2005-2006 Financial Statements and Management Report

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ACQUISITIONS IN THE USA, ASIA
AND EUROPE ENSURED HIGHER
SALES AT ELEVATOR.
The Southern Europe/Africa/Middle East business unit improved on its prior-year profits. In Spain,
the business unit achieved significantly higher earnings, while all other regions matched their good
prior-year performance despite increasing price pressure. There were also positive contributions to
income from the newly acquired companies in Italy and Egypt, which were included for the first time,
and the absence of expense for the valuation of currency derivatives, which impacted the previous
year’s figures.
The Americas business unit returned substantially higher profits. Growth in North America was
mainly driven by efficiency enhancements, especially in the production area, and the systematic
expansion of the service business. The Latin American activities, particularly in Brazil, also achieved
significant earnings improvements. The higher average value of the us dollar also resulted in translation
gains.
The Asia/Pacific business unit returned a loss in the reporting period due to developments in South
Korea: sharply increased competition in the new installations market resulted in a significant decline in
earnings. An extensive restructuring program also impacted income. By contrast, the activities in
China, India and Southeast Asia returned higher profits. The newly acquired Taiwanese activities also
made a positive earnings contribution.
The Escalators/Passenger Boarding Bridges business unit achieved a higher profit. The escalator
activities matched their prior-year performance. Passenger boarding bridge construction benefited
from the significant growth in air traffic. The absence of expense for currency hedges, which had a
negative impact a year earlier, also contributed to the earnings improvement.
The Accessibility business unit achieved a sharp increase in income, with contributions from both the
European and the North American activities. Added to this came positive earnings contributions from a
newly acquired Italian company.
Significant events
Several acquisitions contributed to the growth of the Elevator segment in 2005/2006. In the us state of
Florida, our modernization and service operations were expanded with the acquisition of Atlantic Elevator
Sales & Service. ThyssenKrupp Elevator now has its own market presence in Taiwan following the
acquisition of Sun Rhine Enterprises at the end of 2005.
The growth strategy was also continued in Italy with the acquisition of SIAR, a company specializing
in maintenance and service. Our first Serbian subsidiary, ThyssenKrupp Elevatori Serbien, began operation
in Belgrade.
The segment strengthened its market position in passenger boarding bridges in South America,
Europe and North Africa with the acquisition of the TEAM companies in Italy and the uk and of Trabosa
in Spain. The Accessibility business unit set up a subsidiary in Portugal, ThyssenKrupp Acessibilidades,
Unipessoal.
Capital expenditures
Capital expenditures in the Elevator segment amounted to €164 million, with depreciation at €52 million.
Spending on property, plant and equipment focused mainly on maintaining existing operations. In
addition, a factory was built in Zhongshan, China, to produce escalators and passenger boarding
bridges. However the majority of the investment went on acquiring shareholdings and numerous smaller
service packages in various countries.