Continental financial results – tyre group drives earnings, despite softening replacement sales

Continental’s half-year report shows that its Tires group sector is driving earnings, with 88 per cent of adjusted EBIT from tyre sales. “Despite difficult market conditions, our Tires group sector ended the second quarter with good earnings once again. ContiTech’s performance remained solid. Earnings in Automotive, however, fell short of expectations. Here we will need to make up considerable ground in the second half of the year. By doing so, we will also improve our consolidated margin,” commented Continental CEO Nikolai Setzer.

In this context, declining replacement tyre volumes represent something of an issue, though Conti managed to increase quarter two sales 2.3 per cent to 3.5 billion euros, thanks largely to its share of premium tyre sales. Conti Tires group’s Q2 adjusted EBIT margin was 13.7 per cent, 0.1 point down from the same quarter in 2022. Over the half year, this meant Continental increased its tyre sales by another 3.7 per cent to 6.9 billion euros, with an adjusted EBIT for down 8.4 per cent. and EBIT margin that was 1.9 per cent lower. It remained 13.6 per cent at the end of June.

Setzer said he was not dissatisfied with the second quarter overall, saying that it “closed the second quarter in the Tires division with a good result”, despite difficult conditions.

Continental also pointed out that it had become the first manufacturer to launch a production tyre with a high share of sustainable materials in the UltraContact NXT. With up to 65 per cent renewable and recycled materials, and a highest possible energy efficiency rating of A on the EU tyre label, the UltraContact NXT represents a forwards step for the industry in terms of sustainability. The tyre has been available to European dealers since July 2023.