- Sales grow 14 percent to €9.6 billion after three months
- Net income for the period rises 12 percent to €657 million or €3.28 per share
- Free cash flow before acquisitions increases significantly to €318 million
- EBIT at €978 million
Hanover, May 7, 2015. After a successful start to the new year , the Continental Corporation is increasing its sales forecast for the current fiscal year from about €38.5 billion to more than €39 billion. “The first quarter showed that we are growing faster than the markets. Positive effects of foreign exchange are adding to this. We expect this positive development to continue. Furthermore, we anticipate a tailwind of around €150 million for the year as a whole due to the ongoing stable price trend for rubber and the lower price of crude oil. We therefore expect to comfortably achieve an adjusted EBIT margin of more than 10.5 percent in the current year,” said Continental CEO Dr. Elmar Degenhart on Thursday when presenting the business figures for the first quarter.
In the first quarter of 2015, sales of the international automotive supplier, tire manufacturer and industrial partner climbed by 14 percent, year-on-year, to €9.6 billion. At the same time, the net income attributable to the shareholders of the parent increased by 12 percent to €657 million. Earnings per share rose accordingly to €3.28 compared with €2.94 in the same period of the previous year. As at March 31, EBIT also increased by 8.3 percent, year-on-year, to €978 million. This equates to a margin of 10.2 percent compared with 10.8 percent in the previous year. The adjusted EBIT climbed by 10.4 percent, year-on-year, to more than €1 billion. At 11.4 percent, the adjusted EBIT margin was therefore at the same level as the first three months of 2014.
Furthermore, Continental continued to generate strong cash flow as in the previous fiscal year. “Free cash flow before acquisitions increased significantly, year-on-year, from €81 million to €318 million or by €237 million. Taking into account the acquisition of Veyance Technologies that closed in January, free cash flow amounted to -€271 million. We are very confident that we can generate free cash flow before acquisitions of at least €1.5 billion for the year as a whole,” said Chief Financial Officer Wolfgang Schäfer.
Net indebtedness of the Continental Corporation at the end of the first quarter was €4.1 billion. This is €144 million less than a year ago. Net indebtedness increased by around €1.3 billion compared with the end of 2014, following the closure of the Veyance acquisition. Our gearing ratio was 33.5 percent at the end of March 2015.
As at 31 March 2015, Continental had around €6.7 billion of liquidity reserves, comprising approximately €2.4 billion in cash and cash equivalents and committed unutilized credit lines of approximately €4.3 billion.
Interest expense fell in the first three months of 2015 by €23 million to €84 million. Net interest expense declined by €24 million to €56 million.
In the first three months, Continental invested a total of €357 million in property, plant and equipment, and software. The capital expenditure ratio therefore amounted to 3.7 percent in comparison to 4.1 percent in the same period of the previous year. Continental increased its research and development expenditure by 18.2 percent, compared with the first quarter of 2014, to €643 million. This corresponds to 6.7 percent of sales compared with 6.5 percent a year ago.
At the end of the first quarter, Continental employed 202,496 people, representing a rise of 13,300 compared to the end of 2014. This was due primarily to the acquisition of Veyance Technologies and additional expansion of production capacity, distribution channels, and research and development.
The Automotive Group generated sales of €5.9 billion in the first three months of this year. At 8.7 percent, the adjusted EBIT margin was higher than the previous year’s level of 8.3 percent.
The Rubber Group generated first quarter sales of just under €3.7 billion and stabilized the adjusted EBIT margin at the previous year's level of 17.0 percent of sales.
Here you can download the "Financial Report as of March 31, 2015"
January 1 to March 31
in € millions
in % of sales
in % of sales
Net income attributable to the shareholders of the parent
Earnings per share in €
Adjusted operating result (adjusted EBIT)2
in % of adjusted sales
Free cash flow
Net indebtedness as at March 31
Gearing ratio in %
Number of employees as at March 313
- Before changes in the scope of consolidation.
- Before amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special effects.
- Excluding trainees.