Despite an overall upbeat tone, the word “crisis” has featured strongly during Continental AG’s reportage of its 2009 financial performance on Feb. 23, a likely indication of the extent to which the German automotive supplier was affected by last year’s market downturn.
Continental posted a net loss of 1.65 billion euros ($2.2 billion), compared with a loss of 1.1 billion euros in 2008.
“In the worst financial and economic crisis in decades and despite its unsatisfactory negative consolidated result, Continental has demonstrated its unfailing resilience,” stated Continental Executive Board chairman Elmar Degenhart.
“We have improved our operating base by means of restructuring programs, which will have an increasingly positive effect. At the same time, we have eliminated risks with goodwill impairments of around 876 million euros in the Automotive Group in the third quarter. Additionally, we have significantly improved our financing and capital structure with a successfully implemented refinancing package. This lays the foundation for reaping great benefits from the expected market recovery in the coming years.”
Consolidated sales of 4,143.0 million euros represented a 17.1% reduction on 2008 results, while adjusted EBIT declined a whole third to 1,165.8 million euros.
Return on sales dropped from 1.2% to -5.2%, while net income attributable to the shareholders of the parent company decreased by 525.7 million euros to a loss of 1,649.2 million euros.
Degenhart emphasized the Rubber Group’s stabilizing contribution to Continental: “Despite sharp declines in sales, the Rubber Group succeeded in generating an EBIT of 656 million euros in crisis year 2009. The adjusted EBIT of more than 1 billion euros was an even better performance than in 2008. With sales of around 8 billion euros, this translates to a margin of 12.9%. This is a remarkable achievement for all three divisions, boosted by the positive developments in raw material costs.”
In 2010, Continental expects the global output of cars and light commercial vehicles to increase by around 7% as compared with 2009, and the passenger and light commercial vehicle tire replacement markets to recover by 2% and 4% in Europe and North America.
It is, Conti notes, still difficult to determine sales opportunities in the truck tire replacement market, but many indicators here also suggest a recovery, albeit from a very low level. According to the most recent forecasts shared by Continental, the world economy will grow by up to 4% in 2010, but growth in Europe is expected to be only one per cent. Against this background, Conti expects the corporation to generate sales growth of at least 5% in 2010 and a significant year-on-year improvement in adjusted EBIT in 2010. (Tyres & Accessories)
