Quarterly Report • Nov 8, 2023
Quarterly Report
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Continental ended the third quarter of 2023 in line with expectations. The technology company significantly improved the operating result in its Automotive group sector compared with the first half of the year. This was thanks to price adjustments, high cost discipline and stabilized supply chains. Continental generated good earnings in its Tires group sector and stable earnings in ContiTech, while making progress in Automotive. Furthermore, it increased its adjusted free cash flow year-on-year as well as compared with the first two quarters of 2023. This was due primarily to a reduction in inventories. The company has adjusted its sales outlook for the Automotive group sector – mainly because of ongoing negative exchange-rate effects – and its outlook for consolidated sales. It has also slightly raised its adjusted EBIT margin outlook for Tires due to the group sector's good earnings.
In the third quarter of 2023, Continental achieved consolidated sales of €10.2 billion (Q3 2022: €10.4 billion, -1.5 percent). Its adjusted operating result was €637 million (Q3 2022: €595 million, +7.1 percent), corresponding to an adjusted EBIT margin of 6.2 percent (Q3 2022: 5.7 percent). Net income in the third quarter increased to €299 million (Q3 2022: -€211 million). Adjusted free cash flow was €466 million (Q3 2022: -€496 million).
Continental has therefore also made progress in terms of adjusted free cash flow. But, as in the previous year, it still has significant ground to gain in the fourth quarter. It is focusing on increasing earnings and further reducing inventories and receivables in order to achieve an adjusted free cash flow of around €0.8 billion to €1.2 billion by the end of the year.
According to preliminary figures, the global production of passenger cars and light commercial vehicles amounted to around 22.3 million units in the third quarter of 2023. This was around the same level as the previous quarter (Q2 2023: 22.2 million units) and around 4 percent higher year-on-year (Q3 2022: 21.5 million units).
In the Automotive group sector, sales increased by 1.8 percent to €5.0 billion (Q3 2022: €4.9 billion). With its sales growing organically by 5.1 percent before exchange-rate effects and changes in the scope of consolidation, and global automotive production rising by around 4 percent, the group sector slightly outperformed the market. Automotive significantly increased its adjusted EBIT margin compared with the first two quarters of the year to 2.8 percent (Q3 2022: 2.5 percent). The improvement in earnings resulted in particular from the price adjustments made in response to inflation-related additional costs of around €1 billion for 2023 as a whole. High cost discipline and stabilized supply chains also had a positive impact on earnings.
The Tires group sector had another good quarter. Due to declining volumes in the tire-replacement business, sales in Tires were down year-on-year at €3.4 billion (Q3 2022: €3.6 billion, -5.4 percent). However, Tires increased its adjusted EBIT margin compared with the prior-year quarter to 13.2 percent (Q3 2022: 11.8 percent). The higher margin resulted primarily from the continued high share of premium tires as well as lower raw material costs.
The ContiTech group sector recorded another stable quarter, posting sales of €1.7 billion (Q3 2022: €1.7 billion, -1.0 percent) and an adjusted EBIT margin that was up slightly year-on-year at 6.6 percent (Q3 2022: 6.3 percent). This was thanks to inflation-related price adjustments in particular.
Sales in the Contract Manufacturing group sector were €114 million in the third quarter of 2023 (Q3 2022: €147 million), while the adjusted EBIT margin was -7.4 percent (Q3 2022: -3.3 percent).
For 2023, Continental now expects production of passenger cars and light commercial vehicles to increase by 5 to 7 percent year-onyear (previously: 3 to 5 percent). For the tire-replacement business, we continue to expect sales volumes to develop by -2 to 0 percent. The industrial business is currently showing signs of developing by -2 to 0 percent in the eurozone (we previously expected it to stabilize at the previous year's level); in the USA we anticipate a figure of between -1 and +1 percent (previously: -2 and 0 percent) for the year as a whole; and in China we expect a recovery in demand of 4 to 6 percent. Higher costs for materials, wages and salaries as well as energy and logistics – amounting to around €1.4 billion – are expected to weigh heavily on our earnings position in fiscal 2023.
Based on all of the assumptions mentioned as well as current exchange rates, Continental expects the following key financial figures for fiscal 2023:
This outlook takes into account the current anticipated impact of certain ongoing supply shortages for semiconductors on production volumes in 2023.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| Continental Group in € millions | 2023 | 2022 | 2023 | 2022 |
| Sales | 30,972.2 | 29,118.0 | 10,240.1 | 10,395.6 |
| EBITDA | 2,990.0 | 2,859.5 | 1,000.0 | 1,078.7 |
| in % of sales | 9.7 | 9.8 | 9.8 | 10.4 |
| EBIT | 1,368.5 | 222.9 | 460.7 | 12.2 |
| in % of sales | 4.4 | 0.8 | 4.5 | 0.1 |
| Net income attributable to the shareholders of the parent1 | 889.4 | –222.0 | 298.6 | –210.8 |
| Basic earnings per share in €1 | 4.45 | –1.11 | 1.49 | –1.05 |
| Diluted earnings per share in €1 | 4.45 | –1.11 | 1.49 | –1.05 |
| Research and development expenses (net)2,3 | 2,271.4 | 2,188.9 | 723.5 | 734.9 |
| in % of sales2,3 | 7.3 | 7.5 | 7.1 | 7.1 |
| Depreciation and amortization4 | 1,621.5 | 2,636.7 | 539.3 | 1,066.5 |
| thereof impairment5 | 10.8 | 947.0 | 2.1 | 503.1 |
| Capital expenditure6 | 1,526.0 | 1,545.2 | 585.7 | 557.7 |
| in % of sales | 4.9 | 5.3 | 5.7 | 5.4 |
| Operating assets as at September 30 | 21,177.8 | 21,264.3 | ||
| Number of employees as at September 307 | 203,593 | 197,442 | ||
| Adjusted sales8 | 30,881.6 | 29,069.3 | 10,213.5 | 10,370.3 |
| Adjusted operating result (adjusted EBIT)9 | 1,712.9 | 1,424.4 | 637.4 | 595.3 |
| in % of adjusted sales | 5.5 | 4.9 | 6.2 | 5.7 |
| Free cash flow | –622.3 | –1,459.5 | 466.7 | –588.9 |
| Net indebtedness as at September 30 | 5,714.8 | 6,025.4 | ||
| Gearing ratio in %1 | 39.2 | 40.8 |
1 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General
Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly. 2 In the year under review, the presentation of income and expenses in connection with specific warranties, restructuring measures, severance payments, as well as impairment and reversal of impairment losses on intangible assets and property, plant and equipment was changed. They are now assigned to the relevant functional areas. The comparative
period has been adjusted accordingly. 3 The assignment of income and expenses from certain business activities within the functional areas has been adjusted. The comparative period has been adjusted accordingly.
4 Excluding impairment on financial investments.
5 Impairment also includes necessary reversals of impairment losses.
6 Capital expenditure on property, plant and equipment, and software. 7 Excluding trainees.
8 Before changes in the scope of consolidation.
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| Automotive in € millions | 2023 | 2022 | 2023 | 2022 | |
| Sales | 15,177.4 | 13,502.3 | 5,029.2 | 4,941.3 | |
| EBITDA | 738.8 | 519.7 | 251.3 | 331.7 | |
| in % of sales | 4.9 | 3.8 | 5.0 | 6.7 | |
| EBIT | –26.4 | –1,140.4 | –2.6 | –426.2 | |
| in % of sales | –0.2 | –8.4 | –0.1 | –8.6 | |
| Research and development expenses (net)1,2 | 1,884.8 | 1,827.2 | 593.8 | 614.9 | |
| in % of sales1,2 | 12.4 | 13.5 | 11.8 | 12.4 | |
| Depreciation and amortization3 | 765.2 | 1,660.2 | 253.9 | 758.0 | |
| thereof impairment4 | 6.2 | 866.9 | 1.3 | 495.2 | |
| Capital expenditure5 | 837.2 | 887.4 | 322.3 | 315.7 | |
| in % of sales | 5.5 | 6.6 | 6.4 | 6.4 | |
| Operating assets as at September 30 | 9,487.4 | 9,028.9 | |||
| Number of employees as at September 306 | 102,574 | 95,644 | |||
| Adjusted sales7 | 15,177.4 | 13,502.0 | 5,029.2 | 4,941.0 | |
| Adjusted operating result (adjusted EBIT)8 | 146.3 | –156.0 | 139.4 | 123.7 | |
| in % of adjusted sales | 1.0 | –1.2 | 2.8 | 2.5 |
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| Tires in € millions | 2023 | 2022 | 2023 | 2022 | |
| Sales | 10,350.8 | 10,302.2 | 3,429.1 | 3,626.0 | |
| EBITDA | 1,873.0 | 2,066.0 | 637.0 | 629.1 | |
| in % of sales | 18.1 | 20.1 | 18.6 | 17.3 | |
| EBIT | 1,271.1 | 1,358.3 | 440.0 | 410.7 | |
| in % of sales | 12.3 | 13.2 | 12.8 | 11.3 | |
| Research and development expenses (net)1 | 253.4 | 240.1 | 85.0 | 79.7 | |
| in % of sales1 | 2.4 | 2.3 | 2.5 | 2.2 | |
| Depreciation and amortization3 | 601.9 | 707.6 | 197.0 | 218.3 | |
| thereof impairment4 | 3.6 | 77.1 | 0.0 | 7.6 | |
| Capital expenditure5 | 531.4 | 482.2 | 207.6 | 178.0 | |
| in % of sales | 5.1 | 4.7 | 6.1 | 4.9 | |
| Operating assets as at September 30 | 7,793.5 | 8,057.5 | |||
| Number of employees as at September 306 | 56,527 | 57,090 | |||
| Adjusted sales7 | 10,350.8 | 10,254.6 | 3,429.1 | 3,601.4 | |
| Adjusted operating result (adjusted EBIT)8 | 1,396.0 | 1,453.7 | 453.1 | 424.0 | |
| in % of adjusted sales | 13.5 | 14.2 | 13.2 | 11.8 |
1 In the year under review, the presentation of income and expenses in connection with specific warranties, restructuring measures, severance payments, as well as impairment and reversal of impairment losses on intangible assets and property, plant and equipment was changed. They are now assigned to the relevant functional areas. The comparative period has been adjusted accordingly.
2 The assignment of income and expenses from certain business activities within the functional areas has been adjusted. The comparative period has been adjusted accordingly.
3 Excluding impairment on financial investments.
4 Impairment also includes necessary reversals of impairment losses.
5 Capital expenditure on property, plant and equipment, and software.
6 Excluding trainees.
7 Before changes in the scope of consolidation.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| ContiTech in € millions | 2023 | 2022 | 2023 | 2022 |
| Sales | 5,183.2 | 4,912.2 | 1,710.5 | 1,728.5 |
| EBITDA | 516.2 | 391.0 | 170.3 | 170.4 |
| in % of sales | 10.0 | 8.0 | 10.0 | 9.9 |
| EBIT | 284.0 | 150.9 | 89.8 | 89.1 |
| in % of sales | 5.5 | 3.1 | 5.3 | 5.2 |
| Research and development expenses (net)1 | 133.2 | 121.6 | 44.6 | 40.3 |
| in % of sales1 | 2.6 | 2.5 | 2.6 | 2.3 |
| Depreciation and amortization2 | 232.3 | 240.1 | 80.4 | 81.3 |
| thereof impairment3 | 0.8 | 3.0 | 0.5 | 0.3 |
| Capital expenditure4 | 134.1 | 130.5 | 46.8 | 48.5 |
| in % of sales | 2.6 | 2.7 | 2.7 | 2.8 |
| Operating assets as at September 30 | 3,315.8 | 3,451.2 | ||
| Number of employees as at September 305 | 42,315 | 42,002 | ||
| Adjusted sales6 | 5,092.6 | 4,911.3 | 1,683.9 | 1,728.1 |
| Adjusted operating result (adjusted EBIT)7 | 329.5 | 271.1 | 111.1 | 108.4 |
| in % of adjusted sales | 6.5 | 5.5 | 6.6 | 6.3 |
| January 1 to September 30 | Third Quarter | ||||
|---|---|---|---|---|---|
| Contract Manufacturing in € millions | 2023 | 2022 | 2023 | 2022 | |
| Sales | 405.3 | 536.3 | 114.7 | 147.4 | |
| EBITDA | 25.8 | 37.0 | –3.2 | 3.2 | |
| in % of sales | 6.4 | 6.9 | –2.8 | 2.2 | |
| EBIT | 6.6 | 10.0 | –8.8 | –5.3 | |
| in % of sales | 1.6 | 1.9 | –7.7 | –3.6 | |
| Research and development expenses (net)1 | 0.0 | 0.0 | 0.0 | 0.0 | |
| in % of sales1 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Depreciation and amortization2 | 19.2 | 27.0 | 5.6 | 8.5 | |
| thereof impairment3 | 0.3 | 0.0 | 0.3 | 0.0 | |
| Capital expenditure4 | 3.7 | 7.1 | 1.5 | 1.8 | |
| in % of sales | 0.9 | 1.3 | 1.3 | 1.2 | |
| Operating assets as at September 30 | 447.5 | 644.9 | |||
| Number of employees as at September 305 | 1,619 | 2,227 | |||
| Adjusted sales6 | 405.3 | 536.3 | 114.7 | 147.4 | |
| Adjusted operating result (adjusted EBIT)7 | 7.0 | 11.4 | –8.5 | –4.8 | |
| in % of adjusted sales | 1.7 | 2.1 | –7.4 | –3.3 |
1 In the year under review, the presentation of income and expenses in connection with specific warranties, restructuring measures, severance payments, as well as impairment and reversal of impairment losses on intangible assets and property, plant and equipment was changed. They are now assigned to the relevant functional areas. The comparative period has been adjusted accordingly.
2 Excluding impairment on financial investments.
3 Impairment also includes necessary reversals of impairment losses.
4 Capital expenditure on property, plant and equipment, and software.
5 Excluding trainees.
6 Before changes in the scope of consolidation.
This quarterly statement was prepared in accordance with the accounting and measurement methods described in the International Financial Reporting Standards (IFRS) for interim reporting applicable at the end of the reporting period and endorsed by the European Union.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| € millions | 2023 | 2022 | 2023 | 2022 |
| Sales | 30,972.2 | 29,118.0 | 10,240.1 | 10,395.6 |
| Cost of sales1,2 | –24,375.0 | –23,519.3 | –8,129.8 | –8,259.8 |
| Gross margin on sales1,2 | 6,597.2 | 5,598.7 | 2,110.3 | 2,135.9 |
| Research and development expenses1,2 | –3,067.8 | –2,985.5 | –1,035.4 | –1,043.2 |
| Selling and logistics expenses1,2 | –1,872.0 | –1,790.5 | –618.8 | –616.4 |
| Administrative expenses1 | –922.1 | –806.9 | –295.4 | –255.4 |
| Other income1 | 1,171.8 | 1,163.2 | 438.1 | 430.7 |
| Other expenses1 | –562.3 | –968.3 | –148.4 | –647.9 |
| Income from equity-accounted investees | 22.8 | 11.5 | 10.1 | 8.4 |
| Other income from investments | 1.0 | 0.7 | 0.2 | 0.2 |
| EBIT | 1,368.5 | 222.9 | 460.7 | 12.2 |
| Interest income3 | 74.0 | 67.9 | 27.1 | 16.7 |
| Interest expense | –300.3 | –174.5 | –101.4 | –63.6 |
| Effects from currency translation | 93.9 | –10.7 | –13.2 | –11.1 |
| Effects from changes in the fair value of derivative instruments, and other valuation effects |
–38.6 | –83.6 | –27.4 | –38.0 |
| Financial result3 | –171.0 | –201.0 | –114.8 | –96.1 |
| Earnings before tax3 | 1,197.5 | 21.8 | 345.9 | –83.9 |
| Income tax expense | –276.6 | –213.5 | –38.3 | –114.1 |
| Net income3 | 920.9 | –191.7 | 307.6 | –198.0 |
| Non-controlling interests | –31.5 | –30.3 | –9.0 | –12.8 |
| Net income attributable to the shareholders of the parent3 | 889.4 | –222.0 | 298.6 | –210.8 |
| Basic earnings per share in €3 | 4.45 | –1.11 | 1.49 | –1.05 |
| Diluted earnings per share in €3 | 4.45 | –1.11 | 1.49 | –1.05 |
1 In the year under review, the presentation of income and expenses in connection with specific warranties, restructuring measures, severance payments, as well as impairment and reversal of impairment losses on intangible assets and property, plant and equipment was changed. They are now assigned to the relevant functional areas. The comparative period has been adjusted accordingly.
2 The assignment of income and expenses from certain business activities within the functional areas has been adjusted. The comparative period has been adjusted accordingly.
3 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly.
| January 1 to September 30 | Third Quarter | |||
|---|---|---|---|---|
| € millions | 2023 | 2022 | 2023 | 2022 |
| Net income1 | 920.9 | –191.7 | 307.6 | –198.0 |
| Items that will not be reclassified to profit or loss | ||||
| Remeasurement of defined benefit plans2 | 301.7 | 2,627.8 | 361.5 | 317.3 |
| Fair value adjustments2 | 304.2 | 2,667.5 | 367.3 | 334.9 |
| Investment in equity-accounted investees3 | 0.1 | 0.1 | 0.1 | 0.1 |
| Currency translation2 | –2.6 | –39.8 | –5.9 | –17.7 |
| Other investments | –51.8 | –13.8 | –0.5 | –12.6 |
| Fair value adjustments2 | –51.9 | –8.5 | –0.3 | –7.7 |
| Investment in equity-accounted investees3 | 0.2 | –3.9 | 0.2 | –3.9 |
| Currency translation2 | –0.1 | –1.4 | –0.4 | –1.0 |
| Tax on other comprehensive income | –82.0 | –777.9 | –104.1 | –89.4 |
| Items that may be reclassified subsequently to profit or loss | ||||
| Currency translation2 | 74.6 | 910.9 | 98.9 | 349.6 |
| Effects from currency translation2 | –6.1 | 910.4 | 89.4 | 349.1 |
| Reclassification adjustments to profit or loss | 81.1 | — | 9.9 | — |
| Investment in equity-accounted investees3 | –0.4 | 0.5 | –0.4 | 0.5 |
| Other comprehensive income | 242.5 | 2,747.0 | 355.8 | 564.9 |
| Comprehensive income1 | 1,163.4 | 2,555.3 | 663.4 | 366.9 |
| Attributable to non-controlling interests | –0.9 | –37.6 | –10.3 | –17.9 |
| Attributable to the shareholders of the parent1 | 1,162.5 | 2,517.7 | 653.1 | 349.0 |
1 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly.
2 Including non-controlling interests.
3 Including taxes.
| € millions | September 30, 2023 | December 31, 2022 | September 30, 2022 |
|---|---|---|---|
| Goodwill | 3,216.9 | 3,218.2 | 3,285.8 |
| Other intangible assets | 865.3 | 973.7 | 1,037.0 |
| Property, plant and equipment | 11,535.6 | 11,467.2 | 11,440.2 |
| Investment property | 11.5 | 11.5 | 11.8 |
| Investments in equity-accounted investees | 302.2 | 305.1 | 321.1 |
| Other investments | 132.2 | 170.0 | 178.0 |
| Deferred tax assets1 | 2,234.2 | 2,059.2 | 1,922.3 |
| Defined benefit assets | 105.5 | 93.1 | 118.9 |
| Long-term derivative instruments and interest-bearing investments | 80.1 | 105.8 | 128.7 |
| Long-term other financial assets | 268.8 | 270.0 | 264.6 |
| Long-term other assets | 48.0 | 114.8 | 109.2 |
| Non-current assets1 | 18,800.4 | 18,788.7 | 18,817.7 |
| Inventories | 6,881.2 | 6,729.6 | 6,947.1 |
| Trade accounts receivable | 8,596.4 | 7,767.7 | 9,227.8 |
| Short-term contract assets | 154.5 | 99.8 | 128.8 |
| Short-term other financial assets | 138.1 | 140.0 | 137.8 |
| Short-term other assets | 1,182.0 | 1,034.0 | 1,164.5 |
| Income tax receivables | 358.6 | 277.6 | 345.0 |
| Short-term derivative instruments and interest-bearing investments | 107.2 | 101.5 | 94.2 |
| Cash and cash equivalents | 2,227.9 | 2,988.0 | 2,257.2 |
| Assets held for sale | — | — | 43.7 |
| Current assets | 19,646.0 | 19,138.0 | 20,346.0 |
| Total assets1 | 38,446.4 | 37,926.7 | 39,163.7 |
1 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly.
| € millions | September 30, 2023 | December 31, 2022 | September 30, 2022 |
|---|---|---|---|
| Issued/subscribed capital | 512.0 | 512.0 | 512.0 |
| Capital reserves | 4,155.6 | 4,155.6 | 4,155.6 |
| Retained earnings1 | 10,499.9 | 9,910.5 | 9,621.9 |
| Other comprehensive income | –1,045.7 | –1,319.0 | 4.3 |
| Equity attributable to the shareholders of the parent1 | 14,121.7 | 13,259.1 | 14,293.7 |
| Non-controlling interests | 452.0 | 475.8 | 468.4 |
| Total equity1 | 14,573.8 | 13,735.0 | 14,762.2 |
| Long-term employee benefits | 2,413.0 | 2,623.5 | 1,713.5 |
| Deferred tax liabilities | 90.1 | 57.5 | 104.9 |
| Long-term provisions for other risks and obligations | 702.0 | 624.1 | 848.2 |
| Long-term indebtedness | 4,311.3 | 4,006.0 | 4,199.1 |
| Long-term other financial liabilities | 9.8 | 10.0 | 11.2 |
| Long-term contract liabilities | 7.1 | 7.8 | 9.6 |
| Long-term other liabilities | 23.9 | 31.0 | 21.2 |
| Non-current liabilities | 7,557.2 | 7,359.9 | 6,907.7 |
| Short-term employee benefits | 1,439.2 | 1,274.7 | 1,328.0 |
| Trade accounts payable | 6,753.2 | 7,637.0 | 7,184.3 |
| Short-term contract liabilities | 207.1 | 232.4 | 251.0 |
| Income tax payables1 | 491.4 | 525.7 | 530.0 |
| Short-term provisions for other risks and obligations1 | 979.2 | 1,036.8 | 1,056.0 |
| Short-term indebtedness | 3,818.7 | 3,688.7 | 4,306.4 |
| Short-term other financial liabilities | 1,731.1 | 1,763.8 | 1,874.8 |
| Short-term other liabilities | 895.5 | 672.8 | 946.7 |
| Liabilities held for sale | — | — | 16.7 |
| Current liabilities1 | 16,315.4 | 16,831.8 | 17,493.8 |
| Total equity and liabilities1 | 38,446.4 | 37,926.7 | 39,163.7 |
1 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly.
| January 1 to September 30 Third Quarter |
|||||
|---|---|---|---|---|---|
| € millions | 2023 | 2022 | 2023 | 2022 | |
| Net income1 | 920.9 | –191.7 | 307.6 | –198.0 | |
| Income tax expense | 276.6 | 213.5 | 38.3 | 114.1 | |
| Financial result1 | 171.0 | 201.0 | 114.8 | 96.1 | |
| EBIT | 1,368.5 | 222.9 | 460.7 | 12.2 | |
| Interest paid | –195.8 | –94.6 | –71.3 | –48.0 | |
| Interest received | 83.6 | 40.9 | 27.6 | 16.0 | |
| Income tax paid | –550.1 | –427.4 | –199.6 | –151.6 | |
| Dividends received | 22.9 | 2.3 | 21.4 | 0.2 | |
| Depreciation, amortization, impairment and reversal of impairment losses | 1,621.5 | 2,636.7 | 539.3 | 1,066.5 | |
| Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses |
–23.8 | –12.2 | –10.3 | –8.6 | |
| Gains/losses from the disposal of assets, companies and business operations | 62.7 | –9.5 | 23.6 | –2.9 | |
| Changes in | |||||
| inventories | –142.3 | –1,639.1 | 199.4 | –528.5 | |
| trade accounts receivable | –804.8 | –1,849.8 | –297.6 | –1,016.7 | |
| trade accounts payable | –886.3 | 1,104.4 | –194.7 | 346.3 | |
| employee benefits and other provisions | 186.7 | –8.8 | 262.1 | 120.2 | |
| other assets and liabilities | 46.9 | –7.1 | 224.6 | 308.0 | |
| Cash flow arising from operating activities | 789.8 | –41.4 | 985.3 | 113.1 | |
| Cash flow from the disposal of assets | 71.2 | 47.6 | 9.3 | 10.6 | |
| Capital expenditure on property, plant and equipment, and software | –1,343.1 | –1,340.4 | –526.0 | –616.0 | |
| Capital expenditure on intangible assets from development projects and miscellaneous |
–15.2 | –22.5 | –2.3 | –3.7 | |
| Cash flow from the disposal of companies and business operations | 40.4 | –0.7 | 0.7 | –0.1 | |
| Acquisition of companies and business operations | –165.4 | –102.2 | –0.3 | –92.8 | |
| Cash flow arising from investing activities | –1,412.2 | –1,418.1 | –518.6 | –702.1 | |
| Cash flow before financing activities (free cash flow) | –622.3 | –1,459.5 | 466.7 | –588.9 | |
| Issuance of bonds2 | 1,250.0 | — | 500.0 | — | |
| Redemption of bonds2 | –500.0 | — | –500.0 | — | |
| Repayment of lease liabilities2 | –228.9 | –246.2 | –74.5 | –92.0 | |
| Change in other indebtedness2 | –267.5 | 2,089.1 | –449.7 | 1,003.9 | |
| Change in derivative instruments and interest-bearing investments2 | –6.6 | 1.1 | 16.2 | 13.6 | |
| Other cash changes | –8.3 | –30.1 | –1.8 | –5.9 | |
| Dividends paid | –300.0 | –440.0 | — | — | |
| Addition of cash and cash equivalents from the first-time consolidation of subsidiaries |
0.0 | — | 0.0 | — | |
| Dividends paid to and cash changes from equity transactions with non-controlling interests |
–22.7 | –23.8 | –2.6 | –1.9 | |
| Cash flow arising from financing activities | –84.0 | 1,350.1 | –512.4 | 917.7 | |
| Change in cash and cash equivalents | –706.3 | –109.4 | –45.7 | 328.8 | |
| Cash and cash equivalents at the beginning of the reporting period | 2,988.0 | 2,269.1 | 2,271.5 | 1,907.4 | |
| Effect of exchange-rate changes on cash and cash equivalents | –53.7 | 97.4 | 2.1 | 20.9 | |
| Cash and cash equivalents at the end of the reporting period | 2,227.9 | 2,257.2 | 2,227.9 | 2,257.2 |
1 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly. 2 The presentation of the change in indebtedness was revised in the 2022 annual report. The previous year's figures have been adjusted accordingly.
| Difference from | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| € millions | Issued/ subscribed capital1 |
Capital reserves |
Retained earnings2 |
Successive purchases3 |
remeasurement of defined benefit plans4 |
currency translation5 |
financial instruments6 |
Subtotal2 | Non controlling interests |
Total2 |
| As at January 1, 20222 | 512.0 | 4,155.6 | 10,283.9 | –311.8 | –1,994.9 | –507.8 | 79.0 | 12,216.0 | 452.5 | 12,668.5 |
| Net income2 | — | — | –222.0 | — | — | — | — | –222.0 | 30.3 | –191.7 |
| Other comprehensive income | — | — | — | — | 1,848.3 | 904.8 | –13.3 | 2,739.7 | 7.3 | 2,747.0 |
| Net profit for the period2 | — | — | –222.0 | — | 1,848.3 | 904.8 | –13.3 | 2,517.7 | 37.6 | 2,555.3 |
| Dividends paid/resolved | — | — | –440.0 | — | — | — | — | –440.0 | –27.3 | –467.3 |
| Other changes7 | — | — | — | — | — | — | — | — | 5.6 | 5.6 |
| As at September 30, 20222 | 512.0 | 4,155.6 | 9,621.9 | –311.8 | –146.6 | 397.0 | 65.7 | 14,293.7 | 468.4 | 14,762.2 |
| As at January 1, 2023 | 512.0 | 4,155.6 | 9,910.5 | –311.8 | –773.9 | –295.9 | 62.7 | 13,259.1 | 475.8 | 13,735.0 |
| Net income | — | — | 889.4 | — | — | — | — | 889.4 | 31.5 | 920.9 |
| Other comprehensive income | — | — | — | — | 216.5 | 105.3 | –48.7 | 273.1 | –30.6 | 242.5 |
| Net profit for the period | — | — | 889.4 | — | 216.5 | 105.3 | –48.7 | 1,162.5 | 0.9 | 1,163.4 |
| Dividends paid/resolved | — | — | –300.0 | — | — | — | — | –300.0 | –22.6 | –322.6 |
| Other changes7 | — | — | — | 0.1 | — | — | — | 0.1 | –2.1 | –2.0 |
| As at September 30, 2023 | 512.0 | 4,155.6 | 10,499.9 | –311.7 | –557.4 | –190.6 | 14.0 | 14,121.7 | 452.0 | 14,573.8 |
1 Divided into 200,005,983 (PY: 200,005,983) outstanding shares with dividend and voting rights.
2 The methodology used in the consolidated financial statements for the recognition of uncertain tax positions has been changed. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements in the 2022 annual report. The comparative period has been adjusted accordingly.
3 Includes an amount of €0.1 million (PY: —) relating to effects from the first-time consolidation of previously non-consolidated subsidiaries.
4 Includes shareholder's portion of €0.1 million (PY: €0.1 million) in non-realized gains and losses from pension obligations of equity-accounted investees.
5 Includes shareholder's portion of -€0.4 million (PY: €0.5 million) in the currency translation of equity-accounted investees. 6 The change in the difference arising from financial instruments, including deferred taxes, was due to other investments of -€48.7 million (PY: -€13.3 million).
7 Other changes in non-controlling interests due to changes in the scope of consolidation and capital increases.
| € millions | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| External sales | 15,171.6 | 10,271.2 | 5,125.0 | 404.3 | — | 30,972.2 |
| Intercompany sales | 5.7 | 79.5 | 58.2 | 0.9 | –144.4 | — |
| Sales (total) | 15,177.4 | 10,350.8 | 5,183.2 | 405.3 | –144.4 | 30,972.2 |
| EBIT (segment result) | –26.4 | 1,271.1 | 284.0 | 6.6 | –166.8 | 1,368.5 |
| in % of sales | –0.2 | 12.3 | 5.5 | 1.6 | — | 4.4 |
| Depreciation and amortization1 | 765.2 | 601.9 | 232.3 | 19.2 | 3.0 | 1,621.5 |
| thereof impairment2 | 6.2 | 3.6 | 0.8 | 0.3 | — | 10.8 |
| Capital expenditure3 | 837.2 | 531.4 | 134.1 | 3.7 | 19.6 | 1,526.0 |
| in % of sales | 5.5 | 5.1 | 2.6 | 0.9 | — | 4.9 |
| Operating assets as at September 30 | 9,487.4 | 7,793.5 | 3,315.8 | 447.5 | 133.5 | 21,177.8 |
| Number of employees as at September 304 | 102,574 | 56,527 | 42,315 | 1,619 | 558 | 203,593 |
| Adjusted sales5 | 15,177.4 | 10,350.8 | 5,092.6 | 405.3 | –144.4 | 30,881.6 |
| Adjusted operating result (adjusted EBIT)6 | 146.3 | 1,396.0 | 329.5 | 7.0 | –165.9 | 1,712.9 |
| in % of adjusted sales | 1.0 | 13.5 | 6.5 | 1.7 | — | 5.5 |
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.
6 Before amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special effects.
| € millions | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| External sales | 13,499.0 | 10,225.4 | 4,857.7 | 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 | –156.0 | 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 | 1.9 | 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 | 38.1 | 1,545.2 |
| in % of sales | 6.6 | 4.7 | 2.7 | 1.3 | — | 5.3 |
| Operating assets as at September 30 | 9,028.9 | 8,057.5 | 3,451.2 | 644.9 | 81.9 | 21,264.3 |
| Number of employees as at September 304 | 95,644 | 57,090 | 42,002 | 2,227 | 479 | 197,442 |
| Adjusted sales5 | 13,502.0 | 10,254.6 | 4,911.3 | 536.3 | –135.0 | 29,069.3 |
| Adjusted operating result (adjusted EBIT)6 | –156.0 | 1,453.7 | 271.1 | 11.4 | –155.8 | 1,424.4 |
| in % of adjusted sales | –1.2 | 14.2 | 5.5 | 2.1 | — | 4.9 |
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.
| € millions | Automotive | Tires | ContiTech | Contract Manufacturing |
Other/ Holding/ Consolidation |
Continental Group |
|---|---|---|---|---|---|---|
| Sales | 15,177.4 | 10,350.8 | 5,183.2 | 405.3 | –144.4 | 30,972.2 |
| Changes in the scope of consolidation1 | — | — | –90.6 | — | — | –90.6 |
| Adjusted sales | 15,177.4 | 10,350.8 | 5,092.6 | 405.3 | –144.4 | 30,881.6 |
| EBITDA | 738.8 | 1,873.0 | 516.2 | 25.8 | –163.8 | 2,990.0 |
| Depreciation and amortization2 | –765.2 | –601.9 | –232.3 | –19.2 | –3.0 | –1,621.5 |
| EBIT | –26.4 | 1,271.1 | 284.0 | 6.6 | –166.8 | 1,368.5 |
| Amortization of intangible assets from purchase price allocation (PPA) |
43.6 | 4.8 | 40.2 | — | — | 88.6 |
| Changes in the scope of consolidation1 | — | — | –6.8 | — | — | –6.8 |
| Special effects | ||||||
| Impairment on goodwill | — | — | — | — | — | — |
| Impairment3 | 6.2 | 5.3 | 0.5 | 0.3 | — | 12.3 |
| Restructuring4 | 71.5 | –1.0 | 1.3 | 0.0 | — | 71.9 |
| Restructuring-related expenses | 13.3 | 17.8 | 1.5 | — | — | 32.6 |
| Severance payments | 11.5 | 13.3 | 12.7 | 0.1 | 0.9 | 38.5 |
| Gains and losses from disposals of companies and business operations |
26.6 | 72.8 | –6.3 | 0.0 | — | 93.2 |
| Other5 | — | 11.8 | 2.2 | — | — | 14.0 |
| Adjusted operating result (adjusted EBIT) | 146.3 | 1,396.0 | 329.5 | 7.0 | –165.9 | 1,712.9 |
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 reversals of impairment losses of €1.8 million in the Tires segment and impairments of €0.3 million in the ContiTech segment.
5 Includes allowances for doubtful accounts on accounts receivable and debt waivers from the sale of all Russian operations in the Tires segment and some operations in the ContiTech segment in Russia.
| € 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 | –0.2 | –47.6 | –0.9 | — | — | –48.8 |
| Adjusted sales | 13,502.0 | 10,254.6 | 4,911.3 | 536.3 | –135.0 | 29,069.3 |
| EBITDA | 519.7 | 2,066.0 | 391.0 | 37.0 | –154.1 | 2,859.5 |
| Depreciation and amortization2 | –1,660.2 | –707.6 | –240.1 | –27.0 | –1.9 | –2,636.7 |
| EBIT | –1,140.4 | 1,358.3 | 150.9 | 10.0 | –156.0 | 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 | –0.4 | –6.5 | –1.2 | — | — | –8.1 |
| 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 | — | 42.6 |
| Severance payments | 14.8 | 7.2 | 6.4 | 0.1 | 0.2 | 28.8 |
| 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) | –156.0 | 1,453.7 | 271.1 | 11.4 | –155.8 | 1,424.4 |
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.
Hanover, October 23, 2023
Continental Aktiengesellschaft The Executive Board
This quarterly statement has been prepared in euros. Unless otherwise stated, all amounts are shown in millions of euros (€ millions). Please note that differences may arise as a result of the use of rounded amounts and percentages.
| 2023 | |
|---|---|
| Annual 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 |
| 2024 | |
|---|---|
| Annual Press Conference | March 7 |
| Analyst and Investor Conference Call | March 7 |
| Annual Shareholders' Meeting | April 26 |
| Quarterly Statement as at March 31, 2024 | May 8 |
| Half-Year Financial Report as at June 30, 2024 | August 7 |
| Quarterly Statement as at September 30, 2024 | November 11 |
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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