November 10, 2016
Transcript of November 10, 2016
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‘Always On’
www.continental-ir.com Interior Division
Continental Capital Markets Day - November 10, 2016
Interior Division
2
Agenda
3
1 Interior at a Glance
Growth Drivers Until Today and of Tomorrow 2
Opportunities of the Future
November 10, 2016
Helmut Matschi © Continental AG
* Status Q3 2016, ** 2015YE
Interior at a Glance Overview Interior Division – Last Twelve Months
November 10, 2016
4 Helmut Matschi © Continental AG
› Sales of €8.3 billion
› EBIT adj. 7.8% / ROCE 13.2%
› 42,808 employees worldwide
› 106 locations in 25 countries (incl. sales offices)
Sales by market: Interior
Germany (DE) 27%
Europa excluding DE
20% Asia 24%
NAFTA 26%
Other countries
3%
Interior at a Glance Our Business Units & Product Portfolio
November 10, 2016
5 Helmut Matschi © Continental AG
Intelligent Transportation Systems
› Fleet management solutions & services
› Emergency management
› Maintenance management
› Advanced public transportation systems
› Advanced traveler information systems
› Advanced traffic management systems
› Safety & security
› Intelligent payment systems
› Body control modules
› Access control systems
› Door control units
› Seat comfort systems
› Power closures
› Tire information systems
› Gateways
› Power stabilization
› Lighting control units
› Intelligent antenna modules
› Smart device integration
Body & Security
› Tachographs, telematics and services
› Visual and haptical human-machine interface
› Chassis, body and transmission electronics
› Spare parts, wear parts, tools, services and multi-brand vehicle diagnostics for the independent aftermarket as well as diagnostics and services for vehicle manufacturers
› Original equipment services
› Instrument clusters
› Displays solutions
› Head-up displays
› Haptic controls
› Interior cameras
› Cockpit modules
› Radios
› Infotainment
› Connectivity & telematics
› Software & connected solutions
Commercial Vehicles & Aftermarket
Instrumentation & Driver HMI
Infotainment & Connectivity
Interior at a Glance Our Vision, Mission and Strategy
November 10, 2016
6 Helmut Matschi © Continental AG
Vision
Strategy
Mission
Information management
is a key to realizing
‘Clean Power’ and
‘Zero Accidents’
Tomorrow's vehicle
is always connected,
user-friendly, comfortable
and intelligent
We inform you well,
we connect –
all at lower cost
Information Management
in the Vehicle and beyond
Always On
1. Holistic Human-Machine Interface
2. Holistic Connectivity
3. Systems Integration
4. Most complete Product Portfolio
Agenda
3
1 Interior at a Glance
Growth Drivers Until Today and of Tomorrow 2
Opportunities of the Future
November 10, 2016
7 Helmut Matschi © Continental AG
Growth Drivers Until Today and of Tomorrow Financial Performance
8 Helmut Matschi © Continental AG
November 10, 2016
0
2
4
6
8
10
0
5
10
15
20
2013
6.6
9.5
2012
6.4
9.6
2011
6.1
7.6
2010
5.5
4.5
2014
8.2
2015
19.2
7.0
15.9
ROCE %
Sales in € bn
22.4% 11.5% 3.3% 6.0% 8.6% 8.3%
Organic Growth
Strong organic growth consistently
with ROCE improvement by
15% points
Enhanced profitability with margin
increase of 270 basis points in the
last 5 years despite higher R&D
Leading player for electronics and
software with a balanced
regional footprint
*adj EBIT reported in the respective year
10.2%
ROS* 10.1%
ROS*
8.9%
ROS*
9.2%
ROS*
8.4%
ROS*
7.5%
ROS*
November 10, 2016
9 Helmut Matschi © Continental AG
Invention
Order
Sales
Growth Drivers Until Today and of Tomorrow Our Product Portfolio for Today's Solutions & Tomorrow's Innovations
IIP = Integrated Interior Platform, ITS = Intelligent Transportation Systems, AR-HUD = Augmented Reality Head-Up Display, OTA = Over The Air, MFST = Multi Functional Smartphone Terminal, IAM = Intelligent Antenna Module
eHorizon Lighting
Network Devices / IAM
Connected
Technician Tachograph / Fleet-Management
Seat Comfort
Interior
Camera
OTA
keys
MFST
IIP
Connectivity
Head-up Displays
Full digital Cluster
ProViu®
Mirror
AR-HUD
ProViu® 360
Displays
Instrument
Clusters
Radios
Haptic Controls
Body Controllers
Access Systems
Power Closures
Tire
Information
Multimedia
Cockpits
5,5 6,1 6,4 6,6 7,0
8,2 >8.2
>10
6,1
7,4 8,2 8,3
9,2 9,6 >10
2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E 2021E
Interior Sales (bn €) Order Intake (Life-Time-Sales, bn €)
10 Helmut Matschi © Continental AG
November 10, 2016
Growth Drivers Until Today and of Tomorrow High Order Intake Secures Future Sales Growth
CAGR
8%
Growth Drivers Until Today and of Tomorrow More and Larger Displays
November 10, 2016
11 Helmut Matschi © Continental AG
Integrated Interior Platform
Displays
Instrument
Clusters (AR)-HUD
Multimedia
Source: Statista 2016, IHS Markit Ltd2016
November 10, 2016
12 Helmut Matschi © Continental AG
MFST
Entry
Telematics
Premium
Telematics
Multimedia
w/ NAD
Digital
Tachograph
Diagnose
Dongle
IAM
Connected
Gateway Device
Connectivity
WLAN
NAD = Network Access Module, IAM = Intelligent Antenna Module, MFST = Multi Functional Smartphone Terminal
Growth Drivers Until Today and of Tomorrow The Most Complete Range of Connectivity Solutions
Growth Drivers Until Today and of Tomorrow Rising Electronic and Software Content
November 10, 2016
13 Helmut Matschi © Continental AG
Body Control Modules (BCM)
2007 - 2009 2010 - 2012
91,000 LoC 265,000 LoC
Gateways
2009 - 2012 2013 - 2015
50,000 LoC 360,000 LoC
Infotainment
2009 - 2012 2011 - 2015
525,000 3,000,000
LoC LoC
14 Helmut Matschi © Continental AG
Growth Drivers Until Today and of Tomorrow Strong SW and Integration Capabilities due to EB Automotive
• Classical OEMs
• New entrants
• Suppliers
• 3rd parties
Mobility Services
&
Automated Driving
Functions
› Software as Product and
Software as Service providing a
platform for automated driving and
mobility services
› Continental provides components
with base SW
› EB offers open SW platform for
OEMs, Tier 1 and other parties,
enabling Software model as
Product and Service.
› Significant bigger scaling
opportunity
SW Platforms & Tools
November 10, 2016
Invention
Order
Sales
Growth Drivers Until Today and of Tomorrow Technology Leadership in New Businesses
15 Helmut Matschi © Continental AG
IIP = Integrated Interior Platform, ITS = Intelligent Transportation Systems, AR-HUD = Augmented Reality Head-Up Display, OTA = Over The Air, MFST = Multi Functional Smartphone Terminal, IAM = Intelligent Antenna Module
Instrument
Clusters
Radios
Haptic Controls
Body Controllers
Network Devices / IAM
Access Systems
Power Closures
Tachograph / Fleet-Management
Seat Comfort
Tire Information
Multimedia
Connectivity
Cockpit
Head-up Displays
Full digital Cluster
ProViu® 360
Displays
Invention
Order
Sales
eHorizon
Connected
Technician
Interior
Camera OTA keys
MFST
IIP
ProViu®
Mirror
AR-HUD
Lighting
November 10, 2016
Growth Drivers Until Today and of Tomorrow Interior Business of Tomorrow – Key Growth Drivers
2021
>10
2020 2019 2018 2017 2016
>8.2
Sales (€ bn)
Composition of additional sales
2021 vs 2016
25%
18%
19%
27%
November 10, 2016
16 Helmut Matschi © Continental AG
CVAM
ITS
ID
IC
B&S
>10%
11%
adj. EBIT
Agenda
3
1 Interior at a Glance
Growth Drivers Until Today and of Tomorrow 2
Opportunities of the Future
November 10, 2016
17 Helmut Matschi © Continental AG
Continental's view/position:
› Market for automated driving is
forecasted to exceed €20 bn
by 2020
› 60% of our Automotive Group sales in
2015 are derived from sensors,
electronics or software products
› Vision Zero accidents achievable
Opportunities of the Future Digitalization, Mobility Services and Electric Mobility
18 Helmut Matschi © Continental AG
Mobility Services
Digitalization
Continental's view/position:
› Market for mobility services is forecasted
to exceed €57 bn
by 2020
› Conti founded new Intelligent
Transportation Services (ITS) business
unit in 2014
› First applications include eHorizon and
Road Database
1 FEV = Full Electric Vehicle
Electric Mobility
Continental's view/position:
› FEV1 sales to account for 2% of global
car production by 2020
› Demand for FEV2 will be determined by
the cost, life-time, range and charging
time of the battery
› Conti has invested more than
€1 bn in electric mobility to date
November 10, 2016
19 Helmut Matschi © Continental AG
Opportunities of the Future Digitalization Comes with Different Waves
Systems Products
Mobility Services Closed Connected
Wave 1
Mechatronics
Wave 2
Systems
Wave 3
Connected Systems and services
November 10, 2016
Services
already
addressed
Digital
Services core
Digital Services
adjacent
Total IoT Market
~290 … ~630
A
B
e.g.:
▪ Hospitals: tracking of
patient conditions;
improved wellness
and fitness; …
▪ Retail: automated
store check-outs;
optimized store
layouts, …
▪ Cities: optimized
disaster management
▪ …
Currently
not in focus
▪ Expand in additional industries like factories,
construction, agriculture, cities
▪ Tracking, monitoring, management,
maintenance
▪ Car/Ride sharing
▪ Predictive maintenance
▪ Advanced traffic management systems
▪ Usage-based services (e.g. insurance)
▪ Road service: eHorizon, Road Database
▪ Commercial fleets and logistics
▪ E-tolling
Potential
Continental
value
proposition
Good match
with today’s
Continental
value
proposition
Services
Continental
is currently
developing/
offering Market size in USD billions, 2025
November 10, 2016
20 Helmut Matschi © Continental AG
Opportunities of the Future How Attractive is the Mobility Services Market?
Source:McKinsey
Systems
Opportunities of the Future Our Pipeline Towards Interior Service Solutions
November 10, 2016
21 Helmut Matschi © Continental AG
Products
Mobility Services
Closed Connected
eHorizon / Road Database
Remote Vehicle Diagnostics
OTA keys / Remote Cloud Key
TISWeb (Fleet services)
Continental.cloud
Integrated
Interior
Platform
Next E/E
Architecture
Interior is Ready to Grow Further
With consistent growth in products, systems solutions, electronics, software
and services, we aspire to cover 20% of our relevant market in next 5 years.
With our strategy to extend our portfolio towards Mobility Services, we
continue to invest in innovation and aspire to keep the
adj. EBIT>10% and ROCE>20%.
We outperform the market growth
and continue to be the preferred choice for our customers.
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Disclaimer › This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Capital Markets Day (CMD) on November 10, 2016, in
Regensburg. 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.
For your attention!
Thank you
24
November 10, 2016
Helmut Matschi © Continental AG
Questions to the Expert
Continental Capital Markets Day – November 10, 2016
www.continental-ir.com Interior Division
1,2
00
1,0
00
86
0
66
7
31
3
22
5
>2
,00
0
1,6
50
90
0 99
0
90
0
ContiADAS
BoschADAS
DensoADAS
AutolivASP
Mobileye Delphi DriverAssist
Valeo DA
2016 2020
1 2 3 4 5 6 7
Overview ADAS sales 2016 and 2019/2020 targets (mn €)
November 10, 2016
2 Ralf Lenninger and Rolf Woller, © Continental AG
1 Continental ADAS = Radar, Lidar, Camera and ECUs
2 Bosch online report; Bosch has not communicated any future ADAS sales target
3 Denso reports ADAS sales as part of “Information and safety systems”; Denso’s ADAS target 03/2021 looks for JPY 200 bn; sales are annualized
4 Autoliv’s active safety products: radar systems, vision and night systems, active seatbelts and brake systems, dynamic spot light and system integration; 2020 target
5 Mobileye 2016 sales represent latest consensus (Nov 2, 2016); company has the target to achieve 1.1 bn USD sales by 2019
6 Delphi 2016 sales represent latest company communication from Q2 2016 and target to achieve 1 bn USD sales by 2019
7 Valeo reports sales for comfort and driving assist only; company has no official target for future ADAS sales communicated
ProViu
Mirror
E-Horizon
Car2x
Advanced
HUD
Interior
Camera
Elektrobit
ADAS and Interior products for automated driving will
total >3 bn € in sales by 2020
Three Layer Model Addressable Market of More than €20 bn
3
Components Sensors
System
Electronics
Software
Integration
Environmental ModelSoftware
Electronics
Market
Size
by 2020
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Source: Continental estimates
Covering all Aspects of Automated Driving From Sensors to Connectivity and the Environmental Model
4
Powertrain
Management
Surround
View
Fail Operational Brake
Car2x - MK2xPro
Antenna
Module
Short /
Long Range
Radar
Flash-Lidar Domain Control Unit
Software - Continental Elektrobit - Software
Backend
Services
Driver Awareness
Driver HMI
Stereo / Mono
Camera
Interior Division Chassis & Safety Division
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Global Trend Antenna Network
5
México
Regensburg Shanghai
Singapore
Frankfurt
HOLM
Friedrichs-
hafen
Chinese Focus:
› Trends & User
Scenarios
› App Development
› Idea Hacks and
Demonstrators
› Society & CE
Trends
› Idea Hacks
› UI & UX Design
› Apps & Software
› Demonstrators
› User Centered
Development
› Apps & Software
UI & UX Design
› Trends in the
Americas
› ADAS Sensoric &
Functions
› Algorithms &
Software
Technologies
› Artificial
Intelligence &
Machine Learning
› Software
Technology
Trends
Trend
Antenna
Network
Cu
sto
me
r R
eq
ue
sts
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Source: Continental
6
Roadmap Towards Fully Automated Driving
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
We offer a Broad Range of Connectivity Solutions
7
MFST
Entry
Telematics
Premium
Telematics
Multimedia
w/ NAD
Digital
Tachograph
Diagnose
Dongle
IAM
Connected
Gateway Device
Connectivity
WLAN
NAD = Network Access Module, IAM = Intelligent Antenna Module, MFST = Multi Functional Smartphone Terminal
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Digitalization The Car a Rolling Computer
8
Boeing
7874
Mars Rover
"Curiosity"3
Drone2 Space shuttle1
0
5
10
15
Lines of code (millions)
Car Driving
Sub-System5
1 http://www.nasa.gov/pdf/418878main_FSWC_Final_Report.pdf and
NASA
2 http://www.wired.com/2012/11/navy-killer-drone/ and Northrop
3 http://www.verticalsysadmin.com/making_robust_software/ and NASA
4 Boeing
5 Own estimates
Up to
control units
More than
sensors actuators
More than
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
9
Our Service for Anticipated Driving Dynamic eHorizon: vehicle looks around the corner
To
po
log
y
AD
AS
H
D M
ap
an
d
Lo
calizati
on
D
yn
am
ic
Data
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Source: Continental
Digitalization Comes in Different Waves
10
Systems Products
Mobility Services
Closed Connected
Wave 1
Mechatronics
Wave 2
Systems Wave 3
Connected
Systems and
services
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Source: Continental
Vehicle and Cloud Data Volume Creating, Transmitting and Processing
Z KB/min
Transmitting
X KB/min.
Creating
1 GB Data/ 3min
Processing
X KB * Y Cars = www TB/min
11
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Source: Continental
Collaborative Approach: Private and Public Sector developing Smart Cities
12
› Park&Go @SG App shows drivers currently available
parking spaces, offers navigation and further services
for drivers in Singapore
› Continental also launches backend Platform in Singapore
– for Park&Go @SG and further connected services for
Intelligent Transportation Systems of the future
› Continental pledges initial investment towards the
development and deployment of Intelligent Intersection
Systems for U.S. DOT’s Smart City Challenge
› Continental will provide advanced sensing, vehicle-
to-vehicle and vehicle-to-infrastructure (V2X)
communication technology to increase traffic safety
at intersections and provide a platform for intelligent
transportation systems of the future
November 10, 2016
Ralf Lenninger and Rolf Woller, © Continental AG
Intelligent Transportation Systems (ITS) at Continental Our Vision
8 November 2016
13 Author, © Continental AG
Vision: Mobility 2025
› 20 million cars will be better
cars because of Conti ITS For example,
with eHorizon
› 25 million consumers
will have better mobile life
because of Conti ITS
For example,
with vAnalytics
› 20 cities will be better
cities because of Conti ITS For example,
with Park&Go
14
Disclaimer
› This presentation has been prepared by Continental Aktiengesellschaft solely in connection with the Capital Markets Day (CMD) on November 10, 2016, in Regensburg. 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.