Annual Report 2003 2004

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In order to further lower the dependency on cyclical price
developments, the segment has been expanding its service business,
which does not depend on the price development of materials.
The risks from potentially uncollectible receivables are relatively
insignificant. Apart from the use of hedging instruments, a broad
customer portfolio and worldwide business activities ensure a wide
spread in this area of risk. This also applies to the Industrial Services
business unit to a great extent. In part, the considerable competition
and price pressure has been countered by capacity adjustments at all
levels on the one hand and targeted sales initiatives on the other.
Business losses have been largely compensated through the acquisition
of new customers.
No risks are discernible which could jeopardize the continued
existence of the Real Estate segment; this applies in particular for
risks which could arise from structural or legal changes or external
influences. The risk of vacancy will be limited for residential property
in particular through targeted modernization programs and optimized
customer service. Improved project management is facilitating risk
limitation for industrial property. Beyond this, an integrated sales and
maintenance program, together with optimized inventory management,
supports the segment’s ongoing portfolio optimization.
Summary
The overall evaluation of the risks shows that the Group is affected
principally by market risks; this includes economic price and volume
developments in particular, as well as the dependency on the
development of major customers and industries. Performance
processes are well controlled in general and, therefore, less subject
to risks. Overall, it can be noted that the risks in the ThyssenKrupp
Group are contained and manageable and do not pose a threat to
the existence of the company. Nor are any risks discernible that may
jeopardize the existence of the Company in the future.