Note the change: thyssenkrupp Shares Low: thyssenkrupp wants to shift a gear in the coming years

“We are also now working on the next phase of our transformation, in which we will increasingly focus on growth opportunities across businesses,” CEO Martina Merz said Thursday at an investor event in Essen. After years of renovations with painful cuts, the last financial year had already seen the first successes – the manager now wants to take advantage of it. Things should continue to grow financially.

In the coming years, the company’s management wants to ensure that, over the medium term, 4 to 6 percent of sales remain as profit, before interest, taxes, and special effects. In the last financial year (end of September), the profitability measure was only 2.3 per cent, despite significant improvements. According to Jefferies Investment Bank analyst Alan Spence, the company is slightly above analysts’ expectations with the plan — they will average 4.1 percent on the list for the 2023/24 fiscal year.

In a weak morning environment, shares of thyssenkrupp were down 0.85 percent at EUR 9.84 via XETRA. The paper was significantly increased in mid-November after speculation about the progress of stock exchange plans for the hydrogen business and the group presented a reassuring forecast for the current year with annual results. Recently, the exchange rate was hovering around 10 euros, but was above 12 euros in the spring. On the stock exchange, the group is currently worth a little over six billion euros.

Free flow of funds prior to acquisitions and sales of parts of the company should again be “quite positive” in the medium term. The return of reliable dividend payouts is “clearly defined as a goal,” the company said. For the fiscal year that had just begun, the group made another distribution to shareholders after three consecutive approvals. According to management, growth in the coming years is likely to come primarily from the digitization and restructuring of the business around Grolzledger, the auto parts and materials business.

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In the steel business and shipbuilding, CFO Claus Keyesberg plans medium-term operating margin (adjusted EBIT) of 6 to 7 percent. Auto supplies are said to be more attractive with a margin of 7 to 8 per cent and industrial components with a margin of at least 10 per cent. The target return in material trading is 2 to 3 per cent. Auto parts and shipbuilding in particular will outperform analysts’ expectations. On the other hand, for steel and industrial components, experts can envision an even bigger margin.

thyssenkrupp has had many difficult years. Problems in business went hand in hand with changes in leadership and swings in strategy. Management has prepared the former industrial conglomerate so that it does not remain in its traditional form forever. The steel division as the heart of the group is no longer sacred.

Management recently cut costs, with thousands of jobs falling victim to it. By the financial year 2023/24, 12,000 jobs are to be cut, of which 7,800 have already been cut by the company in the last two financial years. The company had approximately 101,000 full-time positions at the end of September.

On the way to a more dynamic set-up, some renovation work may still be needed. European steel business still on hold – After the failed merger with Tata Steel, the group is still exploring options on how to set up the long sluggish business and whether it will be able to do more independently in the longer term than the conglomerate. is better than. Umbrella. Other sectors are shipbuilding, chemical plant construction and cement business. On the other hand, the materials trade, industrial components and automotive supplies remain firmly in thyssenkrupp hands.

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A key element of the strategy is the shift towards more climate-friendly technologies. Steel production, in particular, is one of the major sources of climate-damaging carbon dioxide (CO2) emissions and, as a result of EU emissions requirements, should switch itself to “green” steel production in the coming years.

To this end, among other things, an increased commitment to hydrogen as an energy source is planned. Therefore, the company also made public its plan to bring the hydrogen joint venture Uhde on the stock exchange. However, thyssenkrupp wants to keep a majority in the business. Ude Chlorine Engineers (UCE) is a specialist in the construction of large electrolysis plants, for example for the production of hydrogen from water with the help of renewable energy. On January 13, thyssenkrupp plans to report in more detail on the business in a separate investor event.

food (dpa-afx)