2005-2006 Financial Statements and Management Report

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08 THYSSENKRUPP ACHIEVED A SIGNIFICANT INCREASE IN PROFITS FOR THE THIRD YEAR IN A ROW. Sales by segment in million € Steel Stainless Special Materials Automotive Technologies Elevator Services Corporate Segment sales Inter-segment sales Sales of continuing operations 2004/2005 9,568 5,572 389 7,867 5,765 3,773 12,678 138 45,750 (2,823) 42,927 Systematic continuation of portfolio optimization ThyssenKrupp continued its portfolio optimization process. Major acquisitions in 2005/2006 included the purchase of a stake in Atlas Elektronik by the Technologies segment. Elevator strengthened its global market position through a number of smaller acquisitions. At Services, acquisitional growth was focused on Eastern Europe and North America. Automotive disposed of several non-core activities, including the European truck springs business, European and North American aluminum foundries and the us vehicle component plants. The other segments also disposed of marginal activities. In the reporting year up to and including October 2006 we acquired companies with sales of €0.9 billion and disposed of companies with sales of €1.9 billion. Since the merger of Thyssen und Krupp we have now sold companies with sales of €8.9 billion and acquired others with sales of €7.9 billion. Record earnings In addition to our outstanding business performance and successful efficiency enhancement programs, the portfolio optimization improved the quality of the Group’s earnings. Consolidated earnings were €2,623 million, €946 million or 56% higher than our good prior-year income. Almost 1% increase in workforce The number of employees increased. On September 30, 2006, the Group had a total of 187,586 employees, 1,654 or almost 1% more than a year earlier. Due to disposals, the headcount fell in particular at Automotive. Services recorded the largest increase as a result of acquisitions. 2005/2006 10,747 6,437 — 8,045 6,012 4,298 14,204 148 49,891 (2,766) 47,125
EXPECTATIONS EXCEEDED FINANCIAL STATEMENTS AND MANAGEMENT REPORT Overview of the course of business in the Group Our excellent business performance significantly exceeded the expectations we had at the time of writing last year’s annual report. Sales were 10% higher than our planned figure of €43 billion. This was due not only to the favorable economic situation but also to our successful marketing efforts. Furthermore, our efficiency enhancement programs unlocked substantial productivity reserves which improved profitability and increased the value of the company. As a result, we exceeded our original earnings target – €1.5 billion excluding nonrecurring effects – by €1.1 billion, an increase of almost 75%. At 17.9%, our roce was also considerably higher than expected at the start of the reporting year. Once these positive developments became sufficiently concrete in the course of the reporting period, we raised our expectations accordingly and communicated this. KEY SALES MARKETS AND COMPETITIVE SITUATION ThyssenKrupp operates worldwide. We generate 34% or €15.8 billion of our sales in Germany and 66% or €31.3 billion outside Germany. Our main foreign markets are the eu countries (28% of sales) and the nafta region (22%). ThyssenKrupp companies and products occupy leading positions on many international markets. Worldwide marketing ThyssenKrupp supports sales of its products and services worldwide through a large number of marketing measures, from product design, pricing policy and sales organization through to product-related communications and advertising. The companies in the individual segments operate independently on the markets and are responsible for their own marketing efforts, based on Groupwide corporate design guidelines. Given the broad spectrum of products and services within our Group and the highly differing markets on which we operate, this allows us to respond swiftly to market changes and customer requirements. In close contact with customers, our subsidiaries optimize their products and position them against competing products. Continuous innovations secure the quality and unique selling points of our range. Sales by region 2005/2006 in % Germany 34 Other EU countries 28 Rest of Europe 3 Asia 6 NAFTA region 22 South America/Rest of world 7 OUR EFFICIENCY ENHANCEMENT PROGRAM UNLOCKED PRODUCTIVITY RESERVES. 09
Page 1: 2005 - 2006 Financial Statements an
Page 4 and 5: 02 BUSINESS AREAS AND ORGANIZATIONA
Page 6 and 7: 04 OVERVIEW OF THE COURSE OF BUSINE
Page 8 and 9: 06 NICKEL ALLOYS AND TITANIUM MILL
Page 12 and 13: 10 €489 MILLION OF UNAPPROPRIATED
Page 14 and 15: 12 INVESTMENTS IN GROWTH AREAS STRE
Page 16 and 17: 14 FUEL PRICE INCREASES PUSHED UP T
Page 18 and 19: 16 WE HAVE DEVELOPED A PLANT FOR CO
Page 20 and 21: 18 STEEL ACHIEVED A PROFIT OF €1.
Page 22 and 23: 20 A STRONG MARKET REVIVAL AND INNO
Page 24 and 25: 22 IN MEXICO, HIGH-VALUE PRODUCTS A
Page 26 and 27: 24 AUTOMOTIVE CONTINUED ITS PORTFOL
Page 28 and 29: 26 TECHNOLOGIES ENJOYS SUCCESS ON T
Page 30 and 31: 28 THE LARGEST LATHE IN NORTHERN EU
Page 32 and 33: 30 ACQUISITIONS IN THE USA, ASIA AN
Page 34 and 35: 32 SERVICES ALMOST DOUBLED ITS PROF
Page 36 and 37: 34 CORPORATE INCLUDES VARIOUS SERVI
Page 38 and 39: 36 OUR CONTROL SYSTEM FOR LASER WEL
Page 40 and 41: 38 TO DATE, ALMOST 300 PROJECTS HAV
Page 42 and 43: 40 OCCUPATIONAL SAFETY HAS IMPROVED
Page 44 and 45: 42 OUR EXECUTIVE POLICY IS BASED ON
Page 46 and 47: 44 FINANCIAL POSITION The Group’s
Page 48 and 49: 46 INTANGIBLE ASSETS INCLUDE GOODWI
Page 50 and 51: 48 THE THYSSENKRUPP BRAND WAS FURTH
Page 52 and 53: 50 WE HAVE SEVERAL STRATEGIC OPTION
Page 54 and 55: 52 OUR INTEGRATED CONTROL CONCEPT S
Page 56 and 57: 54 GROWTH, EFFICIENCY AND OPTIMIZAT
Page 58 and 59: 56 OVER 60% OF BEST PROJECTS TAKE P
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58 COMPENSATION REPORT THE BONUS AM
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60 THE LTMI EXPIRED WITH PAYMENT OF
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62 THE SECURITY OF THE INFORMATION
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64 THE AREAS OF ACTIVITY OF THE SEG
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66 THE RISKS TO THE THYSSENKRUPP GR
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68 VEHICLE PRODUCTION REMAINS A GLO
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70 THE NUMBER OF EMPLOYEES WILL RIS
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72 BALANCE SHEET Assets million €
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74 NOTES GENERAL ThyssenKrupp ag is
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76 FIXED ASSETS SCHEDULE in million
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78 Disclosures on the volume of tre
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80 million € Bonds Liabilities to
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82 Foreign currency derivatives The
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84 22 TAXES ON INCOME Taxes on inco
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86 AUDITORS’ REPORT We have audit
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88 SUPERVISORY BOARD PROF. DR. H.C.
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90 LIST OF EQUITY INTERESTS Compani
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92 Companies (As of September 30, 2
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100 CONTACT/2007/2008 DATES For mor
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2005-2006 Financial Statements and Management Report

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