DGAP-News: Continental Confirms Guidance for Year as a Whole Following Expected Difficult Start
(firmenpresse) - DGAP-News: Continental AG / Key word(s): Quarter Results
Continental Confirms Guidance for Year as a Whole Following Expected
Difficult Start
03.05.2013 / 08:32
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Press Release
Continental Confirms Guidance for Year as a Whole Following Expected
Difficult Start
- As anticipated, first quarter proved difficult
- Global passenger car production expected to stabilize
- Consolidated sales amount to over EUR8 billion after three months
- Adjusted EBIT totals approximately EUR800 million / margin of 10.0
percent
- Investments, particularly in future markets, rise to about EUR430
million
Hanover, May 3, 2013. In spite of the difficult market development in
Europe, international automotive supplier Continental held its ground in
the first quarter of 2013 and is confirming its guidance for 2013 as a
whole. '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 stabilize. We also
expect the tire replacement markets in Europe to pick up following the
unusually long period of cold weather,' said Continental CEO Dr. Elmar
Degenhart on Friday at the publication of the quarterly figures in Hanover.
'For the current year, we therefore still anticipate a rise in sales of
around 5 percent to more than EUR34 billion and an adjusted EBIT margin of
over 10 percent, particularly since we have already hit these targets in
the first quarter despite all the adverse circumstances.'
In the first three months, the Continental Corporation's sales amounted to
EUR8.0 billion. They were down 3.4 percent from the same quarter of the
previous year, which had recorded the highest sales in Continental's
history. Due to the leap year in 2012 and the early Easter holidays in
2013, the first quarter had three fewer working days than the same period
of the previous year. In many countries, this had a negative impact on the
development of passenger car production and tire sales volumes.
Furthermore, the unusually long period of cold weather affecting large
parts of Northern Europe meant that drivers changed over to summer tires
later than usual.
In the first three months, the operating result (EBIT) decreased
year-on-year by a slight EUR40 million, or 5 percent, to EUR747 million.
This was due partly to persistently high research and development expenses,
which climbed to 8.7 percent of sales in the Automotive Group. The EBIT
margin remained virtually stable at 9.3 percent, after 9.5 percent in the
same period of the previous year.
The adjusted consolidated operating result (adjusted EBIT) amounted to
EUR796 million, representing a decline of around EUR93 million or 10.4
percent, as against the first three months of the previous year. At 10
percent, the adjusted EBIT margin was still double-digit, after 10.7
percent in the very strong prior-year period. The figures for both the
previous year and the current year include the first-time adoption of the
accounting standard IAS 19 (revised 2011)*.
Net income attributable to the shareholders of the parent fell 8.6 percent
to EUR441 million in the first three months. Earnings per share thus
amounted to EUR2.21 in the first quarter after EUR2.41 in the previous
year.
After the first three months, Continental reduced its net indebtedness by
more than EUR1.2 billion year-on-year* to EUR5.6 billion. 'In comparison to
the end of last year, we posted a usual slight seasonal increase of EUR293
million,' explained Continental CFO Wolfgang Schäfer. The gearing ratio
stood at 64.2 percent after the first three months of 2013.
Schäfer indicated that net interest expense had deteriorated, as announced,
to minus EUR123 million: 'We had to adjust the fair value of our derivative
instruments, above all the respective carrying amounts for the early
redemption options for the bonds, in the first quarter of 2012, which
resulted in a positive effect. This no longer had any effect, however, in
the first three months of this year, and so there was a negative impact
year-on-year. This was not fully offset by the further reduction of
interest expenses. The latter fell by EUR33 million, or more than a fifth,
to EUR112 million. This was due to the significant reduction in net
indebtedness as against the same period of the previous year.
We are continuing to work on reducing our interest expenses and are
preparing to redeem one or more of the outstanding euro bonds before the
end of the current year.'
In the first three months of this year, the international automotive
supplier, tire manufacturer and industry partner invested EUR431 million.
This corresponds to a year-on-year increase of more than EUR40 million and
a capital expenditure ratio of 5.4 percent, after 4.7 percent the previous
year. 60 percent of the capital expenditure related to the Rubber Group,
particularly the expansion of capacity in North and South America and Asia.
At the end of the first quarter, the Continental Corporation had just under
173,000 employees, meaning that more than 3,200 jobs had been built up
since the end of 2012.
The Automotive Group generated sales of EUR4.9 billion after three months,
with an adjusted margin of 7.2 percent, after 8.1 percent 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.
The Rubber Group generated sales of EUR3.1 billion in the first quarter.
The adjusted margin improved to 15.4 percent, after 15.2 percent the
previous year. 'In the Rubber Group, the stable price/mix development on
the sales side helped us to keep the previous year's good margin level at a
high level and thereby compensate for the effects of declining sales
volumes on earnings. We are expecting volumes to develop positively in the
second half of the year. The delayed shift from winter to summer tires due
to the unusually long winter is, moreover, likely to be reflected
positively in the second quarter,' declared Degenhart.
*Background information on the first-time adoption of the accounting
standard IAS 19 (revised 2011):
The changes in accounting standard IAS 19 (revised 2011), Employee
Benefits, are being applied for the first time as at January 1, 2013. The
company has restated all figures for the comparative periods in line with
the amended requirements.
The expenses from interest cost on pension obligations and the return on
plan assets are now no longer allocated to personnel expenses in the
relevant functional areas, but instead are reported separately under net
interest expense. This likewise applies to interest effects from other
long-term employee benefits.
The new regulations focus on abolishing the recognition of actuarial gains
and losses using the corridor method. The recognition of past service cost
over the vesting period is also no longer permitted. The reporting of
defined benefit costs and the measurement of net interest income and
expense has been changed as well.
With sales of EUR32.7 billion in 2012, Continental is among the leading
automotive suppliers worldwide. As a supplier of brake systems, systems and
components for powertrains and chassis, instrumentation, infotainment
solutions, vehicle electronics, tires and technical elastomers, Continental
contributes to enhanced driving safety and global climate protection.
Continental is also an expert partner in networked automobile
communication. Continental currently has approximately 173,000 employees in
46 countries.
Dr. Felix Gress Hannes Boekhoff
Senior Vice President for Vice President for
Corporate Communications&Public Media Relations
Affairs Continental AG
Continental AG Vahrenwalder Strasse 9
Vahrenwalder Strasse 9 30165 Hanover, Germany
30165 Hanover, Germany Tel: +49 (0) 511 938-1278
Tel: +49 (0) 511 938-1485 Fax: +49 (0) 511 938-1016
Fax: +49 (0) 511 938-1055 E-mail: corporate-media-
E-mail: prkonzern(at)conti.de relations(at)conti.de
Further information can be found at:
Online media database: www.mediacenter.continental-corporation.com
Financial reports: www.continental-ir.de
End of Corporate News
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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: ir(at)conti.de
Internet: www.conti.de
ISIN: DE0005439004
WKN: 543900
Indices: DAX
Listed: Regulierter Markt in Frankfurt (Prime Standard), Hamburg,
Hannover, Stuttgart; Freiverkehr in Berlin, Düsseldorf,
München; Terminbörse EUREX; Luxemburg, SIX
End of News DGAP News-Service
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