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Weaker Global Economic Dynamic Weigh on ThyssenKrupp Earnings

Steel News - Published on Fri, 22 Nov 2019

Image Source: Reuters
In the past fiscal year thyssenkrupp achieved slight growth in a difficult economic environment. Order intake and sales both rose to EUR 42.0 billion, up 1 percent year-on-year. The capital goods businesses made a major contribution to this growth overall. In the materials businesses, on the other hand, growth was slowed by the increasingly weaker global economy, the substantial slowdown in the automotive sector and continued high import pressure on steel. This was accompanied by a massive rise in raw material prices. These factors also impacted operating earnings particularly in the auto components and materials businesses. The Group's adjusted EBIT of EUR 802 million as compared to previous year figure of EUR 1.4 billion. thyssenkrupp CEO Ms Martina Merz said "The performance of many of our businesses is not satisfying. This is also due to the fact that necessary structural improvements and restructuring measures were not implemented with the necessary consequence. We will now tackle this swiftly and systematically.”

Against this background, the newly formed Executive Board has set itself four clear priorities and is focusing on the performance topic, the Elevator transaction, the future viability of the steel business and the further development of the organization. The company's primary objective continues to be increasing the performance of its businesses. Numerous measures are already underway in all areas.

Steel Europe's business performance was influenced in particular at the beginning of the past fiscal year by special factors - especially the historic low tide of the Rhine and the new WLTP emissions test, which caused temporary production losses in the auto industry. As the year progressed, the business was also hit by the overall slowdown in market momentum, in particular due to a noticeable drop in demand from the automotive industry. Order intake and sales were down on the previous year. In addition to the significant decline in shipments, drastically higher raw material costs, especially for iron ore, and negative exchange rate effects also had an impact.



Strategic Research Institute, SteelGuru

Source :

Posted By : Ratan Singh on Fri, 22 Nov 2019
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