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Capital market-relevant press releases, 2011-05-13, 07:30 AM

ThyssenKrupp on growth course in first half 2010/2011

ThyssenKrupp continued its upward trend in the 1st half 2010/2011 (October 01 – March 31, 2011). Orders and sales grew year-on-year at high double-digit rates. Order intake rose by 22% to €24.1 billion and sales by 21% to €23.6 billion. Almost all areas of the Group contributed to this growth.

The measures to improve the Group’s earnings structure are having a clear positive effect: Earnings before interest and taxes (EBIT) were up 22% from €631 million in the prior year to €770 million.

The increase in earnings was achieved despite the fact that 1st-half EBIT was impacted much more strongly by mainly ramp-up related losses of €697 million (prior year: €150 million) in the Steel Americas business area. ThyssenKrupp expects significant improvements at Steel Americas from the next quarter, as the second coke oven battery started operation at the end of April.

All business areas with the exception of Steel Americas made strong positive earnings contributions. The negative EBIT of Steel Americas was more than offset by the €872 million earnings of the other Materials business areas. The Technologies business areas achieved EBIT of €935 million. This was partly offset by Corporate costs and consolidation items of €340 million.

EBIT in the first six months of the prior year included a €61 million gain from special items, whereas there have been no special items in the current fiscal year to date. Adjusted EBIT increased by 35% from €570 million to €770 million.

Dr. Heinrich Hiesinger, Chairman of the Executive Board of ThyssenKrupp AG, believes the Group is on track to achieve its ambitious targets for the 2010/2011 fiscal year: “Our structural improvement programs are taking effect and demand in our core markets and key customer sectors is generally encouraging. We are profiting from rising volumes and prices in the materials and components business. The elevator and plant engineering businesses have strong orders in hand and high earnings quality, allowing them to plan with confidence.”

In fiscal 2010/2011 ThyssenKrupp expects an increase in sales by 10% to 15% (2009/2010: €42.6 billion). Earnings are expected to grow faster than sales. This will follow from further operating improvements and the recovery of sales markets, which will more than offset the considerable negative contribution of the Steel Americas business area in the higher three-digit million euro range. The upward trend in all the other business areas reaffirms expectations that adjusted earnings before interest and taxes will be around €2 billion (2009/2010: €1.2 billion).

Highlights for the first half 2010/2011 (October 01, 2010 – March 31, 2011) and the second quarter 2010/2011 (January 01, 2011 – March 31, 2011):
・ Order intake increased to €24,108 million, a 22% or €4,407 million increase compared with the first half of the prior year. Second-quarter orders also picked up appreciably year-on-year, showing a 24% improvement at €12,848 million.

・ First-half sales rose by 21% or €4,178 million to €23,636 million. Second-quarter sales were also up 21% from the prior year at €12,266 million.

・ EBITDA came to €1,577 million compared with €1,305 million a year earlier. 2nd-quarter EBITDA was 50% higher than the year before at €932 million.

・ First-half EBIT improved from €631 million to €770 million. 2nd-quarter EBIT increased by 79% from €278 million to €497 million.

・ EBIT margin rose to 3.3% from 3.2% the year before. In the 2nd quarter the margin was 4.1% compared with 2.8% in the prior-year quarter.

・ As there were no special items, adjusted EBIT likewise came to €770 million, compared with €570 million a year earlier. In the 2nd quarter 2009/2010 the Group reported adjusted EBIT of €293 million – this figure climbed 70% to €497 million in the 2nd quarter 2010/2011.

・ EBT came to €497 million, compared with €504 million a year earlier. In the 2nd quarter EBT was €352 million, a year-on-year increase of 84%.

・ At €497 million, adjusted EBT was higher than the prior-year figure of €443 million and at €352 million in the 2nd quarter showed a considerable year-on-year increase of 71%.
・ Earnings per share amounted to €0.89, compared with €0.80 in the prior year. At €0.58, the figure for the 2nd quarter showed a significant 29% improvement on the prior year.

・ Net financial debt at March 31, 2011 was €6,492 million, an increase of €2,712 million compared with September 30, 2010. The increase is primarily due to the high borrowing requirements in connection with the investments for the new carbon and stainless steel plants in Brazil and the USA, and to the increase in net working capital (NWC) for the ramp-up of these plants. In addition, the significant rise in demand required a corresponding increase in inventories. Not least, the substantial rises in raw material prices had the effect of increasing NWC. On March 31, 2010 net financial debt stood at €2,652 million.
Dr. Heinrich Hiesinger, Chairman of the Executive Board of ThyssenKrupp AG: “We are systematically continuing our structural improvement programs. Reducing our net financial debt remains our number-one priority. At the same time we want to achieve further growth in our highly profitable core businesses so as to continuously increase the value of our enterprise. We are presenting details of this forward strategy to the Supervisory Board today.”

The full interim report is available in German and English for viewing online and downloading at http://www.thyssenkrupp.com.

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