Strategy
A forward strategy with sustainably high sales and earnings targets keeps ThyssenKrupp on growth course. Our value-based management approach, which systematically increases the value of our Company, and the more than 6,000 successful projects under our ThyssenKrupp best value enhancement program are paying dividends.
- Growth in all segments |
- Construction of new plants on schedule |
- Growth through expansion of existing activities and strategic acquisition
Growth in all segments
Following completion of the consolidation phase, ThyssenKrupp embarked on a course of sustainable and profitable growth. The numerous portfolio changes and process improvements implemented now form the basis for significant growth. As part of our value-based management system, which is aimed at sustainably increasing the value of the Company, we are pursuing ambitious targets. All the Group's segments will contribute to meeting these targets.
In the medium term we aim to achieve sustainable earnings before taxes and major nonrecurring items of €4 billion on sales of €60 billion. In the longer term, particularly after the completion of the major investment projects by Steel and Stainless in North America and by the other segments in other regions, we expect sales in the region of €65 billion and earnings before taxes and major nonrecurring items of €4.5 to 5.0 billion.
For our key performance indicator - ThyssenKrupp Value Added - we are looking to achieve a medium-term figure in the region of €2.5 billion, rising over the longer term to €3 billion. The comparable targets for return on capital employed (ROCE) are 21.4% and 22.0%.
Construction of new plants on schedule
The Steel segment is working with great determination to implement its transatlantic growth strategy. Construction of the new slab mill in Brazil is making good progress; site preparation has been completed and work on building the production units and infrastructure is now in full swing. When it starts production in 2009, the mill will supply 5 million metric tons of low-cost slabs per year to ThyssenKrupp Steel's European and North American production sites.
In Calvert, Alabama/USA, work on the construction of the new joint Steel/Stainless complex also started on schedule. The location on the Tombigbee River provides very good logistical links for the supply of raw materials. The new plant will include hot rolling, cold rolling and coating facilities and will process slabs from the Brazilian mill into high-quality flat products. On completion in 2010, it will have a hot rolling capacity of over 5 million tons per year. In the future, the Steel segment will serve the NAFTA markets from this plant.
The growth strategy of the Stainless segment also centers on expanding its presence on the NAFTA markets. To this end it is building an integrated mill for flat-rolled stainless steel products at the joint site in Calvert, including meltshop, cold rolling, processing and finishing facilities. The slabs produced in the meltshop will be rolled on Steel's hot strip mill. The planned capacity of the stainless steel facility is around 1 million tons per year. In the future, the Mexican stainless steel subsidiary ThyssenKrupp Mexinox will also be supplied with hot-rolled coil from this location.
Growth through expansion of existing activities and strategic acquisitions
The growth strategy of the Technologies segment is focused on the mega-trends of climate, environment, infrastructure and mobility, for which its range of technologies offers intelligent products and solutions such as components for car and truck manufacture, slewing bearings for wind turbines and equipment for oil sands mining.
The Elevator segment is expanding its existing business, focusing in particular on Asia and Eastern Europe. To achieve this growth we intend to further intensify our service activities. In addition, product innovations such as the twin elevator, with two cabs running independently in one shaft, and the TurboTrack passenger transportation system are also expected to bring in additional orders.
In the Services segment, we see future growth opportunities in the areas of material and industrial services, where existing activities will be expanded and supported by strategic acquisitions. Eastern Europe, NAFTA and Asia will be the key markets.
Source: Annual Report 2006/2007, p. 52-54