Aug 26 2008
Since completing the consolidation phase three years ago, ThyssenKrupp has been pursuing a sustained and profitable growth course. To this end an investment program with a volume of up to €20 billion is being implemented.
ThyssenKrupp's mid-term target is to achieve sales of €60 billion and sustained earnings before taxes and nonrecurring items of €4 billion. In the longer term - especially after the startup of the Steel segment's new slab mill in Brazil, the Steel and Stainless segments' new steelmaking and processing plant in the USA and the international investments of the other segments - ThyssenKrupp expects to achieve sales of around €65 billion and earnings before taxes and nonrecurring items of €4.5 to 5.0 billion. All the Group's segments will contribute to this.
As a value-oriented conglomerate, ThyssenKrupp operates in the areas of Steel, Capital Goods and Services with various very profitable businesses. The aim of the Group's growth strategy is to expand the global market positions of all segments. The basis for this are our products and services, which have three features in common: They offer high quality and advanced technology and are tailored to customers' requirements. ThyssenKrupp aims to further strengthen its position in all key markets in the future. Steel and Stainless are taking a major step forwards in Brazil and the USA with the building of the new facilities. Technologies, Elevator and Services are focusing in particular on the growth markets of Asia and the Middle East. The Services segment will accelerate its international expansion in raw and industrial materials services in the future.
The Group's forward strategy is also reflected in the key financials for the current fiscal year. Executive Board Chairman Dr. Ekkehard Schulz: "Our performance to date impressively demonstrates the advantages of our balanced portfolio of activities in Steel, Capital Goods and
Services and our strategy of occupying at least top 3 positions in attractive markets. For the current fiscal year we have raised our earnings forecast to over €3.2 billion before taxes and nonrecurring items. As things stand at present we also expect sales to increase to €53 billion. This will fulfill our expectations of a good fiscal year."
Services segment focuses expansion strategy
Accelerated expansion of raw and industrial material business - disposal planned for Industrial Services
In the past fiscal year the Services segment had 43,000 employees and generated sales of €16.7 billion and EBT of €704 million. Compared with fiscal year 2003/2004, the segment's sales have therefore grown by around 40% and EBT has almost trebled. This positive trend has continued in the current fiscal year. The Services segment has set itself new strategic targets.
Sales in excess of €20 billion and sustained EBT of €1 billion are planned. To achieve these targets and at the same time safeguard and strengthen the top positions already achieved on the world market, ThyssenKrupp Services is to implement a focused strategic plan in the next few years.
The core business of raw and industrial materials services with the business units Materials Services International, Materials Services North America and Special Products is to be significantly expanded.
At the same time to finance the growth the Industrial Services business unit is to be sold in the course of next year. This business unit is highly profitable, but it is the smallest unit in the segment by far and has the smallest synergies with the core business. For the majority of the activities (sales approx. €1.7 billion, 23,000 employees) better development opportunities are therefore seen with a best owner outside the ThyssenKrupp Group.
The steel service operations in Germany and Brazil (sales approx. €300 million, 7,000 employees) will remain in the Group and will be allocated to the Special Products business unit in the future. With the help of a strategic partner, who will take a substantial minority interest, the Special Products business in Asia and Eastern Europe in particular is to be driven forward.
After the successful initial consolidation and expansion phase, the segment is now embarking on the decisive focusing and growth phase with these transactions.
The Services segment today comprises four business units: The materials trading operations Materials Services International (€7.9 billion sales) and Materials Services North America (€2.3 billion sales), the Industrial Services business unit (€2.0 billion sales) and the trading and engineering activities of Special Products (€4.6 billion sales). The two business units with materials trading activities plan to accelerate growth to further enhance their market position. The aim is not only to expand in the growth regions of Asia and Eastern Europe but also to consolidate the leading positions achieved on the European and North American markets. At the same time the focus on growth sectors such as the aerospace industry will be further intensified. With targeted investments and acquisitions, not only will the range of products and services (currently around 150,000 articles) be developed in line with the needs of target groups but also the global warehouse and distribution network (currently around 440 branches) will be systematically expanded.
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