Copyright RubberWorld
Hannover, Germany — In a key update released 6 November 2025, Continental AG disclosed its third quarter (Q3) and nine-months results for 2025, underlining the company’s ongoing shift in strategy even as it faced a challenging market environment. Group sales in Q3 2025 reached €5.0 billion, essentially flat compared with the same period last year (-0.9 %) but delivered organic growth of 2.6 % after adjusting for currency and consolidation effects. Adjusted EBIT came in at €565 million, down 14.9 % from €664 million a year ago — though that prior-year figure benefited from a one-time payment. The adjusted EBIT margin was 11.4 % (Q3 2024: 13.3 %). Net income swung negative to −€756 million, compared with a profit of €486 million in Q3 2024, largely reflecting non-cash special effects tied to strategic realignment. Adjusted free cash flow improved slightly to €169 million, an increase of 8 % compared with €157 million a year earlier. The Tires business sector achieved sales of around €3.5 billion and posted an adjusted EBIT margin of 14.3 %. The company cited strong replacement-tire demand, especially in North America and Asia, and a good seasonal start to the winter tire business as bright spots. In contrast, the ContiTech division delivered sales of about €1.5 billion (-3.7 % year-on-year), with organic sales down 0.6 %. Its adjusted EBIT margin rose to 6.6 % from 4.4 %, thanks to cost-reduction measures. Continental also flagged general economic uncertainty, weak industrial demand, currency effects, and tariffs—particularly those affecting its North American operations—as key headwinds. The company is deep into a strategic transformation aimed at sharpening its business focus. The spin-off of its automotive and mobility unit, now operating as Aumovio SE, was successfully completed, and the sale of the Original Equipment Solutions business area (OESL) has been contractually agreed. As a result of these moves, Continental incurred non-cash special effects of around €1.1 billion in Q3, which weighed heavily on net income but not on cash flow. The planned sale of ContiTech will allow the group to position itself more clearly as a “tire champion” while enabling ContiTech to develop as an independent industrial specialist. CEO Nikolai Setzer stated: “In a challenging market environment, we continue to work diligently, both operationally and strategically, to complete our realignment next year.” Despite the headline net loss, Continental emphasized that its cash-flow position remains solid and that the strategic foundation for future value creation is being laid. With adjusted free cash flow improving and margins rising in key divisions such as Tires and ContiTech, the company expects further improvement in Q4. CFO Roland Welzbacher noted, “Tires, ContiTech and free cash flow all showed significant improvement compared with the second quarter. Looking ahead to the final quarter of the year, we are aiming for further improvements in cash flow and at ContiTech.” Analysts observed that while one-time restructuring costs hit the bottom line, operational margins—particularly in the Tires business—beat expectations. Still, risks remain, including tariffs, volatile currency effects, weaker industrial markets, and the execution of planned divestments. Continental’s Q3 2025 results reflect a company caught between two phases: solid operational momentum in its core tire business and a major strategic transformation underway. The net loss may raise eyebrows, but beneath that headline is a business refining its portfolio and improving margin performance in selected areas. The upcoming sale of remaining non-core units and the completion of the realignment will determine whether Continental’s repositioning delivers the value creation the market is awaiting.
