Nokian Tyres (TYRES) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales reached EUR 313.6 million, up 14.4% year-over-year in comparable currencies, driven by market share gains and improved tire availability, especially in Central Europe and the Nordics.

• Segments EBITDA was EUR 58.8 million (18.8% margin), up from EUR 46 million (16.7%) year-over-year; segments operating profit rose to EUR 30.4 million (9.7% margin) from EUR 19.6 million.

• Profitability improvement was mainly due to higher sales volumes and lower raw material costs.

• The Romanian factory is progressing on schedule, with the first tire produced in July and grand opening in September.

• Paolo Pompei appointed as new President and CEO, effective January 2025.

Financial highlights

• Year-to-date net sales were EUR 874.8 million, up 8.6% year-over-year.

• Year-to-date capital expenditure was EUR 260 million (EUR 101 million in Q3), mainly for the Romanian factory.

• Cash flow from operating activities was EUR -92.2 million in Q3 and EUR -237.4 million for 1-9/2024.

• Return on capital employed (12-month rolling) was 4.2%.

• Equity ratio stood at 49.6%, gearing at 64%, and interest-bearing net debt peaked at EUR 801.3 million.

Outlook and guidance

• Guidance for 2024 remains unchanged: significant growth in net sales (comparable currencies) and segment operating profit expected versus last year.

• Net debt is expected to decline and cash flow to turn positive from 2024 onwards as the investment phase ends.

• Q4 passenger car tire margins expected to remain strong, supported by favorable mix, though raw material costs may have a slight impact.