Welcome to the DSV Interim financial reports half year 2021 Results. For the first half of this call, all participants will be in listen-only mode, so there's no need to mute your own individual lines, 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 very much. Welcome everybody. Good morning to all of you. Welcome to this conference call about our half year 2021 results. It's a good day today, so we have been looking forward to sharing the results with you. It is business as usual. We have prepared a presentation, which I'm sure you know where to find. If we start with the page number two, I kindly ask you to read the forward-looking statements, which is just above the beautiful DSV truck that you will find on page number two. On page number three, we have the agenda for this morning. You can read it yourself. This is what you normally get. Then I know Jens will just spend a little time talking also about the forthcoming closing of the transaction that we have done with Agility GIL. Let's dig straight into the numbers on page number four, the highlights of the first six months. I must say, the company goes from strength to strength. We saw a fantastic Q1, and we have seen a continuation of the very, very strong performance also into Q2. The results are stronger than what we expected only a little over a month ago, at least in the middle of June when we did the last guidance upgrade. Very, very strong results. I'm extremely proud of all the individuals in DSV who have worked under very, very difficult market conditions to achieve the results, which is important, in all of the three divisions and also in all the many, many support functions that we should never forget that supports the divisions. Based on a better-than-expected into the quarter, and also based on more positive view on the market conditions for the remainder of the year, we have this morning upgraded our guidance so that we now have an EBIT guidance of between DKK 12.5 billion-DKK 13 billion, which is more than what we had initially. You can see that on the slide. The regulatory approvals in relation to the closing of the Agility GIL transaction is going really well, I must say. It's progressing according to the plan. We still expect the closing to happen during Q3. It is not unlikely that it will actually be sometime during the month of August. We have recently received the approval of some of the large countries. It's public knowledge, we can say yesterday we received the approval from the European competition authorities, and we have also gotten the approval in China and the U.S. We're positive about that, and I know Jens will come back to that. Cash flow is still strong. We are still committed to our capital allocation policy, so we have also announced a new share buyback program this morning of DKK 4 billion. I think consistency in the way that you deal with these things are paramount, and we will continue to do buybacks. You can see the numbers yourself on the graph. Maybe one point which we find a little bit interesting in DSV, the EBIT result of the first six months actually surpasses the full year EBIT result of 2019, where we made DKK 6.6 billion also. I think that is a proof that we can generate value and results by consolidating this very fragmented industry. A part of the improvement, of course, comes from the acquisition of Panalpina, but also work that we have done, so to say, in the company ourselves. Page number five talks about the performance in Air & Sea. Still rock solid, an extraordinarily strong performance. Double-digit growth in Q2, and very strong results in some unprecedented and exceptionally difficult market conditions, characterized by still a tremendous lack of capacity, primarily now in sea freight. As such, there's still a lot of lack of capacity also on air freight, but in a way you can say we have gotten used to managing that. It is associated with more problems helping our customers and their supply chain needs when it comes to sea freight. You can see actually a small deterioration in the gross profit in air freight. It stems from a very, very strong Q2 last year, where we did numerous air charters with PPE. As such, it's not a big surprise. On the other hand, a very, very strong performance in sea freight on the GP side. The fact that we have managed to keep the cost base absolutely flat in the Air & Sea division, also you can see that reflected in the EBIT result and also ultimately in the conversion ratio. Had somebody told us some years ago that we would achieve a 55% conversion ratio, we would probably have said, "I challenge you on that." We're very happy about it, and we will work hard to retain the high margins as long as we can, even though we do expect yields to come down somewhat in the future. Very, very strong results. Very, very fantastic work done by the Air & Sea Division once again. Next, slide six. Some more information about air freight. It actually quite nice in a way to see that all the five quarters you can see are characterized by COVID. We are comparing now from the beginning of the COVID period. You can see yields a year ago went through the roof, more than DKK 10,400 per ton, which was not sustainable. I think that we also mentioned that at the time. We have seen a good development throughout the quarter in the air freight market. Maybe one of the important points to also address is the fact that we have, if not beaten the market, then we've had a volume development in line with the market. We can say that we have grown the tonnage by 26% in the quarter, and we estimate the market to have grown between 25% and 30%. This is also what we indicated some time ago, and you can also see that we have had a satisfactory performance during the last quarters, and this is in line with what we have indicated also to the stock markets. We do not expect that the air freight markets will return to previous yield levels in the foreseeable future. We have started to see a pickup in air travel, but it is the short-haul air travel. In Europe, we might take a plane down to Spain or France, but we are not going on intercontinental flights, and before they come back into the loops, we will see lack of capacity and consequently, we will see high rates and consequently also, hopefully at least, higher yields for DSV. Next page is. It's sea freight. You can see it's been a little bit more volatile in the upwards direction, at least in Q2. Yields of more than DKK 3,900 per TEU. It's what we would expect also in this very, very difficult market. It has been associated with great difficulties on certain trade lanes to secure capacity for our customers. We're working stone hard to help them, in a period characterized by port congestion, emergency events happening in the Suez Canal, lack of equipment and capacity. That has generated great problems. This is where a good freight forwarder, and we characterize ourselves as that they have to step up to the plate and help our customers. I think we can say that we have managed to do that. We also have to remember that we do spend more time handling the shipments and the bookings from our customers than we normally do. It could be now we will see the impact now coming from the Agility transaction. We could probably not have sustained the work with the existing cost base much longer if the market conditions were not to improve. We're happy about the performance also growth-wise. We see the same picture as we saw on air freight. We have grown the number of TEUs with approximately or with 12%, and we estimate that the market has grown somewhere between 10% and 15%. We can also tick the box on market share gains or at least growth according to the market for sea freight, which is nice because now, once again, when we get into Q3, we will somehow see some sort of pollution or impact in our volume numbers by the inclusion of the good volumes that we expect to get from Agility/GIL. Road freight on page eight. They go from strength to strength. Very strong results. We do not, what you say, measure the market share gains as accurately as we can do in air freight and sea freight. There are no really market statistics, it is our clear view that we have taken market share gains in the quarter, actually also in previous quarters, also being reflected in the top line. Rates are not as volatile in Road as they are in Air & Sea, even though we have seen an increase in haulage rates. The increase in revenue is also a reflection of the result of market share gains. We're very happy about that. Maybe, Jens, you will come back to and elaborate on some new initiatives where we have also seen the results in South Africa. We are very pleased about that, with new facilities and new operational setups, which has also impacted the performance in a very positive way in the Road division. The fact that we can grow EBIT by 82% is great, and we actually do expect also that the gross margin can continue around the 20% level, which is quite healthy. It's a very strong set of numbers, and we're very pleased about the performance in the Road division. Really well done to everybody working in DSV Road. The last page before we hand over to Jens Lund is number nine, our Solutions division. We've had a few questions about the gross profit not growing maybe as much as people had expected or, and the margin deteriorating a little bit. You have to remember, I know it's probably a bad excuse, but you have to measure maybe Solutions over a whole year, not only by each quarter. We do have more both positive and sometimes negative impacts by single events. In this quarter, we did see that the gross margin was negatively impacted by some costs related to some customer implementations. This is, of course, something we expect to be also having a positive effect in the future when you come and have a look at the GP and ultimately at the EBIT also. EBIT is up 16% and generally, we are happy about the developments. Seen a doubling almost of the e-commerce activities compared to the period before COVID, and it seems like that has stabilized now. It's something which is still outperforming the normal B2B business. We also do indicate today that we don't expect the GP margin to stay at the current level. It is not unlikely that it will increase again in the coming quarters. Both Q3 and Q4 are normally very strong months in Solutions, and nobody should be sad about achieving an operating margin of 7%. It is still amongst the highest in our industry. Well done also to Solutions, and I think with these words, I will hand over to you, Jens. Thank you very much, Jens Bjørn. I'll quickly go through the P&L on page 10. Obviously, revenue impacted both from growth but certainly also from the yield. DKK 37.8 billion for the quarter and DKK 71.5 billion for the half year. It's big numbers we're talking about. GP up 15% to DKK 8.3 billion. Of course, EBIT up to almost DKK 3.6 billion for the quarter and up 40%. That means that the cost base has been stable. That's what we've promised you, that we will drive the productivity up. We've managed to do so. Our staff have worked very efficiently producing the extra volume and also the more, what can I say, complex service due to all these disruptions in the supply chain that we are talking about right now. A fantastic achievement when it comes to that and nice to see no special items because we are out of, what can I say? The integration phase on Panalpina. Everything falls to the bottom line and I think one had mentioned this morning that we've now made more money in H1 2021 than we did for the whole year 2020 on the bottom line, and we are quite pleased with that. If we look at a few other items, some might pay attention to the number of employees. It's come up quite a bit. Here it's important to note that most of them are blue-collar employees, so it's people that do the physical handling force. We've added 1,000 employees with the acquisition of Globeflight in South Africa, so that contributes to our distribution activities that Jens Bjørn just alluded to. In South Africa, we've really made significant changes in relation to our distribution capabilities. We've moved into new facilities, got a new production system, and the organization has embraced this change, no doubt about it. I think we will harvest the benefit of that in the future. On top of that, we've also seen the acquisition of a very large automotive client in South Africa that has also added another 1,000 employees. Globeflight 1,000 and this very large automotive client, 1,000 as well. Alone, of the 5,500 blue collars, 2,000 come from South Africa. As you know, we've also acquired Prime Cargo, another 500 employees coming in on the blue-collar side here. That explains a little bit that we've done some M&A transaction and acquired some businesses as well that have driven the number of blue collars up partially. The remaining part is just the organic development. As always, I think what is important and what we have on the bottom of the page is the diluted adjusted earnings per share, up 78% since last year. We are now at DKK 37.1, and that's going to continue to develop in this positive direction. After all, that is what you shareholders look for, how much income do we generate per share. If we move to slide number 11, the cash flow statement. We can see that we've invested more in working capital. That, of course, is partially due to the increased revenue that we are having. It's also partly due to the fact that we've had a facility constructed that is under working capital that we are currently divesting, and that explains DKK 900 million. If you adjust for that, the cash flow should be in line for H1, and the facility should be taken over by the new owner at the latest in Q4. We run now the company with a leverage of approximately 1.5x EBITDA. We have issued a new bond in the beginning of July. Very solid financing with three different euro bonds with a total value of EUR 1.6 billion, where the shortest tenure is approximately six years. The latest one we issued here was actually 12. We have a very solid financial situation when it comes to that. If we skip to the next slide and go to number 12, it's our guidance. Jens Bjørn already mentioned it, that we have changed our guidance a little bit because we look a little bit ahead as well now. We've been very cautious to the yield levels that we are seeing. It looks like it's going to continue for the remaining part of the year with the high yields, and probably also into 2022. Our outlook is now upgraded to between DKK 12.5 billion and DKK 13 billion on the EBIT level, and tax rate is unchanged. We also write here that the currency exchange rates will remain at current level. If you look at the numbers, we have actually reported a little bit of headwind on that as well this year. That's also something that should be taken into consideration. If we go to slide number 13, we've bought back 7.2 million shares this year so far at an average price just shy of 1,200. It's certainly been a good deal for the shareholder that we are reducing the number of shares in circulation. We currently have a new share buyback program that has gone live today of DKK 4 billion. If you look in the right-hand corner in the bottom, you can see that the total share buybacks that we've committed this year and have executed amounts to approximately DKK 15 billion. If we do another one, which is likely after Q3, we will probably add DKK 2 billion to this number as well. We are basically delivering on our capital allocation as promised. As Jens Bjørn said, this is crucial for us that we have a very predictable capital allocation model. The final thing, GIL. What is it that we expect on that? We announced the transaction on the April 27th. We've worked hard in relation to the regulatory approvals, and we've actually obtained most of them. There are a couple of jurisdictions still outstanding. Here we are in a controlled process where there are certain deadlines that have to be met. It is not unlikely that we will be able to close the transaction sometime in August. If you look at the timeline here, we will then, once we close the transaction, give you a little bit more guidance on what we expect to be able to deliver on the combination of the two companies. Actually, I have one important note more that is a little bit out of the ordinary, and that is that we have our extraordinary general meeting coming up shortly after. We have, as part of the transaction, promised to include a member from Agility in the DSV board. We will have an extraordinary general meeting in relation to that. There will also be another important topic on the agenda, that is basically that we would like to have our authorization to issue new shares renewed. We go for a 20% basically extension of our current number of shares, it's important that we get this through so that we can facilitate our M&A strategy going forward. That's an important topic that will come up on the extraordinary general meeting. Yes. I think that was it. If we move to the next slide, you can see that if you want to ask questions, you get the directions here. I think we should move on to the questions and answers session. Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. If you find your question is answered before it's your turn to speak, you can dial zero two to cancel. Our first question comes from the line of Daniel Röska of Bernstein Research. Please go ahead. Your line is open. Gentlemen, good morning. Three, if I may then. You talked about your expectations for air rates a little bit, given the global development of passenger travel. Could you expand your view on ocean rates a little bit? Is there a risk of declining rates at some point? Maybe looking a little longer out, are you expecting any drivers for higher profitability in the ocean business this cycle, kind of in the next couple of years? You talked about the M&A. I suppose you've spent some more time looking at GIL and preparing for the integration. Any additional findings or insights you'd like to call out at this point in time that you kind of discovered over the past couple of months, the business mix, how that business will fit into DSV? Lastly, could you give us an update on your IT strategy and [audio distortion]? How happy are you with CargoWise going forward? Is there more internal development going on, and which areas are you trying to address currently when you're thinking about your IT roadmap? Thanks. I'll kick off with maybe the first two ones, and then Jens can come back on the IT side. In Ocean, it's exceptionally difficult predicting when this market will have actually stopped using the term normalized, because I don't think we will get back to what levels we were at prior to COVID, but to improve or to deteriorate. We have assumed a deterioration in our yields from current levels that is held in the guidance we have given. It's not like we need to sustain the current levels to meet the guidance that we have given this morning. We actually believe that we will go south of DKK 3,500, maybe to DKK 3,000 or something like that for some period in H2 per TEU. We have actually extended the timeframe from when we do believe that the market gets back to where it was. Where previously we thought it was going to happen during this year, we don't expect really that to happen. We think that this volatile and difficult market will continue a little bit into next year. Yeah, we have to see what happens. On the M&A front, the good thing about doing a share deal when you acquire a company is that the seller becomes a new shareholder in DSV, so we share the same interests, and that has been reflected in the preparation work. Very forthcoming. I'd like to extend a great thank you to everybody at Agility and GIL. They've been very forthcoming. Within the regulatory frameworks, of course, there are certain limits to us how much information we can exchange. We feel that we are well prepared. We have found exactly what we hope to find, a high-quality company. We look very much forward to welcoming everybody into DSV once it is possible. Business mix, geographical mix is more or less as we had expected. We also did spend a great deal of time in looking into this in the negotiation phase. Maybe Jens, IT. I think our IT strategy, we continue to develop basically our integration capabilities, the way we exchange data with our customers. We've consolidated our platform, as you know. If you look at the production platforms that run for the divisions you specifically had mentioned, CargoWise. CargoWise One is part of our stack for Air and Ocean. We use other components as well, but of course, it's the one where we do the quoting and the order management and produce the freight documentation, et cetera. It's an important part of it, and we continue to work towards further digitalization of the flows, the workflows that we have, so that we increase the productivity of our employees. We need to ensure that we have the right tools so that we can deliver the right service to the customer. There's really no sort of change in that plan. Of course, we will go to more modern infrastructure, and we continue to modernize our platform. That is in reality what we're doing. More open source, more cloud-based, more, what can I say, much more powerful computing power available. That is probably some of the things that go into the direction that we're taking. Thanks. Maybe if I could circle back to the first section on Ocean. If you think beyond kind of the current and the next year. Is there anything you think that has changed throughout the Pandemic that meaningfully changes the profitability levels in ocean freight for you, for ocean liners? Any hopes of improvement there? I cannot speak on behalf of the ocean carriers. You have to contact them yourself. I actually do believe that the truth lies somewhere between rate levels, at least what we saw prior to COVID and what we see now. I don't necessarily believe that we will get back to the low levels we saw. I think ocean carriers will do everything they can to sustain a higher rate environment, which is also not bad for us, and we don't need to see more Hanjin-like situations either. We want ocean carriers to be healthy so they can invest in new capacity also. We estimate that rate levels will stabilize somewhere between maybe what we saw before and what we see now. Excellent. Thanks very much. Thank you. Our next question comes from the line of Sathish Sivakumar of Citi. Please go ahead. Thanks, Jens. I got three, actually. Firstly, on the Air & Sea freight yield. How the quarter has actually progressed in terms of Q2? Is it gotten better as we came into June? Just on that, how is the yield performance across regions? Where did you see strength versus weakness within your portfolio or network? Secondly, on GIL. Obviously, we are approaching the completion now. What is your thoughts on the integration plan? Has this changed since your Q1 results? I.e., are we looking still towards 12 months of integration window? Finally, on the Road. In terms of the IT platform, any update on the cargo way forward? Are we on track to mid-2022 Road going live? We have some very- Thank you. Very positive news. Thanks for asking that. We will always keep the very exciting news to the end. I will ask Jens to elaborate on that later on. I'll just, on the Air & Sea yields, it's been fairly stable, actually, on a high level throughout the quarter. It's not like they have deteriorated at the end of the quarter. A good performance has carried into the end of the quarter. It's not like they have spiked tremendously either at the end, but it's been high throughout the whole quarter, and we're very happy about that. Now, of course, the big question is how long can we sustain these high yields? I can tell you one thing, as always, we will try to keep them as high as we can. On Agility GIL, I think you will have to read a lot into, you can take a lot of inspiration from the Panalpina deal. This is a smaller transaction. We are more experienced, so I don't think it will take any longer than Panalpina. We are well-prepared, but we will not preempt anything. It's not our company yet, so we will have to have a little more patience, and then we will address, put more flavor to everything once the transaction has been completed, hopefully here during the month of August. Maybe, Jens, on the, what we used to call CargoLink Way Forward, but we have a new name now. Maybe you can elaborate. It's actually called Road Way Forward now. It's not called CargoLink because the project or the magnitude of the project means that we have to rethink the processes and our service offering more generally. We've gotten live on the platform. We've had some goes at going live with different POCs. Now we have a POC that we actually believe in. We are live. We're live in a country called Lithuania, and we will do two more countries before Christmas. Latvia and Estonia will go on. The go live has been good. There's been fewer unforeseen issues than we had anticipated, that's certainly positive because that means we can focus on the next couple of countries. The POC will extend into next year, where we will then do Poland afterwards. If this is done before the summer holiday, then we know that the POC has been successful. If it is successful, and we expect when it is completed, then we will continue the rollout in the remaining part of the division. We will, in reality, have an enterprise-ready solution that can scale. It's based on BluJay, obviously, but it's also done in combination with our whole software stack that was needed. Then we will have high focus and spend significant resources on the rollout. Having such a tool in place means that in reality, it should be possible to do the same in Road as we do in Air & Sea. It's, of course, something that is very high on the agenda within our company. The Poland, rolling out Poland next year is the key milestone. The key next. The first one was to get it up and running and then make sure that the flows they work. We go cross-border. We do that with controlled volume. That's the next important milestone. Then we need to go to a country where there's a higher volume. Poland is a market that we operate in that where we have significant volume. We will now have then four countries onto cross-border, but also then with significant domestic volume. There should be nothing. I expect- We use the platform, the BluJay, in South Africa for distribution, where it handles much higher volume than the volume we're talking about here. We need the cross-border functionality to work in combination with that. When that is done, we are ready to do a mass rollout, and we will then do that as quickly as we possibly can. Okay. Yeah. Thank you. Thanks. Thank you. Our next question comes from the line of Michael Rasmussen of Danske Bank. Please go ahead. Your line is open. Yeah. Thank you very much. Three questions from my side. First on the ocean side, could you just comment a little bit on your recent rate negotiations with carriers? Were you shocked or did it work out all right, considering the spot rates that we have right now? Have you got some partnerships which you have expanded or the opposite, on some various carriers out there? My second question is on the roads business. When we speak to some of the smaller freight forwarders out there, they seem to be indicating that the volume peak is just behind us, rates really continue to be possibly even higher. Is this something that you see as well in your business? Finally, just on volumes in air and ocean. Really happy to see volume growth coming back versus the market. Just to realign expectations a little bit, how should we expect this to play out as we move into the second half? Obviously getting GIL on board, do you expect to just get into a new period of you growing below the market, or is the ambition to grow in line with the market there, despite you get the GILs on board? Thank you. On the ocean negotiations, if you ask if we were shocked, we have been shocked throughout the last many months. It is an unprecedented level we see when it comes to rates. We have seen rates we have never, ever dreamed about in the past. We have handled that. As I said, we are one of the largest procurers of ocean freight in the world, we do have certain buying power, which hopefully is also reflected in the terms that we can achieve by the carriers. Contract rates have gone up. We have seen that. It is something that we pass on naturally to customers. The tendency is also that customers are asking for more spot-related or more spot-driven market, where you actually do not gamble, and you don't really want to log in the rates. It depends from customer to customer, but we've actually managed to do some good deals. We always change volume from carriers to carriers, dependent on what terms we can achieve. I wouldn't say that the last negotiations here has caused any big changes in the suppliers that we use. We use most of the world's large ocean carriers, and we have good relationships with them. On road, it's also correct that we are seeing slowly now some sort of lack of also capacity, which has driven up rates or haulage prices, as we call them. It's not something we could not handle. We've also managed to pass that on. We have implemented a capacity surcharge in certain countries to secure the necessary capacity for our customers. We have actually, as a part of what Jens just elaborated on in the Road Way Forward project, also changed some of the material that we are using, which has also benefited both our customers and also our own profitability. I will not go into the more details, but a big truck is not just a truck. There are many different models and ways you can operate this. Volumes, yeah, we have to already apologize for the fact that transparency will not be as good as it has been. It's in the future, once we include the Agility GIL numbers. Of course, we will put a little bit of a smoke screen over the numbers, but we will try to be as transparent as possible. We do actually expect that the performance will continue in terms of market share gains. We see no reason for that not to happen. The only thing I would say is, for ocean, the time might not be ideal to go out and take big chunks of new business right now, when you have difficulty sometimes just supplying your own good, loyal customers with capacity. We need to look after our own customers before we get tempted to take big chunks. They are out there if we wanted to. We have seen volumes and customer names who are also ocean carrier customers, normally ocean shipping line customers, normally, that we have never been able to do business with. All of a sudden, they come to us also now seeking for or looking for alternatives. Of course, we try to take a little bit to establish some connections with these customers. We have to look after our own customers first. Great. Thank you so much. That sounds very interesting. Yeah, keep up the good work there, guys. Thank you. Thank you. Our next question comes from the line of Dan Togo of Carnegie. Please go ahead. Your line is open. Thank you. First, a question on the guidance. When I multiply, so say, even first half by two, I get above DKK 13 billion. Could you help me understand why second half should be weaker than first half? You have the Solutions that you state clearly will improve in second half, and maybe you should also think that when and if container rates start to soften, let's say not maybe in Q3, but maybe through Q4, when we exit the peak season, it should support your yields and GP in the sea part business. Can you help me, so say, tie these things together? Where else exactly do you see the softness in second half? That would be the first question. Second question, can you be a bit more elaborate on in which verticals you see are particularly strong? Is it still the consumer-driven verticals, electronics, apparels, et cetera, or are there other verticals coming back on? I know you are particularly strong in automotive. That was quite weak last year. Is that part of the reason why growth is also coming back, so you have easy comps in automotive? Yes. I think that's probably one place then where we have a little bit of a conservative approach. We don't necessarily anticipate that the yields, they will stay on the same level as they have done. We don't know where they will go to. They have, compared to last year, and in air freight, gone down. I know that they are a little bit higher now in sea freight, per TEU. Of course, you can have various assumptions on that. We don't want to be overly aggressive. The rest of all your argumentation, we understand very well. We are then in the fortunate situation that we will come out with numbers and adjust our guidance as we go along. Yeah. We've already now tried to extrapolate a little bit on current levels and come up with a guidance. Then if you do your math the way you do it can be that earnings, they are going to be even stronger in Q2. Let's hope that you're right when it comes to that. If we look at the commodities that we move, of course, retailing, I guess all over is a place where people spend money right now, because people can't spend money on things that they normally did, at least not to the same extent. That's certainly led to serious demand when it comes to that. High tech and other area, I guess we all invest in new equipment at home or wherever it is that we're doing it. In the companies actually to support, what can I say, the more digital way of interacting and working with each other. New equipment is needed. It can be many different things. Everything from a camera to a new computer or whatever that is taking. Then actually, automotive is probably also a vertical where we've seen an increase in demand. Some of the very big volume areas, they are certainly growing these days. I think that's a little bit on the verticals. Thank you. Thank you. Our next question comes from the line of Lars Heindorff of SEB. Please go ahead. Your line is open. Thank you. A couple of questions from my side as well. First, mainly regarding Air & Sea. What I'm looking for is a little bit of help about the productivity in the division. I assume that the disruption to global supply chains have caused not only customers, but also you guys some problems, and maybe, I don't know if you have to hand carry all those through the system or how you do it. I'm trying to get sort of a feel for what you think about the productivity. I don't know if you can give us any numbers on it, how much productivity is down, if anything at all. That's the first part. Actually, Lars, productivity is actually up, because volume is up and cost is flat. Headcount has been flat in the recent quarters. If you start to measure it on working hours, then you have a point. Productivity is probably down. Because of the fact that you say, you're absolutely right in saying that we need to hand carry the shipments in a much great deal way than what we used to when we could just give an instruction, "Pick up 50 containers, please, on that day and deliver them at this location on that day." You would just assume that it would happen. This is definitely not the case this time around with blank sailings, and you always have to be alert and first ensure that you can get the capacity, and then once the booking has gone to a shipping line, also ensuring that the freight is actually being moved. In all the cases, multiple cases where that is not happening, then find solutions, alternatives for your customers, that being air freight, trucking to Europe, train or alternative carriers. This is what a freight forwarder can do. He can use another carrier. You cannot do that if you are a customer directly with a carrier. There are also certain limits as to how long we can sustain this. We are asking a lot to our staff, and they have really stepped up, as I said, to the plate. Now we will combine ourselves with Agility, GIL, and we can look at the productivity as one. I don't expect that we will see a deterioration, but it's definitely a KPI that we have our eyes very fixed upon. Okay. In an environment with less volume growth, would it then be challenging to continue to improve that productivity? No. It's not static. We all talk about this environment. Of course, that's also the truth. We don't talk about all the other things which are happening at DSV. We invent new ways of working, new technologies being taken into consideration. I'm sure even in the U.S., we get fewer telefaxes now than what we used to. We get more electronic bookings. We communicate internally in more sophisticated ways than we did. That kind of offset a little bit the negative impact that we see from the market conditions also. I think we are in good shape. Now when we get together with Agility, GIL, as I said, I'm sure that we can see a continued improvement in the productivity. Okay. The second part is on Solutions. You alluded to this yourself in the presentation, and I think Jens touched a bit upon it about some of the blue collar and extra staff in South Africa as well. I'm trying to get a better feel and understanding because, unlike as we have in Air & Sea, we have some data points that we can track in terms of rates and volume, et cetera. We don't have the same possibility of tracking the development in Solutions. If you go back maybe two or three years, on a quarterly basis, actually it's been fairly lumpy, both growth, but also earnings in general. I know it's been going up very significantly, but still, I would say relatively lumpy. Is this caused solely by startup, new customers, or are there anything in terms of the execution? The deterioration on a sequential basis in the gross margin, what is that caused by? No, I think if you look at it, Lars, if you said we grow 16% on a quarter, then it's correct that once we have gotten, for example, Panalpina's volumes in, or at that point in time, UTi's volumes in, there were, what can I say, quite a few bleeders in some of these volumes that we acquired. When we fix them, of course, then you have some fluctuations in it. On top of that, it's always been a little bit cumbersome when we have to implement very complex workflows on large accounts that we take over. That then leads to fluctuations in the earning. It's not unusual that you lose on a very big account, a couple of million euros in a startup phase, it's typically then a customer you will have for 10 years or even more sometimes. Of course, you have to invest in the ramp-up and taking things over. I guess from the outside, it might look a little bit, I don't know, you call it lumpy, I would call it bumpy as such. It's not many years ago that we made, let's say, DKK 300 million in Solutions, and I think this year we can comfortably say that that's not the case. A practical example, Lars. You take on a new customer, you in your calculations, you estimate you need 400 blue-collar workers. You put in 400, you might put 420 in. Service levels are not up to snuff. The customer's not very happy. Before you know it, you have 500 blue-collar workers to get a satisfactory level. The month after, you might be 485, then you might be 475, and maybe 12 months down the line, you are back to what you actually expected. We are constantly trying to improve on this, but it's just a matter of fact that this is a problem. On a, like Jens said, a 10-year period, it's still the right thing to take on these customers. It is larger and super sophisticated solutions we're also doing for our customers. If you sit and look at it, I think the seasonality, we will definitely make a higher margin in Q3 and Q4, like last year, and I think that's also been the case historically. I actually think that we've made significant progress on solutions. There's still some ground to cover. We put in more and more automation. The startups, they are going to be more and more complex. We will start now the largest automation that we've ever done here in October. That's probably also going to be challenging in the first phase. We drive it forward, and I think that our capabilities, they are much stronger than they've ever been before. Yeah. No, I'm not in doubt about that. It's just as you point out from the outside, maybe not lumpy, but then maybe a decent sense of growth, a bit bumpy. Bumpy it is, Lars. All right. Thank you. Just make a line over time, then I think it looks okay. Yeah. Last one, short, on the roads. Given the congestion in sea and maybe also to some extent in air and the ripple effects, and the still ongoing strong volume growth that we see also in Europe, any signs of any tightness in the capacity, or any risk? Which, historically, there's been a few quarters where you've been experiencing difficulties getting drivers, and that has caused maybe, at least short term, a little bit of pressure on the gross margin. Any signs of that? No, not to a large degree. Of course, in a few markets we might see a lack of capacity, rates temporarily spike up without us being able to pass them on. On a divisional level, as I said, we expect the GP margins to retain or remain at the current level. We have a strong momentum now in Road. We have not seen all the effects of the work which has been conducted in Road, so there should still be more to come. Normally, a high rate environment is a better environment also for DSV than a low rate environment. We are comfortable with the development in the Road division. Okay. All right. Thank you, guys. Very helpful. Thank you. Thank you. Our next question comes from the line of Hans Høyer of Handelsbanken. Please go ahead. Your line is open. Yeah, good morning. Thank you very much. Question, I have to come back to these challenges in your guidance for the second half. It sounds like you are factoring in a decline in yields both in sea and in air compared to the levels recorded in Q2. Maybe you could be a little more specific about the scale of the levels that you factor in the top and bottom end of the guidance. Second question. It's very good to see the organic market share performance in Air & Sea now beginning to be neutral versus the market. Hopefully, the idea is to leverage increased competitiveness of your service offerings after the integration of Panalpina and to actually gain market share organically. Is that still the game plan? Does it work? Do you see the competitiveness of your service offering having improved to such an extent that you can deliver organic market share growth in Air & Sea? 100%, Hans, committed to taking market share. You can clearly expect that from a company like DSV. It sounds maybe arrogant, and we are humble, but we are one of the world's largest freight forwarders logistics companies. If we should not take market share, we have not done a good job. It is still profit over growth. We've talked about this a million times. The easiest thing is to outgrow the market, but of course, profitability needs to follow. We have so many ways to out-compete the small mom and pops right now. We would clearly expect that we should take market share. This is also what we have seen in the aftermath of other transactions, then we have been able to outgrow the market. Back to the yields, of course, if you're a dart player, you know you throw 100 darts against the board and you expect to hit bullseye 100x, then you are right, then the guidance could probably be higher. You also need to assume that something can actually also go in the other direction. To answer your questions more specifically, we have included in the guidance yields around DKK 8,000 for air freight and around DKK 3,200-DKK 3,300 for sea freight yields. If yields will continue to stay above that, and if growth continues at the same pace, then you could have a point that we are conservative. We think that assuming to hit 100 bullseyes is also a little bit too optimistic and you could also rightfully criticize us for that. I wouldn't criticize you. I thank you for the clarity of your responses. Thank you very much. Thank you. Our next question comes from the line of Sam Bland at JP Morgan. Please go ahead. Your line is open. Yeah. Thanks. I have two questions, please. First one is just following on from that last point. Obviously, we're watching sea freight rates keep on going higher and higher. Obviously, freight rates aren't exactly the same as unit margins. Is there a reason why the unit margins can come down even if the freight rates move higher? I don't know whether that's sort of lower-yielding types of products coming back into the mix or something else. The second question is on this extraordinary general meeting, the 20% share issue authorization. Is there something different about that to what you've done before, whether it's just the size or whether you'd need, I don't know, fewer subsequent authorizations if an M&A transaction came up in the future? Thank you. Quickly on the sea freight, actually you would normally say the higher the rate, the higher the yield. It's not like the high rate environment would be against DSV in terms of deterioration in the yields. It's just to be a little bit on the safe side that when we get to maybe the end of the half year, that rates could start to drop and consequently also yields, and that the whole system settles somehow. That we could come into a situation where maybe some of our competitors, you never know what happens, they start to become more aggressive. It's just to be a little bit on the safe side that we have assumed that yields come down. When you have the highest yields you've ever had, it's very tempting to say, "This will continue forever and ever." Don't think that's the way you should run a company, either. You need to be a little bit cautious also with the assumption that things can actually change. We had the highest rates or highest yields in the industry before this spike, and now we're even higher. I can tell you one thing, we will try our best to keep the yields as high as possible for as long as possible. Maybe Jens on the 20%. We've had authorizations sometimes that have been higher than 20% as well. 20% is basically what you can do in line with EU regulation without issuing a prospectus these days. The reason why I call it out, or there's a couple of reasons for that. One is, of course, that we saw on the GIL transaction and also on the Panalpina transaction that the vendors, they want DSV shares. In order to have the right mandate, it's just important that we have this authorization. Strategy is in reality, of course, that you have something you would like to do, but it's also that you eliminate the dependencies, so that when you negotiate, you can deal in confidence and when you sit at the table and do the negotiations. One of the proxy advisors that is there, they don't hold any shares, but they advise many shareholders on how to vote. They have gotten out with a 10%, what can I say, limitation for a new issuance. The problem is, of course, then that it is a little bit against our strategy that we have less mandate, because it makes it harder for us to execute if we find other shareholders, we don't know what the next transaction will be and how that should be bankrolled. Of course, we want to work as much as we can for our existing shareholders, but for example, we think also that even if we acquired Panalpina or GIL through shares to the new or to the vendor, we still think we have created value for existing shareholders. It's to have that mandate and to have that power that we're just mentioning it here, because we know that in certain cases, these, what can I say, authorizations when people, they vote for the extraordinary or ordinary general meeting, it goes to the compliance department, and it doesn't necessarily reach the investor. That's the reason why I'm just calling it out here so that we close that loop now that we have so many on the call. Understood. All very clear. Thank you 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. Could I please ask you in ocean and air, when we look at your purchasing of capacity, could you remind us how much you are buying spot versus how much you are buying on longer-term contracts? If there is any reason why this should change going forwards considering the current market conditions and so on? Secondly, your Q2 conversion ratio in Air & Sea, 55%. Could you give us a bit more color? What was the range of the conversion ratios among different regions, sort of the best performing or least performing out there? Thirdly, maybe a long-term question on GP per unit in Air & Sea. Leaving aside the normalization of the rates, can we talk a little bit about the other drivers that are impacting the GP per units and how you see that playing out in the long term? Either it is competition, either it is mix, increase in purchasing scale, or maybe automation of some value-add services. Thank you. That's a lot of questions. When it comes to spot and contract, to give some guidance, it's close to 50/50, I would say. We have seen though with the new scale we have after acquiring Panalpina, mainly on air, but also more and more on sea. We are doing BSAs or Block Space Agreements. We have more charters ourselves. We have the legacy Panalpina charter network where we do get in and actually gain access to a fixed capacity. We are not as such speculating massively into filling capacity, so we have run the risks of having vacant capacity, but this is maybe something which will change. It's an evolution where we need to maybe change the procurement strategy in DSV just a little bit going forward, where we do take larger Block Space Agreements with both air freight and sea freight carriers. I know Jens will talk a little bit about the regions, but on the GP per unit, there's a lot of levers we can use going forward for the GP to increase. I think the size, the buying power of DSV is one. I don't think as such the competition will change dramatically. There will be some consolidation in our industry, but there will still be a fragmented industry. Competition will still be very hard. Of course, automation, the productivity will increase. You will more probably see that, and maybe not as such on the yields, but on the conversion ratio, we will be able to handle more shipments per employee going forward as we digitalize the workflows that we have. For a long period of time going forward, there will be ways for us to improve the margins in respect of how we operate. I don't know, Jens, if you have any numbers on the regions. If you look at the conversion ratio, it's clear that it's higher in the Asia Pacific area and in the U.S. as well, and then of course in what we call Europe and Middle East and Africa, it's a little bit lower, the productivity. If you look at that, and it's been like that for years, actually. I think that is what we can say about that. I think actually, all areas have improved over time, and they are at an extraordinarily high level here in Q2. We will now have to see how it pans out the next quarters. If you look at our long-term guidance, we have said higher than 47.5% for the air and ocean part. They are allowed to go higher. It's not illegal in our company that they have a higher productivity than that, and we are actually very pleased with the way that they operate. Thank you very much. Thank you. The final question comes from the line of Alexia Dogani of Barclays. Please go ahead. Your line is open. Yeah, good morning. Thank you for taking my question. I'll keep it short. Firstly, on the GIL performance to date, should we expect that they are benefiting from similar trends to DSV, and so most likely, the view in April has strengthened over the past couple of months? Secondly, on conversion ratio, from the comments you just made, should we therefore expect to see maybe the mix changing a little bit of how the conversion ratio is driven, but that levels shouldn't necessarily retrench too much post-normalization? Finally, I just wonder if you had any comments on the air cargo market once passenger belly hold capacity comes back. Do you think the provision of capacity has structurally changed? Do you expect freighters to be a bigger part in the future than it was in the past? Thank you. Yep. Thank you very much. Again, three very good questions. On the GIL performance, we cannot comment too much on that. We have the information, but we are not in a position to share that with you. You have to take maybe inspiration from what is happening in the industry, and then you make your own assumptions what is happening. We will, as Jens has said, come back with more solid information once the closing has been done. We think it's a little bit inappropriate to comment on a company which is not ours yet. It will be soon, and so a little more patience and then we will get back to this. Air freight, it's again a little bit speculative, but you're right in saying that some structural change could happen. We have grown very happy with the freighter systems that we have, at least in DSV, and we expect to continue to develop that. In the future, I actually believe that if you compare to the period, a lot of things have also happened in DSV, not least the acquisition of Panalpina. If you look back to the period before Panalpina, then, two, three years out in the future, I would expect that we would use more freighters than what we did in the past. We have more volume. We are better at utilizing this equipment. Actually, the service the customers are getting on the freighter service, it is a premium, deluxe, what you say, service, which is very, very good. It's something we are proud about. Conversion ratio, Jens, anything to? No. Of course, now we produce extra high GP. We have very high yields. Our staff have worked really hard in order to do so. Normally, what will happen is then that it gets less complicated, so the yield will come a little bit down, but hopefully we will produce more shipments then. Where the GP balances out, right now we have a little bit more than 20% in GP, and we've had that for a long time. We will have to see. What you can count on is that we drive the productivity up, me and Jens Bjørn talked to it before, we talked about digitalization, and that we will continue this. I think, the regions or the areas where we operate are very similar to GIL's. This is typical for a company like this. The only thing that is different about GIL is that they have a larger footprint on Road and Solutions in the Middle East than us. Apart from that, it's very similar to us. I think we will continue this development, and we've never really had a long track record of going back from productivity levels to lower levels, at least not in the 20 years I've been in the company, and Jens Bjørn has been there longer. He's shaking his head, so he can't remember it either. I cannot even remember how long I've been employed. If you look at that, I think we will continue to drive it forward. That is actually the reason why when we did the financial guidance that we said higher than. When we buy a company, it will come down initially, and then we will merge the companies and then typically we will end up with a higher productivity than we've ever seen before. We plan to do the same also with GIL. When that materializes, we will see what then happens. Excellent. Thank you. Thank you. As there are no further questions on the queue at this time, I'll hand back to our speakers for the closing comments. Thank you very much, everybody. Thanks for all your very good questions. It would be a little bit to my surprise, but if we have not been able to answer all your questions, then you know how to find us. Find the contact details of Flemming and the IR team on our webpage. If you have any investors who want to speak to us, please reach out as well. Once again, we are extremely happy and proud and satisfied with the performance of our company. I think the future looks good. We are excited about welcoming a lot of new, good skilled, talented colleagues into our company from Agility GIL. We will become a stronger company together than what we are as two individual companies. We will get back to you before you know it with more information, when we get to the closing of the deal of Agility GIL. Until then, we will wish those of you who have not finalized your summer holidays, a continued good summer, and we will speak to you later. Thank you and goodbye.