In the 1st quarter of fiscal 2022/2023 thyssenkrupp continued its transformation into a group of largely independent, high-performing technology companies and performed well overall in a continuing uncertain and challenging market environment. The year-on-year performance of the key financial indicators was impacted by two main effects. On the one hand the expected normalization of prices at Materials Services and on the other the portfolio changes at Multi Tracks. Both factors led to corresponding declines in order intake, sales, and adjusted EBIT.
Thanks to the positive performance of the other segments, sales at €9 billion were level with the prior year, while the Group's order intake was €9.2 billion lower than a year earlier (€10.4 billion). Adjusted EBIT was also lower year-on-year at €254 million (€378 million). As expected, this was largely due to the price trend with associated declining margins at Materials Services. thyssenkrupp confirmed its forecast for fiscal 2022/2023 based on the 1st quarter figures.
"The first quarter results are robust despite the continuing uncertain environment. Thanks to our measures to restructure and improve performance, our businesses are now significantly better able to deal with challenges and adapt to the many opportunities. At the same time, visibility on further economic developments remains limited. In this phase we are not letting up on performance and productivity and are continuing to press ahead with the transformation of thyssenkrupp into a group of largely independent, high-performance tech companies. And we are doing everything we can to achieve our cash flow target in the current fiscal year," says Klaus Keysberg, CFO of thyssenkrupp AG.
Individual segments Comparison
Materials Services recorded order intake of €3.3 billion in the 1st quarter of fiscal 2022/2023, down 10 percent from the prior-year period (€3.7 billion), with overall sales volumes increasing due to lower material prices. Sales were also down year-on-year at €3.2 billion (€3.3 billion). This was reflected in European stockholding materials trading and in the drop shipment business. Positive effects were recorded by the supply chain services business and North American stockholding materials trading. Adjusted EBIT came to €20 million, compared with €219 million a year earlier. This was mainly due to declining margins because of lower material prices.
Industrial Components increased its order intake by 30 percent year-on-year to €0.8 billion, with sales improving by 10 percent to €0.7 billion. Adjusted EBIT for the segment was €38 million (prior year: €56 million). Order intake and sales in the slewing bearings business profited in particular from increased demand for wind energy in Germany and Europe. Earnings were down due to a significant increase in starting material and energy costs and the competitive situation in the wind energy sector, particularly in China. Order intake and sales improved in the forging business due to higher factor costs being passed on to customers. Adjusted EBIT was down from the prior-year quarter due to earnings charges resulting from maintenance measures.
Automotive Technology improved its order intake by 27 percent to €1.4 billion. Sales also increased by 18 percent to €1.3 billion. Increased customer demand, particularly in the automotive volume business, made itself felt here, while electronic semiconductors continued to be in limited supply. Thanks to the improvement in operating earnings, the segment increased adjusted EBIT by 13 percent to €43 million.
High revenue level with Steel Europe
In the 1st quarter Steel Europe's business continued to profit from a high revenue level. Due to its longer-term contracts, the segment was only slightly impacted by declining spot market prices. Order intake increased by 22 percent to €3 billion and sales were up 10 percent to €2.9 billion despite declining shipments. Despite a sharp rise in raw material and energy costs, adjusted EBIT improved by 42 percent to €177 million, due in particular to the significant increase in average selling prices. Supporting effects from the ongoing restructuring measures and the ongoing performance measures in connection with the implementation of the "Steel Strategy 20-30" also contributed to the positive earnings performance.
Following extensive orders in the surface area in the comparative period, Marine Systems was unable to match its prior-year order intake of €133 million (€479 million). Sales increased by 35 percent to €508 million. The main factor here was the delivery of a frigate to a customer in the North African region. This and positive effects from the performance measures introduced are also reflected in adjusted EBIT, which at €20 million was significantly higher than a year earlier (€6 million).
Following the disposal of the stainless steel and mining businesses at the end of January and August 2022 respectively, order intake and sales in the Multi Tracks segment decreased by 64 and 49 percent to €0.9 billion and €0.8 billion respectively due to transactions. The majority of businesses still in operation reported higher or stable order intake. Both Plant Construction and thyssenkrupp nucera achieved a significant improvement in sales thanks to major projects. Automation Engineering also profited from growing new business from previous quarters. At Springs & Stabilizers sales were significantly higher year-on-year due to the passing-on of material price increases.
The segment's adjusted EBIT was €(17) million lower than a year earlier (€(1) million) due to the disposal of the stainless steel business. All businesses still being pursued showed earnings improvements. One exception was thyssenkrupp nucera, where earnings were positive but slightly lower due to higher development costs for growth. Adjusted EBIT at Corporate Headquarters was €(43) million (prior year: €(51) million).
Confirmation of forecast for fiscal 2022/2023
Subject to the fact that planning reliability remains limited due to the macroeconomic and geopolitical uncertainties, the company confirms its forecast for fiscal year 2022/2023.
For adjusted EBIT thyssenkrupp expects a decline to a mid to high three-digit million euro figure (prior year: €2.1 billion). With further payments for restructuring and higher capital expenditures than a year earlier, free cash flow before M&A is forecast to increase to at least break even (prior year: €(476) million). For net income thyssenkrupp expects at least break-even.
