ContiTech, an international industrial and automotive supplier, increased its 2015 sales to around EUR5.4 billion that translates to a 37% growth for the company. In the beginning of 2015, ContiTech acquired Veyance Technologies Inc. which has contributed roughly EUR1.15 billion to the total sales in 2015. This signifies organic growth of 4%. At a press conference held at Hannover Messe 2016, Hans-Jürgen Duensing, member of the Executive Board of Continental responsible for the ContiTech division explains, “We are very satisfied with this result. The currently strong automotive industry in addition to positive performances in some industrial sectors have provided us with momentum. This is enabling us to cushion the continuing decline in mining- and oil-dependent business, which accounts for roughly 18% of our sales at present. This demonstrates yet again that our broad portfolio puts us in a strategically strong position.”
Duensing explained the downward trend in these sectors and emphasised at the same time that around 51% of sales were generated by the growing automotive industry that largely offset any fluctuations, saying, “2015 was a challenging year, especially for our mining customers. The sector is still experiencing economic difficulties as commodity prices remain extremely low, which has prompted it to cut its capital expenditure by more than half over the past few years. In the third quarter of 2015, this was accompanied by a significant deterioration in the oil industry.” He said, “We made a positive start to fiscal 2016, but are still expecting a challenging environment for the current year. We are working consistently and with a heavy emphasis on the objective of improving our return on sales. The restructuring measures we introduced are expected to strengthen our earnings situation in this respect.”
In 2015, ContiTech achieved EBIT of EUR171 million (previous year: EUR433 million), the return on sales amounted to 3.2% (previous year: 11.0%). Before amortisation of intangible assets from purchase price allocation (PPA) as well as special effects, earnings for fiscal 2015 came to EUR388 million. This corresponds to 7.2% of sales.
Also, the acquisition of Veyance resulted to an increase in the number of employees compared with the previous year. ContiTech employed 42,648 people at the end of 2015, nearly 10,000 more than just a year ago. Around 8,000 Veyance employees joined the company in February 2015 alone.
ContiTech invested EUR245 million in new plants and production expansions worldwide as well as in cost-cutting measures in the past year (previous year: EUR191 million). The capital expenditure ratio of 4.6% in 2015 was slightly lower than the previous year’s figure of 4.8%. “We have again reinforced our presence in Asia and North America to be where our customers are and thus meet the growing demand in these regions,” according toDuensing.
ContiTech invested predominantly in China, building a second plant for environmentally friendly automotive interior surfaces in Changzhou in 2015. In Changshu, the first compounding centre was opened for supplying compounds locally and the production of hose applications in Hungary was expanded. ContiTech also expanded its production capacity for air spring systems in Mexico and laid the foundations for a new conveyor belt factory in Morocco. But the company also focused on Germany, putting into operation a new printing machine at the Hannover-Vinnhorst location and a blow-moulding facility in Waltershausen.
Source: Continental