Engineering

Management report on the Group
2.3 Management report on the Group Results of operations of the business areas
The new stainless steel mill in in the the USA
began operations.
82 | 83
Adjusted EBIT positive
Adjusted EBIT improved from €(57) million to €15 million, adjusted EBIT margin from (1.0)% to 0.2%.
A favorable market situation at the beginning of the reporting year and the optimization of the product
mix led to positive effects, in particular from the nickel alloy business. In addition, we further reduced costs.
The EBIT figure includes €98 million in startup costs for the new stainless steel mill in the USA.
Impairment charges weigh on EBIT
After goodwill impairment of €290 million and a further fair value adjustment of €510 million, EBIT of
Stainless Global came to €(785) million, compared with €(57) million in the prior year. EBIT margin
decreased from (1.0)% to (11.6)%. The write-down to fair value made necessary by the intention to sell
takes into account in particular the valuation discounts applied to stainless steel producers due to the
structural problems in the market. The discounts also reflect the current sovereign debt crisis and the high
risk aversion of investors. In the current environment, the valuations placed on stainless steel companies are
comparatively low and vary over a range. We determined the fair value on the basis of internal calculations
and estimates of market participants, and our valuation lies in the middle of the range.
Stainless steel mill in the USA
At the US site in Calvert the productivity and product quality of the units in phase 1 of the cold rolling mill
commissioned last fiscal year improved further. The newly installed phase 2 units in the hot-rolled annealing
and pickling line, the second cold rolling mill and the finishing line are now going into operation. In addition,
the third cold rolling mill and the remaining parts of the finishing line are currently being installed.
Construction work on the 1 million ton per year capacity melt shop is proceeding on schedule; it is due to
start operation in December 2012. Until then the location will continue to be supplied with hot band and
slabs from the European mills.
Nirosta forward strategy
To strengthen the competitiveness of the European stainless steel operations, the locations within the
Nirosta plant network are being optimized. The relocation of production from Düsseldorf-Benrath to Krefeld
is to be completed by the beginning of 2016. The investment volume is €244 million. The implementation of
the first phase of the project began at the start of 2011, mainly involving the construction of a new
annealing and pickling line and cold rolling mill.
Business with external customers
The order intake and sales of the business area also include business with customers within the
ThyssenKrupp Group. The following figures were generated with customers outside the Group; as a result of
the separation of the stainless steel operations, the corresponding Group figures are reduced by these
amounts:
2009/2010 2010/2011
Change
in %
Order intake million € 4,609 5,411 17
Sales million € 5,306 6,016 13