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Continental's profit rises in 2017 as automotive divisions drive sales growth

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Continental's profit rises in 2017 as automotive divisions drive sales growth

German automotive supplier and tire-maker Continental Aktiengesellschaft on March 8 reported a year-on-year profit increase for fiscal 2017 amid higher sales in both of its core businesses.

Net income attributable to shareholders of the parent rose to €2.98 billion, or €14.92 per share, in fiscal 2017, from €2.80 billion, or €14.01 per share, in the previous fiscal year.

Earnings before interest and tax came in at €4.56 billion, up from €4.10 billion in fiscal 2016. On an adjusted basis, EBIT increased year over year to €4.75 billion from €4.31 billion.

Sales climbed to €44.01 billion in fiscal 2017 from €40.55 billion a year earlier, driven primarily by the company's automotive group, where sales growth significantly outpaced the increase in the production of cars, station wagons and light commercial vehicles, Continental said in its annual report.

The automotive group, which consists of the chassis and safety, power-train and interior divisions, generated sales of €26.57 billion in fiscal 2017, up from €24.50 billion a year ago. Incoming orders in the group rose to a new record high of nearly €40 billion, compared to €30 billion in 2015.

Sales at the rubber group, which includes the tire division, rose to €17.49 billion from €16.10 billion in the prior year.

Continental Chairman Elmar Degenhart said he expects profit growth to continue in 2018 as he reaffirmed the company's previous guidance for the year.

Degenhart projected sales to increase by just under 7% to about €47 billion, with an adjusted EBIT margin of 10.5%, compared to 10.9% in fiscal 2017.