Thyssenkrupp’s Twin Fortunes: Record Marine Backlog vs Stalling Steel Sale

Thyssenkrupp's naval arm hits €20.6bn orders, but steel/auto drag revenue down. Canada’s €10bn submarine bid could boost momentum amid losses and portfolio overhaul.

Thyssenkrupp is running a race on two tracks. One track — its naval shipbuilding arm — is hurtling forward with a record €20.6bn order book, while the other — the steel and automotive operations — is struggling to keep pace. The divergence captures the essence of a group that is simultaneously shrinking its industrial footprint and betting big on a leaner, more focused future as a financial holding.

Canada’s long-awaited submarine decision could be the next catalyst. TKMS chief Oliver Burkhard expects a verdict between May and June 2026, with Thyssenkrupp pitted against South Korea’s Hanwha Ocean for a contract worth over €10bn on up to twelve boats. A win would supercharge an already impressive order intake: the marine unit’s new business surged 32% in the latest quarter to €10.6bn, fuelled by the expansion of Norway’s order for two additional 212CD submarines.

Yet for all the momentum below the waves, the rest of the conglomerate is battling headwinds. Second-quarter revenue slipped from €8.6bn to €8.4bn, as Steel Europe suffered from lower prices and Automotive Technology faced weaker customer call-offs. Thyssenkrupp trimmed its full-year sales guidance accordingly. The bottom line also took a hit: the group posted a net loss of €11mn, a stark reversal from the €167mn profit a year earlier, when a €270mn after-tax gain from the sale of Electrical Steel India provided a boost.

Despite the revenue squeeze, operational performance improved. Adjusted EBIT rose, supported by the APEX efficiency programme. Free cash flow before M&A narrowed to minus €327mn from minus €569mn a year ago — still negative, but the bleeding is slowing. Management confirmed its targets for adjusted EBIT, free cash flow before M&A and net income, though it still expects the cash outflow to reach as much as €600mn for the full year, driven by restructuring costs.

The balance sheet gives the holding strategy room to manoeuvre. Equity stood at €10.3bn as of 31 March 2026, representing an equity ratio of 36%. Available liquidity from cash and committed credit lines totalled €4.6bn, while net financial assets came in at €2.8bn.

Portfolio clean-up is proceeding on several fronts. The sale of Automation Engineering to Agile Robots has been completed; the business now operates as Krause Automation. The EU Commission has approved the disposal of Thyssenkrupp’s stake in Hüttenwerke Krupp Mannesmann (HKM) to Salzgitter AG, with closure scheduled for 1 June 2026. Crucially, the supply agreement between HKM and Thyssenkrupp Steel will end in late 2028 — four years earlier than originally planned — accelerating the steel unit’s shift away from the joint venture.

The biggest piece, however, remains stuck. Negotiations with India’s Jindal Steel over the sale of the steel division have been on ice since early May, after the EU announced new steel tariffs in April. CEO Miguel López has made no secret of his ultimate ambition: transforming the Essen-based conglomerate into a pure financial holding. “We will continue to focus on the consistent transformation of Thyssenkrupp into a financial holding,” he said.

The share price reflects the tension between the two stories. On Tuesday the stock closed at €9.94, down 10.77% on the week but still up 18.45% over the past month. With the Canadian submarine decision imminent and the Jindal talks in limbo, the next directional move will likely depend on which of those two tracks gains the upper hand.