Nokian Renkaat Oyj · OMXHEX:TYRES
Nokian Renkaat Oyj — Nokian Tyres — Q2 2024 Earnings Presentation
20 slides from Nokian Renkaat Oyj's earnings presentation, Jul 19, 2024
Slide 1: Improved tire availability driving sales growth in a challenging environment
IMPROVED TIRE AVAILABILITY DRIVING SALES GROWTH IN A CHALLENGING ENVIRONMENT HALF YEAR FINANCIAL REPORT JANUARY–JUNE 2024 JUKKA MOISIO, CEO NIKO HAAVISTO, CFO JULY 19, 2024
Slide 2: First tire produced in Romania
FIRST TIRE PRODUCED IN ROMANIA RO MA N I A FA CT O RY I S P RO GRES S I N G I N BU D GET A N D O N S CH ED U LE • The first tire was manufactured July 1 • Commercial production expected to start early 2025 • The 60-member-strong launch team trained in Finland during the spring • Nokian Tyres is maki
Slide 3: Romania factory site in June 2024
ROMANIA FACTORY SITE IN JUNE 2024 Finished goods warehouse Mixing building Production building 3
Slide 4: Investment phase completed in the US
INVESTMENT PHASE • The ramp-up of the US factory completed COMPLETED IN THE US • Capability to produce North American-specific all-season and all-weather car tires, light truck tire production started this year • Finished goods warehouse opened next to the factory, holding up to 600,000 tires 4
Slide 5: Introducing fully renewable material with potential to replace carbon black in tires
INTRODUCING FULLY RENEWABLE MATERIAL WITH POTENTIAL TO REPLACE CARBON BLACK IN TIRES • First ever concept tire made with a new renewable lignin-based material UPM BioMotion RFF • Potential to replace a significant part of the carbon black, reducing the need for fossil materials and lowering carbon e
Slide 6: Net sales and segments operating profit increased in Q2
NET SALES AND SEGMENTS OPERATING PROFIT INCREASED IN Q2 • Net sales EUR 324.6 million (293.1), +11.2% with comparable currencies • Sales driven by improved tire availability • Geographically strongest growth in Central Europe • Segments EBITDA EUR 46.8 million (41.3) • The political strikes in Finla
Slide 7: Strong balance sheet
STRONG BALANCE SHEET EUR million 4–6/2024 4–6/2023 1–6/2024 1–6/2023 2023 Net sales 324.6 293.1 561.2 529.5 1,173.6 Segments EBITDA 46.8 41.3 59.3 52.5 170.5 Segments EBITDA, % 14.4% 14.1% 10.6% 9.9% 14.5% Segments operating profit 20.1 15.2 5.0 1.1 65.1 Segments operating profit, % 6.2% 5.2% 0.9% 0
Slide 8: Q2: Passenger car tyres
Q2: PASSENGER CAR TYRES Higher sales, improved profitability • Net sales increased driven by Central Europe • ASP with comparable currencies increased slightly • Profitability improved due to higher volumes, better price/mix, and lower costs EUR million 4–6/2024 4–6/2023 1–6/2024 1–6/2023 2023 Net s
Slide 9: Q2: Passenger car tyres bridge
Q2: PASSENGER CAR TYRES BRIDGE Sales volume impact EUR 12 million on segment operating profit NET SALES, EUR million SEGMENT OPERATING PROFIT, EUR million 9
Slide 10: Passenger car tyres net sales - quarterly changes
PASSENGER CAR TYRES NET SALES - QUARTERLY CHANGES YoY Change % Sales Volumes Price / Mix Currency 10
Slide 11: Q2: Heavy tyres
Q2: HEAVY TYRES Weak market affected sales and profitability • Net sales decreased due to weak market • Profitability declined mainly due to lower volumes • Production temporarily adapted during the summer break to meet the soft demand EUR million 4–6/2024 4–6/2023 1–6/2024 1–6/2023 2023 Net sales 6
Slide 12: Q2: Vianor
Q2: VIANOR Solid sales performance • Net sales with comparable currencies increased slightly • Segment operating profit was EUR 7.5 million EUR million 4–6/2024 4–6/2023 1–6/2024 1–6/2023 2023 Net sales 95.5 94.4 151.4 149.9 344.0 Net sales change in 1.3% 3.4% 1.7% 3.1% 1.8% comparable currencies, %
Slide 13: 2024 guidance (unchanged) and assumptions
2024 GUIDANCE (UNCHANGED) 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 compar
Slide 14: This is 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 15: Appendix
APPENDIX
Slide 16: Group segments operating profit per quarter 2020–H1/2024
GROUP SEGMENTS OPERATING PROFIT APPENDIX PER QUARTER 2020–H1/2024 4–6/2024 • Net sales EUR 324.6 million (293.1), 10.7% • Segments operating profit EUR 20.1 million (15.2) 1–6/2024 • Net sales EUR 561.2 million (529.5), 6.0% • Segments operating profit EUR 5.0 million (1.1) 16
Slide 17: H1: Passenger car tyres bridge
H1: PASSENGER CAR TYRES BRIDGE APPENDIX Sales volume impact EUR 18 million on segment operating profit NET SALES, EUR million SEGMENT OPERATING PROFIT, EUR million 17
Slide 18: Building diversified debt portfolio
BUILDING DIVERSIFIED DEBT PORTFOLIO APPENDIX • EUR 100 million sustainability-linked term loan due in May 2024 refinanced with a similar three- year term loan that includes extension options of up to two years • EUR 300 million long-term bilateral sustainability-linked credit facilities originally d
Slide 19: Net debt and debt maturities
NET DEBT AND DEBT MATURITIES APPENDIX Available liquidity, EUR million Q2/2024 Q2/2023 Cash 175 420 Committed undrawn credit facilities 305 305 Total 481 725 19
Slide 20: 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