Continental Tire Sales Fell 13% in 2020
The leaders of Continental AG say the company “performed well in 2020 given the circumstances,” and those leaders are eyeing a significant market recovery in 2021.
Continental’s tire sales fell 13.4% in 2020, when compared to 2019 figures — not quite 10.2 billion euros compared to 11.6 billion euros. Tire sales in the fourth quarter slipped by about a half of a percent after a strong recovery in the third quarter that matched sales from the first half of 2019.
Continental sold nearly 130 million car and truck tires worldwide in 2020, and the tiremaker sees a path forward with systems and technology for tire monitoring.
Company wide, in 2020 Continental recorded sales of 37.7 billion euros, down from almost 44.5 billion euros in 2019. For the year Continental recorded a loss of 961.9 million euros, which is an improvement of the 1.2 billion euros loss from the year prior.
“The fourth quarter has shown that we have passed the low point. The economic environment is gaining momentum,” said Continental Chief Financial Officer Wolfgang Schäfer.
“The effects of the ongoing coronavirus pandemic remain a source of uncertainty too. All in all, 2021 will therefore remain challenging. We nevertheless anticipate that the market will recover significantly compared to 2020.”
Continental expects a “substantial increase” in the production of passenger cars and light commercial vehicles in 2021 by an estimated 9% to 12% compared to the previous year. But Schäfer does not expect the record level of global automobile production from 2017 to be reached again before 2025.
CEO Nikolai Setzer said, “As global vehicle production increases, our sales will grow again too. We are targeting organic growth at the group level of around 5 to 8% per year on average over the medium term. Our goal for the adjusted EBIT margin is between about 8 and 11%, and for the return on capital employed at around 15 to 20%.
“Continental sets itself apart from the others in the mobility market. We have a success-driven global team, a pioneering technology portfolio and extensive software expertise. These strengths will make us one of the winners of the transformation underway in the mobility industry.”
Continental anticipates consolidated sales of around 40.5 billion euros to 42.5 billion euros in 2021. Sales in the Rubber Technologies group, which includes both its tire business and ContiTech, are forecast in the range of 16.5 billion euros to 17.5 billion euros.
Setzer said, “In operational terms, we performed well in 2020 given the circumstances, achieving solid, positive free cash flow in particular. The bottom line is, however, that we suffered extensive setbacks with regard to both sales and earnings. We nevertheless finished the past year stronger overall than we had feared in the spring.”