FY 2016 Results Hanover – March 2, 2017 Ticker: CON ADR-Ticker: CTTAY Twitter: @Continental_IR Michael Saemann IR Manager Marvin Kalberlah IR Manager http://www.continental-ir.com
AGENDA 1 Corporation Highlights 3 2 Automotive Group 12 3 Rubber Group 19 4 Indebtedness and Cash Flow 26 5 Outlook 2017 30 6 6 Medium Term Outlook Medium Term Outlook 33 33 28 28 7 Back-up & Fact Sheets 2014-2016 40 FY 2016 Results – March 2, 2017 2 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Most Important KPIs for FY 2016 › Sales up by 3% to €40.5 bn ; organic sales growth at 5%; FX negative at €827 mn › Adj. EBIT 1 down by 1% to €4.3 bn ; adj. EBIT 1 margin at 10.8% (PPA 2 -€144 mn and special effects -€70 mn) › NIAT 3 amounted to €2.8 bn, up by 3% › Free cash flow amounted to €1.8 bn including more than €500 mn cash outflow for acquisitions (mainly Hoosier Racing Tire and Zonar Systems); free cash flow before acquisitions amounted to €2.3 bn › Gearing ratio down to 19%; equity ratio improved to 41% › Value creation: trailing ROCE 4 back to 20.0% despite the impact from isolated events amounting to €480 mn › Other topics: › Order intake: lifetime sales in Automotive increased to more than €35 bn › Hornschuch acquisition closed; it will be consolidated starting March 1, 2017 and contribute about €300 mn to ContiTech sales in 2017 › Dividend to increase by 13% to €4.25 5 for FY 2016 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA 3 Attributable to the shareholders of the parent 4 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM 5 Subject to approval of the Annual Shareholders’ Meeting (ASM) on April 28, 2017 FY 2016 Results – March 2, 2017 3 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Divisional Highlights for FY 2016 › Chassis & Safety: 6.6% adj. EBIT 1 margin (PY: 9.6%); organic sales up by 7.5%; ADAS sales increased to more than €1.2 bn; order intake in ADAS amounted to >€3 bn Automotive Group › Powertrain: 5.5% adj. EBIT 1 margin (PY: 5.7%); organic sales up by 5.1%; adj. EBIT 1 margin before HEV at 7.5%; more than €1.2 bn in life-time sales acquired in HEV business unit › Interior: 7.8% adj. EBIT 1 margin (PY: 10.0%); organic sales increased by 3.3%; organic sales growth held back by supply situation in Japan › Automotive Group: Organic sales increased by 5.3%, exceeding worldwide car production by 2%-points; adj. EBIT 1 margin decreased by 190 bps to 6.7% on €480 mn negative impact from isolated events A › Order intake in the Automotive Group increased to more than €35 bn › Tires: Adj. EBIT 1 margin sustained at high level (21.7% vs. PY 20.1%), benefiting from lower raw material costs , strict cost management and solid price mix (-2%); volumes were up by 6%; FX impacted tire sales Rubber Group negatively by 2%; organic sales up by 4.7% Tire markets: PC & LT tire replacement demand in Europe and North America was up by 2% › ContiTech: Adj. EBIT 1 margin increased by 250 bps to 9.7%; organic sales up by 2.5%; ContiTech over achieved its own target for the adjusted EBIT 1 margin on strict cost management benefitting from the restructuring initiated in 2016; ROCE improved to 13.5% › Rubber Group: Organic sales up by 3.9% and adj. EBIT 1 margin up to 17.8% (PY: 15.8%) 1 Before amortization of intangibles from PPA, consolidation and special effects FY 2016 Results – March 2, 2017 4 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Sales and Adjusted EBIT 1 by Quarter FY Sales €39,232 mn FY Sales €40,549 mn FY Sales €34,506 mn Adj. EBIT 1 €4,369 mn Adj. EBIT 1 €4,341 mn 10,524 10,191 9,984 10,030 10,016 9,851 9,618 9,569 8,918 8,670 8,528 1,303 1,298 8,390 1,233 1,233 1,095 1,095 1,072 1,054 1,010 645 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 1 Sales (mn €) Adj. EBIT (mn €) 1 Before amortization of intangibles from PPA, consolidation and special effects FY 2016 Results – March 2, 2017 5 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Automotive Group and Rubber Group by Quarter Automotive Group Rubber Group 1 Sales (mn €) Adj. EBIT (mn €) 1 Sales (mn €) Adj. EBIT (mn €) 6,370 6,158 5,996 6,005 6,011 5,958 5,912 5,661 5,442 5,176 5,162 5,129 4,164 4,045 4,045 4,022 4,038 3,968 3,852 3,669 3,518 3,487 3,362 3,271 800 733 733 719 719 667 667 644 643 608 570 505 547 534 528 538 456 453 40 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 1 Before amortization of intangibles from PPA, consolidation and special effects FY 2016 Results – March 2, 2017 6 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Growth Profile of the Corporation FY 2016 Conti ContiTech Conti Automotive organic sales 2% Group organic 5% growth sales growth PC & LT prod. PC & LT prod. 3% 3% growth Europe growth ww Market Market GDP growth PC & LT prod. advanced 1.6% growth Europe 2% 1 economies 2016 and North America 1 According to IMF definition (WEO Update January 2017) Conti Conti Passenger & Commercial Light Truck Tires 4% 6% Vehicle Tires volume growth volume growth Replacement Replacement tire volume growth 2% tire volume 3% Market Market Europe growth Europe Replacement Replacement tire volume growth 2% tire volume growth 2% North America North America FY 2016 Results – March 2, 2017 7 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Adjusted EBIT 1 Bridge (mn €) 43 42 32 4,341 - 15 144 › C&S › C&S › C&S €0.2 mn › C&S €1.3 mn − › Powertrain €9.1 mn › Powertrain › Powertrain €2.1 mn › Powertrain €7.6 mn -€1.1 mn › Interior €0.4 mn › Interior › Interior €26.4 mn › Interior › C&S €0.0 mn €0.1 mn 4,096 › Tires €9.3 mn › Tires › Tires › Tires › Tires €0.3 mn €0.3 mn − − › Tires €0.2 mn -€3.9 mn › Powertrain › ContiTech €9.6 mn €11.5 mn › ContiTech › ContiTech €14.5 mn › ContiTech €33.1 mn -€10.2 mn › Interior €3.1 mn €38.4 mn › Tires €10.7 mn › ContiTech €82.7 mn 2 1 Reported PPA Consolidation Asset Restructuring Other Adj. EBIT 3 EBIT 2016 effects impairment costs special 2016 (net) effects 1 Before amortization of intangibles from PPA, consolidation and special effects 2 Amortization of intangibles from PPA 3 Including asset impairment and necessary reversal of impairment losses amounting to €16.4 mn FY 2016 Results – March 2, 2017 8 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Sustainable Value Creation 21.6% 21.2% 21.1% 20.9% 20.8% 20.6% 20.3% 20.0% 20.0% 19.5% 19.3% 18.9% 16,625 16,522 16,536 16,727 17,510 18,198 18,910 19,681 19,767 19,983 20,106 20,453 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2014 2015 2016 1 2 Trailing OA (mn €) Trailing ROCE 1 Trailing operating assets are calculated as assets for the last twelve months (LTM) 2 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by trailing operating assets FY 2016 Results – March 2, 2017 9 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights Maturities for Bonds 1 (mn €) As at December 31, 2016 (mn €) FY 15 FY 16 Gross indebtedness 5,245 4,952 Cash 1,622 2,107 Net indebtedness 3,542 2,798 Available credit lines 3,612 3,888 Total liquidity 5,233 5,995 1,350 750 750 500 2017 2018 2019 2020 2021 Bonds 1 All amounts shown are nominal values FY 2016 Results – March 2, 2017 10 EDMR – Equity and Debt Markets Relations
1) Corporation Highlights EPS, Dividend and Payout Ratio 14.01 13.64 11.88 9.62 9.53 30.3% 27.5% 27.4% 26.0% 23.6% 4.25 3.75 3.25 2.50 2.25 1 2012 2013 2014 2015 2016 2 DPS (€) EPS reported (€) Payout Ratio 1 Dividend subject to approval of the Annual Shareholders’ Meeting (ASM) on April 28, 2017 2 Dividend paid for the respective fiscal year, payout in the subsequent year FY 2016 Results – March 2, 2017 11 EDMR – Equity and Debt Markets Relations
2) Automotive Group Sales and Adj. EBIT 1 by Division Automotive Group Adj. EBIT 1 (mn €) FY 2016 Automotive Group Sales (mn €) FY 2016 8,325 24,496 - 125 3.3% 5.3% 1,632 642 0 7,320 7.8% 6.7% 5.1% 398 8,978 5.5% 592 592 7.5% 7.5% 6.6% Organic sales growth (%) 1 Adj. EBIT margin (%) Chassis Powertrain Interior cons. Automotive Chassis Powertrain Interior cons. Automotive & Safety Group & Safety Group Reported change in sales › Chassis & Safety: › Reported EBITDA: €2,615 mn (10.7% of sales) 6.2% › Powertrain: › Reported EBIT: €1,527 mn (6.2% of sales) 3.6% › Interior: › R&D: €2,431 mn (9.9% of sales) 2.1% › Automotive Group: › Capex: €1,497 mn (6.1% of sales) 3.9% 1 Before amortization of intangibles from PPA, consolidation and special effects FY 2016 Results – March 2, 2017 12 EDMR – Equity and Debt Markets Relations
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