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Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
Ticker: CON
ADR-Ticker: CTTAY
http://www.continental-ir.com
Michael Sämann, IR Manager
Sabine Reese, IR Manager
Thomas Sewald, Head of Corporate Environment
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
Climate Protection
4 26
Agenda
2EDMR – Equity and Debt Markets Relations
Sustainability at Continental1 3
Clean Mobility
2 14
Circular Economy
3 16Supply Chain
5 24
18
21
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
3EDMR – Equity and Debt Markets Relations
1) Sustainability at Continental Corporate Strategy at a Glance
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
4
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
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
5
Our BASICS
describe how we
want to work
together based on
our four values
Trust, Passion to
Win, Freedom to
act and For one
another.
The Continental
Code of Conduct
describes ethical
standards and
requirements
regarding employee
behavior.
The Corporate Social
Responsibility
Principles describe
our basic areas of
responsibility towards
society.
The Corporate
Governance
Principles describe
in detail the
corporation's
managerial and
supervisory tasks
and processes.
The Quality Policy
describe our approach
towards a quality-
driven culture.
The ESH Policy
defines the basic rules
regarding
environmental
protection and safety &
health in our
production processes.
The Sustainable
Natural Rubber
Policy defines our
detailed
requirements in our
natural rubber
sourcing.
The Business
Partner Code of
Conduct describe
ethical standards and
requirements
regarding supplier
behavior.
1) Sustainability at Continental Policies and Key Principles
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
• Vision: One of the most progressive and attractive
employers
• Corporate Values and Code of Conduct define basics for
good working conditions: i.e. human rights and safety &
health
• Detailed annual Strategic Workforce Planning Process
(SWP)
• HR work focused on “Industrialize Best Fit” and “Enable
Transformation” to cover future workforce demand
Sustainable Engagement Index, measuring
employee commitment in FY 2018
80%› Unforced flucuation: 6.3 %
› Sickness absence rate: 3.3 %
6
1) Sustainability at Continental Culture / People – Good Working Conditions
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
› Good, responsible corporate governance
geared toward sustainable, long-term value
creation and in the interests of all stakeholder
groups
› Compliance with all the legal requirements and
internal regulations is an integral part of our
corporate culture
› Continental counts on the diversity of its
employees and is working on increasing the
proportion of women in management positions
at executive and senior executive level .
7
25.0%2025
14.8%2018
Women in Management Positions
1) Sustainability at Continental Culture / People – Fair Business Practices
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
› We strive to be recognized by our
customers as a benchmark in quality.
› Quality Policy describe our approach
towards a quality-driven culture.
› Certified management systems at our
locations support a higher product and
process quality.
8
Status Quo: Certified quality management
systems according to ISO 9001 o.s.
~90%
total workforce covered by certification
As at Dec.
31, 2018
1) Sustainability at Continental Quality First – Reliable Products by Continental
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 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:
9EDMR – Equity and Debt Markets Relations
1) Sustainability at Continental Innovative Products – Sustainable Mobility: Clean, Safe & Affordable
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
New Credit Line for Continental:
Better Conditions for a More Sustainable Business
• Revolving bank credit line refinanced ahead of schedule
(amount: €4 bn, term: five years)
• Syndication clearly oversubscribed; better credit conditions for
Continental
• Breaking new ground in the German automotive industry:
interest payments will now also depend on concrete
improvements in the company’s sustainability performance
• These include procuring electricity externally from renewable
sources, increasing the proportion of women in management
positions, reducing the accident rate and sick rate, and
increasing the proportion of recycled waste.
10
1) Sustainability at ContinentalSustainable Finance Concept
3)New
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 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/.
11
1) Sustainability at ContinentalMemberships and Initiatives
EDMR – Equity and Debt Markets Relations
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 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:
12
1) Sustainability at Continental Ratings and Indexes
› Ratings:
› Prime (C+) (2019) › Climate: Score B (2019)
› Water: Score B (2019)
› Supply Chain: Score A;
Supplier Engagement
Leader Board (2018)
› Gold Status (2019)
› 65 /100
› Best 5% of companies
› BBB (January 2020) › Outperformer (2019)
73 / 100
EDMR – Equity and Debt Markets Relations
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
13
Good Working Conditions
• Creating inspiring, motivating and
fair working conditions
• Human rights in our own
operations
Innovations & Digitalization
• Maintain innovational strength
• New business models
• Digital transformation & ethics
Green and safe factories
• Sound operations not harming
people or the environment (e.g.
waste & water reduction, energy
efficiency, health & safety)
• Solid management systems
Sustainable Profits
• Generating revenue streams over a
longer time
• Distributing the value generation in
a responsible manner
Corporate Governance
• Responsible management
• Fair business practices
• Balanced view of different
perspectives (diversity)
Product quality
• Delivering high quality products
• Product integrity
• Quality management
Safe Mobility
• Increasing road safety
• Minimizing severe road accidents
and fatalities by technological
solutions
Corporate Citizenship
• Community engagement
• Employee engagement,
volunteering, donations and other
social activities
• “Sustainability Heroes”
Climate
Protection
Clean
Mobility
Circular
Economy
Sustainable
Supply Chain• Zero CO2 from purchased
electricity end of 2020
• Zero CO2 from production
in 2040
• Zero CO2 from entire
value chain in 2050
• Zero Tailpipe Emission
Vehicles (ZTEV)
• Other emissions on the
road
• Focus of EU sustainable
finance taxonomy
• Complete material cycles
for metals and plastics
• Use of renewable
materials
• 95% recycled waste in
2030
• Minimizing negative
social and environmental
impacts in our supply
chains
• Focus on “risk-based Due
Diligence” & processes
Current examples for hot topics regarding sustainability
Source:
https://www.flickr.com/photos/161768312
@N07/46871949391
Fridays for
Future
SDGs
United Nations Sustainable
Development Goals
European
Green Deal
Source: www.bild.de
Blackrock &
others urge
CEOs
CO2 limits &
customer
targets
Source: Volkswagen
Sustainable
Finance
Source: https://theentrepreneurfund.com/
syste
ma
tic s
tra
tegy p
roce
ss
to e
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te r
ele
va
nce
fo
r C
on
tin
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take
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with
17
00
+ p
art
icip
an
ts
1) Sustainability at Continental Materiality Matrix / Impact Evaluation
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
CO2-neutral value chain
14EDMR – Equity and Debt Markets Relations
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
2) Climate ProtectionEnvironment Strategy
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 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
15EDMR – Equity and Debt Markets Relations
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
2) Climate ProtectionOur Goals
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
16EDMR – Equity and Debt Markets Relations
Continental established an environmental management
system throughout the corporation more than 30 years ago.
2) Climate ProtectionStatus 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.
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 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.
17EDMR – Equity and Debt Markets Relations
2) Climate ProtectionEnvironmental Management
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
18
› Business Partner Code of Conduct defines general
sustainability standards for suppliers: i.a.
› Human rights
› Labor standards,
› Environmental protection
› Combatting corruption.
› Dedicated initiatives on sustainable natural rubber in
cooperation with GIZ and participation in a global industry
platform (GPSNR)
› Supplier Self Assessments to evaluate compliance with
standards (750 Supplier Self Assessments via NQC and
EcoVadis as at Dec 31, 2018)
Due Diligence Approach towards a
sustainable supply chain
Policy
Risk Assessment
MitigationGrievance
mechanism
Monitoring & Reporting
3) Supply ChainFocused on ‘Risk-Based’ Due Diligence
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
19
Pilot Project
Traceability in
Indonesia
2018 ff
Sourcing Policy for Sustainable Procurement of Natural Rubber
Joint Venture
Assessement tool
“Rubberway”
2019 ff
Founding member of multi-stakeholder platform
2020 ff
2017 ff
Self-
Assessments
of suppliers
3) Supply ChainDue Diligence: Focus on Sustainable Natural Rubber
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
20
Main Content:
➢ Continental’s commitment to sustainability
➢ Social Principles: Respecting Land Rights and Local Communities,
Improving Working Conditions
➢ Environmental Principles: Protection of Rain Forests, Biodiversity,
Ecosystems and Water
➢ Grievance management: Anonymous Reporting through Anti-
Corruption & Compliance Hotline
➢ Non-compliance of business partners will lead to mandatory
improvement actions. If these improvement actions are not fulfilled
this may result in the termination of business relations.
3) Supply ChainSustainable Natural Rubber Sourcing Policy
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
21
Product Design / R&D Production Cultural mindset change
Use of recycling material
Tire retreading
95%20302018
Recycled waste
Employee engagement campaign:
“Sustainability Heroes”
Exam
ple
s
78%
4) Circular EconomyJourney towards Material Cycles and Renewable Materials
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
8,000 tons
Breathing life into tires a second and even a third time
is the basic idea behind the ContiLifeCycle approach.
21EDMR – Equity and Debt Markets Relations
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
4) Circular EconomyTires – ContiLifeCycle
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
22EDMR – Equity and Debt Markets Relations
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
4) Circular EconomyRemanufacturing
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
24EDMR – Equity and Debt Markets Relations
We will become a full system supplier!
Driving Intelligence› Situation analysis
› Decision-making
› Low-level vehicle control
› ADCU (mid-term)
Seat Material Tailored seat surfaces
› Resilient
› Easy to clean
› Comfortable
LocalizationRobust localization in urban areas
› Radar
› Wireless infrastructure beacons
Radar SensingShort range sensor
› Object detection
› Barrier detection
› 4 sensors for 360° view
Camera Sensing› Object detection
› Barrier detection
› Front sensor cover drive path
Drive Module› One axle drive from
Continental (2018)
Tires› ContiEcoContact™ 5
Lidar SensingSolid state flash lidar (mid-term)
› Object detection
› Barrier detection
› 4 sensors for 360° view
Continental Urban Mobility Experience
5) Clean MobilitySelf Driving Car Project CUbE
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
With our holistic,
intuitive and
ergonomic human-
machine interface,
we capture
commands,
prioritize and
present
information.
Driver & Passengers Devices Infrastructure Other Vehicles We add new functions as wellas value-adding mobility services
by providing a holistic
connection to the outside world.
Vehicle
We manageand optimize the information flow
throughcost-competitive
systems integration.
5) Clean MobilityInformation Management – Inside the Vehicle and Beyond
25
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
Cost Competitive Systems SolutionsWe integrate components, functions and services into cost competitive
systems serving our customers including the aftermarket.
We integrate
Holistic Human-Machine Interface
By knowing the needs of drivers and passengers we provide the expertise
for superior comfort, ergonomics, and intuitive ease-of-use.
We inform
Holistic Connectivity
We provide technologies for vehicle networking to connect drivers and
passengers with vehicles, the cloud and the infrastructure. From products
to services, protected by advanced Cyber Security solutions.
We connect
5) Clean MobilityHolistic Connectivity Product Highlights for Intelligent Mobility
26
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 2020
Disclaimer
› This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the 15th HSBC ESG Conference on February 4-5, 2020, in Frankfurt. 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. Due to the application of the modified retrospective approach during first-time
adoption of IFRS 16, Leases, as at January 1, 2019, all the figures from comparative periods are shown unadjusted.
Sustainability Presentation
15th HSBC ESG Conference
Frankfurt – February 4-5, 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
e-mail: [email protected]
Marvin Kalberlah
Analysts, Institutional Investors and
Social Media
Phone: +49 511 938 14034
e-mail: [email protected]
Christopher Macke
Analysts and Institutional Investors
Phone: +49 511 938 1062
e-mail: [email protected]
Klaus Paesler
Analysts, Institutional Investors, ADR
and Private Investors
Phone: +49 511 938 1316
e-mail: [email protected]
Sabine Reese
Sustainability, ASM, CMD
Organization, IR Website, Capital
Market Disclosure Requirements
Phone: +49 511 938 1027
e-mail: [email protected]
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]