FRANKFURT (Reuters) – German conglomerate Thyssenkrupp on Wednesday raised its outlook for sales and operating profit for 2022 but cut its free cash flow expectations, reflecting a rise in both selling prices and commodity costs.
The submarines-to-car parts group now expects its free cash flow before M&A to be in the negative triple-digit million euro range, having previously guided for a break-even.
“The dynamic movements in commodity and materials prices are weighing on our cash flow at present. However, we expect that there will be sequential improvements for us in the subsequent quarters,” Chief Financial Officer Klaus Keysberg said.
At the same time, the company benefited from higher selling prices for steel and materials, it said, adding it now expected sales to rise by a low double-digit percentage amount, compared with a mid single-digit percentage increase seen previously.
Adjusted earnings before interest and tax (EBIT) are now forecast to grow to at least 2.0 billion euros ($2.1 billion), Thyssenkrupp said. It previously expected adjusted EBIT of 1.5 billion to 1.8 billion euros.
In the second quarter, adjusted EBIT nearly quadrupled to 802 million euros, while sales increased by a nearly a quarter to 10.6 billion on the back of a 57%-jump in order intake.
($1 = 0.9491 euros)
(Reporting by Christoph Steitz. Editing by Jane Merriman)
