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ThyssenKrupp Reports Positive Performance in the First Six Months of Fiscal Year 2014/2015
05/20/2015 - The industrial and technology group ThyssenKrupp achieved its operating targets in the 2nd quarter and in the 1st half of fiscal year 2014/2015 and has specified and raised its forecast for the full year.
Sales, adjusted EBIT and free cash flow in the reporting period increased in part significantly. “Our measures to improve efficiency are working and we are moving forward with the transformation of the Group. The further earnings improvement reflects our stronger performance focus,” says ThyssenKrupp CEO Dr. Heinrich Hiesinger.
In a continuing challenging economic climate order intake came to €20.5 billion in the 1st half, down only slightly, by 2%, from the prior year (prior year €20.8 billion). Besides sharply falling steel prices, the main reason for this decline was a major order at Marine Systems recorded in the 1st quarter of the prior year. All the other capital goods businesses showed steady to sharply rising order intake compared with the prior year. The elevator business again reported record new orders.
1st-half sales increased year-on-year by 9 percent to a total €21 billion (prior year €19.4 billion), thanks to strong organic growth in the capital goods businesses as well as positive exchange rate and portfolio effects. On a comparable basis the increase was 2 percent.
Adjusted EBIT from continuing operations in the 1st half increased significantly by 31 percent to €722 million (prior year €551 million). The 2nd quarter contributed €405 million to this, improving by 28 percent compared with the 1st quarter. The main driver of this improvement was the successful implementation of efficiency programs. Altogether the ThyssenKrupp Group generated net income of €88 million in the 1st half (prior year €200 million). This already includes the write-down taken in connection with the sale of the VDM group, while the prior year included a book gain on the sale of the steel mill in the USA. After deducting minority interest, net income for the period was €98 million (prior year €204 million); earnings per share came to €0.17 (prior year €0.37).
At €(706) million, free cash flow before divestments in the 1st half improved year-on-year by €154 million (prior year €(860) million) but as expected remained clearly negative. This was due partly to a temporary increase in net working capital in the 1st quarter, caused among other things by the strike at AST in Italy and a major order at Materials Services. The 2nd quarter showed an improvement quarter-on-quarter and year-on-year of around €600 million and was almost break-even at €(55) million.
Net financial debt of the full Group increased by almost €1 billion to €4.6 billion in the 1st half. The increase was due mainly to the negative free cash flow as well as strong currency effects.
Against the background of the progress made in operating performance and the generally stabilizing economic conditions, management has specified and raised its forecast for the full year 2014/2015: Adjusted EBIT is now expected to increase significantly to €1.6 -1.7 billion. With the exception of Steel Americas, all business areas will generate significant positive contributions. At Steel Americas, ThyssenKrupp expects at least a significant improvement towards break-even EBIT based on operating progress. On a comparable basis, the Group’s sales are expected to grow by a single-digit percentage rate. Management likewise expects a significant improvement in net income (prior year €195 million). Significant progress is also expected in cash generation from operating activities: Free cash flow before divestments should be at least break-even.
For a further breakdown of the performance of ThyssenKrupp’s business areas in the first half of 2014/2015, read the full press release at www.thyssenkrupp.com.
ThyssenKrupp is a diversified industrial group with traditional strengths in materials and a growing share of capital goods and services businesses. Around 155,000 employees in nearly 80 countries work with passion and technological expertise to develop high-quality products and intelligent industrial processes and services for sustainable progress. Their skills and commitment are the basis of our success. In fiscal year 2013/2014 ThyssenKrupp generated sales of around €41 billion.
In a continuing challenging economic climate order intake came to €20.5 billion in the 1st half, down only slightly, by 2%, from the prior year (prior year €20.8 billion). Besides sharply falling steel prices, the main reason for this decline was a major order at Marine Systems recorded in the 1st quarter of the prior year. All the other capital goods businesses showed steady to sharply rising order intake compared with the prior year. The elevator business again reported record new orders.
1st-half sales increased year-on-year by 9 percent to a total €21 billion (prior year €19.4 billion), thanks to strong organic growth in the capital goods businesses as well as positive exchange rate and portfolio effects. On a comparable basis the increase was 2 percent.
Adjusted EBIT from continuing operations in the 1st half increased significantly by 31 percent to €722 million (prior year €551 million). The 2nd quarter contributed €405 million to this, improving by 28 percent compared with the 1st quarter. The main driver of this improvement was the successful implementation of efficiency programs. Altogether the ThyssenKrupp Group generated net income of €88 million in the 1st half (prior year €200 million). This already includes the write-down taken in connection with the sale of the VDM group, while the prior year included a book gain on the sale of the steel mill in the USA. After deducting minority interest, net income for the period was €98 million (prior year €204 million); earnings per share came to €0.17 (prior year €0.37).
At €(706) million, free cash flow before divestments in the 1st half improved year-on-year by €154 million (prior year €(860) million) but as expected remained clearly negative. This was due partly to a temporary increase in net working capital in the 1st quarter, caused among other things by the strike at AST in Italy and a major order at Materials Services. The 2nd quarter showed an improvement quarter-on-quarter and year-on-year of around €600 million and was almost break-even at €(55) million.
Net financial debt of the full Group increased by almost €1 billion to €4.6 billion in the 1st half. The increase was due mainly to the negative free cash flow as well as strong currency effects.
Against the background of the progress made in operating performance and the generally stabilizing economic conditions, management has specified and raised its forecast for the full year 2014/2015: Adjusted EBIT is now expected to increase significantly to €1.6 -1.7 billion. With the exception of Steel Americas, all business areas will generate significant positive contributions. At Steel Americas, ThyssenKrupp expects at least a significant improvement towards break-even EBIT based on operating progress. On a comparable basis, the Group’s sales are expected to grow by a single-digit percentage rate. Management likewise expects a significant improvement in net income (prior year €195 million). Significant progress is also expected in cash generation from operating activities: Free cash flow before divestments should be at least break-even.
For a further breakdown of the performance of ThyssenKrupp’s business areas in the first half of 2014/2015, read the full press release at www.thyssenkrupp.com.
ThyssenKrupp is a diversified industrial group with traditional strengths in materials and a growing share of capital goods and services businesses. Around 155,000 employees in nearly 80 countries work with passion and technological expertise to develop high-quality products and intelligent industrial processes and services for sustainable progress. Their skills and commitment are the basis of our success. In fiscal year 2013/2014 ThyssenKrupp generated sales of around €41 billion.
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