Continental Half-Year Report 2024

Market Development

• Most recent market updates expect a negative volume development in Europe, a positive step in NA and significant continued growth in China. Weighted for Continental for the quarter, we only expect a very slight positive volume effect world-wide.
• Currency effects are not expected to significantly influence the sales development.
• For the full year from today’s perspective, the market forecast for Europe is expected to be at the low end of our guidance. We expect the main growth driver for the second half of the year to be from the Chinese market.

Latest Management Commentary

• Outperformance is still expected to be burdened by delayed ramp-ups.
• Continued stepwise improvements are expected from operational excellence, e.g. from lower premium freights and smart inventory management, as well as through our commercial excellence activities.
• Pricing progressed in Q2 as expected. As stated, contribution from pricing is required to be positive in Q2 for the Automotive Sector.
• The first positive effects from our fixed cost savings program are expected to contribute in Q2 2024, with the major savings for 2024 to come later in second half of the year. For our fixed cost savings program, we expect a high-double to low-triple digit amount of savings for the full year 2024, with the overall target of around €400 million cost reduction by 2025.
• For our R&D efficiency program, we only expect to see minor incremental improvements this year on the way to our target of a 9% R&D to sales ratio in 2028.

Group Free Cash Flow

Latest Management Commentary

• Continuous improvements in working capital expected.
• As considered already in the full year guidance, extraordinary effects will occur.
• Q1: €500 million paid for ContiTech AG share re-purchase.
• As said during the beginning of the year, we should see the largest portion of the cash-outs related to restructuring and carve-outs during the second half of the year. Nevertheless, there can also be first effects in Q2, though not at the same level as expected for Q3 and Q4.
• €100 million payment due in Q2 in line with the end of fine proceedings.