Continental Eyes Bigger 2026 Profits While Wrapping Up Its Big Shift

Continental is poised to lift its earnings next year, riding on several key catalysts:

• Premium Tire Sales Surge – Strong demand for large premium tires is expected to drive top‑line growth.
• Lower Raw‑Material Costs – Falling input prices will boost margins.
• Industrial Demand Recovery – A rebound in industrial activity later in 2026 should add momentum.
• ContiTech Streamlining – Gains from the final phase of ContiTech’s sale are anticipated, though trade barriers remain a risk.

Financial Outlook

• Sales Forecast: €17.3 bn – €18.9 bn
• Adjusted EBIT Margin: 11 % – 12½ %
• Free Cash Flow: €0.8 bn – €1.2 bn

Last year, Continental met its sales and margin targets for both the group and its tire division. Net earnings before special items reached €1.1 bn, enabling a proposed dividend of €2.70 per share and a profit‑sharing bonus worth several hundred million euros for staff worldwide.

Restructuring Milestones

• Aumovio Spin‑Off – Completed.
• OESL Sale – Finalized in February.
• ContiTech Sale – Upcoming, marking the final phase of restructuring (announced at a Hanover press conference).

The CEO praised employees for maintaining momentum amid uncertainty and announced that workers will benefit from a profit‑sharing program.

2025 Performance Snapshot

• Sales: €19.7 bn (‑2 % YoY)
• Organic growth of 0.8 % before currency effects.
• Adjusted EBIT: €2.0 bn (10.3 % margin)
• OESL was listed as an asset for sale, with no depreciation recorded; excluding this would have yielded a 10.2 % margin.
• Net Income: Loss of €165 m, largely due to one‑time non‑cash effects from the Aumovio spin‑off and OESL sale (€1.2 bn in EBIT, no cash impact).

The CFO noted that tariffs and currency swings hurt the tire division, but operational strength and brand power should lift earnings in 2026. Lower material costs and a late‑year industrial upswing are expected to help.

Dividend Recommendation

With stable cash flow, the board recommends a €2.70 dividend—up €0.20 from last year—representing about 50 % of pre‑special‑effect earnings. Shareholders will vote on the final amount at the April 30, 2026 meeting.