Nokian Renkaat Oyj · OMXHEX:TYRES
Nokian Renkaat Oyj — Nokian Tyres — Q1 2025 Earnings Presentation
34 slides from Nokian Renkaat Oyj's earnings presentation, May 6, 2025
Slide 1: Strong Sales Growth in All Regions. Actions Accelerated to Improve Financial Performance
STRONG SALES GROWTH IN ALL REGIONS. ACTIONS ACCELERATED TO IMPROVE FINANCIAL PERFORMANCE INTERIM REPORT JANUARY–MARCH 2025 PAOLO POMPEI, CEO NIKO HAAVISTO, CFO MAY 6, 2025
Slide 2: Agenda
AGENDA 1 Financial performance in Q1 2 Business units 3 CEO reflections 4 Tariffs and 2025 guidance 2
Slide 3: Q1 Financial Performance
Q1 FINANCIAL PERFORMANCE nokicin’ TYRES
Slide 4: Highlights of Q1/2025
HIGHLIGHTS OF Q1/2025 • Strong sales growth continued, we outperformed the market in all regions • Romanian factory proceeding as planned, tire deliveries started in March • Heavy Tyres performed well in a weak market • Actions accelerated to improve financial performance • Tariffs causing disturban
Slide 5: Tire Market Development in Q1/2025
TIRE MARKET DEVELOPMENT IN Q1/2025 PC/LT replacement tire market showing modest growth, weakness in heavy tire market continued PC & LT TIRES TRUCK TIRES AGRI TIRES • Europe RT +5% • Europe RT +1% • Europe RT -7% • North America RT 0% • Europe OE –20% Nokian Tyres outperforming the market Market dat
Slide 6: Strong Sales Growth in Q1, Profitability Declined Due to Higher Cost
STRONG SALES GROWTH IN Q1, PROFITABILITY DECLINED DUE TO HIGHER COST • Net sales EUR 269.5 million (236.6), +14.2% with comparable currencies • Positive development in all business units • Market position improved in all regions • Segments EBITDA EUR 12.5 million (12.5) • 4.6% (5.3%) of net sales •
Slide 7: Net Sales Grew in All Regions in the First Quarter
NET SALES GREW IN ALL REGIONS IN THE FIRST QUARTER NET SALES BY GEOGRAPHICAL AREA, EUR million +5.9% 140 120 100 +34.4% +15.0% 80 60 40 20 126,9 133,7 49,2 66,3 60,0 68,8 0 Nordics Other Europe Americas Q1 2024 Q1 2025 7
Slide 8: Key Figures
KEY FIGURES Investment phase approaching its end EUR million 1–3/2025 1–3/2024 2024 Net sales 269.5 236.6 1,289.8 Segments EBITDA 12.5 12.5 185.2 Segments EBITDA, % 4.6% 5.3% 14.4% Segments operating profit -18.5 -15.1 71.4 Segments operating profit, % -6.9% -6.4% 5.5% Segments ROCE, % (rolling 12 m
Slide 9: Significant Investments in 2023–2025 to Build Our Future Platform
SIGNIFICANT INVESTMENTS IN 2023–2025 TO BUILD OUR FUTURE PLATFORM EUR million Investments Estimate Investment phase approaching its 400 end Depreciation • Net investments in 2025 estimated 300 to be EUR 200 million • Total investments in 2023–2025 approx. EUR 800 million 200 • Returning to average c
Slide 10: Business Units
10 BUSINESS UNITS nokicin’ TYRES
Slide 11: Q1: Passenger Car Tyres
Q1: PASSENGER CAR TYRES Higher sales, profitability decreased EUR million 1–3/2025 1–3/2024 2024 Net sales 174.1 143.1 779.9 • Net sales increased due to higher sales Net sales change in volumes driven by increased product 22.2% 8.7% 20.2% comparable currencies, % availability Segment operating prof
Slide 12: Q1: Passenger Car Tyres Bridge
Q1: PASSENGER CAR TYRES BRIDGE Volume impact of EUR +10 million on segment operating profit NET SALES, EUR million +22% 31 1 175 -1 174 175 170 165 160 155 150 145 143 140 +21,7% +0,5% -0,5% 0 1-3/2024 Sales Volume Price/Mix Net Sales excl Currency 1-3/2025 FX effect SEGMENT OPERATING PROFIT, EUR mi
Slide 13: Passenger Car Tyres Net Sales – Quarterly Changes
PASSENGER CAR TYRES NET SALES -QUARTERLY CHANGES YoY Change % Sales Volumes Price / Mix Currency 35,4% 28,6% 21,9% 21,7% 9,7% 2,4% 0,5% -1,0% -1,3% -0,6% -1,1% -0,4% -0,5% -7,9% -10,5% Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2024 2025 2024 2025 2024 2025 13
Slide 14: Q1: Heavy Tyres
Q1: HEAVY TYRES Solid performance in a weak market EUR million 1–3/2025 1–3/2024 2024 Net sales 55.8 55.1 235.1 • Net sales increased in all regions driven by Net sales change in aftermarket sales 1.3% -18.5% -8.0% comparable currencies, % Segment operating profit 7.3 6.3 30.0 • Profitability improv
Slide 15: Q1: Vianor
Q1: VIANOR Positive sales development EUR million 1–3/2025 1–3/2024 2024 Net sales 58.8 55.9 354.9 • Net sales with comparable currencies Net sales change in 5.7% 2.3% 3.6% increased by 5.7% comparable currencies, % Segment operating profit -15.4 -15.9 -3.8 • The first quarter is seasonally low in V
Slide 16: CEO Reflections
16 CEO REFLECTIONS nokicin’ TYRES
Slide 17: Key Messages
KEY MESSAGES • Strong foundations for industry leading growth and profitability improvement • Investment phase completed by the end of 2025, moving to growth phase • Actions to improve financial performance accelerated 17
Slide 18: Strong Growth Prospects Driven by Safest Products
STRONG GROWTH PROSPECTS DRIVEN BY SAFEST PRODUCTS Global tire market ~250B€ Long-term heritage of safest products for Addressable market demanding weather conditions Nokian Tyres 18
Slide 19: Strong Foundations to Build On
STRONG FOUNDATIONS TO BUILD ON PRODUCT BRAND DISTRIBUTION MANUFACTURING HEAVY TIRES • Wide offering • Premium tire • Market-leading • Local-to-local • Highly profitable in winter and segment distribution production business with all-season tires leader in network in in core strong position Nordics N
Slide 20: Investment Phase to Be Successfully Completed by Year End
INVESTMENT PHASE TO BE SUCCESSFULLY COMPLETED BY YEAR END, NEXT STEP TO FOCUS ON FINANCIAL PERFORMANCE • Response to structural disruption NOKIAN TYRES NET FINANCIALS, EUR million successfully managed: Exit from Russian markets, expansion of Nokia production capacity, support from manufacturing 325
Slide 21: Opportunities to Further Strengthen the Business
OPPORTUNITIES TO FURTHER STRENGTHEN THE BUSINESS • North American and Central European commercial positioning • Manufacturing, procurement, and SG&A cost competitiveness • Balance sheet strength 21
Slide 22: Actions to Improve Financial Performance Accelerated
ACTIONS TO IMPROVE FINANCIAL PERFORMANCE ACCELERATED COMMERCIAL MANUFACTURING PROCUREMENT • North America: Accelerate • Dayton production • Raw material commercial efforts to gain optimization procurement premium market share • Fixed cost reduction • Indirect spend • North America: Strengthen throug
Slide 23: Strong Focus on Delivering Results
STRONG FOCUS ON DELIVERING RESULTS New operating model Dedicated workstream owners, implemented with stronger P&L systematic follow-ups, and and KPI ownership and reporting practices accountability 23
Slide 24: Moving to Next Phase Is Reflected in Our Capital Allocation Priorities
MOVING TO NEXT PHASE IS REFLECTED IN OUR CAPITAL ALLOCATION PRIORITIES HISTORICAL VIEW: PRIORITIES TOWARDS 2027: ACTUAL CAPITAL ALLOCATION CREATING BASIS FOR STRONG INVESTOR 2022–2024 RETURNS • EUR 728 million of capex spend • Substantial improvement to operating cash flow • EUR 472 million increase
Slide 25: We Are Well Positioned to Outstanding Value Creation
WE ARE WELL POSITIONED TO OUTSTANDING VALUE CREATION GROWTH: Above market growth supported by unique value proposition with safe, sustainable, and high-performing products in demanding weather conditions PROFITABILITY: Targeting strong profitability improvement through commercial and manufacturing e
Slide 26: Tariffs and Guidance
26 TARIFFS AND GUIDANCE nokicin’ TYRES
Slide 27: Tire Industry Assumptions for 2025
TIRE INDUSTRY ASSUMPTIONS FOR 2025 PASSENGER CAR & HEAVY TIRES LIGHT TRUCK TIRES RT -2% to 2% OE demand declining in H1, market expected to continue Growth in Central Europe, Nordics challenging in H2 stable, volatility in North America RT demand stable Market data based on sell-in data provided by
Slide 28: Tariffs Causing Disturbances in the North American Market
TARIFFS CAUSING DISTURBANCES IN THE NORTH AMERICAN MARKET • Nokian Tyres in North America: • >20% of the Group net sales • Approx. 85% of the US volume produced locally in Dayton • Canada supplied from the US and Europe; US imports affected by Canadian counter tariffs • Direct impacts: increased sou
Slide 29: Guidance for 2025
GUIDANCE FOR 2025 (unchanged) In 2025, Nokian Tyres’ net sales are expected to grow and segments operating profit as a percentage of net sales to improve compared to the previous year. Assumptions Tire demand in Nokian Tyres’ markets is expected to remain at the previous year’s level in 2025. Develo
Slide 30: Appendix
APPENDIX 30
Slide 31: Group Segments Operating Profit per Quarter 2021–2025
GROUP SEGMENTS OPERATING PROFIT APPENDIX PER QUARTER 2021–2025 1–3/2025 CUMULATIVE SEGMENTS OPERATING PROFIT PER REVIEW PERIOD 400 • Net sales EUR 269.5 million 300 (236.6), 13.9% 200 100 • Segments operating profit 0 EUR -18.5 million (-15.1) -100 1-3 1-6 1-9 1-12 SEGMENTS OPERATING PROFIT PER QART
Slide 32: Debt Portfolio as of March 31, 2025
APPENDIX DEBT PORTFOLIO AS OF MARCH 31, 2025 DEBT COMPOSITION AS OF MAR 31, 2025 • EUR 300 million long-term bilateral sustainability-linked credit facilities originally due in 2026 extended to be due in 2027 Loans from financial institutions and pension DEBT loans • EUR 100 million long-term bilate
Slide 33: Net Debt and Debt Maturities
NET DEBT AND DEBT MATURITIES APPENDIX Net Debt Debt Maturities Q1/2025 Q1/2025 Q1/2024 500 500 1000 1000 450 450 900 900 400 400 800 131 800 350 350 20 200 700 700 198 300 300 EUR million 600 134 600 EUR million 250 250 500 500 13 136 200 200 400 400 99 150 324 150 300 558 300 36 100 100 100 200 409
Slide 34: 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