TU-TESL

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Although the market continued to decline in the third quarter, Continental's operating performance remained stable. Technology company continental reported its quarterly results on November 12 in Hanover, with sales up 3% to 11.1 billion euros. Sales totaled 10.8 billion euros in the same period last year. After excluding the impact of consolidation factors and exchange rate, the growth rate of sales decreased by 0.3%, almost the same as that of the same period last year. By contrast, global passenger vehicle and light commercial vehicle production fell by about 3% over the same period. Thanks to its forward-looking product portfolio, Continental is hardly affected by a sharp decline in global demand. The adjusted operating result (adjusted EBIT) was EUR 615 million (margin: 5.6%). Dr. Elmar degenhart, chairman and CEO of continental group, said that due to the demand for our system solutions in the global market, our sales in the third quarter remained stable despite the continuous decline of the market environment. The current situation requires us to strengthen our long-term competitiveness. Through the gradual implementation of our global architecture adjustment plan 2019-2029, we will achieve this goal. It's a challenging process, but ensuring our profitability is essential. So we are actively responding to the crisis facing the automotive industry, as we were a decade ago, we will be stronger. Dr. degenhart also confirmed the annual target for the current fiscal year adjusted in July 2019. "We maintain our current financial year forecast: annual sales of approximately EUR 44 billion to EUR 45 billion and adjusted EBIT margin of approximately 7% to 7.5%." Dr. Elmar degenhart also pointed out that "based on the current transformation of the automobile market, we expect that the potential of the future travel market is huge, and the 2030 strategy of continental group will focus on the future growth area." For Continental, these areas include ancillary and, inter connected driving, travel services, business and industrial and end-user business. Continental is also adjusting vitesco technologies' powertrain business to achieve profitable growth in electric mobility. Continental on-board server helps Volkswagen ID. series electric vehicles realize interconnection (Copyright: Volkswagen Group). Continental group has strong professional knowledge in software and electronic field. One example is on-board application server (icas1), which integrates a large number of control units into a small number of high-performance computing units. With this new vehicle architecture, Continental paves the way for seamless connectivity between vehicles and the digital world of travel services and data, making wireless updates the norm for the future. Icas1 can integrate data-based applications and functions seamlessly, such as planning driving routes to optimize vehicle mileage and positioning electric vehicles. In response, Dr. Elmar degenhart said, "with the help of icas1, we have provided the core part of the new electronic server architecture. We are very honored to provide products and services for our first customer Volkswagen and its ID. series. " In addition, vitesco technologies, the driving system business of continental group, recently announced that it will provide the first highly integrated electric drive system for several mass production models of Peugeot Citroen Group and automobile. Andreas wolf, CEO of Andreas wolfvitesco technologies Andreas wolf, CEO of vitesco technologies, pointed out that in a changing market environment, vitesco technologies has the potential to lead in drive system technology. This is reflected in the fact that two leading automakers chose vitesco technologies' innovative electric shaft drive technology to power their mass production vehicles. This innovative axle drive system will be used in Peugeot e-208 and Opel corsa-e electric vehicles, as well as in the compact SUV and festa cars of the modern car Encino. With its deep expertise in electronics, sensors and actuators, vitesco technologies is one of the few suppliers able to provide high-pressure parts and system solutions. In this quarter's report, adjusted operating results (adjusted EBIT) amounted to EUR 615 million. The adjusted operating profit margin was 5.6% (7.1% in the previous year). This data includes a € 187 million warranty claim reserve released in July 2019. Adjusted EBIT for the third quarter was € 615 million, higher than the unadjusted - € 1.97 billion operating profit. The negative balance was EUR 2585 million. Net income attributable to the shareholders of the parent company also fell to - 1.99 billion euros. The previous year's figure was 626 million euros. The impairment and accrual of intangible assets announced on October 22, 2019, which are used in the current organizational structure adjustment plan, have a negative impact on the reported EBIT and net income. Wolfgang Sch ä fer, member of the Executive Board of continental group, CFO and CFO of continental group, said, "as we adjusted the expectations of the future market, this impairment is a non cash write down of goodwill generated from earlier acquisitions." Sch ä fer also noted that Continental's third quarter results remained solid, "and we have done quite well in the third quarter from an operational point of view." The global automobile industry is currently facing a sharp decline in the market environment. "Production growth has slowed significantly. It is estimated that the global automobile production will be less than 90 million this year. More than 10 million fewer vehicles than the market had expected two years ago. Similar to the expectations of other industry companies, we do not think there will be any substantial growth in global production in the next five years. Looking forward to next year, the best situation is that we expect to see a consolidation trend of global auto production in 2020. " Wolfgang Sch ä fer. However, he pointed out that the global production of passenger cars and light commercial vehicles is still very likely to decline for the third consecutive year. In the third quarter, China's passenger car and light commercial vehicle production fell by more than 5% year-on-year, while the European and North American markets were almost the same as the previous year. However, Continental forecasts that production growth in the three core markets will continue to decline in the fourth quarter. Continental expects a year-on-year drop of about 6% in global passenger vehicle and light commercial vehicle production. In the third quarter, free cash flow (excluding the impact of acquisitions but including IAS 16 lease accounting, and the impact of turning the powertrain business group into an independent legal entity) was EUR 343 million (last year: before the net outflow of funds from US pension plans was EUR 74 million). In view of the regular quarterly factors, the general fourth quarter cash inflow will be very strong, so the company expects that the sustainable free cash flow for the whole year will be between 1.2 billion euros and 1.4 billion euros, regardless of the impact of acquisition and split. Despite the decline in global car production, the group's third quarter sales rose 2.2% year-on-year. In terms of natural growth, the business performance is stable. Sales for the period totalled EUR 6.6 billion, with an adjusted EBIT margin of 1.6% (4.0% in the previous year). This includes a € 187 million warranty claim reserve released in July 2019, which is mainly from the powertrain business group. Rubber group's total sales in the third quarter were 4.6 billion euros, up 3.9% from the same period last year. Natural growth in the third quarter of 2019 was - 0.6%. The adjusted EBIT margin was 12.3%, roughly the same as the same period last year (last year: 12.5%). Wolfgang Sch ä fer said frankly: "for a long time, we have been focusing on strengthening the business of industrial and end customers, which makes us less dependent on the changing trend of the international automobile market. A typical example is that we completed the acquisition of merlett group, a professional Italian thermoplastic manufacturer, in early November. " Through this acquisition, Continental will expand the material expertise of its Tektronix business group industrial hose business. The aim is to provide more intelligent applications in the future with the help of thermoplastic materials, such as sensors. In the first nine months of 2019, Continental's capital expenditure on fixed assets, plant equipment and software amounted to EUR 2.2 billion. The capex ratio was 6.6% (last year: 5.9%). Technology company continental has a net R & D expenditure of about 2.7 billion euros, equivalent to 8% of consolidated sales. That was 7.6 per cent in the same period last year. As of September 30, 2019, net debt was approximately EUR 5.5 billion. About 200 million euros down from 5.7 billion euros at the end of the second quarter of 2019. As of the report date, the asset liability ratio to measure the degree of liabilities is 34.3%. During the reporting period, Continental's liquidity buffer was approximately EUR 5.3 billion. As of the end of the third quarter of 2019, the total number of Continental's global employees is 242, 516, a decrease of 710 compared with the end of 2018, mainly due to the adjustment made by the automobile group to cope with the decline of global automobile production. Meanwhile, the acquisition of Katherine automotive, a professional antenna manufacturer, and Cooper standard, a professional vibration system manufacturer, also affected the change in the number of employees.