Continental AG

Earnings Release • Oct 31, 2012

News Details

Corporate | 31 October 2012 08:35

Continental confirms annual targets for 2012 despite difficult market environment

Continental AG / Key word(s): Quarter Results

31.10.2012 / 08:35

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* Automotive supplier still expects sales of more than EUR32.5 billion
* Consolidated sales climb to EUR24.6 billion after three quarters
* Adjusted EBIT reaches almost EUR2.7 billion / 10.9% margin
* Further improvement in indebtedness ratios after nine months

Hanover, October 31, 2012. The international automotive supplier
Continental is confirming the forecast for fiscal 2012 that it raised after
the first half of the year, despite increasing un-certainty 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 EUR32.5 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 EUR24.6 billion. EBIT rose by EUR437 million or 22.8%
year-on-year to EUR2.4 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 EUR434 million or 19.5%
year-on-year to al-most EUR2.7 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 EUR1.5 billion,
corresponding to earnings per share of EUR7.26 after EUR4.47 per share in
the previous year.

In the first three quarters, Continental reduced its net indebtedness by
almost EUR500 million as compared to the same period of the previous year
to EUR6.8 billion. In comparison to the end of 2011, the level increased
slightly by EUR30 million. 'We are continuing to move in the right
direction and still plan to reduce our net indebtedness to less than EUR6.5
billion by the end of the year', explained Wolfgang Schäfer, Continental's
Chief Financial Officer. He further em-phasized '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
im-proved 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 EUR1.3
billion, approximately EUR240 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 EUR641 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 in-vestment volume for the year
as a whole would amount to approximately EUR2 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 EUR14.8 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 EUR9.9 billion. The positive
development of raw material costs had a favorable influence on the adjusted
margin (16.3%). 'In spite of a weak develop-ment of the winter tire markets
at the start of the season, we are confident of re-achieving 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.

With sales of EUR30.5 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.

Dr. Felix Gress
Senior Vice President of
Corporate Communications
Continental AG
Vahrenwalder Strasse 9
30165 Hanover, Germany
Phone: +49 511 938-1485; fax: -1055
E-mail: prkonzern@conti.de
Hannes Boekhoff
Vice President for
Media Relations
Continental AG
Vahrenwalder Strasse 9
30165 Hanover, Germany
Phone: +49 511 938-1278; fax: -1016
E-mail: corporate-media-relations@conti.de

This press release is available in the following languages: Chinese, Czech,
Dutch, 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.com

End of Corporate News

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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: ir@conti.de
Internet: www.conti.de
ISIN: DE0005439004
WKN: 543900
Indices: DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hamburg,
Hannover, Stuttgart; Freiverkehr in Berlin, Düsseldorf,
München; Terminbörse EUREX; Luxembourg, SIX

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190926 31.10.2012