The auto supplier Conti benefited from the economic recovery in China in the summer. The Hanoverians earn money in day-to-day business. However, the costs for special effects and the corporate restructuring push the company deep into the red.
The ailing auto supplier Continental earned money again in the summer in day-to-day business. For the third quarter, the Dax group from Hanover reported an operating result adjusted for special effects of 832 million euros – after 612 million euros in the previous year. The reason for this was the market recovery, especially in China. Including costs for the corporate restructuring, plant closings and the associated downsizing, however, there was an operating loss of 673 million euros. In the same period of the previous year, high depreciation had already resulted in a loss of almost two billion euros.
"We did remarkably well operationally in the third quarter," said Conti boss Elmar Degenhart with satisfaction in the announcement. "The measures we took immediately after the outbreak of the coronavirus pandemic took full effect."
For the year as a whole, Conti announced an adjusted operating profit. However, further restructuring costs and write-offs of an as yet unknown amount were incurred in the final quarter, said Conti. These would have a significant impact on the operating result and the group result attributable to the shareholders. Because the group is feeling the consequences of the second corona wave in its plants. "At some locations in Europe and America we are losing entire shifts due to higher numbers of infections because employees go into quarantine," said CFO Wolfgang Schäfer. As a result, the work flow is sometimes complex to design. "But it works. The works run so that we can bring out the appropriate amount."
Lower sales for the year as a whole
For the year as a whole, the company is expecting significantly lower sales and a significant decline in margins. Sales should be around 37.5 billion euros, it said. Last year the company had turned over 44.5 billion euros. The adjusted operating margin should reach around 3 percent in 2020 after 7.4 percent in the previous year. The reason for this is the burdens from the corona pandemic on the automotive industry with ongoing high investments in electromobility and digitization.
The outlook, however, is subject to the proviso, according to Conti, that exchange rates will not change significantly in the fourth quarter and that there will be no new, unexpected effects of the pandemic on production, the supply chain and customer needs.
Conti had already presented preliminary key figures for the third quarter at the end of October. Accordingly, group sales fell by a good 7 percent to 10.3 billion euros. The adjusted EBIT margin improved to 8.1 from 5.6 percent.
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