Thyssenkrupp’s radical restructuring involving a string of disposals and cost cuts is about halfway complete. This is with the group on track for higher sales and margins. This was stated by its leadership team on its Capital Markets Day. The sprawling conglomerate began stripping off division after division in 2020. This includes a sale of its profitable elevator business for 17.2 billion euros. This is in an attempt to bring down roughly the same sum’s worth of debt and crippling pension liabilities.
The German steel-to-submarines conglomerate expects mid-term adjusted margins of 4-6%. They aim to restore its ability to consistently pay a dividend. The group had reported an adjusted margin of 2.3%. CEO Martina Merz said that they are relentlessly pushing forward the full transformation to the group. 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.
These transactions should bring in a high-triple-digit-million-euro figure to bolster the company’s net financial position and pension liabilities. Next in line are the marine systems division. This could see partnerships, consolidation or a standalone scenario. The cement plant construction and chemicals divisions future will be decided on soon. More details about the initial public offering of its hydrogen division Uhde Chlorine Engineers planned early next year will be announced at a capital markets day.
Chief Financial Officer Klaus Keysberg said that the higher material prices and expanding margins in both materials and steel should fuel higher sales and earnings. 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%. This is for the industrial components and 7-8% for automotive. In this over 80% of sales were being generated from components not used in combustion engines.
Leave a Reply