Sale of Conti’s Truck Tyre Division Still an Option

A comment made by the CFO of Continental AG during a conference call indicates the German manufacturer still considers the sale of its truck tyre division an option for the future. According to a report published by Forbes, Dr. Alan Hippe said, “should the division be unable to reach the targeted margin, we will have to consider a divestment.” However Dr. Hippe added he doesn’t foresee such a transaction occurring in the short-term.

According to results Conti released on April 29, the company’s Commercial Tire division attained sales of 328.4 million euros during the first quarter of 2008, a decrease of 4.7 per cent on the previous year. Upon releasing the quarter’s figures Executive Board chairman Manfred Wennemer commented, “In the Commercial Tires division, we implemented measures to again significantly improve the margin.” However the unit’s adjusted EBIT margin was 3.8 per cent for the quarter, well below Continental’s adjusted EBIT margin target of 10 per cent for all divisions by 2010.

The previous week Mr. Wennemer also made comments to the effect that the division’s position within Continental was under scrutiny. “We’ve been looking at that division for some years now, and as before, I don’t want to rule out we’re selling off the division,” he said.