Thyssenkrupp continues to insist on the strategic restructuring initiated by him. At its meeting, the Executive Board presented its respective plans to the Supervisory Board. The new strategy is based on the transformation of the company into a high-performing “Group of Companies” with a lean management model and a well-structured portfolio. In the future, the company’s business will be divided into two categories: those whose potential Thyssenkrupp will develop independently or jointly with partners, and those for whom Thyssenkrupp will primarily follow the development path outside the Group.
Chief Executive Officer Ms Martina Merz “In recent months, we have not been indifferent to a very careful study of the individual development potential of each business for thyssenkrupp. The most important aspect of this work was to decide which constellation would offer each division the best prospects for the future, a place under the thyssenkrupp umbrella, in partnership or outside the company. After this portfolio revaluation, we made some difficult decisions that are long overdue, and we will now systematically implement them. Thyssenkrupp will be smaller but stronger from the transformation. ”
The main goal of the revised strategy is to improve the efficiency of all enterprises. Each unit was assigned an individual income target based on performance analysis. All goals must be systematically supported by concrete measures. Plant managers are fully responsible for the results. Within the Group, capital is allocated based on the expected contribution to value.
To finance the reorganization, in February of this year, Thyssenkrupp decided to sell the Elevator business to a consortium of financial investors for 17.2 billion euros. Cash receipts are expected to be received no later than the end of the current fiscal year. Given the current uncertainty in the macroeconomic environment, the company initially intends to maintain the greatest possible flexibility in the use of funds. At the first stage, thyssenkrupp will use the funds received to repay financial debt according to the repayment profile. The elevator deal will significantly improve the company’s equity ratio. It also makes fundamental structural changes possible.
In addition, a portion of the proceeds will be selectively used for business development where appropriate target profits can be achieved. The exact allocation and prioritization of funds will depend on the evolution of the corona crisis; today this cannot yet be predicted with sufficient accuracy.
To protect the competitiveness of its metallurgical business, Thyssenkrupp recently adopted a 20-30 Steel Strategy and entered into a relevant collective bargaining agreement with workers’ representatives. This strategy remains the right course of action. The plan provides for the reduction of 3,000 jobs, the optimization of the production network and additional investments totaling 800 million euros over the next six years. With this, thyssenkrupp is paving the way for making the steel business sustainable in an extremely challenging competitive environment. The aim is to preserve Germany’s steel production with integrated value chains and associated jobs in the long term.