Thyssenkrupp Reports Mixed Results, Plans Marine Business Spin-Off
Industrial conglomerate Thyssenkrupp has had a mixed start to its 2024/25 fiscal year, with demand remaining subdued in its steel, automotive, and trading businesses. However, the company’s marine division has been a bright spot, experiencing significant growth.
Marine Business Drives Growth
Thyssenkrupp’s marine business has been a driving force for the company, with strong growth in new orders. The division has benefited from increased demand due to the evolving geopolitical landscape. CEO Miguel López expressed the company’s commitment to separating the marine business, stating that it will "best position the business to process the high order backlog and meet the ongoing high customer interest in light of the changed security policy environment."
Financial Performance
For the first three months of fiscal 2024/25, Thyssenkrupp’s revenue declined by 4% to EUR 7.8 billion. In addition to weak demand, the company faced pressure from lower prices in its automotive, materials trading, and steel businesses.
Despite the revenue decrease, Thyssenkrupp’s adjusted earnings before interest and taxes (EBIT) improved from EUR 84 million to EUR 191 million. This was largely driven by cost-cutting measures and lower raw material and energy prices. Notably, the steel business saw an increase in profitability, with adjusted EBIT rising from EUR 69 million to EUR 168 million.
However, the company still reported a net loss of EUR 51 million, primarily due to provisions for restructuring costs. This was an improvement compared to the previous year’s quarterly loss of EUR 314 million, which included significant write-downs.
Outlook and Guidance
For the full fiscal year 2024/25, Thyssenkrupp expects to return to profitability, forecasting a net income of EUR 100-500 million. However, due to weak demand, the company has lowered its revenue forecast to a range of -3% to 0%. Previously, the company had anticipated a range of 0-3%.
Business Overview
Thyssenkrupp is a diversified industrial conglomerate with operations in steel, materials, marine shipbuilding, automotive components, and green technologies. As of December 2024, the company employed over 97,000 people worldwide.
Spin-Off and Future Strategy
The spin-off of the marine business is a key strategic move for Thyssenkrupp. The company believes that separating the marine division will unlock value and allow it to focus on its core businesses. Looking ahead, Thyssenkrupp is committed to its transformation program, aiming to improve its cost structure and drive growth in its key markets.
