DETROIT (Reuters) -- Schaeffler Group, which controls German automotive supplier Continental AG, expects its profitability to at least remain on par with last year in 2010, the company's CEO said on Monday.
The company had an operating profit margin of just above 5 percent in 2009, with total sales of 7.5 billion euros ($10.9 billion).
While first-half production is largely secured as carmakers still live off an order book swollen from last-minute purchases as scrapping subsidies run out, Schaeffler -- like its customers -- is less certain about how business will develop afterwards.
"I won't risk a forecast for H2," CEO Juergen Geissinger said on the sidelines of the Detroit auto show.
Schaeffler manufactures bearings of all kinds for all applications, including ball-shaped, tapered and needle bearings, and can even be found in the London Eye ferris wheel as well as a variety of cars and airplanes.
Its clutches are used in one out of four cars, and the fuel-efficient, fully variable hydraulic valve control system marketed by Fiat S.p.A under the name of MultiAir was jointly developed and produced by Schaeffler.
Geissinger said Schaeffler was still working on a merger with Continental, adding the time plan had not changed.
"We are not putting anything on ice nor are we accelerating anything," he said, adding he wanted to make his company fit for the capital market this year, including a possible legal change to a German stock corporation from a limited private partnership as part of the preparations for an eventual merger.
Power struggle at Conti
The planned merger will create an automotive supplier with 33 billion euros in annual sales and about 200,000 employees.
A German newspaper reported over the weekend that a merger of Continental and Schaeffler will not happen this year, citing the prospectus for Conti's planned rights issue for more than 1 billion euros.
Continental is issuing new shares to reduce debt taken on for acquisitions it made before car makers collapsed. Insiders have said Schaeffler wants to keep a Continental stake of at least 75.1 percent, eventually giving it access to Conti's earnings.
Schaeffler took control of the much larger German auto supplier 12 months ago after launching a hostile $18 billion bid in which it ended up collecting more shares than it could afford, lumbering itself with billions of euros of debt.
The resulting standoff had triggered repeated power struggles with Continental that Schaeffler ultimately won after ousting former CEO Karl-Thomas Neumann and replacing large parts of the supervisory and management boards. Conti's current CEO is the former head of Schaeffler's automotive parts business, Elmar Degenhart.