Continental radically slashes forecast
Just one month ago Continental presented its annual results. The company had assumed sales of between €42.5 and 44.5 billion for the current fiscal year; according to these estimates, the EBIT margin should be between 5.5 and 6 percent of sales.
Now that’s water under the bridge again. In view of the uncertainties about the duration of the adverse effects of the coronavirus pandemic and the associated potential further consequences for production, supply chain and demand, the company is lowering its outlook for the current fiscal year. Due to the continued strong dynamics of the development, it is currently not possible to predict when a new outlook for 2020 can be given, Continental announced.
At the same time, the automotive tech company published preliminary figures for the first quarter. Accordingly, Continental expects consolidated sales of approximately €9.4 to €9.8 billion and an adjusted EBIT margin of only 2 to 3 percent in the first three months of the fiscal year. The Automotive Technologies division and the former Powertrain division together are expected to generate sales of approximately €5.7 to €5.9 billion and an adjusted EBIT margin of only about 0%.
As a reaction to the difficult situation, a good 40 percent of Continental’s 249 production sites worldwide are currently at a temporary standstill for a few days to several weeks. At the same time, the company wants to put around 30,000 employees on short-time work with immediate effect – that is, they will work fewer hours per week or not work at all. This will affect all corporate functions – from production, research & development to administration, the company says. However, important development projects and preparations for upcoming series start-ups are to continue unabated, explained Continental CEO Elmar Degenhart
The reduction in production affects Continental’s sites in Europe and the Americas in particular. In China, the company stopped production after the outbreak of the coronavirus, but Continental has been gradually resuming production there since February.
Related articles:
Covid-19 brings car production in Europe to a halt
Corona shock: Infineon withdraws forecast for 2020 fiscal year
Coronavirus: Schaeffler suspends guidance for 2020
If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :
