thyssenkrupp details full year forecast
Published by Angharad Lock,
Digital Assistant Editor
For thyssenkrupp, the capital goods businesses and the efficiency programme “impact” continue to be the stabilising factors in the current fiscal year. Groupwide savings at more than €700 million were higher than planned. The first 9 months of the fiscal year were characterised by the very difficult conditions on the materials markets and continued high steel imports. In the 3rd quarter there were however clear signs of recovery. thyssenkrupp has reaffirmed its forecast for the full fiscal year.
“We are now seeing initial improvements in material prices. This will impact favourably on our future earnings,” said Dr. Heinrich Hiesinger. The CEO of thyssenkrupp sees the group on the right path: “Our Strategic Way Forward and systematic management of efficiency measures are stabilising us in a difficult materials environment. We are continuing to concentrate on the things we can influence ourselves. And that is paying off,” added Hiesinger.
The Group’s order intake and sales were lower year-on-year in the first 9 months. The declines were mainly due to the sharp drop in prices in the materials businesses extending well into the 2nd quarter.
In the capital goods businesses Components Technology profited among other things from growth in car components in Western Europe, the USA and China.
Adjusted EBIT increased significantly in the 3rd quarter to €441 million, but was weaker year-on-year due to the decline in the materials businesses. In the first 9 months adjusted EBIT was down by €259 million at €1001 million (prior year €1261 million) and in the 3rd quarter by €98 million at €441 million (prior year €539 million). Five out of six business areas achieved a significant quarter-on-quarter improvement in adjusted EBIT in the 3rd quarter. Steel Americas generated strong positive earnings at €39 million. Only Industrial Solutions reported a decline as expected against an exceptionally strong Q2.
Quarter-on-quarter the Group more than doubled its net income from €45 million to €124 million in the 3rd quarter. Overall in the first 9 months net income came to €115 million (prior year €279 million). After deduction of non-controlling interest, net income was €168 million (prior year €297 million). Earnings per share came to €0.30 (prior year €0.52).
Free cash flow before M&A was significantly better in the 3rd quarter €205 million than in the 2nd quarter (€(365) million). Over the first 9 months the figure was as expected clearly negative at €(1,007) million, mainly due to a normal seasonal increase in net working capital. Accordingly net financial debt increased to €4.8 billion in the first 9 months, but decreased slightly quarter-on-quarter.
As a consequence the Group’s gearing increased temporarily to around 175%. By the end of the fiscal year thyssenkrupp expects a significant improvement in gearing to below 150%.
For the full year the Executive Board continues to expect the Group to achieve adjusted EBIT of at least €1.4 billion and net income level with the prior year (prior year €268 million).
Edited from press release by Angharad Lock
Read the article online at: https://www.worldcement.com/europe-cis/11082016/thyssenkrupp-details-full-year-forecast-74/
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