Letter to stockholders

This Annual Report informs you about your Company's most successful fiscal year since the merger in 1999. We want you to share in this success and at the same time thank you for your confidence in ThyssenKrupp: We will be proposing to the Annual General Meeting that the dividend for fiscal year 2004/2005 be increased by €0.10 to €0.70 per share. In addition, there will be a special dividend of €0.10 per share as a result of the virtually completed divestment program.

How did we perform in 2004/2005? The Group achieved sales of €42.1 billion, 13% higher than the year before. Income before taxes increased from €1.5 billion to a new record high of €1.8 billion. Earnings per share climbed from €1.81 to €2.05. ROCE reached 15%, up from 12% in the previous year. Net financial payables were completely eliminated. At September 30, 2005 we report for the first time net financial receivables in the amount of €9 million. These are the highlights of the fiscal year; more detailed information can be found in this Annual Report.

All segments further strengthened their market positions and increased sales. Steel, Technologies and Services recorded pleasing earnings growth. In a difficult market environment, Elevator's operating earnings were unchanged from the year before, while earnings at Automotive were impacted by extensive restructuring measures in the USA. The biggest contribution to Group profit came from Steel. This was not just down to the strong steel market, since raw material and energy prices also increased substantially. Rather, it reflects the continued success of our internal improvement programs to boost productivity and efficiency. But that doesn't just apply to Steel. Performance and efficiency gains were a central theme in all segments, especially in connection with the ThyssenKrupp best program.

What progress have we made in implementing our strategy? In 2003 we launched the "Divest 33+" program to dispose of more than 30 non-strategic interests. We virtually completed this program in the reporting period. Altogether since the merger we have acquired companies with sales of €7.1 billion and disposed of others with the same volume of sales. The biggest projects in the reporting year were the formation of the shipyard alliance following the acquisition of a majority shareholding in Howaldtswerke-Deutsche Werft and the sale of the Residential Real Estate activities. The phase of consolidation is thus largely completed. We have focused our operations on core businesses and at the same time created new scope for future strategic acquisitions.

What further strategic plans do we have? We are now moving out of the consolidation phase into a phase of profitable, sustainable growth. We will further expand our activities in the three key areas Steel, Capital Goods and Services. Our goal remains to continuously increase the earning power and value of your Company.

In the Steel area we have reorganized and focused our activities, creating two separate segments – Steel and Stainless – to take into account the different market conditions and production processes for carbon and stainless steel. This will also allow us to participate in a more targeted way in the consolidation of the international steel industry. For more information on our plans for the steel mill project in Brazil, aimed at exploiting the growth opportunities in North America and in the enlarged EU market, please turn to the section on Steel. At Automotive the restructuring and concentration on core businesses must be continued. In the future the Technologies segment will be based on the high-earning pillars Plant Technology, Marine Systems, and Mechanical Engineering. Elevator will round out its new installation and service businesses and is working to increase its market share. The Services segment aims to achieve further growth, primarily in North America and Eastern Europe.

Through organic growth, strategic acquisitions and an even stronger service focus in all business activities, we aim to boost ThyssenKrupp's sales in the medium term to €45-50 billion. Our target for earnings before taxes remains around €1.5 billion. We aim to achieve this target again in fiscal year 2005/2006 – excluding major nonrecurring effects.

The success and future of a technology-oriented company like ThyssenKrupp ultimately depend on its ability to innovate. Research and development is therefore a top priority. We conduct numerous closely customer-related research projects, cooperate with research institutes and universities, and foster the creativity of our employees with the annual ThyssenKrupp Innovation Contest. R&D expenditures – currently around 1.5% of the Group's sales – will be increased each year in the future to over 2% in the medium term. We are continuing our efforts to increase public acceptance and enthusiasm for technology. Following the overwhelming response to our Ideas Park in Gelsenkirchen in September 2004, we are now working on the next Ideas Park, which will take place in May 2006 in Hanover.

What does ThyssenKrupp do to earn your confidence? Six years after the merger of Thyssen and Krupp, it is clear what your Company stands for:

• competency in Steel, Capital Goods and Services with profitable business activities and leading world market positions;
• a solid corporate strategy focused on core businesses and core competencies in the interest of a sustained increase in the value of the enterprise;
• good and responsible corporate governance supported by open and comprehensive communication.

We have already achieved a great deal in all areas of the Group. This spurs us on to do even better in the future – as a creative problem solver for our customers, as an attractive employer, as a responsible corporate citizen, and above all as a long-term profitable investment for you, our stockholders.

Sincerely yours,

Dr.-Ing. Ekkehard D. Schulz, Chairman of the Executive Board

Düsseldorf, November 2005