Industrial Trucks & Services segment
Business performance and order intake
The number of new truck orders in the third quarter was up slightly on the same period of 2019, rising by 0.2 percent. In the nine-month period, however, there was a sharp fall of 12.8 percent to 137.5 thousand units sold. This poorer performance compared with the global market was mainly due to the challenging conditions in the segment’s main sales market, the EMEA region. In the APAC region, the segment recorded a year-on-year increase, primarily thanks to disproportionately strong growth in China.
The total value of order intake fell by 10.9 percent to €4,076.7 million (Q1–Q3 2019: €4,577.5 million). Negative currency effects reduced order intake by a total of €49.4 million.
in € million |
Q3 |
Q3 |
Change |
Q1 – Q3 |
Q1 – Q3 |
Change |
|---|---|---|---|---|---|---|
Order intake |
1,421.8 |
1,493.8 |
–4.8% |
4,076.7 |
4,577.5 |
–10.9% |
Total revenue |
1,404.3 |
1,552.8 |
–9.6% |
4,108.9 |
4,699.6 |
–12.6% |
EBITDA |
274.3 |
348.0 |
–21.2% |
732.1 |
1,027.5 |
–28.7% |
Adjusted EBITDA |
275.8 |
348.2 |
–20.8% |
753.6 |
1,027.4 |
–26.7% |
EBIT |
91.2 |
169.4 |
–46.2% |
183.1 |
495.7 |
–63.1% |
Adjusted EBIT |
92.9 |
169.8 |
–45.3% |
205.3 |
496.3 |
–58.6% |
|
|
|
|
|
|
|
Adjusted EBITDA margin |
19.6% |
22.4% |
– |
18.3% |
21.9% |
– |
Adjusted EBIT margin |
6.6% |
10.9% |
– |
5.0% |
10.6% |
– |
Revenue
The segment’s total revenue decreased by 12.6 percent to €4,108.9 million (Q1–Q3 2019: €4,699.6 million), due in large part to the extraordinary problems created by the coronavirus pandemic and the significant weakness of the market in the EMEA region. The new truck business saw a sharp fall of 20.2 percent even in the nine-month period. By contrast, revenue in the service business contracted by just 4.1 percent and proved to be a source of stability, returning to the level of the prior-year period in the third quarter. The proportion of the segment’s external revenue accounted for by the service business thus rose to 52.4 percent (Q1–Q3 2019: 47.8 percent). Negative currency effects reduced segment revenue by €47.4 million.
Earnings
The segment reported adjusted EBIT of €205.3 million for the first three quarters of 2020 (Q1–Q3 2019: €496.3 million). This reduction of 58.6 percent was largely due to the decrease in revenue in the new truck business and service business, production inefficiencies caused by supply bottlenecks that predominantly arose in the second quarter due to the lockdowns, and higher costs as a result of launching new products on the market. The segment’s adjusted EBIT margin was 5.0 percent (Q1–Q3 2019: 10.6 percent). However, the adjusted EBIT margin for the third quarter stabilized at 6.6 percent, due in part to the effects of adjusting employees’ variable remuneration on the basis of expected target achievement in the current year. The negative non-recurring items of €21.5 million in the reporting period included the €10.7 million impairment loss recognized in respect of Linde Hydraulics GmbH & Co. KG and the expenses of €12.1 million already recognized in connection with the capacity and structural program that has been initiated. Of this amount, €8.5 million was attributable to the restructuring of the UK sales organization that is under way. After taking into account non-recurring items and purchase price allocation effects, EBIT amounted to €183.1 million (Q1–Q3 2019: €495.7 million). Adjusted EBITDA declined to €753.6 million (Q1–Q3 2019: €1,027.4 million), giving an adjusted EBITDA margin of 18.3 percent (Q1–Q3 2019: 21.9 percent).