Nokian Tyres reveals interim report for 2013

ERJ staff report (TP)

Nokia, Finland − Nokian Tyres released its Interim Report for January-September 2013 on 31 October, which showed a drop in net sales and operating profits, but a retention of its strong market position.

The group’s net sales decreased by 4.9% to €1.1bn, and operating profit was €292.2m – a fall from €303.3m in the same period of 2012. Profit for the period amounted to €220.1m, compared with €242.6m last year. Earnings per share stood at €1.66, a dip on €1.85 in January-September 2012.

According to Nokian Tyres: “The market demand for replacement car tires in Nordic countries and Central Europe have taken a turn for the better in H2 after a weak start for the year and are expected to be close to previous year's level in full year 2013. 

"Russia lower GDP growth and car sales still penalise tire demand in Q4 but there are signs of some recovery for both summer and winter tires going into 2014.

“Nokian Tyres' full year sales in Nordic countries are expected to show some growth, and to be on previous year's level in Central Europe. Despite a clear improvement in market share and growth of winter tire sales, full year sales is estimated to show some decrease in Russia and North America.

“The pricing environment for 2013 remains challenging for all tire categories. Nokian Tyres margins, however, are supported by an improved industrial structure combined with approximately 12.5% lower raw material costs (€/kg) offering a tailwind of some €50m in full year 2013. The unfavourable currency exchange rate development of the Russian Rouble during 2013 is estimated to generate a negative effect of approximately €25m on net sales and approximately €14m on operating profit of Nokian Tyres Group in full year 2013.

“Due to the weakened Rouble exchange rate and softer market demand for tires in Russia, Nokian Tyres' net sales and operating profit are estimated to be somewhat lower in the second half and full year 2013 compared to 2012. In 2014 the company estimates to be back on a profitable growth track.”

Kim Gran, President and CEO, said: “Our strong market leader position in the core markets in Russia and Nordic countries is intact and we managed again to increase both market share and our distribution footprint in all markets.”

He revealed the company continues to expand its distribution network spearheaded by Vianor. 124 new Vianor stores were opened in January to September 2013, now totalling 1,161 stores in 26 countries.

Gran said: “We are looking into the future with confidence and the fighting Hakkapeliitta spirit."

(Hakkapeliitta were well-trained Finnish light cavalrymen in the 16th and 17th centuries – famous for their lightning charges and courage.)

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Full press release can be found at The Wall Street Journal