German steel company: Thyssenkrupp cuts 11,000 jobs

The downsizing at the steel company Thyssenkrupp will be much more extensive than previously known. The company – a driving force behind the industrial site for decades Germany – will cut 5000 more jobs in the next three years, in addition to the already known 6,000.

According to the company, redundancies for operational reasons are no longer excluded. In the past 2019/20 financial year (the cut-off date is September 30), the group slipped deep into the red.

The steel and supplier business in particular performed poorly after demand, particularly from the automotive industry, collapsed in connection with the corona pandemic. Without the elevator business, which has meanwhile been sold, the group had to accept an adjusted operating loss (EBIT) in continuing operations of 1.6 billion euros.

In the fourth quarter of the fiscal year, however, business stabilized, according to the group. In the previous year there was still a minus of 110 million euros. Thyssenkrupp had previously announced a deficit of 1.7 to 1.9 billion. With a loss of almost 1 billion euros, the steel business contributed most of the deficit.

Billions through the sale of the lucrative elevator business

To do this, the group had to write off a total of around three billion euros on the steel and automotive supply businesses by the end of the fiscal year – in continuing operations, the group posted a net loss of 5.5 billion euros, after a minus of almost 1.2 billion in the previous year. Thyssenkrupp was able to polish up the balance sheet with the sale of the elevator business, from which the company received 15 billion euros. This resulted in a net profit for the group of just under 9.6 billion euros. Thyssenkrupp does not want to pay a dividend in view of the high losses in continuing operations.

For the coming year Thyssenkrupp is aiming for a “significant improvement” in adjusted EBIT. Nevertheless, the group will continue to be in the red – management is assuming a loss in the mid three-digit million euro range. Thyssenkrupp expects further renovation costs, which should amount to a mid three-digit million euro amount, so that the bottom line should be a deficit of more than 1 billion euros.

In terms of sales, Thyssenkrupp is again assuming growth in the low to mid single-digit percentage range. However, this depends on the recovery of the automobile markets.

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