Continental Aktiengesellschaft (CON.DE)
| Previous close | 128.50 |
| Open | 128.62 |
| Bid | 127.74 x 18200 |
| Ask | 127.78 x 4300 |
| Day's range | 127.32 - 128.96 |
| 52-week range | 79.04 - 132.68 |
| Volume | 21,523 |
| Avg. volume | 437,117 |
| Market cap | 25.553B |
| Beta (5Y monthly) | 1.73 |
| PE ratio (TTM) | N/A |
| EPS (TTM) | -4.03 |
| Earnings date | 05 Aug 2021 |
| Forward dividend & yield | 3.00 (2.34%) |
| Ex-dividend date | 15 Jul 2020 |
| 1y target est | 251.52 |
- Bloomberg
Carmakers Forced by Chip Crisis to Rethink Just-In-Time Ordering
(Bloomberg) -- A century after automakers showed the world the value of assembly-line manufacturing, a shortage of semiconductors is teaching the industry a painful new lesson in what it takes to build a car.For most of its history, the industry has relied on a distinct approach to buying car parts, procuring components from suppliers right at the moment they’re needed. It’s referred to as just-in-time manufacturing and is designed to streamline production and eliminate the costs of keeping warehouses stocked with parts waiting to be used.But the shortcomings of that system were made starkly clear this year as the automakers confronted a dearth of the chips they need to build advanced functions into their vehicles, and found themselves near the bottom of chipmakers’ customer lists because of their just-in-time approach. That shortage is threatening to cut $110 billion in sales from the industry, and forcing auto manufacturers to overhaul the way they get the electronic components that have become critical to contemporary car design.“Customers need to change,” said Hassane El-Khoury, chief executive officer of ON Semiconductor Corp., which gets more than a third of its revenue from the automotive market. “That just-in-time mindset doesn’t work.”Semiconductor makers are demanding guaranteed, long-term orders rather than the short-term flexibility the carmakers are used to. The chipmakers’ assertiveness, even under pressure from lawmakers, underscores the rebalancing of power from the companies whose logos are on the cars to those that provide the advanced technology that runs them.As these components play a bigger role in everything from in-car entertainment to self-driving functions, chip manufacturers say they’re willing to invest in expanding production to head off a repeat of shortages that have forced the industry to mothball factories and furlough workers -- if the carmakers give them orders that can’t be canceled and commit to long-term agreements.“Why would I have invested a single dollar when my customer can cancel within 30 days and it takes me two years to build capacity?” ON Semiconductor’s El-Khoury said.There are signs the industry is listening. Last week, Ford Motor Co. Chief Executive Officer Jim Farley indicated a new willingness to reverse decades of outsourcing for parts.“As the industry changes, we have to in-source now, just like we in-sourced powertrains in the ’20s and ’30s,” said Farley, who has shut down half his factories and seen his dealers’ lots emptying because of a dearth of chips.Most components used by the auto industry are part of a discrete food chain, and carmakers are at the top, able to orchestrate their suppliers’ actions in a system that delivers them a set of components that can be put together quickly and cheaply into a finished vehicle. Electronics makers, who’ve fared much better in the chip supply crunch, regard semiconductors as essential systems, and they work directly with chipmakers to secure products and often design their devices around the chips themselves.Automakers can no longer “assume the dominance of an 800-pound gorilla” in negotiations with chip companies and battery makers, said Mark Wakefield, head of the auto practice at consultancy AlixParters.Pioneered by Toyota Motor Corp. in the 1960s, just-in-time is a system where components suppliers are required to turn up with whatever the carmakers want at the last possible moment in a process that pares costs to the very minimum.That strategy has served the industry well, saving money and helping it organize a system for sourcing the 40,000 or so components that go into a modern vehicle, many of which can be made in a matter of days. But semiconductors -- the heart of sensors, engine management and battery controllers, infotainment and eventually systems that will pilot vehicles -- are created in a process that takes months. And building and equipping a factory to produce them requires years.Today’s cars contain an average of 1,400 semiconductors -- and that puts the chipmakers at an advantage. Ford’s Farley said he’s now negotiating contracts directly with chipmakers -- bypassing his traditional auto suppliers -- while building up inventory of the precious pieces and even redesigning models to accommodate the semiconductor companies.“We have learned a lot through this crisis that can be applied to many critical components,” Farley told analysts last month as he announced Ford would lose half its production in the second quarter and take a $2.5 billion hit to earnings this year, citing a lack of chips. “We’re also thinking about what this means for the world of batteries and silicon and all sorts of other components that are really mission critical for our company.”Ford is not alone in seeking solutions that upend long-time industry practices. Automakers from General Motors Co. to Volkswagen AG to Tesla Inc. are looking for ways to get closer to the chipmaking process, which could include forming partnerships with semiconductor companies, bringing chipmaking in-house and even building their own foundries. Nothing is off the table.“Cars are only going to get more technical and they’re going to need more chips,” said Sam Fiorani, vice president of vehicle forecasting at consultant AutoForecast Solutions. “All of the vehicle manufacturers are looking at every possible scenario for getting it solved for the long-term.”But according to some chipmakers, the auto industry has embraced new technology but failed to understand those that supply it.“There is a huge difference between manufacturing a car and manufacturing a chip,” said Kurt Sievers, CEO of NXP Semiconductor NV, the biggest maker of auto chips. “We’ve been working for years closely with the auto OEMs directly when it comes to R&D and innovation -- however, not at all for supply chain and volume forecasting.”Sievers said the chip industry wants specific forecasts that stretch out in years and binding commitments to buy chips that last that long. The way automakers, referred to as original equipment manufacturers or OEMs, and semiconductor vendors work together needs to change, he said.And the car companies have little choice but to do so. Consumers are increasingly choosing vehicles based on functions such as connectivity, entertainment and advanced automated safety features. The auto industry is steadily shifting away from gasoline to battery power. All of that requires more chips.“It’s no longer this subsystem that no one cares about,” said Victor Peng, CEO of Xilinx Inc. a chipmaker whose products are uses in advanced driver-assistance systems. “The electronics is really going to shape the customer experience.”The semiconductor industry has plenty of other orders to fill. In 2020 automakers bought almost $40 billion worth of chips, little changed from the prior year, even amid the crash of the pandemic. By comparison, the computer industry bought 17% more chips than it did in 2019, for a total of $160 billion. Phone makers, meantime, provided the chip industry with $137 billion in revenue, a jump of 12%.Earlier this year, automakers lobbied U.S. lawmakers to intervene to help them with the shortage, arguing that chipmakers were unfairly prioritizing customers building less important consumer electronics over cars. The automakers argue their industry creates more than 7 million jobs in America and is critical to national security. And they’ve found a sympathetic ear in President Joe Biden, who was supported by the United Auto Workers in the 2020 election, and is working to help the auto industry navigate the chip crisis.Still, consumer electronics buys $20 billion more chips a year than the auto industry, and Big Tech has plenty of clout in Washington, too.Chipmakers are also in no hurry to add new factories to meet this year’s chip rush. Though 2020 was a good year and 2021 is shaping up to be even better, they don’t have to look back very far to be reminded of the difficulties of matching supply with short-term fluctuations in demand. In 2019 industry sales shrank 12% as customers slashed orders to work through stockpiles.Many investors and analysts are already concerned that what now looks like insatiable demand is customers double-ordering: asking for twice the amount they need so they can at least get the number they want. In the past, such heavy ordering has proved to foreshadow industry gluts, with demand eventually easing and buyers tapping the brakes as they worked down accumulated inventory.“We came out of 2018 guns blazing, everybody hoarded, and then 2019 was an awful year of demand because they already had chips,” said ON Semiconductor’s El Khoury. “Here we are today with people looking at us and asking, ‘why haven’t you invested?’”The type of chip automakers want also works against them. Much of what they use -- things such as sensors and power regulators -- can be made on what’s called lagging nodes, or production technology that hasn’t been state-of-the-art for years. While that makes it cheaper, chipmakers are reluctant to expand capacity of technology that’s closer to being obsolete.“The chips that the automotive industry uses are older than the ones you’d find in your cell phones or in your video games,” said AutoForecast Solutions’ Fiorani. “That makes them less of a priority to the companies that produce them.”Fiorani said carmakers would be better served forming joint ventures with chipmakers to tap their expertise and lock down a dependable source of supply. But doing that would involve going around traditional suppliers such as Continental AG and Robert Bosch AG and turning back the clock to a more expensive time when companies like Ford had to deal with suppliers for raw materials.Some auto suppliers are already taking steps to make sure they don’t get cut out. Parts supplier Robert Bosch is opening a new chip factory in Dresden that it says is the first of its kind dedicated to manufacturing semiconductors for automotive uses. Still, some automakers are already talking openly about cutting out those middlemen in order to keep up with the speed of change.“We will be the one who has the commercial relationship with the chipmaker,” Volvo Cars CEO Hakan Samuelsson said at a mobility conference in Tel Aviv this month. “When we want a change and you have to talk to suppliers, it is too slow.”Ford’s Farley said he’s consulted with tech companies and discovered how common it is in other industries to keep “buffer stock” and to buy directly from chip manufacturers.“Even if the company still buys the components with chips on them from a supplier, they still negotiated a direct deal,” he told analysts, describing something that’s common practice for companies like Apple Inc. Ford learned that nine of its tier-one component suppliers rely on just one Renesas Electronics Corp. factory in Japan for chips, a plant that suffered a fire, he said.Some automakers have made rapid progress in understanding their newer suppliers and are negotiating long-term deals. Others are sticking to the belief that they can dictate how their suppliers should act, according to ON Semiconductor’s El-Khoudry.Learning from their current difficulties is the key to turning around the current crisis and avoiding the next, according to Xilinx’s Peng. Toyota, the inventor of just-in-time, said it expects to return to pre-pandemic levels of profitability as soon as this year, helped by factories that continue to churn out vehicles because the company made the decision to accumulate stockpiles of chips.“People have to think differently or they’re going to be left behind,” Peng said.More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
- EQS Group
First Quarter: Continental Achieves Good Result, Confirming its Course for the Future
DGAP-News: Continental AG / Key word(s): Quarterly / Interim Statement/Quarter Results06.05.2021 / 08:30 The issuer is solely responsible for the content of this announcement.- Consolidated sales of €10.3 billion (Q1 2020: €9.9 billion, +3.5 percent); organic growth of 8.6 percent- Adjusted EBIT of €834 million (Q1 2020: €433 million, +92.5 percent)- Adjusted EBIT margin of 8.1 percent (Q1 2020: 4.4 percent)- Net income of €448 million, (Q1 2020: €292 million, up €156 million year-on-year)- Free cash flow before acquisitions, divestments and carve-out effects: €670 million (Q1 2020: -€148 million, up €818 million)- Realignment of the Automotive Technologies group sector- Spin-off of Vitesco Technologies planned for September 2021- Order volume for high-performance computers rises to around €5 billion- CEO Nikolai Setzer: "We are making noticeable progress and tackling the tasks at hand systematically. From an operational perspective, we have made a good start to the fiscal year."- Outlook for fiscal 2021 without Vitesco Technologies: consolidated sales of around €32.5 billion to €34.5 billion; adjusted EBIT margin of around 6 to 7 percentHanover, May 6, 2021. Continental achieved a good result in the first quarter of 2021 in a persistently challenging market environment. At the same time, the mobility supplier pushed ahead with the implementation of its realigned strategy by making a number of key decisions. "We are making noticeable progress and tackling the tasks at hand systematically. With the latest resolutions, the spin-off of Vitesco Technologies this year draws nearer as planned, and from January 1, 2022, we will manage the two areas of "Autonomous Mobility" and "Safety" as independent business areas. This will give us clarity while providing more freedom to define the separate and diverse strategies. We are focusing systematically on growth and pioneering future technologies when it comes to assisted, automated and autonomous driving. And we are focusing on value when it comes to safety," said Nikolai Setzer, Continental CEO, when presenting the company's quarterly results on Thursday in Hanover.In view of the adverse effects of the coronavirus pandemic and the resulting tight global supply situation for semiconductors, Setzer was satisfied with the quarterly result: "From an operational perspective, we have made a good start to the fiscal year." The development of the business in China was particularly positive compared with the same quarter of the previous year, which was severely affected by the coronavirus pandemic. The tire business and the ContiTech business area stood out in particular.Overall, consolidated sales in the first three months of the year amounted to €10.3 billion (Q1 2020: €9.9 billion, +3.5 percent). Before changes in the scope of consolidation and exchange rate effects, sales rose by 8.6 percent. Adjusted EBIT increased year-on-year to €834 million (Q1 2020: €433 million, +92.5 percent), resulting in an adjusted EBIT margin of 8.1 percent (Q1 2020: 4.4 percent). Net income totaled €448 million (Q1 2020: €292 million). In the first quarter, free cash flow before acquisitions, divestments and carve-out effects was €670 million (Q1 2020: -€148 million). The improvement in free cash flow was due in particular to the low level of capital expenditure before financial investments, which accounted for 2.8 percent of sales in the first quarter.With regard to further business development, Setzer underlined the difficult market environment: "The coming months will remain very challenging. The global economy is only gradually getting back on track, not least due to the supply shortages of electronic components. Other factors include high market volatility due to the coronavirus pandemic and the increase in the prices of raw materials. In particular, the European car market, which is very important for us, is still well below its record level of 2017. Furthermore, the market has not yet returned to its pre-coronavirus levelof 2019."Strong regional differences in growthIn the first three months of the year, the development of automotive markets varied substantially throughout the world. The market development of passenger cars and light commercial vehicles in China was very strong (5.7 million units, +78.2 percent year-on-year). North America had a relatively weak start to the year compared to 2020 (3.6 million units, -4.5 percent year-on-year). In Europe, production of passenger cars and light commercial vehicles was on par with the low level of the previous year (4.6 million units, -0.3 percent year-on-year; 1.0 million units of which were in Germany, -9.0 percent year-on-year). According to preliminary figures, global production of passenger cars and light commercial vehicles grew by 14.0 percent year-on-year in the first quarter to a total of 20.3 million units (Q1 2020: 17.8 million units). Production in the first quarter was thus substantially lower than in the first quarter of 2019, when 22.9 million vehicles were produced.Market outlook and forecast for fiscal 2021For the current fiscal year, Continental continues to expect production of passenger cars and light commercial vehicles to increase by 9 to 12 percent year-on-year.Continental is adjusting its outlook for the current fiscal year mainly due to the anticipated spin-off of Vitesco Technologies. For the continuing operations, and thus excluding Vitesco Technologies, the company expects sales of €32.5 billion to €34.5 billion and an adjusted EBIT margin of 6 to 7 percent for 2021.For the continuing operations of Automotive Technologies, Continental expects sales of around €16 billion to €17 billion for the year as a whole. An adjusted EBIT margin in the range of around 1 to 2 percent is anticipated. This still includes higher supply chain costs as well as the additional expenses for research and development announced on March 9, 2021, in the Autonomous Mobility and Safety business area.Sales in the Rubber Technologies group sector are still forecast to total about €16.5 billion to €17.5 billion, with an adjusted EBIT margin of around 11.5 to 12.5 percent. This includes the impact expected from higher raw material costs.Taking into account the effects of the anticipated spin-off of Vitesco Technologies, Continental expects free cash flow before acquisitions, divestments and carve-out effects of around €1.1 billion to €1.5 billion from continuing operations. The increase is due in particular to the postponement of cash utilizations from restructuring provisions. For fiscal 2021, Continental continues to expect a capital expenditure ratio before financial investmentsof around 7 percent of sales for the continuing operations.Spin-off of Vitesco Technologies scheduled for September 2021Despite the challenging macroeconomic environment, Continental is systematically pursuing its strategic realignment. An important step in this direction is the full spin-off including stock market listing of its powertrain business. "Now that we have the approval of the Annual Shareholders' Meeting, we will proceed with the planned spin-off in September 2021," explained Wolfgang Schäfer, Continental's CFO.Key figures for the Continental Group (continuing operations and discontinued operations) January 1 to March 31 € million 2021 2020 Δ in % Sales 10,258.9 9,912.7 3.5 EBITDA 1,403.0 1,160.4 20.9 in % of sales 13.7 11.7 EBIT 719.9 436.3 65.0 in % of sales 7.0 4.4 Research and development expenses (net) 819.3 913.0 -10.3 in % of sales 8.0 9.2 Capital expenditure1 291.5 475.0 -38.6 in % of sales 2.8 4.8 Net income attributable to the shareholders of the parent 447.6 292.3 53.1 Basic earnings per share in € 2.24 1.46 53.1 Diluted earnings per share in € 2.24 1.46 53.1 Adjusted sales2 10,258.8 9,840.3 4.3 Adjusted operating result (adjusted EBIT)3 833.8 433.2 92.5 in % of adjusted sales 8.1 4.4 Free cash flow 637.6 10.4 6,030.8 Net indebtedness as at March 31 3,561.7 3,995.6 -10.9 Gearing ratio in % 25.6 25.8 Number of employees as at March 314 234,999 239,649 -1.9 The figures for the comparative period have been adjusted due to the change in the accounting policy for revenue recognition for subsidiaries in China. This change was announced in the second quarter of 2020. 1 Capital expenditure on property, plant and equipment, and software.2 Before changes in the scope of consolidation.3 Before amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special effects. 4 Excluding trainees.Development of the group sectorsSales in the Automotive Technologies group sector were down in the first quarter by 2.2 percent to €4.1 billion (Q1 2020: €4.2 billion). The adjusted EBIT margin rose to 4.5 percent (Q1 2020: 1.9 percent). Organic growth came to 3.4 percent. Strong business in China made a major contribution to this positive development. Furthermore, the volume of orders for fully connected central high-performance computers rose to a total of around €5 billion. These computers form a crucial link between the vehicle and the digital world. They are already being installed by Volkswagen in the ID.3 and ID.4 as well as in the ID.6 in China, and also in other models that are based on the modular e-drive system. Other car manufacturers such as Hyundai are also using Continental's high-performance computers in volume production, and the mobility supplier has already received a first volume order in the truck sector. In order to further strengthen the field of assisted and automated driving, Continental signed a memorandum of understanding in April to found a joint venture with Horizon Robotics. With a focus on the Chinese market, this will involve, for example, integrating the artificial intelligence processors and algorithms from Horizon Robotics into the cameras and central computers from Continental.In the Rubber Technologies group sector, the Tires business area performed well at the beginning of the year, particularly in China and North America. In the first quarter, the ContiTech business area benefited from the recovery in global vehicle production, especially in China, and from stable industrial business. In the first quarter of 2021 in total, the Rubber Technologies group sector achieved sales of €4.2 billion (Q1 2020: €4.0 billion, +6.6 percent) and an adjusted EBIT margin of 14.5 percent (Q1 2020: 9.6 percent). Organic sales growth came to 11.7 percent.In the first quarter, the Powertrain Technologies group sector achieved sales of €2.0 billion (Q1 2020: €1.8 billion, +9.3 percent) and an adjusted EBIT margin of 3.8 percent (Q1 2020: 0.7 percent). Organic growth came to 12.8 percent. The group sector continued to profit from steady growth in the electrification market. For example, it landed a large order with a sales volume worth hundreds of millions of euros for an innovative high-voltage component - an 800-volt inverter featuring silicon carbide technology.Key figures for the group sectors (continuing operations and discontinued operations) January 1 to March 31 Automotive Technologies in € millions 2021 2020 Δ in % Sales 4,086.9 4,180.4 -2.2 EBITDA 400.6 426.9 -6.2 in % of sales 9.8 10.2 EBIT 139.6 150.7 -7.4 in % of sales 3.4 3.6 Capital expenditure1 142.2 193.6 -26.5 in % of sales 3.5 4.6 Number of employees as at March 312 94,288 97,735 -3.5 Adjusted sales3 4,086.9 4,111.6 -0.6 Adjusted operating result (adjusted EBIT)4 182.5 76.3 139.2 in % of adjusted sales 4.5 1.9 January 1 to March 31 Rubber Technologies in € millions 2021 2020 Δ in % Sales 4,235.4 3,971.7 6.6 EBITDA 868.3 651.0 33.4 in % of sales 20.5 16.4 EBIT 583.2 346.4 68.4 in % of sales 13.8 8.7 Capital expenditure1 90.0 164.2 -45.2 in % of sales 2.1 4.1 Number of employees as at March 312 100,448 101,620 -1.2 Adjusted sales3 4,235.3 3,968.1 6.7 Adjusted operating result (adjusted EBIT)4 614.8 381.2 61.3 in % of adjusted sales 14.5 9.6 The figures for the comparative period have been adjusted due to the change in the accounting policy for revenue recognition for subsidiaries in China. This change was announced in the second quarter of 2020.1 Capital expenditure on property, plant and equipment, and software.2 Excluding trainees.3 Before changes in the scope of consolidation.4 Before amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special effects. January 1 to March 31 Powertrain Technologies in € millions 2021 2020 Δ in % Sales 1,998.2 1,829.0 9.3 EBITDA 172.5 116.5 48.1 in % of sales 8.6 6.4 EBIT 37.3 -22.9 262.9 in % of sales 1.9 -1.3 Capital expenditure1 47.8 104.2 -54.1 in % of sales 2.4 5.7 Number of employees as at March 312 39,810 39,844 -0.1 Adjusted sales3 1,998.2 1,829.0 9.3 Adjusted operating result (adjusted EBIT)4 76.6 11.9 543.7 in % of adjusted sales 3.8 0.7 1 Capital expenditure on property, plant and equipment, and software.2 Excluding trainees.3 Before changes in the scope of consolidation.4 Before amortization of intangible assets from purchase price allocation (PPA), changes in the scope of consolidation, and special effects.Continental develops pioneering technologies and services for sustainable and connected mobility of people and their goods. Founded in 1871, the technology company offers safe, efficient, intelligent and affordable solutions for vehicles, machines, traffic and transportation. In 2020, Continental generated sales of €37.7 billion and currently employs around 235,000 people in 58 countries and markets. In 2021, the company celebrates its 150th anniversary.Press contact Marc SiedlerSpokesman, Business & FinanceContinentalPhone: +49 511 938-1278Cell: +49 151 24506041E-mail: marc.siedler@conti.deVincent CharlesHead of Media RelationsContinentalPhone: +49 511 938-1364Cell: +49 173 3145096E-mail: vincent.charles@conti.dePress portal: www.continental-press.comMedia center: www.continental.com/media-centerTwitter: @conti_press06.05.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de Language: English Company: Continental AG Vahrenwalder Straße 9 30165 Hannover Germany Phone: +49 (0)511 938-1068 Fax: +49 (0)511 938-1080 E-mail: ir@conti.de Internet: www.continental-corporation.com/de ISIN: DE0005439004 WKN: 543900 Indices: DAX Listed: Regulated Market in Frankfurt (Prime Standard), Hamburg, Hanover, Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Tradegate Exchange; Luxembourg Stock Exchange, SIX EQS News ID: 1193129 End of News DGAP News Service
- EQS Group
Continental announces preliminary key data for the first quarter of 2021
Continental AG / Key word(s): Preliminary Results/Quarter ResultsContinental announces preliminary key data for the first quarter of 2021 23-Apr-2021 / 12:20 CET/CESTDisclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.The financial results of Continental AG in the first quarter of fiscal 2021 are above current average analyst expectations. Based on preliminary data, key financial results of the first quarter of fiscal 2021 are as follows: Consolidated sales of the Continental Group were €10.259 billion (Q1 2020: €9.913 billion) and the adjusted EBIT margin was 8.1%. Due to the intended spin-off of Powertrain Technologies, IFRS 5 Non-current Assets Held for Sale and Discontinued Operations has been applied. Due to this application, depreciation ceased for discontinued operations starting March 16, 2021. Without this application, the adjusted EBIT margin would have been 7.9% (Q1 2020: 4.4%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was 8.6%. Sales in Automotive Technologies were €4.087 billion (Q1 2020: €4.180 billion) and the adjusted EBIT margin was 4.5% (Q1 2020: 1.9%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was 3.4%. Sales in Rubber Technologies were €4.235 billion (Q1 2020: €3.972 billion) and the adjusted EBIT margin was 14.5% (Q1 2020: 9.6%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was 11.7%. Sales in Powertrain Technologies were €1.998 billion (Q1 2020: €1.829 billion) and the adjusted EBIT margin was 3.8%. Due to the intended spin-off of Powertrain Technologies, IFRS 5 Non-current Assets Held for Sale and Discontinued Operations has been applied to this group sector. Due to this application, depreciation ceased for this group sector starting March 16, 2021. Without this application, the adjusted EBIT margin would have been 2.9% (Q1 2020: 0.7%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was 12.8%. Free cash flow before acquisitions and carve-out effects for the Continental Group amounted to €670 million (Q1 2020: €87 million). This figure benefitted from a lower value for capital expenditures before financial investments of 2.8% of sales in the first quarter. For fiscal 2021, Continental continues to expect that capital expenditures before financial investments will be around 7% of sales.Continental continues to experience numerous challenges in its business activities, including the ongoing COVID-19 pandemic, the continued shortage of semiconductors, increasing costs for raw materials, constraints related to logistics as well as uncertainty and volatility in customer demand. In addition, the planned increase in research and development expenses in the Autonomous Mobility and Safety business area will have a greater effect in subsequent quarters. Due to the aforementioned factors, the outlook for fiscal 2021 remains unchanged to those described in the 2020 Annual Report.The quarterly statement for the first quarter of fiscal 2021 will be released on May 6, 2021."Adjusted EBIT" is defined in the Glossary of Financial Terms on page 42 of the 2020 Annual Report, which is available at www.continental-ir.com.Contact:Person making the notification: Bernard Wang, Head of IR23-Apr-2021 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de Language: English Company: Continental AG Vahrenwalder Straße 9 30165 Hannover Germany Phone: +49 (0)511 938-1068 Fax: +49 (0)511 938-1080 E-mail: ir@conti.de Internet: www.continental-corporation.com/de ISIN: DE0005439004 WKN: 543900 Indices: DAX Listed: Regulated Market in Frankfurt (Prime Standard), Hamburg, Hanover, Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Tradegate Exchange; Luxembourg Stock Exchange, SIX EQS News ID: 1187967 End of Announcement DGAP News Service
