Thyssenkrupp hydrogen IPO plans face market headwinds – sources

February 21, 2022

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) – A steep drop in hydrogen shares is likely to hit the valuation of Thyssenkrupp’s hydrogen unit Nucera, according to investor and financial sources, which could make it more challenging to list the division in a potential share sale.

Putting a value on Nucera has been a challenge from the get-go, with analysts giving a range of 3 billion to 6 billion euros ($3.4 billion to $6.8 billion) for the business, reflecting the uncertainty relating to the booming hydrogen sector.

“The prices investors are prepared to pay for such assets have come down,” said Ingo Speich, head of sustainability and corporate governance at Deka Investment, a top-20 shareholder of Thyssenkrupp.

“It’s not because the quality of the asset has changed, but due to the changed market conditions and the fact that these business models are no longer valued that highly.”

Shares in Nucera’s rivals have slumped, with Norway’s NEL ASA, Britain’s ITM Power and France’s McPhy Energy all down more than half over the past 12 months.

They have underperformed global and European stocks, which have gained 3-4% over the same period, as well as renewables stocks, which have fallen 9%.

Thyssenkrupp has said an IPO of Nucera could happen in the first half of 2022 but the group still needs to make a firm decision in favour of such a move and has left the door open to a partial sale.

Nucera, which is co-owned by Thyssenkrupp and Italy’s De Nora in a 66-34 split, is the world’s top supplier of chlor-alkali membrane technologies needed to produce hydrogen and is also active in alkaline water electrolysis.

“Valuation certainly depends on the market environment. And that’s rather fragile at the moment,” said Marc Tuengler of DSW, a lobby group that represents Thyssenkrupp’s private shareholders. “Time is pressing.”

In a note published after Nucera’s capital markets day in January, analysts at Bank of America attributed a value of 2.3 billion euros for Thyssenkrupp’s 66% stake in Nucera, which indicates 3.4 billion euros for the whole business.

A person familiar with the matter said the asset was currently valued at 3 billion to 4 billion euros.

Thyssenkrupp declined to comment.

In the fiscal year to September, Nucera posted operating profit of 27 million euros, while sales came in at 319 million, a level expected to triple to 900 million to 1 billion by 2025-26.

“The multiple that Nucera might have received nine months ago can no longer be reached that easily,” Deka’s Speich said.

($1 = 0.8830 euros)

(Reporting by Christoph Steitz and Tom Kaeckenhoff; Editing by Bernadette Baum)