DSV A/S (DSV) Earnings Call Transcript & Summary

Good morning, and welcome to our Capital Markets Day. Welcome to all of you live here in the room. Welcome to everybody listening online. Just so you know it, we are approximately 75 in the room and just as many have signed up online. First of all, you don't have to check your screens and see if there's a company announcement because there isn't a company announcement today. There will be one later about share buybacks. We do that every Tuesday, but nothing out of the ordinary. So it's that kind of Capital Markets Day. My name is Flemming. I'm heading up Investor Relations, in case you didn't know it already. And on behalf of the IR team, I would just say we've really been looking forward to tomorrow. But of course, also today. And we have a packed agenda. It's been a while since we had our last Capital Markets Day. So it's an ambitious program. You will start the day with sort of a high-level strategic overview with Jens and Jens and then we have an Air & Sea session. And then before the lunch, we also have the customers in focus and an ESG event. You won't remember more now, so I will go deeper into the rest later. But this is what you have in front of you, so fasten your seatbelts. This is the strongest team we can put together. These are the colleagues presenting here today. It's a strong team, and I know they have been looking forward to this. One important thing I would ask you to do is make this an interesting day with dialogue, good questions. We've tried to make sure that we have time in the agenda for that -- for Q&A sessions, and please take part in that. Then my job is to make sure that we keep the schedule. I think that's just about everything I have to say, except if you are listening online, if you want to ask question, it should be pretty intuitive on the screen where to write your question. It will appear on an iPad that I will have in my hand, and then I can see the questions. Then one very practical thing. You have a small table in front of you. You can use it. But it's not very stable, so please be careful if you put your coffee on it. That's it. The first speaker today, I think he needs very little introduction. Please welcome CEO, Jens Andersen.

Thank you, Flemming, and welcome also from me here to Hedehusene to hopefully action packed day. We've been looking forward to it also. And Flemming, thanks for taking 5 minutes of my very scarce time. We have to be over in 25 minutes, Jens Lund and myself, so we can get your questions going. So this is what I'm going to talk about delivering on our strategy, and I'll spend a few minutes on that. This is why we go to work at DSV every single day. This is why the almost 80,000 people come to the office is to generate what we have generated. This is a slide that we are super proud of. This is the most important KPI that we are using in our company. This is what all the work, all the efforts, all the hard work of our company really boils down to what earnings do we make per share and how does that develop in our company. This is pretty self-explanatory, and we are happy about this development with a 28% CAGR development from the last time we met at the last Capital Markets Day in 2015. Some of the most cynical, if you will probably say yes, but it's highly inflated at the last couple of years, but let's just assume we take those away. We can still show to a very, very high development on a CAGR basis, which is probably at any timeframe, you would say exceeding 15%. So we're very pleased about that. And I guess, when everything is said and done, this is also what you get as a shareholder. How is it being compromised? It comes from some of these figures. I'm sure that some of you know them yourselves. We had an EBIT result of DKK 3 billion last time we met. Last year, we made DKK 16 billion. And you know we have a guidance that exceeds DKK 20 billion this year. What also pleases us is the fact that we have managed to achieve industry high margins. And every time we have gone into a new year and particularly due to the acquisitions of our company, we have been able to increase our margins also. And last but not least, you also need to have a look at what do you get from the investments that you make. And I think also it's a satisfactory for us to see that the return on invested capital now exceeds our long-term financial targets of 20% and which is also super, super relevant for us. So that was just the start. Now it's the agenda. I just wanted to make all that clear for you that we are happy about the performance, and it was just something which I really wanted to emphasize before we even get going. This is what I'm going to talk about. And without further hesitation, I'll jump straight into it. A lot of the value in a company like DSV lies in the network. We have a lot of super, super profitable and very strong countries in our organization but they can only thrive because of other countries in the network. So DSV in the U.S. can never make the very high results they do. If they did not have a strong DSV in China, in Germany, in Vietnam and in the U.K., for instance. So a lot of the value lies in the network. This is our footprint today compared to what it was in 2015. When we met the last time, we were 76% European company at that time. We're very pleased about the fact that we have grown outside of Europe. There's nothing wrong with Europe. But we all have to realize that growth is higher outside of Europe. So the fact that we now have close to 25% in Americas, close to 25% in APAC and that we also have an increased size in Africa and the Middle East due to the acquisitions, primarily of UTi and yes, and agility is really satisfactory to us. So we are -- we can debate what is the ultimate kind of situation, we'll probably never agree to what that exactly is, but we are close to something that we find very, very attractive. And the reason that Europe is still big is that the large Road operations that we have, they weigh in a lot in Europe. So as you all know, M&A is a very important part of our strategy in our company. We have been able to do 3 relatively large acquisitions since we met last time. And we just thought it would be appropriate just to take that off in terms of what we actually set out to do back in 2015. You can see up here, we had some criteria that we set at the time. This is some of the characteristics that the future acquisitions of DSV need to have. They needed to be asset light. They needed to have air and sea exposure. They needed to have a presence outside of Europe. There was nothing wrong if it was a restructuring case. And then we could also do bolt-on on Road. And you can all see that the 3 acquisitions we have done: UTi, Panalpina and Agility. They all take at least most of those boxes not to offend our guys, our new colleagues from Agility, we kind of put a bracket around restructuring case. They will probably argue that it was not a true classic restructuring case. What is also very important and very, very Interesting, I think, also for you guys, it is, at least for us, is to look at the EBIT impact that we have communicated to the market. The stand-alone profitability plus the synergies amounts to a little over DKK 7 billion for these 3 acquisitions. But as you probably remember on the previous slide, the earnings of our company before we did these acquisitions were $3 billion. And then you put like 7 on top, meaning DKK 10 billion. But today, we make DKK 20 billion. So we have this escalation of the profits, the impact of the acquisitions, they will have -- or they have had a very big impact on the existing business that we have in the company. This is why we think that M&A is so interesting that it's not only possible for us to lift the margins on the acquired companies to the levels that we have, but we have seen that the margins of the combined and total company has gone up after the acquisitions. This is, of course, something which is very satisfactory and also something that you should expect happen also. And of course, when we spend DKK 10 billion of your money -- of the investors' money when we do acquisitions, I guess, it's also relevant for you to be able to see that we actually have seen this development. So we are pleased about the companies we have acquired. They have all generated value for all the shareholders. So the industry is still fragmented. This is how it was 10 years ago to the left-hand side. So it's not just anybody that we have bought. It's 3 sizable respectively, market-leading companies. But we still believe that there are room for further consolidation. We are full of aspirations to continue the journey in our company. We feel it still makes a lot of sense in our industry where scale is very, very important. There could be names on the right-hand side on this list that we would like to acquire, but it could also be companies outside of this list. And it remains to be seen what the future looks like. But it's still a fact that the combined market share of all the companies you see to the right is still something between 30% and 40%. And in other industries, one player alone would have a market share of 30% to 40%. So there's still room for further consolidation. That's the message we want to send across here. So from a capital allocation point of view, no change. I think it has been consistent for the last 20 years. I think this is also what is important in the company, that you know what you get, that we are not changing our minds all the time as to what we do with the cash. We still have the opinion that we can continue to convert 100% of our earnings to cash going forward. So just if somebody was in doubt, just to make it very clear, we want to repay debt if we are outside of our targets. We are way, way below our target of 2x earnings right now. Number two, from a capital allocation point of view is value-creating M&A. And number 3 is giving the money back to shareholders, primarily through share buybacks. And you can see that the M&A principles that we have had for many, many years, they are also unchanged, so nothing new on that front. Before I finish, I just wanted to touch upon some of the trends. A lot of things are happening in our industry. We are super happy about that. That makes it actually easier for us to grow with customers because we take part of that also, and we have strengthened service offerings to give to the industry. Of course, there's a lot of speculation right now about global trade flows, what's going to happen. Will globalization continue? Or will we see a more fragmented world? We are of the opinion right now also from speaking to our large clients that globalization is here to stay. I always take my iPhone up and say the day that this phone is going to be produced in Texas with components also being produced in Texas, it's a day that I will never see for sure. So we do believe that the globalization will continue. Supply chain -- the supply chains of the world, they need to be more -- become more resilient compared to what we have seen. We will see changes in the supply chains, but we are of the opinion that we will see not a fragmentation, but we will see more complex supply chains in the world going forward. Sustainability, decarbonizing our industry will be a license to operate for a company like DSV in the future. We see that going forward, and you will hear Lindsay coming up talking about the very ambitious targets we have on decarbonizing also. What we do in our company, I think it's nice that we have. Actually, we can say due to the knowledge we got from the Panalpina acquisition, we are amongst the leaders in our industry on that. Digitalization and automation in a company where 70% of your cost base is related to head count is very, very important. It's also something that will take some of the day-to-day I think we are also in a situation where we can show that we have a satisfactory situation. And the proof always for me lies in the conversion ratio. So if you are to establish -- if a company is highly digital and have good processes, you should look at how much of the GP is left when you get down to EBIT. It tells you about the productivity of the company. And without good processes and good digital capabilities, you simply cannot have a high conversion ratio. Distribution challenge or channels are also changing. I think that also is positive for a company like DSV. We have and you will probably hear that or you will hear that from Brian also, I think today, strengthened our competencies within e-commerce, and it does not go against the traditional B2B. The shipments still need to get home from China, for instance, and then we will use our e-commerce and e-fulfillment centers. To do the last mile distribution. So I think we -- these are all 4 pillars that we will also spend more time on today. So the last thing before I finalize something which is very important to me personally and to all of us in the company, I think it's a super cool picture, by the way, that we have found. We talk so much about IT. We talk about digitalization. We talk about algorithms. It's great. It's fantastic. We need that every day in the company. But there's one thing we need even more it's skilled and good and loyal employees, and we have that in DSV. It's still a people's business. It's very, very important to say. No customer the last 2 years would allow their supply chain to be run by some algorithm in a basement in California. I can guarantee you that it's not working. So it's the people that makes the difference in DSV. And we need -- and we have that -- we have -- I was just in the U.S. the last couple of days, I was in or last couple of weeks I was in Chicago, I was in New Jersey, 2 very large offices in DSV, probably 500 to 600 people sitting in our New Jersey office, it looks a little bit like this office. Fantastic, really nice Scandinavian furniture, totally refurbished. And this is not the traditional kind of freight forwarding office that you enter into the U.S. So I think we are an attractive workplace for the talented people from our industry. Also, our culture with empowerment, decentral organization still and the accountability is something that attracts people to DSV. And then last but not least, I think we can all be very, very happy and very proud about the fact that we have, I know for sure, we have the most stable management team in the industry. People do not leave our company, and that's something we should not underestimate. That does not mean that we do not get new inspiration. We do that. We add a lot of new resources also on management level when we do acquisitions. But we don't have to go through the hassle of people changing all the time. It's something that you guys should also not underestimate that has been a really big part of what we have been doing. The last thing is the new purpose that we have in DSV. I'm just going to talk a little bit upon that. We have defined our purpose as a company. We want to keep supply chains flowing and then we had to put in also in a world of change. It's obvious that we play an important role our people are proud of what they do. We have always known that what we do is important. But to the outside world, we have been a company that has moved things from A to B and how difficult is that? We have known if we did not go to work you go down in the supermarket the day after, it will be empty. So -- but also for our employees, what we have done during COVID and also now in support of Ukraine, it has actually felt really great. So we have filled our purpose stronger in recent months than we have maybe before. So what is it that we want to achieve? We want to have sustainable growth. That's the vision of DSV. We are here to support our customers and in a service industry, we always have to take their needs first, and I'm sure Rene will come back to that. Of course, we also need to generate some opportunities for our employees and grow the value for our shareholders also, as I said in the beginning. And how do we do that? That's with the mission we want to continue. I could all -- I don't want to say we want to have because I think we have that, but we want to continue having a high degree of focus on operational excellence. And this I can tell you is something that Jens will also touch upon in his presentation. So with that said, just if you are in doubt about what I've been saying, just to wrap up, what is it that I have wanted to, which messages is it that I wanted to get across to you is the earnings per share. We're happy about that. It's grown 28% CAGR since 2015. There's no change in the M&A philosophy of our company. It is a very, very critical part of our capital allocation policy. We simply believe that spending the money that the company generates and sometimes a little bit more than that, in consolidation of the industry is superior to just having a dividend or a share buyback. Then we want to grow as a company for our -- to grow. We want to grow faster than the market. You will hear that from Carsten later on for our customers, employees, societies and not least also for the shareholders of DSV. So that said, it's over to you, Jens, and then we will take Q&A after Jens' presentation. So thank you.

Well, thank you very much, and good morning, everybody, from me as well. I'll just check the time so that we have the time for what can I say, the Q&A session as well because as you all know, some of these things I can actually talk quite a bit about, but I will just address the change that we've made in the management team. And when I started in 2002, I mean, we've probably grown quite a bit since that happened. And in the company, I mean, what can I say, a CFO would typically cover many of these areas that we are talking about up here. But since the company has grown quite a bit, we could sort of not really keep up with the structure that we had. So we decided to let Michael take some of the work. He was doing much of it anyway. But also, I guess, to formalize it a little bit and sort of split the role into 2. So that's sort of the reason behind it. There's been quite a few questions about it. So we just thought we would address it on the slide here. And if you have questions to it, please feel free to ask them separately. So when we work, and Jens Bjørn talked about strategy and basically what is it that strategy means to us. Well, I think when we talk to many companies or whatever we always talk about, I have this application or something that can do something for me in serving our customers. We would rather have a focus on what is it actually that we want to do for the customer is the first thing, not via an application because that comes later on in the discussion, but we really try to say what is it that we can do, Jens Bjørn alluded to it, we have a network business. And let's say we would dive a little bit deeper, what is it in our network business that creates value? We could then try to say, well, let's say, for Road, the European group, its network has a much higher value than the FTL business has. So perhaps we want to focus on that. Well, if we want to focus on that, what is then the service catalog? What does we need to do for the customer so they will choose us? Why would the customer choose us? This is very, very important. Then once we figured out what this is, and we can sort of -- we have a pretty good idea about that, then we can say how do we then want to operate it? What's the workflows? What's the user interfaces? How are we going to do it? And first, then we're going to talk about what kind of application is going to support us. And I think that's why you go wrong on strategy for many companies that you then do this. And then, of course, if we want to do this, we need at the end of the day to have control over our data. So they are in databases. So what we try all the time is to consolidate our data on these platforms. And of course, then what lies behind it is then the consolidation of our data centers. Jesper will come and have some words about this a little bit later, but it's a key enabler for our strategy that we have control over our plans and road maps for this stack that you see up here. For every track, so to say, because if we can't do that and don't have that, then it's very, very hard for the company to grow at the pace that we've been doing. So we always measure in 3 things when we talk. We always talk about the transparency first. Then we talk about productivity and then the scalability at the end of the day. And as Jens Bjorn talked about, the first thing is, in reality, the transparency so that our operators, they know what they're doing, and they take fact-based or informed decisions when they sit and do the business on a daily basis. So what we have found when we buy companies, we find that they often lag information. It's not because it's bad people, we buy, but they simply don't have the knowledge. So they wouldn't take as good commercial decisions as our staff. So it's part of the empowerment -- and people, they like to go to work and create good results. You don't have to beat them up to do that. They do it on their own, but we have to put them into a position where they can be successful. So transparency is very, very important for our staff when they come into the office. The next thing you have to give our staff is productivity. So if they have some good tools, infrastructure, as Jens Bjorn alluded to, then they will be able to produce more. And it's actually also important for M&A strategy that our staff can produce more than the staff of the companies that we acquire because otherwise, we cannot take out resources. And then there's really no business case. And then the hardest part of it, and that goes both for the organization, but also for the infrastructure is the ability to scale. So the way we govern and manage the company and the people that you're going to meet today from the team, they have all created a situation where their teams, they can handle this volume that we have. And that's not something that you say forgiven. It's basically a management structure, a philosophy you need to have -- so that's very, very important for the scalability. But on top of that, you also need then the infrastructure to be able to handle this growth. And there's so many things you need to do that, and it's really hard work. But once you then get that, you get this business and an operation that people would like to call a platform business, if you have all these things. And that's in reality sort of what we're trying to have in all the business areas. In certain areas, we have more and in some areas, we are on a journey where we should be able to do the same. If you look at it from the customer perspective, because at the end of the day, they have to pay the invoice and that's how we make our living. It's clear that today, this demand-driven approach from the customers, they want the transparency so that they know what is going on and basically more or less on demand. So whenever they would like to have information or status, they should be able to get it. Of course, also the KPIs and the business reviews, they need to be aircraft. And now, for example, also on the CO2 reporting here, I guess we all have to opt that type of reporting so that the quality gets better and better. So that the initiatives that we take they also get measured correctly and that we sort of all get the benefit of the investments that we make in the decarbonization productivity, of course, also very important for our customers so that we deliver a very efficient service to them. And also pricing is key in this industry, whether we like it or not. So also for them, if we have high productivity, they will be able to get part of the value out of that. And then, of course, the scalability, it's clear that if we grow, let's say, we bought GIL, now in the Middle East, we have a much stronger offering than we had before, or UTi in Africa, or just in many of the countries where we have increased basically the service portfolio that we can offer across the board. So scalability, also very, very important. And you can then also look at this picture from another angle -- basically from a DSV perspective, of course, we need to create value for our owners. That's very important as Bjørn talked to that as well. And I think also if we sit and look at it for our customers that pay our bills, we have to be able to create value for them and develop the value proposition so that we stay competitive. So you can also basically look at it from these perspectives. Then we can talk a little bit about the capabilities and the digitization that we talk -- sort of that we are thinking of. What is the process? How is the company running? What is it actually that is happening? And of course, we have a sort of a simplified process here where we talk about some quoting, some booking. And what does it mean for the customer tracking the events we just talked about? And of course, the way that we exchange information with our customers, and at the end of the day, of course, also get the billing in place. So if you said and look at this, you could say, it's fairly simple, but it depends on what type of transaction you're doing, if it's customs formalities, if it's complex import from the Asia Pacific, there are probably 200 fields you have to populate in databases in order to get the cargo from A to B. When you move cargo, you have a physical flow and you have a digital flow. So if you sit and look at that digital flow, it could also be simpler in a simple route, let's say, domestic shipment in Europe, it's far fewer fields. But the fewer fields we have to fill out with, what can I say, human intervention, the more automation we get, the higher conversion ratio. So this is in reality what we are working on all the time. If you look at from an operational perspective, you can see there's workflow automation, there's workflow automation order across the board. And this is what we spent quite a lot of resources on with the divisions to have road maps where we try to automate to a further extent than we have seen before. We have basically been doing that for many, many years. And that is what has driven our conversion ratio up. And also then when we do M&A, it is very important for the evaluation of the conversion rate. We take out the infrastructure of the companies we buy and add more volume to the infrastructure we have. This then gives us a higher conversion ratio overall or economies of scale. I think they called it in the books that we read when we went to school. So in reality, that's what we are trying to do all the time. And let's just try to focus on, for example, booking. And we can then see where we add within different industries here. I just have to check the time so you get the Q&A. So you can say -- you could get bookings in many different ways. In the past, you've got really many manual bookings and you got some EDI, which is very common in our industry still. Many customers have low, what can I say, sort of quality in their infrastructure, so they can only exchange in the EDI format. Then EDC is basically our purchase order management tool where we handle purchase orders for our customers. And then myDSV [indiscernible]. And then, of course, API is the modern way of exchanging these days. It's also something that is growing quite a bit these days. So if you look at the different divisions, for example, in Road because we have more than 40 million shipments. We have to be able to exchange the data in a more efficient way because there are really many transactions. It's also less complexity, we have to say so. So let's say, in an ocean if it is 8 billion shipments that we have in the division, sort of ish. It's more manual because, in particular, in these days as well where there's so much disruption in the supply chain, you would have a more manual approach. But of course, what we are trying to do is we're trying to move up the, what can I say, the stack so that we get shipments in that have a higher level of data quality. You have to remember when you talk about this, that we're only talking about the booking process. There are many other things that you have in your workflow that affects what can I say, your productivity. But you would like to get the data from the source at a high quality so that we can basically automate our processes. Otherwise, if you take an [ Ocean ], We would have to key in quite a bit in order to complete the last fields and get the booking in such a state that the cargo can move seamlessly for the rest of the workflow until we send an invoice. To have a picture framing this you can say digital capabilities under one axis and basically the logistics capabilities. And we've tried to put some word on what that could be. So of course, if you are a digital player, you have an app, and you have integration capabilities, that's in reality, what you have. You don't control any kind of infrastructure or whatever, but you have really, really good IT that is very easy to integrate with. If we sit and look at us then what can I say. So it's very demand-driven. It's very easy to work with and all that. If you look at us, what do we have? Well, if you look out the window down there, there's a cross-dock that enables you to do -- group us. So consolidate cargo. In an Ocean, you will call it a CFS, a Container Freight Station, you will control that so that you can consolidate cargo as well. A digital forwarder can't do that in their own network. They don't have that capability. They simply don't have control over that infrastructure. We will then have many types of service offerings where if you have a fully digitized flow, and a sort of a very small service catalog, you can't offer the same services as we do. We have global REITs, so we sell all over. We have all these customer relationships we've had for years. And of course, the carrier relationships, we also have -- you will hear more about that a little bit later. And then, of course, we have the physical infrastructure. We also take responsibility on the ESG side, which is highly valued by our customers. So all these capabilities we have. So what we need is in reality, an app and integration in order to get off to the corner. Now would you rather have to work on an app and integration? Or would you rather establish basically thousands of locations? I think that we are of the opinion that we will get up to the right-hand corner sooner than our competitors. So basically, my job is to continue to develop the infrastructure of DSV. Michael will do all the Audit Committee and all these interesting meetings. I don't know where he is. So -- and there's a lot of other stuff as well, obviously. Transparency, productivity and scalability is part of most conversations we have. And I think that we both need the digital competencies, but certainly also the classic competencies that sort of we have within our industry. And then I feel confident that nobody is going to disrupt us at the end of the day. So that was it from my end. So now let's have a Q&A session.

Excellent. Thank you, Jens. And if you're here in the room have questions, raise your hand, then Sebastian and Alexander will come with a microphone because we have to remember the people joining online. But in the meantime -- sorry, we already have a question online, so we can start with that. How do you see the competition for M&A? Do you see heightened competition from other freight forwarding companies or maybe integrators or shipping lines? And can you share some financial hurdle rates?

I don't think there's a big change in the competitive landscape when it comes to M&A. Sometimes, we have a single track kind of like we had with agility. There was 0 competition. They wanted to partner up with DSV, which we were very proud about. Of course, they had certain expectations as to what the price would be. But I don't think it has changed a lot. We have seen that new entrants are coming in, trying to buy a couple of logistics companies. But for the companies, we would like to acquire, I don't think there's any big change. I don't know, Jens, if you have any views on hurdle rates.

No, but if you look at it, I think we have this rule that we have for the capital allocation, we follow that for years and years. So in reality, we have to make the return on invested capital that is above 20%, then we are happy. We believe that we have a good, what can I say, understanding with our shareholders that, that is what is required in order for us sort of to continue to get access to the capital that we need, and that's sort of unchanged.

Great. I think there was a question from Lars here. And please state your name and company.

Yes. Lars Heindorff from Nordea. A follow-up on the M&A. I think one of the DNA in DSV from many years have been the ability to integrate these companies and turn them around. As you've been growing larger over the years and the M&A also became larger, so how do you protect that DNA and the commercial culture assuming that you're going to make even large acquisitions in the future?

It's a relevant question. I think so far we have managed to do it. We see no risk as such that the culture and the DNA of our company will change. we are changing every single day. We are a very different company now than what we were last time you were here, but the nucleus, all of what we believe in it's still the same. It's basically the same as it was also 25 years ago, when some of the 10 founding truck drivers were still running this company. The core principles of what we believe in, but that does not mean that we run the company like we did in 1976 or '86, for that matter. So it's this balance. But we believe very much in our way of doing it and a company can only have one culture also. And with the deepest respect for the acquired companies, we embrace all the new ways that we also learn about when we acquire companies, but the core kind of competencies or the core culture of a company can only be one, and that's the culture we have. And so far, we have seen that the acquired companies, they also appreciate that at least most of the people that come from those companies and they feel really welcome and they like our culture also.

Maybe Cristian over here.

Cristian Nedelcu from UBS. Can you tell us a bit more about where you think you are on that journey of productivity improvement in Air & Sea. And maybe can you give us a bit some numbers or some ballpark estimates? How much more you can do over the next few years there?

We maybe preempting the agenda a bit. So maybe we can wait with that until we have the Air & Sea session, if that's alright.

Alex?

Similar but related question. Thank you very much for the slide on kind of the journey from manual to APIs on booking. Does that imply that there's more upside to the 50% target over the very long term? Is 50% kind of as high as we can go? Any thoughts around that, please?

Yes, if we look at our conversion ratios, I think we started much slower historically. There are still road maps where we drive our productivity up and basically the automation levels are higher. So we would normally set the targets and have sort of a 5-year horizon on them. And of course, sometimes we have to adjust them a little bit on the journey because we made it sooner than we thought. And I don't see that that's going to change that type of behavior if we look at it.

I think we had Michael over here first. Sorry, if I miss something.

It's Michael Rasmussen from Danske Bank. A question on the carriers, which seem to have been moving more and more into your field over the last years here. Could you comment if this has made you change the strategy, how you think how you're going to evolve over the next 3 to 5 years? And also when you meet them out at large tenders, what is it that makes DSV stand out in terms of winning these tenders? And where do the carriers win from that perspective?

You use plural, carriers. I'm not so sure about that. You should maybe say carrier. So I think it's very, very important to say there's a lot of carriers in this world. We have had several sessions with CEOs of some of the largest ones in recent weeks. A lot of those have said to our face, "We are not competing with you. You are our customers. We want to grow with you." Our strategy is the same as it was 10 years ago. There are different ways of looking at this between the carriers. But what certain carriers or one carrier has done has not made us change our minds at all.

I think we have Steve. And Steve remember to mention the company.

[indiscernible] from ABG. Just a question around -- we talk a lot about M&A -- and M&A take a lot of attention among investors and analysts. A question about the organic growth. How do you ensure as an organization that you've been doing 3 acquisitions very close to each other? You don't grow really organically during when you do M&A, how do you ensure that the organization still focused on growing the business organically or not just wait for the next transaction to be made.

Maybe you can talk to that, yes. It's about the transparency and the data and the reporting on that also.

Yes. But of course, when we do the integration, it's sort of you lose some customers in that phase because that's typically then what happened in particular from the acquired entity. But then if the organization sort of can be much more growth-focused than to retain customers that you've taken over because that's really where the efforts will be in that transitional phase. Then I think there are some slides a little bit later on, if you take a little bit longer horizon where we've, for some years, not done the M&A., I think you can see that in these years, we've actually done fairly well. We're perhaps not as much focused on volume as some of our peers, we would like to have profitable growth as well. So that sometimes means a little bit as well for the journey that we have. But we have thousands of salespeople in the company, and we have solid reporting on that, and we're basically also driving that agenda so that there is focus on the organic part. And as I said, if we don't do the M&A, then we've seen our growth rates higher than the market growth, and there's nothing sort of in the way that we operate that should change that. But of course, you could argue that in certain verticals, which we're also doing, we should have increased focus because there are certain verticals that are definitely more attractive than other verticals. So of course, we try to have a focus on these as well.

Great. And I think we have to say, just for the time sake, the last question for this round, but Sathish, sorry.

Yes. If you look at it in your slide, you said about, especially on M&A, bolt-on in Road. What would make it change, say, as you see to Air & Sea? Is it the Road Way Forward platform is what actually stopping you from doing bolt-on rather than full-on large-scale acquisition?

Yes. If you take the road platform right now, we have a transparent platform. We have transparency. We have probably better productivity than most of our peers, but we don't have scalability on the platform to the extent that we need. That's the hardest thing strategically to get access to that. That's really where we can create superior value. And that's when you do the Road Way Forward, then the platform, it has to be more productive and it also has to be scalable. So right now, we're running the Road Way Forward project. I'm sure some -- I don't know why we put a few words on it as, well. And that's sort of the planning for road. There's nothing in road that should prevent us to go to much higher conversion rates than we have today. We simply have too many tasks that are manual today. And if you all promise to be quick, then Alexia, then we will just take one more. Sorry, Sebastian.

And that's actually a short one. It's Alexia Dogani from Barclays. Can you just give us an indication of what is your market share target? What is the end game here? Clearly, only 4% at the moment. How big would you like to be in this industry?

The answer is very clear. We don't have one. We look -- we need to be looking at the targets that are ahead of us and then we'll have to see what the future looks like. It would be so real to think that we should triple or quadruple our size. I mean but who knows? If we -- this company will hopefully also be successful 25 years or 10 years from now and the world could change. So maybe I'm wrong, but we look at each transaction by itself, and then we would see where we get to after that. So we don't have a target saying. We want to be #1 in our industry. That's very, very important for us. Then you also lose focus, then you become irrational and irresponsible maybe also in terms of capital allocation, if that is what drives you. It is the return. Every transaction need to be able to compete with the alternative being share buybacks. And if it is not, then we shouldn't do it regardless of how much we like the targets.

But I could say one thing more to it. Let's say that we come to a situation where you have negative economies of scale. We just don't see it right now. So even if we've grown a lot in Air & Sea, for example, where most of the growth has been, there's nothing that prevents us in the infrastructure or the way it's organized to continue.

Great. Sam, you look like you have a very short question, so -- but you have no microphone.

It's Sam Bland from JPMorgan. Just on that digital journey and sort of improving your digitalization. Can you get to where you need to be yourself? Or are you kind of dependent on your customers and how they deliver the data and provide the booking to you?

Yes. If we take the booking, what we do is we create some reporting on the booking quality, and you're absolutely right that if the customer has poor data quality then of course, they will send bookings in with poor data quality. Then you can work with the customers if they have, let's say, a particular booking that is very frequent, you could ask them to change that data. But to get them to clean up their master data, it means a strategic, what can I say, change for the customer. But you can work on things that matters. And then, of course, with AI, what we do is, in reality, then we would have enhancement of the booking where you would then have algorithms that help you to improve the quality for it could be all the data that you key in, but that's sort of the thinking. So always create the transparency, then we can work with the customers on the topic. What I would say is we have -- we share the interest with the customers. They have the same interest as us. It cannot be in their interest to do manual bookings. It cannot be in their interest that we call them all the time saying you have spelled the name of the consignee wrong or something like that. So it's also a way if we can automate the processes that can actually generate value for the customers as well. So this is the beauty of it. That is not a fight between us and the customers to get a more automated process. We actually share the same interest.

Great. I think that's it for now. A short break. Please be back here in just about 5 minutes. In the next room, where we were before, there is a goody bag for you. You can take one each. It's more the bag that -- than the goods that's in it, but it's for you anyway. [Break]

Welcome back. And also online, welcome back, if you lift the disc in the meantime. Now it's time for Air & Sea. We have a very strong team of Carsten Trolle, Mads Ravn and Michael Hollstein, who will give an introduction to Air & Sea and the market. So please take it away.

Thank you very much. You see we all have the same corporate haircut. So there's a barbershop out here. So just in case somebody has an interest, you 2 guys. Anyway, it's been very, very busy. We've been very busy since we met last time in '15. We bought 3 companies. We integrated 3 companies, and we have done that we believe, successfully. We're almost done with the last one. I'm sure there will be some questions about that. But we've been able to do this due to the DNA or the culture we have in the company, which is empowerment and it's hard work. And just to make it happen basically. So you know the figures, and I'm sure we will have some details about that questions. So we'll go into a little bit of some focus areas, value proposition, digital workflow. Jens talked a little bit about that as well, and volume growth. I know there are some questions about that as well, particularly on Ocean. Also, our -- where are we today compared to '15 when we met last time. It's very balanced today. I'm not going to get more into that, except Africa, if you see, in general, it's little blank. We did go into it some years ago. We also went out of it again simply because of compliance and things like that. So maybe we will come up again in a few years, who knows. But so far, we are okay with agents in that area and so forth. South Africa, of course, is very strong for us. Our focus area after 3 acquisitions, and I know there was a question, what do you do? How do you get into back to business and how do you run the business? We have a very, very strong culture in the organization. And we'll talk about -- I'll talk about this a lot. The culture and the foundation of the Air and Sea division, it's very high and close with our customers. Our customers is why we go to the office every day. And of course, we need to deliver some money to you. We have local leadership and transparency -- transparency all the way, it's every employee has transparency. Every employee can see how much money they make today on this shipment down to all the details and every employee knows where we are today, where do we need to be tomorrow. And then we're very performance-driven. We are a winner team. We want to win, we deliver -- we want to overachieve which sometimes is very difficult when we do very well and now we need to do well even better. But -- if you run a marathon, if you do, obviously, I don't. But if you do run a marathon and for the ones to do and you run it in 2.5 hours, if you run it in 3 hours, you'll be a loser. So you need to do better than the 2.5 hours. And it's similar to what we do when we go to work every day. We really like to win, and that's the foundation of the culture. Then every time, we have bought something acquired or merged. We get better at something we add to scale. We add customers, we add things we do could be IT systems that we take some of the data from. And with UTi we got scale -- the first real scale. We got network, a good, strong networks in South Africa and in Americas. And we got into the oil and gas business, which is kind of paying off now as you can see. With Panalpina, we doubled the Air & Sea division, against scale. We absorbed it very -- I wouldn't say it's nothing. It sounds very easy because we did it fast, but it's not that easy. But we -- and we strengthened our footprint in APAC and in South America. South America, particular obviously, has grown very heavily now and doing very well. And then we got the Air Charter Network and then the LCL network we have added on. So every time we add on, we become better, a strong organization. Agility, obviously, a strong presence in APAC and in the Middle East, where we suddenly got scale, and then we added the chemical business. So again, in some oil and gas business as well. So every time we get better and better. Our value proposition expertise we have, we believe -- I believe we have the best rate for us in the world. We are just better. We are good. Sounds maybe very easy to say, but we are delivering. We have a strong know-how. We educate our staff. Neutrality, we have -- we can use different carriers for ocean freight. So we keep that neutrality, which customers like. Proven products. We give -- we have capacity. We have Air Charter Network. mads will talk a little bit about that. We do have our LCL business, et cetera. And we have systems. So we have the system to really deliver to our customers, PO management. There's thousands of different systems that we deliver every day. And the one thing that becomes more and more important, data quality. If we don't have the data quality, we are -- we will be the loser. We have plus 90% -- 95% data quality. Here, we get into some digital workflow. We have one-file system. So when it's entered in Asia, for example, the import country has the information already. So don't need to be insert information. Integration with major carriers and customers, we saw that Jens showed where we are today in the market, we can do better. We need to do better with digital bookings. Volume growth yields. Actually, one thing I forgot about, we talked about digital bookings. In South America, you have about 270 million people that if use WhatsApp. So we need to convince these people that if they use myDSV instead, it may take a little time. In China, they use WeChat. And there's about 1.2 billion users on that. So that's also a little bit of a challenge, but we'll get there. Market share we aim to continue to gain market share and grow above the market, but not for the sake of just growing. It's very easy to go out and deliver, take customers at make 0 GP, that's not going to give any value to you or staff for that matter. So we need to grow for the sake. We need to grow to make money. It's network business. So we support each other. It's -- there is business. A lot of business out there that is a one-way traffic. So it's obtained in Asia, for example, but it's just releasing with our network. We don't really have a lot of interest in that. When we buy companies, I know that was one of the questions. We lose some focus. We do lose some focus. We have customers and we lose some business, could be there's a nonprofitable business. We get rid of that. We have customers that both use DSV or agility or Panalpina. They don't want to put all the eggs in one basket. That's what we are against. Here, the yields. Where will it end up? I know there's going to be a lot of questions about that later. Where we will it end up? We don't really know we've made a good guess, we believe. We believe it will be higher than where it was pre-COVID, but obviously also be lower than what it is today. So that's our big guess at this time, where airfreight and ocean freight will be low than it is today. However, some of that -- we'll be able to -- some of that loss of yield, so to say, percentage wise, we can actually gain by better productivity. Today, the operations are probably -- and then some will ask how much is that it's going to be, 20% or 30% or 50% or whatever the number is a good guesstimate is probably somewhere 15% to 20%. Today, the operator, we also have to -- today, the operator use about 20% of the day actually doing entry in Air & Sea. The 80% is actually dealt with problems, getting the containers, getting the bookings, et cetera, et cetera. So the issue is not -- it's the 20% that we are talking about. And today, the 80% is spent a lot of that on -- because of the market situations. So that will change. So I'm pretty confident once we see it ease up, there's not a lot of the problems we have today we will start to see better productivity. Something we're very much aware of is something we talk about a lot in organization. We also talk about brace for impact when will the market sort of drop, et cetera, et cetera. And there's some speculation right now. It could go down -- I mean you know that better than me, likely. Are we going into recession and all that stuff. We are very much prepared for all these things in the company and have shown that in the past as well. Here we go. I'm going to be quick because I know there's going to be a lot of questions. So -- but as wrap up is we have a performance culture in our organization. We like to win. We want to win. We have industry-leading margins. We have a strong value proposition, we believe, to our customers. both customers on staff, and we can pursue organic and inorganic growth. We have the organization. We know we can do it. We have the tools for it. So we're not measuring anything and we also have the staff, and we expect yields to stabilize above historic levels. And when I say historic levels, if we talk '19, we saw rates in a few years back from Asia to Europe as some of you may recall at $200 a container, actually below $200 a container. We will probably never get back to that market again. All right. Now I'm going to give the word to Mads who runs the airfreight network for DSV. You're good?

Well, thank you, guys. I am new to Capital Markets Day, but I'm not new to DSV. I've been around for 25 years with DSV. I'm based in New Jersey. I head up the global airfreight for DSV and was actually part of one of the first acquisitions or major acquisitions that DSV did and still around. I came from Samsung Transport back in '95 from right here, actually and been going on for 25 years since then. Nevertheless, I'll talk to you a little bit about the Airfreight today. And in order to understand what's going on in the market, what's going on with how we have been able to create solutions as well as DSV for our customers. We need to talk about where the market is today and where we are heading. So we'll start with a little bit about the capacity in the market and then I'll talk about carrier relationships, how we procure today and then a little bit about our Air Charter Network and how that has evolved. Looking at the capacity. First and foremost, this is official statistics. Capacity is down approximately 4% when you look at it on a global basis. However, it is important for you to understand as well that these numbers are a little bit deceiving. And what I mean with that is if you look at the statistics here in the corner, a lot of the capacity that's come into the market is really not available as free sale, meaning that it's integrators that have brought in more freighter capacity in the market. It is the likes of ourselves that have procured full capacity on charters that's operated exclusively by DSV. Our competitors have done some of the same, and you also have airlines that have now bought their way into exclusive charter capacity, which is not available to every customer or to DSV for that matter. So when we look at true capacity available in the market, it is still significantly down. And there's obviously a lot of reasons for that. But if you look towards the right-hand corner here, you'll see some of the reasons why no surprise, we have our issues in China right now. That will be overcome at some point. But right now, it has a major effect on capacity, the Russia, Ukraine and more so actually the Russian aerospace being closed has a huge effect on where the market is trending in terms of lack of capacity, but more so that the business travel is really not traveling yet. Yes, there is some activity starting to happening. But in reality, nobody is really urging on to go on a business travel trip overseas, especially the long hauls. Nobody wants to go to Asia and sit in quarantine for 7 days in countries where that's still an issue. And that's why we will continue to see a lack of capacity when it comes to belly cargo. Just to give you an idea of the severity of how bad that really is, if you look at the Asia to Europe and also the Intra-Asia and again, no surprise, we are talking about a region here, which has been on lockdown for the most part during the last 2.5 years. It's starting to ease, but the major manufacturing countries in China and also where we see the output going in and out of from Hong Kong is still being affected by COVID. And that's the reason why we continue to see a market that's down almost 50% on belly capacity. So this is what it looks like now for the summer of 2022 compared to 2019, which is really the only year we can compare any normal C2. But just to give you an idea that we are very, very far away from being back to full capacity. A little bit about carrier relationships. Our strategy has not changed as a result of acquisitions. We continue to have the belief that local empowerment is important to DSV. We believe that you can still wheel a deal on a local basis. However, the last couple of years and also as a result of how we have evolved as a company from a tonnage perspective, we do need to have a little bit more steering behind the scenes, and this is where the global product group comes into play makes larger deals. We're talking about block space agreements. We're talking about the charter network and in general, just creating solutions at a larger scale than what we had to do before. We are now a base customer for all the major carriers, meaning that we need them as much as they need us, which is also why getting capacity is not really the biggest issue that we have. It's piecing it together and how do we do the distribution, how do we control the ground. So I'll talk a little bit about that on the China network. But how do we control that we meet a transit time that customers should expect from DSV and something that we are committed to. So this is what the market looks like or has looked like over the last couple of years. We expect that this will continue for a little while longer. Very much a spot market still, meaning that these are one-off trades, something that we are buying into on a shipment-by-shipment basis. There's good reason for that. The airlines have become extremely picky on commodities. They want to piece it together in order to get the perfect payload. So you can have density and you can have volumetric, which is typically how we make our money as a forwarder, but the airlines have now become extremely picky as well. They have less departures. They have less capacity so they know exactly who is who on that plane. It's not just DSV or our competitors any longer. They know it down to the customers when you talk about large volume, which is why it still makes sense for us to do quite a bit of spot rating. So we also ensure that we get the perfect mix with the right carrier. Right carrier may also carry freight for our competitors. They usually do. But if we have the right mix of that particular customer, we are able to price ourselves on board at a competitive level and still get ahead of the game. That said, we are still doing some block space agreements of course. This is more specific to typically, the Asian market is block space heavy. Also, to a certain degree, Germany. Some other markets as well. But it's changed over the years, over the last couple of years, I should say. And the reason for that is on a block space basis, customers still want to stay true to the market. The traditional block space is 6 to 12 months. Over the last couple of years, nobody wants to procure a 6- to 12-month rate. They want to stay close to the market, get the rate down as quickly as the market starts dropping again. It's been very, very turbulent. It's been a roller coaster of a market that we've been dealing with for the last couple of years, which is also why most customers are hesitant in contracting for longer than 3 months. We actually don't recommend it either that they should contract any further than that, unless you want to be on a block space agreement. But that's for good and for bad, meaning that you pay the rate for the next 6 months or 12 months, whether the market drops or not. That obviously calls for some different discussion -- difficult discussions from time to time, but that is, nevertheless, the name of the game. But also the reason why we are only doing 20% to 25% block space agreements, which will most likely increase in the years to come. Our Air Charter Network, about 10%, 15% of our total volume goes on our own control. I'll talk about it in a minute. Here, we can offer longer-term contracts. Here, we can offer more comfortably a 6-month contract. We can do 12 months if you'd like to do that. But you still need to stick to it. Whether you're a block spacing with DSV or you're doing it with an airline, it's the same terms. We still expect you to meet the terms of the contract and pay the same rate whether the market goes up or down. That's also why we are able to go in and lock into longer-term contracts on our own controlled and charter network with some comfort, meaning that we don't lean out too far. We make sure that, let's say, 75% of the base load is covered already. The rest we play in the market and a free sales, sometimes we make more, sometimes we make less. At the end of the day, we look for the right commodities to match up with. The Air Charter Network, this is obviously something that we inherited from the acquisition of Panalpina. Panalpina ran an Air Charter Network for 25-plus years and had a vision of expanding it. So they had a global reach where you could act more or less as an airline where you would use different hubs and then connect it from one, let's say, contrary to the other or even a region in some cases. It never really materialized to the fullest extent on what the vision of Panalpina did. However, the intention of the charter network came in quite handy during COVID, for obvious reasons, when basically the entire belly capacity collapsed. Panalpina DSV now is still flying freighters. So we were utilizing that to the fullest extent. And it was not only, let's say, highly valuable customers or customers who wants to pay more for a specific transit time, your pharma, your automotive, high-tech in some cases as well. It was really everybody, anybody who needed to move airfreight immediately would be interested in the charter network. So it came in relatively handy to have a charter network at the time of the pandemic, and it still has. It has evolved tremendously. Just to give you an idea of what the charter network looked like at the time of Panalpina. This was piecing together, let's say, more of Europe, North America and then with some one-offs into Latin America and Brazil, particular, also with some flights going in and out of China, but still not really a global network if you compare it to the large carriers of the world. The vision of Panalpina was to tie it together, and they were never able to do so because they couldn't scale up to a point where they could fill the plane in each direction. And that's what it's all about today. And this is also how the carriers are looking at the DSV as a customer. Can you fill up the plane in both directions? Are you a good customer? Overall, do you support the entire network? If you support the entire network, well, you are worth more to the carrier than the guy who can only fill the plane out of China, but he cannot fill it on the return. What ends up happening for those guys is that they basically pay for the round trip without getting anything on the return. We are looking at fulfilling both legs, and we are able to do so with the way the charter network looks today. So as you can see, quite a few more routes has been added on to the network. And today, we actually carry approximately 12% of our global volume. In this network, we are doing more loops around the world. Let's say, we cover Latin America, in over North America, continue to China to Hong Kong or we go back to Europe. And we piece it together like this. So not really much different than any other large freighter operating airline would do. What to expect for the future? We are looking at a market right now that's down trending. That can also be explained. It could be a shorter down trend, a lot of it can be related to China. 25% of the capacity out of China has been eliminated in Shanghai. And even though there is some signs of improvement we are very, very far from being back to normal in China. It's only speculation, as you all know, when China opens up, the question comes around every day and nobody knows. That's just a fact. The Russian air space being closed is also something to do with this and the fact that some carriers have simply stopped flying. It doesn't make sense for them anymore to fly around the Russian air space. We call it the Southern route when you go from Europe into, in particular, Northeast Asia. It is so expensive to do that in some cases, it just doesn't make sense anymore. At the same time, with China being closed to the extent that it is, it's really affecting everybody, one way or the other. It's affecting all the countries into Asia. Everybody needs a piece from China. And for that reason, a lot of the capacity has simply disappeared and moved elsewhere. So we're seeing a market that's down trending on the short term. However, we also do believe that there is a huge backlog in China that needs to be moved. The question is how long is that backlog going to take? You can relate to some of the other issues that we have around the world. Are we going to have a strike on the West Coast, on the ocean side of things? If that's the case, you saw what happened last time. Remember what happened last time, we could have again a tsunami of freight that will be stuck coming inbound to especially North America and the United States. If that is the case, we will have a totally different market than what we otherwise could predict for, let's say, Q4. Because at this point, it looks as if it could come down just a little bit after the tsunami that we are expecting out of China. And also, what will the effect be of this so-called tsunami out of China for everybody else, for Europe, for North America? Right now, Europe and North Americas are the transatlantic routes, they are actually doing quite well. No issues here. We typically see a slowdown over the summer, and we expect to see that once again. But what will happen on the other side. So we will see it speculation. At the end of the day, we still believe that it will be somewhat of a roller coaster market for at least the rest of '22 going into '23. At some point, I think it's fair to assume more capacity will be coming in. And also, we will see a slight slide in the rates. I think that's it.

Thank you. Yes. Very warm welcome also from my side, ladies and gentlemen. Thanks for having me. I'm also, like many others of us, not born in DSV. I had a pleasure to join the company 6 years ago during the acquisition of be UTi where I said before 24 years. So in total, 30 years of Ocean background. And I'd like to take the opportunity today to give you a bit of a market update where we stand in the global container ocean market. And more specifically, we'll touch base on where do we stand in view of port congestion. I think you're all aware about this one. Then we will talk a bit about the freight rate development. Why are rates rocket high for a long time. And third, that we also have a look on the capacity situation. Next to that, I want to spend some words on how do we deal with our ocean partners, how do we cooperate and how do we manage through challenging times with our allocations. Furthermore, I want to touch base with you on LCL. And last but not least, a quick summary and also, of course, doing an outlook how do we foresee the future. But yes, first things first. Here on the global map, what you see here, the numbers in the gray bubbles actually reflect the vessels sitting outside of the ports in anchorage waiting to get a berthing window to unload the cargo and to pick up return cargo. I have to admit this is a snapshot. So there's a high dynamic behind these numbers, and they are changing while we speak. Nevertheless, it should give you a bit of a flavor about the magnitude of that problem. It is a real problem. And I trust you all recall the picture that you have seen in the media back from the West Coast, where ships were lining up at the horizon and everyone saying, oh, it's not doing well on the West Coast. But it has softened there a bit, you can argue, but at the same time, the cargo just found alternative routes moved into the Gulf and to the East Coast. And with that, the problem is no longer local or regional. It is really a global problem. While in that globalization every port is interconnected with the other one. And if one port has a congestion situation, has a ripple effect into the other part of the globe. So we have that on the west side, Western Hemisphere. We have big challenges right now in Europe, in the Med area but also in the Northwest continent, be it Hamburg, Bremen or Rotterdam. It's all over the place. And of course, you see the big number driven in China, 350 vessels, of course, driven by the 2 months lockdown in the city of Shanghai. While the waiting time that we have indicated is still rather okay-ish, but it is huge. And many of you will recall that last year, there was that blockage in the Suez Canal with the Ever Given, and that vessel was blocking for 6 days. Now the biggest part of the world -- the biggest container part of the world is now more or less in a slowdown mode for 2 months. So the projection is a bit unclear what this will mean. So there are different voices in the market. If we will see a huge tsunami of cargo coming in. Others are more predicting it's become soft. It will not become that worse. But already the uncertainty in that is already driving the market a bit around. We have seen the SCFI index being on a downwards trend after the Chinese New Year for 18 consecutive weeks in a row. And over the last 2 weeks, we saw slight increases. And that you normally can just argue by the uncertainty caused by the situation when Shanghai city is really opening up again. Next one, I mentioned at the beginning. So what is the background for the super high freight rates that we have now seen for, yes, more or less 2 years already. And prior to COVID, the rates were rather flat with minor seasonal peaks -- but then we know, of course, a lot of the regions went into lockdown mode. And afterwards, carriers as a reaction, were pulling out capacity laying of vessels. And then first, the Asia to North America trade, the TP trade, then Asia to Europe. They recovered back -- they recovered faster than expected. Carrier did not really manage to face in the capacity in the same speed as the demand was picking up. Plus carriers also moved hardware into those trade's paying the highest freight rates. And by that circulation of vessel capacity, the whole global system got out of sync or in kind of imbalance. Next to that, and as a reaction, of course, carriers made use of that opportunity and imbalance. Next to that, and as a reaction, of course, carriers made use of that opportunity and implemented a lot of different charges, be it general rate increases, premium surcharges, imbalance surcharges and the demand was so high that they actually managed to deliver all these increases, more or less by 100%, and that journey was going on and on. On top of that, we had certain disruptive events. I just mentioned the canal blockage in the Suez. We had terminal blockage in Yantian port and Ningbo, also caused by COVID back in the days. And again, the pressure on the capacity further increased. As a consequence, the freight rates really went up, and that has the peak situation in Q3, Q4 last year. And that last Chinese New Year, and I mentioned since then, we saw a slight downward movement. It ended in the kind of high-level freight plateau that was kept, and it's still there. So we see hardly any major movements anymore. And now we see what will be the impact from that situation in Shanghai, dominantly. But we also still have challenges in Tianjin and other areas. So it is one of that overall port congestion topics here. Talking about future capacity. And I don't know if you've seen it on the previous slide with the world map and the headline, it was mentioned that port congestion currently is taking out 12% of the total capacity, which is material. So we have to assume that the terminals and the port operations will get these things more and more under control. So going forward, this 12% will be released back to the market. On top of that, carriers actually have used the strong results of the recent quarters to sign the order books and ordering new vessels. So that new capacity is going to join the trade somewhere '23, '24, '25, actually big time. And of course, they are doing this to expand their fleet but also to become more efficient to reduce the unit cost but also to become compliant with future regulatory requirements. You, of course, know IMO 23, IMO 2030, there's a lot of things going on and carriers have to make major investments to keep their fleet up to date and active. And of course, not every vessel is capable to get retrofitted to meet all these requirements. So there's a certain amount of vessels being taken out of the fleet and going for scrapping. If we put all this together, we assume that the capacity compared to today in '25 will be more than 30% higher than what we see right now. If the demand will increase in the same speed over the same period, that's okay, time will tell, but there is definitely a line at the horizon. A long time, you spoke a lot about shortage about equipment, shortage about capacity. Equipment is fixed, and also capacity is massively on the way to us. To conclude from that, that additional capacity will automatically lead that freight rates will go down or even collapse and go back to pre-COVID levels that I definitely do not share. If there's one thing what the carriers have learned over the recent years, is to play the capacity game. Of course, the ongoing market consolidation being organized and vessel alliances is helping them deliver on their strategies. And as soon as it becomes too hot for comfort for these carriers, they will pull out capacity. So we -- I think there are certain consensus in the market that the rate levels will not stay where they are right now, but it's also clear they will not go back to where they had been 2 years ago. So the truth is somewhere in the middle. But of course, that is an element that we need to consider. But carriers have also become more rigid, which is positive as a higher freight rate level will also give us better margin opportunities. Yes. Just a few words on our cooperation with carriers, how do we design our volume setup. And yes, in general, we strive for splitting up our volumes in different contract types. It's on short term, midterm and long term. I have mentioned a few of different contract types in the bottom line here. So there are different models like open baskets where you can more or less book all your clients under a certain deal, then there are closed baskets where you can only put predefined businesses into a certain contract Mads made reference to block space situation, Airfreight, that already arrived now also in ocean freight become very popular, combined with hard binding terms, penalty driven, which is a good thing because the business becomes more predictable for both parties, and it also has a higher priority when it comes to lifting. So it's a good way to bring higher quality to the supply chain of our clients. Mads also made reference to the situation when you become an attractive client for the carriers if you have a proper [ match back ] ratio. Same story in ocean freight, there's always a head haul and the backhaul and you become by far a better partner if you have strong contribution on the backhaul trade as well. The volumes operated by DSV are, of course, helping us a lot to combine these volumes into packages, which makes it attractive for our partners. From a setup with our carriers, we have segmented and we are dominantly talking about 10 global carriers that are left on a global scale. We have segmented these carriers into 3 groups, while the core carriers, if you can take it by the name, are the ones that we are focusing the most, where we see the strongest strategic value. And within that 3 groups of carriers, we operate more than 90% of our global control business. To give you a bit of a feeling what kind of contracts these are, so across these 10 carriers, the deals on an annual basis are spread between 25,000 TEUs per year up to 500,000 TEUs per year per individual carrier. The grouping and who is sitting in that -- in these individual circles is being reviewed on an annualized basis. Of course, there's also a lot of focus that we have a balanced share across the 3 alliances to [ MD Alliance ] Ocean alliance to keep the flexibility, not to become too dependent. Carriers also changing strategy here and there. So it's something that we are revisiting on an annual basis. And of course, then we consider the innovation power, operational performance, financial performance, sustainability approach from these carriers. So things that we are revisiting constantly and then set the scene for the following year. Yes. Just a few words on LCL. Let's drive a bit into direction, what Mads was saying to the charter network. For decades, ocean carriers have certain share of BCO cargo and NVOCC cargo. Some or maybe one of these carriers have restrategized and lower his threshold to do business also with BCOs, and that is all very beautiful as long as the freight rates are low, but it's not really helping if you look into products which are super volume-driven and require a super strong network capability. And that's why here, I'm making the link into LCL, which is our -- one of our premium products in our Air & Sea organization. We control more than 2.5 million cubic meters, that brings us up to the top, top, top level in that arena. We have 600 own services weekly that we control end-to-end basis. To put this a bit in the ratio, the total volume that we talk about is an equivalent of approximately 100,000 TEUs. You see that on the top header, it actually just represents 4% of our volume, but it stands for 20% of the gross profit. So it's a highly attractive product, and it speaks for itself. So the further development of that business of the LCL and the own Groupage operation is one of the core focus points. The total network exposure that we offer our clients is accounting more than 30,000 origin destination pairs and with that, deliver super comprehensive solutions for our clients. Okay. That brings me already to the last slide here. What to expect? I think we touched on a few points. There is a certain uncertainties. I think we all keep track on the geopolitical challenges that we all see right now in the media that may also have an impact on how the consumer behaves and with that, how the demand will look like. We have the potential strike on the U.S. coast, which may also become another disruptive effect with quite a ripple effect to other ports. We have the situation, and you most likely also follow the development of the investment the Chinese government made for years in the Silk Road which is the rail connection between China and Europe. That more or less collapsed. Trains are still underway, but the cargo owners hardly find somebody who's giving insurance coverage to move all the cargoes to Russia. So there is all that volume and that market size in the meantime is also up to 1.5 million TEUs is now penetrating into Ocean again, is again also serving additional pressure on capacity. So there is, on the one hand, additional capacity requirements, but we also see capacity coming in. And as mentioned, the outlook is that the freight rates will soften, but by far not to the level what we have seen before. And another and last element that we need to consider is the increasing fuel prices. One year ago or 2 years ago, in the meantime, after the first wave of lockdowns, the rates collapsed to $200 per metric ton for the VLSFO fuel. Just a few weeks ago, it peaked by more than $1,000. And just this morning, the 4 Global Ports average was peaking up again to $996 per metric tonne, which is severe, and that is also driving. So when I'm saying the rates are going down, I'm talking a bit about the base rate, while they are compensating effects from the fuel price. So don't expect that the rates will completely go down even if there's more capacity coming in. Shipping will stay on a higher level. But again, I'm repeating it myself, we, as DSV have also benefit if freight rates are on a healthy level for the providers and for us because it creates room for us to generate decent margins. And with that, I thank you for your attention. So we have a little excess time for questions.

Yes. Great.

That's perfect.

Thank you, guys, for being on time.

We are the best. So what can I say?

I have to be objective here, so I can't say. But we already have online questions. So I will take the liberty of starting with one here. It's from [indiscernible] from Nordea. Can you put some figures on internal factors impacting yields? How is the mix between value-added services and markup today and what can impact this in the future?

So pre-COVID, we have approximately 75% of -- 75% and 25% in the split, meaning 75% value-add and 25% on the core Ocean freight or air freight for that matter. That's the gross profit. GP, sorry, yes. And today, it is -- the market is probably 50-50, close to 50-50. We will probably not come back to. We don't know where we will end up, but it will probably move closer to the 75-25 again. That's what we will expect. So we still create and could also be additional what has happened in the last 2 years, different services. So we don't really know where we will end up eventually.

Great. And just one more online. It's from Paras Jain from HSBC. Can you share a ballpark figure? How is the conversion ratio between air freight and sea freight?

It's approximately 50-50. It's the same level between the 2 divisions or the 2 segments.

The thing is we don't have a separate reporting of them. So we operate the 2 segments together in the countries.

Yes.

Great. Guys, with the microphones just get to work with, I think, Dan here first. That's in the front row.

Dan Togo from Carnegie. Maybe to Carsten. Which verticals and capability do you like more. I mean, you've got some Oil and Gas, Panalpina, some chemicals [indiscernible] . That would be the first part. And the same part, maybe more importantly, are there some verticals you'd like to avoid like perishables, I know you some of our colleagues some of your competitors have huge success within perishables. So why not? I mean...

So it's a good question. The perishable business is actually a good business, and we do perishable DSV. So I've been -- something has been said that we don't want it. That's wrong. We want perishable business if it makes sense. If you could make money on it, and there are some guarantees, a big part of this perishable business is mom-and-pop shops. It's a grower in Kenya, who grows tulips or probably not to tulips, roses or whatever, they will grow there. And basically, you deal with that grower in the middle of the field and you make sure you get your money also. We saw from the Panalpina. They did a lot more of this, and we divested some of it. But we also kept a lot of the business, for example, in South America. So we're probably one of the biggest, if not the biggest out of Colombia today, carrier of flowers into the U.S. So we do some of the perishables. So it's not that there's no interest, and we also pursue it but we need to make sure they have money and we get paid and so forth. So that's part of it. Another vertical is obviously pharma. We've been doing great with oil and gas. We returned it from minus EUR 1 million to what will probably make EUR 40 million, EUR 50 million in EBIT this year in oil and gas business. So we've been very, very focused on this. We do automotive already very successfully. And we also -- but one thing that we probably don't do not enough of is pharma, to mention one way. We really want to go in. We have the setup -- we have the setup of the system and so forth. We've been working on this for the last 3 or 4 years. So it's nothing that we are sitting on the stool, not doing anything about it, so to say. But we have to mature also. It's just not -- you just don't go in and knock at Novo store and say we can also do pharma. No problem. Just give us some bookings. It's a little more to it when you get into this compared to a normal shipment sort of say, of machinery parts or whatever it could be. So the organization needs to be set and you need to value when, it costs money to set this up. When will you get that payback? And how do you focus on this? So -- but that's something that we really want to get into. And we are into it. It's not that we don't do pharmas. We do a lot of pharma, but we can do a lot more.

Great. As you say, when Carsten says a number, it's American dollar.

Yes, sorry. Yes. It's real money.

Cristian I cut you off before.

Cristian Nedelcu from UBS. In Air, if we look at the Transatlantic, some of the third-party providers out there are seeing the airfreight rate being very close to pre-COVID level, especially if you exclude the fuel surcharges. So my question is your GP per unit in Air Transatlantic. How does it look like today versus the pre-COVID levels? And what explains the difference versus pre-COVID levels.

It's definitely -- it's probably a combination of both of us, but we have definitely higher margins today in GP also on the Transatlantic. If you look at the [indiscernible] rate, Mads, how do you see it?

Well, the reason why the market is tanking right now is the capacity is going out of China, it's going back on the Transatlantic, just to try and secure some loads. So this is temporary. As soon as China opens up again, that capacity is gone and the ratios will go up again on the Transatlantic. And probably also is a twofold answer maybe also. And what we see some customers be optimistic now saying we heard this rate being very low this is the way the market is moving, but it may only be 1 week or 2 weeks. So it's a spot market, and it's where we see customers don't really want to commit 2 or 3 years down the road, which will be great for us if they wanted to, but they don't want to commit that long because they're waiting for the market to really stabilize. So be a short term, basically.

I think Michael?

Michael Rasmussen from Danske Bank. A question in terms -- in relation to your long-term outlook, the 8,000 and 4,000 GP per unit. Two questions. First of all, when I calculate those levels versus the historic levels, it actually seems like the air ambition are less optimistic than the sea ambitions. I actually thought it was the other way around. So can you please talk a little bit about that? And also maybe combine it a little bit on the wording gradual. So it's not going to tank exactly..

Overnight. I think it's difficult because we don't really know where it's going to end up. So it's the best guess -- I mean it's a guesstimate. We came up with simply because we don't know it's going to be 4, it's going to be 5 or it's going to be 3, probably not 3, but it will be above where we were. We are fairly confident of that simply because of the world has changed. So it's not that we have no ambitions for airfreight versus ocean freight at all. We believe we have grown actually quite fast on airfreight recently. So we have a -- it's just because a box is a box, so to say. On air freight, we have a little bit -- we've grown with the purchases and so forth. So we don't necessarily -- then there's the perishables part of it where the volume is very much seasonal, whether it's Mother's Day and so forth. But there's no really difference in that for us. We just believe that the market will be -- is just to give you an indication that we don't believe the market will be where it was, and we don't believe where it was a few months ago, either. And the second question was? I don't have Alzheimer's, but..%.

The gradual drop.

Yes. The gradual drop Will not be like this. Even though it went like this up, we don't believe it will be like this. We'll see some of these markets. We've seen some spot markets on Ocean freight also on the Transpacific, $6,000 last week. It's 1 week. So if you base your strategy or a buyer basing that price on your whole next year, that will be a bad move. But it could end up with $6,000 or $5,000. Could very well be, but not now. This year, we'll probably see some movement, but it's not going to be like this. Throughout the year and then we see even more capacity coming in on ocean freight in next year, and there'll be quite a bit of a capacity. And I think one of the questions is out their capacity coming in, how much are they going to take out of the old stuff? How much is going to be scrapped. Is it going to be -- that's a level they have the carrier, they can say, "I'm going to scrap a little bit more, or I'll scrap it a bit less."

Muneeba?

Muneeba Kayani from Bank of America. A question on the airfreight market. We've seen quite a bit of transaction activity happening like CMA has disagreement now with Air France. Mr. Kuehne taken a stake in Lufthansa. How does all of that, do you think, impact the airfreight market over the next couple of years? And then how are you thinking about your mix between, say, spot block space and your own charter with these changes happening?

I don't see any negativity as a result of this. As a matter of fact, you've seen the latest move from CMA. They are now entering their fleet into the Air France KLM portfolio, which means the capacity will be available to DSV as well. Whether it's a CMA, KLM or Air France on the side of the plane really doesn't matter for us, what matters is that its market levels. So we actually see it as a positive that is not being marketed as a single carrier any longer. Who knows what will happen with Mr. Kuehne's investments and the CMA bid, that's pure speculation at this point, but there doesn't seem to be a long-term plan, at least on what exactly it is. And it doesn't add any capacity at this early stage. So yes, we don't see any immediate issues.

Maybe, Mads on the mix block space and will it change?

Yes. The block space will change to a certain degree. There will be more block space in the future. This relates back to what I was saying before about carriers getting more picky on the commodities in order to maximize the capacity on the plane. So yes, they will start getting more picky. And for that reason, we should expect to see the spot market dwindling a bit. It will always exist, but not to the extent of what we're seeing now.

We used to be more like 50-50 or maybe even a bit overweight on the block space. So it is an unusual situation now.

A lot of the larger customers today, they go out with a bid right now. It's valid for 3 months. So to say. It could be 6 months, but mostly 3 months. And they will say, up to just coming up with 3,000 kilos or 5,000 kilos, these are the bids for the next 3 months. Everything above that has to go up the spot market, where they will ask maybe 3, 4 orders. What is your charges? What can you build me for the 10 tonnes shipment of 20 tonnes or 100 tonnes shipment. So we part of that as well. Obviously, when you have the business, you have a bigger chance getting the spot market as well. So -- but that's usually the way it works. I don't see that, that will likely change when the market stabilizes. So we won't see as all these high spot market rates out in the market.

There's one from Rob here in second row.

It's Robert Joynson from BNP Paribas Exane. Just a question on productivity. We know that DSV and Air & Sea is extremely productive. We can see that from a conversion ratio. But when you look at more granular metrics, such as say the number of files per employee and you benchmark those against competitors, and I'm sure you have much more visibility on this than we do. What do you see? I mean, presumably, you can't be best-in-class in everything in this respect. So I mean mine, we prefer it when we see upside best-in-class and everything. So what do you see when you kind of look around? I mean what upside is there when you benchmark against peers?

Well, first of all, I don't -- I can only see what they show us, our peers. I don't know their business internally, how they measure things because there's also -- we've seen in the industry also people measure containers, 2.5 containers. So certainly, it doesn't work like that. So we can only see our own figures. We believe there is an upside. I've kind of alluded to it once the markets stabilize and operator don't have to spend 3 hours on 1 booking because they need to find all these and only spend 1 hour, obviously, automatically, you get productivity up, meaning you can get some of the staff free again that we don't like to have a lot of staff. I mean we like them, but it's -- the idea is not to have a lot of staff that don't do anything, correct? So once we start to see that we have -- we run KPIs every month, and some branches, they can run their own KPIs they'll do it every week. They do some will do it every day, depending how early people are. But in general, we run it every month on behalf of the country. So every month, the country manager around the world will get a KPI set. This is your KPIs against the rest of the world. So why can you not build on time? Everybody else can build on time. I'm just -- we have some internal KPIs, and that's how we measure this every single month. Some has said everything single day, sounds a little absurd maybe, but they have the capability to do this. So we can see our productivity has fallen. We can see that. We are not happy about it, but we also have to serve the customers. We also have to provide that service, and that's what we are doing. It will probably be -- we will start to see some movement. This is just speculation probably maybe later end of this year, hopefully. And then we'll start next year when things hopefully will stabilize. We want a stabilized market. [indiscernible] asked me, would you like the market to be like it is today? With customer call in, and they will say, can you get some space and we'll say, yes, how much do we want to pay and we can decide how much we want to pay. That's not sustainable in the market and long term for us, either, sustainable that we have a business that we can scale and we can predict a little bit better so we can change staff and get the staff we want. And I also said when our digitalization, today, it's about probably 20%. 80% of the day is actually the operator sitting. Can I get the containers or why can't I get it and the carrier didn't ship it anyway and so forth. So it's a huge task is not fun for the staff right now and the customer is not really happy anyway, even though we do this for them. So I would say again, 15% to 20% productivity, I would say. It's probably a good guess.

Lars Heindorff?

Yes. Lars Heindorff from Nordea. A question on risk control, if you can go with that. I mean we've seen that the network has been growing immensely over the past number of years. And Also, you talked about the air freight network that you've been building up now. It sounds like you are long in capacity, so to speak, i.e., that you make the space agreement before the customers actually book -- So how do you control that in particular in an environment where we might see declining volumes? Are you able to sort of unwind or downsize this network again sort of relatively fast without any sort of cost.

Yes. I would like to say that we probably pay a little bit of a premium to do a 1-year contract instead of a 3-year or 5-year contract for exactly this reason. We want to get out as the market is down turning and then procure again on another 1-year deal. But at the same time, we do not put a new route in place unless we have 75% backing from either a combination of customers or one single customer. That leaves us 25% of free sale that we can risk by 75%. We are usually paid for 85% to 90%. So the risk is minimal and the upside is absolutely there. As long as you are controlling it on, let's say, a 1-year basis, unlike these long-term contracts where we just can't foresee what's happening in the market in '26 and '27.

Talked a little bit about yesterday. We're not going out to make a deal now 5-year deal. There will be -- we don't see it being very -- we see that as a very risky. If we make a 5-year deal today, at today's market, at today's rates, and that's what the people that leave these aircrafts out, they want a 4- to 5-year deal today at the market today. And we are not doing that. We don't see -- that will be very, very risky for DSV to do that, and we don't want to go that route. But -- and we can get out and it's not like we have 2000 people sitting doing this network. That's not the case. So yes, do we have some people, let's say, we shut everything down. It had to be shut down, I would say. Do we have 150 people, 50 people?

50 people maximum. So yes, we can relatively scale down.

It's integrated in our company and the way we work, contrary to what was done in Panalpina, where it's a completely separate organization we have integrated as part of the organization. So it's not -- you don't have to be nervous there.

There's a question from Sam here.

It's Sam Bland again from JPMorgan. If we look at this 8,000 and 4,000 number and you look at the sort of the gap between those numbers and what you had pre-COVID, is that gap driven more by your view of what the market will be like in 3, 5 years' time or differences to DSV's own business, whether that's types of volume, product vertical, customer mix?

More to market. It's more market where we believe the market will be. It's our internal, you could say, we will continuing to be more cost-effective processes. We will do -- continue to do all those things on a cost point of view, but from a buying point of view, that's what we are looking at. So what we will buy it. And it's -- again, it's custom made It's difficult, whether it be 8.5% or 7.5%, I don't know. But again, somewhere in between where the market will be. And again, we believe maybe some of it will happen in the second part of the year, correct? So -- but also, we are very resilient to these things, and we always -- we can cut costs pretty fast. It's very easy for us to look at our -- based on our KPIs, where are the costs, where do we have too many people and so forth. We do that extremely fast. We did it in 2020. We did a quick one after a few calls, and that's something where we're extremely strong. We staying together. We do this. It's not a big process. It's a few calls, 2 meetings, and we'll do it. And we all do it. So it's.

Great. We have time for 2 questions more, then we have to move on. So Sathish?

Yes. Sathish from Citi Group. If you look at the commodity versus value-add services, you said today it's around 50-50. And previously, it was 75-25, and you expect it to go back to 75-25.

On 2, what's that side, yes.

Yes. But if you look at on the rate side, you still expect that the rates would be much above versus where it was pre-pandemic levels. So how does this actually value-add and commodity fit in with the market is still going to be tight from a supply perspective and still gives you better rates. So orders you're going to bring in more value-add services into your mix?

But the market has changed. The market in the last 2 years, things has changed. Suddenly, logistics is part of the boardroom because the amount of money being spent. So things have changed, whether this is a short term, people don't remember that long. So maybe the chaotic market in the last 2 years people who not have learned from it in 2 years. I don't know. What we believe is that there is still -- and there is a huge demand for value-add services out there. We still have a lot of upsell to do, whether it's insurance or whether it's PO management, whether it's our -- many of the services that we can provide. So the value-add services could also increase more from that point of view. So it could be that we end up with 80-20, but it's difficult to predict. What we just know is that there is a market for this. Right now, the market is higher, has been higher than it's ever been to be able to provide more flexibility and customers are willing to pay for this flexibility, how it will change. We don't really know. So again, it's a little bit of a guesstimate because it was so stable for many years -- it was so very predictable where we were. And now we're just kind of in a tsunami of stuff. So -- but again, we will adapt to this very quickly.

Last quick question from Dan.

Dan from Carnegie. On the yields and a follow-up on that, would you say that you are more optimistic now on these 4,000 and 8,000 than you were, for instance, let's say, 6, 12 months ago? And why is that if there's a change?

Yes, I'm more optimistic about the market. Not that -- we knew the market will come down. I mean, that I don't think. I believe everybody knew it's not sustainable where the market is today but I'm more optimistic if you can call optimistic, it will also be great if the rates were off for that matter, but I just have a bit of feeling of the market today -- just what we hear and just say it's a gut feeling or it's something that we hear in the market. What are people talking about? What is shipper saying? What is our big customer saying? It's a combination of many of these things that kind of we feel that the market is speaking to carriers. They also believe the market will drop correct. So it's not something that is people are saying it will not happen. So we are more or less in line with at least who we speak to of the carriers and our customers. So the market will stabilize. Maybe it will come in stages, maybe it went down a little bit, maybe it did go down a little bit. Maybe it will take 1 year to come down, I don't know. But we know in '23, there will be more capacity coming in, a lot more capacity. The question is going to be, are they going to take out how many blank sailings they're going to do? Are they going to take out these vessels and anchor them up or are they going to scrap all the old stuff that is not really cost effective in today's market? Everything is in the water today. Everything that can say whether it's a robot almost with a container on, it will be out there. But how much are they going to scrap of this old stuff? That's a little bit. But there is a lot more capacity coming in. And some of the carriers, we believe, will start to be a little more aggressive in the market also to fill up this new capacity that's fuel capacity, fuel effectiveness is better, sustainable fuel. That will be part of this, which is being started to be sold on some of these vessels. So I think that, that has -- that is what we believe. Historically, if you look from -- sorry, Flemming. But historically, if you look at I can talk about this all day, but historically, the carriers have been extremely under extreme pressure, correctly, if you look at historically, this -- what happens today has really never happened before. And what last time the market went up was in 2010, and it was only for 4 to 6 months period. So it has to -- it just.

But just Carsten to maybe to Dan's point also. The fact that supply chains are more critical today that customers, they are more focused on supply chain, having robust supply chains, they are more willing to pay for service the supply chains are discussed in the boardrooms. That's another factor that maybe makes us optimistic.

And you would say, I mean, in the Just-in-Time system, which was everybody went to school, kind of learned Just-in-Time because we don't want inventory to sit in the warehouse for a long time. That strategy is changing with the customers. Clearly, I mean a lot of customers, particularly in the automotive industry, in 2020 got really burned, correct. So they have contracts with automotive manufacturing. If we don't deliver this, you have liable for, let's say, $10,000 per car that we're not delivering on time. They have been burned quite a bit. And they don't want to have that scenario again. So we can see a little bit of stockpile coming up more probably. Sorry.

And that's the end of that question and this session. I have to say 5 minutes, then I will start calling you back. But go out and have a short break. [Break]

And with us here first, it's -- and if I go listen heading up our commercial team, Chief Commercial Officer. But -- and we almost have the team ready. Hit it, Rene.

Start?

Yes.

So as you'll notice, I'm the lucky one. I'm joined on stage with 2 people without the corporate haircut, which is actually great. So Lindsay and Eva will be on with me here. So Eva after me. Looking at it, what are our -- what are we facing? What are our customers facing as well? So you'll see, over the last few years, we've seen a little bit of an explosion in the number of incidents, geopolitical environmental issues that our customers have to relate to, and that's obviously something that has an impact on our daily lives as well. And I'll get back to that a little bit. To start with, where do I come from? I live in the U.K. I've been with the company since 1983. So I started as a 4-year old, then you can work the rest out. Very much, I was really proud a couple of years ago, not because COVID happened. But because it's -- I think it's the first time ever that I felt the recognition by external people of what we actually do in logistics as well. Certainly, my friends who are typically in health care, in banking, in real estate, they always look at me with sort of a glare over their eyes. When I say I'm in logistics, they think I'm a forklift driver. So I've left them in that belief. But what we suddenly were hit by was we were announced as being key workers. None of them were, by the way, can I add that, not in the beginning. So when we look at it, we were proud to be the ones that were actually facilitating certainly the need for PPE equipment. We've never heard about PPE equipment to a large scale before. Suddenly, we were sort of the key component in getting that working. We were the ones that suddenly in the U.K. There is many opinions about why that happened, but toilet paper seems to be the order of the day in the U.K. So everybody panic and bought all the toilet paper, so there was nothing left to anybody else. And we were the giants that actually brought the toilet paper back to the shelves. So I think that was the most important. They didn't think about food, but it was all about toilet paper. And when I look at it, what do I believe in? There's 3 main things. I'll leave out Man United. They don't count at the moment, so. But it's about the planet, it's about the people and it's about profit for DSV as well. So when we look at the planet, I think it's important that we're in a transition at this moment in time where sustainability is becoming more and more important. I won't take anything out of Lindsay's presentation, but this is the order of the day. And without the planet, without a clean planet moving forward, there's nothing for the next generations coming forward, and that goes to the people as well. Having been in one company for nearly 40 years, it's also the family you have at home, the family you have at work and the family you have with your customers as well is extraordinarily important. And then it goes without saying that we are here to make a profit, and we are to deliver back to U.S. stakeholders in the business. But it's also important, I think, to say that in the future, I'm a firm believer that sustainability is. So there's a green profit as well. If you don't do it green, you're not going to be there and you're not going to make a profit. So I think it's really important when we move forward. So we'll try to go through a little bit of examples of how we work with our customers, how do we support our customers in what we believe is an interesting time at this moment. And if you look at the trends, are we going to have less incidents moving forward than we've had? Or is it a trend that will continue with more natural disasters, more geopolitical issues that we need to deal with, and we need to guide our customers through. We are very good at doing it. We've proven that. So the operational excellence part, I can definitely for my sake say that dealing with a lot of the big customers, we are good at that. Are the customers happy? No, they're not happy, but they understand the situation we are in. They understand the market as well. The procurement guys have a little bit of less understanding than the guys that are actually working in the supply chain. So I think we get a lot of understanding. We get a lot of appreciation for what we've actually done and what we're actually doing for the customers in general. So I think we are doing well in that respect. So we will go through a little bit on, as I said, the organization. Then we will have an example at the end where Eva will go into one of the industry verticals that we work in the automotive or call it mobility industry, where we do a lot of business and it's an industry in an enormous transformation at this moment in time, but I believe Eva is well placed to give that presentation. So what are the customers looking at? In the recent phase, and it's actually, it's not new. All of these things are not new, but they have probably been reemphasized for the customers that they need to change. When it comes to lack of lead time predictability. It was said previously the -- especially the Ocean trade has generated a lot of problems for our customers in terms of capacity out, blank sailings, et cetera. And that's something that our customers need to work with. So when we look at it, the lack of lead time predictability, combined with lack of visibility and control, it's really, really important to also some of the previous slides that we are in one system, we are able to give better information to our customers than anybody else. I think Jens had it on his slide as well with the way that we work with predictability, but also when something happens, that shouldn't happen how do we work with our customers to mitigate in that respect. And a lot of the cost that goes into the supply chain now is actually based on people trying to avoid having line stops, for instance. I think our industry is going really also in a big transition from being largely a transactional industry to being more of a process industry as well. We need to understand the processes. We are fantastic in the industry at solving single individual problems. We've never had a problem with that. We actually -- I think we thrive on it when there's a problem. When COVID sets in, we take pride in actually solving those issues. But to look at processes is something that has probably traditionally been a little bit harder for us as an industry. Obviously, combined lack of predictability in reality, a bad service when it comes to running your supply chain, combine that with high freight costs and overall logistics costs that's not a good combination when you're trying to run a business as well. So what do we do in order to help our customers through this. And then obviously, last but not least, we have the Green Logistics part as well, which is coming higher and higher up on the agenda. And actually, it's interesting. If you look back, I remember in 2007, January 2007, and Marks & Spencers in the U.K., they launched an initiative called Plan A because there's no Plan B. I don't know if any of you ever saw it. And they had some fancy trailers, and it was on the side of all these trailers. And we actually went into Marks & Spencer with a solution that was based on plan A because there's no plan B. It was all about sustainability, and this is 22 years ago that we sit there with the customer. There was 1 or a few elements in the proposal is that the transit times were longer in the solution we delivered and the costs were far higher. So -- but it was green. I'll tell you, it was green. And the procurement guy, obviously, when you look at the strategy of the company, it came down to the next level, the procurement guy was measured on maybe a different KPI than it just being green. And he looked at us like, "I don't know why you're making this proposal." And we actually had a slide -- the next slide was plan A because there's no plan B. And it was a photo of 1 of their own trucks. I think there's a drive now that the customers really believe in it. They believe that green is good business as well. We need to find a way of delivering those solutions to them. And I think we do well already in that respect. The way just some selected parts of our organization in what we call GCO, global commercial organization, where we support our customers, but we obviously should also support the internal business, so we run the CRM part, the customer relationship management part. In that, in part, for instance, we run our Net Promoter Score that we run for all the countries. We run customer defection forecast. We have well in excess of 200,000 customers in DSV. How do you keep track of which ones are firmly in, which ones are giving you an indication that they might be on the way out, so we run algorithms on that. We deliver that to the countries in order for the countries to actually react to the customers. And we see a clear benefit of doing that. It's very simple, but it's a very efficient program as well. And on top of that, I think there was a lot of questions on the organic growth as well. We support the countries with services around sales training, stuff like that in order to enhance our organic growth agenda as well. We also see and have seen over the last few years, need for different services as well, so call it value add. We have an operation called DSV Lead Logistics, which is a 4PL, efficiently, we took it over from the base of it from UTi when we bought UTi in 2016, and we've developed it since then. And it's a purely digital play to the customers, where we run, we optimize their supply chain. So we do strategic planning, we do tactical and operational planning for them as well. And then we work with 3PLs that are nominated by the customers. One of those 3 PLs typically is DSV. So the play is really for us to be in, managing on behalf of the customer but for DSV to take a part of what we call freight under management. That's the interesting part there. The 2 other, global account management and supply chain optimization. So supply chain optimization has become -- we started it about 8 years ago here in -- based in Copenhagen. And it was interesting in the beginning because people didn't really believe what is it? What is it not? Is it necessary to be required? I think it's fair to see that we see a lot of customers, both existing customers and new potential customers where part of the drive is for us to show what can we actually do to improve on your supply chain. We talk a lot of scarcity of capacity. If you look at it, in reality, when we go in and do studies with our customers as well, it's quite often that you find and maybe that's to Michael Hollstein's point on LCL, if we quite often find that a full container means that it's full to about 60% or 70% because that's the way customers have operated. This is how we do the [indiscernible] we have a container a week and then we utilize it. The reason why they haven't done more using LCL concepts, for instance, or optimizing the containers better is back to the point also that the price was so low that it didn't really pay to do it. That has completely changed. So we work very closely with the customers in that side. So the approach that we have to it is what we call a supply chain scan. We work with our customers on data analysis. We work on interview basis as well to find the pain points that our customers have. Once we found those, we do the implementation of them as well. So we always say, as a consultant, we have a bigger risk than an external consultant because we have the rest at the customer say, "Yes, this is all well and good. Let's implement it." And then we think, "Oh." So we have to be really, really honest in it's something practical that is -- can be implemented for the customers as well in order to benefit them. So we work an enormous part of the effort into -- we have a break. This is good. That was a quick break, by the way, if you noticed. So we have network design and optimization. So actually, the inbound networks, how they work -- we do a lot of the transport planning, how can you plan your transportation better in networks, a better utilization of the equipment as well. And then to the points that have been made earlier as well, how can we optimize the inventory? And optimizing the inventory might seem easy, but it relates to the forecasting you have at the other end. By the way, the forecasting customers typically have is largely between 60% and 70%. That's sort of a random figure. So you're trying to optimize something that is a completely moving target. And that's quite interesting when you have a moving target at 1 end and you have a moving target at the other end, then you're really in trouble. But that's what we try to work with the customers on as well, very much to do also here with master data. When we look at global account management. We operate a central account management of more than 100 clients and they work across either 1, 2 or 3 of our divisions in DSV. These are the verticals, automotive, industrial, retail and fashion, health care, technology and renewable energy. It represents -- those customers represent in excess of 20% of the GP of DSV. So it's quite important, and it's a quite good dialogue. The people that we have in there are people who understand the vertical and they understand the industry they work in, obviously. They understand the customers they work with. They deep dive into the customers. And we also see, from all the work that we are doing with them. This is where a lot of the new value-added services are coming from. Understanding what the customer requirements are, understanding what the challenges are. That expands the business we do with them. And we can see that it expands the glue between them and DSV as well. It's a combination of what we've taken over from UTi, from Panalpina, from GIL, actually from Frans Maas and from ABX as well. So it's a big combination. There's a lot of people in there with a lot of different backgrounds, but it's working pretty well. So to that, how do we work in the verticals as well? Eva will give you an introduction to the automotive side, which is an industry that is not only impacted by everything that goes on in the world at large for everyone, geopolitics and the environment, but they are also in a massive transformation at this moment in time. It's quite interesting, some of the dialogue we have with a number of automotive customers as well. They've always been raising. It's always been about volume. How many hundred thousand cars should I produce next year? Recently, we were with 1 in the U.K., not to be named any further. But they had a target. They're nowhere near the target they originally had in number of vehicles sold. So they are a lot lower than that. But all the vehicles have got everything selected. All the optional extras have been selected on them. So their yields are far better. Their end result is far better, and we might actually open up the question to volume in that respect, at least for that part of the industry. So they're doing really well. And what it also means is with the yields going up, they can actually afford. And typically, I would say, in the past, automotive was 1 of the most difficult industries to work with when it comes to cost. They're actually a lot easier now because their yields are up, and it's attractive business both for the customers and for us to actually do it even with the disruptions that we have now. So with that, we'll have questions at the end, Eva.

Hi, everyone. My name is Eva and I am DSV's subject matter expert for electric vehicles and future mobility concepts. I've been with DSV for about a year now, and my background is a little bit different than that of my esteemed colleagues. I actually come from industry. I graduated from university at the downturn of the economy, the midst of the recession with a degree in mechanical engineering and a vision to be a design engineer in the automotive industry. I got out into the working world, and it was quickly apparent that the world was changing, the economy was changing, the industry was changing and new opportunities were emerging through the disruption and the chaos. I felt like I had a very good opportunity to change my initial plan and adapt and learn and see what the world had to offer. My career took a very different turn. I remained a design engineer for many years. I worked at large automotive OEMs, and I also worked for some small ones. I am one of the original engineers that designed and launched the Tesla Model S. And after that, my career took a turn towards the regulatory side, where I worked for the United States government, writing crash test regulations and developing new dummies. Later in my career, I saw additional opportunity to go back into industry, back to the OEM life, and I learned very quickly that there was a lot of opportunity for growth in our operations department. At the end of my time there, I was responsible for the operations and for purchasing of logistics services for the R&D center, our manufacturing center and also for aftersales. So my perspective and depth of knowledge of the automotive industry and of cars, in general, is really what has carried me through. I am very excited to be part of DSV now to be here in front of you today because I think that I'm in the right place at the right time to capitalize on all of the change and the disruption that's happening in the automotive industry. On top of all the other chaos that we've talked about today, on top of all the issues with global supply chain, the automotive industry itself is experiencing the most disruption that we've seen in about a 100 years. Gone are the days when we could all talk about large volumes, chasing certain volumes and finding efficiencies. Everybody used to be headed in the same direction, maybe a few degrees off from each other. And now we have a lot of changes and opportunity. In addition to the changes of the industry itself and chasing after sustainability targets, our customers have the opportunity to grossly change their supply chain. Forever, the automotive supply chain has been taking parts, making larger assemblies, turning them into cars, selling them to customers and maybe providing some extra spare parts at the end-of-life. We have the opportunity now to look towards a more circular supply chain, which is not new to DSV, even though it might be a new concept to some of our automotive customers as they shift more towards the concept of mobility. Circular supply chain is something that we've seen here at DSV and several of our other verticals, and the opportunity to provide new services and new offerings as our customers change to give them additional opportunities for collection of the vehicles end-of-life, recycling of these batteries to address some of the concepts about raw material shortages and maybe even providing answers to supplementing the questions about whether the electric grid is sustainable for the growth that we see. Globally, there are about 1.4 billion passenger cars out in the fleets today, and we've only achieved about a 7.2% penetration of electric vehicles. Despite that, it's already a total addressable market of EUR 1 million and that's a figure that's expected to at least double by the year 2030. As our customers are changing, DSV is in a very unique position to change as well. We have the opportunity to be influential with our carriers to understand the needs of the customer, but also to move very quickly and not wait for the customers to make their definition. Rene made mention to a visit that we had in the U.K. with an OEM that's trying to figure out what the world could look like and that story is pretty typical for a lot of the automotive customers that we have. As technologies come into place for better batteries, higher energy density and even recycling technologies and applications for battery second-life, there are a lot of opportunities for the automotive supply chain to blend with that of technology, industrial, retail even. As the automotive volume of lithium-ion batteries starts to increase, it's going to drive these technologies, which are extremely applicable to a lot of the other industries as well, it has not been economically scalable and feasible for the recycling industry to support lithium-ion batteries in the consumer product space. But as the volume of the electric vehicle battery starts to push that technology forward, it will be. As our customers look towards higher sustainability targets, DSV is in a great position to support not only the needs for a collection of these components, but also design of greener supply chains. When we look at the future, we start by extending the traditional services that we have today. DSV has always had a very pragmatic approach to customer support. It's great to look at the future. We also have to make sure that we can support the customer needs of today and our customers have needs that are pushing what the industry is used to and what the industry is capable of. In addition to using the products that we have in traditional ways and in new ways to support these growing demands, we're developing new products, some of which we think have patentable technology to grow the industry, to not only wait and react to what the customers are asking for, but to see where the industry is going and to push forward with these tactical, practical solutions in parallel with building the sustainable and robust supply chains of the future. The DSV approach on this is not to look at this as transactional business, but to look at building those resilient supply chains of the future and empowering our customers to understand what is happening today in the market, where the market is going and helping them to make their own decisions. Though the transition is about so much more than lithium-ion batteries, they are a major component of the change, they are a major catalyst for the growth and our customers are asking us how we do the hard things. The hard thing about hard things is that it's hard to get attention in a market where we're challenged for capacity issues across all modes for even your standard non-dangerous goods. How do we push carriers to pay attention when our customer wants something that's very difficult to do. There was a question earlier about productivity and the number of files per desk. It's difficult to convince everybody that this is the direction and this is the path forward. And we need to support these customers now. We need to support the hard things. To be able to put together either a transactional solution or a robust supply chain, it requires a lot of creativity. Understanding the regulations and saying that moving lithium-ion batteries is no different than moving any other dangerous goods commodity is a bit naive. The regulations are not sufficient to ensure a level of safety. The carriers are not familiar with the technology and they feel uncomfortable about the lack of regulation and the lack of change as the technology has grown. In order to actually support our customers, we need to be able to find creative solutions, often multimodal. It's not necessarily about optimization, it's about how to do this period. To address this, DSV has formed a confidence center, the electrification and mobility confidence center, which we refer to as EMC squared. The engagement started with our larger customers in the automotive vertical, but as you can see, it has quickly expanded to not only our large accounts, but some of our smaller as well. And it's not so much about mobility and the passenger car segment as it is about all of these different products that are using batteries, electrified mobility and future mobility concepts. Whether it's talking to a customer about how the sales model needs to change to adapt to a circular supply chain so that they can offer trucking-as-a-service or vehicles-as-a-service or whether it's talking to our industrial customers about how they don't feel like the technologies in the battery electric vehicle is sufficient for addressing the needs of today and they have concepts about other powertrains. The electrification mobility confidence center pulls together knowledge through all of DSV through all of our divisions and all of our branches around the world to provide the support for our operators, for our customers and even back to our carriers. I'll leave it at that. I think that our customers are all searching for the answer. They're all looking to outsource the experts. I want to leave some time for questions-and-answers. But thank you for your time.

So as per usual standard, we have the summary slide as well. So disruptions continue to impact our customers. We don't believe there's an end to the disruption. We actually probably believe that there's more disruption to come of a different nature moving forward. We are prepared for that. We have to be prepared for that as well. A little bit about how we try to help our customers, and I think we succeed in helping our customers to building more resilient supply chains, both in terms of service, but also in terms of cost. And then the new support center that we have for the mobility developments as well, EMC square, which I think is a proof of how we can also do it as a business that we are willing to change, and you saw in the previous slide, how the market is changing and how the customers maybe are slightly different to what we intended them to be from the beginning. So that's the update. Thank you very much.

Great. Thank you, Rene. Thank you, Eva. And we are ready for questions. [Operator Instructions] Sathish, I think you were first.

Sathish from Citigroup. So just to think about the inventory levels, right, as your customers move away from just in time to whatever you call it today, how does their thinking begin at the inventory levels? And also, if you look at today, the shipment time is like 2x what it used to take pre-pandemic. So are we in a period that you're going to carry more inventory levels? And how are you actually helping your customers to transition away from that into, say, the future operating model, what do you call it?

Yes. I think the interesting bit is, as I said from the beginning, you have uncertainty at the front and you have the uncertainties at the back end as well. So with everything that's going on at this moment in time, we see some uncertainties in what will the market do? What is the customer's market doing at this moment in time? And will they -- depending on what happens there, will they start utilizing the inventory that they've been building up to have resilience and be able to deliver to our customers or will they still feed that? That would be an interesting time. Probably over the next 6 to 12 months, we will see a potential change in that. But it's entirely driven by the customer's forecast of what do I need to produce? And I would say in a lot of industries, there's a massive backlog. If you look in the automotive industry, I think it's fair to say there's a backlog. Once the semiconductor starts flowing freely again, there will be a lot of cars delivered as well. I guess in here, there will be a few people that are waiting for a car that is waiting for a semiconductor somewhere. So it depends a little bit on what the market, what the industry segment is as well, how this is going to pan out. But what we see in general is a need for more warehousing space than we've seen in the past and I don't think that will change anytime soon.

I would say that just in time became before the pandemic, an excuse for not carrying a lot of inventory. And I think that with the stability of the supply chains and the stability of the freight market, it was really easy to carry virtually no inventory and rely on your overseas suppliers to deliver in a just-in-time fashion. Through the pandemic, I think it's been a good reminder to everybody that true just-in-time requires accurate risk assessment and accurate forecasting. And gone are the days when you can carry no inventory and rely on a 6-week transit time to arrive on time. So now we're seeing our customers asking for support because we are the supply chain experts and figuring out what that risk is and what is an appropriate level of inventory to carry, balancing the risk to the supply chain going down and the risk with carrying that much inventory in the warehouse space.

It's Nikolas Mauder from Kepler Cheuvreux. So we've heard a couple of times now that logistics is getting more recognition in a private and professional context and that it arrived higher on the board level agenda. Can you against that backdrop, perhaps elaborate on the issue of cross-selling and perhaps even cross-divisional synergies and whether it's easy in that context to raise them?

Yes. I think what you've seen, if you take the cross-selling between air and sea, is a natural one, that's been happening for years. And then you move into air, sea and road, maybe cross-selling in that sense as well. We haven't seen that much disruption in roads. It's starting to come now. Soren will probably go into it as well, there's something called EU Mobility Package that has driven capacity out of the road networks in Europe as well. Those things will also necessitate that the customers look at that market being more risky as well. It hasn't been risky so far, but that could play into it as well. And I believe the integration Jens spoke to a lot -- the integrations that we have with customers as well, enables the customer very easily to actually connect to us as well, my DSV is not just for air and sea or for road, it's for all of it. So we have the ease of doing it, and obviously, it's a drive that we are responsible for driving with the customers as well. Currently, approximately 15% of the customers have an overlap between 2 or more divisions as well at this moment in time. So the potential is there, yes.

[indiscernible] from ABG. Question around asset heaviness versus asset lightness. We hear a lot of customers talking about they want their forwarder or logistic player to control the assets more, Vestas is a good example. How do you play into this mindset as being an asset-light player and still creating visibility and all the data and so, and not controlling the assets?

I think if you look at -- Carsten had 1 of the slides as well. And you look at the flexibility, we have to choose the best solution for our customer. There's not 1 shipping line or 1 airline in the world that is the right solution for anybody. And even if you look at the Road market, you might be able to go to the asset-heavy providers as well. But you need a lot of them to actually put a network together as well. So my firm belief is that there's no changes in that. It's a desire to move in and do something that we've been doing really well for 50 or 100 years, so if you look at all the history we have as a company. So I'm not nervous about it. I think that was mentioned by Jens Bjørn earlier as well. It's not something that we are nervous about. The data, is it easy to get the data? In some cases, it's actually easier to get the data from the terminal than it is for the -- from the shipping line as well. So it's access to data and it's reacting to the data. And I do actually believe we are better than that than most in my world.

Hassan Ashraf, Morgan Stanley. My question is on sustainability. Are customers actually paying more for Green Logistics products? And if so, what proportion are doing this at the moment?

Are they paying more? At this moment in time, they're reluctant to pay more. Personally, I believe that there's something called carbon taxes everybody is talking about. I think we need in the industry in order to go on our Scope 3 to go to where we should go, we need incentives for the customers to do that. And that could be a tax that you can avoid or it could be a penalty that you have to pay. I think that's the only way to drive it. But I would say, Jens Bjørn and I had some experiences last week, and I feel that the big customers that we have, they're definitely driving in that direction. So it's a little bit of the catch-up effect. It's coming now and people are aware of it, absolutely. I saw a very good example of a big customer, LG Chemicals, they've actually already implemented a rule in their company that they have internal application of carbon taxes. So all their entities, they pay what they believe is the right price per tonne for carbon in their accounts. And it might be something we all have to consider to say if the governments are not doing it, then maybe we have to do it ourselves. So I think the driver will be there, absolutely.

Thank you. I was just going to say to [indiscernible] you said, Rene, I think now we're seeing that customers are willing to pay. They also have their ambitious targets that they have to set so they come to DSV and they want to get products that can lower their CO2. So I think it is more and more coming that they will -- and are paying, just to add to that, yes.

Great. One more from Rob.

It's Rob from BNP, again. Just a question on globalization. So there's a lot of discussion at the moment about the reversal of globalization, but it seems to me there's 2 very different dynamics, which is -- sure, in some cases, you will see the insourcing of production, that's for West. But in many cases, you're likely to see a kind of more diverse supply chain in particular, if we're being gone -- people moving more away from China. From a freight forward perspective, which of those 2 factors do you think is dominant? Is it the negative insourcing or even more positive from your perspective of just broad and more diverse supply chains globally?

I think what we've seen in the dialogue with customers, and you can say the last 2, 2.5 years have proven how difficult it is. It's easy to talk about dual-sourcing and near-shoring, et cetera. It's very, very difficult to do. I think in the automotive industry, if you look at that, they've spent 3 decades globalizing. How quickly can they then go in the other direction? So you're absolutely right. In certain industries, they'll be able to do it, they'll be able to do it faster. And maybe at the end of the day, if you look at sustainability, it's the right thing that they should do. And the dialogue there, I firmly believe that our role is to give the guidance to look at the alternatives that the customers have, work with them, to then build their supply chains as well. And the fact of life is that we are in 90 countries. So if somebody wants to move production from 1 place to the other, we can work with them, and we can still facilitate them. And that also gives assurances when you make the changes. But will there be companies moving towards Europe for some of their production? Absolutely. They're already -- some of them are already doing it. And that will just open up the door to us being a provider of a different service to them as well. So...

I briefly touched on empowering the customers to make those types of decisions. Our customers are looking at supply chain as a strategic advantage. There is no single answer. And it's a mistake, I think, right now for us to offer a specific menu of services for these customers to choose from because they are ending up with very different results in very different supply chains. They all have different goals and different targets for how they're getting there. Some of our customers are small. They've only ever done electric products. Some of them are very large and they're making the transition. As the inflection point comes, as the number of internal combustion engine vehicles dwindles and the number of battery electric vehicles goes up, it's very difficult for them to hit a moving target and figure out how to do that on top of figuring out how to nearshore. There are all kinds of quality targets and complex deep level supply chains that require serious examination. So it's not as simple as saying, "Oh, we should just find a second supplier and start transitioning the business over." In the automotive industry, though the batteries are certainly bringing in a lot of the supply chain from tech, there are regulations for the commodity itself and a complexity that doesn't exist in some of these other industries that are definitely driving the way that these supply chains are shaped.

Great. One last question.

Alex Irving from Bernstein. A question on customer churn, please. Can you tell us a little bit about what your typical customer churn is? And then what are the biggest predictors or drivers of customer churn?

It's a very interesting question because on what basis do you measure customer churn? When we do the calculations, it's -- we have to replace between 8% and 10% of the business every year. But when you look -- if you go into segmentation of customers as well, the churn, the smaller the customers are, the more to, I think Carsten made the point as well, the more they are going towards spot quotes as well and the higher churn you have in that segment as well. But it is typically the high churn sits in the customers that have a typical annual turnover of up to EUR 12,000, we see a far higher churn there than we see as you go up the chain in terms of the size. If you look at a global account, we actually measure churn in 2 ways. So we look at accounts that go from something to 0. That's a churn account. But then we have another component as well where we actually look at the service they bought, so down to a service level down to, is it air freight from China to Holland, for instance. If they lose that, we count as churn. So it's very much the metrics as well. But I would say replacing at least 8% to 10% of your business is the norm. That's also why when we look at the customer defection forecast, it's a very, very good tool to find the needle in the haystack. And what we typically do is we say here, we have enough analytics to say there's an 80% churn chance or risk on the customer. And then we initiate a dialogue between our operational entity and the customer in order to drive a better dialogue, and we see a clear benefit from them. So the [indiscernible], if you know 3 months after you've lost the customer that you've lost them, it doesn't really help calling them because they know you've lost them as well. So it's about doing it at the stage where you see a change in behavior, have that dialogue, and we typically see when you do it well, that we're actually growing the business with them. So it's capturing that. So I hope that answers it.

Great. Just in time. Perfect. Thank you, Rene. Thank you, Eva.

Thank you.

Next person on the stage here, Lindsay Zingg. Lindsay, we met first time in first of April 2019 at the Panalpina offices. You were thinking what [ are those teams ] doing there? We were thinking, what's this Scottish lady doing here? But that's all history.

Yes. Thank you very much, Flemming. And 3 years later, here we are today as an integrated joint company. It's a great pleasure to be here today, and thank you for inviting me to present sustainability in focus, as you mentioned, my name is Lindsay Zingg. I'm 18 years in the industry. So a bit younger than Rene. I started at [ 2 years of each ]. I don't quite have the DSV haircut just yet, so I'm still -- I'm getting a bit shorter, but the main topic that we're going to talk about. I think throughout the course of the morning, you have seen a lot of mentioning of ESG, sustainability. All the speakers have actually mentioned it. And at the end of this, it's nice just to wrap this up and explain what is DSV doing on this very, very important topic? Sustainability is a license to operate. And why is that? If you look at the planet, I live in Switzerland. It's a beautiful country, very blessed to be there. I moved from Scotland 18 years ago to start my career. When I moved, the snow in the cities was like this. I was like, "Wow, it's a winter wonderland. Scotland doesn't have snow. I'm so blessed to be there, started skiing, big hobby of mine." But as you progressed as the years have gone on, there is no snow in the cities. The ski resorts are opening far later. They're losing money. So even in countries like Switzerland, when everyone thinks there's lovely luxury, the money is there, the planet is being affected by climate change. And we can just see that looking out the window in all the countries we're living in. So it's the right thing to do for our planet, for our future, and as Rene said as well, for the next generation. I have 2 daughters, and I want to make sure I leave a good planet, and we work in that in DSV. Second of all, I mean, tightening regulations. I remember, 6 years ago, someone said it's a phase, climate change is just to phase. It's an next buzzword. Absolutely not true. It's intensifying and so are the regulations. Governments, NGOs, they're selling robust targets and climate change is needed and to support the ESG agenda. Stakeholder demands. Our customers, Rene has touched upon that as well. My team and I were talking to customers. What can you do to support our CO2 reduction? Again, if I go back in my career, it was ISO certification. Okay, good tick. Then it was, do you have a CO2 report for us? Yes, let's just put that in the drawer, another tick. Fast forward to 2022, it's a whole different landscape. They want the data, they want to know what their CO2 is with DSV. And not only that, logistic companies like us need to provide solutions to lower the CO2 for our customers. And that's what's changed in the logistics industry. We can no longer say our suppliers are taking care of it. Now we have to find solutions. However, more importantly, above all that, it's because DSV wants to become a greener company. It's headed up by Jens Bjørn, our CEO, and I've never met a CEO who is leading so strongly at this topic and the executive management. They're backing it, and they're leading it to make sure that we support the decarbonization in the logistics industry and become a leader. So now the scene has been set, this is the agenda, and I'm just going to start overall with our sustainability strategy. In 2015, I think, was the last Capital Markets Day, and I guess this topic was not being presented. Here we are in 2022, and it's quite incredible what DSV has achieved in this area. You've seen all these disruptions, you've seen all the acquisitions, the company is growing, but ESG has not been taken out of focus. And it's incredible to see what we are working on and the main focus areas. This is the strategy. It's the overall sustainability strategy. We start with governance, and this is where it's business ethics. This is very important that we do business with integrity, respecting different cultures and the rights of individual countries. We are asset-light, so we have to procure and be responsible for their procurement. We must make sure our suppliers that was mentioned as well this morning, the airfreight carriers, the ocean carriers that they also are demonstrating high standards. Moving on to environment, and that will be the focus of my presentation today. This is the high materiality, the high-risk topic, the opportunity for DSV to take that responsibility and become a greener company. Finally, Jens Bjørn mentioned that as well, we are a people business. We have over 77,000 employees, so we must make sure we take care of that. Diversity and inclusion, a very important topic as well; health and safety, 50% of the people work in warehouses, so they also have to be kept safe. So the social aspect and also the community engagement. Ukraine disaster right now. Our countries have just given so much work and financial support to make sure we support when there's a crisis. This is the overall strategy. And I think in 2015, we had a sustainability report that was 20 pages. If you fast forward now, it's 70 pages. It's only because everything the company is doing is going into this agenda and progressing constantly. So if we move on to the environmental part, what is DSV's footprint? Jens Bjørn said, we're the third largest logistics company in the world. That comes with a carbon footprint. And that's what everyone is talking about. You see that in the media. Our carbon footprint, if you see Scope 1 and 2, this is what we control. That's the terminology to say, what is it you own, what can you control? Brian, who is responsible for solutions, we'll touch upon that later this afternoon. But that's the buildings that we're in, the warehouses, the offices. The company cars that we also operate and our small own truck fleet, which also Soren is responsible for, and we'll talk about the own assets that we have, that is something we must drive down as well. That's 0.25 million CO2. What does that mean CO2 data? What's equivalent to? Well, that's about hitting 30,000 houses a year. So that gives you a bit of an indication. If you move on to Scope 3, which is the biggest scope we have and it's asset-light, that's 12.5 million tonnes of CO2. And this is predominantly coming from airfreight, Carsten was talking about this morning. It's got the highest CO2 emissions, followed by road and then followed by sea and a small majority of rail. So we have to reduce that. This is a huge carbon footprint. It's damaging the environment. So back in the days when I met Jens Bjørn for the first time, he said science-based targets. We want to have the science-based targets because this is the gold standard offsetting environmental targets. It's coming from Paris, Paris Agreement 2016. When companies set these targets, it means they're limiting global warming to 1.5%. So we want to reduce everything we control by 40%. The airfreight, the ocean freight, the roads, that is the hardest challenge that we have, but that's to be -- we aim to reduce that by 30%. Now we are a company who acquires businesses. So because of that, we're now setting a new baseline, and we will be resubmitting our science-based targets, which will become more ambitious because we have a higher CO2 footprint. So watch this space and in the next quarter or so, we'll have new announced science-based targets. The next question we were asked, "Okay, DSV, you have a huge CO2 emissions, what are you doing to reduce it?" And here is where I'd like to introduce our Green Logistics program. [Presentation]

Great. So that was a big project we embarked last year because we saw the customer demands. DSV, as I mentioned, what is the CO2 footprint of the cargo ship with you and what are you going to do to reduce that? So as the video said, it's a set of solutions. We want to reduce the carbon footprint of our customers, and we also want to reduce the Scope 3 of our supply chain. So the first thing is track and trace your impact. Customers want to know where is the cargo? What time did it arrive? That's no different now from the CO2 reporting. This is where the customer says, "What was the CO2 of the cargo I ship with DSV?" So we -- and Jens Lund was talking about that. The data is the first step in any collaboration with the customer. We simply must have the transparency of the CO2 that DSV has and also the customers, so we can measure the footprint for our customers, and we send them these reports. Once we've done that, you have a whole overview of the trade lanes. What was the highest CO2? What were the hot spots for us as a customer? What can you do to reduce it? This is where we move on to rethink your logistics. And this is the green supply chain and design optimization, Rene talked about that. There's consultants within DSV. It's unbelievable that logistics has now engineers and consultants that can actually go into the heart of the supply chain and see, what can you do differently a customer? How can we challenge you? Perhaps you can do it a different more switch to reduce the CO2. So that's optimizing and reducing. Now I studied chemistry at university, and I didn't think entering into the logistics industry. We'll talk about fuel and going into the sustainable fuel offerings. But it's absolutely the case now and then Carsten also mentioned that we are looking and we do have sustainable fuel offerings to ensure that the customer has a huge CO2 reduction by replacing that fossil fuel. And that is the collaboration on sustainable fuels. Finally, DSV is not -- strategy is not carbon offsetting, many of you who buy online or who book a personal flight, you have the option to offset. That's not what DSV has as a strategy, this is the final piece. We want to bring CO2 down from the atmosphere, we want to support the replacement of fossil fuels. And finally, that last piece, we can't shift, that's where we want to offset, and we can support great projects, and we do have a great partner for that. So that's offsetting for carbon neutrality. This is the foundation that DSV will now build upon, bringing new products in to support the customers, we've just worked on our Road strategy to also see what can we do as well to add on to this foundation? And this will support the customer and the DSV decarbonization journey. So rethink the logistics, I won't go into a lot of detail, but it's just a small things that can make a difference. When we sit with the customer, we formed 2 project teams and we say, okay, have you thought about shifting air to sea? Does the timing allow it? That can have a 98% saving of CO2. I think Carsten, you mentioned it as well, the flights that Panalpina had coming empty, that's a nightmare from me when I was working in Panalpina. Don't bring the planes back empty, fill them. So we want to load. You must take 1 back and fill it as well another return. That can also have a 70%, 90% saving. The routing, this perhaps could also change the CO2 a direct flight versus a stopover flight also has a saving of CO2. I know it's a challenging market right now and at the moment there's capacity, but in an ideal world, it would be -- we do look at the carriers. Is there a different aircraft that we could choose, that has a less CO2, an older aircraft versus a newer aircraft, a different truck. What can we use there in terms of CO2. So we look at the carrier selection, we look at the procurement. Finally, innovation is something we haven't mentioned this morning, but innovation is key to sustainability. We need innovative topics, and we need to collaborate with our partners to bring that in. So this is a little bit of regarding rethinking your logistics, looking for optimization offerings for our customers. I wanted to show this because this is something and Lund always mentioned, and this is why we need the data. We need to compare the carriers. Just by taking a Boeing 747 compared to an Airbus 350, that has almost 50% saving, should we use that aircraft as well. So having the data, having the transparency, we can start to compare the carriers and then start to choose which one is best for the supply chain. So this is, again, something we're looking at. We are asset-light, but we simply have to go down to this level, so in order to reduce and meet our ambitious targets. Now it was a good question this morning that came up about pricing. It does come in to cost sustainability, and that's the unfortunate part. Fossil fuel is still cheaper than sustainable alternative fuel. And that is the sad part of the industry right now. However, you can see here that airfreight has the highest cost, it's the highest expensive mode. But we do have partners. We've partnered up with United Airlines, where they're providing us fuel to pass on to our customers. We've also partnered up with a company called GoodShipping, who are also providing this fuel. So it's coming at a cost, but DSV is taking care of that whole process for the customers. We're offering this to the customers, [ whether ] suppliers. And we hope like renewable energy for the house is that this cost will eventually come down. We're all buying into it, and hopefully, this will also be something that we see coming down in terms of pricing. So it is the most expensive way of doing it, but yes, you have a great reduction in CO2. So Soren, I'm not sure if you're going to mention that this afternoon. But Road strategy, that's something we're definitely looking at. It's a very fragmented market. Airfreight and ocean freight is slightly easier in terms of the fuel, but there's so much going on in terms of technology with road. What is it? Is it renewable hydrogen? Is it going to be biofuel? Is it the electrical way? So we have partnered in Denmark, here in Denmark with other partners and companies to have renewable hydrogen trucks. So we're in that project that we're going to be testing and having renewable hydrogen. We also support the biofuel. So when a customer says, "Can you offer this?" We go into the country. We try and get the HVO and then we can see that in Germany, Singapore as well. And also electrical trucking is also coming more into the picture. We can do that for short haul. Unfortunately, electrical trucking is still a bit to go for the long haul. But we are looking at fuels and technologies to accelerate decarbonization. So this was very much regarding the cargo, how we're supporting our customers. But Jens Bjørn mentioned the buildings in Texas that we have these very high standards. I was actually blown away coming from the Panalpina side to see all these amazing offices that we have in DSV. It's of the same standard. Group property when they construct a building has the highest environmental standards. You can just see some examples here. It was 1 area where I couldn't find any improvements in terms of environment because Brian, who's heading this up, I think him and his team are doing an incredible job. They're really looking at how our buildings can be more efficient. The Solutions division as well taking it very seriously. We have a Solutions team who are fully working on this as well to ensure that we lower our Scope 1 and 2 emissions. The next thing that customers are asking, what is the CO2 of the cargo in your beautiful warehouses? What is that footprint? This is the next thing that we will need to start doing because that's what they're also looking for the full supply chain from not just shipping but also storage in these warehouses. So we do have all the data for all the warehouses and all the offices worldwide, so we can also show what we're doing to reduce that. So very high standards for the new buildings. I mentioned in collaboration, I think, at the beginning of stakeholders. This is the ultimate goal that we must collaborate. DSV will never meet a science-based targets on its own and neither will our customers and neither will our suppliers. In addition, we need to find what's going in the market? What is the industry going? What direction, what fuels? So we've actually partnered up with the main leading companies there, EcoTransit, that's who does our CO2 data. I mentioned the fuels, United Airlines. And also World Economic Forum, our executive management were there last week in Davos. I think they were all very inspired. You've heard from Rene and Jens Bjørn what a great event it was. But by being partners there, we can really have our voice and also see what's going on in the industry, so we can take that back to our customers. So having these partnerships, and this is the ones we've chosen at this point to be leading in the sustainable future. So it's been a long learning. So I'm going to wrap up. And I think very importantly to say, I hope you could see from the presentation, DSV is taking this very seriously. We have the commitment from the top management and the Board of Directors. We've set very ambitious targets to reduce our emissions. And I know with DSV that they will continue and are continuing that we will really move forward to meet those targets. The Green Logistics is a set of services, it's a start. It's not the silver bullet that's going to reduce our CO2, but it's giving the customers that portfolio of products to lower their CO2. Finally, I can't say enough collaboration with customers, suppliers and industry forums is required in order for the logistics industry to decarbonize, and DSV will be and is the leader in this to support this decarbonization. So on that note, I would like to thank you very much for your time and look forward to some questions, and I'll give you some answers, hopefully. Thank you.

Great. Thank you, Lindsay. Dan?

Dan Togo, Carnegie. Which trade lanes will be first movers here? Where will you offer these Green Logistics solutions first? I think particularly in ESG. And what kind of a GP should we be looking out for when we try to model this? Is it on group average, higher, lower?

So I'll take your first question and probably Rene will take the second one. But for your first question, a very good one. We don't focus on a trade lane a say. You get your customers report and you get your top 10 trade lanes. And then we stay to that customer, "Okay, this is the highest CO2, so let's focus on that lane." The fuel actually is called in setting and you can use that for any lane because it's not actually going on the vehicle. You buy the fuel, it goes on to an air carrier and then that's where the CO2 reduction comes in, but it's not guaranteed on the cargo plane because there's not enough fuel to go around for sustainable aviation fuel at this moment. So there's not a particular lane that's per se the focus. It has to be per customer and per CO2 that we have on the report.

And on the last one. So I'll try to give a response to that. We made a very conscious decision when we launched Green Logistics that this was not an attempt to actually make an additional margin because the most important, to be honest, is that we actually get this into the market that we start doing it. So what we said at the time was we want to cover our admin costs on the cost that we have for sustainable fuel offerings as well. But the target is not to make GP out of it. One day, that will change. But now the most important is actually to get it moving, yes, that's the approach we've taken.

So don't change your model too much, Dan.

Ben from Barclays. Just 2, please. Can you just give us an indication of what share of your top 200 customers have quite ambitious Scope 3 decarbonization targets? And then secondly, clearly, you are a large customer for a lot of the asset owners. What pressure are you putting on them to invest in technologies to decarbonize? Because clearly, at the moment, you can optimize with what the market has available, but how can you actually put pressure on them?

I think to take the first question, there isn't like, I think, to get the actual figure percentage right, it's quite difficult. But I would say the majority of the customers are actually coming from the fashion and retail. This is where they are really seeing and they're actually paying for it. One of our first customers who bought our fuel was actually a fashion customer. But I would say most of these top customers now have set ambitious targets. That is clear. And that's -- more and more companies will be going in that direction, absolutely. And then the pressure on the asset owners, I don't know if you want to answer that, Jens Bjørn, but -- or Rene? But we are -- I mean, the dialogues we're having, I mean you had a meeting with Hapag-Lloyd last week, and that's really also to see what are they doing, the fuel that they're providing. We are partnering with that. This is the whole product of the fuel. And being part of the WEF and then the Clean Cargo Working Group, this is where we come together and can have a voice and put that pressure on our carriers. So I would say that's where it's happening.

I think 1 thing we should add is and remind ourselves that the asset owners, they have ambitious targets with Scope 1 and 2 as well. So in reality, they will be driven in this direction anyway. So -- but it will take time. And that's the whole issue. I think there's a lot of talk about 2050 targets and people wanting to break it down to say, "Yes, yes, that's all well and good because some of us will be gone by then. So what are you doing exactly right now?" And that's a big part of the journey in that respect as well.

Yes, I would say, especially in the airlines and the ocean carriers. And the big names are out there who we talk to, they all have ambitious targets, and they have the same pressure and they're also science-based. So yes, we're hopefully going in the same direction.

There's an online question from Deepak from HSBC, and it's low practical, but actually a very good question. How do you manage offering sustainable solutions on a voyage if all customers do not prefer it. Can you put -- if you put sustainable fuel on an airplane, then everybody has to agree to that or if you have cargo from different customers under...

Yes, there isn't like an agreement that goes forward like that. So a customer requests it. They are the ones who buy it, and it goes on to that aircraft or that ocean carrier and they get the CO2 reduction, the other customers cannot claim it, they don't even know that it's there. So it's...

And I guess it's also that it's not on that actual airplane that you use at -- American Airlines, they would put it in on another plane. So you insert the fuel but on a different plane.

They're simpling out this air fuel in the market. The airports are not equipped. There's not enough fuel out there and there's also not the government funding to actually do it. So yes, the other customers will get the benefit, but they don't know that they're getting the benefit. So it's a good question.

Yes. Rob, yes?

Rob Joynson from BNPP, again. Lindsay, you talked a lot about the need to shift goods from air to sea, which from a decarbonization perspective we can obviously say is the right thing to do. I'm just kind of intrigued about the commercial angle. You can fit a lot of airfreight into one 20-foot container. I guess the way that we would look at this is like the gross profit per tonne is a hell of a lot higher in air and it would be sea. So where is the commercial balance? I mean, clearly, it's not going to happen, but if DSV transferred all of its air to sea, it would be a hell of a lot less profitable.

Rene, do you want to take that from a commercial perspective?

Yes. I think the focus will have to be -- you couldn't not. It's not possible, it won't. Supply chains will stop working tomorrow if you have that. So it's a great ambition to say, I want to move it all from 1 to the other. I think the drive is far bigger to actually make aviation more sustainable. That's where the driver is. It's not going to certainly all go on ships, on rail. It doesn't work like that. The same, you could say about Europe and say, will everything move on rail now instead an intermodal instead of moving by road? It won't happen tomorrow. But you have to make the road freight more sustainable, you have to make the airfreight more sustainable over time. And that's happening. If you look at the fuel, I think the examples that Lindsay had on the screen as well, yes, but over time, this is going to happen anyway because the new planes are more sustainable than the old ones. So...

And I think it's more to do more split perhaps, maybe part of the trip you could do with ocean and then the aircraft the rest. So it's just trying to find out ways that you could reduce until this fuel market improves, yes. But yes, not to shift all to ocean.

So I guess for the EU, one of the main pillars to reduce the CO2 footprint is to shift more freight to rail from road, and that didn't feature at all at your presentation. So if you don't do the -- if you don't have a strategy for this, is the EU actually likely to hit the targets on this or is this just not happening?

I can't ask the question on rail. I don't know for DSV's perspective with the rail because you're right, it wasn't on the presentation, and it's a very good point.

Yes. it is shift more so -- it is included in the part where you say, can you shift mode, then it's also certainly road to rail when that's possible. But maybe you can say something about the available capacity of rail.

I mean the capacity is not there.

Yes. I think I made the point just before -- the rail networks are not adequate to do that because then it would all happen. We use intermodal, we use rail, short shipping as well. So we use it all the time where the solutions are available. If there was more available, then I'm sure Soren would use it far more in his operations as well. So we do actually use it. But if you look at the network, if you look at road freight, that will be a lot easier to do very quickly because you're talking a lot of relatively cheap assets that you have to change but you're also talking a lot about a completely fragmented market that you need to change. So I believe that there, we can make the change quicker to Lindsay's point on -- for instance, e-trucks as well when they become available because there's a lot of talk about them, and there's very few in terms of capacity available to us as well. And then when you get them, there's very little capacity to charge them as well. This will happen over the coming 5 years. We probably had the same discussion on our private cars 5 years ago. Is this ever going to happen? And it happened. It happened very quickly as well. And I personally believe that will happen on road freight as well.

Great. It's lunchtime. So I think we should be sharp here. And I would say thank you for the first part here. Lunch is 45 minutes. And you go out in that direction. I'm sure the team is ready to show the way towards the canteen. But then we are back here 12:45. Thank you. [Break]

Welcome back. I hope you are all fired up and ready for a session with Road. Søren Schmidt, please take it away.

Thank you very much, Flemming. Can I have the -- good. I'm Søren Schmidt, been in the company for 27 years, heading up the road activities in DSV. Many of you might believe that making road business is very simple, filling up a truck, driving from A to B. But it's much more complicated. Look at this video. [Presentation]

I think this terminal is a bit busier than what you saw last time we had the same meeting as we have today, the Capital Markets Day. This is actually about what we are trying to achieve. This is about creating a groupage network. This is about developing more groupage. This video is from a terminal in Germany where they handle 300 trucks a day, more than 5,000 units a day, and we want to replicate that to many more countries in Europe. I will come into that a little bit later. When you look at our company, this is, let's say, the picture of Road. We have had a decent development. The majority of the revenue is coming from organic growth. We had some spillover volume from Air & Sea that was the consequence of the acquisitions driven by Air & Sea. And we are where we are now, DKK 1.8 billion in EBIT last year. We are the top 3 player in Europe, and we are growing on the North American landscape as well. We have a 5% EBIT margin, so industry-leading margin in Road. And then we are well on track to reach our conversion ratio. That's how it is right now, and we are far from perfect and I will come into that a little bit later. There is a huge opportunity and potential to do it better than what you see here, even though it's actually quite good, if I have to say it myself. This is the agenda. It's about our geographical footprint. It's about the strategy that we just have launched for Road. It's about the Road Way Forward program, and it's about a market update. All of you I've been talking to yesterday and today, they ask, how is it going with the CargoLink Way Forward? How is it going? And I will come into that. And of course, I do understand what you are saying. But hopefully, I will be able to answer all your questions. When we look at our footprint then in -- we have become more global. Europe is still the big engine. 87% of our GP comes from Europe. 7% GP comes from America and then remaining 6% from Middle East and South Africa. That's how it looks now compared to how it looked in 2015. We are, in Road, very, very ambitious, and that's the reason why that we have made a Road strategy. Of course, it's connected to the overall strategy of DSV. So the overall road strategy is ONE DSV delivering connected, reliable, quality and sustainable growth. It consists of 4 pillars, and the first pillar, that is about the people driving the growth. Jens Bjørn also mentioned about this is a people's business. Of course, it is, so they have to be a part of the strategy. Number two pillar, that is reliability by ONE connected DSV network. And then you say, what is the difference compared to today? We are in 30 countries in Europe, but we are not connected. We work together on a bilateral basis. We make agreements country by country. We do not have a high-performing, efficient groupage network, and that is what we are about to achieve. In order to achieve that, we need, of course, to be able to deliver the same services across Europe. And we need to implement a service catalog so that we can fulfill our customers' demands in all the countries. In order to support what we would like to achieve, we need the old CargoLink Way Forward program. We need ONE scalable IT infrastructure with efficient workflows. All these 4 pillars together is a big transformation for Road, but it's necessary if we want to go to the next level. And we want to be the champions of this industry. That is our aim. We want to do exactly the same as we have seen in the Air & Sea division. We also want to make M&As. We don't want only to have spillover volume from M&As driven from Air & Sea.

It's okay.

No, it's not okay. So we really want to do our own big M&As. If we can make that happen, then we have the IT platform where we can do Road M&As and have the same nice development on conversion ratio as Air & Sea has also shown during this morning. When I say that we would like to develop a high-performing international groupage network, then there's a reason for that. The reason is that groupage volume in Europe. When I say groupage, then it's 0 to 2,500 kilo shipments. These shipments of this market is big. We have a very, very, very small part of it. The groupage shipments of this market and the volume also have higher margins, much higher margins than FTL and LTL. It's, of course, also more complex to manage groupage in a network. It requires infrastructure. It requires IT. We have it in DSV. So basically, in order to achieve what we would like to achieve, it's in our own hands because we have the volume -- we have the critical volume. So we can do it much more efficient than we are doing today. When we look at our volume mix, then it's very balanced. FTL, 40%; groupage, 35%; LTL, 25%. When we look at our activity mix, then groupage is 80%. I'm not saying that we should not continue with FTL and LTL. That's a big, big part of our business, and we will continue to develop that. But we want to accelerate on the groupage market, and we can only do that by building a high efficient groupage network. So what do we actually want to achieve when we talk about IT platform and ONE enterprise IT platform? Today, we have, I call it, a cluster fog of IT infrastructure. It's -- we do not work in same systems across the countries, so a lot of flows when we talk about exchanging data. So we want to work in a common way across all Europe. We want to have 100% automated workflows and including auto-planning, especially on the groupage network. When we talk about groupage, then you can actually make auto-planning. You can't do that yet on LTL, FTL, at least we can't, but we can do it on groupage. Today, as you saw on the previous slide, 80% of our activity is groupage. Every time we manage a groupage shipment today, we do manual intervention. Jens mentioned that the upside is very, very high if we can get that automated, and that is what we are trying to achieve. We -- today, we have shipment transparency and profitability transparency, but our applications in the IT platform does not speak together. What we are trying to achieve now is an end-to-end platform where all applications speak together. And basically, when we get the right order, Jens also mentioned that with the right booking data standard, then the shipment will flow through the system without any manual touch because this is already a part of the system who is triggering that. And of course, customers, they would like to know where are their shipments. It's about visibility, it's about transparency, especially in this environment where it's a lot of disruption all over the place. And of course, this is also something that we are building into the system. We can also provide that somehow today. In the new system, it will be 100% disciplined. So the upside is, of course, significant potential to increase the number of shipments per FTE. An even bigger upside, that is, that we would be M&A-ready and scalable. So I think this is really important and interesting, and it's a big transformation for the Road division. The Road division that we see today will work in a different way in 3 to 4 years. So when we talk about Road Way Forward, that was the old name of the new strategy. We told you about that in 2015. At that time, it was an IT project to replace the legacy in order to grow the business. Today, it's actually a business project. It's not only IT. It's a business project because we can develop the business. We can grow the groupage network. We can develop the business. Some of it that we have developed during the last many years, some of the applications like the Quote Tool and the Mobility Platform, we are using right now currently, but we will also use that going forward. And as I mentioned, now the name has changed from CargoLink, because CargoLink is IT, to Road Way Forward that is an IT project, IT strategy going forward. The main points that we have currently is that we have, as I mentioned, a very fragmented and old IT infrastructure. We do not offer the same services in all countries. We have a fragmented service catalog, and we do not think network where we really can make value to our customers. So the new program. So for all of you who have not understood it yet, that is basically ONE scalable IT infrastructure with standardized and digitalized workflows. It's -- in parallel, we are developing ONE European groupage network. In easy terms, it's about having a kind of a bus schedule that is driving every day from all these different terminals, more than 100 terminals, a day with double-deck trucks, double-deck trailers and filled up with groupage. That is what we are aiming at. We would like to grow our groupage volume a lot because the margins are so high. And if we can support it with our infrastructure and we can support it with our IT, then I think it's a good upside. Before we can roll out our new IT platform, then there is a lot of effort to be done in the countries because we have a lot of legacy things in our current IT environment. We need to implement a service catalog. We are already doing that. We have thousands of different ways of making agreements to our -- [indiscernible] agreements to our customers. This will be simplified, and we will only use about 10 templates. So we have to standardize going from this big number of making agreements to 10 templates. Otherwise, the system will not work as automated as we would like. The booking data quality is also a pre-requirement. Otherwise, it's simply impossible to make this work. We have a standard booking now, standardization of 12 fields. And we can actually go in customer by customer and see how is -- how are they compliant with the 12 fields. Some of them, they provide 9 fields. Then we go to the customer and say, okay, please provide the last 3 fields so that we can get the right booking into the order management and then it will flow through the whole IT application landscape. That is a lot of effort that we have to do, a lot of change in the organization before we can have a successful rollout, but we will do that. Already now when we talk about the rollout plan, we have a proof of concept live in the Baltics, so in the 3 countries. And then in the autumn, we will roll out in Poland. That's a more complex country with 19 terminals. And then in H1 2023, we will roll out in Germany, and that is the most complex country that we have in the Road division. If everything works well and we will be successful in Germany, then we will apply the famous [indiscernible]. I will not say what it means, but some of you know what it means. We will just make a mass rollout. Because if we can make it work in the most complex country in the Road division, then all the other countries can also work with the system. We hope that we will be able to roll it out by end of '26. At least we will do whatever we can in order to do that. So a small takeaway from what to expect from Road Way Forward: higher and standardized service levels towards customers; scalability, including M&A, of course; and then even better operational excellence than we have today. So far so good. Market update. When we look into our current market, then we have some pressure on our capacity. It's driven by the mobility package. And it's also driven by the invasion in Ukraine where some of the drivers, they have gone back to fight for their country. So far, we have been able to serve our customers. We have been able to find capacity. We have a strong procurement setup in DSV Road, and we have a strong network of how to source capacity. When we talk about cost inflation, then, of course, our cost is increasing. Our prices are also increasing. Personally, I believe we have pricing power. The cost that we receive, we can pass that to our customers. And when we look at the demand, then, of course, as all the other guys today have talked about, a lot of uncertainty due to the macro economy. But we see that the demand is holding up so far. Of course, when you look into the B2C shipments, there was a peak last year when everything was closed down, and it has slowed down when we talk about B2C. And in our industry then, or in the Road at least, the automotive industry is also suffering due to lack of components, and we can clearly see that. Takeaway from my presentation, that is, ONE scalable IT infrastructure. That is what we're aiming for so that we can be M&A-ready, so that we can harvest all the synergies of all the flows that we have in our today's environment. It's about developing ONE European groupage network. Everything is connected, faster lead time, better quality, higher transparency, able to grow the market share of the groupage volume in DSV. And then when it's fully implemented, the groupage network, the IT in '25, '26, we will see all the synergies coming in. So it's a pretty exciting strategy, I think, that we have launched, fully supported by everybody in DSV. And we are, of course, very excited about it, and we believe that this will take us to the next level. It requires hard work, definitely, but it will take us to the next level. Yes?

Excellent. Thank you, Søren. Just flip one more because then we have the Q&A session, and we already have the first online question from [ Uni ] from Nordea. Are customers ready to change their ways of working agreements, standardized services? And how has this been received in the countries where we have rolled it out?

And it's a really good question. And yes, the customers, if we go into a good dialogue with them, they are also ready to change because they can see that if we change something, they can also get a proper invoicing. They can get a proper reporting. They can get better transparency of their shipments in the system. So we are not only doing it to our own benefit. We are actually doing it for mutual benefit.

Great. Sathish, I think you...

So Sathish from Citigroup. On the Cargo Way Forward, right, so you've given the time line showing mainly the European market. So how should we think about the operations in North America or in South Africa? And then the scale you get here, the groupage, is it mainly in the Europe? Or you -- so when you acquire someone, were you able to still scale it up elsewhere in the other region?

Yes. We start with the last question. First, the first couple of years, it's only Europe that we are preparing our IT platform to cater for that we are growing on the groupage. Eventually, we will do the same in the other regions. It's not on the radar yet, but eventually, we will do that. There is a different dynamics and different markets when we talk about Europe and when we talk about North America. Currently, we are more [ focused ] in North America than we are having an infrastructure like we have in Europe, but it doesn't mean that we will continue to be [ focused ] in North America. Perhaps we will somehow adapt this solution that we have in Europe to North America. Already now in South Africa, they are actually working with BluJay. It's also -- it's a new IT application and the vendor -- the TMS system called BluJay. It's a different market. Again, in South Africa, we are predominantly making parcels, B2B parcels, B2C parcels. So it's not the same dynamics and the same market that you see that we have in Europe, and that's the reason why I can't really say, let's say, that we have it on the radar how to -- we will do it going forward, but we are thinking about it. And the first question was?

[indiscernible]

Okay. Thank you.

Lars Heindorff from Nordea. I don't know if you can share the GP contribution from groupage, LTL and LTF (sic) [ FTL ], how different it is and what kind of impact it will have on the contribution margin if you succeed in your aim of getting the higher groupage. That's one thing. And then the other part is if you can quantify any way what kind of impact the implementation of the Road Way Forward will have on your conversion ratio.

Yes. In our current system, we actually have difficulties to see the GP on FTL, LTL, isolated and groupage. We basically do not know that. We know the average. I have -- we have kind of a rule of thumb when you look into the margins that the FTL, low margins, 8% to 10%; LTL, 15% to 20%; and groupage, 25% to 30%. So that's also the reason why we would like to go after the groupage volume because we already have the existing infrastructure. We have more than 250 terminals already in Europe, but we have not connected them to each other. So it's -- actually, building up the groupage network is not that difficult. That's probably the most easy part of it. But getting the IT platform to support it, that is the one which is more difficult. When we look into the conversion ratio, well, today, we are 26%. We are well underway to reach the 30% and -- well, now Jens Bjørn is really looking at me, so I have to be careful what I'm saying. But of course, we will exceed the 30%, and we will also exceed the 30% to a certain level. I think it could be around the 35% plus or something like that. Is it correct, Flemming? We have -- I think it's not the first time...

35% to 40% is what we...

Exactly.

That's what's possible. But then we also say it may require M&A to really get the full benefit of it. Alex?

Alex Irving from Bernstein. You mentioned earlier on you'd like to do some M&A in the future in the Road business. Assuming this is after the initial rollout of Road Way Forward, what sort of targets would be most appealing to you, geographies, verticals, business models?

When we look into where we can get the highest synergies, that's, of course, in Europe. Where we will have the least risk is also in Europe. So if we could have a regional player in Europe, having -- or doing more or less the same as we are doing, having a lot of groupage could be fantastic. That would be an ideal target. When we look into North America, it's a different ball game. It's still a very young organization. They -- we started after the UTi acquisition. So they are only 6 years old. But still, as you could see, they are contributing 7% of the total GP. So it's a very attractive market in U.S. to grow, but we also have to find out where do we want to play. Today, we [ are brokers ]. Will we continue to be [ brokers ]? Or should we actually establish an infrastructure like we have in Europe where we can make a lot of value add to our customers. Is that...

It is. Thank you, Søren. Sorry. Alexia, one last Road question then we have to move on.

It's Alexia Dogani. Just on the -- your ambition to have a pan-European groupage network, will you be the first one? And if yes, what kind of barriers to entry are you building? And then if I just ask a [ smaller ] question. In terms of the capacity providers, do they have to make an investment to link into your IT platform?

Okay. Why don't we take the last question first. No, they do not need to have a big investment to link into our platform. Jens mentioned API or EDI, but preferable API where we can exchange a lot of information very fast, and that's not a big investment for anybody really. And in general, when we make EDIs or integrations, then the cost is normally on our side. That was question number one.

The first one was does anyone else have a pan-European...

Yes. Yes. We are competing against Schenker. They have a network. Is it high efficient or not? I don't want to comment on that, but they have a network. Dachser, they also have a network. It's not pan-European. And that is actually where we can make a difference because not a lot of companies in the industry, they have a network because they have not invested in the infrastructure as we have. They do not have 250 terminals across all countries in Europe. So if we can connect all these terminals together like the bus stations, put a lot of volume into it, then we can actually -- we can do -- well, give it to me.

Sorry, Brian.

Am I done now?

You are. Thanks a lot, Søren.

Okay.

And over to Brian from Solutions.

Can I have it or...

You can certainly.

Good. Thank you. Good afternoon. I'm not so happy with Flemming. He's put up a picture of a warehouse without any pallets or boxes or...

It looked cool.

Or anything so it'd looked cooler. But actually, it's a photo of our mechanization when it was building up down in Netherlands, but there's also no people on it. And Jens Bjørn, he was happy enough or good enough to show a very nice photo. And I think we probably don't mention it enough, so I'll mention it here. The Solutions division, we have anything between 25,000 to 30,000 people working in the warehouses every single day, and you are just kind enough mentioning that they do it on a safe circumstances. So that's good. Anyway, I'm Brian Ejsing. Now we mentioned everybody how many of the years we've been in the company. So I've been 36 years at the company. So I actually started before I was born. I have to [ play ] a little along this. So let's talk a little about solution, warehousing, contract, logistics for the next 15 minutes. And the investment case, yes, we are extremely proud of the figures which you can see. Within Solutions, you can see a revenue growth of 21% and a gross profit growth of 29% per year over the last, I don't know how many years, 6 years; and a conversion rate of 34% and 13% in the last quarter, which, of course, also was explained to be reasonably extraordinary. So -- but last year, we made DKK 1.7 billion, and our ROIC was 13%. And I just talked to [ Anders ] and he said, "In 2015, you promised me more than 20%." And I said, yes, it was before I know there was something called IFRS 16. So in principle, we've probably been there if there was nothing called IFRS 16. But we don't calculate that, but we could. But still, we are targeting 20% even with the IFRS 16. So what are we? We are global present. We want to talk about large multiuser campuses. We are diverse customer base. We are not specialized. We are following the verticals of Rene's team. We play in all these areas. We have a long-term strategy for property development. I think perhaps some of you guys might have a question about gross profit and why is it developing as it is. I think this is one of our biggest factors in this. We develop the property. We take it on a lease of 10 years with an opportunity of leasing it longer as well. So we -- in a market where we have increasing rates on leases, in principle, we could keep our rate at a level which is low, and this is good for our gross profit at the moment in time. So we have industry-leading markets, and we are trying hard to get to the ROIC which we would like to have. What are we going to talk about? The global footprint and the market growth; our campus strategy, and we picked a couple of things within our strategy -- the campus strategy; and automation and then I will wrap it up. This is how we've developed. As you can see, we developed quite dramatic from DKK 330 million to DKK 2.3 billion. But the photo is actually there to see that 97% came, in 2015, from Europe and now it's 59%. So we have actually benefited quite a lot of the M&A spillover. I did mention -- I did say in our strategy, we don't really want to buy solutions. It was more a little Road and Air & Sea. So quite good that we got something as well, but we have benefited quite a lot from that. In UTi, we got a strong American setup and the South African setup. From Panalpina, we got a good LATAM setup, especially Mexico and Brazil. And now with GIL, we got a strong, strong presence in the Middle East. We are now market-leading in Middle East, and it's also -- we've also said it in the presentation, they have provided quite a lot of -- sorry, quite a lot of good profits also into the division purely because of their strong presence in that specific market. And all of them actually, also UTi, gave us a piece of APAC. So we also actually came to quite a good footprint in APAC. But I don't think that we should forget actually bullet point #2. We've grown Europe 100% and the market has not grown 100% over 6 years. So we have actually, through investing in the right facilities, in the right areas, been attractive to the market. So we have been able to grow Europe quite dramatically as well without M&A. And what we want to do -- now Søren said he wants to grow -- we want to grow -- make sure that we are not dependent on Europe. You will see in the next slide that Europe is not really the place where there's -- that's not really the place where we, in principle, believe that the strongest growth will be. So it's our aim to get this below 50%. This is how we see where the market is going in our part of the business. As you can see, in '21, there's been quite a dramatic growth of 9% in the contract logistics market. It's now normalizing, down to approximately 5%. But if you look at the bullets, you will see APAC is up there with approximately 8%; and Europe, probably 2.5%, in the years to come. So that's important for us to be able to play in the markets where we can grow. And on top of that, we see that -- we talked about a couple of times now, yes, COVID, what has it done to the supply chains, inventory levels. We see it very clearly. We see 2 things: higher inventory levels, but we also see multiple locations for the same customer. The [ PCP ] setup, they are rethinking their strategy. And we've talked about nearshoring, and we've not seen it yet. Actually, we have seen it quite a few places but very dramatically in Mexico. We see it very dramatically a lot of nearshoring is happening close to the U.S. border in Mexico. So we want to grow. We want to focus on e-comm and health care. It's fast-growing markets, and we are actually -- whenever we're putting down a campus, our strategy is there has to be a pharma part, there has to be an e-comm part, there has to be a DSV fulfillment factory. We have to be able to offer these segments to the market as well. And bolt-on acquisitions, since I'm not a part of the big strategy, so we are looking a little after bolt-on strategies. Of course, in our division, we actually made one last year here in Denmark, Prime Cargo, together with -- you've got some spillover, Carsten. So that was quite -- so which was at e-comm fashion, a bolt-on. But we would like to look for these kind of specialized companies around the globe, can both be geographically or in segment. So we are doing that. This is where we are today. If we look at the map, it looks like -- and I have said to Jens Lund, I am everywhere I would like to be. I cannot complain on anything -- I don't want to be in any country which -- on this map, where there's no dot, there don't need to be a dot. I actually said Chile, I would like a dot in Chile. But okay. But in principle, it looks very nice. But of course, I think it's important. There are, of course, areas where the dots are very small still. Like we talked about production moving out of China. Everybody talked about Vietnam. We don't have a good enough setup in Vietnam at this moment in time. We're building it. We are investing in it. But in principle, there are areas where we could be much better in markets which is going to be strong in future. And luckily now, one of them actually was Indonesia. Indonesia is perceived to be a top 10 logistic markets in the world in 2025 by the same sources -- not that source. But in principle, we have nothing. But now with GIL, we are now the market leader. So we have -- through that, we have come into a very important market in Southeast Asia. And -- but as I said, a few dots where we would like it to be bigger, and Vietnam could be one of them. Korea could be one of them. Probably we'd like to have more dots in U.S. We -- it's a massive, big market. If you look at how many dots we have in Europe compared to U.S., we still believe that we could grow this market dramatically. But anyway, 7.5 million square meters, 500 sites, 32,000 people. It brings us at least into top 10 in the world in contract logistics. I cannot brag about being the same position top 3 as my colleagues, but we're working to get there. So the campus strategy. First of all, I just want to say, it's not the only thing we do. So we have a couple of other strategies like e-comm, the campuses, fulfillment factory I will talk about and also health care, we just mentioned it. But the campus strategy, what is a campus? A campus for us is a large facility or a large cluster facility in the same area or in the same address, so 50,000 minimum up to 200,000. We're actually building now one side of 200,000 square meters in Netherlands. It's going to be our largest site. But -- so -- and it has, of course, to be in a hot spot. We don't want to build 200,000 square meters [indiscernible] if it brings us nothing. No customers want to sit there. So it has to be the right place. And so how are we doing this? I will show later why it's important for us. We're actually going into every single country trying to map where is the hot spot, where is it we want to be, or region. Perhaps not every country. It takes quite a lot of time to actually identify the right piece of land. And sometimes, we even have to say we need to develop the land from one [ step to the ] right to another right. We have a group of people sitting upstairs. You mentioned them, the Property division. They are then project managing and arranging for building. And after that, we are divesting the building and have an asset-light model. And we aim to increase our footprint with 1 million square meters a year. It's not an increase in square meters because, of course, there is consolidation from our sites which we leave. So 30% to 40% of the square meters needs to be for new business growth. And of course, if we can get a couple of our colleagues also to be in the warehouse or in the same location, it will be fantastic. And yes, as they say, everything in this country -- company has to be above 20% ROIC, so this has to be this as well. So what is the benefit of this? So when we create these large facilities, we're able to flow with the customer. We are saying to the customer, don't come with a dedicated -- we don't want to give you a dedicated space. Of course, if the customer insists, we will be able to do that. But otherwise, come into our large multi-customer facilities. It will bring you the flexibility [ in your seasons ] with your business. We can facilitate your growth. We can facilitate your strategy. On top of that, what we see is that we -- when we are consolidating sites, we get a new modern infrastructure. Of course, a normal site is 10 years when we leave it or 10 to 15 years after we first took occupation, meaning, in principle, of course, technology has changed. [ Reacting ] system has changed. The height of the building has changed. How we work has changed over the last 15 years. And what we see is actually when we get in there, we actually are able to produce ourselves around 15% better in the new campuses. We put ONE IT in. So Jesper is probably going to talk about that, but it means that we can be standardizing our implementations. Implementations is one of the pain points we have, not just us, our industry, contract logistics. And it takes a long time. It's a cumbersome process. And then because we are developing these sites ourselves, we can then in the process take a 10-year lease with an extension option, meaning that we can actually put in some automation. I'll come to this later. So it doesn't necessarily need to be a customer-specific automation because we have the warehouse for such a long time. And we talked about the green profile. Of course, as far as I remember, is that 40% of all the materials in the buildings has to be reused. Well done, 40%. I actually looked it up. And so -- about 40%, this is our target, 40% of materials in the new buildings has to be reused. And on top of that, we put a few solar panels up. Or down in South Africa, we collect some rainwater. And in Netherlands, we built a facility of 90,000 square meters. It's the first facility in Netherlands without any warming from gas or electricity. We get it from the earth, so it's quite fantastic. So we have had too much text. Flemming says, "Show them some pictures," so I will show you some pictures. So this is actually in Lancaster. This is our latest new site. As you can see, we consolidated 3 sites. So this [ 15% count ] there as a ONE DSV facility. So -- and we actually visited -- Jens and myself visited it 3 weeks ago, fantastic. But sometimes, you have to realize the magnitude of this as well. So those 3 sites, they had to move into this site. 1,483 full truckloads they had to move from one site to the other site to get it filled up. So it was a project that takes approximately 8 to 10 weeks to establish such a facility with quite strong project management. The same with Milton. In 2019, we consolidated 4 sites there. It's -- and I think it's a good story. We started in 2019. Now it's a top 10 site within the total network of profitability. So actually, it proves our strategy works. South Africa, we have 130,000 square meters. And when I said to Brian [ Winter ], why do we not put more solar panels on than what's up there for South Africa? The sun is shining all the time. The grid couldn't take more. The grid, in principle, in South Africa could not receive more electricity from us. And I think it's a big problem for us. In principle, we could produce much more electricity than we use. On principle, the grid cannot take it in certain countries. And this is our next major project besides the 200,000 I mentioned down in Netherlands. So -- and this is, of course, not just Solutions. Solutions is just the part -- a very nice large part. It's not the -- these small things in France [ and so on as you know ], I don't know, you can nearly not turn around [ in them ]. But anyway, 320,000 square meters will be standing there in 2024 in Horsens, and we have quite a lot of sites in Jutland we are then able to consolidate. And I just wanted to show you, this is what we believe that we are getting up in the next 1 to 2 years. And as you can see, quite global, but quite heavily in Europe. It's mostly consolidation. As we just talked about, 8 sites in Jutland. But as we just said about, Reynosa, 60,000 square meters. As you know, completely new business because of the nearshoring. So we're acting upon that. And now Kuwait and Jeddah is getting in there. It was not in there before the Agility merger. So that's -- we are starting to put Middle East onto the road map as well of how we can develop our infrastructure around this. And quite interesting for us, we just sent Jens Bjørn out to Singapore and he met with the local authorities there and we got a piece of land. So now we can actually start to develop our first facility in Singapore. It's going to be 5 [ storage ] high, 12-meter inside on every [ storage ]. So 60, 70 meters high. We're looking forward to that. It's first time. Also the first time for our Property division that they have to build these kind of things. Good? Automation. How am I on time?

You have...

I have 5 minutes, okay. Then let's do this reasonably fast. We do this -- I'll do it in the middle. We apply the enterprise approach to most -- so it was not so interesting. Okay. Of course, if you look at the last bullet there, customized for large accounts, we will have a plug and play -- we will have build-to-suit automation for very large customers. So you will see a movie a little later about what magnitude of construction that can be. But in general, we do have an enterprise approach, meaning that we have created a catalog of standard mechanization, which we -- Jesper has been kind enough [ to hook up ] so we can plug and play. So these automations, we can put them in very fast. And of course, you choose the one which fits the customer, which we have in this specific site. But what we have also done is that we have created the DSV fulfillment factory. It says there is also a plug and play. It's quite unique. It's our answer to e-comm -- or let's say it was our answer to e-comm. Probability is that -- a problem is that it has such a big interest that quite a lot of our large accounts says, "I also want one." So in principle, it was supposed to be a multiuser e-comm network of AutoStores. And in principle, it will -- we have to order more, so to say, to get that network [ up stand ] because some of them has been taken by our larger accounts. But it's quite unique. It's a pay-per-use concept. So the customer, in this respect, are not been asked for commitment. They've not been asked for CapEx. We are taking that. Of course, then we also take the gain on the productivity. This is clear. But it's quite unique in our world that we're doing that, and we are putting up a network around the globe to serve this kind of [ piece pick ] operation. And it doesn't only have to be e-comm. It can also be spare parts. We had a telecom company the other day who said this is perfect for spare parts. It can be for pharmaceuticals. It's dust free. At least it's dust-free [ in sites ], and it's very good for high [ venue ] because its pilferage is nearly impossible. So we have put up a road map for this. As you can see, we have put it into 2 waves. But in principle, it is our aim to have a global network of these kind of pay-per-use mechanizations for [ piece picks ]. And right now, we have 16 points in the world, and we have implemented 5. Another 5 will come this year. So we're halfway when we're finished with 2022. So very, very happy with this project. It's very -- create quite a lot of attention from our customers. That, I cannot do anything about. Somebody else -- this is showing the magnitude of the plug and play automation which we have created for New Balance. You can see the shoe there, so it's not a secret, down in Netherlands. This automation will do 23 million pairs of shoes distribution in Europe per year. Do I need to do something? Okay. [Presentation]

So some say that [ this group ] is complicated. But -- okay. It -- but perhaps also mentioned, we had to empty the warehouse for 12 months. So actually, it was a [ start-up ] investment of having an empty warehouse of 60,000 square meters for 12 months while we were building this. So as you can understand, of course, it has to be a long-time commitment to take these kind of investments for customers. Anyway. I'm a simple guy. I only have 3 words. Globalization, campus and automation is what we're doing in the Solutions or trying to do at Solutions at the moment in time.

That's perfect, Brian. And since you started...

That's 27.5 minutes.

Yes, and you started a bit late. That's Søren's fault. But we'll just take 5 minutes with questions, then we cannibalize a bit on your...

I'll take this before you [ run it around ] my hands.

Great. Rob? Sorry. We need the sound. These guys.

You have no online...

We have more than 200 online now.

Just a quick question on inventory levels. There's obviously a big debate in the market at the moment about whether business will want to hold higher inventory/sales ratios going forward, et cetera. What are your customers saying to you about that right now?

We are seeing clearly that the inventory level is increasing of, I think, 3 reasons. First of all, the BCP. I want to continue -- and also splitting the inventory levels. Second, the nearshoring is, for us, is also happening. In principle, that will double stock locations because they also do it at the factory level. So we see this clearly happening at this moment in time. And we have -- and also, our suppliers of warehousing, they are 99-point-something full. It's really, really high levels of inventory at the moment. Then, of course, there's disruption in the supply chains. There are also some warehouses which, in principle, today are completely empty even though the customer pays for it because they are late in their supply chain. Carsten cannot get the containers quickly enough in. As soon as they come in, they have to go out because he's late for the season. But in principle, they are reserving space because they need it. They know [ what they need ].

Just one quick online question here from Carolina from Morgan Stanley. Is automation the main driver for improvement of return on investment?

No, I don't necessarily think it's the main driver. I think we also -- I just mentioned that we have been able to create these campuses which gave us a long-term cost picture which we can benefit from. But automation, of course, also helping. It takes out the cost of labor. We can -- with certain AutoStore, we can quadruple our peak productivity. But when we talk about the ROIC calculation, of course, there's CapEx we put on the balance sheet for the automation. So it's not necessarily -- it's giving a ROIC improvement but not necessarily the same as the productivity improvement.

It's a mix of several things.

Yes.

I think maybe Michael?

Michael from Danske Bank again. Back at the last Capital Markets Day, you showed us a split of your revenue split into, I think, freight management storage. And if you could kind of give us some rough update on that? And also, you also showed a chart where you said that typically, new contracts were loss-making the first year and then about neutral the second year and then going into...

Have you been looking it up? I can't really remember it. 25% -- approximately 25% of our turnover is in freight management, and I think it's the same answer as last time. There's not any specific change in this. So we provide the freight services from the warehouses. Customers, of course, can buy the service freight and warehousing separate. But in principle, they also can buy both of them. 25% is freight, and I will have to -- when we talk about storage and logistics services, the pictures are now a little blurred because of the Agility part coming in, which is very heavy on contract logistics because of the low -- sorry, on the storage because of the low salary levels in the area. But we have had approximately 20% of our turnover in storage, and it might have increased slightly now. I don't have that...

That's still right.

Any new contracts loss-making...

In general, I can say there's nothing changed in this. We have probably become a little better in implementing. We've been stronger in IT. We are probably also more professionalized in our projects. So perhaps we have a shorter -- the time to profit might be shorter than it was, but there is a start-up cost on projects of new customers. And I said [ one is ] neutral profit, this is correct, last time. And it might be, what do I know, 8, 9 months now instead of 12 months. We believe that we're better than we were.

Great. I think we have to cut it short here because we have a very sharp 3:00 deadline on the others. And so thank you, Brian, and we will reconvene here at exactly 2.

Good. We gave you 10 minutes break this time [indiscernible]?

Yes. [Break]

Great, almost on time. We are back, and we've saved some of the best for last. Jesper, take it away.

Thank you. Brilliant. Okay. Now it's time for some tech and for some IT, and I'm happy you're still here. So great. Is it -- there it is. My name is Jesper Riis, Group CIO. I've been in DSV for a little over 7 years now. So I started when I was 42, Brian just a follow-up on yours. Many of you have heard about our platform, at least we've discussed it a few times. I know Flemming, I'm for sure, has been talking about this consolidated IT platform, scalability, et cetera. So I brought a few numbers to emphasize that. First of all, if you look at Air & Sea, we handled in 2021 over 8 million jobs. If you look at our TMS system for Road, even though it's not perfect, but Søren will make sure to go with the team, they we'll get there. But we're still handling -- handled around 40 million shipments on the platform. And finally, for Solutions, we handled more than 220 million order lines. So it's, to be honest, it's massive, massive volumes. It's also important to have a lot of integrations to customers. We have talked about EDIs for quite a few times. And if you look over here, as we speak, we do around more or less 26 million messages per month on the EDI. Public API, which is certainly moving ahead only for bookings, over 50,000 bookings. And if you look at our customer portal, myDSV, it's over 400,000 bookings per month now. So it is -- at least, we're very proud of the platform. We can improve things. Yes, of course, we have a long journey ahead of us. But it's certainly massive numbers that we are -- volumes that we're talking about. The focus for today is mainly innovation. So -- but you feel free to ask questions in other areas as well. But innovation is a big thing for us. But before we start with innovation, again, I would like to say a few words about our consolidated IT platform. And then we dive into how we work with innovation in DSV because don't estimate that we need to involve on the IT as well, like everybody else. Technology radar, just a small peek of how we see the world. And finally, some use cases. And sorry, they might get a little bit technical, but I hope you will enjoy it anyway. This is a high level view of our IT platform. You can see it in the middle here. In the lower part, you see some of the basic principles that we developed the platform on. And at the very top of this, you can see some of the benefits. So if you look at the left corner at the bottom or the lower part, standardization, you will hear that all the way around. You also heard it from most of the presentations. We want to standardize as much as we can on the platforms. And today, for example, we have standardized, for example, on Air & Sea, it's one system convertible or consolidated. If you look at our global master data, the same. If you look at CM system, one system globally, HR system, one globally, and I could continue for quite a few areas. And then we do have areas like on the Road where we still are working on some. And there's also on the Solutions, we have standardized a lot, but there's still some to go. And when we acquire new companies, there's more work to do. That's how it works. Standardization, for example, we standardize processes, infrastructure applications. And by doing so, we can reduce complexity. If you look at applications, we only want one process, one application. Since 2000 -- the beginning of 2016, we have closed over 3,800 applications. Imagine we have not done that, we will have a massive amount. If we lower consolidation, we already addressed it. We try to consolidate as much as we can on a global level, and get the benefit of operating the same way in all countries. We also consolidate on the data centers. If we have not consolidated data centers, just 7 years back, we would have like 30 or something. Today, we just received some new ones that we are closing, hopefully before September. But nonetheless, we'll be down to 4 data centers again. That is the plan. So consolidation. The good part is that if the business is not out of the data centers that we acquired from GIL, they will get a -- not a fine, bill as they call it. So there is a huge cost to be the last one leaving the data center. Then you get the full cost for everything. So it could be a very expensive applications. Standardization, consolidation, reduced dependences so we can execute on our strategy. I think you put it in the right way. So if you have a consolidated platform, you also support security. And say if you have endless applications, you also have much more entrance points to your security. So if you consolidate it, it's easier to protect. In the center here, you see some global master data, something Jens invented together with the team way before my time. But we are really -- utilize this. So customers come from one place in our master data repository and pushed it out into the different systems. So there is a lot of good element to this. And on the top, integration part. We need to be even more flexible when it comes to integration than we are today. We do have a lot of EDIs, as you saw and heard. We want to move even more on API, but it is a journey that is ongoing. So with the platform, at least we enable the business needs more or less. Søren is still complaining a little bit, so we're working on that. We can scale for -- on the applications, and we can grow in it. And we have -- I think the number speaks for itself, you saw in the beginning. Be cost efficient and, of course, execute on DSV strategy. But it is, of course, to make this more perfect rolling out the Road Way Forward is an important parameter. The last bullet here to come back to innovation. Innovation is also easier to implement if you have a consolidated infrastructure. So for example, if you need to add something to Carsten's setup on Air & Sea, if you implement or integrate into the existing TMS system, it will be available globally just after. Again, if you have a very distributed and not consolidated infrastructure, it's more difficult to roll out innovation. But innovation is certainly high on our agenda. Innovation happens everywhere, and it's not only IT and innovation, it's process innovation, you name it. So innovation goes on everywhere in DSV. But we have decided to have what we call, Innovation Hub, with a strategic approach to innovation from a central point of view. And it is a place where all employees, managers, customers, et cetera, can hand in ideas to the innovation group. And in here, you will get support to try out prototyping, pretotyping. There is a road map. So we make sure that it is prioritized, that is done by Jens Bjørn and Jens Lund and Mike Ebbe and the executive management and then it's put on the road maps and rolled out. And do we fail? Yes, that's a part of doing innovation. But it is a place where we at least can ensure that these ideas get a chance to be evaluated and rolled out. It can be incremental ideas. It can be more radical ideas, New Business, they all count. Some of these has already been addressed, but when we do innovation and have a strategic approach to it, it also needs to meet some of the market trends and responsiveness and resilience. It's already been addressed today. But what would that require? The complexity we talked about, more visibility. I have a small showcase later on. What we are working on, what we actually have rolled out for -- in some places for visibility, but it's also about dynamic planning to improve that area. Another focus area for the Innovation Group is, of course, green logistics. This is getting more and more important. So anyway, we can calculate the carbon footprint in a better way, more precise way is in focus. But also using, for example, AI, in this case, to predict better or the greenest route is also a focus area. When it comes to automation, call it, accelerating use of data and AI. It's -- we will all see more on that. We actually have developed a lot in that. Defined we have a full group only working on AI now. And I think that is a technology that will certainly make a difference in the future. But the push for automation here is very often on the labor-intensive tasks, and I have one showcase that I would like to show you later on. Technology radar. We use the radar mainly for communicating both to you but also internally. And we use it for what kind of technologies are in focus, what is that we should prioritize. At the same time, it's also show what we don't prioritize and it also shows what kind of technologies do we believe will be more important for our business in the future and which one do we deselect. So if we look into the technology radar, this is how it looks now. Technologies that's been implemented for quite some time and rolled out. They will no longer be on this overview. It's not relevant anymore. It's implemented fully. But the way this is structured is in the inner circle in the middle -- sorry, at the bottom here, the inner circle, you will find things that is adopted. It's been through the innovation process. It's implemented in small or larger degree. The next circle is more what are we testing or trying out, but we haven't really found the really good business case for it yet. But it might happen. On the Assess part, we move into things that is relevant, and we might see what others are doing and investigating. But we haven't taken on a specific project trying to see what it can do inside DSV. And finally, the track is something that certainly could be relevant. I like that we have added the space access on it. I think it will be a while before we start moving cargo out there. But it's just to show the extreme view on it. I have a few small -- few cases here I will go through. One of them is our artificial intelligence when it comes to something called customs clearance or customs declarations. I also have an example for Digital Twin. They're all in the -- down here. One on Internet of Things. And finally, just a picture of one of our drones for cycle count. But that's 4 cases and then I will be done. Let's take the first one. Up here, you see what we call customs declaration. It's something we do a lot. There's also labor-intensive work. So we have created solutions where you can automate by use of artificial intelligence. Artificial intelligence is just a way where you get a machine to perform cognitive functions like a human mind. So it's not that dramatic, but it's still complex to start up doing these applications in the beginning, but then the team learn and get better and better. So we have invested a lot of time in this, but I do believe it will pay off in the long run. But what it basically is doing on the PDF invoice there, it's a commercial invoice we received from the customers. They will normally have a transport document as well. What the AI engine is doing, it's reading all the documents. It will know the context of the document. It's been trained just like you train a human. It will know what data and where to place it and then it will automatically fill it into the Export declaration where the authorities can approve it. We have chosen to add something in the middle where the clerk can see the result and do a verification before it's skipped off because it is not 100%. And you will not -- you will probably not get it to 100% in all cases. But there is an area where you -- the clerk can verify or make changes if necessary. If they make a change, it will go back into the AI model and it will not make the same mistake next time. So it is a way to remove some labor-intensive work. At the same time, you can increase quality. Potential is big, but it's not easy training the models and it's not easy to roll it out. So there is a lot of work to be done around it, but it is a technology that I'm sure you will hear more about in the coming years.

Would it be possible to make this model of -- handle a DCF model doing -- analyzing stocks?

I think many have tried, but I don't think anybody has succeeded yet. So maybe because the market is unpredictable or there needs to be some kind of pattern here, but I don't know. Good. The next case here is called Digital Twin. At digital twin, and I think Jens also mentioned it, Jens Bjørn mentioned it in the beginning, it's about having a digital flow or digital model of the real world, and then you use the Digital Twin, in this case, to update or improve the real world. And this is just one of the examples. Today, when we receive, for example, on a terminal, you will normally receive the goods with weight and dimension on it. Basically, if you drive the truck -- that's used for billing then. And then if you drive the truck around the flame -- frame, sorry, then it will automatically scan and give you a 3D model of the goods. When you have the 3D models, then you have the dimensions, you can export that to the system and check if the customer did declare it correct or at least put in the right dimension. And if not, correct it and then charge the customer according to the agreements. So it's just a way to work with a digital world and optimize the real world. And that is also something that is happening all around us today, but it will also be more and more because it's a good way to get a place to optimize things before you actually implement it in the real world. Or in this case, where you simply get the data from the digital world and use them to optimize in the physical world. Internet of Things is another area. Internet of Things just means you connect devices to the Internet and then you can share a lot of information and data. To come back to the responsiveness and the resilience in the supply chains, which has been mentioned quite a few times, this is one of the tools that we have created. Basically, you can add a sensor to your goods. And then in the system here, you will monitor it, you will be able to see where it is at all time. You can also have sensors with shock or heat and other things in it. And basically, you'll be able to monitor where is your goods, did they leave the warehouse as it should. But you can also put rules in the system saying that I need some geofencing on this transport, you can see it on the right side. So there will be an alert if it leaves a certain route or leaves a warehouse. So it's just rules you add to the system. So this is just an example at least how to make the supply chain more visible and get more alerts. And I think this is also something we'll see more of in the future. And final slide, autonomous drones, it's active for real. We use these autonomous drones now in a few warehouses doing cycle count. Of course, this needs to be rolled out before there's a really good business case in it. But nonetheless, it is operational today. And maybe it's -- maybe you will see one later today. I don't think it will be flying, but maybe it will be placed in the building where we have the tool later on. But very simple, when the staff go home for the day, then the drones will start flying around. They are autonomous, they find their own locations, they find their pallets, double check if the pallet is placed according to where it should be, according to what's in the IT system. If not, you get a check mark. And then in the morning, when the staff come home, they have a list of what needs to be corrected because there apparently is a mismatch or it's not the same in the system compared to the location of the pallet. So it's a simple use case, but it is pretty nice seeing these flying around and do the work when everybody else go home. But hopefully, you will see more of that later today, not in the air as far as I know. So to wrap it up. Consolidation and scalable IT platform is the core in our business, no doubt. We have come far. We still have a way to go, and this will be an ongoing journey especially when we do acquisitions like with GIL lately, then we have something to clean up again and move it on to our platform, but that's how it works. And as Jens Lund also mentioned in the beginning, it's all about transparency, productivity and scalability. And then I showed you a little bit about how we do innovation in DSV, at least, a strategic part of it. And you saw the Innovation radar, Technology radar. And finally, some use cases. I hope you found them useful. But I'm quite sure that in the coming years, we will see much, much more of these new technologies coming into our business. That was it for me.

Great. Thank you, Jesper. I think if you push one more, then there's a Q&A slide.

Yes.

And that's your queue. If you have questions for Jesper. Muneeba?

Muneeba Kayani from Bank of America. So do you think your competitors have a similar technology innovation strategy? And how hard is this for others to kind of replicate?

I would say the consolidation part, of course, I don't know what the competitors in details have. But I do believe we are quite far with the consolidation of the platform and how we work with it. I'm not sure that our competitors is that far without knowing all the details, right? When it comes to the innovation part, I'm quite sure they're also working on a lot of these things, I would be surprised if not.

This is one of the places where we sometimes to quote Jens Bjørn, if conversion rates would show something about systems, then we must have something that is just about industry-leading.

So to ask, we're very proud of the platform, and I do believe we're quite far with it. But again, I don't know all the details as well. I think the most important part is when you invent something is to make sure that you roll it out as broad as you can so you get the benefits across all the countries, right? And that's if you don't have a consolidated platform, TMS platform and other things, it makes it very difficult to utilize globally.

Thank you. Alex?

Alex Irving from Bernstein. Can you please talk about the role of CargoWise within the Air & Sea business. Is that changing? Is that evolving? Is it a strategy just being a TMS? Any thoughts on that, please?

So you're talking about our global TMS platform for Air & Sea?

Yes.

But there is, of course, from the partner that we -- it's a third-party product. So there is once in a while, they will develop new things and add to the platform. And we also have a talk with them, but it is a standard platform that we're using. So it's like new features coming in all the time, but it's not evolving like changing every quarter or anything, no. So we have great...

Maybe I can answer that. The system itself is one thing. It's always how you use it, correct? So in general, IT systems are used probably 40% in general, complex systems. CargoWise, we probably use mid-70s now. So we still have room for improvement. But it also -- one thing is to have a plan, another thing is to do it. So I think -- but they do involve -- is it everything we want to do necessarily? No. But we also do make changes to the system from time to time, which we can do.

That's also related systems, right? So for example, for -- in this case, we do a lot of software robotic where we update -- simply go out and grab all the data from the different websites from airplane -- from carriers around the world and update into the system. So there's a lot of functionalities you can build on this third-party product.

I see maybe one last question from Sathish.

Sathish from Citigroup. Just following up on the CargoWise. So initially, you started off buying platform off the shelf, right, to customize according to your needs. Now given where the Road Way Forward is going, is it mainly in-house developed system? So now with the scale of the organization, you see more benefits in terms of developing in-house? Or would you still go and look for third-party IT platform externally? And then the second one. Like how much of your time actually goes into BAU versus, say, all this new innovation related tools?

Yes. To answer your first question, we have a philosophy to say, buy before make. So if there is a product on the market, we prefer a third-party product. And then we can -- if it's needed, adjust a little bit. But in general, we prefer that. In some cases, we need to develop from the very bottom ourself because it's simply not available for us. For Road Way Forward, it's also a third-party product that we have bought and created a partnership where we do the development together with them. To answer the last question, I actually spent -- I must say, I spent quite a lot of time on basic operation as well. I think that's part of being a CIO also. But I invest a lot of time in the new technologies, meeting and see what kind of technologies out there, participate in the rollout of things. So I was actually quite involved in the innovation part together with a lot of other people. Also we have a global [ BCM ] team, they're also very much involved. So it's I think for us, it's about getting the right ideas and actually utilize them, get them out there. And it sounds easy, but it's not. So you need to invest a lot of time in it.

And when you say a lot of time, it's more than 40 hours a week.

Yes, you can say that.

Thank you, Jesper.

Okay. Thank you.

Last but not least, Michael, I can see you are more ready than ever. So thank you, here you go.

I noticed on the agenda, Flemming, that this is the only presentations without Q&A.

That's actually correct. Also there is a Q&A.

Okay. I thought we put a bit of pressure on the slides that is chosen to be there. Yes, first of all, congratulations to all of you guys for being able to survive our entire day with lots of information and now made it to the last presentation, at least here before you can go to the guided tour in Hedeland just across the street here. I promised Flemming to -- since I'm new to this game, I promised Flemming to give a few words on me. I'm Michael Ebbe. I'm the Group CFO now for this wonderful company. I have been in this for 8 months. But I'm not new to the DSV world. I've been in DSV for 15 years, more than 15 years. 14 of them I've reported to Jens Bjørn, the man who invented [indiscernible] in DSV, so something must be right. Yes, a little bit about me and what I stand for, what drives me. Obviously, I'm driven by the results. Otherwise, I would not fit to DSV as well. And other things that I strive to work with and also to my team, that's obviously, that we make, the work probably, we do it decently. And then we work as one DSV. We are work -- we need to work as a team in order for us to be able to create the results. Prior to entering the exciting DSV world, I have been part of this fantastic journey by creating shared service centers, implementing -- integrating systems and so forth, making due diligence, all that stuff. I was a state-authorized public accountant for some years. And prior to that, I spent a couple of years in the Army as well. So I have tried a few things and -- during my life, so to speak. I have a couple of kids, they are nearly grown up now, 18 and 22, and then been married to the same wife for 18 years as well. So, yes. Then a few words about my job. Jens mentioned a little bit about this new split of areas of responsibilities. I will not go into details. But the split that we made, it was -- the complexity has increased significantly in both the classical CFO role and also like Jens mentioned, on the area that he's always been very fond of doing together with Jesper and the divisions. So we made this split. So now I'm responsible for, the classical CFO, I would say, classical CFO plus role. And yes, it's more than the audit committee. I don't know whether you remember, it's a little bit more than that. The key things that I strive together with the team to establish here, it's the same like I have done the previous 14 years. The transparency, we need to maintain and work on the transparency. People need more data. People need accurate data. When we integrate, we need to be able to provide the business with the right foundation to make the decisions quickly. And I can see some of you guys sometimes ask me what are the difference compared to our competitors. And I said like Carsten and everybody else here, I don't know what the competitors do. I do know that from the one -- the companies that we have acquired, I do know how they do things. And compared to those -- all of those, we are strong in making the transparency. We have one version of the truth. We strive to make it available to all the operators, all the departments. So we follow up on a daily basis like Carsten also said, for the P&L on a monthly basis, and lots of KPIs. Another thing that differs compared to some of the companies that we have acquired, we do activity-based costing a couple of times a year. It's not that fun to do because everybody complains when they do the cost -- when they get the cost. But it helped us to keep us on the toes and it help us to measure what does the services that we provide to the customers, what do they cost, so we give the right pricing. That at least is something that, from the companies that we've acquired, that differs us compared to them. Another thing like the divisions in the back office, we also need to make sure that we have an efficient infrastructure. We need to be able to support the business. We need at all times to be able to scale like Jesper and Jens mentioned on the IT platform, organizational-wise. We also need to be able to scale. You can see that from every time we do an acquisition, then we need to integrate them. Latest one deal, that was 17,000 FTEs that need to be implemented in 16 -- 60, sorry, countries and yes, that's less than a year ago. So that also shows that we need to be able to handle these kind of volumes that comes in. Low cost per transaction, it goes without saying that's also something that we need to continue to work on. We do that with some efficient shared services. We have our huge, shared service center setup with -- in combination, we have some local ones, regional ones and also some international ones. So I think that we do have an efficient setup. Obviously, we need to strive to make it better every day in order to deliver best-in-class back office services. Another thing that is also that I will continue to do, that is the clear and constant principles for our capital allocation. Everything that we do need to be based on a business case, whether there's some internal projects, whether it's Brian Ejsing who need to do some property investments, whether we have to invest in new customers. We are companies, for that matter, then everything is based on a business case. So we make sure that we allocate our capital to the right projects. And then of course, we follow up that you can say the promised results are being delivered on those business cases that we provide. Then also strong support for the M&A and integration. It also goes without saying, we are -- when we do integrations, quite a bit of the synergies are actually related to the back office functions as well at the same time as we need to help the business. Yes. Then I promised Flemming, you'll have a lot of information today. So I think that you have most of the input to your spreadsheets. Maybe you missed a few of them. So I promised Flemming that I will flip through some of this, some household slides, you can say, that is put up here. We have our outlook for 2022, we adjusted it a little bit more than a month ago. That's not something that we normally do in this week but we already after Q1 changed our guidance, but we have seen a nice quarter. So we adjusted the guidance from DKK 18 billion to DKK 20 billion up to DKK 21 billion to DKK 33 billion for the year. And it's -- you can say the Q2 has started well as well. So that's -- we, of course, hope that it continues. This 2022 outlook now, it's based that we will see some kind of normalization in the second half of 2022, trending towards normalization. Carsten alluded a little bit to it earlier as well. The tax rate also strives to have that as 23%. And then the GIL impact is nearly DKK 2.6 billion in 2022. When fully integrated, I think we said last time, it will be a little bit more than DKK 3 billion on a yearly basis, and we are nearly done with that. We promised that we will deliver due to the final integrations in Q3. We awaited Jesper can close the shared service center, I think Jens also mentioned that earlier. Yes. Then reiterating our 2026 financial guidance. Now you sit and think a little bit about Carsten Trolle mentioned something about yields, something about productivity and so forth. Søren Schmidt mentioned something about the conversion ratio that can go up to a higher level than this. But notice here, it says above. So we hope that we are covered. A couple of comments to this slide. It's clear that we still expect that we will gain market shares. We still expect a GDP growth. People talk about recession right now. We still expect that there will be some growth. It's clear not to the same level that we have seen in the last couple of years. So that's what we see. I think what is important here as well that is we'll talk a lot about normalization and what yields do we have when you come out on the other side and so forth. With the math and the models that we have seen and the yields that Carsten mentioned for Air, respectively Sea, I think we do not -- we find it difficult to see that we will end below DKK 20 billion. That's how we -- when we try to model it, but you have your own spreadsheets.

That's an EBIT number.

Yes, EBIT. So you have your own model, so maybe you can put them in there as well. Our CapEx would be roughly 0.5%, 0.75% of the revenue. Net working capital, I will come back to that in a second. Right now, we aim to have at around 3% of our net revenue measured at year-end. So that's what we will aim for. And our gearing ratio is still below 2%. The capital allocation and structure. I don't expect that you'll find it as a big surprise that we will stick to that. We have done that for many years. Jens Bjørn also mentioned it in the beginning. We will repay debt if we are above our guided range, our NIBD compared to EBITDA. So if we are there, then we will invest in value-creating acquisitions. That is #2 on our capital allocation policy. And then three, that is the share buyback. Sometimes people ask, do you -- when you do share buybacks, do you consider the actual share price? And no, we can't go into these kind of considerations. So should we buy the share price when it's low and refrain from it when it's high? We don't go into these kind of speculations. We have our strong capital allocation policy. We adhere to that. And then when we do the share buybacks, they are initiated on, you could say, safe harbor method. So that is the one that we selected to the share buyback, they will actually handle that. What's important for us is that we have sufficient financial flexibility to meet the strategies and all the ambitions that the divisions have and IT as well, also some investments done in that. So that's clear that we need to have that. We also need to have a robust, you can say, funding of it. And then our gearing ratio needs to be below 2. We said that it's below 2, it's not 1.9. We aim at 1.75 in that area. Sometimes, we are also asked what if there is an acquisition coming up, will you then be able to be out of that range? What we normally -- the thoughts that we have internally and when we have the dialogue with our rating agencies, we say, yes, we can't get out of the grid for a short period of time, but we aim to come back relatively quickly. Then the dividend policy. We adjusted it a little bit in connection with the year-end annual report. So now we have aimed to have 10% to 15% of the net profit. Obviously, we saw that when our net profit increases and the dividend would be quite high with the old policy, so we try to balance it a little bit. So this is the new policy that we will aim for. Another thing that we -- that you can see on this slide, you can obviously see the share buyback that we have announced, which is the things that we have -- the recent one we have announced is approximately 2% of the share capital that we acquired back. So that should help to look -- Jens Bjørn to look good in his IPS slide. That's what we work for there. And what this also shows is that when we -- when we have or when we get acquisition opportunities, we are not afraid to use the, you can say, the share market to get some -- to get it funded. Again, here, it's important for me to say that when we do that, obviously, again, it's based on the business case. And when we go through these business cases, it's very important for us that we will be able to deliver return to you guys to the investors as well. That goes without saying for that one. Then debt structure ex leasing. We have 78% of our funding currently is with bonds, 22% is with the banks. The banks, I can see some of them are still here. So it is important for me to mention that the banks are still very important for us. 1/4 of the finance structure is relating on the banks, and we do need the banks to have the flexibility. But what we also learned in the last 2, 3 years is that the bond market has proven to be very well. So we have been able to issue some bonds through attractive pricing which means now that we have a nice duration on our bonds, and we pay less than 1% in interest on those. And we have a duration now of 8.9 years. So we are -- we do have a good funding, the way we see it ourselves, at least in place to meet whatever happens. We are committed to the credit ratings, we are being measured or rated from both Moody's and Standard & Poor's. And, yes, it says here, A3 and A-, that is the ratings that we had so far. They were just recently reconfirmed. So that's also a good thing. So from the debt structure and the financing, we are in a good place these days. Net working capital, I was tempted to pass it. But yes, we can go through it. Net working capital. It's a little bit higher than what we would like to have. It's -- you can see that -- you can see the graph there showing the increase. A part of it -- a big part of it is due to the M&A. It goes without saying that when we get more activity in, that's a big part of it. Another big part of it is the increasing rates. It's also impacting the net working capital. It's clear. The payment terms towards the carriers and airliners, they are very short, and they just -- you need to pay within 30 days. Otherwise, they will not lift -- ship the goods. So we do that. And then the customers, we have gotten bigger customers. They require longer payment terms. So that's the market that we need to operate in. We also got stronger Air & Sea. They have a little bit longer payment terms and the latest MENA region, they also have a little different culture. So -- but there are no warning signs. There are no red flags. We ensure big part of our portfolio for accounts receivables. They pay in due time. We don't have any significant overdues or something like that. So hopefully, when we turn a little bit back to normal, that will be better as well. Like I said before, we aim to have it around 3%. So you can see that there's still something that we need to work on. And we do work on that. Can we get invoice a little bit faster? Can we collect a little bit better? That is something that we work with. Right? Yes, that's good. And I'll follow up that you remember. Yes. Then let me also ask a little bit about the leases. We talk a lot about being asset-light. And we are. Sometimes when you look at the balance sheet after this implementation of IFRS 16, Brian also mentioned it, when you -- that you need to put more on the balance sheet. So it can, from the outside, look as, yes, you are not that asset-light because you do have this IFRS 16 assets and liabilities on your balance sheet. So you can't say okay that you are not that flexible. But we are still much more flexible than the pure asset owner. We can get out of the leases, that changes constantly. Most of the leases is related to the properties, to the buildings, to some of Brian's success as part of some of the buildings that we have there. We have around 7 years duration outstanding, you could say, on a mixed picture for the buildings. It's on average. Some are a little bit longer and some are a little bit shorter. And so that's what we're having. And then we have some numbers here. You could say that for the 2021, we depreciated DKK 3.1 billion. And it's a thing that we need to do. But if you look at it, this is what we depreciate, then we'll have some interest for DKK 0.5 billion. And that's more or less corresponds to the cash flow, the physical payment of the lease payment. It's nearly the same asset depreciation. And the interest rate obviously is the same that we pay. We have DKK 14 billion right-of-use assets and DKK 15 million in lease liabilities. So that was a little bit also to put into your spreadsheet. So you have that information. Then finally, now I started to visit this you guys, investors and analysts, and we got lots of lots of questions about what now for the next months. Now there's congestion in Ningbo and Shanghai. Now there's a war, now there's pandemic, now there's -- there are many things that are come our way. So right to say, try to look at it in a perspective if you look at it from the outside. If you go back 3 years, prior to pandemic, prior to everything, in spring of 2019, we signed with Panalpina, and we started to integrate them in August '18. -- sorry, '19, obviously. That -- and then we got started. We got traction on that. Then we went into the first wave of the pandemic early 2020. We sat out here, we did a lot of calculation on how we look, what will happen. We also kind of start an operational excellence program. Then we got that under our nails and then moved on. Then second wave came. We saw that they were now lifted. So the second wave come with the pandemic. Then congestion came up. Then we started the GIL integration. Now with the war in Ukraine. Now Shanghai have been shut down for a period of time, it's open up again. We saw that with [indiscernible] and Michael. So what happens now? Basically, we don't know exactly what will happen every day, every week. But what I can say, seen from my side, been here for 14 years, I think we have never been stronger as a company. We have never had more complete digital infrastructure. We have never had more global presence, both in terms of regional but also product-wise, divisional-wise. I think the division showed that as well. We have never been better organized. We have a flexible business model. We are good to do the integration. We have worked on the physical infrastructure, which also has been shown today. So seen from my side, and maybe you can say, yes, Michael, you're biased. But at least I can say from the last 15 years, I don't think that we have ever been in a better position than we are now to cope with what comes our way. So from my side, I think that we are ready to do that. You wanted to have a Q&A or...

I think we should give these guys just a chance.

So it's fantastic to be part of it.

Great, Michael. If you flip one and I'm sure there is a Q&A slide.

All right. So yes.

We'll start here with Dan.

Dan Togo, Carnegie. In case of a larger acquisition and the right target of 20% plus whatever, what is the time frame where we would like to see 20%? And would you be willing to stretch it if you can see the potential, let's say, in 4, 5, whatever 6 years? So how willing are you to compromise on that 20% return on invested capital target for -- in case of an acquisition, so to say, the business case? That's one question. Another question is, how far are you willing to take leverage? Will you be comfortable with the leverage, let's say, above 3x in case of a large acquisition?

I think for the leverage part, we can go above, but I don't think we will be well above 3x. It also depends obviously on the size of the -- and also how they want to structure. If you can say a potential target came up, it also kind of rely on how should it be structured in terms of equity and debt. Obviously, it's -- that has a saying in there. In terms of the ROIC, I think that's something that we will investigate when we see to it. We aim for the 20%, and that's what we go out with, that part of our strategy.

[indiscernible]

Yes, exactly, exactly. That's about it. You can say, if it really makes sense, then obviously, we'll be able to stretch it a little bit. It doesn't have to be. It's created within 1 year or 2 year, then it can be -- it really makes sense on a more long term, then I think we will look positive on that, but that depends on the specific cases. Because we need to be able to see that we can get there eventually.

If you look at the transactions we have made, they don't give 20% in a year or 2. You need to go out a bit further before you achieve that.

I think when you see, that's also a fun factor or fun part of it. We must have shown some of the graphs where you see that whenever we're doing that -- if this is the starting point, then we get an acquisition, then our profitability or some of the returns will decrease a little bit. And then afterwards, we will come out a little bit -- actually a little bit higher from when we went in. So from every acquisitions we have made, the profitability gets a little bit better from when we entered it. So we are able to work with it. We are able to create more value out of it than what it seems to when we do the business case. And you can say maybe it's a little bit too conservative business.

Lars?

Yes. Lars Heindorff from Nordea. A question from one of your comments where you mentioned that even in the case of a normalization of yields, you don't see EBITs being below DKK 20 billion, which I found very interesting. But if we assume the normalization that Carsten showed us earlier, 8,000 and 4,000, respectively, I assume that will sort of all else equal, imply that EBIT will drop well below the DKK 20 billion mark. So I assume that you have -- I mean, when you can say that comment, you're taking into account some kind of cost out, productivity gains or something else?

I think there are so many moving parts in that actually. So I think one of the things if and when we see a normalization, when we are out of the integration, then in more normal markets, we will assume that we will be able -- it will be easier for us to gain market shares. We will also be working -- I think Carsten mentioned it as well. It takes more time these days to do a shipment. So we will also be able to work more efficiently. So these things also need to be thought into that.

But it is also just in terms of a model, then we are maybe 2 years ahead, a couple of years with 4%, 5% growth in Air & Sea. So it's not if you just take the numbers on the volume today. It is...

2026.

Yes. Great. Yes. I think what Jens Bjørn says is that time is up, Michael. Thanks a lot. Yes.

Thank you, Michael, and thank you, everybody, for -- let me just check it out, yes, for staying awake so long. It's been a long day. Some of you even were here yesterday also at the dinner. Thanks to all the great employees, the fantastic team from DSV who presented today. If these guys and girls are not the best in the industry, I don't know what they are. And I'm proud of what you have done today, and I'm proud of what you do in the daily business, you simply rock. We are the best, and we have to continue being the best. We're humble about it. There's a big, big challenge ahead of us to tackle whatever the market throws at us. Michael, you said you don't think we have ever been stronger. But allow me to rephrase that, we have never been stronger. I know this. I have been here 34 years. So thank you also to you, Flemming, and the rest of the IR team. Now the day is almost over. Now you also need to get out in your gardens and have some fresh air. I'm not sitting in bank holidays, weekends, Sundays, evenings, nights doing PowerPoint presentations. I think this beats most that I've seen in my time, a couple of hundred PowerPoint presentations in a company that doesn't really believe in PowerPoints. We normally say from PowerPoint to P&L, it can sometimes be a long way to travel. So we'd rather focus on the P&L and not so much on the PowerPoint. I hope very, very much that we will see you guys again before 2029 because I cannot imagine what could have happened with our company in a 7-year time frame. Looking back, it has actually been a good exercise, spending some time preparing for this saying, has this really happened in 7 years, it's unbelievable. And to be honest, I don't think we would have dared to believe back then where we are now should we have guessed about what the developments of our company would have shown back in 2015 when we were with you the last time. I'm not going to hold a long speech because we are under severe time, not pressure, but instructions from the team. But what did I start with? If there's one message I want to leave you guys with, it is this, believe me, it is why we go to work every single day. I think it is actually also where we distinguish ourselves at least, as some said earlier today, we pay -- for antitrust reasons, we never meet our competitors. I met the CEO of Deutsche Post for the first time in my life last week. We've been CEO for, I don't know, 10 years. If I met the CEO of Kuehne-Nagel on the street, I could probably not recognize him. So we have no idea really what happens apart from we have probably less information about our competitors than what you have. But what we know is what happens inside our own company. We are a performance company. This is what drives us. We can, of course, not promise today that this will continue but we have a fairly good idea that the fundamentals of our industry, the fundamentals of our company has not changed. So with a bit of luck, this will, in some shape or form, continue in the future also. Now this part of the day concludes. Now you will go into the real world and see some real cargo being moved around, and I have understood that we have a small video for some of you visiting us online that they cannot participate. So we've just made a small video of what you're going to see, which will be one of the newest and most sophisticated logistics centers in Europe. And I hope you will really enjoy what you are seeing also. Brian Ejsing tells me that you should be really looking forward to it. And if there's something you don't like over there, you know who to contact, he sits down here on the front row. So let's see the video. [Presentation]

And with that small snapshot, I just want to thank you once again for coming also for you listening at home or wherever you are. We hope to see you around. If you, despite all the massive amounts of information you have received today, still have questions, you know how to find us. Please reach out to your local representative, Flemming Nielsen or the team, and I'm sure they'll be willing to answer all your questions. So with that said, thank you very much.