Continental

€41.7 billion in sales, adjusted EBIT up 6% to €2.8 billion, and a strategic autotomy that would make a lizard envious. Continental is shedding its Automotive division—€18-20 billion in annual revenue—to become a pure-play tire company by end of 2025. The Automotive segment generated 2.5-4.0% EBIT margins while Tires delivered 13.3-14.3%. That margin differential isn't market conditions; it's evolutionary divergence. Tires benefit from aftermarket recurring revenue, established brand moats (original equipment wins create replacement loyalty), and commoditized production that scales predictably. Automotive suppliers face technological disruption (electric powertrains eliminate transmission businesses), customer concentration (Tesla, Chinese EV makers bypass traditional suppliers), and brutal margin pressure from OEMs offloading their own cost problems.

The autotomy follows biological logic: when a predator grabs your tail, sacrifice the limb to preserve the organism. Continental already spun off Aumovio, sold Original Equipment Solutions, and initiated the ContiTech sales process for 2026. What remains is Hanover's 150-year tire legacy, €14.6 billion in annual sales, and metabolic focus. The company is investing €300+ million to expand Thailand production capacity by 3 million tires annually, targeting electric vehicle growth in Asia-Pacific where Continental supplied OE tires to nine of the top ten EV manufacturers. That's niche specialization, not diversification—betting that EVs still need tires even as they eliminate everything else Continental made.

The €2.50 proposed dividend (up from €2.20) signals confidence in the coppiced organism's regenerative capacity. Free cash flow exceeded annual targets "mainly due to our good tire business and positive cash contribution from Automotive," per CFO Olaf Schick. The Automotive unit contributed positively while being sold—a rarity in divestitures. Continental projects 2025 sales of €38-41 billion with 6.5-7.5% EBIT margins, up from current levels. The math is counterintuitive: shrinking revenue, expanding margins. But that's autotomy's advantage. The shed limb carried costs (R&D for electric vehicle components, capital for factories serving fragmenting platforms) that exceeded contribution. What grows back is specialized, focused, and adapted to a narrower niche where Continental maintains competitive advantage.