Ad Hoc Releases, 2009-03-19, 10:49 AM
Strategic reorganization of ThyssenKrupp
The economic situation in almost all countries and industries has deteriorated in recent weeks with even greater speed and severity than expected. The global economy finds itself in a deep recession. ThyssenKrupp is adapting to the changed economic environment and positioning itself more strongly as an integrated materials and technology Group. To this end the Group is to be reorganized into two divisions. The aim is to sharpen the focus of business activity and create a leaner, more efficient structure, including in the administrative areas. This is expected to yield additional sustainable cost savings of up to €500 million per year.
In an extraordinary meeting on March 27, 2009, the Supervisory Board of ThyssenKrupp AG will be requested to approve the following items:
ThyssenKrupp will reorganize the five segments Steel, Stainless, Technologies, Elevator and Services into two divisions. The Steel, Stainless and Services segments will be combined in a new Materials division. The Technologies and Elevator segments will be joined to form a new Technologies division.
From April 1, 2009 the Steel segment headed to date by Dr. Karl-Ulrich Köhler (52) and the Stainless segment headed by Jürgen H. Fechter (46) will both be managed by Edwin Eichler (50), Executive Board Chairman of ThyssenKrupp Services. Also as of April 1, 2009, the Elevator segment headed to date by Edwin Eichler will be managed by Dr. Olaf Berlien (46), who will also remain Executive Board Chairman of ThyssenKrupp Technologies.
The new Group structure is to be implemented as of the beginning of the new fiscal year on October 1, 2009.
The planned adjustments at all levels of the administrative departments will also be reflected in the Executive Board of ThyssenKrupp AG. Jürgen H. Fechter and Dr. Karl-Ulrich Köhler, both members of the Executive Board of ThyssenKrupp AG, are to stand down from the Executive Board by mutual agreement at March 31, 2009. They will continue to be available to the Group in an advisory capacity. No reappointment will be made for the position held by Dr. Wolfram Mörsdorf (60), whose term of office is due to end on April 14, 2009. In accordance with the resolution of the Supervisory Board and as already reported at the Annual General Meeting on January 23, Dr. Ulrich Middelmann (64), Vice Chairman of the Executive Board of ThyssenKrupp AG, will stand down from the Executive Board of ThyssenKrupp AG at the close of the Annual General Meeting on January 21, 2010.
Dr. Alan Hippe (42) - Chief Financial Officer of ThyssenKrupp AG effective April 1, 2009 - will take over as of this date responsibility for Controlling, Accounting and Financial Reporting, Taxes and Customs, Mergers & Acquisitions, Materials Management as well as Corporate Finance and Investor Relations. From April 1, 2009 until his retirement, Dr. Ulrich Middelmann will concentrate on the implementation of the new Group structure and on the corporate program ThyssenKrupp PLUS. He will also be in charge of Compliance.
“With this structural and personnel reorganization, ThyssenKrupp will be able to respond more quickly to the market and implement strategic measures more efficiently. This means we are in the best position to emerge stronger from this difficult economic situation,” says ThyssenKrupp’s Executive Board Chairman Dr. Ekkehard Schulz.
Provided the economic situation improves in the 2nd half of the year as a result among other things of the economic stimulus programs introduced, ThyssenKrupp expects to report positive operating earnings - before project and restructuring costs - for the 2008/2009 fiscal year. Earnings will be significantly affected by project costs for the new steel plants, restructuring expenditure among other things for personnel measures, and write-downs. The drastic slump in demand for carbon steel, stainless steel and in international materials distribution is having a severe impact on business at ThyssenKrupp. Some areas of the capital goods business - in particular automotive supplies and civil shipbuilding - are also showing a worse than expected earnings development. Earnings in the Elevator segment remain very encouraging and are fully in line with expectations. Overall ThyssenKrupp currently expects to report only slightly positive operating earnings - before project and restructuring costs - in the 1st half of the current fiscal year 2008/09. For the 2nd quarter a loss is therefore expected. In particular the severe capacity underutilization and price pressure as well as anticipated further write-downs on inventories will weigh heavily on results.