Ladies and gentlemen, thank you for standing by. I'm Natalie, your conference call operator. Welcome. Thank you for joining the Deutsche Post DHL Group Conference Call. Please note that the call will be recorded. You can find the privacy notice on dpdhl.com. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Martin Ziegenbalg, head of IR. Please go ahead. Thank you, good morning, everyone, and thank you for joining us on our call on Q1 2023 reporting. As flagged in the invite, I've got here with me our designated CEO, Tobias Meyer, and our Group CFO, Melanie Kreis. We are aware that it's a busy reporting day in the industry, so without any further ado, over to you, Tobias, please. Thank you, Martin. Good morning to everybody. Welcome in this new setup for my first quarterly reporting. If we look at the first quarter, I think we can overall say that we've seen a very resilient business performance in a very heterogeneous market. After, you know, some recovery from the January, February troughs, where we've seen quite some contraction, it's now not really consistent since about March. We have some weeks where volumes in certain regions up, next week, they are down. It's really hard to read at present. Surely, this has something to do with holidays in the different regions as well. Overall, an unusually inconsistent scenario. We are confident that we are able to deal with that, and I think the Q1 numbers also show that even in this inconsistent macro environment, we're able to deliver for our customers and also are able to deliver when it comes to financials. Given that we can confirm guidance today, we are confident that we'll stay within the range that we've outlined on the March 5 reporting when we talked about the full -year 2022 and the outlook for this year. We are not yet able to call one of the scenarios that we've sketched out there, so the range stays basically intact entirely. We have to see how it continues to develop as we now go through the second quarter. Again, in the recent weeks, we don't really see a consistent trend as it comes to the macro developments. With that, I would hand it over to Melanie, to give you an overview of the development of volumes and then go through the divisions. Yeah. Thank you very much, Tobias, and hello and good morning to all of you also from my side. Let me start with taking a closer look into current trading momentum, starting with the B2B development on page three. I mean, obviously, we had expected the first quarter to be a weak quarter in terms of B2B volume development, and that is what we have seen. As you can also see on this slide, we have seen first signs of stabilization in March versus the initial two months of the year. This is encouraging and in line with our expectations based also on the experience from previous cycles. To be very clear here, the picture remains volatile and not yet consistent enough to call a recovery. I know that you will probably have lots of questions about April. April is not easy to interpret month to start with. It's impacted by the holidays. The Easter holiday was in April this year and last year but in different weeks, week-over-week comparison is slightly challenging. We've had significantly less working days in April than in March. I would say that overall, April continued in slightly the same way as March. Slightly encouraging but very volatile and too early to really interpret it in a meaningful way for the trend in Q2. The second topic I want to mention on this page because we have had many questions on that in the last weeks and months, when you compare DHL Express and DHL Global Forwarding. Express is once again holding up much better in terms of volume and weight than air freight. This is a typical cycle picture and not a surprise to us. I know that there were some doubts, particularly with regard to the weight development in Express. I think what we are seeing here, the post-pandemic unwind is not different to previous cycles. We also do not see a larger than usual reduction in Express weight. That in terms of general introduction to the volume trends in the quarter, let me now turn to the individual divisions, starting with Express on page four. Shipments per day overall down 5%, weight per day down 9%, and a still really great EBIT of EUR 903 million. I think what you can see here very clearly is that we have successfully been pulling our well-established flexibility levers to right-size air lift and ground capacities, in line with the actual volume development, and we have also maintained a very strong yield discipline. I think what is helping us, and we have mentioned that before, but I think it can't be overemphasized, we have a super experienced team across all divisions, but also particularly in DHL Express. They know how to flex the network up and down across the regions. I think in that way, we have now also shown in the first quarter that we can effectively minimize the effect of declining volumes on operating leverage. Overall, I'm very pleased with the resilience shown by our DHL Express division. That being said, please be also aware that the Q1 EBIT saw some tailwind from shorter-term swings in oil prices. you know that we have the well-established pass-through mechanism with a two-month time delay. This benefit in the first quarter more than offset currency headwinds which we saw. We expect the fuel surcharge benefit to unwind later in the year, potentially already in Q2. Let's see. It is what it is. I just wanted to be clear that that was also supporting the Q1 development in Express to a certain extent. Now let me continue the run through how each division is tackling the current circumstances with Global Forwarding, Freight on page five. Volumes and rates have also developed pretty much in line with our expectations. You can see our resilient GP performance, which shows that the lower market rates also come with lower costs to buy capacity, as typical at this point in the cycle. In that way, we have been able to cushion the spot rate movements in our GP to unit development, both on the air and on the ocean freight side. Beyond that, also nothing new. We continue to benefit from our internal improvements based on the new IT systems and the related improved processes. In that way, we are driving sustainable efficiency gains, supporting our GP and EBIT performance. You can see that the conversion rate in Global Forwarding in the quarter was right at the 35% mark, which we're aiming for over the cycle. Now turning to DHL Supply Chain on page six. I think here we have a very nice proof of the resilience of the business model. We've talked about that in the past. You can see that Supply Chain revenue was actually up in the quarter by 8%. That's a combination of growth in the existing contract portfolio, but also additional momentum provided by new startups, and last but not least, successful pass on of cost inflation. We can see that the long-standing focus in that division on standardization and digitalization is fully paying off, and that really leads, in combination with the new business wins, the good margin, performance, to actual year-over-year EBIT growth. We achieved an EBIT of EUR 227 million in the quarter. That's up 11%. I think that is worth pointing out, particularly given the current macro circumstances. Now turning to the B2C volume picture with DHL eCommerce Solutions on page seven. We have seen across the eCommerce part of our business and also in the division which carries the name eCommerce Solutions, that consumer behavior is showing some reservation in light of inflation and general macro. Overall, and Tobias will come back to that in a little while, we see eCommerce volumes holding up relatively well. Also here in eCommerce Solutions, we saw some improvement in momentum in March. While revenue and EBIT performance once again reflects our price increases and our targeted cost measures also in DHL eCommerce Solutions, the focus of this division clearly lays less on short-term EBIT growth, but more on the longer-term opportunity based on the attractive medium- and long-term structural eCommerce growth potential. On that basis, we are very pleased with the EBIT contribution and the 5.4% EBIT margin we saw in DHL eCommerce Solutions in the first quarter of 2023. Now leaving the DHL divisions and turning to Post & Parcel Germany on page eight. I think on the Parcel side, with 0% year-over-year growth per working day, we have seen a similar trend to what we saw in eCommerce volumes in the DHL divisions. The consumer is prudent, but overall volumes are holding up. However, as you know, if we don't have growth on the parcel side, we tend to have the decline on the mail side. We also have ongoing cost inflation, so the situation in P&P is a bit different to the DHL divisions. Specifically, this Q1 carried some additional costs related to strike risks. We also saw the triple digit impact of the new wage agreement. Putting all that together, it was a tough quarter for P&P, and you can see that in the development of the results. What does it mean going forward? Some of the Q1 burdens will lessen going forward, and we will hopefully also see some acceleration in parcel volumes growth in the course of the year. It is a different game compared to the DHL divisions, and one important element here is that the German government is currently revising the postal law, and that is key for the future ability to successfully continue the transformation from mail to parcel in a profitable way. We do hope for a new postal law, which will be a modern framework, which will allow us to offer a sustainable nationwide postal service at affordable prices with good working conditions and wages, and keeping the profitability on a reasonable level. That is what we will now figure out over the months to come. Putting the development in the five operating divisions together, let me turn to page nine and the group perspective on some key P&L and cash flow metrics. Group revenue and EBIT development reflects the freight normalization in Global Forwarding as well as general macro with a resilient profit performance in line with our expectations and guidance assumptions. As you can see, free cash flow was strong in Q1, with freight rate normalization also leading to lower receivables being tied up in our working capital. We have seen that very clearly, in our Global Forwarding, Freight division. Along all metrics, a good quarter in the light of circumstances, which clearly confirms our planning assumptions and shows that even in a cycle trough, we are well ahead of former pre-pandemic record levels of profit and cash generation. That was the look back on Q1. With that, I hand over to Tobias for the look ahead. Yeah. Thank you, Melanie. This brings us to page 10. This is actually pretty straightforward because it is largely what we have said on March 5th when we talked about the full year 2022 and the guidance for this year. Based on what we've seen in the last eight weeks, we cannot call either of these scenarios that we've laid out on page 10. Again, it is unusually, I have to say, inconsistent, what we currently see in the volume development. It's clearly better than the start of the year, what we have in March and April. There's no consistent trend. That shows that, for instance, out of some regions, we have a week with growth in air freight but decline, more significant decline in ocean freight. Whilst in other parts of the world, we see this, you know, inverse. That is really the manifestation of what we call an inconsistent current picture. We will see now in Q2 whether that continues or we get closer in calling out one of these scenarios. On page 11 is the breakdown, which you also know in terms of how the guidance splits on DHL and P&P Germany. We clearly need some positive momentum in P&P Germany to reach this guidance based on volume development, but also obviously the usual seasonal pattern that we have, particularly with a strong Q4. DHL, Melanie explained that particularly in Express, we have a small tailwind, at least net of currency changes when it comes to fuel. In overall balance, we stick with the same numbers and outlook as we had on March the 5th. On page 12, you might ask the question with the transition of the CEO role from Frank Appel to myself, is this gonna be any short-term changes in strategy? That will not be the case. We have our usual five-year cycle, which has served us well to provide a framework to the broader organization. That is very relevant for us because we are an organization that is spread out over many countries and many locations. We operate out of more than 10,000 locations. This consistency in the basic framework, what is our purpose, our vision, the three bottom lines that we manage operationally against, being employer of choice, provider of choice, investment of choice, and then sustainability, that has served the organization very well. There's no reason to change that short term. We're obviously going to have the discussion starting this fall, how we react to changes that we see in the geopolitical landscape and so forth, but that's the normal cycle of strategy. What we do see is that the four major themes that we always watch out remain very relevant. Globalization surely changes in its nature. We see certain trade lanes that, you know, have more growth than others. We see certain geographies with a China Plus One strategy that many manufacturer companies now adapting. That changes the trade pattern. That is perfectly normal for us, and this gives us more opportunity in some markets, and we need to be a bit more careful in others. That's exactly what we're doing. We do not see, and I think we've also shown this with the Global Connectedness Index that John Pearson presented a couple of weeks back. We do not see a general contraction in trade. The pattern is changing, but it remains something that for us is the bread. Obviously, focus needs to remain on that. Digitalization, we continue to utilize to enhance our operations and service. eCommerce and sustainability, I wanna talk a bit more about on the, on the next pages, starting on page 13 with eCommerce. eCommerce, I think Melanie also alluded to it, in the divisional updates, and results presentation, is very important for us when it comes to growth. It's not only eCommerce Solutions and the Parcel business of P&P, but it's really across the divisions by now. You have some key numbers here with the number of the growth in DHL Express, B2C shipments per day over the last four years being up 48%. That is something that continues to be very relevant, obviously in eCommerce Solutions in markets like the U.S., in India, in the Netherlands, where we are very strong. That drives this growth, but also smaller geographies where we have a footprint. Then, obviously the DHL eCommerce Solutions business in Germany, where we had to absorb the reduction of the large customer Amazon volume due to the insourcing into their network over these four years. Still, quite a substantial net growth that is left there, also with a lower share of Amazon volume. That I think is testimony to the importance of this trend, and we truly believe that e-commerce for us has at least a decade more in the tank to deliver significantly above GDP growth. You see on the right side that we are not only present on the last mile, which is often the focus, but it really also, you know, drives volume on the inbound side where we deliver to the fulfillment centers through Express and Global Forwarding. We're increasingly engaged in fulfillment operations, not only dedicated operations for consumer-based shipments, but increasingly also multi-channel solutions, where there's a common pool of stock used to resupply shops, but also to fulfill direct shipments to consumers. That's something where obviously supply chain is very much engaged in, and we also intend to grow further. On the last mile, it's surely the delivery side, but also return solutions, which become increasingly important and provide opportunities for growth, particularly as more companies think about circularity and the reuse and recycling of their product. That drives additional demand for logistics, which we definitely want to be part of. Page 14 alludes to sustainability. We recently had a very successful conference in Valencia, where we not only presented what we do, but also had suppliers, some aspects also competitors included, and also producers of alternative transportation assets like battery electric trucks, but also fuels, and obviously a lot of our customers. I think that was very encouraging. You really see that the discussion is evolving, that the setup of products which we laid out on this page across the different divisions, which is not only the easy to do offsetting, but is the hard work of reducing emissions through use of alternative assets like battery electric trucks. Also alternative fuels like biomethane and obviously sustainable aviation fuel, which is so important given the scale of our emissions when it comes to aviation. We see really that the discussion with customers is moving, that there's increasing willingness to participate and contribute to this so that we can also accelerate our efforts. You're aware that we made this EUR 7 billion commitments, that we put EUR 7 billion at least, or around EUR 7 billion, into sustainability technologies until 2030. We are underway with that, but obviously as customers increasingly buy into that, we would definitely like to increase that journey and also provide stimulus to markets like sustainable aviation fuel production. With that, we come to digitalization, where we offer a couple of extra sessions to basically provide more transparency to you how we move on that journey. It is again important across the divisions, where we highlight how it contributes to ESG, but also automation. Think, some of you had the opportunity to also see in North America what we are doing there in terms of robotics, which is something that we're very excited about as it helps us to deal with the changing labor market, to capture the growth opportunity and fulfillment and enhance our service quality. Additional sessions which are laid out here to provide transparency on that. Which brings me to the final page 16, as a wrap-up. I think we can say that we are satisfied with the first quarter, given the circumstances that our balanced portfolio across the different sectors, but also the different geographies, has proven its resilience. That we continue to drive the right priorities, that the organization remains very focused to deal within volatile environment, which obviously in our large and dispersed organization is very important, and that we're able thereby to continue to drive profit and also cash flow. We remain clearly focused on the opportunities that such environment offers, that we continue to drive growth where we can. We have a very strong balance sheet, which enables us to obviously look at opportunities, but also see them as opportunities and not necessities. At the same time, tackle the challenges that such a macro environment also entails, particularly also the situation in Germany. Melanie alluded to the discussions that are ongoing on the postal law, so that we set up our operations in line with those boundary conditions and context. That's what we are working on and what you also expect of us. With that, I would hand it back for questions. Thank you, Tobias and Melanie. Operator, you please start the famous 3 if I may session. Thank you. Ladies and gentlemen, at this time, we will begin the question- and -answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. Our first question is from the line of Cristian Nedelcu from UBS. Please go ahead. Thank you very much for taking my questions. The first one is on your guidance. You have a bad environment in the quarter in volume-wise. You have done EUR 0.6 billion of EBIT. We annualize this, and then we add the usual seasonality for a stronger Q4. A few hundred million of extra EBIT get somewhere to closer to EUR 6.5 billion EBIT for the year in a scenario of no economic recovery. Question here, it seems there is a good dose of conservativeness in your guidance when you talk about the EUR 6 billion at a no recovery scenario. If I may on express, could you give us a bit more color on the trends that you're seeing or you're expecting in express in Q2 in terms of revenue per unit? The price increases that you've pushed through, are those sticking? What is happening to the emergency surcharges and any other moving parts to understand if your revenue per unit in Q2 and Q3 in express, in TDI, can remain flat or up year-over-year. Last one, if I may. On the free cash flow, your Q1 run rate seems to be a bit ahead of since within the EUR 3 billion free cash flow guidance that you have in place. Could you talk a little bit how much are you counting here on tailwinds from DGFF? Working capital savings from DGFF as rates come down. Could you help us understand a bit, what you expect in terms of contribution there and, if there is upside risk to that number? Thank you. Right. Maybe I start, and then Melanie, particularly on questions two and three, will add. First of all, obviously your math in terms of extrapolating, that is correct. I think Melanie mentioned that, for instance, in Q1 in Express, we had, you know, a little bit of tailwind, you know, when it comes to fuel, also still a net, even if you take FX into account, which went against us, both on the top line as well as on the bottom line. We've obviously talked through the different scenarios, and for us it's just too early to tell, given that the last weeks, you know, if I would have to summarize it into one word, I would say it's wobbly. The organization can deal with that environment, but obviously, we would like to see a little bit more substance when it comes to macros and that's just currently not what the actuals offer. It is very inconsistent and we'll see as we now go through May whether we see a clearer trend. April has not offered that. As it's relating to Express, I think there's nothing really that sticks out in terms of changing expectations. The emergency surcharge that you're referring to is a cost offset. And obviously as cost, if they continue to normalize when it comes to air freight, when you know more and more belly comes back, we'll adjust the network. I think the Express organization has in 2022, when the Russian aggression on Ukraine happened and capacity was falling away, has reacted to that in a way that, you know, I'm very happy with and something that I think makes us all proud that we were able to deal with that. Similarly or reversely, the adjustment of capacity now in Q1 has happened in a way that has helped us to offset those revenue declines. Maybe as important for us, has not had a negative impact on service, which obviously in Express is utterly important at, you know, such adjustments in the network do not hurt our customers. And, you know, some more belly space lanes were brought back into and on some lanes that enhance the service. I think that has worked out very well. Neither on price nor on emergency surcharge we would see a significant change in trends. With the free cash flow, I think, yes, it's right. We had in the first quarter some tailwind from the release of working capital. Now, a little bit of that will still come, but obviously we would also expect just also because on the year-on-year comparables, that cycles out. It's a little bit to come, but it's not really decisive for the remainder of the year. Melanie, you wanna add some points to that? Maybe just on the last question. I mean, that also linked to the fact that, despite the broad range in our EBIT guidance, we have actually given, for the free cash flow, just one number around EUR 3 billion. Because obviously if we see an uptick in dynamic, in the second half of the year, that will then also have a negative impact on working capital. If things remain sluggish, we will have more of a release in working capital. Of course, also on the CapEx side, with the EUR 3.4 billion-EUR 3.9 billion range, we will make adjustments. I think that's one of the good things about the moving parts on the cash flow, that we have counterbalancing elements in here, and hence the overall guidance for the year around EUR 3 billion. Cristian, I think that's three answered questions, right? Very much, yes. All right. Cool. Thank you. On to the next caller, please. The next question is from the line of Alex Irving from Bernstein. Please go ahead. Hi, good morning, Tobias and Melanie. Hope all is well. As Mark suggested, 3 if I may, please. First, on Express, could you please give us a sense of how you're currently planning your capacity? Are you still taking out further lease capacity into May, or is that beginning to reverse? Second thing about destocking and restocking. Clearly, the forwarding volume is in a soft patch at the moment, as expected. As we exit that and move into 2024, how would you expect air and ocean volumes to evolve? Should they be back to 2019 levels ex -Hillebrand or above or below that? Finally, on more of a macro level, one of your U.S. peers was quite cautious last week, pointing to softness in Asia in particular. Is that something you're also seeing? If not, why do you think you're enjoying a differentiated demand experience? Thank you. Alex, on the, on the first question. You know, our portfolio in terms of, owned long-term lease, short-term lease, and, what we call ACS, so the use of belly space, that's the overall portfolio. That will obviously evolve as, certain, things cycle out. That also provides the opportunity, for instance, on the short-term lease side, to, be able now to participate in the normalization of such rates and thereby, by lower cost. I think we have some flexibility. We have made, those capacity adjustments. We, you know, we have also seasonal element in there. I think that's important. Yes, there might now, as we go into summer, be some further adjustment, but it's not necessarily a sign that, you know, we expect it to weaken, but more a matter of seasonality, which would then inverse in Q3, Q4. We have also flexibility, for instance, on the block hours of, you know, leased aircrafts. We typically agree there a range of block hours where we then have relatively variable cost for that aircraft within that range. That is what we use to be able also to show that profile in terms of seasonality. I think directionally, you know, and adjusted for seasonality, we basically keep capacity currently. When it comes to, I think the volumes of GFF, you know, obviously we would like the market to return to growth. We are not yet there. I think that's clearly visible, both in air and ocean. I don't think that we really, in that business, have a strong view on 2024 yet, and we don't need to. It is a trading business where we will flexibly adjust. It's very different from Express in terms of asset intensity and so forth. For us, this is too early to call, and there are no real decisions linked to that. As it comes to Asia, we looked at that very carefully, and the interesting thing is really that the countries are behaving very differently. We had, you know, end of March, a very strong week out of, out of China. We had, you know, just recently a strong week out of China, but it's just not consistent. I don't think that we are, as such, cautious on the whole of Asia, but there is just no consistent trend currently visible, neither in Express, nor in air, nor in ocean. I think that's what we honestly have to convey to you, that the changes week on week are unusually high. It's nothing that really worries us. We have been able to deal with that operationally, but we cannot give you a clear macro indication in this call. It is just, you know, too inconsistent, what we see on a week-on-week basis. Maybe just to add 2 points from my side on the last topic. I think first of all, as a reminder, I think what sets us apart also from maybe U.S. competitors, Asia for us has always been more than China and the Trans-Pacific trade lane. I think that is something which I think overall is beneficial for us. As you specifically mentioned, the comments made last week by a competitor of ours, where there was talk about things actually getting worse out of China in the course of the 1st quarter, that is clearly not. Alex, useful enough for you? Thank you very much. Very good. Next caller, please. The next question is from the line of Robert Joynson from BNP Paribas Exane. Please go ahead. Good morning, Melanie, Tobias. A couple of questions from me, please. One on express and one on forwarding. If I start with express, so if I think about some of the statistics provided in the presentation, you outlined that the TDI yield was up 5%, which I think is very reasonable, and that the average weight per TDI shipment was down by around 4%, which in my mind is very reasonable as well. If I kind of think in that context about the bear case on express, which is essentially the yield benefited enormously from higher air freight rates and that the weight per shipment benefited enormously from supply chain disruptions and shipments being transferred from sea to air and so on. Are we now at the point where it's fair to conclude that supply chain disruptions and the spike in air freight rates maybe actually didn't benefit express EBIT to the extent that some people thought? It just seems to me that if express profitability was going to disappoint, it would have happened by now. Second question on forwarding. If I look at the GP per container specifically, it was up by around 12% in Q1 versus Q4, and during the presentation you alluded to some benefits from lower buy rates. Could you maybe just talk about how you expect the GP per container to develop during Q2 and for remainder of the year more generally? Thank you. On express, I think honestly you phrased it very well. you know, express also the way we handle it, customer loyalty is very important and, you know, customer relationship. We could have earned more money in express at the heydays, you know, of the pandemic, but conversely now it is a more stable model than what you see in forwarding. We you know, think this is very normal, given that one is an asset-based business where, you know, we have often very long-term relationships. Goods have a certain affinity to using that mode of express. Therefore, we are not surprised by what we see in the first quarter, that the normalization in express looks very differently than the normalization in forwarding. I think in forwarding though, what is important, that, you know, we will see how the cycle continues to pan out, but it is quite normal that in the downturn, you have still quite some GP opportunity. You know, we have to see now if the environment would remain very volatile. That's in tendency good for GP margins. If you have a long sluggish trough, which, you know, very gradually then sees an improvement, that is not positive for the forwarding market. That is how we think about the forwarding yields going forward. We'll have to see whether there's continued to be disruptions, not of the scale we have seen, but in different trades and volatility, or we get into a long, you know, long trough, which would definitely not be so favorable. That is how we look at forwarding going forward. Melanie? Just to add, I think on the forwarding side, what you rightly picked up on this kind of like increase in GP per TEU from Q4 to Q1, that was really due to the improved buying rates we already experienced in Q1. I think that's really typical for the late and in the cycle, where directionally our selling rates are still going down further. Now in Q1, we were able to really also benefit from the lower buying rates. I think on the Express side, just to be very clear, these abnormalities of stuff which came over from forwarding into the Express network, the PPE equipment, the tires, that stuff is gone, right? I think what we are now really seeing is the typical macro cycle impact on express and I think essentially we're waiting for volume to come back in express. All very clear. Thank you. Thank you, Rob. Before we come to the bears, the next caller, please. The next question is from the line of Muneeba Kayani from Bank of America. Please go ahead. Good morning. I also just wanted to first have a question on forwarding and the EBIT performance there. The conversion ratio, strength and costs look like came down sequentially. Kind of have you taken any actions here on the cost side? Really want to understand how much of the performance was market dynamics around buying and selling rates that you just talked about, Melanie, versus kind of actions that you've taken from a self-help perspective on forwarding. Second question on Express and kind of related to the earlier question there. Is the weight per shipment looks like it's stabilized in March, do you think this is kind of the right level for this business going forward? Kind of where does that settle then compared to 2019? Because I think you had given us that number in 4Q compared to 2019. Lastly, on free cash flow, if it does turn out to be better than your guidance, what would you do with that? Would potentially higher share buybacks be on the table? Thank you. Right. I'll take the first two, and then Melanie can talk about the last one. DGF, the conversion rate has, you know, come down a bit. That's, you know, correct. It's still, you know, we're closing the gap basically to competitors, and I think that's exactly what we would like to see. Yes, obviously there's some adjustment of the resource level if volumes, you know, normalize, but it's, you know, normal part of the business. We would expect that of any forwarding branch to balance, obviously, the, volume, with the resources required. There's no need for us to have big cost savings programs centrally. That is normal part of what we expect from the forwarding division and the forwarding division from their country organizations and branches. As you know, this is a business that is best managed very locally when it comes to P&L responsibility and that's exactly what's happening. One short thing, because that may look confusing when you look at the FTE development in the stat book. Here, we have the inorganic impact of Hillebrand in there, and if you take that out, FTEs are actually down in forwarding, as you would expect at this point of the cycle. Absolutely. Obviously, we have the increase now with Hillebrand, which will then cycle out in the relative data in the year. When it comes to express weight per shipment, I think this is, you know, there isn't one specific kilo that we would say is the right kilo. It always depends whether we get high-yielding shipments for what they are. If we add, you know, premium e-commerce, you would see weight per shipment drop. That's not to say unhealthy. The important thing is that, you know, each shipment is a profitable shipment, and that's what we manage towards. The, you know, trend we've seen, Melanie talked about, you know, some of the very large stuff that we got during the peak of the pandemic that has already cycled out. Now we'll see whether, you know, we have continued success with premium e-commerce, that would bring weight per shipment down, but not in a negative way. That's what I would say. You know, there's not to say the right weight per shipment. It's important that each of those shipments has a contribution, that we can handle them well in the hubs. If we have too high a share of non-conveyables, that creates certain challenges there as well. Elsewise, I think we're comfortable with the business that we now have on board. In regard to the third question, should free cash flow be better, what will we do with that? I hope we have proven to you over the last years that we will apply then a very balanced approach to that. As you know, we have just upped in March our current share buyback program, and that's where the focus is. I'm also very confident coming back to the question, what will change with Tobias's? I think the prudent and balanced application of excess cash, that will not change. Thank you. Thanks, Muneeba. Next caller, Sam. Yes. Next question is from Sam Bland from JP Morgan. Please go ahead. Oh, thanks. Thanks for taking the question. I have two, please. The first, in fact, both of them are on Express. The first one is, so we had a help from fuel surcharges in Q1 and a negative from FX. I guess the fuel part has to reverse just a matter of time. Is there a reason to think that what was a negative from FX will reverse in future quarters? Like, can you look at current FX rates and have line of sight to that negative from FX reversing or not? The second question is, I think TDI volume in total was down 5%, B2B was down 1%. Is that sort of roughly implying that B2C in Express was down closer to 10%? I guess that's quite a different trend to what you saw in P&P and eCommerce Solutions. Just wondered if you could talk about that B2C volume in Express. Thank you. On the first one, that's in principle what we would expect that also on FX, I mean, we're not in the business of forecasting a foreign exchange, but if we just look at where we are currently, we had some hits also from, you know, smaller countries where you had, you know, extraordinary volatility and depreciation of currency against the euro, which had that impact in Q1. At this point, there's at least no reason to believe that that would, you know, happen to the same extent in Q2 again. There would be some normalization. Yeah, I think just to add to that, when you think back to the Q1 2022, that was when the turmoil on many currencies really started. The year-on-year comparison is different to the rest of the year. When you think, for example, just about the evolution of the dollar in the course of last year, kind of like when it got down to parity, and now the euro got stronger again. Directionally, it will be what it will be, but in terms of year-over-year comparisons for Express, it should directionally probably be more on the positive side. With regard to your B2C calculation, I think the order of magnitude is correct. In Q1, the B2C volume decline was around 10%. Here as well, it got better in the course of the quarter. It's not, and we looked at it very carefully because we lost any specific customers, but it was more down trading on some of the customers, which we would attribute really to the general consumer reluctance in light of inflation and macro worries. Understood. On the fuel surcharge, I mean, I think the jet fuel price has been coming down for almost a year. It Did fuel tailwinds or fuel surcharge tailwinds benefit previous quarters, you know, in the second half of last year? You just didn't, it wasn't big enough to talk about it, or is it not really helped until Q1? Yeah, I think it now got material. I mean, it was first of all wobbly in the course of last year where we had significant swings more month-on-month and also between the quarters. It was not kind of like as material as it was now in the first quarter. Keep in mind that the two-month time lag every other month, the surcharge is being adjusted, and it very much depends on how that timing falls into the actual fuel cost fluctuation, whether that's gonna play out short-term positive or short-term negative for us. Yeah. Because we buy at whatever is the rate of day and, on the surcharge, we have this two-month time lag. Depending on how that plays out, it can be, and it was very volatile in 2022. Understood. Thank you very much. Great. Thanks, Sam. We continue. Next question is from the line of Alexia Dogani with Barclays. Please go ahead. Yeah, good morning. I have two questions, please. Just firstly on the Post & Parcel division. Appreciate obviously the contribution to the group is diminishing, but could you talk a little bit more about the German retail sales environment? My understanding, it has been quite weak, yet you did organic, flat parcel volumes. On the kind of negative side, mail decline continues at 6.5%. How do you see that recovering? Just firstly on that, and then secondly, could you update us on M&A and the process that is ongoing in freight forwarding, which is close to home? Thanks. Thank you, Alexia, for these two questions. In terms of P&P, I think the quarter had a couple of specific effects, we obviously have the broader story in terms of the structural, you know, changes in terms of mail being substituted by digital communication. We see some quarter specific elements. We had the labor conflict that we settled with a wage deal for the next two years, it was overall a bit more heated than usually. I think we are not an exception in that. We also have that in other sectors, including the public sector in Germany, that the unions, given the inflation environment, were more apart from what, you know, was affordable and reasonable than in previous years. There was some additional customer concern around that. We particularly think that some additional decline in our advertising mail might have been caused by that customers were just concerned whether it would arrive in time, whether the capacity would be there when it's needed. How big impact that is, we don't know. On the cost side, we clearly kept some more people to be more resilient in case such a permanent strike would have happened. We had some warning strikes where that was helpful, but obviously it didn't help cost in the first quarter. There are some exceptional effects relates to that, but surely we need to particularly now look at the conditions the new postal law provides us. I think that is more important than the, you know, whether we have a 1% or 2% more or less volume trend that will somehow have to deal with that. We now need to see what are the really, the framework we operate in Germany and need to adjust accordingly. Those discussions are going on. You know, there's no clear view that the government has formed on important items. I think that is something we at least are waiting for to, you know, then make up our mind how we need to adjust in terms of the P&P operating platform. In terms of the M&A story close to home, I think you're referring to DB Schenker as part of Deutsche Bahn, and that being a government-owned institution. You know, I think we have commented on that. What would be our general criteria to look at M&A? It's the three. Needs to make strategic sense, it needs to come at the right price, and it needs to be easy to integrate, which is very important to us. You know, we know that certain businesses, network business in particular, physical networks, are very difficult to integrate. Those criteria still absolutely apply. I think it's more important, you know, this egg has been around for a while. The chicken has never really made it to the hedging phase. Let's see, yeah. Let's see how the process goes. Once, you know, the little chicken makes it to the surface, we'll have a look, whether we like it or not along the three criteria, and then we'll see. Thank you. All right. Thanks, Alexia. I think we've got Sathish next in line. Am I guessing right? Yes. Sathish, you are now live. Please go ahead. Mr. Sathish? Can't hear you. Hello. No, unfortunately, we can't hear Mr. Sathish Sivakumar. Maybe we can continue with the next question. Yes, please. Yes. The next question is from the line of Andy Chu from Deutsche Bank. Please go ahead. Good morning. Just two questions from me, please. The first one is around the sort of bridging year in your guidance, 2024 that's sort of blank. I guess the fears in the market are around the shape of normalization and the macro backdrop. Just in terms of 2024, is 2023 going to be, in your view as you see it to date, the trough year on your journey towards your 2025 guidance? On DHL Express, apologies if I've missed this. In terms of the benefit from fuel and the negatives from FX, could you quantify that in euro millions terms, please? Thank you. Yeah. Andy, thanks for your two questions. In terms of 2024, I think currently we would expect 2023 to be the trough year. Normalization pans out a little bit differently by divisions. I think we've given some transparency on that, particularly as it relates to DGF, where we now see this contraction in terms of revenue. We, from today's perspective at least, we would expect to see some uptick as we go to 2024. Obviously, not knowing whether there's gonna be any macro events that, you know, geopolitical events that still could change that view. In terms of the benefits of fuel and FX, Melanie, you wanna comment? Yeah. I think if you kind of like look at kind of like the three year or the year topics of fuel, FX, and let me add ESS as a lesser extent in there, I would've said the benefit we had in Q1 was in the high double-digit million order of magnitude. That's fuel effect net of the FX effect. Right. Thank you very much. Clear enough. Very good. On to the next caller. Next question is from the line of Johannes Braun from Stifel Europe. Please go ahead. Yes. Thanks for taking my questions. I have only two. First one would be specifically on the volume development in ocean freight. You showed 17% decline if [Hillebrand] is excluded. I think that's quite a bit worse than the market and also your peers. Can you comment whether it is you losing market share, or is it due to a different regional footprint or any other reason? Secondly, you mentioned the potential new postal law in Germany in your speech. Can you just update us a little bit on the timing of this new postal law and whether you think the change will be rather net positive or a negative for you? Also any early thoughts on a potential stamp price increase once the current regulatory period ends. Thank you. Yeah. Maybe I'll start with the first, and then Tobias can talk about the postal law. I think in this phase of the cycle, it's a delicate balance between holding on to profitable customer businesses and keeping up prices versus going for volume at lower rates. When you kind of, like, look at the balance we struck on the ocean freight side, we clearly had a very good development on the profitability. We talked earlier on about the fact that GP per TEU was actually up in compared to the fourth quarter. Of course, that then makes defending volumes a bit more challenging. I think we were probably more on the profitability focus than on the keeping volume at any price, focus. That is what you see in comparison, to competitors. Yeah. In terms of the postal law, the timing, you know, has already shifted quite significantly from the original plans, which I think is very understandable given the issues following the Russian aggression on Ukraine in terms of energy supply, where, you know, at least in terms of the ministry, it's the same ministry and to some extent the same people having to deal with that. Now also in the revised schedule, there seems to be some need for further discussions. We would expect to see some more clarity by June, July in terms of revised cornerstones and what's really now gonna happen. The coalition parties had agreed in the coalition treaty to form the government that there should be more social aspects also ecological aspects reflected in this reform. It is currently unclear how this would really look like. I think it's important to see this in the broader context, not only, you know, the stamp price, but really what the overall framework looks like. It is, I think, very clear that the stamp price, which is currently, you know, 36% below the European average, that there has to be a normalization also in that area reflecting inflation. It also depends what service level is required of us. We currently deliberately are the universal service provider in the country as it relates to the postal universal service obligation across the country. There are pretty specific requirements put upon that service when it comes to next day rate, when it comes to the outlets that we have to have and so forth. There just has to be a reasonable balance between what is demanded of that service and what the stamp price then is gonna be. We will look at that in balance. I think there is no clear indication yet in which direction this goes, and we'll have to wait and then afterwards shape up our operations and cost structures according to what we see when it comes to those rules and requirements. Okay. Thank you. Welcome. We are on the finishing stretches here. Three callers, I think, still left. Operator? Yes. Next question is from Nicolas Payen, from Kepler. Please go ahead. Good morning. Two questions remaining. First, staying with the postal law, I'm wondering whether there's a risk to the Post & Parcel Germany guidance if that postal law is delayed by the usual political mechanism and compromise finding. Have you factored any benefits into this year's guidance? Connected to that, do you think that the generous wage agreement that you struck with ver.di will afford you some goodwill with regards to the reform? Secondly, on the one hand, we've seen the effects of the Chinese reopening, and we have discussed those. At the same time, we've seen a slowdown in the U.S., partially on the back of the banking turmoil. Has that affected your business already, and how do you expect that to play out for the rest of the year in that specific geography? Thank you. Okay. On the postal law, there, you know, are no benefits in this year's guidance. We didn't expect this to have any impact. We need to go when it comes to the stamp price setting anyway through a quite complicated, separate process. That will take some time. It is clear that the guidance, you know, needs an improvement in the run rate. I explained a little bit how we look at the first quarter and that we surely have to have some efforts there to look at cost in particular. This has nothing to do this year with the postal law. That's an operational effort that is separately. You know, goodwill in politics, you might have more experience with that than I have, but, you know, I seem to feel that memories are short and, goodwill is a bit something that might be as problematic in politics than having too much on the balance sheet. Let's see how that comes out. I think it's more now a discussion of facts, what, you know, we can offer, what others can offer when it comes to the universal service obligation, and that will decide how this shapes up. In terms of the US, I think we alluded to it. It is hard to see trends currently. I don't think that we, you know, from the business we have in the US, would be able to really call out, concerns about the macro environment. We wouldn't want to comment on that specifically. Okay. Many thanks. All right. Operator? Our next question is from the line of Sumit Mehrotra from Société Générale. Please go ahead. Good morning, everyone. The first one is on the project that has been, as you've said, in the process of hatching for a long while. Of the three criteria that we have for M&A, which one of those would you consider as a bit challenging for this particular project versus the others? I know whatever you can enlighten us with would be great. Secondly, for Melanie, what is the one or two biggest reasons why you would still have the lower end of the EBIT guidance of EUR 6 billion still intact, even though we have seen some improvement, the second one. Thirdly, yes, I've seen a lot of elements about how Express pricing, et cetera, would look like. I have noted quite a few of the negative comments in terms of surcharges going away, lower weight shipments, down trading. So if you can give us some idea how to look at the pricing development this year, it would be great for Express. Thank you. Maybe I comment on one and two, and then Melanie adds, sorry, one and three, and then Melanie adds on two and three. I appreciate that you try to get more clarity on our stance. You know, I can see problems in all three criteria. You know, whether in the current macro environment, the stance on valuation of that business is something that we would consider reasonable. I think there are. You know, questions around that neither you nor I will be able to answer today because it depends on people that are not in this call. Certainly will have great respect to integrate networks and integrate IT. We, you know, have not really started to work on that to form that view given that the, you know, egg seems to show some form of crack, but there is no chicken visible yet. We'll wait until we see that chicken, and then we'll see whether we like it or not. On the surcharge for Express and us being negative on it, I think that's not the way we look at that. I think the pricing ability, we are very happy with what we've seen in terms of stickiness, in terms of the way it was applied, which, you know, is very important, obviously, in the current environment to not endanger customer relationships and volume. We are, I think, happy with what we've seen in the first quarter and expect that trend to continue. Just to add on that one. I mean, the number we gave for kind of like the average GPI in express, we talked about 7.9%. That, of course, varies a lot country by country. If we say kind of like 7.9%, was kind of like the GPI number. I know that a competitor of ours last week talked about stick rates north of 60%. That's definitely also the order of magnitude we are seeing. The core price increase on the 7.9% is coming through, is being implemented, and is helping. That is for us probably so much of a given that we didn't call it out so specifically, but more commented on the extraordinary moving parts. But you can really rest assured the fantastic pricing discipline we have had in Express for years and years, that is still very much intact in 2023. To your medium second question about the full year guidance and the lower end. Yeah, I mean, obviously looking at the Q1 performance, the EUR 6 billion seems more on the conservative side now. I think what would you have to believe in then that, based on a continued sluggish volume development, further normalization in forwarding GP, we would see a deterioration in forwarding profitability for the rest of the year. Not much dynamic on the express and e-com side. Yeah, obviously in light of the 1.6, it probably now seems a safer lower end of our guidance than maybe a couple of months ago. Thank you. Thanks. Thank you, Sumit. Before we come to the last caller, we have Sathish giving it another try. Yeah, this is Sathish here from Citigroup [audio distortion], EMEA now. I got two questions here. Firstly, on the Express side, if you could, like, give color on the day by day decline, is it more driven by B2B? What are the verticals that are actually contributing there in terms of B2B weight per shipment decline? You said pricing is actually holding up very well within Express and any color like by market-wise, where you're actually seeing some underperformance in pricing. The second one is on freight forwarding. Any color on what is your current exposure to the residual contracts from 2022 that you have signed with shippers that you're still seeing benefit coming through? What percentage of your volumes are still on those contracts? Thank you. Yeah. First of all, in terms of Express volume development and are there any sectors worth pointing out? I think in terms of particular sluggishness, it's probably retail and tech, what I would mention in Express as weak sectors in Q1. In terms of pricing by region, is there a region which is particularly problematic? No, I think we have a really strong core pricing discipline, and that is really true across all regions. On DGF, I think that's not so easy to answer because, as you might know, in the contract variance in DGF, in the forwarding space, generally you have some customers where you have rate adjustment clauses, either through corridors or trigger points. You have different validities of contracts. Some customers run, you know, annual cycles, but others, particularly in volatile times, also go to three or six months. I think, you know, the majority probably has cycled out by now, when it really comes to rates from last year. It's a gradual process that is influenced by those different types of adjustment mechanisms and also changing customer behavior. We surely, you know, are not surprised with what we see in terms of the GP and revenue development in the first quarter. That's in line with our expectations given where we are in the cycle for forwarding. Excellent. Sathish. Yeah. Thank you very much. Happy to chat. If I could just follow up on the freight forwarding. Again, if you could give color on this vertical exposure here where you're actually seeing much more prolonged softness in volumes versus, say, some other verticals are actually doing well? Like, it can be like industrial type customers are outperforming versus the retail customers, specifically on freight forwarding? Well, I mean, take it with a grain of salt because we are one player in that market, and obviously our share is not as big as our shares in the express market. You know, we don't see the full spectrum. In any case, with that having said that, I mean, we did see a significant weakness in tech. You know, that is not recent, but that we've already seen since a couple of months now. I think you've also heard it from these companies that, you know, in consumer electronics following the big demand during COVID, there's a certain normalization. That's definitely a vertical that I would call out, where, you know, the recovery is yet to be seen. In other areas when it comes to industrials, it is more patchy. You know, particularly out of China. I mentioned that we've seen a couple of strong weeks, where industrials seem to rebound somewhat, but it's just not consistent yet. We do expect this to remain, you know, volatile in that market, at least for the second quarter. We'll then see whether building up to the peak, which in forwarding is a bit earlier, September, October, particularly when it comes to ocean freight. Whether that then really leads to a more optimistic picture or we continue to see a year-over-year down. I think that's what we can say at this point. Okay. Thank you. Apologies again for the earlier technical issue. All good, Sathish. Glad you made it. Before we come to the end of the call with Tobias' closing remarks, we've got one final caller in our queue today. Our last question for today is from the line of Lars Heindorff from Nordea. Please go ahead. Yes. Thank you for taking my question. I only have one actually, which is a follow-up on the M&A questions earlier. I understand that you have those three criteria, but maybe a different angle to this M&A issue, if you can call it that, could be competition authorities. I mean, do you see any issues which in which that you maybe successfully make it through those criteria and could maybe take over that the target and then that there will be some obstacles in terms of competition authorities not approving the deal? If it could ever come to that point, we would not foresee big issues, but obviously there might be some single countries where in certain subsectors, we might, you know, trigger certain thresholds that then would again require a more detailed view. It's not obvious that that would be material, given the fragmentation of the forwarding space generally. But again, there are, you know, certain countries where that could potentially be reached. I don't think that that would, you know, be the biggest criterion. The extensive use of conditional language indicates that we again need to see whether first the chicken ever sees the light and then whether we like the chicken, and then we see how the authority looks at chicken one and chicken two together. I hope that provides somewhat more clarity on how we look at this topic. Which I do think brings me to the closing, if I may. Thank you for your, you know, good questions and general interest in our company. I apologize that we could not really give you clarity on the macro trends. It's not just because we wanna avoid the questions, but just that the picture indeed currently over the last weeks is a bit wobbly and inconsistent. We are happy with the performance of the first quarter overall. I think particularly the DHL divisions have shown great resilience and the operational management in the countries are doing what we like them to do, taking care of things and making reasonable calls when it comes to resource levels and so forth. That is from our perspective going well. We surely see some opportunities coming out of the current environment and also some challenges. We talked about the situation with Post & Parcel Germany, where we obviously, you know, have to look how the context continues to develop and will adjust to that. That's clearly on our agenda as well. Overall, you know, are confident that even in a continued volatile environment we can perform well and we'll be able to execute along our strategic objectives as well to ensure that the business also has some growth momentum. Right. With that, we're closing the call. Looking forward to see you over the next couple of weeks. With that, have a great rest of the day. Thanks everyone. Thank you. Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you very much for joining and have a pleasant day. Goodbye.