The steel and industrial group Thyssenkrupp expects a significant slowdown in business after making billions in profits in the past fiscal year. The company announced on Thursday in Essen that falling steel prices and rising costs, especially for materials and energy, are likely to cause sales and profits to fall in 2022/23.
The management around CEO Martina Merz expects a significant drop in sales for the current fiscal year (as of the end of September). In addition to the price effects, the sale of parts of the business is also noticeable. In the previous year, revenues had climbed by a good fifth to 41.1 billion euros. The adjusted operating result (EBIT) is expected to fall to a value in the mid to high three-digit million euro range, after 2.1 billion euros in 2021/22. Thyssenkrupp wants to achieve at least a “black zero” when it comes to net income.
Jump in profit after loss in the previous year
Last year, Thyssenkrupp benefited from significant price increases in the steel and trading business and, on balance, achieved a jump in profits to 1.2 billion euros, after a small loss in the previous year. For shareholders, this means the end of a long dry spell. After three years of failure, Thyssenkrupp wants to pay a dividend again for the first time. EUR 0.15 per share is proposed.
“The figures show that we have made good progress in restructuring Thyssenkrupp and have been able to significantly increase the operational performance of the businesses,” said CEO Merz. “Our momentum in the change process was slowed down, but we were able to withstand three external shocks – pandemic, semiconductor shortage and war – relatively robustly.” Chief Financial Officer Klaus Keysberg said: “The time of emergency management is largely behind us and we are now getting closer to what is everyday business for every management: improving productivity in all stages of the value chain.”
Thyssenkrupp AG has around 200,000 owners. The largest single shareholder is the Alfried Krupp von Bohlen und Halbach Foundation with a stake of around 21 percent. Other major investors and shareholders with larger holdings account for around 64 percent. Private investors hold around 15 percent of the share capital.
The Krupp Foundation welcomed the dividend plans. “The company has the potential to become competitive again in the long term and thus be able to pay dividends in the long term,” it said in a statement.
job cuts
In addition to the higher prices, the ongoing restructuring program also bore fruit in the past financial year. Among other things, this also provides for the elimination of a total of almost 13,000 jobs. Almost 10,000 jobs have now been lost. “We are slowly leaving the restructuring phase necessary for the conversion behind us and can concentrate on focused and “normal” increases in productivity,” commented Human Resources Director Oliver Burkhard.
The company wants to continue to set up its steel business independently. The preparations for this would continue. Merz said that it is currently not to be expected that an independent line-up can be implemented next year. For the hydrogen business Nucera, Thyssenkrupp prefers an IPO – depending on the capital market environment. Merz emphasized that Nucera does not need an IPO to finance growth.
