HANOVER, Germany — Continental AG had a weak start to 2024, but the company is optimistic about the rest of the year, including expecting increased demand for tires in the months ahead.
"We are pursuing our goals resolutely and sustainably. We are on track with the implementation of our measures to achieve our mid-term targets. And in 2024 we will be taking a another step forward. The first quarter will be our weakest this year," said CEO Nikolai Setzer, noting that Conti expects growth across all three group sectors — automotive, tire and ContiTech.
Continental's tire group had sales of sales of $3.48 billion during the first quarter ended March 31, down 5% from the same period last year. Tire earnings EBITDA dropped to $619.9 million, down 13.6% year-over-year, Continental reported.
The adjusted EBIT margin was 11.7%, down on the first quarter of the previous year when it was 13.4%.
"The main reasons were weak tire markets in the truck and original equipment business, negative exchange-rate effects and fewer workdays in March," Continental reported. "This, in turn, shifted the tire-replacement business to April, which already appears to be a considerably stronger month for earnings."
Overall, Conti reported consolidated sales of $10.66 billion in Q1, down 5% from the same period last year, with adjusted EBIT of $213.2 million, down 65.8% from Q1 2023.The first quarter saw an adjusted EBIT margin of 2%, down from 5.6% in Q1 2023. Net income in Q1 was negative $57.6 million, down 114% from the same period of last year.
"Despite the weak first quarter, we see sufficient potential for improvement across all group sectors, which is why we are confirming our outlook for fiscal 2024," Setzer said.
Conti projects that 2024 tire segment sales will be between $15.2 billion and $16.3 billion.
