Ladies and gentlemen, welcome to the DFDS Q1 report 2024 conference call. I am Dobbin, the Chorus Call operator. I would like to remind you that all participants will be in the listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it is my pleasure to hand over to Torben Carlsen, CEO. Please go ahead. Good morning, and welcome to DFDS's Q1 2024 conference call. I'm joined by Karina Deacon, CFO, and Søren Brøndholt Nielsen, Head of Investor Relations. As you've seen from our Q1 report, we are on track to deliver on our outlook for 2024. The one result is ahead of our internal expectations, even though it is below last year's Q1 results. Before we dive deeper into the Q1 report, I would like to start with a strategy update, turning to slide three. On the right hand... On the left-hand side, you see the, sorry for that. On the left-hand side, you see our strategy headlines, unlocking value from our expanded network, the green transition and the financial ambitions we are working towards. With the recent agreement to acquire Ekol Logistics International Transport Network, we have fulfilled the planned network expansion into high-growth markets, namely Turkey and Morocco, and we are now shifting focus to organic growth. Our competitiveness is supported by our strategy to standardize and digitize with a number of specific initiatives underway. To move the green transition forward, we have ordered another 100 e-trucks, and our planning for a freight ferry corridor powered by ammonia is now so advanced that we have submitted the funding application to the EU Innovation Fund. Turning to slide four. You see the financial ambitions related to our Moving to Green towards 2030 strategy. The short-term ambitions for 2024 to generate an adjusted free cash flow of DKK 1.5 billion is on track, as is the CapEx level. As you can see from the right graph, our primary challenge is to raise logistics return. Ferries ROIC is trending at around 9% and was in Q1, reduced by a tough competitive situation in the Baltic Sea. In logistics, the key challenge is to turn around the Nordic and continent cold chain units. For the last six months, we have not achieved the desired traction in the turnaround, and in March and April, we launched a number of boost projects to enhance operating efficiency. So to sum up, while we are comfortable with our outlook, we continue to focus on improving profits through operational efficiencies, as we are not expecting significant tailwind from markets. With that, let me move on to the quarter, turning to slide five. Here, the headlines are that there's overcapacity impacting our results. We see freight ferry volumes picking up in several areas, but as mentioned, Baltics and Channel seeing overcapacity and impact to pricing. The passenger results has improved as the last passengers on the UK, France business returning after COVID is impacting positively. And as mentioned, a challenging quarter for cold chain logistics with a mixed volume picture across our land transport markets. We do see that volumes are getting a little firmer. We see that the lower capacity on Channel and Baltic Sea will continue, but that the road transport lower capacity is reducing lately and hopefully we'll see better match between demand and supply in those markets for the next quarters. In terms of network, we added, of course, the Strait of Gibraltar. That's a very seasonal business that also impacted negatively Q1 when comparing to last year. We have now finalized the agreement to acquire Ekol and expect closing in Q4 2024. Turning to page six, EBIT is lower than last year, but ahead of expectations. As I said in the introduction, revenues are up, primarily driven by acquisitions, but still a small organic growth when adjusting for those. We are down 25%, sorry, 45% on our EBIT from both divisions. We'll come back to the details. The ferry EBIT is reduced DKK 169 million despite higher passenger earnings that could not offset the lower freight results. Logistics is lower due to the challenges mentioned before, somewhat compensated by acquisitions or offset by acquisitions. So with this, I will hand over to Karina for more details on the results. Yes, let's look at the page seven on the income statement. Revenue growth, I will detail in a little while, so, so not dwell on that. As you know, we have, from the beginning of 2024, put more emphasis on EBIT, but if we just stop at EBITDA first, you will see that, it was down 2%. We saw higher EBITDA in logistics, also impacted by acquisitions, but, but that was offset by ferry and non-allocated costs. If we then look at the items below EBITDA, we saw a, quite significant increase in depreciation. It increased at 26%. It was not a surprise to us. It was a, mechanical thing. Some of them, I will remind you of the impact of the Jing lings that we sold last year, where we have, in the quarter, about DKK 25 million, and that will of course continue for the coming quarters as well. In addition to that, depreciation is impacted by acquisitions, both in logistics, but also FRS in ferry. Finally, we had increased docking depreciation. We had, during the COVID time, we had reduced dockings. So when they started to pick up, and in addition, due to inflation, they were more expensive than what we have seen historically, then we also get a higher charge from these dockings. Let me just remind you that the way we depreciate dockings is that normal dockings are depreciated over the time spent until the next docking, meaning that it's about two to 2.5 years if we look at it overall. On amortization, a slight increase also due to acquisitions and the PPA we do in that connection. And on the finance side, in line with what we have seen in 2023, we were impacted by higher interest rates compared to the similar quarter in 2023, and then we also had a slightly higher net interest income. Turning to page eight on the revenue growth. As mentioned, an increase of 11%. If we exclude acquisitions and also the charges of the BAF, then we had an organic growth in revenue of 2% across the entire DFDS. Passenger revenue increased 22%. It was mainly driven by the channel, where we saw a quite significant increase in the number of passengers. So with channel now coming back to higher levels, we are now in Q1 at a level which is similar or even above Q1 2019, i.e., before COVID, and that goes for all our passenger areas. In addition to the increased number of passengers, we saw an increase in the duty-free on the channel routes, which also helped to increase the revenue. Freight ferry revenue was positive and reflected a net impact of the higher volumes and the lower rates that we talked about, and also the lower BAF. Logistics, we saw a decline organically of 2%. We saw in some of our routes lower road transport volumes, and then there was also an impact of the cost charges. Finally, the acquisitions, a rather large impact because we have both the impact from McBurney last year and also the Strait of Gibraltar coming in in January 2024. Turning to slide nine on the ferry division. We saw a lower EBITDA in the ferry freight, and that was driven primarily by lower results in the Baltic and Channel, where we do have the overcapacity, hence also price pressure. In addition to that, we did expect, and we also explained that to you, that Q1 would be negatively impacted by the higher spreads on the bunker, which we saw in Q1 2023. So we did overall have a higher net bunker cost in 2024. Volumes up 4% after a positive development on all our routes. But as mentioned, again, to account the lower rates, we didn't see the full positive impact of the increased volume. Passenger earnings, as I mentioned, significantly driven by the channel. Then if we turn to slide 10 for just a few words on the logistics. As we say here, it was a mixed result. It was a challenging market. Several areas we saw overcapacity and competition, which impacted the prices. We saw a decline in volume both in the dry business, but most significantly in the cold, not least after we saw the Brexit introduction of first of February, where we now also have to have inspections of goods arriving into the UK. And just with the, like, with the other Brexit initiatives, it does take time for the market to adapt and to adjust to the new rules. The acquisitions put in here separately with the DKK 57 million were as expected, and they are delivering well. With that, turning to slide 11 on a few words on cash flow and capital. Our operating cash flow was 0.5 billion. It was reduced by working capital. That is a seasonal impact. Particular this quarter, we saw an impact due to Easter, where unfortunately, some of our also very large customers went on Easter break and said, "We will pay you when we get back in April." Of course, not as satisfactory, but implying that it's not a structural issue. So we expect to come back to positive working capital in the following quarters. We're in CapEx 0.6 billion, fully in line with our expectations, so leading to an adjusted free cash flow in Q1 of minus 0.3 billion. Looking at the LTM adjusted free cash flow, we are still at DKK 2.2 billion because it includes the inflow from the sale and lease back in the autumn. Finally, looking at the leverage, we have explained that we expected to see an increase due to the acquisition of FRS. So we have an impact now of around 0.2 here in Q1, which meant that we now saw an overall leverage of 3.2. And with that, back to you, Torben. Thank you very much, Karina. Page 13, progress across green and social targets. CO2 emissions continue to reduce in intensity by 3% across our network in Q1. We have installed a new shore power facility in Ghent, where two of our newest vessels can bank shore power with a couple of 1,000 tons reduction in CO2 expected from that. More shore power facilities are coming over the next quarters and years. We have, as I mentioned in the introduction, submitted support for a green corridor Sweden-Belgium to the EU. There will be six months before we hear news on that. We've ordered another 100 e-trucks, so that we now have 225, the largest heavy duty e-truck fleet in Europe, and 105 of those equal to those who have been delivered have been deployed by the end of Q1. In terms of gender, women's representation in management position increased four percentage points versus same quarter last year. In our safety efforts, we have improved the LTIR, lost time injuries both at sea and across our land operations, including our port terminals. Turning to page 15, total capital distribution of DKK 600 million on track. We have paid out dividend in March of DKK 169 million, and out of the expected DKK 430 million share buyback, DKK 185 million was completed by the 7th of May. Page 16, outlook 2024 unchanged and still based on an overall flat market environment. We do think that there is a rebound looming in the European economies, and in terms of Turkey, we also see indications that growth should be coming second half of 2024. On the passenger side, we continue to see that, especially on the Channel market, passengers are coming back to pre-COVID levels. Page 17, not much to report with an unchanged outlook, revenue growth 8%-11%, EBIT outlook of DKK 2-2.4 billion. When comparing to 2023, there are DKK 300 million headwind in the 2024 outlook compared to 2023. Operating CapEx, as previously said, around DKK 1.75 billion, and we will deliver the promised DKK 1.5 billion of adjusted free cash flow for 2024. In taking, what are we then primarily focusing on? Organic growth, with the network in place, with the many good initiatives we are winning customers that we were not able to compete for before. Operational efficiencies, we need to drive improvement in select areas and have started projects to that effect, as mentioned in the introduction. We continue to deliver on our green transition. Strait of Gibraltar, the first 100 days integration have gone really well, and now it's the more longer term system and process integration that is taking place. And we are preparing for the Ekol Logistics integration that we expect to take place closing Q4. With this, over to questions from the audience. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Dan Togo-Jensen from Carnegie Bank. Please go ahead. Yes, hello, and thank you for taking my questions here. Just a few ones. So if you want, on the bunker, and the spread there, it's supposedly still a negative impact here in Q1. Is it possible to quantify the amount when you compare with last year? And how should we expect the impact from this in coming quarters? That's the first question. In the first quarter, we have around up to DKK 100 million negative. Part of that's not the spread, I would have to say, that's the bunker cost. A part of it is because we're now at the Strait of Gibraltar. So a significant part of the 100 relates to the spread itself. Looking into Q2, we will also have a slightly negative impact, but not to the same magnitude. And then on logistics, on the acquisitions you've made here, are there any earn-out impacts or measures that could potentially change, so to say, the equation here that we should be aware of? And maybe some comments on how the momentum is in logistics heading out of Q1 and into Q2, just to understand whether this depressed markets, you could argue, especially in the meat industry, will continue. First, no earn outs to impact the picture. The challenges seen in Q1, primarily in cold chain, as you mentioned, but of course also with lower capacity in the dry logistics chain. But primarily the operational challenges in the cold chain are continuing into Q2. What are the outlook for this to change? I mean, is it structural or is it just a reflection of, you know, economic development? Yeah, maybe a cyclical recovery should have positive impact later in the year, or is this more structural? How should we read this? I think it's a mix. The meat markets has seen some structural impacts from Brexit. Dealing with those, I think over time, impact can be reduced. And then there are definitely also simply volume issue, and then our ability to reduce the impact from such volume fluctuations, and it's those two elements that we address as we speak. Good. And then just a final question on the Baltics. Can you elaborate a bit on the competitive situation here, and how we should read the Baltic used to be a high margin area for you. Now it seems it's somewhat more challenged on profitability. What is the outlook here for, you know, higher margins to return? As previously discussed, the terrible war in Ukraine changed the momentum in the Baltics that had very attractive growth rates for many, many years. Operators had planned with that and planned with extra capacity, and that's the situation we are now in. We are doing good in terms of protecting our market shares. We even gain market shares, but it does come at a cost with this significant lower capacity. We are trying different things to mitigate, but of course, in the end, we need a solution to the war before we will see real improvements in the Baltic. Okay, thank you. Thank you, Dan. Thank you. The next question comes from the line of Ulrik Bak with SEB. Please go ahead. Yes, good morning. Hi, Torben Carlsen. Thank you for taking my questions as well. At Q4, you mentioned that the 2024 guidance includes some headwinds compared to last year's results related to, firstly, the bunker spread, but also the sale and lease back impact and the reversal which you booked last year related to the COVID period. As I recall, you quantified the total headwind on EBIT at around DKK 300 million versus 2023. So firstly, my question is, if this level of DKK 300 million is it still a fair assumption? And secondly, what is the quarterly phasing of this headwind, please? The DKK 300 million is unchanged, and it will not change, but the phasing, DKK 200 million the first half. Okay, understood. Great. And then secondly, on your logistics guidance, if I look at the run rate for looking at the Q1 EBIT and looking at last year's EBIT, I acknowledge that you do have made some acquisitions, but given that you paint a picture of a quite challenged market environment, what are the key levers for you to reach that guidance that you have left unchanged on the EBIT for your logistics department? Because it seems to me quite ambitious given the start of the year. Well, we are, as we mentioned, ahead of our internal expectations for the first quarter, because we did factor, of course, these non-comparable headwinds into our numbers. We do need to see, of course, that volumes stay at the current levels and with some uptick from here. But that is also what you saw in our report earlier this morning out on volumes. And then, of course, we need to see that we are successful with some of the initiatives we are now having in our logistics business. But at this stage, it looks more or less as we had predicted also in February, when we first released our outlook. Understood. And then my final question is actually around your volumes, because they seem to be trending quite well and positive growth rate in Q1 and also the April volume growth of was it 10% if you adjust for the FRS acquisition? On the other hand, we saw Q1 profitability decline a bit. So in that context, can you perhaps share what your strategy is in terms of this balance between volumes and profitability? Please. Well, it's true that a significant part of the growth came from Baltics and Channel, which are, of course, the Channel, the challenged areas from a profitability perspective. And you can say in those markets, we make sure that we protect our positions, and we look at how we can reduce our costs to the maximum extent possible, on the Channel, for example, with our capacity sharing with P&O, and also abilities to potentially save money at the port. Okay, but is it a fair assumption that you are going for market share in order to boost your own utilization on the ferries, and that it's okay that it comes at the expense of profitability? Or it just— Would it make sense to not go so aggressively for market share? Would that help your profitability? Yeah. You know, that's hard to judge, but we do protect our market positions, and we've done that fairly successfully during Q1. And it does come at a rate per meter impact, but that's what we'll continue to do. Understood. Thank you. ... Thank you. We now have a question from the line of Michael Rasmussen from Danske Bank. Please go ahead. Yeah, thank you very much. First of all, I would like to dig a little bit deeper into the things that you see in the Baltic Sea, because I fully understand, obviously, what is happening here. But at the same time, we have seen volumes weak for some time, following the war, and now we actually start to see volumes picking up again. So is this because new capacity has entered the market, or is it just that the capacity is the same, but everyone seems to be fighting a little bit more on the volumes? So that's my first question. Thank you. The planning of capacity has, of course, taken place before the war, including for ourselves. So, larger tonnage is flowing into the Baltics. Of course, like we have then also taken away capacity. Others are also looking at how to optimize their operations. But overall, there's more capacity in the Baltics now than there was pre-war. Yeah, yeah, I understand, I understand that pre-war, but also when, when you compare to what we saw last year, the, you know, it, it didn't seem as much as an issue to you profitability-wise, when actually volumes were weaker now than when, when volumes are growing. Maybe you have any numbers in terms of new capacity year on year, having entered the market? It's there are ships coming in and going out. I think it's primarily, of course, how the frequency and the schedules are in the markets we operate. And there we have probably seen a little bit intensifying, but I'm not sure that the volumes are stronger this year. It's just our volumes that are better now than they were. So it is a tough market, and we've also been able to convert land-based volumes to our ships. But that, of course, comes at a less attractive rate per meter than the natural cargo, if I can call it that. Okay. Thank you. Torben, then moving on to the channel. Just looking at the market shares that you sent out on a monthly basis here. So it actually looks like you've been losing a bit of market share throughout Q1 versus both P&O and especially Irish Ferries. So could you add a bit of commentary around that? I obviously see what you're doing in terms of fighting back on pricing. So what's going on here? I think that we have gained market share versus same quarter last year, 1.5 percentage points. So we don't recognize that picture. The market- No, but, no, but Torben, I'm talking about the inter-quarter momentum during the quarter. Here, your market share on the short sea sailings is down somewhat from January through to February, whereas freight is actually down from February into March. So it's more the momentum than it's the year-on-year. But that's too short because there can be dockings and ships out, etc. I think we're very pleased with the market shares that we have around 28.5 on the freight, which is 1.5 percentage point higher than last year, and which is similar to the pre-Irish Ferries situation, pre-COVID situation. So we actually think it's going well in terms of market share. The challenge is the pricing. Yeah, and I fully understand, and I also applaud that you are investing, so to say, into gaining or at least maintaining your share over time. But should we see this as a 2024 issue, or how long should we see this margin pressure on the channel? Well, we can see that the market reduction that the channel has experienced overall for a while has leveled out. So, I think our hope is that the market, the underlying market will either be flat or maybe start growing in 2024, and that will obviously also support the pricing. Fantastic. Just my final question. On sales and leasebacks, so despite the fact that everybody seems to have been getting the depreciation levels wrong here, is this something that you find a good kind of financial tool? We should expect more in maybe in the coming quarters or the coming years, or was this more of a one-time thing? ... it can happen again. We think that will be there are participants in the market that are willing to do this at cost quite significantly below our ROIC. But we are not, you know, planning anything at this exact moment. Great. Thank you very much for those answers, though. Thank you. Thank you. Bye. Thank you. The next question comes from the line of Ruairi Cullinane from RBC. Please go ahead. Hi, yes. Good morning, Ruairi Cullinane, RBC. Yeah, firstly, on the channel, please, can we have an update as regards to the level playing field on pay and conditions as a result of the legislation being introduced in France and the UK? And then secondly, it did seem to me that freight and passenger volumes have got off to a stronger start of the year than was expected. Clearly, the outlook is unchanged. So I was wondering if anything was a little bit worse compared to your expectations as opposed to consensus expectations. Thank you. Yeah, first on the channel, legislation is being put in place by France. And I think the other operators are planning to adhere to those minimum salary levels, etc., that comes into play. So that is gradually leveling the playing field to a certain extent. But I think we are talking June-ish, when France is expected to ratify these. In terms of, and I interpret your question to be our overall volumes. They are up, and they're probably also slightly stronger than we expected, which is part of the reason for our Q1 being better than expected, although significantly behind last year. The challenge is that the markets that perform the strongest are Baltic and Channel, where the pricing is higher. Channel, obviously, already because of the short distances, the volumes there are less valuable than North Sea and Mediterranean. So, unfortunately, those stronger volumes are not leading us to reconsider the outlook range upwards. Okay, thank you. Thank you. Bye-bye. Thank you. The next question comes from the line of Lars Heindorff from Nordea. Please go ahead. Good morning. Thank you for taking my questions. A few questions regarding the inclusion of FRS. First, on the bunker consumption, which is actually down year-over-year, despite the inclusion of FRS. The consumption that we've seen here in the first quarter, that's the level that you expect to consume throughout the remaining quarters of this year? Is it down, including Strait of Gibraltar? We reduced the intensity 3%, let's see. Consumption 180,000, compared to 185,000 last, the first quarter last year. Marina is checking. Give us a moment, Lars. Yeah. We'll come back on that. But I don't... My guess is that it's not down, including, it's 3%. The efficiency on the fuel is 3% versus last year, when you exclude Strait of Gibraltar. Okay. I just, I took the numbers on the report, No, we will double check. We'll get back to you on that. Okay, thank you. And then also, regarding FRS, because you have included the lane meters in your monthly report. Now we can see how much is which is FRS, which is very kind of you to take that out, so we can maybe digest these things. But in terms of offered lane meters, how much of that offered lane meters in the first quarter is related to FRS? I think the lane meters are reported separately, are they not? For those- Yeah. Yeah, you can see them in the ferry division. Yes, yes, I know that. And then you give us the utilization, which enables me to calculate the offered lane meters, so that's a total number. So what I'm after here is what the offered lane meter would have been, excluding FRS. We don't have that number, Okay. Ruairi, if you contact Søren, he will give you those numbers afterwards. Okay. And then, just a clarifying question regarding Michael, also asked about the depreciation and the sale of this back. So, the depreciation charts that we've seen here in the first quarter, is that the run rate that you expect throughout the rest of the year? ...Yeah, it's not much out from that, so that's a best guesstimate. Okay. All right. On logistics, can you say a little bit about, I mean, what kind of actions are you taking within the cold chain? We've been talking about this now for some quarters. In connection with the CMD last year, you presented the business plan about how to restructure these things, but it based on the numbers that you've reported, it doesn't really appear that you've been progressing that much so far. So maybe a few words on that, and maybe also on the same line, how much have you changed your share of own production in logistics and in particular in cold chain? Yeah. Well, in terms of, of cold chain, we have, I guess, two primary, troubled areas. One is, one is, Germany, and the other is, is Denmark. And, and in, in both those cases, we have teams in place, to run so-called boost projects, where we, go through the whole operation and the whole commercial situation in a unit. We have done that previously with other units with, with great success. The challenges here are, are maybe slightly different, or deeper due to the, the underlying, the, the German side, also the meat market. But we are, we are confident that, that if not in Q2, then definitely in Q3, you will start to see improvements in, in those, in those units. In terms of how much we have reduced our own haulage, that's hard to give you a specific number on. But we are continuously evaluating whether we should reduce further. We have reduced, I think, 300-400 on trucks just in the Polish cold chain setup. But every month they adjust given the demand from the business units these numbers. So that's. It's no longer the problem that we have too much own haulage. Okay, so, so just to be clear, so there, there's no further plans to reduce the share of own production going forward? No, as I said, every month we evaluate that, but there's not a backlog at this stage. Okay. All right. And then lastly, on, we've been talking quite a bit about both the channel and the Baltics. Based on your previous answers on the Baltics, sounds like there's a bit of pressure in the market in general, with too much capacity. What should... I don't know if you can indicate what sort of magnitude of price declines that you have seen in the Baltics, and if you can, that, and maybe if not, then maybe just an indication of whether that will change in the coming quarters. No, we will not indicate the price adjustments. We do not think that we will see further declines. Okay. All right. Thank you. Thank you, Lars. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Torben Carlsen for any closing remarks. Thank you very much for joining the call and your many good questions. As mentioned at the beginning of the call, we are not expecting significant tailwind from markets, the rest of the year, and therefore, we are fully focused on the levers that we can actually control to optimize and improve our efficiency in operations. We look forward to reporting on progress again in August on both our short-term initiatives and our strategy priorities. Have a good day.