Business areas and organization
Capabilities, organizational structure and management responsibility are instrumental in the success of ThyssenKrupp. As an international industrial and services group we combine a solid product and business portfolio with short decision-making paths, high innovativeness and cost efficiency. With their ideas and initiatives, our almost 200,000 employees open up new opportunities for demanding customers all over the world. This paid off again in the past fiscal year.
Capabilities
The operations of ThyssenKrupp are focused on an innovative range of capabilities in steel, capital goods and services. Almost 200,000 employees develop and produce products and services that offer our customers throughout the world convincing solutions. The specialists in our plants, offices and branches are highly sought-after partners when it comes to achieving business excellence. With our five business segments we define economic and technical progress for many industries.
Organizational structure
The ThyssenKrupp Group is run on a decentralized basis to allow us to respond faster to market and customer requirements. Operating business is handled by the five segments Steel, Stainless, Technologies, Elevator and Services. They are led by their own holding companies and decide independently on their market and customer operations. The segments are organized into business units based on product groups or markets. Their commercial and technical staff represent the dynamic performance capabilities of ThyssenKrupp in day-to-day business with our customers and partners.
The most important tasks of ThyssenKrupp AG as Group holding company include corporate strategy, portfolio management, risk management and central financing. This is also where contact is maintained with large parts of the corporate environment, the capital market and above all the stockholders. Numerous services are also performed, including image advertising, innovation support and personnel marketing, which benefit the Group as a whole.
Founded in 1999, ThyssenKrupp AG is a stock corporation under German law. Under its Articles of Association it is dual domiciled in Duisburg and Essen, though most of its head office functions are located in Düsseldorf. In mid-2010 the holding company will move to the ThyssenKrupp Quarter, the new headquarters currently being built in Essen. A progress report on the building work can be found in chapter Business management - Goals and strategy. We have our own Group representatives and contacts in Berlin, Brussels and over 30 other locations throughout the world. They support our segments and customers close to the markets from Washington to Warsaw, Beijing to Bangkok, and Moscow to Mexico City.
ThyssenKrupp AG owns, directly or indirectly, over 800 companies and equity interests in around 80 countries; around two thirds of the Group's 2,700 production sites, offices and service bases are located outside Germany. The largest of our 1,200 locations worldwide remains Duisburg, with over 18,000 employees. More details on our shareholdings are provided under Note 38.
Management responsibility in the Group
The Executive Board of ThyssenKrupp AG, which is responsible for the management of the Group, is made up of the chief executives of the segment holding companies and directors holding responsibility for corporate functions, so that their respective knowledge of sales markets and central corporate functions can feed directly into decision-making. In addition, the Executive Board organizational structure stipulates which members are responsible for specific world regions. The chief executives of the segments which have the strongest involvement in a region take responsibility for that region in addition to their responsibility for segment operations.
One key task of the Group Executive Board as a whole is to develop outstanding young talent for top management positions and give them increasing responsibility. High potentials are regularly assessed and prepared for senior roles. Targeted job rotation plays an important part in this. Young professionals are expected to gain experience in different segments of the Group and in different countries to enable them to see beyond segment boundaries and demonstrate their intercultural competencies. For more information on management development and the role of the Group Executive Board in this, go to Employees.
Compensation Report
The Compensation Report is contained in the Corporate Governance Report and forms part of the management report on the Group.
Disclosure of takeover provisions
The following information is presented in accordance with Art. 315 par. 4 of the German Commercial Code (HGB).
Composition of capital stock
The capital stock of ThyssenKrupp AG remains unchanged at €1,317,091,952.64 and consists of 514,489,044 no-par value bearer shares. Each share carries the same rights and grants one vote at the Annual General Meeting.
Shareholdings exceeding 10% of the voting rights
There is one direct shareholding in the Company which exceeds 10% of the voting rights: The Alfried Krupp von Bohlen und Halbach Foundation, Essen has informed ThyssenKrupp AG that effective September 30, 2008 it holds around 25.14% of the voting rights of ThyssenKrupp AG.
Appointment and dismissal of Executive Board members, amendments to the Articles of Association
The appointment and dismissal of members of the Executive Board of ThyssenKrupp AG is subject to Arts 84, 85 German Stock Corporation Act (AktG) and Art. 31 Codetermination Act (MitbestG) in conjunction with Art. 6 of the Articles of Association. Amendments to the Articles of Association are subject to the approval of the Annual General Meeting with a majority of at least three quarters of the capital stock represented; Arts 179 ff. AktG apply. Under Art. 11 par. 9 of the Articles of Association, the Supervisory Board is authorized to resolve amendments to the Articles of Association which relate only to their wording. The Supervisory Board is also authorized to amend Art. 5 of the Articles of Association (Capital Stock and Shares) depending on the use of authorized capital. If the authorized capital has not been used or has been only partly used by January 18, 2012, the Supervisory Board may also amend the wording of Art. 5.
Authorization of the Executive Board to issue shares
Under Art. 5 par. 5 of the Articles of Association, the Executive Board is authorized, with the approval of the Supervisory Board, to increase the Company's capital stock on one or more occasions on or before January 18, 2012 by up to €500 million by issuing up to 195,312,500 new no-par value bearer shares in exchange for cash and/or contributions in kind (authorized capital).
It may exclude stockholders' subscription rights with the approval of the Supervisory Board in the following cases:
- for fractional amounts occurring as a result of the subscription ratio;
- to grant subscription rights for new shares to the holders of conversion and/or option rights or conversion obligations outstanding at the time the authorized capital is utilized in respect of convertible bonds and/or options already issued or to be issued in the future by the Company or its subsidiaries to the extent to which they would be eligible as stockholders after exercising the conversion and/or option rights or after fulfillment of the conversion obligations;
- if the issue price of the new shares is not significantly lower than the stock market price of shares already quoted on the stock market at the time the final issue price is determined and the shares issued do not exceed altogether 10% of the capital stock either at the time this authorization becomes effective or at the time it is exercised;
- in the event of capital increases in exchange for contributions in kind.
The sale of treasury stock shall be counted against the 10% capital limit insofar as it takes place during the term of this authorization to the exclusion of subscription rights pursuant to Art. 186 par. 3 sentence 4 AktG. Shares issued to service bonds with conversion and/or option rights and conversion obligations shall likewise be counted against the 10% capital limit insofar as the bonds are issued during the term of this authorization to the exclusion of subscription rights analogously applying Art. 186 par. 3 sentence 4 AktG. The Executive Board is authorized, with the approval of the Supervisory Board, to determine the further content and the terms and conditions of the share issue.
Authorization of the Executive Board to repurchase stock
By resolution of the Annual General Meeting of January 18, 2008 the Company was authorized until July 17, 2009 to repurchase treasury stock up to a total of 10% of the current capital stock of €1,317,091,952.64. The authorization may be exercised in whole or in installments, once or several times, in pursuit of one or several purposes by the Company or by third parties for the account of the Company. At the discretion of the Executive Board, the buy-back may be effected on the open market or by means of a fixed-price/Dutch auction tender offer. The countervalue per share paid by the Company (excluding incidental costs) may not be more than 5% higher or lower than the price determined on the day of trading by the opening auction in the XETRA trading system (or a comparable successor system).
If the shares are repurchased by means of a tender offer, the tender price or the limits of the price range per share (excluding incidental costs) may not be more than 10% higher or lower than the average closing price in the XETRA trading system (or a comparable successor system) on the three trading days before the date of the public announcement of the offer.
If, after announcement of a tender offer, the relevant price is subject to significant changes, the tender offer may be amended. In this case the price is based on the average price over the three days of trading before the public announcement of an amendment. The tender offer may specify further conditions. If the offer is over-subscribed or, in the case of a Dutch auction, not all of several equal tenders can be accepted, tenders must be accepted on a quota basis. Priority may be given to small lots of up to 100 shares per stockholder.
The Executive Board is authorized to use the repurchased stock for all legally permissible purposes. In particular it may cancel the shares, sell them by means other than on the open market or by offer to stockholders or sell them in exchange for a contribution in kind and use them to discharge conversion rights in respect of convertible bonds issued by the Company or the Company's subsidiaries. In the latter three cases, the stockholders' subscription rights are excluded. The Supervisory Board may determine that measures of the Executive Board under this authorization are subject to its approval.
By resolution of the Annual General Meeting of January 23, 2004, the Executive Board was authorized up to January 22, 2009 to carry out the following measures with the approval of the Supervisory Board:
- to issue bearer bonds in the total par value of up to €500 million and to grant the bond holders the right to convert the bonds into bearer shares of ThyssenKrupp AG (convertible bonds);
- to exclude the stockholders' subscription rights to convertible bonds if this is necessary (1) for fractional amounts occurring as a result of the subscription ratio, provided the issue price for the convertible bonds is not significantly lower than their theoretical fair value calculated according to recognized financial calculation methods and (2) to grant holders of conversion rights from previous bond issues subscription rights in the amount to which they would be entitled upon exercising their conversion rights. The conversion price for treasury stock must not be lower than 80% of the average closing price in the XETRA trading system over the three days of trading before the date of the public announcement of the offer or acceptance of a tender. The Executive Board determines the conditions for conversion bonds.
Key agreements subject to conditions
ThyssenKrupp AG is party to the following agreements that are subject to a change of control as a result of a takeover bid:
- The Company has concluded an agreement with a banking consortium on a committed credit facility in the amount of €2.5 billion. This agreement can be terminated with immediate effect and outstanding loans declared due if the Company becomes a subsidiary of another legal entity or natural person and termination is requested by a group of banks representing more than 50% of the credit facility.
- Further, the Company is party to a shareholders' agreement in respect of Atlas Elektronik GmbH (joint venture) under which the co-shareholder EADS Deutschland GmbH has a call option on specific assets and liabilities of the joint venture at fair value in the event that a competitor of the joint venture or of the co-shareholder directly or indirectly acquires a controlling interest in the Company. If the call option is exercised, ThyssenKrupp Technologies AG is entitled to purchase all the co-shareholder's shares in the joint venture at fair value plus 5% premium. If the call option is not exercised, the co-shareholder has a put option in respect of the shares in the joint venture at the specified purchase price conditions.