Continental Ag · XETR:CON
Continental — Investor Day (December 2023)
28 slides from Continental's investor day presentation, Dec 4, 2023
Slide 1: The Future in Motion - Automotive Capital Market Day
@ntinental The Future in Motion Philipp von Hirschheydt oy Automotive CapitalMarketDay )////
Slide 2: 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 3: 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 4: 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 5: 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 6: LEAD
%~ LEAD
Slide 7: 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 8: 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 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 Digital Clu
Slide 9: 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 10: 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 11: 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 12: FOCUS
@ FOCUS
Slide 13: 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 14: 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 15: FOCUS User Experience - Continental as Best Owner?
@ FOCUS User Experience - Continental as Best Owner? WA Carve-out initiated to Highly attractive business create strategic options Strong order intake momentum WA Hardware focused business Leading market position in display WA Significant investment solutions, head-up and digital cluster needs WA No
Slide 16: FOCUS Smart Mobility - Leveraging Synergies
@ FOCUS Smart Mobility - Leveraging Synergies SMY sales of ~€2.6 bn integrated into business areas Commercial & Special (750% ) Vehicles > ADAS sensors & instrumentation > Control units & telematics > Tachograph & fleet management > Key as a Service _l Light & Actuators > Front & rear light control
Slide 17: FOCUS Strong Commercial Vehicle Business in AM
@ FOCUS Strong Commercial Vehicle Business in AM Target Major player for CV autonomous Customers driving Strategy Increase Enhance proximity to CV strategic focus customers Synergies on CV business Leverage internal Leveraging our CV synergies and .. While maintaining know-how expertise... a strong
Slide 18: PERFORM
Slide 19: PERFORM Strict Profitability Management
PERFORM Strict Profitability Management Operating Operational leverage excellence > Increase content per vehicle and new business models > Manufacturing improvements > Commercial excellence Fixed-cost reduction > Organizational delayering > Bundling of activities R&D efficiency > Consolidation > Bes
Slide 20: PERFORM Profitability Target
PERFORM Profitability Target Sales (€ bn) | Adjusted EBIT! margin (%) DE? ~€22-24 bn eee - Ea ~€20-21 bn Other measures R&D efficiency AM SAM SMY UX 2022 mi 2023e FO Fixed-cost reduction Operational excellence Operating Market leverage Adj. growth EBIT' (%) 2023e VOLUME Short-term VOLUME 1 Before am
Slide 21: PERFORM Operating Leverage
@ PERFORM Operating Leverage Volume 5 FP ITatef eevee Market growth Around 1 % average worldwide light vehicle production growth assumed mid-term Self-help Increase worldwide share at over-proportionally growing customers such as COEMs Outperformance Increase content per vehicle and leverage new bus
Slide 22: PERFORM Operational Excellence
@®) PERFORM Operational Excellence Cost focus Premium freight reduction Lower manufacturing cost per unit Improve efficiency in electronics manufacturing Cash flow focus Minimize obsolescence costs Improve line utilization to reach capex to sales of less than 7% Effective investment strategy Increas
Slide 23: PERFORM Fixed-Cost Reduction Program
© PERFORM Fixed-Cost Reduction Program Recurring cost savings effective in 2025 (€ mn) Cost reduction measures Reduction of two organizational layers Bundling of activities Target Measures Approvedby Implementation Execution Streamlining processes identified | management started completed Target: Co
Slide 24: PERFORM R&D Efficiency
@® PERFORM R&D Efficiency Optimize R&D footprint R&D re-organization Increase best-cost share from ~60% of employees in 2023e to ~70% by 2028e Transfer and strengthening of R&D in Asia / China Consolidate R&D locations to reach calculated average >700 headcount per location Leverage reusable softwar
Slide 25: Automotive Mid-term Financial Outlook
Automotive Mid-term Financial Outlook Sales ROCE A/ ~€26-29 bn %4/© >20% ™™——" Adj. EBIT' margin Cash generation? Ail ~6-8% tT@©L >45% Creating value through market focus and technological leadership amortization of intangibles from PPA, changes in the scope of consolidation (only 2023e), and specia
Slide 26: Automotive Clear Path to Value Creation
Automotive Clear Path to Value Creation software-defined vehicle > We are in the market for the market " > We are the technology provider and system integrator of choice for the > We strictly execute our 3-pillar strategy to drive profitable growth We drive the future of mobility
Slide 27: Disclaimer Capital Market Day 2023
Disclaimer Capital Market Day 2023 This presentation has been prepared by Continental Aktiengesellschaft solely in connection for the Capital Market Day on December 4, 2023, and the subsequent analyst and investor meetings . It has not been independently verified. This presentation as well as remark
Slide 28: The Future in Motion
@ntinentals. The Future in Motion