Welcome to Nokian Tyres Capital Markets Day. My name is Päivi Antola. I'm the Head of Investor Relations in Nokian Tyres. Yesterday, we announced our reviewed midterm growth strategy, new financial targets and non-financial targets. These topics will of course be high on the agenda today. We will have six interesting presentations. We will start with Jukka Moisio, the President and CEO, followed by Teemu Kangas-Kärki, the CFO. We will move on to passenger car tires with Bahri Kurter, Anna Hyvönen, Andrei Pantioukhov, followed by Heavy Tyres and Manu Salmi. We will finish the afternoon with a Q&A. During the afternoon, you can send questions via the webcast platform. We will take those then at the end of the event. We will start with Jukka Moisio. Jukka, please. Good afternoon. My name is Jukka Moisio. I'm the CEO of Nokian Tyres. Welcome to our Capital Markets Day. As Päivi said, we shared some of the highlights already yesterday, and therefore, today we want to focus on the discussion behind those ambitions and also provide more color on our thinking and our way forward. However, it's clear to all of you that what we want to achieve is ambitiously forward, and we want to achieve EUR 2 billion in net sales. That is something that is a very important target when we go ahead. Why do we expect that we achieve strong organic growth? There are a number of things. One is that we have completed our large investment phase, so many of the programs and investments that we've undertaken in the past years are now ready. Just mentioning a few, Dayton factory, Spanish test track, investments in heavy tires. As those are ready and we are now in the implementation phase and expansion phase, it's time to deliver. The other is that our team is ready. We are ready to grow faster than the market, and our team is strong positioned, well-positioned, competent, and has achieved major success in the past, and therefore, we aim similar success in the future. We will also use continuous improvement to ensure strong performance. It's not only about growing net sales, it's equally important to achieve strong profitability in terms of operating margin and in terms of return on capital employed. Our key midterm ambition, however, is to achieve EUR 2 billion in net sales. In fact, we have renewed our purpose. I jumped too much ahead on that one. Sorry. As part of our strategy process, we have renewed our purpose, which is to empower the world to drive smarter. This captures the Nokian Tyres spirit. Our spirit is to innovate new, go beyond current, and find ways to serve current and future generations with sustainable and safe tires. We have also spirit to achieve beyond expectations, and we are very strong in delivering those results. Let me share a quick video about our purpose. [Presentation] Part of our video, you also saw our brand promise, "We are with you." When we then go and look a little bit about the environment where we operate, we have a strong expectation for accelerated growth for premium and sustainable tires. There are a number of reasons why we expect this to happen. One is that there are new car models. They are hybrid electric vehicles. They require premium and sustainable tires. Equally well, SUV crossover vehicles penetration will help the growth of premium tires. New tire features are important to help the growth and innovation. Innovation is an opportunity to find better price points and also growth. We see that there is performance expectations, noise cancellation, rolling resistance reduction, durability, many items that are actually very important for premium tires. Sustainability as such, when we look at the raw materials, more and more of renewable, recyclable materials are being needed for the products. Therefore, of course, that helps innovation, and again, that is very important for premium tires. When we think about our markets in specific and look at our various geographic areas, we see that Nordic markets in the replacement tires is expected to grow from 2020 until 2024 by about 4%. Russia, clearly higher at 7%, rest of Europe at about 4%. All in all, the operating environment where we are is expected in replacement tire market to grow approximately about 5% per annum until 2024. Our ambition is to grow faster than the market at about 7% level, and we expect to reach EUR 2 billion in net sales in midterm. This EUR 2 billion is actually if you look at where do we start in order to achieve that EUR 2 billion. Our starting point is now rolling 12 months, so last 12 months until the end of June, our net sales is roughly EUR 1.52 billion. Our segment operating profit is at the level of 19%, our return on capital employed is at the level of 14%. This is our starting point. When we look forward, what do we want to achieve and what can we achieve? First of all, we are market leaders in the mature markets for us, so Nordics and Russia. What we want to do is to strengthen our number 1 position and achieve even better penetration of the market and also launching new products. Especially in Russia, where Andrei, my colleague, later on will talk about our increased market share. We want to maintain that and even improve. In Central Europe, we want to grow the sales by 50%. Starting point in the last 12 months rolling is about 6 million tires. The growth of 50% means that we move from 6 million to 9 million tires. In North America, the starting point in the last 12 months is roughly about 2 million tires. Our ambition is to grow 100%, and we want to achieve about 4 million tires in midterm. Heavy Tyres, again, the starting point in the last 12 months is about EUR 200 million. Our sales growth ambition by 50% means that we will achieve EUR 300 million in net sales. These are our midterm sales targets. Some of the cornerstones that can allow our success is, of course, the new products and safest tires for all conditions, strong supply chain and capability to manufacture, strong brand, sustainability actions, and being leader in sustainability. Most importantly, our team. Our capable people who've been able to achieve success in the past will achieve success in the future. This is how we do it. Some of the highlights here. We in Nordics, we rely strongly on Vianor. In Russia, we continue to improve our market share as we have gained already this year quite significantly. Central Europe, we expand our market coverage and penetration. North America, equally important to expand our distribution in the U.S. In heavy tires, grow in premium segments. My colleagues in the coming presentations will talk more details about this, how we do it. We have five cornerstones. Let me go through those cornerstones step by step and start with new products. In the past two years and 2020, 2021, we have launched a record number of new products. This will continue. It's a glimpse of the past two years. Going forward, we have quite an important program to launch new products. If you take an example that we have introduced in the past two years 20 new products to Central European markets, where we expect to grow significantly. In passenger car tires also in North American markets and in CE markets, these 20 new launches will help us to gain more volume, more market share, but also more tailored and focused products on those markets. The same number of 20 new products have been launched also in heavy tires in the same markets. We have quite a strong new product launch going on, and that will help our revenue plan. One example of the latest launches is Nokian Hakkapeliitta 10. This was introduced in the markets early in 2021. Now when we look at the recent test results of Hakkapeliitta 10, it's been participating now in three tests that have been published, and it's been actually winner in all of those three tests. Two of them are in Russia, one of them is in Finland. We are quite proud of this product, and it's going to be our flagship product to winter season in this year and in coming years as well. However, behind this product, we also have quite many successful winter products like Nordman 8, which is also introduced as a new product. We have a very complete winter tire offering going into the season. Especially for the Nokian Hakkapeliitta 10, we have a superior winter grip, comfort and reduced noise level, better on-road stability, and then we have also SilentDrive Technology, which is very suitable for electric vehicles. We have also 140 different products and size selections. Very important and very successful launch so far. Let me share a quick video about Hakkapeliitta 10. Hakkapeliitta 10, very successful so far in tests. We have high expectations for the performance already in this year, but also in coming years. However, another cornerstone is importantly to make sure that those products are being manufactured, so our capacity and capability development in manufacturing. We are right now ramping up the factory in Dayton, and we achieve about 1 million tires in 2021, and then we have a progressive growth to 4 million tires by 2024. That plan is in implementation. The equipment purchase has been authorized, and so we go in stepwise implementation so that we hit 4 million tire capability and production in 2024. In Finland, we have Nokia. Passenger car tire capacity is about 5 million tires. We are actually doing productivity improvement programs, which are ongoing, and therefore you can expect that this volume is achievable. We have also heavy tire expansion which is going on, so we move to 32 million kilos by the end of 2023. This is a 50% increase from 2018. That allows about EUR 300 million net sales, which is our ambition. We have added shifts in North America, Dayton, and we also added shifts in Nokia so that we are actually boosting production as we speak. In Russia, we have one of the most efficient tire manufacturing units in the world, 17 million tires. If you add up all the capacity in passenger car tires, we have about 26 million tires by 2024, and we have about 32 million kilos of heavy tire capability by 2023. This is enough to allow us to achieve a EUR 2 billion and higher revenue plan. What is important to continue to work is our distribution in Nordics and Russia, which are mature markets for us. We already have very established and strong distribution. Therefore, we want to add and help Vianor to be more successful and also our partners and customers in Russia. Lots of this work is ongoing. We continue, and this is in line with our achieving higher market share and be the leader in the markets. North America, we clearly want to develop the distribution, especially in the U.S. Anna will come back to that. In Central Europe as well, we will do the same, and we will help then the multichannel distribution with retail and online markets. Important thing that what we experiment in and pilot in Central Europe is the fleet business, and Bahri will talk more about that. Heavy Tyres, equally well distribution is important to continue and expand our brand. We have started to work on to improve and strengthen our brand. This work is ongoing right now. We started that late in 2020. We continue now. You will see more of these steps in coming months and quarters. However, what we want to do is to getting closer to consumer and strengthen loyalty. We want to provide a strong sellout support, and we also want to build digital solutions so that there's a seamless experience in online and local point of sales. That is something that is ongoing. You will see more results of that work in coming quarters. Sustainability, another cornerstone of our success. We've been four years part of the Dow Jones Sustainability Index. We will continue that. A lot more work will be done, and more targets and more ambitions will be achieved. However, I highlight a few of them here. One is the securing safer and better work. That means that we reduce the accident frequency by 20% per annum. We also want to bring environmental safety and environmental safety innovations. For example, provide 50% of the recycled or renewable materials in our tires by 2030. We also continue to reduce our CO2 emissions in line with our Science Based Targets, and we want to continue auditing our high-risk suppliers so that sustainability audit is 100% covering all of them. We are proud of some of the achievements here. There are more achievements in our net page, but here are some of the key achievements. We have reduced lost time injuries by 73% since 2015. We've also reduced the rolling resistance, reduced our CO2 emissions, have achieved 100% production-based recycled in Finland and 99% in Russia and in the U.S. We have 90% of the major rubber processing plant audited. Quite important achievements. We will continue this work. Sustainability is very important for us. Our team. Without our team, none of this is possible. Therefore, our team is the foundation and reason for us to achieve results, achieve higher sales, achieve the profitability, achieve new products. We have our Hakkapeliitta foundation, our heritage. We are proud of that. Going forward, our key values are we care. We care about our colleagues, we care about our customers, our suppliers, and the globe. We drive innovation, important in our history, also especially as I mentioned, lots of new products being launched in the past years. This will continue. Most importantly, we deliver high results together. This is our history. We've always delivered high results. We will continue to do that. I quickly talk about the financial targets. Teemu Kangas-Kärki, our CFO, will actually come back and give more color on the financial targets. Let me summarize quickly the financial targets. We want to achieve net sales. We want to grow faster than markets. We want to achieve EUR 2 billion in net sales. Remember, the starting point is last 12-month rolling. Our net sales is EUR 1.52 billion. The ambition is to create approximately EUR 500 million more sales in mid-term in order to hit EUR 2 billion. We want to provide high returns, high profitability. Our segment operating profit in last 12 months is 19%. Ambition is 20%, and our segment's return on capital employed is about 14%, slightly below, and we want to achieve 20%. If you think about the stretch targets, the stretch targets are really in the net sales development as well as in improving return on capital employed. This doesn't mean that we don't focus on the segment operating profit and make sure that that is at the level that satisfies investors and our teams and owners. This, in terms of stretch, is less than the net sales target and the return on capital employed target. On top of that, we want to grow the ordinary dividend and that to be more than 50% of net earnings. In summary, when we achieve those targets, it's important that we generate strong free cash flow. Here are the priorities, how we want to spend the free cash flow and how it could be used. One is that we want to secure organic growth. We want to secure the dividend, predictable growing dividend. We explore M&A, mergers and acquisitions opportunities, though we have a short list, long list like any company, and then we look at those targets, and they are important on our agenda. On top of that, if indeed we have excess liquidity on a balance sheet, we will not collect that. We will then do share buybacks. In summary, we are well-positioned for organic growth and strong performance. Our investment phase is completed. Our team is strong and ready to execute. We will deliver attractive growth, profitability and cash flow. Indeed, our key midterm ambition is to achieve EUR 2 billion in net sales. Thank you for your attention. Now I hand over to Päivi, and Päivi will then introduce the next topic. Please. Thank you, Jukka. We will now continue with Teemu Kangas-Kärki, the CFO, and then take questions to Jukka and Teemu after Teemu’s presentation. It is my absolute pleasure to be here today and present our updated financial targets. We have ambitious growth target, EUR 2 billion net sales with set of other balanced financial targets like profitability. Let's review how we will deliver sustainable long-term shareholder value and what are our lag and lead performance indicator in our business. Our balanced targets are net sales, profitability, return on capital employed, and growing dividend. Our last 12 months net sales at the end of Q2 this year was on a level of EUR 1.52 billion. We are growing faster than the market, which is expected to grow on annual level about 5%. We maintained a high return on profitability, and our last 12 months segment operating profitability was at the level of 19% and segment's return on capital employed was on a level of 14%. Now the target is at the level of 20%. We are targeting to grow our annual ordinary dividend step by step. In order to reach these return and profitability targets, it means that our asset velocity should be at the level of one. These targets have been set by using the actual currency rate, especially the Russian ruble in the first half of 2021. We are improving our risk-adjusted return by diversifying the portfolio while growing to the level of EUR 2 billion net sales. If you look our net sales breakdown in passenger car tires, we will maintain our high share in the stronghold areas like Nordics and in Russia, and we are increasing the share in North America and Central Europe with all-season tires, as we have been consistently communicating. We maintain high share of the most profitable winter tires, and we are developing the winning market-relevant offering, which means also higher share of bigger rim sizes and EVs. In order to meet the growing demand, we are producing more tires in U.S. factory and in the Finnish factory, and therefore, their share is increasing if we look the production mix. Our Russian factory, in absolute volume terms, will produce the most of the tires while the share is decreasing. If we compare these two graphs on the right-hand side, you can see comparing the product mix development and the factory mix development, that the biggest change is coming from the factory mix development and having also some slight impact to our profitability. Let's move to look our passenger car tire performance. As you all have seen this year, cost inflation is impacting all businesses. We anticipate that to continue in tire industry also beyond 2021. If you look our material cost development trend line, you can see that we start from a low level in year 2020, and therefore, the increase in 2021 is significant, and we expect that to continue also next year. Half of the cost increase this year is coming from the inbound logistic cost. Having said that, if we look the level of 2012 and 2013, we anticipate to be well below the 2013 level in 2020. Here you can also see the relative performance of our business areas and product categories in terms of net ASP, regional profitability, and category profitability. Nordics and winter being on the top in respective dimension. We have been talking about currencies in the past. We all by now know that the Russian ruble has significant impact on our performance. Here we present our net sales by currency, and you can see that the Russian ruble is the second biggest after euro, close to 20%. We have shown here the sensitivities for the key currencies if the currency depreciates or appreciates 10% or 20% as an example. I would like to point out here that the scale for ruble or the euro scale is 2x compared to the other currencies on the right-hand side. Another point worthwhile to mention is the USD impact, which is the opposite to other currencies because of the net short position of USD due to raw material purchases. Ruble has been the most volatile currency in the past decade. Let's zoom in to look in more detail the ruble impact on our performance. I anticipate this illustrative sensitivity impact of Russian ruble on our profitability being of high value to you all. Here you can see how the exchange rate has developed against EUR, starting from the level of 40 in year 2012, and being on a level of 90 in the first half of this year. On the right-hand side, you can see what is the impact of the Russian ruble with different currency rates starting from 90, going to the 40 against EUR, and what is the impact for the segment's operating profit. Clearly you can see that there is a significant impact. Here we can show you the directional impact if the currency is changing. As I said earlier, our financial targets have been based on the actual currency rate of 90 in the first half of this year. These calculations are based on several assumptions. Therefore, this is directional indication to help you to evaluate our performance against the currency. As Jukka pointed out, major part of the investment phase is completed and the growth continues. We continue to invest in new product development because the products and their performance is one of the key cornerstones of our long-term shareholder value delivery. We will invest in the front end and back end of our systems in order to ensure consistent and seamless consumer experience. That delivers us the organic growth in order to reach the EUR 2 billion net sales target. We are also focusing on asset efficiency in order to have sustainable high returns in the coming years. If you look some of the data points here below, you can see that the asset velocity dropped last year due to the fact that our net sales dropped because of the COVID, and we completed our investment phase. Now we will focus to the top line growth, the working capital rotation, and to have optimal capital outlay for the business. By doing that, our return on capital employed will be on the level of 20% in the coming years. Nokian Tyres has a strong cash conversion, and it starts with a high profitability, and our target for the next midterm is to be at the level of 20%. We will continue to improve our working capital rotation and our CapEx spend will be on a level of EUR 150 million. We can see that approximately EUR 120 million is the normal CapEx level, and then we are investing about EUR 30 million debottlenecking of our supply operations in our factories. We have a balanced capital allocation principles to deliver sustainable shareholder value. We prioritize first to the organic part to grow our top line and our profit. By doing that, our absolute net profit will increase. We are committed to grow our annual ordinary dividend step by step from the current level. The last is the M&A opportunities and the share buybacks. We are comfortable of having a net debt EBITDA ratio below 1. We don't want to have excess liquidity on our balance sheet. To sum up, our financial targets are balanced that provide long-term shareholder value. We are growing faster than the market to reach a EUR 2 billion net sales level. We maintain high returns and profitability at the level of 20%, and we will reach the asset velocity of 1 in the coming years. As I said, these financial targets are based on the actual Russian ruble rate of the first half 2021. Our ordinary annual dividend continue to grow steadily. With this set of financial targets and insights on our performance, I hope that this has been a valuable walkthrough to you all, and I thank you your valued time. Thank you, Teemu. Thank you, Päivi. Now I would like to invite you to join the Q&A together with Jukka. Let's see what kind of questions we have received so far. Excellent. We will take some of the questions now already and then continue after the business area and the business unit presentations with additional questions. You can continue sending questions via the webcast platform. Let's take the first question. This is actually something what was discussed already, but in order to be clear, Jukka, what is the timeframe of the EUR 2 billion target? Thank you, Päivi. Thank you for the question. Timeframe midterm means 3 to 5 years. We start from the last 12 months, so 12 months ending June 2021. We didn't want to take the comparable year from 2020 because that was an exceptional year. On the other hand, 2021 is not yet complete, so we wanted to start from last 12-month rolling, and this is our ambition timeframe. You don't want to give an exact year, 2025, 2024, anything? I think that we want to achieve it as quickly as possible. We believe that there may be a downturn or something on the way, but obviously we want to achieve our targets as soon as possible. If we can achieve them in three years, we are happy. If it's two and a half years, we are even happier. Needless to say, ASAP. Thank you. The next question is about OpEx. How much additional OpEx will you need for the growth target? Teemu, this is probably for you. All right. We will invest also in OpEx, especially after last year low level in line with our financial targets, and we are expecting to gain operational leverage while we are growing the top line to the level of EUR 2 billion. Let's continue with the M&A strategy. What is your M&A strategy? What types of deals could you consider? Thank you for the question. First of all, the M&A is an important opportunity to strengthen the company position and the value. We look at, for example, Heavy Tyres, a number of opportunities to add on and to strengthen the position, whether it's about the new product or technologies. Equally well, when we look at the passenger car tires, look at the M&A opportunities which take us closer to customer and consumer rather than further away from them. This is essentially what we are looking for. Also in the M&A, we have a normal way of approaching. We have a long list, we have a short list, and we work on those lists. Unfortunately, it's not possible to disclose what kind of targets we are talking about in specific. I believe that in most companies this is the same, that no specific targets are being discussed. M&A is something that one assesses and then takes time to develop them and then to negotiate, and then finally it takes two parties to agree on M&A action. Thank you. M&A is of course, something where Nokian Tyres has not had the history, and the other area is share buybacks. Teemu, how would you describe the balance between dividends and share buybacks? You did cover that partially already in your presentation. If I recap the order of priorities, we start with the organic growth to support. That one then is the dividend and M&A and share buybacks. As I said, we don't want to have any excess liquidity on the balance sheet. If no other means available, then the share buybacks is one of the tools. Good. Thank you. We continue with M&A. Are there any M&A assumptions included in the EUR 2 billion revenue target? No, there are not. In fact, these are strictly organic targets and whatever M&A and deploying the capital in M&A and adding value to the company, this is on top of the organic growth target. On top of the EUR 2 billion target and on top of our profitability targets as well. Thank you. We go to production and let's start with Dayton. Jukka, can you give a general update on the overall progress on the factory ramp-up? I believe that that has been discussed in connection of the quarterly results and so on. Let me give a current situation. We are basically running at the annualized rate of 1 million tires at this moment. We've authorized the capital spend to add the additional equipment in order to build the capability up to 4 million tires. This is ongoing, the equipment will come step by step. We have also started the third shift in the second quarter and the fourth shift during the third quarter. We are progressing. Far so good. We are on our way to 4 million tires. There is another question about production, and that is related to Finland and Russia. Can you talk about rationale to increase passenger car tires capacity in Finland versus Russia? That is the first question. Then can you increase the Russian capacity further than 17 million tires? Thank you for that question. First of all, in Finland, what we want to do is that as we have this capacity and capability available with modest productivity investments, we can go up to 5 million tires. This is an obvious thing to do because it doesn't require capital. It also allows us to make premium tires and to service the market quickly. Therefore, we have added shift in Nokian, continue to explore what more can we do. At the same time, it's normal work in productivity and debottlenecking and so on that can we make more tires in Russia. We all understand that Russian factory is one of the best in the world. Whatever new tires we can manufacture there and supply to the market, we surely study and we have some ideas what we can do. Let's come back to those when we go down the road and maybe can even increase the capacity in Russia step by step. That then will allow us to go beyond that 26 million tires I mentioned midterm, and that can also happen relatively fast. Let us come back to that when we are clear on the opportunities. Thank you. Then a follow-up question on CapEx. This EUR 150 million CapEx, how long will that be enough? Are there any needs for additional CapEx investments in sight? Teemu, I'll give that to you. Thank you for the question. We see that this EUR 150 million level is sufficient to reach EUR 2 billion and beyond. As I stated there, you can split that in two buckets, EUR 120 million for the normal CapEx level, and then the EUR 30 million is debottlenecking of supply operations in order to increase the capacity. Thank you. Let's take one question about sustainability. How are you adapting to the risk of warmer winters due to global warming? Thank you for the question, first of all. It's important for us, as we've discussed about the winter tires, that we will see in our key markets that the winters will be there. Snow grip, ice grip will be important. We have Hakkapeliitta 10 and subsequent models in the winter. We will defend our snowbelt performance and position across the world, no doubt. At the same time, we have introduced friction tires. As I mentioned about the new product launches. A number of products to Central European markets, a number of products to North American markets, which are not necessarily targeted to winter or snowbelt. This means that we are actually diversifying our portfolio as well as we also have introduced a number of new summer products and all-season products. It's quite important that we recognize this, but we defend the snowbelt and the performance in the snowbelt. Lots and lots of people and lots and lots of situations where the winter tire and studs are needed. Thank you. About R&D expenses. What is the trend in R&D expenses for next years, staying at the previous year's levels somewhat lower, or could it be higher? As we have been communicating already earlier that we are investing in new product development and as an example, the Spanish test track will increase our R&D spend. We will see a decent increase of our R&D spend in line with our financial targets again. Thank you. It's time for us to move on. We will continue with the questions after the business area and business unit presentations. Our next speaker, our topic is Central Europe, and our next speaker is Bahri Kurter. We are contacting Bahri in Prague. Hello everybody. My name is Bahri Kurter, and I'm calling in from our Central European headquarter here in Prague. I joined Nokian Tyres around mid of 2019, and since then I'm leading the business here in the Central European region. As you can see from the slides, I see now that the slides did not move. Now it's there. Sorry. As you can see from the cover slide, our objective in Central Europe is to capture and accelerate high value and at the same time to grow overall business by 50%. As Jukka Moisio already mentioned, this is a target of about 9 million tires. I'm really pleased today to share with you that in 2020 and 2021, despite COVID and other external factors, the team did a great job and our business and market shares increased significantly, and we are fully on track to reach the overall growth target of +50%. In the next 15 minutes, I would like to present you, first of all, some ongoing trends shaping our industry. Secondly, show you how our strategy is and obtain results. Last but not least, to highlight our direction going forward, how to further accelerate our positive business development here in Europe. Okay, now let's start with the ongoing trends that have an influence into our industry. We see actually four major developments in the European tire market, driven by two bigger consumer trends, and these are convenience and sustainability. In order not to repeat already what you have seen before, I would like to step into two of them. First one is the rise of the all-season business. You will notice, in Europe, the climate and the weather conditions are changing. At the same time, consumers becoming more convenient and products are becoming better. That's why consumers can now meet different weather conditions with one set of tires and avoid seasonal tire changes. The overall business share of all-season tires has more than tripled to 14% over the last five to six years. It continues to rise, by the way. As the all-season market increases, so does the demand for bigger rim size of 17 inch and plus. The overall share of this segment has almost doubled to 23% in the same period. What we can summarize is that in Europe, people like to drive big cars and they want to have bigger tires. The other point which I would like to mention, as you might experience by your own as well is, and COVID-19 has clearly accelerated, that consumers' behavior regarding online. They leverage online throughout their shopping journey, and tires are no exception in this any longer. Depending on the country where you are in Europe, actually 60% to 80% of tires are already searched online, and 10% and even up to 40% are bought online. When we look now onto the total market development, of course, these developments have an impact onto this. That's why we expect that the overall market will grow approximately 4% on a yearly level to up to more than 300 million tires in three years from now. When we look into the left side, you see that Germany is the key market. It represents a quarter of the market, like 25%, and it's actually setting the standard for many developments. It is the biggest winter market, the biggest all-season market, the biggest market for rim sizes, electric vehicles, and so on and so forth. As you can see on the right side, traditionally being a more winter tire company, our current market shares are the highest in Eastern Europe, between 10%, even up to 15%. However, if we go to the western and to the southern parts, these market shares are decreasing. As we go ahead, we will increasingly focus our efforts to key markets like Germany, France, Italy and Spain, where our market shares are lower today. What have we done during the last two years? During 2019, we already developed and launched our strategy with a clear focus on high-value capture and overall business growth. Within this strategy, we applied what I call the three Cs, and which are category, country, and channel expansion. We have actually four building blocks within that. While we continue our stronghold winter business, we now started to expand our focus on the most profitable and fastest-growing categories of the market, which are all-season tires and large rim sizes with the launch of better product. Similarly, we recalibrated our go-to-market approach in key markets and introduced a new sales area structure to further leverage synergies and better focus on different market and weather conditions, like in Eastern Europe; in Germany, Austria and Switzerland, what we call DACH; and Western Southern Europe. From being traditionally a more wholesale-driven organization, we heavily increased our efforts to build a successful multichannel approach in retail, but as well in online. To underline the three Cs strategy, we strengthened our go-to-market with a higher share of marketing allocated to sell out, and specifically into consumer activation. Finally, we have streamlined our operations for better effectiveness and efficiency. For example, we centralized and relocated our whole supply chain organization, including customer service, to our European headquarters in Prague. At the same time, we introduced a new senior sales team at European level to support our multichannel and marketing activities, which are key to succeed. How about the results then? As I just mentioned, our systematic strategic plan execution result in significant market share gains and successful value capture. Our overall market share increased to up to 3%, but with strong improvement in the all-season segment, while gaining in our stronghold winter business at the same time. Not at the expense of. Similarly, our focus on large rim size has been very successful, as we gained market share and growing faster than the market. We can say that we were growing exactly where we wanted to grow. As you can see on the right side, how the market will still further develop. The share of all-season tires will further go up to even almost 20% in three years from now. However, combining winter and all-season together, this pie is becoming bigger, and this is our big opportunity. Here is just a overview about the product launches that we have done in the last two years, which were actually very important for our growth. The Snowproof P and the Seasonproof tires for our winter and all-season segment. This was done for passenger cars and for SUVs. Now just recently, we have actually filled the gaps with our van tires in Snowproof C and Seasonproof C. Going forward, what are we going to do? Actually, we want to continue where we have been successful. This is our 3C strategy. We want to strengthen and expand our strategic priorities at the same time. That means we will grow our product portfolio now with CE market-based offerings, especially with winter and all-season tires, because conditions in Europe are different and consumers are different. In addition, we will seriously start to capture the summer tire opportunity behind our new testing center in Spain, I will talk about that a bit later. We want to win and be in the biggest tire market in Germany. We said, Germany is important in many aspects, but as well continue to expand our geographical presence in markets where our market shares are low, like Italy and Spain today. We will further develop our multichannel execution beyond retail and online, and we are going to kick off to pilot in the growing fleet business. In underlying this approach, we will not only invest a higher share of marketing to consumer activation, actually, we want to increase the overall spend that we do in marketing to increase our brand awareness, in markets where we are just entering or expanding our presence. At the same time, we are going to invest into our branded retail, and that I will show later on as well. As we expand into new categories, countries, and channels, we will redesign as well our supply chain network to meet and exceed future industry service levels. Of course, when you grow to 9 million tires, you need a different supply chain footprint than what you have today. In the next few slides, I would like to go a little bit deeper and highlight, let's say, the key adjustments we are going to make. When I start from the product side, the key change will be a dedicated R&D team with products specifically designed for CE markets. The focus will be on premium product and performance and quality, and that will enable us to achieve top rankings in independent test magazines and to win in the most challenging market, Germany. These product innovations will be supported by our test centers that we have already in Finland, but with the new one. In addition to our existing ones, new test center in Spain will provide us with a unique advantage going forward. The state-of-the-art facility will step change development of next generation products in the all-season, but as well in the summer category, to win in markets like, as we said, Germany, but in more summer-based markets like France, Spain, and Italy, where our market shares are still low today. With this set of test center capabilities, I would say we are very well positioned to offer premium and high-performance products for different tyre categories, weather conditions, consumer needs, and markets in order to become what? A truly European tyre manufacturer. As I just mentioned, what is our actually kind of a country focus? Of course, it is Germany. Due to many aspects, it is the biggest market for winter, all-season, and electric vehicles, fleet business. For everything, it is the biggest market and sets the direction for Europe. That's why the biggest growth will come from there. Of course, France, Italy, and Spain. They are important for coming years due to our widening category and product portfolio, and with our new test center in Spain. Of course, Eastern Europe. This is our stronghold. We have currently market shares from 10%-15%. This is what we want to keep, but we want to further leverage, and there are opportunities there to further increase our business. Going forward, what are we going to do from a marketing side? I just said, to support our category, country, and channel expansion, we will increase our overall marketing spend to build brand awareness. I think this is the area where we are focusing on. Of course, on the other side, we will further increase our presence at digital and physical retail via our NAD retail network and concept. NAD are the Nokian Authorized Dealers in Europe. Today, we have around more than 2,100 NAD outlets and Vianor stores across Central Europe. Actually, that generate currently approximately 25%-27% of our business. We are developing right now the next generation of NAD concept, and this is key for us going forward. You know why? Because to connect the winning hearts and minds of European consumers going forward. With this, actually, I'm at the end of my presentation. Just to sum up, and for you, the most important key takeaways. First of all, Central European tire market is big. It is growing, and it is changing. Changes are driven by the consumer trends with all-season tires, bigger rim sizes, fleets, electric vehicles, and online as important and recognized opportunities for us. More importantly, we have already a growth strategy in place, and we are executing accordingly. The achieved business results are very positive. With this tailwind, we now accelerate our pace further, and we want to do that by expanding our product portfolio in new categories, leveraging our state-of-the-art R&D and test facilities. Secondly, expanding geographically into new countries. Of course, implementing a clear multi-channel approach and, at the same time, improving our supply chain, which is key. Finally, and to finish with that, we will increase our total investments into marketing and branded retail to build, of course, our brand awareness and get connected closely to the consumer. With this plan in place, we are on track, I would say, to accelerate high value capture and growing our business by 50%. Thank you very much. I really hope that was helpful for you. Thank you, Bahri. Let's reconnect to Prague in the Q&A after a while. From Central Europe, we move on to North America and Nordics. Our next speaker is Anna Hyvönen. Anna, please. Thanks, Päivi. I will first talk about North America, and then I will move to Nordics and Vianor. The target set for us is growing by 100%. That means that we will grow from 2 million tires to 4 million tires in next three to five years. It is a challenging target, but I'm very confident that we can do it. We have been introducing new tires for North American market. We have been investing vastly in the Dayton factory, and we have a great sales team in place who is building on the snowbelt success. Let's have a look at the market first and then our growth engines. The North American replacement tire market is about 270 million tires. It is growing gradually towards 300 million. For us, the most interesting segment is the light truck. It is the fastest-growing segment. As you know, the market is very mature, and the only way to grow there is to take market share from others. Here you can see the main growth engines that we have in place. Snowbelt, we will be building on the customer relationships that we have there, and the target is to secure the winter tire market share. Growing in all season. As I said, we have been introducing new all-season products, and that will be driving our growth. The Dayton factory is in the core of the growth. Developing our distribution network. We will build the distribution network together with our key wholesale partners, and we will go directly with selected large retail accounts. We also have our own distribution in the northeast of U.S. Let's have a look at this in a little bit of detail. Snowbelt. As I said, we will build on the existing customer base. We have a very good market share there and excellent customers like Kal Tire and Stox. In the U.S., we want to increase the in-store share, and as I mentioned, we have our own distribution in place in the Northeast, which is the most important winter area in the U.S. We will develop that further. When it comes to the products, our winter products are seen in a very positive light in North America. We are a forerunner in Europe in winter tires, and our reputation in winter is legendary. The market is developing towards just-in-time deliveries, and that is putting pressure on wholesalers and manufacturers. We are doing close cooperation with the customers, with collaborative planning. We will be expanding our warehouse network, and we are increasing our stock levels in our warehouses. This is to improve the availability of the tires in the market when they are needed. Let's move to the all-season growth. During the last two years, we have been introducing new products to the market. We have been renewing the portfolio. As I already mentioned, the Dayton is the key when it comes to the North American all-season products. We will focus on light truck. The light truck vehicle count is growing approximately 5% per year. One element in the all-season product development is that we are doing that together with our customers. I'm sure that you know that we are not in the same level of marketing spend as the big players are. We introduced a new dealer sales program two years ago, and that program is paying for growth. The feedback on the program has been extremely good. We are doing collaboration with our wholesalers and with our retailers to increase the brand awareness and the consumer pull. Let's remember one thing in the North American all-season market. We are not going to have our tires sold in every store in the U.S., but we will be selective, and we will work with the partners who want to develop the business with us. This is the way to ensure the earning potential. I would like to introduce a couple of new all-season products in the North American market, and let's start with this one. Nokian Tyres Encompass. It's an exclusive tire for Discount Tire, and it was designed together with Discount Tire. The tire was launched in January this year, and it's a tire for passenger cars and crossovers. It comes in 13 most important sizes, and it is a product for all year-round use. It's officially approved for winter use, and you can see the snowflake on the tire. I would like to introduce you to One. Nokian Tyres One. This was a product that we also designed together with the customers. When we were asking the customers what they actually like and what they want to have for all-season tires, they said to us that it has to be safe, it has to be reliable, it has to be easy. A tire that is no hassle. We introduced the HT tire last year in January. It is a tire for large SUVs and light trucks for highway use. Nokian Tyres One all-season touring tire was introduced in January this year. It is a touring tire for family cars for everyday use. It covers 91% of the vehicle segments, and the feedback on the tire has been extremely positive, and it is selling really well. Next, let's go to the distribution network. I want to divide this into two. Canada and U.S., looking at them a little bit separately. In Canada, our market penetration is much higher than in the U.S. As I already said, we will be building on the existing customer base, and developing the business there like that. When we look at the point of sales in Canada, we have over 1,000 points of sales. In the U.S., we have close to 5,000 points of sales. In Canada, we want to capture the growth potential in Ontario and in the Montreal area. This is the way that we will then secure and grow our winter market share. In the U.S., we will be expanding our footprint with wholesale partners and with large retailers. We will expand especially in the South and West. As I already mentioned, we will be developing our own distribution network further in the northeast of U.S. Just to remind us, not selling tires in every store in the U.S., but to ensure the earning potential, we will be selective. We want to find partners who will commit to the targets that we have and who will develop the business with us. Key takeaways for North America. We will double our sales. Our growth engines are solid. We have very loyal customer and partner base. Our new products are performing really well. Dayton is in the core of the operation, and we do have a great team in place. I'm sure that we will deliver on promise. Now I would like to move to Nordics and Vianor. Nordics is our stronghold. We have been doing business there for a long time. We have a long heritage in there. We are number one in the market, and the business is profitable. Our One Nordics team is very strong. Looking into the details of the Nordics business. As you know, we are the only tire manufacturer who is designing tires for Nordic market. It is our home market, and our position is very unique there. The brand awareness is very high, and our customer base is very wide. At the same time, when the customer base is very wide and loyal, they are also extremely demanding in a product quality side, but also in the service level. What the service level demand means that the customers are expecting to get the tires on time for the season, in summer and winter. Our job is to make sure that our customers have the tires in time for pre-season, during the season. What we are doing there is that we are developing our delivery capability, we are optimizing our local warehouse network, and we are developing further our Vianor service center network so that they can better service the last-minute deliveries. I would like to introduce now one product that we launched actually last year for the previous summer season. This is Hakka Green 3. We made a survey last year where we asked the drivers that what do they value in summer tire. They said this. They want to have good wet grip, they want to avoid aquaplaning, they want to have long-lasting tires, and they want to see that the tires are saving fuel. This was our answer for that. We launched this last autumn for the previous summer season, and it sold really well. Now moving to Vianor. Vianor is our biggest distributor in Nordics. We distribute one third of our sold tires through Vianor network. We have currently 174 own service centers and around 150 partners in the Nordics. You are aware of the fact that we have been improving our performance during the last couple of years, and Vianor is profitable standalone. We are not planning any acquisitions during the next few years, but we will be developing our business through greenfield operations and partners. There's the one trend in the market where we want to invest, and that is the tire hotel. We have currently around 200,000 tire hotel customers, we will be investing more in the tire hotel capacity. This is a very good way to strengthen and keep the customers with us. The key points for Nordics. We are very strong and profitable, that's what we will be also in the future. We have a very wide, loyal and demanding customer base. We have an excellent distribution network. Vianor is in the core of our operations. Our products are very high in quality, the team is very strong and positive. To finalize my presentation, I want to introduce our latest addition to our Hakkapeliitta family, Hakkapeliitta 10. Here it is in person. This tire will be available for the next winter season. There's a lot of interest in the market for this. We are very confident that it does extremely well. For me, it is a beautiful tire. Thank you. Thank you, Anna. From North America and Nordics, we are moving on to Russia. Our next speaker is Andrei Pantioukhov, who is responsible for our Russian operations, Asia, and global marketing. Let's connect to Andrei. Thank you, Päivi. Hello, everyone. Great to have you all at this Nokian Tyres Capital Markets Day. Yes, indeed. Let's now move to another stronghold of Nokian Tyres, Russia. Nokian Tyres became the market leader in Russia back in 2005, and we have retained this position ever since. Of course, the Russian market has been quite volatile, as many of you know, and also our business have seen some ups and downs, but our leadership remains undisputed. In the next about 15 minutes, I will talk about how Nokian Tyres is doing in Russia, what to expect from the market, and how we're going to achieve our ambitious targets to keep and further strengthen our undisputed market leadership in Russia. In 2020, last year, we built a very good foundation for our success already this year and years to come. As many of you remember, we had an issue with high carry-over stocks in distribution after the winter season 2019. In 2020, in order to deal with this issue, we revamped our commercial and marketing policy quite significantly and shifted our focus from sell-in to sell out. Our approach was to maximize sell out last year while limiting sell-in. That was the way to normalize stocks and distribution. I can say that we very successfully managed to reach that target and normalized this stock. This change, shifting the focus and focusing mostly all on sell out, this is a continuous change into our approach. We believe that this is the most effective way also to ensure strong sell-in in the current market position. Already in 2021, this year, we regained very rapid, profitable growth. Based on the data that we have, we are clearly outperforming competition this year, and we expect that our market share in Russia will reach its historically highest level already this year. Within a couple of minutes, I will share a little bit more details about our performance with you. As we expect the market to continue growing, we believe that we are well-positioned to benefit from this growth and to become even stronger in the future. I will talk about how. Before that, let's spend just a couple of minutes looking at the market. First, new car sales, which is a very important indicator for us as about 1/3 of demand for winter tires in Russia is driven by new car sales. New car sales peaked in Russia back in 2012 when new car sales reached almost 3 million new cars sold. All following years saw a clearly lower level of new car sales, reflecting the overall economic situation and consumers' purchasing power. In 2020, the decrease in new car sales was actually quite modest compared with many other markets. Already this year, the new car sales regained quite a healthy growth. We expect that new car sales will grow by approximately 10% this year compared to last year on the annual level. I'm pretty sure that this growth could have been even faster if not the clear shortage of supply in the car industry globally, but it's especially strongly felt in Russia. When we look into the future, we expect the new car sales to continue steadily growing, but the level of new car sales is unlikely to reach its peak levels within the next few years. Now moving to the tire market, here you can see a long historical series of data, the total replacement tire market in Russia divided by segments, also our forecast for the next five years. As you can see, over the last decade, the Russian tire market has seen two major downturns, one in 2015, 2016, and then the last one last year in 2020. As a matter of fact, the downturn in 2020 was recorded more on the sell-in level, whereas on the sell-out level, in consumer sales, the market was close to flat, even slightly positive, because many players were destocking and normalizing their stock level. That created very good opportunities for growth already in 2021, actually the growth that we are experiencing this year in the market has been quite unexpected by many players. When we look into the future, we also expect the market to continue growing, driven both by new car sales and replacement demands. There are many factors behind this growth. At the same time, we of course should remember the volatility of the Russian market, and I am pretty confident that the growth will not be exactly as smooth as this chart illustrates, but at least the trend is there. Another trend is that the B segment, or value for money as it's often referred to, has been growing fastest, and we expect that to continue also in the future. A segment or premium segment is expected to remain more stable, but also showing quite nice growth. Nokian Tyres continues to focus on the profitable A and B segments, which combined represent about 1/2 of the market. As I promised, a couple of highlights about our performance this year based on the results of first half of the year. We are clearly boosting both sell-in and sell-out in 2021. As I mentioned already, our main focus nowadays is on sell-out. Here we have had an excellent summer season. You can see from the left-hand side chart that our sell-out of summer tires in Russia almost doubled compared to last year and reached a level which is significantly higher than over last several years. Also sell-out of winter tires has developed quite positively, but of course the main consumer sell-out season for winter tires is about to start in a few weeks. We have all reasons to believe that it's going to be very successful for us as well. This positive development of sell-out has driven also good performance on the sell-in level, as you can see on the right-hand side chart. You can notice that the structure of our reported sales in the first six months of 2021 has been quite different compared to the previous years. With the share of summer tires clearly higher than in the previous years. The Russian market experienced quite a severe shortage of tires driven by many factors. We saw a business opportunity and we decided to take this opportunity as summer tires represent important strategic focus for us. That enabled us to significantly increase our sales of summer tires in Russia. As for winter, we still have time to deliver remaining winter tire orders and ensure very good results also in the winter tire season for us, which remain our key priority of course. Overall, our sell-in in the first half of the year 2021 increased by over 90% in terms of sales volume in Russia. We are looking at very excellent prospects for the full year 2021 and for the following years. Still of course remembering the volatility and the uncertainty in the market which will remain. The key question is of course, how are we going to ensure that we are also successful in the future, that we are able to keep our very strong position in the market and to strengthen our leadership in the future? Our very highly efficient, large scale local production in Vsevolozhsk, Russia remains the foundation of our commercial success. When we think about the ways, the tools to reinforce our leadership, we have defined five key strategic priorities on which we're going to focus over the next few years. Let me quickly walk you through these priorities and then give you some highlights and examples on each of them. Priority number one is about product leadership. Number two is about optimization of revenue and profitability driven by smart price positioning. Priority number three is about consumer pull and ensuring sell-out through both direct promotion and sell-out support to our partners. Priority number four is about developing and utilizing digital business solutions, e-commerce, online services for consumers and customers, which is very important in Russia. Priority number five is continuing to build our multichannel distribution and further develop branded retail. As I promised, each of them in a little bit more detail. Product leadership. This is where it all starts, and you have seen already Hakkapeliitta 10 tire and even demonstrated live by Anna. This is a really very special year for us, because studded winter tires is a very important category in Russia, representing about 80% of demand for winter tires. With this new product launch, Russia received a special product tailored specifically for the needs of the Russian market, which will enable us to maximize safety on wintry roads by our consumers, while at the same time complying with all local technical standards and regulations. As Jukka mentioned already in his presentation, the first two magazine tests where Hakkapeliitta 10 participated in were very successful for this new flagship product, reaching number one place in both of those tests. Simultaneously, we renewed the whole product range in winter tires and studded winter tires in Russia and launched a new leading product in the B segments in the value for money category, Nordman 8, which I'm sure will be very successful in this segment in Russia this year and in the years to come. We are absolutely confident that also this new flagship Hakkapeliitta 10p will be very much appreciated by Russian consumers in the upcoming winter season. Now moving to the second priority, and this is about using smart price positioning in order to maximize our results to optimize our revenue and profit. Hakkapeliitta by Nokian Tyres has been an iconic brand in Russia for many, many years, and that enables us to keep our flagship product at the top of the price range in the Russian market. As you can see from this chart, we continue to be the price leader in the winter tires in Russia. Simultaneously, as the market is quite versatile and there are different segments, we have pretty full coverage of different segments, specifically targeting certain competing brands and models with each of our models in the brand, thus contributing to this optimization of revenue and profit that I have been talking about. In summer tires, our approach has been slightly different. We chose to be more competitive within the premium segment. Again, we see it as a way to optimize the end result by being slightly more competitive but making very good revenue and profits. That enables us actually to be not only the leader in winter tires, which is quite obvious, but also to be the leader in summer tires in Russia. Priority number three, about maximizing sell out and consumer pull. As I said, we have a very strong brand already, but we continue to invest into this brand, and also we are doing quite a lot in order to support and sell out of our products. We have a number of different programs running in order to ensure this consumer pull. Let me mention just one of them, the extended Hakka Guarantee, which has quite a long history in Russia and which is a very powerful tool to support the sellout. There are almost 5,000 points of sale across the whole country, which participate in this program and which offer our Hakka Guarantee on behalf of Nokian Tyres to the consumers. Priority number four is about e-commerce, digital business, online services. Extremely important in Russia because Russia happens to be one of the most advanced markets in the tire business globally in terms of e-commerce. It has very high penetration and very high share of consumer sales for the whole country, including all towns and villages in a country with nine time zones. The share of e-commerce today in the tire business is estimated close to 40%, but in the large cities like Moscow and St. Petersburg, the share is already over 80%. Online has become the main sales method of tires to consumers. Of course, many of our customers are actively involved in this business, and this is why tire manufacturers also have to be involved in order to operate in the same environment together with our customers. Nokian Tyres has been an early adopter of e-commerce in Russia. Some of you may remember that we launched our first direct consumer web shop in Russia already 10 years ago in 2011, and built a lot of capabilities because of this. Last year in 2020, we converted this web shop into a single-branded marketplace operated by Nokian Tyres, which connects consumers across the whole country with hundreds of professional tire retail shops. Another example of a marketplace also operated by us is Vianor.ru, which generates consumer business for the Vianor network in Russia. Last but not least, distribution remains to be key. We continue to work with the official distributors as our main distribution channel, and these are integrated wholesale and retail operators, also with a very active online presence. We work in very close partnership with them. As a matter of fact, I just returned only yesterday from a two-day conference with our top distributors, which we held in Karelia, here in Russia. Had very interesting discussions and fruitful negotiations. This traditional annual event reconfirmed our close partnership and the community of Nokian Tyres partners, which continue to build Nokian Tyres business together. At the same time, together on top of official distributors, we operate with many other customer categories, including automotive customers such as car manufacturers and car dealers, in order to make sure that our products are available and attractively presented to consumers in Russia, regardless of their point of entry, regardless of the channel that they selected for their tire purchase. On top of that, we develop some new channels like corporate fleet customers, for example, including the quickly emerging and even booming car sharing and taxi operator category. This is how we work. As I outlined already, we made certain changes into our commercial policy. It turned out to be quite successful. We regained very rapid growth. This year, we clearly outperforming competition and intend to keep it this way. We continue to focus primarily on sell out, and we believe that it will drive very strong sell in as well. At the same time, it will ensure that the stocks in our distribution will remain on a healthy level. We actively use pricing and product mix management in order to improve our average prices and profitability. We believe that with all the uncertainty and volatility of the market, with our long-term experience and continuous improvement of our business model, we are well positioned to mitigate these risks and to benefit from the market growth. Here I must mention our very experienced team in Russia with many people who have worked in the tire business and for Nokian Tyres for 15 years and more, like myself. We believe that this is the strongest asset which will help us to reinforce our leadership in the future. Thank you very much for your attention, and back to Päivi. Thank you, Andrei. Let's reconnect in the Q&A after a short while. Now we are moving from passenger car tires to heavy tires. Our next speaker is Manu Salmi, who is responsible for heavy tires and the Finnish factory in Nokia. Let's first look at a video. [Presentation] Good afternoon. I am very excited to lead you to Nokian Heavy Tyres growth strategy. By that video, you got the flavor how we work with our customers, what kind of products we have, and what kind of overall business we are doing. We have clear target to grow by 50% during this strategy period. As you know, heavy tires business is roughly EUR 20 billion-plus market globally, and it is steadily growing above 4% per year. Biggest segments there are construction tires and agricultural tires, and also mining and industrial tires are remarkable. We are present in all those segments. Mainly, we focus to the biggest ones, so agriculture, which includes forestry, and then construction tires. The market is divided between original equipment and aftermarket, like 35/65, roughly. Actually, our heavy tire business is the same. Of course, there is a bit variance between the quarters, but it's roughly the same, 35/30 to 65/70%. How are we going to grow? We have four main growth drivers. Our target is to grow more than 10%. As I said before, the market is growing a bit above 4%, so it's an ambitious target. An overall target to grow by 50%. To be able to grow, we need distribution. Our strategy key markets are Central Europe and North America. There we will strengthen our sales team and also focus to new distribution customers. We will build capacity in Nokia. In past years, we have been lacking some tires and the availability has been tight, but we will solve this by building new capacity from 20 to 32 million kilos. This investment project will be ready by 2023. It is ongoing. We started it already 2018. We have done a lot of things and I will tell about those in next slides. We will widen our product portfolio by 50%. We will go to the segments where we have not been before. There we can find and get new customers and make their business easier and better. We will develop digital capabilities both to our own processes, production, sales, logistics, but also connect to the customers directly via different electronic systems and also via smart tires. We are not only growing, we want to have profitable growth. We have already now world-leading productivity in Nokia, and we will continue to have that leading position by doing these investments. We have a lot of automation there, robots. We have great manufacturing execution system and so on. We will maintain our price position through quality and service. Customers want to have the best tires with best service, and we are ready for that. We have our Lean leadership model. That means that we have clear targets. It is communicated to everyone. Everybody knows what is expected. The whole system in different functions, not only in production, are using that, and it is making the process so efficient. Whatever we invest to operations in long term or short term, we want to have good payback for that so that also our owners are happy and we can be happy and really be profitable. First driver, the distribution. We are already strong in Europe, in Nordics. We will continue that and we will strengthen it and also in North America. East is important for us. Russia is, for example, the world's biggest forestry machine market and therefore really important for us. There is also a big mining sector and port tire business where we are involved. South America, it's a agri market and forestry market and therefore also potential and already now important for us. Australia, New Zealand, same thing. Really, we need to concentrate somewhere and it will be Central Europe and North America. The capacity question. From 20 to 32 million kilos by end of 2023. It has started, as I said. We have done, for example, mixing capacity improvements in Nokia site, compound building capacity, also new curing lines and ready-made tire handling by robots and inspection of the tires by visual inspection. Those are already ready for this 32 million kilos. An ongoing project are the tire-building machines which we are now installing. We are very well in schedule. The total value of the investment is about EUR 70 million, it's for both production and R&D capabilities. R&D includes, for example, test molds, new testing machines, and so on. We have built to Nokia a brand-new R&D center where we can really meet the customer and authority demands and also make the new innovations and test those accordingly. It's really high-quality, efficient place. New machinery what we have in that testing center are really something. They are our own design, so there is nowhere else in the world. Products, that's the key. That's what customers are buying from us. We are the global number one in forestry business. Biggest always are our customers. We work very closely with them. We want to be satisfied, they want to be satisfied about that cooperation. We are developing the next generation forestry tires with them, that's why customer and customer view is so important for us. From the previous slide where you saw that we are strengthening our salespeople around the world, part of their job is really listening the customer and collecting the information what kind of tires we need to produce and design. New area where we are really targeting the growth is agriculture. There, especially new technologies like very high-flexion tires for the high-horsepower tractors and implementation tires for trailers. That's a huge market with big potential in both OE and aftermarket. Third product segment where we are including investments to new products is on-road, which means trucks and buses tires. In Central Europe, regional and long-haul truck tires are the next thing what we are going to launch. That market is growing, and the demand for our specialty tires is high. Next, I will tell you about one big development thing what we have done together with our customers. We have combined all-terrain mobility and on-road performance in our new tractor tire. It's called Nokian Ground King. We launched that last year, and it has been really a success as that kind of tire has never been on the market. Many times, many years already, customers have been asking how we could drive on the road with the same tire than we are working on the field. Actually, the demand for that kind of tire is just increasing because areas where the farmers and constructors are working, it's just widening. For example, in Central Europe, farmers can drive 100 km from field to field. The road condition, road performance is really important, but you can't lose anything what you need on the field. Fourth, the digitalization. Our vision is to be the industry leader, and that includes our own production process, customer interface, and also the smart tires. In our digital factory, we have manufacturing execution system, which is, I would say, world-class. We can follow every tire from the raw materials to the end user and back, and that's really important when we are following the quality. When getting feedback when the tire is really succeeding or if there is a challenge in hard conditions, we can follow what has been done, who has done, from which raw materials. That's really important to be the premium. From customer point of view, we are connected to their systems. We get the forecasts. We get feedback from quality point of view. Everything helps us to be efficient in our own production and also plan the availability and be right in the seasons. Intuitu smart tire, which we have already launched first to agriculture tires. Tire is telling to the user how they are doing, what kind of pressures, temperatures, and in the future, other things you should do and how you can be the most efficient in your work. Also the tire is telling to the producer, Nokian Heavy Tyres, how they are working, what should be done better. We are focusing on premium segments. As you have been following, we are, let's say, the top brand in those segments where we are working. We want to grow by 50%. We need more distribution. We are working for that. Customers are with us. We are increasing the capacity. That is going well. We will reach that 32 million by end of 2023. We will increase the product range to serve better, to get into those segments where we have not been before. That will widen our sales. These digital capabilities which are supporting all of those. Even how good technology or whatever systems, processes, if the team is not right, it doesn't work. I am very happy and proud about the team, what we have in Nokian Tyres and globally in all functions. They are committed to make this happen, and we have already shown the results that we are on the way. Thank you very much. Thank you, Manu. This Heavy Tyres presentation concludes the presentation part of this Capital Markets Day. We will now have a short break of 10 minutes and continue with the questions which you have already been sending to us. You can continue to do so via the webcast platform. Let's see in 10 minutes' time. Welcome back. Already now thank you for all the questions that you have been sending so far. You can continue doing so. Let's start with the questions which we have received. The first one is about the BA targets and the starting point of these targets. Maybe we'll do so that Anna, if you can answer for North America and comment on Nordics as well, and then maybe Jukka, you can cover the other areas. For North America, the starting point is the rolling 12 months. We use as a basis the 2 million tires, we will grow to 4 million. As Jukka said, that it's in midterm, three to five years. Nordic strengthening the number 1 position in the market, that is something that we do constantly. Just to continue and build on that indeed we didn't pick 2020 as a starting point because that was an exceptional year. 2021 is not completed, so therefore we picked 12-month rolling. The Central Europe, the starting point is roughly 6 million tires, and ambition is to go all the way up to 9 million tires in midterm. In Russia, we've gained recently significant market share, as Andrei was telling, and therefore we want to build on that and continue improving that and strengthening that position. Heavy tires, as mentioned, the rolling 12 months is roughly about EUR 200 million, and our ambition is to grow by 50% to EUR 300 million. Thank you. Let's continue with North America. Anna, how are you growing your dealer network in North America? I mentioned in the presentation that our distribution is selective, and that is working really well. The dealers are contacting us, and they want to work with us because they see that there is earning potential for them in the cooperation. We are developing our NAD program all the time. I also mentioned that we want to grow with the wholesalers, but it doesn't mean that we disappear from them. We want to be very strong also with the wholesalers in the market. It means that we need to have very strong sales team in place. We are recruiting more people now in the growth areas to make sure that we have the presence. How are you increasing the consumer awareness? That has also been asked. I think that through this cooperation with our partners and dealers and the wholesalers, it is the way to improve the brand awareness and improve the consumer pool. We do advertising with them in the areas where they are present. We do product training and so forth. All the usual marketing activities. I think that the key is that we take care of our dealers, and then they want to work with us and achieve the common and, let's say, the mutual targets that we have. Thank you. The same question has been asked for Central Europe as well. Bahri, how are you increasing consumer awareness in Central Europe? Yeah. Thank you very much. Very good question. I think here, first of all, we need to differentiate in which markets we are looking at. Like in Eastern Europe, we do have already very strong brand awareness, and that's why our market share overall is already pretty high and significant. Now if we move into new markets like in Western and Southern Europe, I think we will work intensively with our partners there, with existing, but as well with new partners because they know the best, their consumers, but as well the shoppers. Co-marketing will be very key and sellout activations in store. Because we need to make sure, in new markets, like if we expand our distribution, that consumers have the opportunity to try our products. That's the most important thing. Try, because then we are convinced that they will stay. There is another concept that we have just introduced. This is the two-year tire guarantee. With this, we are going to build up the credibility. Because we are convinced of our products, if they try, they will stay. Last but not least, and our NAD concept that we are putting our efforts in as well, and we want to expand that in line with our growth opportunities. All this together will make sure that our brand awareness steadily will improve. Thank you, Bahri. Next question is to Andrei and about Russia. Andrei, how has the competitive landscape changed in Russia over the last two years? Thank you for the question. Actually, I should say that not only competitive landscape has changed, but the whole market situation has changed quite dramatically. As to our core competitors, I should say that as far as we know, all of them continue their normal operations in Russia. Many importers that rely on importing tires to Russia, especially from Asia and especially from China, have clearly cut their supply to Russia last year and this year. This is partly driven by the weak ruble and then also reinforced by huge increase in the container transportation costs, which represent a very high share now of the total landed cost for these imported products when imported from China, for example. That resulted in a situation that for example, the Chinese players, which used to account for close to 10% of the total replacement tire market in Russia all but disappeared. That drove, I should say, the severest shortage of tires in the Russian market and also driven the consumer demand up in terms of segments from C to B and from B to A. Of course, that changed the market situation dramatically. I should mention also that one impact of this change is that the financial standing of our distributors has improved significantly because in this situation, they are able to earn better margins than before. Thank you. Let's continue with Russia. Andrei, how can you increase ASP, average sales price, in Russia? Thank you, Päivi. I have been talking already about smart price positioning, I will not repeat myself with that. I should say that we are monitoring, of course, the competitive situation very closely and also our own cost development. The increase of raw material costs is not a surprise to anyone anymore. We are taking that into account when making our pricing decisions. I can say that we are targeting to fully cover the increases in material costs in the future. As to the current year, actually, we are doing that already. If you look at our average price, despite the fact that summer tires now this year in the first half of the year accounted for clearly higher share of our reported sales in Russia. Despite that fact, our average selling price in Russia increased by a double-digit percentage. We continue to work closely with product mix and price increases to improve our profitability. Thank you. Let's take a question about heavy tires. Manu, can you quantify the long-term opportunity you see in heavy tire digitalization, or elaborate on how much you expect this specific driver to contribute to the 10% CAGR target? Thanks, Päivi. Good question. Digitalization, as I said in my presentation, it's already here and it will be in the future even more. How much it will contribute about that 10%, it is going to grow that contribution. It's part of the whole package between a tire, the product, and the service. The information, what we can get via this digitalization, that's the most important thing. The benefit for the user and for us comes by using that digital information. So it's not alone, it's the part of the product, service, and utilization of the tire, and that's growing. There's another question, Manu, about heavy tires and the products. "What kind of new products are you considering developing, and where is the greatest demand? We are developing new products for all those segments where we are present at the moment. The biggest growth we are seeing in agriculture business. We are strong already, for example, in forestry, market leader there. Agriculture is the place where we will grow. There, the products for high horsepower tractors, which are extremely demanding. It will be the new technologies, which really means better traction, better fuel economy, rolling resistance, and those road properties. That's where we want to be strong. Thank you. There is the question about China and Japan. We did not cover China and Japan this time in this Capital Markets Day, as we wanted to concentrate on those areas which have the biggest impact on the EUR 2 billion revenue target. Andrei, could you open up a little bit, what is the Nokian Tyres strategy in China and Japan? Yes, thank you for the question. The roots of Nokian Tyres are in winter tires. Our strategy includes to be present and build tangible market presence in all those markets where winter tires are sold. There are not so many outside of our core markets which are not fully covered yet. In this sense, both Japan and China represent a good opportunity for us. With that in mind, we entered China a few years ago and Japan three years ago. First with winter tires, gradually expanding our product range in those markets also to cover other product categories. Japan, for example, is the third biggest winter tire market in the world, it's obvious that it is of interest to us. We have already managed to establish a really premium, high-end positioning in that market, although of course it's difficult to penetrate and the volumes develop relatively slow, but I think we are on good track. As to China, it's a smaller winter tire market, but it also exists and we also built presence there already. Now we are looking at different business models to take a next step in our business development in China. In a nutshell, I should say that both Japan and China represent an opportunity for us, a foundation for future growth, which goes beyond the current midterm period of three to five years. Thank you. Thank you. The next question is for Teemu and maybe also for you, Jukka. "The market share gain targets seem to go hand in hand with higher marketing and distribution costs. Will you see the cost coming in early and ahead of the volumes, i.e. margins should be diluted before hitting the midterm target, or will it be going up step by step? If I start and then please continue. How I see it, that it is always a balance and it varies by market. Our aim is to have a balanced approach in line with the financial targets. We don't see major upfront investment that dilute our profitability targets. I would say the same, I think that it's important, of course, that we do the work, foundation work, that we help our teams to achieve higher market share. It's about investing in brand strengthening or digital tools and similar. Nevertheless, I believe also that we can achieve a balanced development so that there's no significant cost spike or anything like that that you would experience. Revenue development will go hand in hand with the cost. The same comment goes both for passenger car tires and heavy tires. I would say so, yeah. Yes. There's a follow-up question. "What pricing assumption is the margin target based on? I think the main driver is naturally the cost inflation together with the market dynamics in the markets that we are present. As I stated in my presentation, we are expecting to have also clear increase in input cost in 2022. Maybe at this stage, roughly on a level of 14 might be the good proxy that we then will be more precise towards the year end. I think it's also just to complement and talk more about the pricing, that new products, of course, give an opportunity that whenever we launch a new product, that gives an opportunity to have a new price point. As Andrei was talking about Russian pricing, for example, that the new product is at the high level, and then we have a number of products that are lining up behind that, and that allows that pricing differentiation. I believe that is an important driver of the pricing opportunities, the launch of new product. Of course, they have to be good, and they have to be successful in the eyes of the consumer. That is something that we believe in, and that's what we aim to do. Thank you. Back to Central Europe. Bahri, w hat percentage of sales are being made online in Central Europe, and is there much country variation across Central Europe? Indeed, the market is very diverse, whether you come from Portugal up to Ukraine or from Denmark to Italy, and so it does with our online sales in general. Overall, we can say that we do around 10% directly with our online retailers. However, our customers can place at any time the products to marketplace or in other kind of places, so they are free to do that. What we're selling is around 10%, but of course, this varies from market to market, and it can go up to 40%, like in Eastern Europe, and then be actually much lower than 10% in southern markets like Spain and Italy. Let's continue with Central Europe. Bahri, you talk about expanding the NAD network. What is the optimal scale for this network, and how much will that cost? There is nothing where we can say is in that sense optimal. We have a growth strategy in place. We know how much we want to grow, and within that it plays a vital role. It is in line with the overall growth target that we have, and that's why the overall investments are already implemented into our long-term strategy. This does not come in on top. As I said, it has been already implemented in the plan, and it is for the future as well. Looking at this kind of increase of the amount of outlets by around up to between 8%-12%, depending on the market and the opportunity. Thank you. I have a question for Jukka. Are Vianor and Heavy Tyres long-term key to your growth strategy? Could you not achieve higher valuations for these businesses by spinning them off? I think that they are highly synergistic to our growth target, but also Vianor, for example, plays an important role in our Nordic market penetration as well as the Vianor franchise chain in Russia is equally important, and also Heavy Tyres in terms of Nokian factory in sourcing and many other benefits that the synergistic totality is important to us. Can we achieve higher valuation? I don't think so because then we would be a much smaller company, and then we would have cost penalties of not having Vianor or not having Heavy Tyres and not using the synergies of those inside the company. The answer is that no, I believe strongly that we have a higher valuation when they are included. We can continue with the same topic because there is a similar kind of a question which is for Anna. What is the long-term role of Vianor in the Nordics, and how integral is it really to your success in the Nordics? We talk about one Nordics, it is very integral. I mentioned that we distribute one third of the tires sold in the Nordics via Vianor network. As Vianor is not only selling tires, but it's also providing services related to the tires and car services related to any kind of cars. We are building customer lock-in through those services, it is very important for us and as Jukka was saying that it is there to stay. Thank you. The next question is for Andrei about Russia. Thank you for providing your targets on Russian tire market. Could you please provide some color on key underlying assumptions for the optimistic targets? Understand your assumption for new car sales growth is lower than the growth in the tire market. Yes, indeed. If we compare the expected growth rates for new car sales and for the total tire market, we expect higher growth for the tire market because with every year, the number of cars on the road, the overall car fleet in Russia increases also during the years of relatively low new car sales. That represents higher replacement demand for tires, both summer and winter tires. This is why with every year, the share of replacement demand is slightly higher than the contribution of the new car sales. The underlying assumptions for both are quite conservative economic growth. There are no reasons to believe in very rapid GDP growth in Russia for the next years. It is expected to remain slightly positive. Of course, as always, quite a lot of things depends on, for example, the global oil price, and so on. As to tire market situation, and specifically looking at the current year's growth in the market, there have been quite many structural changes in the consumer consumption, including, for example, a huge boost of domestic travel, which has been driven by restrictions in international travel. Many people chose to travel domestically instead using their cars, and that is one of the factors which keeps up demand for replacement tires. Thank you. The next question is about Nordics. Anna, how do you see competition developing in the Nordics? The competition in Nordics is they are very competent. They have extremely good products. We want to be better. What it means that we want to be better, it means that we want to be better in everything we do. In products, in the services that we deliver. Maybe to mention from the services side, the availability for the products, and then, of course, we already discussed Vianor network. Thank you. The next question is for Teemu and/or Jukka. How conservative are your midterm targets for group returns? Limited CapEx would imply a higher return on capital employed than margin midterm if sustained. If we start with the return on capital employed, as we stated in my presentation, this asset velocity is one key function in order to reach the return on capital employed. As you saw in my slide, there was a clear dip in 2020 because of the lower net sales and the ending of our investment phases. Now, when we are focusing on our working capital rotation and have optimized capital outlay for the business, in connection with the increasing net sales, we feel that we are able to reach the return on capital employed. Building on that, I believe that also when the investment level is relatively modest compared to what we have done in the past years. It's clearly possible that our free cash flow is quite strong in coming years. When we drive it into the future, so growing the top line is quite important so that we get the benefit of the investment we have made. If you then compare to, say, that last 12-month rolling that where are we, so we are in EUR 1.52 billion in sales. We want to develop about up to EUR 500 million of new sales in order to hit our EUR 2 billion target. That's quite a demanding target. At the same time, our segment operating profit in the last 12 months is about 19%, and our return on capital employed is about 14%. Clearly the stretch is in the return on capital employed and in driving the net sales. If we can overachieve any of these targets, we gladly do so, and we surely aim to, based on our spirit and based on our purpose also, that it's part of our purpose and part of our history that we exceed the expectations, and this is of course what we aim to do. Let's start with these targets and then drive it into the immediate midterm future. Thank you. Thank you. Now I have quite a long list of questions for Bahri about Central Europe. Your Central Europe revenue grew at a 2% CAGR between 2014 and 2019. What gives you confidence over the next five years you will be able to grow by 50%? Which elements of your new strategy will be the main contributors to this acceleration in growth? The good thing is, maybe you have seen this actually during the presentation as well, we are already on track. We have seen this growth despite COVID over the last two years that we have growing significantly. The good thing is that the strategy that we have in place, and we are confident that it's really working. It is kind of proven now. That's why we are continuing to strengthen that. The key building blocks for this that makes us so confident is actually, first of all, our products, including our R&D support, but as well with the test center. That will create another round of new products in the near future, and that will definitely help us. Then the second thing is we are growing into new markets where we haven't been yet, so that comes really on top. To new channels as well, where we haven't been exploring so far. All of this together, we have really room to grow over proportionately. Last but not least, we will increase our overall marketing investments to drive brand awareness, but really to link to the consumer activation and sell out in the stores. I think with this package, as we have proven in the last two years, we are able to grow faster than the market. There are follow-up questions on this. Why do you expect above group average gross margin in Central Europe if growth will be driven by all season and/or summer tires in the midterm? There's a question: How do you strengthen distribution in new markets where you are less established? Does growing new distribution networks involve discounting your product in the near term? Maybe I come to the first point. It was, I think, about pricing and ASP pricing. I think important there is to look on an apples-to-apples comparison, like winter-to-winter, summer-to-summer, all season to all season. Here, of course, first of all, it's the product mix, which products you are selling. We are, as we have shown, the higher ASPs is in the growing bigger rim sizes segment. That's where we have been successful. Again, there, we are growing much faster than the market and where the ASPs are much higher. In everything that we do, we are going into the higher value segments of the market. I think that's the key thing. At the same time, when we go into all season, as we have shown as well, it was not at the expense of our existing business in our stronghold winter. That came on top. Looking ahead, yes, we will grow more in all season, in summer as well, but we are growing in winter. The market shares will go up everywhere. The next question was how do you strengthen distribution in new markets where we are less established? We are talking more about the Western and the Southern markets. Here you do that, first of all, with the right partners. You get very close to the partner selection and with them, because they know the markets very well, and together we can establish actually very strong collaborations in order to expand our distribution. This is the first thing. The other thing is to have the right product. Now with having the test center in Spain, we have a capability now in the region to build up the right product. If you have the right product, customers will rely on you, and then it will go into the store if we support that and people try that. Steadily with this all together and with the marketing campaigns, you further increase your penetration of the market. Most importantly, I think what we always did in the past, we are very strong in customer collaboration. I think that is our strength. The last point is, as we have just mentioned before, is our NAD concept. This is another kind of a collaboration with existing partners to showcase our product, but at the same time to help them as well to support our products, but as well to support their sell-out. If we both make money, if you make money and our customers make money, then I think everything will come together. Does growing new distribution networks involve discounting your product in the near term? I hope not. Definitely not from our side. Not at all actually. It's the other way around. I would say, again, I'm coming back to R&D facilities and the test centers. I think our aim is to get even better products each time when we launch them and to position them each time at the premium segment. We are a premium brand, and that's how we want to position ourselves. Specifically when you go into new markets, then you need to position yourself on the right level. It's not about discounting, it's really about premium. This will be very consistent wherever we go. Thank you. Jukka or Teemu, about segment EBIT versus reported EBIT. Can we assume it's the same number when you reach EUR 2 billion sales if the U.S. ramp-up is done? As we have communicated that when we reach the level of 3 million tires in Dayton, then we are on a level where we shouldn't have any exclusions in our EBIT, reported EBIT. That's the key thing, and hopefully that happens before we reach EUR 2 billion net sales. Yeah. It is more linked to capacity or output in Dayton than the top line at the group level. Within this horizon, three to five years, our expectation is that segment operating profit and EBIT will be the same. Jukka, there is a question about the challenges that Nokian Tyres may have. What are the biggest challenges to achieving the growth target of EUR 2 billion? I think one of the biggest challenges surely is that we have the right products so that we are able to launch successful products. Whether we have Hakkapeliitta 10, or we have all season, or we have summer tires, or in North America, the launches. I think that this is the key, because then essentially we have the capability to manufacture them, and we have a distribution network, and we are building that. Inside that, the heart and the core is that those products are successful and valued by our distribution and our consumers. Surely is the key to achieve. Good. Teemu, are you willing to share midterm margin targets for passenger car tires, heavy tires, and Vianor separately? We have been communicating on a group level, and we feel that that is a good practice, at least for the time being. I have a question for Manu about heavy tires. You talk about building capacity. What will that entail and how much is the investment? The investment is roughly EUR 70 million. It has partly spent already as we have proceeded with the project very well during the years since 2018. I mentioned already that we have built new curing lines, ready-made tires, automatic handling robots, visual inspection places, also compound building. Next phases will be new tire-building machines for radial tires. That will happen this year and next year mainly. We will get a lot of more productivity and efficiency to our factory. Thank you. There is the question about the financial targets and the margin target. Can you confirm the 20% margin target is not lower profitability in existing segments, but rather a mix change due to increasing proportion of summer tires and all-season tires in North America? Can you confirm that this product mix shift is not going to be return on capital employed dilutive, i.e., the 20% target is in line with past average return on capital employed? If I start with the formula, the return on capital employed, it is calculated with the method that we have been using in the past. We are by no means changing how we calculate that. In terms of the impact between the product mix and the factory mix, as I stated in my presentation, when comparing these two graphs, the bigger impact of the change is coming through factory mix than through product mix, which is in line with the communication already in our Capital Markets Day in 2018. In that respect, no change of our outlook or communication. Thank you. The next question is about the profitability again. Consensus expectations for 2021 are for approximately 18% margin. The question goes: I have understood this includes drag from Dayton, lagging raw materials, and logistics challenges. Are not these two effects greater than a 2% margin drag? Therefore, could not margin be higher than 20% once these effects unwind? I think that, again, commenting the consensus is slightly difficult, but perhaps let's say it this way, that we are looking at the margin target and we believe that going ahead this is something that is achievable. Of course, there's also an opportunity to overachieve, but that opportunity comes when we go along and see that how things will develop. We are, of course, a company that delivers high results, and it's part of our value that we want to deliver high results. When we achieve higher or can achieve higher, we surely will do. Commenting consensus, I would not want to do that. The next question goes to Manu again about heavy tires. What makes you confident of winning market share from other players in heavy tires? Two things. Mainly it's a product and a service. We are working close to the customer and delivering what customers are expecting. The products, they need to be excellent of course. This is always expected. Among that the tractor tires are really good, behaving well, or any other segments what we are producing, we need to have the best service, best availability, best cost per hour result. That's what really means to the customer, and we are working a bit differently than our competitors in some meanings. Our customers know that, and I'm confident and willing to continue that way also in the future. That's how we will success. Thank you. A question about U.S. to Anna. U.S. is a very competitive market with well-established players, including on the distribution side. Could you give us more color on your planned marketing efforts and the associated costs we should have in mind? Well, firstly, we don't spend as much money as the bigger competitors are doing. Referring back to my comment earlier regarding the cooperation with our partners, with the wholesalers and dealers, we go to market with them and we do the marketing efforts with them towards the consumers, but also for example, product training for the wholesalers and dealers. That is something that we do together. As I mentioned earlier, it's not enough to have, of course, wholesalers just there, but we also need to have a very strong own sales team, and this is how we will build the presence and we will build the brand awareness. Another question about the U.S. or North America on the product mix. What should we assume between winter, all season, and summer for Nokian Tyres in the midterm? The summer for us is basically nonexistent there. We are selling winter and all-season. We will grow in all-season. The winter market is pretty stable. The growth there is not that big as it is in the all-season side. We want to grow, we want to be strong in the winter, of course, but we will grow mainly in the all-season. Thank you. Teemu, what are the cost implications of implementing your new non-financial targets? How we have approached this is that it is part of our ongoing activities. We should do that in any way. We don't see that as an extra cost. It's part of our ongoing operations. Let's continue with cost. This has been already discussed with Anna's answers and Bahri. It's about marketing spend. How much is your marketing spend, and are you planning to increase that? If I listen to my colleagues, everybody has been commenting, investing in digital and in marketing and point of sales. I think that is always the discussion, how we allocate between different elements. For sure, there might be some slight increases, but they are in line with our overall financial targets. As I also stated in my presentation that these financial targets guide our operations and decision making in the coming years. I think it's also when we think about the past, we've invested quite a bit in the plants and equipment and so on. Now when we go into expanding marketing, part of that is strategic spend, part of that is tactical spend. Of course you can then regulate the spend that strategic programs and information technology investments and so on are important and strategic. At the same time, of course, you have a part of the tactical spend that how do you ensure that the sell-out and various programs take place and so on. There's 2 elements in that. Yes, of course we want to make sure that we achieve, go towards the EUR 2 billion net sales. Thank you. There is the question about working capital drivers. Where do you see the improvements coming from, and how much improvement is possible? Naturally, the components are the normal ones, the trade payables, inventory, and receivables. The receivable part is in connection with our business models. Currently, one main driver there is our business model in Russia that has been working well so far. In other markets, we always need to pay attention what are the terms and conditions when we work with our customers, and there we need to find the balance to reach the top line and also the working capital part of relating to that. Inventory levels, there it is also going hand in hand with our business models that we are developing, but maybe the easiest part that we can impact also already short term is the trade payables, and there we have taken already actions to improve that. I would say more to come. Thank you. There is a question about our production units. Can you quantify your production units in 2021 in million units? I think the year is still ongoing, so I think that that would be then something that when we achieve the end of the year, we quantify. Essentially, the capacity mentioned that up to 17 million in Russia, up to 5 million in Nokia. As we said, the shifts will go in Nokia the latter half. Then we have also third and fourth shift in Dayton. As we said, the run rate expected to be 1 million tires. To be specific, I think we need to let the year run till the end, and then we know and can tell how it went. Exactly. Teemu, in the press release, which we published yesterday, we mentioned improving operational efficiency. What do you mean by that and in which areas? Maybe I can also refer to Manu's presentation about the Lean. I think Lean is a good example that we want to improve in everything what we do, starting from production and also going to the Vianor side. For example, in Vianor, we have made some good learnings during the COVID time that we are continuing and building on also in the future. Maybe another element is that there was a question in the previous session about that. Can we also consider that we can increase the capacity in Russia from 17 million higher, and why do we do this up to 5 million in Nokia? Part of that is a productivity improvement that's part of the Lean. Some of that is related to de-bottlenecking investments and efficiency improvements and things like that. This is a normal part of the manufacturing company, and we will intensify these efforts in many ways to help ourselves in order to have a more efficiency, lower cost, and also opening up capacity. Right. I have a question about Central Europe again, Bahri. What single initiative was the most influential in achieving the market share gain in 2021? Actually, we had many. If you ask me about a single one, then I would definitely point out the all-season development. We basically doubled our business over the last two years despite COVID. That put really us on a different kind of positioning. That was the overall support for the overall market share gains. At the same time, as I said before, and I think this is very important, it was not of the expense of the other categories. We were growing winter tires and even a little bit into the summer business as well. Yeah, so all season. That's one of the biggest supporters of our market share gains. I would have another question for Bahri about Central Europe. Could you elaborate on the pilot in the fleet business? What are you doing, and what would you like to achieve? I don't know if my listeners are aware about this market. This fleet business is really growing, and if we look into the future, changes in consumer behavior as well, like instead of owning more like leasing cars, or especially changing in the mobility, this business is growing, and it will even further grow in the next four or five years. It will really accelerate. There are many studies about that. This is the first thing. This is going to that one. The second thing is, today already in Germany, 60% of all new cars, between 50% to 60%, are actually leased cars, corporate cars, and 20% of the tire market is coming from fleet. I think you cannot neglect that. Our objective is to study this business, and that's why we are piloting it. To study this business, what is the right angle for us to enter? As we are a premium brand and premium products, we will look into that, how it can work out for us. This is actually our objective. If it works out, we will continue and further expand. I would say piloting means really learning and to the right steps. I think going forward, you cannot neglect. Thank you. About the financial targets again. You put a clear accent on the fact that your key target midterm is EUR 2 billion of revenues. Does it imply you are prepared to compromise to some extent on returns if needed to reach this sales ambition? I can start. Obviously, we see an opportunity to drive the top line into EUR 2 billion. It's based on the fact that we made a number of actions in terms of investments and also launching new products and expanding our sales network and so on. We are not looking to compromise in margin targets. We are not looking to compromise in return targets. We expect that we can improve our operational efficiency, we can launch the new products at the right price points, and we are not sacrificing our existing products, their margins. That's why we have an ambition that is three to five years midterm. We want to work on a balanced way to achieve that. We know that ramping up a new factory, for example, as Teemu was saying, that it is something that you have to accept that there is steps which are not as lucrative in Dayton as they are in Russia. If you could do all the same products in Russia and not in Dayton, then you would have a different margin profile. We believe that it's very important that we have a balanced manufacturing structure, and we actually have Russia, we have Finland, we have North America. EUR 2 billion allows that full known capacity usage that we have right now allows that. If I build on that for the obvious reasons, we emphasize also the word balance all the time. It's not either/or. It's a combination of these that we need to manage as prudent leaders of this business. Why we say that we emphasize EUR 2 billion is simply that many of the actions we've taken in the past are basically building that capability to achieve that sales growth. Now it's about time to deliver. Not only in passenger car tires, but also in Heavy Tyres. All those actions are actually ready or almost ready, and now we need to deliver. I think it's a great opportunity, a great position. Let's deliver. There is a question about the share buybacks. Share buybacks make sense for the owner if the share price is attractive. Do you have criteria for share buyback price level? For sure. We are not being that specific in our open communication and as we prioritize the capital allocation principles, that is the last option in our toolbox. I think it's premature to comment that any further. I believe that the comment is quite right, and of course, we follow the professional practice even when we go into share buybacks that we would then apply these financial guidelines and best practices in that. Going to raw material prices, how are raw material price increases or inflation affecting the business in 2021? As we have been commenting, the overall raw material price increase for the full year will be roughly on a level of 13%-14%. In the first half, we saw a positive development for certain reasons, and the heavy headwind is coming in the second half on a level of 25%. The aggregate impact for the full year is on a level of 13%. Therefore, we have been doing the smart pricing already since the beginning of this year, and we continue to focus on that beyond 2021. Thank you. There is a question about the role of the Finnish factory. What is the role of the Finnish factory going forward? Previously, you have indicated that it would focus on heavy tires, now you are instead going to increase capacity to 5 million passenger car tires in Finland. I can start, and Manu can continue. Yes. Let's do so. Obviously, heavy tires is an ongoing investment, and we want to increase the share of heavy tires and expand to heavy tire revenue by 50% to EUR 300 million. Now, at the same time, the recovery and the market has provided us an opportunity to make more passenger car tires in Nokia. We obviously are pleased about that, and therefore we also wanted to increase shifts in Nokia and also make sure that the productivity gains and opportunities to increase the production to 5 million is there because the market and our success allows that. Manu, please continue. Yeah. Of course, heavy tires has a big role in Nokian Tyres. We are growing that production even further. At the same time, we have a good technology for passenger car tires in Nokia site. We have professional employees there. We have the know-how. It's, I would say from some point of view, even easy to develop that factory and that production to be efficient and productive and really improve the availability of our group. Nokia is the right place from that point of view to develop the business there. We have uncovered productivity gain opportunities when we looked at where can we find more volume and more production capability. We also will do exactly the same in Russia, that we will see how we can expand the production in Russia because we all understand that Russia is highly efficient, and if we get more tires out of Russia, we will obviously and definitely do that. When we have the productivity gains and opportunities in Nokia, both things can happen simultaneously, and that helps us to be a stronger and larger company. This is an opportunity the market has given us, and we are happy about that. Good. A question about gross margins. Considering that you expect the share of all-season tires to increase significantly, doesn't this imply that Nokian Tyres gross margin will weaken in the coming years? Or can you mitigate this with better gross margins in other categories? As I have been discussing with you investors in the past years, the product mix will have a headwind impact on our gross margin on a like-for-like basis. Having said that, how we are developing the product offering, focusing to the bigger rim sizes and EVs, that should partly offset the headwind. Just repeating myself, the biggest headwind in gross margin development is coming from the factory mix, not from the product mix. We continue with currencies. Talking about currencies, especially the ruble and their impact, do you have any ways to hedge the currency impact at least partially? We have been in the past hedging the equity part. As you know, the cost for hedging Russian ruble is at least as costly as the benefit, so therefore we haven't hedged the Russian ruble in many, many years. The cost of hedging is significant. There is a question about the bigger rim sizes. Can you talk about the share of bigger rim size tires in the passenger car tire business today, and how do you expect this to evolve over the medium term? Maybe if you take market by market, a quick comment, so Andrei, Bahri, and Anna. Let's do so. Let's start from Anna. The share of bigger rim sizes, of course, will grow together with the vehicle development. It is very visible and that's the way we go. We continue with Bahri in Central Europe. How do you expect that to develop? Sorry, just a problem with my connection, so I hope you can hear me. I think in Europe it's the same. Today, approximately in the region of 35% of the market is already in the bigger rim sizes, which is huge. Wherever you go, whether Portugal or Ukraine, on average, on each market, the bigger rim sizes are increasing. Today there is actually no limit to that. It continues to rise. Therefore, it will be actually further accelerated with electrical vehicles. They need bigger rim sizes, in general, bigger tires. That's actually a very positive development for the overall ASPs, but as well for the overall profitability going forward. Andrei. Yes. I would say that the same trend also exists in Russia, although the starting point for the Russian market is a little bit lower because the car parc tends to be smaller vehicles and smaller rim sizes compared to Europe or especially North America. The trend is clearly there. To illustrate that, I could mention, for example, the fact that in the new car sales over the first seven months of 2021, the current year, the share of SUV and crossover cars in Russia has been 45% of the total new car sales. It's increasing year by year. That's a clear trend, but it will take some years to fully materialize. Thank you. We still have time for one final question that goes to Jukka. What are your biggest competitive advantages in comparison to your peers that you will utilize to grow faster than the market? I think that compared to our peers, we have to go back to our heritage, of course, that we are coming from the winter tire country, and we have unrivaled offering in winter tires. Based on that, we have a premium quality and standards. I think that we've been able to expand from that base is our know-how into new categories and new tires in various markets. I think that that heritage is still quite a strong starting point. Look at from the manufacturing point of view, we have one of the best factories in the world in Russia, and we have a strong heavy tires know-how in Nokia. Obviously we are building based on those then capability in North America. If you look at then the long horizon, we have a strong team. We have a strong culture. We have strong values, and we have a culture to focus on delivering high results. I think that in combining where we come from, what we have in our hands, what is the opportunity and the team and the culture, that makes us unique and special. We need to protect that, and we need to safeguard that we keep on delivering on those parameters. The single biggest thing is our heritage, our starting point, and how we have applied that to expand. Thank you, Jukka. Thank you. Now, this Capital Markets Day is starting to be at its end. I want to thank all the participants. I want to thank all the speakers here in Helsinki, and I want to thank Bahri in Prague and Andrei in Russia. To finish, Jukka, any closing remarks from you? Thank you, Päivi. On my behalf, I want to thank, first of all, our audience, all of you who've been together with us today, our team, our customers, and most importantly, I hope that this has helped you to understand where we are coming from and what is important for us. The important is that we sell more tires, we achieve high profitability, we deliver good results. With that, I believe that it ought to be very clear what we are set to do. Thank you. Thank you.