Bpost Sa Ord

ladies and gentlemen hello and welcome to the b post group second quarter 2025 analyst conference call on today's call we have mr chris peters ceo and mr philippe darcian cfo please note this call is being recorded and for the duration of the call your line will be on listen only However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing key pound 5 on your telephone keypad to register your question. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. I will now hand over to your host, Mr. Chris Peters, CEO, to begin today's conference. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen. Welcome to all of you, and thank you for joining us. We posted the materials on our website this morning. We will walk you through the presentation and we'll then take your questions. As always, two questions each would ensure everyone gets a chance to be addressed in the upcoming hour. Philippe, over to you for the financials. I'll then come back with a financial outlook and a follow-up on some of our strategic priorities for 2025.

Thank you very much, Chris. Good morning, everyone. Welcome. As you can see on the highlight on page 3, our group operating income for Q2 stood at 1,092,000,000 euros and increased year-over-year by 10.5%. At constant perimeter, excluding the 195,000,000 consolidation impact of Stasi, our operating income decreased by 9% on 91,000,000, mainly driven by the following factors. Persistent headwinds in North America, following contract termination announced in 24 and in the earlier part of this year. Lower press revenue driven by the new press contract that came into effect in July last year, combined with decline in domestic mail against high comms in 2024. Our group adjusted EBIT came at 58.3 million euros with a margin of 5.3%, or 37.7 million excluding the 20.6 million EBIT contribution from Stasi. On a like-for-like basis, this reflects a year-on-year decline of 20.1 million. A constant perimeter, with the exception of our BNI last mile segment where EBIT is down, primarily driven by press as lower revenue has a significant impact on profitability. all our other segments are growing, notably supported by continued margin actions at Radial US, where we managed to absorb the revenue decline and maintain a stable debit. More broadly, at BPOS Group level, the results we are presenting today are in line with our expectations. Before diving into the financial performance of our business unit, you will note on slide four that below EBIT, our financial results decreased by 44 million. This is mainly due to four factors, most of them being non-cash. Within the cash item, we know that high interest expense reflecting the increase in the debt following our bonds issuance in October last year and mid-June this year, and lower interest income driven by lower money market rates and a lower cash balance following the acquisition of Stasi in August last year. Together, these factors account for roughly between 10 and 15 million. As a reminder, following our Capital Market Day, we successfully issued a 750 million bond in mid-June, in anticipation of the 650 million bond maturing in less than 12 months. Through a cash tender offer, we have already repurchased just under 30% of this bond. The remaining amount will be repaid next year using the proceeds temporarily placed in money market instruments, securing a positive net carry compared to the coupons of the maturing bond. Most of the variation in the financial result is linked to non-cash items, including unrealized FX impacts, mainly on our USD intercompany loans and the absence of last year's higher IS19 results. Let's move now to the details of our three segments. I'm on page 5 with the last mild segment. We see that revenue declined by 40 million to 536 million euros. Domestic mail recorded around a 42 million decline in revenue, of which 22 comes from the press, mainly due to new contracts with the editors following the end of the press concession in June last year. Excluding press, mail recorded a sharp revenue and volume contraction this quarter, mainly due to a base effect as last year's performance was uplifted by notably the European, federal and regional elections. made recorded an underlying volume decline of minus 12.4% for the quarter, compared to only minus 3 last year. The decline in main volume led to a revenue impact of 30 million euros overall, though this was partially offset by a positive price and mix impact of plus 4.1%, equating to 10 million euros. As a result, the domestic mail revenue decreased by 8% or roughly 20 million euros year over year. On parcels, our revenue increased by 4 million or plus 3.1% year on year, reflecting a volume growth of 4.1% and a negative seismic effect of minus 1% this quarter. On the volume side, the reported 4.1% actually correspond to the underlying growth of 1.6% when adjusting last year for the volume loss call of the April strikes in 2024. Over the past months, this growth has been mainly driven by the outperformance of marketplace and strong momentum in apparel, supported by favorable weather conditions in June this year. As for price mix, it stood at minus 1% this quarter. When adjusted for commercial one-offs, it's in the low single-digit range, consistent with our full-year guidance. Revenue from our other activities, including retail, value-added services, and personalized logistics, declined by 2 million euros over year, mainly due to the repricing of state services, while Dana Group's revenue remained nearly Let's move to the P&L on last mile on page 6. Our total operating income decreased by 37 million euros or minus 6.2%. And on the cost side, our OPEX, including DNA, slightly declined by 0.7% or 4 million. This mainly reflects lower FTE resulting from a lower mail and press volume and efficiency gains. notably with the resumption after the upper strikes of the organization in our distribution rounds and in retail offices. But on the other end, some other higher salary costs per FTE with a plus 3.4% year-on-year increase driven by salary taxation in June 24 and March 25. Starting next quarter, our performance will be assessed on a like-for-like basis following the end of the press concession in June. This quarter, however, the minus 33 million decrease in adjusted EBIT is mainly attributable to the drop in price revenue and to a lesser extent to lower male revenue against a strong comps prior year. Moving on to 3PL on page 7. 3PL revenues increased by 143 million overall. but declined by 54 million or minus 20% when excluding the 197 million contribution from Stasi consolidation in the quarter. In 3PL Europe, Stasi's revenue remains broadly in line versus last year. Gradient and active end sales were up 13% year over year, continuing the trend of previous quarters, fueled by customers onboarding as part of our international expansion efforts and upscaling activities targeting existing customers. In 3PL North America, revenue decreased by 59 million. A constant exchange rate corresponds to a decrease of 23%. Resulting from revenue churn from contract termination announced in 2024 and early 2025, and lower sales from existing customers, our so-called same-store sale, which offset the contributions from new customer launches, mostly coming from the radial fast-track initiative. Let's move to the P&L on the 3PL on slide 8. Excluding Stasi, while the total operating income decreased by 20%, our operating and DNA were down by 22%, primarily driven by lower variable expenses. OPEX in line with radial US revenue trend and a continued and stronger improvement in radial US valuable contribution margin rate. VCM increased by approximately 6% year over year, reaching its highest level to date and delivering a gain of 10 million euros this quarter compared to the same quarter the year before. A constant perimeter, our adjusted EBIT improved by 6 million euros year-over-year, from minus 5.5 to just breakeven in Q2, mainly reflecting radiance, effective margin action, despite a 23% top-line drop. Regarding Stasi, the EBIT contribution came at 21 million with a margin of 10.6%. Moving on to cross-border on page 9. cross-border Europe revenue increased by 3 million or plus 3.4%. This growth was supported by solid volume increases from China across all key destinations, including Belgium, which helped offset adverse market conditions in the UK. As in previous quarters, our top line in North America remains under pressure. Cross-border North America revenue declined by 4 million or minus 7%, as Landmark Global continues to face volumes of wind, while the broader Turkish environment is slowing down existing business and delaying new business opportunities. Overall, our cross-border operating income slightly increased by roughly 1%. As shown on page 10, our OPEX and DNA decreased at the same time by 2.7%, given by lower volume-driven transportation costs, reflecting lower North American and UK volumes, alongside improved transport rates. This quarter, we also benefited, to a lesser extent, from a favorable cost phase-in, which is expected to reverse in the third quarter. Coupled with the productivity gains in North America, this resulted in a 5 million increase in EBIT. Moving on to corporate segment on page 11. Adjusted EBIT improved by 3 million to minus 8 million as lower consulting costs helped offset higher payroll costs driven by more FTEs and statutory pressure from two salary indexations. Then we move to the cash flow on slide 12. The net cash inflow in the quarter amounts to 482.5 million, mainly reflecting the bond issuance and the cash tender executed in June this year. Besides that, the main items to flag are the following. Cash flow from operating activities before changing working capital stood at 134 million and decreased by 30 million versus last year. mainly reflecting higher APTA and lower corporate tax payment. Change in working capital and provision amounted to minus 125 million. The plus 4 million variance is primarily explained by the termination of the press concession in June last year. As a reminder, under the former press concession, compensation was typically prepaid, whereas the revenue under the new press contract are now invoiced according to the standard billing cycles. This quarter also includes the impact of the settlement of some terminal dues. The net cash outflow from investing activities totalled 27.5 million, driven by our capex for international e-commerce logistics, parcels, lockers in Belgium, and capacity extension in our domestic fleet. This item constitutes the main variation in our free cash flow, And in the net cash outflow from financing activities amounted to 500 million, mainly reflecting the issuance of the cash tender on the maturing bonds, as well as the absence of dividend payment this year. Chris, this now brings us to the outlook and our strategic priorities of 2025. Thank you, Philippe.

And we can happily announce an improved outlook. As you remember, February this year, with the results of 2024, we had an initial guidance of 150 to 180 million of group EBIT. In May, at the Q1 results, we had an unchanged outlook, but with a reduced exposure to the low end of the range. If we look today, and we can announce an EBIT of around 100 million for the first half of the year, which is largely in line with the results, with the plan that we had. allows us now to reaffirm our guidance, but even also to say that we target now the higher end of the range. Several elements will support in the second half of the year this result. Let's zoom in maybe first in Radial US. In Radial US we see that we continue to reach productivity gains with an improved variable contribution margin. Secondly, we new, so the reorganizations have been at full speed over the last quarter and will continue to do so, which makes sure that we have our costs under control for the beginning last mile activity. So obviously we are living in an uncertain world, but we are confident that we can actually target now the higher end of the range. If we then zoom in on our capital markets today we already said that we were making speed that many of the pilots were in good shape i'm not going to elaborate fully in this quarterly update but at least give you some highlights on the progress that we've made if we zoom in on 3pl europe meanwhile the new organization structure has been installed and we continue to deliver synergies as an example you see that stasi has already onboarded meanwhile one of its clients in the polish market so that moved from france to poland as well so we're serving them now in multiple markets and also active ans has now a client that they onboarded for the french market recently so thanks to the bigger geographical reach that we have. In the US, fast track is really starting to create momentum. There are already six clients that we are actively serving while the product was only launched in March. what we see happening there in the US. If you look in Belgium, we have launched already a year ago the renewal of our products. Most of them become more hybrid and more quality products. In the funeral notices, a new product for the license plates. The government has decided that the annulation of a license plate in a postal office is abandoned as a public service. We launched a commercial product on that side. And also if you look at the side of the bee boxes or locker product, we are soon reaching 2,000 lockers and we still aim to have 2,500 of these bee boxes the receiver side and as said before many of the p2p pilots are in good shape we already know to scale them up if you look at cross border we have been focusing on two new lanes the reverse lane in north america from from canada to the us seven new clients have signed up for that new lane and also in spain we have a first large has been onboarded as we speak and will start to deliver as of Q3 of this year. And obviously, given the fact that the group is further expanding, we also realize more and more synergies at the transportation side. So as you can see, we are building up momentum. We're preparing there where we can to scale up and to speed up. But obviously, this is all in a environment with some challenges, but we have an optimistic outlook going forward. And therefore, We are now ready to take any question that you would have. Again, two questions each, please, so that everyone gets a chance to be addressed during the session. Operator, please open the lines.

Ladies and gentlemen, as a reminder, if you'd like to ask a question or contribute on today's call, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. Please also ensure your line remains unmuted locally. You will be advised when to ask your question. The next question comes from McKeel DeClerk from KBC Securities. Please go ahead.

Yes, hi, and thanks for taking my questions. I have two. The first one is on the radio. Can you give a bit more color on the fast track and what to expect in the second half and the phasing of it? Because it was still down more than 20% this quarter, but that should improve in the second half and then especially going into the start of 26. So a bit more color on that. And maybe more important, you were able to keep your profitability in the second quarter at Radial US quite decent, even improving versus last year. What should we expect for the second half here, especially that you have some real estate management and some benefits from the leasing coming into effect into the second half? Should we maybe even expect an improvement in the profitability in the second half for Radial US? So that would be my first question. And the second one is on the volumes, the parcel volumes in Belgium. Of course, a bit of a tailwind compared to the strikes from last year. However, underlying, it's still 1.6%. You guided at the start of the year, mid to high single digits. Later, you came back and said it was maybe more around the mid-single-digit range, but Evidently still a bit of a catch-up in the second half, which is more of a good comparable. How do you expect to achieve this or what should accelerate this trend? Those would be my questions, please.

Okay, thank you. Maybe on fast track, as said, we onboarded six clients, meanwhile, with an ACV, which is in the higher 40 million. Checking with Philippe, I think that's correct. And we have another six that signed, but we still have to onboard. I think what is important is that you see that the time between signature shorter than what we had in the past so there we actually have a relatively optimistic view second thing is as well we have in that new vertical support portfolio we have less cyclical clients means of course that we have less of an effect of a peak season in the end but also that we continue to onboard clients throughout the peak season in this specific product if you look at the profitability yes indeed the teams have done a really decent job in controlling losses that we have announced earlier this year and so I have to congratulate our teams over there for the good performance they had over there however I would say like I would now not expect size the organization. They have managed the lease exposure. We don't have in the pipeline at this point of time any further improvement coming from that side. So you will still have a little bit of fast track effect, but the profitability improvement, we captured it fast, we could turn around fast, but we don't expect additional things coming in in the second half for radial If you look at the volumes in Belgium, indeed what you see is we could win back some of the client volumes, however we still are, say, impacted by some of the working on capturing a higher share of wallet within those clients. It's a little bit, let's say, difficult to have a precise view of that. For sure, it will not be at the higher single digit. It will be closer to somewhere in between where we were now and the middle single digit as announced. Our teams are working every day to win back those clients, but as you know, sometimes it takes a little of time before we win back the full confidence of that, so those volume forecasts, I would be at the cautious side as we speak.

Okay, that's very clear. Thank you very much for the answers.

The next question comes from Mark Zwartzenberg from Ing. Please go ahead.

Yeah, good morning. One quick follow-up on Michiel's question. You mentioned the onboarding of the six new clients at Radial with a 14 million annual run rate. Is that correct?

No, no, no. The ACVs are the already onboarded clients in which, as you might have seen in some of the communication we've done, there's one large client which is actually above the typical fast track size, which means that we actually have a higher 40 million ACV of the already onboarded clients, but the size of the clients that we have in the pipeline are typically the size of the client that we expect, which is, let's say, in the range between 2.5 and 5 million. That's a typical, let's say, client in the fast track range. And so the six swans will not adapt that portfolio of the first six.

So one is, just for my understanding, so one is 40 million and the rest is one to two million. No, no, no, no.

We are typically in the range two and a half to five per client, but you have one which is substantially above in the first six.

What is then the 40 million?

The sum of the six together, of the first six onboarded clients.

Exactly, okay. Ah, okay, okay. And is there already some revenue in Q2, or is everything coming in in the second half?

No, there is some revenue in Q2, but it's rather limited so far.

So we started to have first shippings in May, I think. First shippings in May we had for FastTrack.

And then on your outlook, you made almost 100 million in the first half, just the debit. And your average is at the higher end. So they're suggesting that there's a maximum of 80 to come. But last year, you made almost 100 in the second half. Well, you have some extra tailwinds coming, onboarding of new clients, still some lower lease costs, potentially no impact from strikes, et cetera, et cetera. Let's hope so. So you have a few positives as well. You have one month extra from Stasi. How would it be that the result for the second half with your guidance is so much lower than last year? Is that logical?

So, in fact, the situation is different business unit by business unit. Typically, if I start with cross-border, mostly H1 equates to H2 or the other way around. It's more or less the same. They are not so much impacted by peak. When it comes to radial in the U.S., H2 is by far higher than H1, because it's very much peak sensitive driven. It has always been the case, there is no change in the pattern on that one. When it comes to 3PA in Europe, we will see a higher H2 than H1, because the synergies will start kicking in in the second half. They already start kicking in, but mostly in the third and the fourth quarter. So that would lead to having H2 that would be significantly higher than H1, based on what I've explained. But in Belgium, it's the opposite. We always have seen that H1 was significantly higher than H2. Again, it's not 24, it was 23, 24 and before. The highest quarter is typically the first quarter. The second one is the second in rank. due to the low volume in the summertime, the third quarter is close to zero in terms of EBIT. And then there is the impact of the year-end peak, which has always demonstrated to have higher top line, but from a percentage margin contribution, it's lower than the first half. So if you mix all together, that explains why we are guiding on those numbers.

That would mean quite a significantly markdown on beverage last mile. There's loss here as well.

in parcel volume, but it's unfortunately also compensated by higher costs to handle because it's based on flexibilities that we have to bring into the system. And so we don't make a substantial better EBIT. So there is a higher revenue in the fourth quarter, but let's say a stable or slightly increase of EBIT. But the third quarter actually is the one that is, let's say, of the two makes the the total result combined with mail in uh many last miles of the belgian business the postal business combined with parcel business will be lower than in h1 which is fully aligned with what we've seen in the past with your notes which we've made around there so there's no surprise in that it's just what we have always said

Yeah, true, true. But if you look back, also the second half is not that much weaker than the first half. You have a few extra tailwinds and some headwinds you have now in the first half, the strikes and stuff. So it would mitigate a bit the difference between first half and second half. That's why I'm feeling that there's a bit of caution building.

It's really the fact that to deliver these higher volumes, we really need to add a lot of additional resources, and it comes at a cost. That's really what Chris explained, and this is something that we have observed since many years. Of course, when you were comparing phase value of it, you had in those numbers in the past, The price that was extremely stable quarter over quarter, so it was diluting a bit that impact or hiding a bit that seasonality impact. Now it's really come at full light.

Maybe one quick follow-up, the price mix on the parcel side was a negative, I think initially always kind of work. a positive four-year impact. Is that because of the client mix changing, and is that continuing, that we should also expect maybe a negative price mix in the second half?

That's still an impact of the strike, where we see that the large clients, which typically have a lower margin, have come faster back in terms of the volume than the ones that we see on the smaller clients. As you can imagine, of course, our sales force is full out, the biggest volumes are. And then you have to go one by one with the other clients, which takes more time. And so there we're still in the process of winning them back. And so that gave this negative impact of product mix. So the compensation that we have seen in the volume loss through to the strike, the win back was faster on the larger clients than on the mid-sized and smaller clients.

That's very clear. Thank you very much.

The next question comes from Marco Limite from Barclays. Please go ahead.

Hello, good morning. Thanks for taking my questions. I've got two. The first one is on your financial expenses this quarter at 42 million euros. I mean, you disclosed that there are some other elements in that number, but just wondering what could be, let's say, a normal run rate for financial expenses for Q3, Q4? and also what we should expect directionally in 2026 on, again, on the financial expenses number. And then the second question is on Stasi. So if I look at your slide on page seven, you're basically showing all of the CPL Europe revenue increase is coming from, the consolidation of SASE. At the same time, you've got real Europe and active ends growing 13%. Am I right in thinking that SASE revenues are actually down year over year? And if overall SASE revenues and business performance is developing in line with your expectations? Thank you.

Let me start with the financial expenses. So thanks for your question. So what we said that in the financial result there is some cash and non-cash element. If I come on the cash element which the variation equates for a variation between 10 and 15 million, which is just the situation that before, prior to the Stasi acquisition, we had cash that was invested at higher interest rates, and now we have a lower level of cash, and by the way, interest rates went also down, and we have additional debt coming from the acquisition of Stasi. So basically, based on what we share with the market, the issuance of the bond that we did last year and this year, you have a pretty fair view of what is going to be going forward. Now, this is for the cash part. The non-cash part, which is, as I said, if the cash part is between 10 and 15, the non-cash, you could do the math compared to what I said, is highly volatile and depending on the evolution of the US Euro exchange rate, since we have intercompany loans, so between be post-NV to the U.S. market, and since the U.S. dollar weakened, of course, we had to do a mark-to-market of this, or revaluation, if you want, at the end of the quarter, since it's a balance sheet item, then explain most of the variance. If we would be making the close of the book as we speak, we would have already regained a quarter of the shortfall that we are seeing due to the exchange rate evaluation. So to guide you, I think you should take the rates that we have seen on the issuance of the bond. This is what is the best proxy for future interest expenses on a cash item. On a non-cash item, I cannot predict the evolution of the US dollar euro rates. On Stasi, I start and you continue, Chris. So, on Stasi, 3PL Europe, indeed you are absolutely right, we continue to see significant growth on retail and active events, since we were enjoying that one since many quarters. And Stasi itself delivered a good profitability, because as we said, 10.4 EBIT percentage to save, which is a very reasonable one. It's fair to say that the top line development on the portfolio of Stasi was a bit less strong than we could have expected, while having different situations. We have U.S. really growing very well, U.K. being a bit difficult. By the way, this is what we have mentioned also on other parts of the business. We see that the U.K. market in terms of volume development is difficult. Our colleagues, of course, also experienced that one. And in France, the activity was equal to the year before. that profitability was in line with expectation.

Okay, if I can follow up on that topic. I think you're still looking for management role for 3PL Europe, is that right? How the process is going?

Thank you. Well, the process is on track. It's not yet in the phase that we can communicate, and so we will communicate at the moment that

Okay, thanks. The next question comes from Mark Zek from Kepler Shoebrew. Please go ahead.

Good morning. Thank you for taking my questions. I'm afraid I need to come back or follow up on the H2 profit that is implied by the guidance. I guess I understand what you said on Ben's last mile, H1 versus H2 expectations. But still, I believe your guidance implies then that Benelux model H2 this year versus H2 last year, there will be quite a step down in profitability. And if you can help me understand how that happens. And then the second question, more like a macro question on Radial US and If you could elaborate, if you expect any impact on Radial US from the abolishment of the US de minimis regulation that end of August will basically now affect all countries in addition to China, Hong Kong. Will this have any impact on Radial for 3Q4 or for 2026? Or is Radial not a all exposed to an e-commerce business that was coming into the earth under the deminimus regulation. Thank you.

Did you take the first one? So H2, really I want to emphasize on the fact that the peak execution comes at a higher cost than the normal operations. Also, in terms of absolute EBIT, the EBIT contribution will be dependent of the volumes itself, the top line. We see that the consumer confidence in Europe is not at its highest, to the contrary. So, if we combine the two, we believe that it's the best forecast that we could make at this stage. This being said, we will continue to improve on an operational standpoint, so we will not take a potential lower growth rate on top line as a fact and not doing something. I think operational measures are taken as already started in the first quarter, the second one, and some additional will come to be able to compensate for that. But we do not believe that it will make the fourth quarter as a very high in terms of EBIT, unlike we can see in the first and second quarter, where it's more base loaded. where we have the best operational efficiency.

At the minimums chains, what we see is quite some activity around discussions on local fulfillment, but not yet leading to specific contracts. What we see that is realized in the pipeline was already, let's say, in a discussion a increase of local fulfillment, which is positive for the business of radio. Obviously, it also has the whole tariff discussion in the U.S. has quite an impact on what is happening in our cross-border business, and there you see shifts in lanes. Luckily, our teams have been able to go with the shift in lanes, and so we see that they're managing it fairly well so far. It's a very complex environment. For instance, the US-Canada lane is under pressure. It is compensated to some extent with the Asia-Canada lane where we have no higher volumes coming in. You see as well that we're developing new lanes, the reverse lane from Canada to the US. the business that we see today but so on the side of the fulfillment I think that you have two effects that we can expect one is likely more possibility in the fulfillment space to grow the business on the other hand probably at some point of time in less, say, consumer confidence in the U.S. Not today, as we see, of course, but something in the long run. So we see those two parameters that will wait on each other. Hard to predict fully in detail which one will win in that dynamic, but I think the good news is we have a very active sales team today, really hunting on the opportunity side, both across border and in the radio business. So we're confident that we try

not seen that we could have potentially seen this in anticipation of these changes higher volumes we have not really seen it yes so we looked as well in the lease optimization if there was an opportunity for earlier inbound into the us which we have not seen no okay thank you

The next question comes from Hank Slotboom from The Idea. Please go ahead.

Good morning, Chris, Philippe and Antoine. Well, looking at today's figures, I guess you can say the first blow is half the battle. I've got two questions. One is a follow-up on the previous question with regard to cross-border. Chris, you said you were seeing higher activities on the China-Canada lane, and at the same time, we see you've been adding clients in cross-border on the Canada-US route. Is that a structural thing? The minimalist rule is now affecting all countries in the world, and yeah, we all know that the relationship between the US and Canada is not at its best shape ever. And the second question I had is on the parcels and that's on the negative impact of the price mix effect. Is that more like a mix effect or is it something like you had a strike in the first quarter Is it a sort of peace offering to the clients to keep the clients in? And have you seen any material damage to your client base on the back of the strikes we've seen in the first quarter of this year?

Yeah. Okay, let me take them one by one on cross-border. Of course, hard to predict because what we saw already in the Canadian situation was even before the minimums change and even before the tariff impact on Canada, we saw already a changing buying behavior of Canadians. So there was a lower volume on the U.S.-Canada lane and an increased volume on the Asia-Canada lane. And so it's not only driven by tariffs, it's also driven by a sentiment. And of course, predicting the sentiment with the current situation in North America is a little bit hard for us to say. I think that the good news for us is, of course, that we are present on both lanes. And so whatever will shift in those lanes, I'm also looking at other lanes towards Canada where we can reinforce our presence. So we try to make sure that we continue to be a very strong player on that Canadian market there. What you see is new, which is that before the flow Canada to the West was fairly lower, and we have actually seen an increase of activity also pushed by extensive sales efforts for our team, but we see now that we are reinforcing our position in the region. And that is probably something that we think will be a structural trend. Also, to be admitted as well, today it's not that material that we should make it a big point, but it's important that we see that there's a new dynamic starting there, and at least we're Price-mix effect is really a volume mix effects that you see today. So that is that as an effect of the strike, we have a number of clients that deviated. There were already dual carriers that deviated to the other carriers, some of that volume, and it took us time to bring it back. But overall, actually, these are typically the larger accounts who were there. let's say, really good in rebuilding that confidence with them and ensuring that they would come back. What you see is, of course, in the, let's say, the clients that bring lower volumes, effort linked to that, and that's typically volumes that come at a slightly better price mix than the ones that you have in the larger size. So it's today not a we discount to win clients back, we spend time to get the right volumes back, but we have a little bit of a negative mix effect on the speed in which volume comes back to our facilities. And neither a temporary discount, huh? No, no 10-3 discount. It's really building on that. Obviously, I'm not going to reveal the details of that, but there's a lot of commercial discussion on that, which are more to do about reliability, ensuring to have better plans and all these kind of elements to ensure that we can deliver high quality to our clients in any circumstance, which we have spent quite some time on, but it has not been about commercial discounts to keep volumes.

If I understand you correctly, you're saying there's no structural damage in the client base as a result of the strikes. And as far as the negative mix effect is concerned, with a bit of luck, we might see it turning positively again if the smaller clients come back again.

I'm happy to see your confidence. We're a little bit more cautious than you are in the sense that, of course, we have to talk to these clients every day. And I think that there has been some confidence issues with some of those clients. I don't think we're back to normal level yet. But we see that we're on the right track to build it up again. And obviously, if we're able to build it up again and build that continent, that is a very good base for future growth of our activity. But it's a little bit early to already cry victory on this one.

We will not cry victory on the war, but the battle maybe, because in the quarter, the second quarter, the price-mix effect was slightly positive.

Okay. And would you allow me a small follow-up on the first answer you gave? Is it fair to assume that the growth in clients on the Canada-US lane could be a prelude to clients opting for... local fulfillment as well?

Yeah, it's clearly linked, the one to the other. That's a good observation, I would say.

Okay, that's all. Thank you very much.

Ladies and gentlemen, there are no further questions, so I will hand it back to Chris to conclude today's conference. Thank you.

Okay, thank you then everybody in the call for having taken the time to be with us and for your interesting questions. As a reminder, our third quarter result will be published in early November, exceptionally this time on a Wednesday, November 5th, instead of the usual Friday. Until then, we look forward to staying in touch. And for those who haven't taken their holidays yet, I wish you a great break. Thank you very much and have a nice day. Thank you.

Thank you for joining today's call you may now disconnect.