Improved profitability in Q3 supported by favourable product mix, raw material cost savings and productivity development
- Net sales decreased 5.1% to EUR 311.0 million (EUR 327.7 million in 7-9/2014). Currency rate changes cut net sales by EUR 10.3 million compared with the rates in 7-9/2014.
- Operating profit increased 0.3% to EUR 72.4 million (72.1). Operating profit percentage was 23.3% (22.0%).
- Profit for the period increased 8.0% to EUR 57.7 million (53.4).
- Earnings per share were up 7.2% to EUR 0.43 (EUR 0.40).
- Net sales decreased 7.1% to EUR 937.9 million (EUR 1,009.2 million in 1-9/2014). Currency rate changes cut net sales by EUR 48.3 million compared with the rates in 1-9/2014.
- Operating profit was down 13.0% to EUR 201.2 million (231.2). Operating profit percentage was 21.5% (22.9%).
- Profit for the period increased 62.7% to EUR 257.5 million (158.3). In Q1 the company returned to the financial result the 2007-2010 total additional taxes and punitive interest of EUR 100.3 million, based on the annulment decision made by the Board of Adjustment of the Finnish Tax Administration.
- Earnings per share were up 62.5% to EUR 1.93 (EUR 1.19).
Full year financial guidance (reiterated)
In 2015, with current exchange rates, net sales are to decline slightly compared to 2014 and operating profit is estimated to be approximately EUR 270-295 million.
Key figures, EUR million:
|Operating profit, %||23.3||22.0||21.5||22.9||22.2|
|Profit before tax||64.6||61.7||4.7||201.3||196.2||2.6||261.2|
|Profit for the period||57.7||53.4||8.0||257.5||158.3||62.7||208.4|
|Earnings per share, EUR||0.43||0.40||7.2||1.93||1.19||62.5||1.56|
|Equity ratio, %||71.3||63.3||67.5|
|Cash flow from operations||-33.2||-95.3||65.2||-105.9||-120.8||12.3||458.3|
|RONA,% (roll. 12 months)||17.3||18.1||18.3|
Ari Lehtoranta, President and CEO:
“Russia’s economic challenges continue. Winter season deliveries, especially in Central Europe, are moving every year more and more towards the actual start of the season. At the same time, however, European and especially North American economies are more positive. Russia and CIS countries used to account for over 40% of our sales, and now that share is closer to 20%. Even though our net sales still was below last year’s figure in third quarter, we were able to improve our profitability, and the operating profit for the quarter reached last year’s level.
Profitability improvement in passenger car tyres came from a good product mix, improved productivity and lower raw material costs. The product mix was supported by the continuous success of SUV and Van tyres and the increased share of premium tyres. Productivity improvement was 5% this year despite the lower volumes. Global raw material prices were low due to low oil price levels and China’s economic slowdown.
Heavy Tyres contributed to the improved profitability and increased its net sales as well. In Vianor we are still waiting for the proper season to start, and profitability was lower than last year.
One of our key strengths, our distribution network, continued to grow as planned. We added 177 new Vianor, NAD and N-Tyre outlets to our branded distribution network, and the current number of Vianor stores is 1,429 and the NAD/N-Tyre network has already grown to over 1,200 stores. The recent flow of magazine test wins has proven that our product portfolio competitiveness is on an excellent level.
We were able to complete the painful capacity reduction negotiations in Finland. Our personnel has done tremendous work in a difficult environment, and I trust we now can start to build up the future also in our Nokian site with renewed organization. Our success can only come from the world’s best team of tyre professionals.
Based on the situation described above, I feel very confident that we have now started our journey back to profitable growth.”
Read the whole stock exchange release here.