Half-Year Results “Arm” Conti for Future

Following positive sales and EBIT during the first half of the year, Continental AG says its goals for 2007 are firmly in sight and feels “well-armed to tackle the tasks ahead.” The German tyremaker and automotive supplier achieved double-digit growth over the same period last year in these two key financial indicators, a result Conti is calling a “rock solid basis for yet another peak year.”

Consolidated sales for the first six months of 2007 rose by 10.8 per cent compared with the same period of 2006, to 8,013.9 million euros, and Continental report the Motorola automotive electronics business contributed 558.7 million euros to the company’s sales. Before changes in the scope of consolidation and exchange rate effects, consolidated sales were up 6.3 per cent.

Raw material prices, although still at a high level, remained stable during the first half of the year. EBIT rose by 26.2 per cent over the previous year’s 722 million euros to 911.5 million euros, and the return on sales to 11.4 per cent. The automotive electronics business acquired from Motorola contributed 7.4 million euros to EBIT. Before changes in the scope of consolidation and special effects, EBIT rose by 146.4 million euros – 19.2 per cent – to 909.8 million euros.

The Passenger and Light Truck Tires division first half 2007 sales increased by 6.5 per cent to 2,390 million euros, up from 2,243.4 million euros in 2006. Before changes in the scope of consolidation and exchange rate effects, sales were up 8.4 per cent. The division reported a 68.3 per cent increase in EBIT to 356.6 million euros. The return on sales rose to 14.9 per cent. Before changes in the scope of consolidation and special effects from 2006, EBIT rose by 99.7 million euros – 38.8 per cent to 356.6 million euros (this figure 256.9 million in the first half of 2006). The adjusted return on sales amounts to 15 per cent. “We have reinforced our upward trend in The Americas region, posting marked improvements in EBIT over the first half of 2006 in both the original equipment and replacement sectors. And this also applies to the adjusted figures”, explained Dr. Alan Hippe, who is responsible for this business.

The Commercial Vehicle Tires division recorded a decline in sales in the first half of 2007 to 706.4 million euros, down 1.8 per cent from 719.7 million. Before changes in the scope of consolidation and exchange rate effects, sales increased by 11.3 per cent. The division increased its EBIT to 58.3 million euros, up 31.9 per cent from last year’s 44.2 million. The return on sales rose to 8.3 per cent. Before changes in the scope of consolidation, EBIT rose by 25.8 million euros – 79.4 per cent – to 58.3 million euros. The adjusted return on sales amounts to 8.3 per cent.

“This strong half-year performance gives us a rock-solid basis for yet another peak year. And, at the same time, the figures for the divisions prove that our strategic direction as a broad-based automotive supplier is successful and absolutely correct”, said Executive Board chairman Manfred Wennemer. “Both tyre divisions, as well as ContiTech, have again demonstrated how valuable they are to the company. So, we’ve got every reason to look with optimism, not only to the second half of the year, but also beyond that as well.”

“Our figures for the first six months of 2007 underpin our forecast of topping last year’s sales and earnings”, he added.