Slide 1: War in Ukraine overshadowed H1, preparations to exit Russia started
WAR IN UKRAINE OVERSHADOWED H1, PREPARATIONS TO EXIT RUSSIA STARTED HALF YEAR FINANCIAL REPORT JANUARY–JUNE 2022 AUGUST 2, 2022 JUKKA MOISIO – CEO TEEMU KANGAS-KÄRKI – CFO
Slide 2: Exit from Russia initiated – focus on other core markets
EXIT FROM RUSSIA INITIATED – FOCUS ON OTHER CORE MARKETS • The Board decided to initiate a controlled exit from Russia as it is no longer feasible nor sustainable for Nokian Tyres plc to continue operations in Russia • We are evaluating different options for the exit: external advisors have been hir
Slide 3: Q2 net sales increased, profit impacted by lower volumes
Q2 NET SALES INCREASED, PROFIT IMPACTED BY LOWER VOLUMES • Net sales EUR 482.1 million (416.2), +7.4% with comparable currencies driven by price increases • Tire demand continued good, volumes down due to supply constraints • Operating environment increasingly challenging due to the war and tighteni
Slide 4: Strong balance sheet
STRONG BALANCE SHEET Cash flow impacted by higher working capital CC* CC* EUR million 4–6/22 4–6/21 Change Change 1–6/22 1–6/21 Change Change 2021 Net sales 482.1 416.2 15.8% 7.4% 898.6 758.0 18.5% 13.9% 1,714.1 Segments operating profit 86.3 89.6 152.8 139.9 324.8 Segments operating profit % 17.9%
Slide 5: Q2: Passenger car tyres
Q2: PASSENGER CAR TYRES Tire demand continued on a good level, volumes down due to supply constraints CC* CC* 4–6/22 4–6/21 Change Change 1–6/22 1–6/21 Change Change 2021 Net sales, M€ 334.7 279.9 19.6% 7.3% 649.6 525.8 23.6% 17.2% 1,199.2 Segment operating 63.8 70.6 137.9 123.4 298.7 profit, M€ Seg
Slide 6: Q2: Passenger car tyres bridge
Q2: PASSENGER CAR TYRES BRIDGE Price/Mix impacted segment operating profit positively by EUR 87 million NET SALES, M€ SEGMENT OPERATING PROFIT, M€ 6
Slide 7: Q2: Heavy tyres
Q2: HEAVY TYRES Strong development in sales and profitability CC* CC* 4–6/22 4–6/21 Change Change 1–6/22 1–6/21 Change Change 2021 Net sales, M€ 73.9 62.6 18.0% 16.5% 140.4 119.7 17.3% 15.7% 254.0 Segment operating 15.6 11.7 28.4 24.3 40.3 profit, M€ Segment operating 21.1% 18.8% 20.2% 20.3% 15.9% p
Slide 8: Q2: Vianor
Q2: VIANOR Good season sales, result impacted by increased costs CC* CC* 4–6/22 4–6/21 Change Change 1–6/22 1–6/21 Change Change 2021 Net sales, M€ 99.1 91.5 8.3% 8.8% 156.2 149.6 4.4% 4.7% 342.9 Segment operating 9.6 10.0 -2.5 0.2 4.1 profit, M€ Segment operating 9.7% 11.0% -1.6% 0.2% 1.2% profit,
Slide 9: Assumptions for 2022
ASSUMPTIONS FOR 2022 • War in Ukraine and resulting sanctions severely impacting our operating environment and causing significant uncertainty • Exit from Russia will have an adverse effect on our supply capacity, impacting sales especially in Central Europe • Uncertainties related to the Russian ru
Slide 10: Guidance for 2022
GUIDANCE FOR 2022 Updated on June 17 The war in Ukraine and resulting sanctions cause significant uncertainty to Nokian Tyres’ operating environment. In 2022, Nokian Tyres’ net sales are expected to decrease or to be at previous year’s level, and segments operating profit is expected to decrease sig
Slide 11: Building the new Nokian Tyres
BUILDING THE NEW NOKIAN TYRES
Slide 12: We have a strong innovation pipeline for the future
WE HAVE A STRONG INNOVATION PIPELINE FOR THE FUTURE Examples of the latest product launches Nokian Tyres One HT Nokian Tyres Snowproof P Nokian Tyres Seasonproof Nokian Tyres Hakka Green 3 Nokian Tyres Nokian Tyres Ground Hakkapeliitta C4 Nokian Tyres One Kare Semi-Slick Nokian Tyres Hakkapeliitta C
Slide 13: Nokian Tyres Hakkapeliitta R5
NOKIAN TYRES HAKKAPELIITTA R5 New flagship range of Nordic non-studded winter tires The new Hakkapeliitta R5 is an innovative combination of pure winter grip, silence and eco-friendliness • Over 160 products • Available to consumers as of fall 2022 • Main markets: Nordics and North America HAKKAPELI
Slide 14: Priorities for the coming quarters
PRIORITIES FOR THE COMING QUARTERS • Exiting Russia • Building new capacity • Keeping costs in strict control and protecting cash flow “Going forward, • Business units and areas to implement their specific we will focus on plans: Nordics, North America, Central Europe and Heavy Tyres building the ne
Slide 15: Thank you!
THANK YOU!
Slide 16: Appendix
APPENDIX
Slide 17: Car and tire markets in H1/2022
APPENDIX CAR AND TIRE MARKETS IN H1/2022 The Nordic countries Russia Europe (excl. the Nordic countries) North America New car sales -17% New car sales -58% New car sales -14% New car sales -17% Car tire sell-in -6% Car tire sell-in -20% Car tire sell-in 7% Car tire sell-in -2% Heavy tire segments*
Slide 18: Group segments operating profit per quarter 2018–H1/2022
APPENDIX GROUP SEGMENTS OPERATING PROFIT PER QUARTER 2018–H1/2022* 1–6/2022 • Net sales 898.6 M€ (758.0), 18.5% • Segments operating profit 152.8 M€ (139.9) 4–6/2022 • Net sales 482.1 M€ (416.2), 15.8% • Segments operating profit 86.3 M€ (89.6) 18 *Comparable segments operating profit figures for 20
Slide 19: H1: Passenger car tyres bridge
APPENDIX H1: PASSENGER CAR TYRES BRIDGE Price/Mix impacted segment operating profit positively by EUR 126 million NET SALES, M€ SEGMENT OPERATING PROFIT, M€ 19
Slide 20: Passenger car tyres net sales - quarterly changes
APPENDIX PASSENGER CAR TYRES NET SALES - QUARTERLY CHANGES YoY Change % 20
Slide 21: Material cost development
APPENDIX MATERIAL COST DEVELOPMENT MATERIAL COST DEVELOPMENT INDEX 2010–E2022 MATERIAL COSTS (€/KG) • Increased by 59.2% in Q2/2022 vs. Q2/2021 • Increased by 30.0% in Q2/2022 vs. Q1/2022 • Increased by 45.1% in H1/2022 vs. H1/2021 Incl. raw and other materials in reported currencies 21
Slide 22: Net debt and debt maturities
APPENDIX NET DEBT AND DEBT MATURITIES 22
Slide 23: Network development
APPENDIX NETWORK DEVELOPMENT NAD Vianor, NAD, N-Tyre; -84 stores in H1/2022 N-TYRE VIANOR VIANOR – 1,052 SERVICE CENTERS USA CANADA IN 14 COUNTRIES 532 25 174 own stores and 878 partners ICELAND Own -1; partner +6 vs. year-end 2021 4 • Largest tire chain in the Nordic countries: NORWAY 136 SWEDEN 92
Slide 24: 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