After several months of test production, Nokian Tyres’ new factory in the USA has begun making tyres destined for retail sale. Now that the tyre maker has reached this milestone on schedule, it will steadily increase volume throughout the year and will continue growing it until reaching an annual capacity of four million tyres by 2023.
Nokian Tyres has traditionally focused first and foremost on winter tyres, and these products currently account for around 70 per cent of the company’s passenger vehicle tyre business. But a reputation as a winter specialist means the brand hasn’t gained significant traction in markets where winter tyres find little favour, such as the UK. The tyre maker intends to rectify this.
In spite of what it calls a “soft” market for car tyres in Europe last year, Nokian Tyres maintained its level of net sales throughout the period. Operating profit was lower year-on-year, and profit considerably increased. Operating profit is expected to take another tumble in 2020.
Just over two years after groundbreaking, Nokian Tyres officially opened its new North American production facility. A ceremony was held at the Dayton, Tennessee plant on 2 October to mark the start of operations. The facility is currently engaged in trial production and is expected to be ready to make tyres for commercial use in early 2020.
Brexit is perhaps just over a month away, and while many companies face an uncertain future, Nokian Tyres is in the happy position of being relatively unconcerned about the UK rescinding its European Union membership. That’s just as well, as the Finnish tyre maker has other things to worry about.
The sentencing of nine former Nokian Tyres employees for the misappropriation of business secrets has been welcomed by both the tyre maker and by Black Donuts Engineering – albeit for different reasons. Both parties now look forward to progressing beyond the case, which has been ongoing since 2011.
The Board of Directors at Nokian Tyres has set new financial targets for 2019-2021. These targets include faster than market growth of more than five per cent CAGR, EBIT at 22 per cent and a shareholders’ dividend of more than 50 per cent of net earnings. Nokian says the
financial targets will guide the company in reaching the strategic ambitions it set in early 2018, which include increasing sales by 50 per cent in Central Europe and doubling them in North America within the next five years.
Sales and profits headed in the right direction for Nokian Tyres in the second quarter and first half of 2018. The Finnish tyre maker reports a 6.4 per cent increase in net sales, to 429.1 million euros, in the six months to 30 June. Operating profit during this period rose 10.7 per cent year-on-year to 169.3 million euros and the operating margin reached 22.1 per cent (21.3 per cent in H1 2017). Profit for the period amounted to 134.1 million euros, 15.2 per cent higher than a year ago, and earnings per share rose to 0.97 euros.
Teemu Kangas-Kärki has been named Nokian Tyres’ new chief financial officer, a position he will take up on 16 July. The tyre maker has also announced that, starting 1 October, Jukka Kasi will become its new vice-president, Products and Technologies. Both men gain a place on the Nokian Tyres management team and report to Hille Korhonen, the company’s president and chief executive officer.
A groundbreaking ceremony held today marked the start of construction work on a new testing and technology centre being set up by Nokian Tyres in Spain. Festivities to celebrate the occasion were held at the site in Santa Cruz de la Zarza. Nokian Tyres anticipates the completion of the first test tracks next year ahead of the technology centre attaining full operational status in 2020.
Worn tyres find use in many applications – they may serve as playground swings or as fenders on a wharf. They’re often invisible in plain sight, however Nokian Tyres intends to take advantage of their ubiquity. The tyre maker has placed tyre safety information on repurposed old tyres all around its home market of Finland.
Although held back by exchange rate effects, net sales at Nokian Tyres were higher in the first three months of 2018 than a year earlier. Sales were up 3.1 per cent to 336.0 million euros; had the exchange rate effect been neutral, the tyre maker estimates that net sales would have increased 9.3 per cent year-on-year. Nevertheless, Hille Korhonen, president and chief executive officer of Nokian Tyres, referred to the result as “a good start of the year.”
Anne Leskelä, Nokian Tyres’ chief financial officer and vice-president of Finance and IR, announced today her resignation from the company. She will continue in her position until the beginning of July 2018, and the Finnish tyre maker reports that the recruitment process to find a new chief financial officer will commence immediately.
Nokian Tyres has appointed Mark Earl vice-president of its Americas business area. He will start in this position on 1 May 2018 and report to Hille Korhonen, the tyre maker’s president and chief executive officer.
On 1 January 2018, a new organisational structure will take effect at Nokian Tyres. While the company’s business unit structure – Passenger Car Tyres, Nokian Heavy Tyres and Vianor – will remain unchanged and its external reporting model will continue to include business units and geographical areas, from the start of next year the Passenger Car Tyres business unit will be divided into three new business areas. A new unit, named Products and Technologies, is also being established.