Ladies and gentlemen, welcome to the full-year 2023 Results Conference Call and Live Webcast. I am Sandra, the conference operator. I would like to remind you that all participants have been placed 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 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 full-year 2023 financial results. I'm Group CEO Stefan Paul, and once again, I'm joined on the call today by our Group CFO, Markus Blanka-Graff. Let's look into page number 2 of the presentation. We delivered a robust financial result in 2023 thanks to ongoing and resolute cost and yield management. We also made more progress toward meeting our long-term strategic ambitions. We achieved this robust result amidst subdued demand with some signs of improved volume trends at the end of the year. The 2023 EBIT result of CHF 1.9 billion represents a solid performance for the group following the extraordinary result of the pandemic years 2021 and 2022. The fact that the% decline in gross profit year-on-year was half the decline in turnover is a direct consequence of our resolute cost and yield management throughout 2023. Our ability to radically match our cost base to the market environment underscores, once again, the flexibility of our asset-light business model. Cost control measures intensified over the course of the year. This is evident in the substantial reduction of operating cost from the first half to the second half of 2023. Additional measures taken near year-end will drive further improvement already visible in the current quarter. They will result in a headcount reduction of nearly 1,300, with roughly 40% already implemented by the end of 2023. These latest measures come at a cost of CHF 53 million booked in Q4, but we project recurring cost savings equivalent to at least twice that amount. Additional cost measures are already in progress in Q1. Our strategic priority on yield management also supported our 2023 financial results. We drove a positive shift in our portfolio mix. At the same time, we see some stabilization of demand, and we are well positioned to maintain or expand our share of a recovering market. Our success in shifting the mix is most evident in sea logistics. Next is sea logistics deep dive, TEU, GP per TEU, and EBIT per TEU in Swiss franc, as always. Sea logistics produced EBIT of CHF 161 million in Q4, excluding one-off costs, and a full-year EBIT of just over CHF 1 billion in Swiss francs. The positive shift in mix I just mentioned on the previous slide came primarily from higher yielding SME volumes. They outperformed with a growth of +7% year-on-year in contrast to commodity volumes, which contracted by 9%. Overall volumes were down 1% for the year but up 1% excluding the effects of our choice to discontinue certain commodity volumes from early Q4. This compares favorable to estimated market volumes, which were down by 3% for the year. Looking at Q4 alone, volume trends ended the year on a stronger note. Overall organic volume was up by 5% year-on-year versus overall market growth of only 2%. Our SME volume alone were up by 9% in Q4. Unit costs fell by 14% in the second half relative to the first half thanks to a 7% increase in volumes and a 9% reduction in recurring operating expenses. This excludes consideration of the CHF 21 million one-off costs booked in the fourth quarter. When evaluating the likely run rate cost base going forward, one should take into account the most recent cost measures, which are already having a visible effect in Q1. Over the course of 2023, yields normalized consistently but also at a moderating pace. Thus, far at the start of Q1, there are signs of sequential stability relative to Q4 average yield alongside modest volume growth. Regarding the Red Sea situation, we saw no financial impact in Q4 but expect to see some in the first half of 2024. The extent to which recent current conditions may support yields remains highly uncertain. Next is air logistics. On the left-hand side, again, as always, tons, GP per 100, and EBIT per 100 kilo in CHF. Air logistics delivered Q4 EBIT of CHF 140 million and CHF 569 million for the full year, both excluding one-off costs booked in Q4. Overall Kuehne+Nagel volumes declined by 11% in 2023 but only by 4% year-on-year in Q4, in line with estimated market development. Volume was weakest year-on-year in Q1, then improved progressively over the next three quarters. This resulted in a more typical peak season pattern from Q3 to Q4 with a 6%+ organic sequential volume uplift. This was strongly driven by perishables demand and rising e-commerce exports from Asia. We reduced recurring operating expenses by 13% in the second half relative to the first half thanks to cost control efforts. Similar to Sea Logistics, greater volumes in the second half, also +7% versus the first half, resulted in sharp 19% decline of unit costs over the same time period. This excludes consideration of the CHF 14 million of one-off costs booked in Q4. Again, please take note of the impact to come in Q1 and future quarters from the most recent cost measures we initiated in Q4. The pace of yield normalization in air logistics also moderated into year-end with a modest 4% decline from Q3 to Q4. This trend appears to have continued into the early part of Q1 alongside organic volume growth. The situation in Red Sea triggered a wave of customer interest in exploring various options, including sea-air combinations. However, to date, this has not resulted in a material uplift of air logistics demand. Next is road logistics, page number five. Road logistics EBIT for Q4 was CHF 19 million or CHF 138 million for the full year, both excluding one-off costs booked in the last quarter, Q4. Shipment volumes declined by 6% year-on-year and by 9% in Q4. We believe this volume development was broadly in line with the market. Ongoing yield and supplier cost management mitigated the volume pressure throughout the year. In Q4, this limited the pressure on gross profit to a 3% year-on-year decline, excluding currency headwinds. In the early part of Q1 2024, it appears that challenging market trends continue. We are pleased to have closed the acquisition of customs broker Farrow by end of January 2024. More on this development later in my presentation. Next, contract logistics, page number 6. Contract logistics delivered a record-high underlying EBIT result of CHF 55 million in Q4 or CHF 204 million on a full-year basis, excluding non-recurring items. These include CHF 13 million of one-off costs booked in Q4 and a CHF 9 million of profit on sale from Q1. Market share expanded over the course of the year with continued gains in healthcare and e-commerce. Ongoing process reengineering and automation supported an underlying improvement in the conversion rate Q4 of nearly 100 basis points. We look forward with confidence given the new business opportunities are up by more than 20% year-over-year. Next is a deep dive into our Roadmap 2026 targets, page 7, the progress update. We concluded baseline customer and employee experience surveys, which will serve as a reference point from which we can measure progress over the coming years. We are also improving customer experience in Sea Logistics. As noted earlier, the share of SME customers in our portfolio is expanding. Measures include the addition of 27 new customer care locations—we call it CCLs—in second-tier cities as of end 2023 and the addition of about 170 SME-focused field sales over the last two years. In the area of technology, we are now leveraging AI in a meaningful way in several areas while developing solutions in others. The scope of opportunity is wide, with implications for our own efficiency as well as pricing and the quality of our service offerings. On Road Logistics slide, I touched up on the successful acquisition of Farrow Group. Farrow represents a step change in our customs clearing capabilities in a market which is seeing strong demand growth fueled in part by nearshoring. Additionally, we have developed several specialized service offerings, including LCL for healthcare customers and an India-U.S. SME commerce solution. Turning to ESG, Q4 saw an expansion of our electrified fleet in road logistics, and we have proudly supported the first-ever transatlantic cargo flight entirely powered by SAF. We also more explicitly defined the scope of our social impact framework by identifying six key dimensions: human rights, labor rights, employee development, health and safety, diversity and inclusion, and community support. With this, I would like to hand over to Markus. Thank you, Stefan, and good afternoon, everyone. Thank you, as always, for your interest in Kuehne+Nagel and taking the time today for the full year 2023 results. As Stefan has outlined, we witnessed an environment of demand for global logistics services that remains subdued, and we don't expect a material change to this situation. Seafreight and air freight did not see a broad-based peak season in 2023. And I want to point out we have been managing, through countless economic cycles and periods of unforeseen volatility, a credit to a highly flexible asset-light business model combined with our entrepreneurial spirit. Our current focus, hence, is on cost control that intensified during Q4 of 2023 and will continue into 2024 to ensure a further reduction of unit costs. This reflects both a reduction of absolute costs and stable to increasing sequential volumes in sea and air freight. Contract logistics and road continue to defend and work hard to further increase their profitability levels in equally volatile markets. Let's start with the income statement. As expected, compared to the pandemic years, we can see lower results on nearly every P&L line compared to last year. What matters is the absolute performance with an earnings before tax of CHF 324 million in the fourth quarter, including, as mentioned before, CHF 53 million one-off costs and a total of approximately CHF 2 billion earnings before tax for the full year 2023. The gross profit margin continued to outperform 2022, confirming some early successes in our strategy to focus on higher-yielding businesses. We see a solid operational conversion rate for the group of 22%, also supported by active manpower resource management. The combined sea and air freight operational conversion rate was 34% in Q4 and just below 40% for the full year 2023. For reference, the full year 2019 conversion rate was 28% excluding one-offs. Headwinds coming from currencies increased with an impact of around 4% or the equivalent of CHF 414 million at the gross profit level and around 3% or roughly CHF 105 million on earnings before tax. On the next slide, working capital, one of the topics that has been on the agenda for many quarters, contracted due to the reduction of receivables and contract assets together currently at around CHF 4 billion. Receivables have reduced as a function of lower rates and accessorial charges. We anticipate stable net working capital for the next quarters to come. Days of sales outstanding have expanded against the beginning of the year and against the same time last year. Days of purchase outstanding, on the other hand, have had increased also significantly, so that the spread between DSO and DPO has increased to 11 days. working capital intensity is based on a slightly narrower selection of working capital items in the cash flow statement, and it has closed to, by the end of 2023, closed with a result of 3% versus 2.7% for 2022. The absolute level is around CHF 768 million and is stable since some quarters versus, in comparison, roughly CHF 1 billion one year ago. Continuing with cash and free cash flow generation, in Q4, we anticipated and reached close to 90% cash conversion rate, which represents a continuous improvement through the last quarters. Compared to the previous years, of course, this is at a lower absolute level. For a bit better illustration, we have added one additional slide when you move to the next slide. This features an expansion about the cash tax issue, which weighed on the free cash flow generation and conversion over the past year. While the headline free cash conversion was 85% in Q4, it was nearly 100% excluding cash tax effects, as you can see in this slide. In recent quarters, cash tax outflows have significantly surpassed P&L tax liabilities by wide margin. This trend, which has now faded, reflects the lag between the peak P&L tax recognized in 2022 and the usual lag in cash payments, which typically comes over the course of the following tax year. As the P&L tax of 2023 declined by about 50% year-on-year, that is, the higher cash tax outflows in that year related to 2022 resulted in significant pressure on the free cash flow generation. Another less significant factor has been our shift away from diligently prepaying tax as the interest rate environment swung from negative, as we have experienced years ago, to positive. As of the end of 2023, aggregate P&L and cash tax since 2020 is now nearly identical. Going forward, we anticipate a more consistent relationship between P&L and cash tax. Going to something more tangible and easier, as a result of our healthy profitability, well-managed cash conversion, and balancing current and future cash needs for adapting the workforce to the markets, the supervisory board has decided to propose a dividend distribution of 10 CHF per share to the AGM on May 8th, 2024. This represents a higher payout ratio compared to recent years but is in line with earlier historic values. As a special element, 1.75 CHF per share are being paid as a repayment from capital contribution reserves, which may offer tax advantages to recipients under certain conditions. But now enough of 2023. Let's move on to the activities that will shape our future, which is eTouch and our customer portfolio management. I'm on slide 14 on eTouch sea logistics. Digitalization and automation are the core drivers to increase efficiency in operation. For all of us to remind ourselves, we developed the eTouch methodology that addresses all aspects of operational processes, and we have selected only a few workflow areas for sea logistics and air logistics to demonstrate the relevance of eTouch. Man-hour savings continue to accelerate as we expand the efficiency gains through the operational processes, resulting at a positive conversion rate of around 100 basis points in sea logistics. This represents a value of roughly CHF 1 operating cost per GU. Most of you are familiar with this topic, so let's have a look at the customer portfolio management and important activity that we haven't shared in the past. Let me first explain the content of slide 15. The pie charts represent the share of product and customer type per category in terms of share of volume and share of gross profit for the years 2019, 2022, and 2023. SME is green, commodity is gray, and others is blue. Additionally, we have provided the share of Apex in the same dimensions in dark blue. SME contribute a much larger portion of the gross profit compared to their share in volumes, and commodity, the opposite. What you can also notice is the increase of share from SME and Apex contribution over the last two years compared to 2019, from 58% GP contribution to 61%. Most notable, of course, is the development in absolute terms as gross profit per TU. While, of course, CHF 793 per TOI represents the high point in the pandemic years, the look-through from 2019 to 2023 better represents the organic efforts to shift the portfolio and the product mix. There's more to come. It's a first step in it, so we're confident that this is one important element to achieve the financial ambitions in Roadmap 2026. Moving on, and I think I can keep this short as you're already familiar with the information, in air logistics, we can report man-hour savings resulting at a positive conversion rate impact of around 300 bps representing a value of CHF 2.75 operating costs per 100 kilos. And same, moving on swiftly towards the customer portfolio development in air logistics, we have chosen the categories perishables, Apex, and all dry cargo, which includes all types of customers. I think you can digest that information on that slide yourself, but we do focus very clearly on yield improvements with all customer categories. With these comments, I would like to end the presentation with our key takeaway slide: challenging fourth quarter 2023 in various dimensions. I think Stefan has pointed out a stable but still uncertain volume development going forward. We do intensify our cost measures, focus on active yield and portfolio management, and we are diligently working and hardworking, confirming our focus on the Roadmap 2026 initiatives. In closing, volume trends showed some improvement in the Q4 amid challenging market conditions. Nonetheless, market demand and yields remained subdued. In this environment, we remain relentlessly focused on cost management, and this is evidenced most recently by measures taken in the fourth quarter to further reduce costs. These actions will yield incremental benefits ramping up from Q1 going forward. With this, I would conclude our presentation section for the full year result 2023 of the Kuehne+Nagel Group and hand back to the operator, Sandra, for the Q&A session. Thank you. 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 touchscreen 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 hands as well as asking a question. In the interest of time, please limit yourself to two questions only. Anyone with a question may press star and one at this time. The first question comes from Alex Irving from Bernstein. Please go ahead. Hi. Good afternoon. Two from me, please. First of all, noting this is the one-year anniversary of your Capital Markets Day from 2023, in which you laid out a target for over CHF 3 billion of EBIT in 2026. How confident are you in that target one year on, and what are the main moving pieces to get there from today? My second question is on the cost restructuring. So you mentioned recurring cost savings at least double the Q4 restructuring costs. Should we therefore expect your unit operating costs to stabilize below CHF 300 in sea, CHF 600 in air? And if so, what would be a sensible range to have in mind, please? Thank you. Hi, Alex. Hope you're doing well. So, Capital Markets Day, I think just for one simple clarification, I think we didn't mention the full absolute amount of the earnings before tax ambitions, but of course, some models have resulted in that corridor that you have mentioned. I think what is clear is we have been putting out in the Capital Markets Day a couple of KPIs that we want to achieve in terms of conversion rates for sea and air freight and the quality of the P&L that is going to shift from a, let's say, 16% conversion rate for the whole group into a 20%-25% conversion rate for the whole group. I think these are the cornerstones that we have been talking about clearly, and there is full evidence for that in the set of numbers. The total volume development that we have anticipated has not materialized until today. So I think what we can confidently say is we go into the right direction to achieve the qualitative KPI sections in terms of conversion rates for the business units and for the overall group. We may not achieve the overall volume of this business as we laid it out on the Capital Markets Day. Stefan speaking. Hi, Alex. Hope you're doing well. I take the second one from a cost perspective. Yes, you're right in assuming that the costs will come to the level you have just described. The aim is in sea freight to reduce it to a max of 280, right? And further cost measures are underway. So this is definitely supporting then the production cost in terms of cost per file is concerned and similar in air freight as mentioned by yourself. Thank you. The next question comes from Jason Seidl from TD Cowen. Please go ahead. Thank you, Markus, Stefan. Good morning, gentlemen. Two from me here. One, you mentioned in your comments that you're expecting to see some impact from the Red Sea here in Q1. I was wondering if you can give a little more color on the impacts we should expect. And then you made a comment that as of now, in terms of yield, you're not sure what the long-term impacts are going to be. How long do you think sort of the dislocation has to go on before we see a longer-term impact for yield? And I guess my second question, what sort of impacts do you expect from your customers and sort of a shift on ocean when you're looking at North America between the East Coast and the West Coast and what's going on at the Panama Canal? So I take the first one, Jason. Thank you very much. It was on the impact from Red Sea. As we said, there was no impact recorded in the fourth quarter, and that is pretty clear because we invoice customers at the place of destination, and the earliest time possible where we send out the new invoices is March 2024. So what will happen is, as of the second quarter, we expect an impact, and we made a statement it's in the double-digit low million EBIT range. The second question was, how long is that going to take? That is the silver bullet question. We don't know. We have seen that the first carrier basically has started to try again to go via Suez, but there is no evidence on any change or pattern change. I would personally expect that this is an ongoing situation for most probably the third quarter and maybe until end of the year. So there is no significant shift to be expected on short-term basis. This is what we see currently, but that is something which is really depending a little bit on the geopolitical tension and situation. And your second question and your second question on the Panama side, I think Panama Canal, I mean, as of yet, has had very limited impact on the container shipping. There are some movements of cargo from East Coast to West Coast, but it's quite moderate on that side, and I would say it's not material. On the maybe a subsequent question could be, is there any impact on the air side? There is zero impact on the air side. So it's quite moderate, I have to say. Appreciate the time as always, gentlemen. Thanks, Jason. The next question comes from Muneeba Kayani from Bank of America. Please go ahead. Good afternoon. Thanks for taking my questions. So firstly, just going back to your comments on yields, I believe you said that they kind of are stable in Q1 so far compared to the Q4 levels. How are you thinking about yields for the rest of the year just directionally? Because one of your peers said that they expect yields to be at or slightly below Q4 levels in the course of 2024. So do you have a similar view to that? And then secondly, just an M&A. So you've announced another small acquisition today, but just want to revisit your thoughts on kind of bigger M&A now that the DB Schenker process is very much underway, and if you could clarify if you're at all involved in that at this point. Thank you. And Muneeba, so I take the yield question first. How do we see the yields? So from a sea freight perspective, there is a clear expectation, and we see that, and I mentioned that a couple of minutes ago, that yields have been stabilizing, and we expect slightly better yields as of Q1 and then some tailwinds from the Red Sea in Q2. So we should not expect lower yields than what we have seen in the fourth quarter this year in sea freight paired with you didn't mention that, but paired I will do so, paired with moderate volume growth, right? We see some upticks already. And on air freight, we will definitely focus on a higher yield versus Q4. How will that look for the entire year? Difficult to be seen, right, due to the entire volatility and the geopolitical tensions, but at least on a short-term basis for the first and the second, we see some evidence that the yields are going up. M&A, Markus is going to take this one. M&A, Muneeba, I think you mentioned we made a small acquisition. I think for us, it's important to remind ourselves is M&A for us, we are generally an organic growth company. M&A, we use on a selective basis where special knowledge, know-how, or markets where we need to get a foot into the market, then we use M&A. And we will continue to do that. This is the way how we do that, but organic growth is our predominant focus. And hence, you know what our M&A strategy looks like. We look for these specialist companies. Size is not the real driver for that. It's knowledge and management capacity. And we will continue to do this. If there is a niche or some special knowledge in the area of e-commerce or healthcare or anything like that, we will be there and looking at it. The next question comes from Sam Bland from JPMorgan. Please go ahead. Oh, thanks. Thanks for taking the question. Two, please. The first one is on these pie charts on slide 15 with the sea sort of volume split. I guess if I look at SME, I think you said it's gone from 58 to, let's say, 61 between 2019 and 2023 if we include Apex. Then the unit margin has gone from, I don't know, 320 to, let's say, 425 or something. So it's quite a big change in unit margin for what looks like a fairly small change in mix. What are the other big sort of components of the higher yield? And then the second question is you said sort of with the 2026 targets, the volume might not be as strong as you initially thought. I appreciate we've just had this sort of destocking cycle, but wouldn't you now maybe think the volume would rebound as you end that destocking? I'm trying to see what sort of causes the permanently lower volume versus what you thought at the Capital Markets Day. Thank you. Hey, Sam. So thank you for the question on that newly introduced slide, and you're spot on two answers to this, I think. When you look at how SME section growth, how that works in reality is, and I'll make a very bold and maybe oversimplifying example, but when we get a large customer on board, we probably talk 15,000 TEUs with one contract and an SME customer, 250, 500, 750 TEUs per annum. So there's a lot more you need to do to even keeping up with the volume development or growth to keep the share the same, right? So there's a lot of work behind that. So shifting, even for a small what looks like a small percentage from 58% - 61% or 62%, it looks like a small%. It's still hard work to move that wheel into that direction. So I think that is the first message. The second one, you're absolutely right. It's not the only reason why average GP on TEU has increased. There are multiple other factors to that. Some of it, obviously, is given from the market conditions that are sometimes a bit more important for the SME customer than for the large customers. Respectively, we have developments in terms of how much service we provide to these customers. So there is a mix to that, very clear. But I think one of the major drivers remains the overall shift. Even again, if it looks like a small shift, it has quite a significant impact. The second question, Sam, was on the volumes and the rebound, and that is a very good question, but not absolutely easy to answer. So what we see is there is definitely an upswing in the marketplace. We have seen it, as mentioned, in the last 2 months of the fourth quarter, in particular in December, and now as well moving into January and February is quite positive. Is that a trend which will materialize over the next couple of quarters? I would answer 2024, certain volume impact on a positive note, more for sea than rather than for air, but a normal growth should happen again then in 2025 when the market recovers in full. Maybe let me take this opportunity. We are mainly focusing on organic growth, as we all know, as you know, guys. That's the reason why we focus pretty much on the key account and the SME customers and organic growth. That's the reason why we believe we have done, from a volume perspective, rather well in the last couple of months and weeks and as well what we see currently in order to prepare as soon as the market is bouncing back. Hope that helps. Understood. Thank you. The next question comes from Alexia Dogani from Barclays. Please go ahead. Yes. Thank you for taking my questions. I also had two. Just firstly, on the timing of the just over CHF 100 million of annualized cost savings, should it be H1 loaded or H2 loaded or evenly spread? If you can give us a bit of an indication there, that would be great. And can you discuss exactly what kind of you talked about the 1,300 reductions, 40% already implemented. Would we need to see another program announced to see more restructuring charges taken in Q1? Where have you exactly reduced these positions? Thank you. Sure, Alexia. Let me talk about the timing of the cost saving and when are we going to see them. I would believe that we talk CHF 100 million annualized cost, and I would think that in 2024, we would probably see 50%-60% of that being fully materialized. We have done our actions. We have taken whatever we could into the cost base of 2023, but obviously, it usually takes at least a quarter in terms of termination cost, termination duration, and so on until you see the full effect of it. You see something already today, but the full effect will come in the next quarters. Let me add, Alexia, so what are we going to do in addition? So we have implemented a complete hiring freeze a couple of weeks ago, so new hires to be foreseen, only very critical replacements on customer-facing and customer-critical roles. So we will further reduce our workforce by leveraging the normal attrition rate. And then we have started, at the back end of last year, a new approach in terms of how do we manage our indirect procurement where we believe, over the course of the year, we can add as well quite a nice additional profit coming in from this initiative. Thank you. The next question comes from Robert Joynson from BNP Paribas. Please go ahead. Good afternoon, Steph and Markus. Two questions from me, please. First of all, on the sea freight volume, even including some contribution from Apex, volume during Q4 was 7% below the final quarter of 2019 before the pandemic, which compares with market volumes which are actually up by roughly the same amount. So it's quite a disconnect. And of course, Kuehne+Nagel isn't unusual in that respect. Each of your listed peers has underperformed the market as well. So could you just talk through what you attribute those market share losses to? Is it that the forwarders' share of the market in general has declined? Is it that the large forwarders have lost share to the small forwarders? Is it mixed, or maybe is it something different? Then the second question on the outlook for EBIT, if we just leave aside the various moving parts across the divisions and just focus on the group, on an adjusted basis, EBIT has now declined sequentially during each of the past eight quarters. When do you see that downward trend stopping? Do you think Q4 will be the trough, or could that trend of sequential decline potentially continue? Thank you. Hi, Rob. So it's Markus. So let me answer the question on the sea freight volume first. And my understanding is tying back to the fourth quarter 2019, right? And I think there are two reasons for that. First of all, I believe there might be market shrinking/stagnation when I compare 2019 to 2023, but that, of course, is uncharted territory. I've not been prepared for that comparison. So that's a gut feeling. What I can certainly answer is we have walked away from commodities. There is a very clear shift from commodities towards our SME portfolio. If that exactly comes up to the -7%, to be fair, I would not be able to answer it from the top of my head. EBIT per TEU or EBIT per unit, good question. I think with the cost measures that we have initiated and continue to expand, as Stefan has mentioned before, we would like to believe that we have compensated the pressure on the margin so that we can hold that EBIT per TEU at a stable level. Certainly, when we continue our cost adjustment measures, there will be, again, one-offs for redundancies. But having said that, as long as we can clearly identify these, I think that's exactly our aim, to stabilize the EBIT at that level. We're going to be 100% successful every quarter? Don't know yet, but I think we are close to that level. Okay. Thank you. The next question comes from Gian Marco Werro from ZKB. Please go ahead. Thanks. First question from my side is on your air volumes. There, you mentioned that e-commerce was a strong driver. And I mean, based on your heritage, that you are really strong in this kind of industry. Can you also tell us if you might have closed a partnership or expanded partnerships with also Chinese e-commerce giants? And the second question is on the whole Red Sea topic again. If we just observed current dynamics of international freight rates having nearly tripled since December, I just would wonder if you could also give us a best guess what you expect as a GP per TEU being reasonable for then the second quarter, as you mentioned, where the impact will be really, really meaningful. Is it overestimated if we even think about a quarterly GP per TEU to nearly go back to CHF 500 again? Thank you. Hi, Marco. Stefan, let me take the e-commerce question on air. So we have clearly distinguished between the Kuehne+Nagel legacy and our Apex organization. So Apex is supporting this e-commerce trend much more than the Kuehne+Nagel legacy. However, the utilization roughly on our chart and overall is around 20%-25%, not more. So we are benefiting from that. But on the other side, in all honesty, we had to increase pretty much the rate level to our base customers in the fourth quarter based on the fact that the market has increased significantly in terms of the purchasing rates are concerned. So we had a double whammy, so to say, or on one hand side, a positive note on the volume coming from e-commerce, but on the other side, we had to increase the rate level for our existing customers in a rather short time frame, which was concluded in a very positive way, I have to say. We have not lost volume by doing so, and the effect should now be seen in the first quarter. And Markus, on the Red Sea and your guesstimate on the 500, if I may say, I'd say it's not entirely unrealistic for a certain period of time if this is expanding over a full quarter or just some months in between. But I think it's not out of reach, if you like, from a CHF 500 margin perspective. But the situation is, as you can imagine, vastly volatile, and we will have to see how, at the end, it really plays out. But I would say the overall impact from an annual perspective, I think, remains rather small. The next question comes from Parash Jain from HSBC. Please go ahead. Hi. Thank you for taking my questions. If I may ask two. First, maybe with respect to DB Schenker acquisition and assuming that you will not be one of them, do you see Kuehne+Nagel taking market share during perhaps a marathon phase of consolidation between whosoever the two players tried to merge with each other? And do you see that as more volume positive, but do you see that to intensify the rate competition? And second question is with respect to impact of Red Sea on your GP per unit. Do your view changes whether the Red Sea situation ends today versus end by end of this year? Longer it lasts, does it allow you to pass through and perhaps make more profit like what we have done in COVID? Thank you. I take the first one. So for customers, uncertainty and potential mergers always require to have an alternative solution, and we have seen that the last couple of years and decades, basically. So whatever is going to happen, there will be a certain customer base which is seeking for an alternative, and that automatically will help us to increase our share, right? But that comes pretty much from the uncertainty. And depending on who is going to buy this competitor, is the share of wallet with our larger customers, and do they want to split it in terms of reducing their risk position by working with one or two major players then in the marketplace? So the question is yes. It most probably, as in the past as well, when these things happened, will have a positive effect on customer gains and market share for us. And then on the Red Sea, I think I just said what is the short-term impact, I think, from a GP level. But if it continues, which we obviously all do not hope it does, but if it continues over, I think you suggested, until year-end or so, we do see and we expect that rates are going to be moderating over time. And if it really extends to that timeline, then it will become as a new normal, if you like. So I think over time, we should say the longer it takes, the more likely it is that rates are moderating, and obviously, also, GP opportunities will be moderating with that. And just to mention maybe one thing, it's a total different situation on Red Sea than it had been with COVID because, I think, you ask if there are any parallels. I mean, at the COVID time, we had really strong demand, and there was a lot of movement from sea to air. And air freight has been kind of the only opportunity to move cargo for a long period of time or for a certain period of time. And capacity was worth and everything else. So this is a total different situation. Red Sea has no spillover until today from an air freight perspective. And as I say, we expect that's going to probably normalize rather quickly. Thank you so much, and have a good day. The next question comes from Michael Foeth from Vontobel. Please go ahead. Yes. Thank you. Good afternoon, gentlemen. Two questions. The first one is just a general question in terms of implementing your strategy. In an environment where we will see probably more and more capacity in sea freight coming online with potentially pressure on freight rates, is that in any way making the implementation of your strategy towards SMEs more difficult, or does it have no impact at all if there's more capacity available? The second question, very easy, is your CApex was pretty high in 2023. What should we expect for 2024 and going forward? Michael, let me take the first one. Is the capacity and what the carriers do in terms of additional capacity, ship space, impacting our strategy? My answer is not at all. We have a clear strategy Roadmap 2026, the four cornerstones, and it's independent, basically, in terms of the product mix, what the carriers do. So even more, even more, we need to focus on SMEs where we see a higher yield impact than in the other business. So no impact on our strategy to be expected. And the second question on CApex, yes, 2023 has been slightly elevated. We had a larger project in Contract Logistics that started up and ramped up. I think we stick with our expectations for 2024 still in the range between CHF 200 million and CHF 300 million. Perfect. Thank you. The next question comes from Marc Zeck from Stifel. Please go ahead. Yep. Thank you for squeezing me in here. Two questions, if I may. One on the pie charts on the sea freight. And I believe the Apex volumes, while classified as SME, they are rather low-yielding volumes, more akin to commodity volumes. So while you say that SME volumes have increased as a share, would it be fair to say that the share of low-yielding volumes is rather higher now than in 2019? And the second question would be on the 2026 outlook. I guess you're right. You didn't give us back then an EBIT figure, but you said what was it? 17%-19% EBIT CAGR 2019-2026. Given what you said about the volumes, would you still stick to that 17%-19% EBIT CAGR corridor, or would you adjust that to some extent? Thank you. Sure, Mark. So thank you again for the question. The pie charts, because I liked them as well, you're entirely right. Apex has by nature, by their customer base, they are SME customers on the sea freight side, but yes, they have a lower yield than, let's say, a European, US, KN customer on the SME side. Having said that, but it's still on the SME customer section, and it has the ability, of course, for expansion of services with these customers. Our calculation, but maybe Chris can help you after the call with that as well or can review that. Our calculation would not end up in a lower yield together, so in a lower yield for the combined volume of Apex and KN than in 2019. So maybe we can sort it out, or you can sort it out with Chris going afterwards. The outlook question, 2026, clearly, we have indicated the 17%-19% CAGR rate. I think, as I mentioned before, we will remain on the qualitative targets. I think the 17%-19% CAGR rate is, with the current market environment and the volumes that the market offers to us, not realistic. We will have to see, and maybe we give an update to that later on this year, how far we can get with the growth rate to it. Again, our focus is on the conversion rate, and I think I made a mistake. I was notified by that. I said the group conversion rate target was 20%-25%. Of course, what we communicated and what we are still pursuing is 25%-30%. So apologies if that came into your notes beforehand. It's 25%-30%. Thank you very much. The next question comes from Sebastian Vogel from UBS. Please go ahead. Good afternoon. I have two questions. The first one would be on the restructuring cost. You mentioned that there will be some ongoing initiatives also in 2024. Does that also mean we could think about something around CHF 50 million also impacting you on the one-off side in 2024 on the back of that one? And the second question would be on Apex. Can you remind me there, if I'm not mistaken, you had something like a CHF 30 million-35 million of tailwind in that context? What was there behind, and was it all allocated to air, or was there something also on the sea side? So Sebastian, I take the first one. Yes, there is a clear yes. Not yet decided, but you could potentially expect there's another one-off for cost measures coming. And as soon as we have decided, we will let you know. And on the Apex side, well spotted. Congratulations, I think, clearly. But it's course of business, right? You know that we have some different considerations for the Apex management shareholding, and it's depending on performance. So if the performance is not reaching the levels of full valuation, then that gives us a benefit. Personally, I would like to or I would prefer that the performance always overachieves the target, and we don't have that benefit. But in 2023, it was the case that the performance remained under the threshold or under a certain threshold, let me put it that way. And from an accounting perspective, we had to adjust it. And that all went into air? Exactly. Many thanks, then. The next question comes from Andy Chu from Deutsche Bank. Please go ahead. Good afternoon, Stefan and Markus. Hope you're both well. Two questions, please. The first one is just on the sort of 2024 as a whole. Your own company consensus is sitting at CHF 1.79 billion. I know you don't have a sort of quantitative guidance, but could you just maybe make some comments on your sort of view on 2024, maybe some of the building blocks? Already in the call, you've mentioned that you think that quarterly EBIT is kind of there or thereabouts, maybe in terms of a floor, but maybe sort of wrapping up sort of bonus payments, the one-off costs that could or charges still to come. And then secondly, around inventory. I was a bit surprised to hear that you talked about an upswing in the marketplace in December, January, and February. It feels to me like the year-on-year is looking okay in the industry because of sort of weaker comp effects rather than an upswing. So just wondered if you can maybe make a comment on when you potentially see maybe a larger upswing. March is probably a pretty important quarter, the first important quarter for the year. I know it's just the 1st of March today, but I don't know whether you have any sort of visibility in terms of a potential view on either near-term restocking or to push you for a guess on restocking. Is it a feature for 2024, or actually, is it a feature, you think, for 2025? Thanks very much. Hi, Andy. I take the first one. From operational perspective, so a consensus question, right? So how do we come to from our point of view, how do we come to the full 2024 figure and expectation? We look at the operational performance, excluding the one-off Q4 times 4, plus the savings, which we have started, and the additional savings which we are going to implement into the business. And we are somehow confident that the consensus, to a certain degree, can be reached. Right. And on the inventory, yeah, I mean, I think, Andy, you mentioned it yourself, a bit of a guessworking. I think there are so many moving parts here. And without mentioning it too often, but also, impact around the Red Sea with extended supply chains do change the inflow into inventory differently than it had probably been planned beforehand. And I entirely agree with you. March is going to be most likely the first indication, if anything has changed structurally in this or if anything has changed in terms of restocking or not. We do expect sequential improvement of volumes. That's clear. But I don't see us, I don't see the market going into a fast restocking and ramping up and filling up quickly. It's going to be step by step. Even more important, our strategy to maintain and keep customer volumes because, at the moment, there is whichever magnitude of restocking, we are going to participate on that and benefit from that on a much larger customer base. So I think looking forward to that, but it's very difficult to say what's the magnitude of it. Right. That's all. Thank you very much. The next question comes from Sathish Sivakumar from Citi. Please go ahead. Yeah. Thank you. I got two questions here. So first one, that SME volume market share, your exposure, right, has gone up. And could you just clarify which region where you are seeing this momentum? I appreciate last year, you were investing in North America, into, say, North Asia, actually. So any color around that? And also, if you just take that market share and given your volume growth that you have seen, does it mean that you've actually seen some pressure in your top account customers in terms of volumes, underperformance there, and if so, which actually vertical as such, where you're seeing that pressure? And the second is actually around the restructuring. And obviously, you are investing in SME, and that would come with more investments in the sales force. In terms of restructuring, where we are actually seeing this restructuring across the organization in terms of workforce, is it more back office driven by, say, productivity gains that you are making? Or even actually at the sales force, in some regions, you are seeing pressure on volumes that has actually impacted restructuring as there? Yeah. Thank you. Yeah. Let me take Sathish, let me take the first two. Where have we seen the SME volume growth? And this is particularly in two regions, Asia, Europe, Asia, North America, less Europe, Asia, for good reason so. So on the power lanes, we see the largest growth in terms of market share and development in terms of SME growth is concerned. The second question is pressure from top customers and volume development on top customers or larger ones, the blue chips. There is almost no vertical which has grown in 2023 apart from aerospace and this sector, because but aerospace was suffering the most during the pandemic, 2021 and 2022, for good reason so. So it's particularly the consumer brands, the large consumer brands, where you have seen that the end cost of demand had an immediate impact on their volumes. This is easing up a little bit, but you see that across the mode. Almost all verticals have seen a decline, and there is only one sector, as I mentioned, which has seen an increase in volumes, and that was aerospace. And Sathish, on the restructuring, I think the simple answer is it's absolutely across the board. It's operational workforce we talk about. It is managerial workforce, and a good third, I would call it third, so 30%-40%, somewhere in that range, on the back office, including some sales force, of course, that is more on the side of the low-performing part rather than structural changes. But I would call it maybe a 60/40 share between back office sales and operational workforce and operational management. Okay. Got it. Can I just have a quick follow-up on that top account customers where you said the volumes have been down across the board? Does that mean that, say, your wallet share exposure to them has actually come down versus 2019, or is it just year-on-year you're seeing some drop in wallet share? No, Sathish, I think we talk about a general downtrading rather than losing the share of wallet with customers. Again, other than some of the commodity customers, I would call, but other than these ones, we I don't want to say we haven't lost any customers. We did, but it's not to an extent that it would be noticeable in that context. So it's really a contraction of the volumes. As Stefan mentioned, there's really only two areas that are growing. That's aerospace and healthcare, and that's it. Everything else, we don't lose market share. We don't lose share of wallet. And it's really the overall market. Okay. Got it. Thanks, Markus. Yeah. Thank you. The last question for today's call comes from Nikolas Mauder from Kepler Cheuvreux. Please go ahead. Hi. Good afternoon. Two questions, please. First one, during the prepared remarks, I heard that customs brokerage demand is driven by nearshoring. That probably means that production is not moving into a customs union but rather spreads across Asia and other countries. How much longer can this trend run, and how would this customs brokerage business be impacted if the U.S. elected a president later in the year that is fond of raising tariffs? And secondly, if I read the slide 17 on the air logistics split correctly, Apex now looks more similar to KN Legacy in terms of yields. Is this the normal level, or should Apex be structurally higher than KN Legacy? Thank you very much. Nikolas, I take the first one, the customs brokerage. And when I was mentioning customs brokerage, nearshoring, Farrow. So Farrow is a company in the North American marketplace, active at two borders, the north border between U.S. and Canada and the south border between Mexico and the U.S. And when I was talking about nearshoring, it's everything what you see now coming in from the Biden administration, trying to basically leverage Mexico more as the workbench than some of the Asian countries. That's the reason why we believe, in particular in the North American market, this acquisition makes more than sense in order to leverage the growth which is expected from the nearshoring initiative and on the trade lane growth between Mexico, U.S., and vice versa. Nikolas. Okay. Thank you. Nikolas, on Apex, the answer is it's neither structurally higher or lower. It's more volatile than the KN Legacy operational business. The KN Legacy business is a relatively stable business that has certain elements, how to improve yield management, and how that works. Apex, you remember, we were particularly attracted by their way of getting access to capacity and selling capacity. So when the markets are tight, they are going to be structurally at that moment, if that exists. But they will be at that moment, they will be more profitable than the KN Legacy business. On the other hand, if there is overcapacity in the market, they might be a bit more vulnerable than the KN Legacy business. So that's really how the Apex business model works. Okay. Understood. Thank you. Gentlemen, that was the last question. I give the call back over to you for closing comments. Thank you very much for your questions, for listening in, and wish you a remaining good day and talk to you soon. Ladies and gentlemen, the conference is now over. Thank you for choosing ChorusCall, and thank you for participating in the conference. You may now disconnect your lines.