Q1 2019 Results Hanover – May 9, 2019 Ticker: CON ADR-Ticker: CTTAY Twitter: @Continental_IR Wolfgang Schaefer – CFO http://www.continental-ir.com
Agenda 1 Corporation Highlights 3 2 Automotive Group 6 3 Rubber Group 8 4 Indebtedness and Cash Flow 11 5 2019 Outlook 15 6 Back-up and 2017 – Q1 2019 Fact Sheets 25 Q1 2019 Results – May 9, 2019 2 EDMR – Equity and Debt Market Relations
1) Corporation Highlights Most Important KPIs for Q1 2019 Q1/2018 Q1/2019 Delta Comments Sales €11.0 bn €11.0 bn +0.3% Organic growth -2.1%; FX +€186 mn Adj. EBIT 1 €1.1 bn €0.9 bn -17.1% Adj. EBIT 1 margin 9.7% 8.1% -160 bps PPA 2 -€42 mn -€44 mn Special effects -€6 mn -€16 mn Carve-out effects -€12mn NIAT 3 €738 mn €575 mn -22.0% IFRS 16 impact on D&A 5 +€78 mn Free cash flow before acquisitions €186 mn -€579 mn excluding carve-out effects Gearing ratio 12% 23% IFRS 16 impact +930 bps Equity ratio 44% 44% Trailing ROCE 4 19.8% 15.5% -430 bps IFRS 16 impact -30 bps › Order intake in the Automotive Group > €9 bn lifetime sales (book-to-bill ratio of 1.4) › Placement of €500 mn promissory note bank loans, split into maturities of 3 and 5 years, with 76% at a fixed coupon p.a. of 0.68% 6 › Acquisition of Kathrein Automotive GmbH, consolidated since February 1 › Acquisition of Anti-Vibration Systems business from Cooper-Standard Automotive Inc., consolidated since April 1 1 Before amortization of intangibles from PPA, consolidation and special effects Q1 2019 Results – May 9, 2019 2 Amortization of intangibles from PPA 3 3 Attributable to the shareholders of the parent EDMR – Equity and Debt Market Relations 4 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM 5 Depreciation and amortization 6 Weighted Average
1) Corporation Highlights Sales and Adjusted EBIT 1 by Quarter FY Sales €44,009 mn FY Sales €44,404 mn Q1 Sales €11,047 mn Adj. EBIT 1 €884 mn 11,374 11,284 11,230 11,033 11,047 11,000 11,013 10,788 10,693 1,066 884 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 1 Sales (€ mn) Adj. EBIT (€ mn) Q1 2019 Results – May 9, 2019 1 Before amortization of intangibles from PPA, consolidation and special effects 4 EDMR – Equity and Debt Market Relations
1) Corporation Highlights Growth Profile of the Corporation Q1 2019 Conti ContiTech Automotive Group -3% -4% organic sales growth organic sales growth PC & LT prod. growth PC & LT prod. growth -6% -6% Market global global GDP growth advanced PC & LT prod. Europe, 1.8% -7% 1 economies 2019 North America, China 1 According to IMF definition (WEO Update April 2019) Conti Passenger & Light Truck Commercial Vehicle 6% 0% tires volume growth Tires volume growth Replacement tire volume Replacement tire 0% -5% growth Europe volume growth Europe Market Replacement tire volume Replacement tire volume 4% -8% growth North America growth North America Q1 2019 Results – May 9, 2019 5 EDMR – Equity and Debt Market Relations
2) Automotive Group Key Performance Indicators in Q1 2019 Chassis & Safety Automotive Group Adj. EBIT 1 margin Sales (€ mn) Org. growth 6,814 6,978 6,652 6,689 6,411 2,359 -8.4% 6.3 % (-380 bps YoY) › Higher unit sales of ADAS systems could not compensate for lower volumes of the electronic and hydraulic brake systems Powertrain 557 357 Sales (€ mn) Org. growth Adj. EBIT 1 margin 2,006 -0.6% 3.9 % (-180 bps YoY) › Adj. EBIT 1 margin excluding HEV >8%; lower volumes of injectors, Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 pumps and transmission control units 1 Sales (€ mn) Adj. EBIT (€ mn) Interior Sales (€ mn) Org. growth Adj. EBIT 1 margin › Reported EBIT: €321 mn (4.8% of sales) 2,395 -1.4% 5.5 % (-260 bps YoY) › R&D (net): €784 mn (11.7% of sales) › Higher volumes in multimedia and connectivity but lower volumes in › Capex: €393 mn (5.9% of sales) the Instrumentation & Driver HMI business unit Q1 2019 Results – May 9, 2019 1 Before amortization of intangibles from PPA, consolidation and special effects 6 EDMR – Equity and Debt Market Relations
2) Automotive Group Organic Sales Growth vs. PC & LT 1 production in Q1 2019 Growth of organic sales vs. PC & LT 1 production Organic sales growth by division in Q1 2019 8% 6% 5% 2% 0% -1% -1% -2% -3% -4% -5% -6% -8% Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Chassis & Safety Powertrain Interior Automotive Group PC & LT prod. growth ww 1 Passenger car and light truck <6 metric tons Q1 2019 Results – May 9, 2019 7 EDMR – Equity and Debt Market Relations
3) Rubber Group Key Performance Indicators in Q1 2019 Tires Rubber Group Sales (€ mn) Org. growth Adj. EBIT 1 margin 2,831 3.8% 15.1 % (-10 bps YoY) 4,591 › Volumes up by 1.1%; solid price mix at 2.7%; FX impacted tire 4,410 4,390 4,372 4,212 sales positively by 1.2% 535 544 Conti Tech Sales (€ mn) Org. growth Adj. EBIT 1 margin 1,573 -3.2% 7.5 % (-150 bps YoY) Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19 Q3/19 Q4/19 › Air Spring Systems and Industrial Fluid Solutions with higher sales 1 Sales (€ mn) Adj. EBIT (€ mn) › Conveyor Belt Group at same sales level › › OE-related business also impacted by negative production figures Reported EBIT: €510 mn (11.7% of sales) › R&D (net): €119 mn (2.7% of sales) › Capex: €245 mn (5.6% of sales) Q1 2019 Results – May 9, 2019 1 Before amortization of intangibles from PPA, consolidation and special effects 8 EDMR – Equity and Debt Market Relations
3) Rubber Group Tires Sales Transition (€ mn) Q1 2019 +3.8% org. growth 2,831 2,734 65 71 31 2,636 28 +1.2% +2.7% +1.1% +7.4% rep. growth Sales Q1 2018 Volume Price/Mix Sales Q1 2019 FX Cons. Sales Q1 2019 before Cons. and FX Q1 2019 Results – May 9, 2019 9 EDMR – Equity and Debt Market Relations
3) Rubber Group Expected Raw Material Price Development in 2019 Raw material price development 1 2015 - 2019E (U.S. $ cents/kg) Average (Y) Average (Y) Average (Y) Average (Y) Average (Y) › Natural rubber moving upwards again recently, TSR 20: 137 TSR 20: 138 TSR 20: 165 TSR 20: 136 TSR 20: 147 Butadiene: 90 Butadiene: 113 Butadiene: 150 Butadiene: 141 Butadiene: 141 300 expected to rise 8% (yearly-average) in 2019 › Synthetic rubber price stabilized in Q1 2019 on a 170 150 200 low level, but should recover during the course of 145 139 the year and therefore deemed as cost neutral 155 150 › Carbon black, chemicals, steel cord and textiles 100 130 113 above prior year average › Based on these assumptions, raw materials are 0 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 Q4/18 Q1/19 Q2/19E Q3/19E Q4/19E expected to have an effect of about -€50 million in 2019 TSR 20 (U.S. $ cents/kg) Butadiene (U.S. $ cents/kg) 1 Source: Bloomberg and Continental estimates for 2019 1 Source: Bloomberg and Continental estimates for 2019 Q1 2019 Results – May 9, 2019 10 EDMR – Equity and Debt Market Relations
4) Indebtedness and Cash Flow Net Indebtedness Bridge (€ mn) 465 440 284 4,302 129 640 650 396 1,730 1,661 €1,189 mn outflow from change in working capital 23% Gearing 9% ratio 1 Net First-time Capex Acquisitions Change in Change in Change in Depr. and Other CF Net indebtedness adoption of inventories receivables payables amortization indebtedness (FY 2018) IFRS 16 (Q1 2019) 1 According to cash flow statement including intangible assets Q1 2019 Results – May 9, 2019 11 EDMR – Equity and Debt Market Relations
4) Indebtedness and Cash Flow Free Cash Flow Before Acquisitions Excluding Carve-Out Effects (€ mn) in Q1 2019 2018 2018 before acquisitions 2019 2019 before acquisitions -581 -765 634 Carve-out €55 mn 186 -184 53 41 -2 -579 -448 -593 -633 -635 -761 -763 Carve-out €55 mn Cash flow from Cash flow used Free cash flow operating activities for investing activities Q1 2019 Results – May 9, 2019 12 EDMR – Equity and Debt Market Relations
4) Indebtedness and Cash Flow Net Indebtedness and Gearing Ratio 4,302 3,542 2,995 2,858 2,798 2,048 1,984 1,661 27% 23% 19% 17% 17% 13% 12% 9% YE YE YE Q1 H1 9M YE Q1 2015 2016 2017 2018 2019 Gearing ratio Net indebtedness (€ mn) Q1 2019 Results – May 9, 2019 13 EDMR – Equity and Debt Market Relations
4) Indebtedness and Cash Flow Maturities for Bonds 1 (€ mn) As at March 31, 2019 (€ mn) FY 18 Q1 19 Gross indebtedness 4,607 6,310 Cash 2,761 1,817 Net indebtedness 1,661 4,302 Available credit lines 3,504 3,896 Total liquidity 6,266 5,712 1,350 500 2019 2020 2021 2022 2023 Redeemed Bonds Outstanding Bonds 1 All amounts shown are nominal values. 14
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