Continental confirms annual targets for 2012 despite difficult market environment
- Automotive supplier still expects sales of more than €32.5 billion
- Consolidated sales climb to €24.6 billion after three quarters
- Adjusted EBIT reaches almost €2.7 billion / 10.9% margin
- Further improvement in indebtedness ratios after nine months
The international automotive supplier Continental is confirming the forecast for fiscal 2012 that it raised after the first half of the year, despite increasing uncertainty in the sales markets, particularly in Europe, and a global slowdown in economic growth. "Based on the first nine months, we still expect consolidated sales to increase by more than 7% to more than €32.5 billion for fiscal 2012. We also target to achieve an EBIT margin above last year's very strong level, as previously announced," said Dr. Elmar Degenhart, Chairman of the Executive Board of Continental, on Wednesday at the publication of the quarterly figures in Hanover.
"After the positive overall development in the first three quarters, the start to the fourth quarter of 2012 has not given us any additional major cause for concern. Our current information indicates that consolidated sales from October to December are likely to be at least as high as in the third quarter of this year", stated Degenhart. "However, it is clear that the road is becoming rockier and we must keep our eye on the development of the markets. We are currently benefiting considerably from our international positioning and compensating for the declines in southern Europe in particular with growth in North America and Asia."
In the first nine months of this year, Continental increased its sales by 9.1% year-on-year to €24.6 billion. EBIT rose by €437 million or 22.8% year-on-year to €2.4 billion in the same period. The margin amounted to 9.6%, compared to 8.5% the year before.
Adjusted EBIT for the corporation increased by €434 million or 19.5% year-on-year to almost €2.7 billion in the first nine months of this year, equivalent to 10.9% of adjusted sales after 9.9% in the same period of the previous year.
In the first nine months of 2012, net income attributable to the shareholders of the parent was up 62.5% to almost €1.5 billion, corresponding to earnings per share of €7.26 after €4.47 per share in the previous year.
In the first three quarters, Continental reduced its net indebtedness by almost €500 million as compared to the same period of the previous year to €6.8 billion. In comparison to the end of 2011, the level increased slightly by €30 million. "We are continuing to move in the right direction and still plan to reduce our net indebtedness to less than €6.5 billion by the end of the year", explained Wolfgang Schäfer, Continental's Chief Financial Officer. He further emphasized "We are also recording further progress in the gearing ratio while systematically pursuing our goal of achieving fewer than 60% in the medium term." The gearing ratio improved from 103.3% in the previous year to 77.5% at the end of September 2012.
In the first three quarters of this year, Continental invested €1.3 billion, approximately €240 million more than in the same period of the previous year. "Our investments are currently focused clearly on the Rubber Group: In the first nine months of this year, we invested €641 million in the Tire and ContiTech divisions in order to further reduce our dependence on the highly seasonal automotive industry while also continuing to expand our position in the tire markets, particularly in the BRIC countries," stated Schäfer. He also indicated that the investment volume for the year as a whole would amount to approximately €2 billion.
Continental created 6,121 jobs worldwide in the first nine months of the current year. As of the end of the third quarter of 2012, the Continental Corporation had 169,909 employees. This increase was primarily due to growth in sales volumes in the Automotive Group and expansion of capacity in the Tire division.
Sales in the Automotive Group improved to €14.8 billion after nine months, with an adjusted margin of 7.7% after 8.0% in the previous year. "This is a stable result in view of the headwind in Europe, which we are experiencing here in our Powertrain division in particular. We do not expect the market environment to become easier in the coming quarters," said Degenhart.
The Rubber Group generated sales of €9.9 billion. The positive development of raw material costs had a favorable influence on the adjusted margin (16.3%). "In spite of a weak development of the winter tire markets at the start of the season, we are confident of reachieving the previous year's level of approximately 20 million winter tires sold in the current year as well. The recently published test reports have brought about a very positive response to our tires and give us grounds to be positive in this respect," explained Degenhart.
Continental Reifen Deutschland GmbH
With sales of €30.5 billion in 2011, Continental is among the leading automotive suppliers worldwide. As a supplier of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires, and technical elastomers, Continental contributes to enhanced driving safety and global climate protection. Continental is also an expert partner in networked automobile communication. Continental currently has approximately 170,000 employees in 46 countries.