DSV A/S

Ladies and gentlemen, welcome to the DSV-AS call for the H1-2026 Interim Financial Report. I'm Moritz, your course call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jens Lund, Group CEO. Please go ahead, sir.

Thank you very much, and welcome everybody to our Q2 earnings call. We will quickly get into it, and if we move to the next slide, I think we have it. Okay, now it's moving. We can see the agenda here for the call. It's the same agenda as usual. And I just want to make sure that you also read the forward-looking statements so that we have the compliance angle covered as well. If we look at the quarter, I think the integration has progressed as planned, which still basically on course to complete the integration in 2026 and harvesting the silages that we set out to do. The quarter has led to some changes in the management on the roadside in order, what can I say, to bring some experience in that can handle some of these topics that are related to the integration. But we will talk a little bit more about that when we come into the road division as well. and then when we come to the EBIT we delivered 6.3 billion I can remember on the capital markets day that many of you had said that we had to pass the 6 billion mark and therefore it's also good to see that we managed to do so and it's the strongest quarterly result that we've had actually since COVID so definitely seeing that the impact of the Schenker acquisition is starting to filter through and then of course we also see here Now we've upgraded our guidance or narrowed it so that we took a little bit of the bottom away. Still, of course, we have a range of 2 billion, not least due to the uncertainty that we see globally. If we look at the integration itself, we can see that we've now done 60 countries. Many of the countries we've done are the largest, and we only have a few larger countries outstanding. So we've reduced more than 8,000 white-collar employees and of course there's still going to be that impact of additional headcount reductions during the remaining part of the year as planned in the business case. The impact is basically that we more or less expect the same as we announced on the Capital Markets Day, so not much new to mention there. And then there's a graph on the right side trying to also just Visually explain how the impact of the synergies is going to pan out. The financial highlights, the GDP up in this market but also of course because of the integration impact. The EBIT also up and We see that of course we still continue also to invest in integration through the special items cost, but Ebbe definitely up. The Ips also up and I think we've seen now an improvement in debts for the first time since we acquired Schenker, so that's also very positive. The cash flow, Michael will talk a little bit more about it, but I think there's been a little bit of comments on the cash flow already. that it seems unusually high. I think if we do adjust for some of the one-off transactions and they have gone into the bank account and also the high freight rates I think the cash flow is as it should be and what could be expected. So at least when we look at it from the company side we are comfortable. On the full year guidance I mentioned that and you can see the graphs below. Switching on to ANC, I think here we also had some debate on the capital markets day and also with investors during the quarter because we had as announced seen the trough in Q1 and now we see a conversion ratio on 42% which was also what was planned for in the business case and definitely also the expectation I guess in the market as well. So really glad to see that we managed to deliver on that. The freight rates have increased a bit. That's of course very good for the yields because also the volatility in the market means that we can sell additional services but of course it has then the adverse impact on the volumes where certain markets are downtrending because of the crisis. So we also mentioned here in the call that we'd seen that the volumes they are a little bit lower than what we'd anticipated but I guess that's also something that is usual in an integration that you focus more on the integration and perhaps a little bit less on the customer side. So all in all our EBIT increased and I think the conversion rates are up, so very positive about the development on the Annecy side. If we take the GDP here, you can also see for air freight that we are almost at 5 billion, so 13% up. And if we look at the yields, 8,700 per ton is also in the high end. but I guess that's also due to many of these issues that you have with supply chains being disrupted. Our most important area is of course these days on air freight the technology vertical that continues to drive volumes. We have sanitized our portfolio on ANC and we have definitely seen that some perishable volumes but also some of the volumes that we had in relation to Chinese exports, they have declined or we've reduced those volumes. So that of course also has an impact on the yield because the yield on those volumes was very low. So moving on to the sea freight. Here we see GDP 4% down compared to last year. I have a situation where we are hovering around the 4,000 per TEU in GEP and volumes a little bit up compared to last year. But this is in particular where we have seen a weaker volume development that was planned for and we are taking initiatives to make sure that we drive volumes then in the right direction going forward on the ocean freight. but all in all on the ANC side I think we are on the right track and the division is going to deliver continued progress also in the coming quarters because we are very advanced on integration also on the ANC side. Coming into the world delivered an EBIT of 999 but we'd also disclosed to the market that 250 million of these they are of a one-off nature So you can say in reality 750. That's then more than last year, but not satisfactory. And what is then the explanation for this? Well, when we've been doing the integration, we integrate both large physical networks, but also large IT networks. And it's been more cumbersome when there's big networks to integrate. For example, in some of the countries mentioned here could be Germany, France, and the Netherlands. So in the beginning of the year in Germany we had performance issues on the network and had to compensate quite a bit in the first quarter but also into the second quarter. Actually our delivery quality in Germany is now up to what it was before GSV and Schenker were integrated so we have delivery in full on time. at the 95% range, which is basically the performance that we've normally seen in a market like this. So we've also had some of these issues in some of the other markets. Of course, we take learning from these integrations that we're doing so that we eliminate some of that risk. So there's no really structural change to the aspirations that we have enrolled. because it's something that we have to overcome and then when we are on the other side of it we actually have the same performance as we had before but we've then eliminated one network both on the IT side but also on the operational side and this puts us then in a much stronger position for driving the company forward So we've then added Brian Ejsing's experience to the road team. He's been with the company for many years and has significant experiences in these type of integrations and that's really what has helped us to make sure that the delivery performance goes back to normal. Historically, if we for example look at the KPI called delivery in full, delivered in full on time, for example in the Schenker network it has hovered between 93 and 95 percent very seldom at 95 and currently we are at 89 percent so there's still a little bit of work to be done but we expect to be within that range in September month and that means that then the extra cost that we have on the GDP level when you don't deliver in full on time you have additional cost because you have to get express trucks or do express deliveries or do some things that basically then compensate so that the customer they get a good experience and you don't need to do that it actually drives quite a bit of cost also on the terminals so that's what you can see in the numbers and this is then a little bit about the road so there's nothing structurally wrong with our plans this is very important for me to emphasize but there are some transactional issues in relation to the integration that we are dealing with. Then of course I think the highlight of the quarter is definitely CL. If we sit here and produce 1.5 billion in a quarter, a return on invested capital is moving very fast in the right direction. Last year it was somewhat lower and now we can really see that we are moving basically according to the planning that we have on CEL. Also growing quite a bit not least with the tech vertical here because we have this global footprint that not many of our competitors they have where you can serve a customer on CEL either in Australia or in Japan or basically in Mexico or in the US or Europe or wherever it's relevant, the Middle East. So that definitely benefits us quite a lot and with the run rate that we are having we're gonna produce an outcome on the EBIT level in the six billion range for the year and if you'd asked me a year ago about whether we would be able to do that I would probably not have been able to confirm that but really glad to see how it's developed the CL side and as I said you know we expect actually continued progress also in the coming quarters when it comes to CL so very positive indeed and on that note I will actually hand over to Michael who will then take you through the basically more detailed numbers cash flow etc so please go ahead Michael yes and jump to page number 11

Some highlights from the P&L in the first six months of 2026. Firstly, of course, as Jens already explained, our EBIT has increased quite a bit to 6.3 billion, which of course we are very happy with. Revenue increased 23%, so it's quite a dramatic increase in revenue, which I'll come back to the impact on our network and capital in a second. in this quarter. The conversion rate for the group increased to close to 31%. This is actually improving in all divisions, and Jens also highlighted, especially ERC has seen quite an improvement from last quarter as well. So we are definitely on the right track here as well. Net interest cost is a little bit higher. If you compare with us here, now we have the Schenker business in all three months in this quarter. And then we've increased also some of our leases, which is impacting the net interest cost in that line. Finally, I think you also elaborated a little bit on that, Jens, our earnings per share. We can see that it has increased yet again from last quarter as well. So this is some of the highlights here on the P&L side. Then we have over the years spoken a lot about the cash flow. And as you also started out by saying, we will come back to this here. It's clear that our cash flow is impacted by higher activity in the second quarter here compared to last quarter. but especially the increase in the rates has impacted our network in capital. So it's relatively high these days. On top of that, we have some property divestment, also coming back to the 250 million you just mentioned before, where we have not received the money yet. The transaction was before month end of June and now we still need to get the money here within the next, Thank you very much. Look forward to that, obviously. So it is under control, so to speak. Then we talk about our gearing ratio. It's a little bit down compared to last quarter. We are ending at 2.7, which was 2.8 the last time. So we have actually paid back debt and reduced net interest rate debt. So I think that's a lot about the cash flow, so that's great, and we actually still have the target to come back to a normalized between 2% and 3% on an annualized basis, but of course the rate is impacting us right now. Then on page number 13, this is the financial targets for 2030. I know we spent a lot of time going through those at the Capital Market Day a couple of months ago, so it's just some housekeeping to have them in here. They, of course, remain unchanged also on the roadside. So from a strategic point of view, the way that we are heading, there's no changes during the quarter, so we still continue. on the roadmap that was, you can say, presented at the Capital Markets Day. And of course, we are still confident that we will achieve the financial targets and we have plans to do so. So that's just to conclude on that one. Then we have, like Jens mentioned, we have actually narrowed our range of outlook. We have increased the bottom from 23 billion to 23.5 billion. So, of course, due to the fact that we've already now passed six months, some could argue that the range is still a little bit high, but I would also say that the uncertainty which we look into is also quite high. So, for the remaining part of the year, we expect the Middle East situation to be as is, and that's how it is, this is the information that we have right now, so we need to work with that as an assumption. Then for the EMC market we expect for the remaining part of the year also to grow low to mid single digits and also that the yield will slightly decrease on that one. For the road it's also a little bit low to single digit growth in the road market and then of course like Jens talked about that Brian works on the recovery plants in the areas just mentioned before. So overall we increased the bottom of our guidance and we are continually confident that we are on track to deliver on the guidance as promised to you guys. And then back to you Jens for some of the key takeaways.

So I just reiterate that the earnings momentum is definitely positive in the company and We look forward to continue that journey also in the coming quarters. And then I think, you know, the Schengen integration, very soon we will not be talking much about that anymore because it will be something that is history. And then at the end of the day, of course, always pleased to be able to narrow the guidance in the higher end of the range. So with that said, I think we are basically ready for the for the Q&A session. I'll just remind you, you can press star and 1, but I'm quite sure the operator will do that as well. So, let's move on.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their 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 2. Questioners on the phone are requested to receive their loudspeaker mode while asking a question. In the interest of time, please submit yourself to one question. Anyone who has a question may press star and 1 at this time. And today's first question comes from Alex Irving from Bernstein. Please go ahead. Good morning. My question is on the road.

Can you explain the issue that you're having if you haven't the right cost to get the right on-time and in-fall delivery quality? How much of that cost is due to adding Q2, and how do you expect that to trend to Q3, Q4, and early next year? In other words, when do you think we'll be back on track, and is there anything else to highlight that's weighing on the division beyond delivery quality costs? Thank you.

I would say that if you look at the first half year, we've done some calculations about it. it's definitely more than a quarter of a billion that it's cost us and it's probably even closer to 500 million that we're talking about but it's estimates that we're talking about and every percentage that you are below it costs you a significant amount of money not only on the TEP but actually also on the administrative burden that you carry and this is the reason why that once we then get back to the normal range Right now we improve what can I say the we call a default delivery in full on time with approximately one percentage point per week. So getting back then on track and eliminating that cost here during the third quarter that is the primary focus that we are having and then basically we should be able to take that what can I say burden away from a financial point of view but definitely also from An operational point of view and a customer service point of view. So I think that's basically what we're looking into.

And the next question comes from Christiane Delchoux from UBS. Please go ahead.

Hi, thank you very much. Could I ask you on the Q3 EBIT, could you talk a bit about the building blocks, seasonality helping quarter on quarter, incremental synergies, Any other moving parts? I think consensus is $6.7 billion. Do you feel confident that the building loss can help you reach that? If I could just follow very briefly on the prior question, EBIT margin-wise in roads, how should we think about Q3, Q4? It sounded that there should be already an improvement in the underlying EBIT margin in Q3. Did I understand that well? And any more colleagues? Thank you.

We take road, I think, you know, there's a big summer period in Q3 that always, what can I say, has a significant impact, as you said, on a lot of infrastructure. And this goes for July and August, obviously, where you will have that headwind. September will be a good month, normally, when it comes to that. Right now, we are improving, but, you know, and we expect that it will help throughout the quarter. as we're talking about it but we don't really guide on a quarterly basis but you know when you look at the company in general we need to see improvements and of course in ANC where we get the impact from the synergies that you also saw now we make more than 1 billion more in Q2 than we made in Q1 we need to turn the table around in road I don't think you know that we're gonna see The full impact of that in Q3, but definitely into Q4. And then on CL, I think we will continue, what can I say, the slow grinding way forward. I think that's what I can say, because very soon you'll ask for a monthly budget as well, and we guide on a yearly basis.

So I hope this answers your question. Thank you. And the next question comes from James Holland from BNB Paribas. Please go ahead.

Thanks very much. Mike, when you come back from the free cash flow, is there anything sort of underlying that you're concerned about in free cash flow performance? Obviously, you've made it very clear and statement that this effectively normalizes from Q3. Is that fair to say you will see a normalization? And very obviously, does this impact your view on the potential speed with which share buybacks can come back in? Thank you.

I of course expect that the cash flow will come because it is temporary and there's no underlying challenges in there. of course expect that that will come back and then in terms of potential share buybacks like I have said also previous quarter we do estimate you can say every quarter how is the cash flow looking for this quarter that just passed how will it look next quarter and then how is the gearing ratio looking and then based on that we assess whether we will be able to start a share buyback and that methodology will of course continue but as you can see for this quarter where we have an interim, you can say, tie-up capital in our network capital. We actually want to get that in the bank here in the next quarter, and then we will assess whether we are in a position to consider it again.

I just want to reiterate that there's not a change in our policy. No, no. If there's E3, would that therefore indicate likely Chevrolet announced that E3?

I will not say that that is likely to occur. We assess it every quarter, and as is rightfully mentioned, we also have our capital allocation policy, which we stick true to. We also have our rating agencies. So it's a mixed, you can say, development that we need to see before we start this year by then.

Thank you.

And the next question comes from Patrick Freuset from Goldman Sachs. Please go ahead.

Hi, it's Michael. Good to see the key improvements you're making in R&C in Seattle. But I think you have two, you know, as you say, temporary issues in terms of working capital and in the road EBIT in Q2. And I think it would be helpful if, you know, similar to Q1 where you spoke about R&C Q2 performance about 40% conversion, you've delivered 42%. If you could be perhaps a little bit clearer on the Q3 and Q4 path on those two items to confirm they're temporary. So the road underlying EBIT performance 750 in Q2. Sounds like Q3 would be in a similar range. And then you're suggesting 250, 500 million sort of one-off costs flowing back up in Q4. Is that kind of the right way to look at road? And then working capital, you know, $2 billion negative flow in H1 overall, and we understand the billing blocks, but do you expect to recoup most in H2? How much in Q3? Any sort of rough directional guidance would be helpful.

Thank you.

Thank you for the question. The lead-worn capital, we do expect that the cash flow will come in here. As I said, it is temporary. And remember also, like we also have written, 1.8 is 1 billion, 1.8 billion. is due to some of the property divestment of the legacy Schenker properties. And of course, the transactions are closed and we will have the money here within this month or next month. So I'm quite certain that this is a temporary issue in terms of the projection of network capital. Of course, it depends on the rate development and also if we kind of start getting more volume and activity But overall, of course, we do expect that if it continues as is, of course, we should have in the safe brought down to in the range of between two and three percent over the next couple of quarters.

I think the seasonality on working capital is unfortunately so that it's always the best position at the end. So there will always be a headwind when it comes to the year. But as Michael says, I think the property money, they have more or less gone into the bank account. There might be one outstanding, so we are 100% certain on that. We actually did receive some money last week. So that and then the other one, we said nothing structural. When it comes to road, I think it's probably a fair way that you look at it that the next quarter, It's going to be also because of the seasonality week and then the fourth quarter we're going to get back on track. As I said when we've done the integrations in the markets then we come back to the normal quality levels that we've seen. We can also see that we then can, what can I say, achieve the productivity that we require in order to deliver the outcomes that we have planned for. Sometimes when you do an integration, you know, things, you know, require that we take some extra steps. This is not unusual, but as long as it's of a transactional nature and not of a structural nature, then I think we're going to solve it.

Thanks. And the next question comes from Jacob Lex from Voife Research. Please go ahead.

Hey, thanks for your time. So your guidance incorporates lower air and sea yields in the back half relative to the second quarter. Why is that just given everything going on in the ocean market right now? And do you think that's true for both 3Q and 4Q? And then do you think you can get the positive air and sea volume growth in the second half as you have the Schenker acquisition? Thanks.

Yeah, no rolling forecast. This is what we're planning for that we get growth back in the latter part of the year. and then of course if you look at the yields there's normal seasonality where they do taper off at the end of the year then depending on the geopolitical environment this can of course fluctuate a little bit and I think we have as little insight into this as you may have or not I'm not sure you know but I at least expected that there would be a resolution in the Middle East and now it seems as if it's going a little bit in the wrong direction If you're looking for a resolution. So let's see what happens. I think that's the best thing we can say right now. But of course we react to it depending on what happens in the market.

Thank you. And the next question comes from Muneeba Kayani from Bank of America. Please go ahead.

Good morning. Thank you for taking my questions. I just wanted to go back to understand road a little bit better. So did you have any one-offs in road in the first quarter? I just want to understand why kind of this operational issues came up in the second quarter and there was nothing in the first quarter. And then secondly, just related on road, should we expect any more 1Rs related to property transactions in the second half? Because my understanding is that you still have those ongoing in terms of the property divestment. Thank you.

I think if you look at Q1, we started many of the integrations in Q1. so they didn't really necessarily have that much of an impact it really filtered through and took you to so and then of course when you produce your work and progress sometimes you do it a little bit based on estimates as well and then when you see the real outcome then so there might have been some accruals you know were they 100% accurate at the quarter and probably not but this is not unusual that you know If we then sit and look at it, as I said, it's probably driven a cost between 250 and 500 million during the first half year. So it is something. It's meaningful. When it comes to the divestment of facilities, we continue to follow our asset-light policy that we've had for many years, and when we then divest facilities, we will then also, if there has A financial impact, disclose it, but we don't, what can I say, plan for this in our guidance because this is a very transactional, of a very transactional nature and therefore we don't know, we have no certainty on the outcomes before, what can I say, that you had the kind of like an auction on the different facilities and what are people willing to pay.

And the next question comes from Alexia Dogani from JP Morgan. Please go ahead.

Good morning. Just a very quick follow-up on the 250 to 500 million impact to H1 performance in roads based on these issues. Is this all cost or is there some lost revenue there, if you can just clarify that? And then my real question is, obviously we saw you not that long ago I would imagine these issues must have been brewing in the background that you were trying to fix. Clearly it's not possible to fix them very quickly, it's a big integration, it's quite complicated. I guess what else is on your radar at the moment when you look at performance week on week on this integration? Are there any other areas that you are actively problem solving that we should Be aware of, because, you know, ultimately, I think everyone understands it is a complex integration, the largest you've done, there's a lot of systems, there's a lot of networks, but being a little bit more, let's say, understanding of the issues that you're facing on the ground, I think would help us all when we look at, you know, kind of our models and our expectations to be able to basically measure you with realistic

If we look at, what can I say, the cost-less revenue, we could potentially probably have had more growth. Normally, we do see a lot of revenue attrition when you do M&A, so that's really hard to judge. But the cost side, of course, we can see that the GDP, when we produce, is lower. So I think that's probably where the main part of the number stems from. When we then take issues in certain areas, I think we are quite transparent about what goes on in the company. I would like to think so, I would say that the integration when it comes to the ANC side You know, progressing as it should. I don't really see any, you know, big areas there. Of course, we need to deliver volume. This is the main task when it comes to ANSI. I think this is clear for everybody. I think on the CL side, I think the numbers, at least when we look at them, they speak for themselves. So also, you know, it's basically to be able to scale and drive the company forward. And then we have these integrations on the... It is in relation to the DSV volumes that are moved into the Schenker systems in Europe. This is what we're talking about on the roadside. And that was really kicked off in the beginning of the year, and I believe that we saw each other in the beginning of May, where we had the first indications of that. Now two months or more have lapsed, or actually two months and a little bit more. So yes, there's been some new information. I don't think it changes the case structurally. This is very important for me to emphasize. We've also seen that some of the areas where we did have issues, they are back on track. So all in all, we don't really necessarily sometimes you will have a reaction, what can I say, to negative information like this, but it seems I think it's also fair to say that now we see things, then we address them, and as also right in the announcement,

It's a couple of large countries, so I think we have been more or less through all the different scenarios. It can of course be that there are some few remaining parts left, but overall I think the combinations of systems and countries and stuff like that, we have been through a lot of the scenarios and taking some lessons learned there.

Thank you. Then the next question comes from and Chida Ekblom from Morgan Stanley. Please go ahead.

Thanks very much. Hi, guys. I've got a question on your staff cost numbers in terms of number of employees. So I can't really square what's going on at the divisional level with what's going on at a group level. So we've got staff costs down across the board, which is good since the Schenker integration, but the reduction at the group level is far more modest than if we look at the divisions. The question is, why are the heads at the head office level not actually moving in the same way as the divisions? And actually, on a sequential basis, I think you actually might have added a few heads at the head office. So a little bit of color, please, on sort of the difference between the operators at the local business levels relative to maybe your more central functions. That would be helpful. Thanks.

It's a good question, and you're absolutely right. In line with the integration, we are also consolidating more and more tasks and works workflow in some of the group entities, so it's very well spotted that that is why it developed as it does for the group part.

and I do believe that... Can you give us a bit of color on how that normalizes or... because it would be quite disappointing to see all these HES come out at the regional and business levels and then just see like the total number shifting around to head office functions. So, you know, a bit of color on the catch-up or the alignment there. That would be helpful.

It will be done in line with the country rollout. So you can say it's around 2,000 FTEs that we have added.

But I think it's fair to say what we've done is just so that you don't think it's administrative people. We've created what can I say consolidation of certain activities. So let's say custom clearance could be for example some of the parcel express activities and some other activities under a label that we call global products. We don't disclose that to you with the P&L right now. We may do that at a later stage, but it's operational activities where, let's say you do customs formalities, then instead of having it both in road and in ANC and in contract logistics in the same country, we're actually carving that out and leaving that into the fourth division. It's also in line with the strategy that we explained to you on the Capital Markets Day. By consolidating this, we'll be able to use the same tools and also outsource some of this work to low-cost areas and drive, for example, the synergy case that we need to do when we deliver on the basically improved financials on the custom clearance side. And this is actually the same we do for parcels and some of the other services that we are producing. So this is the reason why that you actually get a significant higher headcount in the headquarter I'm quite sure if you speak to the IR team they will be able to tell you what is the development in the classic administrative part and what is the development in the fourth division part and I think that should give you what can I say the information that you need for your basically forecasting in your spreadsheet and also show to you that we don't creating administrative It is centralization of business tasks.

Can I just ask a follow-up? So I understand that fully and aligned with the strategy. When it comes to that fourth division, where are we in the journey of reskilling that division, increasing headcount? Does that need to continue from here or have we got the right resource in place now to leverage your central functions? And then is there a percentage of that headcount in that fourth division that is sort of developers linked to your efforts on productivity and AI rollout? because obviously those people probably cost quite a lot, very highly skilled people.

I would say that they sit in our normal IT budget and they are not singled out. We have a team, what can I say, that runs AI and many of these technologies that we need to do. It's actually more on the change management side that you need the resource and we will then country by country roll it out. So there will probably be more people moving out of the divisions as we progress on this journey I think we have still some ground to cover when it comes to that but I think you know that you will be able to get the details basically from but they will then be minus in the division and then plus in this global products category what we are talking about And then of course we drive the productivity up. We already see that this of course happens and we have, what can I say, some aspirations on that journey. We have to deliver 6 billion to you and the consolidation of, for example, the customs area will probably deliver 12-14% of that number. So it is something of productivity that we have to increase in this area.

Understood. Thanks so much.

The next question comes from Jaas Heindorf from Nordea. Please go ahead. Thank you for taking my question.

It's a follow-up on some of your earlier comments, Jens. You said that you have taken initiatives to increase the volumes in sea freight in the coming quarters. Can you just elaborate on what specific initiatives have you taken? And then as part of that question, Q3 will be the first quarter where we actually can start to look year-on-year volumes instead of talking quarter-on-quarter. So do you expect when we get to Q3 that you will be able to show positive year-on-year growth rates in volumes in ANC? Thank you.

Yes, I also said, you know, the rolling forecast shows that during Q2 we're going to get out of the – or Q3 – the second half of the year we're going to get out of the trough. So that we then come back to taking or growing the business again. The initiatives that we're taking is, I mean, what we're doing is every country or every area has a book of business. It's assigned to people and we have target setting on it and then we drive, what can I say, sales according to this target setting. in relation to the customers so I think that's basically what we try to do if we take it all overall then of course certain customers you need to drive what can I say with vertical expertise on top of that and other customers what can I say is more like general cargo and the customer segmentation then you sell to the customers let's say You have very small customers. It has more digital interface where the larger the company gets, you know, that you interact with, the more specific it is and the more planning and work it requires. So I would say that that is all ongoing and we have to prove now that we can capitalize on the capacity that we have and deliver growth.

The next question comes from Harishankar Ramamorti from Deutsche Bank. Please go ahead.

Hi, good morning. Thanks for taking my question. Maybe I can revisit one of the earlier ones on the road when you spoke about Some potential impacts to revenues. Would it be possible for you to give us a sense of underlying like-for-like growth or say the churn in percentage terms? And then maybe a quick one on the minority interest. I find that that's gone up quite a bit. Any color on what's driving that up?

I think if we look at road, I'm not 100% certain, you know, it's always difficult to say exactly what is the market and what are we, but we are probably a little bit behind the market and once the quality issues have been resolved, the network should be stronger than before and we should then be able, what can I say, to come back to normal growth rate. If I was sitting with your spreadsheet, I would probably take a couple of percentage points off. We've anyway said that on the integration that we are going to lose a bit of GP, so we are definitely within those parameters. When it comes to the minority interest, I think Michael can say a little bit about that, but there's a good explanation, I think.

It's right that it's quite high for the quarter. As always, when we go into these integrations, then, not as always, but in many cases, the acquired business have a lot of JV interest stakes in different parts of the world. And when we go in, we want to clean that up so we get in control, in full, enhancing our network. And then cleaning that up means sometimes that we have to pay out the minority share to the different JV holders, and we have been working in exotic countries to clean that up. So that should be, you could say, predominantly a one-off this quarter we have had in Turkey, Japan and Bahrain. So we have a lot of JVs that we clean up, but the biggest part has been cleaned up.

Payment of dividends as part of acquiring the minority entity and then basically buying the remaining of the shares in the unit. So it can be several years of profit that has been accumulated down there. So there is no correlation with the line minority interest actually going forward, hopefully. We own now a bigger part of the company, as Michael says. But then, of course, the part where we still have minority, of course, it's a few contract logistics operations in Turkey and Japan, I believe it is. The rest we are in 100% control of now. So, but well spotted, I would say.

This is how we have to treat it from an accounting point of view. It is part of the, you can say, profit distribution.

Okay, so... Sorry, just a follow-up. Should we expect any material cash outflows towards the acquisition of these minority interest going forward?

No, no, no. It's not significant. It's always, you can say, many smaller ones typically. So it's not a big outflow. Sure.

Thanks. And the next question comes from Marco Limiter from Barclays. Please go ahead.

Hi, good morning, thanks for taking my question. I've got a question on the 250 billion capital gain in Q2. Why are we seeing a capital gain in Q2 and why we didn't see any capital gain in Q4 and Q1? And I guess related to that, where are we in percentage terms versus the 2 billion euro? Are we just at the start, midway? How many transactions should we expect going forward? I'm aware that you said that the guidance does not reflect any capital gains beyond the guidance. Are there more capital gains than we should expect going forward? Thank you.

We've already explained on the capital gains that we're not expecting what we are planning for gains. There's an opening balance adjustment. So let's say if you'd had some gains in the early part of the year you would have had to adjust that in the opening balance if they related to a Schenker facility. So that's really how the accounting rules they work. Now we've then divested some here in the second quarter. and I think Michael can tell a little bit more about the volume and what have we had on that. So perhaps you can say something.

Yes, you can see that in the cash flow statement, you can see that we have sale of property. Planted equipment is roughly 4.5 billion DKK for the first six months. So we are grinding our way through it.

So if 2 billion is 15 billion, then we have done one third. and we will continue to divest those facilities.

Thank you. And just to be clear, so is the accounting treatment different now in Q2 versus what it was in Q1, for instance?

You can say after 12 months you don't adjust, what can I say, the gains in the opening balance anymore. When you do the purchase accounting, you have 12 months where you you go and make an estimate what's the value of the asset if then there is a transaction and the value crystallizes and it's different then you have to adjust that in the opening balance once you then pass what can I say that point there can be many things that leads to an adjustment on the facility because you would use certain assumptions when you make the valuation for the facility and if some of these assumptions they change or the market, for example, for investment in property changes afterwards, then of course the outcome is probably going to be different from your initial assessment.

Okay, thank you. And just to close off the topic, did you have any capital gains or salary spec gains in contract logistics in Q2 or in the first half? Thank you.

No.

No.

Then the next question comes from Ulrich Back from Damske Bank. Please go ahead.

Yes, hello Jens and Michael, thank you for taking my question. Just on the cost synergies, you write that the impact increased in 300 million in Q2, but looking at group fixed costs, they only declined around 56 million Q&Q, and I acknowledge that in ANC fixed costs decreased around 300 million, but at the same time, the group costs increased by more than 200 million, which is probably what you alluded to earlier on this Q&A. But where do we really see those 300 million in cost synergies, also considering that Q1 cost level was elevated? Thank you.

I think if you look at it, and thank you for the question, if you look at it, then if you look at our contract logistics division, you'll actually see that there is an increase quarter on quarter in the cost there. And if you track that to the development of the business, I think it's fair that It's been worthwhile investing in some white-collar workers if you look at the conversion ratio and the EBIT margin that they have. So this is the main reason, obviously. I think this is what you need in your explanation and it will all stack up.

And the next question comes from Arthur Trusler from Citi. Please go ahead.

Thank you very much for taking my question. The area I wanted to focus on was just the C side. So, you know, clearly volume progression Q on Q was a little bit soft in Q2. I guess what's the sort of opportunity to to grow volumes going forward. And what are you expecting in sort of Q3? Are you expecting more normal seasonality? Are you expecting some catch-up? And when should we sort of start to see you grow back in line with, you know, the market again? And then I guess, and actually just finally on that, when would we expect to see you, you know, go above the level seen in the previous year? And then also on C on yield as well, you know, the CCFI index is up very significantly in terms of what you're going to be recognizing Q3 versus Q2. So I just wondered why the gross profit per unit in C should not be up meaningfully. Thank you.

I think that was quite a few questions, but let's try to see if we can answer them all. I think if we look at the ocean freight, we already explained what we're doing on the customer facing side. I also think now, given what can I say, the network capacity we have on LCL and many of the products that we have on ocean freight, they're definitely market leading and very strong. So that should help us to continue that development on ocean freight. I think if we look at the ocean freight, we've also invested quite a bit in the sales force, not least in Asia, so that should hopefully also drive some outcome in the coming quarters. I think when it comes to the yield side, I think we are now at 4,000, so it is somewhat higher than we would normally plan for. and I think you're right there is a chance that we may even get a little bit more expansion on the yield into the next quarter we will have to wait and see. Then when it comes to what can I say we have now to have reached the trough and we have then to see that basically we catch up with the market and start to deliver what can I say performance That is satisfactory, and this has to happen here during the second half of the year. But hopefully we can also start to see some of this also when we announce, what can I say, the next quarter. This is at least what we have in our rolling forecast.

And the next question comes from Christian Godiksen from SEB. Please go ahead.

Hello gentlemen, just a quick question on the road from my side. I was just wondering what are the plans with Brian Ejsing in relation to the role of both having a role as COO and also COO of road? Thank you.

I think the plans are now that Brian stabilizes the situation and once that is done we will then start to discuss how, what can I say, to drive the succession in road as we normally do. So we will take our time. Brian is doing a good job and since you know CL also reports to him at the end of the day but that's doing fairly well he can spend his resources on the roadside which is actually also doing and doing a great job there.

The intention is once you progress more on the road, then Brian will step back to focus solely on being a COO, and then you will have a succession in a new COO road, so you have two separate... We will probably get there, but let's see how it all pans out now, and also how the workloads, what can I say, they spread out.

As I said, right now, Brian, he can doublehead and do both jobs. He does a very excellent job on that. But the idea is, of course, that the structure that we have, that we get, you know, a solution in the little bit longer term.

Yeah.

Okay, very clear. Thanks a lot. Ladies and gentlemen, this was the last question for today. I would now like to turn the conference back over to Jens Lund for any closing remarks.

Well, thank you very much for your interest and your time today. I think we've had a lot of good questions, not least when it comes to road, but certainly also to the cash flow situation. I hope that at least Thank you very much for your interest and have a continued good summer. Thank you.