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

Welcome to the presentation of the DSV Annual Report for 2022. [Operator Instructions] This call is being recorded. Today, I'm pleased to present Group CEO, Jens Bjørn Andersen; Group COO, Jens Lund; and Group CFO, Michael Ebbe. Speakers, please begin.

Thank you very much, Jens Bjørn Andersen here. Thanks for joining us for the full year 2022 results from Hedehusene, Denmark. You've probably seen the presentation. It's online. After having clearly looked at the beautiful photo on the front page of a bridge in Tokyo, you can go to Page #2 and look and read the forward-looking statements. And then further on, go to Page #3 with the agenda for this morning. Those of you who have listened in before will probably recognize the agenda, and you can read it yourself. So with that said, I just wanted to remind you that when we get to the Q&A, we would kindly ask you to refrain from asking more than 2 questions each. To respect the time, we would like to get this done in about 1 hour. I'm sure you also have a very busy day. But Page #4 talks about the highlights of what we do -- deem as an exceptional and very, very strong year for DSV. By far, the highest and the best EBIT result this company has ever seen and far above the initial guidance we gave of between DKK 18 billion to DKK 20 billion of 2022 when the year started. So overall, on a day like today, we can be happy. We can be proud. We are still humble. But all the staff members of our company have done an absolutely fantastic and remarkable job. And we are both proud and very pleased about the performance. It's not often that we can show to an EPS growth of 60%. And also, please be reminded, I'm sure you are aware, that looking at the EPS for a longer period of time, we still have a very, very strong development. Also, being a more eventful year than probably ever before, amongst others, we have integrated GIL in a record-breaking pace in less than 12 months. It was not an insignificant chunk of business. And then on top of that, we have seen extreme market volatility. And the year was also categorized by a great degree of supply chain disruption. We always say that cash is king in DSV. So the fact that we had a very, very -- I'm sure Michael will spend some time because that's a really highlight of the year also, a very strong performance of the cash flow. And the fact that we've been able to distribute or allocate over DKK 21 billion to shareholders is really a great feeling, and Michael will elaborate on that. This morning, we have also released the earnings guidance or the EBIT guidance for this year. For '23, we estimate that result will come in between DKK 16 billion and DKK 18 billion. And that reflects that the market is normalizing and that we will get, at least at the beginning of the year, some macroeconomic headwind. As such, it's a little bit against the law of nature in DSV, where we normally always have a higher result than the previous year. But as such, we are actually pleased about the fact that we will see some sort of normalization in '23 and that we will get back to levels that we can recognize will be somewhat similar to what we saw in various degrees, I'd say, before COVID. So nothing wrong with this, the result, if we can achieve this between DKK 16 billion and DKK 18 billion is still internally considered as ambitious and very strong. Not to forget, we also announced this morning our new sustainability ambitions, too. And we have committed with the science-based target to a net-zero target by 2050. We're very happy and also proud to take part in this journey of decarbonizing our industry. So with that, we'll go to the divisions. Air & Sea. Again, very strong results. We have seen certainly a decline as we would have expected in Q4, driven both by a soft market, where volumes declined, but also, of course, yields going down. So more or less, as we had expected, nothing dramatic in the development in Q4. We had basically been aware that this was going to happen. And the fact that it happened was actually good because it sets the base for, as I said before, more normal situation going into 2023. A lot of you -- and we will not elaborate too much of this, but a lot of you have asked if we will sit on our hands and do nothing with the cost base. We get a little bit disappointed when you asked this question because if you know us well, you should know that this will not be the case. We will do what we can to adjust the cost base. And we have already, in Air & Sea and also or the 2 other divisions, taken steps to align the cost base with the lower volume. We need to ensure that the productivity of our divisions do not decline. We feel that the Air & Sea division is very, very strong. The network is -- it will never be complete, but it is strong. We have great competencies from a digital point of view, high service levels, great employees, good leaders in the operations. So we feel that the division is stronger than ever before. And we have now to go out and grow our volume and take market share in the coming months. But very, very strong performance and the fact that the division surpassed DKK 20 billion is, of course, absolutely remarkable compared to the EBIT result the year before. So flipping to the next page, just quickly on the products. First, air freight. Maybe we should start by looking at the markets for Q4. Of course, not an environment you want to be in for many, many quarters in a row. We have seen a decline in volumes of between 15% and 17%. Our own market development is approximately minus 16% so we are in line with the market. We have still moved 368,000 tonnes of air freight. So we have still been busy. And we have managed to have a fairly reasonable yield also of above DKK 11,000 per tonne. So there's no really peak season. And we have to see how the development will develop -- how the development will be for 2023. Inventory -- high inventories by our customers is there's, of course, one reason for the low decline or for the low development in volume. And of course, also the fact that air freight is the most expensive mode of transport has meant that it has had this weak development. Sea freight on Page #7, more or less the same story as air freight. I did forget to say we also have to remember that air freight is, in nature, more volatile than sea freight. So we will expect less volatility here on sea freight than what we have seen on air freight. Market's down approximately between 9% and 11%, and we have the same development also. So we have volume development more or less in line with the market, still a higher yield than we had a year ago of a little over 5,000. And then we have to see now -- we're very eager to see how the development will be when we get into February here after the reopening of China after the Chinese New Year. We do expect that the volumes will develop in a better way than what they have at the beginning of the year. But overall, we are happy and content with the situation. Then we go to road freight. A couple of things have happened. First, we would like to point your attention to the gross profit, it's more or less in line with what it was last year. So of course, you can look from that, that we have had a higher cost base. A couple of things have happened. We have tried to highlight that. We have to remember, we have exited Russia and Belarus and Kaliningrad. So some profit was in the numbers for '21, which we missed this year. And then we have been hit a little bit in one region, which is South Africa, where we've had certain issues that we've been dealing with, which has had a negative EBIT effect. And also, at the very end of the quarter, a little bit later than what we did see on Air & Sea. But also, at the very end of the quarter, we did see a little deterioration in volume, and we were impacted by that. Also, here, it was no surprise. Also, congratulations to the Road division of surpassing [ not 20 ] but DKK 2 billion in EBIT for the full year. This is also a great achievement and the growth year-on-year of 9.2%, something that everybody in the division can also be very proud about. Last slide before I hand over to Michael is Solutions. Some of you have asked about the development this morning. This was also expected. We are also here pretty happy with the gross profit where we've had an increase. We are very aware of the fact that we need to get the reporting right all the time. And even though it annoys investors and ourselves for that matter, we have done a little reclassification of some of the cost base, which makes a difference between GP and EBIT. And then also, at the end of the year, we did do a few accruals also on the cost base to make sure that we don't carry any risk, so to say, from '22 into '23. As such, that has happened throughout the company. Then the last thing I wanted to say is that when we look at the Q4 numbers for '21, it was the first full quarter of GIL, and it was probably a little bit too good. There were also other allocation mechanisms in GIL than what we have in DSV, so that has also been one of the reasons. But you shouldn't be too concerned. We are full of optimism, and we still believe that Solutions will continue to produce good and strong results. And also here, growing earnings from DKK 1.7 billion to DKK 2.7 billion for the full year is absolutely fantastic and also job really well done for everybody working in the Solutions division. And with that said, I will hand over to you, Michael, so please take it from Page #10.

Thank you very much, Jens Bjørn. And yes, I will go to Page #10, with the -- some KPIs from our profit and loss 2022. I think what Jens Bjørn has already explained the development in EBIT, so I'll just touch upon some few other KPIs here. Clearly, the revenue is -- especially in the fourth quarter, is impacted by the lower freight rates and also the declining volume, as Jens Bjørn has already mentioned. So clearly, the gross profit has been less volatile than the revenue, also as expected. Another thing that we have seen, especially here in the second half of 2022, is obviously the currency impact, and that has also had an impact of our cost base. Most likely, some of you will say, "How will that develop in the guidance?" And what we can say here is that, as always, we're an asset light. So we are investigating different opportunities to protect the conversion ratio. I would also say that we aim to have the same cost base in 2023 as we had in 2022. So that's about it for the cost base. Then I would say, like always, we do have some foreign exchange adjustments. It's still related to our intergroup loans, so no cash impact there. Then our tax rate is 24% for the full year, a little bit as expected. And when we come to the guidance, we also expected that will be this tax rate going forward as well. Last KPI on this page, Jens Bjørn already touched upon that, is the earnings per share. It was a growth of 60%, clearly driven by strong earnings growth. And we expect that it will normalize in 2023. Then we skip to the next, Page 11, with the cash flow. We believe, ourselves, it's a strong cash flow that you can see here. All earnings reported are converted into cash. And adjusted free cash flow are then allocated back to the shareholders that you will see in the next page. The growth in the cash flow is obviously driven by the earnings, but also our net working capital that we have worked with throughout the year. So it's good to see that, that has been reduced. Clearly, there's also an impact on the lower rates and the lower activity level, but we have also done a lot of initiatives in order to work with that after we have implemented the deal. The development of the net working capital in the same line is offset by higher tax payments due to the higher results, obviously. Our gearing ratio is 1, exactly 1.0. That will also -- if you look at 2023, when our guidance -- taking into consideration the EBITDA will obviously decline, meaning that, that will have an impact on the gearing ratio as well. We do, obviously, still have a target of staying below 2x EBITDA. So that is, of course, what we want to work with. Our capital structure and balance sheet are in good shape. I think we have nearly DKK 10 billion in cash and average duration of our corporate bonds is 8.3 years. And the first corporate bond that we have to repay or refinance is in 2024. So we have a good balance sheet here. Our return on invested capital are also satisfactory, 25%, so also impacted by the growth in earnings. The next, Page #12. As mentioned, we have allocated all the cash -- all the earnings that we have converted into cash, we have then allocated back to the shareholder. So we have nearly 19 million shares we have bought back in 2022, giving an allocation to the shareholders of DKK 21.6 billion , in this table that Flemming has provided you with. I think for the dividend part, we would -- we have suggested to increase the dividend from DKK 5.5 per share last year to DKK 6.5 for this year. We have also, like we normally do at every quarter, assessed our cash flow for the current period assessment. And we have initiated a new share buyback of DKK 2.5 billion starting today and run until we publish the first quarter results in April. So that's the allocation part. Then I go to the next page, Page #13. The outlook for 2023, I think you've already read that this outlook is significantly lower than our results this year. It's clear when we talk about outlook, it's more uncertain market and macroeconomic outlook that what we have been used to. That's obviously reflected in our guidance here, which is between DKK 16 billion to DKK 18 billion. That is how we see it currently. We do expect the first half of 2023 to be negatively impacted, and then we assume a normalization or improvement in the second half of 2023. It is clear the Air & Sea division is the one that has gained the most market conditions. So they will most likely also be the one with highest decline. Our tax rate is expected to be 24%. It's a little bit higher than what we have seen, but that's due to the nature of our earnings and the way that, that is structured these days. It's still our target, obviously, to take market shares in all areas. So that is also what we will work with. And I think that's about it for the outlook. Then we've also -- the last slide from my side, Slide 14. It's just to remind you that we adjusted our long-term financial targets last year, exactly a year ago, and we maintain the current long-term targets. It has been an unusual year this year and now we're looking to a normalization, but that doesn't change our ambitions for the more long-term 2026. And I think that's it from my side. So we can go to the Q&A. I would assume there are lots of questions.

[Operator Instructions] The first question will be from the line of Alex Irving from Bernstein.

Two questions from me, please. First, on volumes into the medium term. Do you think in 2023 that we're undershooting what would be a normal level of volumes and, therefore, there's some subsequent catch-up to come? Or the [ future ] years probably look like pretty normal growth rates of a 2023 baseline. And if there is no catch-up to come, the destocking that we're seeing now, why might that be? Second question is on GP yields. So your outlook for the year suggests your GP is down between 20% and 25%, which would be about 15% higher than the targets at the Capital Markets Day from last year. Should we be thinking about more medium-term upside to the DKK 8,000, DKK 4,000 levels that we talked about at the CMD, please?

I can talk a little bit about this. Good questions. When you talk about that reduction of between 20% and 25%, as we have guided, you have to take into account that this is the average for the full year. So you can make your own calculations as when you expect this to kick in. So we still believe that what we have indicated before is correct. And I think, with this number, you can also make calculations getting to that point. But we've also said that we are slowly moving a little bit away from giving the hard kind of numbers on yields because we have also come to realize that it is very difficult for us to anticipate exactly how the yields will develop going forward. We have said on the volume side that we -- it's the biggest misalignment we have ever seen from growth in the GDP of the world, which is estimated to be 2%, maybe 3% this year, and we guide that volumes will drop 2% to 5%, of course, driven by high inventories. So let's see how it goes. Of course, we'd prefer 2% rather than 5%, but this is the best estimate we have right now. And we think, also, we've seen that already, with the continuation of the weak markets from December going into January. We do expect that it's not going to be super strong in the first quarter, but then we hope to see an improvement subsequently in the quarters to come.

The next question will be from the line of Stig Frederiksen from ABG.

A question back to the capital structure because calculating backwards on what you've announced of share buyback at DKK 2.5 billion that would go into April and then comparing back to that you were guiding DKK 16 billion to DKK 18 billion on EBIT and DKK 5 billion on depreciation [ but ] an EBITDA of DKK 21 billion to DKK 23 billion. What should we think about returning cash? Do you want to deleverage? I am aware that you are multiples or ratio would go up to 1.3%, 1.4% based on the guidance you've given today. But are you seeking to keep it around onetime? Or should we expect maybe more cash returns relatively in the second half? That's my question.

Michael speaking. Steve, we have not changed in our ambitions or our guidance for the ratios. What you need to take in mind here is that when we look at the first quarter, we always have a little bit lower cash flow for the first quarter. So that's reflected in this one. And then when you talk about our earnings, we also have to pay some taxes, and we also have some interests that we need to pay. So I think that that's what we will keep for the time being, but we don't have an aim to deleverage the company. We still have an aim of being below 2x.

Let me just make it very clear. We have the ambition to return all the proceeds of the earnings of the company that we convert to cash to shareholders 100%, if possible. It has been a true pleasure doing buybacks in 2022. The fact that we could purchase about 9% of our own company and eliminate those shares was absolutely a fantastic feeling.

The next question will be from the line of Ulrik Bak from SEB.

First question on this cost cutting procedure that you alluded to. Can you please just confirm that you expect your fixed cost level to be flat? And is there any variability depending on whether we will see volumes decline 2% or 5%? That will be my first question. And then second question on the yield. Can you perhaps just shed some light on the composition of this yield structure? How much is purely related to the level of the rate? And how much is more fixed pricing, customs and other kinds of services?

Yes. It's Jens Lund here. Hello, everybody. When we look at the cost cutting, I actually don't like the phrase cutting. It's basically that we adjust the capacity to the volumes that we produce. And then as an example, if you sit in a department and you produce [ index 100 ] of your 10 people, if we are down on volumes, so we produce [ index 90 ], we need to be 9 people. Then what happens -- as a general rule of thumb, what happens is then the people, they're very focused as your bosses on what is going on, on a daily, weekly, monthly basis, quarterly basis on the productivity measures so that we have the right conversion ratio. We've been having this focus. I've only been here for a little bit more than 20 years, but it's been the same ever after. And this adjustment already started in Q4 last year, and it's continuing into this year. And then depending on, as you say, it's a 2% down for the year or 5% down, these mathematics will apply, and we will, of course, govern it from the top. Accountability is basically our middle name, and we're very accountable when it comes to this. So you can rest assured that we will protect the conversion ratio. When it comes to the yields, is it rates or is it basically our fees? I think it's basically mostly related to the yields or to the rates because, of course, now capacity is not, what can I say, is as tight a resource as it used to be. So we won't be able to, what can I say, to make the same trading gains that we've done previously. Our fees, let's say, to do a customs declaration or the sell an insurance or whatever, they are very stable in their nature. It might be that it will be a little bit harder just short term to increase them. But normally, what can I say, if the cost base go up on the production cost of these, then basically, the fees, they also have to increase. Otherwise, we have to deliver higher productivity via digitalization in order to protect, what can I say, the conversion that we have on them. So I hope that answers that question as well.

The next question will be from the line of Alexia Dogani from Barclays.

It's Alexia here from Barclays. Just 2 for me as well then. So just following up from Jens Lund's comments just now on the conversion ratio. Obviously, you've said that in the first half, volumes will be weaker than in the second half. But given your prior comments on the GP yields, most probably, the GP yield will be weaker in the second half than the first half, given kind of potentially an exit rate closer to your medium-term target. How quickly are you able to adjust, I guess, your cost base to reflect the GP yield reductions? Because I assume, with kind of service intensity coming up, maybe volumes are improving a bit, but not to the extent to offset the GP yield decline. Are you kind of mindful to that dynamic as well? And should we expect further year conversion ratio to be kind of bottom at 50%? And should the quarters be broadly similar? Sorry, that's quite a long first question. And then, secondly, just on the shipping industry. Obviously, we are going into likely a very challenging backdrop for them given they don't have the similar ability to adjusted cost base. As a large customer, how do you feel potentially the risks that they go into losses -- the industry goes into losses next year? And how does that matter to you? Is it a positive or negative or neutral?

Let me just take the last one first. We have basically no interest in the profitability of the shipping lines, and this is not meant in a kind of disrespectful manner. As long as they have the funds, and I'm sure they have that from 2022, so continue to invest and produce services that we and the shippers need, then we are happy about this. And we will not go into speculations if they will go into losses or whatever. You probably have a much better views on that than what we have. What we have said though is that you're right, market dynamics have changed. And we are of the opinion that we need to stay loyal to the shipping lines that supported us during 2022, where access to capacity was difficult. So the ones that helped us back then, we will help now, and I think this is also only reasonable. And I don't know, Jens, if you would continue a little bit on the conversion ratio?

I think you can already see it in the Q1 numbers that we've already -- I will be able to see it in the Q1 numbers that we've already taken out costs. And this is something that is very dynamic. It happens on a daily basis. The vast majority of, what can I say, adjustments will be made by just normal turnover, staff turnover, that you have in the departments. And there will probably be a lag of 2, 3 months because you have to be certain when you reduce the capacity. But I think that will be the lag impact that you will see. So we should be fairly quick on that. So it may lead to that we have a little bit lower conversion the first part of the year than we will have in the second half. But to put percentages on it is very difficult, but I think that's how the numbers should basically pan out at the end of the day.

The next question will be from Muneeba Kayani from Bank of America.

So with Agility now integrated, where are you on MA plans? And if you could generally talk about the M&A environment in the forwarding market? And then second question on yields. Could you give an indication of what was the exit rate for Air & Sea yields in the fourth quarter? And just a clarification. So did you just say that the second half yields will continue to decline while volumes could improve?

I'll talk a little bit about M&A. We are ready to do M&A. We've concluded the deal integration in a world record time I'm very, very happy with the way that the organization has embraced yields the way we have done it, all the support functions, finance, IT, I don't want to mention anybody else because I will leave someone out, have done a remarkable job. It's a sizable company. We have acquired as many, many -- tens of thousands of employees. We have put on to our platform. It tells us that we have a scalable situation, which we are very happy about. So from principal point of view, we are ready. We have been for some time. What we need now is to kind of get some sort of alignment between sellers and buyers. It has been a little bit difficult. It's no surprise in '22, where results were very high also. We were always of the opinion that this was temporarily. Now we will see that. It's at least reflected in our own guidance. If you get 1 or 2 quarters under your belt, you will also see it in the actual reported numbers. And then we have the expectation that there will be an alignment between 2 parties. So there can be some sort of consensus around the table and deals can be done. So we go into '23 full of optimism also on the M&A side. Will we be successful? We cannot promise that. We don't know. There would be different opportunities that we will pursue. But what we can say is that the, I don't know, 25-year-old strategy that we have had in DSV, but we want to grow through acquisitions where it makes sense. That is 100% intact. We think that we can demonstrate that we have generated value for all stakeholders, not the least shareholders, through M&A. So yes, basically, why stop that now? And maybe, Jens, I don't know if you want to go in further into the yields.

The yields -- I think that the yields -- I think I can explain that a little bit. We will not go into specific numbers on what was specific day. We will refrain from that. But of course, I think in Jens Bjørn's comment was basically, as you know, we will probably see a little bit higher yields in the beginning of the year, as you alluded to, and then perhaps better volumes in the second half, but also a little bit lower yields. So that's basically a confirmation from our side.

The next question will be from the line of Michael Rasmussen from Danske Bank.

So first, I would like you to talk just a little bit about the journey ahead of us in terms of the Road Way Forward. And also, if you can tell us if any costs have been or will be incurred from the change of just the new transport mode management system. So that's my first question. Secondly, I want to continue a little bit on the sub-suppliers on the ocean side here. So as we're entering 2023, is there anything that you are doing different versus a normal year? I mean, obviously, you're probably doing things very different from the past 2 years when just getting space has been so difficult. But just from a contract view, are you thinking about being more short in the market than normal? Or are you using maybe the lower rates to maybe add a little bit of contract? Or any flavor that you can -- that you would add on that, please?

We will also, for competitive reasons, not go too much into how we contract with our carriers. But I guess we can say a couple of things, Michael, and it's a good question. One is that we are probably slightly shorter than what we have been. We've been tempted many times to go long, but history tells us that it's a short, sweet ride, and then it turns out to be -- can be disastrous in the future. So we are a little bit shorter than what we have been. And then maybe a point, which is also important to emphasize and to mention for all of you. We do not carry anything into '23 from '22 when it comes to agreements with carriers, which are not kind of mark-to-market. So this is something which is very good to be able to establish that we do not have a lot of agreements, which are priced in the previous market environment. That carries into '23 or '24 for that matter. It's all been kind of aligned. So we start the year, in a way, where we are kind of being priced according to market conditions. And then Jens, as you are a little baby, of course, before us, or all of us are baby but you have a special interest so maybe you want to...

The thing is, what happened during last year was, of course, there's two angles in particular, the Road Way Forward project. One is this European groupage network from a physical point of view, how we develop moving the cargo, that's progressing according to plan. And we've basically, more or less, all the lines up and running. And it's basically price from zone to post code to post code and lead time and how that works. That's all set up and structured. Then on the IT side, we need to automate more of these processes now that we have this fixed structure. And here, we have not made the progress that we had expected because we did not get any deliverables from our IT vendor at all in '22. We've gotten them now, the '22 deliverables, and they already deployed into production, and we need to release this more. Once we have these 2 releases in place, called 23.1 and 23.2, that's a very good way they invent how they do the releases where we can follow on. And when we have them, then we don't need more development. And then it's basically a rollout game. But it slowed us down. This was a year on the projects. And when you have these projects, it's very important that you don't accumulate this cost in the balance sheet, but you're expense it as you go along. It's probably also hurt the cost base a little bit on road during the year, but that's how it is. We can't capitalize costs and then have some big problems sitting in the balance sheet. So that's a little bit on the Road Way Forward, and we're still equally optimistic about, in particular, the traction we have on the commercial side. Here on some of the lanes where we've established this, what can I say, higher-quality service and product and better visibility that we have 200% to 300% on the volume. Of course, it's not all the lanes, but it's definitely good news and carries over to all the other lanes. So I think we have a plan that we want to grow faster than the market. We have to remember that it's only a certain proportion of the Road businesses. It's probably between -- around a little bit less than 15% of the volume in Road, that is, this kind of groupage. So it also has to grow fast, if it really has to have a meaning. But I'm quite comfortable that we will continue this because it definitely is very welcomed by our customers. And this is what matters at the end of the day. And then whether we will be able to get the conversion of that, that depends on the infrastructure that we have available to support the production. And as I said, we will also make that happen. It just takes a little bit longer. So we also have to say that not all things work out just exactly as they should, but we're making progress.

The next question will be from the line of Lars Heindorff from Nordea.

A couple of questions regarding Road and Solutions and also a little bit about the guidance. Now in Q4, you experienced actually a decline in Solutions and the revenue and that actually comes past, I think, 2 or 3 quarters where you have plus 10% organic growth. So maybe a few words on the development there in Q4, which appears to be sort of declining a little bit faster than, you said, you had expected. And then on the same line, you expect roughly flattish markets for Road and Solutions into '23, maybe a few words on that. Is that -- what will that mean in terms of volumes? I know you don't disclose shipments, but maybe you could say a little bit about the price development in both Road and Solutions and how that will impact the time line?

I think if we take Solutions first and development in the revenue it's clear that as the economy has slowed a little bit down, we have seen which actually produces more less the same number of order lines, but the mix has changed quite a bit when it comes to that, Lars. So let's say that you had a certain number of activities per order, that has definitely come down. So we still ship with a higher frequency. There's a lot to do, but we make a little bit less money. I think on the utilization in the warehouses, it's a little bit down compared to what we saw in the previous quarters as well. So we also get a little bit less storage income. I think these things will be true -- we probably also have some regional differences where we had an exceptionally good start in the Middle East last year. That also helped us quite a bit. That's been -- it's been okay, but it's been a little bit slower this year as well. Then we talked about the -- or you asked about how do we see volumes into the next year? And it's clear that there will probably also be an impact for Road and Solutions, but not as dramatic as you will see it for the Ocean side. So we do expect that it will be a couple of quarters here, where activity will be a little bit lower. Then hopefully, it should get a little bit better as we progress during the year. Actually, some of the indications that we have on Solutions have us by an icing a couple of times, what are we doing? How is the activity? And he is actually fairly confident. Now he's a confident guy, if you understand what I'm saying. But he's fairly confident when it comes to that. And I also think that the Road team, even though it's a little bit less busy and perhaps easier to get capacity, they're still also confident. So this kind of flat -- a little bit positive development. This is probably what we're looking into. And we will then adjust the capacity we have available accordingly so that we continue to show some strong financial numbers.

Yes. And just a follow up, but you have announced a few price increases in -- relatively towards the end of 2022, will that carry into '23?

Yes. We try to hold on to the price increase because some of the large customers, of course, they push back. And I don't think that we will get a dramatic extra income. I think we've also increased the yields. And now perhaps the push will be towards the suppliers as well as if the capacity situation allows us, but we are not 100% certain where that will land out yet with the suppliers. So we will have to see.