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Continental AG CON

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Morningstar’s Analysis

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1-Star Price

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5-Star Price

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Economic Moat

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Capital Allocation

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Continental Starts 2021 With Solid Q1 Results, Tweaks 2021 Guidance; EUR 175 FVE Unchanged

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

Narrow-moat rated Continental reported first-quarter earnings per share of EUR 2.24, beating the EUR 1.37 FactSet consensus by EUR 0.87 and EUR 0.78 higher than the EUR 1.46 reported a year ago. Consolidated revenue increased 3.5% to EUR 10.3 billion from EUR 9.9 billion last year. However, excluding currency effect, organic revenue increased 8.6%, due to vehicle electrification products in the powertrain group as well as electronic displays in the vehicle networking and information group. Continental expects the powertrain spin-off (to be called Vitesco) in September 2021. Excluding Vitesco, organic revenue underperformed global markets by roughly 2 percentage points while Vitesco outperformed by 4 percentage points.

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Company Profile

Business Description

Continental is a global auto supplier and tiremaker. Operations include chassis and safety, powertrain (Vitesco after the spin-off to shareholders), interior, tires, and ContiTech, which uses rubber in industrial and automotive components and systems. Last year, automotive group revenue was 59% of Continental's total business while the rubber group was 41% (tires 27% and ContiTech 15%). Continental's largest markets are Europe, North America, and Asia, accounting for about 48%, 25%, and 24% of 2020 revenue, respectively. The company's top five customers are Daimler, Stellantis, Ford, the Renault-Nissan-Mitsubishi alliance, and Volkswagen, representing about 37% of total revenue.

Contact
Vahrenwalder Strasse 9
Hanover, 30165, Germany
T +49 51193801
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 234,999