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2016/2017 forecast

Overall assessment by the Executive Board

  • Overall good start to new fiscal year with rising orders, sales and earnings
  • On this basis full-year forecast confirmed

For key assumptions and expected economic conditions, see forecast section and “Macro and sector environment” in the report on the economic position in the 2015 / 2016 Annual Report and this interim report.

2016 / 2017 forecast

  • Group sales and sales of all capital goods businesses to grow on a comparable basis at a singledigit percentage rate
  • Adjusted EBIT of Group expected to be around €1.7 billion (prior year: €1,469 million), supported by €850 million planned EBIT effects under “impact”
  • Capital goods businesses
    – Components Technology: Improvement in adjusted EBIT (prior year: €335 million) from slight rise in sales and margin (prior year: 4.9 %)
    – Elevator Technology: Improvement in adjusted EBIT (prior year: €860 million) from slight sales growth and increase in adjusted EBIT margin by 0.5 to 0.7 percentage points (prior year: 11.5 %)
    – Industrial Solutions:
    – Short-term focus on reversing trend in orders and cash flow
    – Decline in adjusted EBIT (prior year: €355 million), slight decline in sales
    – In plant construction, defend bottom end of margin target range of 6 to 7 %
    – Marine Systems with temporary sharp decline in margin and earnings
    – Overall margin temporarily noticeably below target range
  • Materials businesses
    - Materials Services: Adjusted EBIT significantly higher year-on-year (prior year: €128 million)
    - Steel Europe: Adjusted EBIT significantly higher year-on-year (prior year: €315 million)
    - Steel Americas: Adjusted EBIT level with prior year (prior year: €(33) million)
  • Net income: Despite continued restructuring expense significant increase versus prior year (prior year: €261 million)
  • tkVA: Accordingly also with significant improvement (prior year: €(85) million)
  • Capital spending: Expected around €1.5 billion (prior year: €1,387 million)
  • FCF before M&A: With an increase in net working capital at our materials businesses due to higher volumes and prices, slightly positive FCF before M&A overall (prior year: €198 million).

Source: Interim Report 1st quarter 2016/2017, p. 17

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