Nokian Tyres
During the first nine months of 2013, Finnish tyre maker Nokian Tyres added 124 outlets to its Vianor dealer network. As of 30 September 2013 the Vianor network operates 1,161 centres in 26 countries. Vianor outlets in Finnland, Sweden, Norway, the US, Switzerland and Russia belong to the company while the remaining 978 are bound to Vianor/Nokian through franchise agreements.
Upon announcing its third quarter 2013 results, Nokian Tyres points out that although its group sales decreased 3.0 per cent year-on-year to €357.0 million in the three months to 30 September, the company’s profitability remained strong and it improved market share. Operating profit rose 11.9 per cent to €95.7 million and profit for the period amounted to €70.9 million. Earnings per share were up €0.08 to €0.53.
Nokian Tyres’ management has issued a profit warning stating that second half revenues are likely to be lower than expected. Third quarter sales are said to be stable year-on-year, which are somewhat lower than some analysts’ projections (Deutsche Bank for example had said +10 per cent).
As of 1 January 2014, Nokian Tyres’ Heavy Tyres and Truck Tyres business units will be integrated into a single entity, Commercial Tyres. The Finnish tyre maker says the integration of both operations into a combined business unit will not have any immediate impact on the 280 or so people currently employed in Heavy Tyres and Truck Tyres, and it states the decision to form the Commercial Tyres business unit was taken in order to provide a “better chance to develop operations and improve sales.” Nokian president and CEO Kim Gran also pointed out that the synergies of integration should clearly improve profitability.
Nokian winter tyres performed well in the winter tyre tests of key German car magazines like "Auto Bild", "auto motor sport" and "AUTOStraßenverkehr" and were declared the best winter tyre. The test winners from Nokian Tyres received top ratings of "exemplary", "highly recommended" and "very good", thus proving their excellent driving safety and their low fuel consumption.
Nokian Tyres has published its first Corporate Sustainability Report to have been drawn up according to GRI (Global Reporting Initiative) guidelines; the report describes the goals, plans, actions, and results of the group’s sustainability programme during 2012. Added perspective has been introduced by describing Nokian Tyres’ activities from the past few years.
Bridgestone Europe will transfer its shares in Nokian Tyres plc to Bridgestone Corporation on 7 May, the Japanese tyre maker told Nokian. This agreement decreases Bridgestone Europe’s ownership in Nokian to less than five per cent of share capital and Bridgestone Corporation’s ownership to over 15 per cent of the share capital.
Approximately 40 Nokian Tyres plc staff members – people identified as “key” employees – will benefit from an incentive programme approved by the company’s Board of Directors. According to Nokian, the aim of the programme is to combine shareholder and key employee objectives in order to “increase the value of the company, to commit the key employees to the company, and to offer them a competitive reward plan based on earning the company’s shares.”
Despite significant drops in first quarter sales and profitability, Nokian used the publication of its latest financial results as an opportunity to rebuff negativity relating to its exposure to the Russian market. In the first quarter of 2013 Nokian Tyres Group’s net sales decreased by 13.3 per cent to 333.1 million euros (1Q 2012: 384.3 million euros). Operating profit fell even more sharply, dropping 27 per cent to 76.3 million (1Q 2012: 105 million euros).
The tyre manufacturer blamed historically low levels of tyre demand in Europe, but also presented the case that demand for replacement car tyres in 2013 will be on previous year’s level in Nordic countries even if it does remain weak in Europe.
This autumn, Nokian Tyres will release a new product for the growing SUV markets in Europe, Russia and the Ukraine. The WR SUV 3 is a non-studded, symmetric and directional tread pattern that Nokian says will feel at home in Europe’s varying winter conditions Europe. The tyre maker claims strengths in winter grip and driving response, including effective resistance to slush planing and aquaplaning.
The North American premium touring tyre segment is the stated target for Nokian’s newest all-season tyre, the Nokian WR G3. The Finnish manufacturer says the combination of its “solid winter experience” plus the use of “environmentally friendly premium products” such as nanotechnology and canola oil in the tyre “guarantee their reliable functionality in the typically varying weather conditions of North America.”
Nokian Tyres has released its 2012 annual report, and the Finnish manufacturer reports a 10.7 growth in net sales to 1.61 billion euros, 9.2 per cent rise in operating profit to 415.0 million euros and a 7.1 per cent increase in profit to 330.9 million euros. Russia proved a regional strength during the year and demand for Nokian’s passenger car tyres increased there, while demand “decreased clearly” in Central Europe. Combined output of the company’s plants in Nokia, Finland and Vsevolozhsk, Russia in 2012 was 15.7 million tyres, and the annualised capacity at year-end was 18 million pieces.
Janne Laitinen is the fastest driver on ice….in the world. The Finnish test driver teamed up with Nokian Tyres to break the record on the ice covering the Gulf of Bothnia, the Baltic Sea’s northerly cul-de-sac. For the record attempt on 9 March, Laitenen drove an Audi RS6 fitted with size 255/35R20 97 T XL Nokian Hakkapeliitta 8 studded tyres. In freezing winter weather, Laitenen’s Nokian-shod car reached an eye watering 208.602 mph (335.713 km/h).
Nokian Tyres has introduced a new product into its Noktop range of retreading materials. The Finnish manufacturer describes the new Noktop 86 traction tread as offering “never before seen reliability for demanding earthmoving applications.” Elaborating on this bold statement, Nokian says the rubber compound used in the Noktop 86 provides “excellent puncture and cut protection under demanding conditions in mines and gravel pits where quarried rock presents an ever-challenging working environment.”
Upon reporting increased sales and profit in 2012, Finland’s Nokian Tyres shared its projection for replacement market growth this year in its main markets. Nokian anticipates demand for replacement passenger car tyres will grow one to two per cent in Europe, two per cent in Nordic countries and two to five per cent in Russia. Admittedly, the tyre maker concedes the pricing environment for all tyre categories will be “challenging” this year, although margins will be supported by a ten per cent year-on-year easing in raw material costs in the first quarter of 2013 and a four per cent easing over the entire year. Although Nokian expects to see growth in net sales and operating profit in 2013, it believes that first quarter performance will be “clearly weaker” than in 2012.
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