Thyssenkrupp cuts investment plans for the 2024/2025 financial year

The industrial group has lowered its annual profit and revenue forecast.

The German industrial giant Thyssenkrupp AG has revised its investment plans and lowered its profit and revenue forecast for the 2024/2025 financial year (ending September 30) following the publication of results for the third quarter (April–June).

As stated, in response to a challenging situation the conglomerate is adopting a more restrictive approach to investment planning. It is expected that total investments for the financial year will amount to €1.4–1.6 billion (previously €1.6–1.8 billion).

Thyssenkrupp now expects adjusted earnings before interest and taxes (EBIT) at the lower end of the previous forecast – between €600 million and €1 billion. Sales for the current financial year is projected to decline by 5–7%, compared to the previous forecast of a 0–3% decrease.

As noted by Miguel Lopez, CEO of Thyssenkrupp AG, the third quarter of the 2024/2025 financial year was characterized by high macroeconomic uncertainty.

“We are acutely feeling the weak market environment in key sectors such as the automotive, mechanical engineering, and construction industries. Nevertheless, we have managed to counter these effects through APEX and other stringent cost-cutting measures, thus maintaining earnings stability,” he particularly stated.

Thyssenkrupp’s order volume for April–June increased to €10.1 billion (+21% year-on-year), mainly due to Marine Systems. Sales totaled €8.2 billion (previous financial year – €9 billion). Despite the decline in sales, EBIT for the period reached €155 million (€149 million in the same period last year). Steel Europe and Materials Services, like other divisions, were affected by further decreases in demand and prices.

It is noted that Steel Europe is systematically pursuing a strategic reorientation based on the industrial concept for the future. The company recalled that in July a consensus was reached with the IG Metall union regarding a restructuring collective agreement.

At the beginning of July, a new continuous casting machine (CCM) No. 4 was commissioned at the Duisburg plant, together with the deeply modernized hot rolling mill No. 4, integrated with a fully automated slab logistics system. This marked the completion of key investments totaling around €800 million to optimize the production network at this site.

In addition, site preparation was completed as part of the project to build a direct reduction plant in Duisburg. Alongside the completed construction of three substations, work on the erection of steel frameworks and engineering structures for the facility will begin in October.

It should be recalled that in June Thyssenkrupp confirmed that it remains committed to plans to build a “green” steel production plant in Duisburg, with an investment of €3.5 billion. However, for the transformation to be successful under economically viable conditions, it is necessary to adjust regulatory frameworks and accelerate the expansion of the related infrastructure, especially concerning the hydrogen network and ensuring competitive energy prices.