DGAP-Adhoc Continental Announces Outlook for Fiscal 2021
DGAP-Ad-hoc: Continental AG / Key word(s): Forecast/Annual Results
The Executive Board of Continental AG has decided today on the following parameters for the outlook for fiscal 2021, some of which are below current average analyst expectations.
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The outlook assumes the following:
- Based on the currently foreseeable effects related to the ongoing COVID-19 pandemic as well as ongoing supply chain constraints related to semiconductor components, Continental expects that global light vehicle production in fiscal 2021 will increase by 9% to 12% versus fiscal 2020. It also assumes exchange rates throughout fiscal 2021 do not materially differ to those as at the beginning of the year.
- The outlook assumes Powertrain Technologies remains fully consolidated for the entire year. Depending on developments related to the planned spin-off of Vitesco Technologies in the second half of fiscal 2021, Continental will adjust the outlook.
The aforementioned factors result in an outlook for fiscal 2021 as follows:
- Consolidated sales are expected to be approximately €40.5 to €42.5 billion and the adjusted EBIT margin is anticipated to be in the range of approximately 5% to 6%.
- Sales in the Automotive business areas - Autonomous Mobility and Safety, Vehicle Networking and Information as well as Powertrain - is expected to be approximately €24.0 to €25.0 billion and the adjusted EBIT margin in the range of approximately 1% to 2%. This outlook considers additional logistics expenses from supply chain constraints related to semiconductor components of about €200 million as well as additional expenses for research and development of about €200 to €250 million in the business area Autonomous Mobility and Safety.
- Sales in the Rubber business areas - Tires and ContiTech - is expected to be approximately €16.5 to €17.5 billion and the adjusted EBIT margin in the range of approximately 11.5% to 12.5%. The adjusted EBIT margin range anticipates higher year-on-year raw material costs of around €200 million that will predominately affect Tires.
- Free cash flow before acquisitions and excluding carve-out effects is expected to be in the range of approximately €0.9 to €1.3 billion. This range assumes capital expenditures before financial investments of approximately 7% of consolidated sales and cash outflows of approximately 700 million Euro for the Transformation 2019-2029 structural program.
Based on preliminary key data, the key financial results of fiscal 2020 are as follows: