Thyssenkrupp Ag · XETR:TKA
Thyssenkrupp — Morgan Stanley Field Trip 2007
100 slides from Thyssenkrupp's conference presentation, Oct 5, 2007
Slide 1: ThyssenKrupp
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 0 ThyssenKrupp
Slide 2: Agenda
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 1 Agenda { Group Overview and Strategy Ulrich Middelmann Vice Chairman of the Executive Board and CFO of ThyssenKrupp AG { ThyssenKrupp Steel Karl-Ulrich Köhler CEO ThyssenKrupp Steel AG and Executive Board Member of ThyssenKrupp
Slide 3: What the ThyssenKrupp Group is About
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 2 What the ThyssenKrupp Group is About { Strong commitment to sustainable profit and cash generation as well as value enhancement across business cycles { Value creation for shareholders not only by profitable growth initiatives,
Slide 4: ThyssenKrupp Continues the Delta EVA Story
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 3 ThyssenKrupp Continues the Delta EVA® Story ROCE and TKVA (incl. major nonrecurring items) % / million € ROCE TKVA Δ TKVA 23.4% 1,510 9M: 997 1,930 17.9% Δ14% 513 572 Δ 425 14.4% 12.0% Δ 924 WACC: 9% 7.2% 7.0% incl. major Δ 62 n
Slide 5: EBT Track Record
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 4 EBT Track Record EBT (as reported) million € 3,200 CAGR: 9M: 2,853 58.0% p.a. 2,623 619 1,219 1,677 1,477 806 572 800 773 421 1,062 425 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 incl. major nonrecurring items ThyssenKrupp
Slide 6: EPS Track Record
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 5 EPS Track Record Earnings per share (as reported) € CAGR: 66.7% p.a. 3.24 9M: 3.25 1.04 1.49 2.08 1.81 0.87 0.45 1.09 0.84 0.42 1.31 0.49 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 incl. major nonrecurring items ThyssenKrup
Slide 7: Track Record of Dividend Payment
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 6 7 Track Record of Dividend Payment Dividend payment and payout ratio €/% 1.00 0.80* 0.60 0.50 0.40 ≥30% 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 DPS (€) Payout ratio * incl. special dividend of €0.10 ThyssenKrupp
Slide 8: ThyssenKrupp Management Approach
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 7 ThyssenKrupp Management Approach Success Factors for Industrial Top Positions Value-based management system Product and Efficiency process innovation improvement culture Industrial top position Customer Portfolio orientation opt
Slide 9: Value-Based Management: Focus on Value
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 8 ThyssenKrupp Value-Based Management: Focus on Value TKVA Value Driver Tree High share of deliveries Quantities to “valuable“ customers Sales Customer penetration Selling prices (service, cross-selling) EBIT Service initiative/ i
Slide 10: Value-Based Management: Focus on Cash Flow
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 9 ThyssenKrupp Value-Based Management: Focus on Cash Flow Control Levers for the Cash Flow Income/loss before income taxes + Depreciation/ Cash flow (gross) amortization Cash flow (net) - Income taxes w/o +/- Δ Accrued pension and
Slide 11: Corporate Culture for Continuous Performance Enhancement
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 10 A Corporate Culture for Continuous ThyssenKrupp Performance Enhancement is Established best In FY 2005/06 almost 2,000* new projects initiated 7.000 7,000 6.500 6.000 6,000 All in all 6,798* 5.500 projects started in 5,000 5.00
Slide 12: Project Landscape in Initiatives
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 11 Project Landscape in Initiatives ThyssenKrupp Increase in share of purchasing projects in last fiscal year best Operating efficiency, 43% Corporate organization, 3% Knowledge management, 3% Employees, 4% Performance quality, 6%
Slide 13: Project Potentials
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 12 Project Potentials ThyssenKrupp EBIT and Capital employed plans clearly surpassed best EBIT potential in million € ~ 400 Plan > 700 > 600 Act > 500 ~ 600 > 600 > 600 Plan 03/04 Act 03/04 Plan 04/05 Act 04/05 Plan 05/06 Act 05/0
Slide 14: Movements in Sales and Capital Employed
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 13 Movements in Sales and Capital Employed Indicator for Efficiency Improvements Sales in €bn Capital Employed 50 21.002 in €bn 22 45 19.530 20 18.870 18.388 40 17.056 18 35 16 30 14 36.928 33.487 37.303 42.927 47.125 25 12 20 10
Slide 15: Portfolio Management: Balance of Value and Cash providers
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 14 Portfolio Management: Balance of Value and Cash providers Balanced business portfolio ThyssenKrupp Value Added II III Value driver- Value driver- Cash consumer Cash provider Watchlist for Growth Growth 0 I IV Underperformer- Un
Slide 16: Value Drivers and Cash Providers
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 15 Value Drivers and Cash Providers Development from FY 2004/05 to FY 2005/06 Size of disks reflects capital employed ThyssenKrupp
Slide 17: Active Portfolio Management at ThyssenKrupp
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 16 Active Portfolio Management at ThyssenKrupp Significant change in portfolio since the merger (as at September 2007) Disposals Acquisitions (Total: €9.1 billion) (Total: €8.2 billion) Steel 2,005 455 Stainless 95 235 Automotive*
Slide 18: Portfolio Optimizations in 2006/2007
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 17 24 Portfolio Optimizations in 2006/2007 Corporate Elevator Commercial Real Estate Portfolio (DE) Disposal Sele & Colla (IT) Acquisition Sabia (IT) Acquisition Steel Elevator Sales & Services (US) Acquisition Auto Chassis do Bra
Slide 19: Significant Leading Market Positions (I)
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 18 Significant Leading Market Positions (I) Steel Stainless Flat Carbon Steel (hot-rolled) Top 2 (Europe) Stainless Flat Top 1 Tinplate Top 3 (Europe) Nickel Alloys Top 2 Electrical Steel Top 2 Titanium Top 1 (Europe) Stainless Pr
Slide 20: Significant Leading Market Positions (II)
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 19 Significant Leading Market Positions (II) Technologies Elevator Uhde Top 1-3 Polysius Top 1-2 Elevator (Elevator/Escalator) Top 3 Fördertechnik Top 1 Marine Systems Top 1 Rothe Erde Top 1 Services Berco Top 1 Camshafts Top 1 Ma
Slide 21: Group Targets 2009/10 and 2011/12
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 20 Group Targets 2009/10 and 2011/12 Sales, EBT and EPS (as reported) billion € / million € / € Sales: >50 60 65 Target 4,500-5,000 4,000 3,200* EPS 6.00-6.60 2,623 9M: EPS 2,853 5.30 1,677 1,477 tax rate: 800 33% 421 2001/02 2002
Slide 22: Key Drivers for Investment Strategy
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 21 Key Drivers for Investment Strategy International expansion of our focused business company concept Transfer of the successful European premium strategy Steel to the Americas growth market Build on and expand global leading mar
Slide 23: ThyssenKrupp Accelerates Growth by Investment Program
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 22 ThyssenKrupp Accelerates Growth by Investment Program Investments Comments 2005/06-2009/10 Greenfield NAFTA, Greenfield Brazil, capacity increase Duisburg, Steel €8.9 bn substance-preserving and value-based investments, acquisi
Slide 24: Investment Grade Rating with Every Rating Agency is Key
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 23 Investment Grade Rating with Every Rating Agency is Key The underlying principle for all our growth initiatives High degree of flexibility due to { Cash (€2.7 bn as of Jun 30, 2007) { Available credit lines (€4.3 bn as of Sep 3
Slide 25: Wrap-Up: ThyssenKrupp Continues the Delta EVA Story
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 24 Wrap-Up: ThyssenKrupp Continues the Delta EVA® Story ROCE and TKVA (incl. major nonrecurring items) % / million € ROCE TKVA Target 3,000 2,500 9M: 1,930 1,510 23.4% 21.4% 22% 997 17.9% 572 14.4% 12.0% WACC: 9% 7.0% 7.2% incl. m
Slide 26: Agenda
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 1 Agenda { Group Overview and Strategy Ulrich Middelmann Vice Chairman of the Executive Board and CFO of ThyssenKrupp AG { ThyssenKrupp Steel Karl-Ulrich Köhler CEO ThyssenKrupp Steel AG and Executive Board Member of ThyssenKrupp
Slide 27: Track Record ThyssenKrupp Steel
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 2 Track Record ThyssenKrupp Steel 2001/021) 2002/031) 2003/041) 2004/052) 2005/063) 2006/073) 9M Sales €m 6,861 7,448 8,387 9,568 12,087 9,920 Crude steel prod. 1,000 t 13,145 13,557 13,978 13,826 13,837 10,795 EBT €m 15 243 608 1
Slide 28: EBT Track Record ThyssenKrupp Steel
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 3 EBT Track Record ThyssenKrupp Steel EBT (as reported) million € 1,406 9M: 1,298 1,094 327 428*) 386 608 471 424 243 399 15 269 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 *) incl. €76 m impairment charges at Metal Forming Th
Slide 29: Delta EVA Track Record ThyssenKrupp Steel
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 4 Delta EVA® Track Record ThyssenKrupp Steel ROCE and TKVA (incl. major nonrecurring items) % / million € ROCE TKVA Δ TKVA 876 27.9% 600 23.2% 9M: 19.6% Δ 276 907*) 164 Δ 436 13.0% WACC 7.0% Δ 326 Δ 255 (162) 2.6% (417) 2001/02 20
Slide 30: Our Current Focus of Business is Europe
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 5 Our Current Focus of Business is Europe … Europe Sweden North-East Asia Germany Changchun Poland France Italy Wuhan Dalian USA Spain Turkey Nashik Mexico Brazil Steel mill Coating Tailored blank production Strategic Alliance Rol
Slide 31: Almost 90% of Sales Generated in European Market
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 6 … with Almost 90% of Sales Generated in Our European Market Sales by Region FY 2005/06 *) in % Germany 52 87% 6 Other Europe of Sales w/o Germany NAFTA 54 33 Asia Europe Sweden North-East Asia Other Germany Poland Changchun Fran
Slide 32: Premium Product Portfolio Generates Above-Average Revenues
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 7 Premium Product Portfolio Generates Above-Average Revenues Product Portfolio Steel FY 2005/06*) in % Revenue per Tonne €/t Tailored blanks 4% 900 ThyssenKrupp 3% Construction elements Steel**) 13% 800 Steel service 13% Tinplate
Slide 33: Long Term Customer Relations Establish Lower Volatility
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 8 Long Term Customer Relations Establish Lower Volatility Sales by Maturity FY 2005/06 in % Price Index Flat Steel Index (Q3 1997 = 100) Spot 200 Multi-year ThyssenKrupp 10 15 180 Steel Quarterly 22 160 140 11 42 Annual 120 Half-y
Slide 34: Strong Market Positions and Leading Profitability
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 9 Strong Market Positions and Leading Profitability Market Positions by production 2005 EBITDA per Tonne €/t { Total Flat Carbon Steel # 2 Europe 200 ThyssenKrupp { Tailored Blanks # 1 World Steel**) 150 { Tinplate # 3 Europe 100
Slide 35: Strategic Guidelines ThyssenKrupp Steel
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 10 Strategic Guidelines ThyssenKrupp Steel Sustainable value growth Efficiency Technology Profitable improvement leadership growth Focus on attractive markets for premium flat steel products ThyssenKrupp
Slide 36: Earnings Improvements from Efficiency Program TK best
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 11 Further Significant Earnings Improvements Expected from Well Established Efficieny Enhancement Program “TK best“ Project landscape over time number of projects Highlights Completed 678 In process 568 { Since start of ThyssenKru
Slide 37: Innovative High-End-Steel X-IP
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 12 Innovative High-End-Steel X-IP® Leadership in technology through competence in materials, once again from TKS { The new dimension in developing materials Possible reduction of steel { Highest strength and energy absorption thic
Slide 38: Leadership in technology as a factor of success
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 13 Leadership in technology as a factor of success Continuous Know-how from the basic material to the serial part Materials Innovative steels hot-rolled strip with and New materials cold performance Surfaces Surface coatin
Slide 39: Hot stamping as an integrated process chain
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 14 Hot stamping as an integrated process chain… Through leadership in technology being ahead in the market { Competence in production Hot stamped parts in { Being ahead with innovative coatings (x-tec®) VW Passat { Being ahead wit
Slide 40: Pioneer and Innovation Leader in Tailored Products
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 15 Pioneer and Innovation Leader in Tailored Products 2007: Strategic Milestones and Product Examples First to supply Tailored Blanks for hot forming 2006: Tailored Strips 2003: NSB® New Steel Body s es 1999: ces Thyssen Engineere
Slide 41: World Premiere IAA 2007: Tailored Blanks for Hot Forming
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 16 World Premiere IAA 2007: Tailored Blanks for Hot Forming Tailored Tubes® - T3 Tailored Strips® Tailored Blanks for Hot Forming ► Deformable base – Ultra-High-Strength head – Only one piece Engineered Blanks® B-pillar Tailored S
Slide 42: Premium Flat Carbon Steel Market with Above-Average Growth
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 17 Premium Flat Carbon Steel Market with Above-Average Growth Global Market Development: Market Forecasts up to 2015 Global Demand for Premium Products* million tons p.a. Premium Products Commodities +3.7% p.a. 751 RoW** +6.1% p.a
Slide 43: Investment Strategy Steel: The Transatlantic Concept
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 18 Investment Strategy Steel: The Transatlantic Concept Targeted major transatlantic production capacities Capacity in m metric tons p.a. Brazil NAFTA Europe ** “Herkules” Slabs 5 - 15 Greenfield Hot-rolled - 5.2* 17.5 ~3 m t ~2 m
Slide 44: Significant Net Imports Reflect Supply Shortage in NAFTA
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 19 Significant Net Imports Reflect Structural Supply Shortage in NAFTA Flat carbon steel imports, exports and trade balance Canada, U.S., Mexico Canada million t p.a. Canada 18 12 2.7 1.8 1.6 2.1 6 0.9 0.6 0.5 0 -6 2000 2001 2002
Slide 45: Southern U.S. Exhibits Growing Demand and Supply Shortage
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 20 Southern U.S. Exhibits Growing Demand and Local Supply Shortage Typical demand flat carbon steel vs. local capacity south central U.S. in m t p.a. Hot-rolled* million t p.a. Canada Outlook 2010 + Greenfield Steel North Central
Slide 46: Demanding Customers Drive Demand in Premium Products
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 21 Demanding Customers Drive Demand in Premium Products Example: Light-vehicle production/assemblies 2010 forecast NAFTA in m units Canada 31% 2% { Demanding customers from the 2.7 m 67% North Central automotive 7.6 m West 2% 0.
Slide 47: U.S. Greenfield Ideally Positioned
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 22 U.S. Greenfield Ideally Positioned to Leverage Favorable Market Trends and Competitive Advantages Market Trends { NAFTA characterized by high demand for premium flat carbon steels and significant net imports needs { Increasing
Slide 48: Transatlantic Strategy Leads to Premium Prices and Lowest Costs
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 23 Transatlantic Strategy Leads to Premium Prices and Lowest Costs USD/t Premium quality & technology leadership Ø Prices Greenfield TK Steel Ø Prices NAFTA Margin leadership ! Ø Production cost HRC p&o NAFTA Target Greenfield Cos
Slide 49: U.S. Greenfield Proceeding to Schedule and Budget
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 24 U.S. Greenfield Proceeding to Schedule and Budget May 2007 July 2007 ThyssenKrupp
Slide 50: Project Herkules Proceeding to Schedule and Budget
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 25 Project ”Herkules” Proceeding to Schedule and Budget ThyssenKrupp
Slide 51: ThyssenKrupp CSA Proceeding to Schedule and Budget
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 26 ThyssenKrupp CSA Proceeding to Schedule and Budget Hot Blast Stove 1 Blast Furnace 1 Blast Furnace 2 ThyssenKrupp
Slide 52: On Track to Meet Increasing Demand for Premium Products
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 27 Excellent Positioned and on Track to Meet Increasing Demand for Premium Products Steel Shipments ThyssenKrupp Steel million tons p.a. ~20 ~18 +6% p.a. 13.9 ~14 05/06 06/07F 09/10E 11/12E Shipments to Increase by more than 40% b
Slide 53: Growth Complemented by Cost Dilution and Flexibility
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 28 Growth Complemented by Significant Cost Dilution and Flexibility Transatlantic Forward Strategy Target Structure 2012: Slab Production and Consumption ~5 million t p.a. “Herkules” ~15 Greenfield ~15 ~2 ~2 m t ~3 m t ~4.5 ~1.5 G
Slide 54: Forward Strategy Creates Potential For Value Growth
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 29 Forward Strategy Creates Potential For Significant Value Growth Strong Organic Growth Based on Proven Business Model { Capex y Forward Strategy Europe Sustainable value growth y Forward Strategy NAFTA €5.7bn y Forward Strategy
Slide 55: Agenda
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 1 Agenda { Group Overview and Strategy Ulrich Middelmann Vice Chairman of the Executive Board and CFO of ThyssenKrupp AG { ThyssenKrupp Steel Karl-Ulrich Köhler CEO ThyssenKrupp Steel AG and Executive Board Member of ThyssenKrupp
Slide 56: ThyssenKrupp Stainless Business Fields
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 2 ThyssenKrupp Stainless Business Fields of ThyssenKrupp Stainless Group ThyssenKrupp Stainless Sales € 6.4 billion y EBT € 423 million y Free cash flow € 243 million y Employees 12,197 Stainless Steel Stainless Steel Stainless St
Slide 57: Top Positions in all Fields of Activities
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 3 ThyssenKrupp Stainless Top Positions in all Fields of Activities ThyssenKrupp Stainless Stainless Steel High Performance Alloys Processing Sales: €4.6 bn Sales: €1.1 bn Sales: €0,7 bn Employees: 9,716 Employees: 1,987 Employees:
Slide 58: Sustainable Results in spite of Market Fluctuations
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 4 ThyssenKrupp Stainless Sustainable Results in spite of Market Fluctuations Q1 - Q3 (Oct – Jun) *) *) *) 2001/2002 2002/2003 2003/2004 2004/2005 2005/2006 2006/2007 Sales €m 4,020 3,957 4,990 5,572 6,437 6,986 Total Shipments 1,0
Slide 59: Leading Positions in Stainless, Nickel Alloys and Titanium
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 5 ThyssenKrupp Stainless Leading Positions in Stainless Steel Cold-Rolled Flat Products and Nickel Alloys Stainless Steel Nickel Alloys Titanium Deliveries in 2006 Deliveries in 2006 Deliveries in 2006 million tons 1,000 tons 1,00
Slide 60: Top of the High-Demanding Material Pyramid
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 6 ThyssenKrupp Stainless ThyssenKrupp Stainless covers the Top of the High-Demanding Material Pyramid Demand Deliveries Market Market Requirements regarding Share Price Material Properties 1,000 t 1,000 t EURO / ton Titanium 80 5
Slide 61: Differentiation in Regards to the Competition
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 7 ThyssenKrupp Stainless Differentiation in Regards to the Competition Unique Selling Propositions Stainless steel patent holder since 1922, almost 90 years of experience Strong Brand “ThyssenKrupp” and in addition globally es
Slide 62: Stainless Steel and High Performance Alloys Applications
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 8 Stainless Steel and High Performance Alloys Typical Stainless Steel and High-Performance Alloy Applications Architecture Sinks Cooking Equipment CERAN Hot Plate Aviation Astronautics Plant Construction Automotive Freshwater Extr
Slide 63: Stainless Steel General Product Properties
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 9 Stainless Steel General Product Properties Stainless Steel Corrosion Resistance Heat Resistance Aesthetic Surface Easy-Care Properties Good Deformation Properties Good Strength to Weight Ratio High Weldability Lo
Slide 64: Comparison of Major Stainless Material Groups
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 10 Stainless Steel General Comparison of Major Stainless Material Groups (2006) Austenitics Ferritics Martensitics Duplex non-magnetic Production magnetic Production magnetic Production magnetic Production World 77%* World
Slide 65: High Performance Alloys
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 11 High Performance Alloys General Product Properties of Nickel Alloys and Titanium Nickel Alloys High wet-corrosion resistance High temperature strength Good oxidation resistance Low degree of material extension Titanium
Slide 66: General Industry and Market Development
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 12 General Industry and Market Development Stainless Steel Growth Rates much higher than Industrial Production Stainless Steel Cold-Rolled Stainless Steel Cold-Rolled 1200 15,577 Total Industrial Production Stainless Production 5,
Slide 67: Market Environment
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 13 Market Environment Development of Stainless Steel Cold-Rolled Flat Apparent Consumption [000t] 22,000 20,000 18,955 19,211 18,000 17,267 Other Asia 16,278 16,085 16,000 15,577 Japan 14,000 13,275 13,430 12,460 12,000 11,215 10,
Slide 68: Global Market Presence
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 14 Global Market Presence Market Volumes and Shares (Stainless Steel Cold Rolled Flat, Nickel Alloys) in 2006 NAFTA CHINA Market Size Market Size 2,008 Tt 74 Tt Market Size Market Size 4,140 Tt 17 Tt 16% 13% 4% 8% EUROPE (EU 29*)
Slide 69: Market Presence in Europe
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 15 Market Presence in Europe Market Volumes and Shares (Stainless Steel Cold Rolled Flat, Nickel Alloys) in 2006 UK Market Size OTHERS 187 Tt Market Size 923 Tt 22% GERMANY Market Size 17% 1,195 Tt 53% FRANCE Market Size 317 Tt 13
Slide 70: Increasing non-volatile Customer Bases
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 16 Increasing non-volatile Customer Bases Sales Structure within ThyssenKrupp Stainless Group Stainless Steel Sales by Customer Group Stainless Steel Contract Structure Others 8% Household Applications 5% Tubes 13% Short Term Cont
Slide 71: Continuous Focus on Increase of Processing Depth
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 17 Continuous Focus on Increase of Processing Depth Strongest Growth in High-Value Products Sales Structure by Products € 6.4 bn +54 % +79 % +70% Quarto Plate € 3.4 bn Forging / Tubes Titanium Nickel Alloys +66% Cold-Rolled Strip/
Slide 72: Performance Improvement Programs over-compensate rising Costs
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 18 Performance Improvement Programs over-compensate rising Costs Performance improvements over-compensate rising costs and generate additional EBIT Representative Cost Development Annual EBIT-Effect of 70 million EUR during last 5
Slide 73: EBT Development
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 19 EBT Development EBT Base Price mill EUR EUR/t 350 269 16 141 192 385 286 423 1,900 1,800 1,700 250 325 1,600 296 290 1,500 1,400 150 1,300 1,200 1,200 1,100 50 1,035 1,000 900 -50 800 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 74: Comparison of Stainless Producers' EBIT-Margins
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 20 Comparison of leading Stainless Producers’ EBIT-Margins [%] 25,0 20,8 19,3 20,0 18,4 17,2 17,5 16,4 16,0 15,2 15,5 15,5 15,0 13,3 13,1 13,6 13,2 12,4 12,7 12,7 11,8 11,6 10,7 9,8 10,0 8,0 7,1 7,7 6,8 6,1 6,1 6,1 5,8 6,0 5,3 3,9
Slide 75: Challenge: High Raw Material Costs
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 21 Challenge: High Raw Material Costs Æ Fluctuations of nickel price have strong influences on stainless steel industry [EUR/t] [US$/t] Base Price Germany, Trade/SSC, 204, 2mm Sheet 5,000 55,000 Alloy Surcharge EU 4,500 50,000 Bas
Slide 76: Stainless Steel Cold Rolled Flat Imports into Europe
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 22 Stainless Steel Cold Rolled Flat Imports into Europe European Union (EU25) [000t/month] 100 EU 27 Italy 90 77.0 80 75.5 74.2 69.3 70 64.6 61.2 62.1 60 53.3 50 41.9 41.2 36.7 38.8 40.5 36.6 33.8 40 33.4 27.2 32.8 27.7 29.4 30 23
Slide 77: Challenge: Change of the global Trade Flows
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 23 Challenge: Change of the global Trade Flows Million tons / year NAFTA Europe China Net Import Net Export Net Export Net Import Net Export Net Import 6,2 5.7 6.2 5,7 4.5 . . 4.3 4.5 3.7 3,7 2.3 2,0 2,3 2.0 3.2 3,0 3.0 1,7 1.8 1.
Slide 78: Concentration on the high-value Segment instead of Commodities
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 24 Concentration on the high-value Segment instead of Commodities Æ Systematic Focus on Value Added Services within the Production Chain Shaping (Tubes) Using Advantages in Procurement Optimization of Raw Material Qualities
Slide 79: Innovations: Silver Ice UV
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 25 Innovations at ThyssenKrupp Stainless Silver Ice® UV – Superior Anti-Fingerprint Properties Fingerprints on stainless steel (Documentation at angle of maximum visual perception) Customer benefit Aesthetics / market chances: Sil
Slide 80: Challenge: Rising Raw Material Costs
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 26 Challenge: Rising Raw Material Costs Development of proprietary Substitutes / new Stainless Grades Substitution / New Stainless Grades ThyssenKrupp Stainless is already very strong in producing ferritic grades (no nickel cont
Slide 81: Major Investments at ThyssenKrupp Stainless (I)
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 27 Major Investments at ThyssenKrupp Stainless (I) Overview of current Investment Projects Stainless Steel ThyssenKrupp Acciai Speciali Terni (AST) – World-Class Terni project Restructuring: Closure of Plant Torino and moving to
Slide 82: Major Investments at ThyssenKrupp Stainless (II)
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 28 Major Investments at ThyssenKrupp Stainless (II) Overview of current Investment Projects High Performance Alloys Societa delle Fucine Expansion of forging business by installing new manipulator and furnace Vertical Furnace Th
Slide 83: Greenfield Project USA
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 29 Greenfield Project USA Remarkable market growth in the NAFTA region / ThyssenKrupp Stainless activities already very successful Expected Market Growth Current ThyssenKrupp Stainless Deliveries [000t] [000t] 1,900 250 USA 12% 1,
Slide 84: ThyssenKrupp Stainless Deliveries
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 30 ThyssenKrupp Stainless Deliveries NAFTA and Latin America 2006 2013 [000 t] [000 t] 194 237 10% 19 23% 45 55 10 1.666 1.793 41 270 12% 197 31 21% 383 10 125 103 NAFTA Market Share NAFTA Market Share 148 230 16% 28% 5 72% 106 85
Slide 85: NAFTA Market Strategy
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 31 NAFTA Market Strategy: Participation in Market Growth, stronger Market penetration of Canada and Suppression of Imports/Local Competitors Wide Product Portfolio incl. 72” [000t/year] width 900 85 Positioning as alternative 340
Slide 86: USA Greenfield Plant with attractive Cost Position
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 32 ThyssenKrupp Stainless USA Greenfield Plant with attractive Cost Position Production costs for Cold Rolled AISI 304 2B (w/o Capital Cost) USD/ton Cumulative capacity Mt thousand 0 500 1,000 1,500 2,000 2,500 ThyssenKrupp Compet
Slide 87: ThyssenKrupp Stainless USA Greenfield Project
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 33 ThyssenKrupp Stainless USA Greenfield Project Progress Current Status / Next Steps • Permitting Process almost completed ! • Site Preparation currently ongoing • Tendering Process for Plants and Equipment started • Intensive Pr
Slide 88: ThyssenKrupp Stainless Global Investment Strategy
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 34 ThyssenKrupp Stainless Global Investment Strategy Current Target 2009 Target 2012/13 260 kt 25 kt 300 kt 90 kt +Δ120 kt +Δ300 kt cold rolled cold rolled Nirosta cold rolled cold rolled cold rolled 650 kt to market to market to
Slide 89: Forward Strategy generates Potential for Value Growth
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 35 Forward Strategy generates Potential for significant Value Growth ThyssenKrupp Stainless stands for … Commitment to increasingly Reliable and significant profit contribution Drive value for the Group Global Market Leade
Slide 90: Appendix
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 1 Appendix ThyssenKrupp
Slide 91: ThyssenKrupp Group Overview
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 2 ThyssenKrupp Group Overview Key figures 9 months ended June 30, 2007 ThyssenKrupp AG Sales €38.9 bn • EBITDA €4,266 m • EBT €2,853 m • TKVA €1,930 m • Employees 189,260 Steel Stainless Technologies Elevator Services Sales €9.9 b
Slide 92: Steel: Segment Overview
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 3 Steel: Segment Overview Steel 3rd quarter { Positive economic environment further benefiting global steel markets; above- 2005/06 2006/07 Change Change % trend production growth at European Order intake €m 3,144 3,262 118 3.8 st
Slide 93: Stainless: Segment Overview
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 4 Stainless: Segment Overview Stainless 3rd quarter { Underlying end consumer demand strong 2005/06 2006/07 Change Change % Order intake €m 1,921 1,943 22 1.1 { Continuing high imports as well as still high Sales €m 1,650 2,608 95
Slide 94: Technologies: Segment Overview
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 5 Technologies: Segment Overview Technologies 3rd quarter { Global economic growth positively 2005/06 2006/07 Change Change % impacting demand for infrastructure, energy and raw materials Order intake €m 2,688 5,700 3,012 + Sales
Slide 95: Elevator: Segment Overview
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 6 Elevator: Segment Overview Elevator 3rd quarter { Growth in global construction industry 2005/06 2006/07 Change Change % continuously driven by Asia and CEE; German construction sector clearly Order intake €m 1,173 1,309 136 11.
Slide 96: Services: Segment Overview
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 7 Services: Segment Overview Services 3rd quarter 2005/06 2006/07 Change Change % { Favorable situation on raw and industrial Order intake €m 3,841 4,122 281 7.3 materials markets reflected top and bottom line; moreover, expansion
Slide 97: Financial Calendar 2007 and 2008
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 8 Financial Calendar 2007 and 2008 { October 24, 2007 Quiet Period to December 3, 2007 { December 4, 2007 Annual Press Conference, Essen/Germany Analysts’ and Investors’ Conference, Essen/Germany { January 18, 2008 Annual General
Slide 98: Financial Calendar 2008
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 9 Financial Calendar 2008 { April 23, 2008 Quiet Period to May 13, 2008 { May 14, 2008 Interim Report 2nd quarter 2007/08 (Jan to Mar) May 16, 2008 Analysts’ and Investors’ Conference, London/UK { July 24, 2008 Quiet Period to Aug
Slide 99: How to Contact ThyssenKrupp Investor Relations
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 10 How to Contact ThyssenKrupp Investor Relations Institutional Investors and Analysts: { Phone: +49 211 824-36464 To be added to the IR mailing list, send us a { Fax: +49 211 824-36467 brief e-mail with your details! { E-mail: ir
Slide 100: Disclaimer
Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 11 Disclaimer “The information set forth and included in this presentation is not provided in connection with an offer or solicitation for the purchase or sale of a security and is intended for informational purposes only. This pr