Slide 1: 9M 2020 Results
9M 2020 Results Hanover – November 11, 2020 Ticker: CON ADR-Ticker: CTTAY http://www.continental-ir.com Wolfgang Schaefer – CFO
Slide 2: Agenda
Agenda Current Situation 3 Group Highlights 4 Automotive Technologies 10 Rubber Technologies 12 Powertrain Technologies 14 Cash Flow and Liquidity 15 Outlook 17 Back-up and Fact Sheets 2019 – 9M 2020 21 Space for Sender Information 9M 2020 Results – November 11, 2020 Confidential © Investor Relation
Slide 3: Current Situation: Recap of Q3 2020
1 | Current Situation Recap of Q3 2020 Markets Continental Passenger car & light truck production (vs. prior year) Quick and successful ramp-up of activities in all businesses & regions › (-) Worldwide: -3.5% Continued cost and capex discipline › (+) China: 11% › Fixed costs (excl. D&A) : >8% down y
Slide 4: Transformation 2019 – 2029 Overview
2 | Group Highlights Transformation 2019 – 2029 Overview Targeted Annual Gross Cost Savings Program Details Powertrain › Around 30,000 jobs worldwide are likely to be affected Technologies › Thereof about 13,000 jobs to be affected in Germany, and a further major portion in high-labor-cost countries
Slide 5: There's a lot of Continental in the new ID.3
2 | Group Highlights There's a lot of Continental in the new ID.3 Space for Sender Information 9M 2020 Results – November 11, 2020 Confidential © Investor Relations Continental AG 5 Sources: Continental, Volkswagen; Background: AdobeStock
Slide 6: Vitesco Technologies Strongly Benefitting from Increasing Electrification Demand
2 | Group Highlights Vitesco Technologies Strongly Benefitting from Increasing Electrification Demand Strong market reception of EMR3 E-axle Sizable business win supports future growth High Voltage Axle Drive High Voltage Box › Combination of e-motor, › Redeployment of our electronics inverter and r
Slide 7: Most Important KPIs for 9M 2020
2 | Group Highlights Most Important KPIs for 9M 2020 9M 2019 9M 2020 Change Comments Sales €33.4 bn €26.8 bn -19.7% Organic growth -18.1%; FX -€578 mn Adjusted EBIT1 €2,361 mn €629 mn -€1,732 mn Adjusted EBIT1 margin 7.1% 2.4% -470 bps PPA2 -€134 mn -€138 mn Special effects -€2,621 mn -€1,563 mn Car
Slide 8: Q3 2020 – Sales and Earnings Performance
2 | Group Highlights Q3 2020 – Sales and Earnings Performance Sales (€ mn) Adjusted EBIT1 (€ mn) Sales -2.7% › Impact from FX: 11,103 10,295 › Continental Group -3.7% › Automotive Technologies -3.4% 4,673 › Rubber Technologies -4.1% -6.4% 4,101 › Powertrain Technologies -3.3% 8.1% 5.6% 832 612 99 2.
Slide 9: Regional Production vs. Sales Growth by Group Sectors in Q3 2020
2 | Group Highlights Comparison of Regional Production vs. Sales Growth by Group Sectors in Q3 2020 Europe1 North America1 China1 Worldwide1 ∆ Y-o-Y in % ∆ Y-o-Y in % ∆ Y-o-Y in % ∆ Y-o-Y in % 15 15 15 15 10 10 10 10 ~+6%-pts 5 5 5 5 ~-2%-pts 0 0 0 0 -5 -5 -5 -5 -10 -10 -10 -10 -15 -15 -15 -15 Europ
Slide 10: Q3 2020 – Autonomous Mobility and Safety
3 | Automotive Technologies Q3 2020 – Autonomous Mobility and Safety Sales (€ mn) Adjusted EBIT1 (€ mn) Sales -5.0% › Deconsolidation effect of -€123 mn on reported 2,290 sales from Chinese HBS joint venture › Organic growth in China and North America 1,987 outpaced local PC< production › European
Slide 11: Q3 2020 – Vehicle Networking and Information
3 | Automotive Technologies Q3 2020 – Vehicle Networking and Information Sales (€ mn) Adjusted EBIT1 (€ mn) Sales -7.9% › Double-digit organic growth in China 2,409 › Negative demand development in North America and Europe 2,130 › Decline mainly attributed to disruptive technological change within H
Slide 12: Q3 2020 – Tires
4 | Rubber Technologies Q3 2020 – Tires Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 0.5% › Impact from FX: -3.9% 2,990 2,889 › Volume: -1.8% › Strong Chinese and US markets could not compensate for still tepid European market › Slow start to winter tire sell-in 494 17.1% › Price/mix: +2.4% 14.0% 420 ›
Slide 13: Q3 2020 – ContiTech
4 | Rubber Technologies Q3 2020 – ContiTech Sales (€ mn) Adjusted EBIT1 (€ mn) Sales -5.0% › Impact from FX: -4.3% 1,598 › Steady recovery in all end markets 1,470 › OE: -6.4% organic, supported by Mobile Fluid Systems and Surface Solutions business units › Industrial & Aftermarket: -3.5% organic, w
Slide 14: Q3 2020 – Powertrain
5 | Powertrain Technologies Q3 2020 – Powertrain Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 2.4% › Electrification Technology4 business unit sales 1,926 1,909 at €130 mn (€64 mn in Q3 2019) mainly driven by power electronics and high voltage E-axle › Outperformance in Europe and China led by Electrifi
Slide 15: Free Cash Flow Benefited in Q3 from Reversal of Working Capital Effects
6 | Cash Flow and Liquidity Free Cash Flow Benefited in Q3 from Reversal of Working Capital Effects Cash Flow Q3 2020 (€ mn) Operating Investing Free Cash Flow Financing Operating Cash Flow Carve-out effects Acquisitions before acquisitions excluding carve-out effects › Reversal of negative working
Slide 16: Financial Position Remains Solid
6 | Cash Flow and Liquidity Financial Position Remains Solid Liquidity and Bond maturities (€ mn) Credit Lines Liquidity Bond maturities1 10,144 › Solid financial position › Availability of the credit facilities is not subject to financial covenants or ratings triggers 7,629 Bonds 3,325 › Redemption
Slide 17: Outlook: Continued Y-o-Y Decline Expected in Most Markets in Q4
7 | Outlook: Current Market Assumptions Continued Y-o-Y Decline Expected in Most Markets in Q4 Vehicle Production Replacement Tires Passenger Cars Commercial Passenger Cars Commercial & Light Trucks Vehicles & Light Trucks Vehicles Q4e 2020 FYe 2020 Q4e 2020 FYe 2020 Q4e 2020 FYe 2020 Q4e 2020 FYe 2
Slide 18: Outlook: Continental Group 2020
7 | Outlook: Continental Group 2020 2019 2020E Consolidated sales €44.5 bn Around €37.5 bn Adj. EBIT1 margin 7.4% Around 3% Automotive sales €26.5 bn Around €22.0 bn Adj. EBIT1 margin 4.4% Around -1.5% Rubber sales €18.0 bn Around €15.5 bn Adj. EBIT1 margin 12.4% Around 10.5% Raw materials cost impa
Slide 19: Space for Sender Information Confidential
Space for Sender Information Confidential
Slide 20: Disclaimer
Disclaimer › This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Analyst and Investor Call on November 11, 2020, and the subsequent analyst and investor meetings. It has not been independently verified. It does not constitute an offer, invitation or re
Slide 21: Back-up
Back-up Space for Sender Information 9M 2020 Results – November 11, 2020 Confidential © Investor Relations Continental AG 21
Slide 22: Regional Production vs. Sales Growth by Group Sectors in 9M 2020
Back-up Comparison of Regional Production vs. Sales Growth by Group Sectors in 9M 2020 Europe1 North America1 China1 Worldwide1 ∆ Y-o-Y in % ∆ Y-o-Y in % ∆ Y-o-Y in % ∆ Y-o-Y in % 15 15 15 15 10 10 10 5 10 ~+4%-pts ~+10%-pts 5 5 0 0 5 0 -5 -5 0 -5 -10 0 -10 -10 -15 -15 -5 -15 -20 -25 -20 -20 -10 -30
Slide 23: Key Historical Credit Metrics
Back-up Key Historical Credit Metrics (€ mn)1 2016 2017 2018 2019 5 LTM Statement of Cash Flows Adjusted EBITDA 6,125 6,701 6,190 5,837 4,122 Reported EBITDA 6,057 6,679 6,236 4,977 2,774 Net cash interest paid -112 -105 -91 -83 -118 Tax paid -1,047 -1,122 -848 -866 -732 Change in net working capita
Slide 24: Capex, Depreciation and Earnings per Share – Breakdown for 9M 2020
Back-up Capex, Depreciation and Earnings per Share – Breakdown for 9M 2020 Capex, Depreciation and PPA1 (€ mn) EPS excl. PPA1,2 (€) 3 4,240 3 2,705 3 1,956 2,204 3 1,506 1,379 5.9% 6.6% 5.1% 128 134 138 - 5.34 - 5.84 0.50 2018 2019 2020 1 Reported EPS PPA per EPS excl. 2 share after tax PPA1,2 ■ Cap
Slide 25: Relevant Bonds
Back-up Relevant Bonds Continental AG Conti-Gummi Finance Conti-Gummi Finance Continental AG Continental AG Issuer B.V., Netherlands1 B.V., Netherlands1 Issue Senior Notes Principal €500 mn €750 mn €625 mn €600 mn €750 mn amount Offering price 99.804% 99.559% 99.589% 99.802% 98.791% Rating Baa1 (Moo
Slide 26: Investment Grade Credit Profile
Back-up Investment Grade Credit Profile Leverage ratio1 Gearing ratio2 Equity ratio3 Continental’s current credit rating is: Continental’s targets: › Fitch (since April 20, 2020): BBB, outlook stable › Rating: BBB / BBB+ › S&P (since March 30, 2020): BBB, outlook negative › Leverage ratio1: well bel
Slide 27: Continental's Credit Rating
Back-up Continental’s Credit Rating S&P, Fitch / Moody’s BBB+ / Baa1 Investment grade BBB / Baa2 BBB- / Baa3 BB+ / Ba1 Non-investment BB / Ba2 grade Before BB- / Ba3 Siemens VDO B+ / B1 B / B2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Standard & Poor’s1 Moody’s2 Fitc
Slide 28: Fact Sheets 2019 – 9M 2020
Fact Sheets 2019 – 9M 2020 Space for Sender Information 9M 2020 Results – November 11, 2020 Confidential © Investor Relations Continental AG 28
Slide 29: Sales and Adjusted EBIT by Quarter
Fact Sheets Sales and Adjusted EBIT1 by Quarter Sales Adjusted EBIT1 2019 2020 2019 2020 Sales (€ mn) Adj. EBIT¹ (€ mn) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Autonomous Mobility and Safety 2,359.0 2,384.0 2,289.8 2,348.8 9,381.6 2,060.3 1,256.2 1,987.0 Autonomous Mobili
Slide 30: EBITDA and EBIT by Quarter
Fact Sheets EBITDA and EBIT by Quarter EBITDA EBIT 2019 2020 2019 2020 (€ mn) Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Q1 Q2 Q3 Q4 Year Autonomous Mobility and Safety 270.0 292.7 260.4 322.2 1,145.3 151.3 -61.6 168.0 147.2 164.4 -590.9 159.0 -120.3 11.8 -193.9 45.8 Vehicle Networking and I
Slide 31: Consolidated Statement of Income
Fact Sheets Consolidated Statement of Income 2020 2019 2020 2019 (€ mn) 1-9 1-9 Q3 Q3 Sales 26,827.7 33,414.1 10,295.3 11,103.4 Cost of sales -20,897.9 -25,327.8 -7,636.0 -8,449.7 Gross margin on sales 5,929.8 8,086.3 2,659.3 2,653.7 Research and development expenses -3,142.2 -3,357.2 -1,009.2 -1,12
Slide 32: Consolidated Statement of Financial Position – Assets
Fact Sheets Consolidated Statement of Financial Position – Assets Assets (€ mn) September 30, 2020 December 31, 2019 September 30, 2019 Goodwill 4,373.8 5,113.5 5,107.1 Other intangible assets 1,516.4 1,691.8 1,708.5 Property, plant and equipment 13,698.7 14,932.7 14,735.9 Investment property 11.3 1
Slide 33: Consolidated Statement of Financial Position – Total Equity and Liabilities
Fact Sheets Consolidated Statement of Financial Position – Total Equity and Liabilities Equity and liabilities (€ mn) September 30, 2020 December 31, 2019 September 30, 2019 Subscribed capital 512.0 512.0 512.0 Capital reserves 4,155.6 4,155.6 4,155.6 Retained earnings 11,753.9 13,522.1 13,820.8 Oth
Slide 34: Consolidated Statement of Cash Flows
Fact Sheets Consolidated Statement of Cash Flows January 1 to September 30 Third Quarter (€ mn) 2020 2019 2020 2019 Net income -1,148.4 -895.6 -703.3 -1,977.9 Income tax expense -60.6 342.8 -49.9 -53.5 Financial result 142.8 158.9 79.8 60.9 EBIT -1,066.2 -393.9 -673.4 -1,970.5 Interest paid -120.5 -
Slide 35: Reported and Adjusted 9M 2020 Results
Fact Sheets Reported and Adjusted 9M 2020 Results Autonomous Mobility Vehicle Networking (€ mn) Tires ContiTech Powertrain Cons. / Corr. Group and Safety and Information 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 Sales 7,032.8 5,303.5 7,278.4 5,579.2 8,691.6 7,284.4 4,848.
Slide 36: References
References Useful Links Continental Investor Relations website www.continental-ir.com Annual and interim reports www.continental-corporation.com/en/investors/reports Fact Book / Investor Presentation https://www.continental.com/resource/blob/216182/efcf10cdc6ebd9fbc952e257cd2dcfd7/investor- presenta
Slide 37: Financial Calendar
Continental Financial Calendar 2020 Annual Financial Press Conference March 5, 2020 Q1 Financial Report May 7, 2020 Annual Shareholders’ Meeting (virtual) July 14, 2020 Half-Year Financial Report August 5, 2020 Nine-Month Financial Report November 11, 2020 Capital Market Days (w/o Powertrain Technol
Slide 38: Contact
Contact Equity and Debt Markets Relations Vahrenwalder Str. 9 e-mail: ir@conti.de 30165 Hanover Fax: +49 511 938-1080 Germany www.continental-ir.com Bernard Wang Phone: +49 511 938-1068 Michael Saemann Phone: +49 511 938-1307 Head of IR e-mail: bernard.wang@conti.de Analysts, Institutional Investors