Continental AG Business Report FY2009
Business Highlights
Financial Overview |
(in million euros) |
| FY2009 | FY2008 | Rate of change(%) |
Factors | |
| Overall | ||||
| Sales | 20,095.7 | 24,238.7 | (17.1) | - |
| EBIT | (1,040.4) | (296.2) | - | |
| Chassis & Safety | ||||
| Sales | 4,373.6 | 5,134.0 | (14.8) | 1) |
| EBIT | (102.5) | 303.1 | - | |
| Powertrain | ||||
| Sales | 3,399.2 | 4,040.0 | (15.9) | 2) |
| EBIT | (943.2) | (1,046.2) | - | |
| Interior | ||||
| Sales | 4,362.7 | 5,856.7 | (25.5) | 3) |
| EBIT | (516.0) | (462.6) | - | |
| Passenger and Light Truck Tires | ||||
| Sales | 4,696.4 | 5,100.3 | (7.9) | 4) |
| EBIT | 536.4 | 626.4 | (14.4) | |
| Commercial Vehicle Tires | ||||
| Sales | 1,065.6 | 1,404.2 | (24.1) | 5) |
| EBIT | (50.1) | 29.5 | - | |
| ContiTech | ||||
| Sales | 2,406.1 | 3,007.0 | (20.0) | 6) |
| EBIT | 169.4 | 329.1 | (48.5) | |
Factors
1)
Chassis & Safety Division
-Before changes in the scope of consolidation and exchange rate effects, sales decreased by 15.4%, due primarily to significant production declines in North America and Europe.
| Sales by Unit | (in million units) |
| Business Unit | FY2009 | Rate of Change (%) |
| Electronic Brake Systems business unit | 12.7 | (11.8) |
| Hydraulic Brake Systems business unit | ||
| -Brake boosters | 11.9 | (8.3) |
| -Brake calipers | 24.9 | (17.7) |
| Passive Safety & Advanced Driver Assistance Systems business unit | ||
| -Air bag control units | 11.5 | (11.4) |
| -Driver assistance systems | 0.6 | 99.0 |
2)
Powertrain Division
-Before changes in the scope of consolidation and exchange rate effects, sales decreased by 10.8%, primarily as a result of volume declines.
-In the first half of 2009, the economic situation, especially in Europe and North America, led to sales volumes 20% to 40% below the levels in the first half of 2008.
-In North America, the situation was aggravated further by the production stop at Chrysler in May and June. The Engine Systems business unit was hit hardest by the severe slump in North America.
3)
Interior Division
-Before changes in the scope of consolidation and exchange rate effects, sales dropped by 23.1%, primarily as a result of reductions in global production of cars and commercial vehicles.
| Sales by Unit | (in million units) |
| Business Unit | FY2009 | Rate of Change (%) |
| Body & Security business unit | ||
| -Access control systems and body electronics | 47.5 | (17.7) |
| Instrumentation & Driver HMI business unit | ||
| -Instrument clusters | 14.7 | (9.2) |
| Commercial Vehicles & Aftermarket business unit | ||
| -Digital tachographs | 0.2 | (53.8) |
| Infotainment and Connectivity business unit | ||
| -Multimedia systems and wireless connectivity | 4.8 | (3.4) |
4)
Passenger & Light Truck Tires Division
-Before changes in the scope of consolidation and exchange rate effects, sales decreased by 7.2%.
-Global sales volumes in the original equipment sector fell significantly compared with 2008, with volume decreases in NAFTA being greater than in Europe in line with declines in vehicle production.
5)
Commercial Vehicle Tires Division
-Before changes in the scope of consolidation and exchange rate effects, sales dropped by 23.4%.
-The global economic crisis with its extreme market downturns in all regions pushed sales volumes below the previous year's level. In the Americas region, sales volumes for the original equipment business remained well below the previous year's level.
6)
ContiTech Division
-Before changes in the scope of consolidation and exchange rate effects, sales dropped by 17.8%, primarily as a result of volume decreases. With a 23.1% drop in sales, the automotive OE operations in particular contributed to this decline.
Takeover Offer by Schaeffler
-In Jan. 2009, the Schaeffler Group has concluded the takeover of the Company and paid 75 euros per share to those shareholders who tendered their shares to Schaeffler. The Schaeffler Group now holds 49.90 percent of the voting stock of the Company as the largest shareholder. (From a press release on Jan. 8, 2009)
Contracts
-Followings are major contracts from a press release in 2009.
| Maker/ Model | Products |
| Volkswagen Golf | Timing belt "CONTI(R) Diesel Runner" |
| Ford Focus RS | Sports tire "ContiSportContact 3" |
| Freightliner Business Class(R) M2 |
Tire |
| Porsche Panamera | Tire "ContiSportContact 3", Air-spring suspension with adjustable spring rate, Complex control, Instrumentation, Comfort function control unit, Polyamide torque damper |
| Proton | Body electronics unit (in-vehicle electronic control unit (ECUs)) |
| Geely Automobile | Body electronics unit (in-vehicle electronic control unit (ECUs)) |
| BMW 1 Series | Tire "ContiWinterContact TS810S" |
| BMW M3 | Tire "ContiWinterContact TS810S" |
| BMW 5 Series Gran Turismo 550i |
Plastic polyamide transmission cross beam |
| MINI | Tire "ContiWinterContact TS810S" |
| Daimler Mercedes E-Class | Airbag, Brake, Chassis component, Adaptive Highbeam Assist (optional), Electronic control |
| Daimler Mercedes AMG | Ultra High Performance (UHP) tire"ContiSportContact 5 P" |
| Audi | Ultra High Performance (UHP) tire"ContiSportContact 5 P" |
Recent Developments outside Germany
Asia-The Company is set to enhance operations in Asia, including local production of next generation electronic brake systems in a bid to expand sales. The Company's sales in Japan and other markets in Asia for the term ending December 2009 are projected to decline about 30 percent from the previous year due to sluggish new car sales. An executive responsible for the Asian operations predicts the market will recover to a level of 2008 in Asia as a whole in 2010, and in Japan in 2011 respectively. Along with this forecast, the Company is accelerating introduction of new compact and high-performance products. Local production of the new type of brake system will start in Japan in 2012, and is expected to follow in other countries. (From an article in the Nikkan Jidosha Shimbun on Oct. 6, 2009)
<Japan>
-The Company will strengthen its marketing activities for its environmental and safety technologies including hybrid systems and driving control units, targeting Japanese automakers. In the area of hybrid units, the Company is ready to make full use of it is capability to develop a total electric system including secondary batteries, in order to absorb the needs of Japanese companies, which are working on expanding their hybrid lineups for the next generation. Focus of the drive control technology is set on the Company's new, compact electronic stability control (ESC) system, which can be installed on a wide range of vehicles. The Company aims to win ESC programs from Japanese companies, including manufacturers of mini vehicles, so as to develop a firmer business structure. (From an article in the Nikkan Jidosha Shimbun on Mar. 26, 2009)
-The Company will increase production of EBS (electronic braking systems) to be used for ABS (anti-lock braking systems) and ESC (electronic stability control) in Japan. Production at its Hamakita Location, Shizuoka Pref., will be raised by 40 to 50% over the next five years from current annual production volume of 1.8 to 2 million units. The Company plans to begin production of its newly developed EBS in 2012. It will reinforce production operations in order to be prepared for the future demand expansion since sales growth of the current EBS models are also expected in Japan and other Asian markets. (From an article in the Nikkan Jidosha Shimbun on Dec. 11, 2009)
<China>
-In Apr. 2009, the Company opened a new Automotive Tech Center in Jiading Industrial Zone, Shanghai, China.
>>>See R&D for more details
Europe
<Hungary>
-The Company has opened the new test track for the anti-lock braking system (ABS) and the electronic stability control (ESC) at its Veszprem site in Hungary.
>>>See R&D for more details
Acquisitions
-ContiTech AG has acquired 100% shares of Phoenix Yule Ltd - its belts joint venture in India. Prior to the deal, ContiTech held a 74% stake whereas the Indian company Andrew Yule & Co. Ltd had a 26% interest in the entity. (From a press release on Nov. 3, 2009)
Joint Ventures
-The Company announced that it has entered into an agreement with Nisshinbo Holdings Inc., its Japanese partner, to expand operations of their joint venture company Continental Automotive Corporation (CAC) in Japan. Three divisions of the Continental Automotive Group, including airbag control units and automotive sensors, as well as plants in China and Korea will be integrated into CAC by March 2010. This will allow CAC to function as a chassis and safety system supplier, and develop a structure that is capable of global supply. Integration of operations is expected to increase sales of CAC by 50 percent. (From an article in the Nikkan Jidosha Shimbun on Dec. 18, 2009)
Restructuring
-The Company expects that its European tire plants will face overcapacities of about 15 million passenger and roughly 1.7 million commercial vehicle tires in 2009. Consequently, the Company will take actions for necessary adjustments in Europe. In the commercial vehicle tire segment, the production at the Hanover plant, Germany, will be discontinued as of December 31, 2009. And the production at the plant in Puchov, Slovakia, will be reduced by 20%. These moves will result in lowering commercial vehicle tire production in Europe by 27 percent. Also, the plant in Clairoix, France is due to end passenger tire production after April 1, 2010, which aims to reduce yearly passenger and light truck tire production capacity by 8 million units. (From a press release on Mar. 9, 2009)
-The Company has reached a fundamental agreement with the French trade union representatives and the French government in regard to the planned closure of its passenger car tire plant in Clairoix, France. The plant will be shut down by December 31, 2009. (From a press release on Jun. 6, 2009)
R&D
R&D Expenditure by Divisions |
(in million euros) |
| FY2009 | FY2008 | FY2007 | |
| Chassis & Safety | 380.8 | 423.6 | 347.5 |
| Powertrain | 328.8 | 420.1 | 144.9 |
| Interior | 434.7 | 432.5 | 131.5 |
| Passenger and Light Truck Tires | 113.5 | 119.5 | 110.5 |
| Commercial Vehicle Tires | 40.5 | 43.4 | 43.6 |
| ContiTech | 58.0 | 59.1 | 56.8 |
| Total | 1,356.3 | 1,498.2 | 834.8 |
R&D Facilities
-The Company has opened a new Automotive Tech Center in Jiading Industrial Zone, Shanghai, China. The facility will engage in the development of technologies offered through the Chassis & Safety and Powertrain Divisions. The engineering activities cover electronic brake systems, hydraulic brake systems, and engine management systems. About 200 engineers will work at this location by 2011. (From a press release on Apr 3, 2009)R&D Activities
-The Automotive Group of the Company announced its technological strategy for reducing automobiles' CO2 emission. It has selected four major themes: engine downsizing by using the supercharger and direct fuel injection, electric-powered onboard units including drivetrains, a fuel-efficient driving support system using steering control and car navigation data and a weight reduction method for brake systems. Continental Automotive plans to provide automakers with methods to decrease environmental burden through synergistic effects of the results in these themes in an aim to win larger orders.(From an article in the Nikkan Jidosha Shimbun on Aug. 3, 2009)-The Company has opened its new Asia Headquarters and R&D Center in Shanghai's Yangpu district, China. Currently around 700 employees from the Automotive Group of the Company has been relocated to this facility and by early 2010 it will house roughly 900 employees. It functions as a technical center for the design and development of vehicle electronics. (From a press release on Nov. 18, 2009)
-The Company has opened the new test track for the anti-lock braking system (ABS) and the electronic stability control (ESC) at its Veszprem site in Hungary. The test track consists of high friction, low friction and rough road test sections; altogether, it is over one kilometer long. The Hungarian location manufactures wheelspeed sensors and sensor clusters as components for ABS and ESC. The site's development center mainly engaged in software development. (From a press release on Nov. 17, 2009)
Technological Alliance
-The Company, BMW Forschung und Technik GmbH, Daimler AG, Infineon Technologies AG and Robert Bosch GmbH have formed the "Radar on Chip for Cars"(RoCC) technology cooperation project. The companies are engaged in joint research with the aim to make radar sensor systems available in all vehicle classes. Short-range automotive radar sensors in use today use ultra-wide band technology at 24GHz. This frequency, however, is licensed in Europe only up until 2013. In the RoCC project, the five companies will work together to develop radar sensor systems in the frequency range of 76-81GHz for both long-range systems (covering distance of up to 250 meters) and short-range systems (covering distances between 5 centimeters and 20 meters). The three-year project has a budget of more than 17 million euros, supported by a financial grant of 8.3 million euros from the German Federal Ministry of Education and Research (BMBF). (From a press release on May 28, 2009)-The Company signed a strategic partnership with Hyundai Mobis. Based on the agreement, the two companies will form a cooperative framework to jointly develop new technology and products in the fields of "electric"and "electronics" for vehicles. In addition, the companies will build a cooperative sales network for conducting sales activities. (From a press release on Jun. 5, 2009)
Product Development by Divisions
CONTI(R) Diesel Runner-The ContiTech Power Transmission Group has developed timing belts for lifetime use in common-rail engines. The CONTI(R) Diesel Runner is used as standard in the diesel engine of the new Volkswagen Golf. This belt has already clocked more than 180,000km on the VW-own engine test bench and thus demonstrated that it can last for an entire engine life. (From a press release on Feb. 10, 2009)
AutoLinQ (TM)
-The Company introduced AutoLinQ (TM), in-vehicle infotainment solution. This solution will enable drivers and passengers to download content from the web. (From a press release on Jun. 2, 2009)
Electronic Stability Control (ESC) sensor cluster
-The Company has developed the world's first Electronic Stability Control (ESC) sensor cluster with yaw rate and acceleration sensors. The new sensor improves the performance of safety systems such as Adaptive Cruise Control, Active Front Steering and Intelligent Headlamp Control. The cluster will go into series production with several vehicle manufacturers at the beginning of 2010. (From a press release on July 23, 2009)
Light control unit for LED headlight
-The Company has developed a light control unit for LED headlight. The new device is capable of centrally governing all light functions. Production start-up is scheduled for 2011 when two European manufacturers are to introduce the technology into their production. (From a press release on Aug. 11, 2009)
Mid-range radar system
-The Company has developed a 24 GHz mid-range radar system intended for the Adaptive Cruise Control (ACC) and Forward Collision Alert (FCA) functions. This move is in line with the Company's strategy of making driver assistance systems available to smaller vehicle categories. This new technology will go into series production in 2011. (From a press release on Aug 26, 2009)
Crash Impact Sound Sensing
-The Company has developed Crash Impact Sound Sensing (CISS) technology for airbag system, which is now in series production. When a vehicle collides with an obstacle, CISS can detect both the accident and its severity from the structure-borne sound caused by impact. Consequently, the airbags can be triggered more quickly even in serious accidents. According to the severity of the accident, the technology takes the decision as to whether the airbags should be activated or not. (From a press release on Sep. 2, 2009)
Main drive components for the electric vehicles
-The Company is producing the main drive components for the electric vehicles of a car manufacturer, which should be available in large numbers on the Europe market from the start of 2011. The Powertrain Division is developing and producing the complete electrical drive train, including the control systems. The core components are the energy storage unit (i.e. the battery), the power electronics and the electric motor. The technology to be used for the power electronics is already second generation, taking up some 30 percent less space than its predecessor and making it significantly easier to install in the vehicle; it is also less expensive to produce. The Company is supplying a so-called externally excited synchronous machine as the electric motor in the package together with the speed-transforming transmission and engine management system. This type of motor offers a broad power bandwidth and high efficiency, resulting in fuel consumption benefits in realistic driving cycles which include both urban and inter-city journeys; it also has safety advantages. Motors with outputs of 60 kW (90 bhp) and 120 kW (163 bhp) are currently under development. (From a press release on Sep. 14, 2009)
Mini Speed Sensor
-The Chassis & Safety Division of the Company has started series production of its Mini Speed Sensor - the latest generation of its wheelspeed sensors. The sensors provide braking systems, transmission control units and the electric power steering with data about driving conditions. The distinctive feature of this device is that all its functional components, such as Anisotropic Magneto Resistance (AMR) bridge, Application Specific Integrated Circuit (ASIC) and magnet have been integrated within a housing measuring 3.2mm in diameter. (From a press release on October 22, 2009)
Systems for the electric vehicles
-The Company is stepping up activities to develop sophisticated systems for installation in electric vehicles. The Company has embarked on development of a new display system combining information about the remaining amount of electric energy stored in the batteries and locations of charging facilities. It has recently started testing of the system on the public roads in the Tokyo Metropolitan area with the aim of putting the system on the market in 2010 when automakers are launching their electric vehicles en masse. The Company is working on developing a consolidated system by leveraging its proprietary expertise and knowhow on communication and display technologies in a bid to present the system for next generation vehicles. (From an article in the Nikkan Jidosha Shimbun on Oct. 28, 2009)
Automotive pressure sensor
-The Company has developed a new automotive pressure sensor to measure an engine's combustion state in real time to achieve better fuel economy and lower exhaust emissions. Mass production of the pressure sensor is scheduled to begin in 2011. As it is directly mounted on the engine cylinder, it is capable of measuring the combustion pressure, a crucial factor in analyzing the combustion state, while the vehicle is running. This will increase the freedom degree of controls on fuel injection, ignition timing and others, which is expected to improve the engine performance. The Company has solved several problems including heat resistance and downsizing to fit in a limited space and made its mass production tangible. The Company will target automakers, working to meet the 2012 CO2 emission regulations, in promotion of this new sensor so as to win new orders. (From an article in the Nikkan Jidosha Shimbun on Dec. 1, 2009)
Transmission cross beam
-For the first time, a transmission cross beam has been manufactured of the plastic polyamide and used as standard in the new BMW 5 Series Gran Turismo 550i. By using Ultramid(R)A3WG10 CR instead of aluminum, it was possible to reduce the weight of the part by 50%. The cross beam, which was developed by ContiTech Vibration Control in close cooperation with BMW and BASF, received an award just a few days after standard production of the vehicle got started: In the Industry category, it landed the first place Innovation Award conferred by the Federation of Reinforced Plastics (AVK). (From a press release on Dec. 15, 2009)
Investment Activities
Capital Expenditure |
(in million euros) |
| FY2009 | FY2008 | FY2007 | |
| Chassis & Safety | 159.5 | 336.0 | 279.8 |
| Powertrain | 247.2 | 494.4 | 129.6 |
| Interior | 131.3 | 265.2 | 65.5 |
| Passenger and Light Truck Tires | 198.3 | 292.7 | 220.0 |
| Commercial Vehicle Tires | 40.5 | 95.6 | 83.0 |
| ContiTech | 82.8 | 110.8 | 99.8 |
| Other/Consolidation | 0.5 | 0.5 | 17.2 |
| Total | 860.1 | 1,595.2 | 896.9 |