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SMS group: Highest level of order intake in ten years

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Author: Magnus Schwarz

SMS group: Highest level of order intake in ten years
Burkhard Dahmen, Chairman of the Managing Board and CEO of SMS group (Source: SMS group)

With an 86 percent increase, SMS group almost doubled its order intake to reach 3,507 million euros in the 2021 financial year, recording the highest level in ten years. One reason for this substantial rise is the catch-up effect in the wake of the previous year’s slump triggered by the COVID-19 pandemic. Furthermore, the growing demand for decarbonization and recycling technologies lines up well with SMS’ business strategy.

SMS group experienced a significant increase in the order backlog coming in at 3,944 million euros. Due to delays caused by the pandemic in the schedules for acceptance, the 2021 financial year closed with sales down 6.8 percent from the previous year at 2,559 million euros.

Earnings before taxes (EBT) amounted to 87 million euros. With this result, SMS has returned to a post-pandemic situation of profitable growth. HR costs in Germany have been sustainably reduced by 75 million euros as a result of the extension of the future-oriented collective agreement and socially acceptable staff reductions. The free cash flow rose significantly to a total of 145 million euros. Net liquidity climbed to 978 million euros. Investments were also higher than the year before, totaling 151 million euros.

Technology partner for the decarbonization of the steel industry

With the acquisition of the remaining shares of Paul Wurth in April 2021, SMS has further strengthened its position as technology partner and full-line supplier for the steel industry.

Burkhard Dahmen, CEO of SMS group, said, “Almost all industrialized countries have set themselves ambitious climate targets and resolved transformation strategies for their steel industries. Today, integrated steelworks produce around 1.3 billion tons of crude steel per year via the conventional BF-BOF route. Thereby, they account for 90 percent of all CO2 emissions from the steel industry. In the decades to come, these production capacities will be subject to transformation. As a systems supplier, we are in a position to support our customers comprehensively in every situation.”

Circular economy – the new growth area

SMS not only supplies solutions and systems to the steel industry, but also develops technologies that enable the recovery and reuse of many metals. In November 2021, a long-term, strategic partnership agreement was concluded with copper producer Aurubis, covering the development and construction of several modular recycling plants in Europe and North America. These modern multi-metal recycling plants will recover valuable metals and precious metals for reuse in the value creation cycle.

Environmental technologies for tomorrow’s mobility

The LIB (lithium-ion battery) recycling process from Primobius has secured its first commercial successes. After the start of commercial operation of the demonstration plant in Hilchenbach in spring 2022, Mercedes-Benz was one of the first customers to decide to use this process in its operations. Primobius will be building its first industrial-scale plant at the Mercedes-Benz location in Kuppenheim (Baden-Württemberg), Germany.

Increasing use of performance-based subscription models in the service business

SMS is rigorously pursuing the expansion of its service business. The three focus areas of electrics/automation, digitalization and technical service provide integrated solutions. To an increasing extent, this takes place under performance-based subscription agreements.

Prof. Dr.-Ing Katja Windt, CDO of SMS group, said, “Many of our customers want to be able to focus more on their core processes and, therefore, have their maintenance services handled by service partners. Here, efficiency and sustainability are the primary performance indicators. We at SMS are positioned to support our customers during the entire lifecycle of their plants as a dependable single-source partner: during the design and commissioning of plants, and throughout their decades-long operation, including all upgrades and revamps.”

Investment in Kaefer Isoliertechnik completed

SMS has acquired a 50 percent stake in Kaefer Isoliertechnik GmbH & Co. KG together with private equity investor Altor. The closing of the transaction took place on May 24, 2022. SMS expects that the industrial services market will experience significant growth over the next few years. Together with Kaefer, SMS will explore new opportunities for cooperation in future-oriented areas.

Positive outlook

SMS expects a perceptible increase in incoming orders and an improvement in results over the next years. The order intake in 2022 is expected to level out at the previous year’s figure, even in view of the Russia-Ukraine war.

Link to Annual Report 2021.

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heat-processing.com, Inhaber: Vulkan-Verlag GmbH (Firmensitz: Deutschland), würde gerne mit externen Diensten personenbezogene Daten verarbeiten. Dies ist für die Nutzung der Website nicht notwendig, ermöglicht aber eine noch engere Interaktion mit Ihnen. Falls gewünscht, treffen Sie bitte eine Auswahl: