Hanover, Germany – Continental AG has increased its sales projections for the year 2017 following a strong performance in the first quarter, ended 31 March.
Organic sales over the three months grew 9.5% year-on-year to €11 billion, largely due to the contributions made by the company’s automotive divisions, the German group said in a 9 May release.
Operating earnings (EBIT) increased 9.1% percent year-on-year to over €1.1 billion. Adjusted operating result (adjusted EBIT) climbed 7.0% to just under €1.2 billion.
“We are raising our sales projection for the current year by €500 million to more than €43.5 billion,” said chairman Elmar Degenhart, adding that the company expects to “comfortably achieve” an adjusted EBIT margin of 10.5%.
In the Rubber Group, which combines Conti’s tire business division and ContiTech – rubber and plastics engineering company – sales climbed 10.6% year-on-year to €4.3 billion in the first quarter of 2017.
“Strong demand for passenger car and truck tires and for products from ContiTech’s Mobile Fluid Systems and Benecke Kaliko Group business units resulted in encouraging growth in our Rubber Group,” said CFO Wolfgang Schaefer.
Negative effects from rising raw material prices increased to €100 million. Conti added, however, that this was as expected.
And, while forecasting higher raw material costs in the second quarter, Schaefer said the impact of this trend on earnings would ease later this year due to previous price adjustments.
Elsewhere, the company said digitalisation, electrification and automation were the main targets of radical change within the industry.
In this area, said Schaefer, Conti can act from “a position of strength.”