4. Balance sheet presentation

The following balance sheet presentation includes assets and liabilities held for sale which have been reported separately in the Group's consolidated balance sheets.

The balance sheet total as well as significant balance sheet line items, particularly, inventories, trade accounts receivable and payable, payables from work in progress and stockholders' equity increased considerably compared to September 30, 2004. This mainly resulted from the economic situation of the steel business and the further price increase for raw materials especially nonferrous metals. The acquisition of the HDW Shipyard Group also led to a significant increase of major balance sheet line items. Fixed assets and net financial payables declined due to measures taken to reduce tied-up capital and through disposals. Shifts in exchange rate relations, primarily the relation of the US dollar to the Euro, which decreased from 1.233 €/US dollar as of September 30, 2004 to 1.205 €/US dollar as of September 30, 2005, led to an increase of the balance sheet total by €301 million. Income tax liabilities remained nearly constant whereas deferred income tax liabilities and deferred income tax assets increased. The balance sheet total increased by €5,098 million to €36,239 million.

Fixed assets decreased by €393 million or 2.6%, to €14,788 million. Taking into account the positive currency effects of €211 million, fixed assets adjusted by these effects declined by €604 million. Additions of €1,678 million fall below depreciation of €2,198 million by €520 million. Disposals amounted to €315 million. Changes in the scope of consolidation, i.e. acquisition and divestitures of companies, increased the fixed assets by €231 million. Major individual transactions consisted of the acquisition of the shipyard companies HDW Group resulting in an increase of €1,433 million and the divestiture of the residential real estate business resulting in a decline of €1,045 million.

Inventories climbed by €1,333 million to €7,673 million.

million €

 

 

  

Sept. 30, 2004

  

Sept. 30, 2005

  

Change

Steel

 

  

3,037

  

3,633

  

596

Automotive

 

  

667

  

809

  

142

Technologies

 

  

995

  

1,542

  

547

Elevator

 

  

287

  

354

  

67

Services

 

  

1,277

  

1,282

  

5

Corporate/Consolidation

 

  

77

  

53

  

(24)

Total

 

  

6,340

  

7,673

  

1,333

The increase in the Steel segment resulted primarily from the rise of raw material prices as well as from the increased quantity structure, which was partially offset by the disposal of activities amounting to €281 million. Automotive posted an increase in inventories due to business expansion and slipping rate of turnover. Technologies was mainly impacted by the acquisition of HDW.

The trade accounts receivable as of September 30, 2005 were up by €297 million compared to September 30, 2004. It should be noted that the amount of sold receivables as of September 30, 2005 remained nearly unchanged compared to the previous year. The increase in the Steel segment was attributable to the strong economic situation as well as to the passing of increased raw material prices. Disposals of activities partly offset this development by €127 million. The Automotive segment business expansion also led to an increase of trade accounts receivable. The upswing in volume sales of the last month of the fiscal year led to an increase in the Elevator segment. The Technologies segment was again mainly impacted by the acquisition of HDW which resulted in an increase by €195 million. Offsetting effects resulted from the disposal of various activities in the Technologies and Services segments.

million €

 

 

  

Sept. 30, 2004

  

Sept. 30, 2005

  

Change

Steel

 

  

1,531

  

1,582

  

51

Automotive

 

  

1,076

  

1,229

  

153

Technologies

 

  

845

  

921

  

76

Elevator

 

  

725

  

803

  

78

Services

 

  

1,604

  

1,571

  

(33)

Corporate/Consolidation

 

  

48

  

20

  

(28)

Total

 

  

5,829

  

6,126

  

297

Cash and cash equivalents increased due to cash provided by operating acitivities and through proceeds from disposals by €3,320 million to €4,715 million.

Deferred income tax assets climbed by €330 million, whereas deferred income tax liabilities increased by €543 million. The increase resulted primarily from the acquisition of the HDW Group and the strong increase of the pension obligation.

Stockholders' equity increased by €444 million, to €8,771 million. The major reason for this rise was net income achieved during fiscal year 2004/05. Whereas the decrease in accumulated other comprehensive income, resulting from the increase in additional minimum liabilities associated with accrued pensions and similar obligations, decreased equity by €(547) million. Dividend payment for fiscal 2003/04 also reduced equity by €299 million whereas currency differences increased equity by €176 million.

Accrued pensions and similar obligations in the reporting period climbed by €851 million to €8,072 million. Taking into account a currency effect of €35 million, accrued pensions and similar obligations increased by €816 million. This increase resulted from the dramatic drop of the discount rate in all relevant currency zones. The higher market value of plan assets of the funded pensions plans in the USA, Canada and UK as of the measurement date of June 30 reduced this effect by €185 million. Both factors led to increased minimum liabilities, adjusted by currency effects, of €895 million.

Trade accounts payable increased by €375 million. This line item was also impacted by the previously described business expansion and price increases. In the Steel segment this effect has been reduced by the disposal of activities. In the Services segment trade accounts payable raised mainly due to longer period of payment due to changed supplier selection and due to general payment periods. In the Technologies segments the increase was mainly caused by the acquisition of HDW Group. The changed financing strategy of the Dongyang Group led to an increase in the Elevator segment.

million €

 

 

  

Sept. 30, 2004

  

Sept. 30, 2005

  

Change

Steel

 

  

1,293

  

1,271

  

(22)

Automotive

 

  

825

  

917

  

92

Technologies

 

  

600

  

763

  

163

Elevator

 

  

234

  

281

  

47

Services

 

  

695

  

803

  

108

Corporate/Consolidation

 

  

31

  

18

  

(13)

Total

 

  

3,678

  

4,053

  

375

The acquisition of HDW Group mainly led to an increase of payables from work in progress by €1,577 million. Other provisions were €703 million higher than at the end of the previous year, whereof €485 million are caused by the Technologies segment especially due to the first time consolidation of HDW Group. Additionally the negative fair market values of derivative instruments within ThyssenKrupp Group climbed by €109 million.

Gross financial payables increased by €544 million from €4,270 million as of September 30, 2004 to €4,814 million as of September 30, 2005. Net financial payables, i.e. gross financial payables less cash and cash equivalents and marketable securities, declined by €2,842 million from €2,833 million to Net financial receivables of €9 million. Net Cash provided by operating activities led to a decrease of €2,183 million, additionally capital expenditure and disposals decreased the balance by €963. The dividend payment for fiscal 2003/2004 resulted in an increase of €299 million. Gearing, i.e. the ratio of net financial payables and stockholders' equity, improved to (0.1)% against 34,0% as of the previous year.

Net financial payables in million €