Nokian Tyres plc Q4 improvement

The Nokian Group’s net sales and operating profit increased in Q4 with all profit centres improving their results. Net sales grew by 10.3 per cent, to 528.7 million Euro (2002: 479.2 million Euro). Operating profit was 79.1 million Euro ( 60.1 million Euro). EPS were up to 4.48 Euro ( 3.17 Euro). The Board of Directors propose a dividend equalling 35 per cent of the net profit, that is 1.56 Euro ( 1.11 Euro) per share, to be distributed.
The situation in Nokian Tyres’ main markets and core products continued to show positive development, although global economic uncertainty, the weak US dollar and increasing raw material prices affected the tyre business overall. The demand for passenger car winter tyres, high-speed summer tyres and heavy special tyres increased in the key markets.
Nokian Tyres Group performed well in 2003. Net sales and operating profit were up and market shares improved considerably in the key markets. The Nordic countries, especially Sweden, as well as Eastern Europe and Russia, were the strongest sales regions of Nokian Tyres. The Vianor chain sold more Nokian tyres than the year before, especially in Sweden. Co-operation between manufacturing and Vianor produced a considerable increase in synergy benefits. The production volumes of the Nokia plant grew, as did the amount of contract manufacturing. Productivity also(kg/mh) improved, especially in the car tyre production.
Invoicing from outside Finland accounted for 68 per cent of the consolidated net sales. Group’s sales in the Nordic countries increased by 11.1 per cent, in Russia and other CIS countries by 21.4 per cent, in Eastern Europe by 17.8 per cent and in North America by 4.2 per cent on the previous year.
Profitability improved due to a better sales mix enhanced by new products, higher share of winter tyres, implemented price increases and improved productivity.
The net sales generated from the Nokian passenger car tyre business grew by 21.9 per cent on the previous year and amounted to 296.0 million Euro . Operating profit improved, totalling 69.5 million Euro.
Nokian passenger car tyres sold well throughout the period.Key markets included the Nordic countries, Eastern Europe, Russia and North America. Sales to the Nordic car dealers developed particularly favourably. The increase in imports of used cars also boosted the demand for tyres in Finland. Market shares improved in all key markets. In the Nordic countries the market share of Nokian-brand tyres increased from 21.7 per cent to 24.3 per cent. The market share for winter tyres picked up from 26.2 per cent to 29.8 per cent.
Winter tyres represented 75 per cent and new products 50.2 per cent of the profit centre’s net sales.
Production volumes in Finland increased from 5.1 million to 5.4 million tyres. For the first time, the sales of Nokian tyres exceeded 6 million units sold. Productivity (kg/mh) improved by 7 per cent on the previous year. The average price per product unit increased by an average of 8 per cent
The net sales of Nokian heavy tyres business totalled 58.8 million Euro, showing an increase of 7.0 per cent on the previous year. Operating profit improved, totalling 5.0 million Euro.
The net sales from Nokian bicycle tyres were down by 7.9 per cent on the previous year.
The net sales of Nokian retreading materials business totalled 11.0 million Euro, remaining close to the previous year’s level. Operating profit improved and cash flow was positive.
The demand for truck tyre retreading materials was weak in the Nordic countries however Nokian Tyres improved its position in the Nordic retreading material market. The retreading factory acquired in St. Petersburg last summer strengthened company’s position in the growing Russian markets.