Thyssenkrupp reports solid earnings in a weak market - restructuring continues

Thyssenkrupp closed fiscal year 2024/2025 with positive free cash flow before M&A and key progress on its strategic transformation, while operating in what it describes as a “persistently difficult market environment.” Order intake rose sharply on the back of major submarine contracts, while sales declined due to weak demand and lower prices in materials and steel.

The group presented its new strategic model, ACES 2030, which envisages Thyssenkrupp AG becoming a financial holding with stand-alone businesses open to external investment. According to CEO Miguel López, “we made key decisions for the transformation of thyssenkrupp in the past fiscal year,” and “the first milestones were already achieved.” These include the stock market listing of TKMS and the conclusion of the “Steel Realignment” collective restructuring agreement.

Higher earnings despite lower sales

Order intake rose 15% to €37.7 billion, driven by Marine Systems’ expanded submarine programs with Germany/Norway and Singapore. Sales fell 6% to €32.8 billion amid pricing and demand pressures in Materials Services and Steel Europe. Despite this, adjusted EBIT increased to €640 million from €567 million. Thyssenkrupp attributes the improvement to efficiency gains through its APEX program and positive one-off effects, particularly in Decarbon Technologies.

López said the year was “again characterized by geopolitical and economic challenges,” adding that “we succeeded in holding our ground thanks to systematic efficiency improvements and cost reductions.”

Free cash flow before M&A was clearly positive at €363 million — the third consecutive year in the black — supported by working capital improvements and strong prepayments in Marine Systems.

Net income reached €532 million, mainly due to a reversal of impairment losses on TK Elevator (€902 million) and the sale of the Electrical Steel India business. This compares with a loss of €1.45 billion in the previous year.

Outlook shaped by transformation costs

For fiscal year 2025/2026, Thyssenkrupp expects sales between –2% and +1% and adjusted EBIT between €500 million and €900 million. Free cash flow before M&A is forecast between –€600 million and –€300 million, reflecting restructuring measures and project-business cash profiles. Net income is expected to fall between –€800 million and –€400 million.

CFO Axel Hamann said: “Our forecast takes account of the persistently challenging market conditions and of the efficiency and restructuring measures in our segments.” He added that these measures provide “the basis for sustainably improving our earnings.”

A dividend of €0.15 per share will be proposed, maintaining payout continuity.

Segment developments and steel negotiations

Across the group, the move toward stand-alone businesses is accelerating. Automotive Technology is implementing a global efficiency program and restructuring 1,800 jobs in administrative and corporate functions. Decarbon Technologies continues to develop projects in green ammonia, hydrogen and carbon-neutral cement. Materials Services is expanding its North American service and manufacturing footprint and strengthening digital offerings.

Steel Europe remains in deep restructuring. The company and IG Metall have signed the “Steel Realignment” collective agreement, aimed at reducing capacity and costs without compulsory redundancies. Thyssenkrupp confirmed receipt of a “non-binding indicative offer” from Jindal Steel International for a majority stake in the steel division. The group says the offer is under review with regard to “economic viability, the continuation of the green transformation and employment at the company’s steel sites.”

Source and Photo: Thysenkrupp