Continental’s first quarter sales fell 3.4% to EUR8bn but the supplier noted three fewer working days in the period than last year.
“In many countries, this had a negative impact on the development of passenger car production and tyre sales volumes. Furthermore, the unusually long period of cold weather affecting large parts of Northern Europe meant that drivers changed over to summer tyres later than usual,” the supplier said in a statement.
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Operating profit (EBIT) decreased year on year by 5% to EUR747m due partly to “persistently high” research and development expenses which climbed to 8.7% of sales in the automotive group. EBIT margin dipped to 9.3% from 9.5% in Q1 2012.
Adjusted consolidated operating EBIT fell 10.4% to EUR796m.
Net income fell 8.6% to EUR441m and earnings per share fell to EUR2.21 from EUR2.41.
Continental insisted it had “held its ground” in the first quarter and confirmed guidance for full year 2013.
“As anticipated, the first three months of this year were difficult. However, our business has already regained momentum. We’re confident that global production of passenger cars will continue to stabilise. We also expect the tyre replacement markets in Europe to pick up following the unusually long period of cold weather,” said CEO Elmar Degenhart.
The automotive group generated sales of EUR4.9bn after three months, with an adjusted margin of 7.2%, after 8.1% in the same period of the previous year. “Given the negative development of passenger car production in Europe and the persistently high expenses for research and development of new products, this represents a solid result,” said Degenhart.
“For the current year, we therefore still anticipate a rise in sales of around 5% to more than EUR34bn (US$44.49bn) and an adjusted EBIT margin of over 10%, particularly since we have already hit these targets in the first quarter despite all the adverse circumstances.”
In Q1, Continental reduced net indebtedness by about EUR1.2bn year on year to EUR5.6bn.
“In comparison to the end of last year, we posted a usual slight seasonal increase of EUR293m,” said CFO Wolfgang Schäfer.
