BERLIN, Nov. 21 (Xinhua) -- Thyssenkrupp has recorded a slight increase in revenue and solid order growth in what it described as a "challenging" 2017/18 fiscal year, earnings figures published on Wednesday by the German industrial conglomerate show.
In spite of negative currency effects and the launch of far-reaching corporate reforms, annual revenue rose by 3 percent to 42.7 billion euros (48.6 billion U.S. dollars). While Thyssenkrupp's order intake of 42.8 billion euros matched the high prior-year level of 2016/17, however, net income fell significantly from 271 million euros to 60 million euros.
"The past fiscal year was a turbulent and challenging one for thyssenkrupp" chief executive officer (CEO) Guido Kerkhoff commented on the development. Kerkhoff noted that the company had initiated one of the "biggest realignments" in corporate history and identified "potential for further improvements in all businesses" which it was now systematically addressing.
"This will raise the performance of thyssenkrupp as a whole", the CEO added.
Together with the full-year earnings figures, the executive board also presented a roadmap for the previously announced separation of the industrial and technology group. In September, Thyssenkrupp gave in to long-standing pressure from some of its major investors to divide its operations into two individual thyssenkrupp Materials AG and thyssenkrupp Industrials AG entities.
Thyssenkrupp explained on Wednesday that the new firms would be "managed as independent listed companies with direct access to the capital market." Aside from reducing complexity, the separation was seen as enabling each company to "respond to their respective customer's markets faster and more effectively and address investors with different interests."
The corporate reforms are scheduled to be approved by the Annual General Meeting (AGM) in January 2020. "We are convinced that in this new set-up the businesses will be able to develop better and concentrate on their strengths. With the roadmap in place, we will now press on with the separation of the Group", Kerkhoff said.
The creation of the transaction structures for the separation of the Group is anticipated to impose a "high three-digit million euro" cost on net income and free cash flow in the 2018/2019 fiscal year. Nevertheless, Thyssenkrupp expressed confidence that the separation would have a "positive impact on equity and the balance sheet" upon completion.
Thyssenkrupp further highlighted that it had achieved an "important milestone" in the past year by signing a joint venture agreement to combine its European steel activities with those of rival Tata Steel. The merger was progressing on schedule and was expected to boost group net income and reduce pension obligations once finalized. Thyssenkrupp is currently targeting a rise in adjusted earnings before interest and taxes (EBIT) to over one billion euros in the 2018/19 fiscal year.
