Nokian lowers 2023 guidance after third-quarter reverses

Nokia, Finland - Nokian Tyres plc has lowered its financial outlook for 2023, on the back of a weak set of preliminary results for the third quarter.

The Finnish tire maker now expects full-year sales to come in at between €1.15 billion and €1.2 billion, compared to an earlier estimate of between €1.3-1.5 billion.

Meanwhile, 'segments operating profit' as a percentage of net sales is expected to be around 5.5% and 6.0%, against previous forecast of 6.0% to 8.0%, Nokian said 24 Oct.

Based on preliminary, unaudited third quarter results, Nokian's sales for the three months to end of September fell 38% year-on-year to €275 million.

'Segments operating profit' more than halved to €19.5 million, from €55 million reported the year before, while and segments earnings (EBITDA) stood at €46 million.

During the third quarter, Nokian noted the car and tire market environment “continued to be demanding”, and inventories in the distribution sector were at “a high level”.

Sales were, therefore, negatively affected by “customers’ focus on inventory management” and “low consumer confidence”.

In addition, currencies also impacted overall sales, Nokian added.

“Despite these short-term uncertainties, margins have remained on a good level,” said Jukka Moisio, president and CEO.

Based on customer-feedback, added Moisio, Nokian estimates to have “maintained or further improved our market-share in premium winter tires.”

Nokian also expects strong cash-generation in the final quarter of the year, which it says is the “the most important season” for the tire maker.