A N N U A L
R E P O R T
2 0 2 3
T H I S C O M PA N Y I S L I K E I T S P R O D U C T ; I T R E F L E C T S
T H E PA S S I O N A N D R E S I L I E N C E O F O U R P E O P L E .
We are made for demanding conditions.
W E A R E N O K I A N T Y R E S A N D H E R E T O M A K E
T H E W O R L D S A F E R B Y R E I N V E N T I N G T I R E S , A N D
H O W T H E Y A R E M A D E , O V E R A N D O V E R A G A I N .
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Financial Statements
Consolidated financial statements
Parent company financial statements
Signatures of the Board of Directors and the auditor’s note
Auditor’s report
ESEF assurance report
Information on Nokian Tyres’ share
Nokian Tyres group structure
Corporate Governance Statement
Non-Financial Information Statement
Remuneration Report
Investor Information and Investor Relations
4
16
36
37
87
98
99
103
104
105
106
122
140
149
In addition to this Annual Report, Nokian Tyres will publish its 2023
Sustainability Report at the end of March 2024.
W H E N C H A N G E I S
T H E C O N T E X T, A G I L I T Y
B E C O M E S A S U P E R P O W E R .
Joh anna Hors ma ,
Chief Trans form at ion Officer
S T R AT E GY
R E V I E W
M A D E FO R D E M A N D I N G C O N D I T I O N S
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This is
Nokian Tyres
Net sales from external customers by business unit, %
Net sales by geographical area, %
Passenger Car Tyres 52% (67)
Heavy Tyres 19% (13)
Vianor 29% (20)
Nordic countries 57% (54)
Other Europe 19% (22)
Americas 23% (23)
Other countries 1% (1)
Nokian Tyres develops and manufactures premium tires
for people who value safety, sustainability, and predictability.
Driven by our Nordic heritage, the company manufactures
innovative products for passenger cars, trucks, and heavy
machinery, providing peace of mind for all conditions.
Our Vianor chain specializes in tire and car services.
•
•
•
•
•
Nokian Tyres serves its customers in its core markets: the
Nordic countries, North America, and Central Europe.
In 2023, Nokian Tyres products were sold in 55 countries.
Nokian Tyres manufactures its tires in two factories, located
in Finland and the US. A new factory is under construction
in Romania. Contract manufacturing complements own
production.
Nokian Tyres’ test centers are in Nokia and Ivalo, Finland, and
in Santa Cruz de la Zarza, Spain.
The company’s headquarters is in Nokia, Finland, and its
shares are listed on Nasdaq Helsinki.
N O K I A N T Y R E S
N E T S A L E S I N 2 0 2 3
1.2
E U R B I L L I O N
Employees by geographical area, %
Nordics 78% (80)
Other Europe 6% (6)
North America 16% (14)
Net sales and Segments operating profit
EUR million
2,000
1,500
1,000
500
0
1,585.4
1,714.1
1,313.8
1,350.5
1,173.6
337.2
190.2
324.8
17.8
65.1
2019
2020
2021
2022
2023
Net sales
Segments operating profit
Segments operating profit, %
Figures for 2021 and earlier years have not been
restated and include Russia.
%
40
30
20
10
0
Highlights
in 2023
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Emission reduction target reached
In 2023, Nokian Tyres reached a key science-based emissions
reduction target seven years ahead of schedule.
The target was
to decrease
the tire
factories’ CO2
emissions
intensity by
52%
Direct CO2 emissions from the tire factories
(Scope 1 and 2), kg/production ton
710
800
600
400
200
0
341
158
2015
2023
Target
2030
Key Flag symbol for Nokian Heavy Tyres
Nokian Heavy Tyres was awarded the Key Flag symbol for its
heavy-duty tires, wheels, and retreading materials as a recognition
of products manufactured in Finland, and the Design from Finland
mark for products designed in Finland.
The world’s first zero CO2 tire factory
Nokian Tyres broke ground for its new passenger car tire factory
in Oradea, Romania. The factory is the world’s first zero CO2
emission tire factory.
Dow Jones Sustainability Europe Index
Nokian Tyres was again included in the Dow Jones Sustainability
Europe Index. The selection was based on S&P Global’s Corporate
Sustainability Assessment 2023, in which Nokian Tyres scored 70
points out of 100.
New long-term financial targets
Nokian Tyres published its updated long-term financial targets
and confirmed its non-financial targets. The target is to reach
EUR 2 billion in net sales with strong profits.
Sale of the Russian operations
Nokian Tyres completed the sale of its Russian operations, after
which all Nokian Tyres operations in Russia ended.
Co-operation with
the Finnish Ski Association
Nokian Tyres started a partnership with the Finnish Ski Association,
becoming the main partner of Cross-Country Ski Team Finland and junior
Cross-Country Ski Team Finland for the seasons 2023–24 and 2024–25.
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A year of
transformation
2023 marked a new beginning for Nokian Tyres. We completed our
exit from Russia, announced new long-term financial targets, and
celebrated the start of construction work on the world’s first zero
CO2 emission tire factory in Romania. I am extremely proud of what
we have achieved and excited about the future.
Nokian Tyres’ operating environment has changed significantly
over the last two years. This has required agility to adapt and
challenged us to find new ways to develop our business. In 2023,
we continued to recover from the disruption that we faced in 2022.
We steadily improved our performance and volume delivery towards
the end of the year, which provides us with a solid foundation for
2024. I want to thank our employees for their excellent work as we
are together building the new Nokian Tyres, as well as our customers
for their trust.
In addition to changes in the operating environment, climate change,
evolving technologies, and the transformation of the automotive
industry keep us moving forward. Innovating for safer driving has
been a key contributor to Nokian Tyres’ success ever since we
invented the world’s first winter tire 90 years ago. And the same
principle still guides our work: We make the world safer by reinvent-
ing tires, and how they are made, over and over again. With this
relentless attitude and commitment to continuous improvement we
aim - in line with our new vision - to lead the world to drive smarter.
We firmly believe that our expertise in designing and manufacturing
premium products will be increasingly valued, and as a sustainable
tire company, our role will become even more significant.
O U R P U R P O S E
W E M A K E
T H E W O R L D S A F E R
B Y R E I N V E N T I N G
T I R E S , A N D H O W
T H E Y A R E M A D E ,
O V E R A N D O V E R
A G A I N .
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Accelerating growth
Made for demanding conditions
Nokian Tyres’ future direction is clear: We are returning to growth.
In line with our new long-term financial targets, we aim for EUR 2
billion net sales with strong profits. Building the new Nokian Tyres is
based on organic growth in the Nordic countries, North America, and
Central Europe. Expanding capacity, together with market relevant
high-quality products and enhancing commercial capabilities, boost
topline growth. Margin improvement is driven by increasing sales
volume and average sales price.
Creating a balanced manufacturing footprint
One of our key priorities is building the world’s first zero CO2 emission
tire factory in Romania. Construction is progressing as planned and
the first tires will be manufactured in the second half of 2024. We
have also increased capacity at our factories in Finland and the US,
and are supplementing our own production with carefully selected
contract manufacturing partners. Nokian Tyres’ manufacturing foot-
print will become even more diversified and balanced in the future.
Leading the industry towards net-zero
Sustainability continues to remain at the core of our operations. In
reducing greenhouse gas emissions from tire production, we are
a frontrunner in our industry. As an example, in 2023, we reached
one of our key science-based emissions reduction targets seven
years ahead of schedule. Other key sustainability initiatives include
advancing safety and well-being of our employees, protecting human
rights in the supply chain, and increasing the share of renewable and
recycled materials in tires.
Going into 2024, executing on our growth strategy and improving
our activities continues. Despite the current economic slowdown,
we expect passenger car tire sell-in to grow in 2024, and with our
increasing capacity and competitive product portfolio, we are ready
to seize this opportunity. In the Heavy Tyres business, the focus is
on expanding capacity and strengthening distribution. Widening
product portfolio and enhanced digital capabilities support growth in
the long-term. Vianor’s excellent distribution capabilities strengthen
our position in the Nordics.
Important milestones will be reached in 2024, when we celebrate the
90th anniversary of our innovation, the winter tire. Our new factory
in Romania will start production, the US investment phase will be
completed, and new innovative products will be launched. Our strong
balance sheet enables us to both invest in growth while continuing to
reward our shareholders.
I want to warmly thank our customers and shareholders for their
support, and above all, our employees for their commitment. Nokian
Tyres is made for demanding conditions, which is why I am confident
that we will emerge even stronger in 2024.
JUKKA MOISIO
PRESIDENT AND CEO
O U R V I S I O N
W E L E A D T H E W O R L D
T O D R I V E S M A R T E R .
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A market of
600 million tires
Nokian Tyres passenger car tires are mainly sold in the replacement
tire market, selling tires to consumers via dealers. According to
Global Data, the size of the replacement tire market for passenger
car tires, SUV tires, and pick-up truck tires in Nokian Tyres’ primary
markets in the Nordic countries, Central Europe, and North America
amounted to approximately 600 million tires. The U.S. Tire Manu-
facturers Association (USTMA) estimates that the North American
market covers nearly half of the total market.
According to Global Data, the demand for tires will grow mod-
erately in Nokian Tyres’ primary markets during 2024–2027. The
yearly growth rate is estimated to be approximately 2 percent in
the Nordic countries and North America and approximately
1 percent in Central Europe. The number of electric cars and
SUVs is growing constantly, further increasing the demand for
larger-size tires in all markets.
Nokian Tyres’ heavy tires are sold in both the original equipment
and replacement markets. Nokian Tyres estimates that the size of
the global market for heavy tires was slightly over USD 30 billion
in 2022. Smithers estimates that the market is expected to grow
5.5 percent per year until 2027. The growth rate is the highest,
over 6 percent per year, in the market for tires used in the mining
and construction industry and for harbor vehicles. The market
for tires used in heavy industry vehicles will grow approximately 5
percent per year, and the market for special tires for forestry and
agricultural machinery will grow approximately 4.5 percent.
M A D E F O R D E M A N D I N G C O N D I T I O N S :
J O H A N N A H O R S M A
Our industry is
in a state of flux;
the need for
renewal is here
to stay
Nokian Tyres’ products are made for demanding conditions. In
recent years, the conditions have also been demanding for the
company and its personnel. According to Nokian Tyres’ Chief
Transformation Officer Johanna Horsma, in the new operating
environment, growth and success still stem from the things
the company is already strong or the best at.
Johanna sees that Nokian Tyres is now in a good position: “We
quickly had clear plans in place after it was evident that the
operating conditions in Russia had became unsustainable. The
exit from Russia was a significant change that required plenty
of effort. We had no ready-made model for it, but we had to
come up with the means along the way. The entire team did a
tremendous job."
“The need for renewal has become permanent for all compa-
nies in the car and tire industry. To ensure efficient operations,
industrial companies are, due to global risks, considering the
relocation, capabilities, and processes of their factories.”
Cros s- cut t in g ch anges are a lways
cha ll enging. O ur advanta ge is t hat
in our indus tr y, we are a fa ir l y s ma ll ,
inter nat ional com pany focus ing on
niche s egm ent s and offer in g prem iu m
product s. We can ope rate quick l y
an d a gile ly w it h th e h elp of st rong
exper tis e, a good team ,
an d co-ope rat ion.
According to Johanna, Nokian Tyres’ strengths also include the
company’s size and low hierarchy. “Cross-cutting changes are
always challenging. Our advantage is that in our industry, we are a
fairly small, international company focusing on niche segments and
offering premium products. We can operate quickly and agilely with
the help of strong expertise, a good team, and co-operation.”
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Megatrends
are shaping the
tire industry
Long-term megatrends are shaping the car and tire industry.
Climate change mitigation, the evolving weather and driving
conditions, and new technologies guide tire design and increase
the demand for sustainable and innovative tires.
One of the primary industry-shaping trends is the increasing number
of new car models and the more common use of SUVs and crossover
models. With the electrification of driving, tires must not only be
more durable and have higher load capacity but also will be quieter
and have a lower rolling resistance.
Each tire type – summer tire, non-studded tire, studded tire, all-sea-
son tire, and all-weather tire – is designed to provide safe driving in
different conditions. Due to the changing weather conditions caused
by climate change, the demand for all-season and all-weather tires
is growing.
Nokian Tyres is responding to the change in the tire industry created
by the megatrends by investing and focusing on product develop-
ment.
1. Digitalization and connectivity
2. Electrification
The digital transformation of society is gaining speed, and
the number of digital innovations is also increasing in the tire
industry. Automation and robotics are changing design and
manufacturing. The use of data and connectivity create new
business models and redefine the value networks.
Most new cars will soon be EVs. Traditional car brands are
investing in EVs, and more brands are focusing solely on EVs.
The electrification of driving is also influencing tire design.
3. Autonomous vehicles
4. Environment
Many significant companies in the car industry are developing
smart autonomous vehicles for various uses. Self-driving cars
would be even more aware of their surroundings and could
optimize driving and route selection based on maximum
security.
Climate change, the green transition, regulation, and
standards encourage the development of environmentally
and climate-friendly production processes and tire tech-
nologies. Read more about these topics in Nokian Tyres’
Sustainability Report, published in late March 2024.
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Back to growth
In April 2023, Nokian Tyres set new long-term financial targets
and confirmed its non-financial targets. The long-term target
is to achieve net sales of EUR 2 billion through the two phases
of the strategy.
Financial targets
The target is to achieve net sales of EUR 2 billion, segments
operating profit at the level of 15 percent, and net debt/
segments EBITDA ratio of 1–2. In line with the dividend policy,
the target is to pay a dividend of at least 50 percent of the
company’s net earnings.
Non-financial targets
Nokian Tyres’ most important sustainability targets relate
to reducing CO2 emissions according to the company’s sci-
ence-based targets, increasing the share of renewable
and recycled raw materials in tires, improving occupational
safety and well-being, and developing the sustainability of
the supply chain.
•
•
•
•
•
2023–2025
I N V E S T M E N T P H A S E
Increasing capacity in the Finnish and the US factories
New factory in Romania
Utilizing contract manufacturing
2026–2027
G R O W T H P H A S E
Increasing market penetration built on:
•
•
•
New products
Increased production capacity
Enhanced operational capabilities
The target is
net sales of
E U R 2
B I L L I O N
PA S S E N G E R C A R T Y R E S
H E N K I L Ö A U T O N R E N K A AT
In the Nordic countries, the
target is to strengthen #1
position with the help of high-
quality products and good
availability as well as strong
distribution and customer loyalty.
•
In North America, the target
is to grow sales by about 100
percent. The growth is driven
by maintaining the position in
the snow-belt areas of North
America, growth in the all-season
segment, and increasing the
capability of the US factory in
manufacturing products for
North America.
In Central Europe, the target is
to secure the market position to
enable future growth with the
help of increasing capacity and
capability.
H E AV Y T Y R E S
R A S K A AT R E N K A AT
The target is to grow sales to EUR 400 million.
This is accomplished by strengthening the distribu-
tion in Central Europe and North America, increas-
ing capacity, expanding the product portfolio,
especially with forestry and agricultural machinery
tires and truck tires, and digital development.
V I A N O R
V I A N O R
The target is to support the market share in
the Nordic countries by maximizing the sales of
Nokian Tyres’ products through strong distribution
and excellent service and by delivering positive
results as a standalone unit.
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Building a flexible production
network through investments
In the passenger car tire business, the company’s
growth strategy is divided into two phases: the first
phase focuses on increasing new capacity and operational
capability. When the second phase starts in 2026,
the growth is expected to accelerate.
The main measures taken during the strategic invest-
ment phase are expanding the factories’ capacity in
Finland and the US, building a new factory in Romania,
and utilizing contract manufacturing. Together, these
actions will create a more balanced production network
closer to the markets. In 2027, own production capacity
will surpass 15 million tires. The output will vary depend-
ing on the size of the tires in production. Contract manu-
facturing will supplement the company’s own production
and help meet the demand for Nokian Tyres’ products.
Nokian Tyres is building the world’s first zero CO2
emission tire factory in Oradea, Romania. This means
that all the energy used at the factory comes from zero
CO2 sources and the steam used in the manufacturing
process is produced without fossil fuels. The location in
Romania supports this target, as the factory will use
the nearby zero CO2 energy production.
D AY T O N , U S
N O K I A , F I N L A N D
O R A D E A , R O M A N I A
•
•
•
•
Passenger car tires and pick-up truck
tires for the North American market.
Approximately 25 percent of total
passenger car tire production.*
Investments to increase the capacity
to be finalized in the first half of 2024.
Building a warehouse for approximately
600,000 tires near the factory.
•
•
•
•
Nordic summer tires, winter tires
and heavy tires for all Nokian Tyres
markets. A center for Research
and Development.
Approximately 35 percent of total
passenger car tire production.*
Investments in increasing the capacity
of passenger car tires were completed
in 2023.
Mapping of expansion possibilities
related to the land purchases made
in 2022 ongoing.
•
•
•
•
•
The factory is under construction,
and commercial production will
begin in 2025.
Value of total investment:
650 million euros.
Passenger car tires for Central Europe
based on the market requirements.
Approximately 40 percent of total
passenger car tire production.*
A distribution center for storing and
distributing tires will be built next to
the factory.
* In 2027, once the factory in Romania has reached its maximum capacity.
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Step by
step towards
the targets
Nokian Tyres started the year 2023 in an exceptional situation.
The war in Ukraine led to a controlled exit from Russia and the
selling of the company’s Russian operations in March 2023, after
which all Nokian Tyres’ operations in Russia ended.
During 2023, the company focused on building the new Nokian Tyres.
Since the Russian production facility used to be responsible for up to
80 percent of the company’s passenger car tire production capacity,
the new approach focuses on increasing the capacity of the existing
factories in Finland and the US, building a new passenger car tire
factory in Romania, and utilizing contract manufacturing.
Read more on page 12.
In April 2023, Nokian Tyres published its new long-term financial
targets for growth, profitability, and capital structure and confirmed
its previously published non-financial targets. Read more about
these targets on page 11.
One of the company’s science-based greenhouse gas emissions
reduction targets was to decrease the direct CO2 emissions of the
company’s tire factories by 52 percent per produced ton of tires by
2030, compared to the level in 2015. The target was achieved already
in 2023, seven years ahead of schedule. Although Nokian Tyres’
factory emissions per production ton are already the lowest in the
tire industry, the company will continue its work to reduce emissions
with the target of achieving net-zero emissions by 2050.
Strategic cornerstones
Safest tires for all conditions
We have the passion to develop products that enable safe
driving in demanding conditions.
Responsive and effective supply chain
We build a balanced global manufacturing network and
develop customer-driven ways to operate.
Consumer trusted premium brand
We lead the world to drive smarter. No matter where
the journey takes you, we are with you.
Leader in sustainability
We commit to maintaining our industry-leading position
in sustainability by challenging ourselves to do more
every day.
Nokian Tyres team
We are innovative, care about people and the globe,
and work seamlessly to succeed together. We are
inspired to make an impact.
O U R S U C C E S S
I S B U I LT O N
F I V E S T R AT E G I C
C O R N E R S T O N E S .
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Nokian Tyres joined the Polestar 0 project that aims to create a
climate-neutral car by 2030. The objective of the electric vehicle
manufacturer Polestar’s project is to eliminate all sources of CO2
emissions from the car’s production and end of life without offset-
ting them. Nokian Tyres contributes to the project by developing
climate-neutral premium tires.
Read more about Nokian Tyres’ non-financial targets on page 11
and about sustainability work in the Sustainability Report,
published at the end of March 2024.
Nokian Tyres developed the world’s first winter tire in 1934, and since
then, the company has created innovations for safe and sustainable
driving. Nokian Tyres has an excellent product portfolio and a strong
innovation pipeline. The company’s safe, sustainably produced, and
high-performance tires meet the changing needs of consumers.
Nokian Tyres continues to focus on niche segments with high
margins. Although the share of all-season tires will grow, winter tires
remain the company’s core business.
N O K I A N T Y R E S
D E V E L O P E D T H E
W O R L D ’ S F I R S T
W I N T E R T I R E
I N 1 9 3 4 .
M A D E F O R D E M A N D I N G C O N D I T I O N S :
G A B R I E L A P O N T O S
Recruiting for
Romania
The building of a tire factory in Romania and recruiting
some 550 hand-picked personnel for the factory is moving
forward. The production, which combines people and
automatic processes, will start in Oradea in 2024. Romania’s
HR Manager Gabriela Pontos has a crucial role in ensuring
the success of the operations as the recruitment process is
accelerating in Oradea and the surrounding Bihor County.
According to Gabriela, the new facility will stand out from
the competitors due to its ambitious sustainability targets.
The factory will be the world’s first zero CO2 emissions tire
factory. In addition, another critical reason is evident.
“When I talk to people who want to work at the factory here,
the instant answer is the Finnish culture,” states Gabriela. “It
doesn’t matter if the position is for a manager, specialist, or
engineer. Everyone who learned about Nokian Tyres’ arrival in
Oradea started to inform themselves about Finland and the
Finnish people.”
“Zero CO2 emissions is our first priority, followed by process
automation. This means that we are investing heavily in the
equipment needed to take care of our people and the environ-
ment.” The largely automated processes require that future
employees have the skills to operate multiple computer control
panels simultaneously, among many other tasks.
“In a so-called Industry 4.0 workplace like ours, as many
processes as possible are automated to avoid excessive manual
effort and maintain the cleanest working area possible. I’m sure
this is what our future employees also expect.”
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The entire Nokian Tyres® product portfolio suits both combus-
tion engine cars and electric cars, offering safe and high-quality
performance regardless of the car’s powertrain. Nokian Tyres has
developed and tested its tires for EVs for over ten years. To make it
easier for EV drivers to find suitable car tires, Nokian Tyres intro-
duced in summer 2023 a new ELECTRIC FIT® symbol for its existing
and upcoming products.
To bolster its heavy tire selection, Nokian Tyres launched its first tire
using the new Flexforce VF technology for agricultural machinery.
Nokian Tyres Flexforce® is an entirely new tire technology, combining
strength and high flexibility to create the most efficient XXL-size
ground contact in the market.
Read more about our financial development in the Report of the
Board of Directors on pages 16–35.
TH E EN T IRE N OKI A N TYR ES®
PROD UC T PORTFO LI O SU I TS
BOTH COMBUSTION E NGI NE
CA RS A ND EL ECT RI C CAR S.
M A D E F O R D E M A N D I N G C O N D I T I O N S :
M AT T I M O R R I
A premium
brand is built
on trust
Nokian Tyres develops and manufactures premium tires
for people who value safety, sustainability, and predictabil-
ity. Premium refers to the position of the Nokian Tyres brand
in the market where the company develops, markets, and
sells its high-quality products, as well as to the associated
customer experience.
Brand building requires determined work that aims to create
value and build trust in the minds of customers and consum-
ers. Nokian Tyres’ brand promises the customer excellent
product quality, exceptionally good customer service, and
a distinguishing customer experience.
A professional work community and working as a team to
thrive in a competitive tire market motivates Technical
Customer Service Manager Matti Morri to build trust in Nokian
Tyres as a premium brand. Nokian Tyres has a solid and
prestigious history. Our products are designed to operate
according to the conditions of their respective categories and
market areas. The recipe for future success is tried and tested.
“We are an underdog in the tire industry compared to the larger
firms. In our work, trust is founded on the relentless contribution of
every Nokian Tyres team member,“ Morri concludes.
R E P O R T B Y
T H E B O A R D O F
D I R E C T O R S
M A D E FO R D E M A N D I N G C O N D I T I O N S
Marko Äijälä, Senior Production OperatorWHATEVER THE WEATHER, SEASON, OR CONDITIONS, WE CREATE THE PRODUCT TO KEEP PEOPLE ON TRACK. Strategy Review Report by the Board of Directors
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Report by the
Board of Directors
Net sales and operating profit
Net sales in 2023 totaled EUR 1,173.6 million (2022: 1,350.5; 2021:
1,714.1) and decreased by 13.1%.
Segments net sales were EUR 1,173.6 million (2022: 1,350.5;
2021: 1,714.1) and decreased by 13.1%. With comparable currencies,
segments net sales decreased by 9.2% due to lower passenger car
tire supply volumes, specifically in Central Europe, as well as due to
demanding car and tire market environment and high inventories in
the distribution. Currency exchange rates affected segments net
sales negatively by EUR 51.9 million.
Following the completion of the Russia exit in March 2023, Nokian
Tyres has excluded Russia from its IFRS and non-IFRS segments
figures as of January 1, 2023, and has restated the financial year
2022 accordingly. Figures for 2021 and earlier years have not been
restated and include Russia. The balance sheet and the cash flow
figures have not been restated.
In 2023, Nokian Tyres continued to build the new Nokian Tyres and to
recover from the disruption that the company faced in 2022. During
2023, Nokian Tyres completed the exit from Russia, announced
long-term financial targets, and advanced its strategic investments
to build up capacity. One of the key priorities is building the world’s
first zero CO2 emission tire factory in Romania, which is progressing
as planned and where production is estimated to start in the second
half of 2024.
The car and tire market was demanding in 2023 due to economic
uncertainties, high inflation, and low consumer confidence. Dealers
focused on reducing their inventories, resulting in lower replacement
tire sell-in. Despite the economic slowdown, Nokian Tyres has steadily
improved performance and volume delivery. In the long-term, the
company aims for EUR 2 billion net sales with strong profits.
In sustainability, Nokian Tyres took significant steps forward. One
of the company’s main greenhouse gas emissions reduction targets
was to cut its factories’ direct CO2 emissions by 52% per production
ton by 2030 compared to 2015, and this target was achieved already
in 2023. Being included in the Dow Jones Sustainability Europe Index
is a proof of the company’s commitment to responsible business
practices and ongoing efforts in sustainable initiatives.
Segments net sales by geographical area
EUR million
Nordics
Other Europe
Americas
Other countries
Total
Segments net sales by business unit
EUR million
Passenger Car Tyres
Heavy Tyres
Vianor
Other operations and eliminations
Total
* Comparable currencies
** Includes internal sales
2023
671.7
226.0
268.7
7.2
1,173.6
2023
653.4
257.1
344.0
-80.9
1,173.6
2022
722.3
302.8
314.6
10.6
1,350.5
2022
810.7
271.0
362.0
-93.2
1,350.5
Change
-7.0%
-25.4%
-14.6%
-32.3%
-13.1%
Change
-19.4%
-5.1%
-5.0%
13.2%
-13.1%
% of total
net sales
in 2023
% of total
net sales
in 2022
57.2%
19.3%
22.9%
0.6%
53.5%
22.4%
23.3%
0.8%
100.0%
100.0%
% of total
net sales
in 2023**
55.7%
21.9%
29.3%
% of total
net sales
in 2022**
60.0%
20.1%
26.8%
CC*
Change
-0.3%
-26.1%
-12.8%
-32.3%
-9.2%
CC*
Change
-15.8%
-3.4%
1.8%
-9.2%
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18
Net sales and Segments operating profit
EUR million
2,000
1,500
1,000
500
0
1,585.4
1,714.1
1,313.8
1,350.5
1,173.6
337.2
190.2
324.8
17.8
65.1
2019
2020
2021
2022
2023
Net sales
Segments operating profit
Segments operating profit, %
%
40
30
20
10
0
Raw material unit costs (EUR/kg) in manufacturing, including inbound
logistics costs, decreased by 5% year-over-year, containing currency
impact.
Operating profit was EUR 32.1 million (2022: 56.7; 2021: 268.2).
Non-IFRS exclusions were EUR -33.0 million (38.9), of which EUR -30.2
million (-27.4) were related to the US factory ramp-up, and EUR -3.2
million (0.0) to the preparations for the Romanian factory ramp-up.
The result for discontinued operations (Russian operations) was
EUR -338.0 million: Profit from sale was EUR 30.5 million, operative
result was EUR -2.2 million, and previous years’ cumulative translation
difference was EUR -366.3 million. Operating profit percentage of net
sales was 2.7% (2022: 4.2%; 2021: 15.6%).
Segments operating profit was EUR 65.1 million (2022: 17.8; 2021:
324.8). Currency exchange rates affected segments operating profit
negatively by EUR 4.4 million. Segments operating profit percentage
was 5.5% (2022: 1.3%; 2021: 18.9%). Segments ROCE was 4.0% (0.9%).
Segments ROCE, %
25
20
15
10
5
0
18.6
15.8
9.3
4.0
0.9
2019
2020
2021
2022
2023
Segments operating profit by business unit
EUR million
Passenger Car Tyres
Heavy Tyres
Vianor
Other operations and eliminations
Segments operating profit total
Non-IFRS exclusions
2023
36.7
32.8
3.4
-7.8
65.1
-33.0
2022
-24.7
44.1
3.1
-4.6
17.8
38.9
Financial items and taxes
Net financial expenses were EUR 17.8 million (45.5), including net
interest expenses of EUR 14.1 million (11.2). Net financial expenses
include an expense of EUR 3.8 million (34.3) due to exchange rate
differences. Result before tax was EUR 14.2 million (11.2) and taxes
were EUR -1.7 million (4.1). Segments result before tax was EUR 47.4
million (-27.7). Result for the period was to EUR -325.5 million (-175.5).
Segments result for the period was to EUR -298.1 million (-118.4).
Earnings per share were EUR -2.36 (-1.27).
Return on equity was -23.4% (2022: -11.5%; 2021: 13.1%).
Guidance given for 2023
In Nokian Tyres’ financial statement release for 2022 published on
February 7, 2023, the company published the following outlook for
2023:
In 2023, Nokian Tyres’ segments net sales are expected to be
between EUR 1,300–1,500 million and segments operating profit
percentage of net sales between 6–8%. It is expected that due
to seasonality, the segments operating profit will be generated in
the second half of the year. As of 2023, segments net sales and
segments operating profit exclude Russia and other items, which are
not indicative of Nokian Tyres’ underlying business performance.
On October 24, the outlook was updated as follows:
In 2023, Nokian Tyres’ segments net sales are expected to be
approximately EUR 1,150–1,200 million and segments operating profit
percentage of net sales approximately 5.5–6%. As of 2023, segments
net sales and segments operating profit exclude Russia and other
items, which are not indicative of Nokian Tyres’ underlying business
performance.
Cash flow
In 2023, cash flow from operating activities was EUR 82.4 million
(-4.3). Working capital increased by EUR 43.5 million (increased by
257.1). Inventories increased by EUR 40.5 million (increased by 93.4)
and receivables increased by EUR 4.0 million (increased by 93.9).
Payables increased by EUR 1.0 million (decreased by 69.8).
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Investments
Financial position
Gearing on Dec 31, %
Investments in 2023 totaled EUR 252.1 million (129.7). Depreciations
and amortizations totaled EUR 114.9 million (113.5).
To expand its manufacturing footprint and rebuild capacity, the
company continued its actions to increase capacity at the factories
in Finland and in the US and began work on building a new passenger
car tire factory in Romania. The construction work at the world’s
first zero CO2 emission tire factory in Romania is proceeding as
planned. The first tires are estimated to be produced in the second
half of 2024 and commercial tire production is expected to start in
early 2025. The annual capacity of the factory will be 6 million tires
with an expansion potential in the future. The site will also house a
distribution facility for storage and distribution of tires. The total
investment is estimated to be approximately EUR 650 million.
Gross investments, EUR million
290.1
252.1
149.9
119.6
129.7
300
250
200
150
100
50
0
EUR million
Dec 31, 2023 Dec 31, 2022
Cash and cash equivalents
Interest-bearing liabilities
of which current interest-bearing
liabilities
Interest-bearing net debt
Unused credit limits
of which committed
Gearing, %
Equity ratio, %
414.9
638.5
142.9
223.6
831.1
330.3
16.6%
58.0%
259.0
399.9
198.8
140.9
799.3
305.4
9.8%
64.9%
The committed credit limits and the EUR 500 million commercial
paper program are used to finance inventories, trade receivables,
and subsidiaries in distribution chains, thereby controlling the typical
seasonality in the Group’s cash flow.
In May, a total of EUR 300 million long-term bilateral credit
facilities were withdrawn to refinance a total of EUR 150 million
bilateral facilities due in May and to finance investments. In June, a
EUR 100 million sustainability-linked five-year bond was issued.
In December, a syndicated sustainability-linked revolving credit
facility of EUR 200 million was signed to replace a total of EUR 175
million of existing revolving credit facilities, and to be used as a
backup for general corporate purposes.
The average interest rate of interest-bearing financial liabilities
was 4.5%.
20
10
0
-10
16.6
9.8
2.3
-1.1
2019
2020
-6.1
2021
2022
2023
Equity ratio on Dec 31, %
75.9
65.3
68.4
64.9
58.0
80
60
40
20
0
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Personnel
Group employees
on average
2023 2022
2021
3,754
3,517 4,941*
at the end of the review period
3,433 3,313 4,915*
in Finland, at the end of the review period
1,767
1,728
1,782
in North America, at the end of
the review period
Vianor (own) employees, at the end of
the review period**
558
458
391
1,387 1,400 1,395
* Including Russia. The sale of Nokian Tyres’ operations in Russia was
completed in March 2023, after which all Nokian Tyres’ operations in
Russia ended.
** Included in Group employee figures
Salaries, incentives, and other related costs in 2023 were EUR 232.2
million (2022: 237.5; 2021: 270.7).
Average number of personnel
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Research and development
Sales and distribution
In 2023, Nokian Tyres continued to develop and optimize its
distribution footprint to ensure efficient distribution in the changed
operating environment. In Central Europe, the company adapted its
reach to align with the current passenger car tire availability.
Nokian Tyres’ distribution network consists of Nokian Tyres’
own Vianor service centers, which are all located in the Nordics, and
Vianor service centers run by partners, the Nokian Tyres Authorized
Dealer (NAD) partners, other tire and vehicle retailers, wholesalers,
distributors as well as online stores.
Heavy Tyres operates in both the aftermarket and OEM market,
with a focus on European and North American markets. In 2023, sales
and distribution development in Heavy Tyres continued.
Nokian Tyres’ competitive position is based on its ability to
continually develop new, innovative and sustainable products.
In 2023, Nokian Tyres introduced several new tire models.
Approximately 50% of R&D investments is allocated to product
testing. Nokian Tyres’ R&D costs in 2023 totaled EUR 24.3 million
(2022: 29.6; 2021: 31.9), which is 11.6% (2022: 12.0%; 2021: 11.0%) of the
operating expenses.
R&D expenses, EUR million
31.9
29.6
22.7
22.7
24.3
32
24
16
8
0
4,995
4,859
4,941
2019
2020
2021
2022
2023
3,517
3,754
5,000
4,000
3,000
2,000
1,000
500
0
2019
2020
2021
2022
2023
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Business unit reviews
Passenger Car Tyres
EUR million
Net sales
Net sales change, %
Net sales change in comparable currencies, %
Operating profit
Operating profit, %
Segment operating profit
Segment operating profit, %
2023
653.4
-19.4%
-15.8%
4.1
0.6%
36.7
5.6%
2022
810.7
23.3
2.9%
-24.7
-3.1%
In 2023, net sales of Passenger Car Tyres totaled EUR 653.4 million
(810.7). With comparable currencies, net sales decreased by 15.8%.
The decrease was due to lower supply volumes, specifically in Central
Europe, as well as due to demanding car and tire market environment
and high inventories in the distribution. Average Sales Price with
comparable currencies increased strongly.
The share of sales volume of winter tires was 63% (47%), the share
of summer tires was 12% (25%), and the share of all-season tires was
25% (28%).
Operating profit was EUR 4.1 million (23.3). Segment operating
profit was EUR 36.7 million (-24.7). In 2022, logistics costs increased
significantly due to extraordinary measures to secure tire supply and
due to cost inflation.
Raw material unit costs (EUR/kg) in manufacturing, including
inbound logistics costs, decreased by 5% year-over-year, containing
currency impact.
To expand its manufacturing footprint and rebuild capacity,
the company began work on building a new passenger car tire
factory in Romania and continued its actions to increase capacity
at the factories in Finland and in the US. The construction work
at the world’s first zero CO2 emission tire factory in Romania is
proceeding as planned. In 2023, contract manufacturing volume was
approximately 1.5 million tires.
During the review period, the company launched upgraded tire
ranges for passenger cars, sport utility vehicles and crossovers in the
Central European market, including Nokian Tyres Snowproof winter
tire range, Nokian Tyres Seasonproof 1 all-season tire range as well as
Nokian Tyres Powerproof 1 and Nokian Tyres Wetproof 1 summer tire
ranges.
Passenger Car Tyres, Net sales and Segment operating profit
EUR million
1,200
1,000
800
600
400
200
0
-200
1,123.8
1,199.2
871.3
810.7
653.4
308.5
298.7
177.8
36.7
-24.7
2019
2020
2021
2022
2023
%
30
25
20
15
10
5
0
-5
Net sales
Segment operating profit
Segment operating profit, %
Heavy Tyres
EUR million
Net sales
Net sales change, %
Net sales change in comparable currencies, %
Operating profit
Operating profit, %
Segment operating profit
Segment operating profit, %
2023
257.1
-5.1%
-3.4%
32.8
12.8%
32.8
12.8%
2022
271.0
39.5
14.6%
44.1
16.3%
In 2023, net sales of Heavy Tyres totaled EUR 257.1 million (271.0). With
comparable currencies, net sales decreased by 3.4%.
Operating profit was EUR 32.8 million (39.5). Segment operating
profit was EUR 32.8 million (44.1). The decrease was caused by lower
volumes and its impact on supply chain costs as well as negative
currency impact.
Production was temporarily adapted during the summer and
Christmas breaks to meet the market demand.
Raw material unit costs (EUR/kg) in manufacturing, including inbound
logistics costs, decreased by 5% year-over-year, containing currency
impact.
During the review period, Heavy Tyres introduced new additions to
its harbor and excavator tire ranges and expanded the availability of the
Nokian Tyres Intuitu smart tires from Finland and France to Spain.
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Heavy Tyres, Net sales and Segment operating profit
EUR million
300
250
200
150
100
50
0
254.0
271.0
257.1
202.7
194.6
35.7
23.7
40.3
44.1
32.8
2019
2020
2021
2022
2023
Net sales
Segment operating profit
Segment operating profit, %
%
30
25
20
15
10
5
0
Vianor, own operations
EUR million
Net sales
Net sales change, %
Net sales change in comparable currencies, %
Operating profit
Operating profit, %
Segment operating profit
Segment operating profit, %
Number of own service centers at period end
2023
344.0
-5.0%
1.8%
3.4
1.0%
3.4
1.0%
174
2022
362.0
2.8
0.8%
3.1
0.9%
173
In 2023, net sales of Vianor totaled EUR 344.0 million (362.0). With
comparable currencies, net sales increased by 1.8%
Operating profit was EUR 3.4 million (2.8). Segment operating
profit was EUR 3.4 million (3.1).
At the end of the review period, Vianor had 174 (173) own service
centers in Finland, Sweden and Norway.
Vianor, Net sales and Segment operating profit
EUR million
400
300
200
100
0
336.5
318.1
342.9
362.0
344.0
7.7
4.0
4.1
3.1
3.4
2019
2020
2021
2022
2023
Net sales
Segment operating profit
Segment operating profit, %
%
4
3
2
1
0
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Segments Total to Nokian Tyres Total reconciliation in 1−12/2023
In addition to IFRS figures, Nokian Tyres publishes alternative non-IFRS segments figures, which exclude the ramp-up of the US factory, the
preparations for the Romanian factory ramp-up and other possible items that are not indicative of the Group’s underlying business performance.
Shares and shareholders
At the end of December 2023, the number of shares was 138,921,750.
Net sales
Cost of
sales
SGA
Other
operating
income/
expenses
Operating
profit
Financial
income/
expenses
Result from
continuing
operations
Result from
discontinued
operations
Result
for the
period
Taxes
1,173.6 -904.6 -208.7
4.8
65.1
-17.8
-9.7
37.7
EUR million
Segments Total
Profit from sale
Translation difference
US factory ramp-up
Romanian factory preparations
Non-operative items and others
Total non-IFRS exclusion
0.0
-27.9
-5.5
Nokian Tyres Total
1,173.6 -932.5 -214.2
-27.9
-2.3
-3.2
-30.2
-3.2
0.4
-33.0
32.1
7.2
0.6
7.8
-1.7
0.0
-17.8
0.4
0.4
5.1
-23.0
-2.6
0.4
-25.2
12.5
0.0
30.5
37.7
30.5
-366.3
-366.3
-23.0
-2.6
-1.8
-27.4
-2.2
-2.2
-338.0
-325.5
Corporate governance
In its corporate governance and administration, Nokian Tyres follows
the Finnish Limited Liability Companies Act, laws and regulations
relating to publicly listed companies in Finland, the Articles of
Association, the charters of Nokian Tyres’ Board of Directors and its
committees, the Nasdaq Helsinki rules and regulations, and the orders
and instructions from the European Securities and Markets Authority
as well as from the Financial Supervisory Authority. Nokian Tyres
complies without exceptions the Finnish Corporate Governance Code
2020 for listed companies. The code is published at www.cgfinland.
fi/en/.
The Corporate Governance Statement has been prepared
pursuant to the Finnish Corporate Governance Code 2020 for listed
companies and the Securities Markets Act (Chapter 7, Section 7) and
it is issued separately from the Board of Directors’ report. The Board
of Directors has reviewed the Corporate Governance Statement,
and the auditor Ernst & Young Oy has verified that the Statement
has been issued and that the description of the main features
of the internal control and risk management systems relating to
the financial reporting process is consistent with the financial
statements. The Corporate Governance Statement will be published
the week commencing February 26, 2024.
Number of shares (million units)*
at the end of period
in average
in average, diluted
* Excluding treasury shares
Authorizations
Dec 31,
2023*
Dec 31,
2022*
137.87
137.98
137.98
138.25
138.25
138.25
In April 2023, the Annual General Meeting authorized the Board
of Directors to resolve to repurchase a maximum of 13,800,000
shares in the company by using funds in the unrestricted
shareholders’ equity. The proposed number of shares corresponds to
approximately 9.9% of all shares in the company. The authorization
will be effective until the next Annual General Meeting, however, at
most until June 30, 2024, and it canceled the authorization given to
the Board of Directors by the Annual General Meeting on April 28,
2022.
In April 2023, the Annual General Meeting authorized the Board
of Directors to resolve to offer no more than 13,800,000 shares
through a share issue, or by granting special rights under Chapter 10,
Section 1 of the Finnish Limited Liability Companies Act that entitle
to shares (including convertible bonds), on one or more occasions.
The Board may decide to issue new shares or shares held by the
company. The maximum number of shares included in the proposed
authorization accounts for approximately 9.9% of all shares in the
company. The authorization will be effective until the next Annual
General Meeting, however at most until June 30, 2024, and it
canceled the authorization given to the Board of Directors by the
Annual General Meeting on April 28, 2022.
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In April 2023, the Annual General Meeting authorized the Board of
Directors to resolve on donations in the aggregate maximum amount
of EUR 250,000 to be made to universities, institutions of higher
education or to other non-profit or similar purposes during 2023 and
2024. The donations can be made in one or more installments. The
Board of Directors may decide on the donation recipients, purposes
of use and other terms of the donations.
In April 2022, the Annual General Meeting authorized the Board
of Directors to resolve to repurchase a maximum of 13,800,000
shares in the company by using funds in the unrestricted
shareholders’ equity. The proposed number of shares corresponded
to approximately 9.9% of all shares in the company. The authorization
was effective until the Annual General Meeting of 2023.
In April 2022, the Annual General Meeting authorized the Board
of Directors to resolve to offer no more than 13,800,000 shares
through a share issue, or by granting special rights under Chapter
10, Section 1 of the Finnish Limited Liability Companies Act that
entitle to shares (including convertible bonds), on one or more
occasions. The maximum number of shares included in the proposed
authorization accounted for approximately 9.9% of all shares in the
company. The authorization was effective until the Annual General
Meeting of 2023.
In April 2022, the Annual General Meeting authorized the Board of
Directors to resolve on donations in the aggregate maximum amount
of EUR 250,000 to be made to universities, institutions of higher
education or to other non-profit or similar purposes during 2022 and
2023.
In 2023, based on the authorization given to the Board by the
AGM, a donation of EUR 60,000, divided over three years, was made
to the Baltic Sea Action Group (BSAG) to support the protection of
the Baltic Sea.
Own shares
No share repurchases were made during the review period, and the
company did not possess any own shares on December 31, 2023.
Nokian Tyres has an agreement with a third-party service
provider concerning the share-based incentive program for key
personnel. The third party owns Nokian Tyres’ shares related to the
incentive program until the shares are given to the participants of
the program. On December 31, 2023, the number of these shares was
1,054,507, reported as treasury shares (December 31, 2022: 670,426).
This number of shares corresponded to 0.76% (0.48%) of the total
shares and voting rights in the company.
Trading in shares
A total of 223,641,182 (276,602,916) Nokian Tyres’ shares were
traded in Nasdaq Helsinki in 2023, representing 161% (199%) of the
company’s overall share capital. The average daily volume in 2023
was 891,001 shares (1,093,292). Nokian Tyres’ shares are also traded
on alternative exchanges.
Nokian Tyres’ share price was EUR 8.26 (9.58) at the end of 2023.
The volume weighted average share price in 2023 was EUR 8.40
(14.42), the highest was EUR 11.63 (34.90) and the lowest was EUR 6.18
(9.27). The company’s market capitalization at the end of 2023 was
EUR 1.1 billion (1.3 billion).
At the end of 2023, the company had 94,092 (76,763) registered
shareholders. The percentage of Finnish shareholders was 61.5%
(46.7%), and 38.5% (53.3%) were non-Finnish holders and foreign
shareholders registered in the nominee register. Public sector
entities owned 17.5% (16.8%), financial and insurance corporations
5.4% (3.7%), households 30.7% (20.3%), non-profit institutions 2.2%
(2.0%), and private companies 5.8% (3.8%).
Major shareholders on December 31, 2023
(Does not include nominee registered shareholders or treasury
shares)
1. Solidium Oy
2. Varma Mutual Pension Insurance
Company
Number of
shares
% of share
capital
14,031,000
10.10
4,238,192
3.05
3. Ilmarinen Mutual Pension Insurance
Company
2,626,395
4. Elo Mutual Pension Insurance Company
2,028,000
5. Nordea Nordic Small Cap Fund
6. Nordea Finland Fund
7. The State Pension Fund
8. OP-Finland
9. Barry Staines Linoleum Ltd.
10. OP-Henkivakuutus Ltd.
1,084,160
1,079,413
900,000
610,000
480,000
479,864
1.89
1.46
0.78
0.78
0.65
0.44
0.35
0.35
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25
% of shares and
voting rights
% of shares and
voting rights
through financial
instruments
Total, %
Transaction date
Shareholder
Below 5%
Below 5% Below 5%
February 17, 2023
BlackRock, Inc
Changes in ownership
Transaction date
Shareholder
January 3, 2023
BlackRock, Inc
January 4, 2023
Norges Bank
January 5, 2023
BlackRock, Inc
January 9, 2023
Norges Bank
January 10, 2023
BlackRock, Inc
Threshold
Below 5%
Above 5%
Above 5%
Below 5%
Above 5%
January 10, 2023
Société Générale SA
Above 5%
January 11, 2023
BlackRock, Inc
January 12, 2023
BlackRock, Inc
January 12, 2023
Norges Bank
January 16, 2023
BlackRock, Inc
January 17, 2023
Norges Bank
January 18, 2023
Norges Bank
January 18, 2023
BlackRock, Inc
Below 5%
Below 5%
Above 5%
Above 5%
Below 5%
Above 5%
Above 5%
January 18, 2023
Société Générale SA
Below 5%
January 24, 2023
Société Générale SA
Above 5%
February 1, 2023
BlackRock, Inc
February 2, 2023
BlackRock, Inc
February 3, 2023
BlackRock, Inc
Below 5%
Below 5%
Above 5%
February 7, 2023
Société Générale SA
Below 5%
February 8, 2023
BlackRock, Inc
February 9, 2023
BlackRock, Inc
February 13, 2023 Norges Bank
February 14, 2023
BlackRock, Inc
Above 5%
Below 5%
Below 5%
Below 5%
4.99%
4.93%
4.99%
5.04%
0.38%
4.78%
0.06%
0.21%
0.00%
0.20%
5.40%
0.24%
5.05%
5.15%
4.99%
5.24%
5.78%
5.02%
Below 5%
Below 5% Below 5%
5.05%
4.67%
4.90%
5.20%
5.11%
0.16%
0.56%
4.61%
0.00%
0.61%
0.00%
0.00%
0.60%
4.78%
4.54%
0.42%
5.05%
5.29%
4.90%
5.20%
5.71%
4.94%
5.10%
5.04%
Below 5%
Below 5% Below 5%
4.80%
0.10%
5.90%
3.76%
4.88%
0.49%
3.78%
0.29%
1.57%
0.13%
5.29%
3.88%
6.19%
5.33%
5.01%
Threshold
Below 5%
Above 5%
% of shares and
voting rights
% of shares and
voting rights
through financial
instruments
Total, %
Below 5%
Below 5% Below 5%
4.66%
0.25%
3.77%
0.44%
5.18%
1.30%
5.11%
5.43%
5.07%
February 21, 2023
BlackRock, Inc
March 3, 2023
Société Générale SA
Above 5%
March 9, 2023
JPMorgan Chase & Co.
Above 5%
March 10, 2023
Bank of America
Corporation
Above 5%
1.1013224%
4.325991% 5.427315%
March 10, 2023
Société Générale SA
Below 5%
0.05%
4.78%
4.83%
March 13, 2023
Bank of America
Corporation
Below 5%
0.694290%
3.665487% 4.359777%
March 13, 2023
JPMorgan Chase & Co.
Below 5%
Below 5%
Below 5% Below 5%
March 13, 2023
Société Générale SA
Above 5%
March 14, 2023
JPMorgan Chase & Co.
Above 5%
March 15, 2023
JPMorgan Chase & Co.
Below 5%
March 17, 2023
BlackRock, Inc
Below 5%
0.04%
3.50%
Below 5%
Below 5%
6.36%
2.07%
6.40%
5.57%
Below 5% Below 5%
Below 5% Below 5%
March 17, 2023
March 20, 2023
March 20, 2023
March 21, 2023
The Goldman Sachs
Group
Bank of America
Corporation
The Goldman Sachs
Group
Bank of America
Corporation
Above 5%
2.59%
3.27%
5.86%
Above 5%
2.576416%
2.734651% 5.311067%
Below 5%
2.26%
0.96%
3.22%
Below 5%
2.517747%
1.657154% 4.174901%
July 6, 2023
Société Générale SA
Below 5%
0.08%
0.08%
0.04%
4.41%
5.24%
4.64%
4.49%
5.32%
4.68%
Detailed information on notifications of change in shareholding can be found at
www.nokiantyres.com/company/investors/share/flagging-notifications/.
February 14, 2023
JPMorgan Chase & Co.
Above 5%
February 14, 2023 Norges Bank
Below 5%
3.47%
4.28%
1.61%
0.13%
5.08%
4.42%
February 15, 2023
JPMorgan Chase & Co.
Below 5%
Below 5%
Below 5% Below 5%
February 16, 2023
BlackRock, Inc
Above 5%
4.42%
0.66%
5.09%
Below 5%
Below 5% Below 5%
July 11, 2023
Société Générale SA
Above 5%
July 12, 2023
Société Générale SA
Below 5%
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
26
Shares owned by the Board members and legal entities controlled
by them on December 31, 2023
Shares owned by the Management Team members and legal
entities controlled by them on December 31, 2023
Number of shares
Management Team
Number of shares
Board of Directors
Jukka Hienonen, Chair
Pekka Vauramo, Deputy Chair
Susanne Hahn, member
Markus Korsten, member
Veronica Lindholm, member
Christopher Ostrander, member
Jouko Pölönen, member
George Rietbergen, member
Reima Rytsölä
Total
25,808*
9,096
4,028
2,386
10,004
4,660
23,690
7,614
2,386**
89,672
* In addition, 20,592 shares in an insurance wrapper,
with no voting right
** In addition, 5,000 shares in an insurance wrapper,
with no voting right
Shares owned by the President and CEO and legal entities
controlled by him on December 31, 2023
President and CEO
Jukka Moisio
Number of shares
22,921
On December 31, 2023, Nokian Tyres’ Board members and the
President and CEO held a total of 112,593 Nokian Tyres shares.
The shares represent 0.08% of the total number of votes.
Päivi Antola, Communications,
Investor Relations and Brand
Niko Haavisto, Finance
Anna Hyvönen, Passenger Car Tyres and Vianor
Adrian Kaczmarczyk, Supply Operations
Jukka Kasi, Products and Innovations
Päivi Leskinen, Human Resources
Manu Salmi, Heavy Tyres and Nokia Factory
Total
5,799
11,250
22,010
3,420
40,367
0
30,457
113,303
Managers’ transactions
Nokian Tyres announced managers’ transactions on March 8,
April 27 and 28, May 5, November 6, and December 1. Read more
at www.nokiantyres.com/company/publications/releases/2023/
managementTransactions/.
The Annual General Meeting 2023
On April 26, 2023, the Annual General Meeting adopted the financial
statements for 2022, discharged the members of the Board of
Directors and the President and CEO from liability for the financial
year 2022 and adopted the company’s Renumeration Report for
governing bodies. More information is available on the company’s
website at www.nokiantyres.com/company/investors/ir-services/
ir-calendar/annual-general-meetings/.
Dividend
The AGM decided that a dividend of EUR 0.35 per share shall be paid
for the financial year 2022. The dividend was paid on May 11, 2023
to shareholders who were registered in the company’s shareholders’
register maintained by Euroclear Finland Oy on the dividend record
date on April 28, 2023. In October 2023, the Board of Directors
made a decision on the payment of a second dividend installment
of EUR 0.20 per share based on the authorization given by the AGM
2023. The second dividend installment was paid on December 5, 2023
to shareholders who were registered in the company’s shareholders’
register maintained by Euroclear Finland Oy on the dividend record
date on November 2, 2023.
Segments earnings per share and dividend per share, EUR
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
3.06*
1.84
1.04
0.55**
-2.16
2023
-0.86
2019
2020
2021
2022
Segments earnings per share
Dividend per share
* Segments EPS 2019 excl. the impact of the rulings
on the tax disputes of EUR 1.08 were EUR 1.98
** The Board’s proposal to the Annual General Meeting
on the payment of a maximum amount of dividend
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
27
Remuneration for members of the Board of Directors
The AGM decided that the members of the Board of Directors
be paid the following remuneration: to the Chair of the Board of
Directors EUR 110,000 per year; to the Deputy Chair and to the
Chairs of the Audit Committee and Personnel and Remuneration
Committee EUR 75,000 per year each, and to members EUR 52,500
per year each. 60% of the annual fee will be paid in cash and 40% in
company shares.
Furthermore, the AGM decided on a meeting fee of EUR 700
for each Board and Board Committee meeting. For Board members
resident in Europe, the fee for each meeting in Europe outside a
member’s home country is doubled, and for each meeting outside
Europe the fee is tripled. For Board members resident outside
Europe, the fee for each meeting outside a member’s home country
is tripled. If a member participates in a meeting via telephone or
video connection, the remuneration is EUR 700. Travel expenses will
be compensated in accordance with the company’s travel policy.
Members of the Board of Directors and Auditors
The AGM decided that the number of the members of the Board
of Directors shall be nine. Susanne Hahn, Jukka Hienonen, Veronica
Lindholm, Christopher Ostrander, Jouko Pölönen, George Rietbergen
and Pekka Vauramo were re-elected as members of the Board of
Directors, and Markus Korsten and Reima Rytsölä were elected as
new members of the Board of Directors for a term ending at the
closing of the Annual General Meeting 2024. Jukka Hienonen was
re-elected as the Chair and Pekka Vauramo as Deputy Chair of the
Board of Directors.
Ernst & Young Oy, an authorized public accountant firm, was
re-elected as the company’s auditor for a term ending at the closing
of the Annual General Meeting 2024.
Authorizations
The AGM authorized the Board of Directors to resolve to repurchase
a maximum of 13,800,000 shares in the Company by using funds
in the unrestricted shareholders’ equity. The proposed number
of shares corresponds to approximately 9.9% of all shares in the
company. The authorization will be effective until the next Annual
General Meeting, however, at most until June 30, 2024, and it
canceled the authorization given to the Board of Directors by the
Annual General Meeting on April 28, 2022.
The AGM authorized the Board of Directors to resolve to offer no
more than 13,800,000 shares through a share issue, or by granting
special rights under Chapter 10, Section 1 of the Finnish Limited
Liability Companies Act that entitle to shares (including convertible
bonds), on one or more occasions. The Board may decide to issue
new shares or shares held by the company. The maximum number
of shares included in the proposed authorization accounts for
approximately 9.9% of all shares in the company. The authorization
will be effective until the next Annual General Meeting, however at
most until June 30, 2024, and it canceled the authorization given to
the Board of Directors by the Annual General Meeting on April 28,
2022.
The AGM authorized the Board of Directors to resolve on
donations in the aggregate maximum amount of EUR 250,000 to
be made to universities, institutions of higher education or to other
non-profit or similar purposes during 2023 and 2024. The donations
can be made in one or more installments. The Board of Directors may
decide on the donation recipients, purposes of use and other terms
of the donations.
Board of Directors’ working
arrangements
In its organizing meeting on April 26, 2023, the Board of Directors
decided to change the name of the Board’s Personnel and
Remuneration Committee to Board’s People and Sustainability
Committee. Furthermore, the Board elected members to the
Board’s People and Sustainability Committee and Audit Committee.
Veronica Lindholm was elected as the Chair and Pekka Vauramo,
Jukka Hienonen and Susanne Hahn as members of the People and
Sustainability Committee. Further, the Board of Directors elected
Jouko Pölönen as the Chair and Christopher Ostrander and Reima
Rytsölä as members of the Audit Committee.
Shareholders’ Nomination Board
In June 2023, the following members were appointed to Nokian
Tyres’ Shareholders’ Nomination Board:
• Mr. Pauli Anttila (Investment Director, Solidium Oy), appointed by
Solidium Oy
• Mr. Timo Sallinen (Director, Head of Listed Securities, Varma
Mutual Pension Insurance Company), appointed by Varma Mutual
Pension Insurance Company
• Mr. Mikko Mursula (Deputy CEO, Investments, Ilmarinen Mutual
Pension Insurance Company), appointed by Ilmarinen Mutual
Pension Insurance Company
• Mr. Carl Pettersson (CEO, Elo Mutual Pension Insurance),
appointed by Elo Mutual Pension Insurance
• Mr. Jukka Hienonen, Chair of the Board, Nokian Tyres plc
The Shareholders’ Nomination Board proposes to the 2024 Annual
General Meeting that the Board consists of nine members, the
Chair and the Deputy Chair included, and that of the current
Board members Susanne Hahn, Jukka Hienonen, Markus Korsten,
Christopher Ostrander, Jouko Pölönen, Reima Rytsölä and Pekka
Vauramo be re-elected and Elina Björklund and Elisa Markula be
elected as new members to the Board of Directors for a term ending
at the end of the 2025 Annual General Meeting. Of the current
members, George Rietbergen and Veronica Lindholm have informed
that they are not available for re-election to the Board of Directors.
Jukka Hienonen is proposed to continue as the Chair and
Pekka Vauramo as the Deputy Chair of the Board of Directors. All
candidates have given their consent to the election. The candidates
are independent of the company and its major shareholders, with the
exception of Reima Rytsölä, who is deemed not to be independent of
a significant shareholder of the company based on his position as the
CEO of Solidium Oy.
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
28
With regard to the selection procedure for the members of the
Board of Directors, the Shareholders’ Nomination Board recommends
that shareholders take a position on the proposal as a whole at
the General Meeting. This recommendation is based on the fact
that in Nokian Tyres, in line with a good Nordic governance model,
the Shareholders’ Nomination Board is separate from the Board
of Directors. The Shareholders’ Nomination Board, in addition to
ensuring that individual nominees for membership of the Board of
Directors possess the required competencies, is also responsible for
making sure that the proposed Board of Directors as a whole has the
best possible expertise and experience for the Company and that
the composition of the Board of Directors meets other requirements
of the Finnish Corporate Governance Code for listed companies.
The annual remuneration to be paid to the members of the Board
of Directors to be elected at the Annual General Meeting for the
term of office ending at the close of the Annual General Meeting
2025 is proposed to be as follows: to the Chair of the Board of
Directors EUR 115,000 (former 110,000); to the Deputy Chair of the
Board and to the Chairs of the Committees EUR 76,000 (75,000), and
to other members EUR 53,500 (52,500).
The Shareholders’ Nomination Board further proposes that 60%
of the annual fee be paid in cash and 40% in company shares.
The meeting fee is proposed to remain at the current level and
thus be EUR 700 for each Board and Board Committee meeting.
For Board members resident in Europe, the fee for each meeting
in Europe outside a member’s home country is doubled, and for
each meeting outside Europe the fee is tripled. For Board members
resident outside Europe, the fee for each meeting outside a
member’s home country is tripled. If a member participates in
a meeting via telephone or video connection, the remuneration
is proposed to be EUR 700. Travel expenses are proposed to be
compensated in accordance with the company’s travel policy.
Changes in management
In September 2023, Niko Haavisto was appointed Nokian Tyres’ new
Chief Financial Officer (CFO) and a member of the Management
Team effective October 1, 2023. Niko Haavisto succeeds Teemu
Kangas-Kärki, who worked as Nokian Tyres’ CFO and member of the
Management Team in 2018–2023.
Corporate sustainability
In March, Nokian Tyres announced its commitment to further reduce
greenhouse gas emissions, aiming to achieve the science-based
Net-Zero Standard by 2050. An important factor in achieving the
net-zero target will be the new factory that Nokian Tyres is building
in Oradea, Romania. It will be the first zero CO2 emission factory in
the tire industry.
In May, Nokian Tyres signed a research agreement for an
international project aiming to improve the quality and yield of
recycled carbon black from end-of-life tires. This will enable the use
of higher amounts of recycled carbon black in rubber compounds,
benefiting tire and rubber product manufacturers in creating more
sustainable products. Nokian Tyres included recycled carbon black
in a commercial product line in 2022, which is a step forward in
reaching the company’s target of increasing the share of recycled
and renewable raw materials in tires to 50% by 2030.
In May, EcoVadis, a global standard for business sustainability
ratings, awarded a Platinum Medal to Nokian Tyres. Only 1% of more
than 85,000 companies assessed by EcoVadis achieve a Platinum
rating.
In June, Nokian Tyres issued a EUR 100 million sustainability-linked
bond. The sustainability-linked bond emphasizes the company’s
approach of integrating sustainability in its business model and
investments.
In September, Nokian Tyres made a Baltic Sea commitment for
the years 2023–2026. The commitment is focused on cooperation
in BSAG’s Ship Waste Action initiative, which aims to reduce the
environmental burden of sea transport.
In November, Nokian Tyres announced that it had reached one
of its science-based greenhouse gas emissions reduction targets
seven years ahead of schedule. The target was to cut the company’s
tire factories’ CO2 emissions by 52% per production ton by 2030
compared to the emissions level in 2015. The target was already
achieved in 2023. Nokian Tyres’ factory emissions per production ton
are the lowest in the tire industry.
In November, Nokian Tyres joined Polestar 0 project that aims
to create a climate-neutral car by 2030. The project’s target is
to eliminate all greenhouse gas emissions stemming from the
production and end-of-life of the car. Nokian Tyres contributes to the
project by developing climate-neutral premium tires.
In December, Nokian Tyres was again included in the Dow Jones
Sustainability Europe Index, which means that the company is among
the most sustainable listed companies in Europe.
Nokian Tyres will publish its Corporate Sustainability Report for
2023 in spring 2024.
Non-Financial Information Statement
Nokian Tyres publishes an annual Non-Financial Information
Statement in line with the Requirements of non-financial information
reporting according to the Finnish Accounting Act. The Non-Financial
Information Statement is issued separately from the Board of
Directors’ report. The Board of Directors has reviewed and signed the
Non-Financial Information Statement. The Non-Financial Information
Statement will be published the week commencing February 26,
2024.
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
29
Share-based long-term incentive
scheme for the management and
selected key employees of Nokian
Tyres plc
In February 2023, Nokian Tyres announced that the Board of
Directors of Nokian Tyres plc had decided to establish a new
share-based incentive plan for the group’s key employees. The aim
is to align the objectives of the company’s shareholders and key
employees for increasing the value of the company in the long-
term, to retain the key employees at the company and to offer
them a competitive incentive scheme that is based on earning and
accumulating shares.
The Performance Share Plan 2023–2027 consists of three
performance periods covering the financial years 2023–2024,
2024–2025 and 2025–2027. The Board will decide annually on the
commencement and details of the performance periods.
In the plan, the target group is given an opportunity to earn
Nokian Tyres plc shares based on the achievement of the targets
set for the performance periods. Potential rewards of the plan will
be paid by the end of April 2026, 2027, and 2028 respectively. The
rewards will be paid partly in Nokian Tyres plc shares and partly in
cash. The cash proportion of the reward is intended for covering
taxes and tax-related expenses arising from the rewards to the
participants. In general, no reward will be paid if the participant’s
employment or director contract terminates before the reward
payment.
The rewards from the performance period 2023–2024 are based
on cumulative EBITDA, increase in passenger car tire production
volume and reduction in direct CO2 emissions.
The President and CEO of the company and members of the
Management Team are obliged to hold 50% of the received net
shares until the value of the participant’s total shareholding in the
company corresponds to the participant’s annual gross salary. The
shareholding amount must be maintained as long as the membership
in the Management Team or the position as a President and CEO
continues.
The value of the gross rewards to be paid from the performance
period 2023–2024 will correspond to an approximate maximum total
of 1,400,000 Nokian Tyres plc shares, including the cash proportion.
Approximately 150 persons, including the President and CEO of the
company and other Management Team members, belong to the
target group of the performance period.
Restricted Share Plan 2023
The Board of Directors of Nokian Tyres plc decided to continue
the Restricted Share Plan, using the same structure as previous
years. The purpose of the Restricted Share Plan is to serve as
a complementary long-term incentive tool, used selectively for
retention of Nokian Tyres key employees. It consists of annually
commencing individual Restricted Share Plans, each with a three-
year retention period after which the share rewards granted within
the plan will be paid to the participants in shares of Nokian Tyres plc
and partly in cash.
The commencement of each individual plan is subject to a
separate approval by the Board of Directors.
A precondition for the payment of the share reward based on
the Restricted Share Plan is that the employment relationship of a
participant with Nokian Tyres continues until the payment date of
the reward. In addition to this precondition, a financial performance
criteria is applied to Nokian Tyres Management Team. The criteria is
a threshold value for segments Return on Capital Employed (ROCE),
which must be exceeded for a potential payment of a share reward
based on the Restricted Share Plan 2023–2025.
The next plan (RSP 2023–2025) within the Restricted Share
Plan structure commenced effective as of the beginning of 2023
and the potential share reward thereunder will be paid in the first
half of 2026. The possible rewards paid based on RSP 2023–2025
correspond approximately to a maximum of 120,000 gross shares.
Adjustment of financial criteria for Restricted Share
Plans 2020–2022, 2021–2023, and 2022–2024
In addition to the employment precondition for the payment of
the share reward based on the Restricted Share Plan, a financial
performance criteria was set in Restricted Share Plans 2020–2022,
2021–2023 and 2022–2024 to Nokian Tyres Management Team,
incl. the President and CEO. The criteria is a threshold value, which
must be exceeded for any payment of a share reward based on the
Restricted Share Plan.
In February 2023, the Board of Director decided to modify the
financial performance criteria. The change was necessary to reflect
the radical effects on business conditions, caused by the war in
Ukraine. It was decided that the threshold criteria are changed and
measured against a pre-set average threshold value for segments
ROCE (during the financial years during the corresponding restriction
period). The previous financial threshold criteria was set for an
average value for ROCE (according to IFRS), during the restriction
period in question.
A threshold value tied to average segments ROCE is be applied
to Restricted Share Plans 2020–2022, 2021–2023, 2022–2024, as
well as for the Restricted Share plan commencing in 2023, with a
restriction period between 2023–2025.
Payments for share-based plans that ended in 2022
In February 2023, the Board of Directors of Nokian Tyres plc
approved payments of share awards from the Performance and
Restricted share plans 2020–2022.
Performance Share Plan 2020–2022
The performance measure for the Performance Share Plan 2020–
2022 was based on segments Earnings Per Share (EPS) and segments
Return on Capital Employed (ROCE), both with an equal weight of
50%. The achievement for the segments Earnings Per Share (EPS)
target was 50.0% and for the segments Return on Capital Employed
(ROCE) target was 145.0%. The combined achievement of the set
targets was thereby 97.5%. The rewards to be paid correspond to a
total of approximately 158,500 Nokian Tyres plc gross shares. The
rewards were paid in March 2023. Approximately 125 key employees
participated in the Performance Share Plan 2020–2022, including
members of the Management Team.
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
30
Restricted Share Plan 2020–2022
The three-year restriction period of the Restricted Share Plan
2020–2022 ended after financial year 2022. 67 key employees
participate in the share-based incentive plan, including the President
and CEO and members of the Management Team. The financial
threshold value for segments Return on Capital Employed (ROCE)
applied for the President and CEO and the Management Team
members was achieved. The rewards paid corresponded to a total of
71,550 Nokian Tyres plc gross shares. The rewards were paid in March
2023. A precondition for the payment of the share reward based on
the Restricted Share Plan was that the employment relationship of
a participant with Nokian Tyres continued until the payment date of
the reward.
The total number of shares of the company did not change due
to payments for share-based plans that ended in 2022.
The Board of Directors anticipates that no new shares will be
issued based on the share-based incentive schemes and that the
schemes will, therefore, have no dilutive effect on the registered
number of the company’s shares.
Significant risks, uncertainties, and
ongoing disputes
Nokian Tyres’ business and financial performance may be affected
by several uncertainties. The Group has adopted a risk management
policy, approved by the Board of Directors, which supports the
achievement of strategic goals and ensures business continuity.
The Group’s risk management policy focuses on managing both the
risks pertaining to business opportunities and the risks affecting
the achievement of the Group’s goals in the changing operating
environment. The risk management process aims to identify and
evaluate the risks and to plan and implement the practical measures
for each risk. Nokian Tyres describes the overall business risks and
risk management in its annual Corporate Governance Statement.
For example, the following risks could potentially have an impact
on Nokian Tyres’ business:
• Nokian Tyres is subject to risks related to consumer confidence
and macroeconomic and geopolitical conditions. Political
uncertainties may cause serious disruption and additional trade
barriers and affect the company’s sales and credit risk. Economic
downturns may increase trade customers’ payment problems
and Nokian Tyres may need to recognize impairment of trade
receivables.
• The tire wholesale and retail landscape is evolving to meet
changing consumer needs. New technologies are fueling this
with increasing digitalization. Failure to adapt to the changes in
the sales channel could have an adverse effect on Nokian Tyres’
financial performance.
• Nokian Tyres’ success is dependent on its ability to innovate
and develop new products and services that appeal to its
customers and consumers. Despite extensive testing of its
products, product quality issues and failure to meet demands of
performance and safety could harm Nokian Tyres’ reputation and
have an adverse effect on its financial performance.
• Any unexpected production or delivery breaks at Nokian Tyres’
production facilities or those of its contract manufacturing
partners would have a negative impact on the company’s
business. Interruptions in logistics could have a significant impact
on production and peak season sales.
In order to secure tire supply, Nokian Tyres has decided to invest
in new production capacity in Romania and increase the share
of outsourced production. Delay in these actions could have an
adverse effect on Nokian Tyres’ financial performance.
• Significant fluctuations in raw material prices may impact
•
margins. Nokian Tyres sources natural rubber from producers
in countries such as Indonesia and Malaysia. Although Nokian
Tyres has policies such as the Supplier Code of Conduct and
established processes to monitor the working conditions, it
cannot fully control the actions of its suppliers. Nokian Tyres
continues to expand its supplier portfolio to mitigate risks
related to single-source supplying and availability of sustainable
raw materials. The non-compliance with laws, regulations or
standards by raw material producers, or their divergence from
practices generally accepted as ethical in the European Union or the
international community, could have a material adverse effect on
Nokian Tyres’ reputation.
• Tire industry can be subject to risks caused by climate change, such
as changes in consumer tire preferences, regulatory changes or
impact of extreme weather events on natural rubber producers.
Nokian Tyres is committed to reducing GHG emissions from its
operations in order to combat climate change. Nokian Tyres
calculates the GHG emissions from its operations annually and
reduces them systematically. More detailed analysis on Nokian
Tyres’ climate change related risks and opportunities is provided
at www.nokiantyres.com/company/sustainability/environment/
climate-change-related-risks-and-opportunities/.
• Foreign exchange risk consists of transaction risk and translation
risk. The most significant currency risks arise from the Swedish and
Norwegian krona, and the US and Canadian dollar. Approximately
65% of the Group’s sales are generated outside of the euro-zone.
• The availability of supporting information systems and network
•
services is crucial to Nokian Tyres. Unplanned interruption in critical
information systems or network services may cause disruption
to the continuity of operations. Such systems and services may
also be exposed to cyberattacks that could cause a leakage of
confidential information, violation of data privacy regulations, theft
of know-how and other intellectual property, production shutdown
or damage to reputation. Risk analyses and projects related to
information security, data protection, and customer information are
continuously a special focus area at Nokian Tyres.
In May 2017, the Finnish Financial Supervisory Authority filed a
request for investigation with the National Bureau of Investigation
regarding possible securities market offences. In October 2020, the
prosecutor announced the decision to press charges against a total
of six persons who acted as Board members and the President and
CEO of Nokian Tyres in 2015–2016. The prosecutor also claimed a
corporate fine against the company. In addition, four persons who
were employees at Nokian Tyres in 2015 were charged for abuse
of inside information. The District Court of Helsinki dismissed all
charges and claims by the prosecutor in its ruling in June 2022.
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
31
The decision is not yet legally binding, and the prosecutor has
appealed against the decision of the District Court.
• A new and more dangerous variant of COVID-19 or other similar
pandemics may slow down economic activity, and thus have a
negative impact on Nokian Tyres’ operations and supply chain as
well as the demand and pricing for the company’s products.
• Building a diverse customer base and fostering strong
relationships help mitigate sales risks associated with relying on a
limited number of large customers and create long-term stability
for the business.
• Nokian Tyres’ success relies heavily on employing the right
individuals in the right positions. Failing to attract competent
and committed professionals, coupled with an inability to
create a motivating work environment, may have an adverse
impact on the implementation of Nokian Tyres’ strategy and the
achievement of its financial targets.
• Various aspects of corporate sustainability, including product
•
quality, safety, the environment, and human rights, are
increasingly important. Non-compliance with the growing number
of new laws, regulations, and standards, particularly those related
to environmental, social and governmental (ESG) issues, or a lack
of full comprehension regarding their impact on the company’s
business and disclosure requirements, can potentially result in
fines and cause damage to the company’s reputation.
In January 2024, the European Commission initiated an
unannounced inspection at Nokian Tyres plc’s headquarters
in Nokia, Finland. The European Commission has expressed its
concerns that the inspected tire manufacturing companies
may have violated EU antitrust rules that prohibit cartels and
restrictive business practices. Nokian Tyres does not have
information on the outcome of the inspection, and it cannot
comment on the ongoing investigation. Nokian Tyres is fully
co-operating with the authorities.
Tax disputes
In April 2021, Nokian Tyres received a decision from the Tax
Administration after a tax audit regarding foreign withholding tax
on dividends, according to which the company was obliged to pay a
total of EUR 1.9 million additional taxes, tax increases and interest for
tax years 2015–2016. Taxes were paid and recognized in receivables.
Nokian Tyres considered the tax authority’s view unfounded and
appealed against the decision.
In December 2022, Nokian Tyres received a positive decision
from The Assessment Adjustment Board, according to which the
additional taxes, punitive tax increase and late payment interest
were removed. The Finnish tax authority refunded these in full to
the company in December 2022 and the company recognized the
amount in the same quarter cash flow. The Finnish Tax Authority
has applied for an amendment to the decision of the Assessment
Adjustment Board.
Routine tax audits in Nokian Tyres Group entities may possibly
lead to a reassessment of taxes.
Exit from Russia
In March 2023, Nokian Tyres plc announced the completion of the
sale of its operations in Russia to PJSC Tatneft, after which all Nokian
Tyres’ operations in Russia ended. The closing date of the sale
transaction of Russian operations is considered to be March 16, 2023,
when the sale price was received. The sale price was EUR 285 million.
The result for discontinued operations (Russian operations) in the
first quarter of 2023 was EUR -338.9 million: Profit from sale was EUR
29.6 million, operative result was EUR -2.2 million, and previous years’
cumulative translation difference was EUR -366.3 million.
Strategy and updated financial targets
Following the completion of the Russia exit in March 2023, Nokian
Tyres announced its new long-term financial targets and confirmed
the previously announced non-financial targets. Nokian Tyres
aims for EUR 2 billion net sales and segments operating profit of
approximately 15%. The company also introduced a new capital
structure target: net debt to segments EBITDA ratio between 1 and 2.
Nokian Tyres’ dividend policy is unchanged. The target is to pay a
dividend of at least 50% of the net earnings.
Long-term financial targets
Status in 2023
Organic growth
Net sales EUR 2 billion
EUR 1.17 billion
Profitability
Segments operating profit ~15% 5.5%
Capital structure Net debt/Segments EBITDA 1–2
1.3
Nokian Tyres’ strategy centers on organic growth in the key markets
in the Nordics, North America and Central Europe. Focus continues
to be on attractive niche segments, especially on premium winter
tires, where Nokian Tyres can generate good margins. Expanding
capacity together with market relevant high-quality products and
enhancing commercial capabilities will boost topline growth. Margin
improvement will be driven by increasing sales volume and average
sales price. With a solid balance sheet and strong cash generation,
the company is able to both invest in growth and reward its
shareholders.
With respect to passenger car tires, the company’s growth
strategy is divided into two phases. The investment phase is
expected to run from 2023 to 2025 and the growth phase from
2026 to 2027. In 2023, passenger car tire sales volumes decreased
significantly due to the sale of the Russia operations. Therefore,
rebuilding production capacity during the investment phase is
integral to achieving the EUR 2 billion net sales target. During the
growth phase, expanding capacity combined with the introduction of
new top-performing products and enhanced operational capabilities
will underpin the company’s progress toward the financial targets.
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
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32
a maximum of EUR 0.20 per share to be distributed in December.
This shall be decided by the Board of Directors in its meeting
scheduled for October 29, 2024. The company will publish the Board
decision on the possible second dividend payment separately, and at
the same time confirm the pertinent record and payment dates.
No material changes have taken place in the financial position of
the company since the end of the financial year. The liquidity of the
company is good, and the proposed distribution of profits does not
compromise the financial standing of the company as perceived by
the Board of Directors.
Notice to the Annual General Meeting will be published the week
commencing April 1, 2024.
Helsinki, February 6, 2024
Nokian Tyres plc
Board of Directors
In the Heavy Tyres business, the focus is on expanding capacity and
strengthening distribution in Central Europe and North America.
Widening product portfolio and enhanced digital capabilities
support long-term growth. Vianor’s excellent distribution capabilities
strengthen Nokian Tyres’ strong position in the Nordics.
In 2023, the company continued its strategic investments to
increase capacity at the factories in Finland and in the US, and began
work on building a new passenger car tire factory in Romania. The
construction work at the world’s first zero CO2 emission tire factory
in Romania is proceeding as planned and the factory will start to
support sales from 2025 onwards. To supplement own production,
the first contract manufacturing products were introduced to
the Central European market in the latter part of 2023. Contract
manufacturing brings flexibility to meet the demand.
Nokian Tyres’ competitive position is based on its ability to
continually develop new, innovative and sustainably manufactured
products. In 2023, Nokian Tyres invested ~2% of net sales in R&D. In
2023, the company launched several upgraded tires for passenger
and SUV cars as well as for heavy tire machinery. With market
relevant product offerings and a robust innovation pipeline, Nokian
Tyres is well-positioned to meet evolving consumer expectations.
Macro trends such as the increasing number of new car models,
growing SUV and CUV penetration, and the climate change mitigation
drive demand for sustainably produced innovative tires.
Matters after the review period
Nokian Tyres informed on January 30, 2024 that the European
Commission had at the same day initiated an unannounced
inspection at Nokian Tyres plc’s headquarters in Nokia, Finland. The
European Commission has expressed its concerns that the inspected
tire manufacturing companies may have violated EU antitrust rules
that prohibit cartels and restrictive business practices. Nokian Tyres
does not have information on the outcome of the inspection, and it
cannot comment on the ongoing investigation. Nokian Tyres is fully
co-operating with the authorities.
Assumptions for 2024
Sell-in in the replacement tire market is expected to grow in 2024.
However, weak economic development in Nokian Tyres’ main markets
is expected to continue, which together with the low consumer
confidence may have a negative impact on tire demand. In heavy
tires, OEM demand may decrease due to high interest rates, which
have a negative impact on machinery investments.
After peaking in early 2023, raw material cost is expected to
moderate in 2024.
Guidance for 2024
In 2024, Nokian Tyres’ net sales with comparable currencies and
segments operating profit are expected to grow significantly
compared to the previous year.
The proposal for the use of profits by
the Board of Directors
The distributable funds in the Parent company total
EUR 859.4 million.
The Board of Directors proposes to the Annual General Meeting
that the distributable funds are to be used as follows, if a maximum
amount of dividends is paid:
A dividend of
be paid out, totaling
retained in equity
Total
0.55 EUR/share
EUR 75.8 million
EUR 783.6 million
EUR 859.4 million
The Board of Directors proposes that a dividend of EUR 0.35 per
share shall be paid to the shareholders who are registered in the
shareholder register maintained by Euroclear Finland Oy on the
dividend record date of May 2, 2024. The payment date proposed
by the Board of Directors is May 15, 2024.
In addition, it is proposed that the Annual General Meeting would
authorize the Board of Directors to decide on dividend payment of
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
33
Consolidated key financial indicators
Figures in EUR million unless otherwise indicated
Net sales
change, %
Operating margin (EBITDA)1
Depreciation and amortization
Impairments2
Operating profit (EBIT)
% of net sales
Profit before tax
% of net sales
Return on equity, %
Return on capital employed, %
Total assets
Interest-bearing net debt
Equity ratio, %
Gearing, %
Net cash from operating activities
Capital expenditure
% of net sales
R&D expenditure
% of net sales
Dividends
Personnel, average during the year
* Comparative year does not include discontinued operations
1 DA in EBITDA includes impairments from 2020 onwards
2 Impairments are presented from 2020 onwards
3 The Board’s proposal to the Annual General Meeting
2023
1,173.6
-13.1%
147.0
114.9
0.0
32.1
2.7%
14.2
1.2%
-23.4%
2.2%
2,325.2
223.6
58.0%
16.6%
82.4
252.1
21.5%
24.3
2.1%
75.8 3
3,754
2022
1,350.5*
-21.2%*
170.2*
110.1*
3.4*
56.7*
4.2%*
11.2*
0.0*
-11.5%*
3.1%
2,209.7
140.9
64.9%
9.8%
-4.3
129.7
9.6%
29.6
2.2%
76.0
3,517*
2021
1,714.1
30.5%
425.6
140.5
17.0
268.2
15.6%
258.2
15.1%
13.1%
13.7%
2020
1,313.8
-17.1%
275.9
131.0
24.9
120.0
9.1%
106.0
8.1%
5.2%
6.0%
2019
1,595.8
0.0%
441.7
125.2
316.5
19.8%
336.7
21.1%
24.6%
17.6%
2018
1,595.6
1.5%
465.8
93.4
372.4
23.3%
361.7
22.7%
20.0%
23.3%
2,383.5
2,336.7
2,332.6
2,092.9
-98.7
68.4%
-6.1%
396.5
119.6
7.0%
31.9
1.9%
76.0
4,941
-17.2
65.3%
-1.1%
422.4
149.9
11.4%
22.7
1.7%
165.9
4,859
41.1
75.9%
2.3%
219.8
290.1
18.3%
22.7
1.3%
158.4
4,995
-315.2
71.0%
-21.2%
536.9
226.5
14.2%
20.8
1.3%
218.1
4,790
2017
1,572.5
13.0%
463.7
98.3
365.4
23.2%
332.4
21.1%
15.1%
22.4%
1,877.4
-208.3
78.2%
-14.2%
234.6
134.9
8.6%
21.8
1.4%
214.2
4,630
2016
1,391.2
2.3%
395.2
84.7
310.5
22.3%
298.7
21.5%
18.7%
19.9%
1,975.7
-287.4
73.8%
-19.7%
364.4
105.6
7.6%
20.3
1.5%
208.0
4,433
2015
1,360.1
-2.1%
378.6
82.6
296.0
21.8%
274.2
20.2%
19.6%
20.3%
1,754.8
-209.7
70.8%
-16.9%
283.4
101.7
7.5%
18.7
1.4%
202.0
4,421
2014
1,389.1
-8.7%
398.5
89.8
308.7
22.2%
261.2
18.8%
16.0%
19.2%
1,797.0
-164.6
67.5%
-13.6%
323.4
80.6
5.8%
16.6
1.2%
193.5
4,272
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
34
Per share data
Earnings per share, EUR
change, %
Earnings per share (diluted), EUR
change, %
Earnings per share continuing operations, EUR
change, %
Earnings per share discontinued operations, EUR
change, %
Cash flow per share, EUR
change, %
Dividend per share, EUR
Dividend payout ratio, %
Equity per share, EUR
P/E ratio
Dividend yield, %
Market capitalization Dec 31
Number of shares during the year, average, million units
diluted, million units
Number of shares Dec 31, million units
Number of shares entitled to a dividend, million units
2023
-2.36
85.8%
-2.36
85.8%
0.09
-17.9%
-2.45
77.5%
0.60
-2,020.0%
0.55 3
-23.3% 3
9.77
-3.5
6.7% 3
1,147.5
137.98
137.98
137.87
137.87
2022
-1.27
-185.1%
-1.27
-185.1%
0.11
0.0%
-1.38
0.00
-0.03
-101.1%
0.55
-43.3%
10.37
-7.5
5.7%
1,330.9
138.25
138.25
138.25
138.25
2021
1.49
140.2%
1.49
140.2%
2.87
-6.0%
0.55
88.5%
11.78
22.3
4.0%
4,626.1
138.22
138.22
138.22
138.22
2020
0.62
-78.5%
0.62
-78.5%
3.05
-21.5%
1.20
192.9%
11.01
46.4
4.2%
2019
2.89
78.1%
2.89
35.2%
3.89
-0.7%
1.14
39.5%
12.76
8.9
4.5%
2018
2.15
32.4%
2.14
32.5%
3.91
127.2%
1.58
73.9%
10.79
12.5
5.9%
4,003.7
3,560.6
3,702.9
138.46
138.46
138.22
138.22
138.17
138.38
138.72
138.92
137.26
138.14
137.79
138.07
2017
1.63
-13.0%
1.61
-13.2%
1.72
-36.3%
1.56
96.7%
10.74
23.3
4.1%
5,188.7
136.25
137.28
136.75
137.28
2016
1.87
3.6%
1.86
3.2%
2.70
27.4%
1.53
82.6%
10.75
19.0
4.3%
2015
1.80
15.1%
1.80
15.0%
2.12
-12.7%
1.50
83.9%
9.24
18.4
4.5%
2014
1.56
12.9%
1.56
12.9%
2.43
1.4%
1.45
92.9%
9.07
13.0
7.1%
4,814.0
4,458.3
2,708.1
134.86
135.56
135.68
135.93
133.63
133.74
134.39
134.69
133.16
135.10
133.17
133.47
Strategy Review Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
35
Consolidated key financial indicators
Definitions
Return on equity, % =
Return on capital
employed, % =
Equity ratio, % =
Gearing, % =
Profit for the period x 100
Total equity (average)
Profit before tax + interest and other financial expenses x 100
Total assets (average) - non-interest-bearing debt
Total equity x 100
Total assets - advances received
Interest-bearing net debt x 100
Total equity
Earnings per share, EUR =
Profit for the period attributable to the equity holders of the parent
Average adjusted number of shares1 during the year
Earnings per share (diluted2), EUR =
Profit for the period attributable to the equity holders of the parent
Average adjusted and diluted2 number 1 of shares during the year
Cash flow per share, EUR =
Cash flow from operations
Average adjusted number of shares1 during the year
Dividend per share, EUR =
Dividend for the year
Number of shares entitled to a dividend
Dividend payout ratio, % =
Dividend for the year x 100
Net profit
Equity per share, EUR =
Equity attributable to equity holders of the parent
Adjusted number of shares1 on the balance sheet date
P/E ratio =
Share price, Dec 31
Earnings per share
Dividend yield, % =
Dividend per share
Share price, Dec 31
1 Without treasury shares
2 The share options affect the dilution as the average share market price for the financial year exceeds the defined subscription price
A P R E M I U M B R A N D I S B U I LT
O N T R U S T. I N O U R W O R K ,
T R U S T I S F O U N D E D O N T H E
R E L E N T L E S S C O N T R I B U T I O N
O F E V E R Y N O K I A N T Y R E S
T E A M M E M B E R .
Matt i Mo rr i, Techn ica l Cus tome r
Rel at ions Mana ger
F I N A N C I A L
S TAT E M E N T S
This report is a translation.
The original Finnish is the authoritative version.
M A D E FO R D E M A N D I N G C O N D I T I O N S
Consolidated financial statements
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
37
Consolidated income statement, IFRS
EUR million
Net sales
Cost of sales
Gross profit
Other operating income
Selling, marketing and R&D expenses
Administration expenses
Other operating expenses
Operating profit
Financial income
Financial expenses
Result before tax
Tax expense
Result for the period, continuing operations
Result for the period, discontinued operations
Result for the period
Attributable to:
Equity holders of the parent
Earnings per share (EPS) for the profit attributable to
the equity holders of the parent:
Basic, euros
Diluted, euros
Continuing operations, euros
Discontinuing operations, euros
Note
1
3, 7, 8
4
7, 8
6, 7, 8
5, 7, 8
9
10
11
2
12
2023
1,173.6
-932.5
241.1
3.7
-143.1
-71.1
1.4
32.1
68.5
-86.3
14.2
-1.7
12.5
-338.0
-325.5
2022*
1,350.5
-1,048.1
302.4
0.9
-165.6
-79.7
-1.3
56.7
241.1
-286.6
11.2
4.1
15.2
-190.8
-175.5
-325.5
-175.5
-2.36
-2.36
0.09
-2.45
-1.27
-1.27
0.11
-1.38
EUR million
Note
2023
2022*
Consolidated statement of comprehensive income
Result for the period
-325.5
-175.5
Other comprehensive income, items that may be
reclassified subsequently to profit and loss, net of tax
Gains/losses from hedge of net investment in foreign
operations
Cash flow hedges
Translation differences on foreign operations
Reclassification of discontinued operations translation
differences
Total other comprehensive income for
the period, net of tax
Total comprehensive income for the period
Total comprehensive income attributable to:
Equity holders of the parent
11
11
* The result of discontinued operations for comparative year 2022 is restated.
-
-8.9
-33.5
366.3
323.8
-1.7
-1.7
6.8
9.0
36.7
-
52.4
-123.1
-123.1
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
38
Consolidated statement of financial position, IFRS
EUR million
Assets
Non-current assets
Property, plant and equipment
Right of use assets
Goodwill
Other intangible assets
Investments in associates
Non-current financial investments
Other receivables
Deferred tax assets
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Total assets
Note
2023
2022
EUR million
Note
2023
2022
Equity and liabilitites
Equity attributable to equity holders of the parent
23, 24
Share capital
Share premium
Treasury shares
Translation reserve
Fair value and hedging reserves
Paid-up unrestricted equity reserve
Retained earnings
25.4
181.4
-16.7
-16.7
1.6
238.2
934.3
1,347.6
25.4
181.4
-16.6
-349.5
10.5
238.2
1,343.6
1,433.1
Total equity
1,347.6
1,433.1
13
15
14
14
17
17
16, 18
19
20
21, 29
22
1
885.2
124.7
62.3
13.8
0.1
2.9
14.1
55.0
1,158.1
471.7
273.0
7.6
414.9
1,167.1
775.0
123.8
63.2
15.6
0.1
3.0
14.4
23.5
1,018.5
529.9
387.3
15.0
259.0
1,191.2
Liabilities
Non-current liabilities
Deferred tax liabilities
Interest-bearing liabilities
2,325.2
2,209.7
Other liabilities
Changes in net working capital arising from operative business are partly covered by EUR 500 million
domestic commercial paper program.
Interest-bearing liabilities include EUR 91.6 million of non-current and EUR 38.7 million of current
lease liabilities.
Current liabilities
Trade and other payables
Current tax liabilities
Provisions
Interest-bearing liabilities
Total liabilities
19
27, 29
28
26
27, 29
1
26.7
495.6
0.5
522.7
306.5
3.8
1.8
142.9
454.9
977.6
17.4
201.1
0.8
219.4
344.5
4.1
9.9
198.8
557.2
776.6
Total equity and liabilities
2,325.2
2,209.7
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
39
Consolidated statement of cash flows, IFRS
Note
7
9, 10
11
EUR million
Result for the period
Result for the discontinued operations
Adjustments for
Loss on sale of discontinued operations
Depreciation, amortization and impairment
Financial income and expenses
Gains and losses on sale of intangible assets, other changes
Income taxes
Cash flow before changes in working capital
Changes in working capital
Current receivables, non-interest-bearing, increase (-) / decrease (+)
Inventories, increase (-) / decrease (+)
Current liabilities, non-interest-bearing, increase (+) / decrease (-)
Changes in working capital
Financial items and taxes
Interest and other financial items, received
Interest and other financial items, paid
Income taxes paid
Financial items and taxes
Cash flow from operating activities (A)
2023
12.5
-338.0
335.6
114.9
17.9
0.8
1.7
145.4
-4.0
-40.5
1.0
-43.5
10.8
-21.0
-9.3
-19.5
82.4
2022
15.2
-190.8
-
310.6
30.2
136.3
29.2
330.8
-93.9
-93.4
-69.8
-257.1
3.5
-15.2
-66.2
-78.0
-4.3
EUR million
Note
2023
2022
Cash flows from investing activities
Cashflow from discontinued operations
Acquisitions of property, plant and equipment and intangible
assets
Proceeds from sale of property, plant and equipment and
intangible assets
Acquisitions of Group companies
Other cash flow from investing activities
Cash flows from investing activities (B)
Cash flow from financing activities:
Purchase of treasury shares
Change in current financial receivables, increase (-) / decrease (+)
Change in non-current financial receivables, increase (-) / decrease (+)
Change in current financial borrowings, increase (+) / decrease (-)
Change in non-current financial borrowings, increase (+) / decrease (-)
Payment of lease liabilities
Dividends received
Dividends paid
Cash flow from financing activities (C)
199.2
-
13, 14
-252.2
-125.2
2
23
0.3
-
0.0
2.0
-4.5
0.7
-52.7
-126.9
4.4
1.2
0.0
-161.3
398.8
-41.2
0.0
-72.1
129.8
0.0
-0.4
1.0
161.4
-26.9
-40.4
0.0
-89.7
5.1
Change in cash and cash equivalents, increase (+) / decrease (-) (A+B+C)
159.5
-126.2
Cash and cash equivalents at the beginning of the period
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the period
22
259.0
-3.6
414.9
385.9
-0.7
259.0
During the year 2023 loan payments were EUR 161.3 million and the new loans taken were EUR 398.8 million.
In comparative year 2022 the result from discontinued operations was EUR -190.8 million and the cash flow
from operating activities included EUR -19.4 million of cash flow.
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Consolidated statement of changes in equity, IFRS
Equity attributable to equity holders of the parent
EUR million
Equity, Jan 1, 2022
Result for the period
Other comprehensive income, net of tax:
Cash flow hedges
Net investment hedge
Translation differences
Total comprehensive income for the period
Dividends paid
Acquisition of treasury shares
Share-based payments
Other changes
Total transactions with owners for the period
Equity, Dec 31, 2022
Equity, Jan 1, 2023
Result for the period
Other comprehensive income, net of tax:
Cash flow hedges
Net investment hedge
Translation differences
Total comprehensive income for the period
Dividends paid
Acquisition of treasury shares
Share-based payments
Other changes
Total transactions with owners for the period
Equity, Dec 31, 2023
Note
Share
capital
25.4
Share
premium
181.4
Treasury
shares
Translation
reserve
-17.6
-393.0
23
24
19
23
24
25.4
25.4
181.4
181.4
25.4
181.4
-
1.0
1.0
-16.6
-16.6
-4.4
4.3
-0.1
-16.7
Fair value
and
hedging
reserves
1.6
9.0
9.0
10.5
10.5
-8.9
-8.9
6.8
36.7
43.5
-349.5
-349.5
-
332.8
332.8
Paid-up
unrestricted
equity
reserve
238.2
Retained
earnings
1,591.5
-175.5
238.2
238.2
-175.5
-76.0
-5.9
9.5
-72.4
1,343.5
1,343.5
-325.5
-325.5
-76.0
-5.1
-2.6
-83.7
934.6
-16.7
1.6
238.2
Total
equity
1,627.6
-175.5
9.0
6.8
36.7
-123.1
-76.0
-
-4.9
9.5
-71.4
1,433.1
1,433.1
-325.5
-8.9
-
332.8
-1.7
-76.0
-4.4
-0.8
-2.6
-83.8
1,347.6
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Accounting policies for the consolidated
financial statements
Basic information
Nokian Tyres plc is a Finnish public corporation founded in
accordance with the Finnish laws and domiciled in the city of Nokia.
The shares of Nokian Tyres plc have been quoted on Nasdaq Helsinki
since 1995. Nokian Tyres Group develops and manufactures summer,
winter and all-season tires for passenger cars and vans as well as
special tires for heavy machinery. The Group also manufactures
retreading materials and retreads tires. The largest and most
extensive tire retail chain in the Nordic countries, Vianor, is a part
of the Group. The core business units in the Group are Passenger
Car Tyres, Heavy Tyres, and Vianor. The Board of Directors of Nokian
Tyres plc has approved the financial statements for publication at
its meeting on February 6, 2024. In accordance with the Finnish
Limited Liability Companies Act, the shareholders can approve or
reject the financial statements or make a decision on altering the
financial statements in the Annual General Meeting arranged after
its publication. A copy of the consolidated financial statements is
available from the company’s headquarters at Pirkkalaistie 7, 37100
Nokia and at www.nokiantyres.com.
Basis of preparation
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards
and in compliance with the IAS and IFRS standards as well as the
SIC and IFRIC interpretations in force on December 31, 2023. The
International Financial Reporting Standards refer to the standards
and related interpretations to be applied within the Community as
provided in the Finnish Accounting Act and the provisions issued on
the basis of this Act, and in accordance with the procedure laid down
in Regulation (EC) No. 1606/2002 of the European Parliament and of
the Council on the application of international accounting standards.
The notes to the consolidated financial statements comply with the
Finnish accounting and corporate laws.
The information in the financial statements is presented in
millions of euros and is prepared under the historical cost convention
except as disclosed in the following accounting policies.
New and amended standards and
interpretations (IAS 8.28)
The Group applied for the first-time certain standards and
amendments, which are effective for annual periods beginning on
or after January 1, 2023 (unless otherwise stated). The Group has
not early adopted any other standard, interpretation or amendment
that has been issued but is not yet effective. Due to amendments
to IAS 1 and IFRS Practice Statement 2 the Group has revisited
the accounting policy information disclosures and in the Financial
Statements material accounting policy information is disclosed.
•
• Definition of Accounting Estimates – Amendments to IAS 8
• Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS
IFRS 17 Insurance Contracts
Practice Statement 2
• Amendments to IAS 1: Classification of Liabilities as Current or
Non-current
• Deferred Tax related to Assets and Liabilities arising from a single
•
Transaction – Amendments to IAS 12
International Tax Reform—Pillar Two Model Rules – Amendments
to IAS 12
Standards that have been issued but that
are not yet effective
The new and amended standards and interpretations relevant to
the Group that are issued, but not yet effective, up to the date of
issuance of the Group’s financial statements are disclosed below.
The Group intends to adopt these new and amended standards and
interpretations, if applicable, when they become effective.
• Amendments to IFRS 16: Lease liability measurement in a sale and
leaseback transaction (January 1, 2024)
• Supplier Finance Arrangements - Amendments to IAS 7 and IFRS
7 (January 1, 2024)
The Group is currently assessing the impact of the amendments to
determine the impact that they will have on the Group’s accounting
policy disclosures. The IFRS are under constant development. The
Group will adopt each standard and interpretation on the effective
date or from the beginning of the following financial period.
Use of estimates
The preparation of the consolidated financial statements in
accordance with the IFRS standards requires the Group management
to use estimates and assumptions that affect the amount of assets
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and liabilities shown in the statement of financial position at the time
of preparation, the presentation of contingent assets and liabilities in
the financial statements, and the amount of revenues and expenses
during the reporting period. Estimates have been used to determine
the number of items reported in the financial statements, measure
assets (Notes 13,14,15), test goodwill and other assets for impairment
(Note 15), and for the future use of deferred tax assets (Note 19).
The estimates made in the context of the preparation of financial
statements are based on the management’s best judgment at the
end of the reporting period. The realization of the estimates and
assumptions is continuously monitored. Estimates requiring the
management’s judgment are related to the depreciation of assets.
The write-downs and management estimates are described in more
detail in Note 14.
The group follows the IFRS 16 standard’s guidelines when
determining lease periods. For lease contracts that have been
defined as valid until further notice, an expected lease term pursuant
to the management’s judgment is applied. The determination of
the expected lease term considers the financial impacts of any
sanctions included in the lease contracts, such as sanctions related
to the early termination of the contract. Options for extending and
terminating the lease term have been considered when determining
the length of the lease term, pursuant to the guidelines of the
standard. The extension option is counted into the lease term if it is
reasonably certain that the option will be used and, correspondingly,
if it is reasonably certain that the option to terminate will not be
used, the term covered by the option is counted into the lease term.
Whenever a contract contains a lease component and a non-lease
component, the group separates the non-lease components, such as
maintenance, services, etc. using the separate prices that are listed
in the lease contracts or on the basis of an estimate. If the lease
term is valid until further notice, the management’s judgment will be
applied and, accordingly, the contracts will be booked for three years.
The company’s risks include strategic, operational, and financial
risks. The key risks included in the estimates include the country risk
as well as the risks related to the challenging tire pricing environment
related to the development of raw material prices. The risks are
regularly monitored and assessed as part of the risk management
program. The most material risks are presented in Note 33.
By the time of the approval of the financial statements,
the company is not aware of such major sources of estimation
uncertainty at the end of the reporting period nor of such key
assumptions concerning the future that might have a significant risk
of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year except for what has been
disclosed in Note 14.
Decisions based on management
judgment
The management has exercised separate judgment as regards the
recognition of the cloud service deployment costs, as was assessed
in the meeting of the recognition criteria under the decision issued
by IFRIC in spring 2021. The company’s management estimated the
completed and current cloud service contracts and determined that
the amount of recognized deployment costs is minor in comparison
to the carrying amount of the entire group’s intangible assets. The
commissioning costs for cloud services will be recognized when
the company is able to specify the recognized commodity and the
commodity is under the company’s control.
The material part of the company’s sales consists of standard
sales of goods between companies, where invoicing occurs
with standard terms upon goods delivery, and which involves
no substantial need for estimates. However, the company’s
management has exercised judgment when estimating the time
when control over the product is transferred away from the company
under reseller agreements.
The management has set climate goals for the company, which
are taken into account in the preparation of the consolidated
financial statements, for example in impairment testing and in
depreciation times and accounting values of intangible and tangible
fixed assets. The management follows the possible impacts of
climate change to the risks and opportunities of the business
focusing on i.a. product portfolio, purchase of raw-materials, energy,
logistics and product development. Currently, these do not have a
material impact on the preparation of the financial statements.
During the 2022 fiscal year, the company announced that it will
invest in new production capacity in Europe. The new factory to be
built in Romania in 2023–2025 is the industry’s first carbon dioxide-
free factory. The group’s climate work steering group supervises
and monitors the progress of the group’s work aimed at reducing
greenhouse gas emissions.
Principles of consolidation
The consolidated financial statements include the financial
statements of the parent company Nokian Tyres plc as well as all the
subsidiaries in which the Parent company owns, directly or indirectly,
more than 50% of the voting rights or in which the Parent company
otherwise exercises control. Control exists when the Group, through
participation in an investee, is exposed or entitled to its variable
returns and is able to affect the returns through exercising power
over the investee.
Associated companies in which the Group has 20% to 50% of
the voting rights and in which it exercises significant influence,
but not control, have been consolidated using the equity method.
If the Group’s share of the associated company’s losses exceeds
its holding in the associated company, the carrying amount will be
recorded in the statement of financial position at nil value. Losses in
excess of that value will be ignored unless the Group has obligations
toward the associated companies. Investments in associates include
the carrying amount of the investment in an associated company
according to the equity method, and any possible other non-current
investments in the associated company, which are, in substance, part
of a net investment in the associated company. The Group has no
associated companies at the end of financial year 2022 or 2023.
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When a subsidiary is divested fully or in part, the related
accumulated conversion differences are brought from equity to the
income statement and entered as a gain or loss on the sale.
Operating result
The Group has defined operating result as follows: operating result is
the net sum of net sales plus other operating income less the cost of
sales, selling, marketing and R&D expenses, administration expenses,
and other operating expenses. Operating result does not include
exchange rate gains or losses. When the operating result is positive,
the term operating profit can be used.
A joint arrangement refers to a contractual undertaking, in which
the Group has agreed to share control over material financial and
business principles with one or more parties. A joint arrangement
is either a joint operation or a joint venture. In a joint venture, the
Group holds rights to the net assets of the arrangement, whereas
in a joint operation, the Group holds rights to the assets and carries
obligations on the liabilities of the arrangement. Nokianvirran Energia
Oy is a joint operation as the parties share control according to a
specific Mankala principle where the company is not intended to
make profit while the parties have agreed to utilize the total output.
Nokianvirran Energia Oy is accounted for as a Group company using
the proportionate consolidation method on each row according to
the 32.3% shareholding.
The acquired subsidiaries have been consolidated using the
acquisition method, according to which the acquired company’s
assets and liabilities are measured at fair value on the date of
acquisition. The cost of goodwill is the excess of the cost of the
business combination over the acquirer’s interest in the net fair
value of the identifiable assets, liabilities and contingent liabilities.
Acquisition-related costs, except for the costs to issue debt or
equity securities, are expensed. Possible contingent consideration is
measured at fair value on the date of acquisition and is classified as a
liability. Contingent consideration classified as a liability is measured
at fair value on each reporting date and the following gain or loss
is recognized in the income statement. Under IFRS, goodwill is not
amortized but is rather tested annually for impairment. Subsidiaries
acquired during the financial year have been consolidated from the
acquisition date and those divested until the divestment date.
All internal transactions, receivables, liabilities, and unrealized
margins as well as the distribution of profits within the Group are
eliminated while preparing the consolidated financial statements.
Russian subsidiaries were sold during 2023 and were classified
as discontinued operations. The result of comparative year 2022
is restated. The balance sheet is not restated for comparative year
2022.
Foreign currency items
Transactions in foreign currencies have been recorded at the
exchange rates effective on the transaction date. In the statement
of financial position, all items in foreign currencies unsettled on
the reporting date are measured at the European Central Bank’s
closing exchange rate. The quotations of the relevant central bank
are applied if the European Central Bank does not quote a specific
currency. As the European Central Bank suspended the quotation
of the ruble exchange rate in March 2022 the Group started using
the WM/Refinitiv FX benchmark rate for the ruble. Foreign exchange
gains and losses related to business operations and financing
activities have been recorded under financial income and expenses.
Foreign Group companies
The statements of the financial position of foreign subsidiaries
have been converted into euros using the European Central Bank’s
closing rates, and the monthly income statements use the average
rate for the period. As the European Central Bank suspended the
quotation of the ruble exchange rate in March 2022 the Group
started using the WM/Refinitiv FX benchmark rate for the ruble.
The conversion differences arising from the subsidiaries’ income
statements and statements of financial position have been recorded
under other comprehensive income and in the conversion reserve
within equity as a separate item. The conversion differences arising
from the elimination of foreign company acquisition cost and from
the profits and losses incurred after the acquisition have been
recorded under other comprehensive income as a separate item and
in the translation reserve within equity. If the settlement of a loan
to a foreign operation is neither planned nor likely to occur in the
foreseeable future, then the loan is considered as a net investment in
a foreign operation and the foreign exchange gains and losses arising
on the item are recognized in other comprehensive income and
accumulated in the translation reserve in equity.
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Notes to the consolidated financial statements
1. Net sales and operating segments
Accounting policies
Revenue recognition
The Nokian Tyres Group develops and manufactures summer,
winter and all-season tires for passenger cars and delivery vehicles
as well as special tires for heavy machinery. The group includes
the tire retail chain Vianor. The group manufactures retreading
materials and performs tire retreading. The group’s business units
are Passenger Car Tyres, Heavy Tyres, and Vianor. The chosen
business structure describes, for example, the different nature
of the sales revenue from the business units and the cyclical
nature of their operations. Geographical areas provide further
information on the regional magnitudes of the business functions
and the various uncertainties contained within the market. The
company is managed through the aforementioned business units
and geographical areas.
The company’s performance obligation is met and the
recognition as income is made when a product or service is
delivered. The sales of services and products create separate
performance obligations. The material part of the company’s net
sales consists of standard B2B sales of goods, where invoicing
occurs with standard terms upon goods delivery. Income for the
sales of products is booked when the material risks and benefits
related to the ownership of goods, their right of possession, and
actual control have been transferred to the buyer in accordance
with the terms of contract, and when the payment is probable. Net
sales also include the sale of services to a small extent. Income
from services is booked once the services have been performed.
The company’s business is not characterized by overdue
recognition; instead, there is one performance obligation that
corresponds to a single recognition date. Invoicing occurs with
standard terms upon goods delivery.
Revenue for both products and services is reported under
net sales. Even the longest payment terms are a maximum of
12 months. Therefore, the financing component has not been
separately indicated. Refunds have a minor impact on the financial
statements. The company mainly operates in the replacement
tire market, where product refund practices may differ from the
original equipment market. As a rule, the contract templates
that are widely employed by the group do not allow for returning
products that have already been sold at the customer’s initiative,
unless the delivery is defective or a separate provision for this has
been made in the specific contract.
Refunds and other factors affecting the selling price are
monitored when determining the trading price. When calculating
net sales, sales income is adjusted with indirect taxes and
discounts. The company mainly sells tires to its own direct
customers, granting them volume-based discounts. When
recognizing goods, the company considers the discounts given
to customers. During the financial year, the estimate is based on
customers’ estimates on future volumes and, on the other hand,
on volumes that have already been realized. At the time of the
closing of the financial statements, the discount is based on the
realized volume at that time.
Advances from customers are not a material item as regards
the financial statements or when compared to sales. Invoiced sales
discounts are booked as refunds for trade receivables. Advances
received from customers are not booked as trade receivables but
instead as debts.
The products sold by the company have a standard warranty
period. Furthermore, in limited markets, a so-called Hakka
Guarantee is offered for select Hakka products that covers tire
punctures not covered by the standard warranty.
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Operating segments
2023
EUR million
Passenger
Car Tyres
Heavy Tyres
Vianor
Other
operations and
eliminations
Net sales from external customers
602.7
223.0
The Group’s Management Team is the chief operating decision
maker. The segment information is presented in respect of the
business and geographical segments. Business segments are based
on the internal organization and financial reporting structure.
Segment performance is evaluated based on operating result and is
measured consistently with profit or loss in the consolidated financial
statements.
The business segments comprise of entities with assets and
operating activities providing products and services. The segments
are managed as separate entities.
Pricing of inter-segment transactions is based on current market
prices and the terms of evaluating profitability and resources
allocated to segments are based on profit before interests and taxes.
Segment assets and liabilities include items directly attributable
to a segment and items that can be allocated on a reasonable basis.
The unallocated items contain tax and financial items together
with joint Group resource items. Capital expenditure comprises of
additions to intangible assets and property, plant and equipment
used in more than one period.
Business segments
Passenger Car Tyres business unit covers the development and
production of summer, winter and all-season tires for cars and vans.
Heavy Tyres business unit comprises tires for forestry machinery,
special tires for agricultural machinery, tractors and industrial
machinery as well as retreading and truck tire business.
Vianor tire chain sells car and van tires as well as truck tires. In
addition to Nokian Tyres brand, Vianor sells other leading tire brands
and other automotive products and services.
Other operations and eliminations contain business development
and Group management unallocated to the segments and
eliminations between different business segments.
Services
Sales of goods
Inter-segment net sales
Net sales
Operating result
% of net sales
Financial income and expenses
Profit before tax
Tax expense
Profit for the period
Assets
Unallocated assets
Total assets
Liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Depreciation and amortization
Impairment
Other non-cash expenses
602.7
50.7
653.4
4.1
0.6%
223.0
34.2
257.1
32.8
12.8%
343.2
83.6
259.6
0.8
344.0
3.4
1.0%
4.8
4.8
-85.7
-80.9
-8.2
10.2%
1,364.9
206.3
217.4
34.2
200.0
49.6
44.2
7.0
226.8
73.5
-
-1.0
8.8
11.3
-
2.5
7.7
25.6
-
0.7
8.8
4.5
-
-0.3
Group
1,173.6
83.6
1,090.1
1,173.6
32.1
2.7%
-17.8
14.2
-1.7
12.5
1,822.8
502.4
2,325.2
300.9
676.8
977.6
252.1
114.9
-
1.9
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2022*
EUR million
Passenger
Car Tyres
Heavy Tyres
Vianor
Other
operations and
eliminations
Net sales from external customers
746.7
233.2
Services
Sales of goods
Inter-segment net sales
Net sales
Operating result
% of net sales
Financial income and expenses
Profit before tax
Tax expense
Profit for the period
Assets
Unallocated assets
Total assets
Liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Depreciation and amortization
Impairment
Other non-cash expenses
746.7
64.0
810.7
23.3
2.9%
233.2
37.8
271.0
39.5
14.6%
361.1
93.3
267.8
0.9
362.0
2.8
0.8%
9.5
9.5
-102.7
-93.2
-9.0
9.7%
1,439.4
194.2
215.5
34.3
245.9
54.3
48.2
4.0
105.6
65.2
0.6
7.6
7.0
13.3
0.2
1.3
7.5
27.5
0.0
0.8
9.9
4.2
2.5
2.3
Group
1,350.5
93.3
1,257.2
1,350.5
56.7
4.2%
-45.5
11.2
4.1
15.2
1,883.4
326.3
2,209.7
352.4
424.2
776.6
129.9
110.1
3.4
12.0
* The comparative information of discontinued operations result in the income statement for 2022 is restated.
The balance sheet for comparative period 2022 is not restated.
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Notes concerning geographical segments
The business segments are operating in four geographic regions:
Nordics, Other Europe, Americas and other countries. Other contains
items that are not allocated to any geographic region. In presenting
information on the basis of geographical segments, segment
revenue is based on the location of the customers and segment
assets are based on the location of the assets.
Geographical information
2023
EUR million
Net sales
Services
Sales of goods
Assets
Unallocated assets
Total assets
Nordics
Other Europe
Americas Other countries
Other
671.7
83.6
588.2
226.0
-
226.0
268.7
-
268.7
993.3
277.5
561.2
7.2
-
7.2
0.3
-
-
-
-9.4
Group
1,173.6
83.6
1,090.1
1,822.8
502.4
2,325.2
Capital expenditure
79.9
104.9
67.2
-
-
252.1
2022*
EUR million
Net sales
Services
Sales of goods
Assets
Unallocated assets
Total assets
Nordics
Other Europe
Americas Other countries
Other
722.3
93.3
629.0
302.8
-
302.8
314.6
-
314.6
10.6
-
10.6
-
-
-
962.8
161.5
507.2
268.5
-16.6
Group
1,350.5
93.3
1,257.2
1,883.4
326.3
2,209.7
Capital expenditure
70.0
39.0
16.4
4.5
-
129.9
* The comparative information of discontinued operations result in the income statement for 2022 is restated.
The balance sheet for comparative period 2022 is not restated.
2. Acquisitions and disposals
Accounting policies
Non-current assets held for sale and
discontinued operations
A non-current asset, or a group of disposable items, is
classified as being held for sale if the amount corresponding
to its carrying amount will primarily be generated from
the sale of the asset instead of being generated from the
continued use of the asset. Non-current assets held for sale,
and assets related to discontinued operations, are measured
at their carrying amounts, or the lower fair value less the
costs to sell, if the amount corresponding to its carrying
amount will primarily be generated from the sale of the asset
and if the sales transaction is most likely to take place.
A discontinued operation is a part of the entity that
has been divested or classified as being held for sale and
represents a separate core business area or a geographic
operating area. The result for the period of discontinued
operations is presented as a separate item in the income
statement and the comparative information in the income
statement is restated accordingly.
The Group’s financial statements for 2023 and 2022 do
not include any non-current assets held for sale.
Strategy Review
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48
Acquisitions and disposals in 2023
In March 2023, Nokian Tyres plc announced the completion of the
sale of its operations in Russia to PJSC Tatneft, after which all Nokian
Tyres’ operations in Russia ended and the company’s personnel in
Russia was transferred to the new owner. The closing date of sale
transaction of Russian operations is considered to be March 16, 2023,
when the sale price was received. Sale of Kazakhstan operations was
also signed during March 2023. Sale of transaction does not include
any post-deal conditional terms. The sold operations were part of
the Passenger Car Tyres business segment.
Starting from March 1, 2023, Russian and Kazakhstan subsidiaries
profit and loss were classified as discontinued operation. The result
of 2023 and restated 2022 figures for Russian and Kazakhstan
subsidiaries are presented below:
Discontinued operations
EUR million
Net sales
Operating expenses
Operating profit
Net financial items
Result before tax, discontinued operations
Tax expense
Result for the year, discontinued operations
Profit from sale
Loss from sale – translation differences
Result for the period, discontinued operations
Earnings per share from the result attributable
to the equity holders of the parent:
Basic, euros
Diluted, euros
Continuing operations, euros
Discontinuing operations, euros
1–3
2023
13.5
-16.4
-2.9
-0.5
-3.4
1.2
-2.2
29.6
-366.3
-338.9
1–3
2023
-2.59
-2.59
-0.14
-2.45
4–6
2023
7–9
2023
10–12
2023
1–12
2023
1–3
2022
4–6
2022
-
-
-
-
-
-
-
1.0
-
1.0
-
-
-
-
-
-
-
0.0
-
0.0
-
-
-
-
-
-
-
-0.1
13.5
-16.4
-2.9
-0.5
-3.4
1.2
-2.2
30.5
-
-366.3
93.5
149.8
-56.4
-400.0
37.1
0.9
-250.2
19.4
38.1
-230.8
-6.1
-29.7
31.9
-260.5
-
-
-
-
7–9
2022
132.7
-83.4
49.3
-3.6
45.7
-10.6
35.1
-
-
10–12
2022
1–12
2022
49.6
425.6
-59.9
-599.7
-10.3
-174.1
-1.6
-11.8
13.9
15.2
-158.8
-32.5
2.1
-191.3
-
-
-
-
-0.1
-338.0
31.9
-260.5
35.1
2.1
-191.3
4–6
2023
7–9
2023
10–12
2023
0.01
0.01
0.01
0.01
0.03
0.03
0.03
0.00
0.19
0.19
0.19
1–12
2023
-2.36
-2.36
0.09
1–3
2022
4–6
2022
7–9
2022
10–12
2022
1–12
2022
0.34
0.34
0.11
0.23
1.67
1.67
0.21
-1.88
0.18
0.18
-0.08
0.25
-0.11
-0.11
-0.13
0.01
-1.27
-1.27
0.11
-1.38
0.00
-2.45
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49
Profit from sale – discontinued operations
There were no significant acquisitions during 2023.
EUR million
Sale price
Profit from sale – Parent company and
Nokian Tyres Holding Oy
Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Disposed net assets
Other group items and transactions costs
Remaining intercompany items
Profit from sale
2023
288.0
124.2
42.3
284.1
326.4
4.7
52.1
56.8
269.6
12.1
0.0
30.5
Profit from sale is adjusted by other group items e.g. bad debt
provision EUR +2.9 million and deferred tax EUR +9.4 million reversals.
On October 13, 2022 the Group acquired all shares of real estate
company Nokian Portti Oy. This acquisition has minor impact on group
accounts.
EUR million
Purchase consideration
Consideration paid in cash
Contingent consideration liability
Total consideration
2022
4.6
-
4.6
The fair values of the assets acquired, and the liabilities assumed at
the time of acquisition were as follows:
EUR million
Note
2022
Property, plant and equipment
13
Trade and other receivables
Cash and cash equivalents
Total assets
Trade and other payables
Total liabilities
Total net assets
Consideration transferred
Acquired identifiable net assets
Consideration paid in cash
Cash and cash equivalents in the subsidiaries
acquired
Net cash outflow
4.6
0.1
0.1
4.8
0.2
0.2
4.6
4.6
4.6
4.6
0.1
4.5
There were no other transactions recognized separately from these
acquisitions. The consideration has been transferred in cash and no
significant contingent consideration arrangements were included.
No non-controlling interest remained in the acquiree. The identifiable
asset acquired, and liabilities assumed are recorded in fair value.
3. Cost of sales
EUR million
Raw materials
Goods purchased for resale
Wages and social security contributions on
goods sold
Other costs
Depreciation of production
Sales freights
Warehousing
Change in inventories
Total
2023
294.5
274.2
71.6
179.0
71.4
68.4
60.8
-87.3
932.5
2022
400.9
247.9
63.2
198.0
69.0
115.0
50.0
-95.9
1,048.1
4. Other operating income
EUR million
2023
2022
Gains on sale of property, plant and
equipment
Other income
Total
0.2
3.5
3.7
1.3
-0.4
0.9
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5. Other operating expenses
7. Depreciation, amortization and impairment losses
Accounting policies
Accounting policies
Research and development costs
Property, plant, and equipment
Research costs are recognized as part of selling, marketing,
and R&D expenses for the financial period in which they
incurred.
Government grants
Grants received from governments or other parties are
recognized adjustments to the related expenses in the
income statement for the period.
EUR million
2023
2022
Losses on sale and disposals of tangible
fixed assets
Expensed credit losses and provisions
Other expenses
Total
6. Auditor’s fees
EUR million
Audit fee
Tax services
Other services
Total
0.0
-1.8
0.3
-1.4
0.0
3.1
-1.8
1.3
2023
2022
1.1
0.0
0.0
1.1
1.0
0.0
0.1
1.1
Ernst & Young Oy has been the company´s principal auditor since
March 30, 2021.
Depreciation is based on the following expected useful lives:
Buildings
Machinery and equipment
Other tangible assets
Land is not depreciated.
20–40 years
4–20 years
10–40 years
The expected useful lives are reviewed at each reporting date,
and if they differ materially from previous estimates, the
depreciation schedules are changed accordingly.
Research and development costs
Development costs are capitalized once certain criteria
associated with commercial and technical feasibility have
been met. Capitalized development costs primarily comprising
materials, supplies, and direct labor costs as well as the related
overheads are amortized systematically over their expected
useful life. The amortization period is 3–5 years.
Impairment
On the reporting date, the Group shall assess whether there
is any indication that an asset may be impaired. If any such
indication exists, the recoverable amount of the asset in question
is estimated. Goodwill and intangible assets not yet available
for use are tested for impairment at least annually. To assess
impairment, the Group’s assets are allocated to cash-generating
units on the smallest group that is largely independent of other
units and the cash flows of which can be separated.
The recoverable amount is the higher of fair value of the
asset less costs to sell and a value in use. As a rule, value in
use is based on the discounted future cash flows that the
corresponding asset or the cash-generating unit can derive.
The impairment recognized in the income statement is the
amount by which the carrying amount of the asset exceeds
the corresponding recoverable amount, and in the statement
of financial position, it is allocated first to reduce the carrying
amount of any goodwill of the unit and then pro rata against the
other assets. An impairment loss recognized in prior periods will
be reversed if the estimates used to determine the recoverable
amount change. However, a reversal of impairment loss shall not
exceed the carrying amount that would have been determined
in the statement of financial position without the recognized
impairment loss in prior periods. Impairment loss on goodwill is
not reversed under any circumstances.
Goodwill and other intangible assets
The amortization schedule for intangible assets is 3–10 years.
Strategy Review
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Depreciation and amortization by asset category
Depreciation and amortization by function
EUR million
Intangible rights
Other intangible assets
Buildings
Machinery and equipment
Right of use asset
Other tangible assets
Total
Impairment losses by asset category
EUR million
Other intangible assets
Land property
Buildings
Goodwill
Machinery and equipment
Other tangible assets
Total
2023
2022
3.7
1.0
7.5
59.3
41.4
2.2
114.9
4.6
1.1
7.7
52.7
41.3
2.8
110.1
EUR million
Production
Selling, marketing and R&D
Administration
Total
Impairment losses by function
EUR million
Production
Selling, marketing and R&D
2023
2022
Administration
-
-
-
-
-
-
-
0.0
0.0
2.3
0.0
1.1
0.0
3.4
Total
8. Employee benefit expenses
EUR million
Wages and salaries
Pension contributions – defined
contribution plans
Share-based payments
Other social security contributions
Total
2023
2022
71.4
32.8
10.7
114.9
69.0
30.3
10.8
110.1
2023
2022
-
-
-
-
2023
193.2
22.5
-4.7
21.1
0.2
-
3.2
3.4
2022
198.7
21.9
-4.6
21.5
9. Financial income
EUR million
Interest income
2023
2022
Financial assets measured at amortized cost
10.4
0.2
Dividend income
Non-current financial investments measured
at fair value through other comprehensive
income
Exchange rate gains and changes in fair
value
Financial assets and liabilities at amortized
cost
Foreign currency derivatives
Other financial income
Total
10. Financial expenses
EUR million
Interest expenses
Financial liabilities measured at amortized
cost
Interest rate derivatives designated as
hedges
0.0
0.0
31.0
26.7
0.3
68.5
133.8
106.7
0.4
241.1
2023
2022
-21.1
-2.7
2.7
-4.0
-0.5
-4.0
-38.6
-22.8
-2.6
-86.3
-142.2
-132.6
-4.7
-286.6
232.2
237.5
Lease liabilities
Information on the employee benefits and loans of the key
management personnel is presented in note 34 Related party
transactions.
Other than production wages and salaries were EUR 160.6 (174.2)
million in 2023.
Exchange rate losses and changes in fair
value
Financial assets and liabilities at amortized
cost
Foreign currency derivatives
Other financial expenses
Total
Strategy Review
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52
11. Tax expense
Accounting policies
Income taxes
The tax expense of the Group includes taxes based on the
profit or loss for the period or the dividend distribution of the
Group companies as well as any change in deferred tax, and the
adjustment of taxes from prior periods. The penalty interests
on those are recorded as financial expenses. The tax impact of
items recorded directly in equity or other comprehensive income
is correspondingly recognized directly in equity or in other
comprehensive income. The share of associated companies’
profit or loss is shown on the income statement calculated from
the net result, and it thereby includes the impact of taxes.
Nokian Tyres aims for predictability and transparency in
taxation in different countries. OECD, European Union and
changing tax legislation and reporting requirements in different
countries create challenges in taxation and tax reporting.
Complying with the reporting requirements demands continuous
system and process development as well as support from local
tax experts.
EUR million
Current tax expense
Adjustment for prior periods
Change in deferred tax
Total
2023
2022
-11.0
-0.8
10.0
-1.7
-9.1
-0.9
14.0
4.1
International business environment in nature exposes to
usual tax audits and disputes in different countries. Nokian Tyres
has established a Tax Policy and harmonized practices in the
Group’s operating countries in order to clarify responsibilities
and to reduce tax risks. Nokian Tyres does not have significant
tax disputes ongoing and no specific tax risks are identified
currently. Nokian Tyres has conducted pre-emptive discussions
with authorities in different countries in order to agree on the
taxation of its operations or changes in the corporate structure
to minimize tax risks.
Nokian Tyres is in the scope of the Pillar Two Model Rules.
Therefore, the Group applies the mandatory exception for
deferred taxes in IAS 12. Accordingly, the Group neither
recognizes nor discloses information about deferred tax assets
and liabilities arising from Pillar Two income taxes.
Nokian Tyres has undertaken an impact assessment to
understand the implications of the GloBE framework on its
business operations, including any potential changes to the tax
liabilities. Based on the impact assessment the Group determines
that it is not subject to Pillar Two “top-up” taxes.
The reconciliation of tax expense recognized in the
income statement and tax expense using the domestic
corporate tax rate (2023: 20.0%, 2022: 20.0%):
EUR million
Withholding taxes
Tax exempt revenues
Non-deductible expenses
Losses on which no deferred tax benefits
recognized
Adjustment for prior periods
Change in the recoverability of deferred tax
assets
Utilization of previously unrecognized tax
losses
Other items
Tax expense
2023
2022
-0.2
17.4
-13.9
0.0
-0.8
-6.2
0.7
0.6
-1.1
-0.9
-
-0.8
0.0
-0.3
-1.7
0.3
1.5
4.1
Income tax relating to components of other
comprehensive income:
2023
EUR million
Before
tax amount Tax benefit
Net of
tax amount
Net investment hedge
Cash flow hedges
Translation differences
on foreign operations
-
-11.2
332.8
321.6
-
2.2
2.2
-
-8.9
332.8
323.9
EUR million
Profit before tax
2023
2022
14.2
11.2
2022
EUR million
Before
tax amount Tax benefit
Net of
tax amount
Taxes calculated according to the Finnish
tax rate of 20%
Effect of deviant tax rates in foreign
subsidiaries
-2.8
-2.2
-1.1
12.1
Net investment hedge
Cash flow hedges
Translation differences
on foreign operations
8.5
11.2
36.7
56.4
-1.7
-2.2
-3.9
6.8
9.0
36.7
52.4
Strategy Review
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53
12. Earnings per share
Accounting policies
Earnings per share
Basic earnings per share are calculated by dividing the profit
or loss attributable to the equity holders of the parent
for the period by the weighted average number of shares
outstanding during the period. The average number of
treasury shares has been deducted from the number of
shares outstanding.
For the calculation of the diluted earnings per share, the
diluting impact of all potentially diluting share conversions
have been taken into account. The Group has had share
options and previously convertible bonds as diluting
instruments. At present, the Group does not have either.
The dilution of share options has been computed using the
treasury stock method. In dilution, the denominator includes
the shares obtained through the assumed conversion of the
options, and the repurchase of treasury shares at the average
market price during the period with the funds generated
by the conversion. The assumed conversion of options is
not taken into account for the calculation of earnings per
share if the effective share subscription price defined for
the options exceeds the average market price for the period.
The convertible bonds are assumed to have been traded for
company shares after the issue.
EUR million
Result attributable to the equity holders of
the parent
Result for the period to calculate the diluted
earnings per share
2023
2022
-325.5
-175.5
-325.5
-175.5
Result for the period, continuing operations
12.5
15.2
Result for the period, discontinued operations
-338.0
-190.8
Shares, 1,000 pcs
Weighted average number of shares
137,982
138,247
Dilutive effect of the options
-
-
Diluted weighted average number of shares
137,982
138,247
Earnings per share, euros
Basic
Diluted
Continuing operations
Discontinued operations
-2.36
-2.36
0.09
-2.45
-1.27
-1.27
0.11
-1.38
13. Property, plant and equipment
Accounting policies
Property, plant and equipment
The values of the property, plant, and equipment acquired by
the Group companies are based on their costs. Any proceeds
from selling items produced while bringing an item of PPE
into the location and condition intended are not deducted
from the acquisition price but instead recorded in profit or
loss. The assets of acquired subsidiaries are measured at fair
value on the date of acquisition. Depreciation is calculated
on a straight-line basis from the original acquisition cost,
based on the expected useful life. Depreciation includes any
impairment losses.
In the statement of financial position, the property,
plant, and equipment are stated at cost less accumulated
depreciation and impairment losses. The borrowing costs of
the items included in property, plant, and equipment, and
requiring a substantial construction period, are capitalized
for the period needed to produce the investment for the
intended purpose. Other borrowing costs are recognized as
expenses in the period that they were incurred.
Regular maintenance and repair costs are recognized as
expenses for the period. Expenses incurred from significant
modernization or improvement projects are recorded in
the statement of financial position if the company gains
future economic benefits in excess of the originally assessed
standard of performance of the existing asset. Modernization
and improvement projects are depreciated on a straight-
line basis over their useful lives. Gains and losses from the
divestment and disposal of property, plant, and equipment
are determined as the difference of the net disposal proceeds
and the carrying amounts. Sales gains and losses are included
in the operating profit in the income statement.
Government grants
Grants received for the acquisition of property, plant, and
equipment reduce the acquisition cost.
Borrowing costs
The borrowing costs of items included in property, plant,
and equipment or other intangible assets, and requiring a
substantial construction period, are capitalized for the period
needed to produce the investment for the intended purpose.
Other borrowing costs are recognized as expenses for the
period in which they incurred. The Group has not capitalized
borrowing costs in 2023 or 2022.
Strategy Review
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54
Land
property
Buildings
Machinery
and
equipment
Other
tangible
assets
Advances
and fixed
assets under
construction
2022
Total
EUR million
Land
property
Buildings
Machinery
and
equipment
Other
tangible
assets
Advances
and fixed
assets under
construction
2023
EUR million
Accumulated cost,
Jan 1, 2023
Increase
Acquisitions through
business combinations
Decrease
Transfers between items
Other changes
Exchange differences
Accumulated cost,
Dec 31, 2023
Accum. depreciation,
Jan 1, 2023
Depreciation for the period
Impairment
Decrease
Other changes
Exchange differences
Accum. depreciation,
Dec 31, 2023
Carrying amount,
Dec 31, 2023
20.9
14.0
395.8
1,416.9
0.1
12.7
123.1
-4.4
113.4
231.8
2,070.2
254.3
-122.9
-429.4
-65.6
-2.2
-5.0
-0.1
9.3
0.0
-8.3
83.0
-10.7
-22.7
27.6
274.1
1,049.9
-1.7
-190.6
-1,028.6
1.6
-7.5
0.0
103.1
0.0
1.8
-59.1
0.0
406.7
10.5
13.7
0.7
-0.1
-2.3
51.4
-74.3
-2.2
0.0
62.4
0.1
1.8
-5.7
-91.8
0.0
-3.3
-625.8
-3.8
-10.7
-36.7
244.5
1,647.5
-1,295.2
-68.8
1.6
572.2
10.6
17.2
-762.3
0.0
-93.2
-656.9
-12.2
27.6
180.9
392.9
39.2
244.5
885.2
In 2023, the company recorded impairments in the tangible assets for EUR 0.0 (3.4 without discontinued
operations) million based on management’s assessment. The impairments are shown in the table in their own
row. In 2022 the depreciation without discontinued operations was EUR 63.2 million.
Accumulated cost,
Jan 1, 2022
Increase
Acquisitions through
business combinations
Decrease
Transfers between items
Other changes
Exchange differences
Accumulated cost,
Dec 31, 2022
Accum. depreciation,
Jan 1, 2022
Depreciation for the period
Impairment
Decrease
Other changes
Exchange differences
Accum. depreciation,
Dec 31, 2022
Carrying amount,
Dec 31, 2022
13.9
6.0
0.9
0.0
0.0
0.0
0.1
376.2
1,308.3
0.2
40.5
3.7
-0.4
0.7
-1.3
16.8
0.0
-24.6
71.5
-24.0
45.2
126.3
1.0
-
-0.1
-11.1
0.0
7.0
99.3
75.8
0.0
-0.2
-64.6
1.0
2.2
Total
1,924.0
123.5
4.6
-25.4
-3.5
-24.4
71.3
20.9
395.8
1,416.9
123.1
113.4
2,070.2
0.0
-109.7
-890.6
-1.6
-11.6
-67.0
0.3
-0.2
-2.5
-88.1
-72.2
21.6
22.9
-22.4
-52.8
-6.9
-10.7
0.1
0.0
-4.0
-1.7
-190.6
-1,028.6
-74.3
-1,053.1
-106.5
-151.5
22.1
22.7
-28.8
-1,295.2
19.3
205.2
388.3
48.8
113.4
775.0
Strategy Review
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Financial Statements
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Non-Financial Information
Remuneration
55
2023
EUR million
Goodwill
Accumulated cost,
Jan 1, 2023
78.0
Increase
Decrease
Transfers between
items
Other changes
Exchange differences
Accumulated cost,
Dec 31, 2023
Accum. depreciation,
Jan 1, 2023
Depreciation for
the period
Impairment
Decrease
Other changes
Exchange differences
Accum. depreciation,
Dec 31, 2023
Carrying amount,
Dec 31, 2023
Intangible
rights
Other
intangible
assets
90.4
0.5
-0.1
3.7
-10.1
0.0
44.3
0.3
-17.3
0.1
0.0
-0.2
Total
212.7
0.9
-17.4
3.8
-10.6
-1.1
-0.5
-0.9
76.6
84.5
27.1
188.2
-14.5
-81.4
-37.8
-133.7
-3.7
0.1
10.1
0.0
3.0
0.0
11.6
0.1
0.2
-0.7
0.0
11.7
10.4
0.2
0.3
0.0
-14.3
-74.9
-22.9
-112.1
62.3
9.6
4.2
76.1
2022
EUR million
Goodwill
Intangible
rights
Other
intangible
assets
Accumulated cost,
Jan 1, 2022
79.7
Increase
Decrease
Transfers between
items
Other changes
Exchange differences
Accumulated cost,
Dec 31, 2022
Accum. depreciation,
Jan 1, 2022
Depreciation for
the period
Impairment
Decrease
Other changes
90.4
1.0
-4.1
3.1
0.0
-0.1
39.9
1.8
-0.3
0.4
1.3
1.1
Total
210.1
2.8
-4.3
3.5
1.6
-1.0
0.3
-2.0
-0.2
78.0
90.4
44.3
212.7
-14.4
-79.2
-29.5
-123.1
-4.6
2.4
0.1
-2.5
-4.0
0.1
-1.2
-0.8
-7.1
-4.2
2.5
-1.2
-0.6
Exchange differences
0.0
Accum. depreciation,
Dec 31, 2022
Carrying amount,
Dec 31, 2022
-14.5
-81.4
-37.8
-133.7
63.2
9.0
6.5
78.7
In 2022 the depreciation without discontinued operations was EUR
5.7 million.
14. Intangible assets
Accounting policies
Goodwill and other intangible assets
Goodwill arising from business combinations is recognized
as the amount by which the aggregate of the transferred
consideration, any non-controlling interest in what has been
acquired, and any previously held interest exceeds the fair
value of the net assets acquired. Goodwill is not amortized
but is tested for impairment annually as well as whenever an
indication of possible impairment exists.
Other intangible assets include customer relationships,
capitalized development costs, patents, copyrights,
licenses, and software. Intangible rights acquired in business
combinations are measured at fair value and amortized on
a straight-line basis over their useful lives. Other intangible
assets are measured at cost and amortized on a straight-
line basis over their useful lives. An intangible asset is only
recorded in the statement of financial position if it is probable
that the expected future economic benefits that are
attributable to the asset will flow to the company and cost
can be measured reliably. Subsequent expenses related to the
assets are only recorded in the statement of financial position
if the company gains future economic benefits in excess
of the originally assessed standard of performance of the
existing asset; otherwise, costs are recognized as expenses at
the time of occurrence.
In the statement of financial position, intangible assets
are recorded at cost less accumulated amortization and
impairment losses. The borrowing costs of items included
in other intangible assets, and requiring a substantial
construction period, are capitalized for the period needed
to produce the investment for the intended purpose. Other
borrowing costs are recognized as expenses in the period that
they are incurred.
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Impairment losses
The company considers the relationship between its market
capitalization and its book value when reviewing for indicators of
impairment. As of December 31, 2023, the market capitalization EUR
1.1 million of the company was below the book value EUR 1.3 million of
its equity, indicating a potential impairment of goodwill.
No impairment losses have been booked from the intangible
assets based on the impairment tests for goodwill in 2023.
Impairment tests for goodwill
Goodwill has been allocated to the Group’s cash-generating units
that have been defined according to the business organization.
Impairment testing is performed by comparing the carrying amount
of those cash-generating units that include goodwill with their
expected recoverable amount. An impairment loss is recognized if
the recoverable amount of the cash-generating unit is less than the
carrying amount. The calculations have included the investment
in the new production capacity in Europe in accordance with the
Board of Directors’ decision. The company has committed to the
investment and the investment has been substantively commenced.
Allocation of goodwill prior tests
EUR million
Passenger Car Tyres
Heavy Tyres
Vianor
Total goodwill
Dec 31, 2023
61.4
0.9
-
62.3
The recoverable amount of a cash-generating unit is based on
calculations of the value in use. The cash flow forecasts used in
these calculations are based on five-year financial plans approved
by the management. The estimated sales and production volumes
are based on the current condition and scope of the existing assets
including the investment to the new production capacity in Europe.
The key assumptions used in the plans include product selection,
country-specific sales distribution, margin on products, and their
past actual outcomes. Assumptions are also based on commonly
used growth, demand and price forecasts provided by market
research institutes.
The discount rate used is the weighted average cost of
capital (WACC) after taxes defined for the Group. The calculation
components are risk-free rate of return, market risk premium,
industry-specific beta co-efficient, borrowing cost and the capital
structure at market value at the time of testing. The discount rate
used for Passenger Car Tyres is 8.4 (8.3) percent and for Heavy Tyres
is 8.0 (8.0) percent. Vianor has not been tested in 2023 as the whole
goodwill allocated to Vianor has been impaired in 2021. Future cash
flows after the forecast period approved by the management have
been capitalized as a terminal value using a steady two percent
growth rate and discounted with the discount rate specified above.
The assumption for the net sales growth rate has been two percent.
The sensitivity tests have been performed using net sales and gross
margin. A possible impairment would require a significant weakening
of the key assumptions from the financial plans approved by the
management. The management considers that reasonably possible
changes in key assumptions would not cause the unit’s carrying
amount to exceed its recoverable amount.
The testing indicated no need to recognize impairment losses in
Passenger Car Tyres and in Heavy Tyres. The recoverable amount in
Passenger Car Tyres considerably exceeds the carrying amount of
the cash-generating unit. The new factory investment in Europe is
increasing the amount of capital expenditure in the planning period
EUR 450.0 million. Due to the nature of the new factory investment
a significant amount of the recoverable amount of the cash flow is
generated in the terminal value. The recoverable amount in Heavy
Tyres significantly exceeds the carrying amount of the cash-
generating unit.
Allocation of goodwill after tests
EUR million
Passenger Car Tyres
Heavy Tyres
Vianor
Total goodwill
Impairment
loss
Goodwill
Dec 31, 2023
61.4
0.9
-
62.3
-
-
-
-
61.4
0.9
-
62.3
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15. Right of use assets
Accounting policies
Lease agreements
In accordance with IFRS 16, all of the assets related to lease
agreement (right-of use assets) and future lease payment
obligations (lease liabilities) are recognized in the statement of
financial position at the inception of the contract. Nokian Tyres
primarily acts as a lessee. The vast majority of leases recognized
as Right-of-use assets under IFRS 16 comprise Vianor chain real
estate and warehouses.
The group as lessee
Nokian Tyres recognizes a leased asset and the related lease
liability at the lease commencement date, except for short-term
leases and low value leases.
• A lease is considered short term if the lease term is 12 months
or less and no option included
• A lease is considered of low value if the business level
materiality thresholds are not met.
The group applies this guideline to all asset classes, with the
exception of vehicle leases, which are also recognized under IFRS
16 even if their contract term is below 12 months or the related
asset is deemed of low value.
The lease term is determined as the non-cancelable period
of the lease, taking extension and termination options into
consideration, if it is reasonably certain that the group will exercise
such options. If the lease term is indefinite (valid until further
notice), management judgment is used to estimate the expected
lease term and the indefinite contracts will be booked on the basis
of the planning period, usually for three years.
Lease liability under IFRS 16 is recorded at the commencement
date of the lease and measured at the present value of the lease
payments during the lease term. The criteria used to determine
the discount rate by lease agreement are the category of the
asset, geographical location, currency, maturity of the risk-
free interest rate, and the lessee’s credit risk premium. When
the agreement includes a lease component and a non-lease
component, Nokian Tyres separates the non-lease components,
such as maintenance or services, based on either the stand-alone
prices given in the lease agreement or by using estimates. The
lease liability is remeasured with a corresponding effect to the
related leased asset when there is a change in the future lease
payments due to contract renegotiation, index changes, or a
reassessment of options.
The leased asset consists of the initial lease liability and any
initial direct costs less any incentives granted by the lessor. It is
valued at cost less accumulated depreciation and impairment
losses. Any remeasurement is in line with the remeasurement
of the lease liability. The right-of-use asset is depreciation in a
straight-line basis over the lease term.
The Group as a lessor
The lessor will classify each lease agreement into either finance
or operating lease in accordance with the IFRS 16 standard. If the
lease transfers substantially all of the risk and rewards incidental
to the ownership of the asset, it is considered to be a finance
lease; otherwise, the lease is considered to be an operating lease.
Assets held under finance leases are recorded in the statement
of the financial position as receivables at an amount equal to the
net investment in the lease. Assets held under operating leases are
included in intangible assets and property, plant, and equipment
in the statement of the financial position. These assets are
depreciated over their useful lives, consistent with assets in the
company’s own use. Income from operating leases is recorded in
the income statement on a straight-line basis over the lease term.
From the Group’s point of view, operating as a lessor is limited.
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2023
EUR million
Accumulated cost, Jan 1, 2023
Increase
Decrease
Other changes
Exchange differences
Accumulated cost, Dec 31, 2023
Accum. Depreciation, Jan 1, 2023
Depreciation for the period
Decrease
Other changes
Exchange differences
Accum. Depreciation, Dec 31, 2023
Carrying amount, Dec 31, 2023
Land property
Buildings
Machinery and
equipment
1.2
0.2
-0.1
-
-
1.4
-0.2
-0.1
0.0
-
-
-0.3
1.1
230.9
45.0
-28.9
0.8
-6.2
241.6
-110.5
-39.7
26.7
0.0
2.6
-120.9
120.7
4.8
2.2
-2.2
-
0.0
4.8
-2.4
-1.6
2.1
-
0.0
-1.9
3.0
Total
236.9
47.5
-31.2
0.8
-6.2
247.8
-113.1
-41.4
28.8
0.0
2.6
-123.1
124.7
2022
EUR million
Accumulated cost, Jan 1, 2022
Increase
Decrease
Other changes
Exchange differences
Accumulated cost, Dec 31, 2022
Accum. Depreciation, Jan 1, 2022
Depreciation for the period
Decrease
Other changes
Exchange differences
Accum. Depreciation, Dec 31, 2022
Carrying amount, Dec 31, 2022
Land property
Buildings
Machinery and
equipment
1.5
-
-0.4
-
-
1.2
-0.2
-0.1
0.0
-
0.0
-0.2
0.9
234.3
18.3
-16.2
-
-5.5
230.9
-84.7
-39.6
10.8
-
3.0
-110.5
120.4
3.9
1.6
-0.6
-
-
4.8
-1.3
-1.6
0.6
-
0.0
-2.4
2.5
Total
239.7
19.9
-17.2
-
-5.5
236.9
-86.2
-41.3
11.5
-
3.0
-113.1
123.8
Expenses arising from leases of low-value amounted to EUR 0.2 (0.3) million and short-term leases amounted
to EUR 2.7 (4.7) million in 2023. These contracts are not included in the right of use assets. Interest expenses
from right of use assets were EUR 4.0 (4.0) million.
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16. Carrying amount and fair values of financial assets and liabilities
Accounting policies
Financial assets and liabilities
Classification of financial instruments
When recognizing a financial asset in its statement of financial
position, the Group classifies it into one of the following
measurement categories:
• Amortized cost
• Fair value through other comprehensive income
• Fair value through profit or loss.
These categories apply to subsequent measurement and profit
or loss recognition. The classification is based on the business
model for managing the asset and the contractual cash flow
characteristics of the asset.
A financial asset is classified as subsequently measured at
amortized cost when the objective is to hold financial assets to
collect contractual cash flows that are payments of principal and
interest on the principal amount outstanding. In the Group, in
principle this measurement category includes trade receivables,
loan receivables, and cash and cash equivalents, including liquid
short-term investments in money market instruments.
A debt instrument in the financial assets is classified as
subsequently measured at fair value through other comprehensive
income when the objective is to both hold the financial assets to
collect contractual cash flows that are payments of principal and
interest on the principal amount outstanding and sell the financial
assets.
If there are business objectives for the holding of a financial
asset other than the foresaid, it is classified as subsequently
measured at fair value through profit or loss. The Group’s
derivative assets are included in this category. However, when
recognizing an investment in an equity instrument in its statement
of financial position, the Group may make an irrevocable
election to present subsequent changes in fair value in other
comprehensive income. The election is made on an instrument-by-
instrument basis. The Group typically designates investments in
quoted and unquoted shares that are not held for trading as at fair
value through other comprehensive income.
The measurement category of a financial liability is either at
amortized cost or at fair value through profit or loss. A financial
liability is classified as at fair value through profit or loss if it is
held-for-trading, is a derivative, or is specifically designated as
such. Other financial liabilities are subsequently measured at
amortized cost. The financial liabilities of the Group are classified
as measured at amortized cost except for derivative liabilities.
Measurement of financial instruments
At initial recognition, all financial assets and liabilities are measured
at fair value taking into account any transaction costs, and in
the statement of financial position, they are included in current
or non-current assets or liabilities depending on the maturity of
the item. Financial assets and financial liabilities are subsequently
measured at amortized cost, at fair value through other
comprehensive income, or at fair value through profit or loss in
accordance with the measurement category of the item.
Impairment of financial assets
At each reporting date, the Group recognizes a loss allowance for
expected credit losses on a financial asset that is not measured
at fair value through profit or loss. When measuring the expected
credit losses, the Group reviews the actual credit losses, current
conditions, and forecasts of the future economic conditions.
For trade receivables, the Group follows the simplified
approach whereby the impairment recognized in trade receivables
corresponds to the lifetime expected credit losses for trade
receivables.
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EUR million
Financial assets
Fair value through profit or loss
Derivatives held for trading
Derivatives designated as hedges
Unquoted securities
Amortized cost
Other non-current receivables
Trade and other receivables
Money market instruments
Cash in hand and at bank
Fair value through other comprehensive income
Unquoted shares
Total financial assets
Financial liabilities
Fair value through profit or loss
Derivatives held for trading
Derivatives designated as hedges
Amortized cost
Interest-bearing financial liabilities
Trade and other payables
Total financial liabilities
Carrying
amount
Note
2023
Fair value
Level 1
Level 2
Level 3
2022
Fair value
Level 1
Level 2
Level 3
Carrying
amount
30
30
17
18
21
22
22
17
30
30
27
28
2.6
3.3
2.7
-
226.6
50.7
364.2
0.2
650.4
1.7
1.0
508.2
155.9
666.8
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.6
3.3
-
-
226.6
50.7
364.2
-
647.4
1.7
1.0
518.6
155.9
677.2
-
-
2.7
-
-
-
-
0.2
2.9
-
-
-
-
-
3.4
13.5
2.8
4.3
329.9
-
259.0
0.2
613.2
1.0
0.2
270.8
121.3
393.4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.8
13.5
-
3.2
330.2
-
259.0
-
608.7
0.8
0.2
271.0
121.3
393.3
0.6
-
2.8
-
-
-
-
0.2
3.7
0.2
-
-
-
0.2
The carrying amount of financial assets corresponds to the
maximum exposure to the credit risk on the reporting date.
See note 29 for the impairments in respect of trade receivables.
Other financial assets measured at amortized cost and
fair value through other comprehensive income are not subject to
material impairment.
Fair value measurements have been classified using a fair value
hierarchy that reflects the significance of the inputs used in making
the measurements. The fair value hierarchy has the following levels:
Level 1:
Level 2:
Level 3:
Quoted prices in active markets for identical assets or
liabilities.
Inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly
(i.e. Quoted prices in active markets for identical assets or
liabilities.
Inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The level in the fair value hierarchy within which the fair value
measurement is categorized in its entirety shall be determined on
the basis of the lowest level input that is significant to the fair value
measurement in its entirety.
All items measured at fair value through profit or loss excluding
unquoted securities have been classified to Level 2 in the fair value
hierarchy and items include Group’s derivative financial instruments.
To establish the fair value of these instruments the Group uses
generally accepted valuation models with inputs based on observable
market data.
Level 3 includes unquoted securities measured at fair value
through profit or loss, and unquoted shares measured at fair value
through other comprehensive income since cost is assessed to
represent the fair value.
Financial assets and liabilities not measured at fair value but for
which the fair value can be measured are categorized in Level 2 in
the fair value hierarchy. Level 2 includes financial assets and financial
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17. Investments in associates and non-current
financial investments
EUR million
Accumulated cost,
Jan 1, 2023
Decrease/Increase
Net exchange differences
Carrying amount,
Dec 31, 2023
Carrying amount,
Dec 31, 2022
Investments
in associates
Unquoted
securities
Unquoted
shares
0.1
-
-
0.1
0.1
2.6
0.0
0.1
2.7
2.8
0.2
0.0
-
0.2
0.2
18. Other non-current receivables
EUR million
Loan receivables
Other non-current receivables
Total
2023
2022
-
14.1
14.1
4.3
10.0
14.4
liabilities measured at amortized cost. Their fair values are based on
the future cash flows that are discounted with market interest rates
on the reporting date.
At the end of March 2022, the ruble derivative financial
instruments were transferred into Level 3 in the fair value hierarchy
due to the significant decrease in the volume of activity in the ruble
markets. The inputs for these derivatives were based partly on the
observable market data (foreign exchange component) and partly
on unobservable inputs (interest component). The fair value of the
interest component was assumed to be zero in accordance with the
principle of prudence as the relevance of the observable market
data was deemed low due to the infeasibility of orderly transaction
execution.
Fair value changes of the ruble derivative financial instruments
were recognized in profit or loss under discontinued operations (under
financial income and expenses until March 16, 2023). The amount of
the total gains or losses relating to those derivatives in 2023 was EUR
+2.7 million.
The Group has no longer ruble derivatives outstanding.
Reconciliation of Level 3 fair value measurements
EUR million
Fair value, Jan 1
Ruble derivatives
2023
2022
0.4
-
Transfers into Level 3
-
14.8
Net gains/losses recognized in profit or
loss under
Financial income and expenses
Discontinued operations
Fair value, Dec 31
0.7
2.0
-
-14.3
-
0.4
There were no transfers between different levels during the
financial year.
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19. Deferred tax assets and liabilities
Accounting policies
Deferred taxes
Deferred taxes are measured with tax rates enacted by
the reporting date, to reflect the net tax effects of all
temporary differences between the financial reporting and
the tax bases of assets and liabilities. The most material
temporary differences arise from the amortization and
depreciation differences of intangible assets and property,
plant, and equipment, measuring the net assets of business
combinations at fair value, measuring financial assets
and hedging instruments at fair value, internal profits in
inventory and other provisions, appropriations, and unused
tax losses. Deferred tax liabilities will also be recognized from
the subsidiaries’ non-distributed retained earnings if profit
distribution is likely and will result in tax consequences.
Deferred tax assets relating to the temporary differences
are recognized to the extent that it is probable that future
taxable profits will be available against which the asset can
be utilized before expiration. In assessing the recoverability
of deferred tax assets compared to the expiration of tax
losses and the future taxable profits, the Group relies on
management judgment. Deferred taxes are not recorded on
goodwill that is not deductible for tax purposes.
Nokian Tyres has reported deferred tax assets and
liabilities in its financial statements which are expected to
be realized in the profit and loss based on the management
assessment. Management assessments on uncertain tax
situations are based on external expertise.
EUR million
Deferred tax assets
Inventories
Property, plant and equipment and
intangible assets
Lease liabilities
Provisions and accruals
Tax losses carried forward
Cash flow hedges
Other items
Total
Deferred tax assets offset against
deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Property, plant and equipment and
intangible assets
Right of use assets
Untaxed reserves
Undistributed earnings in subsidiaries
Cash flow hedges
Other items
Total
Deferred tax liabilities offset against
deferred tax assets
Deferred tax liabilities
Dec 31,
2022
Adjustments
between items
Recognized
in income
statement
Recognized
in other
comprehensive
income
Net exchange
differences
Acquisitions/
disposals of
subsidiaries
Dec 31,
2023
9.9
1.1
25.8
3.1
20.2
0.0
0.7
60.9
-37.4
23.5
17.7
24.8
0.6
9.2
2.6
0.0
54.8
-37.4
17.5
-0.6
0.7
2.7
-2.0
13.3
-0.7
13.5
19.7
33.2
-3.1
2.6
-0.6
-7.7
0.2
-8.6
19.7
11.1
-2.0
-2.0
-2.0
0.3
-1.4
1.4
0.3
0.3
9.3
1.8
28.5
-0.7
33.5
0.0
0.1
72.6
-17.6
55.0
14.9
27.4
0.0
0.0
0.4
1.7
44.3
-17.6
26.7
0.0
0.0
0.3
0.3
0.3
0.0
0.0
0.0
0.0
0.0
-2.2
-2.2
-2.2
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EUR million
Deferred tax assets
Inventories
Property, plant and equipment and
intangible assets
Lease liabilities
Provisions and accruals
Tax losses carried forward
Cash flow hedges
Other items
Total
Deferred tax assets offset against
deferred tax liabilities
Deferred tax assets
Deferred tax liabilities
Property, plant and equipment and
intangible assets
Right of use assets
Untaxed reserves
Undistributed earnings in subsidiaries
Cash flow hedges
Other items
Total
Deferred tax liabilities offset against
deferred tax assets
Deferred tax liabilities
Dec 31,
2021
Adjustments
between items
Recognized
in income
statement
Recognized
in other
comprehensive
income
Net exchange
differences
Acquisitions/
disposals of
subsidiaries
Dec 31,
2022
9.6
0.3
31.6
10.3
1.6
0.4
0.6
54.3
-32.8
21.6
17.5
30.7
0.5
21.0
0.8
0.1
70.6
-32.8
37.9
0.7
0.6
1.1
5.1
7.5
7.5
-2.4
0.1
-0.4
-2.7
-2.7
-0.4
0.1
-5.8
-9.2
13.5
0.2
-1.5
-4.6
-6.1
2.6
-5.9
0.0
-11.9
0.2
-15.0
-4.6
-19.6
0.9
0.9
0.9
0.0
0.0
0.0
-0.4
-0.4
-0.4
1.9
1.9
1.9
9.9
1.1
25.8
3.1
20.2
0.0
0.7
60.9
-37.4
23.5
17.7
24.8
0.6
9.2
2.6
0.0
54.8
-37.4
17.5
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax
liabilities and when the deferred income taxes relate to the same
fiscal authority.
On December 31, 2023, the Group had carry forward losses for
EUR 136.2 (73.6) million, on which a deferred tax asset has been
recognized. EUR 5.4 million of these carry forward losses will expire
in five years, EUR 124.1 million will expire during years 2029–2033
and EUR 6.7 million will not expire. The Group also had carry forward
losses for EUR 3.4 (10.1) million, on which no deferred tax asset
was recognized. It is not probable that future taxable profit will be
available to offset these losses. EUR 3.4 million of these losses will
expire in five years.
The Group has utilized previously unrecognized tax losses from
prior periods with EUR 0.1 (1.6) million in 2023.
The adjustments include EUR 2.3 million of adjustments that are
booked through retained earnings. The adjustments are not applied
to previous years because retrospective correction of previous years’
estimates is not possible.
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Remuneration
64
20. Inventories
21. Trade and other receivables
Accounting policies
Inventories
Inventories are measured at the lower of cost or the net
realizable value. Cost is primarily determined in accordance
with standard cost accounting. The cost of finished goods and
work in progress includes raw material purchase costs, direct
manufacturing wages, other direct manufacturing costs, and
a share of production overheads, borrowing costs excluded.
Net realizable value is the estimated sales price in ordinary
activities less the costs associated with the completion of the
product and the estimated necessary costs incurred to make
the sale of the product. Allowance is recorded in obsolete
items.
EUR million
Raw materials and supplies
Work in progress
Finished goods
Total
2023
108.1
11.3
352.3
471.7
2022
214.5
13.6
301.8
529.9
Annually an additional expense is recognized in the carrying amounts
of all separate inventory items to avoid them exceeding their
maximum probable net realizable values. In 2023 EUR 6.1 million
expense was recognized to decrease the carrying amount of the
inventories to reflect the net realizable value (EUR 19.7 million in 2022
without discontinued operations). Total inventory for 2022 without
discontinued operations was EUR 442.5 million.
Accounting policies
Revenue recognition
Trade receivables have been recorded on the balance sheet
according to the originally invoiced amount, and items in
other currencies have been recognized at the closing rate
reported by the European Central Bank. As the European
Central Bank suspended the quotation of the ruble exchange
rate in March 2022 the Group started using the WM/Refinitiv
FX benchmark rate for the ruble. Trade receivables will change
if the receivables are booked as a credit loss. There are three
types of credit loss provisions: group-level IFRS 9, local, and
statutory credit loss provision. Revenue from contracts with
customers is reported under net sales, and credit losses are
reported separately from net sales under other business
expenses.
EUR million
Trade receivables
Loan receivables
Accrued revenues and deferred expenses
Derivative financial instruments
2023
224.2
-
14.9
2022
326.2
0.4
16.3
Designated as hedges
3.0
12.4
Measured at fair value through profit or
loss
Current tax assets
Value added tax receivables
Other receivables
Total
2.6
7.6
23.6
4.7
3.4
15.0
15.9
12.6
280.5
402.3
The carrying amount of trade and other receivables corresponds to
the maximum exposure to the credit risk on the reporting date.
The carrying amount of trade and other receivables is a
reasonable approximation of their fair value. See note 29 for the
impairments in respect of trade receivables. Total trade receivables
for 2022 without discontinued operations was EUR 208.4 million and
trade and other receivables total without discontinued operations
was EUR 271.1 million.
Significant items under accrued revenues
and deferred expenses
EUR million
2023
2022
Annual discounts, purchases
Financial items
Social security contributions
Insurances
Other items
Total
2.7
1.1
0.3
1.6
9.3
3.2
0.6
0.1
1.4
11.1
14.9
16.3
22. Cash and cash equivalents
Accounting policies
Cash and cash equivalents
Cash and cash equivalents include cash on hand and other
current investments, such as commercial papers and bank
deposits.
EUR million
Cash in hand and at bank
Money market instruments
Total
2023
364.2
50.7
414.9
2022
259.0
-
259.0
EUR 25.6 million of the Group’s cash and cash equivalents are not
freely available to the Group due to the prevailing restrictions.
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65
23. Equity
Accounting policies
Treasury shares
The acquisition cost of treasury shares repurchased by the Group
is recognized as a deduction in equity. The consideration received
for the treasury shares when sold, net of transaction costs and
tax, is included in equity.
Dividend
The dividend proposed by the Board of Directors at the Annual
General Meeting has not been recognized in the financial
statements. Dividends are only accounted for on the basis of the
decision of the Annual General Meeting.
Reconciliation of the number of shares
EUR million
Jan 1, 2022
Acquisition/conveyance of treasury shares
Other changes
Dec 31, 2022
Jan 1, 2023
Acquisition/conveyance of treasury shares
Other changes
Dec 31, 2023
Number of
shares,
1,000 pcs Share capital
Share
premium
Paid-up
unrestricted
equity reserve
Treasury
shares
138,224
25.4
181.4
238.2
27
-
138,251
138,251
-384
-
137,867
-
-
25.4
25.4
0.0
-
25.4
-
-
181.4
181.4
0.0
-
181.4
-
-
238.2
238.2
0.0
-
238.2
-17.6
1.0
-
-16.6
-16.6
-0.1
-
-16.7
Total
427.5
1.0
-
428.5
428.5
-0.1
-
428.4
The nominal value of shares was abolished in 2008, hence no maximum share capital of the Group exists anymore.
All outstanding shares have been paid for in full.
Below is a description of the reserves within equity:
Share premium
Before the nominal value of shares was abolished, the amount
exceeding the nominal value of shares received by the company in
connection with share issue and share subscription were recognized
in share premiums.
Translation reserve
Translation reserve includes the differences arising from the
translation of the foreign subsidiaries’ financial statements. The
gains and losses from the net investments in foreign units and
hedging those net investments are also included in translation
reserve once the requirements of hedge accounting have been met.
Fair value and hedging reserves
The fair value and hedging reserves comprise of two sub reserves: a
fair value reserve for financial assets measured at fair value through
other comprehensive income and a hedging fund for changes in the
fair value of the derivative financial instruments used for cash flow
hedging.
Paid-up unrestricted equity reserve
After the nominal value of shares was abolished, the entire share
subscription made by option rights are entered in the paid-up
unrestricted reserve.
Treasury shares
No share repurchases were made during the review period, and the
company did not possess any own shares on December 31, 2023.
Nokian Tyres has an agreement from 2017 with a third-party
service provider concerning the share-based incentive program for
key personnel. The third party owns Nokian Tyres’ shares related to
the incentive program until the shares are given to the participants
of the program. In accordance with IFRS, these repurchased
shares have been reported as treasury shares in the Consolidated
Statement of Financial Position. On December 31, 2023, the number
of these shares was 1,054,507 (670,426). On December 31, 2023, this
number of shares corresponded to 0.76 (0.48) percent of the total
shares and voting rights in the company.
Dividends
After the balance sheet date, the Board of Directors proposed that a
dividend of EUR 0.55 (0.55) per share be paid for 2023.
Specification of the distributable funds
The distributable funds on December 31, 2023, total EUR 859.4 (716.1)
million and are based on the balance of the Parent company and the
Finnish legislation.
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Remuneration
66
24. Long-term incentive plans for the group
management team and key personnel
Accounting policies
Share-based payments
Performance shares are measured at fair value on the grant
date and are expensed on a straight-line basis over the
vesting period. The equity-settled amounts are recorded as
an increase in equity. The expense determined on the grant
date is based on the Group’s estimate of the number of
shares that are assumed to vest at the end of the vesting
period. The impact of non-market-based conditions (such
as net sales and operating profit) is not included in the fair
value of the share; instead, it is taken into account in the final
number of shares that are assumed to vest at the end of the
vesting period. The Group updates the assumption of the
final number on each reporting date. The fair values of cash-
settled amounts are similarly updated on each reporting date
and recorded in equity.
Long-term incentive plans
In February 2019, the Board of Nokian Tyres plc decided to establish
a share-based long-term incentive scheme for the Company’s
management and selected key employees. The decision included a
Performance Share Plan (PSP) as the main structure and a Restricted
Share Plan (RSP) as a complementary structure for specific
situations.
The purpose of the share-based incentive plans is to harmonize
the goals of the Company’s owners and key personnel in order to
increase the value of the Company in the long term, to commit key
personnel to the Company and its strategic target and to offer a
competitive rewards system for personnel. The Performance Share
Plan is targeted to the President and CEO, Group Management Team
members and other key employees.
The Performance Share Plan consists of annually commencing
typically three-year performance periods after which the possible
reward is delivered to participants. The company’s Board will decide
separately on each performance period and set the performance
criteria at the beginning of the earnings period.
The target incentive from the Performance Share Plan 2019
onwards corresponds to 75–100% of a Group Management Team
member’s annual base salary. The maximum level is twice the target
level, i.e. 150–200% of annual base salary. The maximum value of
paid reward cannot exceed the maximum percentage of annual base
salary used to define the allocation at grant. The number of shares
can be re-calculated at payout in case the performance criteria have
been met at maximum and the share price has increased from grant.
A member of the Group’s Management Team must own 25% of
the gross total number of shares earned through the system, up to
the point where the total value of their share ownership is equal to
their gross annual salary. They must own this number of shares for as
long as they are involved in the Group’s Management Team.
A precondition for the payment of the share reward based on
the Restricted Share Plan is that the employment relationship of the
individual participant with Nokian Tyres continues until the payment
date of the reward. In addition to this precondition, a financial
performance criterion is applied to Group Management Team.
The criterion is a threshold value for segment Return on Capital
Employed (ROCE), which must be exceeded for a potential payment
of a share reward based on the Restricted Share Plan.
PSP 2020–2022
The PSP 2020–2022 commenced effective as of the beginning of
2020 and the potential share reward thereunder was paid in the first
half of 2023 provided that the performance targets set by the Board
of Directors were achieved.
The performance measure for the Performance Share Plan 2020–
2022 was based on segments Earnings Per Share (EPS) and segments
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Return on Capital Employed (ROCE), both with an equal weight of
50%. The achievement for the segments Earnings Per Share (EPS)
target was 50.0% and for the segments Return on Capital Employed
(ROCE) target was 145.0%. The combined achievement of the set
targets was thereby 97.5%. The rewards to be paid correspond to a
total of approximately 158,500 Nokian Tyres plc gross shares. The
rewards were paid in the end of March 2023. Approximately 125 key
employees participated in the Performance Share Plan 2020–2022,
including members of the Management Team.
PSP 2021–2023
In February 2021, the Board of Nokian Tyres plc decided to continue
the Performance Share Plan for a new performance period for
the years 2021–2023. The Performance Period (PSP 2021–2023)
commenced effective as of the beginning of 2021 and the potential
share reward thereunder will be paid in the first half of 2024 provided
that the performance targets set by the Board of Directors are
achieved. The potential reward will be paid partly in shares of Nokian
Tyres plc and partly in cash. Eligible to participate in PSP 2021–2023
are approximately 220 individuals, including the members of Group’s
Management Team.
The potential share reward payable under the PSP 2021–2023
are based on the segments Earnings Per Share (EPS) and segments
Return on Capital Employed (ROCE). The possible rewards paid based
on the Performance Period of 2021–2023 will be a maximum of
534,898 gross shares.
PSP 2022–2024
In February 2022, the Board of Nokian Tyres plc decided to continue
the Performance Share Plan for a new performance period for
the years 2022–2024. The Performance Period (PSP 2022–2024)
commenced effective as of the beginning of 2022 and the potential
share reward thereunder will be paid in the first half of 2025 provided
that the performance targets set by the Board of Directors are
achieved. The potential reward will be paid partly in shares of Nokian
Tyres plc and partly in cash. Cash portion of the reward is intended to
cover the taxes arising from the paid reward. Eligible to participate
in PSP 2022–2024 are approximately 235 individuals, including the
members of Group’s Management Team.
The potential share reward payable under the PSP 2022–2024
are based on the segments Earnings Per Share (EPS) and segments
Return on Capital Employed (ROCE). The possible rewards paid based
on the Performance Period of 2022–2024 will be a maximum of
513,742 gross shares.
New Performance share plans (PSP) 2023–2027:
In February 2023, The Board of Directors of Nokian Tyres plc decided
to establish a new share-based incentive plan for the group’s key
employees. The aim is to align the objectives of the company’s
shareholders and key employees for increasing the value of the
company in the long-term, to retain the key employees at the
company and to offer them a competitive incentive scheme that is
based on earning and accumulating shares.
The Performance Share Plan 2023–2027 consists of three
performance periods covering the financial years 2023–2024,
2024–2025 and 2025–2027. The Board will decide annually on the
commencement and details of the performance periods.
In the plan, the target group is given an opportunity to earn
Nokian Tyres plc shares based on the achievement of the targets
set for the performance periods. Potential rewards of the plan will
be paid by the end of April 2026, 2027, and 2028 respectively. The
rewards will be paid partly in Nokian Tyres plc shares and partly in
cash. The cash proportion of the reward is intended for covering
taxes and tax-related expenses arising from the rewards to the
participants. In general, no reward will be paid if the participant’s
employment or director contract terminates before the reward
payment.
PSP 2023–2024
The rewards from the performance period 2023–2024 are based on
cumulative EBITDA, increase in passenger car tire production volume
and reduction in direct CO2 emissions.
The President and CEO of the company and members of the
Management Team are obliged to hold 50 percent of the received
net shares until the value of the participant’s total shareholding
in the company corresponds to the participant’s annual gross
salary. The shareholding amount must be maintained as long as the
membership in the Management Team or the position as a President
and CEO continues.
PSP 2023–2024 has a two-year performance period and one year
retention period.
The value of the gross rewards to be paid from the performance
period 2023–2024 will correspond to an approximate maximum total
of 1,400,000 Nokian Tyres plc shares, including the cash proportion.
Approximately 150 persons, including the President and CEO of the
company and other Management Team members, belong to the
target group of the performance period.
Restricted Share Plan (RSP)
The Restricted Share Plan (RSP) consists of annually commencing
restricted share plans. Each plan has a three-year vesting period
after which the allocated share rewards will be delivered to the
participants partly in Nokian Tyres plc shares and partly in cash. The
purpose of the Restricted Share Plan is to serve as a complementary
long-term incentive tool, used selectively for retention of Nokian
Tyres key employees.
The commencement of each new plan is subject to a separate
approval by the Board.
A precondition for the payment of the share reward based on
the Restricted Share Plan is that the employment relationship of the
individual participant with Nokian Tyres continues until the payment
date of the reward. In addition to this precondition, a financial
performance criterion is applied to Group Management Team.
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first half of 2026. The financial performance criterion is applied to
Nokian Tyres Management Team. The criterion is a threshold value
for segments Return on Capital Employed (ROCE), which must be
exceeded for a potential payment of a share reward based on the
Restricted Share Plan 2023–2025.
The possible rewards paid based on RSP 2023–2025 correspond
approximately to a maximum of 120,000 gross shares.
The criterion is a threshold value for segment Return on Capital
Employed (ROCE), which must be exceeded for a potential payment
of a share reward based on the Restricted Share Plan.
In February 2023, the Board of Director decided to modify the
financial performance criteria. The change was necessary to reflect
the radical effects on business conditions, caused by the war in
Ukraine. It was decided that the threshold criteria are changed and
measured against a pre-set average threshold value for segments
ROCE (during the financial years during the corresponding restriction
period). The previous financial threshold criterion was set for an
average value for ROCE (according to IFRS), during the restriction
period in question.
A threshold value tied to average segments ROCE is be applied
to Restricted Share Plans 2020–2022, 2021–2023, 2022–2024, as
well as for the Restricted Share plan commencing in 2023, with a
restriction period between 2023–2025.
RSP 2020–2022
In February 2020, the Board of Nokian Tyres plc decided to continue
the Restricted Share Plan and the RSP 2020–2022 commenced at
the beginning of 2020. Potential share rewards will be delivered in
the first half of 2023. A financial performance criterion is applied to
Nokian Tyres Management Team. The criterion is a threshold value
for Return on segment Capital Employed (ROCE), which must be
exceeded for a potential payment of a share reward based on the
Restricted Share Plan 2020–2022.
reward based on the Restricted Share Plan was that the employment
relationship of a participant with Nokian Tyres continues until the
payment date of the reward.
RSP 2021–2023
In February 2021, the Board of Nokian Tyres plc decided to continue
the Restricted Share Plan and the RSP 2021–2023 commenced at
the beginning of 2021. Potential share rewards will be delivered in
the first half of 2024. A financial performance criterion is applied
to Group Management Team. The criterion is a threshold value
for Return on segment Capital Employed (ROCE), which must be
exceeded for a potential payment of a share reward based on the
Restricted Share
Plan 2021–2023.
The possible rewards paid based on the Restricted Share Plan
2021–2023 correspond to a maximum of 120,000 gross shares.
RSP 2022–2024
In February 2022, the Board of Nokian Tyres plc decided to continue
the Restricted Share Plan and the RSP 2022–2024 commenced at
the beginning of 2022. Potential share rewards will be delivered in
the first half of 2025. A financial performance criterion is applied
to Group Management Team. The criterion is a threshold value
for Return on segment Capital Employed (ROCE), which must be
exceeded for a potential payment of a share reward based on the
Restricted Share Plan 2022–2024.
The three-year restriction period of the Restricted Share Plan
The possible rewards paid based on the Restricted Share Plan
2020–2022 ended after financial year 2022. 67 key employees
participated in the share-based incentive plan, including the
President and CEO and members of the Management Team. The
financial threshold value for segments Return on Capital Employed
(ROCE) applied for the President and CEO and the Management Team
members was achieved. The rewards paid correspond to a total of
71,550 Nokian Tyres plc gross shares. The rewards were paid in the
end of March 2023. A precondition for the payment of the share
2022–2024 correspond to a maximum of 120,000 gross shares.
RSP 2023–2025
In February 2023, The Board of Directors of Nokian Tyres plc decided
to continue the Restricted Share Plan, using the same structure as
previous years. The next plan (RSP 2023–2025) within the Restricted
Share Plan structure commences effective as of the beginning of
2023 and the potential share reward thereunder will be paid in the
Strategy Review
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Financial Statements
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69
The following tables present more specific information on the performance share plans.
Instrument
Issuing date
Initial amount, pcs
Dividend adjustment
Initial allocation date
PSP 2020–2022
PSP 2021–2023
PSP 2022–2024
PSP 2023–2025
RSP 2020–2022
RSP 2021–2023
RSP 2022–2024
RSP 2023–2025
Total
Feb 4, 2020
Feb 9, 2021
Feb 8, 2022
Feb 7, 2023
Feb 4, 2020
Feb 9, 2021
Feb 8, 2022
Feb 7, 2023
569,260
534,898
513,742
1,400,000
120,000
No
No
No
No
No
120,000
No
120,000
No
120,000
3,497,900
No
Mar 26, 2020
Mar 4, 2021
Feb 8, 2022
Feb 17, 2023
Jun 17, 2020
Mar 18, 2021
Dec 19, 2022
Dec 12, 2023
Beginning of earning period
Jan 1, 2020
Jan 1, 2021
Jan 1, 2022
Jan 1, 2023
Jan 1, 2020
End of earning period
Vesting date
Dec 31, 2022
Dec 31, 2023
Dec 31, 2024
Dec 31, 2025
Dec 31, 2022
Mar 31, 2023
Mar 31, 2024
Mar 31, 2025
Mar 31, 2026
Mar 31, 2023
Jan 1, 2021
Dec 31, 2023
Mar 31, 2024
Jan 1, 2022
Dec 31, 2024
Mar 31, 2025
Jan 1, 2023
Dec 31, 2025
Mar 31, 2026
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Cumulative
EBITDA, increase
in passenger car
tire production
volume and
reduction in
direct CO2
emissions
Continued
employment,
Segments
Return on Capital
Employed (ROCE)
for management
team
Continued
employment,
Segments Return
on Capital Employed
(ROCE) for
management team
Continued
employment,
Segments Return
on Capital Employed
(ROCE) for
management team
Continued
employment,
Segments Return
on Capital Employed
(ROCE) for
management team
3.0
0.0
0
3.1
0.3
142
3.1
1.3
164
3.2
2.3
152
3.2
0.0
67
3.1
0.3
4
3.1
1.3
7
3.2
2.3
1
3.1
1.3
Vesting conditions
Maximum contractual life, yrs
Remaining contractual life, yrs
Number of persons at the end of reporting year
Payment method
Cash & Equity
Cash & Equity
Cash & Equity
Cash & Equity
Cash & Equity
Cash & Equity
Cash & Equity
Cash & Equity
Changes during period
PSP 2020–2022
PSP 2021–2023
PSP 2022–2024
PSP 2023–2025
RSP 2020–2022
RSP 2021–2023
RSP 2022–2024
RSP 2023–2025
Total
Jan 1, 2023
Outstanding in the beginning of the period
Reserve in the beginning of the period
Changes during period
Granted
Forfeited
Earned (Gross)
Delivered (Net)
Expired
Dec 31, 2023
373,420
195,840
0
57,140
154,187
79,179
162,094
454,702
80,196
0
92,652
0
0
0
445,854
67,888
0
86,858
0
0
0
0
0
1,373,474
87,708
0
0
0
Outstanding at the of the period
Reserved at the of the period
0
0
374,506
172,848
358,996
154,746
1,285,766
114,234
80,550
39,450
0
9,600
70,950
36,740
49,050
0
0
6,135
113,865
12,300
107,700
0
0
1,372,961
604,939
0
0
0
0
0
0
0
0
0
0
15,000
1,388,474
0
0
0
0
333,958
225,137
115,919
211,144
6,135
113,865
12,300
107,700
15,000
2,052,703
105,000
768,393
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25. Pension liabilities
26. Provisions
Fair value determination
Inputs to the fair value determination of the performance shares
expensed during the financial year 2023 are listed in the below table
as weighted average values. The total fair value of the performance
shares is based on the company’s estimate on December 31, 2023 as
to the number of shares to be eventually vesting.
Fair value Determination
Share price at grant, EUR
Share price at reporting date, EUR
Expected dividends, EUR
Fair market value per share at grant, EUR
Earning period 2023
10.19
8.258
1.06
9.12
Accounting policies
Pension liabilities
The Group companies have several pension schemes in
different countries based on local conditions and practices.
Payments for defined contribution plans are recorded as
expenses in the income statement for the period they
relate to.
Valuation model
Dividend Discount
Total fair value Dec 31, 2023, EUR million
1.17
All material pension arrangements in the Group are defined
contribution plans.
Impact on period profits
and financial position
Expenses for the financial year, share-
based payments, EUR million
Liabilities arising from share-based
payments Dec 31, 2023, EUR million
Estimated amount of cash to be paid
under these plans, EUR million
0.30
0.00
1.20
Accounting policies
Provisions
A provision is entered into the statement of financial position
if the Group has a present legal or constructive obligation as
a result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation
and the amount of the obligation can be reliably estimated.
Provisions may be related to the reorganization of activities,
unprofitable agreements, environmental obligations, trials,
and tax risks. Warranty provisions include the cost of product
replacement during the warranty period.
The products sold by the company have a standard
warranty period. Furthermore, in limited markets, a so-called
Hakka Guarantee is offered for selected Hakka products that
covers tire punctures not covered by the standard warranty.
The Hakka Guarantee is valid for one year from the purchase
of the tire, but at most until the tire has worn down by a
predefined amount. Activating the Hakka Guarantee requires
the end customer to register for the service.
Provisions constitute the best estimates at the statement
of financial position date and are based on the past
experience of the level of warranty expenses.
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27. Interest-bearing financial liabilities
28. Trade and other payables
EUR million
Jan 1, 2023
Provisions made
Provisions used
Unused provisions reversed
Dec 31, 2023
Warranty
provision
Restructuring
provision
5.8
0.2
0.0
-4.3
1.8
4.0
0.0
-2.1
-2.0
0.0
Total
9.8
0.2
-2.1
-6.2
1.8
EUR million
Non-current
Loans from financial institutions and
pension loans
Bond loans
Current
EUR million
Non-current provisions
Current provisions
2023
2022
Loans from financial institutions
-
1.8
-
9.8
Commercial papers
Current portion of non-current loans from
financial institutions and pension loans
2023
2022
EUR million
304.7
99.2
404.0
-
-
104.2
104.2
108.6
-
108.6
150.0
10.9
1.3
162.2
Trade payables
Accrued expenses and deferred revenues
Advance payments
Derivative financial instruments
Designated as hedges
Measured at fair value through
profit or loss
Current tax liabilities
Value added tax liabilities
Other liabilities
Total
2023
155.9
106.3
0.0
0.5
1.7
3.8
24.0
18.1
2022
121.3
170.9
0.7
0.1
1.0
4.1
31.9
18.3
310.2
348.6
Warranty provision
The goods are sold with a normal warranty period. Additionally, a
Hakka Guarantee warranty has been established in certain markets
for certain products to compensate tire damages not covered by the
normal warranty, one year after the purchase and to a certain wear
limit. Damaged goods will be repaired at the cost of the company or
replaced with a corresponding product. The provisions are based on
the sales and statistical compensation volumes of the tires sold under
these warranties. The warranty provisions are expected to be utilized
within one year.
Total
508.2
270.8
The carrying amount of trade and other payables is a reasonable
approximation of their fair value.
All interest-bearing financial liabilities are denominated in euros.
EUR million
2023
2022
Effective interest rates for interest-bearing
financial liabilities
2023
2022
Without
hedges
With
hedges
Without
hedges
With
hedges
Loans from financial
institutions and
pension loans
Bond loans
Commercial papers
5.2%
5.3%
-
4.3%
5.3%
-
Total
5.2%
4.5%
3.1%
-
2.9%
3.1%
2.5%
-
2.9%
2.5%
See note 16 for the fair values of the interest-bearing
financial liabilities.
Significant items under accrued expenses
and deferred revenues
Wages, salaries and social security
contributions
Annual discounts, sales
Commissions
Marketing expenses
Transportation costs
Financial items
Other items
Total
26.0
62.2
0.0
0.8
0.2
5.2
11.9
106.3
43.2
97.8
0.0
1.3
0.4
0.8
27.4
170.9
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
72
29. Financial risk management
The objective of financial risk management is to protect the Group’s
planned profit development from adverse movements in financial
markets. The principles and targets of financial risk management
are defined in the Group’s treasury policy, which is approved by
the Board. Financing activities and financial risk management
are centralized to the parent company Treasury, which executes
financing and hedging transactions with external counterparties
and acts as a primary counterparty to business units in financing
activities like funding, foreign exchange transactions and cash
management. The Group Credit Committee makes credit decisions
that have a significant impact on the credit exposure of the Group.
Foreign currency risk
The Nokian Tyres Group consists of the parent company in Finland,
the sales companies in Sweden, Norway, the USA, Canada, Czech
Republic, Germany, France, Switzerland, Poland and Ukraine, the tire
chain companies in Finland, Sweden and Norway. The tire factories
are located in Nokia, Finland, and in Dayton, Tennessee, the USA.
Construction of a new passenger car tire factory in Oradea, Romania
started in spring 2023.
Transaction risk
According to the Group’s treasury policy, transactions between the
parent company and the foreign subsidiaries are primarily carried
out in the local currency of the subsidiary in question, and the
transaction risk is carried by the parent company and there is no
significant currency risk in the foreign subsidiaries. Exceptions to the
main rule are subsidiaries, which have non-home currency items due
to the nature of business activities. In this case transactions between
the parent company and the subsidiary are carried out in a currency
appropriate for the Group currency exposure. The parent company
manages transaction risk in these subsidiaries and implements
required hedging transactions for hedging the currency exposure of
the subsidiary according to the Group hedging principles.
The transaction exposure of the parent company and the
subsidiaries with non-home currency items comprises of the foreign
currency denominated receivables and payables in the statement
of financial position and the foreign currency denominated binding
purchase and sales contracts. According to the Group’s treasury
policy the significant transaction exposure in every currency pair is
hedged, although 20% over-hedging or under-hedging is allowed if
a +/- 10% change in the exchange rate does not create over EUR 1
million impact on the income statement. However, a simultaneous +/-
10% change in all the Group exposure currencies against EUR must
not create over a EUR 5 million impact on the income statement.
Exceptions to the main rule are non-convertible currencies, which
do not have active hedging markets available. For budget exposure
the estimated currency cash flows are added to the transaction
exposure so that the overall foreign currency risk exposure horizon
covers the next 12 months. The budget exposure may be hedged
according to the market situation and the hedge ratio can be up to
70% of the budget exposure. Currency forwards, currency options
and cross-currency swaps are used as hedging instruments.
Transaction risk
EUR million
Dec 31, 2023
Dec 31, 2022
Functional currency
EUR
EUR
EUR
EUR
Foreign currency
CAD NOK
PLN RON
EUR
SEK
EUR
USD
CZK
RON
EUR
EUR
EUR
EUR
EUR
EUR
CZK
RON
EUR
EUR
CAD NOK
PLN RON
SEK USD
EUR
EUR
Trade receivables
Loans and receivables
15.0
21.9
1.6
44.8
5.1
7.3
0.0
24.3
0.0 28.0
11.9
8.6
Total currency income
16.6
66.6
12.4
0.0
52.3
20.5
20.2
5.8
26.1
Trade payables
Borrowings
Total currency expenditure
-0.1
-9.8
-9.9
0.0
-31.1
-31.1
0.0
-5.8
-5.8
0.0
0.0
0.0
0.0 -16.7
-21.2
-13.1
-3.2
0.0
-13.1 -20.0 -21.2
0.0
0.0
0.0
-3.8
0.0
-3.8
5.7
38.8
2.8 106.8
8.6 145.6
-0.4
0.0
-7.3 -97.8
-7.7
-97.8
2.8
6.9
9.7
0.0
-7.3
-7.3
0.0
0.0
0.0
26.7
25.7
6.3
23.1
35.3
23.6
52.3
29.5
58.9
0.0
0.0
0.0
0.0
0.0
-6.6 -34.3
-16.8
0.0 -20.4 -18.8
0.0
0.0
0.0 -20.4 -25.4 -34.3
-16.8
Foreign exchange derivatives
-4.1
-38.7
-5.8
0.0 -41.9
-5.9
-5.3
0.0
3.5 -44.7
-1.1
0.0 -26.5
-8.0 -28.0
0.0
Binding sales contracts
Binding purchase contracts
Future interest items
0.8
0.0
0.0
6.9
0.0
2.1
0.0
0.0
0.0
0.0
0.0
0.0
5.3
1.0
6.0
0.0 -76.9
-2.0
0.8
0.0
0.0
0.0
0.0
0.0
7.5
0.0
0.0
10.0
0.0
0.9
0.0
0.0
0.0
0.0
0.0
0.0
2.4
1.5
0.0 -16.4
0.2
-0.2
12.0
-5.3
0.0
0.0
0.0
0.0
Net exposure
3.4
5.7
0.8
0.0
3.3 -81.2
3.5
-3.7
11.8
13.9
1.3
0.0
8.0 -19.0
3.2
-16.7
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
73
Translation risk
In financial statements the statements of financial position of the
foreign subsidiaries are translated into euro using the European
Central Bank’s closing rates and the income statements monthly
using the monthly average rate for the period. The impacts of the
exchange rate fluctuations arising on translation of the subsidiaries’
income statements and statements of financial position are recorded
as translation differences in other comprehensive income and in
the translation reserve in equity. The net investments in foreign
subsidiaries are not hedged based on the Board decision in 2013.
Group’s total comprehensive income was negatively affected
by translation differences on foreign operations by EUR 33.5 million
(positively affected EUR 36.7 in 2022).
Translation risk
Net investments by currency
EUR million
Dec 31, 2023
Dec 31, 2022
Currency of net investment
CAD
CZK
NOK
RON
RUB
SEK
USD
21.7
13.8
52.8
123.0
-
43.6
470.2
13.7
24.8
41.3
20.4
514.3
47.0
428.4
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the base currency against the quote
currency, with all other variables held constant, of the Group’s profit before tax and equity due to changes in the fair value of
financial assets and liabilities.
A reasonably possible change is assumed to be a 10% base currency appreciation or depreciation against the quote currency.
A change of a different magnitude can also be estimated fairly accurately because the sensitivity is nearly linear.
EUR million
Base currency / Quote currency
EUR/CAD
EUR/CZK
EUR/PLN
EUR/NOK
EUR/RON
EUR/SEK
EUR/USD
Dec 31, 2023
Base currency
Dec 31, 2022
Base currency
10% stronger
10% weaker
10% stronger
10% weaker
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
-0.3
0.0
-0.1
-0.2
-0.4
0.2
0.5
-
-
-
-
-
-
-
0.3
0.0
0.1
-0.2
0.4
-0.2
-0.5
-
-
-
-
-
-
-
-0.8
-0.4
-0.1
-0.3
-1.7
-0.6
0.4
-
-
-
-
-
-
-
0.4
0.4
0.1
0.3
1.7
0.6
-0.4
-
-
-
-
-
-
-
Strategy Review
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74
Interest rate risk
The interest rate risk of the Group consists mainly of borrowing,
which is split between floating and fixed rate instruments. On the
reporting date the floating rate interest-bearing financial liabilities
amounted to EUR 255.6 (166.3) million and the fixed rate interest-
bearing liabilities EUR 252.7 (104.5) million including the interest rate
derivatives. The Group’s policy aims to have at least 50 percent
of the non-current financial liabilities in fixed rate instruments.
Interest rate risk is managed by using interest rate derivatives. On
the reporting date the share of the fixed rate non-current interest-
bearing financial liabilities including their current portion was 50
(95) percent and the average fixing period of the interest-bearing
financial liabilities was 17 (11) months including the interest rate
derivatives. The Group uses interest rate derivatives as cash flow
hedges and hedge accounting is mainly applied for those derivatives.
Electricity price risk
The Group purchases electricity in Finland at market price from
the Nordic electricity exchange and this leads to an electricity
price exposure. Annually around 110 GWh of electricity is procured.
According to the procurement policy electricity purchases are
hedged with electricity derivatives within the limits set by the
pre-defined hedge ratios for the coming five-year period. On the
reporting date the energy amount of the electricity derivatives
amounted to 190 (150) GWh.
Sensitivity analysis for interest rate risk
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the
Group’s profit before tax through the impact on floating rate borrowings and interest rate hedges measured at fair value through profit or loss
and the Group’s equity due to changes in the fair value of cash flow hedges. A reasonably possible change is assumed to be a 1%-point increase or
decrease of the market interest rates.
Dec 31, 2023
Interest rate
Dec 31, 2022
Interest rate
EUR million
1%-point higher
Income
statement
Equity
1%-point lower
Income
statement
Equity
1%-point higher
Income
statement
Equity
1%-point lower
Income
statement
Equity
Impact of interest rate change
-3.4
0.5
3.4
-0.5
-1.6
1.2
1.6
-1.2
Sensitivity analysis for electricity price risk
The following table demonstrates the sensitivity to a reasonably possible change in electricity price, with all other variables held constant, of the
Group’s profit before tax and equity due to changes in the fair value of the electricity derivatives.
A reasonably possible change is assumed to be a 5 EUR/MWh increase or decrease of the electricity market prices.
A change of a different magnitude can also be estimated fairly accurately because the sensitivity is nearly linear.
Dec 31, 2023
Electricity price
Dec 31, 2022
Electricity price
EUR million
5 EUR/MWh higher
5 EUR/MWh lower
5 EUR/MWh higher
5 EUR/MWh lower
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
Income
statement
Equity
Impact of electricity price change
-
0.9
-
-0.9
-
0.8
-
-0.8
Strategy Review
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Liquidity and funding risk
In accordance with the Group’s treasury policy, Treasury is
responsible for maintaining the Group’s liquidity, efficient cash
management and sufficient sources of funding. The committed
credit limits cover all funding needs, like outstanding commercial
papers, other current loans, working capital changes arising from
operative business and investments.
The Group reports the main financial covenants to creditors
quarterly. If the Group does not satisfy the requirements set in
financial covenants, creditor may demand accelerated repayment
of the credits. In 2023 the Group has met all the requirements set
in the financial covenants, which are mainly linked to equity ratio.
Management monitors regularly that the covenant requirements
are met. Financing agreements contain terms and conditions upon
which the agreement may be terminated, if control in the company
changes as a result of a public tender offer.
Refinancing risk is reduced by split maturity structure of
Contractual maturities of financial and lease liabilities
loans and credit limits. The Group issued in June a EUR 100 million
sustainability linked bond maturing in 2028. In December the Group
rearranged a EUR 200 million revolving credit facility due in 2027 with
a bank syndicate of 5 banks. A EUR 150 million syndicated revolving
credit facility and a EUR 25 million bilateral revolving facility due
in spring 2024 were replaced by the new revolving credit facility,
which is sustainability linked and it has two one-year extension
options. In addition to previous the Group has a EUR 500 million
domestic commercial paper program and total of EUR 125 million
bilateral revolving credit facilities. The current credit limits and the
commercial paper program are used to finance inventories, trade
receivables, subsidiaries in distribution chains and thus to control the
typical seasonality in the Group’s cash flows.
On the reporting date the Group’s liquidity in cash and cash
equivalents was EUR 414.9 (259.0) million. At the end of the year
the Group’s credit limits available were EUR 831.1 (799.3) million, out
of which the committed limits were EUR 330.3 (305.4) million. The
available committed non-current credits amounted to EUR 300.0
(300.0) million.
The Group’s interest-bearing financial liabilities totaled EUR 508.2
million, compared to the year before figure of EUR 270.8 million. All
the interest-bearing financial liabilities were in EUR. The average
interest rate of interest-bearing financial liabilities was 4.5%. Current
interest-bearing financial liabilities, including the current portion of
non-current financial liabilities maturing within the next 12 months,
amounted to EUR 104.2 (162.2) million.
EUR million
Non-derivative financial liabilities
Loans from financial institutions and pension loans
Carrying
amount
2023
Contractual maturities*
2024
2025
2026
2027
2028
2029–
Total
Fixed rate loans
Floating rate loans
Bond loans
Commercial papers
Trade and other payables
Lease liabilities
Derivative financial liabilities
Interest rate derivatives
Designated as hedges
Foreign currency derivatives
3.4
-0.6
-0.6
405.6
-122.7
-308.7
99.2
0.0
155.9
130.3
-5.1
0.0
-155.9
-27.5
-5.1
0.0
0.0
-23.5
-0.6
-0.5
-5.1
0.0
0.0
-17.1
-0.6
-0.5
-5.1
0.0
0.0
-10.6
-0.6
-0.2
-105.1
0.0
0.0
-7.2
-0.8
-0.3
0.0
0.0
0.0
-3.7
-433.0
-125.6
0.0
-155.9
-20.2
-106.0
-1.6
1.6
0.0
0.0
0.0
0.0
0.0
1.6
Measured at fair value through profit or loss
Cashflow out
Cashflow in
Electricity derivatives
Designated as hedges
Total
1.7
-2.6
-235.2
236.1
0.0
0.0
-0.7
0.7
0.1
791.2
-308.6
-337.8
0.0
0.0
0.0
-23.3
0.0
0.0
0.0
-16.8
0.0
0.0
0.0
-113.1
0.0
0.0
-235.2
236.1
0.0
-21.3
0.7
-821.0
* The figures are undiscounted and include both the finance charges and the repayments.
Strategy Review
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Financial Statements
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76
Contractual maturities of financial and lease liabilities
EUR million
Non-derivative financial liabilities
Loans from financial institutions and pension loans
Carrying
amount
2022
Contractual maturities*
2023
2024
2025
2026
2027
2028–
Total
Fixed rate loans
Floating rate loans
Bond loans
Commercial papers
Trade and other payables
Lease liabilities
Derivative financial liabilities
Interest rate derivatives
Designated as hedges
Foreign currency derivatives
4.5
-1.2
-0.6
255.4
-155.4
-105.0
0.0
10.9
121.3
129.1
0.0
-11.0
-121.3
-26.0
0.0
0.0
0.0
-0.6
-0.3
0.0
0.0
0.0
-0.6
-0.3
0.0
0.0
0.0
-0.6
-0.4
0.0
0.0
0.0
-7.3
-1.4
-0.5
0.0
0.0
0.0
-20.9
-4.9
-262.1
0.0
-11.0
-121.3
-106.9
-22.0
-18.2
-12.6
-3.9
2.5
1.5
0.0
0.0
0.0
0.0
4.0
Measured at fair value through profit or loss
Cashflow out
Cashflow in
Electricity derivatives
Designated as hedges
Total
1.0
-3.4
-179.5
180.8
0.0
0.0
-9.4
7.0
1.9
505.5
-304.2
-124.3
0.0
0.0
0.8
-18.3
0.0
0.0
0.0
-13.5
0.0
0.0
0.0
-8.3
0.0
0.0
0.0
-179.5
180.8
9.7
-22.8
-491.3
* The figures are undiscounted and include both the finance charges and the repayments.
Credit risk
Credit risk is a risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a
financial loss. The Group is exposed to credit risk in its operating
activities (primarily trade receivables) and in its financing activities,
including deposits, foreign exchange transactions and other financial
transactions with banks and financial institutions.
The credit risk in financial transactions is controlled by doing
business only with banks and financial institutions with high credit
ratings. In investments the Group’s placements are current and
funds are invested only in solid domestic listed companies, public
institutions or non-listed domestic companies which meet the
criteria set by the investment policy. The Board approves the
investment policy for financial instruments annually.
The principles of customer credit risk management are
documented in the Group’s credit policy approved by the Board.
The Group Credit Committee makes all the significant credit
decisions. Customer credit risk is managed by each business area
subject to the Group’s credit policy, procedures, and controls
relating to customer credit risk management. Creditworthiness
of a customer is assessed based on its financial status, payment
history, and country risk. Individual credit limits are defined in
accordance with this assessment and/or in some cases trade finance
instruments, bank guarantees, and specific payment terms may
be in use to mitigate the credit risk. Credits are limited in countries
where political or economic environment is unstable. Outstanding
customer receivables, customers’ creditworthiness, and country
risk are regularly monitored. Payment programs, which customer
is committed to, are always agreed upon for past due receivables.
There are no over 15% customer or country risk concentrations
in trade receivables, other than Swedish customers’ 20% share
(Norwegian customers 23% share in 2022 of trade receivables
excluding Russia) on the reporting date.
Strategy Review
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Financial Statements
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77
Aging and impairment of trade receivables
Impairment recognized in trade receivables corresponds to lifetime
expected credit losses for trade receivables. To measure expected
credit losses a simplified provision matrix is in use and individual
assessments are used with customers bearing an increased credit
risk. An impairment analysis is performed at each reporting date. The
maximum exposure to credit risk at the reporting date is the carrying
value of trade receivables. When measuring expected credit losses,
the Group reviews five-year sales, customer payment behavior, actual
credit losses, current conditions and forecasts of future economic
conditions. Trade receivables are permanently written-off when the
expected income from the receivable is permanently lost, for example
at the end of bankruptcy proceedings.
The aging and impairment of trade receivables
Dec 31, 2023
Dec 31, 2022
Trade receivables
gross amount
Impairment
loss allowance
Trade receivables
gross amount
Impairment
loss allowance
EUR million
Not past due
Past due less than 30 days
Past due between 30 and 90 days
Past due between 91 and 180 days
Past due more than 180 days
Total
193.3
22.4
5.7
1.8
44.3
267.5
-1.0
-0.6
-0.3
-0.2
-41.2
-43.3
Changes in the impairment loss allowance for trade receivables
EUR million
Loss allowance, Jan 1
Write-offs
Other changes*
Change in loss allowance recognized in profit or loss
Loss allowance, Dec 31
423.7
24.8
5.7
1.9
67.4
523.5
2023
197.3
-3.3
-148.9
-1.8
43.3
-129.3
-1.1
-0.5
-0.5
-65.8
-197.3
2022
70.0
-3.4
127.9
2.8
197.3
* Other changes in 2023 includes items amounting to EUR -148.0 million which have been restated to discontinued
operations. Other changes in 2022 includes EUR 125.0 million of discontinued operations related impairment
allocated to other operating expenses.
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78
Capital management
For the purpose of the Group’s capital management, capital
includes share capital, share premium, treasury shares and other
equity attributable to the equity holders of the parent. The Group’s
objectives of managing capital are to maximize the shareholder
value and to secure the Group’s access to capital markets at all times
despite of the seasonal nature of the business. To maintain or adjust
the capital structure, the Group may adjust dividend payment to
shareholders or return capital to shareholders or issue new shares.
The Group monitors its capital structure on the basis of Net debt
to EBITDA ratio and Equity ratio. Equity ratio has to be at least at
the level of 30% in accordance with the financial covenants. Equity
ratio is calculated as a ratio of total equity to total assets excluding
advances received.
Net debt / EBITDA
EUR million
Average interest-bearing liabilities
Less: Average liquid funds
Average net debt
Operating profit
Add: Depreciations and amortizations
EBITDA
2023
579.1
360.1
219.0
32.1
114.9
147.0
2022
415.4
212.9
202.5
56.7
113.5
170.2
Average net debt / EBITDA
1.49
1.19
Equity ratio
EUR million
Equity attributable to equity
holders of the parent
Add: Non-controlling interest
Total equity
Total assets
Less: Advances received
Adjusted total assets
2023
2022
1,347.6
1,433.1
0.0
0.0
1,347.6
1,433.1
2,325.2
2,209.7
0.0
0.7
2,325.2
2,208.9
Equity ratio
58.0%
64.9%
Strategy Review
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Financial Statements
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Non-Financial Information
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79
30. Fair values of derivative financial instruments
Accounting policies
Derivative financial instruments and hedge
accounting
The Group may hold derivative financial instruments to hedge
its interest rate, foreign currency, and commodity price risk
exposures. Derivatives are recognized initially at fair value and
subsequently measured at fair value. Publicly quoted market
prices and rates as well as the generally used measurement
models are used to define the fair value of derivatives. The data
and assumptions used in the measurement models are based on
verifiable market prices and values.
Fair value changes of derivatives are recognized in profit or loss
unless the derivative is part of a hedging relationship when fair
value changes are recognized according to the hedge accounting
standards for hedging relationships.
In general, hedge accounting is not applied to the derivatives
used to hedge cash flows from the Group’s business operations in
foreign currencies.
Hedge accounting can be used to reduce the volatility in the
income statement caused by the items measured at fair value
through profit or loss. Hedge accounting eliminates the accounting
asymmetry between the hedging instrument and the hedged
item as it enables the aforesaid to affect the income statement
simultaneously. The Group may designate derivative financial
instruments as hedging instruments to hedge the variability in
cash flows that is attributable to changes in foreign exchange
rates, interest rates, and electricity prices. In addition, the Group
may, if necessary, designate derivative financial instruments and
other financial instruments as hedging instruments in hedges of
foreign exchange risk on a net investment in a foreign operation.
At the inception of hedge accounting for a hedging
relationship, the Group designates and documents the hedging
relationship and the risk management objective and strategy
for undertaking the hedge. The documentation includes an
assessment whether the hedge effectiveness requirements are
met in the hedging relationship. The Group aims to use hedging
instruments that create no ineffective portion.
Cash flow hedges
In cash flow hedges, the effective portion of changes in the
fair value of the hedging instrument is recognized in other
comprehensive income and accumulated in the cash flow hedge
reserve in equity. Any ineffective portion of changes in fair value is
recognized immediately in profit or loss. The amount accumulated
in the cash flow hedge reserve is reclassified to profit or loss as
the hedged item affects profit or loss.
The Group may apply hedge accounting to interest rate
swaps by which floating rate borrowings have been converted
into fixed rate borrowings and interest rate and currency swaps
where foreign currency floating rate loan receivables have been
converted into functional currency floating rate loan receivables.
The gains or losses related to both the effective and ineffective
portion of the hedge are presented in profit or loss within financial
items.
The price risk of the Group’s forecast electricity purchases
in Finland is hedged with electricity derivatives to which hedge
accounting is applied. The Group may separately hedge the two
components of electricity price risk, system price, and area price
difference, or a combination of these components. The gain or
loss related to the effective portion of the hedge is presented
in profit or loss within the cost of sales. The ineffective portion
is recognized in profit or loss within other operating income or
expenses.
Hedge of a net investment in a foreign operation
Hedges of net investments in foreign operations are accounted
for similarly to cash flow hedges. The effective portion of changes
in the fair value of the hedging instrument is recognized in other
comprehensive income and accumulated in the translation
reserve in equity. Any ineffective portion of changes in fair value is
recognized immediately in profit or loss. The amount accumulated
in the translation reserve is reclassified to profit or loss on the
disposal or partial disposal of the foreign operation.
The Group does not currently have hedges of a net investment
in a foreign operation.
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80
EUR million
Derivatives measured at fair value through profit or loss
Foreign currency derivatives
Currency forwards
Currency options, purchased
Currency options, written
Interest rate and currency swaps
Derivatives designated as cash flow hedges
Interest rate derivatives
Interest rate swaps
Electricity derivatives
Electricity forwards
2023
2022
Notional
amount
Fair value
assets
Fair value
liabilities
Notional
amount
Fair value
assets
Fair value
liabilities
227.6
6.7
15.6
-
150.0
9.1
2.6
0.0
-
-
2.0
1.4
1.5
-
0.3
-
0.4
0.6
159.9
4.8
11.8
18.4
100.0
6.9
2.7
0.0
-
0.6
3.9
9.6
0.8
-
0.1
0.2
0.0
0.2
Derivatives are maturing within the next 12 months excluding the interest rate and currency swaps, interest rate swaps and electricity forwards.
The fair value of forward exchange contracts is measured using the forward rates on the reporting date. The fair value of currency options is
calculated using an option valuation model.
The fair values of interest rate and currency swaps and interest rate derivatives are determined as the present value of the future cash flows
based on market interest rates on the reporting date.
The fair value of electricity derivatives is based on quoted market prices in active markets on the reporting date.
Strategy Review
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31. Financial instruments designated as hedging instruments
Cash flow hedges
Financial instruments designated as hedging instruments
2023
Maturity
2022
Maturity
2024
2025
2026
2027
2028
2029–
Total
2023
2024
2025
2026
2027
2028–
Total
Interest rate swaps
Hedged item: Floating rate EUR debt
Notional amount, EUR million
Average fixed rate
Electricity forwards
Hedged item: Electricity system price
Notional amount, EUR million
Notional amount, GWh
Average forward rate, e/MWh
Hedged item: Electricity Finnish
area price difference
Notional amount, EUR million
Notional amount, GWh
Average forward rate, e/MWh
150.0
1.6%
4.5
83
53.8
-0.1
44
-2.1
2.8
61
45.1
0.0
18
-1.3
1.6
35
0.4
9
44.9
44.2
Interest rate swaps
Hedged item: Floating rate EUR debt
Notional amount, EUR million
Average fixed rate
Electricity forwards
Hedged item: Electricity system price
100.0
0.5%
Notional amount, EUR million
Notional amount, GWh
3.5
79
2.2
48
1.0
26
Average forward rate, e/MWh
44.7
44.7
36.6
Hedged item: Electricity Finnish
area price difference
Notional amount, EUR million
Notional amount, GWh
Average forward rate, e/MWh
0.2
35
4.7
0.1
18
4.1
0.0
9
3.9
150.0
1.6%
9.2
189
48.8
-0.1
61
-1.9
100.0
0.5%
6.6
153
43.3
0.3
61
4.4
Strategy Review
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Effect of hedging instruments on the statement of financial position and statement of comprehensive income
EUR million
Notional amount
Notional amount, GWh
Assets
Carrying amount
2023
Interest rate
derivatives
Electricity
derivatives
Interest rate swaps Electricity forwards
EUR million
150.0
-
2.0
9.1
250
1.4
Notional amount
Notional amount, GWh
Assets
Carrying amount
2022
Interest rate
derivatives
Electricity
derivatives
Interest rate swaps
Electricity forwards
100.0
-
3.9
6.9
215
9.6
Line item in the statement of financial position
Trade and other
receivables
Trade and other
receivables
Line item in the statement of financial position
Trade and other
receivables
Trade and other
receivables
Liabilities
Carrying amount
0.4
0.6
Carrying amount
Liabilities
Line item in the statement of financial position
Trade and other
payables
Trade and other
payables
Line item in the statement of financial position
0.0
0.2
Trade and other
payables
Trade and other
payables
Change in value for recognizing hedge ineffectiveness
Change in value for recognizing hedge ineffectiveness
Hedged item
Hedging instrument
Effective portion
Amount recognized in other comprehensive income
Amount reclassified from the cash flow hedge reserve to
profit or loss
-0.3
0.3
0.3
-2.7
7.9
-7.9
-7.9
-0.8
Hedged item
Hedging instrument
Effective portion
Amount recognized in other comprehensive income
Amount reclassified from the cash flow hedge reserve to
profit or loss
-5.1
5.1
5.1
0.5
-7.1
7.1
7.1
-1.5
Line item in the income statement
Financial items
Cost of sales
Line item in the income statement
Financial items
Cost of sales
Ineffective portion
Amount recognized in profit or loss
Line item in the income statement
-
-
Amount recognized in profit or loss
Financial items
Other operating
income or expenses
Line item in the income statement
Ineffective portion
-
-
Financial items
Other operating
income or expenses
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Effect of hedging instruments on equity
EUR million
Cash flow hedge reserve, Jan 1
Cash flow hedges
Change in fair value recognized in other
comprehensive income
Interest rate swaps
Electricity forwards
Amount reclassified to profit or loss
Interest rate swaps
Electricity forwards
Tax effect
Cash flow hedge reserve, Dec 31
0.3
-7.9
-2.7
-0.8
2.2
1.6
5.1
7.1
0.5
-1.5
-2.2
10.5
32. Contingent liabilities and assets
2023
10.5
2022
1.6
Accounting policies
Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from
past events and whose existence will be confirmed only
by the realization of an uncertain future event not totally
controllable by the Group. A contingent liability is also defined
as a present obligation that probably will not require the
settlement of the obligation or that cannot be measured
reliably. A contingent liability is disclosed in the notes to the
consolidated financial statements.
33. Significant risks, uncertainties, and
ongoing disputes
Nokian Tyres’ business and financial performance may be affected
by several uncertainties. The Group has adopted a risk management
policy, approved by the Board of Directors, which supports the
achievement of strategic goals and ensures business continuity.
The Group’s risk management policy focuses on managing both the
risks pertaining to business opportunities and the risks affecting
the achievement of the Group’s goals in the changing operating
environment. The risk management process aims to identify and
evaluate the risks and to plan and implement the practical measures
for each risk. Nokian Tyres describes the overall business risks and risk
management in its annual Corporate Governance Statement.
Correspondingly, a contingent asset is a possible asset
For example, the following risks could potentially have an impact on
that arises from past events and whose existence will be
confirmed only by the realization of an uncertain future event
not totally controllable by the Group. In case an inflow of
economic benefits is probable, a contingent asset is disclosed
in the notes to the consolidated financial statements.
EUR million
For own debt
Pledged assets
Other own commitments
Guarantees
2023
2022
5.9
6.7
0.3
2.3
Nokian Tyres’ business:
• Nokian Tyres is subject to risks related to consumer confidence and
macroeconomic and geopolitical conditions. Political uncertainties
may cause serious disruption and additional trade barriers and
affect the company’s sales and credit risk. Economic downturns
may increase trade customers’ payment problems and Nokian Tyres
may need to recognize impairment of trade receivables.
• The tire wholesale and retail landscape is evolving to meet
changing consumer needs. New technologies are fueling this
with increasing digitalization. Failure to adapt to the changes in
the sales channel could have an adverse effect on Nokian Tyres’
financial performance.
• Nokian Tyres’ success is dependent on its ability to innovate and
develop new products and services that appeal to its customers
and consumers. Despite extensive testing of its products, product
quality issues and failure to meet demands of performance and
safety could harm Nokian Tyres’ reputation and have an adverse
effect on its financial performance.
Strategy Review
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84
• Any unexpected production or delivery breaks at Nokian Tyres’
production facilities or those of its contract manufacturing
partners would have a negative impact on the company’s business.
Interruptions in logistics could have a significant impact on
production and peak season sales.
In order to secure tire supply, Nokian Tyres has decided to invest
in new production capacity in Romania and increase the share
of outsourced production. Delay in these actions could have an
adverse effect on Nokian Tyres’ financial performance.
•
• Significant fluctuations in raw material prices may impact margins.
Nokian Tyres sources natural rubber from producers in countries
such as Indonesia and Malaysia. Although Nokian Tyres has policies
such as the Supplier Code of Conduct and established processes
to monitor the working conditions, it cannot fully control the
actions of its suppliers. Nokian Tyres continues to expand its
supplier portfolio to mitigate risks related to single-source
supplying and availability of sustainable raw materials. The non-
compliance with laws, regulations or standards by raw material
producers, or their divergence from practices generally accepted
as ethical in the European Union or the international community,
could have a material adverse effect on Nokian Tyres’ reputation.
• Tire industry can be subject to risks caused by climate change,
such as changes in consumer tire preferences, regulatory changes
or impact of extreme weather events on natural rubber producers.
Nokian Tyres is committed to reducing GHG emissions from its
operations in order to combat climate change. Nokian Tyres
calculates the GHG emissions from its operations annually and
reduces them systematically. More detailed analysis on Nokian
Tyres’ climate change related risks and opportunities is provided
at www.nokiantyres.com/company/sustainability/environment/
climate-change-related-risks-and-opportunities/.
• Foreign exchange risk consists of transaction risk and translation
risk. The most significant currency risks arise from the
Swedish and Norwegian krona, and the US and Canadian dollar.
Approximately 65% of the Group’s sales are generated outside of
the euro-zone.
•
• The availability of supporting information systems and network
services is crucial to Nokian Tyres. Unplanned interruption in
critical information systems or network services may cause
disruption to the continuity of operations. Such systems and
services may also be exposed to cyberattacks that could cause
a leakage of confidential information, violation of data privacy
regulations, theft of know-how and other intellectual property,
production shutdown or damage to reputation. Risk analyses and
projects related to information security, data protection, and
customer information are continuously a special focus area at
Nokian Tyres.
In May 2017, the Finnish Financial Supervisory Authority
filed a request for investigation with the National Bureau of
Investigation regarding possible securities market offences.
In October 2020, the prosecutor announced the decision to
press charges against a total of six persons who acted as Board
members and the President & CEO of Nokian Tyres in 2015–2016.
The prosecutor also claimed a corporate fine against the
company. In addition, four persons who were employees at Nokian
Tyres in 2015 were charged for abuse of inside information. The
District Court of Helsinki dismissed all charges and claims by
the prosecutor in its ruling in June 2022. The decision is not yet
legally binding, and the prosecutor has appealed against the
decision of the District Court.
• A new and more dangerous variant of COVID-19 or other similar
pandemics may slow down economic activity, and thus have a
negative impact on Nokian Tyres’ operations and supply chain as
well as the demand and pricing for the company’s products.
• Building a diverse customer base and fostering strong
relationships help mitigate sales risks associated with relying on a
limited number of large customers and create long-term stability
for the business.
• Nokian Tyres’ success relies heavily on employing the right
individuals in the right positions. Failing to attract competent
and committed professionals, coupled with an inability to
create a motivating work environment, may have an adverse
impact on the implementation of Nokian Tyres’ strategy and the
achievement of its financial targets.
• Various aspects of corporate sustainability, including product
•
quality, safety, the environment, and human rights, are
increasingly important. Non-compliance with the growing number
of new laws, regulations, and standards, particularly those related
to environmental, social and governmental (ESG) issues, or a lack
of full comprehension regarding their impact on the company’s
business and disclosure requirements, can potentially result in
fines and cause damage to the company’s reputation.
In January 2024, the European Commission initiated an
unannounced inspection at Nokian Tyres plc’s headquarters
in Nokia, Finland. The European Commission has expressed its
concerns that the inspected tire manufacturing companies
may have violated EU antitrust rules that prohibit cartels and
restrictive business practices. Nokian Tyres does not have
information on the outcome of the inspection, and it cannot
comment on the ongoing investigation. Nokian Tyres is fully
co-operating with the authorities.
Tax disputes
In April 2021, Nokian Tyres received a decision from the Tax
Administration after a tax audit regarding foreign withholding tax
on dividends, according to which the company was obliged to pay a
total of EUR 1.9 million additional taxes, tax increases and interest for
tax years 2015–2016. Taxes were paid and recognized in receivables.
Nokian Tyres considered the tax authority’s view unfounded and
appealed against the decision.
In December 2022, Nokian Tyres received a positive decision
from The Assessment Adjustment Board, according to which the
additional taxes, punitive tax increase and late payment interest
were removed. The Finnish tax authority refunded these in full to
the company in December 2022 and the company recognized the
amount in the same quarter cash flow. The Finnish Tax Authority
has applied for an amendment to the decision of the Assessment
Adjustment Board.
Routine tax audits in Nokian Tyres Group entities may possibly
lead to a reassessment of taxes.
Strategy Review
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Financial Statements
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Non-Financial Information
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85
34. Related party transactions
Parent and Group company relations:
Parent company
Nokian Tyres plc
Group companies
Nokian Heavy Tyres Ltd.
Levypyörä Oy
Nokian Däck AB
Nokian Dekk AS
Nokian Tyres GmbH
Nokian Tyres AG
Nokian Tyres SP Z.O.O
Nokian Tyres U.S. Holdings Inc.
Nokian Tyres Inc
Nokian Tyres U.S. Operations LLC
Nokian Tyres Canada Inc.
Nokian Tyres s.r.o.
TOV Nokian Shina
Nokian Tyres Holding Oy
Nokian Tyres Trading (Shanghai) Co Ltd
NT Tyre Machinery Oy
Koy Nokian Nosturikatu 18
Koy Nokian Rengaskatu 4
Nokian Portti Oy
Nokian Tyres Spain S.L.U.
Nokian Tyres Europe Operations S.R.L.
Nokian Tyres SAS
Nokia
Nokia
Nokia
Nokia
Turku
Group
holding, %
Voting
rights, %
Parent
company
holding, %
Domicile
Country
Nokia
Finland
Nokia
Nastola
Finland
Finland
Sweden
Norway
Germany
Switzerland
Poland
USA
USA
USA
Canada
Czech Rep.
Ukraine
Finland
China
Finland
Finland
Finland
Finland
Spain
Romania
France
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Nokianvirran Energia Oy
Vianor Holding Oy
Vianor Oy
Vianor AB
Nordic Wheels AB
Vianor AS
EAM NRE1V Holding Oy
Associated companies
Sammaliston Sauna Oy
Parent
company
holding, %
32.3
100
Domicile
Country
Nokia
Nokia
Finland
Finland
Lappeenranta Finland
Sweden
Sweden
Norway
Finland
Group
holding, %
Voting
rights, %
32.3
32.3
100
100
100
100
100
0
100
100
100
100
100
100
Nokia
Finland
33
33
33
Nokianvirran Energia Oy is a joint operation with three parties that supplies production steam for the tire
plant in Nokia. The parties share control according to a specific Mankala-principle where the company is not
intended to make profit while the parties have agreed to utilize the total output. The company is accounted
for as a Group company using the proportionate consolidation method on each row according to the 32.3%
shareholding.
The Board of Directors decided in their meeting on August 7, 2017, to implement a share acquisition and
administration arrangement of Nokian Tyres Plc (Nokian Tyres) shares with Evli Awards Management Oy (EAM)
according to the stipulations of the Companies Act for financing the purchase of own shares (the Finnish
Companies Act, Chapter 13, Section 10, Subsection 2) relating to incentive plans. As a part of this arrangement
EAM founded EAM NRE1V Holding Oy (Holding company) which acquires the shares with Nokian Tyres’s
funding and according to the agreement. These shares will be delivered to the employees according to the
Nokian Tyre’s share plan terms and conditions. The Holding company is owned by the EAM in legal terms, but
according to the agreement Nokian Tyres has control over the company and acts as the principal, whereas
EAM is an agent through the Holding company. This control arising from contractual terms means that the
Holding company is consolidated into the group’s IFRS financial statements as a structured entity.
Strategy Review
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86
1,000 euros
2023
2022
Prior members of the Board of Directors
Shares and share options granted to the President and other key
management personnel.
Raimo Lind
Heikki Allonen
Inka Mero
Total
-
4.2
4.2
5.6
-
-
718.6
736.1
No incentives were paid to the members of the Board of Directors. In
addition to the above remuneration, the Company paid asset transfer
taxes arising from the acquisition of shares from fixed pay.
1,000 euros
2023
2022
Other key management personnel
4,248.5
4,971.9
of which incentives for the reported period
1,888.6
2,413.9
No special pension commitments have been granted to the members
of the Board of Directors and no statutory pension expense incurs.
President and CEO Jukka Moisio does not have a supplementary
pension plan and his retirement age is in accordance with the
statutory pension regulations. The other management has a
supplementary pension plan of 10% of the annual salary and a
retirement age of 63 years.
No loans, guarantees or collaterals have been granted to the
related parties.
Granted, pcs
Shares
Share options
Held, pcs
Shares
Share options
Exercisable
2023
2022
313,565
113,907
-
-
126,224
72,525
-
-
-
-
No performance shares nor share options have been granted to the
members of the Board of Directors.
35. Events after the reporting date
Nokian Tyres informed on January 30, 2024, that The European
Commission has at the same day initiated an unannounced
inspection at Nokian Tyres plc’s headquarters in Nokia, Finland. The
European Commission has expressed its concerns that the inspected
tyre manufacturing companies may have violated EU antitrust rules
that prohibit cartels and restrictive business practices. Nokian Tyres
does not have information on the outcome of the inspection, and it
cannot comment on the ongoing investigation. Nokian Tyres is fully
co-operating with the authorities.
The related parties of the Group consist of members of the Board of
Directors, the President, other key management personnel, and close
members of their families.
Transactions and outstanding balances with parties having
significant influence
1,000 euros
2023
2022
Key management personnel
Employee benefit expenses
Short-term employee benefits
5,687.4
6,694.2
Post-employment benefits
Termination benefits
Share-based payments
Total
Remunerations
Jukka Moisio, President and CEO
(May 27, 2020–)
0.0
0.0
700.7
0.0
0.0
516.1
6,388.1
7,210.3
1,421.0
1,502.3
of which incentives for the reported period
538.7
730.8
Members of the Board of Directors
Jukka Hienonen
Pekka Vauramo
Heikki Allonen
Veronica Lindholm
Inka Mero
George Rietbergen
Susanne Hahn
Christopher Ostrander
Jouko Pölönen
Reima Rytsölä
Markus Korsten
121.9
86.9
-
86.9
-
64.4
67.2
72.8
86.9
60.9
62.3
126.1
90.4
67.2
91.1
67.9
67.2
61.6
68.6
90.4
-
-
Parent company financial statements
Strategy Review
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87
Parent company income statement, FAS
EUR
Net sales
Cost of sales
Gross profit
Note
2023
2022
1
712,531,189.30
803,648,640.63
2, 3
-590,984,413.66
-741,142,612.20
121,546,775.64
62,506,028.43
Selling, marketing and R&D expenses
2, 3
-33,974,308.84
-42,494,998.20
Administration expenses
Other operating expenses
Other operating income
2, 3, 4
-48,827,867.60
-55,989,297.44
2, 3
-72,707,151.26
-18,766,363.50
450,551.00
413,617.52
Operating profit
-33,512,001.06
-54,331,013.19
Financial income and expenses
5
227,568,009.08
106,266,390.84
Profit before appropriations and tax
194,056,008.02
51,935,377.65
Appropriations
Income tax
Profit for the period
6
7
620,081.12
2,675,338.50
9,044,866.45
-6,181,738.89
203,720,955.59
48,428,977.26
The accounting principles of the parent company and the group have been harmonized. From 2023, financial
instruments will be subscribed fair value (Act 5:2a) and deferred taxes are recorded in the parent’s income
statement and balance sheet (Act 5:18).
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88
Parent company balance sheet, FAS
EUR
Assets
Fixed assets and other non-current assets
Intangible assets
Tangible assets
Shares in Group companies
Investments in associates
Shares in other companies
Unquoted securities
Total non-current assets
Current assets
Inventories
Non-current receivables
Current receivables
Cash and cash equivalents
Total current assets
Note
2023
2022
EUR
Note
2023
2022
Liabilities and shareholder’s equity
8
8
9
9
9
9
8,158,113.80
7,348,806.48
198,527,380.21
175,582,825.78
569,526,472.26
423,461,911.32
Shareholders' equity
Share capital
Share premium
Treasury shares
4,261,050.20
4,261,050.20
Fair value and hedging reserves
153,111.50
153,111.50
Paid up unrestricted equity fund
2,705,882.35
2,803,300.21
Retained earnings
783,332,010.32
613,611,005.49
Profit for the period
Total shareholders' equity
14
25,437,906.00
25,437,906.00
182,505,622.52
182,505,622.52
-16,678,211.37
-16,563,737.72
1,605,198.77
10,543,503.34
238,231,226.51
238,231,226.51
434,143,287.09
461,716,033.70
203,720,955.59
48,428,977.26
1,068,965,985.11
950,299,531.61
10
231,448,002.79
207,617,297.09
Untaxed reserves and provisions
11, 12
206,820,763.01
222,618,133.94
Accumulated depreciation in excess of plan
8
32,755,575.49
27,076,656.61
13
237,688,248.76
393,166,339.82
390,239,744.15
165,792,598.95
Liabilities
1,066,196,758.71
989,194,369.80
Non-current liabilities
1,849,528,769.03
1,602,805,375.29
Current liabilities
Total liabilities
12, 15
400,205,608.82
106,580,620.55
16
347,601,599.61
518,848,566.52
747,807,208.43
625,429,187.07
1,849,528,769.03
1,602,805,375.29
The accounting principles of the parent company and the group have been harmonized. From 2023, financial
instruments will be subscribed fair value (Act 5:2a) and deferred taxes are recorded in the parent’s income
statement and balance sheet (Act 5:18).
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
89
Parent company statement of cash flows, FAS
EUR million
Profit for the period
Adjustments for
Depreciation, amortization and impairment
Financial income and expenses
Gains and losses on sale of intangible assets, other changes
Income Taxes
Cash flow before changes in working capital
Changes in working capital
Current receivables, non-interest-bearing, increase (-) / decrease (+)
Inventories, increase (-) / decrease (+)
Current liabilities, non-interest-bearing, increase (+) / decrease (-)
Changes in working capital
Financial items and taxes
Interest and other financial items, received
Interest and other financial items, paid
Dividends received
Income taxes paid
Financial items and taxes
Cash flow from operating activities (A)
2023
203.7
32.8
-227.6
-0.6
-9.0
-0.7
20.3
-23.8
99.8
96.2
28.9
-29.3
232.2
-0.4
231.4
327.0
2022
48.4
32.9
-106.3
0.6
6.2
-18.1
62.7
-86.5
-36.8
-60.5
8.8
-44.8
30.2
-3.4
-9.1
-87.8
2023
2022
EUR million
Cash flows from investing activities
Acquisitions of property, plant and equipment and intangible assets
Proceeds from sale of property, plant and equipment and
intangible assets
Acquisitions of other investments
Cash flows from investing activities (B)
Cash flow from financing activities:
Change in current financial receivables, increase (-) / decrease (+)
Change in non-current financial receivables, increase (-) / decrease (+)
Change in current financial borrowings, increase (+) / decrease (-)
Change in non-current financial borrowings, increase (+) / decrease (-)
Group contributions
Dividends paid
Cash flow from financing activities (C)
-57.5
0.6
-146.1
-203.0
123.1
22.5
-273.9
295.8
5.0
-72.2
100.4
Change in cash and cash equivalents, increase (+) / decrease (-) (A+B+C)
224.4
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
165.8
390.2
-49.9
0.7
-23.0
-72.2
-115.3
77.9
126.4
0.0
-12.6
-89.7
-13.2
-173.2
339.0
165.8
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
90
Accounting policies for the parent company
Land property, as well as investments in shares, are not regularly
depreciated.
All foreign currency exchange gains and losses are entered under
financial income and expenses.
General
The financial statements of Nokian Tyres plc, domiciled in the city
of Nokia, have been prepared according to the Finnish Accounting
Standards (FAS).
Inventory valuation
Inventories are measured at the lower of cost or the net realizable
value. Cost is primarily determined in accordance with standard cost
accounting. The cost of finished goods and work in progress includes
raw material purchase costs, direct manufacturing wages, other
direct manufacturing costs, and a share of production overheads,
borrowing costs excluded. Net realizable value is the estimated
sales price in ordinary activities less the costs associated with the
completion of the product and the estimated necessary costs
incurred to make the sale of the product. Allowance is recorded in
obsolete items.
Research and development
Research and development costs are charged to the other operating
expenses in the income statement in the year in which they are
incurred. Certain significant development costs with useful life over
three years are capitalized and are amortized on a systematic basis
over their expected useful lives. The amortization period is between
three and five years.
Pensions and coverage of pension liabilities
Pension contributions are based on periodic actuarial calculations
and are charged to the income statement.
In Finland the pension schemes are funded through payments to
a pension insurance company.
Fixed assets and depreciation
Equity
Fixed assets are stated in the balance sheets at cost less
depreciation according to plan. The accumulated difference
between the total depreciation charged to the income statement
and depreciation according to plan is shown as a separate item in
untaxed reserves.
Depreciations according to plan are calculated on the basis of the
estimated useful life of the assets using the straight line method.
The depreciation times are as follows:
Intangible assets
Buildings
Machinery and equipment
Other tangible assets
3–10 years
20–40 years
4–20 years
10–40 years
The acquisition cost of treasury shares repurchased by the Group is
recognized as a deduction in equity. The consideration received for
the treasury shares when sold, net of transaction costs and tax, is
included in equity.
Foreign currency items
Transactions in foreign currencies are recorded at the exchange
rates ruling at the dates of the transactions. At the end of
the accounting period unsettled balances on foreign currency
transactions and forward exchange contracts are valued at the
rates published by the European Central Bank as on the financial
statement date. If European Central Bank doesn’t quote a currency,
the exchange rates announced by that country are used.
Taxes
Taxes in the income statement include taxes calculated from the
financial year’s result based on Finnish tax regulations, adjustments
to taxes from previous financial years and deferred taxes. Deferred
tax liability or asset is calculated from all temporary differences
between accounting and taxation using the tax rate for the following
years confirmed at the time of closing the accounts. Deferred tax
liabilities are recorded in the balance sheet in their full amount and
deferred tax assets in the amount of the estimated probable tax
benefit.
Fair values of derivative financial instruments
Derivative contracts are initially recorded in the balance sheet at
fair value and later valued at fair value in the financial statements
(Act 5:2a). The valuation of derivatives and the principles of hedge
accounting are explained in more detail in the group note 30.
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
91
Notes to the financial statements of the parent company
1. Net sales by segments and market areas
2. Wages, salaries and social expenses
3. Depreciation
EUR million
Passenger Car Tyres
Heavy Tyres
Total
Finland
Nordics
Other Europe
Americas
Other countries
Total
2023
488.7
223.8
712.5
217.1
194.7
200.8
92.5
7.5
712.5
2022
570.4
233.2
803.6
159.7
222.9
227.7
167.4
25.9
803.6
EUR million
Wages and salaries
Pension contributions
Other social expenses
Total
Remuneration of the members of
the Board of the Directors and the
President on accrual basis
of which incentives
2023
2022
EUR million
2023
2022
59.9
10.2
0.9
71.1
60.7
10.3
2.2
73.3
2.1
0.5
2.2
0.7
Depreciation according to plan by asset
category
Intangible assets
Buildings
Machinery and equipment
Other tangible assets
Total
Impairment losses by asset category
No special pension commitments have been granted to the members
of the Board of Directors and no statutory pension expense incurs.
President and CEO Jukka Moisio does not have a supplementary
pension plan and his retirement age is in accordance with the
statutory pension regulations. More details in the group note 34
Related party transactions.
Buildings
Machinery and equipment
Total
Depreciation by function
Production
Selling, marketing and R&D
Personnel, average during the year
Total
2023
848
2022
854
Administration
Total
Impairment losses by function
Production
Administration
Total
3.0
2.2
26.8
0.5
32.4
-
-
-
24.7
3.3
4.5
32.4
-
-
-
4.0
2.3
22.7
0.4
29.4
2.3
1.1
3.4
20.4
3.7
5.4
29.4
1.0
2.4
3.4
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
92
4. Auditors’ fees
5. Financial income and expenses
EUR million
Audit fee
Other services
Total
2023
2022
EUR million
2023
2022
0.8
0.0
0.8
0.7
0.1
0.7
Dividend income
From the Group companies
Total
Interest income, non-current
From the Group companies
Total
232.2
232.2
153.8
153.8
9.3
9.3
11.1
11.1
Income from shares in companies of the
same Group
0.5
1.2
Other interest and financial income
From the Group companies
From others
Total
5.1
10.3
15.5
4.3
0.7
5.0
Exchange rate differences (net)
-3.9
-27.1
Impairment, long-term investments
-
-18.7
Interest and other financial expenses
To the Group companies
To others
Other financial expenses
Total
-5.0
-18.1
-2.8
-25.9
-14.6
-3.4
-1.0
-19.0
Total financial income and expenses
227.6
106.3
In March 2023, Nokian Tyres plc announced the completion of the
sale of its operations in Russia to PJSC Tatneft, after which all Nokian
Tyres’ operations in Russia ended and the company’s personnel in
Russia was transferred to the new owner. The closing date of sale
transaction of Russian operations is considered to be March 16, 2023,
when the sale price was received. Income and expenses related to the
exit from Russian operations have been netted.
6. Appropriations
EUR million
2023
2022
Change in accumulated depreciation
in excess of plan
Intangible assets
Buildings
Machinery and equipment
Other tangible assets
Total
Other appropriations
Group contributions
Total
Total appropriations
0.2
0.2
-6.0
0.0
-5.7
6.3
6.3
0.6
0.4
2.4
-5.1
0.0
-2.3
5.0
5.0
2.7
7. Income tax
EUR million
Direct tax for the year
Direct tax from previous years
Change in deferred tax
Total
2023
2022
-0.2
-0.1
9.3
9.0
-6.2
0.0
-
-6.2
The accounting principles of the parent company and the group
have been harmonized. From 2023, financial instruments will be
subscribed fair value (Act 5:2a) and deferred taxes are recorded in
the parent’s income statement and balance sheet (Act 5:18).
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
93
8. Fixed assets
EUR million
Accumulated cost, Jan 1, 2023
Increase
Decrease
Transfer between items
Accumulated cost, Dec 31, 2023
Accum. depr. acc. to plan Jan 1, 2023
Accum. depr. on disposals
Depreciations for the period
Impairment
Accum. depr. acc.to plan, Dec 31, 2023
Carrying amount, Dec 31, 2023
Carrying amount, Dec 31, 2022
Accum. depreciation in excess of plan, Dec 31, 2023
Accum. depreciation in excess of plan, Dec 31, 2022
Intangible assets
Tangible assets
Intangible
rights
67.2
0.5
-
3.3
71.0
-60.0
-
-2.9
-62.9
8.1
7.2
1.0
1.2
Other
intangible
rights
9.6
9.6
-9.5
0.0
-9.6
0.1
0.1
0.0
0.0
Land
property
Buildings
Machinery
and equip-
ment
Other
tangible
assets
Advances and
fixed assets
under con-
struction
3.9
0.1
0.0
4.0
4.0
3.9
-
-
91.2
535.0
8.8
-6.2
38.7
576.3
-430.2
5.5
-26.8
-
-451.5
124.8
104.8
23.0
17.0
1.4
92.6
-53.7
-2.2
-
-55.9
36.8
37.6
8.4
8.6
8.3
0.0
0.5
8.8
-4.9
-0.5
-5.4
3.5
3.4
0.3
0.2
25.9
47.5
-43.9
29.4
29.4
25.9
9. Investments
EUR million
Accumulated cost, Jan 1, 2023
Decrease
Increase
Impairment losses
Exchange rate difference
Accumulated cost, Dec 31, 2023
Carrying amount, Dec 31, 2023
Carrying amount, Dec 31, 2022
10. Inventories
EUR million
Raw materials and supplies
Work in progress
Finished goods
Total
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
94
12. Deferred tax assets and liabilities
Shares in Group
companies
Investments in
associates
Shares in other
companies
Unquoted
securities
2.8
EUR million
Recognized
in income
statement
Fair
value
changes
31.12.
2022
31.12.
2023
423.5
-3.1
149.2
-
569.5
569.5
423.5
4.3
4.3
4.3
4.3
0.2
-
-
0.2
0.2
0.2
11. Non-current receivables
2023
2022
EUR million
74.2
3.5
153.7
231.4
117.2
3.4
87.0
207.6
Loan receivables from the Group companies
Loan receivables from others
Other non-current receivables
Deferred tax assets
Total long-term receivables
2023
181.3
0.5
0.0
25.0
206.8
-0.1
2.7
2.7
2.8
2022
203.8
0.6
2.5
15.7
222.6
The members of the Board of Directors and the President have not
been granted loans.
The accounting principles of the parent company and the group
have been harmonized. From 2023, financial instruments will be
subscribed fair value (Act 5:2a) and deferred taxes are recorded in
the parent’s income statement and balance sheet (Act 5:18). The
impact of the change on other non-current receivables in 2022 is
EUR 2.5 million and on deferred tax assets EUR 15.7 million.
Deferred tax assets
Provisions and accruals
Tax losses carried forward
Cash flow hedges
Total
0.2
15.5
0.0
15.7
9.3
9.3
0.2
24.8
0.0
25.0
0.0
0.0
EUR million
Deferred tax liabilities
Cash flow hedges
Total
Recognized
in income
statement
Fair
value
changes
31.12.
2022
31.12.
2023
2.6
2.6
-2.2
-2.2
0.4
0.4
The accounting principles of the parent company and the group
have been harmonized. From 2023, financial instruments will be
subscribed fair value (Act 5:2a) and deferred taxes are recorded in
the parent’s income statement and balance sheet (Act 5:18). The
impact of the change on deferred tax assets in 2022 is EUR 15.7
million and on deferred tax liabilities EUR 2.6 million.
On December 31, 2023 the parent company had carry forward
losses for EUR 124.1 (77.7) million, of which a deferred tax assets has
been recognized. Carry forward losses EUR 124.1 million will expire
during years 2032 and 2033.
The calculated tax liability of accumulated depreciation
differences not recorded in the balance sheet in 2023 was EUR 6.6
million.
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
95
13. Current receivables
14. Shareholders’ equity
EUR million
EUR million
2023
2022
EUR million
2023
2022
Total non-restricted shareholders’ equity
2023
859.4
2022
731.8
Receivables from the Group companies
Restricted shareholders' equity
Trade receivables
Loan receivables
Accrued revenues and deferred expenses
Total
Trade receivables
Other receivables
Accrued revenues and deferred expenses
Total
128.3
28.0
24.7
181.0
39.6
6.9
10.2
56.7
151.0
151.2
30.4
332.6
35.0
5.0
20.6
60.6
Total short-term receivables
237.7
393.2
Significant items under accrued revenues
and deferred expenses
Financial items
Taxes
Social payments
Capital expenditure in factories
Goods and services rendered and not
invoiced, subsidiary
Group contributions
Other items
Total
11.7
0.2
0.3
0.0
12.3
6.3
3.9
34.9
19.7
0.1
0.4
0.0
15.3
5.0
10.6
51.0
The accounting principles of the parent company and the group
have been harmonized. From 2023, financial instruments will be
subscribed fair value (Act 5:2a) and deferred taxes are recorded in
the parent’s income statement and balance sheet (Act 5:18). The
impact of the change on external accrued revenues and deferred
expenses in 2022 is EUR 10.7 million.
Share capital, Jan 1
Emissions
Share capital, Dec 31
Share issue premium, Jan 1
Emission gains
Share issue premium, Dec 31
Fair value and hedging reserves, Jan 1
Fair value changes
25.4
-
25.4
25.4
-
25.4
182.5
182.5
-
-
182.5
182.5
10.5
-8.9
-
-
Fair value and hedging reserves, Dec 31
1.6
10.5
Total restricted shareholders’ equity
209.5
218.5
Non-restricted shareholders’ equity
Paid-up unrestricted equity reserve, Jan 1
238.2
238.2
Emission gains
-
-
Paid-up unrestricted equity reserve, Dec 31
238.2
238.2
Retained earnings, Jan 1
Dividends to shareholders
Changes in accounting principles
Retained earnings, Dec 31
510.1
-76.0
-
434.1
522.0
-76.0
15.7
461.7
Treasury shares
-16.7
-16.6
Profit for the period
203.7
48.4
Total shareholders’ equity
1,069.0
950.3
Specification of the distributable funds,
Dec 31
Retained earnings
Treasury shares
Paid-up unrestricted equity reserve
Profit for the period
Distributable funds, Dec 31
434.1
-16.7
238.2
203.7
859.4
461.7
-16.6
238.2
48.4
731.8
The accounting principles of the parent company and the group have
been harmonized.
From 2023, financial instruments will be subscribed fair value
(Act 5:2a) and deferred taxes are recorded in the parent’s income
statement and balance sheet (Act 5:18).
Due to this change, financial instruments have been recorded in
fair value and hedging reserves and retained earnings for 2022 have
been restated EUR 15.7 million. The 2023 financial statements include
the fair value and hedging reserves comparison figure for the year
2022.
No share repurchases were made during the review period, and the
company did not possess any own shares on December 31, 2023.
Nokian Tyres has an agreement from 2017 with a third-party
service provider concerning the share-based incentive program for
key personnel. The third party owns Nokian Tyres’ shares related to
the incentive program until the shares are given to the participants of
the program. In accordance with IFRS, these repurchased shares have
been reported as treasury shares in the Consolidated Statement of
Financial Position. On December 31, 2023, the number of these shares
was 1,054,507 (670,426). On December 31, 2023 this number of shares
corresponded to 0.76 (0.48) percent of the total shares and voting
rights in the company.
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
96
15. Non-current liabilities
16. Current liabilities
EUR million
2023
2022
2023
2022
EUR million
2023
2022
EUR million
Interest-bearing
Bonds
Loans from financial institutions
Deferred tax liabilities
Total
99.2
300.0
0.4
399.7
-
103.3
2.6
106.0
Non-interest-bearing
Accrued expenses and deferred revenues
Total
0.5
0.5
0.6
0.6
Nokian Tyres plc issued euro-denominated senior unsecured
sustainability-linked bonds in a nominal amount of EUR 100 million on
June 14, 2023. The bonds bear an annual interest at the rate of 5.125
percent and will mature on June 14, 2028.
From 2023, financial instruments will be subscribed fair value
(Act 5:2a) and deferred taxes are recorded in the parent’s income
statement and balance sheet (Act 5:18). The impact of the change on
deferred tax liabilities in 2022 is EUR 2.6 million.
Total non-current liabilities
400.2
106.6
Trade payables
Interest-bearing
Liabilities to the Group companies
Finance loans
106.3
219.3
Commercial papers
-
10.9
Total interest-bearing liabilities
106.3
230.2
Non-interest-bearing
Liabilities to the Group companies
Accrued expenses and deferred revenues
Total
Trade payables
Liabilities to the others
Accrued expenses and deferred revenues
12.1
8.2
20.3
77.5
114.5
28.9
9.8
26.5
36.4
52.1
157.0
43.1
Total
221.0
252.3
Total non-interest-bearing liabilities
241.3
288.6
Total current liabilities
347.6
518.8
Significant items under accrued expenses
and deferred revenues
Wages, salaries and social security
contributions
Annual discounts, sales
Financial items
Commissions
Warranty commitments
Other items
Total
9.6
10.2
7.4
-
0.9
9.1
37.2
17.5
13.0
2.4
0.1
0.9
35.8
69.7
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
97
17. Contingent liabilities
18. Derivative financial instruments
EUR million
For own debt
Pledged assets
2023
2022
EUR million
2023
2022
4.0
4.8
Interest rate swaps
Interest rate derivatives
On behalf of Group companies and
investments in associates
Guarantees
Pledged assets
112.5
2.0
130.9
2.0
The amount of debts and commitments mortgaged for total
EUR 98.3 (115.0) million.
Other own commitments
Guarantees
Leasing and rent commitments
Payments due in 2024
Payments due in subsequent years
-
9.2
8.2
0.3
5.9
4.0
Notional amount
Fair value
150.0
100.0
1.6
3.9
Foreign currency derivatives
Currency forwards
Notional amount
Fair value
Currency options, purchased
Notional amount
Fair value
Currency options, written
Notional amount
Fair value
Interest rate and currency swaps
Notional amount
Fair value
Electricity derivatives
Electricity forwards
Notional amount
Fair value
239.8
1.1
189.3
1.7
6.7
0.0
15.6
-0.3
-
-
4.8
0.0
11.8
-0.1
18.4
0.4
9.1
0.7
6.9
9.4
Unrealized fair value changes of interest rate and electricity
derivatives are not recognized in profit and loss. The interest
rate swap hedges the future interest payments of a loan from a
financial institution and the electricity forwards hedge the future
electricity purchase prices in Finland. The contractual terms of these
derivatives and the hedged items are congruent. The cash flows of
the interest rate swaps, and electricity forwards will occur during the
next four years.
The fair value of forward exchange contracts is measured using
the forward rates on the reporting date. The fair value of currency
options is calculated using an option valuation model.
The fair values of interest rate and currency swaps and interest
rate derivatives are determined as the present value of the future
cash flows based on market interest rates on the reporting date.
The fair value of electricity derivatives is based on quoted market
prices in active markets on the reporting date.
19. Environmental commitments and
expenses
Expenses relating to environment are included to production costs.
The company has duly attended to environmental commitments and
has no information on material environmental liabilities. In addition to
the environmental aspects presented in the Annual Report, Nokian
Tyres issued a Corporate Social Responsibility Report in spring 2023.
Signatures of the Board of Directors and the auditor’s note
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
98
Signatures for the financial
statements and the report
by the Board of Directors
The auditor’s note
Report on the audit of the financial statements has been given today.
Helsinki, February 6, 2024
Jukka Hienonen
Pekka Vauramo
Susanne Hahn
Markus Korsten
Veronica Lindholm
Christopher Ostrander
Jouko Pölönen
George Rietbergen
Reima Rytsölä
Jukka Moisio
President and CEO
Helsinki, February 13, 2024
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Järventausta
APA
Auditor’s report
(Translation of the Finnish original)
To the Annual General Meeting of Nokian Tyres plc
Report on the Audit of the Financial
Statements
Opinion
We have audited the financial statements of Nokian Tyres plc
(business identity code 0680006-8) for the year ended 31 December,
2023. The financial statements comprise the consolidated balance
sheet, income statement, statement of comprehensive income,
statement of changes in equity, statement of cash flows and notes,
including material accounting policy information, as well as the
parent company’s balance sheet, income statement, statement of
cash flows and notes.
In our opinion
•
•
the consolidated financial statements give a true and fair view
of the group’s financial position , financial performance and cash
flows in accordance with IFRS Accounting Standards as adopted
by the EU.
the financial statements give a true and fair view of the
parent company’s financial performance and financial position
in accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with
statutory requirements.
Our opinion is consistent with the additional report submitted to the
Audit Committee.
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We have fulfilled the responsibilities described in the Auditor’s
responsibilities for the audit of the financial statements section
of our report, including in relation to these matters. Accordingly,
our audit included the performance of procedures designed to
respond to our assessment of the risks of material misstatement
of the financial statements. The results of our audit procedures,
including the procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying financial
statements.
We have also addressed the risk of management override of
internal controls. This includes consideration of whether there was
evidence of management bias that represented a risk of material
misstatement due to fraud.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in
Finland. Our responsibilities under good auditing practice are further
described in the Auditor’s Responsibilities for the Audit of the
Financial Statements section of our report.
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our audit, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
In our best knowledge and understanding, the non-audit services
that we have provided to the parent company and group companies
are in compliance with laws and regulations applicable in Finland
regarding these services, and we have not provided any prohibited
non-audit services referred to in Article 5(1) of regulation (EU)
537/2014. The non-audit services that we have provided have been
disclosed in note 6 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in
the context of our audit of the financial statements as a whole, and
in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
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Key Audit Matter
Revenue recognition
We refer to the accounting policies for the consolidated financial statements and the note 1.
How our audit addressed the Key Audit Matter
The Group’s revenue is recognized when control of the good or service is transferred to the customer.
Revenue is a key financial performance measure which could create an incentive for revenues to be
recognized prematurely. Due to the variety of contractual terms used across the Group’s markets
management judgment is needed to account for the revenue.
Our audit procedures to address the risk of material misstatement in respect of revenue recognition, included,
among others:
• Assessment of the compliance of the Group’s accounting policies over revenue recognition, including those
relating to discounts and credits, against IFRS standards.
Customer discounts and credits are considered when determining the revenue. Estimating discounts and
credits require also management judgment both at the time of revenue recognition as well as at the end of
each reporting period. Based on above, revenue recognition, was a key audit matter.
This matter was also a significant risk of material misstatement referred to in EU Regulation No 537/2014,
point (c) of Article 10(2).
• Assessment of the revenue recognition process especially relating to timing of revenue recognition, and
calculation of discounts and credits.
• Data analytical procedures, for example, analyzing the conversion of revenue to cash received.
• Familiarizing ourselves with the contractual terms in sales agreements. Testing the revenue cut-off with
analytical procedures and with a sample test of details on a transaction level on either side of the balance
sheet date. Testing of revenue discounts and credits on a sample basis.
• Analyzing credit notes.
• Assessment of the Group’s disclosures in respect of revenues.
Valuation of goodwill
The accounting principles and disclosures about goodwill are included in note 14.
As of balance sheet date December 31, 2023, the value of goodwill amounted to EUR 62.3 million representing
2.7% of the total assets and 4.6% of the total equity.
Our audit procedures in respect of valuation of goodwill included, among others:
• Evaluation of the determination of cash generating units and the goodwill allocated to those units.
The annual impairment testing of goodwill was based on the management’s estimate about the value-in-use
of the cash generating units. There are a number of assumptions used to determine the value-in-use of the
cash generating units, including revenue growth, margins and the discount rate applied on net cash-flows. The
estimated value-in-use may vary significantly when underlying assumptions are changed and the changes in
above-mentioned individual assumptions may result in an impairment of goodwill.
•
Involvement of our valuation specialists to assist us in evaluating the key assumptions used in impairment
testing. The procedures included also the comparison of the management’s assumptions to externally
derived data, in particular those relating to
• the forecasted revenue growth,
• the forecasted margin and
• the weighted average cost of capital used to discount the net cash-flows.
The valuation of goodwill was a key audit matter because the annual impairment testing included
management judgment with respect to the key assumptions used and because of the significance of goodwill
to the financial statements.
• Testing of the accuracy of the impairment calculations prepared by the management and comparison of the
sum of discounted cash flows against Nokian Tyres’ market capitalization.
• Evaluation of the adequacy of the disclosures of the impairment testing results.
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Responsibilities of the Board of Directors and the
Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible
for the preparation of consolidated financial statements that give
a true and fair view in accordance with IFRS Accounting Standards
as adopted by the EU, and of financial statements that give a
true and fair view in accordance with the laws and regulations
governing the preparation of financial statements in Finland and
comply with statutory requirements. The Board of Directors and the
Managing Director are also responsible for such internal control as
they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the Board of Directors
and the Managing Director are responsible for assessing the parent
company’s and the group’s ability to continue as going concern,
disclosing, as applicable, matters relating to going concern and using
the going concern basis of accounting. The financial statements are
prepared using the going concern basis of accounting unless there is
an intention to liquidate the parent company or the group or cease
operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance on whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted in
accordance with good auditing practice will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional skepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the parent company’s or the group’s
internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of the Board of Directors’
and the Managing Director’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions
that may cast significant doubt on the parent company’s or the
group’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future
events or conditions may cause the parent company or the group
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events so that the financial statements give a true and fair view.
• Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
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Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting
on March 30, 2021, and our appointment represents a total period of
uninterrupted engagement of three years.
Other information
The Board of Directors and the Managing Director are responsible
for the other information. The other information comprises the
report of the Board of Directors and the information included in the
Annual Report, but does not include the financial statements and our
auditor’s report thereon. We have obtained the report of the Board
of Directors prior to the date of this auditor’s report, and the Annual
Report is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other
information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. With respect to report of the Board of Directors, our
responsibility also includes considering whether the report of
the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
In our opinion, the information in the report of the Board
of Directors is consistent with the information in the financial
statements and the report of the Board of Directors has been
prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have
nothing to report in this regard.
Opinions based on assignment of the Audit Committee
We support that the financial statements should be adopted.
The proposal by the Board of Directors regarding the use of
the distributable funds shown in the financial statements is in
compliance with the Limited Liability Companies Act. We support
that the Members of the Board of Directors and the Managing
Director of the parent company should be discharged from liability
for the financial period audited by us.
Helsinki, February 13, 2024
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Järventausta
Authorized Public Accountant
ESEF assurance report
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Independent auditor’s report on Nokian Tyres plc’s
ESEF-consolidated financial statements
(Translation of the Finnish original)
To the Board of Directors of Nokian
Renkaat Oyj
We have performed a reasonable assurance engagement on the
iXBRL tagging of the consolidated financial statements included
in the digital files tyres-2023-12-31-fi.zip of Nokian Renkaat
Oyj (business identity code: 0680006-8) for the financial year
1.1.–31.12.2023 to ensure that the financial statements are marked/
tagged with iXBRL in accordance with the requirements of Article 4
of EU Commission Delegated Regulation (EU) 2018/815 (ESEF RTS).
Responsibilities of the Board of Directors and
Managing Director
The Board of Directors and Managing Director are responsible for
the preparation of the Report of Board of Directors and financial
statements (ESEF financial statements) that comply with the ESEF
RTS. This responsibility includes:
• Preparation of ESEF-financial statements in accordance with
Article 3 of ESEF RTS
• Tagging the primary financial statements, notes to the
financial statements and the entity identifier information in the
consolidated financial statements included within the ESEF-
financial statements by using the iXBRL mark ups in accordance
with Article 4 of ESEF RTS
• Ensuring consistency between ESEF financial statements and
the preparation of ESEF financial statements in accordance the
requirements of ESEF RTS.
• whether the ESEF-financial statements are consistent with the
audited financial statements.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical
requirements that are applicable in Finland and are relevant to the
engagement we have performed, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The firm applies International Standard on Quality Management
(ISQM) 1, which requires the firm to design, implement and operate
a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Auditor’s Responsibilities
In accordance with the Engagement Letter we will express an
opinion on whether the electronic tagging of the consolidated
financial statements complies in all material respects with the
Article 4 of ESEF RTS. We have conducted a reasonable assurance
engagement in accordance with International Standard on Assurance
Engagements ISAE 3000.
The nature, timing and extent of the procedures selected depend on
the auditor’s judgement including the assessment of risk of material
departures from requirements sets out in the ESEF RTS, whether due
to fraud or error.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our statement.
Opinion
In our opinion the tagging of the primary financial statements, notes
to the financial statements and the entity identifier information in
the consolidated financial statements included in the ESEF financial
statements tyres-2023-12-31-fi.zip of Nokian Renkaat Oyj for the
year ended 1.1.–31.12.2023 complies in all material respects with the
requirements of ESEF RTS.
Our audit opinion on the consolidated financial statements of
Nokian Renkaat Oyj for the year ended 1.1.–31.12.2023 is included in
our Independent Auditor’s Report dated 13.2.2024. In this report,
we do not express an audit opinion any other assurance on the
consolidated financial statements.
The engagement includes procedures to obtain evidence on:
• whether the tagging of the primary financial statements in
Helsinki 29.2.2024
the consolidated financial statements complies in all material
respects with Article 4 of the ESEF RTS
Ernst & Young Oy
Authorized Public Accountant Firm
audited financial statements.
• whether the tagging of the notes to the financial statements
The Board of Directors and Managing Director are also responsible
for such internal control as they determine is necessary to enable
and the entity identifier information in the consolidated financial
statements complies in all material respects with Article 4 of the
ESEF RTS
Mikko Järventausta
Authorized Public Accountant
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Information on Nokian Tyres’ share
Share data
Number of shareholders on December 31, 2023
Share trading volumes on NASDAQ Helsinki
Jan 1, 2019–Dec 31, 2023, pcs million
Market
Listing date
Currency
ISIN
Symbol
Reuters symbol
Bloomberg symbol
Market capitalization segment
Sector
Industry
Number of shares, December 31, 2023
Nasdaq Helsinki
June 1, 1995
euro
FI0009005318
TYRES
TYRES.HE
TYRES:FH
OMXH Large Caps
Consumer goods
Automobiles and parts
138,921,750
Share capital and shares
The company has one class of shares, each share entitling the
shareholder to one vote and carrying equal rights to a dividend. On
December 31, 2023, the number of shares was 138,921,750. Read
more: www.nokiantyres.com/company/investors/share/share-
information/
Number
of share-
holders
42,086
33,157
9,319
8,143
857
451
39
25
15
Number of shares
1–100
101–500
501–1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001–500,000
500,001–
Total
% of share-
holders
Total
number of
shares
% of share
capital
44.73
1,896,485
35.24
8,497,497
9.90
8.65
0.91
0.48
0.04
0.03
7,176,698
17,239,416
6,116,440
8,781,355
2,726,106
6,384,221
0.02 80,103,532
1.37
6.12
5.17
12.41
4.40
6.32
1.96
4.60
57.66
100
94,092
100 138,921,750
Shareholder structure on December 31, 2023
Number of
shares
% of share
capital
Nominee registered and non-Finnish
holders
Households
General Government
Financial and insurance corporations
Non-profit institutions
Corporations
Total
53,542,135
42,679,207
24,250,308
7,429,468
3,021,118
7,999,514
138,921,750
38.54
30.72
17.46
5.35
2.18
5.76
100
20
15
10
5
0
2019
2020
2021
2022
2023
Share price development on NASDAQ Helsinki
Jan 1, 2019–Dec 31, 2023, EUR
40
30
20
10
0
2019
2020
2021
2022
2023
Read more: www.nokiantyres.com/company/investors/share/major-
shareholders/
Read more: www.nokiantyres.com/company/investors/share/
share-performance/
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Nokian Tyres
group structure
Nokian Tyres plc
Vianor Holding Oy
Vianor AB
Vianor AS
Vianor Oy
Nordic Wheels AB
Nokian Däck AB
Nokian Dekk AS
Nokian Tyres AG
Nokian Tyres GmbH
Nokian Tyres Canada Inc.
Nokian Tyres U.S. Holdings Inc
Nokian Tyres Inc.
Nokian Tyres U.S. Operations LLC
Nokian Tyres Holding Oy
NT Tyre Machinery Oy
Nokian Tyres Trading (Shanghai) Co Ltd
Nokian Tyres Europe Operations S.R.L
Nokian Tyres SAS
Nokian Tyres s.r.o.
Nokian Heavy Tyres Ltd
Levypyörä Oy
TOV Nokian Shina
Nokian Tyres Spain S.L.U
Nokian Tyres SP Z O.O.
Nokian Portti Oy
Kiinteistö Oy Nokian Nosturikatu 18
Kiinteistö Oy Nokian Rengaskatu 4
Nokianvirran Energia Oy
32.3%
Mikko Lehtinen ,
Head of B2C & B2B , Vian or
C O R P O R AT E
G O V E R N A N C E
S TAT E M E N T
M A D E FO R D E M A N D I N G C O N D I T I O N S
SUSTAINABILITY IS NOT SEPARATE FROM OTHER OPERATIONS, BUT TAKEN INTO ACCOUNT IN EVERYTHING WE DO. Strategy Review
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Corporate Governance
Statement 2023
I Introduction
During 2023 Nokian Tyres plc (hereinafter referred to as “Nokian
Tyres” or the “Company”) complied in full with and has prepared this
Corporate Governance Statement in accordance with the Finnish
Corporate Governance Code 2020. The Corporate Governance Code
2020 is available in its entirety at www.cgfinland.fi/en/.
Nokian Tyres’ regulatory framework
for Corporate Governance
External framework
Internal framework
• Finnish Limited Liability
• Articles of Association
Companies Act
• Code of Conduct
• Charters of the Board of
Directors, the Committees
and the Internal Audit
• Nokian Tyres’ policies,
procedures and practices
• Laws and regulations
relating to publicly listed
companies in Finland
• Corporate Governance
Code 2020 published by
the Securities Market
Association
• Rules and regulations of
the Nasdaq Helsinki, the
European Securities and
Markets Authority, and
the Financial Supervisory
Authority
Nokian Tyres follows the Finnish Limited Liability Companies Act,
laws and regulations relating to publicly listed companies in Finland,
the Articles of Association, the charters of Nokian Tyres’ Board
of Directors and its committees, the Nasdaq Helsinki rules and
regulations, and the orders and instructions from the European
Securities and Markets Authority as well as from
the Financial Supervisory Authority.
Nokian Tyres publishes its Corporate Governance Statement
as a separate document and as part of the Annual Report 2023.
Nokian Tyres has also prepared a separate Remuneration Report
in accordance with the Corporate Governance Code 2020. The
Remuneration Report is also published as part of the Annual Report
2023. The statement is available on the Company’s website at www.
nokiantyres.com/company/investors/corporate-governance/
and said reports at www.nokiantyres.com/company/investors/
financials/annual-reports/.
Nokian Tyres’ corporate governance is based on the General
Meeting, the Articles of Association, the Board of Directors (also
referred to as the “Board”), the President and CEO, the Group’s
Management Team, the legislation and regulations mentioned
hereinabove as well as the Group’s policies, procedures, and
practices. The Board has approved the Corporate Governance
Statement on February 6, 2024. The Company’s auditor verifies that
the statement and its related descriptions of the internal reporting
controls and risk management correspond to the financial reporting
process. The statement will not be updated during the financial
period; however, up-to-date information will be provided on the
Company’s website at www.nokiantyres.com/company/investors/.
Nokian Tyres' administrative organization
Shareholders
Shareholders'
Nomination Board
Auditors
General Meeting
Audit Committee
Board
Internal control
President and CEO
Management Team
People and
Sustainability
Committee
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108
The Annual General Meeting is held by the end of May of each
According to the Corporate Governance Code 2020, the Chair
II Governance bodies
Nokian Tyres is a Finnish limited liability company, and its registered
place of business is Nokia, Finland. The parent company Nokian Tyres
plc and its subsidiaries form the Nokian Tyres Group (also referred
to as the “Group”). The administrative bodies of the parent company
Nokian Tyres plc, i.e., the General Meeting, the Board of Directors,
and the President and CEO, are responsible for the administration
and operation of the Nokian Tyres Group. The General Meeting
elects the members of the Board of Directors, and the Chair and the
Deputy Chair of the Board upon the proposal by the Shareholders’
Nomination Board, and the Board appoints the Company’s President
and CEO. The President and CEO is assisted by the Group’s
Management Team in leading the Company’s operations.
General Meeting
Nokian Tyres’ highest decision-making power is held by the General
Meeting, whose tasks and procedures are outlined in the Limited
Liability Companies Act and the Articles of Association. The Annual
General Meeting decides on such matters as the
• adaption of the Company’s annual accounts
• profit distribution
• discharging the Board of Directors and the President and
CEO from liability
• number of members on the Board, the selection of the board
year on a date determined by the Board of Directors, either at
the Company’s registered place of business or in the city of Tampere
or Helsinki. The General Meeting 2023 decided to enable holding a
General Meeting of Shareholders entirely without a meeting venue,
as a so-called remote meeting. In remote meetings, shareholders
may exercise their full decision-making power, including the right to
present questions and to vote, by using a remote connection and
technical means.
An Extraordinary General Meeting is summoned whenever the
Board considers this to be necessary or if an auditor or a group of
shareholders with a holding of a total of at least one-tenth of all the
shares in the Company requires it in writing, in order to address a
particular issue.
According to law, a shareholder has the right to have a matter
falling within the competence of the General Meeting dealt with by
the General Meeting, if the shareholder so demands in writing from
the Board of Directors well in advance of the General Meeting, so
that the matter can be mentioned in the notice to the meeting. The
shareholder shall submit the request for having a matter to be dealt
with by the General Meeting by March 8, 2024.
The Articles of Association state that the notice of a General
Meeting shall be published on the Company’s website. In addition,
Nokian Tyres publishes the notice of a General Meeting as a stock
exchange release. The invitation lists the agenda of the meeting.
members and the auditor, and their remuneration
Nokian Tyres’ Articles of Association is available on the Company’s
• amendments to the Articles of Association, share issues, granting
warrants, and acquiring of the Company’s own shares.
In addition, as of the Annual General Meeting 2020, the
Remuneration Policy is presented to the General Meeting at least
every four years and the Remuneration Report annually as of 2021.
Resolutions of the General Meeting regarding the policy and the
report are advisory.
website at www.nokiantyres.com/company/investors/corporate-
governance/articles-of-association/.
Shareholders are entitled to participate in the General Meeting
if they are registered in the Company’s shareholders’ register,
maintained by Euroclear Finland Ltd, on the record date separately
indicated by the Company. A holder of nominee registered shares
can be temporarily registered in the shareholders’ register of the
Company for purposes of participation in the General Meeting.
of the Board, the Board members and the President and CEO must
be present at the General Meeting, and the auditor must be present
at the Annual General Meeting. Board member candidates must be
present at the General Meeting deciding on their election.
The Annual General Meeting for 2023 was held on April 26,
2023, in Helsinki, Finland. The meeting confirmed the financial
statements, discharged the Board members and the President
and CEO from liability for the fiscal year 2022 and adapted
Nokian Tyres’ Remuneration Report for governing bodies.
The meeting also decided on the payment of dividends as
well as authorized the Board of Directors to resolve on the
second installment of dividends was paid in December, 2023,
the composition of the Board and their remuneration, and
the election of the auditor and its remuneration. Further, the
Annual General Meeting authorized the Board of Directors to
decide on the repurchase of the Company’s own shares as
well as on the issuance of shares and special rights entitling
to shares and to decide on donations. In addition, the Annual
General Meeting decided on amendments to the Articles of
Association. The documents related to the Annual General
Meeting are available on the Company’s website at
www.nokiantyres.com/company/investors.
The Annual General Meeting for 2024 is scheduled for
April 30, 2024, at 10:00 a.m. EEST.
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Shareholders’ Nomination Board
Nokian Tyres’ Shareholders’ Nomination Board (also referred to
as the “Nomination Board”) was established in 2020. According to
the Charter of the Nomination Board, the duties of the Nomination
Board consist of the preparation of proposals to the General
Meeting concerning the number, composition, Chair and possible
Deputy Chair of the Board, and the remuneration of the members
of the Board and the Board committees. In addition, the Nomination
Board seeks prospective successor candidates for the members of
the Board.
The Nomination Board consists of five members of which four
members represent the Nokian Tyres’ four largest shareholders,
who on the first banking day of June each year are the largest
shareholders as determined on the basis of the shareholders’
register of the Company maintained by Euroclear Finland Ltd
and wish to nominate a member to the Nomination Board. If a
shareholder, who would have the obligation to notify the Company of
certain changes in shareholding under the Finnish Securities Markets
Act (flagging obligation), presents a written request addressed
to the Board by the first banking day of June, the holdings of a
corporation or a foundation controlled by such shareholder or such
shareholder’s holdings in several funds or registers will be combined
when determining the nomination right. A holder of nominee-
registered shares will be taken into account when determining the
composition of the Nomination Board, if the holder of nominee-
registered shares presents a written request concerning the issue
addressed to the Board by the first banking day of June. The
fifth member of the Nomination Board is the Company’s Chair of
the Board. Proposals that have been supported by at least three
members of the Nomination Board shall constitute the proposals of
the Nomination Board.
The Nomination Board is established to operate until abolished
by the decision of the General Meeting. The term of the members of
the Nomination Board shall end upon the nomination of the following
Nomination Board in accordance with the Charter of the Nomination
Board. The members of the Nomination Board are not entitled to
remuneration from the Company on the basis of their membership
unless otherwise decided by the General Meeting.
The following members were appointed to the Nomination Board
in 2023:
• Pauli Anttila (Investment Director, Solidium Oy), appointed by
Solidium Oy
• Timo Sallinen (Director, Head of Listed Securities, Varma Mutual
Pension Insurance Company), appointed by Varma Mutual Pension
Insurance Company
• Mikko Mursula (Deputy CEO, Investments, Ilmarinen Mutual
Pension Insurance Company), appointed by Ilmarinen Mutual
Pension Insurance Company
• Carl Petterson (CEO, Elo Mutual Pension Insurance Company),
appointed by Elo Mutual Pension Insurance Company
• Jukka Hienonen, Chair of the Board, Nokian Tyres plc.
During its tenure, the Nomination Board had four meetings and
all members participated in all meetings.
The proposals by the Nomination Board to the Annual General
Meeting 2024 were published on November 30, 2023.
The Charter of the Nomination Board is available at
www.nokiantyres.com/corporate governance/shareholders’
nomination board/charter.
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Information on the members of
the Board of Directors
The Annual General Meeting on April 26, 2023, elected nine Board
members. Susanne Hahn, Jukka Hienonen, Veronica Lindholm,
Christopher Ostrander, Jouko Pölönen, George Rietbergen and
Pekka Vauramo were re-elected as members of the Board, and
Markus Korsten and Reima Rytsölä were elected as new members
of the Board for a term ending at the closing of the Annual General
Meeting, 2024. Jukka Hienonen was re-elected as the Chair and
Pekka Vauramo as Deputy Chair of the Board.
Board of Directors
Operation of the Board of Directors
The Board is responsible for the Nokian Tyres’ corporate governance
and the appropriate organization of its operations pursuant to the
Finnish Limited Liability Companies Act and other regulations. The
Board holds the general authority in company-related issues, unless
other Company bodies have the authority under the applicable
legislation or the Articles of Association. The policies and key tasks
of the Board are defined in the Finnish Limited Liability Companies
Act, the Articles of Association, and the Board’s Charter. The key
tasks include:
• approving consolidated financial statements, half year reports
and interim reports
• presenting matters to the General Meeting
• appointing and dismissing the President and CEO
• organization of financial control.
In addition, as defined in the Board’s Charter, the Board deals with,
and decides on, matters of principle as well as issues that carry
financial and business significance, such as:
• Group strategy and financial objectives
the Group’s action, budget, and investment plans
•
•
the Group’s risk management and reporting procedures
• decisions concerning the structure and organization of
•
the Group
significant individual investments, acquisitions, divestments,
and reorganizations
the Group’s financing policies
•
reward and incentive schemes for the Group’s management
•
• monitoring compliance with the applicable legal and regulatory
requirements and the corporate policies, such as Code of
Conduct, approved by the Board
• appointing Board committees
• monitoring and evaluating the actions of the President and CEO.
Nokian Tyres has a separate Audit Committee and a People
and Sustainability Committee.
The President and CEO is in charge of ensuring that the
Board members have the necessary and sufficient information
on the Company’s operations. The Board assesses its activities
and operating methods by carrying out a self-evaluation once
a year. Members of the Board and the President and CEO will not
participate in decision-making where the law states that they must
be disqualified.
Composition of the Board of Directors
According to the Articles of Association of Nokian Tyres, the Board
of Directors comprises no fewer than four and no more than nine
members. The proposal regarding the composition and remuneration
of the Board for the General Meeting is prepared by the Nomination
Board. The number of Board members and the composition of the
Board shall be such that the Board is capable of efficiently carrying
out its tasks, while taking into account the requirements set by the
Company’s operations and its stage of development. The elected
Board members must be qualified for the task and able to devote a
sufficient amount of time for the Board duties.
Members of the Board are elected at the Annual General Meeting
for a one-year term of office that begins after the closing of the
Annual General Meeting and ends at the end of the next Annual
General Meeting. In 2023, the Annual General Meeting appointed the
Chair and the Deputy Chair from among the Board members upon
the proposal by the Nomination Board. The remuneration payable to
the Board members is also decided at the Annual General Meeting
based on the proposal by the Nomination Board.
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Board of Directors, December 31, 2023
Jukka Hienonen
Chair of the Board
(b. 1961)
Pekka Vauramo
Deputy Chair of the Board
(b. 1957)
Susanne Hahn
(b. 1976)
Markus Korsten
(b. 1970)
Veronica Lindholm
(b. 1970)
Member of the Board since 2022.
Member of the Board since 2023.
Member of the Board since 2016.
Member of the Board since 2020.
Member of the Board since 2018.
Member of the People and
Education: Study of Applied Physics,
Chair of the People and
Member of the People and
Member of the People and
Sustainability Committee.
Dipl. Ing. (FH)
Sustainability Committee.
Sustainability Committee.
Sustainability Committee.
Education: University Diploma of
Main occupation: Vice President
Education: Master of Science
Member of the Shareholders’
Education: Master of Science
Economics
Factory Programs, Northvolt AB
(Economics)
Nomination Board.
(Technology)
Main occupation: Founding and
Key positions of trust: –
Main occupation:
Education: Master of Science
Main occupation: President and CEO,
Managing Partner (CEO) of SKV Invest
(Economics)
Metso Corporation
Key positions of trust:
Main occupation: Professional
Key positions of trust: Member of
Member of the Board: Klingele
board member
the Board: Huhtamäki Oyj (Member of
Paper & Packaging SE & Co KG,
Key positions of trust: –
the Audit Committee), China Office
Invest BW-Funding program of
of Finnish Industries, New Children´s
the state of Baden-Württemberg,
Hospital Foundation (Deputy Chair)
HyperPark Ltd., SENTImotion GmbH,
1886Technologies GmbH
Chair of the Board: Zefyron GmbH
Professional board member
Key position of trust: Member of
the Board: Finland Chamber of
Commerce
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Christopher Ostrander
(b. 1968)
Jouko Pölönen
(b. 1970)
George Rietbergen
(b. 1964)
Reima Rytsölä
(b. 1969)
Member of the Board since 2021.
Member of the Board since 2021.
Member of the Board since 2017.
Member of the Board since 2023.
Member of the Audit Committee.
Chair of the Audit Committee.
Education: Master of Business
Member of the Audit Committee.
Education: B.Sc. (Mechanical
Education: M.Sc. (Econ & Bus. Adm.),
Administration
Education: Master of Social Sciences
Engineering); M.Sc. (Engineering
Authorized Public Accountant, eMBA
Main occupation: CEO, Koninklijke
Main occupation: CEO, Solidium Oy
Management); MBA
Main occupation: President and CEO,
Oosterberg
Key positions of trust:
Main occupations: CEO/Managing
Ilmarinen Mutual Pension Insurance
Key positions of trust: –
Member of the Board: Ylva Palvelut
Partner, Premier Staffing Solution,
Company
LLC; Partner/Chairman, Kensington
Key positions of trust: Chairman of
Hill Capital, LLC; Partner/Chairman,
the Board: The Finnish Foundation
Cornerstone Consulting
for Share Promotion. Member of the
Organization, LLC
Board: The Finnish Pension Alliance
Key positions of trust: Kensington
TELA, Finance Finland FFI and
Hill Partners II, LLC, and Kensington
Excellence Finland
Hill Capital, LLC, Chairman of
the Board. Cornerstone Consulting
Organization, LLC, Chairman of the
Board. Tamarind Hill Management, LLC
Limited Partner Advisor. University of
Findlay, Member of Board of Trustees,
Chairman of the Board of Trustees
Oy and Metso Corporation
More detailed information concerning members of the Board is available on the company’s website at
www.nokiantyres.com/company/investors/corporate-governance/board-of-directors/.
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Independence of the members of
the Board of Directors
Pursuant to the recommendation of the Corporate Governance
Code 2020, the Board assesses the independence of its members
annually. According to the Board’s estimate, all Board members are
independent of the Company and its major shareholders, with the
exception of Reima Rytsölä, who is deemed not to be independent
of a significant shareholder of the Company based on his position
as the CEO of Solidium Oy.
Shares owned by Board members and legal entities
controlled by them December 31, 2023
Nokian Tyres holdings of the Company’s
current Board members
Jukka Hienonen, Chair
Pekka Vauramo, Deputy Chair
Susanne Hahn, Member
Markus Korsten, Member
Veronica Lindholm, Member
Christopher Ostrander, Member
Jouko Pölönen, Member
George Rietbergen, Member
Reima Rytsölä, Member
Total
Number
of shares
25,808*
9,096
4,028
2,386
10,004
4,660
23,690
7,614
2,386**
89,672
* In addition, 20,592 shares in the insurance wrapper,
with no voting right
** In addition, 5,000 shares in the insurance wrapper,
with no voting right
The Board of Directors meetings, members’
attendance at meetings, and at making resolutions
without a meeting (per capsulam)
In 2023, in addition to its normal duties, the Nokian Tyres’ Board
focused on building the new Nokian Tyres. The exit from Russia and
the sale of Nokian Tyres Russian operations to PJSC Tatneft was
completed in March 2023, after which all Nokian Tyres’ operations in
Russia ended. In order to secure tire supply, the company is building a
new tire factory in Romania and has increased its production capacity
by investing in its current factories in Finland and the US and by
increasing the share of contract manufacturing of its production.
The Board convened a total of 10 times and made twice
resolutions without a meeting (per capsulam) in 2023.
Board members’ attendance at meetings and at making
resolutions without a meeting (per capsulam) in 2023
Jukka Hienonen (Chair)
100%
Pekka Vauramo (Deputy Chair)
100%
Heikki Allonen (Member until*)
100%
Susanne Hahn
100%
Markus Korsten (Member since*)
100%
Veronica Lindholm
100%
Inka Mero (Member until*)
100%
Christopher Ostrander
100%
Jouko Pölönen
100%
George Rietberger
92%
Reima Rytsölä (Member since*)
100%
* April 26, 2023
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Diversity of the Board of Directors
Age, Persons
Tenure, Persons
Nokian Tyres sees diversity as a success factor enabling the
achievement of Company’s strategic goals and business growth.
In practice, diversity means different factors such as gender, age,
nationality, and the complementary expertise of the members,
their education and experience in different professional areas and
industrial sectors in which the group mainly operates. Leadership
experience and personal competencies are also considered.
The Board shall have no fewer than two representatives from
both genders. This goal has been met in the current Board. If two
candidates are equally qualified, the candidate from the minority
gender has priority. The Board members have significant experience
in industry, consumer business and financial management, among
other things. The status and progress of diversity is monitored by
the Shareholders’ Nomination Board.
The principles concerning the selection of the Board and its
diversity are visible on the Company’s website at www.nokiantyres.
com/company/investors/corporate-governance/board-of-
directors/diversity-policy-for-the-board-of-directors/.
Committees of the Board of Directors
The Board will decide on the committees and their chairs and
members each year at its organizing meeting. In 2023, the Board
had two committees: the People and Sustainability Committee and
the Audit Committee. Each committee must include no fewer than
three members having the competence and expertise necessary
for working in the committee. At least one member of the Audit
Committee must have expertise in accounting or auditing. The
majority of the members of the People and Sustainability Committee
must be independent of the Company. The majority of the members
of the Audit Committee must be independent of the Company, and
at least one member must be independent of the Company’s major
shareholders. The President and CEO and the other members of
the Group Management Team cannot act as members of the People
and Sustainability Committee.
30–39, 0
40–49, 1
50–59, 6
60–69, 2
1 year, 2
2–3 years, 3
4–5 years, 1
6–7 years, 2
More than 7 years, 1
Gender, Persons
Independence of the Company, Persons
Female, 2
Male, 7
Independent, 8
Not independent, 1
Nationality, Persons
Finland, 5
The Netherlands, 1
Germany, 2
USA, 1
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People and Sustainability Committee
The committee was formerly called the Board’s Personnel and
Remuneration Committee until the Board’s organizing meeting
on April 26, 2023, changed the name to Board’s People and
Sustainability Committee. The People and Sustainability Committee
prepares a proposal to the Board on the Company’s President and
CEO and on the salary and other incentives paid to the President and
CEO. People and Sustainability Committee also prepares a proposal
to the Board on the nominations, salaries and other incentives of the
Group Management Team members. This committee also reviews and
submits a proposal to the Board on the allocation and criteria of the
Nokian Tyres share-based incentive plans, and on the other incentive
plans. In addition, the key duties of the People and Sustainability
Committee include the preparation of the remuneration policy and
the remuneration report for the Board and the President and CEO in
accordance with applicable laws and regulations.
The People and Sustainability Committee also prepares
sustainability issues for the Board and monitors developments in
the operating environment and regulation relating to sustainability.
The committee prepares and reviews a report on non-financial
information as part of the annual report and annual sustainability
report.
The committee has no independent decision-making power;
collective decisions are made by the Board, which is responsible for
carrying out the tasks assigned to the committee.
In 2023, the members of the People and Sustainability
Committee were Veronica Lindholm (Chair), Jukka Hienonen,
Pekka Vauramo, and Susanne Hahn (Member since April 26, 2023).
All committee members are independent of the Company
and of all major shareholders in the Company.
The committee assembled five times in 2023.
Attendance at People and Sustainability Committee
meetings in 2023
Veronica Lindholm (Chair)
100%
Susanne Hahn (Member since*)
100%
Jukka Hienonen
100%
Pekka Vauramo
100%
* April 26, 2023
Audit Committee
The Audit Committee assists the Board in its regulatory duties and
reports to the Board. The committee has no independent decision-
making power; collective decisions are made by the Board, which
is then responsible for carrying out the tasks assigned to the
committee.
minutes as well as the supplementary report presented by
the auditor to the committee. The committee prepares the
draft resolution on selecting the auditor. In addition, the Audit
Committee monitors and assesses how agreements and other
legal acts between the Company and its related parties meet the
requirements of the ordinary course of business and arm’s length
terms in accordance with applicable laws and regulations. The Audit
Committee must have the expertise and experience required for
its tasks.
In 2023, the members of the Audit Committee were Jouko
Pölönen (Chair), Heikki Allonen (Member until April 26, 2023), Inka
Mero (Member until April 26, 2023), Christopher Ostrander (Member
since April 26, 2023) and Reima Rytsölä (Member since April 26,
2023). As a general rule, the Company’s chief auditor participates
in the committee’s meetings.
All committee members are independent of the Company and
of all major shareholders in the Company, with the exception of
Reima Rytsölä, who is deemed not to be independent of a significant
shareholder of the Company based on his position as the CEO of
Solidium Oy.
According to the Committee Charter, the committee controls
The committee assembled five times in 2023.
that bookkeeping, financial administration, financing, internal
control, internal auditing, audit of the accounts, risk management
and compliance function are appropriately arranged in the
Company. The committee follows and assesses the reporting
process for financial statements as well as any significant changes
in the accounting policies and the items valued in the balance
sheet. The committee also processes the general description of
the mechanisms of internal auditing and risk management of the
financial reporting process, which forms part of the Corporate
Governance Statement.
The committee follows the statutory auditing of the financial
statement and the consolidated financial statements and assesses
the independence of the statutory auditor and the offering of
services other than auditing services by the auditor. Furthermore,
the committee handles the auditor’s report and possible audit
Attendance at Audit Committee meetings in 2023
Jouko Pölönen (Chair)
100%
Heikki Allonen (Member until*)
100%
Inka Mero (Member until*)
100%
Christopher Ostrander
100%
Reima Rytsölä (Member since*)
100%
* April 26, 2023
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116
Nokian Tyres holdings of the President and CEO and
legal entities controlled by him December 31, 2023
Jukka Moisio, President and CEO
Management Team
Number of shares
22,921
The Group’s Management Team is responsible for assisting the
President and CEO in preparing the Company’s strategy and in
operative management, and for discussing matters that involve
substantial financial or other impacts, such as corporate transactions
and organization changes. Members of the Management Team
carry the main responsibility for their business areas and functions.
The Management Team has no activities based on the applicable
legislation or the Articles of Association. According to the Group’s
meeting practices, the Management Team assembles approximately
11 times per year. In addition to the President and CEO, the heads of
the business units and functions participate in the meetings.
President and CEO and his duties
The President and CEO conducts the group’s business and manages
the Company operations in accordance with the Finnish Limited
Liability Companies Act and the instructions and guidelines provided
by the Board. The President and CEO is responsible for informing the
Board regarding the development of the Company’s business and
financial situation. The President and CEO prepares the Company´s
strategy and objectives for the Board. The President and CEO is also
responsible for implementing the approved strategy and plans. The
President and CEO is responsible for ensuring the legal compliance
of the Company’s bookkeeping and for arranging reliable asset
management. The President and CEO is elected by the Board.
Jukka Moisio has been the Company’s President and CEO since
May 27, 2020.
Jukka Moisio (b. 1961)
Education: Master of Science (Economics), MBA
Position: President and CEO since May 27, 2020
Key experience:
2008–2019 Huhtamäki Oyj, President and CEO
2004–2008 Ahlstrom Oyj, President and CEO
1991–2004 Ahlstrom Oyj, various management positions
1989–1991 McKinsey & Company, Associate
Key positions of trust:
Chair of the Board: Paulig Oy and Sulapac Oy
Member of the Board: Metsä Board Corporation
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Management Team, December 31, 2023
Jukka Moisio
(b. 1961)
President and CEO
Education: Master of Science
(Economics), Master of Business
Administration
Nokian Tyres holdings of person and
legal entities controlled by him: 22,921
Anna Hyvönen
(b. 1968)
Passenger Car Tyres and Vianor
Education: Licentiate of Science
(Technology)
Nokian Tyres holdings of person
and legal entities controlled
by her: 22,010
Päivi Leskinen
(b. 1965)
Human Resources
Education: Master of Social
Sciences
Nokian Tyres holdings of person
and legal entities controlled
by her: 0
Päivi Antola
(b. 1971)
Communications, Investor
Relations and Brand
Education: Master of Arts, CEFA
Nokian Tyres holdings of person
and legal entities controlled
by her: 5,799
Adrian Kaczmarczyk
(b. 1971)
Supply Operations
Education: Dipl. Ing. Engineering,
Master of Business Administration
Nokian Tyres holdings of person
and legal entities controlled
by him: 3,420
Manu Salmi
(b. 1975)
Heavy Tyres and Nokia Factory
Education: Master of Military Sciences,
Master of Science (Economics), Master of
Business Administration
Nokian Tyres holdings of person and
legal entities controlled by him: 30,457
Niko Haavisto
(b. 1972)
CFO
Education: Master of Science
(Economics)
Nokian Tyres holdings of person
and legal entities controlled
by him: 11,250
Jukka Kasi
(b. 1966)
Products and Innovations
Education: Master of Science
(Technology)
Nokian Tyres holdings of person
and legal entities controlled
by him: 40,367
More detailed information concerning the Group’s Management Team is available on the Company’s website at
www.nokiantyres.com/company/investors/corporate-governance/the-groups-management-team/.
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118
III Descriptions of mechanisms of
internal control and risk management
Internal control
The purpose of the Group’s internal control mechanisms is to
ensure that the Company’s operation is in line with the applicable
laws and regulations and the Nokian Tyres’ Code of Conduct. As
regards the financial reporting process, the purpose of the Group’s
internal control mechanisms is to ensure that the financial reports
released by the Company have been compiled in accordance with the
accounting principles applied by the Company and that they contain
essentially correct information on the Group’s financial position,
and to ensure that financial reporting is accurate and reliable. The
Group has defined group-level policies and instructions for the key
operative units specified below in order to ensure efficient and
profitable company operations.
The Group’s business consists of Passenger Car Tyres, Heavy
Tyres, and Vianor business units. Passenger Car Tyres is further
divided into the following business areas: Nordics, Central Europe,
and North America. Heavy Tyres and Passenger Car Tyres business
units are responsible for their own operations, financial results,
risk management, balance sheet and investments, supported by
different functions. The Group’s sales companies serve as product
distribution channels in local markets.
Subsidiaries are responsible for their daily operations and
administration. They report to the director responsible for the said
business area, while the Vianor chain reports to the director of the
Vianor business unit.
The Board is responsible for the functionality of the internal
control mechanisms, which are managed by the Company’s
management and implemented throughout the organization.
Internal control is an integral part of all activities of the Group at
all levels. Nokian Tyres’ operative management bears the main
responsibility for operational control. Every supervisor is obliged
to ensure sufficient control over the activities belonging to their
responsibility and to continuously monitor the functionality of the
control mechanisms. The Chief Financial Officer is responsible for
organizing financial administration and reporting processes and the
internal control thereof. Finance function is responsible for internal
and external accounting; its tasks include, among others, producing
financial information concerning the different areas and ensuring the
accuracy of this information.
The preparation process of the consolidated financial statements
(IFRS), the related control measures, and the task descriptions and
areas of responsibility related to the reporting process are defined.
The Company’s Finance function produces the consolidations and
information for the group level and the different areas. Each legal
entity within the Group produces its own information in compliance
with the instructions provided and in line with local legislation.
The Group’s Finance function is centrally responsible for the
interpretation and application of financial reporting standards as well
as for monitoring compliance with these standards.
Effective internal control requires sufficient, timely, and reliable
information in order for the Company’s management to be able
to monitor the achievement of targets and the efficiency of the
control mechanisms. This refers to financial information as well
as other kinds of information received through IT systems and
other internal and external channels. The instructions on financial
administration and other matters are shared on the Company’s
intranet, and training is organized for personnel with regard to these
instructions when necessary. Communication with the business units
is continuous. The Company’s financial performance is internally
monitored by means of monthly reporting complemented with
updated forecasts.
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Investor communications
Enterprise risks
The goal of Nokian Tyres’ Investor Relations is to regularly and
consistently provide the stock market with essential, correct,
sufficient, and up-to-date information that is subsequently used to
determine the share value. The operations are based on equality,
openness, and accuracy.
Risk management
The Group has adopted a Risk Management Policy, approved by
the Board, which supports the achievement of strategic goals
and ensures continuity of business. The Group’s Risk Management
Policy focuses on managing both the risks pertaining to business
opportunities and the risks affecting the achievement of the Group’s
goals in the changing operating environment.
The enterprise risks are classified as strategic, operational,
financial and hazard risks. Strategic risks are related to customer
relationships, competitors’ actions, political and legislative risks,
reputation, country risks, brand, product development, climate
change and sustainability risks and investments. Operational
risks arise as a consequence of shortcomings or failures in the
Company’s internal processes, actions by its personnel or systems,
contractual risks, risk of non-compliance, or external events, such
as unforeseen changes in the operating environment, cyber and
information security, management of the supply chain, or changes
in raw material prices. Financial risks are related to fluctuations in
interest rate and currency markets, liquidity and refinancing, and
counterparty and credit risks. Hazard risks arise from property loss
or business interruption, shortcomings or failures in employee safety
or environmental management systems.
Strategic risks
Management Business environment
• Customer relationships
• Competitors’ actions
• Legislative risks
• Reputation
• Political & country risks
• Brand
• Product development
• Climate change
• Sustainability risks
• Other risks
Financial risks
Market Credit
Liquidity
• Market risk
• Credit risk
• Currency risk
•
Interest rate risk
• Liquidity risk
• Funding risk
• Commodity price risk
• Other risks
Nokian Tyres’
policies, principles,
guidelines and
values
Operational risks
Processes Personnel
Legal
• Processes
• Systems
•
Information security
• Personnel
• Supply chain management
• Product defects
• Legal risks
• Corporate governance
• Tax risks
• Other risks
Hazard risks
Processes Controls
Environment Physical damage
• Environmental risks
• Physical damage
• Employee safety
• Pandemic disease
• Property loss
• Business interruption
• Third-party liability
• Crime
• Cyber attack
• Other risks
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The most significant risks that could potentially have an impact
on Nokian Tyres’ business are related to consumer confidence and
macroeconomic and geopolitical conditions. Political uncertainties
may cause serious disruption and additional trade barriers and affect
the Company’s sales and credit risk.
The war in Ukraine has severely impacted Nokian Tyres’ operating
environment and production capacity, impacting the Company’s
ability to serve customers especially in Central Europe. Due to the
war, Nokian Tyres decided to exit Russia and completed the sale of
its operations in Russia to PJSC Tatneft in March 2023, after which
all Nokian Tyres’ operations in Russia ended. In order to secure tire
supply, the company is building a new tire factory in Romania and has
increased its production capacity by investing in its current factories
in Finland and the US and by increasing the share of contract
manufacturing of its production. Delay in these actions could have an
adverse effect on Nokian Tyres’ financial performance.
The tire market is evolving to meet changing consumer needs.
Failure to meet demands of performance and safety or to innovate
and develop new products and services or to adapt to the changes in
the sales channel or new technologies could have an adverse effect
on the financial performance. Unplanned interruption in critical
information systems or network services may cause disruption to
the continuity of operations. Any unexpected production or delivery
breaks at production facilities or those of its contract manufacturing
partners would have a negative impact on the company’s business.
Interruptions in logistics or lack of resources could have a significant
impact on production and peak season sales. The tire industry can
be subject to risks caused by climate change, such as changes in
consumer tire preferences, regulatory changes or impact of extreme
weather events on natural rubber producers. Nokian Tyres’ risk
analysis pays special attention on corporate social responsibility
risks. Analyses and projects related to information security and data
protection and customer information are continuously a special
focus area.
The risk management process aims to identify and evaluate
the risks, and to plan and implement the practical measures and
continuous monitoring for each risk. Among others, such measures
may include avoiding the risk, reducing it in different ways or
transferring the risk through insurance policies or agreements.
Control functions and measures are verification or back-up
procedures applied to reduce the risks and ensure the completion of
the risk management measures.
Responsibility for identifying, evaluating and to large extent,
managing risks is delegated to business units, business areas and
functions. Treasury is responsible for developing and maintaining
risk management processes, methods and tools. Assisted by the
Audit Committee, the Nokian Tyres’ Board monitors and assesses
the efficiency of the Company’s risk management mechanisms
and monitors the assessment and management of risks related
to the Company’s strategy and operations. The Audit Committee
monitors that the risk management actions are in line with the
Risk Management Policy. Issues raising in risk analysis are noted
in the development of processes, compliance and control, and in
Internal Audit planning. The Nokian Tyres’ Board discusses the most
significant risks annually.
IV Other information provided
Internal audit
The Group’s Internal Audit systematically carries out assessments
and audits on the efficiency of risk management, internal control,
and corporate governance processes. Internal Audit is an independent
and objective function whose aim is to help the organization to
achieve its goals. The principles for internal audit have been confirmed
in the Internal Audit’s Charter approved by the Board.
The Group’s Internal Audit function is managed by the Chief
Audit Executive (CAE), who works under the Audit Committee. The
focus areas for internal audit are approved by the Audit Committee
each year. The audit assignments are based on the key strategic
focus areas of the company’s operations and the risks involved. The
operation of Internal Audit covers all business activities, functions
and processes within the Nokian Tyres Group. The CAE reports on
their activities to the Audit Committee and administratively to the
Chief Financial Officer. The Company’s Board of Directors follows and
monitors the efficiency of the Internal Audit.
Related party transactions
Nokian Tyres determines and monitors related parties in accordance
with the International Accounting Standards (IAS 24, Related Party
Disclosures) and other applicable regulations. The Company has
procedures in place to identify and define its related parties and
assesses and monitors related party transactions to ensure that all
conflicts of interest and the Company’s decision-making process are
appropriately taken into account. The Audit Committee monitors
and assesses how agreements and other legal acts between the
Company and its related parties meet the requirements of ordinary
activities and arm’s length terms in accordance with applicable laws
and regulations. The Group’s financial management monitors and
supervises related party transactions as part of the Company’s
normal reporting and monitoring procedures and reports to the
Audit Committee on regular basis. The Company only has related
party transactions that are a part of normal business, and the
information regarding them is provided in the Annual Report.
The decision-making processes have furthermore been structured
in order to avoid conflict of interests. In case the Company would
have any transactions that are not part of the Nokian Tyres’ ordinary
course of business or are not implemented under arm’s length terms,
such transactions shall be handled by the Audit Committee and
approved by the Board and provided in the Annual Report.
Insider management
Nokian Tyres complies with the guidelines for insider trading drawn
up by Nasdaq Helsinki Ltd. Furthermore, the Company has drawn up
separate Insider Guidelines that have been approved by the Board
and that supplement other insider regulations as well as include
instructions on insiders and insider administration.
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The following table presents fees by type paid for the years ended
December 31:
Fees by type paid, EUR
2022
2023
The Group’s audit fees
1,046,000
1,081,000
Fees paid to the auditor for
services other than auditing
services
Total
68,000
24,000
1,114,000
1,105,000
Whistleblowing
Nokian Tyres has defined processes that internal and external
parties can use to notify of any suspected violations of the
Company’s Code of Conduct or other policies or guidelines, or of
any other malpractices. External parties can use the email address
whistleblow@nokiantyres.com, among others. All whistleblowing
notifications are investigated promptly in a confidential manner and
protecting the identity of the whistleblower as far as possible.
Audit
The auditor has an important role as a controlling body appointed
by the shareholders. The audits give shareholders an independent
opinion on how the financial statements and report by the Board
of the Nokian Tyres have been drawn up and the accounting and
administration of the Company have been managed. The auditor
re-elected at the Annual General Meeting of 2023 is Ernst & Young
Oy, authorized public accountants, with Mikko Järventausta,
Authorized Public Accountant, acting as the Chief Auditor. The
auditor’s term of office lasts until the end of the following Annual
General Meeting. In addition to his duties under the valid regulations,
he reports all audit findings to the Group’s management.
Nokian Tyres does not maintain a permanent insider register.
Insiders are identified on a case-by-case basis for specific projects.
Project-specific insider lists are drawn up of people involved in insider
projects of the Company. Persons with insider information are not
allowed to trade in Nokian Tyres’ financial instruments until the
project ends or has been published. Those entered into the project-
specific list of insiders are notified of their entry into the said list and
the duties it entails, as well as the termination of the insider project.
Nokian Tyres maintains a separate list of persons discharging
managerial responsibilities and their closely associated persons.
In 2023, the persons discharging managerial responsibilities in
the Company, as defined in the Market Abuse Regulation, were
the members of the Board, the President and CEO and the Chief
Financial Officer.
Persons discharging managerial responsibilities in the Company
are allowed to trade with Nokian Tyres’ financial instruments only
for 30 days after the publication day of the Company’s financial
statement report, half year report, or interim report. The same
applies also to the members of the Group’s Management Team and
persons who participate in the preparation, maintaining, and/or
publication of the Company’s financial reports. The prohibition on
trading mentioned above also applies to persons who process the
financial reporting and forecasts of the Nokian Tyres Group.
The Group General Counsel for Nokian Tyres is responsible for
the overall management of insider matters in the Company and the
related communication (limitations on trade, obligations to announce
and publish management transactions). The Group General Counsel
reviews the information for the persons discharging managerial
responsibilities and their closely associated persons at least once
per year. The Chief Financial Officer is the Group General Counsel’s
substitute for insider matters.
W H AT E V E R H A P P E N S I N T H E
W O R L D , A C O M M U N I T Y B U I LT O N
D E T E R M I N AT I O N , C O O P E R AT I O N A N D
T R U S T W I L L A L WAY S F I N D I T S WAY.
An ne A i tto ni em i ,
E xte rn al Com mu ni cati os S pe ci a li s t
N O N - F I N A N C I A L
I N FO R M AT I O N
S TAT E M E N T
M A D E F O R D E M A N D I N G C O N D I T I O N S
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Non-Financial Information Statement 2023
Nokian Tyres develops and manufactures premium tires for
consumers and customers who value safety, sustainability,
and predictability. Sustainability is at the core of Nokian Tyres’
business and one of the five cornerstones of the company’s
strategy.
Nokian Tyres is a supporting member of the United Nations Global
Compact (UNGC) initiative and is committed to the Sustainable
Development Goals (SDGs) set by the UN.
Managing non-financial matters
at Nokian Tyres
Nokian Tyres’ sustainability activities are led by the SVP, Supply
Operations, who is a member of the Group’s Management
Team. Nokian Tyres Sustainability Steering Group supervises
and monitors the sustainability work within the Group and
comprises of senior representatives from Supply Chain, Products
& Innovations, Finance, Human Resources and Communications
departments. Nokian Tyres Greenhouse Gas (GHG) Steering Group
supervises and monitors the progress in reducing greenhouse gas
emissions within the Group. The duties of all supervisors include
day-to-day leadership of sustainability.
Targets, milestones, development items, and other key topics
are discussed by the Group’s Management Team at least twice
a year, and at least three times a year by the Board’s People and
Sustainability Committee. The VP of Quality, Sustainability, and
Supply Operations Business Development shares knowledge and
updates with the Committee about the company’s impacts.
Managing sustainability at Nokian Tyres
Strategy, targets and follow-up
Board of Directors (incl. People and Sustainability Committee)
Group’s Management Team
Sustainability Steering Group
GHG Steering Group
Action plans and day-to-day leadership of sustainability
VP, Quality, Sustainability and Supply Operations Business Development
Sustainability
working group
Safety
management
working group
Enviromental
working group
Energy
efficiency
working group
Sustainable
purchasing
working group
All units and supervisors
Personnel
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Nokian Tyres’ business is guided by the ethical principles
presented in the Board-approved Code of Conduct that can be
found at www.nokiantyres.com/company/sustainability/code-
of-conduct/. The document specifies the principles for Nokian
Tyres’ business, including instructions for various matters related
to ethics and the anti-bribery guidelines. Nokian Tyres does not
condone any form of bribery within the company’s operations.
When reporting a suspected misuse or violation, an employee
is advised to contact either his/her supervisor, Internal Audit, Legal
& Compliance, or the HR unit. Misconduct can also be reported
by sending an email to whistleblow@nokiantyres.com or via
regular mail. The internal auditor reports suspected misuses and
violations to the Board’s Audit Committee.
The company requires that all its sustainability critical suppliers
adhere to Nokian Tyres’ Supplier Code of Conduct
(www.nokiantyres.com/company/sustainability/supplier-code-
of-conduct/). All raw material suppliers must, at a minimum, have
an ISO 9001 certified quality management system in place. Nokian
Tyres prefers suppliers with an ISO 14001 certified environmental
management system.
The Risk Management Policy adopted by Nokian Tyres’ Board of
Directors supports achieving the company’s strategic targets and
ensuring business continuity. Read more about the company’s risk
management in the Financial Statement under Significant Risks
and Uncertainties and in the Corporate Governance Statement.
Guiding principles for Nokian Tyres’
sustainability
Sustainability is a part of Nokian Tyres’ company culture, strategy,
and targets. The graph on the next page describes the areas of
sustainability in the company, the guiding principles, and the most
important standards and policies that guide the work.
Nokian Tyres’ material topics
Through continued focus on sustainability at Nokian Tyres, the
company is committed to minimizing its negative impacts and
maximizing its positive impacts on the economy, environment,
and people. An essential part of driving this positive change is
understanding how Nokian Tyres’ stakeholders view sustainability
and what sustainability topics are relevant for society and the
business. This is done by conducting materiality assessments
every three years. The assessments form a basis for sustainability
at Nokian Tyres.
The VP of Quality, Sustainability, and Supply Operations
Business Development presents the data from the materiality
assessment to the Group’s Management Team and to the Board.
The Board reviews and approves the Non-Financial Information
Statement, the topics of which are based on the materiality
assessment.
The company conducted a comprehensive materiality
assessment in 2021. As a result, the following sustainability
topics were considered material to Nokian Tyres’ operations, and
sustainability reporting regarding the year 2023 is mostly based
on them:
1. Sustainable raw materials
2. Actions to mitigate climate change
3. Safety and well-being at Nokian Tyres
4. Promoting human rights in all operations
5. Safety properties of tires
The material topics for 2024 are defined with a double materiality
analysis, the results of which will be presented in the Nokian Tyres’
Sustainability Report 2023 to be published by the end of March
2024.
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Areas of sustainability
Products / R&D
People
Economy
Environment
Procurement
Nokian Tyres develops and
manufactures safe and high-quality
tires that reach their destination
safely even under demanding
conditions. Ecofriendliness is
considered, for example, regarding
rolling resistance, raw materials,
and mileage and abrasion.
Nokian Tyres is committed to acting
in the manner required by the UN’s
Guiding Principles for Business and
Human Rights as well as OECD’s Guiding
Principles on Labour and Human Rights,
and to following the International
Labour Organization’s (ILO) Declaration
on Fundamental Principles and Rights
at Work. The company respects human
rights and treats all individuals equally.
Essential standards, group policies and procedures related to sustainability
Through profitable growth,
Nokian Tyres enables the further
development of its operations and
ensures financial security, work,
and well-being for stakeholders.
Nokian Tyres considers the
product’s entire life cycle and
all of its functions in terms of
environmental responsibility and is
committed to acting in a way that
does not harm the environment
or people. Nokian Tyres aims to
show leadership in actions against
climate change.
Nokian Tyres is committed to
sustainable procurement and
further developing sustainability
in the supply chain.
Tire/vehicle safety regulations
(UN tire regulations), various tire
labelling (consumer information)
regulations and standards (EU
Tyre Labeling regulation), chemical
regulation, UN Global Compact,
Nokian Tyres tire testing policy.
Local guidelines and procedures
ISO 45001, UN Global Compact,
Policies and procedures related to
safety, well-being, hiring, traveling,
induction, people reviews and
competence development, human
rights, and equality.
Stock exchange rules, IFRS,
UN Global Compact, Corporate
Governance, risk management,
Know Your Counterparty,
Tax Policy.
ISO 14001, Responsible Care
program, Science Based Targets,
UN Global Compact, Policies
and procedures related to
environmental and chemical
safety management.
ISO 9001, ISO 14001, UN Global
Compact, Procurement policy,
Supplier Code of Conduct,
Sustainable Natural Rubber Policy.
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Non-financial targets
Nokian Tyres’ non-financial targets are presented on the
company’s website at www.nokiantyres.com/company/
sustainability/fundamentals/our-targets-and-achievements/.
The chart describes selected five key targets, with respective KPIs
and results for 2023.
Area
Target
KPI
Progress in 2023
Safe and eco-friendly tires:
increasing the share of sustainable
materials in tires
Increase the share of recycled or
renewable raw materials in tires to
50% by 2030
Report annual improvement
One new renewable raw material
taken into production use
Climate: reducing CO2 emissions
in line with the four Science Based
Targets
Reducing CO2 emissions from tire
production (scope 1+2) by more
than 50% by 2030, base year 2015
Report annual improvement
Target was reached in 2023, seven
years in advance
Safety: securing safer and better
work
Accident frequency LTIF: Decrease
from 8.3 (2018) to 1.5 by 2025
20% annual improvement in LTIF
compared to the previous year
Negative development. LTIF
increased from 3.2 to 4.7
Human rights: auditing all
significant high-risk suppliers
100% of significant high-risk
suppliers audited by 2025
Annual increase in the share of
audited high-risk suppliers
100% audited (83% in 2022)
Personnel wellbeing: develop
personnel wellbeing
Develop personnel wellbeing
Report annual improvement
in sentiments about equal
opportunities in the personnel
survey, base year 2021 (65)
Score on equality was 67 on a scale
of 0–100 (66 in 2022)
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Nokian Tyres as a part of society
IMPACTS: Through sustainable business practices and financial
success, Nokian Tyres offers security, work, and well-being for its
personnel and contributes to the well-being of local communities.
Nokian Tyres’ objective is to create value for its various
stakeholders, such as consumers, customers, personnel, and
shareholders. Nokian Tyres wants to be a good corporate citizen
wherever it operates.
Nokian Tyres’ approach to philanthropy mirrors its purpose,
entrepreneurial and inventive company culture, and sustainable
way of doing business. The company does not support any political
or religious entities. The company offers resources to projects
based on the Nokian Tyres’ Philanthropy Approach defined in 2020.
In 2023, Nokian Tyres gave the Baltic Sea Action Group (BSAG)
a Baltic Sea commitment for the years 2023–2026. Nokian
Tyres’ commitment is focused on cooperation in BSAG’s Ship
Waste Action initiative. The goal of the initiative is to establish
an operating model in which wastewater from cargo ships is
discharged in the harbor and the utilization of nutrients is enabled
by circular economy solutions.
Nokian Tyres also entered a partnership with the Finnish Ski
Association, becoming the main partner of Cross-Country Ski
Team Finland as well as junior Cross-Country Ski Team Finland for
the seasons 2023–24 and 2024–25. With the partnership, Nokian
Tyres wants to support the top athletes representing Finland as
well as the young future talents.
Additionally, the company continued to support the traffic
safety education for local school children in Nokia, Finland, and
donated books for safety education. The tire and car service chain
Vianor donated to Save the Children, an international advocate of
children’s rights, to support low-income families and children at
the risk of alienation in Finland, Sweden, and Norway.
In the US, Nokian Tyres has donations committees in Dayton,
Nashville, and Colchester. The company donated to non-profit
and educational organizations near its US factory in Dayton,
Tennessee. Throughout North America, Nokian Tyres donated
tires to help charities and community organizations raise funds
and serve their communities. In addition, Nokian Tyres supported
Nokian Tyres Summer Nights, a summer concert series in Dayton
aimed at supporting community growth.
Nokian Tyres continued its partnership with POWDR, a ski
resort company in the US and Canada. The partners planted
trees for every season pass sold during a select time period at
participating resorts. They also worked together to educate resort
guests on the importance of driving safety.
Climate and the environment
IMPACTS: Actions to mitigate climate change and reduce
emissions, ensuring environmental and chemical safety
Environmental and chemical safety and the coordination
of sustainability are the responsibility of the Quality and
Sustainability department. The company promotes environmental
and chemical safety through risk management, continuous
improvement of processes, and through new investments. When
developing activities, the company applies best practices and
advanced solutions while taking into account human factors and
financial impacts.
The tire factories in Finland and in the US are certified pursuant
to the international ISO 14001 environmental management system
standard, the ISO 45001 occupational health and safety standard,
and the ISO 9001 quality system standard. The company also holds
an IATF 16949 approval for the automotive industry since 2013.
The company has defined its climate-related risks and
opportunities according to the recommendations of Task Force on
Climate-Related Financial Disclosures (TCFD). In 2023, the risks and
opportunities were reassessed. The following scales were used for
severity and time horizon:
Severity:
Time horizon:
Very low
Low
Medium
High
Very high
<0.1 EUR million
0.2–2 EUR million
3–20 EUR million
20–200 EUR million
>201 EUR million
Short
Medium
Long
<2030
2030–2040
2040–2050
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Climate-related risks
Risk group
Sub category
Examples of concrete risks
Time horizon
Severity (Financial impact)
Probability
Adaptation / mitigation plan
Transition risks Regulatory
Emerging
regulation
Deforestation-related regulation (EUDR), concerning
natural rubber
Green regulation on aviation and maritime fuels can
significantly increase costs of logistics
Further
environmental fees
Additional taxes and duties e.g. EU’s CBAM for fossil
raw materials can increase prices. Carbon taxes.
Certification costs
Technological
Stricter
expectations to
oversight
Climate-related
demands for new
tire technology
Increased verification testing of products and emission
measurements, including LCA, EPD
A+ rolling resistance tires required for EVs
150 km/h max speed for EU – demand for UHP (Ultra
High Performance) tires declines
Market and
reputation
Market changes
Shift from car ownership to mobility-as-a-service i.e.
changing customer base
Tire raw materials
Replacing fossil-based raw materials with more
expensive renewable and recycled materials
Replacing raw materials that have a high carbon
footprint with materials with a lower carbon footprint.
Availability and price of materials
Energy
Green energy prices go up due to strong demand
Raw material and transportation price increases due to
higher energy prices
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Medium
Low
Low
Low
Low
Very low
Medium
Medium
Medium
Low
Low
Low
Medium
Medium
Medium
Low
Low
Low
Low
Medium
Medium
High
Medium
Medium
High
Medium
Medium
Low
Medium
Medium
Low
Low
Low
High
High
High
High
High
High
High
High
High
Medium
High
High
Low
Low
Low
Low
Low
Low
Medium
Medium
Medium
High
High
High
High
High
High
High
High
Medium
Medium
Medium
Medium
Follow-up of emerging
regulation
Participation in industry sector
working groups
Follow-up of emerging
regulations
Anticipation of future
expectations in R&D
development road maps
Update product and service
offering
Road map for selective use of
renewable and recycled raw
materials
Selective use of lower carbon
footprint materials
Long term power purchasing
agreements
Long term contracts
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Sub category
Examples of concrete risks
Time horizon
Severity (Financial impact)
Probability
Adaptation / mitigation plan
Climate-related risks
Risk group
Market and
reputation
Tire raw materials
Availability of renewable and recycled raw materials can
limit plans for sustainability
Tire demand
Increased demand for all-season tires, decreased
demand for winter tires
Reputational risk
Deforestation scandals (natural rubber)
Unintentional incorrect sustainability information
Physical risks
Physical
Extreme weather
events
Disruptions in logistics and force majeure situations
Permanent changes in logistics and/or increased force
majeure situations (chronic)
Impact of extreme weather events on natural rubber
producers
Contamination/lower quality of raw materials
Disruption on own production and/or distribution
Extreme
temperatures
Extreme weather
events
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Medium
Low
Low
Low
Low
Low
Low
Low
High
High
High
High
Medium
High
High
Medium
Low
Low
Low
Low
Low
Low
Medium
Medium
Medium
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Low
Aiming for multiple sources
Update product offering
Co-operation with supply
chain in line with GPSNR
recommendations
Systematic information
verification practices
Alternative transportation
routes
Alternative transportation
routes
Alternative sourcing locations
Alternative materials
Alternative materials
Multiple supply sources
Location selection and building
design. Insurances.
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Climate-related opportunities
Opportunity group Sub category
Examples of concrete opportunities
Time horizon
Financial impact
Probability
Implementation plan
Innovation
Raw materials
Innovations with renewable / recycled / local materials
Short
Innovations with low carbon footprint raw materials
Recycling
Cooperation with innovative recycling companies
Climate-friendly
technology
Lower rolling resistance products. Climate-friendly
production
Energy-efficient
production
Modern machinery used in Nokian Tyres’ factories
Product range
Competitive
advantage
As an expert in demanding and challenging weather
conditions, Nokian Tyres’ share in winter tire markets is
strong. Readiness to increase the share further, should
the extreme weather phenomena increase in the future
Increase of all-season tire sales in Europe due to milder
winters
EU's ESG
regulations
Increased share of sustainable raw materials
Tire regulation for wear resistance (abrasion)
Industrial (heavy)
tires
Existing expertise to provide climate-friendly solutions,
e.g. intelligent sensor technology
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Medium
High
High
Medium
High
High
Low
Medium
High
High
High
High
Medium
Medium
Medium
Low
Medium
High
High
High
Medium
Medium
Medium
Low
Medium
Low
Very low
Medium
High
High
High
High
High
High
High
High
High
High
High
High
High
High
Medium
Medium
Medium
High
High
High
High
High
High
High
High
High
High
High
High
High
High
High
Material development road map
to reach 50% share of renewable
or recycled raw materials by
2030
Screening of opportunities and
widening of cooperation
Product development road
map. New zero CO2 factory to
Romania being implemented
New zero CO2 factory to
Romania being implemented
Innovations and developing
product portfolio to meet future
winter conditions, increasing
consumer awareness
Developing product portfolio by
deploying knowhow of winter
conditions
Innovation and early adaptation
of regulations
Product development
Product development
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Climate-related opportunities
Opportunity group Sub category
Examples of concrete opportunities
Time horizon
Financial impact
Probability
Implementation plan
Engagement
Consumers
Increase awareness of how tires can affect safety and
carbon footprint
Policy makers
Increased preparedness for new regulations or
incentives
Shareholders /
stakeholders
Climate-related sustainable financing and incentives
Regulatory
Renewable Energy
Directive and other
climate regulation
More renewable energy available in EU, prices can
decrease
Global carbon tax or similar would improve the
company’s competitive position
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Short
Medium
Long
Medium
Medium
Medium
Medium
Medium
Medium
Medium
Medium
High
Low
Medium
Medium
Low
Low
Low
High
High
High
High
High
High
High
High
High
High
High
High
Medium
Medium
Medium
Consumer education through
communications and marketing
Industry-wide cooperation and
information sharing with decision
makers
Transparent sustainability
targets, public reporting,
collaboration with financial
institutions, information sharing
with stakeholders
Own investments/partnering for
green energy
Further improvement of
corporate carbon footprint
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In 2020, Nokian Tyres was the first in tire industry to receive
approval from the Science-Based Targets initiative (SBT) for its
targets for reducing greenhouse gas emissions. In 2023, Nokian
Tyres achieved one of its key climate targets seven years in
advance and made a commitment to achieve net-zero greenhouse
gas emissions by 2050. The company is currently in the process
of having new, more ambitious emission reduction targets to be
validated by the SBT. The new scope 1 + 2 emission targets will
be aligned with the 1.5 degrees pathway. The work to reduce the
GHG emissions is followed and supported by the Nokian Tyres
Greenhouse Gas Reduction Steering Group, which convenes four
times a year.
Nokian Tyres is a shareholder in Finnish Tyre Recycling Ltd,
which centrally manages the collection and reuse of used tires in
Finland. In Finland, nearly 100 percent of decommissioned tires
are recycled. On average in Europe, the degree of tire recycling is
approximately 95 percent.
The VOC emissions (volatile organic compounds, or solvents)
of the Nokian Tyres’ tire factory in Finland are still above the
maximum level allowed by the environmental permit. During 2022
the company started discussions with environmental authorities,
and a spread modelling of the VOC emissions was conducted to
estimate the impacts of the VOCs in the nearby surroundings of
the factory. According to the modelling, the VOC concentrations
and the environmental effects are minor. Furthermore, the
solvent use has decreased over 40 percent compared to 2018. An
application was submitted to authorities during 2023 to have the
environmental permit updated.
Nokian Tyres received one environmental complaint in 2023
concerning odor at the tire factory in Finland. The company
received no other environmental complaints. In 2023, Nokian
Tyres received a $1,500 fine for a minor air permit recordkeeping
violation in the factory in the US.
Special attention has been paid to reducing GHG emissions, as
well as chemical safety and sustainability work across different
fields of business.
At the production facilities, emphasis remained on reusing
waste. In 2023, 100 percent of the tire factories’ production waste
was sent to utilization.
EU taxonomy
The EU’s Taxonomy Regulation is designed to support the
transformation of the EU economy to meet its European Green
Deal objectives, including the 2050 climate-neutrality target. The
Taxonomy regulation classifies economic activities, which can be
potentially aligned with EU’s environmental targets. At the core
of the Taxonomy Regulation is the definition of a sustainable
economic activity. This definition is based on two criteria. An
activity must:
• Contribute to at least one of six environmental objectives
listed in the Taxonomy; and
The tire industry is included in the economic activity groups
Manufacture of other low carbon technologies of Climate change
mitigation and Remanufacturing of Transition to a circular
economy in the EU Taxonomy’s technical screening criteria. After
investigating and consulting on EU Taxonomy’s technical screening
criteria, following conclusions about Nokian Tyres’ economic
activities have been made:
• Tires with low rolling resistance ratings which are
manufactured by Nokian Tyres have substantially lower life-
cycle carbon footprint than corresponding average tires.
• At this stage, Nokian Tyres has excluded all heavy off-road
tires for professional use as there is no solid comparison data
available of use phase CO2 emissions for heavy off-road tires
for professional use.
• Tire retreading can be included in the Remanufacturing
section of the EU Taxonomy’s Transition to circular economy
environmental target.
Manufacture of tires with low life-cycle greenhouse gas emissions
and tire retreading business activities represented 3.4 percent
of Nokian Tyres’ total net sales in 2023. Based on Nokian Tyres’
assessment, these economic activities are either aligned or
eligible with the EU Taxonomy. Share of Opex within the same
scope of EU Taxonomy was 1.8 percent and share of Capex within
the same scope of EU Taxonomy was 1.0 percent.
• Do no significant harm to any of the other objectives, while
It must be noted that the Taxonomy reporting scope and
respecting basic human rights and labor standards.
criteria may change in coming years as this is only the third
reporting round, and therefore also the figures may not be
comparable between earlier and future reporting periods.
Strategy Review
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Financial Statements
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Non-Financial Information
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133
Nokian Tyres’ approach to calculate the EU
Taxonomy eligibility and alignment:
Net sales
Capex and Opex
• D: Aligned or eligible tire production companies’ and retreading
plants’ Opex: Research and Development and real estate
expenses deducted by depreciation & amortization
• E: Group Opex: Research and Development and real estate
• A: Amount of aligned or eligible net sales coming from tires
expenses deducted by depreciation & amortization
having EU Tyre Labelling grade A or B in rolling resistance and
grade A in pass-by noise, and from tire retreading business
activities. In previous years, the pass-by noise grade was not
a criterion and all rolling resistance class C tires were still
included, so the figures from 2022 have been restated.
• Heavy off-road tires for professional use will be excluded as
there is no solid data (or public benchmark) available for use
phase CO2 emissions.
• B: Total amount of net sales
• C: Share of net sales within the scope of EU Taxonomy
• C = A/B%
• F: Share of Opex within the scope of EU Taxonomy
• F = C*D/E%
• Justification: represents share of Opex used for producing low
rolling resistance tires and offering retreading services with
reasonable accuracy.
• G: Aligned or eligible tire production companies’ and retreading
plants’ tangible Capex
• H: Group Capex including tangible and intangible investments
•
•
• Justification: represents share of Capex used for production
I: Share of Capex within the scope of EU Taxonomy
I = C*G/H%
readiness for low rolling resistance tires and offering
retreading services with reasonable accuracy.
• Remark: handpicking and assessing each investment’s relation
to EU Taxonomy separately is regarded not to give much
additional accuracy.
Strategy Review
Report by the Board of Directors
Financial Statements
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Non-Financial Information
Remuneration
134
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year 2023
Year
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
f
o
n
o
i
t
r
o
p
o
r
P
r
a
e
y
,
r
e
v
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n
r
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t
)
4
(
3
2
0
2
)
3
(
r
e
v
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n
r
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5
(
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t
a
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e
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m
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C
)
6
(
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p
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A
)
8
(
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P
)
9
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7
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1
.
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d
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.
2
A
.
l
(
e
b
g
i
i
l
e
-
m
u
m
n
M
i
i
EUR
million
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
r
a
e
y
,
r
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v
o
n
r
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t
)
8
1
(
2
2
0
2
%
y
r
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g
e
t
a
C
g
n
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l
b
a
n
e
Economic Activities (1)
Code (2)
Text
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacturing of other low carbon technologies 3.6.
23.1
2.0%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
23.1
2.0%
100%
23.1
2.0%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Repair, refurbishment and remanufacturing
5.1.
16.9
1.4%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
A. Turnover of Taxonomy-eligible activities
(A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities
TOTAL
* Year 2022 restated
16.9
1.4%
0%
0%
0%
0% 100%
0%
40.0
3.4% 57.8%
0%
0%
0% 42.3%
0%
1,133.6 96.6%
1,173.6
100%
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
2.1%*
2.1%*
2.1%*
-
-
-
l
a
n
o
i
t
i
s
n
a
r
t
)
0
2
(
y
t
i
v
i
t
c
a
y
r
o
g
e
t
a
C
T
)
9
1
(
y
t
i
v
i
t
c
a
E
E
E
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
135
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year 2023
Year
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
f
o
n
o
i
t
r
o
p
o
r
P
r
a
e
y
,
x
E
p
a
C
)
4
(
3
2
0
2
)
3
(
x
E
p
a
C
e
g
n
a
h
C
e
t
a
m
i
l
C
)
5
(
n
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t
a
g
i
t
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M
e
g
n
a
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C
e
t
a
m
i
l
C
)
6
(
n
o
i
t
a
t
p
a
d
A
)
8
(
n
o
i
t
u
l
l
o
P
)
9
(
y
m
o
n
o
c
E
l
r
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r
i
C
)
7
(
r
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t
a
W
)
0
1
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)
2
1
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a
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p
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A
)
4
1
(
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o
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P
)
5
1
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)
3
1
(
r
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)
6
1
(
y
t
i
s
r
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v
d
o
B
i
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)
7
1
(
s
d
r
a
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g
e
f
a
S
f
o
n
o
i
t
r
o
p
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r
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-
y
m
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n
o
x
a
T
r
o
)
.
1
.
A
(
d
e
n
g
i
l
a
)
.
2
A
.
l
(
e
b
g
i
i
l
e
-
m
u
m
n
M
i
i
EUR
million
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
y
r
o
g
e
t
a
C
g
n
i
l
b
a
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e
r
a
e
y
,
x
E
p
a
C
)
8
1
(
2
2
0
2
%
Economic Activities (1)
Code (2)
Text
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacturing of other low carbon technologies 3.6.
2.4
1.0%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
2.4
2.4
1.0%
1.0%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Repair, refurbishment and remanufacturing
5.1.
0.1
0%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
A. CapEx of Taxonomy-eligible activities
(A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities
TOTAL
* Year 2022 restated
0.1
0%
0%
0%
0%
0% 100%
0%
2.5
1.0% 96.0%
0%
0%
0%
4.0%
0%
249.6 99.0%
252.1
100%
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
1.1%*
-
-
-
l
a
n
o
i
t
i
s
n
a
r
t
)
0
2
(
y
t
i
v
i
t
c
a
y
r
o
g
e
t
a
C
T
)
9
1
(
y
t
i
v
i
t
c
a
E
E
E
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
136
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year 2023
Year
Substantial contribution criteria
DNSH criteria (“Does Not Significantly Harm”)
f
o
n
o
i
t
r
o
p
o
r
P
r
a
e
y
,
x
E
p
O
)
4
(
3
2
0
2
)
3
(
x
E
p
O
e
g
n
a
h
C
e
t
a
m
i
l
C
)
5
(
n
o
i
t
a
g
i
t
i
M
e
g
n
a
h
C
e
t
a
m
i
l
C
)
6
(
n
o
i
t
a
t
p
a
d
A
)
8
(
n
o
i
t
u
l
l
o
P
)
9
(
y
m
o
n
o
c
E
l
r
a
u
c
r
i
C
)
7
(
r
e
t
a
W
)
0
1
(
y
t
i
s
r
e
v
d
o
B
i
i
e
g
n
a
h
C
e
t
a
m
i
l
C
)
1
1
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n
o
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t
a
g
i
t
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M
e
g
n
a
h
C
e
t
a
m
i
l
C
)
2
1
(
n
o
i
t
a
t
p
a
d
A
)
4
1
(
n
o
i
t
u
l
l
o
P
)
5
1
(
y
m
o
n
o
c
E
l
r
a
u
c
r
i
C
)
3
1
(
r
e
t
a
W
)
6
1
(
y
t
i
s
r
e
v
d
o
B
i
i
)
7
1
(
s
d
r
a
u
g
e
f
a
S
f
o
n
o
i
t
r
o
p
o
r
P
-
y
m
o
n
o
x
a
T
r
o
)
.
1
.
A
(
d
e
n
g
i
l
a
m
u
m
n
M
i
i
)
.
2
A
.
l
(
e
b
g
i
i
l
e
-
EUR
million
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
y
r
o
g
e
t
a
C
g
n
i
l
b
a
n
e
r
a
e
y
,
x
E
p
O
)
8
1
(
2
2
0
2
%
Economic Activities (1)
Code (2)
Text
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities
(Taxonomy-aligned)
Manufacturing of other low carbon technologies 3.6.
0.6
1.8%
Y
N/EL
N/EL
N/EL
N/EL
N/EL
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1)
Of which enabling
Of which transitional
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
0.6
0.6
1.8%
1.8%
100%
100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
Repair, refurbishment and remanufacturing
5.1.
0.0
0%
N/EL
N/EL
N/EL
N/EL
EL
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
A. OpEx of Taxonomy-eligible activities
(A.1+A.2)
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities
TOTAL
* Year 2022 restated
0.0
0%
0%
0%
0%
0%
0%
0%
0.6
1.8% 100%
0%
0%
0%
0%
0%
35.9 98.2%
36.5
100%
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
1.9%*
-
-
-
l
a
n
o
i
t
i
s
n
a
r
t
)
0
2
(
y
t
i
v
i
t
c
a
y
r
o
g
e
t
a
C
T
)
9
1
(
y
t
i
v
i
t
c
a
E
E
E
Strategy Review
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Financial Statements
Governance
Non-Financial Information
Remuneration
137
People
IMPACTS: Safety and well-being of personnel
Nokian Tyres’ principles in all operations are fair treatment and
respect of human rights when collaborating with its personnel
or other stakeholders. This principle of equality and non-
discrimination is an essential part of the company’s operations,
and the management of diversity is based on the concept of
equality and equal prerequisites for work.
People Review discussions with all employees focus on
managing performance and employee´s personal development.
Internal job rotation, on-the-job learning, and other learning
solutions have a key role in supporting employee development.
In 2023, Nokian Tyres conducted the yearly personnel survey
Drive! to measure well-being, equality, inclusion, and engagement
inside the organization. In the company-wide survey, for the
question concerning equality, the score was 67 on a scale of
0–100, which is 7 points below the global benchmark. Improving
equality is a priority in Nokian Tyres’ sustainability work, and the
aim is to continuously improve the score. This equality KPI is being
followed annually.
Nokian Tyres’ commitment and efforts related to data
protection continued throughout the year.
Safety work continues
Products
Nokian Tyres’ goal is to promote occupational health and minimize
the number of occupational accidents. Occupational health and
safety are an integral part of the company’s daily management
and operations.
Safety is Nokian Tyres’ priority, and the company’s long-term
goal is to decrease the lost-time accident frequency LTIF from 8.3
in 2018 to 1.5 in 2025. In 2023 the lost-time accident frequency
developed negatively. To improve the situation in 2024, Nokian
Tyres will strengthen safety culture implementation by engaging
the employees even more actively than before, as well as by
improving procedures and safety management according to the
Nokian Tyres’ Safety Management Standard.
Lost-time injury frequency (LTIF)*
2019
4.3
2020
3.7
2021
4.1
2022
3.2
2023
4.7
* Number of incidents / 1,000,000 hours worked
IMPACTS: Continuous improvement of traffic safety of tires and
the sustainability of raw materials in tires
Nokian Tyres’ R&D constantly develops new ways of replacing
fossil-based raw materials with recycled or renewable materials
to enable more sustainable tire manufacturing. Nokian Tyres aims
to increase the share of recycled or renewable raw materials in its
tires to 50 percent by 2030.
Rolling resistance
Carbon dioxide, CO2, is the most significant greenhouse gas
generated by traffic. The higher the rolling resistance of a tire is,
the higher the fuel consumption and CO2 emissions will be.
Nokian Tyres’ goal for developing the rolling resistance of its
tires is to have at least 60 tires in the best rolling resistance A class
of EU Tyre Labelling system by 2028.
Nokian Tyres products in the rolling resistance A class*
Status in 2023
Goal for 2028
10
60
* Tires included in the EU Tyre Labelling
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Developing the safety of winter tires
Supply chain
Nokian Tyres participates actively in developing the EU Tyre
Labelling test method standards, such as wet grip and ice grip.
As a Scandinavian tire designer and manufacturer, the safety of
winter tires is one of Nokian Tyres’ top priorities in traffic safety
of tires.
As of May 2021, the EU Tyre Labelling includes a label for snow
grip marking as well as ice grip marking. A tire that is approved for
severe snow conditions can have the snow grip marking, and a tire
that passes the international ice grip test method can also have
the ice grip marking on their label. Nokian Tyres’ target for the
winter tire safety performance level was that by 2025, 100 percent
of Nordic Nokian Tyres Hakkapeliitta winter passenger car and
SUV tires fulfill the 2021 EU ice grip criteria. In 2022, the target was
reached, and the company works to maintain that level.
IMPACTS: Sustainable natural rubber procurement, climate change
mitigation in supply chain
Natural rubber is one of the main ingredients of tires. Cooperation
with the industry and other stakeholders is vital in improving
the conditions of the employees working in the natural rubber
industry and the state of the environment. Nokian Tyres is a
member of the Global Platform for Sustainable Natural Rubber
(GPSNR). It is a platform whose members include natural rubber
farmers, processors and traders, tire makers and other natural
rubber product makers, car makers and other natural rubber
product users, financial institutions, and civil societies.
In 2021, Nokian Tyres updated its Supplier Code of Conduct,
and adopted a sustainable natural rubber policy that is fully
aligned with the policy framework of the GPSNR. The company’s
sustainability in natural rubber is developed through the
framework of this policy. In 2023, Nokian Tyres conducted eight
sustainability audits of natural rubber processing plants that are
suppliers for the company.
As part of the Nokian Tyres science-based targets for reducing
CO2 emissions, a new KPI for the supply chain was created. During
2023 Nokian Tyres aimed to gather Product Carbon Footprint from
suppliers for at least 40 raw materials, and CO2 data from at least
15 transport suppliers. Both targets were achieved.
In Norway, the Transparency Act (Åpenhetsloven) requires
enterprises that meet certain requirements and operate in
Norway to conduct due diligence assessments. The aim is to
ensure that human rights and working conditions are respected
throughout the value chain. This means that companies must
look at their own business, their supply chain, and their business
partners to find out where the biggest risks are. Nokian Tyres
has a sales company and Vianor tire chain company in Norway,
and the accounts required by the Transparency Act can be
accessed on the company’s websites at www.nokiantyres.no/
bedriften/baerekraftighet/apenhetsloven and www.vianor.no/
bedriftskunder/om-oss/apenhetsloven, respectively.
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Signatures for the Non-Financial Information Statement
Helsinki, February 6, 2024
Jukka Hienonen
Pekka Vauramo
Susanne Hahn
Markus Korsten
Veronica Lindholm
Christopher Ostrander
Jouko Pölönen
George Rietbergen
Reima Rytsölä
Jukka Moisio
President and CEO
R E M U N E R AT I O N
R E P O R T
M A D E FO R D E M A N D I N G C O N D I T I O N S
Tracy Fenner-Smycz, Mold Maintenance Team LeaderBEING CLOSE TO OUR CUSTOMERS IS NOT JUST ABOUT INCREASED CAPACITY AND PRESENCE, BUT OPERATING IN A CUSTOMER-FIRST MANNER. Strategy Review
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141
Remuneration Report 2023
People and Sustainability Committee
– Chair’s greeting
The past year 2023 was a time of rebuilding and investments for
Nokian Tyres to enable growth and improve profitability. The car and
tire market environment was demanding due to low consumer confi-
dence together with customers focus on inventory management.
The ability shown by Nokian Tyres personnel to navigate in a
fast-changing operating environment has built a solid foundation
for growth in line with the company’s strategy and targets.
After Nokian Tyres exited Russia in March 2023, the company
continued to increase production capacity at its factories in Finland
and in the US and launched the first tires produced through contract
manufacturing. Already in Fall 2022, Nokian Tyres’ Board of Directors
decided to invest approximately EUR 650 million in a new tire factory
in Romania. The construction of the factory is progressing as planned,
and commercial tire production is expected to start in 2025. When
completed, the factory in Romania will be the world’s first zero CO2
emission tire factory.
Nokian Tyres has been striving to reduce greenhouse gas
emissions consistently, as exemplified by its target achieved in 2023
to reduce the direct CO2 emissions of its tire factories by more than
50 percent per ton of tire produced. The target was achieved seven
years ahead of schedule.
supports the achievement of financial targets towards net sales of
EUR 2 billion and strong profitability by 2027.
The Nokian Tyres team is building the new Nokian Tyres, and the
management and personnel have continued to discuss and develop
the culture of the company to enable quick transformation and
adaptation to the changed operating environment. The People and
Sustainability Committee has closely monitored the progress of this
work, in addition to the strategy execution and the Romanian factory
project.
At the beginning of 2023, Nokian Tyres adopted a new long-term
incentive plan for 2023–2027. The reduction of direct CO2 emissions
was also included in the targets, supporting the company’s strategic
target in sustainability. The incentives of the previous year’s
short-term incentive plan were paid, with an exception granted by
the Board, in two parts in March and June of 2023. The short-term
incentive target during 2023 has emphasized financial indicators,
such as net sales and profitability.
The Remuneration Policy will be updated in 2024. The new
Remuneration Policy aims to support Nokian Tyres in achieving
short- and long-term strategic targets, strengthening sustainable
development, and fostering employee commitment to Nokian Tyres.
VERONICA LINDHOLM
Capacity expansion at the US and Finnish factories has also
progressed well. Nokian Tyres’ increased production capacity
Chair of the Nokian Tyres Board’s People and
Sustainability Committee
N O K I A N T Y R E S ’ R E N U M E R AT I O N
P O L I C Y A N D I N C E N T I V E S Y S T E M
S U P P O R T T H E C O M PA N Y ’ S S T R AT E GY
A N D TA R G E T S .
Introduction
Dear shareholder,
This remuneration report (the “Remuneration Report”) describes
the implementation of the remuneration policy (the “Remuneration
Policy”) of Nokian Tyres plc (the “company” or “Nokian Tyres”) for
the financial year 2023. The Remuneration Policy was presented to
and adopted by an advisory resolution in the 2020 Annual General
Meeting and shall be applied until the 2024 Annual General Meeting
unless a revised policy is presented to the general meeting before
this. The new Remuneration Policy will be presented at the 2024
Annual General Meeting for approval.
The Remuneration Policy describes:
•
the remuneration of the Board of Directors
and the President and CEO
the considerations of determining the policy
•
• practical implementation of the policy
This Remuneration Report provides investors with more detailed
information on the development of Nokian Tyres’ remuneration, as
well as on certain strategic indicators and the implementation of an
up-to-date remuneration policy in the financial year 2023.
The Remuneration Report is prepared in accordance with the
Securities Market Association’s Corporate Governance Code 2020
and the applicable legislation. The 2023 Annual General Meeting
resolved to adopt the company’s following Remuneration Report
2022, through an advisory resolution supported by approximately
80 percent of the votes cast at the 2023 Annual General Meeting,
indicating approval of the Remuneration Report 2022 by the share-
holders of the company.
The Remuneration Policy can be found www.nokiantyres.
com/company/investors/corporate-governance/salaries-and-
remunerations/
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Development of Nokian Tyres performance
and remuneration
Nokian Tyres’ net sales for the financial year 2023 were EUR 1,173.6
million, and the segments operating profit was EUR 65.1 million. The
war in Ukraine, which began in 2022, quickly changed Nokian Tyres’
short-term business targets and strategy. The focus of remuneration
in 2023 has been to engage key employees in the changed operating
environment and to promote the implementation of the strategy in
all the company’s functions. The strategy changes supported both
the company’s development and financial performance in 2023 as
well as future growth targets.
The table shows as an index comparison the development of the
remuneration of the Board of Directors, the CEO, and employees
during the previous five financial years.
Remuneration 2019–2023
Remuneration index
2019 2020 2021 2022 2023
Total Board remuneration –
Average annual fee paid to
Board members1
President and CEO salaries
and financial benefits
Average salary cost per
employee2
100% 112% 106% 123% 119%
100% 140% 85% 110% 104%
100% 98% 116% 143% 131%
1 Total Board remuneration – Average annual fee paid to Board
members calculated by dividing total amount of fees paid to Board
members each year, by composition of Board (number of members)
during each year (2019–2020: 8 Board members, 2021–2023: 9
Board members) and excluding fees paid to members leaving during
following term. Further details in section ‘’ Remuneration and financial
development between 2019–2023’’.
2 Average cost per employee is calculated by dividing the total amount
of salaries, incentives, and other related employee costs for the
corresponding financial year by the average number of employees
during each financial year.
The goal of the Remuneration Policy is to strengthen Nokian Tyres
to achieve short- and long-term strategic goals, sustainable devel-
opment, and the commitment of personnel to Nokian Tyres.
No changes were made to Nokian Tyres’ short-term incentive plan
in 2023. In the 2023 performance period, targets were set to Nokian
Tyres’ segments operating profit, weight of 60 percent, and the
segments net sales weighting was 40 percent, a total of 100 percent.
At the end of 2022, both segments operating profit and
segments net sales had a 50 percent weighting in the Group-level
targets of the amended short-term incentive plan. The performance
of the CEO and Management Team was also measured through a
climate-related target. The incentives and climate-related incentive
for the performance period for the first half of the financial year
2022 were paid in March 2023, and the incentives for the perfor-
mance period for the second half of the year in June 2023.
Long-term incentives are a part of Nokian Tyres’ key employee
incentive and retention program designed to align the goals of
the company’s key personnel with the company’s shareholders to
increase the value of the company in the long term, to commit key
personnel to the company and its strategic goals and to offer a
competitive reward for key personnel. Nokian Tyres has two annually
commencing long-term share-based incentive plans decided by the
Board of Directors: The Performance Share Plan and the Restricted
Share Plan. The Board of Directors approved both as starting in 2023
and renewed the performance share plan in February 2023 for the
following three-year period.
The Performance Share Plan is the company’s most important
long-term incentive scheme, the objectives of which are measured
by EBITDA, increase in passenger car tire production volume and
reduction in direct CO2 emissions. The performance period is
2023–2024, and the possible payout will be in Spring 2026.
Nokian Tyres Restricted Share Plan serves as a complementary
long-term incentive tool, used selectively for retention of Nokian
Tyres key employees. The Restricted Share Plan consists of a
three-year retention period, after which the share awards granted
within the plan will be paid to the participants. A precondition for the
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payment of the share reward based on the Restricted Share Plan is
that the employment relationship of a participant with Nokian Tyres
continues until the payment date of the award. In addition to this
precondition, a financial performance criterion is applied to Nokian
Tyres Management Team, including the President and CEO, with the
aim of aligning the interests of the CEO and shareholders related to
the company’s financial development.
In February 2023, the Board of Directors decided to change
the financial performance criterion from ROCE (return on capital
employed) to segments ROCE. The segments ROCE is applicable
in 2020–2022, 2021–2023, 2022–2024 plans, as well in the 2023
Restricted share plan with the restricted period of 2023–2025.
The three-year restriction period of the Restricted Share Plan
2020–2022 ended at the end of the financial year 2022. In the share-
based incentive plan, the financial threshold set for the CEO and the
members of the Management Team for the segments’ total ROCE was
reached. The rewards to be paid corresponded to a total of 71,550
gross Nokian Tyres plc shares, of which 10,000 gross shares were
directed to the President and CEO. The fees were paid in March 2023.
During the financial year 2023, Nokian Tyres temporarily deviated
from the approved Remuneration Policy by applying a financial
performance indicator to the restricted share plans offered to the
President and CEO. As well Performance Share Plan 2023–2024 has
a two-year performance period and one year retention period. Apart
from these deviations, the remuneration of the Board of Directors
and the President and CEO followed the Remuneration Policy in 2023.
Net sales and Segments operating profit
EUR million
2,000
1,500
1,000
500
0
1,585.4
1,714.1
1,313.8
1,350.5
1,173.6
337.2
190.2
324.8
17.8
65.1
2019
2020
2021
2022
2023
Net sales
Segments operating profit
Segments operating profit, %
Figures for 2021 and earlier years have not been
restated and include Russia.
%
40
30
20
10
0
Segments earnings per share and dividend per share, EUR
Net sales and EBITDA*, EUR million
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
3.06*
1.84
1.04
0.55**
-2.16
2023
-0.86
2019
2020
2021
2022
Segments earnings per share
Dividend per share
* Segments EPS 2019 excl. the impact of the rulings
on the tax disputes of EUR 1.08 were EUR 1.98
** The Board’s proposal to the Annual General Meeting
on the payment of a maximum amount of dividend
Figures for 2021 and earlier years have not been restated
and include Russia.
2,000
1,500
1,000
500
0
1,585.4
1,714.1
1,313.8
1,350.5
1,173.6
441.7
425.6
275.9
170.2
147.0
2019
2020
2021
2022
2023
Net sales
EBITDA
* Depreciations and Amortizations (DA) in EBITDA
includes impairments from 2020 onward.
Figures for 2021 and earlier years have not been
restated and include Russia.
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Remuneration of the Board
of Directors 2023
Nokian Tyres 2023 Annual General Meeting decided the following
annual fees to be paid to the Board of Directors serving during the
financial year 2023:
Chair of the Board: A fee of 110,000 euros per year
Deputy Chair and to the Chairs of the Audit Committee and People
and Sustainability Committee: A fee of 75,000 euros per year
Other members of the Board: A fee of 52,500 euros per year
For each Board and Board Committee meeting, the fee is 700 euros.
For Board members resident in Europe, the fee for each meeting
outside a member’s home country within Europe is doubled, and
for each meeting outside Europe, the fee is tripled. For Board
members resident outside Europe, the fee for each meeting outside
a member’s home country is tripled. If a member participates in a
meeting via telephone or video connection, the remuneration is
700 euros. Travel expenses are compensated in accordance with the
company’s travel policy.
Board member
Position on the Board
Jukka Hienonen
Chair of the Board /
Member of the People and Sustainability Committee /
Member of the Shareholders’ Nomination Board
Annual fixed
fee (EUR)1
Board
meeting
fees (EUR)
Committee
meeting
fees (EUR)
Total fees
(EUR)
Shares
acquired with
fixed annual
fee (number
of shares)
110,000
8,400
3,500
121,900
5,000
Veronica Lindholm Board member /
75,000
8,400
3,500
86,900
3,409
Chair of the People and Sustainability Committee
Pekka Vauramo
Deputy Chair /
Member of the People and Sustainability Committee
Jouko Pölönen
Board member / Chair of the Audit Committee
Christopher
Ostrander
Inka Mero
Heikki Allonen
Board member/ Member of Audit Committee
Board member /
Member of the Audit Committee (until Apr 26, 2023)
Board member /
Member of the Audit Committee (until Apr 26, 2023)
George Rietbergen Board member
Susanne Hahn
Reima Rytsölä
Board member/
Member of People and Sustainability Committee
Board member /
Member of the Audit Committee
75,000
8,400
3,500
86,900
3,409
75,000
52,500
8,400
15,400
3,500
4,900
86,900
72,800
3,409
2,386
-
-
2,800
1,400
4,200
2,800
1,400
4,200
-
-
52,500
52,500
11,900
11,900
–
2,800
64,400
67,200
2,386
2,386
52,500
6,300
2,100
60,900
2,386
Markus Korsten
Board member
52,500
9,800
–
62,300
2,386
1 60% of the annual fixed fee paid in cash and 40% in company shares. Management transaction stock exchange releases regarding the share acquisitions
published on April 28, 2023. The company paid asset transfer taxes arising from the acquisition of shares.
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The targets set for Performance Period 2023–2024 of the Nokian
The potential share rewards will be paid partly in shares in Nokian
Tyres Performance Share Plan 2023–2027 are divided as follows:
LTI criteria 2023–2024 weights, %
EBITDA 50%
Increase in passenger car tire
production 40%
Reduction in direct CO2
emissions 10%
Tyres and partly in cash. The cash portion of the reward is intended
to cover the taxes arising from the paid reward. President and CEO
Jukka Moisio was not granted restricted shares during the financial
year 2023.
Nokian Tyres temporarily deviated from the Remuneration
Policy approved by a separate decision of the Board of Directors
in the Restricted Share Plan during the financial year 2023, which
also covers the period 2023–2025. CEO Jukka Moisio has not been
granted any conditional share-based incentive plans for 2023–2025.
Total segments ROCE’s average-linked threshold for financial years
2022–2024 applies to all provisions made to the Management
Team and to the restricted share plan commenced in 2023 with a
restriction period of 2023–2025 as described in the company’s stock
exchange release published on February 7, 2023.
The President and CEO is required to hold at least 25 percent
of the shares received as rewards from the long-term incentive
programs and accumulate the shares from the incentive programs
until the value of the shares received from the share programs
equals the annual gross base salary of the President and CEO.
Short-term incentive plans
President and CEO Jukka Moisio is entitled to short-term incentives
as described in the Remuneration Policy. The short-term incentive
on the target amount is equivalent to 50 percent of the annual base
salary, and the maximum amount is 100 percent of the annual base
salary. The performance period is typically one year unless decided
otherwise by the Board. The possible reward is paid out in the first
half of the year following the performance period.
In accordance with the decision of the Board of Directors,
the performance targets for President and CEO Jukka Moisio’s
short-term incentives for the performance period of the financial
year 2023 were Nokian Tyres segments operating profit 60 percent
and segments net sales 40 percent, in total 100 percent.
Both targets did not meet the minimum level and thereby,
no payments will be conducted.
Long-term incentive plans
The President and CEO’s long-term incentives (LTI) consist of share
incentive plans. The value of the performance-based LTI payout is
capped at 250 percent of the annual base salary, and the annual
target amount is 125 percent of the annual base salary.
President and CEO Jukka Moisio was granted 90,882 perfor-
mance-based shares from Performance Period 2023–2024 of Nokian
Tyres Performance Share Plan 2023–2027. The possible reward will be
paid during the first half of 2026 after a one-year retention period
in case the targets set by the Board of Directors for Performance
Period 2023–2024 are met.
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Active Long-term incentive plans and shares granted to the President and CEO
Long-term incentive plan and performance period
Gross shares granted
Maximum gross
share award1
Performance criteria
Performance share plan 2021–2023
Performance share plan 2022–2024
Performance share plan 2023–2024
Achievement of set targets
31,013
27,680
90,882
100%
62,026
55,360
181,764
200%
Segments ROCE (50% weight) & segments EPS (50% weight)
Segments ROCE (50% weight) & segments EPS (50% weight)
EBITDA (50% weight), increase in passenger car tire production volume (40% weight) and
reduction in direct CO2 emissions (10% weight).
Pay-out of
possible reward
H1/2024
H1/2025
H1/2026
1 The potential share rewards will be paid partly in shares of Nokian Tyres plc and partly in cash. Gross shares is the amount of shares earned, based on performance against set targets and used to calculate the cash proportion.
Actual shares delivered = net shares. Cash portion of the reward is intended to cover the taxes arising from the paid reward.
Remuneration of the President and CEO 2023
President and CEO
Jukka Moisio
Fixed annual
salary (incl. holiday
compensation)
Monthly base salary
817,614
61,800 until Jun 30, 2023
64,890 as of Jul 1, 2023
Paid salary during
financial year 2023 (incl.
holiday compensation and
mobile phone benefit)
Paid performance-
based bonuses
(based on year 2022)
Due performance-
based bonuses
(based on year 2023)1
Total value of
awarded share-
based bonus
Supplementary
pension
contribution
Severance
payment
Total fees paid
during financial
year 2023
798,202
538,680
0
84,193
–
–
1,421,075
Note: All amounts presented are in EUR.
1 Due performance-based bonuses (based on year 2023) will be paid during the financial year 2024.
Short-term incentive opportunities as of annual base salary
Performance share plan long-term incentives1
Target
50%
Max
100%
Target
125%
Max
250%
1 Nokian Tyres may in addition offer restricted share plans for the President and CEO in situations like new hire and retention, at the Board’s discretion.
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Based on the Board of Directors’ decision President and CEO Jukka
Moisio’s salary was reviewed during financial year 2023, and the
monthly base salary was thereby, until June 30, 2023, 61,800 euros
and as of July 1, 2023, the salary was increased by five percent to
64,890 euros.
President and CEO Jukka Moisio has a company-paid mobile
phone benefit, with a value of 20 euros per month or 240 euros per
annum. Fixed annual salary incl. holiday compensation is calculated
by multiplying the monthly base salary 64,890 euros by 12.6 percent.
Remuneration of the President and CEO:
2023 actual paid salary and variable elements, %
Base salary* 56%
Short-term incentive 38%
Long-term incentive** 6%
Pension and benefits excluded
* Holiday compensation included
** Restricted Share Plan
Pension and information regarding
the termination of the employment of
the President and CEO
The pension accumulation and retirement age of the President and
CEO are determined by the practices and terms of the applicable
law in the home country of the President and CEO. An additional
defined contribution pension plan that corresponds to the relevant
local market can be arranged by the company. President and CEO
Jukka Moisio does not have a company-paid supplementary pension
arrangement. The retirement age and the pension are determined in
accordance with the Employees Pensions Act.
The President and CEO’s period of notice is 6 months. If the
agreement is terminated by the company, the President and CEO is
entitled to compensation corresponding to 12 months’ salary and
other benefits in addition to the notice period’s salary.
Malus and clawback
Based on the terms and conditions of the incentive plans, if the
President and CEO receives a reward based on the remuneration
scheme that subsequently turns out to be incorrectly paid due to
intent or negligence by the President and CEO, Nokian Tyres has the
right to retroactively restate the amount and reclaim the excess
part of the rewards paid from the short- and long-term incentives
pursuant to rules regarding unjust enrichment.
The short- and long-term remuneration schemes are discre-
tionary in nature and do not form part of the terms and conditions
of the service contract of the President and CEO, and the Board of
Directors shall decide on the implementation of the schemes and
their terms and conditions at any time.
Nokian Tyres did not exercise any malus or clawback rights during
the financial year 2023.
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Remuneration and financial development 2019–2023
2019
2020
2021
2022
2023
2019
2020
2021
2022
**
2023
Board remuneration, total pay EUR
Jukka Hienonen
Veronica Lindholm
Pekka Vauramo
Jouko Pölönen
Christopher Ostrander
–
105,800
112,700
126,100
121,900
56,400
65,500
60,200
91,100
86,900
53,400
63,100
82,000
90,400
86,900
–
–
–
–
59,100
90,400
86,900
57,700
68,600
72,800
Inka Mero (until Apr 26, 2023)
54,600
63,100
60,900
67,900
Heikki Allonen (until Apr 26, 2023)
54,600
63,100
60,900
67,200
4,200
4,200
George Rietbergen
54,600
60,100
57,500
67,200
64,400
Susanne Hahn
Raimo Lind
Kari Jordan
Petteri Walldén
Reima Rytsölä
Markus Korsten
–
–
–
61,600
67,200
76,500
85,600
83,400
5,600
78,300
87,400
1,800
101,400
6,600
–
–
–
–
–
–
–
–
–
–
–
–
–
–
60,900
62,300
Total (excl. fees paid to leaving members)1
529,800
593,700
634,400 730,500*
710,200
Board size, number of members
Average total pay per member1
Index
President and CEO, total pay EUR
Jukka Moisio May 27, 2020–
8
8
9
9
9
66,225
74,213
70,489
81,167
78,911
100.0%
112.0%
106.5%
122.5%
119.2%
–
429,611
1,157,960 1,502,304
1,421,075
Hille Korhonen Jun 1, 2017–May 26, 2020
1,362,987
1,472,192
–
–
–
Total
Index
1,362,987
1,901,803
1,157,960 1,502,304
1,421,075
100.0%
139.5%
85.0%
110.2%
104.3%
Employee remuneration, average EUR
Salaries, incentives, and
other related costs, EUR million
Group employees on average
during financial year
Average per year, k EUR
Index
Financial development 2019–2023
Operating profit, EUR million
Segments operating profit, EUR million
Index3
EPS, EUR
Segments EPS, EUR
Index3
ROCE, %
Segments ROCE, %
Index3
235.3
224.7
270.7
237.5
232.1
4,9952
47.11
4,859
46.24
4,941
54.79
3,517
67.53
3,754
61.83
100.0%
98.2%
116.3%
143.4%
131.2%
316.5
337.2
120.0
190.2
268.2
324.8
100.0%
37.9%
84.7%
2.894
3.044
0.62
1.04
100.0%
21.4%
17.6%
18.6%
6.0%
9.3%
100.0%
34.1%
1.49
1.84
51.6%
13.7%
15.8%
77.8%
56.7
17.8
17.9%
-1.27
-0.86
32.1
65.1
10.1%
-2.36
-2.16
-43.9%
-81.7%
3.1%
1.0%
17.6%
2.2%
4.0%
12.5%
1 Average total pay per Board member is calculated by dividing the total fees paid to the Board members, excl.
members who left the Board during the corresponding term. I.e. fees paid to Petteri Walldén have been removed
from the year 2020 average, Kari Jordan from the 2021 average and Raimo Lind from the 2022 average, Inka Mero
and Heikki Allonen from the 2023 average.
* Correction: Raimo Lind deducted from total sum: Total (excl. fees paid to leaving members)1
2 Figures corrected to include passive employment in December 2019 (employees on long leave).
3 Financial measures used for index according to IFRS reporting. Segments figures 2019–2023 presented
(not calculated in index) in accordance with Nokian Tyres new reporting practices Stock exchange release about
Nokian Tyres new reporting practices April 24th, 2020.
4 EPS 2019 excl. the impact of the rulings on the tax disputes of EUR 1.08 were EUR 1.81. Segments EPS 2019
excl. the impact was EUR 1.98.
** Year 2022 excluding discontinued operations.
Strategy Review
Report by the Board of Directors
Financial Statements
Governance
Non-Financial Information
Remuneration
149
Investor Information and Investor Relations
Annual General Meeting 2024
The Annual General Meeting of Nokian Tyres plc is tentatively
scheduled at Messukeskus Siipi conference center, in Helsinki,
Finland, at the address Rautatieläisenkatu 3, on April 30, 2024, at
10:00 a.m. EEST. Registration of attendants, the distribution of
voting tickets and a coffee service will commence at 8:30 a.m.
More information: www.nokiantyres.com/company/investors/
corporate-governance/annual-general-meeting/2024/
Dividend payment
The Board of Directors proposes to the Annual General Meeting that
a dividend of EUR 0.35 per share for the financial year 2023 would be
paid in May and that the AGM would authorize the Board to decide on
the second dividend instalment of a maximum of EUR 0.20 per share
to be distributed in December. If a maximum amount of dividends is
paid, a dividend payout ratio is –23%.
Change of address
Shareholders are advised to inform any changes in their contact
information to the book entry register in which they have a book
entry securities account.
Financial information
Nokian Tyres publishes financial information in Finnish and English.
Financial reports, statements, and stock exchange releases are
available at nokiantyres.com/investors. Comprehensive investor
relations pages contain information on Nokian Tyres’ share, largest
shareholders registered in Finland and upcoming IR events, among
others.
Nokian Tyres’ stock exchange releases can be subscribed at
nokiantyres.com/company/publications/order-releases/
Financial reports in 2024
•
• Half-year Financial Report January–June: July 19, 2024
Interim Report January–September: October 29, 2024
•
Interim Report January–March: April 29, 2024
Silent period
Nokian Tyres observes a silent period before issuing financial state-
ments, interim and half-year reports.
• Start of the silent period: January 1, April 1, July 1, and October 1.
• End of the silent period: The results of the respective quarter are
made public.
During the silent period, the company’s top management and
Investor Relations do not meet representatives of capital markets
or financial media, nor comment on issues related to the company’s
financial situation or general outlook. If an event occurring during
the silent period requires immediate disclosure, Nokian Tyres will
disclose the information without delay in compliance with disclosure
rules and may also comment on the event concerned.
Flagging notifications
Under the provisions of the Securities Markets Act, changes in
holdings must be disclosed when the holding reaches, exceeds or
falls below 5%, 10%, 15%, 20%, 25%, 30%, 50%, 2/3 and 90% of the
voting rights or the numbers of shares of the company.
Notifications of changes in holdings or voting rights must be
made without undue delay.
Shareholders are advised to send the flagging notifications to
flaggings@nokiantyres.com
IR contact information
Regarding inquiries and meeting requests, you can send an email to
ir@nokiantyres.com
Päivi Antola, SVP, Communications, Investor Relations and Brand
Tel. +358 10 401 7327
Annukka Angeria, Senior Manager, Investor Relations and Strategic
Project Communications
Tel. +358 10 401 7581
Address:
Nokian Tyres plc
P.O. Box 20
(Visiting address: Pirkkalaistie 7)
FI–37101 Nokia
www.nokiantyres.com