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

Breaking News: thyssenkrupp AG reported an 8% sales decline in Q1 2026, yet remains committed to its transformation strategy and fiscal guidance amid market headwinds. The company navigates challenges with a strategic approach. No change in guidance was announced. Analysts at Deutsche Bank recommend a hold, while those at UBS have a sell rating. The earnings call highlights management's efforts to address current market conditions. Thyssenkrupp's CEO emphasized the company's focus on executing its strategy despite short-term challenges.

1.c. Company Highlights

Last Price	11.31
Change Percentage	-0.09%
Open	11.31
Previous Close	11.32
Market Cap ( Millions)	7041
Volume	1135827
Year High	13.35
Year Low	6.06
M A 50	10.37
M A 200	9.87

FCF Yield	-17.81%
Dividend Yield	1.33%
ROE	1.72%
Debt / Equity	9.01%
Net Debt / EBIDTA	-140.70%
Price To Book	0.77
Price Earnings Ratio	43.16
Price To FCF	-5.61
Price To sales	0.22
EV / EBITDA	1.66

2. thyssenkrupp's Q1 Results: A Mixed Bag

thyssenkrupp's first-quarter results for '25-'26 presented a mixed picture, with revenues declining 8% year-over-year to EUR 7.2 billion, while EBIT adjusted increased to EUR 211 million, EUR 20 million above last year's level. However, net income came in at minus EUR 334 million, mainly due to expected restructuring expenses at Steel Europe. The actual EPS came out at '-0.57', relative to estimates at '-0.275', indicating a significant deviation from expectations. Analysts had estimated next year's revenue growth at 2.7%, which may be a challenge given the current macro headwinds.

Publication Date: Feb -16

                                    📋 Highlights
                                    Strategic Transformation Milestones::
                                                Spin-off of TKMS completed, Automation Engineering sale initiated, and HKM shareholder agreement finalized, supporting thyssenkrupp’s transition to a lean financial holding company.
Financial Performance::
                                                Q1 sales declined 8% to EUR 7.2 billion, but EBIT adjusted rose to EUR 211 million (+10% YoY), with Steel Europe contributing EUR 216 million due to lower raw material costs and efficiency gains.
Net Loss and Cash Flow Challenges::
                                                Net loss of EUR 334 million driven by restructuring expenses, while free cash flow before M&A fell to -EUR 1.5 billion due to seasonal factors.
Restructuring Costs Guidance::
                                                EUR 700–800 million anticipated for Steel Europe, reflecting ongoing transformation efforts and cost optimization measures.
Segment Outlook::
                                                Marine Systems achieved a record EUR 18.7 billion order backlog, and Steel Europe guidance remains "comfortable" amid favorable tariffs and energy compensation, with full-year EBIT adjusted guidance confirmed.

                                

Segmental Performance

The company's segmental performance was a mixed bag, with Steel Europe showing improvements in EBIT adjusted to EUR 216 million due to more favorable raw material prices and efficiency measures. Marine Systems had a record order backlog of EUR 18.7 billion. As Miguel Lopez noted, "the sentiment has turned positive due to the tariff situation and the limitation of import quotas for Europe," which could be a positive for the Steel business.

Guidance and Outlook

The company confirmed its guidance for the fiscal year, including sales, EBIT adjusted, and free cash flow before M&A. However, free cash flow before M&A was minus EUR 1.5 billion, driven by seasonal patterns. The restructuring costs are expected to be EUR 700 million to EUR 800 million, mainly related to the Steel segment.

Valuation

With a P/E Ratio of 14.57, the stock appears to be trading at a premium, considering the negative earnings. However, the P/B Ratio of 0.69 and P/S Ratio of 0.21 suggest that the stock may be undervalued. The EV/EBITDA ratio of 0.58 also indicates that the company's enterprise value is relatively low compared to its EBITDA. Additionally, the ROE of 4.86% and ROIC of -1.6% suggest that the company's profitability is still a concern.

Restructuring and Strategic Plans

The company's strategic plans for the Steel business are ongoing, with discussions continuing for the sale of the majority of the business. As Miguel Angel Lopez Borrego stated, "the talks with Chancellor Merz and the European Commission" are positive developments. The delay in the phaseout under the European ETS scheme is also expected to have a positive impact on the Steel business.

3. NewsRoom

thyssenkrupp AG (TKAMY) Q1 2026 Earnings Call Highlights: Navigating Challenges with Strategic ...

Feb -20

Source:

Why thyssenkrupp's (ETR:TKA) Healthy Earnings Aren’t As Good As They Seem

Feb -19

Source:

thyssenkrupp Q1 Earnings Call Highlights

Feb -12

Source:

Assessing Thyssenkrupp (XTRA:TKA) Valuation After Strong Q1 Earnings And Restructuring Progress

Feb -12

Source:

ThyssenKrupp reports first quarter beat driven by Steel Europe

Feb -12

Source:

Submarine maker TKMS hits record $22 billion order backlog, raises sales outlook

Feb -11

Source:

ArcelorMittal Signs Long-Term Liberia Pact, Commits $3.5B Investment

Feb -05

Source:

Steer-by-Wire Market Global Report 2024-2025 & 2031 Featuring 15 Key OEMs and 12 Tier I Suppliers and Module Integrators Including ZF Friedrickshafen, JTEKT, Nexteer Automotive, Bosch, Thyssenkrupp

Feb -05

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: 5.8/10

Value: 8.3

Growth: 4.2

Quality: 4.7

Yield: 6.2

Momentum: 5.5

Volatility: 6.0

1-Year Total Return ->

DMG MORI

A-Score: 5.6/10

Value: 3.2

Growth: 2.4

Quality: 6.9

Yield: 3.8

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

Traton

A-Score: 5.3/10

Value: 8.7

Growth: 6.0

Quality: 2.9

Yield: 6.2

Momentum: 4.0

Volatility: 4.0

1-Year Total Return ->

Thyssenkrupp

A-Score: 4.8/10

Value: 7.3

Growth: 4.2

Quality: 3.6

Yield: 2.5

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

Trelleborg

A-Score: 4.6/10

Value: 3.5

Growth: 5.8

Quality: 6.4

Yield: 4.4

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

RHI Magnesita

A-Score: 4.4/10

Value: 6.4

Growth: 5.8

Quality: 2.5

Yield: 8.1

Momentum: 1.5

Volatility: 2.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

31.29%

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

Earnings Beats

2. thyssenkrupp's Q1 Results: A Mixed Bag

Segmental Performance

Guidance and Outlook

Valuation

Restructuring and Strategic Plans

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

12.e Scoring ^Insights

12.f DCF ^BETA