Q3 2024 Nokian Tyres plc Earnings Call Transcript
Key Points
- Nokian Tyres PLC (NKRKF) reported a 14% increase in net sales in Q3, reaching EUR 314 million, driven by improved passenger car tire availability.
- Segment operating profit improved significantly to EUR 30.4 million, with a margin of 9.7%, up from 6.1% the previous year.
- The Romanian factory is progressing on schedule, with the first tire manufactured in July and a grand opening in September.
- The company secured a EUR 150 million loan from the European Investment Bank to finance the Romanian factory.
- Nokian Tyres PLC (NKRKF) expects net debt to decrease and cash flow to turn positive from 2024 onwards as the investment phase concludes.
- The overall car and tire market remains weak, making it difficult to predict future market and consumer behavior.
- The company faced a EUR 11 million inventory write-down due to contract manufacturing delays, impacting profitability.
- Net debt reached EUR 800 million, the highest level expected, indicating significant financial leverage.
- The heavy tire segment experienced a decrease in net sales, primarily due to a weak OEM market.
- Inflation and a weak business-to-business market negatively impacted the Vianor segment's operating profit.
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Good afternoon from [Helsinki] and welcome to Nokia & Tyres third quarter results conference call. My name is Paivi Antola. And together with me, I have in the call, the President and CEO, Jukka Moisio and Niko Haavisto, the CFO. And as usual, we have some prepared notes and then after that, we'll have a Q&A. So Jukka, please go ahead.
Thank you, Paivi. And welcome on my behalf and indeed, we have some prepared notes, and we have a presentation at the Page 1 heading, this mortgage against driving sales growth in a weak market and Romanian factory progressing on schedule and I move to Page 2.
You just then Q3 net sales and segment operating profit increased. That's the heading. So our net sales were EUR314 million which is about 14% higher in comparable currencies. We had market share gains which were driven by the improved passenger car tire availability.
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