Nokian Renkaat Oyj · OMXHEX:TYRES
Nokian Renkaat Oyj — Nokian Tyres — Investor Presentation (June 2006)
29 slides from Nokian Renkaat Oyj's investor presentation, Jun 15, 2006
Slide 1: Nokian Tyres in Russia
NOKIAN TYRES IN RUSSIA Safest tyres for Nordic conditions 15.6.2006 1
Slide 2: Drivers behind Nokian Tyres success
DRIVERS BEHIND NOKIAN TYRES SUCCESS ! FOCUS ! BRAND ! NEW PRODUCTS & INNOVATIONS ! HIGH INVESTMENTS ! COMPANY CULTURE ”The original winter tyre” 2
Slide 3: Nordic conditions – Strategy – Focus
NORDIC CONDITIONS –> STRATEGY > FOCUS Winter & Forest High growth potential – product segments and market areas Russia, North America, Eastern Europe 3
Slide 4: New products & innovations
NEW PRODUCTS & INNOVATIONS ! Minimum 25 % of sales new products ! Technological leadership ! High investment on winter tyre development and testing 4
Slide 5: New innovative product families for 2006 sales
NEW INNOVATIVE PRODUCT FAMILIES FOR 2006 SALES Nokian Hakkapeliitta 5 ! 38 sizes = Largest size range on the market Nokian Hakkapeliitta Sport Utility 5 ! 27 sizes = Largest size range on the market “The original winter tyre” 5
Slide 6: Main innovations
MAIN INNOVATIONS ! Bear claw stud area improves ice grip and reduces noise and road wear ! New evolution version of Nokian’s unique square stud ! Quattrotread construction with four different rubber compounds 6
Slide 7: Net sales by product area 2005
NET SALES BY PRODUCT AREA 2005 Net sales 686.5 m€ +13.8%, 14. consecutive year of growth Vianor 31% (33%) Net sales 235.1 m€ (223.9 m€) Change +5.0% Car tyres 55% (53%) Net sales 416.2 m€ (364.6 m€) Retreading operations and Change +14.2% truck tyres 4% (5%) Net sales 30.1 m€ (31.0 m€ ) Heavy tyres
Slide 8: Operating profit by product area 2005 (MEUR)
OPERATING PROFIT BY PRODUCT AREA 2005 (MEUR) Heavy Tyres 14.7 m€ (9.3 m€ ) Vianor 5.3 m€ (11.4 m€ ) Car Tyres 101.9 m€ (100.6 m€ ) (year 2004) 8
Slide 9: Gross sales by market area Jan-Dec 2005
GROSS SALES BY MARKET AREA JAN-DEC 2005 Sales of Nokian Tyres group (year 2004) Sales of Manufacturing units (year 2004) North America Others 0 % (0%) Finland North America Others 11 % (8%) 0% (0%) Finland Other Europe 27% (30%) 14% (10%) 24% (27%) 13 % (14%) Other Europe 16% (18%) Eastern Europe Sw
Slide 10: Sales development in Russia
RUSSIA SALES DEVELOPMENT IN RUSSIA Nokian Tyres clear # 1 in premium tyres Growth Q1 2006 +35.2% 4 mpcs 250 200 150 100 50 0 96 97 98 99 00 01 02 03 04 05 09 06 19 19 19 19 20 20 20 20 20 20 20 20 LE 10 1 Q
Slide 11: Sales of new cars and car park forecast in Russia
SALES OF NEW CARS AND CAR PARK FORECAST IN RUSSIA Sales of new cars Russian car park forecast 35 30 25 m units 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 Sales of new cars to grow to 2 million pcs by 2007 >50% of car sales western brands 11
Slide 12: Russian car tyre market news 2005
RUSSIAN CAR TYRE MARKET NEWS 2005 ! Russia’s car tire output up 8.5% on year in 2005 ! (Federal State Statistics Service) ! Russian new car market grows 14% in 2005 ! (ASM Holding) ! Russia’s car output down 2.5% on year in 2005 ! (ASM Holding) ! Russia’s car imports up 47.3% to 773,700 vehicles in
Slide 13: Market size projections – car and van tyre market in Russia
MARKET SIZE PROJECTIONS – CAR AND VAN TYRE MARKET IN RUSSIA Market size (k pcs), positive scenario 63 60 54 47 50 41 31 35 25,1 Market size (k pcs), expected scenario 40 31 19,5 27 15,3 30 23 12,1 70 9,3 tot. 30,44 32,93 36,35 40,09 44 49 54 63 7,2 8,7 11,4 13,6 60 6,2 20 5,3 3,3 4,3 1,5 2,4 23 50 1
Slide 14: Russian premium tyre market in 2005: market shares
RUSSIAN PREMIUM TYRE MARKET IN 2005: market shares Estimated total A-segment market shares 2005 by sell-in volume Winter tyres Pirelli market share > 30% Nokian Tyres Michelin 8 25 16 Summer tyres market share > 10% 17 18 Bridgestone 17 Continental GoodYear 14
Slide 15: Why production in Russia?
WHY PRODUCTION IN RUSSIA? The Russian market is strategically very important for Nokian Tyres Nokian is one of the most well-known tyre brands in Russia ! Tyres have been exported to Russia since 1964 ! Currently Nokian Tyres is one of top 3 players in the premium segment with a 20% market share (20
Slide 16: Why production in Russia? Benefits vs Finland
WHY PRODUCTION IN RUSSIA? Benefits compared to production in Finland (2005): ! no import duties => 6-15 euros per tyre (min. 6.25 euros/tyre) ! lower personnel costs => Finland EUR 45,000-50,000 per year => Russia EUR 5,000 per year (inflation 8-12% p.a.) ! 20-25% lower raw material costs (gap to na
Slide 17: Vianor outlets 2006, 31st March
VIANOR OUTLETS 2006, 31st March TOTAL: 207 OUTLETS over 10 outlets Vianor Finland - 67 outlets - 3 retreading plants - personnel ~430 Vianor Norway - 43 outlets - 2 retreading plants - personnel ~260 Vianor Russia - 35 outlets Vianor Estonia - 6 outlets - personnel ~30 Vianor Sweden - 55 outlets, +
Slide 18: Vianor in Russia
VIANOR IN RUSSIA ! Significant increase of Vianorin partner network ! Wider distribution ! More visibility and market presence ! No equity investment on distribution chain Murmansk 18
Slide 19: Vianor in Russia
VIANOR IN RUSSIA 31.3.2006: 35 outlets - additional contracts made planned outlets => approx 100 by the - organization established end of 2007 - network expansion accelerating Perm Nishnekamsk Tjumen Ufa Krasnodar Krasnodar Magnitogorsk Ulan Ude 19 10
Slide 20: Capex and growth plan for 2006
CAPEX AND GROWTH PLAN FOR 2006 => Investments Q1/2006: 14.7 m€ (23.7 m€ ) Total Investments for 2006 92 m€ (119.6 m€) RUSSIA ! capacity ramp-up and investments ! progressing according to plan ! 70 m€ in 2006-2007 ! 53 m€ 2006 140000 ! 4 million tyres in 2008 120000 100000 VIANOR EXPANSION Vianor ! N
Slide 21: Vsevolozhsk tyre factory
| Nokicin VSEVOLOZHSK TYRE FACTORY TYRES
Slide 22: Project history: why Vsevolozhsk?
PROJECT HISTORY: WHY VSEVOLOZHSK? ! Proximity to important regional markets in Russia and Nordic countries ! Availability of highly qualified work force ! Attractiveness of the investment climate ! Competence and professionalism of regional and local authorities ! Industrial zone with prepared engin
Slide 23: Project history: important milestones
PROJECT HISTORY: IMPORTANT MILESTONES 2003 2004 2005 2006 11 Feb 5 May 23 June Sep Jan Feb 6 June 22 Sep Oct Jan 15 Mar July Investigation on possible Official Start-up of Commissioning investment Decision Ground- Roofing of NT’s Board breaking celebration inauguration second of in Russia ceremony p
Slide 24: Ground-breaking ceremony June 2004
GROUND-BREAKING CEREMONY ON JUNE 2004 24
Slide 25: Official launch ceremony 22 September 2005
OFFICIAL LAUNCH CEREMONY 22 SEPTEMBER 2005 25
Slide 26: Vsevolozhsk factory today
VSEVOLOZHSK FACTORY TODAY ! Installed two production lines ! Approx 300,000 tyres were produced in 2005 ! Production is running at full capacity in a 24/7 mode ! Daily output in the range 5,500 – 6,100 tyres/ day ! Vsevolozhsk-produced tyres delivered to customers in key markets since September 2005
Slide 27: Investments and production volumes
INVESTMENTS AND PRODUCTION VOLUMES Total investment for the Russian factory 2004-2007 approx. 150 m€ 2005 approx. 55 m€ Accelerated timetable Production volumes in Russia 2005: start-up 0.3 million tyres 2006: 1.9 million tyres 2007: 3.1 million tyres 2008: 4.1 million tyres 27
Slide 28: Expansion plans
EXPANSION PLANS ! Warehouse commissioning: July 2006 ! Mixing will start-up: autumn 2006 ! Planned production capacity by 2008: 4 million tyres a year • third and fourth production lines to be installed in 2006 – 2007 ! Ultimate planned production capacity 8 million tyres a year • further expansion
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