Continental (CON) investor relations material

Strategic transformation and portfolio optimization

• Transitioning to a pure-play tire company through divestment of non-core businesses, including OESL and ContiTech, with proceeds used for shareholder returns and deleveraging.

• New regional reporting structure replaces the previous tire segment, enhancing transparency and focus, with three regions (EMEA, Americas, APAC) reported separately.

• Ongoing measures to optimize plant utilization, exit non-core and non-value-creating markets, and phase out businesses lacking scale, including closures and asset sales through 2026.

• Central costs now included in results, with a run rate of EUR 30–35 million per quarter, aiming for further SG&A optimization.

• Additional improvement projects and cost base optimization continue alongside the transformation.

Regional performance and financial highlights

• EMEA remains the earnings powerhouse, contributing 53% of sales and 64% of adjusted EBIT in FY 2025, with adjusted EBIT margins above 16.7% and €7.4bn in sales, driven by premium mix and supply chain strength.

• Americas generated €4.5bn in sales with an 8.0% adjusted EBIT margin, facing challenges from tariffs, FX, and weak truck tire demand, but targeting operational turnaround and premium product growth.

• APAC delivered €1.9bn in sales and a 16.9% adjusted EBIT margin, with high margins (18.8% in H1 2026), leveraging premium brand recognition and growth with Asian OEMs.

• Capacity utilization targets are 90% for PLT and 80% for truck tires, with current truck utilization in Americas below target.

• Margin improvement in Americas depends on operational efficiency, market recovery, and external factors like tariffs and FX.

Operational excellence and manufacturing footprint

• Over 80% of production is concentrated in mega plants, with 75% of tires produced in best-cost countries, driving low unit costs and a 70% reduction in GHG intensity since 2019.

• Standardized manufacturing enables flexibility, productivity, and resilience, supporting global and local customer needs.

• Supply chain excellence is supported by high automation, broad SKU coverage, and rapid service, especially in EMEA.

• Investments in capacity and standardization continue, with U.S. plants designed for scalable growth.

• CapEx rate of 7–8% is maintained to support growth and efficiency without major investment waves.