Nucera develops plants that produce green hydrogen.
(Photo: mauritius images / Timon Schneider / Alamy / Alamy Stock Photos)
Dusseldorf Thyssen-Krupp had postponed the partial IPO of its hydrogen subsidiary Nucera for a year, now the industrial group is getting serious. The company announced on Monday that the first shares should be placed before the summer break, provided the market environment plays along. According to the information, Thyssen-Krupp intends to hold a majority stake in its subsidiary in the long term. The Italian minority shareholder Industrie De Nora also wants to continue its long-standing partnership with the company.
For the partial IPO of the hydrogen subsidiary, Thyssen-Krupp primarily wants to offer newly issued common shares from a capital increase. From this, the group hopes to generate proceeds of 500 million to 600 million euros. The group intends to use the money to expand its alkaline water electrolysis business.
Thyssen-Krupp actually wanted to list the subsidiary last year. However, due to the volatile market conditions, the group initially refrained from these plans.
The hydrogen subsidiary develops technology for electrolysis plants to produce green hydrogen on an industrial scale.
Nucera’s business is currently focused on Europe and North America. There they want to set up and expand locations, explained Werner Ponikwar, CEO of the hydrogen subsidiary, in a conference call with journalists. “For market cultivation and processing of our orders, we are also represented with locations in Japan, China, Australia, Saudi Arabia and soon also in India.”
According to the CEO, North America in particular should become a core market for Thyssen-Krupp Nucera in the future. Due to the “massive support” in the wake of the Inflation Reduction Act (IRA), there are particularly good local growth opportunities.
Thyssen-Krupp cannot shoulder high investments alone
“We want to make Thyssen-Krupp Nucera even more visible as a global electrolysis technology leader for green hydrogen. At the same time, we want to play a key role in supporting the growth of a company that enables the green transformation,” said Miguel Ángel López Borrego, CEO of Thyssen-Krupp since June.
With the IPO, the financial leeway of the hydrogen subsidiary is growing. “The inflow of funds from the capital increase will benefit Thyssen-Krupp Nucera directly,” says López Borrego.
For Thyssen-Krupp, going public would be a success in difficult times. In the second quarter of the 2022/23 financial year, the group not only slipped deep into the red with a loss of 223 million euros. According to information from the Handelsblatt, the search for a partner for the steel division has also been difficult for years from business and financial circles.
In the current situation, the large investments that Nucera intends to make in the coming years could not be shouldered by the group alone. Because in order to assert itself internationally against competitors, Nucera has to expand: The hydrogen subsidiary expects high expenses for research and development. By 2026, between 150 and 250 million euros are to be invested in research and a similar amount in further investments – a total of around 500 million euros will be spent.
Nucera CEO Ponikwar: “We don’t have to hide from the market”
The partial IPO, with which the industrial group continues to hold a majority stake in the subsidiary, could prove profitable for Thyssen-Krupp. “Our order books are full and speak a clear language. We don’t have to hide from the market,” said Nucera boss Ponikwar. Insiders had estimated the value of the company at up to five billion euros in advance.
Thyssen-Krupp currently holds around 66 percent of the shares in Nucera, the Italian group De Nora 34 percent. The total number of shares to be offered in the IPO, as well as other relevant conditions, would be determined before the start of the IPO, the group said.
“With our technology for the production of green hydrogen, we want to help shape the new era of sustainable energy use,” explained Nucera boss Ponikwar. “Green hydrogen is a key factor for the decarbonization of industry and thus for achieving climate protection goals.”
The market currently offers great growth potential worldwide. “The volatility on the stock exchanges has decreased,” says Arno Pfannschmidt, CFO of Thyssen-Krupp. In terms of time, however, the hydrogen subsidiary is not under pressure. Thanks to its recurring revenues and high profitability, planning security in the company is currently high, emphasized Nucera boss Ponikwar.
The investments are intended to make production more automated and digital. “On the one hand, it’s about improving our electrolysis modules and their automated and serial production,” says Ponikwar. On the other hand, they also want to make themselves less dependent on precious metals such as iridium, which is required for the electrolysers but is currently difficult to obtain.
In view of the tense global situation, the group must also make its supply chains more secure. “In the long term, we must have the supply chains in the regions in which we want to be fully available.” This is primarily the case in North America and Europe, but also in other targeted regions.
“The IPO is an excellent step in order to achieve the financial scope for these development steps – and will sharpen Nucera’s own profile in the market,” said Ponikwar.
In the hydrogen business, Nucera expects sales of 600 to 700 million euros in the 2023/24 financial year, and this should increase to 850 to 950 million euros in the following financial year. According to the CEO, a high single-digit margin is still being sought.
After the planned IPO of the hydrogen subsidiary was announced, Thyssen-Krupp shares rose by almost two percent.
More: Funding chaos at Thyssen-Krupp – Green transformation hangs in the balance