02.08.2018
Continental AG DE0005439004
DGAP-News: Continental Accelerates its Growth
DGAP-News: Continental AG / Key word(s): Half Year Results
Continental Accelerates its Growth
02.08.2018 / 08:30
The issuer is solely responsible for the content of this announcement.
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- Organic sales growth of 5.4 percent to EUR22.4 billion after first six
months
- Order intake still at record level: Automotive exceeds EUR20 billion,
electric mobility business receives orders for more than EUR1 billion
- Adjusted EBIT of EUR2.2 billion, adjusted EBIT margin at 10 percent
- Net income up 4.3 percent to EUR1.6 billion
Hanover, August 2, 2018. The technology company Continental released its
2018 half-year results today in Hanover. The Dax-listed company accelerated
its growth in the second quarter of 2018 and once again grew faster than its
relevant markets. After six months, organic sales growth amounted to 5.4
percent, with all five divisions making a contribution. In the same period,
the Automotive business was up 6.6 percent in organic terms. It was thus
able to grow nearly 5 percentage points faster than the global production of
passenger cars and light commercial vehicles, which was up by about 2
percent. For the current year, the company still expects the global
production of passenger cars and light commercial vehicles to rise by more
than 1 percent.
In the first half of the year, Continental upped its sales to EUR22.4
billion and posted an adjusted operating result of EUR2.2 billion. This
corresponds to an adjusted EBIT margin of 10 percent.
"Our technological strength underpins our rapid and profitable growth. It
makes mobility around the world safe, clean and intelligent. It is
pioneering for the mobility of the future and vital for our long-term
success in an environment characterized by change and uncertainty," said
Continental CEO Dr. Elmar Degenhart on Thursday while presenting the
business figures for the first half of 2018.
He added: "Our profitable growth in the second quarter is further proof of
our strength. In addition, the high order intake in the field of electric
mobility is also quite gratifying and demonstrates that our product
portfolio is fit for the future." In the first half of the year, more than
EUR1 billion in orders were received for products and systems for hybrid and
electric cars. At over EUR20 billion, order intake continues to be at a
record level in the entire automotive sector after six months.
Sales growth was up in particular in the Powertrain division in the second
quarter. "Our future alignment is paving the way for Powertrain as well as
the other divisions to continue to outpace our relevant markets in the
future as well, as part of our values alliance for top value creation," he
said, making reference to the recently announced realignment of the company.
Degenhart was also pleased with the quarterly results of the Tire division,
which had been impacted by exchange-rate effects in the first three months.
Its adjusted EBIT rose from 15.2 percent in the first quarter to 17.8
percent in the second quarter. "Our tire business again was up in the second
quarter, maintaining its profitable position on the global market," said
Degenhart, summing up the positive development.
Solid growth in all divisions; further substantial investments in the
mobility of tomorrow
"As expected, all five divisions posted good organic growth. In light of
this, we are satisfied with our sales development in the first half of the
year," said CFO Wolfgang Schaefer, commenting on the past half-year. With
regards to the results, he added: "The industry is currently undergoing
radical technological change. It is all about automation, connectivity and
electrification. Looking at our results, the trend reflects the substantial
investments we have made in the development of these future technologies.
The increase in order intake has in recent years also resulted in start-up
costs." In the last half-year, the technology company spent EUR2.9 billion
on investments as well as on research and development. According to
Schaefer, there are only a few companies worldwide that are pushing
developments in the field of mobility to this extent.
Looking ahead to the remainder of the year, Schaefer pointed out that the
third quarter is traditionally impacted by seasonal effects: "Carmakers
close down plants for vacation in the third quarter. Furthermore, next
quarter will probably be negatively impacted by the new test procedure
WLTP." At present, Continental is expecting a strong quarter at the end of
the year, and is therefore confirming its outlook for the full business
year.
After the first six months, net income attributable to the shareholders of
the parent rose by 4.3 percent to around EUR1.6 billion, after EUR1.5
billion in the same period of the previous year.
Free cash flow in the first half of 2018 amounted to EUR122 million, after
EUR292 million in the first half of last year. This was mainly due to the
increase in working capital as a result of the solid growth. Free cash flow
before acquisitions amounted to EUR296 million after six months.
The Automotive Group increased its sales by 2.8 percent in the past
half-year. Organic growth was 6.6 percent. Sales amounted to EUR13.8 billion
in this period. The adjusted EBIT margin was 8.1 percent.
In the first six months, the Rubber Group achieved sales of EUR8.6 billion,
down slightly year on year. There was organic growth of 3.6 percent in the
first half of 2018.
In the first half of the year, Continental invested EUR1.2 billion in
property, plant and equipment, and software. This corresponds to a capital
expenditure ratio of 5.2 percent (previous year: 5.3 percent). The
technology company's net expenditure for research and development was EUR1.7
billion, which equates to 7.7 percent of consolidated sales. In the same
period of the previous year, the ratio was 7.2 percent.
As at June 30, 2018, net indebtedness was just short of EUR2.9 billion, up
EUR811 million from the end of 2017. The increase in net indebtedness in the
period under review is due mainly to the payment of the dividend for the
last fiscal year totaling EUR900 million.
The gearing ratio, which is an indicator of indebtedness, rose accordingly
from 12.6 percent at the end of 2017 to 16.8 percent as at the reporting
date. Continental had liquidity reserves totaling 5.8 billion as at the
reporting date.
At the end of the first half of 2018, Continental had more than 243,000
employees. This equates to about 8,000 additional employees compared to the
end of the year. Nearly two-thirds of the growth was due to staff increases
in the global R&D team and higher production volumes in the Automotive
Group. About one-third of the additional staff was hired in the Rubber
Group. These employees are required primarily for the expanded production
operations and the growing distribution network.
Continental develops pioneering technologies and services for sustainable
and connected mobility of people and their goods. Founded in 1871, the
technology company offers safe, efficient, intelligent, and affordable
solutions for vehicles, machines, traffic, and transportation. In 2017,
Continental generated sales of EUR44 billion and currently employs more than
243,000 people in 60 countries.
Contact for journalists
Henry Schniewind
Spokesman, Business & Finance
Continental AG
Phone: +49 511 938-1278
Cell: +49 151 688 64 262
E-mail: [email protected]
Vincent Charles
Head of Media Relations
Continental AG
Phone: +49 511 938-1364
Cell: +49 173 314 50 96
E-mail: [email protected]
Links
Press portal:
www.continental-press.com
Video portal:
http://videoportal.continental-corporation.com
Media database:
http://continental.com/media-center
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02.08.2018 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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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: Regulated Market in Frankfurt (Prime Standard), Hamburg,
Hanover, Stuttgart; Regulated Unofficial Market in Berlin,
Dusseldorf, Munich, Tradegate Exchange; Luxembourg Stock
Exchange, SIX
End of News DGAP News Service
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710341 02.08.2018
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