SMS records highest level of order intake in ten years

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With an 86 % increase, SMS group almost doubled its order intake to reach EUR 3.5bn in the 2021 business year, recording the highest level in ten years.

The reasons for this substantial rise are catch-up effects in the wake of the previous year’s slump triggered by the Covid-19 pandemic and the growing demand for decarbonization and recycling technologies. The order backlog increased to nearly EUR 4bn. Due to delays caused by the pandemic in the schedules for acceptance, the 2021 financial year closed with sales down 6.8 % from the previous year at EUR 2.6bn.

Earnings before taxes amounted to EUR 87m (2020: EUR-120m). With this result, SMS has returned to a post-pandemic situation of profitable growth. Human resource costs in Germany have been sustainably reduced by EUR 75m 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 EUR 145m. Net liquidity climbed to EUR 978m. Investments were also higher than the year before, totalling EUR 151m. Further details in SMS group's annual report.

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 1.3bn t of crude steel per year via the conventional BF-BOF route, accounting for 90 % 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.”

Next year SMS group will open its new headquarter in Mönchengladbach, Germany. Photo: SMS group

Environmental and recycling technologies strong growth areas

Under the motto turning metals green, SMS not only supplies solutions and systems to the steel industry, but also develops technologies that enable the recovery and reuse of nearly all types of metal. 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, such as copper, nickel, tin, zinc, platinum and various precious metals, for reuse in the value creation cycle.

SMS subsidiary Hertwich Engineering offers recycling technology for the aluminium industry.

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, Germany.

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

SMS is steadily pursuing the expansion of its service business. The three focus areas of electrics and automation, digitalization and technical service provide integrated solutions – to an increasing extent under performance-based subscription agreements.

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.”

Positive outlook

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

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