Continental Ag · XETR:CON
Continental — Investor Day (December 2023)
107 slides from Continental's investor day presentation, Dec 4, 2023
Slide 1: Capital Market Day 2023
= 2 BZ. Ss Z Z Z Z A tothe Continek Capital Market dD 2023 CapitalMarketDay .lililii!l/ Hanover, December 4
Slide 2: Capital Market Day 2023 Agenda
Capital Market Day 2023 Agenda Agenda Group Strategy Including introduction Integrity and Law ContiTech Strategy Tires Strategy BREAK Automotive Strategy Group Financials Q&A END Speaker Nikolai Setzer Olaf Schick Philip Nelles Christian Koetz Philipp von Hirschheydt Katja Garcia Vila ALL EBM Approx
Slide 3: Capital Market Day 2023
2023 CapitalMarketDay Hanover, December 4
Slide 4: Continental on the Move
Continental Spotlight Sectors on the Move ee Capital —— Market Day : ~*~ reais LI a Z
Slide 5: Continental on the Move
Continental on the Move - 2020-2023 Era of Era of > Success | i Recalibration Execution Value accretive Deterioration of Stabilization and Excelling out of outperformance profitability laying foundation transformation
Slide 6: 2010-18 Era of Success
2010-18 Era of Success Benchmark performance, premium valuation and investor trust ContiTech > Preferred provider of industry solutions with a balanced portfolio Tires > Operational excellence champion in favorable market conditions Automotive > Leading portfolio driving outperformance and order int
Slide 7: 2018-20 Era of Decline
2018-20 Era of Decline Deterioration of share price performance > Increased technological transformation dynamics > Requirement for major upfront investments paired with higher margin pressure > Significant decline in light- vehicle production aA WINL Our answer Three strategic pillars
Slide 8: 2020-23 Era of Recalibration
2020-23 Era of Recalibration Implementing the right actions (2) Differentiate our portfolio (1) Strengthen operational performance (3) Turn change into opportunity > Manage through crisis > Enhance operational efficiency > Focus on cost and re-pricing > Spin off Powertrain > Perform best-ownership r
Slide 9: 2020-23 Era of Recalibration
2020-23 Era of Recalibration Yet, unsatisfactory results ACTION > Reorganization OUTCOME >» Organizational robustness > Future-proof team > Technological leadership > Portfolio analysis & review > Foundation for execution
Slide 10: 2024+ Era of Execution
2024+ Era of Execution The triple play for future value 2024 2025 2026 2027 2028 2029 2030 Management focus: SHORT-TERM Improve efficiency » GEETiEIgSE PERFORMANCE Consistent delivery " pecourtaity MID-TERM Execute portfolio strategy antitzs A . Industrial logic STRATEGY Stepwise target achievement
Slide 11: 2024+ Era of Execution
2024+ Era of Execution We are the mobility and material technology group for safe, smart and sustainable solutions
Slide 12: 2024+ Era of Execution
2024+ Era of Execution > Execute best-ownership > Portfolio execution team in place > Effective capital allocation mechanism > Reliable profitability and > Exploit synergies and strategic capabilities upside potential through increased industry share Automotive > Growth engine for safe, connected an
Slide 13: 2024+ Era of Execution
2024+ Era of Execution ContiTech > ENSURE SUCCESS by focusing strong margin-accretive INDUSTRY BUSINESS > Legal and physical independence of OE Solutions business area > Rightsizing while improving performance of AUTOMOTIVE BUSINESS > Reliable profitability > Increase industry share to ~80% and upsi
Slide 14: 2024+ Era of Execution
2024+ Era of Execution > Strong resilience across business cycles > Best-in-class value creation and cash generation based on our CORE of > operational excellence > technology > Strong cash > brand power generation > Operational > Realizing OPPORTUNITIES by tapping into profit pools and gaining trac
Slide 15: 2024+ Era of Execution
2024+ Era of Execution Automotive > LEAD - In all product groups in value creation and technological excellence > FOCUS - Strict portfolio management along value-accretive principles > PERFORM - Rigorous execution of cost reduction programs Growth engine for Top in operational and commercial excelle
Slide 16: Group Financial Outlook
Group Financial Outlook 2023e Short-term Mid-term ~€41-43 bn ~€44-48 bn ~€51-56 bn NJ ContiTech ~€6.8-7.2 bn ~€7-8 bn ~€8-9 bn Sales' ~ o Tires ~€14-15 bn ~€15-16 bn ~€17-18 bn Automotive ~€20-21 bn ~€22-24 bn ~€26-29 bn ~5.5-6.5% >8% ~8-11% ” | 1 Adj. EBIT2 ContiTech ~6-7% >9% ~0-11% ee margin’ Tir
Slide 17: Reasons to Invest in Continental
Reasons to Invest in Continental > Top in tech where it counts > Value creation upside generated by tangible performance improvements > Determined team - decisive, execution and performance driven 5 Powered by the passion of our people
Slide 18: Experienced Governance Expert on Board
Experienced Governance Expert on Board Olaf Schick - Executive Board Member Integrity and Law Lawyer, Head of M&A Chief Compliance @iiess Chief Daimler Financial Officer, Mercedes- Benz China 25+ years professional experience
Slide 19: State of the Art Governance
State of the Art Governance Integrated holistic risk, control and compliance management to cope with increasing regulatory requirements Robust processes and systems Proactive, effective and efficient Embedded in our transformation and sustainability strategy On the Road to Competitive Advantage
Slide 20: ContiTech - Philip Nelles
Q@ntinentals- The Future in Motion ail | Philip Nelles a’ ContiTech CapitalMarketDay /illi/i/ ue - Hanover, December 4
Slide 21: We Connect, We Convey, We Cover
Slide 22: ContiTech at a Glance
ContiTech ata Glance Mixed portfolio with significant Regional balance with significant growth potential in industry growth potential in APAC ~€6.8-7.2 A billion J 19% insales Industry Americas 55% 37% ~42,500 employees ed Automotive 45% First choice for material-driven solutions
Slide 23: What Makes Us Unique?
What Makes Us Unique? We partner with We turn materials customers to drive into solutions technological progress We solve problems for demanding di industries Global expertise in Unmatched rubber & thermoplastics product portfolio We are perfectly positioned to succeed in exciting markets
Slide 24: Our Exciting Markets
Our Exciting Markets Construction Mining Industry & Energy & Home Quarries Management Off-Highway Material Handling & — Printing & Packaging Mobility Manufacturing Technology Commercial Vehicles ICE Passenger Vehicles Electric Passenger Vehicles
Slide 25: 2024+ Era of Execution
2024+ Era of Execution Strengthening industry 2023e Ambition Why do we shift to industry? > High-quality business > > Broader revenue streams Automotive 45% [ema > Longer product life cycles Seca Industry 80% > Less cyclical ndustr Yes > Seizing new growth opportunities Enhancing value creation thro
Slide 26: Industry
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Slide 27: Industry Clear Strategic Direction
Industry Clear Strategic Direction Strengthening industry Ambition How will we do it? Continue to grow > Organically > Increasing market penetration > Expansion of product portfolio > Developing market presence > Diversifying through venture units > Inorganically through M&A Ramping up hydraulic gre
Slide 28: Industry Growth Engines
Industry Growth Engines Trends drive technological progress while fueling growth for our industries ( Resource scarcity ) ( circular economy ) ( Smartmaterials) ( Urbanization ) ( Localization ) ( Digitalization ) ( Industry 4.0 ) ( Sustainability ) Great potential for high-quality business through
Slide 29: Growth Engine Construction & Home
Growth Engine Construction & Home
Slide 30: Industry Growth Engine Construction & Home
Industry Growth Engine Construction & Home Total addressablemarket’ = F xnansion, renewal and upgrade of residential, Value 2023e-2028e €6.5-7 bn commercial and infrastructure Growth CAGR 9 2% Our advantage: Our levers: ContiTech sales: High demand for efficient > Extremely compatible with Sales sha
Slide 31: Growth Engine Energy Management
Growth Engine Energy Management
Slide 32: Industry Growth Engine Energy Management
Industry Growth Engine Energy Management Total addressable market: Value 2023e-2028e €2-2.5 bn Growth CAGR 5% ContiTech sales: Sales share 2023e 7% Growth CAGR 2023e-2028e 5% Transformation towards efficiency, decarbonization and localization Our advantage: Our levers: High demand for collaboration
Slide 33: Growth Engine Off-Highway Mobility
Growth Engine Off-Highway Mobility
Slide 34: Industry Growth Engine Off-Highway Mobility
Industry Growth Engine Off-Highway Mobility Totaladdressablemarket! = [ Yemand for technological upgrades, increasing Value 2023e-2028e €15.5-18 bn efficiency and new materials drives growth Growth CAGR 9 3% Our advantage: Our levers: ContiTech sales: Strong demand for high- > Partnering with OEs to
Slide 35: Our Growth Ambition
Our Growth Ambition CAGR~7% Outperformance Outperformance Short-term Sales 2023e CAGR: Compound annual growth rate
Slide 36: Automotive
AUTOMOTIVE
Slide 37: Automotive Clear Strategic Direction
Automotive Clear Strategic Direction Ambition Increasing profits and selective growth ai . How will we do it? Original Equipment Solutions Short-term performance improvements _ > Customer and product portfolio measures Thermal Precision . Management Sealing > Strict cost management _ ’ > Limited cap
Slide 38: Automotive Growth Engine Electric Vehicles
Automotive Growth Engine Electric Vehicles
Slide 39: Automotive Growth Engine Electric Vehicles
Automotive Growth Engine Electric Vehicles Totaladdressablemarket: = Transition to batteries, new materials and net zero Value 2023e-2028e €5.5-18 bn components Growth CAGR 9g 27% Our advantage: Our levers: ContiTech sales: Strong demand for customized > Technical expertise to offer Sales share 2023
Slide 40: Strong Portfolio Management
Strong Portfolio Management CAGR~2% Growth in selected Growth in selected businesses businesses Sales 2023e
Slide 41: Ensure Success
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Slide 42: ContiTech Ensure Success
ContiTech Ensure Success Consolidated Smart Scaling size & Streamlined expertise i organization Automated Green Efficiency & labor Net zero Best-cost independency 2040 business hubs Operational excellence Fixed-cost management Reduce costs by ~2% of sales mid-term
Slide 43: ContiTech Financial Outlook - Mid-term Targets
ContiTech Financial Outlook - Mid-term Targets ~€6.8-7.2 bn Industry/Auto 60/40 Automotive Cost Management v = 2 3 se] 2 2 5 - = Cost Management Industry Adj. EBIT" (%) 2023e (VOLUME —NSEUSHEUPENNNNN Short-term VOLUME —SECSHECPENSSNNNN Mid-term Ambition 1 Before amortization of intangibles from PPA,
Slide 44: ContiTech Mid-term Financial Outlook
ContiTech Mid-term Financial Outlook Sales ROCE2 A/_ ~€8-9 bn 4/® >22% “——— Adj. EBIT’ margin Cash generation? Ail ~9-11% tT®©i >65% Strong ROCE and cash generation pe of consolidation (only 2023e), and special effects, 2 Ratio of EBIT to average operating assets for a fiscal luding major onetime it
Slide 45: ContiTech Continuing Value Creation
ContiTech Continuing Value Creation Strategic capital allocation towards high-quality industry business Stronger industry OE position translates further into profitable replacement business Long-term value creation through market and customer focus Reliable profitability and upside potential through
Slide 46: Capital Market Day 2023
2023 CapitalMarketDay
Slide 47: Tires at a Glance
Tires ata Glance High share of RE business on the back Regional balance with significant growth ~€1 4- 1 5 of a strong OE business opportunities in Americas and APAC billion OF insales 759% Americas 35% ~56,900 employees Replacement 75% APAC 14% Tires are our passion. We outperform the industry with
Slide 48: Resilience in Crises
Resilience in Crises 2018 2019 2020 STOXX Europe 600 Automobile & Parts [Ml Sales [lll EBIT adj Delivering profitable growth despite all headwinds
Slide 49: Financial Highlights
Financial Highlights Sales growth ROCE? A/® >20% in each of the last 10 years® Adj. EBIT2 Cash generation* Al ~€1.7bn t@r ~67% on average (2018-2023e) on average (2018-2023e) Best-in-class value creation and cash generation hs FR: Ge mpo ual gre pauing all 2B tangibles from PPA, changes in the scope
Slide 50: While the Industry Continues to Transform...
While the Industry Continues to Transform... Re Volatile macro environment > Customers seek greater collaboration Geopolitical conflicts and - : 3 > OEMs require superior technical expertise trade barriers 4 > Shift to higher rim sizes > Greater importance of brand trust and tire performance > Ever
Slide 51: 2024+ Era of Execution
2024+ Era of Execution OUR CORE OUR OPPORTUNITY Our customers’ ambitions are our driving force OUR RESPONSIBILITY OUR TEAM
Slide 52: Our Core
OUR COR
Slide 53: CORE Industry-Leading Operational Excellence
CORE Industry-Leading Operational Excellence ~80% ~75% <8 Capacity in mega Best-cost Customer satisfaction plants (>100kt p.a.)" locations! (measured in OE ppm)? Operational excellence is the foundation of our financial performance 1 As of 2023e, in tonnage (total tires). 2 ppm - parts per million,
Slide 54: CORE Major Benefits of Electrification
CORE Major Benefits of Electrification Accelerating opportunities from EVs Driven by our strong OE market position > BEV characteristics drive higher Continental BEV agemanc HP tires homologations u (total) 500+ > OE favor premium tires meeting quality and technology requirements. 100 > “OE to repla
Slide 55: CORE Boosting Our Mix Through UHP Growth
CORE Boosting Our Mix Through UHP' Growth Our exceptional product line-up translates into ..an increasing share of our ultra-high-performance tires UHP share growth for Continental branded tires (PLT2) 57% -* DESIGN AWARD reddot winner 2022 mmm UHP share of PLT sales UHP share of PLT units = tq ‘SuT
Slide 56: CORE Seizing Growth Opportunities in APAC and Americas
CORE Seizing Growth Opportunities in APAC and Americas Increasing global presence Supported by continued investment in our manufacturing and supply chain set-up Sales share of APAC & AM regions “D el ~€1.6 bn invested in APAC/AM plants! Plant expansions > Hefei (China) ® ~ ly > Rayong (Thailand) > C
Slide 57: CORE Manufacturing Footprint
CORE Manufacturing Footprint AMERICAS Production plants! Tonnage? (CAGR3 in %) 2023e 2028e 2023e 2028e stimated production tonnage (in k ton for all tires). 3 CAGR: Compound annual growth rate
Slide 58: Our Responsibility
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Slide 59: RESPONSIBILITY Ambitious Sustainability Roadmap as Key Differentiator
RESPONSIBILITY Ambitious Sustainability Roadmap as Key Differentiator Example: Industry benchmark 2022 - Operations! Energy Intensity Renewable Electricity Mix Water Intensity CO, Emissions Intensity Re Ec 9 0, 0, 0, -22% 100% my -50% -60% Energy usage per output (GJ/t) Share of renewables in Water
Slide 60: RESPONSIBILITY Business Opportunities Arising From Sustainability
RESPONSIBILITY Business Opportunities Arising From Sustainability UltraContact NXT Conti EcoPlus HT3+ Sustainable tire innovations Retreading & renewing Circular solutions » Sustainability advantage Customer benefits > Business opportunities Innovation leader in a dynamic environment
Slide 61: Our Opportunity
OUR OPPORTUNITY
Slide 62: OPPORTUNITY Gaining Traction in Profit Pools
OPPORTUNITY Gaining Traction in Profit Pools > Electrification and UHP growth propelling favorable mix development > > Significant regional growth opportunities in APAC and Americas Sustainability as key differentiator through premium positioning and technology expertise Our CORE and our RESPONSIBIL
Slide 63: OPPORTUNITY Integrated Solutions for Fleets
OPPORTUNITY Integrated Solutions for Fleets In-house automotive expertise as unique differentiator in tires industry Growing our data-driven services Holistic data-driven fleet management solutions for commercial customers Electronics & sensors portfolio Fleet management solutions Ld Remote vehicle
Slide 64: Tires Financial Outlook - Updated Mid-term Targets
Tires Financial Outlook - Updated Mid-term Targets ~€17-18 bn -@ ~€15-16 bn ~€14-15 bn a Sales en Cost management Price/Mix vs. Volume/ RawMat Efficiency Adj. EBIT" (%) 2023e Short-term 1 Before amortization of intangibles from PPA, changes in the scope of consolidation (only 2023e), and special eff
Slide 65: Tires Mid-term Financial Outlook
Tires Mid-term Financial Outlook Sales ROCE2 A/ ~€17-18 bn 4/© >23% “——— Adj. EBIT’ margin Cash generation? Ail ~13-16% t®©i >60% We will continue to outperform in value creation and cash generation pe of consolidation (only 2023e), and special effects, 2 Ratio of EBIT to average operating assets fo
Slide 66: Tires Clear Path of Continued Value Creation
Tires Clear Path of Continued Value Creation > Highly resilient business outperforming regardless of the circumstances > > Industry benchmark in value creation and cash generation performance > Effective capital allocation in strategic profit pools Well-positioned industry leader to continue reliabl
Slide 67: Automotive - Philipp von Hirschheydt
@ntinental The Future in Motion Philipp von Hirschheydt oy Automotive CapitalMarketDay )////
Slide 68: Automotive at a Glance
Automotive ata Glance AV = : : billion Adj. EBIT' margin Global footprint ~ ~ fo} . €20-2 insales —— ~2-3% 56 plants in sf 21 countries “—"_ 82 R&D locations ~102,500 Product clusters in 18 countries SE employees >50 Creating value while driving the future of mobility ata shown as of 2023e. 1 Before
Slide 69: Disruptive Changes and a Clear Path Ahead
Disruptive Changes and a Clear Path Ahead Decline / Recalibration Execution A A C Adj. EBIT" > Technological Rigorous execution of margin transformation 3-pillar strategy: ~9% — | » Significant R&D 1. Lead investments 2. Focus > Only partial input cost recovery 3. Perform > Supply chain disruptions
Slide 70: A Leading Systems Supplier
A Leading Systems Supplier World-class portfolio High-tech and Substantial Leading high-quality software automotive electronic expertise paired systems hardware with partnerships supplier Focused execution required to ensure future commercial Success
Slide 71: Clear Execution Of Our 3-Pillar Strategy
Clear Execution Of Our 3-Pillar Strategy 3% LEAD @ FOCUS 4 PERFORM > Hardware excellence: largest electronics player > Software competence: we shape the software-defined vehicle > System expertise: superior electronics system integrator > Structure: optimized organizational setup > Capital allocatio
Slide 72: Lead
%6 LEAD
Slide 73: LEAD In Our Focus Areas - or Exit
Safe ~4% Market CAGR 2023e-2028e Exciting ~16% Market CAGR 2023e-2028e Autonomous ~12% Market CAGR 2023e-2028e mpound annual growth rate. Outperformance: Sales growth compared to PCE LEAD In Our Focus Areas - or Exit SAM ~100 bps OUTPERFORMANCE AN ~300 bps COUTPERFORMANCE UX ~400bps COUTPERFORMANCE
Slide 74: LEAD One of the Largest Suppliers
LEAD One of the Largest Suppliers Example areas - around 50% of Automotive sales Electronic Brake System Radar Display Solutions Wheel Brake Others Others Continental Continental Continental Continental Peer 1 Peer 1 Others Peer 1 Peer 1 Peer 2 Peer 2 Peer 2 Peer 2 Airbag Systems Access Systems Digi
Slide 75: LEAD Changing Technology Requirements
LEAD Changing Technology Requirements i > Evolving system architectures > Multiple functions consolidation > Specialized and high computing power > Cloud services > Functions on demand > Speed: “Code to road” in 1 day > Evolving technology stacks > Evolving value chain > Increased complexity CSP: Co
Slide 76: LEAD Mastering all Fields: System Integrator of Choice
LEAD Mastering all Fields: System Integrator of Choice Our foundation We are THE system integrator Our offering High-quality hardware paired with software experience Our technology Purpose-built artificial intelligence SoCs from our strategic partner tite, Ambarella. >» We combine software capabilit
Slide 77: LEAD Combining Hardware and Software
LEAD Combining Hardware and Software Selected examples Today: Outstanding technology platform > Electronic Brake System > One Box SAM > Gateways > Body Controller AN > Radar, Camera, Lidar > Ultrasonic Sensors <= <= <= Step 1: Enhanced products - Higher content per vehicle > Future Brake System 2/3
Slide 78: Focus
@ FOCUS
Slide 79: FOCUS Active Portfolio Management
FOCUS Active Portfolio Management Decision criteria > Value creation > Technology focus > System expertise > Growth potential tt if Execution Plan ~25% of total business Review of entire portfolio Improve, sell or close . will change
Slide 80: Streamlining the Business
Streamlining the Business Today's structure Target structure Autonomous Mobility Safety and Motion — ~€1.4 bn sales to improve, sell or close Architecture & Networking Software & Central Technologies @ User Experience ea UX (agility, accessibility, speed) @ Smart Mobility Dissolution of SMY av AN sc
Slide 81: FOCUS User Experience - Continental as Best Owner?
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Slide 83: FOCUS Strong Commercial Vehicle Business in AM
Slide 84: Perform
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Slide 87: PERFORM Operating Leverage
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Slide 92: Automotive Clear Path to Value Creation
Slide 93: Group Financials - Katja Garcia Vila, CFO
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Slide 95: 2024+ Era of Execution
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Slide 98: Era of Execution Effective Capital Allocation
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Slide 104: Group Clear Path to Value Creation
Slide 105: Continental on the Move
Slide 106: Disclaimer Capital Market Day 2023
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