Engineering

2.1 Management report on the Group Profile and and strategy
Calculation of
ThyssenKrupp Value Added (TKVA)
TKVA
–
EBIT
Cost of
capital
–
Sales
Capital
employed
x
Costs
WACC
– Responsibility
Every employee is measured against the sustainable success of the company. This includes adherence to
compliance rules.
– Leadership and culture
In a modern corporate culture managers see themselves as role models and multipliers. For example,
internal communication at ThyssenKrupp today is much more intensive than in the past.
impact replaces the previous corporate program ThyssenKrupp best. It retains proven methods, tools,
templates and processes, and builds on successful ThyssenKrupp-best approaches. One example of this is
continuous benchmarking. To make the effects of impact transparent the program is integrated into our
financial planning and reporting systems.
With the introduction of the new corporate program the first-ever impact award was presented. The award is
recognition for the three best measures under the corporate program in a fiscal year. First place went to
Elevator Technology for the “Supply Management Efficiency Program”. Second prize was won by Steel
Europe for the measure “Energy cost reduction and increased energy efficiency”, and third prize went to a
Materials Services measure called “Establishing a central warehouse network for engineering steel”.
Value-based management
We aim to systematically and continuously increase the value of the company through profitable growth and
a focus on businesses with the best development opportunities. For this we use a value-based management
system. Key elements of this management system are integrated controlling, value-based performance
indicators, and value-increasing measures.
Integrated controlling secures Groupwide transparency
We use an integrated controlling system to manage the activities of all areas of the Group. It helps us
identify and bridge operational and strategic gaps between actual and target performance. Our high-quality
reporting and forecasting systems connect strategic and operational elements in real time. The performance
indicators are also used to calculate the variable components of management compensation.
ThyssenKrupp Value Added as a value-based performance indicator
The central performance indicator for our value-based management system is ThyssenKrupp Value Added
(TKVA), which measures the value created in a period at all levels of the Group. It is calculated as earnings
before interest and taxes (EBIT) minus cost of capital. Cost of capital represents the expected return on
equity and debt. The weighted average cost of capital (WACC) is calculated on a pre-tax basis and is made
up of the weighted average cost of equity and debt as well as the interest rate for pension provisions. Capital
employed is defined as invested assets plus net working capital; it is the amount of capital tied up in
operations.
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