Continental Shows Off Strong Performance Execution In Weak Market
Recently, top automotive suppliers Continental and Osram planned to cut more costs.
Meanwhile, Continental anticipates a global automotive production to remain flat at best next year. Moreover, the firm reported a 1.99 billion-euro ($2.19 billion) loss for the third quarter.
The German car parts supplier doesn’t anticipate a material upturn in global production over the next five years, Chief Financial Officer Wolfgang Schaefer stated.
He also added, “At best, we foresee a sideways trend in global automotive production in 2020.”
Continental foresees production rates in China, Europe, and North America to continue to decrease in the fourth quarter.
The firm also said that the production of passenger cars and light commercial vehicles globally is going to shrink by about 6%.
Last week, the company had cautioned that a EUR2.5 billion charge would hit earnings in the third quarter. The strike would come from the decline in global car production.
A year earlier, earnings before interest and taxes in the period shifted to a EUR1.97 billion loss, from a EUR626.1 million profit.
There was also an adjustment on EBIT that has dropped by 20% to EUR614.5 million.
However, continental supported its guidance for the year.
Continental’s Operational Performance
Mr. Schaefer said, “If you look at our purely operational performance, we did reasonably well in the third quarter.”
Elsewhere, Continental presented a reliable operational performance in the third quarter of 2019. This is true even if markets continued to decline.
The technology company indicated at the presentation of its quarterly figures in Hanover that sales grew in the third quarter by nearly 3 percent to €11.1 billion.
In the same period of the preceding year, they amounted to €10.8 billion.
They have adjusted for changes in the scope of merging and exchange rates, sales growth was down 0.3 percent, nearly on average with the prior-year level.
By contrast, the global construction of passenger cars and light commercial vehicles dropped by about 3 percent in the same period.
This was due to its forward-looking product portfolio. The technology firm was thus able to almost entirely avoid the effects of the sharp decline in demand worldwide.
The adjusted operating outcome was €615 million.
