ANNUAL
REPORT
2023
We are made for demanding conditions.
THIS COMPANY IS LIKE ITS PRODUCT; IT REFLECTS
THE PASSION AND RESILIENCE OF OUR PEOPLE.
WE ARE NOKIAN TYRES AND HERE TO MAKE
THE WORLD SAFER BY REINVENTING TIRES, AND
HOW THEY ARE MADE, OVER AND OVER AGAIN.
Strategy Review 4
Report by the Board of Directors 16
Financial Statements 36
Consolidated financial statements 37
Parent company financial statements 87
Signatures of the Board of Directors and the auditor’s note 98
Auditor’s report 99
ESEF assurance report 103
Information on Nokian Tyres’ share 104
Nokian Tyres Group structure 105
Corporate Governance Statement 106
Non-Financial Information Statement 122
Remuneration Report 140
Investor Information and Investor Relations 149
In addition to this Annual Report, Nokian Tyres will publish its 2023
Sustainability Report at the end of March 2024.
STRATEGY
REVIEW
MADE FOR DEMANDING CONDITIONS
• 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.
This is
Nokian Tyres
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
NET SALES IN 2023
1.2
EUR BILLION
Net sales
Segments operating profit
Segments operating profit, %
Net sales and Segments operating profit
EUR million %
2,000
1,500
1,000
500
0
40
30
20
10
0
2019 2020 2021 2022 2023
1,585.4
1,313.8
1,714.1
1,350.5
1,173.6
337.2
190.2
324.8
65.1
17.8
Figures for 2021 and earlier years have not been
restated and include Russia.
Net sales by geographical area, %
Nordic countries 57% (54)
Other Europe 19% (22)
Americas 23% (23)
Other countries 1% (1)
Net sales from external customers by business unit, %
Passenger Car Tyres 52% (67)
Heavy Tyres 19% (13)
Vianor 29% (20)
Employees by geographical area, %
Nordics 78% (80)
Other Europe 6% (6)
North America 16% (14)
5
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
The world’s first zero CO
2
tire factory
Nokian Tyres broke ground for its new passenger car tire factory
in Oradea, Romania. The factory is the world’s first zero CO
2
emission tire factory.
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.
Highlights
in 2023
Emission reduction target reached
In 2023, Nokian Tyres reached a key science-based emissions
reduction target seven years ahead of schedule.
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.
Sale of the Russian operations
Nokian Tyres completed the sale of its Russian operations, after
which all Nokian Tyres operations in Russia ended.
52%
The target was
to decrease
the tire
factories’ CO
2
emissions
intensity by
800
600
400
200
0
158
710
341
Direct CO
2
emissions from the tire factories
(Scope 1 and 2), per production ton
2015 2023 Target
2030
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.
6
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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
CO
2
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.
A year of
transformation
OUR PURPOSE
WE MAKE
THE WORLD SAFER
BY REINVENTING
TIRES, AND HOW
THEY ARE MADE,
OVER AND OVER
AGAIN.
7
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Accelerating growth
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 CO
2
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.
Made for demanding conditions
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
OUR VISION
WE LEAD THE WORLD
TO DRIVE SMARTER.
8
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
A market of
600 million tires
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.”
MADE FOR DEMANDING CONDITIONS:
JOHANNA HORSMA
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.
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.”
9
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
Megatrends
are shaping the
tire industry
1. Digitalization and connectivity
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.
2. Electrification
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
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.
4. Environment
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.
10
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 CO
2
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.
• Increasing capacity in the Finnish and the US factories
• New factory in Romania
• Utilizing contract manufacturing
Increasing market penetration built on:
• New products
• Increased production capacity
• Enhanced operational capabilities
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.
Back to growth
VIANOR
INVESTMENT PHASE
HENKILÖAUTON RENKAAT
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.
• 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.
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.
2023–2025
2026–2027
The target is
net sales of
GROWTH PHASE
EUR 2
BILLION
RASKAAT RENKAAT
VIANOR
PASSENGER CAR TYRES
HEAVY TYRES
11
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
• 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.
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 CO
2
emission tire factory in Oradea, Romania. This means
that all the energy used at the factory comes from zero
CO
2
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 CO
2
energy production.
* In 2027, once the factory in Romania has reached its maximum capacity.
DAYTON, US NOKIA, FINLAND ORADEA, ROMANIA
12
Strategy Review Governance Non-Financial Information RemunerationFinancial StatementsReport by the Board of Directors
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 CO
2
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.
Step by
step towards
the targets
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.
OUR SUCCESS
IS BUILT ON
FIVE STRATEGIC
CORNERSTONES.
13
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 CO
2
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.
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 CO
2
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.”
MADE FOR DEMANDING CONDITIONS:
GABRIELA PONTOS
Recruiting for
Romania
“Zero CO
2
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.”
NOKIAN TYRES
DEVELOPED THE
WORLD’S FIRST
WINTER TIRE
IN 1934.
14
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
MADE FOR DEMANDING CONDITIONS:
MATTI MORRI
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
THE ENTIRE NOKIAN TYRES®
PRODUCT PORTFOLIO SUITS
BOTH COMBUSTION ENGINE
CARS AND ELECTRIC CARS.
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.
15
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
REPORT BY
THE BOARD OF
DIRECTORS
MADE FOR DEMANDING CONDITIONS
17
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 CO
2
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 CO
2
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.
Report by the
Board of Directors
Segments net sales by geographical area
2022 Change
CC*
Change
% of total
net sales
in 2023
% of total
net sales
in 2022EUR million 2023
Nordics 671.7 722.3 -7.0% -0.3% 57.2% 53.5%
Other Europe 226.0 302.8 -25.4% -26.1% 19.3% 22.4%
Americas 268.7 314.6 -14.6% -12.8% 22.9% 23.3%
Other countries 7.2 10.6 -32.3% -32.3% 0.6% 0.8%
Total 1,173.6 1,350.5 -13.1% -9.2% 100.0% 100.0%
Segments net sales by business unit
2022 Change
CC*
Change
% of total
net sales
in 2023**
% of total
net sales
in 2022**EUR million 2023
Passenger Car Tyres 653.4 810.7 -19.4% -15.8% 55.7% 60.0%
Heavy Tyres 257.1 271.0 -5.1% -3.4% 21.9% 20.1%
Vianor 344.0 362.0 -5.0% 1.8% 29.3% 26.8%
Other operations and eliminations -80.9 -93.2 13.2%
Total 1,173.6 1,350.5 -13.1% -9.2%
* Comparable currencies
** Includes internal sales
18
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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).
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%).
Net sales
Segments operating profit
Segments operating profit, %
Net sales and Segments operating profit
EUR million %
2,000
1,500
1,000
500
0
40
30
20
10
0
2019 2020 2021 2022 2023
1,585.4
1,313.8
1,714.1
1,350.5
1,173.6
337.2
190.2
324.8
65.1
17.8
Segments ROCE, %
25
20
15
10
5
0
18.6
9.3
15.8
4.0
0.9
2019 2020 2021 2022 2023
Segments operating profit by business unit
EUR million 2023 2022
Passenger Car Tyres 36.7 -24.7
Heavy Tyres 32.8 44.1
Vianor 3.4 3.1
Other operations and eliminations -7.8 -4.6
Segments operating profit total 65.1 17.8
Non-IFRS exclusions -33.0 38.9
19
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Financial position
EUR million Dec 31, 2023 Dec 31, 2022
Cash and cash equivalents 414.9 259.0
Interest-bearing liabilities 638.5 399.9
of which current interest-bearing
liabilities 142.9 198.8
Interest-bearing net debt 223.6 140.9
Unused credit limits 831.1 799.3
of which committed 330.3 305.4
Gearing, % 16.6% 9.8%
Equity ratio, % 58.0% 64.9%
Investments
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 CO
2
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
300
250
200
150
100
50
0
290.1
149.9
119.6
252.1
129.7
2019 2020 2021 2022 2023
Gearing on Dec 31, %
2.3
-1.1
-6.1
9.8
16.6
20
10
0
-10
2019 2020 2021 2022 2023
Equity ratio on Dec 31, %
80
60
40
20
0
75.9
65.3
68.4
58.0
64.9
2019 2020 2021 2022 2023
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
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Research and development
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.
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.
Personnel
2023 2022 2021
Group employees
on average 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 558 458 391
Vianor (own) employees, at the end of
the review period** 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
5,000
4,000
3,000
2,000
1,000
500
0
4,995
4,859
4,941
3,754
3,517
2019 2020 2021 2022 2023
R&D expenses, EUR million
32
24
16
8
0
22.7 22.7
31.9
24.3
29.6
2019 2020 2021 2022 2023
21
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 CO
2
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.
Heavy Tyres
EUR million 2023 2022
Net sales 257.1 271.0
Net sales change, % -5.1%
Net sales change in comparable currencies, % -3.4%
Operating profit 32.8 39.5
Operating profit, % 12.8% 14.6%
Segment operating profit 32.8 44.1
Segment operating profit, % 12.8% 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.
Business unit reviews
Passenger Car Tyres
EUR million 2023 2022
Net sales 653.4 810.7
Net sales change, % -19.4%
Net sales change in comparable currencies, % -15.8%
Operating profit 4.1 23.3
Operating profit, % 0.6% 2.9%
Segment operating profit 36.7 -24.7
Segment operating profit, % 5.6% -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.
Net sales
Segment operating profit
Segment operating profit, %
Passenger Car Tyres, Net sales and Segment operating profit
EUR million
%
1,200
1,000
800
600
400
200
0
-200
30
25
20
15
10
5
0
-5
1,123.8
871.3
1,199.2
810.7
653.4
2019 2020 2021 2022 2023
308.5
177.8
-24.7
36.7
298.7
22
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Vianor, own operations
EUR million 2023 2022
Net sales 344.0 362.0
Net sales change, % -5.0%
Net sales change in comparable currencies, % 1.8%
Operating profit 3.4 2.8
Operating profit, % 1.0% 0.8%
Segment operating profit 3.4 3.1
Segment operating profit, % 1.0% 0.9%
Number of own service centers at period end 174 173
Net sales
Segment operating profit
Segment operating profit, %
Vianor, Net sales and Segment operating profit
EUR million %
400
300
200
100
0
4
3
2
1
0
2019 2020 2021 2022 2023
336.5
318.1
342.9
362.0
344.0
7.7
4.0
4.1
3.4
3.1
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.
Net sales
Segment operating profit
Segment operating profit, %
Heavy Tyres, Net sales and Segment operating profit
EUR million %
300
250
200
150
100
50
0
30
25
20
15
10
5
0
2019 2020 2021 2022 2023
202.7
194.6
254.0
271.0
257.1
35.7
23.7
40.3
44.1
32.8
23
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
Shares and shareholders
At the end of December 2023, the number of shares was 138,921,750.
Number of shares (million units)*
Dec 31,
2023*
Dec 31,
2022*
at the end of period 137.87 138.25
in average 137.9 8 138.25
in average, diluted 137.9 8 138.25
* Excluding treasury shares
Authorizations
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.
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.
EUR million Net sales
Cost of
sales SGA
Other
operating
income/
expenses
Operating
profit
Financial
income/
expenses Taxes
Result from
continuing
operations
Result from
discontinued
operations
Result
for the
period
Segments Total 1,173.6 -904.6 -208.7 4.8 65.1 -17.8 -9.7 37.7 0.0 37.7
Profit from sale 30.5 30.5
Translation difference -366.3 -366.3
US factory ramp-up -27.9 -2.3 -30.2 7. 2 -23.0 -23.0
Romanian factory preparations -3.2 -3.2 0.6 -2.6 -2.6
Non-operative items and others 0.4 0.4 0.4 -2.2 -1.8
Total non-IFRS exclusion 0.0 -27.9 -5.5 0.4 -33.0 0.0 7.8 -25.2 -2.2 -27.4
Nokian Tyres Total 1,173.6 -932.5 -214.2 5.1 32.1 -17.8 -1.7 12.5 -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/.
24
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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)
Number of
shares
% of share
capital
1. Solidium Oy 14,031,000 10.10
2. Varma Mutual Pension Insurance
Company 4,238,192 3.05
3. Ilmarinen Mutual Pension Insurance
Company 2,626,395 1.89
4. Elo Mutual Pension Insurance Company 2,028,000 1.46
5. Nordea Nordic Small Cap Fund 1,084,160 0.78
6. Nordea Finland Fund 1,079,413 0.78
7. The State Pension Fund 900,000 0.65
8. OP-Finland 610,000 0.44
9. Barry Staines Linoleum Ltd. 480,000 0.35
10. OP-Henkivakuutus Ltd. 479,864 0.35
25
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Changes in ownership
Transaction date Shareholder Threshold
% of shares and
voting rights
% of shares and
voting rights
through financial
instruments Total, %
January 3, 2023 BlackRock, Inc Below 5% Below 5% Below 5% Below 5%
January 4, 2023 Norges Bank Above 5% 4.99% 0.06% 5.05%
January 5, 2023 BlackRock, Inc Above 5% 4.93% 0.21% 5.15%
January 9, 2023 Norges Bank Below 5% 4.99% 0.00% 4.99%
January 10, 2023 BlackRock, Inc Above 5% 5.04% 0.20% 5.24%
January 10, 2023 Société Générale SA Above 5% 0.38% 5.40% 5.78%
January 11, 2023 BlackRock, Inc Below 5% 4.78% 0.24% 5.02%
January 12, 2023 BlackRock, Inc Below 5% Below 5% Below 5% Below 5%
January 12, 2023 Norges Bank Above 5% 5.05% 0.00% 5.05%
January 16, 2023 BlackRock, Inc Above 5% 4.67% 0.61% 5.29%
January 17, 2023 Norges Bank Below 5% 4.90% 0.00% 4.90%
January 18, 2023 Norges Bank Above 5% 5.20% 0.00% 5.20%
January 18, 2023 BlackRock, Inc Above 5% 5.11% 0.60% 5.71%
January 18, 2023 Société Générale SA Below 5% 0.16% 4.78% 4.94%
January 24, 2023 Société Générale SA Above 5% 0.56% 4.54% 5.10%
February 1, 2023 BlackRock, Inc Below 5% 4.61% 0.42% 5.04%
February 2, 2023 BlackRock, Inc Below 5% Below 5% Below 5% Below 5%
February 3, 2023 BlackRock, Inc Above 5% 4.80% 0.49% 5.29%
February 7, 2023 Société Générale SA Below 5% 0.10% 3.78% 3.88%
February 8, 2023 BlackRock, Inc Above 5% 5.90% 0.29% 6.19%
February 9, 2023 BlackRock, Inc Below 5% 3.76% 1.57% 5.33%
February 13, 2023 Norges Bank Below 5% 4.88% 0.13% 5.01%
February 14, 2023 BlackRock, Inc Below 5% Below 5% Below 5% Below 5%
February 14, 2023 JPMorgan Chase & Co. Above 5% 3.47% 1.61% 5.08%
February 14, 2023 Norges Bank Below 5% 4.28% 0.13% 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%
Transaction date Shareholder Threshold
% of shares and
voting rights
% of shares and
voting rights
through financial
instruments Total, %
February 17, 2023 BlackRock, Inc Below 5% Below 5% Below 5% Below 5%
February 21, 2023 BlackRock, Inc Above 5% 4.66% 0.44% 5.11%
March 3, 2023 Société Générale SA Above 5% 0.25% 5.18% 5.43%
March 9, 2023 JPMorgan Chase & Co. Above 5% 3.77% 1.30% 5.07%
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% 0.04% 6.36% 6.40%
March 14, 2023 JPMorgan Chase & Co. Above 5% 3.50% 2.07% 5.57%
March 15, 2023 JPMorgan Chase & Co. Below 5% Below 5% Below 5% Below 5%
March 17, 2023 BlackRock, Inc Below 5% Below 5% Below 5% Below 5%
March 17, 2023
The Goldman Sachs
Group Above 5% 2.59% 3.27% 5.86%
March 20, 2023
Bank of America
Corporation Above 5% 2.576416% 2.734651% 5.311067%
March 20, 2023
The Goldman Sachs
Group Below 5% 2.26% 0.96% 3.22%
March 21, 2023
Bank of America
Corporation Below 5% 2.517747% 1.657154% 4.174901%
July 6, 2023 Société Générale SA Below 5% 0.08% 4.41% 4.49%
July 11, 2023 Société Générale SA Above 5% 0.08% 5.24% 5.32%
July 12, 2023 Société Générale SA Below 5% 0.04% 4.64% 4.68%
Detailed information on notifications of change in shareholding can be found at
www.nokiantyres.com/company/investors/share/flagging-notifications/.
26
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Shares owned by the Board members and legal entities controlled
by them on December 31, 2023
Board of Directors Number of shares
Jukka Hienonen, Chair 25,808*
Pekka Vauramo, Deputy Chair 9,096
Susanne Hahn, member 4,028
Markus Korsten, member 2,386
Veronica Lindholm, member 10,004
Christopher Ostrander, member 4,660
Jouko Pölönen, member 23,690
George Rietbergen, member 7,614
Reima Rytsölä 2,386**
Total 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 Number of shares
Jukka Moisio 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.
Shares owned by the Management Team members and legal
entities controlled by them on December 31, 2023
Management Team Number of shares
Päivi Antola, Communications,
Investor Relations and Brand 5,799
Niko Haavisto, Finance 11,250
Anna Hyvönen, Passenger Car Tyres and Vianor 22,010
Adrian Kaczmarczyk, Supply Operations 3,420
Jukka Kasi, Products and Innovations 40,367
Päivi Leskinen, Human Resources 0
Manu Salmi, Heavy Tyres and Nokia Factory 30,457
Total 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
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
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
2019 2020 2021 2022 2023
3.06*
1.04
1.84
-0.86
-2.16
0.55**
27
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
28
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 CO
2
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’ CO
2
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.
29
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 CO
2
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.
30
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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
31
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
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
32
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
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 CO
2
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 Commissions 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 0.55 EUR/share
be paid out, totaling EUR 75.8 million
retained in equity EUR 783.6 million
Total 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 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
33
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Figures in EUR million unless otherwise indicated
2023
2022 2021 2020 2019 2018 2017 2016 2015 2014
Net sales 1,173.6 1,350.5* 1,714.1 1,313.8 1,595.8 1,595.6 1,572.5 1,391.2 1,360.1 1,389.1
change, % -13.1% -21.2%* 30.5% -17.1% 0.0% 1.5% 13.0% 2.3% -2.1% -8.7%
Operating margin (EBITDA)
1
147.0 170.2* 425.6 275.9 441.7 465.8 463.7 395.2 378.6 398.5
Depreciation and amortization 114.9 110.1* 140.5 131.0 125.2 93.4 98.3 84.7 82.6 89.8
Impairments
2
0.0 3.4* 17.0 24.9
Operating profit (EBIT) 32.1 56.7* 268.2 120.0 316.5 372.4 365.4 310.5 296.0 308.7
% of net sales 2.7% 4.2%* 15.6% 9.1% 19.8% 23.3% 23.2% 22.3% 21.8% 22.2%
Profit before tax 14.2 11.2* 258.2 106.0 336.7 361.7 332.4 298.7 274.2 261.2
% of net sales 1.2% 0.0* 15.1% 8.1% 21.1% 22.7% 21.1% 21.5% 20.2% 18.8%
Return on equity, % -23.4% -11.5%* 13.1% 5.2% 24.6% 20.0% 15.1% 18.7% 19.6% 16.0%
Return on capital employed, % 2.2% 3.1% 13.7% 6.0% 17.6% 23.3% 22.4% 19.9% 20.3% 19.2%
Total assets 2,325.2 2,209.7 2,383.5 2,336.7 2,332.6 2,092.9 1,877.4 1,975.7 1,754.8 1,797.0
Interest-bearing net debt 223.6 140.9 -98.7 -17.2 41.1 -315.2 -208.3 -287.4 -209.7 -164.6
Equity ratio, % 58.0% 64.9% 68.4% 65.3% 75.9% 71.0% 78.2% 73.8% 70.8% 67.5%
Gearing, % 16.6% 9.8% -6.1% -1.1% 2.3% -21.2% -14.2% -19.7% -16.9% -13.6%
Net cash from operating activities 82.4 -4.3 396.5 422.4 219.8 536.9 234.6 364.4 283.4 323.4
Capital expenditure 252.1 129.7 119.6 149.9 290.1 226.5 134.9 105.6 101.7 80.6
% of net sales 21.5% 9.6% 7.0% 11.4% 18.3% 14.2% 8.6% 7.6% 7.5% 5.8%
R&D expenditure 24.3 29.6 31.9 22.7 22.7 20.8 21.8 20.3 18.7 16.6
% of net sales 2.1% 2.2% 1.9% 1.7% 1.3% 1.3% 1.4% 1.5% 1.4% 1.2%
Dividends
75.8
3
76.0 76.0 165.9 158.4 218.1 214.2 208.0 202.0 193.5
Personnel, average during the year 3,754 3,517* 4,941 4,859 4,995 4,790 4,630 4,433 4,421 4,272
* 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
Consolidated key financial indicators
34
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
2023
2022 2021 2020 2019 2018 2017 2016 2015 2014
Earnings per share, EUR -2.36 -1.27 1.49 0.62 2.89 2.15 1.63 1.87 1.80 1.56
change, % 85.8% -185.1% 140.2% -78.5% 78.1% 32.4% -13.0% 3.6% 15.1% 12.9%
Earnings per share (diluted), EUR -2.36 -1.27 1.49 0.62 2.89 2.14 1.61 1.86 1.80 1.56
change, % 85.8% -185.1% 140.2% -78.5% 35.2% 32.5% -13.2% 3.2% 15.0% 12.9%
Earnings per share continuing operations, EUR 0.09 0.11
change, % -17.9% 0.0%
Earnings per share discontinued operations, EUR -2.45 -1.38
change, % 77.5% 0.00
Cash flow per share, EUR 0.60 -0.03 2.87 3.05 3.89 3.91 1.72 2.70 2.12 2.43
change, % -2,020.0% -101.1% -6.0% -21.5% -0.7% 127.2% -36.3% 27.4% -12.7% 1.4%
Dividend per share, EUR 0.55
3
0.55 0.55 1.20 1.14 1.58 1.56 1.53 1.50 1.45
Dividend payout ratio, %
-23.3%
3
-43.3% 88.5% 192.9% 39.5% 73.9% 96.7% 82.6% 83.9% 92.9%
Equity per share, EUR 9.77 10.37 11.78 11.01 12.76 10.79 10.74 10.75 9.24 9.07
P/E ratio -3.5 -7.5 22.3 46.4 8.9 12.5 23.3 19.0 18.4 13.0
Dividend yield, %
6.7%
3
5.7% 4.0% 4.2% 4.5% 5.9% 4.1% 4.3% 4.5% 7.1%
Market capitalization Dec 31 1,147.5 1,330.9 4,626.1 4,003.7 3,560.6 3,702.9 5,188.7 4,814.0 4,458.3 2,708.1
Number of shares during the year, average, million units 137.98 138.25 138.22 138.46 138.17 137.26 136.25 134.86 133.63 133.16
diluted, million units 1 37.98 138.25 138.22 138.46 138.38 138.14 137.28 135.56 133.74 135.10
Number of shares Dec 31, million units 137.87 138.25 138.22 138.22 138.72 137.79 136.75 135.68 134.39 133.17
Number of shares entitled to a dividend, million units 137.87 138.25 138.22 138.22 138.92 138.07 137.28 135.93 134.69 133.47
Per share data
35
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Consolidated key financial indicators
Definitions
Return on equity, % =
Profit for the period x 100
Total equity (average)
Return on capital
employed, % =
Profit before tax + interest and other financial expenses x 100
Total assets (average) - non-interest-bearing debt
Equity ratio, % =
Total equity x 100
Total assets - advances received
Gearing, % =
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 shares
1
during the year
Earnings per share (diluted
2
), EUR =
Profit for the period attributable to the equity holders of the parent
Average adjusted and diluted
2
number
1
of shares during the year
Cash flow per share, EUR =
Cash flow from operations
Average adjusted number of shares
1
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 shares
1
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
FINANCIAL
STATEMENTS
MADE FOR DEMANDING CONDITIONS
This report is a translation.
The original Finnish is the authoritative version.
37
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Consolidated income statement, IFRS
EUR million | Note | 2023 | 2022* |
Net sales | 1 | ||
Cost of sales | 3, 7, 8 | - | - |
Gross profit | |||
Other operating income | 4 | ||
Selling, marketing and R&D expenses | 7, 8 | - | - |
Administration expenses | 6, 7, 8 | - | - |
Other operating expenses | 5, 7, 8 | - | |
Operating profit | |||
Financial income | 9 | ||
Financial expenses | 10 | - | - |
Result before tax | |||
Tax expense | 11 | - | |
Result for the period, continuing operations | |||
Result for the period, discontinued operations | 2 | - | - |
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: | 12 | ||
Basic, euros | - | - | |
Diluted, euros | - | - | |
Continuing operations, euros | |||
Discontinuing operations, euros | - | - |
EUR million | Note | 2023 | 2022* | |
| Consolidated statement of comprehensive income | ||||
Result for the period | - | - | ||
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 | 11 | |||
Cash flow hedges | 11 | - | ||
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 | - | - | ||
| * The result of discontinued operations for comparative year 2022 is restated. |
38
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Consolidated statement of financial position, IFRS
EUR million | Note | 2023 | 2022 |
| Assets | |||
| Non-current assets | |||
Property, plant and equipment | 13 | ||
Right of use assets | 15 | ||
Goodwill | 14 | ||
Other intangible assets | 14 | ||
Investments in associates | 17 | ||
Non-current financial investments | 17 | ||
Other receivables | 16, 18 | ||
Deferred tax assets | 19 | ||
| Current assets | |||
Inventories | 20 | ||
Trade and other receivables | 21, 29 | ||
Current tax assets | |||
Cash and cash equivalents | 22 | ||
Total assets | 1 |
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.
UR 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 | |||
Total equity | |||
| Liabilities | |||
| Non-current liabilities | |||
Deferred tax liabilities | 19 | ||
Interest-bearing liabilities | 27, 29 | ||
Other liabilities | |||
| Current liabilities | |||
Trade and other payables | 28 | ||
Current tax liabilities | |||
Provisions | 26 | ||
Interest-bearing liabilities | 27, 29 | ||
Total liabilities | 1 | ||
Total equity and liabilities |
39
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Consolidated statement of cash flows, IFRS
EUR million | Note | 2023 | 2022 |
Result for the period | |||
Result for the discontinued operations | - | - | |
Adjustments for Loss on sale of discontinued operations | |||
Depreciation, amortization and impairment | 7 | ||
Financial income and expenses | 9, 10 | ||
Gains and losses on sale of intangible assets, other changes | |||
Income taxes | 11 | ||
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) | - |
EUR million | Note | 2023 | 2022 |
| Cash flows from investing activities | |||
Cashflow from discontinued operations | |||
Acquisitions of property, plant and equipment and intangible assets | 13, 14 | - | - |
Proceeds from sale of property, plant and equipment and intangible assets | |||
Acquisitions of Group companies | 2 | - | |
Other cash flow from investing activities | |||
Cash flows from investing activities (B) | - | - | |
| Cash flow from financing activities: | |||
Purchase of treasury shares | 23 | ||
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) | |||
Change in cash and cash equivalents, increase (+) / decrease (-) (A+B+C) | - | ||
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 |
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.
40
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Consolidated statement of changes in equity, IFRS
Equity attributable to equity holders of the parent
| Fair value | Paid-up | ||||||||
| and | unrestricted | ||||||||
| Share | Share | Treasury | Translation | hedging | equity | Retained | Total | ||
EUR million | Note | capital | premium | shares | reserve | reserves | reserve | earnings | equity |
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 | 23 | - | - | ||||||
Acquisition of treasury shares | |||||||||
Share-based payments | 24 | - | - | ||||||
Other changes | 19 | ||||||||
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 | 23 | - | - | ||||||
Acquisition of treasury shares | - | - | |||||||
Share-based payments | 24 | - | - | ||||||
Other changes | - | - | |||||||
Total transactions with owners for the period | - | - | - | ||||||
Equity, Dec 31, 2023 | - | - |
41
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Accounting policies for the consolidated
financial statements
• 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.
42
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
43
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
44
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Notes to the consolidated financial statements
1. Net sales and operating segments
45
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Operating segments
| Other | |||||
| 2023 | Passenger | operations and | |||
| EUR million | Car Tyres | Heavy Tyres | Vianor | eliminations | Group |
Net sales from external customers | 602.7 | 223.0 | 343.2 | 4.8 | 1,173.6 |
Services | 83.6 | 83.6 | |||
Sales of goods | 602.7 | 223.0 | 259.6 | 4.8 | 1,090.1 |
Inter-segment net sales | 50.7 | 34.2 | 0.8 | -85.7 | |
Net sales | 653.4 | 257.1 | 344.0 | -80.9 | 1,173.6 |
Operating result | 4.1 | 32.8 | 3.4 | -8.2 | 32.1 |
% of net sales | 0.6% | 12.8% | 1.0% | 10.2% | 2.7% |
Financial income and expenses | -17.8 | ||||
Profit before tax | 14.2 | ||||
Tax expense | -1.7 | ||||
Profit for the period | 12.5 | ||||
Assets | 1,364.9 | 206.3 | 217.4 | 34.2 | 1,822.8 |
Unallocated assets | 502.4 | ||||
Total assets | 2,325.2 | ||||
Liabilities | 200.0 | 49.6 | 44.2 | 7.0 | 300.9 |
Unallocated liabilities | 676.8 | ||||
Total liabilities | 977.6 | ||||
Capital expenditure | 226.8 | 8.8 | 7.7 | 8.8 | 252.1 |
Depreciation and amortization | 73.5 | 11.3 | 25.6 | 4.5 | 114.9 |
Impairment | - | - | - | - | - |
Other non-cash expenses | -1.0 | 2.5 | 0.7 | -0.3 | 1.9 |
46
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| Other | |||||
| 2022* | Passenger | operations and | |||
| EUR million | Car Tyres | Heavy Tyres | Vianor | eliminations | Group |
Net sales from external customers | 746.7 | 233.2 | 361.1 | 9.5 | 1,350.5 |
Services | 93.3 | 93.3 | |||
Sales of goods | 746.7 | 233.2 | 267.8 | 9.5 | 1,257.2 |
Inter-segment net sales | 64.0 | 37.8 | 0.9 | -102.7 | |
Net sales | 810.7 | 271.0 | 362.0 | -93.2 | 1,350.5 |
Operating result | 23.3 | 39.5 | 2.8 | -9.0 | 56.7 |
% of net sales | 2.9% | 14.6% | 0.8% | 9.7% | 4.2% |
Financial income and expenses | -45.5 | ||||
Profit before tax | 11.2 | ||||
Tax expense | 4.1 | ||||
Profit for the period | 15.2 | ||||
Assets | 1,439.4 | 194.2 | 215.5 | 34.3 | 1,883.4 |
Unallocated assets | 326.3 | ||||
Total assets | 2,209.7 | ||||
Liabilities | 245.9 | 54.3 | 48.2 | 4.0 | 352.4 |
Unallocated liabilities | 424.2 | ||||
Total liabilities | 776.6 | ||||
Capital expenditure | 105.6 | 7.0 | 7.5 | 9.9 | 129.9 |
Depreciation and amortization | 65.2 | 13.3 | 27.5 | 4.2 | 110.1 |
Impairment | 0.6 | 0.2 | 0.0 | 2.5 | 3.4 |
Other non-cash expenses | 7.6 | 1.3 | 0.8 | 2.3 | 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.
47
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 | Nordics | Other Europe | Americas | Other countries | Other | Group |
Net sales | 671.7 | 226.0 | 268.7 | 7.2 | - | 1,173.6 |
Services | 83.6 | - | - | - | - | 83.6 |
Sales of goods | 588.2 | 226.0 | 268.7 | 7.2 | - | 1,090.1 |
Assets | 993.3 | 277.5 | 561.2 | 0.3 | -9.4 | 1,822.8 |
Unallocated assets | 502.4 | |||||
Total assets | 2,325.2 | |||||
Capital expenditure | 79.9 | 104.9 | 67. 2 | - | - | 252.1 |
| 2022* | ||||||
EUR million | Nordics | Other Europe | Americas | Other countries | Other | Group |
Net sales | 722.3 | 302.8 | 314.6 | 10.6 | - | 1,350.5 |
Services | 93.3 | - | - | - | - | 93.3 |
Sales of goods | 629.0 | 302.8 | 314.6 | 10.6 | - | 1,257.2 |
Assets | 962.8 | 161.5 | 507.2 | 268.5 | -16.6 | 1,883.4 |
Unallocated assets | 326.3 | |||||
Total assets | 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.
48
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
2. Acquisitions and disposals
| 1–3 | 4–6 | 7–9 | 10–12 | 1–12 | 1–3 | 4–6 | 7–9 | 10–12 | 1–12 | |
| EUR million | 2023 | 2023 | 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | 2022 | 2022 |
Net sales | 13.5 | - | - | - | 13.5 | 93.5 | 149.8 | 132.7 | 49.6 | 425.6 |
Operating expenses | -16.4 | - | - | - | -16.4 | -56.4 | -400.0 | -83.4 | -59.9 | -599.7 |
Operating profit | -2.9 | - | - | - | -2.9 | 37.1 | -250.2 | 49.3 | -10.3 | -174.1 |
Net financial items | -0.5 | - | - | - | -0.5 | 0.9 | 19.4 | -3.6 | -1.6 | 15.2 |
Result before tax, discontinued operations | -3.4 | - | - | - | -3.4 | 38.1 | -230.8 | 45.7 | -11.8 | -158.8 |
Tax expense | 1.2 | - | - | - | 1.2 | -6.1 | -29.7 | -10.6 | 13.9 | -32.5 |
Result for the year, discontinued operations | -2.2 | - | - | - | -2.2 | 31.9 | -260.5 | 35.1 | 2.1 | -191.3 |
Profit from sale | 29.6 | 1.0 | 0.0 | -0.1 | 30.5 | - | - | - | - | - |
Loss from sale – translation differences | -366.3 | - | - | - | -366.3 | - | - | - | - | - |
Result for the period, discontinued operations | -338.9 | 1.0 | 0.0 | -0.1 | -338.0 | 31.9 | -260.5 | 35.1 | 2.1 | -191.3 |
| Earnings per share from the result attributable | 1–3 | 4–6 | 7–9 | 10–12 | 1–12 | 1–3 | 4–6 | 7–9 | 10–12 | 1–12 |
| to the equity holders of the parent: | 2023 | 2023 | 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | 2022 | 2022 |
Basic, euros | -2.59 | 0.01 | 0.03 | 0.19 | -2.36 | 0.34 | 1.67 | 0.18 | -0.11 | -1.27 |
Diluted, euros | -2.59 | 0.01 | 0.03 | 0.19 | -2.36 | 0.34 | 1.67 | 0.18 | -0.11 | -1.27 |
Continuing operations, euros | -0.14 | 0.01 | 0.03 | 0.19 | 0.09 | 0.11 | 0.21 | -0.08 | -0.13 | 0.11 |
Discontinuing operations, euros | -2.45 | 0.01 | 0.00 | 0.00 | -2.45 | 0.23 | -1.88 | 0.25 | 0.01 | -1.38 |
49
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | 2023 |
Sale price | 288.0 |
Profit from sale – Parent company and Nokian Tyres Holding Oy | 124.2 |
Non-current assets | 42.3 |
Current assets | 284.1 |
Total assets | 326.4 |
Non-current liabilities | 4.7 |
Current liabilities | 52.1 |
Total liabilities | 56.8 |
Disposed net assets | 269.6 |
Other group items and transactions costs | 12.1 |
Remaining intercompany items | 0.0 |
Profit from sale | 30.5 |
EUR million | 2022 |
| Purchase consideration | |
Consideration paid in cash | 4.6 |
Contingent consideration liability | - |
Total consideration | 4.6 |
EUR million | Note | 2022 |
Property, plant and equipment | 13 | 4.6 |
Trade and other receivables | 0.1 | |
Cash and cash equivalents | 0.1 | |
Total assets | 4.8 | |
Trade and other payables | 0.2 | |
Total liabilities | 0.2 | |
Total net assets | 4.6 | |
Consideration transferred | 4.6 | |
Acquired identifiable net assets | 4.6 | |
Consideration paid in cash | 4.6 | |
| Cash and cash equivalents in the subsidiaries | ||
acquired | 0.1 | |
Net cash outflow | 4.5 |
EUR million | 2023 | 2022 |
Raw materials | 294.5 | 400.9 |
Goods purchased for resale | 274.2 | 247.9 |
Wages and social security contributions on goods sold | 71.6 | 63.2 |
Other costs | 179.0 | 198.0 |
Depreciation of production | 71.4 | 69.0 |
Sales freights | 68.4 | 115.0 |
Warehousing | 60.8 | 50.0 |
Change in inventories | -87.3 | -95.9 |
Total | 932.5 | 1,048.1 |
4. Other operating income
EUR million | 2023 | 2022 |
| Gains on sale of property, plant and | ||
equipment | 0.2 | 1.3 |
Other income | 3.5 | -0.4 |
Total | 3.7 | 0.9 |
50
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
5. Other operating expenses
EUR million | 2023 | 2022 |
| Losses on sale and disposals of tangible | ||
fixed assets | 0.0 | 0.0 |
Expensed credit losses and provisions | -1.8 | 3.1 |
Other expenses | 0.3 | -1.8 |
Total | -1.4 | 1.3 |
EUR million | 2023 | 2022 |
Audit fee | 1.1 | 1.0 |
Tax services | 0.0 | 0.0 |
Other services | 0.0 | 0.1 |
Total | 1.1 | 1.1 |
7. Depreciation, amortization and impairment losses
51
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | 2023 | 2022 |
Intangible rights | 3.7 | 4.6 |
Other intangible assets | 1.0 | 1.1 |
Buildings | 7.5 | 7.7 |
Machinery and equipment | 59.3 | 52.7 |
Right of use asset | 41.4 | 41.3 |
Other tangible assets | 2.2 | 2.8 |
Total | 114.9 | 110.1 |
EUR million | 2023 | 2022 |
Other intangible assets | - | 0.0 |
Land property | - | 0.0 |
Buildings | - | 2.3 |
Goodwill | - | 0.0 |
Machinery and equipment | - | 1.1 |
Other tangible assets | - | 0.0 |
Total | - | 3.4 |
Depreciation and amortization by function
EUR million | 2023 | 2022 |
Production | 71.4 | 69.0 |
Selling, marketing and R&D | 32.8 | 30.3 |
Administration | 10.7 | 10.8 |
Total | 114.9 | 110.1 |
Impairment losses by function
EUR million | 2023 | 2022 |
Production | - | 0.2 |
Selling, marketing and R&D | - | - |
Administration | - | 3.2 |
Total | - | 3.4 |
EUR million | 2023 | 2022 |
Wages and salaries | 193.2 | 198.7 |
| Pension contributions – defined | ||
contribution plans | 22.5 | 21.9 |
Share-based payments | -4.7 | -4.6 |
Other social security contributions | 21.1 | 21.5 |
Total | 232.2 | 237.5 |
EUR million | 2023 | 2022 |
| Interest income | ||
Financial assets measured at amortized cost | 10.4 | 0.2 |
| Dividend income | ||
| Non-current financial investments measured | ||
at fair value through other comprehensive income | 0.0 | 0.0 |
Exchange rate gains and changes in fair value | ||
| Financial assets and liabilities at amortized | ||
cost | 31.0 | 133.8 |
Foreign currency derivatives | 26.7 | 106.7 |
Other financial income | 0.3 | 0.4 |
Total | 68.5 | 241.1 |
EUR million | 2023 | 2022 |
| Interest expenses | ||
| Financial liabilities measured at amortized | ||
cost | -21.1 | -2.7 |
Interest rate derivatives designated as hedges | 2.7 | -0.5 |
Lease liabilities | -4.0 | -4.0 |
Exchange rate losses and changes in fair value | ||
| Financial assets and liabilities at amortized | ||
cost | -38.6 | -142.2 |
Foreign currency derivatives | -22.8 | -132.6 |
Other financial expenses | -2.6 | -4.7 |
Total | -86.3 | -286.6 |
52
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
11. Tax expense
EUR million | 2023 | 2022 |
Current tax expense | -11.0 | -9.1 |
Adjustment for prior periods | -0.8 | -0.9 |
Change in deferred tax | 10.0 | 14.0 |
Total | -1.7 | 4.1 |
EUR million | 2023 | 2022 |
Withholding taxes | -0.2 | -6.2 |
Tax exempt revenues | 1 7.4 | 0.7 |
Non-deductible expenses | -13.9 | 0.6 |
| Losses on which no deferred tax benefits | ||
recognized | 0.0 | -1.1 |
Adjustment for prior periods | -0.8 | -0.9 |
| Change in the recoverability of deferred tax | ||
assets | - | -0.8 |
| Utilization of previously unrecognized tax | ||
losses | 0.0 | 0.3 |
Other items | -0.3 | 1.5 |
Tax expense | -1.7 | 4.1 |
Income tax relating to components of other
comprehensive income:
| 2023 | Before | Net of | |
| EUR million | tax amount | Tax benefit | tax amount |
Net investment hedge | - | - | - |
Cash flow hedges | -11.2 | 2.2 | -8.9 |
| Translation differences | |||
on foreign operations | 332.8 | 332.8 | |
321.6 | 2.2 | 323.9 | |
| 2022 | Before | Net of | |
| EUR million | tax amount | Tax benefit | tax amount |
Net investment hedge | 8.5 | -1.7 | 6.8 |
Cash flow hedges | 11.2 | -2.2 | 9.0 |
| Translation differences | |||
on foreign operations | 36.7 | 36.7 | |
56.4 | -3.9 | 52.4 | |
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 | 2023 | 2022 |
Profit before tax | 14.2 | 11.2 |
| Taxes calculated according to the Finnish | ||
tax rate of 20% | -2.8 | -2.2 |
| Effect of deviant tax rates in foreign | ||
subsidiaries | -1.1 | 12.1 |
53
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
12. Earnings per share
EUR million | 2023 | 2022 |
| Result attributable to the equity holders of | ||
the parent | -325.5 | -175.5 |
| Result for the period to calculate the diluted | ||
earnings per share | -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 | -2.36 | -1.27 |
Diluted | -2.36 | -1.27 |
Continuing operations | 0.09 | 0.11 |
Discontinued operations | -2.45 | -1.38 |
13. Property, plant and equipment
Accounting policies
54
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| Advances | ||||||
| Machinery | Other | and fixed | ||||
| 2023 | Land | and | tangible | assets under | ||
| EUR million | property | Buildings | equipment | assets | construction | Tot a l |
Accumulated cost, Jan 1, 2023 | 20.9 | 395.8 | 1,416.9 | 123.1 | 113.4 | 2,070.2 |
Increase | 14.0 | 0.1 | 12.7 | -4.4 | 231.8 | 254.3 |
Acquisitions through business combinations | ||||||
Decrease | -2.2 | -122.9 | -429.4 | -65.6 | -5.7 | -625.8 |
Transfers between items | -5.0 | 9.3 | 83.0 | 0.7 | -91.8 | -3.8 |
Other changes | 0.0 | -10.7 | -0.1 | 0.0 | -10.7 | |
Exchange differences | -0.1 | -8.3 | -22.7 | -2.3 | -3.3 | -36.7 |
Accumulated cost, Dec 31, 2023 | 27.6 | 274.1 | 1,049.9 | 51.4 | 244.5 | 1,647.5 |
Accum. depreciation, Jan 1, 2023 | -1.7 | -190.6 | -1,028.6 | -74.3 | -1,295.2 | |
Depreciation for the period | -7.5 | -59.1 | -2.2 | -68.8 | ||
Impairment | 1.6 | 0.0 | 0.0 | 0.0 | 1.6 | |
Decrease | 103.1 | 406.7 | 62.4 | 572.2 | ||
Other changes | 0.0 | 10.5 | 0.1 | 10.6 | ||
Exchange differences | 1.8 | 13.7 | 1.8 | 17.2 | ||
Accum. depreciation, Dec 31, 2023 | 0.0 | -93.2 | -656.9 | -12.2 | -762.3 | |
Carrying amount, Dec 31, 2023 | 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.
| Advances | ||||||
| Machinery | Other | and fixed | ||||
| 2022 | Land | and | tangible | assets under | ||
| EUR million | property | Buildings | equipment | assets | construction | Tot a l |
Accumulated cost, Jan 1, 2022 | 13.9 | 376.2 | 1,308.3 | 126.3 | 99.3 | 1,924.0 |
Increase | 6.0 | 0.2 | 40.5 | 1.0 | 75.8 | 123.5 |
Acquisitions through business combinations | 0.9 | 3.7 | 0.0 | - | 0.0 | 4.6 |
Decrease | 0.0 | -0.4 | -24.6 | -0.1 | -0.2 | -25.4 |
Transfers between items | 0.0 | 0.7 | 71.5 | -11.1 | -64.6 | -3.5 |
Other changes | 0.0 | -1.3 | -24.0 | 0.0 | 1.0 | -24.4 |
Exchange differences | 0.1 | 16.8 | 45.2 | 7.0 | 2.2 | 71.3 |
Accumulated cost, Dec 31, 2022 | 20.9 | 395.8 | 1,416.9 | 123.1 | 113.4 | 2,070.2 |
Accum. depreciation, Jan 1, 2022 | 0.0 | -109.7 | -890.6 | -52.8 | -1,053.1 | |
Depreciation for the period | -11.6 | -88.1 | -6.9 | -106.5 | ||
Impairment | -1.6 | -67.0 | -72.2 | -10.7 | -151.5 | |
Decrease | 0.3 | 21.6 | 0.1 | 22.1 | ||
Other changes | -0.2 | 22.9 | 0.0 | 22.7 | ||
Exchange differences | -2.5 | -22.4 | -4.0 | -28.8 | ||
Accum. depreciation, Dec 31, 2022 | -1.7 | -190.6 | -1,028.6 | -74.3 | -1,295.2 | |
Carrying amount, Dec 31, 2022 | 19.3 | 205.2 | 388.3 | 48.8 | 113.4 | 775.0 |
55
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
14. Intangible assets
| Other | ||||
| 2022 | Intangible | intangible | ||
EUR million | Goodwill | rights | assets | To t al |
Accumulated cost, Jan 1, 2022 | 79.7 | 90.4 | 39.9 | 210.1 |
Increase | 1.0 | 1.8 | 2.8 | |
Decrease | -4.1 | -0.3 | -4.3 | |
Transfers between items | 3.1 | 0.4 | 3.5 | |
Other changes | 0.3 | 0.0 | 1.3 | 1.6 |
Exchange differences | -2.0 | -0.1 | 1.1 | -1.0 |
Accumulated cost, Dec 31, 2022 | 78.0 | 90.4 | 44.3 | 212.7 |
Accum. depreciation, Jan 1, 2022 | -14.4 | -79.2 | -29.5 | -123.1 |
Depreciation for the period | -4.6 | -2.5 | -7.1 | |
Impairment | -0.2 | -4.0 | -4.2 | |
Decrease | 2.4 | 0.1 | 2.5 | |
Other changes | -1.2 | -1.2 | ||
Exchange differences | 0.0 | 0.1 | -0.8 | -0.6 |
Accum. depreciation, Dec 31, 2022 | -14.5 | -81.4 | -37.8 | -133.7 |
Carrying amount, Dec 31, 2022 | 63.2 | 9.0 | 6.5 | 78.7 |
In 2022 the depreciation without discontinued operations was EUR
5.7 million.
| Other | ||||
| 2023 | Intangible | intangible | ||
EUR million | Goodwill | rights | assets | To t al |
Accumulated cost, Jan 1, 2023 | 78.0 | 90.4 | 44.3 | 212.7 |
Increase | 0.5 | 0.3 | 0.9 | |
Decrease | -0.1 | -17.3 | -17.4 | |
Transfers between items | 3.7 | 0.1 | 3.8 | |
Other changes | -0.5 | -10.1 | 0.0 | -10.6 |
Exchange differences | -0.9 | 0.0 | -0.2 | -1.1 |
Accumulated cost, Dec 31, 2023 | 76.6 | 84.5 | 27.1 | 188.2 |
Accum. depreciation, Jan 1, 2023 | -14.5 | -81.4 | -37. 8 | -133.7 |
Depreciation for the period | -3.7 | 3.0 | -0.7 | |
Impairment | 0.0 | 0.0 | ||
Decrease | 0.1 | 11.6 | 11.7 | |
Other changes | 0.3 | 10.1 | 0.1 | 10.4 |
Exchange differences | 0.0 | 0.0 | 0.2 | 0.2 |
Accum. depreciation, Dec 31, 2023 | -14.3 | -74.9 | -22.9 | -112.1 |
Carrying amount, Dec 31, 2023 | 62.3 | 9.6 | 4.2 | 76.1 |
56
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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 | Dec 31, 2023 |
Passenger Car Tyres | 61.4 |
Heavy Tyres | 0.9 |
Vianor | - |
Total goodwill | 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
| Impairment | Goodwill | ||
| EUR million | loss | Dec 31, 2023 | |
Passenger Car Tyres | 61.4 | - | 61.4 |
Heavy Tyres | 0.9 | - | 0.9 |
Vianor | - | - | - |
Total goodwill | 62.3 | - | 62.3 |
57
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
15. Right of use assets
58
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| 2023 | Machinery and | |||
EUR million | Land property | Buildings | equipment | Total |
Accumulated cost, Jan 1, 2023 | 1.2 | 230.9 | 4.8 | 236.9 |
Increase | 0.2 | 45.0 | 2.2 | 47. 5 |
Decrease | -0.1 | -28.9 | -2.2 | -31.2 |
Other changes | - | 0.8 | - | 0.8 |
Exchange differences | - | -6.2 | 0.0 | -6.2 |
Accumulated cost, Dec 31, 2023 | 1.4 | 241.6 | 4.8 | 247.8 |
Accum. Depreciation, Jan 1, 2023 | -0.2 | -110.5 | -2.4 | -113.1 |
Depreciation for the period | -0.1 | -39.7 | -1.6 | -41.4 |
Decrease | 0.0 | 26.7 | 2.1 | 28.8 |
Other changes | - | 0.0 | - | 0.0 |
Exchange differences | - | 2.6 | 0.0 | 2.6 |
Accum. Depreciation, Dec 31, 2023 | -0.3 | -120.9 | -1.9 | -123.1 |
Carrying amount, Dec 31, 2023 | 1.1 | 120.7 | 3.0 | 124.7 |
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.
| 2022 | Machinery and | |||
EUR million | Land property | Buildings | equipment | Total |
Accumulated cost, Jan 1, 2022 | 1.5 | 234.3 | 3.9 | 239.7 |
Increase | - | 18.3 | 1.6 | 19.9 |
Decrease | -0.4 | -16.2 | -0.6 | -17.2 |
Other changes | - | - | - | - |
Exchange differences | - | -5.5 | - | -5.5 |
Accumulated cost, Dec 31, 2022 | 1.2 | 230.9 | 4.8 | 236.9 |
Accum. Depreciation, Jan 1, 2022 | -0.2 | -84.7 | -1.3 | -86.2 |
Depreciation for the period | -0.1 | -39.6 | -1.6 | -41.3 |
Decrease | 0.0 | 10.8 | 0.6 | 11.5 |
Other changes | - | - | - | - |
Exchange differences | 0.0 | 3.0 | 0.0 | 3.0 |
Accum. Depreciation, Dec 31, 2022 | -0.2 | -110.5 | -2.4 | -113.1 |
Carrying amount, Dec 31, 2022 | 0.9 | 120.4 | 2.5 | 123.8 |
59
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
16. Carrying amount and fair values of financial assets and liabilities
60
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
2 | |||||||||
61
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | 2023 | 2022 |
Fair value, Jan 1 | 0.4 | - |
| Ruble derivatives | ||
Transfers into Level 3 | - | 14.8 |
Net gains/losses recognized in profit or loss under Financial income and expenses | 0.7 | -14.3 |
Discontinued operations | 2.0 | - |
Fair value, Dec 31 | - | 0.4 |
17. Investments in associates and non-current
financial investments
| Investments | Unquoted | Unquoted | |
| EUR million | in associates | securities | shares |
Accumulated cost, Jan 1, 2023 | 0.1 | 2.6 | 0.2 |
Decrease/Increase | - | 0.0 | 0.0 |
Net exchange differences | - | 0.1 | - |
Carrying amount, Dec 31, 2023 | 0.1 | 2.7 | 0.2 |
Carrying amount, Dec 31, 2022 | 0.1 | 2.8 | 0.2 |
18. Other non-current receivables
EUR million | 2023 | 2022 |
Loan receivables | - | 4.3 |
Other non-current receivables | 14.1 | 10.0 |
Total | 14.1 | 14.4 |
62
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
19. Deferred tax assets and liabilities
| Recognized | |||||||
| Recognized | in other | Acquisitions/ | |||||
| Dec 31, | Adjustments | in income | comprehensive | Net exchange | disposals of | Dec 31, | |
| EUR million | 2022 | between items | statement | income | differences | subsidiaries | 2023 |
| Deferred tax assets | |||||||
Inventories | 9.9 | -0.6 | 9.3 | ||||
Property, plant and equipment and intangible assets | 1.1 | 0.7 | 1.8 | ||||
Lease liabilities | 25.8 | 2.7 | 28.5 | ||||
Provisions and accruals | 3.1 | -2.0 | -2.0 | 0.3 | -0.7 | ||
Tax losses carried forward | 20.2 | 13.3 | 33.5 | ||||
Cash flow hedges | 0.0 | 0.0 | 0.0 | ||||
Other items | 0.7 | -0.7 | 0.1 | ||||
Total | 60.9 | -2.0 | 13.5 | 0.0 | 0.3 | 72.6 | |
Deferred tax assets offset against deferred tax liabilities | -37.4 | 19.7 | -17.6 | ||||
Deferred tax assets | 23.5 | -2.0 | 33.2 | 0.0 | 0.3 | 55.0 | |
| Deferred tax liabilities | |||||||
Property, plant and equipment and intangible assets | 17.7 | 0.3 | -3.1 | 14.9 | |||
Right of use assets | 24.8 | 2.6 | 27.4 | ||||
Untaxed reserves | 0.6 | -0.6 | 0.0 | ||||
Undistributed earnings in subsidiaries | 9.2 | -1.4 | -7.7 | 0.0 | |||
Cash flow hedges | 2.6 | -2.2 | 0.4 | ||||
Other items | 0.0 | 1.4 | 0.2 | 1.7 | |||
Total | 54.8 | 0.3 | -8.6 | -2.2 | 0.0 | 0.0 | 44.3 |
Deferred tax liabilities offset against deferred tax assets | -37.4 | 19.7 | -17.6 | ||||
Deferred tax liabilities | 17.5 | 0.3 | 11.1 | -2.2 | 0.0 | 0.0 | 26.7 |
63
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
| Recognized | |||||||
| Recognized | in other | Acquisitions/ | |||||
| Dec 31, | Adjustments | in income | comprehensive | Net exchange | disposals of | Dec 31, | |
| EUR million | 2021 | between items | statement | income | differences | subsidiaries | 2022 |
| Deferred tax assets | |||||||
Inventories | 9.6 | 0.7 | -0.4 | 9.9 | |||
Property, plant and equipment and intangible assets | 0.3 | 0.6 | 0.1 | 1.1 | |||
Lease liabilities | 31.6 | -5.8 | 25.8 | ||||
Provisions and accruals | 10.3 | 1.1 | -9.2 | 0.9 | 3.1 | ||
Tax losses carried forward | 1.6 | 5.1 | 13.5 | 20.2 | |||
Cash flow hedges | 0.4 | -0.4 | 0.0 | ||||
Other items | 0.6 | 0.2 | 0.7 | ||||
Total | 54.3 | 7.5 | -1.5 | -0.4 | 0.9 | 60.9 | |
Deferred tax assets offset against deferred tax liabilities | -32.8 | -4.6 | -37.4 | ||||
Deferred tax assets | 21.6 | 7.5 | -6.1 | -0.4 | 0.9 | 23.5 | |
| Deferred tax liabilities | |||||||
Property, plant and equipment and intangible assets | 17.5 | -2.4 | 2.6 | 0.0 | 17.7 | ||
Right of use assets | 30.7 | -5.9 | 24.8 | ||||
Untaxed reserves | 0.5 | 0.1 | 0.0 | 0.6 | |||
Undistributed earnings in subsidiaries | 21.0 | -11.9 | 9.2 | ||||
Cash flow hedges | 0.8 | 1.9 | 2.6 | ||||
Other items | 0.1 | -0.4 | 0.2 | 0.0 | |||
Total | 70.6 | -2.7 | -15.0 | 1.9 | 0.0 | 54.8 | |
Deferred tax liabilities offset against deferred tax assets | -32.8 | -4.6 | -37.4 | ||||
Deferred tax liabilities | 37.9 | -2.7 | -19.6 | 1.9 | 0.0 | 17.5 |
64
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
20. Inventories
EUR million | 2023 | 2022 |
Raw materials and supplies | 108.1 | 214.5 |
Work in progress | 11.3 | 13.6 |
Finished goods | 352.3 | 301.8 |
Total | 471.7 | 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.
21. Trade and other receivables
EUR million | 2023 | 2022 |
Trade receivables | 224.2 | 326.2 |
Loan receivables | - | 0.4 |
Accrued revenues and deferred expenses | 14.9 | 16.3 |
| Derivative financial instruments | ||
Designated as hedges | 3.0 | 12.4 |
Measured at fair value through profit or loss | 2.6 | 3.4 |
Current tax assets | 7.6 | 15.0 |
Value added tax receivables | 23.6 | 15.9 |
Other receivables | 4.7 | 12.6 |
Total | 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 | 2.7 | 3.2 |
Financial items | 1.1 | 0.6 |
Social security contributions | 0.3 | 0.1 |
Insurances | 1.6 | 1.4 |
Other items | 9.3 | 11.1 |
Total | 14.9 | 16.3 |
22. Cash and cash equivalents
EUR million | 2023 | 2022 |
Cash in hand and at bank | 364.2 | 259.0 |
Money market instruments | 50.7 | - |
Total | 414.9 | 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.
65
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
23. Equity
| Number of | Paid-up | |||||
| shares, | Share | unrestricted | Treasury | |||
| EUR million | 1,000 pcs | Share capital | premium | equity reserve | shares | Total |
Jan 1, 2022 | 138,224 | 25.4 | 181.4 | 238.2 | -17.6 | 427.5 |
Acquisition/conveyance of treasury shares | 27 | - | - | - | 1.0 | 1.0 |
Other changes | - | - | - | - | - | - |
Dec 31, 2022 | 138,251 | 25.4 | 181.4 | 238.2 | -16.6 | 428.5 |
Jan 1, 2023 | 138,251 | 25.4 | 181.4 | 238.2 | -16.6 | 428.5 |
Acquisition/conveyance of treasury shares | -384 | 0.0 | 0.0 | 0.0 | -0.1 | -0.1 |
Other changes | - | - | - | - | - | - |
Dec 31, 2023 | 137,867 | 25.4 | 181.4 | 238.2 | -16.7 | 428.4 |
66
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
67
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
68
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
The three-year restriction period of 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
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 possible rewards paid based on the Restricted Share Plan
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
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.
69
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
nstrument | 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 |
Issuing date | Feb 4, 2020 | Feb 9, 2021 | Feb 8, 2022 | Feb 7, 2023 | Feb 4, 2020 | Feb 9, 2021 | Feb 8, 2022 | Feb 7, 2023 | ||
Initial amount, pcs | 569,260 | 534,898 | 513,742 | 1,400,000 | 120,000 | 120,000 | 120,000 | 120,000 | 3,497,900 | |
Dividend adjustment | No | No | No | No | No | No | No | No | ||
Initial allocation date | 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 | Jan 1, 2021 | Jan 1, 2022 | Jan 1, 2023 | ||
End of earning period | Dec 31, 2022 | Dec 31, 2023 | Dec 31, 2024 | Dec 31, 2025 | Dec 31, 2022 | Dec 31, 2023 | Dec 31, 2024 | Dec 31, 2025 | ||
Vesting date | Mar 31, 2023 | Mar 31, 2024 | Mar 31, 2025 | Mar 31, 2026 | Mar 31, 2023 | Mar 31, 2024 | Mar 31, 2025 | Mar 31, 2026 | ||
| Cumulative | ||||||||||
| EBITDA, increase | Continued | |||||||||
| in passenger car | employment, | Continued | Continued | Continued | ||||||
| Earnings Per | Earnings Per | Earnings Per | tire production | Segments | employment, | employment, | employment, | |||
| Share (EPS) | Share (EPS) | Share (EPS) | volume and | Return on Capital | Segments Return | Segments Return | Segments Return | |||
| growth % and | growth % and | growth % and | reduction in | Employed (ROCE) | on Capital Employed | on Capital Employed | on Capital Employed | |||
| Return on Capital | Return on Capital | Return on Capital | direct CO 2 | for management | (ROCE) for | (ROCE) for | (ROCE) for | |||
| Vesting conditions | Employed (ROCE) | Employed (ROCE) | Employed (ROCE) | emissions | team | management team | management team | management team | ||
Maximum contractual life, yrs | 3.0 | 3.1 | 3.1 | 3.2 | 3.2 | 3.1 | 3.1 | 3.2 | 3.1 | |
Remaining contractual life, yrs | 0.0 | 0.3 | 1.3 | 2.3 | 0.0 | 0.3 | 1.3 | 2.3 | 1.3 | |
Number of persons at the end of reporting year | 0 | 142 | 164 | 152 | 67 | 4 | 7 | 1 | ||
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 | 373,420 | 454,702 | 445,854 | 0 | 80,550 | 6,135 | 12,300 | 0 | 1,372,961 | |
Reserve in the beginning of the period | 195,840 | 80,196 | 67,888 | 0 | 39,450 | 113,865 | 107,700 | 0 | 604,939 | |
| Changes during period | ||||||||||
Granted | 0 | 0 | 0 | 1,373,474 | 0 | 0 | 0 | 15,000 | 1,388,474 | |
Forfeited | 57,140 | 92,652 | 86,858 | 87,708 | 9,600 | 0 | 0 | 0 | 333,958 | |
Earned (Gross) | 154,187 | 0 | 0 | 0 | 70,950 | 0 | 0 | 0 | 225,137 | |
Delivered (Net) | 79,179 | 0 | 0 | 0 | 36,740 | 0 | 0 | 0 | 115,919 | |
Expired | 162,094 | 0 | 0 | 0 | 49,050 | 0 | 0 | 0 | 211,144 | |
| Dec 31, 2023 | ||||||||||
Outstanding at the of the period | 0 | 374,506 | 358,996 | 1,285,766 | 0 | 6,135 | 12,300 | 15,000 | 2,052,703 | |
Reserved at the of the period | 0 | 172,848 | 154,746 | 114,234 | 0 | 113,865 | 107,700 | 105,000 | 768,393 |
70
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
| Earning period 2023 | |
| Fair value Determination | |
Share price at grant, EUR | 10.19 |
Share price at reporting date, EUR | 8.258 |
Expected dividends, EUR | 1.06 |
Fair market value per share at grant, EUR | 9.12 |
Valuation model | Dividend Discount |
Total fair value Dec 31, 2023, EUR million | 1.17 |
| Impact on period profits | |
| and financial position | |
Expenses for the financial year, share- based payments, EUR million | 0.30 |
| Liabilities arising from share-based | |
payments Dec 31, 2023, EUR million | 0.00 |
| Estimated amount of cash to be paid | |
under these plans, EUR million | 1.20 |
25. Pension liabilities
All material pension arrangements in the Group are defined
contribution plans.
71
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| Warranty | Restructuring | ||
| EUR million | provision | provision | Total |
Jan 1, 2023 | 5.8 | 4.0 | 9.8 |
Provisions made | 0.2 | 0.0 | 0.2 |
Provisions used | 0.0 | -2.1 | -2.1 |
Unused provisions reversed | -4.3 | -2.0 | -6.2 |
Dec 31, 2023 | 1.8 | 0.0 | 1.8 |
EUR million | 2023 | 2022 | |
Non-current provisions | - | - | |
Current provisions | 1.8 | 9.8 | |
EUR million | 2023 | 2022 |
Trade payables | 155.9 | 121.3 |
Accrued expenses and deferred revenues | 106.3 | 170.9 |
Advance payments | 0.0 | 0.7 |
| Derivative financial instruments | ||
Designated as hedges | 0.5 | 0.1 |
Measured at fair value through profit or loss | 1.7 | 1.0 |
Current tax liabilities | 3.8 | 4.1 |
Value added tax liabilities | 24.0 | 31.9 |
Other liabilities | 18.1 | 18.3 |
Total | 310.2 | 348.6 |
EUR million | 2023 | 2022 |
| Significant items under accrued expenses | ||
| and deferred revenues | ||
| Wages, salaries and social security | ||
contributions | 26.0 | 43.2 |
Annual discounts, sales | 62.2 | 97.8 |
Commissions | 0.0 | 0.0 |
Marketing expenses | 0.8 | 1.3 |
Transportation costs | 0.2 | 0.4 |
Financial items | 5.2 | 0.8 |
Other items | 11.9 | 27.4 |
Total | 106.3 | 170.9 |
EUR million | 2023 | 2022 |
| Non-current | ||
Loans from financial institutions and pension loans | 304.7 | 108.6 |
Bond loans | 99.2 | - |
404.0 | 108.6 | |
| Current | ||
Loans from financial institutions | - | 150.0 |
Commercial papers | - | 10.9 |
Current portion of non-current loans from financial institutions and pension loans | 104.2 | 1.3 |
104.2 | 162.2 | |
Total | 508.2 | 270.8 |
| 2023 | 2022 | |||
| Without | With | Without | With | |
| hedges | hedges | hedges | hedges | |
| Loans from financial | ||||
institutions and pension loans | 5.2% | 4.3% | 3.1% | 2.5% |
Bond loans | 5.3% | 5.3% | - | - |
Commercial papers | - | - | 2.9% | 2.9% |
Total | 5.2% | 4.5% | 3.1% | 2.5% |
72
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | Dec 31, 2023 | Dec 31, 2022 | ||||||||||||||
Functional currency | EUR | EUR | EUR | EUR | EUR | EUR | CZK | RON | EUR | EUR | EUR | EUR | EUR | EUR | CZK | RON |
Foreign currency | CAD | NOK | PLN | RON | SEK | USD | EUR | EUR | CAD | NOK | PLN | RON | SEK | USD | EUR | EUR |
Trade receivables | 15.0 | 21.9 | 5.1 | 0.0 | 24.3 | 11.9 | 20.2 | 0.0 | 5.7 | 38.8 | 2.8 | 0.0 | 26.7 | 6.3 | 35.3 | 0.0 |
Loans and receivables | 1.6 | 44.8 | 7.3 | 0.0 | 28.0 | 8.6 | 5.8 | 0.0 | 2.8 | 106.8 | 6.9 | 0.0 | 25.7 | 23.1 | 23.6 | 0.0 |
Total currency income | 16.6 | 66.6 | 12.4 | 0.0 | 52.3 | 20.5 | 26.1 | 0.0 | 8.6 | 145.6 | 9.7 | 0.0 | 52.3 | 29.5 | 58.9 | 0.0 |
Trade payables | -0.1 | 0.0 | 0.0 | 0.0 | 0.0 | -16.7 | -21.2 | -3.8 | -0.4 | 0.0 | 0.0 | 0.0 | 0.0 | -6.6 | -34.3 | -16.8 |
Borrowings | -9.8 | -31.1 | -5.8 | 0.0 | -13.1 | -3.2 | 0.0 | 0.0 | -7.3 | -97.8 | -7.3 | 0.0 | -20.4 | -18.8 | 0.0 | 0.0 |
Total currency expenditure | -9.9 | -31.1 | -5.8 | 0.0 | -13.1 | -20.0 | -21.2 | -3.8 | -7.7 | -97.8 | -7.3 | 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 | 0.8 | 6.9 | 0.0 | 0.0 | 5.3 | 1.0 | 6.0 | 0.0 | 7.5 | 10.0 | 0.0 | 0.0 | 2.4 | 1.5 | 12.0 | 0.0 |
Binding purchase contracts | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -76.9 | -2.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -16.4 | -5.3 | 0.0 |
Future interest items | 0.0 | 2.1 | 0.0 | 0.0 | 0.8 | 0.0 | 0.0 | 0.0 | 0.0 | 0.9 | 0.0 | 0.0 | 0.2 | -0.2 | 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 |
73
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | Dec 31, 2023 | Dec 31, 2022 |
| Currency of net investment | ||
CAD | 21.7 | 13.7 |
CZK | 13.8 | 24.8 |
NOK | 52.8 | 41.3 |
RON | 123.0 | 20.4 |
RUB | - | 514.3 |
SEK | 43.6 | 47.0 |
USD | 470.2 | 428.4 |
- |
74
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Dec 31, 2023 | Dec 31, 2022 | |||||||
Interest rate | Interest rate | |||||||
1%-point higher | 1%-point lower | 1%-point higher | 1%-point lower | |||||
| Income | Income | Income | Income | |||||
| EUR million | statement | Equity | statement | Equity | statement | Equity | statement | Equity |
Impact of interest rate change | -3.4 | 0.5 | 3.4 | -0.5 | -1.6 | 1.2 | 1.6 | -1.2 |
Dec 31, 2023 | Dec 31, 2022 | |||||||
Electricity price | Electricity price | |||||||
5 EUR/MWh higher | 5 EUR/MWh lower | 5 EUR/MWh higher | 5 EUR/MWh lower | |||||
| Income | Income | Income | Income | |||||
| EUR million | statement | Equity | statement | Equity | statement | Equity | statement | Equity |
Impact of electricity price change | - | 0.9 | - | -0.9 | - | 0.8 | - | -0.8 |
75
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| 2023 | ||||||||
| Contractual maturities* | ||||||||
| Carrying | ||||||||
EUR million | amount | 2024 | 2025 | 2026 | 2027 | 2028 | 2029– | Tota l |
| Non-derivative financial liabilities | ||||||||
| Loans from financial institutions and pension loans | ||||||||
Fixed rate loans | 3.4 | -0.6 | -0.6 | -0.6 | -0.6 | -0.6 | -0.8 | -3.7 |
Floating rate loans | 405.6 | -122.7 | -308.7 | -0.5 | -0.5 | -0.2 | -0.3 | -433.0 |
Bond loans | 99.2 | -5.1 | -5.1 | -5.1 | -5.1 | -105.1 | 0.0 | -125.6 |
Commercial papers | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Trade and other payables | 155.9 | -155.9 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -155.9 |
Lease liabilities | 130.3 | -27.5 | -23.5 | -17.1 | -10.6 | -7.2 | -20.2 | -106.0 |
| Derivative financial liabilities | ||||||||
| Interest rate derivatives | ||||||||
Designated as hedges | -1.6 | 1.6 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 1.6 |
| Foreign currency derivatives | ||||||||
| Measured at fair value through profit or loss | ||||||||
Cashflow out | 1.7 | -235.2 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -235.2 |
Cashflow in Electricity derivatives | -2.6 | 236.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 236.1 |
Designated as hedges | -0.7 | 0.7 | 0.1 | 0.0 | 0.0 | 0.0 | 0.0 | 0.7 |
Total | 791.2 | -308.6 | -337. 8 | -23.3 | -16.8 | -113.1 | -21.3 | -821.0 |
76
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| 2022 | ||||||||
| Contractual maturities* | ||||||||
| Carrying | ||||||||
EUR million | amount | 2023 | 2024 | 2025 | 2026 | 2027 | 2028– | Tot a l |
| Non-derivative financial liabilities | ||||||||
| Loans from financial institutions and pension loans | ||||||||
Fixed rate loans | 4.5 | -1.2 | -0.6 | -0.6 | -0.6 | -0.6 | -1.4 | -4.9 |
Floating rate loans | 255.4 | -155.4 | -105.0 | -0.3 | -0.3 | -0.4 | -0.5 | -262.1 |
Bond loans | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Commercial papers | 10.9 | -11.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -11.0 |
Trade and other payables | 121.3 | -121.3 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -121.3 |
Lease liabilities | 129.1 | -26.0 | -22.0 | -18.2 | -12.6 | -7. 3 | -20.9 | -106.9 |
| Derivative financial liabilities | ||||||||
| Interest rate derivatives | ||||||||
Designated as hedges | -3.9 | 2.5 | 1.5 | 0.0 | 0.0 | 0.0 | 0.0 | 4.0 |
| Foreign currency derivatives | ||||||||
| Measured at fair value through profit or loss | ||||||||
Cashflow out | 1.0 | -179.5 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -179.5 |
Cashflow in Electricity derivatives | -3.4 | 180.8 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 180.8 |
Designated as hedges | -9.4 | 7.0 | 1.9 | 0.8 | 0.0 | 0.0 | 0.0 | 9.7 |
Total | 505.5 | -304.2 | -124.3 | -18.3 | -13.5 | -8.3 | -22.8 | -491.3 |
77
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Dec 31, 2023 | Dec 31, 2022 | |||
| Trade receivables | Impairment | Trade receivables | Impairment | |
| EUR million | gross amount | loss allowance | gross amount | loss allowance |
Not past due | 193.3 | -1.0 | 423.7 | -129.3 |
Past due less than 30 days | 22.4 | -0.6 | 24.8 | -1.1 |
Past due between 30 and 90 days | 5.7 | -0.3 | 5.7 | -0.5 |
Past due between 91 and 180 days | 1.8 | -0.2 | 1.9 | -0.5 |
Past due more than 180 days | 44.3 | -41.2 | 67.4 | -65.8 |
Total | 267.5 | -43.3 | 523.5 | -197.3 |
EUR million | 2023 | 2022 |
Loss allowance, Jan 1 | 197.3 | 70.0 |
Write-offs | -3.3 | -3.4 |
Other changes* | -148.9 | 127.9 |
Change in loss allowance recognized in profit or loss | -1.8 | 2.8 |
Loss allowance, Dec 31 | 43.3 | 197.3 |
78
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | 2023 | 2022 |
Average interest-bearing liabilities | 579.1 | 415.4 |
Less: Average liquid funds | 360.1 | 212.9 |
Average net debt | 219.0 | 202.5 |
Operating profit | 32.1 | 56.7 |
Add: Depreciations and amortizations | 114.9 | 113.5 |
EBITDA | 147.0 | 170.2 |
Average net debt / EBITDA | 1.49 | 1.19 |
EUR million | 2023 | 2022 |
| Equity attributable to equity | ||
holders of the parent | 1,347.6 | 1,433.1 |
Add: Non-controlling interest | 0.0 | 0.0 |
Total equity | 1,347.6 | 1,433.1 |
Total assets | 2,325.2 | 2,209.7 |
Less: Advances received | 0.0 | 0.7 |
Adjusted total assets | 2,325.2 | 2,208.9 |
Equity ratio | 58.0% | 64.9% |
79
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
30. Fair values of derivative financial instruments
80
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
2023 | 2022 | |||||
| Notional | Fair value | Fair value | Notional | Fair value | Fair value | |
| EUR million | amount | assets | liabilities | amount | assets | liabilities |
| Derivatives measured at fair value through profit or loss | ||||||
| Foreign currency derivatives | ||||||
Currency forwards | 227.6 | 2.6 | 1.5 | 159.9 | 2.7 | 0.8 |
Currency options, purchased | 6.7 | 0.0 | - | 4.8 | 0.0 | - |
Currency options, written | 15.6 | - | 0.3 | 11.8 | - | 0.1 |
Interest rate and currency swaps | - | - | - | 18.4 | 0.6 | 0.2 |
| Derivatives designated as cash flow hedges | ||||||
| Interest rate derivatives | ||||||
Interest rate swaps | 150.0 | 2.0 | 0.4 | 100.0 | 3.9 | 0.0 |
| Electricity derivatives | ||||||
Electricity forwards | 9.1 | 1.4 | 0.6 | 6.9 | 9.6 | 0.2 |
81
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| 2023 | |||||||
| Maturity | |||||||
2024 | 2025 | 2026 | 2027 | 2028 | 2029– | Tota l | |
| Interest rate swaps | |||||||
| Hedged item: Floating rate EUR debt | |||||||
Notional amount, EUR million | 150.0 | 150.0 | |||||
Average fixed rate | 1.6% | 1.6% | |||||
| Electricity forwards | |||||||
| Hedged item: Electricity system price | |||||||
Notional amount, EUR million | 4.5 | 2.8 | 1.6 | 0.4 | 9.2 | ||
Notional amount, GWh | 83 | 61 | 35 | 9 | 189 | ||
Average forward rate, e/MWh | 53.8 | 45.1 | 44.9 | 44.2 | 48.8 | ||
| Hedged item: Electricity Finnish | |||||||
| area price difference | |||||||
Notional amount, EUR million | -0.1 | 0.0 | -0.1 | ||||
Notional amount, GWh | 44 | 18 | 61 | ||||
Average forward rate, e/MWh | -2.1 | -1.3 | -1.9 |
| 2022 | |||||||
| Maturity | |||||||
2023 | 2024 | 2025 | 2026 | 2027 | 2028– | Tot a l | |
| Interest rate swaps | |||||||
| Hedged item: Floating rate EUR debt | |||||||
Notional amount, EUR million | 100.0 | 100.0 | |||||
Average fixed rate | 0.5% | 0.5% | |||||
| Electricity forwards | |||||||
| Hedged item: Electricity system price | |||||||
Notional amount, EUR million | 3.5 | 2.2 | 1.0 | 6.6 | |||
Notional amount, GWh | 79 | 48 | 26 | 153 | |||
Average forward rate, e/MWh | 44.7 | 44.7 | 36.6 | 43.3 | |||
| Hedged item: Electricity Finnish | |||||||
| area price difference | |||||||
Notional amount, EUR million | 0.2 | 0.1 | 0.0 | 0.3 | |||
Notional amount, GWh | 35 | 18 | 9 | 61 | |||
Average forward rate, e/MWh | 4.7 | 4.1 | 3.9 | 4.4 |
82
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
| 2023 | ||
| Interest rate | Electricity | |
| derivatives | derivatives | |
EUR million | Interest rate swaps | Electricity forwards |
Notional amount | 150.0 | 9.1 |
Notional amount, GWh | - | 250 |
| Assets | ||
Carrying amount | 2.0 | 1.4 |
| Trade and other | Trade and other | |
| Line item in the statement of financial position | receivables | receivables |
| Liabilities | ||
Carrying amount | 0.4 | 0.6 |
| Trade and other | Trade and other | |
| Line item in the statement of financial position | payables | payables |
| Change in value for recognizing hedge ineffectiveness | ||
Hedged item | -0.3 | 7.9 |
Hedging instrument | 0.3 | -7.9 |
| Effective portion | ||
Amount recognized in other comprehensive income | 0.3 | -7.9 |
Amount reclassified from the cash flow hedge reserve to profit or loss | -2.7 | -0.8 |
Line item in the income statement | Financial items | Cost of sales |
| Ineffective portion | ||
Amount recognized in profit or loss | - | - |
| Other operating | ||
Line item in the income statement | Financial items | income or expenses |
| 2022 | ||
| Interest rate | Electricity | |
| derivatives | derivatives | |
EUR million | Interest rate swaps | Electricity forwards |
Notional amount | 100.0 | 6.9 |
Notional amount, GWh | - | 215 |
| Assets | ||
Carrying amount | 3.9 | 9.6 |
| Trade and other | Trade and other | |
| Line item in the statement of financial position | receivables | receivables |
| Liabilities | ||
Carrying amount | 0.0 | 0.2 |
| Trade and other | Trade and other | |
| Line item in the statement of financial position | payables | payables |
| Change in value for recognizing hedge ineffectiveness | ||
Hedged item | -5.1 | -7.1 |
Hedging instrument | 5.1 | 7.1 |
| Effective portion | ||
Amount recognized in other comprehensive income | 5.1 | 7.1 |
Amount reclassified from the cash flow hedge reserve to profit or loss | 0.5 | -1.5 |
Line item in the income statement | Financial items | Cost of sales |
| Ineffective portion | ||
Amount recognized in profit or loss | - | - |
| Other operating | ||
Line item in the income statement | Financial items | income or expenses |
83
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
EUR million | 2023 | 2022 |
Cash flow hedge reserve, Jan 1 | 10.5 | 1.6 |
| Cash flow hedges | ||
Change in fair value recognized in other comprehensive income | ||
Interest rate swaps | 0.3 | 5.1 |
Electricity forwards | -7.9 | 7.1 |
| Amount reclassified to profit or loss | ||
Interest rate swaps | -2.7 | 0.5 |
Electricity forwards | -0.8 | -1.5 |
Tax effect | 2.2 | -2.2 |
Cash flow hedge reserve, Dec 31 | 1.6 | 10.5 |
32. Contingent liabilities and assets
EUR million | 2023 | 2022 |
| For own debt | ||
Pledged assets | 5.9 | 6.7 |
| Other own commitments | ||
Guarantees | 0.3 | 2.3 |
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.
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.
84
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
• Any unexpected production or delivery breaks at Nokian Tyres’
85
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
34. Related party transactions
| Parent | |||||
| Group | Voting | company | |||
Domicile | Country | holding, % | rights, % | holding, % | |
| Parent company | |||||
Nokian Tyres plc | Nokia | Finland | |||
| Group companies | |||||
Nokian Heavy Tyres Ltd. | Nokia | 100 | 100 | 100 | |
Levypyörä Oy | Nastola | Finland | 100 | 100 | |
Nokian Däck AB | Sweden | 100 | 100 | 100 | |
Nokian Dekk AS | Norway | 100 | 100 | 100 | |
Nokian Tyres GmbH | Germany | 100 | 100 | 100 | |
Nokian Tyres AG | Switzerland | 100 | 100 | 100 | |
Nokian Tyres SP Z.O.O | Poland | 100 | 100 | 100 | |
Nokian Tyres U.S. Holdings Inc. | USA | 100 | 100 | 100 | |
Nokian Tyres Inc | USA | 100 | 100 | ||
Nokian Tyres U.S. Operations LLC | USA | 100 | 100 | ||
Nokian Tyres Canada Inc. | Canada | 100 | 100 | 100 | |
Nokian Tyres s.r.o. | Czech Rep. | 100 | 100 | 100 | |
TOV Nokian Shina | Ukraine | 100 | 100 | 100 | |
Nokian Tyres Holding Oy | Nokia | Finland | 100 | 100 | 100 |
Nokian Tyres Trading (Shanghai) Co Ltd | China | 100 | 100 | ||
NT Tyre Machinery Oy | Nokia | Finland | 100 | 100 | |
Koy Nokian Nosturikatu 18 | Nokia | Finland | 100 | 100 | 100 |
Koy Nokian Rengaskatu 4 | Nokia | Finland | 100 | 100 | 100 |
Nokian Portti Oy | Turku | Finland | 100 | 100 | 100 |
Nokian Tyres Spain S.L.U. | Spain | 100 | 100 | 100 | |
Nokian Tyres Europe Operations S.R.L. | Romania | 100 | 100 | 100 | |
Nokian Tyres SAS | France | 100 | 100 | 100 |
| Parent | |||||
| Group | Voting | company | |||
Domicile | Country | holding, % | rights, % | holding, % | |
Nokianvirran Energia Oy | Nokia | Finland | 32.3 | 32.3 | 32.3 |
Vianor Holding Oy | Nokia | Finland | 100 | 100 | 100 |
Vianor Oy | Lappeenranta | Finland | 100 | 100 | |
Vianor AB | Sweden | 100 | 100 | ||
Nordic Wheels AB | Sweden | 100 | 100 | ||
Vianor AS | Norway | 100 | 100 | ||
EAM NRE1V Holding Oy | Finland | 0 | 100 |
| Associated companies | |||||
Sammaliston Sauna Oy | Nokia | Finland | 33 | 33 | 33 |
86
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
1,000 euros | 2023 | 2022 |
| Key management personnel | ||
| Employee benefit expenses | ||
Short-term employee benefits | 5,687.4 | 6,694.2 |
Post-employment benefits | 0.0 | 0.0 |
Termination benefits | 0.0 | 0.0 |
Share-based payments | 700.7 | 516.1 |
Total | 6,388.1 | 7,210.3 |
| Remunerations | ||
| Jukka Moisio, President and CEO | ||
(May 27, 2020–) | 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 | 121.9 | 126.1 |
Pekka Vauramo | 86.9 | 90.4 |
Heikki Allonen | - | 67.2 |
Veronica Lindholm | 86.9 | 91.1 |
Inka Mero | - | 67.9 |
George Rietbergen | 64.4 | 67.2 |
Susanne Hahn | 67.2 | 61.6 |
Christopher Ostrander | 72.8 | 68.6 |
Jouko Pölönen | 86.9 | 90.4 |
Reima Rytsölä | 60.9 | - |
Markus Korsten | 62.3 | - |
1,000 euros | 2023 | 2022 |
| Prior members of the Board of Directors | ||
Raimo Lind | - | 5.6 |
Heikki Allonen | 4.2 | - |
Inka Mero | 4.2 | - |
Total | 718.6 | 736.1 |
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 |
2023 | 2022 | |
| Granted, pcs | ||
Shares | 313,565 | 113,907 |
Share options | - | - |
| Held, pcs | ||
Shares | 126,224 | 72,525 |
Share options | - | - |
Exercisable | - | - |
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 Commissions 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.
87
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Parent company income statement, FAS
EUR Note 2023 2022
Net sales 1 712,531,189.30 803,648,640.63
Cost of sales 2, 3 -590,984,413.66 -741,142,612.20
Gross profit 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 2, 3, 4 -48,827,867.60 -55,989,297.44
Other operating expenses 2, 3 -72,707,151.26 -18,766,363.50
Other operating income 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 6 620,081.12 2,675,338.50
Income tax 7 9,044,866.45 -6,181,738.89
Profit for the period 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).
88
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Parent company balance sheet, FAS
EUR Note 2023 2022
Assets
Fixed assets and other non-current assets
Intangible assets 8 8,158,113.80 7,348,806.48
Tangible assets 8 198,527,380.21 175,582,825.78
Shares in Group companies 9 569,526,472.26 423,461,911.32
Investments in associates 9 4,261,050.20 4,261,050.20
Shares in other companies 9 153,111.50 153,111.50
Unquoted securities 9 2,705,882.35 2,803,300.21
Total non-current assets 783,332,010.32 613,611,005.49
Current assets
Inventories 10 231,448,002.79 207,61 7,297.09
Non-current receivables 11, 12 206,820,763.01 222,618,133.94
Current receivables 13 237,688,248.76 393,166,339.82
Cash and cash equivalents 390,239,744.15 165,792,598.95
Total current assets 1,066,196,758.71 989,194,369.80
1,849,528,769.03 1,602,805,375.29
EUR Note 2023 2022
Liabilities and shareholder’s equity
Shareholders' equity 14
Share capital 25,437,906.00 25,437,906.00
Share premium 182,505,622.52 182,505,622.52
Treasury shares -16,678,211.37 -16,563,737.72
Fair value and hedging reserves 1,605,198.77 10,543,503.34
Paid up unrestricted equity fund 238,231,226.51 238,231,226.51
Retained earnings 434,143,287.09 461,716,033.70
Profit for the period 203,720,955.59 48,428,977.26
Total shareholders' equity 1,068,965,985.11 950,299,531.61
Untaxed reserves and provisions
Accumulated depreciation in excess of plan 8 32,755,575.49 27,076,656.61
Liabilities
Non-current liabilities 12, 15 400,205,608.82 106,580,620.55
Current liabilities 16 347,601,599.61 518,848,566.52
Total liabilities 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).
89
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Parent company statement of cash flows, FAS
EUR million 2023 2022
Profit for the period 203.7 48.4
Adjustments for
Depreciation, amortization and impairment 32.8 32.9
Financial income and expenses -227.6 -106.3
Gains and losses on sale of intangible assets, other changes -0.6 0.6
Income Taxes -9.0 6.2
Cash flow before changes in working capital -0.7 -18.1
Changes in working capital
Current receivables, non-interest-bearing, increase (-) / decrease (+) 20.3 62.7
Inventories, increase (-) / decrease (+) -23.8 -86.5
Current liabilities, non-interest-bearing, increase (+) / decrease (-) 99.8 -36.8
Changes in working capital 96.2 -60.5
Financial items and taxes
Interest and other financial items, received 28.9 8.8
Interest and other financial items, paid -29.3 -44.8
Dividends received 232.2 30.2
Income taxes paid -0.4 -3.4
Financial items and taxes 231.4 -9.1
Cash flow from operating activities (A) 327.0 -87.8
EUR million 2023 2022
Cash flows from investing activities
Acquisitions of property, plant and equipment and intangible assets -57.5 -49.9
Proceeds from sale of property, plant and equipment and
intangible assets 0.6 0.7
Acquisitions of other investments -146.1 -23.0
Cash flows from investing activities (B) -203.0 -72.2
Cash flow from financing activities:
Change in current financial receivables, increase (-) / decrease (+) 123.1 -115.3
Change in non-current financial receivables, increase (-) / decrease (+) 22.5 77.9
Change in current financial borrowings, increase (+) / decrease (-) -273.9 126.4
Change in non-current financial borrowings, increase (+) / decrease (-) 295.8 0.0
Group contributions 5.0 -12.6
Dividends paid -72.2 -89.7
Cash flow from financing activities (C) 100.4 -13.2
Change in cash and cash equivalents, increase (+) / decrease (-) (A+B+C) 224.4 -173.2
Cash and cash equivalents at the beginning of the period 165.8 339.0
Cash and cash equivalents at the end of the period 390.2 165.8
90
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Accounting policies for the parent company
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.
Fixed assets and depreciation
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 3–10 years
Buildings 20–40 years
Machinery and equipment 4–20 years
Other tangible assets 10–40 years
Land property, as well as investments in shares, are not regularly
depreciated.
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.
Equity
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.
All foreign currency exchange gains and losses are entered under
financial income and expenses.
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.
91
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Notes to the financial statements of the parent company
1. Net sales by segments and market areas
EUR million 2023 2022
Passenger Car Tyres 488.7 570.4
Heavy Tyres 223.8 233.2
Tota l 712.5 803.6
Finland 217.1 159.7
Nordics 194.7 222.9
Other Europe 200.8 227.7
Americas 92.5 167.4
Other countries 7.5 25.9
Tota l 712.5 803.6
2. Wages, salaries and social expenses
EUR million 2023 2022
Wages and salaries 59.9 60.7
Pension contributions 10.2 10.3
Other social expenses 0.9 2.2
Tota l 71.1 73.3
Remuneration of the members of
the Board of the Directors and the
President on accrual basis 2.1 2.2
of which incentives 0.5 0.7
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.
Personnel, average during the year 2023 2022
Tota l 848 854
3. Depreciation
EUR million 2023 2022
Depreciation according to plan by asset
category
Intangible assets 3.0 4.0
Buildings 2.2 2.3
Machinery and equipment 26.8 22.7
Other tangible assets 0.5 0.4
Tota l 32.4 29.4
Impairment losses by asset category
Buildings - 2.3
Machinery and equipment - 1.1
Tota l - 3.4
Depreciation by function
Production 24.7 20.4
Selling, marketing and R&D 3.3 3.7
Administration 4.5 5.4
Tota l 32.4 29.4
Impairment losses by function
Production - 1.0
Administration - 2.4
Tota l - 3.4
92
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
4. Auditors’ fees
EUR million 2023 2022
Audit fee 0.8 0.7
Other services 0.0 0.1
Tota l 0.8 0.7
5. Financial income and expenses
EUR million 2023 2022
Dividend income
From the Group companies 232.2 153.8
Tota l 232.2 153.8
Interest income, non-current
From the Group companies 9.3 11.1
Tota l 9.3 11.1
Income from shares in companies of the
same Group 0.5 1.2
Other interest and financial income
From the Group companies 5.1 4.3
From others 10.3 0.7
Tota l 15.5 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 -5.0 -14.6
To others -18.1 -3.4
Other financial expenses -2.8 -1.0
Tota l -25.9 -19.0
Total financial income and expenses 2 27.6 106.3
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 0.2 0.4
Buildings 0.2 2.4
Machinery and equipment -6.0 -5.1
Other tangible assets 0.0 0.0
Tota l -5.7 -2.3
Other appropriations
Group contributions 6.3 5.0
Tota l 6.3 5.0
Total appropriations 0.6 2.7
93
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
7. Income tax
EUR million 2023 2022
Direct tax for the year -0.2 -6.2
Direct tax from previous years -0.1 0.0
Change in deferred tax 9.3 -
Tota l 9.0 -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).
8. Fixed assets
Intangible assets Tangible assets
EUR million
Intangible
rights
Other
intangible
rights
Land
property Buildings
Machinery
and equip-
ment
Other
tangible
assets
Advances and
fixed assets
under con-
struction
Accumulated cost, Jan 1, 2023 67.2 9.6 3.9 91.2 535.0 8.3 25.9
Increase 0.5 0.1 8.8 0.0 47.5
Decrease - 0.0 -6.2
Transfer between items 3.3 1.4 38.7 0.5 -43.9
Accumulated cost, Dec 31, 2023 71.0 9.6 4.0 92.6 576.3 8.8 29.4
Accum. depr. acc. to plan Jan 1, 2023 -60.0 -9.5 -53.7 -430.2 -4.9
Accum. depr. on disposals - 5.5
Depreciations for the period -2.9 0.0 -2.2 -26.8 -0.5
Impairment - -
Accum. depr. acc.to plan, Dec 31, 2023 -62.9 -9.6 -55.9 -451.5 -5.4
Carrying amount, Dec 31, 2023 8.1 0.1 4.0 36.8 124.8 3.5 29.4
Carrying amount, Dec 31, 2022 7.2 0.1 3.9 37.6 104.8 3.4 25.9
Accum. depreciation in excess of plan, Dec 31, 2023 1.0 0.0 - 8.4 23.0 0.3
Accum. depreciation in excess of plan, Dec 31, 2022 1.2 0.0 - 8.6 17.0 0.2
94
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
9. Investments
EUR million
Shares in Group
companies
Investments in
associates
Shares in other
companies
Unquoted
securities
Accumulated cost, Jan 1, 2023 423.5 4.3 0.2 2.8
Decrease -3.1 -
Increase 149.2 -
Impairment losses -
Exchange rate difference -0.1
Accumulated cost, Dec 31, 2023 569.5 4.3 0.2 2.7
Carrying amount, Dec 31, 2023 569.5 4.3 0.2 2.7
Carrying amount, Dec 31, 2022 423.5 4.3 0.2 2.8
10. Inventories
EUR million 2023 2022
Raw materials and supplies 74.2 117.2
Work in progress 3.5 3.4
Finished goods 153.7 87.0
Tota l 231.4 207.6
11. Non-current receivables
EUR million 2023 2022
Loan receivables from the Group companies 181.3 203.8
Loan receivables from others 0.5 0.6
Other non-current receivables 0.0 2.5
Deferred tax assets 25.0 15.7
Total long-term receivables 206.8 222.6
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.
12. Deferred tax assets and liabilities
EUR million
31.12.
2022
Recognized
in income
statement
Fair
value
changes
31.12.
2023
Deferred tax assets
Provisions and accruals 0.2 0.2
Tax losses carried forward 15.5 9.3 24.8
Cash flow hedges 0.0 0.0 0.0
Tota l 15.7 9.3 0.0 25.0
EUR million
31.12.
2022
Recognized
in income
statement
Fair
value
changes
31.12.
2023
Deferred tax liabilities
Cash flow hedges 2.6 -2.2 0.4
Tota l 2.6 -2.2 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.
95
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
13. Current receivables
EUR million 2023 2022
Receivables from the Group companies
Trade receivables 128.3 151.0
Loan receivables 28.0 151.2
Accrued revenues and deferred expenses 24.7 30.4
Tota l 181.0 332.6
Trade receivables 39.6 35.0
Other receivables 6.9 5.0
Accrued revenues and deferred expenses 10.2 20.6
Tota l 56.7 60.6
Total short-term receivables 237.7 393.2
Significant items under accrued revenues
and deferred expenses
Financial items 11.7 19.7
Taxes 0.2 0.1
Social payments 0.3 0.4
Capital expenditure in factories 0.0 0.0
Goods and services rendered and not
invoiced, subsidiary 12.3 15.3
Group contributions 6.3 5.0
Other items 3.9 10.6
Tota l 34.9 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.
EUR million 2023 2022
Total non-restricted shareholders’ equity 859.4 731.8
Total shareholders’ equity 1,069.0 950.3
Specification of the distributable funds,
Dec 31
Retained earnings
434.1 461.7
Treasury shares
-16.7 -16.6
Paid-up unrestricted equity reserve
238.2 238.2
Profit for the period
203.7 48.4
Distributable funds, Dec 31 859.4 731.8
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.
14. Shareholders’ equity
EUR million 2023 2022
Restricted shareholders' equity
Share capital, Jan 1 25.4
25.4
Emissions
- -
Share capital, Dec 31
25.4 25.4
Share issue premium, Jan 1
182.5 182.5
Emission gains
- -
Share issue premium, Dec 31
182.5 182.5
Fair value and hedging reserves, Jan 1 10.5 -
Fair value changes -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
510.1 522.0
Dividends to shareholders -76.0 -76.0
Changes in accounting principles
-
15.7
Retained earnings, Dec 31 434.1 461.7
Treasury shares -16.7 -16.6
Profit for the period 203.7 48.4
96
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
16. Current liabilities
EUR million 2023 2022
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
Trade payables 12.1 9.8
Accrued expenses and deferred revenues 8.2 26.5
Tota l 20.3 36.4
Trade payables 77.5 52.1
Liabilities to the others 114.5 157.0
Accrued expenses and deferred revenues 28.9 43.1
Tota l 221.0 252.3
Total non-interest-bearing liabilities 241.3 288.6
Total current liabilities 347.6 518.8
EUR million 2023 2022
Significant items under accrued expenses
and deferred revenues
Wages, salaries and social security
contributions 9.6 17.5
Annual discounts, sales 10.2 13.0
Financial items 7.4 2.4
Commissions - 0.1
Warranty commitments 0.9 0.9
Other items 9.1 35.8
Tota l 37.2 69.7
15. Non-current liabilities
EUR million 2023 2022
Interest-bearing
Bonds 99.2 -
Loans from financial institutions 300.0 103.3
Deferred tax liabilities 0.4 2.6
Tota l 399.7 106.0
Non-interest-bearing
Accrued expenses and deferred revenues 0.5 0.6
Tota l 0.5 0.6
Total non-current liabilities 400.2 106.6
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.
97
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
18. Derivative financial instruments
EUR million 2023 2022
Interest rate derivatives
Interest rate swaps
Notional amount 150.0 100.0
Fair value 1.6 3.9
Foreign currency derivatives
Currency forwards
Notional amount 239.8 189.3
Fair value 1.1 1.7
Currency options, purchased
Notional amount 6.7 4.8
Fair value 0.0 0.0
Currency options, written
Notional amount 15.6 11.8
Fair value -0.3 -0.1
Interest rate and currency swaps
Notional amount - 18.4
Fair value - 0.4
Electricity derivatives
Electricity forwards
Notional amount 9.1 6.9
Fair value 0.7 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.
17. Contingent liabilities
EUR million 2023 2022
For own debt
Pledged assets 4.0 4.8
On behalf of Group companies and
investments in associates
Guarantees 112.5 130.9
Pledged assets 2.0 2.0
The amount of debts and commitments mortgaged for total
EUR 98.3 (115.0) million.
Other own commitments
Guarantees - 0.3
Leasing and rent commitments
Payments due in 2024 9.2 5.9
Payments due in subsequent years 8.2 4.0
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.
98
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Signatures for the financial
statements and the report
by the Board of Directors
The auditor’s note
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
Report on the audit of the financial statements has been given today.
Helsinki, February 13, 2024
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Järventausta
APA
99
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Auditor’s report
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.
(Translation of the Finnish original)
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.
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.
100
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Key Audit Matter How our audit addressed the Key Audit Matter
Revenue recognition
We refer to the accounting policies for the consolidated financial statements and the note 1.
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.
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).
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.
• 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.
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.
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.
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.
• 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.
• 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.
101
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
102
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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
103
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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
audited financial statements.
The Board of Directors and Managing Director are also responsible
for such internal control as they determine is necessary to enable
the preparation of ESEF financial statements in accordance the
requirements of ESEF RTS.
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 engagement includes procedures to obtain evidence on:
• whether the tagging of the primary financial statements in
the consolidated financial statements complies in all material
respects with Article 4 of the ESEF RTS
• whether the tagging of the notes to the financial statements
and the entity identifier information in the consolidated financial
statements complies in all material respects with Article 4 of the
ESEF RTS
• whether the ESEF-financial statements are consistent with the
audited financial statements.
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.
Helsinki 29.2.2024
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Järventausta
Authorized Public Accountant
104
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Information on Nokian Tyres’ share
Share data
Market Nasdaq Helsinki
Listing date June 1, 1995
Currency euro
ISIN FI0009005318
Symbol TYRES
Reuters symbol TYRES.HE
Bloomberg symbol TYRES:FH
Market capitalization segment OMXH Large Caps
Sector Consumer goods
Industry Automobiles and parts
Number of shares, December 31, 2023 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 shareholders on December 31, 2023
Number of shares
Number
of share-
holders
% of share-
holders
Total
number of
shares
% of share
capital
1–100 42,086 44.73 1,896,485 1.37
101–500 33,157 35.24 8,497,497 6.12
501–1,000 9,319 9.90 7,176,698 5.17
1,001–5,000 8,143 8.65 17,239,416 12.41
5,001–10,000 857 0.91 6,116,440 4.40
10,001–50,000 451 0.48 8,781,355 6.32
50,001–100,000 39 0.04 2,726,106 1.96
100,001–500,000 25 0.03 6,384,221 4.60
500,001– 15 0.02 80,103,532 57.66
Tot a l 94,092 100 138,921,750 100
Shareholder structure on December 31, 2023
Number of
shares
% of share
capital
Nominee registered and non-Finnish
holders 53,542,135 38.54
Households 42,679,207 30.72
General Government 24,250,308 17.46
Financial and insurance corporations 7,429,468 5.35
Non-profit institutions 3,021,118 2.18
Corporations 7,999,514 5.76
Tot a l 138,921,750 100
Read more: www.nokiantyres.com/company/investors/share/major-
shareholders/
Read more: www.nokiantyres.com/company/investors/share/
share-performance/
Share trading volumes on NASDAQ Helsinki
Jan 1, 2019–Dec 31, 2023, pcs million
20
15
10
5
0
2019 2020 2021 2022 2023
40
30
20
10
0
Share price development on NASDAQ Helsinki
Jan 1, 2019–Dec 31, 2023, EUR
2019 2020 2021 2022 2023
105
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Nokian Tyres plc
Nokian Däck AB Vianor Holding Oy
Nokian Dekk AS Vianor AB
Nokian Tyres AG Vianor AS
Nokian Tyres GmbH Vianor Oy
Nokian Tyres Canada Inc. Nordic Wheels AB
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%
Nokian Tyres
group structure
CORPORATE
GOVERNANCE
STATEMENT
MADE FOR DEMANDING CONDITIONS
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/.
Corporate Governance
Statement 2023
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/.
General Meeting
Board
President and CEO
Management Team
Shareholders'
Nomination Board
Shareholders
Audit Committee
People and
Sustainability
Committee
Nokian Tyres' administrative organization
Auditors
Internal control
External framework
• Finnish Limited Liability
Companies Act
• 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
Internal framework
• Articles of Association
• Code of Conduct
• Charters of the Board of
Directors, the Committees
and the Internal Audit
• Nokian Tyres’ policies,
procedures and practices
Nokian Tyres’ regulatory framework
for Corporate Governance
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
107
108
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
members and the auditor, and their remuneration
• 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.
The Annual General Meeting is held by the end of May of each
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.
Nokian Tyres’ Articles of Association is available on the Company’s
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.
According to the Corporate Governance Code 2020, the Chair
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
109
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.
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
110
Jukka Hienonen
Chair of the Board
(b. 1961)
Member of the Board since 2020.
Member of the People and
Sustainability Committee.
Member of the Shareholders’
Nomination Board.
Education: Master of Science
(Economics)
Main occupation: Professional
board member
Key positions of trust: –
Pekka Vauramo
Deputy Chair of the Board
(b. 1957)
Member of the Board since 2018.
Member of the People and
Sustainability Committee.
Education: Master of Science
(Technology)
Main occupation: President and CEO,
Metso Corporation
Key positions of trust: Member of
the Board: Huhtamäki Oyj (Member of
the Audit Committee), China Office
of Finnish Industries, New Children´s
Hospital Foundation (Deputy Chair)
Veronica Lindholm
(b. 1970)
Member of the Board since 2016.
Chair of the People and
Sustainability Committee.
Education: Master of Science
(Economics)
Main occupation:
Professional board member
Key position of trust: Member of
the Board: Finland Chamber of
Commerce
Susanne Hahn
(b. 1976)
Member of the Board since 2022.
Member of the People and
Sustainability Committee.
Education: University Diploma of
Economics
Main occupation: Founding and
Managing Partner (CEO) of SKV Invest
Key positions of trust:
Member of the Board: Klingele
Paper & Packaging SE & Co KG,
Invest BW-Funding program of
the state of Baden-Württemberg,
HyperPark Ltd., SENTImotion GmbH,
1886Technologies GmbH
Chair of the Board: Zefyron GmbH
Markus Korsten
(b. 1970)
Member of the Board since 2023.
Education: Study of Applied Physics,
Dipl. Ing. (FH)
Main occupation: Vice President
Factory Programs, Northvolt AB
Key positions of trust: –
Board of Directors, December 31, 2023
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
111
Jouko Pölönen
(b. 1970)
Member of the Board since 2021.
Chair of the Audit Committee.
Education: M.Sc. (Econ & Bus. Adm.),
Authorized Public Accountant, eMBA
Main occupation: President and CEO,
Ilmarinen Mutual Pension Insurance
Company
Key positions of trust: Chairman of
the Board: The Finnish Foundation
for Share Promotion. Member of the
Board: The Finnish Pension Alliance
TELA, Finance Finland FFI and
Excellence Finland
George Rietbergen
(b. 1964)
Member of the Board since 2017.
Education: Master of Business
Administration
Main occupation: CEO, Koninklijke
Oosterberg
Key positions of trust: –
Reima Rytsölä
(b. 1969)
Member of the Board since 2023.
Member of the Audit Committee.
Education: Master of Social Sciences
Main occupation: CEO, Solidium Oy
Key positions of trust:
Member of the Board: Ylva Palvelut
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/.
Christopher Ostrander
(b. 1968)
Member of the Board since 2021.
Member of the Audit Committee.
Education: B.Sc. (Mechanical
Engineering); M.Sc. (Engineering
Management); MBA
Main occupations: CEO/Managing
Partner, Premier Staffing Solution,
LLC; Partner/Chairman, Kensington
Hill Capital, LLC; Partner/Chairman,
Cornerstone Consulting
Organization, LLC
Key positions of trust: Kensington
Hill Partners II, LLC, and Kensington
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
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
112
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
Number
of shares
Jukka Hienonen, Chair 25,808*
Pekka Vauramo, Deputy Chair 9,096
Susanne Hahn, Member 4,028
Markus Korsten, Member 2,386
Veronica Lindholm, Member 10,004
Christopher Ostrander, Member 4,660
Jouko Pölönen, Member 23,690
George Rietbergen, Member 7,614
Reima Rytsölä, Member 2,386**
Tota l 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)
Pekka Vauramo (Deputy Chair)
Heikki Allonen (Member until*)
Susanne Hahn
Markus Korsten (Member since*)
Veronica Lindholm
Inka Mero (Member until*)
Christopher Ostrander
Jouko Pölönen
George Rietberger
Reima Rytsölä (Member since*)
* April 26, 2023
100%
100%
100%
100%
100%
100%
100%
100%
92%
100%
100%
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
113
Diversity of the Board of Directors
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.
Age, Persons
30–39, 0
40–49, 1
50–59, 6
60–69, 2
Gender, Persons
Female, 2
Male, 7
Nationality, Persons
Finland, 5
The Netherlands, 1
Germany, 2
USA, 1
Tenure, Persons
1 year, 2
2–3 years, 3
4–5 years, 1
6–7 years, 2
More than 7 years, 1
Independence of the Company, Persons
Independent, 8
Not independent, 1
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
114
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.
The committee assembled five times in 2023.
Attendance at Audit Committee meetings in 2023
Jouko Pölönen (Chair)
Heikki Allonen (Member until*)
Inka Mero (Member until*)
Christopher Ostrander
Reima Rytsölä (Member since*)
100%
100%
100%
100%
100%
* April 26, 2023
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)
Susanne Hahn (Member since*)
Jukka Hienonen
Pekka Vauramo
100%
100%
100%
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.
According to the Committee Charter, the committee controls
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
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
115
116
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
Nokian Tyres holdings of the President and CEO and
legal entities controlled by him December 31, 2023
Number of shares
Jukka Moisio, President and CEO 22,921
Management Team
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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/.
Management Team, December 31, 2023
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
117
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
Strategic risks
Management Business environment
Financial risks
Market Credit
Liquidity
Hazard risks
Processes Controls
Environment Physical damage
Operational risks
Processes Personnel
Legal
Nokian Tyres’
policies, principles,
guidelines and
values
Enterprise risks
• Customer relationships
• Competitors’ actions
• Legislative risks
• Reputation
• Political & country risks
• Brand
• Product development
• Climate change
• Sustainability risks
• Other risks
• Market risk
• Credit risk
• Currency risk
• Interest rate risk
• Liquidity risk
• Funding risk
• Commodity price risk
• Other risks
• Processes
• Systems
• Information security
• Personnel
• Supply chain management
• Product defects
• Legal risks
• Corporate governance
• Tax risks
• Other risks
• Environmental risks
• Physical damage
• Employee safety
• Pandemic disease
• Property loss
• Business interruption
• Third-party liability
• Crime
• Cyber attack
• Other risks
Investor communications
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
119
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
120
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.
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.
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 68,000 24,000
Tota l 1,114,000 1,105,000
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
121
NON-FINANCIAL
INFORMATION
STATEMENT
MADE FOR DEMANDING CONDITIONS
123
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.
Non-Financial Information Statement 2023
Strategy, targets and follow-up
Managing sustainability at Nokian Tyres
Board of Directors (incl. People and Sustainability Committee)
Group’s Management Team
VP, Quality, Sustainability and Supply Operations Business Development
All units and supervisors
Personnel
Action plans and day-to-day leadership of sustainability
Sustainability Steering Group GHG Steering Group
Sustainability
working group
Safety
management
working group
Enviromental
working group
Energy
efficiency
working group
Sustainable
purchasing
working group
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
124
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.
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
125
Areas of sustainability
Products / R&D People Economy Environment Procurement
Nokian Tyres develops and
manufactures ecofriendly, safe
and high-quality tires that reach
their destination safely even under
demanding conditions.
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.
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.
Essential standards, group policies and procedures related to sustainability
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.
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.
Local guidelines and procedures
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
126
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 CO
2
emissions
in line with the four Science Based
Targets
Reducing CO
2
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)
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
127
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:
Very low <0.1 EUR million
Low 0.2–2 EUR million
Medium 3–20 EUR million
High 20–200 EUR million
Very high >201 EUR million
Time horizon:
Short <2030
Medium 2030–2040
Long 2040–2050
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
128
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
Short Medium High Follow-up of emerging
regulation
Medium Low High
Long Low High
Green regulation on aviation and maritime fuels can
significantly increase costs of logistics
Short Low High
Medium Low High
Long Very low High
Further
environmental fees
Additional taxes and duties e.g. EU’s CBAM for fossil
raw materials can increase prices. Carbon taxes.
Certification costs
Short Medium High Participation in industry sector
working groups
Medium Medium High
Long Medium High
Stricter
expectations to
oversight
Increased verification testing of products and emission
measurements, including LCA, EPD
Short Low Medium Follow-up of emerging
regulations
Medium Low High
Long Low High
Technological Climate-related
demands for new
tire technology
A+ rolling resistance tires required for EVs Short Medium Low Anticipation of future
expectations in R&D
development road maps
Medium Medium Low
Long Medium Low
150 km/h max speed for EU – demand for UHP (Ultra
High Performance) tires declines
Short Low Low
Medium Low Low
Long Low Low
Market and
reputation
Market changes Shift from car ownership to mobility-as-a-service i.e.
changing customer base
Short Low Medium Update product and service
offering
Medium Medium Medium
Long Medium Medium
Tire raw materials Replacing fossil-based raw materials with more
expensive renewable and recycled materials
Short High High Road map for selective use of
renewable and recycled raw
materials
Medium Medium High
Long Medium High
Replacing raw materials that have a high carbon
footprint with materials with a lower carbon footprint.
Availability and price of materials
Short High High Selective use of lower carbon
footprint materials
Medium Medium High
Long Medium High
Energy Green energy prices go up due to strong demand Short Low High Long term power purchasing
agreements
Medium Medium High
Long Medium Medium
Raw material and transportation price increases due to
higher energy prices
Short Low Medium Long term contracts
Medium Low Medium
Long Low Medium
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
129
Climate-related risks
Risk group Sub category Examples of concrete risks Time horizon Severity (Financial impact) Probability Adaptation / mitigation plan
Market and
reputation
Tire raw materials Availability of renewable and recycled raw materials can
limit plans for sustainability
Short Low High Aiming for multiple sources
Medium Low High
Long Low Medium
Tire demand Increased demand for all-season tires, decreased
demand for winter tires
Short Low High Update product offering
Medium Low High
Long Low Medium
Reputational risk Deforestation scandals (natural rubber) Short Low Low Co-operation with supply
chain in line with GPSNR
recommendations
Medium Low Low
Long Low Low
Unintentional incorrect sustainability information Short Low Low Systematic information
verification practices
Medium Low Low
Long Low Low
Physical risks Physical Extreme weather
events
Disruptions in logistics and force majeure situations Short Low Medium Alternative transportation
routes
Medium Low Medium
Long Low Medium
Permanent changes in logistics and/or increased force
majeure situations (chronic)
Short Low Low Alternative transportation
routes
Medium Low Low
Long Medium Low
Impact of extreme weather events on natural rubber
producers
Short Low Low Alternative sourcing locations
Medium Low Low Alternative materials
Long Low Low Alternative materials
Extreme
temperatures
Contamination/lower quality of raw materials Short Low Low Multiple supply sources
Medium Low Low
Long Low Low
Extreme weather
events
Disruption on own production and/or distribution Short Low Low Location selection and building
design. Insurances.
Medium High Low
Long High Low
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
130
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 Medium High Material development road map
to reach 50% share of renewable
or recycled raw materials by
2030
Medium High High
Long High High
Innovations with low carbon footprint raw materials Short Medium High
Medium High High
Long High High
Recycling Cooperation with innovative recycling companies Short Low High Screening of opportunities and
widening of cooperation
Medium Medium High
Long High High
Climate-friendly
technology
Lower rolling resistance products. Climate-friendly
production
Short High High Product development road
map. New zero CO
2
factory to
Romania being implemented
Medium High High
Long High High
Energy-efficient
production
Modern machinery used in Nokian Tyres’ factories Short Medium Medium New zero CO
2
factory to
Romania being implemented
Medium Medium Medium
Long Medium Medium
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
Short Low High Innovations and developing
product portfolio to meet future
winter conditions, increasing
consumer awareness
Medium Medium High
Long High High
Increase of all-season tire sales in Europe due to milder
winters
Short High High Developing product portfolio by
deploying knowhow of winter
conditions
Medium High High
Long Medium High
EU's ESG
regulations
Increased share of sustainable raw materials Short Medium High Innovation and early adaptation
of regulations
Medium Medium High
Long Low High
Tire regulation for wear resistance (abrasion) Short Medium High Product development
Medium Low High
Long Very low High
Industrial (heavy)
tires
Existing expertise to provide climate-friendly solutions,
e.g. intelligent sensor technology
Short Medium High Product development
Medium High High
Long High High
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
131
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
Short Medium High Consumer education through
communications and marketing
Medium Medium High
Long Medium High
Policy makers Increased preparedness for new regulations or
incentives
Short Medium High Industry-wide cooperation and
information sharing with decision
makers
Medium Medium High
Long Medium High
Shareholders /
stakeholders
Climate-related sustainable financing and incentives Short Medium High Transparent sustainability
targets, public reporting,
collaboration with financial
institutions, information sharing
with stakeholders
Medium Medium High
Long High High
Regulatory Renewable Energy
Directive and other
climate regulation
More renewable energy available in EU, prices can
decrease
Short Low High Own investments/partnering for
green energy
Medium Medium High
Long Medium High
Global carbon tax or similar would improve the
company’s competitive position
Short Low Medium Further improvement of
corporate carbon footprint
Medium Low Medium
Long Low Medium
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
132
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
• Do no significant harm to any of the other objectives, while
respecting basic human rights and labor standards.
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 CO
2
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.
It must be noted that the Taxonomy reporting scope and
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
133
Nokian Tyres’ approach to calculate the EU
Taxonomy eligibility and alignment:
Net sales
• A: Amount of aligned or eligible net sales coming from tires
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 CO
2
emissions.
• B: Total amount of net sales
• C: Share of net sales within the scope of EU Taxonomy
• C = A/B%
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
expenses deducted by depreciation & amortization
• 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
• I: Share of Capex within the scope of EU Taxonomy
• I = C*G/H%
• Justification: represents share of Capex used for production
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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”)
Economic Activities (1) Code (2)
Turnover (3)
Proportion of
turnover, year
2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
turnover, year
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
Text
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 % E T
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 Y Y Y Y Y Y 2.1%* E
Turnover of environmentally sustainable
activities (Taxonomy-aligned) (A.1) 23.1 2.0% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y 2.1%*
Of which enabling 23.1 2.0% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y 2.1%* E
Of which transitional
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Repair, refurbishment and remanufacturing 5.1. 16.9 1.4% N/EL N/EL N/EL N/EL EL N/EL -
Turnover of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 16.9 1.4% 0% 0% 0% 0% 100% 0% -
A. Turnover of Taxonomy-eligible activities
(A.1+A.2) 40.0 3.4% 57.8% 0% 0% 0% 42.3% 0% -
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities 1,133.6 96.6%
TOTAL 1,173.6 100%
* Year 2022 restated
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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”)
Economic Activities (1) Code (2)
CapEx (3)
Proportion of
CapEx, year
2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
CapEx, year
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
Text
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 % E T
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 Y Y Y Y Y Y 1.1%* E
CapEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1) 2.4 1.0% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y
Of which enabling 2.4 1.0% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y E
Of which transitional
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Repair, refurbishment and remanufacturing 5.1. 0.1 0% N/EL N/EL N/EL N/EL EL N/EL -
CapEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 0.1 0% 0% 0% 0% 0% 100% 0% -
A. CapEx of Taxonomy-eligible activities
(A.1+A.2) 2.5 1.0% 96.0% 0% 0% 0% 4.0% 0% -
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities 249.6 99.0%
TOTAL 252.1 100%
* Year 2022 restated
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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”)
Economic Activities (1) Code (2)
OpEx (3)
Proportion of
OpEx, year
2023 (4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy-
aligned (A.1.) or
-eligible (A.2.)
OpEx, year
2022 (18)
Category
enabling
activity (19)
Category
transitional
activity (20)
Text
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 % E T
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 Y Y Y Y Y Y 1.9%* E
OpEx of environmentally sustainable
activities (Taxonomy-aligned) (A.1) 0.6 1.8% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y
Of which enabling 0.6 1.8% 100% 0% 0% 0% 0% 0% Y Y Y Y Y Y E
Of which transitional
A.2. Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities)
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
EL;
N/EL
Repair, refurbishment and remanufacturing 5.1. 0.0 0% N/EL N/EL N/EL N/EL EL N/EL -
OpEx of Taxonomy-eligible but not
environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2) 0.0 0% 0% 0% 0% 0% 0% 0% -
A. OpEx of Taxonomy-eligible activities
(A.1+A.2) 0.6 1.8% 100% 0% 0% 0% 0% 0% -
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities 35.9 98.2%
TOTAL 36.5 100%
* Year 2022 restated
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
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
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 2020 2021 2022 2023
4.3 3.7 4.1 3.2 4.7
* Number of incidents / 1,000,000 hours worked
Products
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, CO
2
, is the most significant greenhouse gas
generated by traffic. The higher the rolling resistance of a tire is,
the higher the fuel consumption and CO
2
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
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
138
Developing the safety of winter tires
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.
Supply chain
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
CO
2
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 CO
2
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
139
Signatures for the Non-Financial Information Statement
Jukka Hienonen
Susanne Hahn
Veronica Lindholm
Jouko Pölönen
Reima Rytsölä
Pekka Vauramo
Markus Korsten
Christopher Ostrander
George Rietbergen
Jukka Moisio
President and CEO
Helsinki, February 6, 2024
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
REMUNERATION
REPORT
MADE FOR DEMANDING CONDITIONS
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 CO
2
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 CO
2
emissions of its tire factories by more than
50 percent per ton of tire produced. The target was achieved seven
years ahead of schedule.
Capacity expansion at the US and Finnish factories has also
progressed well. Nokian Tyres’ increased production capacity
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 CO
2
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
Chair of the Nokian Tyres Board’s People and
Sustainability Committee
NOKIAN TYRES’ RENUMERATION
POLICY AND INCENTIVE SYSTEM
SUPPORT THE COMPANY’S STRATEGY
AND TARGETS.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
141
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/
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 members
1
100% 112% 106% 123% 119%
President and CEO salaries
and financial benefits 100% 140% 85% 110% 104%
Average salary cost per
employee
2
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 CO
2
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
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
142
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
Segments operating profit
Segments operating profit, %
Net sales and Segments operating profit
EUR million %
2,000
1,500
1,000
500
0
40
30
20
10
0
2019 2020 2021 2022 2023
1,585.4
1,313.8
1,714.1
1,350.5
1,173.6
337.2
190.2
324.8
65.1
17.8
Figures for 2021 and earlier years have not been
restated and include Russia.
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.
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
2019 2020 2021 2022 2023
3.06*
1.04
1.84
-0.86
-2.16
0.55**
Net sales and EBITDA*, EUR million
Net sales
EBITDA
* Depreciations and Amortizations (DA) in EBITDA
includes impairments from 2020 onward.
2,000
1,500
1,000
500
0
2019 2020 2021 2022 2023
1,585.4
1,313.8
1,714.1
1,350.5
1,173.6
441.7
275.9
425.6
170.2
147.0
Figures for 2021 and earlier years have not been
restated and include Russia.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
143
Board member Position on the 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)
Jukka Hienonen Chair of the Board /
Member of the People and Sustainability Committee /
Member of the Shareholders’ Nomination Board
110,000 8,400 3,500 121,900 5,000
Veronica Lindholm Board member /
Chair of the People and Sustainability Committee
75,000 8,400 3,500 86,900 3,409
Pekka Vauramo Deputy Chair /
Member of the People and Sustainability Committee
75,000 8,400 3,500 86,900 3,409
Jouko Pölönen Board member / Chair of the Audit Committee 75,000 8,400 3,500 86,900 3,409
Christopher
Ostrander
Board member/ Member of Audit Committee 52,500 15,400 4,900 72,800 2,386
Inka Mero Board member /
Member of the Audit Committee (until Apr 26, 2023)
- 2,800 1,400 4,200 -
Heikki Allonen Board member /
Member of the Audit Committee (until Apr 26, 2023)
- 2,800 1,400 4,200 -
George Rietbergen Board member 52,500 11,900 – 64,400 2,386
Susanne Hahn Board member/
Member of People and Sustainability Committee
52,500 11,900 2,800 67,200 2,386
Reima Rytsölä Board member /
Member of the Audit Committee
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.
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
144
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.
LTI criteria 2023–2024 weights, %
EBITDA 50%
Increase in passenger car tire
production 40%
Reduction in direct CO
2
emissions 10%
The targets set for Performance Period 2023–2024 of the Nokian
Tyres Performance Share Plan 2023–2027 are divided as follows:
The potential share rewards will be paid partly in shares in Nokian
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
145
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 award
1
Performance criteria
Pay-out of
possible reward
Performance share plan 2021–2023 31,013 62,026 Segments ROCE (50% weight) & segments EPS (50% weight) H1/2024
Performance share plan 2022–2024 27,680 55,360 Segments ROCE (50% weight) & segments EPS (50% weight) H1/2025
Performance share plan 2023–2024 90,882 181,764 EBITDA (50% weight), increase in passenger car tire production volume (40% weight) and
reduction in direct CO
2
emissions (10% weight).
H1/2026
Achievement of set targets 100% 200%
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
Fixed annual
salary (incl. holiday
compensation) Monthly base salary
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
Jukka Moisio 817,614
61,800 until Jun 30, 2023
64,890 as of Jul 1, 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 incentives
1
Target Max Target Max
50% 100% 125% 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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
146
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.
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
147
Remuneration and financial development 2019–2023
2019 2020 2021 2022 2023
Board remuneration, total pay EUR
Jukka Hienonen – 105,800 112,700 126,100 121,900
Veronica Lindholm 56,400 65,500 60,200 91,100 86,900
Pekka Vauramo 53,400 63,100 82,000 90,400 86,900
Jouko Pölönen – – 59,100 90,400 86,900
Christopher Ostrander – – 57,700 68,600 72,800
Inka Mero (until Apr 26, 2023) 54,600 63,100 60,900 67,900 4,200
Heikki Allonen (until Apr 26, 2023) 54,600 63,100 60,900 67,200 4,200
George Rietbergen 54,600 60,100 57,500 67,200 64,400
Susanne Hahn – – – 61,600 67,200
Raimo Lind 76,500 85,600 83,400 5,600 –
Kari Jordan 78,300 87,400 1,800 – –
Petteri Walldén 101,400 6,600 – – –
Reima Rytsölä – – – – 60,900
Markus Korsten – – – – 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 8 8 9 9 9
Average total pay per member
1
66,225 74,213 70,489 81,167 78,911
Index 100.0% 112.0% 106.5% 122.5% 119.2%
President and CEO, total pay EUR
Jukka Moisio May 27, 2020– – 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 1,362,987 1,901,803 1,157,960 1,502,304 1,421,075
Index 100.0% 139.5% 85.0% 110.2% 104.3%
2019 2020 2021 2022 2023
Employee remuneration, average EUR
Salaries, incentives, and
other related costs, EUR million 235.3 224.7 270.7 237.5 232.1
Group employees on average
during financial year 4,995
2
4,859 4,941 3,517 3,754
Average per year, k EUR 47.11 46.24 54.79 67.53 61.83
Index 100.0% 98.2% 116.3% 143.4% 131.2%
Financial development 2019–2023
Operating profit, EUR million 316.5 120.0 268.2 56.7 32.1
Segments operating profit, EUR million 337.2 190.2 324.8 17.8 65.1
Index
3
100.0% 37.9% 84.7% 17.9% 10.1%
EPS, EUR 2.89
4
0.62 1.49 -1.27 -2.36
Segments EPS, EUR 3.04
4
1.04 1.84 -0.86 -2.16
Index
3
100.0% 21.4% 51.6% -43.9% -81.7%
ROCE, % 17.6% 6.0% 13.7% 3.1% 2.2%
Segments ROCE, % 18.6% 9.3% 15.8% 1.0% 4.0%
Index
3
100.0% 34.1% 77.8% 17.6% 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.
**
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
148
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
• Interim Report January–March: April 29, 2024
• Half-year Financial Report January–June: July 19, 2024
• Interim Report January–September: October 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
Report by the Board of Directors Financial Statements RemunerationNon-Financial InformationGovernanceStrategy Review
149
www.nokiantyres.com