August 12, 2019 / 1:09 PM / 6 days ago

Factbox: Thyssenkrupp puts units up for review due to cash drain

(Reuters) - Struggling German conglomerate Thyssenkrupp (TKAG.DE), whose shares hit a fresh 16-year low on Monday, put three underperforming businesses under review last week, hoping this will ease pressure on the group’s cash flow.

FILE PHOTO: A logo of Thyssenkrupp AG is pictured at the company's headquarters in Essen, Germany, November 21, 2018. REUTERS/Thilo Schmuelgen

The new plans come in addition to a planned sale or listing of its elevators division, by far its most profitable business.

The three units put up for review — Springs and Stabilizers, System Engineering and Heavy Plate — account for 4%, or 1.7 billion euros ($1.9 billion), of group sales but a quarter of cash outflow this year, more than 250 million.

Their combined 9,300 staff make up 5.7% of Thyssenkrupp’s total workforce. The company is now drawing up restructuring plans. If that should fail the businesses could be sold or shut down.

Here are some basic facts on the units:

SPRINGS & STABILIZERS

- part of Thyssenkrupp’s Components Technology business division

- described as “the biggest drag” on profits and cashflow by Thyssenkrupp Chief Executive Guido Kerkhoff

- makes chassis components for the car industry, a heavily commoditized market

- employs about 3,600 staff

- adjusted loss before interest and tax of 127 million euros in the 2017/18 fiscal year

- negative cash flow of 109 million euros in 2017/18

- has production sites in Mexico, Brazil, China, Hungary and Germany

- peers include Italy’s Sogefi Group (SGFI.MI), Germany’s Mubea and U.S.-based Federal-Mogul

SYSTEM ENGINEERING

- part of Thyssenkrupp’s Industrial Solution business division

- subject to “inefficient cost basis” and “increasing customer reluctance”, CEO Kerkhoff says

- makes assembly lines for the car, aerospace and battery industries

- employs about 4,900 staff in Europe, Asia and the Americas

- made adjusted earnings before interest and tax (EBIT) of 15 million euros in 2017/18 on sales of 1.1 billion (adj EBIT margin of 1.4%)

- cash flow of 16 million euros in 2017/18

- competitors include Siemens (SIEGn.DE) and Kuka (KU2G.DE)

HEAVY PLATE

- part of Thyssenkrupp’s Steel Europe business division

- makes solid steel plates for the construction, shipbuilding and pipeline industries

- hit by “import pressures” from cheaper rivals, Thyssenkrupp says

- employs about 800 staff in Duisburg, Germany

- made an adjusted loss before interest and tax of 28 million euros in 2017/18

- negative cash flow of 47 million euros in 2017/18

- competitors include Salzgitter (SZGG.DE) and Dillinger Huette in Germany and Austria’s Voestalpine (VOES.VI)

Reporting by Christoph Steitz in Frankfurt and Tom Kaeckenhoff in Duesseldorf; Editing by Keith Weir

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