SMS group reaches operational and financial targets in 2018
by Hans Diederichs
In the 2018 business year, SMS group reached its operational and financial targets as well as significant milestones in its growth strategy. At EUR 3,087 million, order intake for SMS group was EUR 217 million (7.6 percent) higher than the previous year's total of EUR 2,870 million. Sales of EUR 2,805 million, slightly (2.8 percent) below the 2017 level, reflect the lower order intake of the preceding years. In terms of the earnings before taxes, SMS group achieved a moderate increase of 16.5 percent to EUR 27 million. The equity ratio rose slightly to 20.5 percent. The number of employees in Germany and abroad fell slightly to around 13,900 at the end of 2018.
Transformation program remains on track
One of the reasons for the positive developments is the implementation of the measures from the "Task Force '21" transformation program. The program's stated targets were met as planned and, in some cases, exceeded. As part of Task Force '21, over 1,100 measures are being implemented worldwide to develop new fields of investment while simultaneously realizing cost savings potential.
Torsten Heising, CFO: "Overall, we are satisfied with developments in 2018. We expect the positive trend to continue in 2019 and our medium-term targets to be reaffirmed."
Growth strategy will be pursued further
As well as sustainably strengthening the core business and the four strategic growth areas, SMS group’s strategy continues to incorporate selected investments and acquisitions. The global megatrends of urbanization, connectivity, sustainability and mobility rely heavily on innovative metal solutions. Rising expectations regarding the weight and strength of metals and the energy efficiency of the manufacturing process are driving global demand for premium plant construction solutions. As a leading technology provider, SMS group benefits strongly from this trend.
Burkhard Dahmen, CEO: "We are continuously strengthening our position as the global market leader in plant construction. We are systematically implementing the transformation of our company as planned. Our successes in the market confirm that we are on the right path."
Significant successes for digitalization offensive
The digitalization of SMS group along the entire value chain brings about quantifiable benefits for customers. SMS offers its products and services in three core categories with the goal of enabling customers to make commercially successful use of plant and production data:
- On-site consulting by industry experts to take the digitalization of plants or business units to
the next level of development
- Tailored data analysis to optimize product quality and plant efficiency
- Field-tested apps, some of which can be installed and start adding value within 48 hours,
especially in production planning, condition monitoring and quality control.
Having experienced rapid growth, the SMS digital unit is achieving further success with its industry leading platform mySMSgroup. To drive this market offensive, the number of digitalization employees worldwide has already more than doubled. This growth is expected to continue in 2019.
Prof. Katja Windt, CDO: "We are pleased that our alliance of experienced industry experts and young software developers has made such a strong start. The recent market successes reinforce our ambitions to further expand SMS's leading role in digitalization".
Product, project and process – optimal realignment of the Managing Board
Additional innovations in product development, project management and process optimization are made possible by the realignment of the Managing Board. The close cooperation between CDO Prof. Katja Windt and the new Managing Board members Prof. Hans Ferkel (CTO) and Michael Rzepczyk (COO) will actively promote the integration of process, product and project.
Burkhard Dahmen, CEO: "We are now optimally equipped as a Managing Board to implement our growth strategy and to remain the partner of choice for the most demanding customers."
Worldwide flagship projects – from plant construction and green hydrogen production to port logistics
Since the successful planning and realization of Big River Steel, the world's first "learning steel plant", SMS group has won several other major projects that will serve as important references. Further details will be announced shortly.
Michael Rzepczyk, COO: "As a leading supplier in the industry, we are the partner of choice for our customers. We achieve this through technologically superior solutions and first-rate project management."
One long-term focus of SMS group is the CO2 footprint of the steel industry. As a central development partner of the steel industry along the entire value chain, SMS group pursues the clear goal of minimizing CO2 emissions in the medium term and eliminating them in the long term. An important part of this vision is the strategic investment in and technological partnership with Sunfire GmbH, the developer and manufacturer of a highly efficient process for producing "green hydrogen". For the SMS subsidiary Paul Wurth, this partnership is an important step on the path towards green steel production and an opportunity to enter the growing market for e-fuels.
Prof. Hans Ferkel, CTO: "We want to accompany our customers on the path towards hydrogen-based steel production and help them meet climate protection targets. Our goal is clear: The world's first CO2-free slab shall be produced on SMS equipment."
The "New Horizon" strategy of SMS group opens up additional new business areas. For instance, SMS group boasts a pioneering role in additive manufacturing. This is another area that benefits from an integrated and technologically sophisticated approach: SMS group has developed an innovative plant for producing high-quality metal powder for 3D printing. The powder, currently produced at the Demo Center in Mönchengladbach, is then used in a 3D printer from the strategic cooperation partner Additive Industries to manufacture functionally optimized products. In this way, the powder atomization system, powder and printer are perfectly coordinated to produce optimal end products.
The joint venture BOXBAY, founded together with DP World, a leading port operator, in Dubai, also stems from the New Horizon strategy. This project involves a new interpretation of the proven storage and transport technology from SMS subsidiary AMOVA for handling metal coils that weigh up to 50 tons. The High Bay Storage system triples storage capacity on the same floor area, resulting in massive efficiency gains thanks to faster handling in overcrowded and high-priced port zones.
Burkhard Dahmen, CEO: "Our New Horizon successes in particular are proof that SMS's strategy is taking effect. This is where our innovative spirit and the entrepreneurial mindset of all our employees reaches its full expression. We have high expectations for the future. Together, we will do everything we can to reach our ambitious goals."
Source: SMS group Photo: Fotolia