Nokian Renkaat Oyj · OMXHEX:TYRES
Nokian Renkaat Oyj — Nokian Tyres — Q4 2023 Earnings Presentation
25 slides from Nokian Renkaat Oyj's earnings presentation, Feb 6, 2024
Slide 1: Building the New Nokian Tyres – On Track
BUILDING THE NEW NOKIAN TYRES ON TRACK FINANCIAL STATEMENT RELEASE 2023 JUKKA MOISIO, CEO NIKO HAAVISTO, CFO FEBRUARY 6, 2024
Slide 2: Getting Back to Growth Track
GETTING BACK TO GROWTH TRACK • Steadily improving performance and volume delivery • Good progress in strategic investments to add capacity, incl. contract manufacturing • Competitive and continuously evolving product portfolio • Achievements in sustainability – toward net-zero emissions • Important
Slide 3: 90 Years of Reinventing Safety
ANNIVERSARY 90 YEARS OF REINVENTING SAFETY Striving for progress means continuously improving and making things for the first time in the world. • 1934 world’s first winter tire • 2024 world’s first zero CO2 emissions tire factory The specially made anniversary stamp is used through the year 2024.
Slide 4: Romanian Factory Is Proceeding on Schedule
ROMANIAN FACTORY IS PROCEEDING ON SCHEDULE First tires to be produced in H2/2024 • Interior construction work continues in the production building, machine installations began in January • Outer shell of the finished goods warehouse almost closed • Building permit for the mixing building received, c
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Slide 6: Net Sales and Operating Profit Improved in Q4
NET SALES AND OPERATING PROFIT IMPROVED IN Q4 • Net sales EUR 368.0 million (361.7), +6.3% with comparable currencies • Segments EBITDA EUR 71.9 million (26.4) • 19.5% (7.3%) of net sales • Segments operating profit EUR 44.5 million (0.2) • Clear profitability improvement in Passenger Car Tyres 6
Slide 7: 2023 Performance in Line with Plans
2023 PERFORMANCE IN LINE WITH PLANS • Net sales EUR 1,173.6 million (1,350.5), -9.2% with comparable currencies • Demanding market environment, dealers focused on reducing their inventories • EUR 52 million negative impact from currencies • Market share gains in premium winter tires • Segments opera
Slide 8: Strong Balance Sheet
STRONG BALANCE SHEET EUR million 10–12/23 10–12/22 2023 2022 Net sales 368.0 361.7 1,173.6 1,350.5 Segments EBITDA 71.9 26.4 170.5 118.7 Segments EBITDA, % 19.5% 7.3% 14.5% 8.8% Segments operating profit 44.5 0.2 65.1 17.8 Segments operating profit, % 12.1% 0.0% 5.5% 1.3% Segments ROCE, % 4.0% 0.9%
Slide 9: Steps Forward in Sustainability
STEPS FORWARD IN SUSTAINABILITY Examples of achievements in 2023 • Construction at the world’s first zero CO2 emission tire factory in Romania began • Target to cut our tire factories’ CO2 emissions by 52% per production ton between 2015–2030 was reached - factory CO2 emissions are at an industry- l
Slide 10: Q4: Passenger Car Tyres
Q4: PASSENGER CAR TYRES Higher sales, improved profitability • Net sales developed positively • Good availability of premium winter tires, supported by contract manufacturing volume • ASP with comparable currencies increased slightly • Clear profitability improvement • Driven by higher volumes and l
Slide 11: Q4: Passenger Car Tyres Bridge
Q4: PASSENGER CAR TYRES BRIDGE Supply chain impacted segment operating profit positively by EUR 19 million NET SALES, EUR million SEGMENT OPERATING PROFIT, EUR million 11
Slide 12: Passenger Car Tyres Net Sales – Quarterly Changes in 2023
PASSENGER CAR TYRES NET SALES – QUARTERLY CHANGES IN 2023 SALES VOLUMES PRICE/MIX CURRENCY 12
Slide 13: Q4: Heavy Tyres
Q4: HEAVY TYRES Solid performance • Net sales decreased due to soft market • Segment operating profit improved driven by lower costs • Production temporarily adapted during the summer and Christmas breaks to reflect lower demand EUR million 10–12/2023 10–12/2022 2023 2022 Net sales 61.8 64.6 257.1 2
Slide 14: Q4: Vianor
Q4: VIANOR Improved profitability, headwind from currencies • Net sales with comparable currencies increased • Strong currency headwind from SEK and NOK • Profitability improved due to increased focus on operational efficiency EUR million 10–12/2023 10–12/2022 2023 2022 Net sales 126.0 129.4 344.0 3
Slide 15: Back to Growth in 2024
BACK TO GROWTH IN 2024
Slide 16: 2024 Guidance and Assumptions
2024 GUIDANCE AND ASSUMPTIONS In 2024, Nokian Tyres’ net sales with • Sell-in in the replacement tire market is comparable currencies and segments expected to grow in 2024. However, weak operating profit are expected to grow economic development in Nokian Tyres’ main significantly compared to the pr
Slide 17: Our Long-Term Financial Targets
OUR LONG-TERM FINANCIAL TARGETS FINANCIAL TARGETS 2023 STATUS Growth Net sales EUR 2 billion EUR 1.17 billion Segments EBITDA 23–25% 14.5% Profitability Segments operating profit ~15% 5.5% Capital structure Net debt/Segments EBITDA 1–2 1.3 Dividend policy unchanged: Nokian Tyres’ target is to pay a
Slide 18: Key Fundamentals for Growth
KEY FUNDAMENTALS FOR GROWTH CLEAR NEW CAPACITY STRONG STRATEGY AND PRODUCTS TEAM We continue executing Expanding capacity, Nokian Tyres team has on our clear strategy market relevant products proved its agility and for growth and improving and enhancing commercial resilience in a changing operationa
Slide 19: Our Journey Towards EUR 2 Billion Net Sales and Strong Profits
THIS IS OUR JOURNEY TOWARDS EUR 2 BILLION NET SALES AND STRONG PROFITS GROWTH PHASE 2 0 2 6 –2 0 2 7 INVESTMENT PHASE Increasing market penetration built 2 0 2 3 –2 0 2 5 on: • New products NET SALES • Capacity increase in Finland • Increased capacity EUR • Enhanced operational capabilities • US fac
Slide 20: Appendix
APPENDIX
Slide 21: Group Segments Operating Profit per Quarter 2019–2023
GROUP SEGMENTS OPERATING PROFIT APPENDIX PER QUARTER 2019–2023 2023 • Net sales EUR 1,173.6 million (1,350.5), -13.1% • Segments operating profit EUR 65.1 million (17.8) 10–12/2023 • Net sales EUR 368.0 million (361.7), 1.7% • Segments operating profit EUR 44.5 million (0.2) 21
Slide 22: 2023: Passenger Car Tyres Bridge
2023: PASSENGER CAR TYRES BRIDGE APPENDIX Price/mix impacted segment operating profit positively by EUR 100 million NET SALES, EUR million SEGMENT OPERATING PROFIT, EUR million 22
Slide 23: Building Diversified Debt Portfolio
BUILDING DIVERSIFIED DEBT PORTFOLIO APPENDIX • Committed credit limits and EUR 500 million commercial paper program in place • EUR 300 million long term bilateral sustainability-linked credit facilities withdrawn in May 2023 to refinance EUR 150 million bilateral facilities and to finance investment
Slide 24: Net Debt and Debt Maturities
NET DEBT AND DEBT MATURITIES APPENDIX Available liquidity, EUR million Q4/2023 Q4/2022 Cash 415 259 Committed undrawn credit facilities 330 305 Total 745 564 24
Slide 25: Disclaimer
DISCLAIMER Statements in this presentation, which are not historical facts, such as expectations, anticipations, beliefs and estimates, are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertain