Continental AG Reports Lower-Than-Expected Financial Results for Q1 2024

Continental AG disclosed its preliminary financial figures for the first quarter of 2024, indicating lower than forecasted results in several key areas, as per the recent announcement. The company's overall consolidated sales reached approximately €9.8 billion, falling short of the anticipated €10.0 billion. The adjusted EBIT margin also lagged expectations at 2.0%, compared to the consensus of 3.7%.

Specifically, the Automotive group sector saw sales of around €4.8 billion, marginally below the expected €4.9 billion, and an adjusted EBIT margin of -4.3%, significantly underperforming against a -1.8% forecast. This underperformance was attributed to reduced volumes in Europe and North America, ongoing contract negotiations, and various market challenges.

The Tires group also reported a slight decrease with sales at about €3.3 billion and an adjusted EBIT margin of 11.7%, both under the consensus forecasts. Challenges in this sector included fewer working days in March and negative currency impacts. Meanwhile, the ContiTech segment posted sales of €1.6 billion and an adjusted EBIT margin of 5.4%, also below expectations, amidst continuous weak industry demand.

Adjusted free cash flow was reported at -€1.1 billion, worsened by a significant financial outlay of approximately €500 million for the reacquisition of ContiTech AG shares.

Nevertheless, Continental AG remains optimistic about improving conditions across its various sectors and has reaffirmed its fiscal 2024 guidance issued earlier in March. Detailed quarterly results will be announced on May 8, 2024.