(new: management statements, share price)

HANNOVER (dpa-AFX) - The automotive supplier and tire manufacturer Continental expects less business than before in a weaker environment this year. The automotive markets, especially in Europe, as well as a gloomy environment in the important North American market for tire replacement are slowing down the Hanover-based company. Conti CEO Nikolai Setzer not only lowered his sales expectations for the Group as a whole, the previous assumptions for the operating margin in the automotive supply business were also somewhat too optimistic. Nevertheless, the price renegotiations with car manufacturers and the cost-cutting measures introduced provided a tailwind. Conti intends to spin off its automotive supply business. The share price rose significantly on Wednesday.

The share price rose by almost 6 percent to 57.50 euros at the top of the Dax in the afternoon. However, the share has been under pressure for some time. This year, the share price is still down by around a quarter, putting it at the bottom of the leading Dax index. Analyst Michael Aspinall from investment firm Jefferies said that investors were probably relieved that Conti had not made even deeper cuts in its forecast. On average, the market had already expected the new earnings targets.

Group CEO Nikolai Setzer trimmed the sales forecast for the full year to 40 to 42.5 billion euros, as the Hanover-based company announced on Wednesday. Previously, 41 to 44 billion had been targeted. Conti is sticking to its target range of 6.0 to 7.0 percent for the operating profit margin before interest, taxes and special items. As expected, however, the outlook for operating profit in the automotive supply segment alone has deteriorated somewhat. Analysts had already predicted only the lower end of the new target range of 2.5 to 3.5 percent on average.

In the second quarter, however, the largest part of the Group performed significantly better than a year earlier. The cost-cutting program with job cuts and price renegotiations reportedly had an effect, which should benefit the Lower Saxony-based company even more in the coming quarters.

"We will not let up in the second half of the year and will continue to work hard to achieve the financial targets we have set ourselves," said new CFO Olaf Schick. In an interview with the financial news agency dpa-AFX, he emphasized that the third quarter should be even better than the second - and that the fourth quarter should be the strongest this year.

Conti has planned to cut 7,150 jobs in administration and research and development and aims to reduce annual costs by 400 million euros by next year. According to the information provided, over 2,800 jobs have already been cut. For this year, the management has set itself cost savings of 150 million euros - after the first half of the year, a third of this has been achieved, it was said. Setzer wants to make the automotive supplier division "capital market-ready", in his own words, so that it can be listed on the stock market independently by the end of 2025 - in other words, it should be able to stand on its own two feet and finance itself.

In the second quarter, the Group's operating result rose by almost 41% year-on-year to EUR 704 million, while the corresponding margin increased by over two percentage points to 7%. This was also due to a better performance by the already lucrative tire division and the Contitech plastics division - and was also more than analysts had expected.

At 305 million euros, the bottom line was almost half as profitable. However, turnover fell by a good four percent to ten billion euros.

"Compared to the first quarter, we have improved in all divisions, as announced," summarized CEO Setzer. "We have improved significantly in Automotive and are aiming to improve even further in the following quarters."/men/nas/jha/