Continental lifts 2026 outlook on tyre strength

Continental has raised its financial outlook for 2026 after a strong third quarter in its tire business. For its continuing operations, the group now expects sales of around €13.5 billion to €13.9 billion, an adjusted EBIT margin of about 13.4% to 14.0%, and adjusted free cash flow of roughly €1.0 billion to €1.3 billion. Management stated that the improved guidance reflects very good earnings in the tire segment and that, for the year as a whole, earnings margin and free cash flow are now expected to exceed initial projections.

The outlook excludes the ContiTech group sector, which is treated as discontinued operations in light of its planned sale. For ContiTech, Continental now anticipates sales of around €4.2 billion to €4.4 billion and an adjusted EBIT margin of about 6.5% to 7.5%, operationally and excluding the effects of IFRS 5. The capital expenditure ratio for the group is expected to be about 7.0% to 8.0% of sales.

In the third quarter of 2026, Continental generated consolidated sales from continuing operations of €3.5 billion, compared with €3.9 billion a year earlier. The decline in reported sales was mainly linked to the sale of the Original Equipment Solutions business area in early February 2026, while organic sales eased by 1.5%. Net income from continuing and discontinued operations was €349 million, compared with a loss in the prior-year period that had been affected by special items related to portfolio changes.

Profitability improved markedly, with adjusted EBIT rising to €514 million from €482 million and the adjusted EBIT margin increasing to 14.9% from 13.9%. Adjusted free cash flow for continuing operations was €31 million. Management said earnings remained particularly strong in Europe and Asia, even as weak automotive markets weighed on the original‑equipment business.

Continental identified large, high‑performance tires for SUVs and electric vehicles as a key driver of its business. Higher sales of ultra‑high‑performance tires measuring 18 inches and above, slightly positive exchange‑rate effects, lower tariff impacts and commercial measures in response to rising raw‑material prices all supported the tire segment’s performance. At the same time, higher raw‑material prices were described as an increasing burden on earnings, with a stronger impact expected in the fourth quarter.

Regionally, the EMEA tires region generated third‑quarter sales of €1.9 billion, with an adjusted EBIT margin of 18.7%. The Americas tires region recorded sales of €1.1 billion and an adjusted EBIT margin of 8.7%, with performance affected by weak replacement markets but supported by a higher share of ultra‑high‑performance tires. In the APAC tires region, sales rose to €476 million and the adjusted EBIT margin stood at 18.6%, helped by strong original‑equipment business and positive exchange‑rate effects.

Continental is expanding its global portfolio of ultra‑high‑performance tires to underpin future growth. By the end of 2027, the company plans to introduce more than 650 new tire specifications for both original equipment and the replacement market in sizes of 18 inches and above. This expansion targets growing demand for tires designed for larger, heavier and more powerful vehicles, including those with electrified drive systems.

The company views disciplined, selective growth in the premium ultra‑high‑performance segment as central to its competitiveness. Management emphasized that technology, product quality, brand strength and local production are key foundations for this strategy, as the share of ultra‑high‑performance tires in passenger‑car tire sales has increased across regions.