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Introduction & Market Context
Nokian Tyres (HEL:TYRES) reported a substantial improvement in its third-quarter 2025 performance, with operating profit surging 427% to €21.8 million compared to €4.1 million in the same period last year. The company’s shares responded positively to the announcement on October 28, rising 8.22% to €8.15, approaching its 52-week high of €8.98.
The Finnish tire manufacturer achieved this significant profit growth despite mixed market conditions, with the European replacement tire market growing modestly at 2%, while the North American market contracted by 1%. The agricultural tire segment faced more significant headwinds, with European replacement market declining 5% and OE market down 15%.
Quarterly Performance Highlights
Nokian Tyres delivered double-digit net sales growth in Q3 2025, reaching €344.1 million, up 10.8% in comparable currencies from €313.6 million in Q3 2024. The company’s segments EBITDA improved to €65.4 million (19.0% of net sales) compared to €58.8 million (18.8%) in the previous year.
As shown in the following financial performance summary:
The improvement in operating profit was particularly notable, jumping to €21.8 million (6.3% of net sales) from just €4.1 million (1.3%) a year earlier. Segments operating profit also increased to €32.4 million (9.4% of net sales) compared to €30.4 million (9.7%) in Q3 2024.
The company’s sales growth was geographically broad-based, with increases across all regions as illustrated in this breakdown:
The Americas region showed the strongest performance with 27.0% growth, reaching €78.4 million. Sales in Other Europe increased by 9.2% to €96.8 million, while the Nordic region grew by 4.6% to €167.7 million.
Detailed Financial Analysis
The company’s financial position showed improvement in several key areas. Cash flow improved compared to 2024, with capital expenditures declining as the company transitions from its heavy investment phase. The comprehensive financial table below highlights these developments:
For the first nine months of 2025, Nokian Tyres reported net sales of €957.3 million and operating profit of €0.7 million (0.1% of net sales), indicating that the strong Q3 performance was a significant improvement over the first half of the year.
The company’s cash flow analysis reveals how reduced capital expenditures and improved working capital management have positively impacted its financial position:
Cash flow from operating activities was -€80.6 million for Q3 2025 and -€185.9 million for the first nine months of 2025, showing improvement from the previous year. Capital expenditure was €32.3 million for Q3 and €122.0 million for the first nine months of 2025.
Strategic Initiatives
A key element of Nokian Tyres’ strategy is the ramp-up of its Romanian factory, which has now reached full 24/7 production capability with four shifts. This zero-CO2-emissions facility began customer deliveries in Q2 2025 and is expected to produce approximately 1 million tires by the end of 2025.
The Romanian facility has already enabled the launch of two new product lines specifically designed for Central and Southern European markets, strengthening the company’s position in these key regions.
One of these new products is the Powerproof 2 ultra-high-performance summer tire, which completes Nokian’s premium tire offering:
The company is also strengthening its brand through strategic partnerships, including becoming an official sponsor of the 2026-27 IIHF Ice Hockey World Championships, which will increase global visibility and connect with hockey fans.
Segment Performance
The Passenger Car Tyres segment, which represents the largest portion of Nokian’s business, delivered strong results in Q3 2025. Net sales increased by 13.2% to €234.0 million, while segment operating profit rose to €38.9 million (16.6% of net sales) from €34.4 million (16.4%) in Q3 2024.
A detailed bridge analysis shows that price/mix improvements were the primary driver of this performance, contributing €35 million to net sales growth:
The Heavy Tyres segment faced challenges, with net sales decreasing to €55.4 million in Q3 2025 from €57.9 million in Q3 2024, primarily due to lower volumes of truck and agricultural tires. Segment operating profit declined to €5.0 million (9.0% of net sales) from €7.5 million (12.9%) a year earlier.
Meanwhile, the Vianor retail chain showed improvement, with net sales increasing to €74.9 million in Q3 2025 from €69.4 million in Q3 2024. Segment operating loss narrowed slightly to -€6.4 million (-9.0% of net sales) from -€6.6 million (-9.5%) in the same period last year.
Forward-Looking Statements
Nokian Tyres maintained its guidance for 2025, expecting net sales to grow and segments operating profit as a percentage of net sales to improve compared to 2024. According to CEO Paolo Pompei, "It’s now time to harvest what we did in the last three years and to make sure that we are able to saturate our existing capacity."
The company plans to invest approximately €180 million in 2025, with total investments for 2023-2025 reaching approximately €800 million. Capital expenditure is expected to return to a level in line with depreciation going forward. Additionally, Nokian anticipates receiving Romanian state aid of up to €100 million from late 2025 or early 2026, which will lower net investments.
A favorable development for the company is the reduction of US tariffs on EU tire imports from 25% to 15%, which should benefit its European production. Currently, about 85% of Nokian Tyres’ US volume is produced locally at its Dayton facility.
Market Reaction and Outlook
The market responded positively to Nokian Tyres’ Q3 results, with the stock rising 8.22% to €8.15 following the announcement. This places the shares near their 52-week high of €8.98, reflecting investor confidence in the company’s improved performance and strategic direction.
With the major capacity investments of the past three years now largely complete, Nokian Tyres appears well-positioned to focus on optimizing its operations and improving profitability. The company’s ability to drive significant price/mix improvements in its passenger car tire segment demonstrates pricing power despite challenging market conditions, which bodes well for future performance.
As the Romanian factory continues to ramp up toward its target capacity of 6 million tires by the end of 2026, and with new product launches strengthening its market position, Nokian Tyres has established a foundation for sustainable growth in the coming years.
Full presentation:
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