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SMS Group Reports Record Business Year

05/05/2008 - SMS group describes 2007 as a record business year, with pre-tax results of EUR 176 million that were double the previous year’s figure of EUR 85 million.

Machine and plant builder SMS group described 2007 as a “record business year,” with a significant increase in order intake, sales and profit. At EUR 176 million, the group’s pre-tax result was double the previous year’s figure of EUR 85 million.
 
In 2007, the group also increased its order intake to EUR 5,142 million, an increase of some 60% compared to the previous year’s EUR 3,235 million. Sales reached around EUR 2,937 million, which compares to sales of EUR 2,826 million in the previous year.
 
On average over the year, the group employed a worldwide total of 7,613 employees. The reduction compared to last year’s total of 8,999 employees is due to the sale of the plastics machinery construction business, an area the SMS group has pulled out of completely. Now the focus is squarely on its core business of metallurgical plant construction.
 
The group hired another 520 employees in this area in 2007, and plans to create 700 extra jobs in 2008, primarily for qualified engineers.
 
“It is already clear that the exceptional boom in metallurgical plant construction will continue into its fourth year in 2008,” said Dr. Heinrich Weiss, Chairman of the SMS group. “Global steel production is expected to increase to 1.4 billion tonnes over the year. We are especially pleased to see that this growth not only comes from the threshold countries alone—in other words China, India, Brazil, and Russia—but also from our customers in other regions of the world that are increasingly placing orders with us.”
 
The group attributes the current boom—which has broken through the steel industry’s normal peak-and-trough pattern—to the large quantities of steel required by the threshold countries to build up their economic infrastructure. As this trend has continued for a number of years, more and more of the emerging economies are equipped with state-of-the-art production plants. The SMS group expects increased demand in North America, Japan, and Europe as these regions invest in order to stay internationally competitive.
 
SMS group’s broad supply range covers the complete metallurgical process chain including electrical and automation systems, plus service. These products and services are divided between the Business Areas SMS Demag and SMS Meer, yet marketed together under the roof of “SMS metallurgy”. The two Business Areas operate as independent entities that cooperate closely. SMS GmbH is the holding responsible for strategic planning and control of the group, and the sole owner of the SMS group is the Weiss family.
 
In 2007, Business Area SMS Demag increased order intake to EUR 3,725 million, an increase of some 90% compared to the previous year’s order intake of EUR 1,972 million. In this sector, the SMS group supplies plants for metal production and processing, ranging from steelworks to continuous casters right up to strip processing lines, for ferrous as well as nonferrous metals.
 
Business Area SMS Meer raised its order intake to EUR 1,353 million, an increase of about 60% compared to the previous year’s order intake of EUR 857 million. SMS Meer supplies tube rolling mills, long-product rolling mills, extrusion and forging presses as well as heating equipment for the steel and nonferrous metal industry.
 
In 2007, the group also completed its pullout from plastics machine construction. “Because the SMS group was nowhere near as successful in plastics machine construction as we were in metallurgical machine and plant construction,” explained Dr. Heinrich Weiss, “we decided some time ago to completely pull out of plastics technology. With our sale in this area in 2007, we successfully completed the pullout.”
 
SMS GmbH is the holding of a group of companies internationally active in plant construction and mechanical engineering for the steel and nonferrous metals industry. It consists of the two Business Areas SMS Demag and SMS Meer, which jointly form SMS metallurgy. In 2007, some 8000 employees worldwide generated a turnover of about EUR 3.0 billion.