Conti to support ‘double-digit’ 2011 growth with increased investment
Following a 2010 in which set targets were “clearly surpassed”, Continental AG says it aims to achieve double-digit growth this year. At the company’s Annual Financial Press Conference, held on March 3 in the German city of Frankfurt, CEO Dr. Elmar Degenhart reported a sales growth of almost 30 per cent, to 26 billion euros. This represents record sales for the automotive supplier, a personal best also matched by a record operating result.
Last year’s sales of 26.05 billion euros outstripped those in the industry-wide crisis year of 2009 by 2.52 billion euros. “Our great efforts have paid off,” commented Dr. Degenhart. “We grew at a faster rate than the recovering automotive markets, especially in the emerging Asian markets,” he added. Degenhart demonstrated this with figures showing automotive sector growth in Asia to be 21 per cent in 2010, while Continental increased its sales in Asia at the corporate level by almost 50 per cent to over 4 billion euros last year.
“After a good start and in light of a production forecast of 75 million passenger cars worldwide, we are striving to increase sales another 10 per cent to more than 28.5 billion euros this year,” Degenhart stated. “We want to achieve our 2010 adjusted sales margin of 9.7 per cent again in 2011. We are confident that we will achieve this goal although dramatic price increases for natural rubber in particular will negatively impact us with more than 700 million euros gross in additional raw materials expenses. We are anticipating an average natural rubber price of US$5.50 per kilogram this year.”
The corporation’s adjusted EBIT (adjusted in particular for acquisition-related amortisations and special effects) amounts to approximately 2.5 billion euros, with a 9.7 per cent margin. This EBIT was, however, negatively impacted by the interest result of -€697 million, yet an EBIT of 1.9 billion euros is, notes Conti, an absolute record and almost 3 billion euros better than in 2009. Return on sales amounts to 7.4 per cent. Compared with 2009, the corporation’s net income attributable to the shareholders increased by more than 2 billion euros to 576 million euros, corresponding to earnings per share of 2.88 euros compared with -9.76 euros a year ago. “Despite this positive development, we intend to propose to the Annual Shareholders’ Meeting on April 28, 2011 that no dividend be paid for fiscal year 2010,” Degenhart shared.
The German tyre and automotive component maker says it will support its growth plans with investments of around 1.5 billion euros. “We have already invested 1.3 billion euros in 2010 and underlined our efforts. It is all the more remarkable that we noticeably decreased our net debts again to 7.3 billion euros at the same time,” said Dr. Degenhart.