By Christoph Steitz and Tom Käckenhoff

Guido Kerkhoff, who took over in September, hopes to win back investor confidence by spinning off the elevators, car parts and plant engineering businesses into one division, a move that has so far failed to lift the conglomerate's shares.

A profit warning earlier this month has also raised doubts over the group's transformation plan, while a supervisory board disagreement over the appointment of outgoing Daimler finance chief Bodo Uebber as a member, and potentially as chairman, added to the uncertainty.

Uebber's demand to raise compensation for board members drew fire from employee representatives, a person familiar with the matter said, adding his appointment was now off the table. A spokesman for Uebber declined to comment.

Taking into account the expected close of a European steel joint venture with Tata Steel, Thyssenkrupp said it expects adjusted operating profit to rise to more than 1 billion euros (890.6 million pounds) in the 2018/19 financial year.

That is an increase of at least 42 percent from the 706 million euros the group reported for 2017/18 and is based on the view that almost all its divisions will show a marked improvement compared with 2017/18.

For a graphic on Thyssenkrupp
share price vs STOXX 600 Industrials Index, see - https://tmsnrt.rs/2PJPuiY

It also expects free cash flow from continuing operations to improve but remain negative and sales to grow by a low single-digit percentage.

Barclays analysts deemed the guidance "underwhelming", adding that "revenue growth ... looks optimistic in light of the current macro backdrop."

Shares on Wednesday initially rose 2.9 percent before falling by as much as 1.5 percent. By 1438 GMT they were trading 2.2 percent higher.

They have fallen 29 percent since the corporate split was announced, also burdened by possible cartel fines and underperformance at the elevators and car parts divisions, its two most promising units.

"The past fiscal year was a turbulent and challenging one for Thyssenkrupp. We initiated one of the biggest realignments in the history of the company," Kerkhoff said. "At the same time we identified potential for further improvements in all businesses which we are now systematically addressing."

Thyssenkrupp has faced calls for years to simplify its structure which makes everything from submarines and steel to chemicals plants and automotive components, with investors arguing the complex setup destroys value.

The group on Wednesday also provided a timeline for the corporate split, expecting the spin-off documents to be presented at its next annual press conference before a shareholder meeting in January 2020 to approve the move.

(Editing by Louise Heavens)

By Christoph Steitz and Tom Käckenhoff