Forecast process
Each year, Continental forecasts the values of the most significant key performance indicators for the Continental Group for the new fiscal year. These include sales and the adjusted EBIT margin for the Continental Group as well as for the group sectors.
In addition, we provide information on the assessment of important factors influencing earnings before interest and tax (EBIT). These include the expected development of special effects and the amount of amortization from purchase price allocations. We thus allow the Continental Group’s expected EBIT to be estimated.
Furthermore, we give an assessment of the development of the financial result before effects from currency translation and before effects from changes in the fair value of derivative instruments, and other valuation effects, as well as the tax rate for the Continental Group. This allows a reconciliation to expected net income. We also publish a forecast of the capital expenditure planned for the current year and the adjusted free cash flow. Our forecast is based on our expectations regarding the most important production and sales markets in the new fiscal year.
We publish our forecast as part of our annual press conference and the publication of our annual report. It is continually reviewed over the course of the fiscal year. Possible changes to the forecast are described at the latest in the report for the respective quarter.
Comparison of the past fiscal year against forecast
In our forecast for fiscal 2025, which we published in March 2025, we expected the global production of passenger cars and light commercial vehicles to be roughly on a par with the previous year, with a negative development expected in our core markets of Europe and North America.
This forecast took into account the tense geopolitical situation and its expected impact on production volumes in 2025. It did not take into account potential significant changes to global tariffs, however.
Based on these assumptions, as well as the exchange rates at the beginning of the fiscal year, we expected the following key financial figures for continuing and discontinued operations for fiscal 2025:
- We expected the Continental Group to achieve sales in the range of around €38.0 billion to €41.0 billion and an adjusted EBIT margin of around 6.5% to 7.5%.
- We expected our former Automotive group sector to achieve sales of around €18.0 billion to €20.0 billion. We expected the adjusted EBIT margin to be around 2.5% to 4.0%.
- We expected our Tires group sector to achieve sales of around €13.5 billion to €14.5 billion and an adjusted EBIT margin of around 13.3% to 14.3%.
- We expected our ContiTech group sector to achieve sales of around €6.3 billion to €6.8 billion and an adjusted EBIT margin of around 6.0% to 7.0%.
- In our former Contract Manufacturing group sector, we anticipated sales of around €100 million to €200 million and an adjusted EBIT margin of around 0%.
- Amortization from purchase price allocations was expected to be around €100 million and affect mainly the Automotive and ContiTech group sectors.
- In addition, we expected negative special effects of around €700 million.
- In 2025, we expected the negative financial result to be around €350 million before effects from currency translation, effects from changes in the fair value of derivative instruments, and other valuation effects.
- The tax rate was expected to be around 27%.
- The capital expenditure ratio is expected to be around 6.0% of sales in fiscal 2025.
- In 2025, we were planning on adjusted free cash flow of approximately €0.8 billion to €1.2 billion.
In the quarterly statement for the first quarter of 2025, we adjusted our outlook for fiscal 2025 due to the following factors:
The Supervisory Board’s resolution on March 12, 2025, to spin off the former Automotive and Contract Manufacturing group sectors resulted in the application of IFRS 5, Non-current Assets Held for Sale and Discontinued Operations, and thus the presentation of continuing and discontinued operations. We adjusted the outlook for fiscal 2025 accordingly based on the applicable regulatory requirements and taking into account the planned spin-off of Automotive and Contract Manufacturing. Changes to key figures were due to the new structure of the forecast as a result of the realignment, but continued to refer to fiscal 2025 as a whole.
- For continuing operations:
- We expected the Continental Group to achieve sales in the range of around €19.5 billion to €21.0 billion and an adjusted EBIT margin of around 10.5% to 11.5%.
- Consolidated amortization from purchase price allocations was expected to be around €50 million and affect mainly the ContiTech group sector.
- In addition, we expected negative special effects of around €350 million.
- In 2025, we expected the negative financial result to be around €300 million before effects from currency translation, effects from changes in the fair value of derivative instruments, and other valuation effects.
- We were planning on adjusted free cash flow of approximately €0.6 billion to €1.0 billion.
- For discontinued operations:
- For the former Automotive group sector, we expected sales of around €18.0 billion to €20.0 billion and an adjusted EBIT margin of around 2.5% to 4.0%, operationally and excluding the effects of IFRS 5.
- For the former Contract Manufacturing group sector, we expected sales of around €100 million to €200 million and an adjusted EBIT margin of around 0%, operationally and excluding the effects of IFRS 5.
The other parts of the outlook remained unchanged.
At the Capital Market Day on June 24, 2025, we adjusted our outlook for fiscal 2025 due to the following factors:
We expected the negative effects of global trade barriers, tariff policy and exchange rates to persist in the second half of the year. By contrast, for the Tires group sector in particular, we expected slight cost reductions from the procurement of production materials.
The sales outlook for the ContiTech group sector was updated to reflect changes in exchange rates, while margin expectations for the Tires group sector were revised owing to changes in exchange rates and increasing trade barriers. Margin expectations were lowered for the Continental Group as a whole. The outlook took into account the tariffs and current exchange rates applicable at this time for fiscal 2025. We therefore expected the following key figures.
- For continuing operations:
- We expected the Continental Group to achieve sales in the range of around €19.5 billion to €21.0 billion and an adjusted EBIT margin of around 10.0% to 11.0%.
- We expected our Tires group sector to achieve sales of around €13.5 billion to €14.5 billion and an adjusted EBIT margin of around 12.5% to 14.0%.
- We expected our ContiTech group sector to achieve sales of around €6.0 billion to €6.5 billion and an adjusted EBIT margin of around 6.0% to 7.0%.
- In addition, we expected negative special effects of around €350 million.
The other parts of the outlook, including the outlook for discontinued operations, remained unchanged.
In the half-year financial report, we added that the outlook for special effects did not include deconsolidation effects in connection with the planned spin-off of the former Automotive and Contract Manufacturing group sectors, which we expected to be negative and in the mid-hundreds of millions.
The other parts of the outlook remained unchanged.
In the quarterly statement for the third quarter of 2025, we adjusted our outlook for fiscal 2025 due to the following factors:
We expected the production of passenger cars and light commercial vehicles to increase slightly year-on-year. For the replacement-tire business, we anticipated a slight decline in demand in the second half of the year compared with the first half due to economic and geopolitical uncertainties. For the industrial business, we expected a gradual improvement in production figures in the eurozone, steady development in the USA and continued positive growth in China. We expected the negative effects of global trade barriers, tariff policy and exchange rates to persist in the fourth quarter. By contrast, for the Tires group sector in particular, we expected slight cost reductions from the procurement of production materials.
Furthermore, we adjusted our outlook based on special effects from the spin-off of the former Automotive and Contract Manufacturing group sectors, the planned OESL sale and slightly increased investment activity, in particular to expand tire production capacity in Asia. We therefore expected the following key figures:
- For fiscal 2025, we expected negative special effects of around €1.5 billion.
- Primarily influenced by effects from the Aumovio spin-off and the planned sale of OESL, we anticipated a tax rate in the low triple-digit percentage range. Without these special effects, the tax rate would have remained unchanged from the previous forecast of around 27%.
- The capital expenditure ratio was expected to be around 6.5% of sales in fiscal 2025.
All other parts of the outlook remained unchanged.
Owing to our operating performance in the fourth quarter, we achieved the following results for fiscal 2025 for continuing operations:
- The Continental Group generated sales of €19.7 billion and an adjusted EBIT margin of 10.3%.
- The Tires group sector generated sales of €13.8 billion and an adjusted EBIT margin of 13.6%.
- The ContiTech group sector generated sales of €6.0 billion and an adjusted EBIT margin of 5.3%, or 4.9% before the application of IFRS 5. The lower-than-expected earnings were mainly due to the lack of market recovery in the fourth quarter, transformation costs, currency and valuation effects, and the deferral of certain earnings-safeguarding measures to subsequent quarters.
- Total consolidated expense from special effects amounted to €1.7 billion in 2025.
- Amortization from purchase price allocations was €45 million.
- In the year under review, the negative financial result amounted to €275 million before effects from currency translation and before effects from changes in the fair value of derivative instruments, and other valuation effects.
- Income tax expense in fiscal 2025 amounted to €384 million. The tax rate was 52.0%.
- The capital expenditure ratio was 6.7%.
- Adjusted free cash flow was €1.0 billion in 2025.
| Comparison of forecasts for the group sectors of Continental for fiscal 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Automotive | Tires | ContiTech | Contract Manufacturing | |||||
| Sales |
Adjusted EBIT margin (%) |
Sales |
Adjusted EBIT margin (%) |
Sales |
Adjusted EBIT margin (%) |
Sales |
Adjusted EBIT margin (%) |
|
| Annual press conference on March 4, 2025 | ~ 18.0 – 20.0 | ~ 2.5 – 4.0 | ~ 13.5 – 14.5 | ~ 13.3 – 14.3 | ~ 6.3 – 6.8 | ~ 6.0 – 7.0 | ~ 0.1 – 0.2 | ~ 0 |
| Quarterly statement as at May 6, 2025 | ~ 18.0 – 20.0 | ~ 2.5 – 4.0 | ~ 13.5 – 14.5 | ~ 13.3 – 14.3 | ~ 6.3 – 6.8 | ~ 6.0 – 7.0 | ~ 0.1 – 0.2 | ~ 0 |
| Capital Market Day on June 24, 2025 | ~ 18.0 – 20.0 | ~ 2.5 – 4.0 | ~ 13.5 – 14.5 | ~ 12.5 – 14.0 | ~ 6.0 – 6.5 | ~ 6.0 – 7.0 | ~ 0.1 – 0.2 | ~ 0 |
| Half-year financial report as at Aug. 5, 2025 | ~ 18.0 – 20.0 | ~ 2.5 – 4.0 | ~ 13.5 – 14.5 | ~ 12.5 – 14.0 | ~ 6.0 – 6.5 | ~ 6.0 – 7.0 | ~ 0.1 – 0.2 | ~ 0 |
| Quarterly statement as at Nov. 6, 2025 | — | — | ~ 13.5 – 14.5 | ~ 12.5 – 14.0 | ~ 6.0 – 6.5 | ~ 6.0 – 7.0 | — | — |
| 2025 annual report | — | — | 13.8 | 13.6 | 6.0 | 5.31 | — | — |
1 The ContiTech group sector generated an adjusted EBIT margin of 5.3%, or 4.9% before the application of IFRS 5.
| Comparison of key forecast elements for the Continental Group for fiscal 2025 | |||||
|---|---|---|---|---|---|
| Continental Group | |||||
| Sales |
Adjusted EBIT margin (%) |
Special effects |
Investments (in % of sales) | Adjusted free cash flow |
|
| Annual press conference on March 4, 20251 | ~ 38.0 – 41.0 | ~ 6.5 – 7.5 | ~ –0.7 | ~ 6.0 | ~ 0.8 – 1.2 |
| Quarterly statement as at May 6, 20252 | ~ 19.5 – 21.0 | ~ 10.5 – 11.5 | ~ –0.35 | ~ 6.0 | ~ 0.6 – 1.0 |
| Capital Market Day on June 24, 20252 | ~ 19.5 – 21.0 | ~ 10.0 – 11.0 | ~ –0.35 | ~ 6.0 | ~ 0.6 – 1.0 |
| Half-year financial report as at Aug. 5, 20252 | ~ 19.5 – 21.0 | ~ 10.0 – 11.0 | ~ –0.35 | ~ 6.0 | ~ 0.6 – 1.0 |
| Quarterly statement as at Nov. 6, 20252 | ~ 19.5 – 21.0 | ~ 10.0 – 11.0 | ~ –1.5 | ~ 6.5 | ~ 0.6 – 1.0 |
| 2025 annual report | 19.7 | 10.3 | –1.7 | 6.7 | 1.0 |
All figures take into account the exceptions and definitions specified in each case in the comparison against forecast.
1 Continuing and discontinued operations.
2 Only continuing operations.
Outlook for fiscal 2026
As mentioned on pages 87 and 88 of the report on expected developments, we expect demand in the replacement-tire markets for passenger cars and light commercial vehicles to remain virtually unchanged year-on-year in 2026. We expect the production of passenger cars and light commercial vehicles to be slightly lower than in the previous year, with a negative development expected in our core markets of Europe and North America as well as in China.
This outlook takes into account the continued tense geopolitical situation and its expected impact on production volumes in 2026.
Should the geopolitical situation remain tense or become even worse, particularly due to the military conflict in the Middle East, this could cause sustained disruptions to production, supply chains and demand, as well as lead to rising costs. Depending on the severity of the disruption, sales and earnings in both group sectors, and therefore for the Continental Group as a whole, could be lower than in the previous year.
Based on these assumptions, as well as current tariff impacts and exchange rates at the beginning of the fiscal year, we expect the following key financial figures for fiscal 2026:
- We expect the Continental Group to achieve sales in the range of around €17.3 billion to €18.9 billion and an adjusted EBIT margin of around 11.0% to 12.5%.
- We expect our Tires group sector to achieve sales of around €13.2 billion to €14.2 billion and an adjusted EBIT margin of around 13.0% to 14.5%.
- We expect our ContiTech group sector to achieve sales of around €4.2 billion to €4.8 billion and an adjusted EBIT margin of around 7.0% to 8.5%.
- Consolidated amortization of intangible assets from purchase price allocation (PPA) is expected to be around €25 million and affect mainly the ContiTech group sector.
- In addition, we anticipate negative special effects of around €250 million.
- In 2026, we expect the negative financial result to be around €300 million before effects from currency translation, effects from changes in the fair value of derivative instruments, and other valuation effects.
- The tax rate is expected to be around 24%.
- The capital expenditure ratio is expected to be around 7.0% of sales in fiscal 2026.
- In 2026, we are planning on adjusted free cash flow of approximately €0.8 billion to €1.2 billion.
