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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
Pages 54-56 54–56
Adjusted EBIT in million €
2009/2010 2010/2011 Change
EBIT 1,346 (988) – –
+/- Disposal losses/gains (212) 76 —
+ Restructuring expense 46 0 —
+ Impairment 3 2,834 —
+ Other non-operating expense 58 0 —
- Other non-operating income 0 (160) —
Adjusted EBIT 1,241 1,762 42
At the beginning of fiscal year 2010/2011 we switched our performance indicator from EBT to EBIT. More
information is provided in the section “Value-based management”.
Components of Group earnings
At €43,356 million, net sales from continuing operations in 2010/2011 were up year-on-year by
€5,645 million or 15%. The cost of sales increased at a faster rate by €6,968 million or 22%. The main
causes, apart from higher materials expense due to the start of production of the new steel plants, the
increase in business and raw material price rises, were the impairment charges on property, plant and
equipment recorded at Steel Americas (€1,602 million), and write-downs of transfer taxes and inventories.
Gross profit from continuing operations deteriorated as a result by 22% to €4,740 million, combined with a
drop in gross margin from 16% to 11%.
The €236 million increase in selling expenses was mainly caused by increased expenses for sales-related
freight and insurance charges as well as the impairment charges affecting property, plant and equipment at
the steel mill in Brazil. The €27 million rise in general and administrative expenses from continuing
operations mainly reflects impairment charges on property, plant and equipment of Steel Americas.
Other operating income from continuing operations increased by €105 million; this included €160 million
from the partial refund of a fine imposed by the EU Commission in 2007 for antitrust infringements. The
€106 million decrease in other operating expenses from continuing operations was attributable in particular
to reduced expenses from provisions.
The €250 million decrease in income from the disposal of consolidated companies attributable to continuing
operations was mainly due to the absence of income from the disposal of ThyssenKrupp Industrieservice
and ThyssenKrupp Safway contained in the prior year.
The €331 million deterioration in financial income from continuing operations was mainly due to the
€282 million reduced capitalization of borrowing costs with the progressive completion of the major projects
in Brazil and the USA.
With tax expense from continuing operations of €203 million in fiscal year 2010/2011, the effective tax
charge of (27)% was mainly due to valuation allowances for deferred income taxes.
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