Sales to Russia and Ukraine account for less than one percent of total sales.
(Photo: imago/Rupert Oberhäuser)
eat Due to the economic consequences of the war in Ukraine, the Thyssen-Krupp group does not dare to forecast whether it can really implement a possible spin-off of the steel business. The Essen-based company is also suspending part of its annual goals.
“The economic consequences of the war in Ukraine for the business development of the group of companies also affect the possible independence of the steel business,” Thyssen-Krupp announced on Wednesday evening. Although the group remains convinced that setting up the division independently would open up “very good future prospects”, it is “currently not possible to make a statement on feasibility due to the current economic environment”.
Thyssen-Krupp recently stated that it did not want to rush a decision about the future of the division. “We also need quite a bit of clarity here as far as the framework conditions, funding programs, etc. are concerned,” CFO Klaus Keysberg said in February. “We take the time that is necessary for this.” However, a spin-off remains the preferred option.
For fiscal year 2021/22, Thyssen-Krupp still had adjusted operating earnings (EBIT) in a range of EUR 1.5 to 1.8 billion in February, net income of at least EUR 1 billion and free cash flow before M&A in the range of one balanced value announced.
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Even if sales with Russia and Ukraine accounted for less than one percent of total sales, “according to the Executive Board’s assessment, the far-reaching macroeconomic and geopolitical consequences of the war (…) will affect the business development of the group of companies,” Thyssen-Krupp now conceded.
The exact extent is not yet foreseeable. Against this background – and above all due to rising raw material prices – Thyssen-Krupp suspended its forecast for free cash flow before M&A for fiscal year 2021/2022.
It was said that the first problems in the steel and automotive supply business occurred in March. However, the Management Board continues to expect that the adjusted EBIT in the second quarter will be above the EUR 378 million in the first quarter. However, the free cash flow before M&A will be “burdened more than previously expected by negative price effects”.
More: This is how Thyssen-Krupp fights its way out of the crisis – the strengths and weaknesses in the balance sheet check