CONTINENTAL AG 9M 2024 Results
Hanover - November 11, 2024
Ticker: CON
ADR-Ticker: CTTAY http://www.continental-ir.com
Olaf Schick - CFO
Agenda
- Group Highlights
- Automotive
- Tires
- ContiTech
- Cash Flow
- 2024 Outlook
- Back-upand Fact Sheets 2023 - 9M 2024
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 2 |
Public
1 | Group Highlights
Most Important KPIs for Q3 2024
Q3 2023 | Q3 2024 | |||
Sales | €10.2 bn | €9.8 bn | ||
Adjusted EBIT1 | €642 mn | €873 mn | ||
Adjusted EBIT1 margin | 6.3% | 8.9% | ||
PPA2 | -€29 mn | -€27 mn | ||
Special effects | -€148 mn | -€95 mn | ||
Restructuring | -€90 mn | -€54 mn | ||
Impairment | -€2 mn | -€8 mn | ||
Other effects | -€56 mn | -€34 mn | ||
NIAT3 | €299 mn | €486 mn | ||
Adjusted free cash flow4 | €466 mn | €323 mn | ||
Gearing ratio | 39.2% | 37.7% | ||
Equity ratio | 37.9% | 38.4% | ||
Trailing ROCE5 | 9.2% | 9.5% | ||
Net indebtedness | €5,715 mn | €5,349 mn | ||
Executive Summary
- Organic growth of -2.2% due to persistently weak markets
- FX still negatively impacting all sectors
- Automotive: Majority of price negotiations finalized; self-help measures on track with incremental positive results in Q3
- Tires: Strong Q3 result, accelerated by improving PLT replacement sell-in in our key markets; effects from stabilization in replacement markets for truck tires
- ContiTech: Industry and automotive markets persistently weighing on performance; working on measures to safeguard results
- Free cash flow: Seasonal working capital build-up; cash outflow for restructuring; positive one-off of €125 mn on Group FCF and EBIT
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.
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 3 |
Public
1 | Group Highlights
Automotive Scorecard - 9M 2024
Significant | Strong Progress | Focus on Next Steps | ||
Restructuring | ||||
Operating leverage
Operational excellence
Fixed-cost reduction
R&D efficiency
- 90% of pricing negotiations successfully finalized
- Strong progress towards manufacturing cost reduction target of around 1% of sales short-term
- Reduction of >3.000 HC achieved YTD
- More than 2/3 of the >150 mn in 2024 savings achieved
- 90% of €400 mn savings target 2025 safeguarded
- Reduction of ~ 1,500 HC achieved YTD
- R&D ratio (excl. restructuring) improved 30 bps in Q3 YoY
- › Finalize price re-negotiations and further improvements in claim management
- › Continue inventory reduction to achieve turn rate increase by 1 YoY until year-end
- Realize ~ €200 mn instead of >€150 mn cost 2024
- › Realize €400 mn savings by end 2025
- › Streamline organizational setup
› Enhance use of AI tools
Asset efficiency / complexity reduction
› | Capex optimization resulted in reduced Q3 spending | | › Merge BAs SCT and AN into new BA |
"Architecture & Networking Solutions" |
Trough behind… | …Consequent | …Improvement trajectory | …Spin-off as additional | ||||
restructuring execution… | clear and tangible… | catalyst | |||||
YoY: Year-over-year. YTD: Year-to-date. SCT: Software and Central Technologies. AN: Architecture and Networking. | |||||||
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 4 | |||
Public | |||||||
1 | Group Highlights
Q3 2024 - Sales and Adjusted EBIT
Sales (€ mn) | Adjusted EBIT1 (€ mn) | ||||||||
Automotive | Tires | ContiTech | Contract | Automotive | Tires | ContiTech | Contract | ||
Manufacturing | Manufacturing | ||||||||
-2.7% |
5,029 | 4,792 | +3.5% |
3,429 3,495
-8.2%
1,711 | 1,541 | -56.7% | ||||||||
115 | 48 | |||||||||
13.3% | 14.5% | ||
507 | |||
4.2% | 454 | ||
2.8% | |||
203 | |||
142 | |||
6.5% | 4.5% | 2.3% | ||||||||
-7.4% | ||||||||||
111 | 69 | |||||||||
-8 | 1 | |||||||||
Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | Q3 | |
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. | ||||||||||||||||
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 5 |
Public
2 | Automotive
Q3 2024 - Sales and Adjusted EBIT
Sales1, 2 (€ mn) | |||
5,029 | -2.7% | 4,792 | |
AM | 866 | -4.7% | 813 |
AN | 1,174 | +6.8% | 1,228 |
SAM | 1,895 | -8.9% | 1,683 |
SCT | 345 | +5.2% | 361 |
UX | 820 | -5.0% | 760 |
Q3 2023 | Q3 2024 |
Adjusted EBIT3 (€ mn)
4.2% | |
2.8% | 203 |
142 | |
Q3 2023 | Q3 2024 |
Organic growth4 | | Adj. EBIT3 margin |
Sales
- Sales impact from FX: -2.0%
- Negative volume development driven by further deterioration of markets
- Majority of price negotiations finalized, also driving profitability
- First positive contribution from new product launches
Adjusted EBIT3
- Positive effects from our fixed cost saving program
- Support from incrementally lower premium freights continues
- Inflation remains a headwind
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
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 6 |
Public
2 | Automotive
Regional Production vs. Sales Growth in Q3 2024
Europe1 | North America1 | |
∆ Y-o-Y in % | ∆ Y-o-Y in % |
2% | |||
-6% | -5% | ||
-11% | |||
Europe: share of sales1 | North America: share of sales1 | ||
Q3 2023 | 46% | Q3 2023 | 25% |
Q3 2024 | 48% | Q3 2024 | 23% |
PC< production by region | Automotive sales | |
1 Shown as change in organic sales Y-o-Y (adjusted for FX and consolidation effects).
China1 | Worldwide1 |
∆ Y-o-Y in % | ∆ Y-o-Y in % |
~ 2%pt | |
-3% | -3% |
-5% | |
-12% |
China: share of sales1 | |||||
PC< production weighted | |||||
Q3 2023 | 14% | ||||
by regional sales share | |||||
Q3 2024 | 13% | ||||
Outperformance
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 7 |
Public
2 | Automotive
Q3 2024 - Order Intake of €3.7 bn Lifetime Sales
Order Intake Q3 20241 (€ bn)
0.2
0.80.4
1.8
AM AN SAM UX
Highlights
Safety and Motion: €1.8 bn
- Three major awards for electronic parking brakes
- Multiple orders for air suspension systems, sensors and latest generation brake systems
User Experience: €0.8 bn
- Major orders for latest generation display solutions for OEMs in Asia and Europe
Architecture & Networking: €0.4 bn
- Including awards for trunk and trailer electronics, body control modules and telematic controls
1 Without Software and Central Technologies.
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 8 |
Public
3 | Tires
Q3 2024 - Sales and Adjusted EBIT
Sales (€ mn) | Adjusted EBIT1 (€ mn) | |
Sales
3,429 | +3.5% | 3,495 |
Q3 2023 | Q3 2024 |
Organic growth2 | Adj. EBIT1 margin
14.5% | |
13.3% | 507 |
454 | |
Q3 2023 | Q3 2024 |
- Impact from FX: -1.5%
- Volumes: +2.0%, improved sales in replacement markets in EMEA and APAC; stabilization in the European and North American replacement markets for truck tires
- Price/mix +1.3%; indexation impact decreased, positive effects from channel and product mix; regional mix still slightly negative
Adjusted EBIT1
- PLT replacement volumes contributing positively
- Positive mix driven by good replacement volumes in winter and all-season tires in EMEA and stronger sales in APAC
- Slightly negative effect from labor as well as raw material costs
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.
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 9 |
Public
4 | ContiTech
Q3 2024 - Sales and Adjusted EBIT
Sales (€ mn) | Adjusted EBIT1 (€ mn) |
Sales
1,711 | -8.2% |
1,541 | |
Q3 2023 | Q3 2024 |
Organic growth2 | Adj. EBIT1 margin
6.5% | |
111 | |
4.5% | |
69 | |
Q3 2023 | Q3 2024 |
- Impact from FX: -1.8%
- Automotive OE and the industry markets remain weak, especially in Europe and North America
- Persistent industry weakness particularly in manufacturing, off-highway and commercial vehicle markets
- Slight recovery in aftermarket and construction & home
Adjusted EBIT1
- Negative volumes causing overall margin pressure
- Positive contribution from self-help measures and price/mix offsetting labor cost inflation
- OESL remains slightly positive due to implemented measures
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.
9M 2024 Results | © Continental AG | Public | November 11, 2024 | 10 |
Public
Attachments
- Original document
- Permalink
Disclaimer
Continental AG published this content on November 11, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 11, 2024 at 06:45:27.110.
