Thyssenkrupp, the German industrial group, released its latest financial report, showing both challenges and progress as it moves forward with its restructuring plans. The company continues to face market uncertainties but has managed to improve key financial indicators compared to the previous year.
Net Loss Narrows Amid Lower Sales
For the October to December period, Thyssenkrupp posted a net loss of €33 million. While this marks a negative result, it is a sharp improvement from the €305 million net loss recorded in the same quarter last year. The company attributed this reduction in losses to strategic cost-saving initiatives and operational efficiency improvements.
Group sales, however, declined from €8.2 billion to €7.8 billion. The drop was driven by weaker demand and lower prices in key sectors. Despite this, Thyssenkrupp managed to boost its adjusted earnings before interest and taxes (EBIT) to €191 million for the quarter, a clear sign that its cost-cutting efforts are paying off.
“Despite a tough market environment, we made progress in the first quarter,” said Jens Schulte, the company’s Chief Financial Officer. “The EBIT growth shows that our structural initiatives to enhance efficiency and reduce costs are working.”
Schulte emphasized that these measures will continue to play a crucial role in the company’s strategy. “We remain focused on building on these successes and strengthening our financial position,” he added.
Strong Orders Boost Marine Division
A key highlight of the report was the strong performance of Thyssenkrupp’s marine division. The business, which specializes in military vessels and submarines, has seen a sharp increase in demand due to global defense spending trends. The company’s order intake surged by more than 50% year-on-year, reaching €12.5 billion.
One of the main contributors to this growth was a large defense contract, which also helped reduce the company’s cash outflow. Free cash flow before mergers and acquisitions showed a loss of €21 million, a significant improvement compared to the €531 million cash outflow from the same period last year.
Thyssenkrupp is now forecasting positive free cash flow between €0 and €300 million for the 2024/2025 fiscal year. This is a major upgrade from its previous estimate of losses ranging from €200 million to €400 million. The company credits this outlook to strong demand in its marine division and improved financial discipline across its business units.
Strategic Restructuring in Motion
CEO Miguel López reiterated the company’s commitment to its long-term transformation strategy. “Our mission is to strengthen the competitiveness of our businesses, drive sustainable growth, and secure jobs for the future,” he said.
A major part of this restructuring involves plans to separate its European steel division. Thyssenkrupp is also preparing to spin off its marine systems business and list it on the stock exchange. This move aims to capitalize on the rising demand for military equipment amid increasing geopolitical tensions.
“Global trends indicate a rising need for defense capabilities,” the company stated. “By making marine systems an independent company, we can fully unlock its potential.” The spin-off process is being fast-tracked to take advantage of market opportunities.
Green Technologies Show Promise
Another positive development in the report was the performance of Thyssenkrupp’s decarbonization technologies division. The company is investing heavily in clean energy solutions and has reported significant growth in this sector. This aligns with the broader industry shift toward sustainability and reduced carbon emissions.
While overall sales are expected to remain stable or slightly decline in the coming year, Thyssenkrupp remains optimistic about its long-term prospects. The company now forecasts adjusted EBIT between €600 million and €1 billion for the 2024/2025 fiscal year. Net profit is projected to be in the range of €100 million to €500 million.
“We are making our organization leaner and more agile to tackle market challenges head-on,” López stated. “Our focus remains on delivering value for our shareholders while driving sustainable innovation.”
As Thyssenkrupp moves forward with its restructuring, investors and analysts will closely watch how the company navigates economic challenges and executes its long-term strategies. For more updates on finance and the latest market trends, visit Wallstreet Storys.
