Thyssenkrupp's Naval Windfall Meets Hydrogen Expansion as Investors Weigh the Group's Overhaul

Bundestag to vote on roughly €12 billion frigate program for Thyssenkrupp's naval unit, as the group forecasts a fiscal 2025/26 net loss.

A roughly €12 billion frigate program is headed for a vote in the Bundestag, giving Thyssenkrupp's naval division a potential landmark win even as the Essen-based conglomerate works through a year of restructuring across its other businesses.

The order, which would see the first vessel delivered around the end of 2029, follows the early termination of the existing F126 project. That pivot has already drawn legal fire: Dutch shipbuilder Damen, through its attorney Peter Gauweiler, is demanding about €4.7 billion from the German government for work already agreed. Roughly €1.95 billion of that sum would be passed on to Rheinmetall. The opposing side has also criticized the absence of a regular tender for the reassignment to TKMS.

A Defense Boost Against a Challenging Fiscal Year

For the group, the frigate contract represents a substantial strengthening of its order book in the defense sector. The broader financial picture, however, remains demanding. Management expects a net loss of €400 million to €700 million for fiscal 2025/26, with adjusted EBIT projected between €600 million and €900 million. Free cash flow before mergers and acquisitions is likely to come in negative, at minus €600 million to minus €300 million. On top of that, unfunded pension obligations of €5.06 billion continue to weigh on the balance sheet.

The stock closed yesterday at €13.80 on Xetra, up 48% since the start of the year. That leaves it 13% below its 52-week high of €15.86.

Analysts are split on how to value the transformation. Deutsche Bank rates the shares a buy with an €18 price target, while JPMorgan takes a neutral stance and sets its target at €15.

Nucera Builds Out European Manufacturing

Fresh momentum is coming from elsewhere in the portfolio. Hydrogen and electrolysis subsidiary thyssenkrupp nucera signed a lease for a hall exceeding 7,500 square meters in Vila Nova de Gaia, Portugal. Construction of the company's first self-operated assembly center for alkaline electrolysis cells is slated to begin there in winter, with operations targeted for 2028. The investment runs between €10 million and €14 million and is backed by roughly €3.7 million in Portuguese subsidies.

The Portuguese move follows a sales success in Asia. On September 29, nucera secured a chlor-alkali order from Hongniu Lanzhou in the low double-digit million-euro range. The scope for the project in northwestern China covers licenses and engineering as well as procurement services, key components and commissioning support.

By building its own capacity, the subsidiary is reinforcing its operational base while the parent company pushes ahead with the realignment of its other divisions.

Steel Targets Reaffirmed, Stakeholder Moves in Motion

At its Capital Market Day, thyssenkrupp Steel Europe restated its medium-term financial goals for the European steel business. The segment is aiming for adjusted EBITDA of at least €1.2 billion and an adjusted EBITDA margin of at least 11%, alongside positive free cash flow. More than €800 million of the targeted earnings improvement is expected to come from internal savings and optimization measures.

There is operational activity in other business areas and holdings as well. Materials trading unit tk accelis will present its Processing and Materials units at the Aluminium 2026 trade fair in Düsseldorf, running from October 6 to 8.

In parallel, Reuters reported that Finnish elevator group Kone plans to sell the bulk of TK Elevator's European business. The move is intended to ease competition concerns tied to its planned takeover of the former Thyssenkrupp subsidiary. The sales process could kick off in November.

What's Next on the Calendar

The stock was trading at €13.70, a slight decline of 0.7% on the day, with a year-to-date gain of 47%.

Investors now have a series of fixed dates to watch. On October 14, management will present at an investor roadshow in Paris. The annual report for fiscal 2025/2026 is due on December 8, 2026.