Continental has announced an increase in earnings for the third quarter of 2024, with the Automotive sector showing notable improvements thanks to targeted cost-saving measures. The company expects additional growth in adjusted EBIT for Automotive in the fourth quarter.
Continental’s Tires sector also delivered strong results, supported by early winter tire sales and better performance in Europe. However, the ContiTech sector faced challenges due to sluggish industrial demand in Europe and North America, leading Continental to revise its sales and earnings outlook for ContiTech and adjust its overall sales forecast.
“We are committed to Continental’s strategic and operational development, and we’re making each sector more agile and market-focused. With these measures, our sectors are now better positioned for greater independence,” said Continental CEO Nikolai Setzer.
“In Automotive, our actions to improve earnings are yielding results, as evidenced by our year-on-year and sequential increases in Q3 earnings. Price adjustments and disciplined cost management were significant contributors,” Setzer added, outlining Continental’s aim to further boost Automotive’s earnings in the year’s final quarter.
Third Quarter Financial Performance
In Q3 2024, Continental reported €9.8 billion in consolidated sales, down slightly from €10.2 billion in Q3 2023 (-4.0%). Adjusted EBIT rose to €873 million, representing a 36% increase year-over-year and an adjusted EBIT margin of 8.9% (up from 6.3% in Q3 2023). Net income grew significantly to €486 million, marking a 62.8% rise from Q3 2023. Adjusted free cash flow, however, fell to €323 million, down from €466 million.
Continental CFO Olaf Schick stated, “Our Automotive sector performed as expected, achieving earnings growth through cost reductions and price adjustments amid weak automotive production. Tires also delivered strong profitability, especially with a strong start to winter tire sales. ContiTech, however, is facing extended challenges in the industrial markets of Europe and North America, and we are exploring additional steps to address this economic environment.”
Outlook for 2024
For the full year, Continental projects a decline in passenger car and light commercial vehicle production, with a slight improvement in tire-replacement demand during the second half, but expects continued weak performance in the industrial business.
Revised guidance for 2024 sales is between €39.5 billion and €42.0 billion (down from the previous €40.0 to €42.5 billion), with an adjusted EBIT margin forecast of 6.0% to 7.0%. For ContiTech, projected sales have been lowered to €6.2 billion to €6.6 billion, and the adjusted EBIT margin is now expected between 5.8% and 6.3%.
Continental’s award-winning tire performance has been recognized by leading automotive publications and organizations, with top honors going to its WinterContact TS 870 and AllSeasonContact 2 tires in recent tests. Continental continues to explore divestment options and partnerships for its ContiTech automotive products business, with discussions set for the fourth quarter.
