fact book 2014 - continental usa...contents i. continental at a glance slide title page 1 disclaimer...

Fact Book2014

www.continental-corporation.com

Contents

I. Continental at a Glance

Slide Title Page

1 Disclaimer 8

3 More than 140 Years of Progress and Achievement 9

4 Continental Corporation – Sales, EBIT & Net Income 9

5 Continental Ranks No. 2 in Worldwide Supplier Ranking 10

6 Executive Board 10

7 Megatrends in the Automotive Industry 11

8 A Leading Global Supplier for Key Automotive Electronics Applications 11

9 A Leading Global Supplier of Tire and Non-Tire Rubber Products 12

10 Sales by Market 12

11 EBITDA by Group and Corporation 13

12 Consolidated Sales 13

13 Number of Employees 14

II. Continental Strategy

Slide Title Page

15 Systematic Entrepreneurial Approach 15

16 Sustainable Value Creation 15

17 Cost Consciousness – Production in Best-Cost Countries 16

18 Balanced Distribution of Sales 16

19 Top Position for the 20 Fastest Growing Automotive Technologies through 2020 17

20 Continental Corporation Worldwide 17

21 Sales OE Automotive/Non-OE Automotive 18

22 Technological Balance 18

23 The Same Values Worldwide for a Shared Corporate Culture 19

© Continental AG Fact Book 2014 | 1

Contents

III. Continental Megatrends

Slide Title Page

25 We Shape the Megatrends in the Automotive Industry 20

26 Environment: Initiatives in EU, USA and Japan – For Cleaner Mobility 20

27 Environment: Initiatives for Cleaner Mobility in Various Markets 21

28 Environment: Today’s Vehicle Emissions vs. Future Targets 21

29 Environment: Engine Development Roadmap 22

30 Environment: Reduction of CO2 Emissions: Solutions by Continental 22

31 Environment: How to Reach CO2 Target of 95g/km 23

32 Information: Interior: Examples of Market-Specific Initiatives and Projects 23

33 Information: Interior: The Car Will Be Connected to Its Environment 24

34 Information: Interior: Product Highlights for Intelligent Mobility 24

35 Safety: Market-Specific Initiatives – Towards Safer Mobility 25

36 Safety: Road Traffic Deaths per 100,000 Inhabitants by Region 25

37 Safety: Global Development of Active Safety Regulations & Ratings 26

38 Safety: Euro NCAP 5 Star Rating Requirements 26

39 Safety: History roadmap for Accident-Free Driving 27

40 Safety: Future Automotive Trends 27

41 Safety: Automated Driving Requires Systems Expertise 28

42 Safety: World Market Forecast for Driver Assistance Systems 28

43 Safety: Winter Tire Regulations 29

44 Safety and Environment: Tire Labeling Initiatives in Europe, USA, Japan,

South Korea and Brazil

29

IV. Continental Vision

Slide Title Page

46 Chassis & Safety Vision 30

47 Powertrain Vision 31

48 Interior Vision 31

49 Tires: Key Initiatives 2001 – Vision 2025 32

50 Tires Vision 2025 – Towards a more Balanced Footprint 32

51 ContiTech Vision 33

52 ContiTech: Engineering Green Value 33


V. Sustainability at Continental

Slide Title Page

54 Our Policies and Guidelines 34

55 Corporate Environmental Key Performance Indicators 35

56 Emission Reduction – Electrification Tailored to Fit (48-Volt Eco Drive) 35

57 Emission Reduction – Electrification Tailored to Fit 36

58 Research in Alternative Raw Materials for Tire Production 36

59 Equal Opportunity 37

60 UERÈ Project in Rio de Janeiro, Brazil 37

61 Corporate Memberships (1) 38

62 Corporate Memberships (2) 38

63 Health and Occupational Safety 39

64 Corporate Bodies 39

Contents

VI. Continental Corporation

Slide Title Page

66 Key Consolidated Figures 40

67 Sales and Adjusted EBIT by Quarter 41

68 Key Historical Financials and Credit Metrics – IAS 19 (rev. 2011) applied 41

69 Net Indebtedness and Gearing Ratio 42

70 Gross Indebtedness by Source 42

71 Maturities for Gross Indebtedness 43

72 Purchasing – Production Materials 2014 43

73 Raw Material Prices 44


VII. Market Data

Slide Title Page

75 Installation Rates of Electronic Brake Systems 45

76 Installation Rates of Fuel Injection Systems 45

77 Development of Transmissions Technologies 46

78 Installation Rates of Turbocharger in Gasoline Engines 46

79 Installation Rates of Keyless Entry Systems 47

80 Installation Rates of Multimedia Systems 47

81 Installation Rates of Advanced Driver Assistance Systems 48

82 Installation Rates of Head-Up Displays 48

83 Production of Light Vehicles 2012 – 2015 49

84 Production of Heavy Vehicles 2012 – 2015 49

85 Replacement Passenger, Light Truck and 4x4 Tires 2012 – 2015 50

86 Replacement Truck Tires 2012 – 2015 50

Contents

VIII. Automotive Group

Slide Title Page

88 Key Figures 51

89 Sales and Adjusted EBIT by Division 52


91 Order Intake (LTS) in the Automotive Group €30 bn in 2014 53

92 Production of Passenger Cars and Light Trucks (<6t) 53

93 Growth Opportunities – Electronic Stability Control (ESC) 54

94 Growth Opportunities – Advanced Driver Assistance System (ADAS) 54

95 Growth Opportunities – Sensors and Actuators 55

96 Growth Opportunities – Selective Catalytic Reduction 55

97 Growth Opportunities – Gasoline Direct Injection (GDI) 56

98 Growth Opportunities – Gasoline Turbo Charger (TC) 56

99 Growth Opportunities – 48V Technology 57

100 Growth Opportunities – Electronic Tire Information Systems (eTIS) 57

101 Growth Opportunities – Driver HMI Displays 58


Contents

VIII.3. Automotive Group – Interior Division

Slide Title Page

122 Business Units and Key Products 68

123 Locations Worldwide 69

124 Key Figures 69


126 Market Position for Body & Security 2014 70

127 Market Position for Instrumentation & Driver HMI 2014 71

128 Market Position for Infotainment & Connectivity 2014 71

129 Market Position for Commercial Vehicle 2014 72

VIII.1. Automotive Group – Chassis & Safety Division

Slide Title Page



105 Key Figures 60


107 Market Position for Electronic Brake Systems 2014 61

108 Market Position for Foundation Brake Systems 2014 61

109 Market Position for Actuation 2014 62

110 Market Position for Airbag Electronics 2014 62

111 Market Position for Advanced Driver Assistance Systems 2014 63

112 Growing Sales Volume for Electronic Brake Systems 63

VIII.2. Automotive Group – Powertrain Division

Slide Title Page



116 Key Figures 65


118 Market Position for Diesel Injection Systems 2014 66

119 Market Position for Gasoline Injection Systems 2014 67

120 Market Position for Transmission Control Units 2014 67


Contents

IX. Rubber Group

Slide Title Page

131 Key Figures 73

132 Sales and Adjusted EBIT by Division 73


134 Growth Opportunities – Replacement Tires Demand for PC & LT Tires 74

135 Growth Opportunities – Improving Tire Mix due to rising SUV & Pick-Up Share 75

136 Growth Opportunities – Example for Improving Tire Mix on Design Step-Up 75

137 Additional Tire Production Capacity of 26 mn Units by 2017/18 76

138 Cumulative Market for ContiTech Products 76

IX.1. Rubber Group – Tires Division

Slide Title Page

140 Business Units and Tire Brands 77

141 Key Figures 78

142 Sales by Markets 78

143 Market Share for Passenger and Light Truck Tires 2014 79

144 Market Share for Truck Tires 2014 79

145 Continental Worldwide PLT Production 2014 80

146 Continental European PLT Production 2014 80

147 Continental Worldwide Truck Tire Production 2014 81

148 Cost of Labor at Continental Manufacturing Sites 81

149 Passenger and Light Truck Tires: Product Mix Improvement 82

150 Passenger and Light Truck Tires: Unit Sales 2009 - 2014 82

151 Commercial Vehicle Tires: Unit Sales 2009 – 2014 83


Contents

X. Share & Bond Information

Slide Title Page

162 Share Data / ADR Data 88

163 Share Price Development vs. Major Stock Indexes 89

164 Common Stock 89

165 Shareholder Structure 90

166 Bond Details 90

167 Development of the Bonds 91

168 Development of Continental’s Credit Rating 91

169 10 Year Financial Overview 92

XI. Glossary

Slide Title Page

171 Financial Glossary 93

172 Product and Division Glossary 93

173 Contact Data 94

174 Financial Calendar 94

IX.2. Rubber Group – ContiTech Division

Slide Title Page


154 Forming a Global Player in Rubber and Plastics Technologies 84


156 Key Figures 85


158 Veyance at a Glance 2014 86

159 ContiTech and Veyance at a Glance 2014 87

160 Product Overview 87


Disclaimer

This Fact Book has been prepared by Continental Aktiengesellschaft and includes information available to us as of March 5, 2015. 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 of its affiliates 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 or any other financial investment or exposure

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 Fact Book 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.

1

2

Topics

Continental at a Glance I. 3

Continental Strategy II. 15

Continental Megatrends III. 25

Continental Vision IV. 46

Sustainability at Continental V. 54

Continental Corporation VI. 66

Market Data VII. 75

Automotive Group VIII. 88

Rubber Group IX. 131

Share and Bond Information X. 162

Glossary XI. 171


I. Continental at a Glance More than 140 Years of Progress and Achievement

3

Merger with major

companies of the

German rubber industry

to form Continental

Gummi-Werke AG.

Acquisition of a US

company’s Automotive

Brake & Chassis unit,

the core of which is

Alfred Teves GmbH in

Frankfurt.

Continental-

Caoutchouc- and

Gutta-Percha

Compagnie is

founded in

Hanover,

Germany.

Continental strengthens its

position in the ASEAN

market and Australia by

establishing

its Continental Sime Tyre

joint venture.

Takeover of the European tire operations of Uniroyal,

the tire operations of the Austrian company Semperit,

the North American tire manufacturer General Tire.

Continental reinforces its activities by

acquiring Temic, the international

electronics specialist.

Continental acquires Siemens VDO

Automotive AG and advances to among

the top five suppliers in the automotive

industry worldwide, at the same time

boosting its market position in Europe,

North America and Asia.

Continental expands its activities in

telematics, among other fields, with

the acquisition of the automotive

electronics business from Motorola.

Through the acquisition of

Phoenix, ContiTech becomes

one of the world’s leading

specialists for rubber and

plastics technology outside the

tire industry.

1871

1929

1979

1985

1987 1998

2001

2003 2004

2006

2007

Continental acquires a majority interest in

the Slovak company Continental Matador

Rubber s.r.o. and expands its position for

the Tire and ContiTech divisions in Central

and Eastern Europe.

2011

Continental strengthens its

position in the tire business

in Asia by acquiring the

Indian tire manufacturer

Modi Tyres Company

Limited.

2012

2013

Continental acquires Parker

Hannifin’s automotive air

conditioning business, the conveyor

belt producer Legg Company and

the conveyor belt activities of Metso.

2015

Continental strengthens

its position in rubber and

plastic technology by

acquiring Veyance

Technologies.

2014

Continental intensifies its

operations as a complete system

supplier for exhaust aftertreatment

by acquiring Emitec.

1993

Continental expands its

tire operations by

integrating Barum.

I. Continental at a Glance Continental Corporation – Sales, EBIT & Net Income1(in € mn)

4

1 Net income attributable to the shareholders of the parent, from 1998 until 2003 US GAAP / from 2004 onwards IFRS.

2 Siemens VDO incorporated starting December 1, 2007.

IAS 19 (rev. 2011) applied starting 2013. The 2012 figures have been restated accordingly.

6,743 9,132

10,115 11,233 11,408 11,534

12,597 13,837

14,887

16,619

24,239

20,096

26,047

30,505

32,736 33,331

34,506

398 607 533

33

694 855 1,157

1,507 1,602 1,676

-296

-1,040

1,935

2,597

3,186 3,264 3,345

138 235 205

-258

226 314 716

930 982 1,021

-1,124 -1,649

576

1,242

1,905 1,923 2,375

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

US GAAP IFRS

Sales

EBIT

NIAT 1

2


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

5

Top 10 Global OEM Suppliers – 2014 Sales (in € mn)

1

2 3

4

1 Robert Bosch only includes Mobility Solutions division.

2 Continental not including ContiTech industrial business.

3 Bridgestone including Diversified Products.

4 Johnson Controls only includes Automotive Experience division.

Source: Company filings. Calendarized to December year end. Based on average currency exchange rates 2014.

I. Continental at a Glance Executive Board

6

Dr. Elmar Degenhart Chairman of the Executive Board

Corporate Functions:

Corporate Quality and Environment, Corporate Communications,

Continental Business System, Automotive Central Functions

Heinz-Gerhard Wente ContiTech Division

Corporate Function:

Purchasing

Dr. Ralf Cramer Continental China

Frank Jourdan Chassis & Safety Division

Helmut Matschi Interior Division

Dr. Ariane Reinhart Corporate Functions:

Human Relations, Corporate Social Responsibility

Wolfgang Schäfer Corporate Functions:

Finance, Controlling, Compliance, Law, IT

Nikolai Setzer Tire Division

José A. Avila Powertrain Division


I. Continental at a Glance Megatrends in the Automotive Industry

7

Road Traffic Deaths

Safety – For safe mobility

Information – For intelligent driving

Affordable Cars – For global mobility

A&B Production Segment1 in BRIC

(mn units)

1 Data based on framework created by the World Health

Organization (WHO) for estimating road traffic mortality.

Source: Global Status Report on road safety, WHO 2013.

Number of Road Traffic Deaths per 100,000 inhabitants by Region1

12.5

16.8

2014 2019E

Source: IHS February 2015. 1Including Mimi Full-Frame.

Region of

the

Americas

African Region

Eastern

Mediterranean

Region

South-East

Asia Region

Western

Pacific

Region

European

Region

15.8-

2009 2013

16.1 32.1

24.6

2009 2013

2009 2013

32.0

21.3

2009 2013

16.6 18.7

15.6 18.3

2009 2013

2009 2013

13.3 10.3

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 (1/2015).

Environment – For clean power

125g/km

95g/km2

117g/km

105g/km

1

8

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

2 ESC: Electronic Stability Control is a type of electronic brake system.

3 Sources: Strategy Analytics: Automotive Electronics System Demand Forecast 2012 to 2021, Jan 2015.

› Actuation

› Advanced driver assistance

systems (ADAS)

› Airbag electronics

› Electronic brake systems (EBS)

› Foundation brake systems

› Diesel injection systems

› Gasoline injection systems

› Transmission control units

› Double clutch transmission

control units

› Body and security products

› Commercial vehicle interiors

› Device connectivity and

telematics units

› Instrumentation, displays and

human machine interfaces

Sales 2014 €7,515 mn % of total 22%

Adj. EBIT1 €709 mn Adj. EBIT margin 9.4%





ESC2 installation rate by markets (%) Gasoline direct injection systems

installation rate by markets (%)

Market for Automotive Electronics3

(USD bn)

Chassis & Safety Powertrain Interior

30%

42% 35%

69%

2014 2019E EU NAFTA

19%

53%

83%

95%

2014 2019E China EU

I. Continental at a Glance A Leading Global Supplier for Key Automotive Electronics Applications

219

300

2014 2019E


I. Continental at a Glance A Leading Global Supplier of Tire and Non-Tire Rubber Products

9



› Markets

› EMEA

› The Americas

› APAC

› Products

› Original equipment

› Winter tires

› High performance tires

› Markets

› EMEA

› The Americas

› APAC

› Products


› Replacement

› Automotive hoses and hose lines

› Automotive interior trim

› Conveyor belts

› Marine and oil hoses and hose

lines

› Multiple V-ribbed belts and

timing belts

› Railway air springs

› Truck and bus air springs


Adj. EBIT1 €1,867 mn Adj. EBIT margin 19.4%

Passenger & Light Truck Tires Commercial Vehicle Tires

ContiTech2

Sales breakdown (%) Sales breakdown (%)

Tires


2 Before the acquisition of Veyance Technologies Inc.

OE 29%

Non-OE

71%

OE 58%

Non-OE

42%

I. Continental at a Glance Sales by Market

10

Automotive Group 2014

€20,909 mn

Rubber Group 2014

€13,638 mn

Corporation 2014

€34,506 mn

Germany 25%

Europe (excluding Germany)

23%

NAFTA 23%

Asia 26%

Other countries

3% Germany

21%


40%

NAFTA 21%

Asia 11%

Other countries

7%

Germany 23%


30%

NAFTA 22%

Asia 20%

Other countries

5%


I. Continental at a Glance EBITDA by Group and Corporation

11

Automotive Group 2014

€2,408 mn

Rubber Group 2014

€2,833 mn

Corporation 2014

€5,134 mn

Chassis & Safety 42%

Powertrain 19%

Interior 39%

Tires 81%

ContiTech 19% Chassis &

Safety 19%

Powertrain 8%

Interior 18%

Tires 44%

ContiTech 11%

I. Continental at a Glance Consolidated Sales

12

1

1

1

1 Since 2012 reported as Tires.

2010 2011 2012 2013 2014

Germany Rest of Europe NAFTA Asia Other markets

by Market

27% 26% 25% 24% 23%

33% 33%

30% 30% 30%

19%

19% 22% 22% 22%

16%

17%

18% 19%

20%

5%

5%

5% 5%

5%

26.0

30.5

32.7 33.3

34.5

2010 2011 2012 2013 2014

Chassis & Safety Powertrain

Interior Passenger and Light Truck Tires

Commercial Vehicle Tires Tires

ContiTech

by Division (in bn €) (in bn €)

26.0

30.5

32.7 33.3

34.5

22% 21% 21% 22% 22%

21%

20%

20% 20% 20%

22%

22% 5%

18% 19%

19% 19% 19%

29% 28% 28% 6%

12%

12%

11% 11%

11%


I. Continental at a Glance Number of Employees

13 1 Since 2012 reported as Tires.

2010 2011 2012 2013 2014

Germany Rest of Europe NAFTA Asia Other markets

by Market

31% 30% 29% 28% 28%

32% 31% 31% 31% 32%

14% 15%

16% 16%

16% 16%

18% 18%

19%

19%

7%

6% 6%

6%

5%

148,228

163,788 169,639

177,762

189,168

2010 2011 2012 2013 2014

Chassis & Safety Powertrain

Interior Passenger and Light Truck Tires

Commercial Vehicle Tires Tires

ContiTech

148,228

by Division

21% 20% 20% 21% 20%

18% 19%

18% 18% 18%

20%

19% 20% 19%

19%

19%

19% 25%

25% 25%

17%

17% 17%

17%

18% 163,788

169,639 177,762

189,168

5%

6%

1

1 1

14

Topics







Market Data VII. 75




Glossary XI. 171


II. Continental Strategy Systematic Entrepreneurial Approach

15

Affordable Cars –

For global mobility

Safety –

For safe mobility

Information –

For intelligent driving

Environment –

For clean power

Value Creation

is Our Driving

Force

Great people

culture

Value

creation

Regional

sales

balance

Technological

balance

In the market

for the market

Balanced

customer

portfolio

Top

market

position

16

,27

2

16

,62

7

16

,93

4

16

,95

4

17

,01

4

17

,00

8

16

,91

5

16

,80

4

16

,62

5

16

,52

2

16

,53

6

16

,72

7

16.8% 17.6% 17.9% 18.1%

18.8% 18.5% 18.6%19.4% 19.4% 20.6% 20.8%

19.3% 20.0%

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

2012 2013 2014

trailing OA (mn €) trailing ROCE (%) trailing ROCE (%) applying IAS 19 (rev. 2011)

II. Continental Strategy – Value Creation Sustainable Value Creation

16

1 2 2


II. Continental Strategy – Value Creation Cost Consciousness – Production in Best-Cost Countries1

17

69% 61%

96%

51%

64% 73%

63%

96%

51%

61%

Rest of world

2011 2014

36%

22%

36%

70%

31% 34%

27%

42%

77%

36%

Europe

Chassis & Safety2 ContiTech2 Interior2 Tires3 Powertrain2

Chassis & Safety2 ContiTech2 Interior2 Tires3 Powertrain2

II. Continental Strategy – Regional Sales Balance Balanced Distribution of Sales

18

2014 Target(medium and long term)

≤ 45%

Europe

and other countries20% Asia

North and

South America26%

Europe

and other countries 54% ≥ 30%

≥ 25%


II. Continental Strategy – Top Market Position Top Position for the 20 Fastest Growing Automotive Technologies through 2020

19

CAGR1

High growth

25% - 100%

Medium growth

15% - 24%

Low growth

5% - 14%

Examples of technologies

A High growth Gasoline particulate filters

Switchable coolant and oil pumps

Lane departure warning

B Medium growth Turbo chargers

Start-stop systems

Battery propulsion systems

C Low growth Elecric power steering

Touch screens

Adaptive cruise control

II. Continental Strategy – In the Market for the Market Continental Corporation Worldwide

20

Locations Employees

86

35,358Asia

4

244Australia

3

1,592Africa

160

112,883Europe

47

31,414North America

17

7,677South America


2014 Target

Other sectors and end customers27%

Original equipment manufacturing (OEM)73%

40%

60%

II. Continental Strategy – Balanced Customer Portfolio Sales OE Automotive/Non-OE Automotive

21

100%

99%

89%

29%

58%

Chassis & Safety

Powertrain

Interior

Tires

ContiTech

OE Non-OE

2014: Sales OE Automotive/Non-OE Automotive by Division

II. Continental Strategy – Technological Balance Technological Balance

22

Compound annual growth rate

Introduction Growth Maturity Saturation

≥ 5 - 10% 0 - 10% ≤ 0% Time

Technology life cycle Technology portfolio share of sales in %


II. Continental Strategy – Great People Culture The Same Values Worldwide for a Shared Corporate Culture

23

Freedom

To ActTrust

Passion

To Win

For

One Another

24

Topics







Market Data VII. 75




Glossary XI. 171


III. Continental Megatrends We Shape the Megatrends in the Automotive Industry

25

Information – For intelligent driving

Affordable Cars – For global mobility

Environment – For clean power

Safety – For safe mobility

III. Continental Megatrend: Environment Initiatives in EU, USA and Japan – For Cleaner Mobility

26

EU aims to reduce CO2 emissions by

improvements in vehicle technology:

› For passenger cars, EU target average

CO2 emissions at:

› 130 g/km* from 2015

› 95 g/km from 2020

› For passenger cars, excess emissions

premiums are implemented in steps from

2012 until 2015 (65% ... 100% of fleet are

taken into account)

› For light commercial vehicles, EU

targets average CO2 emissions at:

› 175 g/km from 2017

› 147 g/km from 2020

EU1

1 Regulations (EC) No. 443/2009 and (EU) No. 510/2011.

2 US Federal Register (May 7, 2010): Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule.

3 US Federal Register (Oct. 15, 2012): 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; Final Rule.

4 Refers to “Act on the Rational Use of Energy” of the Ministry of Economics, Trade and Industry (METI) and Ministry of Land, Infrastructure, Transport and Tourism (MLIT).

5 NHTSA: National Highway Traffic Safety Administration.

6 EPA: Environmental Protection Agency.

7 CAFE: Corporate Average Fuel Economy.

8 ECCJ: Energy Conservation Center Japan.

Emerging markets likely to follow Europe/USA/Japan on fuel efficiency standards

NHTSA5 and EPA6 to establish a National

Fuel Efficiency Policy (NFEP):

› For passenger cars and light trucks

combined, CAFE7 set to increase to:

› 35.5 mpg* by 2016

› 54.5 mpg by 2025

USA2,3

ECCJ8 aims to improve fuel efficiency

standards by 23.5% by 2015 vs. 2004:

› For passenger cars and light duty trucks

(<3.5 metric tons), the aim is to increase

average level of fuel efficiency to:

› 16.8 km/l* by 2015

Japan4

Test cycle: CAFE (Corporate Average Fuel Economy)

* Miles per gallon

Test cycle: JC08 (Japanese Cycle)

* Kilometers per liter

Test cycle: NEDC (New European Driving Cycle)

* Gram per kilometer


III. Continental Megatrend: Environment Initiatives for Cleaner Mobility in Various Markets

27

60

90

120

150

180

210

240

270

300

2000 2005 2010 2015 2020 2025

US-LDV US-Car EU Japan China South Korea

Gram CO2 per kilometer, normalized to NEDC1

Source: International Council on Clean Transportation(ICCT) as at February 2015.

Due to different test procedures (U.S. CAFE, NEDC, JC08 and WLTC) the ICCT updated the set of conversion factors. 1 New European Driving Cycle. 2 US light-duty vehicles include light commercial vehicles.

3 In 2020 mandatory for 95% of the OEMs’ fleets. As of 2021 mandatory for 100%.

4 China’s target reflects a gasoline fleet scenario. If other fuel types are included, the target would be lower.

Solid dots and lines: historical performance and enacted targets

Solid dots and dashed lines: proposed targets and studies

2 3 4

III. Continental Megatrend: Environment Today’s Vehicle Emissions vs. Future Targets

28

40

60

80

100

120

140

160

180

200

220

240

900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000

GASOLINE HYBRID DIESEL

Emissions [g CO2/km]

Weight [kg]

2015

EU Target

2020/21

EU Target

Source: http://www.heise.de/autos/neuwagenkatalog/ as at July 09, 2014.


III. Continental Megatrend: Environment Engine Development Roadmap

29

World – Combined View

120

100

80

60

40

20

0

2025 2020 2015

PFI (NA)

GDI (TC)

PFI (TC)

GDI (NA)

CNG/LPG

Hybrid

EV

Diesel

[mio-units]

21%

1%

22%

2%

17%

10%

23%

3%

1%

10%

2%

19%

11%

24%

4%

30%

50%

3%

14%

9%

20%

1%

Source = IHS and Continental estimates Q3/2014.

EV = Electric Vehicle; Hybrid = Plug In Hybrid Electric Vehicle, 48 V and Full/Mild Hybrid Electric Vehicle; CNG/LPG = Compressed Natural Gas/Liquefied Petroleum Gas;

GDI = Gasoline Direct Injection; NA = Natural Aspirated; TC = Turbo Charged; PFI = Port Fuel Injection

3%

2 3

4

6

6

5

III. Continental Megatrend: Environment Reduction of CO2 Emissions1: Solutions by Continental

30

1 Saving potential compared with gasoline direction injection Euro 5.

2 Selective Catalytic Reduction.

3 DEKA injector for diesel dosing into exhaust gas.

4 Advanced Energy Supply.

5 Tire Pressure Monitoring System.

6 Power-On-Demand.

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

Energy management (AES )

Tires (rolling resistance, TPMS )

Double clutch transmission (DCT)

Transmission (POD )

Energy management (POD ) min max

20-25%

15-20%

10-20%

5-12%

2-5%

2-5%

3%

3%

1-2%

5%

~15%

10-15%


31

115

95

125

120

130

0

105

110

100

Target Powertrain

Electrification

Vehicle

Optimization

95

Drivetrain

Optimization

Efficient

Combustion

EU Average1

127

"Eco Innovations"

incl. "Connected

Energy

Management"

[g CO2/km]

≤ 5%

≤ 10%

≤ 3%

≤ 7%

≤ 7%

1 EU Market Average in 2013.

Source: European Environment Agency: Monitoring CO2 emissions from new passenger cars in the EU: Summary of data for 2013 (April 2014).

III. Continental Megatrend: Environment How to Reach CO2 Target of 95g/km

III. Continental Megatrend: Information Interior: Examples of Market-Specific Initiatives and Projects

32

› Tire pressure monitoring

system (TPMS)1,2,3,4,13,14

› Electric vehicle market

push5,6

› E-call5,7,15,16,17

› Hands-free telephony8

› Stolen vehicle tracking9

› Rear detection system10

1 Regulation (EC) No. 661/2009 for Passenger Vehicles.

2 Federal Motor Vehicle Safety Standard No. 138 of NHTSA for passenger vehicles.

3 Source: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in Japan.

4 Korean Motor Vehicle Safety Standard (KMVSS) - MLTM Notification 2010-631.

5 Directive 2010/40/EU of the European Parliament and of the Council of July 2010.

6 White Paper of the EC;COM(2011) 144 final.

7 Recommendation adopted by the European Commission September 2011.

8 Several national laws and regulations in Asia/ Europe/ NAFTA/ Africa.

› Digital tachograph (DTCO)11

› Electronic onboard recorder

(EOBR)12

› Intelligent transport

systems (ITS)5,6

9 CONTRAN 245/2007 - no final rule in place.

10 For single-unit trucks. FMVSS 111 - no final rule in place.

11 Proposed revision of Regulation (EEC) No. 3821/85.

12 FMCSA Proposed rule 395 January 2011 / President signed legislation

MAP21 in July 2012. 13

House Bill for Commercial Vehicle Safety - H.R. 4348 29.06.2012 TPMS for

Motorcoaches. 14

DG CLIMA 2013 study on TPMS Cost / Benefit for Commercial Vehicles. 15

Russia ERA specifications - no final rule in place. 16

European Commission Brussels, C(2012) 8509 final. 17 Decision of the European Council on March, 2, 2015.

Environment Safety Information

Doing more.

For intelligent driving. Doing more.

For safe mobility. Doing more.

For clean power.

European Projects:

ELVIRE = Electric vehicle communication to infrastructure, road services and energy supply.

ID4EV = Intelligent dynamics for fully electric vehicles.

HeERO = Harmonized eCall European pilot.

ERTICO = European road transport telematics implementation coordination organisation.

Sim-TD = Safe and intelligent mobility – field test Germany.


III. Continental Megatrend: Information Interior: The Car Will Be Connected to Its Environment

33

Our Mission: Information management in the vehicle for driver & passengers – a key to realize “Clean Power” and “Zero Accidents”.

With our intuitive and ergonomic human-

machine interface (HMI), we capture

commands, prioritize and present information.

Driver & Passengers Devices Infrastructure Other Vehicles

We add new functions by providing a connection to the outside world as well as value-added services.

We manage and optimize the information flow by systems integration of components.

Vehicle

III. Continental Megatrend: Information Interior: Product Highlights for Intelligent Mobility

34

All at lower cost

We inform you well

We connect

Existing solutions:

› Freely programmable clusters

› Head-up displays

› Multimedia and telematics platforms

› Tachographs & fleet management systems

› Tire information systems

Innovations:

› Augmented reality head-up displays

› Intelligent antenna modules

› Connected gateways

› Virtual key, NFC

› eHorizon

› LED lighting

› Services and apps for Intelligent Transportation Systems (ITS)


III. Continental Megatrend: Safety Market-Specific Initiatives – Towards Safer Mobility

35

› Electronic stability control (ESC)

› mandatory as of Nov. 2011 for all new types of vehicles

› mandatory as of Nov. 2014 for all new vehicles1

› Tire pressure monitoring system (TPMS)

› mandatory as of Nov. 2012 for all new types of passenger cars

› mandatory as of Nov. 2014 for all new passenger cars2

› Advanced emergency braking system and lane departure warning

› mandatory as of Nov. 2013 for all new types of heavy commercial vehicles and buses

› mandatory as of Nov. 2015 for all new heavy commercial vehicles and buses2

› Brake assist system

› mandatory as of Nov. 2009 for all new types of passenger cars

› mandatory as of Nov. 2011 for all new passenger cars3

› Motorcycle anti-lock brake system (ABS)

› mandatory as of Jan. 2016 for all new types of vehicles

› mandatory as of Jan. 2017 for all new vehicles4

EU


› mandatory since 2011 for all new light vehicles5


› mandatory as of Sept. 2007 for all new light vehicles6

› Rear Visibility

› mandatory as of May 1, 2016 with a phase in schedule for all vehicles and low-speed vehicles with a with a gross vehicle weight rating (GVWR) of 10,000 pounds or less12

USA


› mandatory as of Oct. 2012 for all new types of passenger cars

› mandatory as of Oct. 2014 for all new passenger cars9

› Advanced emergency braking system and lane departure warning

› expected to be mandatory for all new heavy commercial vehicles and buses following the EU decision10

Japan

1 Regulation (EC) No. 661/2009; refers to all vehicles of category M and N.

2 Commission Implementation Regulations for (EC) No. 661/2009: 347/2012 (Advanced Emergency Braking Systems); 351/2012 (Lane Departure Warning).

3 Regulation (EC) No. 78/2009; refers to passenger cars for maximum 8 passengers plus driver.

4 COM(2010) 542 from Oct. 2010. ABS mandatory for motorcycles with engine capacity of > 125 ccm. ABS or combined brake system (CBS) mandatory for engine capacity

of ≤125 ccm. 5 Federal Motor Vehicle Safety Standard (FMVSS) No. 126 of the National Highway Traffic Safety Administration (NHTSA); refers to vehicles with a gross vehicle weight of ≤4.536 t.

6 Federal Motor Vehicle Safety Standard (FMVSS) No. 138 of the National Highway Traffic Safety Administration (NHTSA); refers to vehicles with a gross vehicle weight of ≤4.536 t.

7 CONTRAN 312/2009.

8 Russia Decree 720/2009; refers to passenger cars, buses with a weight of ≤ 5 t and light trucks with a weight of ≤ 3.5 t.

9 Source: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in Japan.

10 Japan expected to adopt EU regulation. Final decision on timing pending.

11 G/TBT/N/KOR/286 and MLTM Notification 2010-631 (Ministry of Land, Transport and Maritime Affairs).

12 Federal Motor Vehicle Safety Standards; Rear Visibility; Final Rule; 49 CFR Part 571.


› mandatory as of Jan. 2012 for all new light vehicles11


› mandatory as of Jan. 2013 for all new passenger cars11

Brazil

› Anti-lock brake system (ABS)

› mandatory as of Jan. 2014 for all new passenger cars, after phase-in which began in 20107

South Korea

Russia


› mandatory as of Jan. 2014 for all new types of light vehicles

› mandatory as of Jan. 2016 for all new light vehicles8


› mandatory as of Jan. 2016 for all new types of light vehicles8

Other emerging markets likely to follow EU/USA on ESC regulation

Region of

the Americas

African

Region

Eastern

Mediterranean

Region

South-East

Asia Region

Western

Pacific Region

European

Region

15.8

III. Continental Megatrend: Safety Road Traffic Deaths per 100,000 Inhabitants by Region1

36

2009 2013

32.1

24.6

2009 2013

2009 2013

32.0

21.3

2009 2013

16.6 18.7

15.6

18.3

2009 2013

2009 2013

13.3

10.3 Total road traffic deaths 20131: 1.24 mn

16.1

Source: Global Status Report on Road Safety, World Health Organization (WHO) 2009 and 2013. 1 Data based on framework created by the World Health Organization (WHO) for estimating road traffic mortality.


III. Continental Megatrend: Safety Global Development of Active Safety Regulations & Ratings

37

ESC = Electronic Stability Control; FCWS = Forward Collision Warning System; LDWS = Lane Departure Warning System; AEBS = Advanced Emergency Braking

System; CIBS = Crash Imminent Braking System, DBS = Dynamic Brake Support, RVS = Rearview Video System, SAS = Speed Assist System, RDP = Road

Departure Protection; NCAP = New Car Assessment Program; EC = European Commission; NHTSA = National Highway Traffic Safety Administration (USA);

MLIT = Ministry of Land, Infrastructure, Transport and Tourism (Japan); MLTM = Ministry of Land, Transport and Marine Affairs (South Korea), IIHS = Insurance

Institute for Highway Safety

decided

Expected by

Continental

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

AEB & LDWS Commercial vehicles & buses

AEB & LDWS Commercial

vehicles & buses

ESC Light vehicles

ESC Passenger vehicles

FCW/LDWS

AEB & LDWS NCAP star-rating

AEB & LDWS NCAP star-rating

RVS

2016 (10%) -

2018 (100%)

RVS

CIBS & DBS

V2X Device AEB

ESC Passenger

vehicles

SAS & AEB

Pedestrian NCAP star-rating

RDP & AEB

Intersection NCAP star-rating

Legis

lation

Consum

er

Test

Legis

lation

Consum

er

Test

AEB Passenger vehicles

› Adult Occupant Protection

› Frontal impact

› Car-to-car side impact

› Pole side impact

› Whiplash

III. Continental Megatrend: Safety Euro NCAP 5-Star Rating Requirements

38

› Pedestrian Protection › Child Occupant Protection

› Safety Assist

› Electronic Stability

Control

› Seat belt reminders

› Speed assistance

system

› Traffic Sign Recognition will be included in the rating scheme

by 2016 at the latest

› Since 2014 autonomous emergency braking systems are

included in the rating scheme. They are tested in three

categories

› Pedestrian AEB › Interurban AEB › Urban AEB

Sources: Homepage Euro NCAP and AutoMotorSport – “Sind unsere Autos wirklich sicher” – July 11, 2012.

Testing categories

Full system or parts are produced by Continental


III. Continental Megatrend: Safety History and Roadmap for Accident-Free Driving

39

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

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

2015 2020 > 2025

AEB = Automatic Emergency Brake

ACC = Adaptive Cruise Control

III. Continental Megatrend: Safety Future Automotive Trends

40


Environment Vehicle

III. Continental Megatrend: Safety Automated Driving Requires Systems Expertise

41

Sales of advanced driver assistant systems grew by ~35% to more than €500 mn in 2014.

Sales will grow to €1 bn in 2016 and to €1.5 bn by 2018. !

Driver

Radar

Camera

Lidar

Ultrasonic sensors

Digital maps

Cooperative cars

Motor

Brake

Sensors

E/E architecture/bus

Transmission

Actuators

Attention management Interior camera Speech recognition Augmented reality

head-up display

Backend !

= Continental portfolio

! = Covered by cooperation

III. Continental Megatrend: Safety World Market Forecast1 for Driver Assistance Systems

42

World Market for

Driver Assistance Systems (USD bn)

Products of Continental’s ADAS business unit

Products of other Continental business units

1 Source: Strategy Analytics, November 2013. 2 System as defined by Strategy Analytics incl. wiring, connectors, displays etc.

6.0

18.8

2.5

5.6

9.5

2013 2016 2020

Market acc. Strategy Analytics

ADAS market (BS, DW, LDWS)

12.2

Selected

System

System

Definition2

Blindspot (BS)

Covers the blindspot between coverage offered by

the central rear view mirror and the door-mounted

mirrors

Distance Warning

(DW)

Covers all distance warning systems that form the

basis of either intelligent cruise control or collision

avoidance systems

Lane Departure

Warnings (LDWS)

Warns the driver if (s)he may be unintentionally

driving out of the desired lane

Drowsiness

Monitor

Warns the driver that (s)he has either fallen

asleep, or is in danger of doing so

E-Call Telematics Automatically transmits an emergency call in case

of an accident

Head-Up Display

(HuD)

Displays most important driver information in the

windshield of the vehicle

Parking /

Reversing

Uses Ultrasonic and Radar Sensors as well as

camera based parking aids

Night Vision Improves driver’s night vision by using any form of

imaging system (normally viewed on a HuD)


III. Continental Megatrend: Safety Winter Tire Regulations1

43

Austria

Estonia

Finland

Germany

Europe: Winter tires mandatory or situationally mandatory

Latvia

Lithuania

Romania

Sweden

Slovakia

Slovenia

November 1 to April 15 when

winter weather conditions prevail

December 1 to end of February



November 1 to April 1

December 1 to March 31 when


Mandatory when winter weather

conditions prevail November 1 to March 31

November 15 to March 15 when


The snowflake symbol: A tire can be marked with this symbol (In addition to the M+S2 marking), if its ABS-braking

performance on snow exceeds that of a standard reference tire by a certain margin.


roads are snowy/icy

Norway

Mandatory when winter

weather conditions prevail;

15 November – 31 March for trucks

Europe: Winter tires partly mandatory

Czech Republic

November 1 to March 31

France

Mandatory on certain roads – marked with signs

Italy Switzerland

Drivers may be held liable if they cause an accident with

summer tires mounted when winter weather conditions prevail

Canada: Winter tires partly mandatory

1 Source: Continental AG and websites of country ministries, automobile associations and ETRMA (European Tyre and Rubber Manufacturers' Association).

2 Mud + snow. The M+S marking is given by the manufacturer and is not linked to a performance definition.

Mandatory in Québec December 15 to March 15;

mandatory on certain roads in the mountains of Canada when winter weather conditions prevail Canada

Turkey

December 1 to April 1 for

commercially used vehicles

Bosnia and Herzegovina

November 15 to April 15 when


Luxembourg


weather conditions prevail

Macedonia



Serbia


Russia

1 December – 28 February

Iceland


Spain

Bulgaria


weather conditions prevail

Ukraine

November 1 to March 31

III. Continental Megatrend: Safety and Environment Tire Labeling Initiatives in Europe, USA, Japan, South Korea and Brazil1

44

1 Similar initiatives in Australia, China, Gulf countries, Israel, South Africa.

2 Regulation (EC) No.1222/2009 of the European Parliament and of the

Council and Commission Regulations (EU) No. 228/2011 and (EU)

No.1235/2011. Also implemented in Norway, Switzerland and Turkey.

› Mandatory as of

November 2012

› Applies to all tires sold.

Information to be shown:

rolling resistance

(fuel efficiency),

wet grip

(braking performance on

wet roads) and

noise performance

(external rolling noise).

Either directly on the tire

by means of a label or in

some other way

› Self-certification policy

› EU member states are

responsible for market

surveillance

› Final decision pending

› The NHTSA Tire Fuel

Efficiency Consumer

Information Program

proposes to inform

consumers about the

effect of tires on fuel

efficiency, safety,

and durability

› The program aims to

implement a national

tire fuel efficiency

rating system for

replacement tires, with

the information

provided to consumers

at the point of sale and

online

Label proposed by NHTSA3

› Voluntary since 2010

› Introduced by JATMA4

› Applies to replacement

summer tires for

passenger cars;

includes information on

rolling resistance and

wet grip performance

› Tires with a grading of A

and above for rolling

resistance performance

are defined as “fuel

efficient tires” and are

marked with an

additional symbol (the

lower of the symbols

above)

› Mandatory as of

November 2012

› Introduced by MKE5

› Applies to all tires sold in

South Korea (OE and

replacement) for

passenger cars and light

trucks; includes

information on rolling

resistance and wet grip

performance

› The label has to be

attached to the tread of

each tire; for OE tires the

information has to be

provided in the car

manual

› Registration of all

products required

EU2 USA3 Japan4 South Korea5 Brazil6

› Available as of April 2015

› Mandatory as of

October 2016

› Introduced by INMETRO6

› Applies to all tires sold

(with certain exceptions).

Includes information on

rolling resistance, wet

grip and noise

performance

› Certification to be carried

out by a product

certification body

accredited by INMETRO

3 Source: National Highway Traffic Safety Administration (NHTSA).

4 Source: Japan Automobile Tyre Manufacturers Association (JATMA).

5 Source: South Korean Ministry of Knowledge Economy (MKE).

6 Source: National Institute of Metrology, Quality and Technology (INMETRO).


http://en.wikipedia.org/wiki/File:Flag_of_Turkey.svg

http://en.wikipedia.org/wiki/Flag_of_Bosnia_and_Herzegovina

http://en.wikipedia.org/wiki/Flag_of_Luxembourg

http://en.wikipedia.org/wiki/Flag_of_the_Republic_of_Macedonia

http://en.wikipedia.org/wiki/Flag_of_Serbia

http://en.wikipedia.org/wiki/Flag_of_Russia

45

Topics







Market Data VII. 75




Glossary XI. 171

IV. Continental Vision Chassis & Safety Vision

46


IV. Continental Vision Powertrain Vision

47

Clean Power

IV. Continental Vision Interior Vision

48

“Always On” – Tomorrow's vehicle is always connected, user friendly, comfortable and intelligent.


IV. Continental Vision Tires: Key Initiatives 2001 – Vision 2025

49

Create Value

› Global footprint and business optimized

› Strong cost focus

› Global presence of CVT sustained (SAM/APAC)

› Turnaround of PLT business in NAFTA succeeded

› Worldwide technology gap to competition closed

Stage 1: 2001 – 2010

Sustain Value

› Accelerate global growth (focus on BRIC countries)

› Leverage cost position

› Improve technology position to establish among “Best In Class”

Stage 2: 2011 – 2015 Stage 3: 2016 – 2025

Continuous value creation is our driving force!

Enhance Value

› Balanced global footprint

› Benefit from excellent cost position

› Achieve podium position in technology worldwide

IV. Continental Vision Tires Vision 2025 – Towards a more Balanced Footprint

50

Passenger & Light Truck Tires1 Truck Tires1 Specialty – Commercial2

Specialty – Consumer2

EMEA APAC The Americas 1 Based on unit sales.

2 Based on net sales.

Note:

Inner circle as of 2012.

Outer circle vision 2025.

2025

2025

2025 2025

5%

74%

21%

46%

4%

50%

7%

72%

21%

3%

16%

81%


IV. Continental Vision ContiTech Vision

51

ContiTech is the specialized company for rubber and plastic technology

with a worldwide leading position to develop, produce and market

high-tech products and systems for automotive and industrial applications

in decentralized units with full profit responsibility.

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

Components for

engine downsizing &

emissions reducing

Drive System for eBikes and pedelecs

Climate-friendly printing blankets

Printing technology for printed

electronics/solar cells

Added value through

functional integration

52

IV. Continental Vision ContiTech: Engineering Next Level


53

Topics







Market Data VII. 75




Glossary XI. 171

V. Sustainability at Continental Our Policies and Guidelines

54 1 “Environment”, “Security, Safety” and “Health”.

Code of Conduct – personal

ethics, conflicts of interest

OUR BASICS – the

guidelines, codex and basic

principles of our business

activities

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

ESH1 Policy – implements

worldwide the responsibility

for protecting the

environment

Environmental Responsibility Social Responsibility Corporate Governance

OUR BASICS Our corporate guidelines


2,422 2,596

2,748

669 802 797 829

2011 2012 2013 2020

Energy consumption1

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

1,463 1,605 1,617

394 485 493 488

2011 2012 2013 2020

Water consumption1

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

V. Environmental Responsibility Corporate Environmental Key Performance Indicators

55

1 Changes to previous figures are due to changed in the data collection. 2 Continental targets. 3 Independently verified by KPMG.

252 265

339

84 82 102 83 84 85 84 90

2011 2012 2013 2020

Waste generation (1000 t)

Specific waste generation (100kg/Mio € adjusted sales)

Waste recovery (%)

495 592 659 613

1,780 1,861 1,857

753 753 759

2011 2012 2013 2020

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)

2 2

2 2

Waste production1

CO2 Emissions 1/3

V. Environmental Responsibility Emission Reduction - Electrification Tailored to Fit (48-Volt Eco Drive)

56 1Measurement based on NEDC driving cycle compared with a VW Golf VI BlueMotion, 4-cylinder gasoline engine, 1.2-liter TSI, 77 kW.

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

Start-Stop and voltage regulation + Enhanced Start-Stop function + Recuperation

48-Volt Eco Drive – CO2 reduction

48V / 12V

DC / DC Converter

Total CO2 reduction: – 13.0%1

CO

2 e

mis

sio

n

– 7.0%

– 0.6% – 5.4%

E-Machine with

integrated

Inverter

Objective:

Cost-efficient hybrids for

the mass market Solution:

48-Volt Eco Drive

› First SOP 2016/2017 › Fuel-saving functions

that are found only in

more expensive mild

hybrids of around

120 volts › Around 13% less fuel

consumption › No need to interfere

with the engine-trans-

mission configuration.

Technology that is

feasible even for

smaller cars › Low voltage means that

no special safety pre-

cautions are necessary


V. Environmental Responsibility Emission Reduction – Electrification Tailored to Fit

57

EV 50 – 90 100 EMR3 with Integrated

Inverter

PHEV 50 – 90 50 - 75 EPF 2.8 / EPF Gen. 4

Single and Dual

Inverter Technology

HEV 20 – 40 20 - 30 EPF 2.8 / EPF Gen. 4

Single and Dual

Inverter Technology

48V 6 – 20 10 - 20 Air cooled: < 10kW

Water cooled: >10kW

12V < 5 < 10 Advanced engine

Stop/Start @ low cost

E-Motor

Power A B C D E

CO2 Saving

Potential1

50 - 90kW

50 - 90kW

20 - 40kW

6 - 20kW

< 5kW

1 Saving Potential Tank-to-Wheel in NEDC.

100%

50 - 75%

20 - 30%

10 - 20%

< 10%

Vehicle Segments

V. Environmental Responsibility Research in Alternative Raw Materials for Tire Production

58

› 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.


V. Social Responsibility – Responsible Employer Equal Opportunity

59 Source: Based on information in the Continental AG Annual Report 2014.

Workforce Diversity

The Continental team is made up of people with different

backgrounds, cultures, religions, genders and ages. The

diversity of different mindsets and points of views, skills and

experiences makes us strong.

To promote diversity within the company, we focus on two

key areas:

› A balanced mix of men and women

› Internationality

Demographics Program

A comprehensive concept designed to address the far-

reaching changes as a result of the expected demographic

trend focuses on four topics:

› Workplace design

› Health maintenance for longer employment

› Targeted qualification measures

› Motivation for a longer working life

Award of the Apriori-business solution AG for the

Continental “Demography-Management”

V. Social Responsibility – Social Commitment UERÈ Project in Rio de Janeiro, Brazil

60

› Since 2012 Continental has committed itself to the

UERÈ education project for children and young people

aged 4 to 18 from the slum district (known as ‘Favelas’)

of Baixa do Sapateiro in Rio de Janeiro.

› It is funding an e-learning module to raise the profile of

the UERÈ de Mello method and also providing teaching

staff and equipment for a children’s football project.

› UERÈ founder and principal Yvonne Bezerra de Mello

explains the UERÈ de Mello method in her own words:

“We tailored our concept quite specifically to the abilities

and needs of our children. For example, we almost

exclusively offer interactive learning modules with a

duration of 20 minutes so that children who suffer from

learning blocks as the result of some lasting trauma can

also take in the content. We help all UERÈ children to

become responsible citizens and our aim is to give them

prospects so that they can lead worthwhile lives”.

› The Brazilian Government has awarded Bezerra de Mello

the “Medaille Tiradentes” in June 2013 for her great

achievements with this project.


› Continental is a participant of the United Nations Global

Compact. We have thus committed ourselves to its ten

principles in the areas of human rights, labor,

environment and anti-corruption.

V. Social Responsibility Corporate Memberships (1)

61 Source: www.vielfalt-als-chance.de (German Federal Government Commissioner for Migration, Refugees and Integration); luxemburger-deklaration.de. 1 European Network for Workplace Health Promotion.

› The World Business Council for Sustainable

Development (WBCSD), founded in 1995, is a

frontrunner and catalyst on the path to sustainable

development.

› The Charter of Diversity recognizes diversity as an

opportunity. The signatory companies commit to

diversity, fairness and mutual respect. The aim is to

create a working environment that is free of prejudice

and discrimination.

› The Luxembourg Declaration on Workplace Health

Promotion (WHP) promotes health and occupational

safety in the companies of the member states of

ENWHP1. The declaration encourages members to

attach greater importance to WHP.

V. Social Responsibility Corporate Memberships (2)

62

1 150 top capitalized companies in the Economic and Monetary Union market which are eligible investments.

› Since June 2013 Continental has been rated ‘Prime’

by oekom research. Based on the oekom ratings,

more than 500 bn euros is invested worldwide by

sustainability-oriented investors.

› The European Road Safety Charter is an appeal

and impetus for all groups in society to make a

concrete contribution to improving traffic safety in

Europe. The goal is to reduce the number of

fatalities on the roads of the European Union (EU)

by 2020.

› The Carbon Disclosure Project (CDP) is a non-profit

organization that aims to create more transparency

regarding environmentally damaging emissions.

Continental has been answering CDP’s extensive

questionnaire since 2009. In 2012, we were included in

the Carbon Disclosure Leadership Index.

› ECPI has been a leading rating and index company

dedicated to ESG Research since 1997. Continental

is a constituent of the ECPI Ethical EMU Equity1 as

one of the Global Equity Indices.


V. Social Responsibility Health and Occupational Safety

63

2 Number of accident-related hours lost worldwide

per million hours worked.

3 Number of work-related accidents worldwide with one or more days lost per

million hours worked.

Our specialist department HISS (“Health, Industrial

Hygiene, Safety & Security”) sets protection

standards, which apply across the entire

Corporation.

942 845

729 638

574 472

5.7 5.0 4.6 4.2 3.6 3.3

0

2

4

6

8

10

12

14

16

18

20

0

100

200

300

400

500

600

700

800

900

1000

2008 2009 2010 2011 2012 2013

Accident rate3

Hours lost due to accidents2

These standards are the foundation for safety at

work, secure production plants and processes, and

reflect our responsibility to our employees

and to the environment.

1 Paid and unpaid absences due to sickness in relation to the

contractual working hours in percent.

Absences due to sickness1

4.0 4.0

3.8

3.5 3.5 3.5

2008 2009 2010 2011 2012 2013

20 members in accordance with the

Mitbestimmungsgesetz (German Co-determination

Act):

10 elected by ASM

10 elected by employees of Continental AG and its

subsidiaries who are employed in Germany

V. Corporate Governance Corporate Bodies

64

Shareholders exercise their voting rights (1 share = 1 vote)

Chairman’s Committee

& Mediation Committee

9 members

Audit Committee

Nomination Committee

Annual Shareholders’ Meeting (ASM)

Chairman of the

Executive Board

Solely responsible for the management

of the company

appoints, supervises, advises

Chairman of the

Supervisory Board

Approval of certain management decisions

of material importance to the company

reporting election / ratification

reporting

Corporate Governance is the responsibility of the company’s corporate bodies. Continental AG’s Corporate Governance

Principles are closely modeled on the recommendations and suggestions of the German Corporate Governance Code.

ratification taking into account resolutions of ASM

Executive Board

Supervisory Board

Source: Based on information in the Continental AG Annual Report 2014.


65

Topics







Market Data VII. 75




Glossary XI. 171

VI. Continental Corporation Key Consolidated Figures1

66

(in mn €) 2012 2013 2014

Sales

32,736.2

33,331.0

34,505.7

EBITDA 4,967.4 5,095.0 5,133.8

in % of sales 15.2 15.3 14.9

EBIT 3,186.2 3,263.7 3,344.8

in % of sales 9.7 9.8 9.7

EBIT adjusted2 3,737.5 3,874.5

in % of sales2 11.2 11.3

Operating assets (average) 16,953.8 16,804.0 16,726.5

ROCE 18.8 19.4 20.0

R, D & E expenses 1,744.8 1,878.4 2,137.7

in % of sales 5.3 5.6 6.2

Capex3 2,019.4 1,981.1 2,045.4

in % of sales 6.2 5.9 5.9

Depreciation & amortization4 1,781.2 1,831.3 1,789.0

in % of sales 5.4 5.5 5.2

thereof impairment5 49.9 126.7 178.9

1

IAS 19 (rev. 2011) applied starting 2013. The 2012 figures have been restated accordingly. 2

EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 3

Capital expenditure on property, plant and equipment, and software. 4

Excluding impairment on financial investments. 5

Impairment also includes necessary reversals of impairment losses.


8,3208,187 8,134 8,096 8,033

8,5418,350 8,407 8,390

8,5288,670

8,918

796980 1,022

939 953 1,005 962 954

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14

Sales (mn €) Adj. EBIT (mn €)

VI. Continental Corporation Sales and Adjusted EBIT1 by Quarter

67

FY Sales €32,736 mn



Adj. EBIT1 €3,875 mn

1


Adj. EBIT1 €3,738 mn

VI. Continental Corporation Key Historical Financials and Credit Metrics - IAS 19 (rev. 2011) applied6

68

1 Amounts shown may contain rounding differences.

2 Adjusted EBITDA from 2009 on as defined in syndicated loan but IAS 19 (rev. 2011) not applied in 2012.

3 Includes changes in inventories, trade accounts receivable, trade accounts payable and discounted notes.

4 Includes dividends received, income from at-equity accounted investees and other investments incl. impairments, gains and losses

from disposals, other non-cash items as well as changes in pension and similar obligations (including effects from transactions

regarding contractual trust arrangements [CTA] in 2009) and in other assets and liabilities. 5 Adj. EBITDA to net cash interest paid.

6 IAS 19 (rev. 2011) applied starting 2013. The 2012 figures have been restated accordingly.

(in mn €)1

2009 2010 2011 2012 2013 2014

Consolidated statement of cash flows

Adjusted EBITDA2

2,354 3,662 4,247 4,822 5,094 5,318

Reported EBITDA 1,591 3,588 4,228 4,967 5,095 5,134

Net cash interest paid -727 -703 -662 -575 -534 -158

Tax paid -205 -493 -466 -684 -805 -775

Change in net working capital3

595 -497 -556 564 -4 -207

Other 4

1,173 -46 -256 -488 -30 175

Cash flow arising from operating activities 2,427 1,849 2,289 3,785 3,722 4,168

Cash flow arising from investing activities -787 -1,282 -1,798 -2,132 -1,904 -2,153

- thereof capex in PPE and intangibles -911 -1,324 -1,813 -2,081 -2,024 -2,110

Cash flow before financing activities 1,640 567 491 1,653 1,818 2,015

Consolidated statement of financial position

Cash and cash equivalents 1,713 1,471 1,541 2,397 2,045 3,244

Derivative instruments and interest-bearing investments 104 202 249 536 303 364

Total indebtedness 10,713 8,991 8,562 8,253 6,638 6,432

Net indebtedness 8,896 7,317 6,772 5,320 4,289 2,824

Credit ratios

Net indebtedness / adj. EBITDA2

3.8x 2.0x 1.6x 1.1x 0.8x 0.5x

Net cash interest paid coverage (Ratio)5

3.2x 5.2x 6.4x 8.4x 9.5x 33.7x


10

,48

4

8,8

96

7,3

17

6,7

72

5,3

20

4,2

89

2,8

24

190%

219%

118%

90%

58%

65%46%

26%

YE YE YE YE YE YE YE

2008 2009 2010 2011 2012 2013 2014

Net indebtedness (mn €)

Gearing ratio

Gearing ratio applying IAS 19 (rev. 2011)

VI. Continental Corporation Net Indebtedness and Gearing Ratio

69

VI. Continental Corporation Gross Indebtedness by Source

70

FY 2009 Gross indebtedness: €10,713 mn

(thereof 86% in syndicated loan)

FY 2014 Gross indebtedness: €6,432 mn

(thereof 23% in syndicated loan)

1

2

Syndicated loan Bonds Various other bank lines Other indebtedness

Term loan Apr. 2016

1,500

Bond Mar. 2017 (2.5%)

750

Bond Jul. 2018 (3.0%)

750 Bond Sept. 2019 (4.5%)

782

Bond Sept. 2020

(3.125%) 750

Bond Aug. 2025 (3.9%)

50

Various other bank lines

900

Other indebtedness

951 Syndicated

loan (Tranche B) Aug. 2010

3,500

Syndicated loan

(Tranche C) Aug. 2012

5,000

Syndicated loan

(Tranche D Revolver) Aug. 2012

696

Various other bank lines

900

Other indebtness

616

1 Term loan and revolving credit facility repayment in April 2016 / April 2019; revolving credit facility unutilized at YE 2014.

2 Nominal amount $950 mn (exchange rate at December 31, 2014: 1.2154).


VI. Continental Corporation Maturities1 for Gross Indebtedness (mn €)

71

750 750 782 750

1,500

760

70

48 2689595

248

2015 2016 2017 2018 2019 2020

1 Maturities later than 2019 are bond maturities only; all bond and syndicated loan amounts shown are nominal values; maturities do not add up to gross indebtedness

amounting to €6,431.6 mn as at December 31, 2014; SoR = Sales of receivables (€842.9 mn total amount as at December 31, 2014). 2 Any utilization under the Revolving Credit Facility (RCF) has to be shown as short term debt according to IFRS although the RCF matures in 2019 and has a total

volume of €3,000 mn. 3 Nominal amount $950 mn (exchange rate as at December 31, 2014: 1.2154).

Syndicated Loan

Bonds

(mn €) FY 14

Gross indebtedness 6,432

Cash 3,244

Net indebtedness 2,824

Available credit lines 4,032

Total liquidity 7,276

3

As at December 31, 2014

∑1,570

∑1,046

∑776 ∑870

∑1,354

Sale of receivables

Others

VI. Continental Corporation Purchasing – Production Materials 2014

72

Oil Based Chemicals

14%

Electronics 23%

Electro-mechanical components

19%

Mechanical components

26%

Others 14%

Natural Rubber

4% Purchasing Contracts

› Continental has a wide range of sources

for production materials worldwide.

› A specific strategy for each production

material group is set up and the

appropriate supplier panel is selected.

This way we ensure the competitiveness

and availability of the materials.

› For some materials, like certain oil based

chemicals or natural rubber, prices might

have a long lead time until they become

fully reflected in the cost of our final

products.

Total production material

purchased in 2014:

€15.7 bn

1 E.g. synthetic rubber, carbon black.

2 E.g. printed circuit boards, connectors, motors.

3 E.g. stamped parts, turn parts, castings.

4 E.g. textiles, plastics.

1

2

3

4


VI. Continental Corporation Raw Material Prices

73

Sources:

Natural Rubber: Rolling one-month contracts from the Singapore Exchange (U.S. $ cents per kg).

Crude oil: Europe Brent Forties Oseberg Ekofisk price from Bloomberg (U.S. $ per barrel).

Butadiene, Styrene: South Korea export price (FOB) from PolymerUpdate.com (U.S. $ per metric ton).

0%

50%

100%

150%

200%

250%

300%

350%

Natural Rubber TSR 20 Natural Rubber RSS3 Styrene Crude oil Butadiene

based on January 1, 2008

2008 2009 2010 2011 2012 2013 2014

74

Topics







Market Data VII. 75




Glossary XI. 171


VII. Market Data Installation Rates of Electronic Brake Systems

75

ABS/TCS ESC Total EBS

Source: Continental estimates.

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019

Europe North America

Japan China

VII. Market Data Installation Rates of Fuel Injection Systems1

76

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019

Gasoline direct injection Gasoline port fuel injection Diesel injection


Japan China

Source: Continental estimates. 1 Based on production of diesel and gasoline engines for passenger cars & light vehicles.


VII. Market Data Development of Transmissions Technologies1

77

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019

Double clutch transmission Automated manual transmission

Continuous variable transmission

Automatic transmission

Manual transmission Electric variable transmission


Japan China

Source: Continental estimates. 1 Based on production of transmissions for passenger cars and light vehicles.

VII. Market Data Installation Rates of Turbochargers in Gasoline Engines

78

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2016 2017 2018 2019

Europe North/Central America Asia excl. China China

Source: IHS 01/2015.


Source: Strategy Analytics and Continental estimates.

VII. Market Data Installation Rates of Keyless Entry Systems

79 Remote Keyless Entry Passive Keyless Entry

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019


Japan China

VII. Market Data Installation Rates of Multimedia Systems1

80

Stand-alone Radios Navigation

0%

20%

40%

60%

80%

100%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2012 2013 2014 2015 2016 2017 2018 2019

Source: Continental estimates. 1 “Navigation” refers only to embedded navigation in the car and does not include connected navigation where devices

delivers navigation information and the screen of the car is used as a display.


Japan China


VII. Market Data Installation Rates of Advanced Driver Assistance Systems1

81 Source: Continental estimates. 1 Market Definition: Average amount of ADAS sensors per car without parking assist functions based on ultrasonic sensors and sensing rear view cameras.

Example: 2014 worldwide – Total number of produced cars: 87 mn Average sensors per car: 0.29 87,00,000*0.29 = 25,230,000 sensors.

0.00

0.25

0.50

0.75

1.00

1.25

1.50

2012 2013 2014 2015 2016 2017 2018 2019

Europe NAFTA Asia Rest of world Worldwide

Sensors per car

VII. Market Data Installation Rates of Head-Up Displays

82

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2012 2013 2014 2015 2016 2017 2018 2019

Europe North America Japan China

(in thousand units)



VII. Market Data Production of Light Vehicles 2012 - 2015

83

(in mn units) 2012 2013 2014 2015E

Europe1 19.0 19.2 19.8 19.9

NAFTA 15.4 16.2 17.0 17.3

South America 4.3 4.5 3.8 3.7

Asia2 42.0 44.0 45.9 47.5

Other markets 0.7 0.8 0.9 0.9

Total 81.5 84.7 87.4 89.3

Source: IHS and Continental estimates. 1 West, Central and East incl. Russia and Turkey.

2 Asia including Kazakhstan, Uzbekistan, Middle East and Oceania with Australia.

VII. Market Data Production of Heavy Vehicles 2012 – 2015

84

(in thousand units) 2012 2013 2014 2015E

Europe1 580 576 543 553

NAFTA 485 464 542 570

South America 184 246 187 190

Asia2 1,783 1,897 1,858 1,890

Other markets 0 0 0 0

Total 3,032 3,183 3,130 3,203

Source: IHS and Continental estimates. 1 West, Central and East incl. Russia and Turkey.



VII. Market Data Replacement Passenger, Light Truck and 4x4 Tires 2012 - 2015

85

(in mn units) 2012 2013 2014 2015E

Europe 312 314 320 326

NAFTA 254 264 280 283

South America 59 63 66 66

Asia 347 367 387 411

Other markets 36 38 40 41

Total 1,009 1,047 1,093 1,127

Source: LMC World Tyre Forecast Service and Continental estimates.

VII. Market Data Replacement Truck Tires 2012 - 2015

86

(in mn units) 2012 2013 2014 2015E

Europe 20.6 22.0 22.3 22.8

NAFTA 20.0 20.0 21.5 22.2

South America 12.5 13.7 13.6 13.3

Asia 79.2 82.9 87.0 88.8

Other markets 5.9 6.3 6.7 6.7

Total 138.2 145 151.1 153.8

Source: LMC World Tyre Forecast Service and Continental estimates.


87

Topics







Market Data VII. 75




Glossary XI. 171

VIII. Automotive Group Key Figures1

(in mn €) 2012 2013 2014

Sales

19,505.1 20,016.1 20.909,2

EBITDA 2,470.3 2,490.5 2,407.7

in % of sales 12.7 12.4 11.5

EBIT 1,134.5 1,158.9 1,189.3

in % of sales 5.8 5.8 5.7


in % of sales2 8.0 8.1


ROCE 9.9 10.6 11.3

R, D & E expenses 1,475.3 1,589.1 1,835.5

in % of sales 7.6 7.9 8.8

Capex3 1,035.9 1,015.5 1,125.7

in % of sales 5.3 5.1 5.4

Depreciation & amortization4 1,335.8 1,331.6 1,218.4

in % of sales 6.8 6.7 5.8


1





Impairment also includes necessary reversals of impairment losses. 88


VIII. Automotive Group Sales and Adjusted EBIT1 by Division

89

709

259

708

0

1,676

Chassis & Safety

Powertrain Interior cons. AutomotiveGroup

9.4%

4.1%

10.1% 8.1%

Adj. EBIT margin (%)

7,515

6,494

7,003

103

20,909

Chassis & Safety

Powertrain Interior cons. AutomotiveGroup

2.9%

8.6% 5.6%

4.9%Organic sales growth (%)

Automotive Group Sales (mn €) 2014 Automotive Group Adj. EBIT1 (mn €) 2014

-

1


VIII. Automotive Group Sales by Market

90

Germany 29%


26%

NAFTA 20%

Asia 21%

Other countries 4%

Germany 25%

Other countries 3%

Asia 26%

NAFTA 23%


23%

Sales in 2014: €20.9 bn Sales in 2010: €15.9 bn


9.1 9.4

11.2

1.5 1.51.7

2012 2013 2014

LTS (bn €) Book-to-bill

VIII. Automotive Group Order Intake (LTS1) in the Automotive Group €30 bn in 2014

91

8.2 7.9

9.9

1.2 1.11.3

2012 2013 2014


8.2 8.3

9.2

1.3 1.21.3

2012 2013 2014


1 Life-time sales.

Chassis & Safety Powertrain Interior

› Order intake totaled almost

€10 bn

› ADAS book-to-bill ratio at 4.0x

› Book-to-bill ~2.0x for

Engine Systems and

Sensors & Actuators

› Close to 40% of order intake

was acquired outside of

Europe and NAFTA

› Solid order backlog evenly

distributed amongst various

business units

› >30% of order intake was

acquired in Asia

Order intake Powertrain Order intake Interior Order intake Chassis & Safety

31% 23% 22%

21% 19% 19%

12%26%

29%30%

26%

24%

6%

5%

6%

71

87

102

2007 2014 2019E

Europe NAFTA ChinaRest of Asia Rest of World

VIII. Automotive Group Production of Passenger Cars and Light Trucks (<6t)

92

› Worldwide PC & LT production showed a

CAGR 2007-2014 of 3%. It is expected to

stay at this level from 2014-2019.

› European market not expected to reach

pre-crisis level (2007: 22 mn) before

2018; CAGR to accelerate to 2% (2014-

2019).

› China is the largest market for PC&LT

vehicles produced. CAGR to slow to 5%

from 2014-2019 from 15% during 2007-

2014.

› NAFTA expected to stay at 19 mn units

by 2019.

1 Passenger car & light truck (<6t); Source: IHS February 2015.

2 West, Central and East incl. Russia and Turkey.


CAGR

3%

CAGR

3%

Worldwide PC & LT1

production (mn units)

2

3


83% 99% 10% 40% 1%

17% 1% 90% 60% 99%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

VIII. Automotive Group Growth Opportunities – Electronic Stability Control (ESC)

93

› NAFTA with close to 100%

penetration since 2014

› ESC systems mandatory in

Europe from 11/2014 onwards1

› Largest volume potential in

Asia; installation rate currently

only at 40%

Source: IHS and own estimates. 1 Regulation (EC) No. 661/2009; refers to all vehicles of category M and N.

PC&LT

71 mn

production

worldwide

PC&LT

87 mn production

worldwide

PC&LT

102 mn production

worldwide

2014 2019E

Installation rates

2007

31%

69%

Installation rate ESCMarket potential ESC

60%

40%

71%

29%

18% 10% 1% 6% 1%

82% 90% 99% 94% 99%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

VIII. Automotive Group Growth Opportunities – Advanced Driver Assistance Systems (ADAS)

94

› Installation rate in Europe

expected to go up to 75% by

2019

› NAFTA follows at slower pace,

hitting 25% by 2019

› Installation rates in Asia are

estimated to growth to 14% by

2019, mainly driven by Japan

Source: IHS, Strategy Analytics and own estimates; ADAS w/o parking assist functions based on ultrasonic sensors and sensing rear view cameras.

2014 2019E

Installation rates

2007

PC&LT

71 mn

production

worldwide

PC&LT

102 mn production

worldwide

1%

99%

Installation rate ADASMarket potential ADAS

7%

93%

26%

74%

PC&LT

87mn production

worldwide


55%

25%

20%

Europe NAFTA Asia

2014 2019

Sensors Actuators

VIII. Automotive Group Growth Opportunities – Sensors and Actuators

95

Sales by Markets (2014) Market growth (bn €)

› Market for Sensors & Actuators (S&A) shows significant growth

› Continental wants to outgrow the market to remain a strong player

› Obtain top 3 position in relevant markets

› New technologies in development for future demands

Key Products

~ 8.0

~ 10.0

CAGR

5.5%

CAGR

7.5%

44%

56%

Electronic

Throttle Body

NOx

Sensor

Knock

Sensor

Exhaust Gas

Recirculation

Valve

Flex Fuel

Sensor

47% 27% 0% 11% 0%

53% 73% 100% 89% 100%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

17% 96% 0% 0% 0%

83% 4% 100% 100% 100%

VIII. Automotive Group Growth Opportunities – Selective Catalytic Reduction

96

Key Products 2014E 2019E

Installation rates › Exhaust-gas aftertreatment is

increasingly becoming a key

technology

› Almost all new vehicles

engines (Gasoline & Diesel)

must have SCR technology to

comply with the NOx limits

› Acquisition of Emitec

complemented the exhaust gas

aftertreatment technology

portfolio

Source: IHS and own estimates.

12%

88%

Installation rate NOxMarket potential NOx

39%

61%

PC&LT

Diesel Engine

17 mn

production

ww

PC&LT

Diesel Engine

20 mn

production

ww

Liquid-Cooled

SCR Injector

Deka Air Cooled

SCR Injector

Tank Extraction Unit

SCR Dosing

Control Unit

SCR Catalyst


https://workspace1.extra.siemensvdo.com/content/Documents and Settings/uid25338/Local Settings/Application Data/Microsoft/CD Burning/knock sensor june06.avi

3%

97%

Installation rate GDI Market potential GDI

24%

76%

48%

52%

VIII. Automotive Group Growth Opportunities – Gasoline Direct Injection (GDI)

97

› Stricter CO2 emission targets in

Europe, USA, Japan and

China cause huge demand

increase for gasoline direct

injection

› GDI volume expected to grow

by 130% until 2019

2007 2014 2019E

Installation rates

Gasoline

engine

53 mn

production

ww

Gasoline

engine

69 mn

production

ww

Gasoline

engine

80 mn production

ww

47% 27% 0% 11% 0%

53% 73% 100% 89% 100%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

57% 31% 0% 15% 0%

43% 69% 100% 85% 100%


55% 7% 0% 11% 0%

45% 93% 100% 89% 100%

VIII. Automotive Group Growth Opportunities – Gasoline Turbo Chargers (TC)

98

Gasoline

engine

53 mn

production

ww

Gasoline

engine

69 mn

production

ww

Gasoline

engine

80 mn production

ww

2014 2019E

Installation rates

2007

› Market for Gasoline Turbo Chargers will grow from 2 mn in 2007 to more than 27 mn in 2019

› World's first Turbo Charger with

Aluminum Turbine Housing in Cars (water-cooled)

› Significant weight reduction by

nearly 30% while simultaneously providing cost and system benefits

47% 7% 0% 8% 0%

53% 93% 100% 92% 100%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

3%

97%

Installation rate TC Market potential TC

17%

83%

35%

65%



Start-Stop andvoltage regulation

+ EnhancedStart-Stop function

+ Recuperation

48-Volt Eco Drive – CO2 reduction

Total CO2 reduction: – 13.0%

CO

2em

issio

n

– 7.0%

– 0.6%– 5.4%

VIII. Automotive Group Growth Opportunities – 48V Technology

99

2019E 2025E

› Lower CO2 emissions and less

fuel consumption up 13%2 with

NEDC and 20% under real

driving condition

› Due to advanced Start-Stop,

recuperation and

coasting/sailing functions

› First SOP 2016/2017

EV/HEV

engine

26 mn production

ww

1 Continental estimates. 2 Measurement with New European Driving Cycle (NEDC) compared to a VW Golf VI BlueMotion with 4 zyl. 1.2l TSI, 77 kW gasoline engine incl. Stop/Start.

2014

EV/HEV

engine

9 mn production

ww

EV/HEV

engine

3 mn

production

ww

0%

100%

Installation rate 48V Market potential 48V

28%

72%

48%

52%

1

2

30% 85% 5% 30% 5%

70% 15% 95% 70% 95%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

VIII. Automotive Group Growth Opportunities – Electronic Tire Information Systems (eTIS)

100

› Mandatory in NAFTA since ’07

and in Europe since ’14

› Europe at 30% penetration in

2014

› Substantial growth potential in

South America and Asia

› By 2019 around 40% still not

equipped with eTIS

Installation rate

Source: Strategy Analytics, IHS and own estimates. 1 Mandatory as of Sept. 2008 for all new light vehicles. 2 Mandatory as of Nov. 2014 for all new passenger cars.

PC&LT

71 mn

production

worldwide

PC&LT

87 mn production

worldwide

PC&LT

102 mn production

worldwide

2

1

2007 2014 2019E

29%

71%

Installation rate eTISMarket potential eTIS

40%

60%

60%

40%


VIII. Automotive Group

Growth Opportunities – Driver HMI Displays

101

› Legislation will boost sales

further

› Head-Up Displays with

smallest overall share, but 3D-

navigation will boost

installation rates

› Clear trend towards larger and

increasing number of displays

per vehicle2

2007 2014 2019E

Installation rate

Source: IHS and own estimates. 1 Driver HMI Displays include Head Up Displays, Secondary Displays and Integrated Center Stacks, excludes Multimedia Displays.

2 Market potential understated as up to five displays are feasible per vehicle.

PC&LT

71 mn

production

worldwide

PC&LT

87 mn production

worldwide

PC&LT

102 mn production

worldwide

1

1

26%

74%

Installation Rate DisplaysMarket Potential Displays

29%

71%

39%

61%

48% 44% 9% 19% 20%

52% 56% 91% 81% 80%

Eu

rop

e

NA

FT

A

So

uth

A

me

rica

Asia

Oth

er

Ma

rke

ts

102

Topics







Market Data VII. 75

Automotive Group – Chassis & Safety Division VIII. 103



Glossary XI. 171


VIII. Chassis & Safety Business Units and Key Products

103

Vehicle Dynamics Hydraulic Brake 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

› Functions

› Adaptive cruise control

› Emergency brake assist

› Lane departure warning

› Lane change support

› Blind spot detection

› Traffic sign assist

› Intelligent head lamp

control

› Rear cross traffic alert

› Surround View

› Sensors

› Radar

› Camera

› Lidar

› Electronic Brake Systems

› ABS

› ESC

› Software functions

› Traction control

› Adaptive cruise control

› Regenerative brake system

› Active front steering

› Hill start assist

› Hydraulic brake assist

› Trailer stability assist

› Chassis electronics

› Suspension systems

› Calipers

› Drum brakes

› Brake hoses

› Boosters

› Tandem master cylinders

› Electric parking brakes

› Pedal modules

› Brake pressure regulators

› Washer systems

VIII. Chassis & Safety Locations Worldwide

104

India ▐ Bangalore ▐ Gurgaon

(New Delhi) ▐ Manesar

Brazil ▐ Salto ▐ Varzea Paulista

China ▐ Changchun I ▐ Changchun II ▐ Changshu ▐ Heihe ▐ Jiading CASS

▐ Jiading TC ▐ Lian Yun Gang ▐ Shanghai

Mexico ▐ Ayala Morelos (Cuautla) ▐ Guadalajara ▐ Las Colinas ▐ Silao

USA ▐ Auburn Hills ▐ Brimley ▐ Culpeper ▐ Henderson ▐ Morganton ▐ Seguin

Malaysia ▐ Penang

Japan ▐ Asahi ▐ Hamakita ▐ Monbetsu ▐ Yokohama

South Korea ▐ Icheon ▐ Sejong ▐ Seoul

Philippines ▐ Calamba ▐ Manila

▐ Lindau

▐ Nuremberg

▐ Regensburg

▐ Rheinböllen

▐ Schwalbach

▐ Ulm

Europe

France ▐ Boussens

▐ Toulouse

Hungary ▐ Budapest

▐ Veszprém

Italy ▐ Cairo Montenotte

Belgium ▐ Mechelen

Czech Republic ▐ Adrspach

▐ Frenstat

▐ Jicin

Portugal ▐ Palmela

Romania ▐ Iasi

▐ Sibiu

▐ Timişoara

Slovakia ▐ Zvolen

Sweden ▐ Arvidsjaur

UK ▐ Ebbw Vale

▐ Lewes

▐ Birmingham

▐ Production / R&D

Germany ▐ Alzenau

▐ Bebra

▐ Frankfurt

▐ Gifhorn

▐ Hanover

▐ Ingolstadt

▐ Karben

▐ Korbach

▐ Joint Ventures < 50%

66 sites for production and R&D in 20 countries. Divisional headquarters in Frankfurt/Main, Germany.

▐ Jiading SABS


http://www.conti-online.com/generator/www/de/de/continental/automotive/themes/passenger_cars/chassis_safety/passive_safety_sensorics/speed_sensors/wheel_speed_sensors_de.html

VIII. Chassis & Safety Key Figures1

105

(in mn €) 2012 2013 2014

Sales

7,052.5

7,269.2

7,514.9

EBITDA 1,007.9 990.2 1,018.1

in % of sales 14.3 13.6 13.5

EBIT 672.7 598.9 680.2

in % of sales 9.5 8.2 9.1

EBIT adjusted2 692.0 708.5



ROCE 16.4 14.9 17.2

R, D & E expenses 500.2 535.3 629.5

in % of sales 7.1 7.4 8.4

Capex3 383.8 401.7 411.6

in % of sales 5.4 5.5 5.5

Depreciation & amortization4 335.2 391.3 337.9

in % of sales 4.8 5.4 4.5

thereof impairment5 -2.0 41.4 4.7

1






VIII. Chassis & Safety Sales by Market

106

Germany 30%


24%

NAFTA 19%

Asia 23%

Other countries 4%

Germany 26%

Other countries 3%

Asia 30%

NAFTA 21% Europe

(excluding Germany)

20%



VIII. Chassis & Safety Market Position for Electronic Brake Systems 2014

107 Source: Continental estimates.

Europe

North America

South America

Asia/Pacific

World

Continental

Bosch

TRW

Continental

Bosch

TRW

Continental

Bosch

TRW

Continental

Advics

Bosch

Continental

Advics

Bosch

Market share of all suppliers other than top 3

All others

All others

All others

All others

All others

VIII. Chassis & Safety Market Position for Foundation Brake Systems 2014


Europe

North America

South America

Asia/Pacific

World

Continental

CBI

TRW

Continental

Akebono

TRW

Continental

CBI

TRW

Continental

Advics

Mando

Continental

Akebono

TRW


All others

All others

All others

All others

All others


VIII. Chassis & Safety Market Position for Actuation 2014


Europe

North America

South America

Asia/Pacific

World

Continental

Bosch

TRW

Continental

Bosch

TRW

Continental

Bosch

TRW

Continental

Advics

Bosch

Continental

Bosch

TRW


All others

All others

All others

All others

All others

VIII. Chassis & Safety Market Position for Airbag Electronics 2014


Europe

North America

South America

Asia/Pacific

World

Continental

Autoliv

Bosch

Continental

Autoliv

Bosch

Continental

Autoliv

TRW

Continental

Autoliv

Denso

Continental

Autoliv

Bosch


All others

All others

All others

All others

All others


VIII. Chassis & Safety Market Position for Advanced Driver Assistance Systems 2014


Europe

North America

Asia/Pacific

World

Continental

Autoliv

Bosch

Continental

Autoliv

Hella

Continental

Denso

Gentex

Continental

Autoliv

Denso


All others

All others

All others

All others

VIII. Chassis & Safety Growing Sales Volume for Electronic Brake Systems

112

Model Selection

Europe › Audi A3

› BMW 1 Series / 3 Series

› Ford Focus / Kuga / Fiesta / Transit

› Mercedes C Class

› Fiat Doblo / Giulietta

› Opel Astra / Captiva / Zafira

› Peugeot 208 / C3 Picasso

› Renault Scenic / Espace

› Nissan Note

› Skoda Octavia

› Toyota Yaris

› Volvo S60 / V40 / V60 / V90 / XC60

› VW Golf / Passat

NAFTA › BMW X3 / X4 / X5

› Chevrolet Cruze / Equinox / Colorado

› Chrysler 300

› Dodge RAM 1500 / Charger

› Ford Explorer / Escape / Focus / Fusion

› Honda Odyssey / Civic

› Jeep Wrangler

› VW Jetta / New Beetle / New Passat

Asia › Ford Ecosport / Focus / Fiesta Succ.

› GM Cruze / Captiva

› Honda Accord / Civic / Fit

› Mazda Axela / Demio / Premacy

› PSA 208 / C-Elysee

› Skoda Octavia / Superb

› Suzuki Wagon R / Spacia / Swift

› Mitsubishi Lancer / Outlander / RVR

› VW Lavida / Bora / Passat / Touran 0

5

10

15

20

25

30

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

ESC

ABS/TCS

(in mn units, excluding motorcycles)



113

Topics







Market Data VII. 75

Automotive Group – Powertrain Division VIII. 114



Glossary XI. 171

VIII. Powertrain Business Units and Key Products

114

› 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

Transmission Engine Systems Fuel & Exhaust Management

Sensors &

Actuators

Hybrid Electric

Vehicle

› Engine Management

Systems and fuel

components for

› Diesel Piezo Common

Rail Injection System

› Gasoline Solenoid

Direct Injection

› Gasoline Port

Injection

› Liquefied Petroleum

Gas (LPG) and

Compressed Natural

Gas (CNG)

› Aftertreatment

› Engine Management

Systems and after-

treatment products for

commercial vehicle

applications

› Turbochargers

› 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-integrated

UREA dosing system


VIII. Powertrain Locations Worldwide

115

52 sites for production and R&D in 19 countries. Divisional headquarters in Regensburg, Germany.

India ▐ Bangalore ▐ Manesar ▐ Pune

Brazil ▐ Guarulhos ▐ Salto

China ▐ Changchun ▐ Shanghai ▐ Tianjin ▐ Wuhu

Mexico ▐ Ayala Morelos (Cuautla) ▐ Guadalajara ▐ Juarez

Malaysia ▐ Penang

Japan ▐ Yokohama

South Korea ▐ Cheongwon ▐ Icheon ▐ Sejong

Australia ▐ Bundoora

▐ Limbach-Oberfrohna/Stollberg

▐ Lohmar

▐ Nuremberg

▐ Regensburg

▐ Roding

▐ Schwalbach

Europe France ▐ Boussens

▐ Faulquemont

▐ Foix

▐ Toulouse


Italy ▐ Pisa

Czech Republic ▐ Adrspach

▐ Brandys

▐ Frenstat

▐ Trutnov

Romania ▐ Brasov

▐ Iasi

▐ Sibiu

▐ Timişoara

Germany ▐ Bebra

▐ Berlin

▐ Dortmund

▐ Eisennach

▐ Gifhorn

▐ Grünstadt

▐ Karben

Philippines ▐ Calamba

Canada ▐ Chatham

Thailand ▐ Amata City

Russia ▐ Kaluga

USA ▐ Auburn Hills ▐ Dearborn ▐ Deer Park ▐ Foutain Inn ▐ Newport News ▐ Seguin

VIII. Powertrain Key Figures1 (in mn €) 2012 2013 2014

Sales

6,134.8 6,260.3 6,494.3

EBITDA 609.0 650.2 443.3

in % of sales 9.9 10.4 6.8

EBIT 48.3 179.5 -96.8

in % of sales 0.8 2.9 -1.5




ROCE 1.6 6.1 -3.5

R, D & E expenses 529.0 561.8 635.1

in % of sales 8.6 9.0 9.8

Capex3 395.0 360.5 428.0

in % of sales 6.4 5.8 6.6


in % of sales 9.1 7.5 8.3


1







VIII. Powertrain Sales by Market

117

Germany 26%


31%

NAFTA 20%

Asia 22%

Other countries 1%

Germany 22%

Other countries 1%

Asia 25%

NAFTA 23%


29%


VIII. Powertrain Market Position for Diesel Injection Systems1 2014

118 Source: Continental estimates. 1 For passenger cars & light trucks. Market share of all suppliers other than top 3

Europe Continental

Bosch

Delphi

All others

Asia/Pacific Bosch

Delphi

Denso

Continental

All others

World Continental

Bosch

Delphi

All others


VIII. Powertrain Market Position for Gasoline Injection Systems1 2014

119 Source: Continental estimates. 1 For passenger cars & light trucks.

Europe

North America

South America

Asia/Pacific

World

Continental

Bosch

Hitachi

Continental

Bosch

Denso

Bosch

Delphi

Magneti Marelli

Continental

Bosch

Denso

Continental

Bosch

Denso


All others

Continental

All others

All others

All others

All others

VIII. Powertrain Market Position for Transmission Control Units1 2014

120 Source: Continental estimates. 1 For passenger cars & light trucks.

Europe

North America

Asia/Pacific

World

Continental

Bosch

ZF Electronics

Continental

Bosch

Delphi

Continental

Bosch

Denso

Continental

Bosch

Denso


All others

All others

All others

All others


121

Topics







Market Data VII. 75

Automotive Group – Interior Division VIII. 122



Glossary XI. 171

VIII. Interior Business Units and Key Products

122

› Body control modules

› Access control systems

› Door systems

› Seat comfort systems

› Power closures

› Tire information systems

› Gateways

› Energy management

› Exterior light control units

› Intelligent antenna

modules

Body & Security

› Tachographs, telematics

and services

› Visual and haptical HMI

› Powertrain control

› Chassis, body and

transmission electronics

› Wear parts, spare parts,

services and multi-brand

vehicle diagnostics for

the independent

aftermarket


services

› Instrument clusters

› Display solutions

› Head-up displays

› Control panels

› Central input devices

› Interior camera

› Cockpit modules

› Radios

› Multimedia systems

› Connectivity &

telematics

› Software & 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 & security

› Traffic payment


VIII. Interior Locations Worldwide

123

64 sites for production and R&D in 23 countries. Divisional headquarters in Regensburg, Germany.

India ▐ Bangalore ▐ Manesar

Brazil ▐ Gravatai ▐ Guarulhos

China ▐ Changchun ▐ Jinan ▐ Nanjing ▐ Shanghai ▐ Tianjin ▐ Wuhu

Mexico ▐ Cuautla ▐ Guadalajara ▐ Nogales ▐ Tlaquepaque

USA ▐ Auburn Hills ▐ Deer Park ▐ Newport News ▐ Seguin ▐ Troy

Malaysia ▐ Penang

Japan ▐ Yokohama

South Korea ▐ Gyeonggi-do ▐ Icheon-city ▐ Sejong-si

Philippines ▐ Manila

▐ Markdorf

▐ Nuremberg

▐ Regensburg

▐ Schwalbach am Taunus

▐ Villingen-Schwenningen

▐ Wetzlar

Europe France ▐ Boussens

▐ Foix

▐ Rambouillet

▐ Toulouse


Austria ▐ Vienna

Czech Rep. ▐ Brandŷs

▐ Frenštát

Romania ▐ Iasi

▐ Sibiu

▐ Timişoara

Spain ▐ Rubi

Switzerland ▐ Rüthi

Sweden ▐ Arvidsjaur

UK ▐ Birmingham

▐ Bridgewater

▐ Coventry

▐ Devizes

Germany ▐ Babenhausen

▐ Bebra

▐ Dortmund

▐ Ingolstadt

▐ Karben

▐ Karlsruhe

▐ Resende ▐ São Bernardo

do Compo

Singapore

▐ Singapore

Australia ▐ Bundoora ▐ Campbellfield

Thailand ▐ Bangkok

Russia ▐ Chistopol ▐ Kaluga ▐ Moscow

VIII. Interior Key Figures1

124

(in mn €) 2012 2013 2014

Sales

6,434.2 6,605.7 7,002.5

EBITDA 853.3 850.2 946.3

in % of sales 13.3 12.9 13.5

EBIT 413.5 380.6 605.9

in % of sales 6.4 5.8 8.7


in % of sales2 8.9 10.1


ROCE 9.6 9.5 15.9

R, D & E expenses 446.1 492.0 570.9

in % of sales 6.9 7.4 8.2

Capex3 257.1 253.3 286.1

in % of sales 4.0 3.8 4.1


in % of sales 6.8 7.1 4.9


1







VIII. Interior Sales by Market

125

Germany 31%


24%

NAFTA 19%

Asia 18%

Other countries 8%

Germany 27%

Other countries 6%

Asia 22%

NAFTA 24%


21%


VIII. Interior Market Position for Body & Security 2014


Europe

North America

South America

Asia/Pacific

World

Continental

Hella

Lear

Continental

Denso

Lear

Continental

Delphi

Hella

Continental

Denso

Sumitomo

Continental

Denso

Hella


All others

All others

All others

All others

All others


VIII. Interior Market Position for Instrumentation & Driver HMI1 2014

127 Source: Continental estimates. 1 Excluding cockpit modules.

Europe

North America

South America

Asia/Pacific

World

Continental

JCI

Nippon Seiki

Continental

Denso

JCI

Continental

Denso

JCI

Continental

Denso

Nippon Seiki

Continental

Denso

JCI


All others

All others

All others

All others

All others

VIII. Interior Market Position for Infotainment & Connectivity 2014


Europe

North America

South America

Asia/Pacific

World

Continental

Bosch

Harman

Alpine

Harman

Panasonic

Bosch

Delphi

Panasonic

Clarion

Mobis

Panasonic

Alpine

Harman

Panasonic


Continental

All others

All others

Continental

All others

Continental

All others

Continental

All others


VIII. Interior Market Position for Commercial Vehicle1 2014

129 Source: Continental estimates. 1 Market shares for commercial vehicle business as described in BU structure excluding automotive aftermarket.

Europe

North America

South America

Asia/Pacific

World

Continental

Stoneridge

Wabco

Continental

Phoenix

Stoneridge

Continental

Bosch

Wabco

Continental

DETC

Yazaki

Continental

Stoneridge

DETC


All others

All others

All others

All others

All others

130

Topics







Market Data VII. 75




Glossary XI. 171


IX. Rubber Group Key Figures1

131

(in mn €) 2012 2013 2014

Sales

13,261.7 13,355.5 13,637.6

EBITDA 2,564.0 2,714.0 2,832.6

in % of sales 19.3 20.3 20.8

EBIT 2,120.1 2,214.8 2,262.7

in % of sales 16.0 16.6 16.6


in % of sales2 16.9 17.2


ROCE 37.9 37.5 35.7

R, D & E expenses 269.5 289.3 302.2

in % of sales 2.0 2.2 2.2

Capex2 981.2 964.6 914.9

in % of sales 7.4 7.2 6.7


in % of sales 3.3 3.7 4.2

thereof impairment5 -25.1 -1.1 —

1






IX. Rubber Group Sales and Adjusted EBIT1 by Division

132

439

1,867

0

2,306

ContiTech Tires cons. Rubber Group

11.3%

19.4% 17.2%

Adj. EBIT margin (%)

3,931

9,784

78

13,638

ContiTech Tires cons. Rubber Group

1.3%

2.1% 2.1%

Organic sales growth (%)


Rubber Group Sales (mn €) 2014 Rubber Group Adj. EBIT1 (mn €) 2014

-

1


IX. Rubber Group Sales by Market

133

Germany 25%


43%

NAFTA 17%

Asia 8%

Other countries 7%

Germany 21%

Other countries 7%

Asia 11%

NAFTA 21%


40%


33% 29% 26%

30% 25%22%

7%13%

19%22%

24%

23%

8%

10%

9%

0.9

1.1

1.4

2007 2014 2019E

Europe NAFTA ChinaRest of Asia Rest of World

IX. Rubber Group Growth Opportunities – Replacement Tires Demand for PC & LT Tires

› Global replacement tire market to grow

with a CAGR of 4% from 2014-2019

› Europe to stay the largest replacement

tire market by size; CAGR to accelerate

from 2014-2019 to 3%

› China to keep double digit CAGR from

2014 to 2019

1 Passenger and light truck replacement tire market; Source: LMC December 2014.

PC & LT1 Replacement

Tires (bn units)

CAGR

2%

CAGR

4%

134


22%29% 31%

2007 2014 2019E

6%20% 24%

2007 2014 2019E

47% 51% 50%

2007 2014 2019E

8%21%

27%

2007 2014 2019E

IX. Rubber Group Growth Opportunities – Improving Tire Mix due to rising SUV & Pick-Up Share

PC & LT1 Production Europe PC & LT1 Production NAFTA

1 Passenger car & light truck (<6t); Source: IHS February 2015.

Share of SUVs and Pick-Ups

PC & LT1 Production China PC & LT1 Production Worldwide

Share of SUVs and Pick-Ups

Share of SUVs and Pick-Ups Share of SUVs and Pick-Ups

135

IX. Rubber Group Growth Opportunities – Example for Improving Tire Mix on Design Step-Up

VW Golf III (2002) VW Golf VII (2014)

Ford Taurus (2002) Ford Taurus (2014)

Rim size: 14“ to 17“ Rim size: 15“ to 19“

Rim size starts 17“ Rim size starts 16“

136


IX. Rubber Group Additional Tire Production Capacity of 26 mn Units by 2017/18

137

Mount Vernon

(US)

Sumter

(US)

+4

+4

+4

Camaçari

(BRA)

+4

+7

Kaluga

(RU)

Hefei

(CN) +0.4

Modipuram

(IN)

+1.3

+0.3

(mn units)

Passenger tires

Truck tires

Otrokovice

(CZ)

Puchov

(SK)

+0.8

+0.5

2012 2017

Fluid Technology Vibration Control

Conveyor Belt Group Power Transmission Group

Air Spring Systems Compounding Technology

Elastomer Coatings Benecke-Kaliko Group

∑~€25 bn

∑~€30 bn

IX. Rubber Group Cumulative Market for ContiTech Products



139

Topics







Market Data VII. 75


Rubber Group – Tires Division IX. 140


Glossary XI. 171

IX. Tires Business Units and Tire Brands

Passenger

and Light

Truck Tires

Original

Equipment

Passenger

and Light

Truck Tires

Replacement

EMEA

Passenger

and Light

Truck Tires

Replacement

The Americas

Passenger

and Light

Truck Tires

Replacement

APAC

Commercial Vehicle Tires Two Wheel

Tires

Truck Tires

EMEA

Truck Tires

The Americas

Truck Tires

APAC

Commercial

Specialty Tires

Tires for:

› Compact, medium-size and full-size cars

› 4x4 and SUVs

› Vans, light trucks and RVs

Tires and services for

customer segments:

› Goods

› People

› Construction

Tires and

services

for the

applications:

› Material

handling

› Agriculture

› Earthmover

Tires and

tubes for:

› Bicycles:

Race,

Mountainbike,

City/Trekking

› Motorcycles:

Scooters, Big

bikes >150cc,

Bikes <150cc

Ext. mobility

systems:

› SSR

› Minispares

› Conti

KomfortKit

› Conti

MobilityKit

› ContiSeal

› ContiSilent

NVH enginee-

ring services

– – – Segmentation into Premium, Quality and Budget. 1

Except NAFTA, Colombia, Peru.

2 Only in Australia and China.

3 Trademark rights for Malaysia, Singapore and Brunei.

4 Only in Australia, China, Malaysia and Taiwan.

Astrum Blue

4

2 3

140

3

1


http://www.brahlers.com/PDF/ContiTread_Brochure.pdf



IX. Tires Key Figures1

(in mn €) 2012 2013 2014

Sales

9,665.0 9,583.2 9,784.4

EBITDA 2,005.1 2,137.7 2,280.8

in % of sales 20.7 22.3 23.3

EBIT 1,666.5 1,752.7 1,829.4

in % of sales 17.2 18.3 18.7


in % of sales2 18.7 19.4


ROCE 37.6 37.7 37.1

R, D & E expenses 195.1 204.7 216.9

in % of sales 2.0 2.1 2.2

Capex3 830.2 798.6 724.3

in % of sales 8.6 8.3 7.4


in % of sales 3.5 4.0 4.6

thereof impairment5 -25.1 -1.3 —

1






IX. Tires Sales by Market

142

Germany 18%


46%

NAFTA 22%

Asia 7%

Other countries 7%

Germany 17%

Other countries 8%

Asia 8%

NAFTA 24%


43%



IX. Passenger and Light Truck Tires Market Share for Passenger and Light Truck Tires1 2014

143

Source: Continental estimates. 1 Replacement.

2 Western and Central including Turkey.

2

Europe

North America

Continental

Goodyear/ Sumitomo

Michelin

Bridgestone/ Firestone

Goodyear/ Sumitomo

Michelin


Continental

All others

All others

IX. Commercial Vehicle Tires Market Share for Truck Tires1 2014

144

Source: Continental estimates. 1 Replacement.

2 Western and Central, incl. Turkey.

2

Europe

North America


Goodyear/ Sumitomo

Michelin


Goodyear/ Sumitomo

Michelin

Continental

All others

Continental

All others



IX. Passenger and Light Truck Tires Continental Worldwide PLT Production 20141

145 1 Without Europe.

(in mn units)

Mount Vernon

San Luis Potosí

Cuenca

Camaçari

Port Elizabeth

Alor Star /

Petaling Jaya

10

6

2 6

3

3

(US)

(MX)

(EC)

(BR)

(ZA)

(MY)

Hefei

(CN)

4

Sumter (US)

1

IX. Passenger and Light Truck Tires Continental European PLT Production 2014

146

Lousado

17

Sarreguemines

10

Aachen

8

Korbach

9

Otrokovice

21

Puchov

13

Timişoara

16

(in mn units)

(PT)

(DE)

(FR)

(RO)

(CZ)

(SK)

Kaluga

1

(RU)


IX. Commercial Vehicle Tires Continental Worldwide Truck Tire Production1 2014

147

1 Production of bias and radial tires.

2 Including deliveries to joint venture partners.

(in mn units)

Mount Vernon2

(US)

3,0

Cuenca

0.2

(EC)

Camaçari

(BR)

0.5

Port Elizabeth

(ZA)

0.1

Otrokovice Puchov (CZ)

(SK)

0.8

2.6

Petaling Jaya

0.3

(MY)

0.6

Modipuram

(IN)

IX. Tires Cost of Labor at Continental Manufacturing Sites1

148

5%

12%

14%

21%

24%

28%

29%

35%

35%

54%

72%

74%

89%

100%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

India

China

Malaysia

Romania

South Africa

Brazil

Ecuador

Slovakia

Czech Republic

Portugal

USA

Mexico

France

Germany

1 Based on average currency exchange rates 2014.


Winter tires worldwide1

(in mn units / increase year-over-year in %)

IX. Passenger and Light Truck Tires Product Mix Improvement

149 1 OE and replacement (excl. all-season tires).

2 All summer tires and all-season tires with rim sizes of at least 17 inches.

High performance summer tires worldwide2

(in mn units / increase year-over-year in %)

19 21 21 21 22 22

1.2%

6.8%

3.8% 0.7% 1.7% 0.7%

2009 2010 2011 2012 2013 2014

17

24

29

32

35

37

-10.1%

40.3%

21.8%

13.2%

6.5% 7.0%

2009 2010 2011 2012 2013 2014

IX. Passenger and Light Truck Tires Unit Sales 2009 - 2014

150

75 84 87 84 84 86

20

25 29 30 32 33

4

5

6 8 9 10

0

20

40

60

80

100

120

140

2009 2010 2011 2012 2013 2014

Europe (incl. Rest of world) The Americas Asia / Pacific

(in mn units)

99

114

123 122 125 128


IX. Commercial Vehicle Tires Unit Sales 2009 - 2014

151

2.3 2.8 3.1 2.9 3.1 3.0

2.6

3.2 3.5 3.5

3.6 3.9 0.2

0.3

0.4 0.7 0.8

0.9

0

1

2

3

4

5

6

7

8

9

2009 2010 2011 2012 2013 2014

Europe (incl. Rest of world) The Americas Asia / Pacific

(in mn units)

7.8

5.1

6.3

7.0 7.1

7.6

152

Topics







Market Data VII. 75


Rubber Group – ContiTech Division IX. 153


Glossary XI. 171


Air Spring Systems Benecke-Kaliko Group Conveyor Belt Group Compounding Technology

Power Transmission Group Vibration Control Fluid Technology Elastomer Coatings

› Air suspensions systems for

buses, trucks and rail vehicles

› Air actuators for pneumatics

› Air springs for vibration isolation

› Compensators

› Compounds

› Compound development

› Testing services

› Steel cord / fabric belts

› Special-purpose belts

› Conveyor belts components

› PVC light belts

› Service material

› Rubber track

› Coated fabrics

› Printing blankets

› Diaphragms /

diaphragm materials

› Gasholder diaphragms

› Collapsible fuel tanks

› Collapsible tanks

› Concertina walls

Hoses / hose lines for: › Exhaust & fuel systems

› Powertrain

› Air conditioning

› Heating / cooling systems

› Steering and chassis › Turbocharger

› Industrial applications

› Oil&Marine

› 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

› Technical and decorative

surface materials for automotive

interior trim

› Surface materials for industrial

applications

IX. ContiTech Business Units and Key Products

153

IX. ContiTech Forming a Global Player in Rubber and Plastics Technologies

154

0

1,000

2,000

3,000

4,000

5,000

6,000

ContiTech & Veyance

Bridgestone Diversif ied Products

Freudenberg (Seals and Vibration

Control Tech.)

Hutchinson Tokai Rubber Industries

Trelleborg AB (excl. wheel business)

Cooper Standard

Pinafore (Tomkins)

NOK(Seal

Business)

Parker-Hanif in Filtration and Engineered

Systems

Source: Company websites, Annual reports 2013, Bloomberg and European Rubber Journal (ERJ).

Calendarized to Dec year-end for NOK Corporation & Tokai Rubber Industries.

Ve

ya

nce

Sales 2013 (in mn €)

Ø exchange rate 2013 EUR/USD: 1.328

mn €


USA ▐ Auburn Hills ▐ Halstead ▐ Hannibal ▐ Hogansville ▐ Houston ▐ Lincoln ▐ Marysville ▐ Mount Pleasant

Czech Republic

▐ Ostrava-Hrabova

France

▐ Andrezieux

▐ Lyon

Finland

▐ Kalkku

India ▐ Kolkata ▐ New Delhi

Brazil ▐ Ponta Grossa ▐ Americana ▐ Santana de Parnaiba

China ▐ Changchun ▐ Changshu ▐ Changzhi ▐ Changzhou ▐ Ninghai ▐ Qingdao ▐ Shanghai ▐ Sanmen ▐ Tianjin ▐ Yanzhou ▐ Zhangjiagang

Japan ▐ Kurashiki ▐ Yokohama

South Korea ▐ Cheonan ▐ Jeonju ▐ Yangsan

Germany

▐ Aachen

▐ Bad Blankenburg

▐ Berlin/Hoppegarten

▐ Dannenberg

▐ Eislingen

▐ Hamburg

▐ Hanover

▐ Hann. Münden

▐ Hedemünden

Chile ▐ Santiago de Chile

▐ Herzogenaurach

▐ Karben

▐ Korbach

▐ Moers

▐ Northeim

▐ Oedelsheim

▐ Oppenweiler

▐ Salzgitter

▐ Waltershausen

Poland

▐ Wągrowiec

Romania

▐ Carei

▐ Nadab

▐ Timişoara

Russia ▐ Moscow ▐ Kaluga

Serbia

▐ Subotica

▐ Veliki Crljeni

Slovakia

▐ Dolné

Vestenice

▐ Puchov

Slovenia ▐ Kranj

Spain

▐ Pamplona

Turkey

▐ Bursa

▐ Cerkezköy

UK

▐ Ashington

▐ Grimsby

▐ Thetford

▐ Wigan

Greece

▐ Vólos

Hungary

▐ Makó

▐ Nyiregyhaza

▐ Szeged

▐ Vác

Australia ▐ Bayswater

▐ ContiTech Production/R&D ▐ Cooperation, Joint Ventures < 50% ▐ Veyance Production/R&D

Canada ▐ Bowmanville ▐ Granford

South-Africa ▐ Uitenhage

▐ Norfolk ▐ Porterdale ▐ Rochester Hills ▐ Somersworth ▐ Spring Hope ▐ St. Marys ▐ Sun Prairie ▐ Trumann

Venezuela ▐ Tinaquillo

Mexico ▐ Chihuahua ▐ Delicias ▐ Mexico City ▐ Montemorelos ▐ Monterrey ▐ San Luis Potosí

IX. ContiTech Locations Worldwide

▐

155

IX. ContiTech Key Figures

156

(in mn €) 2012 2013 2014

Sales

3,711.8 3,878.3 3,931.2

EBITDA 558.9 576.3 551.8

in % of sales 15.1 14.9 14.0

EBIT 453.6 462.1 433.3

in % of sales 12.2 11.9 11.0


in % of sales2 12.1 11.3


ROCE 39.1 36.5 30.8

R, D & E expenses 74.4 84.6 85.3

in % of sales 2.0 2.2 2,2

Capex3 151.0 166.0 190.6

in % of sales 4.1 4.3 4.8


in % of sales 2.8 2.9 3.0

thereof impairment5 0.0 0.2 —

1







IX. ContiTech Sales by Market

157

Germany 38%


34%

NAFTA 7%

Asia 14%

Other countries 7%

Germany 33%

Other countries 5%

Asia 17%

NAFTA 14%


31%


Air Springs

7% Others

3%

Power

Transmission

12% 1,203 1,466

10% ~14%

0%

20%

40%

60%

-

1,000

2,000

3,000

4,000

5,000

2006 2014

Veyance

EBITDA margin

158

Status: December 31, 2014

before any disposals

1 Average EUR/USD exchange rate 2014: 1.3293

Share of sales in %

Fluid Technology

32%

Conveyor Belt

46%

CAGR

2.5%

Veyance Technologies Inc. 2014

› Sales: € 1.5 bn1

› EBITDA: € 207 mn1

› Employees: ~8,500

› Representations in over 27 countries

› Over 27 locations in 11 countries

› 16 R&D-locations

› 87% non-OE Automotive

IX. ContiTech Veyance at a Glance 2014

Sales [€ mn]


IX. ContiTech ContiTech and Veyance at a Glance 2014

2,869

3,931 1,203

1,466

2006 2014

Veyance

ContiTech

159

› Sales: ~ € 5.4 bn1

› EBITDA: ~ € 759 mn1

› Employees: ~ 41,000

› More than 120 locations worldwide

› Around 60 R&D-locations worldwide

› 54% non-OE Automotive

Share of sales in %

Fluid Technology

36%

Conveyor Belt

Group

22%

Power

Transmission

Group

12%

Benecke-

Kaliko Group

9%

Air Spring

Systems

8% Vibration

Control

6%

Elastomer

Coatings

2%

Compounding

Technology

5% Status: December 31, 2014

before any disposals

1 Average EUR/USD exchange rate 2013: 1.329

Sales [€ mn] CAGR

4%

EBITDA

margin 13.5% 14.1%

Air

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mate

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ses/h

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ustr

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bla

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ele

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Aerospace Industry X X X X X X X

Agriculture X X X X X X X X X X X X

Automotive Industry X X X X X X X X X X X

Comm. & Industry Vehicles/Buses X X X X X X X X X X X X X

Compressors X X X

Energy Industry X X X X X X X X X X X X

Food Industry X X X X X X X

Mechanical & Plant Engineering X X X X X X X X X X X X X X

Mining Industry X X X X X X

Occupational Safety X X X X

Printing Industry X X X X X X

Rail Transport Technology X X X X X X X X X X X

Shipbuilding and Ports X X X X X X X X X X X

X: ContiTech

X: Veyance

X: both

IX. ContiTech Product Overview

160


161

Topics







Market Data VII. 75




Glossary XI. 171

Share Data

Type of share No-par value share

Bloomberg ticker CON

Reuters ticker CONG

German security identification number (WKN) 543 900

ISIN number DE0005439004

Shares outstanding as at December 31, 2014 200,005,983

X. Share and Bond Information Share Data / ADR Data

162

ADR Data1

Ratio (ordinary share : ADR) 1:5

Bloomberg ticker CTTAY

Reuters ticker CTTAY.PK

ISIN number US2107712000

ADR level Level 1

Exchange OTC

Sponsor Deutsche Bank Trust Company Americas

1 As at February 2015.


X. Share and Bond Information Share Price Development vs. Major Stock Indexes

163 Source: Bloomberg, January 2015.

0%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1000%Ja

n-9

8

Ja

n-9

9

Ja

n-0

0

Ja

n-0

1

Ja

n-0

2

Ja

n-0

3

Ja

n-0

4

Ja

n-0

5

Ja

n-0

6

Ja

n-0

7

Ja

n-0

8

Ja

n-0

9

Ja

n-1

0

Ja

n-1

1

Ja

n-1

2

Ja

n-1

3

Ja

n-1

4

Continental DAX EURO STOXX 50 EURO STOXX Automobile & Parts

433 433

512 512 512 512 512

169 169

200 200 200 200 200

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014

Common stock (in mn €) Number of shares (in mn)

X. Share and Bond Information Common Stock

164


UK & Ireland 32.2%

Germany 10.5%

Germany (retail) 4.5% Scandinavia

4.3%

France 3.7%

Rest of Europe 3.4%

US & Canada 20.7%

Asia & Australia

5.4%

Unidentified 15.3%

X. Share and Bond Information Shareholder Structure

165

Free Float 54.0%

Schaeffler Group 46.0%

Shareholder structure

as at December 31, 2014

Shareholder structure

of the free float

(84.7% identified)

as at December 31, 2014

X. Share and Bond Information Bond Details

166

1 Guaranteed by Continental AG only since Apr. 24, 2014.

2 Non-contracted rating at date of issuance.

3 Fitch since Jul. 15, 2013; S&P since Dec. 6, 2013; Moody’s since Sept. 19, 2013.

4 Non-contracted rating since Feb. 1, 2014.

Issuer Conti-Gummi Finance B.V.,

Netherlands1 Continental AG Continental Rubber of

America, Corp., USA1 Continental AG

Issue Senior Notes Senior Notes Senior Notes Senior Notes

Principal amount €750 mn €750 mn $950 mn €750 mn

Offering price 99.595% 98.950% 100.000% 99.228%

Rating at issuance date

Ba1 (Moody’s4)

BB (S&P)

BBB (Fitch2)

Ba2 (Moody’s4)

BB (S&P)

BB (Fitch2)

Ba3 (Moody’s4)

BB- (S&P)

BB (Fitch2)

Ba1 (Moody’s4)

BB (S&P)

BBB (Fitch2)

Current corporation

and bond rating3 BBB (Fitch), BBB (S&P), Baa3 (Moody’s4)

Coupon 2.5% p.a. 3.0% p.a. 4.5% p.a. 3.125% p.a.

Issue date Sept. 19, 2013 Jul. 16, 2013 Sept. 24, 2012 Sept. 9, 2013

Maturity Mar. 20, 2017 Jul. 16, 2018 Sept. 15, 2019 Sept. 9, 2020

Start of period for early

redemption (60-90 days’

prior notice)

--- --- Sept. 15, 2015 ---

Interest payment Annual

Mar. 20

Semi annual

Jan. 16/Jul. 16

Semi annual

Mar. 15/Sept. 15

Annual

Sept. 9

WKN A1VC6B A1X24V A1G9JJ A1X3B7

ISIN XS0972719412 XS0953199634 DE000A1G9JJ0 XS0969344083

Denomination €1,000 with min. tradable

amount €1,000

€1,000 with min. tradable

amount €1,000

$1,000 with min. tradable

amount $150,000

€1,000 with min. tradable

amount €1,000


96

98

100

102

104

106

108

110

112

114

September 2012 September 2013 September 2014

2.5 % March 2017 3.0 % July 2018 4.5 % Sept. 2019 3.125 % Sept. 2020

February 23, 2015

(in%)

X. Share and Bond Information Development of the Bonds

167 Source: Bloomberg, February 2015.

X. Share and Bond Information Development of Continental’s Credit Rating

168

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

BBB+ / Baa1

BBB / Baa2

BBB- / Baa3

BB+ / Ba1

BB / Ba2

BB- / Ba3

B+ / B1

B / B2

S&P, Fitch / Moody’s Standard & Poor’s

1 Moody’s

2 Fitch

3

No

n-I

nv

estm

en

t

Gra

de

Inv

estm

en

t

gra

de

Before

Siemens

VDO

1 Solicited rating since May 2000. 2 Non-contracted rating since Feb. 1, 2014. 3 Solicited rating since November 2013.


X. Share and Bond Information 10 Year Financial Overview

169

1 Including non-controlling interests. 4 Excluding impairment on financial investments. 2 Capital expenditure on property, plant and equipment, and software. 5 Subject to the approval of the Annual Shareholders’ Meeting on April 30, 2015. 3 As a percentage of sales. 6 IAS 19 (revised 2011), Employee Benefits, has been applied since 2012.

2014 2013 2012 2011 2010 2009 2008 2007 2006 2005

Balance sheet

Non-current assets in € millions 16,923.3 15,569.5 15,685.7 15,075.5 14,887.9 14,724.6 16,348.4 17,383.9 5,877.9 5,193.8

Current assets in € millions 13,317.8 11,251.3 11,764.4 10,962.9 9,502.6 8,324.6 8,339.5 10,353.7 4,975.1 5,353.9

Total assets in € millions 30,241.1 26,820.8 27,450.1 26,038.4 24,390.5 23,049.2 24,687.9 27,737.6 10,853.0 10,547.7

Shareholders' equity (excl. non-controlling

interests) in € millions 10,672.1 9,011.2 7,779.0 7,146.1 5,859.6 3,772.6 5,265.4 6,583.2 4,470.8 3,574.2

Non-controlling interests in € millions 352.5 311.0 377.4 397.2 343.3 289.1 264.5 272.9 239.1 220.8

Total equity (incl. non-controlling interests) in € millions 11,024.6 9,322.2 8,156.4 7,543.3 6,202.9 4,061.7 5,529.9 6,856.1 4,709.9 3,795.0

Equity ratio1

in % 36.5 34.8 29.7 29.0 25.4 17.6 22.4 24.7 43.4 36.0

Capital expenditure2

in € millions 2,045.4 1,981.1 2,019.4 1,711.3 1,296.4 860.1 1595.2 896.9 805.0 871.8

Net indebtedness in € millions 2,823.5 4,289.3 5,319.9 6,772.1 7,317.0 8,895.5 10,483.5 10,856.4 1,181.0 493.2

Gearing ratio in % 25.6 46.0 65.2 89.8 118.0 219.0 189.6 158.3 25.1 13.0

Income statements

Sales in € millions 34,505.7 33,331.0 32,736.2 30,504.9 26,046.9 20,095.7 24,238.7 16,619.4 14,887.0 13,837.2

Share of foreign sales in % 76.6 76.2 75.4 73.7 72.8 71.0 68.5 69.2 67.6 65.8

Cost of sales3

in % 74.9 76.6 78.3 79.0 77.8 80.0 80.4 75.8 75.3 74.6

Research and development expenses3

in % 6.2 5.6 5.3 5.3 5.6 6.7 6.2 5.0 4.5 4.3

Selling expenses3

in % 5.3 5.0 4.8 4.7 5.0 5.6 4.9 5.5 5.7 6.1

Administrative expenses3

in % 2.2 2.1 2.0 2.1 2.5 3.0 3.2 2.7 3.0 3.1

EBITDA in € millions 5,133.8 5,095.0 4,967.4 4,228.0 3,587.6 1,591.2 2,771.4 2,490.6 2,301.5 2,248.9

EBITDA3

in % 14.9 15.3 15.2 13.9 13.8 7.9 11.4 15.0 15.5 16.3

Personnel expenses in € millions 7,757.2 7,124.5 6,813.7 6,354.3 5,891.7 5,199.8 5,746.3 3,652.7 3,175.2 3,054.3

Depreciation and amortization4

in € millions 1,789.0 1,831.3 1,781.2 1,631.1 1,652.4 2,631.6 3067.6 814.8 699.6 741.8

Net income attributable to the

shareholders of the parent in € millions 2,375.3 1,923.1 1,905.2 1,242.2 576.0 -1,649.2 -1,123.5 1020.6 981.9 929.6

Dividend and earnings per share

Dividend for the fiscal year in € millions 650.0 500.0 450.0 300.0 — — — 323.4 293.1 145.9

Number of shares

at December 31 in millions 200.0 200.0 200.0 200.0 200.0 169.0 169.0 161.7 146.5 145.9

Net income (per share) attributable to the

shareholders of the parent € 11.88 9.62 9.53 6.21 2.88 -9.76 -6.84 6.79 6.72 6.38

Employees

Annual average in thousands 186.0 175.4 169.0 159.7 142.7 133.4 148.4 93.9 81.6 81.1

6

5

170

Topics







Market Data VII. 75




Glossary XI. 171


ADR American Depositary Receipt

Capex Capital expenditure on property, plant and equipment, and software

EBIT Earnings Before Interest and Taxes

EBITDA EBIT Before Depreciation and Amortization

EBIT margin EBIT as a percentage of sales

EBITDA margin EBITDA as a percentage of sales

FCF Free Cash Flow. We define FCF as cash provided by operating activities minus cash used for investing

activities

Gearing ratio Represents the net indebtedness divided by total equity, expressed as a percentage

ISIN International Securities Identification Number

Net indebtedness The net amount of interest-bearing financial liabilities as recognized in the statement of financial position,

cash and cash equivalents, the positive fair values of the derivative instruments as well as other interest

bearing investments.

NIAT Net Income Attributable to the shareholders of the parent

OA Operating assets are the assets less liabilities as reported in the balance sheet, without recognizing the net

indebtedness, discounted trade bills, deferred tax assets, income tax receivable and payable, as well as other

financial assets and debts.

PPA Purchase Price Allocation

R, D & E expenses Research, Development and Engineering Expenses

ROCE (average) Return On Capital Employed. We define ROCE as the ratio of EBIT to average operating assets for the fiscal

year

XI. Glossary Financial Glossary

171

ABS Anti-Lock Brake System

ACC Adaptive Cruise Control

ADAS Advanced Driver Assistance Systems

CAGR Compound Annual Growth Rate

C&S Chassis & Safety Division

CT ContiTech Division

CV Commercial Vehicle

CVT Commercial Vehicle Tires

ECU Electronic Control Unit

EBS Electronic Brake System

ESC Electronic Stability Control

HEV Hybrid Electric Vehicle

HMI Human Machine Interface

I Interior Division

172

LT Light Truck

NVH Noise Vibration Harshness

PC Passenger Car

PLT Passenger and Light Truck Tires

PT Powertrain Division

RV Recreational Vehicle

SSR Self-Supporting Runflat Tires

SUV Sport Utility Vehicle

TCS Traction Control System

TPMS Tire Pressure Monitoring System

XI. Glossary Product and Division Glossary


Contact Data

173

Vahrenwalder Str. 9 Klaus Paesler

30165 Hanover Phone: +49 511 938 1316

Germany e-mail: [email protected]

Rolf Woller Sabine Reese

Phone: +49 511 938 1068 Phone: +49 511 938 1027

e-mail: [email protected] e-mail: [email protected]

Ingrid Kampf Michael Saemann

Phone: +49 511 938 1163 Phone: +49 511 938 1307

Fax: +49 511 938 1080 e-mail: [email protected]

e-mail: [email protected]

www.continental-ir.com Henry Schniewind

Phone: +49 511 938 1062

e-mail: [email protected]

Financial Calendar

174

2015

Annual Financial Press Conference March 5, 2015

Annual Shareholders’ Meeting April 30, 2015

Q1 Financial Report May 7, 2015

Half Year Financial Report August 4, 2015

Nine Month Financial Report November 9, 2015

2016

Annual Financial Press Conference March 2016

Annual Shareholders’ Meeting April 29, 2016

Q1 Financial Report May 2016

Half Year Financial Report August 2016

Nine Month Financial Report November 2016


mailto:[email protected]





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





Continental Aktiengesellschaft

Investor Relations

P.O. Box 169, 30001 Hanover, Germany

Vahrenwalder Str. 9, Hanover, Germany

Phone +49 511 938-1163, Fax +49 511 938-1080

E-mail [email protected]

www.continental-ir.com

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Football Championship™