Burkhard Dahmen, chairman of the managing board, at the press conference of SMS group

SMS group: less orders, sales close to previous year

At the press conference on annual results, Burkhard Dahmen, chairman of the managing board of SMS group, announced the results of the business year 2015: Order intake by SMS group dropped to € 2.758 billion (2014: € 3.167 billion). Meanwhile sales, at € 3.310 billion, approached the level of the previous year (2014: € 3.406 billion). The net operating result of SMS group contracted to € 7 million (2014: € 31 million). Apart from the generally weak market, costs for restructuring also depressed the result for 2015.

The company generated orders for metallurgical plant and machinery construction totaling € 2.476 billion (2014: € 2.921 billion). While plant business decreased to € 1.882 billion (2014: € 2.406 billion), service business grew to € 594 million (2014: € 515 million).

The Elexis group including Elotherm booked a small increase in order intake amounting to € 295 million compared to € 260 million in 2014. Currently, SMS GmbH holds 95.52 % of the shares in Elexis AG. The next move is to resolve the squeeze-out of the minority shareholders during the general shareholders meeting at the end of June. This full takeover by SMS group of the shares in Elexis AG boosts flexibility and cuts costs.

In 2015, the average number of employees including apprentices in SMS group totaled 14,342 (2014: 14,003). Primarily, the increase results from the expansion of service business and more jobs abroad. This is in contrast to the declining number of employees in Germany. Compared to 5,250 jobs at the beginning of 2014, the workforce in Germany will be cut by 1,200 to some 4,050 by 2017. The managing board and the works council have agreed on a plan to implement most of the job cuts as painlessly as possible. This involves part-time work for older employees, retirement at 63 for long term contributors to the insurance system, a recruitment stop, and transfers to the continually growing service business. That will in most cases avoid forced redundancies.

Despite its cost-cutting programs, SMS will maintain its commitment to training young talents. This is how the company is responding to demographic change and ensuring it can draw on a pool of adequately qualified personnel in the future.

Burkhard Dahmen, chairman of the managing board: “Due to worldwide overcapacities, our customers remain unwilling to invest in new plants. What’s more, ongoing political uncertainty in our important sales markets Russia and Ukraine is also damaging business. Looking on the brighter side, the gradual opening up of Iran offers opportunities for us to support the modernization and rebuilding of the country’s steel industry in the near future. In fact, we’ve already signed letters of intent for projects collectively worth more than € 1 billion. Plus, we’ve just founded a joint venture with an Iranian company in the field of technical service and repairs. That’s why we’re expecting order intake in 2016 to remain at the same level as last year. Because of declining orders in hand, sales will be lower. We anticipate a moderate improvement in our net result due to lower restructuring costs.”

(Source: SMS group)

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