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Capital market-relevant press releases, 2000-12-08, 01:00 AM

Supervisory Board supports adjustment

Pre-tax earnings in fiscal 1999/2000 over 1 bn euros

Dividend per share of 0.75 euros proposed

In its meeting on December 8, 2000 the Supervisory Board of ThyssenKrupp AG approved the adjustment of the plan of November 1999 and will support the Executive Board in its implementation.

As an international industrial group ThyssenKrupp has capabilities in three main areas, Steel, Capital Goods and Services, and holds top three positions in most of its activities. The six segments Steel, Automotive, Elevators, Invest, Materials and Serv, which are to be run directly by ThyssenKrupp AG, will be further developed in line with their specific particularities under an active portfolio management program.

The new segment Invest will combine ThyssenKrupp's machinery and systems activities where the Group already holds strong market positions on a regional and global basis. These activities include Production Systems and Components as well as Shipyards and Engineering. The companies of this segment will be further developed in accordance with their capabilities, and in addition tight portfolio management will result in higher value added here too.

The previous management principle according to which the major operating units are represented by their executive board chairmen on the Executive Board of ThyssenKrupp AG will be continued unchanged. Accordingly, Steel will be headed by Prof. Dr. Ekkehard Schulz, concurrently Chairman of the Executive Board of ThyssenKrupp AG, Automotive by Dr. Gerhard Cromme, likewise concurrently Chairman of the Executive Board of ThyssenKrupp AG, Invest by Prof. Dr. Eckhard Rohkamm, and Materials by Dr. Hans-Erich Forster. Dr. Hans-Erich Forster will chair the supervisory boards of the Elevators and Serv segments and represent them on the Executive Board of ThyssenKrupp AG.

In fiscal 1999/2000 ThyssenKrupp achieved earnings before taxes and minority interest of just under 1.1 bn euros (provisional figure, unaudited). EBITDA (earnings before interest, tax, depreciation and amortization) reached 3.4 bn euros and thus exceeded the Group's 3 bn euro medium-term target.

Order intake in 1999/2000 increased by 22% to 38.9 bn euros. Almost all segments recorded strong double-digit growth rates. The figures are based on the previous organizational structure.

Net sales increased by 4.8 bn euros or 15% to 37.2 bn euros. All segments contributed to this rise.

Buoyed by the upswing on the steel market, Steel in particular recorded a strong expansion in sales based on positive volume and price developments. These are also the main reasons for the distinct rise in earnings.

Automotive achieved improved sales thanks to continuing high orders in Germany, the easing of the situation on the Brazilian automobile market and record production figures in the American market for sport utility vehicles. Earnings were at roughly the same level as the year before.

Elevators recorded sales growth as a result in particular of business in North America and the improved market position in Latin America. Earnings were also higher.

Against weak world demand for machine tools, Production Systems managed to increase its sales but posted a clear loss.

Despite continued weak building activity in Germany and tight competition and prices for high-value engineering components, sales and earnings in the Components segment increased.

Benefiting from strong volume and price growth on the international materials markets, MaterialsServices recorded an increase in sales and earnings.

In FacilitiesServices the improvement in sales is mainly attributable to new acquisitions in the year under review. Earnings were at roughly the same level as the previous year.

In Real Estate sales decreased. Earnings were at the prior-year level.

The engineering activities grouped in Others had to contend with a difficult market. Sales reached the level of the previous year. Earnings while down were almost breakeven. The activities of Plastics Machinery, Shipyards, Civil Engineering and Krupp Seeschiffahrt are recorded under Remaining Others. Shipyards in particular performed well, once again returning good earnings. Civil Engineering, which includes the Transrapid activities, posted a loss. The high profit in Plastics Machinery reflects the gain on the disposal of Krupp Kunststofftechnik.

Corporate includes companies which carry out central Group administration functions including Group financing and currency hedging. This unit's earnings were distinctly negative.

On September 30, 2000 ThyssenKrupp had 193,316 employees worldwide, as against 184,770 on September 30, 1999. The increase is the result of acquisitions.

The economic outlook for fiscal 2000/2001 is positive overall. All the major world regions are expected to continue on a growth course. While cooling down to some extent, the USA, too, expects continued growth rates. The economic climate in the euro zone will also remain favorable. Oil prices represent a risk factor which may pose a threat to the continued upswing.

Subject to this reservation, ThyssenKrupp sees good sales opportunities on the relevant markets for the 2000/2001 fiscal year. International steel demand continues to rise, while in Germany steel consumption is expected to be slightly higher. In the auto industry growth will mainly stem from the countries of Asia and Latin America; production in North America and western Europe will not reach the high level of the year 2000. Production in the mechanical engineering industry is set to improve further thanks to lively investment growth worldwide. For the German building industry, however, the prospects remain subdued.

ThyssenKrupp has made a successful start to fiscal 2000/2001, with sales and earnings showing a positive trend. We are confident that this trend will continue in the further course of the fiscal year. Against this background ThyssenKrupp expects a further increase in full-year earnings for 2000/2001. Our point of orientation is the pre-tax earnings of 1.3 bn euros achieved in 1997/98.

The good trend in earnings, the program already started to reduce capital employed in operating assets and the disposals in connection with the active portfolio management program will allow us to reduce net financial debt by 2 bn euros in the medium term. The Group also has enough flexibility to carry out even larger acquisitions to strengthen its activities.

In the Supervisory Board meeting on January 10, 2001, the Executive Board will propose a dividend rounded up to 0.75 euros per share for fiscal 1999/2000 for resolution at the Annual Stockholders' Meeting on March 2, 2001. This dividend takes into account the company's positive business performance as well as an appropriate allocation to reserves and at the same time meets the demand for dividend continuity. As in the previous year, because of the tax situation the dividend payment will not carry a tax credit.

The consolidated financial statements for the year ended September 30, 2000 will be presented in detail at the Annual Press Conference and the analysts' meeting on January 15, 2001.


Order intake and sales 1999/2000 (US GAAP) by segment compared with 1998/99 (pro forma):

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