|Bid||13.17 x 142800|
|Ask||13.18 x 10700|
|Day's Range||13.11 - 13.33|
|52 Week Range||9.25 - 17.34|
|Beta (3Y Monthly)||1.72|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov. 21, 2019|
|Forward Dividend & Yield||0.15 (1.12%)|
|1y Target Est||22.24|
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.On the banks of the Ruhr river that flows through Germany’s industrial heartland lies a vast ornamental park with manicured gardens and exotic trees. At its heart sits a neoclassical manor with copper-green roof and Grecian pillars: Villa Huegel, the former home of steel magnate Alfred Krupp.Villa is a misnomer -- the place is more a palace than a residence. There are wood-paneled library rooms, elaborate Flemish tapestries and glittering chandeliers dripping from coffered ceilings. The mansion is a tribute to Krupp’s vast wealth and status as champion of Germany’s breakneck industrial revolution in the nineteenth century. If the Ruhr valley was the economy’s engine room, Villa Huegel was its command bridge.Today, Villa Huegel is a mausoleum of a bygone era. The storied Krupp name has been folded into the portmanteau of the Thyssen and Krupp steel dynasties that merged in 1999 but got little tangible done after that. Once on par with German engineering stalwarts like Siemens AG and Daimler AG, Thyssenkrupp is fading away as Germany’s sputtering economy and management missteps force the company to sell off units to plug holes in its balance sheet.Individual units may well fight on for years, but the bell has tolled for the conglomerate whose steel made the spire of the Chrysler building, powered the Nazi war machine and built the machines that drove China’s rapid growth in the late 20th century.The decline and fall of the Thyssenkrupp empire is a source of concern for politicians who see an omen for the German economy which until now held on to well-paid blue collar jobs. On Nov. 14, Germany releases economic data that may show Europe’s largest economy slipped into recession in the third quarter.Breakup Risk“This basic principle of the social market economy has always been particularly pronounced at Thyssenkrupp,” said German Labor Minister Hubertus Heil of the Social Democratic Party, a political group that’s seen its relevance similarly wane as Germany drifts away from old mass employment industries that formed its political bedrock. “Social responsibility must not be sacrificed to short-term investor interests in the stock market value.”The growing crisis at Thyssenkrupp is making investors’ and workers’ interests in a break-up increasingly aligned: the company needs the cash to pay pensions and keep itself afloat. The foundation that oversees Villa Huegel and is a big stakeholder relies on dividends to meet its outlays, including research grants, cultural bursaries and tending the manicured property.Executives in Essen are currently in talks with suitors for Thyssenkrupp’s most prized asset: the elevator division, a 15-billion euro ($16.56 billion) unit that’s drawn interest from several parties. The firm is also looking at selling its automotive-components operations where profits are falling due to Germany’s worsening car sector. Its heavy plate steel division –- the successor of the Krupp steel mills that fortified Adolf Hitler’s tanks and battleships – is also on the chopping block.‘Downward Trend’“This is the continuation of a downward trend that started after World War II,” said Albrecht Ritschl, a professor of economic history at the London School of Economics. “German heavy industry has never been fully viable under world market conditions, owing to its location atop coalfields that were plentiful but expensive to exploit.”Along with its debt, ignominies for the one-time swaggering giant keep stacking up: the firm tumbled out of Germany’s blue-chip DAX index in September and was replaced by jet-engine manufacturer MTU Aero Engines AG. It’s an exit emblematic of how the industrial future of Europe’s biggest economy rests with high-tech, high-margin players rather than steelmakers.The company’s crisis has put it in the cross hairs of activist investors pushing for change. Sweden’s Cevian Capital AB is the second-biggest shareholder behind the foundation. A spokeswoman for Thyssenkrupp referred to a statement from CEO Martina Merz in September, when she said the company would continue with its strategic realignment as it seeks to regain confidence of investors.Chinese CompetitionThyssenkrupp’s demise points to larger fault lines running through Germany in the twilight of Angela Merkel’s long reign as chancellor. In the short-term, the export-led growth model faces threats from U.S. President Donald Trump’s unresolved trade war with China. Further out, Asian challengers are increasingly competitive in the advanced manufacturing niche that previously proved a rich vein for German jobs.The Made in China 2025 plan has helped firms become the hottest competitor for many German manufacturers, according to a survey from the German Chambers of Commerce. Thyssenkrupp has seen margins at its car-parts businesses steadily decline as that competition from Asian challengers intensifies.“Europe will have trouble remaining in the game against an ambitious Chinese state, which will continue helping its companies in key industrial sectors in order to make China an advanced, sophisticated economy,” said Philippe Le Corre, an expert in Chinese and European economic relations at Carnegie Endowment for International Peace.Steelmaking, Thyssenkrupp’s heart and soul, is facing an existential crisis in Europe. While the cost of permits to emit carbon dioxide steadily rise, cheap imports from abroad continue to crush prices. An attempt by Thyssenkrupp to merge its steel operations with the European unit of India’s Tata Steel Ltd. was scrapped amid European Union antitrust concerns.Bad DecisionsStill, many of Thyssenkrupp’s wounds are self-inflicted. A 2005 decision to conquer the American steel market haunts the company to this day. Management spent more than 12 billion euros for a steel mill in Brazil and a plant in Alabama. Depleted from a downturn in the global market and cost overruns in Brazil, Thyssenkrupp was eventually forced to pull the plug a decade later, a retreat that racked up a total loss of more than 8 billion euros, ranking as one of the biggest failed investments in German corporate history.The combination of flawed business decisions and rising costs have led Thyssenkrupp to burn cash in 10 out of 13 years since 2007, according to data compiled by Bloomberg. Despite a sustained economic boom in Germany, the firm’s overall cash outflow amounts of 5.1 billion euros in that time. Its pension deficit hit 743 million euros in the first nine months of 2019.Add to that management chaos and ballooning administrative costs at the firm’s Essen headquarters. Chief Executive Officer Guido Kerkhoff was ejected after less than a year after failing to sell off units, the same fate suffered by his predecessor, Heinrich Hiesinger, who stepped down amid pressure from activist funds Elliott Capital Management and Cevian.And as Villa Huegel still basks in a glamorous past, hosting award ceremonies and classical concerts in the ballrooms, austerity is starting to bite at Thyssenkrupp’s headquarters a 20-minute drive north of the Ruhr river. Here, office workers on the campus of what was once Germany’s biggest company have been told to display their frugal side and think twice before ordering logo-emblazoned electric blue pens and notebooks.(Updates with new suitor for elevator business)To contact the reporters on this story: William Wilkes in Frankfurt at email@example.com;Eyk Henning in Frankfurt at firstname.lastname@example.orgTo contact the editors responsible for this story: Reed Landberg at email@example.com, Benedikt KammelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
FRANKFURT/DUESSELDORF (Reuters) - Thyssenkrupp will receive first bids for its elevator division this week, three people familiar with the matter said, as major stakeholders differ over whether the conglomerate should sell a majority stake in its most profitable asset. Finnish rival Kone will submit an indicative bid for Elevator Technology by Friday, teaming up with private equity firm CVC, which is poised to buy assets that may have to be divested for antitrust reasons, the people said. This plan would help Kone to realise its ambition of becoming the world's largest elevator maker, overtaking Switzerland's Schindler and United Technology Corp's Otis.
Thyssenkrupp will remain committed to its Steel Europe division, which faces 2,000 layoffs, a board member said on Thursday, just weeks before the conglomerate presents a new strategy for the division. Steel and materials trading will form the core of Thyssenkrupp after the planned full or partial sale or listing of its prized elevator unit, and divestment of the majority of its car parts, plant engineering and shipbuilding divisions. "Together with the team at Steel Europe we will build a good future for steel," Klaus Keysberg, who is in charge of Thyssenkrupp's steel and materials trading units, said at an event in Dortmund in the Ruhr region, Germany's industrial heartland.
Thyssenkrupp is slashing some administrative jobs to cut down on the more than 2 billion euros (1.8 billion pounds) of costs it incurs in that field each year, two people familiar with the matter told Reuters on Monday. A majority of the 300 administrative roles at Thyssenkrupp's car parts and plant engineering divisions will be cut, the sources said. Thyssenkrupp declined to comment.
Thyssenkrupp's new chief executive Martina Merz will brief top managers about the steel-to-submarines conglomerate's organisational structure on Tuesday, three sources familiar with the matter told Reuters. The German group announced in May it was open to new ownership structures for its car parts, plant engineering, marine systems and elevators units, but investors criticised a lack of progress leading to the dismissal of CEO Guido Kerkhoff. Merz will address managers as the company reviews takeover offers for its elevators division and as investors question the viability of its steel and materials trading divisions in the long run.
Swedish fund Cevian, which holds an 18% stake in Thyssenkrupp , has never demanded a special dividend from the ailing conglomerate, a spokesman told Reuters, squashing speculation about such a move. The spokesman said that Cevian, Thyssenkrupp's second-largest shareholder, had previously participated in two capital increases and voted against proposals to pay a dividend in 2017 to improve the group's balance sheet. Cevian, which first disclosed a stake in Thyssenkrupp six years ago, has long criticised the group's complex structure, which spans capital goods ranging from elevators to submarines, arguing that individual units could thrive better on their own.
(Bloomberg Opinion) -- In the darkest days of the 2009 recession, Germany’s industrial output was collapsing at an annual rate of more than 20%. An unfathomable implosion but one that thankfully ended almost as quickly as it started.Some 10 years on, a crisis is brewing once again in the country’s industrial heartlands. The pain could prove more enduring this time.So far the problems aren’t nearly as acute as in 2009; industrial production fell by a comparatively modest 4.2% in July. The worry, though, is that demand is being sapped by a mix of both cyclical and longer-lasting structural factors such as the demise of diesel and the shift to electrical vehicles. Trump’s trade wars and Brexit aren’t helping. Germany’s industrial sector contributes more than one-fifth of GDP and is usually a huge asset. Right now this export engine is pulling the economy down. Signs of distress are everywhere. German manufacturing activity is at a decade low, according to IHS Markit’s purchasing manager’s index. The Ifo Institute estimates that more than 5% of manufacturing companies have cut working hours and about 12% expect to do so during the next three months. German machinery orders declined 9% in the first six months of the year, according to the VDMA association, which represents the country’s engineers. In chemicals and pharmaceuticals, domestic production fell 6.5% in the first half of the year, while domestic car output has fallen 12% this year. Auto exports have dropped 14%. ThyssenKrupp AG, a former industrial jewel that makes everything from steel to submarines to car parts, is in crisis. It’s burning cash, weighed down by debt and has parted company with two chief executives in the space of 14 months. The chemicals giant BASF is cutting 6,000 jobs and has warned on profits.Meanwhile, the German carmakers BMW AG and Daimler AG have issued profit warnings as tighter emission rules oblige them to keep spending heavily. Their suppliers are the ones really hurting though. At least three — Eisenmann, Weber Automotive and a subsidiary of Avir Guss — have filed for insolvency in recent weeks and investors are betting the pain will spread more widely.The list of manufacturing heartache goes on. Debt-laden wiring and cable company Leoni AG is among the Germany’s most shorted stocks. The shares have lost two-thirds of their value over the past year and this is hardly unique.The company that best illustrates this slow-burn crisis is Continental AG. Last week the tire and car parts titan announced a massive restructuring, which it said would affect 20,000 jobs over the next decade, or some 8% of the workforce. Explaining its decision, the manufacturer warned of an “emerging crisis in the automotive industry.” Demand is weak and technological requirements are shifting fast. In future it will need more software engineers but fewer people building components for gasoline and diesel engines.Conti’s great rival Robert Bosch GMBH has a big diesel technology business and is preparing for upheaval too. Its chief executive officer Volkmar Denner told Sueddeutsche Zeitung last month that he expects autos production to stagnate. “That’s different from the past when it almost always went up. The tailwind is gone,” he said.With luck these grim warnings will compel the government to reconsider its demand-sapping commitment to a balanced budget. Last week the head of the BDI industry lobby group urged Berlin to consider additional borrowing to fund public investment — a once unthinkable heresy but one that’s common sense when even 30-year German debt yields nothing.However, unlike in 2009 when a domestic car scrappage scheme boosted demand, Germany can’t easily buy itself out of trouble this time. Tens of thousands of well-paid industrial jobs face obsolescence because of the demise of the combustion engine. Electric vehicle drivetrains have far fewer parts and the process is less labor intensive.Germany’s economic power was built on the back of its excellent gasoline and diesel cars. Their inevitable demise puts the country’s position as the “engine of Europe” under threat.To contact the author of this story: Chris Bryant at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
FRANKFURT/DUESSELDORF, Germany (Reuters) - Thyssenkrupp will weed out some potential suitors for its elevator unit within the next two weeks, two people familiar with the matter said, as the closely-watched auction gathers pace regardless of the planned ousting of CEO Guido Kerkhoff. Bidders invited to the next round will likely include private equity groups KKR , Blackstone , CVC [CVC.UL] and Clayton Dubilier & Rice as well as strategic firms Kone and Hitachi , one of the sources said. A consortium consisting of private equity firms Advent and Cinven and the Abu Dhabi Investment Authority, the world's third-biggest sovereign wealth fund, is also expected to be included, the people said.
FRANKFURT/DUESSELDORF, Germany (Reuters) - Thyssenkrupp said it was preparing to replace Chief Executive Guido Kerkhoff, making him the latest casualty at the German steel-to-submarines conglomerate which has been in crisis mode for more than a year. The plan to ditch Kerkhoff after 14 months at the helm follows a loss of confidence among key investors, who no longer believe the 51-year old can deliver on a turnaround that includes selling the group's most profitable division, elevators. Since Kerkhoff became CEO in July 2018, the group has issued four profit warnings.
FRANKFURT/DUESSELDORF, Germany (Reuters) - Thyssenkrupp has started a structured process to look for potential buyers of all or parts of its elevator unit, its most profitable division. Letters asking for expressions of interest for the unit, valued anywhere between 12 billion and 17 billion euros (£11-£15 billion), were sent out to private equity and strategic investors, three people familiar with the matter said. Recipients included private equity groups KKR , Bain, Advent, CVC, EQT, Blackstone , Partners Group and Apollo as well as rivals Kone , Schindler , Otis and Hitachi , the people said.
FRANKFURT/DUESSELDORF (Reuters) - Thyssenkrupp CEO Guido Kerkhoff has little choice but to sell the group's prized elevator division lock, stock and barrel so he can save the conglomerate's remaining businesses, four sources close to the German company said. Kerkhoff's preferred option is to list a minority stake in Thyssenkrupp's Elevator Technology (ET) but with financial pressures mounting on the company, a formal auction process that could get a deal faster has been launched, the sources said. Kerkhoff said earlier this month that management would look at concrete offers and make a decision based on what is best for the group, its shareholders and the division.
Thyssenkrupp is in talks with Kloeckner & Co over future cooperation in materials trading, but is not working on a near-term takeover of the metals firm, three people familiar with the matter said. Shares in Kloeckner & Co were up 7.2%, narrowing earlier gains of as much as 17.7% following a report in German business daily Handelsblatt that cash-strapped Thyssenkrupp is in talks to buy the group. Thyssenkrupp shares were up 0.7% after having risen as much as 4.6%.
BERLIN/FRANKFURT (Reuters) - Steel-to-submarines conglomerate Thyssenkrupp said on Wednesday that its head of compliance Donatus Kaufmann, an executive board member, will leave the company at the end of next month. Thyssenkrupp said in a statement that the departure was part of the "strategic and structural" realignment of the company. Kaufmann, executive board member responsible for legal and compliance as well as North America and Western Europe, had been a member of the management board since February 2014.
German steel distributor Kloeckner & Co is open to playing a role in the consolidation of Thyssenkrupp's materials trading division, including taking a minority stake, its chief executive said on Wednesday. Thyssenkrupp in May unveiled a major restructuring, effectively looking for partners for its business divisions, including Materials Services where it could sell a minority stake to a strategic partner. "We will always look at proposals," Gisbert Ruehl told journalists after presenting second-quarter results, adding that nothing could be ruled out.