Management of the Group

Adjusted EBIT

EBIT provides information on the profitability of a unit. It contains all elements of the income statement relating to operating performance. These include items of financial income/expense that can be characterized as operational, including income and expense from investments where there is a long-term intention to hold the assets. The thyssenkrupp group has an investment in the former Elevator Technology segment. This investment has no strategic or operational connection to the group’s continuing operations. The corresponding expenses and income are not included in financial income/expense from operations and therefore also not in EBIT. Adjusted EBIT is EBIT adjusted for special items such as measures in connection with restructuring, impairment losses/impairment reversals on non-current and current assets, disposal gains or losses and income and expenses in connection with the CO₂ forward contracts of the Steel Europe segment. It is more suitable than EBIT for comparing operating performance over several periods.

The adjusted EBIT of the group and the segments and the special items are described in the “Analysis of the results of operations of the group” and “Segment review” subsections in the “Report on the economic position.” Please also refer to the reconciliation in the segment reporting (Note 24).

FCF before M&A

FCF before M&A permits a liquidity-based assessment of performance in a period by measuring cash flows from operating activities excluding income and expenditures from material portfolio measures. It is measured as operating cash flow less cash flows from investing activities excluding cash inflows or outflows from material M&A transactions. This too links more directly to operating activities and facilitates comparability in multi-period analyses.

From fiscal year 2025 / 2026, the addition of right-of-use assets under leases (in accordance with IFRS 16) will no longer be recognized as an investment in the FCF before M&A performance indicator. In the future, the actual lease payments – comprising the repayment and interest components – will be included in the calculation of cash flows.

A reconciliation and details on the development of FCF before M&A are provided in the analysis of the cash flows in the subsection headed “Analysis of the financial position of the group” in the “Report on the economic position.”

Net income/(loss)

Net income is the profit generated by the group in the fiscal year. It is calculated as a positive balance of all income and expenses. Unlike EBIT, the calculation includes non-operating items, for example, interest and taxes. Net income therefore provides information on the group’s earning power. Negative net income is referred to as a net loss.

The net income/(loss) of the thyssenkrupp group is explained in detail in the subsection headed “Analysis of the results of operations of the group” in the “Report on the economic position.”

tkVA / ROCE

tkVA is the value created in a reporting year. This indicator enables us to compare the financial performance of businesses with differing capital intensity. tkVA is calculated from the EBIT less the cost of capital employed in the operating business. Capital employed mainly comprises fixed assets, inventories and receivables. Deducted from this are certain non-interest-bearing liability items such as trade accounts payable. To obtain the cost of capital, capital employed is multiplied by the weighted average cost of capital (WACC), which includes weighted equity and debt. We use the return on capital employed (ROCE) to determine the relative return generated. ROCE is the ratio of EBIT to capital employed. If ROCE exceeds WACC, i.e., the returns due to shareholders and lenders, we have created value.

Information on the development of tkVA / ROCE in the reporting year can also be found in the subsection headed “thyssenkrupp Value Added (tkVA)” in the “Report on the economic position.”

^{Source: Annual Report 2023/2024, p. 29-30}