DGAP-News: Continental AG / Key word(s): Quarter Results Continental AG: Continental Raises Target for Adjusted EBIT Margin for 2013 to at Least 10.5% 07.11.2013 / 09:17 --------------------------------------------------------------------- * Sales grow to almost EUR25 billion after nine months * Adjusted EBIT amounts to approximately EUR2.8 billion; adjusted EBIT margin at 11.3% * Consolidated sales to rise to around EUR33.5 billion in 2013 Hanover, November 7, 2013. Based on a positive overall performance in the first nine months, Continental is raising its forecast for the adjusted EBIT margin from more than 10% to at least 10.5% for the current year. In addition to the good operating performance, the development of raw material prices was also a key factor, with prices for synthetic rubber in particular rising less steeply than expected. 'Despite the weaker European automotive market, we continued on our successful path. In the meantime, however, we are experiencing a stabilization of the business trend in Europe,' explained Chairman of the Executive Board Dr. Elmar Degenhart on Thursday at the presentation of the business figures for the first nine months. At the same time, he indicated that consolidated sales for the year as a whole would increase to around EUR33.5 billion. This increase would be slightly lower than the original assumptions, due to the unexpectedly high appreciation of the euro against many other currencies. In the first nine months of this year, consolidated sales of the international automotive supplier, tire manufacturer and industry partner rose by 1.2% year-on-year to approximately EUR25 billion. The operating result (EBIT) increased by 4.0% year-on-year to more than EUR2.5 billion as at September 30. This corresponds to a margin of 10.1% after 9.8% in the previous year. The adjusted operating result (adjusted EBIT) increased by 3.1% in the first three quarters as compared to the same period of the previous year and amounted to EUR2.8 billion. At 11.3%, the adjusted EBIT margin was higher than its level of 11.0% after the first nine months of 2012. Net income attributable to the shareholders of the parent increased by 8.5% in the first nine months of this year to nearly EUR1.6 billion. Earnings per share rose to EUR7.88 after EUR7.26 in the same period of the previous year. Continental reduced its net indebtedness by more than EUR1.2 billion year-on-year to just below EUR5.6 billion. The gearing ratio therefore improved to 61.6% after 87.1% in the previous year. 'In recent years, we have constantly worked to reduce our net indebtedness and thereby further improved our key financial figures,' summed up Wolfgang Schäfer, Chief Financial Officer of Continental AG. 'This consistent work is now bearing fruit, as reflected not least in the latest assessments by the rating agencies. We have thus set the course for favorable financing options in the long term,' he added. Continental's credit rating was classified as 'investment grade' by the rating agency Fitch in July, followed by Moody's in mid-September. In the first three quarters, Continental improved its free cash flow by EUR246 million to EUR414 million. This increase was boosted by the sale of the shares in S-Y Systems. 'For the year as a whole, we are anticipating a free cash flow of at least EUR800 million,' said Schäfer. At EUR416 million, interest expense was slightly lower than the previous year's figure of EUR432 million, although this year's figure is negatively impacted by interest expenses for the early redemption of the bonds issued three years ago. 'The redemption of the bonds we issued in 2010 and the issuance of three new bonds with considerably lower interest coupons in recent months will save us more than EUR100 million in interest expense each year starting from 2014,' explained Schäfer. In the first three quarters of this year, the Continental Corporation invested a total of approximately EUR1.3 billion in property, plant and equipment, and software. This resulted in a capital expenditure ratio after the first nine months of 5.4% compared with 5.1% in the same period of the previous year. Research and development expenses in the period from January to September amounted to just short of EUR1.5 billion, equivalent to 5.9% of sales as compared to the previous year's ratio of 5.5% of sales. 'We are continuing to invest heavily in the future potential of our company. This is confirmed by our continued high rate of capital expenditure and the slight increase in expenses for research and development,' emphasized Degenhart. As of the end of the third quarter, Continental had 177,387 employees, corresponding to a rise of more than 7,700 people in comparison to the end of 2012. This increase is mainly attributable to product launches in the Automotive Group and expansion of capacity in the Rubber Group. After the first nine months, the Automotive Group generated a slight year-on-year rise in sales to EUR15 billion. The adjusted margin of 7.9% matched exactly the previous year's level. The Rubber Group also generated a slight increase in sales to more than EUR9.9 billion in the first three quarters, and its adjusted margin of 17.3% was up on the previous year's level of 16.2%. - With sales of EUR32.7 billion in 2012, Continental is among the leading automotive suppliers worldwide. As a provider of brake systems, systems and components for powertrains and chassis, instrumentation, infotainment solutions, vehicle electronics, tires and technical elastomers, Continental contributes to enhanced driving safety and global climate protection. Continental is also an expert partner in networked automobile communication. Continental currently has more than 177,000 employees in 46 countries. - Contact for journalists Hannes Boekhoff Vice President for Media Relations Continental AG Vahrenwalder Str. 9 30165 Hanover, Germany Tel.: 0049 511 938-1278 Fax: 0049 511 938-1016 E-mail: [email protected] Antje Lewe Spokeswoman, Business & Finance Continental AG Vahrenwalder Str. 9 30165 Hanover, Germany Tel.: 0049 511 938-1364 Fax: 0049 511 938-1016 E-mail: [email protected] - This press release is available in the following languages: Chinese, Czech, Dutch, English, French, German, Hungarian, Japanese, Korean, Portuguese (Brazil), Por-tuguese (Portugal), Romanian, Russian, Slovakian, Spanish - Links Overview of press releases: www.continental-media.com Online media database: www.continental-mediacenter.com Financial reports: www.continental-ir.com  End of Corporate News --------------------------------------------------------------------- 07.11.2013 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Continental AG Vahrenwalder Straße 9 30165 Hannover Germany Phone: +49 (0)511 938-1068 Fax: +49 (0)511 938-1080 E-mail: [email protected] Internet: www.conti.de ISIN: DE0005439004 WKN: 543900 Indices: DAX Listed: Regulierter Markt in Frankfurt (Prime Standard), Hamburg, Hannover, Stuttgart; Freiverkehr in Berlin, Düsseldorf, München; Terminbörse EUREX; Luxemburg, SIX End of News DGAP News-Service --------------------------------------------------------------------- 238465 07.11.2013