Hanover, Germany – Continental AG’s Rubber Technologies business has reported double-digit declines in 2020 sales and earnings (EBITDA), but is poised for growth in 2021, the German group has announced.
The division – which includes Tires and ContiTech segments – posted a 21% decline in earnings to just under €2.5 billion, on 13% lower sales of €15.6 billion for the full year.
Adjusted EBIT margin fell from 12.0% in 2019 to 11.3% last year, Continental stated in a 9 March preliminary financial report.
Tire sales for the full year declined 13.6% to €10.1 billion from €11.7 billion reported in 2019. Segment earnings dropped 25% to €1.8 billion during 2020
Industrial components maker ContiTech also saw a 6% decline in earnings to €628 million, on 14% lower sales of €5.57 billion.
For 2021, Conti said it expected that global light vehicle production would increase by 9% to 12% compared to last year, taking into account the “currently foreseeable effects” of Covid-19 and ongoing supply chain constraints.
The German group expects sales in the rubber business area to come in at around €16.5 to €17.5 billion and the adjusted EBIT margin to be in the range of approximately 11.5% to 12.5% this year.
The adjusted EBIT margin range, Continental noted, anticipates higher year-on-year raw material costs of around €200 million in 2021, which it said will predominately affect the tires business.