Nokian Tyres
The latest EU sanctions against Russia will seriously affect Nokian Tyres and its business in Europe. The tyre maker says the sanctions will have a “significant impact” on its ability to manufacture tyres in Russia, which will reduce its ability to sell tyres in the EU, and within Central Europe in particular.
Nokian Tyres is expediting “plans to invest in new production capacity in Europe” in response to the sanctions against Russia, where the company has significant levels of tyre production. Specifically, Nokian’s board of directors will cut the dividend payable to shareholders by 106 million euros to fund the new capacity. Nokian Tyres will also increase capacity at its factories in Finland and the US with a view to becoming more geographically diversified in its manufacturing operations.
The war in Ukraine has brought “high uncertainty” to Nokian Tyres’ operational environment and manufacturing capacity, and as a result it is accelerating plans to invest in new production capacity in Europe. To help fund this capacity, the Board of Directors at Nokian tyres has decided to decrease the dividend payable for the 2021 financial year.
Nokian Tyres has explained the decision to retain its manufacturing operation in Russia, a facility that reportedly produced 82 per cent of Nokian’s passenger and light commercial vehicle tyres last year. The Finnish tyre maker states that by continuing to operate the passenger car tyre factory in Vsevolozhsk, Russia it wants to “make sure that the factory is operated and controlled by Nokian Tyres also in the future.”
The crisis in Ukraine has impacted upon Nokian Tyres’ business in multiple ways, and the company has now activated contingency plans to “mitigate the financial and operational impacts” upon business. At the same time, it has donated 100,000 euros to UNICEF to help children in the war zone.
Nokian Tyres posted all-time record sales in the past financial year. The Finnish manufacturer reports that its sales rose by 29.7 per cent (comparable currencies) to 1.71 billion euros. Operating profit also improved considerably, rising 123.5 per cent to 268.2 million euros. This resulted in an operating margin of 15.6 per cent, up 6.5 percentage points on the 2020 result. The tyre maker’s Board of Directors has proposed a dividend of 1.32 euros per share, to be paid in two instalments.
Nokian Tyres has introduced the first model in a family of tyres it says will “strongly support” the company’s growth targets in coming years. This is the Nokian Tyres Outpost AT, an all-season tyre for SUVs, crossovers and light trucks that “delivers safe, durable driving on any road – or off the road.” The Finnish manufacturer plans to sell this all-terrain product in markets all around the world.
Round the clock, seven days a week production will soon be reality at the Nokian Tyres plant in Nokia, Finland. The tyre maker says the change to this format should “significantly” increase production capacity for passenger car tyres. Nokian is creating approximately 80 new jobs at the factory to accommodate this higher capacity.
New sizes have joined the Nokian E-Truck medium/regional haul and Nokian R-Truck on-/off-road ranges. Nokian Tyres has introduced a steer axle Nokian E-Truck Steer fitment in size 385/55R22.5 as well as a Nokian R-Truck Trailer tyre in size 285/70R19.5.
Nokian Tyres has regained its operational strength. The Finnish manufacturer shares that its sales rose by more than a third in the first nine months of this year, while operating profit more than quadrupled over the same period, nudging the margin up to 17.9 per cent.
Finland’s Nokian Tyres says that its large investment phase is now over and, following revisions to the company’s mid-term strategy, the goal is now to “fully benefit” from these investments. The company aims for organic growth ahead of the market and increasing market share in all key regions, with a target to achieve net sales of 2 billion euros in the mid-term.
Under a new ten-year agreement, Nordic energy company Gasum will supply renewable wind energy for the electricity Nokian Tyres uses in its factory in Finland as well as its Vianor operations within the country. Supply of power produced at a new wind farm in North Ostrobotnia will start in 2023.
The difference a year can make. Almost 12 months to the day after reporting an operating loss of 13.7 million euros for the first half of 2020, Nokian Tyres has announced achieving an operating profit of 126.1 million in the six months to 30 June 2021 with an earnings per share of 0.72 euros. It achieved this result on the back of net sales that were up 37.7 per cent year-on-year to 758.0 million euros. Nokian Tyres notes that when looking at comparable currencies, net sales increased by 41.5 per cent.
Nokian Tyres has added a fourth production shift at its North American factory in Dayton, Tennessee, and is now producing tyres around the clock at its 2019-opened facility. The switch to 24/7 production coincides with the Dayton plant’s ISO 14001 certification.
Contractors who operate tractors in regions where winters are harsh rely on tyres that provide grip in varying conditions, such as the Nokian Hakkapeliitta TRI. Nokian Heavy Tyres has expanded this range with the addition of two 65-series sizes, 540/65R28 and 650/65R38. A total of 29 dimensions are now available.
Nokian Tyres