Thyssenkrupp’s Transformation Journey: Key Milestones and Strategies
Thyssenkrupp AG, a global leader in diversified industrial solutions, has marked a pivotal year in its ongoing transformation during the fiscal year 2023/2024. Despite facing challenging economic conditions, the company achieved important milestones that reflect its commitment to restructuring and becoming more sustainable. From strategic partnerships to major investments in decarbonization, Thyssenkrupp is forging a path toward long-term growth, guided by the overarching goal of enhancing operational efficiency and sustainability.
A Strong Move in Steel: EP Group Takes a 20% Stake
In a major step towards reshaping its steel business, thyssenkrupp made significant strides in its steel segment, where EP Group acquired a 20% stake in the steel operations. This marks a crucial milestone as the company works toward establishing a stand-alone solution for the business. The move is part of a broader strategy to combat global steel overcapacity and reduce production levels. The plan includes reducing annual steel production from 11.5 million metric tons to 8.7 to 9 million metric tons by the end of the decade, aligning capacity with actual market demand.
Moreover, thyssenkrupp Steel continues its transformation toward climate-neutral steel production, with plans to replace two blast furnaces in Duisburg with a direct reduction plant by 2030. This shift is a critical part of the company’s larger sustainability efforts, which aim to significantly reduce carbon emissions from steel manufacturing.
Diversifying and Restructuring the Business Portfolio
The company’s commitment to streamlining its portfolio saw further progress, with the sale of its electrical steel business in India for €440 million. This transaction is in line with Thyssenkrupp’s focus on reducing exposure to traditional steel markets and increasing investment in more sustainable and profitable segments.
Another key development in the marine business saw the company securing major orders, fueling expectations for growth. The spin-off of Thyssenkrupp Marine Systems is in progress, with the goal of unlocking additional growth potential for the marine division. This strategic shift allows the company to concentrate on its core competencies and position the business unit for success in the long term.
Automotive and Materials Services: Reshaping for the Future
The Automotive segment is also undergoing major restructuring, including the ongoing negotiations for the sale of the Springs & Stabilizers business unit and the planned shutdown of powertrain activities at its Bremen site by 2026. The restructuring of the Automotive Body Solutions business unit in Germany is designed to boost competitiveness and profitability by modernizing processes and services.
In the Materials Services segment, Thyssenkrupp is transitioning from a traditional materials supplier to a fully digitalized supply chain manager. By focusing more on data-driven supply chain solutions and expanding its reach in North America, the company aims to improve market positioning and tap into new growth opportunities.
The Green Transition: Focus on Decarbonization
One of the most notable efforts in the company’s transformation is its green transition. The newly established Decarbon Technologies division focuses on innovative solutions for CO₂ capture in industries like cement and hydrogen production. These technologies are essential for Thyssenkrupp’s future business strategy, as they help to develop green energy solutions that contribute to global decarbonization efforts.
Additionally, businesses like Polysius and Uhde are pivoting toward modularized and standardized products in plant engineering, with an increasing focus on profitable service business models. This forward-thinking approach is expected to create new growth, particularly in regions such as Southern Europe, North America, and Asia.
Financial Results Amid Market Challenges
Despite the global challenges of fiscal year 2023/2024, including weaker demand, Thyssenkrupp successfully achieved its sales and adjusted EBIT targets. The company posted a 7% decline in sales to €35 billion and achieved adjusted EBIT of €567 million. Free cash flow before M&A stood at a positive €110 million, and the equity ratio remained strong at 35%. Net financial assets also rose to €4.4 billion, supporting the company’s strategic investments and transformation plans.
In response to these positive financial results, the company proposed a dividend of 15 euro cents per share, reflecting its commitment to providing returns to shareholders while maintaining a strong financial position.
2025: A Year of Critical Decisions for Thyssenkrupp
Looking ahead to fiscal year 2024/2025, CEO Miguel López outlined that the year will be a “year of decisions” for Thyssenkrupp. The company’s focus will be on finalizing the restructuring of the steel business, accelerating the spin-off of the marine business, and continuing efforts to decarbonize across its operations. As global markets for green products like hydrogen mature, Thyssenkrupp is positioning itself to capitalize on emerging opportunities in the renewable energy space.
Thyssenkrupp remains committed to its medium- and long-term goals of maintaining positive free cash flow before M&A and delivering value-added results in the coming years. To achieve these objectives, the company is continuing to implement its APEX performance program, which aims to improve the performance and efficiency of all its business units.
