Maritime facilities contribute positively to Thyssenkrupp's financial report.
Thyssenkrupp's marine division, Thyssenkrupp Marine Systems (TKMS), is undergoing a major overhaul. This segment, despite grappling with diminished demand and lower prices, has managed to thrive due to substantial orders, particularly in the submarine sector. The division's financial performance significantly improved, reporting an EBIT of 191 million euros in the first quarter, compared to 84 million euros the previous year.
The overall order intake for Thyssenkrupp rose by over 50% to 12.5 billion euros, with TKMS playing a pivotal role in this surge. Despite the negative free cash flow before M&A of 21 million euros, this was a significant improvement from the previous year's loss of 531 million euros. The recent figure was bolstered by advance payments for a major marine project. Thyssenkrupp is now anticipating a positive free cash flow before M&A of up to 300 million euros for the entire fiscal year.
TKMS employs about 8,000 people at shipyards in Kiel, Wismar, and Itajai, Brazil. The division's order backlog reached an all-time high of over 16 billion euros, with TKMS securing several billion-euro submarine contracts in recent months.
Previously, discussions regarding selling TKMS to US financial investor Carlyle collapsed last year. However, the high orders in the marine segment caused the entire group's order intake to surge by more than 50%. The group's revenue, however, witnessed a decline to 7.8 billion euros due to weak demand and falling prices.
Thyssenkrupp plans to break away from TKMS and set it on a path to independence by means of a spin-off. As only a minority stake will be initially spun off, the company will not require federal government approval, mentioned CFO Jens Schulte.
CEO Miguel Lopez indicated that decisions regarding the steel and marine segments will be made this year. Thyssenkrupp remains committed to its transformation process. Based on the proposed business plan, Steel Europe will be repositioned as an independent and robust steel company.
Lopez has been in talks with Czech billionaire Daniel Kretinsky about selling a further 30% stake after the sale of 20%. However, the steel board and employee representatives must first concur on a restructuring plan. Lopez intends to slash or outsource 11,000 of the 27,000 jobs in the steel segment. The IG Metall union stresses the importance of avoiding job cuts and plant closures.
The Thyssenkrupp group is considering spinning off its marine subsidiary, TKMS, to achieve independence. Despite previous discussions to sell TKMS to Carlyle collapsing, the subsidiary's performance in the marine segment significantly increased earnings, leading to a surge in the overall group's order intake. The revenue of MDax companies like Thyssenkrupp shrank due to weak demand and decreasing prices, but the marine division managed to maintain its financial stability, agreeing to major contracts worth billions.
