Hiab's Organic Turnaround Is Real—but EVS Is Doing the Heavy Lifting
First organic sales growth in three years and a record margin path, yet orders and U.S. demand still lag.
HIAB.HE · Earnings Call · 2026-10-23
The headline is loud; the organic signal is quieter
Hiab's Q3 2026 had the look of a breakout: sales of €481m, up 39%, comparable operating profit of €69m at a 14.2% margin, comparable EBITA of €75m at 15.5%, and €98m of cash flow. But strip out the EVS acquisition and the story narrows. Organic sales rose 5%—the first positive organic quarter in three years—while organic orders fell 4%. Orders received of €441m were 26% higher only because acquisitions added €101m. That is the central tension: the P&L is inflecting, but the order book is not yet confirming a broad industrial recovery.
Scott Phillips framed it plainly: “Q3 was our first quarter in three years with organic sales growth 5%” — Scott Phillips, CEO · 2026-10-23. That matters because Hiab has spent multiple quarters cutting costs and defending margins against a U.S. equipment downturn. The profitability improvement is real—equipment margin went from 8.8% to 12.6%, services margin reached 24.6%—but it is still being flattered by cost savings and acquisition mix.
EVS: the growth engine and the accounting noise
Environmental Vehicle Solutions, formerly Labrie, is now the main character. EVS contributed €87m of orders and €103m of sales; ING added another €13m. Management raised its synergy expectation to an above-€12m run rate by 2029, split between procurement and sales synergies. That is a more concrete number than investors had before, and it explains why the stock narrative is increasingly about integration rather than the legacy cycle.
But EVS also brought a warning. CFO Mikko Puolakka said Q3 EVS profitability was lower because Hiab took over €87m of inventory and ran a full stocktake across all EVS manufacturing sites: “we wanted to conduct a full stocktake in all EVS manufacturing locations. Due to this, there has been some production stoppages during the quarter” — Mikko Puolakka, CFO · 2026-10-23. Management insists the underlying margin remains in the high teens and that 17% is still the right medium-term anchor. The market will have to decide whether that is a temporary integration cost or the first sign that the acquired margin profile is softer than advertised.
The accounting is also heavy: €5m per quarter of purchase-price amortization above the comparable operating profit line, plus €6m per quarter of order book amortization below it for two years. Gearing rose to 67% after €900m of debt for the deal, though cash flow was strong enough to repay a €150m bond in September. This is a company digesting a transformative acquisition while trying to prove the organic business can grow again.
Environmental Vehicle Solutions represents a perfect fit to our strategy, and it certainly supports both our top line as well as bottom-line growth ambitions.
The U.S. is still the missing piece
The Americas told the opposite story. Headline orders jumped 62% to €214m because of EVS, but organic orders in the region fell sharply—management attributed it to the absence of large key-account orders above €10m versus a strong comparison period. This is not a new theme. Hiab has been waiting for a U.S. recovery for several quarters, and the same headwinds persist: higher interest rates, soft housing and refinancing-driven remodeling, and customers delaying capital decisions.
Phillips did not pretend otherwise: “we still see a market that is impacted largely by the same factors that we have discussed before” — Scott Phillips, CEO · 2026-10-23. The truck OEM recovery that analysts keep asking about is concentrated in Class 8 tractor chassis, not the vocational and delivery applications that drive Hiab's products. The company has consistently guided to a 6- to 12-month lag; in July, Phillips said “we expect to see anywhere from a 6- to potentially a 12-month lag between what you see reported in the truck OEM side versus when that should start to translate into a positive variance of order intake” — Scott Phillips, CEO · 2026-07-22. That lag is still running.
The longer-term support is fleet age. Phillips argued that replacement demand has to pick up in both legacy Hiab and EVS because “the fleet age is, of course, at a point where we have a high level of confidence that the replacement cycle will have to pick up” — Scott Phillips, CEO · 2026-10-23. The question is timing, not direction.
Refuse collection: a pre-buy bubble, not a structural break
EVS's end market has its own inventory cycle. Refuse collection vehicle orders were distorted first by COVID-era supply-chain bottlenecks, then by an anticipated 2027 emissions regulation that pulled some demand forward. The result is a distributor inventory overhang that is still being worked through. Phillips was candid: “there's still inventory that's being worked through on the distributor side” — Scott Phillips, CEO · 2026-10-23. That explains why sequential refuse orders improved but the outlook remains mid-single-digit growth rather than a sharp snapback.
This is a useful contrast with the legacy Hiab business. In Europe, management sees a steady recovery in waste and recycling and special logistics, but construction remains soft. The global market dynamics are a mixed picture: Europe gradually improving, the U.S. stable at a low level, and Asia-Pacific lumpy. That is not the sort of synchronized upcycle that would justify extrapolating Q3's organic sales growth.
What management stopped talking about
One of the more telling shifts is what disappeared from the narrative. In prior quarters, trade tensions and tariff surcharges dominated the Q&A; a year ago, Phillips said “the biggest impact at this point from the change in the trade policies has been on the demand cycle” — Scott Phillips, CEO · 2025-10-24. This quarter, tariffs barely register. Management said there were no notable tariff headwinds or price tailwinds in Q3. The surcharge mechanism has become routine, and the absence of tariff noise is itself a positive—but it also means the demand weakness in the U.S. is no longer explainable by a temporary trade shock.
The recurring services story remains intact. Connected equipment and maintenance contracts continue to grow toward the 2028 targets, and recurring services now make up roughly three-quarters of the service mix. That is the quiet compounding engine beneath the cyclical equipment business. It is also why management can hold the full-year outlook at above 14.5% comparable operating margin even while organic orders are negative.
The fourth quarter now has to deliver. Hiab expects orders booked earlier in the year to convert into sales, plus normal working-day seasonality, and management still expects 2026 to be the highest profitability in the company's history. That is a confident claim against a mixed order backdrop. The bull case is that Q3 was the inflection: organic growth positive, margins expanding, EVS synergies visible, cost savings rolling into 2027. The bear case is that the headline growth is acquisition-driven, the U.S. is still not participating, and the order book quality is weaker than the sales line suggests. Both can be true at once—which is why this report is more interesting than the +39% sales headline implies.