CONTINENTAL AG Q1 2024 Results
Hanover - May 8, 2024
Ticker: CON
ADR-Ticker: CTTAY http://www.continental-ir.com
Katja Garcia Vila - CFO
Agenda
- Group Highlights
- Automotive
- Tires
- ContiTech
- Cash Flow
-
2024 Outlook
Back-up and Fact Sheets 2023 - Q1 2024
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 2 |
1 | Group Highlights
Most Important KPIs for Q1 2024
Q1 2023 | Q1 2024 | |||
Sales | €10.3 bn | €9.8 bn | ||
Adjusted EBIT1 | €574 mn | €196 mn | ||
Adjusted EBIT1 margin | 5.6% | 2.0% | ||
PPA2 | -€31 mn | -€28 mn | ||
Special effects | -€20 mn | -€50 mn | ||
Restructuring | -€0 mn | -€20 mn | ||
Impairment | -€0 mn | -€2 mn | ||
Other effects | -€19 mn | -€27 mn | ||
NIAT3 | €382 mn | -€53 mn | ||
Adjusted free cash flow4 | -€949 mn | -€1,086 mn | ||
Gearing ratio | 39.4% | 36.4% | ||
Equity ratio | 36.6% | 37.9% | ||
Trailing ROCE5 | 4.4% | 7.0% | ||
Net indebtedness | €5,539 mn | €5,205 mn | ||
Executive Summary
- Negative organic growth -3.3% due to weak markets at the beginning of the year
- FX remain a burden in all group sectors
- Working capital improvements partially mitigated purchase price payment for ContiTech AG shares
- Automotive price negotiations in progress
- Self-helpmeasures on track; results expected in H2
- Tires expected to have a significantly better second quarter
- ContiTech expecting increasing demand in industry and support from OESL improvement during the year
- Completion of diesel-related fine proceedings
1 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects.
2 Amortization of intangibles from PPA.
3 Net income attributable to the shareholders of the parent.
4 Free cash flow before acquisitions and divestments.
5 Calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM.
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 3 |
1 | Group Highlights
Q1 2024 - Sales and Adjusted EBIT
Sales (€ mn) | Adjusted EBIT1 (€ mn) | ||||||||||
Automotive | Tires | ContiTech | Contract | Automotive | Tires | ContiTech | Contract | ||||
Manufacturing | Manufacturing | ||||||||||
-2.4% | |||||||||||
5,015 | 4,813 | -1.9% |
3,463 3,290
13.4% | |||||||
461 | 11.7% | ||||||
-5.4% | 386 | 6.5% | |||||
0.8% | 5.4% | ||||||
1,731 | |||||||
1,647 | -4.3% | 113 | 88 | ||||
-48.2% | 39 | ||||||
-205 | |||||||
154 | 80 |
6.2%
0.9%
10 1
Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | Q1 | |||
2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 2024 | 2023 2024 | |||||
Organic growth2 | | | Adj. EBIT1 margin | ||||||||||||||||
1 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects. | ||||||||||||||||||
2 Before changes in the scope of consolidation and exchange-rate effects. | ||||||||||||||||||
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 4 | ||||||||||||||
2 | Automotive
Q1 2024 - Sales and Adjusted EBIT
Sales1, 2 (€ mn) | |||
5,015 | -2.4% | ||
4,813 | |||
AM | 829 | +4.3% | 847 |
AN | 1,106 | +3.9% | 1,132 |
SAM | 1,869 | -2.3% | 1,803 |
SCT | 350 | -7.9% | 320 |
UX | 928 | -15.0% | 767 |
Q1 2023 | Q1 2024 |
Adjusted EBIT3 (€ mn)
0.8%
39 | -4.3% |
-205 | |
Q1 2023 | Q1 2024 |
Organic growth4 | | Adj. EBIT3 margin |
Sales
- Sales impact from FX: -1.6%
- Negative volume development mainly driven by weak European market, delayed ramp-ups and unfavorable product mix
- Significant part of customer contract renegotiation ongoing
Adjusted EBIT3
- Introduction of new product generations temporarily impacting operational efficiency
- Inflation continuously increases labor costs
- Slight support from lower premium freight
1 January 1, 2024, the former SMY business area was dissolved into AM, AN and SCT. The 2023 figures are displayed accordingly on a pro-forma basis. 2 Due to consolidation effects, the sum of numbers shown in the columns does not match the total sum.
3 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects.
4 Before changes in the scope of consolidation and exchange-rate effects.
AM: Autonomous Mobility. AN: Architecture and Networking. SAM: Safety and Motion. SCT: Software and Central Technologies. UX: User Experience
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 5 |
2 | Automotive
Regional Production vs. Sales Growth in Q1 2024
Europe1 | North America1 | China1 | ||
∆ Y-o-Y in % | ∆ Y-o-Y in % | ∆ Y-o-Y in % |
Worldwide1
- Y-o-Yin %
1% | |
-2% | -2% |
-3% |
4%
0%
~ -1%pt
-1%
-2%
Europe: share of sales1 | North America: share of sales1 | China: share of sales1 | |||||||||||||
Q1 2023 | 50% | Q1 2023 | 22% | Q1 2023 | 13% | ||||||||||
Q1 2024 | 50% | Q1 2024 | 22% | Q1 2024 | 13% | ||||||||||
PC< production by region | Automotive sales | ||||||||||||||
1 Shown as change in organic sales Y-o-Y (adjusted for FX and consolidation effects).
PC< production weighted by regional sales share
Outperformance
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 6 |
2 | Automotive
Q1 2024 - Order Intake of €4.6 bn Lifetime Sales
Order Intake Q1 20241 (€ bn)
0.8
1.9
Highlights
Autonomous Mobility: €1.9 bn
- Next generation of surround radars for a North American customer
Architecture and Networking: €1.6 bn
- Continental smart device-based access and start solution for multiple customers
1.6
Safety and Motion: €0.8 bn
- Airbag control units
- Latest generation of brake systems
AM AN SAM UX
1 Without Software and Central Technologies.
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 7 |
3 | Tires
Q1 2024 - Sales and Adjusted EBIT
Sales (€ mn) | Adjusted EBIT1 (€ mn) | |
Sales
3,463 | -1.9% |
3,290 | |
Q1 2023 | Q1 2024 |
13.4% | |
461 | 11.7% |
386 | |
Q1 2023 | Q1 2024 |
- Impact from FX: -2.5%
- Volumes: -1.6%, mainly due to weak OE and continuing muted truck markets, particularly in Europe
- Price/mix: -0.3%, negative effect from cost indexation and persisting unfavorable mix effect due to weak truck tire sales
Adjusted EBIT1
- FX and volumes also a burden on profitability
- Negative effect from cost indexation
- Positive contribution from raw materials
- Labor cost inflation headwind
Organic growth2 | Adj. EBIT1 margin
1 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects. 2 Before changes in the scope of consolidation and exchange-rate effects.
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 8 |
4 | ContiTech
Q1 2024 - Sales and Adjusted EBIT
Sales (€ mn) | Adjusted EBIT1 (€ mn) | |
Sales
1,731 | -5.4% |
1,647 | |
Q1 2023 | Q1 2024 |
6.5% | |
113 | |
5.4% | |
88 | |
Q1 2023 | Q1 2024 |
- Impact from FX: -1.0%
- Demand significantly down in both industrial and automotive businesses, especially in Europe
Adjusted EBIT1
- Negative volumes, particularly in industry causing unfavorable mix effects
- Labor cost inflation an additional burden
Organic growth2 | Adj. EBIT1 margin
1 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects. 2 Before changes in the scope of consolidation and exchange-rate effects.
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 9 |
5 | Cash Flow
Adjusted Free Cash Flow Operationally Improved
Cash Flow Q1 2024 (€ mn)
Operating | Investing1 |
-595 | -712 | -355 | -374 |
Q1 2023 | Q1 2024 | Q1 2023 | Q1 2024 |
Adjusted Free Cash Flow1
-949 | -1,086 |
Q1 2023 | Q1 2024 |
Operating Cash Flow
- Weaker operational result
- Improvements in working capital
- Extraordinary burden of around €500 mn from reacquisition of ContiTech AG shares
Investing Cash Flow1
- Capex on prior year level, focused on Automotive order intake and capacity expansions at Tires
1 Before acquisitions and divestments.
.
Q1 2024 Results | © Continental AG | Public | May 8, 2024 | 10 |
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Continental AG published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 05:42:03 UTC.
