Supply Chain Solutions segment

Business performance and order intake

At €614.4 million, the value of order intake in the Supply Chain Solutions segment in the third quarter of 2022 was down sharply on the record figure registered in the prior-year period, when there had been a number of big-ticket orders (Q3 2021: €1,398.7 million). The volume of orders was also heavily affected by a general decline in demand in the e-commerce customer segment, the postponement of orders by customers, and two noteworthy order cancellations by customers. In the nine-month period, order intake fell by 24.1 percent to €2,479.6 million (Q1–Q3 2021: €3,267.4 million). A high proportion of orders was attributable to the general merchandise, grocery, and textile sectors. There was a marked year-on-year increase in order intake in the service business. Furthermore, currency effects boosted order intake by a total of €194.5 million.

Revenue

The total revenue of the Supply Chain Solutions segment grew by 6.3 percent to €2,970.4 million in the first three quarters of the year (Q1–Q3 2021: €2,794.2 million). Working through the sizeable order book that had built up by the end of 2021 in the long-term project business (business solutions) contributed to the increase in revenue. This was despite the delays to projects resulting from supply chain disruptions. The revenue attributable to orders secured in 2022 was limited as resources were tied up in existing projects and there was a shortage of skilled workers in North America. The pace of growth in the long-term project business slowed significantly overall. The increase in revenue from business solutions was therefore just 1.5 percent. In the service business (customer services), the rise in revenue was mainly due to modernization work, upgrades, and the supply of spare parts. At 23.9 percent, the contribution of the service business to the segment’s external revenue was greater than in the prior-year period (Q1–Q3 2021: 20.3 percent). Overall, currency effects increased segment revenue by a substantial €236.3 million in the period under review.

Earnings

The adjusted EBIT of the Supply Chain Solutions segment was down sharply year on year at minus €32.2 million (Q1–Q3 2021: €336.6 million). In the third quarter of 2022, adjusted EBIT was firmly in negative territory at minus €182.0 million owing to higher expected overall project costs. It was only possible to pass on a small proportion of the project-related cost increases to customers because the existing long-term customer agreements did not contain adequate price adjustment clauses. Such clauses were not introduced until the middle of the second quarter 2022 and then only for new project contracts. The supply chain disruptions continued to increasingly reduce the availability of key parts at project sites. The resulting inefficiencies due to project delays pushed up overall project costs.

Consequently, the adjusted EBIT margin stood at minus 1.1 percent in the first nine months of the year (Q1–Q3 2021: 12.0 percent). After taking into account non-recurring items and purchase price allocation effects, EBIT amounted to minus €106.4 million (Q1–Q3 2021: €271.7 million).

Adjusted EBITDA decreased to €25.3 million (Q1–Q3 2021: €386.2 million); the adjusted EBITDA margin was just 0.9 percent (Q1–Q3 2021: 13.8 percent).