Nokian Renkaat Oyj · OMXHEX:TYRES
Nokian Renkaat Oyj — Nokian Tyres — Q4 2022 Earnings Presentation
26 slides from Nokian Renkaat Oyj's earnings presentation, Feb 7, 2023
Slide 1: Resilient Performance in 2022 – 2023 a New Start for Nokian Tyres
RESILIENT PERFORMANCE IN 2022 – 2023 A NEW START FOR NOKIAN TYRES FEBRUARY 7, 2023 JUKKA MOISIO – CEO TEEMU KANGAS-KÄRKI – CFO
Slide 2: Taking the First Steps to Build the New Nokian Tyres
TAKING THE FIRST STEPS TO BUILD THE NEW NOKIAN TYRES • Romania factory project started • Various actions ongoing, including land purchases, permitting and first production equipment orders • First tires in H2/2024, commercial production in 2025 • Financing with own cash flow and leveraging the stron
Slide 3: We Achieved a Lot During a Difficult Year
WE ACHIEVED A LOT DURING A DIFFICULT YEAR • Heavy Tyres reached record high net sales, profitability and productivity • Vianor delivered all-time high net sales • North America achieved the highest ever sales volume of passenger car tires, production records in the US factory • New products and stro
Slide 4: Q4 Impacted by Lower Supply Volumes
Q4 IMPACTED BY LOWER SUPPLY VOLUMES • Net sales EUR 411.3 million (512.6), -22.2% with comparable currencies • Lower passenger car tire supply volumes • Segments operating profit EUR 13.5 million (88.0) • Lower passenger car tire supply volumes • Changed factory mix • Price increases to combat cost
Slide 5: Resilient Performance in 2022 Despite the Challenging Operating Environment
RESILIENT PERFORMANCE IN 2022 DESPITE THE CHALLENGING OPERATING ENVIRONMENT • Strong performance by the Nokian Tyres team • Net sales EUR 1,776.1 million (1,714.1), -2.2% with comparable currencies • Lower passenger car tire volumes as tire imports from Russia to Europe and North America ended in Ju
Slide 6: Balance Sheet Continues to Be Strong
BALANCE SHEET CONTINUES TO BE STRONG 2022 cash flow impacted by higher working capital CC* CC* EUR million 10–12/22 10–12/21 Change Change 2022 2021 Change Change Net sales 411.3 512.6 -19.8% -22.2% 1,776.1 1,714.1 3.6% -2.2% Segments operating profit 13.5 88.0 221.2 324.8 Segments operating profit
Slide 7: We Continue to Set the Industry Benchmark on Sustainability
WE CONTINUE TO SET THE INDUSTRY BENCHMARK ON SUSTAINABILITY Examples of achievements in 2022 • Excellent safety performance – LTIF dropped to a record low level of 3.2 • We began building the world’s first zero CO2 emission tire factory • We introduced the most sustainable concept tire yet with 93%
Slide 8: Q4: Passenger Car Tyres
Q4: PASSENGER CAR TYRES Lower supply volumes affected net sales and profit negatively CC* CC* 10–12/22 10–12/21 Change Change 2022 2021 Change Change Net sales, M€ 236.0 342.8 -31.2% -35.9% 1,233.8 1,199.2 2.9% -5.4% Segment operating -13.8 77.7 178.9 298.7 profit, M€ Segment operating -5.8% 22.1% 1
Slide 9: Passenger Car Tyres Net Sales - Quarterly Changes
PASSENGER CAR TYRES NET SALES - QUARTERLY CHANGES YoY Change % Sales Volumes Price / Mix Currency 9
Slide 10: 2022: Passenger Car Tyres Bridge
APPENDIX 2022: PASSENGER CAR TYRES BRIDGE Price/Mix impacted segment operating profit positively by EUR 237 million NET SALES, M€ SEGMENT OPERATING PROFIT, M€ 10
Slide 11: Q4: Heavy Tyres
Q4: HEAVY TYRES Solid end to a record year CC* CC* 10–12/22 10–12/21 Change Change 2022 2021 Change Change Net sales, M€ 64.8 65.3 -0.8% -1.3% 273.5 254.0 7.7% 6.1% Segment operating 6.3 4.1 43.8 40.3 profit, M€ Segment operating 9.8% 6.2% 16.0% 15.9% profit, % * Comparable currencies • Q4 net sales
Slide 12: Q4: Vianor
Q4: VIANOR Good sales development continued, leading to all-time high net sales in 2022 CC* CC* 10–12/22 10–12/21 Change Change 2022 2021 Change Change Net sales, M€ 129.4 123.1 5.1% 9.4% 362.0 342.9 5.6% 7.3% Segment operating 10.7 8.4 3.1 4.1 profit, M€ Segment operating 8.3% 6.8% 0.9% 1.2% profit
Slide 13: Nokian Tyres Group Figures for 2021 and 2022
NOKIAN TYRES GROUP FIGURES FOR 2021 AND 2022 • As of January 1, 2023 Nokian Tyres will report as alternative non-IFRS figures Segments net sales and Segments operating profit excluding Russia and other items that are not indicative of Nokian Tyres’ underlying business performance. 2022 2022 2021 202
Slide 14: Assumptions for 2023
ASSUMPTIONS FOR 2023 • Nokian Tyres’ first half of the year is expected to be weak due to constrained capacity causing lower supply of passenger car tires, and seasonality • The second half is expected to be supported by the winter tire and all-season tire season and the offtake volume • In heavy ti
Slide 15: Guidance for 2023
GUIDANCE FOR 2023 In 2023, Nokian Tyres’ segments net sales are expected to be between EUR 1,300–1,500 million and segments operating profit percentage of net sales between 6–8%. It is expected that due to seasonality, the segments operating profit will be generated in the second half of the year. A
Slide 16: The Year 2023 Will Be a New Start for Nokian Tyres
THE YEAR 2023 WILL BE A NEW START FOR NOKIAN TYRES 16
Slide 17: We Will Be a Growth Company Again
WE WILL BE A GROWTH COMPANY AGAIN With our strong and resilient Nokian Tyres team, we focus on four strategic programs: • New factory in Romania • Nokia factory capacity increase • Dayton factory completion • Growing contract manufacturing At the same time, we... • Provide customers with world-class
Slide 18: This Is a New Journey to EUR 2 Billion Net Sales and Healthy Profits
THIS IS A NEW JOURNEY TO EUR 2 BILLION NET SALES AND HEALTHY PROFITS GROWTH PHASE 2 0 2 6 –2 0 2 7 NET SALES INVESTMENT PHASE EUR • Increasing market penetration 2 0 2 3 –2 0 2 5 based on new products and 2 BILLION invested capability • New factory in Romania • Nokia factory capacity increase • Dayt
Slide 19: It's a New Journey!
IT’S A NEW JOURNEY!
Slide 20: Appendix
PWG wal: nokicir’
Slide 21: Group Segments Operating Profit per Quarter 2018–2022
APPENDIX GROUP SEGMENTS OPERATING PROFIT PER QUARTER 2018–2022* 2022 • Net sales 1,776.1 M€ (1,714.1), 3.6% • Segments operating profit 221.2 M€ (324.8) 10–12/2022 • Net sales 411.3 M€ (512.6), -19.8% • Segments operating profit 13.5 M€ (88.0) 21 *Comparable segments operating profit figures for 201
Slide 22: Q4: Passenger Car Tyres Bridge
Q4: PASSENGER CAR TYRES BRIDGE Price/Mix impacted segment operating profit positively by EUR 58 million NET SALES, M€ SEGMENT OPERATING PROFIT, M€ 22
Slide 23: Material Cost Development
APPENDIX MATERIAL COST DEVELOPMENT MATERIAL COST DEVELOPMENT INDEX 2010–E2023 MATERIAL COSTS (€/KG) • Increased by 42.9% in Q4/2022 vs. Q4/2021 • Decreased by -0.5% in Q4/2022 vs. Q3/2022 • Increased by 41.7% in 2022 vs. 2021 23 Incl. raw and other materials in reported currencies
Slide 24: Net Debt and Debt Maturities
APPENDIX NET DEBT AND DEBT MATURITIES Available liquidity, Q4/2022 Q4/2021 EUR million Cash 259 386 Committed undrawn credit facilities 305 305 Total 564 691 24
Slide 25: Network Development
APPENDIX NETWORK DEVELOPMENT NAD Vianor, NAD, N-Tyre; -101 stores in 2022 N-TYRE VIANOR VIANOR – 1,008 SERVICE CENTERS USA CANADA IN 13 COUNTRIES 593 25 173 own stores and 835 partners ICELAND Own -2; partner -37 vs. year-end 2021 4 • Largest tire chain in the Nordic countries: NORWAY 134 SWEDEN 90
Slide 26: 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