Continental Shares and Bonds

Negative trend on the stock markets

The stock markets had a difficult year in 2022, particularly due to the effects of the war in Ukraine. Higher prices for natural gas and crude oil, as well as price increases and supply shortages for raw materials and semi-finished products due to disrupted supply chains, led to significant price rises for consumer goods during the reporting period. This in turn led to a sharp increase in inflation rates in many economies worldwide. Furthermore, the strict measures taken to contain the COVID-19 pandemic in China temporarily curbed local economic development and disrupted global supply chains due to port closures.

In order to curb inflation, various central banks raised their base rates from the second and third quarter onward, reversing their previously expansive monetary policy (such as the Federal Reserve, the Bank of England, the Swiss National Bank and the European Central Bank). This caused considerable losses on the stock markets in June and the third quarter.

Inflation rates eased slightly in the fourth quarter of 2022, fueling many investors’ hopes of a gradual rise in interest rates and an improvement to the economic situation in 2023. This shift in sentiment caused a slight recovery in share prices.

The DAX closed 2022 at 13,923.59 points. This represented a decline of 12.3% compared with the end of 2021, when it was quoted at 15,884.86 points. The EURO STOXX 50 fell by 11.7% in 2022 and ended the year at 3,793.62 points.

Price performance of Continental shares in 2022 versus selected stock indexes
(indexed to January 1, 2022; Data source: Bloomberg.)

Significant share price losses for automotive suppliers

Many automotive stocks were directly or at least indirectly affected by the aforementioned developments in 2022. Price increases for semiconductors and other electronic products primarily impacted suppliers of automotive components and systems during the reporting period, while tire manufacturers were affected by the noticeable rise in the cost of raw materials and energy. This resulted in significant share price losses for many listed suppliers. By contrast, strong demand for passenger cars allowed automotive manufacturers to raise prices for many models and make improvements to their product mix.

The STOXX Europe 600 Automobiles & Parts fell to 527.23 points in 2022, a decline of 20.1% compared with the end of 2021.

Weak performance by Continental shares

In the first quarter of 2022, Continental’s share price performance – like that of other automotive suppliers – suffered following the outbreak of the war in Ukraine because investors were concerned about lower production volumes and cost increases for raw materials and energy. This sharp decline was followed in the second quarter by a period of stabilization at a level between €60 and €75. On May 2, 2022, the dividend of €2.20 for fiscal 2021 resolved by the Annual Shareholders’ Meeting was marked down. In the third quarter, the weakening tire business led to a renewed decline in the Continental share price. In the fourth quarter, Continental shares recovered after the announcement of the figures for the first nine months of 2022, which were better than analysts and investors had expected.

At the end of 2022, Continental’s shares were listed at €55.98, down 39.9% compared with the year-end price of €93.11 in 2021. Taking into account a reinvestment of the dividend paid out on the distribution date, the share price declined by 37.8% in 2022.

Price losses for Continental bonds

Interest rates for European corporate bonds rose sharply in the reporting period as a result of the general rise in interest rates, causing a noticeable decline in bond prices.

The outstanding Continental bonds were also quoted at a considerably lower price at the end of 2022 compared with the end of 2021.

Successful placement of a new euro bond

Under the Debt Issuance Programme (DIP), a new Continental AG euro bond was successfully placed with investors in Germany and abroad at the end of November 2022.

The euro bond was offered on November 23, 2022, with an interest coupon of 3.625% p.a. and a term of five years. The nominal volume of the bond was set at €625.0 million. The issue price amounted to 100.000%. The bond was launched on the regulated market of the Luxembourg stock exchange on November 30, 2022.

Positive earnings per share

In the year under review, high cost increases for raw materials and input materials as well as for energy and logistics put a strain on the cost situation and operating result. This was accompanied by impairment losses owing to higher interest rates and other valuationrelated effects. Consequently, net income attributable to the shareholders of the parent decreased to €66.6 million in fiscal 2022 (PY: €1,435.2 million).

Earnings per share amounted to €0.33 in 2022 (PY: €7.18).

Dividend proposal of €1.50 for fiscal 2022

The Executive Board and the Supervisory Board have resolved to propose to the Annual Shareholders’ Meeting, which will be held virtually on April 27, 2023, that a dividend of €1.50 per share be paid out for the past fiscal year and that the retained earnings for fiscal 2022 be carried forward to new account.

For fiscal 2021, a dividend of €2.20 per share was paid out on May 4, 2022.

Share capital unchanged

As at the end of fiscal 2022, the share capital of Continental AG still amounted to €512,015,316.48. It is divided into 200,005,983 no-par-value shares with a notional value of €2.56 per share.

In line with Article 20 of Continental AG’s Articles of Incorporation, each share grants one vote at the Shareholders’ Meeting. The current Articles of Incorporation are available on our website at www.continental.com under Company/Corporate Governance.

All shares have the same dividend and voting rights.

Free float stable at 54.0%

As in the previous year, free float as defined by Deutsche Börse AG amounted to 54.0% as at the end of 2022. The most recent change took place on September 17, 2013, when our major shareholder, the IHO Group, Herzogenaurach, Germany, announced the sale of 7.8 million Continental shares, reducing its shareholding in Continental AG from 49.9% to 46.0%.

As at the end of 2022, the market capitalization of Continental AG amounted to €11.2 billion (PY: €18.6 billion). Market capitalization on the basis of free float averaged €6.1 billion over the last 20 trading days of the reporting year (PY: €10.1 billion). Free-float market capitalization is the decisive factor for index calculation in the regulatory framework of Deutsche Börse AG. At the end of 2022, Continental AG ranked 39th in terms of free-float market capitalization on the DAX (PY: 36th).

Free-float distribution largely stable in 2022

As at the end of the year, we once again determined the distribution of free float of Continental shares by way of shareholder identification (SID).

We were able to assign 106.4 million of the 108.0 million shares held in the form of shares or alternatively as American depositary receipts (ADRs) in the USA to more than 630 institutional investors, banks and asset managers across 42 countries. The identification ratio was 98.5% (PY: 97.6%).

According to the SID, the identified level of Continental shares held in Europe was slightly higher than the previous year at 49.7% of free float (PY: 49.0%).

The identified level of shares held by investors from the UK and Ireland was virtually unchanged compared with the previous year at 30.0% (PY: 29.7%).

The identified free-float holdings of German investors fell to 5.9% in the year under review (PY: 6.3%).

French investors held 3.5% of Continental free-float shares at the end of 2022 (PY: 3.4%).

The free-float holdings of Scandinavian investors increased to 3.6% in 2022 (PY: 3.1%).

Investors in other European countries increased their share of free float slightly to 6.7% in 2022 (PY: 6.5%).

Shareholdings of investors in North America remained at the high level of the previous year in 2022. In total, they held 46.0% (PY: 45.7%) of the free float in the form of shares or ADRs.

The identified shareholdings of investors in Asia, Australia and Africa were at 2.8% at the end of 2022 (PY: 2.9%).

Continental share listings

As at the end of fiscal 2021, the share capital of Continental AG still amounted to €512,015,316.48. It is divided into 200,005,983 no-par-value shares with a notional value of €2.56 per share.

In line with Article 20 of Continental AG’s Articles of Incorporation, each share grants one vote at the Shareholders’ Meeting. The current Articles of Incorporation are available on our website at www.continental.com under Company/Corporate Governance.

All shares, except treasury shares (December 31, 2021: three shares), have the same dividend and voting rights.

Continental share listings

Continental’s shares continue to be officially listed on the German stock exchanges in Frankfurt, Hamburg, Hanover and Stuttgart on the regulated market. They are also traded on other unofficial stock exchanges in Germany and in other countries around the world.

Continental ADR listings

In addition to being listed on European stock exchanges, Continental shares are traded in the USA as part of a sponsored ADR program on the over-the-counter (OTC) market. They are not admitted to the US stock market.

Continental Investor Relations online

For more information about Continental shares, bonds and credit ratings, please visit www.continental-ir.com.

All market prices are quotations of the Continental share in the Xetra system of Deutsche Börse AG. In order to improve comparability, figures prior to September 16, 2021, have been adjusted to account for the effect from the spin-off of Vitesco Technologies. Data source: Bloomberg.
1 In the year under review, the Continental Group changed the methodology used for the recognition of uncertain tax positions. The comparative period has been adjusted accordingly. For more information, see Note 2 (General Information and Accounting Principles) of the notes to the consolidated financial statements.
2 Subject to the approval of the Annual Shareholders’ Meeting on April 27, 2023.
3 Not applied.
4 Dividend per share at the annual average share price.