thyssenkrupp (AO) | Buy | Materials Services rebrands as tk accelis ahead of likely minority spin-off

Research evidence excerpt

thyssenkrupp (AO) | Buy | Materials Services rebrands as tk accelis ahead of likely minority spin-off

nouncement reinforces the group's intention to prepare the business for greater independence.

Management explicitly refers to the objective of achieving "capital market readiness", which we view as further evidence that

thyssenkrupp is preparing a minority spin-off of tk accelis later this year, potentially around October.

The process would mirror the approach adopted for TKMS, where thyssenkrupp initiated a partial separation of the business last

year. Such a transaction could help unlock value by highlighting the distinct profile of a business increasingly exposed to services,

digitalisation and supply chain management rather than pure steel distribution. We also see parallels with Klöckner & Co's

strategy over recent years.

The company has progressively increased its exposure to processing, digital platforms and value-added services in order to

reduce earnings cyclicality and improve margins. tk accelis appears to be following a similar path, with a growing emphasis on

higher-margin service activities.

EUR2.1bn valuation in our SOTP

As a reminder, the division generated EUR11.4bn of sales in FY2024/25 (c.60% Europe, c.40% North America) and reported EBIT of

EUR132m. Over the past decade, the business has delivered c.1% average annual organic growth, while maintaining an average

EBIT margin close to 2% and a solid track record of recurring cash flow generation.

Continued progress towards a more service-oriented business model, together with potential capital markets transactions, could

provide additional support for a re-rating over time.

In our sum-of-the-parts valuation, we currently value tk accelis at EUR2.1bn, based on a 6.5x NTM EV/EBITDA multiple.