Supply Chain Solutions segment

Business performance and level of orders

At €1,318.5 million, the value of order intake in the Supply Chain Solutions segment fell short of the level achieved in the prior-year period (H1 2023: €1,335.5 million). In the project business (business solutions), order intake was only marginally above the level of the prior-year period. Customers postponing the placement of orders and being generally reluctant to invest in project business continued to have an effect here, even though a recovery was evident in the customer segment encompassing pure e-commerce providers. In the high-margin service business (customer services), which consists of the modernization, expansion, and maintenance of customer installations, including the supply of spare parts, the volume of orders in the first half of 2024 was slightly below the level of the prior-year period.

The value of the order book decreased from €2,920.6 million as at December 31, 2023 to €2,731.9 million as at June 30, 2024. This was due mainly to the focus on working through legacy orders from preceding quarters. In addition, the order book was reduced by €92.1 million in the first quarter of 2024 because of the cancelation of orders from the prior year.

Revenue

Total revenue generated by the Supply Chain Solutions segment in the first half of 2024 decreased year on year to €1,451.3 million (H1 2023: €1,497.0 million) despite a small rise in revenue in the second quarter. This decline was primarily due to the fall in order intake in the project business (business solutions) during preceding quarters. The order book also contains a growing proportion of long-term projects, the revenue from which will be recognized over an extended period. By contrast, revenue in the service business (customer services), which consists of the modernization, expansion, and maintenance of customer installations, including the supply of spare parts, rose year on year by 11.9 percent. The proportion of the segment’s external revenue accounted for by the service business increased to 39.4 percent as a result (H1 2023: 34.0 percent).

Earnings

The Supply Chain Solutions segment’s adjusted EBIT amounted to €42.1 million in the first six months of 2024, which was significantly higher than in the prior-year period (H1 2023: €14.8 million). The figure for the first half of 2023 had been adversely affected in particular by project delays and having to work through legacy low-margin orders. The gross margin and profitability thus increased in the reporting period despite the slight decline in revenue. Better project implementation, the efficiency measures carried out, and, in particular, the growth of the service business were all factors in the segment’s improved earnings and margins. The adjusted EBIT margin for the first half of the year stood at 2.9 percent (H1 2023: 1.0 percent).

After taking into account non-recurring items and purchase price allocation effects, EBIT amounted to minus €10.7 million (H1 2023: minus €34.7 million). In the second quarter of 2024, non-recurring items included costs (including interest and consultancy costs) of €14.8 million that were incurred in connection with the ending of a long-running legal dispute related to the acquisition of a group of companies in 2015 by the former Dematic Group.

Adjusted EBITDA improved to €80.3 million (H1 2023: €55.6 million). The adjusted EBITDA margin was 5.5 percent (H1 2023: 3.7 percent).