Continental increased its earnings in the third quarter of 2024 on the back of measures taken to improve earnings, particularly focused on cost reduction.
As in the second quarter of 2024, Continental’s tyres group sector posted a good adjusted-EBIT on the back of improved business in Europe. Earnings in ContiTech, by contrast, were dented by continued weak industrial development in Europe and North America.
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Continental does not expect the industrial business to recover in the fourth quarter and is therefore adjusting its sales and earnings outlook for ContiTech and ‘as a result, sales expectations have also been lowered for the Continental Group as a whole’.
In the third quarter of 2024, Continental achieved consolidated sales of €9.8 billion (Q3 2023: €10.2 billion, -4.0 percent). Its adjusted operating result increased to €873 million (Q3 2023: €642 million, +36.0 percent), corresponding to an adjusted EBIT margin of 8.9 percent (Q3 2023: 6.3 percent).
Net income in the third quarter amounted to €486 million (Q3 2023: €299 million, +62.8 percent).
Commenting on the results, Conti CFO Olaf Schick said: “Faced with weak automotive production, we achieved this by reducing costs and adjusting prices.”
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By GlobalDataSpin-off ‘on track’
Continental is considering a spin-off of its automotive division, while the tyres and ContiTech divisions would remain under the Continental umbrella. Whether the automotive division will actually be spun off will be decided after an in-depth review of the project in the fourth quarter of 2024. With currently around 100,000 employees and a turnover in the fiscal year 2023 of around 20 billion euros, Conti’s automotive division, which has been bundled into a legal entity since 2022, will focus on the future topics of the automotive industry. “In addition to a strong market position with innovative braking and comfort systems, sensor solutions and displays, the division has made great strides in the development of software, architecture platforms and assistance systems for the rapidly growing future market of software-defined and autonomous vehicles,” Continental said earlier this year.
In relation to the latest financials and spin-off prospects, Continental CEO Nikolai Setzer said: “We continue to drive Continental’s development – strategically and operationally, step by step. We are making our group sectors more agile and bringing them closer to the markets. Bolstered by the maturity they have built up over the years, they are now ready for greater independence.
“Automotive is on track to fulfill the requirements for a spin-off by the end of 2025. This spin-off is still being evaluated. Furthermore, the measures we have defined and implemented to improve earnings are having the desired effect. In the third quarter, for example, we increased our earnings both year-on-year and compared with the first two quarters of 2024. This was largely driven by price adjustments and disciplined cost management.”
