Thyssenkrup has posted a 77% drop to adjusted earnings in the first quarter, blaming the situation at Steel Europe and a general weakening of the automotive market.

In what it described as a difficult economic environment, Thyssenkrupp’s sales were virtually stable at EUR9.7 billion in the first three months of the current fiscal year 2019/2020. While the capital goods businesses achieved in some cases double-digit growth rates, the materials businesses were clearly impacted by price and volume losses. This is also reflected in order intake , which was 4 percent lower overall at EUR9.7 billion. Adjusted EBIT amounted to €50 million and as expected was down from the prior year (EEUR217 million last year – a 77% decline) particularly due to the situation at Steel Europe and a general weakening of the automotive market.

“The latest figures are not great. But we are convinced that we are on the right track. A decision on the Elevator transaction is imminent, the negotiations with codetermination representatives on the Steel strategy are making progress, and we are improving our performance. The bottom line: We are moving in the right direction,” said Martina Merz, CEO.

In a difficult overall market environment in the automotive sector – dominated by continuing weak sales on the world’s biggest market China – the Automotive Technology business area’s order intake improved by 5 percent and sales by 11 percent year-on-year. The increases mainly reflected the start of production at new plants and projects, particularly for steering systems but also for damper systems and camshaft modules. This growth was partly offset by negative earnings contributions from the two businesses ‘under review’ – System Engineering and Springs and Stabilisers. At System Engineering capacity adjustment and cost measures have already been initiated, the company said. Overall adjusted EBIT at EUR21 million for the business unit was up from the prior year (EUR13 million).