Continental profits markedly up in Q1 2014
In the first quarter of this year, sales at Continental Corporation increased 4.4 per cent to €8.39 billion, while net income attributable to shareholders of the parent rose 33.3 per cent to €588.3 million, or €2.94 per share. This jump in profits prompted CEO Dr. Elmar Degenhart to comment that the tyre and automotive systems manufacturer is “very capable of combining our growth with value creation.” EBIT rose by almost 21 per cent year-on-year to €903 million as at March 31. This corresponds to a margin of 10.8 per cent, after 9.3 per cent in the previous year. Adjusted EBIT for the first quarter climbed by 19.7 per cent year-on-year to €953 million in the first quarter. The adjusted EBIT margin was 11.4 per cent.
Sales within the company’s Rubber Group increased slightly to €3.3 billion in the first quarter. Adjusted EBIT rose 17.6 per cent to €556.2 million while the adjusted EBIT margin rose from 15.2 per cent in the first quarter of 2013 to 17.2 per cent.
Tire division sales were up 4.3 per cent year-on-year to €2.3 billion in the first quarter on the back of higher sales volumes. Adjusted EBIT for the Tire division climbed 20.8 per cent year-on-year to €442.5 million in the first quarter of 2014.
Tyre market development
Passenger car and light truck tyres: In Europe, Continental’s most important replacement tyre market, preliminary data indicates that demand for replacement passenger and light truck tyres rose six per cent year-on-year. For the year as a whole, the company expects the market to grow by two per cent. Growing replacement market demand was also recorded in the NAFTA region, with sales volumes for passenger and light truck tyres increasing by seven per cent. Continental forecasts a two per cent increase for the year as a whole. Continental has maintained its previous estimate of a six per cent volume increase for replacement passenger car and light truck tyres in Asia and a four per cent increase for South America. Global growth in demand for replacement passenger car and light truck tyres should reach three per cent.
Commercial vehicles tyres: The recovery in demand for replacement commercial vehicle tyres continued in Europe in the first quarter of 2014. According to preliminary figures, the comparatively weak sales from a year ago were exceeded by 15 per cent. Owing to the rising comparative basis over the remainder of the year, Continental still anticipates growth of three per cent for 2014 as a whole. Demand was up nine per cent year-on-year in the NAFTA region in the first quarter, and the company anticipates two per cent growth for 2014 as a whole. Growth of four per cent is expected for both Asia and South America, and Continental anticipates a four per cent global increase in demand for replacement market commercial vehicle tyres.