Thyssenkrupp’s Summer of Disruption: Demerger Plans, EU Tariffs, and the Stock’s Overbought Signal

Orders surge 32% and EBIT jumps, but net loss persists. Planned spin-off of Materials Services and looming EU steel import quota cuts threaten the conglomerate's turnaround.

Thyssenkrupp is navigating an increasingly complex landscape as its operational recovery clashes head-on with the most radical restructuring push in its history. The industrial conglomerate has just posted second-quarter figures that show a sharp rebound in order intake and profitability, but the real drama is unfolding on two other fronts: a planned demerger of its largest division and a looming structural shock from EU steel import tariffs.

The second quarter of fiscal 2025/2026 delivered some respite. Group orders surged 32 percent year-on-year to €10.6 billion, though revenue slipped marginally to €8.4 billion. Adjusted EBIT jumped to €198 million, compared with just €19 million in the prior-year period, driven by operating improvements and the APEX performance program. Yet the bottom line remained in the red, with a net loss of €11 million and earnings per share flat at €0.00 — a year earlier, a one-off gain from the sale of tk Electrical Steel India had pushed the figure into positive territory. Management has kept its full-year adjusted EBIT target at €500 million to €900 million but trimmed the revenue outlook: organic sales growth is now expected at minus 3 to 0 percent, down from the previous minus 2 to plus 1 percent, citing delayed revenue recognition at Decarbon Technologies and a shift in product mix at Steel Europe.

The bigger story, however, is the plan to spin off Materials Services, a division that generated €11.4 billion in sales last year and employs more than 15,000 people. According to Reuters, Thyssenkrupp is weighing an extraordinary general meeting in late July or early August, with invitations possibly going out in June. The supervisory board discussed the matter on May 20 and will meet again in June. Three people familiar with the matter said options include a demerger, an initial public offering, or a sale, with a Kommanditgesellschaft auf Aktien (KGaA) structure under serious consideration. That legal form would allow Thyssenkrupp to retain operational control even with a minority stake — but it has already drawn fierce opposition from IG Metall, which fears workers will lose codetermination rights.

The industrial logic is clear. Materials Services would become the largest carve-out in the group’s history, following the IPO of hydrogen subsidiary Nucera in 2023 and the spin-off of Thyssenkrupp Marine Systems in October 2025. Yet the pace of CEO Miguel López’s restructuring agenda is alarming some insiders, who described the approach to Reuters as increasingly radical. The labor clash is not the only headwind: from July 1, 2026, the European Union will slash its tariff-free steel import quotas to 18.3 million tonnes per year, a 47 percent cut from 2024 levels. Companies that exceed the quota will face a 50 percent tariff, double the current 25 percent — a structural blow to the European steel market and to Thyssenkrupp’s Steel Europe unit.

Meanwhile, the decentralization of the group continues apace. On May 1, Thyssenkrupp Polysius hived off its decarbonization technologies into a newly created entity, Calvion GmbH, a roughly 40-employee company focused on oxyfuel technology and direct air capture. Each spin-off adds complexity to a conglomerate that is trying to prove it can unlock value through separation, even as the core steel business battles weak demand from automotive and industrial customers.

Investors have so far rewarded the narrative. The stock closed Thursday at €11.43, up 1.55 percent on the day and 30.33 percent over the past 30 sessions. It now trades 22.93 percent above its 50-day moving average, and the relative strength index sits at 68.5 — close to overbought territory. The technical momentum leaves little room for disappointment, especially given the persistent cash drain. The group reaffirmed its expectation that free cash flow before M&A will remain negative for the full year, despite the progress on earnings. With net financial assets of €2.8 billion and an equity ratio of 36 percent, the balance sheet provides a cushion, but the transformation is burning cash faster than the market would like.

The upcoming Baader The Finest CEElection Equity Investor Conference in Warsaw on May 27, 2026, is unlikely to produce new financial targets, but it will test management’s ability to sell the restructuring story to a skeptical audience. The real decision point arrives in July or August, when shareholders may be asked to vote on the future of Materials Services. For now, the rally rests on a bet that operational improvement will eventually translate into sustainable free cash flow and a cleaner net profit profile. Should the summer demerger vote pass, the next challenge will be to execute the separation without tripping over labor resistance, tariff headwinds, or the sheer weight of the largest spin-off the company has ever attempted.