FRANKFURT (Reuters) – German conglomerate Thyssenkrupp <TKAG.DE>, grappling with a leadership and strategy crisis, published a concrete mid-term outlook for its divisions, responding to long-standing investor criticism for a more ambitious business plan.
The group on Thursday specified profit margin targets for its four divisions for the 2020/21 financial year, the first time it has done so. It is also aiming for free cash flow before M&A of at least 1 billion euros (£933 million) by then, compared with a negative 855 million euros in the last financial year.
With the medium-term goals, which include a margin target of at least 13 percent for its prized elevators business, newly appointed Chief Executive Guido Kerkhoff is trying to appease frustrated shareholders and steer the group into calmer waters.
The submarines-to-elevators conglomerate has been in crisis-mode since the sudden departure of its CEO and its supervisory board chairman in July, who both bemoaned a lack of support from key stakeholders in the group.
Last week, the company, which has come under pressure from shareholders Cevian and Elliott to improve its operating performance, cut its outlook after turnaround efforts at its struggling plant and ship-building unit failed to bear fruit.
At its unit producing parts for the automotive industry, the group aims for a profit margin of more than 7 percent, up from the 5 percent achieved in the last financial year. Corporate costs are expected to fall significantly below 400 million euros by 2020/21 from 535 million last year.
(Reporting by Christoph Steitz; Editing by Maria Sheahan and Victoria Bryan)