Thyssenkrupp has delivered a second-quarter performance that underscores the group’s ability to squeeze more from its operations even as top-line pressure persists. The industrial conglomerate posted revenue of €8.4 billion in the period, a 2% decline from a year earlier, yet adjusted earnings improved thanks to aggressive restructuring, tighter cost controls, and brighter conditions in its steel and materials trading units.
Shares traded at €10.13 on Wednesday, up 1.42% on the day but still nursing a 9.07% weekly loss — reflecting the market’s cautious reaction to the half-year update. The stock had closed at €9.94 the previous day, putting it down 10.77% over the week, though still 18.45% higher over the past month.
Marine orders surge, but industrial demand falters
The standout performer was Marine Systems, where a flood of new contracts pushed group order intake up 32% to €10.6 billion. The biggest boost came from an expanded Norwegian deal for two additional 212CD-class submarines, reinforcing the naval division’s role as a central pillar of Thyssenkrupp’s turnaround.
Elsewhere, the picture was less encouraging. Steel Europe suffered from lower prices, while Automotive Technology faced reduced call-offs from customers. Revenue fell from €8.6 billion a year earlier, and full-year guidance now reflects the strain: management expects sales to land between -3% and flat relative to the prior year, a downgrade from earlier expectations.
Cost savings mask net loss, but cash drain eases
Despite the revenue shortfall, adjusted EBIT improved markedly, supported by the APEX performance programme and contributions from steel and materials. The company reiterated its target for adjusted EBIT of up to €900 million for the full year, while cautioning that free cash flow before M&A could still reach a negative €600 million.
In the second quarter, free cash flow before M&A came in at minus €327 million — an improvement from minus €569 million a year earlier. Net financial assets stood at €2.8 billion, with available liquidity of €4.6 billion, leaving room for the restructuring.
The bottom line showed a net loss of €11 million, a sharp swing from the €167 million profit recorded in the same period last year. That year-ago figure had been flattered by a one-time after-tax gain of around €270 million from the sale of Electrical Steel India.
Steel valuation bump and EU import curb create tailwind
One of the more significant moves was the decision by finance chief Axel Hamann to raise the book value of Steel Europe to roughly €3 billion, up from €2.4 billion in December 2025. The increase reflects progress in the unit’s restructuring and a more favourable regulatory backdrop.
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The European Union will slash duty-free steel import quotas by 47% to 18.3 million tonnes annually starting July 1, 2026, with a 50% tariff applying to anything beyond. For Thyssenkrupp, that should provide a structural boost in its home market.
Negotiations with Jindal Steel International over a potential transaction in the steel division have been paused by mutual agreement, with the company pointing to the improved regulatory environment and ongoing repositioning of the business.
Canada submarine contest builds to May-June decision
The next big catalyst for the marine business is Canada’s submarine programme. CEO Oliver Burkhard expects a decision in the first half of 2026, with industry sources pinpointing May or June. Thyssenkrupp is competing against South Korea’s Hanwha Ocean for an order of up to 12 submarines, valued at more than $10 billion.
The result could provide a major strategic lift, making the naval division an increasingly visible driver of the holding company that CEO Miguel López is constructing.
Analysts split, TK Elevator deal timelines stretch
Equity analysts remain divided on Thyssenkrupp. Jefferies, a key supporter, reiterated its “Buy” rating and €13 price target, arguing that quarterly numbers beat expectations and that cost-saving measures are taking effect. Barclays, by contrast, maintains a “Sell” stance, while J.P. Morgan sits in the neutral camp.
On the corporate front, Thyssenkrupp expects to receive proceeds from the planned combination of TK Elevator with Finland’s Kone, a transaction valued at €29.4 billion. Closing is expected in 12 to 18 months, with regulatory hurdles likely to persist until earliest 2027.
Meanwhile, the company has completed the sale of Automation Engineering to Agile Robots and is preparing a new shareholder structure for HKM. Equity stood at €10.3 billion, giving a solid 36% equity ratio to underpin the continued transformation.
For now, Thyssenkrupp is navigating a narrow path: internal cost gains and a rising marine backlog are offset by revenue weakness in steel and automotive. The EU quota cuts and the Canada submarine decision form the most tangible external catalysts, but until those land, investors will keep watching the company’s ability to turn operational progress into cash.
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