Ad Hoc Releases, 1999-11-16, 01:00 AM
The Executive Board of ThyssenKrupp AG will propose the following measures for the strategic realignment of the Group to the Supervisory Board in its meeting on December 3, 1999:
1. Focusing of the divisions
Alongside Steel, the 23 current divisions are to be reduced to six core businesses plus Real Estate. A volume of investment of more than DM12 billion is planned in the next three years. Development opportunities will be sought outside the ThyssenKrupp Group for activities with aggregate annual sales of over DM10 billion.
2. Strengthening of Steel through flotation
ThyssenKrupp Steel is to be floated on the stock market in the year 2000. Part of the shares in the 25% to 35% float will be from Thyssen Krupp AG`s shareholding, with further shares stemming from a capital increase. This will generate liquidity both in the Group and in the steel operations. For ThyssenKrupp Steel, the flotation will create the conditions to assume a leading position in worldwide competition.
3. Stronger service orientation
Production-based business in the ThyssenKrupp Group will be supplemented by product-related service activities with high value-adding potential. This will include entry into the `e-commerce` sector.
4. Organizational restructuring
The business segments and divisions will be combined to adapt the organizational structure to the focusing on core businesses.
5. Introduction of US GAAP
From the beginning of the new fiscal year (October 1, 1999) Group accounting will be switched to US GAAP, thereby enhancing internal and external transparency.
6. Stock options
A long term management incentive plan for around 200 executives will be based on the relative and absolute performance of ThyssenKrupp shares. This capital market-oriented performance incentive is aimed at accelerating realization of the Group`s realignment.
In the medium term, the ThyssenKrupp Group aims to achieve the following targets:
- Income before taxes > DM 3 bn
- Group ROCE > 15%
- Return on equity > 30%
- EVA > DM1 bn
- Free cash flow (after dividend) > DM1.5 bn
- Gearing < 60%
KEY FIGURES FOR 1998/99
On the basis of figures calculated under German GAAP, the key figures for the 1998/99 fiscal year are as follows:
Order intake (around DM62 billion) and sales (around DM63 billion) are slightly down on last time. Income before taxes under German GAAP is well over DM1 billion and will allow the distribution of an appropriate dividend (for tax reasons without a tax credit).
Further information on the strategic realignment of the ThyssenKrupp Group and the outlook on the annual financial statements for fiscal 1998/99 can be downloaded from the Internet at http://www.thyssenkrupp.com.
A press conference on the subject will be held today, Tuesday, November 16, 1999, at 9.00 a.m. at Thyssen Krupp AG, August-Thyssen-Strasse 1, 40221 Düsseldorf.
For further information please contact Dr. Jürgen Claassen (tel. +49 211 824-36001) and Dr. Peter Blau (tel. +49 211 824-38922).