ThyssenKrupp in the first half 2011/2012: Robust orders and sales
Order intake and sales robust at high level due to strong demand for capital goods / Group earnings impacted by difficult price situation in materials and startup losses at Steel Americas / All continuing operations except Steel Americas with positive earnings contributions / Quarter-on-quarter improvement in adjusted EBIT / Outlook: Moderate improvement in second half and for fiscal year as a whole adjusted EBIT in the mid three-digit million euro range
In
the first half 2011/2012 (October 1, 2011 - March 31, 2012) the ThyssenKrupp
Group's orders from continuing operations (without Inoxum) increased by 2
percent to €21.7 billion, while sales, down 1 percent to €20.5 billion, were
largely unchanged. Effects from the generally difficult market environment for
materials were offset by increased contributions from practically all capital
goods operations.
Adjusted EBIT decreased from €696 million in the
prior-year period to €217 million. This reduction in earnings was mainly due to
the generally weaker market environment and more intense competition in the
materials sector. As expected, earnings in the first half 2011/2012 continued to
be impacted by the startup losses at Steel Americas, though these were reduced
both year-on-year and quarter-on-quarter. All other continuing operations
delivered clearly positive earnings contributions. Overall, the ThyssenKrupp
Group expects a moderate improvement in the second half of the fiscal year and
adjusted EBIT for the full year in the mid three-digit million euro
range.
Dr. Heinrich Hiesinger, Executive Board Chairman of ThyssenKrupp
AG: "Demand in the capital goods segment is very pleasing. However, margins in
the materials business are being impacted by intense competition and
unsatisfactory prices. Overall we believe that we have passed the worst in terms
of earnings. We are therefore cautiously optimistic about the second
half."
Positive performance in second quarter
2011/2012
In the second quarter 2011/2012 order intake (€11.6
billion, up 15 percent) and sales (€10.6 billion, up 7 percent) from continuing
operations improved significantly quarter-on-quarter. Adjusted EBIT increased
against the prior quarter (€134 million, up 61 percent). The materials
businesses improved slightly overall in the second quarter. However, the typical
seasonal volume improvement against the first quarter was offset by increased
price and margin pressure particularly in the European steel business. The
losses at Steel Americas were lower but could not be offset by positive earnings
contributions from the Steel Europe and Materials Services business areas.
Demand in the capital goods segment was pleasing: Orders in all business areas
increased strongly quarter-on-quarter. Earnings too were up from the first
quarter 2011/2012 as a result of higher contributions from the components and
naval shipbuilding businesses.
The highlights for the continuing
operations in the first half of the current fiscal year versus the first half
2010/2011 and the second quarter versus the first quarter 2011/2012 are as
follows:
- First-half order intake was 2 percent higher year-on-year at €21.7 billion. New orders in the second quarter increased quarter-on-quarter by 15 percent to €11.6 billion.
- Sales decreased year-on-year by 1 percent to €20.5 billion in the first half 2011/2012. Sales in the second quarter were 7 percent higher than in the prior quarter at €10.6 billion.
- Adjusted EBIT in the first half 2011/2012 came to €217 million compared with €696 million a year earlier. Quarter-on-quarter there was a 61 percent improvement to €134 million. Adjusted EBIT margin declined from 3.4 percent in the first half 2010/2011 to 1.1 percent in the first half 2011/2012.
- EBIT in the first half 2011/2012 was €43 million, down from €696 million a year earlier. In the second quarter 2011/2012 EBIT increased to €76 million from €(33) million in the prior quarter.
- Earnings per share in the first half 2011/2012 decreased from €0.80 to €(0.89). Quarter-on-quarter earnings per share declined from €(0.30) to €(0.59).
- Net financial debt (including Inoxum) at March 31, 2012 came to €6,480 million, down slightly from the prior year (March 31, 2011: €6,492 million). Compared with December 31, 2011 (€5,937 million) net financial debt showed an increase, as in the previous year. Key factors were the ramp-up of the new carbon and stainless steel plants in Brazil and the USA and the dividend payment.
Implementation of strategic development program
proceeding to plan
ThyssenKrupp continued to drive forward the
strategic development and portfolio optimization in the 1st half 2011/2012. On
January 31, 2012 ThyssenKrupp and the Finnish stainless steel producer Outokumpu
agreed to combine Outokumpu and Inoxum, the stainless steel arm of ThyssenKrupp.
The transaction is subject to approval by the competent regulatory authorities.
It is still expected that the transaction will close by the end of 2012. In
addition further steps were successfully implemented in the reporting period
with the sale of the civil shipbuilding operations of ThyssenKrupp Marine
Systems and integration of the chassis operations of the Bilstein group and
Presta Steering into ThyssenKrupp Chassis. For the North American foundry
Waupaca, ThyssenKrupp signed a stock purchase agreement with KPS Capital
Partners of New York on May 14, 2012. The transaction is subject to approval by
the supervisory bodies. The disposal processes for the springs and stabilizers
business and ThyssenKrupp Tailored Blanks are being continued. ThyssenKrupp is
currently in talks with various potential buyers for each of the businesses.
The implementation of the strategic development program adopted in May
2011 is therefore proceeding fully according to plan. Contracts have been signed
or disposals completed for altogether around 90 percent of the sales volume to
be divested. The corporate program impact is also delivering results and based
on current planning will reduce costs Groupwide by around €300 million in the
current fiscal year.
In February 2012 ThyssenKrupp issued a €1.25 billion
bond with a maturity of five years. The issue made use of the favorable market
environment to further strengthen the company's solid
financing.
Outlook for fiscal 2011/2012: Adjusted EBIT in mid
three-digit million euro range expected
For fiscal year
2011/2012 ThyssenKrupp expects adjusted EBIT in the mid three-digit million euro
range, with adjusted EBIT showing a moderate increase in the second half of the
current fiscal year compared with the first half. In the materials operations,
Steel Europe's earnings are expected to come in at the level of the first half
with volumes and prices influenced by continuing intense competition, while
earnings at Materials Services should be better in the second half. At Steel
Americas, the increased stability of the operational ramp-up will bring
improvements; these will be set against continuing price pressure due to the
market entry. In the capital goods operations ThyssenKrupp expects earnings
contributions to improve at Plant Technology and hold steady at Elevator
Technology. In the more cyclical Components Technology business, the good
operating levels should continue into the second fiscal half. The earnings
contributions from Marine Systems will normalize.
At
ThyssenKrupp 170,000 employees in around 80 countries work with passion and
expertise to develop solutions for sustainable progress. Their skills and
commitment are the basis of our success. In fiscal year 2010/2011 ThyssenKrupp
generated sales of €49 billion.
For us, innovations and technical progress are key factors in managing global growth and using finite resources in a sustainable way. With our engineering expertise in the areas of "Material", "Mechanical" and "Plant", we enable our customers to gain an edge in the global market and manufacture innovative products in a cost- and resource-efficient way.
For us, innovations and technical progress are key factors in managing global growth and using finite resources in a sustainable way. With our engineering expertise in the areas of "Material", "Mechanical" and "Plant", we enable our customers to gain an edge in the global market and manufacture innovative products in a cost- and resource-efficient way.
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