In the second quarter of 2012, Continental Corp. says it nearly matched the level of the strong first quarter and sees itself on track for another record year.
“Based on the successful first half of the year, we are confident that we will comfortably achieve the goals we have set for the year,” said Continental Executive Board Chairman Dr. Elmar Degenhart.
“Nonetheless, we must continue to keep a close eye on the uncertainties of the global sales markets, the difficult economic situation in some European Union member states and the slowdown in global economic growth.”
“As a result of the good development in the first half of the year, we now anticipate an increase in consolidated sales of more than 7% to over 32.5 billion Euros [$40.4 billion]. In addition, we assume that the adjusted earnings before interest and taxes (EBIT) margin will even top the very good level achieved in 2011.”
Degenhart says the reason for the reassessment is the slightly lower negative impact from raw material costs, which had recently increased heavily. Despite record investments of some 2 billion Euros, the goal for the free cash flow remains unchanged at more than 600 million Euros.
In the first six months of 2012, Continental increased its sales 10.9% year-on-year to 16.5 billion Euros. At the same time, EBIT rose almost 26% to 1.6 billion Euros, with an EBIT margin of 9.7%, against 8.6% a year ago. The corporation’s adjusted EBIT, adjusted particularly for acquisition-related amortization and special effects, rose to more than 1.8 billion Euros, up from just under 1.5 billion Euros. The adjusted EBIT margin is 11.1% after 10.0% a year ago.
In the first half of 2012, the net income attributable to the shareholders of the parent rose nearly 47% year-on-year to 1 billion Euros, corresponding to earnings per share of 5.02 Euros after 3.42 Euros one year ago.
Despite a dividend payment volume of 300 million Euros and substantially higher investments, the Continental Corp. reduced its net indebtedness year-on-year by 238 million Euros. It was slightly higher than at the end of 2011, rising by just under 104 million Euros.
“Compared with June 30, 2011, we improved our equity by almost 1.5 billion Euros to a good 8.3 billion Euros and upped the equity ratio to more than 30% once again,” explained CFO Wolfgang Schäfer.
“This was not the least reason that our gearing ratio improved to nearly 83% despite the slight increase in net indebtedness as a result of seasonal factors. The ratio was still 104% a year ago and 85% at the end of the first quarter. We also improved our free cash flow by nearly 90 million Euros to 126 million Euros in the first half of the year compared to the first six months of 2011.”
The international automotive supplier spent almost €830 million on investments in the first half of 2012, which is €210 million more than in the same period of last year.
“We are thus fulfilling our promise to reduce our indebtedness while at the same time paying dividends once again and investing substantially in our profitable growth,” said Schäfer.
To see the entire Continental financial report, click here.