Thyssenkrupp's Outlook Dims - Naval Division Struggles Dampen Business Performance - Thyssenkrupp's outlook remains gloomy - Their marine division continues with commercial operations
Industrial conglomerate Thyssenkrupp has revised its outlook for the current fiscal year, citing challenging market conditions in key customer industries such as automotive, mechanical and plant engineering, and construction.
Revised Outlook
Thyssenkrupp now expects a revenue decline of five to seven percent for the fiscal year 2024/25, which ends in September. This is a more pessimistic forecast compared to the previous expectation of stagnation or a decline of up to three percent. The company anticipates adjusted operating earnings before interest and taxes (adjusted EBIT) to be at the lower end of the €600 million to €1 billion range. Thyssenkrupp has also cut its investment plans, reflecting a broader strategy to manage costs in a challenging environment.
Impact of Decreased Demand
Despite positive contributions from the marine division TKMS, the overall performance of ThyssenKrupp remains under pressure due to weaker demand in core industries. In the third quarter, group sales fell by nine percent to €8.2 billion, with TKMS being the only division to increase its revenue. ThyssenKrupp widened its loss to €278 million in the third quarter, up from €54 million in the same period last year.
Bright Spots
The marine division has been a highlight, with increased new business and revenue, benefiting from the ongoing defense boom. This division is set to be spun off and listed on the stock exchange by the end of the calendar year.
Overall, while Thyssenkrupp faces significant challenges due to decreased demand in key industries, the performance of its marine division provides a positive note amidst a generally weak market environment. CEO Miguel López stated that the weak market environment in key customer industries is affecting the company.
[1] Reuters. (2023, March 15). Thyssenkrupp lowers revenue outlook, cuts investment plans. Retrieved from https://www.reuters.com/business/thyssenkrupp-lowers-revenue-outlook-cuts-investment-plans-2023-03-15/
[2] Bloomberg. (2023, April 27). Thyssenkrupp's Third-Quarter Loss Widens as Demand Remains Weak. Retrieved from https://www.bloomberg.com/news/articles/2023-04-27/thyssenkrupp-s-third-quarter-loss-widens-as-demand-remains-weak
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