Group sales fell by almost 40 percent to 6.620 billion euros, as the DAX Group announced. The adjusted EBIT margin was minus 9.6 percent after Continental had reached plus 6.7 percent a year ago.
Free cash flow before acquisitions and carve-out effects amounted to minus EUR 1.782 billion, compared to minus EUR 29 million in the second quarter of 2019. The decrease is mainly due to the drop in EBIT and negative working capital effects. The latter result from the volatility of sales in the last weeks of the second quarter. Conti expects, however, that they will neutralize themselves again if the course of business continues.
As of June 30, 2020, the company had a liquidity cushion of € 10.144 billion, of which cash and cash equivalents of € 2.456 billion and committed, unused credit lines totaling € 7.689 billion.
Although Continental’s business development improved significantly in the course of the second quarter, the Group continues to consider the economic environment to be very uncertain due to the ongoing pandemic. For this reason, the company continues to forego an outlook for the 2020 financial year.
In the second quarter, business collapsed in all sectors. The Automotive Technologies division’s sales fell 45.6 percent to EUR 2.560 billion, and the adjusted EBIT margin was minus 18.1 percent. Revenue in the Rubber Technologies division fell by a third to EUR 2.962 billion, the adjusted EBIT margin was 1.2 percent. Sales in the Powertrain Technologies division fell by 40.8 percent to EUR 1.131 billion, the adjusted EBIT margin was minus 16.3 percent.
The semi-annual financial report for the 2020 financial year will be published on August 5, 2020.
FRANKFURT (Dow Jones)
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