Conti CEO: Restructuring moves driven by 'automotive transformation’

Hanover, Germany – Continental AG’s moves to explore options for a major restructuring of the group are being driven by transformation within the automotive industry, CEO Dr Elmar Degenhart has stated.

Technology changes required flexibility and agility and that was why the company wanted to gear itself toward rapid growth, the Conti boss explained in a 2017 annual results statement 8 March.

“We are currently assessing our options. A plan is yet to be finalised,” added Degenhart – in comments indicating that major change do, indeed, lie ahead for the Hanover-based group.

Th CEO pointed to the DAX-listed group’s adaptability: “Continental has been undergoing a process of gradual transformation for nearly 150 years.

“In the past 20 years alone, Continental has transformed from a purely tire manufacturing business and industrial partner into a global technology company.”

Degenhart's comments accompanied Continental’s 2017 results announcement for 2017, showing year-on-year earnings (EBIT) up 11.4% at €4.6 billion on 8.5% higher sales at €44 billion.

The German technology and automotive supplier said its Rubber Group registered 8.6% higher sales for the year at €17.5 billion.

However, segment’s earnings (EBITDA) at the Rubber Group – comprising its Tire division and ContiTech – fell 1.6% to €3.5 billion.

Commenting on company results, Continental CFO Wolfgan Schaefer said exchange rate effects and higher costs of materials affected the margins in 2017.

Assuming the current exchange rates represent the average for the current year, Conti expects negative exchange rate effects of more than €1 billion in 2018, said Schaefer.

According to Schaefer, the German corporation anticipates additional negative effects of €50 million from price increases for natural and synthetic rubber this year.