Continental sees sales growth accelerating in 2015

Flags of Germany's Continental AG hang in the rain during a board meeting of Continental in Frankfurt, in this March 6, 2009 file photo. REUTERS/Kai Pfaffenbach/Files

FRANKFURT (Reuters) - German automotive supplier Continental expects sales growth to quicken to around five percent this year as global passenger car production rises moderately, while its operating profit margin should remain roughly stable.

Sales grew 3.5 percent to around 34.5 billion euros (26.91 billion pounds) last year, Continental said on Monday, in line with market expectations according to Thomson Reuters data despite negative exchange-rate effects of around 500 million euros.

"We systematically continued along our successful path last year despite the weak growth in Europe, Russia and South America," Chief Executive Elmar Degenhart said, announcing preliminary key figures at the motor show in Detroit, USA.

"We achieved this in spite of the further uncertainty added to the already volatile market development as a result of considerable exchange rate fluctuations in some cases or, as seen recently, the drop in the price of oil."

Continental made 2014 earnings before interest and tax (EBIT) of over 3.8 billion euros, beating market expectations averaging 3.75 billion euros and giving it an EBIT margin above 11 percent.

Chief Financial Officer Wolfgang Schaefer told Reuters that the company's EBIT margin would be "greater than 10.5 percent" in 2015.

The company remains on the lookout for potential acquisitions, although the main priority now is to close the acquisition of Veyance Technologies, a U.S.-based maker of industrial hoses and belting, which Continental agreed to buy in February last year.

Continental said it plans to complete the acquisition of Veyance early in the first quarter, once it has met regulatory demands to its patents and trademarks associated with the air spring business.

The company said it expected global production of passenger cars with a gross vehicle weight rating up to 6 metric tonnes to rise to roughly 89 million vehicles this year from 87 million last year.

Shares in Continental, which will present full 2014 figures on March 5, were trading 1.7 percent higher at 1.81 euros by 1335 GMT, outperforming the European automotive index <.SXAP>, which rose 1.3 percent.

(Reporting by Georgina Prodhan and Jan Schwartz; Editing by Louise Heavens/Keith Weir)

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