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Good start to fiscal year for thyssenkrupp

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World Cement,


thyssenkrupp has had a good start to the new fiscal year, with order intake, sales and earnings in 1Q17 higher year-on-year.

According to thyssenkrupp CEO, Dr. Heinrich Hiesinger, “We achieved the best 1st quarter adjusted earnings since the start of our Strategic Way Forward.”

The Group’s adjusted EBIT increased by 40% to €329 million (prior year €234 million). Once again there were reliable improvements at Elevator Technology (up 6 percent to €215 million) and Components Technology (up 6 percent to €75 million).

“That shows our strategy is right. We’re increasing our share of capital goods and services businesses. That will enable us to generate more stable earnings and achieve profitable growth in the future,” says Hiesinger.

Additionally, there were first positive earnings effects from the recovery on the materials markets at Materials Services (up €48 million to €51 million) and Steel Americas (up €111 million to €37 million).

In 1Q17 the Group’s order intake and sales were higher year-on-year. In the capital goods businesses sales at Elevator Technology profited from new installations business in the USA and service business growth. Components Technology reported a positive trend among other things for car components and heavy truck components in Western Europe and China. While business at Industrial Solutions declined because of a record cement plant order in the prior-year period, the trend is nevertheless in the right direction: thanks to a full project pipeline, the business again grew significantly versus the three previous quarters.

The materials businesses profited from the recovery on the materials markets. However, due to the sharp rise in raw material costs combined with a high share of longer-term contract business, this positive trend will not impact earnings at Steel Europe until later in the year.

Overall, the thyssenkrupp Group made a net profit of €15 million in1Q17. After deduction of non-controlling interest, net income was €8 million; earnings per share came to €0.01. The Group’s pre-tax income of €124 million was impacted by disproportionately high tax expense in the reporting period.

Free cash flow before M&A was as expected temporarily clearly negative at €1.7 billion. This was due to a temporary increase in net working capital as a result mainly of increasing volumes and a sharp rise in material prices.

Accordingly the Group’s net financial debt increased against 30 September 2016 to €5.4 billion at 31 December 2016. Taking into account the Group’s available liquidity of €6.3 billion and balanced maturity structure, thyssenkrupp remains solidly financed.

Equity increased to €3.3 billion from €2.6 billion at 30 September 2016. The main reason for this was the higher interest rate, which led to a decrease in pension obligations with a corresponding positive effect on equity.

For the current fiscal year 2016/2017 thyssenkrupp confirms its forecast. Adjusted EBIT is expected to increase to around €1.7 billion. The company predicts a clear year-on-year improvement in net income. Slightly positive free cash flow before M&A is expected.

Read the article online at: https://www.worldcement.com/europe-cis/09022017/good-start-to-fiscal-year-for-thyssenkrupp/


 

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