.2 |
+-----------------+-----+------+------+-----+------+-------+-------+
|Profit for the |59.4 |57.7 |2.9 |160.6|257.5 |-37.6 |240.7 |
|period | | | | | | | |
+-----------------+-----+------+------+-----+------+-------+-------+
|Earnings per |0.44 |0.43 |2.2 |1.19 |1.93 |-38.2 |1.80 |
|share, EUR | | | | | | | |
+-----------------+-----+------+------+-----+------+-------+-------+
|Equity ratio, % | | | |71.9 |71.3 | |70.8 |
+-----------------+-----+------+------+-----+------+-------+-------+
|Cash flow from |-52.5|-109.8| |-92.5|-115.5| |283.4 |
|operating | | | | | | | |
|activities | | | | | | | |
+-----------------+-----+------+------+-----+------+-------+-------+
|Gearing, % | | | |9.3 |14.0 | |-16.9 |
+-----------------+-----+------+------+-----+------+-------+-------+
|Interest-bearing | | | |121.0|182.6 | |-209.7 |
|net debt | | | | | | | |
+-----------------+-----+------+------+-----+------+-------+-------+
|Capital |30.0 |24.5 |22.6 |74.4 |72.7 |2.4 |101.7 |
|expenditure | | | | | | | |
+-----------------+-----+------+------+-----+------+-------+-------+
Ari Lehtoranta, President and CEO:
“In the third quarter of 2016, the tyre markets have been quite stable, almost
flat. The winter tyre season continued shifting towards the fourth quarter. The
summer tyre season in Russia was a positive surprise and one of the first weak
signs of the economic situation stabilizing. Russia and CIS sales even grew
slightly, but the market remains at low level and there is no rapid growth yet
in sight.
Our production volumes were higher than last year, and productivity continued to
develop positively. Raw material costs started to increase, as forecasted, but
we still benefitted from our lower production costs. The cash flow was clearly
better compared to last year. We have also managed to increase our market share
in our target areas despite all the challenges.
The third quarter net sales in Passenger car tyres went up slightly from last
year, and so did the operating profit. ASP remained almost flat this quarter, as
the negative impact from currencies was at its smallest in a long time.
The weak markets pose a challenge to Heavy Tyres. Only the forest segment
continues to perform well. However, we have decided to continue making the
necessary investments for the future and, therefore, the operating profit has
declined slightly. Vianor’s net sales increased slightly, but profitability was
impacted by the tough pricing environment.
The growth of our branded distribution network was positive. The number of
Vianor, NAD, and N-Tyre outlets in our network grew by 141 in Q3/2016.
Currently, the network includes 3,079 stores in total.
We launched some exciting products during the quarter, and our products
continued to perform very well in magazine tests. Our product portfolio is again
slightly stronger than before.
High customer satisfaction, an excellent organization and the world’s safest
tyres lay a solid foundation for future growth. I will continue to work proudly
and at full speed until the end of this year to make another great year for
Nokian Tyres.”
BUSINESS UNIT REVIEWS
Passenger Car Tyres
+-----------------+-----+-----+------+------+-----+------+-----+
| |7–9 |7–9 |Change|1–9/16|1–9 |Change|2015 |
| |/16 |/15 |% | |/15 |% | |
+-----------------+-----+-----+------+------+-----+------+-----+
|Net sales, M€ |234.6|226.3|3.7 |667.1 |675.0|-1.2 |951.5|
+-----------------+-----+-----+------+------+-----+------+-----+
|Operating profit,|84.4 |75.6 |11.7 |211.4 |205.3|3.0 |285.5|
|M€ | | | | | | | |
+-----------------+-----+-----+------+------+-----+------+-----+
|Operating profit,|36.0 |33.4 | |31.7 |30.4 | |30.0 |
|% | | | | | | | |
+-----------------+-----+-----+------+------+-----+------+-----+
Heavy Tyres
+-----------------+----+----+------+-----+-----+-------+-----+
| |7–9 |7–9 |Change|1–9 |1–9 |Change%|2015 |
| |/16 |/15 |% |/16 |/15 | | |
+-----------------+----+----+------+-----+-----+-------+-----+
|Net sales, M€ |37.3|37.9|-1.6 |113.6|113.5|0.1 |155.3|
+-----------------+----+----+------+-----+-----+-------+-----+
|Operating profit,|6.0 |7.8 |-22.6 |21.0 |22.1 |-4.6 |28.7 |
|M€ | | | | | | | |
+-----------------+----+----+------+-----+-----+-------+-----+
|Operating profit,|16.2|20.6| |18.5 |19.4 | |18.5 |
|% | | | | | | | |
+-----------------+----+----+------+-----+-----+-------+-----+
Vianor
Equity-owned operations
+--------------------+--------+----+------+---------+-----+-------+-----+
| |7–9 |7–9 |Change|1–9 |1–9 |Change%|2015 |
| |/16 |/15 |% |/16 |/15 | | |
+--------------------+--------+----+------+---------+-----+-------+-----+
|Net sales, M€ |66.7 |66.4|0.4 |209.9 |208.2|0.8 |327.6|
+--------------------+--------+----+------+---------+-----+-------+-----+
|Operating profit, M€|-6.7 * |-6.0|-11.0 |-15.9 ** |-12.9|-22.4 |-1.9 |
+--------------------+--------+----+------+---------+-----+-------+-----+
|Operating profit, % |-10.0 * |-9.1| |-7.6 ** |-6.2 | |-0.6 |
+--------------------+--------+----+------+---------+-----+-------+-----+
* 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%.
Non-recurring items amounting to EUR 1 million include the write-off of an ICT
development project.
Press and analyst meetings
The result presentation for analysts and media will be held in Hotel Kämp in
Helsinki on November 1, 2016 at 10:00 a.m. Finnish time. An audio broadcast of
the presentation can be listened to online starting at 10 a.m. at:
www.nokiantyres.com/resultinfo-Q3-2016.
The event can also be attended via a conference call. Please dial in 5–10
minutes before the beginning of the event: FI +358 9 8171 0495, UK +44 20
31940552, SE +46 85 664 2702, US +1 855 7161597.
The stock exchange release and presentation material will be available before
the event from https://www.nokiantyres.com/company/investors/.
An audio recording of the event will be available on the company’s website later
on the same day.
Nokian Tyres result 2016 will be published on February 2, 2017. Releases and
company information will be available at:
https://www.nokiantyres.com/company/investors/.
Further information:
Mr. Ari Lehtoranta, 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 2016
Nokian Tyres is the world’s northernmost tyre manufacturer. The company promotes
and facilitates safe driving in demanding conditions. It supplies innovative
tyres for cars, trucks and special heavy machinery mainly in areas with special
challenges on tyre performance: snow, forests and harsh driving conditions in
different seasons. Nokian Tyres’ product development is consistently aiming
for sustainable solutions for safety and the environment, taking into account
the whole life cycle of the tyre. A part of the Nokian Tyres group, the tyre
chain Vianor has 1,482 outlets in 26 countries. In 2015 Nokian Tyres had
approximately 4,400 employees and net sales of approximately 1,4 billion euros.
Nokian Tyres’ share is listed on the Nasdaq Helsinki. Further information:
www.nokiantyres.com
