Good morning, everybody, and thank you for joining us today for our second quarter 2022 earnings call. My name is Søren Skou. I'm the CEO of A.P. Moller - Maersk, and I'm joined today by CFO Patrick Jany. As you've already seen from our pre-release yesterday, we delivered an exceptionally strong second quarter 2022 with an EBITDA of $10.3 billion and EBIT of $9 billion. This is a new record for us, and it's in fact the 15th quarter in a row with year-on-year improvements in earnings. As announced yesterday, we also increased our full year guidance to an EBIT operating result of around $31 billion. The upgrade is a consequence both of the very strong Q2 and based on an expectation of an equally good Q3, driven by higher than expected contract rates in Ocean. This means that our 16th quarter with year-on-year earnings growth is in the making. Our record of earnings growth over the last four years has been against the backdrop of U.S.-China trade war, the shift to more expensive low sulfur fuels in 2020, a pandemic lasting more than two years, and now a real war in Europe and significant inflation. Today, Maersk is a higher quality, more resilient, more profitable, and much faster growing business than we were back in 2016, when we started our transformation journey towards becoming the global integrator of container logistics. Our strong cash flow generation, in combination with a very strong belief in our business model and growth prospects, allows us to increase our share buyback program, and we are adding $500 million per calendar year for the next four years for an annual commitment now of $3 billion and a total commitment from 2022 to 2025 of $12 billion. Turning now to page five for some strategic transformation highlights, and I will start with Ocean. The conclusion of our 2022 contracting season was very strong and better than we expected. 71% or a little more than 7 million FFE now of our 2022 long-haul volumes are now covered in long-term contracts. 28 percentage points of these volumes are on multiyear contracts, which reprice based on rolling indices or are in fixed price contracts, providing greater stability of earnings going forward. As of today, the average contract rate for the year is expected to be $1,900 per FFE, higher than in 2021. The increase of $500 compared to our expectations at the end of Q1 reflects much better performance in Q2 itself, higher conclusion of deals in the latter part of Q2 and over the summer, a positive mix effect from higher share of contracts being headhauled than expected, and a small positive BAF effect. Anticipating the Q&A session, let me add here that we are confident about contract compliance despite spot and contract rates are now converging. Our index-linked multi-year contracts reset here on July 1 at higher levels in a smooth and orderly process. Our block space agreements with global freight forwarders contain solid dead freight language. As I have emphasized many times historically, BCO compliance has remained high. Turning to logistics. We continue to deliver profitable growth several multiples above the market growth. In Q2, we grew revenue 61% in logistics and services, 36 percentage points more than half of this growth was organic, and we now have six quarters in a row with more than 30% organic growth. Let me emphasize that our growth is volume-based and based on customer wins, not rate-based in logistics. At $3.5 billion of revenue in the quarter, our logistics business now have an annual run rate of $14 billion with much more to come. 71% of our logistics growth came from our 200 largest customers in Q2. They are clearly buying into the integrator vision and want to grow with us. We believe that we can continue to grow well above market, also in the context of a greater macro headwinds, as our value proposition has a number of differentiators. First of all is our Ocean customer base with tremendous brand loyalty and an intrinsic need for all of the container-based logistics services. Secondly, as we integrate, we aim to lead with technology that provides greater transparency, flexibility and agility than what is currently available. Finally, our control of critical assets in the supply chain enable us to provide not only superior per-service and control outcomes, but also as we decarbonize, we can provide assurance and certification, which is key in today's ESG environment. As the numbers demonstrate, our customers are clearly voting with their wallets. We currently have 400 new customer implementations ongoing, which is as much growth as we can safely handle. Growth in logistics is the single biggest opportunity for Maersk in this decade. This means that at some point in this decade, we will have a bigger business in logistics than we have in Ocean today. This quarter, we closed on the acquisition of Pilot and Senator, and the integration of both is now underway. Each broadens our capabilities in logistics in a uniquely valuable way, with Pilot giving us greater reach in managed transportation and B2C delivery in the U.S., and Senator in global air freight. Early in the second quarter, we launched Maersk Air Cargo, and combined with Senator, we are now well-placed to add the speed, flexibility, and resilience of air freight to our customers' supply chains. We anticipate to close LF Logistics within the third quarter. Assuming we close the LF transaction at the end of this month, we are on track to come within shouting distance of $15 billion of revenue in logistics and deliver $1 billion of underlying EBIT this year. Finally, on logistics, we are pleased that Gartner has named us a leader in their 2022 Magic Quadrant for logistics companies. In their report, Gartner highlighted our mix of organic growth and acquisitions to complete our portfolio, as well as our investments in digitalization and automation, and how we leverage that in our customer engagements. This is truly a certification or ratification of our strategy as we join the ranks of the largest global logistics companies. On Terminals, our Terminals business had also another strong quarter on the back of improved volumes. If we exclude the impact of the impairment of our Russian operations, we achieved a record return on invested capital of 13.1%. APMT has now improved our returns for the last seven quarters in a row. Now on slide six, and I will not belabor this slide, we track our transformation KPIs on our roadmap to 2024, as we announced them at the Capital Markets Day last year. The short, very short version is that we are in green across the entire dashboard with the Terminals right well ahead on an underlying basis. Now on slide seven, let me spend a little bit time talking about acquisitions, the logic we're applying, and how we think about synergies. Acquisitions in logistics do two things for us. First, and most importantly, they add the capabilities that allow us to expand our portfolio of competitive logistics products and end-to-end solutions, which is really what powers our organic growth in logistics. Second, we add value by supercharging the growth of the acquired companies by giving the acquired company's products to our more than 2,500 sales reps across the world, so that they can sell the products to our 70,000 customers in Ocean under the Maersk brand. We have a unique advantage that our Ocean customers all have, an intrinsic need of logistics services, from trades and carrier haulage to customs brokers, warehousing, and distribution. They also need more flexibility and transparency across their supply chain, which we aim to provide, not only by controlling the assets and the services, but also investing in the technology to provide the full view from purchase order to distribution center or customer or consumer door. As we gain scale in logistics, we deepen our partnership with our customers, and we're moving from a transactional Ocean relationship to a strategic partnership, a more sticky relationship, if you will, and we increase our share of our customers' total logistics expense, which creates a very strong platform for future growth. As you have seen for many years now, we measure success in terms of the overall organic growth in the L&S and the percentage of organic growth derived from the top Ocean customers, top 200 Ocean customers, which are, frankly, our most demanding customers. Turning now to slide eight for a couple of proof points. On the upper right-hand chart, you can see that over the last 10 quarters, our legacy logistics business, which strips out the impact of all acquisitions, has nearly doubled, and that although our M&A colleagues have been quite busy, our legacy L&S business is the main driver of our growth. As a further proof point of our acquisition strategy, if we drill down a little further into our product families on the lower right, we can see that, over the period, the legacy business in our Fulfilled by family has more than doubled, while Performance Team has shown outstanding growth. At this time, it's too early to tell for the more recently acquired businesses, but I have every confidence that they too will contribute to our ambition to maintain organic revenue growth above 10% towards 2025. We believe that we can sustain this above market growth rate in logistics because of the demand of our existing customer base. Although we are one of the largest ocean shipping companies, we know that we touch only a tiny fraction of our customers' overall logistics spend, and that this spend is tremendously fragmented across the globe. By consolidating services and demonstrating increased utility, transparency, and resilience, we can build a partnership that creates value for both sides, regardless of where we are in the economic cycle. Now let me turn to page nine. In conversation with investors in the past quarter, I was frequently confronted with questions around the development of global congestion. As we all know, congestion really ramped up last year in the U.S. West Coast as import volumes jumped up at the same time as labor supply, longshoremen, truck drivers, warehouse workers, dropped because of COVID-19. We had expected the congestion to ease by the middle of this year as demand would moderate. As we can see on the left-hand chart, import volumes into the U.S. remain at very high levels. The situation on the ground is that while congestion has eased a bit on the West Coast, congestion has spread to the East Coast and to Europe, even though European volumes are essentially in line with pre-pandemic levels. Containers are just not moving off the terminals as fast as we would like to see. One simple example, on the West Coast, we have massive problems getting rail cars. Yesterday, we had 8,500 containers in our Los Angeles terminal waiting for rail cars, which is 3x or 4 x the average rail dwell from a few years ago. Across the East Coast, the West Coast, and Europe, we see issues in getting enough labor to drive trucks and with customers not picking up containers because of full inventories. The picture means that a quick resolution of global supply chains issues is increasingly unlikely, but we do expect that we will see a gradual normalization from the fourth quarter towards the end of the year as macro headwinds keep demand down and labor market become less tight. Now, moving on to sustainability and a few highlights. Our ECO Delivery product continues to show excellent traction with customers. We are delighted that we have been able to accelerate rail volume growth, and they are now more than four times higher than the previous year's same quarter. That's the definition of exponential growth. ECO Delivery now represents nearly 2% of our ocean volumes, and as an important proof point of our decarb strategy, customers accept that carbon-neutral delivery does come with a higher price point. This price signal is key for us and for the entire market as we move towards a carbon-neutral future. We'll discuss sustainability targets and progress in detail at our ESG day in November, on November 22nd, but we, of course, are working towards the goal of net zero emissions by 2024 every quarter now across the entire company. In Q2, APMT switched to running eight of our European facilities on renewable electricity, and while APMT is a small part of our corporate emissions, for the division, it represents a significant step towards their segment goals, and every step counts. Before I hand over to Patrick, on slide 10, you'll find our guidance for 2022, which we revised and upgraded yesterday. This upgrade, of course, means that we are guiding for another super strong year for Maersk. Based on our volume decline in the first half and expectations for the rest of the year, we now expect global container demand growth to be essentially flat or slightly negative for the year. Our other guidance elements, such as CapEx, remain unchanged. On the right-hand side of this chart, you see our 2022 agenda items. They remain unchanged. I'm pleased that in this quarter, despite the extreme challenges faced, all of our Maersk colleagues have pulled together to produce significant tangible progress across all categories and segments. With that, let me hand over to Patrick. Thank you, Søren. Let me add my welcome and thanks to all listening in today. Let's jump straight into the next slide for the financial highlights of the quarter. As Søren just said, Q2 has again hit records across all performance metrics, starting with revenue growth of 52% to $21.7 billion. Similar to the previous quarter, high freight rates in ocean were the main driver, but higher volumes in logistics and services and terminals again contributed to the strong revenue performance. We once more achieved a record quarterly profit level with an EBIT of $9 billion, more than doubling the previous year number of $4.1 billion. This led to a net result of $8.6 billion for the quarter. To put this in context, it means that in the first half of 2022, we achieved a net result of $15.4 billion, coming very close to the full year 2021. This continued high profitability also increases returns, generating tremendous value generation, both in terms of increased ROIC, now reaching 62.5%, and cash flow, with a free cash flow generation of $12.8 billion in the first half, allowing to more than cover the $8.1 billion of returns to shareholders in the form of dividends and share buyback and acquisitions for $2.1 billion. Looking at our cash generation in more details on slide 14, we see that we had a strong operating cash flow of more than $8 billion, equivalent to a cash conversion of 83%. This is in line with the previous year and a slight decline on a sequential basis as working capital has been increasing with increased revenue. Our gross CapEx was $1 billion in line with our expectations, and primarily went towards new aircraft, equipment, and replacement of vessels. This resulted in $6.8 billion of free cash flow, of which this quarter, $2.1 billion went towards the closing of Pilot & Senator, and is actually composed of the $1.5 billion cash purchase you see in the graph, and $600 million in debt settlement on the previous last column at closing. In addition, another $1.5 billion was distributed in the form of share buybacks and the payment of withholding tax on behalf of shareholders. In terms of resulting cash position, we have increased our net cash balance after these liabilities to $3.4 billion, which means we actually have cash of $19 billion, counting the cash on-balance sheet and the short-term deposits. This clearly allows us to look confidently at the years ahead, and will allow us to further invest in organic growth, in targeted acquisitions, while offering attractive returns to our shareholders, as exemplified by the announced $2 billion increase of our four-year share buyback program, meaning $3 billion yearly returns for the years 2022 to 2025. Now let us turn to the development in each of our segments, starting with Ocean on slide 15. As Søren covered earlier, Q2 saw a continuation of the global congestions, with an accumulation of several disruptions offsetting the weakening demand and lower economic outlook, and implying still a very high level of freight rates. Although spot rates softened slightly during the quarter, they remained high in absolute terms, and we continued to sign contracts at higher rates than previously, leading to an average rate increase of 64% compared to the previous year. This triggered the 57% increase in revenue despite 7% lower volumes. Consequently, our Ocean segment produced a record EBIT of $8.5 billion in Q2, with a record high margin of 49%, as the increase in freight rates, both compared to previously and sequentially, has overcompensated the increase in costs. On slide 16, we show this evolution visually with, on the one hand, the strong positive impact of rates complemented in other revenue by some release of revenue recognition as volumes were down. On the other hand, the offsetting lower volume, the higher bunker price, and the increasingly higher container handling and network costs when compared to previous quarter. Turning to slide 17, our freight rates increased by 64% compared to prior year and 14% sequentially. This increase was driven by the long-haul contract rates as the short-term rate actually flattened, meaning that both rates were converging in Q2, indicating that while demand outlook is certainly down, various disruption preempted a wider erosion of freight rates, which led to an overall market development, which was very similar to that of the first quarter 2022, with both higher rates and lower volumes. In this environment, we continued to increase capacity to alleviate the bottlenecks with a further 4% added when compared to a year ago. Sequentially, capacity stabilized at the 4.3 million TEUs, the upper end of our capacity limit, and loaded volumes increased slightly by 3%, while service delivery remained industry-leading, but still at a rather low level. As a continued success of our strategy to be a reliable partner of our customers, contract signing was strong, and we now have 1.9 million FFEs on multi-year contracts, a sequential increase of 19% and sharply up compared to the 1 million FFEs in the second quarter of last year. Moving now to slide 18. Let us spend a moment on our operating cost. The main driver of the 18% operating cost increase this quarter is the 69% increase in bunker, which is actually due to a 74% increase in the cost of fuel, which is slightly offset by a 2.7% reduction in bunker consumption. The cost increase is being passed through in the form of our BAF clauses, with the adjustment progressively coming through in the second and the third quarter. Other costs were up by 5.6%, which combined again with the lower volumes led to a 14% increase in unit cost at fixed bunker. It is important to note that while, as we guided for earlier, a third of this cost increase is certainly due to congestion-related costs, like container handling costs, for instance, and is expected therefore to recede as soon as the situation normalizes. The rest of the cost increases will actually continue to see inflationary pressure in the coming quarters. As a side note for the quarter, you will have noticed that we were more successful than is initially anticipated in evacuating containers from Russia, which has allowed us to reverse part of the impairment made in Q1. Now turning to Logistics services on slide 19. We are very pleased that demand for our logistics solutions continues to be very strong, allowing for dynamic growth in both revenue and profit of 61% and 53% respectively. Revenue reached $3.5 billion, an impressive number in this quarter. This quarter, we also closed the acquisition of Pilot and Senator, which add incrementally to our capabilities, as Søren touched on earlier. The integration of both has begun, and in particular, we are looking forward to leveraging Senator International's CargoWise freight forwarding IT platform for our air freight business. Overall, acquisitions this quarter contributed to 25% of the growth reported. Looking now at the development on slide 20 of the three product families, we see a very strong growth in the integrated products and services managed and fulfilled by Maersk. In Managed by Maersk, revenues reported a growth of 80% to $570 million, driven by lead logistics, which was able to increase revenue in both existing and new customers. For Fulfilled by Maersk, revenue grew an impressive 84%, accelerating off a strong base as our contract logistics business benefited from new warehouse openings and strong customer demand. Profitability weakened slightly with an EBITDA of 3% given a still weak e-commerce environment and a ramp-up of significant new contracted capacities. Finally, in Transported by Maersk, revenue growth was strong at 50%, with higher volumes in landside transportation and in air freight rates as well, contributing to both higher revenue and profitability. In terms of air freight volume specifically, the consolidation of Senator's air freight drove almost all of the 45% increase we saw in the second quarter. On slide 21, we turn to terminals, which had another very strong quarter, driven by higher rates, higher volumes, and storage-related revenue. Non-operational one-offs and higher costs affected all the margins. Although the ability to link tariff increases through CPI is very positive and will help to mitigate cost increases going forward. The outlook is therefore solid as well. CapEx rose significantly compared to previous year quarter, linked to the expansion, particularly in the U.S., in Mobile, Alabama, and in other two terminals in the U.S., as we work to meet increased import demand and improve terminal performance. Turning to slide 22, which shows some detail on the terminals, results. Volumes reflect a strong demand and were up by 1.5%, or actually 3% on a like for like basis when adjusting for exits and expiring concessions. Average utilization was up to 79%. As the EBITDA bridge for gateways terminals shows, EBITDA increased 8% versus the prior year, driven by the underlying business improvement and the impact of higher storage, yet mitigated by higher costs. Revenue per move increased by 13%, which is the same pace as costs, allowing to offset the various cost increases and one-offs occurred in this particular quarter. To finish up on slide 23, we have a summary of our main activities in the new Towage & Maritime Services segment. Segment revenues grew by 9.5%, primarily driven by good performance at Svitzer and increased project activity at Maersk Supply Service as well. Higher bunker costs, though, and impairments in our financial participation in Höegh Autoliners, had a negative impact on the segment profitability, but our actual business operations in the main contributors, Svitzer and MSS, were stable or improving. As mentioned in Q1, MSS won an important contract with the Empire Wind project, and this quarter saw the first down payment for our patented vertical installer solution. Now that we have run through the segments, I'd like to hand over to the operator for the Q&A session. If you have a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find your question has been answered before it's your turn to speak, you can dial zero two to cancel. Please limit yourself to one question per person at a time in the interest of time and fairness. Our first question comes from the line of Sam Bland at JP Morgan. Please go ahead, your line is open. Oh, hi. Thanks for taking the question. Just one from me, and I know you touched on it, but I think on the multi-year contracts, some of those repriced, I think on the first of July. I think I'm right in thinking that the rate on those increased on the first of July. Could you just talk about how the customers viewed that when they could obviously see spot rates coming down? Were they difficult discussions or did it generally go through quite smoothly? Thank you. Yeah, you're right. Some of the contracts did reprice here on the first of July, and yes, they did go up, and we had a relatively smooth and, you know, normal discussion about that. Our customers know very well that an index-linked contract can go both ways, and, you know, that's why they are choosing to have an index-linked contract because they are then not playing, if you will, so much in the freight market, just in the same way as, you know, we think about our BAF clauses. Okay, that's 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. We're seeing growing tensions in the Taiwan Strait. I understand that this is a very important route for especially Asia to Europe. Assuming we see an escalation in the area, is this something which you think will lead to new or building up even further in terms of the congestion and thus also the freight rates? If you could kind of add some comments on, in terms of how much global capacity would that potentially take out of the supply side effects. It's very hard for us to speculate, and we do not know what the Chinese plans are. It's clear that there will be a response to Speaker Pelosi's visit to Taiwan, and it seems like it will be some military exercises, but this is not something we have particular insights on. The Taiwan Strait is one of the most busy straits in the world. Obviously, if it were to close, it would have a dramatic impact on shipping capacity, in the sense that everybody would have to divert around Taiwan, and add to the length of voyages, and that would absorb significant capacity. I also have to say that there seem to be no suggestion that that's where we're going. Great. Thank you, Søren. Thank you. Our next question comes from the line of Robert Joynson of BNP Paribas Exane. Please go ahead, your line is open. Good morning, everybody. A question on the balance sheet, please. You had around $9.7 billion of cash and bank balances as of the end of Q1. On top of that, I estimate there was around $9.5 billion of cash and equivalents in terms of the short-term deposits that you've referenced on slide 14 of the presentation. In terms of cash and cash equivalents, I think that the total was about $19.3 billion at the end of Q1. Just looking at the guidance, I'd be assuming that that number will go to kind of $30 billion or maybe something closer to the mid-30s by the end of the year. That compares with cash and equivalent of just $4 billion-$5 billion before the pandemic. You know, maybe a delta of $25 billion-$30 billion in excess of that by the end of this year. Sorry to be throwing out so many numbers here, but, you know, there's gonna be a lot of cash and equivalents on the balance sheet by the end of this year. In that context, could you just talk about what Maersk balance sheet policy is at the present time? With share buybacks effectively maxed out, what are the implications for special dividends? Thank you. Yeah, thanks, Robert, for the question. Indeed, your math is correct, right? I mentioned, I think early on that we have more than $19 billion cash by the end of Q2 when you actually count those elements precisely as you do, which mean the cash, the deposits, as well. It is a good balance of cash, clearly, which we'll continue to strengthen in the second half given our guidance. You're totally correct with that. I think when you look at the cash looking forward, there are two components here. One is our return to shareholders, which we have increased with an increased share buyback, but also obviously in an ordinary dividend, right? Which is a significant component. As you know, last year we distributed 40% of the profit based on the 2021 numbers. It is a board decision, but I guess it will be something in the same order of magnitude for the result of 2022. That's in any case, whatever the exact number is, and a significant outflow of cash in the first quarter of 2023. Then when you look at the balance sheet policy per se, I think it is clear that we have to look at the policy at the 2024, 2025 horizon, post-normalization, right? You know that clearly the current cash generation is slightly in excess of what is to be expected in a more normalized environment. We look forward to have a very strong balance sheet, strong triple-B once situation has normalized. That is how I would say we look at it. This clearly leaves a lot of cash, but we will invest in further growth and organic growth in logistics. We certainly will continue to have a very targeted approach in logistics to reinforce our position there and the fabulous business growth which we are having there. That probably will leave as well some further return to shareholders, but we'll talk about it once the cash is really in the house and we see how normalization settles. May I just a very quick follow-up, if I may. You've previously talked about the largest acquisition that you would consider doing is in the kind of low billions of dollars. Is that still the case or has thinking evolved in that respect? No, I think we haven't changed our view on acquisition. We are sitting in a phase where I think we have prioritized capabilities gaining acquisition, which implies that they are more focused because they address a lack of capabilities we have. They are, I would say, more targeted companies which are good, well-run companies which we can really integrate and pass our volume through, as we always say. You know, boost their turnover by channeling our volumes to their activity. That limits, I would say probably as well the scope and we're sitting in that phase. Great. Thank you very much. Thank you. Our next 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. Just kind of a more broad question in terms of tax. Clearly, you know, we're seeing energy companies be subject to windfall tax because of their contribution to cost inflation. Do you see any risk in terms of a windfall tax potentially in container shipping, given the current circumstances and the basically persistence of these very high extraordinary profits? Thanks. Well, I mean, all I can say is that we are not aware of any discussions about the windfall tax that would impact A.P. Moller - Maersk. I mean, we are of course aware of the almost global discussion about tax on container shipping. Yeah. That's all I can say. We are not aware of any initiatives at this point. Thank you. Our next question comes from line of Ulrik Bak at SEB. Please go ahead, your line is open. Yes, hello, Søren and Patrick. Also a question from my side. In your updated guidance, you state that it is based on a gradual normalization of ocean taking place in Q4. We have seen rates decline throughout July, which I would define as a partial normalization. I'm just curious to hear what your definition of a normalization is and what you have assumed regarding the rate level and trajectory for the rest of the year in Q3 and Q4. Thank you. Yes. To give you a bit of color on that, I think we have clearly said as well that we expect Q3 to be strong, right, to be in line with Q2, given the visibility we have on the quarter, which really focuses the uncertainty of the guidance on the Q4. There we take the assumption and we actually expect that the freight rate normalization takes place. As you have mentioned and we have seen, right, in the last few months, there has been an erosion of the short-term rates, which has been stopped here and there by renewed or new disruptions. Fundamentally, we cannot escape the macroeconomic environment which clearly heads towards lower growth, higher inflation, lower consumer confidence. If you look at all those indicators, I think there's no really any doubt on where the global economy is going, right? There will be a reduced demand at one point in time, but we would expect for all the factors which we typically have as well discussed earlier on, that this will be a gradual de-development and that ultimately as well, freight rates will stabilize at a higher level than they were in the past and higher than the cost level, which is basically what we said as well back in, you know, capital markets in 2021. For the Q4, I think what we have said, and we have changed our guidance, we had a guidance of saying we mathematically assume a sharp decline by first of July just because we had no indication of how it could go. In our previous guidance, we say, well, let's take two good quarters and then two bad quarters by assuming the normalization happens by first of July so that everybody can take their own assumption and can calculate. With our view now, we take a view on the fourth quarter, and we assume that what we have seen in the last few month of an erosion of the short-term will actually continue to happen. Not a one-day drop, but a progressive erosion towards that lower level of short-term rates in Q4. That's how I'd phrase it. Yeah, if I could just add one very small comment. I mean, we did $19.4 billion of EBITDA in the first half. We are seeing a similar Q3, so around $10 billion. That would get us to $30 billion, and we are guiding for $37 billion. That's the extent of the normalization, and obviously that's because we see the contract portfolio keeping, if you will, a steady, high floor under the earnings of Maersk in the coming quarters. Thank you. Thank you. Our next question comes from the line of Parash Jain at HSBC. Please go ahead. Your line is open. Hi, Søren and Patrick. Just following up on your comments on the contract rates, one quick clarification. On the 500 increase, the 1,400 going to the 1,900, how much of that is due to the bunker clause? Just on contracts, like how should we be thinking about contract discussions for 2023? If I remember correctly, last year you'd said some of the discussions had started earlier and you'd seen some of the benefit from those higher rates in the fourth quarter of 2021. Is that right? Kind of how should we be thinking about the 2023 contracting season based on your expectation that spot were to decline in the fourth quarter? Thank you. On the BAF question, it's a minimal impact, less than $50 out of the $500, but still worth mentioning. In terms of 2023, I'm sure we'll get several questions that will try to draw us into giving some kind of guidance for 2023, which we will only do in February. The only comment I have is that, you know, obviously, the higher the freight rate environment is when negotiations are taking place, the more likely the contract rates are to roll over or to settle at a still very high level. It's too early to tell. We will negotiate that in the fourth quarter for many of them. Yeah. Thanks. Thank you. Our next question comes from the line of Lars Heindorff at Nordea. Please go ahead. Your line is open. Thank you, Søren and Patrick. I've got a question regarding the guidance and the difference between the upgrade in EBITDA and EBIT, which is $7 billion, and the increase in the free cash flow guidance, which is, sorry to say, just $5 billion. The difference there of $2 billion, surely, I mean, some of that can maybe be explained by more net working capital, as long as rates stay at these levels here, but can that explain the whole difference of $6 billion? Thank you. Yeah. Thank you, Lars. Coming to your question, I think it's not unusual for us if you actually look at the last increase we did in Q1. We also increased our guidance of EBITDA by $6 billion at the time, if I remember correctly, and the cash flow by $4 billion, so we had a $2 billion difference. You see the same difference now as well with this increase. That is mainly due to effectively, as you correctly mentioned, by increased working capital. I think what we see, obviously we are having a higher revenue than. Obviously, we thought that generates already at the same amount of days of sales outstanding, a higher absorption and therefore lower cash generation when you compare with the EBITDA. We have had a few days more of DSOs in some part of the business, which we obviously are monitoring. There's certainly a trend here of increasing trade receivables, which is not uncommon when the economic outlook comes down. Something we are strictly monitoring. I must say as well, we probably will have some here and there, some prepayments to secure as well lower cost bases in the future, which is also, I think, a good way to handle our P&L and a good use of cash as well. Those elements, I think, are the main deviation here, which explain a lower conversion, let's say, in terms of incremental EBITDA towards incremental cash. Thank you. Our next question comes from the line of Parash Jain at HSBC. Please go ahead, your line is open. Parash, if your phone is muted, you'll need to unmute that. Okay. Well, I'll take the next question. Your line seems to still be up, Parash. Okay, our next question comes from the line of Marco Limite at Morgan Stanley. Please go ahead. Hello. Good morning, everyone. Thanks for this. I guess my question, it is on 2023, but more on the supply side than on the demand. We are now in August, so I guess you should have a better handle on the effects of the IMO 2023. My question is how are you compliant with the increase in energy efficiency with the CII index, and how do you think the industry is prepared, and what do you think the effects are gonna be of the implementation of the IMO 2023, I guess, path to decarbonization metrics? Yeah. Thank you. This is a relatively new, if you will, legislation, and we're still trying to figure out what the impact will be on supply. Because there are different ways of improving the energy rating of old ships. You can use biofuel, you can slow down speed, will be the two most obvious ways of moving the energy rating from a D to a C. And we have only at this point, some, if you will, very high level numbers based on our own fleet. But if it looks like in order to comply, we will need somewhere between 5% and 15% more capacity, if the way we comply is by lowering the speed. 5%-15% more capacity up towards 2030. With that being said, that's actually a quite significant impact if the compliance is based on slowing down speeds, which we think is the most likely, given the shortage of biofuel and price of biofuel. Of course that's still outstanding. Now, what is also outstanding is a clear understanding of how this will be enforced and the timelines. As far as we understand it now, it will only really be enforced from 2024 or 2025, and therefore the short-term impact, it may be very limited. Longer term, it's actually the way we understand the regulation at this point, quite significant. Thank you. Our next question comes from the line of Dan Togo at Carnegie. Please go ahead, your line is open. Yes, thank you. A question along those same lines, because everybody's looking at the many orders that have been placed for new capacity hitting in 2023 and 2024. As you just alluded to here, we have an IMO 2023 coming up, taking out capacity. We also have softer demand. We potentially have some scrapping. How should we look at the market balance going forward and the impact it will have? Isn't there a risk that these added vessels coming on stream probably are just going to make things worse in terms of congestion? I mean, the problems today are not lack of vessels, basically. It's basically the ports and the intermodal part. How should we view this for, let's say, 2023 and 2024? I would love your view on that. Thanks. What matters in our view in container shipping is not so much how many ships exist. What matters is how much capacity we deploy in our networks compared to the demand that we have. If you go back to 2020, we saw that in action very clearly, because in the first quarter, demand was down. In the second quarter, demand was sharply down by 15% global demand. Prices stayed flat because all of the networks adjust the capacity and basically idled the tonnage that was not needed. Certainly, going forward, that will also be our philosophy in how we operate the network, that we will provide the capacity that our customers need, but we will not sail all the capacity that we have unless there's demand for it. This is very similar to the way the Courier, Express, and Parcel operators they operate their air networks. They're not flying the airplanes if there are no packages. That's what I see, you know, for this industry going forward. This is assuming that everybody will continue to operate the networks the way they do today, but I see little reason to think that people would do something different. Thank you. Thank you. Our next question comes from the line of Sathish Sivakumar at Citi. Please go ahead, your line is open. Yeah. Thanks again for taking my question. In China, right, regarding the international cargo relay, the initiative by the authorities to do the transshipment between two Chinese ports. Could you actually explain what does it mean for you and actually for the other foreign carriers, and what will be the likely impact on capacity and ease in congestion? Thank you. Transshipment of Chinese containers in China means that we're moving the transshipment from basically Busan in Korea or Hong Kong or somewhere else, Japan, to Shanghai. We'll shorten, if you will, a bit the distances. In terms of overall impact on capacity and so on for the industry, I don't think it will have a meaningful impact. Okay. Yeah, thank you. Thank you. Our next question comes from the line of Anders Karlsen at Kepler Cheuvreux. Please go ahead, your line is open. Yes, thank you. I have a question on volumes. I mean, in your guidance, you allude to a small decline in volumes for this year. Still that means that, you know, volumes are gonna be up in the second half compared to the first half. What are you seeing in terms of volumes into Q3? And how are you expecting, you know, a seasonal improvement in volumes towards the end of the year here? Yeah, I think there's an element here to highlight to your point is that obviously you have to consider the previous year basis, right? Which makes an optical change here. We actually do not see volumes coming up significantly in the second half. It's just probably the reduction will be lower because the volumes in the previous year were lower as well, right? The environment we see today is very much a continuation of Q2, which is reduction of volume. Certainly much mainly I would say towards Europe on the backhaul exports from Europe into China, and also quite a weak north/south, and that is expected to pretty much continue this year. Thanks. Thank you. Our next question comes from the line of Cristian Nedelcu of UBS. Please go ahead, your line is open. Hi. Thank you for taking my question. Maybe one on north/south, rates. I think over the last months on the spot rates, we have seen some meaningful increases on routes like Asia to Latam or Europe to Latam, and this seems to be indicating that Q3 rates are gonna be higher than Q2. Just wanted to confirm if you're indeed seeing this in your portfolio, and maybe if you can give us a bit more granularity on what is happening, demand and capacity-wise on these trade lanes. Thank you. Thanks for your question. I think we can just probably maintain what we just said on the earlier question, right? I mean, north/south has been actually quite weak. It always depends a bit on how capacities are reallocated, but we don't see that there is an upswing, so to say, from the macroeconomic point of view, which would underline a durable increase. There will always be variations back and forth depending on the reallocation of vessels. As you know, many vessels have been transferred from those trades into the Asia trade to make more capacity that can cause some disruptions here and there. Overall, we don't see that as a major component for the evolution of the rates looking forward. Thank you. Our next question is from the line of Muneeba Kayani at Bank of America. Please go ahead, your line is open. Thank you. I just had one more question from a demand side. You're seeing good volumes. It looks like her line is disconnected. The next person in the queue is Lars Heindorff. Please go ahead, your line is open. Yeah. Thank you. A follow-up. Søren, it's actually for you because I think in your opening statement you mentioned that you were very confident about contract compliance. I don't know how far out you believe this compliance will extend, but if you look into next year, 2023, I mean, what are the reasons here why you are so confident in that? I mean, historically, contract compliance has not been very good in the industry. I mean, any views on fundamental changes which makes you so certain about this compliance? Well, I mean, the confidence applies to the contracts that we have, right? However long they run. Most are one-year contracts and some are multi-year contract. I think what's important to understand when we look at our portfolio today is that our portfolio is heavily weighted towards BCOs. They have traditionally been quite compliant in contracts. The risk has been more, you know, basically only on the volume, not on the price. Then when it comes to the contracts we have today with the global freight forwarders, they have dramatically changed in the way they are structured. It is a block space agreement. It is take or pay. The language is very, you know, clear. There's a dead freight provision and so on. We are billing our freight forwarder clients for this. That's why we believe we have a high contract compliance. This is a very different scenario from when almost half of our business was with freight forwarders, which is not where we are today. All right. Thank you. Thank you. We've been able to get Muneeba back on the line. Apologies, there was a technical issue there. Muneeba Kayani at Bank of America, please go ahead. Your line is open. Oh, thank you for that. I'll just repeat because I don't know where I was cut off. I was just asking around the demand picture. What we've seen from the headlines on the U.S. from the big U.S. retailers is about inventories building up and kind of slower consumer demand, and what we're seeing in the numbers on import volumes into the U.S., as you mentioned, those remain quite strong. How should we square this off? Is there a lag in terms of timing? Is there a mix effect? How are you thinking about it? What are you seeing? Would love to know. A couple of effects at play. Some of the inventory that we see, particularly in the U.S. where there's good data, is the, if you will, the wrong inventory. Our customers are complaining that, you know, they have the wrong inventory and are still have to import, if you will, the right inventory. The other effect at play is that certain product categories, especially the durable goods, you know, I mean, pretty much everybody have bought the new couch, the new set of lounge furniture, the new TV screen, whatever, all the things that we were all spending our money on during the pandemic. You know, that means that they cannot be. You're not gonna buy another TV screen, right? Whereas a lot of the faster moving stuff, and especially the retail lifestyle and retail goods, actually there's still very strong demand, and we see our customers being very busy in terms of imports to the U.S. These are some of the effects that are at play. With inflation and also being rampant also in the U.S., you know, people are able to afford less than they were a few months ago, and that should have, at some point, an impact on the U.S. imports. The only caveat to that is, of course, that the savings are also very, very high and many wise people have said that we should always be careful not to count out the U.S. Consumer. You know, one would think that demand would come down also in the U.S. because of inflation. Thank you. Thank you. We have time for one further question, that's from the line of Marco Limite, Stifel. Please go ahead, your line is open. Yeah. Thank you for my questions. Just a short one on capacity employed that you see in the market, especially on the Trans-Pacific. I feel like there's a bit of confusion with employed capacity for peak season for August. Is actually up or down? What do you currently see in the market in terms of capacity offered on this trade lane for beginning of the peak season? Thank you. I'm not sure we have that data. I think what we can say for Maersk is that we have significantly grown the capacity that we have deployed in the Pacific to meet customer demand. We probably have 50% more capacity in the Pacific today than we had in 2019. It is actually one of the reasons for why our volumes have been dropping this year because we're taking the capacity from the inter-regional trades, where we have more container turns, so to speak, per ship per year, and moving those ships into the Pacific where they have less turns per year. So we have much more Pacific capacity. But I can't say. I don't know about the market. Yeah. Thank you. Now, with that, let me leave you with a few final remarks. We are, of course, pleased that we present yet again another record quarterly financial result. It's driven by continued exceptional market conditions, but also, and I think that's very important for us, fundamental progress in our transformation strategy. We see continued global congestion. It's not likely to clear up in the very short term. Combining that with a successful closure of our 2022 contract decision, that allows us to increase the full year guidance, as previously announced, and the strong cash generation allows us to increase cash return to shareholders through the share buyback program. Even so, this increase leaves us with ample funds to continue our investment into organic growth, and especially in logistics services, as well as continue what we believe is a quite successful acquisition strategy. Where the markets normalize in the coming quarter or in the coming year, we will continue to work towards a closer partnership with our customers, with the aim of improving the resilience and sustainability of the world's supply chains and our business. In closing, I would like to highlight our refreshed corporate purpose, which we launched this year, and thank all of the Maersk colleagues worldwide for their dedication and efforts as we seek to improve life for all by integrating the world. Thank you, and look forward to talking to you again in the next quarter.