THYSSENKRUPP AG Press release
May 15, 2024
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thyssenkrupp makes significant progress in the transformation and, in a challenging environment, continued its solid business performance in the 2nd quarter of 2023/2024 as expected
- Order intake and sales lower than in the prior year as expected due to downward market effects
- Adjusted EBIT in line with expectations, lower due to positive one-time effects in the prior year
- Free cash flow before M&A above prior year but still negative on a seasonal basis
- Progress in the transformation process: Spin-off of the steel division and marine business ongoing; transformation of the materials business in Germany initiated; "APEX" performance program delivers further positive earnings effects
- Full-yearforecast for adjusted EBIT and free cash flow before M&A confirmed
- CEO Miguel López: "thyssenkrupp performed as planned in the 2nd quarter. We made significant progress in the strategic realignment of the group, especially in the steel business."
thyssenkrupp is pressing ahead rapidly with its strategic realignment and, in a persistently challenging environment, turned in a robust operational performance in the 2nd quarter of the current fiscal year that was in line with expectations. As expected, order intake and sales of €8.6 billion and €9.1 billion, respectively, were lower than in the prior year (€10.2 billion and €10.1 billion, respectively), mainly due to price- and demand-induced declines at Materials Services and Steel Europe. Adjusted EBIT came to €184 million. The main reason for the decline compared with the prior year (€205 million) was the absence of positive one-time effects at Automotive Technology. Excluding these one-time effects, adjusted EBIT increased. Earnings increases at Steel Europe and Marine Systems contributed to this development. The "APEX" measures initiated to improve efficiency also had a positive impact on earnings. The group has confirmed its forecast for adjusted EBIT and free cash flow before M&A for the 2023/2024 fiscal year.
Miguel López, CEO of thyssenkrupp AG: "thyssenkrupp performed as planned in the 2nd quarter - despite a still gloomy market environment. We made significant progress in the strategic realignment of the group, especially in the steel business. We signed an agreement with EP Corporate Group that it would acquire a stake in the steel business and Steel Europe is currently developing a concept for the segment's realignment. Our materials business is also undergoing an extensive transformation process. Moreover, we are progressing with the spin-off of Marine Systems and implementing innovative decarbonization projects, such as the use of our 'pure oxyfuel' technology at the Holcim cement plant in Lägerdorf, North Germany. As you can see, we are not letting up in our transformation - we are working on implementation."
Vorsitzender des Aufsichtsrats/Chairman of the Supervisory Board: Professor Dr.-Ing.Dr.-Ing. E.h. Siegfried Russwurm
Vorstand/Executive Board: Miguel Ángel López Borrego, Vorsitzender/Chairman; Oliver Burkhard, Dr. Volkmar Dinstuhl, Ilse Henne, Dr. Klaus Keysberg
Sitz der Gesellschaft/Registered office: Duisburg und Essen, Registergerichte: Duisburg HR B 9092, Essen HR B 15364
May 15, 2024
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thyssenkrupp is working consistently to implement its strategic transformation:
On the path to the spin-offof Steel Europe, the segment's Executive Board has presented the initial conceptional outlines of a planned realignment. Concrete measures are currently being developed and will then be discussed by the committees responsible for the steel business - especially the Steel Europe Supervisory Board and the employee representatives. Work began on constructing the first hydrogen-capable direct reduction plant at the Duisburg site in March this year. Implementation will continue as planned with the support of funding approved by the German federal government and the state government of North Rhine- Westphalia.
Moreover, at the end of April, thyssenkrupp AG and EP Corporate Group (EPCG) agreed that EPCG would acquire a 20-percent stake in the steel business. EPCG's decision to come on board unites Steel Europe's leading materials know-how and EPCG's energy expertise. EPCG will contribute its expertise as an energy trader, supplier and distributor to the strategic partnership, thereby facilitating the supply of sufficient energy in the form of hydrogen and green electricity, as well as the provision of energy commodities. There could also be expedient interfaces between the two companies in the fields of project management and implementation of large green transformation projects.
In addition, the parties are already in talks about the acquisition by EPCG of a further 30 percent of the steel business. The aim is to establish an equal 50/50 joint venture. The proposed expansion of the shareholder structure will have no impact on existing company and collective bargaining agreements at Steel Europe.
The strategic partnership is a historic and significant step toward ensuring resilient and climate-friendly steel production at Steel Europe - and thus also a major contribution to securing the future of the steel industry in Germany. thyssenkrupp is already participating in the decarbonization of steel production.
The materials business has initiated a major structural transformation of the business model of thyssenkrupp Schulte in order to reinforce and further expand the company's position in the German warehousing market. The transformation is aimed at aligning the business model even more consistently with customers' ever-changing requirements, with a focus on materials- related services.
Progress has also been made with the planned spin-offof the marine business. thyssenkrupp and investment company Carlyle have agreed to start due diligence in respect of the marine business of thyssenkrupp. The subject of this assessment is the possible partial sale of thyssenkrupp Marine Systems to Carlyle. Other options for a stock market listing are still being explored in parallel. At the same time, discussions are being held with the German federal government regarding a possible investment in the marine business of thyssenkrupp.
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In addition, thyssenkrupp has continued to advance the use of its innovative decarbonization technologies. thyssenkrupp nucera has been chosen by Spanish energy company Cepsa as the preferred supplier of a 300-megawatt electrolyzer for the production of green hydrogen. The project is part of the Green Hydrogen Valley hub in Andalusia, which is currently being developed as one of the largest centers of green hydrogen production in Europe. thyssenkrupp Polysius is supplying its key "pure oxyfuel" technology for one of the world's first carbon- neutral cement plants in Lägerdorf in Schleswig-Holstein. This enables the capture of almost 100 percent of CO2 emissions from cement clinker production. As part of another project, thyssenkrupp Uhde concluded a contract for a conceptual design study for a reduced-emission fertilizer plant in Canada.
At the start of May 2024, the sale of a 55-percent stake in thyssenkrupp Industries India (Decarbon Technologies segment) to a consortium of existing co-shareholders concluded the strategic streamlining of the thyssenkrupp mining portfolio.
Miguel López, CEO of thyssenkrupp AG: "The transformation we have initiated ensures the future viability and success of our businesses - it is essential. It is also the only way we can secure jobs in the long term."
Business performance of the segments in the 2nd quarter 2023/2024
At Automotive Technology, both order intake and sales amounted to €1.9 billion (prior year: both €2.0 billion). Adjusted EBIT of the segment was €49 million, which was below the prior- year level of €108 million. Compared with a year earlier, which was boosted by positive onetime effects, the segment recorded declining sales volumes. Lower material and transportation costs had a positive impact on earnings. The efficiency improvement measures of the "APEX" program and the negotiation of new prices also had a positive effect.
In the 2nd quarter of the 2023/2024 fiscal year, Decarbon Technologies posted order intake totaling €0.7 billion (prior year: €1.0 billion). The segment increased sales by 9 percent to €0.9 billion. Adjusted EBIT came to €15 million (prior year: €49 million). With the exception of Uhde, all business units posted lower earnings year-on-year as expected. The segment boosted its earnings thanks to "APEX" measures to improve efficiency in areas such as human resources and production and to optimize procurement. Rothe Erde saw an overall decline in order intake and sales due to lower demand in the wind energy business and for construction machinery in China. Price pressure in the wind energy sector also reduced earnings. Uhde saw a temporary decline in order intake but was able to increase sales compared with the prior year. Adjusted EBIT was also higher than a year earlier. Order intake at Polysius decreased in the context of the usual inter-quarter volatility. By contrast, sales increased. Earnings were lower compared with the prior year, which had benefited from a positive one-time effect. thyssenkrupp nucera is still on a growth track and increased sales. Order intake was lower temporarily compared with the prior year, which was attributable to the high volume of individual projects in that period. Earnings were negative as a result of the higher up-front costs for expanding the business.
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With lower volumes and prices overall, Materials Services posted order intake of €3.3 billion and sales of €3.2 billion (prior year: both €3.9 billion) in a weak economic environment in Europe especially. This downward trend was evident particularly in the warehousing and direct- to-customer businesses and also resulted in the segment's lower earnings of €69 million compared with the prior-year figure of €85 million. The ongoing efficiency measures bundled in the "APEX" program had a positive impact on earnings and included a reduction in energy costs, further network optimization and improved terms agreed with a major customer in the Aerospace business.
The European steel industry is facing a very challenging environment caused by the weak economy and structural changes as well as higher energy costs compared with its international competitors and growing pressure on imports. This trend is evident at Steel Europe, which saw order intake and sales fall to €2.9 billion each from the prior-year figures of €3.7 billion and €3.3 billion, respectively. This was attributable to both the strong price declines and volume reductions. The segment significantly increased adjusted EBIT to €68 million compared with €(14) million in the prior year. Compared with the prior year, lower raw material and energy costs and lower depreciation and amortization as a result of the significant impairment losses in fiscal year 2022/2023 more than offset negative market effects. Earnings were supported by "APEX" measures such as efficiency improvements in production, energy and logistics and further cost improvements and procurement successes.
Marine Systems increased order intake to €140 million (prior year: €135 million) and sales to
€532 million (prior year: €497 million). The sales trend remained stable due to positive project progress in the surface vessels and submarine businesses. This was also reflected in the adjusted EBIT of €25 million, which was significantly higher than the prior-year figure of €14 million. "APEX" measures in areas such as materials, human resources and assets contributed positively to earnings.
The adjusted EBIT of Corporate Headquarters amounted to €(40) million (prior year: €(41) million).
2nd quarter 2023/2024: Key figures for the thyssenkrupp group
While the results of operations were positive, economy-driven and thus demand-induced asset impairments at Materials Services and negative effects from the measurement of CO2 forward contracts at Steel Europe meant that thyssenkrupp posted a net loss of €(72) million in the 2nd quarter of 2023/2024 (prior year: €(203) million). After deducting non-controlling interest, net income was €(78) million (prior year: €(223) million); earnings per share came to €(0.13) (prior year: €(0.36)).
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Compared with December 31, 2023, equity remained stable at €11.6 billion and the equity ratio at a comfortable value of 38 percent.
As a result of factors such as lower net working capital, free cash flow before M&A improved by €20 million from the prior-year level but remained negative as expected at €(197) million. As of March 31, 2024, the group's net financial assets decreased accordingly to €3.5 billion (December 31, 2023: €3.8 billion). Following the redemption of a bond of €1.5 billion at the end of February 2024, thyssenkrupp retained a very good liquidity position totaling €6.2 billion in cash and cash equivalents and undrawn committed credit lines.
Forecast for key financial indicators for 2023/2024 fiscal year confirmed
In a persistently difficult market environment characterized by geopolitical and trade conflicts, thyssenkrupp anticipates that macroeconomic development in the current fiscal year will be challenging overall. Moreover, the company expects further volatile price levels on sales and procurement markets, e.g., for raw materials and energy. This may result in fluctuations in sales and earnings development.
Due to volume reductions and lower prices at Steel Europe and Materials Services, thyssenkrupp now expects sales for the 2023/2024 fiscal year to be below the prior-year level. Previously, the group had assumed a value at the prior-year level. thyssenkrupp continues to anticipate that adjusted EBIT will rise to the high three-digit million euro range (prior year: €703 million). The group is still seeking to achieve free cash flow before M&A in the low three-digit million euro range (prior year: €363 million).
The impairment losses recognized by Materials Services and the negative effects from CO2 forward contracts at Steel Europe in the 2nd quarter are the reasons why, for net income, the company now anticipates an increase to a negative figure in the low three-digit million euro range (previously: increase to around break-even; prior year: €(1,986) million).
Click here for the current interim report: https://www.thyssenkrupp.com/en/investors/reporting-and-publications
Contact Investor Relations:
Andreas Trösch
Investor Relations
Phone +49 (201) 844-536464
E-mail:andreas.troesch@thyssenkrupp.com
www.thyssenkrupp.com| @thyssenkrupp
May 15, 2024
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thyssenkrupp in figures - key performance indicators at a glance
Group | |||||||||||
1st half | 1st half | ||||||||||
ended | ended | ||||||||||
March 31, | March 31, | ||||||||||
2023 | 2024 | Change | in % | ||||||||
Order intake | million € | 19,365 | 16,549 | (2,815) | (15) | ||||||
Sales | million € | 19,125 | 17,245 | (1,880) | (10) | ||||||
EBITDA | million € | 951 | 531 | (420) | (44) | ||||||
EBIT2) | million € | 136 | (156) | (293) | -- | ||||||
EBIT margin | % | 0.7 | (0.9) | (1.6) | -- | ||||||
Adjusted EBIT1),2) | million € | 373 | 268 | (105) | (28) | ||||||
Adjusted EBIT margin | % | 1.9 | 1.6 | (0.4) | (20) | ||||||
Income/(loss) before tax | million € | 32 | (239) | (270) | -- | ||||||
Net income/(loss) or earnings after tax | million € | (105) | (377) | (272) | -- | ||||||
attributable to thyssenkrupp AG's shareholders | million € | (147) | (392) | (244) | -- | ||||||
Earnings per share (EPS) | € | (0.24) | (0.63) | (0.39) | -- | ||||||
Operating cash flows | million € | 69 | (311) | (380) | -- | ||||||
Cash flow for investments | million € | (643) | (397) | 245 | 38 | ||||||
Cash flow from divestments | million € | 23 | 27 | 4 | 16 | ||||||
Free cash flow3) | million € | (551) | (682) | (131) | (24) | ||||||
Free cash flow before M&A3) | million € | (581) | (728) | (146) | (25) | ||||||
Net financial assets (March 31) | million € | 2,895 | 3,467 | 572 | 20 | ||||||
Total equity (March 31) | million € | 13,997 | 11,604 | (2,393) | (17) | ||||||
Gearing (March 31) | % | -4) | -4) | - | - | ||||||
Employees (March 31) | 98,224 | 100,202 | 1,978 | 2 | |||||||
- See preliminary remarks.
- See reconciliation in segment reporting (Note 08).
- See reconciliation in the analysis of the statement of cash flows.
- Due to the strongly positive total equity and the reported net financial assets, the gearing key ratio is negative and the significance of the gearing key ratio is thus of no relevance.
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Group | |||||||||||
2nd quarter | 2nd quarter | ||||||||||
ended | ended | ||||||||||
March 31, | March 31, | ||||||||||
2023 | 2024 | Change | in % | ||||||||
Order intake | million € | 10,188 | 8,576 | (1,612) | (16) | ||||||
Sales | million € | 10,107 | 9,064 | (1,043) | (10) | ||||||
EBITDA | million € | 466 | 293 | (173) | (37) | ||||||
EBIT2) | million € | (110) | 28 | 138 | ++ | ||||||
EBIT margin | % | (1.1) | 0.3 | 1.4 | ++ | ||||||
Adjusted EBIT1),2) | million € | 205 | 184 | (21) | (10) | ||||||
Adjusted EBIT margin | % | 2.0 | 2.0 | 0.0 | 0 | ||||||
Income/(loss) before tax | million € | (135) | (7) | 129 | 95 | ||||||
Net income/(loss) or earnings after tax | million € | (203) | (72) | 130 | 64 | ||||||
attributable to thyssenkrupp AG's shareholders | million € | (223) | (78) | 145 | 65 | ||||||
Earnings per share (EPS) | € | (0.36) | (0.13) | 0.23 | 65 | ||||||
Operating cash flows | million € | 206 | 113 | (93) | (45) | ||||||
Cash flow for investments | million € | (415) | (290) | 125 | 30 | ||||||
Cash flow from divestments | million € | 8 | (6) | (14) | -- | ||||||
Free cash flow3) | million € | (201) | (183) | 18 | 9 | ||||||
Free cash flow before M&A3) | million € | (216) | (197) | 20 | 9 | ||||||
Net financial assets (March 31) | million € | 2,895 | 3,467 | 572 | 20 | ||||||
Total equity (March 31) | million € | 13,997 | 11,604 | (2,393) | (17) | ||||||
Gearing (March 31) | % | -4) | -4) | - | - | ||||||
Employees (March 31) | 98,224 | 100,202 | 1,978 | 2 | |||||||
- See preliminary remarks.
- See reconciliation in segment reporting (Note 08).
- See reconciliation in the analysis of the statement of cash flows.
- Due to the strongly positive total equity and the reported net financial assets, the gearing key ratio is negative and the significance of the gearing key ratio is thus of no relevance.
May 15, 2024 Page 8/8
Automotive Technology2)
Decarbon Technologies2)
Materials Services
Steel Europe2)
Marine Systems2)
Corporate Headquarters
Reconciliation2)
Group
Order intake | Sales | EBIT1) | |||||||||
million € | million € | million € | |||||||||
1st half | 1st half | 1st half | 1st half | 1st half | 1st half | ||||||
ended | ended | ended | ended | ended | ended | ||||||
March 31, | March 31, | March 31, | March 31, | March 31, | March 31, | ||||||
2023 | 2024 | 2023 | 2024 | 2023 | 2024 | ||||||
4,078 | 3,744 | 3,894 | 3,785 | 137 | 79 | ||||||
2,021 | 1,340 | 1,704 | 1,830 | 64 | (28) | ||||||
7,250 | 6,150 | 7,143 | 6,023 | 114 | (9) | ||||||
6,725 | 5,312 | 6,260 | 5,310 | (143) | (132) | ||||||
263 | 669 | 1,004 | 965 | 31 | 44 | ||||||
5 | 5 | 4 | 4 | (83) | (103) | ||||||
(978) | (671) | (884) | (671) | 15 | (8) | ||||||
19,365 | 16,549 | 19,125 | 17,245 | 136 | (156) | ||||||
Adjusted EBIT1),2) million €
1st half | 1st half | |
ended | ended | |
March 31, | March 31, | |
2023 | 2024 | |
154 | 97 | |
68 | (2) | |
105 | 95 | |
76 | 137 | |
34 | 42 | |
(84) | (96) | |
21 | (6) | |
373 | 268 | |
Employees
March 31, | March 31, | |
2023 | 2024 | |
31,288 | 32,025 | |
14,981 | 14,768 | |
16,234 | 16,150 | |
26,109 | 27,057 | |
7,386 | 7,880 | |
611 | 640 | |
1,615 | 1,682 | |
98,224 | 100,202 | |
- See reconciliation in segment reporting (Note 08).
- See preliminary remarks.
Order intake | Sales | |||||||
million € | million € | |||||||
2nd quarter | 2nd quarter | 2nd quarter | 2nd quarter | |||||
ended | ended | ended | ended | |||||
March 31, | March 31, | March 31, | March 31, | |||||
2023 | 2024 | 2023 | 2024 | |||||
Automotive Technology2) | 2,031 | 1,890 | 2,009 | 1,922 | ||||
Decarbon Technologies2) | 1,000 | 695 | 856 | 931 | ||||
Materials Services | 3,901 | 3,293 | 3,897 | 3,164 | ||||
Steel Europe2) | 3,691 | 2,916 | 3,315 | 2,864 | ||||
Marine Systems2) | 135 | 140 | 497 | 532 | ||||
Corporate Headquarters | 3 | 3 | 2 | 2 | ||||
Reconciliation2) | (574) | (362) | (470) | (349) | ||||
Group | 10,188 | 8,576 | 10,107 | 9,064 | ||||
EBIT1) | Adjusted EBIT1),2) | ||||||
million € | million € | ||||||
2nd quarter | 2nd quarter | 2nd quarter | 2nd quarter | ||||
ended | ended | ended | ended | ||||
March 31, | March 31, | March 31, | March 31, | ||||
2023 | 2024 | 2023 | 2024 | ||||
106 | 38 | 108 | 49 | ||||
46 | (3) | 49 | 15 | ||||
91 | 4 | 85 | 69 | ||||
(329) | 11 | (14) | 68 | ||||
14 | 26 | 14 | 25 | ||||
(38) | (42) | (41) | (40) | ||||
(1) | (6) | 4 | (3) | ||||
(110) | 28 | 205 | 184 | ||||
- See reconciliation in segment reporting (Note 08).
- See preliminary remarks.
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ThyssenKrupp AG published this content on 15 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 05:03:06 UTC.
