FRANKFURT (Reuters) - German industrial group ThyssenKrupp (TKAG.DE) has cut costs by more than 1 billion euros ($1.12 billion) this year, beating its target, and plans to press ahead with renewed savings efforts, its chief financial officer told a German newspaper.
The company’s “Impact” efficiency program had aimed for 850 million euros in savings in the current fiscal year ending Sept. 30.
“We had also announced 850 million euros last year and reached 1 billion in the end; I don’t think we’ll do less than that this year,” Guido Kerkhoff told Boersen Zeitung newspaper.
ThyssenKrupp will continue to work on efficiency improvements in the years ahead, he said. “There is still a lot we could improve. We’ve just gotten started.”
These savings are expected to make a considerable contribution to earnings growth in the future, helping to boost group earnings before interest and taxes (EBIT) to well above 2 billion euros, he said, declining to give a firm timeline for the improvement.
The company has said it wants to reach an annual EBIT of at least 2 billion euros in the coming years and aims to achieve this goal as quickly as possible.
In its third quarter results published on Aug. 13, ThyssenKrupp stuck to its target of adjusted EBIT of 1.6-1.7 billion euros for the year to end-September, up from 1.33 billion a year earlier, although it also said it would probably reach the upper end of the range.
Kerkhoff played down the impact of slackening growth in China, where ThyssenKrupp makes about 6 percent of sales.
The group’s Elevator Technology business was stable with a share of around 10 percent in China, where 60 percent of the world’s elevators are installed.
“If this market has a stable level, you can’t really say that’s a bad thing,” he said.
The company was also working to expand its business supplying parts to Chinese car makers and the wind energy sector.
In Brazil, ThyssenKrupp was still dealing with the impact of sharply falling steel prices on its business. The company has been trying to sell its Brazilian steel mill, known as CSA, which has struggled with losses due to cost overruns and operational challenges.
“We will decide on a sale based on valuation considerations and will wait for the right moment,” Kerkhoff said.
“However, given the current price of steel in the Brazilian market, no one is thinking about any value-creating transactions,” he said.
Reporting by Jonathan Gould; Editing by Mark Trevelyan