Insights Global challenges, global opportunities Annual Report TK Magazine for the 2006 – 2007 Annual Report of ThyssenKrupp ag Shaping our own future. Reaching a new level. Generating sustainable growth. These are the goals we have set ourselves for the future, building on our present success. Global mega-trends will have a profound impact on wide areas of the global community, and on our business. They harbor risks, but they also offer opportunities – opportunities we intend to exploit. With this in mind, our Annual Report aims to provide you with insights into the potential offered by ThyssenKrupp’s innovation and problem-solving skills. And by our ability to transform major global challenges into intelligent solutions and thus open up new areas of business. For all of us. Insights Global challenges, global opportunities The Group in figures ThyssenKrupp in brief ThyssenKrupp worldwide Financial dates ThyssenKrupp compact Annual Report 06 — 07 The Group in figures Annual Report 06 — 07 2005/2006 2006/2007 Change Order intake million € 50,782 54,605 3,823 Sales million € 47,125 51,723 4,598 EBITDA million € 4,700 5,254 554 EBIT million € 3,044 3,728 684 Earnings before taxes (EBT) million € 2,623 3,330 707 Net income million € 1,704 2,190 486 Earnings per share € 3.24 4.30 1.06 Distribution million € 489 635* 146 Dividend per share € 1.00 1.30* 0.30 ROCE % 17.9 20.7 2.8 ThyssenKrupp Value Added (TKVA) million € 1,510 2,108 598 Operating cash flows million € 3,467 2,220 (1,247) Cash flows from disposals million € 344 673 329 Cash flows from investments million € (2,040) (2,997) (957) Free cash flow million € 1,771 (104) (1,875) Net financial receivables million € 747 223 (524) Total equity million € 8,927 10,447 1,520 Gearing % (8.4) (2.1) 6.3 Employees (September 30) 187,586 191,350 3,764 Germany 84,052 84,999 947 Abroad 103,534 106,351 2,817 * Proposal to Annual General Meeting ThyssenKrupp in brief Annual Report 06 — 07 STEEL CAPITAL GOODs SERVICES Elevator Steel Stainless Services Technologies We have more than 191,000 skilled and committed employees around the world working in the areas of Steel, Capital Goods and Services to provide innovative solutions for sustainable progress. In our five segments – Steel, Stainless, Technologies, Elevator and Services – we are facing up to the global challenges and turning risks into opportunities. Our high-performance materials, plants, components and systems offer answers to many future questions, both commercial and technical. ThyssenKrupp worldwide Annual Report 06 — 07 SALEs EMPLOYEEs THYssENKRUPP BEST PROJECTS Worldwide Worldwide Worldwide €51.7 billion 191,350 6,298 100% 100% 100% Europe Europe Europe €36.4 billion 130,255 4,450 70% 68% 71% Germany Germany Germany €18.5 billion 84,999 2,942 36% 44% 47% As an international group, we speak many languages: more than half of our employees and two thirds of our customers are located outside Germany. Key locations are to be found above all in our neighboring European countries. But we also see significant opportunities in North America, Asia and the emerging nations of other regions. Dynamism, performance and a willingness to improve on tried and tested solutions are features characterizing the work of our 2,400 plants and branches around the world. For example, our ThyssenKrupp best value enhancement program has now produced 6,300 projects with many new ideas to strengthen the Group’s potential. Financial dates Annual Report 06 — 07 DATES 2008/2009 January 18, 2008 Annual General Meeting January 21, 2008 Payment of dividend for the 2006/2007 fiscal year February 13, 2008 Interim report 1st quarter 2007/2008 (October to December) Conference call with analysts and investors May 14, 2008 Interim report 2nd quarter 2007/2008 (January to March) May 16, 2008 Analysts’ and investors’ conference August 14, 2008 Interim report 3rd quarter 2007/2008 (April to June) Conference call with analysts and investors November 28, 2008 Annual press conference Analysts’ and investors’ conference January 23, 2009 Annual General Meeting Important dates can also be found in our online financial calendar: www.thyssenkrupp.com/en/investor/finanzkalender.html If you’d like to be kept up-to-date with news about ThyssenKrupp, subscribe to our newsletter at www.thyssenkrupp.com/en/newsletter/index.html TK ag August-Thyssen-Strasse 1 40211 Düsseldorf, Germany www.thyssenkrupp.com ThyssenKrupp ag Annual Report 06 — 07 Annual Report 2006 – 2007 ThyssenKrupp ag 0 Letter to stockholders The past fiscal year was the most successful in the history of your Company. ThyssenKrupp delivered another outstanding performance, with all key performance indicators at a new record high. Compared with the very good figures of the previous year, sales increased by 10 % to € 51.7 billion and pre-tax income by 27 % to € 3.3 billion, while ThyssenKrupp Value Added was 40 % higher at € 2.1 billion. We want you, the Company’s stockholders, to share appropriately in this success: In January 2008, the Executive Board and Supervisory Board will pro- pose to the Annual General Meeting the payment of a dividend of € 1.30 per share. That represents a 30 % increase compared with last year. Review of record year 2006 / 2007 — It is said that success has many fathers, and that is certainly true at ThyssenKrupp. Steel, Stainless, Technologies and Services all reported their highest ever earnings in 2006 / 2007. Elevator delivered a good operating performance but had to pay a fine of € 480 million imposed by the EU Commission in February 2007 for alleged anti-competitive behavior in the market for elevators and escalators. As well as making the most of the favorable market situation in their key regions, the segments reaped the benefits of internal programs to enhance perfor- mance, productivity and efficiency, especially the Groupwide value enhancement program ThyssenKrupp best. All five segments improved their global market positions, in part significantly, and expanded their business in the year under review. The basis for this is the wide range of products and services which have three things in common – they offer high quality and advanced technology and are tailored to customers’ requirements. 0 Annual Report 2006 – 2007 ThyssenKrupp ag Letter to stockholders Our success in 2006 / 2007 is also reflected in the performance of ThyssenKrupp’s stock: Gaining 68 % in the course of the fiscal year, it significantly outperformed the DAX and DJ STOXX. This Annual Report contains detailed information on the business situation and the main events in the reporting period, our plans for the future, our innovative capabilities and our employees. I hope that not only the content of the report but also the new design and magazine supplement meet with your approval. In this letter I would like to address two questions relating to the future which I am sure also occupy your thoughts: What are ThyssenKrupp’s goals for the next few years and how do we intend to achieve them? Mid- and long-term prospects for ThyssenKrupp — Against the background of the strategies we have in place and the economic forecasts, we have reviewed and kept you informed of our mid- and longer-term targets. In the medium term, by around 2010, we aim to achieve sales of € 60 billion; our sustainable goal for earn- ings before taxes and major nonrecurring items is € 4 billion. Over the longer term, by around 2012, we plan sales of € 65 billion and earn- ings before taxes and major nonrecurring items of € 4.5 to 5.0 billion. Our central performance indicator, ThyssenKrupp Value Added, is expected to reach € 2.5 billion in the medium term and € 3.0 billion in the longer term. Annual Report 2006 – 2007 ThyssenKrupp ag 0 Letter to stockholders ThyssenKrupp will achieve these targets as a focused conglomerate supported by three pillars: Steel, Capital Goods, and Services. These three key areas of activity, to which the Group’s five segments are allocated, are the basis of our business model; they also stand for the past and future success of our Company. Strategies for success — With many of our products and services we now occupy leading positions in the global market; we will further improve these posi- tions in the coming years in all key regions. In the Steel and Stainless segments, our strategy is focused on organic growth. A total of almost € 7 billion is being invested primarily in a new slab production plant in Brazil, a new production and distribution location in the USA, and the optimization of capacities at our inte- grated steel mill in Duisburg. The central element of the new complex in the USA will be a hot strip mill, which will be used jointly by Steel and Stainless. In addition, Steel is investing in cold-rolling and coating facilities, while Stainless plans to build an electric-furnace meltshop and its own cold-rolling capacities. These measures will enable us to exploit our growth opportunities in the key markets of North America and Europe. We will further cement our leading international position as a producer of high-quality carbon and stainless steel flat products. 0 Annual Report 2006 – 2007 ThyssenKrupp ag Letter to stockholders The Technologies, Elevator and Services segments are pursuing a combined strategy: organic growth plus acquisitions. The technology- based plant and component manufacturers combined in the Tech- nologies segment see opportunities in the growth sectors climate, environment, infrastructure and mobility, for which the segment already delivers tailored solutions based on intelligent technologies. Mobility is also a key focus for the Elevator segment. Growth oppor- tunities have been identified chiefly in Asia and Eastern Europe, and Elevator will concentrate in particular on service activities.