Financial Resurgence Marks Successful Year Despite Market Headwinds

SMS group has demonstrated remarkable resilience in the 2024 fiscal year, posting earnings before taxes of €153 million, a dramatic improvement from the previous year's €20 million loss. While order intake decreased from €5.0 billion to €3.6 billion, largely due to the absence of major projects comparable to the previous year's thyssenkrupp Steel contract, the figure remains above the company's ten-year average, indicating sustained business strength. Sales rose impressively by 17.6%, reaching €4.03 billion, an increase of approximately €600 million compared to 2023. The company maintained robust net liquidity of €929 million, slightly up from €906 million the previous year, providing a solid financial foundation for future growth initiatives. "Despite geopolitical tensions and a challenging market environment, 2024 was a successful year for us. We benefit from our diversified position and the globally sustainable trends towards decarbonization and the circular economy," stated Jochen Burg, CEO of SMS group, highlighting the company's strategic positioning in evolving industrial landscapes.

Strategic Restructuring Drives Operational Efficiency

he impressive financial turnaround can be attributed to a comprehensive restructuring strategy implemented by SMS group's leadership. "We have cut our costs, closed down non-profitable areas, and made the organization more efficient. This puts us in a good position," explained Fabíola Fernandez, CFO of SMS group. The company's approach involved targeted optimization of operational processes, strategic divestment from underperforming business segments, and implementation of efficiency measures across the organization. These initiatives have not only improved immediate financial performance but also positioned SMS group for sustainable profitability in coming years. The company's research and development investments increased slightly to €155 million, representing a 2.7% rise compared to 2023, demonstrating continued commitment to innovation despite cost-cutting measures elsewhere. This balanced approach to financial discipline and strategic investment has strengthened the company's competitive position while maintaining its technological leadership in the industry.

Service Business Expansion Becomes Strategic Priority

SMS group has successfully strengthened its service business, encompassing plant maintenance, modernization, digitalization, and equipment expansion, establishing it as a cornerstone of the company's growth strategy. A notable achievement in this area was securing a twelve-year service agreement with Swedish company Stegra, for which SMS is building the world's first steel plant operated entirely with green hydrogen. The acquisition of IMS, a US-based service company specializing in electrical and automation systems with approximately 130 employees, further reinforces this strategic direction. The company has set an ambitious target to generate up to 50% of its sales from service business in the future, recognizing the stable revenue streams and higher margins typically associated with service operations compared to new equipment sales. This pivot toward service-oriented business models represents a fundamental shift in SMS group's long-term strategy, aiming to reduce dependence on cyclical new project orders while building deeper, more enduring customer relationships.

Geographic Diversification Mitigates Global Uncertainties

Against a backdrop of increasing global trade barriers and economic uncertainties, SMS group's regional diversification strategy has proven particularly valuable. The company has organized its sales and project handling activities across four key regions: Americas, Europe, China, and APAC & MEA (Asia-Pacific, Middle East, and Africa). India stands out as a particularly promising growth market, with SMS currently investing in a new production facility in Ahmedabad, Gujarat, anticipating significant order growth in the coming years. While European operations focus on pioneering green steel projects, reflecting the region's aggressive decarbonization agenda, the Americas region emphasizes service business expansion, with numerous service workshops operating directly on customer premises throughout the United States. This balanced geographic approach allows SMS to capitalize on regional growth opportunities while mitigating risks associated with economic or regulatory changes in any single market.

Sustainability Framework Advances ESG Commitments

SMS group has continued to strengthen its environmental, social, and governance strategy, embedding sustainability principles throughout the organization. In 2023, the company developed a comprehensive sustainability framework aligned with the United Nations Sustainable Development Goals, which is being systematically implemented across operations. The company's commitment to global sustainability standards was further reinforced by signing the UN Global Compact in 2024. "ESG is a strategic success factor for us. This also includes taking responsibility for our employees and promoting diversity and ethical corporate governance," noted CFO Fabíola Fernandez. On the environmental front, SMS has established concrete measures to achieve climate neutrality at its major locations by 2030, while simultaneously developing technologies that help customers reduce their ecological footprints. The company joined the Stiftung KlimaWirtschaft, German CEO Alliance for Climate and Economy, in March 2025, actively collaborating with other sponsor companies to promote climate protection and sustainable economic practices.

Positive Outlook Despite Ongoing Market Challenges

Looking ahead to the 2025 fiscal year, SMS group maintains an optimistic outlook despite ongoing market challenges. The company anticipates slightly higher order intake compared to 2024, while sales are expected to remain at similar levels. Earnings are projected to continue their positive trajectory, with the company targeting an ambitious earnings margin of approximately 7% by 2027. This forward-looking confidence stems from several factors, including the company's strong order backlog of €6.34 billion, which provides revenue visibility for the coming years, ongoing operational efficiency improvements, and strategic positioning in growth markets like India and service business segments. Additionally, the global push toward industrial decarbonization creates sustained demand for SMS group's green technologies, particularly in regions with aggressive climate targets. While acknowledging the uncertain global economic environment, the company's diversified business model and focus on long-term growth trends provide a solid foundation for continued success.

Key Takeaways:

• SMS group achieved a dramatic financial turnaround with earnings before taxes reaching €153 million in 2024, compared to a €20 million loss in 2023, despite order intake decreasing to €3.6 billion.

• The company is strategically expanding its service business, aiming to generate up to 50% of sales from services including maintenance, modernization, and digitalization, exemplified by a twelve-year service agreement with Swedish company Stegra for the world's first hydrogen-powered steel plant.

• SMS group has committed to climate neutrality at major locations by 2030, joined the German CEO Alliance for Climate and Economy, and expects continued growth with a target earnings margin of approximately 7% by 2027, supported by expansion in key markets like India and the United States.