Nokian Tyres

Kim Gran - Toimitusjohtajan katsaus

Strong year of growth

Dear reader,

The year 2011 was very successful for Nokian Tyres for a number of reasons. Our growth strategy, combined with strong demand, led to good results. In terms of our key indicators, we broke our previous records in sales, production output and results.

The world economy was characterised by insecurity and serious problems as a result of the European financial crisis. These factors and exceptionally high raw material costs presented challenges, which we managed to turn into our favour. Fortunately, the GDP in the company’s core markets in Northern Europe and Russia continued to grow, and consumer confidence was at a good level. The car and tyre businesses were busy and grew throughout the year.

Our order book was strong and grew throughout the year. Our sales improved significantly in all our key markets and we won market shares especially in Russia and Central Europe. As expected, this development was strongest in Russia, which, boosted by the car business, represented approximately one-half of our growth. In addition to strong growth in our traditional core markets, we managed to improve our market position and profitability clearly in Central Europe, where our sales rose close to the Nordic and Russian levels. Our business now has three strong pillars, two of which, Russia and Central Europe, are providing strong growth.

The launching of a new winter tyre family scored magazine test victories in Central Europe, and the strong sales of Hakkapeliitta tyres in the home markets fuelled growth and improved the Average Selling Price. Improvements in the tyre range and the strong rise in raw material prices were successfully transferred to tyre prices. The biggest growth was reported in SUV tyres, which is also a product category with great potential for the future. 

Our operations are characterised by distinct summer and winter seasons in consumer sales. Increasing our sales and achieving a good return on capital require a well-managed and controlled distribution chain. The Vianor chain, which represents a significant and growing part of our consumer sales, spearheaded our growth and expanded through franchising and partnership agreements to comprise 910 outlets in 23 countries. During the last year, Vianor opened 139 new stores. Italy, Azerbaijan and Romania joined as new countries in the Vianor family.

Our production increased even faster than expected. Implementation of the new production lines in the Russian plant was brought forward. We adopted the use of a new generation of production technology which will significantly improve our productivity. Both of our plants were working at full capacity in late 2011, and we began the construction of a new, highly modern plant in Russia. The new plant will commence production in summer 2012 and secure the preconditions for growth during the coming years.

Major investments in the development of processes and supporting IT systems brought quick results and opened new opportunities for adding further efficiency and improving customer service.

As we move into 2012, our prospects for growth are good despite various uncertainty factors. Our finances are strong and the company is debt-free, which makes it possible to invest in growth. Our position is strong in our key markets and will strengthen further. Our product range is competitive, our productivity one of the best in the business, and our distribution network is expanding fast.

Kim Gran

Kim Gran