Continental is the latest automotive sector company to report lower year-on-year income in the second quarter of the year. The tyre maker and automotive systems supplier describes its fiscal performance during the period as “an overall solid” result despite a “sharply declining market.” It is nevertheless considering ways of keeping its production costs in check, and will report its progress to this end in the weeks to come.
Preliminary key data for the 2017 fiscal year published this week shows annual sales at Continental AG to have met estimates announced in November. The tyre maker and automotive technology company reports sales of “around 44 billion euros,” while the adjusted EBIT margin for the year is approximately 10.8 per cent. Continental views its annual targets as being “exceeded”.
After what it says was “a successful start to the new year,” Continental Corporation has raised its adjusted EBIT outlook. “For fiscal 2014 we intend to comfortably achieve an adjusted EBIT margin of 10.5 per cent instead of the originally advised 10.0 per cent,” announced Continental CEO Dr. Elmar Degenhart at last Friday’s Annual Shareholders’ Meeting.
During last Thursday’s annual press conference, Continental CEO Dr. Elmar Degenhart shared that expansion of the tyre business and further acquisitions are on the cards as part of the company’s aim of reducing its reliance on the automotive original equipment industry. After discussing the recent acquisition of Veyance Technologies, a firm he described as “ideally” matching the ContiTech division in terms of both product range and markets, Degenhart added that further steps towards reducing automotive OE dependence will follow: “Firstly, in the form of continuous expansion of our replacement tyre business. And then too, we are not ruling out the possibility of further acquisitions.”
The worst of the flooding in Central Europe is now over and the time has arrived to clean up – an effort that some estimate will cost up to €12 billion. Continental has chipped in towards these efforts with a donation of €250,000.
Continental has been in business for 142 years, and since 1882 the company has utilised the ‘prancing horse’ in its logo. This year, Conti’s logo and corporate image has been given the once-over in order to, as the company puts it, underline its change over the years from being a pure tyre maker to becoming one of the world's largest system suppliers for automotive technologies. The horse still features prominently in Continental’s new logo – the company says it now holds a more natural and dynamic position – and it is joined by a new slogan: Continental, the future in motion. This is written in a new font, although the uninitiated may be hard pressed to spot the difference between the new and old.
“Our technological solutions are helping people to enrich the quality of their life through mobility and to structure their living space in a sustainable manner,” explains Continental’s chief executive officer Dr. Elmar Degenhart. “We create fascinating solutions and products for volume production in reliable, first-class quality and faster than our competitors. Our brand symbolises this goal and is the promise to our stake-holders by which we measure ourselves on a daily basis.”
On 13 May, the Schaeffler Group gave notice of its intention to terminate the mutual investment agreement it has held with Continental AG since 2008. The agreement will terminate in May 2014.
Harry Rogasch is reporting to Berlin as head of Continental’s new Liaison Office for Public Affairs. The office opens for business in the new year and Rogasch’s responsibilities will include representing the legislative and regulatory interests of the company's Rubber and Automotive Groups and engaging in dialogue with political, administrative, and regulatory institutions in the German capital.
At its Annual Shareholders’ Meeting on 27 April, the Continental Corporation reported a “very good start” to this year. During the first quarter of 2012, the company experienced a double-digit year-on-year growth in sales to 8.3 billion euros, with sales in both its tyre and automotive markets stronger. Reported EBIT, at 766 million euros, exceeded the previous year’s figure considerably, and with a margin of 10.6 per cent, adjusted EBIT before acquisition-related amortisation and special effects amounted to roughly 875 million euros, up from last year’s figure of 734 million euros. Continental will publish its first quarter report in full on 3 May.
German tyre and automotive component manufacturer Continental AG has donated 250,000 euros in emergency aid for those living in the regions of Japan destroyed by the earthquake and tsunami. Referring to recent developments, company CEO Dr. Elmar Degenhart said “our thoughts are currently with the people of Japan who are living through one of the country’s worst crises. Management and employees alike have been devastated by the disaster and its consequences.
During the three months to March 31, Continental AG achieved sales of almost six billion euros, a 1.7 billion euro year-on-year increase. At 494 million euros, the company’s reported EBIT was more than 650 million euros higher than the comparative figure for the previous year’s quarter. From this total, sales from Conti’s Rubber Group accounted for 2.2 billion of the total, and reported group EBIT was 313 million euros.
As of February 15 the role of senior vice president at Continental Corporation’s Corporate Communications department will be handled by Dr. Felix Gress. The 49-year old comes to Conti from Metropolregion Rhein-Neckar GmbH, where he served as managing director, and succeeds Dr. Heimo Prokop, who left Continental on December 31, 2009. In his new position, Gress will report directly to Conti Executive Board chairman Dr. Elmar Degenhart.
The issuance of 31 million new Continental AG shares, valued at 35 euros apiece, is anticipated to increase the company’s capital by approximately 18 per cent. This rights issue, approved by Conti’s Supervisory Board on the evening of January 6, has been described by Continental as “another significant milestone” in its plan to improve its capital and financing structure, and the capital raised along with the 2.5 billion euro loan announced last month will be used to repay the company’s 3.5 billion euro Tranche B debt, which is due in August.
Continental AG reports having already successfully completed the first “key steps” of its overall plan to improve its current financing structure and capital structure following the signing of loan agreements on December 19. The German tyre and automotive components supplier states that “important” amendments have been made to the existing loan agreements, allowing for the repayment of the 3.5 billion euro tranche due in August 2010 inter alia by a forward start facility (FSF) while also providing further flexibility. At the same time, the company has received FSF commitments in excess of the requested 2.5 billion euros, which has resulted in an over-subscription of their bank group’s request.
Continental AG, Hanover, has hired Credit Suisse to act as an independent consultant for “the upcoming financing topics within the corporation.” The move is widely seen as preparation for a refinancing project that could be worth as much as 1.5 billion euros. According to a statement reporting the news, the key task of the advisor is to evaluate options for future sustainable financing and capital structures as well as to enable an optimal refinancing of the company.
“For the upcoming tasks and meetings regarding various interrelated financing topics, we wanted to ensure that we also have the support of an independent consultant without prior or existing connections to any of the stakeholders of Continental,” said Continental CEO Dr. Elmar Degenhart on 17 September. “Our goal is to create a sound financial structure that continues to give us the flexibility to fully realize our strategic goals.”
Photo: Continental AG