Continental reports stronger second-quarter results

Hanover, Germany — Continental reported stronger second-quarter results, driven by higher sales of premium tires, favorable raw-material prices, lower tariff and currency impacts, and continued cost controls.

The Tires business posted an adjusted EBIT margin of 15.3%, exceeding the company’s full-year guidance, while ContiTech delivered a solid performance despite weak market conditions. Adjusted free cash flow improved to €216 million, compared with negative €46 million a year earlier.

Second-quarter sales fell 9.1% to €4.4 billion, largely due to the sale of the Original Equipment Solutions business in February. Organic sales were essentially flat. Adjusted operating profit rose 35.1% to €570 million, and the adjusted EBIT margin increased to 12.9% from 9.6%.

Continental said replacement-tire demand in North America and global vehicle production both declined during the quarter.

The company also advanced its strategic overhaul by signing an agreement in July to sell ContiTech to Lone Star Funds. ContiTech will now be reported as a discontinued operation as Continental completes its transition to a pure-play tire manufacturer.

Continental expects full-year sales from continuing operations of €13.2 billion to €14.2 billion and an adjusted EBIT margin of 12% to 13.5%. Adjusted free cash flow is projected to range from €700 million to €1.1 billion.