Green transformation provides the foundation for improved profitability

(Virtual Showroom): In the last financial year, SMS group again significantly boosted its order intake to 4.6 billion euros. The main drivers of this strong growth were the green transformation of the steel and metals industry as well as robust economic activity in both India and the USA. Sales also rose considerably to 3.1 billion euros (previous year: 2.6 billion euros). 

‟Last year was again marked by problem areas and crises around the world,” says Burkhard Dahmen, CEO of SMS group. ‟Against this background, 2022 proved to be a good year, in which we achieved our interim goals despite various challenges and took the company forward significantly in terms of its organization.”

We saw a further increase in the service business in terms of both order intake and turnover. The goal remains to expand the service share of our total turnover to 50 percent by 2027. Most recently, SMS secured a service order from H2 Green Steel worth morethan 400 million euros over twelve years.

With regard to earnings before taxes, the company achieved a result of 19 million euros, only slightly above the adjusted previous year's level (15 million euros) due to the Russian war of aggression and the associated withdrawal from business in Russia. 

Torsten Heising, CFO of SMS group: ‟The high order intake is impressive, especially as it does not yet include the latest major orders. Based on the good order backlog, we intend to systematically increase our profitability in the coming years. We are already planning a significant improvement in results for the current year.”

Net liquidity was 501 million euros. The downturn compared to the previous year is due to extensive investments, including the service company KAEFER, as well as the new SMS Campus in Mönchengladbach and new service workshops in the USA.

SMS right on track with #turningmetalsgreen mission

SMS has a key role to play in the worldwide efforts to decarbonize the steel and metals industry. With the construction of the first climate-neutral steel plant in Sweden for H2 Green Steel and the transformation of thyssenkrupp Steel's iron and steel mill in Duisburg, SMS group has recently signed two major orders with a combined volume of over 3 billion euros within just a few months. 

‟Our mission is #turningmetalsgreen. The latest mega projects are testament to our leading market position and, going forward, enable us to strike a careful balance in the order structure between equipment and service contracts. Since the green transformation is closely linked to services and digital solutions for more sustainable plants, our strategy in recent years has set the right course for successful business growth,” says Burkhard Dahmen.  

Innovation Hub established

In the past year, SMS increased its investment in innovation to 129 million euros (previous year: 96 million euros). In order to speed up product development in the fields of decarbonization and environmental technologies in particular, we created our InnovationHub. 

In recent years, SMS has successfully transferred its core technological expertise in metallurgical plant engineering to new business areas by setting up the two joint ventures Primobius (battery recycling) and BOXBAY (port logistics). Both companies have latelybeen able to prove their market maturity by winning their first orders from industry customers: In the year under review, Primobius has received an order from Mercedes-Benz to build a recycling plant for lithium-ion batteries at its site in Kuppenheim. AndBOXBAY has signed a contract for a vertical, fully automated high-bay storage system in Busan, South Korea. 

SMS looking ahead with optimism 

For the current fiscal year, SMS expects a further increase in order intake, amounting to up to six billion euros. Turnover for 2023 is expected to rise to more than 3.5 billion euros.

Our strategy for sustainable, profitable growth has been verified. Based on the good order situation, SMS expects a significant improvement in its operating result for the current fiscal year. The EBTA margin is expected to reach seven percent by 2026. 

In time for the company's 150th anniversary, SMS is opening the doors to its new Campus in Mönchengladbach, which will provide the workplace of the future to over 2,000 employees. We plan to move in at the end of the year.