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Financial position

The amounts taken into account in the cash flow statement correspond to the balance sheet item "Cash and cash equivalents".

There was a cash inflow from operating activities of €1,509 million in the reporting period, compared with €482 million in the corresponding prior-year period. The €1,027 million improvement in operating cash flows was mainly due to a much smaller rise in working capital and in particular the significant reduction in capital employed at Stainless as a result of a strong decrease in inventories in the reporting period, compared with a significant increase in the corresponding prior-year period.

Cash outflow from investing activities increased by €1,129 million to €2,651 million. This was due in particular to an increase of €691 million to €2,567 million in capital expenditure on property, plant and equipment, mainly relating to the construction of the steel mill in Brazil, and to a €132 million increase in expenditures for acquisitions of consolidated companies. At the same time, proceeds from disposals of property, plant and equipment and intangible assets decreased in total by €266 million. This was primarily due to the disposal in the prior year of real estate in connection with the concentration of ThyssenKrupp's head offices in Germany.

As in the prior year, free cash flow – i.e. the sum of operating cash flows and cash flows from investing activities – was negative due to strong investing activities. Compared with the corresponding prior-year period, free cash flow decreased by €102 million to €(1,142) million.

At €267 million, cash outflow from financing activities was €991 million higher than in the comparative prior-year period. Compared with the prior year, a higher incurrence of financial debt in the amount of €1,641 million was set against a €669 million increase in expenditures for the repurchase of stock and for dividend payments.

Compared with September 30, 2007, the balance sheet total increased by €2,736 million to €40,810 million. This includes an exchange rate-related reduction of €706 million.

Non-current assets increased by €1,685 million to €17,070 million. Translation-related decreases of €300 million were offset by significant additions to property, plant and equipment, mainly due to progress on the construction of the steel mill in Brazil.

Despite an exchange rate-related decrease of €162 million, inventories increased in total by €503 million to €9,367 million. In the Stainless segment, inventories decreased by €309 million; exchange rate-related decreases were exacerbated by price-related reductions. There were increases in inventories in the Steel (€95 million), Technologies (€221 million) and Elevator (€89 million) segments reflecting the business situation. The €395 million volume- and price-related increase in inventories in the Services segment related in particular to the significant expansion of sales at the Materials Services International business unit and to the consolidation of the Apollo group.

Taking into account an exchange rate-related decrease of €181 million, trade accounts receivable amounted to €8,176 million, €599 million higher than on September 30, 2007. Increases from business expansions mainly in the Steel (€297 million) and Services (€304 million) segments were set against increased customer payments in the Plant Technology and Marine Systems businesses of the Technologies segment. Trade accounts payable increased by €290 million. €161 million of this increase was attributable to the ThyssenKrupp Acciai Speciali Terni business unit of the Stainless segment due to significant increases in chromium prices and production expansions toward the end of the reporting period. The €562 million increase in current other non-financial assets to €2,081 million included €328 million higher advance payments, among other things for the procurement of input materials.

Cash and cash equivalents decreased in total by €903 million to €2,755 million. The decrease was mainly the result of the negative free cash flow caused by high investing activity (€1,142 million).

Compared with September 30, 2007, total equity increased by €43 million at the end of the reporting period to €10,490 million. An increase in the amount of the net income for the reporting period (€1,550 million) was offset in particular by dividend payments (€681 million), payments for the share buyback (€523 million) and pre-tax expenses recognized directly in equity in connection with currency translation (€265 million). Further changes in total equity resulted from directly recognized unrealized losses from derivative financial instruments and tax effects as well as changes in minority interest.

The €242 million decrease in accrued pension and similar obligations was mainly due to exchange rate effects and the divestment of the precision forging operations in the Technologies segment. Current and non-current financial debt increased in total by €1,371 million; the increase was mainly connected with the financing of the negative free cash flow. Current other financial liabilities increased by €436 million; this was mainly due to the €357 million increase in liabilities from existing payment terms in connection with the purchase of property, plant and equipment, in particular for the construction of the steel mill in Brazil. The €544 million increase in current other non-financial liabilities to €7,648 million was mainly due to a €327 million increase in advance payments received.