Suppliers

Continental’s 2018 Earnings Dip Slightly on Higher Sales

Posted on March 11, 2019

Continental AG posted net income of 2.9 billion euros on net sales of 44.4 billion euros for its fiscal year ended Dec. 31, 2018. That compares to income of 3 billion euros on sales of 44 billion euros for fiscal 2017.

Based on the exchange rate on Dec. 31, 2018, Continental recorded net income of $3.3 billion on net sales of $50.4 billion for fiscal 2018. The company's income-to-sales ratio was 6.5%.

Continental's Automotive Group sales totaled 26.8 billion euros ($30.8 billion), while the Rubber Group's sales were 17.6 billion euros ($20.2 billion).

The company met its annual targets, as evidenced by its EBIT (earnings before interest and taxes) margin of 9.3%.

“Leaders deliver good results, even under bad circumstances. Over the past year, we have again demonstrated our excellent performance despite the weak markets. We are continuing to grow faster than our relevant industries and markets,” said Dr. Elmar Degenhart, Continental’s CEO, at the company’s earnings presentation to investors at its Hanover, Germany, headquarters. He attributed the company's 2018 earnings performance to its technological capabilities.

“Autonomous driving, electric mobility and connectivity: We are the architects of an ecosystem of safe, clean and intelligent mobility. When people talk about the ‘mobility of the future,’ they mean Continental. We are supplying what others are still testing. Our solutions, components, and systems are already generating enhanced safety, efficiency and comfort in four out of five vehicles worldwide,” said Degenhart.

“Grip is one of our traditional key fields of expertise in the tire business. It is part of our corporate culture, and we transfer it even to our connectivity technology, providing dependable solutions to offer secure contact, from the road to the cloud, all from a single source like no other company.”

Continental sold 155 million passenger car and truck tires last year, a record level. The company said the trend was driven by a new record for sales of winter tires.

In fiscal 2018, Continental spent over 6.3 billion euros on projects including research and development as well as the expansion of production facilities and capacities.

“We are investing systematically, logically and substantially in the ecosystem for future mobility,” Wolfgang Schäfer, Continental’s CFO, stated in the company’s earnings announcement. “We’ve done our homework. Our balance sheet is strong. We have taken advantage of the upturn in recent years and systematically reduced our debt,” he said. The company said it is able to easily undertake acquisitions for up to 5 billion euros.

Continental said its technology portfolio once again helped it to grow at a faster rate than its markets in 2018. The company said its organic sales growth was 3%. “Our growth is testament to the confidence our existing and many new global customers have in our innovation capacity. In addition, our net income of 2.9 billion euros was almost at a record level. That is a solid result given the disappointing market development in the past year,” said Schäfer.

Continental said fiscal 2019 has gotten off to a subdued start, as expected, due to continuing market uncertainty. Continental is reaffirming its preliminary guidance from early January. Accordingly, the Hanover-based technology company expects sales of around 45 to 47 billion euros.

“The guidance for 2019 is based in part on the assumption that the global production volume of passenger cars and light commercial vehicles will be stable at 94 million. Production in the first half of the year is likely to be down on last year’s figure. In our eyes, risk factors include the unclear ramifications of economic development in China and the trade disputes between the U.S.A. and China and between the U.S.A. and Europe – and then there is also the unclear situation with Brexit,” Schäfer said.

In the current fiscal year, Continental said it will lay the important groundwork for the organizational realignment announced last July. A crucial part of this realignment is the potential partial IPO of the powertrain business, which, under the name “Vitesco Technologies,” will develop, sell and produce systems and solutions for conventional and electrified drives for automotive manufacturers worldwide.

Continental said it completed the transformation of its powertrain business into an independent group of legal entities in record time, and preparations for a potential partial IPO in the second half of 2019 are on schedule.

Continental's executive board proposed a yearly dividend increase from 4.50 euros to 4.75 euros per share. If approved, the dividend will represent the seventh increase in a row.

For more information, visit www.continental-corporation.com.

Related Topics: commercial tires, consumer tires, passenger tires

Comments ( 0 )
More Stories
News CEMB Buys M&B Engineering

CEMB S.p.A. will begin manufacturing tire changers following its acquisition of M&B Engineering SRL.

News Maxxis Will Open 4th U.S. Warehouse

Maxxis International-USA plans to open its fourth distribution center in the U.S. — northwest of Indianapolis, Ind.

News Andreoli Adds GM-VP Position Due to Growth

Andreoli & Associates Inc. has hired Steve Brouillard as general manager and vice president of business development.

Maxam says the new MS503 radial OTR program provides the industry with the best solution for severe applications requiring high traction.
News Maxam Introduces MS503 in 6 Sizes

The new MS503 from Maxam Tire North America Inc. is designed to excel in severe off-the-road tire applications requiring high traction.

News Goodyear Will Invest $180 Million in Fayetteville Plant

Goodyear Tire & Rubber Co. will upgrade its passenger and light truck tire plant in Fayetteville, N.C., with the help of up to $30 million in grants from the state Job Maintenance and Capital Development Fund.

News Monroe Coverage for Light-Duty and Medium-Duty Trucks Expands

Tenneco Inc. has added 22 part numbers for light-duty and medium-duty trucks to its Monroe brand of shock absorbers, struts and ride control components.

News Hankook Hosts Dealers at Baseball All-Star Game

As part of its 2019 MLB All-Star Week activity, Hankook Tire America Corp. entertained its dealers, who watched the game from the company's loge.

Toyo's Georgia manufacturing plant began producing tires in December 2005.
News Toyo Continues to Expand Production in Georgia

Toyo Tire Corp. plans to expand annual production at its Toyo Tire North America Manufacturing Inc. manufacturing facility in Bartow County, Ga., by more than 1 million tires.

Norbar says its PTME pneumatic wheel bolting tool is price-competitive and provides the lowest cost of ownership.
Product Norbar Has Pneumatic Wheel Bolting Tool

Norbar Torque Tools Inc.’s PTME pneumatic wheel bolting tool features fast run-down speeds, up to 122 RPM.  

News TBC Promotes Will Helton to Midas Vice President

TBC Corp. has promoted Will Helton to vice president and general manager of its Midas International LLC division.

Leaders from 14 tire dealers gather for the inaugural Tire Industry Safety Leadership Summit in North Carolina in early June.
News 14 Commercial Tire Dealers Share Safety Innovations

Twenty-one employees from 14 commercial tire dealers gathered in June 2019 to share the latest safety methods and technology.

Rafael (Tony) Lugioyo is the new head of global sales for GRI. He will be based in the U.S.
News Lugioyo Brings Experience to GRI

Rafael (Tony) Lugioyo is the new head of global sales for Global Rubber Industries (Pvt) Ltd. (GRI). The hire to its senior sales team was made "to increase the momentum of the company’s rapid global expansion with its portfolio of specialty tires."

Be the First to Know

Get the latest news and most popular articles from MTD delivered straight to your inbox. Stay on top of the tire industry and don't miss a thing!