Continental says its overall order intake for Q1 hit a record level (with the order intake on automotive business at EUR11bn – also a record).
In the first quarter ended March 31, the company posted an adjusted operating result of EUR1.1bn for a margin of 9.7%. Net income in the quarter was little changed on last year at EUR738m.
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The company said it is achieving growth in spite of a 'sluggish market environment. "Thanks to our operational strength, we again grew strongly worldwide in the first quarter – much faster than our relevant markets, which declined in the same period. We will continue our growth momentum and are still aiming for sales of approximately €47 billion before exchange-rate effects. The adjusted EBIT margin is set to exceed 10 percent," said Continental CEO Dr Elmar Degenhart.
Asked about growth, Degenhart said: "Continental has a pioneering technology portfolio. We are one of the few system suppliers to offer all relevant technologies for the mobility of the future. We thus make safer, cleaner and more efficient mobility possible for people and their goods, now and in the future."
Continental said exchange rate effects created headwind in the first three months. Despite these negative effects amounting to €546 million, sales were on a par with the same period of the previous year at EUR11.0 billion.
"Our first quarter was weighed down by strong exchange-rate effects in smaller markets in which our local production footprint is very limited. We saw extreme fluctuations in exchange rates between currencies in these countries, coupled with the strong appreciation of the euro. This unusual situation weakened our natural hedge against exchange-rate effects. However, it is still the case that our EBIT margin is largely hedged against exchange-rate effects at the corporate level, as we produce and sell locally in many of our markets," said Conti CFO Wolfgang Schäfer.
Sales for the whole business were up by 0.1% year-on-year to EUR11bn in Q1. Adjusted for changes in the scope of consolidation and exchange rates, sales growth came to 4.3%. The net income attributable to the shareholders of the parent of EUR738m was nearly on par with the level of the previous year (EUR750m).
Adjusted EBIT fell by 9% year-on-year to EUR1.1bn. This corresponds to an adjusted EBIT margin of 9.7% after 10.6% in the first quarter of the previous year.
The Automotive Group increased its sales organically by 5.5% in the first quarter. Sales amounted to EUR6.8bn.
"Our automotive business has performed very well. Organic growth of 5.5 percent in a declining market environment is an excellent achievement," said Schäfer, assessing the results of Continental's three automotive divisions. Referring to the difficult environment and the decline in the production of passenger cars and light commercial vehicles by a total of 1 percent globally, he added: "We grew nearly 7 percentage points faster than the market with our automotive business."
In the first three months, the Rubber Group generated sales of EUR4.2bn (previous year: €4.3 billion). The sales of these two divisions were thus approximately on par with the previous year. Adjusted for exchange-rate effects and changes in the scope of consolidation, the growth amounted to 2.3%, Continental said.
