The Group's adjusted EBIT increased in the 1st half by 34 percent to €944 million (prior year €703 million). The high-margin capital goods businesses were influenced by adverse currency effects and higher material costs. Despite these effects Elevator Technology again showed strong 1st half earnings with adjusted EBIT of €424 million (prior year €422 million). As expected, Components Technology was down slightly year-on-year at €170 million (prior year €176 million). This also reflected continued low demand for wind turbine components. Industrial Solutions recorded adjusted EBIT of €(11) million (prior year €64 million). The restructuring initiated in the last fiscal year is expected to provide a significant earnings improvement in the second fiscal half. At the materials businesses there was a noticeable earnings improvement in particular at Steel Europe in a continuing good market environment and thanks to performance measures. Adjusted EBIT increased from €119 million to €358 million. Materials Services at €151 million was slightly down from the prior year (€173 million).
thyssenkrupp almost quadrupled its 2nd quarter net income year-on-year from €64 million to €253 million. 1st half net income increased even more sharply from €58 million in the prior year to €344 million. After deducting minority interest, net income was €321 million (prior year €42 million); earnings per share came to €0.52 (prior year €0.07).
Free cash flow before M&A in the 1st half improved significantly by €477 million year-on-year but as expected remained negative at €(1,381) million. In the 2nd quarter, however, thyssenkrupp generated a positive cash flow of €168 million, which was likewise a significant improvement from the prior-year quarter (€(139) million). The temporary increase in net working capital in the materials businesses in the 1st quarter was partly offset. Accordingly the Group's net financial debt came to €3.5 billion (September 30, 2017: €2.0 billion).
For the current fiscal year 2017 / 2018 thyssenkrupp confirms its forecast for the Group. Adjusted EBIT is expected to increase to €1.8 to €2.0 billion (prior year, continuing operations: €1,722 million). On this basis the company forecasts a significant increase in net income versus the prior year (prior year, continuing operations: €271 million). Free cash flow before M&A is expected to be positive again (prior year, continuing operations: €(855) million).
With regard to the planned steel joint venture, as announced in mid-April 2018 thyssenkrupp expects that a decision can be made by the Boards in the first half of 2018.
With the planned joint venture thyssenkrupp achieves a key prerequisite for a sharpening of the Group's strategic target and subsequently also the financial targets. The Executive Board will present the further refinement of its strategy to the Supervisory Board after the signing.
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