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1. Company Snapshot

1.a. Company Description

Nokian Renkaat Oyj develops and manufactures tires in Finland, Nordics, Russia, the rest of Europe, Asia, the Americas, and internationally.It operates through Passenger Car Tyres, Heavy Tyres, and Vianor segments.The Passenger Car Tyres segment develops and produces summer and winter tires for cars and vans.


The Heavy Tyres segment offers tires for forestry machinery; and special tires for agricultural machinery, tractors, and industrial machinery, as well as retreading materials and truck tires.The Vianor segment sells car and van tires, as well as truck tires under the Nokian brand, and other tire brands; and other automotive products and services.The company offers its products through its own Vianor service centers and service centers run by partners, the Nokian Tyres Authorized Dealer (NAD) partners, the N-Tyre retailers, and other tire and vehicle retailers, as well as online stores.


As of December 31, 2021, it operated 1,047 Vianor service centers; 2,282 NAD stores; and 110 N-Tyre stores.Nokian Renkaat Oyj was founded in 1898 and is headquartered in Nokia, Finland.

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1.b. Last Insights on TYRES

Nokian Renkaat Oyj faced challenges from intense competition and subdued demand in the tire market. Despite a sponsorship deal with the IIHF Ice Hockey World Championships, the company's short-term prospects are clouded by weak sales trends. With no recent earnings release to provide clarity, investors are cautious. Analysts at Refinitiv have a hold rating on the stock. The company's ability to navigate market headwinds and execute on its strategy will be closely watched. A potential rebound hinges on improved market conditions and effective management.

1.c. Company Highlights

2. Nokian Tyres' Q3 2025 Earnings: A Stronger Operating Profit

Nokian Tyres reported a significant improvement in operating profit in Q3 2025, driven by announced pricing in passenger car tires and ongoing efforts to strengthen financial performance. The company's net sales grew by 9.4% year-to-date, with a 10.8% increase in comparable currency in Q3. The operating profit improved significantly, with a 427% increase, mainly driven by improved pricing in passenger car tires. The EBITDA increased to EUR 65.4 million, and the segment operating profit grew by 6% to EUR 32.4 million. However, the EPS was disappointing at '0.00432' relative to estimates at '0.08667'.

Publication Date: Oct -29

📋 Highlights
  • Operating Profit Surge: Operating profit increased by 427% driven by pricing improvements in passenger car tires.
  • Passenger Car Sales Growth: Segment net sales rose 13.2% to EUR 234M, with a 16.6% operating margin (EUR 38.9M profit).
  • EBITDA Expansion: EBITDA reached EUR 65.4M, reflecting improved pricing and operational efficiencies.
  • Production Ramp-Up: Romania’s 24/7 operations and capacity additions contributed to 6M tires production by 2026.
  • Margin Stability: Q3 margin improvements sustained, with Q4 expected to benefit from winter tire sales and inventory reduction.

Segment Performance

The Passenger Car Tyres segment reported EUR 234 million in net sales, a 13.2% increase in comparable currencies. The segment operating profit was EUR 38.9 million, or 16.6% of net sales. The price/mix contribution was a significant positive factor, with EUR 35 million of improvement. Heavy Tyres reported a decline in volumes, affecting net sales and profitability. Vianor reported improved sales and operating profit, with a 7% increase in net sales in comparable currencies.

Guidance and Outlook

Nokian Tyres' guidance for 2025 remains the same, expecting to grow the segment operating profit as a percentage of net sales. The company is assuming a stable market and is observing the global economy and geopolitical situation, which may create uncertainty and volatility. As Paolo Pompei stated, "We're not expecting the price increases to affect volume at this stage." Analysts estimate next year's revenue growth at 10.6%.

Valuation

The current valuation metrics suggest that Nokian Tyres is trading at a P/E Ratio of -35.59, P/B Ratio of 1.11, and P/S Ratio of 0.93. The EV/EBITDA is 8.67, and the Dividend Yield is 4.96%. The negative P/E Ratio is due to the company's negative earnings. The relatively low P/B Ratio and P/S Ratio indicate that the stock may be undervalued. However, the negative ROIC and ROE raise concerns about the company's profitability.

Investment Implications

The significant improvement in operating profit and the growth in net sales are positive signs for Nokian Tyres. However, the decline in EPS and the negative valuation metrics raise concerns. Investors should closely monitor the company's progress in improving its profitability and adjusting to the changing market conditions. The expected revenue growth of 10.6% next year is a positive indicator, but investors should be cautious about the potential risks and uncertainties in the global economy and geopolitical situation.

3. NewsRoom

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Kimi Räikkönen joins Nokian Tyres' team as Brand Ambassador

Dec -02

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Nokian Tyres to cut nearly 700 roles in Finland

Nov -25

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Nokian Tyres (HLSE:TYRES): Is the Current Valuation Justified After Recent Share Price Swings?

Oct -11

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Nokian Tyres signs as Official Sponsor for the 2026 and 2027 IIHF Ice Hockey World Championships

Oct -07

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Changes in Nokian Tyres Management Team

Jul -18

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Nokian Tyres plc Half Year Financial Report January-June 2025: Strong operating profit improvement in the second quarter. Actions ongoing to further strengthen financial performance

Jul -18

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Nokian Tyres PLC (NKRKF) Q1 2025 Earnings Call Highlights: Strong Sales Growth Amid ...

May -07

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Nokian Tyres PLC (NKRKF) Q4 2024 Earnings Call Highlights: Strong Growth in Central Europe and ...

Feb -05

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.39%)

6. Segments

Passenger Car Tyres

Expected Growth: 10%

Nokian Renkaat Oyj's 10% growth in Passenger Car Tyres is driven by increasing demand for winter tyres in Nordic countries, expansion into emerging markets, and a shift towards premium tyres with advanced safety features. Additionally, the company's focus on sustainability and eco-friendly products resonates with environmentally conscious consumers, contributing to the segment's growth.

Vianor

Expected Growth: 12%

Vianor's 12% growth is driven by increasing demand for premium tires, expansion into new markets, and strategic partnerships. Additionally, Nokian Renkaat Oyj's focus on sustainable and eco-friendly products resonates with environmentally conscious consumers, contributing to the segment's growth.

Heavy Tyres

Expected Growth: 9%

Nokian Renkaat Oyj's heavy tyres segment growth is driven by increasing demand for heavy-duty vehicles, infrastructure development, and rising construction activities. Additionally, the company's focus on sustainable and eco-friendly products, as well as its strong distribution network, contribute to its 9% growth.

Other Operations and Eliminations

Expected Growth: 8%

Nokian Renkaat Oyj's 8% growth in Other Operations and Eliminations is driven by increased demand for winter tires, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, cost savings initiatives, and favorable currency exchange rates have contributed to this growth.

7. Detailed Products

Nokian Hakkapeliitta

Winter tires designed for extreme weather conditions, providing excellent grip and control on snow and ice

Nokian zLINE

High-performance summer tires, offering exceptional handling and braking on dry roads

Nokian WR

All-season tires, combining the benefits of summer and winter tires, suitable for mild winter conditions

Nokian Rotiiva

All-terrain tires, designed for off-road and on-road driving, providing durability and traction in various conditions

Nokian Nordman

Studded winter tires, engineered for extreme winter conditions, providing maximum grip and control on ice and snow

8. Nokian Renkaat Oyj's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Nokian Renkaat Oyj is medium due to the presence of alternative tire manufacturers in the market.

Bargaining Power Of Customers

The bargaining power of customers for Nokian Renkaat Oyj is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Nokian Renkaat Oyj is medium due to the company's dependence on a few key suppliers for raw materials.

Threat Of New Entrants

The threat of new entrants for Nokian Renkaat Oyj is low due to the high barriers to entry in the tire manufacturing industry.

Intensity Of Rivalry

The intensity of rivalry for Nokian Renkaat Oyj is high due to the presence of several established competitors in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 28.87%
Debt Cost 3.95%
Equity Weight 71.13%
Equity Cost 8.32%
WACC 7.06%
Leverage 40.58%

11. Quality Control: Nokian Renkaat Oyj passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Kendrion

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Growth: 1.6

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Inter Cars

A-Score: 5.0/10

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Quality: 3.8

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Quality: 5.8

Yield: 0.6

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Nokian Renkaat

A-Score: 4.4/10

Value: 8.1

Growth: 1.0

Quality: 2.6

Yield: 8.1

Momentum: 3.0

Volatility: 3.7

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A-Score: 4.0/10

Value: 5.9

Growth: 4.0

Quality: 2.2

Yield: 1.2

Momentum: 6.0

Volatility: 4.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.8$

Current Price

8.8$

Potential

-0.00%

Expected Cash-Flows