9M 2018 Results Hanover November 8, 2018 · Continental Enhances Driver Safety by Eliminating Forward Blind Spots New system specially designed for high-end sporty performance. Power

9M 2018 Results

Ticker: CON

ADR-Ticker: CTTAY

Twitter: @Continental_IR

http://www.continental-ir.com

Hanover – November 8, 2018

Wolfgang Schaefer – CFO

Agenda

Status Update: Powertrain Carve-out 5 26

Automotive Group2 11

Rubber Group3 15

Indebtedness and Cash Flow4 23

2018 Outlook6 31

Back-up and 2016 – 9M 2018 Fact Sheets 407

2

Corporation Highlights1 3

9M 2018 Results – November 8, 2018

EDMR – Equity and Debt Market Relations

› Sales up to €33.2 bn; organic sales growth at 4.3%; FX negative at €1.06 bn

› Adj. EBIT1 down by 13% to €3.0 bn; adj. EBIT1 margin at 9.0%

(PPA2 -€128 mn and special effects €125 mn)

› NIAT3 amounted to €2.2 bn, down by 2%

› Free cash flow amounted to -€5 mn

Free cash flow before acquisitions and pension funding amounted to €370 mn

› Gearing ratio at 17% and equity ratio at 45%; Value creation: trailing ROCE4 down to 18.3%

› Other topics:

› 9M results impacted by ~€115 mn warranty provisions booked in Q3 2018; about €50 mn to be booked in Q4 2018;

ContiTech measurement plan implemented; €150 mn margin enhancement targeted over the next 2 years

› Order intake in the Automotive Group at almost €30 bn after 9M 2018

› Acquisition of Kmart Tyre and Auto Service, Kathrein Automotive Antenna business, and Anti-Vibration Systems

› IFRS 16 adds up to €1.9 bn to operating assets starting 2019; split between Automotive and Rubber Group ~50/50

› Powertrain carve-out fully on schedule; partial IPO possible beginning mid-2019

1) Corporation HighlightsMost Important KPIs for 9M 2018

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

2 Amortization of intangibles from PPA.

3Attributable to the shareholders of the parent.

4Trailing ROCE calculated as reported EBIT for the last 12 months (LTM) divided by average operating assets for the LTM. 3



› Automotive Group: Organic sales increased by 5.0%;

exceeding global car production by more than 4%-points;

adj. EBIT1 margin at 6.8% (PY: 8.1%)

› Chassis & Safety: 8.1% adj. EBIT1 margin (PY: 9.2%);

organic sales up by 2.7%; ADAS unit sales up by 32%

› Powertrain: 2.7% adj. EBIT1 margin (PY: 5.7%);

organic sales up by 3.6%;

9M results impacted by about €80 mn from warranty

cases

› Interior: 8.8% adj. EBIT1 margin (PY: 8.8%); organic

sales increased by 8.5% still driven by strong demand

for multimedia and connectivity products

1) Corporation Highlights Divisional Highlights for 9M 2018

4


› Rubber Group: Organic sales up by 3.3% and adj. EBIT1

margin down to 13.2% (PY: 14.8%), sales and adj. EBIT1

negatively impacted by FX and under-absorption of fixed

cost

› Tires: Adj. EBIT1 margin at 16.3% (PY: 18.3%);

volumes flat; solid price mix at 3%; FX impacted tire

sales negatively by 4%; organic sales up by 2.8%

Tire markets: PC & LT tire replacement demand in

Europe was up by 2% and in North America by 3%

› ContiTech: Adj. EBIT1 margin 7.6% (PY: 8.4%);

organic sales up by 4.3% with main contribution by

the Conveyor Belt Group, Industrial Fluid Systems

and Air Spring Systems;

9M results impacted by more than €25mn from

warranty provisions

Automotive Group Rubber Group



1) Corporation Highlights Selected Recent Press Clippings

5



Continental Releases Sustainable Natural Rubber Sourcing PolicyDefinition of responsibilities within the natural rubber value

chain. Contribution to industry-wide platform shall enhance

social, environmental and governance standards

The technology company’s Rubber Group aims at looking at

workers, communities, forests, biodiversity and agricultural

land and detecting potential risks in early stages.

Jaguar I-PACE: Innovative Continental Power

Electronics for Top-Class Electric Performance

Continental pairs its interior camera and integrated OLED

displays in the vehicle’s A-pillar for increased visibility and safety.

The Continental Virtual A-Pillar tracks the driver’s movements

and displays an image of the vehicle’s exterior environment on

the interior OLED displays, enabling the driver to “see through”

the A-pillar. The advanced technology addresses an increasing

issue on newer vehicles that may require expanded front pillars.

Continental Enhances Driver Safety by Eliminating Forward Blind Spots

New system specially designed for high-end sporty performance.

Power electronics in Jaguar’s new EV can handle currents up to

650 amps. Wide application spectrum: designed for use across

the entire Jaguar and Land Rover EV line-up; already up and

running in the Range Rover Sport plug-in-hybrid. Built-in success

factor: microchips with double sided sintered technology.

Go to press release

Go to press release

ContiConnect™ Live, available from the second quarter of

2019, informs operators of truck and bus fleets immediately if

there is a problem with the temperature or pressure of a tire,

even when the vehicle is on the road. The data is transferred to

the servers and the web portal by the ContiConnect™ Driver

app, which is also new.

Continental Presents ContiConnect™ Live at IAA

Commercial Vehicles

Go to press release

Three use cases in one vehicle: Assistance system helps drivers

when making left turns, entering roundabouts and at right-before-

left intersections. The system adapts to the driver’s style of

driving, assesses the driver’s behavior and level of attention and

gives appropriate recommendations.

PRORETA 4: Continental and TU Darmstadt Develop

Machine-Learning Advanced Driver Assistance System

Go to press release

Continental Supports Hyperloop Technology

as a Logistics Solution of the FutureNew mobility concepts: sustainable, fast and cost-effective

transport of goods possible via Hyperloop Collaboration with

talented young people at the Emden/Leer University of Applied

Sciences and the University of Oldenburg. Special belts made

of carbon cord and polyurethane from Continental move

HyperPodX.

Go to press release

Go to press release

https://www.continental-tires.com/car/media-services/newsroom/20181016-continental-releases-sustainable-natural-rubber-policy

https://www.continental-corporation.com/en/press/press-releases/2018-10-25-virtual-a-pillar-148382

https://www.continental-corporation.com/en/press/press-releases/2018-09-19-iaa-conti-connect-145446

https://www.continental-corporation.com/en/press/press-releases/proreta-4-147940

https://www.continental-corporation.com/en/press/press-releases/hyperloop-technology-145496

https://www.continental-corporation.com/en/press/press-releases/2018-10-22-leistungselektronik-148174

9,85110,191 9,984

10,52411,000 11,033

10,69311,284

11,01311,374

10,788

1,164 1,167 1,104 1,0591,161

772

Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18

Sales (€ mn) Adj. EBIT (€ mn)

1) Corporation Highlights Sales and Adjusted EBIT1 by Quarter

6


FY Sales €40,549 mn FY Sales €44,009 mn 9M Sales €33,174 mn

Adj. EBIT1 €2,992 mn

1



3,8

52

4,0

45

4,0

38

4,1

64

4,2

60

4,3

82

4,3

61

4,4

91

4,2

12

4,4

10

4,3

90

635 641 652531 631 546

Q1

/16

Q2

/16

Q3

/16

Q4

/16

Q1

/17

Q2

/17

Q3

/17

Q4

/17

Q1

/18

Q2

/18

Q3

/18

Q4

/18


6,0

11

6,1

58

5,9

58

6,3

70

6,7

54

6,6

61

6,3

44

6,8

06

6,8

14

6,9

78

6,4

11

557 554 491 563 561

258

Q1

/16

Q2

/16

Q3

/16

Q4

/16

Q1

/17

Q2

/17

Q3

/17

Q4

/17

Q1

/18

Q2

/18

Q3

/18

Q4

/18


1) Corporation Highlights Automotive Group and Rubber Group by Quarter

7

1

Automotive Group Rubber Group


1



6%

1%

3%

Replacement tire volumegrowth North America

Replacement tirevolume growth Europe

Commercial VehicleTires volume growth

2.4%

0%

4%

GDP growth advancedeconomies 2018

PC & LT production growth Europe

ContiTechorganic sales growth

3%

2%

-1%

Replacement tire volumegrowth North America

Replacement tire volumegrowth Europe

Passenger & Light Trucktires volume growth

-1%

1%

5%

PC & LT production growthEurope and North America

PC & LT productiongrowth, global

Automotive Grouporganic sales growth

1) Corporation Highlights Growth Profile of the Corporation 9M 2018

8

Mark

et

1According to IMF definition (WEO Update October 2018).

1

Co

nti

Mark

et

Co

nti



19

,76

7

19

,98

3

20

,10

6

20

,45

3

20

,97

8

21

,40

1

21

,88

6

22

,17

2

22

,39

7

22

,811

23

,25

6

21.1% 21.2%

18.9%20.0% 20.0%

19.0%

20.6% 20.6%19.8% 19.4%

18.3%

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

2016 2017 2018

Trailing OA (€ mn) Trailing ROCE

1) Corporation Highlights Sustainable Value Creation

9

1Trailing operating assets are calculated as assets for the last 12 months (LTM).

2Trailing ROCE calculated as reported EBIT for the last 12 months (LTM) divided by trailing operating assets.

1 2



500

1,350

2018 2019 2020 2021 2022

1) Corporation Highlights Maturities for Bonds1 (€ mn)

10

Bonds1

All amounts shown are nominal values.

As at September 30, 2018

(€ mn) FY 17 9M 18

Gross indebtedness 4,090 4,809

Cash 1,882 1,622

Net indebtedness 2,048 2,995

Available credit lines 3,687 3,091

Total liquidity 5,568 4,713



583

154

644

0

1,381

Chassis

& Safety

Powertrain Interior cons. Automotive

Group

8.1%

2.7%

8.8% 6.8%

Adj. EBIT margin (%)

7,214

5,824

7,293

128

20,203

Chassis

& Safety

Powertrain Interior cons. Automotive

Group

3.6%

8.5% 5.0%

2.7%

Organic sales growth (%)

2) Automotive GroupSales and Adjusted EBIT1 by Division

11

-


Reported change in sales

› Chassis & Safety: -0.4%

› Powertrain: 1.1%

› Interior: 6.0% › Automotive Group: 2.2%

1

› Reported EBITDA: €2,396 mn (11.9% of sales)

› Reported EBIT: €1,446 mn (7.2% of sales)

› R&D (net): €2,196 mn (10.9% of sales)

› Capex: €1,230 mn (6.1% of sales)

Automotive Group Sales (€ mn) 9M 2018 Automotive Group Adj. EBIT1 (€ mn) 9M 2018



6,3446,806 6,814 6,978

6,411

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

491

2587.8%

4.0%

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

2) Automotive GroupQ3 2018 Impacted by Warranty Provisions and Under-absorption of Fixed Cost

12

+67 -234


› Sales increased by €67 mn; organic sales growth in Q3 2018 at 1.7%

› Adj. EBIT1 decreased by €234 mn; EBIT in Q3 2018 was impacted by under-absorption of fixed cost, an increase in net R&D

(up by 6%) and €100 mn warranty provisions mainly related to Powertrain

› Adj. EBIT1 margin at 4.0% (PY: 7.8%)

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



11

%

7% 9

% 10

%

6%

8%

2%

6%

0%

2%

1%

0%

4%

-3%

Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18E Q4/18E

Automotive Group PC & LT prod. growth ww

2) Automotive Group More than 4%-Points Growth above Market in Q3 2018 and after 9 Months

13

1 Passenger car and light truck <6t.

Growth of organic sales vs. PC & LT1 production Organic sales growth by division in Q3 2018



-2%

3%

5%

Chassis & Safety Powertrain Interior

2) Automotive Group Kathrein’s Automotive Business – Get Connected with Antennas!

14



› Kathrein Automotive GmbH (a subsidiary of Kathrein SE) is one of the leading

specialists in and manufacturers of vehicle antennas

› Kathrein Automotive GmbH has over 1,000 employees at a total of eight

locations (in Brazil, China, Germany, Mexico, Portugal and the U.S.A.); it will

become part of Continental’s Body & Security business unit within the Interior

division

› Closing expected in Q1 2019 and is subject to regulatory approval

Strategic Rational

› Intelligent antenna systems are a key element in the holistic connectivity chain

and important for Continental as a complete connectivity system supplier

› More than 20 antennas are required to power the next-generation connected

car, above average growth in the vehicle antenna market is anticipated

› Kathrein Automotive and Continental had a successful business relationship

for more than 10 years

› Necessary and complementary competencies such as customer access to

antenna R&D and purchasing, as well as critical technology and related know-

how (radiofrequency and mechanical design)

Solutions

Holistic Vehicle Connectivity

Intelligent Antenna Module

Multifunctional Smart Device Terminal

356

1,352

0

1,709

ContiTech Tires cons. Rubber Group

7.6%

16.3% 13.2%

Adj. EBIT margin (%)

4,790

8,289

67

13,012

ContiTech Tires cons. Rubber Group

4.3%

2.8% 3.3%

Organic sales growth (%)

3) Rubber Group Sales and Adjusted EBIT1 by Division

15

Reported change in sales

› ContiTech: 2.4%

› Tires: -1.2%

› Rubber Group: 0.1%

› Reported EBITDA: €2,323 mn (17.9% of sales)

› Reported EBIT: €1,642 mn (12.6% of sales)

› R&D (net): €338 mn (2.6% of sales)

› Capex: €714 mn (5.5% of sales) 1

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

-

1

Rubber Group Sales (€ mn) 9M 2018 Rubber Group Adj. EBIT1 (€ mn) 9M 2018



4,361 4,491 4,212 4,410 4,390

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

652546

15.0%12.5%

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

3) Rubber GroupQ3 2018 Impacted by FX and Under-absorption of Fixed Cost

16

› Sales increased by €29 mn mainly due to positive price mix and good growth in non-OE related CT business;

organic sales growth in Q3 2018 at 2.7%

› Adj. EBIT1 decreased by €105 mn mainly due to under-absorption of fixed cost, negative FX effects and some warranty provisions

› Adj. EBIT1 margin at 12.5% (PY: 15.0%)


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

+29 -105



3) Rubber GroupTires Sales Bridge (€ mn) 9M 2018

17

-0.4%

+3.2%

-4.0%

+2.8%

-1.2%

-€141 mn EBIT

drop



1%2%

3%

5%4%

3%

2%

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

3) Rubber GroupTires: Price/Mix Still Solid, FX Impact Declining

18

Volumes Price/Mix FX



6%

-1%

3% 3%

-3%

1% 1%

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

1.5%1.0%

-2.3%

-3.6%

-5.5%-4.5%

-2.2%

Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018

3) Rubber GroupExpected Raw Material Price Development in 2018

19

› Natural rubber price (TSR 20) is expected

to decline by 17% (before: decline by 13%).

› Synthetic rubber price (butadiene

feedstock) is forecast to decrease by 4%

(before: increase by 6%).

› Prices for carbon black and chemicals are

forecast to rise by more than 20%

(before: more than 10%).

› Based on these assumptions,

costs of raw materials (including tariffs for

steel) are expected to have a negative

effect of about €100 mn in 2018

(before: more than €50mn).

1Source: Bloomberg and Continental estimates for 2018.

Average (Y)

TSR 20: 251

Butadiene: 148

Average (Y)

TSR 20: 172

Butadiene: 132

Average (Y)

TSR 20: 137

Butadiene: 90

Average (Y)

TSR 20: 138

Butadiene: 113

Average (Y)

TSR 20: 167

Butadiene: 151

Average (Y)

TSR 20: 139

Butadiene: 145

Raw material price development1 2013 - 2018E (U.S. cents/kg)



› Margin enhancement program implemented

› Improvement totals €150 mn in 2020

› More than 2/3 of the enhancement program to

impact 2020

› Majority of the enhancement will stem from

process improvement

3) Rubber GroupContiTech – Getting Back to Double-Digit Margins

20



Margin enhancement program

totals €150 mn in 2020

3) Rubber GroupAVS: Perfect Regional Fit and Highly Complementary Customer Portfolio to CT Vibration Control

21



Product Overview

Sales split by region and product type (2017)

Powertrain

mount

systems Chassis parts

Suspension parts

› Anti-Vibration Systems (AVS) is an automotive supplier, specialized in

complete powertrain and body mount systems

› AVS has a substantial footprint and leading market position in North America

› Main customers with strong relationships include Ford, GM, FCA, PSA,

Renault-Nissan, Toyota and other global automotive OEMs

› Therefore AVS provides a complementary customer portfolio and strengthens

our footprint with presence in all relevant markets

› AVS runs R&D and compounding capabilities, especially in the U.S.A. and

India

› Sales distribution (FY2017): 77% in U.S.A., 18% in Europe and 5% in India

› Deal signed on Nov 1, 2018 for a total consideration of $266 mn; cash out

expected in H1 2019

Financial figures as of FY 20171:

› Sales: $344 mn

› EBITDA: $51 mn

› Conventional / hydraulic mounts

› Bi-state switchable hydraulic

mounts

› Multi-state vacuum switchable

hydraulic mounts

› DynaFib

Powertrain Mount

› Mass dampers

› Conventional / polyurethane strut mounts,

spring seats and jounce bumpers

› Conventional / hydraulic bushings

› Dual durometer (bi-compound) bushings

› Conventional / hydraulic body and cradle

mounts

Chassis and Suspension

11%

41%48%

1 Financial figures adjusted due to transfer of AVS related business from other Cooper Standard plants as part of the deal.

3) Rubber GroupKMART Tyre – Controlled Distribution in Australia

22



Sales breakdown (2017) and branch network2

35%

28%

37%

Tires

Service

Repair

› Kmart Tyre and Auto Service is one of Australia’s largest tire and auto service

suppliers and currently operates 257 stores with 1,258 employees in all

Australian territories

› Of its 257 stores 169 are based in shopping centers and 65 at gas stations, the

remaining 23 are separate sites

› Transaction price was AUD 350 mn (€227 mn)

› Solid margin level due to high share of repair and service business

› Pays on our ‘Vision 2025’ which targets the systematic expansion of our Tire

division’s worldwide presence

› Controlled distribution makes up almost 50% of Australian tire market

› Transaction closed on Nov 1, 2018; cash out expected in Q4 2018

Financial figures as of FY 20171:

› Sales: AUD 325 mn

› EBITDA: AUD 36 mn

1 Financial figures were adjusted to year end 2017; 1 Euro = 1.47 AUD (Average 2017).

› Brake systems

› Cooling systems

› Exhaust systems

› Clutch/auto transmission

› Suspension and shock

absorbers

› Battery

Repair

› Logbook servicing

› Fleet servicing

› New car and packed

car servicing

› Registration and

inspections

Service

› Tire replacement

› Tire reparations

› Mobile fitting

› Wheel balancing

› Wheel alignment

Tires

Product and service overview

2 KMART branches in blue, existing Continental controlled distribution network in orange.

4) Indebtedness and Cash Flow Net Indebtedness Bridge (€ mn)

23

1According to cash flow statement including intangible assets.

€1,291 mn outflow from

change in working capital

1

Gearing

ratio 13%17%



2,5

70

-2,0

98

47

2

-1,8

25

74

5

2,3

61

-2,1

81

-5

-1,9

91

37

0

Cash flow fromoperating activities

Cash flow usedfor investing activities

Free cash flow

2017 2017 before acquisitions 2018 2018 before acquisitions

4) Indebtedness and Cash Flow Free Cash Flow Before Acquisitions and Pension Funding (€ mn) 9M 2018

24

-166

-375

-209



Pension

funding

€185mn

Pension

funding

€185mn

2,1

76

2,824

3,542

2,798 2,768

3,469 3,298

2,048 1,984

2,858 2,995

26% 27%19% 18%

23% 21%13% 12%

17% 17%

YE YE YE Q1 H1 9M YE Q1 H1 9M

2014 2015 2016 2017 2018

Net indebtedness (€ mn) Gearing ratio

4) Indebtedness and Cash Flow Net Indebtedness and Gearing Ratio

25



› New Powertrain management team in place since September 2018

› New Powertrain reporting structure

› Starting Jan 2019 Powertrain will have four segments1

› Engines & Drivetrain Systems (E&DS)

› Hybrid and Electric Vehicles (HEV)

› Powertrain Components (PTC)

› Contract manufacturing (CM2)

› Carve-out project fully on track; partial IPO possible beginning mid-2019

› Carve-out cost to amount to ~€350 mn

› Tax leakage to amount to about €100 mn

5) Status Update: Powertrain Carve-out New Management Team at Work and New Powertrain Structure Implemented

26



1The segment names displayed represent current working titles

2Contract manufacturing will record business relationship between Continental and PT at “cost plus”

27

› Decision of Continental’s

Executive Board and

Supervisory Board approval

› New holding structure

› Leading principles

› Boundaries and targets

July 2018

› Preparation work for the legal

separation and new Powertrain

organization

› “Workstreams” and

“Subworkstreams” work out

details for all areas affected by

changes

› New management team

announced on Sept. 26, 2018

Preparation Jan 2019

› Day 1 of the new

Powertrain company

beginning mid-2019

› Partial IPO of the new Powertrain

company possible beginning mid-

2019

› Continental does not, however,

plan to relinquish control of the

Powertrain business in the medium

or long term

5) Status Update: Powertrain Carve-outTimeline



5) Status Update: Powertrain Carve-outTop Management Team in Place

28

› Joined Continental AG in Hanover as an

HR specialist in 1992

› Since 2000 head of various HR

departments in Tires and as a corporate

function

› Head of HR in the Tires division since

2010

› 10 years of experience in the fields of

communications technology as well as

systems and automation technology,

including a CFO position

› Since 1997 with Siemens VDO and

Continental in management positions

› Head of finance and controlling in the

Chassis & Safety division since 2008

› More than 25 years in the automotive

electronics industry since joining

Siemens AG in 1989

› Held various management positions in

controlling in Germany and France

› Since 2007 head of the global Body &

Security business unit within the Interior

division as executive vice president

Andreas Wolf

CEO

Werner Volz

CFO

Ingo Holstein1

CHRO

1Starting January 1, 2019



5) Status Update: Powertrain Carve-outNew Powertrain Reporting Structure Starting January 1, 2019

29



Current business units

› Engine Systems

› Transmission

› As before Current business units

› Sensors & Actuators

› Fuel and Exhaust

Management

› As a result of the

carve-out

› Segment records

business between

Continental and

Powertrain

› Sales should

constantly decrease

over time

› Will be accounted at

cost plus

New Powertrain1

Engine & Drivetrain

Systems (E&DS)Hybrid and Electric

Vehicles (HEV)

Powertrain Components

(PTC)Contract Manufacturing

(CM)

1The segment names displayed represent current working titles

30

Excellent

components

System

competence

Mobility

choices

Propulsion

choices

Our Products and Services

PortfolioStructure and

processesStakeholdersInnovation

Our Path to Excellence

5) Status Update: Powertrain Carve-outPowertrain has an Excellent Position to Shape the Future



6) 2018 OutlookPC & LT Production by Quarter1

31

North America (mn units)Europe (mn units) China (mn units)

2016: 21.4 2017: 22.1 2018E: 22.0 2016: 17.8 2017: 17.1 2018E: 16.9 2016: 27.1 2017: 27.7 2018E: 27.5

1 Source: IHS until 2017 and own estimates, Europe excluding Kazakhstan and Uzbekistan.



6) 2018 OutlookMarket Outlook

32

Commercial Vehicle2 Production (k units)

Commercial Vehicle Replacement3 Tire Market (mn units)

PC & LT1 Production (mn units)

PC & LT1 Replacement Tire Market (mn units)

Worldwide production

to stay flat

Worldwide production

to decrease by 1%

Worldwide replace-

ment tire market to

increase by 1%

Worldwide replace-

ment market to

decrease by 1%

IHS and

own estimates

LMC and

own estimates

IHS and

own estimates

LMC and

own estimates

2017 2018E Chg.

Europe 22.1 22.0 -0%

North America 17.1 16.9 -1%

South America 3.3 3.5 +5%

Asia 51.5 51.5 +0%

2017 2018E Chg.

Europe 660 687 +4%

North America 513 590 +15%

South America 102 143 +40%

Asia 2,140 1,969 -8%

2017 2018E Chg.

Europe 351 358 +2%

North America 285 290 +2%

South America 73 68 -7%

Asia 453 453 +0%

2017 2018E Chg.

Europe 25.3 25.6 +1%

North America 24.5 25.7 +5%

South America 15.7 15.7 +0%

Asia 89.2 86.5 -3%

1 Passenger cars and light trucks <6t.2 Medium and heavy vehicles >6t.3 Radial and bias.



6) 2018 OutlookContinental Corporation

33

2017 2018E

Consolidated sales

adj. EBIT1 margin

€44.0 bn

10.9 %

To increase to ~€44.5 bn

>9% adj. EBIT1 margin

Automotive Group

adj. EBIT1

€26.6 bn

€2.2 bn

To increase to ~€27 bn

~7% adj. EBIT1 margin

Rubber Group

adj. EBIT1

€17.5 bn

€2.6 bn

~€17.5 bn

>13% adj. EBIT1 margin

Raw materials cost impact More than €450 mn

for the Rubber Group

Raw materials to have a negative impact of about

€100 mn on Rubber Group

Special effects -€14 mn Balanced

Financial result

Tax rate

-€187 mn at constant FX2

29%

<-€180 mn at constant FX2

~24%

Capex

PPA amortization

€2.9 bn

€171 mn

Capex at around 7% of sales

~€180 mn

Free cash flow before acquisitions €2.3 bn ~€1.6 bn excluding net effect of U.S. pension funding


2Before effects of currency translation and effects from changes in the fair value of derivative instruments, and other valuation effects.



34

35

Disclaimer

› This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Analyst and Investor Call on November 8, 2018, and the subsequent roadshows

in Europe, Asia and North America. It has not been independently verified. It does not constitute an offer, invitation or recommendation to purchase or subscribe for any shares or

other securities issued by Continental AG or any subsidiary and neither shall any part of it form the basis of, or be relied upon in connection with, any contract or commitment

concerning the purchase or sale of such shares or other securities whatsoever.

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

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

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

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

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

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

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

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

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

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

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

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

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

› Note: Due to the application of the modified retrospective approach during first time adoption of IFRS 9, Financial Instruments, and IFRS 15, Revenues from Contracts with

Customers, as at January 1, 2018, all the figures from comparative periods are shown unadjusted.



36

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 Saemann

Analysts, Institutional Investors and

Sustainability Investors

Phone: +49 511 938 1307


Marvin Kalberlah

Analysts, Institutional Investors and

Social Media

Phone: +49 511 938 14034


Christopher Macke

Analysts and 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


Rolf Woller

Head of IR

Phone: +49 511 938 1068


Jana Cross

Assistant to the Head of IR

Roadshow and Conference Organization

Phone: +49 511 938 1163


mailto:[email protected]

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








ContinentalFinancial Calendar

37

2018

Preliminary figures for fiscal 2017 January 9, 2018

Annual Financial Press Conference March 8, 2018

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

Q1 Financial Report May 8, 2018

Half-Year Financial Report August 2, 2018

Nine-Month Financial Report November 8, 2018

2019

Preliminary figures for fiscal 2018 January 14, 2019

Annual Financial Press Conference March 7, 2019

Annual Shareholders’ Meeting (incl. key data for Q1 2019) April 26, 2019

Q1 Financial Report May 9, 2019

Half-Year Financial Report August 5, 2019

Nine-Month Financial Report November 11, 2019



ContinentalShare Data/ADR Data

38

Share Data

Type of share No-par value share

Bloomberg Ticker CON

Reuters Ticker CONG

German Security Identification Number (WKN) 543 900

ISIN DE0005439004

Shares outstanding as at September 30, 2018 200,005,983

ADR Data

Ratio 1:10 (ordinary share : ADRs)1

Bloomberg Ticker CTTAY

Reuters Ticker CTTAY.PK

ISIN US2107712000

ADR Level Level 1

Exchange OTC

Sponsor Deutsche Bank Trust Company Americas

1Before October 29, 2018 split was 1:5. 9M 2018 Results – November 8, 2018


ContinentalBond Data

39

Issuer Continental

Rubber of America, Corp.1Continental AG Continental AG

Issue Senior Notes Senior Notes Senior Notes

Principal amount €500 mn €600 mn €750 mn

Offering price 99.739% 99.410% 99.228%

Rating at issuance date BBB (S&P)

BBB (Fitch)

BBB+ (S&P)

BBB+ (Fitch)

Ba1 (Moody’s4)

BB (S&P)

BBB (Fitch2)

Current corporation and

bond ratings3 BBB+ (Fitch), BBB+ (S&P), Baa1 (Moody’s4)

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

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

Maturity February 19, 2019 February 5, 2020 September 9, 2020

Interest payment

Annual

February 19,

Commenced February 20, 2017

Not applicableAnnual

September 9

WKN A1Z7C3 A2DARM A1X3B7

ISIN DE000A1Z7C39 XS1529561182 XS0969344083

Denomination €1,000 with minimum tradable amount €1,000

1Guaranteed by Continental AG.

2Non-contracted rating at date of issuance.

3Fitch since October 24, 2016; S&P since May 11, 2016; Moodyʼs since June 30, 2015.

4Non-contracted rating since February 1, 2014.



40

Back-up



7) Back-upCorporation Highlights 9M 2018

41


2Amortization of intangibles from PPA, tax rate of 25% applied for EPS calculation for 2018, 28% for 2017.

3Attributable to the shareholders of the parent.

› Sales Increase of 1.4% to €33,174.3 mn (PY: €32,725.6 mn); organic sales up 4.3%

› EBITDA Decrease of 5.1% to €4,624.2 mn (PY: €4,873.1 mn)

› EBIT Decrease of 9.5% to €2,989.8 mn (PY: €3,304.9 mn);

Adj. EBIT1 decrease to €2,992.0 mn (9.0% adj. EBIT1 margin);

PPA2 effect -€128.1 mn; consolidation effects €0.7 mn; total special effects €125.2 mn

› NIAT3 Decrease of 1.7% to €2,185.8 mn (PY: €2,224.1 mn)

› EPS3 EPS of €10.93 (PY: €11.12);

EPS before PPA2 €11.41 (PY: €11.58 before PPA2)

› Capex Capex increased to €1,956.2 mn (PY: €1,794.9 mn); capex ratio 5.9% of sales;

capex to depreciation coverage 1.2x (1.3x ex PPA2)

› R&D (net) Expenses increased by 7.5% to €2,534.3 mn (PY: €2,356.9 mn);

R&D ratio 7.6% of sales (PY: 7.2%)

› Cash flow Operating cash flow down by €393.9 mn to €2,175.8 mn; free cash flow -€4.9 mn

› Net indebtedness Net indebtedness up by €947.5 mn to €2,995.1 mn vs. FY 2017;

Liquidity and undrawn credit lines amounted to €4,712.7 mn

› Pension and similar obligation Long-term provisions for pension and similar obligations amounted to €3,914.1 mn (PY: €4,024.1 mn)



7) Back-upOverview of Volume Development

42



Units (YOY change) Q1/16 H1/16 9M/16 FY 16 Q1/17 H1/17 9M/17 FY 17 Q1/18 H1/18 9M/18

Market data for PC and LT production

Europe 2% 6% 3% 3% 6% 1% 2% 3% 0% 2% 0%

North America 4% 3% 2% 2% 2% -1% -4% -4% -3% -3% -1%

Europe and North America combined 3% 4% 3% 3% 4% 0% -1% 0% -1% 0% -1%

Worldwide 2% 3% 3% 4% 6% 3% 3% 2% 0% 2% 1%

Continental

Organic sales growth Automotive Group 5% 11% 9% 9% 9% 6% 7% 5%

Electronic brake systems (EBS) 0% 4% 6% 6% 13% 10% 9% 9% 3% 4% 1%

Boosters -3% -3% 4% 1% 3% 3% 4% 6% 6% 5% 2%

EPB-Systems 38% 48% 51% 48% 47% 39% 35% 33% 25% 23% 19%

Advanced driver assistance systems (ADAS) 51% 45% 38% 36% 40% 40% 41% 41% 37% 36% 32%

Engine electronic control units (ECUs) -2% 3% 6% 8% 12% 9% 7% 7% 2% 4% 4%

Injectors -5% -5% 2% 7% 19% 17% 15% 11% 8% 5% 2%

Transmission control units (TCUs) -1% -1% 1% 1% -2% -3% -5% -4% -2% 1% 1%

Turbochargers 23% 24% 18% 17% 45% 44% 50% 56% 50% 47% 39%

Market data tires

PC and LT replacement tires Europe 2% 2% 2% 2% 6% 2% 2% 3% -1% 3% 2%

PC and LT replacement tires North America 5% 2% 2% 2% 2% 1% -1% 0% -2% 1% 3%

Commercial vehicle tires OE Europe 6% 5% 3% 3% 9% 6% 7% 10% 6% 4% 5%

Commercial vehicle tires OE North America -12% -9% -16% -13% -8% -1% 10% 8% 20% 16% 16%

Commercial vehicle replacement tires Europe 2% 3% 3% 3% 11% 6% 6% 4% 0% 2% 1%

Commercial vehicle replacement tires North America 4% 3% 3% 2% 12% -1% 4% 4% 4% 5% 6%

Continental

Organic sales growth Rubber Group 4% 7% 5% 6% 6% 2% 4% 3%

PC and LT tires 9% 8% 6% 6% 5% 2% 2% 3% -3% -1% -1%

Commercial vehicle tires 7% 8% 4% 4% 15% 10% 8% 5% -5% -2% 3%

ContiTech organic sales growth 3% 2% 2% 2% 8% 7% 8% 8% 5% 6% 4%

7) Back-upKey Historical Credit Metrics

43

1 Amounts shown may contain rounding differences.2 Adjusted EBITDA as defined in syndicated loan. 3 Includes changes in inventories, trade accounts receivable, trade accounts payable and discounted notes.4 Includes dividends received, income from equity-accounted and other investments, incl. impairment and reversal of items as

well as changes in employee benefits and other provisions and in other assets and liabilities.5 Adjusted EBITDA to net cash interest paid.



(€ mn)1

2014 2015 2016 2017 LTM

Statement of Cash Flows

Adjusted EBITDA2

5,318 6,094 6,125 6,701 6,342

Reported EBITDA 5,134 6,001 6,057 6,679 6,430

Net cash interest paid -158 -174 -112 -105 -81

Tax paid -775 -1,015 -1,047 -1,122 -871

Change in net working capital3

-207 -107 -210 -484 -242

Other4

175 210 250 253 -410

Cash flow arising from operating activities 4,168 4,916 4,938 5,221 4,827

Cash flow arising from investing activities -2,153 -3,472 -3,167 -3,468 -3,551

- thereof acquisitions -129 -1,257 -516 -596 -513

- thereof capex in PPE and intangibles -2,110 -2,265 -2,708 -2,951 -3,118

Cash flow before financing activities 2,015 1,444 1,771 1,753 1,276

Cash flow before acquisitions 2,144 2,701 2,288 2,349 1,789

Statement of Financial Position

Cash and cash equivalents 3,244 1,622 2,107 1,882 1,622

Derivative instruments and interest-bearing investments 364 81 48 161 192

Total indebtedness 6,432 5,245 4,952 4,090 4,809

Net indebtedness 2,824 3,542 2,798 2,048 2,995

Credit Ratios

Net indebtedness / adjusted EBITDA2

0.5x 0.6x 0.5x 0.3x 0.5x

Net cash interest paid coverage5

33.7x 35.1x 54.8x 63.6x 78.5x

1,600

1,7951,956

1,3051,440 1,506

104 128 128

2016 2017 2018

Capex (PPE), percentage of sales

Depreciation, w/o PPA

PPA

5.3%

5.5%

5.9%

10.930.48 11.41

EPS reported PPA after taxper share

EPS excl.PPA

7) Back-upCapex, Depreciation and Earnings per Share Breakdown for 9M 2018

44

1Amortization of intangibles from PPA.

2Assuming corporate tax rate of 25%.

1

1

Capex, Depreciation and PPA1 (€ mn) EPS ex PPA1,2 (€)

1 2

1,2



6,624.87,243.0 7,214.0

9.1%

13.3% 12.5%

9.2%8.1%

2016 2017 2018

Sales (mn €) EBITDA margin Adj. EBIT margin

7) Back-upAutomotive Group Financials – Chassis & Safety

45

Chassis & Safety 9M 2018


Refer to Fact Sheets for further details.

› Sales increased by 2.7% before

consolidation and FX effects

› EBITDA decreased by €63.0 mn to

€901.1 mn (-6.5%)

› Adj. EBIT1 decreased by €82.9 mn to €583.2 mn

(adj. EBIT1 margin 8.1%)

› EBIT decreased by €84.6 mn to €581.7 mn

(EBIT margin 8.1%)

› PPA effect in 9M 2018: €0.0 mn

› Special effects in 9M 2018: -€1.5 mn

1



5,430.4 5,760.8 5,824.0

9.9% 10.7%

7.9%

5.7%

2.7%

2016 2017 2018


7) Back-upAutomotive Group Financials – Powertrain

46



Powertrain 9M 2018› Sales increased by 3.6% before



€457.2 mn (-25.7%)




(EBIT margin 2.1%)

› PPA effect in 9M 2018: -€8.6 mn

› Special effects in 9M 2018: -€22.8 mn

1



6,164.06,881.3

7,292.9

10.1%

12.3%14.2%

8.8% 8.8%

2016 2017 2018


7) Back-upAutomotive Group Financials – Interior

47



Interior 9M 2018› Sales increased by 8.5% before


› EBITDA increased by €189.1 mn to

€1,037.8 mn (+22.3%)

› Adj. EBIT1 increased by €38.2 mn to €643.5 mn


› EBIT increased by €190.3 mn to €740.8 mn

(EBIT margin 10.2%)


› Special effects in 9M 2018: €149.4 mn

1



7,914.1 8,387.4 8,289.0

26.4%23.7%

21.6%

18.3%16.3%

2016 2017 2018


7) Back-upRubber Group Financials – Tires

48



Tires 9M 2018› Sales increased by 2.8% before



€1,794.4 mn (-9.7%)

› Adj. EBIT1 decreased by €184.7 mn to €1,352.1 mn


› EBIT decreased by €207.9 mn to €1,339.1 mn

(EBIT margin 16.2%)


› Special effects in 9M 2018: no special effects

1



7) Back-upTires – Demand for Passenger Car and Light Truck Tires

49

1U.S. Department of Transportation, right Scale.

1

Replacement Tire Demand for PC & LT in Europe

Replacement Tire Demand for

PC & LT in North America



7) Back-upTires – Demand for Commercial Vehicle Tires

50

1BAG = Bundesamt für Güterverkehr.

2ATA = American Trucking Association (miles traveled).

21

Replacement Tire Demand for Trucks in EuropeReplacement Tire Demand for

Trucks in North America



4,086.2

4,677.2 4,790.0

13.1%11.8% 11.0%

8.4% 7.6%

2016 2017 2018


7) Back-upRubber Group Financials – ContiTech

51



ContiTech 9M 2018› Sales increased by 4.3% before



€529.0 mn (-4.0%)




(EBIT margin 6.3%)


› Special effects in 9M 2018: €0.1 mn

1



52

2016 – 9M 2018 Fact Sheets



7) Fact SheetsSales by Quarter

53

Note: IFRS 9 and IFRS 15 applied starting 2018.

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

Chassis & Safety 2,201.8 2,246.2 2,176.8 2,352.8 8,977.6 2,497.4 2,437.8 2,307.8 2,524.8 9,767.8 2,511.2 2,455.2 2,247.6

Powertrain 1,813.5 1,841.5 1,775.4 1,889.1 7,319.5 2,003.1 1,947.2 1,810.5 1,900.1 7,660.9 1,945.6 2,025.2 1,853.2

Interior 2,023.0 2,099.8 2,041.2 2,160.7 8,324.7 2,293.9 2,318.4 2,269.0 2,423.9 9,305.2 2,401.7 2,539.3 2,351.9

Tires 2,512.7 2,692.7 2,708.7 2,803.3 10,717.4 2,756.3 2,815.7 2,815.4 2,938.4 11,325.8 2,635.5 2,801.6 2,851.9

ContiTech 1,359.1 1,376.6 1,350.5 1,376.3 5,462.5 1,521.4 1,587.5 1,568.3 1,569.2 6,246.4 1,601.7 1,629.9 1,558.4

Other / Consolidation -59.4 -65.8 -68.8 -58.2 -252.2 -72.2 -73.6 -78.3 -72.5 -296.6 -83.0 -77.4 -75.2

Continental Corporation 9,850.7 10,191.0 9,983.8 10,524.0 40,549.5 10,999.9 11,033.0 10,692.7 11,283.9 44,009.5 11,012.7 11,373.8 10,787.8

Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year

Chassis & Safety 13.4 8.5 6.0 7.3 8.8 0.6 0.7 -2.6

Powertrain 10.5 5.7 2.0 0.6 4.7 -2.9 4.0 2.4

Interior 13.4 10.4 11.2 12.2 11.8 4.7 9.5 3.7

Tires 9.7 4.6 3.9 4.8 5.7 -4.4 -0.5 1.3

ContiTech 11.9 15.3 16.1 14.0 14.4 5.3 2.7 -0.6

Continental Corporation 11.7 8.3 7.1 7.2 8.5 0.1 3.1 0.9

Changes Y-o-Y in %2017 2018

Sales (€ mn)2016 2017 2018



7) Fact SheetsEBITDA by Quarter

54



Chassis & Safety 302.8 312.0 -14.4 354.2 954.6 336.9 326.9 300.3 337.5 1,301.6 356.8 324.6 219.7

Powertrain 158.8 201.8 175.5 220.1 756.2 213.9 214.4 187.4 239.1 854.8 207.3 219.2 30.7

Interior 237.4 252.2 132.5 282.1 904.2 273.6 288.1 287.0 291.3 1,140.0 283.4 312.1 442.3

Tires 658.1 773.4 658.0 739.2 2,828.7 651.3 674.8 661.7 760.9 2,748.7 545.8 645.0 603.6

ContiTech 176.1 197.2 163.5 194.1 730.9 191.3 175.6 184.0 200.0 750.9 195.9 186.5 146.6


Continental Corporation 1,505.5 1,713.1 1,077.4 1,761.4 6,057.4 1,638.5 1,652.4 1,582.2 1,805.8 6,678.9 1,555.0 1,657.4 1,411.8


Chassis & Safety 13.8 13.9 -0.7 15.1 10.6 13.5 13.4 13.0 13.4 13.3 14.2 13.2 9.8

Powertrain 8.8 11.0 9.9 11.7 10.3 10.7 11.0 10.4 12.6 11.2 10.7 10.8 1.7

Interior 11.7 12.0 6.5 13.1 10.9 11.9 12.4 12.6 12.0 12.3 11.8 12.3 18.8

Tires 26.2 28.7 24.3 26.4 26.4 23.6 24.0 23.5 25.9 24.3 20.7 23.0 21.2

ContiTech 13.0 14.3 12.1 14.1 13.4 12.6 11.1 11.7 12.7 12.0 12.2 11.4 9.4

Continental Corporation 15.3 16.8 10.8 16.7 14.9 14.9 15.0 14.8 16.0 15.2 14.1 14.6 13.1


Chassis & Safety 11.3 4.8 2,185.4 -4.7 36.4 5.9 -0.7 -26.8

Powertrain 34.7 6.2 6.8 8.6 13.0 -3.1 2.2 -83.6

Interior 15.2 14.2 116.6 3.3 26.1 3.6 8.3 54.1

Tires -1.0 -12.7 0.6 2.9 -2.8 -16.2 -4.4 -8.8

ContiTech 8.6 -11.0 12.5 3.0 2.7 2.4 6.2 -20.3

Continental Corporation 8.8 -3.5 46.9 2.5 10.3 -5.1 0.3 -10.8

EBITDA margin in %2016 2017 2018


EBITDA (€ mn)2016 2017 2018



7) Fact SheetsEBIT by Quarter

55



Chassis & Safety 213.2 220.3 -107.4 254.7 580.8 238.9 227.4 200.0 231.4 897.7 252.9 218.2 110.6

Powertrain 66.5 108.8 80.3 122.4 378.0 117.1 114.1 83.1 125.6 439.9 99.4 110.7 -87.1

Interior 160.1 172.9 51.3 183.5 567.8 185.7 196.3 168.5 198.7 749.2 184.5 215.6 340.7

Tires 530.0 645.4 522.3 591.7 2,289.4 505.1 526.9 515.0 604.3 2,151.3 395.5 493.6 450.0

ContiTech 98.7 126.7 88.0 85.8 399.2 117.1 95.4 109.5 120.2 442.2 121.9 111.5 69.4


Continental Corporation 1,040.7 1,249.6 596.3 1,209.2 4,095.8 1,135.1 1,132.3 1,037.5 1,256.6 4,561.5 1,019.2 1,119.0 851.6


Chassis & Safety 9.7 9.8 -4.9 10.8 6.5 9.6 9.3 8.7 9.2 9.2 10.1 8.9 4.9

Powertrain 3.7 5.9 4.5 6.5 5.2 5.8 5.9 4.6 6.6 5.7 5.1 5.5 -4.7

Interior 7.9 8.2 2.5 8.5 6.8 8.1 8.5 7.4 8.2 8.1 7.7 8.5 14.5

Tires 21.1 24.0 19.3 21.1 21.4 18.3 18.7 18.3 20.6 19.0 15.0 17.6 15.8

ContiTech 7.3 9.2 6.5 6.2 7.3 7.7 6.0 7.0 7.7 7.1 7.6 6.8 4.5

Continental Corporation 10.6 12.3 6.0 11.5 10.1 10.3 10.3 9.7 11.1 10.4 9.3 9.8 7.9


Chassis & Safety 12.1 3.2 286.2 -9.1 54.6 5.9 -4.0 -44.7

Powertrain 76.1 4.9 3.5 2.6 16.4 -15.1 -3.0 -204.8

Interior 16.0 13.5 228.5 8.3 31.9 -0.6 9.8 102.2

Tires -4.7 -18.4 -1.4 2.1 -6.0 -21.7 -6.3 -12.6

ContiTech 18.6 -24.7 24.4 40.1 10.8 4.1 16.9 -36.6

Continental Corporation 9.1 -9.4 74.0 3.9 11.4 -10.2 -1.2 -17.9

EBIT margin in %2016 2017 2018


EBIT (€ mn)2016 2017 2018



7) Fact SheetsAdjusted EBIT1 by Quarter

56




Chassis & Safety 238.9 227.4 199.8 252.9 218.2 112.1

Powertrain 121.1 118.5 91.3 107.7 114.7 -68.0

Interior 197.3 207.7 200.3 202.1 228.0 213.4

Tires 496.4 520.7 519.7 400.2 497.3 454.6

ContiTech 139.0 120.3 131.9 131.0 133.7 91.7

Other / Consolidation -28.8 -27.8 -38.6 -35.0 -30.6 -32.0

Continental Corporation 1,163.9 1,166.8 1,104.4 1,058.9 1,161.3 771.8


Chassis & Safety 9.6 9.3 8.7 10.1 8.9 5.0

Powertrain 6.0 6.1 5.0 5.5 5.7 -3.7

Interior 8.6 9.0 8.9 8.4 9.0 9.1

Tires 18.0 18.5 18.5 15.2 17.8 16.0

ContiTech 9.2 7.6 8.4 8.6 8.2 5.9

Continental Corporation 10.6 10.6 10.3 9.7 10.2 7.2

Q1 Q2 Q3 Q4 Year

Chassis & Safety 5.9 -4.0 -43.9

Powertrain -11.1 -3.2 -174.5

Interior 2.4 9.8 6.5

Tires -19.4 -4.5 -12.5

ContiTech -5.8 11.1 -30.5

Continental Corporation -9.0 -0.5 -30.1

Adj. EBIT 1 margin in %

Changes Y-o-Y in %

2017 2018

2018

Adj. EBIT 1 (€ mn)

2017 2018



7) Fact SheetsConsolidated Statement of Income1

57

1Due to the application of the modified retrospective approach during first time adoption of IFRS 9, Financial Instruments, and IFRS 15, Revenues from Contracts

with Customers, as at January 1, 2018, all the figures from comparative periods are shown unadjusted.



2018 2017 2016 2018 2017 2016

9M 9M 9M Q3 Q3 Q3

Sales 33,174.3 32,725.6 30,025.5 10,787.8 10,692.7 9,983.8

Cost of sales -24,827.3 -24,286.6 -22,018.3 -8,170.5 -7,948.3 -7,409.1

Gross margin on sales 8,347.0 8,439.0 8,007.2 2,617.3 2,744.4 2,574.7

Research and development expenses -3,188.4 -2,356.9 -2,171.0 -1,084.5 -777.5 -728.1

Selling and logistics expenses -1,844.7 -1,797.2 -1,663.2 -609.5 -588.3 -554.0

Administrative expenses -842.9 -866.1 -763.2 -268.8 -269.7 -265.1

Other expenses and income 474.1 -164.5 -573.3 193.5 -85.7 -444.4

Income from equity-accounted investees 44.2 50.2 49.7 3.6 14.1 13.1

Other income from investments 0.5 0.4 0.4 0.2 0.1

Earnings before interest and tax 2,989.8 3,304.9 2,886.6 851.6 1,037.5 596.3

Interest income 69.2 68.0 74.3 24.6 21.4 24.7

Interest expense -219.3 -287.6 -147.9 -63.6 -77.2 -49.7

Financial result -150.1 -219.6 -73.6 -39.0 -55.8 -25.0

Earnings before tax 2,839.7 3,085.3 2,813.0 812.6 981.7 571.3

Income tax expense -616.2 -817.7 -742.4 -176.4 -240.0 -175.3

Net income 2,223.5 2,267.6 2,070.6 636.2 741.7 396.0

Non-controlling interests -37.7 -43.5 -53.3 -10.1 -12.6 -17.5

Net income attributable to the shareholders of the parent 2,185.8 2,224.1 2,017.3 626.1 729.1 378.5

Basic earnings per share (in €) 10.93 11.12 10.09 3.13 3.64 1.90

Diluted earnings per share (in €) 10.93 11.12 10.09 3.13 3.64 1.90

(€ mn)

7) Fact SheetsConsolidated Statement of Financial Position – Assets1

58



Assets in € millions Sept. 30, 2018 Dec. 31, 2017 Sept. 30, 2017

Goodwill 7,037.6 7,010.1 6,818.8

Other intangible assets 1,503.0 1,607.3 1,481.8

Property, plant and equipment 11,665.7 11,202.1 10,723.4

Investment property 11.0 10.5 10.7

Investments in equity-accounted investees 635.8 414.8 404.6

Other investments 196.9 51.0 47.3

Deferred tax assets 1,527.7 1,517.2 1,741.3

Defined benefit assets 29.7 16.0 36.1

Long-term contract assets 0.1 n. a. n. a.

Long-term derivative instruments and interest-bearing investments 38.6 113.3 84.4

Long-term other financial assets 72.6 68.8 64.5

Long-term other assets 25.8 27.3 26.9

Non-current assets 22,744.5 22,038.4 21,439.8

Inventories 4,690.0 4,128.2 4,355.9

Trade accounts receivable 8,401.1 7,669.3 8,222.7

Short-term contract assets 84.6 n. a. n. a.

Short-term other financial assets2

476.4 297.0 292.5

Short-term other assets2

1,252.4 1,186.8 1,244.9

Income tax receivables 208.3 178.2 224.0

Short-term derivative instruments and interest-bearing investments 153.4 47.6 47.7

Cash and cash equivalents 1,621.7 1,881.5 1,530.9

Assets held for sale 1.9 13.5 2.9

Current assets 16,889.8 15,402.1 15,921.5

Total assets 39,634.3 37,440.5 37,361.3

1 Due to the application of the modified retrospective approach during first time adoption of IFRS 9, Financial

Instruments, and IFRS 15, Revenues from Contracts with Customers, as at January 1, 2018, all the figures from

comparative periods are shown unadjusted

2 From the 2018 reporting year, the presentation of financial assets is made more transparent by reclassifying deferred

costs from the sale of customer tooling from short-term other financial assets to short-term other assets among these

items of the statement of financial position. The figures from the comparative periods have been adjusted accordingly.

7) Fact SheetsConsolidated Statement of Financial Position – Total Equity and Liabilities1

59



Equity and liabilities in € millions Sept. 30, 2018 Dec. 31, 2017 Sept. 30, 2017

Subscribed capital 512.0 512.0 512.0

Capital reserves 4,155.6 4,155.6 4,155.6

Retained earnings 14,985.7 13,669.3 12,908.8

Other comprehensive income -2,437.9 -2,508.5 -2,324.7

Equity attributable to the shareholders of the parent 17,215.4 15,828.4 15,251.7

Non-controlling interests 465.1 461.9 446.9

Total equity 17,680.5 16,290.3 15,698.6

Long-term employee benefits 4,186.6 4,394.1 4,288.1

Deferred tax liabilities 378.9 348.5 465.0

Long-term provisions for other risks and obligations 168.1 139.6 181.8

Long-term indebtedness 1,452.1 2,017.8 2,010.4

Long-term other financial liabilities 34.7 36.1 41.5

Long-term contract liabilities 16.6 n. a. n. a.

Long-term other liabilities 14.6 25.4 15.0

Non-current liabilities 6,251.6 6,961.5 7,001.8

Short-term employee benefits 1,523.4 1,490.6 1,479.5

Trade accounts payable 6,685.0 6,798.5 6,369.8

Short-term contract liabilities 1,126.7 n. a. n. a.

Income tax payables 912.5 889.7 802.1

Short-term provisions for other risks and obligations 921.1 943.0 959.2

Short-term indebtedness 3,356.7 2,072.2 2,950.5

Short-term other financial liabilities 406.3 1,276.8 1,244.8

Short-term other liabilities 770.5 717.9 855.0

Current liabilities 15,702.2 14,188.7 14,660.9

Total equity and liabilities 39,634.3 37,440.5 37,361.3

1Due to the application of the modified retrospective approach during first time adoption of IFRS 9, Financial

Instruments, and IFRS 15, Revenues from Contracts with Customers, as at January 1, 2018, all the figures from

comparative periods are shown unadjusted

7) Fact SheetsConsolidated Statement of Cash Flows

60

1

1



2018 2017 2018 2017Net income 2,223.5 2,267.6 636.2 741.7

Income tax expense 616.2 817.7 176.4 240.0

Financial result 150.1 219.6 39.0 55.8

EBIT 2,989.8 3,304.9 851.6 1,037.5

Interest paid -98.0 -116.7 -57.0 -55.4

Interest received 25.1 19.2 9.2 5.7

Income tax paid -619.9 -871.1 -169.8 -273.2

Dividends received 22.6 24.2 7.0 3.2

Depreciation, amortization, impairment and reversal of impairment losses 1,634.4 1,568.2 560.2 544.7

Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses -44.7 -50.6 -3.6 -14.3

Gains/losses from the disposal of assets, companies and business operations -155.2 -26.7 -146.3 -3.2

Changes in

inventories -562.7 -688.1 -160.2 -183.0

trade accounts receivable -620.6 -1,119.6 -102.2 -416.5

trade accounts payable -108.0 274.7 -193.2 -164.9

employee benefits and other provisions -169.9 80.6 -15.1 174.2

other assets and liabilities -117.1 170.7 127.7 210.1

Cash flow arising from operating activities 2,175.8 2,569.7 708.3 864.9

Cash flow from the disposal of property, plant and equipment, and intangible assets 43.0 30.6 7.2 6.9

Capital expenditure on property, plant and equipment, and software -1,956.2 -1,794.9 -781.8 -636.8

Capital expenditure on intangible assets from development projects and miscellaneous -86.3 -81.0 -53.8 -21.1

Cash flow from the disposal of companies and business operations 8.9 20.8 9.1 0.6

Acquisition of companies and business operations -190.1 -273.2 -16.3 -34.3

Cash flow arising from investing activities -2,180.7 -2,097.7 -835.6 -684.7

Cash flow before financing activities (free cash flow) -4.9 472.0 -127.3 180.2

Change in indebtedness 701.7 -87.2 -362.5 -432.8

Successive purchases -2.7 -0.7 -0.1 0.1

Dividends paid -900.0 -850.0 — —

Dividends paid to and cash changes from equity transactions with non-controlling interests -29.3 -29.6 -1.8 -2.7

Cash and cash equivalents arising from first-time consolidation of subsidiaries 2.0 0.7 1.5 0.1

Cash flow arising from financing activities -228.3 -966.8 -362.9 -435.3

Change in cash and cash equivalents -233.2 -494.8 -490.2 -255.1

Cash and cash equivalents at the beginning of the reporting period 1,881.5 2,107.0 2,131.5 1,806.4

Effect of exchange-rate changes on cash and cash equivalents -26.6 -81.3 -19.6 -20.4

Cash and cash equivalents at the end of the reporting period 1,621.7 1,530.9 1,621.7 1,530.9

January 1 to September 30 Third QuarterConsolidated Statement of Cash Flows in € millions

7) Fact Sheets9M 2018 Results Reported and Adjusted (€ mn) – by Division

61



2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Sales 7,243.0 7,214.0 5,760.8 5,824.0 6,881.3 7,292.9 8,387.4 8,289.0 4,677.2 4,790.0 -224.1 -235.6 32,725.6 33,174.3

EBIT 666.3 581.7 314.3 123.0 550.5 740.8 1,547.0 1,339.1 322.0 302.8 -95.2 -97.6 3,304.9 2,989.8in % of sales 9.2% 8.1% 5.5% 2.1% 8.0% 10.2% 18.4% 16.2% 6.9% 6.3% 10.1% 9.0%

Amortization of intangible assets from PPA 0.0 0.0 9.0 8.6 34.6 38.2 14.2 13.4 70.2 67.9 0.0 0.0 128.0 128.1

Total special effects -0.2 1.5 7.6 22.8 20.8 -149.4 -24.4 0.0 -0.6 -0.1 0.0 0.0 3.2 -125.2

Total consolidation effects 0.0 0.0 0.0 0.0 -0.6 13.9 0.0 -0.4 -0.4 -14.2 0.0 0.0 -1.0 -0.7

Total consolidation & special effects -0.2 1.5 7.6 22.8 20.2 -135.5 -24.4 -0.4 -1.0 -14.3 0.0 0.0 2.2 -125.9

Adjusted operating result (adj. EBIT) 1

666.1 583.2 330.9 154.4 605.3 643.5 1,536.8 1,352.1 391.2 356.4 -95.2 -97.6 3,435.1 2,992.0in % of adjusted sales 9.2% 8.1% 5.7% 2.7% 8.8% 8.8% 18.3% 16.3% 8.4% 7.6% 10.5% 9.0%

CorporationPowertrain InteriorChassis & Safety Tires ContiTech Cons./Corr.



7) Fact Sheets9M 2018 Results Reported and Adjusted (€ mn) – by Group

62





2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018

Sales 6,344.3 6,411.2 4,361.1 4,390.0 -12.7 -13.4 10,692.7 10,787.8 19,759.7 20,203.4 13,003.3 13,011.8 -37.4 -40.9 32,725.6 33,174.3

EBIT 451.6 364.2 624.5 519.4 -38.6 -32.0 1,037.5 851.6 1,531.1 1,445.5 1,869.0 1,641.9 -95.2 -97.6 3,304.9 2,989.8

in % of sales 7.1% 5.7% 14.3% 11.8% 9.7% 7.9% 7.7% 7.2% 14.4% 12.6% 10.1% 9.0%

Amortization of intangible assets from PPA 14.6 15.5 27.9 27.7 0.0 0.0 42.5 43.2 43.6 46.8 84.4 81.3 0.0 0.0 128.0 128.1

Total special effects 25.8 -125.9 -0.5 -0.3 0.0 0.0 25.3 -126.2 28.2 -125.1 -25.0 -0.1 0.0 0.0 3.2 -125.2

Total consolidation effects -0.6 3.7 -0.3 -0.5 0.0 0.0 -0.9 3.2 -0.6 13.9 -0.4 -14.6 0.0 0.0 -1.0 -0.7

Total consolidation & special effects 25.2 -122.2 -0.8 -0.8 0.0 0.0 24.4 -123.0 27.6 -111.2 -25.4 -14.7 0.0 0.0 2.2 -125.9

Adjusted operating result (adj. EBIT) 1 491.4 257.5 651.6 546.3 -38.6 -32.0 1,104.4 771.8 1,602.3 1,381.1 1,928.0 1,708.5 -95.2 -97.6 3,435.1 2,992.0

in % of adjusted sales 7.8% 4.0% 15.0% 12.5% 10.3% 7.2% 8.1% 6.8% 14.8% 13.2% 10.5% 9.0%

Q3 2017/2018 9M 2017/2018

CorporationAutomotive Rubber Cons./Corr. Corporation Automotive Rubber Cons./Corr.

7) Fact SheetsContinental’s Credit Rating

63

BBB+ / Baa1

BBB / Baa2

BBB- / Baa3

BB+ / Ba1

BB / Ba2

BB- / Ba3

B+ / B1

B / B2

S&P, Fitch / Moody’s Standard & Poor’s1 Moody’s2

Fitch3

Before

Siemens VDO No

n-I

nv

estm

en

t

Gra

de

Investm

ent

Gra

de

1 Contracted rating since May 19, 2000.2 Non-contracted rating since February 1, 2014.3 Contracted rating since November 7, 2013.



ReferencesUseful Links

64

Continental Investor Relations website www.continental-ir.com

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

2017 Fact Book (Investor presentation) www.continental-corporation.com/en/investors/reports

Investor Relations

events and presentations

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

Sustainability at Continental

(presentations for investors)

www.continental-corporation.com/en/sustainability/downloads

Corporate Social Responsibility www.continental-sustainability.com

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

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

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

Continental IR on Twitter www.twitter.com/Continental_IR



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

http://www.continental-corporation.com/en/investors/reports

http://www.continental-corporation.com/en/investors/reports

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

http://www.continental-corporation.com/en/sustainability/downloads

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

http://www.continental-corporation.com/en/company/corporate-governance/principles-and-declarations

http://www.continental-corporation.com/en/investors/share

http://www.continental-corporation.com/en/investors/debt-and-rating

http://www.twitter.com/Continental_IR

Documents

9M 2018 Results Hanover November 8, 2018 · Continental Enhances Driver Safety by Eliminating Forward Blind Spots New system specially designed for high-end sporty performance. Power