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ThyssenKrupp, the German steel and capital goods producer, beat full-year forecasts thanks to a recovery in material services and earnings growth in its components and elevator technology units.
The group said adjusted earnings before interest and taxes (Ebit) rose 30 per cent to €1.91bn in the year, easily outpacing forecasts of €1.73bn, according to a Reuters poll. Looking only at continuing operations, adjusted Ebit rose 15 per cent to €1.72bn.
Order intake grew 18 per cent to €44.3bn, its best performance since at least 2011.
The group’s materials services unit more than doubled earnings to €312m, thanks to a recovery in material prices. Its components technology unit saw earnings rise 12 per cent to €377m, while earnings at its elevator technology division grew 7 per cent to €922m. By contrast, its industrial solutions unit reported a 69 per cent drop in earnings to €111m.
On a net basis, the group still posted a loss of €591m, reflecting losses from the sale of its Brazilian steel mill CSA in the second quarter.
Chief executive Heinrich Hiesinger said the group had achieved “important milestones” for the restructuring strategy he set out in 2011 upon taking control of the group.
ThyssenKrupp is undertaking a multiyear transition from making steel to focusing on goods and services, including making elevators, submarines and car components. The sale of CSA marked its exit from the Steel Americas business and it is now in the early stages of spinning off its European steel unit by merging it with the European operations of India’s Tata Steel.
“The past fiscal year was a year of important decisions,” Mr Hiesinger said, mentioning the group’s sale of its Brazilian steel mill – which resulted in a €900m writedown – plus the September memorandum with Tata and an autumn decision to increase its capital stock by 10 per cent. “The capital increase widened our financial leeway,” he said.
ThyssenKrupp said it continues to save costs through its efficiency programme. For the year, it achieved €930m in savings – “well above” the set target of €850m. Moreover, net debt fell from €3.5bn to €2bn, “mainly reflecting the cash inflows from the CSA transaction and from the capital increase in the fourth quarter.”
Hiesinger commented: “This is how we will generate more stable earnings in the future and continue to grow profitably.”
In the coming year ThyssenKrupp expects adjusted Ebit of continuing operations to see “significant increase” from €1.72bn to a range of €1.8bn to €2bn. The board also proposed a dividend of €0.15, unchanged from last year.