Welcome to the DSV conference call. For the first part of this call, all participants will be in listen-only mode, and afterwards there'll be a question and answer session. Today, I am pleased to present CEO Jens Bjørn Andersen and CFO Jens Lund. Speakers, please begin. Thank you. Good morning, everybody, and welcome to this conference call here from Hedehusene in Denmark. We are here this morning to communicate about the information about the closing of the deal with Agility GIL that we have announced this morning. We are exceptionally happy that we can already at this stage close the deal and get going with the integration. We have, after the forward-looking statements, which are a little bit more thorough maybe than normal, which I would kindly ask you to read on page number two, then we have prepared a small agenda for this morning on page number three, where we will give a few facts about the combined company, some facts about the completion of the transaction, and then something about the financial impact. We have also upgraded the financial guidance this morning, and we'll conclude with next steps and also Q&A. If I may this time please ask you to limit your questions to two. I'm sorry for all of those of you who have prepared more than that. If you have a lot more questions, you're always welcome to contact us directly. We will go directly to page number four. I think, first of all, I'd like to extend a big thank you to the teams from both Agility GIL and DSV. They have worked exceptionally structured, hard, and efficiently since the announcement of the deal back in April. I think it is a testament to the strength in administration on both sides that we can already now here sit on the 16th of August, having closed such a large and very complex transaction also. It has been exceptionally important for us to make the time from signing to closing as short as possible. It's in everybody's interest. We are super pleased about that, and we are exceptionally eager also now to meet all our new colleagues and to get going with the integration. We actually do believe that we will generate an industry leader in logistics now by combining the two companies. We will be a top-three player in freight forwarding. We are as such, not obsessed with the league tables, but it goes without saying that the larger you get, the more value you can create for all stakeholders. This is what we have seen in the past. We will also see a significant strengthening of our very successful and profitable Air & Sea operations. A lot of things attracted us to Agility GIL, and the problem when you focus on a few geographical areas, you don't talk about the others. It is a fact that Agility GIL has a very strong presence in APAC and the Middle East, which is a strong complement to our own existing network. That does not mean that we are not excited with the operations outside of these areas. I actually do believe that we get a lot of new strength also in North and South America and also in Europe. A lot of the value in a company like DSV lies in the network, and I'm happy to say that now we will be operational with our own flag, own identity in more than 90 countries in the world. It's also about generating value for shareholders, and I think we are actually in a better position to continue to do that now. We have already industry-leading margins in DSV, and we have the clear aspiration to continue with that. We also do believe that we have a certain track record, and we have experience in combining companies, and we will use all the good input that we have had and experience from previous transactions, most recently UTIW and Panalpina. We will be more than 75,000 employees, which will be able to service our customers, supported by a very strong and very scalable IT system, which is also very important to mention. You can see on the left-hand side of the chart how the network will look, and I think it is a very good picture. With that said, we'll go on page number five. It's a little bit self-explanatory. You can see the number of employees, DSV, Panalpina on the left-hand side, and Agility GIL on the right-hand side. Combination will be 75,000. Revenue in DKK. This is the last 12 months numbers, which accounts to DKK 160 billion. With a positive trajectory, we do actually believe that it will be possible to get to a higher number than this on an annual basis. As you know, it's not necessarily the turnover that matters, but more the GP and the EBIT. Air freight numbers, you can clearly see the contribution also to the existing operations that we have, very healthy at 300,000 tons and 600,000 TEUs in sea freight, which is really good. Of that, we estimate that approximately 20% is freight management, carries a slightly lower yield than what we have already. Road freight, not to forget, will also benefit from this. We see that Agility GIL doing road freight business also in areas where we are not present today and also have a decent and strong operation in some of the European countries. I think we'll see a lot of benefits of combining the volumes into one network. The same goes for contract logistics. We call it solutions. You can see the numbers. There are different ways you can calculate the size. We have used a number of square meters, where we have 6 million and Agility GIL about 1.4 million sq m. Also here, there will be a lot of benefits of combining the operations into one. With that said, I'll hand over to you, Jens. Thank you, Jens Bjørn. Good morning everybody as well. I just want to skip quickly to slide six and talk a little bit about the transaction and transaction details as well. We have issued shares in order to pay for the activities we've acquired. Agility have received 19.3 million DSV shares. For those of you who are technically very interested, we've actually issued 16 million new shares and used 3.3 million of our own shares to pay for the transaction. This gives us a total number of shares of 240 million. We could have grossed the things up and had it in two steps on the extraordinary general meeting. We decided to do it in this way, which is a structure that will end out with the same result. If we look at Agility, they will be a new large shareholder in DSV. They will approximately have 8% of our share capital. Very nice to welcome them in as well. If you look at it, they have also, as part of the transaction, been welcome to join our board in DSV. On the upcoming EGM, we will also ask for a renewal of our authorization to increase our share capital up to 20%, and we count on your support for that. We will change the name of the holding company. It's been called DSV Panalpina for a couple of years, but I think with the combination with GIL, we can, in order to streamline our presence, our branding, we change the name so that the operational entities and the holding companies are called the same. We will call it DSV or propose that this is amended. As a final note, we will amend our ESG policy on the upcoming extraordinary general meeting as well, so that we are fully compliant with all the corporate governance recommendations also in the ESG area. The transaction itself, it's an enterprise value of DKK 30 billion, and basically we've paid 21.5x the last 12-month EBIT or an EV sales multiple of approximately 1. These are, as I mentioned, calculated LTM multiples. If we skip to slide number seven, we can see what the contribution to DSV will be. Here you can see that we expect that the GIL structure will add another DKK 2.8 billion to the earnings that we have, and we will do a normal integration process. We expect that to be completed before the end of 2022. This means that we will consolidate the operations, logistics facilities, administration, and IT infrastructure, so that we run it as one company and there will be no redundant structures. If we look at basically the last details on the transaction, the costs, and also the confirmation of the numbers that we have stated here, this will all come in the Q3 announcement. We expect that we've done our diligence so that we should basically be on track with the things that we've reported, and I think the one thing that we will highlight is the number of TEUs, where we've had some discussions on the Panalpina transaction recently and where we would like to confirm these numbers so that there's no confusion surrounding that and also for the volumes in the other business areas as well. A little bit on the transaction, we will quickly move on to slide eight and just talk about what it's all about. I think we can all see that in 2015, we made approximately DKK 3 billion, now we expect to make, if we are in the middle of a range, more than DKK 14 billion this year. That's a growth of DKK 7 billion. This growth is basically made of an organic growth part, but also the acquisitions that we have made. Here you can see that a little bit more than DKK 4 billion or 40% of the growth, it stems from M&A, the remaining DKK 7 billion, they actually come from the development that has happened within the joint companies. It is tremendously value-creating when we are doing this, you can also see that the overall operating margin of the company has increased significantly. This is because we've gotten better within the divisions, but also because the mix is different and we now have a much higher proportion of Air & Sea volume than we had prior to the transactions that we've mentioned here on the slide. We move on to the next slide, we've upgraded our guidance today. We've had many conversations about that also on the last quarterly call. The reason behind this is that we've seen stronger growth, which is a very important factor. Of course, also that the yields, in particular in sea freight, continue to be higher than we had anticipated when we gave our last guidance. These are our changes, the major changes. Then, of course, we have added the GIL income as well to the numbers, and that's how we arrive at a range between DKK 13,750 and DKK 14.5 billion in EBIT. The next steps on slide number 10. Actually, when you read the announcement, you can see that there's a couple of jurisdictions, outstanding minor jurisdictions, where there's a little bit of a longer process and where we've handled this from a legal point of view so that we could actually continue with the integration. This is normal, at least for one of the jurisdictions, that this happens like this. The next step coming up is the extraordinary general meeting, then, of course, our normal Q3 announcement where we will once again confirm all the details that we have given today. With that said, I think we are ready for the Q&A session, and the details on that you can find on the last slide. Thank you. If you wish to ask a question, please dial zero one on your telephone keypad now to enter the queue. Once your name's announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Daniel Roeska of Bernstein Research. Please go ahead. Your line is open. Gentlemen, good morning. Congrats on closing the deal. First question, if I may, on your DKK 2.8 billion contribution to the business from GIL. Could you split that into the underlying performance and a range of synergies you're expecting to realize in the acquisition target? Secondly, churn has been, as you said, a concern in the past, but could you give us some broad overview what you're thinking currently in terms of churn? I noticed that you mentioned there's about 20% managed freight in the sea freight business. Anything to call out on air freight? Any color kind of on how you're thinking about the business mix of the acquisition would be helpful. Thanks. I think what is important to note right here is, and this is a very deliberate communication from our side, is that we will have a contribution of DKK 2.8. We are still, I don't even know if it's day one, it's day zero. We need to quantify exactly what the split will be. We have a fairly good idea and you need to, at this moment in time, to see this as one. I think that is the most important thing that we can say that we will have a positive impact from the acquisition of DKK 2.8 billion. We think it's a more positive way of communicating the transaction. When it comes to churn, we don't expect any material churn. We have very thoroughly been looking at the business, and it's very similar to what we do in DSV. We enter the company today, and of course, if we see something that changes this, we will do the right thing, but we have prepared ourselves really, really well. It is correct that 20% of the number of TEUs do carry a lower profitability, like what we normally see with managed freight contracts, but we are fine with that. I think we can say, as normal, the business can still cope, or the business case can still cope with an up to 5% loss in GP. We'll of course, try to make sure that it will be less than this, but we always need to leave room for something also unexpected to happen when we do a case like this. Overall, I would say it is our expectation that we will see less churn actually, in this transaction compared to what we saw with Panalpina, for instance. Great. Thanks. If I could follow up on the first one, because it is different from the past acquisitions you did, where you went out with a synergy target. Is it just difficult at this point in time, given the market environment, to separate the extraordinary performance this year, the headwinds, and the synergy? We have an exact number in-house. I just hope you will appreciate the fact that when you are standing in front of integrating a big company and you also need to motivate the people, it can have a little bit of negative flavor if you talk too much about cost synergies also, saying that this is the most important thing. We want to sew together a more positive story towards the new colleagues that we get in. Maybe also think into the fact that things have changed, so the mix of the positive contribution could be slightly different. Agility have had a good development in the GP. We could actually commend them for doing a great job in terms of cost control in the last period. These things offset each other a little bit. I think the most important thing is the contribution, and you should not put too much emphasis in the slight change in our communication. Interesting. Thanks very much. Thank you. Our next question comes from the line of Cristian Nedelcu of UBS. Please go ahead, your line is open. Hi. Thank you very much. Just two short ones. The first one, could you remind us what are the updated targets for the second half in GP per unit in Air & Sea, and maybe in volume growth? Secondly, we're seeing a big air freight rate in China starting to move up with these recent lockdowns there. Could you remind us what proportion of your air volumes are touching China and what you're seeing there these days? Thank you. It's about a third of the volumes that originates from China, from the Far East on air freight. The GP per unit, yes, you're right in saying we've seen a very recent development. We talk about last week only, some disruption out of Shanghai Airport. We still need to see how that materializes going forward. It just tells us that these markets are super volatile and unprecedented in nature. We do actually believe that air freight volumes can grow between 10%-15% the second half of this year, and sea freight, maybe on a good day, up to 5%. Without going into too many details, air freight yields, we assume around DKK 8,000, and for ocean sea freight, somewhere between DKK 3,600-DKK 3,700 per TEU. Understood. Thank you very much. Thank you. Our next question comes from the line of Michael Rasmussen of Danske Bank. Please go ahead, your line is open. Yes, thank you very much. Also congrats from my side. First question is on slide number five, where you compare the revenues of DSV and GIL. I noticed that when you initially reported the acquisition, then comparing those numbers with what we see today, then I see that the total revenues are up by 11% on a 12-month rolling basis, which I guess is no surprise given both the results that we've seen from DSV and also the rates picture right now. What seems to be a bit of a surprise to me is the fact that road freight revenues have actually gone down from DKK 2.6 billion in the past 12 months to now DKK 2 billion. Can you please tell us what is going on here in terms of road volumes? My second question is if you could add a little bit more flavor on the integration costs. I do know that you've said you will give us this number at Q3, but just in terms of the timing of it, and also, I think at Panalpina, you said that look for one year's synergies, and that is roughly the total number. Is this also the same on GIL? Thank you. Yep. Perhaps I should answer that. I think if you look at the 12 months, we had the 2020 number at that time. That was also impacted by COVID last year. You're quite right that now we have the LTM numbers, and obviously the second quarter is where it was most impacted last year. Now you have a very busy quarter, of course, that means quite a bit for these LTM numbers. When it comes to road, at that time, we had estimated DKK 2.6. Now we have rounded down to whole figures, I think we are currently at DKK 2.2-DKK 2.3 on road. Yes, when we've got the final numbers, when we've got them updated, when we have been in and had as much clarity on it as we can have, because you have to remember, it's outside and in. We've come to a little bit of a lower number. Given the size of the company, we thought we don't want to have commas on this slide, but perhaps we should have anyway. This is a little bit on that. In general, when we integrate a company, you're quite right. That synergies are typically in the cost in relation to the synergies. They're typically in the same vicinity as the synergies that we expect to realize. The timing of it, I think the integration will basically run with a similar process to the integration of Panalpina. We will kick off quickly, and then it will run into 2022 and probably be finished in Q4 2022. A very similar process. In our diligence, we have basically gotten that confirmed that that should be possible. Okay, great. Thank you so much. Yes, I do obviously understand that you did a bit of rounding, but I was just still surprised with road revenues gone down from even if it's DKK 2.6- DKK 2.2 in this environment that we've had in the past. It's an estimate. four quarters. You have to remember, it's an estimate. Yeah. They account and have their divisions and their structure in a certain way. When we then come in and do our diligence, then we say, "You put it in this pocket, we put it in another pocket." I don't think you should expect that their volumes in general have declined, but we might have labeled it a little bit in a different way. I think that's more the way you should look at it. This is always what happens. Companies, they have different definitions of things and the way they account for things. Don't worry too much about it. Nothing has gone. I think everybody are busy these days. Okay. Well understood. Thank you very much, guys. Thank you. Our next question comes from the line of Sathish Sivakumar of Citigroup. Please go ahead, your line is open. Thank you very much. I got actually, yeah, two questions. Firstly, on the GP per TEU, GP per ton. You said about, yeah, 8,000 in the air freight and around 3,500, 600 in the sea freight. What is your implicit assumptions for Agility, actually, that DKK 750 million upgrade that is coming from GIL? What is your rate assumptions there? The second one is around the customer concentration and what has been your dialogue so far? For Agility, who is the top two customers for Agility? Is there any significant contract that is actually coming up for renewal or negotiation in the next three months? If we take the Agility assumptions, Agility have realized a little bit lower yields than we have in DSV. It's not dramatically much, but they are slightly lower. Of course, our estimations, they include those numbers as well for the year, so that you don't have to sit and split them up. That's also the reason why we have given the range, so that we see exactly how that pans out. As you say, it's probably in the 3,600 area we talk about for sea freight for the global company, and then a little bit, perhaps in the lower end of the DKK 8,000 per ton. That was that part. The other part was the large accounts. If we look at the large accounts, some of them overlap, but in general, we also get new, what can I say, accounts in. For such a large account, it's not like it's, what can I say, one contract. You would typically have a master agreement, and then you'll have a lot of sub-agreements for different services that are provided throughout the group. Of course, it's normal that you have rate negotiations up till a year, and this was also, for example, the case on Panalpina. Then you will have other types of contracts that have a longer duration. Typically, what matters is that you meet the customer and that you introduce the new and combined entity, and the capabilities that we have, and that we get a good rapport into, what can I say, their structure, so that they get confident and basically see themself with us as a new vendor. We've typically been very successful at that in the past and have managed to keep the volume within the company. Okay. Just to clarify here, so you did have a conversation with all of GIL's big customers, and that goes into your assumption of current rate? You cannot do that until you've closed the transaction. That is prohibited by the competition authorities. I don't know if the mail has gotten out now, but I think we've already communicated to them and we are reaching out to all of them. This is extremely important that we do this immediately. We have an overview of all the customers, the clients of Agility GIL, but no names. We don't know the exact brands that lie behind. We know more or less, the relationships and which verticals they lie within. As Jens Lund said, this is one of the things that we are not allowed to discuss. Another reason for this period to be as short as possible, and it has been this time. I don't think you see a lot of transactions with the magnitude of this one being closed a little over 100 days after it was announced to the market. Okay. Thank you. That's quite helpful. Thank you. Our next question comes from the line of Lars Heindorff of SEB. Please go ahead. Yes, thank you, morning, and thank you for taking my questions. It's regarding the earnings contribution from GIL this year, which you state it's DKK 750 million. First of all, is this the organic run rate you can call that in the EBIT, from GIL, or are there any synergies or anything else included in that number? It's approximately 1/5 is synergies and 4/5 basically the contribution from normal income generated by GIL. Okay. -kicking in already last this year, but of course, limited. Yeah. No, what I’m trying to get at is just the run rate in terms of the EBIT. If I take DKK 600 million, say that, and multiply, it would suggest around about DKK 1.6 billion in EBIT last 12 months, if you can say that’s a run rate, which suggests an EBIT margin of 5.5%. Is that roughly correct? You are good at math, Lars, so I guess you can calculate that yourself. Perhaps have a little bit lower number. All right. In the EBIT they have generated this year. It's approximately correct, and you come to this margin, 5.5%-6%, depending on how you see the revenue. Okay. All right. I know there was a previous question about these things here, but just to follow up on that. It's regarding the 20% freight management in Sea Freight that they have. As far as I understand, you've disposed, or you maybe closed down some of that you bought in connection with the Panalpina deal. Maybe just a bit more flavor on how you view these things. I know you have some of that in your existing business as well, but I don't know if this one here, these freight management contracts are different from what you already have. To our knowledge, they are very similar to the ones we have. We've not identified anything in GIL at this moment in time that we do not want to keep. We are super excited about all the volume that they have. It can have a different earnings characteristics, but it will also have a different cost component associated with running these businesses also, which is important to say. It's much larger volumes and less work. What is important for us is not to get too focused on the number of TEUs exactly, but the GP that the business carries, we're very happy with that. Agility GIL has also fared well in this period of time, like most other freight forwarders. We are happy about it, and we have no intentions of terminating any business in Agility GIL. Okay. All right. Thank you, Lars. Thank you. Our next question comes from the line of Sam Bland at JP Morgan. Please go ahead. Hi. I have two questions, please. The first one is just on the DKK 2.8 billion by 2023. Is there some sort of organic decline in profitability assumed in that? Basically, if I took current trading plus your synergy expectation, I'd get a higher number than DKK 2.8, and then there's some decline. Maybe these unit margins are expected to normalize in the midterm. You might not be able to quantify, but whether you could sort of confirm whether there is or isn't. The second question is, obviously, this Ningbo situation is causing all the headlines. Where the Sea Freight unit margins expectations for the full year maybe have been increased. Can you sort of tie an amount of that or an EBIT amount to that specific Ningbo situation? Is that too difficult to do? Can you just say, is it having quite a material impact on trading? Thank you. Maybe I'll just start with the last question, and then maybe, Jens, you can elaborate a little bit. I think it's going to be difficult to put much more flavor on the DKK 2.8, but maybe you can try anyway, Jens. The Ningbo is still very early days. Of course, we have to be careful saying that it has been blown out of proportions, but I'll just caution a little bit, making too spectacular. It's not the whole port of Ningbo, thank God, which has been shut down. It's one terminal. As far as we know right now, it's been one individual. The authorities are doing whatever they can to prevent the spreading of COVID. So far, and touch wood, it has not caused any major disruptions in that particular port. We are following the situations, but you're right in saying that it tells us that things can easily change also. We were not expecting anything like this just a couple of weeks ago, maybe two weeks from now, we talk about something else. It just tells us that it is an unprecedented market that we operate in, and we have to be super agile and flexible and always have the ability to change and to come up with alternatives for our customers. There was also another question before about air freight. There are certain signs also that, maybe we can see some of the Chinese origins being impacted also by COVID now again. We are keeping our eyes closed on the situation, but we are here to help our customers, and this is what customers also should expect from a good partner, a good freight forwarder, that we step up to the plate and find some solutions for them. This is what we are here for. Jens, on the two. Yeah. If you take the number of synergies that we typically report, it actually includes any decline, what can I say, in GP that we're talking about. Basically the number, we have not assumed. We've just used the baseline number and added the synergies to it. Then, of course, if there's organic growth, it will come separately. I guess you would model that as a whole for the group. That's, I think, the answer to your question. Okay, understood. Thank you. Thank you. Our next question comes from the line of [Christian Fangmann] of HSBC. Please go ahead. Your line is open. Good morning. Thank you very much for the very efficient presentation. I just have one question that relates to the guidance. I saw that the higher end of the guidance was raised by more than the lower end of the guidance, and I just wanted to ask if there's a specific reason for this. Is this related to recent developments in air freight and sea freight, or is it something different? Thank you very much. No. If you look at guidance, you can always talk about the relevant or basically the relative, what can I say, range that you're giving. In reality, you should give a lower range the further you progress in the year. I guess also that's in absolute numbers, but relatively speaking, of course, the company has gotten bigger. I think there are a number of uncertainties that we're talking about here, and that's the reason why we have a little bit higher range. I don't think you should read too much into it. Of course, the range going forward, it will be higher numbers and absolute figures. I think that's basically it. Of course, there are uncertainties out there. It's not like we can guarantee the developments in all areas, so we have to have a little bit of leeway. If you look at the upper or lower part, just see how much we have increased it, and then I think you should be okay for your modeling. Thank you very much. Thank you. Our next question comes from the line of Frans Høyer of Handelsbanken. Good morning. Thank you very much. Again, a question about the DKK 2.8 billion by 2023. I just wanted to understand, to what extent does that number factor in a return to more normal trading condition, especially regarding yields? With regard to the merger loss from listening to you this morning, I would say that you have not included any merger loss in the DKK 2.8 billion. We have factored in a slight decrease in the GP funds. You would say, again, I can reassure you that you should not read too much into the fact that we have not split up the different, what you say, elements of this. We have a pretty good idea about what we want to achieve as a combination, and I don't know if we can get any closer to that at this moment in time. I don't know, Jens, if we can say more about it. No. I think what you're concerned about is if the yields will decline. I think you can calculate the LTM EBIT if you want to in the announcement. Then, I think, if you look at that number, it's 12 months and six of them, they come from last year where the market was pretty ordinary or perhaps a little bit out of the ordinary, I don't know. Then, of course, this year, and we don't know what's going to happen, but we use this as a baseline, and when you do your modeling, if you have other, what can I say, assumptions, then you can adjust a little bit. I don't think it's going to move the needle a lot in relation to what we need to do. We are comfortable with the DKK 2.8 that we've put up. Understood. Thank you. Thank you. Just as a reminder to participants, if you do wish to ask a question, please dial zero one on your telephone keypads now. Currently, the final question in the queue comes from the line of Alexia Dogani at Barclays. Please go ahead. Your line is open. Yeah, good morning. I wanted to ask just one question on the contract logistics business of GIL. Can you give us a bit of commentary around what you've seen and whether it was in line with your original expectations? My understanding is that they're quite strong in e-commerce and quite a strong performer overall. Thank you. Yes. Thanks for also posing that question, which is a good point to remind us about talking a little bit about not only Air & Sea, because we actually do get a lot of value, we think, both in road freight and in contract logistics. Agility, GIL, they are particularly strong in areas where we maybe do not have the biggest strengths. In the Middle East and Asia, they have some really sophisticated, good operations that we look forward to getting to know. This is also capabilities, as you point out, in e-commerce and in some verticals where we are not strong. It complements our operations really well, and we have not seen anything so far that has changed our enthusiasm also about contract logistics. We had a visit from the senior management of the contract logistics division here last week, and they were very excited and enthusiastic about the combination also. We look forward to this. Thank you. Thank you. As there are no further questions coming through, I'll hand back to our speakers for the closing comments. Thank you very much, everybody. Thanks for your discipline, and thank you for your interest. If we have not managed to answer all your questions, you know how to find us. You know how to find Flemming and the IR team also. I'm sure they can elaborate on the discussions that we've had this morning. We will go into an exceptionally busy period of time right now. We look forward to it. Teams have done fantastic, and we cannot wait to get going, meeting both new customers, suppliers, and employees. We will start already this piece of work today. Thanks for that. Here from Hedehusene this morning, on behalf of everybody in the new combined company, thank you and goodbye.