Conti Sales Up, Margin Stable

The importance of Continental AG’s Automotive Systems and ContiTech divisions shone through once again as the company published its first half 2006 figures. The two non-tyre divisions achieved sales of 4329.2 million euros and 60 per cent of group EBIT between them, while the tyre divisions both bore the brunt of increased raw material prices despite increased sales.

Overall, in the first half of 2006, the international automotive supplier reported that consolidated group sales rose 6.2 per cent to 7,230.9 million euros compared with 6,807.7 million last year. EBIT grew 5.3 per cent to 722.0 million euros (first half 2005: 685.7 million euros). Return on sales amounts to 10.0 per cent (previous year 10.1 per cent).

The Passenger and Light Truck Tires division increased sales 7.8 per cent to 2,243.4 million euros, but also saw EBIT decline 14.4 211.9 million euros and margin fall 2.5 points to 9.4 per cent.

The Commercial Vehicle Tires division reported sales of 719.7 million euros in the first half, up of 10.5 per cent. But once again a decline in EBIT to 44.2 million euros with return on sales falling 1.7 points to 6.1 per cent.
Commenting on the company’s performance CFO Dr. Alan Hippe said: “Contributing factors included the improved passenger and light truck tyres business in the NAFTA region, where adjusted EBIT distinctly outperformed the figure for the same period of 2005…However, we had various one-time effects influencing EBIT, in particular the negative amount of 65.2 million euros for restructuring expenses in Charlotte, U.S.A., and in Ebbw Vale [brake plant], UK.”

“We are looking to the second half of this year with optimism because, driven by the winter tyre business among other things, sales are traditionally stronger than in the first half”, said Manfred Wennemer, chairman of the executive board adding: “In the light of this performance we have no cause to revise our outlook for fiscal year 2006 – even though competitors operating in parts of our business have been forced to do so.”