Hello, and welcome to the GXO second quarter 2024 earnings conference call and webcast. My name is Donna, and I will be your operator for today's call. At this time, all participants are on a listen-only mode. Later, we will conduct a question-and-answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. Before the call begins, let me read a brief statement on behalf of the company regarding forward-looking statements, the use of non-GAAP financial measures, and the company's guidance. During the call, the company will be making certain forward-looking statements within the meanings of applicable securities law, which, by their nature, involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those projected in the forward-looking statements. A discussion of factors that could cause actual results to differ materially is contained in the company's SEC filing. The forward-looking statements made in the company's earnings release or made on this call are made only as of today, and the company has no obligation to update any of these forward-looking statements, except to the extent required by law. The company may also refer to certain non-GAAP financial measures as defined under applicable SEC rules during this call. Reconciliations of such non-GAAP financial measures to the most comparable GAAP measures are contained in the company's earnings release, and the related financial table are on its website. Unless otherwise stated, all results reported on this call are reported in United States dollars. The company would also remind you that its guidance incorporates business trends to date and what it believes today to be appropriate assumptions. The company's results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates, changes in global economic conditions and consumer demand and spending, labor market and global supply chain constraints, inflationary pressures, and the various factors detailed in its filings with the SEC. It is not possible for the company to actually predict demand for its services, and therefore, actual results could differ materially from guidance. You can find a copy of the company's earnings release, which contains additional information regarding forward-looking statements and non-GAAP financial measures in the investor sections of the company's website. I will now turn the call over to GXO's Chief Executive Officer, Malcolm Wilson. Mr. Wilson, you may begin. Thanks, Donna, and good morning, everyone. I appreciate you joining us today for our second quarter 2024 earnings call. With me in Greenwich are Baris Oran, our Chief Financial Officer, and Kristine Kubacki, our Chief Strategy Officer. GXO has delivered a strong second quarter, rounding out a great first half, and we're pleased to be reaffirming our full-year 2024 guidance today. During the quarter, we signed about $270 million of new business wins. Our pipeline grew for the third consecutive quarter, standing at a new 12-month high of $2.3 billion of high-quality opportunities. We're also seeing contract duration increase as customers look to outsource to a trusted partner with global scale, who can manage the complexity of their supply chain. We're particularly proud of our progress in Germany, the largest European economy, which has been part of our growth strategy since the spin. During the quarter, we've signed a new deal with Tchibo, a leading German retailer and coffee distributor, and we've gone live on the 20-year, nearly $1 billion contract with Levi's that we announced in May. We're also pleased to have expanded our relationships with several long-standing customers this quarter, including Boeing, Guess, Marks & Spencer, and Raytheon. Our land and expand strategy remains a core tenet of our long-term organic growth plan, and today, about half of our revenue comes from customers we've grown to serve in more than one country. New contracts we win are the key to our growth. Through the first half, we've won more than $520 million of new business, and given our increasing pipeline, we're on track to sign a record amount of new business this year, underpinning our growth in 2025 and beyond. As we've mentioned, we believe we saw the bottom of the inventory cycle in the fourth quarter of last year. We're beyond that inflection point, and we're seeing volume trends beginning to improve. At an industry level, e-commerce has returned to sustainable structural growth. Customer demand for outsourcing has remained strong throughout the cycle as customers look to improve productivity, reduce complexity, and recognize their supply chain as part of their strategy. About half of the contracts we've signed this quarter were for newly outsourced activities.... We're also pleased to have completed our acquisition of Wincanton in the second quarter. This deal exemplifies our M&A strategy. In Wincanton, we've acquired a platform to expand our presence in target verticals across the U.K. and Europe, including aerospace and defense, and industrials. We have acquired Wincanton at an attractive valuation. We look forward to accelerating our future organic growth with this acquisition, as we have done with our expansion in Germany. In both Europe and U.K. markets, we're seeing our customers grow more confident and launch new and larger projects. This bodes well for our future growth, along with our acquisition of Wincanton. In North America, while we're currently seeing softer demand for goods, we've signed record new business wins in the first half of this year. Our long-term contractual business model gives us confidence in delivering our 2027 targets of $15.5 billion-$16 billion of revenue, and $1.25 billion-$1.3 billion of Adjusted EBITDA. With that, I'll pass you to Baris to walk you through the quarter. Baris, over to you. Thanks, Malcolm. Good morning, everyone. In the second quarter, we generated record revenue of $2.8 billion, growing 19% year over year, of which 2% was organic. Our organic growth was driven by strength in diverse parts of our business, including aerospace, data center support, and omni-channel retail, led by cold storage supply chain. Our Adjusted EBITDA this quarter was $187 million, and we delivered $31 million of free cash flow. Our operating return on invested capital remained above our target at 32%, as we continue to invest in high return projects to fuel our organic growth. Our financial position remains rock solid, and we are committed to maintaining our investment-grade balance sheet. Our net leverage was 3.1 x as of the end of the second quarter. We are expecting leverage levels of about 2.5x by the end of the year, and less than 2x by the end of next year. We have no debt coming due in 2024. Our sequential acceleration in organic revenue growth in the second quarter reflects that we have seen an inflection point in our business. As Malcolm mentioned, we also completed our acquisition of Wincanton this quarter. We are thrilled to have acquired this business at an attractive valuation, and we are well positioned to quickly deliver on our synergy targets of $55 million. We expect the acquisition will be accretive to earnings this year, with double-digit accretion to adjusted diluted earnings per share once we fully integrate the two companies. Beyond cost synergies, we will look forward to leveraging Wincanton's expertise to accelerate our growth in the aerospace and defense, and industrial verticals in the U.K. and Europe, in line with our M&A strategy. Turning to our guidance, as Malcolm mentioned, we are reaffirming our view for the rest of the year. For the full year of 2024, we expect to deliver organic revenue growth of 2%-5%, Adjusted EBITDA of $805 million-$835 million, Adjusted EBITDA to free cash flow conversion of 30%-40%, and adjusted diluted earnings per share of $2.73-$2.93. We also expect to continue to deliver an operating return on invested capital of about 30%. While we are seeing many improving trends in our business, the tone of our customer conversations continues to reflect prudence in near-term growth expectations. Looking to 2025, we expect the synergies from the Wincanton integration and automated solutions we are underwriting to drive increased profitability. GXO is executing well on the long-term strategy. We are uniquely positioned in a highly fragmented industry, and due to our long-term contractual business model, we have a multiyear organic growth runway ahead of us. We are generating strong free cash flows, enabling us to invest in our organic growth and strategic M&A. And we will continue to allocate capital in the best interests of our shareholders. With that, I'll hand the mic to Kristine, our new Chief Strategy Officer. Over to you, Kristine. Thanks, Baris. Good morning, everyone. I'm excited to have joined GXO in April as Chief Strategy Officer. I previously worked in investor relations, and prior to that, spent 17 years on the sell-side. I've met many of you already, and I look forward to keeping you updated on how we are building the supply chain of the future. Malcolm and Baris have already reviewed our excellent progress in the quarter and the ways that we're adding value for our customers. I'd like to drill down on our automation and tech leadership, the key differentiator that is going to enable GXO to keep expanding our lead in the market. I've now visited several of our highly automated sites in different countries. As an engineer by training, I'm excited by the level of tech in our operations, both because I understand the value proposition and because I recognize how difficult it is to do what we do. The combination of our automation expertise and our approach to developing automated solution is clearly our differentiator. GXO has helped shape the industry for years, and we continue to redefine the role logistics plays in the modern economy. You may have seen the video we released this morning highlighting our progress in piloting humanoid robotics to work alongside our associates. We are the first to deploy humanoid robotics in our live sites. And while this technology is a few years away from full deployment, our engagement today with leading developers is helping shape the supply chain of the future. We're also creating enormous value by deploying AI across our operations. The insights we're gaining from applying AI to optimize fulfillment are changing the way we run our sites. Our implementations of AI are skyrocketing, with 10x as many sites in deployment for 2024 versus last year. Our role in research and development of supply chain automation is to serve as an operational incubator. We partner with developers of cutting-edge technology and help them shape their prototypes to address practical use cases with a focus on financial results. Our combination of disciplined capital deployment and operational expertise means that we can identify which technologies will create operational value and deliver financial returns, and which ones won't. This approach is part of our strategy of efficient capital allocation. It de-risks our innovation while affording us a first-mover advantage and the opportunity to trial emerging technologies without disrupting our operations. GXO has consistently delivered Operating Return on Invested Capital above 30%, and it is this focus on innovation and disciplined capital allocation that underpins our confidence on delivering our 2027 targets. Along with today's earnings release, we also issued an updated investor presentation on our website, which outlines our value creation framework, including long-term growth driven by secular tailwinds, our global scale, our leadership in tech and automation, and a laser focus on our customers. As you can tell from today's announcement, the core fundamentals of GXO's business model are strong, and our relentless focus on these priorities, combined with our capital allocation strategy, results in a compelling long-term growth algorithm for GXO. We look forward to keeping you updated on our progress. With that, I'll turn it back to Malcolm. Thanks, Kristine. We've built on our momentum from the first quarter and delivered record revenues in the second quarter. With our pipeline at a 12-month high, we have a clear line of sight to sign a record amount of new business this year, underpinning our confidence about accelerating our growth in 25 and beyond. With that, we'll hand the mic back to Donna and transition to Q&A. Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Again, that's star one to register a question at this time. Today's first question is coming from Stephanie Moore of Jefferies. Please go ahead. Ms. Moore, please make sure that your line is not on mute today. Hi. Yes, good morning. Apologize for that. I was hoping you could maybe talk a little bit more about just the, maybe the recovery that you're seeing in the U.K. and Europe, what you think is driving that in particular, and then thoughts about, you know, when you would expect to see the U.S. starting to improve some or other, maybe other levers that you can pull with your U.S. customers, given what kind of remains a weaker environment. Thank you. Hi, Stephanie. Good morning. It's Malcolm here. Let me just cover that point then. So when we look across, in fact, all of our regions right now, what we're seeing is modest improvements in customer volumes compared to the last quarter. Core volumes, though, do remain, you know, relatively sluggish, generally flat year-over-year, but we have got some areas now where we can see definite improvements coming through. When we look in the different regions, as you point out, definitely U.K. and Continental Europe, they've remained stronger. It's about two-thirds of our business, and while we're not yet seeing that return to growth in the North American market, it's still a little uncertain. What we are seeing is a tremendous amount of new business activity. In fact, we've signed more new business in our North American business-... More recently than for a long time. I think we're on target for a record in our North American activity for new business signings. Inventory levels also, we've definitely started to see those return. So from that low point at the end of last year, I think that was really the inflection point for inventory levels across all of the regions. Definitely, we're seeing inventory levels coming back. Customers already now starting, I think, to prepare for this year's holiday season. Most pleasingly, as we just talked about, you know, sales has been strong. It's been. We've seen tangible improvements over the last quarter, and in fact, year-over-year, in terms of every region, our sales pipelines, pre-pipelines, they're really very, very strong. The time to convert is quick, deal sizes are getting bigger, duration of contracts are getting bigger. So the recent announcements that we made about the Levi's contract, where we're commissioning right now and going live in Germany for the operation of a large automated site, more and more of these kind of deals, we're seeing more and more transformative deals are coming into our sales pipeline. So on top of the $500 million of new business that we've already closed, won during this year, you know, the second half of the year looks really promising, and that bodes well for our growth in the second half of this year, and indeed, going into 2025. And I think the last point, just it's an important point. Just to come back on, alongside all of these innovations, we're really catapulting now. We're really accelerating the deployment of a lot of technology across the business. In particular, we're very pleased at the way our trials are going with the very latest tech, you know, these humanoid robotics, where we're coupling them, and we're bringing them into our operations across a real wide range of AI-driven initiatives, across a wide range of applications. So I think definitely in Continental Europe, U.K., we feel that the business is in a very good trajectory of growth, and really, we'll see that also in the second half of the year and into 2025. North America is still a little bit uncertain, but we do see all the signs of an improving situation later in the year, not least the fact that we've got the holiday season ahead of us. This year, we can see, although it's very early in the cycle for planning with our customers, we'll know much more by the end of August. We can see that our customers, particularly the consumer-focused customers, they are starting to plan out really now for a holiday season. Last year was a very disappointing holiday season. Right now, we feel this year's period will be a better, a better period for us than last year. Thank you. Very detailed answer. I appreciate it. Just for my follow-up here, I wanted maybe, Baris, you could talk through some free cash flow considerations for the second half. Realize the guidance has remained unchanged, but does imply a bit of a step up in the second half versus the first half. So if you could walk through some of those puts and takes, that would be great. Thank you. Our free cash flow was $31 million in Q2, up $28 million year-over-year. Our strong first half, which was up $56 million year-over-year, puts us on a track to achieve our 30%-40% EBITDA to free cash flow conversion. Our working capital management continues to be strong in 2024, and we expect that we are investing more and more in automation. That will accelerate, but we're comfortable with our guidance for the year. And as you would recall, our cash flow tends to be second half tilted every year, so our guidance is reflecting that. Thank you. We'll move on to the next question from Scott Schneeberger of Oppenheimer. Please go ahead. Thanks very much. Good morning, all. I wanna follow up on transactional volumes. It sounds like there's a bit of a geographical difference where you're still seeing the sluggishness that keeps you cautious in North America. Baris, I guess it's for you. Is it still sequential improvement to third quarter to fourth quarter? That's what it sounded like in the answer to the last question. But is it just between the back two quarters of the year, how should we see that trend? And maybe with regard to year-over-year consideration as well. And then, I guess, Malcolm, if you wanna follow that, just how much lack of visibility is there in North America? You mentioned, oh, you know, maybe later this month you'll get a sense for the holiday season, but it sounds like your concern is broader than that. So maybe touch on some other verticals in North America, in addition to retail, or if it is just retail, that's kind of the thing that has you a little bit on pause. Thank you. Hi, Scott. Let me cover the second part of your question first. It's Malcolm, and then I'll hand you over to Baris to cover the detail on the numbers. So in fact, you're right. I think we have all year had a stronger outlook for our European business. That bodes well. Clearly, obviously, we've just concluded on the M&A of Wincanton, and that's going to strengthen still further because it's going to expose us into a number of new verticals. So we're very, very pleased about that. In North America, I guess what we're seeing is in our industrials business, our aerospace business, tech business, generally, things that are directly linked somehow to the consumer. I think there's still a degree of uncertainty. When we're talking to our customers, they anticipate this year that they are going to have more of a pronounced holiday season than what we saw in 2023. 2023 was very disappointing, I think, for everyone. This year, I think on the back of improving levels of inventory, inventory levels are growing in our warehouses. I think, and the planning that's taking place right now, but also remembering one of the things that is directly within our control, highly predictable for us, is the actual implementing of that new business that we won. And we can see that our new business wins in North America have been very strong. So while the here and now has a degree of uncertainty, that's what's really directly controllable by us, so the new business that we've won and how we will implement that and the timing of those implementations, that's much more pronounced. So it does give us a better feel for the second half of the year. I don't believe quarter three is going to be a significant change over quarter two, but I definitely do see that when we look at our implementations of new business, what we're hearing right now from our customers, and what we're seeing in our facilities, I do think we will see a noticeable change as we move into quarter four and as we exit this year in 2025 momentum, as it were. But maybe, Baris, you can put a little bit more detail around? Sure. When you look into Q2, and then you look at our existing facilities and include network consolidation and the macro impact, our volumes were still down, but they are less down compared to the fourth quarter of last year. We feel confident that we have passed the bottom. As Malcolm highlighted, we are expecting a better peak compared to Q4 of 2023, which was really, really low. And we're already seeing this environment reflected in our current business. Furthermore, as Malcolm highlighted, we see higher new business wins that will support our continued growth in the back half, especially in Q4, and the profitability in the back half, especially in Q4. Remember, Q4, we had easier comps. Great. Thank you both on that. And for my follow-up, I want to delve into a bit of the pipeline and the duration of contracts. So in the deck you cited, and I think it was a new something new in the deck, that second quarter average contract duration of six months, I think six, six years, excuse me. And so that's, that's, you know, that's impressive, and I assume Levi's is in that. So just curious, is a lot of this all-time high or very long time high pipeline, is a lot of this longer duration contracts? And just curious, Malcolm, if you back out Levi's, assuming that's what's driving that so high in the second quarter, how does the overall portfolio look as far as long-term contracts? Because you have been winning a bunch of them. Is that looking longer now, the total portfolio than it did just a few years ago, and how much has that moved up? And more importantly, looking at the pipeline, do you see more of these long duration contracts to come? Thank you. Yeah, Scott, definitely what we're seeing is the duration length of contracts that we're signing is gradually getting larger. And I think what's driving that is just the amount of technology that goes into the solutions that we're designing for customers. So new many customers are coming to us because, well, they look at us, they see a very trusted partner that's very tech-forward thinking, so they're eager to benefit from the solutions that we can design for them that are really driving more efficiency, more productivity, higher quality. But with that, generally comes automation technology, whether that's goods-to-person, collaborative robots, deep-seated in building robotic activity, or indeed, what will be in the future, these very latest batch of technology, humanoid type of robotics. So generally, that's what's driving this longer term of duration. It's very good for us as a business because it gives us a huge planning horizon. You know, already now we're seeing business continuity with customers stretching out right into the next decade. So I think contract duration increasing, deal size really getting bigger, you know, customers are seeking to outsource more and more of what they traditionally might have done themselves, and that's driving just a larger scale amount of outsourcing. So for us, as a business, it's really a very good news aspect. You know, it's something that gives us a lot of confidence when we're planning out our business beyond 2025 and even into 2026 and 2027. It's one of the reasons why we're really feeling very strong, very confident about the midterm 2027 plans that we announced earlier this year. We've got a lot of confidence coming from just the sheer level of new business that's coming to us. Obviously, we're hopeful that our core business and the economic environments in all the regions will improve from where it is right now, but a good deal of what we're referring to is directly under our control when it comes to just actually the new business that we're entering into with customers. Sounds good. Thanks. Thank you. Excuse me. The next question is coming from Chris Wetherbee of Wells Fargo. Please go ahead. Yeah, hey, thanks. Good morning, guys. I guess I wanted to talk a little bit about the guidance and just sort of make sure I understand the cadence for the rest of the year, particularly from an EBITDA contribution perspective. It seems like maybe Q3 is a little lower than what we thought might have, could have been, and we're maybe a little bit more Q4 weighted now than we were previously. So can you, can you talk through a little bit of what we should see over the course of the next couple of quarters, and what sort of drives that seasonality, which I guess maybe is slightly different than what we've seen before, presumably, maybe Wincanton's got a little bit different seasonality. Hi, Chris. This is Baris here. You're right, there is a peak period in Wincanton that's gonna have an impact. PFS also has a sizable peak that's gonna have an impact. And also, we are seeing more contribution from our new business wins. In this quarter, in Q2, we had roughly 8% of our growth coming from new business wins, and we expect that to grow to 9% towards the end of the year in Q4. That's gonna have an impact. And remember, Q4, we really didn't, we really had a low peak period last year, so we are having really easy comps in Q4 of this year. That's reflected in our numbers. Okay. All right, that, that's helpful. And then maybe if you guys could sort of opine to some extent on what we're seeing from a demand perspective. This is more of a U.S. question than it is European question. You know, and your thoughts on whether or not some of the activity we're seeing is pull forward from a peak season with people concerned about potential disruptions, maybe it's port issues or if there are other factors kind of playing in. There's some tariffs that went into effect in early August. So just kind of curious, you know, the relative strength of imports, particularly from a U.S. perspective, is that something that you think persists, or do you feel like your customers are talking at all about pull forward? Yeah, Chris, it's Malcolm here. Right now, we don't actually see that the inventory levels that we're seeing is a result of a pull forward. I mean, there's different activities in different verticals. I mean, we saw in last year, as an example, and in fact, in early parts of this year, some of our customers in different industries tangibly bringing products in earlier, tangibly bringing product in earlier from a safety perspective in terms of nearshoring and other activities like that. But in terms of our consumer-driven business, right now, I think we are just naturally seeing a elevating return to a more normalized level of inventory holding in our warehouses to support a normal kind of business planning cycle that our customers are having. Clearly, right now, we're seeing early import of inventory, getting ready for the holiday season, which I think will be a very traditional holiday season. I know you mentioned about possible disruptions, port disruptions. You know, our industry, I think now, accepts and lives in a disrupted environment. You know, I think our customers are very familiar with the fact that they have to think about, think outside of the box, and clearly, you know, in working with GXO, they're working with a partner that really is... Well, we have a huge experience of being able to assist them in that cause. And again, one of the important aspects, we are deploying a ton of automation and technology into our businesses. That does allow us to actually transact a lot of volume in a much shorter window of time. It's an added degree of safety for our customers, you know, as we head into the holiday season. Okay. Very helpful. Thanks for the time this morning. Appreciate it. Thank you. The next question is coming from Brian Ossenbeck of J.P. Morgan. Please go ahead. Hey, good morning. Thanks for taking the question. So just wanted to ask a little bit more about the composition of the recent wins and how that might impact margins with startup costs and things like that for the rest of the year into next year. So it looks like new business wins, you know, were a smaller portion of the book this quarter compared to last one, so it looks like a lot more outsourcing. Does it have an appreciable impact on the cadence of earnings here when you think about startup costs and investments? And I guess more specifically, you know, why the shift between those two quarter to quarter? Is that just lumpiness because of the contract, or are you seeing some underlying changes in the behaviors here? Hi, Brian. This is Baris here. The delta is coming from the large outsourcing contracts we have signed. These are, these are the large automated facilities that we took over from an in-house operation, and we are automating. And of course, the contribution from these vastly automated solutions is higher. The margin delta is higher from automation, and we'll see that in play as we take over the site and as we ramp up the activity in these new facilities. Overall, as a trend, roughly, half of our business has been coming from the first-time outsourcing, but we do see quite a lot of demand, especially in the e-commerce as well, on the demand for new facilities. And we are still gaining market share from some of the smaller players as we are getting, seeing opportunities for consolidating network of our customers into, more scaled operations. So we are gaining market share from the smaller, smaller players as well. So this quarter, I would say, is a unique quarter by itself. Over the longer term, you should see, the takeover in place still continuing, but we see new facilities, especially in the, in the e-commerce. The demand for e-commerce, facilities has been somewhat robust recently, and we're seeing a lot more pipeline in our pipeline as well. So that's gonna be more balanced as we look forward. The profitability contribution, of course, on these automated facilities is higher, and we'll see- have them reflected in the next couple of quarters as we ramp them up and into next year as well. Got it. That's helpful. Thank you. Just as a follow-up, Baris, again, maybe you can talk a little bit more about how, the investments in productivity and sales force that you're talking about to start the year, how those impacted the second quarter, how those have been implemented. They're getting the sort of returns you expect, because ultimately, I know there's some seasonality into three Q, but, wanting to see just how much of a, tailwind that's gonna turn as you go from two Q to three Q. Thanks. Oh, thank you. We have sizably invested in our sales teams. In fact, that was a margin drag in our Q around 10 basis points. These facilities do take up some time up to ramp it up and operationalize, but we are seeing a huge opportunity. Our pipeline is very robust. Our pipeline is turning faster as well as our win rates have improved. Therefore, we are definitely seeing a huge benefit of investing in our sales teams and our capabilities. The results are not in our numbers yet. You will see them more vividly in the next couple of years. Okay, thanks, Baris. Thank you. Thank you. The next question is coming from Ravi Shanker of Morgan Stanley. Please go ahead. Thanks, everyone. Maybe I can start with a question on the humanoids, which you referred to a few times on this call, because it's a pretty interesting area of research and lots of new developments there. How do you see that kind of ramping and playing out? Kind of, who are the players out there that can supply you with these humanoids? How does that coexist with cobots? How... What do you see as the future of warehouse automation? Hi, Ravi. It's Kristine here. You know, existing robotic solutions have matured in recent years, and they're somewhat limited in that they can only perform specific functions, and this is really where the humanoids come in. You know, they add the capability of performing dynamic tasks in a human way, and they're developed to make, you know, human-like decisions. They're also highly suitable to perform some repetitive, heavy lifting type tasks and really work with our associates. You know, we believe that the humanoid category will really explode over the next couple of years, and therefore, we're really leaning into it, into the humanoid space via our operational incubator program. You know, we've even this morning just released a short video on the progress that we're making with humanoids. So I would say stay tuned. There's a lot going on in this space. We're certainly very excited about the opportunities. And really, at the end of the day, it's gonna drive, you know, efficiency for our customers, and we're excited about that, and it's gonna accelerate GXO's growth. Great to hear, very exciting. And now for a more mundane follow-up. Just to kind of confirm your message on what you're seeing out there, because you have heard from some of your customers even, like consumer brands, bit of mass market consumer brands, that there is some weakness out there. You see it in some of the retail results that are pretty weak. You're saying that you aren't seeing that as much. I mean, you did say that the U.S. is a little bit softer. Kind of, what is the message on what you think the, you know, inventory situation and demand environment is gonna look like in the back half? Yeah, Ravi, hi, it's Malcolm here. Let me cover some of that, and I'll ask Baris to also come in on it. I think it's two things to consider. It's a kind of here and now, so obviously we work with our customers for the second half of this year, and within that, clearly, the holiday season, roughly about 50% of our business is really consumer focused. You know, it's directly to the consumer. So, in that regard, second half of the year, it's gonna be influenced by the here and now thinking. What we can see is in the discussions that we're having with customers, they are planning, you know, for a holiday season. Maybe there'll be, this year, unlike last year, a little bit more promotional activity, maybe even a bit of discounting. Who knows? But definitely, that's the here and now. But I think the other aspect is so much of what we do, and as we've just talked, a lot about the high levels of new business that is coming into GXO, these are really projects for the future. You know, we're kind of not a transactional kind of business. We're really a longer term, you know, long-term arrangement with our customers. So we're looking out beyond 2024 into 2025, into 2026. That aspect of our business, I think, is very strong. So that's the customers really kind of having to replan out and redesign out their own supply chains, and clearly, we're at the heart of that with so many of these big blue chip customers. Baris, can you add? Yes, the revenue growth in the second half of the year, the delta, is primarily coming from the new wins that we are implementing. And when you look into the underlying volume and network consolidation assumptions, in Q2, clearly we were negative. And in Q3, we expect a similar trend and somewhat easing up into Q4, reflecting an easier comp, in the Q4 versus the Q4 of last year, which was a bottom for us. But again, this reflects a negative volume and a network consolidation environment, that we are forecasting for the entire year. Despite that, our growth is accelerating because of our new business wins. Very good. Thank you. Thank you. Thank you. The next question is coming from Jason Seidl of TD Cowen. Please go ahead. Thank you, operator. Morning, everyone. Wanted to delve a little bit into the contract length. I think, you know, expanding makes it a lot more predictable for your earnings power over time. You know, you mentioned about half of the contracts that you're signing are newly outsourced customers. Are those customers pushing out the longer term as well? And also, as we think about these longer term, some of the deals that you sign are sort of in the double digit years, is there any difference in how we should think of the profitability of those contracts or how they're structured? Yeah. Roughly this quarter, half of the new business wins came from outsourcing, and that does include a number of automated facilities as well. When you have an automated facility, to make it work, to make it economically feasible, you need to have a longer term contract because it takes time to set it up, it takes time to operate, and you're putting a lot of resources. You have to make sure software, hardware, and people work together to achieve the benefits. And those do end up... They are high value and higher margin contracts for us. And, the customers are relying on our expertise and, basically, trusting them, trusting us with their brand to achieve those, objectives and profitability. Higher margin over time, but some startup costs? Higher margin over some, over time. Of course, there's a ramp-up period of automation, but once it comes at a mature level, it is quite profitable and it's very efficient. Okay. That sounds great. Wanted to just follow up here. As I look into some of your end markets, everyone grew, but food and beverage, which to me was interesting because that's the one that everyone would think of as more sort of steady state. What's going on in that category? It's basically reflecting the noise in the market as far as consumer companies are concerned at the moment. But on the other hand, we have seen a nice pickup in our omni-channel retail on our frozen network, which has been quite robustly performing. So it's basically reflecting the consumer environment that we're living in right now. Remember, in Q2, we still are facing negative volumes plus network consolidation impacts, and that will ease as we get into Q4 because of the comp effect. And despite that, we are accelerating our growth because of our wins. So it sounds like food and beverage will be positive in the back half of the year? We do expect a better outcome from our food and beverage customers at the back of the year. And our frozen network is quite robust at the moment. Thanks. Appreciate the color. Nice quarter. Thank you. Thank you. The next question is coming from David Zazula of Barclays. Please go ahead. Hey, thanks for taking my question. I'm wondering if you could talk a little bit. I know you've discussed briefly before, the impact of the Wincanton acquisition on margins in the second half. I know they have a primarily open book contract structure, so how are you expecting that to impact? And, yeah, how your conversations with customers have gone as far as how they wanna keep their contract structure in place, at least initially. Hi, this is Baris here. Let me take the margin question, and I will refer to Malcolm on the regulatory process, because there are certain limits on what we can discuss and what we can contribute to Wincanton at the moment. Wincanton is an open book business, smaller in size compared to GXO. Although it's a high return on invested capital, it's a temporary margin drag until we start the integration. Once we have completed the regulatory process and the peak is over, we'll start the integration process. This quarter, it was dragging our margins, and I expect that drag to slightly increase into Q3 and Q4 as more and more of period of Wincanton is consolidated in our operation. This will turn into a tailwind in 2025, given the roughly $55 million of cost synergies we're targeting once we start the integration process at Wincanton. As far as the regulatory process, Malcolm, anything you would like to add? Yeah, thanks, Baris. Well, in terms of regulatory process, it's a normal process in the U.K. We know it very well. We undertook it very positively with the Clipper deal. We anticipate that regulatory process being complete during September, October. Clearly, the Wincanton business, it does have a holiday season, and it's straight into the holiday season at that time, as indeed is the existing GXO holiday season. So we'll really commence the full-blown integration of the two businesses from January onwards. And as Baris was indicating, I think it's quite likely the majority of our synergy benefits we'll see being actioned and coming through into our numbers during the course of next year, by you know, during the full year, basically. In terms of some other points about Wincanton, I mean, we've had incredibly positive feedback from the customers. They like the fact that, you know, Wincanton is becoming part of a much larger global business. Today, it's been primarily a U.K. organization. The team members that we've had contact with are very good. They're superstars. You know, we're very pleased to be welcoming those team members into our business. So overall, although it's far too soon to start putting numbers around revenue synergies, we do anticipate realizing some very healthy growth coming from the existing verticals. But importantly, also, Wincanton operates in a number of verticals that GXO is not present in right now in Europe. Verticals such as public expenditure, defense, aerospace, a lot of different industrial activity. These are areas that today GXO is not as relevant in, so it will help balance out our portfolio. But many of these customers are, in fact, global customers. So far, clearly unable to take the benefit of working with Wincanton because they're really a U.K.-centric business. But in future, we can see a lot of opportunity of transporting those business relationships, not just across U.K., but Continental Europe and even here into North America, with particularly on some of the aerospace and industrial type of customers that they're working with. So overall, it's, you know, it's a very interesting, very exciting time for our U.K. business teams. I know the two teams, whilst we do operate separately right now, which is in alignment with the regulatory rules. I know they're looking forward to coming together towards the end of the year and really being able to maximize, you know, the benefits that will come out of this deal that has been done. Very helpful. But I could squeeze in just one more. You reiterated the cash flow guidance, which I think calls for some, you know, sequential acceleration and cash flow in the back half. At the same time, it sounds like you're expecting maybe modest volume accelerations. Maybe you could, you know, square the two as to how you are expecting, you know, good cash flow in the second half. Our cash flow generally tends to be tilted in the second half. So far, on a year-to-date basis, we are better than last year, so this gives us a lot of confidence that we'll be able to achieve the guidance range of a bit of a free cash flow conversion. And as I highlighted, as far as the volumes impact is concerned, last year, Q4 was really the bottom. We've seen very, very low inventory levels and low inventory, low volume levels, and we are gonna be comping them out in Q4. So we do expect an acceleration into Q4 in our organic growth range coming from the volume. But beyond that, remember, we are expecting higher contribution from our new business wins. That's gonna be operational in Q4 as well. We are looking positively into the second half of the year. Thanks very much. Thank you. Thank you. The next question is coming from Kevin Gainey of Thompson Davis & Co. Please go ahead. Good morning, everybody. Appreciate you taking the question. I wanted to maybe go into talk about the AI deployments that you guys are doing. What's the... What is the customer demand for that, and how are you guys planning that integration? And maybe if there's, like, a line of sight of what the opportunity is for you guys to capitalize on there. Hi, Kevin. It's Kristine here. Just to talk a little bit about AI. AI is at really an exciting point for GXO, and as I mentioned, our AI deployments are up 10x year-over-year in 2024. And, you know, we're using AI to add value in a variety of use cases within our existing operations. And some of those cases include, you know, optimizing picking, managing inventory flow, predicting, you know, SKU replenishment modes, and, you know, all of which really reduces our cycle time. And this improves really dramatically the efficiencies for our customers and improves capacity that I think Malcolm talked about earlier. So I think we're, you know, GXO, we're the leader in, you know, the automated supply chain solutions, but I would say on AI, we're really, really just getting started. The predictive power of AI is already changing the way that we run our existing sites, and this will... AI will further enhance this advantage. So I would say watch this space. We'll certainly have a lot more to, to update you on our progress as we go forward. Thanks, Kristine. Then maybe if you guys... This is a more M&A style question. When you guys make acquisitions, do you typically integrate them wholly, or do you still consider them, like, subsidiary? And how does that affect how you guys run those businesses? ... Yeah, Kevin, it's Malcolm here. No, we tend to have a strategy whereby we integrate all there, because we feel that drives the best environment for our customers. It's the best environment for our teams. Obviously, as a business, I think we're very well known for our very good way of working with all of our business associates, our team members. You know, this year alone, we've kind of already promoted around 2,000 people into new roles, homegrown talent, as it were. So when we integrate businesses, of course, new employees, new colleagues coming into the company gain all of these benefits. But first and foremost, as well, you know, we've been very successful. We have a very strong track record. We do what we say we'll do when it comes to making very smooth integrations of business. Our customers value the fact that we, we do that thoughtfully, we don't disrupt any business. But in doing that, also, it means we're able to leverage the strength of all of the business that we have in one particular geography. And that's what drives the high degree of synergy, cost synergy benefits, that we're able to achieve. You know, improved procurement, buying powers, doing things in the most smartest way, in the most efficient way, and that's what gives us confidence. You know, we've done this several times. It's what's given us a high degree of confidence in terms of the synergy savings that will come from the Wincanton deal. Really, you know, from, I believe, January onwards, that integration will start in earnest, and, you know, we'll purposefully make sure it's done very smoothly, very well, but to the best effect, ultimately, of our team members and, of course, our customers, and in the end, us, in the best interest of our shareholders. Appreciate the color on that, Malcolm. And then, if I could squeeze one more in for Baris. How are you guys thinking about capital allocation in the back half of the year? We are focusing on generating cash. Our first priority is, as a growth enterprise, to continue to invest in our new business opportunities, organic growth, and we are in the process of deleveraging. Our first priority would be organic growth. Once we go through the regulatory process, we will start integrating Wincanton, and we'll capture more cost synergies. And we are really excited about the new business opportunities, working, the teams working together can create for us in industrials, in aerospace and defense. Everybody's getting ready for that, but we need to get the approval from the regulatory bodies first. So our priority would be integrating, growing organically, and paying down debt. Appreciate the time. Thank you. Thank you. Ladies and gentlemen, that is all the time we have today for questions. I would like to turn the call back over to CEO, Mr. Malcolm Wilson, for closing comments. Thank you, Donna, and thanks for hosting our call today. We really appreciate that. We're pleased with the progress that we've made through the second quarter. We've delivered strong business wins, look forward to even more to come through our bigger sales pipeline, and we're also looking forward to going live on a number of new exciting sites in the second half of this year. We've seen a return of larger, more complex projects into our sales pipeline. As Baris mentioned, you know, the return also of a lot of e-fulfillment type of projects is very pleasing to see. We're leading the industry with a growing number of innovative and game-changing technologies, which are all being proven right now in our sites, including the latest batch of humanoid type of robotics. Well, as Kristine mentioned, just a whole host of AI initiatives, that's becoming a norm in our business. It's a really very exciting time for all of our teams working in the facilities. As a company, we're excited to continue to deliver these great shareholder returns from the exciting growth that's ahead of us. So with that, I'd like to wish everybody a great rest of the day, and thanks very much for joining us and your attendance on our call. Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.