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. | |||||||
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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
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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 06:45:27.782.
