nokian tyres in russia

Report 3 Downloads 63 Views
NOKIAN TYRES IN RUSSIA

Safest tyres for Nordic conditions 29.9.2006 1

DRIVERS BEHIND NOKIAN TYRES SUCCESS

! ! ! ! !

FOCUS BRAND NEW PRODUCTS & INNOVATIONS HIGH INVESTMENTS COMPANY CULTURE

”The original winter tyre” 2

NORDIC CONDITIONS –> STRATEGY > FOCUS

Winter & Forest High growth potential – product segments and market areas Russia, North America, Eastern Europe

3

NEW PRODUCTS & INNOVATIONS

! ! !

Minimum 25 % of sales new products Technological leadership High investment on winter tyre development and testing

4

SELECTED EXAMPLES OF PRODUCT RANGE 2006

Nokian HKPL5 2006

Nokian Hakka 2006

Nokian Forest Rider

2006

Nokian HKPL SUV 5

Nokian HKPL 4

Nokian NRHi

Nokian RSi

2006

2006

Nokian Hakka C

Nokian i3

Nokian Z

Nokian NTR 861

van & cargo

Nokian Country King

Nokian TRI2

Nokian Noktop

5

NEW INNOVATIVE PRODUCT FAMILIES FOR 2006 SALES

Nokian Hakkapeliitta 5 ! 38 sizes = Largest size range on the market

Nokian Hakkapeliitta Sport Utility 5 ! 27 sizes = Largest size range on the market

“The original winter tyre”

6

MAIN INNOVATIONS !

Bear claw stud area improves ice grip and reduces noise and road wear

!

New evolution version of Nokian’s unique square stud

!

Quattrotread construction with four different rubber compounds

7

NET SALES BY PRODUCT AREA 2005

Net sales 686.5 m€ +13.8%, 14. consecutive year of growth

Vianor 31% (33%) Net sales 235.1 m€ (223.9 m€) Change +5.0%

Retreading operations and truck tyres 4% (5%) Net sales 30.1 m€ (31.0 m€ )

Car tyres 55% (53%) Net sales 416.2 m€ (364.6 m€) Change +14.2%

Heavy tyres 10% (9%) Net sales 76.2 m€ (59.6 m€) Change +28.0% (year 2004)

8

OPERATING PROFIT BY PRODUCT AREA 2005 (MEUR)

Heavy Tyres 14.7 m€ (9.3 m€ ) Vianor 5.3 m€ (11.4 m€ )

Car Tyres 101.9 m€ (100.6 m€ )

(year 2004)

9

GROSS SALES BY MARKET AREA JAN-DEC 2005

Sales of Nokian Tyres group (year 2004) North America 11 % (8%) Other Europe

Others 0 % (0%)

Finland 27% (30%)

Sales of Manufacturing units

North America 14% (10%)

(year 2004)

Others 0% (0%) Finland 24% (27%)

13 % (14%) Other Europe 16% (18%) Eastern Europe 4 % (4%)

Russia & CIS 17 % (13%)

Norway 12% (13%)

Sales increased

Sweden 16 % (17%)

Eastern Europe 5% (5%)

Sweden 12% (13%) Russia & CIS 21% (17%)

Norway 8% (9%)

Sales increased

-Nordic countries

+5.5%

-Nordic countries

+2.7%

-Russia and CIS

+44.3%

-Russia and CIS

+44.7%

-Eastern Europe

+21.4%

-Eastern Europe

+17.9%

-North America

+55.9%

-North America

+55.9% 10

RUSSIA UPDATE

SALES DEVELOPMENT IN RUSSIA Growth H1 2006 + 50.2%

Nokian Tyres clear # 1 in premium tyres 4 mpcs

250 200 150 100 50 0 1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

H1 2006

LE 2009

11

RUSSIAN PREMIUM TYRE MARKET IN 2005: market shares

Estimated total A-segment market shares 2005 by sell-in volume

Winter tyres market share > 30%

Pirelli Nokian Tyres

Michelin

8 25

16

Summer tyres market share > 10% 17 Bridgestone

18 17

Continental

GoodYear

12

MARKET PROJECTIONS – CAR AND VAN TYRE MARKET RUSSIA

Market size (mill. pcs), expected scenario

Market value (meur), expected scenario 2500

70

731,4

816,5

943,24

1090,19

1261

1469

1692

2121 60

2000

tot. 30,44

32,93

36,35

40,09

44

49

54

63 23

50

17

1265

1500

14 40

935 770 1000 411,4

509,85

632,5

30 5,04 2,8

277,2 500 70

328,9

176,25

237,5

325

550

127,75

400

20

91,5

384,2

396,1

404,09

404,09

391

374

357

306

10

2006

2007

2008

2009

2010

0 2004

2005

segment C

22,6

segment B

2011

segment A

0 2004

5,98 3,66

23,3

2005

7,48

9,27

11,5

5,11

7,05

9,5

13

16

22

23,77

23,77

23

22

21

18

2008

2009

2010

2011

2006

2007

segment C

segment B

segment A

A = Top ranked branded western tyres B = Secondline western & new Russian brands C = Traditional Russian tyres

13

SALES OF NEW CARS AND CAR PARK FORECAST IN RUSSIA

Sales of new cars

Russian car park forecast 35 30

m units

25 20 15 10 5 0

2000

2001

2002

2003

2004

2005

2006

Sales of new cars to grow to 2 million pcs by 2007 >50% of car sales western brands

14

2007

WHY PRODUCTION IN RUSSIA?

The Russian market is strategically very important for Nokian Tyres

Nokian is one of the most well-known tyre brands in Russia ! Tyres have been exported to Russia since 1964 ! Currently Nokian Tyres is one of top 3 players in the premium segment with a 20% market share (2004 data)

The Russian tyre market is expanding rapidly ! Market growth is estimated at 10 – 15% a year ! Premium segment, which Nokian focuses on, demonstrates higher growth

The factory in Nokia, Finland is running at full capacity

15

WHY PRODUCTION IN RUSSIA?

Benefits compared to production in Finland (2005): ! no import duties => 6-15 euros per tyre (min. 6.25 euros/tyre) ! lower personnel costs => Finland EUR 45,000-50,000 per year => Russia EUR 5,000 per year (inflation 8-12 % p.a.) ! 20-25% lower raw material costs (gap to narrow with time) ! 40% lower energy costs (gap to narrow with time) ! tax holiday for 10 years ! 4 million tyres => 80 MEUR/year benefit in favour of Russia if all benefits fully factored in at 2005 level

16

RUSSIA • strong sales growth • clear market leader with approx. 30% market share in premium car winter tyres • distribution expanded through partner agreements and Vianor shops • two first production lines operate in 3 shifts • production volumes and quality according to targets • installation of the third production line during H2/2006 • construction work of the mixing house and warehouse proceeded as planned ⇒new warehouse taken Into use in June; 19,000 m2 for approx. 600.000 tyres ⇒first mixing line to be taken into use in the autumn 2006 and the second line by the end of the year

• total number of personnel working in Russia 30.6.2006: 308

17

VIANOR IN RUSSIA

! ! ! ! !

Significant increase of Vianor partner network Wider distribution More visibility and market presence Limited investment on distribution chain Growth via partner & franchising concept

Murmansk

18

VIANOR IN RUSSIA - additional contracts made - planned outlets => approx 100 by the - organization established - network expansion accelerating end of 2007 August 3rd, 2006: 39 outlets

Perm Nishnekamsk Ufa Krasnodar Krasnodar

Tjumen

Magnitogorsk

19 10 10

VIANOR OUTLETS 2006, August 3rd TOTAL: 228 OUTLETS (166 own, 62 franchising/partner)

Vianor Finland - 60 own outlets - 7 franchising outlets - 3 retreading plants - personnel ~440

over 10 outlets

Vianor Norway - 43 own outlets - 2 partner outlets - 2 retreading plants - personnel ~260

Vianor Sweden - 54 own outlets - 16 partner outlets - 1 retreading plant - personnel ~360

Vianor Russia - 2 own outlets - 37 partner outlets Vianor Estonia - 6 outlets - personnel ~35

Vianor Latvia - 1 outlet - personnel 7

20

CAPEX AND GROWTH PLAN FOR 2006 => Investments Q1/2006: 14.7 m€ (23.7 m€ ) Total investments for 2006 92 m€ (119.6 m€) RUSSIA ! capacity ramp-up and investments ! progressing according to plan ! 70 m€ in 2006-2007 ! 53 m€ 2006 ! 4 million tyres in 2008

VIANOR EXPANSION

140000 120000 100000

Vianor

! Nordic countries, Russia, Eastern Europe

80000

! own outlets, franchising and tyre hotels

60000

! approx. 10 m€ in 2006 -2007

Sales Companies

Other

Heavy 40000

Vsevolozshk

20000

Car

0

A 2004

B 2005

A 2005

B 2006

21

VSEVOLOZHSK TYRE FACTORY

22

PROJECT HISTORY: WHY VSEVOLOZHSK?

! Proximity to important regional markets in Russia and Nordic countries ! Availability of highly qualified work force ! Attractiveness of the investment climate ! Competence and professionalism of regional and local authorities ! Industrial zone with prepared engineering infrastructure ! Proximity to Finland (transportation of raw materials and equipment, possibility to utilize a large number of technical specialists from the parent company)

23

PROJECT HISTORY: IMPORTANT MILESTONES 2003

2004

2005

11 Feb 5 May 23 June Sep Investigation on possible investment Decision of NT’s Board in Russia on Vsevolozhsk investment

Groundbreaking ceremony

Start of earth works On site

Jan Feb 6 June

Roofing celebration

Start of construction works

2006

22 Sep Oct

Jan 15 Mar

Official Start-up of Commissioning inauguration second of ceremony warehouse production line

Production of first Hakkapeliitta 4 tyres

Start of equipment installation

July

Production start-up

Start of 2 nd stage Construction works

Production of first Hakkapeliitta 5 tyres

24

GROUND-BREAKING CEREMONY ON JUNE 2004

25

OFFICIAL LAUNCH CEREMONY 22 SEPTEMBER 2005

26

VSEVOLOZHSK FACTORY TODAY

! Installed two production lines

! Approx 300,000 tyres were produced in 2005 ! Production is running at full capacity in a 24/7 mode ! Daily output in the range 5,500 – 6,100 tyres/ day ! Vsevolozhsk-produced tyres delivered to customers in key markets since September 2005 ! Number of personnel in Russia in June 2006 – 270 • 210 employed in production, both blue- and white-collar ! Products currently produced: winter tyres ! Nokian Hakkapeliitta 5, Nokian Hakkapeliitta 4, ! Nordman + and summer tyres Nokian i3 ! Production range continuously expanded

27

EXPANSION PLANS

! Warehouse commissioning: July 2006 ! Mixing start-up: autumn 2006 ! Planned production capacity by 2008: 4 million tyres a year • third and fourth production lines to be installed in 2006 – 2007 ! Ultimate planned production capacity 8 million tyres a year • further expansion possible

28

NOKIAN TYRES RUSSIA: ORGANIZATIONAL STRUCTURE 2006 • Nokian Tyres LLC Senior Vice President, Strategy

• Nokian Shina LLC

Antero Juopperi

• Vianor LLC/Vianor SPb LLC Vice President, Sales & Logistics

Kari-Pekka Laaksonen Vice President, Communicat. & IR

General Manager Andrei Pantioukhov

General Sales Manager Dmitry Shmarov

Vice President Production Services

Esa Eronen

Manufacturing Manager Oleg Orlov

Raila HietalaHellman Marketing Communications Supervisor

Vice President, Sales & Logistics

Kari-Pekka Laaksonen

Anna Gorokhova

Finance Manager Irina Ushakova

Vice President, Finance & Control

Anne Leskelä

Vice President, Personnel & Safety

Sirkka Hagman Logistics Manager Dmitry Makarov

HR Manager Lilia Yasakova

Assistant to GM Natalia Belichenko

29

SALES ORGANIZATION 06/2006 Vice-President Sales & Logistics Kari-Pekka Laaksonen

General Sales Manager Dmitry Shmarov Sales Assistant XXX

Regional Sales Manager Irina Surkova M

Sales Analyst Ekaterina Arkhipova

RRep Moscow Vitaliy Maslov

M

RRep Golden Ring Danil Abramov Regional Sales Manager Max Chizhov Regional Sales Manager Kirill Sevrukov

Customer Service Supervisor Svetlana Ivanova

RRep Ural Dmitry Musalnikov RRep Far East Andrei Isachenko RRep Siberia Eugeny Khanko DSD SRep SPb Frol Skipin

Heavy Tyres Sales Mgr Jukka Hautala

Sales Mgr PC2 Artyom Prigoda M

RRep North-West Alexey Krivosheev Car Dealer SRep SPb M. Shalanzev

RSM (2) XXX

Sales CDB Mgr K. Kivelä

BDM Vianor M. Kudrov TBR Manager XXX

Logistics Manager Minna Metsälä

Automotive KAM Oleg Poluyansky M RSM Rodion Savelyk

CS Coordinator Natalia Titova CS Coordinator Alla Demchenko CS Coordinator Olga Tikhomirova

CarDealerSRepMoscow V. Vyrypaev M CS Coordinator Olga Zarechneva RRep Central Russia Kirill Shabinsky RRep Southern Russia V. Kajukov

Sales Coordinator Darja Kuznetsova M

30

31