MARTÍN-SANTOS, Luis (1924-1964)

For the consolidated Group income before interest decreased by €174 million to €1,764 million. Capital employed, however, increased by €498 million to €22,913 million. This led to a decrease in roce of 1.0%-point to 7.7%. A cost of capital of 9.0% caused a negative Economic Value Added (eva) of €298 million.

The Steel segment increased income before interest by €14 million to €845 million, which is inclusive of the gain from the disposal of the Ferteco iron ore group. Capital employed increased by €124 million. The roce remained at 9.1%. eva increased by €2 million to €(81).

Automotive’s income before interest decreased by €120 million to €275 million. Capital employed decreased by €446 million resulting in a decrease of roce by 5.6%-points to 8.5%. A cost of capital of 9.5% resulted in a negative eva of €33 million compared to a positive €129 million in the prior year.

Elevator managed to increase income before interest by €26 million to €312 million. Accordingly, capital employed increased by €203 million to €1,992 million. This resulted in a decrease of roce by 0.4%-points to 15.6%. Based on the increased capital employed, eva rose by €7 million to €132 million.

Taking into account gains from disposals in 1999/2000 and 2000/2001, the newly formed Technologies segment recognized income before interest of €183 million, which is €21 million higher than the previous year. Capital employed was reduced by €382 million to €1,716 million. Therefore, the roce increased by 3.0% -points to 10.7%. A cost of capital of 10% resulted in eva of €12 million, an increase of €60 million from the prior year.

A negative eva in the Materials segment amounted to €104 million, which is a decrease of €107 million from the prior year. This is the result of a decrease in income before interest of €88 million and a simultaneous increase in capital employed by €205 million to €2,835 million.

The highest negative eva was €117 million within the Serv segment, compared to a positive eva of €22 million in the previous year. This is due to a decrease in income before interest of €114 million and a simultaneous increase in capital employed of €275 million.

Income before interest of €107 million, against €26 million in the prior year, and an increase of capital employed of €63 million to €1,860 million resulted in an roce for Real Estate of 5.8%. A cost of capital of 7.5% caused a negative eva of €32 million, compared to a negative €54 million in 1999/2000.

ThyssenKrupp’s active portfolio management directly follows the result of the analysis of the performance measures. It involves structural measures which are principally of a strategic nature, including the selection and expansion of fields of businesses with which the targeted increases in eva or value are to be realized, as well as the timely and profitable withdrawal from activities which do not achieve adequate increases in eva. For the Group as a whole it is particularly important to create a balance between value generators and cash providers. This is a basic prerequisite for dividend continuity and sustained growth.

3. Statements of cash flows

The statements of cash flows show the origin and use of cash flows during the fiscal years 1999/2000 and 2000/2001. It is of central importance for the evaluation of the financial position of the ThyssenKrupp Group.

The funds taken into consideration in the statements of cash flows correspond to the balance sheet item “Cash and cash equivalents”.

The cash flows from investing activities and financing activities have both been determined based on payments. In contrast, the cash flow from operating activity is determined indirectly based on the annual Group net income. The changes in balance sheet items in connection with operating activities have been adjusted for the effects of foreign currency translations and changes in the scope of consolidation. Therefore, they do not conform to the corresponding changes based on the consolidated balance sheets.

Operating activities provided €2.2 billion during fiscal 2000/2001. The increase compared to the previous year in the amount of €0.9 billion is primarily due to the positive development concerning the tie-up of funds in net working capital. Due to a Groupwide established program the net working capital in the current fiscal year decreased by €0.1 billion whereas during fiscal year 1999/2000 the increase in net working capital was €0.9 billion.

The cash flows used in investing activities was reduced by €0.5 billion to €(1.3 billion). Cash outflows for investing activities decreased by €0.2 billion to €2.3 billion. Cash inflows from investing activities increased by €0.4 billion to €1.0 billion primarily due to the sale of Ferteco and Krupp Werner & Pfleiderer during fiscal 2000/2001. As a result the cash flows from operating activities in 2000/2001 was sufficient to fund net capital expenditures of €1.3 billion. The excess amount (free cash flow) of €0.9 billion was used – after taking into account dividend payments of €0.4 billion – to decrease indebtedness by €0.5 billion.

Other financing activities presented within financing activities include payments of €15 million, resulting from Group overnight money transactions with non-consolidated subsidiaries, and cash inflows of €12 million from short-term financial accounts receivable.

A decrease in cash and cash equivalents of €41 million is a result of changes in foreign exchange rates, which primarily related to the decrease in the value of the u.s. dollar during fiscal 2000/2001.

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