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ThyssenKrupp Group to Further Optimize Portfolio
08/28/2008 - To support continued growth, ThyssenKrupp is implementing an investment program with a volume of up to €20 billion. A divestiture of the Services segment’s Industrial Services business unit is also planned.
Since completing its consolidation phase three years ago, ThyssenKrupp has been pursuing a sustained and profitable growth course. To support continued growth, the company is implementing an investment program with a volume of up to €20 billion.
ThyssenKrupp’s mid-term target is to achieve sales of €60 billion and sustained earnings before taxes and nonrecurring items of €4 billion. Once the Steel segment’s new slab mill in Brazil is started up, along with the Steel and Stainless segments’ new steelmaking and processing plant in the USA and the international investments of the other segments, ThyssenKrupp expects to achieve sales of around €65 billion and earnings before taxes and nonrecurring items of €4.5 to 5.0 billion.
ThyssenKrupp, a value-oriented conglomerate, operates in a number of business areas including steel, capital goods and services, with various profitable businesses. The aim of the Group’s growth strategy is to expand the global market positions of all of its segments. The strategy is based the Group’s products and services, which the company says share three features: high quality, advanced technology, and tailored to customer requirements.
ThyssenKrupp, a value-oriented conglomerate, operates in a number of business areas including steel, capital goods and services, with various profitable businesses. The aim of the Group’s growth strategy is to expand the global market positions of all of its segments. The strategy is based the Group’s products and services, which the company says share three features: high quality, advanced technology, and tailored to customer requirements.
ThyssenKrupp says that it aims to further strengthen its position in all key markets in the future. New facilities under construction in Brazil and the USA are a key factor in the growth strategies of the Group’s Steel and Stainless segments. The Technologies, Elevator and Services segments are focusing in particular on the growth markets of Asia and the Middle East, while the Group’s Services segment will accelerate its international expansion in raw and industrial materials services in the future.
The Group’s forward strategy is also reflected in its key financials for the current fiscal year. “Our performance to date impressively demonstrates the advantages of our balanced portfolio of activities in Steel, Capital Goods and Services and our strategy of occupying at least top 3 positions in attractive markets,” commented Executive Board Chairman Dr. Ekkehard Schulz. “For the current fiscal year, we have raised our earnings forecast to over €3.2 billion before taxes and nonrecurring items. As things stand at present we also expect sales to increase to €53 billion. This will fulfill our expectations of a good fiscal year.”
In the past fiscal year, the Services segment had 43,000 employees and generated sales of €16.7 billion and EBT of €704 million. Compared with fiscal year 2003/2004, the segment’s sales have grown by around 40% and EBT has almost tripled, a positive trend that has continued in the current fiscal year. Based on the positive results, the Services segment has set new strategic targets, including sales in excess of €20 billion and sustained EBT of €1 billion. To achieve these targets and at the same time safeguard and strengthen the top positions already achieved on the world market, ThyssenKrupp Services is planning to implement a focused strategic plan over the next few years.
The core business of raw and industrial materials services—including the business units Materials Services International, Materials Services North America and Special Products—is to be significantly expanded. To finance that growth, the Group is planning to sell the segment’s Industrial Services business unit in the course of the next year. Although it is highly profitable, this business unit is the smallest in the segment, and has the smallest synergies with the segment’s core business. For the majority of the activities, the company believes that better development opportunities would be available with an owner outside the ThyssenKrupp Group.
The steel service operations in Germany and Brazil will remain in the Group and will in the future be allocated to the Special Products business unit. With the help of a strategic partner (who is to take a substantial minority interest), the Special Products business in Asia and Eastern Europe in particular is to be driven forward.
ThyssenKrupp’s Services segment today comprises four business units: the materials trading operations Materials Services International (€7.9 billion sales) and Materials Services North America (€2.3 billion sales), the Industrial Services business unit (€2.0 billion sales) and the trading and engineering activities of Special Products (€4.6 billion sales). The two business units with materials trading activities plan to accelerate growth to further enhance their market position. The aim is not only to expand in the growth regions of Asia and Eastern Europe but also to consolidate the leading positions achieved on the European and North American markets. At the same time the unit intends to further intensify its focus on growth sectors such as the aerospace industry. With targeted investments and acquisitions, not only will the range of products and services (currently around 150,000 articles) be developed in line with the needs of target groups but also the global warehouse and distribution network (currently around 440 branches) will be systematically expanded.
The Group’s forward strategy is also reflected in its key financials for the current fiscal year. “Our performance to date impressively demonstrates the advantages of our balanced portfolio of activities in Steel, Capital Goods and Services and our strategy of occupying at least top 3 positions in attractive markets,” commented Executive Board Chairman Dr. Ekkehard Schulz. “For the current fiscal year, we have raised our earnings forecast to over €3.2 billion before taxes and nonrecurring items. As things stand at present we also expect sales to increase to €53 billion. This will fulfill our expectations of a good fiscal year.”
In the past fiscal year, the Services segment had 43,000 employees and generated sales of €16.7 billion and EBT of €704 million. Compared with fiscal year 2003/2004, the segment’s sales have grown by around 40% and EBT has almost tripled, a positive trend that has continued in the current fiscal year. Based on the positive results, the Services segment has set new strategic targets, including sales in excess of €20 billion and sustained EBT of €1 billion. To achieve these targets and at the same time safeguard and strengthen the top positions already achieved on the world market, ThyssenKrupp Services is planning to implement a focused strategic plan over the next few years.
The core business of raw and industrial materials services—including the business units Materials Services International, Materials Services North America and Special Products—is to be significantly expanded. To finance that growth, the Group is planning to sell the segment’s Industrial Services business unit in the course of the next year. Although it is highly profitable, this business unit is the smallest in the segment, and has the smallest synergies with the segment’s core business. For the majority of the activities, the company believes that better development opportunities would be available with an owner outside the ThyssenKrupp Group.
The steel service operations in Germany and Brazil will remain in the Group and will in the future be allocated to the Special Products business unit. With the help of a strategic partner (who is to take a substantial minority interest), the Special Products business in Asia and Eastern Europe in particular is to be driven forward.
ThyssenKrupp’s Services segment today comprises four business units: the materials trading operations Materials Services International (€7.9 billion sales) and Materials Services North America (€2.3 billion sales), the Industrial Services business unit (€2.0 billion sales) and the trading and engineering activities of Special Products (€4.6 billion sales). The two business units with materials trading activities plan to accelerate growth to further enhance their market position. The aim is not only to expand in the growth regions of Asia and Eastern Europe but also to consolidate the leading positions achieved on the European and North American markets. At the same time the unit intends to further intensify its focus on growth sectors such as the aerospace industry. With targeted investments and acquisitions, not only will the range of products and services (currently around 150,000 articles) be developed in line with the needs of target groups but also the global warehouse and distribution network (currently around 440 branches) will be systematically expanded.
With sales of 51.7 billion euros and 191,350 employees in over 70 countries, ThyssenKrupp is one of the world's major technology groups and occupies strong positions on the international markets. The three main business areas of steel, capital goods and services, organized in five segments—Steel, Stainless, Technologies, Elevator and Services—mark out the Group's areas of competence.
