Wed May 4 08:00 am 2016 in category Stock exchange releases
Nokian Tyres plc Interim Report 4 May 2016, 8 a.m.
Sales grew in CE and Nordics, profitability improved
This release is a summary of Nokian Tyres’ Interim Report January-March 2016.
January-March 2016
- Net sales decreased by 1.9% to EUR 275.8 million (281.3 in 1-3/2015). Currency rate changes affected net sales negatively by EUR 14.6 million compared with the rates in 1-3/2015.
- Operating profit increased by 4.6% to EUR 50.5 million (48.3). Operating profit percentage was 18.3% (17.2%).
- Profit for the period decreased by 70.5% to EUR 39.9 million (135.3). In Q1/2015, the company returned the 2007-2010 total additional taxes and punitive interests of EUR 100.3 million to the financial result, based on the annulment decision made by the Board of Adjustment of Finnish Tax Administration. Excluding the tax decision, profit for the period increased by 13.8% compared to Q1/2015.
- Earnings per share were EUR 0.30 (1.02).
- Cash flow from operating activities EUR -61.4 million (-16.8) was affected by the payment of EUR 51.0 million of additional taxes with punitive tax increases and interests concerning the tax years 2007-2010.
Financial guidance (updated)
In 2016, with current exchange rates, net sales and operating profit are to remain at the same level compared to 2015. Q2/2016 will be weaker than Q2/2015 due to sales shifting nearer to the season and customers’ high winter tyre inventory levels in Russia and North America.
Previous guidance (5 Feb 2016)
In 2016, with current exchange rates, net sales and operating profit are to remain at the same level compared to 2015.
Key figures, EUR million
| 1-3 /16 |
1-3 /15 |
Change % |
4-6/ 15 |
7-9/ 15 |
10-12/15 | 2015 | |
| Net sales | 275.8 | 281.3 | -1.9 | 345.5 | 311.0 | 422.3 | 1,360.1 |
| Operating profit | 50.5 | 48.3 | 4.6 | 80.6 | 72.4 | 94.8 | 296.0 |
| Operating profit % | 18.3 | 17.2 | 23.3 | 23.3 | 22.5 | 21.8 | |
| Profit before tax | 48.5 | 63.5 | -23.7 | 73.2 | 64.6 | 72.9 | 274.2 |
| Profit for the period | 39.9 | 135.3 | -70.5 | 64.5 | 57.7 | -16.8 | 240.7 |
| Earnings per share, EUR |
0.30 | 1.02 | -70.8 | 0.48 | 0.43 | -0.13 | 1.80 |
| Equity ratio, % | 74.5 | 71.7 | 70.8 | ||||
| Cash flow from operating activities |
-61.4 | -16.8 | 283.4 | ||||
| Gearing, % | -8.5 | -8.0 | -16.9 | ||||
| Interest-bearing net debt | -111.8 | -112.6 | -209.7 | ||||
| Capital expenditure | 19.1 | 21.9 | -12.9 | 26.3 | 24.5 | 29.0 | 101.7 |
Ari Lehtoranta, President and CEO:
“Our market performance has started in line with our expectations. Challenges in Russia continue with declining new car sales and tyre market. Winter tyre deliveries both for North America and Russia have been lower than last year because of the higher customer inventory levels. We have been able to increase summer tyre sales in all our markets and winter tyre sales especially to Central Europe. We have gained market share in most of our markets keeping our strong position in the Nordics.
Heavy Tyres’ sales remained at the last year’s level but the profitability improved. Productivity continued to develop with double-digit numbers in Heavy Tyres and 4% in Passenger car tyres. Vianor’s results were impacted by later start of the spring season.
Production volumes were higher than last year. The raw material cost decline continued and our lower production cost supported profitability. Negative impact came from the ASP development. ASP was impacted by currencies and several mix issues, but also by local price reductions. Negative ASP development took down the net sales by 1.9% from last year. Currencies caused a EUR 14.6 million negative impact; thus the net sales would have grown by 3% with comparable currencies. All above resulted in improved profitability. Operating profit improved by 4.6% from last year.
The growth of our branded distribution network was slower. The number of Vianor, NAD and N-Tyre outlets in our network grew by 18, and the current number of Vianor stores is 1,475 and the NAD/N-Tyre network has already grown to 1,377 stores. Economic situation in Russia and CIS causes some slowdown in the growth of the network as some partner outlets have been closed.
We reiterate our full year guidance. As said already in February, the sales will be more second half weighted this year than last year. Considering all the timing changes of the deliveries, the second quarter will be weaker than corresponding quarter last year.
In the first months of the year we had some excellent but also negative news. We managed to make a common agreement for the Nokian passenger car tyre factory. The agreement increases the flexibility of the production and guarantees our employees at least two and a half years of relief of layoffs. Immediately after this we told about the magazine test practices from the past and how we corrected them in our own processes. We continue working with all relevant parties to develop industry-wide test principles.
Thanks again for our employees in delivering good results in a difficult environment. Our customers in distribution are very satisfied with recent developments on how we support and service them. I am proud of what we do and, after correcting the practices in magazine tests, also proud of the way we do things. This gives me confidence on a positive future.”
BUSINESS UNIT REVIEWS
Passenger Car Tyres
| 1-3 /16 |
1-3 /15 |
Change % |
4-6/15 | 7-9/ 15 |
10-12/15 | 2015 | |
| Net sales, M€ | 202.4 | 207.6 | -2.5 | 241.2 | 226.3 | 276.5 | 951.5 |
| Operating profit, M€ |
62.3 | 60.1 | 3.7 | 69.6 | 75.6 | 80.3 | 285.5 |
| Operating profit, % |
30.8 | 28.9 | 28.9 | 33.4 | 29.0 | 30.0 |
Heavy Tyres
| 1-3 /16 |
1-3 /15 |
Change % |
4-6/ 15 |
7-9/ 15 |
10-12/ 15 |
2015 | |
| Net sales, M€ | 37.6 | 37.6 | -0.2 | 38.0 | 37.9 | 41.8 | 155.3 |
| Operating profit, M€ |
8.9 | 6.7 | 32.7 | 7.5 | 7.8 | 6.7 | 28.7 |
| Operating profit, % |
23.7 | 17.9 | 19.8 | 20.6 | 15.9 | 18.5 |
Vianor
Equity-owned operations
| 1-3 /16 |
1-3 /15 |
Change % |
4-6/ 15 |
7-9/ 15 |
10-12/ 15 |
2015 | |
| Net sales, M€ | 53.8 | 55.0 | -2.3 | 86.7 | 66.4 | 119.4 | 327.6 |
| Operating profit, M€ |
-14.7 | -12.6 | -16.9 | 5.7 | -6.0 | 11.1 | -1.9 |
| Operating profit, % |
-27.3 | -22.9 | 6.5 | -9.1 | 9.3 | -0.6 |
Press and analyst meetings
The result presentation for analysts and media will be held in Hotel Kämp in Helsinki on 4 May 2016 at 10.00 a.m. Finnish time. The presentation can be listened starting at 10 a.m. through audiocast via internet at www.nokiantyres.com/resultinfo-Q1-2016.
The event can also be attended via conference call. Please dial in 5-10 minutes before the beginning of the event: FI +358 9 8171 0495, UK +44 20 31940552, US +1 855 7161597.
Stock exchange release and presentation material will be available before the event from https://www.nokiantyres.com/company/investors/.
An audio file of the event will be available on the company’s website later same day.
Nokian Tyres interim report January-June 2016 will be published on 9 August 2016.
Further information:
Mr. Ari Lehtoranta, President and CEO, tel: +358 10 401 7733
Nokian Tyres plc
Antti-Jussi Tähtinen, Vice President, Marketing and Communications
Distribution: Nasdaq Helsinki, media, www.nokiantyres.com
Attachment: Nokian Tyres’ Interim Report January-March 2016
Attachments
Interim Report Q1-2016
Presentation