Earnings Release • Nov 3, 2011
Earnings Release
Open in ViewerOpens in native device viewer
News Details
Corporate | 3 November 2011 08:32
Continental AG: Continental Confirms Outlook and Sees Still-Strong Order Books
Continental AG / Key word(s): Quarter Results
03.11.2011 / 08:32
Press Release
Continental Confirms Outlook and Sees Still-Strong Order Books
– Automotive supplier grows sales to about EUR22.6 billion after nine months
– Adjusted EBIT of approximately EUR2.2 billion / margin of 9.9%
– Net income at EUR894 million more than double year-on-year
– Raw material costs will rise to exceed EUR950 million for the corporation as a whole
Hanover, November 3, 2011. The international automotive supplier Continental is right on target and is confirming its forecast for the current fiscal year. 'We are still expecting sales to reach at least EUR29.5 billion. In addition, we still feel we can achieve an adjusted EBIT margin of some 10% for the full year 2011, even if this must meanwhile be viewed as an ambitious target owing to the higher-than-expected burden we are experiencing from raw material costs,' said Continental Executive Board Chairman Dr. Elmar Degenhart on Thursday. 'We expect that positive effects primarily from the very good utilization of our capacities will roughly offset the negative impact from the increasing raw material costs. Moreover, at present we still see strong order books.'
Degenhart explained that the Rubber Group must cope with a burden of more than EUR900 million in raw material costs in the current fiscal year instead of the previously anticipated EUR850 million, in particular because increasing prices for synthetic rubber impacted operating results earlier than had been expected. 'Furthermore, the Automotive Group is contending with additional costs totaling a maximum of EUR50 million in the fourth quarter as a result of the recent spike in rare earth prices. In the course of the year, for instance, the price of dysprosium has soared nearly twentyfold from its low level in 2010,' said Degenhart. Dysprosium is used in manufacturing magnets for electric motors, as well as other products.
Year-on-year, the Continental Corporation raised its sales in the first nine months of 2011 by 18% to EUR22.6 billion. At the same time, the automotive supplier achieved an EBIT of EUR1.9 billion, about EUR540 million or nearly 40% more than in the same period last year. The EBIT margin is 8.5%, compared with 7.2% in 2010.
Adjusted EBIT before acquisition-related amortization and special effects rose by roughly EUR433 million or nearly one quarter to EUR2.2 billion. This represents an adjusted EBIT margin of 9.9%, compared with 9.4% in 2010. In the first nine months of this year, net income attributable to the shareholders of the parent grew by EUR531 million, and was far more than double at EUR894 million. Earnings per share increased to EUR4.47 from EUR1.82 for the third quarter of 2010. At the end of September, Continental had a total workforce of 164,078 employees , approximately 18,000 more than at the end of September 2010.
Chief financial officer Wolfgang Schäfer pointed out that in the first three quarters of 2011 Continental had achieved a free cash flow of minus EUR54 million, a year-on-year improvement of nearly EUR116 million. 'We confirm our target of generating free cash flow of more than EUR500 million and reducing our net indebtedness to well below EUR7 billion by the end of this year,' said Schäfer. At the end of the third quarter, net indebtedness stood at just under EUR7.3 billion, nearly EUR800 million less than at the end of September 2010. The gearing ratio was 103.3% as opposed to 137.9% at the end of September 2010. On September 30, 2011, the corporation had at its disposal liquidity reserves of just under EUR3.9 billion. 'With about EUR1.5 billion in cash and cash reserves, we had nearly EUR500 million more available to us than on the same date in 2010,' explained Schäfer. Unutilized, committed credit lines amounted to some EUR2.3 billion, approximately as high as they were at the end of September 2010.
'Thanks to contributions made by both the Automotive and Rubber Groups, we are well on our way to achieving the annual targets we revised upward in the summer. In the Automotive Group , we posted sales volumes of approximately EUR13.7 billion after three quarters. This represents 15% growth year-on-year after nine months, which is substantially stronger than the growth experienced by our key markets,' said Degenhart. 'At the end of three quarters, we can report an adjusted EBIT of approximately EUR1.1 billion. The adjusted EBIT margin was 8.1%, compared with 6.5% for the same period of 2010.'
The Rubber Group boosted its sales in the first nine months of 2011 year-on-year by about EUR1.5 billion to approximately EUR8.9 billion. Despite raw material costs amounting to EUR765 million in the first three quarters, the adjusted EBIT rose roughly EUR113 million to nearly EUR1.2 billion. The adjusted EBIT margin was 13.5% after 14.7% for the same period of 2010.
In the first three quarters of 2011, the Continental Corporation invested roughly EUR1 billion after EUR782 million in the same period of 2010. Approximately EUR1.2 billion was spent on research and development , EUR82 million more than in the first nine months of 2010. 'Our successes this year and the customer interest in the new products we showcased at the latest IAA Motor Show demonstrate that we were right in deciding to invest more than EUR1.3 billion in research and development (R&D) even in the 2009 crisis year. At 5.4% of sales, our R&D rate is now returning to the normal level, after 6% a year ago and 6.7% in 2009,' said Degenhart.
With sales of EUR26 billion in 2010, 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 164,000 employees in 45 countries.
| Dr. Felix Gress Senior Vice President Corporate Communications Continental AG Vahrenwalder Str. 9 30165 Hanover, Germany Phone: +49 511 938-1485 Fax: +49 511 938-1055 E-mail: [email protected] |
Hannes Boekhoff Vice President Media Relations Continental AG Vahrenwalder Str. 9 30165 Hanover, Germany Phone: +49 511 938-1278 Fax: +49 511 938-1016 E-mail: [email protected] |
This press release is available in the following languages: Chinese, Czech, English, French, German, Hungarian, Japanese, Portuguese (Brazil), Portuguese (Portugal), Romanian, Russian, Slovakian, Spanish.
Online media database : www.mediacenter.continental-corporation.com
Financial reports: www.continental-ir.de
End of Corporate News
03.11.2011 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
DGAP’s Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
| Language: | English |
| Company: | Continental AG |
| Vahrenwalder Straße 9 | |
| 30165 Hannover | |
| Germany | |
| Phone: | +49 (0)511 938-1068 |
| Fax: | +49 (0)511 938-1080 |
| E-mail: | [email protected] |
| Internet: | www.conti.de |
| ISIN: | DE0005439004 |
| WKN: | 543900 |
| Listed: | Regulierter Markt in Frankfurt (Prime Standard), Hamburg, Hannover, SIX, Stuttgart; Freiverkehr in Berlin, Düsseldorf, München; Terminbörse EUREX; Luxembourg |
| End of News | DGAP News-Service |
| - - - |
| 144537 03.11.2011 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.