The industrial and technology company thyssenkrupp is driving forward its transformation with the reorganization of the portfolio and the launch of its group-wide performance-oriented program “APEX”. thyssenkrupp rothe erde (Bearings business unit), thyssenkrupp nucera, Uhde and Polysius, each of which has key technologies for the decarbonization of industry, will be merged into the new Decarbon Technologies segment at the start of the new financial year on October 1, 2023. The Supervisory Board of thyssenkrupp AG approved the corresponding plans of the Executive Board at its meeting yesterday. With the creation of the new segment, thyssenkrupp is positioning itself as a technology leader for the energy transition and giving full visibility to its comprehensive competencies for the green transformation.
Performance program “APEX”
In parallel to the reorganization of the portfolio, thyssenkrupp is rolling out the holistic performance program “APEX” to support the achievement of the financial targets communicated at the Capital Markets Day in December 2021, even in a persistently challenging environment. In the medium term, thyssenkrupp is aiming for an adjusted EBIT margin of 4 to 6 percent at group level, a significantly positive value for free cash flow before M&A and a continued reliable dividend payment for its shareholders.
Miguel López, CEO of thyssenkrupp AG, said: “thyssenkrupp has world-leading technologies in its businesses to reduce a large proportion of today’s CO2 emissions. We want to consistently tap the great potential of these businesses and convert it into valuable growth. For this purpose, we are establishing the Decarbon Technologies segment – our ‘green industrial powerhouse’. At the same time, with our performance program, we prepare all businesses to quickly and sustainably increase their profitability to benchmark levels and to make the best possible use of our market opportunities. Both are crucial success factors, just like on the football field: Through the performance program we improve the stability, speed and endurance of each individual business; With Decarbon Technologies we are bringing a new quality to our offensive.”
Focus on future topics
As part of its transformation, thyssenkrupp is aligning all its businesses with future topics and new technologies. In this way, the group is creating the conditions to benefit from the immense opportunities of the green transformation.
With the restructuring of the portfolio that has now been decided, the previous Multi Tracks and Industrial Components segments will be dissolved. The Automation Engineering and Springs & Stabilizers businesses remaining in Multi Tracks will be assigned to the Automotive Technology segment. The divestiture processes initiated for both units will be continued. Forged Technologies (previously Industrial Components) will also belong to Automotive Technology in the future due to the same end customer structure. This means thyssenkrupp is significantly simplifying its structure. In the future, thyssenkrupp will consist of the Automotive Technology, Decarbon Technologies, Materials Services segments as well as the Steel Europe and Marine Systems units, for which the aim is still to become independent.
Decarbon Technologies
In the future, around 15,000 employees will work in the new Decarbon Technologies segment, who generated sales of around 3 billion euros in the 2021/2022 financial year (pro forma). The segment’s headquarters will be located in Dortmund due to its geographical proximity to the stores. Further locations in growth regions such as the Middle East are being sought. The establishment of entrepreneurial and company co-determination in the form of a supervisory board and a works council working group is planned. The segment is led jointly by the CEO of thyssenkrupp AG, Miguel López.
Decarbon Technologies includes the businesses thyssenkrupp rothe erde, thyssenkrupp nucera, Uhde and Polysius. These combine many years of experience, in-depth expertise in international plant engineering, an extensive installed base and close customer relationships.
Achievement of financial goals
In addition to reorganizing the portfolio, thyssenkrupp has launched a holistic performance program, the key points of which the Executive Board presented to the Supervisory Board at its meeting yesterday. The aim of the program is for the businesses to quickly and sustainably achieve the financial targets communicated at the Capital Markets Day in December 2021. Although the businesses have already made significant progress in improving their operational performance as part of the transformation initiated, the environment is far more challenging than was expected at the end of 2021. This applies not only to the war in Ukraine, but also – as a result – to the uncertain energy supply and high energy prices in Germany, continued disrupted or fragile supply chains as well as increased inflation worldwide and significantly higher interest rates. The performance program serves to decisively close the resulting gaps.
The performance program is titled “APEX,” which means “tip.” In six areas of action – for example in material costs – experts will identify additional measures to improve cash management and performance in all stores over the coming weeks. Businesses remain responsible for the success and implementation of measures. To manage the program, thyssenkrupp AG has established a “Transformation Office”. Cetin Nazikkol is responsible for the program as Chief Transformation Officer (CTO). After thyssenkrupp has specified the goals of the program and defined milestones over the past few weeks, concrete measures are now being developed and the implementation process is starting. This includes a closely timed process for the progress of the program and any need for adjustment with all business under the direction of the Board of Directors. The “APEX” program is linked to existing initiatives to improve performance in stores.
“With the ‘APEX’ performance program, we ensure that we get the full potential out of our technologically leading businesses in the long term. This applies in particular to the key technologies for the energy transition, where we are striving for a turnaround towards sustainably profitable business models following the example of thyssenkrupp nucera. By bundling it in Decarbon Technologies, we are making thyssenkrupp a pioneer of green transformation and thus ensuring the future viability of the company and our customers,” said Miguel López.