New Delhi, March 21, 2019: Continental has successfully concluded fiscal 2018. The DAX company’s sales totaled €44.4 billion and the adjusted EBIT margin was 9.3 percent, which meant that the technology company achieved its adjusted annual targets. “Leaders deliver good results, even under bad circumstances. Over the past year, we have again demonstrated our excellent performance despite the weak markets. We are continuing to grow faster than our relevant industries and markets,” said Dr. Elmar Degenhart, CEO of Continental, taking stock of the past fiscal year on Thursday in Hanover. At the presentation of the preliminary business figures for 2018, Degenhart made reference to Continental’s extraordinary technological prowess.
“Autonomous driving, electric mobility and connectivity: We are the architects of an ecosystem of safe, clean and intelligent mobility. When people talk about the ‘mobility of the future,’ they mean Continental. We are supplying what others are still testing. Our solutions, components, and systems are already generating enhanced safety, efficiency and comfort in four out of five vehicles worldwide,” said Degenhart, underscoring the company’s strong position on the mobility market. He added: “Grip is one of our traditional key fields of expertise in the tire business. It is part of our corporate culture, and we transfer it even to our connectivity technology, providing dependable solutions to offer secure contact, from the road to the cloud, all from a single source like no other company.”
The DAX company’s unique technology portfolio once again helped it to grow at a faster rate than its markets in 2018. Continental’s organic sales growth was 3 percent. “Our growth is testament to the confidence our existing and many new global customers have in our innovation capacity. In addition, our net income of €2.9 billion was almost at a record level. That is a solid result given the disappointing market development in the past year,” remarked Wolfgang Schäfer, Continental’s CFO.
At around €1.9 billion, last year’s free cash flow, adjusted for acquisitions and funding of U.S. pension obligations, exceeded the modified expectations.
On this basis, the Continental Executive Board is proposing a €0.25 increase in the dividend to €4.75 per share for the past fiscal year. The proposal also takes into account the overall performance of the company in fiscal 2018. The shareholder payout of 32.8 percent is slightly above the top end of the set dividend payout corridor of between 15 and 30 percent of net income.
Fiscal 2019 has got off to a subdued start, as expected, due to continuing market uncertainty. Continental is reaffirming its preliminary guidance from early January. Accordingly, the Hanover-based technology company still expects sales of around €45 to €47 billion and an adjusted EBIT margin of approximately 8 to 9 percent. “The guidance for 2019 is based in part on the assumption that the global production volume of passenger cars and light commercial vehicles will be stable at 94 million. Production in the first half of the year is likely to be down on last year’s figure. In our eyes, risk factors include the unclear ramifications of economic development in China and the trade disputes between the U.S.A. and China and between the U.S.A. and Europe – and then there is also the unclear situation with Brexit,” Schäfer said.
In the current fiscal year, Continental will lay the important groundwork for the organizational realignment announced last July. A crucial part of this realignment is the potential partial IPO of the powertrain business, which, under the name “Vitesco Technologies,” will develop, sell and produce systems and solutions for conventional and electrified drives for automotive manufacturers worldwide. “We completed the transformation of our powertrain business into an independent group of legal entities in record time,” Degenhart emphasized. The company’s preparations for a potential partial IPO in the second half of 2019 are on schedule. “We want to provide for greater entrepreneurial freedom in a disruptive market environment, which will enable us to transfer the full force of our driving power to the road, converting it into added value,” Degenhart said with confidence.
Automotive Group’s order intake again at record level
The order intake in the Automotive divisions, which specialize in vehicle electronics, remained at a high level. It amounted to around €40 billion in the past fiscal year and was once more on a par with the previous year’s record level. “Safe, efficient and intelligent: Continental technology is steering the mobility of the future,” said Degenhart.
Investing in the ecosystem of future mobility
In 2018, Continental continued to invest large amounts in the mobility of tomorrow. In fiscal 2018, the technology company spent over €6.3 billion on projects including research and development as well as the expansion of production facilities and capacities.
“We are investing systematically, logically and substantially in the ecosystem for future mobility,” remarked Schäfer. “We’ve done our homework. Our balance sheet is strong. We have taken advantage of the upturn in recent years and systematically reduced our debt,” he emphasized. This would enable the company to easily undertake acquisitions for up to €5 billion.
Corporate Comm India(CCI Newswire)