sustainability / esg presentation january 2020 · sustainability / esg presentation january 2020...

Sustainability / ESG PresentationJanuary 2020

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

Sustainability / ESG Presentation

January 2020

Environmental Responsibility

4 20

Agenda

2EDMR – Equity and Debt Markets Relations

1 3

Supply Chain2 12

3 17

Social Responsibility

Sustainability at Continental

26

Corporate Governance5 36


January 2020


1) Sustainability at Continental Corporate Strategy at a Glance


January 2020

Environmental

Responsibility

Employees

and Society

Environment, Safety and Health (ESH) Policy – defines

worldwide principles for safety, health and environmental

protection

Code of Conduct – ethical standards and requirements

concerning employee behavior

Business Partner Code of Conduct – ethical standards and

requirements which we expect our business partners to adhere to

Corporate Governance Policy – to foster the responsible

management of the company focused on value creation

Quality Policy – aims at customer satisfaction as an overarching

goal

Risk Report – overview of our Risk Management

OUR BASICS Our Corporate Guidelines

Corporate

Governance

4

1) Sustainability at Continental Our Key Policies and Guidelines

EDMR – Equity and Debt Markets Relations


January 2020


1) Sustainability at Continental Sustainability Governance

▪ Dr. Ariane Reinhart (Executive Board member

responsible for Human Relations and Sustainability)

▪ Wolfgang Schäfer (CFO)

▪ Corporate Sustainability department

▪ Relevant business areas and central functions

▪ Other experts (on request)

Interdisciplinary and cross-divisional

Corporate

sustainability

department

Continental Sustainability Committee Continental AG

Executive Board

Steering and implementation Decision-making

Updated sustainability strategyCurrent focus topics Strategic planning process

2018 2019 2020+

Timeline for strategy development:

Strategic

coordination

Business areas/

central

functions

Our ambition:

Continental creates

meaningful positive

impact


January 2020

Status Quo: Certified quality management

systems according to ISO 9001 o.s.

› Our group-wide global quality policy aims at customer

satisfaction as an overarching goal

› Operationalized by five strategic initiatives with

leadership culture as a foundation

› Global quality management organization directly

reporting to CEO to implement policy

~90%

total workforce covered by certification

6

1) Sustainability at Continental Quality First – Reliable Products by Continental



January 2020

Consolidated sales of products in 2018

that reduce energy consumption and / or

emissions

› Virtual A-Pillar: By pairing its interior camera and

integrated OLED displays in the vehicle’s A-pillar, forward

blind spots are eliminated.

› Eco Tires: EcoContact 6 delivers maximum fuel efficiency

and optimized grip thanks to improved component

geometry and efficient silica distribution.

› Super Clean Electrified Diesel: By making various

modifications to a Euro 6 Diesel standard vehicle,

Continental engineers were able to massively reduce real

driving emissions (NOx and CO2).

› “People’s-Hybrid”: The hybrid with 48-volt technology

uses up to 21% less fuel, is relatively affordable and is

usable in all vehicle classes.

› Digital Air Spring System: This revolutionary technology

allows the driver’s cab to be regulated electronically, thus

reducing fuel consumption.

~40%

› Examples:

7

1) Sustainability at ContinentalInnovative Products – Sustainable Mobility: Clean, Safe & Affordable



January 2020


1) Sustainability at Continental Stakeholder Dialog

Stakeholder Format

› Customers Key Account Management, partnerships, trade fairs

› Suppliers Workshops, open days

› Investors and shareholders Annual Shareholders‘ Meeting, webcasts, roadshows

› Employees Employee surveys, town hall meetings, webcasts, employee representatives

› Civil society Surveys, open days, trade fairs, engagement projects

› Politics Open days, trade fairs, engagement projects

Source: Sustainability Report 2018, page 11.

https://www.continental.com/resource/blob/177192/8e94ef65da50bdd033287301356aab36/sustainability-report-2018-data.pdf


January 2020

Source: https://www.ecpigroup.com; https://www.cdp.net; https://www.sustainalytics.com; https://www.msci.com; https://www.ecovadis.com/.

› Continental is listed in the following indexes:

9

1) Sustainability at Continental Ratings and Indexes

› Ratings:

› Prime (C+) (2019) › Climate: Score B (2018)

› Water: Score B- (2018)

› Supply Chain: Score A;

Supplier Engagement

Leader Board (2018)

› Gold Status (2019)

› 65 /100

› Best 5% of companies

› BBB (June 2019) › Outperformer (2019)

73 / 100



January 2020

Source: www.charta-der-vielfalt.de (German Federal Government Commissioner for Migration, Refugees and Integration); www.luxemburger-deklaration.de; www.globalcompact.de; http://www.wbcsd.org;

http://www.erscharter.eu; http://www.weprinciples.org; http://www.snr-i.org/; https://econsense.de/.

10

1) Sustainability at ContinentalContinental’s Memberships



January 2020


Our commitment is reported within the

›Webpage Sustainability

›2018 Sustainability Report

The 2018 report is prepared according to Global

Reporting Initiative (GRI) standards. Since 2011 the

Sustainability Report is issued annually.

›Annual Report 2018, page 48: Combined Non-Financial

Statement

1) Sustainability at Continental Publications

https://www.continental-corporation.com/en/sustainability/sustainability

https://www.continental.com/en/sustainability/sustainability/reporting-and-general-topics-62992

https://www.continental-corporation.com/resource/blob/167610/6f107b888fd556412c6b263b67d60075/annual-report-2018-data.pdf

https://www.continental-corporation.com/resource/blob/125820/3f0341f3ed800b984ada5d3f9f03f693/non-financial-declaration-data.pdf


January 2020

› Responsible sourcing anchored in our General Purchasing

Terms and Conditions

› Business Partner Code of Conduct mandatory for suppliers

since 2011

› Dedicated initiatives on natural rubber:

› Launch of new policy for Sustainable Natural Rubber

in 2018

› Cooperation with GIZ1 on sustainable small-holder

rubber farming

› Participant of global industry platform (GPSNR2),

launched by WBCSD3 Tire Industry Project

1 German Society for International Cooperation (Gesellschaft für internationale Zusammenarbeit).2 Global Platform for Sustainable Natural Rubber.

Supplier Assessment as at Dec. 31, 2018

750 selected suppliers assessed on their sustainability

performance via

12

2) Supply Chain ManagementPurchasing and Responsibility

3 World Business Council for Sustainable Development.


ecovadis

NQC


January 2020


› Rubber Group introduced 3rd party supply chain CSR assessment tool based on UN

Global Compact, ISO26000 and Global Reporting Initiative

› >80% of annual spent already covered

› Upon findings buyers will request and monitor improvement actions

2) Supply Chain Management Supply Chain - Evaluation of Raw Material Suppliers


January 2020


Continental acknowledges challenges in the Natural Rubber

supply chain related to environmental, social and human

rights impacts.

With the SNR Procurement Policy Continental commits to

work towards SNR in a multi-stakeholder approach and set

requirements for our supply chain.

Continental contributes to the GPSNR (Global Platform for

SNR) to be launched Oct, 25th 2018 by WBSCD1 Tire Industry

Project.

1 World Business Council for Sustainable Development.

2) Supply Chain ManagementSupply Chain - Sustainable Natural Rubber (SNR) Policy


January 2020


Partnership between Continental and Deutsche Gesellschaft für Internationale

Zusammenarbeit (GIZ).

Goal: Development of a training for farmers in sustainable production of natural rubber

and to track the rubber from smallholders to production at Continental.

Pilot project: 400 farmers will be trained to grow high-quality rubber in accordance with

clearly defined sustainability criteria.

Improved rubber quality, higher yields and supply chain optimization will generate higher

incomes for rubber tree cultivators.

Improvement livelihoods of rubber tree farmers in Indonesia.

2) Supply Chain Management Supply Chain - Project Sustainable Natural Rubber


January 2020


Improvement of the environmental performance of our suppliers in Mexico.

The aim of the initiative was to train and help the

suppliers to establish and enhance their own

environmental and energy management systems.

Over a two-year period ten selected suppliers

received training in the areas of environmental and

energy management.

This project will be continued and opened up to

additional suppliers under the motto: „Improve

sustainability – One For Another!“

Further information is available on the project website.

923 megawatt hoursenergy

210 tonswaste

4,600 m3

755 tonsCO2 emissions

Savings during the project

water

2) Supply Chain Management Supply Chain - Project Environmental Performance

https://sustainabilitynetwork.net/


January 2020

CO2-neutral value chain


3) Environmental Responsibility Environmental Strategy 2050

Source: www.continental-sustainability.com

› Guided by the United Nations’ sustainable

development goals (SDGs)

› Commitment to the two-degree target

under the Paris climate agreement

2020

20502040

Use of electricity from

renewable sources in all

production sites

CO2-neutral production



January 2020

100%reduction of: • CO2 emissions related to

electricity (scope 2) by 2020

• total CO2 emissions from production (scope 1 and scope 2) by 2040

• total CO2 emissions from supply chain (scope 1, 2 and 3) by 2050

20%kWh/sales reduction by 2030 compared to 2018

4%reduction of water demand per year based on sales in water stress high risk areas

2%reduction of waste generation per year based on sales


3) Environmental Responsibility Environmental Strategy 2030 / Our Goals

CO2 emissions Energy Water Waste

2%reduction of water demand per year based on sales in water stress medium and low risk areas

1 TWhreduction of external energy demand by energy efficiency projects in 2020 until 2030

95%improvement of the recycling quota by 2030

Source: www.continental-sustainability.com



January 2020


Continental established an environmental management

system throughout the corporation more than 30 years ago.

2) Environmental ResponsibilityStatus of Environmental and Energy Certification at Continental

Source: Continental Annual Report 2018, page 52.

Production & Development

Locations worldwide

Thereof

ISO 14001

certified

Thereof

ISO 5001

certified

90 locations

≙ 50% of

workforce

200 locations

≙ 80% of

workforce

› Our activities are geared toward continually

optimizing the use of resources in relation to

business volume.

› We manufacture products that make an active

contribution toward protecting the environment

and conserving resources throughout their entire

duration of use as well as when they are

ultimately recycled.

https://www.continental.com/resource/blob/167610/6f107b888fd556412c6b263b67d60075/annual-report-2018-data.pdf


January 2020

› Global ESH policy managed by

particular ESH organization

› Commitment to environmental

protection, especially to the

reduction of resource use and

climate protection

› Strategy 2020: to cut specific

inputs and outputs (energy, water,

waste and CO2) by 20% compared

to 2013 baseline

› ISO 14001 certification covers

>80% and ISO 50001 ~50% of

our total workforce worldwide

Environmental data1 Unit 20174 20185 ∆ 2017

Track record:

∆ 2013

Total energy use2 TWh 9.5 9.9 +4% +29%

Specific energy use2 MWh / € mn 218 223 +2% -3%

Total water demand mn m3 19.8 20.6 +4% +27%

Specific water demand m3 / € mn 456 465 +2% -5%

Total waste generation t 379,992 419,426 +10% +50%

Specific waste generation t / € mn 8.8 9.5 +8% +13%

Thereof: Waste recycled % of total waste 81 78 -3%-p. -6%-p.

Total CO2 emissions (Scope 1+2)3 mn t CO2 3.2 3.3 +4% +31%

Specific CO2 emissions (Scope 1+2)3 t CO2 / € mn 73 74 +1% -2%

1Based on the environmental data system which includes the relevant production and development sites, excluding fleet

consumption. Definitions based on Global Reporting Initiative (GRI). Specific data refers to the adjusted sales in the

respective year.2Fossil energies as well as electricity and steam.3According to Greenhouse Gas Protocol (Scope 2: location-based) on the basis of energy use reported as well as emission

factors of Defra (2016) and IEA (2017).4Data with external limited assurance.5Data with external reasonable assurance.


3) Environmental Responsibility Environmental Management


January 2020


90%less energy

90%less raw material

less CO2 emissions50-90%

Remanufacturing is a standardized industrial process and an integrated part of our service strategy. Rather than

manufacturing products from scratch, Continental remanufactures existing products by repairing and replacing

components with new original Continental parts. For the circular economy we save energy, water, material and

costs to make renewed products for a sustainable future.

up to

used

produced

up to

consumed

3) Environmental Responsibility Automotive - Remanufacturing


January 2020


4%

36%

46%

12%2%

Civil Engineering Recycling Energy Reuse/Export Landfill

End-of-life tires in the European Union1

A total of approximately 3.25 million tons of used tires accumulate

in the EU per year.

Recycling versus raw material2

Energy needed to produce 1kg of tire compound

From Raw Material

From Recycled Material

82

8.7

MJ per kg tire compound

1 Source: ETRMA, June 29, 2016. 2 Source: Continental Reifen Deutschland.

3) Environmental Responsibility Tires – Recycling and Recovery


January 2020

8,000 tons

Breathing life into tires a second and even a third time

is the basic idea behind the ContiLifeCycle approach.


Using a novel and proprietary process, Continental has succeeded in

recycling rubber from used tires in such a way that the raw material will

be directly returned into the production cycle for new or retreaded tires.

At ContiLifeCycle (CLC) plants, we reprocess worn-out truck tires in a

retreading process that conserves resources. The rubber powder that

is produced during retreading is further processed into recyclate, which

is used in the production of new and retreaded tires.

The retreaded tires offer the same performance characteristics and

rolling resistance as new tires.

4,000 tons

Recycling

of used rubber in

the recycling plant

saves

of CO2 per year

less water

of natural

rubber

80%

80%50%less energy

less waste2,400

less tons

3) Environmental Responsibility Tires – ContiLifeCycle


January 2020

The natural rubber made from dandelion roots has the same quality and

performance characteristics as conventional rubber from rubber trees.

The plants can be cultivated in moderate climates, e.g. Northern and Western

Europe or North America. Having plantations next to the tire plants in Central

Europe makes both economic and ecological sense.

At the end of 2018, Continental opened the “Taraxagum Lab Anklam” research

and test laboratory for dandelion rubber to provide a base for future research into

the cultivation and processing of dandelions.

The new dandelion rubber Taraxagum should enter production within the next

five to ten years and then flow step-by-step into our rubber products.

Benefits:

› Reduction in dependency on harvest situations in subtropical regions

› Higher flexibility due to (bi-)annual cultivation period

› Lower environmental impact due to reduced logistic requirements

› Optimal material properties enable first-class products in terms of technology

› Innovation and the Green Award both at

the international trade fair Automechanika

2016

› Joseph von Fraunhofer Prize 2015

› GreenTecAward 2014

Funded by the European Union by the operational program of the ERDF during the 2014 - 2020 funding period.


3) Environmental Responsibility Diversification of Sourcing: Rubber from Dandelions


January 2020


Technological expertise for customer-specific solutions

Health-friendly

interiors

Climate-friendly

printing blankets

Mounts for

wind power

Flexible insulation

for energy saving

Hoses for energy

storage in the sea

Printing technology for

printed electronics/solar cells

Rubber tracks

for more efficiency

Components for engine downsizing

and emissions reducing

3) Environmental Responsibility Sustainable Product-Solutions for a Variety of Industries by ContiTech


January 2020


Continental’s Code of Conduct describes the basic values and principles which are binding for all Continental employees

during their everyday work and when dealing with colleagues, customers and other company stakeholders.

It regulates the following issues:

› Compliance with the Continental Code of

Conduct

› Responsibilities for Our Action and Behaviour

› Compliance with Laws, Regulations, and

Continental Corporate Rules, Standards and

Instructions

› Discrimination or Harassment

› Respect for Human Rights and fair working

conditions

› Health, Safety, Evironment and Product

Integrity

› Fair Dealing

› Compliance with Antitrust Laws

› Anti-Corruption

› Anti-Money Laundering

› Conflicts of Interest

› Use of Continental Company Property

› Data Protection and Cybersecurity

› Confidential Information and Intellectual

Property

› Export and Import Regulations

› Tax Compliance

4) Social ResponsibilityCode of Conduct


January 2020


This Business Partner Code of Conduct highlights important standards that are consistent with Continental’s values and

which we expect each Business Partner including, but not limited to suppliers, consultants, vendors, brokers, merchants,

dealers, contractors, agents and others, to observe and strictly adhere to.

It regulates the following issues:

› Our Corporate Social Responsibility

› Compliance with Laws, Rules

and Legal Regulations

› Combating Slavery and Human Trafficking

› Compliance with Antitrust Laws

› Combating Corruption

› Conflict Minerals

› Export and Import Regulations

› Prevention of Money Laundering

› Conflict of Interest

› Respect of Human Rights,

Anti-Discrimination and Women’s

Empowerment

› Product Safety, Health, and Environment

› Data Protection, Confidential Information

and Intellectual Property

› Compliance with this

Business Partners Code

4) Social ResponsibilityBusiness Partner Code of Conduct


January 2020

› Freedom of association

› Abolishment of forced labor

› Abolishment of child labor

› Freedom from discrimination

Implementation:

› Coordination of work through newly established

human rights expert role

› Promotion through internal labor relations

network covering more than 70% of our

employees worldwide

› Training of employees on Code of Conduct

› Additional specific purchasing requirements for

sustainable natural rubber

› Assessment of suppliers via Ecovadis and NQC

› (Suspected) violations can be reported to global

compliance hotline

Commitment to

human rights and

ILO1 Core Labor

Standards:

Adopted into:

Continental Code of Conduct

Continental Business Partner

Code of Conduct

1 International Labor Organization.

EDMR – Equity and Debt Markets Relations 28

4) Social Responsibility – Human RightsClear Expectations at Continental


January 2020

› Total workforce of 243,226, thereof 228,922 own employees in 2018 – to grow further

Key achievements in 2018:

› Further development of our strategic workforce planning processes covering 97% of own employees

› Global talent management conferences

› Certification of global talent management process according to ISO 29990

› Introduction of Microsoft Office 365 for digital collaboration

› Introduction of digital learning management platform

› Extension of certification for health & safety management systems (around 2/3 of total workforce are now covered)

Enable Transformation:› Talent Management

› Data Management

Industrialize Best Fit› Diversity

› Leadership

› Flexibility

› Learning

Common work is based on:

Corporate Values (“BASICS”) & Rules (incl. Code of Conduct)

Core initiatives:

HR to Enable Business


4) Social Responsibility – EmployeesHuman Relations Strategy to Enable Business


January 2020

Global Flexible Working Conditions at Continental1 (established in 2016)

› Part-time

› Flextime

› Mobile working

› Sabbaticals

After we defined the global framework for flexible working conditions at the end of 2016, the next two years were

characterized by the global implementation of the measures. In 21 countries, with over 95% of the workforce,

employees can make their ways of working more flexible. Various models began to be developed in the production

locations to expand these opportunities more specifically in the production environment.

30

1 Source: Based on information in the Annual Report 2018, page 50.


4) Social Responsibility – EmployeesDiversity and Equal Opportunity – Work-life Balance


January 2020

These objectives are reviewed on the executive level on a quarterly basis. The goal is to increase the proportion of women

at the upper and middle management tiers. The Global Diversity Network, an umbrella organization for women’s networks

at our company, was established to support women’s career development. It supports networking activities in the countries

in which we operate. A program has also been set up to boost the effectiveness and careers of young women.


Definition of clear objectives for all business units when it comes to promoting woman.

9.0 9.7 10.512.2 13.4

14.8 16

25

0,0

5,0

10,0

15,0

20,0

25,0

2013 2014 2015 2016 2017 2018 Target 2020 New Target 2025

Female employees in management positions in %

4) Social Responsibility – EmployeesDiversity and Equal Opportunity


January 2020


Employees by region in 2018

Germany26%

Europe (excluding Germany)

32%

Asia20%

NAFTA18%

Other countries4%

2018 2017

› Total number of employees 243,226 235,473

› Permanent staff 228,922 219,687

› Leasing workers 14,303

› Fixed-term contracts including leasing

worker contracts as %

15.8 17.0

› Female employees as %

of the global workforce

27.5 27.2

› Employees working part-time

as % of the global workforce

3.0 2.5

› Fluctuation unforced as % 6.3 5.7

4) Social Responsibility – EmployeesStructure of Workforce


January 2020

Our specialist department Corporate Safety & Health ‘‘Safety, Health, Hazardous Substances, Ergonomics’’ sets protection

standards, which apply across the entire Corporation. The Continental ESH Management System meets the international

standard for occupational safety management ISO 45001. The percentage of occupational safety management system

certifications was already at level of two thirds of the total workforce as at December 31, 2018.

1 Paid and unpaid absences due to sickness in relation to the contractual working hours in percent (for the corporation).

2 Number of industrial accidents resulting in the loss of one or more working-day equivalents per one million hours worked.

Absences due to sickness (%)1

3.53.0 3.2 3.2 3.3

2012 2014 2016 2017 2018


Number of accidents2

3.63.0 2.9 3.2 3.4

2012 2014 2016 2017 2018

4) Social Responsibility – EmployeesHealth and Occupational Safety


January 2020

› Our activities are based on the corporate values, internal rules and standards as well as local laws.

› We contribute to social activities with partnerships as well as charitable and in-kind donations, and we support volunteering activities at our locations worldwide.

Employees donate € 15,000 to

charities in Germany

Employees help renovate schools in

Hungary, Mexiko and Romania

Experiencing Europe: Internships

for young people in Europe

Continental Youth Safe Driving

Program in China

Selected examples of our social activities worldwide:


4) Social Responsibility – SocietySocial Commitment


January 2020

35

The aim of the initiative is to invite young African managers from Sub-

Saharan Africa to Germany for one year in order to support them and get

them used to the country. At the same time, the program paves the way for

lasting economic cooperation in Africa.

Continental integrates young refugees into the working world, offering

them prospects for a brighter future. More than 20 refugees are currently

undertaking apprenticeships. 2016 was the first year we opened up our

initial qualification programs 50 refugees. And over the course of the

current year we have added 25 more spots.

Continental Offers Opportunities

to Refugees

Continental has launched a program specifically for young people.

Together with Germany’s Federal Employment Agency, we offer jobseekers

aged 18 to 25 short internships at our locations elsewhere in Europe.

Young people who have not yet gained any professional experience or

completed a degree are eligible to take part.

‚Experiencing Europe‘


4) Social Responsibility – SocietySocial Commitment

https://www.continental-corporation.com/en/press/press-releases/-we-l-o-v-e--europe---europa-without-borders----continental-launches-pilot-project-for-a-strong-europe-64272

https://www.continental-corporation.com/en/sustainability/society/initiative-promotes-intercultural-exchange-47844

https://www.continental-corporation.com/en/career/working-at-continental/your-employer/continental-offers-opportunities-to-refugees-99082

https://www.continental-corporation.com/en/sustainability/society/-experiencing-europe--98960

https://www.continental-corporation.com/en/sustainability/csr-news/news-2017/experience-europe-98876


January 2020

First version published in 2002:

› The Code addresses all major criticisms – especially from the international

community – leveled against German corporate governance.

› Observes the development of corporate governance in legislation and practice

and reviews the Code at least once a year for possible adaptation.

Some topics from the update in February 2017:

› Executive and Supervisory Board shall ethically sound and responsible behave

(the “reputable businessperson” concept, Leitbild des Ehrbaren Kaufmanns).

› Early disbursements of multiple-year, variable remuneration components for the

Executive Board should not be permitted.

› The Supervisory Board Chair should be available – within reasonable limits – to

discuss Supervisory Board-related issues with investors.


5) Corporate GovernanceGerman Corporate Governance Code / Background


January 2020


Continental deviates from one recommendations of the Code1.

Declaration in accordance with Section 161 AktG.

Continental has complied with and will comply with the recommendations issued

by the “Government Commission on the German Corporate Governance Code”

(as amended on February 7, 2017) subject to the following qualifications.

Deviations from recommendations

Section 5.4.1 para 2

To establish an age limit for the

Supervisory Board members.

1 As of December 2018. Update is prescribed by law once a year.

37

Derivations from suggestions

Section 3.7 para 3

An extraordinary Annual Shareholders’

Meeting in all cases of takeover bids.

5) Corporate GovernanceGerman Corporate Governance Code


January 2020

Shareholders’ Meeting

Shareholders’ exercise their rights of participation and control

ReportsRatifiesElects shareholder representatives

ReportsRatifies

Executive Board

20 members

10 shareholder representatives

10 employee representatives

Involved in decisions of fundamental

significance to the company

8 members

Responsible for managing the

company in accordance with the

law, the Articles of Incorporation,

and the By-Laws of the Supervisory

and Executive boards, while taking

into account the resolutions of the

Shareholders’ Meeting

Reports

Appoints,

monitors

and advises

Supervisory Board

Chairman’s Committee

Mediation Committee

Audit Committee

Nomination Committee

›

›

›

›

›

›

› › › › ›


5) Corporate GovernanceTwo-Tier Board System – Corporate Bodies


January 2020

Dr. Elmar Degenhart

Chairman of the Executive Board

Born in 1959

Appointed since 2009 until August 2024

Frank Jourdan

Chassis & Safety Division

Born in 1960

Appointed since 2013 until March 2024

Helmut Matschi

Interior Division

Born in 1963


Wolfgang Schäfer

Chief Financial Officer

Born in 1959

Appointed since 2010 until December 2024

Hans-Jürgen Duensing

ContiTech Division

Born in 1958

Appointed since 2015 until April 2023


Dr. Ariane Reinhart

Human Relations

Born in 1969

Appointed since 2014 until September 2022

Nikolai Setzer

Spokesman of the Automotive Board

Born in 1971


Dr. Elmar Degenhart

Chairman of the Executive Board

Born in 1959

Appointed since 2009 until August 2024

Christian Koetz

Tire Division

Born in 1970


5) Corporate GovernanceExecutive Board Continental AG


January 2020

Prof. Dr.-Ing. Wolfgang Reitzle (Chairman)Chairman of the Supervisory Board of Linde AG

*1949, nationality: German, elected until 2024, first elected 2009

Memberships1: 6 (4 as chairman)

Satish Khatu Management Advisor

*1952, nationality: USA, elected until 2024, first elected 2019

Memberships1: None

Sabine Neuß Chief Operation Officer of Kelvion Holding GmbH


Memberships1: 1

Dr. Gunter Dunkel Chairman European Debt, Muzinich & Co

*1953, nationality: Austrian, elected until 2024, first elected 2009

Memberships1:None

1Memberships in other supervisory boards mandated by law or comparable domestic or foreign control committees as at April ,2019.


Isabel Corinna Knauf Member of the Group Management Committee at the Knauf Group



Prof. Dr. Rolf Nonnenmacher Member in various supervisory boards


Memberships1: 3

5) Corporate GovernanceSupervisory Board Continental AG – Shareholder Representatives


January 2020

1Memberships in other supervisory boards mandated by law or comparable domestic or foreign control committees as at April, 2019.

Klaus Rosenfeld Chief Executive Officer of Schaeffler AG, Herzogenaurach


Memberships1: 2

Georg F. W. Schaeffler Shareholder of INA-Holding Schaeffler GmbH & Co. KG and

Managing Director of IHO Verwaltungs GmbH



Maria-Elisabeth Schaeffler-ThumannShareholder of INA-Holding Schaeffler GmbH & Co. KG and

Managing Director of IHO Verwaltungs GmbH


Memberships1: 1 (1 as vice chairman)

Prof. KR Ing. Siegfried WolfEntrepreneur

*1957, nationality: Austrian, elected until 2024, first elected 2010



5) Corporate GovernanceSupervisory Board Continental AG – Shareholder Representatives


January 2020

Remuneration of an Executive Board member responsible for a division (example)

EDMR – Equity and Debt Markets Relations42

Target remuneration (100% target

achievement)

Maximum remuneration

0

1

2

3

4

5

6

Fixed

remuneration

Additional

benefits

Service

costs

Performance

bonus (immediate

payment: 60%)

Performance

bonus

(deferral: 40%)

Long-term

incentive

Total

remuneration

€ mn

(Converted into virtual shares.3-year holding period)

(4-year term)

Variable remuneration elements

Minimumremuneration

1 Average.2 Based on a target bonus (here: €1.167 million), for 100% achievement of defined CVC and ROCE targets, maximum

of 150% of the target bonus (including achieving any additional strategic targets as well as any correction of the target

achievement of +/- 20% by the Supervisory Board), divided into an immediate payment (60%) and deferral (40%).3 The possible increase in the value of the deferral is capped at 250% of the initial value. The maximum amount shown

relates to the maximum payment in the performance bonus at 150% target achievement.4 Based on achieving average CVC versus planned CVC (max. 200%), multiplied by the degree of achieving the total shareholder return, maximum payment of 200%.

5) Corporate GovernanceRemuneration of an Executive Board member


January 2020

1 Basis for calculation: €90 for each cent of earnings per share over €2, calculated as an average of the last three years.

1

Remuneration of a Supervisory Board member (example)


0

25

50

75

100

125

150

175

200

225

Fixed remuneration Additional benefits

(meeting fees)

Variable

remuneration

Total remuneration

€ thousands

43

5) Corporate GovernanceRemuneration of a Supervisory Board member


January 2020


› Continental ranks 3 out of 30 in the 2018 DVFA Scorecard survey with 86.55%.

› About the Scorecard for German Corporate Governance:

› Corporate Governance (CG) comprises competencies, communication and monitoring on the part of

the decision-making bodies of publicly-traded companies.

› The scorecard was designed as a professionally suitable analytical tool for analysts, investors and

companies for evaluation of all relevant factors.

› It includes about 50 measures for the comprehensive implementation of Corporate Governance -

separated according to the criteria

› CG commitment

› shareholder rights

› transparency

› company management and

› auditing.

Source: http://www.ecgi.org/codes/documents/scorecard_d.pdf; http://www.dvfa.de/fileadmin/downloads/Verband/Gremien/Corporate_Governance/Gesamtscore_Methodik_DVFA_Scorecard_for_CG_DAX30_2018.pdf.

5) Corporate GovernanceDVFA Scorecard / German Corporate Governance Code


January 2020

Source: Sustainability Report 2018, page 47.


5) Corporate GovernanceRisk Reporting

https://www.continental.com/resource/blob/177192/8e94ef65da50bdd033287301356aab36/sustainability-report-2018-data.pdf


January 2020

The Executive Board is fully committed to a zero

tolerance policy with regard to corruption and antitrust.

Corruption-related issues are reviewed in every general

audit.

Our Compliance & Anti-Corruption Hotline gives

employees and third parties outside the corporation the

opportunity to report violations of legal regulations,

fundamental values and ethical standards.

Source: Continental Annual Report 2018, page 53.


Compliance Trainings 2018 Approximate

› Online training sessions ~85,000

› Classroom training sessions ~360

› Online training completion rate >95%

5) Corporate GovernanceCompliance Management

https://www.continental.com/resource/blob/167610/6f107b888fd556412c6b263b67d60075/annual-report-2018-data.pdf


January 2020

Source: Sustainability Report 2017, page16.

We see significant corruption risks in the following areas:

› Facilitation payments

› Advisors/business intermediaries and slush funds

› Gratuities in business transactions that do not comply

with internal requirements, especially with high value

hospitality

› Kickback scenarios in purchasing and sales


5) Corporate GovernanceCompliance Management & Anti Corruption

https://www.continental.com/resource/blob/133572/6b5ca123fa3c6a3c2b9d38a3fd2d2984/sustainability-report-2017-data.pdf


January 2020

Disclaimer

› This presentation has been prepared by Continental Aktiengesellschaft and includes information available to us until January 2020. It has not been independently verified. It does not

constitute an offer, invitation or recommendation to purchase or subscribe for any shares or other securities issued by Continental AG or any subsidiary and neither shall any part of

it form the basis of, or be relied upon in connection with, any contract or commitment concerning the purchase or sale of such shares or other securities whatsoever.

› Neither Continental Aktiengesellschaft nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss that may arise

from any use of this presentation or its contents or otherwise arising in connection with this presentation.

› This presentation includes assumptions, estimates, forecasts and other forward-looking statements, including statements about our beliefs and expectations regarding future

developments as well as their effect on the results of Continental. These statements are based on plans, estimates and projections as they are currently available to the

management of Continental. Therefore, these statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new

information or future events. Furthermore, although the management is of the opinion that these statements, and their underlying beliefs and expectations, are realistic as of the date

they are made, no guarantee can be given that the expected developments and effects will actually occur. Many factors may cause the actual development to be materially different

from the expectations expressed here. Such factors include, for example and without limitation, changes in general economic and business conditions, fluctuations in currency

exchange rates or interest rates, the introduction of competing products, the lack of acceptance for new products or services and changes in business strategy.

› All statements with regard to markets or market position(s) of Continental or any of its competitors are estimates of Continental based on data available to Continental. Such data are

neither comprehensive nor independently verified. Consequently, the data used are not adequate for and the statements based on such data are not meant to be an accurate or

proper definition of regional and/or product markets or market shares of Continental and any of the participants in any market.

› Unless otherwise stated, all amounts are shown in millions of euro. Please note that differences may arise as a result of the use of rounded amounts and percentages.


January 2020

ContactEquity and Debt Markets Relations

Vahrenwalder Str. 9

30165 Hanover

Germany

E-mail: [email protected]

Fax: +49 511 938 1080

www.continental-ir.com

Michael Sämann

Analysts, Institutional Investors and

Sustainability Investors

Phone: +49 511 938 1307


Marvin Kalberlah

Analysts, Institutional Investors

Social Media

Phone: +49 511 938 14034


Christopher Macke

Analysts, Institutional Investors

Phone: +49 511 938 1062


Klaus Paesler

Analysts, Institutional Investors, ADR

and Private Investors

Phone: +49 511 938 1316


Sabine Reese

Sustainability, ASM, CMD

Organization, IR Website, Capital

Market Disclosure Requirements

Phone: +49 511 938 1027


Bernard Wang

Head of IR

Phone: +49 511 938 1068

E-mail:

[email protected]

Sina Ramatschi

Assistant to the Head of IR

Roadshow and Conference Organization

Phone: +49 511 938 1163

E-mail:

[email protected]

mailto:[email protected]

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








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