However this result has fallen short of market expectations of a 17% rise in profit. Third quarter EBIT was 426.1 million euros, up 8.1% over Q3 2006, while the quarter’s net profit was 251.5 million euros, a figure that failed to meet analyst predictions of 274 million euros.
The company’s consolidated sales for the first nine months of 2007 rose by 8.9% to 11.92 billion euros; before changes in the scope of consolidation and exchange rate effects, consolidated sales were up 6.4%. During the nine-month period EBIT rose by 19.8% to 1.34 billion euros and the return on sales increased by 11.2%; before changes in the scope of consolidation and special effects, EBIT rose 15.8% to 1.38 billion euros. The adjusted return on sales amounted to 12.0 per cent, up from 10.9% last year. The net income attributable to shareholders of the parent increased 25.3% to 825.2 million euros, with earnings per share higher at 5.63 euros, as opposed to last year’s 4.51 euros.
Continental is combining its sales and EBIT figures for the first nine months of 2007 with a capital increase of just under ten per cent for the financing of its Siemens VDO Automotive AG acquisition, and is issuing 14.65 million new shares. Following Supervisory Board approval, the Executive Board of Continental AG resolved on October 29 to increase the company’s share capital against contribution in cash, with the exclusion of shareholders’ pre-emptive rights.
According to Continental CFO Dr. Alan Hippe, the company’s share capital is to be increased through the issuing of common shares by way of an accelerated bookbuilding process to German and international institutional investors, with an anticipated completion date of October 30. “With the proceeds, we can notably reduce borrowings incurred to fund the purchase price for Siemens VDO of about 11.4 billion euros. We are thus underscoring the fact that we will vigorously reduce our level of indebtedness as promised,” emphasised Dr. Hippe. The banks involved in executing the capital increase include Citigroup Global Markets Limited, Dresdner Kleinwort and Goldman Sachs. Continental is being advised by ABN AMRO Rothschild on this transaction.
“With this move, we are pursuing several goals at the same time: We are ensuring speedy and consistent implementation of our financing concept for the acquisition of Siemens VDO. Additionally, by taking this step quickly and resolutely, we are removing any speculation about the timing and scope of the capital increase, which is naturally in the interest of our medium and long-term oriented investors”, said Continental Executive Board chairman Manfred Wennemer. “In particular, however, we want to give investors a fair opportunity to evaluate the current performance strength of Continental based on our latest quarterly figures as well as the future prospects resulting from the acquisition of Siemens VDO.”
