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1、Creating Value.For a Better Tomorrow.2022 Annual Report Sales at 39.4 billion Adjusted EBIT margin at 5.0%Equity ratio at 36.2%Continental successfully completed the spin-off of Vitesco Technologies on September 15,2021,which resulted in the application of IFRS 5,Non-current Assets Held for Sale and

2、 Discontinued Operations,in the comparative period.Vitesco Technologies is reported as discontinued operations in the comparative period.Key Figures The following table generally shows the figures for continuing operations in the reporting and comparative periods,with free cash flow(continuing and d

3、iscontinued operations),net income attributable to the shareholders of the parent and earnings per share referring to continuing and discontinued operations in the comparative period.millions 2022 2021 in%Sales 39,408.9 33,765.2 16.7 EBITDA 3,966.0 4,104.2 3.4 in%of sales 10.1 12.2 EBIT 754.8 1,845.

4、8 59.1 in%of sales 1.9 5.5 Net income attributable to the shareholders of the parent1 66.6 1,435.2 95.4 Basic earnings per share in 1 0.33 7.18 95.4 Diluted earnings per share in 1 0.33 7.18 95.4 Adjusted sales2 39,265.6 33,606.3 16.8 Adjusted operating result(adjusted EBIT)3 1,950.7 1,854.7 5.2 in%

5、of adjusted sales 5.0 5.5 Free cash flow(continuing operations)90.6 1,070.3 91.5 Free cash flow(continuing and discontinued operations)90.6 1,372.4 93.4 Net indebtedness 4,499.4 3,765.5 19.5 Gearing ratio in%1 32.8 29.7 Total equity1 13,735.0 12,668.5 8.4 Equity ratio in%1 36.2 35.5 Number of employ

6、ees as at December 314 199,038 190,875 4.3 Dividend per share in 1.505 2.20 Share price at year end6 in 55.98 93.11 39.9 Share price at year high6 in 99.80 118.53 Share price at year low6 in 44.31 87.53 1 In the year under review,the Continental Group changed the methodology used for the recognition

7、 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 Before changes in the scope of consolidation.3 Before amortization of intangible asse

8、ts from purchase price allocation(PPA),changes in the scope of consolidation,and special effects.4 Excluding trainees.5 Subject to the approval of the Annual Shareholders Meeting on April 27,2023.6 All market prices are quotations of the Continental share in the Xetra system of Deutsche Brse AG.In o

9、rder 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.Continental Group 2022 As part of the new organizational structure in place since January 1,2022,the Continental Group is divi

10、ded into the group sectors Auto-motive,Tires,ContiTech and Contract Manufacturing.All key figures for the group sectors reflect this over the entire reporting period and are adjusted accordingly for the comparative period.Key figures for the group sectors Automotive Tires ContiTech Contract Manufact

11、uring millions 2022 2021 in%2022 2021 in%2022 2021 in%2022 2021 in%Sales 18,321.6 15,357.4 19.3 14,005.2 11,807.6 18.6 6,594.3 5,912.6 11.5 665.6 889.6 25.2 EBITDA 962.5 666.8 44.3 2,644.7 2,525.9 4.7 486.4 833.7 41.7 44.7 194.2 77.0 in%of sales 5.3 4.3 18.9 21.4 7.4 14.1 6.7 21.8 EBIT 970.1 374.6 1

12、59.0 1,723.6 1,700.6 1.4 166.5 514.7 67.7 9.5 130.4 92.7 in%of sales 5.3 2.4 12.3 14.4 2.5 8.7 1.4 14.7 Adjusted sales1 18,219.6 15,357.4 18.6 14,005.2 11,807.6 18.6 6,553.0 5,753.7 13.9 665.6 889.6 25.2 Adjusted operating result(adjusted EBIT)2 30.1 215.2 86.0 1,841.6 1,729.2 6.5 308.1 429.3 28.2 2

13、.9 104.0 97.2 in%of adjusted sales 0.2 1.4 13.1 14.6 4.7 7.5 0.4 11.7 1 Before changes in the scope of consolidation.2 Before amortization of intangible assets from purchase price allocation(PPA),changes in the scope of consolidation,and special effects.Continental GroupSales:39.4 billion;Employees:

14、199,038Structureof theContinental Group in 2022AutomotiveSales:18.3 billionEmployees:97,575TiresSales:14.0 billionEmployees:56,987ContiTechSales:6.6 billionEmployees:41,798Contract ManufacturingSales:0.7 billionEmployees:2,192Overview of the Continental Group and 2022 Key Figures“Continental is stro

15、ng.Even in challenging times,we strive with our products and solutions to make the world a little better shaping tomorrows mobility today.”Find out more in ouronline magazine:Nikolai Setzer Chairman of the Executive BoardC2To Our ShareholdersKey Figures for the Continental GroupOverview of the Conti

16、nental Group and Key FiguresChairmans LetterMembers of the Executive BoardContinental Shares and BondsCorporate GovernanceReport of the Supervisory Board Corporate Governance Statement Pursuant to Sections 289f and 315d of the German Commercial Code(Handelsgesetzbuch HGB)23Management ReportGlossary

17、of Financial TermsCorporate ProfileStructure of the Continental GroupStrategy of the Continental GroupCorporate ManagementResearch and DevelopmentSustainability and Combined Non-Financial StatementInformation on ReportingSustainability Management in the Continental GroupDevelopment of Material Topic

18、 Areas Information in Accordance with the EU Taxonomy Regulation Information on the Development of Other Sustainability Topic AreasEconomic ReportGeneral ConditionsMacroeconomic DevelopmentDevelopment of Key Customer Sectors and Sales RegionsDevelopment of Raw Materials MarketsEarnings,Financial and

19、 Net Assets PositionEarnings PositionFinancial PositionNet Assets PositionDevelopment of the Group Sectors Automotive Tires ContiTechContract ManufacturingOverall Statement on the Business Performance and Position of the Continental GroupC2C34671010152426262932353737373946535454545455575866687272757

20、77981ContentsContinental AG Short Version in Accordance with HGBOther InformationDependent Company ReportAdditional Disclosures and Notes Pursuant to Sections 289a and 315a HGB Remuneration of the Executive BoardCorporate Governance Statement Pursuant to Sections 289f and 315d HGBReport on Risks and

21、 OpportunitiesContinentals Internal Control SystemMaterial RisksFinancial RisksRisks Related to the Markets in which Continental OperatesRisks Related to Continentals Business OperationsLegal and Environmental RisksMaterial OpportunitiesStatement on Overall Risk and Opportunities SituationReport on

22、Expected DevelopmentsFuture General ConditionsForecast of Macroeconomic DevelopmentForecast for Key Customer Sectors and Sales RegionsOutlook for the Continental Group107Consolidated Financial StatementsStatement of the Executive BoardIndependent Auditors ReportConsolidated Statement of IncomeConsol

23、idated Statement of Comprehensive IncomeConsolidated Statement of Financial PositionConsolidated Statement of Cash FlowsConsolidated Statement of Changes in EquityNotes to the Consolidated Financial StatementsSegment ReportingGeneral Information and Accounting PrinciplesNew Accounting Pronouncements

24、Companies Consolidated and Information on Subsidiaries and InvestmentsAcquisition and Disposal of Companies and Business OperationsNotes to the Consolidated Statement of IncomeNotes to the Consolidated Statement of Financial PositionOther Disclosures 217Further InformationResponsibility Statement by

25、 the Companys Legal RepresentativesMembers of the Executive Board and Their DirectorshipsMembers of the Supervisory Board and Their DirectorshipsTen-Year Review Continental GroupFinancial CalendarPublication Details8285858586878888929293949699100101101101101103108109115116117119121122122130144146147

26、149158208218219220222223223Continental AG 2022 Annual Report To Our Shareholders Chairmans Letter 4 Dear shareholders,After an eventful 2022,Continental can look ahead with confidence.Even though our earnings were impacted by the COVID-19 pandemic,the semiconductor shortage and soaring costs for raw

27、 materials,semi-finished products,energy and logistics,we continued to turn change into opportunity and achieved further success with the measures we have implemented across the corporation.We met the vast majority of our key operational targets in 2022,as shown by our results:With sales of 39.4 bil

28、lion,we exceeded the previous years figure of 33.8 billion by around 17 percent.The Tires group sector achieved a particularly positive result,even surpassing expectations with an adjustedEBIT margin of 13.1 percent.The Automotive group sector also posted pleasing growth in the third and fourth quar

29、ters of 2022,outperform-ing the market.In addition,its order intake was 26 percent higher year-on-year.At 200 million,our adjusted free cash flow fell short of expectations.We must improve in this area.The under-performance is attributable to lower-than-expected cash receipts as at the end of the re

30、porting period.Earningsin the ContiTech group sector were also lower than anticipated.Everything we achieved in 2022 was thanks to the outstanding hard work and commitment of our around 200,000 employees worldwide.They deserve our appreciation,gratitude and respect.Based on our results for 2022,the

31、Executive Board and Supervisory Board have resolved to propose a dividend of 1.50 per share to the Annual Shareholders Meeting.Chairmans Letter Continental AG 2022 Annual Report To Our Shareholders Chairmans Letter 5 With this dividend,we are sending a clear signal that Continental is strong and tha

32、t we are looking ahead with respect,determination and confidence.There are several key reasons behind this decision:We are enjoying good momentum.Market observers predict that global vehicle production could grow by more than 3 percent this year to around 85 million units worldwide.We have implement

33、ed more focused cost management.We have made our procurement and logistics chain even more integrated including in the electronics sector.We have expanded our supplier base,thus enhancing our flexibility.We have had successful price negotiations with our customers to limit the consequences of,for ex

34、ample,raw material shortages and the resulting price developments.We are focusing even more intensively on the stricter global compliance requirements and have set up an Exec-utive Board function dedicated to dealing with this topic.Thanks to our corporate structure and focused strategy,we have much

35、 greater potential to create value.We already offer our customers the solutions for the mobility of tomorrow,including software-controlled applications for auto-mated and autonomous driving,digital solutions in the industrial business,the latest display technologies,innova-tive brakes,smart and sust

36、ainable tires,as well as innovative surfaces that are used not only in vehicles but also in industry and peoples homes.As a result,we are sticking to our mid-term targets.For the Continental Group,our aim is to achieve an adjusted EBIT margin of around 8 to 11 percent and a return on capital employe

37、d of around 15 to 20 percent.Even in challenging times,we strive with our products and solutions to make the world a little better shaping tomorrows mobility today.Nikolai Setzer Chairman of the Executive Board Katja DrrfeldBorn in 1972 in Gttingen,GermanyGroup Finance and ControllingGroup Informati

38、on TechnologyAutomotive Finance and ControllingAppointed until December 2024Nikolai SetzerBorn in 1971 in Gro-Gerau,GermanyChairman of the Executive BoardChairman of the Automotive BoardGroup Communications and Public AffairsGroup ComplianceGroup Law and Intellectual PropertyGroup Quality,Technical

39、Compliance,Continental Business System and EnvironmentGroup StrategyAppointed until March 2024Christian KtzBorn in 1970 in Braunschweig,GermanyTires Group SectorGroup PurchasingAppointed until April 2027Philip NellesBorn in 1974 in Berlin,GermanyContiTech Group SectorAppointed until May 2024 Dr.Aria

40、ne ReinhartBorn in 1969 in Hamburg,GermanyGroup Human RelationsDirector of Labor RelationsGroup SustainabilityAppointed until September 2025Members of the Executive Board Continental AG 2022 Annual Report To Our Shareholders Continental Shares and Bonds 7 Data source:Bloomberg.Negative trend on the

41、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 significan

42、t price rises for consumer goods during the report-ing 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

43、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).Th

44、is 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 im-provement to the economic situation in 2023.This shift in senti-ment caused a sligh

45、t 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.Significant share price losses for automotive suppli

46、ers 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 report-ing period,while tire manufacturers

47、 were affected by the noticeable rise in the cost of raw materials and energy.This resulted in signifi-cant 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 produc

48、t 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,Continentals share price performance like that of other automotive suppliers suffered following the out-break

49、 of the war in Ukraine because investors were concerned about lower production volumes and cost increases for raw materi-als and energy.This sharp decline was followed in the second quar-ter by a period of stabilization at a level between 60 and 75.On May 2,2022,the dividend of 2.20 for fiscal 2021

50、resolved by the Annual Shareholders Meeting was marked down.In the third quar-ter,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

51、better than analysts and investors had expected.At the end of 2022,Continentals 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.Contin

52、entalDAXSTOXX Europe 600 Automobiles&PartsEURO STOXX 50Price performance of Continental shares in 2022 versus selected stock indexesIndexed to January 1,2022406080100120DecemberJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberContinental Shares and Bonds Continental AG 2022 Annual R

53、eport To Our Shareholders Continental Shares and Bonds 8 Continentals key bonds outstanding as at December 31,2022 WKN/ISIN Coupon p.a.Maturity Volume in millions Issue price Price as at Dec.31,2022 Price as at Dec.31,2021 A2YPE5/XS2051667181 0.000%September 12,2023 500.0 99.804%98.078%100.209%A28XT

54、Q/XS2178585423 2.125%November 27,2023 750.0 99.559%98.876%103.946%A28YEC/XS2193657561 1.125%September 25,2024 625.0 99.589%96.018%102.625%A2YPAE/XS2056430874 0.375%June 27,2025 600.0 99.802%92.549%100.627%A28XTR/XS2178586157 2.500%August 27,2026 750.0 98.791%95.896%109.623%A30VQ4/XS2558972415 3.625%

55、November 30,2027 625.0 100.000%97.187%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 a

56、t a considera-bly 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 offe

57、red 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

58、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 im-pairment losses owing to higher interest rates and other valuation-related effects.Consequen

59、tly,net income attributable to the share-holders 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 An

60、nual 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.Shar

61、e 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 AGs Articles of Incorporation,each share grants one

62、vote at the Shareholders Meeting.The current Articles of Incorporation are available on our website at 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 Brse AG amounted to 54.0%a

63、s 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 Conti-nental AG from 49.9%to 46.0%.As at the end of 2022,the market capitaliza

64、tion 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 trad-ing days of the reporting year(PY:10.1 billion).Free-float market capitalization is the decisive factor for index calculation in the regu-lator

65、y framework of Deutsche Brse AG.At the end of 2022,Conti-nental 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 wa

66、y of shareholder identifica-tion(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

67、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 previ

68、ous 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%).Continental AG 2022 Annual Report To Our Shareholders Continental Shares and Bonds 9 Continental share data Type of share No-par-value share German stock exchanges (regula

69、ted market)Frankfurt(Prime Standard),Hamburg,Hanover,Stuttgart German securities code number(WKN)543900 ISIN DE0005439004 Reuters ticker symbol CONG Bloomberg ticker symbol CON Index memberships(selection)DAX,Prime All Share,Prime Automobile,NISAX Outstanding shares as at December 31,2022 200,005,98

70、3 Free float as at December 31,2022 54.0%Continentals American depositary receipt(ADR)data Ratio 1 share:10 ADRs SEDOL number 2219677 ISIN US2107712000 Reuters ticker symbol CTTAY.PK Bloomberg ticker symbol CTTAY ADR level Level 1 Trading OTC Sponsor Deutsche Bank Trust Company Americas ADRs issued

71、as at December 31,2022 35,119,000(with 3,511,900 Continental shares deposited)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 the

72、ir 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 an

73、d Africa were at 2.8%at the end of 2022(PY:2.9%).Continental share listings Continentals 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

74、 other countries around the world.Continental ADR listings In addition to being listed on European stock exchanges,Continen-tal 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 Relatio

75、ns online For more information about Continental shares,bonds and credit ratings,please visit www.continental-.Key figures of the Continental share (unless otherwise specified)2022 2021 Basic earnings per share1 0.33 7.18 Diluted earnings per share1 0.33 7.18 Dividend per share 1.502 2.20 Dividend p

76、ayout ratio(%)1 3 30.6 Dividend yield4(%)2.32 2.1 Share price at year end 55.98 93.11 Annual average share price 66.01 103.03 Share price at year high 99.80 118.53 Share price at year low 44.31 87.53 Number of outstanding shares,average(in millions)200.0 200.0 Number of outstanding shares as at Dece

77、mber 31(in millions)200.0 200.0 All market prices are quotations of the Continental share in the Xetra system of Deutsche Brse 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:Bl

78、oomberg.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 fin

79、ancial 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.Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 10 Dear shareholders,The Supervisory Board comprehensively f

80、ulfilled all tasks incumbent upon it under applicable law,the Articles of Incorporation and By-Laws in fiscal 2022.We closely supervised,carefully monitored and advised the Executive Board in the management of the company.We were directly involved in a timely manner in all decisions of fun-damental

81、importance to the company.The Executive Board provided the Supervisory Board with regular,timely and comprehensive updates at its meetings as well as ver-bally and in writing on all issues of relevance to the company.In particular,these include the business performance,business strat-egy,planning,si

82、gnificant business transactions in the company and the Continental Group,and the related risks and opportunities,as well as compliance issues.The members of the Supervisory Board were also available to the Executive Board for consultation outside the meetings.As chairman of the Supervisory Board,I h

83、ad regular contact with the members of the Executive Board,in particular with its chairman,and discussed current company issues and develop-ments with them.Pursuant to a suggestion of the German Corpo-rate Governance Code,I also held discussions with investors in 2022 on topics specific to the Super

84、visory Board.Meetings of the Supervisory Board and the committees Meetings of the Supervisory Board took place both virtually and in person in fiscal 2022.In total,the Supervisory Board convened for five ordinary meetings and one extraordinary meeting in 2022,as well as for the strategy meeting.The

85、September and December meetings and the strategy meeting were held in person,while the other meetings took place virtually.At its meetings,the Supervisory Board regularly conferred part of the time in the absence of the Executive Board.In addition to these meetings,the Supervisory Board passed two r

86、esolutions by written procedure,one of which was passed only by the shareholder representatives.The Chairmans Committee held two meetings in the reporting year(one virtually and one in person)and passed two resolutions by written procedure.The Audit Committee met four times virtually in 2022 and pas

87、sed one resolution by written procedure.The Nomi-nation Committee passed one resolution by written procedure and also prepared the appointment of a new member to the Supervisory Board and the revision of its profile of skills and expertise.The Me-diation Committee in accordance with Section 27(3)of

88、the German Co-determination Act(Mitbestimmungsgesetz MitbestG)was not required to meet in 2022,and neither was the Committee for Re-lated Party Transactions(RPT Committee).The special committee formed in connection with the Supervisory Boards investigation into the manipulation of emission limits by

89、 certain automotive manufacturers(Special Emissions Committee)met twice in the year under review.At its December meeting,the Supervisory Board additionally formed a further special committee to support the Supervisory Boards investigation into irregularities in the production of air conditioning lin

90、es and industrial hoses in two business areas of the ContiTech group sector(Special Conti-Tech Committee).The Special ContiTech Committee did not hold any meetings in the year under review.There are no other committees.All committees report to the plenary session.The corporate governance statement p

91、ursuant to Sections 289f and 315d of the German Commercial Code(Handelsgesetz-buch HGB)starting on page 15 describes their responsibilities in more detail and names their members.The following overview provides information on the individual attend-ance of the Supervisory Board members at meetings of

92、 the Super-visory Board and its committees.Individual attendance of Supervisory Board members at in-person and virtual meetings of the Supervisory Board and its committees in fiscal 2022 Attendance Number of meetings Percentage Supervisory Board plenary session Prof.Dr.-Ing.Wolfgang Reitzle(chairman

93、)7/7 100 Dorothea von Boxberg(since April 29,2022)4/5 80 Stefan E.Buchner 7/7 100 Dr.Gunter Dunkel 7/7 100 Satish Khatu 6/7 85.71 Isabel Corinna Knauf 7/7 100 Sabine Neu 7/7 100 Prof.Dr.Rolf Nonnenmacher 6/7 85.71 Klaus Rosenfeld 7/7 100 Georg F.W.Schaeffler 7/7 100 Maria-Elisabeth Schaeffler-Thuman

94、n (until April 29,2022)2/2 100 Christiane Benner 7/7 100 Hasan Allak 6/7 85.71 Francesco Grioli 7/7 100 Michael Iglhaut 7/7 100 Carmen Lffler 7/7 100 Dirk Nordmann 7/7 100 Lorenz Pfau 7/7 100 Jrg Schnfelder 7/7 100 Stefan Scholz 7/7 100 Elke Volkmann 7/7 100 Chairmans Committee Prof.Dr.-Ing.Wolfgang

95、 Reitzle(chairman)2/2 100 Christiane Benner 2/2 100 Georg F.W.Schaeffler 2/2 100 Jrg Schnfelder 2/2 100 Corporate Governance Report of the Supervisory Board Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 11 Attendance Number of meetings Percentage Audit Committee Prof.Dr.

96、Rolf Nonnenmacher(chairman)4/4 100 Francesco Grioli 3/4 75 Michael Iglhaut 4/4 100 Dirk Nordmann 4/4 100 Klaus Rosenfeld 4/4 100 Georg F.W.Schaeffler 4/4 100 Special Emissions Committee Prof.Dr.-Ing.Wolfgang Reitzle 2/2 100 Dirk Nordmann 2/2 100 Georg F.W.Schaeffler 1/2 50 Key topics dealt with by t

97、he Supervisory Board and the Chairmans Committee At each ordinary meeting of the plenary session,the Executive Board informed the Supervisory Board in detail of the sales,results and employment development in the Continental Group and indi-vidual group sectors as well as the financial situation of t

98、he com-pany.Where the actual course of business deviated from the de-fined plans and targets,the Executive Board provided detailed expla-nations.It discussed the reasons for these deviations and the measures introduced in depth with the Supervisory Board.In addi-tion,the Executive Board regularly in

99、formed us about the Continen-tal Groups main raw materials and sales markets and about Conti-nental AGs share price performance.As part of this regular report-ing,the Executive Board also went into detail on the impact of the war in Ukraine on the company.In addition,the work of the Supervisory Boar

100、d and its collaboration with the Executive Board in the year under review continued to be shaped by the transformation process in the automotive industry and its consequences for the company.Another focus of the Super-visory Boards work was again on the Supervisory Boards investiga-tion into the man

101、ipulation of emission limits in vehicles of specific automotive manufacturers,including monitoring of the correspond-ing investigative proceedings by public prosecutors.The Supervisory Board discussed this at each ordinary meeting.The Special Emis-sions Committee formed in connection with this matte

102、r also met twice in 2022.Finally,the Supervisory Board addressed cybersecu-rity and the cyberattack on Continental in detail,as well as the irreg-ularities in the production of air conditioning lines and industrial hoses in two business areas of the ContiTech group sector.At the meeting on March 17,

103、2022,we discussed and subse-quently approved the companys annual financial statements and the consolidated financial statements for 2021.We also approved both the decision by the Executive Board to hold the 2022 Annual Shareholders Meeting virtually and the draft agenda for the Annual Shareholders M

104、eeting,and resolved the proposed resolutions of the Supervisory Board to the Annual Shareholders Meeting.In addition,we discussed the acquisition of US conveyor belt manufacturer WCCO Belting,LLC,Wilmington,Delaware,USA,by the ContiTech group sector and the sale of a product line from the Automotive

105、 group sector.Measures from the Supervisory Boards self-assessment in 2021 were also discussed at the meeting,and we resolved to implement the proposed improvement measures.These include,for example,establishing a further regular plenary meeting per fiscal year.We also passed a resolution on the app

106、roval in principle of the reassignment of 24.9%of the shares in ContiTech AG,Hanover,from Continental Pension Trust e.V.,Hanover,to the Continental Group.Final approval on this reassignment was resolved by written procedure at the end of May on the recommendation of the Audit Committee.In addition,w

107、e resolved to update the declaration in accordance with Section 161 of the German Stock Corporation Act(Aktien-gesetz AktG)on the recommendations of the German Corporate Governance Code,since the circumstances that required a change to the declaration in connection with the spin-off of Vitesco Tech-

108、nologies Group AG in September 2021 no longer applied.At the Supervisory Board meeting on April 29,2022,in addition to the ongoing business development,we also discussed in depth the Continental Groups business activities in Russia,particularly with respect to the Tires group sector.We also received

109、 reports from the Executive Board on how the company is responding to supply shortages and price increases in the supply of energy.In implementing concrete measures following the Supervisory Boards self-assessment,an additional ordinary meeting of the Supervisory Board was held for the first time on

110、 June 23,2022.The transformation process in the automotive industry was an important topic of discussion at this meeting.In addition,the head of Compliance reported on the future organizational structure for compliance,and the Executive Board provided an update on the Continental Groups current insu

111、rance situation.At the full-day strategy meeting held on September 21,2022,the Executive Board and the Supervisory Board once again dis-cussed in detail the strategic objectives and strategic planning of the Continental Group,the Automotive group sector(with a focus on the Autonomous Mobility busine

112、ss area)and the Tires and Conti-Tech group sectors,the Continental Groups sustainability require-ments and the HR strategy.Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 12 We again devoted a larger part of the meeting on September 22,2022,to discussions without the Execu

113、tive Board,including discus-sions relating to the succession planning for the Executive Board.In the course of the presentation on ongoing business development,we discussed with the Executive Board the current status of the cyberattack on Continental and the potential impact on the com-pany.The curr

114、ent situation of the locations in Russia and possible options were discussed once again.In addition,we addressed issues of corporate governance.Given the new version of the German Corporate Governance Code,we discussed amendments to the Supervisory Boards profile of skills and expertise and resolved

115、 amendments to the By-Laws of the Supervisory Board and to the By-Laws of the Audit Committee.The extraordinary meeting of the plenary session on Novem-ber 22,2022,focused exclusively on the cyberattack on the com-pany.At this meeting,the Executive Board provided an in-depth update on the current si

116、tuation.We discussed with the Executive Board the impact of the attack on Continental and the measures already taken or planned.At its meeting on December 14,2022,the Supervisory Board re-solved to create a new Executive Board function for Integrity and Law,and appointed Olaf Schick to head this fun

117、ction.Mr.Schick will take up his position on May 1,2023,and will be responsible for the new Group Risks and Controls area as well as the central areas Group Quality Management,Group Compliance,Group Law and Intellectual Property,and Group Internal Audit.Also at this meeting,the Supervisory Board ext

118、ensively addressed the annual planning for 2023 and the long-term planning.It also approved the planning and investment plans for fiscal 2023.The Executive Board also pro-vided an update at this meeting on the current status of the cyber-attack.We resolved the amendment to the profile of skills and

119、ex-pertise for the Supervisory Board as well as the corresponding skills matrix.We also agreed to an updated declaration in accordance with Section 161 AktG on the recommendations of the German Corporate Governance Code.Finally,we addressed the irregularities in the production of air-conditioning li

120、nes and industrial hoses in two business areas of the ContiTech group sector.The project team set up by the Execu-tive Board provided information about the background and current status of the investigation into the irregularities.At the suggestion of the Executive Board,the Supervisory Board resolv

121、ed to carry out a comprehensive and independent investigation into the irregulari-ties in accordance with Section 111(2)AktG.To support these efforts,the Supervisory Board brought in external law firms,in particular to take on the tasks of clarifying the underlying facts and establishing the plausib

122、ility of the previous investigation re-sults,reporting to the Supervisory Board on the progress of the investigation and its findings,and proposing recommendations for Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 13 action.The Supervisory Board also resolved that a furt

123、her special committee(the Special ContiTech Committee)would support this investigation.The Chairmans Committee held two meetings in the year under review,in which it primarily prepared the personnel-related decisions of the plenary session and made recommendations for resolutions.At the first meetin

124、g on March 17,2022,this included the recom-mendation on determined performance bonuses for fiscal 2021,which the plenary session resolved at its following meeting.At the second meeting on December 14,2022,the Chairmans Commit-tee resolved proposals to the Chairmans Committee relating to tar-gets set

125、 for the variable remuneration of the Executive Board and to the creation of a new Executive Board function for Integrity and Law.At the end of May,the Chairmans Committee also approved the acquisition of US conveyor belt manufacturer WCCO Belting,LLC,Wilmington,Delaware,USA,by written procedure.Thi

126、s acquisi-tion had previously been discussed at the meeting of the plenary session on March 17,2022.In September,the Chairmans Commit-tee approved an investment project of the Automotive group sector by written procedure.Key topics dealt with by the Audit Committee The Audit Committee was also infor

127、med by the Executive Board in detail and on an ongoing basis about sales,results and employment development in the Continental Group and individual group sectors as well as the financial situation of the company.The Executive Board is assisted by the head of Accounting and the head of Group Controll

128、ing,who attend the meetings of the Audit Committee and can thereby provide information directly.In addition,the chairman of the Audit Committee is in regular contact with the chief financial officer and the auditor of the Continental Group outside of meetings and has access to senior employees entru

129、sted with tasks relating to accounting,the internal control system,the risk management sys-tem,internal auditing and compliance.The chairman of the Audit Committee shares key information with the Audit Committee.As a focus of each of its quarterly meetings,the Audit Committee talks with the Executiv

130、e Board about the accounting as at the end of the previous quarter and the outlook for the year as a whole as well as the quarterly statements and the half-year financial report prior to their publication.Another focus of the Audit Committees work in the past fiscal year was dealing with the company

131、s internal control system and risk management system.At its meeting on March 2,2022,the Audit Committee discussed the companys annual financial statements and the consolidated financial statements as well as the combined non-financial state-ment for 2021 with the Executive Board and the auditor,and

132、rec-ommended their approval to the plenary session of the Supervisory Board.The interim financial statements as at June 30,2022,were reviewed by PricewaterhouseCoopers GmbH Wirtschaftsprfungs-gesellschaft,Hanover branch(PwC),on behalf of the Audit Commit-tee.The work of the Group Compliance and Grou

133、p Internal Audit group functions and reporting on significant risks and incidents are also regular topics at each meeting.This includes in particular the matters described in more detail in the report on risks and opportu-nities and in the notes to the consolidated financial statements.In addition t

134、o these recurring topics,at its meeting on May 4,2022,the Audit Committee discussed the reassignment of 24.9%of the shares in ContiTech AG,Hanover,from Continental Pension Trust e.V.,Hanover,to the Continental Group,and was updated on the current status of cybersecurity.At the meeting on August 2,20

135、22,acquisition controlling was treated as a special topic of dis-cussion.The Audit Committee also addressed the review of the interim financial statements by auditor PwC at this meeting.In the absence of the Executive Board,the committee discussed with PwC the focal points to be determined in the au

136、dit by the Supervisory Board.At the meeting on November 9,2022,the Audit Committee issued the mandate for the audit of the 2022 annual and consoli-dated financial statements,including the combined non-financial statement,the report on relations with affiliated companies and the remuneration report,t

137、o the auditor appointed by the Annual Share-holders Meeting,PwC.In addition,the Audit Committee defined an approval framework for commissioning the auditor with permissi-ble non-audit services in accordance with the EU Audit Regulation.The Executive Board regularly informs the Audit Committee about

138、the use of this authorization.The Audit Committee discussed the current status of the cyberattack and initial consequences with the Executive Board and addressed the status of implementation of the German Supply Chain Due Diligence Act(Lieferkettensorgfalts-pflichtengesetz).The perception of Contine

139、ntal on the capital mar-ket was also discussed.Finally,the Audit Committee extensively ad-dressed the irregularities in the production of air-conditioning lines and industrial hoses in two business areas of the ContiTech group sector and received reports on the current situation.Corporate governance

140、 At its meetings on March 17,2022,and December 14,2022,the Supervisory Board agreed to an updated declaration in accordance with Section 161 AktG on the recommendations of the German Corporate Governance Code.At its meeting on September 22,2022,the Supervisory Board approved amendments to the By-Law

141、s of the Supervisory Board and to the By-Laws of the Audit Committee,prompted as a result of the new version of the German Corporate Governance Code.At its meeting on December 14,2022,the Super-visory Board decided on amendments to its profile of skills and ex-pertise,and passed a resolution on the

142、corresponding skills matrix.The chairman of the Supervisory Board was notified of potential conflicts of interest by three Supervisory Board members in 2022.In such cases,it is ensured that the Supervisory Board members in question do not participate in discussions of the Supervisory Board and its c

143、ommittees on the topics that could constitute a conflict of interest and also do not receive any information in this regard.These are not significant and long-term conflicts of interest that would require the members to step down.In its opinion,the Super-visory Board also had an appropriate number o

144、f independent members,in particular on the shareholder side,as defined in the Code at all times in the period under review.Further information on this topic and on corporate governance in general is included in the corporate governance statement pursuant to Sections 289f and 315d HGB(starting on pag

145、e 15).Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 14 Annual and consolidated financial statements;combined non-financial statement for 2022 PwC audited the annual financial statements as at December 31,2022,prepared by the Executive Board in accordance with the pro-vis

146、ions of the HGB,the 2022 consolidated financial statements and the combined management report for the company and the Conti-nental Group,including the accounts and the system for early risk recognition.The 2022 consolidated financial statements of Conti-nental AG were prepared in accordance with the

147、 International Finan-cial Reporting Standards(IFRS).The auditor issued unqualified opinions.In addition,PwC audited the Executive Boards report on relations with affiliated companies pursuant to Section 312 AktG(dependent company report).PwC issued the following unqualified opinion on this report in

148、 accordance with Section 313(3)AktG:“Based on the results of our statutory audit and evaluation we con-firm that:the actual information included in the report is correct,with respect to the transactions listed in the report,payments by the company were not unduly high or detrimental effects were com

149、pensated for,and there are no circumstances in favor of a significantly different assessment than that made by the Executive Board in regard to the measures listed in the report.”The Audit Committee discussed the documents relating to the annual financial statements,including the dependent company r

150、eport,as well as the auditors reports and the remuneration report with the Executive Board and the auditor on March 5,2023.Fur-thermore,the plenary session of the Supervisory Board discussed these at length at its meeting to approve the annual financial state-ments on March 15,2023.The discussions a

151、lso concerned the combined non-financial statement for the Continental Group and for Continental AG according to Sections 289b and 315b HGB.The required documents were distributed to all members of the Audit Committee and the Supervisory Board in good time before these meetings so that the members h

152、ad sufficient opportunity to review them.The auditor was present at these discussions.The auditor re-ported on the main results of the audits and was available to pro-vide additional information to the Audit Committee and the Super-visory Board.Based on its own review of the annual financial state-m

153、ents,the consolidated financial statements,the combined man-agement report of Continental AG and of the Continental Group,as well as the dependent company report including the final declara-tion of the Executive Board,and based on the report and the rec-ommendation of the Audit Committee,the Supervi

154、sory Board con-curred with the results of the auditors audit.There were no objec-tions.The Supervisory Board approved the annual financial state-ments and the consolidated financial statements.The annual finan-cial statements are thereby adopted.PwC issued an unqualified opinion for the combined non

155、-financial statement.Based on the Supervisory Boards own review,the Audit Committees report on its preliminary examination and its recommendation,and PwCs audit and unqualified opinion on the combined non-financial state-ment,the Supervisory Board finds that the combined non-financial statement is c

156、orrect and appropriate and was prepared in accord-ance with Sections 315b and 315c in conjunction with Sections 289c to 289e HGB.The auditor reviewed the remuneration report prepared by the Executive Board and the Supervisory Board and issued a report that is attached to the remuneration report.The

157、Supervisory Board together with the Executive Board will pro-pose to the Annual Shareholders Meeting on April 27,2023,to dis-tribute a dividend for the past fiscal year of 1.50 per share entitled to dividends,and to carry the retained earnings forward in full to new account.Personnel changes on the

158、Supervisory Board and Executive Board The Annual Shareholders Meeting elected Mr.Stefan Buchner to the Supervisory Board on April 29,2022,after Mr.Buchner had already been appointed as a member of the Supervisory Board by the Hanover Local Court at the request of the Executive Board with effect from

159、 January 1,2022.In addition,the Annual Share-holders Meeting on April 29,2022,elected Ms.Dorothea von Box-berg to the Supervisory Board.Ms.Maria-Elisabeth Schaeffler-Thu-mann stepped down from the Supervisory Board with effect from the end of the Annual Shareholders Meeting on April 29,2022.The Supe

160、rvisory Board would like to thank Maria-Elisabeth Schaeffler-Thumann for her many years of successful service on the Supervisory Board,for her good and trusting cooperation and for her constant commitment to the company.Further information on the members of the Supervisory Board and its committees w

161、ho were in office in the year under review can be found on pages 10 and 11 and on pages 220 and 221.There were no personnel changes on the Executive Board in the past fiscal year.At its meeting on December 14,2022,the Super-visory Board resolved to create a new Executive Board function for Integrity

162、 and Law,and appointed Mr.Olaf Schick to head this func-tion for a term of three years.Mr.Schick will take up his position on May 1,2023.The Supervisory Board would like to thank the Executive Board,all the employees and the employee representatives for their consid-erable dedication over the past y

163、ear.Hanover,March 15,2023 Prof.Dr.-Ing.Wolfgang Reitzle Chairman Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 15 Responsible corporate governance is what governs the actions of the Executive Board and the Supervisory Board.Good,responsible corporate governance geared to

164、ward sustainable,long-term value creation and in the interests of all stakeholder groups is what governs the actions of the Executive Board and Supervisory Board of Continental AG.The following corporate governance state-ment pursuant to Sections 289f and 315d of the German Commer-cial Code(Handelsg

165、esetzbuch HGB)is representative of corporate governance at Continental and is a part of the management report.The remuneration report for fiscal 2022 on the remuneration of the Executive Board and the Supervisory Board together with the auditors report and the valid remuneration system for the remu-

166、neration of the Executive Board are available on Continentals web-site under Company/Corporate Governance/Executive Board.The valid remuneration system for remuneration of the Supervisory Board is described in the remuneration report for fiscal 2022 and is available on Continentals website under Com

167、pany/Corporate Governance/Supervisory Board.Declaration pursuant to Section 161 of the German Stock Corporation Act(Aktiengesetz AktG)and deviations from the German Corporate Governance Code(Deutscher Corporate Governance Kodex DCGK)In December 2022,the Executive Board and the Supervisory Board issu

168、ed the following annual declaration pursuant to Section 161 AktG:“The Executive Board and the Supervisory Board of Continental AG declare in accordance with Section 161 German Stock Corpora-tions Act(AktG)that the recommendations of the Government Commission on the German Corporate Governance Code i

169、n the version dated December 16,2019(published by the Federal Minis-try of Justice in the official section of the electronic Federal Gazette(Bundesanzeiger)on March 20,2020),were complied with since February 18,2022,with the exception as set out below,and fur-ther the recommendations of the Governme

170、nt Commission on the German Corporate Governance Code in the version dated April 28,2022(published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette(Bundesanzeiger)on June 27,2022)have been complied with and will continue to be complied with,with the except

171、ion set out below.Reference is made to the declaration of the Executive Board and the Supervisory Board of March 2022 as well as to previous decla-rations in accordance with Section 161 AktG and the deviations from the recommendations of the German Corporate Governance Code explained therein.Accordi

172、ng to recommendation C.2 of the German Corporate Gov-ernance Code,the Supervisory Board shall set an age limit for members of the Supervisory Board.The Supervisory Board does not set an age limit because it does not consider such a general criterion to be appropriate for evaluating the qualification

173、s of a Supervisory Board member.Hanover,December 2022 Prof.Dr.-Ing.Wolfgang Reitzle Chairman of the Supervisory Board Nikolai Setzer Chairman of the Executive Board”The declaration of compliance is published in the Company/Corpo-rate Governance section of Continentals website.Earlier declara-tions p

174、ursuant to Section 161 AktG can also be found there.Out-of-date corporate governance statements can also be found there for a period of at least five years from the date they were issued.Key corporate governance practices The following documents are key foundations of our sustainable and responsible

175、 corporate governance:OUR BASICS Continental AGs corporate guidelines.The vision,mission and values,desired behavior and self-image of the Conti-nental Group;available on Continentals website under Com-pany/Corporate Governance/Vision&Mission.Sustainability ambition;available on Continentals website

176、 under Sustainability/Sustainability Framework/Continentals Sustainability Ambition.Compliance with the binding Code of Conduct for all Continental employees.For more information,see Continentals website under Sustainability/Sustainable Corporate Governance/Organi-zation and Management.Corporate bod

177、ies In line with the law and the Articles of Incorporation,the companys corporate bodies are the Executive Board,the Supervisory Board and the Shareholders Meeting.As a German stock corporation,Continental AG has a dual management system characterized by a strict personnel division between the Execu

178、tive Board as the man-agement body and the Supervisory Board as the monitoring body.The cooperation between the Executive Board,Supervisory Board and Shareholders Meeting is depicted on the next page.The Executive Board and its practices The Executive Board has sole responsibility for managing the c

179、om-pany in the interests of the company,free from instructions from third parties in accordance with the law,the Articles of Incorpora-tion and the Executive Boards By-Laws,while taking into account the resolutions of the Shareholders Meeting.All members of the Executive Board share responsibility f

180、or the management of the company jointly.Regardless of this principle of joint responsibility,each Executive Board member is individually responsible for the areas entrusted to them.The chairman of the Executive Board is responsible for the companys overall management and business policy.He ensures

181、management coordination and uniformity on the Executive Board and represents the company to the public.The Executive Board jointly develops the companys strategy,agrees it with the Supervisory Board and ensures its implementation.Corporate Governance Statement Pursuant to Sections 289f and 315d of t

182、he German Commercial Code(HGB)Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 16 The Executive Board had five members as at December 31,2022,and as at the date of this statement.Information on areas of respon-sibility and resumes of the Executive Board members are availabl

183、e on Continentals website under Company/Corporate Govern-ance/Executive Board.From May 1,2023,the Executive Board will be expanded to six members following the Supervisory Boards de-cision to create a new Executive Board function for Integrity and Law on December 14,2022(for details,see the report o

184、f the Super-visory Board,page 12).The first time a person is appointed to the Executive Board,his or her term as a rule is three years only.As a rule,a member of the Executive Board is not appointed beyond the statutory retirement age.Only under exceptional circumstances will a member of the Execu-t

185、ive Board be reappointed earlier than one year prior to the end of their term of appointment with simultaneous annulment of their current appointment.More information on the members of the Executive Board and their memberships to be disclosed pursuant to Section 285 No.10 HGB can be found on page 21

186、9 and on Continentals website under Company/Corporate Governance/Executive Board.The Executive Board has By-Laws that regulate in particular the allocation of duties among the Executive Board members,key matters pertaining to the company and its subsidiaries that require a decision to be made by the

187、 Executive Board,the duties of the Executive Board chairman,and the process in which the Executive Board passes resolutions.The Executive Board By-Laws are availa-ble on Continentals website under Company/Corporate Govern-ance/Executive Board.The Supervisory Board By-Laws on the basis of the Article

188、s of Incorporation require the consent of the Super-visory Board for significant actions taken by management.The Executive Board has established separate boards for the Auto-motive,Tires and ContiTech group sectors.This measure supports the decentralization of responsibility that the global organiza

189、tion of the company seeks to achieve,and relieves the burden on the Continental Group Executive Board.In addition to establishing these boards,the Executive Board has delegated to them decision-mak-ing powers for certain matters that affect only the relevant group sectors.The boards for the three gr

190、oup sectors each comprise the Executive Board member responsible for the group sector in question as their chairman,the heads of the relevant business areas within the group sector,as well as further members from among the central functions of the relevant group sectors.The Supervisory Board and its

191、 practices The Supervisory Board appoints the members of the Executive Board and collaborates with the Executive Board to develop a long-term succession plan.The Supervisory Board discusses this at least once a year without the Executive Board.In order to become ac-quainted with potential successors

192、,the Supervisory Board,in con-sultation with the Executive Board,offers them the opportunity to deliver presentations to the Supervisory Board.The Supervisory Board supervises and advises the Executive Board in managing the company.This includes,in particular,issues relating to the companys strategy

193、,planning,business development,risk sit-uation,risk management,compliance and sustainability.The Super-visory Board is directly involved in decisions of material importance Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 17 to the company.As specified by law,the Articles o

194、f Incorporation or the Supervisory Board By-Laws,certain corporate management matters require the approval of the Supervisory Board.The chair-man of the Supervisory Board coordinates its work and represents it vis-vis third parties.Within reasonable limits,he is prepared to talk to investors about i

195、ssues specific to the Supervisory Board.He maintains regular contact between meetings with the Executive Board,and in particular with its chairman,to discuss issues relating in particular to the companys strategy,business development,risk situation,risk management and compliance.Composition of the S

196、upervisory Board The Supervisory Board comprises 20 members in accordance with the German Co-determination Act(Mitbestimmungsgesetz MitbestG)and the companys Articles of Incorporation.Half the members of the Supervisory Board are elected individually by the shareholders in the Shareholders Meeting(s

197、hareholder representa-tives),while the other half are elected by the employees of Conti-nental AG and its German subsidiaries(employee representatives).Both the shareholder representatives and the employee represent-atives have an equal duty to act in the interests of the company.The Supervisory Boa

198、rds chairman must be a shareholder repre-sentative.He has the casting vote in the event of a tie.The current Supervisory Board was constituted on April 26,2019.The term of office of the Supervisory Board members lasts until the end of the 2024 Annual Shareholders Meeting.The chairman of the Supervis

199、ory Board is Prof.Dr.-Ing.Wolfgang Reitzle who,in ac-cordance with the German Corporate Governance Code,is inde-pendent of the company and its Executive Board.The Supervisory Board does not include any members who previously belonged to the Executive Board of Continental AG,who exercise an executive

200、 function or advisory role at a major competitor of Continental,or who have a personal relationship with such a competitor.The company has set up an informational program that provides newly elected members of the Supervisory Board with a thorough overview of the companys products and technologies a

201、s well as finances,controlling and corporate governance at Continental.The Supervisory Board has drawn up its own By-Laws that supple-ment the law and the Articles of Incorporation with more detailed provisions,including provisions on Supervisory Board meetings,the duty of confidentiality,the handli

202、ng of conflicts of interest and the Executive Boards reporting obligations,and a list of transac-tions and measures that require the approval of the Supervisory Board.The Supervisory Board By-Laws are available on Continen-tals website under Company/Corporate Governance/Supervisory Board.The Supervi

203、sory Board also consults on a regular basis in the absence of the Executive Board.Before each regular meeting of the Supervisory Board,the representatives of the shareholders and of the employees each meet separately with members of the Exec-utive Board to discuss the upcoming meeting.The Supervisor

204、y Board regularly reviews how effectively it and its committees have fulfilled their responsibilities.It recently carried out such a review in 2021 with the help of an external consultant.This confirmed the Supervisory Boards efficient and professional approach to its work in the past years.The Supe

205、rvisory Board has adopted the recommendations that resulted from the 2021 self-assessment and,among other things,resolved to hold an addi-tional regular meeting each fiscal year and to coordinate more closely with the Executive Board,including outside of meetings.Profile of skills and expertise for

206、the Supervisory Board In accordance with recommendation C.1 of the German Corporate Governance Code,the Supervisory Board has prepared a profile of skills and expertise and specified targets for its composition.The Supervisory Board as a whole should possess the skills and expertise described in mor

207、e detail below.It is not expected that all Supervisory Board members possess all skills and expertise.Instead,each area of expertise must be covered by at least one Supervisory Board member.The Supervisory Board assumes that all Supervisory Board members possess the knowledge and skills required for

208、 the proper performance of their duties and the charac-teristics necessary for successful Supervisory Board work.In partic-ular,these include integrity,commitment,capacity for discussion and teamwork,sufficient availability and discretion.Internationality:Due to Continental AGs global activities,its

209、 Supervisory Board requires international professional or business experience.This means professional training or operational activ-ity abroad.International professional and business experience with regard to Asian markets is also desirable.Industry experience:The Supervisory Board should have profe

210、ssional experience in the automotive industry or other in-dustries in which the company operates.In particular,the Super-visory Board wants to increase its expertise in business areas that are important to the companys strategy.Therefore,professional knowledge or experience of information technology

211、,software,telecommunications,mobility services,digital business models or related areas should be available.Financial expertise:The Supervisory Board should possess finan-cial knowledge and experience pursuant to Section 100(5)AktG as well as recommendation D.3 of the German Corporate Govern-ance Co

212、de,i.e.in the areas of accounting,internal control and risk management systems,and the audit of financial statements.Corporate governance and board experience:Members of the Supervisory Board should have experience as a member of the supervisory board or executive board of a German listed com-pany o

213、r as a member of such a body of a foreign listed company.Sustainability expertise:The Supervisory Board should have in-depth knowledge and experience in the sustainability issues that are relevant to the company.Organizational and human resources development:The Supervisory Board should have experti

214、se in the area of HR strategy,HR management and labor relations,and in particular knowledge and practical experience in the transformation of companies,including the impact on changing skills requirements for staff.Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 18 The Sup

215、ervisory Board has specified the following targets for its composition:The number of members of the Supervisory Board who have the required international experience should at a minimum remain con-stant.Eleven members currently have international experience.An appropriate number of members with indus

216、try experience should be maintained.This applies to 16 of the members.The Supervisory Board should have an appropriate number of members on the shareholder side whom it deems to be independ-ent in accordance with the German Corporate Governance Code.Taking into account the ownership structure,a Supe

217、rvisory Board member is therefore considered independent if they are independ-ent of the company and its Executive Board,and also independ-ent of a controlling shareholder.The independence of shareholder representatives was assessed in accordance with the German Corporate Governance Code by sharehol

218、der representatives on the Supervisory Board.As part of the assessment of independence from the Executive Board and the company,it was taken into ac-count that four shareholder representatives will have been mem-bers of the Supervisory Board for more than 12 years in 2023.It was also taken into cons

219、ideration in the assessment of independ-ence from any controlling shareholder that two Supervisory Board members are linked to the controlling shareholder,the IHO Group,Herzogenaurach,Germany.As determined in the assess-ment by the shareholder representatives on the Supervisory Board,the Supervisory

220、 Board still has an appropriate number of members on the shareholder side who are independent in accordance with the German Corporate Governance Code.This assessment is based on the following considerations:More than half of the shareholder representatives should be independent of Continental AG and

221、 its Executive Board.In the assessment of the independence of the four shareholder repre-sentatives that have been on the Supervisory Board for more than 12 years,given the former and ongoing administration of the members in question,the shareholder representatives over-all see no grounds to accept

222、changing the existing assessment of independence.The shareholder representatives currently on the Supervisory Board are therefore all,without exception,inde-pendent of Continental AG and its Executive Board.At least five shareholder representatives should be independent of the controlling shareholde

223、r,the IHO Group,headquartered in Herzogenaurach,Germany.The shareholder representatives in-dependent of the controlling shareholder are:Prof.Dr.-Ing.Wolfgang Reitzle Dorothea von Boxberg(as of April 29,2022)Stefan E.Buchner Dr.Gunter Dunkel Satish Khatu Isabel Corinna Knauf Sabine Neu Prof.Dr.Rolf N

224、onnenmacher In its nominations for election to the Supervisory Board,the Super-visory Board as a rule does not nominate candidates who have al-ready held this position for three full terms of office at the time of the election.The Supervisory Board has not stipulated an age limit as recom-mended in

225、recommendation C.2 of the German Corporate Gov-ernance Code.It does not consider such a general criterion to be suitable for evaluating the qualifications of a candidates nomina-tion to the Supervisory Board.According to Section 96(2)AktG,the Supervisory Board of Conti-nental AG is also subject to t

226、he requirement that at least 30%of its members be women and at least 30%be men.The company re-ports on this on page 22,in accordance with Section 289f(2)Nos.4 to 6 HGB.In its nominations of candidates for election to the Supervisory Board,the Supervisory Board takes into account the requirements of

227、the profile of skills and expertise for the board as a whole as well as the aforementioned targets.Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 19 The current status of implementation for the profile of skills and expertise and the composition-relevant targets of the Su

228、pervisory Board:Skills and Expertise Composition-relevant Targets Financial expertise Corporate governance and board experience Sustain-ability expertise Organiz-ational and HR develop-ment Internationality(*with regard to Asian markets)Industry experience Independence from company&Executive Board p

229、urs.to DCGK Independence from controlling shareholder purs.to DCGK Year of appoint-ment/current term Targets Consistent number Appropriate number More than 50%shareholder representatives At least 5 shareholder represent-atives As a rule,no election proposal after 3 full terms Shareholder representat

230、ives Prof.Dr.-Ing.Wolfgang Reitzle 2009 (3rd term)Dorothea von Boxberg 2022 (1st term)Stefan E.Buchner *2022 (1st term)Dr.Gunter Dunkel 2009 (3rd term)Satish Khatu *2019 (1st term)Isabel Corinna Knauf *2019 (1st term)Sabine Neu 2014 (2nd term)Prof.Dr.Rolf Nonnenmacher 2014 (2nd term)Klaus Rosenfeld

231、2009 (3rd term)Georg F.W.Schaeffler 2009 (3rd term)Total number of shareholder representatives 2 8 2 10 8 6 10 8 Employee representatives Christiane Benner 2018 (2nd term)Hasan Allak 2019 (1st term)Francesco Grioli 2018 (2nd term)Michael Iglhaut 2006 (4th term)Carmen Lffler 2021 (1st term)Dirk Nordm

232、ann 2004 (4th term)Lorenz Pfau 2019 (1st term)Jrg Schnfelder 2004 (4th term)Stefan Scholz 2015 (2nd term)Elke Volkmann 2014 (2nd term)Total number of employee representatives 1 3 2 10 3 10 Supervisory Board total 3 11 4 20 11 16 Target achievement =applicable =not applicable Continental AG 2022 Annu

233、al Report To Our Shareholders Corporate Governance 20 Committees of the Supervisory Board The Supervisory Board currently has five committees with decision-making powers:the Chairmans Committee,the Audit Committee,the Nomination Committee,the committee formed in accordance with Section 27(3)MitbestG

234、(the Mediation Committee)and the committee for the approval of company transactions with related persons(Committee for Related Party Transactions)(Section 107(3)Sentence 4;Section 111b(1)AktG).Key responsibilities of the Chairmans Committee are preparing the appointment of Executive Board members an

235、d concluding,ter-minating and amending their employment contracts and other agreements with them.However,the plenum of the Supervisory Board alone is responsible for establishing the total remuneration of the Executive Board members.Another key responsibility of the Chairmans Committee is deciding o

236、n the approval of certain trans-actions and measures by the company as specified in the Super-visory Board By-Laws.The Supervisory Board has conferred some of these participation rights on the Chairmans Committee,each member of which may however,in individual cases,demand that a matter again be subm

237、itted to the plenary session for decision.The members of the Chairmans Committee are Prof.Dr.-Ing.Wolfgang Reitzle(chairman);his vice chairperson,Christiane Benner;Georg F.W.Schaeffler;and Jrg Schnfelder.The Audit Committee primarily deals with the audit of the ac-counts,the monitoring of the accoun

238、ting process and the effective-ness of the internal control system,the risk management system and the internal audit system,the audit of the financial statements(including sustainability reporting and examination thereof)and compliance.In particular,the committee deals with the preliminary examinati

239、on of Continental AGs annual financial statements and the consolidated financial statements,and makes its recommenda-tion to the plenary session of the Supervisory Board,which then passes resolutions pursuant to Section 171 AktG.Furthermore,the committee discusses the companys draft interim financia

240、l reports.It is also responsible for ensuring the necessary independence of the auditor and deals with additional services performed by the auditor.The committee engages the auditor,determines the focus of the report as necessary,negotiates the fee and regularly reviews the quality of the audit.The

241、chairman of the Audit Committee regu-larly consults with the auditor on the progress of the audit and re-ports on this to the committee.The committee also regularly con-sults with the auditor without the Executive Board.It also gives its recommendation for the Supervisory Boards proposal to the Annu

242、al Shareholders Meeting for the election of the auditor.The Audit Committee is also responsible for the preliminary audit of non-financial reporting and for the engagement of an auditor for its re-view,if any.The chairman of the Audit Committee is Prof.Dr.Rolf Nonnenmacher.He is independent in all r

243、espects as defined in the German Corporate Governance Code.As an auditor with many years of professional experience in management positions,he has in-depth knowledge and experience in auditing.Another commit-tee member,Klaus Rosenfeld,is also a financial expert,and as chief financial officer in a nu

244、mber of companies has in-depth knowledge and experience in accounting and internal control and risk man-agement systems.The other members are Francesco Grioli,Michael Iglhaut,Dirk Nordmann and Georg F.W.Schaeffler.Neither a former Executive Board member nor the chairman of the Supervisory Board may

245、act as chairman of the Audit Committee.The Nomination Committee is responsible for nominating suita-ble candidates for the Supervisory Board to propose to the Annual Shareholders Meeting for election.In addition,the committee must propose targets for the Supervisory Boards composition and profile of

246、 skills and expertise and review both regularly.The Nomination Committee consists entirely of shareholder representatives,specifi-cally the two members of the Chairmans Committee,Prof.Dr.-Ing.Wolfgang Reitzle(chairman)and Georg F.W.Schaeffler;the chairman of the Audit Committee,Prof.Dr.Rolf Nonnenma

247、cher;and Isabel Corinna Knauf.In accordance with Section 31(3)Sentence 1 MitbestG,the Media-tion Committee becomes active only if the first round of voting on a proposal to appoint a member of the Executive Board or to re-move a member by consent does not achieve the legally required two-thirds majo

248、rity.This committee must then attempt mediation before a new vote is taken.The members of the Chairmans Com-mittee are also the members of the Mediation Committee.The Committee for Related Party Transactions(RPT Commit-tee)deals with transactions between Continental AG and a related person,where the

249、se transactions require the prior consent of Con-tinental AGs Supervisory Board in accordance with Sections 111a and 111b AktG.Transactions in this case require the prior consent of the Supervisory Board.In addition to the chairman of the Super-visory Board,Prof.Dr.-Ing.Wolfgang Reitzle,and the chai

250、rman of the Audit Committee,Prof.Dr.Rolf Nonnenmacher,the Committee for Related Party Transactions includes two further members elected by the Supervisory Board from among the employee representatives where necessary.The Special Emissions Committee and the Special ContiTech Committee support the Sup

251、ervisory Boards investigations into the manipulation of emission limits by certain automotive manufactur-ers and irregularities in the production of air conditioning lines and industrial hoses in two business areas of the ContiTech group sec-tor,respectively.In particular,the special committees are

252、available to external law firms as a point of contact,source of information and recipient of reports,regularly report to the plenary session on the investigations and prepare any resolutions required for the ple-nary session or committees.The members of the Special Emissions Committee are Prof.Dr.-I

253、ng.Wolfgang Reitzle,Georg F.W.Schaeffler and Dirk Nordmann.The members of the Special ContiTech Com-mittee are Prof.Dr.-Ing.Wolfgang Reitzle,Prof.Dr.Rolf Nonnenmacher and Dirk Nordmann.Finally,the Supervisory Board has formed a group of experts that deals with sustainability issues relevant to Conti

254、nental.The group of experts comprises two shareholder representatives and two employee representatives.More information on the members of the Supervisory Board and its committees can be found on pages 220 and 221.Current resumes,which are updated annually,are available on Continentals website under

255、Company/Corporate Governance/Supervisory Board They also contain information on how long each member has held their position on the Supervisory Board.Continental AG 2022 Annual Report To Our Shareholders Corporate Governance 21 Shareholders and the Shareholders Meeting The companys shareholders exer

256、cise their rights of participation and control at the Annual Shareholders Meeting.The Annual Share-holders Meeting,which must be held in the first eight months of every fiscal year,decides on all issues assigned to it by law,such as the appropriation of profits,the election of shareholder representa

257、-tives to the Supervisory Board,the discharging of Supervisory Board and Executive Board members,the appointment of auditors and the approval of the remuneration system and remuneration report.Each Continental AG share entitles the holder to one vote.There are no shares conferring multiple or prefer

258、ential voting rights and no limitations on voting rights.All shareholders who register in a timely manner and prove their entitlement to participate in the Shareholders Meeting and to exer-cise their voting rights are entitled to participate in the Sharehold-ers Meeting.To facilitate the exercise of

259、 their rights and to prepare them for the Shareholders Meeting,the shareholders are fully in-formed about the past fiscal year and the points on the upcoming agenda before the Shareholders Meeting by means of the annual report and the invitation to the meeting.All documents and infor-mation on the A

260、nnual Shareholders Meeting,including the annual report,are published on the published on the companys website in German and English.Moreover,the Annual Shareholders Meet-ing can also be watched in full in an audio-visual stream on the companys website.When holding the Annual Shareholders Meet-ing,th

261、e chairperson presiding over the meeting is guided by the fact that an ordinary annual shareholders meeting should be con-cluded after four to six hours.To make it easier for shareholders to exercise their rights,the company offers all shareholders who can-not or do not want to exercise their voting

262、 rights during the Annual Shareholders Meeting themselves the opportunity to vote at the Annual Shareholders Meeting via a proxy who is bound by instruc-tions or through absentee voting.The required voting instructions can also be issued to the proxy via an Internet service(InvestorPor-tal)before th

263、e end of the general debate on the day of the Share-holders Meeting.In addition,the service provider that assists the company with conducting the Shareholders Meeting is instructed not to forward the individual voting instructions to Continental until the day before the Shareholders Meeting.Accounti

264、ng and auditing of financial statements The Continental Groups accounting is prepared in accordance with International Financial Reporting Standards(IFRS)as adopted by the European Union(EU).The annual financial statements of Conti-nental AG are prepared in accordance with the accounting regula-tion

265、s of the German Commercial Code.The Annual Shareholders Meeting on April 29,2022,elected PricewaterhouseCoopers GmbH Wirtschaftsprfungsgesellschaft,Hanover branch(PwC)to audit the consolidated financial statements for fiscal 2022 as well as the interim financial reports of the company.Dr.Arne Jacobi

266、 is the responsible auditor at PwC.Internal control system and risk management Diligent corporate management and good corporate governance also require that the company deal with risks responsibly.Continen-tal has a corporate-wide internal control and risk management sys-tem that is aimed in particu

267、lar at monitoring the accounting pro-cess and helps analyze and manage the companys risk situation.We report on this in detail in the report on risks and opportunities starting on page 88,which forms part of the management report for the consolidated financial statements.Transparent and prompt repor

268、ting As part of our investor relations and corporate communications,we regularly report to shareholders,analysts,shareholders associa-tions,the media and interested members of the public in equal measure on significant developments in the company and its situa-tion.All shareholders have instant acce

269、ss to all the information that is also available to financial analysts and similar parties.The web-site of Continental AG provides the latest information,including the companys financial reports,presentations held at analyst and investor conferences,press releases and ad-hoc disclosures.The dates of

270、 key periodic publications(annual report,quarterly state-ments and half-year report)and events as well as of the Annual Shareholders Meeting and the annual press conference are an-nounced well in advance in a financial calendar on the website of Continental AG.For the scheduled dates for 2023,see th

271、e Investors/Events and Presentations section.Reporting pursuant to Section 289f(2)Nos.4 to 6 HGB Pursuant to Section 96(2)AktG,the Supervisory Board of Conti-nental AG as a listed stock corporation subject to the German Co-determination Act consists of at least 30%women and at least 30%men.This mini

272、mum quota must always be fulfilled by the Super-visory Board as a whole.Due to an objection by the employee rep-resentatives against the overall fulfillment in accordance with Sec-tion 96(2)Sentence 3 AktG before the election of the Supervisory Board in spring 2019,the minimum quota for the Supervis

273、ory Board of Continental AG must be fulfilled separately by the share-holder representatives and the employee representatives.Women made up 30%of both the shareholder and employee representa-tives on the Supervisory Board of Continental AG as at Decem-ber 31,2022.In accordance with Section 111(5)Akt

274、G,the Supervisory Board must set a target quota of women on the Executive Board and a deadline for achieving this target.If the ratio of women is less than 30%at the time this is set,the target must not subsequently fall be-low the ratio achieved.In December 2021,the Supervisory Board set a target q

275、uota for women on the Executive Board of Continen-tal AG of at least 28.6%for the period up until July 31,2022.Since August 1,2022,the ratio requirement as set out in Section 76(3a)AktG applies for the ratios of new Executive Board members,and this was followed in the past fiscal year.As at July 31,

276、2022,and December 31,2022,women made up 40%of the Executive Board.The Supervisory Board continues to follow the general debate around the representation of women on executive and supervisory boards and will take any future regulations into account.In accordance with Section 76(4)AktG,the Executive B

277、oard of Continental AG is required to set targets for the ratio of women in the first two management levels below the Executive Board and a deadline for achieving these targets.In December 2021,the Execu-tive Board set new target quotas for women in the first two man-agement levels below the Executi

278、ve Board at Continental AG for the period up until December 31,2026:37%for the first manage-ment level and 33%for the second management level.As at De-cember 31,2022,the ratio of women was 35%in the first manage-ment level and 30%in the second management level.Continental AG 2022 Annual Report To Ou

279、r Shareholders Corporate Governance 22 As a global company,Continental continues to attach high priority to the goal of steadily increasing the proportion of women in man-agement positions throughout the Continental Group,above and beyond the legal requirements in Germany.Diversity concept Continent

280、al counts on the diversity of its employees.The current focus of its commitment to promote diversity is on internationality and a balanced gender ratio.The Supervisory Board also pays attention to the diversity of the composition of the Executive Board.The Executive Board does the same when appointi

281、ng people to management positions.As a basic principle,the Executive Board aims to achieve a balanced ratio of domestic to international managers everywhere.The proportion of local and international managers varies according to region.In 2022,a total of around 49%of the Continental Groups managers c

282、ame from countries other than Germany(PY:around 48%).Conti-nental is also working on increasing the proportion of women in management positions.In 2022,we were able to increase this number to around 19%across the Continental Group(PY:18%).The proportion is to be increased to 25%by 2025.In drawing up

283、 the Executive Boards succession plan,the Super-visory Board together with the Executive Board makes use of the measures and programs to promote internationality and women in management positions,thus making it possible to identify and de-velop potential international candidates and female managers

284、for positions on the Executive Board.The aim in the medium term is to use these measures to increase the diversity of the Executive Board even further.The Supervisory Board also pays attention to the diversity of its own composition.For the Supervisory Board,diversity refers to age,gender,background

285、 and professional experience,among other things.The Supervisory Board is convinced that it will achieve diver-sity in its composition in particular by fulfilling the profile of skills and expertise and meeting the targets for its composition.The following management report is a combined management r

286、eport as defined in Section 315(5)of the German Commercial Code(Handelsgesetzbuch HGB),as the future opportunities and risks of the Continental Group and of the parent company,Continental AG,are inextricably linked.Management Report23Management Report Glossary of Financial TermsCorporate ProfileStru

287、cture of the Continental GroupStrategy of the Continental GroupCorporate ManagementResearch and DevelopmentSustainability and Combined Non-Financial Statement Information on Reporting Sustainability Management in the Continental Group Development of Material Topic Areas Information in Accordance wit

288、h the EU Taxonomy Regulation Information on the Development of Other Sustainability Topic AreasEconomic ReportGeneral Conditions Macroeconomic Development Development of Key Customer Sectors and Sales Regions Development of Raw Materials MarketsEarnings,Financial and Net Assets Position Earnings Pos

289、ition Financial Position Net Assets PositionDevelopment of the Group Sectors Automotive Tires ContiTech Contract ManufacturingOverall Statement on the Business Performance and Position of the Continental GroupContinental AG Short Version in Accordance with HGBOther InformationDependent Company Repor

290、tAdditional Disclosures and Notes Pursuant to Sections 289a and 315a HGB Remuneration of the Executive BoardCorporate Governance Statement Pursuant to Sections 289f and 315d HGB Report on Risks and OpportunitiesRisk and Opportunity Management and Internal Control SystemMaterial Risks Financial Risks

291、 Risks Related to the Markets in which Continental Operates Risks Related to Continentals Business Operations Legal and Environmental RisksMaterial OpportunitiesStatement on Overall Risk and Opportunities SituationReport on Expected DevelopmentsFuture General Conditions Forecast of Macroeconomic Dev

292、elopment Forecast for Key Customer Sectors and Sales RegionsOutlook for the Continental Group2426262932353737373946535454545455575766687272757779818285858586878888929293949699100101101101101103 Continental AG 2022 Annual Report Management Report Glossary of Financial Terms 24 The following glossary

293、of financial terms applies to the management report and the consolidated financial statements.Adjusted EBIT.EBIT before amortization of intangible assets from purchase price allocation(PPA),changes in the scope of consolida-tion,and special effects.Special effects include,for example:Impairment(incl

294、uding impairment on goodwill)Income and expenses from restructuring measures Gains and losses from disposals of companies and business oper-ations Significant special effects from non-recurring events;in particular,one-off effects from acquisitions of companies and business oper-ations(e.g.negative

295、goodwill,purchase price refunds)or significant changes to the corporate structure(e.g.spin-off effects)Since it eliminates one-off effects,adjusted EBIT can also be used to compare operational profitability between periods.Adjusted free cash flow.Free cash flow adjusted for acquisitions and divestme

296、nts of companies and business operations.Since it eliminates one-off effects,adjusted free cash flow can also be used to compare financial strength between periods.Adjusted sales.Sales adjusted for changes in the scope of consoli-dation.American depositary receipts(ADRs).ADRs securitize the own-ersh

297、ip of shares and can refer to one,several or even a portion of a share.ADRs are traded on US stock exchanges in the place of foreign shares or shares that may not be listed on US stock exchanges.Capital employed.The funds used by the company to generate its sales.Cash conversion ratio.Ratio of free

298、cash flow excluding acquisi-tions and divestments of companies and business units,restructur-ing expenses,restructuring-related expenses and carve-out effects to net income attributable to the shareholders of the parent.Changes in the scope of consolidation.Changes in the scope of consolidation incl

299、ude additions and disposals as part of share and asset deals as well as other transactions.Adjustments were made for additions in the reporting year and for disposals in the compara-tive period of the prior year.Continental Value Contribution(CVC).The absolute amount of additional value created.The

300、delta CVC represents the change in absolute value creation compared with the prior year.The delta CVC allows us to monitor the extent to which operating units gen-erate value-creating growth or employ resources more efficiently.The CVC is measured by subtracting the weighted average cost of capital(

301、WACC)from the return on capital employed(ROCE)and multiplying this by the average operating assets for the fiscal year.The WACC calculated for the Continental Group corresponds to the required minimum return.The cost of capital is calculated as the weighted average ratio of the cost of equity and bo

302、rrowing costs.Currency swap.Swap of principal payable or receivable in one currency into similar terms in another currency.Often used when issuing loans denominated in a currency other than the functional currency of the lender.Derivative instruments.Transactions used to manage interest-rate and/or

303、currency risks.Dividend payout ratio.The ratio between the dividend for the fiscal year and the earnings per share.EBIT.Earnings before interest and tax.In Continentals financial re-ports,this abbreviation is defined as earnings before financial result and tax.It is the result of ordinary business a

304、ctivities and is used to assess operational profitability.EBITDA.Earnings before interest,tax,depreciation and amortiza-tion.In Continentals financial reports,this abbreviation is defined as earnings before financial result,tax,depreciation and amortization.It equals the sum of EBIT;depreciation of

305、property,plant and equip-ment;amortization of intangible assets;and impairment,excluding impairment on financial investments.This key figure is used to assess operational profitability.Financial result.The financial result is defined as the sum of inter-est income,interest expense,the effects from c

306、urrency translation(resulting from financial transactions),the effects from changes in the fair value of derivative instruments,and other valuation effects.The financial result is the result of financial activities.Free cash flow.The sum of cash flow arising from operating activi-ties and cash flow

307、arising from investing activities.Also referred to as cash flow before financing activities.Free cash flow is used to assess financial performance.Gearing ratio.Net indebtedness divided by equity.Also known as the debt-to-equity ratio.This key figure is used to assess the financ-ing structure.Gross

308、domestic product(GDP).A measure of the economic per-formance of a national economy.It specifies the value of all goods and services produced within a country in a year.Hedging.Securing a transaction against risks,such as fluctuations in exchange rates,by entering into an offsetting hedge transaction

309、,typically in the form of a forward contract.Glossary of Financial Terms Continental AG 2022 Annual Report Management Report Glossary of Financial Terms 25 IAS.International Accounting Standards.Accounting standards developed and resolved by the IASB.IASB.International Accounting Standards Board.Ind

310、ependent standardization committee.IFRIC.International Financial Reporting Interpretations Committee(predecessor of the IFRS IC).IFRS.International Financial Reporting Standards.The standards are developed and resolved by the IASB.In a broad sense,they also include the IAS,the interpretations of the

311、 IFRS IC or of the prede-cessor IFRIC as well as the former SIC.IFRS IC.International Financial Reporting Standards Interpretations Committee.Interest-rate swap.The exchange of interest payments between two parties.For example,this allows variable interest rates to be exchanged for fixed interest or

312、 vice versa.Net indebtedness.The net amount of interest-bearing financial lia-bilities as recognized in the statement of financial position,the fair values of the derivative instruments,cash and cash equivalents,as well as other interest-bearing investments.This figure is the basis for calculating k

313、ey figures of the capital structure.Operating assets.The assets less liabilities as reported in the statement of financial position,without recognizing the net indebt-edness,sale of trade accounts receivable,deferred tax assets,in-come tax receivables and payables,as well as other financial assets a

314、nd debts.Average operating assets are calculated as at the end of the quarterly periods and,according to our definition,correspond to the capital employed.PPA.Purchase price allocation.The process of breaking down the purchase price and assigning the values to the identified assets,lia-bilities and

315、contingent liabilities following a business combination.Subsequent adjustments to the opening statement of financial po-sition resulting from differences between the preliminary and final fair values at the date of initial consolidation are also recognized as PPA.Rating.Standardized indicator for th

316、e international finance markets that assesses and classifies the creditworthiness of a debtor.The classification is the result of an economic analysis of the debtor by specialist rating companies.Research and development expenses(net).Research and devel-opment expenses(net)are defined as expenses fo

317、r research and development less reimbursements and subsidies that we received in this context.Return on capital employed(ROCE).The ratio of EBIT to average operating assets for the fiscal year.The ROCE corresponds to the rate of return on the capital employed and is used to assess the companys profi

318、tability and efficiency.SIC.Standing Interpretations Committee(predecessor of the IFRIC).Tax rate.The ratio of income tax expense to the earnings before tax.It can be used to estimate the companys tax burden.Weighted average cost of capital(WACC).The weighted average cost of the required return on e

319、quity and net interest-bearing liabil-ities.Working capital.Inventories plus trade accounts receivable less trade accounts payable.Sales of trade accounts receivable are not included.Continental AG 2022 Annual Report Management Report Corporate Profile 26 Automotive,Tires and ContiTech:the three str

320、ong 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 1,2023,these comprise a total of 18 business areas.A group sector or business area with overall responsibility f

321、or a busi-ness,including its results,is classified according to product require-ments,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,

322、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 and the Executive Board member responsible for Human Relations,and assume the functions required to m

323、anage the Continental Group across the group sectors.They include,in particular,Finance,Con-trolling,Compliance,Law,IT,Human Relations,Sustainability,and Quality and Environment.The Group Purchasing group function is represented by the Executive Board member responsible for the Tires group sector.Cu

324、stomer structure With a 61%share of consolidated sales,the automotive industry with the exception of the replacement business is our most im-portant customer group.This industry is particularly important for the growth of the Automotive group sector.In the Tires group sector,sales to dealers and end

325、 users represent the largest share of the tire-replacement business.In the ContiTech group sector,the cus-tomer base is made up of the automotive industry and other key in-dustries such as railway engineering,machine and plant construc-tion,mining and the replacement business.In the Contract Manu-fa

326、cturing 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 477 companies,including non-controlled companies.The Continental team is made up

327、 of 199,038 employees at 519 locations for pro-duction,research and development,and administration in 57 coun-tries and markets.Added to this are distribution locations,with 917 company-owned tire outlets and a total of around 5,228 franchises and operations with a Continental brand presence.Corpora

328、te Profile Structure of the Continental Group Continental AG 2022 Annual Report Management Report Corporate Profile 27 The Automotive group sector offers technologies for passive-safety,brake,chassis,motion and motion-control systems.Its portfo-lio also includes innovative solutions for assisted and

329、 automated driving,display and operating technologies,audio and camera solu-tions for the vehicle interior as well as intelligent information and communication technology associated with the mobility services of fleet operators and commercial vehicle manufacturers.Comprehen-sive activities relating

330、to connectivity technologies,vehicle electron-ics and high-performance computers round off the range of products and services.The group sector is divided into five business areas:Architecture and Networking Autonomous Mobility Safety and Motion Smart Mobility User Experience As of January 1,2023,the

331、 Automotive group sector,including a development unit called Software and Central Technologies(SCT),is divided into six business areas.With its premium portfolio in the car,truck,bus,two-wheel and spe-cialty tire segment,the Tires group sector stands for innovative solutions in tire technology.Intel

332、ligent 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 the

333、ir efficiency.With its tires,Continental contributes to safe,efficient and environmentally friendly mobility.In the reporting year,22%of sales in Tires related to business with vehicle manufacturers,and 78%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 Co