Nokian Tyres: Lower sales and operating profit in 2020

Nokian Tyres expects that its net sales in 2020 will be below last year’s and operating profit will be “significantly” beneath 2019 levels. Operating profit will primarily be affected by costs related to the company’s expansion in North America and other investment programmes.

In particular, the company is preparing for poor performance in Russia, a market that accounted for 19 per cent of its net sales in 2018. It anticipates that net sales and operating profit there will “decline substantially” in 2020 on the back on an unexpected decline in 2019. Low consumer spending, declining new car sales and increasing competition resulted in a significant increase in carry-over stocks in Russia at the end of the year.

The tyre maker gave this preliminary outlook for 2020 upon confirming its guidance for the 2019 financial year. In line with the guidance given in October 2019, last year’s net sales (with comparable currencies) were roughly at 2018 levels, and the operating profit margin was approximately 20 per cent. Car and tyre markets in Europe continued to be soft last year, a situation that resulted in tightening competition. Demand for winter tyres in October-December was dragged down by unseasonably warm temperatures in key markets.

Nokian Tyres will publish its full 2019 Financial Statement on 4 February.