Continental AG is raising its outlook for 2011, based on what it called "a very successful first half-year" that included double-digit growth rates for sales and EBIT.
"We had previously forecast sales of more than 28.5 billion euros, but we are now expecting at least 29.5 billion euros. We are also targeting an adjusted EBIT margin of around 10%, slightly more than the good 2010 figure of 9.7%," said Continental executive board chairman Elmar Degenhart upon publishing figures for the first half of the year.
He also pointed out that, despite the fact that natural rubber prices are currently declining, raw material expenses for the Rubber Group (which is mainly made up of tire production) will probably run to 850 million euros in 2011. The main reason for this is the spike in prices for synthetic rubber, due in part to the natural catastrophe in Japan. This is expected to particularly impact the Passenger and Light Truck Tires and ContiTech divisions in the second half of the year.
Year-on-year Continental sales rose by 17.6% to 14.9 billion euros in the first half-year. At the same time, the automotive supplier achieved an EBIT of just under 1.3 billion euros, which is 270 million euros or 26.7% more than in the same period last year. The EBIT margin is now 8.6% (2010: 8.0%). Adjusted EBIT before amortization and special effects rose to nearly 1.5 billion euros. This represents an increase of 174 million euros or 13.3% and an adjusted EBIT margin of 10%. (Tyres & Accessories)
