Conti rubber businesses miss first quarter estimates

Hanover, Germany – Continental AG has released preliminary first quarter figures, showing that the group's Tires and ContiTech business sectors both missed previously issued estimates.

In the Tires group sector, the preliminary figures show sales set to come in at €3.3 billion, down slightly from €3.4 billion, predicted by ‘analyst consensus’ in April last year.

Adjusted earnings (EBIT) margin, meanwhile, is expected to reach 11.7%, compared to the earlier consensus of 12.4%, added Continental's 16 April preliminary results announcement.

In this sector, Continental said volumes were slightly negative compared to the year before, due in part to fewer working days in March and the Easter break in Europe.

This, said the German group, led to a replacement business shift to April, which it said is already “considerably stronger.”

Foreign exchange also “continues to be a burden” for the sector, said Continental without providing further details.

In the ContiTech group sector, sales were pegged to come in around €1.6 billion, down from the earlier consensus of €1.7 billion.

Adjusted earnings margin is expected to be around 5.4%, compared to the consensus of 5.9%.

Continental said industry demand “continues to be very weak” for ContiTech.

However, improvements particularly in the 'original equipment solutions' area are expected to be realised in the second half of this year.

Despite the first quarter shortfalls, Continental said it sees “sufficient improvement potential in all group sectors and thus for the group as a whole.”

Therefore, the group confirmed the guidance for fiscal 2024 for the two rubber business – as published on 7 March.

Based on that, the Tires group sector is forecast to achieve sales of between €14.5 billion and €15.5 billion and an earnings margin of around 12% to 13%.

ContiTech is expected to report sales of between €6.8 and €7.2 billion, with a margin of around 6-7%.