Consolidated sales in the first quarter of
High liquidity (
CEO Dr.
In view of the current market situation, the company is striving to reduce investments by at least 20 percent in the current fiscal year
Continental expects sales and earnings in 2020 to be significantly below previous year's figures
Executive Board forgoes 10 percent of its fixed income for another three months (until end of July)
Ramp-up: Production still halted temporarily at about one-fifth of all locations
Global protective strategy established to ensure safe production during a pandemic; in-house production of masks planned
Continental's sales and profits declined significantly in the first quarter. The primary reason for this was the production stop in
CFO
As the technology company announced when it presented its key figures for the first quarter on
The second quarter is expected to be the weakest quarter of the current fiscal year for Continental with regards to sales and earnings, as this is when the impact of the coronavirus pandemic will really be felt in
As Continental announced at the end of April, the timing for a more detailed outlook for 2020 currently cannot be determined since the situation remains very dynamic. For the year as a whole, however, the DAX company is expecting sales and earnings to fall significantly short of the previous year's figures.
Cost discipline further intensified; positive free cash flow
Continental further intensified its cost discipline in the first quarter. Projects and investments that are not urgently required have been postponed until further notice. For the current fiscal year, the company is striving to reduce its investments by at least 20 percent compared to the previous year. 'The economic environment has again deteriorated substantially since the beginning of March as a result of the coronavirus pandemic, which has meant that we have intensified cost-cutting even further. We are scrutinizing the necessity of all expenditures and investments at present and looking for savings that will prove effective in the short term. This will be reflected to a greater extent in our figures from the second quarter onward. We are continuing to push ahead at full steam with key development projects as well as preparations for upcoming production start-ups,' explained Continental CFO
In the reporting period, capital expenditure on property, plant and equipment, and software was down by
The effectiveness of our cost management was already reflected in the free cash flow before acquisitions and carve-out effects: at
Capital expenditure on research and development in the first quarter amounted to
Continuing high liquidity after conclusion of the first quarter
As at
Consistent continuation of Transformation 2019-2029 structural program
Irrespective of the current market situation, Continental is continuing to consistently pursue and implement its Transformation 2019-2029 structural program. 'With our structural program, we are strengthening our competitiveness and viability in the long term. These are sustainable savings that will prove effective in the medium and long term,' said Degenhart. As announced at the beginning of March, further measures are currently being assessed in view of the growing deterioration of the markets, which could continue in the medium term. Continental will provide additional information in due course.
Key figures for the
Production still halted at about one-fifth of all locations worldwide
As a result of the coronavirus pandemic, Continental temporarily ceased activities starting mid-March at more than 40 percent of Continental's 249 production locations worldwide for a few days to several weeks in order to protect employees and in response to the drop in demand. The company has recently resumed production at many locations. 'An industry-wide resumption of production from a standstill is unchartered territory for everyone. We have been preparing intensively for this for weeks. It will succeed if all elements of the supply chain mesh properly at the same time and the safety of employees is ensured. It is therefore vital that business leaders and lawmakers coordinate closely at the national and international level,' Degenhart stressed.
As of the beginning of May, production still remains temporarily halted at one-fifth of Continental's 249 production locations worldwide, primarily at locations in
Due to the temporary production interruption and lower demand, about 60 percent of Continental's nearly 240,000 employees worldwide are currently working reduced hours. In
Executive Board forgoes portion of salary for another three months
As a sign of solidarity with Continental's employees who have been affected by the coronavirus pandemic, the Executive Board has decided to extend its original one-month waiver of 10 percent of fixed salary by a further three months until the end of July.
Global protective strategy for production
To ensure safe production during a pandemic, the company has developed a comprehensive strategy that already applies to at all locations worldwide. Based upon a hazard assessment of all workplaces, a broad range of suitable protective measures are being implemented, such as the installation of Plexiglas dividers, a substantial increase in the frequency of cleaning at all locations, shortened or staggered shifts, shift handovers without any personal contact, and longer canteen opening times and greater distance between seating in canteens and break rooms.
Most employees who do not work in production are working from home wherever feasible in order to minimize personal contact at work. A global strategy ensures employees have sufficient health protection while carrying out certain tasks in all of the company's facilities.
Protective masks: own requirements covered by in-house production
Continental's protection strategy stipulates the use of protective masks. The various mask types to be used will depend on the risk assessment of the workplace. Continental will cover its additional requirements for protective masks with its own production from
As at the end of the first quarter of 2020, the
Please find a detailed overview about the key figures for the group sectors (DOCX, 72.0 KB) in the Word document of the press release.
Sales and earnings development of business areas better than expected at the beginning of April
Sales in the Automotive Technologies group sector were
The Rubber Technologies group sector achieved sales of
In Continental's powertrain business, the Powertrain Technologies group sector, sales were
Overview of all available materials: Results Q1 | 2020
Contact
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Phone: +49 511 938-1278
E-mail:
henry.schniewind@conti.de
Head of Media Relations
Phone: +49 511 938-1364
E-mail:
vincent.charles@conti.de
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