thyssenkrupp reported a robust start to fiscal 2024/2025, marked by higher orders, improved earnings, and a brighter cash flow outlook despite softer sales. Strategic initiatives, including portfolio restructuring and efficiency gains, underpinned progress in challenging markets.
Order Intake and Strategic Wins
Order intake surged 53% year-on-year to €12.5 billion in Q1, driven by Marine Systems’ €1 billion submarine contract extension for the German-Norwegian 212CD program and the Polarstern II icebreaker. Materials Services saw modest order growth, while Steel Europe and Automotive Technology faced demand declines. Decarbon Technologies’ orders dipped due to deferred projects in electrolysis and chemical plant sectors.
Financial Performance Highlights
Group sales fell 5% to €7.8 billion, pressured by lower prices and demand in Steel Europe, Automotive Technology, and Materials Services. Adjusted EBIT rose 56% to €191 million, bolstered by energy cost relief, raw material savings, and APEX 2.0 efficiency gains. Free cash flow before M&A improved sharply to €(21) million from €(531) million a year earlier, aided by Marine Systems’ advance payments. Net loss narrowed to €33 million (vs. €305 million), with liquidity holding strong at €6.8 billion.
Segment Breakdown
- Marine Systems: Record €16.4 billion order backlog; sales up on submarine progress. Spin-off plans advance to capitalize on defense demand.
- Steel Europe: EBIT rose despite lower sales; €440 million from India electrical steel divestment boosts capital. Restructuring as an independent entity progresses.
- Decarbon Technologies: Sales climbed post-divestment of thyssenkrupp Industries India. Contracts for carbon capture (e.g., Titan Group’s 1.9 million metric ton/year CO₂ reduction) and green hydrogen (Oman partnership) highlight growth.
- Automotive Technology: Sales dropped 13% amid weak demand; restructuring includes potential Springs & Stabilizers sale and Bremen plant closure.
- Materials Services: Orders up slightly; acquisitions in sustainability platforms (WAVES) and U.S. precision metal processing aim to diversify.
Strategic Moves and Market Positioning
APEX 2.0 delivered €107 million in Q1 savings. Steel Europe’s future business plan targets independence, while Marine Systems’ spin-off aims to unlock defense sector potential. Decarbon Technologies pivots to modular solutions, eyeing growth in Europe, MENA, and North America.
Revised Full-Year Forecasts
- Sales: Lowered to (3)%–0% growth (vs. prior 0%–3%) on demand weakness.
- Adjusted EBIT: Confirmed at €600 million–€1 billion.
- Free Cash Flow Before M&A: Raised to €0–€300 million (from €(400)–€(200) million), reflecting Marine Systems’ prepayments.
- Net Income: Anticipated return to profit (€100–€500 million), excluding restructuring costs.
