Continental: Automotive Group To Post Negative Adj. EBIT Margin In Q1; Adjusts Outlook

(RTTNews) – Continental AG (CTTAY.PK) said, based on preliminary data, first-quarter adjusted EBIT margin was 4.7% for continuing operations compared to 8.5%, a year ago. Adjusted EBIT margin in the Automotive group sector was negative at 3.9%, for the quarter.

Preliminary first-quarter consolidated sales were 9.3 billion euros compared to 8.6 billion euros, prior year. Before changes in the scope of consolidation and exchange-rate effects, sales increased year-on-year by 5.3%. Sales in the Automotive group sector were 4.2 billion euros compared to 4.1 billion euros, previous year. Before changes in the scope of consolidation and exchange-rate effects, sales in the Automotive group sector were down year-on-year by 1.2%.

For fiscal 2022, the company now expects consolidated sales to be around 38.3 billion euros to 40.1 billion euros, revised from prior guidance of 38 billion euros to 40 billion euros. The company targets adjusted EBIT margin to be between around 4.7% and 5.7%, revised from prior guidance range of around 5.5% to 6.5%.

For the Automotive group sector, Continental expects fiscal 2022 sales of around 17.8 billion euros to 18.8 billion euros, updated from prior guidance range of around 18 billion euros to 19 billion euros. As a result of the lower sales expectations, the company now expects an adjusted EBIT margin in the range of around negative 0.5% to positive 1%.

Continental now expects global production of passenger cars and light commercial vehicles to increase by between 4% and 6% year-on-year in 2022. The company’s outlook was based on anticipated growth of between 6% and 9%.

Continental noted that, in the event the geopolitical situation, in particular in Eastern Europe, remains tense or worsens, it could result in further lasting consequences for production, supply chains and demand. Depending on the severity of the disruption, this may result in lower sales and especially earnings in all group sectors as well as for the Continental Group compared to the prior year, the company said.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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