HANOVER, Germany—Continental A.G.'s tire business reported double-digit declines in 2020 sales and pre-tax operating earnings (EBITDA), but is poised for growth in 2021, Conti executives told shareholders at the firm's annual meeting.
The tire business reported EBITDA of $2.12 billion, a drop of 25.3 percent, on 13.4 percent lower sales of $11.5 billion, lowering the operating ratio three points to 18.4 percent.
Conti said the lower tire unit revenue reflected a 15 percent decline in unit sales, to 130 million tires, a drop the firm attributed to the weak winter tire business and low sales with automobile manufacturers, particularly in Europe.
On the brighter side, sales of all-season and two-wheel tires were higher than the previous year, Conti said, and business in China increased as well.
In remarks to shareholders, Conti execs noted that they see demand for car and light truck tires in North America growing 4 percent to 6 percent this year after dropping 8 percent in 2020 from 2019. Demand for commercial vehicle tires should also grow by about the same amount after falling 1 percent in 2020.
For fiscal 2021, Conti is forecasting sales in the Rubber Technologies business areas (tires and ContiTech) to rebound by about 7 percent to as high as $19.9 billion, with an adjusted EBIT margin of around 11.5 percent to 12.5 percent.