Nokian Tyres
Ari Lehtoranta has commented on Nokian Tyres’ proposed new factory ahead of the company’s Capital Markets Day, which takes place today in Helsinki. The president and chief executive officer says a decision regarding the factory and its location will be made by the fourth quarter of 2016.
At the end of October Nokian Tyres changed its operational structure to “strengthen the company’s product and innovation leadership, end-to-end supply operations and sales and distribution management”. The move also follows the departure of one of the firm’s senior executives. According to Nokian, the former head of Passenger car tyre operations, Rami Helminen, has decided to leave the company and “continue his career elsewhere”. Rami Helminen was appointed as Nokian vice president, Car and Van Tyres nine years ago, a role he took on on 1 March 2006.
Having reduced a field of 51 to 19, Auto Bild announced that three of the winter tyres tested had made it all the way to the top of the German magazine’s rankings, picking up “exemplary” ratings. Continental’s WinterContact TS 850, Pirelli’s Winter Snowcontrol Serie 3, and the Barum Polaris 3 were the best performers, according to Auto Bild’s testers, who ranked the tyres based on their performance on snowy, wet and dry roads and their cost. The tests were performed on a VW Polo, with the tyres sized 185/60R15 T.
The statutory negotiations regarding Nokian Tyres’ passenger car tyre factory in Finland ended today, and the tyre maker reports that 122 people will lose their jobs. Adjustments will also be made to production capacity.
In its annual winter tyre performance survey, German motoring publication AutoBild narrows a wide field of 49 winter tyres and two all-season tyres with wet and snow braking measurements before conducting a full test of a range of characteristics. 19 tyres made it through to the 2015/16 season test, conducted using the tyre size 185/60 R15.
It is hard to believe that little more than two years have passed since Nokian Tyres predicted the market for premium tyres in Russia would grow by an average of ten per cent each year, and even harder to grasp that as recently as 2012 the Russian and CIS markets accounted for 35 per cent of the tyre maker’s total net sales.
Although it enjoyed growth in Western markets during the first quarter of 2015, Nokian Tyres reports that its business in Russia “remains challenging”. The tyre maker’s 9.9 per cent year-on-year decrease in net sales to €281.3 million was driven by a 43.9 per cent decline in gross sales in Russia and the CIS. Operating profit dropped 29.4 per cent to €48.3 million and profit margin contracted from 21.9 per cent to 17.2 per cent. A windfall meant good news on the bottom line, however; the annulment of a previous tax ruling meant the company was able to return taxes and interest of €100.3 million to its financial result. Therefore profit for the three-month period rose 249.3 per cent from €38.7 million in Q1 2014 to €135.3 million this year.
Nokian Tyres already operates 13 production lines within its facilities in Russia and only has space to install one more. Company CEO Ari Lehtoranta says arrangements have been made to implement this extra line, and looking further ahead the company is “preparing plans” for its next factory. During a conference call on 8 May, he outlined the options the tyre maker was considering for this additional plant as well as the timetable for the related decision process.
Dieter Köppner, managing director of Nokian Tyres Central Europe since 2007, has announced his intention to retire this year. Sharing the news with Tyres & Accessories, the 62 year old said that to ensure a smooth transition he is already working alongside his successor, Hannu Liitsola, at the tyre maker’s Central European headquarters in Prague.
At Nokian Tyres’ Annual General Meeting yesterday, it was decided that shareholders will receive a dividend of €1.45 per share for the financial year ending 31 December 2014. This is the same amount as paid out per share for the 2013 and 2012 financial years. The dividend will be paid to shareholders included in the shareholder list maintained by Euroclear Finland Ltd on the record date of 10 April 2015. The dividend payment date is 23 April 2015.
Nokian Tyres and Valtra have combined their expertise to set a new record for tractors, clocking 130.165km/h (80.88mph) on a snowy and icy road in Finnish Lapland. Multiple World Rally champion, Juha Kankkunen drove the Valtra T234, which ran on the world’s first winter tyre for tractors, the Nokian Hakkapeliitta TRI (440/80R28 151D & 540/80R38 167D). Click through to the full story to watch a video documenting the new World Record.
In December 2013 and January 2014, Finland’s Tax Administration ordered Nokian Tyres plc to pay additional taxes totalling €100.3 million following a reassessment of the 2007 to 2010 tax years. The tyre maker appealed this decision and now reports that The Board of Adjustment within Finland’s Large Taxpayers’ Office has annulled the reassessment decision and returned the matter back to the Tax Administration for reprocessing.
The latest GRI G4 compliant Corporate Sustainability Report from Nokian Tyres is now available. This report, says the tyre maker, describes Nokian Tyres’ activities from the perspective of environmental, social and economic responsibility as part of an international value chain.
Following weak performance in Russia and the CIS region in the third quarter of 2014, Nokian Tyres has revised its operating profit projection for the full year. The Finnish company now estimates operating profit of €300 million to €320 million for 2014, considerably lower than last year’s €385.5 million. Net sales, as per previous guidance, are also expected to fall compared with 2013.
The statutory negotiations at Nokian Tyres’ Finnish factory concerning workers and staff in car tyre production, maintenance and quality departments ended on 9 October 2014. Adjustments to production capacity utilisation as well as cost savings will be achieved mainly with temporary lay-offs and transfers to new positions. In addition, a pension plan for two employees comes into effect.
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