Continental net income grew by 15.9 percent to €2.1 billionStaff writer ▼ | November 9, 2015
Continental confirmed its sales forecast for 2015 and raised the annual forecast again when it released the business figures for the first nine months of the year.
Continental EBIT increased by 30.6 percent year-on-year
At the same time, net income attributable to the shareholders of the parent grew by 15.9 percent to €2.1 billion. Accordingly, earnings per share rose to €10.42 after €8.99 in the same period of the previous year.
As at September 30, 2015, EBIT increased by 30.6 percent year-on-year to €3.2 billion. This equates to an EBIT margin of 10.9 percent after 9.6 percent in the previous year. Adjusted EBIT climbed by 15.6 percent compared to the same period of 2014 to €3.4 billion. The adjusted EBIT margin was 12.0 percent after 11.4 percent in the previous year.
Free cash flow before acquisitions saw a significant year-on-year increase of €473 million to more than €1.5 billion. “Despite cash outflows totaling €1.2 billion for acquisitions, primarily those of Veyance Technologies and Elektrobit Automotive, free cash flow amounted to €316 million after the first nine months of 2015,” emphasized CFO Wolfgang Schäfer.
As at September 30, 2015, the Continental Corporation’s net indebtedness amounted to €4.3 billion. This represented a year-on-year increase of €370 million.
Compared to the end of 2014, net indebtedness was up €1.5 billion, chiefly due to the acquisition of Veyance Technologies at the end of January 2015 and the acquisition of Elektrobit Automotive at the start of July 2015. However, the gearing ratio of 33.9 percent at the end of September 2015 was lower than the previous year’s figure of 36.2 percent.
At the end of the third quarter of 2015, Continental had liquidity reserves totaling €5 billion, comprising €1.8 billion in cash and cash equivalents and €3.2 billion in committed, unutilized credit lines. Compared to the first half of 2015, this represents a €1.4 billion decline in liquidity.
“The main reasons for this were the early redemption of the U.S. dollar bond in mid-September and the acquisition of Elektrobit Automotive in early July 2015,” Schäfer explained.
Interest expense decreased by €31 million year-on-year to €260 million. At €217 million, net interest expense in the first nine months of 2015 was almost the same as in the previous year.
In the first nine months of 2015, Continental invested €1.3 billion in property, plant and equipment, and software. The capital expenditure ratio thus amounted to 4.5 percent after 5.1 percent in the same period of the previous year.
Research and development expenses rose by 16.6 percent year-on-year to €1.9 billion as at September 30, 2015, corresponding to 6.5 percent of sales after 6.4 percent in the same period of the previous year. ■