Preliminary Results for FY 2017 Hanover March 8, 2018

Transcription

1 Preliminary Results for FY 2017 Hanover March 8, 2018 Ticker: CON ADR-Ticker: CTTAY Wolfgang Schaefer CFO

2 Agenda 1 Corporation Highlights 3 2 Automotive Group 12 3 Rubber Group 17 4 Indebtedness and Cash Flow 22 5 Outlook Medium-Term Outlook 29 Back-up and Fact Sheets 37 2

3 1) Corporation Highlights Most Important KPIs for FY 2017 Sales up by 8.5% to 44.0 bn; organic sales growth at 8.1%; FX negative at 435 mn Adj. EBIT 1 up by 10.1% to 4.7 bn; adj. EBIT 1 margin at 10.9% (PPA mn and special effects - 14 mn) NIAT 3 amounted to 3.0 bn, up by 6.5% Free cash flow amounted to 1.8 bn including 596 mn cash outflow for acquisitions (mainly Hornschuch and Argus); free cash flow before acquisitions amounted to 2.3 bn Gearing ratio down to 13%; equity ratio up to 44% Value creation: trailing ROCE 4 up slightly to 20.6% Other topics: Order intake: lifetime sales in the Automotive Group increased to almost 40 bn Dividend to increase by 0.25 to for FY Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA 3 Attributable to the shareholders of the parent 4 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM 5 Subject to approval of the Annual Shareholders Meeting (ASM) on April 27,

4 1) Corporation Highlights Divisional Highlights for FY 2017 Automotive Group Automotive Group: Organic sales increased by 9.3%, exceeding worldwide car production by 7%-points; adj. EBIT 1 margin increased by 180 bps to 8.4% (PY: 6.6%); Order intake in the Automotive Group increased to almost 40 bn Chassis & Safety: 9.2% adj. EBIT 1 margin (PY: 6.5%); organic sales up by 10.4%; ADAS unit sales up by 41% Powertrain: 6.2% adj. EBIT 1 margin (PY: 5.4%); organic sales up by 5.6%; adj. EBIT 1 margin before HEV at >9% Interior: 9.2% adj. EBIT 1 margin (PY: 7.6%); organic sales increased by 11.6% driven by strong demand for displays as well as body and security electronics Rubber Group Rubber Group: Organic sales up by 6.3% and adj. EBIT 1 margin down to 15.6% (PY: 17.5%), negatively impacted by more than 450 mn from rise in raw material costs Tires: Adj. EBIT 1 margin down to 19.0% (PY: 21.4%), mainly impacted by higher raw material costs; solid price mix 2%; volumes were up by 3%; FX impacted tire sales negatively by 1%; organic sales up by 5.3% Tire markets: PC & LT tire replacement demand in Europe and North America combined was up by 2% ContiTech: Adj. EBIT 1 margin decreased by 70 bps to 8.8% (PY: 9.5%), negatively impacted by rising raw material costs; organic sales up by 8.1% 1 Before amortization of intangibles from PPA, consolidation and special effects 4

5 1) Corporation Highlights Sales and Adjusted EBIT 1 by Quarter 9,569 FY Sales 39,232 mn 10,030 9,618 10,016 9,851 FY Sales 40,549 mn Adj. EBIT 1 4,310 mn 10,191 9,984 10,524 FY Sales 44,009 mn Adj. EBIT 1 4,747 mn 11,000 11,033 10,693 11,284 1,090 1,292 1,284 1,166 1,163 1,090 1, Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 1 Before amortization of intangibles from PPA, consolidation and special effects Sales ( mn) Adj. EBIT ( mn) 1 5

6 1) Corporation Highlights Automotive Group and Rubber Group by Quarter Automotive Group Rubber Group 5,912 5,996 5,661 6,005 6,011 6,158 5,958 6,370 6,754 6,661 6,344 6,806 3,669 4,045 3,968 4,022 3,852 4,045 4,038 4,164 4,260 4,382 4,361 4, Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Sales ( mn) Adj. EBIT ( mn) 1 Sales ( mn) Adj. EBIT 1 ( mn) 1 Before amortization of intangibles from PPA, consolidation and special effects 6

7 1) Corporation Highlights Growth Profile of the Corporation FY 2017 Automotive Group organic sales growth PC & LT production growth, global PC & LT production growth Europe and North America Passenger & Light Truck tires volume growth Replacement tire volume growth Europe Replacement tire volume growth North America 0% 2% 3% 3% 0% 9% Conti Market Conti Market ContiTech organic sales growth PC & LT production growth Europe GDP growth advanced 1 economies According to IMF definition (WEO Update January 2018) Commercial Vehicle Tires volume growth Replacement tire volume growth Europe Replacement tire volume growth North America 3% 2.5% 5% 4% 4% 8% 7

8 1) Corporation Highlights Adjusted EBIT 1 Bridge ( mn) ,747 4,562 C&S 0.0 mn Powertrain 11.9 mn Interior 46.1 mn C&S Powertrain 3.6 mn Interior 39.5 mn Tires mn ContiTech mn C&S 0.5 mn Powertrain 18.8 mn Interior 23.0 mn Tires 0.5 mn ContiTech 2.4 mn C&S mn Powertrain mn Interior mn Tires mn ContiTech mn C&S Powertrain Interior mn Tires mn ContiTech 1.6 mn Tires 19.5 mn ContiTech 93.2 mn Reported EBIT 2017 PPA Consolidation effects 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA 3 Including asset impairment and necessary reversal of impairment losses amounting to 5.0 mn Asset impairment (net) Restructuring costs Other special effects Adj. EBIT

9 1) Corporation Highlights Sustainable Value Creation 19.5% 20.3% 21.6% 20.9% 21.1% 21.2% 18.9% 20.0% 20.0% 19.0% 20.6% 20.6% 17,510 18,198 18,910 19,681 19,767 19,983 20,106 20,453 20,978 21,401 21,886 22,172 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Trailing OA ( mn) 1 Trailing operating assets are calculated as assets for the last twelve months (LTM) 2 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by trailing operating assets 1 2 Trailing ROCE 9

10 1) Corporation Highlights Maturities for Bonds 1 ( mn) As at December 31, 2017 ( mn) FY 16 FY 17 Gross indebtedness 4,952 4,090 Cash 2,107 1,882 Net indebtedness 2,798 2,048 Available credit lines 3,888 3,687 Total liquidity 5,995 5, , Bonds 1 All amounts shown are nominal values 10

11 1) Corporation Highlights Earnings and Dividend per Share; Payout Ratio % % 27.4% 27.5% 30.3% 30.2% Dividend per share 2( ) Earnings per share ( ) Payout ratio 1 Dividend for FY 2017 subject to approval of the Annual Shareholders Meeting (ASM) on April 27, Dividend paid for the respective fiscal year, payout in the subsequent year 11

12 2) Automotive Group Sales and Adjusted EBIT 1 by Division Automotive Group Sales ( mn) FY 2017 Automotive Group Adj. EBIT 1 ( mn) FY ,305 26, % % 851 2, % 0 8.4% 7, , % % 10.4% 9.2% Chassis & Safety Organic sales growth (%) Powertrain Interior cons. Automotive Group Reported sales change Chassis & Safety: 8.8% Powertrain: 4.7% Interior: 11.8% Automotive Group: 8.4% Chassis & Safety Adj. EBIT 1 margin (%) Powertrain Interior cons. Automotive Group Reported EBITDA: 3,296 mn (12.4% of sales) Reported EBIT: 2,087 mn (7.9% of sales) R&D (net): 2,676 mn (10.1% of sales) Capex: 1,790 mn (6.7% of sales) 1 Before amortization of intangibles from PPA, consolidation and special effects 12

13 2) Automotive Group Q4 2017: Sales and Profits up in Q4 as Forecast Automotive Group Sales ( mn) Automotive Group Adj. EBIT 1 ( mn) 6,370 6,754 6,661 6,344 6, % 8.9% Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Sales increased by 436 mn; organic sales growth in Q at 10.1% Adj. EBIT 1 increased by 4 mn; operating leverage 2 amounted to 1% 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Operating leverage is defined as delta adj. EBIT 1 divided by delta adjusted sales Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Adj. EBIT 1 margin at 8.9% (PY: 9.5%) mainly due to higher R&D (net) costs which increased by 22% in Q

14 2) Automotive Group Outperformance by 7%-Points in 2017 Growth of organic sales vs. PC & LT 1 production Organic sales growth by division 0% 1% 2% 4% 4% 11% 6% 7% 9% 10% 13% 8% 10% 12% 10% 5% 12% 8% 12% 14% Q1/17 Q2/17 Q3/17 Q4/17 Automotive Group PC & LT prod. growth ww 1 Passenger car and light truck <6t Q1/17 Q2/17 Q3/17 Q4/17 Q1/17 Q2/17 Q3/17 Q4/17 Q1/17 Q2/17 Q3/17 Q4/17 Chassis & Safety Powertrain Interior 14

15 2) Automotive Group Order Intake (LTS 1 ) in the Automotive Group of Almost 40 bn in 2017 Chassis & Safety ADAS order intake at ~ 3.5 bn 2 VED book-to-bill at 1.6x mainly on new MK 100 and MK C1 More than 35% of the order intake was acquired outside of Europe and North America Powertrain Engine Systems book-to-bill ratio at 1.4x Sensors & Actuators book-to-bill ratio at 1.7x Nearly all business units recorded an order intake above prior year level Interior Overall solid order backlog with book-to-bill in IC and CVAM running at >1.7x New orders acquired in ITS 38% of order intake was acquired in Asia LTS ( bn) 1 LTS = Life Time Sales 2 Includes ADAS related CVAM business order intake Book-to-bill LTS ( bn) Book-to-bill LTS ( bn) Book-to-bill 15

16 2) Automotive Group Order Intake Well Balanced Sales by market 2017 Order intake by market 2017 Asia 27% Other 2% Europe 47% Asia 40% Other 1% 26.6 bn 39.8 bn North America 24% North America 15% Europe 44% 16

17 3) Rubber Group Profitability Impacted by Rise in Raw Material Costs Rubber Group Sales ( mn) FY 2017 Rubber Group Adj. EBIT 1 ( mn) FY ,326-17, % 6.3% 2,128 2, % 15.6% 6, % Organic sales growth (%) % 1 Adj. EBIT margin (%) ContiTech Tires cons. Rubber Group Reported sales change ContiTech: 14.4% Tires: 5.7% Rubber Group: 8.7% ContiTech Tires cons. Rubber Group Reported EBITDA: 3,500 mn (20.0% of sales) Reported EBIT: 2,594 mn (14.8% of sales) R&D (net): 428 mn (2.4% of sales) Capex: 1,060 mn (6.1% of sales) 1 Before amortization of intangibles from PPA, consolidation and special effects 17

18 3) Rubber Group Q Returning Back to 2016 Levels Rubber Group Sales ( mn) 4,164 4,260 4,382 4,361 4,491 Rubber Group Adj. EBIT 1 ( mn) % 17.0% Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Sales increased by 328 mn; organic sales growth in Q at 8.8% Adj. EBIT 1 increased by 35 mn Adj. EBIT 1 margin at 17.0% (PY: 17.1%) 1 Before amortization of intangibles from PPA, consolidation and special effects 18

19 3) Rubber Group Strong Volume Growth in Tires Throughout 2017 PC & LT 1 tire market growth vs. Continental Truck tire market growth vs. Continental Q1/17 Q2/17 Q3/17 Q4/17 Q1/17 Q2/17 Q3/17 Q4/17-1% -3% 6% 5% 1% 3% 3% 1% 3% 8% 2% 6% 7% 2% 4% 15% 1 Passenger car and light truck <6t PC & LT tire volumes, global PC & LT tire volumes, Continental Truck tire volumes, global Truck tire volumes, Continental 19

20 3) Rubber Group Strong in Mix Global volumes and Price/Mix 2017 Growth Matrix PC & LT 1 Tires CAGR % 1% 2% 3% 3% 3% 5% Sales growth PLT tires Unit sales growth (ww) 4% 6% -1% Unit sales growth winter tires 1% Q1/17 Q2/17 Q3/17 Q4/17 Unit sales growth 17" 12% 1 Passenger car and light truck <6t Continental tire volumes, global Continental P/M Unit sales growth 18" 20% 20

21 3) Rubber Group Expected Raw Material Price Development in 2018 Natural rubber price (TSR 20) expected to rise by 10% Synthetic rubber price (butadiene feedstock) forecast to rise by 6% Prices for carbon black and chemicals are forecast to rise by at least 10% Based on these assumptions, costs of raw materials are expected to burden the Rubber Group with about 50 mn in 2018 However, H will be supported by lower raw materials costs and positive effects from price increases in Q Raw material price development E (U.S. cents/kg) Average (Y) TSR 20: 251 Butadiene: 148 Average (Y) TSR 20: 172 Butadiene: 132 Average (Y) TSR 20: 137 Butadiene: 90 Average (Y) TSR 20: 138 Butadiene: 113 Average (Y) TSR 20: 167 Butadiene: 151 Average (Y) TSR 20: 184 Butadiene: Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18E Q2/18E Q3/18E Q4/18E 1 Source: Bloomberg and Continental estimates for 2018 TSR 20 (U.S. cents/kg) Butadiene (U.S. cents/kg) 21

22 4) Indebtedness and Cash Flow Net Indebtedness Bridge ( mn) , , mn outflow from change in working capital Gearing ratio 2,798 19% 3,513 2,048 13% Net indebtedness (FY 2016) Dividend Capex Acquisitions Change in receivables Change in inventories Change in payables Depr. and amortization Other CF Net indebtedness (FY 2017) 1 According to cash flow statement including intangible assets 22

23 4) Indebtedness and Cash Flow Net Indebtedness and Gearing Ratio 219% Net indebtedness ( mn) Gearing ratio applying IAS 19 (rev. 2011) 118% Gearing ratio 90% 65% 46% 58% 26% 27% 19% 13% 8,896 7,317 6,772 5,320 4,289 2,824 3,542 2,798 2,048 YE YE YE YE YE YE YE YE YE

24 4) Indebtedness and Cash Flow Cash Conversion 87% 95% 85% 2,701 99% 1 2,287 2, % 79% 1 39% 1, ,640 1,653 1,818 2,015 1,444 1,771 1, Cumulative more than 13 bn of free cash flow Free cash flow ( mn) Cash outflow acquisitions ( mn) Cash conversion 1 Free cash flow before acquisitions divided by net income attributable to the shareholders of the parent; IAS 19 (rev.2011) applied since

25 4) Indebtedness and Cash Flow Free Cash Flow Before Acquisitions ( mn) Increased Despite High Capex before acquisitions before acquisitions 1,771 4,938 2,287 1,753 2,349 5, ,167-2,651-3,468-2, Cash flow from operating activities Cash flow used for investing activities Free cash flow 25

26 5) Outlook 2018 PC & LT Production by Quarter 1 Europe (mn units) North America (mn units) China (mn units) 2016: : E: : : E: : : E: % 2% 3% 6% 4% 6% 5% 4% 1% -1% -3% -1% -2% -1% 1% -6% -4% -4% -3%-10% Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18E Q2/18E Q3/18E Q4/18E Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18E Q2/18E Q3/18E Q4/18E Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18E Q2/18E Q3/18E Q4/18E % 2% 1% 0% 2% 1% 30% 16% 7% 6% 7% 0% 3% 5% 1% 1% Europe chg YOY North America chg YOY China chg YOY 1 Source: IHS until 2017 and own estimates, Europe excluding Kazakhstan and Uzbekistan 26

27 5) Outlook 2018 Market Outlook PC & LT 1 Production (mn units) Commercial Vehicle 2 Production (k units) Worldwide production to increase more than 1% 2017E 2018E Chg. Europe % North America % Worldwide production to decrease by 1% 2017E 2018E Chg. Europe % North America % IHS and own estimates South America % Asia % IHS and own estimates South America % Asia 2,140 2,033-5% PC & LT 1 Replacement Tire Market (mn units) Commercial Vehicle Replacement 3 Tire Market (mn units) Worldwide replacement tire market to increase by 3% LMC and own estimates 2017E 2018E Chg. Europe % North America % South America % Asia % Worldwide replacement market to increase by 2% LMC and own estimates 2017E 2018E Chg. Europe % North America % South America % Asia % 1 Passenger car and light truck <6t 2 Medium and heavy vehicles >6t 3 Radial and bias 27

28 5) Outlook 2018 Continental Corporation Consolidated sales adj. EBIT 1 margin Automotive Group adj. EBIT 1 Rubber Group adj. EBIT 1 Raw materials cost impact E 44.0 bn 10.9 % 26.6 bn 2.2 bn 17.5 bn 2.6 bn More than 450 mn for the Rubber Group Special effects - 14 mn mn Financial result Tax rate Capex PPA amortization mn at constant FX 2 29% 2.9 bn 171 mn Free cash flow before acquisitions 2.3 bn ~ 2 bn To increase to ~ 47 bn at constant FX rates ~10.5% adj. EBIT 1 margin To increase to ~ 28.5 bn at constant FX rates ~8.5% adj. EBIT 1 margin To increase to ~ 18.5 bn at constant FX rates ~15% adj. EBIT 1 margin Raw materials to burden Rubber Group with about 50 mn, based on current estimates <- 180 mn at constant FX rates <30% Capex at around 7% of sales ~ 180 mn 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Before effects of currency translation and effects from changes in the fair value of derivative instruments and other valuation effects 28

29 6) Medium Term Outlook Sales Exceed 50 bn and ROCE More Than 20% > % % 21% >20% Automotive Group Rubber Group E 2025E Rubber sales ( bn) Automotive sales ( bn) 1 Automotive sales ACES ( bn) Return on capital employed (ROCE) Global PC & LT 2 Production CAGR : 3% : 4% E: 1-2% 1 ACES: Automated Driving, Connectivity, Electrification and Smart Mobility 2 Passenger car and light truck 29

30 30

31 Disclaimer This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Annual Press Conference and the Analyst and Investor Call on March 8, 2018, and the subsequent road shows in Europe, North America and Asia. 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. 31

32 Contact Equity and Debt Markets Relations Vahrenwalder Str Hanover Germany ir@conti.de Fax: Rolf Woller Head of IR Phone: rolf.woller@conti.de Michael Saemann Analysts, Institutional Investors and Sustainability Investors Phone: michael.saemann@conti.de Jana Cross Assistant to the Head of IR Roadshow and Conference Organization Phone: jana.cross@conti.de Klaus Paesler Analysts, Institutional Investors, ADR and Private Investors Phone: klaus.paesler@conti.de Christopher Macke Analysts, Institutional Investors Phone: christopher.macke@conti.de Sabine Reese Sustainability, ASM, CMD Organization, IR Website, Capital Market Disclosure Requirements Phone: sabine.reese@conti.de Marvin Kalberlah Analysts, Institutional Investors Social Media Phone: marvin.kalberlah@conti.de 32

33 Continental Financial Calendar 2018 Preliminary figures for fiscal 2017 January 9, 2018 Annual Financial Press Conference March 8, 2018 Annual Shareholders Meeting (incl. key data for Q1 2018) April 27, 2018 Q1 Financial Report May 8, 2018 Half-Year Financial Report August 2, 2018 Nine-Month Financial Report November 8, Preliminary figures for fiscal 2018 January 2019 Annual Financial Press Conference March 2019 Annual Shareholders Meeting (incl. key data for Q1 2019) April 26, 2019 Q1 Financial Report May 2019 Half-Year Financial Report August 2019 Nine-Month Financial Report November

34 Continental Share Data/ADR Data Share Data ADR Data Type of share No-par value share Ratio 1:5 (ordinary share : ADRs) Bloomberg Ticker CON Bloomberg Ticker CTTAY Reuters Ticker CONG Reuters Ticker CTTAY.PK German Security Identification Number (WKN) ISIN US ISIN DE ADR Level Level 1 Shares outstanding as at December 31, ,005,983 Exchange Sponsor OTC Deutsche Bank Trust Company Americas 34

35 Continental Bond Data 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 % % % % Rating at issuance date Ba2 (Moody s 4 ) BB (S&P) BB (Fitch 2 ) BBB (S&P) BBB (Fitch) BBB+ (S&P) BBB+ (Fitch) Current corporation and bond ratings 3 BBB+ (Fitch), BBB+ (S&P), Baa1 (Moody s 4 ) Ba1 (Moody s 4 ) BB (S&P) BBB (Fitch 2 ) Coupon 3.0% p.a. 0.5% p.a. 0.0% p.a % 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, Commenced February 20, 2017 Not applicable Annual September 9 WKN A1X24V A1Z7C3 A2DARM A1X3B7 ISIN XS DE000A1Z7C39 XS XS Denomination 1,000 with minimum tradable amount 1,000 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, Non-contracted rating since February 1,

36 Back-up 36

37 7) Back-up Corporation Highlights FY 2017 Sales Increase of 8.5% to 44,009.5 mn (PY: 40,549.5 mn); organic sales up 8.1% EBITDA Increase of 10.3% to 6,678.9 mn (PY: 6,057.4 mn) EBIT Increase of 11.4% to 4,561.5 mn (PY: 4,095.8 mn); Adj. EBIT 1 increase to 4,746.9 mn (10.9% adj. EBIT 1 margin); PPA 2 effect mn; consolidation effects mn; total special effects mn NIAT 3 Increase of 6.5% to 2,984.6 mn (PY: 2,802.5 mn) EPS 3 EPS of (PY: 14.01) EPS before PPA (PY: before PPA 2 ) Capex Capex increased to 2,854.4 mn (PY: 2,593.0 mn); capex ratio 6.5% of sales; capex to depreciation coverage 1.3x (1.5x ex PPA 2 ) R&D (net) Expenses increased by 10.4% to 3,103.7 mn (PY: 2,811.5 mn); R&D ratio 7.1% of sales (PY: 6.9%) Cash flow Operating cash flow up by mn to 5,220.5 mn; free cash flow 1,752.8 mn Net indebtedness Net indebtedness down by mn to 2,047.6 mn as at Dec 31, year-on-year Liquidity and undrawn credit lines amounted to 5,568.3 mn Pension and similar obligation Long-term provisions for pension and similar obligations amounted to 4,103.0 mn (PY: 4,149.9 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 37

38 7) Back-up Overview of Volume Development Units (YOY change) Q1/15 H1/15 9M/15 FY 15 Q1/16 H1/16 9M/16 FY 16 Q1/17 H1/17 9M/17 FY 17 Market data for PC and LT production Europe 4% 3% 4% 4% 2% 6% 3% 3% 6% 1% 2% 3% North America 1% 2% 3% 3% 4% 3% 2% 2% 2% -1% -4% -4% Europe and North America combined 3% 3% 4% 4% 3% 4% 3% 3% 4% 0% -1% 0% Worldwide 2% 1% 2% 2% 2% 3% 3% 4% 6% 3% 3% 2% Continental Electronic Brake Systems (EBS) 8% 6% 5% 5% 0% 4% 6% 6% 13% 10% 9% 9% Boosters -1% -4% -8% -7% -3% -3% 4% 1% 3% 3% 4% 6% EPB-Systems 59% 53% 47% 48% 38% 48% 51% 48% 47% 39% 35% 33% Advanced driver assistance systems (ADAS) 46% 53% 59% 58% 51% 45% 38% 36% 40% 40% 41% 41% Engine electronic control units (ECUs) -1% -3% -5% -5% -2% 3% 6% 8% 12% 9% 7% 7% Injectors -8% -8% -11% -11% -5% -5% 2% 7% 19% 17% 15% 11% Transmission control units (TCUs) 6% 2% 0% -1% -1% -1% 1% 1% -2% -3% -5% -4% Turbochargers 59% 45% 50% 43% 23% 24% 18% 17% 45% 44% 50% 56% Market data tires PC and LT replacement tires Europe -1% 2% 0% 0% 2% 2% 2% 2% 6% 2% 2% 3% PC and LT replacement tires North America -6% 0% 1% 1% 5% 2% 2% 2% 2% 1% -1% 0% Commercial vehicle tires OE Europe 0% 4% 5% 5% 6% 5% 3% 3% 9% 6% 7% 10% Commercial vehicle tires OE North America 21% 17% 12% 7% -12% -9% -16% -13% -8% -1% 10% 8% Commercial vehicle replacement tires Europe -4% 2% -1% 0% 2% 3% 3% 3% 11% 6% 6% 4% Commercial vehicle replacement tires North America 3% 5% 3% 3% 4% 3% 3% 2% 12% -1% 4% 4% Continental PC and LT tires -1% 3% 2% 5% 9% 8% 6% 6% 5% 2% 2% 3% Commercial vehicle tires -3% 0% 3% 5% 7% 8% 4% 4% 15% 10% 8% 5% ContiTech organic sales growth 2% 4% 4% 4% 3% 2% 2% 2% 8% 7% 8% 8% 38

39 7) Back-up Worldwide Supplier Ranking Top 10 Global OEM Suppliers 2017 Sales ( bn) 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. Calendarized to Dec. year-end. Based on average currency exchange rates Robert Bosch Continental Denso Magna ZF Aisin Seiki Bridgestone Hyundai Mobis Michelin Faurecia 39

40 7) Back-up Sales by Markets Automotive Group ,565 mn Rubber Group ,495 mn Corporation ,009 mn Asia 27% Other markets Other markets 2% 8% Germany Germany 17% 22% Asia 13% Asia 22% Other markets 4% Germany 20% North America 24% Europe (excluding Germany) 25% North America 26% Europe (excluding Germany) 36% North America 25% Europe (excluding Germany) 29% 40

41 7) Back-up EBITDA by Division Automotive Group ,296 mn Rubber Group ,500 mn Corporation ,679 mn Interior 35% Chassis & Safety 39% ContiTech 21% ContiTech 11% Chassis & Safety 19% Tires 40% Powertrain 13% Powertrain 26% Tires 79% Interior 17% 41

42 7) Back-up Capex Capex by Division ( mn) Capex Distribution by Division C&S PT I Tires CT C&S PT I Tires CT % 8% 7% 30% 34% 30% 15% 17% 16% 22% 21% 23% % 20% 24%

43 7) Back-up Capex, Depreciation and EPS Breakdown FY 2017 Capex, Depreciation and PPA 1 ( mn) EPS ex PPA 1,2 ( ) 2,593 2, % 5.6% 1,748 1,818 2, % , Capex (PPE), percentage of sales Depreciation, w/o PPA PPA 1 Amortization of intangibles from PPA 2 Assuming corporate tax rate of 28% 1 1 EPS reported 1 2 PPA after tax per share EPS excl. 1,2 PPA 43

44 7) Back-up Focus on Costs Cost as Percentage of Consolidated Sales Cost comparison 2008 to 2017 Cost of sales declined by 620 bps R&D expenses increased in % of sales and in absolute terms to 3.1 bn Selling and logistics costs up by 60 bps mainly due to expansion of tire distribution channels Administrative costs down by 60 bps 3.2% 4.9% 6.2% 80.4% 2.6% 5.5% 7.1% 74.2% 1 IAS 19 (rev. 2011) applied FY 2008 FY 2017 Administrative expenses Selling and logistics expenses R&D expenses Cost of sales 1 44

45 7) Back-up Very Sound Balance Sheet Leverage ratio 1 Gearing ratio 2 Equity ratio % 44% 0.23 H1/09 FY % H1/09 FY % H1/09 FY 2017 Continental s current credit rating is: Fitch (since October 24, 2016): BBB+, outlook stable S&P (since May 11, 2016): BBB+, outlook stable Moody s (since June 30, 2015): Baa1, outlook stable 1 Leverage covenant ratio as defined in syndicated loan agreement; IAS 19 (rev. 2011) applied for IAS 19 (rev. 2011) applied for 2017 Continental s targets: Rating: BBB / BBB+ Gearing ratio: <20% Equity ratio: above 35% Leverage ratio 1 : well below 1.00x 45

46 7) Back-up Cash Flow Overview Cash Flow ( mn) Cash Flow 2017 by Quarter ( mn) before acquisitions before acquisitions Q1 Q2 Q3 Q4-3,167-2,651 4,938 5,221 1,771 2,287 1,753 2, , , ,604 Cash flow from operating activities -3,468-2,871 Cash flow used for investing activities Free cash flow Cash flow from operating activities ,370 Cash flow used for investing activities Free cash flow Free cash flow before acquisitions 46

47 7) Back-up Gross Indebtedness by Source at YE 2017 ( mn) Gross indebtedness 4,090 mn (PY: 4,952 mn) Cash 1,882 mn (PY: 2,107 mn) Net indebtedness 2,048 mn (PY: 2,798 mn) Available credit lines 3,687 mn (PY: 3,888 mn) 1 Percentages are calculated as share of gross indebtedness 2 Amounts shown are nominal values Various other bank lines 860 Other indebtedness 580 Bond Aug (3.9%) 2 50 Bond Sept (3.125%) Bonds 65% 1 Various other bank lines 21% 1 Other indebtedness 14% 1 Bond Jul (3.0%) Bond Feb (0.0%) Bond Feb (0.5%)

48 7) Back-up Key Historical Credit Metrics ( mn) Statement of Cash Flows Adjusted EBITDA 2 5,094 5,318 6,094 6,125 6,701 Reported EBITDA 5,095 5,134 6,001 6,057 6,679 Net cash interest paid Tax paid ,015-1,047-1,122 Change in net working capital Other Cash flow arising from operating activities 3,722 4,168 4,916 4,938 5,221 Cash flow arising from investing activities -1,904-2,153-3,472-3,167-3,468 - thereof acquisitions , thereof capex in PPE and intangibles -2,024-2,110-2,265-2,708-2,951 Cash flow before financing activities 1,818 2,015 1,444 1,771 1,753 Cash flow before acquisitions 1,972 2,144 2,701 2,288 2,349 Statement of Financial Position Cash and cash equivalents 2,045 3,244 1,622 2,107 1,882 Derivative instruments and interest-bearing investments Total indebtedness 6,638 6,432 5,245 4,952 4,090 Net indebtedness 4,289 2,824 3,542 2,798 2,048 Credit Ratios Net indebtedness / adjusted EBITDA 2 0.8x 0.5x 0.6x 0.5x 0.3x Net cash interest paid coverage (Ratio) 5 9.5x 33.7x 35.1x 54.8x 63.6x 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 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 48

49 7) Back-up Automotive Group Financials Chassis & Safety Sales increased by 10.4% before consolidation and FX effects EBITDA increased by mn to 1,301.6 mn (+36.4%) Adj. EBIT 1 increased by mn to mn (adj. EBIT 1 margin 9.2%) EBIT increased by mn to mn (EBIT margin 9.2%) Chassis & Safety FY Sales (mn ) EBITDA margin Adj. EBIT margin 9,768 8,978 8, % 13.3% 10.6% PPA effect in 2017: 0.0 mn Special effects in 2017: mn 6.5% 9.2% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

50 7) Back-up Automotive Group Financials Powertrain Sales increased by 5.6% before consolidation and FX effects EBITDA increased by 98.6 mn to mn (+13.0%) Adj. EBIT 1 increased by 75.4 mn to mn (adj. EBIT 1 margin 6.2%) EBIT increased by 61.9 mn to mn (EBIT margin 5.7%) Powertrain FY Sales (mn ) EBITDA margin Adj. EBIT margin 7,069 7,320 7, % 10.3% 11.2% PPA effect in 2017: mn Special effects in 2017: mn 5.4% 6.2% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

51 7) Back-up Automotive Group Financials Interior Sales increased by 11.6% before consolidation and FX effects EBITDA increased by mn to 1,140.0 mn (+26.1%) Interior FY 2017 Sales (mn ) EBITDA margin Adj. EBIT margin 1 Adj. EBIT 1 increased by mn to mn (adj. EBIT 1 margin 9.2%) 8,155 8,325 9,305 EBIT increased by mn to mn (EBIT margin 8.1%) 13.3% 10.9% 12.3% PPA effect in 2017: mn Special effects in 2017: mn 7.6% 9.2% 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

52 7) Back-up Rubber Group Financials Tires Sales increased by 5.3% before consolidation and FX effects EBITDA decreased by mn to 2,748.7 mn (-2.8%) Adj. EBIT 1 decreased by mn to 2,128.2 mn (adj. EBIT 1 margin 19.0%) EBIT decreased by mn to 2,151.3 mn (EBIT margin 19.0%) PPA effect in 2017: mn Tires FY Sales (mn ) EBITDA margin Adj. EBIT margin 10,409 10,717 11, % 26.4% 24.3% 21.4% 19.0% Special effects in 2017: mn 1 Before amortization of intangibles from PPA, consolidation and special effects Refer to Fact Sheets for further details 52

53 7) Back-up Tires Demand for Passenger Car and Light Truck Tires Replacement Tire Demand for PC & LT Europe 15% 5% -5% -15% -25% Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 PC & LT Tire Replacement (YOY chg. monthly) 15% 5% -5% -15% -25% Jan-11 Replacement Tire Demand for PC & LT North America Aug-11 Mar-12 Oct-12 May-13 Dec-13 Jul-14 Feb-15 Sep-15 Apr-16 Nov-16 Jun-17 PC & LT Tire Replacement (YOY chg. monthly) Jan-18 Vehicle miles YOY chg. monthly (DOT, rs) 1 5% 0% -5% 1 U.S. Department of Transportation, right Scale 53

54 7) Back-up Tires Demand for Commercial Vehicle Tires Replacement Tire Demand for Truck Tires Europe Replacement Tire Demand for Truck Tires North America 30% 20% 10% 0% -10% -20% -30% Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Truck tire replacement (YOY chg. monthly) 1 km BAG monthly (adj.) Jan-18 30% 20% 10% 0% -10% -20% -30% Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Truck tire replacement (YOY chg. monthly) 2 ATA monthly (adj.) YOY Jan-18 1 BAG = Bundesamt für Güterverkehr 2 ATA = American Trucking Association (miles traveled) 54

55 7) Back-up Rubber Group Financials ContiTech Sales increased by 8.1% before consolidation and FX effects EBITDA increased by 20.0 mn to mn (+2.7%) Adj. EBIT 1 decreased by mn to mn (adj. EBIT 1 margin 8.8%) EBIT increased by 43.0 mn to mn (EBIT margin 7.1%) PPA effect in 2017: mn Special effects in 2017: mn ContiTech FY 2017 Sales (mn ) EBITDA margin Adj. EBIT margin 6,246 5,368 5, % 13.4% 12.0% 9.5% 8.8% 1 1 Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

56 Fact Sheets

57 7) Fact Sheets Sales by Quarter Sales (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety 2, , , , , , , , , , , , , , ,767.8 Powertrain 1, , , , , , , , , , , , , , ,660.9 Interior 1, , , , , , , , , , , , , , ,305.2 Tires 2, , , , , , , , , , , , , , ,325.8 ContiTech 1, , , , , , , , , , , , , , ,246.4 Other / Consolidation Continental Corporation 9, , , , , , , , , , , , , , ,009.5 Changes Y-o-Y in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation

58 7) Fact Sheets EBITDA by Quarter EBITDA (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety , ,301.6 Powertrain Interior , ,140.0 Tires , , ,748.7 ContiTech Other / Consolidation Continental Corporation 1, , , , , , , , , , , , , , ,678.9 EBITDA margin in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Changes Y-o-Y in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety , Powertrain Interior Tires ContiTech Continental Corporation

59 7) Fact Sheets EBIT by Quarter EBIT (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires , , ,151.3 ContiTech Other / Consolidation Continental Corporation , , , , , , , , , , , ,561.5 EBIT margin in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Changes Y-o-Y in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation

60 7) Fact Sheets Adjusted EBIT 1 by Quarter Adj. EBIT ¹ (mn ) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires , ,128.2 ContiTech Other / Consolidation Continental Corporation 1, , , , , , , , , Adj. EBIT ¹ margin in % Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Changes Y-o-Y in % 2017 Q1 Q2 Q3 Q4 Year Chassis & Safety Powertrain Interior Tires ContiTech Continental Corporation Before amortization of intangibles from PPA, consolidation and special effects 60

61 7) Fact Sheets Consolidated Statement of Income ( mn) Q4 Q4 Q4 Sales 44, , , , , ,015.8 Cost of sales -32, , , , , ,448.6 Gross margin on sales 11, , , , , ,567.2 Research and development expenses -3, , , Selling and logistics expenses -2, , , Administrative expenses -1, , Other expenses and income Income from at-equity accounted investees Other income from investments Earnings before interest and tax 4, , , , , Interest income Interest expense Financial result Earnings before tax 4, , , , , Income tax expense -1, , , Net income 3, , , Non-controlling interests Net income attributable to the shareholders of the parent 2, , , Basic earnings per share (in ) Diluted earnings per share (in )

62 7) Fact Sheets Consolidated Statement of Financial Position Assets Assets in millions Dec. 31, 2017 Dec. 31, 2016 Goodwill 7, ,857.3 Other intangible assets 1, ,514.1 Property, plant and equipment 11, ,538.1 Investment property Investments in equity-accounted investees Other investments Deferred tax assets 1, ,836.1 Defined benefit assets Long-term derivative instruments and interest-bearing investments Long-term other financial assets Long-term other assets Non-current assets 22, ,321.0 Inventories 4, ,753.2 Trade accounts receivable 7, ,392.7 Short-term other financial assets Short-term other assets Income tax receivables Short-term derivative instruments and interest-bearing investments Cash and cash equivalents 1, ,107.0 Assets held for sale Current assets 15, ,853.9 Total assets 37, ,

63 7) Fact Sheets Consolidated Statement of Financial Position Total Equity and Liabilities Equity and Liabilities in millions Dec. 31, 2017 Dec. 31, 2016 Subscribed capital Capital reserves 4, ,155.6 Retained earnings 13, ,534.7 Other comprehensive income -2, ,932.3 Equity attributable to the shareholders of the parent 15, ,270.0 Non-controlling interests Total equity 16, ,734.8 Long-term employee benefits 4, ,392.3 Deferred tax liabilities Long-term provisions for other risks and obligations Long-term indebtedness 2, ,803.7 Long-term other financial liabilities Long-term other liabilities Non-current liabilities 6, ,885.9 Short-term employee benefits 1, ,314.1 Trade accounts payable 6, ,248.0 Income tax payables Short-term provisions for other risks and obligations ,146.4 Short-term indebtedness 2, ,148.6 Short-term other financial liabilities 1, ,187.3 Short-term other liabilities Current liabilities 14, ,554.2 Total equity and liabilities 37, ,

64 7) Fact Sheets Consolidated Statement of Cash Flows Consolidated Statement of Cash Flows in millions Net income 3, ,882.0 Income tax expense 1, ,096.8 Financial result EBIT 4, ,095.8 Interest paid Interest received Income tax paid -1, ,047.3 Dividends received Depreciation, amortization, impairment and reversal of impairment losses 2, ,961.6 Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses Gains/losses from the disposal of assets, companies and business operations Changes in inventories trade accounts receivable trade accounts payable employee benefits and other provisions other assets and liabilities Cash flow arising from operating activities 5, ,938.1 Cash flow from the disposal of property, plant and equipment, and intangible assets Capital expenditure on property, plant and equipment, and software -2, ,592.5 Capital expenditure on intangible assets from development projects and miscellaneous Cash flow from the disposal of companies and business operations Acquisition of companies and business operations Cash flow arising from investing activities -3, ,166.8 Cash flow before financing activities (free cash flow) 1, , Net cash change in short-term indebtedness , Cash change in long-term indebtedness Other cash changes Successive purchases Dividends paid Dividends paid to and cash changes from equity transactions with non-controlling interests Cash and cash equivalents arising from the first-time consolidation of subsidiaries Cash flow arising from financing activities -1, ,254.7 Change in cash and cash equivalents Cash and cash equivalents as at January 1 2, ,621.5 Effect of exchange-rate changes on cash and cash equivalents Cash and cash equivalents as at December 31 1, , The statement was adjusted in line with the requirements of the changes to IAS 7, Statement of Cash Flows (Disclosure Initiative). The figures from comparative periods have been adjusted accordingly. 64

65 7) Fact Sheets FY 2017 Results Reported and Adjusted ( mn) by Division Chassis & Safety Powertrain Interior Tires ContiTech Cons./Corr. Corporation Sales 8, , , , , , , , , , , ,009.5 EBIT , , , ,561.5 in % of sales 6.5% 9.2% 5.2% 5.7% 6.8% 8.1% 21.4% 19.0% 7.3% 7.1% 10.1% 10.4% Amortization of intangible assets from PPA Total special effects Total consolidation effects Total consolidation & special effects Adjusted operating result (adj. EBIT) , , , ,746.9 in % of adjusted sales 6.5% 9.2% 5.4% 6.2% 7.6% 9.2% 21.4% 19.0% 9.5% 8.8% 10.6% 10.9% 1 Before amortization of intangibles from PPA, consolidation and special effects 65