Continental presents new strategy to reduce costs, open “new strategic options”
Continental announced its new strategy to achieve its mid-term targets. The company will adopt a package of cost-reduction measures and it aims to achieve a consolidated adjusted EBIT margin of around 8 to 11 percent in the next two to three years and then improve within this range.
In the short term (two to three years), Continental aims to achieve total sales of around €44 billion to €48 billion. In the medium term (three to five years), it expects total sales to be around €51 billion to €56 billion (outlook for 2023: around €41 billion to €43 billion).
In the Automotive group sector, Continental will step up its focus on value-creating business areas with high growth. In doing so, the group sector will prepare for the User Experience business area to become organizationally independent. The company is also reviewing measures for further business activities within Automotive that are expected to contribute around €1.4 billion to consolidated sales this fiscal year.
“Our strategy aims to increase our value creation. This will allow us to continue to develop into the mobility and material technology group for safe, smart and sustainable solutions,” said Continental CEO Nikolai Setzer on Monday in Hanover, adding: “There are good reasons to invest in Continental. We have a clear strategy to achieve our mid-term targets. We will invest specifically in those areas with value creation upside and expand our technology position wherever this gives us an edge over the competition. Our three group sectors make up a balanced and resilient portfolio, which we and our highly effective and efficient team will manage flexibly, proactively and with foresight.”
Referring to the company’s development over the past few years, Setzer added: “After a long period of success, we have more recently had to face many challenges, and our results have not always met our expectations. At the same time, however, this extremely challenging time has also made us more robust. We are therefore entering this next phase of increased value creation in a strong position.”