Thyssenkrupp's Strategic Crossroads: Divergent Paths for Steel and Hydrogen

Thyssenkrupp's hydrogen unit Nucera forecasts a major loss but secures a landmark electrolyzer order, as the parent firm grapples with a stalled steel sale and mixed financial results.

On a single day, Thyssenkrupp's hydrogen subsidiary, Nucera, managed to embody the conglomerate's current paradox, issuing a profit warning while simultaneously securing a landmark contract. This contradiction highlights the broader challenges facing the industrial giant as it navigates multiple strategic fronts.

Contrasting Fortunes at Nucera

A significant downward revision now shapes Nucera's outlook for the current fiscal year. The company anticipates an operating loss between €30 million and €80 million, a stark shift from its previous forecast which, at best, projected breaking even. This adjustment stems from technical modifications required for already-delivered modules and a customer's decision to halt a pilot plant in the United States. Consequently, revenue in the core hydrogen segment is collapsing, expected to plummet to a range of €120 million to €170 million, down dramatically from €459 million the previous year.

Yet, in a contrasting development, Nucera has landed one of the largest single orders in its history. The company will supply 300 megawatts of electrolyzers for the "Onuba" project in Andalusia. This initiative, slated to produce approximately 45,000 tons of green hydrogen annually, is considered the largest of its kind in Southern Europe. Following this win, Nucera raised its order intake forecast for the upcoming business year to between €550 million and €850 million. Investor enthusiasm remained muted, however, as the bulk of revenue from this deal will not be realized until 2026/2027.

Parallel Challenges at the Group Level

The parent company faces its own set of concurrent challenges. The planned sale of its steel division to India's Jindal Steel International has encountered obstacles. According to Bloomberg reports, senior executives within Thyssenkrupp are growing increasingly doubtful about the transaction's success. A central point of contention is the extent of capital Jindal can provide to sustain the steel unit through the persistent downturn in the European steel market.

Providing a measure of stability is the group's defense subsidiary, Thyssenkrupp Marine Systems (TKMS). It boasts a substantial order backlog valued at €18.7 billion, which includes contracts for F127 frigates and twelve Class 212CD submarines.

The group's recent quarterly figures reflect this divided reality. While revenue declined by 8% to €7.2 billion, adjusted EBIT improved by 10%, reaching €211 million. Nonetheless, the bottom line showed a net loss of €334 million. This was primarily driven by restructuring costs amounting to €401 million within the steel division.

A Summer of Critical Decisions

Thyssenkrupp's share price currently trades approximately 40% below its 52-week high and lingers just above its annual low. Market analysts suggest a meaningful revaluation is unlikely until clarity emerges on three pivotal issues: the fate of the Jindal deal, the future strategy for the Materials Services division, and the planned transfer of HKM to Salzgitter scheduled for June 1st.

The company is set to release its half-year report on May 12th. This update is expected to provide at least some direction on the steel division's trajectory and whether the planned spin-off of Materials Services in autumn 2026 remains on schedule. Until these strategic uncertainties are resolved, the conglomerate remains a story of conflicting signals and open battles on multiple fronts.