ERJ staff report (TP)
Hanover, Germany – The Continental Corporation said it posted a strong start to the year, significantly increasing its profits.
In the first quarter of 2014, net income attributable to the shareholders of the parent grew by 33.3 percent to €588m. Earnings per share therefore rose to €2.94 per share after €2.21 in the same period of the previous year.
"In the opening months of the year, we once again demonstrated that we are very capable of combining our growth with value creation," said Continental's CEO Dr. Elmar Degenhart. "We intend to continue along our current path in the coming months, too."
At the presentation of key data during the Annual Shareholders’ Meeting on 25 April, Conti had already raised its outlook of comfortably achieving an adjusted EBIT margin of more than 10.0 percent in the current year to more than 10.5 percent. At the same time, the sales target of approximately €35bn for fiscal 2014 was confirmed.
In the first three months of this year, consolidated sales rose by 4.4 percent year-on-year to €8.4bn. Adjusted for effects relating to the scope of consolidation and to exchange rates, which had a significant negative impact again in the first quarter, sales increased by as much as 8.3 percent.
EBIT rose by almost 21 percent year-on-year to €903m as at 31 March. This corresponds to a margin of 10.8 percent after 9.3 percent in the previous year. Adjusted EBIT for the first quarter climbed by 19.7 percent year-on-year to €953m in the first quarter. The adjusted EBIT margin was 11.4 percent and was thus above the 10.0 percent mark after the first three months of 2013.
Conti reduced its net indebtedness to €4.2bn as at the end of the first quarter. This is €47m lower than at the end of 2013 and almost €1.4bn lower than the comparative figure from the previous year. The gearing ratio thus improved to 43.2 percent at the end of March 2014.
As at March 31, 2014, Conti had liquidity reserves of just under €6bn, consisting of cash and cash equivalents of around €2bn and committed, unutilised credit lines of almost €4bn.
In the first three months, Continental invested a total of €341m in property, plant and equipment, and software. The capital expenditure ratio thus amounted to 4.1 percent after 5.4 percent in the same period of the previous year. Continental increased its research and development expenses by 8.9 percent in comparison to the first quarter of 2013 to €544m. This corresponds to a ratio of 6.5 percent of sales after 6.2 percent in the previous year.
As at the end of the first quarter, Continental had 182,138 employees, representing an increase of more than 4,300 employees in comparison to the end of 2013. This was due primarily to production ramp-ups, the expansion of research and development in the Automotive Group, and additional production capacity in the Rubber Group.
The Automotive Group generated sales of €5.1bn in the first three months of this year. At 8.2 percent, the adjusted EBIT margin was higher than the previous year's level of 7.2 percent.
The Rubber Group also generated a slight increase in sales to €3.3bbn in the first quarter and its adjusted EBIT margin of 17.2 percent was up on the previous year's level of 15.2 percent.
This is an external link and should open in a new window. If the window does not appear, please check your pop-up blocking software. ERJ is not responsible for the content of external sites.
Press release from Continental