Continental Targets €220B Sales With ContiTech Spin Off and Tire Focus

On June 24, Continental Group confirmed its plan to spin off its materials and industrial business subsidiary, ContiTech, by 2026 as part of its strategy to transform into a “pure tire manufacturer.” The separation of ContiTech’s automotive segment is set to occur later this year, with the process expected to begin in September.

CEO Nikolai Setzer stated that the restructuring will allow Continental to focus exclusively on tires, prioritizing cash flow, profitability, and stable growth. Under this new structure, the company has revised its financial outlook. Over the next 3–5 years, Continental projects consolidated sales of €19.5 billion to €22 billion, with an adjusted EBIT margin of 12.0%–14.5%.

For 2025, Continental lowered its forecasts, citing currency fluctuations and growing global trade barriers. The updated outlook estimates total sales of €19.5 billion–€21 billion, with an adjusted EBIT margin of 10.0%–11.0%, down from the prior 10.5%–11.5%.

Tire Division: Sales remain forecasted at €13.5 billion–€14.5 billion, but the adjusted EBIT margin has been revised to 12.5%–14.0%, down from 13.3%–14.3%.
ContiTech Division: Sales expectations have been reduced to €6 billion–€6.5 billion from €6.3 billion–€6.8 billion, with an adjusted EBIT margin of 6.0%–7.0%.

Despite market volatility, Continental described its tire division as a "resilient leader with strong brands." The segment benefits from economies of scale, efficient processes, and a robust product portfolio. Approximately 80% of its global production is concentrated in "super plants," enabling cost efficiencies.

Passenger car tires accounted for 77% of the division’s total sales in 2024, with 54% of revenue generated in Europe, the Middle East, and Africa (EMEA). Replacement tires made up 76% of sales, with North America and Asia identified as key growth markets. Continental emphasized its dominance in ultra-high-performance tires (18 inches and above), which represent 39% of total passenger car tire sales and 48% of Continental-branded tire sales.

ContiTech’s Shift Toward Industrial Markets

Continental expects ContiTech to derive 80% of its revenue from industrial clients following the spin-off of its OESL (Original Equipment Service Line) business, which generates €1.9 billion annually. The sale is planned for late 2025. In 2024, ContiTech’s adjusted revenue stood at €4.5 billion, with 41% from EMEA, 36% from the Americas, and 23% from Asia-Pacific. The division’s primary markets include off-highway transportation, mining, construction, energy, and home solutions. Continental highlighted strong demand for rubber and thermoplastic solutions, which will remain a key focus for ContiTech’s future growth.