Continental AG: After a Weak Start: Continental Confirms Its Full-year
Outlook

EQS-News: Continental AG / Key word(s): Quarterly / Interim
Statement/Quarter Results
Continental AG: After a Weak Start: Continental Confirms Its Full-year
Outlook

08.05.2024 / 07:30 CET/CEST
The issuer is solely responsible for the content of this announcement.

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  * Consolidated sales of EUR9.8 billion (Q1 2023: EUR10.3 billion, -5.0
    percent)

* Adjusted EBIT of EUR196 million (Q1 2023: EUR574 million, -65.8 percent)

* Adjusted EBIT margin of 2.0 percent (Q1 2023: 5.6 percent)

* Net income of -EUR53 million (Q1 2023: EUR382 million, -113.9 percent)

  * Adjusted free cash flow of -EUR1.1 billion (Q1 2023: -EUR949 million, -14.4
    percent)

  * CEO Nikolai Setzer: 'We are pursuing our goals resolutely and
    sustainably. We are on track with the implementation of our measures to
    achieve our mid-term targets. And in 2024 we will be taking another step
    forward'

  * CFO Katja Garcia Vila: 'Despite the weak first quarter, we see
    sufficient potential for improvement across all group sectors, which is
    why we are confirming our outlook for fiscal 2024'

  * Automotive: start of production of new high-performance computer in
    China

* Tires: serial test winner

Hanover, May 8, 2024. After a weak first quarter in 2024, Continental
expects earnings to improve as the year progresses - particularly in the
second half of the year. Based on this, the DAX company is confirming its
full-year outlook, as already announced together with the publication of its
key figures for the first quarter on April 16, 2024. Overall, Continental
still anticipates consolidated sales for 2024 of around EUR41.0 billion to
EUR44.0 billion and an adjusted EBIT margin of around 6.0 to 7.0 percent.

'We are pursuing our goals resolutely and sustainably. We are on track with
the implementation of our measures to achieve our mid-term targets. And in
2024 we will be taking a another step forward. The first quarter will be our
weakest this year. As the year progresses, we will see improvements across
the three group sectors Automotive, Tires and ContiTech,' Continental CEO
Nikolai Setzer said in Hanover, Germany, on Wednesday.

Consolidated sales in the first quarter of EUR9.8 billion - adjusted EBIT
margin of 2.0 percent

In the first quarter of 2024, Continental achieved consolidated sales of
EUR9.8 billion (Q1 2023: EUR10.3 billion, -5.0 percent). Its adjusted operating
result was EUR196 million (Q1 2023: EUR574 million, -65.8 percent),
corresponding to an adjusted EBIT margin of 2.0 percent (Q1 2023: 5.6
percent).

Net income in the first quarter amounted to -EUR53 million (Q1 2023: EUR382
million,
-113.9 percent). Adjusted free cash flow was -EUR1.1 billion (Q1 2023: -EUR949
million).

'As announced, adjusted free cash flow in the first quarter was heavily
impacted by the EUR500 million payment for the buyback of shares in ContiTech
AG. For the year as a whole, we still anticipate adjusted free cash flow of
around EUR0.7 billion to EUR1.1 billion,' said Continental CFO Katja Garcia
Vila, adding: 'Despite the weak first quarter, we see sufficient potential
for improvement across all group sectors, which is why we are confirming our
outlook for fiscal 2024.'

Slight decline in automotive production in the first quarter of 2024

At the start of the year, the global production of passenger cars and light
commercial vehicles recorded a slight decline year-on-year, falling by
around 1 percent compared with the first quarter of 2023 to 21.2 million
units (Q1 2023: 21.4 million units).

Vehicle production in Continental's core market of Europe, in particular,
was weaker from January to March 2024 than in the prior-year period, at
around 4.4 million units (-3 percent). In North America, production rose
slightly to around 3.9 million vehicles (+1 percent). China had a good start
to the year, producing around 6.1 million vehicles in the first quarter of
2024, up 4 percent year-on-year.

For the year as a whole, Continental still expects global passenger car and
light commercial vehicle production to be roughly on par with the previous
year, trending in a range of -1 to +1 percent.

Key figures for the Continental Group

    EUR millions                               January 1 to
                                               March 31
                                       2024          2023    in %
    Sales                                           9,788   10,306   -5.0
    Adjusted sales1                                 9,761   10,286   -5.1
    Adjusted operating result (adjusted               196      574  -65.-
    EBIT)2                                                              8
    in % of adjusted sales                            2.0      5.6

    Net income attributable to the                    -53      382  -113-
    shareholders of the parent                                         .9
    Basic earnings per share in EUR                   -0.27     1.91  -113-
                                                                       .9
    Diluted earnings per share in EUR                 -0.27     1.91  -113-
                                                                       .9

    Research and development expenses (net)           825      791    4.4
    in % of sales                                     8.4      7.7
    Capital expenditure3                              432      429    0.8
    in % of sales                                     4.4      4.2

    Adjusted free cash flow                        -1,086     -949  -14.-
                                                                        4

    Net indebtedness as at March 31                 5,205    5,539   -6.0
    Gearing ratio in %                               36.4     39.4

Number of employees4 200,888 202,929 -1.0

1 Before changes in the scope of consolidation.

2 Before amortization of intangible assets from purchase price allocation
(PPA), changes in the scope of consolidation, and special effects.

3 Capital expenditure on property, plant and equipment, and software.

4 Excluding trainees.

Automotive: start of production of another high-performance computer

In the Automotive group sector, sales decreased by 4.0 percent to EUR4.8
billion (Q1 2023: EUR5.0 billion). Its adjusted EBIT margin was down
year-on-year at -4.3 percent (Q1 2023: 0.8 percent). This was mainly due to
lower production volumes, especially in Europe, as well as pending
agreements from price negotiations with automotive manufacturers. Delayed
product launches, weak business in North America and exchange-rate effects
also had a negative impact, while salary increases hampered profitability.
As the year progresses, price adjustments, initial savings from cost-cutting
measures and efficiency improvements will lead to an increase in earnings.

Continental technologies continue to be in high demand. The first quarter of
2024, for instance, saw the start of production of another high-performance
computer for a Chinese automotive manufacturer. This high-performance
computer acts as the vehicle's central nervous system, integrating features
for body and vehicle control, as well as data communication management,
over-the-air updates, and torque and thermal management. It also
communicates with features from other vehicle domains, such as those for
assisted and automated driving and from the cockpit.

Furthermore, Continental has received numerous orders for future
technologies, including an order of over EUR1.5 billion for its radar sensors.
Here, a long-range radar with focused sensor systems for maximum range and
precision will be combined with multiple surround radar sensors. All of this
maximizes safety and convenience when driving. With 360 radar coverage and
a 200-meter detection range, the surround radar sensors support complex
automated-driving scenarios such as automatic lane-changing and adaptive
cruise control.

Tires: serial test winner

The Tires group sector generated sales of EUR3.3 billion (Q1 2023: EUR3.5
billion, -5.0 percent). At 11.7 percent, its adjusted EBIT margin was still
in the double digits, albeit down on the first quarter of the previous year
(Q1 2023: 13.4 percent). The main reasons were weak tire markets in the
truck and original equipment business, negative exchange-rate effects and
fewer workdays in March. This, in turn, shifted the tire-replacement
business to April, which already appears to be a considerably stronger month
for earnings. In the months ahead, the Tires group sector will also benefit
from an expected increase in demand.

Continental continues to set standards in premium tires, with its tire
technologies receiving multiple expert awards in the past quarter. The
latest PremiumContact 7 summer tire was crowned test winner by various
German and international trade magazines, with the editors of 'auto, motor
und sport,' for instance, awarding it a rating of 'outstanding.' Another
test winner was the SportContact 7 tire in the AutoBild sportscars test.

In addition, Continental has acquired mold-manufacturing specialist EMT
Púchov s.r.o., based in Slovakia - thus completing its internal portfolio
for mold-making technologies. Continental can now independently produce tire
molds for all applications. EMT is an important manufacturer of special tire
molds, especially for commercial vehicle and specialty tires. Molds are used
in tire construction as part of the vulcanization process. In this
production step, raw rubber is converted into flexible and elastic rubber,
which gives the tire its desired stability and shape.

Furthermore, all newly introduced passenger-car and 4x4 tire lines for
Continental's secondary brands in Europe will now feature the EV-compatible
logo on their sidewall. Continental is thus further expanding its product
strategy for electric vehicles. All of the company's new tires meet the high
requirements for electric vehicles and at the same time support
conventionally powered vehicles in driving efficiently and safely.

In 2023, Continental supplied tires to all 10 of the world's highest-volume
manufacturers of fully electric vehicles for the first time. In the
Asia-Pacific region, it provided all of the five highest-volume
manufacturers of electric vehicles with original equipment tires - another
first for the company. The company was also able to defend its strong
position in the Europe, Middle East and Africa (EMEA) and North, South and
Central America (The Americas) regions, where the five highest-volume
manufacturers continue to rely on Continental tires.

ContiTech: improvements expected as the year progresses

The ContiTech group sector posted sales of EUR1.6 billion (Q1 2023: EUR1.7
billion, -4.8 percent) and an adjusted EBIT margin of 5.4 percent (Q1 2023:
6.5 percent) in the past quarter. Earnings were adversely impacted by weak
industrial demand. In addition, the Original Equipment Solutions (OESL)
business area, which makes up a large part of ContiTech's business with
automotive manufacturers, is not expected to see improvements until the
second half of the year.

A particularly sustainable innovation from Continental is its solution for
combating weeds, which allows farmers to dispense with herbicides and rid
their fields of weeds in a fully sustainable way. The system, based on
optical sensor technology and supported by software and artificial
intelligence, detects weeds with precision and destroys them using boiling
water - all technologies developed in-house at Continental. The system
delivers a highly efficient, precise and sustainable method for combating
weeds.

Continental develops pioneering technologies and services for sustainable
and connected mobility of people and their goods. Founded in 1871, the
technology company offers safe, efficient, intelligent and affordable
solutions for vehicles, machines, traffic and transportation. In 2023,
Continental generated sales of EUR41.4 billion and currently employs around
200,000 people in 56 countries and markets.

Press contact

Marc Siedler

Spokesperson, Business & Finance

Continental

Phone: +49 511 938-1278

Cell: +49 151 24506041

E-mail: marc.siedler@conti.de

Vincent Charles

Head of Media Relations

Continental

Phone: +49 511 938-1364

Cell: +49 173 3145096

E-mail: vincent.charles@conti.de

Press portal: www.continental-press.com

Media center: www.continental.com/media-center

X: @conti_press


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   Language:       English
   Company:        Continental AG
                   Continental-Plaza 1
                   30175 Hannover
                   Germany
   Phone:          +49 (0)511 938-12203
   Fax:            +49 (0)511 938-1080
   E-mail:         ir@conti.de
   Internet:       www.Continental.com
   ISIN:           DE0005439004
   WKN:            543900
   Indices:        DAX
   Listed:         Regulated Market in Frankfurt (Prime Standard),
                   Hamburg, Hanover, Stuttgart; Regulated Unofficial
                   Market in Berlin, Dusseldorf, Munich, Tradegate
                   Exchange; Luxembourg Stock Exchange, SIX
   EQS News ID:    1898123

End of News EQS News Service
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1898123 08.05.2024 CET/CEST