september 2017 - continental ag - homepage · common-rail injection (i njector, ecus, pressure...

http://www.continental-ir.com

Ticker: CONADR-Ticker: CTTAYTwitter: @Continental_IR

September 2017Roadshow Presentation

Roadshow PresentationSeptember 2017EDMR – Equity and Debt Markets Relations 2

AGENDA

Corporation Highlights H1 & Outlook 20171 3IAA Highlights – Interior2 10IAA Highlights – Powertrain3 16IAA Highlights – Chassis & Safety4 21Medium Term Outlook5 25Back-up 33

Roadshow PresentationSeptember 2017EDMR – Equity and Debt Markets Relations

1) Corporation Highlights H1 & Outlook 2017Most Important KPIs for H1 2017

3

1 Before amortization of intangibles from PPA, consolidation and special effects2 Amortization of intangibles from PPA3 Attributable to the shareholders of the parent4 Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM

› Sales up by 10% to €22 bn; organic sales growth at 8%; FX positive at €181 mn

› Adj. EBIT1 down by 2% to €2.3 bn due to €300 mn burden from higher raw material cost in theRubber Group; adj. EBIT1 margin at 10.7%; (PPA2 -€86 mn and special effects +€22 mn)

› NIAT3 amounted to €1.5 bn, down by 9% as net interest result was mainly negatively impactedby FX (about €70 mn) as forecast

› Free cash flow amounted to €292 mn including €121 mn cash outflow for warranty settlementsprovisioned in Q3/2016; free cash flow before acquisitions amounted to €531 mn

› Gearing ratio at 23%; equity ratio at 41%

› Value creation: trailing ROCE4 at 19%

› Other topics:› Order intake in the Automotive Group increased to more than €19.5 bn› Hornschuch contributed in H1 2017 €163 mn to CT sales and -€10 mn to EBIT including PPA of

€7mn, step-up effects of €22 mn; step-up cost will significantly decline in H2 2017


1) Corporation Highlights H1 & Outlook 2017Sales and Adjusted EBIT1 by Quarter

4

FY Sales €39,232 mn

1 Before amortization of intangibles from PPA, consolidation and special effects

H1 Sales €22,033 mnAdj. EBIT1 €2,328 mn

1

FY Sales €40,549 mn


1) Corporation Highlights H1 & Outlook 2017Automotive Group and Rubber Group by Quarter

5


1 1

Automotive Group Rubber Group


1%

2%

2%

Replacementtire volume growth

North America


Europe

Passenger &Light Truck Tiresvolume growth

-1%

6%

10%


North America

Replacementtire volume

growth Europe

CommercialVehicle Tires

volume growth

2.0%

1%

7%

GDP growthadvanced

economies 2017

PC & LT prod.growth Europe

ContiTechorganic sales

growth

0%

3%

9%

PC & LT prod.growth Europe

and North America

PC & LT prod.growth ww

AutomotiveGroup organicsales growth

1) Corporation Highlights H1 & Outlook 2017Growth Profile of the Corporation H1 2017

6

Conti

Market

1 According to IMF definition (WEO Update July 2017)

1

Conti

Market

Conti

Market

Conti

Market


13%

10% 12

%

8%

5%

8%

Q1/14 Q2/14 Q3/14

7

1) Corporation Highlights H1 & Outlook 2017Organic Growth vs. Global Car Production Growth

Organic Sales Growth vs.PC & LT1 Production Growth

Organic Sales Growthby Division

Chassis& Safety

Powertrain Interior

1 Passenger car and light truck

Q1/

17Q

2/17

Q3/

17Q

4/17

Q1/

17Q

2/17

Q3/

17Q

4/17

Q1/

17Q

2/17

Q3/

17Q

4/17


5.97

15.

708

4.83

07.

170

6.47

16.

101

6.36

78.

388

6.89

66.

076

6.45

08.

240

7%

2%

-7%

15%

8% 7%

32%

17%

7%

0% 1%-2%

Q1/

15Q

2/15

Q3/

15Q

4/15

Q1/

16Q

2/16

Q3/

16Q

4/16

Q1/

17E

Q2/

17E

Q3/

17E

Q4/

17E

China chg YOY

4.26

74.

521

4.35

04.

363

4.45

64.

601

4.40

94.

360

4.53

04.

434

4.18

04.

220

1% 2% 4% 3% 4%2% 1% 0% 2%

-4%-5%-3%

Q1/

15Q

2/15

Q3/

15Q

4/15

Q1/

16Q

2/16

Q3/

16Q

4/16

Q1/

17E

Q2/

17E

Q3/

17E

Q4/

17E

North America chg YOY

5.38

25.

408

4.77

55.

172

5.52

65.

876

4.72

0 5.32

05.

840

5.66

04.

880 5.49

0

4% 3%6% 5%

3%

9%

-1%3%

6%

-4%

3% 3%

Q1/

15Q

2/15

Q3/

15Q

4/15

Q1/

16Q

2/16

Q3/

16Q

4/16

Q1/

17E

Q2/

17E

Q3/

17E

Q4/

17E

Europe chg YOY

8

1) Corporation Highlights H1 & Outlook 2017PC & LT Production by Quarter in Major Regions1

1Source: IHS and own estimates, Europe excluding Kazakhstan and Uzbekistan

2015:20.7

2016:21.4

2017E:21.9

Europe (mn units)

2015:17.5

2016:17.8

2017E:17.4

North America (mn units)2015:23.7

2016:27.0

2017E:27.7

China (mn units)


1) Corporation Highlights H1 & Outlook 2017Outlook 2017


Consolidated salesadj. EBIT1 margin

€40.5 bn€4.3 bn

Automotive Groupadj. EBIT1

€24.5 bn€1.6 bn

Rubber Groupadj. EBIT1

€16.1 bn€2.8 bn

Raw materials costimpact

Relief of about€150 mn

2016

Special effects -€70 mn

Net interest resultTax rate

-€117 mn28%

CapexPPA

€2.6 bn€144 mn

Free cash flow beforeacquisitions €2.3 bn

To increase to >€44 bn at constant FX rates>10.5% adj. EBIT1 margin

To increase to ~€26.5 bn at constant FX rates~8.5% adj. EBIT1 margin

To increase to >€17 bn at constant FX rates>15% adj. EBIT1 margin

Raw materials to burden Rubber Groupwith about €450 mn

2017E (as of August 3, 2017)

About -€100 mn

~-€200 mn at constant FX rates<30%

Capex at around 6.5% of salesPPA amortization: ~€200 mn

~€2 bn

9


2) IAA Highlights – InteriorOur Building Blocks of Holistic Connectivity

10

Holistic Human-Machine Interface

CloudConnectivity

MobilityServices


2) IAA Highlights – InteriorHolistic Human-Machine Interface (HMI)

11

3D Display Surface/TouchGesturesAcella Hylite Speakerless Audio

Easier processing of information enables quicker and more intuitive driver response

› Intuitive operation reducesdriver distraction andincreases safety

› Adaptation of surface color inevent of fatigue or dangeroustraffic situation

› Excellent acoustics atconsiderably lower systemweight and with less boxvolume


2) IAA Highlights – InteriorHolistic HMI – Our Cockpit of Tomorrow

12

Dynamic Situational AdaptionVision: Cockpit of the Future Constant Dialogue with the Car– Wordlessly

We create a completely flexible, all-encompassing cockpit

› Retractable steering wheel› Displays replace mirrors› Augmented reality HUD› Morphing interfaces to

reveal or hide displays

› Integrated Interior Platform (IIP)› IIP ECU

› controls all input/outputdevices & mobile devices

› links to other road users,infrastructure and the cloud

› Merging separate domains› Allows the driver to position

information anywhere anddynamically

› Enables personalized cockpit


2) IAA Highlights – InteriorCloud Connectivity

13

Cloud TerminalOver-the-Air (OTA) Updates

Essential requirements for holistically connected vehicles and smart mobility

› Applications that used to be integrated directlyinto the head unit have now moved over to thecloud, where they are processed

› Two-way data service with intelligent antennamodules and gateways as base for theconnected vehicle


2) IAA Highlights – InteriorMobility Services

14

eHorizon Powered by ADASCar Rental of the Future:Remote Cloud Key

Holistic Connectivity Car:eHorizon.weather

Mobility services make driving safer, more efficient and more user-friendly

› Swarm intelligence to seearound corners by supplyingthe digital map in the backendwith up-to-date information

› Highly scalable, secure cloud-managed remote keylessaccess service for cars

› Enhanced safety due to earlywarning of rain, storms or icyroads; weather-dependentroute planning


2) IAA Highlights – InteriorHolistic Connectivity Car

15

>30 million1

connected vehicles by

2017: >50%of produced vehicles are

connected

2020: >250 millionof the vehicles on the road will be

connected

1 Since 1996


3) IAA Highlights – PowertrainICE1 Expected to Grow at Least Until 2025

16

0

20

40

60

80

100

120

1%

10%

18%

30%

38%

1% 4%4%

73%

110110

12%

23%

28%

3%14%

49%

5%10%

2020

102

26%

1% 2% 14%

3%

20252025

2% 2%

2016

93

20%

7%

All Gasoline

EVPHEV

FHEV

All Diesel

MHEV 48VCNG/LPG

Pure DieselPure MPIPure GDI

Light-Vehicle Production Powertrain Split Continental EV Scenario

[mn vehicles]

1 Internal Combustion Engine


3) IAA Highlights – PowertrainOI1 Already Shows Shift to Electronics and Electrification

17

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014 2016 Sales 2016

Order Intake

Mechanics and hydraulics Electronics Electrification

Ʃ €7.3 bnƩ €11.5 bn

1 Order Intake as Lifetime Sales


HEV-relatedbusiness includingextended offering

Gasoline-relatedbusiness

Diesel-relatedbusiness

› Engine managementsystems for diesel piezocommon-rail injection(injector, ECUs,pressure pumps)

› Exhaust aftertreatment

› Sensors and actuators

› Engine managementsystems for solenoiddirect injection (injector,ECU, pressure pumps)



› Turbochargers

› Engine managementsystems (gasoline/diesel)



› Turbochargersand

› 48V solutions(12kW/ 15kW/ 25kW)or

› Plug-in hybrid solutions(incl. thermal components &charging systems)

BEV-relatedbusiness includingextended offering

› High-voltage axle drive

› Power electronics

› Onboard chargingsystems

› Battery managementsystems

› DC/DC converter

› Thermal managementcomponents

100%1 160% 160-360% 400%

1 Value of displayed gasoline content per car is indexed at 100%; all other values read relative to the gasoline content

3) IAA Highlights – PowertrainRelative Value of Continental’s Content in Powertrains1

Well positioned in all key technologies!


3) IAA Highlights – Powertrain48V Technology Enables Intelligent Hybrid Strategies

19

Mild Hybrid High Voltage

48V “cost-optimized” (10-12kW)

48V “CO2-optimized” (15kW)

48V “inner city driving” (25kW)

No clear trend visible, i.e. still highproliferation of unique technical

solutions

€1 billion order intake for 48V already received


3) IAA Highlights – PowertrainSolutions for Charging

20

Inductive Charging(Improved Convenience)

Conductive Charging(Basic Charging)

AllCharge®(Bi-directional Charging)

Battery performance and convenient charging are crucial for the success of electric mobility

› High-voltage battery charging› 11kW power transfer› Including all safety features

On-board charger (3.6 - 11kW)› Re-charge high-voltage batteryfrom power grid

› Unique electronic topologyworldwide charging

‘Universal charger’ for all typesof cable-based chargingstations:› Up to 800V/350kW› Up to 12-times faster chargingat urban AC charging stations

10 min

6h3%

Target=100% fulfilment


Driving Intelligence› Situation analysis› Decision-making› Low-level vehicle control› ADCU (mid-term)

Seat MaterialTailored seat surfaces› Resilient› Easy to clean› Comfortable

LocalizationRobust localization in urban areas› Radar› Wireless infrastructure

beacons

Radar SensingShort range sensor› Object detection› Barrier detection› 4 sensors for 360° view

Camera Sensing› Object detection› Barrier detection› Front sensor cover drive path

Drive Module› One axle drive from

Continental (2018)

4) IAA Highlights – Chassis & SafetySelf Driving Car Project CUbE – Continental Urban Mobility Experience

Tires› ContiEcoContact™ 5

We will become a full system supplier!

Lidar SensingSolid state flash lidar (mid-term)› Object detection› Barrier detection› 4 sensors for 360° view


› Autonomous EmergencyBraking (incl. intersections)

› Lane Keeping Assist› Lane Change Assist› Adaptive Cruise Control

(Anticipatory and Cooperative ACC)

› Traffic Jam Assist› Back-up Assist› Parking Assist

L2Additionally to L2:

› Cruising Chauffeur

› Traffic Jam Chauffeur

› Remote Parking

L3Conditional Automation

Additionally to L3:

› Urban Chauffeur

› Cruising Chauffeur (Enhanced)

› Traffic Jam Chauffeur (Enhanced)

› Automated Parking(e.g. Trained Parking, Valet Parking)

L4/5High/Full AutomationPartially Automation

3x Camera6x Short-range Radar3x Long-range Radar4x Flash Lidar1x Surround View System

(4 cameras; 1x ECU optional)

1x Rear View System2x Mirror View System3x ADCU

1x Camera4x Short-range Radar1x Long-range Radar

1x Surround View System(4 cameras + 1 ECU)

1x Rear View System (option)

1x ADCU (option)

3x Camera6x Short-range Radar3x Long-range Radar1x Flash Lidar1x Surround View System

(4 cameras; 1x ECU optional)

1x Rear View System

2x ADCU

1 Depending on customers and future regulatory requirements.

4) IAA Highlights – Chassis & SafetyAutomated Driving: Function and Sensor Scenarios1


Components Sensors

SystemElectronicsSoftwareIntegration

Environmental Model SoftwareElectronics

23

1 Source: Continental estimates.

Market for Automated Driving ~€17 bn1 by 2020

4) IAA Highlights – Chassis & SafetyMarket for Automated Driving: Three-Layer Model

Recent additions tostrengthen PF

ASC (solid-state flashlidar), Continental ADCU,

Digilens

Elektrobit, Easymile

Quantum Innovation,Baidu, NTT Docomo,BMW/Intel platform

China Unicom


>1,2

00

>1,0

00

816

667

249

240

225

ContiADAS

BoschADAS

DensoADAS

AutolivASP

Mobileye Hella DelphiDriverAssist

ValeoCDA

ZF

2016 2020

24

1 Continental ADAS = Radar, Lidar, Camera and ADCUs2 Bosch PR May 4th, 2017; Bosch has not communicated any future ADAS sales target; Bosch includes ultrasonic in ADAS sensors3 Denso reports ADAS sales as part of “Information and safety systems”; Denso’s ADAS target 03/2021 looks for JPY 200 bn; sales are annualized4 Autoliv active safety products: radar systems, vision and night systems, active seatbelts and brake systems, dynamic spot light and system integration; 2020 target5 Mobileye 2016 sales; company has the target to achieve 1.1 bn USD sales by 20196 Hella: according to Jeffries Research7 Delphi 2016 sales represent company communication from Q2 2016 and target to achieve 1 bn USD sales by 20198 Valeo reports sales for comfort and driving assist only. It includes rain, lighting and ultrasonic sensors in DA sales; it has no official target for future ADAS sales communicated9 ZF has not provided any sales data on its ADAS business

4) IAA Highlights – Chassis & SafetyLeading Position in ADAS

System Manufacturers Component Suppliers

OI2016:

>€3 bn

OI2016:

€3.5 bn

Sales (€ mn)In

cl. E

lekt

robi

t, H

MI a

nd H

uD

n/a n/a

>>2,

000


13,837

26,047

40,550

>50,000

19%

12%

20% >20%

2005 2010 2016 2020E

Sales (mn €) ROCE

25

1Passenger car and light truck

2005–2010:CAGR 3%

2010–2015:CAGR 4%

2015–2020E:CAGR 1-2%

GlobalPC & LT 1

Production

RubberGroup

AutomotiveGroup

5) Medium Term OutlookMore than €50bn in Sales and >20% in ROCE


Thank you!


Disclaimer

› This presentation has been prepared by Continental Aktiengesellschaft solely for the presentation on Deutsche BankIAA Cars 2017 Conference on September 12-13, 2017, in Frankfurt and the subsequent road shows in Germany. Ithas not been independently verified. It does not constitute an offer, invitation or recommendation to purchase orsubscribe for any shares or other securities issued by Continental AG or any subsidiary and neither shall any part of itform the basis of, or be relied upon in connection with, any contract or commitment concerning the purchase or saleof such shares or other securities whatsoever.

› Neither Continental Aktiengesellschaft nor any of its affiliates, advisors or representatives shall have any liabilitywhatsoever (in negligence or otherwise) for any loss that may arise from any use of this presentation or its contentsor otherwise arising in connection with this presentation.

› This presentation includes assumptions, estimates, forecasts and other forward-looking statements, includingstatements about our beliefs and expectations regarding future developments as well as their effect on the results ofContinental. These statements are based on plans, estimates and projections as they are currently available to themanagement of Continental. Therefore, these statements speak only as of the date they are made, and weundertake 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, arerealistic or of the date they are made, no guarantee can be given that the expected developments and effects willactually occur. Many factors may cause the actual development to be materially different from the expectationsexpressed here. Such factors include, for example and without limitation, changes in general economic and businessconditions, fluctuations in currency exchange rates or interest rates, the introduction of competing products, the lackof 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 ofContinental 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 anaccurate or proper definition of regional and/or product markets or market shares of Continental and any of theparticipants in any market.

› Unless otherwise stated, all amounts are shown in millions of euro. Please note that differences may arise as a resultof the use of rounded amounts and percentages.


ContactEquity and Debt Markets Relations

Vahrenwalder Str. 930165 HanoverGermanyE-mail: [email protected]: +49 511 938 1080www.continental-ir.com

Rolf WollerHead of IRPhone: +49 511 938 1068E-mail: [email protected]

Jana CrossAssistant to the Head of IRRoadshow and Conference OrganizationPhone: +49 511 938 1163E-mail: [email protected]

Michael SaemannAnalysts, Institutional Investors and Sustainability InvestorsPhone: +49 511 938 1307E-mail: [email protected]

Klaus PaeslerAnalysts, Institutional Investors, ADR and Private InvestorsPhone: +49 511 938 1316E-mail: [email protected]

Sabine ReeseSustainability, ASM, CMD Organization, IR Website,Capital Market Disclosure RequirementsPhone: +49 511 938 1027E-mail: [email protected]

Marvin KalberlahSocial MediaPhone: +49 511 938 14034E-mail: [email protected]


ContinentalFinancial Calendar2017Preliminary figures for fiscal 2016 January 9, 2017

Annual Financial Press Conference March 2, 2017

Annual Shareholders’ Meeting (incl. key data for Q1 2017) April 28, 2017

Q1 Financial Report May 9, 2017

Half-Year Financial Report August 3, 2017

Nine-Month Financial Report November 9, 2017

2018Preliminary figures for fiscal 2017 January 9, 2018

Annual Financial Press Conference March 2018

Annual Shareholders’ Meeting (incl. key data for Q1 2018) April 27, 2018

Q1 Financial Report May 2018

Half-Year Financial Report August 2018

Nine-Month Financial Report November 2018


ContinentalShare Data/ADR DataShare DataType of share No-par value share

Bloomberg Ticker CON

Reuters Ticker CONG

German Securities Code Number (WKN) 543 900

ISIN DE0005439004

Shares outstanding as at June 30, 2017 200,005,983

ADR DataRatio (ordinary share: ADR) 1:5

Bloomberg Ticker CTTAY

Reuters Ticker CTTAY.PK

ISIN US2107712000

ADR Level Level 1

Trading OTC

Sponsor Deutsche Bank Trust Company Americas


ContinentalBond Data

1 Guaranteed by Continental AG2 Non-contracted rating at date of issuance3 Fitch since October 24, 2016; S&P since May 11, 2016; Moodyʼs since June 30, 20154 Non-contracted rating since February 1, 2014

Issuer Continental AG Continental Rubber ofAmerica, Corp.1 Continental AG Continental AG

Issue Senior Notes Senior Notes Senior Notes Senior Notes

Principal amount €750 mn €500 mn €600 mn €750 mn

Offering price 98.950% 99.739% 99.410% 99.228%

Rating at issuance dateBa2 (Moody’s4)BB (S&P)BB (Fitch2)

BBB (S&P)BBB (Fitch)

BBB+ (S&P)BBB+ (Fitch)

Ba1 (Moody’s4)BB (S&P)BBB (Fitch2)

Current corporationand bond ratings3 BBB+ (Fitch), BBB+ (S&P), Baa1 (Moody’s4)

Coupon 3.0% p.a. 0.5% p.a. 0.0% p.a 3.125% p.a.

Issue date July 16, 2013 November 19, 2015 December 5, 2016 September 9, 2013

Maturity July 16, 2018 February 19, 2019 February 5, 2020 September 9, 2020

Interest payment Semi annualJanuary 16/July 16

AnnualFebruary 19,commencingon February 20, 2017

Not applicable AnnualSeptember 9

WKN A1X24V A1Z7C3 A2DARM A1X3B7

ISIN XS0953199634 DE000A1Z7C39 XS1529561182 XS0969344083

Denomination €1,000 with min. tradableamount €1,000

€1,000 with min. tradableamount €1,000




Back-up

32


1) Corporation Highlights & Outlook 2017Market Outlook for Major Regions

Commercial Vehicle2 Prod. (k units)

CV Repl.4 Tire Market (mn units)

IHS and own estimates

LMC and own estimates

IHS and own estimates

PC & LT1 Production (mn units)

LMC and own estimates

PC & LT Repl.3 Tire Market (mn units)

1 Passenger car and light truck <6t2 Heavy vehicles >6t3 Passenger car & light truck replacement4 Commercial vehicle replacement (radial and biased)

september 2017 - continental ag - homepage · common-rail injection (i njector, ecus, pressure...

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