Dfds A/S Copenhagen Ord

Thank you and good morning and welcome to DFJS' Q4 and full year 2024 conference call. I'm as usual joined by Karen Boosen, our CFO, and Søren Bonnhold, our Head of Investor Relations. This morning we released our 2024 numbers. As you know, we already released the headline EBIT numbers for 2024 and the 2025 outlook, and they are both unchanged since January. going into 2025 our story is quite simply that our strategy is to unlock value from our network and to do that we have three specific focus areas that we aim to resolve in 2025 in 2024 we succeeded with organic growth and we are getting good customer feedback on the capabilities of our network we have a strong foundation to further unlock value The three areas that we focus on in 2025 are not new. It's the competitive situation for the Mediterranean ferry network, it's the turnaround of the acquired Turkish transport company, and it's the logistics boost projects that we initiated in 2024. I'll talk more about these three areas shortly, but let us first turn to our Q4 and full-year performance If you turn to page 3, there is a quick recap of our strategy launched at the end of 23, moving together towards 2030, with the five pillars for unlocking value, protect and grow, profit, standardize, digitize, moving to green, and be a great place to work. We have clear targets that we need to achieve on the green transition that that we are on track to deliver. And then we have a cash flow focus. We want to leverage long term between two and three. Right now we are of course above that. We are focusing on deleveraging to get into this range. We have communicated that we are looking at non-core assets and we have indeed disposed of the Oslo Copenhagen route in 2024. and we have various working capital initiatives to also maintain the cash flow focus. Turning to page four, the network was expanded in 24 but saw a financial challenging year. If we look at the strength and the expansion, then we achieved the organic growth that we had communicated The acquisition of Strait of Gibraltar delivered the business plan that we based the acquisition on in 2004. With the ECOL acquisition, we have now created a structure that resembles what we have on the North Sea, where we have a very successful door-to-door complementing the ferry routes. We won a 20-year concession agreement agreement with the Jersey Islands and looked very much forward to starting that service the 28th of March. And we completed the sale of the Oslo route, as mentioned. But it was a financially challenging year. Results obviously fell short of expectations. We experienced both macro and market headwinds. And we also had underperforming units in the network. We saw a competitor entry in our Mediterranean market and we acquired a company that we knew required a turnaround and were producing losses from day one. So 2025 will be a transition to recovery to more acceptable earnings levels. We unfortunately have had to say that the leveraged ambitions, the adjusted free cash flow ambitions, ROIC ambitions that we had set up for 26 and 27, we have to not have those at the moment until we see that this transition works out as planned, and then we'll come back and evaluate more long-term goals. We have three specific focus areas that I already mentioned and we'll come back to in more detail in the following pages. But first, if you move to page six, I will hand over to Karen for more details on the numbers.

Thank you Torben and good morning everyone. First a few words on Q4 and then some words on the full year. Overall for Q4, we continue to see the revenue growth that we have seen throughout the year. We see 5% revenue growth in Q4. If we do net of acquisitions, that is still a negative, unfortunately, growth of 2%. But with the equal acquisition and straight or triple tie, if you compare to Q3 last year, we have still a positive growth. We also see growth in our passenger revenue, in particular from the channel. and also some good organic growth within the logistics divisions from the UK. That is all in Q4. However, our EBIT for Q4 is far from reflecting that growth. On the contrary, it's a very, very depressed EBIT we see in Q4, particularly when you compare to the previous years. This is driven very much by our situation in the Mediterranean, by the competitive situation. but also because we had a significant one-off gain in 2023, which relates to the sale and leaseback of three ferries in 2023. The logistic EBIT is significantly depressed in Q4, and without the addition of ECOL, it would not have been as depressed. But Equal contributes with quite a significant amount, which is 62 million, as you can calculate from the numbers on the slides. The rest of logistics, we have a relatively robust business in the UK. But however, our Nordic and continent logistic business continues to be affected by the challenges in automotive, the Brexit phase three, and overall, the very low growth in Europe. So overall, an EBIT of the quarter of $2 million. Turning to page 8, just highlighting a few things. Obviously, we've already taken the bridge to the $2 million in EBIT. Our financing costs are up $57 million. which is quite significant. That includes a one-off gain from our sale and lease back last year, which was $33 million. So the real like-for-like difference is only $24 million, which is increased interest costs mainly and some increased leasing payments or interest on leasing. Moving to the full year. For the year, we see overall a good growth, overall 9% growth. Now we are on page 10. And overall, we see a full growth of 9%, including acquisitions, and then a 2% revenue growth if we only include the organic part. We see some good growth, in particular, from our passenger part of our business, which is driven by the general business Overall, we also see a good growth organically from our logistic business for the full year of 3%, just above. And then the addition of the acquisitions, which is mainly by Strait of Gibraltar, but also by ECOL, and then a few other additions. But the vast majority is Strait of Gibraltar and ECOL. EBIT for the year, as already communicated back in January, is 1.506, and this is on page 11. Our ferry EBIT is down significantly again compared to 2023, both driven by the one-off gain, but also driven by the situation in the Mediterranean, some cost pressure in particular in our North Sea area, and then also a better impact of our bunker bath spread in 2023 compared to 2024. Logistic overall. This includes a negative impact from the acquired equal entity, which is included in the last one and a half months of the year, as we just touched upon in the Q4, but then also generally down in Nordic and continent driven by the same factors as I just mentioned, the market headwinds, cold chain challenges, automotive sector depressed, and so forth. So I'm not going to comment specifically on page 12, the full-year income statement, but it is included for reference. There is just mentioning the reversal of the impairment related to the sale of the Oslo route, and that was as it hailed for sale, and the gain was $33 million. We reversed that in our impairment, just making that clear. Turning to page 13, cash flow and capital for the year. Overall, a slightly lower operating cash flow from our business and then capex of 1.45 in line with our guidance and expectations and we then ultimately deliver an adjusted free cash flow of 1 billion. That's also communicated back in January. This is below the guidance provided that was the last latest guidance given was 1.2, so slightly lower. Finally, our financial leverage at the end of the year see an increase, and this is an increase that comes from the additional debt taken in relation to the acquisitions made over the course of the year, in particular in the end of the year. And the combined increased debt and the fact that the entity acquired, ECOL, is at the moment not generating profits but has negative EBITDA, means that our leverage ratio, net EBITDA, net interest-bearing debt to EBITDA increases to 3.9 at the end of Q4. If we exclude the leasing debt, it's 3.7. With that, I will turn back to Torben.

Thank you very much. On page 15, we talk about the ESG traction We reduced our ferry emission intensity from our own fleet by 1.7% when adjusting for acquisition, so keeping a like-for-like basis. We see that the pace of transitioning to low-emission ferries is challenged. Fuel availability, fuel costs is holding us back. but it is not impacting our 2030 goals of 45% intensity reduction. E-trucks, now 131. We install solar panels. Different port terminal equipment is beginning to become electric, also driving our electrification. We have increased the ratio of... women in management positions by one percentage point, and the focus on safety and now very much increased focus on the land-based activities are starting to show results with lower incidents, but still work to be done. Turning to page 17 and coming back a little bit to to the network and the priorities. If we look at 2025, the majority of the network is expected to uphold performance or improve. North Sea, we've seen stable commercial performance from the North Sea in the past and also expected in 2025. Some cost pressures have taken down the result in 24. We expect to be able to eliminate the negative impacts in 25. Channel 24 was a turnaround year where the competitive situation has eased. Capacity has been taken out. and we saw improved earnings that we expect to continue to see in 2025. Baltic Sea has been in a tough place since the war in Ukraine by Russia started, but we did see a bottling out, and actually in Q4, despite the The VAT Q4 results, Baltic Sea was actually showing improvement, an improvement that we expect to continue to see in 2025. Strait of Gibraltar, even excluding the Tarifa route, is expected to deliver the business plan that we based the acquisition on. They are off to a very strong 25, both volumes and rate-wise. On the logistics side, we've seen a very robust UK and Ireland business unit. Parts of the Nordic and continent units are challenged, as we've talked about during 24, and I'll come into some details on that in a moment. And then, of course, we have won the New Jersey contract that we will soon commence operating. But turning to page 18, After having talked about the strength and the positive developments, there are three focus areas to resolve. It's adapting the Mediterranean network, it's the Turkey and Europe South turnaround, so the previous ECOL activities, and then it's showing successful results from our logistics boost projects. On page 19, we start with the Mediterranean environment. Overcapacity was created when a new competitor started operating mid-September. We focused initially on defending our market shares, and we did that successfully. Now we turn to rebalancing of the market through reducing capacity making sure that we get the right rates for our services so that we in all likelihood push some market share to the new competition, but on the other hand secure good utilization of our own capacity and better rates. Moving to page 20 and the Turkey and Europe south turnaround, it is on track. It was a tough situation that we stepped into, but we knew that. And strategically, in a two to three years timeframe, it makes sense for DFDS. The progress so far is in line with our breakeven ambitions for the end of 2025. This week we announced a redundancy round of 125 Istanbul office employees. We start to see some positive commercial traction from combining with our existing network when selling to customers We have started right-sizing the capacity of the previous ECOL business by reducing trailers, reducing trucks, and also creating more flexibility through subcontracting a significant part of the haulage capacity. We are looking at how the 10 European offices that we have taken over from ECOL is best optimized in our existing European network and have some good developments there as well. Over the next couple of months more information will be released from this turnaround project. Turning to page 21, the logistics boost projects. It is not a secret that logistics, Nordics and continents have been under earnings pressure. There's been a lot of focus on addressing this. It's been complicated by a continued macro downturn even and market slowdown that had been stronger than we had expected and a rebalancing of supply and demand have dragged out. But there is full focus and detailed plans for these eight projects. If you look at the table, you see those in blue are from the Nordics, and those in black are from the continent business unit. And it is cold chain and automotive that are particularly hard hit. Some impact, of course, also from the general market slowdown and the geopolitical situation where the Brexit phase three is hurting our fresh meat, our ability to move fresh meat in a cost-effective way between UK and the continent. which is further now impacted by the food and mouth disease breakout in Germany that have led UK to cut off import from Europe for 90 days. We'll not go into the details. We can take some of those in the questions if you have more details that you would like. Moving to page 23 for our outlook 2025, We only expect very modest tailwind from the markets, so muted growth assumed to remain in the European area due to the macro uncertainty that has not been reduced the last month with the new administration in the US, obviously. We continue to see market growth in the Mediterranean and North Africa areas, but of course our freight ferry business in the Mediterranean will not benefit from this due to the competition and the actions that I mentioned before that we are going to take or are taking. Road transport markets in Europe are assumed to remain highly competitive with some overcapacity which reduce our ability to pass on cost increases. On the passenger side, markets are all stable. Channel still has some backlog from COVID that we expect to generate growth in 2025. To turn it to 2024, the EBIT outlook is, as communicated, impacted by These focus areas that I just talked through, we expect revenue growth of 5%, a significant part coming from the full year impact from the ECOL acquisition, but also organic growth. The outlook for EBIT is around $1 billion and is reflecting growth. the negative impact from Mediterranean and Turkey and Europe's south turnarounds. Operating capex, 1.6 billion entirely maintenance capex in the ferry division and replacement of equipment on the logistic side. Adjusted free cash flow around 1 billion accomplished also through some working capital improvement, whereas I in the introduction mentioned a lot of focus is placed right now. On page 25, a quick summary of our key priorities for 25, protect and grow our network strength, organic growth focus, resolving the three focus areas that I went through. strong cost focus, strong cash flow focus, and the continuation of our green transition and diversity so that we deliver on the communicated targets. With this, we will turn over to the operator for handling Q&A. Yes.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and then one on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and then two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and one at this time. And the first question comes from from Carnegie. Please go ahead.

Thank you and good morning. First a question on the ferricite, the drop of some 625 million in EBIT that you guide for in 2025 compared to 2024. Can you help me understand the math here a bit or maybe bridge it a bit? I understand this is, of course, much relating to the Turkish competition. When Grimaldi initially entered the trade here, you guided for an impact in Q4 of around 75 million negative. Multiplying that by four as a run rate, we end up at 300 million negative. and then hence an annual effect, I would argue, of around 225 million in 2025. Correct me if I'm wrong here. I just need to understand how you come from 225, which, so to say, was embedded in or alluded to by your initial guidance of the impact, and now 625, so this deviation of 400 million, Is it because things can get worse, or are there other factors or other things in the network that we should be aware of?

It's hard for me to bridge to the numbers you mentioned here, but I can try to create some clarity on how we see the downturn. The MED is probably... you know, close to half of the downside. And then we see general cost pressures. As we mentioned, we see some automotive elements. We have sold the Copenhagen Oslo, and that has actually quite a negative impact because we When an asset is held for sale, we stop depreciating, so a positive result from 24 will not come in 25. So that's the main elements explaining the downside.

Just to understand here, so around half the impact or half the reduction is relating to Turkey or what is it exactly you say here? Sorry, Tom.

Yeah, I said, you know, at least half is related to Turkey.

Okay, then we are not that far from each other. Okay, good. And then maybe some color on the net effect of you losing a license between Gibraltar and Morocco, so one route down there, but then you add to Jersey. What is the net effect here? Is it slightly negative, or how should we think of that?

It would be neutral to positive.

Okay.

Well, let me correct that. That's compared to if we had kept the license. In 2024, we made an extraordinary strong profit on Tarifa. The line we have lost because we were the only operator for the first six months of the year. The competitor had gone out of business and was only replaced by a Stena Amas competitor mid-year. So we are actually losing compared to 2024. But that was a one-off income in 24, you can say, in any case.

Yeah, understood. And then just one question remaining here. On the leverage side, you aim for the range 2 to 3, and you are at 3.9 now. With the guidance you have, it's difficult to see that you will change that dramatically here in 2025. So what is the aim here? When should we see DFDS back in the 2 to 3 times leverage range?

Well, as we said, we have... This continued our longer-term range speculations, but it's clear that it is a very, very high priority to get close to that range, and as you rightfully conclude, it's probably not in 2025. 2026 should see us approaching that range, but of course from above.

Okay, and then just one follow-up here. So will that in any way impact the way you see your CAPEX into the green transition or the plans you have for these six green vessels that you plan to put on stream?

We obviously have to take into account the reality of the situation. You can say we can call it green CAPEX or we can call it replacement CAPEX. It's basically vessels that replace old tonnets in the system. And I think we have previously communicated this 2 plus 2 plus 2. We've also said that with 2 plus 2, we can still achieve our 45% reduction delays are being experienced in any case due to lack of power to X fuels. So we are, of course, seeing, you know, can we delay things a year here or there? And that is being looked into. But four of the ferries are replacements, and two of them will definitely come before 2030, and the two others are the channel electrics. that are dependent on electricity, especially on the UK side, that could also drag out a year or two. But the targets are intact. Will the CAPEX come a little bit later? Possibly.

Thanks a lot.

You're welcome.

The next question comes from the line of Jakub Klinkowski from RBC. Please go ahead.

Hi, just a few questions for me. So obviously the 3S Istanbul route has been suffering for a while, and I think you did mention you were trying to do some capacity reduction there, but could you maybe try us, help us to sort of quantify this sort of capacity reduction? And if you have any other lever to pull there that would improve the situation in the short term? then if the supply-demand balance does improve, then how quickly would you expect the pricing to recover?

Yeah, it's of course somewhat sensitive topics on a public call, but we have reduced our capacity already on that corridor and have announced further And then, of course, we have seen that our network is very, very strong and that the more complex of our customers need our network. So we are, of course, making sure over the next month that this is also reflected in the pricing in the corridors. So the reduction in tonnage is taking place already, and the price adjustments are not coming in the distant future, but rather in the near future.

Okay. Could I maybe just ask one more follow-up question? So also on the MAD, I understand you had a stop at the Marta sports on the European side of the Istanbul last year. So I was wondering if this sort of involved any additional cost and if you're sort of trying to stick with it or abandoning it.

We briefly tested a direct line from Matas to Italy. That has been discontinued. We do some buyer calls at the moment, testing whether the market is there for that or whether we should focus on the Asian side.

Okay, cool. Thank you. You're welcome.

The next question comes from the line of Lars Heindorf from Nordea. Please go ahead.

Thank you and good morning. First question is regarding the cash flow guidance. I don't know if you can give us a bit more insight into your expectations of the net worth and capital improvement.

I think at this stage we have focus on it. We have some different things that we can see that will succeed with that should bring us this improvement. But I think we would probably prefer to talk more about it in Q1 when we hopefully can demonstrate the improvements.

But, I mean, the reason why I'm asking is because, I mean, with my math, it has to be fairly significant. I mean, in 25, you reported an EBIT of 1.5. You reported adjusted free cash flow of 1 billion. Hence, cash conversion of 64%-ish. And if I look back, the only year where you've been having a cash conversion which have been above 100% was actually in 2023. Most of the other years, the average is around sort of 60%, 65%. And you guide for a 25 EBIT of $1 billion and a CAPEX of $1.6 billion. So that suggests that it must be very material, that improvement in order to reach the adjusted free cash flow of one billion. Or am I wrong?

You are correct that we need to see improvements and we have projects underway to create that. We have also seen quite a deterioration of our net working capital over the last years. So we fully believe it's possible. But we'll come back with more details after Q1.

Okay, and then on ECOL, just a housekeeping question. I understand you're correct that it lost 62 million in the fourth quarter last year?

That sounds about right.

Yeah. Now, the update that you gave here the other day, I think you sold 258 trailers or something like that. How much is that out of the total, and how much more needs to be sold now?

We need to reduce the number of trucks, and we need to further reduce trailers. But trailers are also a matter of... that we've simply had some that for our work has not had the standard they needed. They were standing, and we have more that are standing. The value is not tremendous for those trailers, but both those and some old trucks drive costs that we can get rid of.

But can you indicate, I mean, are you halfway there? I mean, it's one third?

No, no, we're not halfway. Okay.

Okay, and the aim of improving and reaching break-even by the end of 2025, which you say is still the target, and then at some point up to 5% David margin, I mean, the path to that, is that mainly caused by these reductions of hardware, or what is sort of the main trajectory to get to your targets?

Well, it's right-sizing... our equipment and fleet. It's the reductions in personnel that you saw communicated this week. It's price increases. We have loss-making customers that we will say goodbye to. And then we have significant increases coming for a large portion of our customers as well. And then we will have some synergies and benefits from the European network as that gets integrated in our existing continent.

Okay. And then on some of the growth, you mentioned that you have the Jersey coming in. You said it's going to be Neutrals are slightly positive. Then there's a new route from Spain to Rotterdam, and you have the route from Egypt to Italy. How much of these routes here, are they consuming more invested capital? Are you charging in missiles for these routes, or is this something which can be managed by existing capacity?

Jersey, and just to make sure, and you probably didn't mean it like that, but Jersey will be positive. It was just the net of the loss in Tarifa and Jersey.

Oh, okay, sorry.

Yeah, so Jersey is positive from day one. Day one, it consists of two vessels that we pull from the lost service in Tarifa, two high-speed crafts that are being... approved by the UK authorities and changing to UK flag as we speak. And then we have two chartered investments to also service this market. Down the road, there will be investments in new tonnage for this 20-year contract, but initially it will be based on the existing and chartered tonnage. On the Spanish route from May, it's one of our existing vessels, Belgium. Was there other routes you asked about?

Yeah, then the Turkey-Italy?

Yeah, yeah, yeah. That was the reduction in the network to Italy has basically delivered tonnage for the Egypt route. So we have not been out building or buying any vessels for these initiatives. We have lost one vessel as you may have seen that hit ground off the coast of Norway. That was a constructive total loss by the insurance companies. So So we have also reduced tonnage by one ship, a little bit of an unfortunate background, but an old ship that we could also replace by existing tonnage. And it was part of the ARC cooperation with the Danish military, but they have accepted now a replacement vessel for that cooperation as well.

Okay. And what about the status? Because, I mean, as you know, I've been worried about this logistics division now for quite a while. In terms of the integration of HSF, I think I've been asking this before about freight management systems, IT systems, and all these things here. And now you add ECOL on top of this. And I know, as you said, there are probably some low-hanging fruits that you can do in terms of selling off stuff in ECOL and reducing FTEs and so forth. But in terms of the backbone and all these IT systems, I mean, how are you going to progress there if you're still not in place with some of the previous acquisitions?

Well, it's absolutely a fair question, as we've also said before. The good thing is that our transport management system is capable of handling additional volumes. The challenge has been that HSF in particular has brought in services and processes that have not been all supported by our transport management system. So we have a delay there. On the ECOL side, the services that they perform are much closer to what we have with the full load and part load transports. So they will actually be put ahead of some of the HSF units in the integration. And again, we are rolling out or Karen is rolling out a new ERP system at the same time and it has to be coordinated with the introduction of D365 as well. But we have heavy implementation work going on. Yeah.

Okay, and then the last one is on Grimaldi. You said that you already reduced capacities. I think you had nine, so are you down to eight or seven or eight reasons? And that's the first question. And then the second part, have you seen any response on Grimaldi? Are they likely just to continue to operate what they already have? Are they reacting to your... attempt to increase prices or maybe even planning to add more capacity?

It's of course difficult for us to know what they are thinking, but they have these two vessels. They have for a long period announced a third vessel. Seems that that vessel enters the market a little bit later and is a little bit smaller than the one day or half the size of what they first announced. But I don't think we can make any conclusions from that. We have to follow our own path and the path is to take out capacity. We've gone from 21 to 19, I think, in total on this trade. So I think one, one and a half is on this Italian side reduced. And then we can see from our customers' response and reaction so far that our network is strong and have some qualities that they require. And based on that, we are recovering some of the price reductions that we have granted in the initial phase. And then we'll, of course, have to adjust as we see what the competitive response is.

Okay, thank you.

You're welcome.

The next question comes from the line of Ulrik Back from SEB. Please go ahead.

Yes, good morning. Also a question on the situation on Istanbul Trias. I noticed that in Q4 you declined your volumes in the Met by 4%. Can you perhaps quantify what it looks like quarter to date? And before you also mentioned the pricing level, can you by any chance comment on how low your prices are today versus before Grimaldi entered?

I don't know where you have those volume indications from, but... It's the Mediterranean volumes in Q4 year over year. Ah, in the Q4 report. Okay, yeah, yeah. And that's, of course, a consequence of the competitive situation It can also be different docking schedules that, of course, now impact us and didn't impact us before vis-à-vis the road. But we are not so concerned about losing 5 or 10% of the volumes. It is the focus on balancing supply and demand that takes priority with us. And there, as I mentioned before, We are taking out capacity, which of course will reduce our volumes with the aim to be able to recover some of the price decreases. And I cannot be specific in terms of how much the prices have dropped, unfortunately.

Okay. Then second question is on the North Sea region. I've read reports that some of your competitors, P&O and CLDN, they've been adding capacity on routes from the continent, I believe it's Belgium, to the UK. Is there any reason to be concerned about this development, given that you have a quite high leverage, so I suppose you are not willing to embark on a pricing war on that route as well?

No, we have seen that they've added capacity, particularly P&O actually, and a little bit to our surprise. Fortunately, the route is not in direct competition with us. The closest route we have to where this capacity is added is our Rotterdam-Felixstowe route. We've seen some loss of volumes in Q4 on that route. But it is restricted to that trade. So nothing to worry too much about.

And nothing on pricing in this corridor? That they have lower prices?

I cannot say if anything has happened there. But of course, you know, if we lose some volumes, it's harder to have price increases. But it's not a... It's not a major concern what is going on in that corridor because we are not directly competing with them. But of course, there will always be some marginal customers that may see that they can use the other services.

Understood. Then a question on your boost projects in logistics. You have the slide 21 where you list the different challenges that you have. Some of them seem to be quite structural. Baltic slowdown, also automotive in Europe and cold chain in general is probably structural declining. So can you perhaps just add some flavor on for these boost projects to succeed? Does it need macro fundamentals to improve? Or how is the mix between what the market should do and what you can improve internally?

I think the blue ones, we can fix ourselves. The one that is complex for us, the DOTS full load requires market help. The DOTS warehousing to a certain extent as well, but especially the DOTS full load, because that's such a competitive, such a large market that we need to see a balancing of the supply and demand there, and it also impacts actually our very our ability to get the right rates on the Holland-UK ferry routes. So that's a market thing. Dutch warehousing, to a lesser extent, because of our size in the market, we should still be able to get some goods for that, even with the slowdown. But, of course, it's easier without it. The big one, the continent-UK meet, There we have both the Brexit phase three, which has simply made it more complex, more expensive to trade between the two countries. We see some nearing and approaches between the two sides to reduce some of the pain. And maybe the new administration in the U.S. will actually accelerate that also, And then right now, food and mouth disease in Germany, unfortunately, has made UK cut off all imports of the meat. So that's costing us for a couple of months in this area. So that's, I don't know if it's structural, but it's at least something we cannot do anything about. But overall, these eight projects are on track to deliver. Let me be a little conservative and let's say that six of those should deliver at least 90% of the benefits.

Okay, that's clear. Then another question on the CapEx level beyond 2025. We've now seen over the past couple of years lower investment levels. And now again in 25, it seems as if, you know, the 1.6 should be around your maintenance CapEx level. For how many years can you sort of just do the bare minimum, which it seems you have been over the past couple of years, and before you need to, you know, hike the CapEx? And here I'm just thinking, excluding the green investments profile that you've also commented on.

Yeah, I think without tonnage replacement, we can stay at this, I think we've said 1.5 to 1.75 billion range. Maybe we have to add a little bit for the equal part, but that's a sustainable level if you exclude tonnage replacements.

Okay. And then some bookkeeping, please. Finance costs for 2025. If you could guide us here, it would be greatly appreciated because obviously your debt level has increased. But at the same time, we have seen interest rates declining a bit throughout 2024. So the net basis, would it net financials to be flat year over year or should they be up or down? Please some guidance here.

I mean, we have increased debt level, Oleg, as we also show in our end 2024. So even just from that, the fact that we have, you know, with the equal acquisition acquired, taken up more debt. So that in itself drives further interest cost. And then, obviously, the higher leverage can also have a small effect on that. So, yes, we will have... have higher interest costs in 2025, right? And we can come back to you maybe in more details on that.

Sure, sure. Thank you. And then final question, also just bookkeeping. Karin, you mentioned that you included impairment reversal connected to the Oslo route of, was it, yeah, 32 million. Yeah. Did you book that in Q4 or did you do it before? So just trying to get the underlying depreciation level for Q4, right?

Yeah. I mean, the sale closed in Q4, so therefore as a consequence of that, right? But we stopped depreciating earlier once the deal was signed in June. So there is those effects as well, right?

Okay, so just to be clear, you reported depreciations of 701 million in Q4. Would it be fair to add the 32 million to get to 733 million? It was taken before Q4, so earlier in the year.

The reason why we didn't close it was that there were other parts of the deal that had to conclude in order to make sure that it that it would stay at that reversal of 33, which is the net sale on the deal. And as the other elements were then neutral, then we could close it out, and that's why we only report it now. Okay. But it's correct. It was reversed earlier in the year.

Okay. Understood. Thank you.

There are no more questions at this time. I would now like to turn the conference back over to Torben Carlsen for any closing remarks.

Thank you very much. Hopefully you leave this call with a clear understanding of our priorities for 2025 to unlock the value of the network and to resolve the three focus areas that we have talked about. 2025 will be a transition year where we lay the foundation for getting back to a satisfactory earnings level. This is a very clear goal for us. Thank you very much for joining the call and for your questions. Look forward to speaking to you again soon. Have a good day.