Strong results and cash flow a challenging market ahead in early 2013
Nokian Tyres group’s net sales increased by 10.7% to EUR 1,612.4 million (EUR 1,456.8 million in 2011). Operating profit grew to EUR 415.0 million (EUR 380.1 million). Profit for the period amounted to EUR 330.9 million (308.9). Earnings per share increased to EUR 2.52 (EUR 2.39). Cash flow from operations was EUR 262.3 million (EUR 114.1 million). The Board of Directors proposes a dividend of EUR 1.45 (EUR 1.20) per share.
Kim Gran, President and CEO:n“In 2012 Nokian Tyres performed well in a challenging environment and recorded all time high sales and profits combined with excellent cash flow. Our market position improved in core areas, the company is debt free and we are able to develop our business further from a healthy position.
We got a flying start to the year 2012 sales and were running full utilization of our capacities in H1. The weak economic situation in Central Europe combined with high carry-over inventories in distribution resulted however in a dramatic drop in demand in CE. Also our sales were hit and growth in CE stalled during Q3 and Q4. Due to decisive and rapid changes in production, allocating a higher share of production and sales to Russia and support from reduced costs we managed to end the year with reasonably good results.
The Russian tyre market continued to grow double digits and also the Nordic countries were relatively healthy. Despite the challenges in CE we managed to increase full year car tyre sales volumes, improve sales mix, overall ASP and to improve our market position. Our car tyre sales in Russia grew at a triple rate compared to the overall market, further strengthening our market leader position. In the Nordic countries sales came in as planned, we gained winter tyre market share and continue to be a clear market leader.
A continued expansion of our distribution network spearheaded by Vianor, combined with test winning products are cornerstones to our growth. It is again encouraging that we managed to open 127 new Vianor stores, now totalling 1,037 stores and add three new countries France, Serbia and Bosnia to our network now operating in 26 countries.
Our new factory in Russia, wall to wall with the previous one, was commissioned and represents the absolute top in automation, productivity and quality. In 2012 we scored some 6% labour productivity and 11% output improvement in production despite a harsh market environment. With the new factory up and running we have presently an inbuilt capability to increase output rapidly without capex to meet market growth and further to increase output by 50% by adding lines in Russia.
We are looking into 2013 with confidence. After a slow start for the year in Q1 we expect the market to present us with some growth opportunities. With overwhelming test wins in 2012, the newly launched next generation of Hakkapeliitta winter tyres and test winner summer tyres, our product offering will be by far the best we have ever had. Vianor is to be expanded again by more than 100 shops and our market geography in Russia and Northern Europe is looking comparatively healthy offering us a good base for profitable business.”