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Areas of business and organizational structure

Innovative capabilities, an efficient organizational structure and a forward-looking business strategy – these are the strengths of ThyssenKrupp in the international marketplace. As one of the world's biggest materials and technology groups, we aim to be as flexible as our customers. Even in difficult economic times our ideas and initiatives for technological and commercial progress open up new roads – for our business partners and ourselves.

Tailored materials of all kinds and a comprehensive range of high-end technological goods, backed by a broad portfolio of services, characterize the capabilities that ThyssenKrupp offers customers throughout the world. Whether it's steel for auto bodies, a petrochemical complex or slewing bearings for wind turbines – our employees have a lot to offer. They work in over 80 countries across the globe and speak our customers' language. Meeting customer needs for superior products and services is key to all our activities.

Until September 30, 2009 the Group's operations were organized into five segments: Steel, Stainless, Technologies, Elevator and Services. The segments were run by their own holding companies and decided independently on their activities on the market. The segments consisted of individual business units, organized by product areas or markets. This Annual Report on fiscal 2008/2009 is based on this structure.

Group structure until September 30, 2009
Group structure

In light of the severe consequences of the financial and economic crisis for the Group, the Executive Board took a critical look at the structure of the Group and decided to modify it. On September 04, 2009 the Supervisory Board of ThyssenKrupp AG approved the plan for the new Group organizational structure, which was subsequently implemented at the beginning of the new fiscal year on October 01, 2009. As a result of the reorganization, operational management is now more decentralized while strategic management is more centralized, allowing the Group to respond even faster to new market developments and customer needs.

Group structure since October 01, 2009
Group structure

Instead of the five previous segments, the Group's activities are now combined in eight business areas, bracketed together strategically in two divisions – Materials and Technologies. ThyssenKrupp AG as corporate headquarters performs the strategic management function, while the business areas and the associated Group companies operate on the market independently. Standardized Groupwide services will be the responsibility of the Business Services companies, whose services are available to all Group companies. More information on the new organizational structure is contained under "New Group structure".

Founded in 1999, ThyssenKrupp AG is a stock corporation under German law. It is dual domiciled in Duisburg and Essen; most of its head office functions are located in Düsseldorf. In 2010 the corporate headquarters will move to the new ThyssenKrupp Quarter in Essen; the first part of this architecturally challenging campus will be completed in mid-2010. The Group has its own offices or Group representatives in Berlin, Brussels, Beijing and another 29 locations throughout the world, supporting customers and Group companies close to the markets.

ThyssenKrupp AG owns, directly or indirectly, more than 850 companies and equity interests worldwide. Two thirds of the Group's 2,500 production sites, offices and service bases are located outside Germany. Our largest site is Duisburg with just under 19,000 employees ahead of São Paulo, Brazil, with over 8,000 and Dover, USA, with more than 7,000 employees. More details on our shareholdings are provided under Note 38; for more information on our employees, go to "Employees".

Management responsibility in the Group

The Executive Board of ThyssenKrupp AG defines the Group's strategy for business development, is responsible for Groupwide corporate functions and directs the business areas; until the end of September 2009 these were the five segments mentioned above. Value management plays an important role in optimizing the worth of the business. In addition, the Executive Board organizational chart sets outs the responsibilities of individual members for specific world regions. Members' personal knowledge of products, markets and customers and their expertise in central corporate functions ensure efficient and professional management of the Group.

One key task of the Executive Board is to develop outstanding young talent for top management positions. High potentials are gradually given increasing responsibility and trained to take on more challenging tasks. For more information on management development at ThyssenKrupp, 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, valid September 30, 2009, 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, 2009 it holds around 25.33% 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 23, 2009 the Company was authorized until July 22, 2010 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 public offer or a public invitation to tender or by means of equity derivatives (put or call options or a combination of both). 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 public offer or invitation to tender, the purchase 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 or invitation to tender.

If, after announcement of a public offer or invitation to tender, the relevant price is subject to significant changes, the offer or invitation 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 public offer or invitation to tender may specify further conditions. If the offer is over-subscribed or, in the case of an invitation to tender, not all of several equal offers can be accepted, they must be accepted on a quota basis. Priority may be given to small lots of up to 100 shares per stockholder.

If the shares are repurchased by means of equity derivatives, the options may only be honored with shares purchased under observance of the principle of equal treatment. The term of the options must end on July 22, 2010 at the latest. Any right of stockholders to conclude such option transactions with the Company shall be excluded, applying Art. 186 par. 3 sentence 4 AktG.

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, 2009, the Executive Board was authorized up to January 22, 2014 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 €2 billion and to grant the bond holders the right to convert the bonds into a total of up to 50 million no-par-value bearer shares of ThyssenKrupp AG with an arithmetical share in the Company's capital stock of up to €128 million (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, (2) insofar as the convertible bonds are issued against cash payment and the issue price for the convertible bonds is not significantly lower than the theoretical fair value calculated according to recognized financial calculation methods, or (3) 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 this is requested by a group of banks representing more than 50% of the credit facility. Outstanding loans would then have to be repaid immediately; the credit facility would no longer be available for new loans.
  • In fiscal year 2008/2009 the Company issued a new bond in the amount of €1 billion and completed a private placement of €100 million. It is also guarantor of further new bonds issued in 2008/2009 by its subsidiary ThyssenKrupp Finance Nederland B.V. in the total amount of €2 billion. A change of control, i.e. the acquisition by a third party of more than 50% of the capital stock or more than 50% of the voting shares of ThyssenKrupp AG, may under certain conditions lead to early redemption of the bonds including interest.
  • 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 (today operating under the name ThyssenKrupp Technologies Beteiligungen GmbH) 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.