November 6, 2018 / 12:50 PM / 9 months ago

Thyssenkrupp's Walker in line for top job at elevators business

FRANKFURT (Reuters) - Thyssenkrupp (TKAG.DE) is likely to appoint company veteran Peter Walker to succeed Andreas Schierenbeck as the chief executive of its elevators unit, two people familiar with the matter told Reuters on Tuesday.

FILE PHOTO: A logo of ThyssenKrupp AG is pictured outside the ThyssenKrupp headquarters in Essen, November 23, 2017. REUTERS/Thilo Schmuelgen/File Photo

No official decision has been made and other candidates could still be considered for the position, the people added. Sources on Monday said that Schierenbeck would be replaced.

The likely move underscores efforts by new group CEO Guido Kerkhoff to improve performance at all of Thyssenkrupp’s divisions after announcing an ambitious plan to spin off the conglomerate’s capital goods businesses over the next 12-18 months.

The unit management reshuffle is the second under Kerkhoff, who has so far failed to excite markets over the spin-off plans, under which its elevator, car parts and plant engineering divisions will be separately listed as Thyssenkrupp Industrials.

Walker, who grew up in Sydney, joined Thyssenkrupp in 1995 and became head of the elevator unit’s Asia Pacific business before joining the division’s board as chief operating officer in February.

Albeit the group’s cash cow, Elevator Technology has underperformed rivals including Kone (KNEBV.HE) and, having lowered its outlook twice this year already, could disappoint when the group presents full-year results on Nov. 21.

“Schierenbeck’s sacking is a clear move aimed at preempting investor pressure ahead of full-year results, where elevators might show weakness,” one of the sources said, pointing to rival Kone, which cut its outlook last month.

Thyssenkrupp declined to comment. Schierenbeck and Walker could not immediately be reached for comment.

According to Refinitiv estimates, Thyssenkrupp’s full-year adjusted earnings before interest and tax (EBIT) are expected to come in at 1.73 billion euros ($1.97 billion), below the group’s 1.8 billion forecast.

Elevator’s fourth-quarter adjusted EBIT is seen down 4.6 percent while operating margins at Thyssenkrupp’s automotive business are also expected to contract to 4.5 percent this year, from 5 percent in 2017.

Thyssenkrupp's shares have fallen 13.5 percent since the announcement of the spin-off in late September, underperforming both German blue-chips .GDAXI and European industrial stocks .SXNP.

Under the plan, Thyssenkrupp will keep the 50 percent stake in a planned joint venture with Tata Steel (TISC.NS) as well as shipbuilding and materials trading activities and be renamed Thyssenkrupp Materials.

Just how undervalued Thyssenkrupp is as a whole is indicated by the group’s current enterprise value of 15.7 billion euros, about the same as its elevator business if viewed on a standalone basis.

Editing by Maria Sheahan and Keith Weir

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