Kuehne + Nagel International AG (KNIN) Earnings Call Transcript & Summary

Good morning, everybody. Good morning, and welcome to our full year 2022 results analyst call. It's a little bit more condensed this morning because we are moving an hour or so in our Capital Markets Day, where we will share more information. We will focus now pretty much on the year 2022. I'm here in London together with my CFO colleague, Markus Blanka-Graff, and we are happy to present our results in advance of the CMD which will be started at 10:15 local time. Before we begin, we would like to highlight three topics. First of all, as you have seen from the release this morning, we have achieved a record high result in 2022, the highest ever. We have the flexibility and resilience to adjust quickly while maintaining the strengths of our core business. And thirdly, our focus remains on yield management and customer experience. I talked about that during the Q3 call already. Full year highlights. The results for the full year 2022 reflect strong organic top line growth with significant more of that growth converted to EBIT than in the previous year. While momentum decelerated in the final quarter of the year, the EBIT result of CHF 644 million in Q4 would have been the strongest quarter ever, if not of the phenomenal Q4 2021. Based on this exceptional result and record free cash flow generation, the Board of Directors proposed a dividend of CHF 14 per share, an increase of 40% on the prior year. The strengths of the full year 2022 result points to our resilience and ability to continue to provide an exceptional customer experience, you will hear more about the customer experience and employee experience during the Capital Markets Day in volatile markets. We remain in a strong position to manage through future market dynamics, leveraging our long-standing experience and technology capabilities. That is as well something which we will share more in the hours to come. To reiterate a point I made on Q3 call, yield management, so profitability yield management and will continue to be a top priority for us moving forward. Looking into Sea Logistics, business units, Sea Logistics. You see the figures here. development of the volume on the left-hand side, GP per TEU, so our yield and then EBIT per TEU bottom line results. Our flexible business model delivered reliably for Sea Logistics customer in 2022. While yield normalized over the course of the year, reaching the lowest point in Q4, the final quarter average yield was still 1.9x that of the 2019 average with unit EBIT at 3x that of 2019. So still significantly above the pre-pandemic phase. This reflects a conversion rate of 46% compared to 58% for the full year. Remember, 2019 was at 30% conversion in sea. Our focus remains on yield management, unit cost reduction and market share optimization. In the full year 2022, we assess that our overall market share was stable in a market that declined by approximately 6%. In Q4 alone, our reported volumes point to a decline of 8 or 7 excluding the effect of existing -- exiting Russia. Overall, we have reported minus 5 or minus 6 organic, excluding net FX in Russia for the full year. Air Logistics next. Again, on the left-hand side, development of the volumes in tonnes. GP per 100 kilo and EBIT bottom line profitability in Swiss francs. The strengths and flexibility of our business model is equally visible in Air Logistics results for last year 2022. A key distinction, however, is the relative resilience of yields over the period with a somewhat more modest pace of decline into year-end. However, the last 3 weeks of the year 2022 were particular weak in demand. This speaks to a closer matching of capacity to the demand environment relative to what we have seen in sea freight market 2022. Unit EBIT Q4 remains at 2.3x the average of 2019 and reflects a conversion rate of 40%, full year, 48% for 2022. We are focusing on cost optimization and market share expansion. In the full year 2022, we assessed that on an organic basis, our overall market share was stable to slightly greater, given a market that declined by approximately 9 percentage points. In Q4 alone, so same as for sea freight, our reported volumes point to a decline of 16 or 15 excluding the effect of exiting the Russia. Overall, full year figures, we reported plus 1 or minus 8 organic, excluding Apex and Russia. Next is Road Logistics. Road Logistics delivered a record result over the course of 2022. Remember in 2017, so a couple of years ago, we had CHF 450 million profitability and now we have 3x the profit of a couple of years ago. This is a credit to effective management. Again, yield management is key. We started that journey years ago, and high-end utilization of networks across all geographic areas. The U.S. business, in particular, showed strong momentum in 2022. While the war in Ukraine and regulatory measures placed upward pressure on cost, we at Kuehne+Nagel successfully pass these on to our customers. The focus in Road Logistics continue to be in the following areas. First, scaling and leveraging the U.S. platform for existing Air & Sea customers. I mentioned that already in the Q3 call. Global expansion of our customed standalone business. You have recently seen a press announcement on that. And maintaining high-end network density in particular in Europe. In Q4 alone, EBIT of CHF 26 million reflected a conversion rate of 8% versus a full year achievement of 11% conversion rate. Contract Logistics delivered a very solid growth in 2022 and expanded market share based on our assessment of market growth. In the Contract Logistics result, you have to note that 5% negative FX effect is included. EBIT for the year ended up to CHF 187 million, 1-8-7, and the conversion rate of 6% represents a record high result. We never had that result in Contract Logistics before. CHF 48 million was generated in Q4 alone. These are the product continuous systematic efforts to improve margins through portfolio optimization, along with nearly full utilization of warehouse capacity around the globe, which extended into the year-end, and we will remain focused on growth and profitability in terms of the way ahead. With this, I would like to hand over to Markus to give us a little bit more insights on the financial KPIs.

Thank you, Stefan, and good morning, everyone. I think it's a great pleasure to have you here, physically, most of you, I know quite well over the years. So it's nice to see you again in a setting like that. So 2022, a year with operational challenges, for sure, started at the back end of '21. You may remember, still with capacity shortage, something that has turned during the year very quickly into even capacity oversupply as we speak right now. And I think what we can take away from the year 2022 and specifically from the fourth quarter is the speed how market conditions can change, I think, is news to everybody. When we think back over the last 10, 15, 20 years, how shipping industry, how capacity has developed, I think nobody has ever expected that within weeks rather than months, there is a shift from overcapacity or from shortage of capacity into overcapacity. I'm slightly oversimplifying it, but I think the message is speed of change is unseen or was unseen before. Having said that, right now, the fourth quarter was the weakest quarter in the year. You can see it here the earnings before interest -- the earnings before tax EBT, stands at CHF 657 million, CHF 657 million, which is CHF 450 million below the 2021 fourth quarter. But to put that into perspective, CHF 650 million, that was a full annual result 2012. And it was the second lower -- the second highest fourth quarter ever in history. So that shows a little bit how extraordinary the situation has been in the year '21 and '22, yes? Still, and I think that is what everybody's interest today did that situation with Stefan also mentioned over the last couple of weeks in the fourth quarter of very weak volume demand, did that continue into January and February and without giving away too much on current trading, of course, but one can safely say, yes, it did continue that way. And I think everybody can read that through different public sources as well. So having said that, the first 3 quarters then, Q1 until Q3, you have all seen the numbers, each of them returned more than CHF 1 billion on earnings before tax. So altogether, we are now at CHF 3.8 billion, which, of course, is an absolute record result. Coming back to the slowing down of the economic momentum that carries forward into '23, working capital management for me. I mean you know me, working capital is one of my most important focus areas because it's easy to go wrong there. It's very easy. It's something that goes with volumes. We have more than 0.5 million customers out there at any point in time with 0.5 million counterparty risk for CHF 0.5 million credit limits, every customer has individual credit limit. So it goes easily wrong the moment you start, let's say, getting loose on the tight management of this. Especially with the rates coming down very quickly, you can see the working capital has contracted from CHF 1.8 billion to CHF 1 billion at the back end of 2022. So altogether, the good news, if you like, is CHF 800 million or CHF 770 million of working capital has transformed into cash. The second good news is we have not slipped on the DSOs. So the DSO level around 50 is something that you're well used to. The ones that are following for a longer time period, it used to be 42, 43, 44, but that has already changed a couple of years ago into the high 40s and low 50s. You can see the change really happens on the DPOs. And as I'm conscious that we do treat our suppliers extremely fairly, we are keen on partnership with suppliers, so the DPO development is mainly due to the reduction in airfreight charters because charters, as you may know from the industry is basically a prepaid business also for us. So the extension of the DPOs is, to a large extent, attributable to the lower number of charters. All of that quite logically good profitability, good working capital management has led to a very good free cash flow. I think with a free cash flow generation of CHF 3.8 billion. That equally is a record over the years. But more importantly, I'm always watching the trajectory of the free cash flow generation because it gives me quite reliable information around the sanity, if you like, in the homogeneity of the business, how it's being executed. And it gives us confidence, not to forget, for our future and how we manage our ambitions, '26 and Division 2030, which you will see in the Capital Markets Day, that is going to start in a couple of minutes because we believe Stefan, myself and certainly, the entire Boards that you only can start a journey when you have a good starting point. So solid balance sheet, good cash flow management, I think it's something that is a prerequisite to start an ambition. Hence, the decision has been made to make the dividend proposal at the Annual General Meeting in May at a value of CHF 14 per share. That compares to CHF 10 that we have paid out last year. So in May, in the AGM, the proposal for the financial year 2022 to be paid, I think, in the second week of May, that would then be to all shareholders in the extent of CHF 14 per share. That represents -- and some of you are quite familiar with the Swiss financial environment. I think, that represents a dividend yield of 5.8%, which I think from a Swiss perspective and maybe also from an international perspective but they're not so accustomed to. So from a Swiss perspective, I think 5.8% is a quite remarkable dividend yield. Following our unwritten, but historically proven dividend policy, we are still staying within the framework that we have given somewhere between 55% and 65% here. Specifically this year, that is 63%. And as such, I think we are well in the -- or maybe slightly above the expectations that had been put out in the market. With that brief summary for the 2022 year, I would hand back to Stefan.

Thank you, Markus. Some of you might remember, we have met the last time here in this round at the Capital Markets Day, September 2017 under the leadership of that time of my predecessor Detlef Trefzger, where we have launched or where we launched at that time, kind plus NextGen, the strategy came to an end of 2022. We had at that time three goals, strong organic growth with a clear focus on new sectors, and I'll come to that in a second, harvest due to digitalization and automation. And we said clearly at that time that we are going for bold acquisitions, mainly in Asia. And in addition to that, from a finance perspective, we have given the outlook, our ambition 16% conversion rate to be achieved within the 4 years after 2017. So we have met and delivered on all promises. We made the largest acquisition ever in the history of Kuehne+Nagel, very successful Apex. #7 on the marketplace when it comes to air freight volume. We are now clearly the #1 on the Transpac. China, Asia to the U.S. marketplace. We started our journey on the automation, mainly in airfreight. You will hear more about that in the next couple of minutes and hours to come today. And we have overachieved, of course, our conversion rate target of 16%. One can say the pandemic basically was the key driver. We are pretty -- or absolutely convinced not only pretty, we are absolutely convinced that we would have achieved that as well without the pandemic due to the measures we have taken at that time. So customer technology and people was the key message leading the transformation in September 2017. We have started the journey. We have delivered as promised, and you can be absolutely ensured whatever we are going to tell you today, this will be our key theme. We will deliver as promised as well for the next couple of years and decades to come. Thank you very much for listening to this very condensed full year 2022 analyst conference call. And in a couple of minutes, coffee and breakfast is served outside. We will come back to this room and then we kick off the Capital Markets Day 2023.

Thank you.

So just to be very clear we'll kick off at 10:15 and give you some time grab some coffee Stefan mentioned and we can also discussed questions you might have. Thank you. [Break]

Are we ready to start? Good to go. Then again, good morning, and welcome to our Capital Markets Day 2023. Before we start, may I introduce to the team who is going to guide you into the new kind vision and Roadmap 2026. I'll start with Andrea Debbané, Head of Sustainability. She will give us an insight on ESG. Here on my right, Gianfranco Sgro, Contract Logistics and Integrated Logistics; IHansjoerg Rodi, Road Logistics and Customs; Yngve Ruud, airfreight, Otto Schacht, sea freight and then you have Markus Blanka-Graff, our CFO. So I wish you very exciting moments in the next couple of hours. Stay tuned. We will share a lot of interesting stuff with you, and then we open the Q&A after every single presentation, a combination of Markus and myself afterwards. So you have enough time to raise your questions after each individual section. Thank you very much. and see you later. [Presentation]

Hopefully, you are so excited that we are. And I will now guide you the next 25 minutes [through] the storyline. What is our aim for the next couple of years, Kind Vision 2030 and Roadmap 2026. You have heard that word, trust, a very important word, 5 letters. You have to earn trust. It's not a onetime wonder. You have to earn trust with your customers, employees every day, every week, every month and every year. So you will hear me speaking about trust as a red threat to this presentation again and again. My colleagues will pick it up in their individual speeches, but this is a clear theme for us building trust, with different stakeholders, building even more trust with you from a Kuehne+Nagel standpoint of view. These are the key takeaways for the next couple of hours. Most trusted by customers and employees and I will give you the reasons and the details. Focus on yield management and product mix, maintaining growth path. What does it mean? It does not mean that we will give up our growth agenda. We will still focus on growth. A company who is not growing anymore has no future. So pretty clear growth will maintain our DNA. However, more than in the past, and I said it a couple of times already, we will focus on the right product mix, and we focus on the right yield. So yield is absolutely key for us in our strategy moving forward. We have an experienced team, some of them you have seen already. I will introduce you later to the entire management team. And we will commit ourselves to certain KPIs, which you will measure and be able to measure us on a regular basis. And we will disclose the KPIs, which we have in mind. This morning, 6:45, we have released and we talked about it very briefly today the full year 2022 figure. And within the documentation, we have committed ourselves to 1 particular goal, the financial ambition, which is the conversion rate, 25% to 30% conversion rate on group level by 2026. Remember, and I said that this morning, when we met the last time here in London, we committed ourselves to 16%, which we overachieved. Now looking into the more normalized situation, 25% to 30% as our commitment from a group perspective moving forward. Our goal is aiming higher. And what does it mean aiming higher? Most trusted by customer employees. I said it already. Trust will help us to increase customer retention and which will support our growth. And I come to that in a couple of minutes again. We will create world-class service and unique insights from our data perspective. This will help us to have a sustainable growth, the CX, the customer retention topic and the EX, the employee, the employee experience, the CX, the customer experience and the EX, the employee experience is absolutely core for us moving forward, and I will share our view on that topic moving forward a little bit more. Yield and product mix, I said it already, will enhance profitability, paired with automation eTouch and an optimization of our model, which will then lead to the new conversion rate ambition of 25% to 30%. Starting position, looking a little bit backwards. So all of us have experienced the last 2.5 years, a different environment, a different world. Zoom fatigue, Teams, everybody was working from home, sitting behind the screen we had to basically in autumn. And with spring 2020, we had to ensure that all of our people, all of our white-collar people around the globe had access to our systems. We did it seamlessly, and we executed the order to cash process in a very, I think, professional way towards our customers. We acquired Apex, the largest acquisition I mentioned it this morning during this time, #7 in terms of the volume is concerned on airfreight. Now we have created the largest airfreight service provider in the 3PL market, on globe, thanks to Yngve and the team. He, by the way, mentioned that when he came onto the Kuehne+Nagel International Management Board, one of his first statements he made and we had a little bit of a laugh, I will become the #1. He promised internally and he did it. Thank you very much, Yngve. So the largest acquisition ever in history, which was very successful. You have seen that we have not integrated APAC. We do it somehow a little bit different than some of our competitors. We leave the best of both worlds because the Apex model is a different model tend to the Kuehne+Nagel model. Yngve can talk about it a little bit later. You see we have been hit quite fast by the Ukraine war. This is our facility in Kiev which was destroyed after a couple of hours last February. We did a lot of support for the [indiscernible] air and other support organizations supporting the people there. The good news is we have delivered more than 4 billion vaccine doses during the course of the pandemic. And why do I say that? It's not only the fact that we help the people, and we made logistics as a very important pillar of the entire health care situation on the vaccine side. This was based on a decision we have taken in summer 2020. In summer 2020, nobody knew at that time whether there is a vaccine on the horizon or not, but we have been contacted by some of our major customers, and they indicated that at that time that they are working on a vaccine. And the question was, are you ready? Are you ready to support whatever it means from a cost investment perspective? We sat together and we said, yes, we will. Independently, whether a single business unit will make profit or not, we are going to step into it. And then we invested heavily in cooling units in contract logistics. We prepared ourselves for airfreight and road logistics, and they paid off pretty well. This is a clear statement. Today, we are stronger than ever. Kuehne+Nagel is stronger than ever in history, in the history of more than 130 years. #1 in sea freight, #1 in air freight logistics; #3 in contract logistics, and we said it this morning, focusing more and more, not only on growth as well on profitability, the highest profitability ever. Road Logistics are solid #5, quite nice profitability development and more to come. 130 years track record, 80,000 logistics expertise, people, white color, blue color colleagues around the globe, 6 industry verticals. We are focusing from a sales perspective on the following verticals: health care high-tech, automotive, consumer retail, industrial and aerospace. And this is where we are already having a certain market position. More to come in the strategy moving forward, which I will share with you in a couple of minutes. Technology. So to ensure that we have all the right understanding. What we have done the last years, we have modernized our TMS landscape, so our transport management systems. We have just concluded last year in December with the rollout of our new Sea and air log system for sea freight and airfreight, a one-file concept, which is now live everywhere in the world, we have connected in road logistics, 40 countries, plus 40 countries in the last 2 years towards our new TMS inroad, which is called Road Log, so Air Log, Sea Log in sea freight and airfreight, road log in Road Logistics and control log in integrated as well as swift log in Contract Logistics. So we manage our own destiny, and we built our own systems. We don't buy it from the marketplace, and we will not buy our core systems, our TMS from the marketplace. So we maintain with our intellectual property, and this is a core value proposition from our perspective towards our customers and partners. eTouch, we started it already in airfreight with great results and an impact significantly on our conversion rate the last couple of years. Now we will accelerate as well in sea and road freight in parallel has started the process as well. Financial strength. Markus shared his position this morning. We have a unique ownership structure, strong dividend track record. You have seen this morning how much we are going to suggest the general assembly to pay out in May this year. If you manage a new strategy, if you come together and thinking about what do we do in the next 4 to 5 years, you need to start with the trends. You need to look into, okay, what is the trend in the different marketplaces? What is the trend from an industry perspective? What is the trend which I need to cover in order to be successful with my customers, their end customers and with all the stakeholders around the supply chain? This is what we have -- this was our starting point in order to create our North Star. We thought about where do we want to be in 2030, and this was the starting point. We looked at the consumer needs. So everybody, most probably in this room has increased the e-commerce orders, the behavior, the individual click to buy in the last 2 years, right? So that is a trend which will going to continue. The growth rates currently, as we speak, since the fourth quarter, the first quarter and most probably until mid of this year in e-commerce, will not be, of course, at 20%, 30% anymore, but you still see growth in e-commerce. And this pattern will continue. So you have to have an answer, and we will come up with an answer how to manage this trend moving forward. Supply chain challenges. Everybody talks about near-shoring, sure shoring. Is the globalization over? Is there a new pattern to be expected? We have a clear position. Globalization is not over. We see that still, right, a certain demand, the workbench. China, 30% of all the products are still coming from China with the best infrastructure around the globe from a production perspective. However, what we see, and we see that already since 2022, more and more, there's a clear effect that companies, blue-chip companies, medium-sized companies, SME go for double or triple production facilities. So there is a clear trend into other countries. Vietnam, for instance, has seen tremendous growth the last 12 months. Indonesia, India, Southeast East Asian countries will see more and more growth coming in from production, sure shoring from a single window opportunity into a more diversified workbench. Does it help us? Of course, it helps us. As more and more customers are demanding additional service components as more they need us as the 3PL. So for us, everything what is increasing complexity will help us to grow and to achieve a better yield. Competitive landscape. You guys, I think you have almost asked 100 times what is happening with the new situation? Is it a threat for you? So two particular carriers are moving into the 3PL space not particularly into our space, but two carriers have invested heavily in Contract Logistics activities outside of the port to port, capabilities in order to offer their BCO customers, their top 200, 300 customers an end-to-end solution from Asia to Transpac into Europe, multifulfillment last mile. Is that a threat for us? I wouldn't call it. Cost. A couple of key messages. First of all, none of the carriers will tackle the SME business. 50% of our business is SME related, small, medium-sized enterprises, 100 container, 150, 200 container importers, exporters. The basic load, none of the carriers will have an answer to the SMEs. We have an answer to the SMEs. And the fundamental question is what is our quality stamp? If our quality with all of our capabilities, the ingredients is better than anybody else in the market than whatever they do, we will have better customer relations, and we can serve our customers better. So that is an area -- don't get me wrong, which we do not underestimate and we watch carefully, but it's -- we don't see that as a threat. It's exactly the opposite. We are inspired to go the extra mile to become always better in order to outperform. Digital forwarders, I said it, I think, a couple of times, you cannot beam freight, right? What is the digital forwarder? We are digital as a digital forwarder. The only difference is we are not a start-up. We are already 130 years in the market, right? So what we have to consider is they start, some of them, they start from a greenfield perspective and then they have a very good in terms of TMS IT capability with a platform towards their customers, which is quite nice to use. But what they are lacking is the expertise, the people. We have both. We have the digital capabilities, and we have the people. And that is what distinguishes us from any start-up in the world. That's the reason why we watch out, we learn. We don't underestimate, but we believe we can do better. Data and automation. Data is key. And I said, I made a statement a couple of minutes ago, our TMS landscape will be our intellectual property as well in the next years to come. We will not buy from the market. We will not buy a software, which we then purely integrate into our businesses. This is our core. However, how do we manage the connection to our customers and partners will become different in the future. Sustainability, Andrea will talk about it, that is a topic which will never go away in the next decades. And we all have to tackle it as an individual person supporting the CO2 reduction in business for our customers, for the purpose, for our people, for the entire stakeholder community. Transport capacity. Currently, you can book as much as you want. Remember, a year ago, transport capacity was extremely scarce, right? And this is something which will sooner or later come back. You have a disruption sooner or later in the supply chain. And then you need to really make the choice, what do you do for your customers? How do you position? And how is your planning? What is your predictive analytics? How can you use data in order to become better for your customers? From a customer perspective, we, as Kuehne+Nagel, we try to put ourselves into the shoes of the customers as many times as possible. We need to look from a customer perspective into the key questions. What kind of questions, problems, a service provider as us need to fix. What is my problem from a customer perspective? How can I ensure I have access to capacity? Remember I said that, right? 2, 3 years ago, we, from a sales perspective, we always were dealing with the procurement department. Now we are dealing more with the supply chain organizations of the customers. because they need to ensure, all of them, that the products are arriving in time at the right place. And it doesn't really help you if you have the best price on earth if you cannot deliver to your end customer needs. Do we understand their business? Do we have powerful technology in order to support, and what is all about our market insights? So at the end of the day, from a customer perspective, who can I trust with my critical supply chain? And that was exactly the question, trends, trust. What does a customer need? And this is our claim for the Vision 2030, becoming the most trusted supply chain partners supporting a sustainable future. And now somebody can say, okay, how are you going to measure trust? What do you do? People, employee experience, EX, customer experience, CX, how do you measure? How do you measure trust? And I can tell you, we will measure and we will be able to measure. This is what we would like to hear from our customers. Kuehne+Nagel's worth it. Kuehne+Nagel is my safest choice. Kuehne+Nagel is my trusted partner. And trust, think about it, who is a prime customer of Amazon, oh, quite a few. Okay, quite a few. Do you check on the price level when you order? Most probably not anymore, Because you trust, you trust that the cargo, whatever you are ordering the pair of shoes, which you want to have in the afternoon, the book, the shirt, the laptop, you trust them that it's going to get delivered exactly at the moment where you wish to receive it. And that's what all about -- what trust is all about. You are becoming less sensitive on the pricing because it's extremely convenient, and that's what we would like to achieve, becoming the most trusted supply chain partner in our industry. So road map. Why have we chosen two-time horizons for the vision and the road map? Because you want to measure us, of course, right? And your horizon is not 8 years. And that's the reason, one of the reasons. The main reason was, of course, focus, focus, focus. Whatever we are going to do, we need to have a certain focus on leadership and we need to have the capability and the ability to execute what we promise. That's the reason why we condensed it into the first 4 years, which we call road map, with certain deliverables and then the next chapter in order to accelerate what we will have achieved until 2026. For me, this is a very important slide because this will create transparency for you about our clear choices we made. You have to make clear choices when looking at the strategic footprint moving forward. And for us, we made these choices. First of all, I said it, lead with quality and trust. We don't want to be the most competitive on price. We don't want to be a transactional service provider. We want to lead with quality and trust. Best Logistics expert and technology. We don't focus on either or, it's a combination of both. We strongly believe only with the right people with the employee experience, the EX and the right technology, we will be even more successful than in the past. Asset-light model, this is going to continue. We will not move into any assets other than maybe a couple of trucks, 2 or 3 aircraft where we have a back-to-back requirements from customers in order to support their supply chain needs, but we will maintain an asset-light business model. Yields and margins, I said it. Yield is more and more the important driver for success, but don't give up on your growth aspiration. But whatever you do, don't grow with commodities. Don't grow, and that is our mantra. We are not going to grow with businesses or with certain trade lanes activities below a certain threshold. The market is so big, even as the #1. The market share we have, gives us huge potential to grow into sectors and businesses where we have a much higher yield. It's an evolution and not a radical change. So it's an involvement of the previous road map of the previous strategy. And we have not only short-term, we have mid-term and long-term goals, Vision 2030, Roadmap 2026. Now Roadmap '26, the next 4 years. The experience piece, the digital ecosystem, the market potential and living ESG. I will touch a little bit more on the experience, the digital and the market because living ESG Andrea, as I said, will share 20, 25 minutes insights on all the aspects. Kuehne+Nagel experience, customer experience, people experience. There is a common problem statement in the industry. This industry, it's not a Kuehne+Nagel problem. We are part of that statement. The problem of this industry is that this industry somehow on an annualized basis is losing 20%, 25% of its customers. Statement. And I'm not talking about large customers, of course. I'm talking about telesales customers, small mom and pop shops, customers who book once a while, right, two types. So why is that? Because the small forwarders, the SMEs forwarders, they exist based on an extraordinary experience they create for their customers. And that's exactly what we want to do. We want to basically move into the space in order to create extraordinary experience with our customers. What have we done? We have 6 priorities, and we call these priorities, discover, connect, develop and evolve. And they are equally important for our employees and our customers. And I give you just a couple of examples in the interest of time. Discover, from a customer and employee perspective, what is our employee value proposition in the marketplace? If you know us as a potential candidate, if you have good experience, even if you did not have any touch point, via social media, via recommendations and the family, friends, colleagues, relatives, then you have a positive experience. And then you could potentially think about joining a company like us. So how do you -- what do you need to do in order to have the branding position before even people think about joining a 3PL like Kuehne+Nagel? Same goes for the customers. How do you interact with your potential customers? Connect and onboard? What is your experience? We have seen in the pandemic that our industry has lost more people than ever before. The reasons are pretty clear. And if you look into the data sets, you find out that people have left the industry after 6 months already or have left certain providers after 6 months already. Because the onboarding didn't work out properly. What is the purpose of the onboarding? The same is with customers. you want as a customer, the same onboarding experience, whether you do business in Shanghai, in Barcelona, in Santiago, in New York. You won't have a seamless onboarding experience with us. And that's exactly what we need to develop. So I'm not saying that our onboarding is not sharp and not properly managed, but it's not consistent around the globe. And that's exactly what we are going to change. One consistency around the globe. How? I'm going to tell you. Develop, how do you develop your people into new opportunities? New opportunities inside their environment or moving them outside into other businesses, other functional units, same for the customers, continuous improvement. And how do you evolve that? So what we have done there is that we have asked our general managers. We have a matrix organization, and we have 5 regions. And the regional presidents are responsible with their general management to roll out, to execute this customer and people experience in the future. It comes from the heart of our organization for our people and for our customers. And this is the glue for everything what we do. This kind experience, customer and people experience is the glue for everything what we do. This is the center of our focus in the next years to come. Have we done that already? Yes, we did. We started NPS measuring our customer experience in Contract Logistics in 2018. You have seen the results of Contract Logistics, how positively the curve went up. And there is a correlation always between NPS, customer retention and the operation margin. So we are not reinventing the wheel within Kuehne+Nagel. We use what we have already have in one business unit and now replicated on a common standard into the organization. Digital ecosystem. One message, please. A digital ecosystem is not -- we are moving our infrastructure from on-premise into the cloud. This is not a digital ecosystem. A digital ecosystem is, if you look at your business challenges, what are your business challenges you want to manage? So for instance, do everything faster and more effective versus what you currently provide, generate new revenue streams. What do I mean? Our revenue streams are purely coming from executing freight. But can you imagine we would have a subscription fee on certain solutions, new value propositions, using the new digital ecosystem. That could generate potential new EBIT, right? So first of all, become faster and more effective, generate new revenue streams and use artificial intelligence and machine learning. That's the reason why we move into this new digital ecosystem. And digital ecosystem for us is -- we will -- with a partner, which we are not yet ready to announce with a large cloud partner, we will move into this new ecosystem in order to create a complete different customer onboarding, customer experience, people experience in order to have a better value proposition for our customers. So on that slide, please remember, it's not a transformation from on-premise, landscape infrastructure landscape into the cloud. It's much more. It's business driven. What kind of problem statements you have you want to solve for your customers? We have done that already. This is the first cloud project we ever started. Some of you might remember, we did eTruck now back in 2018. And we now have a 3 million digit. So it's a little bit more than CHF 100 million revenue stream based on this idea with a quite nice EBIT margin in road freight. So as well here, the proof of the pudding is we have done it already. So everything what we have learned, and I tell you, you learn quite a lot and you fail a lot of times if you do things like that. So the only topic is don't fail twice. Take your lessons, use it, utilize it and move forward. So this is a perfect example, which will guide us into this new digital ecosystem. Living ESG customer demand, of course, more and more to help them in their CO2 transmission. You have seen a lot of announcements Lenovo was the last one in airfreight. Novo Nordisk was another one. Yngve will speak about it. where we are helping customers to become more neutral or totally CO2-neutral by a certain time by helping them with biofuel stuff or any other alternative fuels. Same goes with the SBTi target. We have signed up to the SBTi target by 2030, our commitment is to reduce 33% of our footprint, and this is not offsetting. This is technical reduction, right? We have just ordered in France a couple of months ago, the first 100 BFS eTrucks in order to support that transition. So it's Scope 1 and 2 but 98% of our mission is in Scope 3. So it's more helping customers. The S, what is the purpose of the company? Andrea will tackle it as well, this is important, and I said it already, the purpose for what do we stand for in our customer, in our employee experience and of course, an appropriate governance. Market potential. I need to speak -- speed up a little bit. So market potential. Remember, we started 8 years ago with the first, we call it leverage area at that time, health care, pharma and health care. Now we are leading this industry from a 3PL perspective. This is an ongoing journey. Yngve is the sponsor of health care on Board level. So everything what you see here has a sponsor on Board level. Every Board member takes a certain initiative and drives it forward, fully responsible. Health care, we will maintain. Not only maintain, we will even develop and execute faster on our health care ideas. Renewable energy is brand new to us. Renewable energy, Otto will talk about it. By 2050, 50% will come from renewable energy globally, 50%. Can you imagine two main areas: solar and wind power, offshore, onshore. And it's amazing what this industry will require from a logistics standpoint of view, what kind of equipment they need to install. And its seafreight project logistics, heavy weight, it's contract logistics, its final mile airfreight and road. So this is a huge area where we will invest heavily similar to what we have done in health care as of now. Semicon, we are large provider in high tech, but we have not touched so far on Semicon. This is an area where we as well will invest. The commitment is CHF 500 million revenue by 2026, mainly in the airfreight in Yngve's camp. E-commerce, I said it already, it's the multi-fulfillment for our incoming sea freight. We are absolutely great in offering dedicated solutions for large customers, and we will invest organically and inorganically in e-commerce final mile solutions. Customs will be touched by Hansjörg. Great opportunity, very high yield and excellent conversion rate. And we started that journey already in the U.S. and in Europe with very nice growth rates. Asia. Organic and bolt-on acquisitions. We always said Asia is our focus area. And you can expect whenever we invest, we go into the Asian marketplace. This is part of an inorganic growth strategy in the next couple of years. Japanese and Korean customers, very close shop the last decades. So for us, it was rather impossible to tackle Japanese and Korean customers. Now they have opened ourselves. We have hired in almost all markets in the meanwhile, consignee salespeople's Japanese consignee salespeople selling for us at the destination point with great success. This is an area where we believe we can grow our large customer base significantly. Now I said, how does that connect overall? Global consistency with dedicated Board leadership. So the CX, EX is a CEO topic together with the regional presidents. The data, this new ecosystem, is not an IT topic purely. It's not a transformation. This is something the entire leadership, the Board will drive forward because remember what I said, it's the business challenge. It's not the IT infrastructure. This is our core. This has to come from all the members of the leadership team. We have Mark Buckle here just in case in the afternoon, we have a couple of questions on the digital ecosystem. Markus over there, he will be more than happy to answer. Global sustainability with HR and Andrea. And then these different market aspects, which I have just shared with you, dedicated each individual initiative to a certain Board member. This is the team. This is the winning team of the industry. The two gentlemen on the left, you have seen already a couple of times, we have Martin, managing our IT and the digital ecosystem, Sarah will join us as of April 1 as our new HR management -- sorry, as our new Chief HR Officer. She has a large experience coming and joining us from Migros and she gained certain experience as well before at a stock-listed company in Switzerland. Mark has joined us effectively 1st of January as a management Board member, but he is still with the company since 2014. Hansjörg, you have seen Yngve's here, Otto and Gianfranco. And you can now argue about diversity, right? And in all honesty, we are very proud that Sarah is going to join us in order to help the company to really drive the diversity forward. Last slide before Markus is going to take over on the financials. Everything what I have shared the cornerstones, the vision, the focus on the experience will lead us to this new conversion rate target, 25% to 30% by 2026. Another, I think, message I would like to bring across. It's important for our strategy that we tackle the soft stuff as important as the hard stuff. So the cultural change in CX and EX in this experience is as important as the development of the markets and all the other cornerstones. With this, thank you very much. Markus will now guide you more and tell you more about the financial ambition and how we are going to achieve that.

Thank you, Stefan. So thank you very much. I think let me pick up here quickly on the key takeaways. The slide that Stefan had originally presented at the front, just to keep it in good memory. So most trusted by customers and employees focus on yield management, maintaining the growth path. I think Stefan was very explicit on it, a company that doesn't grow, has no future. And of course, we have future, we run a mold, we want to manage that future going forward. Experienced team, you have seen that with a clear plan and KPIs. You will see some of them I'm going to present and of course, the target 25% to 30% group conversion rate in 2026. Let me pick up on that slide. And it wouldn't be me if I would just start in a time continuum, right? I'm the starting point, I need somewhere where I can reference to because otherwise, I have difficulties to see the development going forward. So let me just recap 1 minute on what I call the slide of swans. We see these little swans there. I did like these slides because that, in a nutshell, that's the summary of our 2017 to 2022 program. And earnings before tax, CHF 1 million, earnings per share in Swiss franc, we have put in that green dotted line as the reference point to what we have communicated at that point in time as our targets for the conversion rate of the group 16%. And as I -- at multiple occasions, I always add our return on capital employed on a natural basis of our balance sheet and our business model should be around 70%. Free cash flow generation, I don't need to mention it anymore. I think had been exceptionally good, and I think we are very clearly committed to continue that. So moving forward, Roadmap 2026. So the old road map is closed. The new road map starts and I had a suspicion that Stefan because he comes out of the road logistics, he's continued with road maps for long period of time. But we will say it's strategic programs that we talk about. So whilst we acknowledge, of course, that the years 2021, 2022 have been quite extraordinary. But on the other side, it gave us opportunities to develop very specific solutions to customers and generate an operational platform that is one to none, right, absolute operational excellence in all business units, which is, and which we are building on, is our platform for success. Now it becomes slightly tricky because in my simple world, there is only three core elements that the business model is shaping. It's growth, it's profit and it's cash. So whatever you prioritize is going to give you a certain tilt towards your profitability and to your success. Simplifying and maybe even oversimplifying, I admit that, a business model that probably pre-pandemic was driven by, and you can see it here, incremental volume, a bit of incremental profit, a bit of incremental cash flow. Everybody was happy. Why was that possible to do? Because resources were not a topic, neither in capacity nor was it on the workforce. We've got plenty of people to work with. If there is another 1,000 TEUs that AutoShack has won on an RFQ, which is hire another five people. and that was it. Today, that's not possible. And in the future, that's not going to be possible. Workforce is a scarce resource, skilled workforce, workforce that actually can deal with customer requirements, customer requests. That is something that you need to educate that you need actually to bring from within and have the right people to do that. And when we talk about customer experience, employee experience, this is what matters because if you have to wrong people on the phone, and I'm using phone as a communication stand-in, if you like, nobody over the last 2 years really like to work in this industry. You know why? Every time you pick up the phone, you got yelled at, customer was unhappy, things didn't arrive, ships were late. When a ship is late, it's not my fault. Still, I need to deal with the customer request. So a lot of these things are changing. We need to get the right people for delivering the right customer experience. Only then, our yield, our management on yield is going to be successful. Because only with that extraordinary customer experience, we can focus on yield management as we want to do it. So you will say, of course, we have heard that 2017, '18, '19, '20, you always told us you are looking for the higher yield business. So what's different this time? And allow me for a moment and being conscious of time, but allow me for a moment for each of the business units to pick out one single impact of the four cornerstones. So what does it mean in reality? What does it financially mean in reality when we put a highlight on some of the initiatives within each of the business units? Look, at the Sea Logistics. And you all know Sea Logistics is the -- still, I may say, to the honor of my colleague, Yngve, still the largest business unit in the company. But we have a little competition going on there, right? So maybe there is sea freight and air, sea logistics and air logistics fighting for the #1. So -- but offering an extraordinary service, we can earn an average of USD 50 more per TEU. And Otto is going to tell you how he's going to do that. What does he actually mean with that customer experience? But I give you the idea what's the magnitude that we are talking about, an average of 50 per TEU. And Otto is going to be some that is 20 and some there is 200, yes. But an average, and it's not in every single TEU, but calculated throughout the model, that is the impact. It's massive. It's absolutely massive. So you're going to say, that's great. I'm also going to say that's great and Otto is going to tell you how it's going to work. Why do we know it's going to work? That's why I wrote it here. Here is why we believe it works because the large number of our competitors, I'm not talking about the top 5 or 10, I'm talking about 10,000, 20,000, 30,000 small freight forwarding companies in the world. Their unique selling proposition is the extraordinary service. If that would not work, they wouldn't be there. So logically, combining that customer experience, that extraordinary customer experience with our scalability, reliability, global network, and last but not least, the pricing power that the smaller provider cannot offer to the customer. The sky is the limit. So 50, I think, and I know Otto, here's a careful estimate. So you know what you want to do? You know the magnitude and you know why we think it's going to work. Pure statistics, you can read it afterwards or you had read it already. It's a short analysis of how much business we do with the development of a certain bandwidth on the GP per TEU and how much of our volume we actually currently ship below average GP per TEU. This is the red color on the volume chart. Air freight. And I'm picking air logistics, digital ecosystem. I'm not picking the experience. Air Logistics also has, of course, impact out of the KN experience. But here deliberately just to give a difference being a different highlights to Air Logistics. Different customer portfolio, much higher ratio of large customers. So they already today rely on our scalability on the global network, on the capacity access on the reliability of our services. Clear. ETouch was introduced first at Air Logistics operation. And very clearly, Yngve says, "I can do more. I can even automate more. I can give better digital solutions, and I'm going to shave off USD 3 cost from 100 kilos. So what that means USD 3 more on my EBIT per 100 kilos." Why do we think it's going to work? Because we monitor already since 2.5 years on an hourly basis -- or a man-hour basis, excuse me, the word on a work hour basis, I'm not allowed to say man hour anywhere -- on a work hour basis. On a work hour basis, the progress into the efficiency gains through airfreight. Also here, very similar, very similar setup. The only difference is when we compare to the sea freight analysis, also look at the red part for a moment, the red part, 27% of our volume, we shipped below average on a GP per 100 kilo. Why? The vast majority of that is perishables. And we absolutely are committed to continue that. You know why? Because perishable has additional qualifier. It's entirely resilient to any macroeconomic development. It's unbelievable how stable volumes in perishable networks are. And at the current stage, we might actually be one, if not the largest, I think we are the largest, but certainly only a handful of global providers can give that kind of network service to perishable customers. It's absolutely unique what we have here. So this will stay. The share maybe will change a little bit because we are focusing on higher-yielding business in the dry cargo, as we call it, but of course, the perishable we are entirely committed to and continue to be committed to. Road Logistics, a matter of scale. You do know our main exposure is in Europe and in the U.S., in the major markets in Europe. And as Stefan has alluded to the digital offering with eTruck now is picking up pace very quickly and is contributing nicely towards the profitability. What is important? We can still optimize the utilization of our networks. So when we do that, we will have an effect that I put here on the -- that we put here on the slide, with an 8% gross profit growth. But I can tell you, we aim for a higher percentage in EBIT growth. So positive leverage, 8% GP growth and a bit more on the EBIT. Why we believe it works? Because we can manage it ourselves. We don't need anybody else. We can organize ourselves. We are good in operational optimization, and we trust that this is going to work. Contract Logistics. The key to nearly everything. I think it's entirely underestimated also from the outside. We course contract logistics with their product knowledge of customer product, of course, customer product knowledge, supply chain knowledge. They have engineers that actually think about how things need to be handled properly. So there is expertise that is spread out through all the other business units. And there would be a good amount of business that we would struggle to obtain in the other business units without a clear proof of expertise through the Contract Logistics folks. And we went through a restructuring over the last couple of years. You all know that. The ones and you all follow us for quite a long time. We have spin off some of the U.K. businesses. We have restructured some of our existing businesses, the customer portfolio. And I safe to say, I think we are absolutely where we want to be right now. And now it's a matter of scale, growth and continue that road of success. You might have noticed or maybe not. That's the only slide where something is missing, right? It's the question of why we think it works, right? Why do we think it works? Because on a global scale, compared to any other competitors of us in Contract Logistics, we are already the best. And believe it or not, when you look into the profitability, this is not the largest but it is the most profitable by comparison. So we believe it works because we know we have done it. That's why I believe it looks. So I have talked now to one of the many initiatives, obviously, in each of the business unit. And I hope sincerely that you understand that each and every of these initiatives is a deliberate, very well-planned part of an overall strategic bundle of initiatives. And I have already seen in some of the communications you have picked out that slide and started to send it around. I know going to become maybe one of these slides similar to the eTouch slide in 2017. It was also just recently, I think somebody put it in front of me and said, so how did that develop then? So some slides are haunting you forever. I think that has the potential to do that. What it does, and I want to be very specific on that, what that slide does, it shows you the magnitude of contribution to the journey from our starting point towards the 2026 ambition. And really, how you need to read it is like the target on the right side, so on the green column, the conversion rate in excess of 40% for Sea Logistics, Air Logistics in excess of 10% for Road Logistics and 7% to 9% of the Contract Logistics piece. And the four cornerstones are contributing in a certain percentage towards that journey. And it's a journey. And again, I'm reiterating that journey also means that there might be a situation maybe even in 2023 or '24, where we are going to go into the opposite direction. We don't know. But at that point in time, in 2016, we're very confident that these are going to be the numbers. You see largest contributor this rate is KN experience. That's extremely important for Otto Schacht and his team and the thousands of free people out there to get that right. Market expansion, similar for sea and air freight, very important for road and Contract Logistics. Digital. So on the cost side as well as on the digital offering, never forget the digital offering, that is the revenue growth as well, important on air and road. KPIs. It wouldn't be Kuehne+Nagel without KPIs. And yes, I admit when we started 2017 on the eTouch, maybe our reporting was not timely at the beginning. It took us maybe a year to get the first reliable report out there in front of you. And I think we will be in a similar situation here. But we want to disclose on regular basis, on KN experience, Net Promoter Score, right, wrong or different, I'm saying, but you will see a progress. We will disclose on the digital ecosystem, our eTouch indicators. Similar to what we do on the air freight side, we will do in the freight side. Market potential. That's the easiest one. I think that is for everybody, quite straightforward, incremental gross profit incremental EBIT. Living ESG, total greenhouse gas emissions per met turnover. You can see that already in our sustainability reports. And on the overall financials at the end, it's the group performance that counts is the gross profit EBIT and, of course, the conversion rate that we are looking for. Summary. Put everything together. So what is the inpatient from a financial perspective? And where does it come to? Where do we start? And yes, this is a Capital Markets Day, we talk about business development and everything else. But at the end, it's only like a few slides that we -- or a few KPIs that we need to look at. Compound growth rate between 2019 and '26, 17% to 19%. So I'll leave it up to you. Your models are probably better than my calculation in the head, but I think it's going to be relatively easy to get to a 2026 number. Conversion rate of the group, 25% to 30%. Conversion rate, sea and air, in excess of 40%. Free cash flow, in excess of 70% net profit after tax. We have exceeded that on a regular basis. You could say, well, that's not an ambition, but I think it's good to know. Working capital, 3.5%, 4.5%. There is no reason that, that would change and a CapEx that is a relatively modest CHF 200 million to CHF 250 million. You remember that has been already on the CHF 300 million side. Because of the restructuring also on the Contract Logistics, part, we have been able to reduce that quite significantly. And a final remark to that financial target or set of financial targets for 2026. Kuehne+Nagel exists now since 132.5 years. And we are focusing on customer, on customer value, on customer experience and how we can best contribute towards the value creation for our customers. We are blessed. You all know that. We are blessed with the family majority shareholder structure, and that allows us to keep the focus always on the long-term view. And I think what is important when we think about the family majority shareholding and the customer value creation is we truly believe as long as we can create value for the customer, we can create value to the investors. So you have seen that slide now the third time. It hasn't changed, I hope. 2023 is the starting point. And allow us and let us and trust in us to deliver our 2026 Roadmap with all its financial success. Thank you very much.

So we're now happy to take some questions. from Stefan and Markus, can address them?

My name is Mark Zeck from Stifel. I just got a question on what you plan to do in sea freight. And you said you want to increase the share of SME customers or the retention of SME customers. And my question here is if these SME customers are currently with smaller freight forwarders you committed us on these high maintenance customers, and therefore, shouldn't the probability of these customers should be a bit higher profitability should be a bit lower than what's your average large customer right now?

So let me answer -- yes. So let me answer the first question. yes, we will go as well for SME customers. As I said, 50% is with large customers and sea freight and 50% is with SME customers. What we have done quite a while ago, we have split our sales force into two parts. One is focusing purely on key accounts and vertical. And the other one is a hunting force reporting into the sea freight business unit only focusing on SME customers. This is where we invest in the next couple of years more. So hunting spirit on the SME customers. Now the question is, is the operational cost to serve these customers higher than in the key account arena. The only question is what do you do with the onboarding? And remember what I said, we will create a seamless onboarding capability with our digital ecosystem. So the trick is to acquire SME customers with a higher margin and then seamless onboard them by using latest technology because then you avoid that the onboarding process is costing you more than the onboarding process for a key account. That's the answer to it.

It's Sam Bland at JPMorgan. I had a question on that slide that you were talking about. You've got this sort of Kuehne experience and the sort of market bucket. Could you just be quite clear on what's in each part? Is market factors like freight rates? And it's not company-specific or, and the company's changes are in Kuehne experience, I think in particularly also about customer mix, which would that fit in?

So the customer experience, I take it the market potential, I think you can explain how we see that active development and the active contribution of ourselves towards that. From a KN experience. So that is what I think Otto is going to explain in details is how can service become extraordinary that customers are not only prepared to pay a higher price for that, the Amazon example of Stefan, so -- but not only a higher price but also the higher retention of customers. So we expect to grow in two areas, not only on the GP part, but also on the volume part because you don't lose as many as you would have done in the past. So this is basically the customer experience piece. On the, of course, the employee experience piece has a pure cost relation to it. When your employees are happy to work within that framework and being well-motivated because every time onboarding and losing employees is quite a costly entertainment. On the market?

So the market, just to double check, whether we actively or we wait basically, right? So how do we actively approach that market potential?

Yes, like it did Kuehne. Yes. Is the market piece Kuehne specific things and changes? Or is it market level, I don't know whether it's freight rates or something that you're not controlling?

No, so it's from a market potential. So what I said before is we actively engage ourselves with certain verticals, which we had not on our radar screen in the last couple of years. So I give you -- I have given you a couple of examples, right? So it's our capability, our willingness to invest in order to gather and gain more market share or more growth in these specific areas, right, whether it's the Japanese program, the Korean program, which we haven't done in the past, whether it's looking into the renewable energy, look, whether it's looking into customers. So we invest in certain resources and capabilities in order to capture potential where we believe there is a higher yield for us if we move into these areas.

Mike Foeth, Vontobel, two questions. Coming back to KN experience and employee journey. Can you share what sort of customer churn you have and what you're targeting in the future and also for employee turnover? And what sort of targets you have? And the second question would be on capital allocation. You talked about CapEx. You mentioned M&A in that one slide, and you paid a nice dividend. So what are your capital allocation priorities in the 2026 road map?

So let me take the capital allocation first. I think very clear there is no change. That's why we didn't really put any specific highlight on this. I think you know that, we work on asset-light as much as possible. We are adamant on it. That's why also the CapEx came down compared to a couple of years ago. At the same time, from an M&A perspective, nothing has changed there. We're committed to e-commerce, health care, Asia focus, small, medium-sized acquisition, always acquiring expertise know-how or special industry access and then leveraging that through our network. So none of these parameters have really changed and that will drive logically, I think, and you have seen that here also with the dividend proposal of CHF 14. That will generate, let's say, a healthy dividend potential.

I take the employee. So before the pandemic, we had below 5% unwanted erosion on the people side. During the pandemic, depending a little bit on the marketplace, we had significantly higher, right? significantly above 10% in certain markets like the U.S., driven by the market, right? So our aim is, of course, to bring it down globally again to the 5% maximum, right? And think about the following: people are a scarce resource, and we will not get a lot of new people into the marketplace in the next couple of years. So we really need to manage the unwanted erosion attrition from people differently, and we need to allocate the people we can get from the marketplace, train, educate, coach them, create this EX in order to put them on the right yield business, right? So that is as well a component of this question. And customer experience, of course, we want to bring it down significantly from what I have shared with you a couple of minutes ago.

Alex Durbin from Bernstein. Can I dig in again on CX and EX please? So on CX, we talk about customer retention improving. How should we frame the financial impact of this, we're talking about spreading customer acquisition costs per TEU per tonne over a larger denominator or what's the way to think about the financial upside? Then on the EX side of things, talked about employee churn, but what tools do you have in place to manage EX? And how would you assess this effectiveness in driving financial results of the company, please?

I think I'll take it on the customer side first. The customer side, I think we have quantified the impact at the GP level from a sea freight perspective where there is the biggest lever. And I think that is a combination of the one side being rewarded for an extraordinary service with less price sensitivity, if you like, from a customer's perspective. And I think the USD 50 per TEU is quite a specific number out there. I don't know if you look into the percentages on that one slide, you will see also a percentage for airfreight. So you could calculate if you would like, that there is certainly an element of improvement there as well. I think it has nothing to do with the cost structure. The large difference, and Stefan has alluded to -- the large difference between the SME customers and the key account customers is on the onboarding piece. Once the onboarding piece is actually being done on the execution itself, there is difference, but not to a magnitude that's going to put a question mark around the profitability model.

And maybe let me take the question on the people side, right? So what kind of tools. So first of all, and I mentioned it as well, we have started to use Great Place to Work as our source basically, right? So we have done it in Ireland. We have done it in quite a few countries in South America. So first of all, you need to understand what is the belief, right? So what are the touch points? How people do come back? What do they want from you, right? And then you need to come up with the tools and the process in order to give an answer, right? So this is a little bit how we are going to do that. So first of all, we need to have a baseline. And then from that baseline, we execute the tools and the ideas we have in order to improve the situation on the different touch points. This is the methodology behind.

Patrick Creuset from Goldman Sachs. Just two questions, please. The first is what yield assumption underpins your 2026 targets in Air & Sea. And perhaps I just, I didn't see it, but what's the base year for the divisional targets you gave, for example, $50? And then just adding on to that, I didn't see any mention of cost programs. You're not cutting costs at all also in 2023?

Okay, three questions. So I think the base for everything is, and we deliberately said the growth program goes 2019, 2026. So you will have to calculate yourself. I'm not going to give you a number to be very clear. Second part, I think on the yield or the first question of the yield, what are our target yields. I think we have already disclosed some while ago that from a sea freight perspective, we would look at yields on the around $450 to $500 level. When we operate or when we continue operating with a CHF 300 cost base, then you derive your EBIT per TEU that is -- that I think is a target going into the 2026 years. Cost-cutting, interesting that you asked the question if we're not doing it. We adjust permanently our cost base towards the market conditions and the revenues that we can generate. So we are -- on a day-by-day basis, we are adjusting our workforce, we're adjusting our operational base towards what is required. What we don't do is we don't go out and say, "Yes, great, we let go 5,000 people." That's not our style. That's not how we operate. It might actually happen, but we are not marketing that we are letting go people because we believe that when the market picks up, and we all think that it's going to happen most likely at a point in time in 2023, we don't want to go and rehire people that are not trained anymore. So we do it specifically, focused in areas where we know we need to adjust it.

And let me add, think about our statement, trust, quality, high yield. If you are a hire and fire, this will not work out. So completely support what Markus said.

It's Andy Chu from Deutsche Bank. Two completely different questions. The first one is on what could be your famous slide. And it suggests quite a high percentage of the Contract Logistics improvement could come from M&A. And obviously, that's when we look over the last few years, it was a big expansion in Contract Logistics, and it's reversed, and it's now in great shape. So I just wondered in terms of the M&A. Is that coming -- when I look at the shape of that, is that direct Contract Logistics? Or is that as a consequence of a target that has largely air and sea with some Contract Logistics? That's my first question.

So Andy, good to have you here, by the way. So I think the M&A piece in Contract Logistics, as I said, Contract Logistics is in nuclear for many other business opportunities within the group. And I think when we talk M&A in Contract Logistics it might be just a fictitious example, right? When there is an e-commerce opportunity on an acquisition target, then that would be from the nature of the business would be typically Contract Logistics, but there is a huge effect on the air freight side, on the road side. So -- but technically, from a reporting disclosure perspective, it might actually be a straight Contract Logistics.

And then around IT, which is obviously very important and question to you, Stefan. You mentioned, obviously, a lot of your system has been internally and developed and generated, and that seems to be the way forward, but there are some systems out there, many systems that are actually quite useful and helpful external systems is the way that the business set up from an organic standpoint from IT systems, does that prevent you from potentially utilizing external bits of IT kit to help performance and margins and profits and cash flow?

Yes. Good question. So I was talking about our TMS landscape, right? So we will never ever develop an own CRM system. So this is always what we will buy from the marketplace in order to utilize the capability which will give us a better position in terms of customer service, of course, right, if we use the right CRM system. So we are already using a state-of-the-art CRM system from the marketplace. And we have done it as well in Contract Logistics and in integrated. We have modular board certain capabilities from the marketplace. But where we will stick to our Interactor property and what we have done the last years is we will not go into the market in order to buy a sea freight, airfreight execution TMS program, right, and install that in.

So in the interest of time, we'll bring this Q&A to a close. I think there'll be plenty of opportunities over the course of the day, right, to address more. So thank you.

Thank you for your attention, everybody. Now Andrea, please join us on this stage, Living ESG.

Great, thank you. Thank you. So good morning, everybody. As Stefan had introduced me, my name is Andrea Debbané, and I'm a Global Head of Sustainability. And I will take you through our living ESG road map, and I have about 30 minutes, and I have one in those 30 minutes is really to take you through it, that you will believe that Kuehne+Nagel is an excellent investment because we have a long-term strategy to turn the transport industry's biggest sustainability challenges into growth opportunities. So conscious of time, there are three points here. The first is on environment and what we're doing to be the frontrunner in sustainable logistics and how that results in customer retention, attraction and business development, then we'll look quickly at the social side and as we've already picked up, how Kuehne+Nagel is the best company to work for and also touching on our governance that we have a strong governance structure for alignment and agility. So being a frontrunner in sustainable logistics, why it results in customer retention, attraction and business development? Essentially, there is more public concern over issues like climate change, diversity, human rights. There are more and more ESG regulations in supply chains. There is more demand from investors for a company's transparency and how they're managing their ESG agenda. And specifically, there's more and more customer interest and demand in sustainable transport and logistics. And we see our Living ESG action plan as an opportunity for retaining, attracting and growing our business and specifically strengthening the relationships with all of our stakeholders, whether that's customers, suppliers, employees and also investors. So let's start with climate change. It's one of the biggest challenges that's facing our industry, and we know that we need to transition to a low carbon and eventually a zero carbon sector. We've had a number of our customers, as you can see on the slide, that have fully engaged in our sustainability solutions since we've introduced them. And we know that climate change is an issue that all companies are going to have to address and tackle over time. And working on these issues, working on sustainability requires collaboration, and collaboration builds trust. And that's why we want to be the frontrunner. So Stefan talked about the Science-based Targets. I'm going to refer to it as SBT because it's quite a mouthful, and that we see that this is a commitment that is growing globally, so we had 72% increase of companies worldwide that had signed up with science-based targets last year. If you look at it in terms of our own customer base, we have 47% of our globally managed key accounts that are SBT committed. And to put that in context, what it represents in 2022 represented 30% of our turnover. So it's significant. And as Stefan had mentioned, we have become SBT ourselves. And what we do is we monitor our customer base and seeing which companies are signing up. And why is it important? And why is it an opportunity? Simply because SBT customers want to work with like-minded suppliers. They want to work with suppliers and partners who have similar values, common purposes, common goals and partners that they can trust to support them in their own sustainability journey and decarbonization journey. So because we're asset-light, and Stefan had mentioned and talked about this, we have a different landscape than many of our customers -- sorry, many of our competitors and peers. And I think what this slide illustrates is our emissions broken down into Scope 1, 2 and 3. So Scope 1 and 2 is what we have a direct influence as a company and Scope 3, which is on the far right, that is the majority of the emissions in our value chain. It's over 98%. And those are the emissions of our customers' freight through our suppliers. So this means that above and beyond deploying our own strategy for reducing emissions in our sphere of influence, Scope 1 and 2, we also have an influence, and we're an enabler in supporting the world in transitioning to sustainable supply chains through the services that we're offering our customers. And that's what I'd like to take you through now. So we're continuously innovating and investing in our commercial offering of sustainability solutions for customers. We know that to make greener choices, it's essential to know the carbon footprint that's generated along each step of the supply chain. And the methodology that we're using, it covers all transport modes, and our emissions can also be broken down by trade lane. I mean, ultimately, we want to empower our customers to make sustainable choices. So we leverage data analysis. You've heard that this morning and you'll hear it throughout the day. And that means working with data, supporting our customers so that they can have operational optimization and consolidation, looking at modal switch solutions, carrier and route preferences so that they can continuously improve and avoid emissions. And last year, we launched the Essential Emissions suite. That provides customers with a comprehensive overview of their shipments and emissions. It's allowing analysis per shipment and per volume metric based on true shipment ownership. So customers now have the knowledge on how to optimize transport routes and reduce their environment impact. And we have over 400,000 customers. That's an immense database. So that also allows us to benchmark either within a sector or across sector. We can also support our customers in setting and monitoring their own CO2 and we also offer the possibility to manage the CO2 emissions for our customers' complete supply chain. These services are an integral element of our business model. They're priced into our customer transactions or separate, and we also sell data as in the case of our integrated logistics. And I'm very excited about the digital ecosystem because that, as part of our road map is only going to enhance and strengthen our capabilities in this area. Because we believe that customers will increasingly use emissions information to make informed decisions and that this will increase the value of Kuehne+Nagel services and our expertise in optimizing logistics. So I want to speak a little bit about reducing emissions because this is particularly challenging for our sector because the new transformative technologies for most of the transport modes. They're still years away. And it is going to take time to test some of these new pathways before they're certified. As an example, electric and hydro-powered or hydrogen-powered aircraft, where there's still a high level of uncertainty and a high level of complexity. Then, of course, it takes time for these new technologies to be adopted into the market, for the infrastructure to be built and supported and scaled. So I think on this road map, here, the message is really clear is the importance of low carbon fuels between now and 2030 for actually reducing transport emissions, and we're making significant investments in this area. And in particular, we've done a lot with SAF, that is sustainable aviation fuels. Stefan mentioned it this morning. But our Air Logistics team is considered the Vanguard on this area. We've invested. We take a calculated investment because we believe that there will be customer buying and everything that we have bought has been sold. Customers have the option either to opt in for SAF on a shipment basis or we can look and work with them and calculate it retroactively for larger shipments or lanes for certain amounts of volume. And just again, to put this in perspective, last year, in 2022, the market for SAF grew over 200%, and this will be a market that will continue to grow. And we've also increased our purchase and investments in sustainable marine fuels. And In Road Logistics, we are starting to replace our diesel with HVO through a book and claim system. And in parallel to procuring and securing the best quality fuels on the market for our customers, we're also investing in in-house expertise. So we have expertise on low carbon fuels for all of the transport modes because this is important, what our customers are looking for from us is not just to come with a sustainability solutions per se. They also expect us to be leaders and knowledgeable on the topic of sustainable logistics, the trends, what is in the market, when it will come into the market and expertise in that area, and you'll hear more about this from my colleague, Otto this afternoon when he'll talk about the renewable energy as a potential opportunity for growth. Ultimately, though, our primary and our long-term target is to shift to zero emission vehicles. So firstly, with battery electric vehicles and then second, with the fuel cell electric vehicles. We're already starting to put these into place in 2023. And we have a goal to be 60% electrification of our own fleet by 2030, and this will be part of our planned fleet renewal. We're also piloting and testing new technologies and ideas such as the solar panels on our long-haul trucks or e-bikes and e-vans for the first and last mile because being a front runner in sustainable logistics also means being a front runner in innovation. And we want to be the leaders in sustainable warehousing and fulfillment centers. So today, we have 100% renewable electricity on all of our contract logistics sites, and we are going to maintain this. And we're also going to increase our production of clean energy in the future on site. And Gianfranco will tell you more about this, this afternoon. So make sure you stay around for that presentation. And the majority of our contract sites are in Europe, and this is the market with the highest ESG standards. So our team is working to improve the environmental sustainability standards of our existing fulfillment centers as well as setting the standards for new buildings. And we also have very ambitious programs for elimination of plastics and waste and water management. So just in summary, there are probably 4 pillars that we're looking at that are important for driving the decarbonization, sustainable solutions for our customers. Obviously, the first, as I took you through is the customer engagement. The supplier collaboration, the low-carbon fuels, renewable energies, new technologies and, of course, the data analytics. I haven't yet spoken or had really time to talk about suppliers. Of course, the majority of our suppliers, us being asset-light, are contracted to deliver logistic services for our customers. And we are putting in place in all of the transport units, supplier collaboration programs and initiatives for sustainability. And obviously, the size and purchasing power of our company plays in our favor. But the relationship is also changing, and this is what's really interesting as a 3PL provider on sustainable solutions, the relationship with our customer and our supplier is changing. It's moving from transactional to long-term, to partnership, to collaboration and to trust because our customers also want to trust us not just to find the right solutions, but also to find the right partners that will be part of that decarbonization and sustainability agenda. So I'd like now to turn to why we are the best company to work for. Clearly, we already have many things in place, and we have a great track record. So we have over 100 nationalities at Kuehne + Nagel. 41% of the workforce today is women and 24% of our senior management is women. And 15% of our employees are Generation X. We know that the world has radically changed in the last half decade and very much largely due to the COVID-19 pandemic and hybrid working is now the norm. But even before that, we had a digital transformation. And we saw that what we need to do is different skills, bringing different skills, skills as agility, data analytics, and also the way that employees are managing their own career and development is changing. It's much through continuous development. And we also have seen that health, safety and well-being are becoming more important on our overall agenda. We know that a company with high diversity, successful inclusion is going to achieve higher results, and we're going to be able to attract and retain talent and benefit from that, better team cooperation, more ideas. And essentially, we want to be an organization that is going to operate on the speed of trust. And finally, what we're seeing is that our employees are looking for purpose and very much the younger generation. They want tasks that are really tied to a greater purpose, UN development sustainable goals, as an example. They're not just the only ones. I also want to be guided by the UN sustainability goals. And so we want to give them that opportunity. And create an environment where there's a feeling of belonging -- a feeling and a sense of purpose and where that they can contribute in their everyday work to something that they're proud of and that they feel passionate about as individuals as well. We talked about this, this morning, both Stefan and Markus, that one of our goals is to create an extraordinary employee experience because we believe that the employee experience and the customer experience are inextricably linked, and it's also part of our own DNA to be customer-centric. And we're attracting and retaining talent. So just as we're listening to the voice of the market, listening to our customers, we're also listening to our employees. Last year, we invited 25,000 employees to a survey to better understand what was important to them for work. We're sharing those results globally, the best practices, and we're also using that insights to put new things in place that are appealing. And we've refreshed our employer brand. We're targeting the young graduates on social media and we've upgraded our talent sourcing centers. And we've already met our goal, which was 15% intern intake, and we will continue to maintain that and as well the initiatives to attract, nurture and our young talent. And we're also developing people in the new world of work. We were very quick with a post pandemic hybrid team guidance put in place. And we're also putting in place tools where employees can really drive their own learning through a very diverse set of learning, we call it our learning ecosystem. We have a regional talent program for future leaders that's designed to empower high potential employees to grow inside the business. And we're also moving the dial on diversity, equality and inclusion. So we have a number of initiatives that are regional. We also have a diversity and inclusion policy, and we want to double female representation in the top leadership by 2030. So we have initiatives such as our women and logistics leadership network that we're scaling, and we've also rolled out diversity awareness training. On human rights, Kuehne + Nagel is a signatory of the UN Global Compact, and therefore, we respect and adhere to all of the global human rights principles that are issued by the UN. We have a human rights policy and a human rights officer. And our suppliers are also obligated to adhere to the UN principles through our supplier code of conduct. And over 35% of our global workforce is affiliated with collective bargaining agreements. We remain consistent with our journey to no harm. We're implementing trainings, reporting on safe situations, and our safety performance has reached an all-time high and the lost time injury frequency continues to trend downwards. We're piloting mental health and well-being initiatives globally. So that on regional basis that they can be rolled out globally because we want a company culture that goes beyond just the traditional occupational health and safety to really be a company and a culture of overall well-being. So just lastly, we have a strong governance structure to ensure alignment and agility. So as ESG becomes more complex and more important, it's further integrated into the governance. We have a 2-tier management system, consisting of the Board of Directors and the management Board both the CEO and the CFO represent the management board during the quarterly meetings of the Board of Directors. The Board of Directors has oversight of the ESG strategy and performance, and the Management Board is approving the ESG strategy. The Global Head of Strategy has the responsibility to develop and propose a strategy, monitoring and performance reporting, the cross business unit coordination, regional and country level alignment. And just lastly, I want to talk a little bit about the cross collaboration and how important that is within our sector and across sector to ensure common standards. This is extremely important where global industry, a global business, having common standards is very, very important as well as scaling new technologies needs to be done in partnership and in collaboration. So here, you can see we belong to a number of key and international sustainable transport initiatives. Equally, we're very much in line with both ICAO, which is the International Civil Aviation Organization, governing international aviation and the International Maritime Organization, which oversees international shipping and both organizations play a key role in determining the CO2 targets and technology standards of our industry. So I got 23 seconds left. And hopefully, in concluding, I do hope that you now believe that Kuehne + Nagel is an excellent investment, because we have the long-term strategy to turn the transport industry's biggest sustainability challenges into growth opportunities. Thank you.

Thank you, Andrea. Any questions to address to Andrea before the lunch break?

Andrea, one question around governance. And could you remind us if there are any sort of specific targets for management remuneration around ESG, 1 of your sort of loose peers has, I think, 20% tied of remuneration tied to ESG equally split across E, S and G.

Do you want to make a response to that, Stefan, because it's something that I know we're addressing.

Yes. So with the new strategy that we didn't have that in our former target remuneration principle, but with the new strategy focusing on ESG, this will be part of our remuneration principle moving forward into the organization. And as part of all the other cornerstones, right? All the cornerstones will be represented and this one as well.

Any other questions? If not, thanks for your attention thus far. We have lunch, and we'll start again sharp in 1 hour. Thank you. [Break]

And we will now kick off the next 1.5 hours, we will hear from Otto Schacht and also Yngve looking after sea and air. Also in a each session, we'll have adequate time for questions after each speaker. Over to you, Otto.

Good afternoon, everyone. My pleasure to present you now the road map I would have loved, it would have said sea map, but you heard it, it's road map. So the road map of sea logistics. Before I start, I would like to give you a little overview what I will talk about, the lessons of the last 3 years, and these were 3 extreme years. As you know, I will talk about that a little. Where our market stands today, where we, as Kuehne + Nagel seafreight see ourselves right now and then, of course, most important, the road map. And towards the end, I will describe one of our future growth areas, renewable energy, Stefan talked about it. It covers all the business units. I talk about it because some of it started in seafreight, but it will extend into the other business units. But before I begin, I would like to give a couple of thanks to our employees, to our suppliers because they did something outstanding in the last 3 years and which I -- I mean, in this business now since 45 years, I've never seen this before. So I would like to say thank you to the employees, to our suppliers, and of course, also to our customers because also our customers did an amazing job during those 3 years. And -- we build up amazing relationship with customers during these 3 years, and that gives us also a very good foundation for the future. And some of those reflections, those relationships that -- what we built up in those 3 years also, we put into our road map, and you will hear about that. Like I said, the last 3 years, this was in container shipping. The most -- the biggest disruption we have ever seen since Malcom McLean invented the containership in 1956. And some of you remember the 100 vessels waiting in front of L.A. We had the Sea Explorer disruption index created during this time and the peak was 19 -- 18.5 million TEU waiting days worldwide. That was an index for us to see how the disruption was either improving or getting worse and the peak was 1.5 years ago. And that was, of course, something which we -- which we have never seen before. Millions of shipments, millions of shipments had to be rerouted, rebooked and mostly over the phone. So that's one thing we should not forget because at that time, and I will talk later about eTouch, eTouch didn't work during those times because replaced bookings and you didn't get a response from carriers and you had to do everything then over the phone and you only get answers after 1 or 2 weeks. We learned very quickly to adopt during those times. We -- Stefan talked about it, we recruited a lot of people. We lost, unfortunately, also a lot of people because they left the industry. We onboarded a lot of people in these times. And this is the time, and I will also talk about this later, a time when we implemented our global operating system, SeaLOG and separately, we also reorganized the organization into operational care center as a customer service center. So we did 2 things in extremely difficult times. And we managed quite well, as you can see and as you have seen within numbers. But let's look at 2 numbers on here. And I think that's shows you already part of our road map because it looks into the future. Our volume compared to 2019 declined and it declined for 2 reasons deliberately because we walked away from certain business where we didn't get the right margin anymore. And secondly, also what was mentioned by Markus and also by Stefan already earlier, the scarcity of people. So we had to concentrate on the right business with the right margin and that's why we deliberately said we rather do less business with more profitable margins. So this beneficial cargo mix helped us quite a bit. And these learnings, which we have seen here from our margin cargo mix is part of our road map in the future. Where do we stand in the market today? We heard it what our customers are expecting from us, a top experience that's what they expect all over the world and I will talk about that in more detail later on. They expect real-time transparency. That's something which we can provide, where we are very proud of. And when it comes to sustainability. We see now an uptick that also because of the emission trading system in Europe, that there is a higher demand from customers for especially in seafreight for biofuels and better data when it comes to CO2 emissions. Andrea was talking about that earlier, and I come to give you more details on that also later on. When I look at the competition, and I think Stefan mentioned it, and I would like to repeat this year, all forwarders are digital. They are now digital forwarders, all forwarders are digital, some are a little more digital than other forwarders. It is secondly, an extremely fragmented market. And that's part of the reason when we talk about road map when we talk about the SME segment we go into. That's what we all have to understand this market. And during the lunch break, I talked to some of you, this market is so fragmented for one reason these more forwarders provide an extremely good service locally. And that's what we are now targeting. And the ratio carrier forwarder roughly 50-50, that has not changed in the last 3 years, and we do not foresee any major change in this in the coming years. Stefan referred to it when we -- there are 2 carriers out there, Maersk Line and CMA, CMA through the CEVA acquisition said we want to offer to our customers, to our larger customers especially in contract logistics, partially also in airfreight solutions, which we could not offer in the past. But I am pretty relaxed on this when you look at take Maersk as an example, most have already offerings in this respect many years ago. We were -- I was at a Maersk -- at their first Maersk Capital Markets Day many years ago, they invited me and I was speaking there, and they asked 1 investor asked me, either you here as a customer or as a competitor, I said, we are both a customer, a partner of Maersk Line. We are a competitor. And actually, Maersk is also a customer of ours because we manage quite a bit of business for the Maersk Group. So has this material changed over the years? No. And I don't believe this would change in the coming years. So this ratio, roughly 50-50 will remain in my view. And because of this segmentation, because of these hundreds and thousands of small forwarders, we believe that the SME market is for us, the most valuable market also in future. Today, just -- and I think Stefan also mentioned it, our ratio roughly is 50-50 larger accounts versus smaller accounts. And there will be a shift, which I will explain to you. So where do we stand today? What is the most important thing we have implemented our new software. We are done, SeaLOG has been implemented worldwide. We do not have to buy any outside software. So we are there. We are now in the coming years, getting the benefits out of this software. We have segregated our operations into 2 buckets, meaning that we have operational care centers centrally 1 per country, partially also the first ones, 1 per region. And then we have lots of customer service centers. And we have a unique technical platform myKN, and we have within seafreight, something very specific. It's our safe store platform. Some of you heard of this, where we have something extremely unique, which no competitor has, what we can measure reliability where we can measure direct emissions of each container vessels. So we are using this intensively in our discussions with customers, and we will develop this platform even further in the future. And most important, although we are a market leader, we only have 2.5% market share. So we still have ample room to grow. Now I would like to talk about the road map '26, the specifics for Sea Logistics. The initiatives, of course, built on the Same cornerstones, Markus and Stefan already talked about. It's mainly the experience, the Kuehne + Nagel experience part, both employee and customer, the digital ecosystem and ESG and of course, the market potential overall. This is the most important slide for you guys. This slide describes what we want to do different in seafreight in the coming years. This very consistent global service. And the underlined work should have said consistent. And let me explain this a little. The -- first of all, perhaps a general statement, I think -- in this industry, we are in a top forwarding, including also -- I include the ocean carriers. None of these in big players, including Kuehne + Nagel, is offering globally in every branch, a consistent service. We offer good services, but in some branches, very good services, in other branches, not so good services. And that's where the problem is and the potential for the future is. So you -- because you always have in -- especially in seafreight, you always deal with the export and you deal with the importers. So there are always 2 branches involved worldwide. So -- and if you provide in the export side a very good service. And on the import side, a relatively good service. There is a high risk, especially with small customers that you lose the business because the importer will tell his exporter, let's switch -- let's go back to the small forwarder. This is our biggest challenge, but also potential for the future, that we provide globally in every branch in every seafreight branch, airfreight branch, the same kind of service because then we will lose less business. And we will retain a lot of business, especially in the SME segment. So how will we do this? Let's -- you probably will ask, okay, that's easier done than said, it will take a while because we will not do this overnight. This will be a road map. Stefan talked about it, the people part, which is very important, we will measure branches amongst each other. We have not done this well enough. We can see this today. And once we are getting there and I always compare this with other industries, we're much better than this is the hotel industry where you create these kind of standards. So there is a huge potential in this respect, if we do this well. If you look on the right side, this is to what the potential is. The margin of SME business is a fact for the slide, which also Markus showed, there is a much higher earning potential for SME business compared to the very large customers. So that's where we will focus in the future. If we retain these customers, and I think Stefan mentioned a number of 20% to 30%, which we are losing, especially in this segment. If we retain a major portion of this, we have a double effect. First of all, we keep those customers. And automatically, if you provide a better service, you get more money from them because they will not discuss every last $5 with you. So that's where we believe and I'm confident about it. If we provide this extraordinary consistent global service that on average, for my total volume, I can do roughly $50 more per TEU margin. So I have 2 positive effects in this aspect. We have, on top, we have -- we balanced our sales force. Stefan talked about it, we have within the business unit now seafreight sales. We have road freight sales, we have airfreight sales and we have our [key pond] pillars. So each business unit has its own sales force. I have within seafreight the biggest sales force worldwide, selling especially to these SME salespeople. This sales force, we want to increase substantially in the coming years. So in the next 4 years, we will have a far bigger sales force, and we already today have a big one out there, and this will be far bigger. We become far more agile in this respect, we will open because on our new foundation, having central operational care centers, I can go into new markets, I can open new customer service centers with sales people relatively quickly.and penetrate markets which we were not able to penetrate in the past. The U.S. will be our #1 market worldwide, although we are a market leader in this already today, but it becomes -- it's also for our road map in the coming years, our most attractive market, although we are leader there, as I said, small market share still, and we see and it's a lot of lanes, we see potentials there. I just came back from Los Angeles, and we had a global seafreight meeting there and we discovered that there are lanes where we have a 0 presence, and we believe we can become also in these -- those markets a leader. We want to grow, especially in seafreight but also in the other businesses with Japanese and Korean customers. Africa is on our road map. We are today a very small player in Africa. We're building up a presence in Africa now and Africa is a very fast-growing market. And then we have many other smaller lanes where we have small market shares here with this concept can actually drive both higher margins, attack the SME accounts in those markets. In the larger customer segment, those international supply chain customers, we will be more selective than in the past. This has to do also the people part which Markus talked about, I had 2 years ago, 3 years ago, actually, we had a very large global customer wanting to give us all their global business that we manage all their global business. I would have had to hire 260 people to do this. We would have made some money with the account, what we walked away from it, no people, margin too low. And these -- 10 years ago, we probably would have taken that business on board. Today, we would not take this business any more onboard unless we see that we really can make good money with these large accounts. So we become far more selective. Now on the cost side, the digital ecosystem, we will improve our quality, of course, and we believe we can reduce our cost. There's still quite a potential in future to reduce our costs further. Markus made some comments about eTouch. 5 years ago, we talked about it in airfreight. We also had, of course, always eTouch initiatives. We have not communicated them yet enough. We will do this in future customer EDI booking, carrier EDI booking, shipping constructions by -- coming in by EDI. So there is a huge potential. And that potential is probably as big as, even bigger than it's in airfreight, and you will get in future numbers on this on a regular basis from us. The 2 biggest important aspects right now are customer digital bookings coming in, where we are -- if you already 1 number, we are there roughly at 30% today, and we hope to get this, not hope we are very confident by 70% -- '26. We will get this towards 75% and similar on shipping instructions, inbound shipping instructions, which are relatively low, also that we will get up by '26. So these are 2 key initiatives. And then we have our core log is our CRM system. myKN is our external platform, SeaLOG, our internal TMS system. We let these systems in future communicate with each other and that's part of the digital ecosystem. That's part of our eTouch initiative where we can get costs down and improve service to the outside world. ESG, the most important message on ESG is creating transparency for customers. And there, we have a unique offering. I said earlier, we have a platform, Sea Explorer and we have the data for each container vessel worldwide. And as there is a higher and higher demand by customers to create this extreme transparency, our customers starting to ask us, can you please choose between the more sustainable vessels, and that comes in the future, I think, even more -- becomes even more important that you have that option that our operational people can make that option when they place bookings and you need all this data. So we have that data. So -- and this will become a strategic advantage in future. And that, of course, means we can also keep customers longer on board. Secondly, the biofuels, Andrea talked about it. Biofuels becomes similar like the sustainable aviation fuels more and more important. We have seen last year, first customers testing it in the last couple of months. And going forward, I see a nice uptick. It's still low percentages compared to the global volumes. And we will announce in the coming weeks or months, some major deals with some big brands in the world because they will set, I think, also the precedent for the -- for other customers out there. So in summary, the EBIT improvement will come from various segments, SME, keeping SME customers for longer, a higher margin and -- by this, I believe the cost will come down through the digital ecosystem. And with this, I believe we will by '26 achieve a 40% plus conversion rate. And if I go back -- and probably I'm here the oldest in the room. When I started in Kuehne + Nagel seafreight in '97, we had a conversion rate of 20%. Then by 2005, we had 25% and by 2010, '11 we got for the first time above 30%. I'm very confident that by 2026, we will get into the 40-plus range. What comes after that, I will not talk about. So I have 3 minutes left. I have to speed up a little. Now I would like to talk about an exciting growth area, the renewable energy because it will probably be one of the fastest-growing parts in our whole society. The decarbonization means that there will be huge investments in this respect. It's a very complex industry. So it fits our business model. Not easy to enter this business segment when it comes to logistics. And they are, like I said, huge investments planned by governments and by others. This, I think, is one of the -- my favorite slides, as Stefan mentioned, the 50% of electricity generation by 2050 will have to come from renewables. And I think this is only the beginning. Probably it will be even more when we include cement industry, when we include the steel industry, every industry has to decarbonize and this can only come from renewables, either wind or solar, a little hydro. So -- this is the future in respect and the growth is phenomenal in this respect. It's -- like I said, it's a very complex industry. And this graph shows a little what we are up to. It's not only a seafreight product, in sea freight. A lot of these products will be moved by charter vessels, the big turbines but you need then also warehouses to store these blades. So we will have a very close cooperation and there will be quite some growth also in the contract into this area. And afterwards, there will be both enrolled and air, we believe a lot of shipments -- urgent shipments have to be placed in this respect. So this will be -- if we get into a new growth area, we have a bigger customer base in this respect. Just to give you an idea, what numbers are we talking about? There is over $4 trillion CapEx already approved by governments and companies for the next 10 years. And roughly, we estimate this means about $200 billion logistics spend. And that's what we are targeting. So we want to become the major player, a major player in this industry. And of course, I have to say this because I'm a firm believer in this that we are doing also here the right thing that by investing into these renewable energy solutions will help us to align it with our own ESG goals. So one can say this will help our commitment to our customers, to our stakeholders, including our investors, of course. And -- in general, this means this will be also for seafreight, a major contributor to our higher yield and also to our higher long-term conversion rate. So I'm very optimistic to achieve this.

Thank you, Otto. We have plenty of time for Q&A, 20 minutes or so before we move to the next session. First from Muneeba.

Muneeba Kayani, Bank of America. So just going back to your question -- to your comment on customer churn, kind of what sort of customer churn have you seen in the past and how does that vary from large customers to SMEs, is my first question. And then secondly, just in terms of when you're onboarding SMEs. I think previously, it was said that there's no cost on that, but could there be some costs like now and then it evens out a few years later? How should we -- if you could just go back to that kind of onboarding costs?

So the first question. So large customers, we lose relatively seldom because large customers normally do not walk away so fast from you because there is an integration system-wise. So you have on large customers a relatively low churn rate. Whereas on small customers, you have a much, much higher. And that's the problem or the challenge or the potential for our industry, especially also for us because a small customer, you get the small customer on board, you don't do the right implementation and he goes back to his small service provider and says, "I got a better service there". So that is the relationship large versus small. The second question was on the cost. Getting a small customer onboard is through our sales network, we expand our sales network. We -- the costs actually, once you have them onboard, it's actually lower than servicing a very large customer because large customers, the requirements are much higher. So then it depends very much on what environment you operate when you have an environment where you have a lot of problems and of course, also a small customer. In the last 3 years, the workload, the cost for a small customer was as big as for a big customer because nothing worked in the whole environment.

It's Robert Joynson from BNP Paribas Exane. A couple of questions from me, please. So -- you provided a chart which showed that the GP per container from SMEs is about 1.8x higher than non-SMEs. And I noticed in the footnote, that was an average for 2018 to 2022. Was that number significantly different for 2018, 2019 versus the COVID years. And the second question, in Markus' presentation earlier, he teased us a little bit by saying that you consider the targeted $50 increase in the GP per containers to be conservative, could you maybe elaborate on that? Do you agree with that?

No, there is -- we are discussing this. There is no scientific number to this $50 because the difference is from some customers, you get in certain markets, you get $200, $300, $400 more and from some customers, you get $10, $20 more. So we estimate today, if we provide this extremely good service globally, and then you have to take the $50 really on the average worldwide on how many TEUs we handle. Is it a conservative number? By 2026, then we know how much we achieve because number one, I'm confident that we will achieve this consistent service, and then we can prove to you how much did our average margin go up in comparison to the average which we had before. Is it conservative? I would not make a bet today on this.

It's Nikolas with Kepler Cheuvreux. A couple of questions from me as well. First one on the unprofitable volumes that you walk away from, in general, where do they go? And where will they return if ever, in the marketplace, not in your accounts? Secondly, a technical one. When we discuss churn in this context here, are we talking account churn or volume churn? And this is materially different because you said a large account doesn't churn, but what's the volume churn like? And finally, on renewable energies, who are the customers that you want to work with eventually? Are we talking Vestas or like the installation customers? So are you more on the production or the installation side?

So first question -- on the large customers, we walk away, either some competitor takes them because he's happy with the lower margin. And this 1 instance, I was thinking of competitor took this on, he was prepared to do it at a much, much lower margin than we were. So there's always somebody doing it. And so on the commodities, we have seen then it was handled directly by carriers. But what I talked about was more the complex managed business. And on the complex managed business where you need a lot of very well-educated people. And as we have the scarcity globally in future, I rather allocate those people to a business where it can make money, then I cannot make money or not big enough money. So... Secondly, our churn rate. The churn rate is -- when we talk 20%, 30%, it's not on our total volume. It's especially on the small customers. And there, we talk easily. This goes in the hundreds and thousands. So if we can maintain a certain volume there, that has a major impact on the bottom line. Thirdly, the customers we go after all customers in the renewable segment. I'll give you one idea, the renewable segment, it's even the oil majors now. So because Shell, BP are doing a lot in this respect. It's the Vestas of this world. There are so many -- we looked, we analyzed the market. We have hired now a couple of people. We are looking right now at the customer segment of roughly 100 customers. All kinds of industries, suppliers to the wind turbine manufacturers. So it's a very interesting industry. There's no player yet really with a global concept in this respect when it comes to Global Logistics. So that's a positive thing.

[ Vikram ] from Tech Capital. Three questions, if I may. You mentioned this that the SME customers are 1.8x more profitable and that you want to chase more in this or you want to grow in that segment, even hiring salespeople. Why haven't you done that before more aggressively? Is it just a customer onboarding process, which you get now right? Just to understand because it looks quite obvious to me now to do that. First question. And the second is on -- you said you focus on yield and you're willing to walk away from businesses which do not offer the right profitability or you don't take that onboard anymore. But what does that imply for your volume growth assumptions going forward till 2026? And the last one, very quick one. I mean I look at a couple of renewable companies. If I know one thing, barely anybody is earning money in that sector, why should that be different for transportation companies?

So first question on why didn't we do this earlier? Very good question. The company finally embarked on a program to work on this customer experience. So we knew that we had a challenge there. Secondly, also, I would say, pre-COVID and I talk the last 10, 15 years, we took on, and this is what Markus was saying, we took on all kinds of business. We were growing fast. It was helping us. We had enough people. Now, we are actually looking into and say, let's analyze. We have been almost forced also because of the scarcity in the labor market. This is one important aspect that we say we have to become more selective. And secondly, if having this concept of experience globally, we say if we have so many resources only, let's focus on these, and we have a small market share and we can still grow substantially in these. And 10, 15 years ago, we probably would not have had the possibilities to grow in Africa, for instance. And now we target -- when we talk about Africa, we talk especially their also SME accounts. So I foresee in -- by 2026, that our ratio of 50-50 to a high level, larger accounts, smaller accounts will shift forward to 60% smaller accounts and 40% larger accounts. We will see definitely. But we continue to grow. For sure, we will grow because there are such a potential. It's outside of our traditional markets or even inside the traditional ones like the United States. The United States, they can only repeat that the United States will be our #1 market for the over road map, although we are a market leader there, but also there a small market share, huge potential. We will open many more offices in the U.S., getting closer to the customer -- there are so many white spots for us, which we have not even covered yet.

Alex Irving from Bernstein, 2 for me, please. First of all, on volume growth, how do you think about appropriate levels for volume growth. Once you reach that 2019 levels? How should we grow from there? Or is an annualized rate sort of 2019 into the future? Secondly, regarding carrier competition. So we've heard this morning that we're not too worried about carrier competition, but is there any concern that if they start subsidizing the rate, they're able to take volumes away from logistics service providers in that way? And how would you defend against that more aggressive approach if it were to come?

So first on volume growth. Like I said, we will do a more selective growth, but as the potential is to also back, we will grow also in the next 4, 5 years. Target is to be -- perhaps in the past, we said we want to grow double market. Today, I would not come with such a statement anymore. We want to grow with the market and depending whether we have to be more selective, less selective, but we will see also by 2026, a very nice growth in our volumes, for sure with our expansion going in new trade lanes into new markets with our Japanese business, with our Korean business, et cetera. So for sure, you would see a nice growth there. Carrier competition, like I said, the carriers will not go after -- they do not have the capabilities to go after the SME business. And on the larger accounts, it's very often that we offer something which they cannot offer when it comes to seafreight, we manage those accounts with very complex systems. And I take the example, we manage interesting enough for the Maersk Group part of their own business because we offer them a very good IT solution in this respect. So the competition I'm not afraid of, first of all, it keeps us on our toes. We have to make sure that we are always better. And the market is so big, and I do not see any fundamental change in this respect. And if you take CEVA having bought -- having been bought by CMA, CEVA was there before, CEVA is there today. CEVA do their job, they're competing against [ GianFranco ], mainly in contract logistics. It's -- they are not taking our seafreight business away from us because of CEVA.

It's Andy Chu from Deutsche Bank. Could we just have your views, please, on the carrier market, Maersk have broken the agreement on 2M as soon as they could with the 2-year notice period. Are there any sort of implications from that alliance breaking, other alliances breaking? What's your view on sort of what carriers look like going forward?

First of all, I don't think to what I know today, what I heard also I was in Los Angeles now, I talked to a couple of CEOs there. I do not believe this will have an impact on the other alliances. This was a strategic discussion between MSC and Maersk and they had different views how to operate in future. So they decided because they are both big enough to go on their own. Will they go into kind of slot charter agreements not really in alliance, time will tell.

Maybe best not to comment much further on that topic.

It's Sam Bland, JPMorgan. We've seen the freight rates come down to pretty close to where they were before COVID now. Are you -- just want to check, are you happy with all of the sort of financial guidance after 2026, assuming that freight rates stay somewhere close to where they were in 2019. Are you comfortable with the guidance if rates are at that level?

I do not believe that freight rates will remain until 2026 at today's levels, for sure, not. So we will see -- we -- like Markus was talking about it. I'm confident about our 40% plus conversion rate. Whatever happens, we will see during the course of these years, of course, rates coming down, rates will go up again. We have seen how fast rates can go up. So in this respect, that will not have an impact on our target of 40% plus. And globalization will continue. Right now, we see a slowdown because of higher inventories -- and this can come back very quickly already in the second half. We don't know. And -- but this has no long-term impact by '24 for our road map, not at all.

Patrick Creuset from Goldman Sachs. We've talked a lot about 2026, but when you look at 2023, 2024 at current ocean rate levels. How should we think about your gross profit yield in those -- I mean, in between years and perhaps relative to history relative to 2022?

I would not like to speculate on this today because I don't know what will happen in the second half of the marker year. We have seen this, how quickly this can change. So as I said, long term, I'm very confident to achieve what Markus was talking about, about GP that we see at GP in the future of CHF 450 million to CHF 500 million and a cost against it of CHF 250 million to CHF 300 million, and that's what we see long term. In between, we might see changes. What this means towards the second half of this year, early next year. I would not speculate on this today.

Mark Zeck from Stifel. I guess I have 2 questions. But let's see, I'm still trying to get my head around the SME plans. And I guess you said that in prepandemic times it was easy to hire talent or salespeople. And it's much harder right now. Now I guess if you target SME customers who probably have quite a tight relationship with their current freight forwarders, you would need pretty good relationship managers, right? And it's hard to get them. So why this push now, why didn't that happen -- didn't happen to push when there was good sales managers were available like last 5 years or so? And second question, maybe related to that is, I guess, to really measure how successful you are, you need to break down profitability per sales person probably right. And when you said before that you didn't really have the ability to measure profitability in between branches, I guess that was also hard to do versus a view on salespeople. So do you have the visibility right now that you can drill down profitability to every single salesperson, or is it [ difficult ]? And then maybe the last one would be -- and that's not meant to be provocative what your Danish neighbors, they kind of have the -- yes, notorious for this sales approach. So are you just like trying to copy that? Or where do you differ in terms of your future strategy versus your Danish neighbors?

Okay. First of all, first question on again, similar to what we heard here on the left, why only now? And like I said -- we said we can only do this when we go for this global consistent extraordinary service. And the company now decided we and the Board all decided this is our future road map. So especially at those times, it made sense, then I felt very comfortable in saying, let's now target this market. Will we get these people from these salespeople? We will probably recruit the additional salespeople, and we have done it in the last 2 years already, 60%, 70% will come from in-house. So we do not have to get external people for this. So we use people which are today working in customer service centers, would like to be part of this sales team. Then of course, it's going after these small customers, and that's any normal sales job convincing the customer and you have to go in there and try to convince the customer. And we have seen this. We are very successful in this respect. So winning new business was not our problem, retaining it was the bigger problem on the SME. So we know we are very successful in convincing customers to join us, but too many left us so -- and those we want to retain. And if we accelerate this and retain people, then this has a tremendous impact, of course. Last question was on?

Second question was on if you...

Our Danish competitor?

Yes, maybe before that, if you get the visibility on the...

Yes, we have the -- we have -- we know for each salesperson exactly what kind of business he is giving us, what's the GP volume, et cetera. So we have a very detailed analysis. We know this. We are extremely good with KPIs and [indiscernible]. And last question was on our Danish competitor, are we copying him? I would not say copying because what I said earlier, we want to do one thing differently as a company, provide this global consistent service. And I dare to say that none of us, including them, is providing this consistent global service in this whole industry. It doesn't exist yet. So that's why we want to do it differently.

On that note, we're out of time. Thank you Otto. Thanks for the questions. Next up, we have Yngve Ruud, the Head of our Air Logistics business.

So thanks, [indiscernible] for still being able to be behind you. As Stefan said, we have a healthy, friendly competition and maybe next Capital Markets Day 5 years from now, 3 years from now, we're going to change the sequence. So good afternoon. It's a pleasure to have you here. In the next 25 minutes, I will lead you through why we believe we will be successful in our road map 2026. And we will prove to you and I will prove to you that we have been very successful in the last 5 years. And I will spend some time on that today to make sure that everybody understand what kind of transformation we have gone through. I will also give a brief overview of the growth area for healthcare and semicon, which Stefan said has a great potential for the company in the future, is a great growth potential. But before I go into the agenda, I would also like to thank the complete Air Logistics team worldwide for the tremendous effort on the last few years. We'd also like to thank our customers and our suppliers for trusting us in the last few very, very challenging years. To better understand our road map '26, that I would like to touch upon our successful transformation over the last 5 years and includes some proof points, what we think has been a very, very successful execution. I will also talk about healthcare, as I said, and I will also talk about semicon, but also to manage with our expectations. I will not talk about the short-term market trends. I will not talk about our competitive landscape. I will only focus on the midterm strategic plan and our execution. It's all about giving you now today a sense of how we'll achieve sustainable profitable growth with high yields. Our road map is representing the marketplace where we are and the position we are in it. As you all know, we are in an asset-like a logistics provider, and we will continue doing that in the future as well. But our greatest strength is managed market volatility and complexity. Otto talked about market share. We have a market share in Air Logistics of 10%. 10% is a market-leading percentage, but there is ample opportunities for us to grow. Hence, I will not talk about if the market is going up, if the market is going down because the market is so huge, so we will grow whatever the market is doing. As I said, I will give a snapshot on the transformation in the last 5 years. We are the market leader in Air Logistics. And that was our ambition 5 years ago. We put a plan together. We wanted to be the market leader because in our industry, size and scale matters and is due to the investment needed, particularly in the Air Logistics side and the global reach required from our customers. And I think Markus mentioned that, our customer base is 80% global multinationals, 80%. And these customers require a different structure, a different setting. But being a market leader is not only size and tonnage. It's about robust future-proof operation, digital capabilities with world-class TMS. We talked about TMS in-house. We believe we have world-class TMS, scalable solution for specific industries and highly skilled dedicated people. This is encompassing the size, the scale to be a market leader. Let me offer some specifics into these 3 areas of the transformation we made because it is important that we understand because we will build on what we have done, and we have done fundamental changes. We have transformed how we grow our solutions. So we acquired a Quick Group of Companies to enter into the time-critical phase. We have significantly grown our Asia presence and become the market leader in the transpacific trade lane by acquiring Apex. We have solidified our position in perishable by organic growth and by inorganic strategic growth. And we are delivering value, and we're delivering value, for example, in the health care industry, which has been extremely challenged during these critical years that we have behind us. We had transformed how we work and operate. We have expanded our carrier and controlled capacity network through long-term commitments with owned flights, to manage the increased volatility. And that is an important part, we will have to have in mind moving forward. We have also implemented the Air Logistics future operation. So in the pandemic, we completely transformed the way we work. With a model which has the foundation of the new TMS, our AirLOG. This is supporting now the changing working environment and the skills needed. And we have transformed how we use technology and automation. And I think we have talked a lot about eTouch. We have invested a lot of innovation into eTouch. So our road map is an evolution of the last 5 years' transformation. So you will not have the opportunity to ask me why haven't you done it before. I have done it the last 5 years. Now we're going to refine it, and we're going to make it world class. But as we have done the last 5 years, we will include new industry-leading initiatives to ensure that our ambition is going to be reached in 2026. It's easy for me to stand here and say we've been successful. We implemented, everything is so fine. It's a different thing to prove that with facts and figures. And I would like to show you 2 graphs, 2 data sets, that backs up that what we plan to do, we have executed successfully with the outcome we expected. Here, you see 2 slides. KPI development and tons per vertical in total. Nothing new. Markus showed it, but I just want to give some flavor on what you see here. The key number on the left-hand side, KPI report, is not the tonnage development, which has gone from 1.5 million tonnes to 2.2 million tonnes over the last 5 years, but it's the constant yield development. A constant yield development at the same time dramatically increasing the volume, and the yield improvement started way before the pandemic. Yes, we have the peaks over the last 2 years. But as you see from '17 to '19, it's been constantly evolving. And that gives us a great comfort in what we have decided to do and what we will continue to do. As mentioned, size matters, but without the right mix, we will not be able to have the best results. So as the next data set shows you, we have had a stable mix between general cargo, high-yield cargo and perishables. And we understand now over the last few years, what is the correct mix. And as you can see, it's been very stable and will continue to be stable. So with reference to Stefan's and Markus' presentations, with this achievement, what we have done and this foundation we have built, I think we are set for future success. In the next 5 slides, I will describe our ambition, what we want to achieve and provide some insights in the main levers that we will deploy. Our complete road map is, of course, much, much more comprehensive than what we're going to talk about here. And as Markus said, we have a proven way of executing our road map. We have done it before. We will do it again, and we have an agile and flexible way to implement our road map, to cater for market volatility as we have today. As everybody mentioned, the KN experience is the key pillar of our success. And I don't know if you know this, but even our CFO spent a lot of time talking about people, experience and customer experience. I'm very proud, Markus. And -- but I strongly believe this is going to be a major differentiator for us in the future. We will invest in building trust. And as mentioned, you have to build trust, you have to earn trust by extraordinary customer experience. Regarding product delivery, as you see here in the middle and customer service, and I think somebody used the word obvious here before, it seems obvious that we're now going to start to focus on customer service and product delivery. But we're not going to focus on it. We're going to redefine the meaning of world-class customer service and product delivery. And that is something completely different. The dedication we will put in place to customer service is the foundation of growing our market share and improving the yield. We have a global standard for execution to our operation with a global TMS. We have a clear centrally managed strategy. With highly skilled employees, we will ensure global consistency in our product delivery. What is included in the product delivery? A few couple of points, data quality of what we provide to the customer, what the customer provides to us, timely availability of information and scalability. These are 3 points when this is consistently 100% correct globally, we have put a new standard forward as an industry. As Andrea highlighted before, sustainable solutions. Our customers can trust that we will continue to innovate and be the vanguard for sustainable services solution. And we have 3 clearly defined areas. We're going to talk about what we're going to show visibility, avoidance and reduction as well cooperation with partners. And we have strong cooperation with our industry partners and we're signing MOUs with some of our biggest partner to drive sustainability agenda for our industry. And this -- with this, we will continue to set new standards for the industry. Yield protection and optimization. I think we have spent a lot of time today talking about yields and they will spend some time on this as well. An extraordinary customer experience gives us the foundation to maintain our market-leading position, giving us the foundation to keep and maintain the market-leading yield as we have today. But at the same time, we will continue investing in dedicated solution for our customers. And we will invest in, for example, the biopharma for health care. We'll continue investing into engine logistics in aerospace. We will continue investing into semicon logistics in high-tech as they're going to show you a bit later today. By the strong belief we have that world-class product delivery, all of this solution has been certified externally and internally by quality audit and given now the KN quality chain certification. And this is a certification that goes above and beyond any other external certification. And we believe this will be an important differentiating factor. Markus talked about the business mix. I mentioned it previously as well. Here, you see it again, the business mix, where we have a stable perishable mix in a growing volume and perishable is for us a strategic initiative that we will continue growing with. Why? It's the counterbalance in our global capacity management and it add stability and makes us more recession-proof. So as Markus said, if the recession is there, everyone's going to eat, everyone would like to buy flowers, it's still going to be a product and vertical that is going to grow. Efficiencies, we are constantly monitoring operational production costs. And that comes maybe back to one of your questions later about our customer mix and SMEs and large customers because we are monitoring operation production growth, meaning how much is reflected -- so how much is human effort, from a cost point of view, goes into execution of shipments. The more we automate the shipment by eTouch, the more we centralize tasks into global services, the more time our people have to serve customers and the more likely our customer service and customer experience is going to increase. The eTouch start with receiving customer data. And we've been working on this for the last 5 years. And I'm very pleased to report that we have more than 60% of all our shipments is now an online booking, EDI, API or myKN. Our eTouch ambition is very clear and it hasn't changed for the last 5 years, and it will not change for the next 5 years either. Our ambition is to create and run an intelligent digital operation with real-time visibility into every action with fully automated shipments at its core. When we couple that with our pricing engine, supported by artificial intelligence, we will have dynamic pricing on all our spot shipments which, again, is industry-leading. This will further optimize efficiencies and increase our yield. The last piece missing for having our ambition fulfilled when it comes to eTouch is sensors. When that is in place, we stick to our target that we mentioned 5 years ago, that 40% of our shipments will be eTouch shipments, meaning a minimum human intervention and a world-class commercial rate. To optimize our future-proof operation. Because it's transformed and we have to optimize, we have to make it better. We will focus on global consistencies, enabled by enhancement of our TMS, our AirLOG. We will continue to invest into AirLOG and enhance the capabilities. As an asset-light provider, we need to create value for our customers. And I'm just going to give you 2 examples of why do we think we can create additional value. Why do we believe our actions going to drive increased yield? One key lever is global capacity management. You might know or you might not know. But every year, we have more than 3,000 charters, could be 1 way, it could be 2 ways. With a global standardized gateway structure as our main backbone, we can focus now on evolving a point-to-point network design, meaning connecting the dots, meaning connecting this charter and utilizing the capacity much better than we do today. That will drive our trade expense down. It will drive our gross profit up. But it will also drive a consistent, scalable solution for our customer. And it will be a solution which is consistent in any market. Strong markets, slow market, in any market, this will be a solution which is scalable. Second point, M&A. In our road map 2022, we had a clear strategy, defined where do we need to make an M&A, and we have done it. Just to give you a couple of examples. So CFI, a market leader in perishable in U.S., we closed the white spot in U.S. by acquiring CFI. With a Quick Group of Companies, we have expanded our service portfolio. And with Apex, we have expanded capacity and scale. And we will follow the same principles for the next 4 years when it comes to M&A. We will have to make sure we have ensured profitable, long, sustainable profitable growth at the same time protecting the value of what we acquire. Over the next 4 years, we have strengthened our #1 market position, and we deliver more than 40% conversion rate. All cornerstone, as you see here, will contribute. And it's the same structure as you have seen from Markus. But what I have done, I've broken it down to increased or incremental conversion rate in percentage. So the Kuehne + Nagel experience, we believe is going to give 5% to 5% -- 10% to 5% -- 5% to 10% increased conversion rates. Market same. The digital and M&A. So if you take the 2019 baseline, you see how the different cornerstone is going to pay into the increase conversion rate versus the baseline 2019. With this road map and our committed team, I'm confident we will achieve our ambitious goal. Health care. I will give you a brief overview of the focused investment we have done and will do in health care. It's a company-wide focus, and it has tremendous growth potential. Our clear ambition for 2026 is roughly 10% over market estimated around $70 billion addressable spend logistics expense. Where does our confidence come from is how the health care vertical has over delivered the last 5 years. Growth in volume increased financials and new customers have exceeded all expectations. For example, our agility and investment, as Stefan mentioned, allowed us to transport more than 4 billion COVID vaccines doses around the world. And with further investment and expanding this portfolio into a broader customer segment, which I will show you, we aim to further increase our market share. So what exactly do we do in health care? We understand the product life cycle. We are covering the complete product life cycle. By this, we are in a unique position to serve our customers from early discovery and R&D to commercialized development of finished products. Because of this early engagement, we can understand the product needs and design the commercial supply chain, launching activities in a very early stage. These capabilities enable our customers and their patients in a much shorter time frame if the product is approved. Many of you have probably seen the press release with Modena a couple of years ago. We are very proud how we work with Moderna from clinical trials to commercial launch and supplied worldwide with -- and all business units was included. Quickly, 5 key objectives for our next 4 years. Kuehne experience, I don't think I have to go into that anymore. Quality is our differentiator. We're going to launch quality matters with our health gen certification. Global Access, we already today cover 95% of the globe with GXP-approved stations. And we will continue investing to provide a standardized high-quality service for our customers. Customer growth, we're going to increase our segments. We have focused a lot on the pharma segment. Today and tomorrow, we're going to include biopharma, medical devices, diagnostic, animal health and customer health care. M&A partnership. We see opportunities needed to partner and/or acquire companies that can support all aspects in our customer product life cycle. We are excited on continue growing the health care vertical. One thing we will not change is our mindset. For when it matter the most, we launched 5 years ago, it's been a focus internally and externally, this focus on the patient and the way we have changed to work, to talk and do and execute in health care. Next section, semicon. Final section since some over time anyway, is about our newly designed solution for semicon logistics. Based on market demand and feedback from our customers, we have decided to replicate the health care and aerospace success to create a unique quality offering for the semicon supply chain. By 2026, we aim to provide core services for half of the companies, which are involved in the semicon supply chain. We're aiming for CHF 0.5 billion of new business. Semiconductors plays a crucial role in every day in our life today. The demand is constantly increasing due to the digitalized world. Research has shown a 10-day disruption at the semicon fabrication plant can cause a wave of additional disruptions through the entire supply chain, causing delays that could last for almost a year. And I'm quite sure some of you have tried to order a car in the last 6 to 9 months. And I'm not sure if you have got it or I'm not sure if you even know when to get it. And this, of course, creates significant financial losses to everyone involved. Based on this and the changes we see in the market because there is a change that's going on. So as the future shift of production back to western economies, the complexity will increase. And we believe a reliable and high-quality service will be in high demand. The road map is clear. Standard or general logistics offering are not sufficient anymore. This is a clear message we hear. The need for a special logistics solution for semicon supply chain is there. To meet this demand, we have deployed our semicon chain, network of certified services and experts around the world. It will include some of the experience that we have taken from health care and aerospace, like reliability and predictability in this knowledge, which coupled with digital solutions, safety, security and risk mitigation. And we are very excited to bring these services to our customers already today. 3 minutes and 39 seconds, more than measured.

Alex Irving from Bernstein. First of all, over the last 5 years, you've done time critical, you've done Transpac, you're doing semis. What other verticals or geographies would you like to expand them? And then secondly, further on semis. If you do start to do a bit more near-shoring of manufacturing [ EG ] with fabs being built in the U.S. following the U.S. chipset, does that only need less air and more road in the semiconductor vertical? And how are you approaching that from an air freight perspective?

Okay. So from semicon perspective, as I said, this is a company-wide initiative. So it's not just an air freight initiative. So when we build this is for the total KN Group, of all business units. Will it change the need for air freight? I don't think so because we are moving the production from Asia to Western Europe countries. But still, the move from the fabrics will still take place. And there is going to be a huge buildup on these fabrics, and it's going to be -- it's going to take 5 -- 3 to 5 years before this is done. Yes. First question was?

Any other vertical...

So semicon is the main focus. Renewable energy, we're going to be focusing on. Health care, we're going to expand our customer segments. There will be no major move into any verticals because we still haven't taken out the full potential where we are today.

Nikolas with Kepler Cheuvreux. Set of questions surrounding the M&A topic, please. Firstly, on the contribution to the 2026 target. Is it about buying a mix beneficial company? Or is it about raising efficiencies from whatever you've bought if Apex is any guide, it's the first thing, not the second? And on Apex, 2 on them, please. Firstly, you've sold a minority stake to Partners Group. What are your expectations for the outcome of this cooperation, what's to come there? And then finally, I understand that there are still incentive schemes for Apex management in place. What are your expectations for what happens once these run out?

Interesting. So let's go for the first one. The M&A and what are we looking for. As I said, either we close the white spot to increase our capabilities or it creates scale and capacity. So we will not go for efficiency. So it's going to be your point number one. We don't believe in destroying value, we believe in creating value. On Apex, I saw now that Mr. Finance is going to help me.

Let me introduce myself, I'm Mr. Finance. No, I think I also mentioned it in my presentation. So sorry to take the question. I think our cooperation with Partners Group has a very clear focus. Partners Group has access to different targets, targets that probably would not be on our radar, neither would it be for the large investment banks. I think we have made that experience for a long period of time, the excellent experts in the Asian arena and that is very beneficial to us. And last but not least, Partners Group brings a mindset of PEs into our mindset. I mean, we are freight-forwarding operators, right? We are the people that actually know how to move cargo. But in the financial world, we are a little bit less, let's say, experienced. So it does help when somebody joins you in the Board meetings that actually has a different experience on that level and has a top-level view to that and brings different angles of conversations. So it's very fruitful. It's very helpful. We learned a lot. I hope they also learned a little bit from our side. I'm not sure if they are 100% interested in that, but there is a lot of operational, let's say, details they get bothered with when they listen to us. But I think it's one of the most interesting combinations of mindsets and knowledge that we have ever entered.

It's Marc from Stifel. Just on the slide that you showed with the different contributions from those 4 pillars to the conversion rate. On M&A, since the base year is 2019, is it fair to say that with the Apex acquisition, there's not -- most of this contribution is already done or was Apex conversion rate neutral, so to say? And then second, the technology part, I guess, is eTouch. And I guess, here again, like most of this should already been done now. I mean, just from a 2019 base, now 2023, eTouch more or less implemented, I guess, most of the contribution years been done. So the major uplift is then from the 2 other pillars at K+N experience and the market expansion. Did I get that right?

No, you didn't.

Okay.

That's good. eTouch, we have just started. We have done a tremendous work. We have taken out 2 million man hours per year in 2022, but we still don't have a fully eTouch-implemented shipments. There is still human intervention working on the shipment. If you fast forward 3 years, 4 years from now, the concept is that we have people working on exceptions and not on keying in or correcting data because it's automated with the correct data coming in, it automated or auto completed by the system, and we can work on exceptions. And as we know, exceptions in our industry is happening. And when I can have my people working on a shipment calling the customer is, they're Mr. Customer. The shipment is delayed is step care. This is a solution that I created for you, and I will be on time anyway. That's where the big change is going to come. And when you have 40% of these shipments executed eTouch, the conversion rate and Markus showed that slide 5 years ago is not going to be 40%, is going to be completely different because the human effort in that shipment to execute it is next to nothing. So when I show the percentage of the digital ecosystem here, in my mind, is very, very conservative. M&A, when it comes to the Apex, Apex has driven an increased conversion rate with their focused specialized model in Transpacific.

Mark McVicar from Barclays. You've been mentioning customer service as the key to reduce customer churn. So can you just provide a few examples where you think again the world industry is poor on customer service? And secondly, you have been saying that the local free forwarders offer very high quality of service, but I assume that local free forwarders give good quality of service because they are heavy on people and customer service while your strategy is to digitalize. So if you can just help us understanding the difference between the 2 approaches, how -- yes, what's the difference in the strategy, basically, how they can offer better quota service with more -- a lot of people on the customer service team and you guys digitalizing?

Okay. So first question I answered with an example. Second question is the difference between Sea Logistics and Air Logistics. Our customer base is multinational. They look for global reach, they look for consistent and scalable solution. Our SME offering is online offering. I need the SMEs to book online, to go through to take out all the effort to execute the small shipments of 50 kilos, which is, in our model, is clogging the system. Because we have 80% of our customers ship 10 tonnes, 50 tonnes, 100 tonnes per batch because it's planned airfreight. The unplanned airfreight from a small [indiscernible] has to go online. I need all the data. I need all the paperwork ready to execute this in a very efficient manner. The small and medium freight forwarders in our market where we play on the multi-global customers, they are not existing. They don't have the capacity. They don't have the financial strength to buy a charter for CHF 1 million upfront, and they don't have the capability from an IT solution when it comes to providing global access and visibility. So it's completely different environment that we're playing in because we are with the big ones. And we like the big ones and the big ones like us.

It's Sam Bland, JPMorgan. Looking at the sort of components up to the 2026 building blocks, I think market expansion was the biggest for airfreight. But at the same time, I think we just said that SMEs are not such a big part of the story for air freight. And I think you also said that there wasn't going to be that much change between industry verticals. So what's the -- what's behind this big market expansion uplift, if it's not those sort of areas of customer mix?

So the market potential and the percentage you saw is the increased conversion rate. So if we grow with the market and the market for the last 20 years have been growing 4.6% in airfreight. We project it's going to -- or IATA project is going to grow another 4% until 2032. If you have that 2% growth and we're going to grow with the market or a bit above the market, with the mix we have today, meaning our high-yield verticals like health care, which is the yield is just a part -- small part is on the airfreight and the bigger part is the value-added services we're giving. And if you take that mix and project that forward with a 5-year projection, you will see that our yield and conversion rate will increase because of the higher amount of the high-yield commodity. And we used the perishable as the scale and the counterbalance if the market for a certain barrier results.

We have time maybe for one more question, if there are any. Otherwise, last chance? Okay. So Alex?

Can I ask one follow-up?

Sure. Quickly.

Regarding eTouch. So I think it's your -- one of the components of that carrier and supplier communication don't have any cost savings on that yet. When do you expect to make meaningful progress here and how much upside are we playing for, please?

So the carrier communication is something we are driving very hard for the last 5 years, but it takes 2 to tango. And we are supporting and we are doing everything we can to ensure that the carriers that we make the life easy for carriers to communicate with us. So we have a great upside on the carrier communication. Customer communication, as I said, is there already. So that's where from a supplier communication, not only to the airline but also to the truckers to the terminal handling. That's where the biggest upside. That's where sensor is going to play a big part as well when we can start to follow shipments in real time and get -- and the sensor is not only from visibility, but is sensors that give active feedback into the system, so we can trigger the next status, the next task in our system.

Thank you, Yngve. We have a 30-minute break. And we'll be back to pick up with Ruud. Thank you. [Break]

Next 45 minutes, we're going to hear from Hansjoerg Rodi, Head of Road Logistics. Over to you.

Thank you, Chris. Welcome, everybody, also from my side to the afternoon session of the Capital Market Days. It's a pleasure for me to introduce you into the road map '26 for KN Road Logistics. Road Logistics is the foundation of everything we are doing in freight forwarding because there's hardly any transport that doesn't start or end on wheels. So Yngve, Otto, Gianfranco are all my customers, and I like them very much. So agenda. As for my colleagues as well, we will have a look on where do we stand in Road Logistics. Today, our business, our financials and a very short snapshot on the global road market as well. And then the road map 2026, which is the logical consequence out of what we see in our business, in the financials and in the market. And within the road map '26, I will then highlight as well our approach into customs brokerage as a stand-alone business, which is one of the growth areas we have identified as being beneficial for Kuehne+Nagel entirely. So all business units will benefit from our approach into customers brokerage as a stand-alone business. So where do we stand today? Kuehne+Nagel is as active as Road Logistics in 4 out of the 5 management regions we do have. The only region we don't cover is South and Central America. The biggest part of operations, though, is Europe where we operate our own pan-European network that is built on own-managed cross-dock operations. So we display it here is around 150 own cross-dock operations we have across Europe. And we connect these dots in the network by approximately 3,000 international weekly departures. Otto has shown the weekly departures for seafreight as well. It's by far less than what we operate only in Europe on a weekly base. Connected to 2 hubs, where 2 hubs, one is our Eurohub and but [indiscernible] as the other one is the East hub. So that really allows a very seamless and good customer experience in shipping to pan-European shipments from everywhere in Europe to everywhere in Europe. In all other regions, our product offering is asset-light. So we don't have the consolidation through our networks or even partly in Europe through own cartridge operations that we are operating here. So that is true for Middle East and Africa for North America as well as for Middle East and Africa. And then we have 2 product offerings that are completing our offering in Road Logistics is expo and events. So that is the business where we operate in big trade fairs or where we organized big sport events everywhere in the world and then customs brokerage as a stand-alone offer rig, I will come back to that more specifically later in my presentation. 2022 was the most successful year of Road Logistics ever. Our turnover has reached CHF 4 billion, which is a significant size already. Our GP margin is very stable at 33% approximately. So the GP margin that is where we really steer our success in optimizing really on the yield. And by applying a very strict cost management, our conversion rates had meanwhile reached approximately 11%. The EBIT margin to net turnover, which is a very important KPI for us in Road Logistics as well, it's 3.7%, which is a very good achievement in the last year and is industry leading. So we have created a very solid foundation and we have built our strategic plan on this very solid foundation. So sustainable profitability. Growth, especially if we compare '21 to '22 on turnover and on GP. And cost management that has allowed the conversion rate increased even or EBIT increased over proportionally to the increase we have seen on the top line. Our turnover split per region is indicated here as well. So I mentioned Europe with 75% of our business. So that is still in Europe, 15% is North America. We are very small in Asia Pac. We are very small still in Middle East and Africa, both of them approximately 2.5%. This is why we have brought them here together. 5% is customs brokerage already today as a stand-alone business. Let's have a look at the market then. First key takeaway is there is no global market for Road Logistics. It does not exist and the reason is very simple. Trucks are awesome. We like them because they are so flexible, but they can't cross continents because they can't swim and hardly fly. So the global markets are airfreight markets, our sea freight markets. If we really talk about global, Road logistics market are extremely local to a very high extreme. So domestic from A to B is always this exists, will always exist. What we see, however, is more and more a tendency and a trend that the markets become more and more regional. For Europe, that is traditionally and has always been the case. So pan-European group, LTL, FGA networks as this. But we see this coming as well in the smaller regions where we operate. So our market's becoming cross-border. So for example, connecting China with Singapore via a land bridge is connecting South Africa, with the neighboring countries, traffic from Turkey to Iraq. So more the industry is becoming regional, more our markets are becoming cross-border as Road Logistics, but they will always remain within the region. So our go-to-market strategy will always be extremely dedicated to customer needs in specific markets and to the way how in the specific market Road Logistics is operated. So our road map -- and I can't go into each in any detail because it's so diverse in country to country and region to region. Our road map is from a go-to-market strategy, a very regionalized even country-specific market and a high market share is not even existing. The market is tremendously big. As we said, I mean the global market, we even don't know how we could estimate it. But what we can estimate is that in each region, the number of market players, 2 PLs and 3 PLs is more than 1 million. So is scattered, is extremely fragmented, and we have not seen any 2 PL that managed to gain significant market share in all the regions. We have very dominant European players. We have dominant North American players, but we have nobody that really reached a significant market position globally, logically, because our markets are so regional. So high market shares we believe is not really driving success. So out of the view on to the market, if I want you to remember only 2 things. The first is in Road Logistics, global market share does not matter at all. And the second point is the markets, even the regional markets are so big. If we are not focused on what we are doing, there is a high risk that we are lost in complexity. So these are the 2 key challenges we are in when defining our way, our road map as Kuehne+Nagel. And the answers to it, we have given in our road map 2026. First of all, in the choice of becoming an asset-heavy provider, so own trucks, own traders, big fleets that we operate were so staying asset-light, wherever asset-light is a good option. Our choice as Kuehne+Nagel is very clear, we will remain asset-light. Our strength is not operating equipment. Our strength is being flexible and finding good customer solutions. In order to be successful with such a strategic choice, it is extremely important that we put our suppliers -- so our truck drivers that we work with every day into our strategic focus as well. So our answer to the complexity of the market is we will create a KN road ecosystem that allows to connect suppliers as easily as possible into our system that allows our employees to work with the suppliers to define the best possible product offering to our customers. So our suppliers will be considered as part of the KN Road community as well. KN experience in Road Logistics, is customer experience, its employee experience and is a supplier experience that goes with it. And built on this ecosystem that connects suppliers to Kuehne+Nagel that allows our employees to be fully -- continue to be fully engaged, we will deliver solutions that meet complex customer demands and that are tailor-made to the demands that we find in the specific market. We will go fully digital into Middle East and Africa and Asia Pac because our firm belief is it's 2 PL markets, predominantly Africa, Middle East and Asia Pac. So our product offering based on eTrucknow if I was already alluding to it, is we will be the digital freight forwarder in these 2 regions, connecting neighboring countries with seamless experiences. We will, in North America, be the provider of choice for everything that needs more than only finding a truck to be brokered as an [indiscernible] product offering, cross-border offering in the U.S., total logistics management taking over even the freight forwarding departments of our customers and doing this. And Europe, of course, will remain the heart of our operation. We will more invest into a true pan-European product offering in future in order to allow very seamless shipping entirely in Europe from -- so cross-border in Europe, in all the other countries on the clear solutions backed up with a platform solutions that allow suppliers to connect easily with Kuehne + Nagel and that will allow customers to have clear visibility along the entire supply chain if the cargo is shipped with Kuehne + Nagel. In order to be successful on their journey, we will continue our investment into the digital ecosystem. And in order to allow that our people can take their decision based on IT and data, so our vision for our people is that we augment our intelligence by making good use of data. What does that precisely mean? First of all, even though our markets are extremely local and different from a customer requirement point of view. At the end of the day, Road Logistics as well the underlying operational topics that we deal with are with him. We pick up cargo, we ship it and we deliver it. So the base for everything in Road Logistics in order to be most efficient is that we standardize our transport management landscape. We have invested into our own solution, which is roadblock. We have implemented it meanwhile in 42 countries, is highly efficient. The user feedback is extremely positive. So we will further deploy it fast in all -- in most of the countries in Kuehne + Nagel. Based on the TMS, we have -- we connect everything that we have for all our TMS into a cloud-based business intelligence solution that allows fast decision-making based on real-time data. So every day, every moment, we load all our shipments data into the cloud, and we analyze the data and in order for our people then to take the right decision based on that. And thirdly, we will continue to put high efforts into building state-of-the-art platforms. So possibility to connect from a customer side, as well as from a supplier side with Kuehne + Nagel as seamlessly as ever possible. Already today, in Road Logistics, we operate 85% of our shipments. The orders are processed fully digital, either through EDI/API or the digital customers self-entry portal 85%. I think [indiscernible] was at 30%-something, right? So of course, our business is more transactional and faster. So that is 85%, still more to come, and we will continue investing on the entire order to cash process in becoming completely paperless in the first step and then S-eTouch as ever possible as a base for having our people concentrating on, first of all, exception management as well, but secondly, on serving the customers in the best possible way. Technology is an enabler. The driver to success will be our people. So my -- approximately 10,000 Road Logistics colleagues and myself that every day serve the customer that understand the customer needs, that understand the supplier needs, that integrate the suppliers and that work then with the state-of-the-art technology. So we will design and implement regional specific Road Logistics solutions, tailor-made to the regional customer needs based on a very consistent TMS landscape, business intelligence through data and platforms wherever possible in order to better integrate. We have grown last year our top line by 8%. We will continue with this growth pace. So we expect a CAGR for the years to come of 8%. Higher growth rates in North America, Middle East and Africa and Asia Pac due to 2 reasons. Market dynamics are extremely high here, and we are so small. So there is a lot of potential to even further grow. But we will continue growing Europe as well. So in '26, we expect Europe on a turnover split to be at 60%. We expect North America at 20%, Asia Pac and Middle East, Africa each at 5%, and then finally, customs brokerage as a stand-alone business at 10% top line contribution turnover contribution as well. So why do we believe is worth digging into customs brokerage as a stand-alone business? First of all, we are already a significant market player in customs brokerage, especially in North America and Europe. So we have a very solid base that we can start our growth path on. What is stand-alone? Stand-alone is defined as the outsourcing of all import and export customs declaration regardless of the mode of transport and who does the transport. And in a world where international trade is increasing, but regulations are becoming more and more complex, outsourced custom is creating long-term trustworthy partnerships that often can be used as an entry door for transport as well. So it's a very powerful tool to already connect with customers, gain the visibility of all their import and export flows and then use that as an opening door into Road Logistics into Contract Logistics, Sea Logistics and Air Logistics as well. The challenge in customs is even more local than Road Logistics is because you have different regulation from country to country, you have different IT systems that can be used to be connected with their respective customs authorities. But from a customer perspective, our aim is to offer a seamless and a consistent service globally. So in order to do so, we will roll out -- invest into and roll out a customs brokerage platform that will serve as the base for all customs transaction globally in Kuehne + Nagel. Nobody has done so, so far. So we are really a pioneer in this development. But we are extremely convinced that once we have created this operational model, we have a very solid foundation to grow our customer base on a stand-alone business significantly in the year to come. And the more complex customs operations and international trade will become in future, the better for us once we have the platform implemented. So this is a short overview on what we are doing and what we are aiming for in Road Logistics in Kuehne + Nagel in the years to come. Don't forget, we are the foundation of everything that is related to freight forwarding business. And we have a very clear vision, and this is we want to become the most trusted Road Logistics supply chain partner supporting a sustainable future. Thank you very much.

Great. Please raise your hand. Do you have a question, Rob?

Just a couple of questions for me. The first quite a general question. Could you maybe just comment on what you're seeing in terms of just general trucking rates in Europe at the moment, are they normalizing in the same way we're seeing in Air and Sea? Or any thoughts on that? And then the second question, a bit more specific. If we look at volumes coming between Continental Europe and the U.K. Are you kind of seeing an increasing shift towards customers who are kind of aware of the benefits of shipping on the sea by ferry as opposed to kind of driving trucks through the tunnel or using the short straights?

So we have not been in that dimension affected by the disruptions of the supply chain, so the volatility that our colleague -- my colleagues in Air logistics and Sea Logistics have been in. So the business was a little bit -- was more stable. The challenges, however, remain. This is especially in Europe, the regulatory framework that is becoming more and more complex, so mobility packed and everything that is adding to it. So we need to manage it carefully. And then we have a driver shortage in the market. It's not Kuehne + Nagel phenomena. So the one that is best in engaging with the suppliers is to win the one who will win the race at the end of the day because driver shortage will remain. It's nothing that we can change short, short term. And it even increased in the aftermath of what happened to the Russian war with Ukraine. So it's not an easy environment that we are in, that will stay and remain and is our task to find the best solution in this framework. We are investing together with our suppliers, a lot in attracting potential candidates to become a truck driver as well because it's still a very attractive job, we believe, but we need to make much more in order to attract good talent into it, it's not with Kuehne + Nagel, it's with our suppliers, but we do it together with them in order to have access to the best talent pool possible. Then more specific your question, more specifically on how to provide the U.K., the U.K. market. Most of it goes by truck, but whether it goes on through the tunnel or on the ferry, I mean, you need to reach the island, it is always -- this is the complexity here. U.K. specifically was then suffering even more than the continent from the driver shortage in the aftermath of the BREXIT situation. That is normally -- normalizing more and more. We, however, have seen that or from a market perspective, the traffic has tremendously decreased from Europe into U.K.

Alexander from Bernstein, 2 for me, please. First of all, can you comment on your split between your FTL and LTL businesses? And how do you see that evolving? What's the like-for-like impact on your economics both at the gross and operating level? And secondly, regarding your customs service, I saw some news recently about Kuehne + Nagel taking a customer service from WiseTech. Is that this? And if so, what's unique to Kuehne + Nagel about the implementation you're doing for customers, please?

Second question, the answer is yes. So that is the cooperation we have signed together with WiseTech, Kuehne + Nagel and WiseTech to create this platform. Your first question was?

LTL versus FTL.

FTL versus LTL. So today, from our yearly shipments, approximately 85% is cross-docked, so either LTL or groupage. We don't differentiate too much into groupage LTL and FTL. We differentiate until we have a customer order coming in, and then we decide how we operate. And I think that is the way how we should look into our markets as well because our business model is we take everything that a customer produces and then we find the best and most efficient way to produce it, be it an LTL and FTL or groupage.

In your presentation, you haven't mentioned rail at all, even though I'm pretty sure it forms part of your service catalog. And I can imagine why, because you love trucks. You also said that and rail is complicated.

I've not said I love trucks. I said trucks are awesome.

All right. Don't know about locomotives then. The -- so what's holding rail back because it's an obvious ESG improver over a truck, I guess, as long as they're not battery?

Absolutely, yes. Of course. I mean from an ESG perspective, on the long-haul truck is always -- rail is always a solution. It needs long-term planned volumes. Our business is -- we are not in what we would call big FTL. So big volumes that we operate, we are consolidator, and we need flexibility. This is what we are really focused on, and that is why rail comes into play wherever possible, but it's not one of our strategic initiatives today.

It's Marc from Stifel. I guess your colleagues talked a lot about different verticals, growth opportunities in semis versus farmers and then SMEs versus large companies that didn't feature quite heavy in your presentation. So is there any, let's say, strategy on these verticals versus different customer groups that you target or is road just to complex to regional to, yes, to give the strategy here?

I haven't mentioned it because it was covered by my colleagues. So in all the growth areas, the colleagues have presented, Road has significant part into it as well. Where needed, we invest into specific solutions then as well. So even though we say we stay asset-light, we operate one of the biggest pharma -- dedicated pharma fleets in Europe in order to serve our health care customers on road as well. The same will be true on the renewable energy part then as well. Ideally, we take it where we can operate it with our normal system, so to speak. If we need dedicated, we are absolutely open to invest into more dedicated solutions. So we are integral part of everything that we do on the vertical solutions. We cover exactly the same verticals as well that we cover them from a key account management perspective.

Any more questions for Hansjoerg? Okay, in that case, thank you very much, Hansjoerg. And we hand over to Gianfranco.

Thank you,. So definitely last, hopefully, not the least. And thank you very much for being here today. And I just learned that the last run in a relay race called, Chris, you said it's called the finisher, right?

Anchor.

The anchor, right, good. Thank you very much. So I would like also to thank the probably 700 people that are following the event online and from all around the world. So it's a great honor for all of us to be here today, to have you here today and also all these great amount of people following the event. So today, we will go through the roadmap for Contract Logistics, of course, and I will have also the pleasure to give you a little bit more of insight regarding one of the so-called growth area called e-commerce, that is definitely one of the most vibrant dynamic into the logistic concept. A lot has changed. And Markus mentioned in his speech a little bit regarding contract logistics. And it's important also to say as a starting point, that all our ambitious target that we set for Contract Logistics regarding 2022 have been completely met or overachieved. And these thanks to the patient professionals, a commitment of all our colleagues. We tend to forget the bad stuff usually but is almost 24 months ago where our 40,000 colleagues in Contract Logistics continue to work in our centers, putting their mental and physical health at test in order to ensure the delivery of what our customer and all what we need in the time, including mentioned buying 4 billion doses of vaccines. And also it's not more than 12 months ago, was also mentioned by Stefan this morning. When our contract logistics colleagues in Kyiv saw our main facility bombed and completely destroyed at the beginning. And also, in this case, we kept our colleagues safe and supported. My utmost gratitude goes to all of them. So today, we will go through 2 main topics. One is, of course, to show you what was the transformation of Contract Logistics as being mentioned this morning as well in some of your questions. But while we achieve profound, an important transformation, the market also changed. So we will talk about the new market dynamics that we face in Contract Logistics and also about our positioning and how today we represent a unique value proposition to our customers. Right after that, we will talk about the Roadmap 2026 and now the Roadmap presented by Stefan will shape the future of Contract Logistics. And in this Roadmap, I will go through 4 strategic strengths of our plan. So let's start when we say that a lot has been changed in transforming Contract Logistics. I think is without any doubt, the most profound and important transformation of Contract Logistics and is being successfully completed and you are all aware about the financials regarding to that. Let me talk about the top line perspective. From a top line perspective, we have been able to recover in less than 2 years, the impact coming out of the sale of the U.K. drinks business. I'm talking about the recovery of a top line perspective. This event happened in March 2020, 2 weeks before the explosion of the pandemic and account for almost CHF 800 million reduction in our top line. We fully recovered that in less than 2 years. Let me also put a little bit the numbers in a perspective of a competitive environment. If you look at our growth, 7% year-on-year or 13% before FX, that is a very important number also, show our ability to grow above market and the successful implementation rate. It also gives Kuehne + Nagel, a leading position in organic growth. So without any M&A effect when we compare that versus our handful of competitors with a global presence as we do. Let me jump now to the other 2 important elements: EBITDA and return on capital employed, very important in our industry. Our numbers are twice as high as those of our direct competitor. And again, thank you, Markus, where are you? I -- he's not here, because really, we continue to lead also from a conversion perspective and return on capital employed. And every year, we sign new contracts with customers with annualized revenue of roughly CHF 400 million. And I know the number, of course, is very relevant, but I would like to also give you a view about the brands that continue to entrust major strategic contract to us. For example, in the last 2 years only, we signed major relevant contracts with luxury brands like Louis Vuitton, LVMH Group, but not only that, we opened 2 very iconic brands for the new generation, Generation Y, Generation Z. So brands like probably not known to all of us, Jack Muse, [indiscernible]. We signed major contracts with the big consumer brands like Adidas, like Shimano, like Swarovski. Back to the renewable energy initiative, someone asked before, we signed the 2 global agreement for global distribution of spare parts for Vestas and [indiscernible], number 1 and number 2 in renewable energy. To support the -- we signed strategic contract with Pfizer, with J&J, with Bayer, with Sanofi, among the others. So a very vibrant pipeline of opportunity and very successful win rate into the market. If we look at the, what I call it the silent revolution as well, and this is supporting the transformation of the financial is also our operational and commercial footprint. Today, more than 10% of our fulfillment center have what we call high level of automation. That means where robots perform the vast majority of the operational tasks within a very complex system. Most of these installations are digital-native contract, keep this terminology because we will use it like a digital-native contract. But we also use automation of course, in order to retrofit existing operations to gain productivity and throughput. Leading this transformation for Kuehne + Nagel are an exceptional team of professional and state-of-the-art R&D, research and development department with more than 500 technicians that work on the most modern technologies. And we have a call up, of course, also with 5 strategic partners in terms of automation in order to test the future applications. We discussed during the lunch break as well the new heritage in automotive and industrial part of Kuehne + Nagel. This is something in which we are very proud. But at the same time in the last year, we decided to deliberately invest in 2 verticals: 1 is consumer e-commerce and health care. And these 2 vertical represent today 65% of our business. From a geographical standpoint as well, starting from an absolutely undisputed leadership in Europe, we decided to grow mainly organically in the American and Asia continent that represent today 25% of the business each and represent more than that the springboard on which we will develop the next part of our roadmap, in 7 countries, in the American continent and 8 selected countries in Asia. Now we said that we transform and hopefully I've been -- I was able to share some of the indicators with you, but also the market move in the last year. And we have today what I call the new market landscape. Allow me just for the one that are not totally familiar with the Contract Logistics business. We talk always about or mainly about fulfillment and distribution services in domestic scope, but with a fulfillment center with a scope that could move from a national to a regional to a global range. Of course, the seamless integration with my colleagues, as mentioned also by them, is a fundamental part of the success of our proposition. Now let's talk and we talk about some of the market dynamics, right? We talk about near-shoring, reshoring and so forth. Even if we are not able to come to one single statement, it is clear and we know that the sourcing patterns are changing, dramatically changing. We talked about the Semicon before. All of you are aware about what is happening in the fashion industry, no need to say. So we have new models in sourcing. We have new strategy in go-to-market, and you have new technology for what is concerning fulfillment and distribution activity. All these together generate a very rich pipeline of opportunity for a company like us. Why I'm saying that? Because I would like at the end of this page to agree with you that we are in a market that is supported by very positive and structural tailwinds. So one is this reconfiguration of networks that is happening with every single customer that we serve. Then you remember that I mentioned digital native solution. I mentioned that before. This kind of solution, let me share what does it mean. Around 60% of the new contracts that we signed fall into this category, digital native solution. What does it mean? These are not solution that is an overtaking from an existing operator. These are completely new solution designed to fulfill new customer expectation with a high level of automation. So you can also immediately imagine that within this framework, we can express much higher conversion rate. 70% of our projects require an extensive use of automation. Automation is not anymore a nice to have. It's a prerequisite in order to fulfill the market requirements. And not only that, is the only weapon we have in order to cope with the usual constraints of Contract Logistics, namely space and people. So a highly automated operation can run at the same speed and productivity with 50% less people versus a traditional solution and 30% less space utilization. So you can imagine that from that perspective, it becomes extremely appealing. More than 40% of the contracts that we signed have terms that go beyond the usual 5 years term. They cover a period that goes from 10 to 15 years of partnership, reflecting, of course, the longer-term vision of our customers into these solutions. And around 60% of the contracts that we signed represent dedicated solution to our customer with back-to-back agreement on all our major liability, the rent, the lease and the investments. Last but not least, specialization was probably mentioned by Yngve, if I'm not mistaken. Even in Contract Logistics, the centricity and the strategic solution and the strategy around the Contract Logistics solution is becoming so high that there is very little space left to improvisation and to a generalistic approach. So what has been mentioned by Yngve on Semicon, is the same application in the industry vertical where we operate. And the market continues to be extremely fragmented, as mentioned also by Hansjoerg before. So hopefully, at the end of this page, we understand that for a company like Kuehne + Nagel in Contract Logistics is a very interesting environment where to play in the next years. And staying very humble, we also know what makes us special in the marketplace. And in all honesty, it's not always very easy to understand and to recognize what makes you special. And in that perspective, I think our customers have been very helpful to do that. First of all, our people. I was also wondering in an increasingly tech-dominated market, is saying that people make the difference a contradiction, obviously, it's not, and continue to be our first point of differentiation. The engagement model that we have today with the customers scale up and someone said Contract Logistics before pandemic and after pandemic, I don't remember during the lunch break. The engagement model that we have today is at the sea level in every single contract that we manage. And not only that, the effort that our people have to put into design and implementation today is as much or even higher than in running the operation. And also the evolution of competencies that we have in our center, what we call the digital dexterity is one of the major challenge and one of the area where we excel. So we master complexity. We invest more than 600,000 hours of training in the company from leadership and technical skill in order to continue to foster our team. Technology. Well, someone said we love trucks. No, you said what?

Trucks are awesome.

Trucks are awesome. We say in technology, we do not love robots. We have the best solution that we can offer to our customers that are sustainable today and tomorrow. Most of our solutions are so called robot agnostic, meaning we have 5 global players specialized on different technology that plays with us and with them, we create the best solution for our customer. And now customer and people centricity. We were the first, and I think very courageous to deliberately decide to import proven consumer metrics into the Contract Logistics environment. When we start in 2018, people look at us say, okay, probably will fail. And at the beginning was not easy. We will talk about that, and you have a preview of the numbers this morning with Stefan. Today, we received 15,000 active response per year from both our customers and our people. And all these active response constantly feed our relentless focus in improving our service proposition and our working environment in Contract Logistics. I used to say to my IT colleagues that this is the most precious database that we have to take care of. And the interesting part is that every year, we have 15,000 new refresh answers. And last but not least, I said the specialization as the last aspect of our uniqueness in the market. We continue to focus on 3 specific industry vertical with growing market dynamics and virtually unlimited possibilities for upscaling our services. And our ability to understand the market dynamics allow us to go above and beyond the pure logistics concept and the pure logistics service and becoming an active part of this strategic decision process of our customers. Now hopefully, we went a little bit about the transformation. We talk about the market evolution, and we talk about our unique proposition in the market. I would like now, as the last part of my presentation, to highlight what we want to do as part of the Roadmap '26 and how we will make it. So what we want to do? We want to continue to deliver an above-market turnover growth and the conversion rate improvement. So very important statements on both our top line and bottom line. About the market, I mentioned already a lot of dynamics. Allow me to add a couple of points. Fewer and fewer customers will be technically and financially ready to run their logistics. These will boost outsourcing rate across the entire work, probably less visible in Europe where we have already a very good level of outsourcing, more visible in Asia. At the same time, very similar dynamic we reflect into our competitive environment, where the entry barrier of Contract Logistics are going up and up. The organic growth that we want to achieve at 8% is totally in our reach without any risk of jeopardizing implementation in our customer promises. This is above market and will allow us also to make a very interesting point that is to choose the customer we want to develop and partner with. This will be based on alignment of values, alignment of expectation and value generation and also based on the fact it avoid to undertake necessary risk in Contract Logistics in our company and we perfectly know what we mean with that. M&A as well, you remember the table presented by Markus as well, will play a role in our future development and again, will be a strategic support to our geographical development. I mentioned before where we want to grow faster than average and also our vertical development. All these strategic actions will not only provide top line growth, but also another structural improvement in our conversion rate, continue to strengthen our positioning of leadership also in shareholder returns. The last part of my presentation will be on 4 actions that you see on the other part of the slide that are the greatest strengths of our plan. The first is on Kuehne + Nagel experience. I know that you heard a lot about that, but also our contribution to that as the clear metric to improve loyalty and win rate, a very organized approach to our mix and to our products. And last but not least, we will talk about future-ready operations. So let's move to the first one. I'm sure that you are already familiar with this slide. Isn't it? You are. Correct. So this is a very important slide that has been presented by Stefan this morning. And behind these numbers, there is a huge, huge work of all the team across the last 5 years. So when we talk about customer experience, we talk about one of the most tangible parameter to support healthy and profitable growth of the company. As I mentioned, we pioneered the use of obsessive and rigorous measurement in the world of Contract Logistics. And as you can immediately see, there is a strong correlation between NPS retention and operating margin. I don't think it's needed to add anything on that. But as any service company, nothing is perfect. And also out of this 15,000 feedback that we have received, we received very clear indication in how to improve our product delivery, as mentioned also by Yngve. This is our responsibility to constantly improve our product delivery. And customers said, you have to simplify, you have to be more agile, you have to be faster. Not a big news. But behind this indication, there are hundreds and hundreds of people working on our products and on our delivery in order to make in the onboarding in Contract Logistics, the best experience for our customer as well. Now let me go to another fundamental part of our roadmap. And I think, again, I'm sure that in 2026, I will be able to tell you we were the first in Contract Logistics to introduce this concept. So in Contract Logistics, again, you have to imagine that the level of satisfaction of our customer is very high. We talk about 99-plus percent of customer satisfaction. Usually, when we operate with e-commerce players, we can receive like 30,000, 40,000 orders in a day, and we discuss if there is one missing. We discussed about that order because there is a customer and there is an expectation that was missed. So in this environment, you can say, what can you improve? Of course, we said product delivery is a must. But where we see, again, a unique opportunity of development for us is to move from a customer satisfaction to customer enablement. In other words, not only to focus our attention and do what our customers are expecting us to do, but moving our attention from a typical inside-out approach to outside-out, how can we can become a driver of the success, commercial success of our customer. You can imagine if we are able to enter in this kind of discussion with our customer, and they are pushing us to do that, new value driver can be generated out of that. So this is our major effort, and I'm sure that we will be, again, pioneer in this direction. Let's move now to our mix. Relentless focus on premium industry. Consumer e-commerce and health care will continue to gain additional share in our portfolio, thanks to the combined effect of new product offering, we will talk after that and new customer wins. And we represent today, we are at 65%. We expect to reach 75% to 80% by 2026. Why that? In this industry vertical, the so-called value-added customization where we can express better margin represent up to 20% of our sales. So it is clear that for us, this represents our premium verticals. Asia was mentioned. Our organic growth in Asia that I mentioned at the beginning, generate a very rich pipeline of existing Asian-based customer that we will continue to follow not only in their Asian development, but also supporting that in new market strategy for Europe and for the U.S. And I said potential M&A as well, focused on premium industry vertical, U.S. and selected Asian countries. Now moving to the products. Also, the product that we expect to launch in the market are very consistent with our strategy in the vertical. So we will talk about the e-commerce products in the last part of my presentation, where I will talk about the group development of e-commerce, and in health care as well, just to support what has been presented by Yngve as well. We will continue to focus with the aim to double our presence in the health care sector, exactly in line with the group perspective. To do that, we will invest in a selected number of countries with new entry strategy supported by M&A or by innovative agreement that we are discussing with customers. We will develop our services, focus on quality is a must, as we mentioned before. Also, our integrated logistics service today is the first product serving the health care industry with 80% of the top 10 pharma working with us in integrated logistics. And of course, also, you are all aware about the spin-off of the big pharma of the Consumer Health division. This is a trend. Interesting enough, you would say, what has to do with that? Imagine that for this big pharma, all the supply chain were run as one, now they are splitting with 2 different needs, focus and application. So for us, it's again, a very interesting opportunity of growth. Let me move to the last point that is future-ready operation. Our operation must continue to demonstrate the strength needed to capitalize on market dynamics. We are leading operational excellence, and we will continue to do because we loved to do that. Automation is becoming omnipresent. And in the last -- in the next 5 years, we expect to reach a level in which automation is just what we do normally. We expect to double our number of fulfillment center, and another interesting number to share with you. In January 2024, we will put into operation, probably our most advanced fulfillment center where, for the first time in our history, we will have a ratio between humans to robots 1-to-1. We will have 700 humans and 700 robots working under the same roof. So this will be a very interesting mark, and I'm sure that more will come in the years to come. Not only that, of course, our solution must be designed to work today and to be flexible for tomorrow. We do not know what will be the change of the go-to-market strategy. And we saw what happened in the e-commerce dynamics during the pandemic. Everybody told will be -- everything will be digital, right? E-commerce, we take 90% of the retail sales. It didn't happen. But how many customers started working on that idea. So we must maintain flexibility also when we talk about automation. And last but not least, we all know you can have the best car, but if you don't have a driver, it does not move. So for us, the very big success is how we drive the automation. And this is because we will continue to rely on smart human supporting by the best artificial intelligence application. So let me come to the key takeaways of my presentation. I think that we can all agree that we are in a quite interesting market with structural positive dynamics and we will continue to capitalize on our unique asset. We know what we have to do. And again, we are ready and extremely confident that also this time, we will achieve the ambitious target. And one of the ambitious target is exactly the growth in e-commerce and allow me to complete my presentation on a couple of slides on that. So we have a clear ambition by 2026 to achieve additional CHF 0.5 billion of business in e-commerce with a strong leverage on SME. What did we do? So far, we have been extremely active and extremely successful, focusing on specific product categories, the top categories in e-commerce. So you see clothing, shoes, consumer electronic, personal care, and also on very clear archetypes of customer, big brands, retailers and marketplaces. On this specific area, we have been extremely successful, all business units. And we know that while some marketplaces are suffering today some dynamics, the brands continue to invest on e-commerce solution for the future. What are we going to do? As mentioned by Otto, we have a capital of SME customers that we serve today already in all the inbound park. We leave them along in the moment in which they reach destination. And we are not providing today any service for what is concerning fulfillment center, Last Mile integration and cross border. This is the area on which we will focus in the next year. SME today represent the most dynamic area regarding e-commerce. They grew 10x in the last 5 years, represent 15% of the e-commerce sales, and they have absolute high appetite to go international. So our product development will be to sustain our proposition and to complete the offer that we call from origin to couch. So thank you very much for your attention. I am at the end of the presentation, and I leave space now to your questions. Thank you.

Thanks, Gianfranco. Any questions?

Alexander from Bernstein, 2 for me, please. First of all, earlier in your presentation, I think you said 70% of your projects require extensive automation. What about the other 30%? What sort of business is that? And then secondly, how is your business split between single tenant and multi-tenant warehouses? How do you see that evolving? And what's the logic behind?

Correct. So the 70% -- what happens to the other 30%? The other -- when I say high utilization of automation means very complex systems together. So I would say also 100% of the contracts today have a level of automation. But when I talk about high level, it's exactly when I said robots performed a vast majority. So it's not one single automation is a system that we put in place, this is the 70% I was focusing on. As I said, 60% of our contracts today are back to back. We will continue to focus on that because it's an environment, of course, that reduce our exposure. And we expect this to continue and also represent probably our portfolio in the future.

Marc?

It's Marc from Stifel. We hope for that in Ocean, Maersk is not, let's say, considered a serious threat in terms of moving into the freight forwarding space. I guess, Maersk's strategy includes some fulfillment centers and e-commerce and some business in logistics, Contract Logistics. Do you think that they will pose a threat to your business? Or is there also an explanation for your division why Maersk is not a serious contender?

You should ask them. Thank you.

Any other questions? One in the back.

Michael, Vontobel. You mentioned the conversion rate increasing 80 to 100 basis points. And I was wondering what is really driving that? How important is the increased level of highly automated warehouses contributing to that? Or is it the increased mix of SME customers? What is really driving that?

Sure. Of course, it's a combination of the events. So the automation -- allow me to be a little bit more specific. The automation on digital native contract is a new contract that this starts like it starts. So where we retrofit existing operation, we have the major effect of productivity because we retrofit an operation, and we have productivity improvement. So that is one factor. And of course, the focus on industry vertical that allow us to express a higher percentage of value-added services. So just to share a number with some premium brands, the time and the money attached just to the packaging moment, preparing the packaging for the -- is more expensive than the packing and the stocking. So these are all the value-added activity that generate areas of growth and better conversion rate as well. So it's a combination of product mix and, of course, automation. The trade that you mentioned before.

Any further questions? Okay. So thank you, Gianfranco.

Thank you very much.

I'm sorry. One last one.

One. No worries. I'm sorry.

I think you've mentioned earlier that you're also thinking about adding Last Mile type of services within your e-commerce offering. So can you expand a little bit more on that? What's the strategy? What are you doing at the moment? And what's the profit?

Absolutely. So just -- I think it's a very valid question because we are not planning to enter directly into investment in Last Mile network because this is not our business, as already mentioned by -- so when we talk about integration of Last Mile, particularly for SME is when you put this service in an integrated platform, I said from origin to couch, it becomes a component of the service that we will offer. So where we will work is on the platform of visibility and integration of the providers, but definitely not in creating our own network of Last Mile. Is that clear? Good. Thank you.

Thanks again, Gianfranco. We'll hand it over to Stefan for some closing remarks and finishing a few minutes early as well. Thanks.

So thank you very much to my leadership colleagues for these inspiring speeches. You see it was -- almost everything has been pretty much aligned. Thank you again. Thank you very much for the support team. Technology has worked properly yesterday in the rehearsal and as well today. Thank you very much to you for listening. Hopefully, you have learned how we are going to manage the future more insights. We meet each other in 15 minutes from now at the reception. So we have a little bit of, we say, get together in a couple of minutes. Trust is important for us. Hopefully, as well, you have learned and you understand that we will build even trust more with you and with the investor community. We are open for any questions in the next 30 or 60 minutes or so. Thank you again for joining. Thank you very much as well for joining the webcast and see you in a couple of minutes.