Continental: Tire division sales, EBIT lower in H1 2018
Although company sales and income were up during the first half of 2018, there was little to celebrate within the Tire division at Continental. Division sales volumes, sales and EBIT all decreased year-on-year in the six months to 30 June.
Continental estimates that worldwide demand for replacement market car and light commercial vehicle tyres grew two per cent year-on-year in the first six months of 2018. This result outstrips the Continental experience; the company reports that sales volumes for its products within this segment, both aftermarket and original equipment, were “down slightly year-on-year.”
It was a similar story in the medium and heavy commercial vehicle tyre market; although global replacement sales volumes for this segment are said to have increased two per cent year-on-year in the first half, Continental reports that sales volume figures for its commercial vehicle tyre business (both original equipment and aftermarket) were two per cent lower than the “high level” experienced in the same period of last year.
Sales within the Continental Tire division decreased 2.4 per cent to 5.44 billion in the first six months of 2018. The company notes that before changes in the scope of consolidation and exchange rate effects were considered, sales rose by 2.5 per cent. As a proportion of total Continental sales, Tire division sales amounted to 25.29 per cent in the first half of last year; during the first half of 2018, the Tire division accounted for 24.29 per cent of total sales.
Adjusted EBIT for the Tire division in the first half decreased by 11.8 per cent year-on-year, to 897.5 million euros. This corresponds to 16.5 per cent of adjusted, as opposed to 18.3 per cent in the first six months of last year.
Compared with the first half of last year, EBIT for the Tire division was down 13.8 per cent, to 889.1 million euros. The return on sales fell from 18.5 per cent to 16.4 per cent.
Finding the positive amongst this downwards trend, Continental CEO Dr Elmar Degenhart stated that “our tyre business was back up again in the second quarter, maintaining its profitable position on the global market.” Adjusted EBIT rose from 15.2 per cent in the first quarter to 17.8 per cent in the second, however was still lower than the 18.5 per cent achieved in the second quarter of 2017.
Full details of Continental’s financial results in H1 2018 can be read here.