Good morning. This is the conference operator. Welcome, and thank you for joining the NTG Nordic Transport Group third quarter 2023 results conference call. As a reminder, all participants are in a listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and then zero on their telephone. At this time, I would like to turn the conference over to Mr. Michael Larsen, CEO. Please go ahead. Thank you. Welcome to our Q3 2023 conference call, and thank you for dialing in. Let's move on to page number 2. Here, we kindly ask you to read the important notice provided on this slide. Then let's move on to page number 3. Here you see the presenting team of today. My name is, Michael Larsen, and I'm the Group CEO of NTG Nordic Transport Group. With me today, I have Christian Jakobsen, our Group CFO. Let's move on to page number 4. Here you see the agenda for this conference call, which includes highlights for the third quarter of 2023, a review of the financial performance of the group and the two divisions, a presentation of other key figures, and the outlook for 2023, and the reiteration of our midterm target. By the end of the presentation, the line will be open to questions from the audience. Let's move on to page number 5. These are the main highlights for Q3 2023. In the third quarter of the year, the market conditions were challenging for both divisions. Macroeconomic factors continued to provide headwinds, and the destocking cycle is taking longer than expected. As a consequence, volumes continue to be under pressure. With the lower volumes, competition in the market is increasing as market participants had to compete harder to achieve the same volumes as in the previous years. The weak volumes and increased competition also put a downward pressure on the rates, both in the road and logistics, but also in the air and ocean division. With significant spare capacity in the market, there's no signs of improvement of the rates yet. The macroeconomic landscape continues to provide challenging conditions, with a slowdown in overall activity and significant uncertainty for the future development of the global economy. Finally, the guidance provided on the third of August 2023 is maintained. For the full year 2023, we expect to achieve an adjusted EBIT of DKK 600 million-DKK 650 million. With those words, I'll now hand you over to Christian, who will take you through the Q3 financial results. Christian, please. Thank you, Michael. On page 6, you see the main financial highlights for the group. Net revenue for the third quarter of 2023, total DKK 2 billion, which is a decrease of 30% versus the same period last year. Organic growth contributed with -29% due to the challenging market environment for both divisions, while currency translation effects had a negative impact of 2.2%. Gross profit decreased by 17% to DKK 444 million, corresponding to an increase in gross margin from 18.9% in 2022 to 22.6% year-on-year. Adjusted EBIT decreased 23% to DKK 161 million in Q3, corresponding to an operating margin of 8.2% versus 7.4% in Q3 2022. Reflecting a relative resilient operating margin in road and logistics and a significant increase in the operating margin in air and ocean due to a partial reversal of the provision for earnout related to the acquisition of AGL and sale of an office building in Germany. To counteract the pressure on the conversion ratio from the adverse market environment, both divisions have implemented additional cost reduction measures during the quarter and have continued to adapt to the current market conditions. If we move to page 7, you see a summary of the key financial performance indicators. As illustrated to the left, the gross margin development for the group was mainly impacted by an increase in both divisions when compared to the same period last year, primarily due to lower rates which allow higher gross margin. In the middle of the slide, you see the conversion ratio, which increased compared to last quarter and the same period last year. The development was driven by the effects of the partial reversal of the AGL earnout and the sale of the building. The conversion ratio continues to be under pressure from lower volumes of rates and consequently lower gross profit, combined with the continued investments in the senior organization. As mentioned earlier, both divisions have reduced capacity and white-collar headcount in order to react to the market conditions. On the right-hand side, you see the development in operating margin, which increased both compared to the same period last year and compared to last quarter. Again, this was an effect of the reversal of the earnout provision and the sale of the building in Germany. If we go to slide 8, you see the financial review of the Road and Logistics division. The division generated a net revenue of DKK 1.5 billion in Q3 2023, which was 17% lower than the same period last year. The decrease was mainly related to organic growth, which fell by 15% year-on-year, driven by a combination of lower rates, and lower volumes. Especially in the summer months, July and August, was lower than in the last couple of years, with customer decreasing activity over the summer holidays to a larger extent than what was the case during the COVID pandemic and the subsequent period of supply chain disruptions. Currency translation had a negative effect of 2%, especially with the devaluation of the Swedish crown having a significant negative impact. Gross profit decreased 7% to DKK 329 million, corresponding to a gross margin of 22.5% versus 20.3% in Q3 last year. The conversion ratio decreased 5.5 percentage points year-on-year, mainly due to the lower gross profit. Adjusted EBIT decreased 20% to DKK 109 million in Q3, while the operating margin declined to 7.5% from 7.8% last year. As in previous quarters, the division continued to adjust capacity and the cost base during the quarter in response to the market conditions. If we flip to page nine, you see the financial review of the Air and Ocean division. The division generate a net revenue of DKK 503 million kroner in the quarter, which was 53% lower than the same period last year, composed of organic growth of -51%, mainly driven by the continuing destocking cycle and lower volume due to macroeconomic headwinds. Gross profit decreased 35% to DKK 115 million kroner, corresponding to a gross margin of 22.9% versus 16.7% in Q3 2022. This development was mainly due to the significant decrease in freight rates compared to last year. Adjusted EBIT declined 28% to DKK 52 million kroner, corresponding to an operating margin of 10.3% versus 6.7% in Q3 2022. This margin increase was driven by the partial reversal of the earnout and the sale of the building. Generally, the conversion rate remains under pressure as a result of the lower absolute gross profit. Then if we flip to page 10, you see an overview of other key figures. On the left, you see the net working capital increase to DKK -51 million as per the 30th of September 2023, an increase of DKK 22 million compared to the end of Q2. The adjusted free cash flow totaled DKK 73 million in the third quarter of the year, compared to DKK 223 million in the same period last year, mainly driven by lower operating performance and increase in the net working capital in Q3. Finally, on the right-hand side, you see the net interest bank debt, excluding IFRS 16, which totaled DKK 319 million by the end of the quarter. If we move to slide 11, you see the full year outlook for 2023, which was provided on August 3, 2023, and for the full year of 2023, we maintain our expectations of an adjusted EBIT of DKK 600 million-DKK 650 million. Yeah, outlook assumes that activity will remain at current level for the remaining part of the year. The full year outlook includes the effect of an expected reversal of the provision for earn-out release related to the acquisition of AGL, amounting to a total of DKK 42 million in 2023, of which DKK 21 million was reversed in Q3 2023. Finally, we maintain our midterm financial target that you see on page 12, no later than by the end of 2027, we try to achieve DKK 1 billion in adjusted EBIT. The target is based on a combination of organic growth and M&A, financed by our cash flow and credit facilities. No assumptions of capital raises is included, although we will evaluate this source for financing for large acquisitions. Finally, the midterm guidance, midterm target assumes no additional material adverse events affecting regional and global cargo volumes and trade patterns, and NTG continuing to develop the business, establish new startup, and execute its M&A c That was all what we had planned for today. Moderator, please open the line for Q&A. Thank you. This is the conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, you may press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from the line of Bob Goldrich from SEB. Please go ahead. Yes, hello, thank you for taking my questions. I'll take them one by one. Firstly, can you perhaps elaborate a bit on the volume trajectory throughout Q3 and into Q4 so far? And in this context, also, comment on your guidance? And the comment that you made, that you do not expect a seasonal volume uptick in Q4. That would be my first question. Thank you. Yeah, as in our guidance before you saw this earnout, then we expected that the market would see a pickup throughout the end of Q3 and into Q4. And now we don't see that uptick, and we don't see that the seasonal pattern where we see Q4 being the strongest quarter will assume this year. So we are seeing that it is very muted, and we're still expecting that it will be muted throughout the rest of the year. Okay, thank you. Then my question is on the Air and Ocean division. You've previously mentioned that larger freight forwarders are increasingly focusing on smaller shippers, which are normally your target customers, and that this has put pressure on your Air and Ocean volumes. What is the latest development regarding this dynamic? Has it continued? Has it gotten worse? Is it becoming better? Yeah, any color you could provide. Thank you. I see, I think we see the same pattern as we saw in Q2, and maybe also in Q1, that the bigger freight forwarders has a higher focus on the SME at the moment, and therefore, we expect that we are experiencing that they are challenging us, and we, of course, fighting hard to keep our customers. But it is a battle out there with the lower volumes of the Air and Ocean. So definitely, we're not only fighting the big guys for some of our customers, we still also have a hard fight with the mid-sized freight forwarders. Okay. In this context, how should we think about this conversion ratio in Air and Ocean? In Q2, it seemed to have troughed at 20%, and in Q3, if you adjust for this provision and the sale of the office building, I calculate it at slightly less than 23%. So, a slight increase compared to Q2. Is it fair to assume that the conversion ratio has troughed now and will at least be at Q3 levels going forward? We're not guiding on anything, but since the gross profit is under pressure, then of course we hope that is as you described, but we don't know what will come. But we are definitely feeling that our gross profit is under pressure, and but I cannot guarantee you that it will not either increase pressure, but it has been hard, a hard period now. Okay. And similar question to Road and Logistics. The conversion ratio has generally trended down over the past year, as you also show on in the presentation. Similar question. Is it your expectation that this will continue, the negative trend, or are you seeing also a trough here in the immediate future? What the geographies that we are operating in, they are hard hit at the moment, Ulrik, and we are happy with that we are good—we feel that we are good at the conversion ratio, and we are trying to optimize that. But here, again, the gross profit is under pressure. We are feeling that this pressure, and we hope that when volumes are picking up, we are also able to get a little bit more of a gross profit. But we will adjust our cost base in accordance with the market, and if the market is weaker than what we see now, then we need to adjust our cost base, and that's how it is. So we are doing everything we can to optimize our conversion ratio, but I can't guide you on what we are seeing in the coming period. Because, yeah, we are expecting an uptick in the market, and better market conditions, and we haven't seen them now and then we have to see when next year, when, if they are coming, but we will talk of that when we're guiding for the next year. Okay. Makes sense. Then final question from me. Can you please remind us of the structure and the size of the AGL earn-out and whether there is a potential for further reversal of this provision? Of course, there's a potential. If they are underperforming what we have forecasted for Q4, then there's a potential for further. But we have not put that into our guidance. We put in what we have said, and that's what it is, and then we will have to see when we're doing the final calculations with the add backs and what we have for this earn-out. Yeah, as you know, we had around $28 million of the acquisition was part of the earnout, and we paid $70 million upfront, and then we paid $7.6 million because we knew that the earnout for 2022 would be realized. So this is the year, this is the main part of the earnout, which is due for the protection and the hedging we did when we did the acquisition. This is for the performance of 2023. ... Okay, just to be clear, so there's no earnout component for 2024 results? Nope. Nope, nope. Okay, thank you. No further questions from us. Bye. Thanks. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Heindorff Lars with Nordea. Please go ahead. Yeah, this morning. Thank you for taking my questions. A few from me as well. I'm curious about your comments on the development here as we head into the fourth quarter, and you say that fourth quarter is normally the strongest one. Is that specifically, it was on a group level, or was this specifically meant in relation to road or air and ocean? I think for road, definitely. For air and ocean, it is more, there's not that much seasonality and peak in the Q4, so it is for road, and please remember, road is our biggest division. So the main part of this comment is definitely for the whole group, and because of road as being the biggest division. Okay. And then if you stay on road and logistics, the gross margin, we've been talking about this in some of the earlier calls, it's been moving up, I think, partly because of rates coming down, and some of that is caused by diesel surcharges, which to some extent is a pass-through. But it's still at fairly high levels. Now, with the oil price of declines, I mean, what should we expect in terms of growth as we head into the fourth quarter, and also the decline of, the headline decline of around about 15% in the top line, how much of that is caused by volumes, and how much is price? It is, as you can see, with the diesel being down quarter on quarter, then the main part would be pricing, but definitely also we are seeing volumes are dropping, so it is a combination. And we're not measuring internally on that, because what we have seen is that we are measuring on consignments, but we're also seeing that our consignments are being smaller, so I wouldn't be able to give you the precise figure of what would be the combination. But we are seeing both consignments being dropping a little bit, but also seeing them being smaller. And then we're seeing a big part of it as being price and in particular on the diesel floater. But also, you see that the spot prices, they are very small at the moment, and you're not getting for the repositioning, you're not getting paid any decent money where we made a lot of money last year. Okay. So, if I hear you, if I understand you correctly, then there will also be a negative impact on diesel floater as we head into the fourth quarter. Is that correct? You will definitely see. We are seeing that the diesel floater is actually picking a little bit up, so for October, and I don't know what it will be for November. I haven't seen that. So diesel floater will be higher in October probably than what we saw for September, so I'm not able to give you any more flavor on that. No, no, but, but the reason why I'm asking these questions is basically because to get a sense for the gross margin. I mean, obviously it affects, it is affected by the development of the diesel floater, and then the prices in general, but also your ability to push that lower price in the market towards your sub-suppliers. So, so in short, maybe phrase it in a different way, will your gross margin be able to uphold that at decent levels here, 22%-23%? Lars, I'm not able to give you any more flavor on that at the moment, to be honest. I don't even know what diesel will be for the next month, as I mean, it would be a little hard for me to give you any more flavor. Okay. No, no, that's fair enough. And then on the cost side, it looks as if you're actually, I can see also the headcount going down a little bit, that you started to take out some costs. Maybe if you can really, if you're willing to give us a bit of flavor on where you are in that process and if actually you can do more, at least in the road division, it looks like its cost is year-on-year flattish. And then if we adjust for the reversal in air and ocean, costs are actually quite a bit down, both year-on-year and also quarter-on-quarter. So maybe a few words on that and the work. Yeah. Yeah. But we have, we are, have been adjusting a little bit on the number of employees, in particular in the air and ocean division. We have also taken measures in road, and we will keep taking measures if volumes are not coming up. But it's also a little bit depending on what we win. But we have also said we are not doing the big cutdown because we are expecting the market to pick up, and therefore we should be ready to receive it again. But we are adjusting accordingly, but we are not cutting it to the bone at the current. If we're not seeing and don't expect any signs of a market picking up, then we have to do a harder cut. We are just cutting where we believe it is right, and then we are believing that we see a market that coming, that is coming back, and we should be ready to pick it up. Okay, but the cost base of DKK 167 million in total cost in the road division in the third quarter, will that be a decent run rate to assume going forward? Or again, I'm a little bit unsure if I understand your answer, if you think that there's more to come or how you're gonna go around these things. Please remember that it was two vacation months, July and August. When people are having their vacation, then we are releasing the holiday accrual. So they are lower than what you should expect for the coming quarters on that. Okay. Very clear. Then on this, more mainly on Air and Ocean. We've been talking about these things before as well, and this is, again, the ability to do further cost cutting. I mean, maybe it's just me, but I'm curious to find out. You have had some troubles in Germany. I know you've changed a lot of the employees down there. I mean, how far are you in the process of getting Germany up and running? And also, can you do anything in terms of the sizes of your entities, which may prevent you in adjusting your cost base further, i.e., consolidating some offices or anything like that? I mean, are there any sort of possibilities which could make you more resilient in terms of the conversion ratio? If I start with the German part, now we have changed the MD, started on first of January, and he has set his team. And you're perfectly right, we had definitely had some disturbance in Germany. But the management team is set, and the sales team is set. So, we definitely believe that Germany from here will start this turnaround that we are expecting, and it's possible. And we are measuring it very closely from group side. You're right, if the volumes are not coming, then we need to look at the staff and also seeing whether or does it make sense that we have all the small offices could be merge some something. But at the moment, we don't see that we definitely believe that we have said in all of the organization, we are believing that we have the right setup, and we should go out and win some volumes. That is our plan, and that's we are executing on. Okay. All right. Thank you. Welcome. Thank you. Thank you. The next question is from Jasna Stan with Carnegie. Please go ahead. Didn't quite get my name there, but I could get... I hope it's me, Dan Togo, Carnegie here. Just one question remaining here, on your guidance. To reach the top end of the guidance, you will need, to my calculation, to have an EBIT to the tune of DKK 170 million here in Q4. So that will be a sequential improvement and basically bringing it on par with Q4 last year. What measures can you say will take EBIT to that level in Q4? If it's not the market fundamentals, because I understand that they are quite depressed at the moment. Just to understand the dynamics here. Thanks. Yeah. But you're right, and there's two things. We did expect to see the seasonality, and if that comes as we expected before, then that could take us this. And then also, please remember that with the U.S., there is a kicker. So if he's underperforming, then our EBIT is increasing, and that it is a little strange. So therefore we have done that as is. So we need really to yeah to have a definitely not a lot of headwind in Europe and the opposite in the U.S. So yeah, it is a little strange situation with this earnings, but that's technically how it is. You, just to understand, there will be a negative from the earnout of $21 million in fourth quarter, but then there will also be a kicker that will reverse part of that? You came to the top, and it, let's say that the... was not earning the money that we expecting for Q4, then actually the Earnout would be lower, and then now, and then we would have to reverse even more on this. Mm. Mm. Mm. So it is a strange situation to be in at the moment, but as you know, it is a hedging of our results for 2023, that we are now paying less for the company than what we said, because, yeah, we had some concerns about the 2023 and of course, we have seen that now due to the macroeconomic headwinds. Right. And then maybe we haven't discussed that or you haven't given some flavor on that. What the M&A environment at the moment has it become easier? Is it just as difficult as it was a quarter a year ago? Can you give some just some color on where you see things? ... But we have a good pipeline, and we are seeing interesting companies out there, and we're also seeing that the sellers have come somewhat down the trees. Maybe they haven't come down enough, but we think that the market is close to seeing that deals can be done. So, yeah, hopefully, it's only a question of time. Cross fingers. Thanks a lot. Thanks. Thank you. The next question is from Heindorff Lars of Nordea. Please go ahead. Yeah, thank you. Just to follow up, it's on AGL. I don't know if you can indicate what kind of runway to make in terms of the earnings at the moment, given the status and what you have been indicating about the markets and also in the U.S. Yeah, but yeah, as we also put in, let's say, when we talked about Q2, we were expecting U.S. to pick up, and we haven't seen that. And you also see that on the rates to the U.S. they are not increasing. We did see this short uptick, but apparently it looks like it's down to being muted again. So we haven't seen that pick up in the U.S. that we expected. Okay. All right. Thank you. Thank you. Once again, if you wish to ask a question, please press star and one on your telephone. A final reminder this time, if you would like to join the question queue, please dial star and then one now. Mr. Jakobsen, there are no more questions registered at this time. Do you perhaps have any closing comments? Yeah, thank you, and thank you for listening in. We look forward to see you out there and talk about the results, and then thank you for listening in. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.