Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on NOKIAN RENKAAT OYJ. We currently have 9 research reports from 1 professional analysts.
Frequency of research reports
Research reports on
NOKIAN RENKAAT OYJ
NOKIAN RENKAAT OYJ
Strong Q4 pushed sales and profits up
02 Feb 17
Stronger than expected demand for passenger car tyres resulted in full-year numbers that were higher than we had anticipated. The group’s consolidated turnover increased by 2.3% to €1.39bn and operating and net earnings by 4.9% to €311m and 4.6% to €252m, respectively. Much improved working capital management allowed cash from operations to increase by 29% to €364m. This latter number is the highest since 2012, whereas operating earnings are still lower than what the company achieved in the early years of the current decade. Management proposes a dividend of €1.53 vs. €1.50 paid for 2015.
Nokian Renkaat will dispute the Finnish income tax claim
07 Nov 16
The Finnish tax authorities have argued, for the years 2007-10, that intercompany pricing between the Russian factory and the Finnish sales operation was too high, i.e. profits generated in Finland were ‘artificially’ lowered. The subsequent years have, up to now, not been audited by the tax authorities. The Board of Adjustment of the Finnish Tax Administration has now ruled that the total tax claim of €94m (including penalties and interest), which had been charged to the company’s 2015 P&L and paid in January 2016, has to be reduced by €5m. Management continues to regard the first decision as unfounded and is appealing against the remaining charge of €89m. If the decision is not annulled, the group’s future tax rate will increase from around 17% to a maximum of 22%. We are currently using a tax rate of around 18% for the next few years. Nokian Renkaat has a favourable tax regime in Russia, i.e. high Russian profits do not translate into a high tax charge in the country while high intercompany prices reduce the tax burden in Finland.
CEO steps down and leaves at the end of 2016
27 Sep 16
CEO Ari Lehtoranta intends to pursue new opportunities outside Nokian Renkaat. This is the justification given for this surprising move. He had joined the company only two years ago. Whether this is the reason or whether his February 2016 media interview is the reason, we do not know. At that time he had admitted that the tyre industry had developed special tyres for test purposes in the past. These tyres were different from the ones the industry had sold to end-customers. During the time of his reign, the company’s revenue and profit numbers have fallen considerably. However, this was almost exclusively the result of the Russian crisis, where the share of revenue fell from a good 30% in 2013 to probably less than 15% in 2016.
Fundamentals have deteriorated in Q2
09 Aug 16
Nokian Renkaat’s Q2 was clearly worse than Q1. While the group’s revenue was down by 1.9% to €276m in Q1 and EBIT was up by 4.6% to €51m, these two numbers were -2.4% to €337m and -3.7% to €78m in Q2. Both H1 numbers of €613m (-2.2%) and €128m (-0.6%), respectively, are below our expectations of €627m and €136m. Net earnings after minorities fell by 49% to €101m. However, last year’s Q1 profit number was supported by one-off retroactive tax income of €101m. Excluding this, the Q1 number is up by around 2%, but the Q2 net profit number is down by 5% to €61m. For the full-year, management expects revenue and operating earnings to match last year’s numbers, whereas we had expected a mild recovery in H2.
Q1 revenue poor, but good profits
04 May 16
Revenue fell by 2% to €276m in the last quarter but EBIT was up by 5% to €51m. We had expected €285m and €50m, respectively. At a glance, net profit (-71% to €40m) is a disaster. However, the company was burdened with retroactive tax charges in 2013. Some €101m of these charges were vindicated in Q1 15. Consequently, net profit is up by 16% when this one-off income item is excluded and it is above our projected €38m.
Root & branch review – early margin positive
23 Feb 17
Unilever (ULVR LN, HOLD, T/P 3800p) announced yesterday that it will publish the findings of a root and branch review in April 2017. This is stated as being a result of the recent approach made to them by KraftHeinz (KHC US, N/RO), an offer which quickly lapsed.
A compelling global brand roll-out story
22 Feb 17
We believe that SuperGroup remains one of the most undervalued global brand roll-out stories within the UK retail sector. The stock trades at c20% discount to its UK peers on a 1YF EV/EBITDA basis despite best-in-class revenue growth and profit margins. SuperGroup operates a leading multi-channel proposition, has strong sales momentum across each channel and forecast risk remains on the upside. We initiate coverage on the shares with a buy recommendation and price target of 1898p, implying upside of 27.8% over the prevailing market price.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.
Preparing for growth
27 Feb 17
McBride is halfway through its restructuring plan, having completed the Repair phase, and is now implementing the Prepare part. This should set McBride up for more sustainable and profitable growth. What sets this programme apart from previous attempts is management’s absolute focus on tight cost control and business simplification. This should avoid increased overheads and complexity creeping back into the system as the business starts to grow again.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.