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MarketScreener Homepage  >  Equities  >  Xetra  >  ThyssenKrupp AG    TKA   DE0007500001

THYSSENKRUPP AG

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Thyssenkrupp : outlines steel unit overhaul - letter

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12/04/2019 | 09:49am EST
FILE PHOTO: ThyssenKrupp AG steel plant in Duisburg

Thyssenkrupp, whose attempt to merge its steel operations with a rival was thwarted by regulators earlier this year, now plans to transform the business into its biggest profit engine, according to an internal memo seen by Reuters.

By Tom Käckenhoff

The German group told staff it aimed to boost earnings before interest and tax (EBIT) at Steel Europe by an average of up to 600 million euros (£515.45 million) over the coming years, helped by job cuts and selling more to the autos industry.

That would make it the backbone of the conglomerate's operations following an expected sale or listing of its elevator division, currently its best performing business by far.

"Our plan is a clear forward strategy to strengthen Thyssenkrupp Steel's long-term competitiveness and viability. We cannot simply carry on as before, unless we accept missing the boat to the future," the letter said.

On Wednesday, thousands of workers at Thyssenkrupp's elevator division staged protests at the group's headquarters in Essen, asking management for job protection.

Thyssenkrupp Elevator Technology (ET) could fetch up to 17 billion euros in a sale, which could help Thyssen repair its stretched balance sheet - at the expense of losing its cash cow.

"Our business has been growing in sales and profits for many years and we reliably bring in cash year by year," said Susanne Herberger, a member of ET's supervisory board.

"If we're to be sold as a reward we expect first and foremost that the people at Thyssenkrupp Elevator will be in focus."

Steel Europe will cut up to 1,000 jobs in administration and an additional 200 staff would be affected in its operating business, the letter said. The cuts are part of a job reduction programme announced earlier this year.

Steel Europe's Heavy Plate and Electrical Steel businesses would either be restructured, sold or wound down, the letter added, with decisions expected in the coming months.

Heavy Plate, which employs 800 staff, has been under review since August.

Thyssenkrupp also said it planned to increase steel shipments to an average 11.5 million tonnes a year, helped by a product drive in the car sector, the company's single-biggest customer group.

Last year, shipments totalled about 11 million tonnes.

European Union competition regulators in June blocked a planned joint venture between Steel Europe and India's Tata Steel, forcing a strategic rethink at Thyssenkrupp.

(Reporting by Tom Kaeckenhoff, Additional reporting by Christoph Steitz; Editing by Mark Potter and Alexandra Hudson)

By Tom Käckenhoff

Stocks mentioned in the article
ChangeLast1st jan.
TATA STEEL LTD 0.60% 483.25 End-of-day quote.2.22%
THYSSENKRUPP AG 1.48% 11.315 Delayed Quote.-6.02%
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Financials (EUR)
Sales 2020 42 047 M
EBIT 2020 817 M
Net income 2020 -416 M
Debt 2020 5 530 M
Yield 2020 0,64%
P/E ratio 2020 -16,9x
P/E ratio 2021 12,3x
EV / Sales2020 0,30x
EV / Sales2021 0,29x
Capitalization 7 044 M
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Mean consensus OUTPERFORM
Number of Analysts 13
Average target price 12,36  €
Last Close Price 11,32  €
Spread / Highest target 41,4%
Spread / Average Target 9,25%
Spread / Lowest Target -56,7%
EPS Revisions
Managers
NameTitle
Martina Merz Chief Executive Officer
Siegfried Russwurm Chairman-Supervisory Board
Johannes M. Dietsch Chief Financial Officer
Martin Holz Chief Information Officer
Bernhard Pellens Member-Supervisory Board
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