- Solutions for threefold climate protection: ecological, social and economical
- The technology company is growing in the areas of software, and solutions for greater safety and clean drive systems
- Continental CEO Dr. Elmar Degenhart: “Continental is keeping its targets firmly in sight, particularly during the crisis.”
- The realignment of the company initiated in 2019 remains the most important task / Annual savings of approximately €500 million from 2023 onward
- Ongoing adjustment of cost structure to the decrease in global vehicle production: additional cost reduction of several hundred million euros by 2022
Hanover, July 14, 2020. “Continental is keeping its targets firmly in sight, particularly during the crisis,” Continental CEO Dr. Elmar Degenhart said today at the technology company’s 2020 Annual Shareholders’ Meeting, which was held virtually in Hanover. As the crisis persists, Continental will be resolutely continuing the realignment of the company initiated in 2019 and will be adjusting its financial structure to the decrease in global vehicle production. Continental is focusing on three areas of technology: digitalization; assisted and automated driving, with autonomous driving based on this concept; and emission-free drive systems. “Because we have committed to innovation at an early stage and are pursuing it with vigor and purpose, we are and will remain a pioneer in the industry,” said Degenhart.
Continental technologies are geared toward competitiveness and future viability, and thus support sustainable growth. “Our heart beats for a healthy mobility ecosystem,” explained Degenhart. “This is a system in which all three key requirements are balanced: ecologically, economically and socially.” The solutions developed by Continental pave the way for this by enhancing environmental protection and supporting carbon neutrality, by placing an emphasis on affordability and by facilitating personal mobility for individuals. “This huge task starts with us. As early as this year, we will buy electricity only from verified renewable sources for all our plant locations worldwide,” said Degenhart, outlining the company’s roadmap. “By 2040, our production will be carbon-neutral and by 2050 we will eliminate CO2 emissions in all the stages of our value chain.”
Growth with software as well as safety and clean drive systems
Continental is harnessing digitalization and software to drive its profitable and sustainable growth. “Software is the oxygen of industry, since it lays the foundation for completely new services. Value creation with software is recording double-digit percentage growth each year,” explained Degenhart. Backed by high-performance computers – the digital heart of vehicles – Continental already generates sales exceeding €3 billion (calculated over the life of the car model series in question). “One customer alone will have received 2.5 million such computers from Continental by 2022. And this is only the beginning. By 2022, we expect more than ten further projects for this innovation,” said Degenhart.
Digitalization is equally decisive for new mobility-related services. “We’re making sure almost all of our products are smart, and we’re digitalizing tires and air-spring systems, for example. Demand is already very high for tire data, which is transmitted via our digital services to vehicle fleet operators. We are thus expanding our business with fleets, generating sales of around €1 billion annually,” said Degenhart. The plan is to triple these sales by 2030. “In our opinion, it is digitalization that offers the greatest potential for increasing efficiency in production in the years ahead. Currently, we’ve already deployed 1,600 collaborative robots in this area, which work hand-in-hand with their human colleagues,” explained Degenhart.
A second growth area for Continental is the business with systems for assisted and automated driving. “We’re developing these technologies with a view to zero accidents and zero fatalities on roads. The driver assistance system business is experiencing growth like no other,” said Degenhart. In addition, Continental currently sells around 350 million sensors annually in the area of passive safety. With respect to the brakes business, Degenhart projected that just shy of 40 million highly integrated braking systems will be produced by the company by 2023.
The third growth area for Continental is technologies for clean vehicle drive systems. “The ‘e’ in e-mobility does not stand just for ‘electric.’ It also stands for ‘emission-free.’ Whether with batteries or fuel cells, e-mobility is a real growth market. It therefore offers huge potential for Vitesco Technologies,” explained Degenhart. For most products in the drive systems family, Continental is expecting the market to grow by approximately 30 percent annually in the next five years.
The roadmap out of the crisis
“A winner delivers good results, even under bad circumstances,” Degenhart emphasized. “We are persistently maintaining our position among the global elite when it comes to the providers of top technologies and software. To compete in such a field, you have to maximize your competitiveness and future viability.” With that in mind, Continental is systematically focusing on implementing its crisis plan, where protecting the health of the workforce takes top priority.
The realignment of the company initiated in 2019 is being continued during the crisis. “Our restructuring plan is our path into the future. It is and remains our most important task,” underscored Degenhart when addressing the shareholders. “We’re expanding our portfolio where it is growing profitably and making it even more fit for the future. We’re also speeding up our processes by introducing even leaner structures.” Building on this strategy, Continental is planning annual savings of around €500 million from 2023.
Degenhart stated that a key task for Continental is to realign the company to lower global vehicle production, with market observers forecasting production volume for passenger cars and light commercial vehicles in 2020 of 70 million vehicles at most. Continental predicts that the record level seen in 2017 totaling over 95 million units will not be witnessed again before 2025 at the earliest.
“We’re building ourselves a bridge over the coming years; a ‘corona bridge’ that will make us successful once again,” Degenhart said, visualizing the company’s activities. By minimizing overcapacities, decreasing investments, and reducing working capital as well as labor and material costs, Continental plans to save an additional several hundred million euros by 2022.
Please find here all information about the 2020 Annual Shareholders' Meeting.