FINANCIAL REVIEW 2021
CONTENTS
Contents
Nokian Tyres in brief ..............................
Key gures 2021 ...................................
Highlights of the year ..............................
Strategy ..........................................
Review by the President & CEO ......................
Report by the Board of Directors .................
Key nancial indicators .............................
Financial statements .............................
Consolidated income statement ....................
Consolidated statement of nancial position .........
Consolidated statement of cash ows ...............
Consolidated statement of changes in equity ........
Accounting policies for the
consolidated nancial statements ..................
Notes to the consolidated nancial statements .......
Parent company income statement .................
Parent company balance sheet ......................
Parent company statement of cash ows ............
Accounting policies for the parent company ..........
Notes to the nancial statements of the
parent company ...................................
Signatures of the Board of Directors and
the auditor’s note ..................................
Auditor’s report ....................................
ESEF assurance report .............................
Information on Nokian Tyres’ share ..................
Nokian Tyres Group structure .......................
Corporate Governance Statement ................
Non-Financial Information Statement .............
Signatures of the Board of Directors .................
Remuneration Report .............................
Investor information and investor relations ...........
NOKIAN TYRES IN BRIEF
Nokian Tyres develops and manufactures
premium tires for people who value safety,
sustainability, and predictability. We oer
peace of mind in all conditions and instill
our Scandinavian heritage in every tire we
make. Our purpose is to empower the world
to drive smarter.
Our business is divided into three units: Passenger Car Tyres, Heavy
Tyres and Vianor, which is our chain of tire and car service centers.
Our manufacturing plants are located in Finland, Russia, and the US.
Intensive tire testing is a vital part of product development and
ensures high quality of our products. We operate two tire testing
centers in Finland and one in Spain, which allows for year-round tire
testing.
Nokian Tyres is the inventor of the winter tire. The diverse port-
folio of winter tires is complemented with summer, all-weather, and
all-season tires. Our products are sold in more than 60 countries. We
are the market leader in premium tires in our home markets in the
Nordic countries and Russia, and are strengthening our position in
North America and Central Europe.
Sustainability is an essential part of our business. We aim to be the
best tire choice for the people and the planet, and are committed to
promoting safe and responsible driving culture.
In 2021, the company’s net sales were 1.7 billion and it employed
some 4,900 people at the end of year. Nokian Tyres is listed on
Nasdaq Helsinki.
4,900
(4,600)
EMPLOYEES
PRODUCTS SOLD IN
63
(69)
COUNTRIES
NET SALES
1,714
(1,314)
EUR MILLION
SEGMENTS
OPERATING PROFIT
325
(190)
EUR MILLION
NOKIAN TYRES IN BRIEF
20212020201920182017
Net sales Segments
operating prot
Segments
operating prot %
EUR million
Segments operating prot %
0
400
800
1,200
1,600
2,000
0
10
20
30
40
50
20212020201920182017
EUR
Segments earnings
per share
Dividend
per share
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
%
0
5
10
15
20
25
20212020201920182017
KEY FIGURES 2021
EUR million 2021 2020
Net sales ,. ,.
Operating prot . .
Operating prot % .% .%
Prot before tax . .
Prot for the period . .
Earnings per share, EUR . .
Segments operating prot . .
Segments operating prot % .% .%
Segments earnings per share, EUR . .
Segments ROCE, % .% .%
Equity ratio, % .% .%
Cash ow from operating activities . .
Gearing, % –.% –.%
Interest-bearing net debt –. –.
Capital expenditure . .
Personnel (at the end of year) , ,
LTIF
1)
. .
1)
Lost Time Injury Frequency: the number of lost time injuries occurring in
a workplace per 1 million hours worked.
NET SALES AND SEGMENTS OPERATING PROFIT* SEGMENTS EARNINGS PER SHARE* AND DIVIDEND PER SHARE
NET SALES BY GEOGRAPHICAL AREA, %
NET SALES BY BUSINESS UNIT
1)
, %
1)
Including internal sales
SEGMENTS ROCE*, %
* Comparable Segments Total gures for 2019–2021, earlier years reported based on IFRS
1)
Segments EPS 2019 excl. the impact of the rulings on the tax disputes of
EUR 1.08 were EUR 1.98
2)
The Board’s proposal to the Annual General Meeting
Key gures 2021
2021 2020 2019 2018 2017
Net sales, MEUR ,. ,. ,. ,. ,.
Segments operating
prot, MEUR . . . . .
Segments operating
prot % . . . . .
2021 2020 2019 2018 2017
Segments ROCE, % . . . . .
2021 2020 2019 2018 2017
Segments earnings
per share, EUR . . .
1)
. .
Dividend per share,
EUR .
2)
. . . .
2021 2020
Nordic countries
Other Europe
Russia and Asia
Americas
2021 2020
Passenger Car Tyres
Heavy Tyres
Vianor
HIGHLIGHTS
OF THE YEAR
We reached the
HIGHEST AAA
RATING in the MSCI
ESG Rating
Heavy Tyres reached
2 years with
NO LOST-TIME INJURIES
Our market share
IMPROVED IN ALL
KEY AREAS
We INCREASED
PRODUCTION CAPACITY
to support our growth and
meet high demand
Tire testing begun
at our NEW HAKKA
RING IN SPAIN
We launched a
RECORD NUMBER OF
NEW PRODUCTS
in 2020–2021
NET SALES WERE
THE HIGHEST EVER AT
EUR 1,714 MILLION
Highlights of the year
In 2021, we continued to
strengthen our position by
launching an expanding range
of innovative, next-generation
products to the markets. We
were again recognized for our
sustainability work.
Strategy
NOKIAN TYRES’
STRATEGY
We aim for organic growth
ahead of the market, and increasing market share in all
key markets. In the mid-term,
our target is to reach EUR 2 billion in net sales
with high profitability.
AMBITIOUS LEAP FORWARD
Nokian Tyres’ mid-term growth strategy and the updated nancial and non-nancial targets were presented in more detail at the Capital Markets Day held on September 9, 2021.
Watch the CMD presentations at www.nokiantyres.com/company/investors/ir-services/ir-calendar/capital-markets-days/
PURPOSE
EMPOWER THE WORLD TO DRIVE SMARTER
MID-TERM
TARGETS
FIVE
CORNERSTONES
FOR OUR SUCCESS
SAFEST TIRES FOR
ALL CONDITIONS
RESPONSIVE
AND EFFECTIVE
SUPPLY CHAIN
CONSUMER-TRUSTED
PREMIUM
BRAND
LEADER IN
SUSTAINABILITY
NOKIAN TYRES
TEAM
VALUES
WE Care Drive innovation Deliver high results TOGETHER
EUR
2 BILLION
NET SALES
WE DRIVE TOPLINE WITH NEW PRODUCTS
AND STRONGER GO-TO-MARKET
BUSINESS AREA AND UNIT ROLES
• NORDICS & VIANOR: Strengthen #1 position
• RUSSIA: Strengthen #1 position
• CENTRAL EUROPE: Grow sales by ~50%
• NORTH AMERICA: Grow sales by ~100%
• HEAVY TYRES: Grow sales by ~50%
FINANCIAL TARGETS
• Growing faster than the market:
Net sales EUR 2 billion
• High returns & protability: Segments Operating
Prot & Segments ROCE at the level of 20%
• Growing ordinary dividend: >50% of net earnings
2021 was in many ways successful for Nokian Tyres. We took advantage
of the favorable market conditions and quickly responded to increasing
tire demand. New products, increased capacity, and continuous
improvements in go-to-market activities helped us achieve record high
net sales. We are in a good position to continue the growth journey in line
with our revised strategy, by promoting even safer, smarter, and more
sustainable driving.
Demand in the replacement tire market
started recovering quickly in late 2020
and continued to be strong throughout
2021. Supported by good momentum, all
our business units and areas performed
strongly and made excellent progress in
2021. Passenger car tire volumes grew
across all main markets, driven by the
stronger product oering and distri-
bution, as well as improved commercial
capabilities. Heavy Tyres’ sales were driven
by truck, mining and agricultural tires,
in particular, and Vianor continued to
perform well in all its operating countries.
We broke net sales records in both the
third and fourth quarter, which pushed
Nokian Tyres’ full year net sales to the
highest level ever. At the same time,
segments operating prot improved
signicantly compared to 2020. While we
are pleased with the progress in 2021, our
ambitions are even higher.
Raw material and logistics costs
increased sharply during 2021, and there
was a shortage of containers and trans-
port capacity. Despite these challenges,
we took active measures to meet the
growing demand and increased sales
prices to reduce the negative impact of
cost ination. Inationary pressures are
expected to continue in 2022, which will
require systematic price increases and
careful cost control going forward, while
investing prudently to meet the needs of
the growing business.
In order to ensure good availability
of our premium products, the Russian
ON THE WAY TOWARDS
EUR 2 BILLION NET SALES
All our business units and
areas made excellent
progress in 2021.
Review by the President & CEO
Our strong performance is backed by the talented
Nokian Tyres personnel.
factory ran at full capacity in 2021. In the
US, we continued to ramp up production,
and in Finland, we recruited additional
personnel for passenger car tire produc-
tion. Overall, our goal is to gradually
increase capacity to 26 million passenger
car tires by 2024 and to 32 million kilos
in Heavy Tyres by 2023, representing an
increase of approximately one third from
the 2021 level.
Aiming for an ambitious
leap forward in growth
In September, we published our growth
strategy with new nancial and non--
nancial targets. In the mid-term, we aim
to deliver net sales of EUR 2 billion and
high protability, by targeting segments
operating prot and segments return on
capital employed at a level of 20%.
We have all the building blocks in place
to reach the EUR 2 billion in net sales:
high-quality products and a premium
brand, an eicient supply chain, leader-
ship in sustainability, and a strong Nokian
Tyres team. I believe that macro trends,
such as the increasing number of new car
models, rising SUV and CUV penetration,
and climate change mitigation, will
support growing demand for our sustain-
ably produced and innovative tires.
Expanding product
range and developing
commercial operations
Our growth is driven by new products,
which we have launched in record
numbers during 2020–2021. This
development will continue in the coming
months. We are particularly proud of the
new Hakkapeliitta 10 winter tire range,
with dedicated models for passenger cars,
SUVs and, for the rst time, for electric
vehicles and hybrids. In Heavy Tyres, one
of the recent major innovations has been
Nokian Ground King, which is a whole new
kind of a tire for tractor and machine
contracting.
Going forward, we intend to strengthen
our competitive position by accelerating
product innovation. Winter tires will
remain our core business, but the
number of all-season tires will grow as
we strengthen our foothold in Central
Europe and North America. We remain
focused on the most protable premium
segments and larger tire sizes.
In addition to expanding the product
range, we will further develop our
commercial operations and reinforce the
valued Nokian Tyres brand. Inspired by our
renewed purpose
to empower the world
to drive smarter
, we want to become
an even more attractive choice for
customers, consumers and employees.
Raising the bar even higher
with new non-nancial targets
As a sustainability pioneer within the
tire industry, we published ambitious,
new sustainability targets in 2021. We
aim to introduce new environmental
and safety innovations to our products,
reduce CO
2
emissions in line with the
Science Based Targets initiative, further
improve workplace safety, and monitor
the sustainability of our suppliers. As
an example, this means increasing the
share of either recycled or renewable raw
materials in our tires to 50% and reducing
carbon dioxide emissions from the use of
our tires by 25% by 2030.
These targets are ambitious but
achievable. They require close cooper-
ation with dierent stakeholders, the
ability to discover entirely new solutions
and, above all, systematic daily work. Over
the years, we have made many advances
in sustainability: Emissions from our
factories are down, the rolling resistance
of our tires has been reduced and the
number of lost time accidents has fallen
signicantly during the past ve years.
We are also industry pioneers in many
matters relating to bio-based materials.
Our new non-nancial targets will guide
our actions to further improve our
sustainability performance and long-term
competitiveness.
Continuous improvement
is the key to success
Our large investment phase is completed,
and we are well positioned for organic
growth and strong nancial results.
Continuous improvements in operational
and commercial operations will support
future performance, and they will remain
a key focus going into 2022. We optimize
investments and carefully manage capital
employed and ensure it is eiciently used,
allowing us to generate strong cash ow
and reward shareholders.
Success is always built on a top team.
Our strong performance in 2021 is backed
by the talented Nokian Tyres personnel
that has successfully delivered on the
strategy. They have shown great resil-
ience by adapting to the fast-changing
environment and achieving high results,
while constantly living by our values: We
care, we drive innovation, and we deliver
high results – together. This caring
working culture and our sustainable way
of doing business underpin the pride we
have in Nokian Tyres and are undoubtedly
among our key success factors.
A warm thank you to Nokian Tyres’
employees, customers, shareholders and
other stakeholders for your cooperation
and trust. In 2022, we will continue our
work toward even safer, smarter, and
more sustainable driving.
Helsinki, February 8, 2022
Jukka Moisio
President & CEO
REPORT BY THE BOARD OF
DIRECTORS 2021
REPORT BY THE BOARD OF DIRECTORS
AND FINANCIAL STATEMENTS
Demand in the replacement tire market started recovering quickly in
late 2020 and continued to be strong throughout 2021. At the same
time, raw material and logistics costs increased sharply, and there was a
shortage of containers and transport capacity.
Nokian Tyres progressed on its strategy toward EUR 2 billion in net
sales, taking active measures to meet the growing demand and to
reduce the negative impact of cost ination.
In 2021, Nokian Tyres introduced new non-nancial targets. These
targets guide the company’s actions to further strengthen its
sustainability performance and long-term competitiveness.
Net sales by business unit
EUR million 2021 2020
Change
%
CC
1)
Change
%
% of total
net sales
in 2021
2)
% of total
net sales
in 2020
2)
Passenger Car Tyres ,. . .% .% % %
Heavy Tyres . . .% .% % %
Vianor . . .% .% % %
Other operations and
eliminations –. –. –.%
Tota l ,. ,. .% .%
1)
Comparable currencies
2)
Includes internal sales
Net sales and segments operating prot
Net sales in 2021 increased by 30.5% and amounted to EUR 1,714.1 million (2020: 1,313.8;
2019: 1,585.4). With comparable currencies, net sales increased by 29.7%. Currency
exchange rates aected net sales positively by approximately EUR 10 million. Nokian
Tyres’ mid-term nancial growth target is to reach EUR 2 billion in net sales.
Net sales by geographical area
EUR million 2021 2020
Change
%
CC
1)
Change
%
% of total
net sales
in 2021
% of total
net sales
in 2020
Nordics . . .% .% % %
Other Europe . . .% .% % %
Russia and Asia . . .% .% % %
Americas . . .% .% % %
Tota l ,. ,. .% .% % %
1)
Comparable currencies
REPORT BY THE BOARD
OF DIRECTORS
Raw mater it costs (EUR/kg) in manu-
facturing, including inbound logistics
costs, increased by 15% year-over-year,
containing negative currency impact.
Operating prot was EUR 268.2 million
(2020: 120.0; 2019: 316.5). The non-IFRS
exclusions were EUR -56.7 million (–70.2),
including EUR –21.0 million related to
impairment of goodwill and other assets
and EUR –4.6 million related to non-
operative items which are not indicative
of Nokian Tyres’ underlying business
performance. Furthermore, the non-IFRS
exclusions include EUR –31.0 million
(–26.7) related to the US factory ramp-up.
Operating prot percentage was 15.6%
(2020: 9.1%; 2019: 19.8%).
Segments operating prot amounted
to EUR 324.8 million (2020: 190.2; 2019:
337.2) with negative currency impact of
approximately EUR 9 million. Segments
operating prot percentage was 19.0%
(14.5%). Segments ROCE was 15.8% (9.3%).
Nokian Tyres’ mid-term nancial target
for segments operating prot margin and
segments ROCE is at the level of 20%.
Financial items and taxes
Net nancial expenses were EUR 10.0
million (14.0), including net interest
expenses of EUR 7.2 million (8.6). Net
nancial expenses include an expense
of EUR 2.7 million (5.4) due to exchange
rate dierences. Segments prot before
tax was EUR 314.8 million (176.2). Prot
before tax was EUR 258.2 million (106.0)
and taxes were EUR 52.0 million (20.0).
Segments prot for the period amounted
to EUR 254.0 million (144.4). Prot for the
period amounted to EUR 206.2 million
(86.0). Segments earnings per share were
EUR 1.84 (1.04), and earnings per share
were EUR 1.49 (0.62).
Return on equity was 13.1% (2020: 5.2%;
2019: 24.6%, positively impacted by the
tax disputes).
Guidance given for 2021
In Nokian Tyres’ nancial statement
release for 2020 published in February
2021, the company published the
following outlook for the year:
In 2021, Nokian Tyres’ net sales with
comparable currencies and segments
operating prot are expected to grow
signicantly. The global car and tire
demand is expected to pick up, but the
COVID-19 pandemic continues to cause
uncertainties for the development.
Cash ow
In 2021, cash ow from operating
activities was EUR 396.5 million (422.4).
Working capital increased by EUR 5.5
million (decreased by 169.9). Inventories
increased by EUR 70.8 million (decreased
by 25.2) and receivables increased by EUR
22.0 million (decreased by 121.9). Payables
increased by EUR 98.3 million (increased
by 22.8).
Investments
Investments in 2021 amounted to EUR
119.6 million (149.9). Depreciations and
amortizations totaled EUR 140.5 million
(131.1). Impairments were EUR 17.0 million
(24.9).
Financial position on December 31, 2021
EUR million
December
,
December
,
Cash and cash equivalents . .
Interest-bearing liabilities . .
of which current interest-bearing liabilities . .
Interest-bearing net debt –. –.
Unused credit limits
1)
. .
of which committed . .
Gearing ratio, % –.% –.%
Equity ratio, % .% .%
1)
The current credit limits including the EUR 500 million commercial paper program are used to nance
inventories, trade receivables, and subsidiaries in distribution chains, thereby controlling the typical seasonality
in the Group’s cash ow. The credit limits were increased by EUR 100 million with two bilateral back-up facilities in
June 2021.
Segments operating prot by business unit
EUR million
2021 2020
Passenger Car Tyres . .
Heavy Tyres . .
Vianor . .
Other operations and eliminations –. –.
Segments operating prot total . .
Non-IFRS exclusions –. –.
Personnel
2021 2020 2019
1)
Group employees
on average , , ,
at the end of the review period , , ,
in Finland, at the end of the review period , , ,
in Russia, at the end of the review period , , ,
in North America, at the end of the review period
Vianor (own) employees, at the end of the review period
2)
, , ,
1)
Figures corrected to include passive employments in December 2019 (employees on long leaves).
2)
Included in Group employee gures
Investments in omnichannel approach
together with strong sell-out support and
advanced digital solutions helped Nokian
Tyres increase consumer engagement
and loyalty.
Good availability and precise, quick
deliveries especially during season are
an increasingly important part of a
successful tire retail experience. In 2021,
Nokian Tyres continued to develop
its retailer network in order to ensure
eicient distribution.
Nokian Tyres’ distribution network
consists of Nokian Tyres’ own Vianor
service centers and service centers run
by partners, the Nokian Tyres Authorized
Dealer (NAD) partners, the N-Tyre retailers,
and other tire and vehicle retailers as well
as online stores. At the end of 2021, the
number of stores was as follows:
• Vianor: 1,047 (1,117) service centers in
total, of which 872 (943) partners
• NAD: 2,346 (2,282) stores
• N-Tyre: 110 (124) stores
BUSINESS UNIT REVIEWS
Passenger Car Tyres
EUR million 2021 2020 Change %
CC
1)
Change %
Net sales ,. . .% .%
Segment operating prot . .
Segment operating prot, % .% .%
1)
Comparable currencies
In January 2021, Nokian Tyres launched
a new agship range of studded winter
tires, Nokian Hakkapeliitta 10, as well as
studded Nokian Nordman 8 and Nokian
Nordman 8 SUV winter tires. The rst
North American specic all-season tire
for passenger cars and SUVs, the Nokian
Tyres One, was also introduced in January.
For professional and heavy-duty use
in the Central European market, the
company launched the Nokian Snowproof
C winter tire and the Nokian Seasonproof
C all-season tire in May. In October, new
Nordic summer tire range Nokian Hakka
Blue 3 and Nordman SX3 summer tire
for the Nordic and Russian markets
were introduced. Nokian Tyres Outpost
AT, a new all-season tire for SUVs and
light trucks, was launched in November.
In December, Nokian Tyres announced
that it will expand its winter tire range
with new Nokian Tyres Hakkapeliitta R5
Nordic non-studded winter tires as well
as with Nordic studded Nokian Tyres
Hakkapeliitta C4 and Hakkapeliitta CR4
winter tires for vans and delivery vehicles.
Salaries, incentives, and other related
costs in 2021 were EUR 270.7 million
(2020: 224.7; 2019: 235.3).
Research and development
Nokian Tyres’ competitive position is
based on its ability to continually develop
new, innovative and sustainable products.
In 2021, Nokian Tyres introduced a
record number of new tire models.
Approximately 50% of R&D investments is
allocated to product testing. Nokian Tyres’
R&D costs in 2021 totaled EUR 31.9 million
(2020: 22.7; 2019: 22.7), which is 11.0%
(2020: 8.0%; 2019: 8.8%) of the operating
expenses. The increase is driven by the
new test center in Spain and a strong
product pipeline. The test center was
completed during the rst half of 2021.
Sales and distribution
In 2021, Nokian Tyres continued to
develop its go-to-market activities.
In 2021, net sales of Passenger Car Tyres
totaled EUR 1,199.2 million (871.3). With
comparable currencies, net sales were
up by 37.8%. Net sales grew in all main
markets. Average Sales Price with compa-
rable currencies improved.
The share of sales volume of winter
tires was 62% (68%), the share of summer
tires was 23% (20%), and the share of
all-season tires was 15% (12%).
Segment operating prot was EUR
298.7 million (177.8) driven by increased
sales volume. Segment operating prot
percentage was 24.9% (20.4%).
Raw material unit costs (EUR/kg) in
manufacturing, including inbound logis-
tics costs, increased by 15%, containing
negative currency impact.
Production output (pcs) increased by
36% year-over-year. In 2021, 82% (87%)
of passenger car tires (pcs) were manu-
factured in Russia. In the US and Finnish
factories, additional shifts were added to
increase production.
Heavy Tyres
EUR million 2021 2020 Change %
CC
1)
Change %
Net sales . . .% .%
Segment operating prot . .
Segment operating prot, % .% .%
1)
Comparable currencies
In 2021, net sales of Heavy Tyres totaled
EUR 254.0 million (194.6). With comparable
currencies, net sales grew by 28.9% driven
by new product launches and strong
demand in all product segments.
Segment operating prot was EUR
40.3 million (23.7). The increase was due
to higher sales volume and improved
production eiciency supported by
investments in capacity and production
automation.
In 2021, Nokian Heavy Tyres launched
several new sizes for Nokian Hakkapeliitta
TRI and Nokian Ground King product
families. Truck tire oering widened with
new sizes for Nokian E-truck and Nokian
R-truck product families as well as with
a new Nokian Hakka Truck Trailer tire. In
June, the company launched a special
tire, Nokian Ground Kare Semi-Slick,
designed for backhoe loaders operating
on railroads. In September, a new Nokian
TR Forest 2 tractor tire for light and
medium-weight tractors in forestry,
landscaping and light mulching work was
introduced.
Vianor, own operations
EUR million 2021 2020 Change %
CC
1)
Change %
Net sales . . .% .%
Segment operating prot . .
Segment operating prot, % .% .%
Number of own service centers at
period end
1)
Comparable currencies
Segments Total to Nokian Tyres Total reconciliation
1–12/2021 Net sales Cost of sales SGA
Other
operating
income/
expenses
Operating
prot
Financial
income/
expenses Taxes
Prot for the
period
Segments Total ,. –,. –. . . –. –. .
US factory ramp-up –. –. –. . –.
Impairments and write-downs of tangible and intangible assets, and
certain other items –. –. –. . –.
Non-operative items and others –. –. –. –. . –.
Total non-IFRS exclusion –. –. –. –. . –.
Nokian Tyres Total ,. –,. –. . . –. –. .
Nokian Tyres reports non-IFRS gures in addition to its IFRS-reported results. The Segments Total gures exclude costs related to the US factory ramp-up, goodwill impairment charges, restructuring and certain other items, which
are not indicative of Nokian Tyres’ underlying business performance.
In 2021, net sales of Vianor totaled EUR
342.9 million (318.1). With comparable
currencies, net sales increased by
4.2% driven by recovering demand in
all operating countries. Net sales with
comparable currencies grew by 6.1%, when
excluding Vianor US, which was divested in
August 2020.
Segment operating prot was EUR 4.1
million (4.0).
At the end of the review period, Vianor
had 175 (174) own service centers in
Finland, Sweden and Norway.
CORPORATE GOVERNANCE
In its decision-making and administration,
Nokian Tyres adheres to the Finnish
Limited Liability Companies Act, the
Finnish Securities Markets Act and the
rules issued by Nasdaq Helsinki Ltd,
Nokian Tyres’ Articles of Association, and
the Finnish Corporate Governance Code
2020 for listed companies. Nokian Tyres
complies with the code without excep-
tions. The code is published at
www.cgnland./en/.
The Corporate Governance Statement
has been prepared pursuant to the
Finnish Corporate Governance Code 2020
for listed companies and the Securities
Markets Act (Chapter 7, Section 7)
and it
is issued separately from the Board of
Directors’ report. The Board of Directors
has reviewed the Corporate Governance
Statement, and the auditor Ernst & Young
Oy has veried that the Statement has
been issued and that the description of
the main features of the internal control
and risk management systems relating
to the nancial reporting process is
consistent with the nancial statements.
The Corporate Governance Statement
will be published the week commencing
February 28, 2022.
SHARES AND SHAREHOLDERS
At the end of December 2021, the number of shares was 138,921,750.
Number of shares (million units)
1)
31.12.2021 31.12.2020
at the end of period . .
in average . .
in average, diluted . .
1)
Excluding treasury shares
the proposed authorization accounts
for approximately 9.9% of all shares in
the company. The authorization will be
eective until the next AGM, however at
most until June 30, 2022. The authori-
zation canceled the authorization given
to the Board of Directors by the Annual
General Meeting on April 2, 2020.
In April 2020, the Annual General
Meeting authorized the Board of Directors
to resolve to repurchase a maximum of
13,800,000 shares in the company by
using funds in the unrestricted share-
holders’ equity. The proposed number of
shares corresponded to approximately
9.9% of all shares in the company at the
time of the proposal. The authorization
was eective until the Annual General
Meeting of 2021.
In April 2020, the Annual General
Meeting authorized the Board of
Directors to make a decision to oer no
more than 13,800,000 shares through a
share issue, or by granting special rights
under chapter 10, section 1 of the Finnish
Limited Liability Companies Act that
entitle to shares (including convertible
bonds), on one or more occasions. The
maximum number of shares included in
the proposed authorization accounted
for approximately 9.9% of all shares in the
company. The authorization was eective
until the Annual General Meeting of 2021.
The Board did not utilize the authoriza-
tions in 2021.
Own shares
No share repurchases were made during
the review period, and the company did
not possess any own shares on December
31, 2021.
Nokian Tyres has an agreement with a
third-party service provider concerning
the share-based incentive program for
key personnel. The third party owns
Nokian Tyres’ shares related to the incen-
tive program until the shares are given
to the participants of the program. On
December 31, 2021, the number of these
shares was 697,400, reported as treasury
shares (December 31, 2020: 697,400). This
number of shares corresponded to 0.50%
(0.50%) of the total shares and voting
rights in the company.
Trading in shares
A total of 104,975,922 (279,145,453)
Nokian Tyres’ shares were traded in
Nasdaq Helsinki in 2021, representing 76%
(201%) of the company’s overall share
capital. The average daily volume in 2021
was 416,571 shares (1,107,720). Nokian Tyres’
shares are also traded on alternative
exchanges.
Nokian Tyres’ share price was EUR
33.30 (28.82) at the end of 2021. The
volume weighted average share price in
2021 was EUR 31.98 (22.15), the highest
was EUR 36.70 (31.14) and the lowest was
EUR 27.98 (16.38). The company’s market
capitalization at the end of the review
period was EUR 4.6 billion (4.0 billion).
At the end of 2021, the company had
55,898 (58,563) registered shareholders.
The percentage of Finnish shareholders
was 43.2% (42.5%), and 56.8% (57.5%) were
non-Finnish holders and foreign share-
holders registered in the nominee register.
Public sector entities owned 15.2% (13.7%),
nancial and insurance corporations
7.3% (7.2%), households 13.7% (14.4%),
non-prot institutions 3.4% (3.5%), and
private companies 3.6% (3.7%).
Authorizations
In March 2021, the Annual General
Meeting authorized the Board of
Directors to resolve to repurchase a
maximum of 13,800,000 shares in the
company by using funds in the unre-
stricted shareholders’ equity. The number
of shares corresponds to approximately
9.9% of all shares in the company. The
authorization will be eective until the
next AGM, however at most until June
30, 2022. The authorization canceled
the authorization given to the Board of
Directors by the Annual General Meeting
on April 2, 2020.
In March 2021, the Annual General
Meeting authorized the Board of
Directors to resolve to oer no more
than 13,800,000 shares through a share
issue, or by granting special rights under
Chapter 10, Section 1 of the Finnish
Limited Liability Companies Act that
entitle to shares (including convertible
bonds), on one or more occasions. The
Board may decide to issue new shares
or shares held by the company. The
maximum number of shares included in
Major shareholders on December 31, 2021
(Does not include nominee registered shareholders or treasury shares)
Number of
shares
% of share
capital
1. Solidium Oy ,, .
2. Ilmarinen Mutual Pension Insurance Company ,, .
3. Varma Mutual Pension Insurance Company ,, .
4. Elo Mutual Pension Insurance Company ,, .
5. OP-Finland ,, .
6. Mandatum Life Insurance Company Ltd. , .
7. OP-Finland Small Cap , .
8. The State Pension Fund , .
9. Nordea Nordic Small Cap Fund , .
10. Nordea Nordic Fund , .
Changes in ownership
Transaction date Shareholder Threshold
% of shares
and voting
rights
% of shares and
voting rights
through nancial
instruments Total, %
January 13, 2021 BlackRock, Inc Above % .% .% .%
January 14, 2021 BlackRock, Inc Below % Below % Below % Below %
February 2, 2021
Société
Générale SA Below % .% .% .%
February 10, 2021 BlackRock, Inc Above % .% .% .%
February 12, 2021 BlackRock, Inc Below % Below % Below % Below %
February 16, 2021 BlackRock, Inc Above % .% .% .%
February 17, 2021 BlackRock, Inc Below % Below % Below % Below %
February 25, 2021 BlackRock, Inc Above % .% .% .%
March 5, 2021 BlackRock, Inc Below % Below % Below % Below %
March 15, 2021 BlackRock, Inc Above % .% .% .%
March 19, 2021 BlackRock, Inc Below % Below % Below % Below %
April 23, 2021 BlackRock, Inc Above % .% .% .%
April 27, 2021 BlackRock, Inc Below % Below % Below % Below %
June 2, 2021 BlackRock, Inc Above % .% .% .%
June 3, 2021 BlackRock, Inc Below % Below % Below % Below %
June 7, 2021 BlackRock, Inc Above % .% .% .%
June 8, 2021 BlackRock, Inc Below % Below % Below % Below %
June 9, 2021 BlackRock, Inc Above % .% .% .%
June 16, 2021 BlackRock, Inc Below % Below % Below % Below %
June 18, 2021 BlackRock, Inc % level .% .% .%
June 21, 2021 BlackRock, Inc Below % Below % Below % Below %
July 26, 2021 BlackRock, Inc % level .% .% .%
July 27, 2021 BlackRock, Inc Below % Below % Below% Below %
August 6, 2021 BlackRock, Inc % level .% .% .%
August 9, 2021 BlackRock, Inc Below % Below % Below % Below %
August 17, 2021 BlackRock, Inc % level .% .% .%
August 18, 2021 BlackRock, Inc Below % Below % Below % Below %
August 30, 2021 BlackRock, Inc Above % .% .% .%
August 31, 2021 BlackRock, Inc Below % Below % Below % Below %
September 3, 2021 BlackRock, Inc Above % .% .% .%
September 6, 2021 BlackRock, Inc Below % Below % Below % Below %
September 7, 2021 BlackRock, Inc Above % .% .% .%
September 8, 2021 BlackRock, Inc Below % .% .% .%
September 9, 2021 BlackRock, Inc Below % Below % Below % Below %
September 13, 2021 BlackRock, Inc Above % .% .% .%
September 14, 2021 BlackRock, Inc Below % Below % Below % Below %
September 22, 2021 BlackRock, Inc Above % .% .% .%
September 23, 2021 BlackRock, Inc Below % Below % Below % Below %
Detailed information on notications of change in shareholding can be found at
www.nokiantyres.com/company/investors/share/agging-notications/.
Shareholdings of the Board of Directors, the President and
CEO, and the Management Team on December 31, 2021
Board of Directors Number of shares
Jukka Hienonen, Chairman ,
Pekka Vauramo, Deputy Chairman ,
Heikki Allonen, member ,
Raimo Lind, member ,
Veronica Lindholm, member ,
Inka Mero, member ,
Christopher Ostrander, member
Jouko Pölönen, member ,
George Rietbergen, member ,
Tot a l ,
President and CEO Number of shares
Jukka Moisio ,
Management Team Number of shares
Päivi Antola, Corporate Communications & IR ,
Anna Hyvönen, North America, Nordics & Vianor ,
Adrian Kaczmarczyk, Supply Operations
Teemu Kangas-Kärki, Finance ,
Jukka Kasi, Products & Innovations ,
Bahri Kurter, Central Europe
Päivi Leskinen, Human Resources
Andrey Pantyukhov, Russia & Asia, Global Marketing ,
Manu Salmi, Heavy Tyres & Nokia Factory ,
Tot a l ,
On December 31, 2021, Nokian Tyres’
Board members and the President and
CEO held a total of 65,677 Nokian Tyres
shares. The shares represent 0.04% of
the total number of votes.
Managers’ transactions
Nokian Tyres announced managers’
transactions on February 11 and May 6.
Read more at https://www.nokiantyres.
com/company/publications/releases/2021/
managementTransactions/.
DECISIONS MADE AT THE
ANNUAL GENERAL MEETING
On March 30, 2021, the Annual General
Meeting of Nokian Tyres adopted the
nancial statements for 2020, discharged
the members of the Board of Directors
and the President and CEO from liability
for the nancial year 2020 and adopted
the company’s Renumeration Report for
governing bodies.
Dividend
The AGM decided that a dividend of EUR
1.20 per share shall be paid from the
nancial year January 1–December 31,
2020 in two instalments. The rst instal-
ment of EUR 0.60 per share was paid on
April 15, 2021 to shareholders who were
registered in the company’s shareholders’
register maintained by Euroclear Finland
Oy on the dividend record date on April
1, 2021. The second instalment of EUR
0.60 per share was paid on December 9,
2021 to shareholders who were registered
in the company’s shareholders’ register
maintained by Euroclear Finland Oy on
the dividend record date on November 4,
2021.
Remuneration for members
of the Board of Directors
The AGM decided that the members
of the Board of Directors be paid the
following remuneration: to the Chairman
of the Board of Directors EUR 102,500 per
year; to the Deputy Chairman and to the
Chairman of the Audit Committee EUR
72,500 per year each, and to members
EUR 50,000 per year each. 60 per cent of
the annual fee will be paid in cash and 40
per cent in Company shares.
Furthermore, the AGM decided on a
meeting fee of EUR 700 for each Board
and Board Committee meeting. For Board
members resident in Europe, the fee
for each meeting in Europe outside a
member’s home country is doubled, and
for each meeting outside Europe the fee
is tripled. For Board members resident
outside Europe, the fee for each meeting
outside a member’s home country is
tripled. If a member participates in a
meeting via telephone or video connec-
tion, the remuneration is EUR 700. Travel
expenses will be compensated in accor-
dance with the company’s travel policy.
Members of the Board of
Directors and Auditors
The AGM decided that the number of the
members of the Board of Directors shall
be nine. Jukka Hienonen, Heikki Allonen,
Raimo Lind, Inka Mero, George Rietbergen,
Pekka Vauramo and Veronica Lindholm
were re-elected as members of the Board
of Directors and Christopher Ostrander
and Jouko Pölönen were elected as new
members of the Board of Directors for a
term ending at the closing of the Annual
General Meeting 2022. Jukka Hienonen
was elected as the Chairman and Pekka
Vauramo as Deputy Chairman of the
Board of Directors.
Ernst & Young Oy, authorized public
accountant rm, was elected as the
company’s auditor for a term ending at
the closing of the Annual General Meeting
of 2022.
Authorizations
The AGM authorized the Board of
Directors to resolve to repurchase a
maximum of 13,800,000 shares in
the company by using funds in the
unrestricted shareholders’ equity. The
proposed number of shares corresponds
to approximately 9.9% of all shares in
the company. The authorization will be
eective until the next AGM, however at
most until June 30, 2022. The authori-
zation canceled the authorization given
to the Board of Directors by the Annual
General Meeting on April 2, 2020.
The AGM authorized the Board of
Directors to resolve to oer no more
than 13,800,000 shares through a share
issue, or by granting special rights under
Chapter 10, Section 1 of the Finnish
Limited Liability Companies Act that
entitle to shares (including convertible
bonds), on one or more occasions. The
Board may decide to issue new shares
or shares held by the company. The
maximum number of shares included in
the proposed authorization accounts
for approximately 9.9% of all shares in
the company. The authorization will be
eective until the next Annual General
Meeting, however at most until June
30, 2022. This authorization canceled
the authorization given to the Board of
Directors by the Annual General Meeting
on April 2, 2020.
BOARD OF DIRECTORS’
WORKING ARRANGEMENTS
In its organizing meeting on March 30,
2021, the Board of Directors elected
Veronica Lindholm as the Chairman and
Jukka Hienonen and Pekka Vauramo
as members of the Personnel and
Remuneration Committee. Further, the
Board of Directors elected Raimo Lind
as the Chairman and Heikki Allonen, Inka
Mero and Jouko Pölönen as members of
the Audit Committee.
SHAREHOLDERS’
NOMINATION BOARD 2021
In June 2021, the following members were
appointed to Nokian Tyres’ Shareholders’
Nomination Board:
• Antti Mäkinen (CEO, Solidium Oy),
appointed by Solidium Oy
• Heikki Westerlund (board professional),
appointed by Bridgestone Corporation
• Mikko Mursula (Chief Investment Oicer,
Ilmarinen Mutual Pension Insurance
Company), appointed by Ilmarinen
Mutual Pension Insurance Company
• Kalle Karppinen (Head of
Research, Nordic Equities, Nordea
Investment Management),
appointed by Nordea Funds
• Jukka Hienonen, Chairman of
the Board, Nokian Tyres plc
The Shareholders’ Nomination Board
proposes to the 2022 Annual General
Meeting that the Board consists of nine
members, the Chairman and the Deputy
Chairman included, and that of the
current Board members Heikki Allonen,
Jukka Hienonen, Veronica Lindholm, Inka
Mero, Christopher Ostrander, Jouko
Pölönen, George Rietbergen and Pekka
Vauramo be re-elected and Susanne Hahn
be elected as a new member to the Board
of Directors for a term ending at the
end of the 2023 Annual General Meeting.
Of the current members, Raimo Lind
has informed that he is not available for
re-election to the Board of Directors.
Jukka Hienonen is proposed to
continue as Chairman and Pekka Vauramo
as Deputy Chairman of the Board of
Directors. All candidates have given
their consent to the election and are
independent of the Company and its
major shareholders.
With regard to the selection procedure
for the members of the Board of
Directors, the Shareholders’ Nomination
Board recommends that shareholders
take a position on the proposal as a whole
at the General Meeting. This recom-
mendation is based on the fact that in
Nokian Tyres, in line with a good Nordic
governance model, the Shareholders’
Nomination Board is separate from the
Board of Directors. The Shareholders’
Nomination Board, in addition to ensuring
that individual nominees for membership
of the Board of Directors possess the
required competencies, is also responsible
for making sure that the proposed Board
of Directors as a whole has the best
possible expertise and experience for
the Company and that the composition
of the Board of Directors meets other
requirements of the Finnish Corporate
Governance Code for listed companies.
The Shareholders’ Nomination Board
proposes that the annual remuneration
to be paid to the members of the Board
of Directors to be elected at the Annual
General Meeting for the term of oice
ending at the close of the Annual General
Meeting 2023 is as follows:
• Chairman of the Board of
Directors EUR 110,000
• Deputy Chairman of the
Board and Chairmen of the
Committees EUR 75,000
• Other members EUR 52,500
For the term commencing in 2021, the
annual remuneration has been as follows:
Chairman of the Board EUR 102,500;
Deputy Chairman of the Board and
Chairman of the Audit Committee EUR
72,500 and other members EUR 50,000.
The Shareholders’ Nomination Board
further proposes that 60% of the annual
fee be paid in cash and 40% in Company
shares.
The meeting fee is proposed to remain
at the current level and thus be EUR 700
for each Board and Board Committee
meeting. For Board members resident
in Europe, the fee for each meeting in
Europe outside a member’s home country
is doubled, and for each meeting outside
Europe the fee is tripled. For Board
members resident outside Europe, the
fee for each meeting outside a member’s
home country is tripled. If a member
participates in a meeting via telephone
or video connection, the remuneration is
proposed to be EUR 700. Travel expenses
are proposed to be compensated in
accordance with the Company’s travel
policy.
CORPORATE SUSTAINABILITY
Nokian Tyres’ non-nancial targets
focus on bringing new environmental
and safety innovations to products,
reducing CO
2
emissions in line with the
Science Based Targets, further improving
workplace safety, and monitoring the
sustainability of suppliers. The new
non-nancial targets were introduced in
September 2021. All non-nancial targets
can be found at www.nokiantyres.com/
company/sustainability/fundamentals/
our-targets-and-achievements/.
In January 2021, Nokian Tyres
announced that its Finnish factory
had earned ISO 45001 certication
for occupational health & safety. The
certication was also awarded to the
premier provider of wheels for heavy OE
and aftermarket applications, Levypyörä,
which Nokian Tyres acquired in 2019.
ISO 45001 certication has been created
to further reduce workplace injuries and
illnesses.
In March, the solar-powered admin-
istration building at Nokian Tyres’ US
production facility earned LEED v4
Gold certication. The accomplishment,
coupled with LEED v4 Silver certication
of the attached production facility, makes
the company’s US facilities one of the
most eco-friendly in the tire industry.
In May, Nokian Tyres earned ISO 14001
certication for its US production facility.
Now all Nokian Tyres’ manufacturing
facilities are certied to the environ-
mental standard.
In June, Nokian Tyres announced that
its logistics center in Finland has a solar
power plant, consisting of 3,160 solar
panels with a combined output of more
than 1,100 kilowatts. All of the electricity
generated by the solar panels is used
by the logistics center, where power is
required for lighting and ventilation, for
example.
In September, Nokian Tyres signed
a 10-year agreement with the Nordic
energy company to supply renewable
wind energy for the electricity used in the
Finnish factory and in Vianor operations
in Finland. Nokian Tyres has used elec-
tricity from entirely renewable sources
in the Finnish factory already since 2019.
The agreement ensures the availability of
green electricity also in the future.
In December, Nokian Tyres was
included in the leadership class by the
Carbon Disclosure Project (CDP) based
on its performance on climate change.
Nokian Tyres scored the second-best
rating of A- for its climate change mitiga-
tion strategy, goals and performance.
In December, the solar-powered Visitor
Center Building at Nokian Tyres’ Spain
Test Center earned LEED v4 Platinum
certication for green building leadership.
Platinum is the highest LEED certication
level. Inspectors highlighted the Visitor
Center’s innovation in design, energy
eiciency and indoor environmental
quality as key drivers of the high certica-
tion level.
As a member of the Global Platform
for Sustainable Natural Rubber, Nokian
Tyres is committed to legal compliance,
community livelihoods, healthy,
functioning ecosystems (including no
deforestation), and respecting all human
rights in natural rubber procurement and
production. This is reected in Nokian
Tyres’ sustainable natural rubber policy
that falls in alignment with GPSNR’s policy
framework. The policy was published in
September and can be found at www.
nokiantyres.com/company/sustainability/
sustainable-natural-rubber-policy/.
Nokian Tyres will publish its Corporate
Sustainability Report for 2021 in spring
2022.
EU Taxonomy
The EU’s new Taxonomy Regulation is
designed to support the transformation
of the EU economy to meet its European
Green Deal objectives, including the 2050
climate-neutrality target. At the core of
the Taxonomy Regulation is the denition
of a sustainable economic activity.
The new Taxonomy classies economic
activities, which can be potentially
aligned with EU’s environmental targets.
There are six environmental targets in
the EU Taxonomy, two of which are now
regulated: Climate Change Mitigation and
Climate Change Adaptation.
Tire industry is included in the
economic activity group Manufacture of
other low carbon technologies in the EU
Taxonomy’s technical screening criteria.
After investigating and consulting on EU
Taxonomy’s technical screening criteria,
following conclusions about Nokian Tyres’
economic activities have been made:
• Car and van tires with low rolling
resistance ratings which are
manufactured by Nokian Tyres have
substantially lower life-cycle carbon
footprint than corresponding average
tires. This is a combined result of low
use phase emissions and industry’s
best-in-class manufacturing emissions.
• At this stage, Nokian Tyres will
exclude all heavy professional tires
as there is no solid comparison data
available of use phase CO
2
emissions
for heavy professional tires.
Manufacture of car and van tires with
low life-cycle greenhouse gas emissions
represented 35% of Nokian Tyres’ total
net sales in 2021. Based on the company’s
assessment, these economic activities
are eligible for the EU Taxonomy criteria.
Share of Opex within the scope of EU
Taxonomy was 31% and share of Capex
within the scope of EU Taxonomy was
26%.
KPI
Total
(EUR million)
Proportion of Taxonomy
eligible economic
activities (%)
Proportion of Taxonomy
non-eligible economic
activities (%)
Net sales , % %
Capital expenditure % %
Operating expenditure % %
The Taxonomy reporting scope and
criteria may change in coming years
as this is the rst reporting round, and
therefore also the gures may not be
comparable between the reporting
periods.
Nokian Tyres’ approach to calculate the
eligibility for the EU Taxonomy is available
at www.nokiantyres.com/company/inves-
tors/nokian-tyres-as-an-investment/noki-
an-tyres-as-a-sustainable-investment/.
Non-Financial Information
Statement
Nokian Tyres publishes an annual
Non-Financial Information Statement
in line with the Requirements of
non-nancial information reporting
according to the Finnish Accounting
Act. The Non-Financial Information
Statement is issued separately from the
Board of Directors’ report. The Board of
Directors has reviewed and signed the
Non-Financial Information Statement.
The Non-Financial Information Statement
will be published the week commencing
February 28, 2022.
OTHER MATTERS
SHARE-BASED LONG-TERM
INCENTIVE SCHEME 2021–2023
FOR THE MANAGEMENT AND
SELECTED KEY EMPLOYEES
OF NOKIAN TYRES PLC
In February 2021, Nokian Tyres announced
that the Board of Directors of Nokian
Tyres plc has decided on a share-based
long-term incentive scheme for the
Company’s management and selected
key employees for years 2021–2023 as a
continuation to the earlier plans decided
in 2019 and 2020. The decision includes
Performance Share Plan 2021 (“PSP 2021”)
as the main structure and Restricted
Share Plan 2021 (“RSP 2021”) as a comple-
mentary structure.
The purpose of the share-based
incentive scheme is to align the goals
of the Company’s shareholders and key
personnel in order to increase the value
of the Company in the long term and to
commit key personnel to the Company
and its strategic targets.
Performance Share Plan 2021
The Performance Share Plan consists
of annually commencing individual
three-year Performance Periods, followed
by the payment of the potential share
reward. The commencement of each
individual Performance Period is subject
to a separate Board approval.
The Performance Period (PSP
2021–2023) commenced eective as of
the beginning of 2021 and the potential
share reward thereunder will be paid in
the rst half of 2024 provided that the
performance targets set by the Board
of Directors are achieved. The potential
reward will be paid partly in shares of
Nokian Tyres plc and partly in cash. Cash
portion of the reward is intended to cover
the taxes arising from the paid reward.
Eligible to participate in PSP 2021–2023
are approximately 220 individuals,
including the members of Nokian Tyres
Management Team.
The potential share reward payable
under the PSP 2021–2023 are based on
the Earnings Per Share (EPS) and Return
on Capital Employed (ROCE). The possible
rewards paid based on the Performance
Period of 2021–2023 will be a maximum of
534,898 gross shares.
If the individual’s employment with
Nokian Tyres terminates before the
payment date of the share reward, the
individual is not, as a main rule, entitled to
any reward based on the plan.
Restricted Share Plan 2021
The purpose of the Restricted Share Plan
is to serve as a complementary long-
term incentive tool, used selectively for
retention of Nokian Tyres key employees.
It consists of annually commencing
individual Restricted Share Plans, each
with a three-year retention period after
which the share rewards granted within
the plan will be paid to the participants in
shares of Nokian Tyres plc and partly in
cash.
The commencement of each individual
plan is subject to a separate Board of
Directors approval.
A precondition for the payment of the
share reward based on the Restricted
Share Plan is that the employment
relationship of the individual participant
with Nokian Tyres continues until
the payment date of the reward. In
addition to this precondition, a nancial
performance criteria is applied to
Nokian Tyres Management Team. The
criteria is a threshold value for Return
on Capital Employed (ROCE), which must
be exceeded for a potential payment of
a share reward based on the Restricted
Share Plan 2021–2023.
The next plan (RSP 2021–2023) within
the Restricted Share Plan structure
commenced eective as of the beginning
of 2021 and the potential share reward
thereunder will be paid in the rst half of
2024. The possible rewards paid based on
RSP 2021–2023 correspond approximately
to a maximum of 120,000 gross shares.
Other terms
Nokian Tyres applies a share ownership
policy to the members of Nokian Tyres
Management Team. According to this
policy each member of the Management
Team is expected to retain in his/her
ownership at least 25% of the shares
received under the share-based incentive
programs of the Company until the
value of his/her share ownership in the
Company corresponds to at least his/her
annual gross base salary.
The Board of Directors anticipates that
no new shares will be issued based on
the share-based incentive scheme and
that the scheme will, therefore, have no
dilutive eect on the registered number
of the Company’s shares.
SIGNIFICANT RISKS AND
UNCERTAINTIES AND
ONGOING DISPUTES
Nokian Tyres’ business and nancial
performance may be aected by several
uncertainties. The Group has adopted
a risk management policy, approved by
the Board of Directors, which supports
the achievement of strategic goals and
ensures business continuity. The Group’s
risk management policy focuses on
managing both the risks pertaining to
business opportunities and the risks
aecting the achievement of the Group’s
goals in the changing operating envi-
ronment. The risk management process
aims to identify and evaluate the risks
and to plan and implement the practical
measures for each risk. Nokian Tyres
describes the overall business risks and
risk management in its annual Corporate
Governance Statement.
For example, the following risks could
potentially have an impact on Nokian
Tyres’ business:
• Nokian Tyres is subject to risks related
to consumer condence and macro-
economic and geopolitical conditions.
Political uncertainties may cause
serious disruption and additional trade
barriers and aect the company’s sales
and credit risk. Economic downturns
may increase trade customers’ payment
problems and Nokian Tyres may need
to recognize impairment of trade
receivables.
• The tire wholesale and retail landscape
is evolving to meet changing consumer
needs. New technologies are fueling
this with increasing digitalization. Failure
to adapt to the changes in the sales
channel could have an adverse eect
on Nokian Tyres’ nancial performance.
• Nokian Tyres’ success is dependent on
its ability to innovate and develop new
products and services that appeal to
its customers and consumers. Despite
extensive testing of its products,
product quality issues and failure
to meet demands of performance
and safety could harm Nokian Tyres’
reputation and have an adverse eect
on its nancial performance.
• Nokian Tyres’ production facilities are
located in Finland, Russia and the US.
Any unexpected production or delivery
breaks at these facilities would have
a negative impact on the company’s
business. Interruptions in logistics could
have a signicant impact on production
and peak season sales.
• Signicant uctuations in raw
material prices may impact margins.
Nokian Tyres sources natural rubber
from producers in countries such
as Indonesia and Malaysia. Although
Nokian Tyres has policies such as the
Supplier Code of Conduct and estab-
lished processes to monitor the working
conditions, it cannot fully control the
actions of its suppliers. Nokian Tyres
continues to expand its supplier port-
folio to mitigate risks related to single
source supplying. The non-compliance
with laws, regulations or standards
by raw material producers, or their
divergence from practices generally
accepted as ethical in the European
Union or the international community,
could have a material adverse eect on
Nokian Tyres’ reputation.
• Tire industry can be subject to risks
caused by climate change, such as
changes in consumer tire preferences,
regulatory changes or impact of
extreme weather events on natural
rubber producers. Nokian Tyres is
committed to reducing GHG emissions
from its operations in order to
combat climate change. Nokian Tyres
calculates the GHG emissions from its
operations annually and reduces them
systematically. More detailed analysis
on Nokian Tyres’ climate change related
risks and opportunities is provided at
www.nokiantyres.com/company/sustain-
ability/environment/climate-change-re-
lated-risks-and-opportunities/.
• Foreign exchange risk consists of
transaction risk and translation risk. The
most signicant currency risks arise
from the Russian ruble, the Swedish
and Norwegian krona, and the US and
Canadian dollar. Approximately 65% of
the Group’s sales are generated outside
of the euro-zone.
• The availability of supporting infor-
mation systems and network services
is crucial to Nokian Tyres. Unplanned
interruption in critical information
systems or network services may cause
disruption to the continuity of opera-
tions. Such systems and services may
also be exposed to cyber attacks that
could cause a leakage of condential
information, violation of data privacy
regulations, theft of know-how and
other intellectual property, production
shutdown or damage to reputation.
• In May 2017, the Finnish Financial
Supervisory Authority led a request for
investigation with the National Bureau
of Investigation regarding possible
securities market oences. In October
2020, the prosecutor announced the
decision to press charges against
a total of six persons who acted as
Board members and the President &
CEO of Nokian Tyres in 2015–2016. The
prosecutor also requests a corporate
ne of a maximum of EUR 850,000
to be imposed on the company. The
prosecutor has also decided to press
charges for suspected abuse of insider
information against four persons who
were employees of Nokian Tyres in
2015. All persons charged deny their
involvement in any criminal activity. The
trial related to these events started at
the District Court of Helsinki in January
2022.
• The COVID-19 pandemic represents
a short-term risk to Nokian Tyres’
business and operating environment.
The company has proactively taken
preventive actions to minimize the
impacts of the pandemic and to
ensure business continuity. Despite
these eorts, the uncertainty over
the duration of the pandemic, the
containment measures and the
resulting slowdown in economic activity
can have a negative impact on Nokian
Tyres’ operations and supply chain as
well as the demand and pricing for the
company’s products.
Nokian Tyres’ risk analysis also pays
special attention on corporate sustain-
ability risks, the most signicant of which
are related to product quality, safety,
environment, and human rights. Analyses
and projects related to information
security, data protection, and customer
information are continuously a special
focus area.
Tax disputes
In May 2019, Nokian Tyres U.S. Finance Oy,
a former subsidiary of Nokian Tyres plc
(ownership: 100% of the shares), received
a negative ruling from the Hämeenlinna
Administrative Court regarding the
company’s appeal against a reassessment
of EUR 18.5 million concerning the years
2007–2013. The company has paid
and recorded the amount in full in the
nancial statements and results for 2013,
2014, and 2017. The company’s appeal
against the court decision was rejected by
Supreme Administrative Court in February
2021.
In April 2021, Nokian Tyres received
a decision from the Tax Administration
concerning a tax audit for the tax years
2015–2016, according to which the
company was obliged to pay a total of
EUR 1.9 million additional taxes, punitive
tax increase and late payment interest.
Taxes have been paid and recognized in
receivables. Nokian Tyres considers the
tax authority’s view unfounded and has
appealed against the decision.
Routine tax audits in Nokian Tyres
Group entities may possibly lead to a
reassessment of taxes.
REVISED STRATEGY AND
UPDATED FINANCIAL TARGETS
In September 2021, Nokian Tyres
announced its revised mid-term strategy
and updated nancial targets. The
company aims for organic growth ahead
of the market and increasing market
share in all key markets. In mid-term,
target is to reach EUR 2 billion in net sales.
The mid-term growth strategy builds
on Nokian Tyres’ competitive strengths,
including high-quality products and
a premium brand, eective supply
chain, leadership in sustainability
and a strong Nokian Tyres team. The
company launched a record number
of new products in 2020–2021 and will
continue to accelerate innovation to
further strengthen its competitiveness
and unique positioning in the premium
tire segment. This expanding product
oering, together with smarter
Go-To-Market strategies and improving
commercial capabilities, will drive top-line
growth. Reinforcing Nokian Tyres’ brand in
the regions will be a key element in closer
collaboration with customers. Protability
improvement will be driven by increasing
volumes and operational eiciency.
Nokian Tyres’ updated mid-term
nancial targets are:
• Growing faster than the market:
Net sales EUR 2 billion
• High returns and protability:
Segments operating prot and
segments ROCE at the level of 20%*
• Growing ordinary dividend: Dividend
above 50% of net earnings
*The Segments Total gures exclude
costs related to the US factory ramp-up,
goodwill impairment charges, restruc-
turing and certain other items, which are
not indicative of Nokian Tyres’ underlying
business performance.
The global car and tire demand is
expected to grow. The COVID-19
pandemic continues to cause uncer-
tainties, including cost ination and
availability challenges, in the whole
automotive value chain. In addition,
current geopolitical situation causes
uncertainties in 2022.
Nokian Tyres net sales growth in 2022
will be driven by an extensive pipeline
of new product launches, together with
continuous improvements in go-to-
market activities. Capital expenditure will
be approximately EUR 150 million on an
annual rolling basis.
In Russia, the sales of new cars
are expected to increase by up to 5%
compared to 2021, with growth expected
only in H2 2022. The growth will be driven
by the signicant deferred demand,
however, it will be limited by continuing
supply constraints. The total replacement
tire market sell-in in Russia in 2022 is
expected to increase by 5–10% compared
to 2021, driven by strong demand and
relatively low carry-over stocks.
The unpredictability in the develop-
ment of the Russian ruble exchange rate
causes uncertainty in 2022. The ruble has
weakened in recent years and the average
THE PROPOSAL FOR
THE USE OF PROFITS BY
BOARD OF DIRECTORS
The distributable funds in the Parent
company total EUR 742.7 million.
The Board of Directors proposes to the
Annual General Meeting that the distrib-
utable funds are to be used as follows:
A dividend of 1.32 EUR/share
be paid out, totaling EUR 182.5 million
retained in equity EUR 560.3 million
Tota l EUR 742.7 million
The Board of Directors also proposes that
the dividend shall be paid in two instal-
ments, in May and in December 2022.
The rst instalment of EUR 0.66 per
share shall be paid to the shareholders
who are registered in the shareholder
register maintained by Euroclear Finland
Oy on the dividend record date of May 2,
2022. The payment date proposed by the
Board of Directors for the rst instalment
is May 11, 2022.
The second instalment of EUR 0.66
per share shall be paid in December. The
second instalment of the dividend shall
be paid to the shareholders who are
registered in the shareholder register
maintained by Euroclear Finland Oy on
the dividend record date, which, together
with the payment date, shall be decided
by the Board of Directors in its meeting
scheduled for November 1, 2022. The
dividend record date for the second
instalment would be November 3, 2022
and the dividend payment date December
9, 2022, at the latest.
No material changes have taken place
in the nancial position of the company
since the end of the nancial year. The
liquidity of the company is good, and the
ASSUMPTIONS FOR 2022
Market situation
The Nordic
countries Russia
Europe (excl.
the Nordic
countries)
North
America
New car sales in 2021 y-o-y % % –% %
Car tire sell-in in 2021 y-o-y % % % %
Car tire demand E2022 (management
estimate) increase increase increase increase
Heavy tire segments
1)
E2022
(management estimate) increase increase increase increase
1)
Nokian Tyres’ core product segments
EUR/RUB was 72.5 in 2019, 82.7 in 2020,
87.2 in 2021, and 85.3 in the beginning of
January 2022.
Raw material and logistics costs
are estimated to increase signicantly
especially in H1 2022 year-on-year.
The demand for Nokian Heavy Tyres’
core products is estimated to continue
strong in 2022. Aftermarket demand is
expected to continue healthy and OEM
demand is expected to grow from 2021
level.
GUIDANCE FOR 2022
In 2022, Nokian Tyres’ net sales with
comparable currencies are expected to
grow signicantly and segments oper-
ating prot is expected to grow.
The global car and tire demand
is expected to grow. The COVID-19
pandemic continues to cause uncer-
tainties, including cost ination and
availability challenges, in the whole
automotive value chain. In addition,
current geopolitical situation causes
uncertainties in 2022.
proposed distribution of prots does not
compromise the nancial standing of the
company as perceived by the Board of
Directors.
In addition, the Board proposes that
the Annual General Meeting authorizes
the Board to resolve on donations in
the aggregate maximum amount of
EUR 250,000 to be made to universities,
institutions of higher education or to
other non-prot or similar purposes
during 2022 and 2023. The Board of
Directors may decide on the donation
recipients, purposes of use, instalments
and other terms of the donations.
Notice to the Annual General Meeting will
be published by the end of March 2022.
Helsinki, February 8, 2022
Nokian Tyres plc
Board of Directors
20212020201920182017
0
1,000
2,000
3,000
4,000
5,000
20212020201920182017
Net sales Segments
operating prot
Segments
operating prot %
EUR million
Segments operating prot %
0
400
800
1,200
1,600
2,000
0
10
20
30
40
50
20212020201920182017
EUR
Segments earnings
per share
Dividend
per share
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
%
0
5
10
15
20
25
20212020201920182017
0
5
10
15
20
25
30
35
20212020201920182017
EUR million
0
50
100
150
200
250
300
20212020201920182017
EUR million
NET SALES BY GEOGRAPHICAL AREA, % NET SALES BY BUSINESS UNIT
1)
, %
2021 2020
Passenger Car Tyres
Heavy Tyres
Vianor
1)
Including internal sales
2021 2020
Nordic countries
Other Europe
Russia and Asia
Americas
NET SALES AND SEGMENTS OPERATING PROFIT* AVERAGE NUMBER OF PERSONNEL
GROSS INVESTMENTS
2021 2020 2019 2018 2017
Net sales, MEUR ,. ,. ,. ,. ,.
Segments operating
prot, MEUR . . . . .
Segments operating
prot % . . . . .
2021 2020 2019 2018 2017
Personnel , , , , ,
2021 2020 2019 2018 2017
Gross Investments . . . . .
SEGMENTS EARNINGS PER SHARE*
AND DIVIDEND PER SHARE
2021 2020 2019 2018 2017
Segments earnings
per share, EUR . . .
)
. .
Dividend per share,
EUR .
)
. . . .
1)
Segments EPS 2019 excl. the impact of the rulings on the tax disputes of
EUR 1.08 were EUR 1.98
2)
The Board’s proposal to the Annual General Meeting
2021 2020 2019 2018 2017
Segments ROCE, % . . . . .
2021 2020 2019 2018 2017
R&D expenses . . . . .
SEGMENTS ROCE*, %
R&D EXPENSES
* Comparable segment gures for 2019–2021, earlier years reported based on IFRS
0
20
40
60
80
20212020201920182017
%
-30
-20
-10
0
10
20212020201920182017
%
20212020201920182017
Net sales Segment
operating prot
Segment
operating prot %
EUR million
Segment operating prot %
0
400
800
1,200
1,600
0
10
20
30
40
0
50
100
150
200
250
300
20212020201920182017
Net sales Segment
operating prot
Segment
operating prot %
EUR million
Segment operating prot %
0
10
20
30
40
50
60
-100
0
100
200
300
400
20212020201920182017
Net sales Segment
operating prot
Segment
operating prot %
EUR million
Segment operating prot %
-3
0
3
6
9
12
2021 2020 2019 2018 2017
Equity ratio . . . . .
2021 2020 2019 2018 2017
Gearing –. –. . –. –.
EQUITY RATIOGEARING
PASSENGER CAR TYRES
Net sales and segment operating profit*
VIANOR
Net sales and segment operating profit*
HEAVY TYRES
Net sales and segment operating profit*
2021 2020 2019 2018 2017
Net sales, MEUR ,. . ,. ,. ,.
Segment operating
prot, MEUR . . . . .
Segment operating
prot, % . . . . .
2021 2020 2019 2018 2017
Net sales, MEUR . . . . .
Segment operating
prot, MEUR . . . . .
Segment operating
prot, % . . . . .
2021 2020 2019 2018 2017
Net sales, MEUR . . . . .
Segment operating
prot, MEUR . . . . –.
Segment operating
prot, % . . . . –.
* Comparable segment gures for 2019–2021, earlier years reported based on IFRS
Figures in EUR million unless otherwise indicated 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Net sales ,. ,. ,. ,. ,. ,. ,. ,. ,. ,. ,.
change, % .% –.% .% .% .% .% –.% –.% –.% .% .%
Operating margin (EBITDA) . . . . . . . . . . .
Depreciation and amortisation . . . . . . . . . . .
Operating prot (EBIT) . . . . . . . . . . .
% of net sales .% .% .% .% .% .% .% .% .% .% .%
Prot before tax . . . . . . . . . . .
% of net sales .% .% .% .% .% .% .% .% .% .% .%
Return on equity, % .% .% .% .% .% .% .% .% .% .% .%
Return on capital employed, % .% .% .% .% .% .% .% .% .% .% .%
Total assets ,. ,. ,. ,. ,. ,. ,. ,. ,. ,. ,.
Interest-bearing net debt –. –. . –. –. –. –. –. –. –. –.
Equity ratio, % .% .% .% .% .% .% .% .% .% .% .%
Gearing, % –.% –.% .% –.% –.% –.% –.% –.% –.% –.% –.%
Net cash from operating activities . . . . . . . . . . .
Capital expenditure . . . . . . . . . . .
% of net sales .% .% .% .% .% .% .% .% .% .% .%
R&D expenditure . . . . . . . . . . .
% of net sales .% .% .% .% .% .% .% .% .% .% .%
Dividends . . . . . . . . . . .
Personnel, average during the year , , , , , , , , , , ,
CONSOLIDATED KEY FINANCIAL INDICATORS
PER SHARE DATA
Key nancial indicators
Figures in EUR million unless otherwise indicated 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Earnings per share, EUR . . . . . . . . . . .
change, % .% –.% .% .% –.% .% .% .% –.% .% .%
Earnings per share (diluted), EUR . . . . . . . . . . .
change, % .% –.% .% .% –.% .% .% .% –.% .% .%
Cash ow per share, EUR . . . . . . . . . . .
change, % –.% .% –.% .% –.% .% –.% .% –.% .% –.%
Dividend per share, EUR .
)
. . . . . . . . . .
Dividend pay out ratio, % .% .% .% .% .% .% .% .% .% .% .%
Equity per share, EUR . . . . . . . . . . .
P/E ratio . . . . . . . . . . .
Dividend yield, % .% .% .% .% .% .% .% .% .% .% .%
Market capitalisation 31 December ,. ,. ,. ,. ,. ,. ,. ,. ,. ,. ,.
Number of shares during the year, average, million units . . . . . . . . . . .
diluted, million units . . . . . . . . . . .
Number of shares 31 December, million units . . . . . . . . . . .
Number of shares entitled to a dividend, million units . . . . . . . . . . .
1)
The Board’s proposal to the Annual General meeting
Denitions
Return on equity, % =
Prot for the period
× 100
Total equity (average)
Return on capital employed, % =
Prot before tax + interest and other nancial expenses
× 100
Total assets – non-interest-bearing debt (average)
Equity ratio, % =
Total equity
× 100
Total assets – advances received
Gearing, % =
Interest-bearing net debt
× 100
Total equity
Earnings per share, EUR =
Prot for the period attributable to the equity holders of the parent
Average adjusted number of shares
1)
during the year
Earnings per share (diluted
2)
), EUR =
Prot for the period attributable to the equity holders of the parent
Average adjusted and diluted
2)
number
1)
of shares during the year
Cash ow per share, EUR =
Cash ow from operations
Average adjusted number of shares
1)
during the year
Dividend per share, EUR =
Dividend for the year
Number of shares entitled to a dividend
Dividend pay-out ratio, % =
Dividend for the year
× 100
Net prot
Equity per share, EUR =
Equity attributable to equity holders of the parent
Adjusted number of shares
1)
on the balance sheet date
P/E ratio =
Share price, 31 December
Earnings per share
Dividend yield, % =
Dividend per share
Share price, 31 December
1)
without treasury shares
2)
the share options aect the dilution as the average share market price for the nancial year exceeds the dened subscription price
CONSOLIDATED KEY FINANCIAL INDICATORS
This report is a translation. The original Finnish is the authoritative version.
FINANCIAL STATEMENTS 2021
CONSOLIDATED INCOME STATEMENT, IFRS
EUR million 1.1.–31.12. Notes 2021 2020
Net sales () 1,714.1 1,313.8
Cost of sales ()()() –1,162.1 –913.4
Gross prot 552.0 400.4
Other operating income () 2.9 4.8
Selling, marketing and R&D expenses ()() –197.3 –177.6
Administration expenses ()()() –89.1 –84.8
Other operating expenses (5)(7)(8) –0.3 –22.8
Operating prot 268.2 120.0
Financial income () 76.4 114.4
Financial expenses () –86.3 –128.4
Prot before tax 258.2 106.0
Tax expense () –52.0 –20.0
Prot for the period 206.2 86.0
Attributable to:
Equity holders of the parent 206.2 86.0
Earnings per share (EPS) for the prot attributable
to the equity holders of the parent: ()
Basic, euros 1.49 0.62
Diluted, euros 1.49 0.62
EUR million 1.1.–31.12. Notes 2021 2020
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Result for the period 206.2 86.0
Other comprehensive income, items that may be
reclassied subsequently to prot and loss, net of tax
Cash ow hedges () 4.4 –1.1
Translation dierences on foreign operations 54.5 –168.7
Total other comprehensive income for the period, net of
tax 58.9 –169.7
Total comprehensive income for the period 265.1 –83.8
Total comprehensive income attributable to:
Equity holders of the parent 265.1 –83.8
Consolidated income statement
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION, IFRS
EUR million 31.12. Notes 2021 2020
ASSETS
Non-current assets
Property, plant and equipment () 870.9 824.9
Right of use assets () 153.5 152.0
Goodwill () 65.3 79.2
Other intangible assets () 21.7 23.6
Investments in associates () 0.1 0.1
Non-current nancial investments () 2.9 2.7
Other receivables ()() 6.2 5.7
Deferred tax assets () 21.6 21.6
Current assets
Inventories () 415.1 329.4
Trade and other receivables ()() 431.6 382.9
Current tax assets 8.9 10.3
Cash and cash equivalents () 385.9 504.2
Total assets () 2,383.5 2,336.7
EUR million 31.12. Notes 2021 2020
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent ()()
Share capital 25.4 25.4
Share premium 181.4 181.4
Treasury shares –17.6 –18.2
Translation reserve –393.0 –447.5
Fair value and hedging reserves 1.6 –2.8
Paid-up unrestricted equity reserve 238.2 238.2
Retained earnings 1,591.5 1,544.9
Total equity 1,627.6 1,521.3
Liabilities
Non-current liabilities
Deferred tax liabilities () 37.8 32.6
Interest-bearing liabilities ()() 246.9 257.3
Other liabilities 0.9 0.9
Current liabilities
Trade and other payables () 410.6 281.3
Current tax liabilities 13.5 6.4
Provisions () 5.8 7.1
Interest-bearing liabilities ()() 40.3 229.7
Total liabilities () 755.9 815.3
Total equity and liabilities 2,383.5 2,336.7
Changes in net working capital arising from operative business are partly covered by EUR 500 million domestic
commercial paper programme.
Interest-bearing liabilities include EUR 118.5 million of non-current and EUR 39 .4 million of current lease liabilities.
Consolidated statement of nancial position
EUR million 1.1.–31.12. Notes 2021 2020
Prot for the period 206.2 86.0
Adjustments for
Depreciation, amortisation and impairment () 157.5 156.0
Financial income and expenses ()() 10.0 14.0
Gains and losses on sale of intangible assets, other
changes 12.9 4.9
Income Taxes () 52.0 20
Cash ow before changes in working capital 438.6 280.8
Changes in working capital
Current receivables, non-interest-bearing,
increase (–) / decrease (+) –22.0 121.9
Inventories, increase (–) / decrease (+) –70.8 25.2
Current liabilities, non-interest-bearing,
increase (+) / decrease (–) 98.3 22.8
Changes in working capital 5.5 169.9
Financial items and taxes
Interest and other nancial items, received 1.7 1.5
Interest and other nancial items, paid –9.1 –7.8
Income taxes paid –40.2 –22.0
Financial items and taxes –47.6 –28.3
Cash ow from operating activities (A) 396.5 422.4
Cash ows from investing activities
Acquisitions of property, plant and equipment and
intangible assets ()() –119.6 –149.9
Proceeds from sale of property, plant and equipment and
intangible assets 1.7 8.7
Other cash ow from investing activities –0.8 0.6
Cash ows from investing activities (B) –118.7 –140.6
EUR million 1.1.–31.12. Notes 2021 2020
Cash ow from nancing activities
Purchase of treasury shares () – –10.2
Change in current nancial receivables,
increase (–) / decrease (+) 1.4 0.5
Change in non-current nancial receivables,
increase (–) / decrease (+) 0.4 –2.2
Change in current nancial borrowings,
increase (+) / decrease (–) –203.4 203.4
Change in non-current nancial borrowings,
increase (+) / decrease (–) –0.9 –0.9
Payment of lease liabilities –38.5 –28.4
Dividends received 0.0 0.0
Dividends paid –158.7 –151.6
Cash ow from nancing activities (C) –399.8 10.7
Change in cash and cash equivalents,
increase (+) / decrease (–) (A+B+C) –122.0 292.5
Cash and cash equivalents at the beginning of the period 504.2 218.8
Eect of exchange rate uctuations on cash held 3.7 –7.2
Cash and cash equivalents at the end of the period () 385.9 504.2
CONSOLIDATED STATEMENT OF
CASH FLOWS, IFRS
Consolidated statement of cash ows
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY, IFRS
Equity attributable to equity holders of the parent
EUR million Notes Share capital
Share
premium
Treasury
shares
Translation
reserve
Fair value
and hedging
reserves
Paid-up
unrestricted
equity
reserve
Retained
earnings Total equity
Equity, 1 Jan 2020 25.4 181.4 –8.0 –278.8 –1.8 238.2 1,613.3 1,769.7
Prot for the period 86.0 86.0
Other comprehensive income, net of tax:
Cash ow hedges –1.1 –1.1
Net investment hedge –
Translation dierences –168.7 –168.7
Total comprehensive income for the period –168.7 –1.1 86.0 –83.8
Dividends paid () –158.1 –158.1
Acquisition of treasury shares –10.2 –10.2
Share-based payments () 3.7 3.7
Other changes –
Total transactions with owners for the period –10.2 –154.4 –164.6
Equity, 31 Dec 2020 25.4 181.4 –18.2 –447.5 –2.8 238.2 1,544.9 1,521.3
Equity, 1 Jan 2021 25.4 181.4 –18.2 –447.5 –2.8 238.2 1,544.9 1,521.3
Prot for the period 206.2 206.2
Other comprehensive income, net of tax:
Cash ow hedges 4.4 4.4
Net investment hedge –
Translation dierences 54.5 54.5
Total comprehensive income for the period 54.5 4.4 206.2 265.1
Dividends paid () –165.9 –165.9
Acquisition of treasury shares –
Share-based payments () 6.8 6.8
Other changes 0.7 –0.5 0.2
Total transactions with owners for the period 0.7 –159.5 –158.9
Equity, 31 Dec 2021 25.4 181.4 –17.6 –393.0 1.6 238.2 1,591.5 1,627.6
Consolidated statement of changes in equity
Basic information
the Finnish laws and domiciled in the city
of Nokia . The shares of Nokian Tyres Plc
have been quoted on Nasdaq Helsinki Oy
since 1995.
The Board of Directors of Nokian Tyres
for publication at its meeting on February
8, 2022. In accordance with the Finnish
Limited Liability Companies Act, the
shareholders can approve or reject the
nancial statements or make a decision
on altering the nancial statements in the
Annual General Meeting arranged after its
publication. A copy of the consolidated
nancial statements is available from the
company’s headquarters at Pirkkalaistie 7,
Basis of preparation
The consolidated nancial statements
have been prepared in accordance with
the International Financial Reporting
Standards and in compliance with the
IAS and IFRS standards as well as the
SIC and IFRIC interpretations in force
on December 31, 2021. The International
Financial Reporting Standards refer to
the standards and related interpretations
to be applied within the Community as
provided in the Finnish Accounting Act
and the provisions issued on the basis
of this Act, and in accordance with the
procedure laid down in Regulation (EC) No.
1606/2002 of the European Parliament
and of the Council on the application
of international accounting standards.
The notes to the consolidated nancial
statements also comply with the Finnish
accounting and corporate laws.
The information in the nancial
statements is presented in millions of
euros and is prepared under the historical
cost convention except as disclosed in
the following accounting policies.
New and amended standards
and interpretations (IAS 8.28)
For the rst time, the Group applied for
certain standards and amendments that
are eective for annual periods beginning
on or after January 1, 2021 (unless
otherwise stated). The Group has not
previously adopted any other standard,
interpretation, or amendment that has
been issued but that is not yet eective.
• Interest Rate Benchmark Reform
– Phase 2: Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4, and IFRS 16
• COVID-19 Related Rent
Concessions beyond June 30,
2021 Amendments to IFRS 16
These amendments had no impact on the
consolidated nancial statements of the
Group.
Standards that have been issued
but that are not yet eective
The new and amended standards and
interpretations relevant to the Group
that are issued, but not yet eective, up
to the date of issuance of the Group’s
nancial statements are disclosed below.
The Group intends to adopt these new
and amended standards and interpreta-
tions, if applicable, when they become
eective.
• Amendments to IAS 1: Classication
of Liabilities as Current or
Non-current (1/1/2023)
• Property, Plant, and Equipment:
Proceeds before the Intended Use
– Amendments to IAS 16 (1/1/2022)
• Onerous Contracts – Costs of
Fullling a Contract – Amendments
to IAS 37 (1/1/2022)
• IFRS 9 Financial Instruments – Fees in
the ‘10 percent’ test for the derecog-
nition of nancial liabilities (1/1/2022)
• Denition of Accounting Estimates
– Amendments to IAS 8 (1/1/2023)
• Disclosure of Accounting Policies
– Amendments to IAS 1 and IFRS
Practice Statement 2 (1/1/2023)
The Group is currently assessing the
impact of the amendments to determine
the impact that they will have on the
Group’s accounting policy disclosures.
The IFRS are under constant develop-
ment. The Group will adopt each standard
and interpretation on the eective date
or from the beginning of the following
nancial period.
Use of estimates
The preparation of the consolidated
nancial statements in accordance with
the IFRS standards requires the Group
management to use estimates and
assumptions that aect the amount of
assets and liabilities shown in the state-
ment of nancial position at the time of
preparation, the presentation of contin-
gent assets and liabilities in the nancial
statements, and the amount of revenues
and expenses during the reporting
period. Estimates have been used to
determine the number of items reported
in the nancial statements, measure
assets (Notes 13, 14, 15), test goodwill
and other assets for impairment (Note
14), and for the future use of deferred
tax assets (Note 19). The estimates made
in the context of the preparation of
nancial statements are based on the
management’s best judgment at the end
of the reporting period. The realization
ACCOUNTING POLICIES FOR THE
CONSOLIDATED FINANCIAL STATEMENTS
Accounting policies for the
consolidated nancial statements
of the estimates and assumptions is
continuously monitored.
In 2021, the uncertainties caused by
the COVID-19 pandemic have decreased
and the demand in the tire industry has
clearly improved from the situation in the
nancial year 2020.
Estimates requiring the management’s
judgment are related to the depreciation
of assets. The company also estimated
the impact of the COVID-19 pandemic
in terms of depreciation. The COVID-19
pandemic did not aect the carrying
amounts of assets or any write-downs
made during this or the previous nancial
year. The write-downs and management
estimates are described in more detail in
Note 14.
The company updated its model
concerning anticipated credit losses in
late 2020. The update of the model did
not cause a signicant increase in the
anticipated credit losses for the trade
receivables in 2020 or 2021. Credit losses
and the maturity and depreciation of
trade receivables are discussed in Note 29.
The group follows the IFRS 16 stan-
dard’s guidelines when determining lease
periods. For lease contracts that have
been dened as valid until further notice,
an expected lease term pursuant to the
management’s judgment is applied. The
determination of the expected lease
term also considers the nancial impacts
of any sanctions included in the lease
contracts, such as sanctions related to
the early termination of the contract.
Options for extending and terminating
the lease term have been considered
when determining the length of the lease
term, pursuant to the guidelines of the
standard. The extension option is counted
into the lease term if it is reasonably
certain that the option will be used and,
correspondingly, if it is reasonably certain
that the option to terminate will not be
used, the term covered by the option is
counted into the lease term. Whenever a
contract contains a lease component and
a non-lease component, the group sepa-
rates the non-lease components, such
as maintenance, services, etc. using the
separate prices that are listed in the lease
contracts or on the basis of an estimate.
If the lease term is valid until further
notice, the management’s judgment will
be applied and, accordingly, the contracts
will be booked for three years.
The company’s risks include strategic,
operational, and nancial risks. The key
risks included in the estimates include the
country risk as well as the risks related to
the challenging tire pricing environment
related to the development of raw
material prices. The risks are regularly
monitored and assessed as part of the
risk management program. The most
signicant risks are presented in Note 33.
By the time of the approval of the
nancial statements, the company is
not aware of such major sources of
estimation uncertainty at the end of
the reporting period nor of such key
assumptions concerning the future that
might have a signicant risk of causing
a material adjustment to the carrying
amounts of assets and liabilities within
the next nancial year.
Decisions based on
management judgment
The management has exercised separate
judgment as regards the recognition
of the cloud service deployment costs,
as was assessed in the meeting of the
recognition criteria under the decision
issued by IFRIC in spring 2021. The
company’s management estimated the
completed and current cloud service
contracts and determined that the
amount of recognised deployment costs
is minor in comparison to the carrying
amount of the entire group’s intangible
assets. The commissioning costs for
cloud services will be recognised when the
company is able to specify the recognised
commodity and the commodity is under
the company’s control.
The material part of the company’s
sales consists of standard sales of goods
between companies, where invoicing
occurs with standard terms upon goods
delivery, and which involves no substantial
need for estimates. However, the compa-
ny’s management has exercised judgment
when estimating the time when control
over the product is transferred away from
the company under reseller agreements.
Principles of consolidation
The consolidated nancial statements
include the nancial statements of the
parent company Nokian Tyres Plc as well
as all the subsidiaries in which the Parent
company owns, directly or indirectly, more
than 50% of the voting rights or in which
the Parent company otherwise exercises
control. Control exists when the Group,
through participation in an investee, is
exposed or entitled to its variable returns
and is able to aect the returns through
exercising power over the investee.
Associated companies in which the
Group has 20% to 50% of the voting
rights and in which it exercises signicant
inuence, but not control, have been
consolidated using the equity method.
If the Group’s share of the associated
company’s losses exceeds its holding in
the associated company, the carrying
amount will be recorded in the statement
of nancial position at nil value. Losses
in excess of that value will be ignored
unless the Group has obligations toward
the associated companies. Investments in
associates include the carrying amount of
the investment in an associated company
according to the equity method, and any
possible other non-current investments
in the associated company, which are, in
substance, part of a net investment in
the associated company. The Group has
no associated companies at the end of
nancial year 2020 or 2021.
A joint arrangement refers to a
contractual undertaking, in which the
Group has agreed to share control over
material nancial and business principles
with one or more parties. A joint arrange-
ment is either a joint operation or a joint
venture. In a joint venture, the Group
holds rights to the net assets of the
arrangement, whereas in a joint operation,
the Group holds rights to the assets and
carries obligations on the liabilities of the
arrangement. Nokianvirran Energia Oy
is a joint operation as the parties share
control according to a specic Mankala
principle where the company is not
intended to make prot while the parties
have agreed to utilize the total output.
Nokianvirran Energia Oy is accounted for
as a Group company using the propor-
tionate consolidation method on each
row according to the 32.3% shareholding.
The acquired subsidiaries have been
consolidated using the acquisition
method, according to which the acquired
company’s assets and liabilities are
measured at fair value on the date
of acquisition. The cost of goodwill is
the excess of the cost of the business
combination over the acquirer’s interest
in the net fair value of the identiable
assets, liabilities and contingent liabilities.
Acquisition-related costs, except for the
costs to issue debt or equity securities,
are expensed. Possible contingent
consideration is measured at fair value on
the date of acquisition and is classied
as a liability. Contingent consideration
classied as a liability is measured at fair
value on each reporting date and the
following gain or loss is recognised in the
income statement. Under IFRS, goodwill
is not amortized but is rather tested
annually for impairment. Subsidiaries
acquired during the nancial year have
been consolidated from the acquisition
date and those divested until the divest-
ment date.
All internal transactions, receivables,
liabilities, and unrealized margins as well
as the distribution of prots within the
Group are eliminated while preparing the
consolidated nancial statements.
Foreign currency items
Transactions in foreign currencies have
been recorded at the exchange rates
eective on the transaction date. In
the statement of nancial position, all
items in foreign currencies unsettled
on the reporting date are measured
at the European Central Bank’s closing
exchange rate. The quotations of the
relevant central bank are applied if the
European Central Bank does not quote
a specic currency. Foreign exchange
gains and losses related to business
operations and nancing activities have
been recorded under nancial income
and expenses.
Foreign Group companies
The statements of the nancial position
of foreign subsidiaries have been
converted into euros using the European
Central Bank’s closing rates, and the
monthly income statements use the
average rate for the period. The conver-
sion dierences arising from the subsid-
iaries’ income statements and statements
of nancial position have been recorded
under other comprehensive income and
in the conversion reserve within equity
as a separate item. The conversion
dierences arising from the elimination
of foreign company acquisition cost and
from the prots and losses incurred
after the acquisition have been recorded
under other comprehensive income as
a separate item and in the translation
reserve within equity. If the settlement
of a loan to a foreign operation is neither
planned nor likely to occur in the foresee-
able future, then the loan is considered
as a net investment in a foreign operation
and the foreign exchange gains and
losses arising on the item are recognised
in other comprehensive income and
accumulated in the translation reserve in
equity.
When a subsidiary is divested fully or in
part, the related accumulated conversion
dierences are brought from equity to
the income statement and entered as a
gain or loss on the sale.
Cash and cash equivalents
Cash and cash equivalents include cash
on hand and other current investments,
such as commercial papers and bank
deposits.
Financial assets and liabilities
Classication of nancial instruments
When recognising a nancial asset in its
statement of nancial position, the Group
classies it into one of the following
measurement categories:
• Amortised cost
• Fair value through other
comprehensive income
• Fair value through prot or loss.
These categories apply to subsequent
measurement and prot or loss recog-
nition. The classication is based on the
business model for managing the asset
and the contractual cash ow character-
istics of the asset.
A nancial asset is classied as
subsequently measured at amortized
cost when the objective is to hold
nancial assets to collect contractual
cash ows that are payments of principal
and interest on the principal amount
outstanding. In the Group, in principle this
measurement category includes trade
receivables, loan receivables, and cash
and cash equivalents, including liquid
short-term investments in money market
instruments.
A debt instrument in the nancial
assets is classied as subsequently
measured at fair value through other
comprehensive income when the objec-
tive is to both hold the nancial assets
to collect contractual cash ows that are
payments of principal and interest on the
principal amount outstanding and sell the
nancial assets.
If there are business objectives for the
holding of a nancial asset other than the
foresaid, it is classied as subsequently
measured at fair value through prot or
loss. The Group’s derivative assets are
included in this category. However, when
recognizing an investment in an equity
instrument in its statement of nancial
position, the Group may make an irre-
vocable election to present subsequent
changes in fair value in other compre-
hensive income. The election is made on
an instrument-by-instrument basis. The
Group typically designates investments in
quoted and unquoted shares that are not
held for trading as at fair value through
other comprehensive income.
The measurement category of a
nancial liability is either at amortized
cost or at fair value through prot or
loss. A nancial liability is classied as
at fair value through prot or loss if it
is held-for-trading, is a derivative, or is
specically designated as such. Other
nancial liabilities are subsequently
measured at amortized cost. The nancial
liabilities of the Group are classied as
measured at amortized cost except for
derivative liabilities.
Measurement of nancial instruments
At initial recognition, all nancial assets
and liabilities are measured at fair value
taking into account any transaction
costs, and in the statement of nancial
position, they are included in current or
non-current assets or liabilities depending
on the maturity of the item. Financial
assets and nancial liabilities are subse-
quently measured at amortized cost, at
fair value through other comprehensive
income, or at fair value through prot or
loss in accordance with the measurement
category of the item.
Impairment of nancial assets
At each reporting date, the Group
recognizes a loss allowance for expected
credit losses on a nancial asset that is
not measured at fair value through prot
or loss. When measuring the expected
credit losses, the Group reviews the
actual credit losses, current conditions,
and forecasts of the future economic
conditions.
For trade receivables, the Group
follows the simplied approach whereby
the impairment recognised in trade
receivables corresponds to the lifetime
expected credit losses for trade
receivables.
Derivative nancial instruments
and hedge accounting
The Group may hold derivative nancial
instruments to hedge its interest rate,
foreign currency, and commodity price
risk exposures. Derivatives are recognised
initially at fair value and subsequently
measured at fair value. Publicly quoted
market prices and rates as well as the
generally used measurement models are
used to dene the fair value of deriva-
tives. The data and assumptions used in
the measurement models are based on
veriable market prices and values.
Fair value changes of derivatives are
recognised in prot or loss unless the
derivative is part of a hedging relationship
when fair value changes are recognised
according to the hedge accounting
standards for hedging relationships.
In general, hedge accounting is not
applied to the derivatives used to hedge
cash ows from the Group’s business
operations in foreign currencies.
Hedge accounting can be used to
reduce the volatility in the income
statement caused by the items measured
at fair value through prot or loss. Hedge
accounting eliminates the accounting
asymmetry between the hedging
instrument and the hedged item as
it enables the aforesaid to aect the
income statement simultaneously. The
Group may designate derivative nancial
instruments as hedging instruments to
hedge the variability in cash ows that
is attributable to changes in foreign
exchange rates, interest rates, and
electricity prices. In addition, the Group
may, if necessary, designate derivative
nancial instruments and other nancial
instruments as hedging instruments in
hedges of foreign exchange risk on a net
investment in a foreign operation.
At the inception of hedge accounting
for a hedging relationship, the Group
designates and documents the hedging
relationship and the risk management
objective and strategy for undertaking
the hedge. The documentation includes
an assessment whether the hedge
eectiveness requirements are met in
the hedging relationship. The Group aims
to use hedging instruments that create
no ineective portion.
Cash ow hedges
In cash ow hedges, the eective portion
of changes in the fair value of the
hedging instrument is recognised in other
comprehensive income and accumulated
in the cash ow hedge reserve in equity.
Any ineective portion of changes in fair
value is recognised immediately in prot
or loss. The amount accumulated in the
cash ow hedge reserve is reclassied to
prot or loss as the hedged item aects
prot or loss.
The Group may apply hedge
accounting to interest rate swaps by
which oating rate borrowings have been
converted into xed rate borrowings
and interest rate and currency swaps
where foreign currency oating rate loan
receivables have been converted into
functional currency oating rate loan
receivables. The gains or losses related to
both the eective and ineective portion
of the hedge are presented in prot or
loss within nancial items.
The price risk of the Group’s forecast
electricity purchases in Finland is hedged
with electricity derivatives to which hedge
accounting is applied. The Group may
separately hedge the two components
of electricity price risk, system price, and
area price dierence, or a combination
of these components. The gain or loss
related to the eective portion of the
hedge is presented in prot or loss within
the cost of sales. The ineective portion
is recognised in prot or loss within other
operating income or expenses.
Hedge of a net investment
in a foreign operation
Hedges of net investments in foreign
operations are accounted for similarly
to cash ow hedges. The eective
portion of changes in the fair value of the
hedging instrument is recognised in other
comprehensive income and accumulated
in the translation reserve in equity. Any
ineective portion of changes in fair
value is recognised immediately in prot
or loss. The amount accumulated in the
translation reserve is reclassied to prot
or loss on the disposal or partial disposal
of the foreign operation.
The Group does not currently have
hedges of a net investment in a foreign
operation.
Revenue recognition
The Nokian Tyres Group develops and
manufactures summer and winter
tires for passenger cars and delivery
vehicles as well as special tires for heavy
machinery. The group also includes the
tire retail chain Vianor. The group also
manufactures retreading materials and
performs tire retreading. The group’s
business units are Passenger Car Tyres,
Heavy Tyres, and Vianor. The chosen
business structure describes, for example,
the dierent nature of the sales revenue
from the business units and the cyclical
nature of their operations. Geographical
areas provide further information on
the regional magnitudes of the business
functions and the various uncertainties
contained within the market. The
company is managed through the
aforementioned business units and
geographical areas.
The company’s performance obligation
is met and the recognition as income
is made when a product or service is
delivered. The sales of services and
products create separate performance
obligations. The material part of the
company’s net sales consists of standard
B2B sales of goods, where invoicing
occurs with standard terms upon goods
delivery. Income for the sales of products
is booked when the signicant risks
and benets related to the ownership
of goods, their right of possession, and
actual control have been transferred to
the buyer in accordance with the terms
of contract, and when the payment is
probable. Net sales also include the sale
of services to a small extent. Income from
services is booked once the services have
been performed. The company’s business
is not characterized by overdue recogni-
tion; instead, there is one performance
obligation that corresponds to a single
recognition date. Invoicing occurs with
standard terms upon goods delivery.
Revenue for both products and
services is reported under net sales.
Even the longest payment terms are a
maximum of 12 months. Therefore, the
nancing component has not been
separately indicated. Refunds have a
minor impact on the nancial statements.
The company mainly operates in the
replacement tire market, where product
refund practices may dier from the
original equipment market. As a rule,
the contract templates that are widely
employed by the group do not allow for
returning products that have already
been sold at the customer’s initiative,
unless the delivery is defective or a
separate provision for this has been made
in the specic contract.
Refunds and other factors aecting
the selling price are monitored when
determining the trading price. When
calculating net sales, sales income is
adjusted with indirect taxes and discounts.
The company mainly sells tires to its own
direct customers, granting them volume-
based discounts. When recognizing goods,
the company considers the discounts
given to customers. During the nancial
year, the estimate is based on customers’
estimates on future volumes and, on the
other hand, on volumes that have already
been realized. At the time of the closing
of the nancial statements, the discount
is based on the realized volume at that
time.
Trade receivables have been recorded
on the balance sheet according to the
originally invoiced amount, and items in
other currencies have been recognised
at the closing rate reported by the
European Central Bank. Trade receivables
will change if the receivables are booked
as a credit loss. There are three types of
credit loss provisions: group-level IFRS 9,
local, and statutory credit loss provision.
Revenue from contracts with customers
is reported under net sales, and credit
losses are reported separately from net
sales under other business expenses.
Advances from customers are not a
material item as regards the nancial
statements or when compared to sales.
Invoiced sales discounts are booked as
refunds for trade receivables. Advances
received from customers are not booked
as trade receivables but instead as debts.
The products sold by the company
have a standard warranty period.
Furthermore, in limited markets, a
so-called Hakka Guarantee is oered for
select Hakka products that covers tire
punctures not covered by the standard
warranty.
Lease agreements
In accordance with IFRS 16, all of the
assets related to lease agreement
(right-of use assets) and future lease
payment obligations (lease liabilities) are
recognised in the statement of nancial
position at the inception of the contract.
Nokian Tyres primarily acts as a lessee.
The vast majority of leases recognised
as Right-of-use assets under IFRS 16
comprise Vianor chain real estate and
warehouses.
The Group as a lessee
Nokian Tyres recognizes a leased asset
and the related lease liability at the lease
commencement date, except for short-
term leases and low value leases.
• A lease is considered short term
if the lease term is 12 months or
less and no option included
• A lease is considered of low value
if the business level materiality
thresholds are not met.
The group applies this guideline to all
asset classes, with the exception of
vehicle leases, which are also recognised
under IFRS 16 even if their contract term
is below 12 months or the related asset is
deemed of low value.
The lease term is determined as the
non-cancelable period of the lease, taking
extension and termination options into
consideration, if it is reasonably certain
that the group will exercise such options.
If the lease term is indenite (valid until
further notice), management judgment
is used to estimate the expected lease
term and the indenite contracts will
be booked on the basis of the planning
period, usually for three years.
Lease liability under IFRS 16 is recorded
at the commencement date of the lease
and measured at the present value of
the lease payments during the lease
term. The criteria used to determine the
discount rate by lease agreement are
the category of the asset, geographical
location, currency, maturity of the
risk-free interest rate, and the lessee’s
credit risk premium. When the agreement
includes a lease component and a
non-lease component, Nokian Tyres
separates the non-lease components,
such as maintenance or services, based
on either the stand-alone prices given
in the lease agreement or by using
estimates. The lease liability is remea-
sured with a corresponding eect to
the related leased asset when there is a
change in the future lease payments due
to contract renegotiation, index changes,
or a reassessment of options.
The leased asset consists of the initial
lease liability and any initial direct costs
less any incentives granted by the lessor.
It is valued at cost less accumulated
depreciation and impairment losses.
Any remeasurement is in line with the
remeasurement of the lease liability. The
right-of-use asset is depreciation in a
straight-line basis over the lease term.
More detail is provided in Note 15.
The Group as a lessor
The lessor will classify each lease
agreement into either nance or
operating lease in accordance with the
IFRS 16 standard. If the lease transfers
substantially all of the risk and rewards
incidental to the ownership of the asset,
it is considered to be a nance lease;
otherwise, the lease is considered to be
an operating lease.
Assets held under nance leases are
recorded in the statement of the nancial
position as receivables at an amount
equal to the net investment in the lease.
Assets held under operating leases are
included in intangible assets and property,
plant, and equipment in the statement
of the nancial position. These assets
are depreciated over their useful lives,
consistent with assets in the company’s
own use. Income from operating leases is
recorded in the income statement on a
straight-line basis over the lease term.
From the Group’s point of view,
operating as a lessor is very limited.
Research and
development costs
Research costs are recognised as part of
selling, marketing, and R&D expenses for
the nancial period in which they incurred.
Development costs are capitalized
once certain criteria associated with
commercial and technical feasibility have
been met. Capitalized development costs
primarily comprising materials, supplies,
and direct labor costs as well as the
related overheads are amortized system-
atically over their expected useful life. The
amortisation period is 3–5 years.
Government grants
Grants received from governments or
other parties are recognised adjustments
to the related expenses in the income
statement for the period. Grants received
for the acquisition of property, plant, and
equipment reduce the acquisition cost.
Operating prot
The Group has dened operating prot
as follows: operating prot is the net sum
of net sales plus other operating income
less the cost of sales, sales, marketing
and R&D expenses, administration
expenses, and other operating expenses.
Operating prot does not include
exchange rate gains or losses.
Borrowing costs
The borrowing costs of items included in
property, plant, and equipment or other
intangible assets, and requiring a substan-
tial construction period, are capitalized
for the period needed to produce the
investment for the intended purpose.
Other borrowing costs are recognised
as expenses for the period in which they
incurred. The Group has not capitalized
borrowing costs in 2020 or 2021.
Income taxes
The tax expense of the Group includes
taxes based on the prot or loss for the
period or the dividend distribution of the
Group companies as well as any change
in deferred tax, and the adjustment of
taxes from prior periods. The penalty
interests on those are recorded as
nancial expenses. The tax impact of
items recorded directly in equity or other
comprehensive income is correspondingly
recognised directly in equity or in other
comprehensive income. The share of
associated companies’ prot or loss is
shown on the income statement calcu-
lated from the net result, and it thereby
includes the impact of taxes.
Deferred taxes are measured with tax
rates enacted by the reporting date, to
reect the net tax eects of all tempo-
rary dierences between the nancial
reporting and the tax bases of assets and
liabilities. The most signicant temporary
dierences arise from the amortisation
and depreciation dierences of intan-
gible assets and property, plant, and
equipment, measuring the net assets
of business combinations at fair value,
measuring nancial assets and hedging
instruments at fair value, internal prots
in inventory and other provisions, appro-
priations, and unused tax losses. Deferred
tax liabilities will also be recognised from
the subsidiaries’ non-distributed retained
earnings if prot distribution is likely and
will result in tax consequences.
Deferred tax assets relating to the
temporary dierences are recognised to
the extent that it is probable that future
taxable prots will be available against
which the asset can be utilised before
expiration. In assessing the recoverability
of deferred tax assets compared to the
expiration of tax losses and the future
taxable prots, the Group relies on
management judgment. Deferred taxes
are not recorded on goodwill that is not
deductible for tax purposes.
Nokian Tyres has reported deferred tax
assets and liabilities in its nancial state-
ments which are expected to be realized
in the prot and loss based on the
management assessment. Management
assessments on uncertain tax situations
are based on external expertise.
Nokian Tyres aims for predictability
and transparency in taxation in dierent
countries. Nokian Tyres’ production
facilities are located in Finland, the United
States and Russia thus the biggest
identied tax uncertainties relate also to
these countries.
OECD, European Union and changing
tax legislation and reporting requirements
in dierent countries create challenges
in taxation and tax reporting. Complying
with the reporting requirements demands
continuous system and process develop-
ment. In Russia Nokian Tyres has invested
in a new tax reporting solution aimed
at increasing transparency between
the company and the tax authority. The
system is expected to be taken in use in
2024. The start of industrial production
in the United States during 2020 has also
increased the challenges to be compliant
with local tax and reporting requirements.
International business environment in
nature exposes to usual tax audits and
disputes in dierent countries. Nokian
Tyres has established a Tax Policy and
harmonized practices in the Group’s
operating countries in order to clarify
responsibilities and to reduce tax risks.
Nokian Tyres does not have signicant
tax disputes ongoing and no specic tax
risks are identied currently. Nokian Tyres
has initiated pre-emptive discussions with
authorities in dierent countries in order
to agree on the taxation of its operations
or changes in the corporate structure to
minimize tax risks.
Earnings per share
Basic earnings per share are calculated by
dividing the prot or loss attributable to
the equity holders of the parent for the
period by the weighted average number
of shares outstanding during the period.
The average number of treasury shares
has been deducted from the number of
shares outstanding.
For the calculation of the diluted
earnings per share, the diluting impact of
all potentially diluting share conversions
have been taken into account. The Group
has had share options and previously also
convertible bonds as diluting instruments.
At present, the Group does not have
either. The dilution of share options has
been computed using the treasury stock
method. In dilution, the denominator
includes the shares obtained through the
assumed conversion of the options, and
the repurchase of treasury shares at the
average market price during the period
with the funds generated by the conver-
sion. The assumed conversion of options
is not taken into account for the calcula-
tion of earnings per share if the eective
share subscription price dened for the
options exceeds the average market price
for the period. The convertible bonds
are assumed to have been traded for
company shares after the issue.
Property, plant, and equipment
The values of the property, plant, and
equipment acquired by the Group
companies are based on their costs.
The assets of acquired subsidiaries are
measured at fair value on the date of
acquisition. Depreciation is calculated
on a straight-line basis from the original
acquisition cost, based on the expected
useful life. Depreciation includes any
impairment losses.
In the statement of nancial position,
the property, plant, and equipment
are stated at cost less accumulated
depreciation and impairment losses. The
borrowing costs of the items included
in property, plant, and equipment, and
requiring a substantial construction
period, are capitalized for the period
needed to produce the investment for
the intended purpose. Other borrowing
costs are recognised as expenses in the
period that they were incurred.
Depreciation is based on the following
expected useful lives:
Buildings 20–40 years
Machinery and equipment 4–20 years
Other tangible assets 10–40 years
Land is not depreciated.
The expected useful lives are reviewed
at each reporting date, and if they dier
materially from previous estimates, the
depreciation schedules are changed
accordingly.
Regular maintenance and repair costs
are recognised as expenses for the
period. Expenses incurred from signicant
modernization or improvement projects
are recorded in the statement of nancial
position if the company gains future
economic benets in excess of the orig-
inally assessed standard of performance
of the existing asset. Modernization and
improvement projects are depreciated on
a straight-line basis over their useful lives.
Gains and losses from the divestment and
disposal of property, plant, and equip-
ment are determined as the dierence
of the net disposal proceeds and the
carrying amounts. Sales gains and losses
are included in the operating prot in the
income statement.
Goodwill and other
intangible assets
Goodwill arising from business combi-
nations is recognised as the amount by
which the aggregate of the transferred
consideration, any non-controlling
interest in what has been acquired, and
any previously held interest exceeds the
fair value of the net assets acquired.
Goodwill is not amortized but is tested for
impairment annually as well as whenever
an indication of possible impairment
exists.
Other intangible assets include
customer relationships, capitalized
development costs, patents, copyrights,
licenses, and software. Intangible rights
acquired in business combinations are
measured at fair value and amortized on
a straight-line basis over their useful lives.
Other intangible assets are measured
at cost and amortized on a straight-line
basis over their useful lives. An intangible
asset is only recorded in the statement
of nancial position if it is probable that
the expected future economic benets
that are attributable to the asset will
ow to the company and cost can be
measured reliably. Subsequent expenses
related to the assets are only recorded in
the statement of nancial position if the
company gains future economic benets
in excess of the originally assessed
standard of performance of the existing
asset; otherwise, costs are recognised as
expenses at the time of occurrence.
In the statement of nancial position,
intangible assets are recorded at cost
less accumulated amortisation and
impairment losses. The borrowing costs of
items included in other intangible assets,
and requiring a substantial construction
period, are capitalized for the period
needed to produce the investment for
the intended purpose. Other borrowing
costs are recognised as expenses in
the period that they are incurred. The
amortisation schedule for intangible
assets is 3–10 years.
Impairment
On the reporting date, the Group shall
assess whether there is any indication
that an asset may be impaired. If any
such indication exists, the recoverable
amount of the asset in question is
estimated. Goodwill and intangible assets
not yet available for use are tested for
impairment at least annually. To assess
impairment, the Group’s assets are
allocated to cash-generating units on the
smallest group that is largely independent
of other units and the cash ows of which
can be separated.
The recoverable amount is the higher
of fair value of the asset less costs to sell
and a value in use. As a rule, value in use
is based on the discounted future cash
ows that the corresponding asset or
the cash-generating unit can derive. The
impairment recognised in the income
statement is the amount by which the
carrying amount of the asset exceeds the
corresponding recoverable amount, and
in the statement of nancial position, it
is allocated rst to reduce the carrying
amount of any goodwill of the unit and
then pro rata against the other assets.
An impairment loss recognised in prior
periods will be reversed if the estimates
used to determine the recoverable
amount change. However, a reversal of
impairment loss shall not exceed the
carrying amount that would have been
determined in the statement of nancial
position without the recognised impair-
ment loss in prior periods. Impairment
loss on goodwill is not reversed under any
circumstances.
Inventories
Inventories are measured at the lower
of cost or the net realizable value. Cost
is primarily determined in accordance
with standard cost accounting. The cost
of nished goods and work in progress
includes raw material purchase costs,
direct manufacturing wages, other
direct manufacturing costs, and a share
of production overheads, borrowing
costs excluded. Net realizable value is
the estimated sales price in ordinary
activities less the costs associated with
the completion of the product and the
estimated necessary costs incurred to
make the sale of the product. Allowance
is recorded in obsolete items.
Dividend
The dividend proposed by the Board of
Directors at the Annual General Meeting
has not been recognised in the nancial
statements. Dividends are only accounted
for on the basis of the decision of the
Annual General Meeting.
Equity
The acquisition cost of treasury shares
repurchased by the Group is recognised
as a deduction in equity. The consider-
ation received for the treasury shares
when sold, net of transaction costs and
tax, is included in equity.
Provisions
A provision is entered into the statement
of nancial position if the Group has a
present legal or constructive obligation as
a result of a past event, and it is probable
that an outow of economic benets
will be required to settle the obligation
and the amount of the obligation can
be reliably estimated. Provisions may be
related to the reorganization of activities,
unprotable agreements, environmental
obligations, trials, and tax risks. Warranty
provisions include the cost of product
replacement during the warranty period.
The products sold by the company
have a standard warranty period.
Furthermore, in limited markets, a
so-called Hakka Guarantee is oered for
select Hakka products that covers tire
punctures not covered by the standard
warranty. The Hakka Guarantee is valid
for one year from the purchase of the
tire, but at most until the tire has worn
down by a predened amount. Activating
the Hakka Guarantee requires the end
customer to register for the service. The
warranty reservation is described in Note
25 to the nancial statements.
Provisions constitute the best
estimates at the statement of nancial
position date and are based on the
past experience of the level of warranty
expenses.
Contingent liabilities and contingent
assets
A contingent liability is a possible
obligation that arises from past events
and whose existence will be conrmed
only by the realization of an uncertain
future event not totally controllable by
the Group. A contingent liability is also
dened as a present obligation that
probably will not require the settlement
of the obligation or that cannot be
measured reliably. A contingent liability is
disclosed in the notes to the consolidated
nancial statements.
Correspondingly, a contingent asset
is a possible asset that arises from
past events and whose existence will
be conrmed only by the realization of
an uncertain future event not totally
controllable by the Group. In case an
inow of economic benets is probable, a
contingent asset is disclosed in the notes
to the consolidated nancial statements.
Employee benets
Pension liabilities
The Group companies have several
pension schemes in dierent countries
based on local conditions and practices.
Payments for dened contribution plans
are recorded as expenses in the income
statement for the period they relate to.
All of the material pension arrangements
in the Group are dened contribution
plans.
Share-based payments
Performance shares are measured at fair
value on the grant date and are expensed
on a straight-line basis over the vesting
period. The equity-settled amounts are
recorded as an increase in equity. The
expense determined on the grant date
is based on the Group’s estimate of the
number of shares that are assumed to
vest at the end of the vesting period. The
impact of non-market-based conditions
(such as net sales and operating prot) is
not included in the fair value of the share;
instead, it is taken into account in the
nal number of shares that are assumed
to vest at the end of the vesting period.
The Group updates the assumption of the
nal number on each reporting date. The
fair values of cash-settled amounts are
similarly updated on each reporting date
and recorded in equity.
Non-current assets held for sale
and discontinued operations
A non-current asset, or a group of
disposable items, is classied as being
held for sale if the amount corresponding
to its carrying amount will primarily be
generated from the sale of the asset
instead of being generated from the
continued use of the asset. Non-current
assets held for sale, and assets related to
discontinued operations, are measured at
their carrying amounts, or the lower fair
value less the costs to sell, if the amount
corresponding to its carrying amount will
primarily be generated from the sale of
the asset and if the sales transaction is
most likely to take place.
A discontinued operation is a part
of the entity that has been divested
or classied as being held for sale and
represents a separate core business area
or a geographic operating area.
The Group’s nancial statements
for 2021 and 2020 do not include any
non-current assets held for sale or any
discontinued operations.
1. OPERATING SEGMENTS
The Group’s management team is the
chief operating decision maker. The
segment information is presented in
respect of the business and geographical
segments. Business segments are based
on the internal organization and nancial
reporting structure. Segment perfor-
mance is evaluated based on operating
result and is measured consistently with
prot or loss in the consolidated nancial
statements.
The business segments comprise
of entities with assets and operating
activities providing products and services.
The segments are managed as separate
entities.
Pricing of inter-segment transactions
is based on current market prices and
the terms of evaluating protability and
resources allocated to segments are
based on prot before interests and
taxes.
Segment assets and liabilities include
items directly attributable to a segment
and items that can be allocated on a
reasonable basis. The unallocated items
contain tax and nancial items together
with joint Group resource items. Capital
expenditure comprises of additions to
intangible assets and property, plant and
equipment used in more than one period.
NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the consolidated
nancial statements
Business segments
Passenger Car Tyres business
unit covers the development
and production of summer
and winter tyres for cars and
vans.
Heavy Tyres business
unit comprises tyres for
forestry machinery, special
tyres for agricultural
machinery, tractors and
industrial machinery as well
as retreading and truck tyre
business.
Vianor tyre chain sells car
and van tyres as well as truck
tyres. In addition to Nokian
Tyres brand, Vianor sells other
leading tyre brands and other
automotive products and
services.
Other operations and
eliminations contain business
development and Group
management unallocated to
the segments and eliminations
between dierent business
segments.
2021
EUR million
Passenger Car
Tyres Heavy Tyres Vianor
Other operations
and eliminations Group
Net sales from external customers ,. . . . ,.
Services . .
Sales of goods ,. . . . ,.
Inter-segment net sales . . . –.
Net sales ,. . . –. ,.
Operating result . . –. –. .
% of net sales .% .% –.% .% .%
Financial income and expenses –.
Prot before tax .
Tax expense –.
Prot for the period .
Assets ,. . . . ,.
Unallocated assets .
Total assets ,.
Liabilities . . . . .
Unallocated liabilities .
Total liabilities .
Capital expenditure . . . . .
Depreciation and amortisation . . . . .
Impairment . . . . .
Operating segments
2020
EUR million
Passenger Car
Tyres Heavy Tyres Vianor
Other operations
and eliminations Group
Net sales from external customers . . . . ,.
Services . .
Sales of goods . . . ,.
Inter-segment net sales . . . –.
Net sales . . . –. ,.
Operating result . . –. –. .
% of net sales .% .% –.% .% .%
Financial income and expenses –.
Prot before tax .
Tax expense –.
Prot for the period .
Assets ,. . . . ,.
Unallocated assets .
Total assets ,.
Liabilities . . . –. .
Unallocated liabilities .
Total liabilities .
Capital expenditure . . . . .
Depreciation and amortisation . . . .
Impairment . . . . .
Notes concerning
geographical segments
The business segments are operating in
four geographic regions: Nordics, Russia
and Asia, Other Europe and Americas.
Other contains items that are not allo-
cated to any geographic region.
In presenting information on the basis of
geographical segments, segment revenue
is based on the location of the customers
and segment assets are based on the
location of the assets.
Geographical information
2021
EUR million Nordics
Russia and
Asia Other Europe Americas Other Group
Net sales . . . . – ,.
Services . . . . – .
Sales of goods . . . . – ,.
Assets . . . . –. ,.
Unallocated assets .
Total assets ,.
Capital expenditure . . . . – .
2020
EUR million Nordics
Russia and
Asia Other Europe Americas Other Group
Net sales . . . . – ,.
Services . . . . – .
Sales of goods . . . . – ,.
Assets . . . . – ,.
Unallocated assets .
Total assets ,.
Capital expenditure . . . . – .
The geographical split of net sales has been adjusted to align with the way in which management monitors the business. International car dealer business is now reported
under geographical areas (previously under Other). 2020 gures have been restated accordingly.
2. ACQUISITIONS
Acquisitions and other changes in 2021
There were no signicant acquisitions or other changes during 2021 (2020).
3. COST OF SALES
EUR million 2021 2020
Raw materials . .
Goods purchased for resale . .
Wages and social security contributions on goods sold . .
Other costs . .
Depreciation of production . .
Sales freights . .
Warehousing . .
Change in inventories –. .
Tota l ,. .
4. OTHER OPERATING INCOME
EUR million 2021 2020
Gains on sale of property, plant and equipment . .
Other income . .
Tota l . .
5. OTHER OPERATING EXPENSES
EUR million 2021 2020
Losses on sale and disposals of tangible xed assets . .
Expensed credit losses and provisions . .
Other expenses . .
Tota l . .
6. AUDITOR’S FEES
EUR million 2021 2020
Audit fee . .
Tax services . .
Other services . .
Tota l . .
Ernst & Young Oy has been the company´s principal auditor since March 30, 2021.
7. DEPRECIATION, AMORTISATION AND IMPAIRMENT LOSSES
EUR million 2021 2020
Depreciation and amortisation by asset category
Intangible rights . .
Other intangible assets . .
Buildings . .
Machinery and equipment . .
Right of use asset . .
Other tangible assets . .
Tota l . .
Impairment losses by asset category
Intangible rights – .
Other intangible assets – .
Buildings . .
Goodwill . .
Machinery and equipment . .
Shares in other companies – .
Tota l . .
Depreciation and amortisation by function
Production . .
Selling, marketing and R&D . .
Administration . .
Other depreciation and amortisation . .
Tota l . .
Impairment losses by function
Production . .
Selling, marketing and R&D . .
Administration . .
Other impairment losses . .
Tota l . .
8. EMPLOYEE BENEFIT EXPENSES
EUR million 2021 2020
Wages and salaries . .
Pension contributions – dened contribution plans . .
Share-based payments . .
Other social security contributions . .
Tota l . .
Information on the employee benets and loans of the key management personnel is
presented in note 34 Related party transactions. Other than production wages and salaries
were EUR 206.3 (179.3) million in 2021.
9. FINANCIAL INCOME
EUR million 2021 2020
Interest income
Financial assets measured at amortized cost . .
Dividend income
Non-current nancial investments measured at fair value through
other comprehensive income . .
Exchange rate gains and changes in fair value
Financial assets and liabilities at amortized cost . .
Foreign currency derivatives . .
Other nancial income . .
Tota l . .
10. FINANCIAL EXPENSES
EUR million 2021 2020
Interest expenses
Financial liabilities measured at amortized cost –. –.
Interest rate derivatives designated as hedges –. –.
Lease liabilities –. –.
Exchange rate losses and changes in fair value
Financial assets and liabilities at amortized cost –. –.
Foreign currency derivatives –. –.
Other nancial expenses –. –.
Tota l –. –.
Income tax relating to components of other comprehensive income:
2021
EUR million
Before tax
amount
Tax
benet
Net of tax
amount
Cash ow hedges . –. .
Translation dierences on foreign operations . .
. –. .
2020
EUR million
Before tax
amount
Tax
benet
Net of tax
amount
Cash ow hedges –. . –.
Translation dierences on foreign operations –. –.
–. . –.
12. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the prot or loss for the period by the
weighted average number of shares outstanding during the period. For the calculation
of the diluted earnings per share, the diluting impact of all potentially diluting share
conversions have been taken into account. The Group has had share options and
previously also convertible bonds as diluting instruments. At present, the Group does
not have either.
EUR million 2021 2020
Prot attributable to the equity holders of the parent . .
Prot for the period to calculate the diluted earnings per share . .
Shares, 1,000 pcs
Weighted average number of shares , ,
Dilutive eect of the options
Diluted weighted average number of shares , ,
Earnings per share, euros
Basic . .
Diluted . .
11. TAX EXPENSE
EUR million 2021 2020
Current tax expense –. –.
Adjustment for prior periods . .
Change in deferred tax –. .
Tota l –. –.
The reconciliation of tax expense recognised in the income statement and tax expense
using the domestic corporate tax rate (2021: 20.0%, 2020: 20.0%):
EUR million 2021 2020
Prot before tax . .
Taxes calculated according to the Finnish tax rate of 20% –. –.
Eect of deviant tax rates in foreign subsidiaries . .
Withholding taxes –. .
Tax exempt revenues . .
Non-deductible expenses –. –.
Losses on which no deferred tax benets recognised . –.
Adjustment for prior periods . .
Change in the recoverability of deferred tax assets . –.
Utilisation of previously unrecognised tax losses . –
Other items . .
Tax expense –. –.
13. PROPERTY, PLANT AND EQUIPMENT
EUR million Land property Buildings
Machinery and
equipment Other tangible assets
Advances and
xed assets under
construction Total
Accumulated cost, 1 Jan 2020 . . ,. . . ,.
Increase . . . . . .
Decrease –. –. –. –. . –.
Transfers between items . . . –. –.
Other changes . . –. . . .
Exchange dierences –. –. –. –. –. –.
Accumulated cost, 31 Dec 2020 . . ,. . . ,.
Accum. Depreciation, 1 Jan 2020 . –. –. –. –.
Depreciation for the period –. –. –. –.
Impairment –. –. –.
Decrease . . . .
Other changes . . . .
Exchange dierences . . . .
Accum. Depreciation, 31 Dec 2020 . –. –. –. –.
Carrying amount, 31 Dec 2020 . . . . . .
Accumulated cost, 1 Jan 2021 . . ,. . . ,.
Increase . . . . . .
Decrease . –. –. –. –. –.
Transfers between items . . . . –. –.
Other changes . . . . . .
Exchange dierences . . . . . .
Accumulated cost, 31 Dec 2021 . . ,. . . ,.
Accum. Depreciation, 1 Jan 2021 –. –. –. –.
Depreciation for the period –. –. –. –.
Impairment –. –. –.
Decrease . . . .
Other changes . –. . .
Exchange dierences –. –. –. –.
Accum. Depreciation, 31 Dec 2021 –. –. –. –,.
Carrying amount, 31 Dec 2021 . . . . . .
In 2021, the Group recorded impairments in the tangible assets for EUR 2.5 (8.2) million based on management’s assessment. The impairments are shown in the table in their own
row.
14. INTANGIBLE ASSETS
EUR million Goodwill
Intangible
rights
Other
intangible
assets Total
Accumulated cost, 1 Jan 2020 . . . .
Increase . . .
Decrease . –. . –.
Transfers between items . . .
Other changes . . –. –.
Exchange dierences –. . –. –.
Accumulated cost, 31 Dec 2020 . . . .
Accum. Depreciation, 1 Jan 2020 . –. –. –.
Depreciation for the period –. –. –.
Impairment –. –. –. –.
Decrease . . . .
Other changes . –. . .
Exchange dierences . . . .
Accum. Depreciation, 31 Dec 2020 –. –. –. –.
Carrying amount, 31 Dec 2020 . . . .
EUR million Goodwill
Intangible
rights
Other
intangible
assets Total
Accumulated cost, 1 Jan 2021 . . . .
Increase . . .
Decrease –. –. –.
Transfers between items . . .
Other changes –. –. . –.
Exchange dierences . . . .
Accumulated cost, 31 Dec 2021 . . . .
Accum. Depreciation, 1 Jan 2021 –. –. –. –.
Depreciation for the period –. –. –.
Impairment –. –.
Decrease . . .
Other changes . . –. .
Exchange dierences . . –. –.
Accum. Depreciation, 31 Dec 2021 –. –. –. –.
Carrying amount, 31 Dec 2021 . . . .
Impairment losses
The impairment losses EUR 14.4 million
booked in 2021 were resulted by the
impairment tests for goodwill. The
impairment losses from the intangible
assets EUR 16.3 million have been
booked as shown in the table based on
management’s assessment in 2020. The
impairment losses from the goodwill in
2020 have been made before the impair-
ment tests for goodwill.
Impairment tests for goodwill
Goodwill has been allocated to the
Group’s cash-generating units that have
been dened according to the business
organization. Impairment testing is
performed by comparing the carrying
amount of those cash-generating units
that include goodwill with their expected
recovarable amount. An impairment loss
is recognized if the recoverable amount
of the cash-generating unit is less than
the carrying amount.
Allocation of goodwill prior tests
EUR million
Passenger Car Tyres .
Heavy Tyres .
Vianor .
Total goodwill .
The recoverable amount of a cash-gen-
erating unit is based on calculations of
the value in use. The cash ow forecasts
used in these calculations are based on
ve-year nancial plans approved by
the management. The estimated sales
and production volumes are based on
the current condition and scope of the
existing assets. The key assumptions
used in the plans include product selec-
tion, country-specic sales distribution,
margin on products, and their past actual
outcomes. Assumptions are also based
on commonly used growth, demand
and price forecasts provided by market
research institutes.
The discount rate used is the weighted
average cost of capital (WACC) after taxes
dened for the Group. The calculation
components are risk-free rate of return,
market risk premium, industry-specic
beta co-eicient, borrowing cost and the
capital structure at market value at the
time of testing. The discount rate used
for Passenger Car Tyres is 7.4% (6.3% in
2020), for Heavy Tyres is 6.4% (not tested
2020) and for Vianor is 6.2% (6.3-7.4% in
2020) varying through country locations.
Future cash ows after the forecast
period approved by the management
have been capitalised as a terminal
value using a steady 2% growth rate
and discounted with the discount rate
specied above. The assumption for the
net sales growth rate has been 2 %.
The testing indicated no need to
recognise impairment losses in Passenger
Car Tyres and in Heavy Tyres. In Vianor
the calculations indicated that the
recoverable amount subseeded the
carrying value by EUR 14 million (exceeded
EUR 4 million in 2020). This resulted to an
15. RIGHT OF USE ASSETS
EUR million
Land
property Buildings
Machinery
and
equipment Total
Accumulated cost, 1 Jan 2020 . . . .
Increase . . . .
Decrease –. –. –. –.
Other changes . –. . –.
Exchange dierences –. –. . –.
Accumulated cost, 31 Dec 2020 . . . .
Accum. Depreciation, 1 Jan 2020 –. –. –. –.
Depreciation for the period –. –. –. –.
Decrease . . . .
Other changes . . –. .
Exchange dierences . . . .
Accum. Depreciation, 31 Dec 2020 –. –. –. –.
Carrying amount, 31 Dec 2020 . . . .
EUR million
Land
property Buildings
Machinery
and
equipment Total
Accumulated cost, 1 Jan 2021 . . . .
Increase . . . .
Decrease –. –. –. –.
Other changes – – – –
Exchange dierences . . . .
Accumulated cost, 31 Dec 2021 . . . .
Accum. Depreciation, 1 Jan 2021 –. –. –. –.
Depreciation for the period –. –. –. –.
Decrease . . . .
Other changes – – – –
Exchange dierences –. –. –. –.
Accum. Depreciation, 31 Dec 2021 –. –. –. –.
Carrying amount, 31 Dec 2021 . . . .
Expenses arising from leases of low-value amounted to EUR 0.7 (1.3) million and short-
term leases amounted to EUR 1.9 (8.6) million in 2021. These contracts are not included
in the right of use assets. Interest expenses from right of use assets were EUR 4.0 (3.0)
million.
impairment loss of the total goodwill EUR
14 million allocated to Vianor. Any other
non-benecial change in the assumptions
for Vianor would have led into additional
impairments. The recoverable amount
in Passenger Car Tyres signicantly (well
over 100%) exceeds the carrying amount
of the cash-generating unit, and small
sales margin or sales volume changes
have no eect on the impairment testing
results. A possible impairment would
require e.g. an annual year-on-year
decrease above 12.1% in net sales or a
weakening of the present gross margin
level permanently over 41.2% assuming no
changes in the other assumptions. Also
the recoverable amount in Heavy Tyres
signicantly (well over 100%) exceeds the
carrrying amount of the cash-generating
unit, and small sales margin or sales
volume changes have no eect on the
impairment testing results. A possible
impairment would require an annual
year-on-year decrease above 13.3% in net
sales or a weakening of the present gross
margin level permanently over 40.1%.
Allocation of goodwill after tests
EUR million
Impairment
loss
Goodwill
31.12.2021
Passenger Car Tyres . .
Heavy Tyres . .
Vianor . –. .
Total goodwill . .
16. CARRYING AMOUNTS AND FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
Carrying
amount
Fair value
Carrying
amount
Fair value
EUR million Note Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Financial assets
Fair value through prot or loss
Derivatives held for trading () . – . – . – . –
Derivatives designated as hedges () . – . – . – . –
Unquoted securities () . – – . . – – .
Amortized cost
Other non-current receivables ()
. – . –
. – . –
Trade and other receivables () . – . – . – . –
Money market instruments () . – . – – – – –
Cash in hand and at bank () . – . – . – . –
Fair value through other comprehensive
income
Unquoted shares () . – – . . – – .
Total nancial assets . – . . . – . .
Financial liabilities
Fair value through prot or loss
Derivatives held for trading () . – . – . – . –
Derivatives designated as hedges () . – . – . – . –
Amortized cost
Interest-bearing nancial liabilities ()
. – . –
. – . –
Trade and other payables () . – . – . – . –
Total nancial liabilities . – . – . – . –
The carrying amount of nancial assets corresponds to the maximum exposure to the credit risk on the reporting date.
See note 29 for the impairments in respect of trade receivables. Other nancial assets measured at amortized cost and fair value
through other comprehensive income are not subject to material impairment.
Fair value measurements have been
classied using a fair value hierarchy that
reects the signicance of the inputs
used in making the measurements. The
fair value hierarchy has the following
levels:
Level 1: Quoted prices in active markets
for identical assets or liabilities.
Level 2: Inputs other than quoted prices
included within Level 1 that are observable
for the asset or liability, either directly
(i.e.Quoted prices in active markets for
identical assets or liabilities.
Level 3: Inputs for the asset or liability
that are not based on observable market
data (unobservable inputs).
The level in the fair value hierarchy
within which the fair value measurement
is categorised in its entirety shall be
determined on the basis of the lowest
level input that is signicant to the fair
value measurement in its entirety.
All items measured at fair value
through prot or loss excluding unquoted
securities have been classied to Level
2 in the fair value hierarchy and items
include Group’s derivative nancial
instruments. To establish the fair value
of these instruments the Group uses
generally accepted valuation models with
inputs based on observable market data.
Level 3 includes unquoted securities
measured at fair value through prot or
loss, and unquoted shares measured at
fair value through other comprehensive
income since cost is assessed to repre-
sent the fair value.
Financial assets and liabilities not
measured at fair value but for which
the fair value can be measured are
categorised in Level 2 in the fair value
hierarchy. Level 2 includes nancial
assets and nancial liabilities measured
at amortized cost. Their fair values are
based on the future cash ows that are
discounted with market interest rates on
the reporting date.
There were no transfers between
dierent levels during the nancial year.
17. INVESTMENTS IN ASSOCIATES AND
NON-CURRENT FINANCIAL INVESTMENTS
EUR million
Investments
in associates
Unquoted
securities
Unquoted
shares
Accumulated cost, 1 Jan 2021 . . .
Decrease/Increase – – –.
Exchange dierences – . .
Carrying amount, 31 Dec 2021 . . .
Carrying amount, 31 Dec 2020 . . .
18. OTHER NON-CURRENT RECEIVABLES
EUR million 2021 2020
Loan receivables . .
Other non-current receivables . .
Tota l . .
19. DEFERRED TAX ASSETS AND LIABILITIES
EUR million 31 Dec 2019
Adjustments
between items
Recognised
in income
statement
Recognised
in other
comprehensive
income
Net exchange
dierences
Acquisitions/
disposals of
subsidiaries 31 Dec 2020
Deferred tax assets
Inventories . –. .
Property, plant and equipment and intangible assets . . .
Provisions and accruals . . –. .
Tax losses carried forward . . –. .
Cash ow hedges . . . –. .
Other items . –. . . .
Tota l . –. –. . – .
Deferred tax assets oset against deferred tax liabilities –. . –.
Deferred tax assets . . –. . – .
Deferred tax liabilities
Property, plant and equipment and intangible assets . . . –. .
Untaxed reserves . –. –. .
Undistributed earnings in subsidiaries . –. .
Cash ow hedges – – –
Other items . . –. .
Tota l . –. – –. – .
Deferred tax liabilities oset against deferred tax assets –. . –.
Deferred tax liabilities . –. – –. – .
EUR million 31 Dec 2020
Adjustments
between items
Recognised in
income statement
Recognised
in other
comprehensive
income
Net exchange
dierences
Acquisitions/
disposals of
subsidiaries 31 Dec 2021
Deferred tax assets
Inventories . –. .
Property, plant and equipment and intangible assets . . .
Provisions and accruals . . . .
Tax losses carried forward . –. .
Cash ow hedges . – –. .
Other items . . –. .
Tota l . . –. –. . – .
Deferred tax assets oset against deferred tax liabilities –. . –.
Deferred tax assets . –. –. . – .
Deferred tax liabilities
Property, plant and equipment and intangible assets . . . .
Untaxed reserves . –. .
Undistributed earnings in subsidiaries . –. .
Cash ow hedges – – . .
Other items . –. .
Tota l . . . . – .
Deferred tax liabilities oset against deferred tax assets –. . –.
Deferred tax liabilities . . . . – .
Deferred tax assets and liabilities are
oset when there is a legally enforceable
right to oset current tax assets against
current tax liabilities and when the
deferred income taxes relate to the same
scal authority.
On 31 December 2021 the Group had
carry forward losses for EUR 8.3 million
(EUR 27.8 million in 2020), on which a
deferred tax asset has been recognised.
EUR 1.9 million of these carry forward
losses will expire in ve years, EUR 6.0
million will expire during years 2027–2031
and EUR 0.3 million will not expire. The
Group also had carry forward losses for
EUR 5.1 million (EUR 9.7 million in 2020),
on which no deferred tax asset was
recognised. It is not probable that future
taxable prot will be available to oset
these losses. EUR 2.5 million of these
losses will expire in ve years and EUR 2.6
will not expire.
The Group has utilised previously
unrecognised tax losses from prior
periods with EUR 1.9 million in 2021 (EUR
1.3 million in 2020).
The Group does not recognise deferred
tax liability on undistributed prots
from other than foreign subsidiaries
located in countries where distribution
generates tax consequences when it is
likely that the earnings will be distributed
in the foreseeable future. The group has
not recognised deferred tax liability for
the undistributed earnings of Finnish
subsidiaries and associates as such
earnings can be distributed without any
tax consequences.
20. INVENTORIES
EUR million 2021 2020
Raw materials and supplies . .
Work in progress . .
Finished goods . .
Tota l . .
Annually an additional expense is recognised in the carrying amounts of all separate
inventory items to avoid them exceeding their maximum probable net realisable values.
In 2021 EUR 5.4 million expense was recognised to decrease the carrying amount of
the inventories to reect the net realisable value (EUR 4.5 million in 2020).
21. TRADE AND OTHER RECEIVABLES
EUR million 2021 2020
Trade receivables . .
Loan receivables . .
Accrued revenues and deferred expenses . .
Derivative nancial instruments
Designated as hedges . .
Measured at fair value through prot or loss . .
Current tax assets . .
Value added tax receivables . .
Other receivables . .
Tota l . .
The carrying amount of trade and other receivables corresponds to the maximum
exposure to the credit risk on the reporting date.
The carrying amount of trade and other receivables is a reasonable approximation of
their fair value.
See note 29 for the impairments in respect of trade receivables.
Signicant items under accrued revenues and deferred expenses
EUR million 2021 2020
Annual discounts, purchases . .
Financial items . .
Social security contributions . .
Insurances . .
Other items . .
Tota l . .
22. CASH AND CASH EQUIVALENTS
EUR million 2021 2020
Cash in hand and at bank . .
Money market instruments . –
Tota l . .
23. EQUITY
Reconciliation of the number of shares
EUR million
Number of shares
(1,000 pcs) Share capital Share premium
Paid-up unrestricted
equity reserve Treasury shares Total
1 Jan 2020 , . . . –. .
Acquisition/conveyance of treasury shares – – – – –. –.
Other changes – – – – – .
31 Dec 2020 , . . . –. .
1 Jan 2021 , . . . –. .
Acquisition/conveyance of treasury shares – – – – – –
Other changes – – – – . .
31 Dec 2021 , . . . –. .
The nominal value of shares was abolished
in 2008, hence no maximum share
capital of the Group exists anymore. All
outstanding shares have been paid for in
full.
Below is a description of the
reserves within equity
Share premium
Before the nominal value of shares was
abolished, the amount exceeding the
nominal value of shares received by the
company in connection with share issue
and share subscription were recognised in
share premius.
Translation reserve
Translation reserve includes the
dierences arising from the translation
of the foreign subsidiaries’ nancial
statements. The gains and losses from
the net investments in foreign units and
hedging those net investments are also
included in translation reserve once the
requirements of hedge accounting have
been met.
Fair value and hedging reserves
The fair value and hedging reserves
comprises of two sub reserves: a
fair value reserve for nancial assets
measured at fair value through other
comprehensive income and a hedging
fund for changes in the fair value of the
derivative nancial instruments used for
cash ow hedging.
Paid-up unrestricted equity reserve
After the nominal value of shares was
abolished, the entire share subscription
made by option rigts are entered in the
paid-up unrestricted reserve.
Treasury shares
No share repurchases were made during
the review period, and the company did
not possess any own shares on December
31, 2021.
Nokian Tyres has an agreement from
2017 with a third-party service provider
concerning the share-based incentive
program for key personnel. The third
party owns Nokian Tyres’ shares related
to the incentive program until the shares
are given to the participants of the
program. In accordance with IFRS, these
repurchased shares, 480,000 in 2017 and
500,000 in 2020, have been reported
as treasury shares in the Consolidated
Statement of Financial Position. On
December 31, 2021, the number of these
shares was 697,400. This number of
shares corresponded to 0.50% of the
total shares and voting rights in the
company.
Dividends
After the balance sheet date, the Board of
Directors proposed that a dividend of EUR
1.32 per share be paid (EUR 1.20 in 2020).
Specication of the
distributable funds
The distributable funds on 31 December
2021 total EUR 742.7 million (EUR 723.1
million on 31 December 2020) and are
based on the balance of the Parent
company and the Finnish legislation.
24. SHARE-BASED PAYMENTS
PERFORMANCE SHARE PLANS
Performance share plan
On February 5, 2019, Nokian Tyres
announced that the Board of Directors
of Nokian Tyres plc had decided on a new
share-based long-term incentive scheme
for the Company’s management and
selected key employees. The decision
included a Performance Share Plan
(PSP 2019) as the main structure, and
a Restricted Share Plan (RSP 2019) as a
complementary structure for specic
situations.
On February 4, 2020, Nokian Tyres
announced that the Board of Directors
of Nokian Tyres plc has decided on
a share-based long-term incentive
scheme for the Company’s management
and selected key employees for years
2020–2022 as a continuation to the
earlier plans decided in 2019. The decision
includes Performance Share Plan 2020
(PSP 2020) as the main structure and
Restricted Share Plan 2020 (RSP 2020) as
a complementary structure.
The purpose of the share-based
incentive scheme is to align the goals
of the Company’s shareholders and key
personnel in order to increase the value
of the Company in the long term and to
commit key personnel to the Company
and its strategic targets.
Performance Share Plan 2019
The Performance Share Plan consists of
annually commencing individual three-
year Performance Periods, followed by the
payment of the potential share reward
to the participants. The commencement
of each individual Performance Period is
subject to a separate Board approval.
The rst Performance Period (PSP
2019–2021) commenced as of the
beginning of 2019, and the potential
share rewards thereunder will be paid in
the rst half of 2022, provided that the
performance criteria set by the Board
of Directors are achieved. The potential
reward will be paid partly in shares in
Nokian Tyres plc and partly in cash. The
cash portion of the reward is intended
to cover the taxes arising from the paid
reward. Approximately 200 individuals are
eligible to participate in PSP 2019–2021,
including the members of Nokian Tyres’
Management Team. The possible rewards
paid based on the Performance Period of
2019–2021 correspond approximately to a
maximum of 535,000 gross shares.
In addition to the 3-year performance
period (PSP 2019–2021), a separate
one-time, two-year performance period
(PSP 2019–2020) commenced in 2019 in
order to bridge the previous two-year PSP
2018 and the three-year PSP 2019–2021.
The potential share rewards thereunder
will be paid in the rst half of 2021,
provided that the performance criteria
set by the Board of Directors are achieved.
Approximately 210 individuals are
eligible to participate in PSP 2019–2020,
including the members of Nokian Tyres’
Management Team. The possible rewards
paid based on the Performance Period of
2019–2020 correspond approximately to
a maximum of 580,000 gross shares.
The potential share rewards payable
under the PSP 2019–2020 and PSP
2019–2021 are based on the Company’s
Earnings Per Share (EPS) growth % and
Return on Capital Employed (ROCE).
Restricted Share Plan 2019
The purpose of the Restricted Share
Plan (RSP 2019–2021) is to serve as a
complementary tool for individually
selected key employees of Nokian Tyres in
specic situations. It consists of annually
commencing individual Restricted Share
Plans, each with a three-year retention
period after which the share rewards
granted within the plan will be paid to the
participants.
The commencement of each individual
plan is subject to a separate Board
approval.
A precondition for the payment of the
share reward based on the Restricted
Share Plan is that the employment rela-
tionship of the individual participant with
Nokian Tyres continues until the payment
date of the reward. In addition to this
precondition, the management team
has a separate nancial performance
measure which must be achieved for a
potential reward payment. The potential
reward will be paid partly in shares in
Nokian Tyres plc and partly in cash. Cash
portion of the reward is intended to cover
the taxes arising from the paid reward.
The rst plan (RSP 2019–2021) within
the Restricted Share Plan structure
commenced as of the beginning of 2019,
and the potential share reward there-
under will be paid in the rst half of 2022.
The possible rewards paid based on RSP
2019–2021 correspond approximately to a
maximum of 70,000 gross shares.
Performance Share Plan 2020
The Performance Share Plan consists
of annually commencing individual
three-year Performance Periods, followed
by the payment of the potential share
reward. The commencement of each
individual Performance Period is subject
to a separate Board approval.
The Performance Period (PSP
2020–2022) commenced eective as of
the beginning of 2020 and the potential
share reward thereunder will be paid in
the rst half of 2023 provided that the
performance targets set by the Board
of Directors are achieved. The potential
reward will be paid partly in shares of
Nokian Tyres plc and partly in cash. Cash
portion of the reward is intended to cover
the taxes arising from the paid reward.
Eligible to participate in PSP 2020–2022
are approximately 200 individuals,
including the members of Nokian Tyres
Management Team.
The potential share reward payable
under the PSP 2020–2022 are based on
the Earnings Per Share (EPS) and Return
on Capital Employed (ROCE). The possible
rewards paid based on the Performance
Period of 2020–2022 will be a maximum
of 569,260 gross shares.
If the individual’s employment with
Nokian Tyres terminates before the
payment date of the share reward, the
individual is not, as a main rule, entitled to
any reward based on the plan.
Restricted Share Plan 2020
The purpose of the Restricted Share
Plan is to serve as a complementary tool
for individually selected key employees
of Nokian Tyres in situations like new
hires and retention needs. It consists
of annually commencing individual
Restricted Share Plans, each with a
three-year retention period after which
the share rewards granted within the plan
will be paid to the participants in shares of
Nokian Tyres plc and partly in cash.
The commencement of each individual
plan is subject to a separate Board of
Directors approval.
A precondition for the payment of the
share reward based on the Restricted
Share Plan is that the employment
relationship of the individual participant
with Nokian Tyres continues until the
payment date of the reward. In addition
to this precondition, the management
team has a separate nancial perfor-
mance measure which must be achieved
for a potential reward payment. The most
recent plan (RSP 2020–2022) within
the Restricted Share Plan structure
commenced eective as of the beginning
of 2020 and the potential share reward
thereunder will be paid in the rst half
of 2023. The possible rewards paid
based on RSP 2020–2022 correspond
approximately to a maximum of 120,000
gross shares.
Performance Share Plan 2021
The Performance Share Plan consists
of annually commencing individual
three-year Performance Periods, followed
by the payment of the potential share
reward. The commencement of each
individual Performance Period is subject
to a separate Board approval.
The Performance Period (PSP
2021–2023) commenced eective as of
the beginning of 2021 and the potential
share reward thereunder will be paid in
the rst half of 2024 provided that the
performance targets set by the Board
of Directors are achieved. The potential
reward will be paid partly in shares of
Nokian Tyres plc and partly in cash. Cash
portion of the reward is intended to cover
the taxes arising from the paid reward.
Eligible to participate in PSP 2021–2023
are approximately 220 individuals,
including the members of Nokian Tyres
Management Team.
The potential share reward payable
under the PSP 2021–2023 are based on
the Earnings Per Share (EPS) and Return
on Capital Employed (ROCE). The possible
rewards paid based on the Performance
Period of 2021–2023 will be a maximum of
534,898 gross shares.
If the individual’s employment with
Nokian Tyres terminates before the
payment date of the share reward, the
individual is not, as a main rule, entitled to
any reward based on the plan.
Restricted Share Plan 2021
The purpose of the Restricted Share Plan
is to serve as a complementary long-
term incentive tool, used selectively for
retention of Nokian Tyres key employees.
It consists of annually commencing
individual Restricted Share Plans, each
with a three-year retention period after
which the share rewards granted within
the plan will be paid to the participants in
shares of Nokian Tyres plc and partly in
cash.
The commencement of each individual
plan is subject to a separate Board of
Directors approval.
A precondition for the payment of the
share reward based on the Restricted
Share Plan is that the employment
relationship of the individual participant
with Nokian Tyres continues until
the payment date of the reward. In
addition to this precondition, a nancial
performance criteria is applied to
Nokian Tyres Management Team. The
criteria is a threshold value for Return
on Capital Employed (ROCE), which must
be exceeded for a potential payment of
a share reward based on the Restricted
Share Plan 2021-2023.
The next plan (RSP 2021–2023) within
the Restricted Share Plan structure
commenced eective as of the beginning
of 2021 and the potential share reward
thereunder will be paid in the rst half of
2024. The possible rewards paid based on
RSP 2021–2023 correspond approximately
to a maximum of 120,000 gross shares.
Other terms
Nokian Tyres applies a share ownership
policy to the members of Nokian Tyres
Management Team. According to this
policy each member of the Management
Team is expected to retain in his/her
ownership at least 25% of the shares
received under the share-based incentive
programs of the Company until the
value of his/her share ownership in the
Company corresponds to at least his/her
annual gross base salary.
The Board of Directors anticipates that
no new shares will be issued based on
the share-based incentive scheme and
that the scheme will, therefore, have no
dilutive eect on the registered number
of the Company’s shares.
The following tables present more
specic information on the performance
share plans.
Instrument
PSP 2019–2020 PSP 2019–2021 PSP 2020–2022 PSP 2021–2023 RSP 2019–2021 RSP 2020–2022 RSP 2021–2023
Total
Issuing date .. .. .. .. .. .. ..
Initial amount, pcs , , , , , , , ,,
Dividend adjustment No No No No No No No
Initial allocation date .. .. .. .. .. .. ..
Beginning of earning period .. .. .. .. .. .. ..
End of earning period .. .. .. .. .. .. ..
Vesting date .. .. .. .. .. .. ..
Vesting conditions
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Earnings Per
Share (EPS)
growth % and
Return on Capital
Employed (ROCE)
Continued
employment.
Return on Capital
Employed (ROCE)
Continued
employment,
Return on Capital
Employed (ROCE)
for management
team
Continued
employment,
Return on Capital
Employed (ROCE)
for management
team
Maximum contractual life, yrs . . . . . . . .
Remaining contractual life, yrs . . . . . . .
Number of persons at the end of reporting year
Payment method Cash & Equity Cash & Equity Cash & Equity Cash & Equity Cash & Equity Cash & Equity Cash & Equity
Changes during period
PSP 2019–2020 PSP 2019–2021 PSP 2020–2022 PSP 2021–2023 RSP 2019–2021 RSP 2020–2022 RSP 2021–2023
Total
1.1.2021
Outstanding in the beginning of the period , , , , , ,,
Reserve in the beginning of the period , , , , , ,
Changes during period
Granted , , ,
Forfeited , , , , , , ,
Earned (Gross)
Delivered (Net)
Expired , ,
31.12.2021
Outstanding at the of the period , , , , , , ,,
Reserved at the of the period , , , , , , ,
FAIR VALUE DETERMINATION
Inputs to the fair value determination of
the performance shares expensed during
the nancial year 2021 are listed in the
table as weighted average values. The
total fair value of the performance shares
is based on the company’s estimate on
31 December 2021 as to the number of
shares to be eventually vesting.
25. PENSION LIABILITIES
All material pension arrangements in the Group are dened contribution plans.
Fair value determination Earning period 2021
Share price at grant, EUR .
Share price at reporting date, EUR .
Expected dividends, EUR .
Fair market value per share at grant, EUR .
Valuation model
Dividend discount &
Monte Carlo simulation
Total fair value 31 December 2021, EUR million .
Impact on period prots and nancial position
Expenses for the nancial year, share-based payments, equity-settled EUR million .
Liabilities arising from share-based payments 31 December 2021 EUR million .
Estimated amount of cash to be paid under these plans EUR million .
26. PROVISIONS
EUR million
Warranty
provision
Restructuring
provision
Environmental
provision Total
1 Jan 2021 . . . .
Provisions made . . . .
Provisions used –. –. –. –.
Unused provisions reversed –. . – –.
31 Dec 2021 . . . .
EUR million 2021 2020
Non-current provisions – –
Current provisions . .
Warranty provision
The goods are sold with a normal warranty period. Additionally, a Hakka Guarantee
warranty has been established in certain markets for certain products to compensate
tyre damages not covered by the normal warranty, one year after the purchase and
to a certain wear limit. Damaged goods will be repaired at the cost of the company
or replaced with a corresponding product. The provisions are based on the sales
and statistical compensation volumes of the tyres sold under these warranties. The
warranty provisions are expected to be utilised within 1 year.
28. TRADE AND OTHER PAYABLES
EUR million 2021 2020
Trade payables . .
Accrued expenses and deferred revenues . .
Advance payments . .
Derivative nancial instruments
Designated as hedges . .
Measured at fair value through prot or loss . .
Current tax liabilities . .
Value added tax liabilities . .
Other liabilities . .
Tot al . .
The carrying amount of trade and other payables is a reasonable
approximation of their fair value.
Signicant items under accrued expenses and deferred revenues
EUR million 2021 2020
Wages, salaries and social security contributions . .
Annual discounts, sales . .
Commissions . .
Goods received and not invoiced . .
Marketing expenses . .
Transportation costs . .
Financial items . .
Other items . .
Tot al . .
27. INTEREST-BEARING FINANCIAL LIABILITIES
EUR million 2021 2020
Non-current
Loans from nancial institutions and pension loans . .
. .
Current
Commercial papers – .
Current portion of non-current loans from nancial institutions and
pension loans . .
. .
Interest-bearing nancial liabilities by
currency
EUR million 2021 2020
Currency
EUR . .
RUB . .
Tot al . .
Eective interest rates for interest-bearing nancial liabilities
Without
hedges
With
hedges
Without
hedges
With
hedges
Loans from nancial institutions and pension
loans .% .% .% .%
Commercial papers – – .% .%
Tot al .% .% .% .%
See note 16 for the fair values of the interest-bearing nancial liabilities.
Transaction risk
EUR million 31 Dec 2021 31 Dec 2020
Functional currency EUR EUR EUR EUR EUR EUR CZK RUB EUR EUR EUR EUR EUR EUR CZK RUB
Foreign currency CAD NOK PLN RUB SEK USD EUR EUR CAD NOK PLN RUB SEK USD EUR EUR
Trade receivables . . . . . . . . . . . . . . . .
Loans and receivables . . . . . . . . . . . . . . . .
Total currency income . . . . . . . . . . . . . . . .
Trade payables –. . . –. . –. –. –. –. . . –. . –. –. –.
Borrowings –. –. . –. –. –. –. –. –. –. . –. –. –. –. –.
Total currency expenditure –. –. . –. –. –. –. –. –. –. . –. –. –. –. –.
Foreign exchange
derivatives –. –. –. . –. . –. . –. –. . . –. –. –. .
Binding sales contracts . . . . . . . . . . . . . . . .
Binding purchase contracts . . . –. . –. –. . . . . –. . –. –. .
Future interest items . . . –. . . –. . . . . –. . . –. .
Net exposure . . –. –. . –. –. –. . . . –. –. –. . –.
29. FINANCIAL RISK
MANAGEMENT
The objective of nancial risk manage-
ment is to protect the Group’s planned
prot development from adverse
movements in nancial markets. The
principles and targets of nancial risk
management are dened in the Group’s
treasury policy, which is approved by the
Board. Financing activities and nancial
risk management are centralized to the
parent company Treasury, which executes
nancing and hedging transactions with
external counterparties and acts as a
primary counterparty to business units in
nancing activities like funding, foreign
exchange transactions and cash manage-
ment. The Group Credit Committee
makes credit decisions that have a
signicant impact on the credit exposure
of the Group..
Foreign currency risk
The Nokian Tyres Group consists of the
parent company in Finland, the sales
companies in Russia, Sweden, Norway, the
USA, Canada, Czech Republic, Switzerland,
Poland, Ukraine, Kazakhstan, Belarus and
China, the tire chain companies in Finland,
Sweden and Norway. The tire plants are
located in Nokia, Finland, in Vsevolozhsk,
Russia and in Dayton, Tennessee, the USA.
Transaction risk
According to the Group’s treasury
policy, transactions between the parent
company and the foreign subsidiaries are
primarily carried out in the local currency
of the subsidiary in question, and the
transaction risk is carried by the parent
company and there is no signicant
currency risk in the foreign subsidiaries.
Exceptions to the main rule are subsid-
iaries, which have non-home currency
items due to the nature of business
activities. In this case transactions
between the parent company and the
subsidiary are carried out in a currency
appropriate for the Group currency
exposure. The parent company manages
transaction risk in these subsidiaries and
implements required hedging transac-
tions for hedging the currency exposure
of the subsidiary according to the Group
hedging principles.
The transaction exposure of the parent
company and the subsidiaries with
non-home currency items comprises of
the foreign currency denominated receiv-
ables and payables in the statement of
nancial position and the foreign currency
denominated binding purchase and sales
contracts. According to the Group’s
treasury policy the signicant transaction
exposure in every currency pair is hedged,
although 20% over-hedging or under-
hedging is allowed if a +/- 10% change
in the exchange rate does not create
over EUR 1 million impact on the income
statement. However, a simultaneous
+/- 10% change in all the Group exposure
currencies against EUR must not create
over a EUR 5 million impact on the income
statement. Exceptions to the main rule
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the base currency against the quote currency,
with all other variables held constant, of the Group’s prot before tax and equity due to changes in the fair value of nancial assets
and liabilities.
A reasonably possible change is assumed to be a 10% base currency appreciation or depreciation against the quote currency. A
change of a dierent magnitude can also be estimated fairly accurately because the sensitivity is nearly linear.
31 Dec 2021 31 Dec 2020
Base currency Base currency
% stronger 10% weaker 10% stronger 10% weaker
EUR million
Income
statement Equity
Income
statement Equity
Income
statement Equity
Income
statement Equity
Base currency / Quote currency
EUR/CAD –. – . – –. – . –
EUR/CZK –. – . – –. – . –
EUR/PLN . – –. – –, – , –
EUR/NOK . – –. – –. – –. –
EUR/RUB . – –. – . – . –
EUR/SEK . – . – . – –. –
EUR/USD –. – . – . – –. –
Translation risk
Net investments by currency
EUR million 31 Dec 2021 31 Dec 2020
Currency of net investment
CZK . .
NOK . .
RUB . .
SEK . .
USD . .
are non-convertible currencies, which do
not have active hedging markets available.
For budget exposure the estimated
currency cash ows are added to the
transaction exposure so that the overall
foreign currency risk exposure horizon
covers the next 12 months. The budget
exposure may be hedged according to
the market situation and the hedge ratio
can be up to 70% of the budget exposure.
Currency forwards, currency options and
cross-currency swaps are used as hedging
instruments.
Translation risk
In nancial statements the statements
of nancial position of the foreign
subsidiaries are translated into euro using
the European Central Bank’s closing rates
and the income statements monthly
using the monthly average rate for the
period. The impacts of the exchange
rate uctuations arising on translation
of the subsidiaries’ income statements
and statements of nancial position
are recorded as translation dierences
in other comprehensive income and in
the translation reserve in equity. The net
investments in foreign subsidiaries are
not hedged based on the Board decision
in 2013.
Group’s total comprehensive income
was positively aected by translation
dierences on foreign operations by EUR
54.5 million (negatively aected EUR 168.7
in 2020).
.
Sensitivity analysis for interest rate risk
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held
constant, of the Group’s prot before tax through the impact on oating rate borrowings and interest rate hedges measured at fair
value through prot or loss and the Group’s equity due to changes in the fair value of cash ow hedges.
A reasonably possible change is assumed to be a 1%-point increase or decrease of the market interest rates.
Dec Dec
Interest rate Interest rate
%–point higher %–point lower %–point higher %–point lower
EUR million
Income
statement Equity
Income
statement Equity
Income
statement Equity
Income
statement Equity
Impact of interest rate change –. . . –. –. . –. –.
Sensitivity analysis for electricity price risk
The following table demonstrates the sensitivity to a reasonably possible change in electricity price, with all other variables held
constant, of the Group’s prot before tax and equity due to changes in the fair value of the electricity derivatives.
A reasonably possible change is assumed to be a 5 EUR/MWh increase or decrease of the electricity market prices. A change of a
dierent magnitude can also be estimated fairly accurately because the sensitivity is nearly linear.
Dec Dec
Electricity price Electricity price
EUR/MWh higher EUR/MWh lower EUR/MWh higher EUR/MWh lower
EUR million
Income
statement Equity
Income
statement Equity
Income
statement Equity
Income
statement Equity
Impact of electricity price change – . – –. – . – –.
Interest rate risk
The interest rate risk of the Group
consists mainly of borrowing, which is
split between oating and xed rate
instruments. On the reporting date the
oating rate interest-bearing nancial
liabilities amounted to EUR 24.2 million
(EUR 326.6 million in 2020) and the xed
rate interest-bearing liabilities EUR 105.1
million (EUR 5.7 million in 2020) including
the interest rate derivatives. The Group’s
policy aims to have at least 50% of
the non-current nancial liabilities in
xed rate instruments. Interest rate
risk is managed by using interest rate
derivatives. On the reporting date the
portion of the non-current xed rate
interest-bearing nancial liabilities was
81% (82% in 2020) and the average
xing period of the interest-bearing
nancial liabilities was 31 months (15
months in 2020) including the interest
rate derivatives. The Group uses interest
rate derivatives as cash ow hedges and
hedge accounting is mainly applied for
those derivatives.
Electricity price risk
The Group purchases electricity in
Finland at market price from the Nordic
electricity exchange and this leads to
an electricity price exposure. Annually
around 100 GWh of electricity is procured.
According to the procurement policy
electricity purchases are hedged with
electricity derivatives within the limits set
by the pre-dened hedge ratios for the
coming ve-year period. On the reporting
date the energy amount of the electricity
derivatives amounted to 170 GWh (170
GWh in 2020).
Contractual maturities of nancial and lease liabilities
EUR million
2021
Carrying
amount
Contractual maturities*
2022 2023 2024 2025 2026 2027– Total
Non-derivative nancial liabilities
Loans from nancial institutions and pension loans
Fixed rate loans . –. –. –. –. –. –. –.
Floating rate loans . –. –. –. –. –. –. –.
Commercial papers . . . . . . . .
Trade and other payables . –. . . . . . –.
Lease liabilities . –. –. –. –. –. –. –.
Derivative nancial liabilities
Interest rate derivatives
Designated as hedges . –. –. –. . . . –.
Foreign currency derivatives
Measured at fair value through prot or loss
Cashow out . –. –. . . . . –.
Cashow in –. . . . . . . .
Electricity derivatives
Designated as hedges –. . . . . . . .
Tot al . –. –. –. –. –. –. –.
* The gures are undiscounted and include both the nance charges and the repayments.
Liquidity and funding risk
In accordance with the Group’s treasury
policy, Treasury is responsible for
maintaining the Group’s liquidity, eicient
cash management and suicient sources
of funding. The committed credit limits
cover all funding needs, like outstanding
commercial papers, other current loans,
working capital changes arising from
operative business and investments.
Renancing risk is reduced by split
maturity structure of loans and credit
limits. The Group has a EUR 150 million
revolving credit facility with an interna-
tional bank syndicate due in 2023 and a
EUR 500 million domestic commercial
paper program. The current credit limits
and the commercial paper program
are used to nance inventories, trade
receivables, subsidiaries in distribution
chains and thus to control the typical
seasonality in the Group’s cash ows.
The Group reports the main nancial
covenants to creditors quarterly. If the
Group does not satisfy the requirements
set in nancial covenants, creditor may
demand accelerated repayment of the
credits. In 2021 the Group has met all
the requirements set in the nancial
covenants, which are mainly linked to
equity ratio. Management monitors
regularly that the covenant requirements
are met. Financing agreements contain
terms and conditions upon which the
agreement may be terminated, if control
in the company changes as a result of a
public tender oer.
On the reporting date the Group’s
liquidity in cash and cash equivalents was
EUR 385.9 million (EUR 504.2 million in
2020). At the end of the year the Group’s
credit limits available were EUR 811.7
million (EUR 507.1 million in 2020), out of
EUR million
2020
Carrying
amount
Contractual maturities*
2021 2022 2023 2024 2025 2026– Tot al
Non-derivative nancial liabilities
Loans from nancial institutions and pension loans
Fixed rate loans . –. –. –. –. –. –. –.
Floating rate loans . –. –. –. –. –. –. –.
Commercial papers . –. . . . . . –.
Trade and other payables . –. . . . . . –.
Lease liabilities . –. –. –. –. –. –. –.
Derivative nancial liabilities
Interest rate derivatives
Designated as hedges . –. –. –. –. . . –.
Foreign currency derivatives
Measured at fair value through prot or loss
Cashow out . –. –. –. . . . –.
Cashow in –. . . . . . . .
Electricity derivatives
Designated as hedges
. –. . . . . . .
Tot al . –. –. –. –. –. –. –.
* The gures are undiscounted and include both the nance charges and the repayments.
The aging and impairment of trade receivables
31 Dec 2021 31 Dec 2020
EUR million
Trade receivables
gross amount
Impairment loss
allowance
Trade receivables
gross amount
Impairment
loss allowance
Not past due
. –.
. –.
Past due less than 30 days . –. . –.
Past due between 30 and 90 days . –. . –.
Past due between 91 and 180 days . –. . –.
Past due more than 180 days . –. . –.
Tot al . –. . –.
Changes in the impairment loss allowance for trade receivables
EUR million 2021 2020
Loss allowance, 1 Jan . .
Write-os –. –.
Other changes . –.
Change in loss allowance recognized in prot or loss . .
Loss allowance, 31 Dec . .
which the committed limits were EUR
305.5 million (EUR 205.5 million in 2020).
The available committed non-current
credits amounted to EUR 300.0 million
(EUR 200.0 million in 2020).
The Group’s interest-bearing nancial
liabilities totaled EUR 129.3 million,
compared to the year before gure of
EUR 332.3 million. Around 85% of the
interest-bearing nancial liabilities were in
EUR. The average interest rate of inter-
est-bearing nancial liabilities was 2.8%.
Current interest-bearing nancial liabili-
ties, including the portion of non-current
nancial liabilities maturing within the
next 12 months, amounted to EUR 0.9
million (EUR 204.3 million in 2020).
Credit Risk
Credit risk is a risk that a counterparty will
not meet its obligations under a nancial
instrument or customer contract, leading
to a nancial loss. The Group is exposed
to credit risk in its operating activities
(primarily trade receivables) and in its
nancing activities, including deposits,
foreign exchange transactions and other
nancial transactions with banks and
nancial institutions.
The credit risk in nancial transactions
is controlled by doing business only with
banks and nancial institutions with
high credit ratings. In investments the
Group’s placements are current and
funds are invested only in solid domestic
listed companies, public institutions or
non-listed domestic companies which
meet the criteria set by the investment
policy. The Board approves the invest-
ment policy for nancial instruments
annually.
The principles of customer credit risk
management are documented in the
Group’s credit policy approved by the
Board. The Group Credit Committee
makes all the signicant credit decisions.
Customer credit risk is managed by each
business area subject to the Group’s
credit policy, procedures, and controls
relating to customer credit risk manage-
ment. Creditworthiness of a customer is
assessed based on its nancial status,
payment history, and country risk.
Individual credit limits are dened in
accordance with this assessment and/or
in some cases trade nance instruments,
bank guarantees, and specic payment
terms may be in use to mitigate the
credit risk. Credits are limited in countries
where political or economic environment
is unstable. Outstanding customer
receivables, customers’ creditworthiness,
and country risk are regularly monitored.
Payment programs, which customer is
committed to, are always agreed upon for
past due receivables. There are no over
15% customer or country risk concentra-
tions in trade receivables, other than the
Russian customers’ share of 34% (35% in
2020) on the reporting date.
Aging and impairment of
trade receivables
Impairment recognized in trade receiv-
ables corresponds to lifetime expected
credit losses for trade receivables. To
measure expected credit losses a
simplied provision matrix is in use and
individual assessments are used with
customers bearing an increased credit
risk. An impairment analysis is performed
at each reporting date. The maximum
exposure to credit risk at the reporting
date is the carrying value of trade
receivables. When measuring expected
credit losses, the Group reviews ve-year
sales, customer payment behavior, actual
credit losses, current conditions and
forecasts of future economic conditions.
Trade receivables are permanently
written-o when the expected income
from the receivable is permanently lost,
for example at the end of bankruptcy
proceedings.
Net debt / EBITDA
EUR million 2021 2020
Average interest-bearing liabilities . .
Less: Average liquid funds . .
Average net debt . .
Operating prot . .
Add: Depreciations and amortisations . .
EBITDA . .
Average net debt / EBITDA . .
Equity ratio
EUR million 2021 2020
Equity attributable to equity holders of the parent ,. ,.
Add: Non-controlling interest . .
Total equity ,. ,.
Total assets ,. ,.
Less: Advances received . .
Adjusted total assets ,. ,.
Equity ratio .% .%
Capital Management
For the purpose of the Group’s capital
management, capital includes share
capital, share premium, treasury shares
and other equity attributable to the
equity holders of the parent. The
Group’s objectives of managing capital
are to maximize the shareholder value
and to secure the Group’s access to
capital markets at all times despite of
the seasonal nature of the business. To
maintain or adjust the capital structure,
the Group may adjust dividend payment
to shareholders or return capital to
shareholders or issue new shares. The
Group monitors its capital structure on
the basis of Net debt to EBITDA ratio
and Equity ratio. Equity ratio has to be at
least at the level of 30% in accordance
with the nancial covenants. Equity ratio
is calculated as a ratio of total equity to
total assets excluding advances received.
30. FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS
EUR million
Notional
amount
Fair value
Assets
Fair value
Liabilities
Notional
amount
Fair value
Assets
Fair value
Liabilities
Derivatives measured at fair value through prot or loss
Foreign currency derivatives
Currency forwards . . . . . .
Currency options, purchased . . – . . –
Currency options, written . – . . – .
Interest rate and currency swaps . . . . . .
Derivatives designated as cash ow hedges
Interest rate derivatives
Interest rate swaps . – . . – .
Electricity derivatives
Electricity forwards . . – . . .
Derivatives are maturing within the next 12 months excluding the interest rate and currency swaps, interest rate swaps and electricity forwards.
The fair value of forward exchange contracts is measured using the forward rates on the reporting date. The fair value of currency options is calculated using an option valuation model.
The fair values of interest rate and currency swaps and interest rate derivatives are determined as the present value of the future cash ows based on market interest rates on the reporting date.
The fair value of electricity derivatives is based on quoted market prices in active markets on the reporting date.
31. FINANCIAL INSTRUMENTS DESIGNATED AS HEDGING INSTRUMENTS
CASH FLOW HEDGES
Financial instruments designated as hedging instruments
Maturity
2022 2023 2024 2025 2026 2027– Total
Interest rate and currency swaps*
Hedged item: Floating rate RUB loan receivables
Notional amount, EUR million
Average EUR/RUB rate
Interest rate swaps
Hedged item: Floating rate EUR debt
Notional amount, EUR million . .
Average xed rate .% .%
Electricity forwards
Hedged item: Electricity system price
Notional amount, EUR million . . . . .
Notional amount, GWh
Average forward rate, e/MWh . . . . .
Hedged item: Electricity Finnish area price dierence
Notional amount, EUR million . . . . .
Notional amount, GWh
Average forward rate, e/MWh . . . . .
* Hedge accounting discontinued
Maturity
2021 2022 2023 2024 2025 2026– Total
Interest rate and currency swaps
Hedged item: Floating rate RUB loan receivable
Notional amount, EUR million
Average EUR/RUB rate
Interest rate swaps
Hedged item: Floating rate EUR debt
Notional amount, EUR million . .
Average xed rate .% .%
Electricity forwards
Hedged item: Electricity system price
Notional amount, EUR million . . . . .
Notional amount, GWh
Average forward rate, e/MWh . . . . .
Hedged item: Electricity Finnish area price dierence
Notional amount, EUR million . . . .
Notional amount, GWh
Average forward rate, e/MWh . . . .
Foreign
currency
derivatives
Interest rate
derivatives
Electricity
derivatives
EUR million
Interest rate
and currency
swaps*
Interest rate
swaps
Electricity
forwards
Notional amount – . .
Notional amount, GWh – –
Assets
Carrying amount – – .
Line item in the statement of nancial
position
Trade and other
receivables
Trade and other
receivables
Trade and other
receivables
Liabilities
Carrying amount – . –
Line item in the statement of nancial
position
Trade and other
payables
Trade and other
payables
Trade and other
payables
Change in value for recognizing hedge
ineectiveness
Hedged item – –. –.
Hedging instrument – . .
Eective portion
Amount recognized in other
comprehensive income – . .
Amount reclassied from the cash ow
hedge reserve to prot or loss – . –.
Line item in the income statement Financial items Financial items Cost of sales
Ineective portion
Amount recognized in prot or loss – – –
Line item in the income statement Financial items Financial items Other operating
income or
expenses
* Hedge accounting discontinued
Foreign
currency
derivatives
Interest rate
derivatives
Electricity
derivatives
EUR million
Interest rate
and currency
swaps*
Interest rate
swaps
Electricity
forwards
Notional amount – . .
Notional amount, GWh – –
Assets
Carrying amount – – .
Line item in the statement of nancial
position
Trade and other
receivables
Trade and other
receivables
Trade and other
receivables
Liabilities
Carrying amount – . .
Line item in the statement of nancial
position
Trade and other
payables
Trade and other
payables
Trade and other
payables
Change in value for recognizing hedge
ineectiveness
Hedged item – . .
Hedging instrument – –. –.
Eective portion
Amount recognized in other
comprehensive income – –. –.
Amount reclassied from the cash ow
hedge reserve to prot or loss –. . .
Line item in the income statement Financial items Financial items Cost of sales
Ineective portion
Amount recognized in prot or loss – – –
Line item in the income statement Financial items Financial items Other operating
income or
expenses
Eect of hedging instruments on the statement of nancial position and statement of comprehensive income
Eect of hedging instruments on equity
EUR million 2021 2020
Cash ow hedge reserve, 1 Jan –. –.
Cash ow hedges
Change in fair value recognized in other comprehensive
income
Interest rate and currency swaps . .
Interest rate swaps . –.
Electricity forwards . –.
Amount reclassied to prot or loss
Interest rate and currency swaps . –.
Interest rate swaps . .
Electricity forwards –. .
Tax eect –. .
Cash ow hedge reserve, 31 Dec . –.
32. CONTINGENT LIABILITIES AND ASSETS
EUR million 2021 2020
For own debt
Pledged assets . .
Other own commitments
Guarantees . .
33. SIGNIFICANT RISKS AND UNCERTAINTIES AND ONGOING DISPUTES
Nokian Tyres’ business and nancial
performance may be aected by several
uncertainties. The Group has adopted
a risk management policy, approved by
the Board of Directors, which supports
the achievement of strategic goals and
ensures business continuity. The Group’s
risk management policy focuses on
managing both the risks pertaining to
business opportunities and the risks
aecting the achievement of the Group’s
goals in the changing operating envi-
ronment. The risk management process
aims to identify and evaluate the risks
and to plan and implement the practical
measures for each risk. Nokian Tyres
describes the overall business risks and
risk management in its annual Corporate
Governance Statement.
For example, the following risks could
potentially have an impact on Nokian
Tyres’ business:
• Nokian Tyres is subject to risks related
to consumer condence and macro-
economic and geopolitical conditions.
Political uncertainties may cause
serious disruption and additional trade
barriers and aect the company’s sales
and credit risk. Economic downturns
may increase trade customers’ payment
problems and Nokian Tyres may need
to recognize impairment of trade
receivables.
• The tire wholesale and retail landscape
is evolving to meet changing consumer
needs. New technologies are fueling
this with increasing digitalization. Failure
to adapt to the changes in the sales
channel could have an adverse eect
on Nokian Tyres’ nancial performance.
• Nokian Tyres’ success is dependent on
its ability to innovate and develop new
products and services that appeal to
its customers and consumers. Despite
extensive testing of its products,
product quality issues and failure
to meet demands of performance
and safety could harm Nokian Tyres’
reputation and have an adverse eect
on its nancial performance.
• Nokian Tyres’ production facilities are
located in Finland, Russia and the US.
Any unexpected production or delivery
breaks at these facilities would have
a negative impact on the company’s
business. Interruptions in logistics could
have a signicant impact on production
and peak season sales.
• Signicant uctuations in raw
material prices may impact margins.
Nokian Tyres sources natural rubber
from producers in countries such
as Indonesia and Malaysia. Although
Nokian Tyres has policies such as the
Supplier Code of Conduct and estab-
lished processes to monitor the working
conditions, it cannot fully control the
actions of its suppliers. Nokian Tyres
continues to expand its supplier port-
folio to mitigate risks related to single
source supplying. The non-compliance
with laws, regulations or standards
by raw material producers, or their
divergence from practices generally
accepted as ethical in the European
Union or the international community,
could have a material adverse eect on
Nokian Tyres’ reputation.
• Tire industry can be subject to risks
caused by climate change, such as
changes in consumer tire preferences,
regulatory changes or impact of
extreme weather events on natural
rubber producers. Nokian Tyres is
committed to reducing GHG emissions
from its operations in order to
combat climate change. Nokian Tyres
calculates the GHG emissions from its
operations annually and reduces them
systematically. More detailed analysis
on Nokian Tyres’ climate change related
risks and opportunities is provided at
www.nokiantyres.com/company/sustain-
ability/environment/climate-change-re-
lated-risks-and-opportunities/.
• Foreign exchange risk consists of
transaction risk and translation risk. The
most signicant currency risks arise
from the Russian ruble, the Swedish
and Norwegian krona, and the US and
Canadian dollar. Approximately 65% of
the Group’s sales are generated outside
of the euro-zone.
• The availability of supporting infor-
mation systems and network services
is crucial to Nokian Tyres. Unplanned
interruption in critical information
systems or network services may cause
disruption to the continuity of opera-
tions. Such systems and services may
also be exposed to cyber attacks that
could cause a leakage of condential
information, violation of data privacy
regulations, theft of know-how and
other intellectual property, production
shutdown or damage to reputation.
• In May 2017, the Finnish Financial
Supervisory Authority led a request for
investigation with the National Bureau
of Investigation regarding possible
securities market oences. In October
2020, the prosecutor announced the
decision to press charges against
a total of six persons who acted as
Board members and the President &
CEO of Nokian Tyres in 2015–2016. The
prosecutor also requests a corporate
ne of a maximum of EUR 850,000
to be imposed on the company. The
prosecutor has also decided to press
charges for suspected abuse of insider
information against four persons who
were employees of Nokian Tyres in
2015. All persons charged deny their
involvement in any criminal activity. The
trial related to these events started at
the District Court of Helsinki in January
2022.
• The COVID-19 pandemic represents
a short-term risk to Nokian Tyres’
business and operating environment.
The company has proactively taken
preventive actions to minimize the
impacts of the pandemic and to
ensure business continuity. Despite
these eorts, the uncertainty over
the duration of the pandemic, the
containment measures and the
resulting slowdown in economic activity
can have a negative impact on Nokian
Tyres’ operations and supply chain as
well as the demand and pricing for the
company’s products.
Nokian Tyres’ risk analysis also pays
special attention on corporate sustain-
ability risks, the most signicant of which
are related to product quality, safety,
environment, and human rights. Analyses
and projects related to information
security, data protection, and customer
information are continuously a special
focus area.
Tax disputes
In May 2019, Nokian Tyres U.S. Finance Oy,
a former subsidiary of Nokian Tyres plc
(ownership: 100% of the shares), received
a negative ruling from the Hämeenlinna
Administrative Court regarding the
company’s appeal against a reassessment
of EUR 18.5 million concerning the years
2007–2013. The company has paid
and recorded the amount in full in the
nancial statements and results for 2013,
2014, and 2017. The company’s appeal
against the court decision was rejected by
Supreme Administrative Court in February
2021.
In April 2021, Nokian Tyres received
a decision from the Tax Administration
concerning a tax audit for the tax years
2015–2016, according to which the
company was obliged to pay a total of
EUR 1.9 million additional taxes, punitive
tax increase and late payment interest.
Taxes have been paid and recognized in
receivables. Nokian Tyres considers the
tax authority’s view unfounded and has
appealed against the decision.
Routine tax audits in Nokian Tyres
Group entities may possibly lead to a
reassessment of taxes.
34. RELATED PARTY TRANSACTIONS
Parent and Group company relations:
Domicile Country
Group
holding
%
Voting
rights
%
Parent
company
holding
%
Parent company
Nokian Tyres plc
Group companies
Nokian Heavy Tyres Ltd.
Nokia Finland
Levypyörä Oy
Nastola Finland
Nokian Däck AB
Sweden
Nokian Dekk AS
Norway
Nokian Tyres GmbH
Germany
Nokian Tyres AG
Switzerland
Nokian Tyres SP Z.O.O
Poland
Nokian Tyres U.S. Holdings Inc.
USA
Nokian Tyres Inc
USA
Nokian Tyres U.S. Operations LLC
USA
Nokian Tyres Canada Inc.
Canada
Nokian Tyres s.r.o.
Czech Rep.
TOV Nokian Shina
Ukraine
TOO Nokian Tyres
Kazakhstan
OOO Nokian Shina
Vsevolozhsk Russia
TAA Nokian Shina Belarus
Belarus
Nokian Tyres Holding Oy
Nokia Finland
OOO Nokian Tyres
Vsevolozhsk Russia
OOO Hakkapeliitta Village
Vsevolozhsk Russia
Nokian Tyres Trading (Shanghai) Co Ltd
China
NT Tyre Machinery Oy
Nokia Finland
OOO Hakka Invest
Vsevolozhsk Russia
Koy Nokian Nosturikatu 18
Nokia Finland
Koy Nokian Rengaskatu 4
Nokia Finland
Nokian Tyres Spain S.L.U.
Spain
Nokianvirran Energia Oy
Nokia Finland . . .
Vianor Holding Oy
Nokia Finland
Vianor Oy
Lappeenranta Finland
Vianor AB
Sweden
Nordic Wheels AB
Sweden
Vianor AS
Norway
Vianor Inc.
USA
EAM NRE1V Holding Oy
Finland
Associated companies
Sammaliston Sauna Oy
Nokia Finland
Nokianvirran Energia Oy is a joint
operation with three parties that
supplies production steam for the tyre
plant in Nokia. The parties share control
according to a specic Mankala-principle
where the company is not intended to
make prot while the parties have agreed
to utilize the total output. The company is
accounted for as a Group company using
the proportionate consolidation method
on each row according to the 32.3%
shareholding.
The Board of Directors decided in their
meeting on August 7, 2017 to implement
a share aquisition and administration
arrangement of Nokian Tyres Plc
(Nokian Tyres) shares with Evli Awards
Management Oy (EAM) according to the
stipulations of the Companies Act for
nancing the purchase of own shares
(the Finnish Companies Act, Chapter
13, Section 10, Subsection 2) relating
to incentive plans. As a part of this
arrangement EAM founded EAM NRE1V
Holding Oy (Holding company) which
aquires the shares with Nokian Tyres’s
funding and according to the agreement.
These shares will be delivered to the
employees according to the Nokian
Tyre’s share plan terms and conditions.
The Holding company is owned by the
EAM in legal terms, but according to the
agreement Nokian Tyres has control over
the company and acts as the principal,
whereas EAM is an agent through the
Holding company. This control arising
from contractual terms means that the
Holding company is consolidated in to the
group’s IFRS nancial statements as a
structured entity.
The related parties of the Group consist of members of the Board of Directors, the
President, other key management personnel, and close members of their families.
Transactions and outstanding balances with parties having signicant inuence
1,000 euros 2021 2020
Key management personnel
Employee benet expenses
Short-term employee benets ,. ,.
Post-employment benets . .
Termination benets . .
Share-based payments . .
Tot al ,. ,.
Remunerations
Jukka Moisio, President ..– ,. .
of which incentives for the reported period .
Hille Korhonen, President ..–.. . ,.
of which incentives for the reported period . .
Members of the Board of Directors
Jukka Hienonen . .
Heikki Allonen . .
Raimo Lind . .
Veronica Lindholm . .
Inka Mero . .
George Rietbergen . .
Pekka Vauramo . .
Christopher Ostrander .
Jouko Pölönen .
Prior members of the Board of Directors
Kari Jordan . .
Petteri Walldén – .
Tot al . .
No incentives were paid to the members of the Board of
Directors.
Other key management personnel ,. ,.
of which incentives for the reported period . .
No special pension commitments have been granted to the members of the Board of
Directors and no statutory pension expense incurs. President and CEO Jukka Moisio
does not have a supplementary pension plan and his retirement age is in accordance
to the statutory pension regulations. The other management has a supplementary
penson plan of 10% of the annual salary and a retirement age of 63 years. Andrey
Pantyukhov’s supplementary pension is 15% of his annual salary.
No loans, guarantees or collaterals have been granted to the related parties.
Shares and share options granted to the President and other key management
personnel.
The share option plan terms for the key management are equal to the share options
directed at other personnel.
2021 2020
Granted (pcs)
Shares , ,
Share options – –
Held (pcs)
Shares , ,
Share options – –
Exercisable – –
No performance shares nor share options have been granted to the members of the Board of
Directors.
35. EVENTS AFTER THE REPORTING DATE
The management of the company is not aware of any signicant events after the
reporting date.
EUR million 1.1.–31.12. Notes 2021 2020
Net sales () . .
Cost of sales ()() –. –.
Gross prot . .
Selling, marketing and R&D expenses ()() –. –.
Administration expenses ()()() –. –.
Other operating expenses ()() –. –.
Other operating income . .
Operating prot . –.
Financial income and expenses () . .
Prot before appropriations and tax . .
Appropriations () –. .
Income tax () –. –.
Prot for the period . .
The warehousing costs in the income statement of the parent company have been reclassied from selling,
marketing and R&D expenses to the cost of sales. This has been harmonized in line with the group policy.
PARENT COMPANY
INCOME STATEMENT, FAS
Parent company nancial statements
Parent company income statement
Parent company balance sheet
PARENT COMPANY
BALANCE SHEET, FAS
EUR million 31.12. Notes 2021 2020
ASSETS
Fixed assets and other non-current assets
Intangible assets () . .
Tangible assets () . .
Shares in Group companies () . .
Investments in associates () . .
Shares in other companies () . .
Unquoted securities () . .
Total non-current assets . .
Current assets
Inventories () . .
Non-current receivables () . .
Current receivables () . .
Cash and cash equivalents . .
Total current assets ,. ,.
,. ,.
EUR million 31.12. Notes 2021 2020
LIABILITIES AND SHAREHOLDERS’ EQUITY
Shareholders’ equity ()
Share capital . .
Share premium . .
Treasury shares –. –.
Paid up unrestricted equity fund . .
Retained earnings . .
Prot for the period . .
Total shareholders’ equity . .
Untaxed reserves and provisions
Accumulated depreciation in excess of plan () . .
Liabilities
Non-current liabilities () . .
Current liabilities () . .
Total liabilities . .
,. ,.
EUR million 1.1.–31.12. 2021 2020
Prot for the period . .
Adjustments for
Depreciation, amortisation and impairment . .
Financial income and expenses –. –.
Gains and losses on sale of intangible assets, other changes . .
Income Taxes . .
Cash ow before changes in working capital . .
Changes in working capital
Current receivables, non-interest-bearing, increase (–) / decrease (+) –. –.
Inventories, increase (–) / decrease (+) –. .
Current liabilities, non-interest-bearing, increase (+) / decrease (–) . –.
Changes in working capital –. –.
Financial items and taxes
Interest and other nancial items, received . .
Interest and other nancial items, paid –. –.
Dividends received . .
Income taxes paid –. –.
Financial items and taxes . .
Cash ow from operating activities (A) . .
Cash ow from investing activities
Acquisitions of property, plant and equipment and intangible
assets –. –.
Proceeds from sale of property, plant and equipment and
intangible assets . –.
Acquisitions of other investments –. –.
Cash ow from investing activities (B) –. –.
EUR million 1.1.–31.12. 2021 2020
Cash ow from nancing activities
Purchase of treasury shares . –.
Change in current nancial receivables, increase (–) / decrease (+) –. .
Change in non-current nancial receivables,
increase (–) / decrease (+) . –.
Change in current nancial borrowings, increase (+) / decrease (–) –. .
Change in non-current nancial borrowings,
increase (+) / decrease (–) . –.
Dividends paid –. –.
Cash ow from nancing activities (C) –. .
Change in cash and cash equivalents, increase (+) / decrease (–)
(A+B+C) –. .
Cash and cash equivalents at the beginning of the period . .
Cash and cash equivalents at the end of the period . .
PARENT COMPANY STATEMENT OF CASH FLOWS, FAS
Parent company statement of cash ows
General
The nancial statements of Nokian Tyres
plc, domiciled in the city of Nokia, have
been prepared according to the Finnish
Accounting Standards (FAS).
Inventory valuation
Inventories are measured at the lower
of cost or the net realisable value. Cost
is primarily determined in accordance
with standard cost accounting. The cost
of nished goods and work in progress
includes raw material purchase costs,
direct manufacturing wages, other
direct manufacturing costs, and a share
of production overheads, borrowing
costs excluded. Net realisable value is
the estimated sales price in ordinary
activities less the costs associated with
the completion of the product and the
estimated necessary costs incurred to
make the sale of the product. Allowance
is recorded in obsolete items.
Fixed assets and depreciation
Fixed assets are stated in the balance
sheets at cost less depreciation
according to plan. The accumulated
dierence between the total depreciation
charged to the income statement and
depreciation according to plan is shown
as a separate item in untaxed reserves.
Depreciations according to plan are
calculated on the basis of the estimated
useful life of the assets using the straight
line method.
The depreciation times are as follows:
Intangible assets 3–10 years
Buildings 20–40 years
Machinery and equipment 4–20 years
Other tangible assets 10–40 years
Land property, as well as investments in
shares, are not regularly depreciated.
Research and development
Research and development costs are
charged to the other operating expenses
in the income statement in the year in
which they are incurred. Certain signi-
cant development costs with useful life
over three years are capitalised and are
amortised on a systematic basis over their
expected useful lives. The amortisation
period is between three and ve years.
Pensions and coverage
of pension liabilities
Pension contributions are based on
periodic actuarial calculations and are
charged to the income statement.
In Finland the pension schemes are
funded through payments to a pension
insurance company.
Equity
The acquisition cost of treasury shares
repurchased by the Group is recognised
as a deduction in equity. The consider-
ation received for the treasury shares
when sold, net of transaction costs and
tax, is included in equity.
Foreign currency items
Transactions in foreign currencies are
recorded at the exchange rates ruling
at the dates of the transactions. At the
end of the accounting period unsettled
balances on foreign currency transactions
and forward exchange contracts are
valued at the rates published by the
European Central Bank as on the nancial
statement date.
All foreign currency exchange gains
and losses are entered under nancial
income and expenses.
Direct taxes
The income statement includes direct
taxes based on the taxable prot and
direct taxes from previous years. The
untaxed reserves are shown in full in
the balance sheet, and the deferred tax
liability is not recorded.
ACCOUNTING POLICIES FOR THE PARENT COMPANY
Accounting policies for
the parent company
1. NET SALES BY SEGMENTS AND MARKET AREAS
EUR million 2021 2020
Passenger Car Tyres . .
Heavy Tyres . .
Total . .
Finland . .
Other Nordic countries . .
Other European countries . .
Russia and Asia . .
America . .
Other countries . .
Total . .
2. WAGES, SALARIES AND SOCIAL EXPENSES
EUR million 2021 2020
Wages and salaries . .
Pension contributions . .
Other social expenses . .
Total . .
Remuneration of the members of the Board of the Directors and the
Presidents on accrual basis . .
of which incentives . .
No special pension commitments have been granted to the members of the Board and no statutory pension
expense incurs. President and CEO Jukka Moisio does not have a supplementary pension plan and his retirement
age is in accordance to the statutory pension regulations. See also Notes to Consolidated Financial Statements,
note 34 Related party transactions.
Personnel, average during the year 2021 2020
Total
NOTES TO THE FINANCIAL STATEMENTS
OF THE PARENT COMPANY
Notes to the nancial statements
of the parent company
3. DEPRECIATION
EUR million 2021 2020
Depreciation according to plan by asset category
Intangible assets . .
Buildings . .
Machinery and equipment . .
Other tangible assets . .
Total . .
Impairment losses by asset category
Intangible assets – .
Buildings . .
Machinery and equipment . .
Shares in other companies – .
Total . .
Depreciation by function
Production . .
Selling, marketing and R&D . .
Administration . .
Total . .
Impairment losses by function
Production . .
Selling, marketing and R&D – .
Administration . .
Other impairment losses . .
Total . .
4. AUDITOR’S FEES
EUR million 2021 2020
Audit fee . .
Tax services . .
Other services . .
Total . .
The authorized public accountant has changed on 30.3.2021 and the current auditor is Ernst & Young Oy.
The audit fee for Ernst & Young Oy was EUR 0.3 million and for KPMG Oy Ab EUR 0.2 million in 2021.
5. FINANCIAL INCOME AND EXPENSES
EUR million 2021 2020
Dividend income
From the Group companies . .
Total . .
Interest income, non-current
From the Group companies . .
Total . .
Other interest and nancial income
From the Group companies . .
From others . .
Total . .
Exchange rate dierences (net) –. –.
Impairment, long-term investments –. –.
Interest and other nancial expenses
To the Group companies –. –.
To others –. –.
Other nancial expenses –. –.
Total –. –.
Total nancial income and expenses . .
6. APPROPRIATIONS
EUR million 2021 2020
Change in accumulated depreciation in excess of plan
Intangible assets . .
Buildings . .
Machinery and equipment –. .
Other tangible assets –. .
Total . .
Other appropriations
Group contributions –. –
Total –. –
Total appropriations –. .
7. INCOME TAX
EUR million 2021 2020
Direct tax for the year –. –.
Direct tax from previous years . .
Total –. –.
8. FIXED ASSETS
Intangible assets Tangible assets
EUR million Intangible rights
Other intangible
rights Land property Buildings
Machinery and
equipment
Other tangible
assets
Advances
and xed
assets under
construction
Accumulated cost, 1 Jan 2021 . . . . . . .
Increase . . . . . . .
Decrease –. . . –. –. –. .
Transfer between items . . . . . . –.
Accumulated cost, 31 Dec 2021 . . . . . . .
Accum. depr. acc. to plan 1 Jan 2021 –. –. . –. –. –. .
Accum. depr. on disposals . . . . . . .
Depreciations for the period –. . . –. –. –. .
Impairment . . . –. –. . .
Accum. depr. acc.to plan, 31 Dec 2021 –. –. . –. –. –. .
Carrying amount, 31 Dec 2021 . . . . . . .
Carrying amount, 31 Dec 2020 . . . . . . .
Accum. depreciation in excess of plan, 31 Dec 2021 . . – . . .
Accum. depreciation in excess of plan, 31 Dec 2020 . . – . . .
9. INVESTMENTS
EUR million
Shares in Group
companies
Investments in
associates
Shares in other
companies
Unquoted
securities
Accumulated cost, 1 Jan 2021 . . . .
Decrease –. – – –
Increase . – – –
Exchange dierences – – – .
Accumulated cost, 31 Dec 2021 . . . .
Carrying amount, 31 Dec 2021 . . . .
Carrying amount, 31 Dec 2020 . . . .
10. INVENTORIES
EUR million 2021 2020
Raw materials and supplies . .
Work in progress . .
Finished goods . .
Total . .
11. NON-CURRENT RECEIVABLES
EUR million 2021 2020
Loan receivables from the Group companies . .
Loan receivables from others . .
Total long-term receivables . .
The members of the Board of Directors and the President have not been granted loans.
12. CURRENT RECEIVABLES
EUR million 2021 2020
Receivables from the Group companies
Trade receivables . .
Loan receivables . .
Accrued revenues and deferred expenses . .
Total . .
Trade receivables . .
Other receivables . .
Accrued revenues and deferred expenses . .
Total . .
Total short-term receivables . .
Signicant items under accrued revenues and deferred expenses
Financial items . .
Taxes . .
Social payments . .
Capital expenditure in factories . .
Goods and services rendered and not invoiced, subsidiary . .
Other items . .
Total . .
13. SHAREHOLDERS’ EQUITY
EUR million 2021 2020
Restricted shareholders’ equity
Share capital, 1 January . .
Emissions – –
Share capital, 31 December . .
Share issue premium, 1 January . .
Emission gains – –
Share issue premium, 31 December . .
Total restricted shareholders’ equity . .
Non-restricted shareholders’ equity
Paid-up unrestricted equity reserve, 1 January . .
Emission gains . .
Paid-up unrestricted equity reserve, 31 December . .
Retained earnings, 1 January . .
Dividends to shareholders –. –.
Retained earnings, 31 December . .
Treasury shares –. –.
Prot for the period . .
Total non-restricted shareholders’ equity . .
Total shareholders’ equity . .
Specication of the distributable funds, 31 December
Retained earnings . .
Treasury shares –. –.
Paid-up unrestricted equity reserve . .
Prot for the period . .
Distributable funds, 31 December . .
14. NON-CURRENT LIABILITIES
EUR million 2021 2020
Interest-bearing
Loans from nancial institutions . .
Total . .
Non-interest-bearing
Accrued expenses and deferred revenues . .
Total . .
Total non-current liabilities . .
15. CURRENT LIABILITIES
EUR million 2021 2020
Interest-bearing
Liabilities to the Group companies
Finance loans . .
Commercial papers – .
Total interest-bearing liabilities . .
Non-interest-bearing
Liabilities to the Group companies
Trade payables . .
Accrued expenses and deferred revenues . .
Total . .
Trade payables . .
Liabilities to the others . .
Accrued expenses and deferred revenues . .
Total . .
Total non-interest-bearing liabilities . .
Total current liabilities . .
Signicant items under accrued expenses and deferred revenues
Wages, salaries and social security contributions . .
Annual discounts, sales . .
Taxes . –
Financial items . .
Commissions . .
Goods received and not invoiced – .
Warranty commitments . .
Group contributions . –
Other items . .
Total . .
The Group or the Parent company themselves do not directly hold any treasury shares.
Nokian Tyres has an agreement from 2017 with a third-party service provider
concerning the share-based incentive program for key personnel. The third party owns
Nokian Tyres’ shares related to the incentive program until the shares are given to
the participants of the program. In accordance with IFRS, these repurchased shares,
480,000 in 2017 and 500,000 in 2020, have been reported as treasury shares in the
Consolidated Statement of Financial Position. On December 31, 2021, the number of
these shares was 697,400. This number of shares corresponded to 0.50% of the total
shares and voting rights in the company.
17. DERIVATIVE FINANCIAL INSTRUMENTS
EUR million 2021 2020
Interest rate derivatives
Interest rate swaps
Notional amount . .
Fair value –. –.
Foreign currency derivatives
Currency forwards
Notional amount . .
Fair value –. –.
Currency options, purchased
Notional amount . .
Fair value . .
Currency options, written
Notional amount . .
Fair value –. –.
Interest rate and currency swaps
Notional amount . .
Fair value . .
Electricity derivatives
Electricity forwards
Notional amount . .
Fair value . .
Unrealised fair value changes of interest rate and electricity derivatives are not
recognised in prot and loss. The interest rate swap hedges the future interest
payments of a loan from a nancial institution and the electricity forwards hedge the
future electricity purchase prices in Finland. The contractual terms of these derivatives
and the hedged items are congruent. The cash ows of the interest rate swap and
electricity forwards will occur during the next four years.
The fair value of forward exchange contracts is measured using the forward rates
on the reporting date. The fair value of currency options is calculated using an option
valuation model.
The fair value of interest rate derivatives is determined as the present value of the
future cash ows based on market interest rates on the reporting date.
The fair value of electricity derivatives is based on quoted market prices in active
markets on the reporting date.
16. CONTINGENT LIABILITIES
EUR million 2021 2020
For own debt
Pledged assets . .
On behalf of Group companies and investments in associates
Guarantees . .
Pledged assets . .
The amount of debts and commitments mortgaged for total EUR 44.8 million (2020: EUR 64.8
million).
Other own commitments
Guarantees . .
Leasing and rent commitments
Payments due in . .
Payments due in subsequent years . .
18. ENVIRONMENTAL COMMITMENTS AND EXPENSES
Expenses relating to environment are included to production costs. The company has
duly attended to environmental commitments and has no information on material
environmental liabilities. In addition to the environmental aspects presented in the
Annual Report, Nokian Tyres issued a Corporate Social Responsibility Report in spring
2021.
Helsinki, 8th of February 2022
Jukka Hienonen Pekka Vauramo
Heikki Allonen Raimo Lind
Veronica Lindholm Inka Mero
Christopher Ostrander Jouko Pölönen
George Rietbergen Jukka Moisio
CEO
SIGNATURES FOR
THE FINANCIAL
STATEMENTS
AND THE REPORT
BY THE BOARD
OF DIRECTORS
Signatures
Report on the audit of the nancial statements has been given today.
Helsinki, 8th of February 2022
Ernst & Young Oy
Mikko Järventausta, APA
THE AUDITOR’S
NOTE
AUDITOR’S REPORT
To the Annual General Meeting of Nokian
Tyres plc
Report on the Audit of the
Financial Statements
Opinion
We have audited the nancial statements
of Nokian Tyres plc (business identity
code 0680006-8) for the year ended 31
December, 2021. The nancial statements
comprise the consolidated balance
sheet, income statement, statement of
comprehensive income, statement of
changes in equity, statement of cash
ows and notes, including a summary of
signicant accounting policies, as well
as the parent company’s balance sheet,
income statement, statement of cash
ows and notes.
In our opinion
• the consolidated nancial statements
give a true and fair view of the group’s
nancial position as well as its nancial
performance and its cash ows in
accordance with International Financial
Reporting Standards (IFRS) as adopted
by the EU.
• the nancial statements give a true
and fair view of the parent company’s
nancial performance and nancial
position in accordance with the
laws and regulations governing the
preparation of nancial statements
in Finland and comply with statutory
requirements.
Our opinion is consistent with the
additional report submitted to the Audit
Committee.
Basis for Opinion
We conducted our audit in accordance
with good auditing practice in Finland.
Our responsibilities under good auditing
practice are further described in the
Auditor’s Responsibilities for the Audit of
the Financial Statements
section of our
report.
We are independent of the parent
company and of the group companies in
accordance with the ethical requirements
that are applicable in Finland and are
relevant to our audit, and we have fullled
our other ethical responsibilities in
accordance with these requirements.
In our best knowledge and under-
standing, the non-audit services that we
have provided to the parent company and
group companies are in compliance with
laws and regulations applicable in Finland
regarding these services, and we have
not provided any prohibited non-audit
services referred to in Article 5(1) of
regulation (EU) 537/2014. The non-audit
services that we have provided have been
disclosed in note 6 to the consolidated
nancial statements.
We believe that the audit evidence we
have obtained is suicient and appro-
priate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters
that, in our professional judgment, were
of most signicance in our audit of the
nancial statements of the current
period. These matters were addressed in
the context of our audit of the nancial
statements as a whole, and in forming our
opinion thereon, and we do not provide a
separate opinion on these matters.
We have fullled the responsibilities
described in the
Auditor’s responsibilities
for the audit of the nancial statements
section of our report, including in relation
to these matters. Accordingly, our audit
included the performance of procedures
designed to respond to our assessment
of the risks of material misstatement
of the nancial statements. The results
of our audit procedures, including the
procedures performed to address the
matters below, provide the basis for
our audit opinion on the accompanying
nancial statements.
We have also addressed the risk of
management override of internal controls.
This includes consideration of whether
there was evidence of management
bias that represented a risk of material
misstatement due to fraud.
AUDITOR’S REPORT
Key Audit Matter How our audit addressed the Key Audit Matter
Revenue recognition
We refer to the accounting policies for the consolidated nancial statements and the note 1.
The Group’s revenue is recognized when control of the good or service is transferred to
the customer. Revenue is a key nancial performance measure which could create an
incentive for revenues to be recognized prematurely. Due to the variety of contractual
terms used across the Group’s markets management judgment is needed to account
for the revenue.
Customer discounts and credits are considered when determining the revenue.
Assessing discounts and credits require also management judgment both at the time
of revenue recognition as well as at the end of each reporting period. Based on above,
revenue recognition, was a key audit matter.
This matter was also a signicant risk of material misstatement referred to in EU
Regulation No 537/2014, point (c) of Article 10(2).
Our audit procedures to address the risk of material misstatement in respect of
revenue recognition, included, among others:
• Assessment of the compliance of the Group’s accounting policies over revenue
recognition, including those relating to discounts and credits, against IFRS standards.
• Assessment of the revenue recognition process especially relating to timing of
revenue recognition, and calculation of discounts and credits.
• Data analytical procedures, for example, analyzing the conversion of revenue to cash
received.
• Familiarizing ourselves with the contractual terms in sales agreements. Testing
the revenue cut-o with analytical procedures and with a sample test of details
on a transaction level on either side of the balance sheet date. Testing of revenue
discounts and credits on a sample basis.
• Analyzing credit notes issued after the prior year balance sheet date.
• Assessment of the Group’s disclosures in respect of revenues.
Foreign currency eects
We refer to the accounting policies for the consolidated nancial statements and the notes 23 and 29.
The Group’s equity may uctuate signicantly due to translation dierences arising
from foreign exchange rate changes in the Russian ruble, the Swedish krona, the
Norwegian krona, the Canadian dollar or the US dollar against Euro.
In 2021, the Group’s equity was aected by the change in translation dierences on
foreign operations by 54.5 M€ (2020: -168.7 M€).
The foreign currency eects was a key audit matter because of the signicance of
translation dierences to the Group’s equity.
Our audit procedures in respect of foreign currency eects included, among others:
• Assessment of the compliance of the Group’s accounting policies over translation of
foreign currency amounts against IFRS standards.
• Assessment of the Group’s consolidation process in respect of foreign currency
translation methods and reconciliations.
• Testing of the consolidation entries relating to foreign currency translations on a
sample basis.
• Assessment of the Group’s disclosures in respect of foreign currency eects.
Responsibilities of the Board of
Directors and the Managing Director
for the Financial Statements
The Board of Directors and the Managing
Director are responsible for the
preparation of consolidated nancial
statements that give a true and fair view
in accordance with International Financial
Reporting Standards (IFRS) as adopted by
the EU, and of nancial statements that
give a true and fair view in accordance
with the laws and regulations governing
the preparation of nancial statements
in Finland and comply with statutory
requirements. The Board of Directors
and the Managing Director are also
responsible for such internal control as
they determine is necessary to enable
the preparation of nancial statements
that are free from material misstatement,
whether due to fraud or error.
In preparing the nancial statements,
the Board of Directors and the Managing
Director are responsible for assessing
the parent company’s and the group’s
ability to continue as going concern,
disclosing, as applicable, matters relating
to going concern and using the going
concern basis of accounting. The nancial
statements are prepared using the going
concern basis of accounting unless there
is an intention to liquidate the parent
company or the group or cease opera-
tions, or there is no realistic alternative
but to do so.
Auditor’s Responsibilities for the
Audit of the Financial Statements
Our objectives are to obtain reasonable
assurance on whether the nancial state-
ments as a whole are free from material
misstatement, whether due to fraud or
error, and to issue an auditor’s report that
includes our opinion. Reasonable assur-
ance is a high level of assurance, but is
not a guarantee that an audit conducted
in accordance with good auditing practice
will always detect a material misstatement
when it exists. Misstatements can arise
from fraud or error and are considered
material if, individually or in aggregate,
they could reasonably be expected to
inuence the economic decisions of
users taken on the basis of the nancial
statements.
As part of an audit in accordance
with good auditing practice, we exercise
professional judgment and maintain
professional skepticism throughout the
audit. We also:
• Identify and assess the risks of material
misstatement of the nancial state-
ments, whether due to fraud or error,
design and perform audit procedures
responsive to those risks, and obtain
audit evidence that is suicient and
appropriate to provide a basis for our
opinion. The risk of not detecting a
material misstatement resulting from
fraud is higher than for one resulting
from error, as fraud may involve
collusion, forgery, intentional omissions,
misrepresentations, or the override of
internal control.
• Obtain an understanding of internal
control relevant to the audit in order
to design audit procedures that are
appropriate in the circumstances, but
not for the purpose of expressing
an opinion on the eectiveness of
the parent company’s or the group’s
internal control.
• Evaluate the appropriateness of
accounting policies used and the
reasonableness of accounting esti-
mates and related disclosures made by
management.
• Conclude on the appropriateness of the
Board of Directors’ and the Managing
Director’s use of the going concern
basis of accounting and based on the
audit evidence obtained, whether a
material uncertainty exists related to
events or conditions that may cast
signicant doubt on the parent compa-
ny’s or the group’s ability to continue
as a going concern. If we conclude
that a material uncertainty exists,
we are required to draw attention in
our auditor’s report to the related
disclosures in the nancial statements
or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are
based on the audit evidence obtained
up to the date of our auditor’s report.
However, future events or conditions
may cause the parent company or the
group to cease to continue as a going
concern.
• Evaluate the overall presentation,
structure and content of the nancial
statements, including the disclosures,
and whether the nancial statements
represent the underlying transactions
and events so that the nancial
statements give a true and fair view.
• Obtain suicient appropriate audit
evidence regarding the nancial
information of the entities or business
activities within the group to express
an opinion on the consolidated nancial
statements. We are responsible for the
direction, supervision and performance
of the group audit. We remain solely
responsible for our audit opinion.
We communicate with those charged
with governance regarding, among other
matters, the planned scope and timing
of the audit and signicant audit ndings,
including any signicant deciencies in
internal control that we identify during
our audit.
We also provide those charged with
governance with a statement that we
have complied with relevant ethical
requirements regarding independence,
and communicate with them all
relationships and other matters that
may reasonably be thought to bear on
our independence, and where applicable,
related safeguards.
From the matters communicated with
those charged with governance, we deter-
mine those matters that were of most
signicance in the audit of the nancial
statements of the current period and
are therefore the key audit matters. We
describe these matters in our auditor’s
report unless law or regulation precludes
public disclosure about the matter or
when, in extremely rare circumstances, we
determine that a matter should not be
communicated in our report because the
adverse consequences of doing so would
reasonably be expected to outweigh
the public interest benets of such
communication.
Other Reporting Requirements
Information on our audit
engagement
We were rst appointed as auditors by
the Annual General Meeting on March 30,
2021, and our appointment represents a
total period of uninterrupted engagement
of one year.
Other information
The Board of Directors and the Managing
Director are responsible for the other
information. The other information
comprises the report of the Board of
Directors and the information included in
the Annual Report, but does not include
the nancial statements and our auditor’s
report thereon. We have obtained the
report of the Board of Directors prior to
the date of this auditor’s report, and the
Annual Report is expected to be made
available to us after that date.
Our opinion on the nancial
statements does not cover the other
information.
In connection with our audit of the
nancial statements, our responsibility is
to read the other information identied
above and, in doing so, consider whether
the other information is materially
inconsistent with the nancial statements
or our knowledge obtained in the audit,
or otherwise appears to be materially
misstated. With respect to report of the
Board of Directors, our responsibility
also includes considering whether the
report of the Board of Directors has
been prepared in accordance with the
applicable laws and regulations.
In our opinion, the information in
the report of the Board of Directors is
consistent with the information in the
nancial statements and the report of
the Board of Directors has been prepared
in accordance with the applicable laws
and regulations.
If, based on the work we have
performed on the other information that
we obtained prior to the date of this
auditor’s report, we conclude that there
is a material misstatement of this other
information, we are required to report
that fact. We have nothing to report in
this regard.
Opinions based on assignment
of the Audit Committee
We support that the nancial statements
should be adopted. The proposal by the
Board of Directors regarding the use
of the distributable funds shown in the
nancial statements is in compliance
with the Limited Liability Companies Act.
We support that the Members of the
Board of Directors and the Managing
Director of the parent company should be
discharged from liability for the nancial
period audited by us.
Helsinki 8.2.2022
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Järventausta
Authorized Public Accountant
INDEPENDENT AUDITOR’S REPORT
ON NOKIAN RENKAAT OYJ’S ESEF
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Report
To the Board of Directors
of Nokian Renkaat Oyj
We have performed a reasonable assur-
ance engagement on the iXBRL tagging
of the consolidated nancial statements
included in the digital les tyres-2021-
12-31-.zip of Nokian Renkaat Oyj for the
nancial year 1.1.–31.12.2021 to ensure
that the nancial statements are tagged
with iXBRL mark ups in accordance with
the requirements of Article 4 of EU
Commission Delegated Regulation (EU)
2018/815 (ESEF RTS).
Responsibilities of the Board of
Directors and Managing Director
The Board of Directors and Managing
Director are responsible for the prepara-
tion of the Report of Board of Directors
and nancial statements (ESEF nancial
statements) that comply with the ESEF
RTS. This responsibility includes:
• preparation of ESEF nancial
statements in accordance
with Article 3 of ESEF RTS
• Tagging the consolidated nancial
statements included within the
ESEF nancial statements by using
the iXBRL mark ups in accordance
with Article 4 of ESEF RTS
• Ensuring consistency between
ESEF nancial statements and
audited nancial statements
The Board of Directors and Managing
Director are also responsible for such
internal control as they determine is
necessary to enable the preparation of
ESEF nancial statements in accordance
the requirements of ESEF RTS.
Auditor’s Independence
and Quality Control
We are independent of the company in
accordance with the ethical requirements
that are applicable in Finland and are
relevant to the engagement we have
performed, and we have fullled our other
ethical responsibilities in accordance with
these requirements.
The auditor applies International
Standard on Quality Control (ISQC) 1 and
therefore maintains a comprehensive
quality control system including docu-
mented policies and procedures regarding
compliance with ethical requirements,
professional standards and applicable
legal and regulatory requirements.
Auditor’s Responsibilities
In accordance with the Engagement
Letter we will express an opinion on
whether the electronic tagging of the
consolidated nancial statements
complies in all material respects with the
Article 4 of ESEF RTS. We have conducted
a reasonable assurance engagement in
accordance with International Standard
on Assurance Engagements ISAE 3000.
The engagement includes procedures
to obtain evidence on:
• whether the tagging of the
primary nancial statements in the
consolidated nancial statements
complies in all material respects
with Article 4 of the ESEF RTS
• whether the ESEF nancial
statements are consistent with the
audited nancial statements
The nature, timing and extent of the
procedures selected depend on the
auditor’s judgement including the
assessment of risk of material departures
from requirements sets out in the ESEF
RTS, whether due to fraud or error.
We believe that the evidence we have
obtained is suicient and appropriate to
provide a basis for our statement.
Opinion
In our opinion the tagging of the consol-
idated nancial statement included in
the ESEF nancial statements of Nokian
Renkaat Oyj for the year ended 31.12.2021
complies in all material respects with the
requirements of ESEF RTS.
Our audit opinion on the consolidated
nancial statements of Nokian Renkaat
Oyj for the year ended 31.12.2021 is
included in our Independent Auditor’s
Report dated 8.2.2022. In this report, we
do not express an audit opinion or any
other assurance on the consolidated
nancial statements.
Helsinki 2.3.2022
Ernst & Young Oy
Authorized Public Accountant Firm
Mikko Järventausta
Authorized Public Accountant
(Translation of the Finnish original)
20212020201920182017
0
2
4
6
8
10
12
pcs million
10
20
30
40
50
20212020201920182017
EUR
INFORMATION ON NOKIAN TYRES’ SHARE
Share data
Market Nasdaq Helsinki
Listing date June 1, 1995
Currency euro
ISIN FI0009005318
Symbol TYRES
Reuters symbol TYRES.HE
Bloomberg symbol TYRES:FH
Industry OMXH Large Caps
Sector Consumer goods
Industry Automobiles and parts
Number of shares,
December 31, 2021 138,921,750
Share capital and shares
The company has one class of shares,
each share entitling the shareholder to
one vote and carrying equal rights to
a dividend. On December 31, 2021, the
number of shares was 138,921,750.
Read more: www.nokiantyres.
com/company/investors/share/
share-information/
NUMBER OF SHAREHOLDERS ON DECEMBER 31, 2021
Number of
shares
Number of
shareholders
% of share-
holders
Total number of
shares
% of share
capital
1–100 , . ,, .
101–500 , . ,, .
501–1,000 , . ,, .
1,001–5,000 , . ,, .
5,001–10,000 . ,, .
10,001–50,000 . ,, .
50,001–100,000 . ,, .
100,001–500,000 . ,, .
500,001– . ,, .
Total , ,,
SHAREHOLDER STRUCTURE ON DECEMBER 31, 2021
Number of
shares
% of share
capital
Nominee registered and non-Finnish holders ,, .
Households ,, .
General Government ,, .
Financial and insurance corporations ,, .
Non-prot institutions ,, .
Corporations ,, .
Total ,,
Read more: www.nokiantyres.com/company/investors/share/major-shareholders/
Read more: www.nokiantyres.
com/company/investors/share/
share-performance/
SHARE TRADING VOLUMES ON NASDAQ
HELSINKI JAN 1, 2017–DEC 31, 2021
SHARE PRICE DEVELOPMENT ON NASDAQ
HELSINKI JAN 1, 2017–DEC 31, 2021
Information on Nokian Tyres’ share
NOKIAN TYRES
GROUP STRUCTURE
32.3%
99%
NOKIAN TYRES PLC
NOKIAN DÄCK AB VIANOR HOLDING OY
NOKIAN DEKK AS VIANOR AB
NOKIAN TYRES AG VIANOR AS
NOKIAN TYRES GMBH VIANOR OY
NOKIAN TYRES CANADA INC. VIANOR INC.
NOKIAN TYRES U.S. HOLDINGS INC NORDIC WHEELS AB
NOKIAN TYRES INC.
NOKIAN TYRES U.S. OPERATIONS LLC
NT TYRE MACHINERY OY
1%
NOKIAN RENKAAT HOLDING OY
TAA NOKIAN SHINA BELARUS
OOO NOKIAN SHINA, Vsevolozhsk
OOO NOKIAN TYRES, Vsevolozhsk
OOO HAKKAPELIITTA VILLAGE
NOKIAN TYRES TRADING (SHANGHAI) CO LTD
NOKIAN TYRES S.R.O.
NOKIAN RASKAAT RENKAAT OY
LEVYPYÖRÄ OY
TOV NOKIAN SHINA
TOO NOKIAN TYRES
OOO HAKKA INVEST
NOKIAN TYRES SPAIN S.L.U
NOKIAN TYRES SP Z O.O.
KIINTEISTÖ OY NOKIAN NOSTURIKATU 18
KIINTEISTÖ OY NOKIAN RENGASKATU 4
NOKIANVIRRAN ENERGIA OY
Nokian Tyres Group structure
CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
STATEMENT 2021
I Introduction
During 2021 Nokian Tyres plc (hereinafter
referred to as “Nokian Tyres” or the
“Company”) complied in full with the
Corporate Governance Code published
by the Securities Market Association that
entered into force on January 1, 2020
(the “Corporate Governance Code 2020”)
and the Company complies with the
recommendations in the said code. This
Corporate Governance Statement has
been prepared in accordance with the
Corporate Governance Code 2020. The
Corporate Governance Code 2020 is
available in its entirety at www.cgnland.
/en/. The Company follows the Finnish
Limited Liability Companies Act, laws
and regulations relating to publicly listed
companies in Finland, the Articles of
Association, the charters of the Board
of Directors and the committees, the
Nasdaq Helsinki rules and regulations,
and the orders and instructions from
the European Securities and Markets
Authority as well as from the Financial
Supervisory Authority.
The Company publishes its Corporate
Governance Statement as a separate
document and as part of the Financial
Review. The Company has prepared a
separate remuneration report in accor-
dance with the Corporate Governance
Code 2020. The statement and said
report are available on the Company’s
website at www.nokiantyres.com under
Investors – Corporate Governance.
CORPORATE GOVERNANCE
STATEMENT 2021
Shareholders
Shareholders’
Nomination Board
Auditors
Internal control
General Meeting
Board
Audit Committee
Personnel and
Remuneration
Committee
President and CEO
Management Team
The Company’s corporate governance
is based on the General Meeting, the
Articles of Association, the Board
of Directors, the President and CEO,
the Group’s Management Team, the
legislation and regulations mentioned
hereinabove as well as the Group’s
policies, procedures, and practices. The
Board of Directors has approved the
Corporate Governance Statement. The
Company’s auditor veries that the
statement and its related descriptions of
the internal reporting controls and risk
management correspond to the nancial
reporting process. The statement will not
be updated during the nancial period;
however, up-to-date information will be
provided on the Company’s website at
www.nokiantyres.com/company/investors/.
II Governance bodies
Nokian Tyres is a Finnish limited liability
company and its registered place of
business is Nokia. The parent company
Nokian Tyres plc and its subsidiaries form
the Nokian Tyres Group. The administra-
tive bodies of the parent company Nokian
Tyres plc, i.e. the General Meeting, the
Board of Directors and the President and
CEO, are responsible for the administra-
tion and operation of the Nokian Tyres
Group. The General Meeting elects the
members of the Board of Directors, and
the Chairman and the Deputy Chairman
of the Board upon the proposal by the
Shareholders’ Nomination Board, and
the Board of Directors appoints the
Company’s President and CEO. The
President and CEO is assisted by the
Group’s Management Team in leading the
Company’s operations.
General Meeting
The Company’s highest decision-making
power is held by the General Meeting,
whose tasks and procedures are outlined
in the Limited Liability Companies Act and
the Articles of Association. The Annual
General Meeting decides on such matters
as the conrmation of the Company’s
annual accounts, prot distribution, and
discharging the Board of Directors and
the President and CEO from liability.
Furthermore, the Annual General Meeting
decides on the number of members in
the Board of Directors, the selection
of the board members and the auditor,
and their remuneration. In addition, the
General Meeting can make decisions
on questions such as amendments to
the Articles of Association, share issues,
granting warrants, and acquisition of the
company’s own shares.
The Annual General Meeting is held by
the end of May of each year on a date
determined by the Board of Directors,
either at the Company’s registered place
of business or in the city of Tampere
or Helsinki. An extraordinary general
meeting is summoned whenever the
Board considers this to be necessary or if
an auditor or a group of shareholders with
a holding of a total of at least one-tenth
of all the shares in the Company requires
it in writing in order to address a particular
issue.
According to law, a shareholder has
the right to have a matter falling within
the competence of the General Meeting
Nokian Tyres’ administrative organization
Corporate governance statement
dealt with by the General Meeting, if the
shareholder so demands in writing from
the Board of Directors well in advance of
the General Meeting, so that the matter
can be mentioned in the notice to the
meeting. The shareholder shall submit the
request for having a matter to be dealt
with by the General Meeting by the date
indicated on the Company’s website.
The Articles of Association state that
the notice of a General Meeting shall be
published on the Company’s website. In
addition, the Company publishes the
notice of a General Meeting as a stock
exchange release. The invitation lists the
agenda of the meeting.
The Company’s Articles of Association
are available on the Company’s website at
www.nokiantyres.com/company/investors/.
Shareholders are entitled to participate
in the General Meeting if they are
registered in the Company’s shareholders’
register, maintained by Euroclear Finland
Oy, on the record date separately
indicated by the Company. A holder
of nominee registered shares can be
temporarily registered in the shareholders’
register of the Company for purposes of
participation in the General Meeting.
According to the Corporate
Governance Code 2020, the Chairman
of the Board, the Board members and
the President and CEO must be present
at the General Meeting, and the auditor
must be present at the Annual General
Meeting. Board member candidates
must be present at the General Meeting
deciding on their election.
Shareholders’ Nomination Board
The Company’s Shareholders’ Nomination
Board (the “Nomination Board”) was
established in 2020. According to the
Charter of the Nomination Board, the
duties of the Nomination Board consist
of the preparation of proposals to the
General Meeting concerning the number,
composition, Chairman and possible
Deputy Chairman of the Board and the
remuneration of the members of the
Board and the Board committees. In
addition, the Nomination Board seeks
prospective successor candidates for the
members of the Board.
The Nomination Board consists of
ve members of which four members
represent the Company’s four largest
shareholders who on the rst banking
day of June each year are the largest
shareholders as determined on the
basis of the shareholders’ register of
the Company maintained by Euroclear
Finland Ltd. and wish to nominate a
member to the Nomination Board. The
fth member of the Nomination Board
is the Company’s Chairman of the Board.
Proposals that have been supported by at
least three members of the Nomination
Board, shall constitute the proposals of
the Nomination Board.
The Nomination Board is established
to operate until abolished by the decision
of the General Meeting. The term of
the members of the Nomination Board
shall end upon the nomination of the
following Nomination Board in accordance
with the Charter of the Nomination
Board. The members of the Nomination
Board are not entitled to remuneration
from the Company on the basis of their
membership unless otherwise decided by
the General Meeting.
The following members were appointed
to the Nomination Board in 2021:
• Antti Mäkinen (CEO, Solidium Oy),
appointed by Solidium Oy
• Heikki Westerlund (board professional),
appointed by Bridgestone Corporation
• Mikko Mursula (Chief Investment Oicer,
Ilmarinen Mutual Pension Insurance
Company), appointed by Ilmarinen
Mutual Pension Insurance Company
• Kalle Karppinen (Head of
Research, Nordic Equities, Nordea
Investment Management),
appointed by Nordea Funds
• Jukka Hienonen, Chairman of
the Board, Nokian Tyres plc
During its tenure, the Nomination Board
had ve meetings and all members
participated in all meetings.
The proposals by the Nomination Board
to the Annual General Meeting 2022 were
published on January 21, 2022.
The Charter of the Nomination
Board is available at www.
nokiantyres.com/company/
investors/corporate-governance/
shareholders-nomination-board/.
Board of Directors
Operation of the Board of Directors
The Board is responsible for the
Company’s corporate governance and the
appropriate organization of its operations
pursuant to the Finnish Limited Liability
Companies Act and other regulations.
The Annual General Meeting for 2021
was held through exceptional proce-
dures on March 30, 2021 in Helsinki,
Finland in accordance with the tempo-
rary legislative act to limit the spread
of the Covid-19 pandemic (677/2020),
which entered into force on October
3, 2020. The meeting conrmed the
nancial statements, discharged the
Board members and the President and
CEO from liability for the scal year
2020, and decided on the payment of
dividend, the composition of the Board
of Directors and their remuneration
and the election of the auditor and
its remuneration. Further, the Annual
General Meeting authorized the Board
of Directors to decide on the repur-
chase of the Company’s own shares as
well as on the issuance of shares and
special rights entitling to shares. In
addition, the Annual General Meeting
adopted the Company’s Remuneration
Report for governing bodies. All of
the documents related to the Annual
General Meeting are available on the
Company’s website at www.nokiantyres.
com/company/investors.
The Annual General Meeting for
2022 will take place on April 28, 2022
at 10:00 a.m. EET.
The Board holds the general authority
in company-related issues, unless other
company bodies have the authority under
the applicable legislation or the Articles
of Association. The policies and key tasks
of the Board are dened in the Finnish
Limited Liability Companies Act, the
Articles of Association, and the Board’s
charter. The key tasks include:
• Approving consolidated nancial
statements, half year reports
and interim reports
• Presenting matters to the
General Meeting
• Appointing and dismissing
the President and CEO
• Organization of nancial control.
In addition, as dened in the Board
charter, the Board deals with, and decides
on, matters of principle as well as issues
that carry nancial and business signi-
cance, such as:
• Group strategy and nancial objectives
• The Group’s action, budget,
and investment plans
• The Group’s risk management
and reporting procedures
• Decisions concerning the structure
and organization of the Group
• Signicant individual investments,
acquisitions, divestments,
and reorganizations
• The Group’s nancing policies
• Reward and incentive schemes
for the Group’s management
• Monitoring compliance with the
applicable legal and regulatory
requirements and the corporate
policies, such as Code of Conduct,
approved by the Board
• Appointing Board committees
• Monitoring and evaluating the
actions of the President and CEO
The Company has a separate Audit
Committee and a Personnel and
Remuneration Committee.
The President and CEO is in charge of
ensuring that the Board members have
the necessary and suicient information
on the Company’s operations. The Board
assesses its activities and operating
methods by carrying out a self-evaluation
once a year. Members of the Board and
the President and CEO will not participate
in making a decision where the law states
that they must be disqualied.
Composition of the Board
According to the Articles of Association
of Nokian Tyres, the Board of Directors
comprises no fewer than four and no
more than nine members. The proposal
regarding the composition and remu-
neration of the Board for the General
Meeting is prepared by the Nomination
Board. The number of Board members
and the composition of the Board shall
be such that the Board is capable of
eiciently carrying out its tasks, while
taking into account the requirements
set by the Company’s operations and its
stage of development. The elected Board
members must be qualied for the task
and able to devote a suicient amount of
time for the Board duties.
Members of the Board are elected
at the Annual General Meeting for a
one-year term of oice that begins after
the closing of the Annual General Meeting
and ends at the end of the next Annual
General Meeting. In 2021, the Annual
General Meeting appointed the Chairman
and the Deputy Chairman from among
the Board members upon the proposal by
the Nomination Board. The remuneration
payable to the Board members is also
decided at the Annual General Meeting
based on the proposal by the Nomination
Board.
Information on the Board members
The Annual General Meeting on March 30,
2021 elected nine Board members. The
Board members Heikki Allonen, Jukka
Hienonen, Raimo Lind, Veronica Lindholm,
Inka Mero, George Rietbergen and Pekka
Vauramo were re-elected. Kari Jordan
was no longer available for re-election.
It was resolved to elect Christopher
Ostrander and Jouko Pölönen as new
members of the Board of Directors. The
Annual General Meeting appointed Jukka
Hienonen as the Chairman and Pekka
Vauramo as the Deputy Chairman of the
Board.
Jukka Hienonen,
Chairman of the Board (b. 1961)
Member of the Board since 2020. Member
of the Personnel and Remuneration
Committee. Member of the Shareholders’
Nomination Board.
Education: Master of Science (Economics)
Main occupation: Professional board
member
Key experience:
2010−2014 SRV Plc, CEO
2005−2010 Finnair Plc, CEO
1995−2005 Stockmann Plc, Deputy CEO
2000−2005, Director 1995−2000
1991−1995 Timberjack Oy, VP Marketing
1985−1991 Kaukomarkkinat Oy, Director
1988−1991, Representative, Moscow
1986−1988
Key positions of trust:
Chairman of the Board: Juuri Partners Oy
Pekka Vauramo,
Deputy Chairman of the
Board (b. 1957)
Member of the Board since 2018. Member
of the Personnel and Remuneration
Committee.
Education: Master of Science (Technology)
Main occupation: President and CEO,
Metso Outotec Corporation
Key experience:
2020– Metso Outotec Corporation,
President and CEO
2018–2020 Metso, President and CEO
2013–2018 Finnair Plc, President and CEO
2007–2013 Various management
positions at Cargotec
1995–2007 Various management
positions at Sandvik AB
1985–1995 Various management positions
at Tamrock Corporation
Heikki Allonen (b. 1954)
Member of the Board since 2016. Member
of the Audit Committee.
Education: Master of Science (Technology)
Main occupation: Professional board
member
Key experience:
2008–2016 Patria Oyj, President and CEO
2004–2008 Fiskars Corporation,
President and CEO
2001–2004 SRV Group Plc, President and
CEO
1992–2001 Wärtsilä Oyj, VP, Corporate
Development, Member of the Board of
Management
1986–1992 Oy Lohja Ab/Metra Oy Ab,
Management positions
Key positions of trust:
Vice Chairman of the Board: VR Group Oy
and Savox Oy Ab
Member of the Board: NRC Group ASA
and Helsingin Satama Oy
Raimo Lind (b. 1953)
Member of the Board since 2014.
Chairman of the Audit Committee.
Education: Master of Science (Economics)
Main occupation: Professional board
member
Key experience:
2005–2013 Wärtsilä Corporation, Senior
Executive Vice President and deputy to
the CEO
1998–2004 Wärtsilä Corporation, CFO
1992–1997 Tamrock Oy, Coal division
president, Service division president, CFO
1990–1991 Scantrailer Ajoneuvoteollisuus
Oy, Managing Director
1976–1989 Wärtsilä, Service division,
Vice President; Wärtsilä Singapore Ltd,
Managing Director; Wärtsilä Diesel division,
Vice President Group Controller
Veronica Lindholm (b. 1970)
Member of the Board since 2016.
Chairman of the Personnel and
Remuneration Committee.
Education: Master of Science (Economics)
Main occupation: CEO, Indoor Group Oy
Key experience:
2020– Indoor Group Oy, CEO
2015–2019 Finnkino Oy, CEO
2013–2015 Mondelez Finland, CEO
2009–2013 Walt Disney Company Nordic,
VP, Chief Marketing Oicer
2008–2009 Walt Disney Studios, Head of
Digital Distribution EMEA
2000–2008 Walt Disney International
Nordic, Marketing Director
Key positions of trust:
Member of the Board: Finland Chamber of
Commerce
Inka Mero (b. 1976)
Member of the Board since 2014. Member
of the Audit Committee.
Education: Master of Science (Economics)
Main occupation: Managing Partner &
Founder, Voima Ventures VC Fund
Key experience:
2019– Voima Ventures I & II VC Fund,
Managing Partner & Founder
2008– KoppiCatch Oy, Co-founder and
Chairwoman
2016–2019 Pivot5 Oy (Industryhack Oy),
Co-founder and Chairwoman
2006–2008 Playforia Oy, CEO
2005–2006 Nokia Corporation, Director
2001–2005 Digia Plc, VP, Sales and
Marketing
1996–2001 Sonera Corporation,
Investment Manager
Key positions of trust:
Chairman of the Board: KoppiCatch Oy,
Voima Ventures Oy, KuvaSpace Oy and
Adamant Health Oy
Member of the Board: Fiskars Corporation
Plc, Betolar Plc, Dispelix Oy, Elfys Oy and
Tactotek Oy
Advisor/Working group member: Musti
Group plc, Finnish Center of Articial
Intelligence, Expert group for Sustainable
Economic Growth assigned by the
Ministry of Economic Aairs
Christopher Ostrander (b. 1968)
Member of the Board since 2021.
Education: B.Sc. (Mechanical Engineering);
M.Sc. (Engineering Management); MBA
Main occupations: CEO/Managing
Partner, Premier Staing Solution, LLC;
Partner/Chairman, Kensington Hill Capital,
LLC; Partner/Chairman, Cornerstone
Consulting Organization, LLC
Key experience:
2020– CEO/Managing Partner, Premier
Staing Solution, LLC
2017– Partner/Chairman, Kensington
Hill Capital, LLC; Partner/Chairman,
Cornerstone Consulting Organization, LLC
2016–2018 CEO and Advisory Board
Chairman, Family Oice of Gardner &
Sons
2015–2016 President and Chief Executive
Oicer, AP Exhaust Technologies
2011–2015 Senior Vice President and
President, Americas Operations, Cooper
Tire & Rubber Company
2004–2010 Vice President/General
Manager and Vice President of Sales/
Marketing, Eaton Corporation
1998–2004 Vice President of Sales/
Marketing (Distributor Network), The BOC
Group
1991–1997 Captain, United States Army
Corps of Engineers
Key positions of trust:
Kensington Hill Partners II, LLC, and
Kensington Hill Capital, LLC, Chairman of
the Board
Cornerstone Consulting Organization,
LLC, Chairman of the Board
Tamarind Hill Management, LLC Limited
Partner Advisor
University of Findlay, Member of Board
of Trustees, Chairman of the Board of
Trustees
Jouko Pölönen (b. 1970)
Member of the Board since 2021. Member
of the Audit Committee.
Education: M.Sc. (Econ & Bus. Adm.),
Authorized Public Accountant, eMBA
Main occupation: President and CEO,
Ilmarinen Mutual Pension Insurance
Company
Key experience:
2018– President and CEO, Ilmarinen
Mutual Pension Insurance Company
2013–2018 President and CEO, OP
Corporate Bank plc
2014–2018 President and CEO, Helsinki
Area Cooperative Bank
2011–2014 President, Pohjola Insurance
Ltd, A-Insurance Ltd and Eurooppalainen
Insurance Company Ltd
2009–2010 Chief Financial Oicer,
Pohjola Bank plc
2001–2008 Chief Risk Oicer, Pohjola
Bank plc
1993–2001 Auditor, Authorized
Public Accountant since 1999,
PricewaterhouseCoopers Ltd
Key positions of trust:
Chairman of the Board: The Finnish
Pension Alliance TELA and The Finnish
Foundation for Share Promotion
Member of the Board: The Employment
Pension Executive Committee, Finance
Finland FFI and Suomen Laatuyhdistys ry
George Rietbergen (b. 1964)
Member of the Board since 2017.
Education: Master of Business
Administration
Main occupation: CEO, Koninklijke
Oosterberg
Key experience:
2021– Koninklijke Oosterberg, CEO
2017–2020 5Square Committed Capital,
Partner
2016–2017 Nokian Tyres plc, Advisor to
the Board
2015–2016 Arriva Netherlands, COO
2013–2015 Goodyear Dunlop Tyres, Group
Man. Director DACH
2012–2013 Goodyear Dunlop Tyres EMEA,
Vice president Commercial Tyres
2010–2012 Goodyear Dunlop Tyres, Group
Man. Director UK & Ireland
2001–2010 Goodyear Dunlop Tyres EMEA,
Director Retail and eBusiness
1998–2001 KLM Royal Dutch Airlines,
director eBusiness
Independence of the
Board members
Pursuant to the recommendation of the
Corporate Governance Code 2020, the
Board assesses the independence of
its members annually. According to the
Board’s estimate, all Board members are
independent of the Company and its
major shareholders.
Shares owned by Board
members and their controlled
corporations December 31, 2021
Nokian Tyres holdings of the
Company’s current Board
members
Number of
shares
Jukka Hienonen, Chairman ,
Pekka Vauramo, Deputy
Chairman since March 30, 2021 3,341
Heikki Allonen, Member ,
Raimo Lind, Member ,
Veronica Lindholm, Member ,
Inka Mero, Member ,
Christopher Ostrander, Member
Jouko Pölönen, Member ,
George Rietbergen, Member ,
Total ,
The Board members’ attendance at
meetings and at making resolutions
without a meeting (per capsulam)
The Board convened a total of 10 times
and made once resolutions without a
meeting (per capsulam) in 2021.
Attendance at meetings /
per capsulam resolutions
by the Company’s Board
members in 2021
Attendance/
meetings
or per
capsulam
resolutions
Jukka Hienonen, Chairman /
Kari Jordan, Member and
Deputy Chairman until March
30, 2021 /
Pekka Vauramo,
Deputy Chairman since
March 30, 2021 /
Heikki Allonen, Member /
Raimo Lind, Member /
Veronica Lindholm, Member /
Inka Mero, Member /
Christopher Ostrander,
Member (since March 30,
2021) /
Jouko Pölönen, Member (since
March 30, 2021) /
George Rietbergen, Member /
Diversity of the Board of Directors
The Company sees diversity as a success
factor enabling the achievement of
Nokian Tyres’ strategic goals and business
growth. In practice, diversity means
dierent factors such as gender, age,
nationality, and the complementary
expertise of the members, their
education and experience in dierent
professional areas and industrial sectors
in which the Group mainly operates.
Leadership experience and personal
competencies are also considered.
The Board shall have no fewer than two
representatives from both genders. If
two candidates are equally qualied, the
candidate from the minority gender
has priority. This goal has been met in
the current Board. The Board members
have signicant experience in industry,
consumer business and nancial manage-
ment, among other things. The status
and progress of diversity is monitored by
the Shareholders’ Nomination Board.
The principles concerning the selection of
the Board and its diversity are visible on
the Company’s website at www.nokian-
tyres.com/company/investors/.
Committees of the Board
The Board will decide on the committees
and their chairpersons and members
each year at its constituent meeting. In
2021, the Board had two committees:
the Personnel and Remuneration
Committee and the Audit Committee.
Each committee must include no
fewer than three members having the
competence and expertise necessary for
working in the committee. At least one
member of the Audit Committee must
have expertise in accounting or auditing.
The majority of the members of the
Personnel and Remuneration Committee
must be independent of the Company.
The majority of the members of the Audit
Committee must be independent of
the Company, and at least one member
must be independent of the Company’s
major shareholders. The President
and CEO and the other members of
the Group Management Team cannot
act as members of the Personnel and
Remuneration Committee.
Personnel and Remuneration
Committee
The Personnel and Remuneration
Committee prepares a proposal to the
Board on the Company’s President and
CEO and on the salary and other incen-
tives paid to the President and CEO. The
Personnel and Remuneration Committee
also prepares a proposal to the Board
on the nominations, salaries and other
incentives of the Group Management
Team members. This committee also
reviews and submits a proposal to the
Board on the allocation and criteria of
the Nokian Tyres share-based incentive
plans, and on the other incentive plans. In
addition, the key duties of the Personnel
and Remuneration Committee include
the preparation of the remuneration
policy and the remuneration report for
the Board and the President and CEO
in accordance with applicable laws and
regulations. The committee has no
independent decision-making power;
collective decisions are made by the
Board, which is responsible for carrying
out the tasks assigned to the committee.
In 2021, the members of the Personnel
and Remuneration Committee until March
30, 2021 were Kari Jordan (Chairman),
Jukka Hienonen and Veronica Lindholm,
and from there onwards Veronica
Lindholm (Chairman), Jukka Hienonen and
Pekka Vauramo.
The committee assembled four times
in 2021.
All committee members are indepen-
dent of the Company and of all major
shareholders in the Company.
Audit Committee
The Audit Committee assists the Board
of Directors in its regulatory duties and
reports to the Board. The committee
has no independent decision-making
power; collective decisions are made by
the Board, which is then responsible for
carrying out the tasks assigned to the
committee.
According to the committee
charter, the committee controls that
bookkeeping, nancial administration,
nancing, internal control, internal
auditing, audit of the accounts, risk
management and compliance function
are appropriately arranged in the
Company. The committee follows and
assesses the reporting process for nan-
cial statements as well as any signicant
changes in the recording principles and
the items valued in the balance sheet.
The committee also processes the
general description of the mechanisms
of internal auditing and risk management
of the nancial reporting process, which
forms part of the Corporate Governance
Statement. The committee follows
the statutory auditing of the nancial
statement and the consolidated nancial
statements and assesses the indepen-
dence of the statutory auditor and the
oering of services other than auditing
services by the auditor. Furthermore, the
committee handles the auditor’s report
and possible audit minutes as well as the
supplementary report presented by the
auditor to the committee. The committee
prepares the draft resolution on selecting
the auditor. In addition, the Audit
Committee monitors and assesses how
agreements and other legal acts between
the Company and its related parties
meet the requirements of the ordinary
course of business and arm’s length
terms in accordance with applicable laws
and regulations. The Audit Committee
must have the expertise and experience
required for its tasks.
In 2021, the members of the Audit
Committee were Raimo Lind (Chairman),
Heikki Allonen, Inka Mero, Pekka Vauramo
(until March 30, 2021) and Jouko Pölönen
(since March 30, 2021). As a general rule,
the Company’s chief auditor participates
in the committee’s meetings.
The committee assembled ve times
in 2021.
All committee members are indepen-
dent of the Company and of all major
shareholders in the Company.
The attendance of Board members at committee meetings in 2021
Personnel and
Remuneration Committee Audit Committee
Jukka Hienonen /
Kari Jordan (until March 30, 2021) /
Pekka Vauramo (at Personnel and
Remuneration Committee since March 30,
2021 and at Audit Committee until March 30,
2021) / /
Heikki Allonen /
Raimo Lind /
Veronica Lindholm /
Inka Mero /
Christopher Ostrander (since March 30, 2021)
Jouko Pölönen (since March 30, 2021) /
George Rietbergen
President and CEO and his/her duties
The President and CEO conducts the
Group’s business and manages the
Company operations in accordance
with the Finnish Limited Liability
Companies Act and the instructions
and guidelines provided by the Board
of Directors. The President and CEO is
responsible for informing the Board of
Directors regarding the development of
the Company’s business and nancial
situation. The President and CEO
prepares the Company´s strategy and
objectives for the Board of Directors. The
President and CEO is also responsible for
implementing the approved strategy and
plans. The President and CEO is respon-
sible for ensuring the legal compliance
of the Company’s bookkeeping and for
arranging reliable asset management.
The President and CEO is elected by the
Board of Directors. Jukka Moisio has been
the Company’s President and CEO since
May 27, 2020.
Jukka Moisio (b. 1961)
Education: Master of Science (Economics),
MBA
Position: President and CEO since May 27,
2020
Key experience:
2008–2019 Huhtamäki Oyj, President and
CEO
2004–2008 Ahlstrom Oyj, President and
CEO
1991–2004 Ahlstrom Oyj, various manage-
ment positions
1989–1991 McKinsey & Company,
Associate
Key positions of trust:
Chairman of the Board: Paulig Oy and
Sulapac Oy
Member of the Board: Atria Oyj and Metsä
Board Corporation
Nokian Tyres holdings of the
President and CEO and controlled
corporations, December 31, 2021
Number of
shares
Jukka Moisio, President & CEO ,
Management Team
The Group’s Management Team is respon-
sible for assisting the President and CEO
in preparing the Company’s strategy
and in operative management, and for
discussing matters that involve substan-
tial nancial or other impacts, such as
corporate transactions and organization
changes. Members of the Management
Team carry the main responsibility for
their business areas and functions. The
Management Team has no activities
based on the applicable legislation or
the Articles of Association. According
to the Group’s meeting practices, the
Management Team assembles approx-
imately 11 times per year. In addition to
the President and CEO, the heads of
the business units, business areas and
functions participate in the meetings.
Jukka Moisio (b. 1961)
• President and CEO
• Master of Science
(Economics), Master of
Business Administration
• Number of Shares 18,000
Management Team December 31, 2021
More detailed information concerning the Group’s Management Team is available on the Company’s website at
www.nokiantyres.com/company/investors/corporate-governance/the-groups-management-team/.
Andrey Pantyukhov (b. 1972)
• Russia, Asia and
Global Marketing
• Master of Business
Administration
• Number of Shares 34,359
Päivi Antola (b. 1971)
• Corporate Communications
and Investor Relations
• Master of Arts, CEFA
• Number of Shares 1,264
Anna Hyvönen (b. 1968)
• North America, Nordics
and Vianor
• Licentiate of Science
(Technology)
• Number of Shares 14,715
Adrian Kaczmarczyk (b. 1971)
• Supply Operations
• Dipl. Ing. Engineering, Master
of Business Administration
• Number of Shares 0
Teemu Kangas-Kärki (b. 1966)
• CFO
• Master of Science (Economics
and Business Administration)
• Number of Shares 7,014
Jukka Kasi (b. 1966)
• Products and Innovations
• Master of Science (Technology)
• Number of Shares 4,420
Bahri Kurter (b. 1966)
• Central Europe
• Master of Arts (Economics)
• Number of Shares 0
Päivi Leskinen (b. 1965)
• Human Resources
• Master of Social Sciences
• Number of Shares 0
Manu Salmi (b. 1975)
• Heavy Tyres and Nokia factory
• Master of Military Sciences,
Master of Science
(Economics), Master of
Business Administration
• Number of Shares 16,601
III Descriptions of mechanisms
of internal control and
risk management
Internal control
The purpose of the Group’s internal
control mechanisms is to ensure that the
Company’s operation is in line with the
applicable laws and regulations and the
Company’s Code of Conduct. As regards
the nancial reporting process, the
purpose of the Group’s internal control
mechanisms is to ensure that the nan-
cial reports released by the Company
have been compiled in accordance with
the accounting principles applied by
the Company and that they contain
essentially correct information on the
Group’s nancial position, and to ensure
that nancial reporting is accurate and
reliable. The Group has dened group-
level policies and instructions for the key
operative units specied below in order to
ensure eicient and protable Company
operations.
The Group’s business consists of
Passenger Car Tyres, Heavy Tyres, and
Vianor business units. Passenger Car
Tyres is further divided into the following
business areas: Nordics, Other Europe,
North America, Russia and Asia. Heavy
Tyres and Passenger Car Tyres business
units are responsible for their own
operations, nancial results, risk manage-
ment, balance sheet and investments,
supported by dierent functions. The
Group’s sales companies serve as product
distribution channels in local markets.
Subsidiaries are responsible for their
daily operations and administration. They
report to the director responsible for
the said business area, while the Vianor
chain reports to the director of the Vianor
business unit.
The Board of Directors is responsible
for the functionality of the internal
control mechanisms, which are managed
by the Company’s management and
implemented throughout the organiza-
tion. Internal control is an integral part of
all activities of the Group at all levels. The
Company’s operative management bears
the main responsibility for operational
control. Every supervisor is obliged
to ensure suicient control over the
activities belonging to his or her respon-
sibility and to continuously monitor the
functionality of the control mechanisms.
The Chief Financial Oicer is responsible
for organizing nancial administration
and reporting processes and the internal
control thereof. The parent company’s
Finance function is responsible for
internal and external accounting; its tasks
include, among others, producing nan-
cial information concerning the dierent
areas and ensuring the accuracy of this
information.
The preparation process of the
consolidated nancial statements (IFRS),
the related control measures, and the
task descriptions and areas of responsi-
bility related to the reporting process are
dened. The Company’s Finance function
produces the consolidations and informa-
tion for the Group level and the dierent
areas. Each legal entity within the Group
produces its own information in compli-
ance with the instructions provided and
in line with local legislation. The Group’s
Finance function is centrally responsible
for the interpretation and application
of nancial reporting standards as well
as for monitoring compliance with these
standards.
Eective internal control requires
suicient, timely, and reliable information
in order for the Company’s management
to be able to monitor the achievement of
targets and the eiciency of the control
mechanisms. This refers to nancial
information as well as other kinds of
information received through IT systems
and other internal and external channels.
The instructions on nancial adminis-
tration and other matters are shared
on the Company’s intranet, and training
is organized for personnel with regard
to these instructions when necessary.
Communication with the business units
is continuous. The Company’s nancial
performance is internally monitored by
means of monthly reporting comple-
mented with updated forecasts. The
nancial results are communicated to
Company personnel immediately after
the stock exchange releases have been
published.
Investor communications
The goal of Nokian Tyres’ investor
relations is to regularly and consistently
provide the stock market with essential,
correct, suicient, and up-to-date
information that is subsequently used to
determine the share value. The opera-
tions are based on equality, openness,
and accuracy.
Risk management
The Group has adopted a risk
management policy, approved by the
Board of Directors, which supports the
achievement of strategic goals and
ensures continuity of business. The
Group’s risk management policy focuses
on managing both the risks pertaining
to business opportunities and the
risks aecting the achievement of the
Group’s goals in the changing operating
environment.
The risks are classied as strategic,
operational, nancial and hazard risks.
Strategic risks are related to customer
relationships, competitors’ actions,
political and legislative risks, reputation,
country risks, brand, product develop-
ment, climate change and sustainability
risks and investments. Operational risks
arise as a consequence of shortcomings
or failures in the Company’s internal
processes, actions by its personnel
or systems, contractual risks, risk of
non-compliance, or external events, such
as unforeseen changes in the operating
environment, cyber and information
security, management of the supply
chain, or changes in raw material prices.
Financial risks are related to uctuations
in interest rate and currency markets,
liquidity and renancing, and counter-
party and credit risks. Hazard risks arise
from property loss or business interrup-
tion, shortcomings or failures in employee
safety or environmental management
systems.
The most signicant risks are related
to consumer condence and macro-
economic and geopolitical conditions.
Political uncertainties may cause serious
disruption and additional trade barriers
and aect the Company’s sales and credit
risk. The tire market is evolving to meet
changing consumer needs. Failure to
innovate and develop new products and
services or to adapt to the changes in the
sales channel or new technologies could
have an adverse eect on the nancial
performance. Unexpected production or
delivery breaks at production facilities,
interruptions in logistics or lack of
resources could have a signicant impact
on peak season sales. Tire industry can be
subject to risks caused by climate change,
such as changes in consumer tire prefer-
ences, regulatory changes or impact of
extreme weather events on natural rubber
producers. Nokian Tyres’ risk analysis pays
special attention on corporate social
responsibility risks. Analyses and projects
related to information security and data
protection are continuously a special
focus area.
The risk management process aims
to identify and evaluate the risks, and
to plan and implement the practical
measures and continuous monitoring for
each risk. Among others, such measures
may include avoiding the risk, reducing it
in dierent ways or transferring the risk
through insurance policies or agreements.
Control functions and measures are
verication or back-up procedures
applied to reduce the risks and ensure
the completion of the risk management
measures.
Responsibility for identifying, evalu-
ating and to large extent, managing risks
is delegated to business units, business
areas and functions. Treasury is respon-
sible for developing and maintaining risk
management processes, methods and
tools. Assisted by the Audit Committee,
the Company’s Board of Directors
monitors and assesses the eiciency of
the Company’s risk management mech-
anisms and monitors the assessment
and management of risks related to the
Company’s strategy and operations. The
Audit Committee monitors that the risk
management actions are in line with the
risk management policy. Issues raising in
risk analysis are noted in the development
of processes, compliance and control, and
in Internal Audit planning. The Company’s
Board of Directors discusses the most
signicant risks annually.
IV Other information provided
Internal audit
The Group’s internal audit systematically
carries out assessments and audits
on the eiciency of risk management,
internal control, and corporate gover-
nance processes. Internal audit is an
independent and objective function
whose aim is to help the organization
to achieve its goals. The principles for
internal audit have been conrmed in the
internal audit’s charter approved by the
Board of Directors.
The Group’s Internal Audit function is
managed by the Chief Audit Executive
(CAE), who works under the Board of
Directors. The focus areas for internal
audit are approved by the Board of
Directors each year. The audit assign-
ments are based on the key strategic
focus areas of the Company’s operations
and the risks involved. The operation
of Internal Audit covers all business
activities, functions and processes within
the Nokian Tyres Group. The CAE reports
on their ndings and the agreed further
actions to the Audit Committee, the
Board of Directors, the President and
CEO, the Chief Financial Oicer and
the management of the Company. The
Company’s Board of Directors follows and
monitors the eiciency of the Internal
Audit.
In 2021, Internal Audit focused on
assessing, among other things, the
operations, controls and risks of various
business areas and country organizations,
corporate governance arrangements, risk
management, corporate sustainability
and information security matters as well
as specic misconduct risks and cases
and the management of the COVID-19
pandemic in the Group. The Internal Audit
function at Vianor focuses on guiding the
retail outlets and ensuring conformity to
the Vianor activity management system,
and reports to the CAE and to the
country managers.
Related party transactions
The Company has procedures in place
to identify and dene its related parties
and assesses and monitors related
party transactions to ensure that all
conicts of interest and the Company’s
decision-making process are appro-
priately taken into account. The Audit
Committee monitors and assesses how
agreements and other legal acts between
the Company and its related parties meet
the requirements of ordinary activities
and arm’s length terms in accordance
with applicable laws and regulations. The
Group’s nancial management monitors
and supervises related party transactions
as part of the Company’s normal
reporting and monitoring procedures
and reports to the Audit Committee
on regular basis. The Company only
has related party transactions that
are a part of normal business, and the
information regarding them is provided in
the Financial Review. The decision-making
processes have furthermore been
structured in order to avoid conict of
interests. In case the Company would
have any transactions that are not part
of the Company’s ordinary course of
business or are not implemented under
arm’s length terms, such transactions
shall be handled by the Audit Committee
and approved by the Board and provided
in the Financial Review.
Insider management
The Company complies with the
guidelines for insider trading drawn up
by Nasdaq Helsinki Ltd. Furthermore, the
Company has drawn up separate insider
guidelines that have been approved by
the Board of Directors and that supple-
ment other insider regulations as well
as include instructions on insiders and
insider administration.
Project-specic insider lists are drawn
up of people involved in insider projects
of the Company. Persons with insider
information are not allowed to trade in
the Company’s nancial instruments until
the project has become void or been
published. Those entered into the
project-specic list of insiders are
notied of their entry into the said list
and the duties it entails, as well as the
termination of the insider project.
The Company maintains a separate
list of people in managerial positions
and their related persons. In 2021, the
persons holding executive positions in the
Company, as dened in the Market Abuse
Regulation, were the members of the
Board of Directors, the President and CEO
and the Chief Financial Oicer.
Persons holding managerial positions
within the Company are allowed to trade
in the Company’s nancial instruments
only for 30 days after the publication day
of the Company’s nancial statement
report, half year report, or interim report.
The same applies also to the members
of the Group’s Management Team and
persons who participate in the prepa-
ration, maintaining, and/or publication
of the Company’s nancial reports.
The prohibition on trading mentioned
hereinabove also applies to persons
who process the nancial reporting and
forecasts of the Nokian Tyres Group.
The Group General Counsel for Nokian
Tyres is responsible for the overall
management of insider matters in the
Company and the related communication
(limitations on trade, obligations to
announce and publish management
transactions). The Group General Counsel
checks the information for the persons
holding executive positions and their
related persons at least once per year.
The Chief Financial Oicer is the Group
General Counsel’s substitute for insider
matters.
Whistleblowing
The Company has dened processes
that internal and external parties
can use to notify of any suspected
violations of the Company’s insider
trading guidelines or other instructions,
or of any other malpractices. External
parties can use the email address
whistleblow@nokiantyres.com, among
others. All whistleblowing notications are
investigated promptly in a condential
manner and protecting the identity of the
whistleblower as far as possible.
Audit
The auditor has an important role as
a controlling body appointed by the
shareholders. The audits give share-
holders an independent opinion on how
the nancial statements and report by
the Board of Directors of the Company
have been drawn up and the accounting
and administration of the Company have
been managed. The auditor elected
at the Annual General Meeting of 2021
is Ernst & Young Oy, authorized public
accountants, with Mikko Järventausta,
Authorized Public Accountant, acting as
the Chief Auditor. The auditor’s term of
oice lasts until the end of the following
Annual General Meeting. In addition to
his duties under the valid regulations, he
reports all audit ndings to the Group’s
management.
The Group’s audit fees in 2021
amounted to EUR 659,804 (2020:
602,486). The fees paid to the authorized
public accountants for other services
totaled EUR 94,282 (2020: 222,158).
Sustainability
In September 2021, Nokian Tyres
introduced new, ambitious non-nancial
targets. Non-nancial targets focus on
bringing new environmental and safety
innovations to products, reducing CO
2
emissions in line with the Science Based
Targets, further improving workplace
safety, and monitoring the sustainability
of suppliers. Nokian Tyres will, for
example:
• Increase the share of either
recycled or renewable raw mate-
rials in tires to 50% by 2030
• Reduce CO
2
emissions from
both raw materials and tires by
25% between 2018–2030
• Decrease accident frequency
(LTIF) yearly by 20%
• Sustainability audit 100% of critical
active suppliers by 2025.
All non-nancial targets can be
found at www.nokiantyres.com/
company/sustainability/fundamentals/
our-targets-and-achievements/.
The Company’s sustainability activities
are led by a member in the Group’s
Management Team. The Group’s
Sustainability Steering Group supervises
and monitors the sustainability work
within the Group and comprises of
senior representatives from Supply
Chain, Products & Innovations, Finance,
Human Resources and Communications.
The duties of all supervisors include
day-to-day leadership of sustainability.
Targets, milestones, development items,
and other key topics are discussed by the
Management Team at least twice a year,
and at least once a year by the Board of
Directors.
In 2021, a new steering group was
formed focusing on actions and situation
on greenhouse gas (GHG) emission reduc-
tion. Steering group includes members
from the Group Management Team,
functional management and directors of
the factories in Finland, Russia and the US.
Sustainability working group comprises
nance, purchasing, communication,
environment, quality, consumer,
customer service, and HR experts. The
working group’s main task is to design
and promote measures for improving
sustainability. Each unit’s management
team is responsible for implementing the
measures according to their unit strategy.
Safety Management working group,
which comprises safety experts and
management representatives, works on
and tracks the safety aspects.
Environmental working group
comprises local environmental repre-
sentatives from factory locations, who
manage compliance with environmental
legislation and chemical safety.
Energy Eiciency working group
promotes the means for improving
energy eiciency and focus in particular
on improvement actions in all tire
factories.
Sustainable Purchasing working group
develops and guides the supply chain
sustainability.
Product Development creates safer
and eco-friendlier products by reducing
rolling resistance, for example.
HR, Communication, and Risk
Management support the work for
improving the safety culture and imple-
menting changes in the Nokian Tyres
Group.
Safety and health are an integrated
part of department and team meeting
practices. Globally safety and health
related KPI’s and actions are followed
by the Global Safety team and HR.
Environmental representatives and other
local working groups focus on improving
the everyday sustainability work. Each
Nokian Tyres’ employee is responsible for
working and acting ethically.
Environmental management
Environmental management is guided
by the Code of Conduct approved
by the Board of Directors as well as
Environmental, Safety and Quality Policy
approved by the President and CEO.
The activity management system
at the Nokian Tyres Group is based on
the ISO 9001, IATF 16949, ISO 14001,
ISO 45001, and ISO 17025 standards
and meets applicable regulations and
customer demands. The Company is
also committed to follow the UN Global
Compact principles.
The goal of Nokian Tyres is to manage
the environmental impacts of its
products over their entire life cycle and
address the safety and quality aspects
of the Company’s operations in a
comprehensive and systematic manner.
The activity management system that
covers the environmental aspects, safety,
and quality serves as a key tool for this
purpose. The Company’s operations
manual is ISO 14001 compliant in terms
of the environmental aspects and
ISO 9001 compliant as regards quality.
Environmental Protection procedure
guides environmental protection eorts.
Environmental targets are specied
in the Company’s sustainability strategy,
which is drawn up for a period of ve
years and updated annually. Vice
President, Quality & Sustainability is
involved in drawing up the strategy along
with the Environmental and Responsibility
Manager, who reports to the Vice
President. Working together with environ-
mental experts in Finland, US and Russia,
the Environmental and Responsibility
Manager prepares an annual environ-
mental program for the factories. The
program species the detailed targets,
actions, schedules and responsible
persons for the goals presented in the
strategy. In addition, individual units have
their own projects for developing the
operations and processes.
The development of environmental
aspects is reviewed at the meetings of
the Group Management Team.
Sustainability eorts at the Nokian
Tyres Group are coordinated by the
Environmental and Responsibility
Manager. Environmental and chemical
safety and sustainability aspects belong
to the Quality and Sustainability unit,
and the overall eorts are coordinated
globally by Vice President, Quality &
Sustainability together with Senior Vice
President, Supply Operations.
The goals of quality and sustainability
management are accident prevention,
uninterrupted production, ensuring high
quality and good corporate citizenship in
all areas of operation.
Environmental experts in Finland, US
and Russia take care of practical envi-
ronmental coordination and training, for
instance regarding chemicals, emissions,
and waste.
Complaint mechanisms in
environmental responsibility
Nokian Tyres documents the annual
environmental impacts of its tire factories,
reports them to the local authorities
as required in each country, records
feedback to company’s own register
(KETO) and takes necessary corrective
actions.
Nokian Tyres factories’ environmental
experts in Finland, US and Russia are
responsible for these records. The
purpose of this practice is to collect the
feedback on the status of Nokian Tyres
environmental aspects and consider
stakeholders’ related requests and
opinions.
Nokian Tyres has a two-tiered
approach to the management of envi-
ronmental complaint procedures. If the
complaint is minor in the scope of Nokian
Tyres’ production, an environmental
expert handles it independently and/or
the manager decides on the necessary
course of action.
In case of a larger event, the decision
to escalate the matter is taken in Nokia,
Finland, by Vice President, Quality &
Sustainability, in Vsevolozhsk, Russia, by
the Production Director and in Dayton,
US, by the Plant Manager and then, if
necessary, by the line management.
MANAGING SUSTAINABILITY AT NOKIAN TYRES
STRATEGY, TARGETS AND FOLLOW-UP
BOARD OF DIRECTORS
GROUP’S MANAGEMENT TEAM
SUSTAINABILITY STEERING GROUP* GHG STEERING GROUP
ACTION PLANS AND DAY-TO-DAY LEADERSHIP OF SUSTAINABILITY
VP, SUSTAINABILITY & QUALITY
Sustainability
working group
Safety
management
working group
Environ mental
working group
Energy
eiciency
working group
Sustainable
purchasing
working group
ALL UNITS AND SUPERVISORS
PERSONNEL
*Operating from January 2022
NON-FINANCIAL INFORMATION
STATEMENT 2021
NON-FINANCIAL INFORMATION
STATEMENT 2021
Remuneration report 2021
Nokian Tyres develops and manufactures
premium tires for consumers and
customers who value safety, sustainability,
and innovative products. Sustainability
is at the core of Nokian Tyres’ business
and one of the ve cornerstones of the
company’s strategy.
Nokian Tyres is a supporting member
of the United Nations Global Compact
(UNGC) initiative and is committed to the
Sustainable Development Goals (SDG’s)
set by the UN.
MANAGING NON-FINANCIAL
MATTERS AT NOKIAN TYRES
The company’s sustainability activities
are led by SVP, Supply Operations, who is
a member of the Group’s Management
Team. The Group’s Sustainability Steering
Group supervises and monitors the
sustainability work within the Group
and comprises of senior representa-
tives from Supply Chain, Products &
Innovations, Finance, Human Resources
and Communications. The Group’s
Greenhouse Gas (GHG) Steering Group
supervises and monitors the progress
in reducing greenhouse gas emissions
within the Group. The duties of all
supervisors include day-to-day leadership
of sustainability.
Targets, milestones, development
items, and other key topics are discussed
by the Management Team at least twice
a year, and at least once a year by the
Board of Directors. The VP, Quality &
Sustainability, shares knowledge and
updates to the Board of Directors about
the Company’s impacts.
Nokian Tyres’ business is guided by
the ethical principles presented in the
Board-approved Code of Conduct. The
document species the principles for
Nokian Tyres’ business, including instruc-
tions for various matters related to ethics
and the anti-bribery guidelines. Nokian
Tyres does not condone any form of
bribery within the company’s operations.
When reporting a suspected misuse
or violation, an employee is advised to
contact either his/her supervisor, Internal
Audit, Legal & Compliance, or the HR unit.
Misconducts can also be reported by
sending an email to whistleblow@noki-
antyres.com or via regular mail. Internal
auditor reports suspected misuses and
violations to the Board’s Audit Committee.
The company requires that all its
Sustainability Critical suppliers adhere to
Nokian Tyres’ Supplier Code of Conduct.
All raw material suppliers must, at a
minimum, have an ISO 9001 certied
quality management system in place.
Nokian Tyres prefers suppliers with an ISO
14001 certied environmental manage-
ment system.
The risk management policy adopted
by Nokian Tyres’ Board of Directors
supports achieving the company’s
strategic goals and ensuring business
continuity. Read more about the compa-
ny’s risk management in the section
Signicant Risks and Uncertainties and in
the Corporate Governance Statement.
NEW MATERIAL TOPICS
DEFINED IN 2021
Through continued focus on sustain-
ability at Nokian Tyres, the company is
committed to minimizing its negative
impacts and maximizing its positive
impacts on the economy, environment,
and people. An essential part of driving
this positive change is understanding
how Nokian Tyres’ stakeholders view
sustainability and what sustainability
topics are relevant for society and our
business. This is done by conducting
materiality assessments every three
years. The assessments form a basis for
sustainability at Nokian Tyres.
The VP, Quality & Sustainability,
presents the data from the material
assessment to the Group Management
Team and to the Board. The Board
reviews and approves the Non-Financial
MANAGING SUSTAINABILITY AT NOKIAN TYRES
STRATEGY, TARGETS AND FOLLOW-UP
BOARD OF DIRECTORS
GROUP’S MANAGEMENT TEAM
SUSTAINABILITY STEERING GROUP* GHG STEERING GROUP
ACTION PLANS AND DAY-TO-DAY LEADERSHIP OF SUSTAINABILITY
VP, SUSTAINABILITY & QUALITY
Sustainability
working group
Safety
management
working group
Environ mental
working group
Energy
eiciency
working group
Sustainable
purchasing
working group
ALL UNITS AND SUPERVISORS
PERSONNEL
*Operating from January 2022
Information Statement, the topics
of which are based on the material
assessment.
The company conducted a new
materiality assessment in 2021. As a
result, the following sustainability topics
were considered material to Nokian Tyres’
operations:
1. Sustainable raw materials
2. Actions to mitigate climate change
3. Safety and well-being at Nokian Tyres
4. Promoting human rights in
all operations
5. Traic safety of tires
NEW SUSTAINABILITY
TARGETS FINALIZED IN 2021
In 2021, Nokian Tyres nalized its new
sustainability targets. They are presented
on the company’s website Sustainability
Goals and Achievements /Nokian Tyres.
The chart on the next page describes ve
of the targets, with respective KPIs and
results for 2021.
AREAS OF SUSTAINABILITY
PRODUCTS / R&D PEOPLE ECONOMY ENVIRONMENT PROCUREMENT
We develop and
manufacture ecofriendly,
safe and high-quality
tires that reach their
destination safely
even under demanding
conditions.
We are committed to
acting in the manner
required by the UN’s
Guiding Principles for
Business and Human
Rights as well as OECD’s
Guiding Principles on
Labour and Human
Rights, and to following
the International
Labour Organization’s
(ILO) Declaration on
Fundamental Principles
and Rights at Work. We
respect human rights
and treat all individuals
equally.
Through protable
growth, we enable the
further development
of our operations and
ensure nancial security,
work and well-being for
our stakeholders.
We are committed to
acting in a way that
does not harm the
environment or people.
We are committed to
sustainable procurement
and further developing
sustainability in our
supply chain.
ESSENTIAL STANDARDS, GROUP POLICIES AND PROCEDURES RELATED TO SUSTAINABILITY
Tire/vehicle safety
regulations (UN tire
regulations), various
tire labelling (consumer
information) regulations
and standards (EU Tyre
Labeling regulation),
chemical regulation,
Nokian Tyres tire
testing policy, UN Global
Compact.
Policies and procedures
related to safety,
well-being, hiring,
induction, people
reviews and competence
development, human
rights and equality. ISO
45001, Travel Policy, UN
Global Compact.
Stock exchange
rules, IFRS, Corporate
Governance, risk
management, Know Your
Counterparty, Tax Policy,
UN Global Compact.
ISO 14001, Environmental
Management, Chemical
Safety Management,
Responsible Care
program, Science Based
Targets,
UN Global Compact.
Procurement policy,
Supplier Code of
Conduct, Sustainable
Natural Rubber Policy,
ISO 9001, ISO 14001,
UN Global Compact.
LOCAL GUIDELINES AND PROCEDURES
GUIDING PRINCIPLES FOR NOKIAN TYRES’ SUSTAINABILITY
Sustainability is a part of our company’s culture, strategy and goals. The management of sustainability is based on our values: we
care, drive innovation and deliver high results together. Our Sustainability Management is guided by Nokian Tyres Code of Conduct,
Whistleblowing, Know Your Counterparty Guidelines, and policies such as Environment, Safety and Quality Policy, Group Treasury
Policy, Group Credit Policy, Tax Policy, Risk Management Policy, Procurement Policy, Sustainable Natural Rubber Policy, Disclosure
Policy, Information Security Policy, and Data Protection Policy.
€
NOKIAN TYRES AS A
PART OF SOCIETY
IMPACTS:
Through sustainable business
practices and nancial success, Nokian
Tyres oers security, work, and well-being
for its personnel and contributes to the
well-being of local communities.
Nokian Tyres’ objective is to create value
for its various stakeholders, such as
consumers, customers, personnel, and
shareholders. Nokian Tyres wants to be
a good corporate citizen wherever it
operates.
Nokian Tyres’ approach to philanthropy
mirrors its mission, entrepreneurial and
inventive company culture, and sustain-
able way of doing business. The company
does not support any governmental,
political, or religious entities. The
company oers resources to projects
based on the Nokian Tyres’ Sponsoring
and Philanthropy Policy, which will be
updated in 2022.
In 2021, Nokian Tyres continued to
support the traic safety education for
local school children in Nokia, Finland,
and donated books for safety education.
Vianor supported Save the Children, an
international advocate of children’s rights.
In the US, the company has donations
committees in Dayton, Nashville,
and Colchester. In 2021, the Dayton
committee gave two college scholarships
to high school graduates in order to
support educational eorts. In partner-
ship with Powdr Ski Resort, the company
also supported One-Tree-Planted, a
non-prot organization, and planted 50k
trees.
In Russia, Nokian Tyres donated tires
to ambulances in the Moscow and St.
Petersburg regions to help hospitals cope
with the ongoing pandemic. The company
continued Eco Challenge, a campaign for
emptying illegal tire landlls.
To support communities in the ght
against the spread of the pandemic, the
company has organized onsite vaccina-
tion clinics in all its factory locations.
CLIMATE AND THE
ENVIRONMENT
IMPACTS:
Actions to mitigate climate
change and reduce emissions, ensuring
environmental and chemical safety
Environmental and chemical safety
and the coordination of sustainability
are the responsibility of the Quality and
Sustainability department. The company
promotes environmental and chemical
safety through risk management, contin-
uous improvement of processes, and new
investments. When developing activities,
the company applies best practices and
advanced solutions while taking into
account human factors and nancial
impacts.
The factories in Finland, Russia and the
US, as well as the Swedish sales company
Nokian Däck AB are certied pursuant to
the international ISO 14001 environmental
management system standard and the
ISO 9001 quality system standard. The
company has held IATF 16949 approval for
the automotive industry since 2013.
The company has dened its
climate-related risks and opportunities
according to the recommendations of
Task Force on Climate-Related Financial
Disclosures (TCFD). In 2021, the risks and
opportunities were reassessed.
Area Target KPI Progress in 2021
Safe and eco-friendly tires:
increasing the share of
sustainable materials in tires
Increase the share of recycled or
renewable raw materials in tires
to 50% by 2030
Report annual share of
sustainable raw materials in
selected tires
1)
Status in 2021: 25%
Climate: reducing CO
2
emissions
in line with our four Science
Based Targets
Reducing CO
2
emissions from tire
production (scope 1+2) by more
than 50% by 2030, base year
2015
Report annual improvement Figures available in the Company
Sustainability Report in Spring
2022
Safety: securing safer and better
work
Accident frequency LTIF: Decrease
from 8.3 (2018) to 1.5 by 2025
20% annual improvement in LTIF
compared to the previous year
Negative development. LTIF
increased from 3.7 to 4.1
Human rights: auditing all
signicant high-risk suppliers
100% of signicant high-risk
suppliers audited by 2025
Annual increase in the share of
audited high-risk suppliers
Status in 2021: 65% audited
Personnel well-being: developing
human rights policies
Developing human rights policies Report annual improvement
in sentiments about equal
opportunities in the personnel
survey, base year 2021
Status in 2021: score on equality
was 66 on a scale of 0–100
2)
1)
Scope: Tires in the EU Tyre labeling classication for rolling resistance in A or B class and with ice grip marking
2)
Figure does not include Vianor, total results will be conrmed in February
Climate-related risks
RISK GROUP SUBCATEGORY
EXAMPLES OF
CONCRETE RISKS
Regulatory Emerging regulation Deforestation-related regulation,
mostly concerning natural rubber.
Green regulation on aviation and
maritime fuels can signicantly
increase costs of logistics.
Further green labeling Additional taxes and duties e.g.
EU’s CBAM for fossil raw materials
can increase prices.
Stricter expectations to oversight
Physical Extreme weather events Disruptions in logistics.
Extreme temperatures Contamination of raw materials.
Technological Climate-related demands for new
tire technology
A+ rolling resistance tires required
for EVs.
150 km/h max speed for EU –
demand for UHP (Ultra High
Performance) tires fall.
Materials technology Requirements for non-renewable
material replacements.
Market and
reputation
Market changes Shift from car ownership to
mobility-as-a-service i.e. changing
customer base.
Green energy prices will go up due
to strong demand.
Availability of renewable and
recycled raw materials can limit
plans for sustainability.
Increased demand for year-round
tires and less winter tires.
Reputational risk Deforestation scandals (natural
rubber).
Climate-related opportunities
OPPORTUNITY
GROUP SUBCATEGORY
EXAMPLES OF CONCRETE
OPPORTUNITIES
Innovation Raw materials Innovations with renewable
materials.
Recycling Recycling system of tires still
missing in many countries,
Scandinavian system can be used
as an example.
Climate-friendly technology Lower rolling resistance.
Energy-eicient production Modern machinery used in Nokian
Tyres’ factories.
Product range Competitive advantage Nokian Tyres designs and
manufactures tires for challenging
conditions. Typically, electric
vehicles have larger and more
expensive tires. Ensuring good
oering in this product segment.
EU further labeling for sustainable
tires
Existing focus on sustainable
natural rubber and developing wear
resistance.
Industrial (heavy) tires We have existing expertise to
provide climate-friendly solutions.
Engagement Consumers
Policy makers Increased preparedness for new
regulations or incentives.
Shareholders/stakeholders
Regulatory Renewable Energy Directive More renewable energy available in
EU, prices can decrease.
Green legislation Global carbon tax or similar would
improve NT’s competitive position.
In 2020, the company was the rst
in tire industry to receive approval for
its targets for reducing greenhouse
gas emissions from the Science-Based
Targets initiative. The work to reduce the
GHG emissions is followed and supported
by the Nokian Tyres Greenhouse Gas
Reduction Steering Group, which started
operating at the beginning of 2021. The
GHG Steering Group convenes four times
a year.
The company is a shareholder in
Suomen Rengaskierrätys Oy, which
centrally manages the collection and
reuse of used tires in Finland. In Finland,
nearly 100% of decommissioned tires are
recycled, and in Europe, the degree of
recycling is approximately 95%. Together
with some other major tire manufacturers,
Nokian Tyres has established the Eco
Tire Association in Russia. In 2021, Nokian
Tyres continued to empty illegal tire
landlls in Russia in the “Eco Challenge”
together with the EcoShinSoyuz
(EcoTyresUnion). With the project, Nokian
Tyres wants to increase public awareness
of tire disposal as the recycling rate in
Russia is still low.
Unfortunately, the VOC emissions
(volatile organic compounds, or solvents)
of the Nokian Tyres’ factory in Finland
are still above the maximum allowed level.
Evaluation of further measures to solve
the problem has been started. In Finland,
Nokian Tyres received one environmental
complaint in 2021 concerning noise at
the Finnish factory. The company was
also contacted concerning odor and
noise emissions from local residents in
Sastamala, Finland, where our retreading
unit is located. The complaints were
investigated, and actions implemented.
The company received no environmental
complaints from the US or Russia.
In 2021, Nokian Tyres received one
environmental ne for instances of
non-compliance with laws and regulations
at the US factory. Due to the lack of
regular pressure monitoring in mixing
department for three months the
company was ned 3,000 USD.
Special attention has been paid to
improvements in energy eiciency, as well
as chemical safety and sustainability work
across dierent elds of business.
At the production facilities, emphasis
remained on reusing waste. In 2021,
100% of factory waste in Finland and
Russia, and 99.5% in the US was sent to
reutilization.
Utilization degree of waste
2019 2020 2021
Finnish factory % % %
Russian factory % % %
US factory –* % .%
* US factory started operating in 2020.
EU Taxonomy
The EU’s new Taxonomy Regulation is
designed to support the transformation
of the EU economy to meet its European
Green Deal objectives, including the 2050
climate-neutrality target. At the core of
the Taxonomy Regulation is the denition
of a sustainable economic activity. This
denition is based on two criteria. An
activity must:
• Contribute to at least one of six
environmental objectives listed in the
Taxonomy; and
KPI Total (EUR million)
Proportion of
Taxonomy eligible
economic activities
Proportion
of Taxonomy
non-eligible
economic activities
Net sales 1,714 35% 65%
Capital expenditure 120 26% 74%
Operating expenditure 40 31% 69%
• Do no signicant harm to any of the
other objectives, while respecting basic
human rights and labor standards.
The new Taxonomy regulation has now
entered partly in force. It classies
economic activities, which can be poten-
tially aligned with EU’s environmental
targets. There are six environmental
targets in the EU Taxonomy, two of
which are now regulated: Climate
Change Mitigation and Climate Change
Adaptation.
Tire industry is included in the
economic activity group Manufacture of
other low carbon technologies in the EU
Taxonomy’s technical screening criteria.
After investigating and consulting on EU
Taxonomy’s technical screening criteria,
following conclusions about Nokian Tyres’
economic activities have been made:
• Car and van tires with low rolling
resistance ratings which are manufac-
tured by Nokian Tyres have substantially
lower life-cycle carbon footprint than
corresponding average tires. This is
a combined result of low use phase
emissions and industry’s best-in-class
manufacturing emissions.
• At this stage, we will exclude all heavy
professional tires as there is no solid
comparison data available of use phase
CO
2
emissions for heavy professional
tires.
Manufacture of car and van tires with
low life-cycle greenhouse gas emissions
represented 35% of Nokian Tyres’
total net sales in 2021. Based on our
assessment, these economic activities
are eligible for the EU Taxonomy criteria.
Share of Opex within the scope of EU
Taxonomy was 31% and share of Capex
within the scope of EU Taxonomy was
26%.
It has to be noted that the Taxonomy
reporting scope and criteria may change
in coming years as this is the rst
reporting round, and therefore also the
gures may not be comparable between
the reporting periods.
Nokian Tyres’ approach to calculate
the eligibility for the EU Taxonomy
Net sales
• A: Amount of eligible net sales
coming from car and van tires
having EU Tyre labeling grade A,
B or C in rolling resistance.
• Heavy tires will be excluded as there
is no solid data (or public benchmark)
available for use phase CO
2
emissions.
• B: Total amount of net sales
• C: Share of net sales within
the scope of EU Taxonomy
• C = A/B %
Capex & Opex
• D: Eligible passenger car tires
production companies’ Opex:
Research and Development and
real estate expenses deducted by
depreciation & amortization
• E: Group Opex: Research and
Development and real estate
expenses deducted by depre-
ciation & amortization
• F: Share of Opex within the
scope of EU Taxonomy
• F = C*D/E %
• Justication: represents share
of Opex used for producing low
rolling resistance car and van
tires with reasonable accuracy.
• G: Eligible passenger car tires
production companies’ tangible Capex
• H: Group Capex including tangible
and intangible investments
• I: Share of Capex within the
scope of EU Taxonomy
• I = C*G/H %
• Justication: represents share of
Capex used for production readiness
for low rolling resistance car and van
tires with reasonable accuracy.
• Remark: handpicking and assessing
each investment’s relation to EU
Taxonomy separately is regarded not
to give much additional accuracy.
PEOPLE
IMPACTS:
Safety and well-being of
personnel
The company’s principles in all operations
are fair treatment and respect of human
rights when collaborating with its
personnel or other stakeholders. This
principle of equality and non-discrimina-
tion is an essential part of the company’s
operations, and the management of
diversity is based on the concept of
equality and equal prerequisites for work.
People Review discussions with all
employees focus on managing perfor-
mance and employee´s personal devel-
opment. Internal job rotation, on-the-job
learning, and other learning solutions
have a key role in supporting personnel
development. In 2021, a total of 96.3%
of Nokian Tyres’ personnel took part in a
People Review (93.0% in 2020).
In 2021, Nokian Tyres conducted a
personnel survey Drive! to measure
well-being, equality, inclusion and
engagement inside the organization.
In the company wide survey, 89% of
employees gave positive or neutral
responses to a question about the
overall feeling at the moment (86% in
a pulse survey conducted in 2020). To
a question concerning equality, we
received a score of 66 on a scale of
0-100 (Vianor not included as their survey
results are available in February), which
is 6 points below the global benchmark.
After assessing the results of the survey,
improving equality was made a priority
in our sustainability work and our aim is
to continuously improve the score. This
equality KPI is being followed annually.
Nokian Tyres’ commitment and
ongoing eorts related to data
protection continued throughout the
year. In particular, Nokian Tyres Data
Protection Policy was updated, and
the Data Protection eLearning content
renewed. The renewed eLearning course
will be made available for all Nokian Tyres
employees during 2022.
Safety work continues
Nokian Tyres’ goal is to promote occupa-
tional health and minimize the number
of occupational accidents. Occupational
health and safety are an integral part of
the company’s daily management and
operations.
Safety is Nokian Tyres’ rst priority,
both on the road and in production.
The company’s goal for 2021 was to
reduce the number of workplace injuries
by 20% compared to the previous
year. Unfortunately, this goal was not met,
and the group wide accident rate (LTIF)
increased by 11% to 4.1 (3.7 in 2020). At
the same time, the Nokian Heavy Tyres
celebrated two years without accidents
leading to absences in January 2022.
Work to improve safety continues by mini-
mizing the possibilities for human errors.
Lost-time injury frequency (LTIF)
2017 2018 2019 2020 2021
. . . . .
PRODUCTS
IMPACTS:
Continuous improvement of
traic safety of tires and the sustain-
ability of raw materials in tires
Nokian Tyres’ R&D is constantly devel-
oping new ways of replacing fossil-based
raw materials with recycled or renewable
materials to enable more sustainable
tire manufacturing. In January 2022,
the company published a concept tire
that was made 93% of either recycled
or renewable raw materials. Nokian Tyres
aims to increase the share of recycled or
renewable raw materials in its tires to 50%
by 2030.
Rolling resistance
Carbon dioxide, CO
2
, is the most signi-
cant greenhouse gas generated by traic.
The higher the rolling resistance of a
tire is, the higher the fuel consumption
and CO
2
emissions will be. By 2020,
the company had reduced the rolling
resistance of its product range by 8.5% in
average compared to the 2013 baseline
and exceeded the target set for 2020.
This reduction target is no longer followed
as the company set new sustainability
targets for 2025.
In 2021, Nokian Tyres set a new goal
for developing the rolling resistance of its
tires: By 2025, the company aims to have
at least 60 tires in the best rolling resis-
tance A class of EU Tyre labeling system.
In 2022, the company aims to add 10 new
tires to the best rolling resistance A class
in EU Tyre labeling.
Nokian Tyres products in the
rolling resistance A class *
Status in
2021
Goal for
2022
Goal for
2025
14 24 60
* Tires included in the EU Tyre labeling
Developing wet grip and ice grip
Nokian Tyres participates actively in
developing the EU Tyre labeling test
method standards, such as wet grip
and ice grip. Wet grip is a critical safety
feature of a tire as it relates to how
quickly a tire can stop on wet roads. The
EU Tyre labeling rates the wet grip of tires
from A to E: A being the shortest braking
distances in the wet, E being the longest
braking distance.
Wet grip is one of Nokian Tyres’ R&D’s
continuous development targets. This is
aligned with one of our material topics:
traic safety of tires. Nokian Tyres’
goal for 2025 is to include 100% of the
company’s premium tires in the best wet
grip A or B class in the EU Tyre labeling.
We will report the progress annually.
Percentage of selected tires*
in wet grip class A or B
Status in 2021 Goal for 2025
89% 100%
* Selected scope: Tires in price category A and included
in the EU Tyre labeling, the latest generation. Does not
include Nordic winter tires.
As a Scandinavian tire designer and
manufacturer, the safety of winter tires is
one of our top priorities in traic safety
of tires. As of May 2021, the EU Tyre
labeling includes a new label for snow
grip marking as well as ice grip marking.
A tire that is approved for severe snow
conditions has the snow grip marking, and
a tire that passes the international ice
grip test method has the ice grip marking
on their label. Our new goal for the winter
tire safety performance level is that 100%
of Nordic Hakkapeliitta winter car and
SUV tires fulll the new 2021 EU ice grip
criteria. In 2021, 99.5% fullled the criteria.
SUPPLY CHAIN
IMPACTS:
Sustainable natural rubber
procurement, climate change mitigation
in supply chain
Natural rubber is one of the main
ingredients of tires. Cooperation with
the industry and other stakeholders
is vital in improving the conditions of
the employees working in the natural
rubber industry and the state of the
environment. The tire industry has made
a joint eort to move towards sustainable
natural rubber, including labor rights.
Nokian Tyres is a member of the Global
Platform for Sustainable Natural Rubber
(GPSNR), which is a platform established
by WWF, several other nonprot organiza-
tions, rubber traders and processors, and
large tire manufacturers.
In September 2021, Nokian Tyres
adopted a sustainable natural rubber
policy that is fully aligned with the policy
framework of the GPSNR. The company’s
sustainability in natural rubber is now
developed through the framework of
this policy. In 2021, the sustainability
audits in natural rubber processing plants
continued after being paused due to the
start of the pandemic.
In 2021, the company also updated its
Supplier Code of Conduct. The updated
Supplier Code of Conduct includes
new topics, such as local communities
and surrounding societies, emergency
preparedness and prevention, conict
minerals, fair competition, and traceability.
As part of the Nokian Tyres Science
Based Targets for reducing CO
2
emissions,
a new KPI for the supply chain was
created. During 2022, at least 40 raw
material and 20 transport suppliers are
expected to provide Nokian Tyres with a
CO
2
emission reduction plan. The action is
focused on the biggest emission sources.
SIGNATURES FOR THE NON-FINANCIAL
INFORMATION STATEMENT
Helsinki, 8 February 2022
Jukka Hienonen Pekka Vauramo
Heikki Allonen Raimo Lind
Veronica Lindholm Inka Mero
Christopher Ostrander Jouko Pölönen
George Rietbergen Jukka Moisio
CEO
Remuneration report 2021
REMUNERATION REPORT 2021
REMUNERATION REPORT 2021
Remuneration report 2021
Personnel and
Remuneration Committee
– Chairman’s greeting
Nokian Tyres showed strong performance
during the nancial year 2021. Demand
in the replacement tire market started
recovering quickly in late 2020 and
continued to be strong throughout
2021. At the same time, raw material and
logistics costs increased sharply, and
there was a shortage of containers and
transport capacity. Uncertain outlooks
caused by the COVID-19 pandemic where
still present, although market conditions
improved rapidly. Nokian Tyres was quickly
able to respond to the increased demand
and achieved all time high net sales in
2021.
As stated in our Remuneration Policy,
Nokian Tyres remuneration should always
advance strategy execution, business
objectives and long-term protability
of the Company. Measures were taken
to maintain this commitment in 2021.
The Nokian Tyres Performance Share
Plan, intended for the President and
CEO, Management Team and other key
personnel, was continued for the perfor-
mance period 2021–2023. Performance
will be measured with segments EPS
and segments ROCE, targets that are
closely linked to our revised mid-term
strategy. The Company’s main short-
term incentive plan in 2021 measured
nancial performance with net sales,
segments operating prot and operative
cash ow, all of which delivered good
results during 2021. For the upcoming
nancial year 2022, Nokian Tyres will
launch performance criteria tied to
sustainability targets for the President
and CEO and the Management Team. For
year 2022, achieving greenhouse gas
reduction targets is part of Nokian Tyres’
Management Team incentives.
Nokian Tyres is dedicated to producing
rst-class products for its customers and
value for its shareholders. Nokian Tyres
remuneration will continue to support
these objectives. I am looking forward
to nancial year 2022, the next steps in
our strategy towards EUR 2 billion in net
sales with improved protability, as well
as doing our part in the battle against
climate change.
Sincerely,
Veronica Lindholm
Chairman of the Personnel and
Remuneration Committee of Nokian
Tyres Board of Directors
Nokian Tyres remuneration
should always advance
strategy execution, business
objectives and long-term
protability of the Company.
Introduction
This remuneration report (the
“Remuneration Report”) describes the
implementation of the remuneration
policy (the “Remuneration Policy”) of
Nokian Tyres plc (the “Company” or
“Nokian Tyres”) for the nancial year 2021.
The Remuneration Policy was presented
to and adopted by an advisory resolution
in the 2020 Annual General Meeting and
shall be applied until the 2024 Annual
General Meeting, unless a revised policy is
presented to the general meeting before
that. The Remuneration Policy describes
the remuneration of the Board of
Directors and the President and CEO, and
the considerations of determining the
policy and operation of the policy. This
Remuneration Report will in turn provide
investors with more detailed information
of the development of remuneration and
some strategic KPIs within Nokian Tyres
as well as the implementation of the valid
Remuneration Policy during the nancial
year 2021. The rst new Remuneration
Report for the nancial year 2020,
prepared in accordance with the
Securities Market Association’s Corporate
Governance Code 2020, was presented
to the 2021 Annual General Meeting. The
2021 Annual General Meeting resolved
to adopt the Company’s Remuneration
Report 2020 through an advisory
resolution supported by approximately
88% of the votes cast at the 2021 Annual
General Meeting, indicating approval of
the Remuneration Report 2020 by the
shareholders of the Company.
An index comparison is presented in
the table below and a further breakdown
of the development of the remuneration
of the Board of Directors and President
and CEO of the Company with a
comparison to the development of the
average remuneration of the Company’s
employees and to the Company’s
nancial development over the preceding
5 nancial years is presented below under
the section “
Remuneration and nancial
development between 2017 to 2021
”.
Index of development between years 2017–2021
Remuneration index 2017 2018 2019 2020 2021
Total Board remuneration - Average annual fee paid to Board members
2)
% % % % %
President and CEO salaries and nancial benets % % % % %
Average salary cost per employee
3)
% % % % %
Financial measures index
1)
Operating prot % % % % %
Earnings per share (EPS) % % % % %
Return of capital employed (ROCE) % % % % %
1)
Financial measures used for index according to IFRS reporting. Segments gures in accordance to Nokian Tyres new reporting practices available (2019, 2020 and 2021) in
section “Remuneration and nancial development between 2017 to 2021”. Stock exchange release about Nokian Tyres new reporting practices April 24th, 2020.
2)
Total Board remuneration - Average annual fee paid to Board members calculated by dividing total amount of fees paid to Board members each year, by composition
of Board (number of members) during each year (2017–2020: 8 Board members, 2021: 9 Board members) and excluding fees paid to members leaving during following term.
Further details in section ‘’ Remuneration and nancial development between 2017 and 2021’’.
3)
Average cost per employee calculated based on average number of employees during each nancial year, divided by total amount of salaries, incentives, and other related
employee costs for corresponding nancial year.
Nokian Tyres had very strong performance
during the nancial year 2021, net sales
with comparable currencies increased
by 29.7% and segments operating prot
improved. Segments operating prot
margin for the nancial year 2021 was
19.0%. Due to the challenging conditions
caused by COVID-19 in 2020 and the
ongoing uncertainty caused by the
pandemic, cash ow continued to be in
focus. The Board of Directors therefore
decided to reiterate and incentivize
protection of the Company’s cash
ow. Nokian Tyres operative cash ow
was set as a performance criteria for
all employees eligible for Nokian Tyres
Global Short-term Incentive plan (approx.
1,500 employees). The other Group level
nancial target for all eligible employees
was Nokian Tyres segments operating
prot. The President and CEO Jukka
Moisio’s short-term performance was
measured against these criteria, both with
an equal 50% weight. Both performance
criteria were in alignment with the current
Remuneration Policy and delivered
excellent results. Nokian Tyres showed a
strong recovery during the nancial year
2021, with substantial growth in both sales
and segments operating prot.
In September 2021, Nokian Tyres
announced its revised mid-term strategy.
The mid-term nancial strategy under-
lines the following nancial targets:
Growing faster than the market:
Net sales EUR 2 billion
High returns and protability:
Segments operating prot and segments
ROCE at the level of 20%
Growing ordinary dividend:
Dividend above 50% of net earnings
The revised mid-term strategy is
closely linked with the Nokian Tyres
Remuneration Policy, which states: ‘’The
executive remuneration of the Company
is designed to advance the strategy
execution, business objectives and long-
term protability of the Company. Nokian
Tyres aims to grow faster compared to
the reference market, to have strong
protability and oer good returns to the
shareholders.’’ To support the strategy,
the long-term growth, retention and
motivation, Nokian Tyres has two annually
commencing long-term share-based
plans, under discretion of the Board of
Directors’ decision. The long-term share-
based plans mainly have performance
periods of a minimum of three years.
The Nokian Tyres Performance Share
Plan is measured through the following
Group level nancial KPIs: segments EPS
(Earnings per share) and segments ROCE
(Return on capital employed). The set
KPIs are strongly aligned with long-term
strategical goals and shareholder value
growth. The Nokian Tyres Restricted
Share Plan is designed as a complemen-
tary component to other long-term
incentives and can be used in situations
such as new hires and retentions at the
Board’s discretion. The restricted shares
typically have a vesting period of three
years. Nokian Tyres published a Stock
Exchange Release February 9, 2021,
describing the above mentioned two
shared-based plans commencing during
the nancial year 2021. A stock exchange
release relating to the commencement of
new Performance and Restricted Share
Plans during the nancial year 2022 was
published on February 8th, 2022.
In order to further align the interests
of the President and CEO with the
interests of shareholders regarding the
nancial development of the Company,
the Board of Directors decided to apply
a threshold value for average ROCE over
the vesting period for the President and
CEO and Nokian Tyres Management Team,
for Restricted Share Plans commencing
2019, 2020, 2021 and 2022. During the
nancial year 2021, Nokian Tyres thereby
temporarily deviated from the adopted
Remuneration Policy by applying a
nancial performance criteria to the
restricted share plans oered for the
President and CEO. A further description
of the deviation and clarication of the
circumstances supporting the deviation
are presented below under the section
“
Remuneration of the President and CEO
2021 – Long-term incentive plans
”. Apart
from this deviation, the remuneration of
the Board of Directors and the President
and CEO complied with the Remuneration
Policy and no other deviations where
made.
Remuneration of the
Board of Directors 2021
Nokian Tyres 2021 Annual General
Meeting decided the following annual
fees to be paid to the Board of Directors
serving during the nancial year 2021:
Chairman of the Board:
A fee of EUR 102,500 per year;
Deputy Chairman of the Board and the
Chairman of the Audit Committee:
A fee of EUR 72,500 per year
Other members of the Board:
A fee of EUR 50,000 per year
For each Board and Board Committee
meeting the fee was EUR 700. For Board
members resident in Europe, the fee
for each meeting in Europe outside a
member’s home country is doubled, and
for each meeting outside Europe the fee
was tripled. For Board members resident
outside Europe, the fee for each meeting
outside a member’s home country
was tripled. If a member participated
in a meeting via telephone or video
connection, the remuneration was EUR
700. Travel expenses were compensated
in accordance with the Company’s travel
policy.
Board member Position on the Board
Annual xed fee
(EUR)
1)
Board meeting fees
(EUR)
Committee meeting
fees (EUR) Total fees (EUR)
Shares acquired with
xed annual fee
(number
of shares)
Jukka Hienonen
Chairman of the Board / Member of the Personnel
and Remuneration Committee / Member of the
Shareholders' Nomination Board , , , , ,
Raimo Lind Board member / Chairman of the Audit Committee , , , ,
Pekka Vauramo
Deputy Chairman / Member of the Personnel and
Remuneration Committee , , , ,
Heikki Allonen Board member / Member of the Audit Committee , , , ,
Inka Mero Board member / Member of the Audit Committee , , , ,
Veronica Lindholm
Board member / Chairman of the Personnel and
Remuneration Committee , , , ,
Jouko Pölönen Board member / Member of the Audit Committee , , , ,
George Rietbergen Board member , , – ,
Christopher Ostrander Board member , , – ,
Kari Jordan
Deputy Chairman and Chairman of the
Personnel and Remuneration Committee (until March
, ) – , , –
1)
60% of the annual xed fee paid in cash and 40% in Company shares. Management transaction stock exchange releases regarding the share acquisitions published on May 6th, 2021. The Company paid asset transfer taxes arising
from the acquisition of shares.
Remuneration of the President and CEO 2021
President and CEO
Fixed annual
salary (incl.
holiday
compensation)
Monthly base
salary
Paid salary
during nancial
year 2021
Paid
performance-
based
bonuses (based
on year 2020)
Due
performance-
based
bonuses (based
on year 2021)
1)
Total value of
awarded
share-based
bonus
Supplementary
pension
contribution
Severance
payment
Total fees paid
during nancial
year 2021
Jukka Moisio , , , , , – – – ,,
Note: All amounts presented are in EUR.
1)
Due performance-based bonuses (based on year 2021) will be paid during the nancial year 2022.
Short-term incentive opportunities as of annual base
salary Performance share plan long-term incentives
1)
Target Max Target Max
50% % % %
1)
Nokian Tyres may in addition oer restricted share plans for the President and CEO in situations like new hire and retention, at the Board’s discretion.
As decided by the Board of Directors,
President and CEO Jukka Moisio was
granted a salary increase of 3.0%, eec-
tive from July 1st, 2021. The monthly base
salary during January–June 2021 was
60,000 EUR and after the 3.0% increase,
the monthly base salary between July–
December 2021 was 61,800 EUR.
President and CEO Jukka Moisio has
a Company paid mobile phone benet,
with a value of EUR 20 per month or EUR
240 per annum. Fixed annual salary incl.
holiday compensation is calculated by
multiplying the monthly base salary of
EUR 61,800 by 12.6.
Short-term incentive plans
President and CEO Jukka Moisio is
entitled to short-term incentives as
described in the Remuneration Policy. The
short-term incentive on target amount
is equivalent to 50% of the annual base
salary and the maximum amount is 100%
of the annual base salary. The perfor-
mance period is typically one year, unless
decided otherwise by the Board. The
possible reward is paid out in the rst half
of the year following the performance
period.
By decision of the Board of Directors,
the performance measures of President
and CEO Jukka Moisio’s short-term
incentives 2021 were tied to Nokian Tyres
segments operating prot and Nokian
Tyres operative cash ow. Both measures
were in alignment with the current
Remuneration Policy and had an equal
weight of 50%. The performance period
was the nancial year 2021. The paid
base salary during the nancial year 2021
functioned as the basis for the incentive
payout. The combined achievement for
the set targets for the nancial year is
200% (100% being the target level and
200% maximum) and the short-term
incentive payout to President and CEO
Jukka Moisio is 730,800 EUR. The propor-
tion between xed and variable pay linked
to the nancial year 2021 is 49.2% variable
pay and 50.8% xed pay. The actual
payment of the 2021 short-term incentive
reward will take place during the rst half
of the nancial year 2022.
Long-term incentive plans
The President and CEO’s long-term incen-
tives (LTI) consist of share incentive plans.
The value of the performance-based LTI
payout is capped at the level of 250% of
annual base salary and the annual target
amount is 125% of annual base salary.
The value of paid performance-based LTI
reward cannot exceed 250% of annual
base salary used to dene the allocation
at grant. President and CEO Jukka Moisio
was granted 31,013 performance-based
shares from Nokian Tyres Performance
Share Plan 2021–2023 during the nancial
year 2021. The possible reward will be
paid during the rst half of the nancial
year 2024, in case the targets set by the
Board of Directors are met. The targets
set for Nokian Tyres Performance Share
Plan 2021–2023 are segments Earnings
per share (EPS) and segments Return on
capital employed (ROCE). Both perfor-
mance criteria have an equal weighting of
50%. The potential share rewards will be
paid partly in shares of Nokian Tyres and
partly in cash. Cash portion of the reward
is intended to cover the taxes arising
from the paid reward. President and CEO
Jukka Moisio was not granted restricted
shares during the nancial year 2021.
Nokian Tyres has temporarily deviated
from the adopted Remuneration
Policy during the nancial year 2021.
The deviation against the adopted
Remuneration Policy occurs in the
Long-term incentive (LTI) section, where
the statue of Restricted Share Plans
states; ‘’
For the possible restricted share
plans, there are no nancial performance
criteria, but the share rewards under the
restricted share plan will be delivered to
the President and CEO provided that his
or her service contract with the Company
continues until the delivery date of the
share rewards
.’’. The Board of Directors of
the Company decided to apply a nancial
performance criteria to the three-year
Restricted Share Plans commencing
during the years 2019, 2020, 2021 and
2022, as a result of the appointment of
the new President and CEO in May 2020.
The criterion is applied to the Restricted
Share Plans of the President and CEO and
the Company’s Management Team. The
deviation reinforced the alignment of the
President and CEO’s and the Company’s
Management Team’s remuneration
to the nancial performance of the
Company, promoted eorts ensuring
the long-term interests of the Company,
and further aligned the interests of the
President and CEO and the Company’s
Management Team with those of the
Company’s shareholders. The nancial
performance criterion is measured
against a pre-set average threshold value
for ROCE (a minimum value that must be
achieved in order for the share reward to
be delivered), for the three-year vesting
period of each Restricted Share Plan.
President and CEO Jukka Moisio has not
been granted shares from the Restricted
Share Plan 2021–2023. A threshold value
tied to average ROCE between the
nancial years 2021–2023 will be applied
to any Management Team allocations,
as well as for the Restricted Share plan
commencing in 2022, with a vesting
period between 2022–2024, as described
in the Company’s stock exchange release
published on February 8th, 2022.
The President and CEO is required to
hold at least 25% of the shares received
as rewards from the long-term incentive
programs and to accumulate the shares
from the incentive programs until the
value of the shares received from the
share programs equals the annual gross
base salary of the President and CEO.
Active Long-term incentive plans and shares granted to the President and CEO
Long-term incentive plan and
performance period Gross shares granted Maximum gross share award
1)
Performance criteria Pay-out of possible reward
Restricted share plan
2020–2022
10,000 10,000
Average ROCE 2020–2022
H1/2023
Performance share plan
2021–2023
Achievement of set targets
31,013
100%
62,026
200%
Segments ROCE (50% weight)
& Segments EPS (50% weight)
H1/2024
1)
The potential share rewards will be paid partly in shares of Nokian Tyres plc and partly in cash. Gross shares is the amount of shares earned, based on performance against
set targets and used to calculate the cash proportion. Actual shares delivered= net shares. Cash portion of the reward is intended to cover the taxes arising from the paid
reward.
Pension and information
regarding the termination
of the employment of the
President and CEO
Pension accumulation and retirement age
of the President and CEO is determined
by the practices and terms of the
applicable law in the home country of the
President and CEO. An additional dened
contribution pension plan that corre-
sponds to the relevant local market can
be arranged by the Company. President
and CEO Jukka Moisio does not have a
Company paid supplementary pension
arrangement. The retirement age and the
pension is determined in accordance to
the Employees Pensions Act.
The President and CEO’s period of
notice is 6 months. If the agreement
is terminated by the Company, the
President and CEO is entitled to compen-
sation corresponding to 12 months’ salary
and other benets, in addition to the
notice period’s salary.
Malus and claw back
Based on the terms and conditions of the
incentive plans, if the President and CEO
receives a reward based on the remuner-
ation scheme that subsequently turns
out to be incorrectly paid due to intent
or negligence by the President and CEO,
Nokian Tyres has the right to retroactively
restate the amount and reclaim the
excess part of the rewards paid from the
short- and long-term incentives pursuant
to rules regarding unjust enrichment.
The short- and long-term remunera-
tion schemes are discretionary in nature
and do not form part of the terms and
conditions of the service contract of
the President and CEO, and the Board of
Directors shall decide on the implementa-
tion of the schemes and their terms and
conditions at any time.
Nokian Tyres did not exercise any
malus or claw back rights during the
nancial year 2021.
Remuneration and nancial development between 2017 and 2021
2017 2018 2019 2020 2021
Board remuneration, total pay EUR
Jukka Hienonen
– – – ,
,
Raimo Lind
, , , ,
,
Pekka Vauramo
– , , ,
,
Heikki Allonen
, , , ,
,
Inka Mero
, , , ,
,
Veronica Lindholm
, , , ,
,
Jouko Pölönen
– – – –
,
George Rietbergen
, , , ,
,
Christopher Ostrander
– – – –
,
Kari Jordan
– , , ,
,
Petteri Walldén
, , , ,
–
Tapio Kuula
, – – –
–
Hille Korhonen , – – – –
Total (excl. fees paid to leaving members)
1)
, , , ,
,
Board size, number of members
Average total pay per member
1)
, , , ,
,
Index
% .% .% .%
.%
President and CEO, total pay EUR
Jukka Moisio May 27, 2020–
– – – ,
,,
Hille Korhonen Jun 1, 2017–May 26, 2020
, ,, ,, ,,
–
Andrey Pantyukhov Jan 1, 2017–May 31, 2017
, – – – –
Total
,, ,, ,, ,,
,,
Index
% .% .% .%
.%
Andrey Pantyukhov acted as interim President and CEO between
Jan 1, 2017–May 31, 2017
Employee remuneration, average EUR
Salaries, incentives, and other related costs, MEUR
, , , ,
,
Group employees on average during nancial year
, , ,
)
, ,
Average per year, k EUR
. . . .
.
Index
% .% .% .%
.%
Financial development 2017–2021
Operating prot, MEUR
. . . .
.
Segments operating prot, MEUR
– – . . .
Index
3)
% .% .% .%
.%
EPS, EUR
. . .
)
.
.
Segments EPS, EUR
– – .
)
. .
Index
3)
% .% .% .% .%
ROCE,%
.% .% .% .%
.%
Segments ROCE,%
– – .% .% .%
Index
3)
% .% .% .%
.%
1)
Average total pay per Board member is calculated by dividing the total fees paid to the Board members, excl. members who left the Board during the corresponding term. I.e.
fees paid to Petteri Walldén removed from year 2020 average and Kari Jordan from 2021 average.
2)
Figures corrected to include passive employments in December 2019 (employees on long leaves).
3)
Financial measures used for index according to IFRS reporting. Segments gures 2019–2021 presented (not calculated in index) in accordance to Nokian Tyres new reporting
practices Stock exchange release about Nokian Tyres new reporting practices April 24th, 2020.
4)
EPS 2019 excl. the impact of the rulings on the tax disputes of EUR 1.08 were EUR 1.81. Segments EPS 2019 excl. the impact were EUR 1.98.
Annual General Meeting 2022
The Annual General Meeting will be held
on Thursday, April 28, 2022 at 10.00
a.m. (EET) with exceptional meeting
procedures without shareholders’ and
their proxy representatives’ presence at
the General Meeting venue.
More information: www.nokiantyres.
com/annualgeneralmeeting2022
Dividend payment
The Board of Directors proposes to the
Annual General Meeting a dividend of EUR
1.32 per share. The dividend is proposed
to be paid in two instalments for the
nancial year 2021, representing a payout
ratio of 89%.
Change of address
Shareholders are advised to inform any
changes in their contact information to
the book entry register in which they have
a book entry securities account.
Financial information
Nokian Tyres publishes nancial infor-
mation in Finnish and English. Financial
reports, statements, and stock exchange
releases are available at www.nokiantyres.
com/investors.
Comprehensive investor relations
pages contain information on Nokian
Tyres’ share, largest shareholders regis-
tered in Finland and upcoming IR events,
among others.. Comprehensive investor
relations pages contain information on
Nokian Tyres’ share, largest shareholders
registered in Finland and upcoming IR
events, among others.
Nokian Tyres’ stock exchange releases
can be subscribed at
www.nokiantyres.com/company/
publications/order-releases/
Financial reports in 2022
• Interim Report January–March:
April 27, 2022
• Half-year Report January–June:
August 2, 2022
• Interim Report January–September:
November 1, 2022
Silent period
Nokian Tyres observes a silent period
before issuing nancial statements,
interim and half-year reports.
• Start of the silent period: January 1,
April 1, July 1, and October 1.
• End of the silent period: The results of
the respective quarter are made public.
During the silent period, the company’s
top management and Investor Relations
do not meet representatives of capital
markets or nancial media, nor comment
on issues related to the company’s
nancial situation or general outlook.
If an event occurring during the silent
period requires immediate disclosure,
Nokian Tyres will disclose the information
without delay in compliance with
disclosure rules and may also comment
on the event concerned.
Flagging notications
Under the provisions of the Securities
Markets Act, changes in holdings must
be disclosed when the holding reaches,
exceeds or falls below 5, 10, 15, 20, 25, 30,
50 or 90 per cent or two thirds of the
voting rights or the numbers of shares of
the company.
Notications of changes in holdings
or voting rights must be made without
undue delay.
Shareholders are advised to send the
agging notications to
aggings@nokiantyres.com
IR contact information
Regarding inquiries and meeting requests,
you can send an email to
ir@nokiantyres.com
Päivi Antola, SVP, Corporate
Communications & IR
Tel. +358 10 401 7327
Annukka Angeria, Investor Relations
Manager
Tel. +358 10 401 7581
Address:
Nokian Tyres plc
P.O. Box 20
(Visiting address: Pirkkalaistie 7)
FI–37101 Nokia
INVESTOR INFORMATION AND
INVESTOR RELATIONS
INVESTOR INFORMATION AND
INVESTOR RELATIONS
www.nokiantyres.com