Nokian Tyres Half Year Financial Report

August 6, 2019

By: The Working Forest Staff


This release is a summary of Nokian Tyres’ Half Year Financial Report January–June 2019. The complete report is also available on the company website at

April–June 2019

  • Net sales decreased by 2.3% to EUR 419.1 million (429.1 in 4−6/2018). With comparable currencies, net sales decreased by 2.6%.
  • Operating profit decreased to EUR 94.1 million (108.0), with no significant currency impact.
  • Cash flow from operating activities was EUR -20.8 million (169.0; positively impacted by EUR 148 million due to the rulings on the tax disputes).
  • Profit for the period was EUR 73.0 million (87.5). 
  • Earnings per share decreased to EUR 0.53 (0.63). 

January–June 2019

  • Net sales decreased by 0.3% to EUR 762.8 million (765.2 in 1−6/2018). With comparable currencies, net sales increased by 0.2%.
  • Operating profit decreased to EUR 148.0 million (169.3), negatively impacted by currencies.
  • Profit for the period was EUR 267.6 million (134.1) and was positively impacted by EUR 149.6 million related to the rulings on the tax disputes concerning the years 2007−2011.  
  • Earnings per share increased to EUR 1.94 (0.97) and were positively impacted by EUR 1.08 related to the rulings on the tax disputes.  
  • Cash flow from operating activities was EUR -89.8 million (150.6; positively impacted by EUR 148 million due to the rulings on the tax disputes).

Guidance for 2019 (updated on June 14, 2019)

In 2019, net sales with comparable currencies are expected to be slightly higher and operating profit to be lower compared to 2018. In line with Nokian Tyres’ updated 2018 strategy, the company is targeting further growth in Russia, Central Europe, and North America. As a result of ongoing investment programs to support the growth, operating profit in 2019 will include significant additional operating costs. 

Hille Korhonen, President and CEO:

“In the first half of the year, our net sales with comparable currencies were slightly higher than in the same period last year. The progress we made in Heavy Tires and Vianor was offset by lower net sales in Passenger Car Tires. The drop in the passenger car tire sales volumes, mainly in Central Europe, had a negative impact on our operating profit. In addition, the result was impacted by currencies and higher material and production costs.

In H1/2019, the development in the car and tire sector continued to be weak in Europe. The competitive landscape in the Central European replacement car tire market is tight due to weakness in the OE segment, as there is a high supply of tires in the market. We expect short-term weakness in sales volume growth in Central Europe to continue during the remainder of the year. There is also some level of uncertainty in the Russian market.

Despite market uncertainties, we will continue to pursue our growth agenda going forward. Our focus is on executing our strategic projects, especially the US factory ramp-up. During the first half, we invested EUR 148 million including the US factory, testing center in Spain and Heavy Tyres capacity increase. In the US, in line with the original schedule, we reached a significant milestone by producing the first test tire in the new factory in summer. Commercial production is expected to start in early 2020.

In Spain, the construction work of our new testing center is proceeding on schedule. The center enables year-round testing of summer, winter, and all-season tires, and it is the largest single investment in testing in Nokian Tyres’ history. A good example of our strong R&D and testing capabilities are the new Central European summer tires, which are showing a good commercial success.

In Heavy Tyres, the project to increase the production capacity of the factory in Finland by 50% and more than double the number of new products is well underway. A new R&D center, which is being built as part of the investment to accelerate the testing phase of new tire models, will be completed this year.”  

Key figures, EUR million

Net sales 419.1 429.1 -2.3% -2.6% 762.8 765.2 -0.3% 0.2% 1,595.6
Operating profit 94.1 108.0     148.0 169.3     372.4
Operating profit % 22.4% 25.2%     19.4% 22.1%     23.3%
Profit before tax 88.9 105.4     179.5 165.4     361.7
Profit for the period 73.0 87.5     267.6 134.1     295.2
Earnings per share, EUR ** 0.53 0.63     1.94 0.97     2.15
ROCE, % ***         20.4% 25.3%     23.3%
Equity ratio, %         70.5% 70.5%     71.0%
Cash flow from operating activities -20.8 169.0     -89.8 150.6     536.9
Gearing, %         15.7 -7.2     -21.2%
net debt
        252.0 -99.6     -315.2
Capital expenditure 93.7 47.4     148.0 64.9     226.5

* Comparable currencies
** EPS excl. the impact of the rulings on the tax disputes of EUR 1.08 were EUR 0.33
*** Rolling 12 months

IFRS 16 Leases

The new IFRS 16 standard became effective on 1 January 2019 onwards and replaced the previous standard IAS 17.

Nokian Tyres chose to use the exemption provided by the standard not to account lease liability for leases, which have a lease term of 12 months or less and not to account lease liability for leases in which the underlying asset is not material to Nokian Tyres. The majority of leases recognized as Right-of-use assets under IFRS 16 are comprised of Vianor chain real estate and warehouses.

The IFRS 16 standard had a minor impact on the H1 income statement (EBIT impact EUR +1.3 million, net income impact EUR -0.8 million). Interest-bearing net debt on June 30, 2019 increased by EUR 126.1 million and assets by EUR 125.3 million due to the recognition of right-of-use assets.


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