Targets

Financial targets

In a persistently challenging market environment, we aim to ensure that all businesses significantly increase their operational performance and generate a sustained positive value and cash flow contribution for thyssenkrupp. In particular, we are seeking to ensure that the businesses achieve their medium-term financial targets.

The medium-term adjusted EBIT margin targets for the individual segments are as follows:

■  Automotive Technology¹⁾ – Adjusted EBIT margin of 7% to 8%

■  Decarbon Technologies – Adjusted EBIT margin of more than 5%

■  Materials Services – Adjusted EBIT margin of 2% to 3%

■  Marine Systems – Adjusted EBIT margin of 6% to 7%

In the course of developing the business plan for the Steel Europe segment, the medium-term adjusted EBIT margin target (6% to 7%) is still subject to revision.

On the basis of the group’s current composition, we are adhering to the overall medium-term adjusted targets as previously communicated: an adjusted EBIT margin of 4% to 6% and, as a result, a positive free cash flow before M&A. In addition, ensuring a reliable dividend payment has the utmost priority.

Further information on our segments and the respective measures to achieve the targets can be found in the “Segment review” in the report on the economic position.

More information on our key performance indicators can be found in “Management of the group” in this section of the report; details on the forecast for the current fiscal year are provided in the forecast report.

Sustainability and non-financial targets

Sustainability is a core component of thyssenkrupp’s mission statement and an integral part of our corporate strategy. Our aim is to offer innovative products, technologies and services worldwide that contribute to the sustainable success of our customers. Strategic sustainability management is coordinated by the Corporate Function Sustainability. Together with other corporate functions, service lines and segments, stakeholder requirements are continuously identified and targets and measures are derived to improve our sustainability performance. Sustainability activities at thyssenkrupp are governed by the Sustainability Committee, which consists of the Executive Board of the group, the CEOs of the segments, the heads of the corporate functions and internal experts. The Sustainability Committee decides on the ongoing development of existing measures and the implementation of innovative measures. It also takes decisions on the non-financial targets (NFT). The responsibility for implementing the measures lies with the corporate functions, service lines and segments, which regularly report on progress.

Detailed information on our sustainability activities in the areas of climate, energy and environment, purchasing, employees, occupational health and safety, social responsibility and compliance can be found in the relevant sections of the Annual Report and on our website. In addition, in the reporting year, thyssenkrupp continued its preparations for future sustainability reporting in accordance with the Corporate Sustainability Reporting Directive (CSRD). This new legislation is being introduced stepwise and will become mandatory for fiscal years starting from January 1, 2024. It greatly expands the scope and quality of the reportable disclosures. In preparation for the first sustainability reporting for thyssenkrupp AG and its group companies for fiscal year 2024 / 2025 in accordance with the CSRD, a double materiality analysis was performed. This requires the identification and assessment of the actual and potential, negative and positive impacts of our business activities on people and the environment, as well as the identification and assessment of the risks and opportunities of sustainability topics in terms of their economic relevance to thyssenkrupp. A topic is subject to mandatory reporting if it is assessed as being material from one or both perspectives. In the context of other CSRD projects, we analyzed the new requirements and pushed ahead with implementation to enable us to fulfill our future reporting obligations. Information about the preparations for CSRD reporting made by our own workforce can be found in the “Employees” section.

The Sustainability Committee has set NFTs in the areas of climate, energy and environment, technology and innovation, employees, and purchasing. The annual targets are defined in consultation with the segments, which are responsible for achieving the targets and driving forward their implementation together with the businesses. Since fiscal year 2020 / 2021, we have been integrating sustainability activities gradually into the long-term compensation of the Executive Board and top-level management through the NFTs. In this first fiscal year, this has already been implemented in respect of the proportion of women in leadership positions and the accident frequency rate. To reflect our climate targets, since fiscal year 2021 / 2022, CO₂ emissions intensity, calculated as the total of our direct emissions (Scope 1) and emissions from purchased energy (Scope 2) relative to sales, excluding the Steel Europe segment, has been integrated into long-term compensation. For the Steel Europe segment, the volume of net CO₂-reduced steel has been integrated into long-term compensation. The volume of net CO₂-reduced steel is calculated from the reduced carbon input at the Duisburg site and the resulting CO₂ savings, allocated over production volume. For fiscal year 2022 / 2023, we integrated the improvement in our employee Net Promoter Score (eNPS) into long-term compensation for the first time and the increase in the proportion of women in leadership positions was once again included. The thyssenkrupp eNPS is part of the annual Employee Pulse Check survey and indicates the willingness of employees to recommend thyssenkrupp as an employer. Starting in fiscal year 2023 / 2024, we have included the High Risk Supplier Reduction (HSR) as a key indicator to implement the annual reduction in the proportion of suppliers still classified as high risk – even after any risk-mitigating measures – relative to the total population of potentially high-risk suppliers in long-term compensation. Risk categorization is based on the risk analysis required by the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG). In this way, we aim to achieve a general reduction in the risk of violating the legal provisions of this legislation in respect of environmental protection, human rights and occupational safety within our portfolio of suppliers. Further, if other risks are identified in the annual and ad hoc risk analysis, these must be mitigated as soon as possible by prompt measures that are consistent with the provisions of the legislation. Further information about the performance our risk analyses can be found under “Sustainability in supplier management” in the “Purchasing” section. For the current 2024 / 2025 fiscal year, due to its significance, we have again integrated the continuous improvement of the accident frequency rate into long-term compensation. (Further details can be found in the compensation report.) All established NFTs are aligned with the aim of continuous improvement and are constantly being adjusted and extended in parallel with our ongoing strategic development.

We can report as follows on the achievement of the annual targets for our NFTs: We significantly exceeded the energy efficiency target in fiscal year 2023 / 2024. The emissions intensity target for the group excluding the Steel Europe segment was to reduce emissions intensity by 1 ton CO₂ per million € sales to 35.5 tons CO₂ per million € sales in the reporting period. This target was exceeded, with an emissions intensity of 31.1 tons CO₂ per million € sales. The target for the Steel Segment in the reporting year was production of 150,000 tons net CO₂-reduced steel; this target was exceeded with a production volume of 205,000 tons. Adjusted R&D intensity increased slightly to 2.9% and was therefore within the company’s target range of around 3.0%. The proportion of women in leadership positions increased steadily and exceeded the target of 15%. The annual indicator of employee satisfaction (eNPS), based on willingness to recommend thyssenkrupp as an employer, did not match the prior-year level. The accident frequency rate was 2.4 and thus did not achieve the target set by thyssenkrupp. In respect of the HSR, the proportion of suppliers classified as high risk was reduced to 57.0%, an overall improvement of 29.9 percentage points that exceeded the target.

^{1) Without Automation Engineering and Springs & Stabilizers}

^{Source: Annual Report 2023/2024, p. 34-37}