Conti Predicts 25 billion euro Sales; 9% EBIT in FY10
The Continental Corporation is predicting it will achieve sales of more than 25 billion euros and an adjusted pre-tax profit margin (EBIT) of 9 per cent when it publishes full year financial results for 2010. The margin target had previously been 8 – 8.5 per cent. Continental released the projections in parallel with its third quarter results which show that the automotive supplier posted sales of 19.1 billion euros and an adjusted EBIT of 1.79 billion euros after three quarters, exceeding the pre-crisis level of the first three quarters of 2008. At 9.4 per cent, the nine-month adjusted EBIT margin also exceeded the comparable 2008 level.
“Step-by-step, Continental is regaining its former strength. With great efficiency, we have managed to make use of the tailwind of the economic recovery and the strong growth in Asia. After three quarters, we are now increasing our previous sales target to over 25 billion euros and, at the same time, the target for our adjusted margin to about 9 per cent for the full fiscal year,” said Continental executive board chairman Dr Elmar Degenhart on Wednesday 3 November upon publication of the financial report for the first nine months. “In addition, we managed another major step in our refinancing activities in the period from July to October. We were able to quickly place bonds in volumes totalling 3 billion euros at reasonable conditions on the financial market and reduce our bank loans by the net proceeds from these placements while substantially improving our debt maturity profile. In doing this, we have created a good and solid basis for the refinancing of our bank loans that become due in 2012.”
Strong free cash flow at the end of 2009, as well as to the capital increase which was implemented successfully in January 2010 meant the net indebtedness of the corporation stood at 8092.1 million euros on 30 September 2010, 803.4 million euros lower than on 31 December 2009, and 1,372.7 million euros lower than on 30 September 2009 (9,464.8 million euros).
In the first nine months of 2010, research and development expenses rose by 4.7 per cent compared with the same period of 2009 to 1,143.5 million euros from 1,092.4 million euros (6.0 per cent of sales compared to 7.6 per cent in the prior year period).
|Rubber Group||€millions||Margin in %|
Source: Continental AG
Rubber Group outperforms 2009
The Rubber sales reached 7,380.8 million euros in the period compared to 5,828.4 million during the same point in 2009. Despite record burdens from raw materials, the overall adjusted results after nine months have already exceeded the level that was achieved in fiscal 2009.
“The impact from the increase in raw material costs will however exceed 450 million euros for the Rubber Group for the entire year 2010. In the remaining months of this year, it will be possible to only partially offset this impact with mix improvements, increases in efficiency and the price increases that have already been announced,” said Wolfgang Schäfer, CFO of Continental AG.