“Green” transformation forms basis for improved profitability

„Grüne“ Technologien als Anstoß für positive Entwicklungen © SMS

Decarbonization of industry remains a growth driver. A key component is hydrogen technology for direct reduction in pig iron production, among other things. Not least thanks to this development, the SMS Group achieved a significant increase in order intake and sales.

In the past fiscal year, the SMS group again significantly increased its order intake to 4.6 billion euros. The main drivers of this strong performance were the green transformation of the steel and metals industries and a good economy in India and the USA. Sales also increased significantly to 3.1 billion euros (previous year 2.6 billion euros).

“Behind us lies another year of global trouble spots,” sums up Burkhard Dahmen, CEO of the SMS group. “Against this backdrop, 2022 was a good year in which we achieved our interim goals despite various challenges and made significant organizational progress.”
The service business achieved a further increase in order intake and sales. The goal remains to increase the service share of total sales to 50 percent by 2027. Most recently, SMS secured a service contract from H2 Green Steel worth over 400 million euros over twelve years.
Due to the Russian war of aggression and the associated exit from the Russian business, the company’s pre-tax profit of 19 million euros last year was only just above the level of the adjusted prior-year figure (15 million euros).

Torsten Heising, CFO of the SMS Group: “The high order intake is remarkable, especially as it does not yet include the latest major orders. Based on the good capacity utilization, we want to consistently increase our profitability in the coming years. We are already planning a significant improvement in earnings for the current year.”

Net liquidity was 501 million euros. The decline compared to the previous year is due to extensive investments, among others in the service company Kaefer, the new SMS Campus in Mönchengladbach and new service workshops in the USA.

SMS fully on track with mission “#turningmetalsgreen

SMS has a key role to play in the global efforts to decarbonize the steel and metals industry. With the construction of the first climate-neutral steel mill in Sweden for H2 Green Steel and the transformation of the steel mill of thyssenkrupp Steel in Duisburg, SMS Group recently signed two major contracts within a few months with a combined order volume of more than €3 billion.
“Our mission is ‘#turningmetalsgreen’. The recent mega projects demonstrate our leading market position and enable us to carefully balance equipment and service contracts in the order structure going forward. As the green transformation is closely linked to services and digital solutions for more sustainable plants, we have set the right course for successful business development with our strategy in recent years,” Dahmen concludes.

Innovation Hub founded

SMS increased its investments in innovations to 129 million euros last year (previous year: 96 million euros). An “Innovation Hub” was established to accelerate product development, particularly in decarbonization and environmental technologies.
With the two joint venture companies Primobius (battery recycling) and Boxbay (port logistics), SMS has successfully transferred its technological core competence in metallurgical plant engineering to new business areas in recent years. Both companies were recently able to demonstrate their market maturity with initial orders from industry: In the year under review, Primobius received an order from Mercedes-Benz to build a recycling plant for lithium-ion batteries at its Kuppenheim site. And Boxbay signed an order for a vertical, fully automated high-bay warehouse in Busan, South Korea.

SMS with positive outlook

SMS expects order intake to increase again in the current fiscal year to up to 6 billion euros. Sales in 2023 are expected to increase to over 3.5 billion euros.
The strategy for sustainable, profitable growth was confirmed. Based on the good order situation, SMS expects a significant improvement in earnings for the current fiscal year. The EBTA margin is expected to reach 7 percent by 2026.
To mark the company’s 150th anniversary, SMS opens its new campus in Mönchengladbach, providing the workplace of the future for more than 2,000 employees. Move-in will take place at the end of the year.