German automotive parts supplier Continental is anticipating modest profit growth in the current year due to the automotive industry’s slowdown.
The move comes even as the firm proceeds with the separation of its car parts division.
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Looking ahead to fiscal 2025, Continental forecasts a change in global production of passenger cars and light commercial vehicles ranging from a decrease of 1% to an increase of 1%.
The company projects consolidated sales of approximately €38bn ($40bn) to €41bn and an adjusted EBIT margin of about 6.5% to 7.5%.
Sales in the automotive group sector are expected to be around €18bn to €20bn, with an adjusted EBIT margin of approximately 2.5% to 4%.
The Tires group sector is anticipated to generate sales of about €13.5bn to €14.5bn and an adjusted EBIT margin of around 13.3% to 14.3%.
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By GlobalDataContinental has reported slight decline in consolidated sales to €39.7bn for full year 2024, a 4.1% decrease from the previous year’s €41.4bn.
However, the adjusted EBIT has risen by 6.6% to €2.7bn compared to the same period a year ago.
Net income attributable to the shareholders of the parent remained stable at €1.2bn, marking a 1% increase.
Continental CEO Nikolai Setzer said: “Weak economic development, particularly in Europe, coupled with a decline in automotive production caused major headwinds last year. Our priority is to create value.
“By rigorously implementing this strategy, we further improved our earnings in this challenging environment and achieved our annual targets for the Continental Group.
“Following the Executive Board’s decision in favor of a spin-off, we have also initiated the realignment of the company. Our group sectors have each been set up with clear structures and are leading players in their product segments and markets. They have matured and are now ready for greater independence.”
The company’s Automotive group sector experienced a sales decline of 4.3% to €19.4bn, primarily due to shrinking markets.
Sales of the Tires group sector also declined to €13.86bn in 2024, from €13.95bn in 2023.
Last month, Continental’s Automotive subsidiary announced plans to reduce additional 3,000 jobs in its research and development (R&D) segment by the end of next year.
The company plans to optimise its global R&D network and improve efficiency through this decision, which follows a previous announced reduction of 7,000 positions.
