Thyssenkrupp's €800M Net Loss Weighs on Restructuring-Driven Recovery Outlook

Thyssenkrupp AG is preparing for a challenging financial year as it forecasts a net loss of up to €800 million ($931 million) in 2026. The German industrial group cited significant restructuring costs, particularly in its steel division, as a major contributor to the anticipated shortfall. The company remains in the process of selling its steel unit to India's Jindal Steel International, a move aimed at stabilizing its financial position. Thyssenkrupp's CFO, Axel Hamann, emphasized that the restructuring initiatives are being implemented to lay the groundwork for long-term earnings improvements.

The forecast comes as Thyssenkrupp navigates a difficult economic environment, including weakened demand in the automotive sector and ongoing energy cost pressures due to the war in Ukraine. Europe's carmakers remain below pre-pandemic production levels, compounding the company's challenges. Additionally, the firm's free cash flow is expected to turn negative, with outflows related to restructuring and operational adjustments reaching as high as €600 million.

Restructuring efforts at the Steel Europe unit are a focal point of the financial strain. The division's management has confirmed that the planned workforce reduction and outsourcing of 40% of its labor force will incur costs in the "mid-three-figure million euro" range. Marie Jaroni, the steel unit's head, noted that these costs will ultimately result in reduced annual personnel expenses, supporting long-term profitability. Despite these initiatives, the restructuring process has delayed progress toward a leaner operational model.

Thyssenkrupp's financial outlook reflects the broader transformation it has been pursuing for years. Once a diversified industrial conglomerate, the company has shifted toward a holding company structure, highlighted by the recent successful listing of its TKMS naval engineering unit on the Frankfurt Stock Exchange. This strategic pivot under CEO Miguel López aims to streamline operations and focus on high-margin segments. However, the return to negative free cash flow undermines recent progress, as the company previously posted a positive €363 million in free cash flow for the fiscal year ending September 2025.

The steel restructuring is not the only headwind. Thyssenkrupp continues to wrestle with unpredictable cash flows from its Marine Systems unit, where prepayments and project timing heavily influence liquidity. This volatility makes it difficult to predict future cash generation, even as the company maintains a consistent dividend policy of €0.15 per share (https://www.bloomberg.com/news/articles/2025-12-09/thyssenkrupp-forecasts-loss-with-high-cash-burn-costs-ahead).

Investors are watching closely as Thyssenkrupp's restructuring efforts enter a critical phase. The company has not yet released an updated timeline for its transformation but remains in negotiations with Jindal Steel International regarding the potential acquisition of its steel unit (https://www.tradingview.com/news/reuters.com,2025:newsml_S0N3VW05F:0-thyssenkrupp-expects-deep-net-loss-in-2026-due-to-steel-restructuring-provisions/). A successful sale would provide much-needed capital and reduce the burden of ongoing restructuring costs.

Market analysts suggest the path to recovery will require sustained cost discipline and operational efficiency. While Thyssenkrupp's recent listing of TKMS is a positive step, the company must demonstrate consistent progress in its core operations to restore investor confidence. The elevated restructuring charges and weak automotive demand are expected to persist, making the 2026 financial year a test of management's ability to execute its strategic vision.