Continental revises down profitability targets on trade turbulence

By Rachel More

BERLIN, June 24 (Reuters) - German car parts supplier Continental CONG.DE revised down profitability targets for its core tyre business and with it the broader group on Tuesday, pointing to currency effects and increasing trade barriers.

The company now sees its 2025 adjusted EBIT margin for tyres in a range of 12.5 to 14%, compared with a previously forecast 13.3-14.3% range, it told investors at the group's capital markets day.

The adjusted EBIT margin for the group this year is now expected to fall in a range of 10 to 11%, compared with a previously forecast 10.5-11.5% range.

The new outlook takes into account current U.S. import tariffs, the company said.

Continental also confirmed plans to sell its ContiTech rubber and plastics division next year, as it works to pare back the company into a pure-play tyre maker.

A ContiTech sale could bring in 4.5 billion euros ($5.2 billion), corresponding with the business's 2024 sales, according to Bernstein analysts' numbers.

"Unfortunately, the reasons for our internal transformation are also increasing every day," CEO Nikolai Setzer told reporters, pointing to macroeconomic challenges for the industry and geopolitical turbulence, with tariffs weighing on its supply chain.

The company is also planning a spinoff of its automotive business, under the new name Aumovio, with a planned listing in September.

"We already have a date. Our preparations are taking very firm shape," CFO Olaf Schick said, adding that Aumovio would announce details in due course.

Aumovio CEO Philipp von Hirschheydt said the newly carved out company hopes to ramp up sales by some 22% based on 2024 levels to over 24 billion euros in the long term.

($1 = 0.8627 euros)