Quarterly Report • Nov 10, 2021
Quarterly Report
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In the third quarter of its 2021 anniversary year, Continental set the strategic course for the next successful chapter in its history by making its previously announced structural adjustments. At the same time, the delivery situation for electronic components worsened. This had a significant impact on sales and earnings, which was only partially offset by the positive trend in sales volumes of replacement and industrial products.
The Rubber Technologies group sector achieved robust earnings despite the mounting burdens associated with rising raw material prices and energy and logistics costs, thanks primarily to the strong replacement-tire business and the industrial product business of ContiTech.
Though the global semiconductor shortage worsened in the third quarter due to the coronavirus crisis in Southeast Asia, it has likely reached its peak. The Automotive Technologies group sector, whose product portfolio comprises a high share of electronics, was the most affected. Although Continental expects the supply situation to improve in the coming months, the semiconductor shortage and rising procurement costs are likely to continue to have a negative impact on the automotive industry in the fourth quarter of this year and throughout 2022.
Continental successfully completed the spin-off of Vitesco Technologies in the past quarter. The carrying amount of the spun off net assets amounted to €2.8 billion. The disposal posting was made against the liability from non-cash dividends – updated to be equivalent to the carrying amounts – that was recognized pursuant to the resolution of the Annual Shareholders' Meeting on April 29, 2021. As a result, reporting is generally based on continuing operations.
As part of the new structure announced on September 30, 2021, the Tires and ContiTech business areas (currently consolidated in the Rubber Technologies group sector) will become independent group sectors with effect from January 1, 2022. At the same time, Continental will comprehensively realign the Automotive Technologies group sector (from 2022: Automotive) and create five dynamic, flexible business areas whose structure will be geared to the strategic action fields and market development of Automotive Technologies.
At €8.0 billion, consolidated sales were down year-on-year in the third quarter (Q3 2020: €8.7 billion, -7.4 percent) due to significantly lower vehicle production. Before changes in the scope of consolidation and exchange-rate effects, sales fell by 8.5 percent. Adjusted EBIT decreased year-on-year to €419 million (Q3 2020: €727 million, -42.4 percent). This resulted in an adjusted EBIT margin of 5.2 percent (Q3 2020: 8.4 percent). Net income totaled €309 million (Q3 2020: -€719 million). Free cash flow before acquisitions, divestments and carve-out effects for continuing and discontinued operations amounted to €12 million in the third quarter (Q3 2020: €1.8 billion).
Global automotive production suffered from the shortage of semiconductors and therefore did not reach the level of the previous year's quarter. The supply of components was the limiting factor, with customer demand remaining very high. According to preliminary figures, global automotive production amounted to 16.5 million units from July to September 2021, down nearly 20 percent from the same period of the previous year (Q3 2020: 20.5 million units). In North America, production figures fell by around 25 percent to 3.0 million units (Q3 2020: 4.0 million units), in Europe by roughly 30 percent to 3.0 million units (Q3 2020: 4.3 million units) and in China by around 17 percent to 5.3 million units (Q3 2020: 6.4 million units).
As reported on October 22, 2021, Continental is adjusting its outlook for fiscal 2021 due to the following factors:
Assuming that exchange rates in the fourth quarter of 2021 do not materially differ to those of September 30, 2021, the aforementioned factors mean that the following changes have been made to the 2021 outlook for continuing operations:
Sales in the Automotive Technologies group sector decreased in the third quarter of 2021 by 15.9 percent to €3.5 billion (Q3 2020: €4.1 billion). This decline was due to lower vehicle production. The adjusted EBIT margin came to -2.3 percent (Q3 2020: 1.9 percent), and organic growth came to -17.3 percent. Despite the difficult environment, Continental generated further orders for display solutions, taking the sales volume associated with these orders to a total of around €5.5 billion. For Automotive Technologies, Continental expects sales of around €14.5 billion to €15.0 billion (previously: €16.0 billion to €16.5 billion) and, as a result of the lower sales expectations, an adjusted EBIT margin in the range of around -2.0 to -2.5 percent (previously: 0.5 to 1.0 percent) for the year as a whole. The outlook continues to include additional logistics expenses of around €200 million in connection with shortages of semiconductor components, while additional expenses for research and development in the Autonomous Mobility and Safety business area are now expected to total around €100 million to €150 million (previously: €150 million to €200 million).
Sales in the Rubber Technologies group sector increased by 1.2 percent to €4.4 billion in the third quarter of 2021 (Q3 2020: €4.3 billion). The adjusted EBIT margin fell to 11.3 percent (Q3 2020: 15.0 percent). Organic sales growth came to 0.5 percent. The Tires business area continued to benefit from the strong replacement-tire business for trucks and passenger cars, while ContiTech boosted its sales of industrial products, namely products for off-highway applications, surface materials for industrial use and window and pool films for home and garden. In addition, the sales volume of drive belts for the industrial replacement market also increased. At the same time, rising raw material costs are having an increasingly detrimental impact on business in Rubber Technologies. In the third quarter, the costs rose year-onyear by around €225 million. For the year as a whole, sales of around €17.2 billion to €17.5 billion (previously: €17.2 billion to €17.8 billion) are expected, with an adjusted EBIT margin of around 12.3 to 12.7 percent (previously: 12.5 to 13.0 percent). As part of our adjusted EBIT margin range, we assume a year-on-year rise in raw material costs of around €550 million (previously: €500 million) as well as price increases for energy and logistics. The higher costs relate primarily to the Tires business area.
Following the spin-off of Vitesco Technologies, the Contract Manufacturing group sector is being reported for the first time. It comprises the continuing operations of the former Powertrain Technologies group sector. Sales amounted to €203 million in the third quarter of 2021, and the adjusted EBIT margin was 11.9 percent; internal cost allocation had a positive effect on the latter. For the year as a whole, sales of around €800 million to €900 million and an adjusted EBIT margin of around 9 percent are expected.
As a consequence of the spin-off of Vitesco Technologies, the number of employees decreased to around 192,000 at the end of the third quarter of 2021, of whom around 40,000 are engineers and around 17,000 are software and IT specialists. Prior to the spin-off, Continental employed approximately 233,000 people.
The spin-off of parts of the Powertrain business area has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
The following table shows the figures for continuing operations for the reporting and comparative periods. Only net income attributable to the shareholders of the parent and the corresponding figures for earnings per share refer to the Continental Group as a whole, comprising continuing and discontinued operations.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| € millions | 2021 | 2020 | 2021 | 2020 | |
| Sales | 24,970.2 | 22,743.9 | 8,040.5 | 8,679.1 | |
| EBITDA | 3,221.1 | 1,655.3 | 975.2 | 605.1 | |
| in % of sales | 12.9 | 7.3 | 12.1 | 7.0 | |
| EBIT | 1,553.8 | –779.6 | 418.5 | –673.6 | |
| in % of sales | 6.2 | –3.4 | 5.2 | –7.8 | |
| Net income attributable to the shareholders of the parent | 1,302.0 | –1,168.1 | 309.1 | –719.3 | |
| Basic earnings per share in € | 6.51 | –5.84 | 1.55 | –3.60 | |
| Diluted earnings per share in € | 6.51 | –5.84 | 1.55 | –3.60 | |
| Research and development expenses (net) | 1,987.7 | 2,010.4 | 657.2 | 638.5 | |
| in % of sales | 8.0 | 8.8 | 8.2 | 7.4 | |
| Depreciation and amortization1 | 1,667.3 | 2,434.9 | 556.7 | 1,278.7 | |
| thereof impairment2 | 13.1 | 734.2 | 3.3 | 726.3 | |
| Capital expenditure3 | 1,107.2 | 1,130.2 | 484.0 | 368.2 | |
| in % of sales | 4.4 | 5.0 | 6.0 | 4.2 | |
| Operating assets as at September 30 | 18,806.0 | 18,727.0 | |||
| Number of employees as at September 304 | 192,495 | 194,443 | |||
| Adjusted sales5 | 24,970.1 | 22,543.4 | 8,040.5 | 8,678.2 | |
| Adjusted operating result (adjusted EBIT)6 | 1,676.1 | 721.1 | 419.1 | 727.3 | |
| in % of adjusted sales | 6.7 | 3.2 | 5.2 | 8.4 | |
| Free cash flow | 733.3 | 366.3 | –31.1 | 1,516.5 | |
| Net indebtedness as at September 30 | 3,964.4 | n. a. | |||
| Gearing ratio in % | 32.3 | n. a. |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversal of impairment losses. Expenses from derecognitions of brand values are likewise included in the comparative period.
3 Capital expenditure on property, plant and equipment, and software.
4 Excluding trainees.
5 Before changes in the scope of consolidation.
The spin-off of parts of the Powertrain business area has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
The tables on the key figures for the group sectors show only the figures for continuing operations in the reporting and comparative periods for all group sectors. Following the spin-off of Vitesco Technologies, the Contract Manufacturing group sector is being reported for the first time. It comprises the continuing operations of the former Powertrain Technologies group sector. All key figures for the group sectors reflect this over the entire reporting period and are adjusted accordingly for the comparative period.
| January 1 to September 30 | Third Quarter | |||||
|---|---|---|---|---|---|---|
| Automotive Technologies in € millions | 2021 | 2020 | 2021 | 2020 | ||
| Sales | 11,386.8 | 10,939.0 | 3,476.6 | 4,132.2 | ||
| EBITDA | 558.8 | 146.5 | 106.4 | 59.2 | ||
| in % of sales | 4.9 | 1.3 | 3.1 | 1.4 | ||
| EBIT | –200.9 | –1,320.4 | –153.1 | –897.4 | ||
| in % of sales | –1.8 | –12.1 | –4.4 | –21.7 | ||
| Depreciation and amortization1 | 759.7 | 1,466.9 | 259.5 | 956.6 | ||
| thereof impairment2 | –2.1 | 717.2 | –0.2 | 712.8 | ||
| Capital expenditure3 | 625.5 | 570.9 | 278.8 | 190.2 | ||
| in % of sales | 5.5 | 5.2 | 8.0 | 4.6 | ||
| Operating assets as at September 30 | 8,086.3 | 8,243.0 | ||||
| Number of employees as at September 304 | 89,174 | 90,820 | ||||
| Adjusted sales5 | 11,386.8 | 10,745.9 | 3,476.6 | 4,132.2 | ||
| Adjusted operating result (adjusted EBIT)6 | –70.6 | –331.5 | –81.5 | 77.2 | ||
| in % of adjusted sales | –0.6 | –3.1 | –2.3 | 1.9 |
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| Rubber Technologies in € millions | 2021 | 2020 | 2021 | 2020 | |
| Sales | 12,969.6 | 11,266.5 | 4,385.0 | 4,333.3 | |
| EBITDA | 2,512.8 | 1,580.0 | 743.3 | 637.7 | |
| in % of sales | 19.4 | 14.0 | 17.0 | 14.7 | |
| EBIT | 1,664.0 | 672.0 | 462.5 | 334.0 | |
| in % of sales | 12.8 | 6.0 | 10.5 | 7.7 | |
| Depreciation and amortization1 | 848.8 | 908.0 | 280.8 | 303.7 | |
| thereof impairment2 | 1.3 | 14.9 | 0.0 | 13.5 | |
| Capital expenditure3 | 434.2 | 486.0 | 188.9 | 147.5 | |
| in % of sales | 3.3 | 4.3 | 4.3 | 3.4 | |
| Operating assets as at September 30 | 9,790.8 | 10,029.5 | |||
| Number of employees as at September 304 | 99,927 | 99,786 | |||
| Adjusted sales5 | 12,969.5 | 11,259.1 | 4,385.0 | 4,332.4 | |
| Adjusted operating result (adjusted EBIT)6 | 1,748.0 | 1,068.3 | 496.5 | 650.9 | |
| in % of adjusted sales | 13.5 | 9.5 | 11.3 | 15.0 |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversal of impairment losses. Expenses from derecognitions of brand values are likewise included in the comparative period. 3 Capital expenditure on property, plant and equipment, and software.
4 Excluding trainees.
5 Before changes in the scope of consolidation.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| Contract Manufacturing in € millions | 2021 | 2020 | 2021 | 2020 | |
| Sales | 692.8 | 686.2 | 202.7 | 254.0 | |
| EBITDA | 177.0 | 2.4 | 77.9 | –71.4 | |
| in % of sales | 25.5 | 0.3 | 38.4 | –28.1 | |
| EBIT | 124.6 | –46.3 | 63.2 | –86.6 | |
| in % of sales | 18.0 | –6.7 | 31.2 | –34.1 | |
| Depreciation and amortization1 | 52.4 | 48.7 | 14.7 | 15.2 | |
| thereof impairment2 | 13.7 | 2.1 | 3.3 | 0.0 | |
| Capital expenditure3 | 10.8 | 21.3 | 4.2 | 9.1 | |
| in % of sales | 1.6 | 3.1 | 2.1 | 3.6 | |
| Operating assets as at September 30 | 807.1 | 271.5 | |||
| Number of employees as at September 304 | 2,944 | 3,432 | |||
| Adjusted sales5 | 692.8 | 686.2 | 202.7 | 254.0 | |
| Adjusted operating result (adjusted EBIT)6 | 97.4 | 66.3 | 24.1 | 22.4 | |
| in % of adjusted sales | 14.1 | 9.7 | 11.9 | 8.8 |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversal of impairment losses.
3 Capital expenditure on property, plant and equipment, and software.
4 Excluding trainees.
5 Before changes in the scope of consolidation.
The spin-off of parts of the Powertrain segment has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
The items in the consolidated statement of income show the figures for continuing operations in the reporting and comparative periods. Net income comprises earnings after tax from continuing operations and discontinued operations.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| € millions | 2021 | 2020 | 2021 | 2020 |
| Sales | 24,970.2 | 22,743.9 | 8,040.5 | 8,679.1 |
| Cost of sales | –18,991.8 | –17,525.9 | –6,257.3 | –6,375.6 |
| Gross margin on sales | 5,978.4 | 5,218.0 | 1,783.2 | 2,303.5 |
| Research and development expenses | –2,546.5 | –2,435.8 | –845.6 | –788.3 |
| Selling and logistics expenses | –1,772.8 | –1,694.0 | –605.8 | –546.4 |
| Administrative expenses | –749.2 | –684.1 | –237.4 | –220.9 |
| Other income | 1,232.0 | 897.6 | 479.7 | 265.8 |
| Other expenses | –638.1 | –2,087.9 | –193.2 | –1,690.4 |
| Income from equity-accounted investees | 49.6 | 6.1 | 37.6 | 3.0 |
| Other income from investments | 0.4 | 0.5 | 0.0 | 0.1 |
| EBIT | 1,553.8 | –779.6 | 418.5 | –673.6 |
| Interest income | 64.3 | 66.0 | 20.8 | 20.2 |
| Interest expense | –171.2 | –189.5 | –52.9 | –67.8 |
| Effects from currency translation | –65.0 | –40.1 | –24.5 | –60.4 |
| Effects from changes in the fair value of derivative instruments, and other valuation effects |
58.6 | 67.8 | –34.1 | 34.1 |
| Financial result | –113.3 | –95.8 | –90.7 | –73.9 |
| Earnings before tax from continuing operations | 1,440.5 | –875.4 | 327.8 | –747.5 |
| Income tax expense | –264.5 | 116.8 | –64.8 | 110.6 |
| Earnings after tax from continuing operations | 1,176.0 | –758.6 | 263.0 | –636.9 |
| Earnings after tax from discontinued operations | 156.9 | –389.8 | 54.7 | –66.4 |
| Net income | 1,332.9 | –1,148.4 | 317.7 | –703.3 |
| Non-controlling interests | –30.9 | –19.7 | –8.6 | –16.0 |
| Net income attributable to the shareholders of the parent | 1,302.0 | –1,168.1 | 309.1 | –719.3 |
| Earnings per share (in €) relating to | ||||
| Basic earnings per share from continuing operations | 5.73 | –3.86 | 1.27 | –3.26 |
| Consolidated basic earnings per share | 6.51 | –5.84 | 1.55 | –3.60 |
| Diluted earnings per share from continuing operations | 5.73 | –3.86 | 1.27 | –3.26 |
| Consolidated diluted earnings per share | 6.51 | –5.84 | 1.55 | –3.60 |
The spin-off of parts of the Powertrain segment has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
The items in the consolidated statement of comprehensive income show the figures for the Continental Group as a whole in the reporting and comparative periods. In addition, comprehensive income is shown separately for continuing operations and discontinued operations.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| € millions | 2021 | 2020 | 2021 | 2020 |
| Net income | 1,332.9 | –1,148.4 | 317.7 | –703.3 |
| Items that will not be reclassified to profit or loss | ||||
| Remeasurement of defined benefit plans1 | 849.9 | –251.6 | 205.2 | 43.4 |
| Fair value adjustments1 | 871.5 | –272.8 | 212.4 | 30.9 |
| Investments in equity-accounted investees2 | –0.1 | 0.0 | –0.1 | 0.0 |
| Currency translation1 | –21.5 | 21.2 | –7.1 | 12.5 |
| Other investments | 86.1 | –3.2 | –27.7 | –3.2 |
| Fair value adjustments | 85.8 | –0.3 | –28.3 | –0.3 |
| Investments in equity-accounted investees | 0.9 | –2.9 | 0.9 | –2.9 |
| Currency translation1 | –0.6 | — | –0.3 | — |
| Tax on other comprehensive income | –231.9 | –28.0 | –66.0 | –4.1 |
| Items that may be reclassified subsequently to profit or loss | ||||
| Currency translation1 | 459.4 | –1,028.9 | 37.9 | –356.4 |
| Difference from currency translation1 | 398.2 | –1,031.7 | –24.9 | –359.2 |
| Reclassification adjustments to profit and loss | 68.0 | 0.7 | 69.6 | 0.7 |
| Investments in equity-accounted investees2 | –6.8 | 2.1 | –6.8 | 2.1 |
| Tax on other comprehensive income | –1.0 | — | –1.0 | — |
| Other comprehensive income | 1,162.5 | –1,311.7 | 148.4 | –320.3 |
| Comprehensive income | 2,495.4 | –2,460.1 | 466.1 | –1,023.6 |
| Attributable to non-controlling interests | –51.4 | 32.4 | –16.9 | 20.1 |
| Attributable to the shareholders of the parent | 2,444.0 | –2,427.7 | 449.2 | –1,003.5 |
| The share of comprehensive income attributable to the shareholders of the parent is as follows: |
||||
| Continuing operations | 2,030.1 | –1,796.4 | 273.5 | –882.7 |
| Discontinued operations | 413.9 | –631.3 | 175.7 | –120.8 |
1 Including non-controlling interests.
2 Including taxes.
The spin-off of parts of the Powertrain segment has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
Following the deconsolidation of Vitesco Technologies, all items in the reporting period represent continuing operations. The figures for the comparative periods show continuing and discontinued operations.
| Assets in € millions | September 30, 2021 | December 31, 2020 | September 30, 2020 |
|---|---|---|---|
| Goodwill | 3,616.7 | 4,361.6 | 4,373.8 |
| Other intangible assets | 1,062.0 | 1,346.9 | 1,516.4 |
| Property, plant and equipment | 10,988.4 | 13,760.6 | 13,698.7 |
| Investment property | 18.7 | 12.2 | 11.3 |
| Investments in equity-accounted investees | 309.3 | 351.3 | 389.7 |
| Other investments | 153.8 | 123.4 | 163.6 |
| Deferred tax assets | 2,610.9 | 2,751.4 | 2,558.1 |
| Defined benefit assets | 83.5 | 82.7 | 10.2 |
| Long-term derivative instruments and interest-bearing investments | 119.1 | 142.6 | 126.8 |
| Long-term other financial assets | 169.7 | 161.0 | 119.8 |
| Long-term other assets | 16.7 | 24.2 | 26.5 |
| Non-current assets | 19,148.8 | 23,117.9 | 22,994.9 |
| Inventories | 4,936.6 | 4,238.2 | 4,427.4 |
| Trade accounts receivable | 7,235.4 | 7,353.2 | 7,989.5 |
| Short-term contract assets | 96.8 | 119.1 | 118.4 |
| Short-term other financial assets | 123.4 | 146.8 | 148.7 |
| Short-term other assets | 1,067.9 | 1,352.5 | 1,371.4 |
| Income tax receivables | 297.8 | 234.8 | 239.5 |
| Short-term derivative instruments and interest-bearing investments | 199.5 | 114.0 | 141.6 |
| Cash and cash equivalents | 2,285.9 | 2,938.7 | 2,515.5 |
| Assets held for sale | 110.0 | 22.8 | 18.2 |
| Current assets | 16,353.3 | 16,520.1 | 16,970.2 |
| Total assets | 35,502.1 | 39,638.0 | 39,965.1 |
| Equity and liabilities in € millions | September 30, 2021 | December 31, 2020 | September 30, 2020 |
|---|---|---|---|
| Subscribed capital | 512.0 | 512.0 | 512.0 |
| Capital reserves | 4,155.6 | 4,155.6 | 4,155.6 |
| Retained earnings | 10,105.6 | 11,960.2 | 11,753.9 |
| Other comprehensive income | –2,895.8 | –4,365.4 | –4,168.6 |
| Equity attributable to the shareholders of the parent | 11,877.4 | 12,262.4 | 12,252.9 |
| Non-controlling interests | 413.9 | 376.7 | 381.3 |
| Total equity | 12,291.3 | 12,639.1 | 12,634.2 |
| Long-term employee benefits | 4,499.3 | 6,109.9 | 5,837.1 |
| Deferred tax liabilities | 358.6 | 168.6 | 211.8 |
| Long-term provisions for other risks and obligations | 829.9 | 1,242.6 | 1,467.8 |
| Long-term indebtedness | 4,593.3 | 5,144.4 | 5,138.5 |
| Long-term other financial liabilities | 7.0 | 6.7 | 31.0 |
| Long-term contract liabilities | 7.3 | 7.0 | 12.7 |
| Long-term other liabilities | 63.0 | 63.9 | 47.2 |
| Non-current liabilities | 10,358.4 | 12,743.1 | 12,746.1 |
| Short-term employee benefits | 1,270.0 | 1,236.5 | 1,351.6 |
| Trade accounts payable | 5,376.2 | 5,933.1 | 6,008.7 |
| Short-term contract liabilities | 205.9 | 291.0 | 279.6 |
| Income tax payables | 614.3 | 790.1 | 930.2 |
| Short-term provisions for other risks and obligations | 1,168.8 | 1,725.4 | 1,356.6 |
| Short-term indebtedness | 1,975.6 | 2,190.0 | 2,568.8 |
| Short-term other financial liabilities | 1,289.2 | 1,287.9 | 1,114.5 |
| Short-term other liabilities | 914.8 | 801.8 | 974.8 |
| Liabilities held for sale | 37.6 | — | — |
| Current liabilities | 12,852.4 | 14,255.8 | 14,584.8 |
| Total equity and liabilities | 35,502.1 | 39,638.0 | 39,965.1 |
The spin-off of parts of the Powertrain segment has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
The items in the consolidated statement of cash flows show the figures for the Continental Group as a whole in the reporting and comparative periods. In addition, cash flow arising from operating activities, investing activities and financing activities is shown separately for continuing operations and discontinued operations.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| € millions | 2021 | 2020 | 2021 | 2020 | |
| Net income | 1,332.9 | –1,148.4 | 317.7 | –703.3 | |
| Income tax expense | 427.0 | –60.6 | 118.5 | –49.9 | |
| Financial result | 108.0 | 142.8 | 93.4 | 79.8 | |
| EBIT | 1,867.9 | –1,066.2 | 529.6 | –673.4 | |
| Interest paid | –130.6 | –120.5 | –43.7 | –49.6 | |
| Interest received | 29.3 | 25.5 | 3.5 | 7.3 | |
| Income tax paid | –615.8 | –555.4 | –190.8 | –185.4 | |
| Dividends received | 13.2 | 19.0 | 12.3 | 8.1 | |
| Depreciation, amortization, impairment and reversal of impairment losses | 1,824.0 | 2,843.41 | 556.7 | 1,398.31 | |
| Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses |
–5.4 | –6.6 | –5.4 | –3.2 | |
| Gains/losses from the disposal of assets, companies and business operations | –90.6 | –183.2 | –79.2 | –11.4 | |
| Changes in | |||||
| inventories | –1,415.4 | 40.8 | –460.5 | 334.4 | |
| trade accounts receivable | –224.2 | –483.4 | –213.0 | –1,694.4 | |
| trade accounts payable | 530.5 | –846.8 | 218.4 | 1,602.0 | |
| employee benefits and other provisions | 187.5 | 1,125.4 | 10.8 | 966.0 | |
| other assets and liabilities | 79.7 | 223.6 | 139.0 | 490.9 | |
| Cash flow arising from operating activities | 2,050.1 | 1,015.6 | 477.7 | 2,189.6 | |
| Cash flow arising from operating activities – continuing operations | 1,586.2 | 1,177.8 | 277.7 | 1,866.4 | |
| Cash flow arising from operating activities – discontinued operations | 463.9 | –162.2 | 200.0 | 323.2 | |
| Cash flow from the disposal of assets | 48.1 | 46.6 | 11.5 | 15.2 | |
| Capital expenditure on property, plant and equipment, and software | –1,112.2 | –1,235.9 | –486.2 | –425.3 | |
| Capital expenditure on intangible assets from development projects and miscellaneous |
–46.3 | –153.0 | –10.8 | –33.9 | |
| Cash flow from the disposal of companies and business operations | 143.1 | 301.9 | 140.3 | 17.4 | |
| Acquisition of companies and business operations | –43.6 | –26.8 | –12.5 | –12.3 | |
| Cash flow arising from investing activities | –1,010.9 | –1,067.2 | –357.7 | –438.9 | |
| Cash flow arising from investing activities – continuing operations | –852.9 | –811.5 | –308.8 | –349.9 | |
| Cash flow arising from investing activities – discontinued operations | –158.0 | –255.7 | –48.9 | –89.0 |
1 Includes expenses from derecognitions of brand values.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| € millions | 2021 | 2020 | 2021 | 2020 | |
| Cash flow before financing activities (free cash flow) | 1,039.2 | –51.6 | 120.0 | 1,750.7 | |
| Change in indebtedness | –741.6 | 157.1 | 10.3 | –847.1 | |
| Successive purchases | — | –172.8 | — | –170.0 | |
| Dividends paid | — | –600.0 | — | –600.0 | |
| Dividends paid to and cash changes from equity transactions with non-controlling interests |
–27.0 | –21.9 | –0.2 | –2.2 | |
| Cash flow arising from financing activities | –768.6 | –637.6 | 10.1 | –1,619.3 | |
| Cash flow arising from financing activities – continuing operations | –745.9 | –639.5 | 20.7 | –1,626.0 | |
| Cash flow arising from financing activities – discontinued operations | –22.7 | 1.9 | –10.6 | 6.7 | |
| Change in cash and cash equivalents | 270.6 | –689.2 | 130.1 | 131.4 | |
| Cash and cash equivalents at the beginning of the reporting period | 2,938.7 | 3,341.8 | 3,134.6 | 2,455.6 | |
| Effect of exchange-rate changes on cash and cash equivalents | 61.9 | –137.1 | 6.5 | –71.5 | |
| Cash and cash equivalents from continuing and discontinued operations | 3,271.2 | 2,515.5 | 3,271.2 | 2,515.5 | |
| Less cash and cash equivalents from discontinued operations at the time of the disposal |
–985.3 | n. a. | –985.3 | n. a. | |
| Cash and cash equivalents from continuing operations at the end of the reporting period |
2,285.9 | n. a. | 2,285.9 | n. a. |
| As at September 30, 2021 | 512.0 | 4,155.6 | 10,105.6 | –306.3 | –1,867.5 | –794.5 | 72.5 | 11,877.4 | 413.9 | 12,291.3 |
|---|---|---|---|---|---|---|---|---|---|---|
| Other changes4 | — | — | –331.8 | –4.2 | 331.8 | — | — | –4.2 | 0.2 | –4.0 |
| Successive purchases | — | — | — | — | — | — | — | — | — | — |
| Non-cash dividends due to the completed spin-off |
— | — | –2,824.8 | — | — | — | — | –2,824.8 | — | –2,824.8 |
| Dividends paid/resolved | — | — | — | — | — | — | — | — | –14.4 | –14.4 |
| Net profit for the period | — | — | 1,302.0 | — | 617.7 | 438.2 | 86.1 | 2,444.0 | 51.4 | 2,495.4 |
| Comprehensive income | — | — | — | — | 617.7 | 438.2 | 86.1 | 1,142.0 | 20.5 | 1,162.5 |
| Net income | — | — | 1,302.0 | — | — | — | — | 1,302.0 | 30.9 | 1,332.9 |
| As at January 1, 2021 | 512.0 | 4,155.6 | 11,960.2 | –302.1 | –2,817.0 | –1,232.7 | –13.6 | 12,262.4 | 376.7 | 12,639.1 |
| As at September 30, 2020 | 512.0 | 4,155.6 | 11,753.9 | –302.1 | –2,646.6 | –1,209.2 | –10.7 | 12,252.9 | 381.3 | 12,634.2 |
| Other changes | — | — | — | 0.1 | — | — | — | 0.1 | — | 0.1 |
| Successive purchases | — | — | — | –114.8 | — | — | — | –114.8 | –33.5 | –148.3 |
| Dividends paid/resolved | — | — | –600.0 | — | — | — | — | –600.0 | –33.2 | –633.2 |
| Net profit for the period | — | — | –1,168.2 | — | –280.2 | –976.1 | –3.2 | –2,427.7 | –32.4 | –2,460.1 |
| Comprehensive income | — | — | –0.1 | — | –280.2 | –976.1 | –3.2 | –1,259.6 | –52.1 | –1,311.7 |
| Net income | — | — | –1,168.1 | — | — | — | — | –1,168.1 | 19.7 | –1,148.4 |
| As at January 1, 2020 | 512.0 | 4,155.6 | 13,522.1 | –187.4 | –2,366.4 | –233.1 | –7.5 | 15,395.3 | 480.4 | 15,875.7 |
| € millions | Subscribed capital1 |
Capital reserves |
Retained earnings |
Successive purchases2 |
remeasurement of defined benefit plans |
currency translation |
financial instruments3 |
Subtotal | Non controlling interests |
Total |
| Difference from |
1 Divided into 200,005,983 shares outstanding.
2 Includes, in the previous year, an amount of -€114.8 million from successive purchases of shares in fully consolidated companies and an amount of -€4.2 million
(PY: €0.1 million) relating to effects from the first-time consolidation of previously non-consolidated subsidiaries.
3 The change in the difference arising from financial instruments, including deferred taxes, was due to other investments of €86.1 million (PY: -€3.2 million).
4 Other changes in relation to the retained earnings of €331.8 million resulted from reclassifications to retained earnings not recognized in profit or loss. Of these, €331.4 million was attributable to the spin-off of Vitesco Technologies and €0.4 million resulted from changes in the scope of consolidation. Other changes in non-controlling interests took place due to changes in the scope of consolidation and capital increases.
The spin-off of parts of the Powertrain segment has resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations. These parts make up most of the discontinued operations.
All segment report tables show only the figures for continuing operations in the reporting and comparative periods for all segments. Following the spin-off of Vitesco Technologies, the Contract Manufacturing segment is being reported for the first time. It comprises the continuing operations of the former Powertrain segment. All key figures for the segments reflect the resegmentation over the entire reporting period and are adjusted accordingly for the comparative period.
| € millions | Autonomous Mobility and Safety |
Vehicle Networking and Information |
Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|---|
| External sales | 5,466.3 | 5,871.0 | 8,541.6 | 4,399.8 | 691.5 | — | 24,970.2 |
| Intercompany sales | 70.3 | 52.1 | 66.1 | 47.7 | 1.3 | –237.5 | — |
| Sales (total) | 5,536.6 | 5,923.1 | 8,607.7 | 4,447.5 | 692.8 | –237.5 | 24,970.2 |
| EBIT (segment result) | –82.4 | –118.2 | 1,362.9 | 301.1 | 124.6 | –34.2 | 1,553.8 |
| in % of sales | –1.5 | –2.0 | 15.8 | 6.8 | 18.0 | — | 6.2 |
| Depreciation and amortization1 | 388.1 | 371.9 | 608.8 | 240.0 | 52.4 | 6.1 | 1,667.3 |
| thereof impairment2 | –2.8 | 0.8 | 1.0 | 0.3 | 13.7 | 0.1 | 13.1 |
| Capital expenditure3 | 301.6 | 323.9 | 302.3 | 131.9 | 10.8 | 36.7 | 1,107.2 |
| in % of sales | 5.4 | 5.5 | 3.5 | 3.0 | 1.6 | — | 4.4 |
| Operating assets as at September 30 | 4,514.1 | 3,575.5 | 6,727.1 | 3,063.7 | 807.1 | 118.5 | 18,806.0 |
| Number of employees as at September 304 | 44,809 | 44,365 | 57,137 | 42,790 | 2,944 | 450 | 192,495 |
| Adjusted sales5 | 5,536.6 | 5,923.1 | 8,607.6 | 4,447.5 | 692.8 | –237.5 | 24,970.1 |
| Adjusted operating result (adjusted EBIT)6 | –11.2 | –59.1 | 1,377.0 | 371.0 | 97.4 | –99.0 | 1,676.1 |
| in % of adjusted sales | –0.2 | –1.0 | 16.0 | 8.3 | 14.1 | — | 6.7 |
With the application of IFRS 5, the external sales of Vitesco Technologies resulting from supply and service relationships between the Contract Manufacturing segment and Vitesco Technologies have been shown as external sales of the Contract Manufacturing segment due to the continuation of the supply and service relationships. The external sales of discontinued operations have been reduced by this amount.
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversal of impairment losses.
3 Capital expenditure on property, plant and equipment, and software.
4 Excluding trainees.
5 Before changes in the scope of consolidation.
| € millions | Autonomous Mobility and Safety |
Vehicle Networking and Information |
Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|---|
| External sales | 5,279.9 | 5,536.0 | 7,238.2 | 4,005.6 | 684.2 | — | 22,743.9 |
| Intercompany sales | 46.3 | 117.1 | 46.2 | 48.7 | 2.0 | –260.3 | — |
| Sales (total) | 5,326.2 | 5,653.1 | 7,284.4 | 4,054.3 | 686.2 | –260.3 | 22,743.9 |
| EBIT (segment result) | –159.3 | –1,160.2 | 518.9 | 153.1 | –46.3 | –85.8 | –779.6 |
| in % of sales | –3.0 | –20.5 | 7.1 | 3.8 | –6.7 | — | –3.4 |
| Depreciation and amortization1 | 373.1 | 1,094.1 | 630.3 | 277.7 | 48.7 | 11.0 | 2,434.9 |
| thereof impairment2 | –3.0 | 720.2 | –0.7 | 15.6 | 2.1 | 0.0 | 734.2 |
| Capital expenditure3 | 267.0 | 303.9 | 360.8 | 125.2 | 21.3 | 52.0 | 1,130.2 |
| in % of sales | 5.0 | 5.4 | 5.0 | 3.1 | 3.1 | — | 5.0 |
| Operating assets as at September 30 | 4,550.6 | 3,695.7 | 6,837.4 | 3,192.1 | 271.5 | 179.7 | 18,727.0 |
| Number of employees as at September 304 | 45,684 | 45,136 | 56,679 | 43,107 | 3,432 | 405 | 194,443 |
| Adjusted sales5 | 5,261.3 | 5,524.9 | 7,284.4 | 4,046.9 | 686.2 | –260.3 | 22,543.4 |
| Adjusted operating result (adjusted EBIT)6 | –19.3 | –311.3 | 794.2 | 274.1 | 66.3 | –82.9 | 721.1 |
| in % of adjusted sales | –0.4 | –5.6 | 10.9 | 6.8 | 9.7 | — | 3.2 |
With the application of IFRS 5, the external sales of Vitesco Technologies resulting from supply and service relationships between the Contract Manufacturing segment and Vitesco Technologies have been shown as external sales of the Contract Manufacturing segment due to the continuation of the supply and service relationships. The external sales of discontinued operations have been reduced by this amount.
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversal of impairment losses. Expenses from derecognitions of brand values are likewise included.
3 Capital expenditure on property, plant and equipment, and software.
4 Excluding trainees.
5 Before changes in the scope of consolidation.
| € millions | Autonomous Mobility and Safety |
Vehicle Networking and Information |
Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|---|
| Sales | 5,536.6 | 5,923.1 | 8,607.7 | 4,447.5 | 692.8 | –237.5 | 24,970.2 |
| Changes in the scope of consolidation1 | — | — | –0.1 | — | — | — | –0.1 |
| Adjusted sales | 5,536.6 | 5,923.1 | 8,607.6 | 4,447.5 | 692.8 | –237.5 | 24,970.1 |
| EBITDA | 305.7 | 253.7 | 1,971.7 | 541.1 | 177.0 | –28.1 | 3,221.1 |
| Depreciation and amortization2 | –388.1 | –371.9 | –608.8 | –240.0 | –52.4 | –6.1 | –1,667.3 |
| EBIT | –82.4 | –118.2 | 1,362.9 | 301.1 | 124.6 | –34.2 | 1,553.8 |
| Amortization of intangible assets from purchase price allocation (PPA) |
0.8 | 48.6 | 13.1 | 54.6 | — | — | 117.1 |
| Changes in the scope of consolidation1 | — | — | 0.1 | — | — | — | 0.1 |
| Special effects | |||||||
| Impairment on goodwill | — | — | — | — | — | — | — |
| Impairment3 | –2.8 | 0.8 | 0.1 | — | 10.4 | 0.1 | 8.6 |
| Restructuring4 | –25.0 | –26.1 | –17.3 | 0.7 | –39.6 | — | –107.3 |
| Restructuring-related expenses | 22.6 | 11.6 | — | 3.3 | 0.4 | — | 37.9 |
| Severance payments | 29.3 | 13.1 | 18.1 | 11.3 | 1.6 | 0.7 | 74.1 |
| Gains and losses from disposals of companies and business operations |
— | –0.3 | — | — | — | –69.6 | –69.9 |
| Other5 | 46.3 | 11.4 | — | — | — | 4.0 | 61.7 |
| Adjusted operating result (adjusted EBIT) | –11.2 | –59.1 | 1,377.0 | 371.0 | 97.4 | –99.0 | 1,676.1 |
1 Changes in the scope of consolidation include additions and disposals as part of share and asset deals. Adjustments were made for additions in the reporting year and for disposals in the comparative period of the prior year.
2 Excluding impairment on financial investments.
3 Impairment also includes necessary reversal of impairment losses. It does not include impairment that arose in connection with a restructuring and impairment on financial investments.
4 In addition to adjustments to restructuring measures, this includes impairment losses totaling €4.5 million (Tires €0.9 million; ContiTech €0.3 million; Contract Manufacturing €3.3 million).
5 Mainly includes expenses of €90.8 million in connection with the spin-off of parts of the Powertrain segment. It also includes expenses totaling €3.2 million in connection with preparations for the repatriation of the business from associate OSRAM CONTINENTAL GmbH, Munich, Germany, and income of €32.5 million from the reversal of provisions for capital commitments to this associate.
| € millions | Autonomous Mobility and Safety |
Vehicle Networking and Information |
Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|---|
| Sales | 5,326.2 | 5,653.1 | 7,284.4 | 4,054.3 | 686.2 | –260.3 | 22,743.9 |
| Changes in the scope of consolidation1 | –64.9 | –128.2 | — | –7.4 | — | — | –200.5 |
| Adjusted sales | 5,261.3 | 5,524.9 | 7,284.4 | 4,046.9 | 686.2 | –260.3 | 22,543.4 |
| EBITDA | 213.8 | –66.1 | 1,149.2 | 430.8 | 2.4 | –74.8 | 1,655.3 |
| Depreciation and amortization2 | –373.1 | –1,094.1 | –630.3 | –277.7 | –48.7 | –11.0 | –2,434.9 |
| EBIT | –159.3 | –1,160.2 | 518.9 | 153.1 | –46.3 | –85.8 | –779.6 |
| Amortization of intangible assets from purchase price allocation (PPA) |
— | 49.4 | 14.2 | 67.7 | — | — | 131.3 |
| Changes in the scope of consolidation1 | 12.4 | –13.4 | — | 0.2 | — | — | –0.8 |
| Special effects | |||||||
| Impairment on goodwill | — | 649.3 | — | — | — | — | 649.3 |
| Impairment3 | –3.2 | 70.9 | — | 14.5 | 2.1 | 0.0 | 84.3 |
| Restructuring4 | 108.9 | 231.0 | 254.6 | 26.8 | 109.2 | — | 730.5 |
| Restructuring-related expenses | 7.0 | 1.4 | — | 0.3 | — | — | 8.7 |
| Severance payments | 5.4 | 7.2 | 6.3 | 9.2 | 1.3 | 0.2 | 29.6 |
| Gains and losses from disposals of companies and business operations |
0.0 | –157.0 | 0.2 | 2.3 | — | — | –154.5 |
| Other5 | 9.5 | 10.1 | — | — | — | 2.7 | 22.3 |
| Adjusted operating result (adjusted EBIT) | –19.3 | –311.3 | 794.2 | 274.1 | 66.3 | –82.9 | 721.1 |
1 Changes in the scope of consolidation include additions and disposals as part of share and asset deals. Adjustments were made for additions in the reporting year and for disposals in the comparative period of the prior year.
2 Excluding impairment on financial investments.
3 Impairment also includes necessary reversal of impairment losses. It does not include impairment that arose in connection with a restructuring and impairment on financial investments. It does include expenses from derecognitions of brand values of €71.2 million in the Vehicle Networking and Information segment and of €14.5 million in the ContiTech segment.
4 In addition to adjustments to restructuring measures, this includes impairment losses totaling €1.3 million (Autonomous Mobility and Safety €0.2 million;
ContiTech €1.1 million) and a reversal of impairment losses of €0.7 million in the Tires segment.
5 Includes expenses of €22.3 million in connection with the spin-off of parts of the Powertrain segment.
| January 1 to September 30 | ||
|---|---|---|
| € millions | 2021 | 2020 |
| Sales from continuing operations in accordance with the consolidated statement of income | 24,970.2 | 22,743.9 |
| Plus sales from discontinued operations | 4,432.6 | 4,083.8 |
| Consolidated sales (continuing and discontinued operations) | 29,402.8 | 26,827.7 |
| EBIT from continuing operations in accordance with the consolidated statement of income | 1,553.8 | –779.6 |
| Plus EBIT from discontinued operations | 314.1 | –286.6 |
| Consolidated EBIT (continuing and discontinued operations) | 1,867.9 | –1,066.2 |
Hanover, October 22, 2021
Continental Aktiengesellschaft The Executive Board
| 2021 | |
|---|---|
| Annual Financial Press Conference | March 9 |
| Analyst and Investor Conference Call | March 9 |
| Annual Shareholders' Meeting | April 29 |
| Quarterly Statement as at March 31, 2021 | May 6 |
| Half-Year Financial Report as at June 30, 2021 | August 5 |
| Quarterly Statement as at September 30, 2021 | November 10 |
| 2022 | |
|---|---|
| Annual Financial Press Conference | March 9 |
| Analyst and Investor Conference Call | March 9 |
| Annual Shareholders' Meeting | April 29 |
| Quarterly Statement as at March 31, 2022 | May 11 |
| Half-Year Financial Report as at June 30, 2022 | August 9 |
| Quarterly Statement as at September 30, 2022 | November 10 |
The annual report, the annual financial statements, the half-year report and the quarterly statements are available online at: www.continental-ir.com
Published by: Continental Aktiengesellschaft, Hanover, Germany
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