Continental sets fiscal records; sales up 7.3%
Continental AG, the German parent company of Continental Tire the Americas LLC, reported net income of more than 1.8 billion euros on net sales of 32.7 billion euros for its fiscal year ended Dec. 31, 2012. Both are records.
That compares to income of 1.2 billion euros on sales of 30.5 billion euros for fiscal 2011.
Based on the exchange rate on Dec. 31, 2012, Continental recorded net income of $2.5 billion on net sales of $43.3 billion for fiscal 2012. The company's income-to-sales ratio was 6%.
The company's operating income was 3.1 billion euros, up 18% from the previous year. Net sales were up 7.3% in 2012 versus 2011.
Continental says it achieved its goals for main key financial performance indicators ahead of schedule in 2012. The company is aiming to boost sales 5% to more than 34 billion euros in 2013.
“In 2012, Continental increased profits to just short of 1.9 billion euros, topping the previous year's level by more than 50%. At 9.42 euros, we have very nearly double-digit earnings per share. What is more, we cut our net indebtedness by close to 1.5 billion euros, bringing it down to a reasonable level. At the same time, we have utilized our greater flexibility and given our future growth a good shot in the arm with higher spending on investments and R&D,” says Dr. Elmar Degenhart, Continental’s CEO.
At more than 1.7 billion euros, expenses for research and development were roughly 10% higher than the previous year. “In the Automotive Group alone, we spent nearly 8% of sales on research and development, allowing us to top the industry average. In 2013, we intend to maintain this level, which is essential if we are to bolster our future viability,” said Degenhart. “In 2012 we also invested more than 2 billion euros in property, plant and equipment and software, thereby programming our company for further growth. The capital expenditure ratio was a hefty 6.2%.”
The company said interest expenses fell by almost 100 million euros to around 564 million euros in 2012. “Overall, we want to use the strong financial basis achieved early in 2012 to expand our position as one of the leading automotive suppliers, tire manufacturers and industry partners. With a record-setting 25 billion euros in incoming customer orders in 2012, the Automotive Group provided clear evidence of the growing trust customers place in us,” said Degenhart.
The Continental board will propose a dividend of 2.25 euros per share at the annual shareholders meeting in Hanover, Germany, on May 15, 2013.
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