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German industrial conglomerate Thyssenkrupp has cut its full-year sales and profit guidance and written down the value of its steel business for the second time in three months amid weak demand from European carmakers.
Thyssenkrupp said on Wednesday that it expected sales of €37.5bn in 2024, roughly the same as last year. It had previously forecast a slight increase. It also cut its previous guidance of net income “in the low to mid three-digit million euro range”, saying it now expects to break even.
Shares in the company fell more than 10 per cent in morning trading and have lost more than a quarter of their value in the past six months.
It wrote down its steel business — Germany’s largest — by a further €200mn, adding to the €2.1bn writedown it booked in November because of high prices for gas and other raw materials.
Chief financial officer Klaus Keysberg said demand for steel from European carmakers had not yet recovered from the pandemic. “Compared to [before the pandemic], we still see a gap, and this is where we are,” he said.
In 2022, just under 3.5mn passenger cars were produced in Germany, according to the most recent data published by industry group VDA, compared with 5.7mn in 2017. Aside from the pandemic, car production in Germany has not fallen below 3.5mn since the energy crisis in the 1970s.
Thyssenkrupp has been struggling for more than a decade to reduce its reliance on steel and switch to other industrial products. It has also been under pressure to reduce debts that it amassed partly because of a 2005 investment in a Brazilian steelmaking business that cost the company €8bn in losses.
In 2019, shareholders pushed the company into selling its lucrative lifts and escalators business to private equity groups for €17bn. It has since closed or sold several other smaller units, including its mining equipment division.
Chief executive Miguel López joined the company last year, after his predecessor Martina Merz was pushed out by the board because of slow progress in the company’s efforts to spin out its steel and submarine businesses.
Thyssenkrupp on Wednesday also said there was no update on ongoing negotiations to sell half its steel business to Czech energy tycoon Daniel Křetínský.
