Continental : Integrated sustainability report

Integrated sustainability reporting concept

Continental has published a sustainability report every year since 2012 and a combined non-financial statement each year since 2018, with both reports looking at the past fiscal year. The main medium of our sustainability reporting is the integrated sustainability report. This report brings together information, in a modular for- mat, from the company's combined non-financial statement, management report, consolidated financial statements and other sources, as well as additional information.

Reporting standards

The reporting considers the standards of the Global Reporting Initiative (GRI), the UN Global Compact, the UN Sustainable Development Goals (SDG), the Task Force on Climate-related Financial Disclosures (TCFD), and the Sustainability Accounting Standards Board (SASB). The relevant references to the single standards can be found starting on page 129.

Reporting period

The report covers the 2023 fiscal year from January 1 to Decem- ber 31, 2023, and was published on April 22, 2024.

Scope of consolidation

The integrated sustainability report encompasses the same scope of consolidation as for the consolidated financial statements (see Note 2 "General Information and Accounting Principles" on page 136 of the annual report).

Material topics

The material topics in our sustainability strategy, and therefore our sustainability reporting, were identified in 2019 on the basis of a stakeholder survey of more than 1,700 stakeholders, as well as additional analyses. The table below provides an overview of these key topics and indicates the reports in which they are specifically covered.

Topics covered in the various reporting formats

The integrated sustainability report presents the management approach and results, including key performance indicators and other key figures and examples, for each key topic of the sustainability strategy. By contrast, the combined non-financial statement in accordance with Sections 315b and 315c in conjunction with Sections 289b to 289e of the German Commercial Code (HGB) focuses exclusively on information required by law.

Significance of color coding and the applicable auditor's report

Text and assurance markings

The main content of this integrated sustainability report is derived from Continental AG corporate publications, such as the consolidated financial statements, the annual report or the remuneration report, which were audited by an independent auditor. It should be noted that the audits were carried out in a different context, such as the statutory audit, and that the audited content for this integrated sustainability report was recompiled. Further selected information in this report was subject to an additional audit with limited assurance by an independent auditor. The entire integrated sustainability report has not been assured. The externally verified content is color-coded as per the following overview.

Source: 2023 Annual Report> Management Report > Corporate Profile > Structure of the Continental Group ( starting p. 28)

Automotive, Tires and ContiTech: the three strong pillars of the Continental Group.

Organizational structure

The Continental Group is divided into four group sectors: Automo- tive, Tires, ContiTech and Contract Manufacturing. As of January 1, 2024, these comprise a total of 16 business areas.

A group sector or business area with overall responsibility for a business, including its results, is classified according to product requirements, market trends, customer groups and distribution channels.

Business responsibility

Overall responsibility for managing the company is borne by the Executive Board of Continental Aktiengesellschaft (AG). The Auto- motive, Tires and ContiTech group sectors are each represented on the Executive Board.

The group functions of Continental AG are represented by the chairman of the Executive Board, the chief financial officer, the Executive Board member responsible for Human Relations and the Executive Board member responsible for Integrity and Law, and

assume the functions required to manage the Continental Group across the group sectors. They include, in particular, Finance, Con- trolling, IT, Human Relations, Sustainability, Law and Intellectual Property, Internal Audit, Quality Management, and Compliance. The Group Purchasing group function is represented by the Executive Board member responsible for the Tires group sector.

Customer structure

With a 64% share of consolidated sales, the automotive industry - with the exception of the replacement business - is our most important customer group. This industry is particularly important for the growth of the Automotive group sector. In the Tires group sec- tor, sales to dealers and end users represent the largest share of the tire-replacement business. In the ContiTech group sector, the customer base is made up of the energy, agriculture and construction industries, interior design and the automotive and replacement businesses. In the Contract Manufacturing group sector, Vitesco Technologies constitutes the sole customer.

Companies and locations

Continental AG is the parent company of the Continental Group. In addition to Continental AG, the Continental Group comprises 457 companies, including non-controlled companies. The Continental team is made up of 202,763 employees at 505 locations for pro- duction, research & development and administration in 56 countries and markets. Added to this are distribution locations, with 865 company-owned tire outlets and a total of around 5,300 franchises and operations with a Continental brand presence.

The Automotive group sector offers technologies for safety, brake, chassis, motion and motion-control systems. Its portfolio also includes innovative solutions for assisted and automated driving, display and operating technologies, audio and camera solutions for the vehicle interior as well as intelligent information and communication technology associated with the mobility services of fleet operators and commercial vehicle manufacturers. Comprehensive activities relating to vehicle connectivity, architecture and elec- tronics, as well as high-performance computers and software solu- tions, round off the range of products and services.

The group sector is divided into five business areas as of January 1, 2024:

• Architecture and Networking
• Autonomous Mobility
• Safety and Motion
• Software and Central Technologies
• User Experience

The Smart Mobility business area was discontinued effective Decem- ber 31, 2023, and since January 1, 2024, has been included in the Automotive group sector.

With its premium portfolio in the car, truck, bus, two-wheel and specialty tire segment, the Tires group sector stands for innovative solutions in tire technology. Intelligent products and services related to tires and the promotion of sustainability complete the portfolio. For specialist dealers and fleet management, Tires offers digital tire monitoring and tire management systems, in addition to other services, with the aim of keeping fleets mobile and increasing their efficiency. With its tires, Continental contributes to safe, efficient and environmentally friendly mobility. In the reporting year, 26% of sales in Tires related to business with vehicle manufactur- ers, and 74% related to the tire-replacement business. The group sector is divided into five business areas:

• Original Equipment
• Replacement APAC
• Replacement EMEA
• Replacement The Americas
• Specialty Tires

The ContiTech group sector focuses on development and materials expertise in products and systems made from rubber, plastic, metal and textiles, which can also be equipped with electronic components to optimize their functionality for custom service applica- tions. ContiTech's industrial growth areas are primarily in energy, agriculture and construction as well as interior design. ContiTech also serves the automotive and transportation industries along with the railway engineering sector. In the reporting year, 48% of sales in ContiTech related to business with automotive manufacturers, and 52% to business with other industries and in the automotive replacement market.

The group sector is divided into five business areas as of January 1, 2024:

• Industrial Solutions Americas
• Industrial Solutions APAC
• Industrial Solutions EMEA
• Original Equipment Solutions
• Surface Solutions

The Advanced Dynamics Solutions, Conveying Solutions, Industrial Fluid Solutions, Mobile Fluid Systems and Power Transmission Group business areas, as they existed in this setup until December 31, 2023, have been reassigned to the three regional Industrial Solutions business areas and the Original Equipment Solutions business area.

The contract manufacturing of products by Continental companies for Vitesco Technologies is consolidated in the Contract Manufacturing group sector. This contract manufacturing is not intended to be a permanent situation; rather, the operational separation of production will continue to be promoted and the volume of contract manufacturing reduced. Contract Manufacturing includes one business area:

• Contract Manufacturing

Globally interconnected value creation

Research and development (R&D) took place at 95 locations in the reporting year, predominantly in close proximity to our customers to ensure that Continental can respond flexibly to their various requirements and to regional market conditions. This applies particularly to projects of the Automotive and ContiTech group sectors. In the Tires group sector, R&D is largely centrally organized, since product requirements for tires are much the same across the world.

They are adapted according to the specific requirements of each market. Continental generally invests around 7% of sales in R&D each year. For more information, see the Research and Development section.

Continental processes a wide range of raw materials and semi-finished products. The purchasing volume in the reporting year was €29.1 billion in total, €19.8 billion of which was for production ma- terials. Electronics and electromechanical components together make up around 43% of the Continental Group's purchasing volume for production materials, which are primarily used in the Auto-

Globally interconnected value creation

motive and Contract Manufacturing group sectors, while mechanical components account for around 20%. Natural rubber and oil- based chemicals as well as synthetic rubber and carbon black are key raw materials for the Tires and ContiTech group sectors. The total purchasing volume for these materials likewise amounts to around 20% of the total volume for production materials. For more information, see the Development of Raw Materials Markets section in the economic report.

Production and sales in the Automotive and ContiTech group sectors are organized across regions. For the Tires group sector, economies of scale play a key role when it comes to tire manufacturing. Low production costs coupled with large volumes and proximity to our customers or high rates of regional growth constitute key success factors. For this reason, manufacturing takes place at major locations in the dominant automotive markets, namely Europe, the USA and China. Tires are sold worldwide via our dealer network with tire outlets and franchises, as well as through tire trading in general.