Ladies and gentlemen, welcome to the nine months 2021 results conference call and live webcast. I am Alice, the conference call operator. I would like to remind you that all participants will be in listen- only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Dr. Detlef Trefzger, Chief Executive Officer of Kuehne + Nagel. Please go ahead, sir. Thanks, Alice. Good morning, good day, good afternoon, and good evening? Welcome to the analyst conference on the nine months 2021 results of Kuehne + Nagel International. Our Chief Financial Officer, Markus Blanka-Graff, and I welcome you from, as always, sunny Switzerland. Also as always, let's get started on slide three of the slide deck that we have published this morning. Q3, the third quarter 2021, has been a remarkable quarter. Results more than doubled versus previous year. It is an extension of what we have seen in quarter one and two already this year. It is a confirmation as well as an acceleration of our strategy and its deployment. On slide three, we have published some of the KPIs. Our net turnover increased to CHF 21.8 billion, which alludes to an increase of 47%. Gross profit increased by 25% to CHF 6.9 billion. Free cash flow missed the one billion by one million, so CHF 999 million, an increase of 23% nominal versus previous year. The earnings per share were at CHF 10.94, increase of 128% versus previous year, with an organic EPS growth of 106%. Please follow me on the next slide, which is slide four. Some highlights of the third quarter and the year-to-date development. The third quarter is another excellent quarter, as we have stated before, and the group nine- months EBIT concluded at CHF 1.825 billion, up 131%. Let me also draw attention or focus your attention on the conversion rate. Showed a conversion rate year-to-date, nine months, of 26.6%. In quarter one, we started with 21.3%. Quarter two came to a 26.2% conversion rate, and we concluded the third quarter with a conversion rate of 31%. Outstanding performance in Sea Logistics in a very chaotic market environment, which I will explain or give some details later throughout the presentation. A very strong performance. A high service intensity is continuing and our colleagues, especially in sea freights, are all over the place to make the shipments of our customers work. Air Logistics, a very strong performance, with an EBIT of CHF 645 million for the first nine months. A strong volume and yield performance, in that period. We have fully consolidated Apex. Let me also state we have an excellent collaboration with the colleagues from Apex. This is based on an almost identical entrepreneurial spirit, and there's a seamless interaction with the team of Apex, which we all enjoy. Road Logistics, EBIT of CHF 75 million for the first nine months. A very strong volume, especially in the third quarter in Europe, a high demand for digital solutions with a very solid operational performance despite all the headwind that we experienced with driver shortages in the market, equipment shortages, and so on. Contract Logistics continued its growth, especially in pharma and very successfully, concluded the first nine months with an EBIT of CHF 114 million. Please follow me on slide six, where we give some details on the volume development in Sea Logistics and Air Logistics. I will start with Sea Logistics. We have a volume progress of -2% in the third quarter and Apex adjusted of -4%. Our organic development on purpose, I should say, is -9%, or we lack like 100,000 TEU, which is exactly the low-yielding cargo, the commodities that we have mentioned and described before. Forest products, ex-Europe, agricultural products, ex-U.S.A., which are not running in our networks at the moment as we lack capacity, there is a huge lack of capacity. We focus and we see a strong focus on where it matters most, on the Transpac, Asia exports to North America, especially U.S. We see a mid-range double-digit volume increase, a significant increase. Europe to North America and partly South America, we see a solid double-digit volume increase on those trades. Especially with cargo, or with customer demand that requires solutioning and expertise from our Sea Logistics team. I mentioned that before, we have a chaotic market environment, that is going to continue. I know you will come up with this $1 billion question: When does it end? There's no end in sight at the moment. We always say it might last until Chinese or Lunar New Year next year, we would expect this can continue even longer than six or 12 months. There's no sign of relief. As I mentioned in some of the press interviews recently, this is a bullwhip effect we experience, and it's getting worse at the moment, and we should expect this to become worse or to get worse in the next couple of months. What is the chaotic market situation? We have ports with historically low productivity, and I checked half an hour ago or 45 minutes ago. On the West Coast U.S., we have 100 vessels waiting to enter a port. Average waiting time most likely is 14, 15 days. We have rail ramps that are congested, rail terminals that are congested, trucker shortage in the U.S., in U.K., and partly no chassis available to do the handling with short-haul transports. We stay focused on our customers. We stay focused on our customers' demand and the cargo mix. The key to success remains sustained and expanding service intensity. It's a service industry, as we speak. Access to capacity wherever possible and shifts and solutions with both modes of transports integrated in order to bypass congested ports. The Air Logistics volume development, totally different, and maybe also a reflection of the congested and tight, chaotic sea freight markets. The pace of organic growth and market share gains is still high, but it's slightly moderated from Q2 to Q3 from 46% growth to 29% growth organically. We have a strong development in all segments, especially pharma, aerospace, general cargo, E-Commerce, and also perishables. We see this trend also unbroken and do not expect a major change even beyond the next three, four months. We still have no significant additional capacity in the long-haul packs, belly capacity. There are flights, intercontinental flights, but they are homeopathic, so to say, with regards to the demand for belly capacity. We produce with charters and block space agreements we have mentioned before in our previous calls, and that is expanding. That development is expanding. Please follow me on slide eight. Some details on the Sea Logistics KPI. We have seen a strong yield development, especially in the third quarter, reflecting both the favorable portfolio mix, which is a very important factor in that yield per unit development. We do not have any commodities, no forestry products, recycling material, and so on, in our cargo mix at the moment in Sea Logistics or very low volumes. We concentrate on small and medium-sized enterprises and blue-chip customers, which drive this favorable product mix. We grow in the high-yield or high-yielding segments with high service intensity on purpose, as I said, in the mid-range double digit on the Transpac, for example. Which is Transpac and Transatlantic from a geographic point of view, but which is also Less Container Loads, LCL business, very strong, great performance, great period. Projects, renewable energy is in the focus here, and we have stated some of the wins, customer wins, where we were able to do so in the recent press announcement. This development is also unbroken and ongoing. The yield expansion more than compensated for the sequential unit cost increase, which is also shown here. At the moment, we see no relaxation of the intense workload our organization, as we have to produce a seamless supply chain more or less manually with a lot of personal interference of our Sea Logistics and, come later to this, Air Logistics experts. This pressure or this development is also unbroken and expected to auto-continue throughout the next couple of months. EBIT for the first nine months was at CHF 990 million, which is 226% above previous year, and Q3 saw a clear acceleration of that trend that we have already posted when we had our Q1 and Q2 calls. Conversion rate year to date, nine months, 52.3% versus 29% previous year. I think that's also a clear sign that we continue to produce with a lot of manual interference, but also using our automation and platforms wisely in order to make the shipments flow happen on behalf of our customers. Next, details on Air Logistics you will find on slide 12. Air Logistics KPIs, we have delivered a small degree of yield and EBIT normalization in air freight over the last couple of quarters. In the figures that we show without Apex, you will see that we have a stable organic yield at CHF 9,495 per 100 kilo and a stable organic unit cost at around CHF 5,057 per 100 kilo. Apex, and I mentioned that in the beginning, is continuing to exceed expectations both in yield and EBIT development. They are outperforming market and also in the volume growth. The way they do business and the way we do business is really complementary and it's super cool and a pleasant collaboration amongst the two organizations. We have closed another small acquisition company called Salmosped. Have a guess what they do. A Norwegian perishable freight forwarder. We closed that September 1, 2021. Annual turnover last year, CHF 118 million, and last year, 2020, they handled 63,000 tons. We welcome them. Also very interesting business and they are supplementing our existing KN perishable network, which has been built on more than 70 stations around the globe. As you know, we are one of the leaders, if not the leader, in perishable worldwide. Conversion rate, the first nine months at 41.2% versus 30% in 2020. Please follow me to Road Logistics, next slide. Strong volume growth in European network, not only domestic but also cross-border, and that volume growth has been accelerating. Typically, the third quarter is, due to the summer vacation in Europe, a quarter that shows maybe less growth or less development. We haven't seen that effect at all this summer, especially not in the big markets of U.K., France, or Germany, which is very encouraging. We see a high demand and still growing demand for digital solutions like eTrucknow or your easy customs solution. Road Logistics does very well, has gained market significant momentum in the second and third quarter. If you have a look on slide 12, you will see their KPIs in the quarter-over-quarter comparison. Strong volume growth, and especially the networks that I mentioned before. First signs of driver capacity shortages, but they can be overcome with our platform solutions. We have the market visibility, we have the partnership agreements with the trucking organizations. We see a high demand for digital solutions for both. For visibility reasons, also access to capacity reasons. We deploy eTrucknow as a software, as a service solution, which is more as a plug-and-play for our customers and enjoys a lot of new customers, or enjoyed a lot of new customers during the last quarter. EBIT for the first nine months 2021 at CHF 75 million, 97% above prior year. That is a trend that has been ongoing since the last two quarters. Great performance, strong organization, a cool spirit in Road Logistics. Please have a look on slide 14, Contract Logistics. A strong organic growth in net turnover, especially in the areas of pharma and E-Commerce. We posted a 6%, excluding foreign exchange effects, growth in those two sectors. A solid Q3 performance and growth across all geographies. That may be important for you is that trading in Asia, in both Asia and North America, is twice as much as in Europe. We grow much faster outside of Europe, which maybe gives also a signal to market maturity and market developments outside of Europe. The cost management programs that have been initiated six, nine months ago have been completely rolled out to all 700 sites. We start to see benefits from those programs as well. That's the routine optimization of the process flows in warehouses. Contract Logistics is a key contributor to improved KN Group ROCE, which will be explained in detail by Markus. Before I hand over, please allow me to give a short summary of our business performance for the first nine months of the KN Group. We posted another remarkable quarter, and that is true for the entire KN Group. All countries, all business units, all areas and segments contributed to this successful quarter three. We see that all the key figures, key KPIs that we use for steering the business have improved. Even volume developments in sea freight happen on purpose because we concentrate on what matters most for our customers, as I stated before. We have still approximately 45% of our white- collar staff in working mobile mode. The pandemic, I've mentioned this a couple of times, the pandemic is ongoing, has [inaudible] gone away, and before it becomes endemic, we will see another quarters to come which will be difficult to predict and to anticipate. At this stage, I do this loud and clear, I would really state a heartfelt thank you to all our KN colleagues worldwide for their outstanding customer service, their persistence and perseverance. They really drive the needle and without their spirit, this KN spirit, that makes this company unique, our customers would have seen more problems, that's for sure. Now we come to the key financial figures, and I'm happy to hand over to our Chief Financial Officer, Markus. Thank you, Detlef, welcome from my side to all ladies and gentlemen, and all participants to this call. It was an excellent, and as Detlef mentioned, remarkable quarter. I'm starting on page number 16 on the income statement, want to highlight a few numbers on that page. Results again accelerated with incremental gross profit over the first nine months of CHF 1.355 billion, of which CHF 678 million in the third quarter. Looking further down into the income statement on the EBIT line, there was for the first nine months, CHF 1.043 billion more ET earnings before tax, of which CHF 422 million in the third quarter. A further acceleration of result improvement. Conversion rate, something we have mentioned frequently today. Conversion rate incremental in the third quarter was in excess of 60%. I want to use the opportunity here to clarify also some news or some pieces of information that have been published today in the morning around the conversion rate of the group that I was quoted in some of the papers being between 20% and 25% conversion rate for the group in 2021. That is not correct. I was quoted, or correctly I should have been quoted, sustainable conversion rate is for the group between 20% and 25%. For the fourth quarter 2021, and obviously also for the full year 2021, this number is going to be in excess of 25%. Just to clarify and to use this opportunity because I think it has created a bit of irritation. Let me finish this page with two more technical notes. The first one, on the foreign exchange column on the very right of the page. I think it has been a long time ago that I can talk about a foreign exchange impact that is negligible. I think over the last couple of years, we have always seen a negative impact. I think we have to keep that in mind. Exchange rate impact currently on a very, very low level. Secondly, you see that also in the footnote that we have added to the slide, we have closed the sale of our equity stake of 24.9% in Apex to Partners Group, in August 12th. That explains the increase, which you certainly have noticed on the non-controlling interest line in the third quarter, the so-called NCI, Non-Controlling Interest, to approximately CHF 20 million on a quarterly basis. Given the performance of Apex at the current stage, and for your information, I would expect that number to be relatively stable in the fourth quarter. The next page leads us of course into balance sheet and also on the balance sheet we have some impact from the sale of the equity stake and the acquisition of Apex. Before that, page 17 of the presentation, major deviations or changes in the numbers on obviously goodwill other intangible assets. We have added approximately CHF 1.1 billion goodwill between December 31st and September 30th. At the same time around CHF 160 million on intangible assets. On the right side of the balance sheet, you will see on the current liabilities an increase of around CHF 1.3 billion, of which a good part is what you can see down here, the recognition of redemption liabilities for the put option out of the transactions with Apex and Partners Group. Second topic, let's go back to what I call the most important position on the balance sheet, which is the cash position. Cash position of around CHF 1.6 billion, CHF 1,592, exactly as you can see it here, leading me straight into page 18 and the reconciliation and bridge of the cash and free cash flow generation. Most of our improvement in the cash flow comes out of operational cash flow. We have CHF 996 million more operational cash flow, as we have mentioned before, and is mainly fueled from operations. Where did we put it? I'll be very transparent here. Changes in working capital have absorbed around CHF 500 million of that additional operational cash flow. Partially, I call it burned in the working capital, Both from organic development as far as well as from the Apex acquisition. Why? On the organic side, as everybody can appreciate, we have high rates, sea freight and air freight rates. We have volume growth, and also we have with Apex, a different business model in terms of greater reliance on charters that usually do not enjoy the same payment terms as we would have for regular air freight capacity. Going back to the overall bridge cash flow from investing activities, this is just from an explanatory note. The CHF 1 billion flow that you see here is the majority, the outflow from the acquisition of Apex. At the same time, you see three lines further down on the so-called others cash flow from financing activities. You see an inflow of more than CHF 290 million, which is the net amount of what the inflow came, the sale of the equity stake to Partners Group. Again, more on the explanatory side, you will find a full detail explanation on our condensed statements for the first nine month in the notes nine and 10. Right side of each free cash flow trajectory, you see here the CHF 999 that we have in year-to-date September. I am very confident that the trajectory for the rest of the year, so fourth quarter, will be very similar to the ones over the last couple of years, as you can see here on the slide. We have seen what I would call the maximal expansion in the working capital. Page number 19, the working capital as mentioned, organically impacted from higher rates and volume growth and from the business model Apex. We have, and just for reference purposes, the numbers for net working capital in the second quarter was CHF 1.35 billion. Today we have one, or on the 30th of September, not today. On the 30th of September, we have recorded CHF 1.7 billion. I believe we have added another CHF 350 million over the third quarter to net working capital for the reasons that I have mentioned before. DSO, DPOs remains relatively stable compared to the second quarter. Give you some flavor what Apex in the same categories of KPIs would deliver. DSOs for Apex are between 40 days-50 days. DPO are between 10 days-15 days. That is what I mentioned before, it's different business dynamics. The numbers back to the graphs and next page number 20. Return on capital employed. I would like to start with an apology for misleading you on the last quarter conference call that we had, because I said Q2 was certainly a quarter at the top- end of expectations. Obviously, Q3 was even better than that. This is how difficult I think it is under the current market conditions to actually make a prediction that would hold truth. With the performance that we have now in the third quarter, and I try it again, it's the quarter at the top- end of our expectations. It really shows again the potential of the group's operational and financial strength. As Detlef Trefzger said before, the most interesting question for sure remains, what are the current and future perspectives of the market? With that question, I do hand back to Detlef Trefzger. Thank you, Markus. Before I answer this question, let me talk about our internal situation at the moment. We have put a claim into the organization as of second quarter last year, which was or which is still Staying On Course. Staying On Course meant we deployed our strategy, we accelerate where we can, and we stay on course with all our activities, especially customer-facing technology oriented. Our strategy has been clearly confirmed. The implementation continues to accelerate. What are the areas we are focusing on? We are focusing on industry solutions and within the industry solutions on key customers and their transformational needs. We focus on technology, digital platforms and eTouch to drive both customer-facing efficiencies as well as internal efficiencies. Our colleagues and experts, because it's a people's industry, it's the service industry, and these are the three focus areas. They are part of our strategy, which we have presented more detail. We never gave up implementing, driving this forward. I think we start to harvest from this situation or from this approach. The main question is the market and how does the market develop further? We have mentioned that on different occasions. At the moment, we see a continuation of the private consumption and the demand for goods, which remains very strong. This is also what we have stated on slide 21. The current market situation and capacity constraints are also expected to persist longer or beyond Lunar New Year 2022. I said this before, most likely, or as from today's perspective, we do not see a major change during the next 6 to 12 months. Whatever is changing will not be a radical change, but a gradual, hopefully, normalization. For the time being, we expect bullwhip effect. I repeat myself, we expect an even worsening of the market situation and capacity. That is unfortunately what we see at the moment, especially at the West Coast in the U.S. Our strategy approach, we are successfully meeting high-end service level requirements of our customers, and we focus on those. We are extremely selective with our growth and where do we grow. I mentioned Transpac before, LCL business, less-container load business, and so on. We continue providing solutions for the different industries, pharma and E-Commerce, and focusing on deploying our technology because this was clearly a pandemic effect that the buy-in and the onboarding on our technology solutions, our customer platforms, eTrucknow, Sea Explorer, myKN, has been exceptionally high, and this trend is ongoing and unbroken. With this statement, I thank you for the attention so far. I'm sure we have some questions in the pipeline. For this, I hand over to our facilitator, Alice. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touchtone 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 two. Participants are requested to use only handsets while asking a question. Anyone who has a question or a comment may press star and one at this time. The first question comes from the line of Robert Joynson with Exane BNP Paribas, p lease go ahead. Good afternoon, Detlef and Markus, and thank you as always for presentation today. Three questions from me, please. First of all, on ocean freight volumes, they were down by 9% in Q3, excluding Apex, as you mentioned. When you talk about low-yielding cargo not running in the network at present, is that primarily because it's just uneconomic to transport low-yielding cargo with rates as high as they are? Is it more because you can only obtain a finite amount of capacity from the container shipping lines, and therefore you understandably allocate that capacity to the high-yielding cargo? That's the first question. The second question on the gross profit per TEU. It's now obviously more than double the level seen prior to the pandemic. Could you maybe just comment on the extent to which the markup element has risen in recent quarters as opposed to the value-added element? The final question on supply chain disruptions. We all know that the U.S. ports have seen severe disruption for several months now, and you just said that you think that will get worse. Could you maybe provide us with an update on what you're seeing at the main European ports? Recent news flow suggests congestion has worsened quite significantly over the past month or two. Is that consistent with what you're seeing? Thank you. Absolutely. Thanks for your questions. Let me start with the latter question. Ports are congested, I should say. The severest congestion is at the U.S. West Coast right now. While East Coast ports are doing marketing with shipping lines to reroute transports or vessels because they still have capacity. We still lack a 47-hour, 7-days-a-week service in some of those ports. Despite political statements, it's not happening. We have the high season now in the U.S. with Thanksgiving coming up soon and Christmas season and so on. It is not only a U.S. topic, but it's very hot, so to say, in the U.S. At the moment, we have around 740 vessels somewhere waiting in front of ports around the globe, which is like 12%-13% of the global vessel capacity. This is a topic which is also relevant for European ports, and especially those ports that are not automated or only automated to a very low degree. That would be my answer to your third question. Low-yielding cargo in Sea Logistics networks, yes, I fully agree. It's both. It's uneconomic for the shipper. Unless you have increased your prices for forestry products or recycling material already, and those prices can bear the high spot rates. This is a cargo typically running on a spot rate basis, and it's a capacity big because not all those goods would be shipped and would be waiting in some of the export ports. Therefore, we are more selective in accepting those cargo or this cargo. GP per TEU, I'm not aware of any markup. If you see our increase in GP per TEU, it's mediocre compared to the spot rate increases by the carriers. They are a reflection of extra works in order to handle those goods. I'm not aware of any markup that you've alluded to. Thank you. Can I maybe just ask one quick follow-up question? Just going back to the first point on the ocean freight volumes. Are you starting to see any signs that the container shipping lines are skewing capacity towards their own controlled volumes as opposed to the forwarders? Is that an issue? This is something that's happening in the market for years, back and forth. I don't see any significant trend or shift in trend. Also here, whoever controls the volume, more important is that you control the terminal or the infrastructure on port side, and that's the bottleneck. Then the inbound and outbound flows, both on trucks as well as on railways, we have seen a huge disruption also there. To say, the market share of carrier-controlled versus forwarder-controlled business has not shifted significantly over the last years. All very clear. Thank you. Thank you. The next question comes from the line of Sathish Sivakumar with Citigroup, p lease go ahead. Yeah. Good afternoon, Dr. Detlef and Markus. Thanks for the presentation. I also have three questions here. Firstly, production cut in China. Are you seeing any impact on export out of China? Especially as we go into the Lunar New Year, what are your shippers actually talking about how to offset some of the potential output drop there? Second, on the trucking shortage in Europe and the U.S., how does it actually impacted your ability to buy capacity? Do you have any dedicated charter or block space agreement similar to the air freight in the trucking market? When do you expect things to normalize here? i.e., sea freight should see first normalization, then you see a trucking, or which one should actually as a lead indicator? The third one, obviously, given the surge in the freight rates, looks like the named accounts or the big customers have got some priority over SMEs. What are you actually seeing within your client portfolios, SMEs versus the big-named accounts? Hello, Sathish. Let me answer your question. The production shift in China, I think, is ongoing for, is it five years or so? Maybe we should reflect the last but one five-year plan of China, which ended last year, and then the new one. It was clearly stated that China will concentrate on high-value production mainly for the domestic market and selectively for exports, and they want to bring imports and exports, GDP related to imports and exports in equilibrium. Which would mean that they have to bridge a gap of 2.5% GDP, which is massive, obviously, which reflects them both, less exports and more imports, to state this. We have seen this. It's not a new trend. Our development in other Asian markets like Vietnam, Indonesia, Myanmar, even partly India or Singapore, Malaysia, has reflected that trend over the last years. I think we are not seeing an ad hoc development here, but a gradual shift. The domestic Chinese market is so huge that this capacity that is freed up, so to say, will be serving the domestic Chinese market. No major change. Trucking shortage is both. We have a trucking or trucker shortage in many markets based on an industry that was never and primarily in the focus. The container trucker shortage will remain. That's also clear. We have long-term agreements with our partners, even throughout the pandemic, by the way. Therefore, we don't experience that to that certain extent. Whatever is spot causes additional problems. That is maybe then also referring or leading to the answer to your third question, because last decade, to say this frankly, our customers have shifted from long or mid-term contracts to short-term contracts and spot. It was normal two, three years or four years ago that a head of logistics of a production or trading company would put 40,000 TEU to be shipped next month on the spot market and would have placed them within 48 hours. This is impossible. We see more long-term contracts, but this is also true for SME customers. Those that are really suffering are those customers that ship goods that have a very low value per good or article, and that have a very low value per container, and then have not provided for a volume or capacity, with a long-term or mid-term contract, but try to place those on the spot market. Which is, if you ask me, almost impossible. That would my answer, but it's not related to named accounts and those mechanisms. It's more, what is your sourcing strategy and what is your capacity demand, and have you sourced mid, long-term for the capacity, or are you trying to play the spot market? Which obviously brought a lot of surprises to some customers. Thank you. Good. Thank you. Just a quick follow-up, actually. Sorry, I should have made it a bit more clear. Production cut. I also sort of referring to the power cut in Chinese production facilities. Do you see any impact of that power cut? Sathish, I'm not sure I understand the question. I'm not aware of any problems in Chinese production facilities. If that was the question. I think I stated everything regarding China. It's based on the second Five-Year Plan that has focused on renewable energy, sustainable production, and high margin or high-value products as such, mainly serving the domestic market. That's the trend that we have seen over the last years. That is driving us in supply chains. Okay. Thank you. That's very clear. Thank you. The next question comes from the line of Alex Irving with Bernstein, p lease go ahead. Hi. Good afternoon, and thank you for taking the questions. Three from me, please. First of all, on capital allocation. Your net debt isn't far off turning negative at this point. How would you prefer to use the surplus liquidity? In M&A, increasing payout, anything else that comes to mind? Secondly, related to the topic of M&A, you've mentioned before that you'd like to be doing some more deals. Any thoughts on the type of target that would be most appealing, either size, verticals, niches? Is there anything you've learned from the Apex deal that would change your approach on M&A deals going forward? Third, finally, could you please talk a bit about your medium-term plan as markets normalize? Do I have it right that you're hoping to achieve higher yields than pre-pandemic by maybe focusing a bit more on the cargo mix? If so, why is that the right strategy with eTouch also being rolled out? Does eTouch not increase the operating leverage so it makes sense to pursue for as much volume as possible? Could you help me to understand that, please, as well? Thank you. All right, Alex. It's Markus. I'm going to take the first two question on capital allocation and M&A deals. Capital allocation, for me, the first and foremost focus is always create enough cash. We need to focus on the cash generation of the business. This is the foremost and utmost importance. Later on capital allocation, you know we do not have a written down fixed dividend policy. You know from a historic pattern and also what we communicate regularly over the quarterly calls, that we have a certain payout ratio, that we are targeting and that also the supervisory board usually makes the proposal to the AGM. Cash generation and remain asset light, as much and as enthusiastic as possible. Certainly that Detlef and myself and every leader of the business units, we are very much focused on the asset light model that we are maintaining at KN. That for me is first priority. Of course, M&A plays a role in that. We have always said our M&A strategy is bolt-on acquisitions. I would even use Salmosped as a very small acquisition, but very typical for the way how we develop. It's very specialized, very niche at that point in time, but it is extremely valuable knowhow that we get with that kind of acquisition. We leverage the knowhow, the expertise through our larger network. Of course, not every acquisition is of that rather smaller size acquisition. Some of them are larger size acquisitions, but from a type perspective, very similar. That is one part of our M&A strategy. The other part is Asia, and I think we have been very vocal around it, and we have also been very successful with the Apex acquisition in our footprint development in Asia. I think we can expect that we are continuing that path in Asia. Is it going to be another Apex? Most likely not. We are not buying two times the same thing. Obviously there is going to be other focus areas that is going to increase and solidify our footprint in Asia even further. Let me answer then, Detlef speaking, your third question, Alex. Cargo mix. Why would we not take all cargo that contributes a positive EBIT per unit, if we can operate them in an efficient way? That is the strategy of eTouch is automation across the whole shipment flow, but it will create benefits to complex and high-end, high-yielding cargo, but also to the commoditized cargo. If you reflect, we believe that a fully eTouch shipment will create a conversion rate of 60%, even 90% or in theory, 100% incremental. We will capture these volumes if there's enough space in the market and if the contribution of these shipments is positive. If you look only to the total figure or the average figure, not the total figure, sorry, the average figure, you might see a reduction in yield per TU or per ton, per 100 kilo or EBIT per ton, 100 kilo or per TU. The contribution is positive. It will create cash inflow and EBIT inflow, and that is what we will focus on. As we have seen in the last month, or as we have shown in the last month, it's a plug-in and plug-out. We can steer it. We can control it. Yeah. It's a reflection of the current market situation where the goods cannot bear the transport costs at the moment, and the capacity is geared more towards the higher-yielding or more complex solutions. Very clear. Thank you very much. Thank you. The next question comes from the line of Muneeba Kayani with Bank of America Global Research, p lease go ahead. Thank you for the call. The first question is around, you mentioned some of the ports will start working 24/7. They haven't yet. Do you think that once the Port of L.A. starts working 24/7, will it help to ease the congestion, and will it be meaningful? Secondly, on the air freight side, now that the U.S. will be opening from November onwards and transatlantic passenger flying should increase, how do you see that impacting the global air freight market? If you could please comment on dividends, given the strong cash flows and how we should think about that for this year. Thank you. Thanks for your questions, Muneeba Kayani, and let me answer them. Ports of L.A. 24/7. Yes, it's highly needed and we are desperately waiting for it, and it will gradually influence the bottlenecks, but it's not the only story, and it's not the only bottleneck. It would be highly needed. That's what I mentioned before. It might create or might be a starting point for a gradual improvement. It's not only the port, it's the inbound and outbound flows of the containers. It's the railway terminals, even in Chicago and in Detroit, which were closed down for a week or so in order to sort the containers in the terminals. It's more. It's a very complex approach, but with a 24/7 operations, it would signal that gradually this can improve. Yeah. At the moment, we have some ports that are working 24 hours a day at the West Coast and some aren't. That's maybe the big difference. Belly on the transatlantic. Yes. First of all, I'm flying to the U.S. on early November again. It's great to see that we see a bit of normalization. The volume that we expect coming from belly on the transatlantic only will be in high demand, but will not be serving much of the market needs at the moment. It's not a big change. It will not have a big impact. Our expectation or the expectation of our colleagues in the Air Logistics community especially, that we will not see a belly capacity of a sizable offering kicking in before 2024. We need regular flights between the continents again, passenger flights. If you remember, we had 50 flights alone from the West Coast U.S. per day to Europe. We see that coming back, it will take some time. By the way, the holiday season is over, so it will be more the relatives and business travelers that we will see in those flights that might be possible as of November 8 from Europe to the U.S. and vice versa. Dividends is the last question. I think I mentioned something before already on the question from Alex. I would believe a good reference point would be payout ratio over the last year. As you know, we never give guidance to that, but I think it's a good reference point to that. Right. Thank you. Thank you. The next question comes from the line of Sam Bland with JP Morgan, p lease go ahead. Hi there. I've got two questions, please, on the same topic. First one is, if we look at the Sea Logistics margins, I guess they've been particularly strong across the group. Can we just unpack that and talk a little bit about what's driving them to such high levels. In particular, how much of it is mix away from lower margin type, commodity volume, whatever else, versus other impacts? The second part of the question is, has there been any sort of time lag benefit between when you've bought capacity and when you've sold it? For example, where you're able to buy capacity three months, six months ago at lower rates, and you can now sell it at spot market. Is that sort of time lag effect having much of big impact on unit margins at all? Thank you. Let me start with the latter question. That is not our business model. We buy and sell, so to say, in your wording, at the same time. We do not provide capacity and then wait for customers to come and make use of that capacity. Clearly not. Whatever we do is in direct junction and interaction with the customer, always. The Sea Logistics unit margin is a reflection of the market situation at the moment. Nothing else. It's reflected in higher operating costs, which we mentioned before. Maybe here it takes some time before you see that on a unit basis to really kick in. This is the main driver, and nothing else. Okay. I'll leave it there. Thank you. All right. Thank you. The next question comes from the line of Michael Foeth with Vontobel, p lease go ahead. Yes, good morning. Two questions from my side. Going back to the GP per unit margins, but not in sea, in air. I was wondering what explains really the stability of the unit margins or the yield in air freight, versus the sort of chaos we're seeing in sea, if you could help us understand that. The second question is, in practice, how do you manage or how do you circumvent the congestion problem in sea freight for your customers, and how do you really manage to get the goods from A to B in a reasonable time with the current chaos going on in the ports? Thank you. Michael, let me answer your questions. What is driving the stability in Air Logistics? It's our own flight operation. We have our own production, our own flight operation that's driving the stability, if you want. We have not the high demand that we saw in quarter two, especially last year, where we had all the PPE, the personal protection equipment that needed to be shipped to Europe or somewhere in the world overnight. The heat is out of the market, although the market is still very hot. It's a market which sees a high demand. We can grow our volumes, sorry. Our solutions are based on our own flight operation, which gives a certain stability. The second question? The first question was the gross profit per ton in air freight and why it was stable, I think. That was my answer. Just my answer. Okay, the second was the sea freight. How do we manage to get the containers through? A lot of manual interference. A lot of manual organizations, interference with port authorities, with railway companies, with trucking companies. A lot of guesswork, unfortunately, I have to say. When does the container really leave the port or is able to enter a port or a terminal? That is why we say it's a high demand for the expertise and the skills of our sea freight forwarding experts at the moment. You can't automate this process flow at all. Sorry, as a follow-up. You still have a very high visibility on the global goods flow through your systems, is that correct? Can you monitor? Has not changed, we can anticipate even bottlenecks. I give you an example. If you see that at the moment we are piling up, or the vessels that are waiting to enter the West Coast ports in the U.S. are increasing. It was a record last night of more than 100 vessels waiting to enter the other West Coast port at one night. Imagine, 100 vessels. We can see this, we can anticipate this, we can give our customers different signals. We can ask them to unload their cargo in a port prior to the West Coast, fly cargo. The sea-air combination. We can urge, in combination with the carriers, reroute vessels even, which we did partly during the Suez Canal clutch, when the Ever Given was sitting there wrongly anchored in the middle of the Suez Canal. Those are the solutions we are trying to initiate and drive for our customers. The rest is real individual, customized activities to make the container flow as, stable is the wrong word, as possible, as much as possible. Yeah. Thanks, Michael. Thanks a lot. Well done. Can I just address to the audience. We still have a number of people in the queue. Can I please ask you, since we are a bit limited on time today, that you would focus on one question each, please? Thank you. The next question comes from the line of Marc Zeck with Stifel, p lease go ahead. Good afternoon, and congratulations on the great results. Just one question maybe on Apex. It seems that the volume development quarter-over-quarter, so second quarter, was pretty weak for Apex, and cost per unit were pretty high. Could you elaborate a bit why this has happened? Could you maybe also extend on what was the co-loading development in Apex? You're addressing the sequential development of Apex volume, right? Q2 to Q3, is that right? Yes. Okay, good. Yeah. Talking about Air Logistics, I think the growth rates in both had been still quite solid. Obviously in Q2, Q3, we still have a bit of a misalignment of the first consolidation, which of the volume was in which of the quarters. There is a bit of an effect that certainly Chris can then give you more details to that. I can say that the absolute growth in both quarters has been very similar. It's more of a reporting topic rather than a business topic. Okay. Thank you. All right. Thank you. The next question comes from the line of Alexia Dogani with Barclays, p lease go ahead. Yes, thank you for taking my question. I just wanted to ask you, what's your view in terms of medium-term volume growth, in relation to your comments around cargo mix and the low yield goods? Do you think there's any reason to believe that this don't ever return because structurally we go to a higher rate environment mid-term? Thanks. I would not concur with your statement. I think we will see more of the commodity cargo entering the market again because, eventually the customers of those goods are willing to pay higher rates. It will drive a certain price increase of those goods, not of the transport cost. We will see this kicking in again. At the moment, as the market is so congested, only urgent commoditized cargo will find its way into the network. We are a company that still is pushing to grow volumes, in all areas, all its business units and has clearly stated, and that has not changed to outperform market growth rates. At the moment, in the current Sea Logistics environment we have put this target on hold for generating higher yields and higher EBITs per TEU as mentioned before. Thank you. Thank you. The next question comes from Sebastian Vogel with UBS, p lease go ahead, sir. Hello and good afternoon? I have just one question on Sea Logistics. It's with regard to the M&A impact there. If I am calculating correctly, the gross profit margin on the incremental business was quite pronounced. Is that a specific factor because of the consolidation or is that something which we could think of could go on there going forward, or how should we put that into context? Gross profit margin per incremental TEU is a reflection of the current market situation, which we described throughout the last hour. Yeah, the conversion rate is like 68% on the sort of incremental gross profit versus incremental EBIT. That's a bit of a high number. The current market situation. Sorry, Sebastian. It's a reflection of the current market situation because we only onboard cargo where we have a high service demand, where we are able to fulfill customer expectation. That is exactly reflected in the conversion rate. Many thanks. Sure. Today's last question comes from the line of Carolina Dores with Morgan Stanley, p lease go ahead. Hi, good afternoon? One question from me. I guess, given that the supply bottlenecks are getting worse and not better, what concerns you in terms of pressure points on the cost side that could squeeze the margins and drive profits lower? I do understand the third quarter is a special situation, but I'm just worrying on the cost side, what is your main concern for the next few quarters? On the cost side, our main concern is that our eTouch and automation can be fully deployed because this would mean that our human being or the personal interference is decreasing. The more markets stabilize, and we are anticipating, as I said, a worsening, but we can anticipate it at the moment, maybe better than three months ago or two months ago, or we can drive productivity through technology. We need our experts to interfere with customers and suppliers, and to interact with them. Therefore, at the moment, I would say it's more driving our automation to become even more effective in the current market environment. Thank you. Thank you. This was today's last question. Thank you, Alice. Thanks, ladies and gentlemen, for joining in for the nine months analyst call of Kuehne + Nagel International AG and our performance throughout the last three quarters. You saw that we have performed very strongly. 2021 remains unpredictable and challenging, but we find ways, and we find solutions for our customers. We remain committed to our proven strategy, staying on course, I mentioned before. This strategy includes providing reliable, high quality, technology supported and data-driven services to our customers. A selection of where we want to grow as that mid double-digit growth on the Transpacific with a clear focus on those trade lanes that really matter for our customers. It is all about our logistics experts. That is also reflected in some of the last questions that we had. Our technology platforms and our agility to adapt and find solutions to the market situation. We thank you for joining us. Have a nice year- end, and I am sure we will talk again, in early March next year to see how the year has closed, the year 2021 has closed. Cheers and bye-bye from Kuehne + Nagel. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference, y ou may now disconnect your lines. Goodbye.