Conti rubber businesses register mixed first-half results

Hanover, Germany – Continental AG’s rubber businesses – Tires and ContiTech – saw earnings develop in opposite directions during the first six months of 2024.

At Tires, half-year earnings (EBITDA) rose 17% year-on-year to €1.25 billion, on 3.4% lower sales of €6.7 billion, Continental reported 7 Aug.

Sales figures in the OE business were “considerably lower” than in the same period of last year due to weak vehicle production, the group noted.

By contrast, sales in the passenger car replacement tire business were up year-on-year, particularly in Europe and the Asia-Pacific region.

In the commercial vehicle tire business, sales figures were lower in the reporting period than in the previous year, the results statement continued.

Meanwhile, Continental’s industrial and materials arm ContiTech reported a 10% year-on-year decline in earnings, on 5.2% lower sales of €3.3 billion.

Automotive OE sales at ContiTech fell 5.8% year-on-year, while revenue from the industrial and replacement business was down 5.5% compared to a year ago.

The German group linked the decline to lower production volumes in the automotive OE business as well as targeted product portfolio measures in its 'OESL' business area.

The industrial and replacement business suffered particularly from weak demand in the off-highway, commercial vehicle, construction and printing industries.

Elsewhere, ContiTech's business with the oil & gas sector and in the automotive replacement market 'remained stable'.

In a weak industrial-market environment, ContiTech "benefited from price adjustments and strict cost discipline,” commented group CEO Nikolai Setzer.

Also, earnings at ContiTech improved significantly” compared to the first quarter, on cost discipline and price negotiations within the automotive business.

According to finance chief Olaf Schick, the cost-reduction measures adopted by the group “are starting to pay off.”

“We will not let up in the second half of the year and will continue to work hard to achieve the financial targets we have set ourselves,” the CFO added.

For the full fiscal year, Continental adjusted its outlook to reflect lower estimates for automotive production.

The group now expects consolidated sales of €40.0 billion to €42.5 billion, compared to previously announced estimate of €41.0 billion to €44.0 billion, with adjusted EBIT margin unchanged at 6.0% to 7.0%.

For the Tires group sector, Continental now anticipates sales of €13.5 billion to €14.5 billion, down slightly from the previous estimate of €14.0 billion to €15.0 billion. Segment adjusted EBIT margin remained unchanged at 13.0% to 14.0%.

For the ContiTech, the group still expects sales to come in at €6.6 billion to €7.0 billion, but lowered EBIT margin outlook from 6.5% to 7.5% announced previously, to 6.5% to 7.0%.