Ladies and gentlemen, welcome to the half-year 2024 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 2 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, and good afternoon and welcome to the presentation of Kuehne+Nagel's half year 2024 financial results. I'm CEO Stefan Paul, and I'm once again joined by our CFO, Markus Blanka, sitting next to me. Let's go into the half year 2024 figures, page number 2. Focusing on the most recent quarter, the Kuehne+Nagel Group achieved a Q2 EBIT result of CHF 402 million, which fulfilled our expectations to improve on the Q1 result of CHF 376 million. The Q EBIT result was CHF 419 million, excluding non-recurring costs associated with the streamlining of our organizational structure, which we announced in early April and concluded in the quarter. Driving this positive result was a meaningful seasonal volume uplift in Q2 versus Q1, combined with our ongoing focus on yield management. Unit cost improvement in core sea logistics and air logistics operations also contributed to the stronger result. Underlying operating costs were relatively stable, with accumulating cost savings from the measures taken in Q4, offset by inflationary effects. With respect to cost savings and inflation, we currently estimate a net positive annualized EBIT effect of up to CHF 100 million once cost savings are fully realized by the end of this year, early 2025. Free cash conversion in our business is seasonally lower in the first half than in the second, with Q2 typically stronger than Q1. This was also the pattern in Q in the first half, 2024. However, we experienced expanded net working capital over the entire period from the sharp rise of sea freight rates and stronger trade volumes from Q1- Q2. Markus will expand upon these points in a few minutes. Lastly, we expect stronger group profits in the second half relative to the first. Several factors give us this confidence. First, our visibility into stronger sea freight yields, at least to the end of Q3, alongside modest volume development. And second, an expectation for an air freight peak season in Q4. And finally, our ongoing yield and cost management efforts. Let's do a deep dive into sea freight, page number 3. On the left, as always, volume in TEU, GP per TEU in Swiss francs, and EBIT per TEU. Sea Logistics achieved EBIT of CHF 200 million in Q2, or CHF 206 million, excluding restructuring costs. This compares to CHF 295 million last year and 107 in Q1, 2024. The sequential EBIT development reflected a gross profit increase of 2%, with volumes +9 and yields -7, along with roughly flat underlying operating costs. The volume uplift from Q1- Q2 reflects normal seasonality, as well as the pull forward of some peak season demand. However, this strength is not reflected in our year-on-year volume development of -1% in Q2 or underlying +2%, which excludes the low-yielding commodity volumes we stopped serving only in Q4 of last year, against an estimated market growth of 3%-5%. Turning to costs, recurring OpEx was roughly flat year-on-year at CHF 308 million, or 6% lower than a year ago. This translated into unit cost reduction of 8% quarter-on-quarter and 5% year-on-year. Lastly, gross profit and EBIT in Q2 did not include any material effects of Red Sea disruption compared to the roughly CHF 10 million recorded in Q1. However, we do expect the ongoing disruption in the East-West trades to drive a sizable yield increase in Q3, which may extend further into Q4. This is one of the factors underpinning our expectation of stronger group profitability in the second half of this year. Next is air logistics on page four, tons GP per 100 and then EBIT per 100, always in Swiss francs. Our air logistics delivered EBIT of CHF 160 million in Q2, or CHF 122 million, excluding restructuring costs. This compares to CHF 139 million last year and CHF 94 million in Q1, 2024. The sequential EBIT development reflected a solid +10% gross profit increase, with volumes +5% and yields +4%, partially offset by an increase of underlying operational costs. The volume uplift from Q1 to Q2 was centered in Apex, fully participating in the e-commerce market boom. There was no apparent spillover from the sea freight market due to Red Sea disruption. Air logistics volume grew 7% year-on-year in Q2, with organic volume growth of 5% year-on-year, and in line with our market growth estimate. Recurring operating expenses ticked up 3% in Q2 versus Q1 due to inflationary pressure, as the bulk of annual wage increases takes effect every April. This speaks to a modestly slower accumulation of cost measures, savings relative to what we have seen in sea logistics. Underlying costs were at CHF 308, and slightly lower than last year. Even so, volume growth resulted in unit cost reduction of 2% Q/Q, and 6% year-on-year. Looking ahead, we are well-positioned to capitalize on any further market recovery, and are cautiously optimistic that the second half will include a noticeable airfreight peak season. Next is Road Logistics, page 5 of the presentation. Our Road Logistics business unit had an EBIT in Q4 of CHF 36 million, or CHF 39 million, excluding restructuring costs. This compares to CHF 41 million last year and CHF 30 million in Q1 2024. Shipment volumes returned to growth in Q2, up 6% year-on-year versus favorable costs. This compares to flat growth in Q1 on a day count adjusted basis. We believe our volume growth broadly mirrored the market in Q2. However, GP growth, excluding currency effects of 4% year-on-year, did not match this pace, implying some price mixed pressure. This speaks to soft demand in our core European and North American markets. Looking ahead, please keep in mind that Q3 is the seasonally weakest quarter for Road because of the phasing of summer holidays in Europe. Lastly, please note that our already announced acquisition of Malaysia-based City Zone Express is now expected to close in Q3, slightly later than originally anticipated, due to delay in regulatory approval. City Zone Express will strengthen Kuehne+Nagel's cross-border road services in Malaysia, Vietnam, and Thailand. Contract Logistics, page six. Contract Logistics generated another solid EBIT result of CHF 50 million in Q2, or CHF 52 million, excluding restructuring costs. This compares to 48 million a year ago and 55 million in Q1. Cross profit growth, excluding currency effects, accelerated to 8% year-on-year in Q2. This reflects, in part, the ramp-up of the major adidas distribution facility in Italy, which serves exclusively the distribution and e-commerce need of Southern Europe. Please note that this adidas project is expected to reach the planned full run rate contribution by Q1, 2025. Market share expanded once again in key healthcare and e-commerce segments, as mentioned a couple of times already, categories which continue to dominate our sales pipeline. Lastly, the conversion rate of 6% in Q2 was stable on a year-over-year basis. Before turning it over to Markus, page 7, let's review some key developments over the past quarter with respect to our Roadmap 2026 strategy. In Q2, we made further progress in establishing a key pillar of our Sea Logistics SME strategy with the additional rollout of new customer care locations. These sites play a key role in enhancing service quality with the aim of reducing our churn rate in this key customer segment. Turning to market potential, the quarter saw the launch of three major e-commerce fulfillment centers across three continents, including the adidas facility in northern Italy that I just mentioned. We also initiated a new offering, facilitating the faster turnaround of temperature-controlled sea freight containers for healthcare customers. On the technology front, we improved our ability to exploit our data and continued to identify a test GenAI use case or use cases. Lastly, I'd like to emphasize the importance of our recent organizational streamlining and the relevance of this move to our roadmap efforts. We now have a direct line from management to our country organizations, with positive implications for the service quality, responsiveness, as well as efficiency. With this, I 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 half year 2024 results. As Stefan has outlined, we continue to see an environment of demand for global logistics services that is slowly improving. In such periods of continuous potential volatility, we usually focus on our highly flexible asset-light business model. Our current priority is on cost control, with the termination of the regional structure in the second quarter, 2024, to ensure a further reduction of cost. This reflects both a reduction of absolute cost and per unit cost, with expected stable to increasing sequential volumes in sea and air freight. Let's start with the income statement. Q2 has been sequentially stronger than Q1, 2024, even more so when considering restructuring cost of CHF 17 million in the second quarter. We expect a further improvement on our performance on conversion rate, based on the EBIT level of CHF 402 million, and the underlying business performance of EBIT, CHF 419 million. While the P&L remained below the same period of the first six months in 2023, we recall that the first half year, 2023, still enjoyed some positive effects from 2022. Looking at the quarter sequentially, again, we can see a solid operational conversion rate improving of 18% or 19%, excluding the restructuring cost, supported by active resource management. The combined sea and air freight conversion rate was 34% in the second quarter. For reference, the full year of 2019, sea and air freight conversion rate was 28%. Headwinds from currency had a negative impact of around 3%, which translates into CHF 121 million at gross profit level and around 2% negatively, or CHF 24 million on earnings before tax. Working capital, page 10, was on the top and remains on the top of our agenda, is increased due to significant rise of sea freight rates, triggered from the ongoing disruption in Red Sea. From here on, I anticipate stable net working capital for the next quarters to come. DSO have expanded against the end of the last year and also slightly against the same period last year. DPO, on the other hand, have decreased, which reduced the spread between DSO and DPO to now 9 days. Net working capital intensity increased by the close of June, with a result of 4% versus a record low of 2.8% for 2023, but improved margin from March 2024. The absolute level is thus almost CHF 300 million greater than it was a year ago. I will come back to that fact in a minute. Continuing with cash and free cash flow generation. As mentioned, the pressure on net working capital arising from the continuous rise in sea freight rates during the second quarter is also evident in the Q2 free cash flow result. In absolute terms, we are satisfied with the net working capital, as it has increased only a little over the value from the first quarter 2024. Expanding on the free cash flow generation, the Q2 result reflected free cash flow conversion of approximately 38%, relative always to net income before minority. This compares to an average of nearly 70% for second quarters in the decade prior to the pandemic. Relative to other quarters, just for your own reference, Q2 is historically the second weakest quarter after Q1. Q3 is the strongest, followed by Q4, with average historical conversion rates of about 140%. While the Q2 performance marks an improvement on Q1, the largest single driver of the gap versus the historic average is the expansion of our core net working capital, accounting for about 40% of the difference. That is directly linked to the further escalation of sea freight rates in the second quarter, due to the ongoing Red Sea disruption, as I mentioned before. Let's focus on efficiency. In air freight, on the eTouch update, we see a positive conversion rate of 340 base points, which represents a value of approximately 3%. Whereas on the sea freight side- ... we see an improvement of 120 base points on the end of June 2024. Just to remind ourselves how we derive these numbers, obviously, we look at man-hour savings. They do continue to accelerate, as you can compare probably to our last disclosures, for the full year 2023. So Sea Freight has improved from 100 base points at the year-end to 120, and as mentioned before, on the Air Freight side, from 300- 340. In closing, key takeaways: volume trends showed some improvement in Q2 amid challenging market conditions in Sea Freight, growth in line with the market in Air Freight, and margin improvements for both network businesses. In this environment, we remain focused on cost management, and this is evidenced most recently by additional measures taken in the second quarter to further reduce cost. All of these actions will yield incremental benefits. Thank you, everyone, and I will now hand over to Sandra for the Q&A session. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. In the interest of time, please limit yourself to two questions only. The first question comes from Alex Irving from Bernstein. Please go ahead. Hi. Good afternoon, gentlemen. Hope you're well. Two from me, please. First of all, how are you thinking about the third quarter for gross profit per TEU, right between poor congestion, strike threats, and equipment shortages? I understand your logic on the yields being sequentially higher, but how significant could that uplift be, please? Second is on your impressive cost performance across both sea and air, right? Unit cost in both is below your implied medium-term target levels. What drives that from here? Where do they go, and should we be thinking about possible upside to your medium-term conversion ratio targets as a result? Thank you. Hi, Alex, Stefan speaking. Yeah, we are well. Summer is now in town here as well. So the first question on the margin development for the third quarter, right? The silver bullet question. So what we see and what we believe is it will be significantly above the 500 range. Where exactly is too early to judge, 'cause, you know, we only invoice after incoming containers in Europe and in the U.S. We have achieved a pretty good utilization with our customers, especially the large ones, despite of the SME customer base, on agreement a couple of weeks ago, already on the new rate. So to sum it up, it will be significant above the 500 range, but where exactly is too early to judge. Yeah, Alex, hi, it's Markus. On the other side, yes, we are happy that unit cost developing to the right direction. I think unit cost go hand in hand with efficiency gains on the one side. On the other side, you know, we are changing our customer portfolio towards more small, medium enterprise business that usually requires a bit of higher service intensity. So by continuing doing that, I think we will see that unit costs will further improve. But at the same time, there is a clear focus on managing 200 CHF EBIT per TEU, rather than merely bringing down the cost per TEU on one side. It's really hand-in-hand with the change of the customer portfolio to higher-yielding business and focusing on CHF 200 EBIT per TEU. Excellent. Thank you. The next question comes from Muneeba Kayani, from Bank of America. Please go ahead. Thank you. So, I just wanted to ask a little bit more about your second half outlook and specifically on the air freight peak season that you talked about. Can you just give a bit more color on how you're thinking about the volume and yield developing and whether that 83 that we saw in Q2 can be maintained or even higher into the second half? And then just on the sea side, I think you said in your prepared remarks that there was some element of demand pull forward. Kind of how much of the volume benefit was the element of our earlier peak season, and how does that then impact your thinking into the second half of the year? Thank you. Hi, Muneeba, Stefan. Take the first question, the peak season in air. So the planning is we have ended the quarter with 83%, and we believe the margin, the GP gross profit margin, will go up slightly in Q3 and again, even more in Q4. Volumes, that was the other question. ... are currently in the second quarter 7% up. This is going to continue into the third quarter and most probably even higher into the fourth quarter. So it's a combination of improvements in the yield, paired with more volumes anticipated for the third and even more in the fourth quarter. So that is the answer on air freight. Sea freight, you have seen we have been flattish, organically, slightly growing with our customers. Flattish in the second quarter. Looking at the current bookings, we believe that the third quarter, not yet sure on the fourth, but the third quarter will see a lower single-digit increase in volume. So the pull forward effect has no impact on our Q3 volume development in sea freight. Thank you. The next question comes from Cedar Ekblom from Morgan Stanley. Please go ahead. Thanks very much. Can you talk a little bit about why the restructuring costs came in lower than what was originally guided? Are there more costs to come, or should we assume that your cost saving program is actually smaller? I remember the original number being more like CHF 200, with your two programs combined, and I believe that the guidance you gave now is, is CHF 100. So why, why have potential cost savings come down? And then can you also just talk a little bit about how we think about the ramp-up in the contract logistics business and where margins settle with your new facilities being opened and ramped up? Thank you. Hi, there, it's Markus. Quickly to the restructuring cost. I think when we have to distinguish the two different elements that we have deployed. The first one was in the fourth quarter, 2023, which was really a right sizing of the operational workforce. And then the second action was in the second quarter, 2024, which was related to the operational setup, to the regional management structure and also operational excellence structure in the organization. And when we made the decisions to deploy these two waves, you may call them, I think we were still in a situation where we were uncertain around the business development going into the second half of 2024. We realized that, and I think that is also what Stefan mentioned before, there's an improving situation or an improving expectation for volume going forward into the second half of 2024. Hence, we held back slightly on the sales management, specifically on the sales force piece from the second quarter 2024 initiatives, to, you know, go back to our growth mode, I would call it, from the company, to benefit from the upswing in the second quarter in the second half of 2024. So well observed. I think our original thinking was really a cost reduction in a declining market environment. We have changed our view on that expectation, hence smaller cost reduction costs. So restructuring costs had also been lower, and the expectation is now to post inflation. Let's not forget that. We had mentioned the CHF 200 million pre-inflation, so now we're at the CHF 100 million post-inflation target for 2025 full year number. That's the background to your first question. I take the second one. That was the question on the ramp-up of our Mantova facility, the adidas, the South campus. Just to remember a little bit on the size, basically, right? 130,000 square meters, 700 robots, 700 people working on site. We started a couple of weeks ago with the inbound, the utilization currently, and, I've been there last week together with my, my Contract Logistics colleague, Gianfranco, and my management board members. The current utilization of the warehouse facility is roughly at 15%. We will, finalize the implementation of the entire site by the first quarter 2025. Just a, a number right. Currently, our throughput on a daily basis out of our contract logistics facility globally when it comes to the parcel volume on a daily basis is 800,000. This facility will add at another 500,000 on a daily basis, so a significant operation. We will, of course, not share any financials on a single customer, but what you could expect is further improvements in the conversion rate in Contract Logistics overall in 2025. That's helpful. Thank you so much. The next question comes from Marco Limite from Barclays. Please go ahead. Hi, good afternoon. Thanks for taking the question. The first question is a follow-up on what you have said on the outlook for air freight, where we can expect, let's say, a slight improvement in Q3 and Q4 in yields. Just wondering, yeah, if there is any specific factor driving that other than, let's say, seasonality? That's the first question. And the second question, which is a bit more qualitative. I'm wondering whether you're able to talk about, let's say, some of the benefits you have already seen from the new reporting structure. And, yeah, so some, let's say, practical example would be very helpful. Thank you. Yeah. Then I take the first. Sorry, Stefan. I take the first, the outlook on air freight. So, in the third quarter, the yield development will be maybe in the area of $0.01-$0.03, but we believe we will come closer to the $0.90 or even slightly above in the fourth quarter, and that has to do with two factors. First of all, the seasonality, the peak, which expected, and secondly, what we see already now kicking in, and that started in mid and end of June. We see significant increase in terms of demand on our sea-air products, but this is, this has been expected based on the Red Sea crisis and the sea freight situation, which is ongoing. So, air freight will benefit from that. E-commerce is still booming, right? Where Apex plays a certain role. So overall, a couple of cents in the third quarter, but then, a much higher expectation on the yield coming to the nineties, close to the nineties or even slightly above in the fourth quarter. And the second question was a benefit on the new reporting structure. I give you one example. We have now roughly 370, 380 key accounts, global accounts, and we had to renegotiate all the rates within short, right, in the second quarter. And that was executed extremely well between the business unit and the country organization. And that has given us already a proof point that this new reporting structure is working extremely well on the customer side. So ready to execute, be fast and executing what we are discussing here, vice versa in the countries, is working pretty well, I would say. Thank you. The next question comes from Sathish Sivakumar from Citi. Please go ahead. Thanks again for taking my questions. I got two questions here. So first is actually around the slide 13 and slide 14. Thanks again for sharing the data on those eTouch. Just for understanding here, why air freight, like, Air Logistics actually seen in better productivity gains, versus Sea, and what is actually driving that? And where do you see, like, further potential here in terms of, unit like, CBM this time or TEU con- for TEU contribution in Sea? Would you get that, that same RMC normalized there? And the second one is around the Apex performance, given the strength of Asian e-commerce, what is the level of visibility that you have there, for Apex? Because obviously, Apex operates more on contract spaces, agreement rather than the KM legacy, which is more on the spot market. Yeah. Any clarification on that would be helpful. Thank you. Hi, Satish, it's Markus. So to your first question, why is eTouch in air freight currently leading, if you like, from a positive impact perspective? Simple answer is we started with air freight much earlier than we did on sea freight. So they had a much earlier start point, so hence the accumulated saving is greater. Which of the two has the higher potential, I think was the second part of your question. Clearly, sea freight is a larger operation. There is still more to come, so that also in future we have sustainable positive impact from the eTouch initiatives. You may remember when we started eTouch, we had been talking about a potential upswing of around 300 base points, so 3% at that point in time, from 25% maximum, let's say, starting point of conversion rate. I think we can safely say that on the air freight side, we will continue, we will continue to improve through digitalization and streamlining of operation, and I think we should expand that to 300-500 base point range. The same for sea freight, but as I said, it will come at a later stage, but it will have a bigger lever because the operational organization is bigger on the sea freight side. Yeah. Thank you, Marcus. Let me take tackle the second question on the Apex performance. So yes, indeed, Apex is more involved in the e-commerce channel, particularly in into the two new giants. Basically, what I can tell you is two things. First of all, the Apex capacity for the third and fourth quarter is already sold to a high level of 70%. We will keep a little bit of a gap in terms of giving us the opportunity on a weekly basis to adjust the selling rates for the remainder. But, two-thirds of our volume, which we have secured, is already sold, pre-sold to the third and the fourth quarter, which is a very good indicator. And, you know, as tighter the market gets, as more successful the Apex, Apex model becomes, and you have seen it as well during the pandemic. So that's good news for us, 'cause we expect, as I said, and I'm repeating myself, we see a good peak coming towards us from a sea-air freight perspective, during the fourth quarter this year. Stefan, just a quick follow-up on that, actually. So 70% is sold, where does that compare on the yield-wise? Would you say that what you have seen in quarter two, it has come in slightly better than that? Just like any clarity on how much of those 70% is sold, at what levels? You mean on the EBIT? You said, what does that mean for the EBIT, right? No, on the GP per ton. GP per ton. Yeah. So it will be, as I said before, right, it will be higher than the second quarter. We know already it will be higher, based on the pressure we have seen from the marketplace. Just to let you know, 20% of the Apex volume is e-commerce. It's not more, right? So that gives you a little bit as well, room to maneuver on the price level. So it will be higher this as in the second. Okay, thank you. Thanks, Markus. The next question comes from Elliot Alper from TD Cowen. Please go ahead. Great, thank you. This is Elliot Alper on for Jason Seidl. So two questions, maybe you discussed some of the soft demand in core geographies within logistics, hoping you could expand on that. Maybe any end markets in particular that you're seeing weakness? And then within contract logistics, can you discuss the current customer pipeline you have? Not sure if I missed this earlier, but maybe how, how we should think about margins in the back half of the year, and if there are any upcoming startup costs to think about. Yeah, I take the road, the road one, where we see, in particular, a little bit of a softer demand from a domestic and international perspective on the large markets in Europe. Whether you take France, whether you take Germany, U.K. as well, we see less volume than anticipated. And we know that, and we all know that the domestic market in the U.S., LTL, FTL brokerage as well, the total logistics management is soft. So we see that, in the U.S., we see that in the large markets in Europe. And in Europe in particular, we have to feed a certain network, a certain cost needs to be managed, right? We cannot reduce the cost as fast, in a network business than in a brokerage business. So the only answer to it, how to overcome the challenge in terms of lower volumes, is to activate as much as you can, your field sales and your corporate global sales, management, and your people in order to bring profitable volumes in. But that is the challenge currently, as the main markets in Europe are soft. Elliot, here's Markus. For the Contract Logistics question, I think we have slightly touched on it, you know, from the project with adidas that we have there. I think we expect certainly for 2025 to show improvement over the conversion rate, not just because of that one single project, which is large, but not single because of that, but also the mix enhancement overall. We're still working on more healthcare and obviously complex solutions going forward, right? The size of the pipeline is of course very considerable. We're talking in excess of CHF 1 billion. But you're also aware that the selling process or the sales process, plus then the implementation and so on, it's a much longer process than what it is, obviously, for transactional business. Healthcare, as I mentioned, is one of the focus areas are obviously above average conversion rates, and we are looking for that segment only into a pipeline. There's probably CHF 500+ million potential. So again, we talk pipeline and potential and the areas of our main interest. Don't expect that to happen within a quarter, but I think we are very well positioned to structurally change our customer portfolio towards, again, higher yielding business with better conversion rate, also in contract logistics. Thank you, both. The next question comes from Sebastian Vogel from UBS. Please go ahead. Hello, and good afternoon. My first question relates to the Sea Logistics side. When I look there on the gross profit per unit side, it down quite a fair bit, while your revenue on a per unit basis was going down also a bit, but not so much. Can you share, can you share your thoughts on the drivers of that and, how you see that for the rest of the year? And the second question would be, about the financial results and how should we think that one, for the rest of the year. Hi, Sebastian, Stefan. Yeah, so when the rates go up, and this is what happened in the second quarter, basically, you have a little bit of a gap between your contracts with the customers, especially the larger ones, and the carriers, basically, and that is what you have seen in the second. Now, as I mentioned before, starting with the third quarter, we will benefit from the new contracts and the new rates we have agreed with our customers, and that's the reason why we are so confident on the new GP level moving into the third and into the fourth quarter. Overall, we do not give the... and share exact figures, of course, as always, but what you can definitely anticipate is that the second half will be stronger.... than the first half, and maybe Markus want to include something more fine. Significantly stronger in the second half than in the first, and the indicators and the reasons and the rationale behind, we have just shared. And Sebastian, as Markus, from the finance result, I could keep it—I mean, it's twofold the answer, right? We paid CHF 1.2 billion to shareholders, so, the cash box that had been very well filled last year, also from, 2022 results and so on, I think has, reduced, slightly. So, interest income has—is, is lower than it was obviously last year at that point in time. And secondly, we started quite, significant, lease contracts also connected to the contract logistics ramp up for, for adidas. So there is, inherent interest cost in the lease rates for that activity, which also has a negative impact. But, these are the two main drivers, less money and on the other side, there is more interest cost for the right-of-use assets/lease contracts. Got it. Many thanks. The next question comes from Gian Marco Werro from ZKB. Please, go ahead. Morning, Markus and Stefan, good afternoon. I have two questions that relate to the scenario and your base case for the international freight rate development in the second half of the year. So, I got it from the sea freight profitability that you mentioned. You see now in the second half, a significant higher profitability than in the first half. That makes sense. But you also mentioned in the beginning of your presentation that you see a significant improvement now in the third quarter, and then did I get it right, that you even said further expansion than in the fourth quarter? I know it's very early to say, but I would really wonder how you see the base case of this international freight rate then affecting profitability also in the fourth quarter. Then in relation to that, also net working capital, that's my second question. Markus, you speak about net working capital remaining stable for the rest of the year, but also here, if we expect at least some bottoming out of international freight rates and maybe some slight decline, shouldn't that significantly reduce the net working capital again? Thank you. I take the first one, Gianmarco. Thank you very much, and good that I can clarify that, right? So, what we see and what we expect is an uplift in GP per TEU margin development, moving into the third quarter, and that will continue into the fourth quarter as it looks right now, right? So I do not expect that a major change to be expected from a sea freight rate development, especially on the major lanes, Asia to Europe and Asia to the US. So it's more a continuation of the rate development in the fourth quarter coming from the third. But there is no further uptick, most probably to be expected in the fourth. So it will be higher, but flattish coming in from the third, moving into the fourth. Gian Marco, well spotted. Yes, I, I agree with you. That's the mechanic that we're looking at. If freight rates were to come down significantly, which is not our base case, again, what Stefan says, the base case for us is that the Red Sea stays closed, you know, for the next two quarters to persist, which most likely will also solidify some of the rates. And at the same time, I'm saying we should have a volume increase. So then my base case for the net working capital is I allow for a certain reduction of the freight rates, but that's gonna be offset by additional volume that we'd realize again from the markets. Of course, when the freight rates would, for whatever reason, come down very quickly, then of course, you're right, then, receivables will be immediately transferred into cash, and then obviously cash flows back. Very clear. That's also very clear. Thank you, Stefan and Markus. All the best. Thank you. Thank you. The next question comes from Andy Chu from Deutsche Bank. Please, go ahead. Afternoon, Stefan and Markus, a couple of things, please. Just in terms of the GP per TEU, is it possible to have a current sort of run rate for what you're seeing in July? And is it possible to get a little bit more help in terms of what's significantly above 500 CHF per TEU mean? Would it be possible maybe to give a range? And then secondly, in terms of sea freight, again, staying with sea freight, is it fair to conclude basically that you're not seeing really a recovery in sea freight volumes? You alluded to sort of Q3 volumes being sort of low single digit. I just wondered that actually, whether you might slip into slight negative growth year-on-year in Q4 with a slightly tougher comp. Thank you. I take the first one. As we don't give any guidance, Andy, during the year on the exact figures. But what we can see is, trading is doing well, and invoicing is doing well as well. So, if I would need to give you a range, it's definitely not CHF 550, it's definitely higher. If it's above CHF 550, I cannot tell, but it's not on the lower level of the CHF 500. It will be higher, and this is what we see already in the invoicing process now in July. More, I should not share 'cause it's too early. And I think on the sea freight volume side, clearly, we are looking at expanding our volumes. I think there is a fair assumption in our base case that we will gain volumes, single digit, yes. But if the question was if there would be additional volumes, I don't know, in excess of, I don't know, double digit or so, the answer is no. We would be in a moderate single digit volume increase, yeah. Well, thank you very much. Thank you. The next question comes from Lars Heindorff from Nordea. Please go ahead. Good afternoon. Thank you for taking my questions. It's on the volume side, particularly on the sea freight, maybe also to some extent on air. So the increase in the volume and the front loading that everybody talks about, just want to pick your brain a little bit on whether this is purely front loading, whether there is an element of restocking, and what's, I mean, kind of the feedback that you can provide from your customers, which is the reason for this volume increase? That's the first one. And then the second one, most of the question has been around the yields, still a little bit, we want to sort of get some clarification. In previous quarters, and so during the pandemic, we've seen your yields spiking up, and to some extent following the rate development. That has not been the case here in the second quarter. So what is the reason for the sequential development into the second quarter? And then again, your expectations of a fairly significant increase into the third quarter, which appears a little bit weird compared to the sort of development we've seen in previous quarters, also during the pandemic. Thanks. Hi, Lars, this is Markus. So let me talk first about this early peak, or you call it front loading, but I think we talk about the same thing. Well, I think, and I don't have any hard evidence on hand, to be frank, but I think the reason why customers have actually decided to do that is, on the, you know, on the brink of, of rates going up very quickly, at the same time, seeing that the Red Sea is, a bottleneck and creates uncertainty on the, on the supply chain. I think it was more a behavioral desire to make sure that there is cargo available or there is merchandise available for the year-end business. I don't think there is a particular, let's say, drive into restocking or anything like that. It's really more of a securitization topic. Let's not forget, we came out of a period still in May, June, where we had rollover cargo, that's where shippers have seen that cargo has not been taking on the sailing where they expected it to. So that creates uncertainty, and I think that was really the driver for that early peak season and the front loading, as you mentioned it. From that perspective, I think also the question of the rate development, you said, right? Your second question was about the rate development, why we haven't seen the higher gross profit already in the second quarter. Clearly there is a delay and you know it from an accounting perspective, when rates are being communicated and contracts are being signed with current rates, they really only take effect a couple of weeks after. And I think there is a difference when we look at the correlation, because knowing you, I think, and rightfully from an analytical perspective, you look at correlation between freight rates and gross profit. I think we during the pandemic, we had looked into a crisis, let's say, that was fueled from a demand side, and it was a global one. Currently, we look into a situation that is driven from a supply side, and it really is only a few trade lines that we're talking. It's Asia, Europe, predominantly. So I think there is a significant difference in the two drivers. For us, clearly, the higher rates profit or the higher rates, gross profit will come third quarter going forward. Maybe to add one sentence on air freight. The difference to the previous years is that the yield has increased in the second quarter versus the first, which has not happened the previous years, and that gives us additional confidence on better yield in Q3 and Q4. Okay. Thank you. Thank you. Ladies and gentlemen, that was the last question. Back over to you, gentlemen, for any closing remarks. Thank you very much. Enjoy your summer break, your vacation, and speak to you then, latest in October again. 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.