Nucera, Thyssenkrupp’s Hydrogen Venture, Flourishes Despite Capacity Challenges

In a remarkable showcase of financial prowess, Thyssenkrupp’s subsidiary, Nucera, dedicated to the world of hydrogen, exhibited commendable strides in the past quarter. Yet, as the company takes steps to foster growth, the challenge of capacity expansion persists, casting a shadow over its achievements.

In a press release issued on Monday, Nucera unveiled an impressive upsurge in earnings before interest and taxes (EBIT), surging from a previous four million euros to an impressive seven million euros in the third quarter of the 2022/23 fiscal year, culminating in September. The company orchestrated a near-doubling of sales, soaring from 99 million euros to an impressive 187 million euros in comparison to the previous year. The primary impetus behind this exponential advancement owes itself to the domain of alkaline water electrolysis, marking an essential stride in the advancement of sustainable energy solutions.

Having marked its debut on the stock exchange in July, Nucera foresees robust sales expansion throughout the ongoing fiscal year. However, as the enterprise navigates through the burgeoning demand, the concomitant expenses threaten to impinge upon the earnings before interest and taxes margin. This metric observed a decline to 3.7 percent in the third quarter from a prior 4.4 percent during the corresponding period of the antecedent year. This period also witnessed a significant augmentation in the workforce, escalating from 489 employees in September 2022 to an impressive tally of 628 by June of the current year.

A resolute confirmation of Nucera’s medium and long-term objectives reinforces the organizational commitment. The enterprise aspires to augment sales within the realm of alkaline water electrolysis, propelling them from their current stance to a notable range of 600 to 700 million euros, materializing in the 2023/24 fiscal year.

The successful initial public offering (IPO) orchestrated by ThyssenKrupp in July, while retaining a majority stake in Nucera, infused substantial financial resources into the enterprise. With the IPO amassing an impressive 605 million euros, more than 500 million euros flowed directly into Nucera’s coffers. In an official statement, Arno Pfannschmidt, the Chief Financial Officer, articulated, “The substantial influx of funds ensuing from the IPO augments our preparedness to undertake the systematic and expeditious realization of our subsequent growth strategies.”

With an unwavering commitment to expansion, Nucera delineates a trajectory characterized by escalated production facilities and an augmented workforce. Werner Ponikwar, the CEO, in a press conference with journalists, unveiled the enterprise’s plan for substantial global personnel expansion, an imperative requisite to attain the outlined growth objectives. This resolute approach resulted in a notable augmentation of the workforce, amplifying from 489 employees in September 2022 to a remarkable count of 628 by June of the ongoing year. The ambitious expansion strategy encompasses the establishment of additional locations, with India identified as a prospective site. Notably, Nucera occupies a pivotal role in producing hydrogen-based infrastructure, a fundamental catalyst in the ongoing global energy transition.

The third quarter of the 2022/23 fiscal year, culminating in September, manifested as a triumphant period for Nucera, exemplified by the elevation of earnings before interest and taxes to a commendable seven million euros from the antecedent four million euros. A comparable trajectory is discernible in the realm of sales, as they ascended from 99 million euros in the prior year to an impressive zenith of 187 million euros. This robust ascent is largely attributed to the domain of alkaline water electrolysis, which resonated favorably within the stock market. The Nucera shares experienced periodic increments exceeding four percent, a testament to the enterprise’s prowess.

While the current fiscal year bodes well for Nucera in terms of revenue amplification, the exigencies of meeting escalating demands necessitate proportional investments in new production infrastructure and supply chains, thereby tempering the EBIT margin to 3.7 percent during the third quarter, compared to the preceding year’s 4.4 percent during the same phase. An even further downturn in this margin is anticipated during the fourth quarter, a calculated consequence of the ongoing expansion efforts. However, this projection is aligned with Nucera’s strategic blueprint. Arno Pfannschmidt reiterated the optimistic outlook, asserting the attainment of positive operating and net results during the ongoing year. In line with the stock exchange prospectus, dividend distribution is not envisaged in the foreseeable horizon. As Pfannschmidt stated, “Our resources are dedicated solely to fostering growth.”

The initial public offering, a watershed moment orchestrated by Thyssenkrupp, introduced Nucera to the stock market arena while retaining substantial equity. The financial inflow stemming from the IPO, amounting to 605 million euros, disbursed over 500 million euros into Nucera’s coffers. The management steadfastly reaffirmed their commitment to the organization’s medium and long-term aspirations, which envision the expansion of alkaline water electrolysis sales to an impressive range of 600 to 700 million euros within the fiscal year 2023/24.

In an authoritative analysis, Deutsche Bank Research bestowed a “Buy” rating upon Nucera, fortified by a target price of 30 euros. The discerning assessment, penned by analyst Michael Kuhn, affirmed that the subsidiary of Thyssenkrupp exhibited remarkable resilience in its quarterly performance. Significantly surpassing both his and the consensus estimates, this commendable feat can be predominantly attributed to the resounding success witnessed within the domain of alkaline water electrolysis, a cornerstone in the production of green hydrogen.