Thyssenkrupp, the German industrial company, recently released its third-fiscal quarter results. Let’s take a closer look at the key highlights:
Sales
In terms of sales, Thyssenkrupp reported a total of 9.6 billion euros ($10.53 billion). However, this reflects a significant decrease of 12% compared to the previous year. Unfortunately, the sales figure failed to meet the analysts’ expectations of EUR9.78 billion.
Adjusted EBIT
Thyssenkrupp’s adjusted earnings before interest and taxes (EBIT) for the quarter stood at EUR243 million. This marks a substantial 66% decline compared to the same period last year. Additionally, it fell short of the analysts’ projected figures of EUR248 million. On a positive note, when compared to the second-fiscal quarter, Thyssenkrupp experienced a 19% increase in adjusted EBIT.
Free Cash Flow Pre-M&A
Thyssenkrupp witnessed a dramatic shift in its sequential cash flow during the three months ending in June. The company’s free cash flow (FCF) rose by over EUR500 million, reaching EUR347 million in the third quarter. This comes as a stark contrast to the EUR216 million outflow reported in the previous quarter. It’s worth noting that in the third quarter of last year, Thyssenkrupp recorded a significant cash outflow amounting to EUR412 million.
These results provide valuable insights into Thyssenkrupp’s performance during the third-fiscal quarter. Stay tuned for more updates on this industrial giant.
Steady Steel Performance
The steel business in Europe has been a standout performer for the company, according to Citi analysts. In their research note, they highlighted a sequential improvement in adjusted earnings for this business during the quarter, especially when compared to the second quarter of the year.
Although the year-on-year adjusted EBIT for the steel business dipped by 49% in the quarter, amounting to EUR190 million, it still managed to swing to a profit. This turnaround is significant as the steel business had reported a loss of EUR14 million back in May.
Citi attributes this positive shift to a slight increase in average steel selling prices in comparison to the second quarter. Additionally, the combination of lower raw material costs also contributed to the boost in earnings for the steel segment.
Despite a challenging market environment, the steel industry in Europe has shown resilience and profitability. The company can credit its success in this sector to strategic price adjustments and cost management, ultimately driving improved financial results.
Thyssenkrupp Plans Restructuring and Enhancement
Thyssenkrupp has made it clear that it remains committed to its strategic goal of spinning off its Marine Systems unit and finding a “spin-off solution” for its steel business. Additionally, the company is actively working on a new program aimed at boosting overall performance. Chief Executive, Miguel Lopez, stated during a recent post-earnings call that more information regarding the performance program will be shared in the coming months and is expected to be fully communicated within the year. While Lopez did not provide specific details on where improvements would be made, the management did mention their intention to decrease personnel numbers in countries with high operational costs.