thyssenkrupp’s distribution business sees tougher markets

Both order intake and sales at thyssenkrupp’s Materials Services division were clearly negative in a difficult market environment with a noticeable decline in volumes, thyssenkrupp says in its annual report.  Looking ahead, the division expects that its performance will remain largely stable.

Operating indicators lowered in almost all areas of the thyssenkrupp operating segment, but particularly in the service centre business in Europe and the global direct-to-customer business, Kallanish learns from the group. The direct-to-customer business recorded the sharpest decline at -24%, whilst the warehousing and service business lost -2.7%.

In total, the division generated sales of 9.8 million tonnes of materials, versus 11.1mt in the prior year, with average prices also lower. The exception was the company’s business in North America, which performed positively in comparison with the prior year. Order intake and revenue for the division, both fell by -6%, to the same value of €13.9 billion ($15.3 billion). Ebit fell very sharply by -76% to €66 million.

The division still includes a contribution from stainless mill Acciai Speciali Terni (AST), which was also significantly worse than a year earlier, mainly due to continued strong competition from Asian imports.

On the positive side, the company launched thyssenkrupp Materials IoT GmbH in June 2019. It now markets to external customers an Industrial Internet of Things (IIoT) software programme originally developed for Materials Services. The spin-off is an example of how Materials Services is driving the systematic expansion of its service portfolio, the division says.