Financial Position
- Free cash flow at €967 million
- Net indebtedness at €5.2 billion
Reconciliation of cash flow
The following information on reconciliation of cash flow relates to the continuing operations of the Continental Group. The figures for the comparative period have been adjusted accordingly.
At €2,014 million in 2025, cash flow from operating activities was €386 million higher than the previous year’s figure (PY: €1,628 million), accounting for 10.2% of sales (PY: 8.1%). The previous year was severely impacted by the payment to buy back shares in ContiTech AG (now operating under the name ContiTech Deutschland GmbH). EBIT decreased by €1,771 million to €272 million (PY: €2,043 million), mainly due to non-cash effects resulting from the spin-off of the former Automotive and Contract Manufacturing group sectors and the valuation of the OESL disposal group. Restructuring expenses, tariffs on imports to the USA and exchange-rate effects also had a negative impact.
The cash-effective increase in working capital led to a cash outflow of €231 million (PY: €69 million), primarily driven by a decrease in operating liabilities of €337 million (PY: increase of €53 million). This was offset by a decrease in inventories of €89 million (PY: increase of €97 million) and a reduction in operating receivables of €17 million (PY: increase of €25 million).
Interest payments fell by €27 million to €293 million (PY: €320 million). Income tax payments rose by €5 million to €562 million (PY: €557 million).
Cash flow from investing activities amounted to an outflow of €1,047 million (PY: €1,026 million). Capital expenditure on property, plant and equipment, and software was up €16 million from €1,056 million to €1,072 million before the capitalization of borrowing costs and right-of-use assets from leases.
The net amount from the acquisition and disposal of companies and business operations led to a cash inflow of €9 million in 2025 (PY: €5 million), mainly attributable to the sale of business activities in the Tires group sector.
These effects resulted in free cash flow of €967 million (PY: €603 million) for fiscal 2025, corresponding to a year-on-year increase of €365 million.
Free cash flow for discontinued operations amounted to ‑€192 million (PY: €511 million), meaning that free cash flow for continuing and discontinued operations combined amounted to €775 million in the reporting year, compared with €1,114 million for 2024.
Capital expenditure (additions)
Capital expenditure for continuing operations rose by €65 million to €1,316 million (PY: €1,251 million). The capital expenditure ratio was 6.7% (PY: 6.2%).
For continuing and discontinued operations, additions to property, plant and equipment, and software amounted to €1,752 million in 2025 (PY: €2,204 million). The capital expenditure ratio was 5.3% (PY: 5.5%).
Financing and indebtedness
At €5,154 million, net indebtedness at the end of fiscal 2025 was €1,442 million higher than at the end of 2024 (PY: €3,712 million), mainly due to the spin-off of the former Automotive and Contract Manufacturing group sectors in September 2025.
The leverage ratio has been reported in place of the gearing ratio as a new key figure for assessing the financing structure since mid‑2025, since it reflects the relationship between debt and profitability, making it a more suitable performance indicator in Continental’s opinion. The leverage ratio is also considered to be more relevant in capital market communication. The leverage ratio as at the end of December 2025 was 2.8.
Gross indebtedness amounted to €6,826 million as at the end of 2025 (PY: €6,909 million), down €83 million on the previous year’s level.
Based on quarter-end values, 69.7% (PY: 68.5%) of gross indebtedness after hedging measures had fixed interest rates on average over the year.
The carrying amount of the bonds increased from €3,861 million in the previous year to €4,626 million as at the end of fiscal 2025. Under the Debt Issuance Programme (DIP), Continental AG issued one listed euro bond on May 22, 2025, with an issue volume of €750 million. The issue price of this bond, which has a term of three and a half years and a fixed interest rate of 2.875% p.a., was 99.610%. A further listed euro bond of Continental AG was issued on September 9, 2025, with an issue volume of €600 million. The issue price of this bond, which has a term of three years and nine months and the same fixed interest rate of 2.875% p.a., was 99.494%. In addition, the €600-million euro bond of Continental AG that matured on June 27, 2025, was redeemed at a rate of 100.000%. This bond had an interest rate of 0.375% p.a. and a term of five years and nine months.
In April 2025, Continental Tire Andina S.A., Cuenca, Ecuador, issued two US dollar bonds with a total volume of USD 15 million, fixed interest rates of 7.500% p.a. and 7.750% p.a. and terms of four and five years, respectively. The carrying amount of the bonds was €11 million as at December 31, 2025.
Bank loans and overdrafts amounted to €534 million (PY: €1,042 million) as at December 31, 2025, and were therefore €508 million below the previous year’s level. This can be explained by an amended contract regulating an existing cash pool between subsidiaries and a financial institution. The amended contract resulted in Continental AG, in the fourth quarter of 2025, having a legal entitlement to offset the associated cash and cash equivalents as well as loans and overdrafts with this financial institution. Consequently, offsetting in accordance with IAS 32.42 was applied for the first time in 2025, with an offsetting effect of €484 million.
The syndicated loan was renewed ahead of schedule in December 2019. It consisted of a revolving tranche of €4,000 million and had an original term of five years. As a result of exercising two options, each extending the term of the loan by one year, this financing commitment was ensured until December 2026. In the first half of 2025, the following amendments were agreed: Firstly, the term was extended by an additional year until December 2027, although one bank – with a share of €90 million – did not participate in the extension and will withdraw from the syndicated loan in December 2026. Secondly, it was agreed that the volume would be reduced upon completion of the spin-off of the former Automotive and Contract Manufacturing group sectors in September 2025. Since September 17, 2025, the volume of the syndicated loan has stood at €2,500 million. Furthermore, the margin is no longer linked to the Continental Group’s sustainability performance. As at December 31, 2025, Continental AG had utilized €250 million (PY: —) of this revolving loan of €2,500 million and Continental Rubber of America, Corp., Wilmington, Delaware, USA, had utilized €128 million (PY: —).
Other indebtedness decreased by €340 million to €1,666 million as at the end of 2025 (PY: €2,005 million). This was primarily due to lower lease liabilities and other liabilities with the character of loans. As at the end of 2025, the utilization of sale-of-receivables programs was down on the previous year at €238 million (PY: €299 million). Two sale-of-receivables programs with a financing volume of €350 million were used within the Continental Group as at the end of 2025, compared with three programs totaling €400 million in the previous year.
Cash and cash equivalents, derivative instruments and interest-bearing investments were down by €1,525 million at €1,672 million (PY: €3,197 million), mainly due to the spin-off of the former Automotive and Contract Manufacturing group sectors in September 2025.
As at December 31, 2025, the Continental Group had liquidity reserves totaling €4,236 million (PY: €7,931 million), consisting of cash and cash equivalents of €1,503 million (PY: €2,966 million) and committed, unutilized credit lines of €2,733 million (PY: €4,966 million). As at December 31, 2025, a total of €1,424 million (PY: €2,720 million) of the cash and cash equivalents specified above were unrestricted. The assessment of any restrictions related to cash and cash equivalents is made on each respective reporting date.
Reconciliation of net indebtedness
| € millions | Dec. 31, 2025 | Dec. 31, 2024 |
| Long-term indebtedness | 4,751 | 4,112 |
| Short-term indebtedness | 2,075 | 2,797 |
| Long-term derivative instruments and interest-bearing investments | –31 | –81 |
| Short-term derivative instruments and interest-bearing investments | –138 | –151 |
| Cash and cash equivalents | –1,503 | –2,966 |
| Net indebtedness | 5,154 | 3,712 |
Reconciliation of change in net indebtedness
| € millions | 2025 | 2024 |
| Net indebtedness of continuing and discontinued operations at the beginning of the reporting period | 3,712 | 4,038 |
| Cash flow from operating activities | 2,193 | 2,934 |
| Cash flow from investing activities | –1,418 | –1,821 |
| Cash flow before financing activities (free cash flow) | 775 | 1,114 |
| Dividends paid | –500 | –440 |
| Other1 | –494 | –345 |
| Exchange-rate effects | –128 | –3 |
| Change in net indebtedness | –346 | 326 |
| Less surplus of cash and cash equivalents of discontinued operations at the time of disposal | –1,095 | — |
| Net indebtedness at the end of the reporting period | 5,154 | 3,712 |
1 Mainly includes dividends paid to and cash changes from equity transactions with non-controlling interests, as well as non-cash changes.
