NOKIAN RENKAAT OYJ 1 (27)
Nokian Tyres plc Half Year Financial Report January-June 2021, August 3, 2021 at 2:00 p.m.
Nokian Tyres plc Half Year Financial Report January-June 2021:
Strong volume and profit growth
April-June 2021
- Net sales were EUR 416.2 million (270.7 in April−June 2020) and grew by 53.7%. With comparable currencies, net sales increased by 54.8%.
- Segments operating profit was EUR 89.6 million (24.4), with negative currency impact of approximately EUR 5 million. Operating profit was EUR 81.8 million (-22.8).
- Segments earnings per share were EUR 0.51 (0.09). Earnings per share were EUR 0.47 (-0.18).
- Cash flow from operating activities was EUR 9.3 million (25.3).
January-June 2021
- Net sales were EUR 758.0 million (550.5 in January−June 2020) and grew by 37.7%. With comparable currencies, net sales increased by 41.5%.
- Segments operating profit was EUR 139.9 million (40.8), with negative currency impact of approximately EUR 15 million. Operating profit was EUR 126.1 million (-13.7).
- Segments earnings per share were EUR 0.80 (0.16). Earnings per share were EUR 0.72 (-0.16).
- Cash flow from operating activities was EUR -15.1 million (-13.6).
Guidance for 2021
In 2021, Nokian Tyres' net sales with comparable currencies and segments operating profit are expected to grow significantly.
The global car and tire demand is expected to pick up, but the COVID-19 pandemic continues to cause uncertainties for the development.
Jukka Moisio, President and CEO:
"Tire demand continued strong in the second quarter. Thanks to a great performance by all our business units and business areas, net sales increased by 54.8% with comparable currencies. Segments operating profit grew significantly driven by higher sales volume.
In Passenger Car Tyres, volume growth was particularly strong in Russia. The higher share of Russian volume had a negative impact on the average sales price.
To ensure the availability of our premium products, we operated the Russian factory at full capacity. In the US, we continued to ramp-up production to reach an output of around one million tires in 2021. In Finland, we are increasing our production capacity for passenger car tires by approximately 30% this year as announced in March.
In the second quarter, our operating cash flow was positive despite the increasing working capital requirements. Capital expenditure was lower year-over-year in line with the 2021 plan.
Raw material costs started to increase in the second quarter and are estimated to have a significant negative impact in the second half of the year compared to 2020, together with increasing logistics costs. We are taking mitigating actions to reduce the impact of cost inflation.
In 2021, our focus will remain on growth and cash flow. New products and continuous improvements in go-to-market activities will help us build an even stronger foothold in our core markets. We want to benefit from a good momentum in the market while still acting prudently to keep our company strong and competitive for years to come."
Nokian Tyres plc Half Year Financial Report January−June 2021
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Key figures
CC* | CC* | ||||||||
EUR million | 4-6/21 | 4-6/20 Change Change | 1-6/21 | 1-6/20 Change Change | 2020 | ||||
Net sales | 416.2 | 270.7 | 53.7% 54.8% | 758.0 | 550.5 | 37.7% 41.5% | 1,313.8 | ||
Operating profit | 81.8 | -22.8 | 126.1 | -13.7 | 120.0 | ||||
Operating profit % | 19.6% | -8.4% | 16.6% | -2.5% | 9.1% | ||||
Profit before tax | 79.6 | -26.9 | 123.3 | -21.2 | 106.0 | ||||
Profit for the period | 64.5 | -24.8 | 100.0 | -22.4 | 86.0 | ||||
EPS, EUR | 0.47 | -0.18 | 0.72 | -0.16 | 0.62 | ||||
Segments | 89.6 | 24.4 | 139.9 | 40.8 | 190.2 | ||||
operating profit | |||||||||
Segments | 21.5% | 9.0% | 18.5% | 7.4% | 14.5% | ||||
operating profit % | |||||||||
Segments EPS, EUR | 0.51 | 0.09 | 0.80 | 0.16 | 1.04 | ||||
Segments ROCE, %** | 13.9% | 10.6% | 9.3% | ||||||
Equity ratio, % | 66.1% | 63.3% | 65.3% | ||||||
Cash flow from | 9.3 | 25.3 | -15.1 | -13.6 | 422.4 | ||||
operating activities | |||||||||
Gearing, % | 9.4% | 16.3% | -1.1% | ||||||
Interest-bearing | 140.0 | 254.1 | -17.2 | ||||||
net debt | |||||||||
Capital expenditure | 23.4 | 36.6 | 39.3 | 87.5 | 149.9 | ||||
- Comparable currencies ** Rolling 12 months
The definitions of alternative performance measures (non-IFRS figures) are presented in the report by the Board of Directors in Nokian Tyres Financial Review 2020.
Nokian Tyres plc Half Year Financial Report January−June 2021
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FINANCIAL RESULTS IN APRIL-JUNE 2021
Net sales in April−June 2021 increased by 53.7% and amounted to EUR 416.2 million (April−June 2020: 270.7). With comparable currencies, net sales increased by 54.8%.
Net sales by geographical area
CC* | ||||||||||||||
EUR million | 4−6/2021 | 4−6/2020 | Change | Change | 2020 | |||||||||
Nordics | 163.5 | 133.3 | 22.7% | 16.5% | 592.2 | |||||||||
Other Europe | 103.3 | 70.5 | 46.5% | 42.6% | 330.9 | |||||||||
Russia and Asia | 93.5 | 39.8 | 134.9% | 166.8% | 188.7 | |||||||||
Americas | 55.9 | 27.1 | 106.5% | 110.5% | 166.7 | |||||||||
Total | 416.2 | 270.7 | 53.7% | 54.8% | 1,313.8 | |||||||||
* Comparable currencies | ||||||||||||||
Net sales by business unit | ||||||||||||||
CC* | ||||||||||||||
EUR million | 4−6/2021 | 4−6/2020 | Change | Change | 2020 | |||||||||
Passenger Car Tyres | 279.9 | 163.9 | 70.8% | 74.9% | 871.3 | |||||||||
Heavy Tyres | 62.6 | 40.5 | 54.8% | 52.6% | 194.6 | |||||||||
Vianor | 91.5 | 80.8 | 13.1% | 8.0% | 318.1 | |||||||||
Other operations and | -17.8 | -14.5 | -22.6% | -70.1 | ||||||||||
eliminations | ||||||||||||||
Total | 416.2 | 270.7 | 53.7% | 54.8% | 1,313.8 | |||||||||
* Comparable currencies |
Raw material unit costs (EUR/kg) in manufacturing increased by 3.0% year-over-year, positively impacted by currencies, and increased by 5.2% from the first quarter of 2021.
Segments operating profit amounted to EUR 89.6 million (24.4) with negative currency impact of approximately EUR 5 million.
Operating profit was EUR 81.8 million (-22.8). The non-IFRS exclusions were EUR -7.8 million (-47.3), including EUR -7.4 million (-7.3) related to the US factory ramp-up.
Segments operating profit by business unit
EUR million | 4-6/2021 | 4-6/2020 | 2020 |
Passenger Car Tyres | 70.6 | 13.6 | 177.8 |
Heavy Tyres | 11.7 | 2.6 | 23.7 |
Vianor | 10.1 | 9.6 | 4.0 |
Other operations and eliminations | -2.8 | -1.3 | -15.3 |
Segments operating profit total | 89.6 | 24.4 | 190.2 |
Non-IFRS exclusions | -7.8 | -47.3 | -70.2 |
Financial items and taxes
Net financial expenses were EUR 2.2 million (4.2), including net interest expenses of EUR 1.8 million (2.1). Net financial expenses include an expense of EUR 0.4 million (2.0) due to exchange rate differences. Segments profit before tax was EUR 87.4 million (20.3). Profit before tax was EUR 79.6 million (-26.9) and taxes were EUR -15.1 million (2.1). Segments profit for the period amounted to
Nokian Tyres plc Half Year Financial Report January−June 2021
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EUR 70.7 million (12.7). Profit for the period amounted to EUR 64.5 million (-24.8). Segments earnings per share were EUR 0.51 (0.09), and earnings per share were EUR 0.47 (-0.18).
Cash flow
In April−June 2021, cash flow from operating activities was EUR 9.3 million (25.3). Working capital increased by EUR 88.8 million (increased by 11.2). Inventories increased by EUR 15.1 million (decreased by 33.9) and receivables increased by EUR 78.5 million (increased by 0.4). Payables increased by EUR 4.8 million (decreased by 44.7).
FINANCIAL RESULTS IN JANUARY-JUNE 2021
Net sales in January−June 2021 increased by 37.7% and amounted to EUR 758.0 million (January−June 2020: 550.5). With comparable currencies, net sales increased by 41.5%. Currency exchange rates affected net sales negatively by EUR 20.8 million.
Net sales by geographical area
CC* | ||||||||||||||
EUR million | 1−6/2021 | 1−6/2020 | Change | Change | 2020 | |||||||||
Nordics | 296.8 | 256.1 | 15.9% | 11.6% | 592.2 | |||||||||
Other Europe | 186.8 | 133.1 | 40.4% | 39.7% | 330.9 | |||||||||
Russia and Asia | 172.7 | 96.3 | 79.3% | 109.4% | 188.7 | |||||||||
Americas | 101.7 | 65.0 | 56.5% | 62.1% | 166.7 | |||||||||
Total | 758.0 | 550.5 | 37.7% | 41.5% | 1,313.8 | |||||||||
* Comparable currencies | ||||||||||||||
Net sales by business unit | ||||||||||||||
CC* | ||||||||||||||
EUR million | 1−6/2021 | 1−6/2020 | Change | Change | 2020 | |||||||||
Passenger Car Tyres | 525.8 | 354.4 | 48.4% | 55.3% | 871.3 | |||||||||
Heavy Tyres | 119.7 | 91.6 | 30.7% | 30.4% | 194.6 | |||||||||
Vianor | 149.6 | 135.3 | 10.6% | 6.5% | 318.1 | |||||||||
Other operations and | -37.1 | -30.8 | -20.6% | -70.1 | ||||||||||
eliminations | ||||||||||||||
Total | 758.0 | 550.5 | 37.7% | 41.5% | 1,313.8 | |||||||||
* Comparable currencies |
Raw material unit costs (EUR/kg) in manufacturing decreased by 2.8% year-over-year, positively impacted by currencies.
Segments operating profit amounted to EUR 139.9 million (40.8) with negative currency impact of approximately EUR 15 million.
Operating profit was EUR 126.1 million (-13.7). The non-IFRS exclusions were EUR -13.8 million (-54.6), including EUR -13.9 million (-13.1) related to the US factory ramp-up.
Segments operating profit by business unit
EUR million | 1-6/2021 | 1-6/2020 | 2020 |
Passenger Car Tyres | 123.4 | 39.5 | 177.8 |
Heavy Tyres | 24.3 | 10.8 | 23.7 |
Vianor | 0.2 | -2.8 | 4.0 |
Nokian Tyres plc Half Year Financial Report January−June 2021
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Other operations and eliminations | -8.0 | -6.7 | -15.3 |
Segments operating profit total | 139.9 | 40.8 | 190.2 |
Non-IFRS exclusions | -13.8 | -54.6 | -70.2 |
Financial items and taxes
Net financial expenses were EUR 2.8 million (7.4), including net interest expenses of EUR 3.8 million (3.5). Net financial expenses include an income of EUR 1.0 million (expense of 3.9) due to exchange rate differences. Segments profit before tax was EUR 137.1 million (33.4). Profit before tax was EUR
123.3 million (-21.2) and taxes were EUR -23.3 million (-1.2). Segments profit for the period amounted to EUR 110.9 million (22.4). Profit for the period amounted to EUR 100.0 million (-22.4). Segments earnings per share were EUR 0.80 (0.16), and earnings per share were EUR 0.72 (-0.16).
Cash flow
In January−June 2021, cash flow from operating activities was EUR -15.1 million (-13.6). Working capital increased by EUR 176.2 million (increased by 73.5). Inventories increased by EUR 47.2 million (increased by 7.2) and receivables increased by EUR 157.2 million (increased by 15.3). Payables increased by EUR 28.2 million (decreased by 51.0).
Investments
Investments in January−June 2021 amounted to EUR 39.3 million (87.5). Depreciations and amortizations totaled EUR 68.1 million (90.3).
Financial position on June 30, 2021
June 30, | June 30, | Dec 31, | |
EUR million | 2021 | 2020 | 2020 |
Cash and cash equivalents | 187.1 | 403.7 | 504.2 |
Interest-bearing liabilities | 327.1 | 657.8 | 487.0 |
of which current interest-bearing liabilities | 84.2 | 446.6 | 229.7 |
Interest-bearing net debt | 140.0 | 254.1 | -17.2 |
Unused credit limits* | 765.8 | 567.3 | 507.1 |
of which committed | 305.5 | 330.4 | 205.5 |
Gearing ratio, % | 9.4% | 16.3% | -1.1% |
Equity ratio, % | 66.1% | 63.3% | 65.3% |
- The current credit limits including the EUR 500 million commercial paper program are used to finance inventories, trade receivables, and subsidiaries in distribution chains, thereby controlling the typical seasonality in the Group's cash flow. The credit limits were increased by EUR 100 million with two bilateral back-up facilities in June 2021.
Personnel
1-6/2021 | 1-6/2020 | 2020 | |
Group employees | |||
on average | 4,825 | 4,915 | 4,859 |
at the end of the review period | 4,822 | 4,729 | 4,603 |
in Finland, at the end of the review period | 1,804 | 1,724 | 1,721 |
in Russia, at the end of the review period | 1,566 | 1,565 | 1,528 |
in North America, at the end of the review period | 313 | 291 | 229 |
Vianor (own) employees, at the end of the review period* | 1,444 | 1,504 | 1,411 |
* Included in Group employee figures
Nokian Tyres plc Half Year Financial Report January−June 2021
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Nokian Renkaat Oyj published this content on 03 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 August 2021 14:02:04 UTC.
