I'm glad you're watching and welcome to the first episode of Close up. I would like to personally use this new compact format to regularly share with you topics and thoughts that are important to me.
The topic to start with obviously is the one which shakes and affects me as much as it does you: the war in Ukraine. That we in Europe, after such a long stable period of peace, have to experience something so inconceivably terrible, shocks me greatly.
Many thousands of people have already lost their lives as a result of the senseless violence and destruction, and millions more have fled their home. Please be assured that this affects me and the entire leadership team, just as it affects you and those close to you. Violence is always the wrong means. This war must end as soon as possible!
Many refugees, many families and children among them, have lost everything in the last days and weeks and urgently need support. On behalf of the Board and the entire leadership team, I would therefore like to express my sincere thanks to all employees who have been actively involved in the various relief efforts and who continue to do their best to alleviate the suffering of those affected.
Of course, in these times I deal with the question what this war means for all of us at thyssenkrupp every day. It will be no different for you. When raw material prices and energy costs suddenly explode. When gas supplies are in question. That stirs up fears – and we all feel it. Customers of ours have stopped production because they can no longer get parts from suppliers. And they order less from us. We are already experiencing this, for example in the steel and automotive business.
Irrespective of current events, we are on the right track: thyssenkrupp has improved in many areas. Our performance improved in the course of the fiscal year and our development into a group of companies is beginning to bear fruit. This progress is necessary and important.
Some businesses performed very strongly in the second quarter. This is partly due to our combined efforts. But in all honesty we also benefited from high market prices at Material Services and Steel Europe. These external effects undoubtedly helped our earnings. But at the same time the higher inventory valuation was not beneficial for our cash flow. So we have to continue to work on our cash flow - that applies in general, but especially in the current uncertain situation.
This development shows us that for all our joy, we cannot rest. We must continue to improve our performance. Because part of the truth is that we will not yet achieve our interim target for this fiscal year - break-even free cash flow before M&A. But that remains our intention: that’s why it’s so important to continue improving our performance - beyond what’s provided for in the 21/22 budget. This applies to short-term measures, but also to structural performance issues.
Basically, we have to save wherever we can. Costs have to come down: Be it in material costs, investments, and especially in the management of inventories. Wherever possible, we must also make costs more flexible. Overall, we need to work continuously on improvements and see this as a permanent training program that brings success and is therefore fun. And - as in sports - also welds us together. We want to concentrate on the things that we can directly influence ourselves.
We have to recognize that war in its irrationality is neither predictable nor plannable. And I can very well understand that this is causing uncertainty among many people. But I am absolutely confident that, with our combined strength, we will master these challenging times. Just as we have already succeeded in doing together in the past two years: Whether in matters of transformation, the corona pandemic or the semiconductor crisis: together we have overcome many hurdles so far.
We will continue our strategy and develop thyssenkrupp into a powerful group of companies - more decentralized, more flexible, more responsive. This is what we presented to the Supervisory Board and we are already working intensively on this in all businesses.
So the key question for us remains: How can we develop each individual business in the best possible way to create value? We are discussing ideas and plans with each business and will decide when the conditions are right and the opportunity is ripe.
Regarding the steel business: we remain convinced that a stand-alone structure for the business opens up good prospects for the future - even if the concrete form of implementation remains to be seen at the moment. But we are currently talking mainly about „when“ and „how,“ not „if”. Accordingly, we will continue to advocate reliable funding for the green transformation in steel and that the necessary framework conditions be created as quickly as possible.
I am confident that thyssenkrupp will play an important role in the green transformation in our country. We are already making a major contribution in many areas to making the German economy competitive for the future. But for the time being we are continuing to drive on sight. As I said, we cannot yet foresee what the medium- and long-term consequences of the war in Ukraine will be.
We will therefore calmly observe all developments, assess them objectively and draw the necessary conclusions. If the situation should change, we will be prepared. thyssenkrupp can do it. You can do it. You have proven that many times!
Your commitment to our company is a decisive factor for us. This is also shown by the new Pulse Check, in which you give us positive feedback that thyssenkrupp has improved in many areas. And your confidence in our company has even increased significantly. Thank you for that, too!
For me, the board and the entire leadership team this is a great incentive not to let up now and to further strengthen this confidence. I hope that you, too, will remain committed to doing your best for our common path forward. You can expect no less from us!
thyssenkrupp continues to have good prospects for the future! Even though our environment can always change dynamically, we remain flexible and accept new challenges openly and calmly. I am very confident that we will seize our opportunities!