Continental AG is boasting its sixth consecutive year of record sales and earnings figures in 2007, and the company’s Executive Board chairman has expressed confidence this favourable pattern will continue. “We intend to consistently continue our record streak this year,” said Manfred Wennemer at a press conference on February 21. “Despite the clouds hanging over the economic environment, we are setting clear targets: strengthened by our Siemens VDO acquisition, in 2008 we intend to improve the total calculated sales generated in 2007 of around 26.4 billion euros….With Continental in its traditional setup, we have kept the promises we made. In the new company era, this will not change.”

According to the German company’s preliminary figures, pro forma consolidated sales for the company, in its form prior to the acquisition of the Siemens VDO unit, grew 7.2 per cent to 15.9601 billion euros in 2007. EBIT increased by 237.9 million euros, an improvement of 14.9 per cent, to 1.8398 billion euros, and generated a return on sales of 11.5 per cent.

Factoring in Siemens VDO, staring December 1, 2007, brings consolidated sales up to 16.6194 billion euros, a jump of 11.6 per cent. Siemens VDO contributed 659.3 million euros to sales. Consolidated EBITDA improved 8.2 per cent year on year to 2.4906 billion euros, and consolidated EBIT increased 73.9 million euros, an increase of 4.6 per cent, to 1.6758 billion euros. Return on sales fell slightly to 10.1 per cent (from 10.8 per cent the previous year). Net income attributable to shareholders for 2007 experienced a growth of 3.9 per cent, up 38.7 million euros to 1.0206 billion euros. This corresponds to earnings per share of 6.79 euros.

Conti’s big news for 2007 was of course the Siemens VDO purchase, and primarily as a result of this the company’s net debt increased by 9.6754 billion euros to 10.9564 billion. Research and development costs are also said to have risen due in part to the acquisition, by 23.3 per cent to 834.8 million euros.

A dividend of 2 euros per share will be distributed, subject to approval from the company’s Supervisory Board. Mr. Wennemer added that, with the quick reduction of Continental’s much swelled debt a priority, an increase in the dividend paid for 2008 and 2009 “cannot be expected from the current standpoint.”

As previously mentioned, Continental is projecting a positive outlook for the current and coming financial years. “For 2008, we are targeting a sales volume above that of the pro forma 2007 sales figure of 26.4 billion euros reported for Continental and Siemens VDO,” announced Wennemer. “In 2009, we intend to generate growth of around 5 per cent in line with our strategic goals. All divisions will contribute towards increasing consolidated sales,” The Executive Board chairman added: “In addition, we anticipate for 2008 an EBIT margin before amortisation resulting from the purchase price allocation and before restructuring and integration expense that exceeds the pro forma adjusted value of 9.3 per cent of 2007. For 2009, we expect the EBIT margin after adjustment for the mentioned effects to improve further.”

According to Conti, the company’s top priority for 2008 is the reduction of debt, and the year is expected to be “clearly dominated by the integration of Siemens VDO.”