The financial results of Continental AG in the third quarter of fiscal 2020 are above current average analyst expectations. However, impairments and restructuring expenses will result in a negative value for reported EBIT in the third quarter of 2020. These factors will also result in a negative value for net income attributable to shareholders for the third quarter of 2020.

Based on preliminary data, key financial results of the third quarter of fiscal 2020 are as follows:

* Consolidated sales of the Continental Group were €10.295 billion (Q3 2019: €11.103 billion) and the adjusted EBIT margin was 8.1% (Q3 2019: 5.6%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was -2.7%.

* Sales in Automotive Technologies were €4.101 billion (Q3 2019: €4.673 billion) and the adjusted EBIT margin was 2.4% (Q3 2019: 5.0%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was -6.4%.

* Sales in Rubber Technologies were €4.333 billion (Q3 2019: €4.561 billion) and the adjusted EBIT margin was 15.0% (Q3 2019: 11.8%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was -1.4%.

* Sales in Powertrain Technologies were €1.909 billion (Q3 2019: €1.926 billion) and the adjusted EBIT margin was 5.8% (Q3 2019: -6.5%). Year-on-year sales growth before changes in the scope of consolidation and exchange-rate effects was +2.4%.

* Free cash flow before acquisitions and carve-out effects for the Group amounted to €1.800 billion. This figure was €343 million in the third quarter of fiscal 2019. The increase resulted from an improvement in business activity which reversed the negative working capital effects from the second quarter of fiscal 2020.

Furthermore, as part of Continental AG's annual planning process, the company will recognize goodwill impairments of €649 million in the third quarter of 2020 in the Vehicle Networking and Information business area. These non-cash impairments predominantly result from the current business planning assumption that there will not be a material increase in global light vehicle production during the upcoming five-year period (2021-2025). A significant portion of the goodwill impairments is attributable to acquisitions made before 2008.

Additionally, restructuring expenses and asset impairments that are part of the expanded "Transformation 2019-2029" structural program announced on September 30, 2020 resulted in expenses of €687 million in the third quarter of 2020. Further expenses for restructuring and asset impairments related to this program are expected to be recognized in the fourth quarter of 2020, though the amounts are not clarified at this time.

Given the current uncertainty around potential disruptions related to the COVID-19 pandemic that may occur in the remainder of 2020, the Executive Board of Continental AG expects only to be able to provide an outlook for fiscal 2020 in conjunction with the publication of the financial report for the first nine months of 2020 on November 11, 2020.

"Adjusted EBIT" is defined in the Glossary of Financial Terms on page 36 of the 2019 Annual Report, which is available at www.continental-ir.com.