SUBSEQUENT EVENTS, OPPORTUNITIES AND OUTLOOK

There were no events requiring disclosure.

The upswing in the global economy will continue in 2007. At 4.5%, world GDP growth will be only slightly lower than in 2006 (5.2%). The risks to world economic expansion from high raw material and oil prices have diminished somewhat recently.

In the industrialized countries, economic growth is expected to cool. Higher interest rates and the weakness of the property market are dampening growth prospects in the USA. Weaker growth is forecast for Japan, too, due to slowing investment and exports. A similar pattern is expected in the euro zone. In Germany, the pace of growth will slow at the start of 2007 due to the increase in VAT. For the developing countries of Asia and most countries of Latin America, Central and Eastern Europe, we expect the strong growth momentum to continue.

We expect the following developments and opportunities for ThyssenKrupp on the major markets:

  • The prospects for the steel market remain positive overall. We expect global demand for rolled steel to increase further in 2007, still driven mainly by the emerging countries of Asia and Latin America and the CIS states. In Europe and the NAFTA region demand is expected to remain steady or fall slightly due to the somewhat subdued economic outlook and the expected reduction of stocks. However, steel consumption is expected to increase further. Output will rise primarily in the emerging countries such as China, India and Brazil as major new capacities go into operation.
  • We expect demand for stainless steel and the high-performance materials nickel alloys and titanium to continue to rise in 2007, both in Europe and North America and also in Asia, in particular China. However, whereas in China most producers are operating below capacity due to strong capacity growth in recent years, plants in Europe and the USA have good workloads.
  • We expect a further slight increase in auto production in 2007. The new production capacities are increasingly being installed in the emerging Asian countries and in Central and Eastern Europe. These countries will significantly expand their vehicle production in 2007. In the NAFTA region, Japan and Western Europe, volumes will decrease slightly. As a result of weaker domestic demand, German vehicle production is expected to fall
  • Due to the slightly reduced pace of global expansion, growth in the mechanical engineering sector in 2007 is not expected to be as strong as the year before. There are signs of cooling in the USA and Western Europe. In China, persistent high investment will continue to ensure strong growth.
  • The international construction market will remain characterized by large regional differences in 2007. The euro zone will continue to experience weak growth, and in Germany a further slight rise in construction output is expected. In the USA, however, construction activity is likely to cool further. Growth will remain focused on the countries of Eastern Europe as well as India and China.

We expect the generally positive business situation to continue in the further course of the year. For the full year 2006/2007 we forecast sales of €48 to 49 billion. Our sustainable goal for earnings before taxes is € 2.5 billion. After exceeding this figure significantly in 2005/2006 we are confident of doing the same in the current fiscal year. A similar level is targeted for 2007/2008. This is based on the assumption that the world economy remains stable and energy prices stay within manageable limits.