DGAP-News: Continental AG

DGAP-News: Continental AG: Continental Raises Cash Flow Forecast for Current Fiscal Year

DGAP-News: Continental AG / Key word(s): Interim Report/Quarter Results Continental AG: Continental Raises Cash Flow Forecast for Current Fiscal Year

04.05.2016 / 08:30 The issuer is solely responsible for the content of this announcement.

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* Sales up by three percent at EUR9.85 billion after three months * Net income rises by 12 percent to EUR734 million or EUR3.67 per share * Free cash flow before acquisitions increases considerably to EUR567 million * Forecast for free cash flow before acquisitions raised to at least EUR2 billion * EBIT exceeds EUR1 billion

Hanover, May 4, 2016. After a good first quarter in fiscal 2016, the technology company Continental is raising its forecast for free cash flow before acquisitions for the year as a whole: "In the first few months of this year, we again managed to achieve a considerable increase in free cash flow before acquisitions. By the end of the year, this figure is expected to climb to at least EUR2 billion. We had previously expected a figure of at least EUR1.8 billion," said Dr. Elmar Degenhart, Continental's chairman of the Executive Board, at the presentation of the business figures for the first quarter on Wednesday.

In the first quarter of 2016, the automotive supplier, tire manufacturer, and industrial partner boosted its sales by three percent year-on-year to EUR9.85 billion. At the same time, net income attributable to the shareholders of the parent rose by 12 percent to EUR734 million. Earnings per share rose to EUR3.67 after EUR3.28 in the same period of the previous year.

As at March 31, the operating result (EBIT) had increased year-on-year by 6.4 percent to over EUR1 billion. This equates to a margin of 10.6 percent compared with 10.2 percent in 2015. Adjusted EBIT climbed by 8.4 percent year-on-year to EUR1.1 billion. At 11.3 percent, the adjusted EBIT margin was therefore 0.7 percentage points higher than the level for the first three months of 2015.

"Our strong cash flow enabled us to reduce our net indebtedness in the first quarter of this fiscal year by EUR459 million to EUR3.1 billion overall, compared to the end of 2015. The gearing ratio thus came to 23.1 percent. This means we have almost achieved our medium-term goal of getting this ratio below the 20-percent threshold," explained Chief Financial Officer Wolfgang Schäfer. Compared with the same period of the previous year, net indebtedness was even EUR1 billion less. Net indebtedness had increased in the first quarter of 2015, primarily as a result of the acquisition of Veyance Technologies. At the end of the first quarter of 2015, the gearing ratio was still at 33.5 percent.

As at March 31, 2016, Continental had a liquidity buffer of EUR5.45 billion, comprising EUR1.7 billion in cash and cash equivalents and EUR3.8 billion in committed, unutilized credit lines. The revolving credit line of EUR3 billion concluded in April 2014 (part of the syndicated loan with an originally committed total volume of EUR4.5 billion) was extended for a further year in April 2016. This financing commitment is now available to Continental until April 2021. The term loan of EUR1.5 billion included in the syndicated loan was fully repaid early by the end of March 2016.

Interest expense totaled EUR59 million in the first three months of 2016. "At EUR34 million, interest expense resulting from bank borrowings, capital market transactions, and other financing instruments was EUR14 million lower than the prior-year figure. The major portion related to expense of EUR21 million from the issued bonds," Schäfer explained. Net interest expense improved by EUR22 million year-on-year to EUR34 million in the first quarter of 2016.

In the first three months of the year, Continental invested a total of EUR398 million in property, plant and equipment, and software. The capital expenditure ratio thus amounted to 4.0 percent after 3.7 percent in the comparative period of the previous year. Continental increased its research and development expenses to fund the start of numerous projects. Compared with the first quarter of 2015, this figure went up by 11.4 percent to EUR716 million. This corresponds to a ratio of 7.3 percent of sales after 6.7 percent a year ago.

At the end of the first quarter, Continental had 212,417 employees, which is 4,500 more than at the end of 2015. This is attributable mainly to the further expansion of production capacity, sales channels, and research and development.

In the first three months of this year, the Automotive Group achieved sales of EUR6.0 billion. The adjusted EBIT margin was 7.6 percent. In the first quarter of 2016, the Rubber Group generated sales of EUR3.85 billion and increased the adjusted EBIT margin by 3.1 percentage points year-on-year to 17.8 percent.



Continental develops intelligent technologies for transporting people and their goods. As a reliable partner, the international automotive supplier, tire manufacturer, and industrial partner provides sustainable, safe, comfortable, individual, and affordable solutions. In 2015, the corporation generated sales of EUR39.2 billion with its five divisions, Chassis & Safety, Interior, Powertrain, Tires, and ContiTech. Continental currently employs more than 212,000 people in 55 countries.

Press contact ________________________________________ Vincent Charles Spokesman, Business & Finance Continental AG Phone: +49 511 938-1364 Cell: +49 173 314 50 96 E-mail: vincent.charles@conti.de Dr. Felix Gress Senior Vice President Corporate Communications Continental AG Phone: +49 511 938-1485 E-mail: felix.gress@conti.de ________________________________________

This press release is available in the following languages: Chinese, Czech, Dutch, English, French, German, Hungarian, Japanese, Korean, Portuguese (Brazil), Portuguese (Portugal), Romanian, Russian, Slovakian, Spanish ________________________________________

Press portal: www.continental-press.com

Financial reports: www.continental-ir.com Video portal: http://videoportal.continental-corporation.com ________________________________________

Media database: www.continental-mediacenter.com

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04.05.2016 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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Language: English Company: Continental AG Vahrenwalder Straße 9 30165 Hannover Germany Phone: +49 (0)511 938-1068 Fax: +49 (0)511 938-1080 E-mail: ir@conti.de Internet: www.conti.de ISIN: DE0005439004 WKN: 543900 Indices: Dax Listed: Regulated Market in Frankfurt (Prime Standard), Hamburg, Hanover, Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Munich; Terminbörse EUREX; Luxemburg, SIX End of News DGAP News Service ---------------------------------------------------------------------------

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