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THYSSENKRUPP AG

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Thyssenkrupp restructure halfway complete, higher margins expected in 2022

12/02/2021 | 02:15am EDT
FILE PHOTO: Thyssenkrupp's logo is seen outside elevator test tower in Rottweil

* Thyssenkrupp expects 4-6% mid-term margin

* Restructure halfway complete, CEO expects completion by 2024

* Future of marine, cement, chemical divisions being mulled

BERLIN, Dec 2 (Reuters) - Thyssenkrupp's radical restructuring involving a string of disposals and cost cuts is about halfway complete, with the group on track for higher sales and margins in coming years, its leadership team said on Thursday on its Capital Markets Day.

The sprawling conglomerate began stripping off division after division in 2020, including a sale of its profitable elevator business https://www.reuters.com/article/us-thyssenkrupp-m-a-privateequity-idUSKCN20L2O0 for 17.2 billion euros ($19.50 billion), in an attempt to bring down roughly the same sum's worth of debt and crippling pension liabilities.

The current restructuring program should be completed by 2024 at the latest, CEO Martina Merz said, adding: "the earlier the better."

The German steel-to-submarines group expects mid-term adjusted margins of 4-6% and aims to restore its ability to consistently pay a dividend, it said in a statement ahead of presentations. The group had reported an adjusted margin of 2.3% in the full year 2020/21.

"We are relentlessly pushing forward the full transformation to the group," Merz said, adding the sale of the elevator division was a difficult but necessary step. "The focus now is preparing the next package of divestments."

Thyssenkrupp's two-year overhaul has so far included the sale of its mining technology business to Denmark's FLSmidth in July and the disposal of its infrastructure and carbon components operation.

These transactions should bring in a high-triple-digit-million euro figure to bolster the company's net financial position and pension liabilities, Thyssenkrupp said.

Next in line are the marine systems division, which could see partnerships, consolidation or a standalone scenario, and the cement plant construction and chemicals divisions, whose future the company will be deciding on soon.

More details about the initial public offering of its hydrogen division Uhde Chlorine Engineers planned early next year https://www.reuters.com/business/energy/thyssenkrupp-considers-listing-hydrogen-business-q1-bloomberg-2021-11-15 will be announced at a capital markets day on Jan. 13.

Italy's De Nora <IPO-DENR.MI>, which owns 33% of the hydrogen division, is on board with the listing, Chief Financial Officer Klaus Keysberg said.

Higher material prices and expanding margins in both materials and steel should fuel higher sales and earnings in the first quarter of next year, Keysberg said.

The group reported sales of 7.3 billion euros and EBIT of 78 million euros in the first quarter of 2020/21.

Adjusted medium-term EBIT margin targets by division included at least 10% for industrial components and 7-8% for automotive, where 80% of sales were being generated from components not used in combustion engines.

($1 = 0.8822 euros) (Reporting by Victoria Waldersee, Tom Kaeckenhoff, Editing by Zuzanna Szymanska and Bernadette Baum)


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
FLSMIDTH & CO. A/S 1.55% 193.85 Delayed Quote.-20.65%
GOLD -0.22% 1850.38 Delayed Quote.2.09%
S&P GSCI GOLD INDEX 0.10% 1079.59 Real-time Quote.2.34%
SILVER -0.08% 21.961 Delayed Quote.-5.07%
THYSSENKRUPP AG 1.50% 8.5 Delayed Quote.-13.53%
All news about THYSSENKRUPP AG
06:27aTHYSSENKRUPP : Jefferies reiterates its Buy rating
MD
05/19MARTINA MERZ : Thyssenkrupp CEO Merz gets 5-year contract extension
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05/18Main Shareholder Confirms Plan to Hold On to Thyssenkrupp Stake
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05/18Thyssenkrupp top shareholder has no plan to sell stake
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05/16THYSSENKRUPP : Barclays keeps a Sell rating
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Analyst Recommendations on THYSSENKRUPP AG
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Financials
Sales 2022 38 670 M 41 292 M 41 292 M
Net income 2022 1 280 M 1 366 M 1 366 M
Net cash 2022 3 520 M 3 759 M 3 759 M
P/E ratio 2022 3,98x
Yield 2022 1,36%
Capitalization 5 213 M 5 592 M 5 567 M
EV / Sales 2022 0,04x
EV / Sales 2023 0,03x
Nbr of Employees 97 542
Free-Float 71,2%
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Number of Analysts 12
Last Close Price 8,37 €
Average target price 13,45 €
Spread / Average Target 60,7%
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Managers and Directors
Martina Merz President & Chief Executive Officer
Klaus Keysberg Chief Financial Officer
Siegfried Russwurm Chairman-Supervisory Board
Peter Remmler Member-Supervisory Board
Friedrich Weber Member-Supervisory Board
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