Continental reached key milestones in its strategic realignment in the reporting year, despite the challenging market environment. Business performance and earnings were shaped by external factors such as trade barriers, protectionist tariff policies and negative exchange-rate effects. In addition, significant non-cash special effects resulting from the spin-off of the former Automotive and Contract Manufacturing group sectors and the sale of the OESL disposal group weighed on the Continental Group’s operating result.
In this environment, sales from Continental’s continuing operations fell slightly by €0.4 billion to €19.7 billion (PY: €20.1 billion), while the adjusted EBIT margin decreased to 10.3% (PY: 11.0%). Adjusted free cash flow was €959 million. The prior-year figure of €598 million was impacted by the payment to buy back shares in ContiTech AG (now operating under the name ContiTech Deutschland GmbH).
Sales in the Tires group sector contracted slightly to €13.8 billion (PY: €13.9 billion) on the back of negative exchange-rate effects coupled with weak demand in the original-equipment business for passenger cars and in the truck-tire segment. This was offset by growth in the global replacement markets for car tires as well as continued positive mix effects in sales. Despite the burdens from tariffs and exchange-rate effects, the adjusted EBIT margin was 13.6%, similar to the previous year (PY: 13.7%).
Sales in the ContiTech group sector were hampered by negative exchange-rate effects, the continued downtrend in the automotive original-equipment business in Europe and North America and persistently weak markets, particularly in the industrial segment. The group sector recorded sales of €6.0 billion (PY: €6.4 billion). The weak market environment also weighed on ContiTech’s earnings, with its adjusted EBIT margin falling to 5.3% (PY: 6.1%).
