Supply Chain Solutions segment

Business performance and level of orders

The value of order intake in the Supply Chain Solutions segment rose to €641.6 million in the period under review (Q1 2023: €454.4 million). In the project business (business solutions), the segment achieved strong order growth following the low volume of orders in the prior-year quarter. Customer demand was back on an upward trajectory, particularly in the core Americas market; a recovery in demand was also evident in sectors such as pure e-commerce providers and general merchandise and grocery retail. The level of orders on hand also improved markedly in the service business (customer services). This was due to the existing installed base with customers that had been built up over recent years. However, the level of orders in the project business remained muted in the first three months of 2024, partly because planned customer orders were postponed.

It should be noted that the figure for order intake in the service business (customer services) – with the exception of modernization and expansion projects – now only includes the revenue generated during the reporting period in question. This definition-related adjustment resulted in the figure for order intake in the first quarter of the prior year being reduced by €43.1 million.

The order book had contracted to €2,778.2 million as at March 31, 2024, partly due to the cancellation of orders from the prior year worth €92.1 million. In addition, the definition-related adjustment described above meant that the original figure for the order book at the end of 2023 (€3,237.5 million) for service business in the preceding years was reduced by €316.9 million to €2,920.6 million.

Revenue

Total revenue in the Supply Chain Solutions segment fell to €718.9 million in the reporting period (Q1 2023: €782.5 million). This was primarily because the project business (business solutions) remained subdued. By contrast, revenue in the service business (customer services) rose by 12.9 percent relative to the prior-year period. The proportion of the segment’s external revenue accounted for by the service business increased to 39.2 percent as a result (Q1 2023: 31.6 percent).

Earnings

The Supply Chain Solutions segment’s adjusted EBIT amounted to €18.4 million in the first three months of 2024, which was significantly higher than in the prior-year period (Q1 2023: €7.1 million). The figure for the first quarter of 2023 had been adversely affected in particular by project delays and having to work through legacy low-margin orders. Profitability increased in the reporting period despite the slight decline in revenue. The segment’s earnings and margins improved thanks to improvements in the project execution, the sharp growth in the service business, and the efficiency measures that have been implemented.

The adjusted EBIT margin for the reporting quarter stood at 2.6 percent (Q1 2023: 0.9 percent). After taking into account non-recurring items and purchase price allocation effects, EBIT improved to €2.2 million (Q1 2023: minus €15.9 million).

Adjusted EBITDA increased to €38.1 million (Q1 2023: €27.7 million). The adjusted EBITDA margin was 5.3 percent (Q1 2023: 3.5 percent).