...Sound Profitability, Growth Prospects: The Positive Outlook reflects Continental AG's solid performance in 1H14 and Fitch Ratings' expectations that the group's business and financial profile will strengthen further. We expect revenue growth to benefit from a recovering European auto market and market share gains. Profitability is strong and has been fairly resilient in face of the cyclicality and volatility of the automotive supply industry. Fitch expects group operating margins to remain above 11% in 2014-2015 despite our assumption of an erosion of the rubber business's operating margin towards 15%-15.5% by 2016 from 16.8% in 2013. However, we project an improvement in the automotive division's profitability towards 9% by 2016 from 7.9% in 2013. Strong Business Profile: The ratings reflect Continental's large manufacturing operations, global footprint, top-ranking positions in the markets in which it operates and solid end-market diversification. Continental derives about 30% of its...
