Consolidated gross sales up to now quarter had been €9.3 billion and adjusted EBIT was €439 million, equivalent to an adjusted EBIT margin of 4.7 per cent.
Continental carried out nicely within the first quarter of 2022 regardless of an more and more turbulent market setting, reporting a powerful tire enterprise. Many exterior components, such because the battle in opposition to Ukraine, the coronavirus pandemic, digital element shortages and price will increase in procurement and logistics, offered main challenges.
Consolidated gross sales up to now quarter had been €9.3 billion (Q1 2021: €8.6 billion, +8.2 per cent), and adjusted EBIT was €439 million (Q1 2021: €728 million, -39.8 per cent), equivalent to an adjusted EBIT margin of 4.7 per cent (Q1 2021: 8.5 per cent).
“The past quarter was overshadowed by the war against Ukraine and its drastic effects on already high energy prices and strained logistics chains and commodity markets. In addition, measures to contain the coronavirus pandemic, particularly in China, hurt economic development. Given the multiple challenges, we took various steps to minimize the impact on earnings,” mentioned Nikolai Setzer, CEO of Continental.
He added, “Price increases in procurement and logistics affected us significantly in the first quarter. Despite this considerable headwind, we achieved a good result in the tire business. For Automotive, we are confident that the measures taken will result in improved earnings over the course of the year.”
Continental took motion to deal with challenges and preserve manufacturing and provide chains, for instance by additional diversifying uncooked materials sources at an early stage, build up safety shares and reorganizing its worth chain within the electronics sector. Continental can also be working with its prospects to share the burden of elevated prices.
In the primary quarter of 2022, Continental generated a web revenue of €245 million (Q1 2021: €448 million for persevering with and discontinued operations). Adjusted free money movement was -€174 million (Q1 2021: €646 million for persevering with and discontinued operations).
“Adjusted free cash flow in the first quarter of this year was negative due primarily to higher procurement costs and inventory buildup. For the year as a whole, we anticipate an adjusted free cash flow of around €0.6 billion to €1.0 billion,” defined Katja Dürrfeld, CFO of Continental. The larger inventories are the results of elevated safety shares for uncooked supplies and semi-finished merchandise and the seasonal buildup within the tire sector.
Weak automotive manufacturing within the first quarter
In the primary three months of the yr, world automotive manufacturing was considerably decrease than within the first quarter of the earlier yr. The marketplace for passenger vehicles and light-weight industrial automobiles in Europe fell significantly sharply (3.8 million models, -19.1 per cent). North America additionally recorded a barely weaker begin to the yr in contrast with the earlier yr’s quarter (3.6 million models, -1.8 per cent).
In China, the manufacturing of passenger vehicles and light-weight industrial automobiles was up year-on-year (6.1 million models, +6.1 per cent). According to preliminary figures, world manufacturing of passenger vehicles and light-weight industrial automobiles fell by 4.5 per cent in contrast with the primary quarter of 2021 to a complete of 19.7 million models (Q1 2021: 20.7 million models).
Development of the group sectors
The weak automotive manufacturing together with rising procurement and logistics prices impacted the Automotive group sector particularly. Its gross sales elevated by 3.2 per cent to €4.2 billion (Q1 2021: €4.1 billion). After adjusting for exchange-rate results and modifications within the scope of consolidation, it posted natural gross sales progress of -1.2 per cent.
The Automotive group sector, due to this fact, outperformed the market, with world automotive manufacturing falling by 4.5 per cent within the first quarter of this yr. Its adjusted EBIT margin was -3.9 per cent (Q1 2021: 2.4 per cent).
The Tires group sector achieved an excellent outcome, recording elevated gross sales volumes within the automobile tires and commercial-vehicle tires substitute enterprise in contrast with the earlier yr. With gross sales of €3.3 billion (Q1 2021: €2.7 billion, +20.1 per cent), it achieved an adjusted EBIT margin of 17.1 per cent (Q1 2021: 16.6 per cent). Inventory valuation had a constructive impact of round €200 million on earnings resulting from elevated acquisition and manufacturing prices.
The appreciable price will increase for procurement and logistics additionally affected the ContiTech group sector, which posted gross sales of €1.6 billion (Q1 2021: €1.5 billion, +3.3 per cent) and an adjusted EBIT margin of 5.4 per cent (Q1 2021: 10.2 per cent). The conveyor belt and industrial hose companies carried out significantly nicely. Sales within the drive belt and air spring substitute enterprise additionally rose
Source: www.financialexpress.com”