Continental AG: Continental Changes Outlook for Fiscal 2016

Continental AG / Key word(s): Profit Warning17.10.2016 18:07Disclosure of an inside information according to Article 17 MAR,transmitted by DGAP - a service of EQS Group AG.The issuer is solely responsible for the content of this announcement.---------------------------------------------------------------------------EBIT of the Automotive Group is expected to be significantly lower than theprevious year's level. - Potential expenditure for warranties and pending antitrust proceedings and - the aftermath of three earthquakes in Japan as well as high R&D advanceswill have a negative impact on Automotive Group's reported and adjustedEBIT for fiscal 2016 of around EUR480 million and on the corporation'soutlook, which was last changed on August 3, 2016.Hanover - Over the past few days, several isolated circumstances haveresulted in the following situation:The Chassis & Safety and Interior divisions are anticipating a negativeimpact of around EUR390 million due to warranties for products, themajority of which were supplied between 2004 and 2010, and due topotential expenditures for pending antitrust proceedings.The situation of one of our microcontroller suppliers has become even worsedue to the latest earthquake on August 31, 2016, in the Kumamoto region ofJapan. As a result, the Interior division is anticipating a loss in salesin the current year amounting to at least EUR100 million (previouslyexpected: EUR50 million). EBIT will be impacted by around EUR50 million dueto special cargos, product adjustments and increased manufacturing costs.R&D advances which are higher than expected further impacted the Interiorand Powertrain divisions by roughly an additional EUR60 million.Consequently, the adjusted EBIT margin of the Powertrain division in 2016will be below the previous year's level of 5.7 percent.These burdens can only be partially absorbed. In aggregate, thesecircumstances result in a negative effect on the Automotive Group'sreported and adjusted EBIT of around EUR480 million.Effects on the outlook for the corporation, which was previously amended onAugust 3, are as follows: - Despite the situation in Japan, the sales forecast for the corporation is still confirmed at around EUR41 billion before exchange-rate effects - The adjusted EBIT margin for the corporation will be over 10.5 percent in the current year (previously over 11 percent) - The sales forecast for the Automotive Group is confirmed at around EUR25 billion before exchange-rate effects - The outlook for the adjusted EBIT margin of the Automotive Group has been lowered to over 6.5 percent (previously over 8.5 percent) - The outlook for the Rubber Group (sales over EUR16 billion before exchange-rate effects and adjusted EBIT margin over 17 percent) is confirmed - All remaining elements of the outlook (negative special effects amounting to around EUR100 million, negative net interest result better than EUR250 million, corporation tax rate below 30%, capital expenditure ratio before financial investments at around 6% of sales, and free cash flow before acquisitions of at least EUR2 billion) are confirmed.17.10.2016 The DGAP Distribution Services include Regulatory Announcements,Financial/Corporate News and Press Releases.Archive at www.dgap.de--------------------------------------------------------------------------- Language: EnglishCompany: Continental AG Vahrenwalder Straße 9 30165 Hannover GermanyPhone: +49 (0)511 938-1068Fax: +49 (0)511 938-1080E-mail: ir@conti.deInternet: www.conti.deISIN: DE0005439004WKN: 543900Indices: DAXListed: Regulated Market in Frankfurt (Prime Standard), Hamburg, Hanover, Stuttgart; Regulated Unofficial Market in Berlin, Dusseldorf, Munich, Tradegate Exchange; Luxemburg, SIX End of Announcement DGAP News-Service ---------------------------------------------------------------------------