Thyssenkrupp : Press Release 2nd quarter 2022/2023

Press Release

May 11, 2023

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thyssenkrupp continued its robust business performance in the 2nd quarter

• Group sales in the 2nd quarter of the 2022/2023 fiscal year slightly below the prior-year level; order intake and adjusted EBIT significantly lower than in the prior year as expected
• Free cash flow before M&A significantly improved compared with the previous quarter and year-on-year, but still negative
• Full-yearforecast for adjusted EBIT confirmed; free cash flow before M&A adjusted to a slightly positive figure
• Martina Merz: "thyssenkrupp had a robust second quarter. The results show that we are now much stronger and more resilient. The decentralized structure as a group of companies and the focusing of our portfolio are paying off."

In a challenging environment with persistently high energy prices and high inflation, the thyssenkrupp group of companies continued its robust business performance in the 2nd quarter of the 2022/2023 fiscal year. While sales declined only slightly overall compared with the prior- year quarter to €10.1 billion (prior year: €10.6 billion), order intake totaling €10.2 billion was significantly lower than a year earlier (€13.6 billion) as expected. This was principally attributable to a normalization of prices at Materials Services and transaction-related declines in the Multi Tracks segment. Moreover, Marine Systems had acquired a major order in the prior-year quarter. As expected, the adjusted EBIT of €205 million was below the prior-year level of €802 million. This was principally attributable to significantly higher raw material and energy costs at Steel Europe and to lower prices and the corresponding reduction in margins at Materials Services. The impact was only partly offset by earnings improvements at Automotive Technology, Marine Systems and Multi Tracks - which made a positive earnings contribution for the first time. Free cash flow before M&A improved significantly both year-on-year and compared with the previous quarter. The assessment for the further development in the current fiscal year has strengthened; the company is now aiming for a slightly positive figure for this indicator (previously: at least break even). The forecast for the other financial indicators (adjusted EBIT, net income) was confirmed.

Martina Merz, CEO of thyssenkrupp AG: "thyssenkrupp had a robust second quarter. The results show that we are now much stronger and more resilient. The decentralized structure as a group of companies and the focusing of our portfolio are paying off. We are systematically and specifically aligning all our segments on future areas that will provide opportunities for high- value development. That applies first and foremost for the green transformation and especially the hydrogen economy. It is now a matter of holding the course that has been taken and further increasing the pace. The change in CEO will not hold back the company in this phase of implementing the transformation. The main strategic initiatives will be systematically continued."

thyssenkrupp AG, thyssenkrupp Allee 1, 45143 Essen, Germany, T: [phone] - 536236, [e-mail], www.thyssenkrupp.com

Chairman of the Supervisory Board: Prof. Dr. Siegfried Russwurm, Executive Board: Martina Merz (CEO), Oliver Burkhard, Dr. Klaus Keysberg

Registered office: Duisburg and Essen, Registration court: Duisburg HR B 9092, Essen HR B 15364

May 11, 2023

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Performance of the segments in the 2nd quarter 2022/2023

With volumes rising slightly overall in the 2nd quarter of fiscal year 2022/2023, Materials Services saw order intake of €3.9 billion, down from the record prior-year figure of €4.5 billion due to normalized material prices. At €3.9 billion, sales were also below the level of €4.5 billion a year earlier. This development was particularly evident in the materials trading and service center business and direct-to-customer business, whereas the North American units posted a slight increase in sales. Adjusted EBIT amounted to €85 million after €336 million a year earlier. The primary reason for this decline were falling margins as a result of lower material prices.

Compared with the prior year, Industrial Components increased order intake and sales by 3 percent and 4 percent, respectively, to €0.7 billion in both cases. At €61 million, adjusted EBIT of the segment was below the prior-year level of €65 million. Order intake at Bearings was slightly below the prior year due to weaker development in industrial applications. By contrast, the business maintained sales at the prior-year level. Significantly higher starting material and energy costs and lower prices in the wind energy sector in China resulted in a decline in earnings. Forged Technologies increased order intake and sales. Thanks to the continued implementation of cost-cutting measures, the business raised adjusted EBIT to slightly above the prior-year level, despite the increase in energy costs.

Automotive Technology improved both order intake and sales by 21 percent to €1.4 billion. Higher customer demand in the automotive serial business in particular had a noticeable impact. However, growth continued to be held back by the restricted availability of semiconductors. The segment increased adjusted EBIT from €3 million to €89 million. This was attributable to operational improvements and a positive one-time effect following settlement with a supplier in respect of quality issues relating to previous years. Strict cost control, the negotiation of new price conditions and efficiency measures compensated the increase in costs such as procurement costs.

Steel Europe increased order intake by 9 percent to €3.7 billion due to significantly higher order volumes, especially from the construction sector and the automotive industry. Despite the slight increase in shipment volumes, sales were 2 percent below the prior year at €3.3 billion. The lower spot market prices were evident here, but longer-term contracts had a stabilizing effect. The significant year-on-year increase in raw material and energy costs resulted in adjusted EBIT of €(14) million (prior year: €479 million). Positive effects from progressive restructurings and the ongoing performance program in connection with implementing the Steel Strategy 20-30 also offset this trend.

Following the acquisition of a major submarine order a year earlier, order intake of €135 million by Marine Systems was significantly below the prior-year level of €3.1 billion. Sales rose by 4 percent to €498 million. The business improved adjusted EBIT significantly to €14 million from €3 million in the previous year thanks to the performance measures initiated.

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Following the divestment of the stainless steel and mining businesses at the end of January and August 2022, respectively, order intake and sales in the Multi Tracks segment stood at €1.0 billion (prior year: €1.3 billion) and €0.8 billion (prior-year: €1.0 billion), respectively. Year- on-year, the majority of the ongoing businesses increased their order intake. All the businesses grew sales compared with the previous year. Both plant engineering and thyssenkrupp nucera significantly increased sales as a result of progress in major projects. Sales at Automation Engineering also benefited from the growth in new business in previous quarters. At Springs & Stabilizers, sales were significantly up on the prior year thanks to the pass- through of material and energy price increases. The segment's adjusted EBIT of €7 million was positive for the first time (prior year: €(33) million) due to the success of restructuring measures and improved project execution. All ongoing businesses saw an improvement in earnings.

The adjusted EBIT of Corporate Headquarters came to €(41) million (prior year: €(36) million).

2nd quarter 2022/2023: Key figures for the thyssenkrupp group (incl. discontinued operations)

Overall, thyssenkrupp posted a net loss of €(203) million in the 2nd quarter of 2022/2023 (prior year: net income of €587 million). The net loss also includes impairment losses of just under €350 million at Steel Europe, which were attributable to the sharp rise in interest rates and the associated increase in the cost of capital. After deducting minority interest, net income in the 2nd quarter was €(223) million (prior year: €565 million); earnings per share came to €(0.36) (prior year: €0.91).

As a result of a decrease in cash tied up in net working capital, free cash flow before M&A improved significantly as expected compared with the previous quarter (+€149 million) and the prior year (+€555 million) but remained negative at €(216) million. Taking account of the dividend payment, the group's net financial assets decreased accordingly to €2.9 billion as of March 31, 2023 (December 31, 2022: €3.3 billion). Following the redemption of a bond of €1.0 billion at the start of March 2023, thyssenkrupp retained a very good liquidity position totaling €7.4 billion in cash and cash equivalents and undrawn committed credit lines.

Klaus Keysberg, CFO of thyssenkrupp AG: "Thanks to our transformation and performance- improving measures, we are well on track to achieve our target free cash flow before M&A in the current fiscal year. We continue to work apace at enabling the businesses to achieve their full potential and actively supporting the implementation of their individual plans for the future. Performance remains our highest priority and we are continuing our efforts."

Equity amounted to €14.0 billion (December 31, 2022: €14.5 billion). Countereffects came from currency translation losses and the net loss. The equity ratio remained at a comfortable level of just under 40 percent.

May 11, 2023

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Forecast for fiscal year 2022/2023

Subject to the limited reliability of planning due to macroeconomic and geopolitical uncertainties, thyssenkrupp has confirmed its full-yearforecast for 2022/2023 for adjusted EBIT and net income. A figure in the mid to high three-digit million euro range is anticipated for adjusted EBIT (prior year: €2.1 billion). The group of companies expects net income to decrease but at least break even. This figure includes the impairment losses recognized at Steel Europe in the 2nd quarter particularly in connection with the higher cost of capital as a result of the recent continuation of interest rate rises.

The assessment for free cash flow before M&A for the full year has strengthened. With further expenditures for restructuring and capital spending above the prior-year level, the group of companies now expects an increase to a slightly positive figure (prior year: €(476) million; previously: at least break-even).

Contact Investor Relations:

Dr. Claus Ehrenbeck

Investor Relations

Phone [phone]

E-mail:[e-mail]

http://www.thyssenkrupp.com/

Twitter:@thyssenkrupp

May 11, 2023

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thyssenkrupp in figures - key performance indicators at a glance

				Full group
				1st half	1st half
				ended	ended
				March 31,	March 31,
				2022	2023	Change
Order intake		million €	23,960		19,365		(4,596)
Sales		million €	19,622		19,125		(496)
EBITDA		million €	1,581		951	(630)
EBIT2)		million €	1,090		136	(954)
EBIT margin	%	5.6		0.7		(4.8)
Adjusted EBIT1),2)		million €	1,180		373	(807)
Adjusted EBIT margin	%	6.0		1.9		(4.1)
Income/(loss) before tax		million €	922		32	(890)
Net income/(loss) or earnings after
tax		million €	709		(105)	(814)
attributable to thyssenkrupp AG's
shareholders		million €	671		(147)	(818)
Earnings per share (EPS)		€	1.08		(0.24)		(1.31)
Operating cash flows		million €	(1,082)		69	1,151
Cash flow for investments		million €	(555)		(643)	(87)
Cash flow from divestments		million €	578		23	(555)
Free cash flow3)		million €	(1,060)		(551)	509
Free cash flow before M&A3)		million €	(1,630)		(581)	1,049
Net financial assets (March 31)		million €	(2,446)		(2,895)	(450)
Total equity (March 31)		million €	12,754		13,997		1,243
Gearing (March 31)	%	-4)	-4)	-
Employees (March 31)				97,542		98,224		682

in %

(19)

(3)

(40)

(87)

(87)

(68)

(68)

(97)

--

--

--

++

(16)

(96)

48

64

(18)

10

-

1

Group - continuing operations1)

1st half	1st half
ended	ended
March 31,	March 31,
2022	2023	Change		in %
23,960		19,365		(4,596)	(19)
19,622		19,125		(496)	(3)
1,572		951	(621)	(40)
1,082		136	(945)	(87)
5.5		0.7		(4.8)	(87)
1,180		373	(807)	(68)
6.0		1.9		(4.1)	(68)
913		32	(882)	(97)
700		(105)	(805)	--
662		(147)	(809)	--
1.06		(0.24)		(1.30)	--
(1,082)		69	1,151	++
(555)		(643)	(87)	(16)
578		23	(555)	(96)
(1,060)		(551)	509	48
(1,630)		(581)	1,049	64

1. See preliminary remarks.
2. See reconciliation in segment reporting (Note 08).
3. See reconciliation in the analysis of the statement of cash flows.
4. Due to the strongly positive total equity and the reported net financial assets, the significance of the gearing key ratio is of no relevance.