2018 Fact BookInvestor Presentation
www.continental-corporation.comM A I N PA R T N E R
Contents
I. Continental at a Glance
Title Page
Disclaimer 8
More than 145 Years of Progress and Achievement 9
Continental Corporation – Sales, EBIT and Net Income 9
Continental No. 3 in Worldwide Supplier Ranking 10
Executive Board 10
Megatrends in the Automotive Industry 11
A Leading Global Supplier for Key Automotive Electronics Applications 11
A Leading Global Supplier of Tire and Non-Tire Rubber Products 12
Sales by Market 12
EBITDA by Group and Corporation 13
Consolidated Sales 13
Number of Employees 14
II. Continental Strategy
Title Page
Corporate Strategy at a Glance 15
Transformation of Existing Organization – Holding Structure 15
Sustainable Value Creation 16
Cost Consciousness – Production in Best-Cost Countries 16
Balanced Distribution of Sales 17
Top Position for Growing Automotive Technologies 17
Continental Corporation Worldwide 18
Sales OE Automotive/Non-OE Automotive 18
Technological Balance 19
The Same Values Worldwide for a Shared Corporate Culture 19
© Continental AG 2018 Fact Book | 1
Contents
III. Automotive Trends
Title Page
The Most Digitalized Portfolio in The Supplier Sector 20
Automotive Trends: Automated Driving
Road Traffic Deaths per 100,000 Inhabitants by Region 21
History and Roadmap for Accident-Free Driving 21
Outlook 2025 - Approaching Automated Driving: Three-Layer Model 22
Estimated Market Development 22
ADAS Sensors per Car 23
Function and Sensor Scenarios 23
Self Driving Car Project CUbE 24
Automotive Trends: Holistic Connectivity
Information Management – Inside the Vehicle and Beyond 24
Product Highlights for Intelligent Mobility 25
Portfolio Extension towards Systems and Services 25
Holistic Connectivity Car 26
From Specific ECU Architecture to High Performance Computing 26
Central Processing Unit in a Server-based Architecture 27
IV. Sustainability at Continental
Title Page
Sustainability Governance 28
Our Key Policies and Guidelines 28
Quality First – Reliable Products by Continental 29
Innovative Products – Sustainable Mobility: Clean, Safe & Affordable 29
Environmental Management: Reduction of Inputs and Outputs until 2020 30
Human Relations Strategy to Enable Business 30
Employee Management: Key Indicators 31
Human Rights: Clear Expectations at Continental 31
Supply Chain Management 32
Diversification of Sourcing: Rubber from Dandelions 32
Social Responsibility: Contributing to a Variety of Initiatives, Activities and Projects
Worldwide
33
Ratings and Indexes 33
Continental’s Memberships 34
© Continental AG 2018 Fact Book | 2
Contents
V. Corporate Governance
Title Page
Two-Tier Board System – Corporate Bodies 35
Executive Board of Continental AG 35
Remuneration of an Executive Board member 36
Remuneration of a Supervisory Board member 36
DVFA Scorecard / German Corporate Governance Code 37
VI. Continental Corporation
Title Page
Key Consolidated Figures 38
Sales and Adjusted EBIT by Quarter 38
Key Historical Credit Metrics 39
Net Indebtedness and Gearing Ratio 39
Gross Indebtedness by Source at YE 2018 (€ mn) 40
Maturities for Bonds (€ mn) 40
Purchasing – Production Materials 2018 41
VII. Market Data
Title Page
Installation Rates of Keyless Entry Systems 42
Installation Rates of Multimedia Systems 42
Sensors per car of Advanced Driver Assistance Systems 43
Rising Volumes of Head-Up Displays 43
Production of Passenger Cars and Light Commercial Vehicles (<6t) 44
Production of Medium and Heavy Commercial Vehicles (>6t) 44
Replacement Tires – Passenger Cars and Light Commercial Vehicles (<6t) 45
Replacement Tires – Medium and Heavy Commercial Vehicles (>6t) 45
© Continental AG 2018 Fact Book | 3
Contents
VIII.1. Automotive Group – Chassis & Safety Division
Title Page
Business Units and Key Products 51
Locations Worldwide 51
Key Figures 52
Sales by Market 52
Market-Specific Initiatives – Towards Safer Mobility (1) 53
Market-Specific Initiatives – Towards Safer Mobility (2) 53
Global Development of Active Safety Regulations 54
Global Development of Active Safety Regulations and Ratings 54
NCAP Roadmap 55
Market Position Electronic Brake Systems in 2018 55
Market Position for Foundation Brake Systems in 2018 56
Market Position for Actuation in 2018 56
Market Position for Airbag Electronics in 2018 57
Market Position for Advanced Driver Assistance Systems in 2018 57
VIII. Automotive Group
Title Page
Key Figures 46
Sales and Adjusted EBIT by Division 47
Sales by Market 47
Order Intake (LTS) in the Automotive Group of Around €40 bn in 2018 48
Order Intake Well Balanced 48
Digitalization Causes Sustained High R&D and Capex 49
Order Intake Drives Sustainable Growth 49
Production of Passenger Cars and Light Trucks (<6t) 50
© Continental AG 2018 Fact Book | 4
Contents
VIII.3. Automotive Group – Interior Division
Title Page
Business Units and Key Products 62
Locations Worldwide 63
Key Figures 63
Sales by Market 64
Examples of Market-Specific Initiatives and Projects 64
Market Position for Body & Security in 2018 65
Market Position for Instrumentation & Driver HMI in 2018 65
Market Position for Infotainment & Connectivity in 2018 66
Market Position for Commercial Vehicles in 2018 66
VIII.2. Automotive Group – Powertrain Division
Title Page
Business Units and Key Products until December 31, 2018 58
New Powertrain Reporting Structure Starting January 1, 2019 59
Locations Worldwide 59
Key Figures 60
Sales by Market 60
Regulations to reduce CO2 Emissions in New Vehicle Fleets 61
New Management Structure 61
© Continental AG 2018 Fact Book | 5
Contents
IX.1. Rubber Group – Tire Division
Title Page
Business Units and Tire Brands 74
Key Figures 74
Sales by Markets 75
Winter Tire Regulations 75
Tire Labeling Initiatives in Europe, USA, Japan, South Korea and Brazil 76
Tire Labeling Initiatives in Gulf Countries and China 76
Market Share for Passenger and Light Truck Tires in 2018 77
Market Share for Truck Tires in 2018 77
Continental Worldwide PLT Production in 2018 78
Continental European PLT Production in 2018 78
Continental Worldwide Truck Tire Production in 2018 79
Cost of Labor at Continental Manufacturing Sites 79
Product Mix Improvement 80
Passenger and Light Truck Tires: Unit Sales 2013 – 2018 80
Commercial Vehicle Tires: Unit Sales 2013 – 2018 81
IX. Rubber Group
Title Page
Key Figures 67
Sales and Adjusted EBIT by Division 68
Sales by Market 68
Opportunities and Challenges – Rising Demand vs. Rather Stable Tire Capex 69
Growth Opportunities – Improving Tire Mix due to rising SUV & Pickup Share 69
Additional Tire Production Capacity of around 37mn Units by 2020/21 70
Update on 2025 Strategy 70
Balanced Global Manufacturing Footprint 71
Strategy 2025: Globalize Growth (mn units) 71
Relevant Market and Growth Opportunities for ContiTech Products 72
Strong Track Record of Acquiring and Integrating Operations 72
Raw Material Prices 73
© Continental AG 2018 Fact Book | 6
Contents
X. Share and Bond Information
Title Page
Share Data / ADR Data 86
Share Price Development vs. Major Stock Indexes 86
Common Stock 87
Shareholder Structure 87
Bond Data 88
Development of the Bonds 88
Earnings and Dividend per Share; Payout Ratio 89
Development of Continental’s Credit Rating 89
10 Year Financial Overview 90
XI. Glossary
Title Page
Financial Glossary 91
Product and Division Glossary 91
Contact 92
Financial Calendar 92
IX.2. Rubber Group – ContiTech Division
Title Page
Business Units and Key Products 82
Forming a Global Player in Rubber and Plastics Technologies 82
Sales Distribution by Business Unit 2018 83
Locations Worldwide 83
Key Figures 84
Sales by Market 84
Costumer and Competence Fields 85
© Continental AG 2018 Fact Book | 7
Disclaimer
› This presentation has been prepared by Continental Aktiengesellschaft and includes information available to us as of March 7, 2019. It has not been independently verified. It does not constitute an offer, invitation or recommendation to purchase or subscribe for any shares or other securities issued by Continental AG or any subsidiary and neither shall any part of it form the basis of, or be relied upon in connection with, any contract or commitment concerning the purchase or sale of such shares or other securities whatsoever.
› Neither Continental Aktiengesellschaft nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss that may arise from any use of this presentation or its contents or otherwise arising in connection with this presentation.
› This presentation includes assumptions, estimates, forecasts and other forward-looking statements, including statements about our beliefs and expectations regarding future developments as well as their effect on the results of Continental. These statements are based on plans, estimates and projections as they are currently available to the management of Continental. Therefore, these statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Furthermore, although the management is of the opinion that these statements, and their underlying beliefs and expectations, are realistic as of the date they are made, no guarantee can be given that the expected developments and effects will actually occur. Many factors may cause the actual development to be materially different from the expectations expressed here. Such factors include, for example and without limitation, changes in general economic and business conditions, fluctuations in currency exchange rates or interest rates, the introduction of competing products, the lack of acceptance for new products or services and changes in business strategy.
› All statements with regard to markets or market position(s) of Continental or any of its competitors are estimates of Continental based on data available to Continental. Such data are neither comprehensive nor independently verified. Consequently, the data used are not adequate for and the statements based on such data are not meant to be an accurate or proper definition of regional and/or product markets or market shares of Continental and any of the participants in any market.
› Unless otherwise stated, all amounts are shown in millions of euro. Please note that differences may arise as a result of the use of rounded amounts and percentages.
› Note: Due to the application of the modified retrospective approach during first time adoption of IFRS 9, Financial Instruments, and IFRS 15, Revenues from Contracts with Customers, as at January 1, 2018, all the figures from comparative periods are shown unadjusted.
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
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3835
© Continental AG 2018 Fact Book | 8
I. Continental at a GlanceMore than 145 Years of Progress and Achievement
Merger with major companies of the German rubber industry to form ContinentalGummi-Werke AG.
Acquisition of a US company’s Automotive Brake & Chassis unit, the core of which is Alfred Teves GmbH in Frankfurt.
Continental-Caoutchouc- and Gutta-Percha Compagnie is founded in Hanover, Germany.
Continental expands its tire operations by integrating Uniroyal, Semperit, General Tire and Barum.
Continental reinforces its activities by acquiring Temic, the international electronics specialist.
Continental acquires Siemens VDO Automotive AG and advances to among the top five suppliers in the automotive industry worldwide.
Continental expands its activities in telematics and other fields by acquiring the automotive electronics business from Motorola.
Acquiring Phoenix further specializes ContiTech in the field of rubber and plastics technology.
Continental acquires a majority interest in the Slovak company Continental Matador Rubber s.r.o.
Continental acquires Parker Hannifin’s automotive air conditioning business, the conveyor belt producer Legg Company and the conveyor belt activities of Metso.
Continental intensifies its operations as a complete system supplier for exhaust after-treatment by acquiring Emitec.
Continental strengthens its position in the fleet management service business by acquiring Zonar.
Continental reinforces ContiTech by acquiring Hornschuch.
Continental acquires the Singapore-based mobility intelligence provider Quantum Inventions.
Continental strengthens its position in rubber and plastic technology by acquiring Veyance Technologies.
Continental expands software and systems expertise through the acquisition of Elektrobit.
Continental reinforces its activities by acquiring the Hi-Res 3D Flash LIDAR business from Advanced Scientific Concepts.
Continental expands its cyber security expertise through the acquisition of Argus Cyber Security.Continental reinforces the
Tire division by acquiring Hoosier.
Continental expands its expertise in vehicle antennas by acquiring Kathrein Automotive GmbH.
Continental acquires Anti-Vibration Systems (AVS) to strengthen its presence in the anti-vibration technology and noise isolation sector.
Continental expands its Australian tire sales network through the acquisition of Kmart Tyre and Auto Service chain (KTAS).
1871
1929
1979198519871993 1998
2001
2004
2006 200720122013
2015
2014 2016 2017
2018
I. Continental at a GlanceContinental Corporation – Sales, EBIT and Net Income (NIAT)
1Net income attributable to the shareholders of the parent, from 1998 until 2003 US GAAP / from 2004 onwards IFRS.2Siemens VDO incorporated starting December 1, 2007.IAS 19 (rev. 2011) applied starting 2013. The 2012 figures have been restated accordingly. IFRS 9 and IFRS 15 applied starting 2018.
11,534 12,597 13,837 14,887 16,619
24,239
20,096
26,047
30,505 32,736 33,331 34,506
39,232 40,549 44,009 44,404
855 1,157 1,507 1,602 1,676
-296 -1,040
1,935 2,597 3,186 3,264 3,3454,116 4,096 4,562 4,028
314 716 930 982 1,021
-1,124 -1,649
576 1,242 1,905 1,923 2,375 2,727 2,802 2,985 2,897
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
US GAAP IFRS
Sales
EBIT
NIAT1
2
€ mn
© Continental AG 2018 Fact Book | 9
0
10
20
30
40
50
RobertBosch
Denso Continental Magna ZF AisinSeiki
Bridgestone HyundaiMobis
Michelin Valeo
I. Continental at a GlanceContinental No. 3 in Worldwide Supplier Ranking
Top 10 Global OEM Suppliers – 2018 Sales (€ bn)
1 2 3 4
1 Robert Bosch only includes Mobility Solutions division.2 Continental not including ContiTech industrial business and other non-OE automotive business.3 ZF excluding Industrial Technology business.4 Bridgestone including Diversified Products.Source: Company filings and estimates. Calendarized to Dec. year-end. Based on average currency exchange rates 2018.
I. Continental at a GlanceExecutive Board Dr. Elmar Degenhart
Chairman of the Executive BoardCorporate Functions:Corporate Communications, Corporate Quality and Environment, Continental Business System
Frank Jourdan Chassis & Safety Division
Helmut MatschiInterior Division
Christian KötzTire Division Corporate Functions: Corporate Purchasing
Dr. Ariane ReinhartCorporate Functions:Human Relations and Director of Labor Relations, Sustainability
Hans-Jürgen DuensingContiTech Division
Wolfgang Schäfer Corporate Functions:Finance, Controlling, Compliance, Law, IT
Nikolai SetzerSpokesman of the Automotive Board, Central Functions Automotive
© Continental AG 2018 Fact Book | 10
I. Continental at a GlanceMegatrends in the Automotive Industry
Clean –For Clean Power
Intelligent –For Intelligent Driving
Safe –For Safe Mobility
CO2 Fleet Emission Targets 2020/21 (NEDC)2
Road Traffic DeathsNumber of Road Traffic Deaths per 100,000 Inhabitants by Region1
Connectivity
Europe3 95g/kmUSA 119g/kmChina 117g/km
Europe and Russia 9.3Eastern Mediterranean 18.0Americas 15.6Africa 26.6South East Asia 20.7Western Pacific 16.9 Vehicle
Driver andPassenger Devices
Infrastructure
OtherVehicles
2 New European Driving Cycle.3 Mandatory for 95% of the OEMs’ fleets.Source: ICCT Int. Council of Clean Transportation, Global Passenger Vehicle FE/GHG regulations (1/2019).
1 Data based on framework created by the World Health Organization (WHO) for estimating road traffic mortality.Source: Global Status Report on Road Safety, WHO 2018.
I. Continental at a GlanceA Leading Global Supplier for Key Automotive Electronics Applications
› Actuation› Advanced driver assistance systems (ADAS)› Airbag electronics› Electronic brake systems (EBS)› Foundation brake systems
› Diesel injection systems› Gasoline injection systems› Transmission control units› 48V and plug-in hybrid› Full electric vehicle
› Body and security products› Commercial vehicle interiors› Device connectivity and telematics units› Instrumentation, displays
and human machine interfaces› Intelligent transport systems
Chassis & Safety
Sales 2018 €9,588 mn% of total 21%Adj. EBIT1 €785 mnAdj. EBIT margin 8.2%
Powertrain Interior
Sales 2018 €7,741 mn% of total 17%Adj. EBIT1 €202 mnAdj. EBIT margin 2.6%
Sales 2018 €9,707 mn% of total 22%Adj. EBIT1 €899 mnAdj. EBIT margin 9.3%
ADAS installation rate worldwide (sensors per car)2 Market for automotive electronics3 (USD bn)
1 Before amortization of intangibles from PPA, consolidation and special effects.2 Average amount of ADAS sensors including sensing rear/surround view cameras but w/o parking assist functions based on ultrasonic technology.3 Source: Strategy Analytics: Automotive Electronics System Demand, Oct 2018.
CAGR 8%2862018
4132023E
CAGR 13%1.52018
2.82023E
© Continental AG 2018 Fact Book | 11
I. Continental at a GlanceA Leading Global Supplier of Tire and Non-Tire Rubber Products
1 Before amortization of intangibles from PPA, consolidation and special effects.
Tires ContiTech› Air springs for railway, trucks and buses› Automotive hoses and hose lines› Automotive interior trim› Conveyor belts› Elastomer coatings› Industrial hoses› Multiple V-ribbed belts and timing belts› Vibration absorbers
Sales 2018 €6,345 mn% of total 14%Adj. EBIT1 €473 mnAdj. EBIT margin 7.6%
Sales breakdown Sales breakdown
Sales 2018 €11,352 mn% of total 26%Adj. EBIT1 €1,900 mnAdj. EBIT margin 16.8%
Passenger & Light Truck Tires Commercial Vehicle Tires
Markets
› EMEA › The Americas › APAC
Products
› Original Equipment› Replacement
› Summer tires, winter tires, high-performance tires
› Original Equipment› Replacement
› Commercial Specialty Tires
72% Non-OE 28% OE 49% Non-OE 51% OE
I. Continental at a GlanceSales by Market
Automotive Group 2018€26,856 mn
Rubber Group 2018€17,603 mn
Corporation 2018€44,404 mn
Germany22%
Europe(excluding Germany)
25%
North America
23%
Asia28%
Other markets2% Germany
17%
Europe(excluding Germany)
36%
North America
27%
Asia14%
Other makets6%
Germany20%
Europe(excluding Germany)
29%
North America
25%
Asia22%
Other markets4%
© Continental AG 2018 Fact Book | 12
I. Continental at a GlanceEBITDA by Group and Corporation
Automotive Group 2018€3,177 mn
Rubber Group 2018€3,197 mn
Corporation 2018€6,236 mn
Chassis & Safety38%
Powertrain18%
Interior44%
Chassis & Safety19%
Powertrain9%
Interior22%
Tires39%
ContiTech11%
Tires78%
ContiTech22%
I. Continental at a GlanceConsolidated Sales
2014 2015 2016 2017 2018Germany Rest of Europe North America Asia Other markets
2014 2015 2016 2017 2018Chassis & Safety Powertrain Interior Tires ContiTech
by Market by Division€ bn € bn40.5
34.5
39.2 3%
5%
5%21%
20%
20%
26%22%
26%
29%30% 28%
21%23% 21%
40.5
34.5
39.214%
14%
26%
28%26%
20%20%
21%
18%19%
18%
22%22% 21%
14%
26%
21%
17%
22%
44.044.04%
22%
25%
29%
20%
11%
44.44%
22%
25%
29%
20%
14%
26%
22%
17%
21%
44.4
11%
IFRS 9 and IFRS 15 applied starting 2018.
© Continental AG 2018 Fact Book | 13
I. Continental at a GlanceNumber of Employees
2014 2015 2016 2017 2018Germany Rest of Europe North America Asia Other markets
2014 2015 2016 2017 2018Chassis & Safety Powertrain Interior Tires ContiTech
189,168207,899
220,137
5%5%
4%4%
19%19%
19%19%
16%18% 19%
19%
32% 31% 32% 32%
28% 27% 26% 26%
18%21%
19%20%
25% 24%24%
23%
19% 19% 20% 20%
18% 17% 17% 17%
20% 19% 20% 20%
by Market by Division235,473
189,168207,899
220,137235,4734%
20%
18%
32%
26%
243,226
19%
23%
20%
18%
20%
243,226
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI. 9Continental StrategyII. 15Automotive TrendsIII. 20
IV. 28
VII. 42VIII. 46IX. 67X. 86XI. 91
Topics
Corporate GovernanceV.Continental CorporationVI. 38
35
© Continental AG 2018 Fact Book | 14
II. Continental StrategyCorporate Strategy at a GlanceHoshin Kanri matrix
Vision
Growth forces
Growth driven by our innovative software for systems solutions
Customers
Your mobility. Your freedom.Our signature.
ProcessesThe leading quality and technology company in our industries
EmployeesPerceived as most attractive and most progressive employer
Long-term goals of business units, divisions, corporate functions
Goals
Projects and measures for achieving goals
Initiatives
Monitoring of implementation of
initiatives
7 strategic dimensions
› Value creation› Regional sales balance› Top market position› In the market for the market
› Balanced customerportfolio
› Technological balance› Great people culture
Metrics
Corporate strategy
II. Continental StrategyTransformation of Existing Organization – Holding Structure
From 2020 onwards
Automotive Technologies
Rubber Technologies
PowertrainTechnologies
Continental Group
› Ensure long-term competitiveness andincrease strategic flexibility
› Maintain a strong network with commonvalues
› Maintain focus on most efficient valuecreation
› Take into account interests of allstakeholders
Autonomous Mobility and
Safety
Vehicle Networking
and Information
Tires ContiTech VitescoTechnologies
© Continental AG 2018 Fact Book | 15
II. Continental Strategy – Value CreationSustainable Value Creation
19,7
67
19,9
83
20,1
06
20,4
53
20,9
78
21,4
01
21,8
86
22,1
72
22,3
97
22,8
11
23,2
56
23,6
41
21.1% 21.2%18.9% 20.0% 20.0% 19.0%
20.6% 20.6% 19.8% 19.4%18.3% 17.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2016 2017 2018
Trailing OA (€ mn) Trailing ROCE
1 Trailing operating assets are calculated as assets for the last twelve months.2 Trailing ROCE is calculated as reported EBIT for the last twelve months divided by trailing operating assets.
1 2
II. Continental Strategy – Value CreationCost Consciousness – Production in Best-Cost Countries
68% 61%
97%
52% 52%72% 64%
93%
54% 51%
Rest of world
2015 20181 Based on sales.2 Based on units.
35%26%
43%
75%
39%40% 36%46%
78%
36%
Europe
Chassis & Safety1 ContiTech1Interior1 Tires2Powertrain1
Chassis & Safety1 ContiTech1Interior1 Tires2Powertrain1
© Continental AG 2018 Fact Book | 16
II. Continental Strategy – Regional Sales BalanceBalanced Distribution of Sales
2018 Target(medium and long term)
≤ 45%Europeand other countries22% Asia
The Americas28%
Europeand other countries 50% ≥ 30%
≥ 25%
II. Continental Strategy – Top Market PositionTop Position for Growing Automotive Technologies
› Our Goal: To be among the three leading suppliers in terms of customer focus, quality and market share in the long term in all relevant markets.
› Chassis & Safety › Among the top three for Electronic Brake Systems, Foundation Brake Systems, Actuation, Airbag Electronics and Advanced Driver Assistance Systems worldwide
› Powertrain › One of the world‘s leading powertrain suppliers
› Interior › Among the top three for Body & Security, Instrumentation & Driver HMI, Infotainment & Connectivity and Commercial Vehicles worldwide
› Tires › Number four in the world, while we are also in top positions in individual segments and markets in this area
› ContiTech › Global leader in rubber and plastics technologies
› How our divisions are positioned:
© Continental AG 2018 Fact Book | 17
II. Continental Strategy – In the Market for the MarketContinental Corporation Worldwide
Locations are defined as the postal addresses of companies under our control.
II. Continental Strategy – Balanced Customer Portfolio Sales OE Automotive/Non-OE Automotive
98%
99%
90%
28%
51%
Chassis & Safety
Powertrain
Interior
Tires
ContiTech
OE Non-OE
2018: Sales OE Automotive/Non-OE Automotive by Division
2018
Other sectors and end customers28%
Original equipment manufacturers (OEMs)72%
~40%
~60%
Target(medium and long term)
© Continental AG 2018 Fact Book | 18
II. Continental Strategy – Technological BalanceTechnological Balance
Compound annual growth rate
Introduction Growth Maturity Saturation
≥ 5 - 10% 0 - 10% ≤ 0% Time
Technology life cycle Technology portfolio share of sales in %
II. Continental Strategy – Great People CultureThe Same Values Worldwide for a Shared Corporate Culture
FreedomTo Act Trust
PassionTo Win
For One Another
© Continental AG 2018 Fact Book | 19
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246678691
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Competitor 10
Competitor 9
Competitor 8
Competitor 7
Competitor 6
Competitor 5
Competitor 4
Competitor 3
Competitor 2
Competitor 1
ContinentalAutomotive
Today: Electronics/Sensors/Software products as share of sales
III. Automotive TrendsThe Most Digitalized Portfolio in the Supplier Sector1
Source: Company filings and Continental estimates.1 Suppliers >€3 bn sales.
© Continental AG 2018 Fact Book | 20
III. Automotive Trends: Automated DrivingRoad Traffic Deaths per 100,000 Inhabitants by Region1
1 Source: World Health Organization (WHO) – Global Status Report on Road Safety 2018. Road traffic fatality rates per 100,000 population by WHO region.
WesternPacific
Africa South-East Asia
Eastern Mediterranean
Europe and Russia
Americas
millionA furtherare injured
millionpeople
Over
die in road accidents every year
per 100,000 population
26.6
18.0
20.715.6
9.3
16.9
1.35
III. Automotive Trends: Automated DrivingHistory and Roadmap for Accident-Free Driving
Source: Federal Statistics Office, Germany (Destatis);ABS = Anti-lock Brake System, ESC = Electronic Stability Control , BA = Brake Assist, ACC = Adaptive Cruise Control, LDW = Lane Departure Warning, AEB = Autonomous Emergency Braking.
0
5,000
10,000
15,000
20,000
25,000
1953 1963 1973 1983 1993 2003 2013
3,220
1973: Safety Seat Belt
1978: ABS1982: Airbag
1985: Front Passenger Airbag
1995/96: ESC, BA, Euro NCAP1998: ACC 2001: LDW
2006: AEB
Traffic Fatalities and Introduction of Safety Applications in Germany 1953 – 2018
2018
© Continental AG 2018 Fact Book | 21
III. Automotive Trends: Automated DrivingOutlook 2025 – Approaching Automated Driving: Three-Layer Model
1 Source: Continental estimates.
Market for Automated Driving ~€30 bn1 by 2025
Recent additions to the portfolio (incl. cooperations and JVs)
Components
System
Environmental Model
~€21 bn1
~€9 bn1
Sensors
ElectronicsSoftwareIntegration
BMW platformNTT Docomo
Baidu
easyMile
HUAWEI
solid-state high resolution lidar
ADCU
NVIDIA
III. Automotive Trends: Automated DrivingEstimated Market Development
Passenger Car & Light Truck production (mn units)
0
20
40
60
80
100
120
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
1 Wide range of functionalities from “Base” to “Premium”.
1
© Continental AG 2018 Fact Book | 22
III. Automotive Trends: Automated DrivingADAS Sensors per Car
Short-rangeRadar
Surround View
Ultrasonicsensors3
Camera
3D Flash Lidar
Long-rangeRadar
Sensors per car
Level 4/5Level 3Level 1/2
441
401
>352
24-322
18-222
BMW
GM
1 Source: https://www.bmwgroup.com/content/dam/bmw-group-websites/bmwgroup_com/ir/technologie_workshops/Technology_Workshops_Autonomous_Driving.pdf https://www.gm.com/content/dam/gm/events/docs/5265893-685163-Chartset-11-30-2017.
2 Continental estimates, depending on customers and future regulatory requirements.3 Ultrasonic sensors not in Continental portfolio.
Continental
III. Automotive Trends: Automated DrivingFunction and Sensor Scenarios1
› Autonomous emergency braking (incl. intersections)
› Adaptive cruise control(Anticipatory and cooperative ACC)
› Lane keeping / change assist› Traffic jam assist› Back-up assist› Parking assist› Remote parking
L1/2Additionally to L2:› Cruising chauffeur› Traffic jam chauffeur
L3Conditionally automated
Additionally to L3:› Urban chauffeur (e.g. Robo Cabs)› Cruising chauffeur (Enhanced)› Traffic jam chauffeur (Enhanced)› Automated parking
(e.g. Trained parking, Valet parking)
Highly / Fully automatedAssisted & partially automated
5-7x Camera6x Short range radar2-3x Long range radar4-7x High resolution lidar1x Surround view system
(4 cameras; 1x ECU optional)
12x Ultrasonic sensors2
2-3x ADCU3
1x Camera4x Short range radar1x Long range radar
1x Surround view system(4 cameras + 1 ECU)
or 1x Rear view system
8-12x Ultrasonic sensors2
1x ADCU3 (optional)
2-5x Camera4-6x Short range radar1-3x Long range radar1-2x High resolution lidar1x Surround view system
(4 cameras; 1x ECU optional)
12x Ultrasonic sensors2
1-2x ADCU3
2 Ultrasonic sensors not in Continental portfolio.
L4/5
1 Depending on customers and future regulatory requirements. 3 The Assisted & Automated Driving Control Unit.
© Continental AG 2018 Fact Book | 23
III. Automotive Trends: Automated DrivingSelf-Driving Car Project CUbE
We make Driverless Mobility become Reality - scalable from single components to complex vehicle systems.
Driving Intelligence› Situation analysis› Decision-making› Low-level vehicle control› ADCU
Seat Material Tailored seat surfaces› Resilient › Easy to clean› Comfortable
LocalizationRobust localization in urban areas› Radar› Wireless infrastructure beacons
Radar SensingLong-range sensor Short-range sensor› Object detection› Barrier detection› 4 sensors for 360° view
Camera Sensing› Object detection› Barrier detection› Front sensor cover drive path› Surround View
Drive Module› Continental
Axle DriveTires› Energy efficiency
Lidar SensingSolid-state flash lidar› Object detection› Barrier detection› 4 sensors for 360° view
Connectivity› V2X › App for Ride Hailing etc.
Safety› Redundant brake-by-wire system › Passive safety system for
passengers
Steering› Redundant Steering
System by CNXMotion
III. Automotive Trends: Holistic ConnectivityInformation Management – Inside the Vehicle and Beyond
With our holistic, intuitive and ergonomic human-machine interface, we capture commands, prioritize and present information.
Driver & Passengers Devices Infrastructure Other Vehicles We add new functions as wellas value-adding
mobility servicesby providing
a holistic connection to
the outside world.
Vehicle
We manageand optimize the information flow
throughcost-competitive
systems integration.
© Continental AG 2018 Fact Book | 24
III. Automotive Trends: Holistic ConnectivityProduct Highlights for Intelligent Mobility
Cost Competitive Systems SolutionsWe integrate components, functions and services into cost competitive systems serving our customers including the aftermarket.
We integrate
Holistic Human-Machine InterfaceBy knowing the needs of drivers and passengers we provide the expertise for superior comfort, ergonomics, and intuitive ease-of-use.
We inform
Holistic ConnectivityWe provide technologies for vehicle networking to connect drivers and passengers with vehicles, the cloud and the infrastructure. From products to services, protected by advanced Cyber Security solutions.
We connect
III. Automotive Trends: Holistic ConnectivityPortfolio Extension towards Systems and Services
Investment and Cooperation for Proven Business and Mobility Services
© Continental AG 2018 Fact Book | 25
III. Automotive Trends: Holistic ConnectivityHolistic Connectivity Car
>30 million1
connected vehicles by
2018: >50%of produced vehicles are
connected
2020: >250 millionof the vehicles on the road will be
connected
1 Since 1996.
III. Automotive Trends: Holistic ConnectivityFrom Specific ECU Architecture to High Performance Computing
State of the Art
ECU Architecture
2025
Server Architecturewith Zone ECUs
2030
Standardized Server Architecture
…
© Continental AG 2018 Fact Book | 26
III. Automotive Trends: Holistic ConnectivityCentral Processing Unit in a Server-based Architecture
1 I/O = Input/Output.
Automated driving
Electrification
Connectivity
New mobility
010011000101010011Digitalization
IoTInternet of Things
SW defined carMaster for Cyber Security, SW over-the-air updates and vehicle diagnosis.Elektrobit SW management and Argus cyber security solutions are essential elements.
› Increasing number of functions and higher performance require new approaches in electric and electronic architecture.
› Move towards structures known from IT industry supporting functions in vehicle and cloud with high flexibility.
› The In-Vehicle Server is a cornerstone of modern vehicle architectures.
› The In-Vehicle Server offers a HW/SW platform realizing individual use cases:
High performance computing unit. Predefined appli-cations as well as new 3rd party SW and service inte-gration.
Redistribution of application SW. Separation of I/O1
logic from appli-cation function + application fusion across domains.
In-vehicle communication. Increasing demand of in-vehicle network bandwidth.
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
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© Continental AG 2018 Fact Book | 27
IV. Sustainability at ContinentalSustainability Governance
Sustainability Committee
Executive Board
Interdisciplinary and cross-divisional
Steering and implementation Decision-making
Dr. Ariane Reinhart (Executive Board member responsible for Human Relations and Sustainability)
Wolfgang Schäfer (CFO) Corporate sustainability department Relevant business areas and corporate functions Relevant corporate functions Other experts (on request)
Updated sustainability strategyCurrent focus topics Strategic planning process
2018 2019 2020+
Timeline for strategy development:
Corporate sustainability department
Strategic coordination
Business areas/ corporate functions
Our ambition: Continental creates meaningful positive impact
IV. Sustainability at ContinentalOur Key Policies and Guidelines
Environmental Responsibility
Employees and Society
Environment, Safety and Health (ESH) Policy – defines worldwide principles for safety, health and environmental protection
Code of Conduct – ethical standards and requirements concerning employee behavior
Business Partner Code of Conduct – ethical standards and requirements which we expect our business partners to adhere to
Corporate Governance Policy – to foster the responsible management of the company focused on value creation
Quality Policy – aims at customer satisfaction as an overarching goal
Risk Report – overview of our Risk Management
OUR BASICS Our Corporate Guidelines
Corporate Governance
© Continental AG 2018 Fact Book | 28
IV. Sustainability at ContinentalQuality First – Reliable Products by Continental
Status Quo: Certified quality management systems according to ISO 9001 o.s.
› Our group-wide global quality policy aims at customer satisfaction as an overarching goal
› Operationalized by five strategic initiatives with leadership culture as a foundation
› Global quality management organization directly reporting to CEO to implement policy
~90%
total workforce covered by certification
As at Dec. 31, 2018
IV. Sustainability at ContinentalInnovative Products – Sustainable Mobility: Clean, Safe & Affordable
Consolidated sales of products in 2018that reduce energy consumption and / or emissions
› Virtual A-Pillar: By pairing its interior camera and integrated OLED displays in the vehicle’s A-pillar, forward blind spots are eliminated.
› Eco Tires: EcoContact 6 delivers maximum fuel efficiency and optimized grip thanks to improved component geometry and efficient silica distribution.
› Super Clean Electrified Diesel: By making various modifications to a Euro 6 Diesel standard vehicle, Continental engineers were able to massively reduce real driving emissions (NOx and CO2).
› “People’s-Hybrid”: The hybrid with 48-volt technology uses up to 21% less fuel, is relatively affordable and is usable in all vehicle classes.
› Digital Air Spring System: This revolutionary technology allows the driver’s cab to be regulated electronically, thus reducing fuel consumption.
~40%
› Examples:
© Continental AG 2018 Fact Book | 29
IV. Sustainability at ContinentalEnvironmental Management:Reduction of Inputs and Outputs until 2020› Global ESH policy managed by
particular ESH organization
› Commitment to environmental protection, especially to the reduction of resource use and climate protection
› Strategy 2020: to cut specific inputs and outputs (energy, water, waste and CO2) by 20% compared to 2013 baseline
› ISO 14001 certification covers >80% and ISO 50001 ~50% of our total workforce worldwide
Environmental data1 Unit 20174 20185 ∆ 2017Track record:
∆ 2013
Total energy use2 TWh 9.5 9.9 +4% +29%
Specific energy use2 MWh / € mn 218 223 +2% -3%
Total water demand mn m3 19.8 20.6 +4% +27%
Specific water demand m3 / € mn 456 465 +2% -5%
Total waste generation t 379,992 419,426 +10% +50%
Specific waste generation t / € mn 8.8 9.5 +8% +13%
Thereof: Waste recycled % of total waste 81 78 -3%-p. -6%-p.
Total CO2 emissions (Scope 1+2)3 mn t CO2 3.2 3.3 +4% +31%
Specific CO2 emissions (Scope 1+2)3 t CO2 / € mn 73 74 +1% -2%
1Based on the environmental data system which includes the relevant production and development sites, excluding fleet consumption. Definitions based on Global Reporting Initiative (GRI). Specific data refers to the adjusted sales in the respective year.2Fossil energies as well as electricity and steam.3According to Greenhouse Gas Protocol (Scope 2: location-based) on the basis of energy use reported as well as emission factors of Defra (2016) and IEA (2017).4Data with external limited assurance.5Data with external reasonable assurance.
IV. Sustainability at ContinentalHuman Relations Strategy to Enable Business
› Total workforce of 243,226, thereof 228,922 own employees in 2018 – to grow further
Key achievements in 2018:
› Further development of our strategic workforce planning processes covering 97% of own employees
› Global talent management conferences› Certification of global talent management
process according to ISO 29990› Introduction of Microsoft Office 365 for
digital collaboration› Introduction of digital learning
management platform › Extension of certification for health &
safety management systems (around 2/3 of total workforce are now covered)
Enable Transformation:› Talent Management› Data Management
Industrialize Best Fit› Diversity› Leadership › Flexibility› Learning
Common work is based on: Corporate Values (“BASICS”) & Rules (incl. Code of Conduct)
Core initiatives:
HR to Enable Business
© Continental AG 2018 Fact Book | 30
1 Without apprentices.2 Based on HR data system (covering approx. 97% of employees).3 Executives or higher positions.4 Only own employees.5 Including service to previous company in case of acquisitions. 6 Counted from more than one lost day.7 Without Continental Tires Sales (approx. 2% of total workforce). 8 Data partially with external limited assurance. 9 Data with external reasonable assurance.
IV. Sustainability at ContinentalHuman Relations: Key Indicators
Employee data Unit 20178 20189 ∆ 2017
Total employees (Total workforce)1 Number 235,473 243,226 +3%
Thereof: Own employees (Permanent staff) Number 219,687 228,922 +4%
Thereof: in Germany Number 56,854 59,230 +4%
Outside Germany Number 162,833 169,692 +4%
Total apprentices in Germany Number 2,155 2,180 +1%
Average age of employees2 Years 38.4 38.5 +0.3%
Share of female employees in total workforce2 % 27.2 27.5 +0.3%-p.
Share of female employees in management positions2,3 % 13.4 14.8 +1.4%-p.
Average service to the company2,4,5 Years 9.1 9.1 0%
Fluctuation, unforced4 % 5.7 6.3 +0.6%-p.
Sickness rate4 % 3.2 3.3 +0.1%-p.
Accidents per mn working hours4,6,7 Number 3.2 3.4 +6%
IV. Sustainability at ContinentalHuman Rights: Clear Expectations at Continental
› Freedom of association
› Abolishment of forced labor
› Abolishment of child labor
› Freedom from discrimination
Implementation: › Coordination of work through newly established
human rights expert role› Promotion through internal labor relations
network covering more than 70% of our employees worldwide
› Training of employees on Code of Conduct › Additional specific purchasing requirements for
sustainable natural rubber› Assessment of suppliers via Ecovadis and NQC› (Suspected) violations can be reported to global
compliance hotline
Commitment to human rights and ILO1 Core Labor Standards:
1 International Labor Organization.
Adopted into:
Continental Code of Conduct
Continental Business Partner Code of Conduct
© Continental AG 2018 Fact Book | 31
› Responsible sourcing anchored in our General Purchasing Terms and Conditions
› Business Partner Code of Conduct mandatory for suppliers since 2011
› Dedicated initiatives on natural rubber:› Launch of new policy for Sustainable Natural Rubber
in 2018› Cooperation with GIZ1 on sustainable small-holder
rubber farming› Participant of global industry platform (GPSNR2),
launched by WBCSD3 Tire Industry Project
1 German Society for International Cooperation (Gesellschaft für internationale Zusammenarbeit).2 Global Platform for Sustainable Natural Rubber.3 World Business Council for Sustainable Development.
Supplier Assessment as at Dec. 31, 2018
750 selected suppliers assessed on their sustainability performance via ecovadis and NQC
IV. Sustainability at ContinentalSupply Chain Management
IV. Sustainability at ContinentalDiversification of Sourcing: Rubber from Dandelions
The natural rubber made from dandelion roots has the same quality and performance characteristics as conventional rubber from rubber trees.
The plants can be cultivated in moderate climates, e.g. Northern and Western Europe or North America. Having plantations next to the tire plants in Central Europe makes both economic and ecological sense.
At the end of 2018, Continental opened the “Taraxagum Lab Anklam” research and test laboratory for dandelion rubber to provide a base for future research into the cultivation and processing of dandelions.
The new dandelion rubber Taraxagum should enter production within the next five to ten years and then flow step-by-step into our rubber products.
Benefits:› Reduction in dependency on harvest situations in subtropical regions› Higher flexibility due to (bi-)annual cultivation period› Lower environmental impact due to reduced logistic requirements› Optimal material properties enable first-class products in terms of technology
› Innovation and the Green Award both at the international trade fair Automechanika 2016
› Joseph von Fraunhofer Prize 2015› GreenTecAward 2014
Funded by the European Union by the operational program of the ERDF during the 2014 - 2020 funding period.
© Continental AG 2018 Fact Book | 32
IV. Sustainability at ContinentalSocial Responsibility: Contributing to a Variety of Initiatives, Activities and Projects Worldwide
› Our activities are based on the corporate values, internal rules and standards as well as local laws.
› We contribute to social activities with partnerships as well as charitable and in-kind donations, and we support volunteering activities at our locations worldwide.
Employees donate € 15,000 to charities in Germany
Employees help renovate schools in Hungary, Mexiko and Romania
Experiencing Europe: Internships for young people in Europe
Continental Youth Safe Driving Program in China
Selected examples of our social activities worldwide:
IV. Sustainability at ContinentalRatings and Indexes
Source: https://www.ecpigroup.com; https://www.cdp.net; https://www.sustainalytics.com; https://www.msci.com; https://www.ecovadis.com/.
› Continental is listed in the following indexes:
› Ratings:
› BBB › Outperformer(73 points)
› Prime (C+) › Climate: Score B› Water: Score B-› Supply Chain: Score A;
Supplier Engagement Leader Board
› Gold Status › 65 /100 › Best 5% of companies
2018 2019201720192019
© Continental AG 2018 Fact Book | 33
IV. Sustainability at ContinentalContinental’s Memberships
Source: www.charta-der-vielfalt.de (German Federal Government Commissioner for Migration, Refugees and Integration); www.luxemburger-deklaration.de; www.globalcompact.de; http://www.wbcsd.org; http://www.erscharter.eu; http://www.weprinciples.org; http://www.snr-i.org/; https://econsense.de/.
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
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© Continental AG 2018 Fact Book | 34
V. Corporate GovernanceTwo-Tier Board System – Corporate BodiesCorporate bodies of the company
Shareholders’ Meeting
Shareholders exercise their rights of participation and control
ReportsRatifiesElects shareholder representatives
ReportsRatifies
Supervisory Board Executive Board
Chairman’s Committee
Mediation Committee
Audit Committee
Nomination Committee
20 members
10 shareholder representatives 10 employee representatives
Involved in decisions of fundamental significance to the company
8 members
Responsible for managing the company in accordance with the law, the Articles of Incorporation, and the By-Laws of the Supervisory and Executive Boards, while taking into account the resolutions of the Shareholders’ Meeting
Reports
Appoints, monitors and advises
››››
›
›
› › › › ›
V. Corporate GovernanceExecutive Board of Continental AG
Dr. Elmar Degenhart Chairman of the Executive BoardBorn in 1959Appointed since 2009 until August 2024
Frank JourdanChassis & Safety DivisionBorn in 1960Appointed since 2013 until March 2024
Helmut Matschi Interior DivisionBorn in 1963Appointed since 2009 until March 2024
Wolfgang SchäferChief Financial OfficerBorn in 1959Appointed since 2010 until December 2024
Dr. Ariane Reinhart Human RelationsBorn in 1969Appointed since 2014 until September 2022
Hans-Jürgen Duensing ContiTech DivisionBorn in 1958Appointed since 2015 until April 2023
Nikolai SetzerSpokesman of the Automotive BoardBorn in 1971Appointed since 2009 until March 2024
Christian KötzTires DivisionBorn in 1970Appointed since 2019 until March 2022
© Continental AG 2018 Fact Book | 35
Target remuneration (100% target achievement)
Maximum remuneration
0
1
2
3
4
5
6
Fixedremuneration
Additionalbenefits
Servicecosts
Performancebonus (immediate
payment: 60%)
Performancebonus
(deferral: 40%)
Long-termincentive
Totalremuneration
€ mn
(Converted into virtual shares.3-year holding period)
(4-year term)
Variable remuneration elements
Minimumremuneration
V. Corporate GovernanceRemuneration of an Executive Board member
1 Average.2 Based on a target bonus (here: €1.167 million), for 100% achievement of defined CVC and ROCE targets, maximum of 150% of the target bonus (including achieving any additional strategic targets as well as any correction of the target achievement of+/- 20% by the Supervisory Board), divided into an immediate payment (60%) and deferral (40%).
3 The possible increase in the value of the deferral is capped at 250% of the initial value. The maximum amount shown relates to the maximum payment in the performance bonus at 150% target achievement.4 Based on achieving average CVC versus planned CVC (max. 200%), multiplied by the degree of achieving the total shareholder return, maximum payment of 200%.
Remuneration of an Executive Board member responsible for a division (example)
1 1 2 2 43
0
25
50
75
100
125
150
175
200
225
Fixed remuneration Additional benefits(meeting fees)
Variableremuneration
Total remuneration
€ thousands
V. Corporate GovernanceRemuneration of a Supervisory Board member
1 Basis for calculation: €90 for each cent of earnings per share over €2, calculated as an average of the last three years.
1
Remuneration of a Supervisory Board member (example)
© Continental AG 2018 Fact Book | 36
› Continental ranks 3 out of 30 in the 2018 DVFA Scorecard survey with 86.55%.
› About the Scorecard for German Corporate Governance:› Corporate Governance (CG) comprises competencies, communication and monitoring on the part of
the decision-making bodies of publicly-traded companies.› The scorecard was designed as a professionally suitable analytical tool for analysts, investors and
companies for evaluation of all relevant factors.› It includes about 50 measures for the comprehensive implementation of Corporate Governance -
separated according to the criteria › CG commitment› shareholder rights› transparency› company management and› auditing.
Source: http://www.ecgi.org/codes/documents/scorecard_d.pdf; http://www.dvfa.de/fileadmin/downloads/Verband/Gremien/Corporate_Governance/Gesamtscore_Methodik_DVFA_Scorecard_for_CG_DAX30_2018.pdf.
V. Corporate GovernanceDVFA Scorecard / German Corporate Governance Code
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246678691
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© Continental AG 2018 Fact Book | 37
VI. Continental CorporationKey Consolidated Figures€ mn 2016 2017 2018
Sales 40,549.5 44,009.5 44,404.4EBITDA 6,057.4 6,678.9 6,235.7
in % of sales 14.9 15.2 14.0EBIT 4,095.8 4,561.5 4,027.7
in % of sales 10.1 10.4 9.1EBIT adjusted1 4,748.5 4,118.1
in % of sales1 10.8 9.3
Operating assets (average) 20,453.1 22,172.4 23,640.5ROCE 20.0 20.6 17.0
R, D & E expenses (net) 2,811.5 3,103.7 3,209.0in % of sales 6.9 7.1 7.2
Capex2 2,593.0 2,854.4 3,124.4in % of sales 6.4 6.5 7.0
Depreciation and amortization3 1,961.6 2,117.4 2,208.0in % of sales 4.8 4.8 5.0thereof impairment4 58.6 40.2 20.7
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
VI. Continental CorporationSales and Adjusted EBIT1 by Quarter
1 Before amortization of intangibles from PPA, consolidation and special effects.
9,851 10,191 9,98410,524
11,000 11,033 10,69311,284 11,013 11,374
10,78811,230
1,164 1,167 1,1041,313
1,059 1,161
772
1,126
Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18Sales (€ mn) Adj. EBIT (€ mn)
FY Sales €40,549 mn FY Sales €44,009 mnAdj. EBIT1 €4,749 mn
FY Sales €44,404 mnAdj. EBIT1 €4,118 mn
1
© Continental AG 2018 Fact Book | 38
VI. Continental CorporationKey Historical Credit Metrics
1 Amounts shown may contain rounding differences.2 Adjusted EBITDA as defined in syndicated loan. 3 Includes changes in inventories, trade accounts receivable, trade accounts payable and discounted notes.4 Includes dividends received, income from equity-accounted and other investments, incl. impairment and reversal of items as well as changes in employee benefits and other provisions and in other assets and liabilities.5 Adjusted EBITDA to net cash interest paid.
(€ mn)1 2014 2015 2016 2017 2018Statement of Cash FlowsAdjusted EBITDA2 5,318 6,094 6,125 6,701 6,190Reported EBITDA 5,134 6,001 6,057 6,679 6,236Net cash interest paid -158 -174 -112 -105 -79Tax paid -775 -1,015 -1,047 -1,122 -861Change in net working capital3 -207 -107 -210 -484 137Other4 175 210 250 253 -456Cash flow arising from operating activities 4,168 4,916 4,938 5,221 4,977Cash flow arising from investing activities -2,153 -3,472 -3,167 -3,468 -3,626 - thereof acquisitions -129 -1,257 -516 -596 -418 - thereof capex in PPE and intangibles -2,110 -2,265 -2,708 -2,951 -3,285Cash flow before financing activities 2,015 1,444 1,771 1,753 1,351Cash flow before acquisitions 2,144 2,701 2,288 2,349 1,769Statement of Financial PositionCash and cash equivalents 3,244 1,622 2,107 1,882 2,761Derivative instruments and interest-bearing investments 364 81 48 161 184Total indebtedness 6,432 5,245 4,952 4,090 4,607Net indebtedness 2,824 3,542 2,798 2,048 1,661Credit RatiosNet indebtedness / adjusted EBITDA2 0.5x 0.6x 0.5x 0.3x 0.3xNet cash interest paid coverage (Ratio)5 33.7x 35.1x 54.8x 63.6x 78.6x
VI. Continental CorporationNet Indebtedness and Gearing Ratio
8,8967,317 6,772
5,320 4,2892,824 3,542 2,798 2,048 1,661
65%46%
26% 27% 19% 13% 9%
219%
118%90%
58%
YE YE YE YE YE YE YE YE YE YE
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Net indebtedness (€ mn)
Gearing ratio applying IAS 19 (rev. 2011)
Gearing ratio
© Continental AG 2018 Fact Book | 39
VI. Continental CorporationGross Indebtedness by Source at YE 2018 (€ mn)
1 Percentages are calculated as share of gross indebtedness.2 Amounts shown are nominal values.
Revolving Credit FacilityApr. 2021
157Bond
Feb. 2019 (0.5%)
500
Bond Feb. 2020
(0.0%)600
Bond Sept. 2020 (3.125%)
750Bond
Aug. 2025 (3.9%)
50
Various other bank
lines1,082
Other indebtedness
1,468
› Gross indebtedness €4,607 mn(PY: €4,090 mn)
› Cash€2,761 mn(PY: €1,882 mn)
› Net indebtedness€1,661 mn(PY: €2,048 mn)
› Available credit lines€3,504 mn(PY: €3,687 mn)
2
2
2
2
Bonds 41%1
Various other bank lines 24%1
Other indebtedness 32%1
Syndicated loan 3%1
VI. Continental CorporationMaturities for Bonds1 (€ mn)
1 All amounts shown are nominal values.
500
1,350
2019 2020 2021 2022 2023
As at December 31, 2018 (€ mn) FY 17 FY 18
Gross indebtedness
4,090 4,607
Cash 1,882 2,761
Net indebtedness 2,048 1,661
Available credit lines
3,687 3,504
Total liquidity 5,568 6,266
Bonds
© Continental AG 2018 Fact Book | 40
VI. Continental CorporationPurchasing – Production Materials 2018
Oil-based chemicals14%
Electronics25%
Electro-mechanical components
18%
Mechanical components
23%
Steel and metal parts
6%
Others11%
Natural rubber3%
Purchasing contracts› Continental has a wide range of sources
for production materials worldwide.
› A specific strategy for each production material group is set up and the appropriate supplier panel is selected. This way we ensure the competitiveness and availability of the materials.
› For some materials, prices might have a long lead time until they become fully reflected in the cost of our final products.
Total production material purchased
in 2018: €20.3 bn
1 E.g. synthetic rubber, carbon black. chemicals.2 E.g. discrete/ standards, microcontroller, LCDs. 3 E.g. printed circuit boards, mechatronics, motors. components.4 E.g. stamped parts, engine system specific forgings, bearings, fasteners.5 E.g. textiles, plastics.
1
2
3
4
5
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246678691
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© Continental AG 2018 Fact Book | 41
VII. Market DataInstallation Rates of Keyless Entry Systems
Source: Strategy analytics and Continental estimates.
Passive Keyless Entry/Start Remote Keyless Entry
0%
20%
40%
60%
80%
100%
0%
20%
40%
60%
80%
100%
2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023
North America
Japan China
Europe
VII. Market DataInstallation Rates of Multimedia Systems1
Source: Strategy Analytics, JD Powers and Continental estimates.1 “Audio” refers to stand-alone radios, “Navigation” only to embedded navigation in the car, not connected navigation where e.g. a smartphone delivers navigation calculation and the screen of the car is used as a display.
Navigation Audio
0%
20%
40%
60%
80%
100%
0%
20%
40%
60%
80%
100%
2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023
North America
Japan China
Europe
© Continental AG 2018 Fact Book | 42
Source: Market data and Continental estimates.1Market definition: Average amount of ADAS including sensing rear/surround view cameras but w/o parking assist functions based on ultrasonic sensors. Example: 2018 worldwide – total number of produced cars: 94.0 mn; average sensors per car: 1.49; total sensors: 94.0 mn x 1.49 = 140.1 mn.
0
1
2
3
4
5
2016 2017 2018 2019 2020 2021 2022 2023Europe North America Asia Rest of world Worldwide
Sensors per car
VII. Market DataSensors per car of Advanced Driver Assistance Systems1
VII. Market DataRising Volumes of Head-Up Displays
Source: Market data and Continental estimates.
0
2
4
6
8
10
12
2016 2017 2018 2019 2020 2021 2022 2023Europe North America Japan China
mn units
© Continental AG 2018 Fact Book | 43
VII. Market DataProduction of Passenger Cars and Light Commercial Vehicles (<6t)
mn units 2016 2017 2018E 2019EEurope1 21.4 22.1 21.7 21.7North America 17.8 17.1 17.0 17.0South America 2.7 3.3 3.4 3.6Asia2 50.0 51.6 50.6 50.5Other markets 1.1 1.1 1.3 1.3
Total 93.1 95.2 94.0 94.0Source: IHS, February 2019 and Continental estimates. 1 West, Central and East Europe incl. Russia and Turkey.2 Asia including Kazakhstan, Uzbekistan, Middle East and Oceania with Australia.
VII. Market DataProduction of Medium and Heavy Commercial Vehicles (>6t)
tsd units 2016 2017 2018E 2019EEurope1 605 646 663 663North America 474 542 638 638South America 85 110 155 170Asia2 1,896 2,316 2,240 2,170Other markets 0 0 0 0
Total 3,060 3,614 3,695 3,641
Source: IHS, February 2019 and Continental estimates.1 West, Central and East Europe incl. Russia and Turkey.2 Asia including Kazakhstan, Uzbekistan, Middle East and Oceania with Australia.
© Continental AG 2018 Fact Book | 44
VII. Market DataReplacement Tires – Passenger Cars and Light Commercial Vehicles (<6t)
mn units 2016 2017 2018E 2019EEurope 340 350 358 364North America 285 288 296 301South America 66 71 67 68Asia 431 447 450 465Other markets 46 48 49 50
Total 1,168 1,204 1,220 1,248
Source: LMC World Tyre Forecast Service, December 2018 and Continental estimates.
VII. Market DataReplacement Tires – Medium and Heavy Commercial Vehicles (>6t)
mn units 2016 2017 2018E 2019EEurope 24.5 26.1 25.8 26.3North America 23.6 24.8 26.5 27.0South America 13.7 14.5 14.8 15.1Asia 86.6 88.2 87.0 89.0Other markets 7.5 7.8 7.9 8.0
Total 155.9 161.4 162.0 165.4
Source: LMC World Tyre Forecast Service, December 2018 and Continental estimates.
© Continental AG 2018 Fact Book | 45
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246678691
3835
VIII. Automotive GroupKey Figures€ mn 2016 2017 2018
Sales 24,496.4 26,565.4 26,855.8EBITDA 2,615.0 3,296.4 3,177.1
in % of sales 10.7 12.4 11.8EBIT 1,526.6 2,086.8 1,890.4
in % of sales 6.2 7.9 7.0EBIT adjusted1 2,180.7 1,886.3
in % of sales1 8.2 7.0
Operating assets (average) 11,978.3 12,874.1 14,095.6ROCE 12.7 16.2 13.4
R, D & E expenses (net) 2,430.9 2,675.5 2,760.5in % of sales 9.9 10.1 10.3
Capex2 1,497.0 1,789.5 2,019.1in % of sales 6.1 6.7 7.5
Depreciation and amortization3 1,088.4 1,209.6 1,286.7in % of sales 4.4 4.6 4.8thereof impairment4 21.4 37.3 19.2
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
© Continental AG 2018 Fact Book | 46
VIII. Automotive GroupSales and Adjusted EBIT1 by Division
1 Before amortization of intangibles from PPA, consolidation and special effects.
785202
899
0
1,886
Chassis& Safety
Powertrain Interior cons. AutomotiveGroup
8.2%2.6%
9.3% 7.0%
Adj. EBIT margin (%)
9,588
7,741
9,707180
26,856
Chassis& Safety
Powertrain Interior cons. AutomotiveGroup
2.9%
6.3% 3.2%
0.5%
Organic sales growth (%)
-
Reported sales change › Chassis & Safety: -1.8%› Powertrain: 1.0% › Interior: 4.3% › Automotive Group: 1.1%
1
› Reported EBITDA: €3,177 mn (11.8% of sales) › Reported EBIT: €1,890 mn (7.0% of sales)› R&D (net): €2,761 mn (10.3% of sales) › Capex: €2,019 mn (7.5% of sales)
Automotive Group Sales (€ mn) FY 2018 Automotive Group Adj. EBIT1 (€ mn) FY 2018
VIII. Automotive GroupSales by Market
Germany26%
Europe(excluding Germany)
23%North America
23%
Asia25%
Other markets3%
Germany22%
Other markets2%
Asia28%
North America23%
Europe(excluding Germany)
25%
Sales in 2018: €26.9 bnSales in 2013: €20.0 bn
© Continental AG 2018 Fact Book | 47
VIII. Automotive GroupOrder Intake (LTS1) in the Automotive Group of Around €40 bn in 2018
1 LTS = Lifetime Sales.
Interior Chassis & Safety Powertrain
› Higher book-to-bill in ADAS than C&S average
› Year over year increase in Passive Safety and Sensorics
› HEV order intake at ~€2 bn› About 45% of the order intake was
acquired outside of Europe and North America
› Infotainment and connectivity with the strongest order intake
› About half of the order intake was acquired in Europe
13.5 14.7 13.4
1.5 1.5 1.4
2016 2017 2018
LTS (€ bn) Book-to-bill
10.011.7
14.8
1.2 1.31.5
2016 2017 2018
LTS (€ bn) Book-to-bill
11.513.4
11.41.6 1.7
1.5
2016 2017 2018
LTS (€ bn) Book-to-bill
VIII. Automotive GroupOrder Intake Well Balanced
Europe40%
North America
18%
Asia41%
Other1%
Europe47%
North America
23%
Asia28%
Other2%
Sales by market 2018 Order intake by market 2018
€26.9 bn ~€40 bn
© Continental AG 2018 Fact Book | 48
1,58
9
1,83
6
2,09
7
2,43
1
2,67
6
2,76
1
7.9% 8.
8%
8.9% 9.
9%
10.1
%
10.3
%
2013
2014
2015
2016
2017
2018
R&D expenditure net (mn €) R&D as percentage of sales
VIII. Automotive GroupDigitalization Causes Sustained High R&D and Capex
1,01
6
1,12
6
1,27
5
1,49
7 1,79
0
2,01
9
5.1%
5.4% 5.4% 6.
1% 6.7% 7.5%
2013
2014
2015
2016
2017
2018
Capex (mn €) Capex ratio
Automotive Group R&D net (€ mn) Automotive Group Capex (€ mn)
23.6 24.526.6 26.9
30
35
40 ~40
2015 2016 2017 2018
Automotive Group sales Order intake (LTS)
VIII. Automotive GroupOrder Intake Drives Sustainable Growth
IFRS 9 and IFRS 15 applied starting 2018.1 Lifetime Sales.
1
Automotive Group: Order Intake (€ bn)
© Continental AG 2018 Fact Book | 49
23% 23% 22%
19% 18% 16%
25%28% 30%
27%26%
26%6%5%
6%
84.7 94.0
104.4
2013 2018E 2023EEurope North America ChinaRest of Asia Rest of World
VII. Automotive GroupProduction of Passenger Cars and Light Trucks (<6t)
› Worldwide PC<1 production showed a CAGR 2013-18E of 2%.
› IHS forecasts 2023E 104.4mn units (CAGR 2018E-23E of 2%).
› China is the largest market for PC<1 vehicles produced. CAGR expected to slow to 3% in 2018E-23E from 5% during 2013-2018E.
› Rest of Asia expected to grow 2018E-23E at 2%.
› Europe expected to grow 2018E-23E at ~1%.
› North America expected to stagnate(CAGR 2018-23E of 0.2%).
PC<1 production (mn units)
Source: IHS, February 2019 and Continental estimates.Europe incl. West, Central and Eastern Europe, Russia and Turkey.Asia including Kazakhstan, Uzbekistan, Middle East and Oceania with Australia.1 Passenger car & light truck (<6t).
CAGR 2%
CAGR 2%
Sustainability at Continental
Market DataAutomotive Group – Chassis & Safety Division Rubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4251678691
3835
© Continental AG 2018 Fact Book | 50
Vehicle Dynamics Hydraulic Brake Systems Passive Safety & SensoricsAdvanced Driver Assistance Systems
› Integrated vehicle safety development, safety testing and validation
› Airbag control units / safety (domain) control units
› Crash sensors
› Inertial measurement units› Chassis and driver intention
sensors› Battery and energy monitoring
sensors› Electronic components
(1st tier customer)› Wheel, engine and transmission
speed sensors› V2X-communication
› Electronic chassis components
› Sensors› Camera› Surround view› Long-range radar› Short-range radar› High resolution flash lidar › Short-range lidar
› ADCU
› Assisted driving control units › Automated driving control units
› Driving functions
› Electronic brake systems› Passenger Cars /
Motorcycles› ABS / ESC / oCB
› Software functions› Traction control › Adaptive cruise control› Regenerative brake system› Active front steering› Hill start assist› Hydraulic brake assist› Trailer stability assist
› Air suspension systems
› Calipers
› Drum brakes
› Brake hoses
› Boosters
› Tandem master cylinders
› Electric parking brakes
› Pedal modules
› Brake pressure regulators
› Washer systems
VIII. Chassis & SafetyBusiness Units and Key Products
VIII. Chassis & SafetyLocations Worldwide
India▐ Bangalore▐ Manesar▐ Gurgaon
(New Delhi)
Brazil▐ Salto▐ Varzea Paulista
China ▐ Changchun -
Moonlake▐ Changshu▐ Heihe▐ Jiading CASS
Mexico▐ Ayala Morelos (Cuautla)▐ Guadalajara▐ Las Colinas
USA▐ Auburn Hills▐ Brimley▐ Culpeper▐ Henderson
Malaysia▐ Penang
Japan▐ Asahi▐ Hamakita▐ Monbetsu▐ Yokohama
South Korea▐ Icheon▐ Pangyo▐ Sejong
Philippines▐ Calamba▐ Manila
▐ Lindau▐ Memmingen ▐ Nuremberg▐ Regensburg▐ Rheinböllen▐ Schwalbach▐ Ulm
Europe France▐ ToulouseHungary▐ Budapest▐ VeszprémItaly▐ Cairo Montenotte
Belgium▐ MechelenCzech Republic▐ Adrspach▐ Frenstat▐ Jicin
Portugal▐ PalmelaRomania▐ Iasi▐ Sibiu▐ TimişoaraSlovakia▐ Zvolen
Sweden▐ ArvidsjaurUK▐ Birmingham ▐ Ebbw Vale▐ Lewes
▐ Production / R&D
Germany ▐ Alzenau▐ Bebra▐ Frankfurt▐ Gifhorn▐ Hanover ▐ Ingolstadt▐ Karben▐ Korbach
▐ Joint Ventures <= 50%
72 sites for production and R&D in 20 countries. Divisional headquarter in Frankfurt/Main, Germany.
▐ Chongqing▐ Jiading SABS▐ Yangzhou
▐ Morganton▐ San José▐ Santa Barbara▐ Seguin
▐ Queretero▐ Silao▐ San Luis Potosi
▐ Jiading TC▐ Lian Yun Gang▐ Shanghai▐ Yancheng
Locations shown might be shared with other Continental divisions.
© Continental AG 2018 Fact Book | 51
VIII. Chassis & SafetyKey Figures€ mn 2016 2017 2018
Sales 8,977.6 9,767.8 9,588.0EBITDA 954.6 1,301.6 1,213.3
in % of sales 10.6 13.3 12.7EBIT 580.8 897.7 782.5
in % of sales 6.5 9.2 8.2EBIT adjusted1 898.1 784.9
in % of sales1 9.2 8.2
Operating assets (average) 4,448.7 4,519.6 4,887.1ROCE 13.1 19.9 16.0
R, D & E expenses (net) 773.4 913.8 1,023.2in % of sales 8.6 9.4 10.7
Capex2 523.7 682.5 749.7in % of sales 5.8 7.0 7.8
Depreciation and amortization3 373.8 403.9 430.8in % of sales 4.2 4.1 4.5thereof impairment4 1.5 0.5 1.5
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
VIII. Chassis & SafetySales by Market
Germany26%
Europe(excluding Germany)
20%North America
22%
Asia29%
Other markets3%
Germany20%
Other markets1%
Asia33%
North America24%
Europe(excluding Germany)
22%
Sales in 2018: €9.6 bnSales in 2013: €7.3 bn
© Continental AG 2018 Fact Book | 52
VIII. Chassis & SafetyMarket-Specific Initiatives – Towards Safer Mobility (1)› mandatory as of Oct. 2012 f› Electronic stability control (ESC)
› mandatory as of Oct. 2012 for all new types of passenger cars
› mandatory as of Oct. 2014 for all new passenger cars1
› Advanced emergency braking system (AEB) andlane departure warning (LDW)› mandatory for all new types of:
› heavy commercial vehicles (>22t GVW) and buses (>12t GVW) as of 2017
› heavy commercial vehicles with GVW between 3.5t-22t as of 20182
› mandatory for all new vehicles:› heavy commercial vehicles (>22t GVW)
and buses (>12t GVW) as of Nov. 2019 › heavy commercial vehicles with GVW
between 3.5t-22t as of 20202
Japan
1 Source: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in Japan.2 http://www.mlit.go.jp/common/001027292.pdf.3 CONTRAN 312/2009. 4 CONTRAN 641/2016.
5 CONTRAN 509/2014.6 Federal Motor Vehicle Safety Standards; Rear Visibility; Final Rule; 49 CFR Part 571.7 Federal Motor Vehicle Safety Standards, 49 CFR Part 136.GVW = Gross Vehicle Weight.
› Rear Visibility› mandatory as of May 1, 2016, with a phase in
schedule for all vehicles and low-speed vehicles with a gross vehicle weight rating (GVWR) of 10,000 pounds or less6
› Electronic stability control (ESC)› mandatory as of Jan. 2014 for all new types of light
vehicles› mandatory as of Jan. 2016 for all new light vehicles7
› Tire pressure monitoring system (TPMS)› mandatory as of Jan. 2016 for all new types of light
vehicles7
Brazil› Anti-lock brake system (ABS)
› mandatory as of Jan. 2014 for all new passenger cars, after phase-in which began in 20103
› Electronic stability control (ESC)› mandatory as of Jan. 2020 for all new types of
passenger cars› mandatory as of Jan. 2020 for all new types of
commercial vehicles and buses› mandatory as of Jan. 2022 for all new passenger cars› mandatory as of Jan. 2022 for all new commercial
vehicles and buses4
› Motorcycle anti-lock brake system (ABS)› mandatory as of Jan. 2019 for all new motorcycles
>300ccm, after a phase-in which began in 20165
USA
Other markets are following EU/USA on ESC and Motorcycle ABS regulation› Electronic stability control (ESC): Australia (11/2011 for new car types, 11/2013 for all new cars), Turkey (02/2012 for new car types, 11/2014 for all new cars, 01/2015 for new heavy
vehicle types, 01/2016 for all new heavy vehicles), New Zealand (07/2015 for all new cars), Malaysia (01/2016 for all new cars), Ecuador (01/2018 for new car types, 01/2020 for all new cars), Argentina (01/2018 for new car types, 01/2020 for all new cars)
› Motorcycle anti-lock brake system (ABS): India (04/2018 for new motorcycle types >125ccm, 04/2019 for all new motorcycles >125ccm, for motorcycles ≤125ccm same dates apply with requirement to have either ABS or a Combined Brake System)
VIII. Chassis & SafetyMarket-Specific Initiatives – Towards Safer Mobility (2)
› Advanced emergency braking system detecting vehicles ahead› mandatory as of 2020 for all new types of passenger cars and light
commercial vehicles (<=3.5t GVW)› mandatory as of 2022 for all new passenger cars and light commercial
vehicles (<=3.5t GVW)› Advanced emergency braking system for pedestrians
› mandatory as of 2022 for all new types of passenger cars and light commercial vehicles (<=3.5t GVW)
› mandatory as of 2024 for all new types of passenger cars and light commercial vehicles (<=3.5t GVW)
› Pedestrian and cyclist collision warning› mandatory as of 2022 for all new types of heavy commercial vehicles and
buses› mandatory as of 2024 for all new heavy commercial vehicles and buses
› Blind spot information system (BSIS)› mandatory as of 2022 for all new types of heavy commercial vehicles and
buses› mandatory as of 2024 for all new types of heavy commercial vehicles and
buses› Emergency lane keeping
› mandatory as of 2022 for all new types of passenger cars and light commercial vehicles (<=3.5t GVW)
› mandatory as of 2024 for all new passenger cars and light commercial vehicles (<=3.5t GVW)
› Advanced emergency braking on heavy duty vehicles (AEBS)› mandatory as of 2020 for all new types of heavy commercial vehicles and
buses› mandatory as of 2022 for all new heavy commercial vehicles and buses
› Tire pressure monitoring› mandatory as of 2020 for all new types of light commercial vehicles (<=3.5t
GVW)› mandatory as of 2022 for all new light commercial vehicles (<=3.5t GVW)› mandatory as of 2022 for all new types of heavy commercial vehicles and
buses› mandatory as of 2024 for all new heavy commercial vehicles and buses
› Intelligent speed assistance (ISA)› mandatory as of 2022 for all new types of vehicles› mandatory as of 2024 for all new vehicles
› Event (accident) data recorder (EDR)› mandatory as of 2022 for all new types of passenger cars› mandatory as of 2024 for all new passenger cars
› Platooning› mandatory as of 2022 for all new types of vehicles› mandatory as of 2024 for all new vehicles
› Drowsiness and attention detection› mandatory as of 2022 for all new types of vehicles› mandatory as of 2024 for all new vehicles
EU
Source: European Commission COM(2018) 286 final. Legislation of the General Safety Regulation for all technologies (EU) is under development and not finally decided by the EU. Assumption - earliest publication expected by June 1, 2019.Application date type A = June 1, 2019 (new type of vehicles) + 36 months = June 1, 2022 (new vehicles). Application date type B = June 1, 2022 (new type of vehicles) and June 1, 2024 (new vehicles). Application date type C = June 1, 2024 (new type of vehicles) and June 1, 2026 (new vehicles). GVW = gross vehicle weight.
© Continental AG 2018 Fact Book | 53
VIII. Chassis & Safety Global Development of Active Safety Regulations
1 ESC = Electronic Stability Control; 2 ABS = Anti-lock Braking System; 3 LDWS = Lane Departure Warning System; 4 AEB(S) = Advanced Emergency Braking System; 5 RVS = Rearview Video System; 6 V2X = Vehicle to everything; LKAS7 = Lane Keeping Assist System.
Decided
Expected by Continental
ESC1
Passenger vehicles
RVS5
2016 (10%) –2018 (100%)
ESC1
Passenger vehicles
Legi
slat
ion
Legi
slat
ion
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Review of General Safety Regulation› AEB4 for passenger vehicles› LKAS7 for passenger vehicles› Blind Spot Information System› Back-up Aid for passenger vehicles› Event data recording
ABS2
Minivans
AEB4
Commercialvehicles and buses
AEB4 and LDWS3
Commercial vehicles and buses
ABS2 ABS2
Motorcycles>300ccm2016 (10%) –2019 (100%)
V2X Device6
ABS2
MotorcyclesESC1
Light commercial
vehicles
AEB4
LDWS3
Commercialvehicles & buses
ABS2
Motorcycles
ABS2
Motorcycles
ABS2
Passenger cars and bussesMotorcycles >125ccm
ESC1
Passenger vehicles
ESC1
Commercialvehicles and buses
VIII. Chassis & Safety Global Development of Active Safety Regulations and Ratings
1Automated Driving (based on SAE Level 2 systems); 2 FCWS = Forward Collision Warning System; 3 LDWS = Lane Departure Warning System; 4 AEB(S) = Advanced Emergency Braking System; 5 CIBS = Crash Imminent Braking System; 6 DBS = Dynamic Brake Support; 7 RVS = Rearview Video System; 8 SAS = Speed Assist System; 9 LKA = Lane Keeping Assist; 10 RDP = Road Departure Protection; 11 NCAP = New Car Assessment Program; 12 ESS = Emergency Steering Support;13 VRU = Vulnerable Road User; 14 V2X = Vehicle to everything; 15 BSD = Blind Spot Detection; 16 Power Two Wheelers.
Decided
Expected by Continental
AEB4 & LDWS3
NCAP11 star-rating
AEB4 & LDWS3
NCAP11
star-rating
AEB4
SAS8 & LKA9 & AEB4 PedestrianNCAP11 star-rating
Con
sum
er T
est
Con
sum
er T
est
AEB4 Intersection,ESS12, AEB4 Back-Over, Driver MonitoringNCAP11 star-rating
AEB4 & AES12
Head-On & AEB PTW16
NCAP11 star-rating
V2X14/VRU13
TagNCAP11
star-rating
FCWS2/LDWS3 RVS7
CIBS5 & DBS6
RDP10 & AEB4
BicycleNCAP11 star-ratingPublished first AD1
Tests (no star-rating)
BSD15,LKA9 & AEB4 Pedestrian
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
AEB4 PedestrianNCAP11 star-rating
AEB4 PedestrianAEB4 Reverse
ESS12AEB4 Bicycle
AEB4 JunctionNCAP11 star-ratingAEB4 Bicycle
NCAP11 star-rating
© Continental AG 2018 Fact Book | 54
Roadmap 20202018 2019 2020 2021 2022 2023 2024 2025
AEB1 VRU2 cyclist
Far-side protection
Mobile progressive deformable barrier
Roadmap 2025 – Safety Rating
Driver monitoringAEB1 VRU2 pedestrian – back-overAEB1 – Junction and crossingAEB1 – Head-onAutomatic Emergency SteeringV2X3
Whiplash/Rear-end crash protectionRevised subsystem for pedestrian and cyclistRescue, extrication and safetyChild presence detection
ROADMAP 2025 – AD Grading of AD functions
VIII. Chassis & Safety NCAP Roadmap
Source: https://cdn.euroncap.com/media/30700/euroncap-roadmap-2025-v4.pdf.1AEB(S) = Advanced Emergency Braking System; 2VRU = Vulnerable Road User; 3V2X = Vehicle to everything.
Start
Protocol release
Implementation
Communication onlybased on first ideas
Proposal to release updates outof phase with overall rating
Europe
North America
South America
Asia/Pacific
World
ContinentalBoschTRW
ContinentalBoschTRW
ContinentalBoschMando
ContinentalAdvicsBosch
ContinentalAdvicsBosch
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. Chassis & Safety Market Position Electronic Brake Systems in 2018
Source: Continental estimates.
© Continental AG 2018 Fact Book | 55
Europe
North America
South America
Asia/Pacific
World
ContinentalCBITRW
ContinentalAkebonoTRW
ContinentalCBITRW
ContinentalAdvicsTRW
ContinentalAdvics TRW
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. Chassis & SafetyMarket Position for Foundation Brake Systems in 2018
Source: Continental estimates.
Europe
North America
South America
Asia/Pacific
World
ContinentalBoschTRW
ContinentalBoschTRW
ContinentalBoschTRW
ContinentalAdvicsBosch
ContinentalBoschTRW
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. Chassis & Safety Market Position for Actuation in 2018
Source: Continental estimates.
© Continental AG 2018 Fact Book | 56
Europe
North America
South America
Asia/Pacific
World
ContinentalAutolivBosch
ContinentalAutolivBosch
ContinentalAutolivBosch
ContinentalAutolivDenso
ContinentalAutolivBosch
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. Chassis & SafetyMarket Position for Airbag Electronics in 2018
Source: Continental estimates.
Europe
North America
Asia
World
ContinentalBoschValeo
ContinentalBosch Magna
ContinentalDensoPanasonic
ContinentalBoschValeo
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. Chassis & SafetyMarket Position for Advanced Driver Assistance Systems in 2018
Source: Continental estimates.
© Continental AG 2018 Fact Book | 57
Sustainability at Continental
Market DataAutomotive Group – Powertrain Division Rubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4258678691
3835
Transmission control units for automatic transmissions
› Step-AT, DCT, CVT, DHT, AMTTransmission actuators› Clutch, gearshiftTransmission sensors› Sensorcluster
Electric transmission oil pumps
Shift-by-wire and ePark solutionsMicromobility electric drivetrains› Pedelec drive unit
TransmissionEngine SystemsFuel & Exhaust ManagementSensors & Actuators
Hybrid Electric Vehicle
Engine management passenger cars› Diesel piezo common rail injection › Gasoline direct and port fuel
injection› Synthetic fuels› Exhaust gas after-treatmentEngine management commercial vehicles› Diesel piezo common rail injection › Exhaust gas after-treatmentEngine management non-automotiveTurbochargerElectrification and E-Mobility› On-board high voltage battery
charger› Powertrain domain control units
Power electronics
Electric motors
HV eDrive
48V power electronics
48V drives
Battery management systems
Power net systems
Actuators for› Thermal management› Electric pumps› Electric throttle› Exhaust and emission› General purpose
Exhaust and emission sensors for› Exhaust gas
Transmission and engine sensors› Mass airflow› Combustion› Position› Pressure› Fluid level and quality› Temperature
Vehicle access sensors
Fuel delivery modules
Fuel level sensors
Fuel pumps
Electronics for fuel pumpcontrol› Standalone and flange
integrated
Fluid level sensor with sealed contact system
Exhaust aftertreatment› Catalysts and filters› Electronics› SCR Urea extraction unit
Water delivery module
VIII. PowertrainBusiness Units and Key Products until December 31, 2018
© Continental AG 2018 Fact Book | 58
VIII. PowertrainNew Powertrain Structure Starting January 1, 2019
Former business units› Engine Systems› Transmission
› As before Former business units› Sensors & Actuators› Fuel and Exhaust
Management
› As a result of the carve-out, segment manages business between Continental and Powertrain
› Sales should constantly decrease over time and will be accounted at cost plus
New Powertrain1
Engine & Drivetrain Systems (E&DS)
Hybrid Electric Vehicle (HEV)
Powertrain Components (PTC)
Contract Manufacturing (CM)
1 The segment names displayed represent current working titles.
VIII. PowertrainLocations Worldwide59 sites for production and R&D in 18 countries. Divisional headquarters in Regensburg, Germany.
India▐ Bangalore▐ Manesar▐ PuneBrazil
▐ Guarulhos▐ Salto
China▐ Changchun▐ Chongqing▐ Shanghai▐ Tianjin▐ Wuhu
Mexico▐ Ayala Morelos (Cuautla)▐ Guadalajara▐ Juarez▐ San Luis Potosi▐ Nogales
Malaysia▐ Penang
Japan▐ Yokohama
South Korea▐ Icheon▐ Sejong▐ Icheon
▐ Nuremberg▐ Regensburg▐ Roding▐ Schwalbach
Europe France▐ Boussens▐ Cergy▐ Faulquemont▐ Foix▐ Toulouse
Czech Republic▐ Brandys▐ Frenstat▐ Trutnov▐ Ostrava
Romania▐ Brasov▐ Iasi▐ Sibiu▐ Timişoara
Germany▐ Bebra/Mühlhausen▐ Berlin▐ Dortmund▐ Eisenach ▐ Gifhorn
Canada▐ Chatham
Thailand▐ Amata City
Russia▐ Kaluga
USA▐ Auburn Hills▐ Dearborn▐ Deer Park▐ Fountain Inn▐ Newport News▐ Seguin▐ Delavan
Singapore▐ Singapore
Hungary▐ Budapest▐ DebrecenItaly▐ Pisa
▐ Gruenstadt▐ Karben▐ Limbach-Oberfrohna▐ Lohmar
Locations shown might be shared with other Continental divisions.As of Dec. 31, 2018.
▐ Production / R&D▐ Joint Ventures <= 50%
© Continental AG 2018 Fact Book | 59
VIII. PowertrainKey Figures€ mn 2016 2017 2018
Sales 7,319.5 7,660.9 7,741.0EBITDA 756.2 854.8 574.6
in % of sales 10.3 11.2 7.4EBIT 378.0 439.9 119.8
in % of sales 5.2 5.7 1.5EBIT adjusted1 469.9 202.3
in % of sales1 6.1 2.6
Operating assets (average) 3,015.8 3,325.6 3,582.2ROCE 12.5 13.2 3.3
R, D & E expenses (net) 701.5 699.0 672.6in % of sales 9.6 9.1 8.7
Capex2 544.4 653.7 691.0in % of sales 7.4 8.5 8.9
Depreciation and amortization3 378.2 414.9 454.8in % of sales 5.2 5.4 5.9thereof impairment4 8.3 18.6 19.3
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
VIII. PowertrainSales by Market
Germany22%
Europe(excluding Germany)
28%
North America24%
Asia25%
Other markets1%
Germany19%
Other markets2%
Asia29%
North America23%
Europe(excluding Germany)
27%
Sales in 2018: €7.7 bnSales in 2013: €6.3 bn
© Continental AG 2018 Fact Book | 60
VIII. PowertrainRegulations to reduce CO2 Emissions in New Vehicle Fleets
60
90
120
150
180
210
2005 2010 2015 2020 2025 2030
US EU Japan China South Korea
Gram CO2 per kilometer, normalized to NEDC1
Source: International Council on Clean Transportation (ICCT), as of 01/2019 (and other sources)Due to different test procedures (U.S. CAFE, NEDC, JC08 and WLTC) the ICCT has developed a methodology to convert between cycles.1 New European Driving Cycle. 2 In 2020 mandatory for 95% of the OEMs’ fleets. As of 2021 mandatory for 100%.
Solid lines: historical performance and enacted targets. Dashed lines: proposed targets and studies.
2
VIII. PowertrainNew Management Structure
› Joined Continental AG in Hanover as an HR specialist in 1992
› Head of various HR departments in Tires and as a corporate function since 2000
› Head of HR in the Tires division since 2010
› CHRO since January 2019
› 10 years of experience in communications technology as well as systems and automation technology, including a CFO position
› With Siemens VDO and Continental in management positions since 1997
› Head of finance and controlling in the Chassis & Safety division since 2008
› CFO since January 2019
› More than 25 years in the automotive electronics industry since joining Siemens AG in 1989
› Held various management positions in controlling in Germany and France
› Head of the global Body & Security business unit within the Interior division as executive vice president since 2007
› CEO since October 2018
Andreas Wolf
CEO
Werner Volz
CFO
Ingo Holstein
CHRO
© Continental AG 2018 Fact Book | 61
Sustainability at Continental
Market DataAutomotive Group – Interior DivisionRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4262678691
3835
Instrumentation & Driver HMI
Infotainment & Connectivity Body & Security
Commercial Vehicles & Aftermarket
› Body control modules
› Access control systems
› Power closures
› Door control units
› Intelligent glass control
› Seat comfort systems
› Tire information systems
› Gateways
› Power stabilization
› Lighting control units
› Advanced antenna electronics
› Smart device integration
› Tachographs and telematics› Visual and haptical human-
machine interface› Chassis, body and transmission
electronics› Spare parts, wear parts and tools
› Original equipment services› Services and diagnostics for the
independent aftermarket, fleets and vehicle manufacturers
› Key as a service
› In-Car Data as a service
› eHorizon as a service
› City-Data as a service
› Instrument clusters
› Full digital clusters
› Display solutions
› Head-up displays
› Haptic controls
› Interior camera
› xDomain Hub
› Radios
› Infotainment
› Connectivity and telematics› Software and
connected solutions
VIII. InteriorBusiness Units and Key Products
© Continental AG 2018 Fact Book | 62
VIII. InteriorLocations Worldwide83 sites for production and R&D in 26 countries. Divisional headquarters in Regensburg, Germany.
India▐ Bangalore▐ Manesar
Brazil▐ Guarulhos▐ Resende
China▐ Changchun▐ Chongqing▐ Jinan▐ Nanjing▐ Shanghai▐ Tianjin▐ Wuhu
Mexico▐ Cuautla▐ Guadalajara▐ Juárez
USA▐ Auburn Hills▐ Culpeper▐ Deer Park▐ Hillsboro▐ Newport News
Malaysia▐ Penang
Japan▐ Kanagawa/
Yokohama▐ Aichi/Toyota
South Korea▐ Gyeonggi-do▐ Icheon-si▐ Sejong-si
▐ Karlsruhe▐ Markdorf▐ Muehlhausen▐ Munich▐ Nuremberg▐ Regensburg▐ Schwalbach am Taunus▐ Villingen-Schwenningen▐ Wetzlar▐ Munich
France▐ Boussens▐ Foix▐ Rambouillet▐ ToulouseHungary▐ BudapestItaly▐ Treviso
Austria▐ ViennaBegium▐ BrusselsCzech Rep.▐ Adršpach▐ Brandŷs▐ Frenštát
Lithuania▐ KaunasRomania▐ Iasi▐ Sibiu▐ TimişoaraSerbia▐ Novi SadSpain▐ Rubi
Sweden▐ ArvidsjaurUK▐ Birmingham▐ Bridgewater▐ Coventry▐ Devizes
Germany▐ Babenhausen▐ Bebra▐ Berlin▐ Dortmund▐ Erlangen▐ Garching▐ Herbrechtingen▐ Ingolstadt▐ Karben
▐ Salto▐ São Bernardo do Compo
Singapore▐ Singapore
Australia▐ Bundoora
Russia▐ Chistopol
▐ La Tijera▐ Las Colinas▐ Nogales
Europe
Philippines▐ Manila
Israel▐ Tel
Aviv
▐ Seguin▐ Troy▐ San Jose▐ Seattle
Locations shown might be shared with other Continental divisions.
▐ Periférico▐ Querétaro▐ Santa Anita
Thailand▐ Bangkok
▐ Production / R&D▐ Joint Ventures <= 50%
VIII. InteriorKey Figures€ mn 2016 2017 2018
Sales 8,324.7 9,305.2 9,707.2EBITDA 904.2 1,140.0 1,389.2
in % of sales 10.9 12.3 14.3EBIT 567.8 749.2 988.1
in % of sales 6.8 8.1 10.2EBIT adjusted1 812.7 899.1
in % of sales1 8.8 9.3
Operating assets (average) 4,513.8 5,028.9 5,626.3ROCE 12.6 14.9 17.6
R, D & E expenses (net) 956.0 1,062.7 1,064.7in % of sales 11.5 11.4 11.0
Capex2 428.9 453.3 578.4in % of sales 5.2 4.9 6.0
Depreciation and amortization3 336.4 390.8 401.1in % of sales 4.0 4.2 4.1thereof impairment4 11.6 18.2 -1.6
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
© Continental AG 2018 Fact Book | 63
VIII. InteriorSales by Market
Germany29%
Europe(excluding Germany)
21%
North America23%
Asia21%
Other markets6%
Germany27%
Other markets3%
Asia21%
North America23%
Europe(excluding Germany)
26%
Sales in 2018: €9.7 bnSales in 2013: €6.6 bn
VIII. InteriorExamples of Market-Specific Initiatives and Projects
› Connectivity (telematics, IAM, connected gateways)
› High speed connection (5G solutions)
› Infotainment (multimedia)› Digital tachographs (DTCO)› Cyber security, OTA (Argus)› Systems integration (E2E)
› Information systems (Integrated Interior Platform)
› Cutting edge HMI (FDC, Augmented Reality HUD, Haptics)
› Assist and warning functions (Digital companion)
› Fleet services (TIS Web, Zonar)
› Map/road services (eHorizon)› Key as a service (OTA keys)› City data, smart city
(Quantum Inventions) › Service backend
(Continental.cloud)
Holistic Connectivity Holistic HMI Services
Several initiatives at e.g.: ITS = Intelligent Transportation Systems; ERTICO = European road transport telematics implementation coordination organisation; Ongoing programs and field tests in Asia, America and Europe, e.g. Japan, Singapore, Germany, France.
IAM = Intelligent Antenna Module; E2E = End to End; HMI = Human Machine Interface; OTA = Over The Air; FDC = Full Digital Cluster; HUD = Head-Up Display.
© Continental AG 2018 Fact Book | 64
Europe
North America
South America
Asia/Pacific
World
ContinentalLearValeo
ContinentalDenso Sensata
ContinentalBoschDenso
ContinentalBosch Denso
ContinentalBoschDenso
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. InteriorMarket Position for Body & Security in 2018
Source: Continental estimates.
Europe
North America
South America
Asia/Pacific
World
ContinentalMagneti MarelliVisteon
ContinentalNippon SeikiVisteon
ContinentalMagneti Marelli Yazaki
ContinentalDensoNippon Seiki
ContinentalDenso Visteon
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. InteriorMarket Position for Instrumentation & Driver HMI1 in 2018
Source: Continental estimates.1 Excluding cockpit modules.
© Continental AG 2018 Fact Book | 65
Europe
North America
South America
Asia/Pacific
World
ContinentalHarmanLG
HarmanLG Panasonic
ContinentalBoschHarman
Clarion HarmanPanasonic
ContinentalHarmanPanasonic
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
ContinentalOther suppliers
ContinentalOther suppliers
Other suppliers
VIII. InteriorMarket Position for Infotainment & Connectivity in 2018
Source: Continental estimates.
Europe
North America
South America
Asia/Pacific
World
ContinentalStoneridgeWabco
ContinentalPhoenixStoneridge
ContinentalBoschWabco
ContinentalDETCYazaki
ContinentalStoneridgeYazaki
Market share of all suppliers other than top 3
Other suppliers
Other suppliers
Other suppliers
Other suppliers
Other suppliers
VIII. InteriorMarket Position for Commercial Vehicles1 in 2018
Source: Continental estimates.1 Market shares for commercial vehicle business as described in BU structure excluding automotive aftermarket.
© Continental AG 2018 Fact Book | 66
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
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IX. Rubber GroupKey Figures€ mn 2016 2017 2018
Sales 16,097.6 17,494.7 17,603.1EBITDA 3,559.6 3,499.6 3,196.6
in % of sales 22.1 20.0 18.2EBIT 2,688.6 2,593.5 2,278.3
in % of sales 16.7 14.8 12.9EBIT adjusted1 2,686.6 2,372.8
in % of sales1 15.4 13.6
Operating assets (average) 8,561.4 9,325.1 9,618.1ROCE 31.4 27.8 23.7
R, D & E expenses (net) 380.6 428.2 448.5in % of sales 2.4 2.4 2.5
Capex2 1,094.1 1,060.2 1,087.3in % of sales 6.8 6.1 6.2
Depreciation and amortization3 871.0 906.1 918.3in % of sales 5.4 5.2 5.2thereof impairment4 37.2 2.9 1.5
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
© Continental AG 2018 Fact Book | 67
IX. Rubber Group Sales and Adjusted EBIT1 by Division
1 Before amortization of intangibles from PPA, consolidation and special effects.
473
1,900 2,373
ContiTech Tires cons. Rubber Group
7.6%
16.8% 13.6%
Adj. EBIT margin (%)
6,345
11,352
94
17,603
ContiTech Tires cons. Rubber Group
3.2%
3.1% 3.0%
Organic sales growth (%)
Reported sales change› ContiTech: 1.6%› Tires: 0.2% › Rubber Group: 0.6%
› Reported EBITDA: €3,197 mn (18.2% of sales) › Reported EBIT: €2,278 mn (12.9% of sales)› R&D (net): €449 mn (2.5% of sales) › Capex: €1,087 mn (6.2% of sales)
-
1
Rubber Group Sales (€ mn) FY 2018 Rubber Group Adj. EBIT1 (€ mn) FY 2018
0
IX. Rubber GroupSales by Market
Germany21%
Europe(excluding Germany)
40%
North America20%
Asia11%
Other markets8%
Germany17%
Other markets6%
Asia14%
North America27%Europe
(excluding Germany)
36%
Sales in 2018: €17.6 bnSales in 2013: €13.4 bn
© Continental AG 2018 Fact Book | 68
IX. Rubber GroupOpportunities and Challenges – Rising Demand vs. Rather Stable Tire Capex
› Global replacement tire market expected to grow to 1.4 billion units by 2023
› Mix improvement continues driven by growing SUV share in the car park, espec. in Europe and China
› Europe to stay the largest replacement tire market by volume
› Tire Capex seems to be in balance with demand expectations
30% 29% 27%25% 24% 22%12% 14% 17%24%
24%24%9%
9%10%
1.061.23
1.42
2013 2018E 2023EEurope North America China Asia excluding China Rest of World
World Market for PC & LT1 Replacement Tires
Tire Capex2 2007 to 2019E (mn €)
0
2,000
4,000
6,000
8,000
10,000
1 Passenger and light truck replacement tire market in bn units; source: LMC (Dec. 2018).2 Company filings and forecasts (based on public information from 16 tire companies).
CAGR 3%CAGR 3%
IX. Rubber GroupGrowth Opportunities – Improving Tire Mix Due to Rising SUV & Pickup Share
PC<1 Production Europe PC<1 Production North America
1 Passenger car & light truck (<6t). Source: IHS, February 2019.
Share of SUVs and Pickup Trucks
PC<1 Production China PC<1 Production Worldwide
18%32% 38%
2013 2018E 2023E
50%63% 71%
2013 2018E 2023E
17%
41% 45%
2013 2018E 2023E
26%42% 46%
2013 2018E 2023E
© Continental AG 2018 Fact Book | 69
IX. Rubber Group Additional Tire Production Capacity of around 37mn1 Units by 2020/21
Mount Vernon(US)
Sumter(US)
Camaçari(BRA)
Kaluga(RU)
(CN)
Modipuram(IN)
Otrokovice(CZ)
Puchov(SK)
Rayong(THA)
Hefei
+2
+7
+3
+4
+14
+0.7+1.3
+0.3
+0.8
+0.5
+0.4
+ 0.3
+2Mississippi(US)
1 Base 2011.
Passenger tires
Truck tires
IX. Rubber GroupUpdate on 2025 Strategy
Stage 2: 2011 – 2015Sustain Value
› Accelerated global growth (focus BRIC countries)
› Leverage cost position› Improved technology position
to establish among “Best In Class”
Continuous value creation is our driving force!
Stage 3: 2016 – 2025Enhance Value
› Balance the global footprint› Benefit from excellent cost
position› Achieve podium position in
technology worldwide› Improve brand awareness
further› Rank among the top 3 globally
2 1 3
Stage 1: 2001 – 2010Create Value
› Global footprint and business optimized
› Strong cost focus› Global presence of CVT
sustained (SA/APAC)› Turnaround of PLT business in
North America region succeeded› Worldwide technology gap to
competition closed
© Continental AG 2018 Fact Book | 70
IX. Rubber GroupBalanced Global Manufacturing Footprint
0%
25%
50%
75%
100%
2010 2015 2025 target
2025 Local sourcing at competitive landed cost
Local sourcing at lowest landed
cost
Leverage costs
APAC
Americas
EMEA
IX. Rubber GroupStrategy 2025: Globalize Growth (mn units)1
1 Continental’s global production capacity of PC< and CV tires.
2025 Continental’s growth to outperform global market 2 1 3
APAC
Americas
EMEA
∑120∑142 ∑>200
0
40
80
120
2010 2015 2025 target
© Continental AG 2018 Fact Book | 71
IX. Rubber GroupRelevant Market and Growth Opportunities for ContiTech Products
Source: Market data and Continental estimates.1 Additional sales driven by servitization and software.
Σ~€82 bn
Σ~€64 bn
Balanced portfolio of OE automotive and non-OE automotive businesses –Growth through volume and (added) value1 expansion of products
1
2
3
4
567
1 Benecke-Hornschuch Surface Group (incl. Elastomer Coatings from 1/2018)
3 Industrial Fluid Systems
4 Vibration Control
5 Power Transmission Group
6 Conveyor Belt Group
7 Air Spring Systems
2 Mobile Fluid Systems
2018 2025
IX. Rubber GroupStrong Track Record of Acquiring and Integrating Operations
IFRS 9 and IFRS 15 applied starting 2018. All sales of acquisitions shown are pro forma sales in the year of the acquisition. 1 Incorporated starting March 1, 2017. 2 Do It Yourself.
Parker Hannifin’s automotive air conditioning business and Freudenberg
Sealing Technologies GmbHCombined sales: ~€180 mn
Phoenix AG, GermanyRubber productsSales: ~€1.0 bn
Matador Rubber s.r.o., Slovakia
Conveyor beltsSales: ~€30 mn
Tianjin Xinbinhai Conveyor Belt Co., China
and Mining Industrial Resource Supplies Pty
Ltd., AustraliaCombined sales:
~€15 mn
Legg Company Inc., USA and Metso Corp.,
FinlandConveyor belts
Combined sales: ~€60 mn
Veyance Technologies Inc., USARubber productsSales: ~€1.3 bn
Roulunds A/S, DenmarkTransmission belts
Sales: ~€45 mn
2,0632,894 2,869 3,064 3,007
2,4063,095 3,583 3,712 3,878 3,931
5,368 5,4636,246 6,345
7% 6%11% 12% 11%
7%12% 12% 12% 12% 11%
3%7% 7% 6%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Sales (mn €) Reported EBIT margin
Hornschuch Group GmbH, Germany
Foils, artificial leather for the furniture, construction, and automotive industries
and for the DIY2 sectorSales: ~€390 mn1
© Continental AG 2018 Fact Book | 72
IX. Rubber GroupRaw Material Prices
Source:Natural rubber: Rolling one-month contracts from the Singapore Exchange (U.S.$ cents per kg).Crude oil: Europe Brent Forties Oseberg Ekofisk price from Bloomberg (U.S.$ per barrel).Butadiene, styrene: South Korea export price (FOB) from PolymerUpdate.com (U.S.$ per metric ton).
0%
50%
100%
150%
200%
250%
300%
350%
Natural Rubber TSR 20 Natural Rubber RSS3 Styrene Crude oil Butadiene
based on January 1, 2008
2008 2009 2010 2011 2012 2013 2014 2015 201820172016
Sustainability at Continental
Market DataAutomotive GroupRubber Group – Tires DivisionShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246748691
3835
© Continental AG 2018 Fact Book | 73
1 Except North America, Columbia and Peru.2 Trademark rights for Malaysia, Singapore and Brunei.
PLT CVT Two Wheel Tires
Original Equipment
Replacement Truck Tires Commercial Specialty TiresEMEA The Americas APAC EMEA The Americas APAC
Tires for:› Compact, medium-size and full-size cars › 4x4 and SUVs› Vans, light trucks and recreational vehicles
Tires, services and solutions for customer segments:
› Goods› People› Construction
Tires, services and solutionsfor the applications: materialhandling,agriculture andearthmoving
Tires andtubes forbicycles and motorcycles
Ext. mobility systems: SSR, Minispares, Conti MobilityKit, ContiSeal, ContiSilent
IX. TiresBusiness Units and Tire Brands
1
2
Racing:
IX. TiresKey Figures€ mn 2016 2017 2018
Sales 10,717.4 11,325.8 11,352.2EBITDA 2,828.7 2,748.7 2,495.2
in % of sales 26.4 24.3 22.0EBIT 2,289.4 2,151.3 1,882.1
in % of sales 21.4 19.0 16.6EBIT adjusted1 2,146.8 1,900.0
in % of sales1 19.0 16.8
Operating assets (average) 5,612.7 6,143.0 6,471.2ROCE 40.8 35.0 29.1
R, D & E expenses (net) 260.9 289.8 299.4in % of sales 2.4 2.6 2.6
Capex2 882.1 847.0 837.1in % of sales 8.2 7.5 7.4
Depreciation and amortization3 539.3 597.4 613.1in % of sales 5.0 5.3 5.4thereof impairment4 0.2 0.5 1.2
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
© Continental AG 2018 Fact Book | 74
IX. TiresSales by Market
Germany17%
Europe(excluding Germany)
43%
North America23%
Asia9%
Other markets8% Germany
14%
Other markets7%
Asia12%
North America26%
Europe(excluding Germany)
41%
Sales in 2018: €11.4 bnSales in 2013: €9.6 bn
Austria
Estonia
Finland
Germany
Europe: Winter Tires Mandatory or Situationally Mandatory
Latvia
Lithuania
Romania
Sweden
Slovakia
Slovenia
November 1 to April 15 when winter weather conditions prevail
October 15 to April 1
December 1 to end of February
December 1 to March 1
November 1 to April 1
December 1 to March 31 when winter weather conditions prevail
Mandatory when winter weather conditions prevail (tires produced starting Jan. 1, 2018, must be marked with snowflake symbol)
When winter weather conditions prevail
November 15 to March 15
The snowflake symbol: a tire can be marked with this symbol (in addition to the M+S2 marking), if its braking or traction performance on snow exceeds that of a standard reference tire by a certain margin.
November 15 to March 31 when roads are snowy/icy
Norway
November 1 to Monday after Easter when winter weather conditions prevail; November 15 to March 31 for trucks
Europe: Winter Tires Partly Mandatory
Czech Republic
November 1 to March 31 when winter weather conditions prevail
France
Mandatory on certain roads, marked with signs
Italy Switzerland
Drivers may be held liable, if they cause an accident with summer tires mounted when winter weather conditions prevail
Canada: Winter Tires Partly Mandatory
1 Source: Continental AG and websites of country ministries, automobile associations and ETRMA (European Tyre and Rubber Manufacturers' Association). 2 Mud + snow. The M+S marking is given by the manufacturer and is not linked to a performance definition.
Mandatory in Québec December 15 to March 15; mandatory on certain roads in the mountains of Canada when winter weather conditions prevailCanada
Turkey
December 1 to April 1 for commercially used vehicles
Bosnia and Herzegovina
November 15 to April 15 when winter weather conditions prevail
Luxembourg
Mandatory when winter weather conditions prevail
Macedonia
November 15 to March 15
Serbia
November 1 to April 1 when winter weather conditions prevail
RussiaDecember 1 to February 28
Iceland
November 15 to April 1
Spain
BulgariaNovember 15 to March 1
IX. TiresWinter Tire Regulations1
© Continental AG 2018 Fact Book | 75
1 Regulation (EC) No.1222/2009 of the European Parliament and of the Council and Commission Regulations (EU) No. 228/2011 and (EU) No.1235/2011. Also implemented in Norway, Switzerland, Turkey, Israel. 2 Source: National Highway Traffic Safety Administration (NHTSA).3 Source: Japan Automobile Tyre Manufacturers Association (JATMA).4 Source: South Korean Ministry of Knowledge Economy (MKE).5 Source: National Institute of Metrology, Quality and Technology (INMETRO).
› Mandatory since November 2012
› Applies to all tires sold› Information to be shown:
rolling resistance (fuel efficiency), wet grip (braking performance on wet roads) and noise performance (external rolling noise). Either directly on the tire by means of a label or in some other way
› Self-certification policy › EU member states are
responsible for market surveillance
› Final decision pending› The NHTSA Tire Fuel
Efficiency Consumer Information Program proposes to inform consumers about the effect of tires on fuel efficiency, safety, and durability
› The program aims to implement a national tire fuel efficiency rating system for replacement tires, with the information provided to consumers at the point of sale and online
Label proposed by NHTSA2
› Voluntary since 2010› Introduced by JATMA3
› Applies to replacement summer tires for passenger cars; includes information on rolling resistance and wet grip performance
› Tires with a grading of A and above for rolling resistance performance are defined as “fuel efficient tires” and are marked with an additional symbol (the lower of the symbols above)
› Mandatory since November 2012
› Introduced by MKE4
› Applies to all tires sold in South Korea (OE and replacement) for passenger cars and light trucks; includes information on rolling resistance and wet grip performance
› The label has to be attached to the tread of each tire; for OE tires the information has to be provided in the car manual
› Registration of all products required
› Available as of April 2015› Mandatory as of
October 2016› Introduced by INMETRO5
› Applies to all tires sold (with certain exceptions). Includes information on rolling resistance, wet grip andnoise performance
› Certification to be carried out by a product certification body accredited by INMETRO
IX. TiresTire Labeling Initiatives in Europe, USA, Japan, South Korea and Brazil
EU1 USA2 Japan3 South Korea4 Brazil5
Source:1 Saudi standards, Metrology and Quality Organization Standard 2857/2015, SASO.2 Standardization Organization of the Gulf Cooperation Council Countries, GSO.3 Chinese Rubber Industry Association (CRIA).
› Mandatory since November 2015 (truck tires as of Nov. 2016)
› Applies to all replacement tires
› Information to be shown: rolling resistance (fuel efficiency) and wet grip (braking performance on wet roads)Directly on the tire by means of a label
› Registration of all products required
› Voluntary as of 2017› Introduced by CRIA3
› Applies to all replacement tires for passenger cars
› Information to be shown: rolling resistance (fuel efficiency), wet grip (braking performance on wet roads) and noise performance (external rolling noise)
› Mandatory since January 2016 (light truck and truck tires as of Jan. 2017)
› Applies to all replacement tires
› Information to be shown: rolling resistance (fuel efficiency) and wet grip (braking performance on wet roads)Directly on the tire by means of a label
› Registration of all products required
IX. TiresTire Labeling Initiatives in Gulf Countries and China
Saudi Arabia1 China3Gulf Countries2
© Continental AG 2018 Fact Book | 76
Europe2
North America
ContinentalGoodyear/Sumitomo3
Michelin
Bridgestone/FirestoneGoodyearMichelin
Market share of all suppliers other than top 3
Other suppliers
ContinentalOther suppliers
IX. Passenger and Light Truck TiresMarket Share for Passenger and Light Truck Tires1 in 2018
Source: Continental estimates.1 Replacement.2 Western and Central Europe including Turkey.3 Dissolving of alliance in October 2015.
Europe2
North America
Bridgestone/FirestoneGoodyear/Sumitomo3
Michelin
Bridgestone/FirestoneGoodyearMichelin
ContinentalOther suppliers
ContinentalOther suppliers
IX. Commercial Vehicle TiresMarket Share for Truck Tires1 in 2018
Source: Continental estimates.1 Replacement.2 Western and Central Europe including Turkey.3 Dissolving of alliance in October 2015.
Market share of all suppliers other than top 3
© Continental AG 2018 Fact Book | 77
IX. Passenger and Light Truck TiresContinental Worldwide PLT Production in 20181
1 W/o Europe.
Mount Vernon
11
(US)
Sumter(US)
3
San Luis Potosí
6
(MX)
Cuenca
2
(EC)Camaçari
8
(BR)
Port Elizabeth
2
(ZA)
0.5
Modipuram(IN)
Alor Star /Petaling Jaya
3
(MY)
Hefei(CN)
9
mn units
IX. Passenger and Light Truck TiresContinental European PLT Production in 2018
Lousado
18
Sarreguemines
10
Aachen
8
Korbach
9
Otrokovice
20
Puchov
15
Timişoara
17
mn units
(PT)
(DE)
(FR)
(RO)
(CZ) (SK)
Kaluga
(DE)
(RU)
3
© Continental AG 2018 Fact Book | 78
IX. Commercial Vehicle TiresContinental Worldwide Truck Tire Production1 in 2018
Mount Vernon(US)
3.2
Cuenca
0.2
(EC)Camaçari
(BR)
0.7
Otrokovice(CZ)
1.5Puchov
(SK)
2.9
0.6
Modipuram(IN)
Petaling Jaya
0.1
(MY)
1 Production of bias and radial tires.2 Including TBR & TBX, w/o Retread & CST.
mn units2
IX. TiresCost of Labor at Continental Manufacturing Sites1
Restated base calculation. Not comparable to prior year.1 Based on average currency exchange rates in 2018.
7%12%13%
18%27%
30%33%
37%40%41%
58%59%
70%94%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
IndiaMalaysia
RussiaChina
RomaniaSouth Africa
BrazilEcuadorSlovakia
Czech RepublicPortugal
MexicoUSA
FranceGermany
© Continental AG 2018 Fact Book | 79
IX. Passenger and Light Truck TiresProduct Mix Improvement
Winter tires worldwide1
(in mn units / year-on-year increase in %)
1 OE and replacement (excl. all-season tires).2 All summer tires and all-season tires with rim sizes of at least 18 inches.
High performance summer tires worldwide2
(in mn units / year-on-year increase in %)
21 22 22 21 22 23 23
0.7% 1.7% 0.7%
-3.0%
2.0% 3.7% 3.4%
2012 2013 2014 2015 2016 2017 2018
13 15 1721
2630
31
24.5%18.1% 13.6%
22.8% 19.1% 16.4%6.0%
2012 2013 2014 2015 2016 2017 2018
IX. Passenger and Light Truck TiresUnit Sales 2013 – 2018
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2013 2014 2015 2016 2017 2018
Europe (incl. rest of world) The Americas Asia / Pacific
142125 128 134
146mn units 145
© Continental AG 2018 Fact Book | 80
IX. Commercial Vehicle TiresUnit Sales 2013 – 2018
0.01.02.03.04.05.06.07.08.09.0
10.0
2013 2014 2015 2016 2017 2018
Europe (incl. rest of world) The Americas Asia / Pacific
8.57.5 7.8 8.2
8.9mn units 9.3
Sustainability at Continental
Market DataAutomotive GroupRubber Group – ContiTech DivisionShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246828691
3835
© Continental AG 2018 Fact Book | 81
IX. ContiTechBusiness Units and Key Products
As a technology partner, we offer intelligent
solutions made of rubber and plastic
in combination with metal,
fabric and electronics.
Air Spring Systems Industrial Fluid SolutionsBenecke-Hornschuch Surface Group
Conveyor Belt Group
Mobile Fluid Systems Power Transmission Group Vibration Control
Air Spring Systems in commercial, industrial & rail vehicles, machinery & equipment
Surface materials for vehicle interiors, home decoration and technical solutions
Belts, components and systems for vehicles and many other industries
System supplier of conveyor and special belts with worldwide assembly and maintenance service
Hoses for almost every industrial application and industrial vehicles
Solutions from hose components to complex piping systems for passenger cars and commercial vehicles
Vibration technology and noise insulation in automobiles and many other industries
IX. ContiTechForming a Global Player in Rubber and Plastics Technologies
Top 10 Non-Tire Rubber Companies – 2017 Sales (€ bn)
1
2
3
4
5
6
7
ContiTech Freudenberg(Seals & Vibr.Contr. Tech.)
BridgestoneDiversifiedProducts
Hutchinson Sumitomo Riko TI Fluid Cooper Standard GatesCorporation
NOK(Seal Business)
Trelleborg(excl. tirebusiness)
Source: Company filings. Calendarized to Dec. year-end. Based on average currency exchange rates 2017
© Continental AG 2018 Fact Book | 82
Mobile Fluid Systems
27%
Benecke-Hornschuch
Surface Group20%
Conveyor Belt Group18%
Power Transmission
Group12%
Industrial Fluid Solutions
10%
Vibration Control6%
Air Spring Systems7%
IX. ContiTechSales Distribution by Business Unit 2018
1
1 Renamed from Benecke-Kaliko Group in June 2017.
IX. ContiTechLocations Worldwide
USA▐ Auburn Hills▐ Fairlawn▐ Halstead▐ Hogansville▐ Houston▐ Lincoln▐ Marysville▐ Mount Pleasant▐ Norfolk▐ Porterdale
Czech Republic▐ Ostrava-Hrabova
France▐ Andrezieux▐ Caluire▐ Villeurbanne
Finland▐ Tampere
India▐ Kolkata▐ Sonepat
Brazil▐ Americana▐ Macaé▐ Ponta Grossa▐ Santana de Parnaiba
China▐ Changchun▐ Changshu▐ Changzhi▐ Changzhou▐ Hangzhou▐ Ninghai▐ Qingdao▐ Sanmen▐ Shanghai (2)▐ Yanzhou▐ Zhangjiagang
Japan▐ Yokohama
South Korea▐ Cheonan (2)▐ Jeonju▐ Yangsan
Germany▐ Aachen▐ Bad Blankenburg▐ Berlin/Hoppegarten▐ Dannenberg▐ Eislingen▐ Hamburg▐ Hanover (3)▐ Hann. Münden▐ Hedemünden
Chile▐ Santiago de Chile
▐ Herbholzheim▐ Hofheim▐ Karben▐ Kohren-Sahlis▐ Korbach▐ Moers▐ Northeim▐ Oedelsheim▐ Oppenweiler
Poland▐ Wągrowiec
Romania▐ Carei▐ Nadab▐ Timişoara
Russia▐ Kaluga
Serbia▐ Subotica▐ Veliki Crljeni
Slovakia▐ Dolné Vestenice▐ Puchov
Slovenia▐ Kranj
Spain▐ Pamplona
Turkey▐ BursaUK▐ Ashington▐ Grimsby▐ Wigan
Greece▐ Vólos
Hungary▐ Makó▐ Nyiregyhaza ▐ Szeged▐ Vác
Australia▐ Bayswater▐ Sydney
▐ ContiTech Production/R&D▐ Cooperation, Joint Ventures < 50%
Canada▐ Granby
South-Africa▐ Pinetown▐ Uitenhage
▐ Rochester Hills, MI▐ Rochester, NH▐ San José▐ Somersworth▐ Spring Hope▐ St. Marys▐ Sun Prairie▐ Valparaiso▐ Winchester
Venezuela▐ Tinaquillo
Mexico▐ Chihuahua▐ Delicias ▐ Mexico City
112 sites for production and R&D in 30 countries. Divisional headquarters in Hanover, Germany.
Malaysia▐ Seremban
Morrocco▐ Jorf Lasfar
VAE▐ Dubai
▐ Montemorelos▐ Monterrey▐ San Luis Potosí (4)
▐ Stolzenau▐ Waltershausen (3)▐ Weißbach▐ Herzogenaurach
© Continental AG 2018 Fact Book | 83
IX. ContiTechKey Figures€ mn 2016 2017 2018Sales 5,462.5 6,246.4 6,344.7EBITDA 730.9 750.9 701.4
in % of sales 13.4 12.0 11.1EBIT 399.2 442.2 396.2
in % of sales 7.3 7.1 6.2EBIT adjusted1 539.8 472.8
in % of sales1 8.7 7.6
Operating assets (average) 2,948.7 3,182.1 3,146.9ROCE 13.5 13.9 12.6
R, D & E expenses (net) 119.7 138.4 149.1in % of sales 2.2 2.2 2.3
Capex2 212.0 213.2 250.2in % of sales 3.9 3.4 3.9
Depreciation and amortization3 331.7 308.7 305.2in % of sales 6.1 4.9 4.8thereof impairment4 37.0 2.4 0.3
IFRS 9 and IFRS 15 applied starting 2018.1 EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation.2 Capital expenditure on property, plant and equipment, and software.3 Excluding impairment on financial investments.4 Impairment also includes necessary reversals of impairment losses.
IX. ContiTechSales by Market
Germany33%
Europe(excluding Germany)
31%
North America12%
Asia16%
Other markets8%
Germany22%
Other markets6% Asia
18%
North America28%
Europe(excluding Germany)
26%
Sales in 2018: €6.3 bnSales in 2013: €3.9 bn
© Continental AG 2018 Fact Book | 84
IX. ContiTechCustomer and Competence Fields
Aerospace Agriculture and Forestry Commercial Vehicles Construction
Energy Food and Beverage Home, Garden and Leisure Material Handling
Mechanical/Plant Engineering Mining Occupational Safety Passenger Cars
Printing Rail Transport Ship, Port and Ocean Two Wheelers
We are experts in a large variety of industries with an understanding for the opportunities of digitalization.
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
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3835
© Continental AG 2018 Fact Book | 85
X. Share and Bond InformationShare Data / ADR Data
1Before October 29, 2018 split was 1:5.
Share Data
Type of share No-par value share
Bloomberg Ticker CON
Reuters Ticker CONG
German Security Identification Number (WKN) 543 900
ISIN DE0005439004
Shares outstanding as at December 31, 2018 200,005,983
ADR Data
Ratio 1:10 (ordinary share : ADRs)1
Bloomberg Ticker CTTAY
Reuters Ticker CTTAY.PK
ISIN US2107712000
ADR Level Level 1
Exchange OTC
Sponsor Deutsche Bank Trust Company Americas
X. Share and Bond InformationShare Price Development vs. Major Stock Indexes
Source: Bloomberg.
0%
200%
400%
600%
800%
1000%
1200%
1400%
Jan-
98
Jan-
99
Jan-
00
Jan-
01
Jan-
02
Jan-
03
Jan-
04
Jan-
05
Jan-
06
Jan-
07
Jan-
08
Jan-
09
Jan-
10
Jan-
11
Jan-
12
Jan-
13
Jan-
14
Jan-
15
Jan-
16
Jan-
17
Jan-
18
Jan-
19
Continental DAX EURO STOXX 50 EURO STOXX Automobile & Parts
based on January 1, 1998 = 100% (€ 19.80)
© Continental AG 2018 Fact Book | 86
X. Share and Bond InformationCommon Stock
512 512 512 512 512 512 512 512
200 200 200 200 200 200 200 200
0
100
200
300
400
500
600
2011 2012 2013 2014 2015 2016 2017 2018
Common stock (€ mn) Number of shares (mn)
X. Share and Bond InformationShareholder Structure
UK and Ireland25.3%
Germany10.0%
Germany (retail)5.7%
France5.9%Scandinavia
3.2%
Rest of Europe6.7%
USA and Canada26.3%
Asia, Australia
and Africa3.5%
Unidentified13.5%
Free Float
54.0%
IHO-Group46.0%
Shareholder structureas at December 31, 2018
Shareholder structureof the free float
(86.5% identified)as at December 31, 2018
© Continental AG 2018 Fact Book | 87
X. Share and Bond InformationBond Data
Issuer Continental AG Continental AG
Issue Senior Notes Senior Notes
Principal amount €600 mn €750 mn
Offering price 99.410% 99.228%
Rating at issuance date BBB+ (S&P)BBB+ (Fitch)
Ba1 (Moody’s3)BB (S&P)BBB (Fitch1)
Current corporation and bond ratings2 BBB+ (Fitch), BBB+ (S&P), Baa1 (Moody’s3)
Coupon 0.0% p.a. 3.125% p.a.
Issue date December 5, 2016 September 9, 2013
Maturity February 5, 2020 September 9, 2020
Interest payment Not applicable AnnualSeptember 9
WKN A2DARM A1X3B7
ISIN XS1529561182 XS0969344083
Denomination €1,000 with minimum tradable amount €1,000
1 Non-contracted rating at date of issuance.2 Fitch since October 24, 2016; S&P since May 11, 2016; Moodyʼs since June 30, 2015.3 Non-contracted rating since February 1, 2014.
X. Share and Bond InformationDevelopment of the Bonds
Source: Bloomberg.
96
98
100
102
104
106
108
110
112
114
September 2013 September 2014 September 2015 September 2016 September 2017 September 2018
2.5 % March 2017 3.0 % July 2018 3.125 % Sept. 2020 0.5% Feb. 2019 0.0 % Feb. 2020
January 18, 2019
(in %)
© Continental AG 2018 Fact Book | 88
X. Share and Bond InformationDividend, Earnings per Share and Payout Ratio
1 Dividend for FY 2018 subject to approval of the Annual Shareholders’ Meeting (ASM) on April 26, 2019.2 Dividend paid for the respective fiscal year, payout in the subsequent year.
2.25 2.503.25 3.75 4.25 4.50 4.75
9.53 9.62
11.88
13.64 14.0114.92 14.49
23.6% 26.0% 27.4% 27.5% 30.3% 30.2%32.8%
2012 2013 2014 2015 2016 2017 2018
Dividend per share (€) Earnings per share reported (€) Payout ratio2
1
1
X. Share and Bond InformationDevelopment of Continental’s Credit Rating
1 Contracted rating since May 19, 2000.2 Non-contracted rating since February 1, 2014.3 Contracted rating since November 7, 2013.
BBB+ / Baa1
BBB / Baa2
BBB- / Baa3
BB+ / Ba1
BB / Ba2
BB- / Ba3
B+ / B1
B / B2
S&P, Fitch / Moody’s Standard & Poor’s1 Moody’s2 Fitch3
Before Siemens VDO N
on-In
vest
men
t G
rade
Inve
stm
ent
Gra
de
© Continental AG 2018 Fact Book | 89
X. Share and Bond Information10 Year Financial Overview
1 Since 2018, IFRS 9, Financial Instruments, and IFRS 15, Revenue from Contracts with Customers, have been applied. 5 As a percentage of sales.2 IAS 19 (revised 2011), Employee Benefits, has been applied since 2012. 6 Excluding impairment on financial investments.3 Including non-controlling interests. 7 Subject to the approval of the Annual Shareholders’ Meeting on April 26, 2019.4 Capital expenditure on property, plant and equipment, and software.
20181 2017 2016 2015 2014 2013 20122 2011 2010 2009Balance sheetNon-current assets € mn 23,658.7 22,038.4 21,321.0 19,666.6 16,923.3 15,569.5 15,685.7 15,075.5 14,887.9 14,724.6Current assets € mn 16,786.7 15.402.1 14,853.9 13,169.1 13,317.8 11,251.3 11,764.4 10,962.9 9,502.6 8,324.6Total assets € mn 40,445.4 37,440.5 36,174.9 32,835.7 30,241.1 26,820.8 27,450.1 26,038.4 24,390.5 23,049.2Shareholders’ equity (excl. non-controlling interests) € mn 17,850.4 15,828.4 14,270.0 12,786.3 10,672.1 9,011.2 7,779.0 7,146.1 5,859.6 3,772.6Non-controlling interests € mn 482.9 461.9 464.8 427.6 352.5 311.0 377.4 397.2 343.3 289.1Total equity (incl. non-controlling interests) € mn 18,333.3 16,290.3 14,734.8 13,213.9 11,024.6 9,322.2 8,156.4 7,543.3 6,202.9 4,061.7Equity ratio3 % 45.3 43.5 40.7 40.2 36.5 34.8 29.7 29.0 25.4 17.6Capital expenditure4 € mn 3,124.4 2,854.4 2,593.0 2,178.8 2,045.4 1,981.1 2,019.4 1,711.3 1,296.4 860.1Net indebtedness € mn 1,661.3 2,047.6 2,797.8 3,541.9 2,823.5 4,289.3 5,319.9 6,772.1 7,317.0 8,895.5Gearing ratio % 9.1 12.6 19.0 26.8 25.6 46.0 65.2 89.8 118.0 219.0Income statementSales € mn 44,404.4 44,009.5 40,549.5 39,232.0 34,505.7 33,331.0 32,736.2 30,504.9 26,046.9 20,095.7Share of foreign sales % 80.1 79.7 79.3 78.6 76.6 76.2 75.4 73.7 72.8 71.0Cost of sales5 % 75.0 74.2 73.4 74.1 74.9 76.6 78.3 79.0 77.8 80.0Research and development expenses (net)5 % 7.2 7.1 6.9 6.2 6.2 5.6 5.3 5.3 5.6 6.7Selling and logistics expenses5 % 5.6 5.5 5.6 5.6 5.3 5.0 4.8 4.7 5.0 5.6Administrative expenses5 % 2.6 2.6 2.5 2.4 2.2 2.1 2.0 2.1 2.5 3.0EBITDA € mn 6,235.7 6,678.9 6,057.4 6,001.4 5,133.8 5,095.0 4,967.4 4,228.0 3,587.6 1,591.2EBITDA5 % 14.0 15.2 14.9 15.3 14.9 15.3 15.2 13.9 13.8 7.9Personnel expenses € mn 11,125.3 10,687.3 9,695.7 9,164.6 7,757.2 7,124.5 6,813.7 6,354.3 5,891.7 5,199.8Depreciation and amortization6 € mn 2,208.0 2,117.4 1,961.6 1,885.8 1,789.0 1,831.3 1,781.2 1,631.1 1,652.4 2,631.6Net income attributable to the shareholders of the parent € mn 2,897.3 2,984.6 2,802.5 2,727.4 2,375.3 1,923.1 1,905.2 1,242.2 576.0 -1,649.2Dividend and earnings per shareDividend for the fiscal year € mn 950.07 900.0 850.0 750.0 650.0 500.0 450.0 300.0 — —as at December 31 € mn 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 200.0 169.0Net income (per share) attributable to the shareholders of the parent € 14.49 14.92 14.01 13.64 11.88 9.62 9.53 6.21 2.88 -9.76EmployeesAnnual average tsd 242.8 230.7 216.0 204.7 186.0 175.4 169.0 159.7 142.7 133.4
Sustainability at Continental
Market DataAutomotive GroupRubber GroupShare and Bond InformationGlossary
Continental at a GlanceI.Continental StrategyII.Automotive TrendsIII.
IV.
VII.VIII.IX.X.XI.
Topics
Corporate GovernanceV.Continental CorporationVI.
9152028
4246678691
3835
© Continental AG 2018 Fact Book | 90
XI. GlossaryFinancial Glossary
ADR American Depositary ReceiptCapex Capital expenditure on property, plant and equipment, and softwareEBIT Earnings Before Interest and TaxesEBIT adjusted EBIT before amortization of intangibles from PPA, consolidation and special effectsEBITDA EBIT before Depreciation and AmortizationEBIT margin EBIT as a percentage of salesEBITDA margin EBITDA as a percentage of salesFCF The sum of cash flow arising from operating activities and cash flow arising from investing activities. Also referred to as
cash flow before financing activities.Gearing ratio Net indebtedness divided by equity. Also known as the debt to equity ratio.ISIN International Securities Identification NumberNet indebtedness The net amount of interest-bearing financial liabilities as recognized in the statement of financial position, the positive fair
values of the derivative instruments, cash and cash equivalents, as well as other interest-bearing investments.NIAT Net Income Attributable to the shareholders of the parentOA The assets less liabilities as reported in the balance sheet, without recognizing the net indebtedness, sales of accounts
receivable, deferred tax assets, income tax receivables and payables, as well as other financial assets and debts. Average operating assets are calculated as at the end of the quarterly periods and, according to our definition, correspond to the capital employed.
PPA Purchase Price AllocationR, D & E expenses Research, Development and Engineering ExpensesROCE (average) Return On Capital Employed. We define ROCE as the ratio of EBIT to average operating assets for the fiscal year.
XI. GlossaryProduct and Division Glossary
ABS Anti-Lock Brake SystemACC Adaptive Cruise ControlADAS Advanced Driver Assistance SystemsCAGR Compound Annual Growth RateC&S Chassis & Safety Division CT ContiTech Division CV Commercial VehicleCVT Commercial Vehicle Tires ECU Electronic Control UnitEBS Electronic Brake SystemESC Electronic Stability Control E2E End to EndFDG Full Digital ClusterHEV Hybrid Electric VehicleHMI Human Machine InterfaceHUD Head Up Display
I Interior Division IAM Intelligent Antenna ModuleLT Light TruckNVH Noise Vibration HarshnessOCB Optimized Curve BreakOLED Organic Light Emitting DiodeOTA Over The AirPC Passenger CarPLT Passenger and Light Truck TiresPT Powertrain Division RV Recreational VehicleSSR Self-Supporting Runflat TiresSUV Sport Utility VehicleTCS Traction Control SystemTPMS Tire Pressure Monitoring SystemV2X Vehicle-to-everything
© Continental AG 2018 Fact Book | 91
ContactEquity and Debt Markets Relations
Vahrenwalder Str. 930165 HanoverGermany
E-mail: [email protected]: +49 511 938 1080 www.continental-ir.com
Michael SaemannAnalysts, Institutional Investors and Sustainability Investors
Phone: +49 511 938 1307E-mail: [email protected]
Marvin KalberlahAnalysts, Institutional Investors Social Media
Phone: +49 511 938 14034E-mail: [email protected]
Christopher MackeAnalysts, Institutional Investors
Phone: +49 511 938 1062 E-mail: [email protected]
Klaus PaeslerAnalysts, Institutional Investors, ADR and Private Investors
Phone: +49 511 938 1316 E-mail: [email protected]
Sabine ReeseSustainability, ASM, CMD Organization, IR Website, Capital Market Disclosure Requirements
Phone: +49 511 938 1027 E-mail: [email protected]
Bernard WangHead of IR
Phone: +49 511 938 1068E-mail: [email protected]
Jana CrossAssistant to the Head of IRRoadshow and Conference Organization
Phone: +49 511 938 1163E-mail: [email protected]
2019Preliminary figures for fiscal 2018 January 14, 2019
Annual Financial Press Conference March 7, 2019
Annual Shareholders’ Meeting (incl. key data for Q1 2019) April 26, 2019
Q1 Financial Report May 9, 2019
Half Year Financial Report August 6, 2019
Nine Month Financial Report November 12, 2019
2020Preliminary figures for fiscal 2019 January 2020
Annual Financial Press Conference March 2020
Annual Shareholders’ Meeting (incl. key data for Q1 2020) April 30, 2020
Q1 Financial Report May 2020
Half Year Financial Report August 2020
Nine Month Financial Report November 2020
Financial Calendar
© Continental AG 2018 Fact Book | 92
Continental Aktiengesellschaft
Investor Relations
P.O. Box 169, 30001 Hanover, Germany
Vahrenwalder Str. 9, 30165 Hanover, Germany
Phone +49 511 938-1163, Fax +49 511 938-1080
E-mail [email protected]
www.continental-ir.com