Nokian Tyres (TYRES) Q2 2024 earnings summary

Executive summary

• Net sales increased by 11.2% year-over-year in Q2 2024, reaching EUR 324.6 million, driven by improved tire availability and strong growth in Central Europe, despite production losses from political strikes in Finland.

• Segment operating profit rose to EUR 20.1 million from EUR 15.2 million in Q2 2023, supported by higher sales volume and lower raw material costs.

• Major investments completed in the U.S. factory and ongoing in Romania, with the first tire produced and commercial production set for early 2025.

• Sustainability initiatives advanced, including the first concept tire using renewable lignin-based material and a target to reach 50% recycled/renewable materials in tires by 2030.

• CEO announced retirement during 2024; board is working on succession.

Financial highlights

• Q2 2024 net sales: EUR 324.6 million (Q2 2023: EUR 293.1 million); H1 2024 net sales: EUR 561.2 million (H1 2023: EUR 529.5 million).

• Segment EBITDA for Q2: EUR 46.8 million (Q2 2023: EUR 41.3 million); EBITDA margin 14.4%.

• Segment operating profit for Q2: EUR 20.1 million (Q2 2023: EUR 15.2 million); operating margin 6.2%.

• Capital expenditure in H1 2024: EUR 158.9 million, mainly for U.S. and Romanian factories.

• Equity ratio at 55.0%, gearing at 16.2% (June 2023: 60.0%), and interest-bearing net debt at EUR 219.6 million as of June 30, 2024.

Outlook and guidance

• Guidance unchanged: 2024 net sales and segment operating profit expected to grow significantly year-over-year.

• Raw material costs expected to gradually increase in H2 2024, with price/mix contribution expected to be flat.

• Full capacity at the U.S. factory expected by end of 2024; Romania factory commercial production to start in early 2025.

• Sales growth and profit generation are expected to be weighted toward the second half of 2024 due to seasonality.

• CapEx for 2024 projected at EUR 350 million, with a reduction to just over EUR 200 million in 2025.