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Ad Hoc Releases, 2009-05-12, 03:28 PM

ThyssenKrupp in the 1st half 2008/2009 and outlook for the full fiscal year

The economic fundamentals have deteriorated significantly in recent months. The collapse in demand and sharply falling prices on the markets for carbon and stainless steel and international materials services as well as declines on the international auto markets and in civil shipbuilding impacted ThyssenKrupp heavily. In the 1st half 2008/2009 ThyssenKrupp’s sales were down by 16% and orders by 25% year-on-year. The decline was particularly severe in the 2nd fiscal quarter.

The Group’s 1st half earnings before taxes also fell sharply to a loss of €215 million. Earnings were impacted by major nonrecurring items totaling €265 million, in particular pre-operating costs for the new plants in Brazil and the USA of €109 million. The Company also incurred impairment charges on property, plant and equipment and restructuring expenses.

Steel’s earnings were still positive in both the 2nd quarter and the 1st half, while Stainless returned a loss in both quarters. The 1st half results of Stainless and Services were additionally impacted by writedowns on inventories. Due to substantial charges at the shipyards and declining business in the automotive and construction machinery sectors, Technologies also recorded a loss in the 2nd quarter, though income for the first six months was still positive. Elevator delivered a good earnings contribution; profits increased in all business units. Services reported a loss for the first half year.

Highlights for the 1st half 2008/2009:
・ Order intake decreased by 25% to €20.5 billion (prior year: €27.4 billion).
・ Sales fell by 16 % to €21.4 billion (€25.5 billion).
・ EBITDA came to €906 million, compared with €2,280 million a year earlier.
・ Earnings before taxes amounted to €(215) million, down from €1,388 million.
・ Earnings before taxes and major nonrecurring items amounted to €50 million (prior year: €1,499 million).
・ Earnings per share dropped from €1.85 to €(0.35).
・ Net financial debt at March 31, 2009 was €3,687 million. On September 30, 2008 we reported net financial debt of €1,584 million. On March 31, 2008 net financial debt stood at €1,988 million.
Highlights for the 2nd quarter 2008/2009:
・ Order intake decreased by 46% to €7.6 billion (prior year: €14.1 billion).
・ Sales fell by 25% to €9.9 billion (€13.2 billion).
・ EBITDA came to €142 million, compared with €1,197 million in the corresponding prior-year period.
・ Earnings before taxes amounted to €(455) million, down from €742 million.
・ Earnings before taxes and major nonrecurring items amounted to €(283) million (prior year: €784 million).
・ Earnings per share dropped from €1.00 to €(0.71).
ThyssenKrupp expects a significant drop in order intake and sales for full fiscal year 2008/2009. This will be reflected in earnings. Positive effects from falling input material prices, mainly in the 2nd half, will only partly offset price and volume declines.

ThyssenKrupp expects to end the current fiscal year with a loss before taxes and major nonrecurring items – restructuring expense, project costs and impairment charges. Depending on future economic developments, a loss before taxes and major nonrecurring items in the mid to high three-digit-million euro range is expected. To counter the crisis, ThyssenKrupp is implementing an extensive package of cost-cutting measures in the current fiscal year. In addition, the Group is to undergo strategic reorganization. These measures will make a key contribution to significantly strengthening the Group’s future earnings power. Targeted steps are also being taken to significantly reduce net working capital. Measures are being implemented to reduce or postpone the investment program.

Online and downloadable versions of the full interim report are available in German and English at http://www.thyssenkrupp.com.

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