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ThyssenKrupp Q1 operating earnings €168 million, will split

Staff Writer |
In the first three months of the current fiscal year 2018/2019 ThyssenKrupp followed on seamlessly from its positive performance of previous quarters.

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Despite rising economic uncertainties, order intake and sales of the continuing operations grew further.

In the 1st quarter 2018/2019 ThyssenKrupp received new orders worth €8.1 billion, up 6 percent year-on-year. Sales were 3 percent higher at €7.9 billion.

Operating earnings of the continuing operations (adjusted EBIT) amounted to €168 million and were therefore as expected below the high level of the prior-year quarter.

Adjusted EBIT of the continuing operations in the 1st quarter was €168 million and thus as expected down from the strong prior year (€265 million).

At Components Technology higher start-up costs for customer projects and a weaker performance at Springs and Stabilizers among other things resulted in decreased earnings (down 36 percent to €49 million).

Earnings at Elevator Technology were also lower year-on-year (down 7 percent to €204 million) due to higher material costs in China and tariffs on material imports into the USA.

At Industrial Solutions adjusted EBIT fell to €(23) million (prior year: €13 million) mainly due to lower margins on projects currently under execution.

Marine Systems remained stable at around break-even, while Materials Services was unable to match the prior year’s high earnings level due to declining prices (down 57 percent to €22 million).

The historically low water levels on the Rhine and temporarily lower demand from the auto industry following the introduction of new emissions standards severely impacted the earnings of the discontinued business area Steel Europe in the 1st quarter 2018/2019.

Adjusted EBIT came to €38 million compared with €163 million in the prior-year period.

ThyssenKrupp has taken the next step on the path to the planned separation of the company.

Today the Group announced the leadership structures of the two future companies, creating the framework for the concrete organization of ThyssenKrupp Industrials and ThyssenKrupp Materials.

At each company the number of board directorates will be reduced to three, and central functions will be combined.

From 17 corporate and service functions today, there will be just 14 at ThyssenKrupp Industrials and just 10 at ThyssenKrupp Materials.

The current matrix structure will be dissolved.

In the future there will be no regional structure besides the business areas at headquarters level.

The tasks in the regions will be performed by the operating units or central functions.

The shared service units will also be allocated according to business requirements and focused more closely.

The Group is anticipating relatively low dissynergies from the separation.

Countermeasures should make it possible to avoid cost increases as far as possible.

The measures already planned to reduce G&A costs will be continued.

In the 2020/2021 fiscal year, the G&A costs of the two companies together should be below €300 million (fiscal year 2017/2018: around €380 million).

As agreed with the employee representatives, there will be no compulsory redundancies on account of the separation.


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