Continental back in DAX after seven years
After a seven-year gap, Continental AG, Hanover, is back in Dax. On September 22 the international automotive supplier will return to the German’s stock market’s blue chip index. The announcement was made yesterday by the Deutsche Börse AG in Frankfurt/Main. Continental, a founding member of the index, thus becomes the first company in Dax’s fifteen-year history to stage a comeback into the circle of Germany’s 30 largest companies.
“We are very pleased to resume our position in Dax. It will help draw more attention to our business success throughout the international financial community than at present,” said Manfred Wennemer, Chairman of the Executive Board, in response to the decision. “Our return to the German stock market’s blue chip index is a clear acknowledgement of our strategy, which is geared towards profitable growth. At the same time it pays recognition to our status as one of the major automotive suppliers world-wide.”
Despite the slump in the automotive industry, the Corporation presented very good results for the first six months of 2003 and upped its consolidated operating earnings (EBITA) forecast for the year to more than 700 million Euro. Continental’s share price reacted by moving well above 20 Euro for the first time since the fall of 2000. Since the start of the year, the share price has risen more than 40 per cent (as of July 31). In the same period the Dax index showed a gain of around 20 per cent and M-Dax of around 26 percent.
Dr. Alan Hippe, Executive Board member responsible for Finance, Controlling and Law, also regards the greatly improved financial power as a reason for being uprated to Dax, saying: “As indicated, we have greatly reduced our net indebtedness and will get the gearing ratio (ratio of net indebtedness to shareholders’ equity) down below 100 percent by the end of this year.” Hippe assumes that Conti’s new start in the upper echelons of the stock market will further boost trade volume and share price. “I am highly confident in this regard. A number of prominent analysts certainly had a reason for upping their recommendations in recent times” he said.