Continental aims to trim inventory in Q4 to reach a €0.8 to €1.2 billion adjusted free cash flow target, up from a €497.3 million loss earlier.
The multinational auto parts manufacturer on Wednesday adjusted its expectations for sales growth in the autos market to 5-7%, from 3-5% previously. Continental reported earnings in line with consensus for the third quarter on the back of higher prices, lower inventory and stabilised supply chains, a boost after its second quarter results were weighed down by higher costs and working capital.Talks to agree on higher pricing were “not easy” but the company expected to be negotiating again with customers in the coming year and it “could well be” that prices needed to be hiked further, chief financial officer Katja Garcia Vila said.
Nonetheless, Continental would carry on reducing inventory in the fourth quarter in order to hit its adjusted free cash flow target of €0.8-1.2 billion, a steep jump from the €497.3 million loss reported between January and September.Its automotive business, which suffered a loss in the second quarter, was back in profit with an adjusted earnings margin of 2.8%.