Published:

2009-11-03 07:00:00 CET

Registered:

2009-11-03 07:00:02 CET

REGULATED INFORMATION

Finnish

English

Nokian Renkaat - Interim report (Q1 and Q3)

NOKIAN TYRES INTERIM REPORT FOR JANUARY-SEPTEMBER 2009: SEASONAL IMPROVEMENT, RESTRUCTURING IMPLEMENTED - MARKET HEADWIND STABILIZED

Nokian Tyres Interim Report for January-September Nov 3, 2009, 8:00 a.m.

NOKIAN TYRES INTERIM REPORT FOR JANUARY-SEPTEMBER 2009: SEASONAL IMPROVEMENT,
RESTRUCTURING IMPLEMENTED - MARKET HEADWIND STABILIZED

Nokian Tyres' net sales decreased by 32.3% to EUR 550.8 million (EUR 813.2
million in Jan-Sep 2008). Operating result amounted to EUR 61.2 million (200.5)
and Earnings per share was EUR 0.23 (EUR 1.22).

Sales and operating result improved clearly in the third quarter compared to
previous quarters but were still down versus previous year. Sales and operating
margin improved compared to previous quarters due to preseason deliveries of
winter tyres, restocking of heavy tyres by OE customers, production
restructuring and reduced raw material cost.

In January-September cash flow improved as planned by EUR 162.6 million
year-over-year due to cost cuts, lower investments and reduced trade
receivables. Wages and salaries were cut by EUR 30.6 million and fixed costs
excluding salaries by EUR 17.5 million compared to the corresponding period a
year earlier. Trade receivables reduced by EUR 189.9 million year-over-year.
In order to adapt the production to seasonal changes in demand Nokian Tyres
plans to temporarily stop the car tyre production in the Nokia plant for 17
working days starting on December 7, 2009. Year-end production will also be cut
at the Russian plant.

Key figures, EUR million:
7-9/09 7-9/08 1-9/09 1-9/08 2008

Net sales 204.1 282.8 550.8 813.2 1,080.9
Operating result 43.7 71.9 61.2 200.5 247.0
Result before tax 32.1 67.5 26.7 185.9 173.8
Result for the period 27.5 52.4 29.0 151.5 139.9
Earnings per share, EUR 0.22 0.42 0.23 1.22 1.12
Equity ratio, % 50.5 51.6 54.8
Cash flow from operations,
(Cash Flow II) -37.5 -141.8 -126.1 -288.7 9.5
RONA, % (rolling 12 months) 8.6 26.0 20.5
Gearing, % 72.0 63.6 41.0
Kim Gran, President and CEO:

“Uncertainty in the market continues but the strong headwind has changed to a
more stable breeze. The underlying drivers for the economy on Nokian Tyres'
core markets seem to have stabilized and tyre demand shows some signs of a slow
recovery.

Third quarter sales and operating profit of car and also heavy tyres were
satisfactory when reviewing them against the market situation. Seasonal demand
and preseason sales were in line with plans and helped to improve productivity.
The launch of our new winter tyre, Hakkapeliitta 7, has been a great success
and has helped to maintain healthy prices and strengthen our market leader
position on our core markets. Our market shares improved on all markets except
in Russia where we maintained our market leader position.

Russian market is still weak, although our customers have been showing
inventory meltdown. In spite of some good signs in sales, we will still base
our actions on a gradual rather than a rapid recovery.

The streamlining measures aiming at a lighter cost structure and full
utilization of a lower cost production in the Russian plant have been
implemented. Our cost saving program of annual sustainable savings of
approximately 50 million euros is running ahead of plan. Raw material cost has
decreased in line with our estimates and will be down approximately 20% in H2
versus H1 of 2009.

The results of our actions are already visible and will have a strong impact
for years to come. This year we will provide significantly stronger cash flow
by reducing inventory and receivables by more than 100 million euros and
cutting investments by 96 million euros compared with 2008. To support the
strong cash flow, we plan to stop the car tyre production in Nokia for 17
working days in the end of the year and also to stop production in Russia at
year-end. This will cut margins in Q4 versus Q3/2009.

A full collection of our receivables in Russia and CIS by the end of the winter
tyre season is our target. Overdue trade receivables have decreased roughly by
60% compared to year-end 2008 and payments are running in as planned.

A strong growing distribution, good seasonal logistics, local low cost
production inside duty borders and new products will give us a good chance to
strengthen our market leadership in the core markets and to return to
profitable growth already in 2010.”

Market situation

The sharp downturn in the global economy that started in late 2008 continued
during the review period. In key markets this resulted in a clear decrease in
car sales and machine manufacture. The aftermarket sales volume for passenger
car tyres declined in the Nordic countries by an estimated 12% and elsewhere in
Europe by 4%. Tyre deliveries shrank drastically to less than half in Russia
and the CIS countries, trailing the declining economy and reduced car sales.

As car manufacture volumes decreased significantly, there was an excess supply
of summer tyres which resulted in price erosion of some volume sizes. USA
introduced a duty program in September for the next three years (35%,30%,25%)
for car tyres manufactured in China. This is expected to put further pressure
on economy segment summer tyre prices on all non-US markets.

Prices for winter tyres have resisted the general price erosion better than
summer tyres. In early 2009, tyre manufacturers implemented significant price
increases in order to offset the currency devaluation in Russia, Ukraine,
Sweden and Norway. Despite some sales of carry-over stocks from 2008, prices
have increased in local currencies. Heavy snowfall in October has boosted sales
in Central Europe and an earlier consumer sales start in the Nordic countries
has created shortage in the market of some tyre dimensions.
The truck tyre market declined in Europe by roughly 30%, and the demand for
special heavy tyres shrank to less than half of the previous year. Overall, the
market environment has become more competitive.

Raw material prices dropped significantly at the end of 2008 and the first half
of 2009 but carry-over stocks and contracts penalized tyre industry results
early 2009. Raw material suppliers' requests for price increases have
intensified during second half, however, having small effects on industry
profits in H2/2009.

July-September 2009

In the third quarter of 2009 Nokian Tyres Group recorded net sales of EUR 204.1
million (282.8), showing a decrease of 27.8% on the corresponding period a year
earlier. Sales decreased in the Nordic countries by 19.1%. In Russia and the
other CIS countries sales decreased by 53.4% and in North America by 14.5%. In
Central and Eastern Europe sales grew by 4.7%.

Raw material cost (eur/kg) in manufacturing in the third quarter were down by
20% year-over-year and down by 15% versus the second quarter of 2009. Fixed
costs were EUR 62.1 million (73.0), accounting for 30.4% (25.8%) of net sales.

Nokian Tyres Group's operating result was EUR 43.7 million (71.9). Net
financial expenses were EUR 11.7 million (4.4). Financial expenses include EUR
2.0 million (1.9) in non-cash expenses related to convertible bonds. Net
financial expenses include EUR -5.5 million (2.6) of exchange rate differences.
Since 1.1.2009 exchange rate differences contain interest rate differential
from foreign currency derivatives. Comparison information is modified
accordingly.

Result before tax was EUR 32.1 million (67.5). Result for the period amounted
to EUR 27.5 million (52.4), and EPS was EUR 0.22 (EUR 0.42).

Income financing after the change in working capital, investments and the
disposal of fixed assets (cash flow II) was EUR -37.5 million (-141.8).

January-September 2009

Nokian Tyres Group's net sales in January-September totalled EUR 550.8 million
(813.2), signifying a 32.3% year-over-year decrease. In the Nordic countries
sales decreased by 22.2% representing 43% (37%) of the group's total sales. In
Russia and CIS sales fell by 63.1% and formed 22% (40%) of the group's total
sales. In Central and Eastern Europe sales was down by 0.2% year-over-year
representing 24% (16%) of the group's total sales. In North America sales grew
by 11.5% and was 11% (7%) of the group's total sales.

Sales of passenger car tyres were down by 34.5% representing 64% (67%) of the
group's total sales. Heavy tyres' sales declined by 55.3% and was 6% (9%) of
the group's total sales. Vianor's sales fell by 12.0% forming 27% (21%) of the
group's total sales. The sales of Other operations was down by 21.3%
representing 3% (3%) of the group's total sales.

Raw material cost (eur/kg) decreased by 1% year-over-year in the first nine
months, penalized by raw material purchases in 2008. Fixed costs amounted to
EUR 199.0 million (221.3), accounting for 36.1% (27.2%) of net sales. Total
salaries and wages were EUR 93.9 million (124.5) representing a saving of EUR
30.6 million year-over-year.

Nokian Tyres Group's operating result was EUR 61.2 million (200.5). This was
negatively affected by the IFRS 2 -compliant option scheme write-off of EUR 9.0
million (13.5) and credit loss reserves of EUR 4.0 million (5.4).

Net financial expenses were EUR 34.5 million (14.6). Net Interest Expenses were
EUR 14.0 million (13.7) including EUR 5.7 million (5.4) in non-cash expenses
related to convertible bonds. Net financial expenses include EUR -20.5 million
(-0.9) of exchange rate differences of which EUR -10.3 million (-2.0) were born
in the first quarter of the year due to exceptionally high hedging costs
related to Russian rouble and Kazakhstan tenge. Since 1.1.2009 exchange rate
differences contain interest rate differential from foreign currency
derivatives. Comparison information is modified accordingly.

Result before tax was EUR 26.7 million (185.9). Result for the period amounted
to EUR 29.0 million (151.5), and EPS was EUR 0.23 (EUR 1.22).

Return on net assets (RONA, rolling 12 months) was 8.6% (26.0%). Income
financing after the change in working capital, investments and the disposal of
fixed assets (cash flow II) was EUR -126.1 million (-288.7).

The Group employed an average of 3,536 (3,766) people, and 3,259 (3,877) at the
end of the period. The Vianor tyre chain employed 1,341 (1,506) people and
Russian operations 640 (671) people at the end of the period.

Financial position by September 30, 2009

Gearing ratio was 72.0% (63.6%). Interest-bearing net debt amounted to EUR
521.2 million (521.6). Equity ratio was 50.5% (51.6%).

The Group's interest-bearing liabilities totalled EUR 537.5 million (535.4) of
which current interest-bearing liabilities amounted to EUR 322.8 million
(239.8). The average interest rate of interest-bearing liabilities was 3.35%
(5.34%). The average interest rate of interest-bearing liabilities was 1.97%
(3.82%) with calculatory non-cash expenses related to the convertible bond
eliminated.
At the end of the review period the company had unused credit limits amounting
to EUR 255.6 million of which EUR 186.0 million were committed. The current
credit limits and the commercial paper program are used to finance inventories,
trade receivables, subsidiaries in distribution chains and thus control the
typical seasonality in the Group's cash flow due to changes in the working
capital.

The multicurrency revolving credit facility of EUR 180 million due April 2010
will be refinanced and signed in the last quarter of 2009. The arrangement fee
will burden fourth quarter result.

Tax rate

The Group's tax rate is effected by tax relieves in Russia. The tax relieves
are valid for as long as the company accrues tax on yields corresponding to the
amount of the Russian investment, and for two years thereafter.

The Group anticipates the tax rate on the entire year 2009 to remain at
previous year's level or increase slightly due to a lower share of taxable
profit made in Russia.
PASSENGER CAR TYRES
7-9/09 7-9/08 Change% 1-9/09 1-9/08 Change% 2008

Net sales, m€ 146.7 212.1 -30.8 391.7 597.8 -34.5 741.6
Operating result, m€ 43.3 72.9 -40.6 78.1 201.7 -61.3 230.0
Operating result,% 29.5 34.4 19.9 33.7 31.0
RONA,% 11.4 34.9 26.6
(rolling 12 months)

The net sales of Nokian passenger car tyres decreased in January-September by
34.5% year-over-year, amounting to EUR 391.7 million (597.8). Operating result
was EUR 78.1 million (201.7) and the operating result percentage 19.9% (33.7%).

The year-over-year car tyre sales deficit was mainly due to significantly
weaker sales in Russia and CIS, which derives mainly from the collapse of car
sales, customers' high winter tyre inventories and lack of financing. Sales
grew in North America as well as in Central and Eastern Europe. Winter tyre
market share improved in the Nordic countries, North America and in Central and
Eastern Europe.

Decreased sales in Russia and CIS resulted in a weaker sales mix and a lower
average price. The currency devaluations in core markets, affecting some 60% of
total sales, weakened profits. The implemented price increases improved summer
tyre prices but a weaker country and product mix reduced the winter tyre
average price.

The deployed streamlining measures decreased fixed costs and improved cash flow
significantly compared to the corresponding period a year earlier. Actions to
adjust production were implemented and by the end of the review period the
inventories were reduced below previous year's level. Trade receivables
decreased significantly year-over-year. Investments were cut clearly and
carried out mainly in the first half of the year. The increased proportion of
less expensive production in Russia and decreasing raw material prices became
gradually visible in the financial result.

The cash flow of passenger car tyres in 2009 is estimated to improve
significantly due to the restructuring of operations, personnel adjustments,
reduced inventory levels, investment cuts and cost-cutting program including
all cost types. The other main objectives for 2009 are utilizing new sales
opportunities in the western markets, securing the market position in Russia
and CIS, defending tyre price levels and controlling the receivables.

The new spearhead product of “Nordic studded tyres”, Nokian Hakkapeliitta 7,
won practically all car magazine tests in the Nordic countries and in Russia.
This is expected to have further positive effect on sales in the winter season.
HEAVY TYRES
7-9/09 7-9/08 Change% 1-9/09 1-9/08 Change% 2008

Net sales, m€ 12.0 24.4 -50.7 34.8 77.8 -55.3 97.7
Operating result, m€ 1.8 4.1 -55.3 -2.2 15.5 -114.4 17.7
Operating result,% 15.1 16.7 -6.4 19.9 18.1
RONA,% -0.03 32.0 25.9
(rolling 12 months)

In January-September the net sales of Nokian Heavy Tyres totalled EUR 34.8
million (77.8), showing a decrease of 55.3% year-over-year. The operating
result was EUR -2.2 million (15.5) and the operating result percentage -6.4%
(19.9%). The financial performance suffered from weak sales volumes and drastic
production cuts taken due to weak demand and carry-over stock from 2008.

Heavy tyres sales decreased in all product categories. Although the average
price remained on previous year's level, the market has become more competitive
in some product groups. Exceptionally low volumes of machine manufacture cut
the demand for forestry tyres. The demand for harbour and mining tyres, as well
as for various special machinery tyres decreased by more than 50% due to the
slowdown in the global economy. Orders, however, started to recover gradually
at the end of the second quarter, due to customers' low inventories and some
regaining of trust on the markets.

The positive effects of the production cuts that were initiated late last year
and continued all 2009, were fully visible at the end of the review period.
Fixed costs were reduced according to plan. Inventories decreased significantly
and reached the target level. Low tyre inventory has enabled some increase in
production volumes, which together with the decreased raw material cost have
started to improve productivity and profitability.

In 2009 Nokian Heavy Tyres focuses on bringing in new customers, speeding up
the development process for new products as well as launching new logistics and
customer service concepts. In 2009, cash flow is expected to be clearly
positive.

VIANOR

Equity-owned operations
7-9/09 7-9/08 Change% 1-9/09 1-9/08 Change% 2008
Net sales, m€ 57.3 64.5 -11.2 168.7 191.8 -12.0 308.3
Operating result, m€ -2.2 -2.2 1.7 -10.8 -6.7 -61.5 4.4
Operating result,% -3.8 -3.4 -6.4 -3.5 1.4
RONA,% 0.4 3.4 3.0
(rolling 12 months)

In January-September Vianor's net sales decreased by 12.0% year-over-year,
amounting to EUR 168.7 million (191.8). Operating result was EUR -10.8 million
(-6.7) and the operating result percentage -6.4% (-3.5%).

Low demand in all customer segments cut Vianor's sales and operating result.
Operating result in the third quarter was on par with the corresponding period
in 2008 due to lower fixed costs.

By the end of the review period, Vianor completed a big share of its structural
cost adjustment measures for 2009, which included shutting down non-profitable
outlets and making personnel cuts. Most of the savings have started to realise
in the third quarter of the year. The stock levels have been reduced and
optimised for the most profitable product groups. Cash flow improved and it is
estimated to be clearly positive in year 2009, due to reduced fixed costs and
stock levels.

Franchising and partner operations

During the review period Vianor managed to further expand the franchise and
partner network on Nokian Tyres' core markets. At the end of the review period,
Vianor operated in 17 countries; most extensively in the Nordic countries, in
Russia and in Ukraine. In the third quarter, as a part of the expansion scheme,
Vianor started operations in Moldova. The global Vianor network comprised of
585 outlets of which 414 were partners and 171 equity-owned. During the third
quarter the network grew with 44 outlets. Market shares improved as a result of
the expansion.

In the fourth quarter focus will be on improving sales and market shares,
maintaining tyre prices as well as controlling costs. Expanding the partner
franchise network will continue according to earlier plans.

OTHER OPERATIONS

Truck tyres

The net sales of Nokian truck tyres were EUR 19.2 million (24.4), down by 21.3%
compared to the previous year. Nokian increased its market share in the
European market which declined roughly 30%. Nokian truck tyres sales were
expanded to new market regions in Eastern Europe. Contract manufacturing
volumes were reduced and the inventory levels cut to the target.

The clear majority of Nokian truck tyre sales derive from winter products
during the second half of the year. Sales will however be lower than in 2008.
New product launches in the review period expand sales opportunities.

RUSSIA AND THE CIS COUNTRIES

Nokian Tyres' sales in Russia and the CIS countries totalled EUR 127.9 million
(347.0) in the review period. This entails a 63.1% decrease from the previous
year. Sales in Russia were EUR 81.1 million (284.6). Sales in CIS (excluding
Russia) were EUR 46.9 million (62.4). Nokian Tyres' sales declined due to lower
demand, customers' high carry-over inventories and their lack of financing.

The distribution network was extended by signing additional distribution
agreements and expanding the Vianor network. The Vianor tyre chain expanded by
36 outlets in Q3 and there were a total of 325 Vianor franchising outlets in
Russia and the other CIS countries at the end of the review period.

Six out of seven production lines of the Russian plant were operating with
limited capacity. A significant share of the production was exported due to the
decline in demand in Russia. New mixing machines were installed, and a storage
extension was taken in use during the review period. The fully completed
production process creates logistics and raw material cost savings compared to
2008. The Hakkapeliitta Village with 4 houses and 167 flats was completed.
Flats will be sold at cost to employees during Q4 in 2009.

Overall, the Russian economy seems to have adapted to the new reality and, for
the most part, stabilized. Russian economy declined at an estimated real GDP
growth of -8.6% year-over-year at the end of the review period. Full year 2009
GDP decrease is estimated at 6-8% but will depend primarily on commodity prices
i.e. oil and gas. Consumer purchasing power is lower in 2009 than last year but
it is expected to improve from 2010 onwards. Key to growth is availability of
financing. Consumer credit in the housing sector with interest rates of 12-14%
has re-emerged in Q3/2009 indicating improvement into other consumable sectors
in the future. For the next years 2008-2014 GDP growth is estimated to average
4% a year.

The decrease of car sales, the main driver for premium tyres, has continued all
2009 (-51% in January-September). A decline of over 50% is currently forecasted
for full year 2009. A recovery of car sales with growth starting in 2010 and
gaining momentum in 2011-2012 is presently forecasted.

The devaluation of the Rouble against major currencies exceeded 20% from late
2008 to early 2009. Further devaluation is presently unlikely due to higher oil
prices although risks still exist long run.

The good market potential has not disappeared; there is still strong underlying
consumer demand. The Nokian Tyres plant located in Russia, inside the customs
borders (duty 20% for imported tyres), combined with an expanding Vianor chain
provides a significant competitive edge on the market.

INVESTMENTS

Investments during the review period amounted to EUR 76.9 million (114.2). The
company's total investments in 2009 will be approximately EUR 85 million
(181.2). EUR 50 million (121) will be spent on completing projects started in
2008 concerning the Russian plant's operations and extension. The remainder
comprises production investments in the Nokia plant, moulds for new products
and the Vianor expansion projects.

OTHER MATTERS

1. Stock options on the NASDAQ OMX Helsinki Stock Exchange
The Board of Directors of Nokian Tyres plc resolved to apply for listing of the
stock options 2007A on the NASDAQ OMX Helsinki Ltd so that the listing would
commence on 1 March 2009.
The total number of stock options 2007A is 2,250,000. Each stock option 2007A
entitles its holder to subscribe for one Nokian Tyres plc share. The shares can
be subscribed with the stock options 2007A during 1 March 2009 - 31 March 2011.
In the aggregate, the stock options 2007A entitle their holders to subscribe
for 2,250,000 shares. The present share subscription price with stock options
2007A is EUR 16,08/share. The dividends payable annually will be deducted from
the share subscription price.

2. Shares subscribed with option rights

After December 9, 2008 registered increase in share capital a total of 400
Nokian Tyres plc's shares have been subscribed with the 2004B option rights and
200 shares with 2004C option rights. These option rights are attached to the
Nokian Tyres plc's Option Programs of 2004. An increase in share capital
totalling 120 euros was entered into the Trade Register on February 25, 2009.
The shares are traded on the NASDAQ OMX Helsinki Ltd together with the old
shares as of February 26, 2009. After the increase, the number of Nokian Tyres
shares is 124,846,590 and the share capital is EUR 24,969,318.

After February 25, 2009 registered increase in share capital a total of 1,900
Nokian Tyres plc's shares have been subscribed with the 2004B option rights.
These option rights are attached to the Nokian Tyres plc's Option Programs of
2004. An increase in share capital totalling 380 euros was entered into the
Trade Register on May 25, 2009. The shares are traded on the NASDAQ OMX
Helsinki Ltd together with the old shares as of May 26, 2009. After the
increase, the number of Nokian Tyres shares is 124,848,490 and the share
capital is EUR 24,969,698.00.

After May 25, 2009 registered increase in share capital a total of 400 Nokian
Tyres plc's shares have been subscribed with the 2004C option rights. These
option rights are attached to the Nokian Tyres plc's Option Programs of 2004.
An increase in share capital totalling 80 euros was entered into the Trade
Register on August 20, 2009. The shares are traded on the NASDAQ OMX Helsinki
Ltd together with the old shares as of August 21, 2009. After the increase, the
number of Nokian Tyres shares is 124,848,890 and the share capital is EUR
24,969,778.00.

3. Share price development

The Nokian Tyres' share price was EUR 15.93 at the end of the review period
(EUR 16.80). The average share price during the period was EUR 12.15(EUR
26.62), the highest EUR 17.37(EUR 33.73) and the lowest EUR 7.00(EUR 16.28). A
total of 179,873,310 shares were traded during the period (208,230,495),
representing 144% (167%) of the company's overall share capital. The company's
market value at the end of the period amounted EUR 1.989 billion (EUR 2.097
billion). The company's percentage of Finnish shareholders was 37.4% (28.0%)
and 62.6% (72.0%) were foreign shareholders registered in the nominee register.
This figure includes Bridgestone's ownership of approximately 16%.

4. Decisions made at the Annual General Meeting

The Annual General Meeting of Nokian Tyres held on April 2, 2009 accepted the
profit and loss statement for 2008 and discharged the Board of Directors and
the President from liability. The final dividend was set at EUR 0.40 per share.
The matching date was April 7, 2009 and the payment date April 21, 2009.

4.1 Board of Directors and auditor

The number of Board members was set at seven. Kim Gran, Hille Korhonen, Hannu
Penttilä, Aleksey Vlasov, Petteri Walldén and Kai Öistämö will continue as
Board members. Yasuhiko Tanokashira was elected as a new member of the Board.
In a meeting held after the Annual General Meeting, Petteri Walldén was elected
Chairman of the Board. Authorised public accountants KPMG Oy Ab continue as
auditors.

4.2 Remuneration of the Board members

The Annual General Meeting decided that the monthly fee paid to the Chairman of
the Board would be EUR 5,833, or EUR 70,000 per year, while that paid to Board
members was set at EUR 2,917 or EUR 35,000 per year. It was also decided that
each member of the Committee will receive a meeting fee of EUR 500 for each
Committee meeting attended.

In addition, it was decided that, according to the existing practices, 60% of
the annual fee be paid in cash and 40% in company shares, such that in the
period from April 3 to April 30, 2009, EUR 28,000 worth of Nokian Tyres plc
shares will be purchased at the stock exchange on behalf of the Chairman of the
Board and EUR 14,000 worth of shares on behalf of each Board member. This
decision means that the final remuneration paid to Board members is tied to the
company's share performance. No separate compensation will be paid to the
President and CEO for Board work.

5. Adjustment measures and cost-cutting programme

At the turn of the year, Nokian Tyres initiated measures to adjust its
production and structure, the goal being to improve productivity and achieve
annual cost savings of approximately EUR 50 million. The company informed about
the statutory negotiations decisions related to adjustment issues in stock
exchange releases on Nov 19 and Dec 19, 2008, as well as Jan 20 and Mar 9,
2009.
The production of Nokia plant was changed from a continuous three-shift
seven-day model to a five-day (discontinued) three-shift model. As a result of
the adjustments, the annual production capacity of Nokian passenger car tyres
at the Nokia plant will decrease from the previous 6 million to approximately 4
million tyres.

Vianor adjusted its structure and costs by shutting down non-profitable outlets
and making personnel cuts. In the review period the total group personnel was
cut by 525 employees. Lay-offs were carried out in all business units according
to the cost-cutting programme.

By the end of the review period the company is ahead of realizing the cost
saving program with EUR 30.6 million saved in labour and EUR 17.5 million in
fixed (excluding labour) costs.

RISKS, UNCERTAINTY FACTORS AND DISPUTES IN THE NEAR FUTURE

The Group's short term risks are derived from continuing uncertainty of the
world economy and the impact on the tyre markets. A decrease in demand may have
a negative effect on sales volume and lead to decreasing profits.

In terms of exchange rate risks, the main risks facing Nokian Tyres in the near
future are related to the development of the Russian rouble, the Ukrainian
hryvnia and the Kazakhstanian tenge.

A little over 35% of the Group's net sales are generated from euro-denominated
sales. The most important sales currencies in addition to the euro are the
Russian rouble, the Ukrainian hryvnia, the US dollar, and the Swedish and
Norwegian krona.

Nokian Tyres' other risks and uncertainty factors in the near future have to do
with the shortage of financing for customers in Russia and CIS, the success of
sales in the key markets, the repatriation of receivables and the development
of the financial markets. Special attention has been drawn to securing customer
payments. Russian receivables account for around 30% of the Group's total
receivables. All overdue trade receivables have been restructured and incoming
payments are in line with the agreements.
Nokian Tyres has certain pending legal proceedings and litigations in some
countries. At this moment, the company does not expect these proceedings to
have any material impact on the performance or future outlook.

OUTLOOK FOR 2009

The level of tyre demand seems to have stabilized and some signs of a slow
recovery can be seen. The incentive programs to activate car sales in Europe
and an early start of the winter tyre sales have had a positive effect on tyre
sales. Overall demand levels remain however comparatively low. Carry-over tyre
inventories caused by the crisis seem to be melting on all markets. The
receivable level combined with a devaluation risk blocking business on Nokian
Tyres' core markets is gradually easing off. Currencies on Nokian core markets
(excl. Ukraine) have stabilized since early 2009 and show some signs of
strengthening.

The recovery of profitability and productivity at Nokian Tyres is supported by
the increasing share of Russian production, already implemented structural
changes and cost cutting. Raw material cost is estimated to drop by
approximately 20% during second half-year compared to the first half of 2009.

The share of Russian and CIS sales in the sales portfolio will fall this year
and is partly compensated by increased sales in North America and in Central
and Eastern Europe. This will have an adverse effect on average sales prices in
2009.

In order to adapt the production to seasonal changes in demand Nokian Tyres
plans to temporarily stop the car tyre production in the Nokia plant for 17
working days starting on December 7, 2009. Year-end production will also be cut
at the Russian plant.

A strong expanding distribution, good seasonal logistics, local low cost
production inside duty borders and new products will give Nokian Tyres a good
chance to strengthen its market leadership in the core markets and to return to
profitable growth already in 2010.

Outlook and guidance for 2009 (updated):
Net sales for 2009 are estimated to be EUR 760-810 million with second half of
the year showing clear improvement in profitability versus the first half of
2009. Fourth quarter operating margin is estimated to be lower than third
quarter due to a weaker mix in sales and production. Full year 2009 cash flow
is expected to be significantly better but net sales and operating profit
significantly lower than in 2008.
Previous guidance of August 6, 2009 was:
“Market headwind will continue all 2009 but the winter tyre season, improving
sales mix, restructuring and lower raw material cost are expected to improve
sales and operating margin clearly during the second half compared to the first
half of the year. Cash flow is expected to be significantly better than in
2008. However, the net sales and operating result for full year 2009 will be
significantly lower than in 2008.”

*****
The above-said information contains forward-looking statements relating to
future events or future financial performance of the company. In some cases,
such forward-looking statements can be identified by terminology such as ”may”,
”will”, ”could”, ”expect”, ”anticipate”, ”believe” ”estimate”, ”predict”, or
other comparable terminology. Such statements are based on the current
expectations, known factors, decisions and plans of the management of Nokian
Tyres. Forward-looking statements involve always risks and uncertainties,
because they relate to events and depend on circumstances that may or may not
occur in the future. Future results may thus vary even significanty from the
results expressed in, or implied by, the forward-looking statements.
*****
This interim report has been prepared in accordance with IFRS
compliant recognition and measurement principles. Since 1.1.2009
the Group has applied amendment to the IAS 1 'Presentation of
Financial Statements' affecting the disclosure of the consolidated
income statement and statement of changes in equity. In addition,
the Group has adopted new IFRS 8 'Operating Segments' affecting the
disclosure of the notes to the consolidated financial statements.
Otherwise this interim report has been prepared in accordance with
the same accounting policies as in the most recent annual financial
statements, but it has not been prepared in compliance with all
requirements set out in IAS 34 'Interim Financial Reporting'.

The interim report figures are unaudited.

NOKIAN TYRES
CONSOLIDATED
INCOME STATEMENT
Million euros 7-9/09 7-9/08 1-9/09 1-9/08 Last12 1-12/08 Change
months %

Net sales 204.1 282.8 550.8 813.2 818.5 1,080.9 -32.3
Cost of sales -109.9 -150.9 -334.6 -435.9 -486.9 -588.1 -23.2
Gross profit 94.2 131.9 216.2 377.3 331.6 492.7 -42.7
Other operating
income 0.2 0.4 1.2 1.0 2.4 2.2 24.2
Selling and
marketing expenses -39.4 -47.0 -124.4 -143.3 -179.8 -198.8 -13.2
Administration
expenses -5.3 -6.5 -18.0 -17.9 -27.6 -27.4 0.7
Other operating
expenses -5.9 -6.9 -13.8 -16.6 -19.0 -21.8 -17.0
Operating result 43.7 71.9 61.2 200.5 107.7 247.0 -69.5
Financial income 15.1 5.3 73.5 27.2 157.4 111.1 170.0
Financial expenses -26.8 -9.8 -108.0 -41.8 -250.5 -184.3 158.6
Result before tax 32.1 67.5 26.7 185.9 14.5 173.8 -85.6
Tax expense (1 -4.5 -15.1 2.3 -34.5 2.9 -33.9 -106.7
Result for the
period 27.5 52.4 29.0 151.5 17.4 139.9 -80.8

Attributable to:
Equity holders of
the parent 27.5 52.4 29.0 151.5 17.4 139.9
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0

Earnings per share
from the profit
attributable to
equity holders of
the parent
basic, euros 0.22 0.42 0.23 1.22 0.14 1.12 -80.9
diluted, euros 0.22 0.43 0.26 1.17 0.18 1.10 -78.1
CONSOLIDATED
OTHER COMPREHENSIVE
INCOME 7-9/09 7-9/08 1-9/09 1-9/08 1-12/08
Million euros

Result for the
period 27.5 52.4 29.0 151.5 139.9
Other comprehensive
income, net of tax:
Gains/Losses from
hedge of net
investments in
foreign operations -3.5 -2.5 -14.3 0.9 6.2
Interest rate swaps 0.0 -0.1 0.0 0.1 -0.1
Translation
differences on
foreign operations(2 -0.5 8.9 -25.8 -2.7 -46.4
Total other
comprehensive income
for the period,
net of tax -4.0 6.3 -40.1 -1.7 -40.3
Total comprehensive
income for the
period 23.5 58.7 -11.0 149.7 99.6

Total comprehensive
income attributable to:
Equity holders of
the parent 23.5 58.7 -11.0 149.7 99.6
Minority interest 0.0 0.0 0.0 0.0 0.0

1)Tax expense in the consolidated income statement is based on the
taxable result for the period.
2)Since the beginning of this year the Group has internal loans that
are recognised as net investments in foreign operations in accordance
with IAS 21 'The Effects of Changes in Foreign Exchange Rates'.

KEY RATIOS 30.9.09 30.9.08 31.12.08 Change
%
Equity ratio, % 50.5 51.6 54.8
Gearing, % 72.0 63.6 41.0
Equity per share, euro 5.80 6.57 6.20 -11.8
Interest-bearing net debt,
mill. euros 521.2 521.6 319.0
Capital expenditure,
mill. euros 76.9 114.2 181.2
Depreciation and amortisations,
mill. euros 45.8 40.8 56.2
Personnel, average 3,536 3,766 3,812

Number of shares (million units)
at the end of period 124.85 124.83 124.85
in average 124.85 124.54 124.61
in average, diluted 129.41 132.40 131.47

CONSOLIDATED STATEMENT OF 30.9.09 30.9.08 31.12.08
FINANCIAL POSITION
Million euros

Non-current assets
Property, plant and equipment 509.6 493.3 499.8
Goodwill 54.9 54.9 53.9
Other intangible assets 19.6 13.8 19.0
Investments in associates 0.1 0.1 0.1
Available-for-sale
financial assets 0.2 0.3 0.2
Other receivables 10.4 14.0 11.6
Deferred tax assets 31.4 27.8 20.3
Total non-current assets 626.2 604.2 604.9

Current assets
Inventories 249.4 275.0 290.9
Trade receivables 408.2 598.1 268.4
Other receivables 132.9 101.2 143.0
Cash and cash equivalents 16.3 13.8 113.2
Total current assets 806.8 988.0 815.5

Equity
Share capital 25.0 25.0 25.0
Share premium 155.2 155.0 155.2
Translation reserve -93.1 -14.7 -53.0
Fair value and hedging reserves -0.1 0.1 -0.1
Retained earnings 636.6 655.2 647.6
Minority interest 0.0 0.0 2.7
Total equity 723.6 820.6 777.3

Non-current liabilities
Deferred tax liabilities 27.5 28.0 27.6
Provisions 1.2 0.0 1.1
Interest-bearing liabilities 214.7 295.6 394.5
Other liabilities 2.1 2.2 2.1
Total non-current liabilities 245.4 325.8 425.3

Current liabilities
Trade and other payables 140.1 204.9 178.9
Provisions 1.1 1.1 1.1
Interest-bearing liabilities 322.8 239.8 37.8
Total current liabilities 464.0 445.8 217.8

Total assets 1,433.0 1,592.2 1,420.4
CONSOLIDATED STATEMENT
OF CASH FLOWS 1-9/09 1-9/08 1-12/08
Million euros

Cash flows from operating
activities:
Cash generated from
operations -67.8 -158.8 201.1
Financial items and taxes -5.7 -78.0 -182.7
Net cash from operating
activities -73.5 -236.8 18.4

Cash flows from investing
activities:
Net cash used in investing
activities -76.9 -126.2 -177.2

Cash flows from financing
activities:
Proceeds from issue of share
capital 0.0 6.3 6.4
Change in current financial
receivables and debt 281.3 228.6 25.1
Change in non-current financial
receivables and debt -177.4 45.9 147.5
Dividends paid -49.9 -62.3 -62.3
Net cash from financing
activities 54.0 218.5 116.7

Net change in cash and cash
equivalents -96.3 -144.5 -42.1

Cash and cash equivalents at
the beginning of the period 113.2 158.1 158.1
Effect of exchange rate changes 0.6 -0.2 2.8
Cash and cash equivalents at
the end of the period 16.3 13.8 113.2
-96.3 -144.5 -42.1

The effect of exchange rate changes 0.6 million euros are included in
the net cash from operating activities. Year 2008 that effect was
-0.2 million euros.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Million euros Fair
value Mino-
Trans- and Retai- rity
Share Share lation hedging ned inte-
capital premium reserve reserves earnings rest Tot.
Equity,
Jan 1st 2008 24.7 149.0 -12.8 0.0 551.9 0.0 712.8
Dividends paid -62.3 -62.3
Exercised
warrants 0.2 6.1 6.3
Share-based
payments 13.5 13.5
Other changes 0.4 0.4
Total compre-
hensive income
for the period -1.8 0.1 151.5 149.8
Change in
minority inte-
rest 0.0
Equity,
Sep 30th 2008 25.0 155.0 -14.7 0.1 655.2 0.0 820.6

Equity,
Jan 1st 2009 25.0 155.2 -53.0 -0.1 647.6 2.7 777.3
Dividends paid -49.9 -49.9
Exercised
warrants 0.0 0.0 0.0
Share-based
payments 9.0 9.0
Other changes 0.9 0.9
Total compre-
hensive income
for the period -40.1 0.0 29.0 -11.0
Change in
minority inte-
rest -2.7 -2.7
Equity,
Sep 30th 2009 25.0 155.2 -93.1 -0.1 636.6 0.0 723.6

SEGMENT INFORMATION
The segment information is reported according to the business
segments. Segments are based on the internal profit centre
organisation and financial reporting structure. The segments comprise
of entities with products and services subject to marketing
strategies, distribution channels, risks and returns that are
different from those of other segments. They are also managed
separately.

Application of IFRS 8 has not changed the reported business segments
of the Group as the segment information has been based on financial
reporting structure also before where the measurement principles are
in accordance with IFRS standards.

Pricing of the inter-segment transactions reflect current market
prices. Evaluation of profitability and decicions on resource
allocation are based on operating result of each segment.

Segments are:

Passenger car tyres -profit centre develops, produces and obtains
revenues from sales of summer and winter tyres for cars and vans.

Heavy tyres -profit centre obtains its revenues from tyres for
forestry machinery, special tyres for agricultural machinery and
industrial machinery.

Vianor-tyre chain sells car and van tyres, truck tyres as well as
other automotive products and services. In addition to Nokian brand,
Vianor sells also other leading tyre brands.

Other operations include Truck Tyre business. In addition, Other
operations contain business development and Group management
unallocated to the segments.

Million euros 7-9/09 7-9/08 1-9/09 1-9/08 1-12/08 Change
%
Net sales
Passenger car tyres 146.7 212.1 391.7 597.8 741.6 -34.5
Heavy tyres 12.0 24.4 34.8 77.8 97.7 -55.3
Vianor 57.3 64.5 168.7 191.8 308.3 -12.0
Other operations 9.7 12.0 19.2 24.4 33.4 -21.5
Eliminations -21.6 -30.2 -63.6 -78.7 -100.2
Total 204.1 282.8 550.8 813.2 1,080.9 -32.3

Operating result
Passenger car tyres 43.3 72.9 78.1 201.7 230.0 -61.3
Heavy tyres 1.8 4.1 -2.2 15.5 17.7 -114.3
Vianor -2.2 -2.2 -10.8 -6.7 4.4 -61.2
Other operations 1.0 -0.5 -2.8 -4.5 -6.4 38.1
Eliminations -0.3 -2.3 -1.0 -5.4 1.2
Total 43.7 71.9 61.2 200.5 247.0 -69.5

Operating result,
% of net sales
Passenger car tyres 29.5 34.4 19.9 33.7 31.0
Heavy tyres 15.1 16.7 -6.4 19.9 18.1
Vianor -3.8 -3.4 -6.4 -3.5 1.4
Total 21.4 25.4 11.1 24.7 22.8

Cash Flow II
Passenger car tyres -20.4 -142.6 -102.1 -244.1 -2.3 58.2
Heavy tyres -1.2 -4.0 -0.6 -7.9 10.6 92.4
Vianor -10.7 -13.1 -18.6 -30.3 1.4 38.6
Total -37.5 -141.8 -126.1 -288.7 9.5 56.3
CONTINGENT LIABILITIES 30.9.09 30.9.08 31.12.08
Million euros

FOR OWN DEBT
Mortgages 0.9 1.0 0.9
Pledged assets 35.1 42.4 37.4

OTHER OWN COMMITMENTS
Guarantees 3.0 1.9 2.1
Leasing and rent
commitments 105.9 103.2 104.9
Purchase commitments
of property, plant
and equipment 4.2 2.4 1.5

DERIVATIVES 30.9.09 30.9.08 31.12.08
Million euros

INTEREST RATE DERIVATIVES
Interest rate swaps
Notional amount 4.0 14.6 14.4
Fair value -0.2 0.1 -0.1

FOREIGN CURRENCY DERIVATIVES
Currency forwards
Notional amount 438.1 651.3 396.5
Fair value -12.4 -0.1 24.4
Currency options, purchased
Notional amount 47.4 40.8 5.0
Fair value 0.3 1.4 0.5
Currency options, written
Notional amount 91.4 74.2 10.1
Fair value -0.9 -1.2 -0.3

The fair value of interest rate derivatives is defined by cash flows
due to contracts. Interest rate swaps are wholly designated as cash
flow hedges and their changes in fair value relating to the effective
portion of the hedge is recognised in equity and the potential
ineffective portion is recognised in the income statement.

The fair value of forward exchange contracts is calculated at the
forward rates on the reporting date on the basis of cash flows
arising from contracts. The fair value of currency options is
calculated using the Garman-Kohlhagen option valuation model.

Foreign currency derivatives are only used to hedge the Group's net
exposure. The changes in fair value of foreign currency derivatives
are reported in the income statement excluding the foreign currency
derivatives that are hedging the foreign currency denominated net
investment in a foreign subsidiary. Hedge accounting is applied for
those hedges and for hedges meeting the hedge accounting criteria the
changes in fair value are wholly deferred in equity except for the
potential ineffective portion and the time value of currency options,
which are recognised in the income statement.

The notional amount of foreign currency derivatives is the euro
equivalent of the contracts' currency denominated amount on the
reporting date.

DEFINITIONS OF CONSOLIDATED KEY FINANCIAL INDICATORS

Earnings per share, euro:
Result for the period attributable to the equity holders of the
parent / Average adjusted number of shares during the period

Earnings per share (diluted), euro:
Result for the period attributable to the equity holders of the
parent / Average adjusted and diluted number of shares during
the period

The share options affect the dilution as the average share market
price for the period exceeds the defined subscription price.

Equity ratio, %:
Total equity x 100 / (Total assets - advances received)

Gearing, %:
Interest-bearing net debt x 100 / Total equity

Equity per share, euro:
Equity attributable to equity holders of the parent / Adjusted
number of shares on the reporting date

Operating margin:
Operating result, % of net sales

DEFINITIONS OF SALES AREAS

Nordic countries:
Finland, Norway, Sweden.

Russia and CIS:
Russia, Armenia, Belarus, Georgia, Kazakhstan, Moldova, Ukraine.

Central and Eastern Europe:
Albania, Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia,
France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania,
The Former Yugoslav Republic of Macedonia, Montenegro, Netherlands, Poland,
Portugal, Romania, Serbia, Slovakia, Slovenia, Spain, Switzerland, Turkey,
United Kingdom.

North America:
Canada, USA.

Nokian Tyres plc

Anssi Mäki
Communications Manager

Further information: Mr. Kim Gran, President and CEO,
Tel: +358 10 401 7336

Distribution: NASDAQ OMX, media, www.nokiantyres.com

*****

Nokian Tyres plc will publish the interim report January-September on Tuesday
November 3, 2009 at 8.00 am Finnish time.

The result presentation to analysts and media will be held in Helsinki at 10.00
am Finnish time. The presentation can be listened through audiocast via
internet at http://www.nokiantyres.com/resultinfo2009q3
To be able to ask questions during the event you can participate in the
conference call. Please dial in 5-10 minutes before the beginning of the event:
+44 (0)20 7162 0025. Password: Nokian Tyres
Stock exchange release and presentation material will be available before the
event from http://www.nokiantyres.com/ir-calendar
After the event the audio recording can be downloaded from the same page.

Nokian Tyres result 2009 will be published on February 2010. Releases and
company information will be found from http://www.nokiantyres.com