HANOVER — Continental A.G. has reported a strong rebound in second quarter sales and earnings (adjusted EBIT), buoyed by the positive performance of its rubber and tire segment.
Second quarter sales in the Rubber Technologies group, which includes the tires business and industrial components manufacturer ContiTech, was up 46% year-on-year at $5.2 billion, Conti announced Aug. 5. For the first half, sales rose 23% to $10.2 billion.
Segment earnings (EBITDA) grew two-fold to $1.1 billion during the second quarter. For the first half, earnings were up more than 88% at $2.1 billion.
Second quarter earnings for the tire business was up nearly 200% at $856 million, on 50% higher sales of $3.4 billion.
For the first half, the tires business reported a 90% rise in earnings on 28% higher sales of $6.6 billion.
ContiTech, the German group's industrial arm, saw second quarter earnings increase increase 250% to $208 million, as sales were up 40% at $1.8 billion.
For the first half, the business area reported 72% rise in earnings to $468 million, as sales increased 16% to $3.6 billion.
Based on the strong performance, Conti now expects sales in the Rubber Technologies group to come in around $20.4 billion to $21.1 billion, compared to previous estimates of $19.5 billion to $20.7 billion.
The group has also raised adjusted EBIT margin guidance to 12.5% to 13.0% from the previous estimate of 11.5% to 12.5%.
The raised outlook, Conti said, includes the impact expected from higher raw material costs of around $592 million, which mainly relates to synthetic and natural rubber.
Group consolidated sales totaled $11.7 billion in the second quarter of 2021, up nearly 50% from $7.8 billion reported in 2020. Adjusted EBIT increased to $842 million, up $1.5 billion from the negative $752 million reported in the second quarter of 2020.
"After an already subdued start to the year, the ongoing shortage of semiconductors severely slowed automotive production in the second quarter, as expected," CEO Nikolai Setzer said.
The chip bottleneck and rising raw material prices, he warned, are set to weigh on the automotive industry throughout 2021.
However, the group continued to build on the positive performance of the first quarter in the Rubber Technologies sector.
"Despite the increasing challenges posed by rising raw material prices, we had a strong first half of the year overall," Mr. Setzer said about the rubber segment's performance.