Good afternoon from Helsinki, and welcome to Nokian Tyres Q1 Results Conference Call. My name is Päivi Antola, and I'm the Head of Investor Relations in Nokian Tyres. Together with me in the call, I have Jukka Moisio, the President and CEO, and Teemu Kangas-Kärki, the CFO. As usual, we will start the call with a brief introduction into the results, and that will be then followed by a Q&A. Jukka, please go ahead. Thank you, Päivi, and welcome on my behalf as well. I move directly to page two on the presentation, heading says, "Net Sales and Operating Profit Increased Significantly." Our net sales was in the first quarter, EUR 341.8 million. That's a 28.5% increase in comparable currencies. All-time high first quarter volumes in Passenger Car Tyres, as well as in Heavy Tyres. We also saw that the demand recovered in all markets. Most important recovery was in Russia, and then weakest recovery in terms of percentages was in Nordics, which was a single digit. All the other markets, with the exception of Nordics, recovered and grew by double-digit numbers. Important to mention that Heavy Tyres achieved all-time high quarterly net sales and segment operating profit in the first quarter. Segment operating profit was EUR 50.3 million, versus EUR 16.3 million a year ago. Most important factor to improve the profitability was increased volume. We also recorded a negative impact on currencies, which was in about EUR 10 million negative impact. I move to page two, and some of the highlights in the financial key numbers. Starting with the capital expenditure, EUR 17.1 million in the quarter versus EUR 50.9 million a year ago. You may remember that a year ago, we still had the investment in Dayton factory, as well as a significant part of the investment in Spanish test track going on in 2020, while these items were pretty much completed by the end of 2020. Small items related to Spanish test track was recorded in Q1 2021. Net debt at the end of March was EUR 31 million versus EUR 121 million a year ago, and cash flow from operating activities, not including the investments, was EUR -24 million in 2021 and EUR 39 million in 2020. In addition, the operating profit percentage was 14.7%, and that compares strongly versus 2020 segment operating profit at 5.8%, and segment EPS was EUR 0.29 versus EUR 0.09 a year ago. Gearing is 1.9%, and our balance sheet remains strong as we mentioned in the heading of the slides. Now I hand over to Teemu Kangas-Kärki to talk about the business area performance. Teemu, please go ahead. Thank you, Jukka. Let's start with the Passenger Car Tyres business unit. Our net sales reached a level of EUR 246 million. Our segment operating profit was on a level of EUR 53 million. Net sales increased in all main markets, led by strong volume growth in Russia. Our average sales price declined. The main reasons behind that is naturally the weak Russian ruble that we have been highlighting in our previous calls, as well as the high share of volume in Russia and the strong summer and all-season tire sales from the product mix point of view. As we have communicated, we have started the recruitment in Finland and in U.S. in order to increase the production in those two locations. Moving to the Passenger Car Tyres net sales breakdown. Here we can see that the volume was up close to 40%. Our price mix was negative about 1%, as I have been commenting in the previous calls, in the price mix, we have also the country mix impact, and because of high share of Russia, the impact of that is about -3% negative in the first quarter. The currency impact or the headwind was about 9%, and here we can see the weaker ruble starting to impact our numbers in the second half of last year. In the first quarter this year, we also got headwind from USD and Canadian dollar, among others. Moving to our net sales and segment operating profit in euros. Here we can see that in euro terms, the net sales headwind from currency was about EUR 18 million, and in the segment operating profit, it was on a level of EUR 10 million as anticipated in the previous call at the Q4. The biggest contributor to profit improvement is naturally the sales volume up by EUR 35 million. Here we can see also the positive development in materials for the first quarter. As we have been estimating, we will have a headwind from the raw materials for the full year, meaning that in the second half, the impact is significant. Currently, our estimate for the headwind for the full year is about close to 9%. Moving to Heavy Tyres. Excellent start for the year. All-time high net sales and segment operating profit. Net sales was on a level of EUR 57 million, and the segment operating profit close to EUR 13 million with good profitability. The demand was strong in agriculture segment as well as in mining and truck tyres. We had some softness in the forestry segment because of their issues in their production. The profitability was positively impacted by the improved productivity that we have been doing in the factory and that paid off in the first quarter. Generally, the inventories are at a low level at the moment. Moving to the last business unit, which is the Vianor. They had also a good performance in the first quarter, which is seasonally low. Looking at the net sales growth on reported numbers, 6.8% growth, and the segment operating profit or loss close to minus EUR 10 million improvement in the operating profit due to the fact that we have been able to manage our cost really well. That is something that we have learned from the COVID times, that we can improve the cost levels really well also in the coming quarters and years to come. With that, I will hand over back to you, Jukka. Thank you, Teemu. I'll recap some of the priorities for coming quarters. I think that it's clear that driving growth and recovery, benefiting from the recovery is quite important. We have new product launches. Those will help. The most important one we discussed already in February Full Year 2020 Result Presentation is, of course, Hakkapeliitta 10, which will be coming to market for the latter part of 2021. Many other product launches are also happening and in the pipeline. Protecting cash flow, prioritizing investments is another important topic is, as we indicated in our guidance, the CapEx expected to be lower than 2020 in 2021 and in the first quarter clearly lower. Of course, the reason there is that a year ago, 2020, we still had important investments in Dayton and Spanish test track taking place. Brand expertise enhanced production capacity, more shifts and so on, help us to capture the volume of the recovery in coming months and quarters. Some of the assumptions for 2021 guidance, we expect that the demand for replacement car tires is expected to increase and stronger demand, but also increase in new car sales as the year goes along. Demand for Nokian Heavy Tyres core products is estimated to increase. Uncertainties are related to COVID pandemic and also crash into ruble. Just to recap the value of ruble, euro-ruble exchange rate. In 2019, we had RUB 72.5, 1 EUR. In 2020, RUB 82.7 and RUB 90.6 in January 2021, and RUB 89.7, 1 EUR in January to March 2021. A visible difference in the exchange rate and weakening of the ruble between 2019 to January, March 2021. As Teemu was saying, raw material unit costs are estimated to increase and have a significant impact on the second half. Based on that, of course, there are price increases in implementation. Guidance for 2021 is unchanged. We expect that net sales with comparable currency segment operating profit are expected to grow significantly. Our car tire demand is expected to pick up, but COVID will continue to cause uncertainties for the development. Our guidance for 2021 is unchanged after the first quarter. This is the end of our prepared presentation part, and I'll hand over back to Päivi, and we go into questions. Thank you, Jukka. Thank you, Teemu. Now operator, we would be ready for questions from the audience, please. Thank you. If you wish to ask an audio question, please press zero one on your telephone key. If you wish to withdraw from your question, you may do so by pressing zero two to cancel. Once again, please press zero one on your telephone keypad if you wish to ask an audio question. Our first question comes from Akshat Kacker from JP Morgan. Please go ahead. Thank you. Akshat from JP Morgan, t hree from my side, please. The first one in production capacity. With the strong recovery that you're now seeing in the global markets and also in the U.S., is there a case to ramp up U.S. capacity quicker than what was earlier planned? Just trying to understand if there is some restriction in terms of the units that you can produce going forward. Are you also planning to increase production capacity in Russia? That's the first one. The second one is on the winter tire share. Obviously in Q1, you had a disproportionately high summer tire sales in Russia. Given the low winter tire inventories in the channel and the new product launch in the fall, should we expect a winter share higher in 2021 versus 2020? The last one is on the U.S. Dayton ramp-up cost. They came in lower in the first quarter year-over-year. Just interested in hearing your thoughts for the full year in terms of total ramp-up cost. Thank you. Thank you. The capacity availability and ramp up. Yes, first of all, we do as quick as we can in terms of adding shifts and so on. Obviously, if we can do it faster and have a high quality, we'll do it, because obviously there's a case that demand is good and the recovery is good. In terms of Russia, capacity was in full use, in latter part of the year and also in latter part of 2020 and also right now. We look if there are any opportunities to debottleneck and so on, but there's no immediate relief in that. That's why we've added shift in Nokia, and that's why we can flex the capacity if needed more in Nokia. These decisions have not been made. The case for North America is understood, and we do as quickly as we can, but it's important to maintain the quality as well. Winter share, yes, indeed, the proportionately high summer tires in the first quarter, and just probably historical in the sense that this is the highest share of summer tires we've ever had. Therefore, clearly reflects the demand. Yes, the winter tire, we hope that the Hakkapeliitta, and we are convinced that Hakkapeliitta 10 will do well, but that remains to be seen in the latter part of 2021. Our expectation is that it's a great tire and it performs well. And the last question was? The last question was related to? Dayton ramp-up cost for the full year versus last year. Full year, yeah, ramp-up cost of Dayton, full year expectation. We are going slightly above the original thinking earlier because now we are ramping up a bit faster than a year ago we estimated. We are recruiting more people. There we will have some additional costs because of accelerated ramp-up of the stage two. Understood. Thank you very much. Thank you. All right, our next question comes from Gabriel Adler from Citi. Please go ahead. Hi, thanks for taking my questions. My first is on the raw materials headwind that you've guided for in the second half. How much of that 9% headwind do you think you'll be able to offset through price increases, particularly given that the price mix today remains negative? My second question would be on Russia, and the market share gains in the first quarter. Maybe you could just provide a bit more color on what you think drove those market share gains and how sustainable you think they are. Then my third and final question is on the CapEx. At about EUR 17 million, it looks to be quite significantly below D&A. What was the reason for this drop-off in CapEx other than the obvious, you're no longer investing in Dayton? Should we expect that CapEx to ramp up back towards D&A in the coming quarters, or do you plan to operate CapEx below D&A going forward? Thank you. If I start with the raw material cost headwind and the price increases. We are in the plan to offset the raw material prices in local currencies. Having said that, good to remember that if you look our Net ASP on an annual level in euro terms this year, we will have a higher share coming from Russia and depreciated ruble having an impact. In net, in euro terms, there will be a headwind, but in local currencies, we plan to offset the raw material increases. The next one was about the Russian market share. Of course, the market recovered, but we gained more volume and higher share than in previous year, and we expect that to continue in this year. We will, of course, see how the competition will work and what kind of imports to Russia will happen. At this point of time, our share is clearly higher than in 2020. Finally, question about the CapEx. Teemu, can you take that one? For the full year? Yeah. As we have anticipated for the full year, the overall CapEx is clearly below the last year level, which was on a level of EUR 150, and let's see what is the level where we end up at the end of this year, but clearly lower than last year. Okay. Thank you. Thank you. Our next question comes from Thomas Besson from Kepler Cheuvreux. Please go ahead. Thank you very much. It's Thomas from Kepler Cheuvreux. I have three questions as well, please. First, on the guidance. I know it's probably an intention, but the guidance remains unchanged and vague. Is there a way for you to position your guidance maybe versus 2019? You've clearly produced better results than we were expecting. Is there anything else you can say about the guidance, or are we going to remain on this wording? The second question is on inventories. You had clearly lowered inventories substantially in the second half of last year. Can you comment on inventories role in the massive volume jump you've reported in Q1 2021? Do you still have room to effectively exceed sellout with your selling in the coming quarters, or have you done everything in the first quarter? Lastly, can you remind us the timing of your new key product launches? Have they already hit markets or are they hitting markets in coming quarters? Okay, we start with the guidance. I think that the wording remains the same. Obviously, what you will see in, and if you remember 2020, and I'm sure you remember that the second quarter was quite weak in 2020. In terms of comparables 2020, the second quarter will be pretty easy to exceed. When we go to the second half, then we will need to see how the recovery takes place. I believe that the more precise guidance can be visited after the second quarter when we go to the second half, and we see that how the raw material evolution takes place and what kind of trading environment we have in the second half. Right now it looks quite strong recovery, but obviously there are a number of uncertainties still in the air. Of course, compared to second quarter last year, the momentum is quite good. Inventories, Teemu, would you want to take the inventories? Both in terms of our own inventories, they are on a low level because the demand is strong, and we don't see in the channel any issues in terms of high inventories. Quite the opposite at the moment. New product launches, they happen actually step by step throughout the year. I think that we highlight some of the key products and, of course, as historically and like the winter tire company, we of course talk about Hakkapeliitta 10, but there are throughout year new product launches or upgrade of the current product offer. It's not a particular time when it happens, but it happens throughout the year. You could expect that in this year as well as in early 2022, there will be a continuous stream of new products. Great. Thank you very much. Thank you. Our next question comes from Artem Beletski from SEB. Please go ahead. Yes, hi. Thank you for taking my questions. I actually have three to be asked. Could you maybe comment on profitability by different region at the moment? Basically looking at Russia, the ruble has been very volatile and weakening quite a lot. Could you put that maybe into a context? The second question is relating to Heavy Tyres. You made a strong over 20% margin in Q1. Could you maybe talk about margin outlook for the rest of the year? I know that you're ramping up capacities there, the demand is strong, but also raw material prices will be going up quite significantly in second half. The last one is related to new product introductions and especially Hakkapeliitta 10 that is, I guess the key launch for the year. Is it fair to assume that we will see impact of it in Q2? You will see presumably clearly more winter tires to Russian market and also Nordics. If I start with the profitability, and especially you asked about the profitability in Russia. Clearly this year the profitability is improving because of the increasing volume. Having said that, good to remember that in euro terms, the Net ASP has been in decline because of the ruble impact. As we have been discussing in the previous calls extensively, our raw material input costs are in euro or in USD. Depending what is the reference here, there is a headwind in Russian profitability mid-term if you look back to beyond 2019. In other markets, I think in the Nordics, we are on a normal, healthy level. In Central Europe, as an example, when the volume is in increase, it will also improve the profitability on there. In terms of the Heavy Tyres margin outlook, as stated, the Q1 was a strong start for the year, and we are having a positive view on both on the top line development, and that should then benefit the profitability and the profit as well. When talking about the product mix towards the year-end, we expect, of course, that the winter tires will become more significant part of our net sales in the coming quarters. Obviously, in the early part, in the first quarter, having summer tires as the biggest category and then winter tires and only then all season, I think that that will change. Obviously, shipments over Hakkapeliitta 10 and the season of the winter tires will be quite important for us. We have high hopes for Hakkapeliitta 10, but again, early days for the year. All right, great. Thank you. Thank you. Our next question comes from Pasi Väisänen from Nordea. Please go ahead. Thanks. This is Pasi from Nordea. Firstly, to start with, is there something to be worried about regarding the component problem and production cuts in the truck sector? Especially in the Heavy Tyres, when looking at the Nokian Tyres segments and registrations in the second quarter. Secondly, just to confirm, did you actually mean that the raw material effect is going to be flat in margin-wise when looking at the second half in this year? Maybe lastly, when looking at the history, every other quarter has been very strong and every other quarter very weak. Is this pumping demand or inventory effect still going to be there in the second quarter? Probably would it be so that the second quarter will be, for some reason, more or less disappointing after the very strong first quarter? These three issues. Thanks. Okay. If I start with the raw materials, what I was saying that in local currencies, our ambition is to offset that as much as we can, the raw material increase. If you look our Net ASP in euro terms, we need to take into account the increasing share of our Russian sales as well as the weaker Russian ruble. In net, in euro, we are not expecting to offset the impact. You were asking about the component shortage in the Heavy Tyres customer base. That is obviously something that continues and will become more difficult. That may be an issue, but at this moment, we don't see significant impact in Heavy Tyres. We expect good top line and margin development in Heavy Tyres in 2021. Then strong quarters alternating with weaker quarters. Unfortunately, that's how the business goes, and we don't plan that, and we, of course, ship as much as we can and service the customers in the best possible way. Clearly, the year is off to a good start. A big part of that is a recovery effect. The other part is that we've gained market share, for example, in Russia, and working on that and improving on that is our ambition. Of course, as said, there are a number of uncertainties in the marketplace, but as we guided, we expect that net sales and profitability increase significantly in 2021 versus 2020. Great. Thanks. I hear you. That was all from my side. Thanks. Our next question comes from Michael Jacks from Bank of America. Please go ahead. Hi. Good afternoon, and thanks for taking my questions. I just have two, which are follow-ups from the prior ones, and please forgive me for re-asking on the raw material impact. I just want to make sure that I clarify or I just get clear on what you were saying earlier. In the presentation, you mentioned an impact of around 9% from raw materials, are we talking a 9% increase in raw material expenses on like-for-like volumes, or are we talking about the EBIT impact there that you expect for the year? My second question is, I know you've discussed pricing already, but how should we think about your ability to offset these raw material increases with price increases this year? Do you think you'll be able to get full offset, or perhaps something less? Thank you. The 9% guidance was the raw material input cost like for like. That is the guidance that we have stated. Thank you. In terms of the price of offsetting that, as stated, we are planning to offset as much as we can in local currencies. The Net ASP development for this year is expected to be negative in EUR because of increasing share of Russia sales and weaker Russian ruble. Thanks. That's very clear. If I can just sneak in one more question, please. You commented that winter tires played a smaller role in Q1, and I guess this was despite the fact that there was higher snowfall towards the end of the quarter versus prior years. Can you maybe just give us some color on how the winter tire markets developed over the last couple of months, please? In the last couple of months, I think that pretty much as in 2020, so not really a significant difference. Thank you. Yeah. I would say that on annual level, we are expecting to see a good winter set as well. As we have been commenting in the earlier calls, there are shifts between the quarters within the year, and therefore, you shouldn't draw any major conclusions based on one quarter. I think that this is post 2020, 2021 season, and now I think we are looking ahead to 2021, 2022 season, which is ahead of us rather than behind. Thank you. Just as a reminder, if you wish to ask an audio question, please press zero one in your telephone keypad. Once again, that's zero one on your telephone keypad if you wish to ask an audio question. Our next question comes from Victoria Greer from Morgan Stanley. Please go ahead. Afternoon, three from me, please. I wanted first to come back to the sell-in versus sell-out question. Vianor plus 8% year-over-year, excluding FX, excluding the U.S. disposal. Is that a fair guide for where you think sell-out is trending across your markets? I guess another way of asking, how much of the restock do you think is already complete now? The second question is around adding the shift in Finland. Obviously understand the need to produce as much as possible at the moment, and also that, you want to ramp up in the U.S. in a sustainable way. There have been sensitivities around moving the passenger tire production away from Finland in the past. Would you expect to continue to have that shift in Finland, or would you think about it more as a temporary measure? The third one on Vianor, could you comment at all on your cost control expectations for the full year? Obviously a bit of an improvement into Q1. Could you think about that sort of, I guess, EUR 2 million or so improvement continuing at that level for the rest of the year? Thanks. Okay. If you take the Vianor and you talk about the Vianor sell-out and the top line, and that is related to Nordics, right? Yeah, we saw the Nordics sell-in also at about 7% improvement year-on-year. I think that that is reflecting what the Nordic markets trades at this moment. The other markets actually had a double-digit recovery and growth, while the Nordics was about 7%-8%. A question about the moving the tire production from Finland to other places. I don't see that being a major issue because what we are doing in Nokia is that we are continuously expanding the Heavy Tyres capacity and making investments. Therefore, Nokian factory is increasing its output and so on. We said a year ago already that important thing is to run Russia full, ramp up Dayton and achieve the targets that we set out to ourselves in Dayton, and then use Nokia as a swing capacity. The swing capacity usage in Nokia came faster than anticipated, therefore we added a shift in Nokia, announced that shift in Nokia in 2021 because this is the swing opportunity we have. You had the question regarding the costs. Cost measures in Vianor. Cost measures in Vianor. This is an ongoing activity within the Vianor that we manage the costs as effectively in every quarter. As stated, Vianor is a seasonal business, and the main seasons are in the second and fourth quarter when we are making the result, and especially in the first and third quarter, we need to be actively managing the cost in order to minimize the losses. Okay, an ongoing project to manage the Vianor costs. Yeah, you don't want to commit to a certain level of improvement there for now. No. As we have been saying, Vianor is an important asset in our Passenger Car Tyres business in general, and the profitability is on a retail profitability level. Okay. Thank you. Thank you. Our next question comes from Edoardo Spina from HSBC. Please go ahead. Good afternoon. Thank you. I have two questions. One on the network development, if you can comment on the plans for growth, where do you plan to grow the network distribution? We can see over the last few years that there's been a shift from Vianor partners to Nokian-authorized dealers with no growth for the N-Tyre. I was curious to understand how this impacts your pricing and the cost as a Nokian Group, how you plan to grow from here. The second question is more on Asia, especially on China. I was wondering if you think that you need local production in order to exploit the market better, or if you're actually investing in marketing or further network expansion to see higher growth in those markets, especially considering, I think, very good relationship between Finland and China. About the Asian. Thank you. Maybe if I start with the China question, this is of course related to a larger strategy development. As we said, that we are working on the strategy right now. We will have the Capital Markets Day by what has been announced already. Yes? Yes. September 9th September 9th. We come back to the China questions that how and what we think that is appropriate to do in China. Right now, as you correctly pointed out, we are on an export basis in China this moment. Vianor stores growth into N-Tyres. I think it's good to separate that when we are talking about our own run Vianor stores that we have in the Nordics. They are vital in order to have a good market position in the Nordics as a whole. Outside Nordics, we don't have our own Vianor stores. We have in Russia our partners who use the Vianor brand and N-Tyre and other branded stores. Yeah. They're all franchise bases outside the Nordics now when we have divested the North American operations 11 outlets in 2020. Thank you. Our next question comes from Sascha Gommel from Jefferies. Please go ahead. Yes. Good afternoon. Good morning, everyone. Thanks for taking my questions. I have a few follow-ups. The first one would be on the pricing offset that you've been talking about. Have you already implemented your price increases to fully offset your anticipated raw material headwinds? Or is this still something that needs to come in the coming months? My second question would be on the car tire sell-in you show in your slide deck, which looks quite weak in the Nordics, minus two. I was just wondering if you can share some insights why the Nordics, unlike the rest of the region, is not recovering yet. My last question would be on the structural or the potential structural shift away from winter tires to all-season tires in some not kind of strong winter markets, like in Central Europe, for instance. Is that something you observe as well, that customers opt more for all-season tires versus winter tires, or is that not something you're seeing right now? Thank you. Starting with the pricing. The pricing is in implementation, as I mentioned, and obviously we keep an eye on the raw material development. Our anticipation is, as STEM was saying, about 9% like-for-like increase. We follow that, and we do the pricing decision seasonally and step by step. Obviously they are in implementation right now. Away from winter tires, that is something that we have seen, and we think that especially the all-season tires are something that consumers choose, for example, for the second car of the family and so on. There was actually a recent study that we showed some information about that. We did a study in Continental Europe about the all-season tires that when and how people use them and why do they like them and so on. We believe that winter tires very much have their role, especially in the markets where the winter is coming as normal. Typically Nordics, Russia, and Canada, and northern states of the U.S. and then friction tires are somewhere there in between to help people to be prepared for harsh winters and snow and so on, but still not having studded products. All of these people are choosing depending on their own priorities and so on. We clearly want to gain more volume and opportunity in all seasons. This is something that we are launching new products, and we want to achieve more volume in that particular segment. This is not so that we would see that the winter tire opportunity would be less. It's only that we complement our product range and are more competitive across these key categories, summer, all season, winter. Nordic minus two, that's something that is really related to imports, less imports to Nordic markets. I think the established players pretty much saw the volumes grow in the range that we were trading in growth in the Nordics, while the decline is mostly related to imported products to the markets. Exactly. Thank you. Thank you. There appears to be no further questions registered. I'll hand back to the speakers. Thank you. If there are no additional questions, this ends today's conference call. Thank you all for participating and have a nice day. Thank you. Thank you. Bye-bye. Thank you.