Thyssenkrupp (TKA.DE) shares are trading up 10% today after the company reported slightly better-than-forecast financial results and surprised with a dividend. For next year, the major German steel and naval shipbuilder expects between €100 million and €500 million in net profit. The end of the fiscal year for the company turned out better than expected; the company reported 32% higher-than-consensus earnings before income taxes (EBIT).
Projections for 2025 turned out to be slightly below forecasts (especially on the side of free cash flow expectations), but the market took an interest in the company's shares, thanks indirectly to the strong growth of Rheinmetall, which had indicated as recently as the summer that it might seek to acquire Thyssenkrupp's naval segment. The company attributed the better results to strength in the marine and material services sectors, which offset the company's weak performance in Steel Europe.
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Open account Try demo Download mobile app Download mobile appThyssenkrupp expects sales growth of 0% to 3% in the 2024/2025 fiscal year. The company's outlook estimates an adjusted Ebit of €600 million to €1 billion, versus Bloomberg's €820 million forecast, and a net profit of €100 million to €500 million, versus 595.2 million expectations. Dividend per share is expected to be EUR 0.15 per share this year, EUR 0.12 expected; with a net loss of EUR 1.51 billion (EUR 347.5 million expected). As a result, the loss per share is EUR 3.3 against EUR 0.3 forecasts. Sales fell in the fiscal sundown to €35 billion; the estimate was €34.87 billion (down -6.6%).
- European Steel Unit revenues: EUR 10.74 billion, -13% y/y; estimates EUR 10.62 billion
- Material services sales: EUR 12.13 billion, -11% y/y, estimates EUR 12.36 billion
- Automotive technology sales: €7.54 billion, -4.7% y/y
- Marine systems sales: €2.12 billion, +16% y/y
- Sales of decarbonization technologies (chemicals): €3.85 billion
- Adjusted Ebit €567 million, -19% y/y, estimates EU525.5 million
- Adjusted EBIT European Steel Unit €261 million, -18% y/y
- Materials services adjusted Ebit EUR 204 million, +15% y/y
- Automotive technology adjusted Ebit €245 million, -7.9% y/y
- Marine systems adjusted Ebit 125 million, +71% y/y
- Decarbon Technologies adjusted loss Ebit €54 million
Despite Carlyle's withdrawal from the bidding process, Thyssenkrupp remains committed to finding a stand-alone solution for the Marine Systems sector (spin-offs, industrial partnerships). The company continues to negotiate with the
German government regarding a possible participation by the state. The sale process for Automation Engineering has been put on hold for the time being; instead, the company plans to phase out its drive train business in Bremen by 2026.
Thysenkrupp (TKA.DE) intereested D1
Thysenkrupp shares have already risen nearly 40% since the summer low, with the EMA200 average as the main resistance; its possible test would imply another 10% rise for the stock, which is gradually returning to the good graces of investors - but it remains to be seen for how long, and whether Thyssenkrupp will indeed prove to be an indirect beneficiary of Germany's broader defense and munitions production programs; certainly, these aspects may represent an under-discounted potential in the valuation, although even if they materialize - investors do not like the prolonged weakness in the group's 'commercial' business, which depends largely on the prosperity of the European economy.
Source: xStation5
Thyssenkrupp's valuation of 3.2 forward PE ratio is low and reflects some upside potential, in a scenario where the revival of Germany's re-industrialization materializes; support could come primarily from the defense industry and a potentially larger order book. Commercial steel business is weakening, with other business sectors barely 'offsetting' the company's weaker performance in this area. Marine Systems increased its order backlog thanks to the expansion of two existing orders in the submarine sector and higher interest in the marine electronics sector.
Source: XTB Research, Bloomberg Finance L.P_85dfb5e83e.png)
Source: XTB Research, Bloomberg Finance L.P
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