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2019 Annual Report

 

TRANSFORMATION

2019 Annual Report

Continental Corporation - 2018 Annual Report
 

Structure of the Corporation

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New corporate structure to ensure long-term viability and strengthen competitiveness.

Continental has had a new organizational structure since January 1, 2020. The new structure will enable us to respond even more flexibly to the requirements of various customers, markets, government agencies and companies, and make faster and more efficient use of our opportunities.

Since October 1, 2019, the legally independent Powertrain business area (until December 31, 2019: primarily the Powertrain division) has been operating under the name Vitesco Technologies. This has no effect on the financial reporting of the Powertrain business area within the Continental Corporation. Subject to the approval of the Annual Shareholders’ Meeting on April 30, 2020, Vitesco Technologies will be spun off in the course of 2020.

New organizational structure
Continental has been divided into the group sectors Automotive Technologies, Rubber Technologies and Powertrain Technologies since January 1, 2020. These sectors comprise five business areas with 23 business units. A business area or business unit is classified according to technologies, product groups and services. The business areas and business units have overall responsibility for their business, including their results.

Business responsibility
Overall responsibility for managing the company is borne by the Executive Board of Continental Aktiengesellschaft (AG). Each business area is represented by one Executive Board member. An exception is the Powertrain business area, which has had its own management since January 1, 2019, following its transformation into an independent legal entity.

To ensure a unified business strategy in the Automotive Technologies group sector, the Automotive Board was established on April 1, 2019, with a member of the Executive Board as “spokesman.” The new board is intended to speed up decision-making processes and generate synergies from the closer ties between the Autonomous Mobility and Safety business area and the Vehicle Networking and Information business area.

With the exception of Corporate Purchasing, the central functions of Continental AG are represented by the chairman of the Executive Board, the chief financial officer and the Executive Board member responsible for Human Relations. They take on the functions required to manage the corporation across business areas. These include, in particular, finance, controlling, compliance, law, IT, sustainability, quality and environment.

Companies and locations
Continental AG is the parent company of the Continental Corporation. In addition to Continental AG, the corporation comprises 581 companies, including non-controlled companies. The Continental team is made up of 241,458 employees at a total of 595 locations in 59 countries and markets. The postal addresses of companies under our control are defined as locations.

595 locations in 59 countries and markets

595 locations in 59 countries and markets

Customer structure
With a 71% share of consolidated sales, the automotive manufacturing business is our largest customer group. The importance of this industry is accordingly high for the growth of the Automotive Technologies and Powertrain Technologies group sectors. In the Tires business area of the Rubber Technologies group sector, sales to end customers represent the largest share of the tire business. In the ContiTech business area, other key industries in addition to the automotive industry are important customers as well, such as railway engineering, machine and plant construction, mining and the replacement business.

Structure of the corporation in 2020

Structure of the corporation in 2020

Automotive Technologies (since January 1, 2020):

The Autonomous Mobility and Safety business area (until December 31, 2019: primarily the Chassis & Safety division) integrates safety technologies and controls vehicle dynamics to make driving safer and easier. The goal here is to implement “Vision Zero,” the vision of accident-free driving. The components and systems expertise of Autonomous Mobility and Safety are prerequisites for autonomous mobility. The business area is divided into four business units

  • Advanced Driver Assistance Systems
  • Hydraulic Brake Systems
  • Passive Safety & Sensorics
  • Vehicle Dynamics.

The Vehicle Networking and Information business area (until December 31, 2019: primarily the Interior division) develops components and end-to-end systems for connected mobility – hardware, software and services – across the strategic pillars of networking, information and integration. With solutions for networking, human-machine interaction, system integration and high-performance computing for passenger cars, light commercial vehicles and fleets, Vehicle Networking and Information ensures functioning networks and smooth information flows for connected mobility. The business area is divided into three business units:

  • Commercial Vehicles and Services
  • Connected Car Networking
  • Human Machine Interface

Rubber Technologies (until December 31, 2019: the Rubber Group):

The Tires business area (until December 31, 2019: the Tire division) offers the right tires for a broad range of applications – from cars, trucks, buses and specialist vehicles to bicycles and motorcycles. Services for dealers and fleet management as well as digital tire monitoring and management systems are further areas of focus. The aim is to contribute to safe, economical and ecologically efficient mobility. In the reporting year, 26% of sales related to business with vehicle manufacturers, and 74% related to the replacement business. The business area is divided into six business units:

  • Commercial Vehicle Tires
  • Original Equipment Passenger and Light Truck Tires (PLT)
  • Replacement, APAC (Asia and Pacific region) PLT
  • Replacement, EMEA (Europe, the Middle East and Africa) PLT
  • Replacement, The Americas (North, Central and South America) PLT
  • Two-Wheel Tires

The ContiTech business area (until December 31, 2019: the ContiTech division) develops, manufactures and markets products, systems and intelligent components made of rubber, plastic, metal and fabric. They are used in mining, agriculture, railway engineering, machine and plant construction, the automotive industry and other important sectors of the future. In the reporting year, 50% of sales related to business with vehicle manufacturers, and 50% related to business with other industries and in the replacement market. The business area is divided into seven business units:

  • Air Spring Systems
  • Conveying Solutions (until January 9, 2020: the Conveyor Belt Group)
  • Industrial Fluid Solutions
  • Mobile Fluid Systems
  • Power Transmission Group
  • Surface Solutions
  • Vibration Control

Powertrain Technologies (since January 1, 2020):

The Powertrain business area (until December 31, 2019: the Powertrain division) offers efficient and clean vehicle drive systems. It focuses on intelligent systems and components for the electrification of vehicles, as well as on electronic control units, sensors, actuators and exhaust-gas aftertreatment solutions. The business area is divided into three business units:

  • Electronic Controls
  • Electrification Technology
  • Sensing and Actuation

Structure of the corporation in 2019

Structure of the corporation in 2019

Interconnected value creation
Research and development (R&D) took place at 88 locations in the reporting year, predominantly in close proximity to our customers to ensure that we can respond flexibly to their various requirements and to regional market conditions. This applies particularly to projects of the Automotive Group and the ContiTech division. The product requirements governing tires are largely similar all around the world. They are adapted according to the specific requirements of each market. In this respect, R&D has a largely centralized structure in the Tires business area. Continental invests between 7% and 8% 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 €29.9 billion in total, €20.1 billion of which was for production materials. The Automotive Group uses primarily steel, aluminum, precious metals, copper and plastics. Key areas when it comes to purchasing materials and semi-finished products include electronics and electromechanical components, which together make up about 43% of the corporation’s purchasing volume of production materials. Furthermore, mechanical components account for nearly a quarter of production materials. Natural rubber and oil-based chemicals such as synthetic rubber and carbon black are key raw materials for the Rubber Group. The total purchasing volume for these materials amounts to around a sixth 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 Group and in the ContiTech division are organized across regions. Our tire production activities, in which economies of scale play a key role, are represented with major locations in the three dominant automotive markets in terms of production and vehicle numbers, namely Europe, the U.S.A. and China. Low production costs coupled with large volumes or high rates of regional growth constitute key success factors. Tires are sold worldwide via our dealer network with tire outlets and franchises, as well as through tire trading in general.

Globally interconnected value creation

Globally interconnected value creation

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Learn more about this and get networked with our online magazine.
Learn more about this and get networked with our online magazine.