Earnings Release • May 5, 2011
Earnings Release
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Corporate | 5 May 2011 09:28
Continental AG: Continental Reports Strong First Quarter 2011
Continental AG / Key word(s): Quarter Results
05.05.2011 / 09:28
Press Release
Continental Lays Firm Foundation for the Achievement of Annual Targets with Successful First Quarter
– Automotive supplier increases sales by 23% to more than EUR7.3 billion
– EBIT rises to EUR634 million / 8.6% sales margin
– Impact of raw material costs, particularly for natural rubber, still a challenge
– Net income up by 62% to EUR368 million due to tax income
Hanover, May 5, 2011. In the first three months of 2011, the Continental Corporation posted the most successful quarter since it acquired Siemens VDO at the end of 2007, setting new record highs for sales, EBIT and profit. ‘With the good start to the new year, we have laid the foundation to comfortably achieve our targets for the year, as things look at present,’ said Continental Executive Board chairman Dr. Elmar Degenhart on Thursday in Hanover. ‘We also assume that we will spend more on investments than the EUR1.5 billion currently planned, so that we can boost our dynamic and profitable growth even further. Nonetheless, we still want to generate at least EUR500 million free cash flow and reduce our net indebtedness to below EUR7 billion by the end of the year.’
The international automotive supplier increased its sales in the first three months of 2011 by 23% year-on-year to more than EUR7.3 billion. At the same time, EBIT rose 28% to approximately EUR634 million, with an EBIT margin of 8.6% after 8.2% a year ago. The corporation’s adjusted EBIT (adjusted in particular for acquisition-related amortization and special effects) amounted to about EUR734 million after EUR607 million a year ago, with a nearly unchanged margin of 10% on a higher sales level.
In the first quarter of 2011, the net income attributable to the shareholders of the parent rose 62% year-on-year to EUR368 million, corresponding to earnings per share of EUR1.84 after EUR1.14 one year ago. ‘Here, however, it must be taken into account that we were able to recognize a one-off tax income of EUR68.2 million. This also had a substantial effect on the tax rate in the first quarter, which at 17.2% is considerably lower than the rate of 35% or so we are expecting for the year as a whole,’ explained Continental CFO Wolfgang Schäfer.
Schäfer also pointed out that on March 31, 2011, the company had at its disposal liquidity reserves totaling nearly EUR3.9 billion, consisting of cash and cash equivalents of almost
EUR1.5 billion as well as unused credit lines totaling some EUR2.4 billion. This made it possible for Continental to reduce the credit volume of the VDO facility by EUR500 million to currently
EUR6 billion as part of the modifications to the VDO facility that went into effect at the beginning of April. Owing to seasonal effects, net indebtedness increased slightly to EUR7.6 billion compared with year-end 2010. At 117%, the gearing ratio at the end of March was however nearly unchanged from the end of 2010. ‘We are still assuming that the ratio could fall below 100% by the end of the year. The goal is to achieve 70% in the medium term,’ said Schäfer.
Degenhart pointed out that the company has once again increased its workforce substantially: ‘After creating some 14,000 jobs worldwide already in 2010, we added another 6,500 in the first quarter of this year. Of those new jobs, a good 1,600 were in Germany and nearly 1,000 in China, where our workforce is growing as planned at an above-average rate. All in all, we will create another several thousand jobs worldwide this year.’
Degenhart also stressed that both the Automotive Group and Rubber Group contributed to the corporation’s strong growth. The Automotive Group’s first quarter sales were up by 20% year-on-year to about EUR4.5 billion. An EBIT of EUR257 million was reported after EUR182 million one year ago. The Rubber Group posted sales of about EUR2.8 billion, representing an increase of 27%. The Rubber Group’s reported EBIT rose from approximately EUR313 million one year ago to nearly EUR393 million in the first quarter of 2011.
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 155,000 employees in 45 countries.
| Dr. Felix Gress Senior Vice President of Corporate Communications Continental AG Vahrenwalder Strasse 9 30165 Hanover, Germany Phone: +49 511 938-1485 Fax: +49 511 938-1055 [email protected] |
Hannes Boekhoff Vice President of Media Relations Continental AG Vahrenwalder Strasse 9 30165 Hanover, Germany Phone: +49 511 938-1278 Fax: +49 511 938-1055 [email protected] |
The press release is also available in following languages: Chinese, Czech, English, French, German, Hungarian, Japanese, Portuguese (Brazil), Portuguese (Portugal), Romanian, Russian, Slovakian, Spanish.
Media database: www.mediacenter.continental-corporation.com
Financial reports: www.continental-ir.de
End of Corporate News
05.05.2011 Dissemination of a Corporate News, transmitted by DGAP – a company of EquityStory AG.
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| Language: | English |
| Company: | Continental AG |
| Vahrenwalder Straße 9 | |
| 30165 Hannover | |
| Deutschland | |
| 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 |
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| 123104 05.05.2011 |
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