Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- thyssenkrupp AG (TKAMY, Financial) reported a record-breaking order backlog of over €16 billion, driven by new orders in the Marine Systems segment.
- The company successfully closed the TK Electrical Steel deal, realizing hidden values with a purchase price of approximately €440 million.
- thyssenkrupp AG (TKAMY) confirmed its EBIT adjusted guidance and increased its free cash flow guidance, marking the potential for a third consecutive year of positive free cash flows.
- The company is making significant strides in green transformation initiatives, including a memorandum of understanding with Volkswagen for CO2-reduced steel and CO2 separation technology for the Greek Titan Group.
- thyssenkrupp AG (TKAMY) is progressing with a minority spin-off of its Marine Systems business, aiming to finalize it within the calendar year 2025, allowing shareholders to benefit from its growth.
Negative Points
- The company lowered its sales guidance due to muted market conditions, particularly in the automotive sector, and geopolitical uncertainties.
- thyssenkrupp AG (TKAMY) faces challenges with tariffs, which could impact the automotive segment, although the overall group impact is expected to be limited.
- The automotive technology segment is under pressure with a 10% decline in top-line performance, driven by market headwinds and underutilization.
- The company is dealing with ongoing negotiations and restructuring in its Steel Europe segment, which includes potential impairments until a new business plan is finalized.
- There are uncertainties regarding the impact of future tariffs and geopolitical developments, which could affect the company's performance and sales outlook.
Q & A Highlights
Q: What is the current carrying value of the elevator investment?
A: The carrying value of the elevator investment is EUR 1 billion. (Answered by CFO Jens Schulte)
Q: Can you confirm the path forward for the Marine Systems business, and is government involvement required for the IPO?
A: We are proceeding with a minority spin-off of the Marine Systems business within this calendar year, and government involvement is not required for the IPO as it is a minority spin. (Answered by CEO Miguel Lopez)
Q: What are the key sticking points in the negotiations with the EP Group regarding the 30% stake in Steel Europe?
A: The key focus is on finalizing the restructuring plan. Once clarity on restructuring is achieved, we can proceed with the negotiations. Conversations with EP Group are progressing well. (Answered by CEO Miguel Lopez)
Q: How will potential tariffs impact your businesses in the US, particularly in automotive and steel?
A: We expect limited impact on the group overall. Automotive may see some effects depending on tariffs and customer contracts. Steel sales in the US, particularly high-quality tin plate, have historically been rolled over to customers. Materials services are structured locally, which may even benefit from tariffs. (Answered by CFO Jens Schulte)
Q: Are you still committed to the DRI hybrid furnace project in Steel Europe, and how does it relate to negotiations with EPCG?
A: We are committed to the project, starting with natural gas due to the current cost of green hydrogen. This project is part of the business plan negotiations with EPCG. (Answered by CEO Miguel Lopez)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
