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Sustainability / ESG PresentationJanuary 2020
Ticker: CON
ADR-Ticker: CTTAY
http://www.continental-ir.com Investor Relations
Sustainability / ESG Presentation
January 2020
Environmental Responsibility
4 20
Agenda
2EDMR – Equity and Debt Markets Relations
1 3
Supply Chain2 12
3 17
Social Responsibility
Sustainability at Continental
26
Corporate Governance5 36
Sustainability / ESG Presentation
January 2020
3EDMR – Equity and Debt Markets Relations
1) Sustainability at Continental Corporate Strategy at a Glance
Sustainability / ESG Presentation
January 2020
Environmental
Responsibility
Employees
and Society
Environment, Safety and Health (ESH) Policy – defines
worldwide principles for safety, health and environmental
protection
Code of Conduct – ethical standards and requirements
concerning employee behavior
Business Partner Code of Conduct – ethical standards and
requirements which we expect our business partners to adhere to
Corporate Governance Policy – to foster the responsible
management of the company focused on value creation
Quality Policy – aims at customer satisfaction as an overarching
goal
Risk Report – overview of our Risk Management
OUR BASICS Our Corporate Guidelines
Corporate
Governance
4
1) Sustainability at Continental Our Key Policies and Guidelines
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Sustainability / ESG Presentation
January 2020
5EDMR – Equity and Debt Markets Relations
1) Sustainability at Continental Sustainability Governance
▪ Dr. Ariane Reinhart (Executive Board member
responsible for Human Relations and Sustainability)
▪ Wolfgang Schäfer (CFO)
▪ Corporate Sustainability department
▪ Relevant business areas and central functions
▪ Other experts (on request)
Interdisciplinary and cross-divisional
Corporate
sustainability
department
Continental Sustainability Committee Continental AG
Executive Board
Steering and implementation Decision-making
Updated sustainability strategyCurrent focus topics Strategic planning process
2018 2019 2020+
Timeline for strategy development:
Strategic
coordination
Business areas/
central
functions
Our ambition:
Continental creates
meaningful positive
impact
Sustainability / ESG Presentation
January 2020
Status Quo: Certified quality management
systems according to ISO 9001 o.s.
› Our group-wide global quality policy aims at customer
satisfaction as an overarching goal
› Operationalized by five strategic initiatives with
leadership culture as a foundation
› Global quality management organization directly
reporting to CEO to implement policy
~90%
total workforce covered by certification
6
1) Sustainability at Continental Quality First – Reliable Products by Continental
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Sustainability / ESG Presentation
January 2020
Consolidated sales of products in 2018
that reduce energy consumption and / or
emissions
› Virtual A-Pillar: By pairing its interior camera and
integrated OLED displays in the vehicle’s A-pillar, forward
blind spots are eliminated.
› Eco Tires: EcoContact 6 delivers maximum fuel efficiency
and optimized grip thanks to improved component
geometry and efficient silica distribution.
› Super Clean Electrified Diesel: By making various
modifications to a Euro 6 Diesel standard vehicle,
Continental engineers were able to massively reduce real
driving emissions (NOx and CO2).
› “People’s-Hybrid”: The hybrid with 48-volt technology
uses up to 21% less fuel, is relatively affordable and is
usable in all vehicle classes.
› Digital Air Spring System: This revolutionary technology
allows the driver’s cab to be regulated electronically, thus
reducing fuel consumption.
~40%
› Examples:
7
1) Sustainability at ContinentalInnovative Products – Sustainable Mobility: Clean, Safe & Affordable
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Sustainability / ESG Presentation
January 2020
8EDMR – Equity and Debt Markets Relations
1) Sustainability at Continental Stakeholder Dialog
Stakeholder Format
› Customers Key Account Management, partnerships, trade fairs
› Suppliers Workshops, open days
› Investors and shareholders Annual Shareholders‘ Meeting, webcasts, roadshows
› Employees Employee surveys, town hall meetings, webcasts, employee representatives
› Civil society Surveys, open days, trade fairs, engagement projects
› Politics Open days, trade fairs, engagement projects
Source: Sustainability Report 2018, page 11.
Sustainability / ESG Presentation
January 2020
Source: https://www.ecpigroup.com; https://www.cdp.net; https://www.sustainalytics.com; https://www.msci.com; https://www.ecovadis.com/.
› Continental is listed in the following indexes:
9
1) Sustainability at Continental Ratings and Indexes
› Ratings:
› Prime (C+) (2019) › Climate: Score B (2018)
› Water: Score B- (2018)
› Supply Chain: Score A;
Supplier Engagement
Leader Board (2018)
› Gold Status (2019)
› 65 /100
› Best 5% of companies
› BBB (June 2019) › Outperformer (2019)
73 / 100
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Sustainability / ESG Presentation
January 2020
Source: www.charta-der-vielfalt.de (German Federal Government Commissioner for Migration, Refugees and Integration); www.luxemburger-deklaration.de; www.globalcompact.de; http://www.wbcsd.org;
http://www.erscharter.eu; http://www.weprinciples.org; http://www.snr-i.org/; https://econsense.de/.
10
1) Sustainability at ContinentalContinental’s Memberships
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Sustainability / ESG Presentation
January 2020
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Our commitment is reported within the
›Webpage Sustainability
›2018 Sustainability Report
The 2018 report is prepared according to Global
Reporting Initiative (GRI) standards. Since 2011 the
Sustainability Report is issued annually.
›Annual Report 2018, page 48: Combined Non-Financial
Statement
1) Sustainability at Continental Publications
Sustainability / ESG Presentation
January 2020
› Responsible sourcing anchored in our General Purchasing
Terms and Conditions
› Business Partner Code of Conduct mandatory for suppliers
since 2011
› Dedicated initiatives on natural rubber:
› Launch of new policy for Sustainable Natural Rubber
in 2018
› Cooperation with GIZ1 on sustainable small-holder
rubber farming
› Participant of global industry platform (GPSNR2),
launched by WBCSD3 Tire Industry Project
1 German Society for International Cooperation (Gesellschaft für internationale Zusammenarbeit).2 Global Platform for Sustainable Natural Rubber.
Supplier Assessment as at Dec. 31, 2018
750 selected suppliers assessed on their sustainability
performance via
12
2) Supply Chain ManagementPurchasing and Responsibility
3 World Business Council for Sustainable Development.
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ecovadis
NQC
Sustainability / ESG Presentation
January 2020
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› Rubber Group introduced 3rd party supply chain CSR assessment tool based on UN
Global Compact, ISO26000 and Global Reporting Initiative
› >80% of annual spent already covered
› Upon findings buyers will request and monitor improvement actions
2) Supply Chain Management Supply Chain - Evaluation of Raw Material Suppliers
Sustainability / ESG Presentation
January 2020
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Continental acknowledges challenges in the Natural Rubber
supply chain related to environmental, social and human
rights impacts.
With the SNR Procurement Policy Continental commits to
work towards SNR in a multi-stakeholder approach and set
requirements for our supply chain.
Continental contributes to the GPSNR (Global Platform for
SNR) to be launched Oct, 25th 2018 by WBSCD1 Tire Industry
Project.
1 World Business Council for Sustainable Development.
2) Supply Chain ManagementSupply Chain - Sustainable Natural Rubber (SNR) Policy
Sustainability / ESG Presentation
January 2020
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Partnership between Continental and Deutsche Gesellschaft für Internationale
Zusammenarbeit (GIZ).
Goal: Development of a training for farmers in sustainable production of natural rubber
and to track the rubber from smallholders to production at Continental.
Pilot project: 400 farmers will be trained to grow high-quality rubber in accordance with
clearly defined sustainability criteria.
Improved rubber quality, higher yields and supply chain optimization will generate higher
incomes for rubber tree cultivators.
Improvement livelihoods of rubber tree farmers in Indonesia.
2) Supply Chain Management Supply Chain - Project Sustainable Natural Rubber
Sustainability / ESG Presentation
January 2020
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Improvement of the environmental performance of our suppliers in Mexico.
The aim of the initiative was to train and help the
suppliers to establish and enhance their own
environmental and energy management systems.
Over a two-year period ten selected suppliers
received training in the areas of environmental and
energy management.
This project will be continued and opened up to
additional suppliers under the motto: „Improve
sustainability – One For Another!“
Further information is available on the project website.
923 megawatt hoursenergy
210 tonswaste
4,600 m3
755 tonsCO2 emissions
Savings during the project
water
2) Supply Chain Management Supply Chain - Project Environmental Performance
Sustainability / ESG Presentation
January 2020
CO2-neutral value chain
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3) Environmental Responsibility Environmental Strategy 2050
Source: www.continental-sustainability.com
› Guided by the United Nations’ sustainable
development goals (SDGs)
› Commitment to the two-degree target
under the Paris climate agreement
2020
20502040
Use of electricity from
renewable sources in all
production sites
CO2-neutral production
Sustainability / ESG Presentation
January 2020
100%reduction of: • CO2 emissions related to
electricity (scope 2) by 2020
• total CO2 emissions from production (scope 1 and scope 2) by 2040
• total CO2 emissions from supply chain (scope 1, 2 and 3) by 2050
20%kWh/sales reduction by 2030 compared to 2018
4%reduction of water demand per year based on sales in water stress high risk areas
2%reduction of waste generation per year based on sales
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3) Environmental Responsibility Environmental Strategy 2030 / Our Goals
CO2 emissions Energy Water Waste
2%reduction of water demand per year based on sales in water stress medium and low risk areas
1 TWhreduction of external energy demand by energy efficiency projects in 2020 until 2030
95%improvement of the recycling quota by 2030
Source: www.continental-sustainability.com
Sustainability / ESG Presentation
January 2020
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Continental established an environmental management
system throughout the corporation more than 30 years ago.
2) Environmental ResponsibilityStatus of Environmental and Energy Certification at Continental
Source: Continental Annual Report 2018, page 52.
Production & Development
Locations worldwide
Thereof
ISO 14001
certified
Thereof
ISO 5001
certified
90 locations
≙ 50% of
workforce
200 locations
≙ 80% of
workforce
› Our activities are geared toward continually
optimizing the use of resources in relation to
business volume.
› We manufacture products that make an active
contribution toward protecting the environment
and conserving resources throughout their entire
duration of use as well as when they are
ultimately recycled.
Sustainability / ESG Presentation
January 2020
› Global ESH policy managed by
particular ESH organization
› Commitment to environmental
protection, especially to the
reduction of resource use and
climate protection
› Strategy 2020: to cut specific
inputs and outputs (energy, water,
waste and CO2) by 20% compared
to 2013 baseline
› ISO 14001 certification covers
>80% and ISO 50001 ~50% of
our total workforce worldwide
Environmental data1 Unit 20174 20185 ∆ 2017
Track record:
∆ 2013
Total energy use2 TWh 9.5 9.9 +4% +29%
Specific energy use2 MWh / € mn 218 223 +2% -3%
Total water demand mn m3 19.8 20.6 +4% +27%
Specific water demand m3 / € mn 456 465 +2% -5%
Total waste generation t 379,992 419,426 +10% +50%
Specific waste generation t / € mn 8.8 9.5 +8% +13%
Thereof: Waste recycled % of total waste 81 78 -3%-p. -6%-p.
Total CO2 emissions (Scope 1+2)3 mn t CO2 3.2 3.3 +4% +31%
Specific CO2 emissions (Scope 1+2)3 t CO2 / € mn 73 74 +1% -2%
1Based on the environmental data system which includes the relevant production and development sites, excluding fleet
consumption. Definitions based on Global Reporting Initiative (GRI). Specific data refers to the adjusted sales in the
respective year.2Fossil energies as well as electricity and steam.3According to Greenhouse Gas Protocol (Scope 2: location-based) on the basis of energy use reported as well as emission
factors of Defra (2016) and IEA (2017).4Data with external limited assurance.5Data with external reasonable assurance.
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3) Environmental Responsibility Environmental Management
Sustainability / ESG Presentation
January 2020
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90%less energy
90%less raw material
less CO2 emissions50-90%
Remanufacturing is a standardized industrial process and an integrated part of our service strategy. Rather than
manufacturing products from scratch, Continental remanufactures existing products by repairing and replacing
components with new original Continental parts. For the circular economy we save energy, water, material and
costs to make renewed products for a sustainable future.
up to
used
produced
up to
consumed
3) Environmental Responsibility Automotive - Remanufacturing
Sustainability / ESG Presentation
January 2020
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4%
36%
46%
12%2%
Civil Engineering Recycling Energy Reuse/Export Landfill
End-of-life tires in the European Union1
A total of approximately 3.25 million tons of used tires accumulate
in the EU per year.
Recycling versus raw material2
Energy needed to produce 1kg of tire compound
From Raw Material
From Recycled Material
82
8.7
MJ per kg tire compound
1 Source: ETRMA, June 29, 2016. 2 Source: Continental Reifen Deutschland.
3) Environmental Responsibility Tires – Recycling and Recovery
Sustainability / ESG Presentation
January 2020
8,000 tons
Breathing life into tires a second and even a third time
is the basic idea behind the ContiLifeCycle approach.
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Using a novel and proprietary process, Continental has succeeded in
recycling rubber from used tires in such a way that the raw material will
be directly returned into the production cycle for new or retreaded tires.
At ContiLifeCycle (CLC) plants, we reprocess worn-out truck tires in a
retreading process that conserves resources. The rubber powder that
is produced during retreading is further processed into recyclate, which
is used in the production of new and retreaded tires.
The retreaded tires offer the same performance characteristics and
rolling resistance as new tires.
4,000 tons
Recycling
of used rubber in
the recycling plant
saves
of CO2 per year
less water
of natural
rubber
80%
80%50%less energy
less waste2,400
less tons
3) Environmental Responsibility Tires – ContiLifeCycle
Sustainability / ESG Presentation
January 2020
The natural rubber made from dandelion roots has the same quality and
performance characteristics as conventional rubber from rubber trees.
The plants can be cultivated in moderate climates, e.g. Northern and Western
Europe or North America. Having plantations next to the tire plants in Central
Europe makes both economic and ecological sense.
At the end of 2018, Continental opened the “Taraxagum Lab Anklam” research
and test laboratory for dandelion rubber to provide a base for future research into
the cultivation and processing of dandelions.
The new dandelion rubber Taraxagum should enter production within the next
five to ten years and then flow step-by-step into our rubber products.
Benefits:
› Reduction in dependency on harvest situations in subtropical regions
› Higher flexibility due to (bi-)annual cultivation period
› Lower environmental impact due to reduced logistic requirements
› Optimal material properties enable first-class products in terms of technology
› Innovation and the Green Award both at
the international trade fair Automechanika
2016
› Joseph von Fraunhofer Prize 2015
› GreenTecAward 2014
Funded by the European Union by the operational program of the ERDF during the 2014 - 2020 funding period.
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3) Environmental Responsibility Diversification of Sourcing: Rubber from Dandelions
Sustainability / ESG Presentation
January 2020
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Technological expertise for customer-specific solutions
Health-friendly
interiors
Climate-friendly
printing blankets
Mounts for
wind power
Flexible insulation
for energy saving
Hoses for energy
storage in the sea
Printing technology for
printed electronics/solar cells
Rubber tracks
for more efficiency
Components for engine downsizing
and emissions reducing
3) Environmental Responsibility Sustainable Product-Solutions for a Variety of Industries by ContiTech
Sustainability / ESG Presentation
January 2020
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Continental’s Code of Conduct describes the basic values and principles which are binding for all Continental employees
during their everyday work and when dealing with colleagues, customers and other company stakeholders.
It regulates the following issues:
› Compliance with the Continental Code of
Conduct
› Responsibilities for Our Action and Behaviour
› Compliance with Laws, Regulations, and
Continental Corporate Rules, Standards and
Instructions
› Discrimination or Harassment
› Respect for Human Rights and fair working
conditions
› Health, Safety, Evironment and Product
Integrity
› Fair Dealing
› Compliance with Antitrust Laws
› Anti-Corruption
› Anti-Money Laundering
› Conflicts of Interest
› Use of Continental Company Property
› Data Protection and Cybersecurity
› Confidential Information and Intellectual
Property
› Export and Import Regulations
› Tax Compliance
4) Social ResponsibilityCode of Conduct
Sustainability / ESG Presentation
January 2020
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This Business Partner Code of Conduct highlights important standards that are consistent with Continental’s values and
which we expect each Business Partner including, but not limited to suppliers, consultants, vendors, brokers, merchants,
dealers, contractors, agents and others, to observe and strictly adhere to.
It regulates the following issues:
› Our Corporate Social Responsibility
› Compliance with Laws, Rules
and Legal Regulations
› Combating Slavery and Human Trafficking
› Compliance with Antitrust Laws
› Combating Corruption
› Conflict Minerals
› Export and Import Regulations
› Prevention of Money Laundering
› Conflict of Interest
› Respect of Human Rights,
Anti-Discrimination and Women’s
Empowerment
› Product Safety, Health, and Environment
› Data Protection, Confidential Information
and Intellectual Property
› Compliance with this
Business Partners Code
4) Social ResponsibilityBusiness Partner Code of Conduct
Sustainability / ESG Presentation
January 2020
› Freedom of association
› Abolishment of forced labor
› Abolishment of child labor
› Freedom from discrimination
Implementation:
› Coordination of work through newly established
human rights expert role
› Promotion through internal labor relations
network covering more than 70% of our
employees worldwide
› Training of employees on Code of Conduct
› Additional specific purchasing requirements for
sustainable natural rubber
› Assessment of suppliers via Ecovadis and NQC
› (Suspected) violations can be reported to global
compliance hotline
Commitment to
human rights and
ILO1 Core Labor
Standards:
Adopted into:
Continental Code of Conduct
Continental Business Partner
Code of Conduct
1 International Labor Organization.
EDMR – Equity and Debt Markets Relations 28
4) Social Responsibility – Human RightsClear Expectations at Continental
Sustainability / ESG Presentation
January 2020
› Total workforce of 243,226, thereof 228,922 own employees in 2018 – to grow further
Key achievements in 2018:
› Further development of our strategic workforce planning processes covering 97% of own employees
› Global talent management conferences
› Certification of global talent management process according to ISO 29990
› Introduction of Microsoft Office 365 for digital collaboration
› Introduction of digital learning management platform
› Extension of certification for health & safety management systems (around 2/3 of total workforce are now covered)
Enable Transformation:› Talent Management
› Data Management
Industrialize Best Fit› Diversity
› Leadership
› Flexibility
› Learning
Common work is based on:
Corporate Values (“BASICS”) & Rules (incl. Code of Conduct)
Core initiatives:
HR to Enable Business
EDMR – Equity and Debt Markets Relations 29
4) Social Responsibility – EmployeesHuman Relations Strategy to Enable Business
Sustainability / ESG Presentation
January 2020
Global Flexible Working Conditions at Continental1 (established in 2016)
› Part-time
› Flextime
› Mobile working
› Sabbaticals
After we defined the global framework for flexible working conditions at the end of 2016, the next two years were
characterized by the global implementation of the measures. In 21 countries, with over 95% of the workforce,
employees can make their ways of working more flexible. Various models began to be developed in the production
locations to expand these opportunities more specifically in the production environment.
30
1 Source: Based on information in the Annual Report 2018, page 50.
EDMR – Equity and Debt Markets Relations
4) Social Responsibility – EmployeesDiversity and Equal Opportunity – Work-life Balance
Sustainability / ESG Presentation
January 2020
These objectives are reviewed on the executive level on a quarterly basis. The goal is to increase the proportion of women
at the upper and middle management tiers. The Global Diversity Network, an umbrella organization for women’s networks
at our company, was established to support women’s career development. It supports networking activities in the countries
in which we operate. A program has also been set up to boost the effectiveness and careers of young women.
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Definition of clear objectives for all business units when it comes to promoting woman.
9.0 9.7 10.512.2 13.4
14.8 16
25
0,0
5,0
10,0
15,0
20,0
25,0
2013 2014 2015 2016 2017 2018 Target 2020 New Target 2025
Female employees in management positions in %
4) Social Responsibility – EmployeesDiversity and Equal Opportunity
Sustainability / ESG Presentation
January 2020
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Employees by region in 2018
Germany26%
Europe (excluding Germany)
32%
Asia20%
NAFTA18%
Other countries4%
2018 2017
› Total number of employees 243,226 235,473
› Permanent staff 228,922 219,687
› Leasing workers 14,303
› Fixed-term contracts including leasing
worker contracts as %
15.8 17.0
› Female employees as %
of the global workforce
27.5 27.2
› Employees working part-time
as % of the global workforce
3.0 2.5
› Fluctuation unforced as % 6.3 5.7
4) Social Responsibility – EmployeesStructure of Workforce
Sustainability / ESG Presentation
January 2020
Our specialist department Corporate Safety & Health ‘‘Safety, Health, Hazardous Substances, Ergonomics’’ sets protection
standards, which apply across the entire Corporation. The Continental ESH Management System meets the international
standard for occupational safety management ISO 45001. The percentage of occupational safety management system
certifications was already at level of two thirds of the total workforce as at December 31, 2018.
1 Paid and unpaid absences due to sickness in relation to the contractual working hours in percent (for the corporation).
2 Number of industrial accidents resulting in the loss of one or more working-day equivalents per one million hours worked.
Absences due to sickness (%)1
3.53.0 3.2 3.2 3.3
2012 2014 2016 2017 2018
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Number of accidents2
3.63.0 2.9 3.2 3.4
2012 2014 2016 2017 2018
4) Social Responsibility – EmployeesHealth and Occupational Safety
Sustainability / ESG Presentation
January 2020
› Our activities are based on the corporate values, internal rules and standards as well as local laws.
› We contribute to social activities with partnerships as well as charitable and in-kind donations, and we support volunteering activities at our locations worldwide.
Employees donate € 15,000 to
charities in Germany
Employees help renovate schools in
Hungary, Mexiko and Romania
Experiencing Europe: Internships
for young people in Europe
Continental Youth Safe Driving
Program in China
Selected examples of our social activities worldwide:
EDMR – Equity and Debt Markets Relations 34
4) Social Responsibility – SocietySocial Commitment
Sustainability / ESG Presentation
January 2020
35
The aim of the initiative is to invite young African managers from Sub-
Saharan Africa to Germany for one year in order to support them and get
them used to the country. At the same time, the program paves the way for
lasting economic cooperation in Africa.
Continental integrates young refugees into the working world, offering
them prospects for a brighter future. More than 20 refugees are currently
undertaking apprenticeships. 2016 was the first year we opened up our
initial qualification programs 50 refugees. And over the course of the
current year we have added 25 more spots.
Continental Offers Opportunities
to Refugees
Continental has launched a program specifically for young people.
Together with Germany’s Federal Employment Agency, we offer jobseekers
aged 18 to 25 short internships at our locations elsewhere in Europe.
Young people who have not yet gained any professional experience or
completed a degree are eligible to take part.
‚Experiencing Europe‘
EDMR – Equity and Debt Markets Relations
4) Social Responsibility – SocietySocial Commitment
Sustainability / ESG Presentation
January 2020
First version published in 2002:
› The Code addresses all major criticisms – especially from the international
community – leveled against German corporate governance.
› Observes the development of corporate governance in legislation and practice
and reviews the Code at least once a year for possible adaptation.
Some topics from the update in February 2017:
› Executive and Supervisory Board shall ethically sound and responsible behave
(the “reputable businessperson” concept, Leitbild des Ehrbaren Kaufmanns).
› Early disbursements of multiple-year, variable remuneration components for the
Executive Board should not be permitted.
› The Supervisory Board Chair should be available – within reasonable limits – to
discuss Supervisory Board-related issues with investors.
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5) Corporate GovernanceGerman Corporate Governance Code / Background
Sustainability / ESG Presentation
January 2020
EDMR – Equity and Debt Markets Relations
Continental deviates from one recommendations of the Code1.
Declaration in accordance with Section 161 AktG.
Continental has complied with and will comply with the recommendations issued
by the “Government Commission on the German Corporate Governance Code”
(as amended on February 7, 2017) subject to the following qualifications.
Deviations from recommendations
Section 5.4.1 para 2
To establish an age limit for the
Supervisory Board members.
1 As of December 2018. Update is prescribed by law once a year.
37
Derivations from suggestions
Section 3.7 para 3
An extraordinary Annual Shareholders’
Meeting in all cases of takeover bids.
5) Corporate GovernanceGerman Corporate Governance Code
Sustainability / ESG Presentation
January 2020
Shareholders’ Meeting
Shareholders’ exercise their rights of participation and control
ReportsRatifiesElects shareholder representatives
ReportsRatifies
Executive Board
20 members
10 shareholder representatives
10 employee representatives
Involved in decisions of fundamental
significance to the company
8 members
Responsible for managing the
company in accordance with the
law, the Articles of Incorporation,
and the By-Laws of the Supervisory
and Executive boards, while taking
into account the resolutions of the
Shareholders’ Meeting
Reports
Appoints,
monitors
and advises
Supervisory Board
Chairman’s Committee
Mediation Committee
Audit Committee
Nomination Committee
›
›
›
›
›
›
› › › › ›
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5) Corporate GovernanceTwo-Tier Board System – Corporate Bodies
Sustainability / ESG Presentation
January 2020
Dr. Elmar Degenhart
Chairman of the Executive Board
Born in 1959
Appointed since 2009 until August 2024
Frank Jourdan
Chassis & Safety Division
Born in 1960
Appointed since 2013 until March 2024
Helmut Matschi
Interior Division
Born in 1963
Appointed since 2009 until March 2024
Wolfgang Schäfer
Chief Financial Officer
Born in 1959
Appointed since 2010 until December 2024
Hans-Jürgen Duensing
ContiTech Division
Born in 1958
Appointed since 2015 until April 2023
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Dr. Ariane Reinhart
Human Relations
Born in 1969
Appointed since 2014 until September 2022
Nikolai Setzer
Spokesman of the Automotive Board
Born in 1971
Appointed since 2009 until March 2024
Dr. Elmar Degenhart
Chairman of the Executive Board
Born in 1959
Appointed since 2009 until August 2024
Christian Koetz
Tire Division
Born in 1970
Appointed since 2019 until March 2022
5) Corporate GovernanceExecutive Board Continental AG
Sustainability / ESG Presentation
January 2020
Prof. Dr.-Ing. Wolfgang Reitzle (Chairman)Chairman of the Supervisory Board of Linde AG
*1949, nationality: German, elected until 2024, first elected 2009
Memberships1: 6 (4 as chairman)
Satish Khatu Management Advisor
*1952, nationality: USA, elected until 2024, first elected 2019
Memberships1: None
Sabine Neuß Chief Operation Officer of Kelvion Holding GmbH
*1968, nationality: German, elected until 2024, first elected 2014
Memberships1: 1
Dr. Gunter Dunkel Chairman European Debt, Muzinich & Co
*1953, nationality: Austrian, elected until 2024, first elected 2009
Memberships1:None
1Memberships in other supervisory boards mandated by law or comparable domestic or foreign control committees as at April ,2019.
40EDMR – Equity and Debt Markets Relations
Isabel Corinna Knauf Member of the Group Management Committee at the Knauf Group
*1972, nationality: German, elected until 2024, first elected 2019
Memberships1: 13 (9 as chairman)
Prof. Dr. Rolf Nonnenmacher Member in various supervisory boards
*1954, nationality: German, elected until 2024, first elected 2014
Memberships1: 3
5) Corporate GovernanceSupervisory Board Continental AG – Shareholder Representatives
Sustainability / ESG Presentation
January 2020
1Memberships in other supervisory boards mandated by law or comparable domestic or foreign control committees as at April, 2019.
Klaus Rosenfeld Chief Executive Officer of Schaeffler AG, Herzogenaurach
*1966, nationality: German, elected until 2024, first elected 2009
Memberships1: 2
Georg F. W. Schaeffler Shareholder of INA-Holding Schaeffler GmbH & Co. KG and
Managing Director of IHO Verwaltungs GmbH
*1964, nationality: German, elected until 2024, first elected 2009
Memberships1: 2 (2 as chairman)
Maria-Elisabeth Schaeffler-ThumannShareholder of INA-Holding Schaeffler GmbH & Co. KG and
Managing Director of IHO Verwaltungs GmbH
*1941, nationality: German, elected until 2024, first elected 2009
Memberships1: 1 (1 as vice chairman)
Prof. KR Ing. Siegfried WolfEntrepreneur
*1957, nationality: Austrian, elected until 2024, first elected 2010
Memberships1: 6 (1 as chairman)
41EDMR – Equity and Debt Markets Relations
5) Corporate GovernanceSupervisory Board Continental AG – Shareholder Representatives
Sustainability / ESG Presentation
January 2020
Remuneration of an Executive Board member responsible for a division (example)
EDMR – Equity and Debt Markets Relations42
Target remuneration (100% target
achievement)
Maximum remuneration
0
1
2
3
4
5
6
Fixed
remuneration
Additional
benefits
Service
costs
Performance
bonus (immediate
payment: 60%)
Performance
bonus
(deferral: 40%)
Long-term
incentive
Total
remuneration
€ mn
(Converted into virtual shares.3-year holding period)
(4-year term)
Variable remuneration elements
Minimumremuneration
1 Average.2 Based on a target bonus (here: €1.167 million), for 100% achievement of defined CVC and ROCE targets, maximum
of 150% of the target bonus (including achieving any additional strategic targets as well as any correction of the target
achievement of +/- 20% by the Supervisory Board), divided into an immediate payment (60%) and deferral (40%).3 The possible increase in the value of the deferral is capped at 250% of the initial value. The maximum amount shown
relates to the maximum payment in the performance bonus at 150% target achievement.4 Based on achieving average CVC versus planned CVC (max. 200%), multiplied by the degree of achieving the total shareholder return, maximum payment of 200%.
5) Corporate GovernanceRemuneration of an Executive Board member
Sustainability / ESG Presentation
January 2020
1 Basis for calculation: €90 for each cent of earnings per share over €2, calculated as an average of the last three years.
1
Remuneration of a Supervisory Board member (example)
EDMR – Equity and Debt Markets Relations
0
25
50
75
100
125
150
175
200
225
Fixed remuneration Additional benefits
(meeting fees)
Variable
remuneration
Total remuneration
€ thousands
43
5) Corporate GovernanceRemuneration of a Supervisory Board member
Sustainability / ESG Presentation
January 2020
44EDMR – Equity and Debt Markets Relations
› Continental ranks 3 out of 30 in the 2018 DVFA Scorecard survey with 86.55%.
› About the Scorecard for German Corporate Governance:
› Corporate Governance (CG) comprises competencies, communication and monitoring on the part of
the decision-making bodies of publicly-traded companies.
› The scorecard was designed as a professionally suitable analytical tool for analysts, investors and
companies for evaluation of all relevant factors.
› It includes about 50 measures for the comprehensive implementation of Corporate Governance -
separated according to the criteria
› CG commitment
› shareholder rights
› transparency
› company management and
› auditing.
Source: http://www.ecgi.org/codes/documents/scorecard_d.pdf; http://www.dvfa.de/fileadmin/downloads/Verband/Gremien/Corporate_Governance/Gesamtscore_Methodik_DVFA_Scorecard_for_CG_DAX30_2018.pdf.
5) Corporate GovernanceDVFA Scorecard / German Corporate Governance Code
Sustainability / ESG Presentation
January 2020
Source: Sustainability Report 2018, page 47.
45EDMR – Equity and Debt Markets Relations
5) Corporate GovernanceRisk Reporting
Sustainability / ESG Presentation
January 2020
The Executive Board is fully committed to a zero
tolerance policy with regard to corruption and antitrust.
Corruption-related issues are reviewed in every general
audit.
Our Compliance & Anti-Corruption Hotline gives
employees and third parties outside the corporation the
opportunity to report violations of legal regulations,
fundamental values and ethical standards.
Source: Continental Annual Report 2018, page 53.
46EDMR – Equity and Debt Markets Relations
Compliance Trainings 2018 Approximate
› Online training sessions ~85,000
› Classroom training sessions ~360
› Online training completion rate >95%
5) Corporate GovernanceCompliance Management
Sustainability / ESG Presentation
January 2020
Source: Sustainability Report 2017, page16.
We see significant corruption risks in the following areas:
› Facilitation payments
› Advisors/business intermediaries and slush funds
› Gratuities in business transactions that do not comply
with internal requirements, especially with high value
hospitality
› Kickback scenarios in purchasing and sales
47EDMR – Equity and Debt Markets Relations
5) Corporate GovernanceCompliance Management & Anti Corruption
Sustainability / ESG Presentation
January 2020
Disclaimer
› This presentation has been prepared by Continental Aktiengesellschaft and includes information available to us until January 2020. 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.
Sustainability / ESG Presentation
January 2020
ContactEquity and Debt Markets Relations
Vahrenwalder Str. 9
30165 Hanover
Germany
E-mail: ir@conti.de
Fax: +49 511 938 1080
www.continental-ir.com
Michael Sämann
Analysts, Institutional Investors and
Sustainability Investors
Phone: +49 511 938 1307
E-mail: michael.saemann@conti.de
Marvin Kalberlah
Analysts, Institutional Investors
Social Media
Phone: +49 511 938 14034
E-mail: marvin.kalberlah@conti.de
Christopher Macke
Analysts, Institutional Investors
Phone: +49 511 938 1062
E-mail: christopher.macke@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
Bernard Wang
Head of IR
Phone: +49 511 938 1068
E-mail:
bernard.wang@conti.de
Sina Ramatschi
Assistant to the Head of IR
Roadshow and Conference Organization
Phone: +49 511 938 1163
E-mail:
sina.ramatschi@conti.de
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