The car supplier and tire manufacturer Continental expects lower sales this year than before in a weaker environment. Because Conti is now assuming that manufacturers will produce fewer cars, especially in Europe, and the market development in the North American tire replacement business is also weaker, CEO Nikolai Setzer (53) has reduced sales expectations to between 40 and 42.5 billion euros, as the Hanover-based company announced on Wednesday. So far, 41 to 44 billion euros were targeted.
When it comes to the operating profit margin before interest, taxes and special items, Conti remains at its previous target range. However, in the automotive supply sector alone, the prospects for operating profit have deteriorated somewhat.
In response to the numbers, the stock continued to rise in early trading on Thursday. Since Monday, when Continental announced its demerger plans, the stock has gained around 10 percent against the generally weaker market trend.
In the second quarter, things went significantly better in most of the group than a year before. According to the information, the savings program with job cuts and price renegotiations with car manufacturers have had an effect, which should benefit Lower Saxony even more in the coming quarters.
“In the current challenging market environment, the improvements in results are essentially due to our measures in the corporate divisions,” said Continental boss Nikolai Setzer. Continental had cut thousands of jobs in the car division, among other things.
Profit increases in the second quarter
The operating result in the group rose by almost 41 percent year-on-year to 704 million euros and was therefore better than analysts expected. The bottom line was that at 305 million euros, almost half more profit remained. However, sales fell by a good 4 percent to 10.0 billion euros.
“We will not let up in the second half of the year and will continue to work hard to achieve the financial goals we have set for ourselves,” said the new Continental CFO Olaf Schick.