DGAP-Ad-hoc: Continental AG / Key word(s): Profit Warning/Change in Forecast
Due to the ongoing COVID-19 pandemic, the restrictions put in place by authorities as well as shutdowns and other actions taken by customers and suppliers in response to the pandemic, Continental AG is experiencing material changes and disruptions in a significant portion of its business. Given the uncertainty around the duration of the disruptions, as well as the difficulty in gauging possible further consequences on production, the supply chain and demand, the Executive Board of Continental AG has decided to withdraw the outlook for fiscal 2020 as described in the 2019 Annual Report. With the situation remaining very dynamic for the foreseeable future, the timing for a new outlook cannot be determined at this time.
The impacts are felt particularly in the Automotive divisions as well as the Tires division. Over 40 percent of Continental's production locations worldwide have temporarily ceased activities.
In response to these challenges, the Company is implementing numerous measures to adapt costs and reduce demands on liquidity. This includes actions to adjust working times as well as wage and salary costs. Specifically in Germany, as of April 1, 2020, approximately 30 thousand employees (around half of the local workforce) are registered for short-time work. In addition, Continental is carrying out further measures to reduce costs and optimize working capital and to postpone investments. These and other actions will be adjusted as appropriate.
The aforementioned situation has already considerably impacted the expected financial results of the first quarter of fiscal 2020. Based on the most recent preliminary key data, Continental AG expects consolidated sales of around €9.4 to €9.8 billion for the first quarter and an adjusted EBIT margin of around 2% to 3%. In the Automotive divisions, sales are expected to be around €5.7 to €5.9 billion and the adjusted EBIT margin is expected to be around 0%. In the Rubber divisions, sales are expected to be around €3.7 to €3.9 billion and the adjusted EBIT margin is expected to be around 7% to 8%.
As at February 29, 2020, the Company had cash and cash equivalents of around €2.3 billion and committed unused credit lines of around €4.6 billion. This includes Continental's €4.0 billion syndicated revolving credit line with a term until December 2024. In terms of bonds outstanding, a bond with a volume of €750 million will mature in September 2020 and another bond with a volume of €200 million will mature in April 2021. All remaining bonds with a total volume of €1.2 billion will mature in or after September 2023. Neither the credit lines nor other financial indebtedness are subject to financial covenants or rating triggers.
01-Apr-2020 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
|Vahrenwalder Straße 9|
|Phone:||+49 (0)511 938-1068|
|Fax:||+49 (0)511 938-1080|
|Listed:||Regulated Market in Frankfurt (Prime Standard), Hamburg, Hanover, Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Tradegate Exchange; Luxembourg Stock Exchange, SIX|
|EQS News ID:||1012439|
|End of Announcement||DGAP News Service|
1012439 01-Apr-2020 CET/CEST