Ladies and gentlemen, welcome to the nine months 2023 Results Conference Call and Live Webcast. I am Sandra, the Chorus 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. In the interest of time, please limit yourself to two questions only. 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 Mr. Stefan Paul, CEO of Kuehne+Nagel. Please go ahead, sir. Thank you very much, Sandra. Good afternoon, and welcome to the presentation of Kuehne+Nagel's nine months 2023 financial results. I'm Group CEO, Stefan Paul, and I'm joined on the call today by our Group CFO, Markus Blanka-Graff. Let's go into page number 2, nine months results. The solid financial results for the first nine months of 2023 reflect accelerated cost management and continued strong yield management amidst subdued demand for logistics services. They also reflect the extraordinary comparison basis of 2022 results. As was the case in the first half, EBIT for the first nine months of 2023 would have been the strongest in history, excluding the pandemic years, 2021 and 2022. Net turnover was CHF 18.2 billion, gross profit, CHF 6.7 billion, and EBIT, nearly CHF 1.6 billion. Our focus on cost control has intensified over the course of the year, with visible sequential cost reduction in Q2 that we extended in Q3. This exemplifies the flexibility of our business model and long-standing experience of right-sizing our cost base to the market environment. Our strategic focus on yield management also supported our financial results in the first 9 months of the year, with particularly strong gains in the first half. Let's move on page number 3, Sea Logistics. As always, from left to right, volume in TEUs, GP per TEU, and EBIT per TEU in Swiss francs. Sea Logistics generated EBIT of CHF 875 million through September. The effect of cost measures became visible in Q2, and even more so in Q3, as unit costs declined by 17% year-over-year and by 13% versus Q2. In Q3, Sea Logistics also achieved its first quarter of growth since Q2 2021. Our year-on-year increase of 0.3% slightly outperformed the overall market decline of between 1% and 2% year-over-year. As suspected, there was no peak season in Q3, but volumes did improve modestly once again on a sequential basis. For Q4, we anticipate volumes to be broadly similar to Q3, excluding the effect of discontinuing some lower yield volumes in line with our yield management strategy. These volumes represent about 130,000 TEU per year. Despite this, we expect volume to grow year-on-year in Q4. Market share gains have not come to the expense of yield or mix development. Year to date, SME volumes grew by 6% year-on-year versus -10% for commodity volumes. This brought our share of SME volumes to nearly 50% of total, versus the mid-40s during the same period last year. In Q3 alone, SME volume growth was +1% year-over-year, versus -1% for commodity volumes. The yield decline from Q2 to Q3 was most visible early in the quarter, with some recovery and relative stability in the last two months of the quarter. Q4 will bring more sequential yield pressure in light of significant supply and demand imbalance. We will respond by continues to focus on cost measures. Page number 4, Air Logistics. Again, from left to right, tons, GP per 100, and EBIT per 100 in Swiss francs. Air Logistics delivered EBIT of CHF 429 million during the first nine months of 2023. As with Sea Logistics, the pace of Air Logistics cost management efforts accelerated in Q3. Unit cost declined 23% year-over-year and by 14% versus Q2. Volumes declined by 9% year-on-year in Q3, broadly in line with the overall market. Volumes in Q3 were once again weighted down by double-digit declines in Transpac. Sequentially, volumes improved once again with a 2% uplift versus Q2. This extends the modest sequential volume recovery of H1. Mix trends in Q3 resembled in H1. Volume in the general cargo segment remained weak, but perishables demonstrated strong, absolute, and relative year-on-year growth in the low double digits. Volumes from the semicon sector, a strategic growth area, continues to grow at multiples of prior year levels, again, versus a low base. For Q4, we do not expect an air freight peak season. Typically, a peak would entail a volume uplift from Q3 to Q4 in the range of high single-digit%. Our expectation for Q4 this year is for volume similar to that for Q3. The yield decline from Q2 to Q3 mirrors the Sea Logistics development. The weakest result was in July, with modest recovery and stability in August and September. The sequential decline reflects an uptick of capacity, weaker yield development at Apex, and some dilution from stronger perishable growth. Next is page 5, Road Logistics. Road Logistics EBIT of CHF 119 million for the first nine months of the year nearly exceeded the all-time high achieved last year. Shipment volumes declined by 9% year-on-year in Q3, but slightly outperformed the overall market, which appeared to contract by more than 10%. Strong pricing and effective supplier cost management mitigated the volume pressure, so that gross profit declined by only 5% in Q3, excluding currency headwinds. The Q3 conversion rate of 9% showed a year-on-year sequential decline, but it still marked the second-best Q3 performance ever. Following last year's result, due to a 3% cost reduction versus last year and a 6% versus Q2. Sources of savings included fewer FTEs in high-cost countries, as well as lower admin cost. Page number 6, Contract Logistics. Contract Logistics delivered a record high EBIT result of CHF 158 million for the first nine months, or Swiss francs CHF 149 million, excluding a one-time gain booked in Q1. The EBIT of CHF 48 million in Q3 was lower than last year's result, which was the best ever quarterly result for the business unit. Gross profit grew by 2% year-over-year in Q3, or 5% excluding currency headwinds. We believe our market share expanded during the reporting period, thanks to our strategy to focus on selected verticals and customers less affected by broader market fluctuations. New business wins are up by more than 20% year-on-year in the first nine months, while our pipeline has expanded by more than 50%, which makes us confident about our prospects in the coming quarters. Now, next, page number 7, an update on our Roadmap 2026. We have much to report on the strategic roadmap progress we achieved in the third quarter. Let's start with the market opportunities. We expanded our capacity and offering in the strategic healthcare vertical. We also commenced deliveries for the NEOM project, announced in late August, an early and significant success in our efforts to grow in the renewable arena. Remember, this industry offers high growth opportunities with a limited competitive landscape. On the technology front, we have appointed a new digital transformational officer, reporting directly to our CIO. He brings relevant experience to the group as our cloud migration program is in full swing. As a reminder, this project will yield multiple benefits, including faster, more consistent exchange of data. Equally important, it will provide a platform to more effectively leverage all of our data, including applications of artificial intelligence, and to create new services for our customers. In terms of sustainability, we have also expanded our offering to include an emission reduction solution for road logistics customers. Let's move to page 8. You see the picture of the wind blade. This is a picture of our renewable project showing local transportation activities towards the harbor facility in Shanghai. I traveled to China two weeks ago and would like to share some of my key takeaways. On the agenda for this trip were visits with several customers in a number of verticals, including renewables, e-mobility, semiconductors, high tech, and e-commerce. These visits left me with an overall impression of China's speed, agility, and optimism and technological progress. Following the COVID pandemic, many in the West seem to have the perception that the growth we were used to seeing from China would come to an end. These visits showed me that the potential remains despite the global slowdown in GDP growth. We, as a company, must understand their evolving service requirements and to be ready to take advantage of this dynamic so that we can grow with them, both inside and outside of the country, and in particular, to support our end customers in North America and the European marketplace. With this, I would like to hand over to Markus. Thank you, Stefan, and good afternoon, everyone. Thank you for your interest in Kuehne+Nagel and taking the time today for the nine-month result 2023. As Stefan has outlined, and, as a quick summary, we witness an environment of demand for global logistics services that remains subdued. A sea freight peak season did not materialize in Q3, and confidence remains low in material air freight peak demand emerging in the fourth quarter. Destocking effects may now be fading, but inflation challenges persist, and geopolitical tensions are rising further. We have been managing through countless economic cycles and periods of unforeseen volatility, a credit to a high, flexible asset-light business model, combined with our entrepreneurial spirit. Hence, our current focus is on cost control that intensified during quarter three of 2023 and culminated in a much more visible reduction of unit cost. This reflects both a reduction of absolute costs with stable to increasing sequential volumes in sea and air freight. Contract Logistics and Road continue to further increase their profitability levels in such volatility market dynamics. That as a small summary and layout of how our P&L is coming along. Let's start with the income statement. As expected, we can see negative developments on nearly every P&L line compared to last year. That was of exceptional nature. What matters is the absolute performance with EBT of CHF 455 million in the third quarter or CHF 1.6 billion in the first nine months. A result that could have been a full year result in any year before the pandemic. The gross profit margin continues to outperform 2022, confirming some early successes in our strategy to focus on higher-yielding business. We see a solid conversion rate of 23.5%, also supported by diligent FTE resource management. The combined sea and air freight conversion rate was 39.2% in quarter three. For reference, the full year 2019 result was 28%, excluding one-offs. Headwinds coming from currency increased with a negative impact of around 4%, which is around CHF 320 million at a gross profit level, and around 3% or CHF 80 million on earnings before tax. So quite significant. There were no reported non-recurring impacts in Q3, just for your reference. Moving on to working capital, one of the topics that has been on the agenda for the last couple of quarters, quickly contracting due to the reduction of receivables and contract assets compared to one or two years ago. Together, currently at around CHF 4.2 billion. Receivables have reduced as a function of lower rates, extra charges and of course, lower volumes. Looking forward, I anticipate stable net working capital in absolute terms for the next quarters to come. DSO, as you can see, have expanded against the beginning of the year and against the same time last year. DPO, on the other hand, have increased also quite significantly, so that the spread between the DSO and the DPO has increased to 12.6 days. Net working capital intensity is based on a quite narrow selection of working capital items in the cash flow statement. The net working capital intensity deteriorated slightly by the close of Q3, with a result of 3.3% versus 2.8% for Q2, and as a reference, 3% in the first quarter. The absolute level of CHF 795 million is slightly up, about 7%, versus CHF 740 million at the end of June. In September, DSO and DPO stood at 57.5 and 70.1 days, respectively, both having increased by roughly two days relative to the June numbers. In absolute terms, this points to a CHF 260 million reduction of receivables, more than being offset by CHF 314 million reduction of payables, driving a net CHF 54 million increase of working capital, as you can see in the schedule above. This leads me to page 12 and to the cash and free cash flow generation. Q3, free cash flow of CHF 233 million represented a 73% cash conversion, always in relation of, net income before minorities. While that has been better than the trough in the free cash flow generation in Q2, which was, as we explained at that point in time, weighed by large cash bonus payments and dividend withholding tax impacts. The Q3 result was below our long-term average of approximately 100% cash conversion rate and should not be considered indicative of what is to come. A reference made also to our first quarter free cash flow generation, which was at around 91%. Two factors contributed to the relatively weak result in the free cash flow generation. We had a later phasing of tax payments, which obviously now in an environment of positive interest rate, is beneficial. And secondly, some working capital pressure that I have explained previously on the DSO progression. As a summary, we anticipate further improvement of the free cash flow conversion in the fourth quarter, and I can't see any reason why we shouldn't return to the 100% or around 100%, conversion rates when these effects that I mentioned will dissipate. With these comments, I'm already at the end of our presentation with some key takeaways. Following a solid Q3 2023 result, with a continued and intensified cost control, signs of modest volume recovery in the sea freight arena, active yield and portfolio management that continues, and, a clear early success with our Roadmap 2026 initiatives. With that short presentation, I want to thank all of you already now, and would open the line for Q&A. Sandra, please. 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 a 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. In the interest of time, please limit yourself to two questions only. Anyone who has a question may press star and one at this time. Our first question comes from Alexander Irving from Bernstein. Please go ahead. Hi, good morning, gentlemen. Two from me, please. I'll start with the bigger picture one. Is the global inventory correction coming to an end? You steer towards some of the volumes in Q4 as in Q3 across sea and air, but what do current inventory levels imply the volume developments over the subsequent couple of quarters? My second one is on cost behavior when volumes recover. Is it right to think that we will see a further reduction in unit cost as that happens, as eTouch driven productivity impacts support a reduction in unit cost with a high level of volumes? Or is there a reason why unit costs will either stabilize or grow from here? Thank you. Sure. Thanks, Alex. Can you help me on the first question? It was hard to hear from the line. You talked inventory development or what were you talking about? Sorry about that. Is the destocking done, basically? Can your Q4 guide suggesting the volumes as Q3? But where are inventory levels, and should we expect volumes to recover? Got it. Well, I think what we currently witness is that at least the sea freight market, you know, that is probably -1%-2% in Q3. We are taking market share and are, you know, slightly positive, I would call it. Our exit, certainly in September, was a positive rate. We would say that inventory levels are not fully depleted yet, right? We are still seeing that inventory is being reduced, particularly in Europe and the U.S. Is that gonna continue? I mean, the logical answer is eventually it will stop. But at the current stage, we should not expect a turning point. We should not expect a recovery that is broadly based on the restocking. Hi, Alex, Stefan speaking. Good afternoon to you. I take the cost question, so the cost development. So your question was, do we foresee an increased cost per TEU or per 100 kg if the volume bounces back? So let me take it from a different angle, maybe. Looking at our Roadmap 2026 and our digital ecosystem, we have now concluded on the two partners. One is Azure. We have now moved everything into the MS 365 cloud, including, and that is what I would like to emphasize here, including our customer service activities. So customer service now is fully leveraging the new CRM system in the cloud, supported by Azure. And we are connecting, as stated already a couple of months ago, we are connecting now our operational systems with our CRM system in order to carve out cost and to be much more effective in, the way how we deal with our customers and manage customer service. So that, that will bring us more on a, a long-term basis, a release in, in terms of our cost is concerned. That will help significantly when the volumes come back. And the second answer to it, we have now as well concluded on the second partner, which is AWS. We will move our operational stack into the cloud, from a lift and shift perspective. This is a mid- and long-term, as well, lever to ensure that we do not recover from a cost perspective, and that we need to add resources as soon as the volume, hopefully in 2024 already, is bouncing back. It's a strategic shift in terms of how we manage our cost base as well, independent from any volume development in the next years to come. Thank you very much. The next question comes from Robert Joynson from BNP Paribas. Please go ahead. Good afternoon, Stefan and Markus. Two questions from me, please. So, first of all, if we look at our sea and air, specifically, SG&A costs came down by about CHF 60 million between Q2 and Q3, and that was pretty similar to the like-for-like sequential reductions at around CHF 60 million seen in Q1 and then CHF 40 million in Q2. So I guess kind of just over CHF 50 million on average for the last three quarters. Should we expect a similar run rate going into Q4 and then kind of maybe into Q1, Q2 of next year? Maybe some color around that would be helpful. And then the second question. If I look at the combined EBIT produced by sea freight and air freight, the peak was in Q4 of 2021. It was at CHF 1.06 billion. Since then, we've seen that number decline for seven consecutive quarters, now down to CHF 370 million or so in Q3. So a reduction of around 65% from peak. Obviously, that number is driven by quite a few moving parts, but could you provide some color on when you think that combined sea and air freight, EBIT will trough? Do you think the trough may have happened in Q3, or could that number continue to slide in the coming quarters? Thank you. Hi, Rob. I take the first one on the cost development and the outlook for Q4 in the next quarters to come. So that was not a one-time wonder in terms of how we manage the cost and how we articulate internally the effectiveness on the cost measures and what you could expect from us. So what we will definitely do is we will continue with our cost measures moving forward. It's not only from an operational perspective, we look as well into the admin cost buckets, and we have a clear plan how to execute and to reduce our costs quarter by quarter moving forward. So that is an ongoing effort which will be accelerated during Q4. So on, and on the second part, and, and your observations are, spot on, as always. So I think the, the answer is twofold. There is, there is the GP per unit, obviously, that we, that we need to, to manage. And the way how GP per unit is managed, as you well know, there's a lot of, in- or a lot of influence comes from the market conditions, from the capacity, from the carriers, from, You know, some part we can, we can obviously manage, which is our product mix, so which is the mix of our customers. I think we have been quite, vocal around it, that we want to actively manage into a higher-yielding business going forward. So this we can do. At the same time, we manage our cost, as Stefan just alluded to, quite quite openly, that we can also manage. So what we really do is we look at EBIT per unit, and I think from that perspective, when we continue to actively manage our cost and at the same time, be as efficient as possible on the management of the market, as well as, how we manage our customer portfolio, I would like to believe that we are probably at a point where we should not see any further sliding down. There might be a point where we continue to be at the level that we currently are, but I think I see more upside potential until 2026 than downside potential. Understood. Thank you. The next question comes from Sam Bland, from JP Morgan. Please go ahead. Oh, thanks. Thanks for taking the question. Two, please. The first one is on air costs. These were very good, surprisingly good in Q3. Could you just sort of talk about whether there's anything in there that's sort of non-recurring in nature? I've had a few questions on whether there's provision reversals involved. Is there anything that might not repeat the strength in Q4, or is it quite recurring, that sort of strong cost performance? The second question is, so with reference to the 2026 targets, which you laid out earlier in the year, could you just sort of talk about how things are progressing versus where you might like to have been when you set those targets at the time, and whether you could maybe sort of split that into sort of whether the market's been better or worse than you might have hoped for, and whether kind of company-specific objectives have gone better or worse than you might have hoped for when you initially set those 2026 targets? Thank you. Hi, Sam. Sure. Let me take the first question, because I know that there is communication out in the market that is based on some numbers in the cash flow statement that would, I think, have... Would like to have identified, like a CHF 20 million bucket, which was from external, you know, labeled as provision reversals. That's not the case. There is indeed nothing that is extraordinary nature or one-off nature within the Q3 on the air freight cost development. The movements that allegedly have been identified as such are normal movements, and we talk at CHF 20 million magnitude. I mean, in relation to the group accounts, I think it's already obvious. So, that is normal movements in provisions and at the same time also on the payable side and on the receivable side, much, much bigger movements. So I think that is, it's a bit of a balloon. The reality is we have clear cost control in air freight, nothing extraordinary. Then I take the second one in terms of the 2026 target and our roadmap, which we have communicated the first time, March 1, in London. I think everything what we can influence, if you look at the four cornerstones, right, we are rather happy with, and nothing has changed. Let's take CX, for example, first. CX, customer experience and employee experience. We have just concluded on the first net promoter score survey. Results are not yet in, but, as promised, we'll communicate later this year or beginning of next. We had a very high engagement ratio on the EX with our people, more than 80%, quite high on both sides, on the white and blue collar, which is promising. And, if you look at the market potential, SME growth, pretty, pretty happy with what we have seen, in particular in sea freight. Cost-consciousness and, and the cost-effectiveness, I think we have seen already in the second and the third quarter, and we talked about that, quite good development. Renewable energy, semiconductor wins, especially in air freight. Now, with e-commerce coming in from Asia, we see as well a certain share coming in for Kuehne+Nagel. And then I have to say, we are absolutely in plan, when it comes to the digital ecosystem. Just as just said, I'm repeating myself, signed now the two contracts, MS 365. The customer side is already in execution, and now we do the lift and shift of our operational stack. And living ESG, we have communicated as well. So everything what we can influence as Kuehne+Nagel, we are still on track. I think what we have seen now is contrary to our view in the first quarter, or when we crafted the strategy, the market has changed significantly. And of course, we need a certain bounce back of volumes in 2024, 2025 to come. And that is the uncertainty when it comes to our target expectation. But I can reiterate everything, what we can influence, the product mix, the go-to-market, the cost measures, how we execute, we are still very confident that what we have promised, we will be able to deliver. Yeah, understood. Thank you very much. The next question comes from Muneeba Kayani from Bank of America. Please, go ahead. Thank you for taking my questions. Stefan, I just wanted to go back to Air unit GP. You talked about a couple of factors that impacted it in Q3, including the sequential decline, including an uptick of capacity, weaker yield development at Apex and dilution from perishables. Like, how have these trends, or what's your expectation for these trends developing in Q4? And so what's your expectation for Air unit GP in the fourth quarter? And then you talked about NEOM, and we've clearly heard a lot about that from your other competitor. Kind of, do you see more opportunity in Saudi Arabia and more projects like this? Thank you. Okay, to the first question, what is my expectation or our expectation on Q4? Unchanged. Similar kind of mix and GP development. I was talking about missing peak season. The only peak season, mini peak season we see is coming out of South China, Shenzhen and Hong Kong, due to the e-commerce boost of two or three customers requiring a lot of capacity. So, here we, we might see a little bit of higher yields. But overall, Q4 will unchanged or similar to Q3 GP. NEOM, just to ensure, we have decided to focus pretty much on the suppliers, the partners of NEOM and Saudi, right? So we focus on the supplier side of the NEOM project and we deal with suppliers in the renewable energy, mainly currently out of China. So the freight is paid outside of Saudi. We see a lot of demand coming in from large turnkey projects, especially in project logistics, which we execute via our sea freight and project organization. There is more to come over the next couple of years, but I need to reiterate, we basically focus on the supplier side and not on the NEOM organization as such. Thank you. The next question comes from Andy Chu, from Deutsche Bank. Please, go ahead. Thank you. Afternoon, Stefan, Markus. Just following up on NEOM, just to be crystal clear, obviously you're focusing on the partner side, but were you interested at one stage, with a JV, on NEOM? And then just on the, GP per TEU, you've given some help on, on the air side. Please maybe just give us some help on what you expect for GP per TEU for Q4. Thank you. Andy, I take the first one. Yes, we have been in discussion with the NEOM organization a couple of months ago, but we then finally have decided not to pursue further 'cause this is outside of our business model, the 3PL asset-light model. And instead of talking further through this investment, we have decided clearly to focus, as I said before, on the supplier side rather than on the ground handling. Andy, from a GP per TEU, I understand. I think the answer is very similar to what we have seen on the air freight side. I think the Q4, from where we sit today, is gonna be rather a continuation, you know, a sideways development, compared to Q3. I would not expect any significant movements in the GP per TEU in the fourth quarter. Right. Thank you very much. Thank you. The next question comes from Michael Foeth from Vontobel. Please go ahead. Yeah, thank you. Thanks for taking my question. Very interesting comments on your China visit there. I was wondering if you could elaborate a bit more. Do you actually currently see growth in China above the group average? And can you relate maybe that to the performance of Apex as well? That would be the first question. And the second one is coming back on those yields. Obviously very difficult to judge where they go, but are you still comfortable with your longer-term sort of level of 500 to 500 and 100 further out, obviously, from here? Hi, Michael. Yeah, I will touch the first question, China visit. So, I think what I have seen there is particular, the old economy, so to say, and the new one, and I was really impressed about some of the brands and the speed, how they want to basically execute the products within China, but as well outside. And I mentioned a couple of industries, is the e-mobility in particular, is everything around mobile network, high tech. It's massive in terms of the technological technology development I have seen there. And in particular, I was impressed with the e-commerce approach. There is so much volume to be expected to uplift in Q4 and the next quarters to come from a couple of new Chinese players, the Chinese giants, who are really, really changing the e-commerce market outside of China in particular as well, when it comes to European end consumers and the American end consumers, particular certain, certain, certain age levels, basically buying more and more from, from these new customers. And that would, or that will definitely bring new opportunities when it comes to volume development, and in particular for Apex, 'cause the demand is growing as we speak. So we will leverage that pretty much so in the next quarters to come. Yeah, Michael, and on the yield, I think, we gave indications, you know, that are obviously quite broad, numbers, you know, going forward. I think for the-- Let me start on the sea freight side. I think, the important number is the EBIT per TEU. So I cannot exclude, and we currently are in a situation where we-- our GP per unit is below CHF 500, and I think that, that could be even for an extended period of time. However, our cost base also has, as you have seen already in the third quarter, and it's gonna continue like that in the fourth quarter and next year, our cost base is very well managed towards that. So the 200 EBIT per TEU, you know, we're delivering currently, and we, we intend to continue to do that. So, I think, and 2026 is still some, some way out. I think we manage actively the EBIT per TEU. We might be below the 500, but then we are also below the 300 cost base. I think that is the message. There's no linear way to get there. I think there's gonna be some fluctuations in both of the numbers. On an air freight side, I think the 100 Swiss franc GP per 100 kilo, I think that is something that we are still very much aiming towards to. But a similar comment around there, it's the EBIT per 100 kilo that we manage, and of course, we are committed to our product mix. That includes, obviously, perishables and some other cargo other than dry cargo, obviously, and some niches to it. So, in that environment, I think that still holds, that still holds up as our strategy going forward. Okay. Very clear. Thank you. The next question comes from Sebastian Vogel from UBS. Please go ahead. Hello, and good afternoon. I have two questions. The first one is coming back to the cost-cutting side of things. If we look into air and sea freight, how much sort of easy to pick fruits you see here have already picked, and how much is still to go? And the other question is on the capacity influx on the sea logistics side. How long do you think you will continue to see an influx there that might have an impact then on rates and therefore an indirect impact on your business? Cost cutting is never, never easy, Sebastian, but at the end of the day, it's twofold, right? And I said it at the beginning, it's twofold. It's the operational adjustment on our cost position, and it's the admin adjustment of our cost position, and it's the structural adjustment in terms of leveraging new technology. And basically, we see that there is still room to maneuver in terms of how do we operate the business? How do we manage the cost per file in these three aspects: operational, admin, and structural cost changes by leveraging the new ecosystem. So two is short-sided for the next couple of quarters, and the third one is a long-term gain for the next three or four years to come in order to manage the way how we execute our business differently by leveraging the latest technology, including artificial intelligence and machine learning. I think on the capacity side, Mm-hmm. I think on the capacity side, sea freight, that was your question, Sebastian. I think we have long-term... I mean, we all know the order books from the carriers, but we are not a carrier. So, but I can only observe as much as you can, you know, that the long-term picture is virtually an overcapacity until 2025, you know? But remember, our market share is quite low, and we focus on the right mix rather than rather than just, you know, trying to grow exponentially. It's the right mix, and we will continue to grow in the right area, and with our market share, that should be possible. So overcapacity will be our environment we work in for an extended period of time. However, when we focus on the right things, the right mix, and the right areas to grow, we should be able to do that. Got it. And if I may come back to the first question, a small follow-up. On the first two, as you mentioned, the operational adjustment, the admin cost there, how advanced do you think in terms of whatever, you know, on a scale of 1-10, how much you have already realized there, for AMC? Well, we said we have seen the run rate of CHF 60 million, respectively CHF 50 million, right? And that is going to continue for the next quarters. I wouldn't say it's 1- 10. Basically, we are in the middle of execution, and there is room to maneuver. Got it. Many thanks. The next question comes from Gian Marco Werro from ZKB. Please go ahead. Thank you, everyone. Two questions remaining from my side. So first one is on the personnel cost reduction, which is really impressive in the third quarter. Can you give us a bit more details here on which business units, and also in the business units, which job profiles where you really could reduce those FTEs and also the costs? And then the second question is more on your volumes in air freight. I mean, if I compare it with the market development, I would imply that this would imply some market share losses here. However, I can imagine this goes hand in hand, of course, also with your focus strategy. Can you tell us how much is really based on your focusing strategy, and how much was really a market share loss that you did not plan for? Thank you. Okay. As I have tackled the cost questions already, I will continue with this. So from a job profile perspective, we have the operator level, so people who are executing the freight from order to cash. This is one part of our cost measures. And the second part is, and I mentioned it a couple of times already, it's the admin. And admin means HR operation, finance operation, sales support, quality measurement. Everything, what you use basically in order, outside of running the business, right, to support the business. And these two areas are the main focus for our cost measurements, currently and in the next quarters to come. Okay. Then, Gianmarco, we have on the market share loss in air freight. I'm not 100% sure if I can follow you there. I think we have the two businesses, if you like, right? We have seen some developments in the on the e-commerce part. We haven't lost any market share, you know? I think certainly not compared to our peer group. I think there is good development on e-commerce exports. They are boosting currently the industry air freight statistics, so there is a lot of that coming out of two major players. And that's more an effect of a larger volume altogether out of these two players, rather than us losing on a market share. So it's a bit of a technical explanation to what you say. That's clear. Thank you. The next question comes from Sathish Sivakumar from Citi. Please go ahead. Thank you. I've got two questions here. Firstly, on the volume development within Transpac, obviously, you said you gained market share. Any color on, like, quarter-on-quarter trends over there? How much volume growth did you have in that particular trade lane? And just related to that, if I look at your Americas TEU count versus last quarter, it's kind of up around 5.6%. ... obviously, you are investing in that region. Do you, do you think that you're kind of done investing in that particular market, or you still have more to go? And then the second one, on the cost per FTE, even though your headcounts are actually gone up, your unit cost per FTEs actually come down, and it looks like that's mainly driven by some of the temporary staff unwind. Do you see more room to go there? And what is actually driving it? Is it seasonality, or are you actually, like, taking out some of the overtime related costs out of the system? Thank you. Hi, Satish, it's Markus. I think on the first question on the specific development in Transpac and the development on that particular trade lane, I would have to ask that you contact Chris on that, because honestly, on a, on an individual trade lane perspective, we're not ready to give public information here. Cost per FTE, and I think depending on which statistics you looked at, obviously, what I can say is following up on Stefan's comments, number of FTE in air and sea freight have reduced. So that clearly says that the number of employees have reduced as well. Secondly, I think yes, there is a clear move from high-cost countries into lower-cost countries through global services, shared services, and alike. So that will lighten the cost for FTE as well. Temp labor is more a topic in the contract logistics and to a certain extent in the road logistics area, to a very small extent, also in airfreight perishable. But I wouldn't believe that the statistics would have a big impact out of that section. It's really more temp labor in contract logistics and particularly road. So I think it's more about the initiatives and how on a specific basis, you have to look at the number of the employees that are working for us. The current cost, cost per FTE, would that be like more normalized levels that we should be seeing, going forward? Which cost of FTE? I have to be picky here. Which cost of FTE are you looking at? So if I do, just taking a total personnel cost and dividing it by, say, full-time equivalent of employees, around 74,000. Yeah, but that is, that is too many moving parts that I just explained. There is a lot of mix into it. Temp labors in Contract Logistics, reduction of white collar, much more expensive people in the air and sea freight arena, shift from expensive to less expensive. So in that, in that context, I think it becomes very, very difficult. At the same time, we have digitalization that obviously reduces equally a number of, number of FTEs. I think at a total group level, that, that KPI is, is not very helpful. Okay, got it. And just on my first question, do you need to see that, are you still investing in Amer- like, North America, or are we kind of like reached to the required, say, sales force there? Stefan here. So we have shared how many FTEs we have invested into our SME sales force, and this is going to continue. And that includes, of course, the very important North American marketplace. So we invest in customer care locations and sea freight, in particular, SME salespeople, globally, including the North American market. So we are not yet there. Okay, got it. Yeah. Thank you. The next question comes from Marc Zeck from Stifel. Please go ahead. Hey, thank you for, for your time. One question from my side, really just a clarification. I believe in the beginning, you said that Q4 yields will be, you said air yields will be under some more pressure, but then the Q&A, you referred to air yields and sea yields and said that this will be broadly similar to Q3 and Q4. Could you just, yeah, clarify what, what's then the case? Yeah. Good question. We were referring to EBIT, so our expectation on bottom line is similar to Q3. If the yields, if the gross profit per unit is going down, we react with cost measures, and that is what we said. So we were referring more to the total EBIT rather than on the individual, yield position. Okay, understood. And then basically, if you say that, and I guess you said that also in the beginning, that volumes are broadly flat across A&S, and the fourth quarter was third quarter, and seasonally, road and contract logistics kind of see slight uptick in the fourth quarter. Are you then saying that you expect Q4 EBIT to, yeah, to be roughly in line with Q3, or are there any other movements that I might have missed? Short and crisp, yes, roughly in line. Right. Understood. Thank you. Welcome. The next question comes from Nicolas Mauder from Kepler Cheuvreux. Please go ahead. Hi, good afternoon. Two from my side, please. The first one, yesterday, we heard a lot about a competitor going after larger clients as opposed to SME clients in the past, while you, earlier this year, published a strategy focusing more on higher profitability business, including a lot of SME. From your perspective, do you think this is a reaction to your renewed SME focus, or is this driven by other motives there? Sorry, the second one, we've also seen a large dividend paid to minorities in the third quarter, probably reflecting the very successful 2022 at Apex. What should we expect here going forward, considering that your share in Apex has also increased over time? Should we think about, like 100% of minority attributable profits being paid out going forward, or is that the wrong assumption? Thank you. I take the first one. I will not comment on any competitor or strategy or approach or roadmap from competitors, right? Whether this is a reaction on us or not. So we focus pretty much on our customers, on our strategy, on our roadmap, and we have deliberately taken the way that or the choice that we go for a very balanced view and more SMEs than in the past, the 50/50, which we have reached already. And we, and I'm reiterating, are further developing both key accounts and and SME. And in order to grow the SME portfolio, we have done two things. First of all, we have hired more salespeople, hunting sales force. We have changed as well the incentive program for that, and we are moving close and closer to our mid-sized customers by opening up these customer care locations. So that's the answer on what we do, but please allow me not to comment on anything from the marketplace. Sure. And, Nikolas, good to talk to you again. On the dividends, on the minorities, I think very clearly, yes, the high cash outflow is related to the extraordinary good performance from 2022 to cash outflow in 2023. And yes, indeed, we step-by-step increase our ownership in Apex. And, obviously, dividends are gonna be declared and paid for 2023 in 2024, according to the ownership, according to the ownership shares. A payout ratio, like, similar to, to what we've seen in 2023? In relation to the minorities, yes. Okay, thank you. All right. Excellent. Thank you very much. I think that was the last question that we had, and we appreciate your time and interest in Kuehne + Nagel, and we would close the call. All the best to all of you, and have a nice day from Stefan and myself. Handing back to Sandra. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.