Continental targets higher earnings, completion of realignment in 2026
TL;DR
Continental AG is progressing with its strategic realignment, having spun off Aumovio and selling OESL, targeting completion by 2026. The Tires division performed well in 2025, while ContiTech underperformed, with future earnings dependent on divestitures and market recovery.
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Continental targets higher earnings, completion of realignment in 2026
Continental Advances Realignment, Eyes 2026 Earnings Growth
Continental AG has made significant progress in its strategic realignment, completing key milestones in 2025 and positioning itself for a sharper focus on its core tire business. The company finalized the spin-off of Aumovio, a mobility services subsidiary, and secured a contract to sell its Original Equipment Solutions (OESL) business area, with the transaction expected to close in Q1 2026. These moves are part of a broader plan to divest non-core operations, including the planned sale of ContiTech in 2026.
Financial results for fiscal 2025 reflect mixed performance. Group sales totaled €19.7 billion, within the guided range of €19.5–€21.0 billion, while the adjusted EBIT margin stood at 10.2%, slightly below the upper end of the 10.0–11.0% target range. The Tires division outperformed, achieving an adjusted EBIT margin of 13.6% for the year, driven by strong replacement-tire demand in North America and Asia. However, ContiTech underperformed, with an adjusted EBIT margin of 4.9% for 2025—below the 6.0–7.0% guidance—due to weak industrial demand and delayed cost-reduction measures.
Non-cash special effects from the Aumovio spin-off and OESL sale negatively impacted 2025 earnings by €1.1 billion, primarily stemming from currency translation differences and asset valuation adjustments. Despite this, adjusted free cash flow for the Continental Group reached €1.0 billion for the full year, aligning with guidance.
Looking ahead, CFO Roland Welzbacher emphasized that the company remains on track to complete its realignment in 2026, with a structured sales process for ContiTech now underway. The Tires division is expected to benefit from cost discipline and a recovering market, while ContiTech's performance will depend on industrial demand and the success of its divestiture.
With the OESL sale nearing completion and Aumovio fully spun off, Continental's strategic pivot toward a focused tire business is advancing as planned. The company's 2026 financial outlook will hinge on the successful execution of its divestiture strategy and continued operational improvements in its core segments.
