Continental 3Q Figures Outperform Full Year 2004 Result
International automotive supplier Continental AG has once again lifted sales and earnings, with sales rising considerably by a two-digit figure thanks to the successful integration of Phoenix AG. “In the first three quarters, we have already outperformed the full-year figures for 2004 – for net income before taxes and interest as well as profit. In addition to the excellent operational performance, this is also a result of one-off effects,” said executive board chairman Manfred Wennemer on Wednesday in Hanover. “There is no indication that this trend will change in the fourth quarter, so we will top our record figures from last year, even when the one-off effects are not taken into consideration.”
Consolidated sales for the first nine months of 2005 rose by 11.1 per cent to 10.24 billion euros (9.214 billion in 2004). Phoenix contributed 734.2 million euros in sales. Before consolidation changes and exchange rate effects, consolidated sales increased by 4.2 per cent. The consolidated operating result (EBIT) was up 35.9 per cent to 1.138 billion with a return on sales of 11.1 per cent (9.1 per cent), or 11.9 per cent without the consolidation of Phoenix. Consolidated earnings jumped 54.9 per cent to 734.6 million euros (474.1 million euros in the same period 2004).
“Our key figures reflect a few special factors. Before these factors, the corporation recorded a 123.7 million euros improvement in the consolidated operating result,” explained Dr Alan Hippe, member of the Executive Board responsible for finances.
Consolidated EBIT for the first nine months of 2004 reflected expenses totalling 73.8 million euros for restructuring at the Mayfield plant. Furthermore, the pension plans for salaried employees in the US were changed, resulting in a one-off reversal of existing obligations totalling 27.5 million euros already in the first six months of 2005.
“Due to new pension and medical benefit agreements in the US, we had to release liabilities for certain pension and post-employment medical benefits amounting to 100.7 million euros as well, increasing the quarterly result by the same amount. The Sealing Systems business unit of ContiTech was sold on 1 October 2005, resulting in a net loss of 24.9 million euros which was already included in full as of 30 September 2005,” according to Hippe.
The Passenger and Light Truck Tires division increased sales in the first nine months of 2005 in comparison to the same period of 2004 by 8.5 per cent to 3.21 billion euros. Before consolidation changes and exchange rate effects, sales were up 4.5 per cent. The Passenger and Light Truck Tires division boosted its EBIT by 59.7 per cent to 480.8 million euros, with the return on sales rising to 15.0 per cent (10.2 per cent in 2004).
The Commercial Vehicle Tires division recorded a fall in sales for the first nine months of 2005 of 8.6 per cent to just over 1 billion from slightly more than 1.1 billion. Before changes in the scope of consolidation and exchange rate effects, however, sales rose by 7.3 per cent. The Commercial Vehicle Tires division improved its operating result (EBIT) by 50 per cent to 113.7 million euros with the return on sales climbing to 11.3 per cent.