Long read
LKQ’s third-quarter results still name its German ERP, nearly 6 months after go-live. Decide now what will count as over
On 29 October 2026 LKQ, the vehicle repair parts supplier, published its final third-quarter results. Its chief financial officer named the German ERP implementation, the enterprise system that runs orders and finance, among the drivers of weakness in Europe. The quarter ended nearly 6 months after that system went live.
The release gives no date for recovery. Your own programme needs a written test for when the go-live is over, and it needs that test before the date.
Below: the release’s figures, the one question LKQ’s call answered, the one it left open, a sum and 4 moves for your plan.
What moved this week
The series asks one question: when does a change start to pay? Each line is set against it.
- New. LKQ, 29 October: the final Europe segment EBITDA margin (EBITDA is profit before interest, tax, depreciation and amortisation) for the third quarter was 4.6%. The preliminary range on 23 October was 4.1% to 5.1%.
- Holds. LKQ withdrew its full-year 2026 guidance on 23 October, and the 29 October release leaves it withdrawn.
The release names 2 drivers for a weak quarter in Europe
| Europe segment | Third quarter 2026 | Third quarter 2025 |
|---|---|---|
| Revenue | $1,453m | $1,620m |
| Segment EBITDA | $68m | $162m |
| Segment EBITDA margin | 4.6% | 10.0% |
| Segment EBITDA, 9 months to September | $303m | $454m |
All figures are LKQ’s, from its 29 October release. LKQ prints a margin of 4.6%, and $68 million over $1,453 million rounds to 4.7%, so LKQ’s dollar figures are rounded.
Rick Galloway, the chief financial officer, gave 2 drivers: the ERP implementation in Germany, and lower volumes in the United Kingdom and Benelux.
John Mendel, the chairman, said recent performance “has not reflected the strength of the business or met the standards we expect, particularly in Europe”. He called “the appointment of a new CEO, leadership changes in Europe, and the engagement of Alvarez & Marsal” important steps. The new chief executive, Salvatore Abbate, starts on 15 December 2026. The board has also suspended its strategic review.
The call answered one question and left one open
LKQ’s call that day went further. These lines rest on Fortune’s transcript of it.
- Answered: how much the ERP-related disruption reduced EBITDA. Galloway said: “We estimate that the ERP-related disruption in Germany reduced EBITDA by approximately $43 million in the quarter.” That is LKQ’s estimate, and the release prints no such figure. He said most of the remainder “reflects lower volumes with negative leverage effect and lower vendor rebates tied to reduced purchase volumes”.
- Left open: when the disruption ends. LKQ gave no date. Galloway said the revenue recovery “has lagged”.
These are 2 separate figures from LKQ. The fall in Europe’s segment EBITDA was $94 million year on year. The chief financial officer estimated the disruption reduced EBITDA by about $43 million in the quarter. He did not say how he reached that estimate.
Galloway said orders delivered on time and in full “reached 95% across the region”. He also said: “The delivery performance has improved, and we haven’t seen the revenue return.” A delivery measure that improved while revenue did not is the case for more than one measure on your own test.
Your board will ask both questions about your own programme, on the day a quarter disappoints. LKQ’s chief financial officer could put an estimate on the ERP’s effect in the same quarter. We think that is the standard for your programme.
LKQ’s own figures show a fall of $94 million in one quarter, from all causes
Here is what the 5.4-point fall in margin comes to in dollars. The sum is ours, from LKQ’s published figures.
| Europe segment, third quarter | Sum | Result |
|---|---|---|
| Segment EBITDA, 2025 | From the release | $162m |
| Lower revenue, at the 2025 margin | Revenue fell $167m; at the 2025 margin of 10.0% | about $17m less |
| Lower margin on 2026 revenue | $1,453m × 10.0% = $145m, against $68m | about $77m less |
| Segment EBITDA, 2026 | From the release | $68m |
So most of the fall sits in the margin, about $77 million, and less in the revenue, about $17 million. The split depends on the order taken: margin first gives about $8 million and $86 million, and the ranking holds. The sum says nothing about cause, because both drivers can sit in both lines. LKQ’s own estimate is that the ERP-related disruption reduced EBITDA by about $43 million in the quarter.
Over 9 months, Europe’s segment EBITDA is $151 million below the same period of 2025. Of that, $94 million fell in the third quarter, the second quarter after go-live.
On your own business, take 1% of one quarter’s revenue. That is what 1 point of margin is worth, and the size of the question your go-live test has to answer.
Write down what ‘over’ means, in the numbers your business runs on
A go-live is over when the business is back at a level you chose in advance. Pick 3 to 5 measures a board would recognise. Record each one’s level before the date, because recovery can only be measured against it.
Done when: every measure has a level from before go-live, and your finance lead has agreed the figure.
Set the date, and what happens if it is missed
Give each measure a date. Then write what follows if the date passes: who is told, what happens to the money, and whether the next phase waits. This is easier to agree before go-live, while nobody is defending a result.
Done when: each measure has a date, and the plan says what happens to the next phase if it is missed.
Name one person who declares the go-live over
The person who runs the area declares it, in front of the sponsor; if the area is finance, agree who declares with the sponsor first. The integrator advises. Tie the end of the integrator’s extra support to that declaration, so the calendar alone does not end it.
Done when: a named role can declare each area over, and the integrator’s contract or plan says so.
Keep the go-live’s cost on its own line from the first month
Give the go-live its own cost code. Book overtime, temporary staff, extra freight and rework against it, and estimate lost orders each month. That line lets you give your board an estimate in the same quarter.
Done when: your finance lead can show that line for every month after go-live, with one named owner.
Those 4 moves cost a few meetings, and the numbers behind them will never be easier to collect.
The people taking decisions during a migration hold the reasons for them, and those reasons can leave with them. This week’s Way Pointer, on capability.ai, is for them: how to sort those decisions and keep the reasons.
Sources
- LKQ Corporation, LKQ Corporation Announces Results For Third Quarter 2026, 29 October 2026. investor.lkqcorp.com
- LKQ Corporation, preliminary third-quarter 2026 results release, 23 October 2026. investor.lkqcorp.com
- LKQ Corporation, third-quarter 2026 earnings call, 29 October 2026, transcript published by Fortune. fortune.com
- LKQ Corporation, first-quarter 2026 earnings call, a third party’s transcript published by Fortune. fortune.com