ThyssenKrupp Makes Good Start in First Quarter of 2010-11
02/14/2011 - ThyssenKrupp reports a 21% year-on-year increase in order intake in the first quarter of fiscal 2010/2011, from €9,328 million to €11,260 million. Sales also rose distinctly by 22% from €9,351 million to €11,370 million.
ThyssenKrupp continued its positive performance in the first quarter of fiscal 2010/2011 with a 21% year-on-year increase in order intake, from €9,328 million to €11,260 million. Sales also rose distinctly by 22% from €9,351 million to €11,370 million.
Sustainable cost savings also allowed the Group to considerably improve its structural earning power, with earnings before interest and taxes (EBIT) reaching €273 million in the first three months of the new fiscal year, compared with €353 million in the prior year. However, earnings in the 1st quarter of the current year were impacted much more strongly by the negative contribution of the Steel Americas business area of €(378) million (prior year: €(71) million) caused by the startup losses of the new steel plants. In addition, the prior-year figure was favorably impacted by special items of €76 million.
Adjusted EBIT was unchanged from the prior year (€277 million) at €273 million, despite the significantly higher negative impact from the Steel Americas business area. All business areas apart from Steel Americas made a positive earnings contribution.
Dr. Heinrich Hiesinger, the new Chairman of the Executive Board of ThyssenKrupp AG since January 21, 2011, believes the Group is well on the way to achieving its ambitious targets for the 2010/2011 fiscal year. “We are registering an encouraging economic upturn with very dynamic price and volume growth in materials and components,” said Hiesinger. “In the elevator business and plant construction we are profiting from full order books and keen demand, particularly from the new growth markets.”
In fiscal 2010/2011 ThyssenKrupp expects an increase in sales by 10% to 15% vs. 2009/2010 sales of €42.6 billion. The Group’s earnings are expected to grow faster than sales. This will follow from further operating improvements and the recovery of the sales markets, which will more than offset the considerable negative contribution from the Steel Americas business area in the higher three-digit million euro range. Based on the upward trend in all the other business areas, the Group is expecting adjusted earnings before interest and taxes will be around €2 billion, vs. 2009/2010 adjusted EBIT of €1.2 billion.
Highlights for the Group’s first quarter of 2010/2011 include the following:
· 21% year-on-year increase in order intake to €11.3 billion
· 22% increase in sales to €11.4 billion
· EBITDA came to €645 million, compared with €683 million in the prior year.
· EBIT at €273 million was down from the prior-year figure of €353 million, which had been favorably impacted by €76 million in special items
· Adjusted EBIT also came to €273 million (vs. €277 million for the prior year)
· Earnings per share amounted to €0.31, compared with €0.35 in the prior year.
Net financial debt at December 31, 2010 was €5,814 million, an increase of €2,034 million from September 30, 2010, when net financial debt of €3,780 million was reported. The increase in net financial debt is primarily due to the high borrowing requirements in connection with the investments for the new carbon and stainless steel plants in Brazil and the USA, and to the increase in net working capital for the ramp-up of these plants. In addition, the significant rise in demand from customers required a corresponding increase in inventories. Substantial rises in raw material prices had the effect of increasing net working capital. On December 31, 2009 net financial debt stood at €2,130 million.
“Our ambitious cash and earnings targets require that we systematically continue and further develop our structural improvement programs while maintaining very strict spending discipline this fiscal year and beyond,” noted Hiesinger. “This will include further programs to achieve sustainable cost reductions, targeted portfolio adjustments and also improvements to inventory management. Reducing our net financial debt is our number-one priority.”
ThyssenKrupp is an integrated materials and technology group with currently almost 177,000 employees in more than 80 countries developing ideas and innovations to offer solutions for sustainable progress. In the 2009/2010 fiscal year they generated sales of more than €42 billion. Eight business areas focus the Group’s activities and know-how in the strategic competency areas of Materials and Technologies. In addition to manufacturing materials and plants, the Group also provides complete system solutions and innovative services.
