Continental in Fiscal 2017: Sales, Income and Investments Are Up
Continental AG posted net income of 3 billion euros on net sales of 44 billion euros for its fiscal 2017 ended Dec. 31, 2017. That compares to income of 2.8 billion euros on sales of 40.5 billion euros for fiscal 2016.
Based on the average exchange rate for 2017, Continental recorded net income of nearly $3.4 billion on net sales of $49.6 billion for fiscal 2017. The company's income-to-sales ratio was 6.8%.
Continental's Automotive Group sales totaled 26.5 billion euros ($29.9 billion), while the Rubber Group's sales were 17.5 billion euros ($19.7 billion).
In 2017, Continental invested roughly 2.9 billion euros in property, plant and equipment, and software. This drove the capital expenditure ratio up to 6.5% compared to 6.4% the previous year. Research and development expenses rose by 10% year-on-year to 3.1 billion euros, corresponding to 7.1% of sales (compared to 6.9% in 2016).
"We are continuing to invest heavily in the technologies of tomorrow, and this strategy is paying off," says Dr. Elmar Degenhart, chairman of the board. "Take for example our incoming orders in the Automotive Group: We achieved a new record high of nearly 40 billion euros in 2017.
"Our innovative technologies and the intelligent use of software, electronics and sensor technology are allowing us to make automated and autonomous driving, along with connectivity and electrification, a reality. We are also developing new business areas and customer groups in innovative mobility services."
Degenhart said he expects this profitable growth to continue in 2018.
"The start we have made to fiscal 2018 has confirmed our expectations. We are therefore reaffirming our outlook from early January. We intend to continue our successful course of growth and profitability.
"For the current year, we are still anticipating a significant rise in sales of just under 7% to approximately 47 billion euros before exchange-rate effects, with an adjusted EBIT margin of around 10.5%. This is based on growth in the global production of passenger cars and light commercial vehicles of more than 1% to 96.5 million vehicles.”
Continental's executive board proposed a yearly dividend increase of 25 cents to 4.50 euros per share. If approved, the dividend will represent the sixth increase in a row.