Continental slides into the red due to extraordinary burdens - Continental’s Bold Shift: Spinning Off Units to Focus on Tire Dominance
Continental AG, a leading global automotive supplier and tire manufacturer, has reported its third-quarter results. Despite a net loss of €756 million due to one-off effects, the company's core operations showed resilience, with adjusted earnings before interest and taxes (EBIT) declining by nearly 15% to €565 million. Revenue remained stable at €5.0 billion.
In September, Continental completed a significant strategic move by spinning off its automotive supplier unit, Aumovio, via an initial public offering (IPO). This transaction, along with the planned sale of part of its Contitech plastics technology business, is part of the company's transformation into a pure tire manufacturer, led by CEO Nikolai Setzer.
The tire division continues to be Continental's most profitable segment, accounting for more than two-thirds of group revenue and achieving an adjusted operating margin of 14.3%. Despite pressures from currency fluctuations and U.S. tariffs, the company reported solid replacement tire sales for passenger cars in North America and Asia. Additionally, Continental's winter tire business showed strong momentum in its core operations.
The Contitech plastics division, contributing 30% to group revenue, achieved a 6.6% operating margin. Continental plans to fully divest this division by the end of 2026, further sharpening its focus on the tire business.
Continental's third-quarter results reflect the company's ongoing transformation, with a focus on its core tire business. Despite one-off effects leading to a net loss, the company's tire division remains profitable, and its winter tire business shows strong growth. Continental's realignment, led by CEO Nikolai Setzer, is expected to be completed by the end of 2026, positioning the company as a pure tire manufacturer.
