Nokian Finds 2022 Bright Spot in North American Growth

Feb. 8, 2023

Despite lower tire volumes due to the company’s exit from Russia, Nokian Tyres plc recorded a 3.6% increase in net sales in 2022. The tiremaker reported an operating loss of 116.2 million euros for the year.

The financial report comes as Nokian works to adapt its global supply chain since the exit from Russia, home of its dominant passenger tire production facility. In 2021 that Russian plant produced 82% of the company’s passenger tires. In 2022, that production dropped to 64%.

2022 began with strong demand and new products, but by late February the war in Ukraine caused “significant uncertainty to the company’s operating environment.” The second half of the year the company worked “to build the new Nokian Tyres without Russia.” The company started collaborating with contract manufacturers, and also announced plans to build a passenger tire factory in Romania, moves CEO Jukka Moisio says “are extremely important in terms of additional capacity and our future growth.”

Construction of the new plant is set to begin early this year, with the first tires expected to be produced in the second half of 2024. Tire production for the market is to begin in 2025.

Tire imports from Russia to Europe and North America ended in July.

The company has a buyer for its operations in Russia, and says the sale is still in process.

Jukka Moisio, president and CEO, says, “The year 2022 was exceptional and full of major changes. I am proud of the Nokian Tyres team, who showed exceptional strength and resilience in the midst of the unprecedented events, responding to fast-changing situations while at the same time caring for customers and for each other.

“During the year, we started to build the new Nokian Tyres without Russia, increased production in Finland and in the U.S., and launched high performing new products in our core segments, making our product portfolio the strongest ever.”

He also pointed to the company’s growth in its heavy tyres business, which achieved record numbers in “net sales, profitability and productivity,” and said “in North America, we reached the highest ever sales volume of passenger car tires.”

Moisio says, “As we enter 2023, our focus will be on adding new capacity, retaining a competitive premium product portfolio and serving our customers. The first half of the year will be demanding as we are lacking supply, but we expect our volumes to start picking up again from the second half of 2023 onwards as we continue to progress our ongoing strategic projects. The year 2023 will be a new start for Nokian Tyres to 2 billion euros business long-term.”

Net sales in 2022 totaled 1.776 billion euros. Sales in the Americas totaled 314.6 million euros, up 37.5% from 228.9 million euros in 2021. The region represented 18% of Nokian’s total globally.

Passenger tires accounted for 69% of the global total, with the heavy tyres business representing 15%. Nokian says its passenger tire sales break down to 55% winter tires; 27% summer tires, and all-season tires accounted for 18% of the total.

Outside of the U.S., the company operates 1,008 retail stores, and that Vianor division accounted for the remainder of the company’s total sales.

Nokian says raw material costs in manufacturing increased 41% year over year. Additionally, Nokian says “logistics costs increased significantly due to extraordinary measures to secure tire supply and due to cost inflation.”