Continental Q1 results start year on a high

ERJ staff report (LMH)

Hanover, Germany - Automotive supplier Continental is celebrating its most successful quarter since the end of 2007 with record highs for sales, EBIT and profit, the company said a 5 May report.

Sales in Q1 increased by 23 percent to more than euro 7.3 billion, while EBIT rose to euro 634 million with a sales margin of 8.6 percent. And net income rose by 68 percent year-on-year to euro 368 million although the German company noted that this was partially attributable to a one-off tax income of 68.2 million.

“With the good start to the new year, we have laid the foundation to comfortably achieve our targets for the year, as things look at present,” said Continental board chairman Dr. Elmar Degenhart.

He added, “We also assume that we will spend more on investments than the euro 1.5 billion currently planned, so that we can boost our dynamic and profitable growth even further. Nonetheless, we still want to generate at least euro 500 million free cash flow and reduce our net indebtedness to below euro 7 billion by the end of the year.”

Degenhart also pointed out that the company had increased its workforce in the first quarter of 2011, adding a further 6500 jobs to the some 14 000 Continental employees worldwide.

“Of those new jobs, a good 1600 were in Germany and nearly 1000 in China, where our workforce is growing as planned at an above-average rate,” he said, adding that the company hoped to create another several thousand jobs this year.

Degenhart noted that both the automotive group and the rubber group contributed to the firm's growth. The automotive business saw Q1 sales rise by 20 percent to about euro 4.5 billion, with an EBIT of euro 257 million, up from euro 182 million one year ago.

The rubber group posted sales of about euro 2.8 billion, representing an increase of 27 percent, Continental said in the report. The rubber group's reported EBIT rose from approximately euro 313 million one year ago to nearly euro 393 million in the first quarter of 2011.

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Press release from Continental