Nokian Renkaat Oyj · OMXHEX:TYRES
Nokian Renkaat Oyj — Nokian Tyres — Q3 2022 Earnings Presentation
21 slides from Nokian Renkaat Oyj's earnings presentation, Nov 1, 2022
Slide 1: Building the new Nokian Tyres started: Interim report January–September 2022
BUILDING THE NEW NOKIAN TYRES STARTED: GREENFIELD FACTORY TO ROMANIA, AGREEMENT FOR THE SALE OF THE RUSSIAN OPERATIONS INTERIM REPORT JANUARY–SEPTEMBER 2022 NOVEMBER 1, 2022 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 • Building a new greenfield factory to Romania • ~EUR 650 million investment • Annual capacity 6 million tires, potential to expand further • First tires in H2/2024, commercial production in 2025 • The first zero CO2 emission factory in the tire i
Slide 3: Q3 net sales and profit declined due to lower supply volumes
Q3 NET SALES AND PROFIT DECLINED DUE TO LOWER SUPPLY VOLUMES • Net sales EUR 466.2 million (443.5), -6.4% with comparable currencies • Lower passenger car tire supply volumes as tire imports from Russia to Europe and North America ended in July • Heavy Tyres’ net sales declined slightly due to suppl
Slide 4: Strong balance sheet
STRONG BALANCE SHEET 1–9/22 cash flow impacted by higher working capital CC* CC* EUR million 7–9/22 7–9/21 Change Change 1–9/22 1–9/21 Change Change 2021 Net sales 466.2 443.5 5.1% -6.4% 1,364.7 1,201.5 13.6% 6.4% 1,714.1 Segments operating profit 54.9 96.9 207.6 236.8 324.8 Segments operating profi
Slide 5: Q3: Passenger Car Tyres
Q3: PASSENGER CAR TYRES Lower supply volumes affected net sales and profit negatively CC* CC* 7–9/22 7–9/21 Change Change 1–9/22 1–9/21 Change Change 2021 Net sales, M€ 348.2 330.6 5.3% -9.5% 997.8 856.4 16.5% 6.9% 1,199.2 Segment operating 54.7 97.7 192.7 221.1 298.7 profit, M€ Segment operating 15
Slide 6: Passenger Car Tyres net sales - quarterly changes
PASSENGER CAR TYRES NET SALES - QUARTERLY CHANGES YoY Change % Sales Volumes Price / Mix Currency * Price/Mix without Russia, changing 6 region mix increasing impact
Slide 7: Q3: Passenger Car Tyres bridge
Q3: PASSENGER CAR TYRES BRIDGE Price/Mix impacted segment operating profit positively by EUR 73 million NET SALES, M€ SEGMENT OPERATING PROFIT, M€ 7
Slide 8: Q3: Heavy Tyres
Q3: HEAVY TYRES Supply constraints impacted third quarter net sales CC* CC* 7–9/22 7–9/21 Change Change 1–9/22 1–9/21 Change Change 2021 Net sales, M€ 68.3 69.0 -0.9% -3.3% 208.7 188.7 10.6% 8.7% 254.0 Segment operating 9.1 11.9 37.4 36.2 40.3 profit, M€ Segment operating 13.3% 17.3% 17.9% 19.2% 15.
Slide 9: Q3: Vianor
Q3: VIANOR Net sales increased in a seasonally low quarter CC* CC* 7–9/22 7–9/21 Change Change 1–9/22 1–9/21 Change Change 2021 Net sales, M€ 76.5 70.1 9.0% 9.3% 232.7 219.7 5.9% 6.1% 342.9 Segment operating -5.1 -4.5 -7.7 -4.3 4.1 profit, M€ Segment operating -6.7% -6.4% -3.3% -1.9% 1.2% profit, %
Slide 10: Assumptions for 2022
ASSUMPTIONS FOR 2022 • War in Ukraine and resulting sanctions severely impacting our supply capacity and performance • Discontinued supply of tires from Russia will impact sales, especially in Central Europe • Demand for passenger car tires and heavy tires estimated to be healthy • Uncertainties rel
Slide 11: Guidance for 2022
GUIDANCE FOR 2022 Updated on October 28, 2022 The war in Ukraine and resulting sanctions have a significant negative impact on Nokian Tyres’ supply capacity and performance. In 2022, Nokian Tyres’ net sales is expected to be at previous year’s level or increase, and segments operating profit is expe
Slide 12: Priorities for the coming quarters
PRIORITIES FOR THE COMING QUARTERS • Adding further capacity, including the new greenfield factory project • Closing the transaction to exit Russia • Providing customers with world-class products and “Going forward, services we will focus on • Business units and areas to implement their specific pla
Slide 13: Thank you!
> aN _ THANK YOU! ee nokiar’ <— TYRES
Slide 14: Appendix
PWG wal: nokicir’
Slide 15: Car and tire markets in 1–9/2022
APPENDIX CAR AND TIRE MARKETS IN 1–9/2022 The Nordic countries Russia Europe (excl. the Nordic countries) North America New car sales -15% New car sales -60% New car sales -9% New car sales -13% Car tire sell-in 15% Car tire sell-in -30% Car tire sell-in 5% Car tire sell-in -5% Heavy tire segments*
Slide 16: Group segments operating profit per quarter 2018–Q3/2022
APPENDIX GROUP SEGMENTS OPERATING PROFIT PER QUARTER 2018–Q3/2022* 1–9/2022 • Net sales 1,364.7 M€ (1,201.5), 13.6% • Segments operating profit 207.6 M€ (236.8) 7–9/2022 • Net sales 466.2 M€ (443.5), 5.1% • Segments operating profit 54.9 M€ (96.9) 16 *Comparable segments operating profit figures for
Slide 17: 1–9: Passenger Car Tyres bridge
APPENDIX 1–9: PASSENGER CAR TYRES BRIDGE Price/Mix impacted segment operating profit positively by EUR 186 million NET SALES, M€ SEGMENT OPERATING PROFIT, M€ 17
Slide 18: Material cost development
APPENDIX MATERIAL COST DEVELOPMENT MATERIAL COST DEVELOPMENT INDEX 2010–E2022 MATERIAL COSTS (€/KG) • Increased by 53.5% in Q3/2022 vs. Q3/2021 • Increased by 9.1% in Q3/2022 vs. Q2/2022 • Increased by 44.6% in 1-9/2022 vs. 1-9/2021 18 Incl. raw and other materials in reported currencies
Slide 19: Net debt and debt maturities
APPENDIX NET DEBT AND DEBT MATURITIES Available liquidity, Q3/2022 Q3/2021 EUR million Cash 120 90 Committed undrawn credit 255 305 facilities Total 375 395 *Withdrawn loans due in Q4/2022 19
Slide 20: Network development
APPENDIX NETWORK DEVELOPMENT NAD Vianor, NAD, N-Tyre; -39 stores in 1–9/2022 N-TYRE VIANOR VIANOR – 1,044 SERVICE CENTERS USA CANADA IN 13 COUNTRIES 563 25 174 own stores and 870 partners ICELAND Own -1; partner -2 vs. year-end 2021 4 • Largest tire chain in the Nordic countries: NORWAY 134 SWEDEN 9
Slide 21: 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