Ladies and gentlemen, welcome to the Kuehne+Nagel Management AG Q1 2026 Results Conference Call and live webcast. I am Sandra, the conference call operator. I would like to remind you that all participants have been 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 one. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to 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 first quarter 2026 financial results. I'm CEO Stefan Paul, and I'm joined today, as always, by our CFO, Markus Blanka-Graff. Page number two, first quarter 2026 results, recurring EBIT exceeded our guidance. The recurring EBIT of CHF 308 million in Q1 exceeded the guidance we communicated with Q4 results. That is a result that would broadly match the CHF 285 million we achieved in Q3. We attribute most of the upside to first signs of visible cost reduction, with phasing running ahead of plan. We had announced this cost reduction program in Q3 and booked provisions, as you all know, for it in Q4. We still expect to achieve at least CHF 200 million of annualized gross savings by year-end 2026. At the close of the first quarter, we are running ahead of plan and confident in our ability to reach our target. Our successful cost management in Q1 mitigated some of the effects of volume impacts from the conflict in the Middle East. Also, the year-over-year comparison was high, especially in Sea Logistics, where underlying volume growth last year was 6% in the first quarter. That was due in part to front-loading before Liberation Day. The net effect in Q1 was a year-over-year decline of 17% in group EBIT. Recurring group EPS declined by 18% year-over-year on the same basis, excluding consideration of negative currency effects and a one-time CHF 35 million gain on a real estate sale and leaseback transaction. The combined Sea and Air conversion rate was 26%. Free cash flow generation in Q1 exceeded that of last year, supported by disposal proceeds linked to the real estate sale. Excluding these, underlying free cash flow conversion of 40% in Q1 reflects typical seasonality as the first quarter is normally the weakest of the year. Before moving on, I would like to address the current market situation. With respect to market share, it is currently more difficult to assess our progress versus peers in Q1, given the spike in volatility set off by conflicts in the Middle East. Pending further clarity, we are assuming that recent trends continued and that our market share was stable or slightly greater in the period. In terms of expectations for near term, we expect a Q2 EBIT result greater than that of Q1 on the back of higher and sustained service intensity during a period of supply chain disruption. As such, we are modestly raising the lower end of our full-year financial guidance, a topic which Markus will cover in more detail shortly. Now let's turn to our performance by business unit. Page number three, Sea Logistics. Cost control drives recovery of unit profitability. As always, volume on the left-hand side, GP per container unit in the middle, and EBIT per TU on the right-hand side. In Sea Logistics, unit profitability recovered significantly versus the last couple of quarters, thanks to our cost reduction efforts. You can see this underlying improvement in the last two quarters in the middle and in the right-hand chart on the slide. Sequentially, the Q1 volume performance was better than the average change over the last five years. Volumes in Q1 declined by 2% year-over-year, mainly due to the events in the Middle East. This pace matched that of Q4, but with a tougher comp. Underlying volume growth last year in Q1 was +6% versus +4% in Q4 2024. Enhanced by front-loading effects ahead of Liberation Day, European import volumes from the Far East were once again robust, extending the strong trend we saw in Q4. Transpac volumes remained under pressure on a year-over-year basis. Average yields were stable sequentially for the second consecutive quarter, in line with the expectations we shared during our last earnings calls. This stability has continued thus far into the second quarter. As we mentioned at the time of Q4 results, we do not foresee a repeat of the yield pressure we saw in Q2 and Q3 2025. The Q1 EBIT improved sequentially by 7% to CHF 113 million as cost management efforts more than offset the volume decline. This resulted in a +13% increase of EBIT per TU quarter-over-quarter basis. The Sea Logistics conversion rate was at 25% in Q1. This compares to 23% in Q4 and a 35% conversion rate in Q1 last year. Let me turn now to Page 4, Air Logistics. Stable unit profitability supported by cost control and mix. In Air Logistics, strong cost control was the most prominent factor supporting stable unit EBIT during the seasonally weak first quarter. You can see this development in the third figure on the slide. Favorable mix shifts also contributed to the stability. Volumes in Q1 were flat year-over-year. This marked a deceleration from +7% growth in Q4, chiefly due to reduced perishables and Apex e-commerce volumes. Excluding these lower-yielding segments, we achieved upper single-digit volume growth. On a quarter-over-quarter basis, the volume decline exceeded the 10% seasonal decline we have averaged since APEX was acquired in 2021. Volume growth was most robust in Asia/Europe trade lanes, followed by North American exports. North American imports were relatively weak, especially from Europe. Average yields increased by 2% quarter-over-quarter, a notable improvement on the result we usually expect coming out of Q4. From Q4 to Q1, demand for higher-yielding cargo usually softens, while lower-yielding perishable volumes tend to remain stable. As I just explained, this was not the case in the most recent quarter, as the mix shift resulted in positive yield effects. EBIT rose by 7% to CHF 111 million year-over-year in Q1, excluding FX headwinds. The Air Logistics conversion rate was at 27% in Q1 versus 26% in Q1 last year. That was Air Logistics. Now, page number five, our business unit Road Logistics. EBIT growth supported by ongoing volume recovery. In Road Logistics, the signs of demand recovery we highlighted in Q4 extended into the first quarter and supported our EBIT growth. Net turnover grew by 9% year-over-year in Q1, or 5% organically, both excluding currency headwinds. This affirms our view that Q4 marked a positive inflection point for shipment demand after a sustained weaker period in the European market. Demand for custom solutions also remained robust, a consistent trend since Liberation Day in April last year. Additionally, we reinforced our services to the UAE in response to supply chain disruption from the conflict in the Middle East. EBIT rose sharply to CHF 25 million in Q1, a 42% improvement on last year, or 35% on an organic basis. Please follow me to page number six, our Contract Logistics business unit. Strong underlying profitability impacted by FX headwinds. In Contract Logistics, recurring EBIT increased modestly year-over-year, offsetting material currency headwinds. The net turnover grew by 5% year-over-year in Q1, excluding these currency effects, in line with the underlying rate of growth over the previous four quarters. We saw continued market share gains across geographies, with a particularly strong contribution from our North American business. Recurring EBIT totaled at CHF 59 million in Q1, which is 4% higher year-over-year or 11% higher excluding the currency effects. This figure excludes the CHF 35 million gain from a real estate sale and leaseback transaction. The recurring conversion rate of 6% is in line with the prior year result. With the Q1 result, the trailing 12 months ROSI for Contract Logistics alone is stable at a level of 25%, excluding the effects of exceptional items. Lastly, we are confident in the growth trajectory with more than 30 new contracts currently in the implementation phase. This overall concludes my comments on the performance of the business units, and I will now hand over, as always, to Markus. Thank you, Stefan, and good afternoon all. Thank you. Once again, for your interest in Kuehne + Nagel, and taking the time today to review our financial results for the first quarter of 2026. First, we see on our profit and loss statement a pronounced 7% foreign exchange headwind at both EBIT and net earnings level. That is because the prior year benefited from a stronger U.S. dollar ahead of Liberation Day. Second, the material cost reductions in the first quarter, which are part of our restructuring program, helped mitigate this impact of the headwinds. Third, while Sea Logistics yields stabilized over the last two quarters, the first quarter year-over-year comparison for gross profit reveals some pressures. Lastly, Stefan already mentioned a non-recurring CHF 35 million EBIT gain related to the real estate sale and leaseback transaction in Germany, a factor to consider when evaluating recurring profitability. Turning to working capital, we saw the base increase to more than CHF 1.5 billion over the past quarter. This compares to 5.2% at the close of the fourth quarter, or 5.1% at the end of the third quarter last year. You can see the spread between DSO and DPO narrowed as DSO deterioration outpaced the DPO improvement due to a temporary shift of business mix. Additionally, the share of multinational customers with extended payment terms in Contract Logistics is growing. The net CHF 129 million increase of core working capital in the first quarter 2026 was comparable to a CHF 132 million increase over the same period last year. All business units contributed to this expansion, except for Air Logistics. Let's now have a look at how this fits into overall free cash flow generation in the first quarter 2026. We produced CHF 194 million of free cash flow, bolstered by CHF 105 million of cash proceeds from the real estate sale and leaseback transaction just mentioned earlier. Excluding the proceeds, free cash flow sits at CHF 89 million, and that compares to CHF 167 million from last year in Q1, also excluding modest disposal proceeds. For a closer look at cash conversion, let me move on to the next slide. Here we see the usual comparison of free cash flow conversion in the most recent quarters versus the historical average. The first quarter is typically the weakest cash conversion quarter of the year, with an average 48% conversion. In the first quarter 2026, conversion was 40%, including some material cash flows linked to our cost reduction program. Accounting for these, we view the first quarter cash conversion as very much in line with the historic average. We expect a continuation of normal underlying free cash flow conversion trends over the coming quarters. Turning to our financial guidance for 2026, Stefan mentioned that we have raised the lower end of our 2026 recurring EBIT guidance to reflect both our current expectations and the better-than-expected Q1 result. As such, our guidance range is now CHF 1.25 billion-CHF 1.4 billion, up from the previously communicated CHF 1.2 billion-CHF 1.4 billion. For the second quarter, we expect the recurring EBIT result to exceed that of the first. This is also consistent with the historical long-term average seasonal development from Q1 to Q2, and we consider the seasonal impact of any wage increases, the bulk of which take effect in April. As a reminder, our underlying core guidance assumptions include the global GDP will grow, but with persistent uncertainty across geopolitics, macroeconomic policy, and trade. As a base case, global sea and air freight volume demand will grow no faster than GDP. As we have already highlighted, our cost reduction program remains and is on track, and we still expect more than CHF 200 million of gross savings on an annual basis. These savings will ramp up over the course of 2026, with an estimated impact of at least CHF 100 million in the current year. There is no change to the assumed 5% currency translation headwind reflected in our EBIT guidance, nor is there any change on our expectation for a 25% effective tax rate. With this, I would now like to close our presentation with a summary of our key takeaways. Our focus remains on market-beating growth in targeted, attractive sectors. At the same time, we are striving to meet the heightened market demands and complexity born out of the conflict in the Middle East. Yields in both Sea and Air Logistics remain stable and slightly improved. Our cost reduction program is on track with continued confidence in targeted savings, whereby the progress in the first quarter was ahead of plan. We have a strong foundation to achieve AI productivity gains and foresee material traction from 2027 onward, a view that we shared on our last call. We have seen continued progress over the past few months with AI adoption expanding across our operations, empowering our workforce in their daily work. We will share a more comprehensive update, including further details on operational integration and next steps alongside our second quarter results. Lastly, we are raising the lower end of our full year earnings guidance range to reflect the better-than-expected first quarter results and current expectations for the rest of the year. With this, I want to thank you for your attention and hand back to the operator to open the Q&A session. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. Questions on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. In the interest of time, please limit yourself to two questions. Anyone with a question may press star and one at this time. Our first question comes from Alex Irving from Bernstein. Please go ahead. Good afternoon, Hopewell as well. Two from me, please. First one, what impact on earnings do you expect from the recent events in the Middle East? Given the small narrowing of the guidance range, the answer looks like none, or at least next to none. Be good to get your perspective on that. Second is regarding the cost cuts. How far into those, and especially how far into the expected headcount reductions are you now? How much is still to be done, and how significant do you judge the execution risk to be? Thank you. Hi, Alex. Stefan speaking. I take the two questions. First of all, in the first quarter, just to reiterate, there was no impact to be seen on GP or EBIT level from the Middle East crisis. Moving forward into the second and third quarter, mainly into the second quarter, we do not believe there is a significant impact to be expected other than the volume trajectory in sea freight. We see bookings currently are down by 70%-80% in and out for the GCC. We have mentioned in the numbers that that had an impact of 1.5% approximately, particularly in March, on the volumes. The yield will be stable, as Mark had mentioned as well. Yield will be stable in sea freight moving into the second quarter. What you will see more and more coming into the second quarter and the result to be expected is the fuel adders, which we transparently pass forward to our customers. I want to reiterate very transparent. We definitely will share that on a regular basis with our customer base in order to ensure that everybody understands what is happening. Overall, from a volume perspective, we expect air freight slightly ticking up. Volumes overall in sea freight, most probably flattish. We are confident that we can move forward with certain other trade lanes and piggyback on certain other trade lanes and growth, particular coming in from Asia to Europe and to a certain degree as well to the U.S. to offset the decline in the Middle East. Overall, not a huge impact to be expected from the Middle East crisis, rather not negative, neither positive. The main focus in terms of the EBIT improvement will come from the cost efficiency and cost-cutting program. Or let me focus on the second question. How many FTEs? What has been executed already? By end of March this year, end of March 2026, we have executed in full, and there will be no further reduction from that particular program to be expected in terms of additional FTEs in the second or third quarter. Thank you. Very clear. Next question comes from Muneeba Kayani from Bank of America. Please go ahead. Good afternoon, and thank you for taking my questions. I just wanted to follow up a bit more on the air market, which was clearly tightened because of the Middle East disruptions. A bit surprised to hear you say that that hasn't had an impact and you don't expect it to have an impact. Just want to understand how you're seeing that and wanted to clarify on air yield expectations for Q2. Do you think there could be a further tick up from the strong performance we've seen in the first quarter on air yields? Then secondly, just on the guidance. Appreciate you've raised the lower end, but based on what you've said on kind of Q2 expectations, that would imply a second half EBIT lower than the first half, which is seasonally not what happens. Really kind of what needs to happen to reach the lower end of your guide, and why did you raise the upper end of your guide by a similar CHF 50 million? Thank you. Hi, Muneeba. Let me just take the second question first on the guidance. I think I even mentioned it, I think, in my presentation. We expect the second quarter to be seasonally as well stronger than the first quarter. There is no concern that the second is going to be lower than the first. Why we increased and raised the lower end of the guidance is basically because we exceeded on the first quarter and we adjusted the lower end to that effect with a little bit of an add-on on top of it. It actually means we are consistent and remain with our assumptions and conclusions for the guidance for the rest of the year. Stefan speaking. Hi, Muneeba. Clarification or more clarity on the air yield. What we expect is a slightly higher yield into the second quarter versus the first one on Air Logistics. I mentioned Sea Logistics most probably rather flat in terms of volume and yield. Air will be slightly up, same as expected for volume. Remember what I said during the call six weeks ago in the first quarter in March when the crisis started, when the war started in the Middle East. We missed roughly 16%-18% of the total volume, the capacity which was grounded from the Middle East carriers. That is now back. Single digits still is missing, but this is back. Why do I state that we believe there is a little bit of higher EBIT to be expected or yield per 100 kg expected is based on the product mix, based on the better mix, which we have seen the last couple of weeks. Less perishable, significantly less e-commerce, and a better basically gain ratio in the hard cargo segment, where we traditionally see a higher yielding paired with the surcharge adders, which will increase the rate level as well to a certain degree. Thank you. That's clear. Markus, actually, my question on guide at the lower end was on the second half, not the Q2. Which 2Q is very clear, but kind of how is your thought about the second half of the year in that guide? As I said, we are not changing our assumptions for the rest of the year. Okay, thank you. Thank you. The next question comes from Parash Jain from HSBC. Please go ahead. Yeah. Hi. Thank you for taking my question. My question is more into, in your discussion with your customers, both on air and sea, what kind of commentary are they sharing with you, given we have seen U.S. retail inventory has come down. At the same time, do you think that higher inflation will dent the business sentiment or consumer sentiment as it is shown in the U.S. Michigan index? Going into the second half, do you have certain assumptions by when this crisis will be over or where the oil price will be to get to the numbers, the range that you are offering? Thank you. Yeah. Stefan speaking. Parash, thank you for the question. Yeah. As mentioned, so the Transpacific, so the volume, the consumer volume, the sentiment mainly from Asia into the U.S. is rather soft. I think depending where you are in the U.S., up to $1.50 more per gallon, basically. The inflation overall is impacting the consumer sentiment, and you mentioned it quite rightly so. This is definitely ongoing. We do not see any signals that the Transpacific market, the U.S. market, is recovering soon, as long as we have that situation. That was backed into the updated outlook and forecast that will be offset to a certain degree by other trade lanes and in particular by our cost measures. Your main question was about the consumer sentiment, and we see that is still rather soft. Okay. Just in terms of, has the duration of the war or oil price has gone into your assumption? Or you think that oil price irrespective will be passed through almost on a real-time? It will pass through, yeah. As I had mentioned before, I think that was the question. It will be passed through. At the beginning of your question, you mentioned how our customers reacting, right? I think we have very open, transparent discussions. Yeah. 99% of the customers fully accept and expect it, right? Accept the discussion, and we do not see a significant topic in regards to the fuel price and the adders. As I said again, and I'm repeating myself, we are extremely transparent. Okay. That's very, very helpful. Thank you, and have a lovely day. The next question comes from Marco Limite from Barclays. Please go ahead. Hi, good afternoon. Thanks for taking my question. I have one follow-up question on your Q2 outlook. You guys talk about sea yields stable quarter-over-quarter, and then you talk about volumes also stable. Now the question is that year-over-year stable or stable quarter-over-quarter? Because generally Q2 has got better seasonality versus Q1. Yeah, wondering if that's year-over-year or quarter-over-quarter. Actually, same question for air freight volumes. When you said slightly up for volumes, were you referring to year-over-year or quarter-over-quarter? Then my second question, again, another follow-up question is on your cost savings. Clearly the beat in Q1 was all driven by, or mostly driven by cost savings. Now, are you able to quantify where are you in terms of run rate compared to the CHF 60 million run rate by your end? Because if the beat versus the CHF 285 million guidance is all coming from cost savings means that you achieved CHF 30 million, basically more of cost savings than what you expected. That's a run rate compared to the CHF 50 million by Q4. Yeah, that would be helpful. Thank you. Hi Marco, it's Markus Blanka-Graff, and I start with the cost-saving part. Appreciate your reverse engineering calculation and you're relatively close to reality. We had a head start, I would call it, into the first quarter with the cost savings. It's not a linear development as we anticipated still at year-end. I would say that from our ambition of a CHF 50 million per quarter cost reduction, so CHF 200 million annualized, we are probably just past the 50% on a quarterly basis cost reduction. You talked about CHF 30 million. We're probably somewhere in that ballpark. That also means we might not see the same linear development going into the CHF 200 million run rate. We might see the second quarter being a bit flatter. We have already talked about inflationary impact on April through the manpower cost. We might see a bit of a slower progression. From then on, we will continue into third and the fourth quarter. As I said, I think our CHF 100 million ambition for this year, we should be able to exceed that. On your first question, the comparatives had all been on a year-on-year basis. Every comparison on volume and yield had been on a year-on-year basis. Sorry, just to, I think it's quite an important point. Also your comment on air yields of small up is on a year-over-year basis, okay, which was 770. Fine. If I can, does make sense, does make the outlook for Q2 quite positive, especially in air, if you have quarter-over-quarter, let's say, based on normal seasonality, 10% more volumes on higher yields means that air EBIT will be significantly up quarter-over-quarter versus Q1, in your view. Thank you. I would say the likelihood is there, yes. Short and crisp. Thank you. Next question comes from Cedar Ekblom from Morgan Stanley. Please go ahead. Thanks very much. Hi, gentlemen. I just wanted to ask a little bit more on your air business. Can you talk about your approach to buying capacity? Obviously, there's a huge amount of volatility in the market, and so I just want to get a better understanding for how you're risk managing some of the potential impacts around spot rates for your business. How are you positioned, net long, net short, maybe a little bit of color by region would be helpful. Thank you. Yeah. What we do is, as you know, we have a combination of block space agreements, long and short with the commercial carriers. We have, since years now, a charter operation together with our subsidiary, Apex, where they operate on our behalf as well. What we do is, in the last couple of weeks, we have secured additional charter operations, especially when you look into the Southeast Asian markets, where the technology comes from, large demand from the hyperscaler semiconductor industry and the other tech companies, mainly from Thailand, from Vietnam, to give you two main examples. Taiwan, Taipei is as well very hot in terms of the volume demand is concerned. We don't only piggyback on the normal commercial flights, the uplifts directly airport to airport from these destinations or from these locations into the receiving countries. We will operate, or we already operate, with charter capacity point to point, but additionally, with capacity which we utilize from Southeast Asia to China, and then we take from China, from an airport in the western China region, we take significant additional uplifts from China in order to ensure that we always promise or keep the promise towards our customers to have enough capacity and to guarantee a certain transit time. Even if there is a problem on the commercial flights, we add and balance this with additional charter capacity for the customers. The next question comes from Rajpal Kulwinder from Baader Europe. Please go ahead. Yeah. Good afternoon, everyone. Two questions on my side. First on Road Logistics. I wanted to better understand how much of the EBIT growth actually came from going to road from sea in the Middle East, and how much actually came from the demand recovery in Europe. Just a qualitative flavor there would help. Secondly, I'm not sure if I missed it, but when we look at the decline in air volumes in Q1 on the lower yielding side, was there some selectivity at play here, or if there are some other factors behind the scenes? Could you please elaborate on that? Thank you. I take the road question first. It was mainly 90%, 95% coming from additional volumes in the European marketplace plus the U.S., and only to a smaller degree based on our size of business, book of business, from the Middle East crisis. Raj, on the second question on the decline in air volumes in Q1 compared to last year, the major contribution is coming from a reduction on e-com business, e-commerce business that in the first quarter 2025 was still, let's say, there, in simple words, and right now it has declined by over 50% in volumes. That's really the volume impact and also the mix impact. Right. Just to clarify, would we expect some sort of a catch-up or would it be determined by customer behavior in the future as to how these volumes trend? Well, it's not only customer behavior, I think it's also how attractive that volume is for our profitability and how it matches with capacity. Right. Thank you so much. Next question comes from Hugo Watkins from BNP Paribas. Please go ahead. Yeah, thank you, guys. Just to go back to air freight, can you give any insights on potential jet fuel shortages, whether that's from yourself or what you're hearing from carriers, and just what that might mean for air freight capacity more structurally for the remainder of the year? Thank you. Yeah. We all know, and this is not a secret, that especially in Southeast Asia, I think lowest capacity is in Indonesia, followed by Vietnam, Thailand, to a certain degree. I think China has significantly more reserves. I would not worry about China currently. As I said before, with our strategy to balance charter block space agreements and own capacity operated by APEX, I think we are well-positioned to manage that crisis if it would even come. Repeating myself, the highest risk in terms of mitigation lies in Southeast Asia, where some of the countries do not have buffer beyond end of May or so. The next question comes from Alexia Dogani from JP Morgan. Please go ahead. Thank you for taking my question. Just firstly, you mentioned you are targeting growth in other trade lanes to offset the Middle East pressure. Can you tell us which trade lanes you're working on, and what gives you confidence that there is growth to be captured there? Secondly, I'm aware that usually wage deals reprice every April. What is your target or I guess your assumption for wage inflation this year, considering the CHF 100 million or over CHF 100 million is a gross cost-saving target? Thanks. Yeah. I tackle the growth question. Trade lanes, we have started, and I think I mentioned it now two times, we have started heavily to look from a seafreight perspective into the prepaid China market. You have a lot of new Chinese giants who are asking for support, and they always call it, "Help me to become global." We have reiterated and dedicated additional sales force in the Shenzhen area, for instance, where a lot of these customers are located. We are confident, from what we have seen already in the last couple of weeks in terms of business gains, that we can offset, with China prepaid additional volume coming in from new customers and existing customers, the Middle East crisis from a pure volume perspective. Alexia, it's Markus. On the inflation basis, so as you can imagine, we try obviously to address inflation topics and compensation on the larger workforce on the ground. I think overall we usually have a compensation for inflation also for Contract Logistics business, that is usually a pass through. Where we really have cost impact that is also impacting the bottom line is on the sea and air freight basis. Here I can safely say we remain below the global inflation values, but I don't want to disclose precise numbers. Thank you. Can I just ask a follow-up on this prepaid China market? Is that intra Asia or kind of ex-China to the world? No, it's ex-China to the world. As I said a couple of times, we are not focusing so much on intra Asia. The volume is huge, but the profitability is rather low, on the low-end side, $50, $60 per container unit. It's always focusing on China long haul, to the world. Thank you. The next question comes from Gian Marco Werro from ZKB. Please go ahead. Good afternoon, everyone, Markus and Stefan. I have two questions. The first one is a follow-up, really, on what we discussed already on this kerosene potential shortage and the belly capacity. Can you tell us, are your clients already planning alternatives to air solutions with you, which might be beneficial to you, I think? Then also the charter situation, how does that work with the kerosene availability? Do some of the charters already have their own stock fuels? Then the second question is just on your AI potential that you mentioned already six weeks ago. Can you so far already give us a bit more details here about the potential cost cutting that you see there? Thank you. On the jet fuel, I would say yes, of course, we have, with certain customers, different models. What we do is, and don't get me wrong, we cannot do something which is not possible at all, but we can do proper planning. Then with our charter capacity, as I mentioned before, a couple of minutes ago, Gian Marco, so we refill certain charter flights in China. We have access to certain capacity in China. We bring cargo from Southeast Asia into China, and then we refill our aircrafts on the way back to Vietnam, for instance, in China. On the long-haul flights, we refill as well in China. Remember what I said, China capacity will last significantly longer than in Southeast Asia, just in case something is happening. I'm not saying that we will see a significant shortage. It remains particular on how fast the Strait of Hormuz will be reopened and we come back to a normal situation. Just in case this is going to happen, then we are already in close contact with some of our very large customers to do certain planning and scenario planning in order to help them to maintain a certain supply chain accuracy. Gian Marco, on AI, so clearly that's an ongoing development and we see continued progress over our last couple of weeks. Between our last announcement and today is really just a couple of weeks. I would ask you to wait until we get into the half year results in July. I think you can expect far more tangible reports and numbers, I think, at that point in time. Between the last six weeks and now, really not much has changed. We have expanded our use cases, and we are more and more seeing the benefits in empowering the workforce in making really their work more or supporting their work in a much better way. The next question comes from Lars Heindorff from Nordea. Please go ahead. Yes. Good afternoon. Thank you for taking my questions. The first one is on the road business. It sounds like you actually see maybe a little bit of sign of improvement in the European markets. Maybe just if you can elaborate a bit on that. We've seen Maut statistics in Germany still being down. This increase in the organic revenue growth, is that caused by price increases? Is it volumes? Or where do you see there are any upticks because feedback on Germany is still pretty bleak, in my view. The second part, which is what most of the other questions have been around, which is still regarding the yield development, the bunker surcharges, particularly in sea freight. To what extent is that affecting the yields positively and negatively? In sea freight, I'm hearing that the carriers are to some extent struggling a bit, passing through the emergency bunker surcharges, and maybe that many customers are waiting for the regular BAF to kick in some time in the third quarter. How will that affect your yield development if we look a little bit further beyond just what goes on right now? Thank you. Yeah, Lars. Stefan, I take the first one. It is mainly market share gains, right? In the U.S. in particular as well in Europe. We have seen a pretty good development in the last six weeks. We have gained additional volumes in Germany and France in the large domestic markets, but as well, international. I think it has to do with what we have started last year, on the back end of the softening. When we saw that the market has really started to soften quite a bit, and then we increased our sales efforts. This is paying off now. I'm with you. Overall, German economy is still pretty challenging, but even so, we see good development from customers and new customers, and the volume is coming in much better than expected. Lars, I take the question on. I think your general question is any fuel bunker or any surcharges beneficial to the yield? I can answer, I think, for all three business units, if it's road, sea or air, that is neutral to the yield. I think what is important is what Stefan also mentioned a couple of times, is there is transparency from that impact towards the customers, and I think that is the most important thing we can do, being transparent and straightforward. It's not a yield topic. It's a cost pass through. The last question comes from Marc Zeck from Kepler Cheuvreux. Please go ahead. Thank you very much for taking my question. Last question then would be actually on the macro situation in Europe. We talked about the U.S., I guess. Let's say volumes into the U.S. were kind of sluggish for the last two years, and most of the volume growth, at least for the entire market, was driven by volumes into Europe. Now the energy crisis is probably more of an issue for Europe as we are not really self-sufficient on energy over here. What is the latest, really, that you see for April or that you see in forward bookings for May? How is the energy crisis affecting Europe? Why would you be kind of positive that we will get over this rather good without a major slowdown in European activity towards peak season in ocean freight in August and September? That's my question. Thank you. Hi, Marc. This is an interesting question because it's, I think, nearly impossible to answer correctly. I take the risk of being wrong, right? I think on energy crisis and what is the impact on the macroeconomics, the first question for us is, and we have talked about a little bit, what is the expectation of how long energy crisis are going to stay at such a super elevated level, much connected to how long the crisis in the Middle East is going to continue. What we can see is that at the current stage, the trade lanes Asia to Europe are basically holding up strong. How much the inflationary impact is going to put on customer confidence in the U.S. remains to be seen. Again, here is a question more like how long is it going to persist? I think it's too early to say if there is already an impact into the third quarter peak season expectations. I think we really have to sit here and look at the development for the next couple of weeks, before we have any idea what's going on. You know better than us, certainly. Oil price volatility is a topic of the day, and obviously for us, as I said in the previous answers, we are passing through this impact to the customers. Their behavior, I think, cannot and has not reacted on a daily basis. How that's going to be going forward, I think, as I said, we have to wait a bit. If I just have a chance to follow up on that one. If you compare the current situation to how things played out during the Ukraine crisis, let's say from a bank perspective, was pretty similar end of February, right? Back then, when did you see from European customers really the action that they pulled back a bit on the other side? Well, I think my first answer would be the magnitude or the impact on economy, right, on macroeconomics of the Middle East crisis now is far bigger than what we have seen on the Ukraine war. The energy prices and the severity, I think we have talked about even the potential of jet fuel shortages. That has never been a situation coming from the Ukraine war. I'm not sure if that is comparable. What we can generally say is when there is such severe disruption in supply chains, there is a certain period of a couple of weeks, so maybe six, eight weeks, where alternatives, we spoke about how alternative supply chains are being designed, are being done, and then if that new situation persists, then slowly that becomes that new situation to deal with. I think we are far away from any of that stage right now. We are still in a stage of disruption. Very clear. Thank you very much. We have a follow-up question from Marco Limite from Barclays. Please go ahead. Hello. Thanks for the opportunity to ask this follow-up question. Just want to go back to one of your statements, which is the Middle East had no real impact in Q1, and potentially to Q2. Was that referring to the seafreight business or to all the divisions? Yeah, I would say this is the question, and then in case I've got a small follow-up. My answer was, Stefan speaking, my answer was that the impact from an EBIT perspective in Q1 was not to be seen from the Middle East crisis. Just piggybacking on what I said before, we will see an impact on the overall freight rates due to the huge surcharge adders, which we transparently hand forward and put forward to our customers, and I talked about that as well. From a yield and from a volume perspective, you might see, and I mentioned it as well, that the second quarter in air freight will have a little bit of a better yield. Is that coming from the crisis or from a better mix? I would say it's more coming from a better mix and less from the crisis. Overall, one thing is clear, due to the huge surcharge adders, the freight rates overall are getting higher. That makes a lot of sense. When we think about the better mix, is that market-driven or is it you guys trying to, yeah, target more? That's absolutely up to us. Nothing to do with the market, it's us. We decide basically based on verticals and higher profitability, where do we play and where do we want to play. That makes sense. Is that because, in a period where there is shortage of capacity, I guess you prefer to go with better yield volumes? Is that the logic or something different? Yeah. Some of the logic, yes, that we put much more emphasis on the general cargo, on the hard cargo, right? With our service, with our product offering, with the quality we offer, we have the choice to basically go for the higher-yielding business. All right. Thank you, Marco, for the clear answers. Thank you. Thank you. Ladies and gentlemen, there are no further questions. Back over to you for any closing remarks. Thank you very much as always for your interest, listening, for the good questions, and we speak to you then when we communicate the Q2 figures. Stay tuned and healthy. Bye-bye. Ladies and gentlemen, the conference is now over. 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