paris – june 9, 2017 - continental usa...sustainability presentation – june 9, 2017 oddo bhf -...

Sustainability Presentation ODDO BHF- 12th Environment Forum

Paris – June 9, 2017

http://www.continental-ir.com Rolf Woller – Head of IR

Ticker: CON ADR-Ticker: CTTAY

Sustainability Presentation – June 9, 2017 ODDO BHF - 12th Environment Forum EDMR – Equity and Debt Markets Relations 2

AGENDA

Continental at a Glance 1 3 Sustainability Responsibility at Continental 2 8 Environmental Responsibility at Continental 3 10 Technologies in the Automotive Group 4 15 Technologies in the Rubber Group 5 26

6 Outlook 2017 41

Backup 50 7

Sustainability Presentation – June 9, 2017 ODDO BHF - 12th Environment Forum EDMR – Equity and Debt Markets Relations

1) Continental at a Glance Continental Ranks No. 2 in Worldwide Supplier Ranking

Source: Company filings. Calendarized to December year-end. Based on average currency exchange rates 2016.

3

0

10

20

30

40

50

Rob

ert

Bos

ch

Con

tinen

tal

Den

so

Mag

na

ZF

Hyu

ndai

Mob

is

Ais

inS

eiki

Brid

gest

one

Mic

helin

Faur

ecia

Top 10 Global OEM Suppliers – 2016 Sales (in € bn)1 2 43

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.


1) Continental at a Glance Megatrends in the Automobile Industry

Safety – For Safe Mobility

Information – For Intelligent Driving

Affordable Cars – For Global MobilityA&B Production Segment1 in BRIC

(mn units)

Driver and Passenger Devices Infrastructure Other Vehicles

Vehicle

CO2 Fleet Emission Targets 2020/21 (NEDC)

1 New European Driving Cycle.2 Mandatory for 95% of the OEMs fleets.Source: ICCT Int. Council of Clean Transportation, Global Passenger

Vehicle FE/GHG regulations (2/2016).

Environment – For Clean Power

125g/km

95g/km2

117g/km

122g/km

1

Road Traffic DeathsNumber of Road Traffic Deaths per 100,000 Inhabitants by Region1

Source: Global Status Report on Road Safety, World Health Organization (WHO) 2015.1 Data based on framework created by the World Health Organization (WHO) for estimating roadtraffic mortality.

WesternPacific

AfricaSouth East Asia

Eastern Mediterranean

Europe and Russia

Americas

per 100.000 population

26.6

19.9

17.015.9

9.3

17.3

4


1) Continental at a Glance A 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› Turbochargers› 48 V 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

Sales 2016 €8,978 mn% of total 22%

Adj. EBIT1 €592 mnAdj. EBIT margin 6.6%





ADAS2 installation rate worldwide 2 Gasoline direct injection systems installation rate worldwide (%)

Market for Automotive Electronics3

(USD bn)

Chassis & Safety Powertrain Interior

34%

61%

2016 2021E

255

317

2016 2021E

0.99

1.81

2016 2021E

1 Before amortization of intangibles from PPA, consolidation and special effects. 2 ADAS: Advanced Driver Assistance System. Average amount of ADAS including sensing rear/surround view cameras but w/o parking assist functions based on ultrasonic 3 Source: Strategy Analytics: Automotive Electronics System Demand Forecast 2012 to 2021, Jan 2015.

5


1) Continental at a Glance A Leading Global Supplier of Tire and Non-Tire Rubber Products

6



› Markets› EMEA› The Americas› APAC

› Products› Original equipment› Replacement› Summer tires, winter tires,

high performance tires

› Markets› EMEA› The Americas› APAC

› Products› Original equipment› Replacement› Commercial Specialty Tires

› Automotive hoses and hose lines› Automotive interior trim› Conveyor belts› Industrial hoses› Multiple V-ribbed belts and

timing belts› Air springs for railways, trucks &

buses› Vibration absorbers› Elastomer coatings


Adj. EBIT1 €2,306 mnAdj. EBIT margin 21.7%

Passenger & Light Truck Tires Commercial Vehicle Tires

ContiTech

Sales breakdown (%) Sales breakdown (%)

Tires

1 Before amortization of intangibles from PPA, consolidation and special effects.

OE30%

Non-OE70%

OE52%

Non-OE48%


Value Creation is Our Driving

Force

Great people culture

Value creation

Regional sales

balance Technological

balance

In the market for the market

Top market

position

Affordable Cars –

For global mobility

Safety –

For safe mobility

Information –

For intelligent driving

Environment –

For clean power

1) Continental at a Glance Systematic Entrepreneurial Approach


Sustainability at Continental

Sustainable management and social responsibility are inscribed within the bedrock of Continental’s corporate values. Both reinforce the culture of solidarity while simultaneously contributing to forward-looking and value based corporate management. We respect the freedom of future generations and live up to our responsibility. With our products and services, we help expand – and do not restrict – their opportunities for development. We consider sustainable management to be a strategic corporate development task.

Source: Since Annual Report Continental AG 2013, GRI 2013

2) Sustainability Responsibility at Continental Our Definition


ESH1 Policy – implements worldwide the responsibility for protecting the environment

Code of Conduct – personal ethics, conflicts of interest The BASICS – the guidelines, codex and basic principles of our business activities

OUR BASICS Our corporate guidelines

Corporate Governance Policy – to further a responsible management of the company focused on value creation

Risk Report – overview of our Risk Management

Principles of our Corporate Social Responsibility

Environmental Responsibility Social Responsibility Corporate Governance

1Environment, Safety and Health.

2) Sustainability Responsibility at Continental Our Policies and Guidelines


Environmental Certification (ISO 14001)

› Back in 1995, the tire and ContiTech site at Korbach was the first company in the rubber industry to be monitored externally in line with the European EMAS system

› Locations in non-EU member states have also signed up to the EMAS system, and set themselves the same high environment standards that apply in EU member states.

› Since the introduction of the ISO 14001 standard in 1996, certification at Continental has also been conducted according to this international norm.

› For locations that supply products to the automotive industry, implementation of the ISO 14001 standard is now a matter of course.

Locations worldwide1

Thereof ISO 14001 certified

Automotive Group 81 100%

Rubber Group 114 68.4% 1 Main production facilities.

3) Environmental Responsibility at Continental Status of Environmental Certification


“The ISO 9000 family addresses “Quality management”. This means what the organization does to fulfill:

› the customer's quality requirements, and

› applicable regulatory requirements, while aiming to

› enhance customer satisfaction, and

› achieve continual improvement of its performance in pursuit of these objectives.”*

ISO/TS 16949* specifies requirements using ISO 9001 for service and replacement production in the automobile industry

ISO/TS 16949

ISO 9001 or ISO/TS 16949

Automotive Group: production sites 100%

Rubber Group Tires: production plants 100%

Rubber Group ContiTech: production sites 100%

1 Source: ISO (International Organization of Standardization) www.iso.org/iso/home.html

3) Environmental Responsibility at Continental Status of Environmental Certification


1 Changes to previous figures are due to changes in the data collection. 2 Reviewed by KPMG and verified with an ISAE 3000 certificate. 3 Independently verified by KPMG.

12

2 2

659 662 715 613

1.857 1.974 2.073

759 771 738

2013 2014 2015 Target 2020

CO2 Emissions1

Scope 1 - direct CO2 emissions in 1000t Scope 2 - indirect CO2 emissions from external power stations in 1000t Specific CO2 emissions (100kg/Mio € adjusted sales)

1.616 1.642 1.671

487 480 442 394

2013 2014 2015 Target 2020

Water consumption1

10.000 m3 Specific water consumption (m3/Mio € adjusted sales)

280 291 310

84 85 82 68 84 85 83 90

2013 2014 2015 Target 2020

Waste production1

Waste generation (1000 t) Specific waste generation (100kg/Mio € adjusted sales) Waste recovery (%)

2 2 2 3 2 3

2 3

2.748 2.789 2.935

829 816 777 669

2013 2014 2015 Target 2020

Energy consumption1

10.000 GJ Specific energy consumption (GJ/ Mio € adjusted sales)

2

3) Environmental Responsibility at Continental Corporate Environmental Key Performance Indicators


1 Saving potential compared with gasoline direction injection Euro 5 / NEDC. 2 SCR = Selective Catalytic Reduction. 3 DDS = DEKA injector for diesel dosing into exhaust gas. 4 TPMS = Tire Pressure Monitoring System. 5 POD = Power-On-Demand. 6 AES = Advanced Energy Supply.

Full hybrid electric vehicle (FHEV)

Compressed Natural Gas (CNG)

Piezo common rail injection

Mild hybrid electric vehicle (MHEV, 48V)

Engine downsizing and turbocharger

Telematics, ACC, ADAS

SCR systems/DDS

Tires (rolling resistance, TPMS )

Energy management (POD /AES )

Connected energy management

Double clutch transmission (DCT)

Transmission (POD ) min max

20-25%

15-20%

10-20%

5-12%

2-5%

1-5%

3-4%

3%

1-2%

2-5%

2 3

5

~15%

4

10-20%

5 6

3) Environmental Responsibility Reduction of CO2 Emissions1: Solutions by Continental

13


~ 23%

~54%

~22%

~1/3

Sales 2016 (€ 40.5 bn)

Other Sales

''Green Tires''

Powertrain Components

Lightweight Components

Other Sales

› Green tires: Tires optimized on rolling resistance (all tires labelled B and better)

› Lightweight components: Light weight brakes, road database (green maps), intelligent transportation systems

3) Environmental Responsibility Sales of Products to Reduce CO2 Emissions


› Control units for

› Automatic transmission

› Double clutch transmission

› Automated manual transmission

› Continuously variable transmission

› Control units for 4x4 and AWD applications

› Transfer cases› Differentials› Limited slip coupling› Axle disconnect

TransmissionEngine SystemsFuel & Exhaust Management

Sensors & Actuators

Hybrid Electric Vehicle

› Engine Management Systems and fuel components for

› Diesel Piezo Common Rail Injection System

› Gasoline SolenoidDirect Injection

› Gasoline Port Injection

› Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG)

› Exhaust Aftertreatment

› Engine Management Systems and exhaust after-treatment pro-ducts for commercial vehicle applications

› Turbochargers for gasoline engines

› Power electronics

› Electric motors

› Battery management systems

› Energy management

› Power net systems

› Actuators for

› Electric pumps› Electric throttle & air

control› Exhaust & emission› General purpose

› Exhaust & emission sensors for

› Exhaust gas› Fluids: Oil level, fuel,

UREA› Temperature

› Engine & trans-mission sensors

› Airflow› Combustion› Position› Pressure

› Door handle sensors

› Fuel delivery modules

› Fuel level sensors

› Fuel pumps

› Electronics for fuel pump control

› Fluid level sensor with sealed contact system

› Catalysts and filters

› Tank-integratedUREA dosing system

15 15

4) Technologies in the Automotive Group Powertrain – Business Units and Key Products


30

50

70

90

110

130

150

170

190

210

230

800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400

Gasoline Diesel Hybrids and EV

Source: DAT Group, https://www.dat.de/leitfaden/LeitfadenCO2.pdf, as of January 17, 2017.

Emissions [g CO2/km]

Weight [kg]

2015 EU Target

2020/21 EU Target

16

4) Technologies in the Automotive Group Today’s Vehicle Emissions vs. Future Targets


100

90

0

80

130

120

110

127

95

75

2013 2020 2025

[g CO2/km]

Vehicle

Combustion/Transmission

Electrification

Eco Innovations / Super Credits

Areas of Improvements:

1

1 Assumptions for CO2 target in the EU by 2025.

17

4) Technologies in the Automotive Group How to Reach the European CO2 Target of 75g/km


Thermoelectric Generator, 'Rankine'-Cycle, …

Thermal Management, Stop-Start, Predictive Energy Management, Demand-controlled Actuation, …

Combustion, Turbocharging, Hybridization, Electrification, ...

Weight, Rolling resistance, Aerodynamics, …

Powertrain 2020+

Powertrain 2020

Optimization of Overall Power Economy by Reducing Energy Consumption and Kinetic Losses

(Reduced Spending and Drag Elimination)

Transport of Energy With Minimized Losses

(Focus: Efficiency)

Demand Controlled Energy Supply

(Energy Management)

Energy Recuperation

DOWN- SIZING

18

4) Technologies in the Automotive Group Powertrain – Focus on Energy Efficiency and CO2


CO2 Savings

Opt. ICE operation2

NEDC WLTC Inter-urban

Predictive driving strategy, E-Horizon3

Urban

Standard Cycle Real Driving

Recuperation

48 V Eco Drive Potential

Total CO2 Economy (exclusive 12 V Start-Stop)

-8.6% -5.8% -5.6% -11.2%

-2.8% -2.1%

-10.1% -7.4% -10.5% -19.9%

+ additional CO2 savings with optimized ICE operation

+ additional CO2 savings with ECO Innovation CO2 Economy (in addition to hybrid functions)

1 Enhanced Start-Stop = Engine Stop < 20 km/h, incl. Bordnet Managment. 2 ICE = Internal Combustion Engine. 3 Predictive Driving = Based in Navigation Data, Calculated Values.

Enhanced S/S1

Engine-off Coasting -1.5% -1.6% -4.9% -8.7%

19

4) Technologies in the Automotive Group CO2 Savings on Continental Demo Vehicle 1.2 l Gasoline


48-Volt Eco Drive – System overview

Functions: › Start-Stop features › Recuperation of braking energy › Stabilization of board network during peak demand › Sailing and coasting features consume no fuel and cause no emissions

48V / 12V DC / DC Converter

E-Machine with integrated Inverter

› First SOP 2016/2017 › Fuel-saving functions that are found only in more expensive mild hybrids of around 120 volts › Around 20%1 less fuel consumption

1 TV magazine “auto mobil” broadcasted on VOX on November 16, 2014 at 5 PM.

› No need to interfere with the engine-transmission configuration. Technology that is feasible even for smaller cars › Low voltage means that no special safety pre- cautions are necessary

4) Technologies in the Automotive Group Powertrain – Electrification Tailored to Fit (48-Volt Eco Drive)


2020…Q4 2017

Q3 2017

Q2 2017

Q1 2017

Q4 2016

Liquid-cooled

Air-cooled

Motor A-Sample

B0 for internal test and exhibition on

Auto Shanghai

Customer sample

SOP of 12kW

Motor A-Sample

B0 for internal test

Customer sample

SOP of 25kW

Feb 2017:

Apr 2017:

Aug 2017:

Nov 2016:

Apr 2017:

Aug 2017:

SOP = Start of Production B0 = B sample

4) Technologies in the Automotive Group Powertrain – AES – 48V Roadmap in addition to 15kW already in production

21


Vehicle DynamicsHydraulicBrake Systems

Passive Safety & Sensorics

Advanced Driver Assistance Systems

› Integrated vehicle safety development, safety testing & 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

› Accelerator Force Feedback Pedal (AFFP®)

› V2X systems

› Electronic Chassis Components

› Sensors

› Camera› Surround View› Long Range Radar› Short Range Radar› High Resolution Flash

Lidar› Short Range Lidar

› ADCU

› Assisted Driving Control Unit

› Automated Driving Control Unit

› 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

› Suspension systems

› Calipers

› Drum brakes

› Brake hoses

› Boosters

› Tandem master cylinders

› Electric parking brakes

› Pedal modules

› Brake pressure regulators

› Washer systems

22

4) Technologies in the Automotive Group Chassis & Safety – Business Units and Key Products


AEB City < 50 kph

Parking Assist

Automated Parking

AEB > 60 kph

Driver Distraction

Highway Assist Stop&Go, Cruising, 0-130km/h

Construction Site (highly automated)

City Stop&Go

Highway (highly automated)

Remote parking

Construction Site Assist

2015 – 2016: • ACC

longitudinal/lateral • Traffic Jam Assistant

(highway) • Lateral Collision

Avoidance • Emergency Steering

Assistant

AEB Pedestrian

Inter-Urban

Autonomous Driving

Partially Automated (2016) – Highly Automated (2020) – Fully Automated (> 2025)

2015 2020 > 2025

AEB = Automatic Emergency Brake ACC = Adaptive Cruise Control

4) Technologies in the Automotive Group Chassis & Safety – History and roadmap for Accident-Free Driving

23


4) Technologies in the Automotive Group Interior – Business Units and Key Products

› Body control modules

› Access control systems

› Door control units

› Seat comfort systems

› Power closures

› Tire information systems

› Gateways

› Power stabilization

› LED light control units

› Intelligent antenna modules

› Smart device integration

Body & Security

› Tachographs, telematicsand services

› Visual and haptichuman-machine interface

› Chassis, body, and transmission electronics

› Wear parts, spare parts, tools, services, and multi-brand vehicle diagnostics for the independent aftermarket, as well as diagnostics and services for vehicle manufacturers

› Original equipment services

› Instrument clusters

› Display solutions

› Head-up displays

› Haptic controls

› Interior cameras

› Cockpit modules

› Radios

› Infotainment

› Connectivity & telematics

› Software & connected solutions

Commercial Vehicles & Aftermarket

Infotainment & Connectivity

Instrumentation & Driver HMI

Intelligent Transportation Systems› Commercial fleet

operations & logistics

› Emergency management

› Maintenance management

› Advanced public transportation systems

› Advanced traveler information systems

› Advanced traffic management systems

› Safety

› Traffic payment


LED light control unit

› Our products: headlamp mounted standalone control units operating adaptive front lighting functions and LED based front lighting applications. A simple LED low-beam headlight requires only 18 watts as against 35 for the xenon counterpart.

eHorizon

› Various vehicle systems know attributes of the road ahead such as slope or curve radius. The motor output or gear can be adjusted accordingly, or the climate controls uses information about an approaching downhill stretch to adjust the climate performance individually.

Filling Assistant

› The Filling Assistant specifies the exact inflation pressure of each tire with a new application that reports the tire pressure directly to a smart phone. Only at a optimum inflation pressure, the rolling resistance is low and the vehicle requires less energy when driving.

4) Technologies in the Automotive Group Interior – Products/Systems for Electrical Vehicles


Components Sensors

SystemElectronics Software Integration

Environmental Model SoftwareElectronics

1 Source: Continental estimates

Market for Automated Driving >€20 bn1 by 2020

26

4) Technologies in the Automotive Group Approaching Automated Driving:Three-Layer Model


Passenger and Light

Truck TiresOriginal

Equipment

Passenger and Light

Truck TiresReplacement

EMEA

Passenger and Light

Truck TiresReplacementThe Americas

Passenger and Light

Truck TiresReplacement

APAC

Commercial Vehicle TiresTwo Wheel

TiresTruck Tires

EMEATruck Tires

The AmericasTruck Tires

APACCommercial

Specialty Tires

Tires for:

› Compact, medium-size and full-size cars › 4x4 and SUVs› Vans, light trucks and recreational vehicles

Tires, services and solutionsfor customer segments:

› Goods› People› Construction

Tires, services and solutionsfor the applications:

› Material handling

› Agriculture› Earthmoving

Tires andtubes for:

› Bicycles: Race, Mountainbike, City/Trekking

› Motorcycles: Scooters, Big bikes >150cc, Bikes <150cc

iTire™

iTire™

iTire™

iTire™

Ext. mobility systems:› SSR› Minispares› Conti

KomfortKit› Conti

MobilityKit› ContiSeal› ContiSilentNVH enginee-ring services

Racing Tires only:

– – – Segmentation into Premium, Quality and Budget.1 Except North America, Colombia, Peru.2 Only in Australia and Taiwan.3 Trademark rights for Malaysia, Singapore and Brunei. 4 Only in Australia, China, Malaysia and Taiwan.

4

2 3

3

1

27

5) Technologies in the Rubber Group Tires – Business Units and Tire Brands


Rolling resistance

RRC = Rolling resistance coefficient (Coefficient between resistance and wheel load)

› Influences fuel consumption

› Better: Lower RRC values

Wet grip External noise

WGI = Wet grip index (% improvement in relation to reference tires)

› Braking performance on wet roads

› Better: Higher WGI values

Passenger cars Energy

efficiency class

RRC ≤ 6.5

6.6 ≤ RRC ≤ 7.7

7.8 ≤ RRC ≤ 9.0

Not assigned

9.1 ≤ RRC ≤ 10.5

10.6 ≤ RRC ≤ 12.0

RRC ≥ 12.1

RRC

Passenger cars

Wet grip class

155 ≤ WGI

140 ≤ WGI ≤ 154

125 ≤ WGI ≤ 139

Not assigned

110 ≤ WGI ≤ 124

WGI ≤ 109

Not assigned

WGI More than 3 dB(A) below the legal limit

0-3 dB(A) below the legal limit

Overshooting of the limits (no longer permissible from June 2016 onwards)

Absolute values for noise emission and classification in relation to legal limits

› External noise of a passenger car (four tires) measured at 80 km/hNo information about internal noise

5) Technologies in the Rubber Group Tires – EU Tire Label Criteria, Tests and Classes

28


Fuel saving per label class (Sample calculation with Ø consumption of 6.6 liters)

+ 0.15 l

± 0.00 l

+ 0.10 l

+ 0.12 l

+ 0.14 l

+ 0.15 l

Saving potential from class A to G, it is a total of up to 0.66 l/100 km.

Not assigned

Wet grip

Increase in braking distance compared to tires from label class A. In lower wet grip classes, the stopping distance is much longer!

Residual speed Differences in braking distance (from 80 km/h to a standstill)

Not assigned

Not assigned

25

34

42

49

5) Technologies in the Rubber Group Tires – Business Units and Tire Brands


CR

/ R

R L

abel

Standard Tires

Eco Tires

Conti.eContact

Cla

ss A

≤ 6

,5

5.3 (A+)

B

E

With reduced rolling resistance, the Conti.eContact supports to extend the range of electric cars

A

5) Technologies in the Rubber Group Tires – Conti.eContact


› Development project in collaboration with the Fraunhofer Institute to cultivate a Russian dandelion

variety with latex sap rich in natural rubber. This natural rubber has at least the same quality and performance characteristics as conventional rubber from rubber trees.

› Benefits: › Reduction in dependency on harvest situation in subtropical regions › Lower requirements on the fertility of the soil › Lower environmental impact due to reduced logistic requirements

› Joint development project with the Fraunhofer Institute awarded Europe's most important environmental and economic prize in the category "Automobility”.

› Taraxagum brand established for dandelion rubber. Serial production expected within 10 years.

31

5) Technologies in the Rubber Group Research in Alternative Raw Materials for Tire Production


Retreading Hot | Cold Casing Management

Regrooving New Continental Tires

› Acknowledgements

German Federal Ministry of Environment (BMU), Berlin

Umweltbundesamt, Berlin

KfW Bankengruppe, Bonn

Hannover Impuls GmbH, Hannover

5) Technologies in the Rubber Group Tires – ContiLifeCycle for Commercial Vehicle Tires

32


› General Information Breathing life into tires a second and even a third time is

the basic idea behind the ContiLifeCycle approach (CLC). What has worked with glass and metals for decades is now also possible for premium truck tires, with the world’s first fully integrated recycling and retreading plant in Hannover-Stöcken.

The ContiLifeCycle Plant is a combined facility for hot and cold retreading of truck tires and recycling rubber from used tires.

› Coming round again for a cleaner world. The Continental LifeCycle™ is a retreaded solid rubber

tire using only casings that pass strict quality checks. The tread is completely replaced using materials identical

to those used in the production of new tires. › Reduce the number of scrap tires › Reduce the amount of raw materials used › Energysaving › Eco-friendly

33

5) Technologies in the Rubber Group Tires – ContiLifeCycle for Commercial Vehicle Tires (2)


› End-of-life tires in the European Union1

A total of approximately 3 million tons of used tires accumulate in the EU per year. The majority of these tires are used for energy recovery in the cement industry and for material recycling (mainly downcycling). The rest is used for civil engineering, landfill and is reused or exported.

› Recycling versus raw material2

The total amount of energy for producing one kilogram of tire compound is 82 megajoule, including other factors, such as logistics. The amount of energy needed to recycle one kilogram of used rubber is only 8.7 megajoule, or roughly 11% of the energy needed for one kilogram of new compound.

42%

35%

8%

10% 5%

Civil Engineering Recycling Energy Reuse/Export Landfill

8,7

82

Recycled Material

Raw Material

MJ per KG Material

1 Source: ETRMA, 2011 2 Source: Continental Reifen Deutschland 3 Source: United States Environmental Protection Agency (EPA), September 2012 4 PLT = Passenger and Light Truck Tires; CVT = Commercial Vehicle Tires

Rubber saving2

The recycling plant’s annual material output results in the saving of 2,400 tons of rubber, which equals the annual production of roughly 1.3 million rubber trees. CO2 emissions3

By recycling 4,000 tons of used rubber in the recycling plant, an annual 8,000 tons of CO2 emissions are saved. In order to achieve this CO2 reduction by natural means, 625 hectares of pine forest (the size of 877 soccer fields) are needed.

PLT4 CVT4

5) Technologies in the Rubber Group Tires – ContiLifeCycle

34


› Challenges for the Transport Industry

Dependence of transport on fossil fuels & increasing scarcity 97 % Reduction in Greenhouse Gas (GHG) emissions of developed countries by 2050 *based on levels of 1990 80 %

Of operating costs of a long haul truck fleet are influenced by tires 45 % Direct costs for tires only make up for up to 5% of a fleet’s operating costs** 5 % **Source: Spanish Ministry of Transport | “Transport Cost Observation”, October 2010

5) Technologies in the Rubber Group Tires – ContiLifeCycle (2)


Source: Spanish Ministry of Transport | “Transport Cost Observation”, October 2010

Total costs of a transport company [%] Maintenance and repairs Fuel

6 34 5

Tires Insurances, Fees, Taxes

7

Vehicle Amortisation

12

Expenses

12

Salaries

24

› Direct tire costs only represent a total of up to 5 % of the total operating costs of a transport company.

6 34 5

Configuration: 2 x 315/80 R 22.5 HSR2 4 x 315/80 R 22.5 HDR2 6 x 315/80 R 22.5 HTR2

› Tire Cost per km (150.000 km / year)

› New Tire 3,24 cent / km

› New Tire + ContiRe 2,90 cent / km

› New Tire + ContiRe + Regrooving 2,53 cent / km

−nomical − logical Eco › Cost Saving Potential (Example)



› Development pro



Air Spring Systems

Industrial Fluid Solutions Power Transmission Group Vibration Control

Benecke-Kaliko Group Compounding Technology Conveyor Belt Group Elastomer Coatings

Mobile Fluid Systems

› Coated fabrics› Printing blankets/ -forms› Diaphragms /-materials› Gasholder diaphragms› Collapsible fuel tanks› Collapsible tanks› Concertina walls

› Industrial hoses› Fittings› Hoses for onshore &

offshore applications

› Technical and decorative surface materials for automotive interior trim

› Surface materials for decoration & protection

› Air suspensions systems for bus, trucks rail vehicle

› Air actuators for pneumatics & vibration isolation

› Compensators

› Compounds› Compound development› Testing services

› Steel cord conveyor Belts› Textile conveyor Belts› Special conveyor Belts› Conveyor belts

components› PVC light belts› Service material› Rubber tracks

› V-belts › Multiple V-ribbed belts› Timing belts› Flat belts› Belt drive systems

› Rubber-to-metal bonded products

› Hydromounts› Mount systems› Precision molded parts› Blow molded parts› Plastic parts

Hoselines in vehicles:› Exhaust & fuel systems› Powertrain› Air conditioning › Heating / cooling systems› Steering and chassis› Turbocharger

5) Technologies in the Rubber Group ContiTech – Business Units and Key Products

38


Health-friendly Interiors

Lightweight engineering

Perfect mount for wind power

Drive belts from renewable resources

Climate-friendly conveyor belts

Rubber tracks for more efficiency

› Technological expertise for customer-specific solutions made from rubber and plastic › Sustainable management with long-sighted economic, ecological and social solutions › Creating added value for our customers, human beings and the environment

Flexible insulation for energy saving

Drive System for eBikes and pedelecs

Climate-friendly printing blankets

Added value through functional integration

Source: Fact Book Fiscal Year 2014.

Printing technology for printed

electronics/solar cells

Components for engine downsizing & emissions reducing

5) Technologies in the Rubber Group Sustainable Product-Solutions for Other Industries by ContiTech

39


› Lightweight Air Springs

› Air Actuators

› Acella® Eco Natural Seating Upholstery Material (renewable raw material content of up to 50%)

› TEPEO® Foam Foil (weight advantages of up to 60% )

› Conveyor Belts Optimized in Energy Consumption (lower energy consumption up to 25 %)

› Conti® Thermo-Protect (heat losses reduction up to 80%)

› Environmental Friendly Printing Blankets (reduced energy consumption up to 70% )

› Recycling Concept for Metal Printing Blankets

› SCR-Technology (heatable high performance hoses)

› Efficient Air Conditioning Units

› CONTI® BELT IN OIL

› CONTI® UNIPOWER ECO2-FLEX

› Start-Stop Application

› Light Weight Components for Passenger and Light Truck Tires

5) Technologies in the Rubber Group ContiTech


5.97

15.

708

4.83

07.

170

6.47

16.

101

6.26

78.

187

6.89

66.

200

6.47

38.

240

7%

2%

-7%

15%

8% 7%

30%

14%

7%

2% 3%1%

Q1/

15Q

2/15

Q3/

15Q

4/15

Q1/

16Q

2/16

Q3/

16Q

4/16

Q1/

17E

Q2/

17E

Q3/

17E

Q4/

17E

China chg YOY

4.26

74.

521

4.35

04.

363

4.45

64.

601

4.40

94.

360

4.55

04.

400

4.21

04.

220

1% 2% 4% 3% 4%2% 1% 0%

2%

-4%-5%-3%

Q1/

15Q

2/15

Q3/

15Q

4/15

Q1/

16Q

2/16

Q3/

16Q

4/16

Q1/

17E

Q2/

17E

Q3/

17E

Q4/

17E

North America chg YOY

5.38

25.

408

4.77

55.

172

5.50

15.

876

4.72

05.

260

5.78

65.

602

4.85

0 5.46

0

4% 3%6% 5%

2%

9%

-1%2%

5%

-5%

3% 4%

Q1/

15Q

2/15

Q3/

15Q

4/15

Q1/

16Q

2/16

Q3/

16Q

4/16

Q1/

17E

Q2/

17E

Q3/

17E

Q4/

17E

Europe chg YOY

41

1Source: IHS and own estimates, Europe excluding Kazakhstan and Uzbekistan

2015: 20.7

2016E: 21.4

2017E: 21.7

Europe (mn units)

2015: 17.5

2016E: 17.8

2017E: 17.4

North America (mn units) 2015: 23.7

2016E: 27.0

2017E: 27.8

China (mn units)

6) Outlook 2017 PC & LT Production by Quarter in Major Regions1


23.7 23.213.6

86.9

24.1 23.414.1

90.0

Europe North America

South America

Asia

2016E 2017E

332283

63

431

337287

65

450


South America

Asia

2016E 2017E

21.4 17.8

2.8

49.9

21.717.4

2.9

51.0


South America

Asia

2016E 2017E

625 505

80

1,789

613 48081

1,861


South America

Asia

2016E 2017E

42

Commercial Vehicle2 Prod. (k units)

CV Repl.4 Tire Market (mn units)

IHS and own estimates

LMC and own estimates

IHS and own estimates

PC & LT1 Production (mn units)

LMC and own estimates

PC & LT Repl.3 Tire Market (mn units)

1 Passenger car and light truck <6t 2 Heavy vehicles >6t 3 Passenger car & light truck replacement 4 Commercial vehicle replacement (radial and biased)

6) Outlook 2017 Market Outlook for Major Regions


1 Before amortization of intangibles from PPA, consolidation (2016 in comparison to 2015) and special effects

Consolidated sales adj. EBIT1 margin

€40.5 bn €4.3 bn

Automotive Group adj. EBIT1

€24.5 bn €1.6 bn

Rubber Group adj. EBIT1

€16.1 bn €2.8 bn

Raw material cost impact

Relief of about €150 mn

2016

Special effects -€70 mn

Net interest result Tax rate

-€117 mn 28%

Capex PPA

€2.6 bn €144 mn

Free cash flow before acquisitions €2.3 bn

To increase to >€43.5 bn at constant FX rates >10.5% adj. EBIT1 margin

To increase to >€26 bn at constant FX rates ~8.5% adj. EBIT1 margin

To increase to >€17 bn at constant FX rates >15% adj. EBIT1 margin

Raw materials to burden Rubber Group with about €500 mn

2017E

About -€100 mn

~-€200 mn at constant FX rates <30%

Capex at around 6.5% of sales PPA amortization: ~€200 mn

~€2 bn

43

6) Outlook 2017 Continental Corporation


Thank you!


Disclaimer

› This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Oddo SRI Conference on June 8&9, 2017, in Paris. 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.


Contact Equity and Debt Markets Relations

Vahrenwalder Str. 9 30165 Hanover Germany e-mail: [email protected] Fax: +49 511 938 1080 www.continental-ir.com Rolf Woller Head of IR Phone: +49 511 938 1068 e-mail: [email protected] Jana Cross Assistant to the Head of IR Roadshow and Conference Organization Phone: +49 511 938 1163 e-mail: [email protected]

Michael Saemann Analysts, Institutional Investors and Sustainability Investors Phone: +49 511 938 1307 e-mail: [email protected] Klaus Paesler Analysts, Institutional Investors, ADR and Private Investors Phone: +49 511 938 1316 e-mail: [email protected] Sabine Reese Sustainability, ASM, CMD Organization, IR Website, Capital Market Disclosure Requirements Phone: +49 511 938 1027 e-mail: [email protected] Marvin Kalberlah Social Media Phone: +49 511 938 14034 e-mail: [email protected]

mailto:[email protected]

http://www.continental-ir.com/









Continental Financial Calendar 2017 Preliminary figures for fiscal 2016 January 9, 2017

Annual Financial Press Conference March 2, 2017

Annual Shareholders’ Meeting (incl. key data for Q1 2017) April 28, 2017

Q1 Financial Report May 9, 2017

Half-Year Financial Report August 3, 2017

Nine-Month Financial Report November 9, 2017

2018 Preliminary figures for fiscal 2017 January 2018

Annual Financial Press Conference March 2018

Annual Shareholders’ Meeting (incl. key data for Q1 2018) April 27, 2018

Q1 Financial Report May 2018

Half-Year Financial Report August 2018

Nine-Month Financial Report November 2018


Continental Share Data/ADR Data 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 March 31, 2017 200,005,983

ADR Data Ratio (ordinary share: ADR) 1:5

Bloomberg Ticker CTTAY

Reuters Ticker CTTAY.PK

ISIN US2107712000

ADR Level Level 1

Exchange OTC

Sponsor Deutsche Bank Trust Company Americas


Continental Bond Data

1 Guaranteed by Continental AG 2 Non-contracted rating at date of issuance 3 Fitch since October 24, 2016; S&P since May 11, 2016; Moodyʼs since June 30, 2015 4 Non-contracted rating since February 1, 2014

Issuer Continental AG Continental Rubber of America, Corp.1 Continental AG Continental AG

Issue Senior Notes Senior Notes Senior Notes Senior Notes

Principal amount €750 mn €500 mn €600 mn €750 mn

Offering price 98.950% 99.739% 99.410% 99.228%

Rating at issuance date

Ba2 (Moody’s4) BB (S&P) BB (Fitch2)

BBB (S&P) BBB (Fitch)

BBB+ (S&P) BBB+ (Fitch)

Ba1 (Moody’s4) BB (S&P) BBB (Fitch2)

Current corporation and bond ratings3

BBB+ (Fitch), BBB+ (S&P), Baa1 (Moody’s4)

Coupon 3.0% p.a. 0.5% p.a. 0.0% p.a 3.125% p.a.

Issue date July 16, 2013 November 19, 2015 December 5, 2016 September 9, 2013

Maturity July 16, 2018 February 19, 2019 February 5, 2020 September 9, 2020

Interest payment Semi annual January 16/July 16

Annual February 19, commencing on February 20, 2017

Not applicable Annual September 9

WKN A1X24V A1Z7C3 A2DARM A1X3B7

ISIN XS0953199634 DE000A1Z7C39 XS1529561182 XS0969344083

Denomination €1,000 with min. tradable amount €1,000

€1,000 with min. tradable amount €1,000




Back-up

50


7) Back-up Corporation Highlights Q1 2017

› Sales

› EBITDA

› EBIT

› NIAT3

› EPS3

› Capex

› R&D

› Cash flow

› Net debt

› PaSO

Increase of 11.7% to €10,999.9 mn (PY: €9,850.7 mn); organic sales up 9.5%

Increase of 8.8% to €1,638.5 mn (PY: €1,505.5 mn)

Increase of 9.1% to €1,135.1 mn (PY: €1,040.7 mn); Adj. EBIT1 increase to €1,165.5 mn (10.7% adj. EBIT1 margin); PPA2 effect -€41.2 mn; total special effects +€12.4 mn

Increase of 2.1% to €749.6 mn (PY: €733.9 mn)

EPS of €3.75 (PY: €3.67) EPS before PPA2 €3.90 (PY: €3.79 before PPA2)

Capex increased to €502.7 mn (PY: €397.8 mn); capex ratio 4.6% of sales; capex to depreciation coverage 1.0x (1.1x ex PPA2)

Expenses for research and development increased by 9.0% to €780.7 mn (PY: €716.1 mn); R&D ratio 7.1% of sales (PY: 7.3%)

Operating cash flow down by €106.5 mn to €864.3 mn; free cash flow at €133.0 mn

Net indebtedness down by €30.2 mn to €2,767.6 mn vs. FY 2016; Liquidity and undrawn credit lines amounted to €5,758.1 mn

Pensions and similar obligations amounted to €4,092.8 mn

1 Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA, tax rate of 28% applied for EPS calculation 3 Attributable to the shareholders of the parent


7) Back-up Overview of Volume Development

Note: Following products have been replaced in the statistics in order to better reflect current market trends. The ABS (anti-locking brake systems) and ESC (electronic stability control) are included in an electronic brake system (EBS). The sequential decline in unit sales in early 2016 is largely attributable to the change over from MK60 to MK100 brake system. Calipers have been replaced by electronic parking brake systems (EPB Systems) as the former cable puller handbrake is being replaced ever more often by an EPB. The EPB Systems integrate the caliper into the electronic parking brake. This causes a decline in classical caliper sales which is more than compensated by the increase in EPB systems. We sold more than 14 mn EPB systems in 2016.

Units (YOY change) Q1/15 H1/15 9M/15 FY 15 Q1/16 H1/16 9M/16 FY 16 Q1/17

Market data for PC and LT productionEurope 4% 3% 4% 4% 2% 5% 3% 3% 5%North America 1% 2% 3% 3% 4% 3% 2% 2% 2%Europe and North America combined 3% 3% 4% 4% 3% 4% 3% 2% 4%Worldwide 2% 1% 2% 2% 2% 3% 3% 4% 5%Continental Electronic Brake Systems (EBS) 8% 6% 5% 5% 0% 4% 6% 6% 13%Boosters -1% -4% -8% -7% -3% -3% -1% 1% 3%EPB-Systems 59% 53% 47% 48% 38% 58% 51% 48% 47%Advanced driver assistance systems (ADAS) 46% 53% 59% 58% 51% 45% 38% 36% 40%Engine electronic control units (ECUs) -1% -3% -5% -5% -2% 3% 6% 8% 12%Injectors -8% -8% -11% -11% -5% -5% 2% 7% 19%Transmissions 6% 2% 0% -1% -1% -1% 1% 1% -2%Turbochargers 59% 45% 50% 43% 23% 24% 18% 17% 45%

Market data tiresPC and LT replacement tires Europe -1% 2% 0% 0% 2% 2% 2% 2% 6%PC and LT replacement tires North America -6% 0% 1% 1% 5% 2% 2% 2% 2%

Commercial vehicle tires OE Europe 0% 4% 5% 5% 6% 5% 3% 3% 9%Commercial vehicle tires OE North America 21% 17% 12% 7% -12% -9% -16% -13% -8%Commercial vehicle replacement tires Europe -4% 2% -1% 0% 2% 3% 3% 3% 11%Commercial vehicle replacement tires North America 3% 5% 3% 3% 4% 3% 3% 2% 12%ContinentalPC and LT tires -1% 3% 2% 5% 9% 8% 6% 6% 5%Commercial vehicle tires -3% 0% 3% 5% 7% 8% 4% 4% 15%ContiTech organic sales growth 2% 4% 4% 4% 3% 2% 2% 2% 8%


7) Back-up Key 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 at-equity accounted and other investments, including impairment and reversal of impairment losses, gains / losses from the disposal of assets, companies and business operations, other non-cash 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 2013 2014 2015 2016 LTM 2017Statement of Cash FlowsAdjusted EBITDA2 5,094 5,318 6,094 6,125 6,237Reported EBITDA 5,095 5,134 6,001 6,057 6,190Net cash interest paid -534 -158 -174 -112 -112Tax paid -805 -775 -1,015 -1,047 -1,090Change in net working capital3 -4 -207 -107 -210 -396Other4 -30 175 210 250 239Cash flow arising from operating activities 3,722 4,168 4,916 4,938 4,832Cash flow arising from investing activities -1,904 -2,153 -3,472 -3,167 -3,416 - thereof capex in PPE and intangibles -2,024 -2,110 -2,265 -2,708 -2,833Cash flow before financing activities 1,818 2,015 1,444 1,771 1,415Statement of Financial PositionCash and cash equivalents 2,045 3,244 1,622 2,107 1,896Derivative instruments and interest-bearing investments 303 364 81 48 59Total indebtedness 6,638 6,432 5,245 4,952 4,723Net indebtedness 4,289 2,824 3,542 2,798 2,768Credit RatiosNet indebtedness / adjusted EBITDA2 0.8x 0.5x 0.6x 0.5x 0.4xNet cash interest paid coverage (Ratio)5 9.5x 33.7x 35.1x 54.8x 55.8x


357398

503

393431

462

32 34 41

2015 2016 2017

Capex (PPE), percentage of salesDepreciation, w/o PPAPPA

3.7%4.0%

4.6%3.75

0.15 3.90

EPS reported PPA after tax per share

EPS excl. PPA

54

7) Back-up Capex, Depreciation and EPS Breakdown Q1 2017 Capex, Depreciation and PPA1 (mn €) EPS ex PPA1,2 (€)

1 Amortization of intangibles from PPA 2 Assuming corporate tax rate of 28%

1

1

1 1,2

2


2,136.0 2,201.8

2,497.4

13.9% 13.8% 13.5%

9.7% 9.6%

2015 2016 2017

Sales (mn €) EBITDA margin Adj. EBIT margin› Sales increased by 12.5% before

consolidation and FX effects

› EBITDA increased by €34.1 mn to €336.9 mn (+11.3%)

› Adj. EBIT1 increased by €25.6 mn to €238.9 mn (adj. EBIT1 margin 9.6%)

› EBIT increased by €25.7 mn to €238.9 mn (EBIT margin 9.6%)

› No PPA effect in Q1 2017

› No special effects in Q1 2017

55

7) Back-up Automotive Group Financials – Chassis & Safety

1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

Chassis & Safety Q1 2017 1


1,826.5 1,813.52,003.1

9.7% 8.8%10.7%

4.0%6.3%

2015 2016 2017

Sales (mn €) EBITDA margin Adj. EBIT margin

56

7) Back-up Automotive Group Financials – Powertrain

Powertrain Q1 2017 1 › Sales increased by 9.5% before



› Adj. EBIT1 increased by €52.6 mn to €124.7 mn (adj. EBIT1 margin 6.3%)


› PPA effect in Q1 2017: -€3.0 mn

› Special effects in Q1 2017: -€1.0 mn



1,975.2 2,023.0

2,293.9

12.8% 11.7% 11.9%

8.4% 8.9%

2015 2016 2017




› Adj. EBIT1 increased by 33.8 mn to €202.9 mn (adj. EBIT1 margin 8.9%)



› No Special effects in Q1 2017

57

7) Back-up Automotive Group Financials – Interior

Interior Q1 2017 1



2,419.8 2,512.7

2,756.3

24.0%26.2%

23.6%

21.2%

17.9%

2015 2016 2017



› EBITDA decreased by €6.8 mn to €651.3 mn (-1.0%)

› Adj. EBIT1 decreased by €45.7 mn to €486.2 mn (adj. EBIT1 margin 17.9%)

› EBIT decreased by €24.9 mn to €505.1 mn (EBIT margin 18.3%)


› Special effects in Q1 2017: +€13.5 mn

58

7) Back-up Rubber Group Financials – Tires

Tires Q1 2017 1



-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Jan-

11M

ay-1

1S

ep-1

1Ja

n-12

May

-12

Sep

-12

Jan-

13M

ay-1

3S

ep-1

3Ja

n-14

May

-14

Sep

-14

Jan-

15M

ay-1

5S

ep-1

5Ja

n-16

May

-16

Sep

-16

Jan-

17M

ay-1

7

PC & LT Tire Replacement (YOY chg. monthly)

Vehicle miles YOY chg. monthly (DOT)

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Jan-

11M

ay-1

1S

ep-1

1Ja

n-12

May

-12

Sep

-12

Jan-

13M

ay-1

3S

ep-1

3Ja

n-14

May

-14

Sep

-14

Jan-

15M

ay-1

5S

ep-1

5Ja

n-16

May

-16

Sep

-16

Jan-

17M

ay-1

7

PC & LT Tire Replacement (YOY chg. monthly)

59

7) Back-up Tires – Passenger and Light Truck Tire Demand

Replacement Tire Demand Development for PC & LT Europe

Replacement Tire Demand Development for PC & LT North America

1 U.S. Department of Transportation

1


-30%

-20%

-10%

0%

10%

20%

30%

Jan-

11M

ay-1

1S

ep-1

1Ja

n-12

May

-12

Sep

-12

Jan-

13M

ay-1

3S

ep-1

3Ja

n-14

May

-14

Sep

-14

Jan-

15M

ay-1

5S

ep-1

5Ja

n-16

May

-16

Sep

-16

Jan-

17M

ay-1

7

Truck tire replacement (YOY chg. monthly)

ATA monthly (adj.) YOY

-30%

-20%

-10%

0%

10%

20%

30%

Jan-

11M

ay-1

1S

ep-1

1Ja

n-12

May

-12

Sep

-12

Jan -

13M

ay-1

3S

ep-1

3Ja

n-14

May

-14

Sep

-14

Jan-

15M

ay-1

5S

ep-1

5Ja

n-16

May

-16

Sep

-16

Jan-

17M

ay-1

7

Truck tire replacement (YOY chg. monthly)

km BAG monthly (adj.)

60

7) Back-up Tires – Commercial Vehicle Tire Demand

1 BAG = Bundesamt für Güterverkehr 2 ATA = American Trucking Association (miles traveled)

Replacement Tire Demand Development for Truck Tires Europe

Replacement Tire Demand Development for Truck Tires North America

2 1


1,268.31,359.1

1,521.4

10.2%13.0% 12.6%

9.6% 9.6%

2015 2016 2017


consolidation and FX effects › EBITDA increased by €15.2 mn to

€191.3 mn (+8.6%) › Adj. EBIT1 increased by €10.6 mn to

141.6 mn (adj. EBIT1 margin 9.6%) › EBIT increased by €18.4 mn to

€117.1 mn (EBIT margin 7.7%) › PPA effect in Q1 2017: -€21.8 mn › Special effects in Q1 2017: -€0.1 mn

61

7) Back-up Rubber Group Financials – ContiTech

ContiTech Q1 2017 1



Fact Sheets 2015 – Q1 2017


7) Fact Sheets Sales by Quarter

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year

Chassis & Safety 2,136.0 2,142.1 1,999.0 2,172.6 8,449.7 2,201.8 2,246.2 2,176.8 2,352.8 8,977.6 2,497.4

Powertrain 1,826.5 1,819.8 1,657.4 1,764.8 7,068.5 1,813.5 1,841.5 1,775.4 1,889.1 7,319.5 2,003.1

Interior 1,975.2 2,057.0 2,028.2 2,094.4 8,154.8 2,023.0 2,099.8 2,041.2 2,160.7 8,324.7 2,293.9

Tires 2,419.8 2,644.4 2,654.4 2,690.2 10,408.8 2,512.7 2,692.7 2,708.7 2,803.3 10,717.4 2,756.3

ContiTech 1,268.3 1,418.8 1,330.8 1,349.9 5,367.8 1,359.1 1,376.6 1,350.5 1,376.3 5,462.5 1,521.4

Other / Consolidation -56.9 -52.4 -52.2 -56.1 -217.6 -59.4 -65.8 -68.8 -58.2 -252.2 -72.2

Continental Corporation 9,568.9 10,029.7 9,617.6 10,015.8 39,232.0 9,850.7 10,191.0 9,983.8 10,524.0 40,549.5 10,999.9

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year

Chassis & Safety 3.1 4.9 8.9 8.3 6.2 13.4

Powertrain -0.7 1.2 7.1 7.0 3.6 10.5

Interior 2.4 2.1 0.6 3.2 2.1 13.4

Tires 3.8 1.8 2.0 4.2 3.0 9.7

ContiTech 7.2 -3.0 1.5 2.0 1.8 11.9

Continental Corporation 2.9 1.6 3.8 5.1 3.4 11.7

Sales (mn €)2015 2016 2017

Changes Y-o-Y in %2016 2017


7) Fact Sheets EBITDA by Quarter

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 297.3 293.4 268.3 301.3 1,160.3 302.8 312.0 -14.4 354.2 954.6 336.9Powertrain 177.2 183.5 167.3 202.7 730.7 158.8 201.8 175.5 220.1 756.2 213.9Interior 252.9 299.8 252.4 277.1 1,082.2 237.4 252.2 132.5 282.1 904.2 273.6Tires 579.7 734.6 667.7 622.3 2,604.3 658.1 773.4 658.0 739.2 2,828.7 651.3ContiTech 129.2 169.1 159.7 119.2 577.2 176.1 197.2 163.5 194.1 730.9 191.3Other / Consolidation -33.1 -47.1 -23.7 -49.4 -153.3 -27.7 -23.5 -37.7 -28.3 -117.2 -28.5Continental Corporation 1,403.2 1,633.3 1,491.7 1,473.2 6,001.4 1,505.5 1,713.1 1,077.4 1,761.4 6,057.4 1,638.5

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 13.9 13.7 13.4 13.9 13.7 13.8 13.9 -0.7 15.1 10.6 13.5Powertrain 9.7 10.1 10.1 11.5 10.3 8.8 11.0 9.9 11.7 10.3 10.7Interior 12.8 14.6 12.4 13.2 13.3 11.7 12.0 6.5 13.1 10.9 11.9Tires 24.0 27.8 25.2 23.1 25.0 26.2 28.7 24.3 26.4 26.4 23.6ContiTech 10.2 11.9 12.0 8.8 10.8 13.0 14.3 12.1 14.1 13.4 12.6Continental Corporation 14.7 16.3 15.5 14.7 15.3 15.3 16.8 10.8 16.7 14.9 14.9

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 1.8 6.3 -105.4 17.6 -17.7 11.3Powertrain -10.4 10.0 4.9 8.6 3.5 34.7Interior -6.1 -15.9 -47.5 1.8 -16.4 15.2Tires 13.5 5.3 -1.5 18.8 8.6 -1.0ContiTech 36.3 16.6 2.4 62.8 26.6 8.6Continental Corporation 7.3 4.9 -27.8 19.6 0.9 8.8

EBITDA (mn €)2015 2016 2017

EBITDA margin in %2015 2016 2017



7) Fact Sheets EBIT by Quarter

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 214.9 209.3 181.5 208.6 814.3 213.2 220.3 -107.4 254.7 580.8 238.9Powertrain 96.7 101.0 81.3 116.6 395.6 66.5 108.8 80.3 122.4 378.0 117.1Interior 190.9 234.1 178.7 200.8 804.5 160.1 172.9 51.3 183.5 567.8 185.7Tires 454.0 604.1 536.5 490.6 2,085.2 530.0 645.4 522.3 591.7 2,289.4 505.1ContiTech 54.9 82.3 80.6 -47.2 170.6 98.7 126.7 88.0 85.8 399.2 117.1Other / Consolidation -33.5 -47.5 -24.0 -49.6 -154.6 -27.8 -24.5 -38.2 -28.9 -119.4 -28.8Continental Corporation 977.9 1,183.3 1,034.6 919.8 4,115.6 1,040.7 1,249.6 596.3 1,209.2 4,095.8 1,135.1

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 10.1 9.8 9.1 9.6 9.6 9.7 9.8 -4.9 10.8 6.5 9.6Powertrain 5.3 5.6 4.9 6.6 5.6 3.7 5.9 4.5 6.5 5.2 5.8Interior 9.7 11.4 8.8 9.6 9.9 7.9 8.2 2.5 8.5 6.8 8.1Tires 18.8 22.8 20.2 18.2 20.0 21.1 24.0 19.3 21.1 21.4 18.3ContiTech 4.3 5.8 6.1 -3.5 3.2 7.3 9.2 6.5 6.2 7.3 7.7Continental Corporation 10.2 11.8 10.8 9.2 10.5 10.6 12.3 6.0 11.5 10.1 10.3

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety -0.8 5.3 -159.2 22.1 -28.7 12.1Powertrain -31.2 7.7 -1.2 5.0 -4.4 76.1Interior -16.1 -26.1 -71.3 -8.6 -29.4 16.0Tires 16.7 6.8 -2.6 20.6 9.8 -4.7ContiTech 79.8 53.9 9.2 281.8 134.0 18.6Continental Corporation 6.4 5.6 -42.4 31.5 -0.5 9.1

EBIT margin in %2015 2016 2017


EBIT (mn €)2015 2016 2017


7) Fact Sheets Adjusted EBIT1 by Quarter

1 Before amortization of intangibles from PPA, consolidation and special effects

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 213.3 238.9Powertrain 72.1 124.7Interior 169.1 202.9Tires 531.9 486.2ContiTech 131.0 141.6Other / Consolidation -27.8 -28.8Continental Corporation 1,089.6 1,165.5

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 YearChassis & Safety 9.7 9.6Powertrain 4.0 6.3Interior 8.4 8.9Tires 21.2 17.9ContiTech 9.6 9.6Continental Corporation 11.1 10.7

Q1 Q2 Q3 Q4 YearChassis & Safety 12.0Powertrain 73.0Interior 20.0Tires -8.6ContiTech 8.1Continental Corporation 7.0

Adj. EBIT ¹ (mn €)2016 2017

Adj. EBIT ¹ margin in %2016 2017

Changes Y-o-Y in %2017


7) Fact Sheets Consolidated Statement of Income

2017 2016 2015Q1 Q1 Q1

Sales 10,999.9 9,850.7 9,568.9

Cost of sales -8,135.2 -7,249.6 -7,146.1

Gross margin on sales 2,864.7 2,601.1 2,422.8

Research and development expenses -780.7 -716.1 -643.0

Selling and logistics expenses -600.5 -548.0 -520.9

Administrative expenses -297.8 -243.7 -214.5

Other expenses and income -64.4 -69.0 -77.7

Income from at-equity accounted investees 13.8 16.4 11.2

Other income from investments - - 0.0

Earnings before interest and tax 1,135.1 1,040.7 977.9

Interest income 23.4 24.8 27.8

Interest expense -107.0 -58.6 -83.5

Net interest result -83.6 -33.8 -55.7

Earnings before tax 1,051.5 1,006.9 922.2

Income tax expense -287.0 -255.8 -244.4

Net income 764.5 751.1 677.8

Non-controlling interests -14.9 -17.2 -21.1

Net income attributable to the shareholders of the parent 749.6 733.9 656.7

Basic earnings per share (in €) 3.75 3.67 3.28

Diluted earnings per share (in €) 3.75 3.67 3.28

(mn €)


7) Fact Sheets Consolidated Statement of Financial Position – Assets

Assets in € millions March 31, 2017 Dec. 31, 2016 March 31, 2016

Goodwill 6,977.1 6,857.3 6,600.9

Other intangible assets 1,620.5 1,514.1 1,298.7

Property, plant and equipment 10,766.8 10,538.1 9,434.9

Investment property 10.3 10.3 15.8

Investments in equity-accounted investees 382.8 384.8 354.6

Other investments 44.0 43.1 39.7

Deferred tax assets 1,819.5 1,836.1 1,815.0

Defined benefit assets 36.8 24.3 16.7

Long-term derivative instruments and interest-bearing investments 17.3 19.7 31.5

Long-term other financial assets 68.0 66.4 49.4

Long-term other assets 27.1 26.8 22.8

Non-current assets 21,770.2 21,321.0 19,680.0

Inventories 4,116.5 3,753.2 3,523.0

Trade accounts receivable 8,351.9 7,392.7 7,185.1

Short-term other financial assets 484.6 455.5 465.0

Short-term other assets 1,103.1 989.0 837.5

Income tax receivables 145.8 124.7 141.8

Short-term derivative instruments and interest-bearing investments 42.0 27.8 69.4

Cash and cash equivalents 1,895.7 2,107.0 1,693.8

Assets held for sale 2.0 4.0 10.3

Current assets 16,141.6 14,853.9 13,925.9

Total assets 37,911.8 36,174.9 33,605.9


7) Fact Sheets Consolidated Statement of Financial Position – Total Equity and Liabilities

Equity and Liabilities in € millions March 31, 2017 Dec. 31, 2016 March 31, 2016

Subscribed capital 512.0 512.0 512.0

Capital reserves 4,155.6 4,155.6 4,155.6

Retained earnings 12,284.3 11,534.7 10,215.8

Other comprehensive income -1,700.6 -1,932.3 -1,940.2

Equity attributable to the shareholders of the parent 15,251.3 14,270.0 12,943.2

Non-controlling interests 471.1 464.8 418.7

Total equity 15,722.4 14,734.8 13,361.9

Long-term employee benefits 4,356.1 4,392.3 4,306.4

Deferred tax liabilities 444.7 371.5 367.6

Long-term provisions for other risks and obligations 205.5 204.2 179.0

Long-term indebtedness 2,783.2 2,803.7 2,418.8

Long-term other financial liabilities 106.2 97.1 45.7

Long-term other liabilities 16.0 17.1 20.7

Non-current liabilities 7,911.7 7,885.9 7,338.2

Short-term employee benefits 1,596.1 1,314.1 1,484.2

Trade accounts payable 6,760.1 6,248.0 5,707.3

Income tax payables 829.0 783.6 736.9

Short-term provisions for other risks and obligations 1,198.2 1,146.4 793.4

Short-term indebtedness 1,939.4 2,148.6 2,459.2

Short-term other financial liabilities 1,111.0 1,187.3 1,017.5

Short-term other liabilities 843.9 726.2 706.8

Liabilities held for sale — — 0.5

Current liabilities 14,277.7 13,554.2 12,905.8

Total equity and liabilities 37,911.8 36,174.9 33,605.9


7) Fact Sheets Consolidated Statement of Cash Flows

1

In € millions 2017 2016Net income 764.5 751.1Income tax expense 287.0 255.8Net interest result 83.6 33.8EBIT 1,135.1 1,040.7Interest paid -47.6 -46.4Interest received 6.8 5.4Income tax paid -260.3 -217.4Dividends received 10.2 15.0Depreciation, amortization, impairment and reversal of impairment losses 503.4 464.8Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses -13.8 -16.4Gains/losses from the disposal of assets, companies and business operations -18.1 -1.3Changes in

inventories -248.6 -199.5trade accounts receivable -879.5 -575.3trade accounts payable 448.4 281.3employee benefits and other provisions 338.5 241.2other assets and liabilities -110.2 -21.3

Cash flow arising from operating activities 864.3 970.8

Cash flow from the disposal of property, plant and equipment, and intangible assets 13.4 4.2Capital expenditure on property, plant and equipment, and software -502.7 -397.8Capital expenditure on intangible assets from development projects and miscellaneous -30.3 -10.5Cash flow from the disposal of companies and business operations 19.1 —Acquisition of companies and business operations -230.8 -77.7Cash flow arising from investing activities -731.3 -481.8

Cash flow before financing activities (free cash flow) 133.0 489.0Change in indebtedness -361.7 -380.0Successive purchases -0.6 -2.2Dividends paid to and cash changes from equity transactions with non-controlling interests -0.4 -0.7Cash and cash equivalents arising from first-time consolidation of subsidiaries 0.6 0.6Cash flow arising from financing activities -362.1 -382.3

Change in cash and cash equivalents -229.1 106.7Cash and cash equivalents at the beginning of the reporting period 2,107.0 1,621.5Effect of exchange-rate changes on cash and cash equivalents 17.8 -34.4Cash and cash equivalents at the end of the reporting period 1,895.7 1,693.8

January 1 to March 31


7) Fact Sheets Q1 2017 Results Reported and Adjusted (mn €) – by Division


2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017

Sales 2,201.8 2,497.4 1,813.5 2,003.1 2,023.0 2,293.9 2,512.7 2,756.3 1,359.1 1,521.4 -59.4 -72.2 9,850.7 10,999.9

EBIT 213.2 238.9 66.5 117.1 160.1 185.7 530.0 505.1 98.7 117.1 -27.8 -28.8 1,040.7 1,135.1in % of sales 9.7% 9.6% 3.7% 5.8% 7.9% 8.1% 21.1% 18.3% 7.3% 7.7% 10.6% 10.3%

Amortization of intangible assets from PPA 0.1 0.0 2.1 3.0 9.0 11.6 1.9 4.8 20.9 21.8 0.0 0.0 34.0 41.2

Total special effects 0.0 0.0 3.5 1.0 0.0 0.0 0.0 -13.5 11.4 0.1 0.0 0.0 14.9 -12.4

Total consolidation effects 0.0 0.0 0.0 3.6 0.0 5.6 0.0 -10.2 0.0 2.6 0.0 0.0 0.0 1.6

Total consolidation & special effects 0.0 0.0 3.5 4.6 0.0 5.6 0.0 -23.7 11.4 2.7 0.0 0.0 14.9 -10.8

Adjusted operating result (adj. EBIT) 1 213.3 238.9 72.1 124.7 169.1 202.9 531.9 486.2 131.0 141.6 -27.8 -28.8 1,089.6 1,165.5in % of adjusted sales 9.7% 9.6% 4.0% 6.3% 8.4% 8.9% 21.2% 17.9% 9.6% 9.6% 11.1% 10.7%

Interior CorporationChassis & Safety Powertrain Tires ContiTech Cons./Corr.


7) Fact Sheets Q1 2017 Results Reported and Adjusted (mn €) – by Group


2016 2017 2016 2017 2016 2017 2016 2017

Sales 6,011.0 6,754.0 3,851.7 4,260.4 -12.0 -14.5 9,850.7 10,999.9

EBIT 439.8 541.7 628.7 622.2 -27.8 -28.8 1,040.7 1,135.1in % of sales 7.3% 8.0% 16.3% 14.6% 10.6% 10.3%

Amortization of intangible assets from PPA 11.2 14.6 22.8 26.6 0.0 0.0 34.0 41.2

Total special effects 3.5 1.0 11.4 -13.4 0.0 0.0 14.9 -12.4

Total consolidation effects 0.0 9.2 0.0 -7.6 0.0 0.0 0.0 1.6

Total consolidation & special effects 3.5 10.2 11.4 -21.0 0.0 0.0 14.9 -10.8

Adjusted operating result (adj. EBIT) 1 454.5 566.5 662.9 627.8 -27.8 -28.8 1,089.6 1,165.5in % of adjusted sales 7.6% 8.4% 17.2% 15.1% 11.1% 10.7%

Automotive Rubber Cons./Corr. Corporation


7) Fact Sheets 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

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

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

Non

-Inve

stm

ent

Gra

de

Inve

stm

ent

Gra

de


References Useful Links

Continental Investor Relations website www.continental-ir.com

Annual and interim reports www.continental-corporation.com/en/investors/reports

2016 Fact Book www.continental-corporation.com/en/investors/reports

Investor Relations events and presentations

www.continental-corporation.com/en/investors/events/presentations

Sustainability at Continental (presentation and fact sheet for investors)

www.continental-corporation.com/en/investors/about-us/presentation-sustainability-at-continental-23118

Corporate Social Responsibility www.continental-sustainability.com

Corporate Governance Principles www.continental-corporation.com/en/company/corporate-governance/principles-and-declarations

Continental share www.continental-corporation.com/en/investors/share

Continental bonds and rating www.continental-corporation.com/en/investors/debt-and-rating

Continental App for iPad www.continental-corporation.com/en/investors/continental-ir-app-for-ipad-15434

https://www.continental-ir.com/

paris – june 9, 2017 - continental usa...sustainability presentation – june 9, 2017 oddo bhf -...

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