Quarterly Report • Nov 21, 2022
Quarterly Report
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› Operating result of €12 million (Q3 2021: €419 million, -97.1 percent)
Against a persistently challenging macroeconomic backdrop, Continental ended the third quarter of 2022 with a satisfactory adjusted operating result. As expected, the measures taken in the Automotive group sector contributed to this improvement. At the same time, the business environment was, and continues to be, highly volatile as a result of geopolitical uncertainties, disrupted supply chains, shortages of electronic components and sharp price increases for raw materials, semi-finished products, energy and logistics.
To overcome these various challenges, Continental concluded further price agreements with customers and initiated a number of additional measures, including purchasing raw and other materials from multiple suppliers, implementing more focused cost management, and monitoring the procurement and logistics chain for electronics more closely.
The global production of passenger cars and light commercial vehicles continued to recover between July and September 2022. According to preliminary figures, it rose by 11.1 percent compared with the second quarter of 2022 to 21.2 million units overall (Q2 2022: 19.1 million units). Compared with the very weak prior-year quarter (Q3 2021: 16.6 million units), it increased by 27.5 percent. Europe recorded an increase of 19.6 percent year-on-year to 3.5 million units in the third quarter of 2022. The production volume in North America increased by 24.2 percent to 3.7 million units. In China, production rose significantly in the third quarter to 7.2 million units, 31.3 percent above the prior-year figure.
Consolidated sales in the past quarter were €10.4 billion (Q3 2021: €8.0 billion, +29.3 percent), and the adjusted operating result was €605 million (Q3 2021: €412 million, +46.7 percent), corresponding to an adjusted EBIT margin of 5.8 percent (Q3 2021: 5.2 percent). Owing to higher interest rates and other valuation-related effects, goodwill was impaired by €498 million in the Automotive group sector. This had an impact on net income, which amounted to -€211 million (Q3 2021: €309 million from continuing and discontinued operations). Adjusted free cash flow was again negative in the third quarter of this year, due primarily to higher procurement costs, the buildup of inventories and receivables, and higher capital expenditure than in the previous year. It amounted to -€496 million (Q3 2021: -€8 million from continuing and discontinued operations).
The measures described above, in particular the price agreements reached in partnership with our customers, and the rise in automotive production had a positive impact on the Automotive group sector, which posted a substantial sales increase of 42.1 percent to €4.9 billion in the third quarter of 2022 (Q3 2021: €3.5 billion). With its sales growing organically by 34.0 percent before exchange-rate effects and changes in the scope of consolidation and global automotive production rising by 27.5 percent, the Automotive group sector significantly outperformed the market. At 2.7 percent, the adjusted EBIT margin was considerably higher than in the first and second quarters of this year and was also up year-on-year (Q3 2021: -2.3 percent). In addition, the Automotive group sector continued to boost its order intake. This amounted to around €18 billion in the first nine months of 2022, an increase of 37.9 percent compared with the same period of the previous year. In the third quarter alone, order intake amounted to more than €6 billion, due in large part to the first major order for an ultra-modern "semi-dry" brake system worth around €1.5 billion. Furthermore, two major orders from global vehicle manufacturers amounting to more than €2 billion were landed for a large-scale pillar-to-pillar display solution and for OLED displays. This took the total value of orders for display solutions with a production launch after 2022 to more than €7 billion.
In the Tires group sector, the challenging economic environment with soaring costs for raw materials, semi-finished products, energy and logistics had an impact on earnings. In the current year, for example, average energy costs in Europe have doubled compared to 2021. With sales of €3.6 billion in the third quarter of 2022 (Q3 2021: €3.0 billion, +21.8 percent), the group sector achieved an adjusted EBIT margin of 11.8 percent (Q3 2021: 13.7 percent).
The ContiTech group sector also suffered as a result of the increased costs and the volatile market environment. It posted sales of €1.7 billion (Q3 2021: €1.4 billion, +20.4 percent) and an adjusted EBIT margin of 6.2 percent (Q3 2021: 5.9 percent) in the third quarter of 2022.
Sales in the Contract Manufacturing group sector were €147 million in the third quarter of 2022 (Q3 2021: €203 million), and the adjusted EBIT margin was -3.3 percent (Q3 2021: 11.9 percent).
For 2022, Continental continues to expect production of passenger cars and light commercial vehicles to increase by 4 to 6 percent yearon-year. For the tire-replacement business, we now expect global demand to weaken by 1 to 3 percent for the year as a whole. Although the industrial business is currently showing signs of weakening, particularly in Europe, we continue to expect year-on-year growth for 2022 as a whole, especially in North America and China. Negative effects from cost inflation for key inputs as well as for energy and logistics are expected to continue in the fourth quarter of 2022.
Based on all of the assumptions mentioned as well as current exchange rates, Continental expects the following key financial figures for fiscal 2022:
In addition, Continental anticipates the following effects for the year as a whole:
In the event the geopolitical situation, in particular in Eastern Europe, remains tense or worsens, it could result in further lasting consequences for production, supply chains and demand. In addition, further negative effects may result from the ongoing COVID-19 pandemic as well as possible disruption to the energy supply in Europe, particularly in Germany, and the associated supply situation.
The spin-off of Vitesco Technologies on September 15, 2021, resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, in the comparative period. Vitesco Technologies is reported as discontinued operations in the comparative period.
The following table generally shows the figures for continuing operations in the reporting and comparative periods, with free cash flow (continuing and discontinued operations), net income attributable to the shareholders of the parent and earnings per share referring to continuing and discontinued operations in the comparative period.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| € millions | 2022 | 2021 | 2022 | 2021 | |
| Sales | 29,118.0 | 24,970.2 | 10,395.6 | 8,040.5 | |
| EBITDA | 2,859.6 | 3,221.1 | 1,078.7 | 975.2 | |
| in % of sales | 9.8 | 12.9 | 10.4 | 12.1 | |
| EBIT | 222.9 | 1,553.8 | 12.2 | 418.5 | |
| in % of sales | 0.8 | 6.2 | 0.1 | 5.2 | |
| Net income attributable to the shareholders of the parent | –216.1 | 1,302.0 | –210.8 | 309.1 | |
| Basic earnings per share in € | –1.08 | 6.51 | –1.05 | 1.55 | |
| Diluted earnings per share in € | –1.08 | 6.51 | –1.05 | 1.55 | |
| Research and development expenses (net) | 2,262.8 | 1,987.7 | 753.1 | 657.2 | |
| in % of sales | 7.8 | 8.0 | 7.2 | 8.2 | |
| Depreciation and amortization1 | 2,636.7 | 1,667.3 | 1,066.5 | 556.7 | |
| thereof impairment2 | 947.0 | 13.1 | 503.1 | 3.3 | |
| Capital expenditure3 | 1,545.2 | 1,107.2 | 557.7 | 484.0 | |
| in % of sales | 5.3 | 4.4 | 5.4 | 6.0 | |
| Operating assets as at September 30 | 21,264.3 | 18,806.0 | |||
| Number of employees as at September 304 | 197,442 | 192,495 | |||
| Adjusted sales5 | 28,995.0 | 24,841.2 | 10,340.6 | 7,997.0 | |
| Adjusted operating result (adjusted EBIT)6 | 1,453.5 | 1,652.3 | 604.5 | 412.2 | |
| in % of adjusted sales | 5.0 | 6.7 | 5.8 | 5.2 | |
| Free cash flow (continuing operations) | –1,459.5 | 733.3 | –588.9 | –31.1 | |
| Free cash flow (continuing and discontinued operations) | –1,459.5 | 1,039.2 | –588.9 | 120.0 | |
| Net indebtedness as at September 30 | 6,025.4 | 3,964.4 | |||
| Gearing ratio in % | 40.9 | 32.3 |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversals 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 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. As part of the new organizational structure in place since January 1, 2022, the Continental Group is divided into the group sectors Automotive, Tires, ContiTech and Contract Manufacturing. All key figures for the group sectors reflect this over the entire reporting period and are adjusted accordingly for the comparative period.
| Automotive in € millions | January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | ||
| Sales | 13,502.3 | 11,386.8 | 4,941.3 | 3,476.6 | |
| EBITDA | 519.8 | 558.8 | 331.8 | 106.4 | |
| in % of sales | 3.8 | 4.9 | 6.7 | 3.1 | |
| EBIT | –1,140.4 | –200.9 | –426.2 | –153.1 | |
| in % of sales | –8.4 | –1.8 | –8.6 | –4.4 | |
| Research and development expenses (net) | 1,903.3 | 1,647.8 | 633.0 | 545.1 | |
| in % of sales | 14.1 | 14.5 | 12.8 | 15.7 | |
| Depreciation and amortization1 | 1,660.2 | 759.7 | 758.0 | 259.5 | |
| thereof impairment2 | 866.9 | –2.1 | 495.2 | –0.2 | |
| Capital expenditure3 | 887.4 | 625.5 | 315.7 | 278.8 | |
| in % of sales | 6.6 | 5.5 | 6.4 | 8.0 | |
| Operating assets as at September 30 | 9,029.5 | 8,086.3 | |||
| Number of employees as at September 304 | 95,644 | 89,174 | |||
| Adjusted sales5 | 13,400.3 | 11,386.8 | 4,907.3 | 3,476.6 | |
| Adjusted operating result (adjusted EBIT)6 | –132.3 | –70.7 | 131.7 | –81.6 | |
| in % of adjusted sales | –1.0 | –0.6 | 2.7 | –2.3 |
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| Tires in € millions | 2022 | 2021 | 2022 | 2021 |
| Sales | 10,302.2 | 8,607.7 | 3,626.0 | 2,976.6 |
| EBITDA | 2,065.9 | 1,971.7 | 629.0 | 597.8 |
| in % of sales | 20.1 | 22.9 | 17.3 | 20.1 |
| EBIT | 1,358.3 | 1,362.9 | 410.7 | 395.3 |
| in % of sales | 13.2 | 15.8 | 11.3 | 13.3 |
| Research and development expenses (net) | 240.0 | 222.2 | 79.7 | 73.7 |
| in % of sales | 2.3 | 2.6 | 2.2 | 2.5 |
| Depreciation and amortization1 | 707.6 | 608.8 | 218.3 | 202.5 |
| thereof impairment2 | 77.1 | 1.0 | 7.6 | 0.0 |
| Capital expenditure3 | 482.2 | 302.3 | 178.1 | 139.0 |
| in % of sales | 4.7 | 3.5 | 4.9 | 4.7 |
| Operating assets as at September 30 | 8,057.5 | 6,727.1 | ||
| Number of employees as at September 304 | 57,090 | 57,137 | ||
| Adjusted sales5 | 10,302.2 | 8,607.7 | 3,626.0 | 2,976.6 |
| Adjusted operating result (adjusted EBIT)6 | 1,460.3 | 1,376.9 | 428.3 | 407.2 |
| in % of adjusted sales | 14.2 | 16.0 | 11.8 | 13.7 |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversals of impairment losses.
3 Capital expenditure on property, plant and equipment, and software.
4 Excluding trainees.
5 Before changes in the scope of consolidation.
| ContiTech in € millions | January 1 to September 30 | Third Quarter | ||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Sales | 4,912.2 | 4,447.5 | 1,728.5 | 1,435.5 |
| EBITDA | 391.0 | 541.1 | 170.3 | 145.5 |
| in % of sales | 8.0 | 12.2 | 9.9 | 10.1 |
| EBIT | 150.9 | 301.1 | 89.0 | 67.2 |
| in % of sales | 3.1 | 6.8 | 5.1 | 4.7 |
| Research and development expenses (net) | 119.5 | 117.7 | 40.4 | 38.2 |
| in % of sales | 2.4 | 2.6 | 2.3 | 2.7 |
| Depreciation and amortization1 | 240.1 | 240.0 | 81.3 | 78.3 |
| thereof impairment2 | 3.0 | 0.3 | 0.3 | 0.0 |
| Capital expenditure3 | 130.5 | 131.9 | 48.5 | 49.9 |
| in % of sales | 2.7 | 3.0 | 2.8 | 3.5 |
| Operating assets as at September 30 | 3,451.2 | 3,063.7 | ||
| Number of employees as at September 304 | 42,002 | 42,790 | ||
| Adjusted sales5 | 4,891.2 | 4,318.5 | 1,707.5 | 1,392.0 |
| Adjusted operating result (adjusted EBIT)6 | 269.9 | 347.4 | 105.2 | 82.5 |
| in % of adjusted sales | 5.5 | 8.0 | 6.2 | 5.9 |
| Contract Manufacturing in € millions | January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | ||
| Sales | 536.3 | 692.8 | 147.4 | 202.7 | |
| EBITDA | 37.0 | 177.0 | 3.2 | 77.9 | |
| in % of sales | 6.9 | 25.5 | 2.2 | 38.4 | |
| EBIT | 10.0 | 124.6 | –5.3 | 63.2 | |
| in % of sales | 1.9 | 18.0 | –3.6 | 31.2 | |
| Research and development expenses (net) | 0.0 | 0.0 | 0.0 | 0.2 | |
| in % of sales | 0.0 | 0.0 | 0.0 | 0.1 | |
| Depreciation and amortization1 | 27.0 | 52.4 | 8.5 | 14.7 | |
| thereof impairment2 | 0.0 | 13.8 | 0.0 | 3.4 | |
| Capital expenditure3 | 7.1 | 10.8 | 1.8 | 4.2 | |
| in % of sales | 1.3 | 1.6 | 1.2 | 2.1 | |
| Operating assets as at September 30 | 644.9 | 807.1 | |||
| Number of employees as at September 304 | 2,227 | 2,944 | |||
| Adjusted sales5 | 536.3 | 692.8 | 147.4 | 202.7 | |
| Adjusted operating result (adjusted EBIT)6 | 11.3 | 97.4 | –4.8 | 24.1 | |
| in % of adjusted sales | 2.1 | 14.1 | –3.3 | 11.9 |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversals 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 Vitesco Technologies on September 15, 2021, resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, in the comparative period. Vitesco Technologies is reported as discontinued operations in the comparative period.
The items in the consolidated statement of income show the figures for continuing operations in the reporting and comparative periods. Net income in the comparative period comprises earnings after tax from continuing and discontinued operations.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| € millions | 2022 | 2021 | 2022 | 2021 |
| Sales | 29,118.0 | 24,970.2 | 10,395.6 | 8,040.5 |
| Cost of sales | –22,834.0 | –18,991.8 | –8,170.7 | –6,257.3 |
| Gross margin on sales | 6,284.0 | 5,978.4 | 2,224.9 | 1,783.2 |
| Research and development expenses | –3,059.5 | –2,546.5 | –1,061.4 | –845.6 |
| Selling and logistics expenses | –1,918.6 | –1,772.8 | –661.1 | –605.8 |
| Administrative expenses | –803.5 | –749.2 | –252.7 | –237.4 |
| Other income | 1,246.1 | 1,232.0 | 503.6 | 479.7 |
| Other expenses | –1,537.8 | –638.1 | –749.6 | –193.2 |
| Income from equity-accounted investees | 11.5 | 49.6 | 8.4 | 37.6 |
| Other income from investments | 0.7 | 0.4 | 0.1 | 0.0 |
| EBIT | 222.9 | 1,553.8 | 12.2 | 418.5 |
| Interest income1 | 73.8 | 31.2 | 16.7 | 9.6 |
| Interest expense1 | –174.6 | –138.1 | –63.7 | –41.7 |
| Effects from currency translation | –10.7 | –65.0 | –11.1 | –24.5 |
| Effects from changes in the fair value of derivative instruments, and other valuation effects |
–83.6 | 58.6 | –38.0 | –34.1 |
| Financial result | –195.1 | –113.3 | –96.1 | –90.7 |
| Earnings before tax from continuing operations | 27.8 | 1,440.5 | –83.9 | 327.8 |
| Income tax expense | –213.5 | –264.5 | –114.0 | –64.8 |
| Earnings after tax from continuing operations | –185.7 | 1,176.0 | –197.9 | 263.0 |
| Earnings after tax from discontinued operations | n. a. | 156.9 | n. a. | 54.7 |
| Net income | –185.7 | 1,332.9 | –197.9 | 317.7 |
| Non-controlling interests | –30.4 | –30.9 | –12.9 | –8.6 |
| Net income attributable to the shareholders of the parent | –216.1 | 1,302.0 | –210.8 | 309.1 |
| Earnings per share (in €) relating to | ||||
| Basic earnings per share from continuing operations | –1.08 | 5.73 | –1.05 | 1.27 |
| Consolidated basic earnings per share | –1.08 | 6.51 | –1.05 | 1.55 |
| Diluted earnings per share from continuing operations | –1.08 | 5.73 | –1.05 | 1.27 |
| Consolidated diluted earnings per share | –1.08 | 6.51 | –1.05 | 1.55 |
1 Expected income from long-term employee benefits and from pension funds and interest expense from long-term employee benefits are reported net under interest expense. The previous year's figures have been adjusted accordingly.
The spin-off of Vitesco Technologies on September 15, 2021, resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, in the comparative period. Vitesco Technologies is reported as discontinued operations in the comparative period.
The items in the consolidated statement of comprehensive income for the reporting period show continuing operations. The figures for the comparative period show continuing and discontinued operations. In addition, comprehensive income is shown separately for continuing and discontinued operations in the comparative period.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| € millions | 2022 | 2021 | 2022 | 2021 | |
| Net income | –185.7 | 1,332.9 | –197.9 | 317.7 | |
| Items that will not be reclassified to profit or loss | |||||
| Remeasurement of defined benefit plans1 | 2,627.8 | 849.9 | 317.3 | 205.2 | |
| Fair value adjustments1 | 2,667.5 | 871.5 | 334.9 | 212.4 | |
| Investments in equity-accounted investees2 | 0.1 | –0.1 | 0.1 | –0.1 | |
| Currency translation1 | –39.8 | –21.5 | –17.7 | –7.1 | |
| Other investments | –13.8 | 86.1 | –12.6 | –27.7 | |
| Fair value adjustments1 | –8.5 | 85.8 | –7.7 | –28.3 | |
| Investments in equity-accounted investees | –3.9 | 0.9 | –3.9 | 0.9 | |
| Currency translation1 | –1.4 | –0.6 | –1.0 | –0.3 | |
| Tax on other comprehensive income | –777.9 | –231.9 | –89.4 | –66.0 | |
| Items that may be reclassified subsequently to profit or loss | |||||
| Currency translation1,3 | 910.9 | 459.4 | 349.6 | 37.9 | |
| Effects from currency translation1,3 | 910.4 | 537.5 | 349.1 | 114.4 | |
| Reclassification adjustments to profit and loss1,3 | — | –71.3 | — | –69.7 | |
| Investments in equity-accounted investees2 | 0.5 | –6.8 | 0.5 | –6.8 | |
| Tax on other comprehensive income | — | –1.0 | — | –1.0 | |
| Other comprehensive income | 2,747.0 | 1,162.5 | 564.9 | 148.4 | |
| Comprehensive income | 2,561.3 | 2,495.4 | 367.0 | 466.1 | |
| Attributable to non-controlling interests | –37.6 | –51.4 | –17.9 | –16.9 | |
| Attributable to the shareholders of the parent | 2,523.7 | 2,444.0 | 349.1 | 449.2 | |
| The share of comprehensive income attributable to the shareholders of the parent is as follows: |
|||||
| Continuing operations | 2,523.7 | 2,030.1 | 349.1 | 273.5 | |
| Discontinued operations | n. a. | 413.9 | n. a. | 175.7 |
1 Including non-controlling interests.
2 Including taxes.
3 In the comparative period, the amounts were adjusted with no effect on currency translation.
| Assets in € millions | September 30, 2022 | December 31, 2021 | September 30, 2021 |
|---|---|---|---|
| Goodwill | 3,285.8 | 3,711.8 | 3,616.7 |
| Other intangible assets | 1,037.0 | 1,087.7 | 1,062.0 |
| Property, plant and equipment | 11,440.2 | 11,411.6 | 10,988.4 |
| Investment property | 11.8 | 12.0 | 18.7 |
| Investments in equity-accounted investees | 321.1 | 305.9 | 309.3 |
| Other investments | 178.0 | 169.4 | 153.8 |
| Deferred tax assets | 2,143.1 | 2,529.5 | 2,610.9 |
| Defined benefit assets | 118.9 | 101.6 | 83.5 |
| Long-term derivative instruments and interest-bearing investments | 128.7 | 113.2 | 119.1 |
| Long-term other financial assets | 264.6 | 229.6 | 169.7 |
| Long-term other assets | 109.4 | 113.7 | 16.7 |
| Non-current assets | 19,038.6 | 19,786.0 | 19,148.8 |
| Inventories | 6,947.1 | 4,993.7 | 4,936.6 |
| Trade accounts receivable | 9,227.8 | 7,089.5 | 7,235.4 |
| Short-term contract assets | 128.8 | 94.0 | 96.8 |
| Short-term other financial assets | 137.8 | 118.4 | 123.4 |
| Short-term other assets | 1,164.3 | 1,066.1 | 1,067.9 |
| Income tax receivables | 345.0 | 303.4 | 297.8 |
| Short-term derivative instruments and interest-bearing investments | 94.2 | 112.7 | 199.5 |
| Cash and cash equivalents | 2,257.2 | 2,269.1 | 2,285.9 |
| Assets held for sale | 43.7 | 7.9 | 110.0 |
| Current assets | 20,345.9 | 16,054.8 | 16,353.3 |
| Total assets | 39,384.5 | 35,840.8 | 35,502.1 |
| Equity and liabilities in € millions | September 30, 2022 | December 31, 2021 | September 30, 2021 |
|---|---|---|---|
| Issued/subscribed capital | 512.0 | 512.0 | 512.0 |
| Capital reserves | 4,155.6 | 4,155.6 | 4,155.6 |
| Retained earnings | 9,602.5 | 10,258.6 | 10,105.6 |
| Other comprehensive income | 4.3 | –2,735.5 | –2,895.8 |
| Equity attributable to the shareholders of the parent | 14,274.4 | 12,190.7 | 11,877.4 |
| Non-controlling interests | 468.4 | 452.5 | 413.9 |
| Total equity | 14,742.8 | 12,643.2 | 12,291.3 |
| Long-term employee benefits | 1,713.5 | 4,743.0 | 4,499.3 |
| Deferred tax liabilities | 104.9 | 101.6 | 358.6 |
| Long-term provisions for other risks and obligations | 848.2 | 787.7 | 829.9 |
| Long-term indebtedness | 4,199.1 | 4,643.2 | 4,593.3 |
| Long-term other financial liabilities | 11.2 | 10.3 | 7.0 |
| Long-term contract liabilities | 9.6 | 7.6 | 7.3 |
| Long-term other liabilities | 21.2 | 36.0 | 63.0 |
| Non-current liabilities | 6,907.7 | 10,329.4 | 10,358.4 |
| Short-term employee benefits | 1,328.0 | 1,243.5 | 1,270.0 |
| Trade accounts payable | 7,184.3 | 5,865.4 | 5,376.2 |
| Short-term contract liabilities | 251.0 | 265.2 | 205.9 |
| Income tax payables | 750.8 | 672.9 | 614.3 |
| Short-term provisions for other risks and obligations | 1,075.4 | 1,130.7 | 1,168.8 |
| Short-term indebtedness | 4,306.4 | 1,617.3 | 1,975.6 |
| Short-term other financial liabilities | 1,874.8 | 1,265.0 | 1,289.2 |
| Short-term other liabilities | 946.6 | 808.2 | 914.8 |
| Liabilities held for sale | 16.7 | — | 37.6 |
| Current liabilities | 17,734.0 | 12,868.2 | 12,852.4 |
| Total equity and liabilities | 39,384.5 | 35,840.8 | 35,502.1 |
The spin-off of Vitesco Technologies on September 15, 2021, resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, in the comparative period. Vitesco Technologies is reported as discontinued operations in the comparative period.
The items in the consolidated statement of cash flows for the reporting period show continuing operations. The figures for the comparative period show continuing and discontinued operations. In addition, cash flow arising from operating activities, investing activities and financing activities is shown separately for continuing operations and discontinued operations in the comparative period.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| € millions | 2022 | 2021 | 2022 | 2021 |
| Net income | –185.7 | 1,332.9 | –197.9 | 317.7 |
| Income tax expense | 213.5 | 427.0 | 114.0 | 118.5 |
| Financial result | 195.1 | 108.0 | 96.1 | 93.4 |
| EBIT | 222.9 | 1,867.9 | 12.2 | 529.6 |
| Interest paid | –94.6 | –130.6 | –48.0 | –43.7 |
| Interest received | 40.9 | 29.3 | 16.0 | 3.5 |
| Income tax paid | –427.4 | –615.8 | –151.6 | –190.8 |
| Dividends received | 2.3 | 13.2 | 0.2 | 12.3 |
| Depreciation, amortization, impairment and reversal of impairment losses | 2,636.7 | 1,824.0 | 1,066.5 | 556.7 |
| Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses |
–12.2 | –5.4 | –8.5 | –5.4 |
| Gains/losses from the disposal of assets, companies and business operations | –9.5 | –90.6 | –2.9 | –79.2 |
| Changes in | ||||
| inventories | –1,639.1 | –1,415.4 | –528.5 | –460.5 |
| trade accounts receivable | –1,849.8 | –224.2 | –1,016.7 | –213.0 |
| trade accounts payable | 1,104.4 | 530.5 | 346.3 | 218.4 |
| employee benefits and other provisions | –8.8 | 187.5 | 120.2 | 10.8 |
| other assets and liabilities | –7.2 | 79.7 | 307.9 | 139.0 |
| Cash flow arising from operating activities | –41.4 | 2,050.1 | 113.1 | 477.7 |
| Cash flow arising from operating activities – continuing operations | –41.4 | 1,586.2 | 113.1 | 277.7 |
| Cash flow arising from operating activities – discontinued operations | n. a. | 463.9 | n. a. | 200.0 |
| Cash flow from the disposal of assets | 47.6 | 48.1 | 10.7 | 11.5 |
| Capital expenditure on property, plant and equipment, and software | –1,340.4 | –1,112.2 | –616.1 | –486.2 |
| Capital expenditure on intangible assets from development projects and miscellaneous |
–22.4 | –46.3 | –3.7 | –10.8 |
| Cash flow from the disposal of companies and business operations | –0.7 | 143.1 | –0.1 | 140.3 |
| Acquisition of companies and business operations | –102.2 | –43.6 | –92.8 | –12.5 |
| Cash flow arising from investing activities | –1,418.1 | –1,010.9 | –702.0 | –357.7 |
| Cash flow arising from investing activities – continuing operations | –1,418.1 | –852.9 | –702.0 | –308.8 |
| Cash flow arising from investing activities – discontinued operations | n. a. | –158.0 | n. a. | –48.9 |
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| € millions | 2022 | 2021 | 2022 | 2021 | |
| Cash flow before financing activities (free cash flow) | –1,459.5 | 1,039.2 | –588.9 | 120.0 | |
| Change in indebtedness | 1,814.0 | –741.6 | 919.7 | 10.3 | |
| Dividends paid | –440.0 | — | — | — | |
| Dividends paid to and cash changes from equity transactions with non-controlling interests |
–23.8 | –27.0 | –1.9 | –0.2 | |
| Cash flow arising from financing activities | 1,350.2 | –768.6 | 917.8 | 10.1 | |
| Cash flow arising from financing activities – continuing operations | 1,350.2 | –745.9 | 917.8 | 20.7 | |
| Cash flow arising from financing activities – discontinued operations | n. a. | –22.7 | n. a. | –10.6 | |
| Change in cash and cash equivalents | –109.3 | 270.6 | 328.9 | 130.1 | |
| Cash and cash equivalents at the beginning of the reporting period | 2,269.1 | 2,938.7 | 1,907.4 | 3,134.6 | |
| Effect of exchange-rate changes on cash and cash equivalents | 97.4 | 61.9 | 20.9 | 6.5 | |
| Cash and cash equivalents at the end of the reporting period | 2,257.2 | 3,271.2 | 2,257.2 | 3,271.2 | |
| Less cash and cash equivalents from discontinued operations at the time of disposal |
n. a. | –985.3 | n. a. | –985.3 | |
| Cash and cash equivalents from continuing operations at the end of the reporting period |
2,257.2 | 2,285.9 | 2,257.2 | 2,285.9 |
| Difference from | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| € millions | Issued/ subscribed capital1 |
Capital reserves |
Retained earnings |
Successive purchases2 |
remeasurement of defined benefit plans3 |
currency translation4 |
financial instruments5 |
Subtotal | Non controlling interests |
Total |
| 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 |
| Net income | — | — | 1,302.0 | — | — | — | — | 1,302.0 | 30.9 | 1,332.9 |
| Other comprehensive income | — | — | — | — | 617.7 | 438.2 | 86.1 | 1,142.0 | 20.5 | 1,162.5 |
| Net profit for the period | — | — | 1,302.0 | — | 617.7 | 438.2 | 86.1 | 2,444.0 | 51.4 | 2,495.4 |
| Dividends paid/resolved | — | — | — | — | — | — | — | — | –14.4 | –14.4 |
| Non-cash dividends due to the completed spin-off |
— | — | –2,824.8 | — | — | — | — | –2,824.8 | — | –2,824.8 |
| Other changes6 | — | — | –331.8 | –4.2 | 331.8 | — | — | –4.2 | 0.2 | –4.0 |
| 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 |
| As at January 1, 2022 | 512.0 | 4,155.6 | 10,258.6 | –311.8 | –1,994.9 | –507.8 | 79.0 | 12,190.7 | 452.5 | 12,643.2 |
| Net income | — | — | –216.1 | — | — | — | — | –216.1 | 30.4 | –185.7 |
| Other comprehensive income | — | — | — | — | 1,848.3 | 904.8 | –13.3 | 2,739.8 | 7.2 | 2,747.0 |
| Net profit for the period | — | — | –216.1 | — | 1,848.3 | 904.8 | –13.3 | 2,523.7 | 37.6 | 2,561.3 |
| Dividends paid/resolved | — | — | –440.0 | — | — | — | — | –440.0 | –27.3 | –467.3 |
| Other changes7 | — | — | — | — | — | — | — | — | 5.6 | 5.6 |
| As at September 30, 2022 | 512.0 | 4,155.6 | 9,602.5 | –311.8 | –146.6 | 397.0 | 65.7 | 14,274.4 | 468.4 | 14,742.8 |
1 Divided into 200,005,983 (PY: 200,005,983) outstanding shares.
2 Includes, in the previous year, an amount of -€4.2 million relating to effects from the first-time consolidation of previously non-consolidated subsidiaries.
3 Includes shareholder's portion of €0.1 million (PY: —) in non-realized gains and losses from pension obligations of equity-accounted investees.
4 Includes shareholder's portion of €0.5 million (PY: —) in the currency translation of equity-accounted investees.
5 The change in the difference arising from financial instruments, including deferred taxes, was due to other investments of -€13.3 million (PY: €86.1 million).
6 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.
7 Other changes in non-controlling interests due to changes in the scope of consolidation and capital increases.
All segment report tables show only the figures for continuing operations in the reporting and comparative periods for all segments. As part of the new organizational structure in place since January 1, 2022, the reporting segments are Automotive, Tires, ContiTech and Contract Manufacturing. All key figures for the segments reflect the resegmentation over the entire reporting period and are adjusted accordingly for the comparative period.
| € millions | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| External sales | 13,499.0 | 10,225.4 | 4,857.6 | 536.0 | — | 29,118.0 |
| Intercompany sales | 3.3 | 76.8 | 54.6 | 0.3 | –135.0 | — |
| Sales (total) | 13,502.3 | 10,302.2 | 4,912.2 | 536.3 | –135.0 | 29,118.0 |
| EBIT (segment result) | –1,140.4 | 1,358.3 | 150.9 | 10.0 | –155.9 | 222.9 |
| in % of sales | –8.4 | 13.2 | 3.1 | 1.9 | — | 0.8 |
| Depreciation and amortization1 | 1,660.2 | 707.6 | 240.1 | 27.0 | 1.8 | 2,636.7 |
| thereof impairment2 | 866.9 | 77.1 | 3.0 | 0.0 | — | 947.0 |
| Capital expenditure3 | 887.4 | 482.2 | 130.5 | 7.1 | 38.0 | 1,545.2 |
| in % of sales | 6.6 | 4.7 | 2.7 | 1.3 | — | 5.3 |
| Operating assets as at September 30 | 9,029.5 | 8,057.5 | 3,451.2 | 644.9 | 81.2 | 21,264.3 |
| Number of employees as at September 304 | 95,644 | 57,090 | 42,002 | 2,227 | 479 | 197,442 |
| Adjusted sales5 | 13,400.3 | 10,302.2 | 4,891.2 | 536.3 | –135.0 | 28,995.0 |
| Adjusted operating result (adjusted EBIT)6 | –132.3 | 1,460.3 | 269.9 | 11.3 | –155.7 | 1,453.5 |
| in % of adjusted sales | –1.0 | 14.2 | 5.5 | 2.1 | — | 5.0 |
1 Excluding impairment on financial investments.
2 Impairment also includes necessary reversals 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 | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| External sales | 11,337.3 | 8,541.6 | 4,399.8 | 691.5 | — | 24,970.2 |
| Intercompany sales | 49.5 | 66.1 | 47.7 | 1.3 | –164.6 | — |
| Sales (total) | 11,386.8 | 8,607.7 | 4,447.5 | 692.8 | –164.6 | 24,970.2 |
| EBIT (segment result) | –200.9 | 1,362.9 | 301.1 | 124.6 | –33.9 | 1,553.8 |
| in % of sales | –1.8 | 15.8 | 6.8 | 18.0 | — | 6.2 |
| Depreciation and amortization1 | 759.7 | 608.8 | 240.0 | 52.4 | 6.4 | 1,667.3 |
| thereof impairment2 | –2.1 | 1.0 | 0.3 | 13.8 | 0.1 | 13.1 |
| Capital expenditure3 | 625.5 | 302.3 | 131.9 | 10.8 | 36.7 | 1,107.2 |
| in % of sales | 5.5 | 3.5 | 3.0 | 1.6 | — | 4.4 |
| Operating assets as at September 30 | 8,086.3 | 6,727.1 | 3,063.7 | 807.1 | 121.8 | 18,806.0 |
| Number of employees as at September 304 | 89,174 | 57,137 | 42,790 | 2,944 | 450 | 192,495 |
| Adjusted sales5 | 11,386.8 | 8,607.7 | 4,318.5 | 692.8 | –164.6 | 24,841.2 |
| Adjusted operating result (adjusted EBIT)6 | –70.7 | 1,376.9 | 347.4 | 97.4 | –98.7 | 1,652.3 |
| in % of adjusted sales | –0.6 | 16.0 | 8.0 | 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 reversals 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 | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| Sales | 13,502.3 | 10,302.2 | 4,912.2 | 536.3 | –135.0 | 29,118.0 |
| Changes in the scope of consolidation1 | –102.0 | — | –21.0 | — | — | –123.0 |
| Adjusted sales | 13,400.3 | 10,302.2 | 4,891.2 | 536.3 | –135.0 | 28,995.0 |
| EBITDA | 519.8 | 2,065.9 | 391.0 | 37.0 | –154.1 | 2,859.6 |
| Depreciation and amortization2 | –1,660.2 | –707.6 | –240.1 | –27.0 | –1.8 | –2,636.7 |
| EBIT | –1,140.4 | 1,358.3 | 150.9 | 10.0 | –155.9 | 222.9 |
| Amortization of intangible assets from purchase price allocation (PPA) |
53.8 | 10.8 | 48.7 | — | — | 113.3 |
| Changes in the scope of consolidation1 | 23.4 | — | –2.3 | — | — | 21.1 |
| Special effects | ||||||
| Impairment on goodwill | 555.3 | — | — | — | — | 555.3 |
| Impairment3 | 310.1 | 77.1 | 5.6 | 0.0 | — | 392.8 |
| Restructuring4 | –3.0 | 0.5 | 57.9 | –0.2 | — | 55.2 |
| Restructuring-related expenses | 31.1 | 6.8 | 3.4 | 1.4 | — | 42.7 |
| Severance payments | 14.8 | 7.2 | 6.4 | 0.1 | 0.2 | 28.7 |
| Gains and losses from disposals of companies and business operations |
— | –0.4 | –0.7 | — | — | –1.1 |
| Other5 | 22.6 | — | — | — | — | 22.6 |
| Adjusted operating result (adjusted EBIT) | –132.3 | 1,460.3 | 269.9 | 11.3 | –155.7 | 1,453.5 |
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 reversals of impairment losses. It does not include impairment that arose in connection with a restructuring and impairment on financial investments and goodwill.
4 Also includes restructuring-related impairment losses totaling €3.2 million (Automotive €1.5 million; Tires €0.0 million; ContiTech €1.7 million) and a reversal of impairment losses of €4.3 million in the ContiTech segment.
5 Includes expenses of €22.6 million in connection with the valuation of the Washer Systems disposal group.
| € millions | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| Sales | 11,386.8 | 8,607.7 | 4,447.5 | 692.8 | –164.6 | 24,970.2 |
| Changes in the scope of consolidation1 | — | — | –129.0 | — | — | –129.0 |
| Adjusted sales | 11,386.8 | 8,607.7 | 4,318.5 | 692.8 | –164.6 | 24,841.2 |
| EBITDA | 558.8 | 1,971.7 | 541.1 | 177.0 | –27.5 | 3,221.1 |
| Depreciation and amortization2 | –759.7 | –608.8 | –240.0 | –52.4 | –6.4 | –1,667.3 |
| EBIT | –200.9 | 1,362.9 | 301.1 | 124.6 | –33.9 | 1,553.8 |
| Amortization of intangible assets from purchase price allocation (PPA) |
49.4 | 13.1 | 54.6 | — | — | 117.1 |
| Changes in the scope of consolidation1 | — | — | –23.6 | — | — | –23.6 |
| Special effects | ||||||
| Impairment on goodwill | — | — | — | — | — | — |
| Impairment3 | –2.1 | 0.1 | — | 10.4 | 0.1 | 8.5 |
| Restructuring4 | –51.1 | –17.3 | 0.7 | –39.6 | — | –107.3 |
| Restructuring-related expenses | 34.2 | — | 3.3 | 0.4 | — | 37.9 |
| Severance payments | 42.4 | 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 | 57.7 | — | — | — | 4.0 | 61.7 |
| Adjusted operating result (adjusted EBIT) | –70.7 | 1,376.9 | 347.4 | 97.4 | –98.7 | 1,652.3 |
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 reversals of impairment losses. It does not include impairment that arose in connection with a restructuring and impairment on financial investments and goodwill.
4 Also includes restructuring-related impairment losses totaling €4.5 million (Tires €0.9 million; ContiTech €0.3 million; Contract Manufacturing €3.3 million).
5 Mainly includes expenses totaling €90.8 million in connection with the spin-off of Vitesco Technologies. It also includes expenses totaling €3.2 million in connection with preparations for the repatriation of the business from former associate OSRAM CONTINENTAL GmbH, Munich, Germany, and income of €32.5 million from the reversal of provisions for capital commitments to this former associate.
Hanover, October 24, 2022
Continental Aktiengesellschaft The Executive Board
| 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 |
| 2023 | |
|---|---|
| Annual Financial Press Conference | March 8 |
| Analyst and Investor Conference Call | March 8 |
| Annual Shareholders' Meeting | April 27 |
| Quarterly Statement as at March 31, 2023 | May 10 |
| Half-Year Financial Report as at June 30, 2023 | August 9 |
| Quarterly Statement as at September 30, 2023 | November 8 |
Continental Aktiengesellschaft Headquarters Vahrenwalder Strasse 9 30165 Hanover, Germany Phone: +49 511 938-01 Fax: +49 511 938-81770
E-mail: [email protected] Commercial register of the Hanover Local Court, HR B 3527
All financial reports are available online at: www.continental-ir.com
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