Conti announces record sales and profits and plans to double dividend

Hannover, Germany - For the fifth consecutive year, Continental AG has declared record sales and profits. For the 12 months to December 2006, the company recorded consolidated sales of €14 887 million, an increase of 7.6 percent over the previous year. Consolidated earnings (EBIT) increased by €6.3 percent to €1602 million.

Both return on sales (RoS) and return on capital (RoCE) decreased slightly over the previous year, but both figures are healthy compared with others in the same sector. Ros stood at 10.8 percent, compared with 10.9 percent a year earlier, while RoCE stood at 18.7 percent compared with 19.4 percent 12 months ago.

The passenger and light truck tyres division lifted its sales by 5.6 percent, to €4694 million. Before changes in the scope of consolidation and exchange rate effects, sales increased by 5.3 percent.

EBIT in that devision fell 2.7 percent to €651 million (2005: €669.0 million), generating a return on sales of 13.9 percent (2005: 15.1 percent) and a RoCE of 24.9 percent (2005: 26.9 percent).

"In view of various negative impacts, particularly the €169 million increase in raw material costs, we have done a really good job, also in comparison with our competitors," said Executive Board chairman Manfred Wennemer, who is also responsible for the division. With 106.3 million tyres sold, sales volume was slightly higher than in 2005."

Sales of the commercial vehicle tyres division rose to €1468 million, up 6.5 percent compared with 2005 (€1379 million). The division reported an 11.0 percent decline in its EBIT to €136.2 million (2005: €153.0 million), generating a return on sales of 9.3 percent (2005: 11.1 percent) and a ROCE of 16.1 percent (2005: 18.4 percent).

Increased raw material prices amounting to approximately €109 million affected the result compared with the previous year. The division lifted worldwide truck tyre sales by 4.2 percent to 6.9 million tyres. "We have prepared for further growth with additional capacity at low-cost locations in Slovakia, Brazil and Malaysia," said Dr. Hans-Joachim Nikolin, Executive Board member responsible for the division.

The ContiTech division recorded a decrease in sales to €2869 million, down 0.9 percent compared with 2005 (€2894 million). Before changes in the scope of consolidation and exchange rate effects - mainly from the loss of sales from the Stankiewicz business unit amounting to €201.5 million for the last three quarters of 2005 - sales rose by 6.9 percent.

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Press release and analysts presentations on Conti website