Continental (CON) Investor Update summary

Strategic transformation and independence plans

• Continental is executing a major transformation, spinning off its Automotive Group and making ContiTech independent to create three focused, agile businesses: Tires, ContiTech, and Automotive.

• The Automotive spin-off is prioritized for 2025, with shareholder approval targeted for April and Frankfurt listing by September.

• ContiTech's independence is driven by its shift to an industrial focus, with a sale identified as the most probable transaction form, targeted for 2026 after the OESL carve-out.

• OESL carve-out and sale are progressing, aiming for completion within 2025, further separating industry and automotive businesses.

• Preparatory measures, including the transfer of group functions and structural adjustments, are underway to ensure seamless execution.

Business segment outlooks and profiles

• Tire segment remains resilient and competitive, with €13.9 billion in 2024 sales, a 13.7% adjusted EBIT margin, and a strong global brand.

• ContiTech, post-independence, will focus on material solutions for industrial customers, with €4.5 billion in sales and an 8.1% adjusted EBIT margin in 2024.

• Automotive sector employs 92,000, generated €19.4 billion in 2024, and is set for a Frankfurt Stock Exchange listing in September 2025, pending shareholder approval.

• Both ContiTech and OESL are cash flow positive, with ContiTech's industrial segment showing stronger margins than surface solutions.

• Limited synergies between Tires and ContiTech support the move to independence for both sectors.

Transaction execution and financial implications

• Group is executing multiple parallel transactions: Automotive spin-off, OESL sale, and ContiTech independence, with execution phases extending into 2026.

• Sale of ContiTech is preferred due to transaction proceeds and complexity, but spin-off or IPO remain alternatives, with more details to be shared at the June 2025 Capital Market Day.

• Both entities will have strong balance sheets, investment-grade ratings, and Frankfurt as their listing location.

• Dividend payout ratio for RemainCo is set at 40-60%, with potential for special dividends or share buybacks post-transaction.

• Interest from financial sponsors in ContiTech is strong, with the asset seen as attractive due to its industrial focus and stable margins.