By Tom Käckenhoff

Steel Europe, subject to a highly cyclical market, made adjusted earnings before interest and tax of 31 million euros (27 million pounds) in the last fiscal year that ended Sept. 30, a decline of 95% year-on-year.

Restructuring steel is one of the most pressing tasks for new Thyssenkrupp Chief Executive Martina Merz, who took over last month, the other being finding an investor for the group's elevator business, key to repairing the group's balance sheet.

Thyssenkrupp has delayed a strategy announcement to December, angering workers who have been wondering about the steel division's future following the collapse of a planned joint venture deal with Tata Steel earlier this year.

"If you can't make money with steel in Europe for years then you have to ask yourself whether it makes sense to continue to operate that business," said Michael Muders, fund manager at Union Investment.

Thyssenkrupp declined to comment.

"We expect a strategy from ... Merz soon on how to sustainably earn money with steel," Muders said. According to Refinitiv data, Union Investment holds 0.7% of Thyssenkrupp, making it the group's ninth-largest shareholder.

Thyssenkrupp investors have long criticised the group's negative cash flow, which was -1.14 billion euros last year and is expected to go further into negative territory in 2019/20.

"Without positive cash flow at some point the question arises whether it is better to wind down the whole company," Muders said. "Thyssenkrupp has not delivered any evidence over the past decade that it can generate value for shareholders."

Following four profit warnings, Thyssenkrupp is now worth 7.15 billion euros, less than the 8.7 billion euros in pension liabilities on its balance sheet.

The group's only way to rake in large amounts of cash and ease the pressure is to sell its elevator business, either full or in parts, which could be worth up to 17 billion euros, according to analyst estimates.

"Thyssenkrupp has its back to the wall now. That also offers a chance to clean up properly," Muders said.

Thyssenkrupp has opened up to the possible sale of many of its individual business lines, including plant technology, automotive components and shipbuilding, which it said might be better off under new ownership.

(Writing by Christoph Steitz; Editing by Tassilo Hummel and David Evans)

By Tom Käckenhoff