AutoBeta(AutoBeta.net)03/11 Report--

Affected by the epidemic of COVID-19 in 2020, the global automobile market has been obviously affected. Although the epidemic has been brought under control to some extent, many car companies have been in trouble because of the shortage of semiconductors in 2021. Continental Group, a 150-year-old auto parts giant, has also issued a warning.

According to the official financial report of Continental Group for fiscal year 2020, the group's turnover in 2020 reached 37.7 billion euros (about 292.375 billion yuan), but due to the impact of the epidemic, revenue in 2020 declined compared with the previous year, down 15.2 percent to 6.8 billion euros (about 52.736 billion yuan).

Financial data show that in fiscal year 2020, Continental Group's operating profit was a loss of 718 million euros (about 5.568 billion yuan), while its net profit was a loss of 962 million euros (about 7.461 billion yuan), which also left the company with losses for two consecutive years.

Continental said that the decline in operating profit and net profit this year was mainly affected by sales. Affected by the epidemic, revenue from the group's rubber and powertrain divisions declined, with global sales of passenger cars and truck tires down 13.2% compared with the same period last year; at the same time, production of passenger vehicles and light commercial vehicles fell 16% compared with the previous year.

Mr. Nikolai Setzer, CEO of Continental Group, said that despite the sales and profit challenges posed by the market environment, Continental Group achieved a stable positive free cash flow in 2020, with an adjusted profit margin of 3.5% before interest and tax in fiscal year 2019 and 7.3% in 2019. Excluding the impact of acquisitions and spin-offs, free cash flow decreased by 200 million euros to 11 euros compared with 2019.

In response, Continental also made a decision: "due to a net profit loss of 962 million euros (about 7.461 billion yuan), the group's executive board decided to propose at this year's shareholders' meeting to suspend the dividend for fiscal year 2020."

Continental also said that although the impact of the semiconductor shortage is expected to continue to affect the whole of 2021, the company is still expected to return to profit this year and return to profit.

The group expects sales targets of 40.5 billion to 42.5 billion euros in 2021, up from 37.7 billion euros in 2020. Among them, the total sales of the Automotive Technology Sub-Group and the front powertrain business group are about 24 billion euros to 25 billion euros, and the sales of the Rubber Technology Sub-Group are about 16.5 billion euros to 17.5 billion euros. In 2021, production of passenger cars and light commercial vehicles will rise by 9% and 12% compared with the same period last year.

With the gradual development of the global automobile market towards intelligence, Continental Group has made a transformation strategy, which will focus more on various growth areas and future technologies in the future, and strive to achieve profitable growth above the average level of the market.

Mr. Setzer said: "the adjusted strategy will point the way to success, and we will continue to work hard to achieve our goals. For example, in the future business growth area of advanced driver assistance systems and autopilot systems, we are integrating all the necessary resources and continuing our efforts. We plan to invest an additional 200 million to 250 million euros in 2021 alone, "he said.

Despite a drop in revenue in 2020, Continental's R & D spending was the same as the previous year, at 3.4 billion euros in 2019, according to the results. Due to the sharp decline in sales, the proportion of R & D spending has increased to 9%, compared with 7.6% in the same period last year.

According to the data, Continental Group has become the second largest parts supplier in the world after Bosch, founded in Hanover, Germany in 1871, and it is also the fourth largest tire manufacturer in the world, after Bridgestone, Michelin and Goodyear. Its business covers braking systems, powertrain and chassis systems and spare parts, instrumentation, infotainment systems, automotive electronics, tires and industrial rubber products. The Group has five business divisions of chassis and safety, powertrain, body electronics, ContiTech and tires, which are committed to improving driving safety and global environmental protection. It is worth mentioning that 2021 marks the 150th anniversary of the founding of the Continental Group.

At the end of the year severely affected by the epidemic in 2020, the auto market still faces many challenges in 2021. However, from the mainland Group's results, we can also see that although the market is very difficult this year, car companies still have considerable expectations for this year, even though the "lack of core" is the biggest problem facing car companies at present.

The China Federation of passengers also said recently that as the equipment Department of the Ministry of Industry and Information Technology and domestic electronics enterprises comprehensively promote countermeasures to alleviate the chip problem, as extremely mature technologies for automotive chips, the supply of new capacity will be gradually released, coupled with the gradual recovery of blocked chip production capacity in the domestic market, car market sales should not be greatly affected by the shortage of chips.

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