German firm Continental Corporation has set new records last year, against the back of a difficult market environment, achieving a profit of EUR1.9 billion and 7.3% higher sales to EUR32.7 billion and EUR25 billion in incoming orders. The firm says this success is set to continue in 2013 and despite muted market prospects, the international automotive supplier is aiming to boost sales 5% to more than EUR34 billion this year.
CFO Wolfgang Schäfer noted that Continental had had an unusually strong free cash flow in 2012: “At more than EUR1.6 billion, free cash flow was significantly higher than we had anticipated. This is the result of solid net earnings and successful efforts to reduce our working capital ratio relative to sales. Comparatively quiet business in December was likewise of help here, translating into fewer customer receivables for that month. In addition, more customer receivables than expected were reduced in that same month,” explained Schäfer. “Operating receivables declined by around EUR360 million against the previous year. Working capital was down by over EUR560 million. In the current year we hope to generate a free cash flow of more than EUR700 million.”
The number of employees also reflects the company’s positive performance. The workforce increased by 5,850 to around 170,000 as of the end of 2012. At significantly more than EUR1.7 billion, expenses for research and development were again roughly 10% higher than the previous year’s figure. The firm spent nearly 8% of sales on research and development in the automotive segment alone.