Continental's Auto Portfolio Transformation Costs Not Recoverable; Downgrade Moat Rating to None

Continental is going through a period of portfolio optimization to create a more agile company that can compete more effectively in the competitive automotive market. This began with the spinoff of the group’s powertrain unit, Vitesco Technologies, in 2021. The spinoff of the automotive segment planned for the end of 2025 will create two businesses—automotive and rubber (tires and ContiTech) of equal size. In addition, the group is looking for a buyer for the underperforming original equipment solutions automotive-exposed business within ContiTech. Following the automotive spinoff, there is also the possibility of carving out the automotive’s digital screens division.