Continental AG says revenue may increase by percent in 2011

Article by Christian Andrei, on January 18, 2011

German supplier Continental AG said revenue may increase by as much as 10 percent in 2011 after it surpassed sales and earnings goals for 2010. Continental said in a statement that in 2010, revenue exceeded EUR25.5 billion ($33 billion).

That beat the company's EUR25 billion forecast in November 2010. Earnings before interest, taxes and one-time gains or costs amounted to around 9.5 percent of sales. At the Detroit Auto Show, CEO Elmar Degenhart said the company has proven in the past that it can grow faster than the market.

A 5 percent to 10 percent sales increase is realistic based on global light-vehicle sales projections for a "very good 2011."

Growth in emerging economies like Brazil and China and a rebounding U.S. market are helping Continental generate cash as it pays off debt that amounted to EUR7.6 billion as of Dec. 31, 2010.

In November 2010, the company said that net income in 2010 would be held back by a 50 percent tax rate and rising raw-material prices. Degenhart said the company is set to report detailed figures for 2010 in March 2011.

He added that worldwide light vehicle sales will perhaps grow by 6 percent to 7 percent and the company is cautious about the second half of 2011 because of risks stemming from European sovereign debt.

With an adjusted Ebit margin of 5.8 percent, Continental had a net loss in 2009 of EUR1.65 billion on sales of EUR20.1 billion.

Topics: continental

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