Capital market-relevant press releases, 2014-02-14, 07:01 AM
ThyssenKrupp makes good operating start to 2013/2014 fiscal year
- 6 percent growth in order intake from continuing operations
- Adjusted EBIT from continuing operations more than doubled to €247 million
- Significant improvement in free cash flow before divestments / further reduction in net financial debt
- Clear operating improvement at Steel Americas
- Special items lead to net loss of €69 million for full Group
The industrial group ThyssenKrupp made a good operating start to the 2013/2014 fiscal year. All operating targets for the 1st quarter were met or exceeded. At €10.7 billion, order intake from continuing operations was significantly higher than in the prior-year period (+6 percent, €10.1 billion). On a comparable basis, i.e. excluding currency and portfolio effects, order intake gained 10 percent year-on-year. "We started the new fiscal year with a good 1st quarter without help from the economy. As expected, the main drivers of our growth were the capital goods businesses," says ThyssenKrupp CEO Dr. Heinrich Hiesinger.
Elevator Technology for example achieved a new record level of order intake thanks in particular to strong growth in the Asia/Pacific region. 1st quarter order intake at Industrial Solutions showed a further double-digit improvement on the high prior-year level, thanks in part to a major order from Asia. Components Technology also reported a significant year-on-year increase in order intake. At €9.1 billion, sales from continuing operations in the 1st quarter were almost level with the prior year, but on a comparable basis increased by
Adjusted EBIT from continuing operations more than doubled year-on-year to €247 million (+131 percent). "We have further improved our operating performance and efficiency and are on track to achieve our savings target of €850 million this fiscal year," says Hiesinger. Apart from Steel Americas all business areas delivered strong positive contributions to earnings in the 1st quarter. The capital goods businesses increased their operating income and adjusted EBIT margins year-on-year. The losses at Steel Americas were significantly reduced, with adjusted EBIT now showing only a small loss of €17 million.
Free cash flow from continuing operations before divestments improved year-on-year by €195 million to €(85) million, significantly exceeding the target for the 1st quarter. This growth was due to customer advances, mostly at Industrial Solutions.
The net financial debt of the full Group was reduced from €5.0 billion at the end of fiscal year 2012/2013 to €4.5 billion as a result of the capital increase at the beginning of December 2013. Equity strengthened from €2.5 billion to €3.3 billion and gearing improved significantly by around 64 percentage points to 136.2 percent.
As previously announced, the Group's net income in the 1st quarter was impacted by special items. The main reasons were charges to financial income in the amount of €276 million and further special items totaling €36 million. The charges were mainly in connection with the sale of the Outokumpu shares agreed as part of the transaction to end the links between ThyssenKrupp and Outokumpu. This was partly offset by income of €187 million due to the absence of previously recognized risks. As a result a net loss of €69 million is reported for the full Group (net loss 1st quarter 2012/2013 €16 million).
Following the good operating start to the fiscal year, ThyssenKrupp reaffirms its outlook for the full year. In fiscal 2013/2014 the Executive Board expects sales before portfolio adjustments to grow year-on-year by a mid single-digit percentage rate. Adjusted EBIT for the Group before portfolio adjustments is expected to improve significantly year-on-year from €599 million to around €1 billion. Apart from Steel Americas all business areas will make positive contributions. As a result of operating progress, Steel Americas' loss will decline further.
Performance of the business areas in the 1st quarter 2013/2014
The capital goods businesses' adjusted EBIT at €412 million (prior year €351 million) was significantly higher than the contribution of the materials businesses, which however was positive overall at €36 million even including Steel Americas (prior year €(52) million).
Components Technology made a good start to the new fiscal year. Order intake and sales each climbed to €1.4 billion, representing year-on-year increases of 9 percent and 6 percent respectively (prior year €1.3 billion). On a comparable basis order intake was up by 12 percent and sales by 9 percent. Adjusted EBIT came to €64 million, €22 million higher year-on-year (prior year €42 million).
Elevator Technology continued its record-breaking run. 1st quarter order intake increased year-on-year by 11 percent to €1.8 billion, aided among other things by pleasing growth in demand for new installations in China (prior year €1.6 billion). On a comparable basis order intake gained 16 percent. Sales at €1.5 billion were up by 1 percent (prior year €1.5 billion), and on a comparable basis by 5 percent. The positive performance was reflected in an improvement in adjusted EBIT, which gained 4 percent to €175 million (prior year €169 million).
At Industrial Solutions order intake in the 1st quarter 2013/2014 came to €2.3 billion, up by a further 15 percent – and on a comparable basis 18 percent – from the already high level of the 1st quarter of the prior year (€2.0 billion). This was due in part to a major order at Marine Systems for the supply of two submarines to Singapore. The high order backlog of €15.5 billion at December 31, 2013 continues to secure a good workload, provides planning certainty and contributes to the growth prospects. At €1.3 billion, sales at Industrial Solutions were down slightly year-on-year (prior year €1.3 billion), but on a comparable basis gained 2 percent. Adjusted EBIT climbed 24 percent from €140 million to €173 million.
With prices generally unsatisfactory, Materials Services held up well in the reporting quarter thanks to higher volumes. At €2.8 billion (prior year €2.8 billion) order intake was up by 3 percent, and on a comparable basis by 6 percent. Sales slipped 3 percent year-on-year to €2.7 billion on account of lower selling prices (prior year €2.8 billion); on a comparable basis sales held steady. Adjusted EBIT was 15 percent lower year-on-year at €34 million (prior year €40 million).
Steel Europe reported a decline in business in the 1st quarter 2013/2014 due to disposals and lower selling prices. Persistent price pressure and fierce competition on the European market continued to impact performance, while volumes were more robust. At €2.3 billion order intake was around 5 percent lower year-on-year (prior year €2.4 billion); on a comparable basis orders were up by 1 percent. Sales were 8 percent lower year-on-year at €2.1 billion (prior year €2.3 billion). On a comparable basis the decline was 1 percent. The cyclical weakness also impacted adjusted EBIT, which fell from €30 million a year earlier to €19 million.
At Steel Americas 1st quarter order intake increased by 9 percent to €609 million (prior year €560 million) and sales were up by 10 percent at €538 million (prior year €488 million). On a comparable basis order intake increased by 13 percent and sales by 15 percent. This was due to higher shipments and selling prices. Adjusted EBIT improved from €(122) million in the prior-year quarter to €(17) million. This significant improvement was mainly the result of higher capacity utilization, cost reductions, and positive currency and market price effects in the USA.