OREANDA-NEWS.  November 26, 2014. "The 2013/2014 fiscal year represents a milestone in our earnings situation. We have demonstrated that we are making progress with our transformation into an efficient and profitable diversified industrial group on our Strategic Way Forward," said CEO Dr. Heinrich Hiesinger ahead of the Group's annual press conference. At the same time Hiesinger emphasized that the turnaround is not yet complete. For this the Group needs to generate not only a net profit for the year but also stable free cash flow before divestments. "And that’s why we will not let up in our efforts but will keep the pressure on. That applies to our efficiency program as well as our operating performance," continued Hiesinger.

Against the background of the net income and expectations of further improvements, the Executive Board and Supervisory Board are proposing to the Annual General Meeting the payment of a dividend of EUR 0.11 per share (last dividend EUR0.45 in fiscal year 2010/2011). "We are aware that this proposal is no more than a signal to our shareholders," said Hiesinger: "We link the positioning of ThyssenKrupp as a diversified industrial group with the aim of generating much stronger and more stable earnings, cash and value."

The CEO underlined the importance of the Group's setup as an integrated network of businesses, regions and corporate headquarters. "The sum of the Group's parts generates more value than the individual businesses could ever do alone. As an integrated group organization we will continue to grow profitably if we combine our forces internally," said Hiesinger.

Performance in the fiscal year

Adjusted EBIT from continuing operations climbed from EUR 586 million to EUR 1.3 billion in the fiscal year and therefore more than doubled (+127 percent). The capital goods businesses – Components Technology, Elevator Technology and Industrial Solutions – increased their adjusted EBIT by 13 percent year-on-year from EUR 1.555 billion to EUR 1.758 billion. The materials businesses – Materials Services, Steel Europe and Steel Americas – generated EUR 369 million in total, compared with a loss of EUR 116 million in the 2012/2013 fiscal year. This is the first clearly positive contribution in two years – even including Steel Americas, VDM and AST, which were negative this year.

Order intake up by 7 percent

Order intake from continuing operations reached EUR 41.4 billion, up 7 percent year-on-year in a continuing challenging economic climate (prior year EUR 38.6 billion). On a comparable basis, i.e. excluding currency and portfolio effects, order intake likewise increased by 7 percent. At EUR 18.7 billion order intake in the capital goods businesses improved significantly year-on-year. On a comparable basis new orders were 10 percent higher. In the materials activities, Materials Services and Steel Americas recorded order growth. Steel Europe was unable to increase its order intake mainly due to low steel prices.

Significant growth in sales

Sales from continuing operations at EUR 41.3 billion (prior year EUR 38.6 billion) were higher year-on-year in all business areas except Steel Europe, where sales fell due to disposals. On a comparable basis sales increased by 7 percent, profiting in particular from the strong growth and high orders in hand of the capital goods operations. Elevator Technology and Industrial Solutions achieved new record sales levels.

Stabilization of the balance sheet

The Group's net financial debt was reduced significantly by more than € EUR.5 billion from EUR 5.0 billion at September 30, 2013 to EUR 3.5 billion. Equity was increased from EUR 2.5 billion to EUR 3.2 billion. Accordingly the Group's gearing improved by around 92 percentage points to 109 percent.

Efficiency program taking effect

The positive trend in earnings in the reporting year mainly reflected the efficiency measures under the "impact 2015" program. At EUR 1 billion, the original savings target of EUR 850 million was significantly exceeded. Savings of EUR 1.6 billion have therefore already been achieved in the past two fiscal years. On this basis, the overall target for September 2015 is now being raised to around EUR 2.5 billion, around 8 percent or EUR 200 million more than the EUR 2.3 billion target set at the beginning of the fiscal year.