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Source: Continental announcement
HANOVER, Germany — Continental is looking ahead to the second half of the year with optimism and maintaining its outlook for the current fiscal year.
As expected, the ongoing turbulent market environment had a noticeable impact in the second quarter of 2022, however. In particular, the geopolitical uncertainties as a result of the war against Ukraine, disrupted supply chains and massive price increases for raw materials, semi-finished products, energy and logistics, coupled with the shortage of electronic components and the consequences of the coronavirus lockdowns in China, heavily affected Continental’s results. At the same time, the technology company recorded a high order intake in the Automotive group sector of more than €6.0 billion.
Consolidated sales in the past quarter were €9.4 billion (Q2 2021: €8.4 billion, +13.0 percent), and adjusted EBIT was €411 million (Q2 2021: €512 million, -19.8 percent). This corresponded to an adjusted EBIT margin of 4.4 percent (Q2 2021: 6.2 percent).
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“The market environment remained extremely challenging for automotive suppliers in the second quarter. At the same time, we are making significant progress in the development and marketing of our technologies, with a strong order intake in Automotive. This shows that we have the right strategy and positioning. Our most recent mobility study also supports this,” said Continental CEO Nikolai Setzer on Tuesday in Hanover.
As shown in the representative Continental Mobility Study published in July 2022, connectivity, automation and the user experience play a decisive role for the majority of people (in China, Germany, France, Japan, Norway and the U.S.) when purchasing a new vehicle. The car as well as the technology built into it must also remain intuitive to operate, safe and affordable. Continental is ideally positioned to deliver this across all group sectors – from vehicle electronics and tires to vegan surface materials.
Adjusted EBIT for the past quarter was above the reported EBIT of -€165 million. This was primarily attributable to accounting effects of around €370 million that had to be taken into account in the Automotive group sector as a result of higher interest rates.
In connection with its business activity in Russia, Continental also impaired assets of around €75 million as a result of the additional sanctions imposed.
Furthermore, there were restructuring expenses of €63 million in the ContiTech group sector in the second quarter of 2022, primarily for the Mobile Fluid Systems business area as a result of the transformation of certain production sites communicated at the end of June 2022.
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These effects also had an impact on the net income achieved. This came to -€251 million in the second quarter of 2022 (Q2 2021: €545 million for continuing and discontinued operations). Adjustedfreecash flow was -€687 million (Q2 2021: €302 million for continuing and discontinued operations). To view the entire announcement, click HERE
