Trading Desk
Thyssenkrupp: Restructuring and the Defense Boom as an Opportunity
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Christian Ingerl
Redaktor
In future, the traditional German group would like to operate solely as a strategic holding company and set up its business independently. This could create new value. There is applause from the stock market, which pushes the share price towards the double-digit range.
In January of this year, we highlighted the opportunities at the German industrial group Thyssenkrupp in January of this year. At that time, the share was trading at EUR 4.50, today the share is trading at around twice that level. It is above all the restructuring plans that are giving the MDAX group wings.
But one thing is certain: anyone investing here needs good nerves. This is because the rise to date has been anything but straightforward. There was a sharp setback in mid-May. The reason: in the second quarter of the financial year 2024/25 (30.09), a weak steel division had a negative impact on the balance sheet. The segment even reported a loss of EUR 23 million. In addition, the new US tariffs led to losses in the automotive parts division. Overall, the Group was only able to report an adjusted operating result of EUR 19 million from January to March, 90% less than a year ago.
IPO ahead
However, not all business areas weakened. The naval unit, which was about to be spun off, shone with significant growth. Driven by the global armaments boom, the subsidiary not only recently landed several billion-euro submarine orders, the company also improved its operating result by a quarter to EUR 31 million. Concrete plans for the Group’s restructuring were published at the beginning of this week. Following the spin-off of the Steel and Naval Shipbuilding divisions, CEO Miguel Lopez would also like to split his other three business areas into independent units. Consequently, in the medium term, Thyssenkrupp will only be a strategic holding company with majority stakes in the divisions. According to DZ Bank analyst Dirk Schlamp, the planned measures have the potential to release value in the medium term.
“Future model”
Group CEO Lopez is not giving himself much time for his plan. The Material Services and Automotive Technology segments should also be ready for the capital market in the coming years. However, the manager still has to face up to the employee representatives, who are already criticizing the fact that they are not being adequately involved in the strategic discussion. IG Metall is already threatening: “We reject the idea of filleting the Group and gradually taking it public – without a vision for the future with prospects for employees and locations in all areas.” Among other things, they are demanding that compulsory redundancies be ruled out. In order to create more clarity, the Management Board would like to present the concept, known as the “future model”, to the Supervisory Board before the end of this year.
Price gap closed
The new plans have now ensured that the Thyssenkrupp share has already been able to close the price gap that was torn in mid-May. This could ensure that the mid-cap returns to its old upward trend. The news surrounding the company’s transformation is also likely to continue in the coming weeks and months. On the upside, the next target is clearly the sustainable conquest of the double-digit price range. In the event that the share bounces off the 10 mark, solid support is available in the EUR 8 range.
Investment solutions
Risk-conscious investors can invest in the Mini Future Long MTKA3T from Leonteq to accelerate a further climb of the German mid-cap company. The product has a leverage of 3.17, the knock-out is at EUR 7.2498 and thus 23.8% away from the current level. Should there be a correction in the current v-shaped recovery, the short counterpart BQWSKU from UBS would be a suitable product to turn price losses into profits.
But you can also make a lot of money in a sideways trend. Investors who bought the Barrier Reverse Convertible RTKAAV introduced by Bank Vontobel in January. After the price rally, this product no longer promises any chance of a return and can be safely exchanged for another BRC. A high sideways yield of 14.9% p.a. is offered by the Barrier Reverse Convertible KZPVDU from UBS. The barrier is located at EUR 5.96, 37.4% away from the current price level. The term ends in less than one year on April 2, 2026.
