Amid persistent challenges in its core industrial operations, Thyssenkrupp’s naval systems subsidiary, Thyssenkrupp Marine Systems (TKMS), is solidifying its role as the Essen-based conglomerate’s most reliable profit pillar. Boasting a full order book, multi-billion euro defense contracts, and a strategically advantageous competitive stance, the division’s outlook presents a stark contrast to the struggles seen elsewhere in the group.
TKMS: The Sole Contender for Major Defense Projects
The naval unit is positioned for an exceptional phase of contract awards. TKMS enters the fiscal year with a robust order backlog valued at €18.7 billion. A significant development occurred in March when the German budget committee approved approximately €240 million for four MEKO A-200 frigates, with the first delivery scheduled for December 2029.
Even more substantial is the F127 frigate program, with an estimated volume of €26.2 billion, where TKMS now stands as the sole remaining bidder. The budget committee has slated a vote on funding for this project for June 24, 2026. Furthermore, TKMS is the only contender left for a major Indian submarine contract involving six Class 214 vessels, worth around €7 billion, following the withdrawal of a Spanish competitor.
However, a strategic risk looms. Rheinmetall is currently evaluating whether it can assume the role of general contractor for the separate F126 frigate program. A successful takeover by Rheinmetall could significantly reduce the immediate need for TKMS’s MEKO bridge solution. While the German Federal Ministry of Defence states the two programs are not mutually exclusive, an assessment phase by the procurement office is ongoing until the end of April.
Steady Start to the Year Despite Revenue Dip
For the first quarter of the 2025/26 fiscal year, Thyssenkrupp’s group revenue declined by approximately 8% to €7.2 billion. Despite this, adjusted operating profit (EBIT) increased by 10% to €211 million, indicating that efficiency measures are taking effect. Based on this performance, the company reaffirmed its full-year guidance, projecting adjusted EBIT to land between €500 million and €900 million.
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The next key milestone will be the release of the half-year report on May 12, 2026.
Restructuring and Steel Sector Headwinds Continue
Parallel to the naval division’s strength, the group’s broader restructuring is advancing. As of April 1, 2026, Thyssenkrupp finalized the sale of its Business Unit Automation Engineering to Munich-based Agile Robots SE. The unit will now operate under the name “Krause Automation.”
Conditions in the steel business remain difficult. The Isbergues site of subsidiary Thyssenkrupp Electrical Steel, which has been running at half capacity since January, will be completely shut down from June through September. The company aims to secure roughly 1,200 jobs associated with the site. Some relief may come from Brussels: In January, the European Parliament voted in favor of a proposal to reduce import quotas by 47% and double the safeguard tariff to 50%. Trilogue negotiations with the EU Council are underway, with the new rules intended to take effect on July 1, 2026.
By the time of the half-year report on May 12, two critical questions should gain clarity: whether the EU’s trade protection measures will be implemented swiftly and robustly enough to provide relief for electrical steel sites, and whether the months-long discussions with Indian steelmaker Jindal Steel will conclude successfully or, as recent insider reports have hinted, end in failure.
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