Report on the economic position

Macro and sector environment

Moderate growth of the global economy despite negative conditions – outlook for Germany remains negative

In 2024 and so far in 2025, the global economy grew moderately but, at the same time, faced many risks such as trade conflicts, a tightening of monetary policy and inflationary pressures. Global gross domestic product (GDP) increased by 2.8% in 2024, which was below the average pre-pandemic growth rate of 3.1%.

S&P Global latterly adjusted its forecast for 2025 to growth of 2.7% although expectations for the key regions remain subdued. While some economies – such as the USA, Canada, the euro zone, the United Kingdom and China – were able to upgrade their forecasts on the back of surprisingly positive second-quarter data, moderate growth rates are predicted overall for the second half of the year. The reasons for this include new and higher tariffs (especially in the USA) and the persistence of strong geopolitical uncertainties.

The German economy remains in crisis. Following a decline of 0.5% last year, GDP is expected to increase by a slight 0.2% in 2025. Coalition agreement measures such as accelerated amortization or a reduction in electricity tax for manufacturing industry could put the German economy back on track for growth in the short to medium term.

Macroeconomic uncertainties curb industry development

The thyssenkrupp businesses are influenced particularly by developments in the following three industries. Further information about the market positions of the individual businesses can be found in the subsection headed “Profile and organizational structure” in the section headed “Fundamental information about the group.”

Automotive – Global automotive production in fiscal year 2024 / 2025 was higher than the prior-year figure. However, it remained below past levels compared with the strong pre-pandemic years.

There were some substantial differences in production trends by region and manufacturer. Production in China continued to grow and again outperformed the already strong prior years. Volumes in North America and Europe – key regions for thyssenkrupp – were lower than in the prior-year period. Both China as a production location and Chinese manufacturers were able to increase their market shares.

Machinery – Performance in the global machinery sector differed. The USA and China posted growth in production and order intake in fiscal year 2024 / 2025, although the mood remained subdued on account of political uncertainties. By contrast, the picture in the EU was split: There were significant declines in Germany and Italy but positive momentum in France, the United Kingdom, the Czech Republic and Poland.

In light of geopolitical uncertainties, fluctuating regulatory conditions and vulnerable supply chains, the short- to medium-term outlook remains subdued.

Steel – According to the global steel industry association, world demand for finished steel declined by 1.6% in 2024. It is expected to stagnate in 2025.

Significant regional differences were observed. In the USA, demand shrank by 1.6% in 2024 but is forecast to expand by 1.8% in 2025. The decline in China continued in 2024 with a drop of 5.4%; a further reduction of 2.0% is expected in 2025. In 2024, demand in the EU grew by 1.2%; renewed growth of 1.3% is anticipated in the current year. In Germany, the slump of 6.2% in demand for finished steel was particularly pronounced in 2024. Crude steel production fell by around 11% year-on-year in the period from January to September 2025. Demand for finished steel is expected to recover overall by 1.5% in 2025.

After prices increased significantly in 2021 due to the material shortages prevailing at the time and compared with the revenues achieved in earlier years, they declined successively from fiscal year 2022 / 2023. The trend continued in the first half of 2024 / 2025, but revenues then showed a lateral trend in the second half of the year. Overall, the decline in prices was in line with the price trends for iron ore and coking coal on the raw material markets. The prices for these materials also fell as the global economy slowed.

Summarized assessment by the Executive Board

The past fiscal year was characterized by the continuing weakness of the economic environment, which forced us to correct some of the targets we had set when we published our figures for fiscal year 2023 / 2024. We achieved these corrected targets. Further details can be found in the subsection headed “Forecast-actual comparison.”

Sales of the thyssenkrupp group declined by €2.2 billion to €32.8 billion in the reporting year. The main reasons for this were reduced demand and lower prices at Materials Services and Steel Europe, lower volumes at Automotive Technology and reduced demand at Decarbon Technologies. Despite the decline in sales, we increased adjusted EBIT by €72 million to €640 million. Decarbon Technologies and Steel Europe were the primary contributors to this development, mainly due to various one-time effects explained in detail in the paragraph on net income.

Compared with the previous year, free cash flow before M&A rose by €253 million to €363 million. Factors in this positive development included the significantly larger contribution from Marine Systems in connection with new construction orders, as well as the improved release of funds in net working capital.

Net income amounted to €532 million, an increase of €2.0 billion compared with the prior year. This positive figure resulted mainly from the first-time measurement at fair value of the ordinary shares from the Elevator investment as of September 30, 2025 (€902 million), a reversal of impairment losses in the 2nd quarter of the reporting year, a dilution gain due to the participation of ALAT Technologies Company, the sale of thyssenkrupp Electrical Steel India (€328 million), positive effects from the measurement of CO₂ certificates and positive one-time effects due to the cancellation of collective agreements and the remeasurement of risks at Steel Europe.

At €4.9 billion, net financial assets were €0.5 billion above the prior-year level, mainly due to the positive effects from free cash flow.

Cash and cash equivalents and undrawn committed credit lines totaled €6.8 billion as of the reporting date, following the redemption of a bond during the year.

The following table provides an overview of the key indicators for the group’s development compared with the prior year:

Forecast-actual comparison

The economic environment was persistently weak in the reporting year, prompting us to adjust our targets, which were then also achieved.

Additional information on the factors that impacted our earnings performance can be found in the sections headed “Results of operations and financial position of the group” and “Segment review.”

The following table contains details of the forecasts, which were updated on publication of the interim reports on the 1st quarter, 1st half and first 9 months of the reporting year, and the final figures for 2024 / 2025.

Results of operations and financial position of the group

Analysis of the results of operations of the group

Order intake

Despite the persistent economic challenges, order intake was increased by 15% in fiscal year 2024 / 2025. This development was driven mainly by major orders received by Marine Systems in the 1st and 3rd quarters of 2024 / 2025. The demand situation in other industries – especially the European automotive industry and the machinery sector, for example – remained difficult throughout the fiscal year. Further segment-specific order intake information can be found in the subsection headed “Segment review.”

Sales

Sales declined by 6% year-on-year. With the exception of the Marine Systems segment, which posted slight increases in sales, all other segments contributed to this development. Detailed segment-specific sales information can be found in the subsection headed “Segment review.” Information on the sales by customer group and sales region can be found in the subsection headed “Profile and organizational structure” in the section headed “Fundamental information about the group.”

Earnings

In fiscal year 2024 / 2025, the gross profit – a component of income from operations – and the gross profit margin of the thyssenkrupp group improved year-on-year, by €476 million to €3,719 million and by 2.1 percentage points to 11.3%, respectively.

Among other things, these figures include a decrease of €2,680 million in the cost of sales, to €29,119 million, which was out of proportion to the sales trend. This is equivalent to a percentage reduction of 8%. The main reasons were significantly lower materials expenses as a result of the decline in sales and the year-on-year decrease in impairment losses recognized on non-current assets, by €349 million to €563 million, primarily affecting the Steel Europe segment. An additional contribution to the decrease in the cost of sales came from the reduction of €95 million in personnel expenses to €5,045 million, also including positive one-time effects from the cancellation of collective agreements in the Steel Europe segment. Moreover, compared with the prior year, positive earnings contributions totaling €215 million came from the measurement of CO₂ forward contracts. The latter also includes income of €76 million from the termination of cash flow hedges in the 1st quarter of the reporting year.

In fiscal year 2024 / 2025, income from operations of the thyssenkrupp group improved sharply year-on-year, by €1,098 million to a gain of €28 million. The sale of thyssenkrupp Electrical Steel India in the 2nd quarter of the reporting year was the primary contributor to this development, resulting in an overall gain of €328 million in other gains and losses in fiscal year 2024 / 2025. A further factor was the significant decrease in selling expenses, by €208 million to €2,380 million. The principal reasons for the lower selling expenses were the decline of €73 million in personnel expenses for restructuring measures to €3 million, which mainly related to the Materials Services and Decarbon Technologies segments, and a decrease of €59 million in impairment losses on non-current assets to €72 million, which primarily resulted from the Materials Services segment. Moreover, sales-related freight expenses fell by €46 million to €747 million.

In fiscal year 2024 / 2025, EBIT of the thyssenkrupp group – like income from operations described above – also improved sharply year-on-year, by €1,117 million to a positive figure of €76 million.

Special items

Groupwide EBIT in fiscal year 2024 / 2025 was negatively impacted by special items totaling €564 million, mainly impairment losses of €786 million. They were offset in part by the aforementioned gains from the sale of thyssenkrupp Electrical Steel India in the 2nd quarter of 2024 / 2025. Further information about segment-related special items can be found in the subsection headed “Segment review.”

Adjusted EBIT

Information about the adjusted EBIT of the individual segments can also be found in the subsection headed “Segment review.”

Financial income/(expense)

Compared with the prior-year period, financial income/(expense) increased sharply by €1,135 million to a positive figure of €1,009 million. The improvement mainly related to income of €902 million recognized in the reporting year from the first-time measurement at fair value of the ordinary shares from the Elevator investment as of September 30, 2025; this was recorded as financial income. There was also a significant increase in income from investments accounted for using the equity method, which at €219 million mainly relating to the ordinary shares purchased in connection with the sale of the elevator activities, which were still accounted for by the equity method until September 29, 2025. This effect was mainly influenced by a reversal of impairment losses of €105 million in the 2nd quarter of the reporting year and a dilution gain of €83 million due to the participation of ALAT Technologies Company. This was offset in part by the decline of €31 million in interest on net financial assets.

Income taxes

As in the prior year, income tax expense was attributable to tax expense on positive earnings in foreign countries, whereas negative operating earnings, also as a result of impairment losses in the Steel Europe segment, did not result in lower taxes. The income from the first-time measurement of the Elevator investment at fair value has not resulted in tax expense. The higher income tax expense was mainly due to a devaluation of deferred tax assets, which could still be netted against deferred tax liabilities as of September 30, 2024. In addition, the sale of thyssenkrupp Electrical Steel India in the 2nd quarter of the reporting year resulted in withholding tax expense.

Net income/(loss)

After taking into account income taxes, net income was €532 million, following a net loss of €1,450 million in the prior year. The earnings per share attributable to the shareholders of thyssenkrupp AG thus improved by a significant €3.17 to a profit of €0.75.

Analysis of the financial position of the group

Financing

Principles and aims of financial management

The goal of our financial management is to ensure our solvency at all times. The financing of the group is handled centrally by thyssenkrupp AG, enabling a uniform presence on the capital markets, and is based on a multi-year financial planning system and a monthly rolling liquidity planning system covering a planning period of up to one year. Our cash management systems allow subsidiaries to use surplus funds of other units to cover their liquidity requirements. This reduces the volume of external financing and thus interest expense. External financing requirements are covered using money and capital market instruments such as bonds, loan notes or commercial paper. Moreover, where required, derivative financial instruments are used for hedging purposes. We can also make use of committed credit facilities in various currencies and with various terms, as well as selected off-balance-sheet financing instruments such as factoring programs. Information on the available credit facilities is provided in Note 17.

The aim of our central financing system is to strengthen our negotiating position vis-à-vis banks and other market players and to raise or invest capital on the best possible terms and conditions.

The strategic realignment is also aimed at strengthening the entrepreneurial independence of the businesses. After thyssenkrupp nucera assumed responsibility for its own financing following its IPO in 2023, TKMS was given responsibility for its cash management activities in September 2025 in connection with the spin-off of a minority interest in October 2025.

Net financial assets and available liquidity

Net financial assets are calculated as the difference between cash, cash equivalents and securities classed as operating assets (subsequently referred to as liquid funds), and non-current and current financial debt (subsequently referred to as gross financial debt). As of September 30, 2025, the group had liquid funds of €5.7 billion which, after deducting gross financial debt of €0.9 billion, results in net financial assets of €4.9 billion. Mainly as the result of positive effects from free cash flow (€0.8 billion), net financial assets were above the prior-year level (September 30, 2024: €4.4 billion).

A €0.6 billion bond was repaid on maturity in February 2025.

The group’s available liquidity was €6.8 billion as of September 30, 2025. It comprised liquid funds of €5.7 billion and undrawn, committed credit lines of €1.1 billion. Consequently, there is enough scope to cover debt maturities. The gross financial debt repayable in fiscal year 2025 / 2026 amounts to €0.4 billion.

The financing and liquidity of the group were secured at all times in the reporting year.

Rating

We have issuer ratings from the rating agencies Standard & Poor’s and Moody’s. Our ratings are currently below investment grade.

Analysis of the cash flows of the group

The liquid funds taken into account in the statement of cash flows in the table headed “Key figures of cash flows” correspond in principle to the “Cash and cash equivalents” item in the statement of financial position. As of September 30, 2024, the liquid funds also included cash and cash equivalents of the former thyssenkrupp Electrical Steel India disposal group.

Operating cash flows

Operating cash flows in the reporting year were positive and higher year-on-year, increasing by €331 million to €1,684 million. The main reason for this development was the increase – by €196 million to €842 million – in net income before depreciation, amortization and impairment of non-current assets, deferred tax expense, the income from investments accounted for using the equity method (net of dividends received), the non-cash income of €902 million from the first-time measurement at fair value of the ordinary shares from the Elevator investment, and the (gain)/loss on disposal of non-current assets. An additional positive effect of €157 million came from the improved release of funds in net working capital, mainly due to a large advance payment received from a customer in December 2024 for the addition of four submarines in a substantial extension of an order in the Marine Systems segment.

Cash flows from investing activities

The decrease in the negative cash flows from investing activities, by €278 million to €851 million, resulted mainly from the significant increase in cash inflows from disposals, with €452 million due to the sale of thyssenkrupp Electrical Steel India in the 2nd quarter of the reporting year.

Free cash flow

In the reporting year, free cash flow was positive at €833 million, a significant increase of €608 million compared with the prior year. Free cash flow before M&A, i.e., the cash inflow from operating activities excluding cash inflows and outflows from significant portfolio measures, was also positive at €363 million – €253 million higher than the prior-year figure.

Cash flows from financing activities

Compared with the prior year, cash flows from financing activities improved overall by €706 million to €(934) million, mainly as the result of lower cash outflows of €900 million for the repayment of bonds. This was partly offset in particular by the cash outflow in September 2025 in connection with the reimbursement to EP Group of the purchase price for the 20% interest it had acquired in the steel activities of thyssenkrupp July 2024, following the mutual agreement to end the negotiations on a possible 50 / 50 joint venture.

Analysis of the assets of the group

Total non-current assets

As of September 30, 2025, total non-current assets amounted to €9,343 million, which was significantly higher than in the prior year. The main reason for the increase was the first-time recognition of the ordinary shares from the Elevator investment as equity instruments measured at fair value, contributing €998 million to other financial assets as of September 30, 2025. An additional positive effect came from recognizing accrued interest of €94 million on the interest-free loan in connection with the Elevator investment. The corresponding reduction of €96 million in investments accounted for using the equity method was mainly due to the aforementioned change from accounting for the ordinary shares from the Elevator investment using the equity method to measurement at fair value. This was also partly offset by the decrease in property, plant and equipment (inclusive of investment property), by €104 million to €4,299 million, which resulted mainly from depreciation/amortization and impairment losses that were higher than investments. In the reporting year, impairment losses of €747 million were recognized on property, plant and equipment (inclusive of investment property), €597 million of which related to the Steel Europe segment, €67 million to the Automotive Technology segment and €33 million to the Materials Services segment. Impairment losses of €49 million were also recognized on corporate assets.

Total current assets

Total current assets of €19,542 million were significantly lower by €1,376 million than in the prior year. Of the decline in inventories contained therein, by €354 million to €6,930 million, €332 million mainly concerned the materials businesses in the Steel Europe segment and resulted from the significant inventory cuts made in the reporting period. The equally significant decrease in trade accounts receivable, by €307 million to €3,929 million, primarily related to customer payments received, reduced advance payment requirements (as a component of trade accounts receivable) and volume- and price-induced decreases due to lower sales. The decline in other non-financial assets, by €349 million to €1,526 million, resulted in particular from lower operational advance payments of €397 million – mainly for inventories – and from lower claims on the public sector in connection with the construction of the direct reduction plant in the Steel Europe segment. The overall decrease in cash and cash equivalents, by €142 million to €5,725 million, mainly related to the redemption of a €600 million bond on maturity in February 2025 and the reimbursement to EP Group of the purchase price for the 20% interest it had acquired in the steel activities of thyssenkrupp in July 2024, following the mutual agreement to end the negotiations on a possible 50 / 50 joint venture. This was partly offset by the significantly positive free cash flow of €833 million in the reporting year, which included a large advance payment received from a customer in December 2024 for the addition of four submarines in a substantial extension of an order in the Marine Systems segment and the cash inflow from the sale of thyssenkrupp Electrical Steel India. Cash and cash equivalents of €547 million in connection with the aforementioned advance payment received from a customer in the Marine Systems segment were subject to a restriction as of September 30, 2025. The full reduction of €134 million in assets held for sale was due to the completed sale of thyssenkrupp Electrical Steel India in the 2nd quarter of the reporting year.

Total equity

The increase of €202 million in total equity compared with September 30, 2024, to €10,560 million, was mainly due to the net income in the reporting period and to the gains before tax of €285 million from the remeasurement of pensions and similar obligations recognized in cumulative other comprehensive income as a result of higher pension discount rates. This was partly offset by losses from currency translation and from cash flow hedges (including losses from basis adjustments) recognized in cumulative other comprehensive income and by the dividend payment of €93 million from thyssenkrupp AG.

Total non-current liabilities

Total non-current liabilities fell year-on-year by €396 million to €6,728 million. The main causes of this were a decrease in provisions for pensions and similar obligations, by €463 million to €5,298 million, as a result of higher pension discount rates and the reclassification to current financial debt of a debenture bond of €89 million that matures in January 2026. This was offset in part by an increase in deferred tax liabilities, by €235 million to €263 million, resulting especially from the fact that, as was the case as of September 30, 2024, a substantial amount could no longer be netted against deferred tax assets. There was no corresponding increase in deferred tax assets because these were impaired.

Total current liabilities

Compared with September 30, 2024, total current liabilities fell by €254 million to €11,597 million. One main reason for this was the significant decline in current financial debt, by €466 million to €356 million, especially due to the redemption of a €600 million bond on maturity in February 2025. This was partly offset to a small extent by the aforementioned reclassification of a debenture bond. The additional decrease in other financial liabilities, by €273 million to €651 million, was mainly in connection with the sale of the thyssenkrupp mining business in fiscal year 2021 / 2022 and related to lower claims by the purchaser as a result of the retrospective legal transfer of a construction contract to the purchaser in March 2025. A further reducing effect came from the September 2025 reimbursement to EP Group of the purchase price for the 20% interest it had acquired in the steel activities of thyssenkrupp July 2024, following the mutual agreement to end the negotiations on a possible 50 / 50 joint venture. In addition, the overall decrease in other non-financial liabilities, by €244 million to €1,344 million, was caused mainly by reductions of €76 million in personnel-related liabilities and €71 million in liabilities in connection with sales taxes. The decrease in other provisions, by €64 million to €1,178 million, primarily related to the utilization and reversal of provisions in connection with the ongoing implementation of restructuring measures; this was offset in part by increases due to recently initiated restructuring measures. The entire decrease of €34 million in liabilities associated with assets held for sale was due to the completed sale of thyssenkrupp Electrical Steel India in the Steel Europe segment in the 2nd quarter of the reporting year. Alongside higher trade accounts payable, offsetting increases in total current liabilities resulted especially from the rise in contract liabilities, by €671 million to €3,405 million, mainly due to an advance payment received from a customer in connection with the addition of four submarines in a substantial extension of an order in the Marine Systems segment.

Off-balance-sheet financing instruments

Our off-balance-sheet financing instruments also include the non-recourse factoring of receivables from ordinary business activities, which the group sold in the amount of €0.6 billion as of the reporting date (prior year: €0.6 billion). Continuing involvement exists for a portion of these receivables with a carrying amount of €0.4 billion (prior year: €0.4 billion). For details, see Note 09 (Trade accounts receivable). Should financing instruments of this kind no longer be available in the future, we have adequate liquid funds and available credit lines.

thyssenkrupp Value Added (tkVA)

In the reporting year, the tkVA for the thyssenkrupp group was significantly higher than in the prior year but remained negative. This improvement resulted mainly from the lower impairment losses at Steel Europe and the disposal gain for thyssenkrupp Electrical Steel India. Thanks to the increase in earnings, Marine Systems generated a positive value added. Although Decarbon Technologies, Materials Services and Steel Europe continued to report negative value added, they were able to improve.

For the aforementioned reasons, the group’s ROCE was 0.7%.

More information on the importance of tkVA, ROCE and EBIT for the management of the group is contained in the subsection headed “Management of the group” in the section “Fundamental information about the group.”