Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- thyssenkrupp AG (TKAMY, Financial) achieved its adjusted guidance on sales, EBIT, and free cash flow despite a challenging environment.
- The company reported positive free cash flow for the second consecutive year, amounting to EUR 110 million.
- thyssenkrupp AG (TKAMY) has a strong balance sheet with a net cash position of EUR 4.4 billion, slightly up from the previous year.
- A dividend payment of 15 cents per share has been proposed, maintaining dividend continuity.
- The company made significant progress in its decarbonization technologies segment, with a 12% growth in sales driven by a strong order book.
Negative Points
- The steel Europe segment faced significant challenges, with further impairments booked at a magnitude of EUR 800 million in Q4.
- Muted demand across industries, particularly in the automotive sector, which is the largest customer group, impacted performance.
- Cash flows within project and shipbuilding businesses remain volatile, making forecasting challenging.
- The company had to book one-time costs of EUR 80 million for past legacy projects in its cement plant engineering business.
- Free cash flow before M&A is projected to be negative in the range of EUR 100 to EUR 200 million due to significant restructuring activities.
Q & A Highlights
Q: Can you clarify how the Apex program has impacted your financials? It seems like the EBIT improvement from Apex is larger than the total EBIT for the year. Does this mean that without Apex, you would have been at a loss?
A: Yes, that's correct. The Apex program significantly contributed to our bottom line, and without it, we would have incurred a loss at the EBIT level. - Jan Schulte, CFO
Q: Regarding the marine systems disposal, there was an expectation for KFW to take a stake before the summer. Given the political changes in Germany, is this deal still feasible, or are you stuck with the current situation?
A: The German government's intention for industry consolidation remains, and they are still interested in taking a stake. However, the recent political developments may impact the timeline. We believe the strategic interest will persist. - Miguel Lopez, CEO
Q: On the steel business plan, when do you expect it to be finalized, and what are the main assumptions regarding capacities and funding requirements?
A: We expect the business plan to be ready in the coming months. The funding requirements will depend on the specifics of the plan, and we aim for a plan that requires limited funding. - Miguel Lopez, CEO
Q: For marine systems, is a strategic partnership still an option, and has KFW completed its due diligence? Does KFW need a parliamentary decision to take a stake?
A: We are focusing on a spinoff for marine systems. KFW's involvement is a government decision, and while due diligence is ongoing, the strategic interest remains. A parliamentary decision may be required for KFW's stake. - Miguel Lopez, CEO
Q: On the elevator stake, are you waiting for an IPO to monetize it, or are there other options?
A: We are in a waiting position as we don't need immediate funds and the business is performing well. We plan to align with the owners' exit strategy when they decide to proceed. - Jan Schulte, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
