Contents of this page

In fiscal 2003/2004, ThyssenKrupp generated income from continuing operations before taxes and minority interest of €1,580 million, €806 million more than in the previous year. 2003/2004 was thus the best fiscal year in the history of the Group since the 1999 merger. This performance was driven by the success of measures to improve earnings quality and by high global demand for raw and processed materials, especially steel. In addition, the reporting year was marked by significant advances in the implementation of the portfolio optimization program. Four significant entities were either sold or their sale initiated; they are no longer included in income from continuing operations in the reporting period and the adjusted prior-year figures. The earnings contributions of these entities were €20 million (net of tax) in 2003/2004 and –€10 million (net of tax) in the prior year. The breakdown of income by segment is shown in the following chart.

Details of segment earnings are presented in the "Management's discussion and analysis" section of the Financial Report.

Income by segment million €
			2002/2003*		2003/2004
Steel			439		911
Automotive			189		288
Elevator			355		370
Technologies			42		67
Services			36		271
Real Estate			60		72
Corporate			(332)		(380)
Consolidation			(15)		(19)
Income from continuing operations**			774		1,580

* adjusted due to the presentation of discontinued operations and the change of inventory method; see Notes 3 and 4 to the financial statements **before income taxes and minority interest
			2002/2003*		2003/2004
Steel			5		0
Services			(15)		20
Discontinued Operations (net of tax)			(10)		20

All segments, particularly Steel and Services, achieved earnings improvements. One decisive factor throughout the Group was the successful implementation of efficiency enhancement programs. In the Steel segment, Carbon Steel achieved significant volume growth. Higher prices generally served only to offset raw material cost increases. After a weaker first half, Stainless Steel significantly increased its volumes and base prices in the second half of the reporting year. The reason for this was an improvement in demand in the EU region and the USA. The Chinese cold rolling mill, currently undergoing expansion, moved into profit. Special Materials recorded a loss due to the difficult market situation for grain-oriented electrical steel combined with restructuring expenses and strike costs at the Terni plant. The profit increase in the Automotive segment was mainly due to cost-reduction and restructuring measures. The increased value of the euro against other major currencies, further increases in personnel costs in North America, and increased starting material prices had a negative impact. In the Elevator segment, the Germany/Austria/Switzerland and Spain/Portugal/Latin America and the Other Countries business units increased their profits. However, North America/Australia posted lower earnings due to price pressure on new installations and increased starting material prices. The main reason for the earnings rise in the Technology segment was an improved workload at Plant Technology and Mechanical Engineering; the one-time expense resulting from the sales financing of two cruise liners had a negative impact. The Services segment multiplied its earnings many times over, mainly thanks to improvements at Materials Services Europe and North America. In addition to favorable economic conditions, efficiency enhancement and restructuring programs had a major impact here.

ThyssenKrupp AG income €301 million

The net income of ThyssenKrupp AG in the reporting period as calculated by HGB (German GAAP) was €301 million, compared with €406 million a year earlier. Income from investments decreased from €1,128 million to €460 million, mainly due to lower profit transfers and higher loss transfers from domestic subsidiaries. Other operating expenses decreased due to lower risk provision. After deducting expenses for Group management activities, pension costs for former employees of ThyssenKrupp AG and its predecessors, and net interest costs of €152 million, income from ordinary activities amounted to €338 million (previous year €582 million). Income tax expense amounted to €37 million, compared with an income tax benefit of €70 million in the previous year. The income taxes in the reporting year result from the limitation on the use of tax loss carryforwards (minimum tax) and additional taxes for prior years. They also include withholding taxes on dividends from foreign subsidiaries. The tax benefit in the previous year resulted from the reversal of a tax accrual after the successful settlement of a test case before the Tax Court. Of the net income of €301 million, €1 million has been transferred to retained earnings. Subject to approval by the Annual General Meeting, the remaining net income of €300 million plus €9 million carryforward is to be used to pay a dividend of €299 million; the balance of €10 million is to be carried forward.

€0.60 dividend per share

The legal basis for the dividend payment is the HGB unappropriated net income of ThyssenKrupp AG in the amount of €309 million (previous year €257 million). It comprises the net income of ThyssenKrupp AG under German GAAP in the amount of €301 million (previous year €406 million), less €1 million which has been allocated to retained earnings, plus the €9 million carryforward from the previous year. The Executive Board and Supervisory Board will propose to the Annual General Meeting the payment of a dividend in the amount of €0.60 per share, compared with €0.50 per share in the previous year. Of the unappropriated net income of €309 million, an amount of €299 million is to be used to pay a dividend on the 498,358,299 shares eligible for dividend payment as of September 30, 2004. The balance of €10 million is to be carried forward. Should the number of shares eligible for dividend distribution change before the date of the Annual General Meeting due to a change in the number of shares held as treasury stock, the proposed dividend distribution will be adjusted accordingly.

The financial statements of ThyssenKrupp AG are presented in abbreviated form in the following table.

Balance sheet of ThyssenKrupp AG (HGB) million €
			Sept. 30, 2003		Sept. 30, 2004
Investments in non-consolidated subsidiaries			7,373		7,892
Other fixed assets			1,800		1,702
Fixed assets			9,173		9,594
Receivables from non-consolidated subsidiaries			9,522		8,017
Other operating assets			205		760
Operating assets			9,727		8,777
Assets			18,900		18,371
Stockholders' equity			4,976		5,028
Special item with reserve elements			81		59
Accrued liabilities			1,091		1,053
Liabilities to non-consolidated subsidiaries			11,127		10,725
Other liabilities			1,625		1,506
Liabilities			12,752		12,231
Stockholders' equity and liabilities			18,900		18,371

 

Statements of income of ThyssenKrupp AG million €
			2002/2003		2003/2004
Income from investments			1,128		460
Other operating income			328		355
Other expenses and income			(874)		(477)
Income from ordinary activities			582		338
Extraordinary income			(246)		0
Income taxes			70		(37)
Net income			406		301
Allocation to retained earnings			(149)		(1)
Carryforward			0		9
Unappropriated net income			257		309