ThyssenKrupp cuts costs by 1 billion euros

German industrial group ThyssenKrupp has cut costs by more than € 1 billion ($ 1.12 billion) this year, surpassing its target, and plans to move in that direction, its CFO said.

The company's efficiency improvement program was aimed at achieving € 850 million in savings in the current fiscal year ending 30 September. “We announced a cost cut of 850 million euros last year and reached 1 billion, and I do not think we will achieve less in the future,” Guido Kerkhoff told the Boersen Zeitung newspaper. He said ThyssenKrupp will continue to work to improve efficiency in the coming years. "There are still many costs that we could reduce."

These savings are expected to make a significant contribution to future revenue growth, helping to boost the group's earnings before interest and tax (EBIT), which has already grown. The company said it wants to achieve an annual EBIT of at least € 2 billion in the coming years and aims to achieve that target as quickly as possible.

In its third quarter results, released on 13 August, ThyssenKrupp stuck to its adjusted EBIT target of € 1.6-1.7 billion for the year at the end of September, up from € 1.33 billion a year earlier, although the company also announced which will probably be able to reach the upper range. Kerkhoff says the impact of slowing growth in China for ThyssenKrupp is only about 6 percent of sales.

The Elevator Technology Group's business has been stable, with a share of about 10 percent in China, where 60 percent of the world's elevators are installed. “If this market is stable, then we can really say that this is not a bad thing,” he said. The company is also working to expand business supply of components for Chinese automakers and wind power.

In Brazil, ThyssenKrupp is still dealing with the fallout in steel prices in its business. The company is trying to sell its Brazilian steel mill, known as CSA, which is struggling with losses due to cost overruns and operational tasks.