The industrial and automotive supplier ContiTech, part of the Continental Corporation, increased its sales by around €50 million to €3.9 billion in 2014. This equates to growth of 1.3%. The operating result (EBIT) reached €433 million (previous year: €462 million), the return on sales 11.0% (previous year: 11.9%). “We are thoroughly satisfied with this result and the continued double-digit return on sales. Particularly in light of the negative developments in certain sectors of relevance for ContiTech,” said Heinz-Gerhard Wente, head of the ContiTech division and member of the Executive Board of Continental AG, at a press conference at the Hannover Messe 2015, adding: “In evaluating this result, the fact that costs for the preparation of the integration of Veyance business have already been posted in 2014 must not be forgotten.”
“Continuing low commodity prices resulted, in particular, in a significant decline in investment in the mining industry in 2014 and had a negative impact in the Conveyor Belt Group. Here, we had to absorb a decline of €66 million alone,” said Wente. “However, we were able to offset this with increased sales in other business units. Benecke-Kaliko and the Power Transmission Group, in particular, with sales increases of €77 million and €36 million respectively, made above-average contributions toward this. The trend is indicative of ContiTech’s stability as a corporation. Our objective remains to grow faster than the markets in which we operate.” Together with American company Veyance Technologies Inc., which was acquired at the beginning of the year, ContiTech generated pro forma sales of around €5.4 billion in 2014. The share of sales outside original automotive equipment was around 54%.
Growth also had a positive effect on the number of employees: At the end of 2014, ContiTech employed 32,775 people, around 3,000 more than in the year before, half of which are based in Europe. An additional approximately 8,000 new Veyance employees joined the company on February 1 of this year. With this, around 41,000 employees now work for ContiTech worldwide, making the division the second-largest employer in the Continental Corporation after the Tire division.
EBIT adjusted for changes in the scope of consolidation and special effects was €439 million at the end of 2014 (previous year: €468 million). The adjusted EBIT margin was therefore 11.3% (previous year: 12.1%). “The lower EBIT is primarily due to increased pressure on margins in the automotive industry and the decline in conveyor belt business. However, this EBIT keeps ContiTech at a very good level,” explained Wente.
Investment increased by €25 million
In the past year, ContiTech has invested €191 million (previous year: €166 million) in new plants and locations worldwide, in research and development, and in the training of its employees. “We reinforced our presence in Asia because we want to be where our customers are,” explained Wente. “In China, we have opened a hose line plant in Hanghzou and a production facility for industrial belts in Sanmen. We have expanded production of air springs in South Korea.”We have also made investments in Germany (gas power plant in Northeim), Slovakia (production and research for vibration elements), Russia (hose line production in Kaluga), and Peru (sales office for conveyor belts in Lima).
Positive start to fiscal year 2015
According to Wente, the first quarter of 2015 got off to a positive start, even though conveyor belt business in the global mining sector remains under pressure. “The integration of Veyance is high on our agenda this year,” said Wente, who will retire at the end of April after more than 40 years at ContiTech and who introduced his successor, Hans-Jürgen Duensing, at the press conference. “We want to show our customers that they will receive even better products and product solutions as well as an even better service worldwide with the stronger ContiTech. This makes us the right partner for development,” said Duensing.
“With the acquisition of Veyance, we have reinforced our global presence and have now improved our international positioning.”