ThyssenKrupp achieved its operating targets in the first quarter of the 2014 – 2015 fiscal year and confirmed its forecast for the full year. Sales, adjusted EBIT and net income increased, in part, significantly. "We are on course. Our earnings performance in the quarter shows that we are on the right track with the transformation of the Group. The economic environment remains uncertain and the geopolitical risks high. That is why we are continuing to concentrate on the things that we can influence ourselves and working hard to improve our efficiency," says ThyssenKrupp CEO Dr Heinrich Hiesinger.
In a continuing challenging economic climate, order intake came to €10.1 billion, down 5% from the prior year. This decrease was mainly due to a major contract at Marine Systems in the prior-year quarter. All other capital goods businesses recorded stable to significantly higher order intake year-on-year. The Elevator Technology division once again achieved record orders.
Sales rose by 11% y/y to €10 billion. On a comparable basis (excluding portfolio and exchange rate effects) sales were up 5% from the prior year. The main reason for this was strong organic growth in the capital goods businesses.
Adjusted EBIT from continuing operations in the first quarter climbed by 29% to €317 million (prior year €245 million). The main driver behind this improvement was the successful implementation of efficiency measures. The ThyssenKrupp Group generated net income of €43 million in the first quarter (prior year €(70) million); after deduction of minority interest, net income was €50 million (prior year €(65) million); earnings per share came to €0.09 (prior year €(0.12)).
Free cash flow before divestments in the first quarter was, as expected, lower than a year earlier at €(651) million but fully within the forecast corridor. Among other things, the normalisation of inventories after the relining of a blast furnace at Steel Europe, the strike at AST in Italy and major contracts at Materials Services led to a temporary increase in net working capital. The Group's net financial debt therefore increased by €535 million to €4.2 billion in the reporting quarter, but was around €390 million lower than a year earlier.
The full-year outlook for 2014 – 2015 remains unchanged. On a comparable basis, the Group's sales are expected to grow by a single-digit percentage rate. Adjusted EBIT will improve to at least €1.5 billion. With the exception of Steel Americas, all business areas will generate clearly positive contributions. Based on operating progress, ThyssenKrupp expects at least a clear improvement towards break-even EBIT at Steel Americas. The Executive Board also expects a substantial improvement in net income (prior year €195 million). There will also be significant progress in cash generation from operating activities: free cash flow before divestments should at least break-even.
All business areas achieved year-on-year improvements in first quarter adjusted EBIT; the only exception was Materials Services, which was impacted by the strike at AST in Italy. All business areas with the exception of Steel Americas made a positive contribution to earnings; Steel Americas generated break-even earnings. The adjusted EBIT of the capital goods businesses came to €337 million in the first three months. Including Steel Americas and despite the strike in Italy, the materials businesses generated a clear positive contribution of €81 million.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.worldcement.com/europe-cis/13022015/thyssenkrupp-reports-good-start-to-the-fiscal-year-332/