Continental Selling Up: Move Away from Plastics and Rubber, Forecast Adjustments Loom
Enhancements implemented by the Commission to promote advancements include multiple strategies.
Steer clear! Big tire manufacturer Continental is going through a massive transformation. The electronics division was the first to bid adieu, and now it's the plastics and rubber sector's turn to join the party. Once the sale is finalized, Continental will be reduced to a tire-focused company, based in Hannover.
Trade disagreements and shifting currency values are squeezing Continental's wallet. The company's earnings prediction for the current year is now between 10% and 11%, a contraction of half a percentage point. CFO Olaf Schick notes that the present tariffs and currency fluctuations are factored into this forecast.
Post the spin-off of the automotive electronics business under the name Aumovio, Continental anticipates a future revenue range of €19.5 to €22 billion for the company, with an adjusted earnings margin of 12% to 14.5%. The tire business, generating €14.5 to €16 billion and a margin of 13% to 16%, will dominate the scene.
The predicted revenue for the Contitech division, which oversees businesses like industrial rubber belts, is between €5 to €6 billion, along with a margin of 11% to 13%. Continental intends to offload this division next year, and the process has begun, as per CEO Nikolai Setzer. Laying the groundwork, Continental will transform into a tire-centric company for the first time in its history.
While selling the automotive rubber products business, Setzer remains coy about potential buyers, mentioning that negotiations are ongoing with interested parties. The deal is expected to materialize during the second half of the year.
Sources:
- ntv.de
- jwu/rts
Keywords:
- Continental
- DAX company
- Tariffs
- Trade conflicts
- Aut motive industry
Enrichment Data:
- Potential buyers for Continental's ContiTech division, including the rubber and industrial belt business, are predicted to be both financial and strategic investors.
- Private equity firms, or financial investors, are the prominent prospects for the sale of the automotive rubber products business.
- A wider range of strategic industrial companies and financial investors is anticipated to express interest in the purchase of the remainder of ContiTech.
- The sale of the automotive rubber products unit is scheduled for the second half of 2022, potentially with a financial investor purchasing the division.
- The broader sale of the ContiTech division is planned for 2026, contingent upon the approval of the supervisory board.
- In light of Continental's shift towards a tire-focused organization, potential financial investors are likely to show interest in acquiring their industrial rubber belt business, which falls under the ContiTech division.
- The anticipated employment policy within the Continental company might evolve significantly as they adjust their Community policy and business strategies, considering the ongoing sales in the plastics, rubber, and industrial sectors, influenced by the finance and automotive industry.
