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2.2 Management report on the Group Consolidated results of operations 2.2 Management report on the Group Consolidated results of operations Natural gas prices ThyssenKrupp in Germany Bochum off-take point in €, indexed, October 2009 = 100 160 140 120 100 80 Oct 2009 Sept 2011 The emission allowances allocated to to ThyssenKrupp in in calendar year 2010 were were enough. enough. Natural gas prices in Germany higher In Germany the price paid by ThyssenKrupp for natural gas increased by 25% year-on-year because under the applicable contracts it is pegged to the price of oil. For the following two fiscal years we have secured prices on attractive terms – in particular in comparison with prices on the futures market. The situation at our operations abroad is positive, with previously agreed fixed price contracts permitting significant savings against the current market price. In France our companies use liquid trading points in the Netherlands to achieve considerably improved terms and conditions. In Spain a new natural gas contract entered into effect in the 4th quarter 2010/2011 with prices 8% below the already favorable level of the previous contract. In the USA natural gas prices are far lower than in Europe. The development of previously unprofitable gas reserves created a surplus which cannot be sold on the global market for technical reasons. The price of natural gas for our new plant complex in Alabama is therefore well below half that paid by similar plants in Germany. Energy transition increases electricity costs in Germany Due to our increased output we had to purchase extra electricity at short notice in 2010/2011. We succeeded in reducing our average price in Germany even though electricity prices increased in the wake of the economic recovery. On the futures market, too, prices have advanced considerably since the nuclear exit began. Electricity prices in Germany are at the top end of the European scale – driven by politically imposed costs such as the levy to subsidize renewable energies, an electricity tax increase, the subsidization of heatand-power cogeneration, and rising network charges. The situation in France is different: Here the government-regulated industrial electricity tariff expired at the end of June 2011 and was replaced with a new instrument. By using this we saved over €1 million in the 4th quarter of the reporting year alone. In Italy we were able to keep electricity costs below the local price level by purchasing some volumes at more favorable foreign wholesale terms. Emissions trading: Hedge for third trading period In accordance with the legal rules, ThyssenKrupp received emission allowances for 21,263,403 tons of CO2 in calendar year 2010. As actual emissions were 21,246,047 tons, the allocated emission allowances were enough. We have already purchased EU emission allowances at attractive market prices as a hedge for the third trading period (2013-2020). 70
Management report on the Group 2.3 2.3 Management Management report on on on the Group Results of of operations of operations of of the of the the business areas areas Results of operations of the business areas The Group’s operations are organized in eight business areas. As at September 30, 2011 Stainless Global is classified as a discontinued operation. All business areas contributed to the rise in orders and sales in the reporting year, and apart from Steel Americas all continuing operations generated a positive EBIT contribution. Steel Steel Europe’s Europe’s sales sales increased increased by by by 19% 19% to to to almost almost €13 €13 billion billion in in in 2010/2011. 2010/2011. Steel Europe Steel Europe in in figures 70 71 | 71 2009/2010 2010/2011 Change in in % Order intake million € € 10,986 12,344 12 12 Sales million € € 10,770 12,814 19 19 EBIT million € € 731 1,133 55 55 EBIT margin % 6.8 8.8 — Adjusted EBIT million € € 731 1,133 55 55 Adjusted EBIT margin % 6.8 8.8 — Employees (Sept. 30) 34,711 28,843 (17) The Steel Europe business area combines the Group’s flat carbon steel activities, mainly in in the European market. Its Its high-quality flat products are supplied to to customers in in the auto industry and other steel-using sectors. The range also includes products for attractive specialist markets such as as the packaging industry. Higher volumes and selling prices Steel Europe profited from a robust steel market over large parts of of 2010/2011. Order volumes at at 12.5 million tons were 2% up from the already high prior-year level. However the extremely strong demand in in the 1st half of of the reporting year weakened from the spring, partly due to to the stock cycle. With prices higher due to to increased costs, the value of of orders received rose by by 12% to to €12.3 billion. Sales of of the business area increased by by 19% to to €12.8 billion. Shipments were 8% higher than the prior year at at 13.0 million tons, and selling prices were increased step by by step as as further rises in in raw material costs were passed through to to customers with a time lag. Thanks to to strong auto sector activity, shipments to to automotive customers expanded significantly. Prices under new contracts were adapted in in line with raw material costs. The business area likewise achieved higher volumes and prices with a large portion of of other industrial customers and steel service centers. Sales of of medium-wide strip, heavy plate and tailored blanks also grew strongly. Sales of of tinplate also increased. This was due to to higher selling prices; shipments have deteriorated recently. Selling prices for oriented electrical steel came under considerable pressure, but business in in non-oriented electrical steel was more positive.
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Annual Report 2010/2011 At the cent
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Our mission statement We are Thysse
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Our capabilities Material We combin
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Making tomorrow possible Our engine
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Letter to shareholders Dr.-Ing. Hei
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Letter to shareholders To assist ou
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To our shareholders To our sharehol
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