Conti to leverage digital assets, sustainability for global growth

HANOVER, Germany — Looking to build on its growth of the past five years, Continental A.G. has crafted a business strategy for the coming years that will leverage digital tire solutions and ambitious sustainability goals to achieve further market-share gains and differentiate its products from the competition.

In particular, the tires business area is looking to expand its share of the growing markets of Asia and North America, Conti said, while at the same time investing heavily in research and development of new technologies, alternative materials and green production to make its tires more energy-saving and environmentally friendly.

Under the latest strategy, dubbed Vision 2030 and unveiled during a week-long capital market days event, Conti plans to modify its tire production gradually so that it uses up to 100% sustainable materials by 2050.

"Excellent tires are and will remain our DNA," Christian Kötz, head of the tires business area and a member of Conti's executive board, said.

"Now, with our 'Vision 2030' strategic program, we are setting the stage to build on what is already a position of strength. Going forward, smart digital tire solutions and the realization of ambitious sustainability goals will be decisive for our success and as differentiators in the marketplace."

With 2019 tire-related sales of $11.3 billion, Conti is the fourth largest tire maker worldwide. It claims to be No. 3 in the passenger/light truck area.

The Vision 2030 strategic program underlines the company's aspiration "to systematically align our organization with the development of customer-oriented solutions and to put customer needs at the center of all our activities," he added.

In the passenger and light truck tires segment, the focus will be on growing business globally with tires for electric vehicles and ultra-high-performance tires, Conti said.

In the truck and bus tire segment, the Conti360° fleet services offering will be a key driver across all regions, while at the same time, Continental's specialty tire business — which covers industrial/OTR, two-wheeler and race tires — sees growth potential in the agricultural tires segment.

On the sustainability front, Conti said it aims to become "the most progressive manufacturer in the tire industry by 2030" by focusing on climate protection, low-emission mobility, a circular economy and sustainable supply chains.

Continental defines all materials as sustainable that originate in a closed material cycle, have no harmful impact on humans or the environment, are procured responsibly and are carbon neutral along the supply chain.

The Hanover-based company claims its tire production per metric ton consumes 55% less water and 17% less energy than the industry average and has set a goal of achieving additional sales of 20% by 2030 in both metrics.

The business area also aims to become a "leading supplier" of service-based digital solutions by 2030.

Conti said it expects its expertise in electronics, sensors and software for the mobility industry to provide it with "a decisive competitive advantage here."

In addition, the tire manufacturer also aims to reinforce development partnerships with customers and other technology firms for service-based solutions.

In the mid-term, Conti said the business unit is aiming for an adjusted pre-tax (EBIT) earnings margin of around 12% to 16% and a return on capital employed (ROCE) of more than 20%.

"The future of mobility is characterized by its high degree of connectivity and safety as well as its convenience — regardless of the vehicle's drive system," Nikolai Setzer, who took over as the CEO of Continental at the beginning of the month, said.

"With our future-oriented technologies and our success-driven, global team, we will be among the winners of the transformation in the mobility industry," he said unveiling the 2030 strategy, which focuses on strengthening operational performance, differentiating portfolio as well as connected and sustainable mobility.