Continental AG: Strategy & Future Trends

Manfred Wennemer, Chairman of the Executive Board

ANE Congress Prague June 27, 2007 Continental Corporation 2006

Sales € 14.9 billion

EBIT* € 1,601.9 million Net income attributable to the € 981.9 million shareholders of the parent Employees 85,224

*Earnings before interest and taxes

Executive Board 2 / Manfred Wennemer / 2007-07-02 © Continental AG Continental Corporation 2006

Approx. €800 million spent on acquisitions

€630 million transferred to contractual trust arrangement

Approx. €800 million invested

Innovative strength further reinforced with some €680 million for research and development

Executive Board 3 / Manfred Wennemer / 2007-07-02 © Continental AG Continental Maintains Successful Long-Term Strategy

Sales in € millions 1600 EBITA in € millions 16000

1400 14000 1,601.9 1,507.1

14,887.0 1200 12000 x 2,60 13,837.2 x 4,98 10000 1000

8000 800

6000 600

4000 400 5,719.4 5,333.1

2000 200 321.7 269.3 0 0 1996* 1997* 2005** 2006** 1996* 1997* 2005** 2006**

* HGB (German Commercial Code) **IFRS

Executive Board 4 / Manfred Wennemer / 2007-07-02 © Continental AG Continental Strategy – Unique Constellation of Continental

Focus Products Role

Automotive Systems One of the two leaders ESC / ACC worldwide

Interface ƒ TPMS / DDS+ ƒ Transponder Leading into „Fahrverhalten“„Fahrverhalten“ ƒ Active Vibration Control new markets ƒ Air Springs ƒ Hybrid ƒ Telematics

Tires ContiTech Leader ƒ High Performance Tires 5 of 7 business units are „where it counts“ ƒ Winter Tires the leaders in Europe

Leadership in ‘Fahrverhalten’

Executive Board 5 / Manfred Wennemer / 2007-07-02 © Continental AG Our Vision

We make individual mobility safer and more comfortable Performance is our passion Creating value is our driving force

Executive Board 6 / Manfred Wennemer / 2007-07-02 © Continental AG Traffic Fatalities & Number of Passenger Vehicles in Germany

25 50

20 40

15 30

talities in Thousands Safety belt

10 20 ABS Airbag ESC 5 10 Number Traffic of Fa Number of Passenger Vehicles in Millions in Number of Passenger Vehicles

0 0 1995 1970 1980 1985 1975 1990* 2000 2005 1955 1960 1965 1953

* from 1990 incl. new countries; Source: Destatis, KBA

Executive Board 7 / Manfred Wennemer / 2007-07-02 © Continental AG Electronic Stability Control (ESC) Installation Rates

100% North ESC installation rate America 90% of pass. light vehicles being produced in the region 80%

70%

60% Europe

50% Japan 40%

30%

20% NHTSA rule making 10%

0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Executive Board 8 / Manfred Wennemer / 2007-07-02 © Continental AG APIA – Active Passive Integration Approach

ƒ Car-to-Car/ = Automotive Systems current safety competence Car-to-Infrastructure = Motorola’s Automotive Electronics Business current Communication telematics competence ƒ Enhanced Collision = New Automotive Systems additional safety competence Avoidance

ƒ Remote Door Unlock ƒ Car-to-car ƒ Stolen Vehicle Track Compatibility ƒ Traffic Information Adjustments ƒ Navigation ƒ Car-to-Car Communication ƒ Hands-Free Phoning ƒ Man-Machine- ƒ Mobile Device Interface ƒ Crash Type Data ƒ Enhanced Accommodation Adaptation (Rollover) Emergency Rescue ƒ Remote Maintenance

ƒ Comfort Electronics ƒ Brake Assistance ƒ Electronic Control ƒ E-Call ƒ Electronic Brake System ƒ Crash Preparation Units and Sensors ƒ Emergency Rescue ƒ Global Chassis Control for Airbags ƒ Roadside Assistance

Active Safety Crash Passive Safety Normal Driving Pre-Crash In-Crash Post-Crash

Executive Board 9 / Manfred Wennemer / 2007-07-02 © Continental AG Telematics

Consumer Infotainment Outside World

ƒ Portable Devices ƒ GPS Location Info ƒ Networking ƒ OTA programming ƒ Nav map, Info, Traffic ƒ 2 way Communications Cell, DSRC, Mesh Continental Innovation

Passive Safety Components Active Safety Components

ƒ eCall ƒ Radar ƒ Airbag ƒ Camera ƒ Sensor Assy. ƒ Seatbelt Pre-tensioning ƒ Stability Control ƒ Cluster, F/R ƒ Lane Change Warning ƒ Force Feedback ƒ Blind Spot Detection ƒ Pedal

Executive Board 10 / Manfred Wennemer / 2007-07-02 © Continental AG APIA Telematics - Car2X Communication

Continental is working with the Car 2 Car Communication Consortium for standardization www.car-to-car.org

Executive Board 11 / Manfred Wennemer / 2007-07-02 © Continental AG Continental Contributions

Reduction of CO2 emission

Saving Resources

Driving pleasure by improved dynamics

Executive Board 12 / Manfred Wennemer / 2007-07-02 © Continental AG Process Improvements (Per Ton Finished Goods)

100% 100% 100% 100% 100%

80%

72,2% 71,8% 69,4% 60% 60,7%

40%

20%

0% Energy Consumption Water Consumption Waste Production CO2 Emissions

2001 2005

Executive Board 13 / Manfred Wennemer / 2007-07-02 © Continental AG EU CO2 Emission Target for 2012

163 g/km* Motor Technologies: ƒ Powertrain - 33 g/km ƒ Hybrid Drives ƒ Chassis ƒ Low Drag

130 g/km

- 10 g/km Others: ƒ Telematics ƒ Tire Pressure Monitoring ƒ Tire Roll Resistance ƒ Bio Fuel blending 120 g/km**

* average for new cars sold today, according to NEDC ** EU commission target proposal EurActiv Feb. 2nd, 2007

Executive Board 14 / Manfred Wennemer / 2007-07-02 © Continental AG Continental Innovations Reduce CO2 Emissions by 4-5% + Hybrid

Powertrain CO2 Reduction by Hybrid drive incl. respective components Exhaust gas after treatment (hoses) Timing belt in oil for chain substitution (Conti Oil Runner)

Brake System CO2 Reduction by Reduced weight of brake calipers, brake discs, brake actuations, ESC units Regenerative brake system (part of hybrid) Reduction / elimination of residual brake torque

Tires CO2 Reduction by Reduction of weight and rolling resistance Tire pressure monitoring systems (TPMS, DDS etc.)

Miscellaneous CO2 Reduction by Optimized traffic flow through telematics, ACC etc. Power-on-demand units (e.g. electric vacuum pump) Permeation-free hoses for passenger car A/C systems

Executive Board 15 / Manfred Wennemer / 2007-07-02 © Continental AG Hybrid Components & Parallel Hybrid Systems - System Approach

Hybrid Hybrid Hybrid Hybrid Components Module Transmission System

Electric motor Power electronics functions

Regenerative Clutches, Torsion dampers functions brake functions

Transmission functions

Energy storage system functions Engine control unit

Executive Board 16 / Manfred Wennemer / 2007-07-02 © Continental AG Production of all Automobile Manufacturers

in mill. units 30 Focus: Growing Region Asia ASIA 25

20 Western Europe

15 Nafta

10

Germany Focus: 5 Growing Region Eastern Europe Eastern Europe

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Global Insight

Executive Board 17 / Manfred Wennemer / 2007-07-02 © Continental AG in Mill. 30 Focus: Growing Region Asia ASIA 25

20 ConclusionConclusion:: Western Europe

15 Nafta

10 ConsistentConsistent DevelopmentDevelopment

Germany Focus: 5 inin AsiaAsia andand EasternEastern EuropeEuropeGrowing Region Eastern Europe Eastern Europe

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: Global Insight

Executive Board 18 / Manfred Wennemer / 2007-07-02 © Continental AG Definition of ‚Low Cost Car‘

Germany: VW Fox Eastern Europe: China: Cherry QQ Dacia Logan

€10,000 Low Cost Car Mature Market

India: Maruti 800

€5,000 Low Cost Car Emerging Market

€3000 India: Tata (SOP 2008) Western Japan Eastern China India Europe Europe

Executive Board 19 / Manfred Wennemer / 2007-07-02 © Continental AG Global Light Vehicle Production

Light Vehicle Production (in mill. units) 40 2007 2017 35 Low Cost Cars < 10.000 € 30

25

20

15

10

5

Asia Eastern Western North South Asia Eastern Western North South Europe Europe America America Europe Europe America America

Source: Global Insight 03/2007

Executive Board 20 / Manfred Wennemer / 2007-07-02 © Continental AG Objective 2007

5%5% GrowthGrowth withoutwithout acquisitions acquisitions

Executive Board 21 / Manfred Wennemer / 2007-07-02 © Continental AG Production in Eastern Europe

Czech Republic: Otrokovice, Partizanske, Jicin (6,267 employees)

Slovakia: Puchov, Zvolen (1,802 employees)

Romania: Timisoara (50th million tires), Sibiu (5th million control units), Carei (2,754 employees)

Hungary: Budapest, Veszprem, Vac, Mako, Nyiregyhaza, Szeged (4,343 employees)

Executive Board 22 / Manfred Wennemer / 2007-07-02 © Continental AG Production in Asia

China: Lianyungang, Shanghai, Chanchun, Changzhi, Ningbo, Ninghai, Tianjin, Zhangiiagang (3,051 employees)

Japan: Yokohama, Monbetsu, Asahi, Hamakita, Hiroshima (866 employees)

Malaysia: Petaling, Alor Setar, Kulim (3,034 employees)

India: Calcutta, Delhi, Bangalore (928 employees)

Korea: Seoul, Busan (267 employees)

Philippines: Manila, Calamba (1,488 employees)

Taiwan: Tainan (15 employees)

Executive Board 23 / Manfred Wennemer / 2007-07-02 © Continental AG Acquisitions in the Past Months

Acquisition Focus

51% of Matador Rubber Group Eastern Europe

Automotive electronics business from Motorola North America

Roulunds Rubber Group Asia

VTI Technologies Asia, North America

Executive Board 24 / Manfred Wennemer / 2007-07-02 © Continental AG ‘Cost Consciousness’ – Production in Low-Cost Countries

Europe Rest of World

66% 65% 55% 61% 52%52%

54% 56% 52% 45% 44% 41% 39% 36%

29%

26% 22%23% 18% 17% 17%18% 15% 11%

Automotive PLT** CVT** ContiTech* Automotive PLT** CVT** ContiTech* Systems* Systems*

2004 2005 2006

PLT = Passenger and Light Truck Tires * Based on sales CVT= Commercial Vehicle Tires ** Based on units

Executive Board 25 / Manfred Wennemer / 2007-07-02 © Continental AG Outlook 2007

We expect 2007 to see

an increase in consolidated sales of at least 5%.

a further improvement in the operating result.

a positive free cash flow – before potential acquisitions.

In 2007 we intend

to spend approximately 4.6% of sales on research and development.

to invest approximately 6% of sales.

to achieve a better balance sheet structure (acquisitions, organic growth, higher dividend).

Executive Board 26 / Manfred Wennemer / 2007-07-02 © Continental AG Executive Board 27 / Manfred Wennemer / 2007-07-02 © Continental AG