motion N O K I A N T Y R E S P L C | A N N U A L R E P O R T 2 0 0 0 1 N O K I A N T Y R E S 2 0 0 0 analysis, innovation N O K I A N T Y R E S I N 2 0 0 0 P R O F I T B E F O R E E X T R A O R D I N A R Y I T E M S A N D T A X E S E U R 2 7 . 2 M I L L I O N (35.9 in 1999) N E T S A L E S E U R 3 9 8 . 5 M I L L I O N (322.6) E A R N I N G S P E R S H A R E E U R 1 . 8 8 (2.51) P E R S O N N E L A T T H E E N D O F T H E Y E A R 2 5 1 9 (2226) 2 N O K I A N T Y R E S 2 0 0 0 Development at Nokian Tyres is dynamic. It is steered by unbiased perception and careful analysis of the business environment. The analysis enables us to create solutions that provide added value for our customers and increase our potential for profitable growth. Our success stems from innovation based on serious knowledge of northern conditions. novation, growth 3 N O K I A N T Y R E S 2 0 0 0 F O C U S O N Nokian Tyres plc is the largest tyre manufacturer in the Nordic countries and the only tyre N O R T H E R N manufacturer in the world to focus on northern conditions. The company manufactures car, C O N D I T I O N S van and bicycle summer and winter tyres and various tyres for heavy machinery. In addition, the product range includes retreading materials. Nokian Tyres’ own tyre chain is the largest in the Nordic countries – the Vianor network comprises 151 outlets in Finland, Sweden, Norway, Estonia and Latvia. In 2000, the net sales of the Nokian Tyres Group amounted to EUR 398.5 million and the company employed 2,519 people at the end of the year. Product Development, Administration and Marketing as well as the majority of production are located in Nokia, Finland. Bicycle tyres are manufactured at the Lieksa factory. Additionally, the company has off-take manufacturing in Germany, Poland, the United States and Indonesia. Own sales companies are located in Sweden, Norway, Germany, Switzerland and in the United States. In Moscow, Russia, the company has a representative office. Nokian Tyres was founded in 1988 and was listed on the Helsinki Stock Exchange in 1995. The company’s roots go all the way back to 1898, when Suomen Gummitehdas Oy (Finnish Rubber Works) was founded. The company started manufacturing bicycle tyres in 1925 and passenger car tyres in 1932. Production of the company’s best known brand, the Nokian Hakka- peliitta, started in 1936. C O N T E N T S 4 I N T R O D U C T I O N N E T S A L E S I Net sales 6 S T R A T E G Y A N D V A L U E S I Foreign invoicing Million EUR 8 R E V I E W B Y T H E P R E S I D E N T 400 350 10 H O M E M A R K E T 300 14 G L O B A L M A R K E T 250 200 18 I N N O V A T I V E P R O D U C T S 150 22 P R O C E S S E S 100 26 P E R S O N N E L A N D E N V I R O N M E N T 50 0 30 M E M B E R S O F T H E M A N A G E M E N T M E E T I N G 1996 1997 1998 1999 2000 31 S H A R E S A N D S H A R E H O L D E R S P R O F I T B E F O R E E X T R A O R D I N A R Y 34 C O R P O R A T E G O V E R N A N C E I T E M S A N D T A X Million EUR 36 N O K I A N T Y R E S , 1 9 9 1 - 2 0 0 0 40 37 F I N A N C I A L S T A T E M E N T S 35 30 Contents of financial statements can be found on page 37 25 38 B O A R D O F D I R E C T O R S 20 57 C O N T A C T I N F O R M A T I O N 15 58 I N V E S T O R I N F O R M A T I O N 10 0 1996 1997 1998 1999 2000 4 N O K I A N T Y R E S 2 0 0 0 O P E R A T I O N S Car and Van tyres C O M P R I S E F I V E I 44% of net sales I products: passenger car and delivery van summer and winter tyres, a total P R O D U C T A R E A S of approximately 300 different tyres I new products1) amount to 40% of net sales I main markets: home market, i.e., Finland, Sweden, Norway, Russia and the Baltic States, and the Alpine region, the United States and Canada. I exports amount to 75% Heavy tyres I 13% of net sales I products: forestry tyres, harbour and mining machinery tyres, special agricultural tyres, industrial machinery tyres and truck tyres, a total of 248 different tyres I new products amount to 6% of net sales I main markets: the Nordic countries, Western and Southern Europe, the United States and Canada I exports amount to 67% Bicycle tyres I 1% of net sales I products: summer and winter tyres for standard and touring bikes, MTBs and racing bikes, a total of 230 different tyres I new products amount to 25% of net sales I main market areas: the Nordic countries, Western Europe, the United States and Canada I exports amount to 62% Retreading materials Net sales by I 2% of net sales I products: truck and other heavy vehicle and passenger car tyre treads, a total market area of 300 different products I new products amount to 16% of net sales I main market areas: the Finland 33% Nordic countries, the Baltic States and Western Europe I exports amount to 42% Sweden 20% Tyre chain Norway 14% I 40% of net sales I products: passenger car, heavy duty vehicle and industrial machinery tyres, Russia, the Baltic States 7% treads, car supplies and installation services I main market areas: Finland, Sweden, Norway, Other European Estonia and Latvia, a total of 151 outlets countries 19% 1) Products launched in 1999 or 2000 The United States and Canada 6% Other countries1 % K E Y F I N A N C I A L E A R N I N G S P E R S H A R E I N D I C A T O R S , 2 0 0 0 ( E P S ) 2000 % of net 1999 % of net Change sales sales % EUR Growth, % 3.50 Net sales, million EUR 398.5 322.6 23.5 3.00 30 Operating profit, million EUR 39.4 9.9 42.1 13.1 - 6.4 2.50 Profit before extraordinary 2.00 25 items and tax, million EUR 27.2 6.8 35.9 11.1 - 24.3 1.50 Return on capital employed, % 12.1 16.9 1.00 20 1) Return on equity, % 13.7 23.6 0.50 Interest bearing net debt, million EUR 182.1 45.7 170.4 52.8 6.9 0.00 15 1996 1997 1998 1999 2000 Gross investments, million EUR 67.5 16.9 85.7 26.6 - 21.2 1) = - 25.2% Cash flow from operations, million EUR 26.6 22.3 19.5 P E R S O N N E L , A V E R A G E Earnings per share, EUR 1.88 2.51 - 25.2 pcs 2600 Cash flow per share, EUR 2.52 2.14 17.8 2200 Shareholders’ equity per share, EUR 15.8 11.5 37.8 1800 1400 Equity ratio, % 36.1 30.9 1000 Personnel, average 2,462 2,023 21.7 600 200 0 1996 1997 1998 1999 2000 5 N O K I A N T Y R E S 2 0 0 0 N O K I A N T Y R E S ’ Focus on northern conditions F O C U S I N G Nokian Tyres is the only tyre manufacturer in the world to focus on products designed for S T R A T E G Y northern conditions.