FY 2024 / 2025 forecast
2024 / 2025 forecast
Despite continuing macroeconomic uncertainties, the overriding focus remains on portfolio, performance and the green transformation (see also the “Strategy” subsection in “Fundamental information on the group”).
The forecast for 2024 / 2025 is based on the current composition of the group. It does not take account of the effects of potential portfolio measures, especially those in connection with possible stand-alone solutions for Steel Europe and Marine Systems. The expected economic conditions and the main assumptions on which our forecast is based can be found in the section headed “Macro and sector environment” in the “Report on the economic position.” For the corresponding opportunities and risks see the “Opportunity and risk report,” which follows this section.
We expect the market environment to remain challenging overall, for example due to uncertainties about future global economic growth. The development of our key performance indicators could therefore be exposed to corresponding fluctuations. In light of the expected economic conditions as of the date of this forecast and the underlying assumptions, we consider the following view on fiscal year 2024 / 2025 to be appropriate.
■ Sales are likely to increase by 0% to +3%. The main contributions are expected to come from the planned increase in sales at Automotive Technology, Materials Services and Steel Europe, resulting from factors including a planned stabilization in demand in the 2nd half of the fiscal year (for example in automotive and machinery production). Sales are forecast to decline at both Decarbon Technologies (declining order intake in the past fiscal year) and Marine Systems (shifts due to fluctuations in recognizing sales that is customary for the industry).
■ We anticipate adjusted EBIT of between €600 million and €1,000 million, based on the planned improvements in all businesses. The development of the individual businesses will be supported by ongoing measures within the context of the APEX performance program, which is aimed at countering the persistently challenging market environment and sustainably improving operational performance.
■ Capital spending is likely to be between €1,600 million and €1,800 million. The year-on-year increase will come mainly from the planned higher net payments in connection with the construction of the direct reduction plant at Steel Europe. In addition, investments for targeted growth initiatives in our other businesses are planned. Overall, investments will be approved on a restrictive basis, depending on the performance of the businesses and the group.
■ We expect free cash flow before M&A to be between €(400) million and €(200) million. This figure includes around €250 million in cash outflows for restructuring and the higher investments compared with the prior year. In addition, the payments profiles in the project businesses (especially prepayments at Marine Systems) have a major influence on the forecast development.
■ As a result of the developments described above, we expect net income of between €100 million and €500 million. In this connection, the tkVA is likely to be in the range of €(800) million to €(400) million and ROCE between 4% and 8%.
We will take into account the development of our key performance indicators – also keeping in mind economic justifiability – in preparing our dividend proposal to the Annual General Meeting.
Expectations for the segments and the Group
Fiscal year 2023 / 2024 | Forecast for fiscal year 2024 / 2025 | ||||
Automotive Technology | Sales | million € | 7,536 | +1% to +4% compared with the prior year | |
Adjusted EBIT | million € | 245 | Between €200 million and €300 million | ||
Decarbon Technologies | Sales | million € | 3,850 | (3) % to 0% compared with the prior year | |
Adjusted EBIT | million € | (54) | Between 0 and €100 million | ||
Materials Services | Sales | million € | 12,126 | +2% to +5% compared with the prior year | |
Adjusted EBIT | million € | 204 | Between €150 million and €250 million | ||
Steel Europe | Sales | million € | 10,736 | 0% to +3% compared with the prior year | |
Adjusted EBIT | million € | 261 | Between €250 million and €500 million | ||
Marine Systems | Sales | million € | 2,118 | (7) % to (4) % compared with the prior year | |
Adjusted EBIT | million € | 125 | Between €100 million and €150 million | ||
Group | Sales | million € | 35,041 | 0% to +3% compared with the prior year | |
Adjusted EBIT | million € | 567 | Between €600 million and €1,000 million | ||
Capital spending including IFRS 16 | million € | 1,323 | Between €1,600 million and €1,800 million | ||
Free cash flow before M&A | million € | 110 | Between €(400) million and €(200) million; incl. around €250 million in cash outflows for restructuring | ||
Net income | million € | (1,450) | Between €100 million and €500 million | ||
tkVA | million € | (2,476) | Between €(800) million and €(400) million | ||
ROCE | % | (8.0) % | Between 4% and 8% |
Source: thyssenkrupp annual report 2023 / 2024, page 131-133