I E THYSSENKRUPP AG 1 ST QUARTER OCTOBER 01 DECEMBER 31, Developing the future.

Transcription

1 N I E G E THYSSENKRUPP AG 1 ST QUARTER OCTOBER 01 DECEMBER 31, 2012 K N Developing the future.

2 ThyssenKrupp in brief ThyssenKrupp has 150,000 employees in around 80 countries working with passion and expertise to develop solutions for sustainable progress. Their skills and commitment are the basis of our success. In fiscal year 2011/2012 ThyssenKrupp generated sales of 40 billion. For us, innovations and technical progress are key factors in managing global growth and using finite resources in a sustainable way. With our engineering expertise in the areas of Material, Mechanical and Plant, we enable our customers to gain an edge in the global market and manufacture innovative products in a cost- and resource-efficient way. THYSSENKRUPP STOCK MASTER DATA ISIN (International Stock Identification Number) DE Stock exchange Frankfurt (Prime Standard), Düsseldorf Symbols Frankfurt, Düsseldorf stock exchange TKA Reuters (Xetra trading) TKAG.DE Bloomberg (Xetra trading) TKA

3 Contents October 01 December 31, ThyssenKrupp in figures Interim management report Condensed interim financial statements Further information 03 Strategic development of the Group 05 Group review 12 Business area review 21 ThyssenKrupp stock 21 Innovations 22 Employees 23 Financial position 25 Subsequent events 26 Expected developments and associated opportunities and risks 31 Consolidated statement of financial position 32 Consolidated statement of income 33 Consolidated statement of comprehensive income 34 Consolidated statement of changes in equity 35 Consolidated statement of cash flows 36 Selected notes to the consolidated financial statements 45 Review report 46 Report by the Supervisory Board Audit Committee 47 Contact and 2013/2014 dates This interim report was published on February 12, 2013.

4 Interim Report 1st Quarter 2012/2013 ThyssenKrupp in figures 02 ThyssenKrupp in figures GROUP 2011 Continuing operations 2012 Change Change in % 2011 Full Group 2012 Change Change in % Order intake million 9,677 9,642 (35) 0 11,260 11,202 (58) (1) Sales million 9,596 8,837 (759) (8) 11,138 10,412 (726) (7) EBITDA million (218) (32) EBIT million (37) (14) (357) EBIT margin % (0.2) (3.2) Adjusted EBIT million (143) (38) Adjusted EBIT margin % (1.3) EBT million (36) (35) (514) Adjusted EBT million (142) (65) (131) (90) Earnings net of tax or net income/(loss) for the period* million (12) (29) (460) Basic earnings per share (0.02) (25) (0.89) Operating cash flow million (1,327) 78 1, (1,815) (140) 1, Free cash flow million (1,330) 736 2, (2,054) 361 2, Employees (Dec. 31) 155, ,860 (4,741) (3) 171, ,850 (16,462) (10) Net financial debt (Dec. 31) million 5,937 5,205 (732) (12) Total equity (Dec. 31) million 10,000 4,235 (5,765) (58) *attributable to ThyssenKrupp AG s shareholders BUSINESS AREAS 2011 Order intake (million ) Sales (million ) EBIT (million ) 2012 Adjusted EBIT (million ) Employees Components Technology 1,778 1,324 1,753 1, ,936 27,789 Elevator Technology 1,466 1,616 1,348 1, ,581 47,897 Plant Technology 871 1, , ,786 14,359 Marine Systems (116) ,301 3,817 Materials Services 3,201 2,765 3,145 2, ,910 26,280 Steel Europe 2,705 2,403 2,530 2, ,273 27,629 Corporate (99) (112) (101) (97) 2,814 3,089 Consolidation (599) (524) (524) (469) (78) (89) (78) (95) 0 0 Continuing operations 9,677 9,642 9,596 8, , , As part of its strategic development program ThyssenKrupp is divesting its steelmaking and processing plants in Brazil and the USA. At September 30, 2012 the Steel Americas business area met the requirements for classification as a discontinued operation under IFRS. This had been the case for Stainless Global since September 30, 2011; the combination of the stainless business with the Finnish company Outokumpu was successfully completed on December 28, Until the end of December 2012 the Group s continuing operations comprised the remaining six business areas and Corporate. At January 01, 2013 the Plant Technology and Marine Systems business areas were combined into the new Industrial Solutions business area.

5 Interim Management Report 1st Quarter 2012/2013 Strategic development of the Group 03 Strategic development of the Group ThyssenKrupp is a diversified industrial group firmly focused on the markets of the future. As a partner to its customers the Group uses its leading engineering expertise to develop technological solutions for greater resource efficiency and sustainable processes and products. With our strategic development program we are pursuing a holistic plan to move the Group forward competitively and sustainably. The pillars of the program are continuous portfolio optimization, changes to our corporate culture and our leadership and organizational structure, and a stronger performance orientation. This will strengthen our financial base and give us freedom to strategically expand our business activities. In the 2012/2013 we made further progress with our strategic development program. Portfolio further optimized The combination of Inoxum, the former Stainless Global business area, and the Finnish stainless steel manufacturer Outokumpu was successfully completed on December 28, We have therefore implemented the portfolio measures announced in May 2011 in the planned time frame. With the closing of the transaction ThyssenKrupp received 1 billion cash and transferred external financial liabilities of Inoxum to Outokumpu. This led directly to a reduction in the Group s net financial debt. Outokumpu also took over pension obligations of Inoxum. ThyssenKrupp holds a 29.9% share in the new company and has a financial receivable outstanding against Outokumpu. The sale of Steel Americas is also proceeding to plan. Since November 2012 we have been giving a selection of potential buyers the opportunity to analyze the plants in a due diligence process and submit binding purchase offers. We are confident of finding a new way forward for both plants before the end of this fiscal year. The proceeds from the sale will significantly reduce our net financial debt. Despite the current financial restrictions we carried out targeted investment measures to stimulate growth in selective areas in the reporting period. For example the Elevator Technology business area completed the takeover of the business activities of AMCO Elevator Inc. based in Indianapolis/Indiana, USA on December 31, Changes in the leadership system and leadership culture On November 21, 2012 the Supervisory Board decided to appoint Oliver Burkhard to the Executive Board of ThyssenKrupp AG effective February 01, From April 01, 2013 he will take on the function of labor director as successor to Ralph Labonte, who is leaving the Company at March 31, 2013 for health reasons. On December 10, 2012 the Supervisory Board followed the recommendation of the Personnel Committee and terminated the appointments of the Executive Board members Dr. Olaf Berlien, Dr. Jürgen Claassen and Edwin Eichler effective December 31, The decision was made in connection with the overall responsibility of the Executive Board for the management of business and the leadership culture of the Group. Dr. Olaf Berlien, Dr. Jürgen Claassen and Edwin Eichler were in agreement with the termination of their appointments and are thereby supporting the necessary changes to the leadership system and the full-scale transformation of the leadership culture in the Group. To strengthen our performance and enhance our leadership culture Groupwide, the Group leadership structure is currently being modified. A matrix organizational structure is being introduced to optimize the way business units, functions and regions work together. Roles, rules and responsibilities will be clarified, processes where necessary redefined, and appropriate structural changes made. With the reorganization of the Executive Board effective January 01, 2013, structural changes have already been implemented. According to their function the business area management board members now report directly to the Chief Executive Officer, the Chief Financial Officer, or the Chief Human Resources Officer of ThyssenKrupp AG. This will permit more direct cooperation and more efficient communication between the operating companies and Group management. At February 01, 2013 the corporate functions were reduced and reorganized. In the future each corporate function will bear global responsibility for standards and processes. The business areas will have central functions analogous with the structure at Group level to optimize cooperation between the Group and business areas. In the coming months all further structures and processes will be planned in detail also to include the regions. We plan to begin working in this new structure from October 2013.

6 Interim Management Report 1st Quarter 2012/2013 Strategic development of the Group 04 Efficiency advantages through combining of business units At January 01, 2013 the business areas Plant Technology and Marine Systems were combined to form the new Industrial Solutions business area. The business models of the two units are very similar. Both have strong capabilities in engineering, project management, and purchasing. The combination allows each area to profit from the strengths of the other and their management structures to be streamlined. Overall the Group s successful project business will be further strengthened. Also effective January 01, 2013 we combined the Group companies Fördertechnik and Polysius within the Industrial Solutions business area. This will improve our position in the mining, minerals and cement markets served by the two subsidiaries. It also eliminates unnecessary overlaps and creates efficiency advantages. With five business areas in the future, the complexity of the Group will be reduced. Corporate program impact Since the introduction of impact in May 2011 numerous performance measures have been implemented. With impact 300 we set ourselves the goal of achieving a positive EBIT effect of 300 million through performance measures in the 2011/2012 fiscal year. We exceeded this target and are now aiming even higher: In the three fiscal years up to and including 2014/2015 we aim to achieve a cumulative positive EBIT effect of 2 billion through performance measures. We want to achieve 500 million of this in the current fiscal year, and 750 million in each of the following two years. The success of many impact measures and initiatives in the past demonstrates that the program has succeeded in effectively mobilizing employees and managers. We are confident that we will also achieve the targets of impact Optimization program at Steel Europe with a savings volume of 500 million On the basis of a market and competition analysis, the new leadership team of the Steel Europe business area has developed a package of measures to sustainably improve the steel unit s profitability and competitiveness. The optimization program plans to achieve a savings volume of 500 million by the 2014/2015 fiscal year. That means the Steel Europe business area will make an important contribution to the corporate program impact and to improving the performance of the Group as a whole. The Best in Class reloaded optimization program is a forceful initial step towards improving the position of the ThyssenKrupp Group s European steel operations in a difficult market environment and achieving the profitability and capital efficiency required of all the Group s business operations under the Strategic Way Forward. Under the optimization program, the workforce of Steel Europe will be reduced in a socially responsible way by over 2,000 employees. As a result of possible disposals, the number of employees could be reduced by a further 1,800.

7 Interim Management Report 1st Quarter 2012/2013 Group review 05 Group review Operational and strategic milestones achieved In a difficult economic environment in the 2012/2013 (October 01 December 31, 2012) ThyssenKrupp achieved its operational and strategic goals. At 229 million, adjusted EBIT from continuing operations was at the top end of the forecast range of around 200 million. All business areas made a positive contribution to EBIT. With 351 million the capital goods businesses accounted for a significantly higher share of adjusted EBIT than the materials businesses with 70 million. By contrast adjusted EBIT from the corporate area including consolidation items came to (192) million. The continuing operations free cash flow amounted to 736 million, an improvement of around 2.1 billion on the prioryear quarter reflecting our efforts to optimize the structure of our cash flow profile. On this basis we succeeded in reducing net financial debt from 5.8 billion to 5.2 billion in the 2012/2013; in the year-earlier quarter we reported an increase of around 2.2 billion. The highlights for the first three months 2012/2013: Despite the divestments, order intake from continuing operations was almost level with the prior year at 9.6 billion. The capital goods businesses reported an increase year-on-year. Plant Technology and Elevator Technology each achieved new record orders. While plant orders more than doubled, elevator orders were up by a strong 10%. However, weak market demand and low prices weighed on the materials business. Sales from continuing operations were 8% lower at 8.8 billion. Plant and elevator sales growth could not offset the divestments and declines in other business areas. Adjusted EBIT from continuing operations came to 229 million, compared with 372 million in the prior-year quarter. All business areas posted positive earnings; the biggest contribution came from Elevator Technology, which also succeeded in improving its margin to 11%. EBIT from continuing operations was 219 million, down from 256 million in the prior-year period. EBIT margin was almost unchanged at 2.5% compared with 2.7% a year earlier. Earnings per share from continuing operations decreased from 0.08 to Including the discontinued operations Steel Americas and Stainless Global (sold at December 28, 2012) order intake for the full Group in the first three months 2012/2013 came to 11.2 billion (prior year: 11.3 billion), and sales to 10.4 billion (prior year: 11.1 billion). Adjusted EBIT increased from 25 million to 74 million. Free cash flow for the full Group improved by around 2.4 billion year-on-year to 361 million. The costs of discontinued operations were significantly outweighed by cash inflows from the successful closing of the stainless steel transaction. Net financial debt for the Group as a whole amounted to 5,205 million at December 31, 2012 and was therefore down both year-on-year (December 31, 2011: 5,937 million) and quarter-on-quarter (September 30, 2012: 5,800 million). Taking into account cash and cash equivalents and undrawn committed credit lines totaling 7.4 billion as well as our balanced maturity structure, ThyssenKrupp is solidly financed. At December 31, 2012 gearing was 122.9%.

8 Interim Management Report 1st Quarter 2012/2013 Group review 06 Economic growth still weak The economic environment remained extremely weak last year. Growth in global GDP slowed further to only 2.8% in There were significant differences in growth between the industrialized and the emerging countries. The industrialized countries recorded GDP growth of only 1.3% in This reflected in particular the slowdown in the euro zone, where economic output fell by a total of 0.6%. The economies of southern Europe in particular are in recession due to the ongoing debt crisis. However, German GDP increased by a moderate 0.7% thanks to high exports and rising consumer spending due to the positive labor market situation. The US economy recovered only moderately in The only slow improvement on the labor market and the pressure to consolidate public-sector budgets weighed on the economy. Nevertheless, a slight increase in consumer spending and higher business spending contributed to growth of 2.2%. In Japan GDP grew by 1.6% due to disaster-related reconstruction; the strong yen slowed the growth in exports. In the emerging economies the previously mainly high growth rates slowed slightly. GDP growth in these countries fell to 5.0% overall in 2012, also due to the flat economy in Europe. Nevertheless, China and India still grew relatively strongly at 7.8% and 5.6% respectively. Situation in the sectors mixed Flat carbon steel The weak economic climate also weighed on the international steel markets. Based on provisional estimates, global demand for finished steel increased by only 2% to roughly 1.42 billion metric tons in Global crude steel output rose by 1% to 1.55 billion metric tons; in the 4th quarter 2012 output showed a year-on-year increase of 3%. The smaller increase in global steel consumption was mainly due to slower growth in China, where demand climbed by only 3% to 654 million tons in EU steel demand fell by 9% to 143 million tons. In Germany demand decreased by 7% to 38.4 million tons. German crude steel production at 42.7 million tons was 4% down from the albeit very high prior-year level. US finished steel demand increased by 8% to 96 million tons, mainly due to buoyant auto industry activity.

9 Interim Management Report 1st Quarter 2012/2013 Group review 07 Demand on the European flat steel market showed a sharp decline in Above all in the southern European countries demand from key customer sectors such as the automotive and construction industries slumped dramatically. Strongly export-oriented customers in Germany too recently reported lower utilization levels. The fall in demand was exacerbated by a large inventory drawdown. In the final quarter 2012 flat steel use in the EU is expected to show a further year-onyear decline. However, the economic cycle may have reached its low point. With imports remaining moderate, European flat steel suppliers recently recorded a slight recovery in orders. Prices on the European spot markets have also bottomed out. However the moderate upturn towards the end of the reporting period was mainly due to a significant rise in iron ore prices. After previously dropping sharply, prices in North America also recovered slightly in the course of the 4th quarter Alongside the automotive and energy industries, the housing construction sector recently generated positive impetus again for steel demand. Automotive Global automobile production increased by an estimated 6% to just under 79 million cars and light trucks in However there were very marked regional differences. In the USA, strong pent-up demand as a result of the aging vehicle fleet led to a 16% increase in production to 9.8 million vehicles. Sales in the USA climbed 13% to 14.4 million vehicles; 4th-quarter sales showed a year-on-year rise of 10% to 3.6 million units. China produced an estimated 17.3 million vehicles in 2012, 8% more than a year before. After the disaster-related slump the year before, Japan increased its production by 19% to 9.4 million vehicles. In western Europe an estimated 14.0 million cars and light trucks rolled off the production lines in 2012, almost 8% fewer than the year before. Particularly in southern Europe sales declined sharply as a result of the debt crisis. New registrations in the EU decreased by 8% to 12.1 million cars altogether, and by 10% to 2.7 million units in the 4th quarter The German car market performed better by comparison. For the full year new registrations were down by 3% at 3.1 million vehicles, in the 4th quarter 2012 they slipped 6% to 0.7 million vehicles. Output remained virtually unchanged; however, due to statistical changes a 7% decline in production to 5.7 million cars and light trucks will be reported. Machinery Due to weaker capital spending in many countries the sector was unable to sustain the prior year s very high rate of expansion in Growth in machinery production slowed to 6% in the USA and to 12% in China. Production in Japan showed a slight decline of 1%. German machinery manufacturers increased their output by 1% in 2012, but only thanks to a high order backlog from the prior year. New orders from the domestic market fell by 8%, while foreign orders remained stable in the course of the year. In the 4th quarter 2012 the order situation in the German machinery sector brightened. Overall orders increased by 3% year-on-year. Demand for elevators and escalators in 2012 was down from the year before. Construction The construction sector in the industrialized countries was mainly weak in While the US property market stabilized at a low level in the course of the year, there were further declines in the countries of southern Europe. The emerging countries China and India achieved higher growth in construction output, with increases of 7.9% and 6.8% respectively. The German construction industry was in robust shape in Housing construction in particular showed strong growth, benefiting from low mortgage rates and from the uncertainties emanating from the financial markets. German construction output increased by an estimated 2% in 2012.

10 Interim Management Report 1st Quarter 2012/2013 Group review 08 ThyssenKrupp: Orders stable, sales lower Against the background of the continuing difficult economic situation, ThyssenKrupp delivered a robust performance overall in the 2012/2013. Order intake was down only slightly year-on-year while sales showed a steeper decline mainly for cyclical reasons but also on account of disposals. CONTINUING OPERATIONS IN FIGURES Change in % Order intake million 9,677 9,642 0 Sales million 9,596 8,837 (8) EBITDA million (32) EBIT million (14) EBIT margin % Adjusted EBIT million (38) Adjusted EBIT margin % EBT million (35) Adjusted EBT million (65) Income/(loss) net of taxes (attributable to ThyssenKrupp AG's shareholders) million (29) Basic earnings per share (25) Operating cash flow million (1,327) Free cash flow million (1,330) Employees (Dec. 31) 155, ,860 (3) In the first three months of the fiscal year the continuing operations achieved new orders of 9.6 billion, roughly level with the year before. Growth was achieved in Plant Technology and Elevator Technology, with both reporting record orders. However, orders for industrial components and materials were down, reflecting reduced demand and disposals. Lower volumes and above all lower prices additionally weighed on steel business in Europe and global materials sales. Sales from continuing operations decreased 8% year-on-year to 8.8 billion. Growth achieved at Elevator Technology and Plant Technology could not offset weaker sales in the other business areas. Including the discontinued operations Steel Americas and Stainless Global, order intake in the Group in the first three months 2012/2013 slipped 1% to 11.2 billion, sales were 7% lower at 10.4 billion. Adjusted EBIT 229 million In a difficult economic environment adjusted EBIT from continuing operations decreased to 229 million from 372 million a year earlier. Nevertheless all business areas reported positive earnings, with the largest contribution coming from the Elevator Technology business area.

11 Interim Management Report 1st Quarter 2012/2013 Group review 09 Adjusted EBIT from continuing operations was lower year-on-year. In the more cyclical materials operations this was chiefly the result of weaker volumes and in particular weaker prices. In the capital goods businesses, profits dipped temporarily at Plant Technology and Marine Systems, and were lower year-on-year at Components Technology as a result of disposals and reduced demand. However, Elevator Technology reported significantly higher earnings and an improved margin of 11%. Overall the capital goods businesses delivered a significantly larger contribution to adjusted EBIT ( 351 million) than the materials businesses ( 70 million). By contrast adjusted EBIT from Corporate including consolidation items came to (192) million. Adjusted EBIT margin from continuing operations decreased year-on-year from 3.9% to 2.6%. Including Stainless Global and Steel Americas the Group s adjusted EBIT increased from 25 million to 74 million, and adjusted EBIT margin from 0.2% to 0.7%. Special items with negligible effect on EBIT from continuing operations In the 2012/2013 net positive special items contributed 10 million to EBIT from continuing operations. Special items were mainly reported at Corporate for severance payments to former Executive Board members. They also include restructuring expenses, in particular at the Materials Services business area. SPECIAL ITEMS FROM CONTINUING OPERATIONS IN MILLION Change in % EBIT (14) +/- Disposal losses/gains (52) (5) 90 + Restructuring expense (59) + Impairment 155 (1) -- + Other non-operating expense 9 6 (33) - Other non-operating income (28) (3) 89 Adjusted EBIT (38) EBT from continuing operations lower year-on-year In the reporting period the continuing operations achieved EBIT of 66 million, compared with 102 million a year earlier. All operating business areas generated positive earnings. The materials operations achieved unconsolidated earnings of 37 million, the capital goods businesses 275 million. Elevator Technology and Marine Systems significantly increased their earnings contributions year-on-year. The Corporate area reported a loss before taxes of 163 million. Including the discontinued operations the Group as a whole reports EBT of 40 million (prior year: (514) million). Net income for the full Group came to 30 million, up 510 million from the prior year.

12 Interim Management Report 1st Quarter 2012/2013 Group review 10 MILLION Adjusted EBIT Group Special items (382) EBIT - Group (357) Depreciation of capitalized borrowing costs eliminated in EBIT (11) (3) 73 + Interest income (59) - Interest expense (459) (284) 38 - Items of interest income, net assigned to EBIT based on economic classification (1) (26) -- + Items of interest expense, net assigned to EBIT based on economic classification 0 19 EBT - Group (514) EBT Steel Americas (68) - EBT Stainless Global 331 (64) -- EBT from continuing operations (35) Change in % Analysis of the statement of income At 8,837 million, net sales from continuing operations in the 2012/2013 were 759 million or 8% lower than in the corresponding prior-year period. The cost of sales from continuing operations decreased by altogether 658 million or 8% in parallel with the fall in sales, mainly reflecting a sales-related reduction in materials expense. Gross profit from continuing operations decreased to 1,386 million, while gross margin remained unchanged at 16%. The 10 million rise in research and development cost from continuing operations was chiefly attributable to the Plant Technology and Steel Europe business areas. Selling expenses from continuing operations decreased by 5 million, mainly reflecting lower expenses for sales-related freight and insurance charges. General and administrative expenses from continuing operations fell by 10 million, primarily due to lower restructuring expenses. The 107 million reduction in other expenses from continuing operations was mainly due to the absence of the goodwill impairment charges recognized in the prior-year quarter in connection with the sale of the civil operations of Blohm + Voss. Other gains and losses attributable to continuing operations were 60 million lower than a year earlier. This mainly reflects the absence of the gains on the disposal of the Xervon group and the Brazilian Automotive Systems operations recognized in the 2011/2012. The 194 million reduction in financing income was caused primarily by exchange rate effects in connection with finance transactions. The 203 million lower financing expense from continuing operations mainly resulted from currency losses in connection with finance transactions. Tax expense from continuing operations of 33 million resulted in an effective tax charge of 50% in the reporting period, level with a year earlier. After taking into account income taxes, the profit from continuing operations came to 33 million. The after-tax loss from discontinued operations decreased by a substantial 531 million to 3 million. This is mainly the result of a 265 million impairment charge for Stainless Global recognized in the prior-year quarter set against a preliminary profit of 146 million from the disposal of the stainless steel business to Outokumpu provisionally recognized in the reporting period pending completion of the purchase price allocation in connection with the 29.9% share in Outokumpu.

13 Interim Management Report 1st Quarter 2012/2013 Group review 11 Including the after-tax loss from discontinued operations, net income of 30 million was posted in the reporting period, compared with a net loss of 480 million in the prior year. Earnings per share based on the net income/loss attributable to the shareholders of ThyssenKrupp AG increased year-onyear by 0.96 to income of Earnings per share from continuing operations declined by 0.02 to Net financial debt reduced We have made progress with our goal of improving our cash flow profile and reducing net financial debt. The Group s free cash flow improved year-on-year by around 2.4 billion to 361 million. With free cash flow from continuing operations virtually breaking even before positive disposal effects, the costs from discontinued operations were easily outweighed by cash inflows from the successful closing of the stainless steel transaction. The Group s net financial debt was 5,205 million at December 31, 2012 and was therefore lower both year-on-year (December 31, 2011: 5,937 million) and quarter-on-quarter (September 30, 2012: 5,800 million). Taking into account cash, cash equivalents and committed undrawn credit lines totaling 7.4 billion and our balanced maturity structure, ThyssenKrupp is solidly financed. At December 31, 2012 our gearing was 122.9%. ThyssenKrupp invested a total of 434 million in the first three months 2012/2013, 22% less than a year earlier. 432 million was spent on property, plant and equipment and intangible assets, and 2 million on the acquisition of businesses, shareholdings and other financial assets. For example the Elevator Technology business area acquired the US service and modernization activities of AMCO Elevators. Components Technology invested in building its own crankshaft production plant for the truck sector in China. Excluding the major projects in Brazil and the USA, capital expenditures came to 322 million, compared with 405 million in the prior year. Current issuer ratings We have been rated by Moody s and Standard & Poor s since 2001 and by Fitch since In January 2013 Moody s lowered ThyssenKrupp s rating from Baa3 to Ba1. At Standard & Poor s and Moody s our rating is therefore below investment grade. However, Fitch confirmed our investment grade rating with a negative outlook. A negative outlook means that the rating agency monitors the rating more closely and then reviews it, normally within a period of months. As a result of the downgrading of our rating the Group s contractually agreed financing costs, mainly in connection with the 2009/2014 bond, will increase by a low two-digit million euro amount from June Long-term rating Short-term rating Standard & Poor's BB B Negative Moody's Ba1 Not prime Negative Fitch BBB- F3 Negative Outlook

14 Interim Management Report 1st Quarter 2012/2013 Business area review 12 Business area review Components Technology COMPONENTS TECHNOLOGY IN FIGURES Change in % Order intake million 1,778 1,324 (26) Sales million 1,753 1,345 (23) EBIT million (75) EBIT margin % Adjusted EBIT million (59) Adjusted EBIT margin % Employees (Dec. 31) 30,936 27,789 (10) The business area supplies a range of high-tech components for general engineering, construction equipment and wind turbines. In the auto sector our activities are focused on crankshafts, camshafts, steering systems, dampers, springs, stabilizers and the assembly of axle modules. Order intake and sales lower At Components Technology the disposals of the previous fiscal year resulted in a structurally lower volume of business in the 2012/2013. Order intake was 26% down from the prior-year quarter at 1.3 billion. Excluding the disposals, order intake was 9% lower. The economic slowdown, particularly in western Europe, impacted demand for auto and truck components. The midsize and premium car segments were also affected. By contrast in the USA, Brazil and China the automotive business showed a positive performance. From the beginning of the new fiscal year the heavy truck market declined sharply in particular in Europe and the USA, and also in Brazil and China there was no noticeable recovery in demand. In the wind energy sector the uncertain investment climate, caused in part by the debate surrounding the expiry of subsidy programs in the USA, resulted in project deferrals. In China further delays in connecting existing wind turbines to the grid led to weakened demand and orders for component supplies. In western Europe and China slower demand for infrastructure projects also impacted sales of building machinery components. In line with the trend in orders, sales decreased year-on-year by 23% to 1.3 billion on account of the disposals. Excluding the disposals, sales were 6% lower. Earnings down At 43 million, Components Technology s EBIT in the reporting period was down from the high prior-year figure, which included positive special items relating to the proceeds from the sale of the chassis component manufacturer ThyssenKrupp Automotive Systems Industrial do Brasil and the once-only savings for healthcare at the US foundry Waupaca. Adjusted EBIT was likewise lower year-on-year at 42 million. This reflected the absence of Waupaca s operating profit, the slowdown in the western European market for car and heavy truck components, and the ramp-up of the new plants in China and India. Added to this was continued weak demand in the wind energy and infrastructure sectors. Adjusted EBIT margin fell to 3.1%.

15 Interim Management Report 1st Quarter 2012/2013 Business area review 13 Elevator Technology ELEVATOR TECHNOLOGY IN FIGURES Change in % Order intake million 1,466 1, Sales million 1,348 1, EBIT million EBIT margin % Adjusted EBIT million Adjusted EBIT margin % Employees (Dec. 31) 46,581 47,897 3 The Elevator Technology business area supplies passenger and freight elevators, escalators and moving walks, passenger boarding bridges, stair and platform lifts as well as service for the entire product range. Over 900 locations worldwide form a tight-knit sales and service network that keeps us close to customers. Two-digit growth in orders and sales Elevator Technology continued its successful business performance in the 2012/2013. Both orders and sales showed significant growth. Order intake was 10% higher year-on-year at 1.6 billion. In particular on the Chinese market for new installations and on the North and South American markets, order intake continued to show a very positive trend. The level of business in Europe was steady overall, with difficult conditions on some southern European markets, such as Spain, being offset by positive trends on other markets. Sales in the 2012/2013 were 14% higher at 1.5 billion. This pleasing growth was based on very positive business with new installations on the Asian markets. Some sizable sales increases were also achieved in North and South America. Overall volumes in both the new installations and the service and modernization businesses grew continuously. In the service business the number of maintenance units under contract increased in all key regions. Adjusted EBIT 169 million Elevator Technology achieved EBIT of 171 million in the 2012/2013. Adjusted EBIT came to 169 million and was therefore higher than in the of the prior year. This improvement resulted from both increased sales and positive effects from the restructuring measures initiated in the last fiscal year. Adjusted EBIT margin was increased to 11.0%. Growth and investment program continued To strengthen Elevator Technology s competitiveness even further, we continued the growth and investment program in the reporting period. The elevator plant in Neuhausen near Stuttgart is being expanded into a state-of-the-art technology park. Central to this will be a development center for high-speed elevators. In addition a new technology and customer center is to be built.

16 Interim Management Report 1st Quarter 2012/2013 Business area review 14 Plant Technology PLANT TECHNOLOGY IN FIGURES Change in % Order intake million 871 1, Sales million 943 1,001 6 EBIT million (12) EBIT margin % Adjusted EBIT million (12) Adjusted EBIT margin % Employees (Dec. 31) 13,786 14,359 4 The Plant Technology business area is a leading international provider of specialized engineering and construction services with strong innovative capabilities. The product portfolio includes chemical plants and refineries, equipment for the cement industry, innovative solutions for the mining and extraction of raw materials, and production systems for the auto industry. The business area s equipment and processes open up new possibilities for environmental protection and sustainability. At January 01, 2013 the Plant Technology and Marine Systems business areas were combined into the new Industrial Solutions business area. More information on this is provided in the section Strategic development of the Group. Steep rise in orders, continued strong sales Plant Technology delivered an outstanding performance particularly in chemical plant construction. In the first reporting three months new orders with a total value of 1.8 billion were won, with the result that order intake more than doubled from the prior-year figure of 871 million. Due to the low price of gas in North America, demand for fertilizer plants is currently high. As a result ThyssenKrupp s plant technology business succeeded in winning a mega-order in the USA for two fertilizer plants worth 1 billion. The low price of gas will continue to open up opportunities for further chemical plant construction projects in the North America over the long term. Demand for production systems for the automotive industry and products for the mining and minerals sector was down slightly from the high prior-year level. Although the market for cement plants is relatively stable overall, project deferrals have recently been observed. In the 2012/2013 Plant Technology s sales were 6% higher than a year earlier at 1.0 billion, confirming the stable trend. The high order backlog of 7.4 billion at December 31, 2012 continues to secure a good workload. EBIT only slightly down from high prior-year level With EBIT of 110 million in the 2012/2013, the high level of the prior year was not quite reached due to billing technicalities. EBIT margin slipped to 11.0%. Since there were no special items, adjusted EBIT and adjusted EBIT margin were the same.

17 Interim Management Report 1st Quarter 2012/2013 Business area review 15 Marine Systems MARINE SYSTEMS IN FIGURES Change in % Order intake million (20) Sales million (17) EBIT million (116) EBIT margin % (31.7) 10.2 Adjusted EBIT million (23) Adjusted EBIT margin % Employees (Dec. 31) 5,301 3,817 (28) Marine Systems is focused exclusively on naval shipbuilding. The business area s core activities include the development, construction and refit of submarines and naval surface vessels as well as extensive associated services. After the completion of the sale of the civil shipbuilding operations in the prior year, work was started at the beginning of the reporting year on further streamlining the organization of the naval shipbuilding operations and preparing the unit for incorporation into the new Industrial Solutions business area. More information on this is provided in the section Strategic development of the Group. Order intake and sales holding up well The markets of Marine Systems continue to perform positively; there are a number of promising projects worldwide. At December 31, 2012 Marine Systems order backlog reached a record level of 9 billion. In the 2012/2013 order intake amounted to 178 million. Major orders received included the modernization of two type U206 submarines acquired by the Republic of Colombia from the German navy, and orders from the Swedish navy. On an adjusted basis order intake was therefore higher year-on-year; the 222 million reported in the comparable prior-year quarter included orders of 94 million in civil shipbuilding. Sales came to 305 million. The prior-year figure of 366 million likewise contained the sales of the since sold civil shipbuilding operations in the amount of 89 million. Earnings at good prior-year level Marine Systems EBIT at 31 million and adjusted EBIT at 30 million were level with the prior-year quarter minus the civil shipbuilding operations. Adjusted EBIT margin was 9.8%, equaling the good prior-year level (without civil shipbuilding). German naval shipbuilding operations combined To further optimize our organizational structure, we began combining our naval shipbuilding sites in Germany at the start of the current fiscal year. This process was completed at the beginning of As a full-range supplier we provide customers with naval vessels from a single source as well as extensive services. Our naval shipbuilding sites in Germany are now combined under the name ThyssenKrupp Marine Systems GmbH.

18 Interim Management Report 1st Quarter 2012/2013 Business area review 16 Materials Services MATERIALS SERVICES IN FIGURES Change in % Order intake million 3,201 2,765 (14) Sales million 3,145 2,815 (10) EBIT million (10) EBIT margin % Adjusted EBIT million Adjusted EBIT margin % Employees (Dec. 31) 27,910 26,280 (6) With 500 locations in more than 30 countries the Materials Services business area specializes in materials distribution including technical services. Further decline in demand continued price and margin pressure Materials Services achieved order intake of almost 2.8 billion in the 2012/2013, down 14% from the corresponding prior-year period. Sales were 10% lower at 2.8 billion; on a like-for-like basis, excluding the Xervon group from the prior-year figures, sales fell by 7%. In the warehousing business sales of carbon steel, stainless steel, tubes and nonferrous metals decreased by 1.5% to just over 1.2 million tons. The decline in workloads and demand in the main customer industries continued, the economic slowdown was increasingly noticeable. Warehouse sales of metals dipped slightly year-on-year, while demand fell more steeply above all towards the end of the quarter. This was the case in all markets and regions with the exception of North America. Price and margin pressure was universally high. This also affected our international direct-to-customer and project business. Intense competition and increasing order deferrals were the order of the day. However, our materials and service operations for the aerospace industry achieved further growth. Plastics sales mirrored the performance of metals. Demand for metallurgical raw materials was impacted by numerous production cutbacks and stoppages in the steel industry. Thanks to several special projects in the, capacity utilization and sales of our steel mill services were almost maintained at the prior-year level. EBIT stable at prior-year level Despite the significant slide in sales, adjusted EBIT was level with the year-earlier period at 40 million. Cost reduction measures at all levels, particularly in logistics and administration, contributed to this. After special items, EBIT was down from the year before at 36 million; as a result EBIT margin in the traditionally weaker remained at 1.3%; adjusted EBIT margin came to 1.4%.

19 Interim Management Report 1st Quarter 2012/2013 Business area review 17 Steel Europe STEEL EUROPE IN FIGURES Change in % Order intake million 2,705 2,403 (11) Sales million 2,530 2,253 (11) EBIT million (72) EBIT margin % Adjusted EBIT million (71) Adjusted EBIT margin % Employees (Dec. 31) 28,273 27,629 (2) The Steel Europe business area brings together the Group s flat carbon steel activities, mainly in the European market. Premium flat products are supplied to customers in the auto industry and other steel-using sectors. The range also includes products for attractive specialist markets such as the packaging industry. Orders and sales lower on account of selling prices The persistent market weakness above all in the euro zone continued to impact the performance of the Steel Europe business area in the 2012/2013. Order intake was down 11% year-on-year at 2.4 billion. Since order volumes increased slightly, the decline was due to the lower prices at which these orders were booked. Sales were likewise 11% lower at 2.3 billion. This too primarily reflects the softening of average selling prices against the prior year. However, compared with previous months prices remained largely stable. Overall shipments were roughly equal with the year before. Lower sales to the automotive industry and its suppliers, the transformer sector and other industrial customers were offset by increased deliveries to the packaging and tubes industries. Shipments to distributors and steel service centers were also higher year-on-year. Production cutbacks continue Crude steel production including supplies from Hüttenwerke Krupp Mannesmann at 2.6 million tons was 7% lower than in the prior-year quarter when blast furnace 9 was still in operation. With demand remaining weak, it has not yet been necessary to restart the newly relined unit. Lower operating levels also remained necessary in the downstream rolling and coating operations. Short time working continued at numerous plants. EBIT down sharply EBIT fell to 29 million and EBIT margin to 1.3% in the reporting period. The main reason for this drop in earnings was the persistent market weakness in Europe with selling prices down from the prior year. The Groupwide improvement program impact was again only partly able to offset the negative cost and market effects. Special items had virtually no effect on earnings: Adjusted EBIT was 30 million, adjusted EBIT margin 1.3%.

20 Interim Management Report 1st Quarter 2012/2013 Business area review 18 Corporate at ThyssenKrupp AG Corporate comprises the Group s head office including management of the business areas. It also includes the business services activities in the areas of finance, communications, IT and human resources, as well as non-operating real estate and inactive companies. Sales of services by Corporate companies to Group companies in the 2012/2013 came to 55 million, up from 35 million a year earlier. EBIT amounted to (112) million, compared with (99) million in the prior-year period. Adjusted EBIT came to (97) million, compared with (101) the year before. Steel Americas (discontinued operation) STEEL AMERICAS IN FIGURES Change in % Order intake* million (4) Sales* million (2) EBIT million (288) (87) 70 EBIT margin % Adjusted EBIT million (288) (87) 70 Adjusted EBIT margin % Employees (Dec. 31) 4,081 3,990 (2) * including internal orders/sales within the Group With its steelmaking and processing plants in Brazil and the USA, the Steel Americas business area is tapping into the North American market for premium flat steel products. As part of the strategic development program, ThyssenKrupp is to dispose of these plants. More information on this is provided in the section Strategic development of the Group. At September 30, 2012 Steel Americas met the requirements for classification as a discontinued operation under IFRS. Order intake and sales lower due to selling prices In the 2012/2013 the Steel Americas business area s order intake was 4% down from a year earlier at 560 million. In a difficult business environment sales at 488 million were likewise 2% lower year-on-year as a result of selling prices, while production and shipments showed a slight overall increase. The steel mill in Brazil produced around 0.9 million tons of slabs in the 2012/2013 which it supplied to the US processing plant, Steel Europe and customers in Brazil and North America. Altogether the business area sold 0.6 million tons of flat steel to North American customers and 0.1 million tons of slabs on the Brazilian and North American markets, and supplied 0.2 million tons of slabs to Steel Europe. Steel Americas made further progress with customer certification. The certification processes were rigorously expedited particularly in the automotive industry and almost completed in the pipe & tube sector. EBIT improved from year earlier EBIT improved in the reporting period by 201 million to (87) million, there were no special items. The improvement resulted from progress made on the operational side in particular with cost optimization, the amount and composition of reducing agents consumed, and an increased focus on customer segments with stronger margin potential. Also, the classification as a discontinued operation resulted in the absence of depreciation expenses for non-current assets, which in the first three months 2012/2013 would have come to 103 million; these were reported in the earnings of the prior-year quarter in the amount of 83 million. The main reason for the continued negative earnings was the difficult business environment on the North American market with an unsatisfactory price level above all in service center business, which is particularly important for the startup. In addition the inefficient utilization of capacities in the prevailing climate also weighed on earnings.