Continental Ag · XETR:CON
Continental — UniCredit Automotive Credit Conference 2021
39 slides from Continental's conference presentation, Jun 16, 2021
Slide 1: Continental AG – UniCredit Automotive Credit Conference
Bitte decken Sie die schraffierte Fläche mit einem Bild ab. Please cover the shaded area with a picture. (24,4 x 7,6 cm) Continental AG UniCredit Automotive Credit Conference, June 16, 2021 Ticker: CON ADR-Ticker: CTTAY http://www.continental-ir.com Stefan Scholz, Group Treasurer
Slide 2: Agenda
Agenda Looking Back on the Last Twelve Months 3 Q1 2021 Results 4 2021 Outlook 8 Continental’s Strategy 11 Back-up 21 Space for Sender Information Confidential UniCredit Automotive Credit Conference, June 16, 2021 2
Slide 3: Premium for Continental Risk Back On a Low Level
1 | Looking Back on the Last Twelve Months Premium for Continental Risk Back On a Low Level Our Priorities › Health and safety of our employees › Sustain solid financial position › Strict cost reduction discipline Premium in bps per annum › Fixed costs (excl. D&A) FY 2020 down by 8% Y-o-Y › Capex FY
Slide 4: Sales and Earnings Performance of Our Group Sectors
2 | Q1 2021 Results Sales and Earnings Performance of Our Group Sectors Sales (€ mn) Adjusted EBIT1 (€ mn) Automotive Rubber Powertrain Automotive Rubber Powertrain Technologies Technologies Technologies Technologies Technologies Technologies 3.4% 11.7% 4,180 4,087 4,235 3,972 14.5% 12.8% 615 9.6% 1
Slide 5: Free Cash Flow Driven by Higher EBIT and Lower Capex
2 | Q1 2021 Results Free Cash Flow Driven by Higher EBIT and Lower Capex Cash Flow Q1 2021 (€ mn) Operating Investing Free cash flow before Operating Cash Flow Carve-out effects Acquisitions and divestments acquisitions, divestments, › Solid result driven by strong EBIT and and carve-out effects dis
Slide 6: Financial Position Remains Solid
2 | Q1 2021 Results Financial Position Remains Solid Liquidity and bond maturities2 (€ mn) Credit Lines Total liquidity available Bond maturities1 › Short-term credit line of €3 bn until May 2021 10,929 › Availability of the credit facilities is not subject to financial covenants or ratings triggers
Slide 7: Group Financial Ratio Improved During Q1 2021
2 | Q1 2021 Results Group Financial Ratio Improved During Q1 2021 Leverage ratio1 Gearing ratio2 Equity ratio3 Continental’s current credit rating is: Continental’s targets: › Fitch (since April 20, 2020): BBB, outlook stable › Rating: BBB / BBB+ › S&P (since March 30, 2020): BBB, outlook negative ›
Slide 8: Expectations for Market Development Unchanged
3 | 2021 Outlook Expectations for Market Development Unchanged Vehicle Production Replacement Tires Passenger Cars Commercial Passenger Cars Commercial & Light Trucks Vehicles & Light Trucks Vehicles Q1 2021 2021E Q1 2021 2021E Q1 2021 2021E Q1 2021 2021E Europe ~ 0% 10% to 13% ~ 20% 8% to 12% ~ 9%
Slide 9: Outlook Continental Group (Continuing Operations Only)
3 | 2021 Outlook Outlook Continental Group (Continuing Operations Only) 2021E Consolidated sales Around €32.5 bn – €34.5 bn Adj. EBIT1 margin Around 6% – 7% Automotive Technologies sales Around €16 bn – €17 bn Adj. EBIT1 margin Around 1% – 2% Rubber Technologies sales Around €16.5 bn – €17.5 bn Adj.
Slide 10: Spin-off of Vitesco Technologies Planned for September 2021
3 | 2021 Outlook Spin-off of Vitesco Technologies Planned for September 2021 1 Continental Group i Group Sectors Automotive Technologies Rubber Technologies Vehicle Autonomous Networking Business Areas Mobility and Tires ContiTech Vitesco Technologies and Safety Information Space for Sender Informat
Slide 11: Emerge as a Winner of the Transformation
4 | Continental’s Strategy Emerge as a Winner of the Transformation Strengthen operational Differentiate Turn change performance our portfolio into opportunity › Right-size cost structure › Win in growth businesses › Embrace sustainability › Commitment to efficiency › Manage value businesses › Focus
Slide 12: Implementation of Structural Measures On Track
4 | Continental’s Strategy Implementation of Structural Measures On Track Targeted annual gross cost savings (€ bn) Program details › Includes footprint, structures > 1.0 and processes ~ 15% > 0.8 › Contributions from central functions and business units ~ 25% › Around 30,000 jobs Excl. Powertrain w
Slide 13: Differentiation of Our Portfolio Between Growth and Value
4 | Continental’s Strategy Differentiation of Our Portfolio Between Growth and Value Automotive Technologies Tires ContiTech Growth Software and Architecture Fleet Smart Autonomous Smart services, solutions › Fast-growing markets systems and mobility mobility selective beyond › Outperformance driven
Slide 14: Utilize Position & Partnerships to Expand Full Stack Capabilities
4 | Continental’s Strategy Utilize Position & Partnerships to Expand Full Stack Capabilities Continental’s Full Stack Today Continental’s Full Stack in Mid-term Capability for L1 & L2 & L2 Performance/Premium Capability for L3 and beyond Cloud Enablers Maps & Localization Investments in Simulation o
Slide 15: New High-Performance Computer (HPC) Awards for Continental
4 | Continental’s Strategy New High-Performance Computer (HPC) Awards for Continental HPC projects won and in acquisition (#) Total order intake so far: ~€5 bn Lifetime Sales ICAS 3D Cluster SOP 2020 2021 2022 2023 2024 2025 Awarded to ADAS Safety & Motion Body Cockpit Cross Domain Continental Space
Slide 16: First Major Order for a Pillar-to-pillar Display
4 | Continental’s Strategy May 27, 2021: First Major Order for a Pillar-to-pillar Display (From a global vehicle manufacturer) SOP: 2024 Space for Sender Information Confidential UniCredit Automotive Credit Conference, June 16, 2021 16
Slide 17: Our Pathway for Full Carbon Neutrality
4 | Continental’s Strategy Sustainability: Our Pathway for Full Carbon Neutrality along Our Entire Value Chain 2020 Entirely green purchased electricity 2022 Entirely Carbon neutral business with emission-free vehicles 2040 Entirely Carbon neutral own operations 2050 at the latest 100% carbon neutra
Slide 18: Space for Sender Information Confidential UniCredit Automotive Credit Conference, June 16, 2021
Space for Sender Information Confidential UniCredit Automotive Credit Conference, June 16, 2021 18
Slide 19: Space for Sender Information Confidential
Space for Sender Information Confidential
Slide 20: Disclaimer
Disclaimer › This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the virtual UniCredit Automotive Credit Conference on June 16, 2020. It has not been independently verified. It does not constitute an offer, invitation or recommendation to purchase or subsc
Slide 21: Back-up
Back-up Space for Sender Information Confidential UniCredit Automotive Credit Conference, June 16, 2021 21
Slide 22: Separation of AMS Into Separate Business Areas Supports Portfolio Strategy
Back-up Separation of AMS1 Into Separate Business Areas Supports Portfolio Strategy Strategy Financials €1.9 bn €2.0 bn Focus: Growth €1.7 bn €1.6 bn › Value-accretive outperformance €1.2 bn Autonomous › Long-term profitability €0.9 bn ~10% ~8% ~8% ~9% Mobility › Innovation to expand market position
Slide 23: Sizable Mid-term Growth Opportunities from Higher AD Levels
Back-up Sizable Mid-term Growth Opportunities from Higher AD1 Levels Growing Quote Pipeline Drivers Orders2 by year of award Awarded to Continental Continental’s addressable content per vehicle › L2: > €200, predominately sensors 2018 – 2020 Content growth › L2 Performance/Premium: > 2-4x L2, includ
Slide 24: Q1 2021 Results: Review and Current Priorities
Back-up Q1 2021 Results: Review and Current Priorities Review Q1 2021 Current priorities Group Operational topics › (+) Approvals for Vitesco Technologies spin-off › Continued shortage of semiconductors › (+) Continued discipline in cost and working-capital management › Dealing with increasing costs
Slide 25: Q1 2021 Results: Most Important KPIs
Back-up Q1 2021 Results: Most Important KPIs Q1 2020 Q1 2021 Change Comments Sales €9.9 bn €10.3 bn +3.5% Organic growth 8.6%; FX -€426 mn Adjusted EBIT1 €433 mn €834 mn5 +€401 mn Excluding IFRS 5 effect: Q1/21 €812 mn Adjusted EBIT1 margin 4.4% 8.1%5 +370 bps Excluding IFRS 5 effect: Q1/21 7.9% PPA
Slide 26: Regional Production vs. Sales Growth by Group Sectors
Back-up Q1 2021 Results: Regional Production vs. Sales Growth by Group Sectors Europe1 North America1 China1 Worldwide1 ∆ Y-o-Y in % ∆ Y-o-Y in % ∆ Y-o-Y in % ∆ Y-o-Y in % 25 25 80 25 70 20 20 20 60 ~+4%-pts 15 15 50 15 10 40 10 10 5 30 ~-2%-pts 5 20 5 0 10 0 -5 0 0 -5 -10 -10 -5 Europe: share of sa
Slide 27: Autonomous Mobility and Safety
Back-up Q1 2021 Results: Autonomous Mobility and Safety Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 3.8% › Impact from FX: -4.1% 2,060 2,035 › Growth in China overcompensated decline in North America › Highest sales growth in Passive Safety and Sensorics Adjusted EBIT1 › Margin improvement from growth
Slide 28: Vehicle Networking and Information
Back-up Q1 2021 Results: Vehicle Networking and Information Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 3.7% › Impact from FX: -3.8% 2,135 2,081 › Strong demand in China and South Korea, while Europe remains soft › Outperformance dampened by decline in analog instrument clusters Adjusted EBIT1 › Margin
Slide 29: Tires
Back-up Q1 2021 Results: Tires Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 15.8% 2,743 › Impact from FX: -5.4% › Volume: +9.2% 2,484 › Recovery led by Chinese and North American replacement markets as well as truck business 455 16.6% › Price/mix: +6.7% › Strong mix contribution and replacement pricing
Slide 30: ContiTech
Back-up Q1 2021 Results: ContiTech Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 4.5% › Impact from FX: -4.3% 1,521 1,521 › OE: Volume recovery in Mobile Fluid Systems and Surface Solutions › Industrial and Aftermarket: Continued strength in Surface Solutions and Advanced Dynamics Solutions › Strongest r
Slide 31: Powertrain
Back-up Q1 2021 Results: Powertrain Sales (€ mn) Adjusted EBIT1 (€ mn) Sales 12.8% › Impact from FX: -3.5% 1,998 › Electrification Technology sales of €157 mn 1,829 (€95 mn in Q1 2020) mainly driven by high- voltage axle drives and power electronics especially in Europe › Strong development in Sensi
Slide 32: Providing the Framework to Turn Change into Opportunities
Back-up Sustainability: Providing the Framework to Turn Change into Opportunities Our Key Ambitions + 8 Essentials By 2050 at the latest, we and our value chain partners are striving for: Good working conditions 100% Carbon Neutrality along our entire value chain Green and safe factories Innovations
Slide 33: Key Historical Credit Metrics
Back-up Key Historical Credit Metrics (€ mn)1 2017 2018 2019 5 2020 LTM Statement of Cash Flows Adjusted EBITDA 6,701 6,190 5,837 4,030 4,389 Reported EBITDA 6,679 6,236 4,977 3,034 3,276 Net cash interest paid -105 -91 -83 -137 -150 Tax paid -1,122 -848 -866 -886 -769 Change in net working capital2
Slide 34: Relevant Bonds
Back-up Relevant Bonds Continental AG Conti-Gummi Finance Conti-Gummi Finance Continental AG Continental AG Issuer B.V., Netherlands1 B.V., Netherlands1 Issue Senior Notes Principal €500 mn €750 mn €625 mn €600 mn €750 mn amount Offering price 99.804% 99.559% 99.589% 99.802% 98.791% Rating Baa1 (Moo
Slide 35: Capex, Depreciation and Earnings per Share – Breakdown for Q1 2021
Back-up Capex, Depreciation and Earnings per Share – Breakdown for Q1 2021 Capex, Depreciation and PPA1 (€ mn) EPS excl. PPA1,2 (€) 0.15 676 642 475 292 4.8% 2.8% 2.24 2.39 1 48 41 Reported EPS PPA per EPS excl. 2 share after tax PPA1,2 2020 2021 ■ Capex (PPE), percentage of sales | ■ Depreciation,
Slide 36: Continental’s Credit Rating
Back-up Continental’s Credit Rating S&P, Fitch / Moody’s BBB+ / Baa1 Investment grade BBB / Baa2 BBB- / Baa3 BB+ / Ba1 Non-investment BB / Ba2 grade Before BB- / Ba3 Siemens VDO B+ / B1 B / B2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Standard & Poor’s1 Moody’s2
Slide 37: Useful Links
Back-up Useful Links Continental Investor Relations website www.continental-ir.com Annual and interim reports www.continental-corporation.com/en/investors/reports Fact Book / Investor Presentation www.continental.com/en/investors/reports Investor Relations www.continental.com/en/investors/events-and
Slide 38: Financial Calendar
Back-up Financial Calendar 2021 Annual Financial Press Conference March 9, 2021 Annual Shareholders´ Meeting April 29, 2021 Q1 Quarterly Statement May 6, 2021 Half-Year Financial Report August 5, 2021 Nine-Month Quarterly Statement November 10, 2021 Capital Market Days (Vitesco Technologies) March 2
Slide 39: Contact
Contact Investor Relations Vahrenwalder Str. 9 e-mail: [email protected] 30165 Hanover Fax: +49 511 938-1080 Germany www.continental-ir.com Bernard Wang Phone: +49 511 938-1068 Michael Saemann Phone: +49 511 938-1307 Head of IR e-mail: [email protected] Analysts, Institutional Investors and e-mail: mi
Continental — UniCredit Automotive Credit Conference 2021 on 6ix