Hello, and welcome to the Nokian Tyres Q4 Conference Call. My name is Francois, and I will be your operator for today's event. Please note that this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you'll have opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Päivi Antola, to begin today's conference. Thank you. Thank you. Good afternoon from Helsinki, welcome to Nokian Tyres Q4 and the full year results conference call. My name is Päivi Antola, I am the head of industrial relations in Nokian Tyres. Together with me in the call, I have Jukka Moisio, the President and CEO of Nokian Tyres, and Teemu Kangas-Kärki, the CFO. In this call, we will go through our Q4 and full year results, more importantly, discuss our plans for 2023 and beyond and the new start for Nokian Tyres. Now I'm handing over to Jukka and Teemu. Please go ahead. Thank you, Päivi, and welcome on my behalf as well. First of all, I would go through the prepared presentation. The heading is Resilient Performance in 2022 and 2023, a new start for Nokian Tyres. Indeed, we could also say about 2022, that was an eventful year. I move to page two, and there we reflect the first steps we've taken to build the new Nokian Tyres. The most important thing is that we made a decision in 2022 to build a new factory in Romania. We went through more than 35 sites in Europe in about six months' time, have prepared the investment proposal, decided and announced that in November. Quite a rapid action to rebuild our capacity. First tires will be rolling out in second half of 2024. We aim for commercial production in 2025. Right now, we have various actions ongoing, including land purchases, permitting processes, and indeed, we've ordered the first production equipment already in late 2022. Financing will be taken care with our own cash flow and leveraging the strong balance sheet. We are not looking to raise new equity to finance this factory. Actions also to increase capacity in Finland and in the U.S. are proceeding in line with the plan. We had a plan to go all the way to up to 4 million tires in Dayton. That plan is very much ongoing. Equipment will be installed this year and, well, ramping up of those equipment will be taking place in this year and early 2024 to achieve that 4 million tire capacity or capability. Also in Nokia, we are increasing capacity. We decided that those investments on new equipment late 2021 and early 2022, they are being installed as we speak, and also we are increasing ramping up the capacity increases in Nokia right now. Contract manufacturing agreements were signed in Q4. Negotiations with other manufacturers are ongoing. The first of the volumes we expect in the second half of 2023. The same process in Russia is ongoing. Move to page 3. Despite an eventful year, had a resilient performance. I want to highlight some of the key achievements. First of all, heavy tires had all-time high net sales, all-time high profitability and productivity. Vianor delivered all-time high net sales. In North America, we achieved the highest ever sales in terms of volume in passenger car tires, also of course, production records in our Dayton factory which progressed in 2022 according to plan or actually ahead of the plan in 2022. Important achievement was also our new products which were high performing and we had strong partnerships with our customers which drove our net sales in 2022 despite a demanding year and eventful year because of the war in Ukraine. I go to page 4. Q4 is impacted by lower supply volumes. Net sales at EUR 411 million. This is 22% behind 2021 fourth quarter in comparable currencies, and the most impacting reason for that was the lower passenger car tire supply volumes. Segment operating profit at EUR 13.5 million was EUR 88 million a year ago. We had the same reasons, lower passenger car tire volumes and also changed factory mix. We also had price increases to combat cost inflation, and we had higher net selling price or average selling price. Teemu will talk more about the profitability impact in factory mix and the supply volume impacts soon. I go to page five, which is re-reflecting the full year 2022 performance. All in all, our net sales, they're EUR 1.78 million, which is all-time high. Last year, we achieved EUR 1.78 billion net sales in 2022, and EUR 1.71 billion in 2021. Actually, 2022, despite it being an eventful year, had the all-time high net sales of Nokian Tyres. In comparable currencies, they're slightly behind the 2021 net sales. We had lower passenger car tire volumes as the sanctions came into force and the tire imports from Russia to Europe and North America ended in July. We had also a record year in heavy tires and Vianor. This shows a strong performance by our Nokian Tyres team and also the resilience under very demanding circumstances in 2022. Segments operating profit were EUR 221 million versus EUR 335 million in 2021. Again, the supply of the lower passenger car tire supply volumes as well as changed factory mix had the most important impact on the profitability. We had benefit from price increases and they helped to combat the cost inflation. Based on 2022 performance, the board proposal on the dividend payment is as follows, EUR 0.35 to be paid in May, and also the board will seek to seek authorization to decide on the second dividend payment of maximum EUR 0.20 per share in second half of 2023. All in all, the dividend payout proposal is up to EUR 0.55 per share. On page 6, we have the highlights of the financial performance. I call out some key numbers here. Cash flow in the final quarter, cash flow from operating activity is EUR 319 million. Capital expenditures, EUR 70 million. In that EUR 70 million, we have about, slightly below EUR 30 million of new equipment for the Romania factory. Our EBITDA, segment's EBITDA, a new profitability measurement, segment's EBITDA at 12.5% and segment operating profit at 3.3%. Full year, net sales at EUR 1.78 billion versus EUR 1.71 billion in 2021, as I mentioned earlier. Segment's EBITDA in 2022, 21% at EUR 367 million versus EUR 455 million or 26% in 2021. Equity ratio remains strong, so, we have 65% equity ratio and interest-bearing net debt at the end of the year at EUR 141 million. Capital expenditures for the year at almost EUR 130 million. On page 7, just to highlight also our achievements in sustainability, we had excellent safety performance. Lost time incident frequency was record low at 3.2 per million hours worked. We also started to build the first zero CO2 emission factory in Romania in tire industry. Introduced the most sustainable concept tire yet, with 93% of the materials being recycled or renewable. Also an important achievement in 2022, we were included in Dow Jones Sustainability Europe Index, being one of the top-scoring companies in automobiles and automotive components industry. With those highlights, I hand over to Teemu to give more color to financial performance and financial details. Teemu, please go ahead. Thank you, Jukka. Let's start with the passenger car tire business. As we see in the Q4 net sales, which was on a level of EUR 236 million, clearly declined from comparison period because of lower supply of volumes from our factories. The segment operating profit was negative in the fourth quarter, EUR 14 million. Looking at the full year numbers, the net sales for passenger car tire was on a level of EUR 1.233 billion, increase of close to 3% with reported numbers and with comparable currencies, a decline of around 5%. The segment operating profit for the full year, EUR 179 million and clearly down from the comparison period. As we knew, the lower tire supply had a negative impact, especially in Central Europe and in Russia. The inventories are high, on a high level in the distribution that will have impact then to the sell-in. The segment operating profit declined as expected, but we have been able to increase prices to offset the headwind from raw materials and other cost inflation. If you look the net sales by quarters, you can clearly see the volume impact of the decline after the third quarter being the biggest decline in the fourth quarter, and then the positive price mix development due to the fact that we have been able to increase prices that we started to already in year 2021 in the second half. Currency has given us tailwind during the year 2022, and most likely in 2023, it looks like that we will have a headwind from currencies. Looking at the performance of our PCT slightly more in detail and focus to the segment operating profit bridge. You can see here the impact from volume, EUR 120 million price mix, significantly up almost EUR 240 million, and then which is clearly offsetting the material headwind of EUR 130 million. If we zoom into the supply chain bucket, which shows a negative development of EUR 134 million, half of that is coming from the lower production in Russia, the other half of that headwind is coming from higher logistics, warehouse, and custom duties from North America. Good to remember 50/50 split of this headwind. Moving to the heavy tires, they had a record year that we are really proud of. The net sales in the fourth quarter was on a level of EUR 65 million, and the segment operating profit, EUR 6 million. The full year numbers, EUR 274 million almost, is all-time high, as is the segment operating profit, almost EUR 44 million. In the fourth quarter, the net sales decreased slightly due to supply constraints, as an example, the sick leaves were on a high level in the fourth quarter in our Nokian factory. As stated, all-time high full year net sales and profitability in 2022. Moving to the Vianor, which recorded all-time high net sales. We had a strong finish to the year in the fourth quarter, reaching EUR 129 million in the fourth quarter and the segment operating profit almost EUR 11 million. The full year numbers are EUR 362 million and segment operating profit, EUR 3 million. As you might remember, we had a weak first quarter, and now strong fourth quarter, and therefore we landed almost on the same level than in 2021. In Vianor, we have continued to improve our operational efficiency as well as to offset the cost inflation in 2022. Today, we also announced our alternative non-IFRS figures excluding Russia. Here you can see the figures 2022 and 2021, how our segments net sales and segments operating profits looked in those years. This year, we have now introduced the new term segments net sales that we will guide in 2023, excluding Russia due to the fact that the sales process is still ongoing. If we look the year 2022 and 2021 segments net sales figures, you can see that they have been on a level of EUR 1.35 million in 2022 and EUR 1.39 billion in 2021. Looking at the segments operating profit for 2022, here you can see the segments operating profit on a level of EUR 18 million. Here, good to remember the headwind from the supply chain last year, some EUR 60 million, due to the extra cost relating to moving tires out of Russia closer to customers. Moving to the assumptions for this year, 2023. We are expecting that the first half will be weak due to the constrained capacity and the seasonality. The second half is supported by the winter tire and all-season tire season and the offtake volume that we are getting in the second half. In Heavy Tires, a set all-time high net sales and segment operating profit last year. Now we see the market softening, so there most likely is a short-term headwind, even though overall we believe that the market is going to the right direction. The guidance for this year. Now we decided to guide with the absolute numbers unlike earlier years. The net sales will be between EUR 1.3 billion and EUR 1.5 billion, the segment's net sales, and the segment's operating profit percentage of net sales between 6% and 8%. I'd like to highlight the seasonality, especially in the segment's operating profit, meaning that the profit is generated in the second half. Handing back to you, Jukka. Thank you, Teemu. We go back to looking at 2023, and it will be a new start for Nokian Tyres. What will happen and what is important for us? First of all, we count on our team. We've been through 2022, which has been quite a demanding year. We look optimistically into 2023. We have our agenda quite full. First of all, we work on the factory, new factory in Romania. We have a very tight schedule to build it and to get the first tires dropping out, which is the latter part of 2024, and then commercial production starting in 2025. The second one is that the Nokian Tyres factory capacity increase is ongoing. Right now we are ramping up new equipment as we speak and increase the capacity. Same with the Dayton. New equipment is coming, and we are ramping them up. We have factories fully utilized at this point of time. All the tires we can make are being made and being shipped then in the second half mostly, as Teemu was saying about due to seasonality and focus on winter tires and our core products. We have also already made an agreement to have contract manufacturing. We keep on negotiating additional contract manufacturing opportunities so that we complement our product portfolio in late 2023 and especially in 2024, 2025. As you may remember, we announced in December that we have already concluded one agreement that will help us to supply winter tires in Central Europe. At the same time, it's important that we provide our customers with world-class products and services. It's important that the wheel process from our factories to our customers and consumers continue uninterrupted. We will drive leadership in safety, product quality, and sustainability, building on our achievements in 2022 in sustainability and safety, which was a record level. Also we were included in the Dow Jones Sustainability Index in 2022. We aim to do the same in 2023. We also will use this opportunity to improve our processes and build our systems and capabilities for the next stage of Nokian Tyres growth, and this is important when the new factory in Romania comes on stream. I move to page 18, which is capturing all these key initiatives and actions that we see. We have an investment phase in 2023, 2025, so new factory, Romania, capacity increase in Nokia, Dayton factory completion, and growing contract manufacturing. In 2026, 2027, we will see a significant growth phase and based on the new products and invested capability, and we target to have EUR 2 billion net sales at the end of that period or during that period. Obviously, many of you remember that when we had the Capital Markets Day in 2021, we were aiming to be a EUR 2 billion company midterm. Now we still aim to be a EUR 2 billion company midterm. Took some important hits in 2022, and it was a demanding year. However, we regroup, we focus on key actions. We are confident that the implementation will be successful. Financially, we are able to do it, and we have a strong cash flow, strong balance sheet to rely on, and that will allow to build the new Nokian Tyres. This is the end of the prepared presentation, and the final page says, "It's a new journey," and it will be a new journey. That it will be. Thank you, Jukka. Thank you, Teemu. Before going to the questions from the audience, Jukka mentioned Capital Market Day in 21, and then there is a question about the next Capital Market Day. As announced earlier, that will be arranged once the Russia exit has been finalized. As said, the process is ongoing. Now, operator, we would be ready for the questions from the audience, please. Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. If you change your mind and want to withdraw your question, it's star two. The first question comes from the line of Michael Jacks from Bank of America. Please go ahead. Hi. Good afternoon, Jukka, Teemu. Thanks for taking my questions. I have three. The first, First of all, thank you for providing more specific guidance, ranges on revenue and EBIT. Could you please also provide some steer on the building blocks for cash flow in 2023? I think the dividend sends a somewhat confident message in this regard, but just want to understand the moving parts to that. Secondly, on heavy tires, your guidance flags risks from general economic developments. Just curious, is this based on trends that you are currently observing, or are you taking a view on the macro development for the year? Finally, with reference to your restated segment operating profit figures, what are the main reasons for the wide margin gap between the 2021 ex Russia margin of 15% and your 2023 guide of 6%-8%? Thank you. Teemu, if you take the cash flow. Yeah -building blocks, please go ahead. As you stated, the dividend proposal to the AGM should send a clear signal to the investors how we see our cash flow developing, not only in year 23, but also in the coming years. Good to remember that we have now a heavy investment program in the coming years, and the first two years are the biggest in terms of investments. As we have stated that the investment in Romania is some EUR 650 million. If you divide that by two, taking into account that we have maintenance CapEx of some EUR 100 million, that might be a good proxy for year 2023. Dividing EUR 650 by two, meaning that the Romania investment is not yet completed in two years, it goes into three years. Taking into account the maintenance CapEx on a level of some close to EUR 100 million. In terms of working capital changes, most likely no major changes there in this year. If you look at the net debt/EBITDA ratios, we see that we can comfortably clear the situation in 2024, 2025, and not having too higher leverage based on net debt/EBITDA despite these investments. Heavy tires, we basically talk about the heavy tires, what we see right now. Obviously, the general economic situation is a concern, and we need to pay attention. Right now, of course, the as Teemu was saying that inventory and pipeline is relatively full and we see an current situation which appears to be softer. However, that may change, of course, depending how the economic momentum evolves over the year. The restatement, Teemu. The question was about the range. Yes. I just want to understand the main reasons for the difference in the margin between the 2021 ex-Russia margin of 15% and the guide for between 6% and 8% for 2023, given that one is also excluding Russia. If we start with the 22, as I said, we should bear in mind that there we have this headwind from logistic warehouse and custom duties, some EUR 60 million. On the EUR 80 million, you can put that on top. If you look at 21, there we should remember that we get the benefit of lower production costs in Russia. If we take that into account, then we come closer to the guidance of 23, indicating the range of 6%-8%. That's very clear. Thank you very much. The next question comes from the line of Akshat Kacker from J.P. Morgan. Please go ahead. Hi Jukka, hi Teemu. Akshat from J.P. Morgan. Three questions from my side as of these. The first one on the deal with Tatneft on the Russian plant. Obviously, you mentioned that the process is still ongoing. Is it possible to give us some more clarity in terms of the timeline or the next steps in this process, please? How have things really evolved in the last three months from when this was announced? I'll ask the other two later. As we stated already in, was it in late October when we announced the deal that the Russia exit has substantial uncertainties related to timing, terms, and conditions and the closing of the transaction. The situation definitely has not got any better, so it is a demanding topic and environment. Therefore, I would love to give you more clarity, but I don't have that either, so therefore I cannot comment that, unfortunately. Yeah. Maybe if I just add something which you didn't ask, but nevertheless I add. Despite the ongoing Russian process, the rebuild of the company in terms of building the new factory in Romania and advancing with the capacity rebuild is not dependent on the Russian exit. That these are two separate things. Russian exit is one, it's a process in its own, the other part is that we build new Nokian Tyres independently, how it goes and when it comes to conclusion. Therefore, these two things are not dependent. Just as an addition to your question. if I build on that That is, yeah. If I build on that, of the team, Nokian Tyres team, 99.9% are focusing to the future building the new Nokian Tyres. Myself and few my team members are the ones who are only focusing closing the deal in Russia. Yeah. It's a necessity That is very clear. Yeah. It's a necessity from the company point of view that we move on, we build the new company. At the same time, we value and pay attention to that thing, of course, that we do in a best professional way the process in Russian exit. Okay, next question. You had a second question. That is. Yeah, I have. Yeah, that is very clear, and I agree with that the balance sheet still is in a strong position. The second question was on the 2023 guidance and the implied passenger car margin. You're talking about a 6%-8% segment operating profit margin. Firstly, in terms of your disclosure, what will be the difference between segment operating profit and operating profit in 2023? Just probably a list of items that you will still be adjusting for in 2023. Is it still the data ramp-up expenses or maybe some more ramp-up expenses in Romania? Some kind of details on those adjustments will be helpful. Secondly, within that group margin, can you also guide us to what kind of passenger car margins are you looking for in 2023? Your Q4 passenger car tire margin was in the negative territory. Thank you. If I start with the PCT or passenger car tire guidance, we have been guiding on a group level and we stick with that approach. Then, in terms of the profitability guidance between 6% and 8%, as you said, the exclusions are not included, and the exclusions in year 2023 are, as you said, the date on ramp-up until we reach the 3 million level as we have been communicating. On top of that, we exclude now the Russian business, and that's the reason why we introduced the segments net sales because as long as they have some business there, we will report the net sales and the operating profit as non-IFRS exclusion. The new item in, 23 in exclusions will be Russia. Understood. Yeah if the process is concluded. Sure. Understood. For the underlying passenger car margin, like just in terms of Q4 was a negative number, and what are we building for 2023? I did hear the comments in terms of the second half weighted profitability, but just in terms of how the passenger car profitability is panning out with the two underlying plants that you have today? Thank you. As I said in our Q3 call that you shouldn't overanalyze our Q4 results because of several activities happening in passenger car tires business, and therefore I just reiterate the same comment that don't overanalyze the Q4. Please look our guidance for 2023 and our comments regarding the seasonality. Maybe this is a good point to give you some color. You might take a look what kind of a business we had for the sake of argument in year 2000 before we started the Russia era. There you get some flavor how the seasonality was between the quarters and what kind of profitability we recorded in those quarters. Great. Thank you for the details, and all the best. Next question comes from the line of Thomas Besson from Kepler Cheuvreux. Please go ahead. Thank you very much. It's Thomas Besson, Kepler Cheuvreux. maybe I'll be a bit blunt. you had EUR 347 million exclusions in 2022, EUR 57 million in 2021. Should we expect you to be closer to 2021 or 2022 levels of exclusions in 2023, assuming the process of your Russian disposal goes broadly as you imagine, so I assume sometimes in H1? The Dayton part is on the same ballpark that it has been, and then the Russia is the big question mark that nobody has an crystal ball at the moment. As you can see from our numbers, we from last year recorded EUR 300 million impairment related to Russia that is in the exclusions. We made the conclusion that the impairment is still valid at the year-end with the information that we had at the year-end. let's see what is the end result when this saga ends. Okay. Thank you. second question, please. you present adjusted figures, that you call excluding Russia. I just want to clarify because for me, maybe I'm tired, but I'm not sure I understand what you mean. Are you talking about without Russian sales? Yes. remove the Russian revenues as a destination, right? Would it not have made more sense to present an adjusted set of figures without Russia as a production center on top of the sales? I mean, we. Yeah. We are completely unable to look at what your underlying performance as long as you still assume that Russia as a production center was still there. I just want to make sure I understand that the exclusion is just Russia as a destination, right? No, it's Russia excluded completely, including the, you know, all the top line, all the manufacturing, everything. That is segment net sales and segment operating profit excluding Russia. There's no Russian impact at all in those numbers. In the guidance, 1.3. So you May I continue? EUR 1.3 billion. Sure. You go. Yeah, yeah. EUR 1.3 billion-EUR 1.5 billion net sales is completely without Russia. 6%-8% segment operating profit is completely without Russia. No manufacturing, no net sales, none whatsoever. Okay. Do you mean that the 22 adjusted figure of EUR 1.3 billion excludes the production of tires in Russia as well? That's only what you have built in Finland and Dayton that has been recorded in your EUR 1.3 billion sales for 2022? You have no tires produced in H1 in Russia in that? As I tried to comment earlier, when we were looking the year 2022, there we had the impact from Russia for the sales that we generated outside Russia because we produced those tires in Russia. Then maybe it's more clear in year 2021 if we look our segment operating profit, EUR 210 million. That contains the cost of tires produced in Russia with a lower production cost. Okay. Thank you. And, and, and Yes. I have two other quick questions. Yeah. Again, the guidance for 2023 is completely without Russia. No Russia impact at all That's. Yeah. in those guidance. Yeah. I think for the guidance it's clear. Thank you. Can you guide us on the tax rates now that you don't have Russia anymore? It's been an important source of a substantially lower tax rate than you would have had normally. What should we assume in 2023, 2024 as your tax rates now that you don't have Russia anymore? I think I would say that, somewhere around 20, 21% is good ballpark number. Okay. Last question, please. You have, if I looked at your slide, your backup slides, 83% of your debt to be refinanced in 2023-2024. Can you guide us on how you plan to do this refinancing? Do you plan to use your existing and unused bank loans, or you plan to issue bonds? What kind of cost should we assume for 2024-2025 net interest charge fees? We are now in process to organize the financing or the funding for the company. This is now the moment where we become like a normal company with a different kind of a funding, because in the previous years, we have been in a net cash position now. Now during the this year, we will structure our funding totally different, and bond is one of the source of funding the investments in the coming years. Yeah. Our profile becomes different because from now on, our net sales and our profitability and our assets are outside Russia, so they are essentially in Western Europe and in North America. Therefore, our leverage and our asset base as well as our financing structure can and will change. Therefore, we look different kind of a company in terms of a balance sheet in years to come. Okay. Thank you very much. The next question comes from a line of Artem Beletski from SEB. Please go ahead. Yes, good afternoon, and thank you for taking my questions. A couple to be asked from my side. The first one is actually relating to, the product, mix development, this year. What is your outlook? I guess, you will be capacity-constrained, and, can actually improve your mix and how it actually looked like, in Q4 excluding Russia. Our product mix, obviously when we look into 2023, so we'll be capacity-constrained. Therefore we go back to our core, which is winter tires and all-season tires and high premium summer tires for Nordics. Basically, the key driver will be winter tires. Obviously, that's why we talked about the seasonality in terms of our supply that winter tires will be supplied towards the end of the year. Therefore, when we talk about our guidance, so we said that the net sales will be accumulated in the second half quite strongly. This is what we do. Therefore, clearly we prioritize those tires and those SKUs that bring us the best benefit from our current capacity. That we have seen already in the latter part of the year. Of course, Russia, if you exclude that, you see that winter tires in the latter part of the year has been the important part. Going into 2023, that will be the key. It's obviously, I mean, this is, I guess, a no-brainer to everybody that winter tires is our core, and we prioritize them as well as all-season. Yes. I had another question relating to your cost structure and potential actions what you are taking on that front. You a bit alluded about those ones in accordance with Q3 results. Could you provide some update? Obviously, you are planning for some, so to say, cost initiatives looking at this year. We already took out costs in 2022 in anticipation that especially in the Central Europe, we will have a lower volume, because that was supplied by Russia. Therefore, we took cost actions already in 2022. Those will bring benefits in 2023. We also look at the spends very carefully and under these circumstances, we regulate our cash flow quite carefully as well as our spend. Therefore, you can expect that all kinds of actions that are needed to conserve cash and be cost-efficient are taken. The major restructuring and those actions were taken already in 2022. Okay. That is very clear. Maybe the last one from my side is actually relating to Dayton ramp-up, and you actually mentioned that, 3 million tires is sort of the mark after which you won't be recognizing any ramp-up related costs. Is it fair to assume that, you would be reaching this type of ramp-up or run rate in terms of production already during this year? We will install the machines and equipment, for that kind of run rate this year. Then achieve the run rate sometime in 2024. Then it's up to us to be as quick and as efficient in hiring the people and getting the machines up and running. Basically, the machine deliveries will happen this year. This goes back to our many previous discussions that when did we order the equipment, late 2021, early 2022, and they are now being delivered during the course of 2023, and then ramped up, one by one. Okay. That's very clear. Thank you. The next question comes from a line of Giulio Pescatore from BNP Paribas Exane. Please go ahead. Hi. Thanks for taking my question. The first one on the EUR 2 billion target by 2027. I was just wondering, what are you assuming here? Are you assuming a normalization of pricing in case the material costs have to normalize? Any chance you can give us a rough indication of what the margins can do and how quickly you can reach those 2,000 levels? The second question on the inventories. You said that inventories are quite high. I was just wondering if you can specify which are we talking about and if that's true across all segments, winter, all season and summer. Yeah. Thank you. Okay. When you look at the EUR 2 billion target, obviously it's a combination of volume, so we ramp up volume, not only our own manufactured volume, but also offtake volumes. We assume trend pricing for that. That's how we look at the revenue plan. In terms of margins, we have not given any indication. Perhaps we wait until the Russian situation is clear, and then we have the CMD, and then we will come back with the margins and details of achieving EUR 2 billion. Basically, just give a high level ambition for 2026, 2027, we aim to be a EUR 2 billion company. We had that in our plans already 2021. We were about to achieve that in 2022. The war came between us and success. We want to achieve that success in the years to come. More details when the CMD will be organized, and that is dependent on the conclusion of the Russian process. in terms of Sorry, if I can just follow up on that quickly. Just to make sure I've understood it correctly, you are assuming current pricing and a recovery in volume. You're not assuming a normalization of pricing? We are assuming trend pricing. Trend pricing norm is a normalization, so it's not the highest of the high, not the lowest of the low, but trend price. Okay, thank you. That's typical in industry. Regarding your question about raw material price development. On year-on-year comparison, we expect that to still increase in 2023. If you look at the development by quarters, good to remember that the first half last year, we had a lower raw material prices peaking towards the year end. Now we don't see that to increase, but we have a low comparison in the first half, and therefore the year-on-year comparison is higher. Having said that, another factor that impacts our raw material price level is that because of the situation that we went through last year, we purchased a high amount of raw materials in order to secure our production. Now we have more than enough raw materials with higher prices in our inventories that we will consume in the first half, and then we are on a normal level with our raw material inventories in the second half. Yeah. That's a good point what Teemu was saying that, when we went through the event for 2022, we wanted to secure that indeed we would not run out of raw materials in either in Nokia or in Dayton, and to have that kind of a reason to not to be able to manufacture or ship tires. That was important for us to ensure that this does not happen. Okay, thank you. sorry, on inventories in the distribution, you mentioned that they're quite high. I was wondering if you can comment on where they're high and on which products and what's the reason for that? Thank you. Yeah. That was basically the, because the slowing economy, in the final quarter and early in 2023, pipeline across the system is quite full. We expect that that will then clear up, be cleared out, step by step. Towards the end of the year, the pipeline was quite full. That's a general industry comment, not only a Nokian issue. That was a general industry comment, but relates also some of our tires, so it's not that we are immune to that. Perfect. Thank you very much. The next question comes from the line of Christoph Laskawi from Deutsche Bank. Please go ahead. Hey, thank you for taking my question as well. This will be on the ramp up of the contract manufacturing volumes that you foresee. The first one on that, how big is your confidence in the ramp up, given that it's not entirely yourself operating those volumes? Just in terms of the pricing that you assume for those volumes to go into the market, in the meantime, before you have sizable volumes from the contract manufacturing, I would assume you just technically lose market share to some degree. Obviously, you have a strong brand. Do you just assume that you can go in with the market pricing that you see at that point and your premium pricing versus competition or do you need to be a bit more aggressive in order to place the volumes in the market as well? Thank you. Point of view that, how confident we are that we can deliver those contract manufacturing volumes. We are quite confident. We've tested the quality, we've audited or we are in the process of auditing the supplier plans, and we see that in terms of logistics, manufacturing, quality, we are confident that we can deliver. Obviously, the pricing-wise, they are not as profitable as our premium tires made in Nokia or in Dayton. Important part of making sure that we provide to our customers and our distribution Nokian products so that they have a good portfolio of products. This is of course, something that, over time will evolve, and we expect that the offtake will be an important or more important part of our portfolio in years to come. Historically, we haven't done that, but we see that even when we start Romania factory to increase capacity in Nokia and in Dayton, offtake will be an important part of our portfolio. Therefore, we invest time, effort, development to make sure that that is going to be successful. The first volumes will be in the second half of 2023. At this point of time, these are plans. We are confident we will deliver, then the reality will happen when we actually deliver. Those are included in our guidance of 2023. Thank you. Just a follow-up, if I may, on that. You just said to Julia's question, I think, that inventory levels are fairly high. By H2 of 2023 in Europe, you would expect it to normalize and at the dealers to be at a level where they happily take those volumes, they come onto stream. Yeah. In the U.S., is it any different? Yeah. We expect that, because the expectation of the new car deliveries, will be positive in 2023 versus 2022. We expect that there will be an increase in demand and improvement in demand. Therefore, the inventories will be going back to normal as they were during the course of 2023. Thank you. Okay. Thank you very much. It's getting 4:00 P.M. here in Finland, so it's time to finish the call. Jukka, any closing remarks? Maybe a couple of words about building the new Nokian Tyres. Thank you, Päivi. Maybe if I come back to that guidance. EUR 1.3 billion - EUR 1.5 billion in 2023, and that does not include any Russia. This is based on our output in Nokia, in Dayton and offtake, as well as heavy tires Vianor. That's the perimeter of our guidance, 6%-8% segment operating profit. Obviously, the segment EBITDA will be at mid-double digit kind of a number or higher. Key actions for our team in 2023 are well lined out. It's really to achieve the Romania factory first step. Building the real estate and then starting to install machines and being prepared for H2 2024, first tire manufacturing and then commercial production in 2025. This is one project. The other one is to ensure that the Nokia factory ramp up, the new capacities that are being installed right now will be delivered as well as heavy tire expansions will be delivered. Dayton continued ramp up, and the new machine installations will be delivered. Those are quite important things. Then the offtake, which is a new element or, in that scale, a new element to our company, that the quality, delivery, the process will be impeccable and that we get the benefits in our top line profitability in the second half of 2023. Lots of new things in our company for our teams. At the same time, as Teemu was saying, 99.9% of the people are working on these ones. We have an important professional team working on the Russia exit at the same time. When the Russia exit is being achieved or concluded, the process concluded, we will then seek to organize a CMD as soon as possible to give more color how we get to EUR 2 billion net sales based on trend prices, the highest of the high, not lowest of the low. What kind of volumes we expect from where the source is coming and what kind of margin profile can we think about achieving at that point of time. You all have been used to our Russian factory a long time ago. Russia, as we knew it at the time, delivered high margins. We don't see that Russia being there anymore. We as a company want to move on, and we have new highs, new opportunities ahead of us, and we will deliver on those. That's where Nokian Tyres is right now. Thank you, Päivi. Thank you, Jukka. Thank you, Teemu, and thank you all for participating. This concludes the call. Thank you for joining today's call. You may now disconnect your lines. Host, please stay on the line and await further instructions.