At today’s Capital Market Day in Hanover, Continental announced its strategy for increasing value creation. To achieve its mid-term targets, the company will adopt a package of cost-reduction measures. It thus aims to achieve a consolidated adjusted EBIT margin of around 8 to 11 percent in the next two to three years and then improve within this range. The company has also sharpened its sales expectations. In the short term (two to three years), Continental aims to achieve total sales of around €44 billion to €48 billion. In the medium term (three to five years), it expects total sales to be around €51 billion to €56 billion (outlook for 2023: around €41 billion to €43 billion). It will also carve out parts of the business and carry out further portfolio reviews. Furthermore, the DAX-listed company is increasing the corridor for dividend distributions to around 20 to 40 percent of net income (previously: around 15 to 30 percent).
In the Automotive group sector, Continental will step up its focus on value-creating business areas with high growth. In doing so, the group sector will prepare for the User Experience business area to become organizationally independent. This step will open up new strategic options for the displays and HMI controls business. The technology company is also reviewing measures for further business activities within Automotive that are expected to contribute around €1.4 billion to consolidated sales this fiscal year.
In the Tires group sector, Continental will continue to rely on stable earnings and operational excellence. Sustainability, electric mobility and digital tire services will also create various opportunities for further profitable growth. In its ContiTech group sector, Continental will focus on reliable profitability thanks to material solutions made from rubber and plastics. At the same time, the company will strengthen its strategic focus on the group sector’s industrial business with the aim of increasing its share of ContiTech’s sales from currently around 55 percent to 80 percent.
“Our strategy aims to increase our value creation. This will allow us to continue to develop into the mobility and material technology group for safe, smart and sustainable solutions,” said Continental CEO Nikolai Setzer on Monday in Hanover, adding: “There are good reasons to invest in Continental. We have a clear strategy to achieve our mid-term targets. We will invest specifically in those areas with value creation upside and expand our technology position wherever this gives us an edge over the competition. Our three group sectors make up a balanced and resilient portfolio, which we and our highly effective and efficient team will manage flexibly, proactively and with foresight.”
