Continental AG

Quarterly Report • Jun 8, 2016

dbAccess German, Swiss & Austrian Conference Berlin – June 8 - 9, 2016

http://www.continental-ir.com Ticker: CON ADR-Ticker: CTTAY Twitter: @Continental_IR

Wolfgang Schaefer – CFO

AGENDA

1	Automotive Group – Well Positioned for Future Trends	3
2	Tires – Update on Strategy 2025	8
3	ContiTech – To Benefit From Recovery of Oil and Mining Businesses	13
4	Outlook 2020	17
	Back-up: Q1 2016 Results Presentation	24

1) Automotive Group

Digitalization, Electrification and Mobility Services

All medium-term mobility scenarios still foresee tires on vehicles

1 Goldman Sachs Report, Cars 2025: Vol. 3 (Sept 2015) 2 FEV = Full Electric Vehicle

1) Automotive Group Digitalization

Well positioned in all key technologies

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

1) Automotive Group Mobility Services

road events and road conditions

Communication broadens the horizon of the on-board surrounding sensors

Relevant market of more than €57 bn by 2020

1) Automotive Group Order Intake Confirms Mid Term Target

¹ Life-time sales = Sum of expected future sales of all newly received orders

2) Tires

Update on Strategy 2025

Stage 1: 2001 – 2010

Create Value

• › Global footprint and business optimized
• › Strong cost focus
• › Global presence of CVT sustained (SA/APAC)
• › Turnaround of PLT business in NAFTA region succeeded
• › Worldwide technology gap to competition closed

Stage 2: 2011 – 2015

Sustain Value

• › Accelerated global growth (focus BRIC countries)
• › Leverage cost position
• ›Improved technology position to establish among "Best In Class"

Stage 3: 2016 – 2025 Enhance Value

2 1 3

• › Balance the global footprint
• › Benefit from excellent cost position
• › Achieve podium position in technology worldwide
• ›Improve brand awareness further
• › Rank among the top 3 globally

Continuous value creation is our driving force!

2) Tires

Balanced Global Manufacturing Footprint

9

2) Tires Technological Leadership

2025 Achieve podium position in technology worldwide

2) Tires Further Improvement of Brand Awareness

2) Tires Drive Global Growth (mn units)

3) ContiTech Strong Track Record of Acquiring and Integrating Businesses

All sales of acquisitions shown are pro forma sales in the year of the acquisition

¹ Before amortization of intangibles from PPA, consolidation and special effects; reported EBIT margin 7%

3) ContiTech Top 10 Non-Tire Rubber Companies

Source: Company filings; revenues for Gates and Parker Hannifin are estimates

3) ContiTech A Truly Global Player

1 Since 2016 divided in: Mobile Fluid Systems and Industrial Fluid Systems

3) ContiTech

Relevant Market Offers Attractive Growth Opportunities

2020

Balanced portfolio of OE Automotive and Non-OE Automotive businesses

Source: Market data and Continental estimates.

Since 2016, the Fluid Technology business unit has been organized as the Mobile Fluid Systems and Industrial Fluid Systems business units

1 Passenger car and light truck

Thank you!

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Disclaimer

• › This presentation has been prepared by Continental Aktiengesellschaft solely in connection with dbAccess German, Swiss & Austrian Conference from June 8 – 10 in Berlin organized by Deutsche Bank. It has not been independently verified. It does not constitute an offer, invitation or recommendation to purchase or subscribe for any shares or other securities issued by Continental AG or any subsidiary and neither shall any part of it form the basis of, or be relied upon in connection with, any contract or commitment concerning the purchase or sale of such shares or other securities whatsoever.
• › Neither Continental Aktiengesellschaft nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss that may arise from any use of this presentation or its contents or otherwise arising in connection with this presentation.
• › This presentation includes assumptions, estimates, forecasts and other forward-looking statements, including statements about our beliefs and expectations regarding future developments as well as their effect on the results of Continental. These statements are based on plans, estimates and projections as they are currently available to the management of Continental. Therefore, these statements speak only as of the date they are made, and we undertake 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, are realistic as of the date they are made, no guarantee can be given that the expected developments and effects will actually occur. Many factors may cause the actual development to be materially different from the expectations expressed here. Such factors include, for example and without limitation, changes in general economic and business conditions, fluctuations in currency exchange rates or interest rates, the introduction of competing products, the lack of 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 of Continental 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 an accurate or proper definition of regional and/or product markets or market shares of Continental and any of the participants in any market.
• › Unless otherwise stated, all amounts are shown in millions of euro. Please note that differences may arise as a result of the use of rounded amounts and percentages.

Contact Equity and Debt Markets Relations

Vahrenwalder Str. 9 30165 Hanover Germany e-mail: ir@conti.de www.continental-ir.com

Rolf Woller

Head of IR Phone: +49 511 938 1068 e-mail: rolf.woller@conti.de

Ingrid Kampf

Assistant to the Head of IR Roadshow and Conference Organization Phone: +49 511 938 1163 Fax: +49 511 938 1080 e-mail: ingrid.kampf@conti.de

Michael Saemann

Analysts, Institutional Investors and Sustainability Investors Phone: +49 511 938 1307 e-mail: michael.saemann@conti.de

Klaus Paesler

Analysts, Institutional Investors, ADR and Private Investors Phone: +49 511 938 1316 e-mail: klaus.paesler@conti.de

Sabine Reese

Sustainability, ASM, CMD Organization, IR Website, Capital Market Disclosure Requirements Phone: +49 511 938 1027 e-mail: sabine.reese@conti.de

Henry Schniewind Analysts, Institutional Investors Phone: +49 511 938 1062 e-mail: henry.schniewind@conti.de

Marvin Kalberlah Social Media Phone: +49 511 938 14034 e-mail: marvin.kalberlah@conti.de

Continental Financial Calendar

2016

Preliminary figures for the fiscal year 2015	January 11, 2016
Annual Financial Press Conference	March 3, 2016
Annual Shareholders' Meeting (incl. key data for Q1 2016)	April 29, 2016
Q1 Financial Report	May 4, 2016
Half Year Financial Report	August 3, 2016
Nine Month Financial Report	November 10, 2016

2017

Preliminary figures for the fiscal year 2016	January 2017
Annual Financial Press Conference	March 2017
Annual Shareholders' Meeting (incl. key data for Q1 2017)	April 28, 2017
Q1 Financial Report	May 2017
Half Year Financial Report	August 2017
Nine Month Financial Report	November 2017

Continental Share Data / ADR Data

Share Data

Type of share	No-par value share
Bloomberg Ticker	CON
Reuters Ticker	CONG
German Security Identification Number (WKN)	543 900
ISIN Number	DE0005439004
Shares outstanding as at March 31, 2016	200,005,983

ADR Data

Ratio (ordinary share: ADR)	1:5
Bloomberg Ticker	CTTAY
Reuters Ticker	CTTAY.PK
ISIN Number	US2107712000
ADR Level	Level 1
Exchange	OTC
Sponsor	Deutsche Bank Trust Company Americas

Continental Bond Data

Issuer	Conti-Gummi Finance B.V., Netherlands1	Continental AG	Continental AG	Continental Rubber of America, Corp.1
Issue	Senior Notes	Senior Notes	Senior Notes	Senior Notes
Principal amount	€750 mn	€750 mn	€750 mn	€500 mn
Offering price	99.595%	98.950%	99.228%	99.739%
Rating at issuance date	Ba1 (Moody's4) BB (S&P) BBB (Fitch2)	Ba2 (Moody's4) BB (S&P) BB (Fitch2)	Ba1 (Moody's4) BB (S&P) BBB (Fitch2)	BBB (S&P) BBB (Fitch)
Current corporation BBB+ (S&P), Baa1 (Moody's4) BBB (Fitch), and bond ratings3
Coupon	2.5% p.a.	3.0% p.a.	3.125% p.a.	0.5% p.a.
Issue date	September 19, 2013	July 16, 2013	September 9, 2013	November 19, 2015
Maturity	March 20, 2017	July 16, 2018	September 9, 2020	February 19, 2019
Interest payment	Annual March 20	Semi annual January 16/July 16	Annual September 9	Annual February 19, commencing on February 20, 2017
WKN	A1VC6B	A1X24V	A1X3B7	A1Z7C3
ISIN	XS0972719412	XS0953199634	XS0969344083	DE000A1Z7C39
Denomination	€1,000 with min. tradable amount €1,000	€1,000 with min. tradable amount €1,000	€1,000 with min. tradable amount €1,000	€1,000 with min. tradable amount €1,000

¹ Guaranteed by Continental AG ² Non-contracted rating at date of issuance ³ Fitch since July 15, 2013; S&P since December 6, 2013; Moody's since June 30, 2015 ⁴ Non-contracted rating since February 1, 2014

Back-up Q1 2016 Results as of May 4, 2016

1) Corporation Highlights Most Important KPIs Q1 2016

• › Sales up by 3% to €9.9 bn; organic sales growth at 4%; FX negative at €200 mn
• › Adj. EBIT1 up by 8% to €1.1 bn; adj. EBIT1 margin at 11.3% (PPA -€34 mn and special effects -€15 mn)
• › NIAT2 up by 12% to €734 mn
• › Free cash flow amounted to €489 mn including €78 mn cash outflow for acquisitions; free cash flow before acquisitions amounted to €567 mn
• › Gearing ratio down to 23%; equity ratio at 40%
• › Value creation: trailing ROCE3 up by 160 bps to 21.1% YOY

Other topics:

• › Earthquake in Kumamoto Prefecture (Japan) on April 16 severely damaged the production facilities of Renesas Electronics one of the largest semiconductor producers worldwide; most of these semiconductor products are very difficult to substitute; therefore the impact on the global supply chain is currently not reliably assessable
• › Syndicated loan facility: Term loan originally amounting to €1.5 bn paid back in full, revolving credit facility in the amount of €3 bn prolonged until April 2021
• › Order intake in the Automotive Group up to more than €9 bn

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

² Attributable to the shareholders of the parent

³ Trailing ROCE is calculated as reported EBIT for the last twelve months (LTM) divided by average operating assets for the LTM

1) Corporation Highlights Divisional Highlights Q1 2016

Automotive Group

Rubber Group

› Chassis & Safety: 9.8% adj. EBIT1 margin (PY: 10.1%); organic sales up by 4%; ADAS sales up by more than 50% in Q1 2016; solid order intake in VED and ADAS

› Powertrain: 4.0% adj. EBIT1 margin (PY: 5.4%); organic sales up by 1%; adj. EBIT1 margin before HEV at 6.1%; margin down on expiring diesel business and high R&D spending ahead of several SOPs

› Interior: 8.5% adj. EBIT1 margin (PY 9.7%); organic sales increased by 3%; margin decline explained by significant application engineering efforts for new infotainment business

› Automotive Group: Organic sales increased by 3%, worldwide car production up by 1%; adj. EBIT1 margin decreased by 90 bps to 7.6%; R&D expenses increased by €68 mn (+12%) on new programs

› Order intake in the Automotive Group increased to more than €9 bn

› Tires: Adj. EBIT1 margin increased by 250 bps to 21.3% benefitting from lower raw material costs totaling €50 mn in Q1 2016, solid price mix (-2%); volumes were up by 9% in Q1 2016; FX impacted tire sales negatively by 3% in Q1 2016

› Tire markets: PC & LT tire replacement demand in Europe was up by 2%; NAFTA was up by 5% where the introduction of import duties impacted replacement demand in 2015

• › ContiTech: Adj. EBIT1 margin increased by 400 bps to 10.5%; organic sales up by 3%; Veyance Technologies now fully included Consolidation effect for Jan 2016: €93 mn to sales and -€9 mn to EBIT
• › Rubber Group: Organic sales up by 5% and adj. EBIT1 margin up to 17.8% (PY: 14.7%)

1) Corporation Highlights Sales and Adjusted EBIT1 by Quarter

1) Corporation Highlights Automotive Group and Rubber Group by Quarter

1) Corporation Highlights Growth Profile of the Corporation Q1 2016

1) Corporation Highlights Sustainable Value Creation

¹ Trailing operating assets are calculated as assets for the last twelve months

² Trailing ROCE is calculated as reported EBIT for the last twelve months divided by trailing operating assets

1) Corporation Highlights

Maturities for Syndicated Loan and Bonds1 (mn €)

As at March 31, 2016

(mn €)	FY 15	Q1 16
Gross indebtedness	5,245	4,878
Cash	1,622	1,694
Net indebtedness	3,542	3,083
Available credit lines	3,612	3,760

¹ All amounts shown are nominal values ² Any utilization under the Revolving Credit Facility (RCF) has to be shown as short term debt acc. to IFRS although the RCF matures originally in 2020. It has a total volume of €3,000 mn; it has been recently prolonged until 2021

2) Automotive Group Q1 2016: Growth Impacted by Adverse Production Pattern

¹ IHS data as of April 2016 and own estimates

2) Automotive Group Sales and Adj. EBIT1 by Division

Reported change in sales

• › Chassis & Safety: 3.1%
• › Powertrain: -0.7%
• › Interior: 2.4%
• › Automotive Group: 1.7%

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

Automotive Group Sales (mn €) Q1 2016 Automotive Group Adj. EBIT1 (mn €) Q1 2016

• › Reported EBITDA: €699 mn (11.6% of sales)
• › Reported EBIT: €440 mn (7.3% of sales)
• › R&D: €625 mn (10.4% of sales)
• › Capex: €202 mn (3.4% of sales)

2) Automotive Group Q1 2016: Adj. EBIT1 Impacted by High R&D Expenses

• › Sales increased by €99 mn; organic sales growth in Q1 2016 at 2.5% due to slow production start of four out of our five main customers
• › Adj. EBIT1 decreased by €49 mn mainly because of high R&D costs for new car programs
• › Adj. EBIT1 margin at 7.6% (PY: 8.5%)

3) Rubber Group Sales and Adj. EBIT1 by Division

• › Reported EBITDA: €834 mn (21.7% of sales)
• › Reported EBIT: €629 mn (16.3% of sales)
• › R&D: €91 mn (2.4% of sales)
• › Capex: €196 mn (5.1% of sales)

3) Rubber Group

Q1: Strong Volume Growth in Tires; Stabilization of Industry Business

• › Sales increased by €182 mn, driven by strong volume growth in tires and by the stabilization of the industry business in ContiTech, although mining business was still subdued
• › Tire volumes increased by 9%; FX had a negative effect of ~3% on tire sales in Q1 2016 while price mix stood at -2%
• › Adj. EBIT1 increased by €128 mn supported by ~€50 mn positive effect from lower raw material prices

3) Rubber Group

Expected Raw Material Price Development in 2016

• › Natural rubber price (TSR 20) expected to average U.S. \$1.50 in 2016 (unchanged from prior forecast)
• › Synthetic rubber price (butadiene feedstock) forecasted to average U.S. \$0.90 in 2016 (unchanged from prior forecast)
• › Tailwind from lower raw material cost to amount to about €100 mn in 2016 (unchanged from prior forecast)

Raw Material Price Development1 2011 - 2016E (U.S. cents/kg) Average (Y) Average (Y) Average (Y) Average (Y)

¹ Source: Bloomberg and Continental estimates for 2016

4) Indebtedness and Cash Flow Net Indebtedness Bridge (mn €)

4) Indebtedness and Cash Flow Cash Flow Overview

4) Indebtedness and Cash Flow Net Indebtedness and Gearing Ratio

Net indebtedness (mn €) Gearing ratio

5) Outlook 2016 PC & LT Production by Quarter

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

dbAccess German, Swiss & Austrian Conference Berlin – June 8 - 9, 2016

41

5) Outlook 2016 Market Outlook for Major Regions 2016

Commercial Vehicle2 Prod. (k units)

¹ Passenger car and light truck <6t

² Heavy vehicles >6t

³ Passenger car & light truck replacement

⁴ Commercial vehicle replacement (radial and biased)

5) Outlook 2016 Continental Corporation

	2015	2016E
Consolidated sales	€39.2 bn	To increase to ~€41 bn at constant FX rates
adj. EBIT1	€4.5 bn	~11%
Automotive Group	€23.6 bn	~€25 bn
adj. EBIT1	€2.1 bn	>8.5%
Rubber Group	€15.7 bn	>€16 bn
adj. EBIT1	€2.5 bn	>16%
Raw material cost	Relief of about	Raw materials to positively affect Rubber Group
impact	€250 mn	results in 2016 by about €100 mn
Special effects	-€116 mn	About -€100 mn
Net interest result	-€246 mn	<-€250 mn
Tax rate	28.2%	~30%
Capex	€2.2 bn	Capex at around 6% of sales
PPA	€138 mn	PPA amortization: ~€150 mn
Free cash flow before acquisitions	€2.7 bn	At least €2 bn

¹ Before amortization of intangibles from PPA, consolidation (2015 in comparison to 2014) and special effects

Appendix

Corporation Highlights Q1 2016

› Sales	Increase of 2.9% to €9,850.7 mn (PY: €9,568.9 mn); organic sales up 3.6%
› EBITDA	Increase of 7.3% to €1,505.5 mn (PY: €1,403.2 mn)
› EBIT	Increase of 6.4% to €1,040.7 mn (PY: €977.9 mn); Adj. EBIT1 increase to €1,095.0 mn (11.3% adj. EBIT1 margin); PPA2 effect -€34.0 mn; total special effects -€14.9 mn
› NIAT3	Increase of 11.8% to €733.9 mn (PY: €656.7 mn)
› EPS3	EPS of €3.67 (PY: €3.28) EPS before PPA2 before PPA2) €3.79 (PY: €3.40
› Capex	Capex increased to €397.8 mn (PY: €356.8 mn); capex ratio 4.0% of sales; capex to depreciation coverage 0.9x (0.9x ex PPA2)
› R&D	Expenses for research and development increased by 11.4% to €716.1 mn (PY: €643.0 mn); R&D ratio 7.3% of sales (PY: 6.7%)
› Cash flow	Operating cash flow up by €287.2 mn to €970.8 mn; free cash flow €489.0 mn
› Net debt	Net indebtedness down by €458.6 mn to €3,083.3 mn vs. FY 2015; Liquidity and undrawn credit lines amounted to €5,453.8 mn

¹ Before amortization of intangibles from PPA, consolidation and special effects ² Amortization of intangibles from PPA, tax rate of 28% applied for EPS calculation ³ Attributable to the shareholders of the parent

6) Appendix Overview of Volume Development

Units (YOY change)	Q1/14	H1/14	9M/14	FY 14	Q1/15	H1/15	9M/15	FY 15	Q1/16
Market data for PC & LT production
EU	9%	6%	4%	3%	4%	3%	4%	4%	2%
NAFTA	5%	4%	5%	5%	1%	2%	3%	3%	4%
EU and NAFTA combined	7%	5%	5%	4%	3%	3%	3%	3%	3%
Worldwide	5%	4%	4%	3%	2%	1%	1%	1%	1%
Continental
Electronic stability control (ESC)	14%	12%	11%	12%	16%	14%	11%	11%	2%
Anti-lock brake system (ABS)	-13%	-11%	-16%	-19%	-34%	-31%	-30%	-24%	-11%
Boosters	8%	10%	6%	5%	-1%	-4%	-8%	-7%	-3%
Calipers	7%	2%	1%	0%	-1%	0%	-3%	-2%	-8%
Advanced driver assistance systems (ADAS)	53%	50%	47%	47%	46%	53%	59%	58%	51%
Engine electronic control units (ECUs)	7%	6%	6%	4%	-1%	-3%	-5%	-5%	-2%
Injectors	-3%	-3%	-5%	-5%	-8%	-8%	-11%	-11%	-5%
Transmissions	8%	8%	6%	6%	6%	2%	0%	-1%	-1%
Turbochargers	64%	68%	71%	78%	59%	45%	50%	43%	23%
Market data tires
PC & LT replacement tires Europe	6%	5%	4%	2%	-1%	2%	0%	0%	2%
PC & LT replacement tires NAFTA	7%	6%	5%	6%	-6%	0%	1%	1%	5%
Commercial vehicle tires OE Europe	1%	-7%	-4%	-7%	0%	4%	5%	5%	6%
Commercial vehicle tires OE NAFTA	6%	10%	12%	12%	21%	17%	12%	7%	-12%
Commercial vehicle replacement tires Europe	15%	6%	3%	1%	-4%	2%	-1%	0%	2%
Commercial vehicle replacement tires NAFTA	9%	9%	9%	8%	3%	5%	3%	3%	4%
Continental
PC & LT tires	9%	6%	5%	3%	-1%	3%	2%	5%	9%
Commercial vehicle tires	13%	8%	5%	3%	-3%	0%	3%	5%	7%
ContiTech organic sales growth	5%	2%	2%	1%	2%	4%	4%	4%	3%

Key Historical Credit Metrics – IAS 19 (rev. 2011) applied6

(mn €)1	2011	2012	2013	2014	2015	LTM 2016
Statement of Cash Flows
Adjusted EBITDA2	4,247	4,822	5,094	5,318	6,094	6,201
Reported EBITDA	4,228	4,967	5,095	5,134	6,001	6,104
Net cash interest paid	-662	-575	-534	-158	-174	-152
Tax paid	-466	-684	-805	-775	-1,015	-963
Change in net working capital3	-556	564	-4	-207	-107	-69
Other4	-256	-488	-30	175	210	283
Cash flow arising from operating activities	2,289	3,785	3,722	4,168	4,916	5,203
Cash flow arising from investing activities	-1,798	-2,132	-1,904	-2,153	-3,472	-2,999
- thereof capex in PPE and intangibles	-1,813	-2,081	-2,024	-2,110	-2,265	-2,299
Cash flow before financing activities	491	1,653	1,818	2,015	1,444	2,204
Statement of Financial Position
Cash and cash equivalents	1,541	2,397	2,045	3,244	1,622	1,694
Derivative instruments and interest-bearing investments	249	536	303	364	81	101
Total indebtedness	8,562	8,253	6,638	6,432	5,245	4,878
Net indebtedness	6,772	5,320	4,289	2,824	3,542	3,083
Credit Ratios
Net indebtedness / adjusted EBITDA2	1.6x	1.1x	0.8x	0.5x	0.6x	0.5x
Net cash interest paid coverage (ratio)5	6.4x	8.4x	9.5x	33.7x	35.1x	40.9x

¹ Amounts shown may contain rounding differences

² Adjusted EBITDA starting 2011 as defined in syndicated loan but IAS 19 (rev. 2011) not applied in 2012

³ Includes changes in inventories, trade accounts receivable, trade accounts payable and discounted notes

⁴ Includes dividends received, income from at-equity accounted and other investments, incl. impairment and reversal of impairment losses, gains / losses from the disposal of assets, companies and business operations, other non-cash items as well as changes in employee benefits and other provisions and in other assets and liabilities 5 Adjusted EBITDA to net cash interest paid

⁶ Since 2012

Capex, Depreciation and EPS Breakdown Q1 2016

¹ Amortization of intangibles from PPA

² Assuming corporate tax rate of 28%

Automotive Group Financials – Chassis & Safety

• › Sales increased by 3.9% before consolidation and FX effects
• › EBITDA increased by €5.5 mn to €302.8 mn (+1.8%)
• › Adj. EBIT1 increased by €0.5 mn to €215.7 mn (adj. EBIT1 margin 9.8%)
• › EBIT decreased by €1.7 mn to €213.2 mn (EBIT margin 9.7%)
• › PPA effect in Q1 2016: -€0.1 mn
• › No special effects in Q1 2016

¹ Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

Automotive Group Financials – Powertrain

• › Sales increased by 0.7% before consolidation and FX effects
• › EBITDA decreased by €18.4 mn to €158.8 mn (-10.4%)
• › Adj. EBIT1 decreased by €26.2 mn to €72.6 mn (adj. EBIT1 margin 4.0%)
• › EBIT decreased by €30.2 mn to €66.5 mn (EBIT margin 3.7%)
• › PPA effect in Q1 2016: -€2.1 mn
• › Special effects in Q1 2016: -€3.5 mn

Powertrain Q1 2016

¹ Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

Automotive Group Financials – Interior

• › Sales increased by 2.6% before consolidation and FX effects
• › EBITDA decreased by €15.5 mn to €237.4 mn (-6.1%)
• › Adj. EBIT1 decreased by €23.3 mn to €168.0 mn (adj. EBIT1 margin 8.5%)
• › EBIT decreased by €30.8 mn to €160.1 mn (EBIT margin 7.9%)
• › PPA effect in Q1 2016: -€9.0 mn
• › No special effects in Q1 2016

Interior Q1 2016

¹ Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

Rubber Group Financials – Tires

• › Sales increased by 6.7% before consolidation and FX effects
• › EBITDA increased by €78.4 mn to €658.1 mn (+13.5%)
• › Adj. EBIT1 increased by €77.4 mn to €533.0 mn (adj. EBIT1 margin 21.3%)
• › EBIT increased by €76.0 mn to €530.0 mn (EBIT margin 21.1%)
• › PPA effect in Q1 2016: -€1.9 mn
• › No special effects in Q1 2016

Tires Q1 2016

¹ Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

6) Appendix Tires – Passenger and Light Truck Tire Demand

Tires – Commercial Vehicle Tire Demand

Replacement Tire Demand for Truck Tires NAFTA

Rubber Group Financials – ContiTech

• › Sales increased by 2.7% before consolidation and FX effects
• › EBITDA increased by €46.9 mn to €176.1 mn (+36.3%)
• › Adj. EBIT1 increased by €50.7 mn to €133.5 mn (adj. EBIT1 margin 10.5%)
• › EBIT increased by €43.8 mn to €98.7 mn (EBIT margin 7.3%)
• › PPA effect in Q1 2016: -€20.9 mn
• › Special effects in Q1 2016: -€11.4 mn

¹ Before amortization of intangibles from PPA, consolidation and special effects. Refer to Fact Sheets for further details

Fact Sheets 2014 – Q1 2016

6) Fact Sheets Quarterly Sales Analysis

					2015			2016
Sales (mn €)	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	1,878.2	1,868.5	1,823.4	1,944.8	7,514.9	2,136.0	2,142.1	1,999.0	2,172.6	8,449.7	2,201.8
Powertrain	1,579.1	1,598.4	1,638.9	1,677.9	6,494.3	1,826.5	1,819.8	1,657.4	1,764.8	7,068.5	1,813.5
Interior	1,699.1	1,733.9	1,725.4	1,844.1	7,002.5	1,975.2	2,057.0	2,028.2	2,094.4	8,154.8	2,023.0
Tires	2,318.3	2,405.9	2,557.8	2,502.4	9,784.4	2,419.8	2,644.4	2,654.4	2,690.2	10,408.8	2,512.7
ContiTech	973.4	978.6	979.6	999.6	3,931.2	1,268.3	1,418.8	1,330.8	1,349.9	5,367.8	1,359.1
Other / Consolidation	-58.0	-57.3	-55.6	-50.7	-221.6	-56.9	-52.4	-52.2	-56.1	-217.6	-59.4
Continental Corporation	8,390.1	8,528.0	8,669.5	8,918.1	34,505.7	9,568.9	10,029.7	9,617.6	10,015.8	39,232.0	9,850.7

Changes Y-o-Y in %		2015												2016
		Q1	Q2	Q3	Q4	Year	Q1	Q2		Q3
Chassis & Safety		13.7	14.6	9.6	11.7	12.4	3.1
Powertrain		15.7	13.9	1.1	5.2	8.8	-0.7
Interior		16.2	18.6	17.5	13.6	16.5	2.4
		4.4	9.9	3.8	7.5	6.4	3.8
ContiTech		30.3	45.0	35.9	35.0	36.5	7.2
Continental Corporation		14.0	17.6	10.9	12.3	13.7	2.9

6) Fact Sheets Quarterly EBITDA Analysis

			2014				2016
EBITDA (mn €)	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	254.0	242.0	262.0	260.1	1,018.1	297.3	293.4	268.3	301.3	1,160.3	302.8
Powertrain	157.0	125.3	-11.9	172.9	443.3	177.2	183.5	167.3	202.7	730.7	158.8
Interior	223.2	244.5	229.7	248.9	946.3	252.9	299.8	252.4	277.1	1,082.2	237.4
Tires	545.4	591.9	603.5	540.0	2,280.8	579.7	734.6	667.7	622.3	2,604.3	658.1
ContiTech	143.7	132.9	144.7	130.5	551.8	129.2	169.1	159.7	119.2	577.2	176.1
Other / Consolidation	-27.5	-26.6	-24.7	-27.7	-106.5	-33.1	-47.1	-23.7	-49.4	-153.3	-27.7
Continental Corporation	1,295.8	1,310.0	1,203.3	1,324.7	5,133.8	1,403.2	1,633.3	1,491.7	1,473.2	6,001.4	1,505.5

EBITDA margin in %	2014				2015					2016
	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	13.5	13.0	14.4	13.4	13.5	13.9	13.7	13.4	13.9	13.7	13.8
Powertrain	9.9	7.8	-0.7	10.3	6.8	9.7	10.1	10.1	11.5	10.3	8.8
Interior	13.1	14.1	13.3	13.5	13.5	12.8	14.6	12.4	13.2	13.3	11.7
Tires	23.5	24.6	23.6	21.6	23.3	24.0	27.8	25.2	23.1	25.0	26.2
ContiTech	14.8	13.6	14.8	13.1	14.0	10.2	11.9	12.0	8.8	10.8	13.0
Continental Corporation	15.4	15.4	13.9	14.9	14.9	14.7	16.3	15.5	14.7	15.3	15.3

Changes Y-o-Y in %			2015					2016
	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	17.0	21.2	2.4	15.8	14.0	1.8
Powertrain	12.9	46.4	1,505.9	17.2	64.8	-10.4
Interior	13.3	22.6	9.9	11.3	14.4	-6.1
Tires	6.3	24.1	10.6	15.2	14.2	13.5
ContiTech	-10.1	27.2	10.4	-8.7	4.6	36.3
Continental Corporation	8.3	24.7	24.0	11.2	16.9	7.3

6) Fact Sheets Quarterly EBIT Analysis

EBIT (mn €)	2014					2015					2016
	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	172.3	159.3	179.5	169.1	680.2	214.9	209.3	181.5	208.6	814.3	213.2
Powertrain	64.5	32.9	-263.3	69.1	-96.8	96.7	101.0	81.3	116.6	395.6	66.5
Interior	137.8	154.7	144.8	168.6	605.9	190.9	234.1	178.7	200.8	804.5	160.1
Tires	440.7	482.4	486.8	419.5	1,829.4	454.0	604.1	536.5	490.6	2,085.2	530.0
ContiTech	115.5	104.3	115.1	98.4	433.3	54.9	82.3	80.6	-47.2	170.6	98.7
Other / Consolidation	-27.6	-26.7	-25.1	-27.8	-107.2	-33.5	-47.5	-24.0	-49.6	-154.6	-27.8
Continental Corporation	903.2	906.9	637.8	896.9	3,344.8	977.9	1,183.3	1,034.6	919.8	4,115.6	1,040.7

EBIT margin in %	2014					2015					2016
	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	9.2	8.5	9.8	8.7	9.1	10.1	9.8	9.1	9.6	9.6	9.7
Powertrain	4.1	2.1	-16.1	4.1	-1.5	5.3	5.6	4.9	6.6	5.6	3.7
Interior	8.1	8.9	8.4	9.1	8.7	9.7	11.4	8.8	9.6	9.9	7.9
Tires	19.0	20.1	19.0	16.8	18.7	18.8	22.8	20.2	18.2	20.0	21.1
ContiTech	11.9	10.7	11.7	9.8	11.0	4.3	5.8	6.1	-3.5	3.2	7.3
Continental Corporation	10.8	10.6	7.4	10.1	9.7	10.2	11.8	10.8	9.2	10.5	10.6

Changes Y-o-Y in %			2015					2016
	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	24.7	31.4	1.1	23.4	19.7	-0.8
Powertrain	49.9	207.0	130.9	68.7	508.7	-31.2
Interior	38.5	51.3	23.4	19.1	32.8	-16.1
Tires	3.0	25.2	10.2	16.9	14.0	16.7
ContiTech	-52.5	-21.1	-30.0	-148.0	-60.6	79.8
Continental Corporation	8.3	30.5	62.2	2.6	23.0	6.4

6) Fact Sheets Quarterly Analysis of Adjusted EBIT1

			2015			2016
Adj. EBIT 1 (mn €)	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	215.2					215.7
Powertrain	98.8					72.6
Interior	191.3					168.0
Tires	455.6					533.0
ContiTech	82.8					133.5
Other / Consolidation	-33.5					-27.8
Continental Corporation	1,010.2					1,095.0

Adj. EBIT 1 margin in %			2015			2016
	Q1	Q2	Q3	Q4	Year	Q1	Q2	Q3	Q4	Year
Chassis & Safety	10.1					9.8
Powertrain	5.4					4.0
Interior	9.7					8.5
Tires	18.8					21.3
ContiTech	6.5					10.5
Continental Corporation	10.6					11.3

				2016
Changes Y-o-Y in %		Q1	Q2	Q3	Q4
Chassis & Safety		0.2
Powertrain		-26.5
Interior		-12.2
Tires		17.0
ContiTech		61.2
Continental Corporation		8.4

Consolidated Statement of Income

(mn €)	2016 1 - 3	2015 1 - 3	2014 1 - 3
Sales	9,850.7	9,568.9	8,390.1
Cost of sales	-7,249.6	-7,146.1	-6,294.4
Gross margin on sales	2,601.1	2,422.8	2,095.7
Research and development expenses	-716.1	-643.0	-544.1
Selling and logistics expenses	-548.0	-520.9	-430.9
Administrative expenses	-243.7	-214.5	-178.9
Other expenses and income	-69.0	-77.7	-47.0
Income from at-equity accounted investees	16.4	11.2	8.4
Other income from investments	-	0.0	0.0
Earnings before interest and taxes	1,040.7	977.9	903.2
Interest income	24.8	27.8	26.6
Interest expense	-58.6	-83.5	-106.6
Net interest result	-33.8	-55.7	-80.0
Earnings before tax	1,006.9	922.2	823.2
Income tax expense	-255.8	-244.4	-215.6
Net income	751.1	677.8	607.6
Non-controlling interests	-17.2	-21.1	-19.3
Net income attributable to the shareholders of the parent	733.9	656.7	588.3
Basic earnings per share (in €)	3.67	3.28	2.94
Diluted earnings per share (in €)	3.67	3.28	2.94

Consolidated Statement of Financial Position – Assets

in € millions	March 31, 2016	Dec. 31, 2015	March 31, 2015
Goodwill	6,600.9	6,640.6	6,198.8
Other intangible assets	1,298.7	1,336.4	1,194.1
Property, plant and equipment	9,434.9	9,538.9	9,351.5
Investment property	15.8	16.0	17.6
Investments in at-equity accounted investees	354.6	345.8	299.4
Other investments	39.7	14.1	12.5
Deferred tax assets	1,815.0	1,669.7	1,894.2
Defined benefit assets	16.7	18.9	3.1
Long-term derivative instruments and interest-bearing investments	31.5	17.1	289.4
Long-term other financial assets	49.4	47.6	37.3
Long-term other assets	22.8	21.5	21.9
Non-current assets	19,680.0	19,666.6	19,319.8
Inventories	3,523.0	3,360.1	3,607.1
Trade accounts receivable	7,185.1	6,722.9	7,396.7
Short-term other financial assets	465.0	434.7	423.9
Short-term other assets	837.5	803.9	873.7
Income tax receivables	141.8	149.7	131.0
Short-term derivative instruments and interest-bearing investments	69.4	64.3	166.0
Cash and cash equivalents	1,693.8	1,621.5	2,372.3
Assets held for sale	10.3	12.0	53.7
Current assets	13,925.9	13,169.1	15,024.4
Total assets	33,605.9	32,835.7	34,344.2

Starting from the year under review, 2016, the structure of the equity and liabilities side is presented in an adjusted form to increase transparency with regards to employee benefits. All of the following figures from comparative periods are accordingly adjusted.

Consolidated Statement of Financial Position – Total Equity and Liabilities

in € millions	March 31, 2016	Dec. 31, 2015	March 31, 2015
Subscribed capital	512.0	512.0	512.0
Capital reserves	4,155.6	4,155.6	4,155.6
Retained earnings	10,215.8	9,481.8	8,061.0
Other comprehensive income	-1,940.2	-1,363.1	-990.3
Equity attributable to the shareholders of the parent	12,943.2	12,786.3	11,738.3
Non-controlling interests	418.7	427.6	483.5
Total equity	13,361.9	13,213.9	12,221.8
Long-term employee benefits	4,306.4	3,696.5	4,232.3
Deferred tax liabilities	367.6	361.2	256.9
Long-term provisions for other risks and obligations	179.0	171.8	200.6
Long-term indebtedness	2,418.8	3,175.0	4,273.0
Long-term other financial liabilities	45.7	94.9	71.0
Long-term other liabilities	20.7	21.6	14.2
Non-current liabilities	7,338.2	7,521.0	9,048.0
Short-term employee benefits	1,484.2	1,269.4	1,389.2
Trade accounts payable	5,707.3	5,493.8	5,775.2
Income tax payables	736.9	719.8	707.9
Short-term provisions for other risks and obligations	793.4	845.5	827.2
Short-term indebtedness	2,459.2	2,069.8	2,653.4
Short-term other financial liabilities	1,017.5	1,066.4	963.9
Short-term other liabilities	706.8	634.1	737.7
Liabilities held for sale	0.5	2.0	19.9
Current liabilities	12,905.8	12,100.8	13,074.4
Total equity and liabilities	33,605.9	32,835.7	34,344.2

Starting from the year under review, 2016, the structure of the equity and liabilities side is presented in an adjusted form to increase transparency with regards to employee benefits. All of the following figures from comparative periods are accordingly adjusted.

Consolidated Statement of Cash Flows

	January 1 to March 31
in € millions	2016	1 2015
Net income	751.1	677.8
Income tax expense	255.8	244.4
Net interest result	33.8	55.7
EBIT	1,040.7	977.9
Interest paid	-46.4	-71.7
Interest received	5.4	8.7
Income tax paid	-217.4	-269.4
Dividends received	15.0	17.2
Depreciation, amortization, impairment and reversal of impairment losses	464.8	425.3
Income from at-equity accounted and other investments, incl. impairment and reversal of impairment losses	-16.4	-11.2
Gains/losses from the disposal of assets, companies and business operations	-1.3	-6.1
Changes in
inventories	-199.5	-180.9
trade accounts receivable	-575.3	-855.1
trade accounts payable	281.3	504.5
employee benefits and other provisions	241.2	275.1
other assets and liabilities	-21.3	-130.7
Cash flow arising from operating activities	970.8	683.6
Cash flow from the disposal of property, plant and equipment, and intangible assets	4.2	10.2
Capital expenditure on property, plant and equipment, and software	-397.8	-356.8
Capital expenditure on intangible assets from development projects and miscellaneous	-10.5	-17.2
Cash flow from the disposal of companies and business operations	—	-1.7
Acquisition of companies and business operations	-77.7	-589.4
Cash flow arising from investing activities	-481.8	-954.9
Cash flow before financing activities (free cash flow)	489.0	-271.3
Change in indebtedness	-380.0	-768.7
Successive purchases	-2.2	—
Dividends paid to and cash changes from equity transactions with non-controlling interests	-0.7	-1.9
Cash and cash equivalents arising from first consolidation of subsidiaries	0.6	—
Cash flow arising from financing activities	-382.3	-770.6
Change in cash and cash equivalents	106.7	-1,041.9
Cash and cash equivalents at the beginning of the reporting period	1,621.5	3,243.8
Effect of exchange rate changes on cash and cash equivalents	-34.4	170.4
Cash and cash equivalents at the end of the reporting period	1,693.8	2,372.3

1The prior-year comparative figures have been adjusted in accordance with the current structure

6) Fact Sheets Q1 2016 Results Reported and Adjusted (mn €) – by Division

	Chassis & Safety		Powertrain		Interior		Tires		ContiTech		Cons./Corr.		Corporation
	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016
Sales	2,136.0	2,201.8	1,826.5	1,813.5	1,975.2	2,023.0	2,419.8	2,512.7	1,268.3	1,359.1	-56.9	-59.4	9,568.9	9,850.7
	Chassis & Safety		Powertrain		Interior		Tires		ContiTech		Cons./Corr.		Corporation
	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016	2015	2016
EBIT	214.9	213.2	96.7	66.5	190.9	160.1	454.0	530.0	54.9	98.7	-33.5	-27.8	977.9	1,040.7
in % of sales	10.1%	9.7%	5.3%	3.7%	9.7%	7.9%	18.8%	21.1%	4.3%	7.3%			10.2%	10.6%
Amortization of intangible assets from PPA	0.3	0.1	2.1	2.1	0.4	9.0	1.7	1.9	27.6	20.9	0.0	0.0	32.1	34.0
Total special effects	0.0	0.0	0.0	3.5	0.0	0.0	-0.1	0.0	0.3	11.4	0.0	0.0	0.2	14.9
Total consolidation effects	0.0	2.4	0.0	0.5	0.0	-1.1	0.0	1.1	0.0	2.5	0.0	0.0	0.0	5.4
Total consolidation & special effects	0.0	2.4	0.0	4.0	0.0	-1.1	-0.1	1.1	0.3	13.9	0.0	0.0	0.2	20.3
Adjusted operating result (adj. EBIT) 1 1 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects	215.2	215.7	98.8	72.6	191.3	168.0	455.6	533.0	82.8	133.5	-33.5	-27.8	1,010.2	1,095.0
in % of adjusted sales	10.1%	9.8%	5.4%	4.0%	9.7%	8.5%	18.8%	21.3%	6.5%	10.5%			10.6%	11.3%

6) Fact Sheets Q1 2016 Results Reported and Adjusted (mn €) – by Group

	Automotive 2015	2016	Rubber 2015	2016	Cons./Corr. 2015	2016	Corporation 2015	2016
Sales	5,912.1	6,011.0	3,669.3	3,851.7	-12.5	-12.0	9,568.9	9,850.7
	Automotive 2015	2016	Rubber 2015	2016	Cons./Corr. 2015	2016	Corporation 2015	2016
EBIT in % of sales	502.5 8.5%	439.8 7.3%	508.9 13.9%	628.7 16.3%	-33.5	-27.8	977.9 10.2%	1,040.7 10.6%
Amortization of intangible assets from PPA	2.8	11.2	29.3	22.8	0.0	0.0	32.1	34.0
Total special effects	0.0	3.5	0.2	11.4	0.0	0.0	0.2	14.9
Total consolidation effects	0.0	1.8	0.0	3.6	0.0	0.0	0.0	5.4
Total consolidation & special effects 1 Before amortization of intangibles from PPA, changes in the scope of consolidation and special effects	0.0	5.3	0.2	15.0	0.0	0.0	0.2	20.3
Adjusted operating result (adj. EBIT) 1 in % of adjusted sales	505.3 8.5%	456.3 7.6%	538.4 14.7%	666.5 17.8%	-33.5	-27.8	1,010.2 10.6%	1,095.0 11.3%

Source: Based on publicly available data

6) Fact Sheets Continental's Credit Rating

³ Contracted rating since November 7, 2013

EDMR – Equity and Debt Markets Relations 68

References Useful Links

Continental Investor Relations website	http://www.continental-ir.com
Annual and interim reports	http://www.continental corporation.com/www/portal_com_en/themes/ir/financial_reports/
2015 Fact Book	http://www.continental corporation.com/www/portal_com_en/themes/ir/financial_reports/
Investor Relations events and presentations	http://www.continental-corporation.com/www/portal_com_en/themes/ir/events/
Sustainability at Continental (presentation and fact sheet for investors)	http://www.continental-ir.com
Corporate Social Responsibility	http://www.continental-sustainability.com
Corporate Governance Principles	http://www.continental corporation.com/www/portal_com_en/themes/ir/corporate_governance/
Continental share	http://www.continental-corporation.com/www/portal_com_en/themes/ir/share/
Continental bonds and rating	http://www.continental-corporation.com/www/portal_com_en/themes/ir/bonds/
Continental IR mobile website	http://continental.ir-portal.de