Glossary

A

Administration and selling costs: Administration costs that cannot be directly assigned to individual products; costs for sales, distribution and advertising. As the sale and distribution of goods represents a major part of trading business, these costs are included under cost of sales rather than selling costs for trading companies.
Accrued pension liabilities: The value of obligations to employees and former employees after they have left the company, e.g. pension payments or one-time payments following the termination of active service. Future payments are discounted to the present value. As valuation is based on the interest rate valid at the time, the value of accrued pension liabilities may fluctuate over time even if there are no changes to the payments that will be made in the future. Changes to the interest rate for the valuation do not lead directly to expense and income in the fiscal year, but may lead to increases or decreases in stockholders' equity.
Alloy: Steels containing additional metallic and/or nonmetallic elements (e.g. carbon, chromium, silicon)
AOD Converter: Special converter for stainless steels
Audit: Examination of a company (division) undertaken by an independent auditor to determine whether defined standards have been observed
Average collection period: Trade accounts receivable divided by sales, multiplied by 360 (the lower the ratio, the faster the customers pay)

C

Capital employed: Interest-bearing invested capital
Cash flow: Balance from the inflow and outflow of cash and cash equivalents over the course of the fiscal year. A distinction is made between net cash provided by operating activities, net cash used in investing activities and net cash used in financing activities. The total of all three cash flows is the free cash flow; this is the increase in the level of cash and cash equivalents at the end of the fiscal year.
Cash flow from investing activity: Cash receipts/payments from investments/disposals
Cash flow from operating activity: Cash receipts/payments, unless caused by investing or financing activities
CAx-technology: Entirety of computer-aided design, engineering, manufacturing and control techniques
Code of Best Practice: Guidelines for corporate governance in exchange-listed German companies, presented by an independent policy commission
Coil: Steel strip wound into a roll
Conference call: Telephone conference, used, for example, for current briefings of analysts
Consolidation: Grouping of all companies within a group as if there were one single company. For legal and tax reasons, groups carry out their activities via legally independent companies. The legally individual companies of a group have business relationships with each other. In order to present the companies "as if they were one single company", these relationships between the subsidiaries must be eliminated; this is called consolidation.
Cost of sales: Costs incurred in the production of the goods and services sold over the course of the fiscal year.
Continuous casting: Process for producing slabs from molten steel. The steel is cast via a tundish into a cooled mold which determines the dimensions (width, thickness) of the slab
Corporate governance: Designation in international parlance for company management and company controlling focused on responsible, long-term value creation
Cost of capital: Strategically defined minimum return required by capital providers
Crude steel: Can be in liquid or solid form. In both cases it is a raw product. In the liquid condition it is used for ingot teeming, continuous casting or cast steel production

D

DAX: DAX®-Index (German Stock Index), compiled by Deutsche Börse, The index reflects the value development of the 30 largest and strongest-selling stocks, including ThyssenKrupp stock
Debt to cash flow ratio: Net financial payables divided by cash flow from operating activity
Delisting: Full or partial withdrawal of a stock corporation from the stock exchange, e.g. withdrawal of listing on a foreign stock exchange
Discontinued operations: Companies that were sold in the fiscal year or whose sale was initiated in the fiscal year. Ongoing earnings and profits or losses from the sale of these companies are always posted separately and after deduction of income taxes.
DJ Germany Titans: Index, compiled by Dow Jones, of Germany's biggest and most liquid stocks, including ThyssenKrupp
Dow Jones STOXX (DJ STOXX): European stock index of Stoxx Ltd.. The founders of Stoxx were Deutsche Börse AG, Bourse de Paris, Schweizer Börse and publishing house Dow Jones and Company
Downstream activities: Further processing operations carried out on flat steel to add value, e.g. coating, steel service center operations, production of tailored blanks

E

E-business: Information sharing, communication and transactions between suppliers, manufacturers or customers via the internet
EBIT: Earnings before interest, taxes
EBITDA: Earnings before interest, taxes, depreciation and amortization
EBIT margin: EBIT divided by sales (the higher the ratio, the higher the earning power)
EBITDA margin: EBITDA divided by sales (the higher the ratio, the higher the earning power)
EBT: Earnings before taxes
EBT margin: EBT divided by sales (the higher the ratio, the higher the earning power)
Economic value added (EVA): Difference between ROCE and cost of capital, multiplied by capital employed. If EVA is positive, returns are higher than the cost of capital
Emerging markets: Emerging economic regions, particularly of the Third World
E-procurement: Purchasing materials using modern electronic media, particularly the internet
Equity ratio: Ratio of balance sheet equity to balance sheet total (the higher the ratio, the lower the indebtedness)
Equity to fixed assets ratio: Stockholders’ equity divided by fixed assets, multiplied by 100
Euro zone: Economic territory of the member states of the European Currency Union

F

Fair disclosure: Disclosure of all information to all stakeholders of an exchange-listed company at the same time
Financial assets: Loans, long-term securities and companies in which an interest of 50% or less is held.
Financial income: Interest expense for financial payables, interest income for cash and cash equivalents and also income from companies in which an interest of 50% or less is held.
First-stage processing: Initial processing of materials in service centers (e.g. blanking, surface treatment)
Free cash flow (before dividend): Net cash from operating activities, less net cash used in investing activities
Full-service supplier: Service company offering customers all required services from one source

G

Gearing: Ratio of financial payables to equity capital (the lower the ratio, the higher the share of equity in the interest-bearing capital employed)
Goodwill: Amount paid in addition to the current market value of assets when purchasing a company. When a company is acquired, all acquired assets and debts are individually revalued. If more than this amount is paid for a company, the difference is capitalized as goodwill. Goodwill represents the advantages and opportunities that cannot be individually identified and arise from the ownership of the company as a whole. Goodwill is not subject to scheduled amortization. However, as for all other assets, the value of the goodwill is reviewed regularly and subjected to impairment if it is too high.
Grain-oriented electrical steel: Steel grade with a special microstructure, developed in a complex manufacturing process, which is mainly used in transformers
Gross income: Sales less cost of goods sold
Gross margin: Ratio of gross income to sales (the higher the ratio, the higher the earnings power from operations)
Group (=ThyssenKrupp): ThyssenKrupp AG and all companies controlled by ThyssenKrupp AG. Under normal circumstances, it is assumed that one company controls another if it holds an interest of more than 50% and thus has more than 50% of the voting rights in the other company.

H

Hydroforming: Innovative forming technology for making extremely complex shapes, e.g. from tubular starting material

I

Income taxes: Taxes on profits paid by consolidated subsidiaries to the local tax authorities. The individual companies of the Group, and sometimes also groups of companies, are liable for tax in the countries in which they have their registered offices. Income taxes thus comprise taxes from the majority of countries in which subsidiaries are active and are oriented to the conditions of the country in which the registered office is located. Tax rebates reduce income taxes. Income taxes do not only include taxes incurred during the fiscal year, but also so-called deferred taxes; these are taxes which have not yet been incurred, but which are expected to be incurred at the balance sheet date.
Internal financing strength: Ratio of net cash from operating activities to net cash used in investing activities
Inventories: Raw materials, work in process and finished products
Inventory turnover: Inventories divided by sales, multiplied by 360 (the lower the ratio, the faster the inventory turnover)
Investment grade: A rating is expressed in a combination of alphanumeric symbols and represents a company's credit standing as assessed by the rating agency. Ratings can be roughly divided into two categories: "Investment grade" (adequate protection) and "Non-investment grade" (speculative).

L

Long Term Management Incentive Plan (LTMI): Scheme awarding stock appreciation rights to Group executives as a capital-market oriented compensation element. The value of the stock appreciation rights is linked to the performance of ThyssenKrupp stock and the Dow Jones STOXX

M

MEKO technology: Shipbuilding using different but standardized modules, e.g. electronics and the ship's technical equipment
Mid Term Incentive Plan (MTI): Mid-term variable compensation for executive board members and other selected executives through stock rights

N

Net cash provided by operating activities: Net cash from business activities, i.e. primarily the inflow and outflow of cash funds from the sale of goods and services and the procurement of the required starting materials and services. Net cash provided by operating activities is usually indirectly derived from net income by re-adding all expense and income that have not led to inflows or outflows of cash and cash equivalents in the fiscal year to net income; the most important item is depreciation/amortization. Inflows and outflows of cash and cash equivalents that have not led to expense in the fiscal year are also added to net income, key items here may include the build-up or reduction of inventories or trade accounts receivable and payable.
Net cash used in financing activities: Inflow and outflow of cash and cash equivalents resulting from the borrowing and repayment of financial payables, the payment of interest, the investment of cash and cash equivalents and from changes to stockholders' equity with cash effect, as well as dividend payments.
Net cash used in investing activities: Inflow and outflow of cash and cash equivalents from the purchase and sale of property, plant and equipment, equity interests and companies
Net financial payables: Amount by which financial payables exceed cash and cash equivalents of the company. Financial payables are debts vis-à-vis banks and holders of company bonds. Cash and cash equivalents primarily comprise sight deposits at banks and securities classified as operating assets.
Net financial receivables: Amount by which cash and cash equivalents exceed the financial payables of the company. Cash and cash equivalents primarily comprise sight deposits at banks and securities classified as operating assets. Financial payables are debts vis-à-vis banks and holders of company bonds.
Net income: Total earnings, profit or loss, after the deduction of taxes and including earnings from discontinued operations.

O

One-stop shopping: Delivery of all products and services from one source
One-to-one marketing: Customized sales advice and support
Other assets: Primarily licenses and rights, receivables not arising from trade accounts, deferred tax assets, prepaid expenses and deferred charges.
Other operating income: Expense and income incurred through operations but not directly attributable to production costs for goods and services and also not assignable to administration and selling costs. Typical examples are research and development expense, impairment charges, restructuring expense, e.g. expense for the closure of plants, income from the sale of machines and real estate, rental income, income from damage payments from insurance.
Other stockholders' equity and liabilities: Accruals and payables from obligations not arising directly from trade accounts such as warranty obligations, tax liabilities, as well as e.g. deferred tax liabilities and deferred income.

P

Page impressions: Number of web pages accessed by users
Pick-up truck: Light commercial vehicle with a small open cargo space
Property, plant and equipment: Machines and equipment that the company uses to produce goods and perform services.
Purchase accounting: US GAAP accounting method for accounting for a company acquisition

R

Return on equity: Ratio of earnings before taxes to equity capital
ROCE: Return on capital employed

S

Sales revenue: Total amount of money received and requests for payment generated over the course of the fiscal year through the sale of goods and services.
Scrap surcharge: Surcharge linked to development of scrap prices
Sheet: Flat product in thicknesses from 0.35 to less than 3.00 mm: Cold-rolled flat products of mild or high-strength steels for cold forming. Usually metallic or organic coated
Simultaneous engineering: Close technical cooperation e.g. with the auto industry
SMC: Sheet Molded Compound, fiber reinforced plastic material
Sport utility vehicle: Multi purpose vehicle, e.g. off-road vehicle
Spot trading: Buying and selling commodities for cash and immediate delivery
Spread: Range of price fluctuations
Stakeholders: Groups within society which contribute to a company’s success and place demands on the company in different ways (e.g. stockholders, banks, customers, employees, government agencies)
Steel service centers: Modern efficient processing operations offering a wide range of sheet products and service capabilities
Stockholders' equity: Net assets of the company to which stockholders are entitled. Net assets are understood as the difference between assets and debts. In arithmetical terms, net assets correspond to the total capital originally paid in by the stockholders, profits generated over time that have not been paid out as dividends, minus any losses incurred and certain changes in stockholders' equity arising from the valuation of pensions, securities and consolidation.

T

Tailored blank: Metal blank comprising individual steel sheets of different grade, gauge and finish which are welded together and are suitable for deep drawing
ThyssenKrupp best: Program to improve efficiency in all areas of the company – best stands for “business excellence in service and technology”
Trade accounts payable: Value of obligations vis-à-vis the suppliers of goods and services.
Trade accounts receivable: Payment requests vis-à-vis customers for goods delivered or services performed.
Triad: Joint term for the economic areas USA, European Union and Japan

U

ULSAB: Acronym for Ultralight Steel Auto Body, development project of the international steel industry for light-weight solutions in auto manufacture
US GAAP: United States Generally Accepted Accounting Principles

V

Value reporting: Communication with the public and the financial market using value-oriented indicators
Volatility: Intensity of price fluctuations of a stock, currency or bulk commodity compared to the market development