Conti sees growth prospects in tire & rubber segments amid challenging markets

Hanover, Germany – Continental AG’s Tires business unit saw sales and earnings (EBITDA) grow during the third quarter: earnings up 5% to €629 million, on 22% higher sales of €3.6 billion.

Over the first three quarters, the Tires segment saw sales rise to over €10 billion, up from €8.6 billion reported the year before. Nine-month earnings grew nearly 5% to over €2 billion.

Continental noted, however, that the tire business is facing a challenges around soaring costs for raw materials, semi-finished products, energy and logistics impacted earnings.

“In the current year, for example, average energy costs in Europe have doubled compared to 2021,” the German group pointed out.

Industrial rubber business unit ContiTech also saw sales grow over both the third quarter and first nine months, but overall year-to-date earnings came in below the prior-year’s level.

For the third quarter, ContiTech reported 20% growth in sales to €1.7 billion, and a 16.8% increase in earnings to €170 million.

Over the nine-month period, sales revenue increased by over 10% to €4.9 billion, while earnings saw a sharp 27.7% decline to €391 million.

Continental linked the decline to the increased costs and the volatile market environment.

For the full year, Continental said it expected production of passenger cars and light commercial vehicles to increase by 4% to 6% year-on-year.

For the tire-replacement business, the German manufacturer now expects global demand to weaken by 1% to 3% for the year as a whole.

In the ContiTech business area, the group expects year-on-year growth for 2022 as a whole, especially in North America and China and despite the current “signs of weakening, particularly in Europe.”

Negative effects from cost inflation for key inputs as well as for energy and logistics are expected to continue in the fourth quarter of 2022, Continental concluded.