Capital market-relevant press releases, 2014-08-14, 07:06 AM
ThyssenKrupp on track: 3rd quarter operating targets achieved or slightly exceeded Full-year forecast 2013/2014: Net income now expected at break-even to slightly positive
The transformation at ThyssenKrupp is bearing fruit. After a strong 3rd quarter, the Executive Board of the Essen-based industrial group is optimistic for the full year 2013/2014. Order intake, sales and adjusted EBIT increased as expected in both the first 9 months and the 3rd quarter. In the first 9 months the Group achieved net income of €243 million (prior year net loss of €527 million), to which the 3rd quarter contributed €39 million (prior year €(395) million). The main drivers of the good performance were as expected the efficiency gains, the profitable growth of the capital goods businesses, and the significant improvement at Steel Americas. On this basis the Executive Board has again raised its forecast slightly for the current fiscal year: Full-year adjusted EBIT is now expected to double (prior year €586 million). For the first time in three years ThyssenKrupp expects to achieve break-even to slightly positive net income.
"We are making good progress on our path to becoming a new, integrated and more performance-focused ThyssenKrupp. For seven quarters we have continuously increased our earnings through our own efforts," says Dr. Heinrich Hiesinger, CEO of ThyssenKrupp AG. "We are moving in the right direction, our strategy is working, and our operating measures are clearly taking effect." Adjusted EBIT from continuing operations increased to €953 million in the first 9 months, up 120 percent from the prior year (prior year €433 million). Adjusted EBIT in the 3rd quarter came to €398 million, almost three times higher than the corresponding prior-year figure (prior year €136 million). In the first 9 months, five of the six business areas improved their margins. In the 3rd quarter all business areas including Steel Americas generated positive contributions.
Order intake from continuing operations came to €31.1 billion in the first 9 months, up 5 percent year-on-year despite negative exchange rate effects (prior year €29.6 billion). On a comparable basis, i. e. excluding currency and portfolio effects, order intake increased by 6 percent. 3rd quarter order intake was €10.2 billion, up 8 percent year-on-year (up 5 percent on a comparable basis).
Sales from continuing operations at €30.1 billion in the first 9 months (prior year €28.6 billion) and €10.7 billion in the 3rd quarter (prior year €9.9 billion) were higher year-on-year in all business areas except Steel Europe, where sales fell due to disposals. On a comparable basis sales increased year-on-year by 6 percent in the first 9 months and 5 percent in the 3rd quarter.
The Group's net financial debt decreased compared with September 30, 2013 from €5.0 billion to €4.1 billion in the first 9 months, equity increased from €2.5 billion to €3.2 billion, and gearing therefore improved significantly by around 71 percentage points to 129.9 percent.
Performance of the business areas in the first 9 months 2013/2014
Components Technology continued its good performance in the 3rd quarter, profiting from sustained strong demand on the car markets (above all in China and the NAFTA region) and increasing demand for wind turbine components in China. In the first 9 months order intake and sales both increased year-on-year by 9 percent to €4.6 billion (prior year both €4.2 billion). On a comparable basis the increases were 13 and 12 percent respectively. Adjusted EBIT in the first 9 months came to €208 million, up €25 million from the comparable prior-year period (prior year €183 million). The strong performance was mainly due to higher sales and efficiency gains under performance programs initiated in the prior year.
Elevator Technology continued to perform positively and increased its order intake in the first 9 months by 3 percent to €5.1 billion (prior year €4.9 billion), mainly thanks to pleasing new installations business in China, the USA and South Korea. On a comparable basis the increase was 7 percent. Sales at €4.6 billion were also 3 percent higher year-on-year (prior year €4.5 billion); on a comparable basis the gain was 8 percent. The positive performance was also reflected in improved adjusted EBIT, which in the first 9 months rose by 9 percent to €531 million (prior year €487 million) despite negative exchange rate effects. With adjusted EBIT of €193 million in the 3rd quarter, Elevator Technology not only achieved new record earnings but also increased its margin year-on-year for the third quarter in succession to now 12 percent.
At Industrial Solutions, order intake in the first 9 months was up by a further 3 percent year-on-year at €4.5 billion; on a comparable basis the increase was 7 percent (prior year €4.4 billion). The high order backlog of €14.6 billion at June 30, 2014 provides long-term planning certainty and capacity utilization for the next two to three years. Sales in the first 9 months rose 11 percent to €4.5 billion (prior year €4.0 billion); on a comparable basis sales were 15 percent higher. They benefited from the recognition of revenues from a number of major contracts, particularly at Process Technologies. Adjusted EBIT in the first 9 months increased by €86 million, or 18 percent, to €562 million (prior year €476 million) as a result of the order billings at Process Technologies and efficiency gains in all business units.
In a difficult price and competitive environment, Materials Services performed well in the reporting period thanks to higher volumes. The inclusion of VDM and AST as of March 1, 2014 affected sales and order intake to the tune of €1 billion each and adjusted earnings in the amount of €(5) million. Order intake in the first 9 months was 13 percent higher at almost €10 billion (prior year €8.8 billion), on a comparable basis the increase was 4 percent. Sales rose by 12 percent to €9.8 billion (prior year €8.8 billion); on a comparable basis – particularly excluding VDM and AST – sales were level with the prior year. As a result of intensive sales initiatives and performance programs, adjusted EBIT in the first 9 months was flat at €148 million (prior year €160 million).
Steel Europe reported a decrease in business volume in the first 9 months due to disposals and prices. Shipments decreased in total by 2 percent, but on a comparable basis increased by 1 percent. In the 3rd quarter shipments were 8 percent down from the prior quarter mainly because of a drop in production due to operational issues and disruptions to production and shipping logistics due to storm Ela. In the first 9 months order intake was 6 percent lower at €6.9 billion and sales were 9 percent lower at €6.7 billion (prior year order intake and sales both €7.3 billion); on a comparable basis order intake was largely stable, sales decreased by 2 percent. The measures implemented under the "Best-in-Class Reloaded" program already had a significant positive impact on earnings. Adjusted EBIT in the first 9 months came to €184 million, an improvement of €83 million on the prior-year period (prior year €101 million).
At Steel Americas, order intake at €1.6 billion (prior year €1.6 billion) and sales at €1.5 billion (prior year €1.5 billion) in the first 9 months increased by 2 percent and 4 percent respectively year-on-year. On a comparable basis, orders were up by 15 percent and sales by 14 percent. This was due to higher volumes and prices. Adjusted EBIT in the first 9 months improved by more than €300 million to €(27) million. Key reasons for this significant improvement included higher and more efficient capacity utilization, lower costs, and the positive impact of market prices in the USA. In the 3rd quarter adjusted EBIT came to €16 million.