Conti lifts profitability on mix, lower raw materials despite 10% sales drop

Hanover, Germany — Continental AG has reported improved profitability in the first quarter of 2026, as stronger product mix and lower raw material costs offset weaker sales and adverse currency effects.

For the three months to end of March, group sales fell 10.4% year-on-year to €4.4 billion, with organic sales down 0.9%, the group reported 6 May.

Adjusted EBIT (adjusted operating result) rose 6.1% year-on-year to €522 million, lifting the adjusted EBIT margin to 11.9% from 10.7% a year earlier.

But earnings (EBITDA) and reported EBIT came in below prior-year levels, with earnings dropping nearly 6% year-over-year to €648 million and EBIT down 6.5% at €385 million, according to the quarterly results.

Commenting on the group performance, CEO Christian Koetz said Continental had “a good operational start to the year, increasing our profitability in both Tires and ContiTech.”

Net income nearly tripled to €200 million from €68 million, while adjusted free cash flow improved to €35 million from -€216 million.

The group benefited from the "focus on high-margin products, strict cost discipline and lower raw material costs,” explained the outgoing CFO Roland Welzbacher.

Welzbacher, however, warned that “it will take time for recent changes in raw material prices to have an impact.”

Tire

The Tires division reported sales of €3.253 billion, down 4.7% from €3.412 billion in the first quarter of 2025.

Segment earnings increased 1.8% to €662 million (€650 million), while adjusted EBIT rose 2.2% to €467 million from €457 million, lifting margin to 14.4% from 13.4%.

Here, the group said strong price/mix compensated for negative impacts from forex and negative volumes, while “lower raw material costs resulted in a ‘mid-double digit million euro tailwind’.”

ContiTech

ContiTech sales fell sharply by 24.4% to €1.159 billion from €1.534 billion, mainly due to the divestment of the OESL business and negative currency effects.

Amid the drop in sales, earnings declined 56.1% to €36 million, while adjusted EBIT increased 17.9% to €92 million from €78 million, with margin improving to 7.9% from 6.2%.

Continental said the improvement was driven by “a focus on high-margin products, a strong trading business and lower raw material costs,” alongside “measures taken to safeguard earnings.”

The German group confirmed its full-year outlook, expecting sales of €17.3 billion to €18.9 billion and an adjusted EBIT margin of 11.0% to 12.5%.

The group warned, however, that geopolitical risks remain elevated.

The Middle East conflict, it said, is expected to have a “low-to-mid triple-digit million euro” gross impact on the Tires business, mainly through higher raw material costs from the second quarter.

Continental said its mitigation measures include “efficiency improvements… safety stocks for critical raw materials, and commercial measures.”

Geopolitical developments are “creating greater uncertainty for consumers and for the economy as a whole,” said Koetz, adding that Continental would continue “to work hard on increasing our competitiveness.”