Nokian Tyres (TYRES) Status Update summary

Strategic transformation and manufacturing footprint

• Transitioned away from Russian production, previously accounting for 70-80% of output, and established new manufacturing in Romania and expanded capabilities in North America.

• New state-of-the-art factory in Romania is set to begin commercial sales, targeting 1 million units in 2024 and ramping up to 6 million by 2027-2028.

• Three production facilities in Finland, US, and Romania now support a balanced manufacturing platform, with the US factory investment phase completed and focus shifting to ramping up production and efficiency.

• North American operations have been reorganized, with step two of the Dayton investment nearly complete, targeting full capacity by end of next year.

• Local-for-local production model and latest automation and robotics technology enhance agility, efficiency, and support key markets.

Efficiency, productivity, and cost actions

• Focus on enlarging and renegotiating the supplier base, improving payment terms, and increasing flexibility in procurement and supply chain.

• Centralized functions, elimination of duplicated roles, and optimizing SG&A structure aim to leverage synergies and drive continuous improvement.

• SG&A targeted to decrease to 15% of sales by 2028, with ongoing efforts to streamline costs, improve automation, and digitalization.

• North American warehouse and local production expected to yield significant logistics and supply chain efficiencies.

• Emphasis on operational efficiency, strict cost control, and productivity at all sites to support profitability.

Market development, brand, and sustainability strategy

• Strategic focus on growing presence in Central and South Europe, North America, and new heavy tire segments through new product launches and increased branding efforts.

• Recent product launches, such as the Nokian Seasonproof 2 and SORPAS 801 AS01, highlight innovation and sustainability, supporting premium brand value.

• Investments in sales force, network expansion, and enhanced communication are driving double-digit organic growth in Europe and boosting brand awareness, especially in less established markets.

• Premium brand positioning reinforced by innovation, safety, and sustainability attributes, with high value segments like winter tires prioritized.

• Sustainability remains central to product development and company purpose.