“Continental is well positioned,” stressed Nikolai Setzer, the technology company’s CEO, in his speech to the shareholders participating in the virtual 2022 Annual Shareholders’ Meeting in Hanover today. “We have a clear strategy. We have the right structure. We have a highly motivated team. And together we are gaining momentum.” Despite a market environment that remains difficult due to the consequences of disrupted supply chains and higher costs in purchasing and logistics, Setzer looks ahead with confidence. “We have laid the foundation for the future of your Continental. With a realigned strategy and an adapted structure that is clearly geared to our markets,” he said, referring to Continental’s clearly defined setup following the spin-off of the Vitesco Technologies powertrain business. “Three group sectors under one roof: Automotive, Tires and ContiTech. This makes us unique. No other company on the market can offer what we do,” explained Setzer.
New structure comprising three group sectors offers clear benefits
With its three group sectors, Continental covers important customer markets: automotive original equipment and spare parts manufacturers, fleet operators, major industrial customers and end customers. “This gives us three advantages,” said Setzer. “Downward and upward trends in the markets balance each other out depending on the situation; our broad positioning makes us attractive to employees and we create synergies.” For example, in addition to tires, Continental’s fleet customers also gain access to digital systems such as ContiConnect 2.0, which monitors tire condition in real time.
The same applies to the conventional automotive business, where Continental supplies software in addition to hardware. “What’s more,” explained Setzer, “we continue to provide updates after a new car goes into production, thus leveraging our full potential.” To this end, the technology company is also taking advantage of new partnerships. Its collaboration with Amazon Web Services, for instance, which began in 2021, aims to speed up the exchange of data within the vehicle infrastructure. Cars will thus be able to communicate even more efficiently with the cloud. “This helps with automated driving, and it makes autonomous driving possible in the first place,” emphasized Setzer. “With Horizon Robotics, we are developing artificial intelligence. And together with Kopernikus Automotive, we are making automated parking and maneuvering in factories possible.”
Continental continues to advance its portfolio strategy
Setzer further explained that the company’s own strengths and the right strategy are crucial for creating added value and gaining an edge over the competition: “Three pillars are crucial in this regard: enhancing performance, optimizing our portfolio and seizing our opportunities.”
Within its portfolio, Continental is driving forward more differentiated management of its businesses – and is structuring those with stable earnings differently from those that focus primarily on growth at present. “Our tire business, for example, is highly profitable. Here, we are therefore focusing on optimizing processes and investing,” explained Continental’s CEO. “Meanwhile, in areas such as automated or autonomous driving, our focus is on innovation, development and testing. In the medium term, however, growth here must also be profitable.”
Turning new trends into new opportunities
The key to profitable growth is to turn new trends into new opportunities in areas such as sustainability, safety and connectivity. “Here, we are at the forefront of the field,” said Setzer. “Take the example of our high-performance computers, or HPCs, which are already being used worldwide – in more than 20 vehicle models in 2021 and 2022 alone. They will also be used in electric cars from China from 2023.” As a control center, these computers are in charge of complex processes within the vehicle, such as the interior electronics, assistance systems and the data flows in the car.
The new cross-domain HPC that Continental is currently developing in China is even faster and controls multiple systems simultaneously, despite very different requirements. “We are also making headway in safe, connected and autonomous driving,” Setzer pointed out. “Here, too, we are among the leading suppliers. We have 42,000 engineers working on the mobility of tomorrow. In 2021 alone, we invested more than an additional €110 million in assisted and automated driving. On research and development as a whole, we spent €2.6 billion.”
Net|Zero|Now offers carbon neutrality along the entire value chain
Continental is also working hard to make mobility not only more comfortable, safer and more connected, but also more sustainable. With its Net|Zero|Now immediate action program for climate change mitigation, the technology company now offers its customers the opportunity to already achieve carbon neutrality today along the entire value chain for their business.
The aim of the program is to enable customers with ambitious sustainability goals to neutralize the remaining carbon backpack of their relevant business with Continental. This includes all emissions generated by processes at Continental and its suppliers as well as following end of use, but does not include the customer’s use phase and emissions. The carbon backpack is offset by an equal quantity of so-called negative emissions. “This means our customers can buy carbon-neutral products from us,” said Setzer. “In other words, we remove CO2 from the atmosphere by restoring ecosystems together with our partners.”
In this context, Net|Zero|Now complements CO2 reduction measures and sustainable innovations from Continental that have been developed over many years. These include the Conti GreenConcept tire. “More than 50% of the materials we use to manufacture this tire are renewable and reusable. In an industry first, the materials also include polyester from PET bottles,” said Setzer, describing the concept. “We will also make use of carbon black from scrap tires. Because we are convinced that a circular economy is the future. At the same time, we are working hard to obtain natural rubber from dandelions on an industrial scale – because sustainability is a key priority for us.”