Continental Previews 'Solid' 1Q Results
Continental AG will release its complete first-quarter results on Thursday, May 9. However, CEO Elmar Degenhart presented an early look at the numbers at the company’s annual shareholders’ meeting, held recently in Hanover, Germany. And he was satisfied with what he called “solid” results.
“Global car production was down substantially at the beginning of the year, as expected,” he said. “That is why our solid results are all the more gratifying, thanks to our strong market position on the mobility markets worldwide. Our increased cost discipline also contributed to this achievement.”
Continental posted net sales of just under 11.1 billion euros for the first quarter ended March 31, 2019. That number was on par with sales from the first quarter of fiscal 2018. Adjusted earnings before interest and taxes (EBIT) were 884 million euros, while the adjusted EBIT margin was 8.1%.
In the first three months of 2019, global automobile production was down by more than 6% year-on-year, according to preliminary figures. In contrast, Continental’s organic growth -- before changes in the scope of consolidation and exchange-rate effects -- was down by only 2%.
Continental said it continues to expect a market upturn in the second half of the year.
In a press release, Continental talked about organization realignment, particularly in relation to its powertrain business, which the company is expected to address on May 9.
“In the current fiscal year, Continental is laying further important groundwork for its organizational realignment announced last July,” said the release. “A crucial part of this is the transformation of its powertrain business into an independent group of legal entities, which Continental completed on schedule on January 1, 2019.
“Since then, Continental has continued preparing for the possible partial IPO of its powertrain business, which in the future will be called Vitesco Technologies. It is expected that the necessary conditions will be fulfilled toward the end of the second half of the year so that additional details can be provided to the capital markets. Once further technical and regulatory requirements have been completed, the company will be in a position to finalize the partial IPO. Depending on the market situation, this is expected from 2020.”
In the first quarter of fiscal 2018, Continental recorded net income of 737.6 million euros. Find out how the company fared in the first quarter of 2019 on May 9.