Continental (CON) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw significant profitability gains, with adjusted EBIT rising to €639 million (6.6% margin) from €201 million (2.1%) in Q1 2024, despite nearly flat sales at €9.7 billion.

• Net income attributable to shareholders improved to €68 million from a loss of €53 million year-over-year.

• Major structural changes underway, including the planned spin-off of Automotive and Contract Manufacturing (AUMOVIO) in September 2025, with IFRS 5 applied and discontinued operations presented.

• Free cash flow and net indebtedness improved year-over-year, reflecting better operational performance and lower CapEx.

• Leadership transitions on the Executive Board, with new CHRO and CFO appointments from the Tires division.

Financial highlights

• Adjusted EBIT margin improved to 6.6% from 2.1% year-over-year, mainly due to Automotive moving from negative to positive territory.

• Adjusted free cash flow improved to -€304 million from -€1.1 billion, mainly due to fewer one-offs and better operational results.

• Net indebtedness reduced to €4.1 billion from €5.2 billion year-over-year; gearing ratio at 27.4%.

• Tires grew sales by almost 4% organically, with price mix as the main driver and volumes up 0.6%.

• ContiTech sales declined 6% organically, but margins held steady due to strict cost management.

Outlook and guidance

• 2025 guidance split into continued (Tires, ContiTech) and discontinued (Automotive, Contract Manufacturing) operations due to the AUMOVIO spinoff.

• Group sales for continued operations expected at €19.5–21 billion with a 10.5–11.5% margin; Automotive (discontinued) sales at €18–20 billion with 2.5–4% adjusted EBIT margin.

• Tires: sales €13.5–14.5 billion, margin 13.3–14.3%. ContiTech: sales €6.3–6.8 billion, margin 6.0–7.0%.

• Adjusted free cash flow for 2025 expected at €0.6–1.0 billion.

• Guidance does not include potential impacts from recent tariff developments or retaliatory measures.