The transformation at ThyssenKrupp is bearing fruit. After a strong 3rd quarter, the Executive Board of the Essen based industrial group is optimistic for the full year 2013/2014. Order intake, sales and adjusted EBIT increased as expected in both the first 9 months and the 3rd quarter. In the first 9 months the Group achieved net income of EUR 243 million (prior year net loss of EUR 527 million), to which the Q3 contributed EUR 39 million (prior year EUR (395) million).
The main drivers of the good performance were as expected the efficiency gains, the profitable growth of the capital goods businesses, and the significant improvement at Steel Americas. On this basis the Executive Board has again raised its forecast slightly for the current fiscal year: Full year adjusted EBIT is now expected to double (prior year EUR 586 million). For the first time in three years ThyssenKrupp expects to achieve break even to slightly positive net income.
Adjusted EBIT from continuing operations increased to EUR 953 million in the first 9 months, up 120 percent from the prior year (prior year EUR 433 million). Adjusted EBIT in the Q3 came to EUR 398 million, almost three times higher than the corresponding prior year figure (prior year EUR 136 million). In the first 9 months, five of the six business areas improved their margins. In the Q3 all business areas including Steel Americas generated positive contributions.
Order intake from continuing operations came to EUR 31.1 billion in the first 9 months, up 5% YoY despite negative exchange rate effects (prior year EUR 29.6 billion). On a comparable basis, ie excluding currency and portfolio effects, order intake increased by 6%. 3rd quarter order intake was EUR 10.2 billion, up 8% YoY (up 5% on a comparable basis).
Sales from continuing operations at EUR 30.1 billion in the first 9 months (prior year EUR 28.6 billion) and EUR 10.7 billion in the 3rd quarter (prior year EUR 9.9 billion) were higher YoY in all business areas except Steel Europe, where sales fell due to disposals. On a comparable basis sales increased YoY by 6% in the first 9 months and 5% in the 3rd quarter.
The Group’s net financial debt decreased compared with September 30th 2013 from EUR 5.0 billion to EUR 4.1 billion in the first 9 months, equity increased from EUR 2.5 billion to EUR 3.2 billion and gearing therefore improved significantly by around 71 percentage points to 129.9%.
Dr Heinrich Hiesinger CEO of ThyssenKrupp AG said that “We are making good progress on our path to becoming a new, integrated and more performance-focused ThyssenKrupp. For seven quarters we have continuously increased our earnings through our own efforts. We are moving in the right direction, our strategy is working and our operating measures are clearly taking effect.”
Source – Strategic Research Institute