Nokian Tyres plc Half Year Financial Report January–June 2021: Strong volume and profit growth

Nokian Tyres plc Half Year Financial Report January–June 2021: Strong volume and profit growth

Nokian Tyres plc Half Year Financial Report January–June 2021, August 3, 2021 at 2:00 p.m.

This release is a summary of Nokian Tyres’ Half Year Financial Report January–June 2021. The complete report is attached to this release. It is also available on the company website at www.nokiantyres.com/company/investors/.

April–June 2021

• Net sales were EUR 416.2 million (270.7 in April−June 2020) and grew by 53.7%. With comparable currencies, net sales increased by 54.8%.
• Segments operating profit was EUR 89.6 million (24.4), with negative currency impact of approximately EUR 5 million. Operating profit was EUR 81.8 million (-22.8).
• Segments earnings per share were EUR 0.51 (0.09). Earnings per share were EUR 0.47
  (-0.18).
• Cash flow from operating activities was EUR 9.3 million (25.3).

January–June 2021

• Net sales were EUR 758.0 million (550.5 in January−June 2020) and grew by 37.7%. With comparable currencies, net sales increased by 41.5%.
• Segments operating profit was EUR 139.9 million (40.8), with negative currency impact of approximately EUR 15 million. Operating profit was EUR 126.1 million (-13.7).
• Segments earnings per share were EUR 0.80 (0.16). Earnings per share were EUR 0.72
  (-0.16).
• Cash flow from operating activities was EUR -15.1 million (-13.6).

Guidance for 2021

In 2021, Nokian Tyres’ net sales with comparable currencies and segments operating profit are expected to grow significantly. 

The global car and tire demand is expected to pick up, but the COVID-19 pandemic continues to cause uncertainties for the development.

Jukka Moisio, President and CEO:

“Tire demand continued strong in the second quarter. Thanks to a great performance by all our business units and business areas, net sales increased by 54.8% with comparable currencies. Segments operating profit grew significantly driven by higher sales volume. 

In Passenger Car Tyres, volume growth was particularly strong in Russia. The higher share of Russian volume had a negative impact on the average sales price. 

To ensure the availability of our premium products, we operated the Russian factory at full capacity. In the US, we continued to ramp-up production to reach an output of around one million tires in 2021. In Finland, we are increasing our production capacity for passenger car tires by approximately 30% this year as announced in March. 

In the second quarter, our operating cash flow was positive despite the increasing working capital requirements. Capital expenditure was lower year-over-year in line with the 2021 plan.

Raw material costs started to increase in the second quarter and are estimated to have a significant negative impact in the second half of the year compared to 2020, together with increasing logistics costs. We are taking mitigating actions to reduce the impact of cost inflation.

In 2021, our focus will remain on growth and cash flow. New products and continuous improvements in go-to-market activities will help us build an even stronger foothold in our core markets. We want to benefit from a good momentum in the market while still acting prudently to keep our company strong and competitive for years to come.”

Key figures

EUR million	4–6 /21	4–6 /20	Change %	CC* Change %	1–6 /21	1–6 /20	Change %	CC* Change %	2020
Net sales	416.2	270.7	53.7%	54.8%	758.0	550.5	37.7%	41.5%	1,313.8
Operating profit	81.8	-22.8			126.1	-13.7			120.0
Operating profit %	19.6%	-8.4%			16.6%	-2.5%			9.1%
Profit before tax	79.6	-26.9			123.3	-21.2			106.0
Profit for the period	64.5	-24.8			100.0	-22.4			86.0
EPS, EUR	0.47	-0.18			0.72	-0.16			0.62
Segments operating profit	89.6	24.4			139.9	40.8			190.2
Segments operating profit %	21.5%	9.0%			18.5%	7.4%			14.5%
Segments EPS, EUR	0.51	0.09			0.80	0.16			1.04
Segments ROCE, %**					13.9%	10.6%			9.3%
Equity ratio, %					66.1%	63.3%			65.3%
Cash flow from operating activities	9.3	25.3			-15.1	-13.6			422.4
Gearing, %					9.4%	16.3%			-1.1%
Interest-bearing net debt					140.0	254.1			-17.2
Capital expenditure	23.4	36.6			39.3	87.5			149.9

* Comparable currencies
** Rolling 12 months

The definitions of alternative performance measures (non-IFRS figures) are presented in the report by the Board of Directors in Nokian Tyres Financial Review 2020.

BUSINESS UNIT REVIEWS

Passenger Car Tyres

EUR million	4–6 /21	4–6 /20	Change %	CC* Change %	1–6 /21	1–6 /20	Change %	CC* Change %	2020
Net sales	279.9	163.9	70.8%	74.9%	525.8	354.4	48.4%	55.3%	871.3
Segment operating profit	70.6	13.6			123.4	39.5			177.8
Segment operating profit %	25.2%	8.3%			23.5%	11.1%			20.4%

* Comparable currencies

Heavy Tyres

EUR million	4–6 /21	4–6 /20	Change %	CC* Change %	1–6 /21	1–6 /20	Change %	CC* Change %	2020
Net sales	62.6	40.5	54.8%	52.6%	119.7	91.6	30.7%	30.4%	194.6
Segment operating profit	11.7	2.6			24.3	10.8			23.7
Segment operating profit %	18.8%	6.4%			20.3%	11.8%			12.2%

* Comparable currencies
 

Vianor, own operations

EUR million	4–6 /21	4–6 /20	Change %	CC* Change %	1–6 /21	1–6 /20	Change %	CC* Change %	2020
Net sales	91.5	80.8	13.1%	8.0%	149.6	135.3	10.6%	6.5%	318.1
Segment operating profit	10.1	9.6			0.2	-2.8			4.0
Segment operating profit %	11.0%	11.8%			0.2%	-2.1%			1.3%
Number of own service centers at period end	174	186							174

* Comparable currencies
 

FINANCIAL REPORTING

Interim Report for January–September 2021: November 2, 2021

CAPITAL MARKETS DAY 2021

Nokian Tyres’ virtual Capital Markets Day 2021 for investors and analysts is scheduled for September 9, 2021.