Continental AG
After the weak first quarter of last year, sales increased by eleven percent to 10.3 billion euros.
(Photo: dpa)
Continental significantly increased sales and profits in the first quarter. Compared to the weak first quarter last year, revenue increased by eleven percent to over ten billion euros, as the automotive supplier announced on Wednesday. Adjusted operating profit rose 35 percent to 578 million euros.
“We closed the first quarter of 2023 with a solid result against the background of the difficult market and environmental conditions,” says CEO Nikolai Setzer. The Dax supplier benefits from the general recovery of the car sales markets in Europe, the USA and China.
An order worth billions in the ailing automotive segment provides additional momentum. The division, in which Conti bundles its future business with sensors, electronics, software and car components, has been a problem for years. So far, the high investments in the business have not contributed to the group profit. Conti is making small advances here.
Continental receives major order for automated driving
As in the last quarter of 2022, the division was able to start the year in the black. The profit margin was 0.8 percent. Setzer expects further progress here. As expected, earnings in the first quarter were below the forecast for the year as a whole. “According to our expectations, this will develop positively in the further course of the year,” said Setzer.
In the first quarter, incoming orders in the car division increased by more than 13 percent to 6.6 billion euros compared to the previous year. This included a major order for radar sensors worth 1.7 billion euros. At Conti, the automated driving business is one of the areas in which the company has great hopes for growth.
Continental
The Continental boss can look back on a good first quarter.
(Photo: dpa)
The supplier does not provide any information on which car manufacturer the order came from. Conti supplies various manufacturers with radar solutions, including Tesla. The US electric car pioneer has recently installed radar sensors in its vehicles again. Industry circles say that Continental will provide appropriate solutions for the Model 3.
The sales of the car division increased by more than 18 percent to five billion euros. Conti generates around half of its sales on the European market. North America accounts for 21 percent, China only 13 percent.
However, the positive overall picture is clouded by the strongly negative cash flow. In the past quarter, the minus amounted to 949 million euros. According to CFO Katja Dürrfeld, there were two reasons for this: “Increased stock levels to maintain our supply chains and a high level of receivables. We plan to reduce both over the course of the year,” said the manager.
Conti is not shaking the outlook for the year as a whole. The Executive Board expects sales of between 42 and 45 billion euros and a profit margin of 5.5 to 6.5 percent.
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