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Annukka Angeria: Good afternoon, and welcome to Nokian Tyres Q4 and Full Year 2025 Results Webcast. I am Annukka Angeria from Nokian Tyres Investor Relations. Joining me today are Nokian Tyres President and CEO, Paolo Pompei; and Interim CFO, Jari Huuhtanen. As usual, we will begin with the results presentation. And after that, we will open the line for questions. You may have noticed that interconnection with the results, we published also Nokian Tyres' updated strategy and financial targets. These topics will be discussed in detail tomorrow at our Capital Markets Day. And in today's call, we will focus on Q4 and 2025 financial performance and the key drivers behind the results. And with that, Paolo, please go ahead.
Paolo Pompei: Thank you, Annukka, and good afternoon also from my side. Thank you for participating in our quarter 4 release as well as year-end release. And what we will do now in the next few minutes, moving to the agenda. We are moving to the highlights, then we will discuss about our financial performance. Jari will present the business unit performance, and we will close the presentation together with the assumptions as well as the guidance highlights, moving directly to Page #4. It was quite a good year in terms of improvement. We have been improving a lot our performance, and this was possible due to strong price and mix improvement, in particular in the passenger car tires. We've been also very active in releasing new products, mainly related to Central Europe and North American market as new growing areas for our business area. And we've been strengthening a lot our premium positioning through pricing, but also through very effective communication and through dedicated marketing and communication activities. We've also completed a major investment in Oradea. We will discuss about that later on. And we had also a strong improvement of the cash flow, supported mainly by improved working capital, but also by the reduced CapEx that are now gradually getting back to normal level. EBITDA was performing -- remained pretty soft, actually, due to the market decline, in particular in the agricultural and forest tires industry. Moving to Slide #5. We completed the first important step of our expansion in Romania with reaching 1 million pieces produced in our facility in December 2025. So this was actually an important milestone for us because now we clearly move from the investment phase to stabilizing our manufacturing platform. At the moment, our team is extremely busy implementing new sizes and developing new products for the Central European market. We also obtained, at the end of December, the first installment of EUR 32.6 million from the Romanian government as a state aid. As you may remember, we are entitled up to EUR 100 million to be supported by the Romanian government at the end of the full process. Moving to Slide #6. This is also an important highlight when we think about the 2025 development. We've been investing heavily in our brand. We've been investing heavily on our product development. We signed a different partnership. I would like to highlight the one we signed with our brand ambassador, Kimi Räikkönen, that is well reflecting our brand values. And he will be with us also in 2026, supporting our development, being with us during the launch of new products, and supporting us in the development of the new products. We also signed an important agreement with the IIHF organization to -- since we will support the World Cup of ice hockey that will take place in May in Switzerland. As I mentioned before, we were very active in delivering new products. We have developed more than 150 new products in 2025 that will support our future growth in 2026, 2028. And of course, we've been focusing a lot in releasing new products in our growing markets like Central Europe as well as North America to support the demand coming from those markets. Moving to Slide #7. We did also important progresses when we talk about our sustainability journey. We are pretty proud about that because we have clearly set a direction that is getting closer to our long-term financial target -- sorry, the long-term target. We achieved 28% renewable and recyclable material within our products, moving up from 25% that we had in 2024. So a significant improvement that is supporting us towards our target of 50% by 2030. Then we reduced by 38% our CO2 emissions. I remind you the baseline is 2022. This was possible for Scope 1 and 2 also due to the start-up of our operation on that are -- as you remember very well, reflecting CO2 emissions in the current setup. We also reduced significantly our accident frequency from 4.6 last year to 3.7% this year. There is still a lot to do. Obviously, having new operation, we are improving day by day also on the new site. But I think also when we look at this kind of KPIs, we are improving significantly compared to previous year. And now let's move to the financial performance. So moving to Slide #9. Well, we have been navigating in a pretty stable market in 2025. The passenger car tire market was pretty stable both in Europe as well as in North America. We are less exposed to the truck tire market remain stable as well. We are more exposed to the agriculture and forestry tire market that was down 5% in the replacement channel and 10% in the original equipment segment. So the market was not really supporting our journey, but we have been obviously navigating well in these market conditions. I think we will see that the quarter 4 2025 was our best quarter of the last 3 years. While sales remained pretty flat, and this is also driven by the fact that in quarter 4 2024, we were heavily pushing for higher sales. This year, we fully dedicated our attention to improve in terms of profitability. And this is quite visible when we look at our EBITDA improvement in quarter 4. We were up by 30% up to EUR 87.1 million or 20.9% in the relation to sales. Our segment operating profit also increased significantly by 43%, up to EUR 51.5 million or 12.3% of net sales. This was mainly driven by strong price repositioning in the passenger car tire. And of course, in quarter 4, we had also some support from lower raw material costs. We had also, I would say, a strong improvement in terms of operating profit, up to EUR 35.1 million. This is 128% more than previous year or 8.4% of net sales. Looking at the same numbers for the full year, moving to Slide #11. We were able to increase sales by 7.2% with comparable currency, and we were able to grow actually in all the regions. Our segment EBITDA was EUR 222.2 million, or plus 20% compared to previous year. It was 16.2% of net sales. Segment operating profit increased by 28%, up to EUR 91.3 million or 6.6% of net sales. And again, same as in quarter 4, strong price increases or price repositioning, and of course, in the full year, positive effect, obviously, coming from the sales volume. The operating profit was EUR 35.8 million at the end, a significant improvement compared to previous year or 2.6% of net sales. The Board of Directors has just proposed a dividend of EUR 25 per share -- EUR 0.25 per share to be paid in April 2026. Moving to Slide #12. As I mentioned before, we were able to grow actually in all the geographical areas where we operate. We were able to grow in the Nordics, in Central and Southern Europe, as well as in North America. I would say the growth in North America of 16.6% was really a good performance in terms of growth, in particular, when we talk about price and repositioning in the North American market. Moving to Slide #13. I would like to highlight when we talk about this slide about 2 things, very, very important development. The first one is the net debt -- the interest-bearing net debt that was EUR 664 million at the end of 2025. This was actually much better than what we were also estimating at the end of -- previously at the end of quarter 4 ourselves, but that was turning really in the right direction. As well as the capital expenditure was EUR 126.9 million, almost EUR 127 million. We need to remind you, obviously, this include EUR 32.6 million state aid from the Romanian government. So we were approximately at EUR 160 million in total. So moving significantly down from previous year. Cash flow also was improving, both in the quarter as well as year-to-date. So let's look at the cash flow in more details in the following slide in Slide #14. As you can see, we were able to improve the change in cash flow by over EUR 200 million. This was obviously driven by an improvement of the EBITDA, but also an important improvement of the working capital despite the growing sales. And of course, we were investing significantly less than previous year. Financial cost has gone up clearly by EUR 16 million. And then, of course, we paid a dividend of EUR 0.25 during 2025. And our debt has gone up compared to previous year. So I would say also in terms of cash development, we are improving significantly our position, and we see actually a better outlook for 2026. Moving to Slide #15, you can clearly see that we have now completed a strong investment phase that was approximately EUR 800 million between 2023 to 2025, and CapEx now is returning to a normal level in line with the depreciation. We are estimating and anticipating approximately EUR 130 million to be invested in 2026. And now stop here, and I would like to ask Jari to comment the business unit performance.
Jari Huuhtanen: Thank you, Paolo, and good afternoon also from my side. I'm starting from Page 17. Passenger Car Tyres in the fourth quarter, we continued sales and profit growth. Our net sales was EUR 244.1 million and net sales increased by 3.9%. Average sales price with comparable currencies improved, and the share of higher than 18 inches tires increased significantly. Segment operating profit was EUR 32.3 million or 13.2% of the net sales comparing to last year, EUR 13.6 million or 5.7%. Segment operating profit improved due to price increases, favorable product mix, and lower material costs. In the next page, we can see Passenger Car Tyres net sales and segment operating profit bridges. Net sales in the last quarter increased by EUR 6 million. And again, we can see very positive improvement coming from price/mix, plus EUR 20 million. On the other hand, sales volume was down by EUR 11 million, and then some headwind, mainly from the U.S. dollar, minus EUR 3 million. In the segment operating profit bridge, the same positive price/mix, plus EUR 20 million. And now first time in 2025, we had positive contribution coming from the material costs, plus EUR 6 million. Sales volume in the operating profit was slightly down, as well as SG&A, otherwise quite neutral changes comparing to the last year. In Page 19, we have Passenger Car Tyres net sales components and quarterly changes. In price/mix, we can see that this was now third quarter in a row that we reported quite significant positive change comparing to the last year numbers. In the fourth quarter, price/mix positive impact was 8.5%. Volume change was minus 4.6% and currency minus 1.4%. Moving to Page 20, Heavy Tyres. In the last quarter, lower volume affected net sales. Net sales was EUR 60 million and the change in comparable currencies, minus 2.8%. And net sales decreased caused by lower volume of forestry tires. Segment operating profit was EUR 6 million or 10% of the sales, and profitability declined mainly due to lower volume, weaker product mix, and inventory valuation, which had a positive impact on last year numbers. And Vianor in the last quarter, operating profit was stable. Net sales was EUR 132.4 million and net sales with comparable currencies decreased by 2.7%. And sales was impacted by the mild winter in the last quarter. Segment operating profit was EUR 11.2 million or 8.5% of the net sales and segment operating profit was exactly at last year level, EUR 11.2 million. Then handing over back to you, Paolo, with assumptions and the guidance.
Paolo Pompei: And before we move to the guidance, I would like to say, first of all, thank you to the whole team. This was for us an important year of transformation, moving really from managing a strong transformation to create -- start to create value -- future value for our own shareholders. This has been well managed by the team who has been working hard in multiple dimensions, and we'll be happy also tomorrow to talk about our journey and how we will be able actually to improve further our performance for the years to come. But let's move to the assumption and guidance that is also very, very important. We are expecting for 2026 net sales to grow compared to previous year and our segment operating profit as a percentage of net sales to be between 8% to 10%. So we are becoming more specific about our guidance because we want to make sure that you will be able to follow our own journey with more information and more precise information now that our journey is becoming more and more reliable and more and more easy to manage when we look at our future development. The tire demand from the Nokian tire market is expected to remain pretty flat in 2026. So we are not expecting the market to grow significantly. Of course, the development of the global economy, as well as the geopolitical situation or trade tariff is creating some uncertainty and some volatility. But obviously, the improvement is supported by new high-performing product, price mix, and, of course, efficiency improvements that will be still having a strong effect in the years to come. Before to move to the question and answer, I would like to remind you that we have appointed a new CFO. He will start latest 15th of April 2026. So we will have the opportunity with Jari to keep working together on the quarter release. Timo Koponen is the appointed new CFO. He will be -- he has an extensive experience in the financial operation. He has been in important companies such as Normet, where he is currently the CFO, Lamor Corporation, but also he had an extensive career in Wärtsilä, Hackman as well as Konecranes at the beginning of his career. So we'll be happy to present Timo as soon he will be able to join us latest, as I said, by the 15th of April. And we remind you that tomorrow, we will held our Capital Market Day. This will be done in -- actually in here in Helsinki in the Sanding Up Hotel. So you are really welcome to join, and we hope to see you tomorrow at 2:00 p.m. to discuss together our new financial targets as well as our new journey up to 2029. We can now move to the question and answer, and we look forward to your questions.
Operator: [Operator Instructions] The next question comes from Akshat Kacker from JPM.
Akshat Kacker: I have 3 questions, please, and I will take them one by one, if possible. The first one on end markets, and what your peers have been saying recently. So Goodyear last evening talked about global tire shipments being down 10% in the first quarter. And I understand they do have exposure to the truck business, and there are some weather-related impacts in the U.S. But could you just give us a download on how you're seeing the inventory situation in both Europe and North America? And how do you expect the start of the year in terms of sell-in volumes, please?
Paolo Pompei: Thank you very much for your question. Obviously, comparing Nokian Tyres with Goodyear and other companies, I need to remind you that, obviously, we are mainly focusing on specific segment, while Goodyear obviously is exposed to a larger scope. In general, we see, I would say, a healthy development of the inventory. So we believe that from the pure dealer wholesaler point of view, the inventory were pretty stable during 2025. And we see a pretty stable also consumer demand. So this is not really affecting our own business. Of course, when we look at the quarter 4 performance of Nokian Tyres, in particular, we should not forget winter came pretty late. So in some way, we were affected by a lower, let's say, a mild winter season in quarter 4. Fortunately, since, I would say, before Christmas, then winter started to come and started to come heavily in Europe, both in the Nordics as well as in North America. So this is also making us confident about the inventory development of 2026 because obviously, a stronger winter for a company like us that is strongly exposed to the winter tire business or all-season business. It's obviously something that is helping the inventory to be released to the end user. And consequently, we can anticipate that from the inventory point of view, we don't see major issues in 2026.
Akshat Kacker: And the second question I have is on your top-line assumptions. When I think about 2026, you are talking about top-line growth. Could you just help us understand that better? What kind of growth assumptions are you working with, either in the passenger car business or for the group overall? And what does that mean in terms of volume growth for the business in 2026? That's the second question, please.
Paolo Pompei: Thank you also. This is a very important question. When we say growth, we are expecting 1-digit growth. This is the best visibility we have at the moment, and it's also reflecting our strong focus on profitability improvement. So what I mean is that we are not going to look for market share growth. We are not going to fight for a higher volume as far, we don't see those volume will deliver value. This was the journey, as you know very well, that we started in 2025, and we will keep carrying this journey in 2026. So when we say growth, we are, at the moment, indicating single-digit growth.
Akshat Kacker: And the last question is on the definition of the segment operating profit and operating profit. The question is on the IFRS exclusions. I thought the idea was to move away from any excluded costs in the medium term. Could you just tell me your recent view on how you want to tackle these exclusions going forward? And what do you want to book in those one-off costs, please?
Paolo Pompei: Yes. We have anticipated several times that we will gradually go away from the exclusions concept. Obviously, we'll do it gradually because last year, we had EUR 70 million exclusions in 2024. In 2025, we had EUR 55 million exclusion. So we will go gradually down when we are -- we will discuss tomorrow our financial targets. Obviously, our financial targets will be very close to segment operating profit equal to operating profit. This is obviously a gradual process. So you can expect a gradual reduction, obviously, will carry a gradual reduction will carry on, obviously, up to 2027, 2027-2028.
Operator: The next question comes from Thomas Besson from Kepler Cheuvreux.
Thomas Besson: I have a few questions. I'd like to start with just a follow-up on the previous question. It's very difficult for analysts to make a forecast if we don't know what your exclusions are going to be. Can we assume, as you said, that in '29, it should be almost 0 that you're going to see 2026 exclusion go down by EUR 15 million or EUR 20 million, the same way the decline between '24 or '25? Or is it not going to be a linear decline?
Paolo Pompei: I think your assumptions are correct. Obviously, you will -- I mean, at the moment, we are not planning any exclusion. There are no specific projects that will come up later on. But at the moment, we are not planning any specific exclusion, for obviously, we will go down EUR 15 million, EUR 20 million year-on-year to get obviously to 0. So your calculation and your assumptions are pretty correct.
Thomas Besson: Second question, I'd like you to discuss about the [indiscernible] market and how you see that developing for -- no in 2026. Of course, you have a specific exposure to forestry and ag in specific markets. Do you see these end markets showing signs of a turning point or not yet? Are you assuming in your 2026 guidance that the end markets in the [indiscernible] segment grow or not?
Paolo Pompei: This is a very good question. Obviously, you know very well that the agriculture and forestry market has been cyclical since I was born, meaning that it is up and down. It's been always quite difficult to see when the market was going up and down. Clearly, this cycle is longer than usual. So I'm expecting the market to recover within 6 to 12 months. Obviously, this is my estimation based on my experience in that industry. And as I said, the last cycle has been pretty long. 2025 was a difficult year for the -- particularly for the forestry machinery producers. And as you know very well, we are strongly exposed to those guys. at this moment, I don't say in the immediate, let's say, in quarter 1, any strong improvement, but we should expect that something will improve starting already from the second half of 2026. Again, this is the best estimate we can do based mainly on the analysis of the historical cycles.
Thomas Besson: I think you have a very good experience of these end markets. So that's very helpful. Could you also please discuss the timing of the Romanian state aid? I think you had about 1/3 of what was expected in 2025. Should we assume that to be 1/3, 1/3, 1/3 over '26, '27 as well? Or are you going to get the remainder of the aid so EUR 67 million, EUR 68 million in 2026?
Paolo Pompei: Well, obviously, please remind that these incentives are not fixed. What I mean is up to EUR 100 million, and this will be dependent on the final total investment level. This is very important, we remember. So it can be any value close to EUR 100 million, but obviously, or lower than EUR 100 million, depending on the final calculation of the investment level. Clearly, we will apply for -- we have a routine of applying for those incentives year-on-year. So we could expect a second payment within 2026. But I will be very careful in giving you a strong estimation about this because, as you know, we are talking about, obviously, I told you up to the end of last year, we didn't know exactly when those incentives were coming. Finally, they came in December. The Romanian government was extremely reliable in respecting the deadline of 2025. But again, there is a strong bureaucratic process that we need to run to get those incentive on time. But the best estimation we can do will be that, obviously, the second part will come based on our investment level in 2026, and eventually the last part in 2027.
Thomas Besson: I have last question. Could you comment on the evolution of pricing in Q4 and year-to-date, given that raw materials have become finally, as you are saying after 2 or 3 years, a support toharmakers' earnings. Do you see any signs of price erosion? Because oil prices have picked up again and some of the materials are going up again, pricing have held up very well.
Paolo Pompei: Yes. I mean, obviously, we've been focusing a lot on repositioning our own product in 2025. So we are expecting this effect to roll over in 2026. The raw material, I would say, at the moment, we see the raw material trend favorable, but also because we have been doing a lot, we have been working hard and really improving our raw material cost, both in terms of negotiating new agreements with our suppliers, but also in terms of better utilization of the material in our own products as well as in our own manufacturing facilities. So at the moment, of course, it's very difficult to anticipate in February what will happen for the full year. When we talk about raw material, they can go up and down. And at the moment, we see raw material pretty stable. And we see obviously a positive rollover in 2025 of the good job done by the team in 2026, rewarding the good job done by the team in 2025.
Operator: The next question comes from Artem Beletski from SEB.
Artem Beletski: Still 2 questions from my side. So the first one is relating to passenger car tires and seasonality on that front. How we should think about Q1? Because looking at past years, you have been unprofitable in this business, but I think that those years are not that representative what comes to 2026 and the Q1 development. So maybe some inputs you can provide on that front? And then the second question is relating to price/mix outlook for this year. So it has been really strong also in Q4, up almost 9% year-over-year. Some pricing effects are likely to be fading away gradually, but you're also introducing new products. So what is the picture when it comes to price/mix outlook for 2026? So those are my 2 questions.
Paolo Pompei: Thank you very much for your question. I start with the seasonality. Historically, even when I was not working in Nokian Tyres, I was observing Nokian Tyres from outside. Nokian Tyres has been always having, I would call it, growing seasonality, meaning that quarter 1 is normally very slow, quarter 2 is improving. Quarter 3 and quarter 4 obviously are improving further. This is mainly reason by our strong exposure to the winter tire business because in quarter 1, mainly we produce, and in quarter 2, quarter 3, and quarter 4, we start to release all the stock that we have produced to face the new season. We have obviously -- if you look at the performance of the last 2 years, we were negative both in 2024 as well as in 2025. Clearly, we are here to improve day by day and quarter-by-quarter. So this is really reflecting our long-term plan to improve quarter-by-quarter compared to previous year. But of course, there will be always some seasonality related to the fact that we want and we are, and we will be strongly exposed to the winter tire seasons. About pricing, obviously, we did -- the team made a very good job in 2025. That was my first priority since the very beginning to make sure that we were getting back to the level where we should be in terms of price positioning, in particular, in the new markets like Central Europe and North America. And I would say that we will see this carryover in 2026 because obviously, we should maintain this value within the company. New products that we are going to release, actually, we are very excited about the new product that we are going to release very soon in -- starting from March, and particularly for the Nordic market, will, of course, present an upgrade -- that is my -- I would say, so we are expecting an improvement in terms of positioning and mix. Obviously, as you can appreciate, we cannot make any comment about price development from now to the remaining part of the year for competitors' rules.
Artem Beletski: Yes. That's very clear. But I have still one follow-up question relating to the start of this year. So we indeed have seen really no winter weather conditions in Nordics, in Central Europe, and in North America. Should we anticipate any tailwind from this weather picture during the season or basically in Q1? Or should it be the impact for, let's say, Q2, Q3, ahead of the season when dealers are taking in new tires?
Paolo Pompei: I think the development of the winter this year is having a positive effect on the new season when we will start because obviously, this will -- at the moment, what we see is probably the inventory of our own customers are going down because obviously, the winter has been pretty strong, I would say, everywhere in Nordics, in Europe, in North America as well. So their inventory are now going down, and this will be a very -- I think, is a very good news for us for the new season that will start. So we are talking about really quarter 3 and quarter 4 of 2026. This is the way I see it at the moment. So you should not expect any effect today because now today is the time for our customer really to reduce their inventory.
Operator: The next question comes from Pasi Väisänen from.
Pasi Väisänen: Well, I would like to start with the regulation. And so what is the latest information regarding these possible antidumping duties against the Chinese tires? And if those will be kind of set, could it even affect Nokian Tyres offtake agreements, those tires coming from China to Europe? And secondly, what could be the realistic sales volume forecast for your Romanian factory this year, and also on next year when looking at this ramp-up schedule?
Paolo Pompei: Thank you. Two very important questions. About regulation, obviously, you read the news as we read the news at the moment, the antidumping investigation is moving on. There will not be apparently any preliminary duties that are coming from the preliminary investigation. So I think the investigation will need to be completed. And then obviously, the European authority will decide based on the findings they will see during the investigation. There is no effect really now, and we don't expect any effect for the future in Nokian Tyres because obviously, we are mainly now sourcing from different countries than China. So obviously, the impact on Nokian Tyres, considering the latest news, meaning that there are no duties in the immediate future, will not have an impact on us because in the wild time, we have been obviously moving our sourcing to other countries that are not today under investigation. I said very clearly as well that with the ramp-up of Oradea, of course, we have been in-sourcing a lot of products that before we had, by definition, had to produce in partnership with other suppliers. Moving to the question about Oradea. Clearly, Oradea is set to now to increase significantly the production. This will be strongly dependent on the development of the sales in Central Europe. We should expect anyway, for Oradea to, in some way, double the production volume compared to this year. And -- but will be very difficult. We should be more precise during the year to give you an exact estimation of where we are going to land. It's all dependent on sales development, and the success of the new products that we are expecting will deliver value to the customers.
Pasi Väisänen: And maybe still one detail regarding the ramp-up costs. So if I remember right, they were close to EUR 10 million in the third quarter, now roughly EUR 16 million. So which figure of these should be used as an estimate for the first quarter or the run rate for the full year?
Paolo Pompei: As we mentioned before, we are expecting -- I can guide you for the full year because obviously, the ramp-up cost is directly proportional to the ramp-up of the production as well in Croman in Romania. As you know, in quarter 4, we have been moving from 5 days to 7 days, 24-hour shift. So this is an important step for us in order to get to a normal production level and to increase our production output. So obviously, in quarter 4, they were a little bit heavier than in quarter 3. We said before that you should expect year-on-year a reduction of our exclusion of the region of EUR 15 million, maximum EUR 20 million year-on-year moving forward up to 2028 up to 0. So this is more or less our best estimate at the moment.
Operator: There are no more questions at this time. So I hand the conference back to the speakers.
Annukka Angeria: It seems that there are no further questions. So it is time to conclude this call. Thank you, Paolo and Jari, and everyone who joined us online. And hopefully, we will meet many of you tomorrow at our Capital Markets Day. For now, goodbye, and enjoy the rest of your day.
Paolo Pompei: Thank you very much. Looking forward to meet you tomorrow.
Jari Huuhtanen: Thank you.