Thyssenkrupp, the German conglomerate known for producing steel, submarines, and automotive parts, has revised its full-year outlook downward, citing persistently weak demand for its products. This announcement led to a decline in its shares during late trading in Frankfurt.
The company indicated that its efficiency program, APEX, launched last year, has helped to mitigate some adverse market developments, but it has not been sufficient to fully offset the negative impacts. Specific reasons for the lowered guidance were not disclosed, as the company awaits its full third-quarter results set for August 14.
As a result of this weak market environment, Thyssenkrupp now anticipates an adjusted operating profit (EBIT) exceeding 500 million euros ($543 million) for the fiscal year ending in September 2024, a reduction from previous expectations of a high triple-digit million euro figure. Additionally, the company projects a sales decline of 6-8%, estimating revenues between 34.5 and 35.3 billion euros, falling short of the 35.663 billion euros anticipated by analysts.
The firm’s free cash flow before mergers and acquisitions (M&A), a crucial indicator of operational performance, is now expected to be negative at 100 million euros, contrasting with earlier forecasts of positive cash flow in the low-triple digit million euro range.
Thyssenkrupp is also engaged in negotiations to sell a 20% stake in its struggling steel division to Czech billionaire Daniel Kretinsky and is in talks to divest its warship division to Carlyle and German state lender KfW. Preliminary third-quarter results revealed sales of 9 billion euros, below the 9.27 billion euros estimate, with adjusted EBIT around 150 million euros and free cash flow before M&A at a negative 250 million euros.