Nokian Tyres Plc

Vulcanized rubber is not directly suitable for tire manufacturing. Vulcanized rubber should first be processed into carbon in a pyrolysis process, from which it could then be further processed into suitable sized carbon black particles.

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Rikhard Wacker has written about Nokian Tyres. :slight_smile:

Subheadings:

  1. Targeting Central European Markets
  2. The war in Ukraine moved tire production from Russia to Romania
  3. The world’s first full-scale carbon dioxide-free tire factory
  4. Difficult recent years
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More details behind the link :blush:

"The focus is on the rapid ramp-up of the Romanian factory, improving productivity and cost-efficiency, and strengthening the Nokian Tyres brand and consumer-centricity to promote profitable growth.

Nokian Tyres has navigated through the challenging times of recent years, and now it’s time to focus on achieving profitable growth. Nokian Tyres’ new President and CEO, Paolo Pompei, has a clear vision for the short-term priorities that will enable this.

"In 2025, we will continue to focus on growth and planned expansion of production capacity. Growth will be supported by new, innovative products. By balancing growth and profitability, we will focus on making our production network even more productive and efficient. Additionally, we will increase Nokian Tyres’ brand awareness and sharpen our consumer-centricity to build long-term customer loyalty," says President and CEO Paolo Pompei.

"In passenger car tires, we aim for growth in Central and Southern Europe and North America. In the Nordics, we want to maintain our strong position. In the Heavy Tyres business, we also have opportunities to grow through new products and customer relationships. Vianor supports our sales and premium brand position in the Nordics," Pompei continues.

After his first 70 days as President and CEO of Nokian Tyres, Paolo Pompei will host a Q&A webcast today at 2:00 p.m. The details of the call can be found at the end of this release."

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Here are Rauli’s comments from the Q&A. :slight_smile:

Nokian Tyres held a Q&A call yesterday with Paolo Pompei, who started as the company’s CEO at the beginning of the year. In our opinion, the call did not offer any significant new information about the company’s situation. We will go through what we consider the essential takeaways from the call.

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“Nokian Tyres published updated long-term financial targets for the next five years in April 2023”

The next 5 years are 2024 - 2028, meaning the target is in 2028.

Directly from the CMD 2023 presentation: “WE HAVE UPDATED FINANCIAL TARGETS FOR THE NEXT 5 YEARS”

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Paolo explained it that way too, but in fact, those years are/were indeed 2023-2027, although the release spoke of “long-term” goals without a specific year. However, from the slide below (which was presented in April 2023), it can be seen that the 2 billion revenue target and 15% EBIT target are actually for the years 2026-27. An understanding reader can, of course, interpret that to mean by the end of 2027, i.e., at an annual level of 2028, which Moisio referred to at least at last year’s AGM. Well, now the targets are in any case rather for 2028, which perhaps sounded more realistic from the start, considering the ramp-up in Romania.

image

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In my opinion, the title and the image are contradictory.

Nokian Tyres also organized a separate event today for domestic analysts with Paolo and the company’s CFO Niko. The themes were naturally the same as in the call earlier this week. Perhaps I want to specifically mention that Paolo emphasized that the financial targets are completely realistic and thus clearly not intended to be changed under the new CEO’s leadership. Instead, Paolo mentioned that growth from a revenue level of 2 billion upwards is then a degree more difficult and might require, for example, acquiring new brands or products also through M&A. From an investor’s perspective, even getting close to the current targets would naturally be very positive, so there will be time to return to potential subsequent steps later :slight_smile:

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Quote from Helsingin Sanomat,

HS 2.4.2023: Jukka Moisio: “The goal is for Nokian Tyres’ revenue to be approximately two billion euros in about five years.”

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Automotive Premium Tires

#Nokian renkaat

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THE LAUNCH OF NOKIAN TYRES SEASONPROOF 2

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Has there been any information in any Q&A or other contexts about when that EU €100M grant/support will be paid?

You probably mean Romanian state aid? No schedule has been presented, but I would guess that the support will be recorded for the last quarter. (So that the new CEO gets a feather in their cap)

Tyre manufacturer Nokian Tyres (Nokian Renkaat) announces that it is expanding its Nokia factory by building a warehouse for passenger car tyres.

The idea behind the project is to centralise warehouses located in different parts of Finland to Nokia, and the goal is to support competitiveness by developing the efficiency and operational reliability of the Nokia factory, the press release states.

According to the plan, raw materials and the storage of heavy tyres manufactured at the Nokia factory will also be transferred to the expanded logistics centre later.

SEB Leasing acts as the financier. Nokian Tyres will lease the property to be built and the warehouse automation for its use with a long-term lease agreement.

The new property is scheduled to be completed by the end of 2027 on a plot owned by Nokian Tyres, adjacent to the current logistics centre.

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It is indeed about support for Romania, and in August when it was confirmed, it was stated that it would be paid gradually during the years 25-27.

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Was this news about that building permit which was granted on December 18, 2024, or about something newer? @Rauli_Juva

”Tyre manufacturer Nokian Tyres has received a building permit for an expansion next to its current factory in Nokia.

Nokia’s Building and Environmental Board granted the permit on December 18, 2024.

Nokian Tyres can build an expansion of just under 4,000 square meters on the parking lot in front of the current factory.

The building permit, in part, gives the company the opportunity to develop the Nokia factory to achieve future growth targets. This is according to Manu Salmi, Director of Nokian Heavy Tyres and the Nokia factory, in an email.

According to Salmi, in the potential expansion part, the company can modernize and automate its production if necessary.”

I don’t know about the stages of the permit processes, but this is a different project. The building permit you mentioned concerned expansion construction on the factory site itself, whereas this logistics center expansion is on a different plot. So, many kinds of projects/plans are underway. This is naturally understandable, as Nokia is now (and in the foreseeable future) aiming for 5+ million tires in annual production, when before losing the Russian factory, it was roughly half of that. And capacity has also been increased over the years on the Heavy Tires side.

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This leasing option sounds like a sensible choice in this situation, now that there is a lot of debt and revenue is expected to rise to 2 billion.

After the lease period ends, NR can probably buy the property from SEB Leasing at residual value? The plot of land belongs to NR, doesn’t it?

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Yep. The factory is outlined in yellow at the bottom of the map, and the warehouse/logistics center is outlined in green at the top of the map.
In addition, Tyres has acquired more land areas (if I remember correctly, about 5 hectares) immediately to the left of the factory (red), for which plans are also likely underway.

IMG_4495

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