Fact Book Fiscal Year 2012 Contents
I. Continental at a Glance Slide Title Page 1 Disclaimer 7 3 More than 140 Years of Progress and Achievement 8 4 Continental Corporation – Sales, EBIT & Net Income 8 5 Conti Ranks No 3 in Worldwide Supplier Ranking 9 6 Executive Board 9 7 Megatrends in the Automotive Industry 10 8 A Leading Global Supplier for Key Automotive Electronics Applications 10 9 A Leading Global Supplier of Tire and Non-Tire Rubber Products 11 10 Sales by Region 11 11 EBITDA by Group and Corporation 12 12 Development of Consolidated Sales 12 13 Number of Employees 13
II. Continental Strategy Slide Title Page 15 Systematic Entrepreneurial Approach 14 16 Back to Value Creation 14 17 Cost Consciousness – Production in Best-Cost Countries 15 18 Continental Balanced Distribution of Sales 15 19 Best Positioned for the 5 Fastest Growing Automotive Industry Segments 16 20 Continental Corporation Worldwide 16 21 Sales OE/Non-OE 17 22 Technological Balance 17
© Continental AG Fact Book 2012 | 1 Contents
III. Continental Megatrends Slide Title Page 24 We Shape the Megatrends in the Automotive Industry 18 25 Environment: Initiatives in EU, USA and Japan – Towards Cleaner Mobility 19 26 Environment: Initiatives Towards Cleaner Mobility in Various Regions 19 27 Environment: Engine Development Roadmap 20
28 Environment: Reduction of CO2 Emissions: Solutions by Continental 20 29 Environment: Development of Worldwide Turbo Charger Volumes 21 30 Information: Interior: Examples of Regional Initiatives and Projects 21 31 Information: Interior: The Car Will Be Connected to Its Environment 22 32 Information: Interior: Product Highlights for Intelligent Mobility 22 33 Safety: Regional Initiatives – Towards Safer Mobility 23 34 Safety: Road Traffic Deaths 23 35 Safety: ADAC – Milestones of Active Safety 24 36 Safety: Future Automotive Trends (1) 24 37 Safety: Future Automotive Trends (2) 25 38 Safety: Future Automotive Trends Require System Competence 25 39 Safety: Winter Tire Regulation 26 40 Safety and Environment: Tire Labeling Initiatives in Europe, USA, Japan, 26 South Korea and Brazil 41 Tires: Key Initiatives 2001 – Vision 2025 27 42 Tire Sales and Growth Pillars – Supporting Elements of our Vision 2025 27 43 Additional Tire Production Capacity of 22 Million Units by 2015/16 28 44 Tires Vision 2025 – More Balanced Footprint 28 45 Environment: ContiTech: Engineering Green Value 29 46 Environment: ContiTech: Cumulative Market for ContiTech Products 29
© Continental AG Fact Book 2012 | 2 Contents
IV. Continental Corporation Slide Title Page 48 Consolidated Key Figures 30 49 Sales and Adjusted EBIT by Quarter 31 50 Key Historical Financials and Credit Metrics 31 51 Development of Net Indebtedness and Gearing Ratio 32 52 Gross Indebtedness by Sources 32 53 Maturities 33 54 Purchasing – Production Materials 2012 33 55 Development of Raw Material Prices 34
V. Market Data Slide Title Page 57 Increasing Installation Rates of Electronic Brake Systems 35 58 Installation Rates of Fuel Injection Systems 35 59 Increasing Installation Rates of Double Clutch Transmission 36 60 Increasing Installation Rates of Turbocharger in Gasoline Engines 36 61 Increasing Installation Rates of Embedded Telematics 37 62 Increasing Installation Rates of Keyless Entry Systems 37 63 Increasing Installation Rates of Multimedia Systems 38 64 Increasing Installation Rates of Advanced Driver Assistance Systems 38 65 Increasing Installation Rates of Head-up Displays 39 66 Production of Light Vehicles 2011 – 2014 39 67 Production of Heavy Vehicles 2011 – 2014 40 68 Replacement Passenger, Light Truck and 4x4 Tires 2011 – 2014 40 69 Replacement Truck Tires 2011 – 2014 41
VI. Automotive Group Slide Title Page 71 Key Figures 42 72 Sales and Adjusted EBIT by Division 42 73 Sales by Region 43 74 Order Intake (LTS) in the Automotive Group Totaled €25 bn in 2012 43
© Continental AG Fact Book 2012 | 3 Contents
VI.1. Automotive Group – Chassis & Safety Division Slide Title Page 76 Business Units and Key Products 44 77 Locations Worldwide 45 78 Key Figures 45 79 Sales by Region 46 80 Market Position for Electronic Brake Systems 2012 46 81 Market Position for Foundation Brake Systems 2012 47 82 Market Position for Actuation 2012 47 83 Market Position for Airbag Electronics 2012 48 84 Market Position for Advanced Driver Assistance Systems 2012 48 85 Growing Sales Volume for Electronic Brake Systems 49
VI.2. Automotive Group – Powertrain Division Slide Title Page 87 Business Units and Key Products 50 88 Locations Worldwide 50 89 Key Figures 51 90 Sales by Region 51 91 Market Position for Diesel Injection Systems 2012 52 92 Market Position for Gasoline Injection Systems 2012 52 93 Market Position for Transmission Control Units 2012 53
VI.3. Automotive Group – Interior Division Slide Title Page 95 Business Units and Key Products 54 96 Locations Worldwide 54 97 Key Figures 55 98 Sales by Region 55 99 Market Position for Body & Security 2012 56 100 Market Position for Instrumentation & Driver HMI 2012 56 101 Market Position for Infotainment & Connectivity 2012 57 102 Market Position for Commercial Vehicle 2012 57
© Continental AG Fact Book 2012 | 4 Contents
VII. Rubber Group Slide Title Page 104 Key Figures 58 105 Sales and Adjusted EBIT by Division 59 106 Sales by Region 59
VII.1. Rubber Group – Tires Division Slide Title Page 108 Business Units and Tire Brands 60 109 Key Figures 61 110 Sales by Region 61 111 Market Share for Passenger and Light Truck Tires 2012 62 112 Market Share for Truck Tires 2012 62 113 Worldwide Passenger and Light Truck Tire Production 2012 63 114 European Passenger and Light Truck Tire Production 2012 63 115 Worldwide Truck Tire Production 2012 64 116 Cost of Labor at Continental Manufacturing Sites 64 117 Passenger and Light Truck Tires: Product Mix Improvement 65 118 Passenger and Light Truck Tires: Unit Sales 2007 - 2012 65 119 Commercial Vehicle Tires: Unit Sales 2007 - 2012 66
VII.2. Rubber Group – ContiTech Division Slide Title Page 121 Business Units and Key Products 67 122 Locations Worldwide 67 123 Key Figures 68 124 Sales by Region 68 125 A Leading Global Supplier in its Business Units 69 126 Sales and Employees 2012 69
© Continental AG Fact Book 2012 | 5 Contents
VIII. Sustainability at Continental Slide Title Page 128 Our Policies and Guidelines 70 129 Corporate Environmental Key Performance Indicators 71 130 Equal Opportunity 71 131 Corporate Memberships (1) 72 132 Corporate Memberships (2) 72 133 Corporate Bodies 73
IX. Share & Bond Information Slide Title Page 135 Share Data / ADR Data 74 136 Share Price Development vs. Major Stock Indexes 74 137 Common Stock 75 138 Shareholder Structure 75 139 Bond Details 76 140 Development of the Bonds 76 141 Development of Continental’s Credit Rating 77 142 10 Year Financial Overview 77
X. Glossary Slide Title Page 144 Financial Glossary 78 145 Product Glossary 79 146 Contact Data 79 147 Financial Calender 80
© Continental AG Fact Book 2012 | 6 Disclaimer
This fact book has been prepared by Continental Aktiengesellschaft and includes information available to us as of March 19, 2013. 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 of its affiliates 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 or any other financial investment or exposure 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.
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Topics
A.I. Continental at a Glance
B.II. Continental Strategy
B.III. Continental Megatrends
C.IV. Continental Corporation
D.V. Market Data
VI. Automotive Group
VII. Rubber Group
VIII. Sustainability at Continental
IX. Share & Bond Information
X. Glossary
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© Continental AG Fact Book 2012 | 7 Continental at a Glance More than 140 Years of Progress and Achievement
Takeover of the European tire operations of Uniroyal, Continental acquires a majority interest in the tire operations of the Austrian company Semperit, the Slovak company Continental Matador the North American tire manufacturer General Tire. Rubber s.r.o. and expands its position for the Tire and ContiTech divisions in Central and Eastern Europe. Continental reinforces its activities by Continental strengthens its acquiring Temic, the international position in the tire business electronics specialist. in Asia by acquiring the Continental-Caoutchouc- und Continental expands its activities in Indian tire manufacturer Gutta-Percha Compagnie is telematics, among other fields, with Modi Tyres Company founded in Hanover, Germany. the acquisition of the automotive Limited. electronics business from Motorola.
1871 1979 2001 2006 1985 2007 2011 2012 1929 1987 1998 2003 2004
Merger with major companies of Continental strengthens its Continental acquires Siemens VDO the German rubber industry to position in the ASEAN region Automotive AG and advances to form Continental Gummi-Werke and Australia by establishing among the top five suppliers in the AG. its Continental Sime Tyre joint automotive industry worldwide, at the venture. same time boosting its market position in Europe, North America and Asia.
Acquisition of a US company’s Through the acquisition of Phoenix, Contintental founds a jointly managed Automotive Brake & Chassis unit, ContiTech becomes one of the world’s company together with SK Innovation to the core of which is Alfred Teves leading specialist for rubber and supply first-class lithium-ion battery GmbH in Frankfurt. plastics technology outside the tire technology as partners in the future. industry. It also acquires Parker Hannifin’s automotive air conditioning business.
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Continental at a Glance Continental Corporation – Sales, EBIT & Net Income1
32,736 (in € millions) US GAAP IFRS 30,505 30,000
26,047
25,000 24,239
20,096 20,000
16,619 14,887 15,000 13,837 3,073 12,597 2,597 11,534 Sales 11,233 11,408 1,935 10,115 1,507 1,602 1,676 10,000 9,132 1,157 855 1,884 6,743 607 533 694 EBIT 398 33 930 982 1,021 1,242 716 -296 576 314 5,000 138 235 205 226 -1,040 NIAT -258
-1,124 -1,649 0 2 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1) Net income attributable to the shareholders of the parent from 1998 until 2003, US GAAP / from 2004 onwards IFRS. 2) Siemens VDO incorporated starting December 1, 2007. 4
© Continental AG Fact Book 2012 | 8
Continental at a Glance Conti Ranks No 3 in Worldwide Supplier Ranking
Top 10 Global OEM Suppliers – 2012 Sales (in € millions) 40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
1 2 3 4 0 5 JCI Seiki Aisin Denso Bosch Robert Magna Mobis Michelin Hyundai Faurecia Continental Bridgestone 1) Robert Bosch only includes Automotive Technology division. 2) Continental excluding ContiTech Industrial business. 3) Bridgestone including Diversified Products. Source: Company filings. Calendarized to December year-end. 4) Aisin Seiki excluding Life & Energy related products. Based on average currency exchange rates 2012. 5) Johnson Controls only includes Automotive Experience Division. 5
Continental at a Glance Executive Board
Dr. Elmar Degenhart Chairman of the Executive Board Corporate Functions: Helmut Matschi Corporate Quality and Environment, Corporate Communications, Dr. Ralf Cramer Continental Business System, Automotive Central Functions Interior Chassis & Safety Division Division Heinz-Gerhard Wente Elke Strathmann Wolfgang Schäfer José A. Avila Corporate Functions: Corporate Functions: ContiTech Nikolai Setzer Division Human Resources, Finance, Controlling, Powertrain Director of Labor Relations, Compliance, Law, IT Division Tire Corporate Function: Corporate Social Responsibility Division Corporate Purchasing
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© Continental AG Fact Book 2012 | 9 Continental at a Glance Megatrends in the Automotive Industry
Environment – For clean power Information – For intelligent driving
GPS / Galileo CO2 targets in EU, USA & China (g/km)
218 180 180 167 144 142 130 Multimedia 128 125 117 95 105
2010 2015E 2020E Infotainment Infrastructure Other cars USA China EU Japan
Source: ICCT Int. Council of Clean Transportation, Global Passenger Vehicle FE/GHG regulations (6/2012).
Safety – For safe mobility Affordable Cars – For global mobility
Road traffic deaths A&B segment in BRIC (million units) 1 Number of road traffic deaths 91,815 17.6 European Region 332,532 12.2 191,896
147,941 123,577 334,405
Western Pacific Region
African Region Eastern Region of Mediterranean the Americas Region
South-East Asia Region 2012 2017E 1) Data based on framework created by the World Health Organization (WHO) for estimating road traffic mortality. Source: Global Status Report on road safety, WHO 2013. Source: IHS January 2013.
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Continental at a Glance A Leading Global Supplier for Key Automotive Electronics Applications
Chassis & Safety Powertrain Interior
Actuation Diesel injection systems Body and security products Advanced driver assistance Gasoline injection systems Commercial vehicle interiors systems Transmission control units Device connectivity and Airbag electronics Double clutch transmission telematics units Electronic brake systems (EBS) control units Instrumentation, displays and Foundation brake systems human machine interfaces
Sales 2012 €7,053 mn Sales 2012 €6,135 mn Sales 2012 €6,434 mn % of total 21% % of total 19% % of total 20% Adj. EBIT1 €686.8 mn Adj. EBIT1 €278.6 mn Adj. EBIT1 €579.3 mn Adj. EBIT margin 9.7% Adj. EBIT margin 4.5% Adj. EBIT margin 9.0%
Gasoline direct injection systems ESC2 installation rate by region (%) installation rate by region (%) OEM navigation3 (in $ billions) 20.8 89% 73% 11.6 51% 39% 36%
19% 21% 21%
2012 2017E 2012 2017E 2011 2020E China EU EU NAFTA
1) Before amortization of intangibles from PPA, consolidation and special effects. 2) ESC: Electronic Stability Control is a type of electronic brake system. 3) Source: Frost & Sullivan, 2013. 8
© Continental AG Fact Book 2012 | 10 Continental at a Glance A Leading Global Supplier of Tire and Non-Tire Rubber Products
Tires
Passenger & Light Truck Tires Commercial Vehicle Tires ContiTech
Regions Regions Automotive hoses and hose lines EMEA EMEA Automotive interior trim The Americas The Americas Conveyor belts APAC APAC Marine and oil hoses and hose lines Products Products Multiple V-ribbed belts Original equipment Original equipment and timing belts Winter tires Replacement Railway air springs High performance tires Truck and bus air springs
Sales 2012 €9,665 mn Sales 2012 €3,712 mn % of total 29% % of total 11% Adj. EBIT1 €1,620.0 mn Adj. EBIT1 €444.1 mn Adj. EBIT margin 17.0% Adj. EBIT margin 12.1%
Sales breakdown (%) Sales breakdown (%)
Non- OE Non- 47% OE OE 71% 29% OE 53% 1) Before amortization of intangibles from PPA, consolidation and special effects. 9
Continental at a Glance Sales by Region
Automotive Group 2012 Rubber Group 2012 Corporation 2012 €19,505 mn €13,262 mn €32,736 mn
Europe Europe Europe (excluding (excluding Germany) (excluding Germany) Germany) 24% 40% 30% Germany Germany Germany 26% 25% 22% NAFTA 23% NAFTA 22% NAFTA Asia 20% Other Asia Other Asia Other 10% countries 24% countries 18% 3% countries 8% 5%
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© Continental AG Fact Book 2012 | 11 Continental at a Glance EBITDA by Group and Corporation
Automotive Group 2012 Rubber Group 2012 Corporation 2012 €2,405 mn €2,522 mn €4,855 mn
ContiTech Chassis & ContiTech CVT 11% Safety Interior Chassis & 22% 6% 20% Interior34% Chassis & 35% Safety 40%44% Powertrain CVT 12% 12% PLT PLT 66% 34% Interior PowertrainPowertrain 17% 25%22% Tires Tires 78% 40%
PLT = Passenger & Light Truck Tires. CVT = Commercial Vehicle Tires.
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Continental at a Glance Development of Consolidated Sales
by Region 32.7 by Division 32.7 5% 30.5 (€ billion) 30.5 (€ billion) 11% 5% 12% 18% 26.0 26.0 17% 6% 24.2 5% 24.2 12% 29% 4% 16% 12% 5% 10% 22% 22% 20.1 19% 6% 20.1 5% 12% 22% 19% 19% 14% 21% 5% 21% 21% 18% 23% 33% 30% 22% 36% 21% 33% 22% 34% 19% 19% 16% 18% 17%
31% 27% 26% 25% 29% 24% 21% 20% 20% 21%
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Interior Powertrain 1 Chassis & Safety Passenger and Light Truck Tires Germany Rest of Europe NAFTA Asia Other countries 1 1 Commercial Vehicle Tires Tires
1) Since 2012 reported as Tires. ContiTech 12
© Continental AG Fact Book 2012 | 12 Continental at a Glance Number of Employees
169,639 169,639 by Region 163,788 by Division 163,788 6% 6% 148,228 148,228 17% 17% 139,155 134,434 7% 18% 139,155 134,434 18% 5% 17% 6% 6% 16% 16% 13% 16% 25% 14% 5% 15% 16% 6% 6% 19% 14% 16% 19% 14% 19% 20%
20% 20% 31% 31% 33% 32% 19% 21% 33% 20%
19% 18% 18% 18% 18%
33% 33% 31% 30% 29% 20% 22% 20% 20% 19%
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Interior Powertrain 1 Chassis & Safety Passenger and Light Truck Tires Germany Rest of Europe NAFTA Asia Other countries 1 1 Commercial Vehicle Tires Tires
1) Since 2012 reported as Tires. ContiTech 13
Topics
A.I. Continental at a Glance
B.II. Continental Strategy
B.III. Continental Megatrends
C.IV. Continental Corporation
D.V. Market Data
VI. Automotive Group
VII. Rubber Group
VIII. Sustainability at Continental
IX. Share & Bond Information
X. Glossary
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© Continental AG Fact Book 2012 | 13 Continental Strategy Systematic Entrepreneurial Approach
Environment – For clean power Information – For intelligent driving
Great people Value in an inspiring creation culture
Technological Regional balance sales balance
Balanced customer Top market position portfolio In the market for the market
Safety – For safe mobility Affordable Cars – For global mobility
15
Continental Strategy Back to Value Creation
17.9% 18.1% 16.8% 17.6% 15.7% 16.2% 14.1% 12.4% 13.2% 8.9% 15,353
0.6% 15,508 15,580 15,659 15,655 15,790 16,019 16,272 16,627 16,934 16,954 15,405
-2.5%
Trailing OA (in € millions) Trailing ROCE (in %)
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2010 2011 2012
Note: Trailing ROCE and operating assets are calculated as reported EBIT/operating assets for the last twelve months (LTM) divided by average operating assets (OA) for the LTM.
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© Continental AG Fact Book 2012 | 14 Continental Strategy Cost Consciousness – Production in Best-Cost Countries1
Europe 69% 70% 70%
39% 36% 36% 37% 34% 33% 34% 29% 31% 22% 24% 19%
Chassis & Safety2 Powertrain2 Interior2 Tires3 ContiTech2
Rest of world
96% 96% 92%
71% 66% 69% 60% 61% 63% 62% 64% 60% 51% 54% 46%
Chassis & Safety2 Powertrain2 Interior2 Tires3 ContiTech2
2010 2011 2012 1) All years restated based on new definition of best-cost countries. 2) Based on sales. 3) Based on units. 17
Continental Strategy Continental Balanced Distribution of Sales
% of total Corporation sales
Asia 10% Asia 18% North and Asia South ≥ 30% America Rest of world 19% ~ 45% Rest of world North and 56% South Rest of world America North and 71% 26% South America ≥ 25%
2008 2012 mid- to long-term
North and Asia Rest of world South America
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© Continental AG Fact Book 2012 | 15
Continental Strategy Best Positioned for the 5 Fastest Growing Automotive Industry Segments
CAGR Product portfolio of
Expected worldwide revenue development in % 1
Gasoline particulate filters 100% Powertrain (CAGR 2011-2020) Selective catalytic reduction 69% Powertrain/ContiTech2
CAGR Battery propulsion systems 67% Powertrain Switchable coolant and oil pumps 50% Powertrain TPMS 32% Interior Lane departure warning 31% Chassis & Safety A Electric motors 30% Powertrain High growth Start stop systems 28% Powertrain CAGR 30% - 100% Advanced parking assistance 28% Chassis & Safety Forward collision avoidance 28% Chassis & Safety Turbocharger (% of gasoline) 27% Powertrain B Blind spot detection 24% Chassis & Safety Medium growth Advanced voice recognition 16% Interior CAGR 16% - 30% Touch screens 16% Interior Adaptive cruise control (ACC) 15% Chassis & Safety Electric power steering 14% Chassis & Safety C App interface solutions 13% Interior Low growth OEM navigation 9% Interior CAGR 5% - 16% Electronic stability program 8% Chassis & Safety Smartphone navigation 7% Source: Frost & Sullivan, 2013, based on 2011 data. 1) Emitec. 2) No complete system but electronics or components. 19
Continental Strategy Continental Corporation Worldwide
More than 291 sites for production, R&D and sales in 46 countries. Headquarters in Hanover, Germany.
Europe Austria Greece Portugal Czech Republic Russia Belgium Ireland Spain Hungary Serbia Denmark Italy Sweden Kazakhstan Slovakia Finland Netherlands Switzerland Poland Turkey France Norway United Kingdom Romania Germany*
North America Asia Canada China Mexico India USA Indonesia Japan Malaysia Philippines Singapore South America South Korea Argentina Sri Lanka Brazil Taiwan Chile Thailand Ecuador Africa Republic of South Africa Australia Tunisia
Status: January 2013. 20
© Continental AG Fact Book 2012 | 16 Continental Strategy Sales OE/Non-OE
OE Non-OE 28% of sales outside OE in 2012
ContiTech 53 47 (11% of total sales)
Chassis & Safety 21% Tires 29 71 (29% of total sales)
Powertrain 19% Interior Non-OE 89 11 (20% of total sales) 28%
Powertrain 100 (19% of total sales) Interior ContiTech 17% 6% Tires 9% Chassis & Safety 100 (21% of total sales)
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Continental Strategy Technological Balance
Introduction Growth Maturity Saturation/ Decline Strategy Strategy Establish Standards & Leverage Defend Market Leading Position & R&D Cost Market Share Migrate to All Car Segments Cost control Extend Customer Portfolio Economies of scale Reach Market Leading Position Standardization and/or scalability
System integration
CAGR>=5-10% 0% 22 © Continental AG Fact Book 2012 | 17 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 23 Continental Megatrends We Shape the Megatrends in the Automotive Industry Environment – For clean power Information – For intelligent driving Safety – For safe mobility Affordable Cars – For global mobility 24 © Continental AG Fact Book 2012 | 18 Continental Megatrend: Environment Initiatives in EU, USA and Japan – Towards Cleaner Mobility EU1 USA2,3 Japan4 6 7 10 EU aims to reduce CO2 emissions by NHTSA and EPA to establish a National ECCJ aims to improve fuel efficiency improvement in vehicle technology: Fuel Efficiency Policy (NFEP): standards by 23.5% by 2015 vs. 2004: For passenger cars, EU targets average For passenger cars and light trucks For passenger cars and light duty trucks 8 CO2 emissions at: combined, CAFE set to increase to: (<3.5 tonnes), the aim is to increase • 130 g/km* from 20155 • 35.5 mpg* by 20169 average level of fuel efficiency to: • 95 g/km from 2020 • 54.5 mpg by 20259 • 16.8 km/l* by 201511 For passenger cars, excess emissions surcharges will be implemented in steps from 2012 onwards (100% penalty only starting in 2015 for not meeting targets) For light commercial vehicles, EU targets average CO2 emissions at: • 175 g/km from 2017 • 147g/km from 2020 Test cycle: NEDC (New European Driving Cycle) Test cycle: CAFE (Corporate Average Fuel Economy) Test cycle: JC08 (Japanese Cycle) * Gram per kilometer * Miles per gallon * Kilometers per liter Emerging markets likely to follow Europe/USA/Japan on fuel efficiency standards 1) Regulations (EC) No. 443/2009 and (EU) No. 510/2011. 2) Refers to the joint proposal of NHTSA and EPA, May 2009, and President Obama’s NFPE; The White House, May 19, 2009. 3) Refers to the joint proposal of NHTSA and EPA, November 2011. 4) Refers to “Act on the Rational Use of Energy” of the Ministry of Economics, Trade and Industry (METI) and Ministry of Land, Infrastructure, Transport and Tourism (MLIT). 5) Corresponds to the EU6 Emission Standard. 6) NHTSA: National Highway Traffic Safety Administration . 7) EPA: Environmental Protection Agency. 8) CAFE: Corporate Average Fuel Economy. 9) 35.5 mpg CAFE = 250g/mile CAFE = 171 g/km NEDC ; 54.5 mpg CAFE =162g/mile CAFE = 110 g/km NEDC. 10) ECCJ: Energy Conservation Center Japan. 11) 16.8 km/l JC08 = 140 g/km JC08= 125 g/km NEDC. 25 Continental Megatrend: Environment Initiatives Towards Cleaner Mobility in Various Regions 1 Gram CO2 per kilometer, normalized to NEDC Solid dots and lines: historical performance and enacted targets. 270 Solid dots and dashed lines: proposed targets and studies. 250 230 210 190 170 150 130 110 90 2000 2005 2010 2015 2020 2025 2 3 US LDV US-Car EU Japan China S. Korea Source: International Council on Clean Transportation. 1) New European Driving Cycle. 2) US and Canada light-duty vehicles include light commercial vehicles. 3) China's target reflects gasoline fleet scenario. If other fuel types are included, the target is lower. 26 © Continental AG Fact Book 2012 | 19 Continental Megatrend: Environment Engine Development Roadmap Light vehicle production by drive type (thousand units) 120,000 %1 100,000 10 80,000 7%1 28%1 42%1 60,000 40,000 70%1 51%1 38%1 20,000 21%1 21%1 20%1 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Diesel Gasoline Port Fuel Gasoline Direct Injection Hybrid EV Electric Vehicle (EV) Source: IHS and Continental estimates as of May 2013. 1) Percentage of worldwide light vehicle production volume. 27 Continental Megatrend: Environment 1 Reduction of CO2 Emissions : Solutions by Continental Hybrid electric vehicle ~25% Compressed Natural Gas (CNG) 15-20% Piezo common rail injection 10-20% Telematics, ACC, ADAS 5-12% 2 3 SCR systems/DDS 5% Energy management (AES 4 ) 5% Tires (rolling resistance, TPMS) 2-5% Double clutch transmission 3% 5 Transmission (POD ) 3% Energy management (POD 5 ) 1-2% Brake systems 1-2% Min Max 1) Saving potential compared with gasoline direction injection Euro 5. 2) Selective Catalytic Reduction. 3) DEKA injector for diesel dosing into exhaust gas. 4) Advanced Energy Supply. 5) Power-On-Demand. 28 © Continental AG Fact Book 2012 | 20 Continental Megatrend: Environment Development of Worldwide Turbo Charger Volumes Diesel turbo charger (thousand units) Gasoline turbo charger (thousand units) Diesel cars Turbo installation rate Gasoline cars Turbo installation rate 80,000 CAGR Engines = 3.3% CAGR Turbo = 3.6% CAGR Engines = 3.5% CAGR Turbo = 17.9% 60,000 40,000 99% 31% 97% 98% 20,000 21% 9% 0 2010 2015 2020 2010 2015 2020 Gasoline turbo charger by cubic capacity (thousand units) Up to 1.5 liter 1.6 - 2.5 liter 2.6 - 3.5 liter More than 3.6 liter 40,000 CAGR Engines = 5.3% CAGR Engines = 2.7% CAGR Engines = 0.3% CAGR Engines = -3.3% CAGR Turbo = 19.5% CAGR Turbo = 15.2% CAGR Turbo = 15.7% CAGR Turbo = 6.1% 30,000 20,000 24% 33% 10,000 21% 21% 24% 5% 6% 9% 10% 9% 39% 13% 0 2010 2015 2020 2010 2015 2020 2010 2015 2020 2010 2015 2020 Gasoline cars Turbo installation rate Source: IHS and Continental estimates as of May 2011. 29 Continental Megatrend: Information Interior: Examples of Regional Initiatives and Projects Environment Safety Information Regional initiatives on Regional initiatives on Regional initiatives on 5,7,15,16 Test field 11 Tire pressure monitoring E-call “HeERO” Digital tachograph (DTCO) system (TPMS)1,2,3,4,13,14 Hands-free telephony8 Electronic onboard recorder Electric vehicle ELVIRE (EOBR)12 9 market push5,6 ID4EV Stolen vehicle tracking Rear detection system10 Intelligent transport 5,6 systems (ITS) ERTICO Sim-TD Doing more. Doing more. Doing more. For clean power. For safe mobility. For intelligent driving. 1) Regulation (EC) No. 661/2009 for Passenger Vehicles. 9) CONTRAN 245/2007 - no final rule in place. 2) Federal Motor Vehicle Safety Standard No. 138 of NHTSA for passenger vehicles. 10) For single-unit trucks. FMVSS 111 - no final rule in place. 3) Source: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in Japan. 11) Proposed revision of Regulation (EEC) No. 3821/85. 4) Korean Motor Vehicle Safety Standard (KMVSS) - MLTM Notification 2010-631. 12) FMCSA Proposed rule 395 January 2011 / President signed legislation MAP21 in July 2012. 5) Directive 2010/40/EU of the European Parliament and of the Council of July 2010. 13) House Bill for Commercial Vehicle Safety - H.R. 4348 29.06.2012 TPMS for Motorcoaches. 6) COM(2011) 144 final. 14) DG CLIMA 2013 study on TPMS Cost / Benefit for Commercial Vehicles. 7) Recommendation adopted by the European Commission September 2011. 15) Russia ERA specifications - no final rule in place. 8) Several national laws and regulations in Asia/ Europe/ NAFTA/ Africa. 16) European Commission Brussels, C(2012) 8509 final. European Projects: ELVIRE = Electric vehicle communication to infrastructure, road services and energy supply. ERTICO = European road transport telematics implementation coordination organisation. ID4EV = Intelligent dynamics for fully electric vehicles. Sim-TD = Safe and intelligent mobility – field test Germany. HeERO = Harmonized eCall European pilot. 30 © Continental AG Fact Book 2012 | 21 Continental Megatrend: Information Interior: The Car Will Be Connected to Its Environment GPS / Galileo Other cars Multimedia devices Infrastructure Infotainment 31 Continental Megatrend: Information Interior: Product Highlights for Intelligent Mobility Existing Solutions Innovations Freely Tire information Intelligent fleet Gesture control ITS Services programmable systems management cluster Multimedia Head-up Low-cost Digital key Intelligent antenna platforms displays telematics module 32 © Continental AG Fact Book 2012 | 22 Continental Megatrend: Safety Regional Initiatives – Towards Safer Mobility EU USA Japan Electronic stability control (ESC) Electronic stability control (ESC) Electronic stability control (ESC) • mandatory as of November 2011 for all new types of • mandatory since 2011 for all new light • mandatory as of October 2012 for all new vehicles vehicles5 types of passenger cars 1 • mandatory as of November 2014 for all new vehicles Tire pressure monitoring system (TPMS) • mandatory as of October 2014 for all new 9 Tire pressure monitoring system (TPMS) • mandatory as of September 2007 for all passenger cars • mandatory as of November 2012 for all new types of new light vehicles6 Advanced emergency braking system passenger cars and lane departure warning • mandatory as of November 2014 for all new passenger Brazil • expected to be mandatory for all new cars2 heavy commercial vehicles and buses Advanced emergency braking system Anti-lock brake system (ABS) following the EU decision10 and lane departure warning • mandatory as of January 2014 for all new • mandatory as of November 2013 for all new types of passenger cars, after phase-in which 7 heavy commercial vehicles and buses began in 2010 • mandatory as of November 2015 for all new heavy commercial vehicles and buses2 Russia South Korea Brake assist system Electronic stability control (ESC) Electronic stability control (ESC) • mandatory as of November 2009 for all new types of • mandatory as of January 2014 for all new • mandatory as of January 2012 for all new passenger cars types of light vehicles light vehicles11 • mandatory as of November 2011 for all new passenger 3 • mandatory as of January 2016 for all new Tire pressure monitoring system (TPMS) cars 8 light vehicles mandatory as of January 2013 for all new Motorcycle anti-lock brake system (ABS) • Tire pressure monitoring system (TPMS) passenger cars11 • mandatory as of January 2016 for all new types of • mandatory as of January 2016 for all new vehicles types of light vehicles8 • mandatory as of January 2017 for all new vehicles4 Other emerging markets likely to follow EU/USA on ESC regulation 1) Regulation (EC) No. 661/2009; refers to all vehicles of category M and N. 2) Commission Implementation Regulations for (EC) No. 661/2009: 347/2012 (Advanced Emergency Braking Systems ); 351/2012 (Lane Departure Warning). 3) Regulation (EC) No. 78/2009; refers to passenger cars for maximum 8 passengers plus driver. 4) COM(2010) 542 from October 2010. ABS mandatory for motorcycles with engine capacity of >125 ccm. ABS or combined brake system (CBS) mandatory for engine capacity of ≤125 ccm. 5) Federal Motor Vehicle Safety Standard (FMVSS) No. 126 of the National Highway Traffic Safety Administration (NHTSA); refers to vehicles with a gross vehicle weight of ≤4.536 t. 6) Federal Motor Vehicle Safety Standard (FMVSS) No. 138 of the National Highway Traffic Safety Administration (NHTSA); refers to vehicles with a gross vehicle weight of ≤4.536 t. 7) CONTRAN 312/2009. 8) Russia Decree 720/2009; refers to passenger cars, buses with a weight of ≤5 t and light trucks with a weight of ≤3.5 t. 9) Source: Ministry of Land, Infrastructure, Transport and Tourism (MLIT) in Japan. 10) Japan expected to adopt EU regulation. Final decision on timing pending. 11) G/TBT/N/KOR/286 and MLTM Notification 2010-631 (Ministry of Land, Transport and Maritime Affairs). 33 Continental Megatrend: Safety Road Traffic Deaths Number of road traffic deaths1 91,815 European Region 332,532 191,896 147,941 123,577 334,405 Western Pacific Region African Region Eastern Region of Mediterranean the Americas Region South-East Asia Region Source: Global Status Report on road safety, World Health Organization (WHO) 2013. 1) Data based on framework created by the World Health Organization (WHO) for estimating road traffic mortality. 34 © Continental AG Fact Book 2012 | 23 Continental Megatrend: Safety ADAC – Milestones of Active Safety Milestones of Active Safety Secondary Collision Mitigation Emergency Brake Assist System Lane Departure Warning Tire Pressure Monitoring Car2X ESC Communication Traction Control Emergency Steering Assist System Cross-Way Assist System ABS Tiredness Warning System Night Vision Assist System Development of Active SafetyActive of Development Brake Assist System Lane Change Assist System 1960 1970 1980 1990 2000 2010 ……. Source: ADAC May 2011. 35 Continental Megatrend Future Automotive Trends (1) Near Future Far Future Present (2016-2025) >2025 Electronic stability control Automated parking assist Tire information systems Automated valet parking Adaptive cruise control assist Electronic parking brake Automated traffic jam assist Automated cruise assist Parking sensors Fully Environmental sensors Rear end collision avoidance brake (Zero automated Emergency brake assist collision assist) 1 Head up display Bottle-neck (Construction driving Stereo camera system site) assist E-call system Tight spot assist … Drive energy optimizer … … Future in Automotive: “Networking of Advanced Driver Assistance Systems (ADAS)” 1) Definition: Monitoring of the system not required; Driver does not need to be able to take over the driving task; Example: Highway driving up to 130 km/h. 36 © Continental AG Fact Book 2012 | 24 Continental Megatrend Future Automotive Trends (2) 37 Continental Megatrend Future Automotive Trends Require System Competence System Supplier Target Best in Class Systems supplier for automated driving, capable of developing Continental and supplying scalable solutions Fast First to Follower market Strong know-how in developing and industrializing ADAS1 and HMI2 Majority Non Therefore supplier of of automotive choice to first launch competitor competition automated driving systems Component Supplier 1) Advanced Driver Assistance Systems. 2) Human Machine Interface. 38 © Continental AG Fact Book 2012 | 25 Continental Megatrend: Safety Winter Tire Regulation1 Europe: Winter tires mandatory or situationally mandatory November 1 to April 15 when Mandatory when winter December 1 to end of February winter weather conditions prevail weather conditions prevail Austria Latvia Russia November 15 to April 15 when winter weather conditions prevail November 1 to April 1 November 1 to April 1 Bosnia and Herzegovina Lithuania Serbia Mandatory when winter November 15 to March 31 when November 1 to March 31 weather conditions prevail roads are snowy/icy Czech Republic Luxembourg Slovakia November 15 to March 15 when November 15 to March 15 when December 1 to end of February Estonia Macedonia winter weather conditions prevail Slovenia winter weather conditions prevail Mandatory when winter December 1 to March 31 when December 1 to end of February weather conditions prevail Finland Norway Sweden winter weather conditions prevail Mandatory when winter weather December 1 to April 1 for November 1 to March 31 Germany conditions prevail Romania Turkey commercially used vehicles Europe: Winter tires partly mandatory Drivers may be held liable if they cause an accident with Mandatory on certain roads – marked with signs summer tires mounted when winter weather conditions prevail France Italy Switzerland Canada: Winter tires partly mandatory Mandatory in Québec December 15 to March 15; Canada mandatory on certain roads in the mountains of Canada when winter weather conditions prevail The snowflake symbol: This symbol can be displayed on a tire if it tests better than a reference standard tire with M+S² marking when ABS-braking on snow. 1) Source: Continental AG and websites of country ministries, automobile associations and ETRMA (European Tyre and Rubber Manufacturers' Association). 2) Mud + snow. The M+S marking is given by the manufacturer and is not linked to a performance definition. 39 Continental Megatrends: Safety and Environment Tire Labeling Initiatives in Europe, USA, Japan, South Korea and Brazil1 EU2 USA3 Japan4 South Korea5 Brazil6 Label proposed by NHTSA3 Mandatory as of November 2012 Mandatory as of Final decision pending Voluntary since 2010 Introduced by MKE5 November 2012 The NHTSA Tire Fuel 4 Introduced by JATMA Applies to all tires sold in Applies to all tires sold. Efficiency Consumer South Korea (OE and Mandatory as of Information to be shown: Information Program Applies to replacement replacement) for April 2015 rolling resistance proposes to inform summer tires for passenger cars and light (fuel efficiency), consumers about the passenger cars; trucks; includes Introduced by INMETRO6 wet grip effect of tires on fuel includes information on (braking performance on information on rolling efficiency, safety, rolling resistance and Applies to all tires sold wet roads) and resistance and wet grip and durability wet grip performance (with certain exceptions). noise performance performance Includes information on The program aims to Tires with a grading of A (external rolling noise). The label has to be rolling resistance, wet Either directly on the tire implement a national and above for rolling attached to the tread of grip and noise by means of a label or in tire fuel efficiency resistance performance each tire; for OE tires the performance rating system for are defined as “fuel some other way information has to be replacement tires, with efficient tires” and are provided in the car Certification to be carried Self-certification policy the information marked with an manual out by a product provided to consumers additional symbol (the EU member states are certification body at the point of sale and lower of the symbols responsible for market Registration of all accredited by INMETRO online above) surveillance products required 1) Similar initiatives in Australia, China, Gulf countries, Israel, South Africa. 3) Source: National Highway Traffic Safety Administration (NHTSA). 2) Regulation (EC) No.1222/2009 of the European Parliament and of the Council 4) Source: Japan Automobile Tyre Manufacturers Association (JATMA). and Commission Regulations (EU) No. 228/2011 and (EU) No. 1235/2011. 5) Source: South Korean Ministry of Knowledge Economy (MKE). Also implemented in Norway, Switzerland and Turkey. 6) Source: National Institute of Metrology, Quality and Technology (INMETRO). 40 © Continental AG Fact Book 2012 | 26 Continental Tires: Key Initiatives 2001 – Vision 2025 Stage 1: 2001 – 2010 Stage 2: 2011 – 2015 Stage 3: 2016 – 2025 Create Value Sustain Value Enhance Value Global footprint and business Accelerate global growth Balanced global footprint optimized (focus on BRIC countries) Benefit from excellent cost Strong cost focus Leverage cost position position Global presence of CVT sustained Improve technology position to Achieve podium position (SAM/APAC) establish among “Best In Class” in technology worldwide Turnaround of PLT business in NAFTA succeeded Worldwide technology gap to competition closed Continuous value creation is our driving force! 41 Continental Tires Sales and Growth Pillars – Supporting Elements of our Vision 2025 Passenger & Light Truck Tires Truck Tires Specialty Tires Ramp up greenfields Accelerate growth on Commercial Segment Continuously invest in R&D and extended lifecycle solutions Selective growth in commercial technology Expand retail position specialty tires Expand retail position Provide a strong manufacturing Support end customer focus Manage brand awareness footprint in BRIC with strong service providers via communication roadmap Consumer Segment (2 Wheel) Capacity increase (i.e. existing plants, greenfields, M&A) Expansion of worldwide presence by eliminating white spots Establish new channel of direct sales to retail level 42 © Continental AG Fact Book 2012 | 27 Continental Additional Tire Production Capacity of 22 Million Units by 2015/16 (million units) +41 +4 Kaluga2 (RU) Mount Vernon (US) +41 +4 Hefei2 2 Sumter (CN) (US) +1.3 +0.4 +4 Modipuram +0.3 (IN) Camaçari (BR) Passenger tires Truck tires 1) Will be reached by 2016. 2) Greenfield. 43 Continental Tires Vision 2025 – More Balanced Footprint Passenger & Light Truck Tires1 Truck Tires1 Specialty – Commercial2 2025 2025 2025 7% 21% 72% 21% 2 5% 46% 50% Specialty – Consumer 4% 74% 2025 16% 3% 81% Note: Inner circle as of 2012. The Americas APAC EMEA Outer circle vision 2025. 1) Based on unit sales. 2) Based on net sales. 44 © Continental AG Fact Book 2012 | 28 Continental Megatrend: Environment ContiTech: Engineering Green Value Engineering Green Value: Maxim for our strategic orientation Technological expertise for customer-specific solutions made from rubber and plastic Sustainable management with long-sighted economic, ecological and social solutions Creating added value for our customers, human beings and the environment Perfect mount for Modules for efficient Secure wave Carbon-neutral Eco-friendly Water- wind power solar energy power printing blankets drive belts1 management Climate-friendly Lightweight Emissions- Health-friendly Flexible insulation Components for conveyor belts engineering1 reducing hoses1 interiors for energy saving engine downsizing1 1) Technologies supplied to the automotive industry. 45 Continental Megatrend: Environment ContiTech: Cumulative Market for ContiTech Products ∑~€30 bn ∑~€25 bn 2012 2017 Fluid Technology Vibration Control Conveyor Belt Group Power Transmission Group Air Spring Systems Compounding Elastomer Coatings Benecke-Kaliko Group Source: Continental estimates. 46 © Continental AG Fact Book 2012 | 29 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 47 Continental Corporation Consolidated Key Figures (in € millions) 2010 2011 2012 Sales 26,046.9 30,504.9 32,736.2 EBITDA 3,587.6 4,228.0 4,854.6 EBIT 1,935.2 2,596.9 3,073.4 EBIT adjusted1 3,040.9 3,522.4 in % of sales1 10.0 10.8 Net interest expense -697.2 -735.5 -406.8 Income tax expense -592.1 -536.2 -698.7 Non-controlling interests -69.9 -83.0 -84.4 NIAT2 576.0 1,242.2 1,883.5 Earnings per share (in €) 2.88 6.21 9.42 R, D & E expense 1,450.4 1,608.7 1,766.2 in % of sales 5.6 5.3 5.4 Capex3 1,296.4 1,711.3 2,019.4 in % of sales 5.0 5.6 6.2 Depreciation & amortization4 1,652.4 1,631.1 1,781.2 in % of sales 6.3 5.3 5.4 thereof impairment5 57.7 20.4 49.9 Free Cash Flow 566.9 490.5 1,652.5 ROCE (average) in % 12.4 16.2 18.1 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Net income attributable to the shareholders of the parent. 3) Capex including software. 4) Excluding write-downs of investments. 5) 2012: Including goodwill impairment of €75.6 mn. 48 © Continental AG Fact Book 2012 | 30 Continental Corporation Sales and Adjusted EBIT1 by Quarter Sales €26,047 mn Sales €30,505 mn Sales €32,736 mn Adj. EBIT1 €3,041 mn Adj. EBIT1 €3,522 mn 8,320 8,187 8,134 8,096 7,714 7,912 7,346 7,533 6,903 6,658 6,490 948 5,997 875 861 813 839 734 751 744 Q1/10 Q2/10 Q3/10 Q4/10 Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Sales (in € millions) Adj. EBIT 1 (in € millions) 1) Before amortization of intangibles from PPA, consolidation and special effects. 49 Continental Corporation Key Historical Financials and Credit Metrics (in € millions)1 2008 2009 2010 2011 2012 Statement of cash flows Adjusted EBITDA2 3,001 2,354 3,662 4,247 4,822 Reported EBITDA 2,771 1,591 3,588 4,228 4,855 Net cash interest paid -519 -727 -703 -662 -575 Tax paid -282 -205 -493 -466 -684 Change in net working capital3 275 595 -497 -556 564 Other4 -360 1,173 -46 -256 -376 Cash flow arising from operating activities 1,885 2,427 1,849 2,289 3,785 Cash flow arising from investing activities -1,256 -787 -1,282 -1,798 -2,132 - thereof capex for PPE and intangibles -1,621 -911 -1,324 -1,813 -2,081 Cash flow before financing activities 629 1,640 567 491 1,653 Statement of financial position Cash and cash equivalents 1,569 1,713 1,471 1,541 2,397 Derivative instruments and interest-bearing investments 64 104 202 249 536 Total indebtedness 12,117 10,713 8,991 8,562 8,253 Net Indebtedness 10,484 8,896 7,317 6,772 5,320 Credit Ratios Net indebtedness / adj. EBITDA2 3.5x 3.8x 2.0x 1.6x 1.1x Net cash interest paid coverage (ratio)5 5.8x 3.2x 5.2x 6.4x 8.4x 1) Amounts shown may contain rounding differences. 2) Adjusted EBITDA from 2009 on as defined in syndicated loan. 3) Includes changes in inventories, trade receivables, trade payables and discounted notes. 4) Includes dividends received, at-equity share in earnings of ass. and accrued dividend income from other investments incl. impairment, gains and losses from disposals, other non-cash items as well as changes in pension and post-employment provisions (including effects from transactions regarding contractual trust arrangements [CTA] in 2009) and in other assets and liabilities. 5) Adj. EBITDA to net cash interest paid. 50 © Continental AG Fact Book 2012 | 31 Continental Corporation Development of Net Indebtedness and Gearing Ratio Net indebtedness (in € millions) 226% 219% 210% Gearing ratio (in %) 186% 145% 133% 138% 118% 117% 104% 103% 11,042 90% 85% 83% 77% 9,747 9,465 58% 8,896 8,232 8,092 8,017 7,605 7,317 7,297 7,114 6,876 6,841 6,802 6,772 5,320 Q1 H1 9M YE Q1 H1 9M YE Q1 H1 9M YE Q1 H1 9M YE 2009 2010 2011 2012 51 Continental Corporation Gross Indebtedness by Sources Syndicated loan Other Bonds indebtedness; Various other 617 bank lines; Various other bank lines 900 Syndicated Other indebtedness loan (Tranche D, Other 1 Revolver) Syndicated indebtedness; Term loan loan Aug 2012; 1,502 Feb 2013; 696 (Tranche B) 2,137 Aug 2010; Various other bank lines; 548 3,500 2 Revolving Bond Sept 2019 Credit Facility 1 (4.5%); 720 Feb 2013; 346 Syndicated loan (Tranche C) Bond Aug 2012; Bond Jul 2015 5,000 Oct 2018 (8.5%); 750 (7.125%); 625 Bond Bond Sept 2017 Jan 2016 (7.5%); 1,000 (6.5%); 625 FY 2009 (in mn €) FY 2012 (in mn €) Syndicated loan Syndicated loan = 86% of gross indebtedness = 30% of gross indebtedness (€10,713 mn) (€8,253 mn) 1) Term loan and revolving facility repayment in Feb. 2013 due to new syndicated loan agreement. 2) Nominal amount $950 mn (exchange rate at Dec. 31, 2012: 1.3191). Note: Bond values and the values for the syndicated loan are nominal values, all others book values. 52 © Continental AG Fact Book 2012 | 32 Continental Corporation Maturities Pro forma Maturity scheme Dec. 31, 2012 (in € millions) before renegotiation (in € millions) FY 11 FY 12 of syndicated loan Gross indebtedness 8,562 8,253 Cash 1,541 2,397 ∑2,227 ∑1,935 ∑1,203 Net indebtedness 6,772 5,320 ∑820 RCF2 346 Term ∑670 Available credit lines 2,190 2,801 Loan1,3 2,137 203 SoR 778 70 45 Total liquidity 3,731 5,199 CP 460 3 1,0003 3 3,4 Others 352 90 750 625 3 625 720 2013 2014 2015 2016 2017 2018 2019 Pro forma maturity scheme after renegotiation of syndicated loan (in € millions) ∑2,170 ∑1,589 ∑1,203 ∑1,608 ∑820 3 1,500 203 3 SoR 778 70 983 CP 3 45 3 460 90 3 1,000 3 3,4 Others 352 750 625 625 720 2013 2014 2015 2016 2017 2018 2019 1) Amount drawn under term loan at year end 2012: €2,137 mn with original maturity in April 2014. According to new syndicated loan agreement it has been reduced to €1,500 mn and matures in 2016. 2) Amount drawn under the revolving credit facility (RCF) at Dec. 31, 2012. Original volume of RCF has been increased from €2,500 mn to a total volume of €3,000 mn according to new syndicated loan agreement and matures in 2018. Revolving credit facility (RCF) has to be shown as short term debt according to IFRS; RCF matures in 2018 at drawn amount. 3) Note that maturities later than 2017 are bond maturities only; all bond and syndicated loan amounts shown are nominal values; maturities do not add up to gross indebtedness amounting to €8,253 mn at Dec. 31, 2012. 4) Nominal amount $950 mn (exchange rate at Dec. 31, 2012: 1.3191). Note: CP = Commercial paper. SoR = Sale of receivables (total amount as of Dec. 31, 2012: €936 mn). 53 Continental Corporation Purchasing – Production Materials 2012 Purchasing Contracts Natural Continental has a wide range of sources rubber Oil-based for production materials worldwide. 7% chemicals1 16% Others4 A specific strategy for each production 15% material group is set up and the appropriate supplier panel is selected. This way we ensure the competitiveness Electronics and availability of the materials. 20% Mechanical For some materials such as certain oil- components3 based chemicals or natural rubber, 25% Electro- prices might have a long lead time until mechanical they become fully reflected in the cost of components2 our final products. 17% Total production material purchased in 2012: €15.8 bn 1) E.g. synthetic rubber, carbon black. 2) E.g. printed circuit boards, connectors, motors. 3) E.g. stamped parts, turned parts, castings. 4) E.g. textiles, plastics. 54 © Continental AG Fact Book 2012 | 33 Continental Corporation Development of Raw Material Prices 350% 180% 160% 300% 140% 250% 120% 200% 100% 150% 80% 100% 60% 50% 40% 0% 20% 12/07 12/08 12/09 12/10 12/11 12/12 12/07 12/08 12/09 12/10 12/11 12/12 TSR 20 RSS3 Carbon steel Stainless steel Brent Oil Butadiene Styrene Aluminium Copper Source: Bloomberg, January 2013. 55 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 56 © Continental AG Fact Book 2012 | 34 Market Data Increasing Installation Rates of Electronic Brake Systems 100% 80% North America 60% Europe 40% 20% 0% 100% China 80% Japan 60% 40% 20% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 ABS/TCS ESC Total EBS Source: Continental estimates. 57 Market Data Installation Rates of Fuel Injection Systems1 100% Europe North America 80% 60% 40% 20% 0% 100% Japan China 80% 60% 40% 20% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Gasoline direct injection Gasoline port fuel injection Diesel injection Source: Continental estimates. 1) Based on production of diesel and gasoline engines for passenger cars & light vehicles. 58 © Continental AG Fact Book 2012 | 35 Market Data Increasing Installation Rates of Double Clutch Transmissions1 100% Europe North America 80% 60% 40% 20% 0% 100% Japan China 80% 60% 40% 20% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Automated manual transmission Automatic transmission Double clutch transmission Continuous variable transmission Manual transmission Source: Continental estimates. 1) Based on production of transmissions for passenger cars and light vehicles. 59 Market Data Increasing Installation Rates of Turbocharger in Gasoline Engines 12% 10% 8% 6% 4% 2% 0% 2010 2011 2012 2013 2014 2015 2016 2017 EMEA North and South America Asia China Source: IHS and Continental estimates. 60 © Continental AG Fact Book 2012 | 36 Market Data Increasing Installation Rates of Embedded Telematics1 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Europe North America Japan China Source: Continental estimates. 1) Different volume scenarios may apply starting 2013 as a result of new legislation. 61 Market Data Increasing Installation Rates of Keyless Entry Systems 100% Europe North America 80% 60% 40% 20% 0% 100% Japan China 80% 60% 40% 20% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Active keyless entry systems Passive keyless entry systems Source: Strategy Analytics. 62 © Continental AG Fact Book 2012 | 37 Market Data Increasing Installation Rates of Multimedia Systems1 100% Europe North America 80% 60% 40% 20% 0% 100% Japan China 80% 60% 40% 20% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2010 2011 2012 2013 2014 2015 2016 2017 Radio Multimedia Source: Continental estimates. 1) Navigation stand-alone systems and navigation systems with enriched multimedia functions. 63 Market Data Increasing Installation Rates of Advanced Driver Assistance Systems1 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 Europe NAFTA Japan Source: Continental estimates. 1) Adaptive cruise control, collision mitigation, lane departure warning, blind spot detection, intelligent lighting, night vision, traffic sign recognition. 64 © Continental AG Fact Book 2012 | 38 Market Data Increasing Installation Rates of Head-Up Displays 1,600 (in k units) 1,400 1,200 1,000 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 Europe North America Japan China Source: Continental estimates. 65 Market Data Production of Light Vehicles 2011 - 2014 1 1 1 (in million units) 2011 2012 2013 2014 NAFTA 13.1 15.2 15.5 15.8 South America 4.3 4.3 4.4 4.6 Europe2 20.2 18.8 18.4 18.7 Asia 36.5 40.3 42.5 43.8 Other markets 2.7 2.3 1.7 2.0 Total 76.8 80.9 82.5 84.9 Source: IHS and Continental estimates. 1) Estimates for passenger cars and light trucks < 6 tons (including vans). 2) West, Central and East incl. Russia and Turkey. 66 © Continental AG Fact Book 2012 | 39 Market Data Production of Heavy Vehicles 2011 - 2014 1 1 1 (in thousand units) 2011 2012 2013 2014 NAFTA 451 496 521 545 South America 269 185 205 228 Europe2 646 615 599 652 Asia 2,001 1,817 1,967 2,039 Other markets 7 8 9 8 Total 3,374 3,121 3,301 3,472 Source: IHS and Continental estimates. 1) Estimates for trucks > 6 tons. 2) West, Central and East incl. Russia and Turkey. 67 Market Data Replacement Passenger, Light Truck and 4x4 Tires 2011 - 2014 1 1 1 (in million units) 2011 2012 2013 2014 NAFTA 252.9 247.9 252.8 260.4 South America 57.5 59.3 61.5 63.8 Europe2 313.2 287.4 296.0 307.9 Asia 265.8 277.6 295.4 315.4 Other markets 103.3 117.6 116.1 118.5 Total 992.7 989.8 1,021.8 1,066.0 Source: LMC World Tyre Forecast Service and Continental estimates. 1) Estimates. 2) West, Central and East incl. Turkey and Russia. 68 © Continental AG Fact Book 2012 | 40 Market Data Replacement Truck Tires 2011 - 2014 1 1 1 (in million units) 2011 2012 2013 2014 NAFTA 20.9 20.5 21.0 21.6 South America 13.0 12.7 13.4 14.2 Europe2 21.9 18.9 19.8 20.7 Asia 65.7 67.3 70.2 74.0 Other markets 16.9 17.2 17.6 17.9 Total 138.4 136.6 142.0 148.4 Source: LMC World Tyre Forecast Service and Continental estimates. 1) Estimates. 2) West, Central and East incl. Turkey and Russia. 69 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 70 © Continental AG Fact Book 2012 | 41 Automotive Group Key Figures (in € millions) 2010 2011 2012 Sales 15,917.0 18,354.2 19,505.1 EBITDA 1,779.1 2,225.8 2,404.6 in % of sales 11.2 12.1 12.3 EBIT 567.9 1,024.5 1,068.8 in % of sales 3.6 5.6 5.5 EBIT adjusted1 1,470.1 1,544.7 in % of sales1 8.0 7.9 Operating Assets (average) 11,512.0 11,427.2 11,438.5 ROCE (average) in % 4.9 9.0 9.3 R, D & E expense 1,227.1 1,367.5 1,495.6 in % of sales 7.7 7.5 7.7 Capex2 739.8 968.5 1,035.9 in % of sales 4.6 5.3 5.3 Depreciation & amortization3 1,211.2 1,201.3 1,335.8 in % of sales 7.6 6.5 6.8 thereof impairment4 35.6 22.8 75.0 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 4) 2012: Including goodwill impairment of €75.6 mn. 71 Automotive Group Sales and Adjusted EBIT1 by Division Automotive Group Sales (in € millions) Automotive Group adj. EBIT1 (in € millions) 6,434 19,505 579 0 1,545 - 116 7.9% 9.0% 3.3% 3.4% 6,135 279 1.9% 687 4.5% 7,053 9.7% 4.8% Organic growth (%) Adj. EBIT 1 margin (%) C&S PT I cons. Automotive C&S PT I cons. Automotive Group Group 1) Before amortization of intangibles from PPA, consolidation and special effects. 72 © Continental AG Fact Book 2012 | 42 Automotive Group Sales by Region Europe Europe Europe (excluding (excluding (excluding Germany) Germany) Germany) 24% 26% 26% Germany Germany (2010: 26%) Germany 29% 28% 26% NAFTA NAFTA NAFTA 23% 20% 20% Other Asia Other Asia Other Asia countries 21% countries 22% countries 24% 4% 4% 3% Sales in 2010: €15.9 bn Sales in 2011: €18.4 bn Sales in 2012: €19.5 bn 73 Automotive Group Order Intake (LTS1) in the Automotive Group Totaled €25 bn in 2012 Chassis & Safety Powertrain Interior Order intake totaled >€8.2 bn Order intake >€9.0 bn in 2012 Total order intake >€8.2 bn; Book-to-bill improved 1.2x after €8.1 bn in 2011 >25% of order intake is from Asia ADAS with best book-to-bill Book-to-bill improved 1.5x ratio and major business Transmission & Fuel Supply Book-to-bill 1.3x gains from Japanese and business with best book-to-bill Instrumentation & Driver HMI Korean OEM ratio in 2012; Engine Systems and Body & Security with best with major business gains book-to-bill in 2012 Order intake Chassis & Safety 2010 - 2012 Order intake Powertrain 2010 - 2012 Order intake Interior 2010 - 2012 >9.0 >8.2 >8.2 7.4 7.9 8.1 7.4 1.7 1.5 6.1 1.1 1.2 1.4 1.3 5.2 1.1 1.2 0.9 2010 2011 2012 2010 2011 2012 2010 2011 2012 LTS (bn €) Book-to-bill LTS (bn €) Book-to-bill LTS (bn €) Book-to-bill 1) Life-time sales. 74 © Continental AG Fact Book 2012 | 43 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group – 1. Chassis & Safety Division VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 75 Chassis & Safety Business Units and Key Products Electronic Brake Hydraulic Brake Passive Safety & Advanced Driver Chassis Systems Systems Sensorics Assistance Systems Components Hydraulic electronic Calipers and discs Wheel speed sensors Driver assistance Chassis electronics control units (HECU) Drum brakes Engine/transmission systems Electronic components st ABS Brake hoses speed and position Adaptive cruise control (1 tier customer) sensors ESC Boosters Emergency brake Suspension systems Chassis sensors assist Software functions Tandem master cylinders Sensor clusters Lane departure warning Adaptive cruise control Electric parking brakes Airbag control units Lane change support Regenerative brake Washer systems system Crash sensors Blind spot detection Brake pressure regulators Active front steering Satellite for electric Traffic sign recognition Electric vacuum pump Hill start assist, vehicle Intelligent head lamp hill descent control Pedestrian protection control Deflation detection Occupant classification Rear cross traffic alert system system (OCS) Driver assistance Hydraulic brake assist sensors Trailer stability assist Camera Radar Lidar 76 © Continental AG Fact Book 2012 | 44 Chassis & Safety Locations Worldwide 63 sites for production and R&D in 20 countries. Divisional headquarters in Frankfurt/Main, Germany. Europe Belgium France Portugal Sweden Germany China ▐ Mechelen ▐ Boussens ▐ Palmela ▐ Arvidsjaur ▐ Alzenau ▐ Korbach ▐ Shanghai Czech Republic ▐ Toulouse Romania UK ▐ Bebra ▐ Lindau ▐ Jiading TC ▐ Frankfurt ▐ ▐ Jiading CASS ▐ Adrspach Hungary ▐ Iasi ▐ Ebbw Vale Nuremberg ▐ Gifhorn ▐ ▐ Changchun I ▐ Frenstat ▐ Budapest ▐ Sibiu Regensburg ▐ Hanover ▐ ▐ Changchun II ▐ Jicin ▐ Veszprém ▐ Timişoara Rheinböllen ▐ Ingolstadt ▐ Schwalbach ▐ Changshu Italy Slovakia ▐ Karben ▐ Ulm ▐ Heihe ▐ Cairo Montenotte ▐ Zvolen ▐ Lian Yun Gang USA ▐ Auburn Hills ▐ Jiading SABS ▐ Brimley ▐ Culpeper ▐ Henderson South Korea ▐ Morganton ▐ Cheongwon ▐ Icheon Japan ▐ Asahi Mexico ▐ Hamakita ▐ Hiroshima ▐ Ayala Morelos (Cuautla) ▐ Monbetsu ▐ Guadalajara India ▐ Yokohama ▐ Las Colinas ▐ Bangalore ▐ Silao ▐ Gurgaon Malaysia Philippines (New Delhi) ▐ Penang ▐ ▐ Manesar Calamba Brazil ▐ Manila ▐ Salto ▐ Varzea Paulista ▐ Production ▐ Joint Ventures < 50% 77 Chassis & Safety Key Figures (in € millions) 2010 2011 2012 Sales 5,775.4 6,510.8 7,052.5 EBITDA 891.7 982.3 973.7 in % of sales 15.4 15.1 13.8 EBIT 569.0 661.9 638.5 in % of sales 9.9 10.2 9.1 EBIT adjusted1 719.0 686.8 in % of sales1 11.0 9.7 Operating Assets (average) 3,997.0 4,024.7 4,097.4 ROCE (average) in % 14.2 16.4 15.6 R, D & E expense 422.3 463.1 511.7 in % of sales 7.3 7.1 7.3 Capex2 247.1 327.1 383.8 in % of sales 4.3 5.0 5.4 Depreciation & amortization3 322.7 320.4 335.2 in % of sales 5.6 4.9 4.8 thereof impairment 3.8 1.6 -2.0 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 78 © Continental AG Fact Book 2012 | 45 Chassis & Safety Sales by Region Europe Europe Europe (excluding (excluding (excluding Germany) Germany) Germany) 23% 21% Germany 24% Germany Germany 30% 29% 27% NAFTA NAFTA 21% NAFTA 19% 19% Other Asia Other Asia Other Asia countries 23% countries 25% countries 28% 4% 4% 3% Sales in 2010: €5.8 bn Sales in 2011: €6.5 bn Sales in 2012: €7.1 bn 79 Chassis & Safety Market Position of Top 3 in Electronic Brake Systems 2012 Continental Europe All others Bosch TRW Continental North America All others Bosch TRW Continental South America All others Bosch TRW Continental Asia/Pacific All others Advics Bosch Continental World All others Bosch TRW Market share of all suppliers other than top 3 Source: Continental estimates. 80 © Continental AG Fact Book 2012 | 46 Chassis & Safety Market Position of Top 3 in Foundation Brake Systems 2012 Continental Europe All others Bosch TRW Continental North America All others Akebono TRW Continental South America All others Bosch TRW Continental Asia/Pacific All others Advics Mando Continental World All others Akebono TRW Market share of all suppliers other than top 3 Source: Continental estimates. 81 Chassis & Safety Market Position of Top 3 in Actuation 2012 Continental Europe All others Bosch TRW Continental North America All others Bosch TRW Continental South America All others Bosch TRW Continental Asia/Pacific All others Advics Bosch Continental World All others Bosch TRW Market share of all suppliers other than top 3 Source: Continental estimates. 82 © Continental AG Fact Book 2012 | 47 Chassis & Safety Market Position of Top 3 in Airbag Electronics 2012 Continental Europe All others Autoliv Bosch Continental North America All others Autoliv TRW Continental South America All others Autoliv TRW Continental Asia/Pacific All others Bosch Denso Continental World All others Autoliv Bosch Market share of all suppliers other than top 3 Source: Continental estimates. 83 Chassis & Safety Market Position of Top 3 in Advanced Driver Assistance Systems 2012 Europe Continental All others Bosch Delphi Continental Autoliv North America Delphi All others Valeo Continental Denso Hella Asia/Pacific All others Honda Elesys Continental All others Delphi World Denso Source: Continental estimates. Market share of all suppliers other than top 3 84 © Continental AG Fact Book 2012 | 48 Chassis & Safety Growing Sales Volume for Electronic Brake Systems Model Selection Europe 25 Audi A3 (in million units) BMW 1 Series / 3 Series Ford Focus / Fiesta Mercedes C Class Opel Astra / Zafira Peugeot 208 / C3 20 Renault Megane / Scenic Skoda Octavia Toyota Yaris Volvo S60/V40/XC60 VW Golf / Passat 15 NAFTA BMW X3 Chevrolet Cruze / Equinox ESC Chrysler Caliber Succ RAM 1500 10 Ford Explorer/Escape/Focus/Fusion Honda Odyssey Jeep Wrangler RAM 1500 VW Jetta/New Beetle/New Passat 5 Asia ABS/TCS Daewoo Orlando / Cruze Ford Ecosport / Focus Succ. GM Buick XT/GT Honda Life (succ) / N One 0 Mazda Axela / CX-5 / Demio PSA 206(207) Skoda Octavia Suzuki Wagon R / Palette Mitsubishi Lancer / Outlander / RVR VW Lavida / Bora / Passat / Sagitar Source: Continental estimates. 85 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group – 2. Powertrain Division VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 86 © Continental AG Fact Book 2012 | 49 Powertrain Business Units and Key Products Hybrid Electric Sensors & Engine Systems Transmission Fuel Supply Vehicle Actuators Engine management Control units for Systems/components for Actuators for powertrain Fuel supply units systems and fuel Automatic hybrid and electric applications: Fuel level sensors components for vehicle applications electronic throttle control, transmission Fuel pumps air control valve, general Diesel piezo common Double clutch Power electronics purpose actuator, Control electronics for rail injection systems transmission Electric motors variable valve timing, fuel pumps Gasoline piezo direct Automated manual Battery systems electric pumps, exhaust Functional components injection transmission Energy management gas recirculation, digital Gasoline solenoid Continuously variable Power net systems linear actuators direct injection transmission Exhaust and emission Gasoline port injection sensors: temperature, Liquefied petroleum Control units for all wheel exhaust gas, fluid, gas (LPG) and drive applications evaporation control compressed natural Transfer cases Engine and transmission gas (CNG) Differentials sensors: Aftertreatment pressure, combustion, Limited slip coupling Engine management mass air flow, position systems /aftertreatment Clutch systems Door handle sensors products for commercial vehicle applications Turbocharger 87 Powertrain Locations Worldwide 52 sites for production and R&D in 20 countries. Divisional headquarters in Regensburg, Germany. Europe Czech Republic France Romania Germany ▐ Adrspach ▐ Boussens ▐ Brasov ▐ Bebra ▐ Limbach-Oberfrohna/Stollberg ▐ Brandys ▐ Foix ▐ Iasi ▐ Berlin ▐ Lohmar ▐ Frenstat ▐ Toulouse ▐ Sibiu ▐ Dortmund ▐ Nuremberg ▐ Trutnov Hungary ▐ Timişoara ▐ Gifhorn ▐ Regensburg Russia ▐ Budapest UK ▐ Grünstadt ▐ Roding ▐ Kaluga Italy ▐ Birmingham ▐ Karben ▐ Schwalbach China ▐ Pisa ▐ Changchun ▐ Shanghai Canada ▐ Tianjin ▐ Chatham ▐ Wuhu USA South Korea ▐ Auburn Hills ▐ Cheongwon ▐ Dearborn ▐ Icheon ▐ Deer Park ▐ Newport News Japan ▐ Seguin ▐ Yokohama Mexico ▐ Ayala Morelos (Cuautla) Philippines ▐ Guadalajara India ▐ Calamba ▐ Juarez ▐ Bangalore ▐ Manesar Malaysia ▐ Pune ▐ Penang Brazil ▐ Guarulhos ▐ Salto Thailand ▐ Amata City Australia ▐ Bundoora ▐ Production, R&D ▐ Joint Ventures < 50% 88 © Continental AG Fact Book 2012 | 50 Powertrain Key Figures (in € millions) 2010 2011 2012 Sales 4,730.8 5,842.0 6,134.8 EBITDA 268.2 484.7 590.2 in % of sales 5.7 8.3 9.6 EBIT -198.1 31.3 29.5 in % of sales -4.2 0.5 0.5 EBIT adjusted1 240.8 278.6 in % of sales1 4.1 4.5 Operating Assets (average) 3,112.2 3,027.4 3,028.1 ROCE (average) in % -6.4 1.0 1.0 R, D & E expense 396.9 454.9 535.9 in % of sales 8.4 7.8 8.7 Capex2 301.5 393.7 395.0 in % of sales 6.4 6.7 6.4 Depreciation & amortization3 466.3 453.4 560.7 in % of sales 9.9 7.8 9.1 thereof impairment4 36.6 8.5 75.9 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 4) 2012: Including goodwill impairment of €75.6 mn. 89 Powertrain Sales by Region Europe Europe Europe (excluding (excluding (excluding Germany) Germany) Germany) 29% 31% 33% Germany (2010: 26%) Germany Germany 26% 24% 23% NAFTA NAFTA NAFTA 24% 20% 21% Other Asia Other Asia Other Asia countries 22% countries 21% countries 23% 1% 1% 1% Sales in 2010: €4.7 bn Sales in 2011: €5.8 bn Sales in 2012: €6.1 bn 90 © Continental AG Fact Book 2012 | 51 Powertrain Market Position for Diesel Injection Systems1 2012 Continental Europe All others Bosch Delphi Asia/Pacific2 Continental Bosch Delphi All others Denso Continental World All others Bosch Delphi Market share of all suppliers other than top 3 Source: Continental estimates. 1) For passenger cars & light trucks. 2) Japan, South Korea, China, India, Thailand. 91 Powertrain Market Position for Gasoline Injection Systems1 2012 Continental Europe All others Bosch Hitachi Continental North America All others Bosch Denso Continental Bosch South America Delphi All others Magneti Marelli Continental Asia/Pacific2 All others Bosch Denso Continental World All others Bosch Denso Source: Continental estimates. 1) For passenger cars & light trucks. Market share of all suppliers other than top 3 2) Japan, South Korea, China, India, Thailand. 92 © Continental AG Fact Book 2012 | 52 Powertrain Market Position for Transmission Control Units1 2012 Europe Continental All others Bosch Continental North America All others Aisin Bosch Continental Asia/Pacific2 All others Aisin Hitachi Continental All others Aisin World Bosch Source: Continental estimates. 1) For passenger cars & light trucks. Market share of all suppliers other than top 3 2) Japan, South Korea, China, India. 93 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group – 3. Interior Division VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 94 © Continental AG Fact Book 2012 | 53 Interior Business Units and Key Products Instrumentation & Infotainment & Commercial Vehicles & Body & Security Driver HMI Connectivity Aftermarket Instrument clusters Radios Body control modules Tachographs, telematics & services Secondary displays Multimedia systems Access control systems Visual & haptical HMI Head-up displays Connectivity & telematics Door systems Powertrain control Climate controls Software & special solutions Seat comfort systems Chassis-, body- & Control panels Power closures transmission electronics Central input devices Tire information systems Wear parts, spare parts, Cockpit modules Gateways services and multi-brand Energy management vehicle diagnosis for the independent aftermarket Exterior light control units Original equipment services Intelligent antenna modules 95 Interior Locations Worldwide 65 sites for production and R&D in 24 countries. Divisional headquarters in Regensburg, Germany. Europe Austria France Romania Switzerland Germany ▐ Vienna ▐ Boussens ▐ Iasi ▐ Rüthi ▐ Babenhausen ▐ Markdorf China ▐ Foix ▐ Sibiu ▐ Bebra ▐ Czech Rep. Sweden Nuremberg ▐ Changchun ▐ Hambach ▐ Timişoara ▐ Dortmund ▐ Regensburg ▐ Adršpach ▐ Arvidsjaur Russia ▐ Jinan ▐ Rambouillet Spain ▐ Ingolstadt ▐ Schwalbach am Taunus ▐ Brandŷs UK ▐ Chistopol ▐ Najing ▐ Toulouse ▐ Rubi ▐ Karben ▐ ▐ Frenštát Villingen-Schwenningen ▐ Kaluga ▐ Shanghai Hungary ▐ Birmingham ▐ Wetzlar ▐ Tianjin ▐ Budapest ▐ Wuhu USA ▐ Auburn Hills ▐ Deer Park South Korea ▐ Newport News ▐ Cheongwon-gun ▐ Seguin ▐ Gyeonggi-do ▐ Troy ▐ Icheon-city Tunesia Japan Mexico ▐ Yokohama ▐ Bizerte ▐ Cuautla ▐ Guadalajara Philippines ▐ Nogales India ▐ Manila ▐ Tlaquepaque ▐ Bangalore ▐ Chennai Singapore ▐ Haryana Malaysia ▐ ▐ Singapore Brazil ▐ Pune Penang ▐ Gravatai ▐ Manaus ▐ Guarulhos ▐ Resende ▐ São Bernardo Thailand Australia do Compo ▐ Bangkok ▐ Bundoora ▐ Campbellfield 96 © Continental AG Fact Book 2012 | 54 Interior Key Figures (in € millions) 2010 2011 2012 Sales 5,518.1 6,110.7 6,434.2 EBITDA 619.1 758.8 840.6 in % of sales 11.2 12.4 13.1 EBIT 197.0 331.2 400.8 in % of sales 3.6 5.4 6.2 EBIT adjusted1 510.2 579.3 in % of sales1 8.4 9.0 Operating Assets (average) 4,402.8 4,375.1 4,313.0 ROCE (average) in % 4.5 7.6 9.3 R, D & E expense 407.9 449.6 448.0 in % of sales 7.4 7.4 7.0 Capex2 191.3 247.7 257.1 in % of sales 3.5 4.1 4.0 Depreciation & amortization3 422.1 427.6 439.8 in % of sales 7.6 7.0 6.8 thereof impairment -4.8 12.7 1.1 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 97 Interior Sales by Region Europe Europe Europe (excluding (excluding (excluding Germany) Germany) Germany) 21% Germany 24% Germany 24%(2010: 26%) Germany 31% 31% 30% NAFTA NAFTA NAFTA 23% 19% 19% Other Asia Asia Other Asia 18% Other 19% 20% countries countries countries 8% 7% 6% Sales in 2010: €5.5 bn Sales in 2011: €6.1 bn Sales in 2012: €6.4 bn 98 © Continental AG Fact Book 2012 | 55 Interior Market Position for Body & Security 2012 Continental Europe All others Hella Lear Continental North America All others Denso Lear Continental South America All others Delphi Hella Continental Asia/Pacific All others Denso Omron Continental World All others Denso Lear Market share of all suppliers other than top 3 Source: Continental estimates. 99 Interior Market Position for Instrumentation & Driver HMI1 2012 Continental Europe All others JCI Magneti Marelli Continental North America All others Denso Nippon Seiki Continental South America All others Denso Magneti Marelli Continental Asia/Pacific All others Denso Nippon Seiki Continental World All others Denso Nippon Seiki Source: Continental estimates. Market share of all suppliers other than top 3 1) Excluding cockpit modules. 100 © Continental AG Fact Book 2012 | 56 Interior Market Position for Infotainment & Connectivity 2012 Continental Europe All others Bosch Harman Alpin Continental North America Denso All others Panasonic Bosch Continental South America Delphi All others Panasonic Clarion Asia/Pacific Continental Denso All others Panasonic Continental World All others Harman Panasonic Market share of all suppliers other than top 3 Source: Continental estimates. 101 Interior Market Position for Commercial Vehicle1 2012 Continental Europe All others Bosch Stoneridge Continental North America All others Phoenix Stoneridge Continental South America All others PST Stoneridge Continental Asia/Pacific All others DETC Yazaki Continental World All others Stoneridge Yazaki Market share of all suppliers other than top 3 Source: Continental estimates. 1) Market shares for commercial vehicle business as described in BU structure excluding automotive aftermarket. 102 © Continental AG Fact Book 2012 | 57 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 103 Rubber Group Key Figures (in € millions) 2010 2011 2012 Sales 10,152.5 12,176.6 13,261.7 EBITDA 1,851.5 2,041.5 2,521.7 in % of sales 18.2 16.8 19.0 EBIT 1,413.1 1,612.8 2,077.8 in % of sales 13.9 13.2 15.7 EBIT adjusted1 1,640.4 2,064.1 in % of sales1 13.5 15.8 Operating Assets (average) 4,112.1 4,640.3 5,590.7 ROCE (average) in % 34.4 34.8 37.2 R, D & E expense 223.3 241.2 270.6 in % of sales 2.2 2.0 2.0 Capex2 555.8 747.7 981.2 in % of sales 5.5 6.1 7.4 Depreciation & amortization3 438.4 428.7 443.9 in % of sales 4.3 3.5 3.3 thereof impairment 22.1 -2.4 -25.1 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 104 © Continental AG Fact Book 2012 | 58 Rubber Group Sales and Adjusted EBIT1 by Division Rubber Group Sales (in € millions) Rubber Group adj. EBIT1 (in € millions) 9,665 13,262 1,620 2,064 0 - 115 7.0% 5.5% 15.8% 17.0% 3,712 444 1.7% 12.1% Organic growth (%) Adj. EBIT 1 margin (%) CT Tires cons. Rubber Group CT Tires cons. Rubber Group 1) Before amortization of intangibles from PPA, consolidation and special effects. 105 Rubber Group Sales by Region Europe Europe Europe (excluding (excluding (excluding Germany) Germany) Germany) 40% Germany 43% (2010:43% 26%) Germany Germany 25% 24% 22% NAFTA Asia NAFTA Asia NAFTA 20% Other Asia 8% 17% Other 9% 18% Other 10% countries countries countries 7% 6% 8% Sales in 2010: €10.2 bn Sales in 2011: €12.2 bn Sales in 2012: €13.3 bn 106 © Continental AG Fact Book 2012 | 59 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group – 1. Tires Division VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 107 Tires Business Units and Tire Brands Passenger Passenger Passenger Passenger and Light and Light and Light and Light Commercial Vehicle Tires Two Wheel Truck Tires Truck Tires Truck Tires Truck Tires Tires Original Replacement Replacement Replacement Truck Tires Truck Tires Truck Tires Commercial Equipment EMEA The Americas APAC EMEA The Americas APAC Specialty Tires Tires and Tires and services Tubes for: Tires for: Tires and services for for the customer segments: applications: Bicycles: Race, Compact, medium-size and Material Mountainbike, full-size cars Goods handling City/Trekking 4x4 and SUVs People Multi-purpose Motorcycles: Vans, light trucks and RVs Construction scooters, big Earthmover bikes >150cc, bikes <150cc 2 2 Extended 3 mobility systems: SSR 1 Minispares 4 Conti KomfortKit Conti MobilityKit Astrum Blue ContiSeal 1) Except NAFTA, Colombia, Peru. NVH 2) Trademark rights for Malaysia, Singapore and Brunei. engineering 3) Only in Australia. services 4) Only in People’s Republic of China. 108 108 © Continental AG Fact Book 2012 | 60 Tires Key Figures (in € millions) 2010 2011 2012 Sales 7,165.4 8,717.7 9,665.0 EBITDA 1,383.3 1,526.5 1,974.0 in % of sales 19.3 17.5 20.4 EBIT 1,043.5 1,195.7 1,635.4 in % of sales 14.6 13.7 16.9 EBIT adjusted1 1,195.2 1,620.0 in % of sales1 13.7 17.0 Operating Assets (average) 3,051.4 3,561.5 4,430.8 ROCE (average) in % 34.2 33.6 36.9 R, D & E expense 162.6 176.1 195.1 in % of sales 2.3 2.0 2.0 Capex2 455.5 637.1 830.2 in % of sales 6.4 7.3 8.6 Depreciation & amortization3 339.8 330.8 338.6 in % of sales 4.7 3.8 3.5 thereof impairment 20.0 -3.2 -25.1 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 109 Tires Sales by Region Europe Europe (excluding (excluding Germany) Germany) 46% 43% (2010: 26%) Germany Germany 18% 18% NAFTA NAFTA Asia Asia 24% Other 7% 22% Other 8% countries countries 7% 7% Sales in 2011: €8.7 bn Sales in 2012: €9.7 bn 110 © Continental AG Fact Book 2012 | 61 Passenger and Light Truck Tires Market Share for Passenger and Light Truck Tires1 2012 Europe2 Continental All others Goodyear/Sumitomo Michelin North America3 Continental Bridgestone/Firestone Goodyear/Sumitomo All others Michelin Source: Continental estimates. 1) Replacement. 2) West and Central. Market share of all suppliers other than top 3 3) incl. Central America/Caribbean markets. 111 Commercial Vehicle Tires Market Share for Truck Tires1 2012 Europe2 Continental Bridgestone/Firestone Goodyear/Sumitomo All others Michelin North America Continental Bridgestone/Firestone Goodyear/Sumitomo All others Michelin Source: Continental estimates. 1) Replacement. Market share of all suppliers other than top 3 2) West and Central, incl. Turkey. 112 © Continental AG Fact Book 2012 | 62 Passenger and Light Truck Tires Worldwide Passenger and Light Truck Tire Production 2012 (in million units) 10 8 2 Mount Vernon (US) Hefei (CN) San Luis Potosí 3 (MX) 2 5 Alor Star / Cuenca Petaling Jaya1 (EC) (MY) Camaçari 4 (BR) Port Elizabeth (ZA) 1) Until 2004 consolidated in CVT Division. 113 Passenger and Light Truck Tires European Passenger and Light Truck Tire Production 2012 (in million units) 10 9 20 11 10 Korbach Aachen Otrokovice 14 (DE) (CZ) Puchov (SK) Sarreguemines (FR) 16 Timişoara (RO) Lousado (PT) 114 © Continental AG Fact Book 2012 | 63 Commercial Vehicle Tires Worldwide Truck Tire Production1 2012 (in million units) 2.8 0.7 2.2 Otrokovice Puchov (CZ) Mount Vernon2 (SK) (US) 0.5 0.2 Modipuram (IN) 0.2 0.5 Petaling Jaya (MY) Cuenca Camaçari (EC) (BR) 0.1 Port Elizabeth (ZA) 1) Production of bias and radial tires. 2) Including deliveries to JV partners. 115 Tires Cost of Labor at Continental Manufacturing Sites1 Germany 100% France 100% USA 95% Portugal 64% Mexico 59% Czech Republic 41% Brazil 35% Slovakia 35% South Africa 33% Ecuador 27% Romania 24% Malaysia 14% China 12% India 4% 0% 20% 40% 60% 80% 100% 120% 1) Based on average FX rates 2012. 116 © Continental AG Fact Book 2012 | 64 Passenger and Light Truck Tires Product Mix Improvement (in million units) (in million units) 40.5% 32 29 24 21 21 21 21.6% 19 19 19 17 13.2% 6.8% 4.1% 3.8% 1.2% 0.7% -2.6% -10.2% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Winter tires worldwide1 High performance summer tires worldwide2 1) OE & replacement (excl. all-season tires). 2) All summer tires and all-season tires with rim sizes of at least 17 inches. 117 Passenger and Light Truck Tires Unit Sales 2007 - 2012 (in million units) 123 122 114 4 111 8 108 4 4 99 29 30 24 23 4 25 20 84 84 86 89 84 75 2007 2008 2009 2010 2011 2012 Europe (incl. Row) 1 The Americas 2 Asia/Pacific 1) 2007 Asia included in Europe. 2) North America; since 2007 including Latin America. 118 © Continental AG Fact Book 2012 | 65 Commercial Vehicle Tires Unit Sales 2007 - 2012 (in million units) 7.2 7.1 7.0 6.7 0.4 0.7 0.2 6.3 0.3 2.9 5.1 2.8 0.2 3.5 3.5 3.2 2.6 4.3 3.7 2.8 3.1 2.9 2.3 2007 2008 2009 2010 2011 2012 Europe (incl. Row) 1 The Americas 2 Asia/Pacific 1) 2007 Asia included in Europe. 2) North America; since 2007 including Latin America. 119 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group – 2. ContiTech Division VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 120 © Continental AG Fact Book 2012 | 66 ContiTech Business Units and Key Products Air Spring Systems Benecke-Kaliko Group Compounding Technology Conveyor Belt Group Air suspension systems for Foils and synthetic leather Customized compounds for Steel cord / fabric belts buses, trucks and rail vehicle products for automotive high-quality elastomer Special-purpose belts technology interior trim products, functional parts, Conveyor belt components Air actuators for pneumatics/ components and systems Service material air springs for vibration Testing services isolation Compensators Elastomer Coatings Fluid Technology Power Transmission Group Vibration Control Coated fabrics Hoses / hose lines for: V-belts Rubber-to-metal bonded Printing blankets / plates Air conditioning Multiple V-ribbed belts products Diaphragms /- materials Fuel- & exhaust systems Timing belts Hydromounts Gasholder diaphragms Heating / cooling systems Flat belts Precision molded parts Collapsible tanks Powertrain Steering / chassis Belt drive systems Blow molded parts Fuel tanks Turbocharger Plastic parts Concertina walls Industrial applications 121 ContiTech Locations Worldwide 66 sites for production and R&D in 19 countries. Divisional headquarters in Hanover, Germany. Europe Czech Rep. Hungary Serbia Turkey Germany ▐ Chomutov ▐ Makó ▐ Subotica ▐ Bursa ▐ Aachen ▐ Hoppegarten China France ▐ Nyiregyhaza ▐ Veliki Crljeni UK ▐ Bad Blankenburg ▐ Karben ▐ ▐ Andrezieux ▐ Szeged Slovakia ▐ Ashington ▐ Dannenberg ▐ Korbach Changchun ▐ ▐ Gennevilliers ▐ Vác ▐ Dolné Vestenice ▐ Grimsby ▐ Eislingen ▐ Moers Changshu ▐ ▐ Le Chambon Romania ▐ Partizanske ▐ Thetford ▐ Hamburg ▐ Northeim Changzhi ▐ Ninghai ▐ Lyon ▐ Carei ▐ Puchov ▐ Wigan ▐ Hanover ▐ Oedelsheim Russia ▐ Shanghai Greece ▐ Nadab ▐ Hann. Münden ▐ Oppenweiler ▐ Moscow ▐ Tianjin ▐ Vólos ▐ Timişoara ▐ Hedemünden ▐ Salzgitter ▐ ▐ Herzogenaurach ▐ Waltershausen Zhangjiagang USA ▐ Auburn Hills South Korea ▐ Collierville ▐ Busan ▐ Houston ▐ Chonan ▐ Somersworth ▐ Jeonju ▐ Seonghwan-Eup Japan Mexico ▐ Kurashiki ▐ Montemorelos ▐ Monterrey ▐ San Luis Potosí India ▐ Tlalnepantla ▐ Calcutta ▐ New Delhi Brazil ▐ Ponta Grossa Chile ▐ Santiago de Chile ▐ Production, R&D ▐ Cooperation, Joint Ventures ≤ 50% 122 © Continental AG Fact Book 2012 | 67 ContiTech Key Figures (in € millions) 2010 2011 2012 Sales 3,095.3 3,583.1 3,711.8 EBITDA 468.2 515.0 547.7 in % of sales 15.1 14.4 14.8 EBIT 369.6 417.1 442.4 in % of sales 11.9 11.6 11.9 EBIT adjusted1 445.2 444.1 in % of sales1 12.4 12.1 Operating Assets (average) 1,060.7 1,078.8 1,159.9 ROCE (average) in % 34.8 38.7 38.1 R, D & E expense 60.7 65.0 75.5 in % of sales 2.0 1.8 2.0 Capex2 100.3 110.6 151.0 in % of sales 3.2 3.1 4.1 Depreciation & amortization3 98.6 97.9 105.3 in % of sales 3.2 2.7 2.8 thereof impairment 2.1 0.8 0.0 1) EBIT before amortization of intangible assets from PPA, consolidation and special effects; sales before changes in the scope of consolidation. 2) Capex including software. 3) Excluding write-downs of investments. 123 ContiTech Sales by Region Germany Germany Europe Germany (excluding 38% Europe 38% (2010:Europe 26%) 34% Germany) (excluding (excluding 32% Germany) Germany) 34% 35% NAFTA Asia Asia 10% Other Other Asia 14% NAFTA 13% NAFTA Other 16% countries 7% countries 8% countries 7% 6% 8% Sales in 2010: €3.1 bn Sales in 2011: €3.6 bn Sales in 2012: €3.7 bn 124 © Continental AG Fact Book 2012 | 68 ContiTech A Leading Global Supplier in its Business Units Product line Automotive hoses and hose lines Fluid Technology Oil and marine Conveyor Belt Group Conveyor belts Power Transmission Group Multiple V-ribbed belts and timing belts Benecke-Kaliko Group Foils for automotive interiors Chassis sealing system Vibration Control Engine mounts for trucks Compounding Compounds Truck and bus air springs Air Spring Systems Railway systems Printing blankets Elastomer Coatings Life raft and protective gear materials 125 ContiTech Sales and Employees 2012 Sales (in € millions) Employees Fluid Technology 1,358 14,369 Conveyor Belt Group 616 3,846 Power Transmission Group 402 2,562 Benecke-Kaliko Group 357 1,747 Vibration Control 321 2,232 Compounding 305 777 Air Spring Systems 266 1,462 Elastomer Coatings 110 611 ContiTech 3,7121 28,2102 1) Including other operations. 2) Including service functions. 126 © Continental AG Fact Book 2012 | 69 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 127 Sustainability at Continental Our Policies and Guidelines CSR Guideline Our basic values and principles Environmental Responsibility Social Responsibility Corporate Governance ESH1 Policy – implements Code of Conduct – personal Corporate Governance Policy worldwide the responsibility ethics, conflicts of interest – to further the responsible for protecting the environment management of the company OUR BASICS – the focused on value creation guidelines, codex and basic Risk Report – overview of our principles of our business Risk Management activities OUR BASICS Our corporate guidelines 1) “Environment”, “Security, Safety” and “Health”. 128 © Continental AG Fact Book 2012 | 70 Environmental Responsibility Corporate Environmental Key Performance Indicators 1 1 CO2 emissions (independently verified by KPMG) Energy consumption 2.41 23.9 2.21 22.2 1.99 19.1 1.08 0.97 0.92 0.8 8.7 8 7.5 6.6 0.52 0.38 0.47 2 2 2009 2010 2011 2015 2009 2010 2011 2015 direct (mn tonnes) indirect (mn tonnes) mn GJ (gigajoule) per tonne of product (GJ) per tonne of product (tonne) 1 1 Water consumption 13.7 14.2 Waste production 244 11.4 205 183 5.2 4.9 4.4 83.5 3.9 73.6 76.5 67.7 67.0 62.6 63.9 62.3 2 2 2009 2010 2011 2015 2009 2010 2011 2015 thousand tonnes per tonne of product (kg) mn m 3 per tonne of product (m3 ) recycling per tonne of product (kg) 1) Changes to previous figures are based on changes in the scope of the survey. 2) Continental targets. 129 Social Responsibility – Responsible Employer Equal Opportunity Diversity Project to support women A talent pool which incorporates all corporate divisions The formation of career support networks Female mentoring program Female ambassadors Working time models such as part-time, home office, job sharing Support with combining job and family The specification of target corridors for the proportion of women in management functions in the future Demographics Program A holistic concept designed to address the far-reaching changes as a result of the expected demographic trend focuses on four topics: workplace design maintaining employee health for a longer working life targeted qualification measures Award of the Apriori-business solution AG for motivation for a longer professional life Continental’s “Demography Management” 130 © Continental AG Fact Book 2012 | 71 Social Responsibility Corporate Memberships (1) Continental is a participant of the United Nations Global Compact. We have thus committed ourselves to its ten principles in the areas of human rights, labor, environment and anti-corruption. The Charter of Diversity recognizes diversity as an opportunity. The signatory companies commit to diversity, fairness and mutual respect. The aim is to create a working environment that is free of prejudice and discrimination. The Luxembourg Declaration on Workplace Health Promotion (WHP) promotes health and occupational safety in the companies of the member states of ENWHP1. The declaration encourages members to attach greater importance to WHP. The World Business Council for Sustainable Development (WBCSD), founded in 1995, is a frontrunner and catalyst on the path to sustainable development. Source: www.vielfalt-als-chance.de (German Federal Government Commissioner for Migration, Refugees and Integration); luxemburger-deklaration.de. 1) European Network for Workplace Health Promotion. 131 Social Responsibility Corporate Memberships (2) ECPI is a leading Rating and Index company dedicated to ESG Research since 1997. Continental is a constituent of the ECPI Ethical EMU Equity1 as one of the Global Equity Indices. The Carbon Disclosure Project (CDP) is a non-profit organization that aims to create more transparency regarding environmentally damaging emissions. Continental has been answering CDP’s extensive questionnaire since 2009. In 2012, we advanced our way into the Carbon Disclosure Leadership Index. The European Road Safety Charter is an appeal and impetus for all groups in society to make a concrete contribution to improving traffic safety in Europe. The goal is to reduce the number of fatalities on the roads of the European Union (EU) by 2020. 1) 150 top capitalized companies in the Economic and Monetary Union market which are eligible investments. 132 © Continental AG Fact Book 2012 | 72 Corporate Governance Corporate Bodies Annual Shareholders’ Meeting (ASM) Shareholders exercise their voting rights (1 share = 1 vote) election / ratification reporting taking into account ratification resolutions of ASM Supervisory Board Chairman’s Committee Chairman of the Executive Board Supervisory Board & Mediation Committee Chairman of the Executive Board Approval of certain management decisions of material importance to the company Audit Committee Solely responsible for the management 20 members (in accordance with the of the company Mitbestimmungsgesetz (German Co-determination Act)): Nomination Committee 10 elected by ASM 8 members 10 elected by such employees of Continental AG and its subsidiaries who are employed in Germany appoints, supervises, advises reporting Corporate Governance is the responsibility of the company‘s corporate bodies. Continental AG‘s Corporate Governance Principles are closely modeled on the recommendations and suggestions of the German Corporate Governance Code. Source: Based on information in Annual Report Continental AG 2012 (pp 32-35). 133 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 134 © Continental AG Fact Book 2012 | 73 Share & Bond Information Share Data / ADR Data Share Data Type of share No-par value share Bloomberg ticker CON Reuters ticker CONG German security identification number (WKN) 543 900 ISIN number DE0005439004 Shares outstanding at December 31, 2012 200,005,983 ADR Data1 Ratio (ordinary share: ADR) 1:1 Bloomberg ticker CTTAY Reuters ticker CTTAY.PK ISIN number US2107712000 ADR level Level 1 Exchange OTC Sponsor Deutsche Bank Trust Company Americas 1) As of March 2013. 135 Share & Bond Information Share Price Development vs. Major Stock Indexes 600 (January 1, 1998: €19.80) 500 400 300 200 100 0 11 98 99 00 01 02 03 04 05 06 07 08 09 10 12 13 ------Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Continental DAX MDAX EURO STOXX Automobile & Parts Source: Bloomberg, January 2013. 136 © Continental AG Fact Book 2012 | 74 Share & Bond Information Common Stock 600 Common stock (in € millions) Number of shares (in millions) 512 512 512 500 433 433 414 400 300 200.0 200.0 200.0 200 161.7 169.0 169.0 100 0 2007 2008 2009 2010 2011 2012 137 Share & Bond Information Shareholder Structure Unidentified 15% UK & Ireland 25% Asia & Australia 8% Schaeffler Free Float Group 50.10% 49.90% USA & Canada Germany 17% 13% Germany Rest of Europe France (Retail) 6% Scandinavia 5% 5% 5% Shareholder structure Shareholder structure free float at December 31, 2012 (85% identified) at December 31, 2012 138 © Continental AG Fact Book 2012 | 75 Share & Bond Information Bond Details Bond Data Issuer Conti-Gummi Conti-Gummi Conti-Gummi Conti-Gummi Continental Rubber Finance B.V., Finance B.V., Finance B.V., Finance B.V., of America, Corp., Netherlands1 Netherlands1 Netherlands1 Netherlands1 USA1 Issue Senior Secured Senior Secured Senior Secured Senior Secured Senior Secured Notes Notes Notes Notes Notes Principal amount €750 mn €1,000 mn €625 mn €625 mn $950 mn Offering price 99.0047% 99.3304% 98.8610% 99.2460% 100.0000% Rating at issuance date B1 (Moody’s) B1 (Moody’s) B1 (Moody’s) B1 (Moody’s) Ba3 (Moody’s) B (Standard & B (Standard & B (Standard & B (Standard & BB- (Standard & Poor’s) Poor’s) Poor’s) Poor’s) Poor’s) Current Corporate Rating Ba2 (Moody’s), BB- (Standard & Poor’s) Coupon 8.5% p.a. 7.5% p.a. 6.5% p.a. 7.125% p.a. 4.5% p.a. Issue date July 16, 2010 September 13, 2010 October 5, 2010 October 5, 2010 September 24, 2012 Maturity July 15, 2015 September 15, 2017 January 15, 2016 October 15, 2018 September 15, 2019 Interest payment Semi-annual Jan 15 Semi-annual Mar 15 Semi-annual Jan 15 Semi-annual Apr 15 Semi-annual Mar 15 and Jul 15 and Sept 15 and Jul 15 and Oct 15 and Sept 15 WKN A1AY2A A1A0U3 A1A1P0 A1A1P2 A1G9JJ ISIN DE000A1AY2A0 DE000A1A0U37 DE000A1A1P09 DE000A1A1P25 DE000A1G9JJ0 Denomination €1,000 with min. €1,000 with min. €1,000 with min. €1,000 with min. $1,000 with min. tradable amount tradable amount tradable amount tradable amount tradable amount €50,000 €50,000 €50,000 €50,000 $150,000 1) Guaranteed by Continental AG and certain subsidiaries of Continental AG. 139 Share & Bond Information Development of the Bonds 115 (in €) 110 105 100 95 90 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 8.5% (2015) 6.5% (2016) 7.5% (2017) 7.125% (2018) 4.5% (2019) Source: Bloomberg, January 2013. 140 © Continental AG Fact Book 2012 | 76 Share & Bond Information Development of Continental’s Credit Rating Credit Rating Standard & Poor’s: Before Siemens VDO Investment Grade BBB+ BBB+ BBB BBB BBB- SACP1: BBB- Rating BB BB- Non-investment grade B+ B+ B 05/19/00 10/31/01 08/06/04 11/16/07 09/26/08 01/27/09 08/13/09 05/18/10 07/20/11 05/16/12 Credit Rating Moody‘s: Before Siemens VDO Investment Grade Baa1 Baa1 Baa2 Baa2 Baa3 Rating Ba1 Non-investment grade Ba2 Ba2 Ba3 Ba3 B1 05/19/00 11/15/01 01/04/05 02/26/08 11/07/08 12/18/08 02/23/09 06/02/09 08/14/09 04/05/11 09/28/12 1) SACP = Stand-alone credit profile. 141 Share & Bond Information 10 Year Financial Overview 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Balance sheets Non-current assets in € millions 15,573.5 15,075.5 14,887.9 14,724.6 16,348.4 17,383.9 5,877.9 5,193.8 4,953.9 4,835.0 Current assets in € millions 11,764.4 10,962.9 9,502.6 8,324.6 8,339.5 10,353.7 4,975.1 5,353.9 4,742.0 3,463.5 Total assets in € millions 27,337.9 26,038.4 24,390.5 23,049.2 24,687.9 27,737.6 10,853.0 10,547.7 9,695.9 8,298.5 Shareholders’ equity (excl. non-controlling interests) in € millions 8,767.4 7,146.1 5,859.6 3,772.6 5,265.4 6,583.2 4,470.8 3,574.2 2,706.2 1,983.2 Non-controlling interests in € millions 377.4 397.2 343.3 289.1 264.5 272.9 239.1 220.8 231.0 151.4 Total equity (incl. non-controlling interests) in € millions 9,144.8 7,543.3 6,202.9 4,061.7 5,529.9 6,856.1 4,709.9 3,795.0 2,937.2 2,134.6 Equity ratio in % 33.5 29.0 25.4 17.6 22.4 24.7 43.4 36.0 30.3 23.9 Capital expenditure in € millions 2,019.4 1,711.3 1,296.4 860.1 1,595.2 896.9 805.0 871.8 703.0 625.8 Net indebtedness in € millions 5,319.9 6,772.1 7,317.0 8,895.5 10,483.5 10,856.4 1,181.0 493.2 881.1 1,168.6 Gearing ratio in % 58.2 89.8 118.0 219.0 189.6 158.3 25.1 13.0 30.0 58.9 Income statements Sales in € millions 32,736.2 30,504.9 26,046.9 20,095.7 24,238.7 16,619.4 14,887.0 13,837.2 12,597.4 11,534.4 Share of foreign sales in % 75.4 73.7 72.8 71.0 68.5 69.2 67.6 65.8 66.8 67.0 Cost of sales in % of sales in % 78.4 79.0 77.8 80.0 80.4 75.8 75.3 74.6 75.0 76.5 Research and development expenses in % of sales in % 5.4 5.3 5.6 6.7 6.2 5.0 4.5 4.3 4.2 4.3 Selling expenses in % of sales in % 4.8 4.7 5.0 5.6 4.9 5.5 5.7 6.1 6.2 6.2 Administrative expenses in % of sales in % 2.1 2.1 2.5 3.0 3.2 2.7 3.0 3.1 3.1 3.3 EBITDA in € millions 4,854.6 4,228.0 3,587.6 1,591.2 2,771.4 2,490.6 2,301.5 2,248.9 1,824.6 1,458.3 EBITDA in % of sales in % 14.8 13.9 13.8 7.9 11.4 15.0 15.5 16.3 14.5 12.6 Personnel expenses in € millions 6,905.6 6,354.3 5,891.7 5,199.8 5,746.3 3,652.7 3,175.2 3,054.3 3,011.7 2,681.8 Depreciation and amortization in € millions 1,781.2 1,631.1 1,652.4 2,631.6 3,067.6 814.8 699.6 741.8 667.2 603.1 Net income attributable to the shareholders of the parent in € millions 1,883.5 1,242.2 576.0 -1,649.2 -1,123.5 1,020.6 981.9 929.6 716.2 314.0 Dividend and earnings per share Dividend for the fiscal year in € millions 450.01 300.0 — — — 323.4 293.1 145.9 116.3 70.4 Number of shares at December 31 in millions 200.0 200.0 200.0 169.0 169.0 161.7 146.5 145.9 145.4 135.4 Earnings per share € 9.42 6.21 2.88 -9.76 -6.84 6.79 6.72 6.38 5.19 2.37 Employees Annual average in thousands 169.0 159.7 142.7 133.4 148.4 93.9 81.6 81.1 73.7 66.5 1) Based upon the Executive Board’s proposal for the appropriation of profits. 142 © Continental AG Fact Book 2012 | 77 Topics A.I. Continental at a Glance B.II. Continental Strategy B.III. Continental Megatrends C.IV. Continental Corporation D.V. Market Data VI. Automotive Group VII. Rubber Group VIII. Sustainability at Continental IX. Share & Bond Information X. Glossary 143 Financial Glossary ADR American Depositary Receipt Capex Capital expenditure on property, plant, equipment and software EBIT Earnings Before Interest and Taxes EBITDA EBIT Before Depreciation and Amortization EBIT margin EBIT as a percentage of sales EBITDA margin EBITDA as a percentage of sales FCF Free Cash Flow. We define FCF as cash provided by operating activities minus cash used for investing activities Gearing ratio Represents the net indebtedness divided by total equity, expressed as a percentage ISIN International Securities Identification Number Net indebtedness The net amount of interest-bearing liabilities, investments and cash and cash equivalents as recognized in the balance sheet as well as the market values of the derivative instruments NIAT Net Income Attributable to the shareholders of the parent Operating assets Operating assets are the assets less liabilities as reported in the statement of financial position, without recognizing the net indebtedness, discounted trade bills, deferred tax assets and income tax receivable and payable as well as other financial assets and debt PPA Purchase Price Allocation R, D & E Expenses Research, Development and Engineering Expenses ROCE (average) Return On Capital Employed. We define ROCE as the ratio of EBIT to average operating assets for the fiscal year 144 © Continental AG Fact Book 2012 | 78 Product Glossary ABS Anti-Lock Brake System MAB/MIB Motorcycle Anti-lock Braking System / ACC Adaptive Cruise Control Motorcycle Integrated Brake System ADAS Advanced Driver Assistant System MT Manual Transmission AMT Automated Manual Transmission NVH Noise Vibration Harshness AT Automatic Transmission OTR Off The Road Tires CAGR Compound Annual Growth Rate PCB Printed Curcuit Board C&S Chassis & Safety Division PLT Passenger & Light Truck Tires Division CT ContiTech Division PT Powertrain Division CV Commercial Vehicle PWM Pulse Width Modulation CVT Commercial Vehicle Tires Division RV Recreational Vehicle CVaT Continuous Variable Transmission SSR Self Supporting Runflat Tires ECU Electronic Control Unit SUV Sport Utility Vehicle DCT Double Clutch Transmission TCS Traction Control System EBS Electronic Brake System TPMS Tire Pressure Monitoring System ESC Electronic Stability Control HEV Hybrid Electric Vehicle HMI Human Machine Interface HVAC Heating, Ventilation and Air Conditioning I Interior Division 145 Contact Data Vahrenwalder Str. 9 Gabriele Collatz 30165 Hannover Telephone: +49 511 938 1915 Germany e-mail: [email protected] Rolf Woller Kajsa Hebeler Telephone: +49 511 938 1068 Telephone: +49 511 938 1062 e-mail: [email protected] e-mail: [email protected] Ingrid Kampf Klaus Paesler Telephone: +49 511 938 1163 Telephone: +49 511 938 1316 Fax: +49 511 938 1080 e-mail: [email protected] e-mail: [email protected] www.continental-ir.com Sabine Reese Telephone: +49 511 938 1027 e-mail: [email protected] Michael Saemann Telephone: +49 511 938 1307 e-mail: [email protected] 146 © Continental AG Fact Book 2012 | 79 Financial Calendar 2013 Annual Financial Press Conference March 7, 2013 Q1 Financial Report May 3, 2013 Annual Shareholders’ Meeting May 15, 2013 Half Year Financial Report August 1, 2013 Nine Months Financial Report November 7, 2013 2014 Annual Financial Press Conference March 2014 Annual Shareholders’ Meeting April 25, 2014 Q1 Financial Report May 2014 Half Year Financial Report August 2014 Nine Months Financial Report November 2014 147 © Continental AG Fact Book 2012 | 80