Continental’s Tires group sector delivered a strong second quarter in 2026, with adjusted EBIT climbing 35.1% year-on-year to €570 million — pushing the adjusted EBIT margin to 12.9%, up from 9.6% in Q2 2025. The result came alongside a transformative strategic move: Continental signed an agreement in early July to sell its ContiTech industrial division to Lone Star Funds for €4.0 billion, marking the company’s final step in becoming a pure-play tyre manufacturer after 156 years of diversified operations.
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Q2 2026 Financial Highlights
Continental’s overall Group sales fell to €4.4 billion in Q2 2026, down 9.1% from €4.9 billion a year earlier. However, this decline was largely structural: the company sold its Original Equipment Solutions (OESL) business area in February 2026, removing a significant revenue chunk. Excluding exchange-rate effects and portfolio changes, organic sales were roughly flat, declining just 0.3%.
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Consolidated sales | €4.4 billion | €4.9 billion | −9.1% |
| Adjusted EBIT | €570 million | €422 million | +35.1% |
| Adjusted EBIT margin | 12.9% | 9.6% | +3.3 ppts |
| Net income | €274 million | €506 million | −45.9% |
| Adjusted free cash flow | €216 million | −€46 million | Positive swing |
Net income dropped to €274 million from €506 million, but Continental attributes this primarily to the spin-off of Aumovio — its former Automotive group sector, listed on the Frankfurt Stock Exchange in September 2025. Adjusted free cash flow turned sharply positive at €216 million, compared to a €46 million outflow in Q2 2025.
According to Continental CFO Roland Welzbacher, the main drivers behind the improved Tires margins were a higher share of tyres measuring 18 inches and above, favourable raw-material pricing, and lower-than-expected exchange-rate and tariff impacts.
ContiTech Sale: Continental Becomes a Tyre-Only Company
The structural headline from the Q2 report is the ContiTech divestiture. On July 4, 2026, Continental announced it would sell its ContiTech industrial group sector to Lone Star Funds for €4.0 billion, with an additional performance-based component of up to €250 million. The deal represents the final stage of a multi-year portfolio overhaul that included the spin-off of the Automotive division as Aumovio (2025) and the earlier sale of the OESL business (February 2026).
CEO Christian Kötz described the moment plainly: “Now, we are in the final phase of our realignment as a pure-play tire manufacturer.” ContiTech — which makes industrial belts, hoses, and material solutions — has been part of the Continental group for decades. Once the sale closes, Continental’s portfolio will consist entirely of tyres: passenger, truck, two-wheel, and specialty segments.
Market Conditions: Europe Up, North America Down
The broader tyre market remained mixed in Q2 2026. The European replacement-tyre market for passenger cars and light commercial vehicles grew 3% — partly driven by import activity. North America’s replacement-tyre market declined 1%, and global automotive production fell approximately 1% year-on-year. These headwinds kept organic revenue roughly flat despite the profitability improvements in the Tires segment.
Continental also flagged a forward risk: raw-material costs are expected to increase substantially in the second half of 2026. The company has taken preparatory steps, though no specifics were provided. The full-year guidance for the Continental Group now excludes ContiTech, following the July sale agreement.
What This Means for Tyre Buyers
The sharper focus on tyres suggests Continental is betting on higher-margin, technology-led products rather than industrial diversification. The growing share of 18-inch-and-above tyres — a key profitability driver cited by management — reflects the market shift toward larger wheels, where Continental already holds OE positions on EV platforms such as the Škoda Elroq. A leaner Continental focused entirely on tyres may channel more R&D into areas like EV-specific compounds, noise reduction, and range optimisation — rather than splitting resources across rubber hoses and conveyor belts.