But opportunities to buy the high-tech specialists in sensor systems or software that Continental wants are rare, Wolfgang Schaefer said in a telephone interview.

Continental, one of the world's biggest suppliers to the automotive sector, is rapidly building its electronics expertise as the industry moves towards more intelligent and ultimately self-driving vehicles.

It already employs more than 13,000 software engineers - about 14 percent of its staff - and bought embedded software company Elektrobit Automotive last year for 600 million euros.

"We have an M&A radar, a universe of companies that could be strategically interesting. But then the question is: Are they available?" said Schaefer. "At the moment we are not in concrete talks with any company about a takeover."

Continental earlier reported that free cashflow before acquisitions increased by more than 500 million euros to 2.7 billion euros in 2015, and its equity to 13.2 billion euros, its highest to date.

Schaefer said Continental had had a good start to the year in China, the world's biggest car market, helped by incentives for buyers of small cars. He said he expected these positive effects to continue throughout the year.

Chief Executive Officer Elmar Degenhart said: "The start we have made to this year in a difficult environment confirms our expectations for 2016."

Continental said it would hike its dividend for 2015 by 15 percent to 3.75 euros per share, in line with its increase in net profit after minorities to 2.73 billion euros.

Its shares rose 2.85 percent to the top of the German blue-chip index <.GDAXI> by 1138 GMT.

The Hanover-based company confirmed it expected organic revenue growth of 5 percent this year, driven by sales of electronics, sensors and software systems, industrial products and tyres that should help it outgrow the market.

Continental had already published preliminary 2015 results and 2016 guidance in January.

It said on Thursday its Automotive unit sales rose 13 percent, with a 70 percent jump in operating profit, while its tyres unit, Rubber, increased sales by 15 percent and kept operating profit roughly flat.

(Reporting by Georgina Prodhan; Editing by Maria Sheahan and Mark Trevelyan)

By Georgina Prodhan and Jan Schwartz