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Growing together with our customers

Last year was one of financial success, positive news and developments. We achieved strong performance across all of our main markets, successfully launched new products, implemented price increases in different market areas, and increased production volumes. Our achievements in 2017 were the result of our employees’ determined efforts, and commitment to working together, achieving our goals with Hakkapeliitta Spirit.

Nokian Tyres is a valued company, and our work on sustainability, along with our updates of the organizational structure, strategy, and brand, create added value for our shareholders and other stakeholders.

The changes that we are implementing with our committed personnel lay a strong foundation for our future success. Our strong expertise, desire to develop our company, new opportunities, and growth targets push us to improve our results in the future.

I would like to thank our customers, personnel, and other stakeholders for the year 2017.

READ FULL LETTER FROM CEO (PDF)

Our strong expertise, desire to develop our company, new opportunities, and growth targets push us to improve our results in the future.

Hille Korhonen

Hille Korhonen

Hille Korhonen started as the President & CEO of Nokian Tyres in June 2017. She is, first and foremost, a progressive leader who listens to the personnel and encourages them to take on new challenges that further improve their competence. Under her guidance, the company has quickly renewed its leadership and operating model as well as implemented a brand redesign that will raise the company’s awareness and support its growth especially outside the regions prone to snow. Together with the Nokian Tyres personnel, Hille wishes to create an even stronger global team that firmly commits to common goals.

BOARD OF DIRECTORS AND MANAGEMENT TEAM (PDF)

Peace of mind from the world’s northernmost tyre manufacturer

As an expert in demanding conditions, we have spent decades promoting and facilitating safe driving in winter storms and summer rains alike. Today, our unique expertise can be felt in people’s everyday lives as the safest, highest-quality products as well as services that offer comprehensive peace of mind.

We develop high-quality innovative tyres for passenger cars, trucks, and heavy machinery, while aiming for sustainable safety and eco-friendliness throughout the product life cycle. In addition to sustainable product development and products, we care for the environment, people, and the high quality of our operations. Sustainability is an essential part of our business.

Nokian Hakkapeliitta has been the leading winter tyre brand for over 80 years. Our position as the market and price leader in the Nordic countries and Russia is established by our key competitive advantages: a quality image based on state-of-the-art technology, safety, and genuine user experience, a strong distribution network, expertise in logistics, and innovative personnel. Central Europe and North America are also important markets for us in terms of profitable growth.

Vianor, which is a part of our group, is a chain of service centers focusing on motoring and tyre services; its mission is to maintain Nokian Tyres’ market share and to support its brand in the Nordic countries. Our own factories are located in Finland and Russia. The new factory under construction in the United States will be completed in 2020. Between 2007 and 2017, we have invested more than EUR 1 billion in our factories, and the facilities represent the absolute best in the industry in terms of productivity and quality.

In 2017, our net sales were approximately EUR 1.6 billion, and we employed approximately 4,600 people at the end of the year. Nokian Tyres’ stock is listed on Nasdaq Helsinki.

Highlights of the year

243 OUR TEAM GREW BY 243 PROFESSIONALS NET SALES GREW BY 13% 346 NEW VIANOR, NAD, AND N-TYRE STORES 36% WE AIMED FOR A 20% DECREASE IN CO2 EMISSIONS FROM OUR FACTORIES’ PRODUCTION BETWEEN 2013 AND 2020, BUT THE ACTUAL REDUCTION BY THE END OF 2017 WAS AN ASTONISHING 36% THE AVERAGE 7% REDUCTION OF THE ROLLING RESISTANCE OF OUR TYRES SOLD IN 2017 WILL REDUCE CO2 EMISSIONS EACH YEAR BY AS MUCH AS 54,000 PASSENGER CARS CREATE ANNUALLY
THE LEADING SCIENCE MAGAZINE POPULAR SCIENCE HONORED THE NOKIAN HAKKAPELIITTA 9 WITH THE BEST OF WHAT’S NEW AWARD
NEW FACTORY WE STARTED THE CONSTRUCTION OF A NEW FACTORY IN THE UNITED STATES CUSTOMER SATISFACTION WAS UP BY 2.6%
NOKIAN HEAVY TYRES REPORTED THAT IT IS INCREASING PRODUCTION CAPACITY BY 50% THE MOST SUSTAINABLE TYRE MANUFACTURER IN THE DJSI WORLD INDEX

Strategy guides our choices

Nokian Tyres is a life driven company. Our mission is to give you peace of mind in all conditions.

OUR DIFFERENTIATORS

  • Safest tyres for all conditions
  • Consumer-trusted premium brand
  • Preferred partner for customers
  • Forerunner in selected specialty tyre products
  • Responsive and efficient supply chain
  • High-performing engaged team

OUR AMBITION

  • We are the market leader in selected segments in the Nordic countries and Russia
  • We increase our sales by 50% in Central Europe in five years
  • We double our sales in North America in five years
  • Our tyres are available in all major winter tyre markets
  • We increase the EBITDA of equity-owned Vianor to +3% by the end of 2019
  • We increase the sales of Heavy Tyres by 50% in four years

FINANCIAL GOALS 2016–2018*

  • GROWING FASTER THAN THE MARKET: AVERAGE ANNUAL SALES GROWTH of 4–5% at a minimum
  • HEALTHY PROFITABILITY: The best OPERATING PROFIT LEVEL IN THE INDUSTRY, A MINIMUM OF 22%
  • GOOD RETURNS FOR OUR SHAREHOLDERS: DIVIDEND OF AT LEAST 50% OF NET EARNINGS

*at stable currency exchange rates

Our strategic
focus areas for
2017–2022

Our goal is to be the market leader in the Nordic countries and Russia and to maintain profitable growth in our other main markets: over a five-year period, we will grow our sales by 50% in Central Europe and double our sales in North America. Over the long term, we want to be a significant player on all other winter tyre markets as well. In order to reach our goals, we are concentrating on the following focus areas.

We are investing in North America

  • We will be starting production at our factory in Dayton, TN in 2020.
  • We will be increasing brand awareness and improving the availability of our tyres.

We are investing in new product lines in order to support profitable growth in North America and Central Europe

  • We are continuing our investments in product development and testing by building a new testing and technology center in Spain.
  • We are developing next-generation summer tyres and All-Season tyres.

We support our customers’ business and develop new business models

  • We will introduce advanced B2B and B2C solutions that make it easier to conduct business with us.
  • We will develop the Vianor and NAD concepts further and expand them into new markets.
  • As digitalization revolutionizes mobility, we will build cooperation with car manufacturers and resellers as well as technology companies.

We will make Vianor’s business profitable

  • We will increase the EBITDA of equity-owned Vianor to +3% by the end of 2019.

We will grow the Nokian Heavy Tyres unit’s business in a profitable manner

  • We will increase the sales of heavy tyres by 50% within four years.
  • We will increase the production capacity in order to support our customers’ growth goals and to meet the growing demand.

We will create a unified team with a shared vision

  • With our new leadership and operating model, we are reinforcing an international common way of working based on best practices and supporting competence development.
  • We retain our ability to make quick decisions and remain agile, innovative, and close to the customer.

Close to the customer

I did not expect to find a company with such similar values behind my tyre choice. I have been delighted by the inspiring and friendly Nokian Tyres people"

Love at first mile

– Jon swears by Nokian Tyres

Jonathan Garland is a driver who steers clear of the beaten path. Whenever the opportunity arises, Jon from Madison, Wisconsin packs his family in the car and heads toward adventure. Nokian Tyres' All-Weather tyres always take the family man wherever he wants, regardless of the weather or route selection.

Read more (PDF)

"Navigate North” speeds up tyre sales in Central Europe

Seven days, 7,000 kilometers, heading north – the super-popular Navigate North car orienteering competition, sponsored since 2015 by Nokian Tyres and De Klok, its importer in the Benelux countries, promotes safe winter driving and tyre sales in Central Europe. Each team is equipped with the world’s best winter tyres as they head for the northernmost parts of Europe.

Read more (PDF)

Sustainable tyre sales and caring for your vehicle

Vianor is a chain of service centers specializing in car maintenance and tyre services. The service centers and online stores serve both consumers and corporate customers. After years of rapid growth, Vianor is now focusing on developing quality instead of quantity.

Read more (PDF)

Working responsibly

The best parts of my work are the participatory culture and professional colleagues: together, we feel inspired to develop ourselves and the company, and to advance toward new successes. The significance of our work is also important; after all, we are a life-driven, sustainable company. Maxim Pimenov, Quality and Tyre Technology Expert

Strong values guide our activities

We at Nokian Tyres are joined together by a belief in working with others and an ability to create new things and develop our activities. We trust in discovering things together and rolling up our sleeves to get the job done. We take care of each other, the environment, and safe mobility under all conditions. We call our unique company culture the Hakkapeliitta Spirit.

In 2018, we will be starting value discussions with our personnel with the aim of creating an even more harmonized company culture and ensuring closer international cooperation.

Read more (PDF)

Improvements in all areas of sustainability

Sustainability is a natural part of our business: sustainable product development, safe and eco-friendly products, and high standards of quality in what we do. We have worked in the long term for corporate sustainability in order to improve our company’s operations and the entire tyre industry. Our work was verified in 2017 when Nokian Tyres was selected for the Dow Jones Sustainability World index (DJSI).

Read more (PDF)

Success and new development needs

For each area of corporate sustainability, we have set goals that provide clear guidelines for our operations. In 2017, we also planned a new road map that provides more detailed guidance for our work on corporate sustainability. We completed the projects of our previous road map successfully in 2017. We have set our sustainability goals and road map goals for 2020.

Read more (PDF)

Sustainable Tyre Development

Careful laboratory testing, solid expertise in chemistry, and an open mind to new compounds – we ensure the technical quality of our premium tyres by testing and studying each raw material used in tyre production and by continuously improving our rubber compounds. Development Manager Harri Myllymaa and Material Manager Anne Ojala boldly use their experience and inventiveness in the development of our safe and eco-friendly tyres.

Read more (PDF)

A MOTIVATED TEAM ACHIEVES TOP RESULTS

Our open and participatory company and leadership culture ensure that our working environment remains inspiring. Together, we are developing a results-driven working community where engaged employees are committed to their work as well as to building the success of our company. The purpose of goal-oriented HR management is to ensure the competence, well-being, and equal treatment of our committed, motivated, and professional personnel.

Read more (PDF)

WORLD ON WHEELS

New products

The Nokian Hakkapeliitta 9 and Hakkapeliitta 9 SUV winter tyres are the latest additions to the Nokian Hakkapeliitta product family, which is already over 80 years old. The innovative winter tyre was developed for the varying Northern winter conditions and it is the first tyre in the world to feature patented double stud technology.

Read more (PDF)

Northern know-how for the global market

Relentless product development and the world’s best testing expertise are the basis of our innovations. This results in solutions that promote safety, driving comfort, and eco-friendliness around the world.

Read more (PDF)

Car Tyres: Stable path to growth

Nokian Tyres’ Passenger Car Tyres unit develops and manufactures high-quality summer and winter tyres for passenger cars, vans, and SUVs. In 2017, the unit’s business grew strongly across all the main markets. Russia was the biggest contributor to growth.

Read more (PDF)

Nokian Heavy Tyres STRENGTHENED ITS POSITION

Nokian Heavy Tyres develops and manufactures special tyres for the heavy industry. In 2017, the business unit improved sales and profit with support from new product innovations and positive market development.

Read more (PDF)

Sustainable investments

Nokian Tyres’ ability to generate value for shareholders and other stakeholders is based on profitable growth and a strong position within the selected business areas. Our strengths include innovative, pioneering products, a trusted brand, lasting customer relationships, and the most efficient and flexible production facilities in the industry. Healthy profitability and faster-than-market growth are made possible by our competent and motivated personnel and satisfied customers.

DISTRIBUTED RISK
The different business functions in various markets balance the geographical risk and the seasonal nature of the passenger car tyre business.

STRONG MARKET POSITION
We are a strong player in selected markets. In the long term, we want to be a significant actor on all winter tyre markets.

TARGETED GROWTH PROJECTS
We are aiming to grow faster than the market with strategically selected projects. We have continued to improve our competitiveness by increasing our global delivery capacity, expanding our product offering, and developing the customer focus of our activities and services.

TRENDS SUPPORTING GROWTH
Digitalization, changes in mobility, and increased attention to safety increase the demand for responsible actors such as Nokian Tyres and enable new types of business models.

SUSTAINABLE AND FINANCIALLY STRONG
Our good business results and solid financial foundation provide us with excellent opportunities for developing sustainable business, implementing selected growth projects and paying good dividends. We continue to work systematically toward top results.

Read more (PDF)

FINANCIAL GOALS for 2016–2018*

AVERAGE ANNUAL SALES GROWTH OF A MINIMUM OF 4–5%

22 % AT A MINIMUM, BEST OPERATING PROFIT LEVEL IN THE INDUSTRY

50 % MINIMUM DIVIDEND

*at stable currency exchange rates

Key figures 2017

EUR million 2017 2016 change%
Net sales 1 572.5 1 391.2 13.0
Operating profit 365.4 310.5 17.7
% of net sales 23.2 22.3
Profit before tax 332.4 298.7 11.3
% of net sales 21.1 21.5
Return on capital employed (ROI), % 22.4 19.9
Return on equity (ROE), % 15.1 18.7
Interest bearing net debt -208.3 -287.4 27.5
% of net sales -13.2 -20.7
Gross investments 134.9 105.6 27.8
% of net sales 8.6 7.6
Net cash flow from operating activities 234.1 364.4 -35.6
Earnings per share (EPS), EUR 1.63 1.87 -13.0
Cash flow per share (CFPS), EUR 1.72 2.70 -36.3
Shareholders equity per share, EUR 10.74 10.75 -0.1
Equity ratio, % 78.2 73.8
Personnel, average during the year 4 630 4 433

Key figures

Net sales, operating profit ja operating profit%

NokianRenkaat-Graafi-al-0-190218-EN04008001,2001,6002,000171615141301020304050Net salesOperatingprofitOperatingprofit%EUR millionOperating profit%
20132014201520162017
Net sales1 521.01 389.11 360.11 391.21 572.5
Operating profit385.5308.7296.0310.5365.4
Operating profit%25.322.221.822.323.2

Profit before tax

NokianRenkaat-Graafi-al-2-190218-EN01002003004001716151413EUR million
20132014201520162017
EUR million312.8261.2274.2298.7332.4

Earnings per share

NokianRenkaat-Graafi-al-3-190218-EN0.00.51.01.52.02.53.01716151413EUR
20132014201520162017
EUR1.391.561.801.871.63

Equity ratio

NokianRenkaat-Graafi-al-9-190218-EN0204060801716151413%
20132014201520162017
%67.667.570.873.878.2

Net sales by market area, %

NokianRenkaat-Graafi-Liikevaihtoliiketoimintayksikoittain-140318_11.3.4.2.
2017
1. Nordic countries40 %
2. Other Europe28 %
3. Russia and the CIS countries21 %
4. North America11 %

Net sales by business unit, %

NokianRenkaat-Graafi-Liikevaihtoliiketoimintayksikoittain-140318_11.3.2.
20162017
1. Passenger Car Tyres67 %69 %
2. Heavy Tyres10 %10 %
3. Vianor23 %21 %

Gross investments

NokianRenkaat-Graafi-al-6-190218-EN0501001502002501716151413EUR million
20132014201520162017
EUR million125.680.6101.7105.6134.9

Gearing

NokianRenkaat-Graafi-Gearing-190218-EN-20-10010201716151413%
20132014201520162017
%–4.1–13.6–16.9–19.7-14.2

Personnel, average

NokianRenkaat-Graafi-TP-hlo-190218-EN01,0002,0003,0004,0005,0001716151413Persons
20132014201520162017
Persons4 1944 2724 4214 4334 630