thyssenkrupp AG (TKA.DE) | Investment Case

1. Company Snapshot

1.a. Company Description

thyssenkrupp AG operates in the areas of automotive technology, industrial components, marine systems, steel, and materials services in Germany, the United States, China, and internationally.The company's Automotive Technology segment develops and manufactures components and systems, as well as automation solutions for the automotive industry.Its Industrial Components segment manufactures and sells forged components and system solutions for the resource, construction, and mobility sectors; and slewing rings, antifriction bearings, and seamless rolled rings for the wind energy and construction machinery sectors.

The company's Multi Tracks segment builds plants for the chemical, cement, and mining industries.Its Marine Systems segment provides systems in the submarine and surface vessel construction, as well as in the field of maritime electronics and security technology.The company's Materials Services segment distributes materials and offers technical services for the production and manufacturing sectors.

Its Steel Europe segment provides flat carbon steel products, intelligent material solutions, and finished parts.thyssenkrupp AG was founded in 1811 and is headquartered in Essen, Germany.

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1.b. Last Insights on TKA

Thyssenkrupp AG's recent performance has been negatively impacted by a third-quarter net loss of €278 million, highlighting ongoing financial challenges. The company's revised guidance for fiscal 2024-2025, including an adjusted EBIT range, aimed to address these issues. Additionally, thyssenkrupp's decision to slash its annual sales outlook and investment plans, citing tough market conditions, has raised concerns. However, the spinoff of its naval-defense business, TKMS, which started trading on the German stock exchange, may unlock long-term value.

1.c. Company Highlights

Last Price	9.43
Change Percentage	2.45%
Open	9.31
Previous Close	9.21
Market Cap ( Millions)	5872
Volume	3775229
Year High	13.35
Year Low	3.79
M A 50	9.93
M A 200	9.6

FCF Yield	-1.94%
Dividend Yield	1.59%
ROE	-12.96%
Debt / Equity	0.00%
Net Debt / EBIDTA	-225.87%
Price To Book	0.65
Price Earnings Ratio	-4.76
Price To FCF	-51.51
Price To sales	0.18
EV / EBITDA	1.32

2. Thyssenkrupp Q3 Earnings: Navigating Headwinds with Efficiency and Restructuring

Thyssenkrupp reported a Q3 2024 EBIT of EUR 155 million, falling short of analyst expectations and prompting a downward revision of the full-year EBIT outlook to EUR 600 million to EUR 1 billion. This decline is attributed to weaker demand across its segments, particularly in Europe, and broader macroeconomic challenges. Despite this, the company maintains its positive free cash flow before M&A guidance of EUR 0 million to EUR 300 million for the fiscal year. Sales decreased across most segments, with the Automotive Technology, Decarbon Technology, and Materials Services segments seeing particularly sharp declines.

Publication Date: Aug -15

                                    📋 Highlights
                                    EBIT Adjusted Growth::
                                                Increased by EUR 7 million YoY despite 9% sales decline, driven by APEX 2.0 efficiencies and Decarbon Technologies.
Free Cash Flow Guidance::
                                                Maintained EUR 0–300 million positive range for FY24, contrasting EUR 227 million Q3 negative due to year-end cash timing.
Marine Systems Order Backlog::
                                                Surge to EUR 18.5 billion, including Singapore submarine orders and German service contracts.
Restructuring Progress::
                                                4,200 FTEs reduced YTD, with Steel and Automotive segments undergoing ongoing cost-cutting.
Segment EBIT Guidance Cut::
                                                Revised FY24 EBIT adjusted to EUR 600–1 billion (from EUR 600–1 billion), reflecting weaker European demand and macroeconomic pressures.

                                

Segment Performance

The Automotive Technology segment faces a 7% to 5% sales decline, with EBIT adjusted guidance lowered to EUR 200 million to EUR 300 million. Decarbon Technology projects a 9% to 5% sales decrease, primarily due to the sale of TK Industries in India. Materials Services sales are now projected to decline by 6% to 3%, leading to a reduced EBIT adjusted guidance of EUR 100 million to EUR 150 million. Steel faces a 10% to 8% sales decline, but its EBIT adjusted guidance remains at EUR 250 million to EUR 500 million. Marine Systems sales are expected to fall by 2% to 1%, impacted by IFRS 15 implementation, with EBIT adjusted guidance remaining at EUR 100 million to EUR 150 million.

Cost-Cutting and Portfolio Optimization

Thyssenkrupp is actively implementing cost-cutting measures, including efficiency programs and workforce reductions, totaling 4,200 FTEs year-to-date. The company is also making progress with the spin-off of its Marine Systems business, which is expected to be listed in late 2025. This strategic move aims to streamline the portfolio and unlock value for shareholders.

Valuation Considerations

While the company faces challenges, its current valuation metrics reflect investor pessimism. With a P/E ratio of -5.11, investors are essentially paying nothing for future earnings. The P/B ratio of 0.53 suggests the market perceives significant downside risk. The company's negative ROIC and ROE further highlight the need for operational improvements and strategic execution. The negative free cash flow yield raises concerns about the company's ability to generate cash from operations.

3. NewsRoom

Cell Impact and thyssenkrupp Automation Engineering have entered a cooperation agreement

Nov -06

Source:

Lactic Acid Market Size | Companies Analysis 2025- 2034

Nov -03

Source:

Thyssenkrupp Steel Appoints Marie Jaroni as Chief Executive

Oct -31

Source:

Assessing thyssenkrupp After a 26% Drop and Green Steel Expansion in 2025

Oct -23

Source:

thyssenkrupp (XTRA:TKA) Completes TKMS Spinoff—Will a Defense Focus Unlock Long-Term Value?

Oct -23

Source:

Beyond Meat, Tesla, TKMS, Kering: Trending Stocks

Oct -20

Source:

Thyssenkrupp Naval-Defense Spinoff’s Shares Jump in Market Debut

Oct -20

Source:

Thyssenkrupp renegotiates 10 billion euros in unit TKMS' guarantees before spin-off

Oct -14

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.42%)

6. Segments

Materials Services

Expected Growth: 1%

Thyssenkrupp AG's Materials Services segment growth is driven by increasing demand for industrial components, rising adoption of digital solutions, and strategic acquisitions. The company's focus on innovation, cost savings, and operational efficiency also contribute to its growth. Additionally, the segment benefits from its diversified customer base and geographic presence, enabling it to capitalize on emerging market opportunities.

Steel Europe

Expected Growth: 2%

Thyssenkrupp AG's Steel Europe segment growth is driven by increasing demand from the automotive and construction industries, supported by European governments' infrastructure development initiatives. Additionally, the company's focus on high-margin products, such as electrical steel and premium steel, contributes to its growth.

Automotive Technology

Expected Growth: 3%

Thyssenkrupp AG's Automotive Technology segment growth is driven by increasing demand for electric vehicles, autonomous driving, and advanced safety features. The company's innovative solutions, such as its e-mobility and autonomous driving platforms, position it for success in the rapidly evolving automotive landscape. Additionally, its strong relationships with major OEMs and Tier 1 suppliers contribute to its growth momentum.

Multi Tracks

Expected Growth: 4%

Thyssenkrupp AG's Multi Tracks segment growth is driven by increasing demand for urban mobility solutions, government investments in infrastructure development, and the company's strategic focus on digitalization and electrification of transportation systems, resulting in a growth rate of 4.

Marine Systems

Expected Growth: 5%

Thyssenkrupp AG's Marine Systems segment growth is driven by increasing global naval defense spending, rising demand for submarines and surface vessels, and growing importance of maritime security. Additionally, the company's focus on digitalization, electrification, and sustainability in naval systems contributes to its growth.

Forged Technologies

Expected Growth: 6%

Forged Technologies from thyssenkrupp AG's 6% growth is driven by increasing demand for lightweight automotive components, growing adoption of electric vehicles, and expansion into new markets. Additionally, investments in digitalization and Industry 4.0 technologies enhance operational efficiency, reducing costs and driving profitability.

Bearings

Expected Growth: 7%

Thyssenkrupp AG's 7% growth in bearings is driven by increasing demand from the automotive and industrial sectors, particularly in electric vehicles and renewable energy applications. Additionally, the company's focus on innovation, digitalization, and cost reduction initiatives have improved operational efficiency and enhanced competitiveness.

Reconciling Items

Expected Growth: 0%

Thyssenkrupp AG's stagnant growth is attributed to declining demand in the European automotive market, intense competition in the industrial goods sector, and high restructuring costs. Additionally, the company's diversified business model and lack of focus on high-growth areas have hindered its ability to drive growth.

Corporate

Expected Growth: 0%

Thyssenkrupp AG's stagnant growth is attributed to declining steel demand, intense global competition, and high restructuring costs. The company's diversified portfolio, including elevators and industrial solutions, has not been able to offset the decline in its core steel business. Additionally, the ongoing COVID-19 pandemic has further exacerbated the challenges, leading to a stagnant growth rate.

7. Detailed Products

Elevators

ThyssenKrupp Elevator is a leading manufacturer of elevators, escalators, and moving walks. Their products are designed to provide safe, efficient, and comfortable transportation in buildings.

Escalators

ThyssenKrupp's escalators are designed for high-traffic areas, providing efficient and reliable transportation of people in shopping malls, airports, and public transportation hubs.

Moving Walks

ThyssenKrupp's moving walks are designed for high-traffic areas, providing efficient and comfortable transportation of people over long distances.

Industrial Solutions

ThyssenKrupp's Industrial Solutions segment provides a range of products and services for the cement, mining, and chemical industries.

Marine Systems

ThyssenKrupp Marine Systems is a leading provider of naval vessels, submarines, and maritime electronics.

Steel Europe

ThyssenKrupp Steel Europe is a leading manufacturer of flat steel products, including hot-rolled and cold-rolled steel.

Components Technology

ThyssenKrupp's Components Technology segment provides a range of components and systems for the automotive and industrial industries.

8. thyssenkrupp AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Thyssenkrupp AG's products and services are moderately susceptible to substitutes, as customers have some alternatives, but they are not easily replaceable.

Bargaining Power Of Customers

Thyssenkrupp AG's customers have limited bargaining power due to the company's diversified product portfolio and strong brand reputation.

Bargaining Power Of Suppliers

Thyssenkrupp AG's suppliers have moderate bargaining power, as the company relies on a diverse range of suppliers, but some suppliers have significant market power.

Threat Of New Entrants

The threat of new entrants is low for Thyssenkrupp AG, as the company operates in capital-intensive industries with high barriers to entry.

Intensity Of Rivalry

The intensity of rivalry in Thyssenkrupp AG's industries is high, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	20.35%
Debt Cost	7.59%
Equity Weight	79.65%
Equity Cost	13.74%
WACC	12.49%
Leverage	25.54%

11. Quality Control: thyssenkrupp AG passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Bekaert

A-Score: 6.1/10

Value: 8.7

Growth: 4.2

Quality: 4.7

Yield: 6.9

Momentum: 6.0

Volatility: 6.3

1-Year Total Return ->

DMG MORI

A-Score: 5.9/10

Value: 4.5

Growth: 2.4

Quality: 7.1

Yield: 3.8

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

Traton

A-Score: 5.6/10

Value: 9.8

Growth: 5.9

Quality: 4.4

Yield: 6.2

Momentum: 3.5

Volatility: 4.0

1-Year Total Return ->

Thyssenkrupp

A-Score: 4.8/10

Value: 9.8

Growth: 3.1

Quality: 2.3

Yield: 2.5

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

RHI Magnesita

A-Score: 4.4/10

Value: 7.0

Growth: 5.8

Quality: 2.5

Yield: 8.8

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

Trelleborg

A-Score: 4.2/10

Value: 2.6

Growth: 5.8

Quality: 6.2

Yield: 3.8

Momentum: 4.0

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

42.20%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

12.49%

thyssenkrupp AG - DE0007500001

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TKA

1.c. Company Highlights

Cheaper

Lower Quality

Weak Momentum

Earnings Miss

Revenues Miss

Revenues Beats

More Volatile

Strong Momentum

2. Thyssenkrupp Q3 Earnings: Navigating Headwinds with Efficiency and Restructuring

Segment Performance

Cost-Cutting and Portfolio Optimization

Valuation Considerations

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.42%)

6. Segments

Materials Services

Expected Growth: 1%

Steel Europe

Expected Growth: 2%

Automotive Technology

Expected Growth: 3%

Multi Tracks

Expected Growth: 4%

Marine Systems

Expected Growth: 5%

Forged Technologies

Expected Growth: 6%

Bearings

Expected Growth: 7%

Reconciling Items

Expected Growth: 0%

Corporate

Expected Growth: 0%

7. Detailed Products

Elevators

Escalators

Moving Walks

Industrial Solutions

Marine Systems

Steel Europe

Components Technology

8. thyssenkrupp AG's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: thyssenkrupp AG passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.43$

12.e Scoring ^Insights

12.f DCF ^BETA