Continental Increases Earnings in 2023 and Targets Further Improvement This Year

2024-11-23 08:31:43 Automotive

694

Continental achieved its financial targets in the past fiscal year, taking the DAX company a step closer to its mid-term targets as it continues to defy the challenging conditions. The geopolitical situation, additional inflation-related costs of around 1.4 billion, exchange-rate effects and high costs for special freight all had a considerable impact on performance. Continental also presented its strategy for increasing value creation and achieving its mid-term targets at its Capital Market Day in December 2023.

For the current fiscal year, the technology company is targeting an increase in sales and earnings (consolidated sales: around ï¿½41.0 billion to ï¿½44.0 billion, adjusted EBIT margin: around
6.0 to 7.0 percent). Continental expects the margin to improve further, particularly in the Automotive group sector, thanks mainly to the cost-cutting measures, price adjustments and efficiency improvements adopted last year. The goal is also to achieve above-market growth.

ï¿½The past fiscal year posed major challenges for us with geopolitical uncertainties, persistent strains on the supply of semiconductors, and inflation,ï¿½ said Continental CEO Nikolai Setzer at the annual press conference in Hanover on Thursday, adding: ï¿½We achieved our goals for 2023 and made improvements toward achieving our mid-term targets, despite the challenging conditions. For this, my special thanks go to our around 200,000 employees worldwide. Iï¿½m proud of our team, because together we made substantial progress. In 2024, we will once again tackle the challenges facing us head on and pursue our goals for the year with determination.ï¿½

Adjusted operating result increases by 31.6 percent in 2023
In the past fiscal year, Continental achieved consolidated sales of ï¿½41.4 billion (2022:
ï¿½39.4 billion, +5.1 percent). Its adjusted EBIT was ï¿½2.5 billion (2022: ï¿½1.9 billion, +31.6 percent), corresponding to an adjusted EBIT margin of 6.1 percent (2022: 4.9 percent). All three group sectors contributed to the improved adjusted EBIT margin.

Net income increased to ï¿½1.2 billion in 2023 (2022: ï¿½67 million, +1,635 percent). Adjusted free
cash flow was ï¿½1.3 billion (2022: ï¿½200 million, +547 percent).

ï¿½Thanks to an improvement in operating earnings and a reduction in inventories and receivables, we significantly increased our adjusted free cash flow. We therefore slightly exceeded our cash flow target, which speaks to our financial strength,ï¿½ said Continental CFO Katja Garcia Vila.

Dividend proposal of ï¿½2.20 per share
Based on the updated distribution strategy of 20 to 40 percent of net income, the Continental Executive Board will propose a ï¿½0.70 increase in the dividend to ï¿½2.20 per share for the past fiscal year. At around 38 percent, the distribution to shareholders is at the upper end of the defined range and would amount to around ï¿½440 million in total.

Key figures for the Continental Group

1 Before changes in the scope of consolidation.
2 Before amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special ef fects.
3 In the year under review, the presentation of income and expenses in connection with specific warranties, restructuring me asures, severance payments, as well as impairment and reversal of impairment losses on intangible assets and property, plant and equipment was changed. They are now assigned to the relevant functional areas. The comparative period has been adjusted accordingly.
4 The assignment of income and expenses from certain business activities within the functional areas has been adjusted. The c omparative period has been adjusted accordingly.
5 Capital expenditure on property, plant and equipment, and software. 6 Excluding trainees.
7 All market prices are quotations of the Continental share in the Xetra system of Deutsche Bï¿½rse AG. Data source: Bloomberg.