HANNOVER, Germany (March 3, 2015) — Continental A.G. is forecasting organic growth in fiscal 2016 of 5 percent over a strong fiscal 2015 despite “only a moderate rise in global vehicle production,” Conti executives disclosed March 3.
Conti anticipates growth in the European and Chinese vehicle markets to offset weak development in Russia and Brazil, CFO Wolfgang Schaefer said.
In fiscal 2015, Conti reported 16.9-percent higher pre-tax operating profit of $6.6 billion on 13.7-percent higher sales of $43.1 billion, yielding a slight improvement in the operating ratio to 15.3 percent. Net income rose 13.1 percent to $2.97 billion.
“Continental is in great shape,” Executive Board Chairman Elmar Degenhart said. “Backed by a strong financial position, we are tackling the major challenges ahead,…which particularly include volatile markets, fluctuations in raw material prices and currency exchange rates.”
Mr. Degenhart said Conti anticipates taking advantage of opportunities arising from digital mobility concepts in a “systematic and focused manner,” concentrating on developing “our successful business model intelligently and tapping new business areas and customers in an innovative way.”
Conti's tire division reported a 14-percent gain in operating profit to $2.29 billion on 6.3-percent higher sales of $11.4 billion, raising the operating ratio nearly two full points to 20 percent.
The tire and ContiTech non-tire rubber divisions benefited from the continued weak development on the raw material markets in 2015, Conti said. Lower costs for raw materials boosted earnings for the businesses by roughly $275 million.
During fiscal 2015, Continental invested $2.4 billion in property, plant and equipment and software, while R&D expenditures rose 14.6 to nearly $2.7 billion, corresponding to 6.2 percent of sales, on par with fiscal 2015.
The executive board is proposing to increase the dividend to $4.15 per share, which corresponds to a dividend payout ratio of 27.5 percent.