Ladies and gentlemen, welcome to the Alimak Group interim report for January through to September of 2020. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Today, I am pleased to present Ole Kristian Jødahl, CEO, and Tobias Lindquist, CFO. Speakers, please begin your meeting.
Thank you, and welcome to the quarter three presentation of Alimak Group. As you said, with me today, I have our CFO, Tobias Lindquist. Next page. We will cover, of course, our quarter three results, and then we will do a short recap of the New Heights program before we briefly sum up the quarter and move to Q&A. Next page, please. We saw a continued significant impact from COVID-19 on our performance in the quarter, and customers are still delaying investments, and we are still facing travel restrictions and limitations to access customer sites. We have a high exposure to U.S., which accounted for 26% of our revenues in 2019, and where we saw now a very weak market in quarter three. The summer months were very quiet, and we saw higher activity levels in September.
Positive is also that we do not see any trend of project cancellations remain. The strengthening SEK is also now starting to affect our translated sales and order intake. Effect on revenue was negative of SEK 58 million, or 6% of our revenue. Since we are hedging our sales at the time where we sign a contract, we can control results effect, and thereby we see limited effect in our results. Since we do have quite a bit of our production in Sweden, this is something that we will see coming forward and we will be forced to increase prices in the coming months to cover for this. It's something that is under our control.
I'm pleased to see that despite being conservative in our provisions, we managed to improve our operational results and margin compared to the two previous quarters, as well as reporting a strong cash flow from operations. Two weeks ago, we launched a New Heights program, three steps to take us to delivering on our financial targets over the business cycle. One part of this was the cost-saving program of SEK 60 million , where then SEK 35 million was extraordinary cost that we have taken now in quarter three. The savings from this program are all expected to have full effect in our operational results from mid-2021. We continue to invest in R&D and digitalization, something that is vital to our organic growth going forward.
One example is that all BMUs now being sold from early next year and onwards will have a built-in capability of remote monitoring. I'm also very pleased with the acquisition we closed end of September, the Verta Corporation, a U.S. service provider focusing on BMUs, and then mostly our own Manntech machines. This is of course, an important step in further increasing our reach into the aftersales and it's also specially targeting the BMU customers. Next page, please. Looking into our group results for the quarter, order intake decreased 9% organic and 6% due to currency translation effect. The total reduction, 9%. The organic drop is all driven by the challenging business climate and the biggest decline we faced in U.S. and Asia Pacific, with then the exception of China, where we see a much more stable business climate.
Order intake in Europe increased compared to last year. Revenues decreased 9% organic and 6% due to currency, total reduction of 16%, where again, the main drop came from Americas and now Europe, while Asia Pacific had a slight increase. EBITDA adjusted ended at SEK 103 million, down from SEK 152 milion last year, and that gave us a margin of 11.2% versus 14%. Positive, though, is that we managed to improve our margins from quarter two, and this is coming through our efforts both on the short-term measures, but also our long-term measures. We will continue to lift this going forward.
I see that we are a bit too much in the hand of the market developments, and an important part of the New Heights program is to get more control over our own destiny and become less cyclical. Areas that we are to drive and strengthen the aftersales. We also see definitely that we can have a much better geographical spread within each of the divisions. Increasing our portfolio there, it's a nice potential. We also have the digitalization. We do believe all our products and solutions moving forward will be digitalized and connected, so more integrated with customers. Also to become a more active part in the bigger ecosystem around our products, for example, at a construction site. Next page, please. Moving into construction equipment, we see an organic decrease of 9% and a total decrease then of 15%, where the difference is driven by currency.
In general, a weak quarter across the board, and the main disappointment is coming from U.S. and Australia. Positive was China and Sweden, where we see that the market has more stabilized. Customers' investment decisions are being still pushed forward, and we see rental customers are still being short-term focused, investing when projects are confirmed and the current fleet cannot really cope with the demand. Revenues decreased 10% organically and 16% in total, including currency effects. The main negative variance is from U.S., while we saw a slight improvement in Asia and a flat development in Europe. EBITDA adjusted ended at SEK 8 million, a disappointing margin of 7.1%, driven down by the low volume, of course, but also negative mix effects from the low U.S. sales.
Both our temporary and permanent measures taken will, of course, help the profit situation moving forward, and we neither do expect to have this negative mix effect from the U.S. hitting like it did now in the quarter forward. On the positive side, we have several activities going that will be important for the future. Couple of examples, we have released Alimak BIM Gallery, which will allow our product to be digitally modeled into the project in the planning phase for our customers. We have also taken the first steps in remote monitoring, where we are now monitoring our construction machines within our own rental fleet, and we will also start to invite customers into this journey beginning next year. Next page, please. Rentals.
In business area rentals, the order intake, we see an organic decrease of 10% and a total decrease of 14%, again, driven by currency. A somewhat lower order intake after two very strong quarters. Europe improved and Australia was then lower after a very strong first half. Also in rental, we see that timing of large orders often makes the rental order intake lumpy, and that we can see here. Year to date, this business has reported an organic order intake increase of 14%. Reported revenue was flat, but organically, up 2%. Europe, that was previously hard hit by the pandemic, we saw improvements in quarter three, while Australia had a weak quarter due to renewed lockdowns. Still somewhat benefiting from the increased preference for renting over buying, most prominent in Australia, and we do not really see any project cancellations, but delays.
EBITDA adjusted ended at SEK 18.7 million , a strong margin of 18.8%. Next page, please. Industrial equipment. We saw organic order intake decrease 10% and a total decrease of 16%, also driven by currency. Decline is largely related to business unit BMU, but though the business unit had a pickup in September and especially in U.K. Again, we do not see cancellations, so the pipe remains strong. Also to note is that last year, the BMU business had some bigger orders, which were not seen so far this year. General industry also had a good pipe and prospects, but many delayed decisions. Despite this, order intake slightly better than last year. The highlight was also a nice order in the marine segment related to servicing of offshore wind turbines. Revenues decreased 13% organically and 20% in total, including currency. Again, BMU is significantly lower than last year.
General industry faced high comparables from last year, but wind had a solid quarter, especially in China. EBITDA adjusted ended at SEK 0.4 million, a very disappointing margin of 0.1%. Result of low volumes as well as cost of approximately SEK 10 million that we took in the month, not as one-offs, but relating to inventories and risk provisions. After sales, here we have the biggest impact of currency in the quarter. Organically, we had an order intake decrease of 5%, and including currency, a reduction of 12%. After sales continue to be on the receiving end of this market uncertainty. This is then again due to travel restrictions and difficulties to access sites, as well as also customers some refurbishment projects. The revenue decreased 6% organically, 13% in total. We see the biggest impact coming from U.S., which is a significant market for our aftersale.
EBITDA adjusted ended at SEK 76 million, a margin of 27.3%, and the strongest margin in more than a year. Supported, of course, by our actions, but also a favorable mix in the quarter. I also would like to mention the Verta acquisition that closed in September. Fully in line with our ambition to grow our aftersales and expand our coverage, of course, also especially towards the BMU customers. Next page, please. I leave for Tobias.
Thank you, Ole. We're on page nine, earnings summary. Our EBITDA adjusted result of SEK 103 million was SEK 49 million lower than Q3 2019. Of the drop, industrial equipment accounted for SEK 32 million and construction equipment of SEK 11 million. As we mentioned, the drop in the results for these business areas was largely volume driven, but also impacted by risk provisions of SEK 10 million within industrial equipment. Both rental and aftersales improved the margins compared to last year, and also recorded higher results from prior quarters this year. Favorable product mix and already some effect of cost reduction measures supported the improvement for these business areas. As we announced a few weeks ago, the reorganization and restructuring focusing on secure our margin going forward led to tie-in cost of SEK 35 million in the quarter, and we expect another SEK 25 million in Q4.
Amortizations of SEK 9 million is SEK 2 million lower than last year, largely an effect of intangibles that now are fully amortized. Our financial net was SEK 6 million, which is SEK 6 million better last year, where deviation is currency related. The interest net and leasing costs were on par with 2019. With earnings before tax of SEK 52 million and tax cost of SEK 11 million, we had a tax rate of 22% compared to 23% last year. We expect to remain on this level also for the remainder of the year. The result for the period thereby amounted to SEK 41 million, where the reduction then is impacted by lower EBITDA results and then, of course, the non-recurring expenses, partly offset by lower taxes. We move to page 10, results for the period and earnings per share.
With a result of SEK 41 million, this translated to an EPS, earnings per share, of SEK 2.75. This impacted by the non-recurring expenses of SEK 35 million. We move to next page 11, cash flow. We had a very strong operating cash flow in the quarter of SEK 206 million, which can be compared with SEK 134 million last year, and significant improvement in cash conversion. The main driver of this was a reduction in working capital, largely driven by our high attention of cash collections and continuously reducing the days of outstanding of receivables. The improvements was noticed across all countries and business sales having the largest impact in the quarter. We also reduced the inventory levels in Q3, but here there are room for further reductions and improvements in this area.
With the increased attention and addition, we also included, as mentioned before, SEK 12 million of the non-recurring expenses relating to inventories. Our investments in fixed assets was SEK 23 million in the quarter, which the majority relates to replacement equipment and additions to the rental. Our focus on cash flow remains. We don't see or plan for any major investment, in fact, in fixed assets for the remainder of the year. We move to the next page 12, net debt. Our net debt continued to decrease from SEK 1 billion by end of last year to SEK 854 million now end of Q3. The reduction is driven by the improvement and the good operating cash flow. We have SEK 341 million operating cash flow for the year-to-date basis, which is SEK 65 milion better than last.
We have made investments of SEK 85 million during the year, which is basically on par with 2019. We had lower dividends, SEK 94 million compared to SEK 149 million last year. Our leverage is 1.68 by end of September, that is higher than the 1.33 that we had in December last year. The positive effect of the lower net debt is offset by lower EBITDA results. To summarize, we have been able to strengthen our balance sheet. We remain having a solid and stable financial position. With that, I hand over back to Ole again.
Thank you. We are at page 13, the New Heights Program. Two weeks after I started here, I kicked off a business strategy review. This was then driven by some first impressions, but also input from the board and the fact that the group had not delivered on the financial targets over time. My aim is to create a plan where we will deliver on our financial targets over the business cycle. Two weeks ago, we introduced the New Heights Program, a program done in three steps will take us then to new heights and will run towards 2025. Currently, we are in step one, reviewing and tuning to have the foundation set right.
Step two will be the year where we set profit before growth and focus on lifting the group to the right profit level, while we also finalize and start implementing the division strategies that will secure that we can deliver on our targets moving forward. Step three will be to drive this strong, profitable growth where we deliver on our financial targets over the business cycle. Next page. What are we doing or have been doing now? We have updated, as we presented two weeks ago, our new group vision and core values. To say two words about the vision, we felt that it was limiting us a little bit, that it had the word vertical in it, so that was taken out, updated. Now we have a little bit of a wider group vision.
We structured an organizational structure where we have four customer-centric divisions, which do have the full accountability and the mandate to act. They are also responsible both for the OE and their own aftermarket, because from the customer perspective, they should be the one best to know how we should develop our value proposition towards that segment and how we should go to market with our complete offer to provide most value to our customers and also to the Group. We were coming from more of a matrix organizational structure where it was both countries and the business units reporting to me, I felt also it was a need to clarify and make a more lean, agile structure.
We are also accelerating and putting more focus into innovation and our technology leadership with also digitalization and this customer-centric value proposition, as I talked about, by having the divisions focusing on this and owning these questions. I also note that we are low in R&D spending, so that's something that definitely we will have to increase moving forward. Again, we need to make sure we do the right things, and these are things that will be owned and should help us remain the leader and accelerate growth going forward. We are establishing a people and culture function at the group level in the leadership team. People, it's our most important asset, and really, we need to drive that strategically from a group perspective. Then we are setting profit before growth, securing margin improvements and trying to move then the group into the right profit area.
next page, please. This is also what we presented then two weeks ago about our restructuring program, where we are taking out 120 employees, around 5% of the workforce, 80 from manufacturing and 40 from SG&A. We're also doing efficiencies and improvements on the capital management side. In total, a saving of SEK 60 million and the one-off costs of SEK 60 million, where now then we took SEK 35 million in quarter three, and the remaining part is planned to be taken in quarter four. next page, please. Also for the future value creation for the group, and also as a guiding principle for the divisions when they now start their work on their strategies, we will have this steering wheel.
In Alimak terms, maybe a pinion wheel, where we then have the customer at the center of everything we do, should be considered in all decisions we make. We will ensure, as I've been talking about, our technology leadership, helping provide the customer with the most possible value. We are putting attention to our most important asset, our people, and we will drive, of course, operational excellence in our own operations. All in a world where digitalization and sustainability will influence everything we do. As I said, I strongly believe that all our products and solutions going forward will be intelligent, they will be connected, they will be remotely managed, and they will be part of the ecosystem where they operate and not standalone products. Creating these four strong independent divisions means that they will take care of most themselves.
Still, of course, there are areas where the group will play a vital role in the value creation for our stakeholders. I mentioned then digitalization, sustainability, the corporate culture, people development. These are areas where the group can support, and we can work together across the divisions, where we then leverage and secure speed and quality in these areas. The divisions can also leverage our global footprint and utilize a common back office setup. Together within the divisions, we also have the widest technology base in the industry and the product portfolio, which also is something that we can leverage across divisions and then towards different customer segments. We do have this common global service delivery capability, which with a common group function, the delivery capability, something that we will continue to strengthen and we see as very important for our future development.
Of course, the strong financial backing that we can provide to all divisions. Next page, please. We come to the summary of the quarter. Of course, we are not happy with the quarter, and especially U.S.A. as a market was very weak. That we also do see is a consequence of the current political situation, something we hope should ease somewhat after the election, because the COVID-19 crisis is also used in a political manner, and this had a significant impact on construction. BMU continued to face a difficult market situation. Considering that the summer months was very soft, we saw much better market conditions in September. We are not losing market share, so we feel that we are well positioned to capitalize on improved market conditions.
We are also taking, as you have seen, and we will continue to take active measures to safeguard our profit margins. We will continue to see them improve going forward. We have launched a New Heights program, which will take us to deliver on our financial targets going forward. With that, we are at the last page and the Q&A. Thank you.
Thank you. Ladies and gentlemen, if you do have a question for the speakers, please press zero one on your telephone keypad now. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Once again, that's zero one on your telephone keypad to ask a question. Our first question comes from Johan Dahl of Danske Bank. Please go ahead. Your line is now open.
Yes, thank you. Good morning. Just a couple of questions on your order intake. Can you explain, Ole, your conviction that you're not losing market share? Just looking at construction, for example, that was a business that had orders of 800 per year, if we look two years back, and you're now logging about 100. It just seems a bit weird that the average age of the fleet among your rental companies should age to that extent. Also on the BMU side, should we interpret here that projects are basically just at a standstill for more than half a year on the BMU side, that you're not getting awards on BMUs at the moment?
Yeah. Thank you, Johan. Let me take the BMU side first then. We are still taking orders, so it's not a standstill. What we see is that there is a delay. It is some hesitation to make the final call. That's basically what we are seeing. Then also last year, we had some bigger projects, and some of these are more than put on hold or delayed because there is an uncertainty in the market. That's basically the main reason for BMU. We are close to these projects. We see that they are not lost or stopped. We see that they are still there, so we see the pipe that remains.
As for the construction and the market share, we are not giving out any market share data, but as far as we know and we see, we are in a downward cycle. We do not feel either the same thing here. We are close to our markets that we are losing out. It's also what we are having here, it's investment products. That customers are not investing in new hoists or elevators doesn't mean that the construction site is standing still. They are running their existing construction sites, but they are not investing in new capital equipment unless they really need it. That means opening more sites than they have equipment, new sites than they have equipment for. Then, of course, they are trying to prolong, I guess.
Yeah, they are not renewing either in these times because cash is king and it's the main uncertainty, and then you don't do absolutely more than needed. I think also we have a small weakness in our offer in the sense that we are not really strong on the smaller side, where we talk about hoists with less capacity. There we have competitors that are stronger than us, the way I understand it. I think that's an area that we need to address, and we are addressing it now. That might also be a consequence because we are definitely the best for the bigger and the heavier hoists. It could also maybe be that the smaller are doing better, where we are not so strong now.
Could you just help us possibly to quantify a little bit what's the need to raise prices here to remedy the currency situation? What sort of magnitude are we talking about now?
We are not qualified that yet. We are basically working on price in every single project. That's a constant thing. That's a way of working that we have in the Group here. You see the currency effects that we're having now. As Tobias or we have said, we hedge when we make the contract. Of course, if this continues going forward, then we will be forced also to increase prices. Remember that a huge part of our product cost is steel, which is priced in dollar. Therefore, we also have an offset there for part of it.
Thanks.
Thank you. Once again, I remind you, if you do have a question for the speakers, please press zero one on your telephone keypad. There are currently no further questions from the teleconference. I will hand back to the speakers for any further remarks.
Yeah. We shouldn't wait another minute or see. Yeah, no. Yeah, thank you everyone for listening in, and thank you, Tobias. Yeah, hope to talk to you again soon. Thank you. Bye-bye