Latest news with #ContiTech
Mint
5 days ago
- Automotive
- Mint
Continental Cuts Margin Target Over US Tariffs Ahead of Breakup
Continental AG lowered a profitability target for the year due to rising costs from US President Donald Trump's tariffs as the German automotive supplier forges ahead with a plan to dismantle itself. Continental now sees an adjusted Ebit margin of as much as 11% for fiscal 2025, from as high as 11.5% previously, it said Tuesday ahead of an investor meeting in Frankfurt. The change reflects currency fluctuations as well as lower revenue expectations at its ContiTech industrial unit and the impact of US levies on the tires business. 'We have imports from Europe hit by tariffs since the beginning of May, and also need to consider steel and aluminum duties,' Chief Executive Officer Nikolai Setzer said during a call with reporters. 'That leads to higher production costs in the US.' Continental is tempering its earnings ambitions as it prepares to list its car parts division Aumovio in September and sell its industrial unit ContiTech next year to focus solely on tires. The plan reverses decades of acquisitions and is one of several strategic shakeups reordering Europe's automotive industry, which is contending with tariffs, intensifying competition from China and high labor and energy costs in Europe. Its peers ZF Friedrichshafen AG and Robert Bosch GmbH are cutting jobs and closing factories, while automakers including Porsche AG and its parent Volkswagen AG are reducing production capacity to deal with muted demand in their home region. Continental said Tuesday it may use proceeds from the ContiTech sale for special dividends and share buybacks, and announced new sales and profit ambitions for the combined tires and ContiTech operations. In the next three to five years, Continental sees potential for consolidated sales of as much as €22 billion and a consolidated adjusted earnings before interest and tax margin of as high as 14.5%. The most recent mid-term targets, announced in 2023, forecast that sales at the tires unit could reach €18 billion, and €9 billion at ContiTech. Those figures still included the contribution from OESL, a business that generated €1.9 billion in revenue last year and will be sold in the second half. 'The markets are weaker than what we expected back then,' Setzer said, citing slowing demand for cars and tires in Europe. 'In America we need to see how the tariffs play out.' As a smaller and more nimble manufacturer, Continental intends to grow its business selling high-performance tires while expanding in Asia and North America and leaving less promising sectors. It has already announced it's exiting agricultural tires and ending truck tire production in India. ContiTech employs almost 40,000 people globally and makes an array of rubber and plastics products. The listing of Aumovio, announced last August, followed years of struggles with high investment needs, waning demand and stiff competition. The tires business — Continental's most profitable division — generates most of its sales supplying passenger cars. This article was generated from an automated news agency feed without modifications to text.
Bloomberg
5 days ago
- Automotive
- Bloomberg
Continental Cuts Margin Target Over US Tariffs Ahead of Breakup
Continental AG lowered a profitability target for the year due to rising costs from US President Donald Trump's tariffs as the German automotive supplier forges ahead with a plan to dismantle itself. Continental now sees an adjusted Ebit margin of as much as 11% for fiscal 2025, from as high as 11.5% previously, it said Tuesday ahead of an investor meeting in Frankfurt. The change reflects currency fluctuations as well as lower revenue expectations at its ContiTech industrial unit and the impact of US levies on the tires business.
Reuters
5 days ago
- Automotive
- Reuters
Continental revises down profitability targets on trade turbulence
BERLIN, June 24 (Reuters) - German car parts supplier Continental ( opens new tab revised down profitability targets for its core tyre business and with it the broader group on Tuesday, pointing to currency effects and increasing trade barriers. The company now sees its 2025 adjusted EBIT margin for tyres in a range of 12.5 to 14%, compared with a previously forecast 13.3-14.3% range, it told investors at the group's capital markets day. The adjusted EBIT margin for the group this year is now expected to fall in a range of 10 to 11%, compared with a previously forecast 10.5-11.5% range. The new outlook takes into account current U.S. import tariffs, the company said. Continental also confirmed plans to sell its ContiTech division next year, as it works to pare back the company into a pure-play tyre maker. "Unfortunately, the reasons for our internal transformation are also increasing every day," CEO Nikolai Setzer told reporters, pointing to macroeconomic challenges for the industry and geopolitical turbulence, with tariffs weighing on its supply chain. The company is also planning a spinoff of its automotive business, under the new name Aumovio, with a planned listing in September. "We already have a date. Our preparations are taking very firm shape," CFO Olaf Schick said, adding that Aumovio would announce details in due course.
The Herald
09-06-2025
- Business
- The Herald
Effective strategies urgently needed to stem Nelson Mandela Bay jobs bloodbath
The news that Goodyear is shutting down its manufacturing plant in Gqeberha, with the concomitant loss of more than 900 jobs, is a shocker and has far-reaching implications for the workers affected and the Eastern Cape as a whole. The absolute devastation it has wrought on the lives of the hundreds of families still struggling to comprehend the grim and unexpected announcement is impossible to comprehend. It was a bolt from the blue. Just four months ago, ContiTech similarly announced it was shutting down its conveyor belt operation in Kariega, with 125 job losses. That is more than 1,000 jobs lost in the matter of a few months. And as unemployment in the province creeps up to 40%, the future of the newly jobless is bleak, with the prospects of them finding other work quickly slim. One day they had stable jobs, decent incomes and promising futures, the next, their lives were upended as they stared unemployment and an uncertain future in the face. One employee broke down in tears, saying of the Goodyear announcement: 'Do they have children? Do they have communities? Because they have f***ed up a whole community.' Another employee said he would have to move his daughter out of the school she was in to one where the monthly rate was cheaper. He had also just bought a new car last year which he was now at risk of losing. The Goodyear saga is another indication of a manufacturing sector in crisis in SA. In both cases, low-cost imports have played a big role in the closures. In May, Aspen also revealed that 134 jobs were on the line due to the closure of its eyedrops production facility in Gqeberha. VW Group Africa managing director Martina Biene hit the nail on the head on Friday when she said every business closure in the city spelt disaster. High labour costs and cheap imports are two of the factors affecting the sustainability of businesses in SA. Municipal service delivery issues, including electricity, water and sanitation challenges, and high tariffs are others. But what is the government doing to counter this and to keep the manufacturers in SA? What is being done locally to support the manufacturers here, the lifeblood of Nelson Mandela Bay? This city cannot afford any job losses, let alone such a huge number. It needs to up its game urgently and come up with strategies and effective measures to assist and retain these businesses in the Bay. The Herald
Yahoo
06-05-2025
- Automotive
- Yahoo
German car parts supplier Continental back in black in first quarter
Nikolai Setzer, Chairman of the Executive Board of Continental AG, speaks at the company's Annual Shareholders' Meeting at the Hannover Congress Centrum (HCC). Moritz Frankenberg/dpa German automotive parts maker Continental AG reported on Tuesday that it has returned to profit in the first quarter following a loss in the same quarter of the previous year, and this was in spite of a slight drop in sales. Continental updated its fiscal 2025 outlook to reflect the planned automotive group spin-off, which has been reported separately as a discontinued operation. In the first quarter, net income attributable to shareholders of the parent was €68 million ($77 million), compared to a loss of €53 million a year ago. Earnings per share were €0.34, compared to a loss of €0.27 last year. Adjusted earnings before interest and taxes (EBIT) were €639 million, with a margin of 6.6%. The company noted that the planned automotive spin-off has led to the mandatory application of international financial reporting standards (IFRS) number 5. Without the application of IFRS 5, adjusted EBIT would have been €586 million, with a 6% margin. In the prior year, adjusted EBIT was €201 million, with a margin of 2.1%. The company noted that the automotive group sector achieved significantly higher earnings year-on-year, despite declining automotive production in Europe and North America. Tyres also recorded a strong improvement in earnings in the first quarter. Consolidated sales were €9.707 billion, down 0.8% from €9.788 billion a year ago. In the first quarter of 2025, the global production of passenger cars and light commercial vehicles was slightly higher year-on-year, improving by around 1% to 21.7 million units. Continental chief executive Nikolai Setzer said, "We made a solid start to the year, significantly improving our earnings for the Continental group in the first quarter compared with 2024, and are confident that we will achieve our annual targets." Looking ahead, for fiscal 2025, for the continuing operations of tyres and ContiTech, Continental expects consolidated sales in the range of around €19.5 billion to €21 billion and an adjusted EBIT margin of around 10.5% to 11.5%. For the discontinued operations of the automotive group sector, Continental expects sales of around €18 billion to €20 billion and an adjusted EBIT margin of around 2.5% to 4%, operationally unchanged and excluding the effects of IFRS 5. The forecasts for sales and adjusted EBIT margin for the individual automotive, tyres and ContiTech group sectors remain unchanged. The company added that the outlook for the year does not take into account any potential impact resulting from possible future trade restrictions.
