Thyssenkrupp Raises Earnings Forecast for 2020/2021
Thyssenkrupp has made a good start to the new fiscal year. In the 1st quarter 2020/2021 the group of companies posted order intake totalling EUR 7.8
Thyssenkrupp has made a good start to the new fiscal year. In the 1st quarter 2020/2021 the group of companies posted order intake totalling EUR 7.8 billion, up 6% YoY before the outbreak of the coronavirus pandemic. Sales from October to December 2020 amounted to EUR 7.3 billion as compared to EUR 7.6 billion in October to December 2019. Increasing revenues were recorded by the segments Industrial Components, Automotive Technology and Steel Europe. However, this could not offset partly pandemic related decreases at Materials Services, Marine Systems and Multi Tracks. Adjusted EBIT at EUR 78 million was significantly higher than the prior year figure of minus EUR 185 million. All segments, except Multi Tracks, made positive earnings contributions. In view of the good 1st quarter performance, thyssenkrupp has raised its earnings forecast: for the 2020/2021 fiscal year the group now expects almost break even adjusted EBIT as compared to previously expected loss in the mid three digit million euro range.
Thyssenkrupp AG CEO Ms Martina Merz said “In a continuing uncertain market environment, we had a good first quarter: we’re noticing signs of an economic recovery and our measures to improve performance in the businesses are starting to bear fruit. We’ve posted positive results, but we’re not out of the woods yet. Further efforts are needed to make thyssenkrupp into a powerful group of companies on a long-term basis. That’s why we’re continuing to press ahead with the transformation.”
In a structurally extremely challenging market environment, order intake and sales at Steel Europe were up 17% and 7% respectively from the prior year. After the unprecedented pandemic-related demand slump in spring and summer 2020, business is now picking up again. Restocking at steel service centers, catch up effects mainly at automotive customers, and good demand from appliance manufacturers and the construction sector are having a positive impact. As a result of increasing capacity utilization together with an improved product mix and initial effects from the ongoing restructuring with advancing personnel reduction and the initiated performance measures, adjusted EBIT improved significantly to EUR 20 million as compared to minus EUR 127 million in prior year
Forecast for fiscal year 2020/2021 raised - Despite the expected recovery of important markets and the visible structural improvements to the businesses, thyssenkrupp still feels it appropriate to offer a cautious outlook overall for the 2020/2021 fiscal year. The economic and geopolitical uncertainties give the group only limited planning reliability for the cyclical materials businesses and for auto components, particularly in the second half of the current fiscal year. Nevertheless, following the good start to the fiscal year the company has raised its full-year forecast. Depending in particular on the further progression of the coronavirus pandemic, sales will grow in the high single-digit percentage range, but will still remain well below the level prior to the pandemic. Mainly as a result of improved demand in the materials and automotive components businesses, thyssenkrupp expects a significant improvement in adjusted EBIT towards almost break even. Despite clear operating improvements and the absence of impairment losses on non-current assets from the prior year, thyssenkrupp expects a net loss in the high three digit million euro range