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Thyssen-Krupp Company Profile, October 2007
 

Thyssen-Krupp Company Profile, October 2007

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    Thyssen-Krupp Company Profile, October 2007 Thyssen-Krupp Company Profile, October 2007 Presentation Transcript

    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 0 ThyssenKrupp
    • 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 AG ThyssenKrupp Stainless Jürgen H. Fechter CEO ThyssenKrupp Stainless AG and Executive Board Member of ThyssenKrupp AG ThyssenKrupp
    • 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, but also by stable and sustainable dividend payment Continuation of systematic value management by concentrating only on high-performance business areas and active portfolio management Further expansion of service orientation as well as fostering technological and innovative capabilities ThyssenKrupp
    • 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 nonrecurring items (414) (352) 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 ThyssenKrupp
    • 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
    • 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 ThyssenKrupp
    • 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
    • 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 optimization Excellence in human resources ThyssenKrupp
    • 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/ increase customer value Quantities Costs e-Commerce Input factor prices Permanent reengineering TKVA process Fixed assets Dominant volumes, Fixed assets market shares Non-operating assets Value added Capital X WACC Employed Inventories Disposal Net working Receivables Processes, cycle times capital Non interest- Payment terms bearing liabilities ThyssenKrupp
    • 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 deferred taxes similar obligations Operating cash flow +/- Δ Funds tied down in +/- Δ Inventories - Increase of operating assets net working capital +/- Δ Trade accounts receivables + Decrease of +/- Δ Trade accounts +/- Δ Other operating net working capital payable assets +/- Δ Other payables Free cash +/- Δ Other provisions/ flow accruals - Investments in intangible assets and PPE Cash flow from - Investments in investing financial assets activities - Disinvestment of fixed assets ThyssenKrupp
    • 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 5.000 ThyssenKrupp best 4.500 4,000 4.000 3.500 3,000 3.000 2.500 2,000 2.000 1.500 1,000 1.000 500 0 FY 2001/02 FY 2002/03 FY 2003/04 FY 2004/05 FY 2005/06 Number of projects in concept in implementation finished in discontinued operations ThyssenKrupp
    • 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% Capital productivity, 7% Purchasing, 16% Service orientation, 5% Sales, 13% ThyssenKrupp
    • 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 05/06 Plan 06/07 < -400 ~ -400 < -300 ~ -400 ~ -200 < -200 ~ -100 Capital Employed potential in million € ThyssenKrupp
    • 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 2001/02 2002/03 2003/04 2004/05 2005/06 Sales Capital Employed (CE, average) ThyssenKrupp
    • 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- Underperformer- Cash consumer Cash provider Watchlist for Disposals Performance Program 0 Free Cash Flow ThyssenKrupp
    • 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
    • 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* 2,105 1,155 Technologies 2,420 1,955 Elevator 130 1,375 Services 1,435 3,010 Others 910 Sales in €m * since Oct 1, 2006 integrated into Technologies segment ThyssenKrupp
    • 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 Brasil (BR) Acquisition Končar Dizala i Servis (HR) Acquisition LWDO Lift Service (PL)** Disposal Stainless Massidda (IT) Acquisition no relevant transactions to date Vertrans Elevator (US) Acquisition Technologies Services Fundicoes (BR) Disposal AT.PRO tec (DE)*** Acquisition BVI Defense Technology (DE) Disposal TK Servicios Técnicos (ES) Disposal DRE/CON Slewing Bearings (DE) Acquisition Schöbel Technik & Service (DE) Acquisition Mechatronics Kassel plant (DE) Disposal TK Materials Vietnam [JV] (VN)**** Acquisition Intecsa-Uhde (ES)* Disposal SIR Industrieservice (DE) Disposal A-C Equipment Services (US) Acquisition Ferostav (SK)**** Acquisition ForTeq (IT) Acquisition Stokvis Plastics (NL/BE) Acquisition Rolling Stock Company (GR) Disposal+ * 50% / ** 93% / *** 61% / **** 80% / + closing not yet completed ThyssenKrupp
    • 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 Processing Coated Products Top 2 (Europe) (Forgings, Tubes) Top 1 (Europe) Tailored Blanks Top 1 ThyssenKrupp
    • 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 Mat. Services Intern. Top 1 (Europe) Crankshafts Top 1-3 Waupaca Top 1 (USA) Mat. Services NA Top 3 Steering (steering column) Top 1 Industrial Services Top 1-3 (Eur.) Transrapid USP ThyssenKrupp
    • 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 2002/03 2003/04 2004/05 2005/06 2006/07 Mid-term Long-term 2009/10 2011/12 * incl. major nonrecurring items ThyssenKrupp
    • 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 market position Stainless by performance improvement in European core markets and expansion in NAFTA Strengthen cash generating activities driven by secular trends of increasing demand Technologies for infrastructure, raw materials, renewable energy, nutrition and safety Performance program and continuous acquisitions Elevator to bridge margin gap and optimize portfolio of maintenance contracts Capture growth opportunities Services in Materials Distribution and Industrial Services ThyssenKrupp
    • 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, acquisitions Stainless €2.0 bn Greenfield NAFTA, substance-preserving and value-based investments Project-related investments, substance-preserving and Technologies €4.1 bn value-based investments, acquisitions Projects for efficiency improvement in new installations and services Elevator €1.2 bn as well as growth by acquisitions New service centers globally and in Eastern Europe, growth in raw materials, Services €1.7 bn other investments and growth by acquisitions up to Other €2.1 bn Other investments and growth by acquisitions €18- €14-16 bn, i.e. >75% growth capex, entirely based on value-driven criteria, Total 20 bn €4 bn substance-preserving investments* * 45% of the average depreciation / amortization in the segments ThyssenKrupp
    • 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 30, 2006) Treasury stock (25.7 m shares at market value* of €1,017 m) Authorized capital (€500 m) Estimated OCF (approx. €18 bn from 2005/06 - 2009/10) and Continuous revision of current business portfolio remains top priority for management * as at August 8, 2007 ThyssenKrupp
    • 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. major nonrecurring items (414) (352) Mid-term Long-term 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2009/10 2011/12 ThyssenKrupp
    • 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 AG ThyssenKrupp Stainless Jürgen H. Fechter CEO ThyssenKrupp Stainless AG and Executive Board Member of ThyssenKrupp AG ThyssenKrupp
    • 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 1,094 1,406 1,298 ROCE % 2.6 7.0 13.0 19.6 23.2 27.9 TKVA €m (417) (162) 164 600 876 907 ∅ Capital Employed €m 5,623 5,430 5,520 5,965 6,380 4,919 Employees (Sept. 30) # 29,222 29,249 30,618 31,634 38,840 38,950 1) Business Unit Carbon Steel, incl. discontinued operations US GAAP 2) ThyssenKrupp Steel (new) IFRS 3) incl. Metal Forming ThyssenKrupp
    • 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 ThyssenKrupp
    • 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 2002/03 2003/04 2004/05 2005/06 2006/07 *) incl. €76 m impairment charges at Metal Forming ThyssenKrupp
    • 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 Rolling facilities (USA incl. coating) Steel service center Projects/under construction ThyssenKrupp
    • 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 France Italy Wuhan Dalian USA Spain Turkey Nashik Mexico Brazil *) excl. Metal Forming ThyssenKrupp
    • 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 700 10% Electrical steels *) 600 26% Coated products 500 Cold strip major 6% 400 European 7% Heavy plate competitors 6% 6% Medium-wide strip 300 12% Hot strip 2001 2002 2003 2004 2005 2006 2007 H1 *) sales of flat products only *) data not yet available **) excl. Metal Forming ThyssenKrupp
    • 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-year 100 Sales by Industry FY 2005/06 in % 80 CRU Others 60 Construction Automotive 1997 Q3 2007 Q2 10 industry (incl. Packaging 3 29 9 suppliers) Price index flat carbon steel ThyssenKrupp Steel Mechanical 11 Engineering Price index flat steel, world (CRU) 14 24 Steel and steel- Trade All data incl. Q2 2007 related processing Sources: CRU and own calculations based on CRU, TKS ThyssenKrupp
    • 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 Electrical Steel # 2 World / # 1 Europe *) 50 Coated Products # 2 Europe major 0 European competitors Heavy Plate, quenched & tempered # 2 Europe -50 2001 2002 2003 2004 2005 2006 2007 Medium-wide Strip # 1 / USP H1 *) data not yet available **) excl. Metal Forming ThyssenKrupp
    • 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
    • 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 ThyssenKrupp best 502 388 444 376 in fall 2001 678 projects have been 241 287 211 282 349 launched in the Steel segment 198 138 94 111 73 302 125 147 176 250 233 220 219 Continuous efficiency enhancement Mar. Sept. Mar. Sept. Mar. Sept. Mar. Sept. programs under ThyssenKrupp best 04 04 05 05 06 06 07 07 are continued with great intensity Project landscape by initiatives (Top 5) % across all Business Units Operating efficiency 10 5 Quality enhancements 10 Sales initiative 8 58 Purchasing initiative 9 Organization Additional earnings improvements of Other initiatives +Δ €135 million per year! Source(s): best plaza; excl. Metal Forming ThyssenKrupp
    • 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 thickness for the optimization Better elongation compared to mild steels of weight compared to Multiphase steels New possibilities for the designing of assembly parts 0% 80 X-IP® -10% 70 up to -20% -45% 60 up to Konventionellesteels conventional Stähle -55% 50 -30% DP (%) 40 RA -40% 80 Bruchdehnung A80 (%) A elongation 30 -50% CP 20 MS-W® -60% FB-W® Multiphase 10 X-IP® steels steels 0 -70% 200 300 400 500 600 700 800 900 tensile strength Rm (MPa) Zugfestigkeit Rm (MPa) 1400 1500 ThyssenKrupp
    • 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 coatings Zink Magnesium X-IP-Steels Technology Support in applications Simultaneous Engineering Innovations Leadership and Tailored Blanks in technology Engineering BONDAL® Tailored Blanks Production Parts and components and Solutions for auto bodies T³ -Technique® Chassis systems Service NewSteelBody® ► Overall competence in automobile market as a basis for leadership in technology ThyssenKrupp
    • 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 with Tailored Blanks 15% Competence in processing 18% Evaluation of optimum process parameters Re-creation of the customers‘ production process 67% Competence in manufactoring Leading in the production of hot stamped parts: Sofedit, a company of ThyssenKrupp Steel ► First global successful commercialisation of hot stamped parts with MBW+x-tec® for VW Passat ► First global hot stamped Tailored Blank for Audi A5 ThyssenKrupp
    • 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 ses ces 1999: Thyssen Engineered Blanks® P ro 1998: s an d duct Thyssen Tailored Tubes® 2006: ro Start of 1st generation in P Tailored Blanks Tailored Orbitals 1985 o vation 2005: uo us Inn Thyssen Tailored Tubes® Contin 2001: 3rd generation Thyssen Tailored Tubes® 1991: 2nd generation Linear Tailored Blanks with differential thickness ThyssenKrupp
    • 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 Strips® Tailored Tubes® ► Tailored products technique: milestones of section-intensive construction ThyssenKrupp
    • 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. NAFTA 637 8% 290 20% 523 220 Asia*** 22% 160 220 m t p.a. 24% Europe 19% 3% China 4% CIS South 2005 2010 2015 America Europe and NAFTA with almost 45% Share in Global Demand for Premium Products * Flat steel products with above-average quality requirements and technological properties ** esp. India *** esp. Japan and South Korea Source(s): CRU MerchantSlabMarket 2006-Q4 – absolute numbers, WSD Global Steel Product Matrix ThyssenKrupp
    • 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 t Cold-rolled - 2.5 10 TK CSA Coated - 1.8 8 * incl. 0.9 million t for Stainless ** slabs incl. share in HKM; hot-rolled incl. heavy plate and medium-wide strip; coated incl. EG, HDG and tinplate Utilizing low-cost slabs from Brazil Significant dilution of cost base by highly competitive steel mill in Brazil Build on and expand De-bottlenecking and modernization to process strong European market position 2 m t of additional slabs from Brazil (“Herkules”) Clear strategy to enter NAFTA market Transfer of proven business model with focus on high value-added products into the modern industrial center of the U.S. ThyssenKrupp
    • 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 2003 2004 2005 2006 United States United States million t p.a. 18 12 6 9.7 10.9 6.0 6.9 7.7 4.7 0 Mexico 2.1 -6 2000 2001 2002 2003 2004 2005 2006 Mexico million t p.a. 18 12 2.3 2.4 2.4 2.2 2.2 3.3 Source(s): 6 2.1 WV Stahl. All data in mn t 0 Flat carbon steel (welded tubes excluded) Imports Exports Trade Balance (net imports counted positive) -6 2000 2001 2002 2003 2004 2005 2006 ThyssenKrupp
    • 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 5.7 4.3 West 13.9 8.2 Typical Demand** Local Capacity East Cold-rolled million t p.a. South Central Outlook 2010 + Greenfield Steel 3.2 2.5 7.4 4.2 Mexico Typical Demand** Local Capacity Coated products million t p.a. Outlook 2010 + Greenfield Steel 2.1 1.8 Source(s): 4.1 TKS analysis, Metal Strategies, status as of 2006 2.0 * excl. heavy plate ** incl. intermediate products Typical Demand** Local Capacity ThyssenKrupp
    • 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% 0.4 m 24% construction 85% East 74% 1.5 m engineering 15% South Central 3.1 m 85% pipe and tube 5% 56% 39% appliance industry Mexico 1.7 m drive demand in premium products 19% 25% 56% NAFTA total: 17 m (2010f) South Central U.S. and Mexico exhibit 5% strong position of growing Asian and 30% 65% Big three (GM, Ford, Chrysler) Asian transplants Source(s): Polk Marketing Systems, European transplants European transplants, others TKS analysis, status as of 2006 ThyssenKrupp
    • 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 environmental awareness and gas prices drive demand of automotive industry for innovative lightweight steel solutions Migration from North to South: South Central as the modern industrial center of the U.S. exhibiting growing demand and local supply shortage Cost Advantages Market Expertise Low-cost slabs ex Brazil Well-known target customers with State-of-the-art production facilities with demanding applications low operating costs (energy, personnel, …) Technological expertise ThyssenKrupp Steel Optimum logistics Reputation and brand ThyssenKrupp No legacy costs High-quality slabs from own production in Brazil ThyssenKrupp
    • 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 Cost TK Steel competitiveness Existing Hot rolling capacities Source(s): WSD World Cost Curve 2005; BCG analysis; MEPS; own research TKS NAFTA ThyssenKrupp
    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 24 U.S. Greenfield Proceeding to Schedule and Budget May 2007 July 2007 ThyssenKrupp
    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 25 Project ”Herkules” Proceeding to Schedule and Budget ThyssenKrupp
    • 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
    • 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% by 2011/12 ThyssenKrupp
    • 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 German TK CSA German Operations US Green- Operations incl. Herkules field TK CSA ~5 m t Slab Production Slab Consumption Ext. Slabs Significant cost dilution based on 5 m t of high-quality and low-cost slabs from TK CSA based on logistics cost and availability Optimized sourcing of external slabs (adjust slab supply ex CSA to Europe and U.S.) Maximum cost degression based on adjustment of external slab purchases through mini cycles (at maximum utilization of own upstream facilities) based on expansion options to further increase Further growth opportunities slab capacity at TK CSA (+Δ 2.5 m t / +Δ 5 m t) ThyssenKrupp
    • 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 Forward Strategy Europe Sustainable value growth Forward Strategy NAFTA €5.7bn Forward Strategy Brazil Return hurdle for growth ≥ 15 % Efficiency improvement Technology leadership Profitable growth investments Focus on attractive markets Committed to for premium flat steel products Reliable and significant profit contribution Drive value for the Group ! The best is yet to come ! ThyssenKrupp
    • 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 AG ThyssenKrupp Stainless Jürgen H. Fechter CEO ThyssenKrupp Stainless AG and Executive Board Member of ThyssenKrupp AG ThyssenKrupp
    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 2 ThyssenKrupp Stainless Business Fields of ThyssenKrupp Stainless Group ThyssenKrupp Stainless Sales € 6.4 billion EBT € 423 million Free cash flow € 243 million Employees 12,197 Stainless Steel Stainless Steel Stainless Steel Stainless Steel Stainless Steel Stainless Steel Nickel Alloys Business Field Titanium Processing ThyssenKrupp ThyssenKrupp ThyssenKrupp ThyssenKrupp VDM ThyssenKrupp Shanghai ThyssenKrupp Acciai Speciali Stainless USA Mexinox Nirosta Krupp Stainless Company Terni (Germany) Stainless International Precision (Germany) (Italy) (USA) (Mexico) (VR China) (Germany) Rolled Products (USA) Sales € 2,682 m € 2,505 m project phase € 559 m € 364 m € 1,186 m € 998 m not consolidated Employees 4,647 3,447 - 1,321 570 409 1,746 * FY 2005/06 ThyssenKrupp
    • 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: 364 ThyssenKrupp Nirosta ThyssenKrupp VDM No. 2 Societá delle Fucine Europe No. 1 ThyssenKrupp Acciai Speciali Terni (>100 t Unit Weight) No. 1 ThyssenKrupp Mexinox Shanghai Krupp Stainless ThyssenKrupp Titanium No. 6 Tubificio di Terni Europe No. 1 Figures based on fiscal year 2005/06 ThyssenKrupp
    • 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 1,000 t 2,482 2,365 2,519 2,237 2,468 1,748 thereof Stainless CR 1,000 t 1,543 1,577 1,742 1,578 1,764 1,359 EBT €m 141 192 385 286 423 912 ROCE % 7,9 9,9 16,9 11,8 16,0 34,2 TKVA €m - 54 - 4 182 68 199 703 Employees # 12,074 12,116 11,811 12,201 12,197 12,187 *) US-GAAP ThyssenKrupp
    • 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 1,000 tons 1.8 1.6 36 34 1.5 TKL is the only Titanium 25 Producer in Western Europe 23 0.9 0.9 19 19 16 0.6 0.6 13 14 0.5 0.4 0.4 10 7 6 5 5 5 4 AK Steel INI Steel TKL Arcelor Outokumpu Acerinox POSCO TISCO YUSCO NSSC Hitachi Haynes VDN TKL Allegheny Timet Sp. Metals Nippon Steel TKL Carpenter Kobe Steel IUP (Arcelor) Allegheny RTI VSMPO Sumitomo The 10 largest producers Stand for The 6 largest producers stand for The 5 largest producers stand for 65% of all worldwide shipments 67% of all worldwide shipments 67% of all worldwide shipments Source: ThyssenKrupp Stainless Source: ThyssenKrupp VDM Source: ThyssenKrupp Titanium ThyssenKrupp
    • 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 6% ~50,000 Nickel Alloys 226 34 15% ~30,000 Stainless Steel 15,197 1,786 12% ~4,000 Figures based on year 2006 ThyssenKrupp
    • 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 established product brands (Nirosta, AST, Mexinox, SKS and VDM) Powerful worldwide Service Center Network Benchmark for Product Quality Highly innovative Products and Services Covering the top of the high-performance Material Pyramid Wide Product Portfolio in Cold-Rolled Flat Products Significant End Customer Portfolio ThyssenKrupp
    • 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 Extraction Medicine Cutlery Offshore Kitchen Furniture White Goods Transportation Wall Cladding Wires Engines ThyssenKrupp
    • 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 Long Service Life 100% Recyclability ThyssenKrupp
    • 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 20% World 2% World 1% nickel content no nickel no nickel lower nickel TKL 66% TKL 32% TKL 1% TKL 1% Corrosion Resistance Corrosion Resistance Corrosion Resistance Corrosion Resistance Strength / Hardness Strength / Hardness Strength / Hardness Strength / Hardness Deformability Deformability Deformability Deformability Abrasion Abrasion Abrasion Abrasion Surface Aesthetics Surface Aesthetics Surface Aesthetics Surface Aesthetics Cost Attractiveness Cost Attractiveness Cost Attractiveness Cost Attractiveness Applications which require a Applications which have lower Applications which require high Applications which require a high hygienic cleanability and requirements reg. corrosion strength and hardness high resistance to stress wet corrosion resistance resistance and deformability knifes and cutlery corrosion cracking, tensile food processing / kitchen cost advantage strength and heat resistance surgical instruments tanks / pressure vessels dish washers / dryers heat exchangers fasteners and nozzles architecture automotive exhausts sea water cooling shafts, impellers, etc. interior design *incl. 9% of 200 Series ThyssenKrupp
    • 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 High corrosion resistance Low specific weight Highest strength to weight ratio High biological compatibility ThyssenKrupp
    • 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 5,011 11,546 1000 7% Index (1968=100) Rest of World per year 3,243 Europe 3,618 1,768 800 1990 2006 * World consumption (in 1,000 t) Source: CRU Aug 2007 600 Nickel Alloys 400 226 Total 162 163 200 119 Rest of World 2% per year 0 43 Europe 63 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 1990 2006 Source: OECD/Global Insight/CRU Nov 2006 * World consumption (in 1,000 t) Source: ThyssenKrupp VDM ThyssenKrupp
    • 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 10,358 10,395 China 10,000 7,515 8,000 Others 6,000 5,517 NAFTA 4,000 2,000 Western Europe 0 1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 (f) 2008 (f) 2009 (f) 2010 (f) 2011 (f) Source: CRU Aug 2007 ThyssenKrupp
    • 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*) Market Size Market Size 4,037 Tt 66 Tt 35% 31% ROW Market Size Market Size 5,194 Tt 69 Tt Market Share Stainless CR Flat Steel 1% 3% Market Share Nickel Alloys 26 Mar 2007- Source: CRU Feb 07, SPAS Mar 07, Eurofer Mar 07, TKL ZA/UE, *including Norway, Switzerland * number for Nickel Alloys are preliminary ThyssenKrupp
    • 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% ITALY SPAIN Market Size 1,136 Tt Market Size 278 Tt 42% 16% Market Share Stainless CR Flat 26 Mar 2007- Source: CRU Feb 07, SPAS Mar 07, Eurofer Mar 07, TKL ZA/UE ThyssenKrupp
    • 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 Contracts (<0.5 year) 40% Automotive 9% SSC/Trading* 50% Metal Processing 5% White Goods 10% based on net sales, FY 2005/06 * thereof 50% TK group Medium Term Contracts 32% (0.5 – 1 year) Nickel Alloy Sales by Customer Group Electronics 15% Others 2% Industrial Automotive 5% Applications 19% Long Term Contracts 28% Offshore 12% (> 1 year) Chemical Plants 27% Aerospace 14% Electronic-Technology 6% 0% 10% 20% 30% 40% 50% based on net sales, FY 2005/06 based on ThyssenKrupp Nirosta Shipments 2005/06 ThyssenKrupp
    • 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/ Precision Strip Hot-Rolled Strip +43% 2001/02 2005/06 ThyssenKrupp
    • 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 years [index = 100] [million EUR accumulated] [number of projects] 200 400 400 350 350 175 Electricity 300 300 EBIT Effect 250 Projects 250 150 Gas 200 200 125 150 150 Labor Costs 100 100 100 Manufacturing Costs 50 50 Productivity (hrs/ton) 75 0 0 2001/02 2005/06 2001/02 2002/03 2003/04 2004/05 2005/06 Manufacturing costs incl. energy, personnel ThyssenKrupp
    • 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 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 ThyssenKrupp
    • 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 4,4 4,4 4,2 5,0 3,8 2,3 2,2 2,3 1,2 1,2 0,4 0,0 2000 2001 2002 2003 2004 2005 2006 Q1/2007 Q2/2007 -5,0 -7,0 -10,0 TKL* Acerinox Group Outokumpu Total ArcelorMittal Stainless*** NAS Outokumpu Total ** * TKL in Q2/2007: elimination one-time effects ** Outokumpu Q2/07 EBIT margin without nickel related inventory gains of 100 m€ *** ArcelorMittal without ArcelorMittal Timóteo (former Acesita) ThyssenKrupp
    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 21 Challenge: High Raw Material Costs 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 Base Price EU 4,000 Nickel 45,000 40,000 3,500 35,000 3,000 30,000 2,500 25,000 2,000 20,000 1,500 15,000 1,000 10,000 500 5,000 0 0 Jan-94 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 04 Sep 2007 - Source: CRU Aug 2007, Metalprices (NICKEL) 04 Sep 2007 ThyssenKrupp
    • 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 23.9 21.6 21.5 22.0 18.9 20 16.7 11.9 10 0 Apr Apr Jan 07 Jan 07 2003 2004 2005 2006 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Mai Jul Jul Feb Feb Jun Jun Mar Mar Mai China Japan South Korea Taiwan South Africa USA Brazil Others . 29 Aug 2007 - Source: Eurofer Aug 2007, TKL ZA-UE Imports excl. SKS Deliveries ThyssenKrupp
    • 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 5.7 6,2 5,7 6.2 4.5 . . 4.5 4.3 3.7 3,7 2.3 2.0 2,3 2,0 3.2 3,0 3.0 1.7 1.8 1,7 1,8 M D M C M D M C M D M C 2005 2010 2005 2010 2005 2010 Other Asia Significant Capacity Deficits will emerge in Europe and NAFTA China will increasingly be self sufficient respectively will Net Export Net Import develop into a Net Exporter 5.2 5.1 5,2 5,1 4.5 4,5 3,8 3.8 Market volume Deliveries M D M C Capacities estimated (realistic) 2005 2010 ThyssenKrupp
    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 24 Concentration on the high-value Segment instead of Commodities Systematic Focus on Value Added Services within the Production Chain Shaping (Tubes) Using Advantages in Procurement Optimization of Raw Material Qualities Optimization of Raw Material Mix Product-Related Services Coating USP in regards to Competition Higher Profit Margins Stamping Economies of Scale e.g. Discs Performance Increase Cutting (SSC) Surface Finishing Finishing Procurement Production to Coil Shop Cold Rolling Expansion of Existing Business Steel Hot Rolling Raw Material Mill Utilization of all Growth Options Melt Mill Procurement Shop Differentiation regarding Price and Performance ThyssenKrupp
    • 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: Silver Ice® UV improves the visual appearance during every day use due to its fingerprint / stain resistance and superior cleaning properties. Due to its extra ordinary high scratch resistance the surface aesthetics are not impaired. Customer loyalty Sustained customer loyalty due to the improvement of end product properties. Cost savings Improvement of market chances. Higher operating margins than standard business operations by coil coating. Market potential Long-term market sustainability, increase of market share, new without Silver Ice® UV with Silver Ice® UV application fields. ThyssenKrupp
    • 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 content) The establishment of new VOD converter allows development of “super ferritics”, i.e. ELC Ferrites (Extra Low Carbon) Development of new stainless steel grades as substitution of common grades, such as austenitic grades 304 and 316 ThyssenKrupp
    • 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 Terni Strengthening of operations: volume, quality and finishing/processing capabilities VOD Converter Installation of VOD converter to produce new ferritic stainless steel grades (Q1 2008) ThyssenKrupp Mexinox Installation of bright annealing capacity completed in 2006 Increase of finishing capacities by installation of completed in 2007 ThyssenKrupp Stainless USA – Alabama Greenfield Project BA Tower ThyssenKrupp
    • 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 ThyssenKrupp VDM VAR Furnace Expansion of in-house manufacturing capabilities by installation of a forging plant until 2008 Increase of re-melting capacity Relocation of wire production / closure of one plant ThyssenKrupp Titanium EB Furnace Manipulator Expansion of ingot production capacity from 5,000 t to 10,000 Tt per year by installation of a VAR (2007) and an EB furnace (2008) Forging ThyssenKrupp
    • 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% 1,800 1,890 USA Market Share 197 1,700 200 11% 1,600 7% 1,500 143 150 1,400 +4.9% p.a. 111 1,352 1,300 100 220 Mexico 200 215 50 180 0 160 250 135 Mexico 140 +6.9% p.a. 200 120 250 Market Share 72% Canada 150 230 245 72% 73% 106 100 71 210 61 190 177 50 +4.8% p.a. 170 0 2005 06 07 08 09 10 11 2012 2000 2003 2006 13 Sep 2007 - Source: CRU Aug 2007, TKL/UE 13 Sep 2007 - Source: TKL, McKinsey 2006 ThyssenKrupp
    • 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% 195 190 Legend Legend 372 530 Market Volume Market Volume 25 SKS 7% 21 10% 52 20 Market 25 USA NR+AST 4 Market 7 Share Share NR+AST MXX MXX ThyssenKrupp
    • 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 * USA Supplier in the Volume 77% Segment next to NAS 350 125 Mexico 1% Securing and Extension of Slab Scrap/ Export Hot Cold Rolled Canada Position in 430 grades Production Yield Hot Band Band Production 13% Mexinox White 2012/13 Others Latin 1% America 8% * thereof 120 Tt Hot Band White Processing and Extension of Position in the Quality Segment ThyssenKrupp
    • 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 Competitor Competitor Mexinox Competitor Stainless USA 1 2 (incl. Anti-Dumping) 3 Source: McKinsey cost model ThyssenKrupp
    • 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 Preparation of Market Entry • Laying of Foundation Stone on 02 NOV, 2007 ThyssenKrupp
    • 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 market Nirosta to market Nirosta cold rolled to market cold rolled to market to market Green- Mexinox Mexinox field Acciai 50 kt Speciali 110 kt Acciai 340 kt Acciai 255 kt 280 kt hot rolled cold rolled Terni cold rolled hot rolled supply Speciali Mexinox Speciali hot rolled supply supply to market 40 kt to market 60 kt Terni Terni SKS external supply SKS external supply NAFTA activities very World Class Terni Project Further penetration of NAFTA successful to date > strengthens European position market based on integrated, > 72% market share in Mexico > production relocation from Turin to 72” state-of-the-art Greenfield plant > 12% market share in the US Terni Leverage of synergies with Re-Roller Mexinox supplied by > market-oriented growth and Mexinox > AST (~85%) and portfolio optimization > hot rolled supply ex Greenfield > third parties (~15%) (semi cold-rolled, super ferrites) > Mexinox to focus on ferrites > backs Mexinox capacity AST and NR to capture optimization and additional growth in Europe > market penetration in NAFTA ThyssenKrupp
    • 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 Leadership #1 Attractive Growth Markets ≥ 3% p.a. Capex Forward Strategy Europe > Comprehensive optimization of European stainless operations > Value added products > Increase processing capabilities > Restructuring of AST forging plant € 1.5 bn > Strengthening High Performance Alloys Forward Strategy NAFTA > Greenfield USA > Optimization of Mexinox Return Hurdle for Growth Investments ≥ 15% p.a. ThyssenKrupp
    • Presentation ThyssenKrupp, Morgan Stanley Field Trip, October 5, 2007 1 Appendix ThyssenKrupp
    • 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 bn Sales €7.0 bn Sales €8.4 bn Sales €3.4 bn Sales €12.6 bn EBITDA€1,939 m EBITDA €1100 m EBITDA €658 m EBITDA €(118) m EBITDA €713 m EBT €1,298 m EBT €912 m EBT €411 m EBT €(187) m EBT €550 m TKVA €907m TKVA €703 m TKVA €268 m TKVA €(274) m TKVA €385 m Employees 38,950 Employees 12,187 Employees 54,128 Employees 38,556 Employees 43,098 • Steelmaking • Nirosta •Plant • 4 regional • Materials Services • Industry • Acciai Speciali Technology business units International • Auto Terni •Marine • Escalators/ • Materials Services • Mexinox Systems Passenger North America • Processing Boarding • Shanghai Krupp •Mechanical • Industrial Services Components Bridges Stainless • Special Products •Automotive • Accessibility • Stainless Int. Solutions • VDM •Transrapid Inter-segment sales not consolidated ThyssenKrupp
    • 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 steel users continued Sales €m 3,151 3,413 262 8.3 Crude steel output and shipments stable EBITDA €m 563 670 107 19.0 yoy; hot-rolled capacities: maximum utilization ensured by external slab EBIT €m 403 440 37 9.2 sourcing EBT €m 386 428 42 10.9 Higher average revenues per ton feeding TK Value Added* €m 679 907 228 33.6 through top and bottom line ROCE * % 23.5 27.9 4.4%-p. 18.7 Further preparation of European activities OCF €m 551 585 34 6.2 with regard to announced forward CF from divestm. €m (2) -- -- strategy (“Herkules” project) (122) CF for investm. €m (310) -- -- Site preparation has kicked off for FCF €m 429 273 -156 -36.4 Alabama steel plant; construction of Brazilian slab plant proceeding to Employees (Jun 30) 38,384 38,950 566 1.5 schedule and budget * accumulated ThyssenKrupp
    • 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 2,608 958 58.1 distributor inventories and nickel-triggered slump in demand especially from service EBITDA €m 215 369 154 71.6 centers resulting in lower order volumes EBIT €m 143 318 175 + and declining base prices EBT €m 126 296 170 + Value of orders and sales further impacted TK Value Added* €m 17 703 686 + by high alloy surcharge (esp. nickel) ROCE* % 10.2 34.2 24.0%-p. + Crude steel output lower yoy (-12%) and OCF €m 173 264 91 52.6 qoq (-8%); declining shipments mainly for hot-rolled strip CF from divestm. €m 1 4 3 + CF for investm. €m (35) (103) -68 -- Competitive position further strengthened by FCF €m 139 165 26 18.7 more ferritics and new finishing operations/ higher value-added products in Terni Employees (Jun 30) 12,138 12,187 49 0.4 * accumulated ThyssenKrupp
    • 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 €m 2,835 2,815 -20 -0.7 Order intake doubled with strongest contribution by Plant Technology (e.g. EBITDA €m 228 230 2 0.9 major order for fertilizer plant in Egypt) EBIT €m 151 147 -4 -2.6 and Marine Systems (F125 frigate EBT €m 151 155 4 2.6 program) TK Value Added* €m 267 268 1 0.4 Excellent visibility: Order book: €16 bn at the end of June; 50% of next year’s ROCE* % 25.2 25.9 0.7%-p. 2.8 sales already booked OCF €m 148 117 -31 -20.9 Complementary acquisitions to expand CF from divestm. €m 34 -- -- service activities for the cement (56) CF for investm. €m (137) -- -- industry (kiln service/repair company) FCF €m 92 14 -78 -84.8 and strengthen position of Berco (construction equipment components) Employees (Jun 30) 55,201 54,128 -1,073 -1.9 in Italy * accumulated ThyssenKrupp
    • 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 11.6 recovering, mainly for commercial projects Sales €m 1,070 1,179 109 10.2 Higher order intake and sales driven by EBITDA €m 119 131 12 10.1 new installations, especially in North EBIT €m 105 114 9 8.6 America (non-residential construction) EBT €m 98 106 8 8.2 and China, as well as expansion of service activities in all regions TK Value Added* €m 182 (274) -456 -- By region, strong demand even in Spain ROCE* % 21.4 (12.6) -34.0%-p. -- (new installations, service) and France OCF €m 12 (448) -460 -- (modernization) as well as for passenger boarding bridges (growth CF from divestm. €m 22 7 -15 -68.2 in air traffic) CF for investm. €m (40) (34) 6 -15.0 FCF €m (6) (475) -469 -- Acquisition of Croatian elevator company to expand market position in Eastern Employees (Jun 30) 35,579 38,556 2,977 8.4 Europe * accumulated, incl. Elevator fine ThyssenKrupp
    • 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 of distribution Sales €m 3,821 4,308 487 12.7 activities as well as acquired/established EBITDA €m 218 271 53 24.3 businesses contributing EBIT €m 185 237 52 28.1 Business with nonferrous metals remains EBT €m 168 218 50 29.8 at high level in the US TK Value Added €m 201 385 184 91.5 Industrial Services with further growth in ROCE % 18.3 24.5 6.2%-p. 33.9 almost all sectors and regions OCF €m 254 83 -171 -67.3 CF from divestm. €m 12 9 -3 -25.0 “Invest-Roadmap 890+” further pursued: Acquisition of one of Slovakia’s biggest CF for investm. €m (67) (61) 6 + steel distributors as part of the Eastern FCF €m 199 31 -168 -84.4 Europe growth strategy Employees (Jun 30) 38,830 43,098 4,268 11.0 ThyssenKrupp
    • 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 Meeting, Bochum/Germany January 24, 2008 Quiet Period to February 12, 2008 February 13, 2008 Interim Report 1st quarter 2007/08 (Oct to Dec) Conference call with analysts and investors ThyssenKrupp
    • 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 August 13, 2008 August 14, 2008 Interim Report 3rd quarter 2007/08 (Apr to Jun) Conference call with analysts and investors ThyssenKrupp
    • 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@thyssenkrupp.com Internet: www.thyssenkrupp.com ThyssenKrupp
    • 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 presentation contains forward-looking statements that are subject to risks and uncertainties. Statements contained herein that are not statements of historical fact may be deemed to be forward-looking information. When we use words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may” or similar expressions, we are making forward-looking statements. You should not rely on forward-looking statements because they are subject to a number of assumptions concerning future events, and are subject to a number of uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from those indicated. These factors include, but are not limited to, the following: (i) market risks: principally economic price and volume developments, (ii) dependence on performance of major customers and industries, (iii) our level of debt, management of interest rate risk and hedging against commodity price risks; (iv) costs associated with, and regulation relating to, our pension liabilities and healthcare measures, (v) environmental protection and remediation of real estate and associated with rising standards for real estate environmental protection, (vi) volatility of steel prices and dependence on the automotive industry, (vii) availability of raw materials; (viii) inflation, interest rate levels and fluctuations in exchange rates; (ix) general economic, political and business conditions and existing and future governmental regulation; and (x) the effects of competition. Please note that we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.” ThyssenKrupp