Good morning, ladies and gentlemen. I hereby open the Annual Shareholders' Meeting of Continental AG. Welcome to Hannover Congress Centrum. We have some big decisions to make today, so I'm really glad that we're able to have this meeting in person and that we have a face-to-face conversation. I'd like to welcome you here in the Dome Tour, the Kuppelsaal, our shareholders, shareholder representatives, the media representatives, and all the interested members in the audience. A very warm welcome to all of you. In my capacity as Chairman of the Supervisory Board, and in accordance with the Article of Association, I'm happy to chair this Annual Shareholders' Meeting. I'd also like to welcome a number of former members of the Executive Board. I can see the first line of chairs, gentlemen, Mr. Duensing, Mr. Lerch, very warm welcome to you.
It is good to see that you continue to be interested in our company. I would also like to welcome the notary public, Dr. Florian Hartl, who will take care of the minutes of the shareholders' meeting. As usual, our shareholders' meeting will be live streamed in full length in German and English on our website and in the investor portal as well. Those of you following the live stream on the website or in the investor portal will not be considered as participants at the Annual Shareholders' Meeting in a legal sense. As regards your rights, please refer to the information provided in the invitation and the other documents on the website. My comments therefore relate to those of you physically present at the shareholders' meeting. The attendance area covers the entire area accessible to shareholders after passing the entrance checkpoint.
This includes the Dome Tour, the Kuppelsaal, the covered corridors, and the sanitary facilities. The proceedings of the shareholders' meeting in the Kuppelsaal Hall will be transmitted via the screens set up in the official attendance area. There is also CCTV supervision of the official attendance area monitored by the control center. As a matter of principle, these recordings will be deleted after the end of the meeting. The invitation to this ASM, including the agenda and the proposed resolutions, was published in the Federal Gazette on the 19th of March 2025. At the same time, the invitation was sent to media outlets for publication all over Europe. Since that day, the invitation has been accessible on the company's website. The notifications required under section 125 of the German Stock Corporation Act have also been made.
Ever since the invitation to this shareholders' meeting was published, all documents for shareholders, which are subject to a legal disclosure requirement, have been available for inspection on the company's premises since then and also during the ASM. These documents have been accessible via the company's website, and you can consult them on the tablet computer at the info desk in the foyer. I would like to note that this Annual Shareholders' Meeting was convened in due time and form and in compliance with the law and the company's articles of incorporation. For the record, I would also like to note that with the exception of Dr. Ebenau, all members of the Supervisory Board are present. Dr. Ebenau sends his apologies, so the Executive Board is fully present. On the 17th of April 2025, the speech by our CEO, Nikolai Setzer, was published on the company's website.
This allowed you to familiarize yourselves with the relevant topics of the company before the meeting. The list of participants is currently being prepared, and I will announce the current attendance figures before I open the general debate. The list of participants will be kept in electronic form, and it will be updated continuously. You may inspect it on the terminal right next to the desk where you can register requests to speak. Ladies and gentlemen, I'd now like to inform you about the further course of our Annual Shareholders' Meeting. We will discuss all items on the agenda in a general debate after the report by the Executive Board on the past and the current financial year.
After the end of the debate and after your questions have been answered, we will then vote on all proposed resolutions on agenda items one or two to 14 in a single ballot. The voting result is determined using the subtraction method, which means that you do not have to take action if you wish to vote yes on all of the resolutions and election proposals proposed by the administration. However, if you wish to cast a no vote or declare an abstention, we will use tablets to collect your vote. Please note though, if you use the investor portal while you are in the attendance area, your vote or your abstention will not be counted. You must use the tablets in the official attendance area. For organizational reasons, we will only conduct the vote here in the Kuppelsaal, the Dome Tour, i.e., in the stalls and on the stands.
Anyone wishing to cast a vote must be present here in the Kuppelsaal Hall at the start of the vote. For your orientation, you will hear the sound signal that you also heard at the beginning of the meeting, also in the corridors and in the sanitary areas. To be on the safe side, you will hear the signal once again. Hard to miss. Now, of course, the subtraction method can only work if we accurately determine the attendance figures. That means we need to know how many votes are represented at the Annual Shareholders' Meeting at the time of the vote. We therefore ask that if you leave the official area and if you thus leave the Annual Shareholders' Meeting early, please present your admission ticket at the exit checkpoint because this is the only way we can update the attendance figures accordingly.
You can also have your shareholding represented by a third party on your behalf. You may either authorize another meeting participant or a proxy appointed by the company to exercise your voting rights. Please contact our employees at the exit control desk. Once you've left the official area, you can no longer cast votes or issue authorizations via the investor portal. I would like to point out that you can only authorize others until voting starts. It is therefore best to authorize others before the end of the general debate. Please bear in mind that the proxy appointed by the company can only exercise voting rights in accordance with the instructions that you issue to them. Ladies and gentlemen, if you wish to take part in the general debate by taking the floor or asking questions, please go to the request to speak table.
This is where you can register your contribution. In doing so, please also state a keyword that relates to your contribution so that I can decide whether and when to give you the floor. If you wish to raise a point of order, please also indicate this accordingly. Finally, I'd like to point out that outside the press area, video and audio recordings are not allowed. I would ask you to observe this rule, and I'd also like to ask you to please mute your mobile phones while you're here in this hall. Ladies and gentlemen, we now come to the published agenda. Together with the full wording of the proposed resolutions, it was published on the 19th of March 2025 in the Federal Gazette, and it was also published on the company's website.
I'm referring to the content there, and I'd like to start with item one, presentation to the Annual Shareholders' Meeting. This item refers to the presentation of the adopted annual financial statement of Continental AG as at the 31st of December 2024. The consolidated financial statement approved by the Supervisory Board as at the 31st of December 2024 with the combined management report of Continental AG and the group for the financial year 2024. The report by the Supervisory Board, the proposal by the Executive Board for the appropriation of the net income, and the explanatory report by the Executive Board on the disclosures pursuant to section 289A and section 315A of the German Commercial Code.
The strategy auditor, PricewaterhouseCoopers GmbH, and more particularly its Hanover branch, reviewed the annual financial statement and the consolidated financial statement, including the combined management report for Continental AG and the Continental Group, and they issued their unqualified opinion. Both the audit committee and the Supervisory Board met in the presence of the auditor to discuss selected items. The Supervisory Board approved the annual financial statement of Continental AG, the consolidated financial statement, including the combined management report based on its own review and the review and the recommendation by the audit committee at its meeting on the 12th of March 2025. According to section 172 of the German Stock Corporation Act, the annual financial statement of Continental AG has thus been adopted.
The audit committee and the Supervisory Board also examined in detail the report prepared by the Executive Board on relationships with affiliated companies, the so-called dependency report, and its final declaration. The auditor also subjected the dependency report to their audit and issued their unqualified opinion. Ladies and gentlemen, I'd now like to move on to my report on the activities of the Supervisory Board in the fiscal year ended. This was truly a year of particular significance for the company because Continental is undergoing major change and comprehensive transformation. The Executive Board laid the groundwork for this in 2024 with advice and support from the Supervisory Board, which fully backs this direction. Essentially, it's about fully exploiting the growth and the value creation potential of the company and its divisions.
To this end, in the coming months, three independent and autonomous companies are to be established, three champions in their respective industries based on today's group sectors, Tires, Automotive, and ContiTech. Going forward, they will operate independently, provided, of course, that you, our shareholders, approve the plans of the Executive Board today and thus enable us to take the first step down that road. A plan has been drawn up for the implementation of this project, which is now being implemented step by step, and it provides for the following. Firstly, the spin-off of the Automotive group sector. The independent company is set to go public before the end of this year, pretty similar to what we successfully achieved with the Vitesco Technologies. Secondly, the legal independence of the ContiTech group sector. It will be prepared to operate on the market as an independent industry specialist.
A sale is the most likely outcome in this respect. This follows the already initiated sale of the OESL division, which accounts for a large part of the business for car manufacturers. Thirdly, the future Continental AG with the TAIS group sector will focus on the global TAIS business. Now, all of this, ladies and gentlemen, is far-reaching change, and it is certainly one of the biggest transformations in Continental's history. Above all, however, the Supervisory Board believes that this is the logical and consistent response to the fundamental changes that we have been experiencing on the markets for several years now and which are currently accelerating. We are seeing that the global automotive production is hardly growing anymore. The advance of digitization is significantly changing traditional business models and relationships.
The German and European industrial locations are increasingly coming under international pressure because the pace of global change is so quick that the political framework conditions are unable to keep up. We are seeing that in our core market, Europe, new regulations and bureaucratic obstacles are constantly emerging, and competitiveness is steadily declining. Here, in particular, labor and energy are more expensive than almost anywhere else in the world. The interplay of all these factors has also increasingly challenged Continental's business model in recent years. As a system supplier to the automotive industry, which has been particularly hard hit by the coronavirus pandemic, war, and the supply chain crisis, the company has been severely affected by the global transformation, above all by steadily rising cost pressures.
Despite considerable success in reducing costs, it became increasingly clear that companies wishing to not only survive in this environment but also grow and increase their value need to move as quickly as possible and have the necessary flexibility to do so. Above all, however, they must be fully focused. These must be highly specialized companies that focus on being more on being among the best in their respective sectors. In practice, such a focus means improved transparency, clear responsibilities, short decision-making processes, flat hierarchies, operational efficiency and effectiveness, faster and more successful innovation, and targeted capital allocation. There are many successful examples of this kind of focus on core businesses in the market, and they show that companies that have emerged from spinoffs have significantly increased their sales, profitability, also the number of employees, and ultimately their enterprise value.
There is hardly any conglomerate out there that is not valued at a discount, and the fewer synergies it has, the greater the discount. The capital market has long valued highly specialized companies more highly than conglomerates. In the current geopolitical situation, a clear focus is also a factor for operational success. That applies to Continental as well. Continental also has great potential to create more value. The Executive Board led by Nikolai Setzer recognized this, and they acted accordingly. The path for the new structure is therefore well prepared. Several strong units have led to three strong units that are now ready to take the next few steps. Achieving this required consistency and a high degree of creative drive. The management team and the employees at Continental as well have demonstrated this time and again in an impressive manner.
I would like to thank you for that on behalf of the entire Supervisory Board because it's true, and we know that all of these are challenging changes. The company has therefore done everything in its power to find good solutions for and together with its employees. You're showing great commitment to the company and to the implementation of the restructuring, and we would like to express our sincere thanks for this because it's true. In this fast-paced world of ours, we need to make bold decisions, and we need to make them now to create more value for all of our stakeholders. Ladies and gentlemen, these decisions are the result of in-depth consultations that shaped the work of the Supervisory Board last year during our five regular meetings, one extraordinary meeting, and one strategy meeting.
This work was continued during the meetings of the committees and in consultations outside the meetings. As Chairman of the Supervisory Board, I also had regular contact with all members of the Executive Board, in particular with the Chief Executive Officer, and discussed current issues and developments within the company with them. In accordance with the recommendation by the German Corporate Governance Code, I also spoke with investors about Supervisory Board-specific topics in the 2024 financial year. At each regular meeting of the plenary session, the Executive Board provided the Supervisory Board with detailed information on the sales, earnings, and employment trends of the group and the individual divisions, as well as on the financial position of the company. The Executive Board explained in detail any deviations in the course of business from the plans and targets set.
It discussed the reasons for the deviations and the measures taken in detail with the Supervisory Board. In addition, the Executive Board regularly informed the Supervisory Board about the situation in the group's key procurement and sales markets and about the development of Continental's share price. In addition, the Supervisory Board's activities and its cooperation with the Executive Board in the reporting year continue to be influenced by the transformation process in the automotive industry, the weak overall economic situation, and the resulting consequences for the company. Of course, in this context, we were repeatedly and intensively occupied with the preparations for the aforementioned restructuring of the company. At the beginning of the year, the Supervisory Board also concluded its investigation into the supply of engine control units and related software.
In addition, the Supervisory Board continued to review measures to strengthen the risk management and internal control system, as well as the compliance management system. At its meeting on the 27th of June 2024, the Supervisory Board decided to merge the areas of responsibility for Finance and Controlling and Integrity and Law. With effect from the 1st of July 2024, it appointed Olaf Schick to head up this new division, and Olaf Schick will now step down from this position with effect from the 30th of September 2025. The Supervisory Board regrets this decision and would like to thank Olaf Schick for his extremely committed and professional contribution to the management and transformation of the company. His successor will be, with effect from the 1st of August 2025, Mr. Roland Welzbacher. Mr. Welzbacher has held several important positions within Continental AG.
Within the Tires group sector, he is currently the Head of Finance and Controlling. After the current restructuring, he will continue to fill his new role as a member of the Continental AG Executive Board. Welcome, Mr. Welzbacher. Katja Garcia Vila stepped down from her position as Chief Financial Officer on the 30th of June 2024. We would also like to thank her for her many years of successful service to the company. Ariane Reinhart will also be leaving us on the 30th of June of this year. Over the past few years, she's led Continental's Human Relations, Sustainability, and Labor Relations Department with great success. The Supervisory Board would also like to thank you, Ms. Reinhart, for your many years of dedicated service. We would like to welcome Ulrike Hintze as her successor.
She will join the Executive Board as Director of Human Resources on the 1st of July, where she will assume responsibility for Human Resources. Ms. Hintze has also previously worked at the Tires group sector and will take over her Executive Board responsibilities for Continental AG beyond the current reorganization. Welcome, Ms. Hintze. We also welcomed Dr. Kevin Borck to the Supervisory Board last year as representative of the senior executives. I'm looking forward to working with him. He succeeds Stefan Schultz, whom I would like to thank for his many years of service on the Supervisory Board. For further details on the work of the Supervisory Board, its Audit Committee, Executive Committee, and Nomination Committee, please refer to the statements in the Supervisory Board report and the corporate governance statement, which are included in the annual report for the year 2024. Next on the agenda is Mr.
Setzer, who will deliver his report with a particular focus on item one of the agenda. Mr. Setzer, you have the floor.
Welcome to Hanover. Welcome, ladies and gentlemen, to the annual shareholders meeting of Continental AG. Dear shareholders, I've worked at Continental for my entire professional career. That's more than half of my life. My first day here was in 1997, almost to the day 28 years ago in the tire testing department. Back then, the company was taking its first steps towards becoming a system supplier. As a tire specialist, the company was expanding its capacity in the chassis sector to make driving even safer. One of the new developments during this time was a 30-meter car named after its shorter braking distance at 100 kilometers per hour, cutting the previous distance by 20%-30%. This was a pioneering achievement in terms of safety.
This made us stronger and bigger. At the turn of the century, Continental had around 45,000 employees. Just 10 years later, there were more than three times as many employees. The company had transformed itself. It continued to produce tires and rubber solutions, while its expertise in electronic systems was also growing. It went all the way up to software-based mobility. Today, this accounts for a large part of our business, with a unique portfolio full of innovation from the road up to the cloud. Change is part of our identity and has been for more than 150 years. It all began here in Hanover with the manufacturing of parts made from soft rubber and cushionings for horses' hoofs.
Since then, Continental has been continually reinventing itself as the times and the circumstances have asked from us, always in sync with our customers and markets, and always in a way that best allowed us to seize our opportunities. After all, our goal has been and still is to create sustainable value for all of our stakeholders. Sometimes we were taking small steps, other times bigger steps were called for. Today, we are taking a giant step, a really huge one, because this step involves the most far-reaching realignment in our company's history. Continental is to become three new companies provided you agree to our proposals: Automotive, Tires, and ContiTech. These are three strong players in their respective industries, which are now ready for their independence. Automotive, with its own listing on the stock market under its own name and accounting for around half of our current workforce.
In September, we want it to be finalized. ContiTech is also poised for independence as a specialist for innovative material solutions with a clear industry focus. We are examining how its potential can best be developed. There are various options on the table, for example, an IPO or, currently most likely, a sale. At this time, we are deliberating this, and then we'll make a decision. ContiTech could become independent in 2026. We will provide you with more details in summer. Now, tires will continue to operate as Continental AG and will be fully focused on the global tire business. In this way, we will create three strong and independent champions: Automotive, ContiTech, and Tires. They will be supported on their path to independence by a lean holding company. Yes, we will be taking a big leap, a bold one, but it's a wise and sensible one as well.
A leap that will create new opportunities for you, our shareholders, and for our customers, and also for our employees. Why so? Because in this way, we will create more value. Why now? Because we are well positioned now, and now we are ready for it, and because the world is changing at a pace we could never have imagined. Supply chains are shifting dramatically, and geopolitical challenges are on the rise. Inflation and tariffs are testing us. On top of this, global car production is barely growing, and technological demands are rapidly increasing. Digitalization, electrification, artificial intelligence, competitive pressure is intensifying. In an environment such as this, history has shown time and again that flexible and focused companies can capitalize on opportunities in a better way than complex organizations. Thus, our ability to change will be giving us a competitive edge now.
We have already taken steps in this direction in recent years. We have prepared our company for the next step, and we have strengthened our group sectors. We have made them more independent, giving them clear structures so they can operate with greater flexibility and make the most of their entrepreneurial freedom. Our Tires group sector is a champion of tires, a top provider of premium tires known for outstanding performance, for comfort, and for sustainability, as numerous independent tests have proven time and again. For summer, for winter, and for all season tires alike. Major awards like the Tire Manufacturer of the Year show this too. They confirm our role as pioneers, setting new standards also more and more through digital innovation.
When it comes to sustainability, two years ago, we launched the UltraContact NXT, and now it's been named as the most sustainable production tire on the market. ContiTech group sector is a champion for the industry with products made from rubber and plastics. For example, hoses in cooling systems specifically designed for service in big data centers, which are rapidly multiplying due to the rise of artificial intelligence. Our advanced materials help prevent heat damage, among other things. Just think about the area of hydrogen, where refueling requires specialized hoses that can withstand extremely high pressures, and at the same time, they have to be airtight, flexible, and durable. That's why we've rolled out a new production process for this new technology at our site in Korbach. This is how we are strengthening our focus in ContiTech.
Our goal is an 80% share in industrial business, as we announced back at the Capital Markets Day in 2023. That is why we are also selling the original equipment solutions business area. That is the business with rubber products for car manufacturers. We have already presented the business area to potential buyers and investors. This will also become an independent company or a fourth champion, as it were. Automotive is today a champion of mobility. Mobility that is safe and autonomous and connected and that inspires people. Automotive is a leader in technology and system solutions with a strong market position in sensors, displays, and brake and comfort systems, with extensive expertise in automotive software and platform architecture and in advanced driver assistance systems and autonomous driving. You can see our group sectors are already very independent because this is how we shape them.
This is why now they have the maturity to hold their own against the competition, building on their individual positions of strength. Despite all the ongoing external uncertainties, 2024 was a good year for Continental because we continued to improve. Our consolidated sales in 2024 amounted to EUR 39.7 billion, which is a decrease of around 4% compared with the previous year. This was mainly due to the weak market environment, especially in Europe. Even so, we managed to increase our adjusted EBIT margin to 6.8%. Overall, we achieved an adjusted operating result of EUR 2.7 billion, which is a plus of more than 6% year on year. In total, we generated a net income of EUR 1.2 billion, slightly above the prior year level. Our adjusted free cash flow remained robust. Despite a dip in sales, we slightly surpassed our target, exceeding EUR 1 billion.
The main reasons for this were the strong tire business and a reduction in inventories. Another reason was a positive cash contribution coming from Automotive. Here, sales in 2024 were at EUR 19.4 billion. The adjusted EBIT margin rose to 2.3%, up from 2% the previous year. This means we improved our performance even further, defying the market trend. It also shows that our measures are having the desired effect. Tires once again achieved a strong result. Sales amounted to EUR 13.9 billion, roughly on a par with the previous year's figures. At 13.7%, the adjusted EBIT margin slightly exceeded prior year figures. This improvement is attributable to the stronger ultra-high performance and winter tire business. We expect Tires to continue to develop at this strong level. ContiTech saw a decline in sales and earnings. Sales were at EUR 6.4 billion, a decrease of 6.7%.
The adjusted EBIT margin was at 6.2%. One thing is clear: we want to perform better this year. Targeted measures have been introduced. All in all, we can say that Continental is in great shape. Once again, we have improved. For your dividend, this means that the Executive Board and Supervisory Board are proposing EUR 2.50 per share, up 13% from the previous year. This is a reflection of our operational progress, our improved earnings, and our solid free cash flow. Now, these ladies and gentlemen are the figures. They reflect our countless technological innovations and our significant efforts to increase efficiency, to achieve stricter cost discipline, and to enhance competitiveness. This applies in particular to the Automotive group sector, which we want to list on the stock market as an independent company, as a global player with exceptional prospects. The following film will provide further details.
My colleague on the Executive Board who heads this group sector will explain this to you, Philipp von Hirschheydt.
The world is changing rapidly. This is also true for mobility. In dynamic times, there is not a lot that is certain and safe. One thing is clear: in a world with 8 billion people, there is not just one type of mobility in the future. Rather, there are many. Some might be concerned. We see this as an opportunity because we are prepared to lead, to transform, and to deliver. We see us as an adaptive powerhouse for the future of mobility, ready for all the challenges that the future has ahead of us. We are ahead of the curve, reliable no matter what, stronger together, and we are committed to win.
Just like the world of mobility is developing, we are developing with our solutions that move the world forward. Focused, dynamic, and as independent as never before, we're always one step ahead. Thus, we make mobility safe, exciting, connected, and autonomous. Inspired by the future, driven by technology.
Thank you very much, Nico. Now, lead, transform, deliver. Ladies and gentlemen, is what we are all about. This is our focus. This is how we will win as a focused tech company with a portfolio geared to the future and a leading position in all the important markets worldwide. I would also like to say welcome to everyone on this day, which is a historic one for us, because today something new can begin, provided you give us your support for more than 92,000 employees worldwide, for our customers and for the future of mobility. Now, this is our plan.
From Automotive, we turn into AUMOVIO. This name in the future will stand for top technologies in software-based mobility because that's the future. Sensor technology, camera, LiDAR, and radar systems, displays, brake and comfort systems, architecture platforms, and assistance systems. Of course, the software itself. This can be done by AUMOVIO. All this will be delivered by AUMOVIO. We generate 80% of our sales with products that rank among the top three in their respective markets. In 2024 alone, we received orders of around EUR 19 billion from virtually all major automotive manufacturers. At the same time, we are continuously improving our efficiency and our effectiveness, while at the same time, we're reducing our costs. We are in a solid financial position, and we will be starting with a strong balance sheet. We have everything that we need to achieve sustained success as an independent company.
We make mobility safer. We connect it. We develop innovative solutions, and we make mobility autonomous with more than 277 million sensors and control units, which are already in use today. Our high-performance computers are the control centers of modern vehicles. They manage the control of airbag deployment, mobile phone integration, automatic climate control, and other functions. They do so, for example, in Volkswagen's ID models or in the models of the Chinese manufacturer GAC, and also in the new electric car from Sony Honda Mobility. They also carry our software. It's included in autonomous driving, for example, with fully self-driving trucks, for which extensive tests are already underway in our cooperation with Aurora in the U.S. The first autonomous trucks are expected to be on U.S. highways by 2027.
Our task in this is to assemble the modules for the autonomous driving system and then to scale them up to industrial level. This includes key components such as radar and camera sensors, as well as LiDAR sensors, which we have developed jointly with our partners. As a kind of sensory organ, they form the central interface to the outside world. We're also supplying control units and high-performance computers for processing the mobility data that were collected. To ensure an added layer of safety, our company is developing the entire fallback systems. If the autonomous driving system fails, our software takes over. Testing of the Aurora trucks is currently underway on major highways. For safety reasons, we still have human drivers on board. Soon, however, the trucks there will drive fully autonomously. As you can see, the future of mobility has many facets.
To do justice to these, we need a real powerhouse, one that combines strength with flexibility. This is precisely what AUMOVIO stands for. This is how we intend to fully harness our potential and create even more value by making decisions faster, by adapting more flexibly to regional markets, and by deploying our capital resources with even greater precision. We have prepared the groundwork for all of this diligently. Now implementation can begin with focus, with determination, and with speed. Lead, transform, deliver. This is what we stand for. We are looking forward to it. I am looking forward to it personally, ladies and gentlemen, together with an amazing team of experts shaping the mobility of tomorrow. Thank you very much for your attention.
Thank you so much, Philipp. I am sure AUMOVIO is worth the applause, as you see, dear shareholders.
The company has a tremendous value potential with top technologies, with system expertise, with a high level of vertical integration, with great flexibility, and because of our customers' confidence in us. We also see added value creation for ContiTech because our expertise is in demand across the industry, as shown by a recent order for the world's strongest conveyor belt. With a maximum width of 3.20 meters, it can pull a total weight of 3,200 metric tons. That's equivalent to more than 300,000 car tires. It demonstrates ContiTech's capabilities. We are confident that an independent ContiTech will leverage its full potential for growth and value creation. For our tires, it is true they're much in demand.
Eighteen of the world's twenty highest volume manufacturers of electric vehicles worldwide put their trust in tires from Continental, as do nine of the ten highest volume manufacturers in the Asia-Pacific region. This is leading to increased demand for our tires. We're responding by planning investments to the tune of EUR 300 million at our tire plant in Rayong in Thailand to gradually increase capacity in the years ahead. Ladies and gentlemen, we are, of course, aware that the proposed transformation will mean extensive changes for our employees. This is why we are shaping this transformation together with our social partners. We will seek and we will find good solutions, even where it's not that easy, because our goal is the same: sustainable success, greater competitiveness, which will mean improved future job prospects.
Our more than 190,000 employees have demonstrated exceptional commitment and great personal dedication over the past weeks and months. This impresses me every single day. Also, on behalf of the entire Executive Board, I'd like to say a big thank you to all of you. Apart from that, I would also like to say thank you to you, dear Ariane. As we heard on the 30th of June, you'll be stepping down from your role after more than 10 years on the Executive Board. You've been in charge of Human Relations and Sustainability since 2014, during a particularly intensive period of transformation. Together with your team, you have played a crucial role in shaping the transformation together with our social partners, in particular when it came to the positive development of our group sectors. This was very important.
This is also true for your innovative concepts around qualification, socially responsible change. Take the Continental Institute for Technology and Transformation, for example. You made that happen. Take the Alliance of Opportunities, which helps people transition from one job to the next across company borders. You gained approval and recognition far beyond our company's borders, rightly so. Thank you so much, Ariane. I wish you all the best for your future. I am also pleased today to welcome your successor here, Ulrike Hintze, who will join the Executive Board on the 1st of July as Director of Labor Relations and Head of HR. Welcome, Ulrike. I would also like to say thank you to Olaf Schick. Dear Olaf, two years ago, you assumed responsibility for integrity and law. Since last year, also, you took over the finance function.
In September, you will be joining Mercedes-Benz, and you will be leaving Continental. We are very sorry to see you go. First of all, let me say thank you to you. You set up a modern and integrated compliance system. You played a crucial role in speeding up our legal matters and resolved them and helped improve our results. Last but not least, you have been very important in making our automotive spin-off a success. To you as well, Olaf, all the best. Your position as CFO will be assumed by Roland Welzbacher on the 1st of October, just like Ulrike Hintze. For many years, he has collected experience and know-how in our group sector, tires. Olaf Welzbacher at the moment is heading finances and controlling there. He will hold this position in personal union until the end of the office.
Ulrike and Roland will be working on the tire-focused Continental AG. A warm welcome to you, dear Roland. Together with our employees, all of you have proven that Continental is not just a company. It is a team. A team that pursues its goal of creating value for everyone connected with this company, be it as customers, as colleagues, or as shareholders. Today, we want to transform Continental together, and we want to unlock new strength. Dear shareholders, we ask for your approval. We also want to answer the question, what you can expect from us in the future. The answer is more value. For 2025, we anticipate consolidated sales of around EUR 38 billion-EUR 41 billion and an adjusted EBIT margin between 6.5%-7.5%.
Sales in Automotive is expected to be between EUR 18 billion and EUR 20 billion, with an adjusted EBIT margin of around 2.5%-4%. For Tires, we forecast sales of around EUR 13.5 billion-EUR 14.5 billion and an adjusted EBIT margin between 13.3%-14.3%. For ContiTech, we expect sales between EUR 6.3 billion-EUR 6.8 billion and an adjusted EBIT margin of between 6%-7%. The adjusted free cash flow is projected to be around EUR 0.8 billion-EUR 1.2 billion. This shows our focus is on creating value. We know this takes courage, courage to change. Change, that is part of our identity. Not everything is in our hands, but change is something we know how to do. As we have adapted to changing circumstances and times in the past, we are committed to the best way forward for Continental.
This is what we are laying the necessary groundwork for. This is our goal. This is what we are asking you to approve of today, to accomplish Continental's most profound transformation in over 150 years. Thank you so much.
[Foreign language] Lieber Herr Setzer, vielen Dank. Ich kann bestätigen, dass sich die gesamte Organisation dafür einsetzt, Continental mit Erfolg durch diese herausfordernde Zeit der Transformation und Neuaufstellung zu führen. Der Aufsichtsrat unterstützt Sie und Ihre Kolleginnen und Kollegen im Vorstand nach Kräften dabei, die Neuaufstellung in allernächster Zeit zu realisieren. Uns allen ist bewusst, welche Anstrengungen das verlangt. Umso herzlicher danken wir Ihnen für Ihre Arbeit und Ihr Engagement. [Translator] We are all aware of your commitment and also for not just yours, but all of the different employees in the Continental Group worldwide. Ladies and gentlemen, I would now like to go through the other items on the agenda.
We want to deal with all of the answers to your questions and all items of the agenda together as part of the plenary. Start with item two on the agenda, which reads resolution on the appropriation of net profit. The Executive Board and Supervisory Board propose that the net income Continental AG have generated in fiscal 2024 in the amount of EUR 5,317,421,249.70 be used to pay a dividend of EUR 2.50 per share. This equates to a total dividend payment of EUR 500,014,957.50. It is further proposed that the remaining amount of net income of EUR 4,817,406,292.20 be allocated to other revenue reserves. Item three on the agenda is resolution on the ratification of the actions of the Executive Board members for fiscal 2024.
The Executive Board and Supervisory Board propose that the actions of all Executive Board members in office in fiscal 2024 be ratified for this period. Please note that in this resolution, you are free to decide on the ratification of the actions of each individual member of the Executive Board separately. Item four on the agenda is resolution on the ratification of the actions of the Supervisory Board for fiscal 2024. Again, the Executive Board and Supervisory Board propose that the actions of the members of the Supervisory Board who were in office in fiscal 2024 be ratified for their terms in office. This resolution will also be adopted by means of individual vote. Item five on the agenda reads resolution on the appointment of the auditor and the group auditor and the auditor for the review of interim financial reports for fiscal 2025.
Now, based on the recent recommendation of the Audit Committee, the Supervisory Board proposes that PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, the Hanover branch office, be appointed as auditor of the annual financial statements and the consolidated financial statements and as auditor for any review of interim financial reports to be conducted during fiscal 2025. The Audit Committee has declared that its recommendation is free of any undue influence on the part of third parties and that no clause restricting the selection options within the meaning of Article 6 of Section 16, Paragraph 6 of the EU statutory regulation. Item six of the agenda deals with the resolution on the appointment of the auditor of sustainability reporting for fiscal 2025. Now, despite the expiry of the transposition deadline, the EU directive on sustainability reporting has not yet been translated into national law in Germany.
This directive stipulates that the auditor of sustainability reporting must be appointed by the Annual Shareholders' Meeting. It can be assumed that these European requirements will be incorporated into German law in future. It is still unclear, however, whether the audit of sustainability reporting will merely be the responsibility of the auditor or whether an explicit separate appointment of an auditor for sustainability reporting will be required instead. Thus, we would like to take a precautionary measure in case an appointment should be required by law and adopt a resolution today.
Based on the recent recommendation of the Audit Committee, the Supervisory Board proposes that PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft with the Hanover branch office be selected as the auditor of sustainability reporting in accordance with the EU sustainability reporting directive for fiscal 2025 as a precautionary measure in the event that German law should require the explicit appointment of such an auditor by the Annual Shareholders' Meeting. The Audit Committee has furthermore declared for this proposed resolution that its recommendation is free of any undue influence on the part of third parties and that there exists no clause restricting the selection options within the meaning of Section 16, Paragraph 6 of the EU statutory audit regulation. Item seven of the agenda deals with the resolution on the approval of the remuneration report.
The Executive Board and Supervisory Board propose that the remuneration report for fiscal 2024 be prepared and audited in accordance with Section 162 of the German Stock Corporation Act be approved. Moving on, item eight on the agenda deals with the resolution on the approval of the merger agreement between Continental AG and Continental Automotive GmbH. The merger of Continental Automotive GmbH into Continental AG serves as a preparatory measure for the spin-off of the automotive and contract manufacturing divisions, which will be voted on in the next item on the agenda. At this point, I would like to ask you, Mr. Schick, to explain the merger agreement between Continental AG and Continental Automotive GmbH signed on March 13, 2025, in accordance with Section 64 of the German Transformation Act.
Thank you very much, ladies and gentlemen.
We ask you, our shareholders here today, for your approval of the merger of two corporate companies. Continental Automotive GmbH as the transferring legal entity and Continental AG as the acquiring legal entity. This merger will only take effect if you agree to the merger agreement. As Professor Reitzle already mentioned at the beginning of his statement, the merger serves as a preparatory measure under corporate law for the spin-off of the automotive and contract manufacturing division, which I will explain to you in more detail on the next item of the agenda. Continental Automotive GmbH is currently merely an intermediate holding company and holds the shares in Continental Automotive Technologies GmbH, which in turn is the parent company of the automotive and contract manufacturing segments.
Now, following the merger, Continental AG will, as a first step, become the direct parent company of Continental Automotive Technologies GmbH, which may then, in a second step, be transferred directly to Continental Automotive Holding SE as part of the spin-off. The merger agreement has been available for download on our website since the 19th of March. The agreement essentially governs the transfer of the assets of Continental Automotive GmbH in their entirety, that is, with all rights and obligations to Continental AG. Now, most notably, this includes the shareholding in Continental Automotive Technologies GmbH, in addition to the domination and profit and loss transfer agreement with Continental Automotive Technologies GmbH. This will then continue to exist between Continental AG and Continental Automotive Technologies GmbH. Now, for the sake of commercial reporting, the transfer will take effect on January 1, 2025.
No concessionary measure shall be necessary on the part of Continental AG for receipt of the assets as it holds all shares in Continental Automotive GmbH. The merger will not lead to any changes in employment law for the employees of Continental AG, nor to any changes in the organization of the companies. This is because Continental Automotive GmbH does not have any employees. There will also be no related effects in this regard either, nor will there be any changes to the representative bodies of Continental AG. Most notably, no managing director of Continental Automotive GmbH will be appointed as a member of the Executive Board of Continental AG. Now, following the merger agreement and its execution, Continental Automotive GmbH will cease to exist, and the costs incurred by the merger agreement will be borne by Continental AG.
There have been no material changes to the assets of the companies involved since the merger was concluded. As you can see, this measure constitutes an important step in the preparation for the spin-off of Automotive and contract manufacturing. We thus ask you to approve the merger agreement here today.
Mr. Schick, thank you very much for your explanation. The Executive Board and Supervisory Board thus propose that the merger agreement between Continental AG and Continental Automotive GmbH dated March 13, 2025, be approved. On to item nine of the agenda, resolution on the approval of the spin-off and transfer agreement between Continental AG and Continental Automotive Holding SE. As I mentioned earlier, we are asking you, our shareholders, to approve the spin-off of the Automotive under this item on the agenda.
Again, Section 64 of the German Transformation Act stipulates that the Executive Board is required to explain that the spin-off and transfer agreement between Continental AG and Continental Automotive Holding SE was signed on March 13, 2025. Mr. Schick, I ask you once again to provide your explanatory remarks.
I would be happy to, ladies and gentlemen. Today, we are asking you, our shareholders, to approve the spin-off and transfer agreement, which governs the legal independence of the two segments called Automotive and Contract Manufacturing and their departure from the Continental Corporation, the aim of which is to create a new independent automotive group, which will then also be listed on the stock exchange. The agreement has been available for download on our website since March 19. Now, here you will also find the detailed demerger report and the demerger audit report.
In operational and organizational terms, Automotive and contract manufacturing are already largely independent. The joint operating parent company of Automotive and contract manufacturing is Continental Automotive Technologies GmbH. Following the merger discussed under item eight, after the merger discussed under item eight takes effect, Continental AG will hold this company directly and as the controlling company will have a domination and profit and loss transfer agreement with said company. Our plan is to transfer Continental Automotive Technologies GmbH, including the domination and profit and loss transfer agreement, to Continental Automotive Holding SE with retroactive commercial effects at January the 1st, 2025. The transfer is to take the form of a spin-off for absorption. This specific structure will allow us to better prepare the steps which come next, most notably the planned IPO of Continental Automotive Holding SE.
What this means is that you, as shareholders in Continental, will be granted shares in Continental Automotive Holding SE, a concessionary measure for the transfer of the shares in Continental Automotive Technologies GmbH, and thus the automotive and contract manufacturing businesses. As a result, Continental Automotive Holding SE will become the independent listed parent company of the future automotive group. Today, Continental AG is the sole shareholder of this parent company. Following the transfer, Continental AG will only have a minimal stake in Continental Automotive Holding SE for a short period of time. You, as Continental shareholders, will then also be shareholders in automotive. The spin-off and transfer agreement was not—sorry, you will then also be automotive shareholders. The spin-off and transfer agreement was notarized on March 13th between Continental AG and Continental Automotive Holding SE.
It determines in detail, and as required by law, the modalities of the transfer and the issue of new shares of Continental Automotive Holding SE for the implementation of the spin-off. Furthermore, the agreement makes provisions for the transitional period between the coming into effect and the entry of the spin-off into the commercial register, and furthermore contains provisions on the allocations of liability and costs. It also describes the consequences of the spin-off for the employees and their representatives. A corporate separation agreement was also concluded to define the future relationship between the Continental Corporation and the new automotive group, which sets out how the continuation of automotive activities will be guaranteed. This includes planned capitalization with cash amounting to EUR 1.5 billion. Amongst other factors, it governs the transfer of contracts, mutual indemnifications, and cooperation between the two groups.
We, the Executive Board of Continental AG, are firmly convinced that the spin-off is in the interest of the company and, most importantly, is beneficial for you as shareholders. The reason for this is that the fast-changing nature of the automotive sector is intensifying. By becoming legally independent, Automotive can react better to wide-ranging market changes and evolve its business with greater flexibility and independence, and with a clear focus on automotive electronics. Continental, in turn, can structure its divisions and business areas in the best possible way and thus fully exploit their potential. The spin-off will lead to more agile and flexible structures, which will allow Continental to narrow its focus, position itself more resiliently, and enable a continuous increase in value. The spin-off will give you, as shareholders, the opportunity to participate in both of these trends.
As a result of the spin-off, after all, you will also receive shares in Continental Automotive Holding SE, which will then be listed independently on the stock exchange as the parent company of the new automotive group in proportion to your Continental shareholding. You will receive these shares in Continental Automotive Holding SE at a ratio of two to one. What this means is that for every two Continental shares you have, you will also receive one share in Continental Automotive Holding SE. If deposits of Continental shares are not evenly divisible by two, the shareholder will initially receive half shares in one share of Continental Automotive Holding SE, which are called fractional shares, and these will then be settled in cash without any participation being required. The allocation ratio pursues the following objectives.
The amount of future share capital of Continental Automotive Holding SE will be proportionate to the equity and the expected market cap of Continental Automotive Holding SE. In addition, it aims to reflect the relative sizes of the companies involved and minimize the extent of any share price peaks. Furthermore, the future share price of Automotive is expected to be within an attractive range for future shareholders. The Executive Board believes that all of these objectives will be achieved through the allocation ratio of two to one. The court-appointed spin-off auditor, PricewaterhouseCoopers GmbH, Wirtschaftsprüfungsgesellschaft, also has confirmed the appropriateness of this allocation ratio. We explained the determination of the allocation ratio in detail in the demerger report dated March 13th. These explanations and justifications continue to apply. The allocation ratio remains adequate.
In particular, there has been no material change in the assets of Continental AG nor in Continental Automotive Holding SE since the signing of the spin-off and transfer agreements. Therefore, there is no reason for a possible reassessment of said allocation ratio. We are convinced that the spin-off of Automotive and contract manufacturing will be able to leverage the full value and growth potential for you, our shareholders, and we therefore ask that you approve the spin-off here today.
Mr. Schick, again, thank you very much for your explanation. The Executive Board and Supervisory Board propose that the following resolution be adopted. The spin-off and transfer agreement between Continental AG and Continental Automotive Holding SE dated 13th March 2025 be approved.
The Executive Board is instructed to file the spin-off for entry into the commercial register only after the end of June the 30th, 2025, and immediately prior to the approval of the listing prospectus coordinated with the German Federal Financial Supervisory Authority, and in no circumstances any later than August the 31st, 2025. We will continue with the next item, which relates to amendments to the articles of incorporation of Continental AG. In this respect, we are taking to make the provisions of the articles of incorporation more flexible, to update them on an ongoing basis, and to adapt them to the company's circumstances. Item 10 on the agenda deals with the resolution on the amendment to Section 10 of the articles of incorporation on reducing the size of the Supervisory Board.
The Executive Board and Supervisory Board propose that Section 10 of the articles of incorporation be amended in accordance with the proposed resolution provided to you in advance. In this manner, we aim to create flexibility. At present, our Supervisory Board consists of 20 members, each of whom is equal representation. This arrangement is based on the Code Determination Act, which applies to Continental AG and also to the fact that the German group companies employ more than 20,000 people. However, the number of employees of the Continental group will decrease significantly following the intended spin-off of Automotive. The reason being, the employees of Automotive will no longer be part of the Continental group. The new provision in the articles of incorporation is thus intended to allow the company to structure the size of the Supervisory Board in accordance with the requirements of the German Code Determination Act.
If the number of Continental's German employees should fall below the statutory threshold of 20,000 employees in future, this will then, or this can, be reflected by reducing the size of the Supervisory Board. On to item 11 of the agenda, resolution on the amendment to Section 10 of the articles of incorporation and on the alignment to requirements of the German Corporate Governance Code. The Executive Board and Supervisory Board propose that Section 10, paragraph 2 of the articles of incorporation be amended in accordance with the proposed resolution provided to you in advance of the shareholders' meeting. This amendment aims to remove the option of a list-based election for Supervisory Board members from the articles of incorporation. Pursuant to the requirements of the German Corporate Governance Code, Supervisory Board members have always been elected on an individual basis in the past.
This practice is now to be clearly embedded in our articles of incorporation. Item 12 on the agenda deals with the resolution on the amendment to Section 10 of the articles of incorporation on making recognitions of the members of the Supervisory Board more flexible. The Executive Board and Supervisory Board propose that Section 10, paragraph five of the articles of incorporation be amended in accordance with the proposed resolution provided to you in advance. The proposed amendment aims to allow the Chairman of the Supervisory Board to waive the four-week notice period for resignations of Supervisory Board members in future. Item 13 on the agenda deals with the resolution on the amendment to Section 17 of the articles of incorporation on making the location of the Annual Shareholders' Meeting more flexible.
The Executive Board and Supervisory Board propose that Section 17 of the articles of incorporation be amended in accordance with the proposed resolution provided to you in advance. The purpose of this amendment is to grant more flexibility in choosing the location of the Annual Shareholders' Meeting. In addition to Hanover, it should also be possible to hold the Annual Shareholders' Meeting in a German city that has a stock exchange or that has more than 150,000 inhabitants. When it comes to a virtual Annual Shareholders' Meeting, however, these requirements will not apply. Ultimately, we come to item 14 of the agenda dealing with the resolution on the amendment to Section 21, paragraph four of the articles of incorporation on alignment to the statutory provisions. The Executive Board and Supervisory Board propose that Section 21, paragraph four of the articles of incorporation be deleted and not replaced.
This is intended to align the articles of incorporation with the legal provisions governing the supply of documents in the run-up to the Annual Shareholders' Meeting in order to facilitate access to the preparatory documents for shareholders and reduce the workload for the company. These will in future may only be made available on the company's website, and paper-based documents will no longer be provided to shareholders by the company. Ladies and gentlemen, this concludes the remarks on the items of the agenda, and I would now like to announce the attendance. Of the register in which amounts to EUR 512,015,316.48 and is split into 200,005,983 no-par value shares, 165,000,267 no-par value shares with as many votes are represented here today. This corresponds to 82.63% of the registered share capital. Furthermore, there are postal vote votes, 75,579, which are represented here.
Thus, a total of 165,347,230 no-par value shares are represented. That is 82.67% of the share capital, which is represented here today. Shareholders, we are now happy to enter the general debate. I would like to ask you, in the interest of the meeting, to keep your speeches brief, to limit your remarks to the items on our agenda, and to formulate any questions clearly in order to make it easier to answer these questions. If you would like to table a motion, I would ask you to announce your motion when you request the floor. In this way, I can decide whether you will be given priority to speak as an exception. Your questions will be answered by the members of the Executive Board. I myself will respond to the questions concerning the Supervisory Board, whereby the Executive Board will adopt these answers as its own.
I hereby open the general debate. As the first speaker, I ask Christian Retkowski from the SdK, German Association of Investors, to one of the two rostrums, and the next speaker, Ms. Ina Jähne, to stand ready. Mr. Retkowski, please.
Thank you very much for giving me the floor, Professor Reitzle. Ladies and gentlemen, Supervisory Board, Executive Board, now may I present myself quickly. My name is Christian Retkowski, and I'm the spokesperson of the SdK, German Association of Investors. I represent the proxy cards 1008, own shares of the Continental AG. I don't own any myself.
Ladies and gentlemen, I would like to go into some topics as briefly as possible regarding the embedding of the Continental group in the geopolitical situation, economic situation, the spin-off of AUMOVIO from Continental AG, the envisaged sale of ContiTech, and last but not least, the share price development in the past few years. Ladies and gentlemen, now before I come to these topics proper, may I praise and thank, which is probably a bit unusual because we, the representatives of shareholders, are usually known for our criticism. Firstly, the management of Continental AG for the implementation of an in-person AGM. Thank you very much. You all know the position of the SdK. I would just briefly like to repeat this.
When it comes to the AGMs, the in-person AGM has several advantages vis-à-vis the virtual AGM because of personal interactive exchange between the Supervisory Board, Executive Board, and the shareholder representatives, but also the possibility of communicating between the shareholders, and therefore the maintenance of the culture of shareholding and the maintenance of all the rights of the shareholders. In particular, I would also like to praise the management because there was no attempt, like in the COVID times, to hide between the cameras, but when it comes to the important topics, spin-off AUMOVIO and the sale of Quantitech, to present themselves to the discussion in person. Ladies and gentlemen, I would like to have some questions regarding the AGM itself. Firstly, the question whether in future you will continue to prefer in-person AGMs and for which reasons.
Last year and this year, you decided in favor of an in-person AGM. I would also like to ask you to tell us how many shareholders were there in the last in-person AGM in 2024 and how many of them are present today, how many shareholders were present at the two virtual AGMs before that, how many shareholders were present at the virtual AGMs from abroad, and how many shareholders then used their right to ask questions. Just a brief question regarding AUMOVIO. Maybe you can also tell us how the future AGM format will be designed. Will it be an in-person or a virtual format? Where will it be? Frankfurt is the headquarters of AUMOVIO. Is it going to be Frankfurt or is it going to be the Hanover region once again?
Furthermore, ladies and gentlemen, I would also praise, thank, and recognize the entire employees of Continental AG for the very good performance in the last fiscal year in the times of insecurities, worldwide crises, and fragilities. I think it is really not all that to be taken for granted that you do your job every day just the same. Ladies and gentlemen, now let me come to the first area, the economic and geopolitical situation. Trump's second time in office with his trade war and his rather unconventional style of leading, the terrible Ukraine conflict, and the Gaza conflict, which is expanding world recession, a growing societal division in Europe, and many other things, ladies and gentlemen, are dominating the global situation at the moment. Now, we can't get into all of these topics today, but I will go into the threatening trade war. Here are my questions.
What about the possible severe trade policy, tariff policy of Trump? What kind of an impact will it have on the business development of Continental? How many % of the shares are done by Continental in the United States, and how much of the shares in the United States are already being produced in the United States? What about the competitors of Continental? Are they also represented in the United States with similar numbers of locations? The framework conditions are changing ever more quickly. In order to be able to react to them, ladies and gentlemen, companies, and in particular, big groups have to be more flexible, more resilient, and more competitive. Now, a response can be to see to it that complex structures are broken up, individual areas are spun off, and to make them independent.
A spin-off of the automotive sector here at Continental AG, so-called spin-off, makes sense from our point of view, the SdK's sense of view. It seems to be the right response to the challenges of the future and to the improvement of the organization of the company. The spin-off alone, when it comes to the problems within the Continental group, will not be enough to push away all the problems. The problems of the last years, starting with the emission scandal, antitrust problems, quality problems, cyber attacks, low margins, job cuts, led to a major loss in trust in the capital market, which was also reflected in the share price of the past few years. When it comes to these homemade problems, the spin-off of the automotive sector will not be enough to solve them.
The spin-off can and must be a first step to ensure that the loss of trust in the capital market can be restored. The trust of capital market participants is an important building block to be more successful in the future. It is also important to ensure that the trust of employees is regained or to not lose it. All this regaining trust on the capital market, regaining or not losing trust of the employees, is going to be rather difficult, but it is going to be the decisive factor whether this new strategy is going to be successful or not. Ladies and gentlemen, I would like to ask some more questions regarding the spin-off itself.
Apart from the increased resilience, competitiveness, maneuverability, and flexibility of the individual sectors, which are the reason for the new strategic alignment, what specifically are the costs, the savings effects, and the specific additional incomes regarding the spin-off of AUMOVIO? Professor Reitzle and Mr. Setzer, you talked about the personnel changes at Continental AG and explained them. Maybe I would like to ask you to let us know about the planning for AUMOVIO in this new AUMOVIO, as long as this planning, or if this planning has still been set up. Maybe you could let us know something about the planning. After the spin-off of AUMOVIO and the preferred sale of Quantitech, and in times of working from home, the new headquarters at the Continental Plaza in Hanover, isn't this probably a bit too big? Maybe you can give us your take on that.
Please explain in more detail what is going to be done in terms of employees. How many are going to be transferred to AUMOVIO? How many are going to stay with Continental AG? How many jobs are going to be cut? This brings us to trust once again. What about the mood among the employees for your strategic realignment? Apart from the spin-off of AUMOVIO, ContiTech, as we heard, is most probably going to be sold, so that Continental is going to act according to the motto "Back to the Roots." It is going to be a pure tire manufacturer. Here, once again, I would like to ask a few questions. For which precise strategic reasons is the area ContiTech most probably going to be sold? Why is it going to be a sale and not a spin-off as for the automotive branch?
Taking into account these two strategic realignments, could you please explain how many and which locations are going to be shut down or merged, and how many jobs are going to be affected? After the spin-off of AUMOVIO and the envisaged sale of ContiTech, Continental AG would go back to one-third of sales from 190 million employees. It would have 57 million employees. My question is, what about the future sales growth in the new Continental AG? What's this going to look like? Where's the new regional focus of sales growth? Is it Asia, Europe, North America? Are efforts being taken to take over other tire manufacturers, or is organic growth planned essentially? A question regarding tire production for agricultural production, which is going to be discontinued, as far as I understand, what strategic reasons were responsible for this?
The question whether, if there is a sale of ContiTech, there will be a special dividend or what the possible proceeds of the sale are going to be used for. Ladies and gentlemen, the future and the future development of Continental Group is of decisive importance, but only those who know the past can understand the future and design the present. The past of the last 10 years, when it came to the share, looked rather disappointing. In the last 10 years, the DAX was able to rise 80%, but only this share of the Continental share lost 60% of its value. Apart from Bayer, it is the worst performance in the DAX, excepting Wirecard. When it comes to the diesel scandal, Volkswagen, the share only lost about 30%.
My question is, how do you evaluate this historic development of the Continental share in comparison to the DAX in the last 10 years, and what influencing factors do you see for this very poor share price development in the last 10 years? Just one personal comment. I have been in this business for a long time and have been here for a long time, and I personally always had the feeling that when it came to Continental AG, the focus was a little too much on visionary future prospects. To my mind, Continental was equal to autonomous driving. An investment into the Continental share was probably a bet on autonomous driving, if you will. There was less focus on good tires, good braking systems, and all the other products. This is my opinion. Maybe you can comment on this.
This was probably one important factor for the disappointing share price development of the past years. Ladies and gentlemen, before I come to the end of my presentation or answers, the question to the Supervisory Board: Was there in 2024 or in the first months of 2025 any compliance violations that are known to the Supervisory Board within the Continental Group? What about the current status of the compensation payments and the antitrust proceedings? Ladies and gentlemen, we at SdK think that it is a difficult situation to make this new strategy work and to downsize Continental, but we think that it is the right step in the right direction. We, as SdK and I personally, wish you every success on this rather stony path, and we hope that it's going to be successful and socially compatible.
At today's AGM, the SdK will approve of all the items on the agenda. That brings me to the end of my deliberations. Thank you very much for your attention, and I'm looking forward to meeting you again in presence next year. Thank you.
Thank you very much, Mr. Retkowski. We will start by collecting all of your questions and answer them in one go. If there are too many questions, I will interrupt the list of speakers temporarily and ask the Executive Board to respond to the questions so far. I'd now like to give the floor to Ms. Ina Jähne from DSW, German Investor Association, and I'd like to ask Mr. Böhler to get ready.
Thank you very much, Professor Reitzle, members of the Executive Board, members of the Supervisory Board. Ladies and gentlemen, I'm Ina Jähne.
I'm a lawyer from Hanover, and I'm speaking to you on behalf of those shareholders that have transferred their voting rights to DSW, the German Investor Association. Mr. Setzer, the motto of your speech was "Unlocking New Powers." You could also say, and Mr. Ritkowski, we seem to be thinking about the same thing because it says "Back to the Roots" on my script here, but this was certainly not the kind of positive impetus that the shareholders like to see. Continental AG follows on from other companies, you know, moving from a mixed group to a player group. And this line led to positive responses regarding the share price, and this continued this week as well. It seems, as far as the capital markets are concerned, like this is a positive signal and a step in the right direction.
At DSW, we are also positioning ourselves that way regarding your future plans. However, this begs another question. What are the advantages for the shareholders as you refocus your attention on Tires, and what are your ideas regarding the future dividend policy of a new refocused Continental AG? Now, without any doubt, this is a true case of disruption we're currently witnessing at Continental AG. After the Automotive spin-off, ContiTech is going to be sold. Mr. Setzer, you announced that you would be stepping down shortly. Ms. Reinhart and Mr. Schick as well. Unlocking New Powers. It seems like there's going to be a new leadership team at Continental AG to go down that road. This is inevitable. There will be a transformation both in terms of structural aspects and personally as well.
We're asking for you to come up with a structured, targeted approach and consistently follow through on a path towards a structure where you can make sure that you live up to the difficult circumstances out there today and at the same time make the company fit for the next few years. This begs the question: What are the criteria when it comes to the selection of the new CEO, and what are the Supervisory Board's expectations in this context? Moreover, I'd also like to know what the composition of the Executive Board will be in 2026. We've already learned about two of the new members. The transformation has led to, well, substantial uncertainty already and will continue to do so amongst the Continental workforce. Mr. Ritkowski, I think the new headquarters is very much emblematic of that.
I passed by coming here this morning at the new headquarters, and, you know, only a few workplaces were actually occupied when I passed by this morning. This is what made me wonder: Is it possible that the building is perhaps completely overdimensioned for the future of Continental AG? This may be a token of these new plans for Continental AG, which we did not anticipate looking back at the past few years, where you would always say that you would keep these three areas alive under the umbrella of Continental AG. It is important for me to highlight the impact on the Continental workforce. This must not lead to the outflow of know-how and expertise, you know, because the uncertainty that we are currently witnessing might mean that higher performers might feel tempted to go elsewhere on their own initiative, looking for other places to work.
What is the current status of your talks with the trade unions and the works council? Can I also ask you, are you witnessing an outflow of high performers already because of the uncertainty that is developing? What is your take on the economic conditions of Germany as a business location given the incoming new federal government? Mr. Hirschhaut, in an interview with the Welt newspaper, you said that you will require a market environment where bureaucracy and regulatory affairs are cut back to what is absolutely necessary, and you would also like to see a cap on payroll costs, and you would like to see changes to the tax system. Professor Reitzle, you also criticized the political framework conditions out there. Can I ask you, will there be further job cuts in German locations? What about the economic disadvantages in Germany?
What about the competitive disadvantages between Germany and other countries? What other locations would be more attractive than Germany as far as you are concerned? Looking at the global complexities out there, Mr. Ritkowski preempted one of my questions, and he specified it even a little further. I would like to ask you, to what extent Continental is affected by the tariffs, you know, especially when looking at Mexico? Can I also ask you to please comment on the question of how Continental will go about its future ESG strategy? The American administration, but also companies such as BlackRock, are positioning themselves completely differently from the past, and they are clearly walking away from ESG. Are you expecting any disadvantages as far as ESG is concerned and the new collaboration questions in the U.S.?
Now, the focus will certainly be, at least at this ASM and this year, on the transformation. We need to clean up some things of the past. More specifically, what measures have been taken in order to make sure that the shareholders are compensated for the damages done in the context of the diesel scandal? To what extent will damages be asserted, and have you made sure that they do not become time-barred? What is the expected damage for shareholders in connection with the brake issues? BMW, are you looking into who is responsible? What about the current status of your internal investigations? Are you coming to terms with it? What is the current status of your talks with BMW in this respect? I would briefly like to address the agenda. DSW is going to vote in favor of all agenda items.
However, we would like to get further explanations as to item 13 beyond the reason stated in the agenda. More specifically, are you planning to have the AGM next year at a different city, not Hanover, but in a city with at least 150,000 inhabitants? If so, for what reason, and where should the ASM preferably take place? How come, you know, this threshold of 150,000 inhabitants? We will also vote in favor of the spin-off because we clearly expect that the spin-off will turn out something good for the shareholders. Over the past few years, we suffered from the weak performance of Automotive. Remains to be seen what the future performance of Automotive will be like. Before I conclude, I'd also like to say some words of thanks. First, for having chosen the format of an on-site, in-presence ASM.
DSW is also very much in favor of upholding shareholders' rights, and this can only be done by way of hybrid or face-to-face ASMs. We would like to thank you for that very much. Apart from that, thank you for your attention, and I am looking forward to the debate. Thank you.
Thank you, Ms. Jähne. I would like to ask Mr. Böhler to take the floor, and I would like to ask Ms. Angela Banfield-Fox to get ready. Just for your information, Mr. Böhler, your speaking time is restricted to 15 minutes. Mr. Böhler, you have the floor.
Last year it was 20 minutes, but I am going to manage. Good morning, Mr. Reitzle, members of the Supervisory Board, Executive Board, fellow shareholders. Last year, I received a note to the question whether there was a strategic change. You were talking about continuity, whether you are talking about personal or structural continuity.
You said that you would continue on present course. As it happens, this only was valid until August of last year. I think even before that, you were preparing for what we're seeing now, but decided to announce it at a later point in time only. Mr. Schick, your statement on integrity, I listened closely. You know, you won't be successful if you're lying. That's what you said. I'd like to add half-truths, you know, same thing here. The performance over the past few years, especially in Automotive and ContiTech, I don't have to comment on that. Why are you praising Automotive? It's because you want to sell it, of course. You want to come across as a high-performing company. You know, if this is only lip service, I mean, you know, it's no longer credible.
Breaking up the technology group, you know, is an emergency measure. It's an emergency measure because ever since 2019, we've seen three reorganizations within the company in the Automotive sector. The only purpose of that, in other words, you know, the outcome of all of these restructuring exercises were null and void. There is another side of the truth to that, which you didn't talk about. Just take a look at the remuneration reports. Target achievement, calculation of the bonuses, it's a disaster. Automotive, 0% when it comes to the bonus. The benchmark was 100%. That's what you should have achieved. However, you achieved minus 180%. There was a shortfall of 180%. The benchmark is minus 182%. Now, that's an improvement because the year before, the figure was minus 160%. So 260% below what's standard or what is normal. ContiTech, 5%. Same thing here, Mr.
Nelles. But Mr. Nelles, you're the lucky one this year around because there was a mistake from the annual report to the remuneration report, and that's why you're getting a little more now. Now, Group EBIT, also a benchmark for the performance of the Executive Board, 65%. That's the figure that's stated. But the sub-results of the EBIT, so ContiTech, Automotive and Tires, here the consolidation was not at 2%, but at 12%. That was the figure that was used in order to make sure that the expected earnings were reduced, which allowed you to pay out a higher bonus. And this accounts for EUR 980,000 more by way of a bonus for the Executive Board members. When it comes to the sustainability targets in the last annual report, 2021, it was 19 pages. Now we're talking about 120 pages for the sustainability report. Ms. Reinhart, this is your responsibility.
Target achievement, 0%. You know, 100% more, that would be the standard. Here the figure is zero. Here are my questions. The low performance on the Executive Board was something the supervisor would tolerate for years. This is a striking example of mismanagement. You have witnessed this while you were all aware of it. Now, the breakup of the company that is being planned is the consequence of the fact that Automotive will be liberated from Mr. Setzer. Mr. Hirschheydt, I wish you the best of luck, you know, to be successful with your company. Talking about sustainability also includes the co-determination representatives. 50% is employee representatives on the Supervisory Board. 120 pages for the sustainability group, but not a single word on the role of the co-determination bodies. I have a question for the Deputy Chairwoman. Why is that the case?
Trade unions are entitled to being represented. You know, at Continental, the Deputy Chairperson of the Supervisory Board is the most powerful trade unionist in the world in office since 2018. Over that period, there were job cuts at Automotive, in Electronics and Metalworking, 9,000 jobs. This year, there is going to be six closures of locations, adding another 4,000 people to be let go. Ms. Benner, I take it that after eight years in office, you will not continue in that position. Here is my question. In 2024, what were the three most important initiatives that you launched to create more competitiveness at Continental, and was this successful? Yes or no? On the 23rd of October 2023, you were elected the Chairwoman of IG Metall Trade Union. You warned Continental of further job cuts.
In December, six weeks on, you approved the closure of Gifhorn and the reduction of 850 jobs. This does not really make any sense as far as I am concerned. How can this go together? On the one hand, accusing Continental for what they are doing whilst approving of the closure of a location just shortly thereafter. On the transport, or rather on the closure of the Gifhorn location, it was announced that a heat pump producer would take over the factory. What has come out of that? Because I have not heard anything along these lines. On the 26th of March 2024, the closure of Wetzlar and Schwalbach were announced. Two weeks thereafter. Sorry, two weeks after the last supervisory board meeting on the 30th of March 2024. This was just one week after the election of the employee representatives to the supervisory board.
When this was announced on the 26th of March, the Deputy Chairwoman of the Supervisory Board was not available because she was on an unofficial trip to Japan, 9,000 kilometers away. This is why she could not attend. This was no coincidence. I just cannot believe that. I would like to know, why is it that we saw this sequence of events, closure of Schwalbach and Wetzlar? Why was this announced so late? Because, you know, even when on the 13th of March, the Supervisory Board meeting took place, Rohde and Carbon, Aachen, Gifhorn, these were items on the agenda on the Supervisory Board meetings. These resolutions were published right after the Supervisory Board meetings. Regarding Schwalbach and Wetzlar, nothing was published after the meetings. Looking at the annual report 2023-2024, I could not find anything about that in there either.
I'd like to know, when was the Executive Board authorized to close these two locations? And why is it that, you know, there was no publication that this was ever discussed on the Supervisory Board? In Automotive, in 2025, Gifhorn and Schwalbach, 25 minutes. That's the trip. It's not that far apart from where you're located, Ms. Benner. Wetzlar is perhaps a one-hour drive. Where were you, Ms. Benner? And how often? Can I ask you, Ms. Benner? Did you go to these locations to think about, you know, to get a first-hand idea on the economic performance based on the Gemba Book approach from Japan, so that you would be well informed also when it comes to the discussions on the Supervisory Board? What were your proposals to keep these locations from being closed down?
At Automotive, in 2025, six locations will be closed: Obernhausen, Karbon, Schwalbach, Wetzlar, Kirsten Nürnberg, and Gifhorn, 4,000 people altogether. AUMOVIO, come Christmas, will only have 25,000 people in Germany. What is the target figure, staff target figure for AUMOVIO in the five-year plan? What is the target figure for employees in Germany at AUMOVIO? What is currently happening, ladies and gentlemen? What is currently being broken up has been built up ever since 1998 at Continental Automotive. EUR 18 billion, that is the amount that was spent on acquiring additional companies at Continental. It was EUR 3 billion. If you add capital service, interest rates, inflation, this amount that Continental has come up with is roughly EUR 40 billion based on today's purchasing power. Now, this is being spun off for zero. No sales proceeds for Continental AG. This is crazy, you know, ruining one's reputation this way.
Automotive used to be a world market leader for brakes, driver-assistance systems, LED displays from VDO, and airbags from Siemens. Can I ask you, what has happened to all of this? What's their ranking? How do they compare to the competitors? What will it look like at AUMOVIO five years down the road? I'm firmly convinced that the anchor shareholder has changed their strategy and picked up the plans by guiding them back from 2008. I believe that the reasons put forward for this breakup is that Mr. Schaeffler wants to gain, you know, some cash based on that. I'm asking you, Mr. Schaeffler, will you become a member of the AUMOVIO ContiTech supervisory board if these slices of the cake, you know, have no value any longer? Geisinger had to leave Schaeffler without any prior notice.
His search for Chinese investors was the reason that caused that. AUMOVIO, you know, this was a name presented by Mr. Hirschheydt. The new logo, you know, came with the Chinese symbols only. The Chinese market was defined as the most important market. Can I ask you, have Chinese investors already knocked upon your door? Are you already talking to them? You know, are you talking to Chinese suppliers as planned by Geisinger back then? In 2024, the valuation of the Automotive group sector was such that you would get one AUMOVIO share for one Automotive share. Now, this valuation has been cut by half. I am asking you, what were the reasons for this devaluation? At this point of time, when the economic situation of AUMOVIO is shown as being so rosy, let us look at the second truth.
Let's take a look at the business report. Gruel was down by 4%. Order entry in 2024 was below the sales, which went down by 4% anyway. Book to bill is below 100%. That is to say Automotive is shrinking. It is not only important to have the trust of the capital market. What is more important is the trust of customers in our products and in our employees, in our people. Investment went down 22% in 2024. Improvement of the result, or EBIT, to EUR 286 million. It actually went down to EUR 275 million by deleting investment, not by improving performance. Investment share went from 5.6% to below 5%. When Continental Automotive was strong, it was up 7%, actually 7.5%. Depreciations moved from 5.1% - 6%. What that means is that the Executive Board wants to make a return with old machines. With electronics, this will not work.
That you take your old stuff and get orders, squeeze orders out of your customers. Question, which investment rate is in AUMOVIO's five-year plan? In the presentation of the spinoff, only with Architecture Network Solutions, it was said that profits will be generated. My question, how does the result situation look like with Autonomous Mobility, Safety, and Motion, and UX? Now, personnel, previous speaker has referred to it. 60% of developers are based in low-cost countries nowadays. And the share of development costs and sales should have been reduced. Lots of people were released, but the share went up from 11.5% - 12.3%. Now, Mr. Hirschheydt, at some point of time, you or the entire Board of Management will have to do something. For six years, you've been doing it, and it's getting worse and worse.
Understand that your measures and your low-cost strategy have the contrary effect. The tremendous decline of personnel has a big problem. The highly qualified left Continental Automotive, and competitors were looking forward to it. Moving the people out and moving to low-cost countries means losing competence. It is a question at Continental Automotive, how high is the percentage of those technicians and engineers who have more than 10 years of experience and work in the same role in 2020, 2022, and 2024? How high is this share in the industry with our competitors on average? Mr. Hirschheydt, can you imagine that Automotive would be split up into further parts? For example, the Tessa project in UX to separate displays, would that be coming out of the draw again?
Could that be spun off or passive safety, for example, that could be moved together with the split of display part of ZF? The manager there knows ContitTech, and you could actually work with ZF's subsidiary in other parts. You could work together with ZF Brakes. Actually, two weaker groups could join forces. Question, do you plan to move individual projects with lower margins to competitors to create small parts in order to reduce bad business? Ladies and gentlemen, I would like to mention one impression I have. With breaking apart of Volkswagen Group, Continental Group, I see various ideas behind them. Apart from the personal motivation of Mr.
Schaeffler, we have the Chairman of the Supervisory Board who would no longer have a successor, and no one could give evidence of the fact that the group and conglomerate that he has created, that he would bring order into it to such an extent that the technology group would be moving forward. I actually see some problems with the three operational board members. If they say everything is split up, then all of the three board members can imagine that they will become CEOs and that they will earn double as much money and get double as much pensions.
Mr. Böhler, you know me as someone who is very lenient. You are almost at 19 minutes now.
With 20, I'll be at the end.
Okay, you get one more minute, says Professor Reitzle.
Company pensions and pensions of board members are not disclosed in the remuneration report.
I don't see what they get. My question, how high is the monthly company pension of the former CEOs, Manfred Wennemer, Elmar Degenhart, and Nikolai Setzer, once he retires per month? Now I come to my final statement. Mr. Schaeffler, what I would wish for is that you not only think of cash, even if I were to benefit from it, but long-term, I benefit from dividends and not from ups and downs of the share price. Also, please think of the company, the workforce, and please take your mother as a role model. I have the feeling, I mean, she was with the AGM the last time 2017 since Maria- Elisabeth Schaeffler has withdrawn. This company, Continental, is missing the entrepreneurial spirit shown by the owner. I wish for you to be courageous. Thank you for the attention, and thank you for the time given to me.
Thank you, Mr. Böhler, for your contribution. I would like to ask Ms. Angela Banfield -Fox to come here, and Mr. Torsten Wagner to be prepared to be the one but next speaker.
Good morning. Or it's almost afternoon. Good afternoon, everybody. My name is Angela Banfield- Fox. For 30 years, I've been working at Continental. I'm a former member of the Supervisory Board Automotive, and I was also a works councilor. I've been a works councilor for 20 years. I would briefly like to make a comment on the strategy, and I would actually like to make a statement and give a few comments. In Germany, there is a scarcity of expert labor. That's why it's not easy to understand, or not to understand at all, why Continental dismisses thousands of employees. Those are experts.
Those are colleagues with expert know-how in the areas of software, cybersecurity, and so forth. Those are my colleagues, colleagues who up until now have been successful in various projects, and now they are supposed to lose their jobs. Such employees, to release them in the whole of Germany is not a good strategy. We can only be successful. We can only be a leader when we have the right team on board, when we have the best fit. That is what Dr. Reinhart quite rightfully said. Once we have the best fit, can we be tremendously successful? Now, for shareholders with a heart and with a conscience, let me tell you, Continental left its employees out there. Alone, the current example is the Wetzlar site. For one and a half years, we have not been given any outlook in Wetzlar.
In January 2023, we were informed officially that our site was supposed to be closed. By the way, it is a site which has been in existence for almost 80 years. We were all supposed to be transferred to other sites in the Rhein-Main area. Of course, employees were worried and very concerned when it came to their future. Exactly one year later. Oh, I see, I made a mistake. I am sorry. I meant January 2024, because one year later, that would then be January 2025, we were informed that there will not be any transferrals. Apart from 18 people, all of us were supposed to be dismissed. That was shock and horror. The employees are suffering. This is a mental burden that everyone is feeling. The strategy to close Wetzlar and Schwalbach is completely wrong, fundamentally wrong. Julius Caesar said, I came, I saw, I conquered.
With Conti, it's different. Our CEO came and saw, and by and by takes apart a proud company. What I and many of my colleagues don't understand is why our CEO, our head of the Executive Board, goes this step with the spinoff and the sale of ContiTech just before the two of you will be leaving us. Conti goes back to its basics, so it will be back to tires. The gentleman that I mentioned, and I would include Mr. von Hirschheydt here, your decisions have such a negative impact on so many colleagues. We can hardly stop you in doing that, but we want your conscience to know of this for years to come. Coming from the Wetzlar side, I would say, we won't surrender, we won't move. You are supposed to treat us fairly, which means make an offer that is adequate.
We now have 2025, so an offer should be made to us, and it should not be an offer similar to the ones made in 2008. I would like to say thank you for your attention and for the opportunity to give my spontaneous speech. Thank you.
Thank you, Ms. Banfield- Fox, for your contribution. Now, I would like to ask Mr. Wagner to come here, and Mr. Karl-Otto Masche, please be prepared to be the one but next speaker.
Hello, everyone. My name is Thorsten Wagner. I not only have a few shares, I also work for Continental in Frankfurt. I see the spinoff for parts of the group very critical. A decisive factor for success in the next few years is stability, which is why I have a question to Mr. Schaeffler. Why a Schaeffler Group?
Would you want to be involved long-term in the future AUMOVIO? And if Mr. Schäeffler doesn't say anything on it, I'd like to ask the Executive Board, do you have information on a long-term investment of Schaeffler Group in AUMOVIO? Irrespective and independent of that answer, I will not agree to all of the resolutions from the agenda. Thank you very much for your attention.
Thank you, Mr. Wagner. Now, as the last speaker, I would like to ask Mr. Masche to come to the rostrum. We would then like to start answering the questions. I would like to ask the Board of Management, the Executive Board, to be prepared for answering the questions.
Right. Thank you, Mr. Reitzle, Mr. Schäeffler, Supervisory Board members, members of the Executive Board, shareholders. I would like to talk about efficiency, sustainability, and I'd like to side with the previous speakers.
I only have one question on tariffs from Donald, in particular when we talk about sites in Mexico and elsewhere. Are you using the know-how of external experts? That's it. Thank you so much.
Thank you so much, Mr. Masche. This brings us to giving answers to the questions. I would like to pass the floor to Mr. Setzer and the other members of the Executive Board to answer the questions that you gave to the Executive Board. Should further requests for the floor come up, I would like to ask you to go to the speaker's table and announce it. I would like to point out that I will close the general debate once all the questions have been answered. Mr. Setzer, over to you.
We'd like to get started with Mr. Retkowski. Now, one of the questions was following the impact of the U.S. tariffs.
Now, Continental, across all of its different divisions, has more than 50 sites and factories, development centers, and also white-collar offices in the U.S., three in Canada and 20 in Mexico. Mexico is the country from which we mostly import for the U.S. Half of the imports come from Mexico, 25% from Europe, the rest comes from the rest of the world region. The overwhelming majority of the products which are imported into the U.S. from Mexico fulfill the criteria of the U.S. Embassy A trade agreement. Now, imports from Canada and China to the U.S.A. do not constitute a significant order of magnitude. Imports of tires into the U.S.A. essentially come from European countries. Continental employs around 15,000 employees in the United States. Last year, Continental invested more than EUR 3 billion in the U.S. and plans to continue investing there.
Continental continually reviews its supply chain to adapt them to changing circumstances. Any mitigating measures, such as price adjustments, adjustments to supply chains and production facilities, are reviewed in detail. The situation is very dynamic, fast-changing, and at the current point in time, we're not able to give you a final statement on the impacts. As you can see, it's quite a complex topic. The next question from Mr. Retkowski. He asked about how heavily our competitors are impacted by the tariff policy. A number of our different competitors are also seeing differences. Please understand that we do not, as a rule, make any statements about our competitors. Just give me a second here, please. Mr. Retkowski asked about our sales figures in the United States, which I said already, but I'll repeat them again.
In fiscal 2024, 20% of our group sales were generated in the U.S. Automotive has four plants in the U.S. and six in Mexico. Half, very specific automotive, and half of the imports into the U.S.A. come from Mexico, 25% from Europe, and the rest of the world. Production, 50% of its sales for passenger cars and light commercial vehicles into the U.S. are for imports, mainly from Europe. As I said earlier on, the production of tires for trucks largely takes place in the United States. Mr. Retkowski asked what in future will happen to our main HQ. The group headquarters of Continental will continue to be at Continental Plaza Number One in Hanover. The headquarters of Automotive, with the overwhelming majority of its functions, will continue to be in Frankfurt. This will not have any impact on Hanover.
Following the spinoff on the separation of ContiTech, capacity utilization of the inadequate utilization will continue. We have more than 8,000 employees in Hanover, and all of them will fit into our HQ. Mr. Retkowksi, you asked about the specific cost and savings or additional income due to strategic realignment. What I can tell you is that costs in the context of the spinoff of Automotive are in the separation report on page 50 in detail, in conjunction with the organizational independence and IPO of the future Automotive Group external one-off costs for fiscal 2024 - 2026 will amount to around EUR 300 million. That is an estimate.
These contain external one-offs such as the organizational separation of the future Automotive Group, which can assist with expenses for the creation of independent structures for measures related to the operational separation, HR costs, rebranding measures, as well as other separation costs. Furthermore, the anticipated one-off charges of the IPO and spinoff, which will be for external consultants, most notably for investment banks, lawyers, and other consultants, and auditing costs in particular for our auditor in connection with the tangibles assessment and also the audit of the separation. They have a fast-changing market at the moment, and this requires focused, agile, and decisive action, as I said previously, which is we're positioning the three corporate divisions in such a way that they will be able to realize their full future value and growth potential. It's not about saving costs or efficiency boosting.
More details relating to the corporate strategy will be presented at our Capital Market Day presentation, which will take place in June. You asked, Mr. Retkowski, you asked about AUMOVIO. Philipp von Hirschheydt will be the CEO, as well as [Karen Durm], who is also here. He is the CFO. The rest of the board will be determined at a later point in time for the Supervisory Board of AUMOVIO. Stefan Buchner will be then for the job. He is here as well. The rest of the composition is currently being worked out. Mr. Retkowski asked about the strategic reasons behind the sale of ContiTech. Over the last 30 years, Continental has made targeted acquisitions to generate organic growth for three strong divisions in their respective sectors. These are now ready for independence.
The fast-changing markets today require focused, agile, and decisive action, which is why now is the right point in time to introduce the realignment of the biggest one in the company's history. We'll be creating three strong independent champions, which is independent companies will be able to exhaust their full growth and value potential as independent companies and company ContiTech will be able to fully focus on its core business, increase customer loyalty, and react with more agility to what will guarantee its main success. You also asked about the transactional structure for the independence of ContiTech in the current preparation phase. We'll be analyzing and evaluating the different forms of transactions for independence. From here, we will derive a time schedule for the implementation. We will look at the viability of the current transaction forms.
As things stand at the moment, a sale of ContiTech is considered to be the most likely option. ContiTech is a focused industrial player, is an attractive business with solid profits despite a challenging market environment. We assume that financial investors and also strategic buyers will have significant interest in it. Unlike with a sale, a spinoff would not generate any funds for Continental, which could be used to strengthen our balance sheets, for example, tires. In addition, a preparatory phase for a transaction on the capital market will probably take a lot longer, which is why we do not believe that a spinoff is the most likely option as things stand. Mr. Retkowski asked about the allocation of employees as part of the current measures.
2,500 employees in group functions in Germany, 1,515 employees will be transferred into the new companies to improve their independence. The transfer will take place through individual contracts. 434 employees will work in Tires, 244 at ContiTech, 507 in Automotive, and 270 in OASL. 258 will be assigned to the holding. Any exits have also been considered. There were no terminations as a result of this. The acceptance rate across all of the sectors is 96%. In conjunction with the strategic realignment, we have transferred employees following the separation of Automotive and the independence. There will not be any factory closures resulting from this or any headcount reduction measures. Mr. Retkowski asked about site closures in conjunction with the strategic realignments and the jobs that would be affected. None of the transactions are restructuring projects, but they are reorganizations, as I said previously.
Neither the spinoff of Automotive, nor the independence of ContiTech, nor a sale of OASL will lead to factory closures. The same applies to jobs. None of them will be terminated as a result of the realignment. Any announced restructuring projects will take place in parallel to the planned transaction. Site closures are necessary in order to put the different divisions on a stable economic footing. The planned closures are a response to the changing market situation, which in various customer sectors, Automotive, for example, or coal mining, are characterized by strong and persistent declines in demand. Ich sehe das nicht. Okay, then mach du, Olaf, bitte weiter. Mr. Retkowski, you asked about what would happen with the sale of ContiTech with the funds for the transactions. We will also ensure that the shareholders play a role. A special dividend will be paid.
I think this is all something which is clear. A lot of this is speculation at the moment. It's too early to speculate on this at the moment. You asked about the acceptance. The high acceptance rate in conjunction with the sectors will ensure that the reorganization overall will meet with a certain level of acceptance amongst our workforce. We know that any changes, particularly when it comes to such a larger transformation such as this, will lead to significant changes. Mr. Retkowski asked about any compliance violations in 2024 over the first few months of this year. The Head of Internal Audit and of the Compliance Report told the audit reports to the Audit Committee regularly on their work. This includes information about individual cases of compliance violations.
If there are any legal risks arising as a result of this, then you'll be able to read this under risk and opportunity report in our financial report. Okay, then I will continue with Mr. Retkowski as well. You wanted to know which ASM format we'd be choosing for the future. To begin with, we are delighted that this year we will be taking place. We are having this in person again. It's much nicer for us as well. We like to be able to speak to you directly. Now, the agenda and the resolutions about the approval of the spinoff and separation between Continental AG and Automotive Holding AG was key in our decision to hold this as an in-person event. Now, for the future, the same principle will apply. We'll use the flexibility granted to us by the laws governing shareholders' meetings.
For each meeting, we will decide what the best format is. When making this decision, the agenda will play a pivotal role. For our flexible planning, we consider various options for booking the Hannover Congress Centrum, which we're all familiar with. This is the way we've done this for years, and we believe that this is a very efficient method. Mr. Retkowkski asked about the employees with current measures. 2,500 in group functions in Germany, 1,515 were transferred to the different divisions to increase their independence. The transfer took place through individual contractual means. 434 were assigned to Tires, 244 employees to ContiTech, 507 to Automotive, and 272 to OASL. 258 employees were assigned to the holding. Retirement and premature attrition took place. There were no terminations necessary. The acceptance rate of the new jobs across all different sectors came in at 96%.
In connection with the strategic realignment, our employees would have been transferred across the group in conjunction with the spin-off of Automotive and the independence of ContiTech. There would be no factory closures or headcount reduction measures. Mr. Retkowksi asked about AUMOVIO in 2026 and whether it will be physical or digital. As you know, AUMOVIO's HQ will be in Frankfurt in the future. I think for everybody, it is important to have direct dialogue with our shareholders, which is why in 2026 we will have an in-person event, which will be in the Frankfurt region. Okay, I will continue with Mr. Retkowski's question. You also asked about the share price performance of Continental compared to the DAX over the last 10 years. I would now like to respond.
In recent years, we're characterized by the increasing speed of change in the sector and also the impact of COVID and its persistent consequences on supply chain. Now, while our profitability has received recognition on the capital market, the share price overall was impacted by Automotive, which had a diminishing effect. Now, if you look at the change of technology, the chip crisis, volumes were at a low level and we had high inflation. This had a negative impact on the share price, and we're not happy with this, of course. In the meantime, our capacity has been adapted, and the resilience of Automotive to meet these challenges has been increased significantly. Now we are also taking further measures in order to cut our fixed costs. Measures include more efficiency in R&D, reducing the number of locations and pooling of resources.
Also, in admin, we have managed to make significant savings, and we are asking our customers during the development phase to play a role in covering our costs. We have demonstrated, particularly over the last three years, that we have been—sorry, just let me go back—that we have been able on multiple occasions to successfully renegotiate prices. The positive effects of these measures have been reflected partially in our earnings for 2024. We—Philipp von Hirschheydt spoke about this—we've made a significant step towards improving profitability of Automotive. In 2025, we also assume that we'll make another step in this direction. This will positively impact our share price. You also had a question about compensation and antitrust cases. We'd like to refer to what it says in our financial report. Please understand that we are not able to comment on current court cases. Thank you very much.
Okay, I will take over. You asked about the reason for the stopping of tire production for agriculture. This was followed by an assessment of the market because agricultural tires over the past few years have changed significantly. As a result of this, the addressable market has shrunk significantly, and as a result, it no longer is compatible with the ambitions of Continental. Our business will be focused on commercial specialty tires. It will be for material handling, earth-moving systems, and also for ports. I will move on. Mr. Retkowski asked about autonomous driving and the impact that this will have on our share price. Now, the share price is impacted by a number of different internal and external factors. Internal factors include the company performance, strategic management decisions, and innovation.
ADAS is an example of a future technology which plays an important role but not a significant role. External factors include economic developments, geopolitical happenings, and also the general market sentiment. Ultimately, there's interplay between these factors, and this affects our share price. I've got another question from Mr. Retkowski. You were asked about the performance of Continental AG following the spinoff of Automotive and also ContiTech. If we have a look at our core regions, then you can see that we've got significant growth potential, most notably outside of Europe. We want to obtain this organically by investing in our capacity, particularly for ultra-high performance tires, but if necessary, also through targeted, well-considered inorganic investments in strong growth markets, APAC, and North America. We outlined our vision at the capital market day in December 2023. Nothing has changed here.
We continue to target an improved regional balance and expect the trend towards larger, higher performance tires and also the trend towards electrification to have a positive impact on our growth.
I think this leaves no question for Mr. Retkowski unanswered, so we will carry on with Ms. Jähne. Ms. Jähne from the DSW wrote the advantages for the shareholders by going back to tires alone. The new realignment of Continental in the pace of change of its customers and markets is an essential basis for its success and has been for over 150 years, which started with rubber products because the tire was invented a lot after that. There were no vehicles back then. Bicycles started at some stage in 1871, so it was coaches back then. Over time, three strong group sectors were shaped in their industries, which are now ready for independence.
Continental will become a focused global tire company with strong cash generation, high margin potential, and a solid balance sheet and a solid, strong dividend. Okay, I will continue, Ms. Jähne. You asked after the future dividend policy of the newly focused Continental AG. Continental AG will continue to get an attractive assessment. We're striving for this. The focus will be on dividend payments and reduction of net indebtedness. After the spinoff of Automotive, payout of 40%-60% of group profit is envisaged instead of 20%-40% as before. This, of course, to Continental shareholders. Ariane?
Yes, I've just received a question. Ms. Jähne asked about personal adjustments in Germany. Our answer is that against the background of personal change in the automotive industry, we're working to position the company in a future-proof way.
Our product and production landscape is going to be examined and aligned optimally for the future. In the long term, this is the basic prerequisite for our success and for the competitiveness of the entire company. We will continue to proceed in this process and always look at socially compatible solutions.
Ladies and gentlemen, our back office has a few problems today to provide the electronic answers. I hope you understand we will interrupt for a few minutes to ensure that the answering of the questions can be done smoothly. As I see, there are two further requests for the floor. Maybe we can use these, and I could now call up Mr. Janotta and ask him to the rostrum and Dieter Schwarz to stand ready because I hope that in the meantime we will be able to solve our problem. Mr. Janotta,
good afternoon, ladies and gentlemen.
From 1985 to 2019, I was part of the company in different functions. I was a spokesperson of the executive staff, briefly CEO for the company in Sweden. I would like to get back to what was said today by Professor Reitzle. You mentioned that there would be a restaffing, or was a restaffing in the Executive Board. Stefan Schultz is no longer a member of the Supervisory Board at times where there is such a lot of turbulence. Why was it not possible to keep him in the Supervisory Board? Why was it not possible to convince him to carry on in order to ensure that a factor of stability could be maintained for the company? Mr. Setzer said that the company's Automotive, Tires, and ContiTech were now well positioned.
Now, looking back, I must say in 2017 that was the case, but today we are quite a way away from that. The companies have been made more independent. How can I tell that as a shareholder? How can I see that they're actually more independent? If they are to act individually, how can I tell that they're going to actually deliver? When it comes to tires, it was said that there were lower sales but very successful performance, basically based on ultra-high performance and winter tires. How's that going to be when there are no more winters? What's the situation going to be like if in Germany too there will be a speed limit that ensures that certain tires won't be needed anymore?
In the area of Automotive, there was a large portfolio that was listed, and in the past few years, it was said time and time again that there were good agreements concluded. In the previous years too, there was the problem that good agreements were concluded, but there was little or no money left. What about the future? Is that going to improve? Are the deals that were mentioned really such that we will keep some of the money? It was also mentioned that for the Automotive spinoff, capital means could be used in a more targeted fashion. At the precise moment where you say you're using it in a more targeted fashion, this probably means that in the past, this was not the case. My question is, what about the future? What is going to be done differently?
If something is going to be done differently now, why did you not do things differently in the past? Looking at the report of 2024, I must say this was really very good work for the people who compiled this. The result of 2024 was to be better than the one in 2023, and this was really done. High praise for that. When it says raising the added value potential, how can a shareholder tell whether this is so or not? Because it is a nice buzzword, if you will, but what really is tangible in all this? Looking at CVC, first of all, the good news in 2024, there was once again a positive development after starting from 2019. In 2021, there was a zero, but in the other years, money was burnt more or less.
The hope is now that things are going to continue in a more positive vein. When looking at Automotive and look at the research and development costs with over EUR 2 billion, they are actually very high. What about the equipment of the Automotive spinoff? Is it going to be such that you cannot only survive for one year, but that you'll be able to survive in the longer term? Because if the orders do not generate new cash, where is the money going to come from? It would have to be injected by somebody. The new news that independent spinoff or sale is also or has been decided for ContiTech was something that surprised me because while the previous speakers said back to the roots, when I started in 1985, Conti, ContiTech, and Tires were in existence. I do not know of any Continental that was only Tires.
Of course, in the advertisements, the tire is advertised a lot more than some kind of tooth belt or something else because the customer price is simply different. Continental that only did tires did not exist. For me, as a shareholder, this decision does not become clear to me. It also does not become clear to me how this decision was arrived at. It was said that the Executive Board decided or resolved. Now, I have to say that some Executive Board members will only be part of the Executive Board for a very short time. Ms. Reinhart will leave the Executive Board. Mr. von Hirschheydt will presumably leave the Executive Board. Mr. Schick will leave. Over the course of the last few days, it was said that Mr. Setzer will also leave the Executive Board.
When it comes to the future of Continental, the decision was arrived at essentially by people who, when it came to the benefit or the pain of what was decided, they won't feel this at all. I was always taught it's quite a good thing if you're in office for long enough to feel the errors of your own decision, if there were to be any. Here, we have decisions that the lion's share of the executive board members will not feel for Christian Kurz. It looks as if, well, you've now got a good story. You will have to hire a lot of new engineers. You can spend more money because when looking at the investment costs and the research and development costs, the highly profitable tire industry was always markedly behind Automotive.
Looking at the percentages, you can say, well, Tires invested EUR 2.4 billion-EUR 2.5 billion for F and E, Automotive 11%-12%. I'm trying to look forward, and I'm wondering, what are you going to do with all the money that you're earning? There are no more cross-financings in any directions anymore. It was said that Continental AG or Conti Tires should not only be profitable, but really profitable. Despite all this, in 2024, we had quite a good result. Thank you very much for that. Looking forward, the Conti that I entered back then was a family-owned business. This family atmosphere no longer exists here, which is a shame. At the very moment where there is some kind of affiliation with a company, good performance is really the natural result.
My call to those who are going to carry on, please ensure that the mood is good, that people not only come here to earn money, but because they have a job and that have passion for that job, because then you'll also have good results really, really easily. Thank you.
Thank you, Mr. Janotta. Now the last speaker for the moment is Mr. Dieter Schwarz-Loos. Then we'll take a short break to hopefully solve our technical problems.
Good afternoon. I'm Mr. Schwarz-Loos. I'm authorized by the I have an authorization, and I have a text that I want to present here regarding item two on the agenda. If you were to vote against, you should vote against.
Mr. Schwarz-Loos, could you please press the microphones down so that one can hear you?
Okay. Right.
Item two, you should vote against if it isn't a share of company. [Foreign language] Eder Herr Klinger, [Translator] amongst all shareholders of Continental, will be put in the lottery. Regarding item three, approve of the actions of executive board. Please approve of this because Continental AG did all the essential things invited to an in-presence meeting, so it did everything well. Now, item three on the agenda. The executive board should be the action should be approved because Continental AG did everything right. Thank you.
Right. We're going to interrupt between 10 and 15 minutes and then come back for the answering of all the remaining questions. Thank you. [Foreign language] Meine Damen und Herren, wir setzen jetzt. [Translator] Ladies and gentlemen, let us continue today's annual shareholders meeting. We've received three more requests for the floor. I'd like to start by asking Mr.
Martin Landsiegel to go to the lectern, and Erwin Müller, please get ready. He'll be the next speaker, Mr. Landsiegel.
Thank you very much, Mr. Chairman, Executive Board, Supervisory Board, fellow shareholders. [Foreign language] Ich war jetzt mal ein bisschen verwundert, ob der langen Pause, aber ich denke, [Translator] I was a little surprised, you know, with this long break. Probably it's due to technical problems. I hope everything is back to normal. I've been listening this morning, and there were a number of discrepancies that I spotted between what you're hoping for in the context of the spin-off and what I've heard from your speech, Mr. Setzer, at the beginning of the ASM. Now, here is what I've noted down, and you know, there was also a lot of media coverage regarding Continental.
The primary objective of your spin-off is to restore the agility, flexibility, the strength, and the capacity to transform, and to restore the competitiveness of Automotive, but also of Tires and the other parts of the company. Against that backdrop, I was sort of surprised listening to your speech, Mr. Setzer, because you said that the group sectors are already quite autonomous and very strong on their own account. Mr. von Hirschheydt, when you spoke, you said that all of this is what AUMOVIO is capable of, but you've only got competencies and skills for Automotive that you listed. What AUMOVIO can do is something that Automotive can do already now. Mr. Setzer, you continued in your speech talking about sales and profit before the fiscal year ended, and you spoke about increasing sales and profit margins.
This made me wonder, because, you know, how was this possible without the spin-off? Given the current structure, how was it possible to achieve these kind of gains? I think it was Mr. Schick when he talked about, when he addressed item nine, the spin-off. You said that even today, the group sectors are largely autonomous, even today. Listening to that, I'm wondering why the group in its current structure, why wasn't it made more flexible in the past? Why didn't you allow for shorter decision-making processes within the existing group structure? Why didn't you try, under the umbrella of the current corporate structure, which gives you basically everything? Why didn't you do more in terms of diversification, you know, higher capital base for the three group sectors? Why didn't you try and do all these things under the existing structure?
Why is it that the envisaged changes and the changes that were implemented at the beginning of this year and at the end of last year, why did you not try and implement them at an earlier point in time? I think this would have put you in an even stronger position, even without the spin-off, and would have allowed you to generate the kind of results that were presented here today. I do not think that the individual parts of the company, you know, would have become more profitable without the spin-off. In my mind, the spin-off, well, I cannot quite understand why a spin-off should be the first solution that you would be going for. I think this is exaggerating things a little.
Basically, I'm wondering why didn't you try at an earlier point of time to fix things within the existing corporate structure using similar measures? There's one more thing I'd like to address, if I may. Ms. Reinhart told us that there was a fair share of acceptance regarding the realignment. Now, this certainly depends on where you look at the workforce. The part of the workforce that I'm familiar with, and I'm speaking in my capacity as a member of the workforce and as a shield of Continental, I cannot quite confirm what she said. This is not in line with the perception that I have. Because I'm aware of a number of projects, especially locations that are going to be affected by closures, I can't quite see this kind of acceptance.
I'm wondering, how have you established this acceptance, and what measures have you initiated to bring about greater acceptance for the envisaged measures amongst the workforce? Because ultimately, the group, without people subscribing to it, will be powerful and worth nothing. Thank you very much for your attention.
Thank you, Mr. Landsiegel. I'd like to ask Erwin Müller to go to the lectern, and I'd like to ask Helmut Hesse to get ready. For the time being, he's going to be the last speaker.
Fellow shareholders, you've already heard who I am. I'm a long-standing shareholder at Continental. Now, last night, a friend of mine came to see me, and he asked me what was going to happen today. The second question was whether I would take the floor. I said, of course, I'm not going to take the floor. I don't want to. Why should I?
What do you think? What has happened between last night and now? Why should I be standing here in front of you? What has happened? What prompted me to address you? After all, any answers on your part? Any guesses? All right. Let's do it that way. When the first gentleman spoke this morning, the performance of the company was referred to, the change in the value of the company. Now, I know what my shares look like. I know how many shares of Continental I have, and I know how they are performing. I can only, you know, see a devaluation of my shares. There is no such thing as an increase of the value. I have learned quite a lot of things today. I have learned something from insiders as to what is going on at Continental. Mr. von Hirschheydt, I think that's your name.
You explained what is going on in your area of responsibility, and you spoke about delivering things, etc., etc. It seems like you are not quite prepared to use German language, you know, to describe what you're talking about. You seem to be afraid of, you know, analyzing things in German. You are not delivering on your promises. Why is it that you are trying to embellish things as you are? Things will be spun off. Why is it that you want to get rid of these parts of the company if things hanky-dory? Now, I'm an engineer by trade. I'm a retired engineer, but, you know, I can read figures, and I used to be involved in the development department. I'm not a fool, and I just don't understand, you know, what I'm seeing. Where have I ended up?
In what kind of a world have I ended up? This is crazy. This is crazy, you know, coming here, and I'm not only a shareholder at Continental. I also have shares at other companies, you know, usually I travel to AGMs by car. In doing so, I've accumulated 550 km. When I came here, I was directed to the car park only to see that I'm going to have to foot the bill myself. This is unprecedented. I haven't seen that anywhere else. That's new. That's new. You know, if I want to eat something, usually, you know, you get served hot food. I was going to get a bun in the room next door. I was going to get a plate because I'm a cultivated person.
Seems like the company had run out of plates, and when I finally got hold of a plate, the food was gone. Are you so cash-strapped that this should be the case? If you are bankrupt, you know, why do you not own up to it? Tell us the truth. This is very, very sad indeed. This is not the end yet. You know, I am asking you, who built this company? Mr. Reitzle. Mr. Reitzle, is it not you that built this company? Is it not your brainchild? Please correct me if I am wrong. Is it not you who has come up with this idea originally? Or am I wrong? Yes or no? The conglomerate even existed for much, much longer prior to 2009, right? It had been in existence way before. You know, talking about Siemens VDO, you may remember that purchase.
This was not only in 2008 and 2009, but much earlier. VDO, can I ask you, have you launched VDO products on the market? Yes or no? Or has the company's activities been discontinued? I drive a premium car. It's not that all the display is broken, but it's not your display. It comes from an Italian maker. I'm wondering, and I'm asking you, whether, you know, there's any VDO products out there on the market still? What's your answer? Yes or no? Has this line of business been discontinued? What has happened to the companies that you're acquiring? Are you developing them further? Are you scrapping them? What's happening? I don't know. I have a technical background. I'm an engineer. I would like to receive a technical explanation. Probably this is the last of your shareholder meetings.
Of course, you could try and accommodate my interests, but you would have to be much more specific. Thank you very much for your attention.
We'll respond to your questions as we are doing with the other speakers as well. I'd now like to ask the last speaker, Helmut Hesse, please come to the lectern.
Ladies and gentlemen, I've only got one question. This question relates to the compensation of Continental shareholders for the disposal of ContiTech. What is the amount of the compensation that is planned for this purpose?
Thank you, Mr. Hesse, for your question. We will also respond to your question later on. Having said that, we'll move on to answering the other outstanding questions, questions that have not been answered so far. Mr. Setzer, over to you.
Right, let's continue with the questions by Ms. Jähne.
We'd started answering them, had to interrupt things because of technical problems. We'll continue now. Ms. Jähne from DSW asked about the outflow of high performers given the economic conditions in Germany, also with a view to the incoming coalition government. Currently, we are not seeing any increased fluctuation of high performers regarding the group functions in Germany. There is still a close cooperation between the social parties and the works councilors. There is an approval rate of 96% when it comes to internal transfers. In this country, it's important to improve the economic conditions, and this requires a competitive focus at a European level, which promotes innovation, which relieves companies of bureaucracy, and improves the competitiveness in the long term. Ms. Jähne, you also asked about potential competitive disadvantages when you compare Germany to the other countries. In Germany, we're struggling with specific challenges.
This includes high payroll and energy costs and a high share of bureaucracy, which is a significant burden for companies and impairs competitiveness. Ms. Jähne is also asking about more attractive locations other than Germany. Basically, we're following the strategy, you know, being there in the market for the markets. That's the approach I mentioned earlier. Continental is striving to be on-site, producing for the customers on-site, and to have the best possible supply chains in place. Ideally, we're established in the markets and regions where we're producing for our customers. Over and above that, Continental is also relying on their local development skills in their respective markets. Ms. Jähne also asked about the impacts of the tariff activities by the U.S. regarding Mexico. I think I responded to that question earlier on. With our U.S.
Approach and our locations there, I'd like to point out that the general situation is very dynamic still, and it will continue in the month of May as new tariffs are being announced. You know, this is all I can tell you about that, and there's nothing to add to my earlier answer. One more question for me. Ms. Jähne from DSW asked about the impact of the tariffs. Okay, I'd like to refer to the answer I gave you earlier. Over to you now.
Ms. Jähne, you asked about measures being initiated regarding damages in connection with the diesel scandal. On the 25th of April 2024, that was last year before last year's ASM, Continental put the finishing line under the proceedings initiated by the public prosecutor in Hanover.
The verdict is final, and as a matter of principle, we can say that if there's any indication of the breaches of duties by members of the Executive Board, the Supervisory Board is obliged to look into claims for damages. In this specific case, the company has reviewed the existence of claims for damages and is pursuing that as they should. In the meeting on the 19th of September 2024, the Supervisory Board looked at the results of the investigation in the context of an external analysis regarding the role of Continental when it comes to the manipulation of emission threshold values by certain carmakers. Now, apart from that, please bear with us that we cannot comment on further details as far as this is concerned. Thank you very much.
Ms.
Jähne is asking about the future direction of our ESG strategy and the disadvantages to be expected from the U.S. I'd like to answer as follows. Sustainability is a key part of our strategy. Our sustainability ambitions are closely connected with the industry's business models and the economic environment and are determined by that. As a global company, diversity and inclusion strengthen our innovative capacity and make us successful. Our measures to promote diversity and inclusion are in line with the legal requirements in the respective countries where we're active. Our fundamental objectives and values regarding diversity and equal opportunities, nothing has changed. We stand by them. We go by the principle of best fit. If legal changes need to be made, we do so without questioning our fundamental targets and values, especially regarding equality of opportunities. In the U.S., there are various regulatory trends these days.
For companies, there are disadvantages because the regulatory environment is increasingly characterized by complexity, fragmentation, and inconsistencies.
Ms. Jähne, you asked about the current status of the brake question at BMW. Together with BMW experts, various measures were launched. They include effective hardware and software measures and production process optimizations. This means that vehicles with brakes can be supplied at the technical standard without any further measures required. We form provisions in the medium double-digit million EUR area, and we assume that this will be good enough for the payment of potential damages. We firmly believe in the potential of the MKC2 brake system. There are other manufacturers that share our opinion. In the fiscal year 2024 and in the first few months of the year 2025, we've registered a number of incoming orders even after the product recall became known.
The group's declaration agreement believes that the risks and opportunities of the two companies are based on the business, and this is why the recall-related risks of the MKC2 were mapped to the Automotive company. Automotive will come with a solid liquidity base and funding structure, and in the last fiscal year, provided evidence that also thanks to the successful transformation, a positive cash flow can be generated. This means that we've ensured that Automotive can compensate for potential and absorb potential risks related to this recall. Please bear with us that over and beyond that, we cannot comment on your question, but believe us that we've come to terms with things and we will keep investigating these matters.
I'd like to conclude with Ms. Jähne's last questions. Ms. Jähne, you're asking about the changes and the background to the changes of the Article of Association.
According to Section 121, Paragraph 5, the German Stock Corporation Act, the ASM has to take place at the headquarters of the company or where the company is traded. Currently, our Article of Association does not contain any provisions on the location of the ASM, which is why we have more flexibility regarding the location of the ASM. In addition to the provisions so far, we can also have the ASM in cities larger than 150,000 inhabitants, and this is beneficial in terms of infrastructure concerns. At the same time, we want to make sure that the requirements regarding the virtual ASM do not apply. For the future, it is true that we will use the flexibility that is allowed for by the Stock Corporation Act. Before every ASM, we will decide on the best possible format, and this will also be dictated by the agenda in question.
We are using various options when it comes to booking the Hannover Congress Centrum, which is, as we believe, the most efficient methodology. Ms. Jähne, you also asked about the company headquarters, and I can tell you that the headquarters of Continental will continue to be at Continental Plaza One in Hanover, which is a very beautiful building after all. Even after the spinoff and the separation with ContiTech, we can still guarantee a sufficient utilization of the premises. In Hanover, you know, we have a lot of members of staff after all. Any more responses to Ms. Jähne? If that's not the case, I'd like to continue with Mr. Böhler. Mr. Böhler, you asked about whether it would be possible to spin off further parts of the company or to sell them. We'd like to answer as follows. No plan so far to do something along these lines.
We're focusing on the successful implementation of the spinoff and our—sorry for using the English term—but assuming that that's the right term, and we're a global company. Lead, transform, deliver, that's our strategy. As a matter of principle, Continental Automotive does active portfolio management. Depending on the market dynamics, a review of the ownership procedures can lead to the decision to improve a product category, to close down a category, or to set it. Here, criteria would be the technological focus and system expertise, amongst others. Let's continue with Mr. Böhler. You're asking about the allocation ratio of shares, and we'd like to respond as follows. The explanations can be found on page 52 of the spinoff report, which was published on our website, and I'd also like to refer to my earlier answers.
The amount of the future share capital of Continental Automotive SE will have to be appropriate to the share capital and expected market cap of Continental Automotive. Also, it is to reflect the relative shares of the entities involved and keep fractional shares as low as possible. Also, the future share price of Automotive will have to be in an attractive range for the shareholders. The allocation ratio is thus not transferable to a valuation. In 2024, there was no independent valuation of Automotive within Continental. Mr. Böhler, here's a number of answers for you. You're planning whether we are transferring and passing on products to competitors. Automotive does active portfolio management at all times. Depending on the market dynamics, a review of the best possible ownership structures can lead to the decision to improve a product category, to close it, or to sell it.
What would be the criteria? Value creation, the growth potential, the technological focus, and our system expertise. Mr. Böhler is also asking about the profitability of our automotive activities. Let me give you an overview of the key factors here. Architecture and network solutions in 2024, especially because of positive effects, pricing effects, and an improved customer mix, and positive effects from new injections managed to grow, and this had a positive impact on the bottom line. Also, the clear reduction of external research and development services to utilization of existing capacities has a positive impact on the profitability. As regards to the profitability, autonomous mobility, our second business area, by consistently implementing measures to cut fixed costs and by conducting R&E savings to achieve significant improvements.
Safety and Motion, the third business area, was characterized by clear volume reductions, which came as a consequence of a weaker market environment, which led to negative effects or resulted from negative effects from the customer mix, reflecting a weaker market development. User Experience in the business year ended registered declining sales, which were primarily attributable to the exit of traditional technological solutions, which also had an impact on the profitability. Nonetheless, User Experience still has a very strong and competitive product portfolio and a very good order backlog situation. We've invested a lot in order to make sure that we can roll things out at the industrial level. I come to Mr. Böhler's question about the number of technicians in the Automotive sector who have more than 10 years of experience in the same role and a comparison with competitors of the industry.
In 2024, about 23% of the employees in the areas just mentioned in Automotive had more than 10 years of length of stay in the current company. Reliable comparative figures of competitors are usually not published. Therefore, we do not know them. Mr. Böhler asked about the separation of UX, user experience, and as to whether that is going to be included again. At the moment, as we said today, our full attention is on the successful spinoff of Automotive. After a successful spinoff of Automotive, we will take a look at the business area of UX and then decide how we will proceed. Mr. Böhler asked various questions on the R&D share in Automotive. Our answer is this: Automotive develops highly complex innovative systems. It is specifically the transformation towards the software-defined vehicle that requires the development of new products and platforms.
This challenge leads to adequate work in research and development. Thus, we created a good basis for the future, for example, with high-performance computers with zone control units in Architecture Network Solutions. With this, we can now create and use the basis broadly and reduce costs adequately. Also, we have an intensive program to increase efficiency in the development area, among others, for processes and methods. Through these efficiency measures, we will move R&D rate till 2027 to a level of below 10% of turnover. Mr. Böhler asks about the investment rate in the five-year plan of AUMOVIO. We would like to ask you for a bit of patience. On the 24th of June, we have a Capital Markets Day in Frankfurt, and there we will give further information on investment and on other key items of the new group. Mr.
Böhler asks about the ranking of the former best-loved areas compared to competitors. Continental Automotive is still a leading company in the product area, as mentioned. With about 80% of our sales, we are represented in market position one, two, or three. In the international comparison with our competitors, we see us in a very good position, for example, with display solutions of the business area User Experience or with radars of Autonomous Mobility. Furthermore, access solutions can be mentioned from Architecture Network Solutions or our airbag solutions from Safety and Motion. Mr. Böhler asks about the target for the amount of personnel in AUMOVIO in the five-year plan and what is the target for employment in Germany. Our answer is as follows. First of all, let me correct one point from your explanation.
The production in Babenhausen and the site in Gifhorn will not be closed by the end of 2025, only in the years afterwards. The currently 650 employees from Schwalbach are supposed to be moving to the Frankfurt site from Schwalbach, and they're not going to be terminated. Currently, in Germany, we have about 20,000 employees. It is not correct that at Christmas we will only have 15,000 employees. Now, on to your question. An assumption or a statement on the amount of personnel in five years' time would be merely speculative. It will be decisive for the number of employees, the entrepreneurial decisions that we will take depending on the market situation.
With a view to the deep changes in the worldwide markets, and in particular in our automotive industry, we have to be highly flexible in our decisions in order to be successful in our various markets in a sustainable fashion.
I will take over. Mr. Böhler asks for the monthly company pension of Manfred Wennemar, Elmar Degenhart, and the pension of the current CEO, Mr. Setzer. Mr. Setzer does not get pension because he is still our CEO and he is active, so therefore we cannot make any statement. Pension payments to Dr. Degerhardt can be seen on page 16 of the remuneration report on 2024 and are EUR 657,000 annually. Mr. Wennemar has not been a CEO for 10 years. On his pension payments, according to legal stipulations, we do not make any statements. Mr.
Böhler asks for the reason that when the Supervisory Board has talked about the closure of the Schwalbach site and Wetzlar, that there is no information in the annual report. This is due to the fact that there was no decision required by the Supervisory Board on these measures. In the context of the potential closure, we are looking for potential new employment for the employees. We are talking to other companies so that we avoid unemployment and no outlook, and we want to strengthen Germany as an industrial location because of these activities. The initiatives of IG Metall have also been coming into the future collective bargaining agreement of Automotive. One important point, the person of Ms. Benner, we would like to point out that Ms. Benner, against the statements that Mr. Böhler made, participated in all of the meetings of the Supervisory Board.
Thank you, Ariane.
I have one question or one answer, rather, for Mr. Böhler. Mr. Böhler asked, a heat pump manufacturer will take over the factory in Gifhorn. What happened out of that? The answer, Stiebel Eltron, that's the manufacturer, plans to set up a stainless steel storage production for heat pump systems. About 70 jobs are to be created to 28. When the heat pump market recovers, a build-up of more than 300 jobs is being planned. Those were all the answers to the questions of Mr. Böhler. Next would be Angela Banfield-Fox. I have an answer to the question why individual members of the Executive Board have decided upon the spinoff shortly before they leave the company. Independent of personal development, the entire Executive Board of Continental has decided to make Continental independent.
We know our business and see it every single day and know how dynamic the environment is. As the Board of Continental AG, we have contributed to forming three independent group sectors that will open up their full potential. It is our responsibility to act farsighted and irrespective of our position only in the interest of Continental, come up with the best decision for Continental and for the various group sectors. I believe there is no further question open for Ms. Banfield-Fox. The next would be Thorsten Wagner, and he asks the Executive Board as to whether there is information on a long-term commitment for Schaeffler Group in AUMOVIO. As Executive Board, we can say that we have no information for that IHO after spinoff would not be invested in AUMOVIO. I think there are no further questions or answers. Let us continue with Karl- Otto Masche.
I think, Olaf, that's you.
Yes, Mr. Masche, you asked whether in the context of American tariffs we are also using the expert know-how of external advisors. We have heard today that this is a very complex and volatile issue, tariffs and the dynamism we see at the moment. We are a globally active company. We have to be prepared as best as possible, and we also use expert know-how from external advisors.
Thank you. I think there are no further questions or answers for Mr. Masche. There are no pending questions. We come to Gerd Janotta. Gerd Janotta asked a question on the independence of Automotive, Tires, and ContiTech. Our answer, the independence of the business units is implemented consistently in all relevant areas by separating IT systems, contract sites, and the transfer of the group functions.
What happens today at group level will then happen at the sector level. The successful spinoff of Automotive, the independence will be concluded, and the same would be true for the potential sale of OESL and ContiTech. Now I hand over.
Mr. Janotta, you asked for our value potential. Continental has the target with all the activities to create growth and create value for the shareholders, for our customers, and for the societal environment that we're active in. Our strategy plan includes short-term measures to increase performance and clear mid- and long-term targets to create competitive independent units that can react in an agile and flexible fashion on changing market conditions. Thus, we see to it that the full market potential can be opened up.
Mr. Janotta, you asked for concrete personnel changes. Please bear with us. We can't talk about individual employees and former employees of Continental.
Mr. Janotta, you asked on R&D costs of Automotive, and I can give you the following answer. We see our R&D investment as necessary investment in order to finance future technologies and innovation. Still, we increase our efficiency in R&D, and we do so on a continuous basis. Our clear target is the long-term existence of Continental Automotive or AUMOVIO, and we are planning our capital allocation accordingly. The money from the spinoff is supposed to be used and further strengthened by ongoing business activities. You asked whether in the future money would be left over in Automotive. I think the results in 2024 show a clear tendency towards a positive direction. For example, an increased adjusted EBIT quarter by quarter, we see a positive cash contribution for 2024.
The sustainable improvement is supported by cost reduction on the supplier side and the far-reaching measures in making leaner procedures and structures. We are optimizing the entire value chain in a long-term view, and we're very confident that Automotive in the future will be able to finance itself sustainably in the long run.
I have a question. There was the question on ultra-high performance tires and the development of these tires in Germany with a view to the potential effects on milder winters and also as regards the potential speed limits in Germany. I would like to answer as follows. Generally speaking, ultra-high performance tires, that's all tires with 18 inches and more, are meaningful for all seasons, for winter tires, summer tires, and all-season tires.
Thus, the possibility of mild winters should not have influenced the sales of ultra-high performance tires, benefits from the trend to bigger cars, and also e-mobility. Therefore, we are confident that our successful growth in this particular sector will be expanded. As regards the regulation potential adaptation, of course, we observe it diligently. Germany is an important market. However, we also see growth potential in the UHP area outside of Germany generally. It is true that we continue developing our products, and thus we are anticipating worldwide trends and challenges. You had a question for the targeted use of capital and what would be done differently in the future. We have described the environment and the challenges of the automotive industry and why we have a more focused approach. That is also the answer here.
For this reason, independence will strengthen Automotive and will strengthen us to have more targeted investment in the future. Right, I think we have answered all the questions of Mr. Janotta. This brings us to Mr. Lanziegel. Mr. Lanziegel asks why the measures at Automotive so far have not been started earlier. In the past, we have always checked our strategy and portfolio and structure, and we transformed it accordingly. The target is always to open up the full growth potential of Continental. The fundamental changes like the lack of growth in the car markets, global insecurities, new regulations, and many more things require more extensive measures than before. With the spinoff of parts of Continental, we will therefore align the parts of the company for the future. Mr. Lanziegel is also asking how growing sales can be realized without the spinoff.
Of course, hypothetical questions cannot be given an answer, but what is clear, highly dynamic markets at the moment require focused, agile, and decisive action, which is why this is the right point of time for this realignment, which we are talking about now. Focused, clear companies can be quicker in decisions, can be more flexible and faster than other companies. That is why we are doing it, and that is why we are suggesting it. Mr. Lanziegel is talking about a comment of Mr. Schick that the group sectors are more or less independent now. Why have not we started this changeover earlier? As I said before, independence, in particular because of the current economic requirements, we intensively moved it forward. This took time since it is very complex processes, and we are now prepared to go the next step. Ariane, I think Ariane, you might have a question by Mr. Lanziegel.
Yes, Mr. Lanziegel asks, are the acceptance of employees for current measures derived? I do not want measures are taken in order to make sure that there is acceptance amongst the workforce. For the group functions, because of the rate of approval of 96% in transferrals, when we split up the group functions and people changed companies, we see a good level of acceptance. All company areas have done activities to increase the level of acceptance, for example, welcome events for those people who have changed.
Right, that was the last question by Mr. Lanziegel. Now we want to come to Erwin Müller, and I am starting. Mr. Müller, that is how we handle acquisitions and as to whether in the course of the current procedure we are planning to get rid of something. Organic growth is an important pillar of our portfolio management.
We are continuously observing the market, competitors, and technology development. Each decision to cooperate with someone is the result of an intensive analysis and has a long-term view. This is why we are not planning just because of the spinoff to get rid of certain areas or to seize certain activities. Olaf, would you like to continue?
Yes, there is a question by Mr. Müller. You have brought together a couple of different issues. You asked about parking ticket, the dinner or lunch, and financial ability of Conti. Actually, Continental has increased its result in the last fiscal year and has a very robust situation. It is a very robust situation. Our shareholders get lots of food. We offer rolls and various drinks, and the interest in food and drinks was declining during the last AGMs. Of course,h we economize when we spend our funds.
Of course, that's well worth an applause, says Mr. Setzer. Helps the dividend next year. I have a question by Mr. Müller. He asks why we paint a shiny picture and want to get rid of parts of Continental. Apparently, our very clear statement, we do not want to get rid of things. As shown, we are convinced that the independence of the individual units is by far the best solution to generate growth and value for shareholders, for employees, and customers. For AUMOVIO, each shareholder gets a share of AUMOVIO and can stay with them. That's something which we will be showing ourselves. Do we have another question? Philip, please, over to you.
Mr. Müller was asking whether VDO products, whether there is anything still on the market. Our answer is this on this question on products of VDO.
Products on the basis of the VDO brand you find today in the user experience area, for example, as digital displays. Furthermore, the VDO brand still has a broad portfolio in spare parts and the parts business. Our fleet customers, we offer VDO solutions for fleet management, tachographs. They see VDO, you see VDO as a firm part of our portfolio. Right, those were all of the questions from Mr. Müller. Now we have the last open ones. That is for Mr. Hesse, Olaf.
Yes, Mr. Hesse, you asked for the use of the revenue when we sell ContiTech. I basically answered this before. Just briefly, in general, with potential revenue from the transaction, apart from the capital structure of Continental AG, we will also take a look at having the shareholders participating, be it through special dividends or share buybacks.
Again, speculation on the appropriation of the profits is much too early today.
If I see it correctly, the board has answered all the questions directed at them, and we come to the questions that were given to the Supervisory Board, and that I will take over. First of all, Mr. Retkowski, you are asking for the number of shareholders in the last 2024 AGM and on the virtual AGMs, 2022 and 2023. Mr. Retkowski is asking about how many people were tuned in from abroad and how many people made statements. I can give you the following numbers. On the 2024 AGM in attendance, 381 shareholders were present or the representatives of these shareholders. 1,406 shareholders were represented by proxies. Moreover, the live stream in the investor portal was watched 190 times, and the public streams on the website of Continental had more than 4,000 hits.
Today, 409 shareholders are present on the virtual AGM 2023. We had 111 people joining us. 1,616 shareholders were represented by proxies. The virtual AGM 2022, we had captured no numbers on people coming in because they were done according to the rules of COVID-19 legislation and specific counting as to whether shareholders registered from Germany or abroad. Mr. Retkowski, unfortunately, we don't have. I come to a question by Ms. Inayena, a question on the changes in the executive board. The foreseeable changes in the board of management, we can say the following: Finance CFO Olaf Schick will leave the board as announced in December 2024, as per 30 September 2025, and thus as planned after the spinoff happened. As announced today, the Supervisory Board this morning nominated Roland Welzbacher, effective 1 August 2025, to become the new CFO. Mr.
Welzbacher has been in the company for 22 years and currently heads financing and controlling in the Tires sector. Before, Mr. Welzbacher was in various positions in Tires in Germany and abroad. He knows the operational business. Thus, Mr. Welzbacher has a lot of knowledge in accounting, controlling, and finance, and he has far-reaching knowledge of the industry. Nikolai Setzer, as the CEO of Continental AG, will be active till 31 March 2029. Thus, he will accompany the realignment of Continental for all of our stakeholders as CEO and move them forward. Christian Kötz, at the moment, is member of the Board responsible for the group sector Tires. The future Continental AG will focus on Tires. Therefore, in the changed Continental AG, Christian Kötz should be responsible for that, and his mandate is up till April 2027. Dr.
Ariane Reinhart, Board Member for HR and Sustainability and Labor Director, steps down as per 30 June 2025. As already announced, Ulrike Hintze was appointed as per 1 July 2025 as Labor Director and responsible for HR. The HR area in Tires will also be done by her. Nikolai Setzer will take over from Ariane Reinhart the area of responsibility of sustainability, in addition to his responsibility for IT and communication. Philipp von Hirschheydt, with the spinoff, he will move out of the Executive Board of Continental AG and will lead the independent Automotive group, that's AUMOVIO, as the CEO. Mr. Müller asks for the potential setup of the conglomerate through me. I have already given a spontaneous answer. I have been the Chairman of the Supervisory Board since 2009. At this point of time, the major acquisitions had happened.
Acquisition of Siemens VDO, which was the biggest area by far, that was bought in order to build up the automotive business. That had happened in 2007, and TIMIC was bought from Daimler Chrysler in 2001. The structure has been up and running for quite some time. Continental, in the last 30 years, through targeted acquisitions and own growth, set up three very strong growth sectors in their various industries. As Mr. Setzer has said, these are now ready for independence. As I said before, there is hardly any conglomerate that is not evaluated with a massive decrease. Mr. Müller asks whether Mr. Schaeffler will be staying with AUMOVIO and will stay in the supervisory board. I already gave some information. Only Mr. Stefan Buchner is envisaged for the chairmanship of the supervisory board in the automotive group. The future members are not finalized yet.
The Supervisory Board of the Automotive group will be started when the spinoff happens, but we do have a couple of months' time to do so. Independence of ContiTech was just decided upon on the 8th of April by the Executive Board, and it was mentioned it's being prepared. Therefore, we do not have any details yet. Mr. Böhler asks Mr. Schäeffler as to whether there are any potential talks about sales to Chinese investors as regards the 46% that IHO holds. Mr. Böhler, you know that is not a question that goes to Mr. Schäeffler as an investor or member of the Supervisory Board, and thus it cannot be part and parcel of the discussions of the AGM of Continental AG. Now on the comment by Mr.
Retkowksi on the role of the Supervisory Board when it comes to the decisions of independence of group sectors, I would like to say the following. First of all, in the Supervisory Board, there is very often a controversial discussion, but also a constructive discussion to the benefit of all of the stakeholders. Second, the spinoff of Automotive was confirmed and supported by all of the members of the Supervisory Board. Third, as regards the independence of ContiTech decided upon by the Executive Board, there was no decision taken yet by the Supervisory Board. This has to happen. So far, the Supervisory Board has only been informed about the decision of the Executive Board and the ongoing preparatory measures. Here, in the Supervisory Board, there were intensive discussions, and we have to be very clear. There was also an intensive discussion and partly also controversial. That's quite normal.
This kind of discussion we will continue as regards ContiTech up until such a time decisions have to be taken in the Supervisory Board. Mr. Böhler, you asked some more personal questions to Supervisory Board members, Georg Schäeffler and Christiane Benner. We'd like to ask you to understand that in the AGM, only the Executive Board needs to give you information. I, as the Chairman of the Supervisory Board, after the Executive Board has admitted, can talk for the entire body, the Supervisory Board, and nothing else. Questions to individual Supervisory Board members are not answered. With Ms. Benner, I would actually like to make an exception now because you have asked such rather critical questions. To be very clear to you, for Gifhorn, what you addressed, there has not been a decision of closure as long as there were no alternatives for the employees.
I can also tell you, and it has been mentioned, the alternatives are Stable Electron, but also cooperation with other companies. Therefore, I myself can tell you from my own experience, the works councillors, and in particular the IG Metall union represented by Ms. Benner, have done a lot and have been very active and have intensively worked so that all of the employees can find a new job. As regards the Schäeffler family, I can tell you that I know I've known this company for more than 40 years. As you know, for more than 15 years, this family has been by far the biggest shareholder in our company in Continental. I can tell you, I hardly know any other family that also in difficult times with strongly declining share price has been so loyal, standing by a company like the Schäeffler company.
I say this with firm conviction. Schäeffler, the Schäeffler family is the treasure to this company. I think I have now answered all of the questions. No, you can never be 100% sure, but I do not believe I see any further requests for the floor. My final question. The audience, are there any further requests for the floor? This does not appear to be the case. On that note, I would like to say thank you very much to all of the shareholders who asked the questions, and I would like to ask again, are all of the questions in your view, have all of the questions now been answered? This appears to be the case. Therefore, I ask it be put down in the minutes that all of the questions have been answered, and I now close the general debate for today's agenda.
This brings us to the voting process about the proposed resolutions for items 2 to 14, which I would now like to put to vote. There should be a sound. If not, then I will make one. Please note that as of now, it is no longer possible to authorize company proxies at the annual shareholders meeting or the investor portal. In accordance with section 20, paragraph 1 of the articles of incorporation, each share guarantees one vote. The resolutions on agenda items 2 to 7 and 10 to 14 each require a simple majority of the votes cast. Resolutions on agenda items 8 and 9, which are the approval of the merger of Continental Automotive GmbH and the spinoff of Automotive and Contracts Manufacturing, also require a majority of at least three quarters of the share capital represented here with the vote.
With regard to the exercise of voting rights on items 3 and 4 of the agenda, which include appropriate ratification of the Executive Board and Supervisory Board actions of fiscal 2024, I would like to point out for the sake of good order that current and former members of the Executive Board and Supervisory Board are each subject to a voting prohibition in accordance with section 136 of the German Stock Corporation Act when passing resolutions on the ratification of their own actions. The members of the Executive Board and Supervisory Board have been made aware of this explicitly and specifically. The shareholders IHO GmbH and IHO Verwaltungs GmbH have announced that they will not be participating in the vote on the ratification of the actions of the Supervisory Board members, Georg F. W.
Schäeffler and Klaus Rosenfeld, as a precautionary measure to avoid any discussions relating to possible voting prohibition. The shareholdings registered by the two aforementioned companies will therefore be excluded from the voting on the form of the approval of the ratification of the actions of the aforementioned Supervisory Board members. Ladies and gentlemen, I'd like to explicitly point out once again that the vote will take place using the subtraction method. This involves determining the number of yes votes for each proposed resolution by subtracting the no votes from the number of abstentions. This means that all shareholders and shareholder representatives present who are in the attendance area and do not take any action will vote for the management's proposed resolutions. Their votes will thus be counted for all of the different proposed resolutions as yes votes.
However, if you wish to vote against or abstain from voting on one, several, or all items on the agenda, these votes or abstentions will be recorded using tablets. Please remain in your seats and indicate to one of our voting assistants by means of a show of hands that you wish to cast a vote or declare an abstention. Our voting assistants will then come to your seats. Please have your admission ticket ready because the code that you have on your admission ticket will first be scanned to ensure your legitimacy. The items on the agenda will then appear on the tablet with the respective proposed resolutions that have been called for votes. Please check the vote display carefully and confirm it, or if necessary, change it again before confirming.
Once you have confirmed, you will receive a message on your tablet that your vote has been successfully recorded. Please note that once a vote has been confirmed, it can no longer be changed. For the minutes, I would like to point out that the votes cast by proxies authorized by you for the company or by banks or shareholders' associations by means of a virtual voting card are already stored in advance in the system in a voting instruction list. The votes themselves are cast by releasing this voting instruction list by the respective proxies, present representatives of the banks or shareholders' associations. Postal votes are also recorded in the system in advance. However, they are only taken into account when the votes are counted, provided they have not been revoked.
In order to ensure a consistent presence during the vote, I would ask you not to leave the attendance area during the process of voting. As I stated earlier, voting by tablet will only take place here in the hall and not in the walkways. I therefore once again ask that shareholders who were there currently or in other areas of the building and would now like to cast a vote or abstention to come into the hall now. Are there any questions about this procedure? That does not appear to be the case. I now put the administrative proposals on agenda items two to 14 to vote as published in the Federal Gazette. The voting assistants will now go to the shareholders and proxies who have gathered here in the hall to cast one or more no votes or abstentions and will identify themselves by a show of hands.
The voting process is now open. [Foreign language] Meine Damen und Herren, darf ich fragen? [Translator] Ladies and gentlemen, may I just ask whether all shareholders and shareholder representatives have now had the opportunity to cast their no votes or abstentions? At the front, okay. [Foreign language] Wenn ich das richtig sehe, hatten nun alle Aktionäre... [Translator] It would appease me that all shareholders and shareholder representatives have had the opportunities to cast either their no votes or abstentions. Is this correct? Otherwise, please raise your hands. I do not see any raised hands. I therefore close the votes. The count will take around 15 minutes. We will thus continue in exactly 15 minutes. Thank you very much.
In the future, this truck will not need a driver. It will truly be autonomous.
Today, our cars are equipped with advanced driver assistance systems that help us park, stay in lane on the freeway, or brake in emergencies, for example. Systems like these enhance safety and are made possible by a variety of sensors that monitor the vehicle's surroundings. When you think of these sensors, you're probably imagining loads of cameras. Continental does not just rely on the car's eyes. It also uses radar and ultrasonic sensors. These utilize electromagnetic signals and waves to measure speed and distance, much like how bats use echoes for navigation. The laser sensors work in a similar way, using light pulses. The information collected by all of the sensors is sent to central control units, the brain, where it's processed to implement driving functions. Together with its partner, Aurora, Continental is developing the autonomous trucking system of the future. Why?
Demand for freight transportation is growing all the time. First, autonomous trucks reduce costs and delivery times for trucking companies and fleet operators. Second, they help solve the shortage of skilled workers, especially drivers. Third, they're good for the environment since they reduce fuel consumption. The project is currently in the testing phase. Thanks to Continental, autonomous trucking systems will go into production by 2027, starting in the U.S. What does an autonomous system like this actually involve? A whole array of sensors and lots of intelligence. Why? It's all about safety and reliability. Multiple redundant sensors work together to detect the vehicle environment. Backed by powerful computing, they make the truck intelligent, from the tires right through to the software. Continental is also developing the fallback system, a safety net that continues to steer the truck if necessary and brings it to a safe stop.
Safety through redundancy. Continental is committed to system expertise to deliver the self-driving trucks of the future. Das ist der UltraContact NXT, der bisher nachhaltigste Serienreifen auf dem Markt. Sicherheit, Leistung und Nachhaltigkeit gehen hier Hand in Hand. Doch wie schafft es Continental eigentlich, immer wieder Vorreiter zu sein? Hm, dafür bin ich heute hier, genau das rauszufinden. Kommt mit. Wow! Ganz schön was los hier auf dem Contidrom. Auf dieser Strecke werden die Reifen bei Hochgeschwindigkeit getestet. Es gibt aber auch noch viele weitere Strecken: eine Nass-Handling-Strecke, eine fürs Trocken-Handling und noch viele, viele weitere. Das ist erst der Anfang. Der UltraContact NXT ging innerhalb von einem Jahr in die Serienproduktion. Das ist wahnsinnig schnell. das zu ermöglichen, nutzt Continental auch automatisierte Tests. Das ist die weltweit einzigartige Indoor-Reifenbrems-Testanlage, IBAR. Die Abkürzung steht für Automated Indoor Braking Analyzer.
[Foreing language] Hier testen die Expertinnen und Experten von Continental, wie sich Reifen beim Bremsen verhalten. Bis zu 100,000 Mal im Jahr wird ein Testfahrzeug auf die Testbahn geschickt. Es wird dabei mithilfe eines aufgepasst elektromagnetischen Linearantriebs beschleunigt und autonom wieder abgebremst. Übrigens, der gleiche Antrieb kommt bei einer Achterbahn zum Einsatz. Das sogar mit einem Fahrzeug meiner Wahl. Ganz schön viel Aufwand. Continental steht auch für ein Maximum an Sicherheit und Performance. Dafür werden die Reifen auf Herz und Nieren geprüft. Wow! Dann gibt es noch den hier. Ich sitze gerade im brandneuen Fahrsimulator von Continental. Das fühlt sich so echt an. Wahnsinn. Hier kann ich eintauchen in virtuelle Welten. Auch welchen Reifen ich testen möchte, kann ich auch selbst wählen. Die Entwickler können alle Eigenschaften der Reifen immer wieder digital anpassen.
Reifen können getestet werden, ohne dass man sie tatsächlich bauen muss. Sie behalten dabei alles im Blick. Jetzt kommt vielleicht die Frage auf: Warum sitzt da überhaupt noch jemand drin? Weil das Fahrgefühl extrem wichtig ist. Sogar einer der wichtigsten Aspekte beim Testen. Wie fühlt sich das Bremsen an? Wie verhalten sich die Reifen auf der Fahrbahn? All das wird von unseren Testfahrern ermittelt. Mit jedem Test im Simulator spart man eine Menge Ressourcen und Logistikaufwand. So schaffen es die Entwicklerinnen und Entwickler bei Continental immer wieder, Reifen zu kreieren, die zu den leistungsstärksten, sichersten und nachhaltigsten der Welt gehören. Na, Lust auf eine kleine Tour durchs Unternehmen? Seit über 150 Jahren schlägt unser Herz für die Mobilität der Zukunft. Angefangen hat alles mit Kutschen und Fahrradreifen. Heute sind wir ein internationaler Technologiekonzern mit vielen spannenden Produkten und Services, auch jenseits des Reifens.
Technologien entwickeln sich ständig weiter, genau wie wir und unsere Arbeitswelt. Deswegen unterstützen wir lebenslanges Lernen und bieten wir passgenaue Programme und Qualifizierungsangebote an, dich fit zu machen für die Zukunft. Unser Alltag ist dynamisch. Warum sollte es die Arbeitszeit nicht sein? Wir bieten verschiedene flexible Arbeitsmodelle, die zu deiner ganz persönlichen Lebenssituation passen. Uns liegt am Herzen, dass es dir gut geht. Halte dich fit, bleib gesund und gönn dir auch mal eine Verschnaufpause. Wir unterstützen dich dabei. Check die mitarbeitenden Angebote an deinem Standort aus. Die Welt von Continental ist groß und vielfältig. Verschiedene Fähigkeiten, Perspektiven und Ideen sind willkommen. Und ein wichtiger Teil für unseren Erfolg. Genau das macht uns aus und besonders stark. Bei uns bist du mitten im Geschehen und kannst unsere Technologien und die Ergebnisse deiner Arbeit jeden Tag auf der Straße erleben.
We place value on sustainable business and work practices, a values-based approach to working together, and flat hierarchies. On this basis, we work, align our company strategically, and lead it into the future. Come on, let's take a look at what the management level is doing right now. A warm welcome to our Conti. Hello, everyone. Hey. Is it already raining in the studio? Whoever stands in the rain gets wet. Everyone knows that. Let's imagine the rain is emissions. Both are something completely natural. After all, even breathing creates emissions. And rain, it has basically always existed. Now let's imagine you could stand in the rain without getting wet. So, change the water so that it no longer makes you wet. Hello, Nobel Prize. Back to emissions. They will always exist, but they could be less harmful.
[Foreign language] Dafür reduzieren wir die schädlichen Emissionen der Industrie, überarbeiten also unsere Prozesse und Produkte und finden neue Lösungen entlang der gesamten Wertschöpfungskette. Für eine Mobilität und Industrie frei von schädlichen Emissionen bis spätestens 2050. Wir haben eine klare Vision für eine saubere Zukunft. Die meisten wollen einen gesünderen Lifestyle und auch die Industrie möchte nachhaltiger werden. Veränderungen sind aber nicht immer einfach. Eine Diät reicht da auch nicht. Klar kann es helfen, weniger zu naschen, den Energieverbrauch zu senken. Aber seien wir ehrlich, ganz ohne Energie geht es halt nicht. Was also tun? Zunächst mal weniger ungesundes Essen, weniger fossile Brennstoffe. Woher kommt die Energie dann? Na ja, aus anderen grünen Energiequellen. Natürlich gehört zu einem gesünderen Lifestyle auch Sport. Wir müssen selbst aktiv werden, genauso wie die Industrie ihre Prozesse aktiv umbauen und ihre Produkte anpassen muss.
Daran arbeiten wir bei Continental bereits mit Hochdruck, mit Blick auf unsere Lieferketten, Werke und Produkte. Denn bis spätestens 2050 wollen wir vollständig klimaneutral sein, entlang der gesamten Wertschöpfungskette. Das ist gesünder für uns und gesünder für unseren Planeten. Wer hat früher auch so gern mit Knete gespielt? Sie besteht aus vielen Komponenten, genau wie viele Industrieprodukte. Einige kann man mechanisch trennen, andere Produkte müssen chemisch zerlegt werden, recycelt werden zu können. Das ist manchmal extrem aufwendig und sehr teuer. Deswegen wird es oft nicht gemacht. Früher bedeutete das, wenn ein Produkt nicht mehr genutzt werden konnte, kam es weg. Nicht sehr nachhaltig. Wir arbeiten bereits an einer zirkulären Wirtschaft. Das heißt, dass möglichst keine Ressourcen verloren gehen und alles wiederverwendet wird. Wie soll das gehen? Indem wir Technologien und Verfahren entwickeln, die es uns ermöglichen, die Rohstoffe unserer Produkte wiederzuverwenden.
Daraus werden dann neue Produkte, die sich nach ihrer Nutzung auch wiederverwenden lassen. Es entsteht ein Kreislauf. In einer zirkulären Wirtschaft gibt es keinen Abfall. Alles ist eine Ressource. Bis spätestens 2050 soll das bei Continental Realität sein. Meine Damen und Herren.
Ladies and gentlemen, I would now like to announce the results of the vote, which you can see behind me on the screen. I think it's in your interest that I avoid reading everything out in detail. We had the proposals of the board, the executive board and the supervisory board, the agenda items five and six, as published in the Federal Gazette of the 19th of March 2025.
For each item of the agenda, I find the agenda item two about the appropriation of net profit, the ASM adopted with a majority, item three, resolution on the ratification of the actions of the Executive Board members for fiscal 2024. The ASM voted with the following members with the required majority: Mr. Setzer, von Hirschheydt, Nelles, Schick, and Garcia Vila. Item four, resolution on the ratification of the actions of the Supervisory Board members for fiscal 2024. The following members had their actions ratified with the required majority by the ASM: Reitzle, Allak, Benner, Borck, Boxberg, Buchner, Dunkel, Ebenau, Grioli, Iglhaut, Khatu, Knauf, Löffler, NeuB, Nonnenmacher, Nothing, Rosenfeld, Schäeffler, Schonfelder, Tote, Nordmann, Pfau, Scholz, and Volkmann. Item five on the agenda, resolution on the appointment of the auditor and group auditor, and auditor of the review of the interim financial reports for fiscal 2025 for PricewaterhouseCoopers.
The ASM adopted the proposal with the required majority. Item five point two, which is about the appointment of PricewaterhouseCoopers as the auditor for a required audit for interim reporting for 2025. The ASM adopted the proposal with the required majority. Item six, resolution on the appointment of the auditor of sustainability reporting for fiscal 2025 in the form of PricewaterhouseCoopers for the sustainability reporting for fiscal 2025. The ASM adopted the proposal with the required majority. Item seven, resolution on the approval of the remuneration reports. The ASM adopted the resolution with the required majority. Item eight, resolution on the approval of the merger agreement between Continental, Aktieng esellschaft and Continental Automotive GmbH. The ASM adopted the proposal with the required majority. Item nine, resolution on the approval of the spin-off and transfer agreement between Continental, Aktieng esellschaft and Continental Automotive Holding SE.
The ASM adopted the resolution with the required majority. Item 10 on the agenda, resolution on the amendment to section 10 of the articles of incorporation on reducing the size of the Supervisory Board. The ASM has adopted the resolution with the required majority. Item 11 on the agenda, resolution on the amendment to section 10 of the articles of incorporation on the alignment to requirements of the German Corporate Governance Code. The ASM has adopted the resolution with the required majority. Item 12, resolution on the amendment to section 10 of the articles of incorporation on making recommendations of the members of the Supervisory Board more flexible. The ASM has adopted the resolution with the required majority. Resolution on the amendment to section 17 of the articles of incorporation on making the location of the Annual Shareholders' Meeting more flexible.
The ASM has adopted the resolution with the required majority. Item 14, resolution on the amendment to section 21, paragraph four of the articles of incorporation on alignment to statutory provisions. The ASM has adopted the resolution with the required majority. An overview of the final voting results for each item on the agenda with all of the information in accordance with section 130, paragraph two, sentence two of the German Stock Corporation Act will be submitted to the notary for inclusion in the minutes of this meeting. Ladies and gentlemen, we have now reached the end of the annual general meeting. I would almost say historic annual shareholders meeting. I would like to thank you for your participation and your interest. I would also like to say thank you to the many employees of Continental AG who have prepared this meeting and contributed to its smooth running, almost smooth anyway.
The next general meeting will take place on Wednesday, the 29th of April 2026. I will see you there again, and all the best to all of you. Thank you very much.