Continental FY21 Adj. Operating Result Rises; Adj. Sales Up 6.7%

Continental (CTTAY.PK) said it performed well operationally in 2021 and achieved a positive net income. Adjusted sales were up 6.7 percent from prior year. The coronavirus pandemic, low automotive production due to electronic component shortages and significant cost increases in the areas of procurement and logistics had an especially significant impact on the sales and earnings, the company said.

In 2021, global production of passenger cars and light commercial vehicles increased year on year by only around 3 percent to approximately 77 million vehicles as a result of the semiconductor shortage.

Looking forward, the Group noted that in the event the geopolitical situation, in particular in Eastern Europe, remains tense or even worsens, it can result in lasting consequences for production, supply chains and demand. This may result in lower sales and earnings in all group sectors as well as for the Continental Group. Not including these risks, Continental expects that the global production of passenger cars and light commercial vehicles will increase by 6 to 9 percent in 2022.

Continental confirmed its medium-term targets despite unsatisfactory financial performance. These include an adjusted EBIT margin of between 8 and 11 percent.

For fiscal 2021, the company achieved an adjusted EBIT of 1.9 billion euros compared to 1.4 billion euros, prior year. Adjusted EBIT margin was 5.6 percent compared to 4.4 percent. Continental achieved net income of 1.5 billion euros compared to a loss of 962 million euros, last year. Profit per share from continuing operations was 6.49 euros compared to a loss of 3.02 euros.

According to preliminary figures, fiscal 2021 consolidated sales were 33.8 billion euros, up 6.0 percent. Before changes in the scope of consolidation and exchange rate effects, sales rose by 7.4 percent.

For fiscal 2022, Continental anticipates consolidated sales of around 38 billion euros to 40 billion euros, and an adjusted EBIT margin of around 5.5 to 6.5 percent. For the Automotive group sector, Continental forecasts sales of around 18 billion euros to 19 billion euros with an adjusted EBIT margin of around 0 to 1.5 percent. The company also projects higher procurement and logistics costs of around 2.3 billion euros.

The Continental Executive Board proposed a dividend of 2.20 euros per share.

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