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Continental Expects Higher Earnings in 2023 Supported by Sustained Market Recovery [1]
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Date: 2023-03
Katja Dürrfeld, member of the Executive Board, Finance, Controlling and IT, on the occasion of the Annual Press Conference on March 8, 2023
In the past fiscal year, net income was influenced by negative special effects amounting to around €1.0 billion. Higher interest rates and other valuation-related effects, in particular, resulted in impairment losses of more than €850 million in the Automotive group sector. In connection with its business activity in Russia, Continental also impaired assets of around €87 million as a result of the sanctions imposed. Consequently, net income amounted to €67 million (2021: €1.4 billion).
Adjusted free cash flow was €200 million (2021: €1.2 billion for continuing and discontinued operations). Adjusted free cash flow was lower than the previous year due primarily to the buildup of inventories and receivables, and higher capital expenditure.
Continental Executive Board to propose dividend of €1.50 per share
“The Executive Board will propose to the Annual Shareholders’ Meeting a dividend of €1.50 per share. We took two factors into account in arriving at this figure: the negative and predominantly non-cash special effects on net income and the downward share price trend last year,” said Katja Dürrfeld, CFO of Continental. This amounts to a distribution of around €300 million, she continued.
Expectations for fiscal 2023
Continental expects global production of passenger cars and light commercial vehicles to increase by between 2 and 4 percent in 2023. In 2022, this increased by around 7 percent to approximately 82 million vehicles.
Significantly higher costs for materials, wages and salaries as well as energy and logistics – amounting to around €1.7 billion – are again expected to weigh heavily on the earnings position in fiscal 2023.
Based on these assumptions and given the exchange rates at the beginning of the fiscal year, Continental anticipates consolidated sales for 2023 of around €42 billion to €45 billion and an adjusted EBIT margin of around 5.5 to 6.5 percent.
Continental expects the Automotive group sector to generate sales of around €20.5 billion to €21.5 billion and an adjusted EBIT margin of around 2 to 3 percent.
For the Tires group sector, Continental forecasts sales of about €14.5 billion to €15.5 billion with an adjusted EBIT margin of around 12 to 13 percent.
Continental expects the ContiTech group sector will achieve sales of about €6.8 billion to €7.2 billion and an adjusted EBIT margin of around 6 to 7 percent.
Capital expenditure before financial investments is forecast to be around 6 percent of sales.
Adjustedfree cash flow is expected to be around €0.8 billion to €1.2 billion.
“We stabilized our profitability over the course of the year. In the second half of 2022 in particular, we achieved year-on-year gains and implemented and optimized many things. Nevertheless, we know that we need to continue improving if we want to meet our mid-term targets, which is why we are determined to increase our earnings,” said Katja Dürrfeld, CFO of Continental.
In the medium term, Continental is aiming to achieve a consolidated adjusted EBIT margin of around 8 to 11 percent.
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[1] Url:
https://www.continental.com/en/press/press-releases/fiscal-year-2022/
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