Targets

Financial targets

Our aim is for all segments to improve their performance so they can make a sustained positive value and cash flow contribution to the group. To concretize our aspirations, at the Capital Market Day in December 2021, we announced medium-term financial targets; these still apply, despite the challenging market conditions.

In the medium term, the group’s adjusted EBIT margin should rise to between 4% and 6%. We aim to achieve a significantly positive free cash flow before M&A through further progress in performance. Another clearly defined target is restoring our ability to consistently pay a dividend so that our shareholders can participate in the company’s success again in the future. Our businesses should be able to efficiently exploit growth opportunities and increase their profitability so it is at least in line with the competition and above the cost of capital. The medium-term targets for our segments in their present structure are as follows:

• Materials Services – increase shipment volumes to over 6 million tons, adjusted EBIT margin of 2‑3%, a cash conversion rate of approximately 0.8 on a multi-year average and ROCE of over 9%.

• Industrial Components – annual sales growth of 3-5%, adjusted EBIT margin of at least EBIT margin of at least 10% and a cash conversion rate of 0.6 to 0.8

• Automotive Technology – sales of at least €5.5 billion a year, adjusted EBIT margin of 7-8% and a cash conversion rate of at least 0.5

• Steel Europe – increase shipment volumes to around 11 million tons, adjusted EBIT margin of 6‑7%, cash conversion rate of at least 0.4 and adjusted EBITDA per ton of around €100 over the steel cycle

• Marine Systems – annual sales growth of around 6%, adjusted EBIT margin of 6-7%, cash conversion rate of approximately 1.0

• Multi Tracks – scaling of the portfolio, structural improvements and ongoing development of the hydrogen business at thyssenkrupp nucera

• Corporate Headquarters – further reduction in administrative expenses

The management teams of the businesses bear full entrepreneurial responsibility for achieving these targets. Capital allocation within the group is based on expected value contribution and business-specific requirements. All targets have to be consistently backed up by concrete action plans.

^{Source: Annual Report 2021/2022, p. 32-33}