German car parts supplier Continental back in black in first quarter
Nikolai Setzer, Chairman of the Executive Board of Continental AG, speaks at the company's Annual Shareholders' Meeting at the Hannover Congress Centrum (HCC). Moritz Frankenberg/dpa
German automotive parts maker Continental AG reported on Tuesday that it has returned to profit in the first quarter following a loss in the same quarter of the previous year, and this was in spite of a slight drop in sales.
Continental updated its fiscal 2025 outlook to reflect the planned automotive group spin-off, which has been reported separately as a discontinued operation.
In the first quarter, net income attributable to shareholders of the parent was €68 million ($77 million), compared to a loss of €53 million a year ago. Earnings per share were €0.34, compared to a loss of €0.27 last year.
Adjusted earnings before interest and taxes (EBIT) were €639 million, with a margin of 6.6%.
The company noted that the planned automotive spin-off has led to the mandatory application of international financial reporting standards (IFRS) number 5. Without the application of IFRS 5, adjusted EBIT would have been €586 million, with a 6% margin. In the prior year, adjusted EBIT was €201 million, with a margin of 2.1%.
The company noted that the automotive group sector achieved significantly higher earnings year-on-year, despite declining automotive production in Europe and North America.
Tyres also recorded a strong improvement in earnings in the first quarter. Consolidated sales were €9.707 billion, down 0.8% from €9.788 billion a year ago.
In the first quarter of 2025, the global production of passenger cars and light commercial vehicles was slightly higher year-on-year, improving by around 1% to 21.7 million units.
Continental chief executive Nikolai Setzer said, "We made a solid start to the year, significantly improving our earnings for the Continental group in the first quarter compared with 2024, and are confident that we will achieve our annual targets."
Looking ahead, for fiscal 2025, for the continuing operations of tyres and ContiTech, Continental expects consolidated sales in the range of around €19.5 billion to €21 billion and an adjusted EBIT margin of around 10.5% to 11.5%.
For the discontinued operations of the automotive group sector, Continental expects sales of around €18 billion to €20 billion and an adjusted EBIT margin of around 2.5% to 4%, operationally unchanged and excluding the effects of IFRS 5.
The forecasts for sales and adjusted EBIT margin for the individual automotive, tyres and ContiTech group sectors remain unchanged.
The company added that the outlook for the year does not take into account any potential impact resulting from possible future trade restrictions.
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