Wallenius Wilhelmsen ASA (WAWI) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to our Capital Markets Day. It's been a few years since we last had one back in 2019. My name is Anders Karlsen. I'm your host today. I'm Head of Investor Relations at Wallenius Wilhelmsen. If you watch our share price right now, it's down. It's not because we have this event, but it's because we're trading ex-dividend. So as shareholders, you have a good gift waiting for you today. On that note, what are we going to do today? We're going to hear a little bit about our ambitions. We're going to learn a little bit about our terminals or, a lot, I hope. We're going to have some coffee. We're going to talk about our new ships, the Shaper Class, and how that is going to impact our business. We're going to have a little bit about capital allocation. And a bit of coffee, again, talking about our customers, how we think that we are important to them. We'll have a market outlook by Hesnes Shipping, a bit of a Q&A with Lasse and wrap up, and then we'll have some lunch. On that note, I'm happy to introduce our CEO, Lasse Kristoffersen. Welcome to the stage.

Thank you, Anders. Good morning, and thank you so much for showing up. It's a full audience as far as I can see and also hello to the people on the stream. I have a couple of good news for you. One is for the analysts that came this morning, what is the big news today. We have a small one, right? So just wait for it, but it's not maybe what you expect, but let's see. The other one is you will not see much on me. Normally, I present a lot of these presentation. But today, we really want you to see the team and who are out there running the operations, talking to the customers, counting the beans and ordering the ships. So you will meet a wide range of our team today. So I just wanted to start with the background and the context. Wallenius Wilhelmsen is doing extremely well financially. 2023 was our best year in history. We have publicly stated several times that 2024 will be somewhat better than 2023. We have not corrected that so you can still believe in that statement. We delivered a strong Q1, in our view, a very strong Q2. And also, we are now sharing that with our shareholders and paying out an extraordinary dividend this year. We have the full 2023 dividend and also adding to that a dividend for first half of 2024. So the total dividend paid out to our shareholders this year is $738 million, pretty much equal to what we had as cash to equity over the last 12 months. So we are coming from a position of strength financially, of course, helped by the market, but even more helped by an incredible team of 12,000 people at sea, in terminals, in processing centers, in offices around the world, and that's what you will learn more about today. We are part of industries that are changing extremely fast. Around 30% of our book of business are large industrial companies working with machines, tractors, excavators or even battery systems and 70%, roundabout, you will get more details from Pia later, are automotives and cars. In particular, in the car area, there is a significant change going on. One is the fact that cars are getting connected, also the fact that they are becoming electric enables new players to come to the market. And if you want to read one article to understand what's going on in our industry, read the interview with the Ford CEO, in Wall Street Journal. I think it was last week, Mike? Where he had been to China and looked on Chinese products. And you could wonder, why does Ford CEO wait until 2023 to go to China, when that's the cradle of what's happening in the world? And he came back shocked. Partly, of course, because of EVs, they have an incredible advantage on EVs, and they have spent 20 years becoming fully integrated on EVs. BYD are doing everything in their cars. I've told that there are 2 things they don't do, that's glass and rubber and they are now putting up a factory for glass. So they're probably no to rubber, totally integrated. The other piece that he commented is that they are incredible on computing and the software and technology put into the car much better products at a much lower cost. So if Ford is not able to totally reinvent themselves, the Chinese will take them out. And then, of course, there are the last element coming in geopolitics. Well, they will not be able to compete freely in the world. But imagine this scenario. EU closes its borders and says that no Chinese cars are allowed in this market, we're going to protect our markets. So we are not competitive, we're protecting our market. Will they then be competitive in all other markets in Europe? Of course, not. And of course, that's not sustainable. And that's why Stellantis' CEO, who is probably the company most affected by Chinese competition says, "We cannot close the borders, we need to keep on competing and use this to make ourselves competitive." So the change is going on in the industry around us, in the industry dimension, is never seen before on the auto side. Adding to that, a huge concern from us, as public, but not least for the industry, how do we decarbonize fast enough and cheapest possible. And we have customers now that are already talking to us about how can we put up services end-to-end 2027, which are net zero. We have customers that tell us that we are afraid of what the customer would say when they figure out what you put into those vessels that bring that car to California. So we have a massive change going on around us and in a time of change, you can make 2 strategies: One is to adapt, wait and adjust. The other one is to move in, shape and create a position for yourself. At Wallenius Wilhelmsen, we are shapers. We believe in shaping the future of downstream logistics of our customers. And that's why we have said that our strategy and our ambition is not to be a shipping company or a logistics company, our strategy is to become the integrated supply chain partner for our customers. So when Polestar delivered my car Friday morning on their delivery center, basically, we are the one connecting their factory to me as a consumer. When you go and pick up a NIO, if somewhere you do that next week, we pick it up inside the factory in China, we bring it down to the terminal, which we are part of. We bring it to Zeebrugge, we process it. We bring it to Bremerhaven, in-sourcing in transport. We put it on a truck. We do that. We're bringing up to distribution center and what happens in the distribution center by NIO people is basically to give you the key. These are the business models that we see new players are coming with, and existing players are looking up to. We will try to give you a better insight on how do we put this together because it's very important to understand our logistics capabilities, to understand also our strategic ambition. And we will, of course, not be a fully integrated supply chain partners for all the companies in the world. We will not be the same thing for all. We will still be a huge shipping company, but for those who need our help to drive down costs, increase resilience and to take out carbon, we are there as their partner. So Mike will talk to you about the logistics part and explain the elements of what we have, the assets we have and what we do. Morten will talk to you about our fleet, how we think around fleet and how do we position ourselves to continue to be the #1 in terms of cost leadership in our industry. And also, Lene will talk about how do we think the same and do the same when it comes to decarbonization and how do we make sure that we get an industry that pays for decarbonization. If we were to pick up that bill, we will be bankrupt in a few years. Yearly, we pay roughly $1 billion worth of fuel cost. We pass this on to the customers. We always have. We will in the future. That fuel bill, if we're optimistic, will go up to maybe $2 billion, $2.5 billion on green fuels. We will continue to push that fuel bill onwards to our customers, and they have to push it over to their customers, us. Lene will talk more about that. Torbjorn will talk about capital allocation. We have a very strong financial position. He will show you a bit more on how we think around on allocating that. He will show how we work with customers, our customer base look like and also not least, how we work with customers to bring them on our journey. Market outlook by Hesnes and then I'll be back for a quick summary. So with that, I thank you and hand you over to you, Anders.

Thank you, Lasse. I have a quick question for you before you leave the stage, but that was a very good overview of what we can expect of today. But if you -- if there is one thing that you want the audience to bring back when they leave today, what would that be?

Well, I truly believe that there's only one company in the world that can provide that integrated service that I talked about with NIO and the same goes with John Deere into Brazil. We do the same there. And we believe that, that can create massive value for our customers.

Thank you. Thank you, Lasse. And before we welcome our next speaker, we have another small video that we would like to show to you, and it gives a little bit of oversight of what is happening. [Presentation]

With that, I'd like to welcome Mike Hynekamp to the stage. One of the things I used to wonder about Wallenius Wilhelmsen when I was an analyst was, what the heck is logistics? Mike is probably the best to tell us about that. He just recently transferred from being the Head of Logistics to being our new Chief Strategy and Corporate Development Officer. But you've also headed up shipping, so among the people from Wallenius Wilhelmsen here today, Mike is, by far, the most experienced. So with that, hopefully, you'll do a helicopter view of what is logistics, and you're going to leave a wiser person when you go from here.

Thank you, Anders, and thank you, Lasse. Thank you for everyone attending this morning, and I'm not sure I can live up to all those expectations that have been set there, but I'll do my best to try to convey that. So what we want to do, at least for the 45 minutes we have this morning is speak to you a little bit about logistics itself. What is it that we do? How do we deliver the services for logistics and our customers? Where are we in the world and what kind of network do we have to deliver those services and then spend some time really on why. Why are we involved in this logistics business? Why is it important to our customers? Why does it create, in our view, incremental value towards the ambition and the strategy of being an integrated service provider for our customers? And so it will be important to as you -- we go through the journey that we convey to you, again, what are we doing, and I'll go into some granular detail about that. There's a lot of similarities, but there's probably a lot you don't yet understand or know. And I hope at the end of this, you have a better understanding of what we do as far as the logistics organization connected into that vision. So briefly, I want to talk about some of the numbers that drive logistics and how we have a comprehensive network globally that services the customers that we have in our portfolio today. The first number I'll draw to your attention to on this slide is actually a wrong number. It's 7,687. And why do I say that's wrong in number of employees? Because it changes every day. The nature of our business in logistics is that we are a scalable organization. We're able to scale the labor to meet the expectations of our volumes and what happens in our business and so as a result of that, that number changes on a regular basis. That is also the most important number on the screen because it's the most important asset we have in the company. Much like ships are to the capital-intensive business of shipping, our employees are our most important asset, and first and foremost, our focus for them is to come to work and leave work safely every day. Secondly is to be sure that they're delivering the right capabilities and qualities in terms of training to do those services, which are quite extensive and we'll go through that in a bit. And I think lastly, is just to be sure that we're an employer of choice. Because at the end of the day, none of the other numbers that appear on the screen actually mean much if we don't have the right skill set and employees in the organization. That, coupled with the other numbers you see up here in terms of the physical footprint we have, the infrastructure we have around having 8 terminals and 66 different equipment processing or vehicle processing centers, and again, I'll come back to what that means is being specifically equipment processing or vehicle processing. And we have geographical representation in 28 countries around the world based on that network. So all of that when it comes together, drives what you see here and we're quite pleased about, and these are 2023 numbers, over $1 billion in revenue. We're quite pleased with the results that we've seen improvements in our EBITDA at a 15% level and we represent roughly 10% of the total enterprise-wide EBITDA of the organization as the logistics footprint itself. So maybe just walking through a little bit why logistics is an integral part of the value chain, both for ourselves and for our customers. We are touching a host of different components in the supply chain of the organizations and the customers that we're trying to solve solutions for. We are actually in factories and at the factory line itself. And from that standpoint, we're actually then taking it into in-plant processing centers in some instances or in port processing centers. Once that is actually handled, we're moving it into a carrier network that delivers those products either to their dealer network or to their fleet customers. Then, of course, there's the connection for our sea-based transportation, where we're actually port of load or port of discharge for our shipping business. So the terminal operations are either port of load connecting into stevedoring those units, bringing them into the ships and then discharging them again in the port of discharge. Also, what can happen is then we will have implant processing and/or import processing centers around the world. So if those cars are being used on the deep-sea trade, we can process both automobiles or equipment in-port or we will do it at the plant location and invariably then connect up through data to a lot of the inland transportation providers that our customers may have. And in some instances, that we have. So we have a very small footprint of inland transportation, a small truck fleet in North America, roughly 150 trucks that handles specialized cargo, which is High and Heavy equipment, big, heavy out-of-gauge cargo that's very specific to the high-end heavy business that we handle. In addition to what we do in terms of physical assets, though, we do have a very small freight-forwarding business. We also have some technology businesses that handle things like remarketing of cars and heavy project movements in a company called ALS. So when you break down those numbers that I shared earlier just in terms of revenue, about 50% of all the revenue that we generate from 2023 was out of our automotive sector, which is our automotive processing business itself. On -- the rest is the 50% that is making up the remainder. High and Heavy, you'll see there, are a smaller amount of our total revenue, but the margins are quite better. And the reason they're better is because of the intricacy of the type of work that we do in the High and Heavy business in equipment processing, and I will come back to what I mean by that. Of course, in Terminals, our connectivity to our overall shipping business and then the remaining pieces are Inland transportation. And you'll notice at the bottom there that the Inland transportation margins are not extremely high. But it is a hand-in-glove connection to our High and Heavy business. So many times, the things we're doing inside of our equipment processing centers are connected to the High and Heavy shipping network or Inland transportation network and trucking that we have. So those businesses work quite closely together, and our customers look to those solutions to have both the processing capability and having the trucking capability to dray those vehicles around in terms of where they need to be distributed. Where we are located? We talked a little bit earlier about having the 8 terminals, having the 66 processing centers. And you can see that our global footprint is relatively well represented around the world. We -- if I start in Oceania or down in Australia, it's mostly equipment processing. And you can see the blue dot or gray dot is really where our equipment processing centers are with one terminal. In Asia, we have terminal representation inside of Korea as well as 2 joint ventures in China. Then we move into Europe, we were represented by both equipment processing, vehicle processing and terminals. And then you'll see this heavy concentration in North America, and we are certainly geographically concentrated in North America, particularly in the automotive processing space, both in plants and in ports. And I'll get into more details of each of those. So I want to talk a little bit about why? So why do we get involved in this? Why do customers seek solutions like this from Wallenius Wilhelmsen? Why do we represent something that's value-accretive or additive for them? It really falls along 4 dimensions. It's about having a one-stop shop. It's about the ability to bring flexibility, scale and scope. The one-stop shop idea is the fact that we are able to connect what we do from an integrated provider, to Lasse's example earlier, for our customer all the way through to their point of distribution. And the finished vehicle logistics market is highly fragmented. So for many of these new startups as well as some of the existing OEMs or original equipment manufacturers, they are looking for solutions that provide one integrated solution for them. Flexibility as being the second piece of this. Flexibility is really about being able to address, particularly in the High and Heavy space, the ability to optimize and accessorize and customize vehicles or equipment closest to the end consumer for them. Most of the time, what we're seeing now in the High and Heavy space is, let's say, a 90% finished unit. And they've discovered, through consultation with us, that it makes a lot of sense to be able to flex building a standard unit in a factory, bringing it to an equipment processing center and allowing that accessorization to happen closer to the demand rather than trying to do that all inside of the plant. If you think about that flexibility then what we also bring to that, particularly in port locations is scale. So the ability to industrialize the professional needs of what happens inside of a mechanical development or an assembly development happens at scale for us in port locations. So we can handle many of the different OEMs at the same time in port with having the same level of qualified labor, qualified mechanics, qualified welders, qualified body shop people at one place that provides both the quality and the scale to handle the varying volumes that are in place. And then finally, scope. Again, to provide an integrated service solution, having the scope to handle a host of services across all these dimensions of processing terminals connected to our shipping business and bringing that one-stop solution to our customers provides a level of scope that many cannot provide inside the marketplace today on behalf of these OEMs. So from a customer perspective, it's the combination of all these things that really drive value and interest in doing more with Wallenius Wilhelmsen in regards to logistics. And we'll talk as well about how we see the connectivity and how many of our customers are actually connecting ourselves to them through this entire integrated chain. So I promised I would come back to each of these areas and talk a little bit more about what we actually do in these specific areas. Terminals, vehicle auto processing and heavy equipment processing. So I'm going to start here first with Terminals. Here, you see a picture of our terminal in Zeebrugge, Belgium. So from a terminal footprint perspective, you'll see -- as I mentioned earlier, we have representation in North America, in Northern Europe, in Asia and in Oceania. If I start in North America, we have 3 terminals inside of North America, one of them being in Southern California in Port Hueneme. Another one being in Baltimore, which I'm sure many of you heard, unfortunately, in the news, they're in the early part of this year with the bridge collapse. We were obviously in place in that location specifically in Baltimore. And then most recently, we've signed a concession inside of Brunswick, Georgia. Previously, Georgia was a multiuser port in Savannah and the port and the states made a decision that they would move all RoRo cargo out of the Port of Savannah. And they came to Wallenius Wilhelmsen to work with us because of our footprint in shipping to establish a dedicated RoRo port in the Port of Brunswick, which is now a fully dedicated RoRo-only terminal with where we have the largest presence, and we're the terminal operator there today. And you can see the sense of the volumes that we're talking about, 675,000 import versus export and it's largely a big import marketplace, as you're well aware, inside of North America. In Europe, we have leading positions in Zeebrugge, which is a critical hub for us as far as our distribution channels and our shipping lanes. We also have stevedoring presence in Bremerhaven working together with the terminal operator there in Bremerhaven. And then, I mean, just outside of Europe now in Great Britain, we have a long-standing terminal in South Hampton. And these are critical strategic deliverables inside of our network. And when we talk about terminals in general, we're always looking at them from a strategic perspective. They are the critical middleware between our shipping business and our land-based business. They connect the dots of what we're trying to accomplish overall with our shipping network itself. And why is that important? Well, you're going to hear more today about where the fleet is going and, of course, the volume of fleet, what's not happening is the creation of more land. And so the congestion issues are well known around the world today. And we feel that having these strategic positions that we do have with access to land and capacity and infrastructure is an advantage for Wallenius Wilhelmsen and for our customers. In Asia, we have a critical representation in Pyeongtaek in Korea, and it is obviously a huge amount of the volume that we handle for our ex Asia cargo coming through Korea and with our critical customers there. In addition to that, we also have 2 very small investments in Chinese joint ventures that we've had for many, many years. They're single-digit investments. But what they allow us to have is a strategic foothold or at least a conversation with those Chinese terminal operators about what is happening inside the Chinese marketplace. And then finally, we have the representation in Oceania in Melbourne. And I think everyone here is aware that is an asset that we're currently planning to divest either in the end of Q4 this year or in early Q1 of 2025. And there's been much already discussed about that. But the reality is that our representation in Melbourne and in that port was really one of very little strategic integration for us based on the concession that was signed to get that foothold in Melbourne. There was not a lot of inter -- there's no integration allowed inside of our shipping network, not like the other lease concessions we have around the world, where we are able to get things like berth priority and get representation for our own shipping network. So what happens actually in those terminals, what specifically work is being done in those terminals? Well, the core of the business is on the left-hand side of the screen. It's really the stevedoring and the loading and discharging of our ships. Part and parcel of that, of course, is making sure that we have the right documentation, custom clearance and working together with our shipping colleagues to be sure that we're actually loading the vessel's property, that we're stowing the vessels properly and that we're clearing the vessels for sale properly. In addition to that, there's infrastructure and storage that we handle on behalf of our customers when there's no processing needs. So we'll do things like charging. Sometimes vehicles will be stored for various reasons, simply because either there's been a hold for quality or the vehicles are not moving quickly enough where there's maintenance required on those vehicles while they're there. We can't allow vehicles to just sit for 2 months idle and have no exercising of either equipment or the autos. And then we'll also do long-term storage of the units and parts housing. One of the value-added services that we also do maybe wasn't of the ones we would have chosen, but became an opportunity as it developed in the last years, was this fumigation issue or treating vessels or treating cargo on our vessels or prior to going on our vessels, particularly as they were going into Oceania. There was a huge biosecurity risk over the last few years, and those risks have continued to evolve. And we've been able, across our network, to put in either heat treatment or fumigation capabilities that is a service to our customers that allows for the easy and friction of flow of their cargo into that market to the best of our abilities. And then finally, on the far side of the screen, you'll see in-terminal processing. I'm going to come back to that now, talk a little bit more about what that specifically is. But it's important to note that when we have these terminal locations, we actually will then embed equipment processing centers or vehicle process centers in those same locations. So what really drives a lot of the results, what is inside of our terminal business is, of course, volume. It's going to be the type of mix of services or the inventory management. So how quickly is the velocity of this cargo going through the business itself? And then, of course, the value-added services like biosecurity that I already mentioned. It's important to highlight for us that the criticality of this business is really connected to, as I mentioned earlier, that middleware, that connection between our shipping business and what we can do on Portland. And I think and know our customers are reassured when they know that we have physical facilities to be able to handle their cargo with our dedicated facilities around the world. So now I'm going to turn over to automotive processing and vehicle processing as we call them for cars around the world. So it's important to point out that there's 2 dimensions to where we do these types of services, and I touched upon it briefly. We do automotive processing in plant and at port. So we are actually at the end of the factory line of many of these automotive OEMs, particularly in North America. So as the units are coming off the production line, we are actually there receiving those vehicles, handling those vehicles and then bringing them either to a dedicated processing center to do more things to them or staging them for delivery outside to the dealer network. So when it gets into the physical efforts and work that we do as far as services, transportation and reception is the first part of that, either in plant or in port. Taking those vehicles inside, being able to manage them, doing initial quality inspections, talking about what documentation is needed and even dealing with the charging necessities of the car if it's now an EV, which we're seeing a greater percentage of. What we also do is simple maintenance and repair. So if there are things that have happened along the way, we are able to actually repair those vehicles and be able to charge that back to the customers. But equally, what we're doing, either in-plant or port, is if there are modifications or warranty issues that the customer has found post production that we are able to then rehire to help resolve some of those post production issues inside of our mechanic base. So we are actually doing warranty work before it's actually been wholesale to a dealer. And I think similar to what I said earlier in terminals, we're doing maintenance programs for vehicles that may be sitting 30, 60, 90 days. Another big piece of what we actually do is customization. So we're actually painting, we're actually kitting out vehicles or automotive at port or in-plants at the end of production line for things that would not normally make sense for an auto company to do in the factory. So when they handle accessories or things like GPS, stereo kits, guards, toe hooks, things that would go on to your car, potentially at a dealer, or would happen in mass because these are standard accessories in cars, we are being hired to handle those customizations on behalf of our customers. And another small business that we have as well is upfitting. And that's probably unique term. You don't hear very often either. But that's really for fleets. So we will actually do a variety of automotive upfitting for different fleet customers from things like law enforcement where you're installing sirens and lighting inside of cars or other industrial players who have operations that handle things like public utilities and racking inside of vans. We're actually doing that work on behalf of those customers as well. Once we've gotten through those processes, we get into what we call dispatching, which is now these services are complete, we now have to take those vehicles and allow them to be distributed or dispatched out to customers. So we will coordinate, again, the predelivery inspection after the services have been done. We will then coordinate with rail yards. And I have to give you a sense of scale. So if you're talking about a factory in North America, you're talking about a rail yard that has 6 railheads, managing multiple cars that have double and triple deck railcars driving them into the railcars, loading them up for transport and making sure that they're safely distributed to the dealer network. We'll do exactly the same thing with the automotive base and loading the automotive cars -- the cars themselves, rather, into the truck base. And then we actually connect into the systems or the integration of those distributors of the train or the rail lines or the trucking companies that are in place and making sure we're able to track them on behalf of the customers. And then finally, it's the transportation and storage, so we can also move these vehicles around. We have to manage them inside of yards and when I say managing the transportation and storage of these vehicles, you have to imagine a parking area with 28,000 to 30,000 cars and trying to coordinate the actual yard management of all those cars on a consistent basis on behalf of the customers. So these are the market drivers that really generate what we're talking about here in terms of value-add for our customers. It's driven by volume, of course. It's driven by the service mix of what I've just shared here and it's driven by hours. We have to spend a certain amount of hours on certain amount of different cars, and it's very challenging to manage the hours that we have to handle for one automotive manufacturer versus another who may be less contented. Those things all kind of tie up to how we address the pricing and how we actually generate value for us as Wallenius Wilhelmsen, but equally, again, how we generate value for our customers. So now I'll turn to equipment processing and the video that we opened up with, you saw a little bit of what happens inside of an equipment processing area. It's very similar to what happens in auto processing and I would argue that we started this business some years ago in the automotive processing space and began to recognize that many in the high and heavy space have the same needs that are required in autos, so why not generate same side of solutions for equipment processing and would there be interest in it. So you see the same types of activities that happen here: transportation, reception, initial quality checks. How do we make sure the documentation is correct? But when we get to this next part around assembly and customization, this is an entirely different animal when it comes to heavy equipment. It is far more complex. There is far more activity that takes place, and it has a huge amount of skill sets required to do this. We are doing things like assembling, semi knockdown units or SKD, as you see in that photograph there, of actually putting and assembling entire pieces of heavy equipment together. We are actually building and changing these trucks and these pieces of equipment sometime. We're installing hydraulics. We're moving the extension booms on excavators. We're installing different blades based on what's been ordered by the customer. Is it a bucket? Is it a blade? Is there some other way of actually designing this that is towards the specific needs of the customer closer to the market, which is that flexibility I touched about earlier. And then we're actually doing the same thing around customization. We're actually modifying some of these pieces of equipment. We're painting and repainting them based on maybe that construction fleet's need, and we're actually mounting tires and tracks on the pieces of equipment themselves. And a very short story, I would say, as a real example of a customer. We are heavily involved with a lot of municipalities, big cities like New York City, where we are actually doing the modification to all the sanitation trucks, to all of the snowplowing equipment that gets delivered into New York when new purchases are made or other cities around the United States and building those things to orders. So where in the automotive space, we could be spending 3 hours on a car, 2 hours on a car. In that last example, we're spending 300 hours on a piece of equipment: welding, redesign, customization to meet the needs of those customers. So it's a very intricate sale. And then, of course, we're doing the same thing around dispatching, around transportation and storage and we're making sure that we're exercising that equipment, and that's critically important for heavy equipment is that it's exercised regularly the hydraulics inside of the business. This too is driven by, of course, volume, driven by the country-specific requirements of when we do these things because particularly in High and Heavy, we do consistently around the world. We do it in Australia, we do it in Europe. We do it pretty extensively in North America, but also the complexity, as I mentioned, of the services. And it's that combination of all those things and the total hours that were used on those pieces of equipment that drive the overall pricing and the revenues that you see in our High and Heavy equipment space. So I talked about this a little bit earlier, but just some graphic examples of when we talk about the complexity of High and Heavy, these are very specialized services, as I mentioned. You see here kind of disassembled unit almost, what we call, semi-knockdown and I mentioned earlier, actually assembling the entire kit, taking pieces out of crates, taking big pieces off of our vessels that are the core unit itself, mounting cabs, then making sure we've inspected it all the components, properly checking all the fluids, making sure the batteries are completed, assembling the buckets and then, finally, dispatching it for transportation, so it's not just simply moving. When we talk about logistics, we're not just moving something from point A to point B, we are actively involved in the final completion or the best way to describe it is the postproduction services to deliver these things to the customers and the customers of our customers. So I want to come back to this why. I talked a little bit about why this is really important for our customers, but why important for Wallenius Wilhelmsen and why we believe there's synergies here, why 1 plus 1 is more than 2? Well, it's not a secret that we are -- at our core, we've been a shipping company for a long time, and we have developed some very close and deep relationships with some of the biggest OEMs in the world. And that relationship has only been fostered by the development of what we do in our logistics space. By adding value along the way, by proving that we can do more integrated services, it elevates the quality of the debate and the quality of the discussion with our customers when Pia and her team are walking in to one of our customers about what we can offer. We are also so close to them when we're in production facilities that we are well aware of what's happening with our customers much more so than if we had only been a port-to-port operator. We know about the quality issues they're facing. We know about the production issues. You recall the chip shortage of a few years ago. We knew there was much more than just chip shortages. They were plastic shortages. They were seat shortages. There was a host of things happening that were driving what was going on and we were right there on the front line with the customer, helping to find ways to solve problems with them. So really understanding their needs and being able to connect more into their value chain is what logistics opens a lot of doors for us for. And because of this connectivity, it identifies new opportunities when we're working with these customers. So we're able to go down the value chain with them to say, there's more we can actually do. We could start out just doing dispatch or very simple receipt and distribution. But then we start adding more value when we can improve our competency in certain areas and that increases value for us along the chain. If you look at our customers overall, there's a lot of similarity. Of course, we have the top 50 customers that we have inside of Wallenius Wilhelmsen as an enterprise, 70% of them purchase both, some sort of shipping and logistics solution. And of that 70%, 40% are actually big large customers for logistics. And we want to see an opportunity where we can actually have logistics feeding shipping and shipping is feeding logistics. And of those that are actually big, they have 24% of their total -- of the total revenue we have with those customers is actually from logistics, so a split between shipping and logistics. So I want to share one thing with you, which is a little bit of a customer journey that we've had, and this is something that's active and this isn't just a small new startup. This is a large automotive OEM that we have today in our portfolio. We first started services with this OEM in 2005, so we're going back quite some time. And that was really only end-of-line reception. We were just doing end-of-line reception with that business. As we were able to build our capabilities and competencies over the years, we began adding more value along their chain and value for us, getting involved in distribution and storage, getting involved in accessory installations, upfitting, getting the dispatch, handling the rail that I mentioned earlier, to the point where in the last year, we've now connected that large automotive OEM to actually a shipping relationship with us, where we have a dedicated vessel for them in a short sea trade that is handling their distribution inside of North America. So we've kind of evolved to being their exclusive 3PL inside of North America as well as a core 2PL service provider to them. But what's really intriguing about this relationship and what I talk about when we say we're adding value and extending into these customers' discussions is what happened next in the last 3 years. In the last 3 years, we've built technology and visibility capabilities because we have all of this information, all of this data in their operations about what's happening in supply chain, we were able to connect some digital supply chain capabilities for them to start firstly and foremost, with a control tower, so management could see, just see what was happening inside of their North American operations. Then over a short time, we were able to get more of their information based on the long-standing partnership we had around what was happening with their deep sea business, so that we were able to then say, "Okay, we can give you actual insights about maybe there are places where you could improve how you operate your supply chain business." And then in the course of the last 18 months-or-so, they came to us and said, we have a real issue with our 1,100 dealers. They don't really know when the ETA of these vehicles are going to arrive. We don't have a good way of explaining what the legitimate and honest timing this could be in terms of our supply chain network. Can you help us with that? We know there are others who can do it, but you have so much in partnership with us, is there something you can do? So we went forward and we built basically a dealer portal for these 1,100 dealers. And today, if you walk into -- if you were a customer of that OEM and you walked into a dealer and the dealer you asked where your vehicle was? They would be seeing a white screen, Wallenius Wilhelmsen system saying, your car is here and it has a 3-day ETA based on where it is in the supply chain, either on rail, on a ship or it's sitting in a processing center. So the amalgamation of that journey, you can see the kind of CAGR of revenue development that we've had and experience over the last years with that customer. So the idea of being this integrated supply chain partner, being that value creator for our customers is something that there is a value for. And I would only add that it's increased since the conclusion of COVID. Since the sustainability issues and the resilience issues have been really in focus for these customers, it's become more and more transparent that the finished vehicle logistics and supply chain network is highly fragmented, and they are looking for partners, they're looking for solutions and we believe Wallenius Wilhelmsen is a critical partner and could be that solution for many. So finally, future growth and value creation opportunities for logistics overall. Number one, is we want to continue to strengthen profitability. How do we get better at standardizing what we do around the globe? How do we get better at digitizing our operations so that we can be very consistent, very clear and very efficient in what we're doing for our overall logistics network? Secondly, we're looking to always create more value-add for our customers. I've talked about that quite a bit already this morning, but how do we continue to provide robust solutions for them? Look for new solutions where they may not even realize they want the solution yet? How do we build resilient networks for them that allow them to really not fear or worry about their finished vehicle logistics network, much the same that they have less fear about their inbound parts logistics network coming into the production facilities and really build and expand around strategic relationships. I think, Lasse talked about this earlier. We're not going to be all things to all people. That's clear. But there are a host of groups out there, whether they be new entrants in the market, those who are forward-leaning enough that want to change, those who want transparency around their operations, not only in terms of dollar efficiency, but in terms of sustainable efficiency of a sustainable organizations and really connecting them more to their data than worrying about having who's going to handle and process their business. And then finally, we have to grow. We're looking for opportunities to grow. We are looking for double-digit growth. We're looking both for organic growth and the opportunity for M&A growth, and we're looking for selective opportunities to look for terminals that strategically make sense for this entire network of opportunity and network of solutions that we provide as Wallenius Wilhelmsen. So with that, I'm concluded. I want to thank you very much for your attention, both here and online. And I'll hand over to Anders to see if there's any other questions we would have.

Yes, you're going to stay here for a little while longer. But thank you, Mike, for a very, very good and interesting presentation. It shows the scale and complexity, I guess, of the entire operation. A couple of quick questions before we open up for questions from the audience. First of all, you talked about expansion, M&A or organic growth, what is your preference? And then secondly, if you look at the dots on the map, it's very, as you said, North America concentrated, how about all these tariff talks and how is that going to impact the U.S. business? Is it shielded from it or is it going to be a negative effect from that?

Those are a few questions buried in there. I'll start with the first one maybe around growth and expansion. We know there's still opportunity to have organic growth inside of the networks that we have. So that is certainly an opportunity both in our terminals and probably in our port operations around our terminals with vehicle and equipment processing. Obviously, plants are things that you win organically because you've now had an RFP and you can go after a customer and you get their plant business. So that is, I would say, organic growth as we look towards it. Inorganic growth, of course, in looking at the M&A marketplace, it's a highly fragmented business. We certainly see that there's maybe more we could do inside of North America. There are a few pockets here and there, but we have a good representation. And Europe is an area, obviously, that is far more right for us in terms of our centricity of where we do business. It's very challenging. We did have operations in China some years ago, vehicle processing. It wasn't -- it was a very challenging endeavor for us. But we do look at strategic terminals, right, inside of Asia as opportunities. But when it comes to M&A, I think we'll continue to be open to looking for opportunities and where we can find them anywhere. The second one around tariffs. I think that was your second question.

Yes, it was.

I think -- well, Lasse talked about this, I think, to start, right? There's this idea of protectionism is there. We all recognize that. It's an influence on our strategy overall. The reality, though, is this probably is something that's going to have to be transient because there's no way the Chinese influence in terms of the automotive market is going to subside. It's going to continue to build pressure. I know that yesterday, there was a discussion about the Biden administration, about Chinese componentry inside of cars. That's something, of course, for us to consider and look at. It's something that won't go in effect until 2029, if it is, in fact, passed by the end of his administration. But that being said, it is something that is going to be constantly on our view, right? I mean this is a huge influence not only for ourselves, but for most importantly, our customers and how can we be there to offer solutions for our customers. The good news is our mix in logistics is a little bit insulated to it because if you looked at the volumes that we talk about, 6 million cars overall being processed in auto processing, a good piece of those are for inland and domestic consumption. So we're actually only exposed to maybe 30% of it being import/export inside of our ports and a lot of it is also domestic production that we use and supply to our solutions for our customers.

With that, I open up for the questions from the audience. I think we have some microphones here. Please state your name and company when you ask questions. So Eirik, first one?

Eirik Haavaldsen of Pareto. You target double-digit revenue growth, but how much would be achievable with the existing asset base do you think?

I think it's difficult to say exactly how much we have in terms of capacity because it comes down to the mix of services, right? So as I mentioned earlier, more sophisticated services have more hours, that more hours means it takes up more space so you can't get as much throughput through them. So I don't think it's easy to just say, yes, we could do 20% or 50% through existing base. We know we have growth. We have the potential for growth inside of our existing base. We know that inside of that organic growth, as I mentioned before, could be new plants as we conquest them. But I don't have a number where I can say to you today yet, we have X capacity because I think it depends upon much what we would do for those customers.

Okay. And when it comes to the sort of new emerging growing exporters of cars to the Chinese OEMs, what -- how different are their requirements versus your North American long relationship base?

Yes. I don't think they're really extensively that different, right? I mean there's been a lot made of how do we handle EVs versus ICE cars. Obviously, the big push from the Chinese is on the EV side. We still have the same accessorization. We still have the same need for charging rather than exercising the battery of the cars. I think what there is, of course, necessary is understanding how fast will this throughput happen and what are the delivery models that are changing? So many of them are coming in with no dealer networks. So how much can we think about maybe putting off-port solutions where we can actually be the distribution hub for those manufacturers who don't have delivery networks. What we do see though is as these EV manufacturers grow in scale, there's suddenly a bit of a gravity pulling them back to traditional automotive companies where they're looking for service providers. And we see that potentially as an opportunity for us as well. You see that with Tesla, you see that with a host of the others around the world.

But I mean, Chinese -- well, not to -- they do have a history of eventually learning how to do things themselves when it comes to manufacturing processes and so on. So it's not a threat that you kind of give them too much insight into your Logistics division and then eventually -- because they have started ordering vessels themselves and doing a bigger part of the chain themselves as well?

Sure. And that's where we come back to this idea about having the infrastructure in the network, right? So when we get involved in these terminals of these port operations, we're often getting involved in decade-long lease commitments, right? And so we're, in our view, securing critical strategic infrastructure, and that's when we say strategic terminals. It's so important to recognize it is strategic. There won't be more portland necessarily made and so our ability to kind of secure that and for a long period of time gives us that advantage to at least have the physical space, coupled with the know-how of doing what we do inside of our logistics business.

All right. Erik?

Erik Hovi, Nordea. So just want to like to try to figure out what's, in your view, the ideal size on the logistics segment versus then the shipping segment? How much can you grow? What's the optimal relationship between those 2 divisions, so to say?

Yes. I can't say here that there's an optimal solution. What we do know is we want to grow. We want to become bigger than what we are today. And I think that also leads to the fact that we're dealing with very different industries, a capital-intensive industry versus a labor-intensive industry. Our ability to scale, I think, is what is an advantage for us in logistics. And what I mean by that is we need consistency of flow of units, simply because we need to be able to scale labor quickly. When it comes to what is the right ratio, meaning should we have X percent EBITDA versus this in shipping? I think, the market is going to determine that. And I think that we are recognizing that there's more we can do to grow this business, and we're seeing that opportunity by leveraging the growth and the great success we have in shipping.

Okay. Any further questions from the audience? Petter?

Yes, Petter Haugen from ABG. This is a very specific question. But as you alluded to, a lot of the work being done in terminals is simply just to transport vehicles and equipment from one place to another. Self-driving capabilities in cars, is that something you sort of thought a lot about and how that potentially can affect the workload and margins eventually in your business?

Sure. Great question. All great questions. That one, in particular, was one I think gave us a lot of concerns probably a few years ago when autonomy, there was all this whole discussion around CASE, right? This kind of Connected, Autonomous, Sustainable, self-driving vehicles -- Electrified vehicles. The reality is that autonomy is not taking as much hold as it was in the past. That doesn't mean it will never. But in the immediate future, we don't see that as being a major issue. And even with that, we still have the requirement, right, of lashing vehicles inside of the vessels. We still are going to have the need for stevedores. There will be of course, something that we have to adjust to, if there is more autonomous driving. But I don't think it's something immediately we're looking at saying, "Oh, this is a huge threat to the logistics business today or currently and maybe even for the years to come." In fact, we were talking with some external experts last week talking about how autonomy and autonomous driving is kind of taking and mobility sharing is taking a little bit of a backseat because right now, many of the automotive OEMs are struggling to pay for the EV transition, let alone autonomy.

And if I can quickly follow up. As Lasse introduced with, some of the new players are integrating everything. Have you seen examples of sort of the reversal of what you aim to do in the sense of OEMs taking out what you now do from your business and placing it in their own factory lines?

So we often do this dance with the OEMs, right? They see things that they think are -- let's say, that are accessories, for example, that are purely options in the cars that they will say, okay, now this is going to become a standard feature, but what often happens is that's replaced by 1 or 2 new things that they're putting in terms of accessories in the car, so it's a very dynamic relationship. So things that were once accessories or things that people ordered are now becoming standard. But then they're actually adding new things that are incremental sales potential for them. So what the automotive world calls Per New Unit Retailed, how many accessories per car. PNUR, that number has consistently kind of gone up in the auto industry, particularly in the migration from sedans to SUVs to trucks, way more accessorization, way more capable accessorized. So we go through this with many OEMs, but it's not something that we don't see replaced with other opportunity.

All right. I think we have to cut and be mindful of time. So please speak to us during the coffee break and pick our brains. But we'll now start with 15 minutes coffee break, get some food for thought back at the end here. Make sure that you're back by 10:15, please, because we are running a tight schedule so get some coffee or something to drink, go to the toilet, do whatever you want, but please be back by 10:15. Thank you. [Break]

All right, 15 minutes are up. So welcome back to the second session of today. Keep in mind that we have a $1 billion revenue business in logistics, that's a lot of smaller companies on Oslo Stock Exchange. So this session, we're going to talk about our new class of vessel, The Shaper Class. And we're also going to talk a little bit about our capital policy and finance with Torbjorn. But to kick everything off, we'll start with a short video. [Presentation]

All right. On that, I'll introduce our 2 speakers. These are big vessels, we need 2 speakers. First is going to be Morten Skedsmo, he's Head of our Fleet Ownership. He joined us about a year ago, came from a long career at Klaveness. And then we have Lene Bårli Wiederstrøm. She is Lasse's or our CEO's Senior Advisor, but she has been instrumental in the net zero and Shaper Class work and the task for us to bring our 2027 net zero ambitions. So with that, I'll leave the floor to you.

Thank you, and good morning. This is our Shaper Class, our pride. These vessels are 9,300 CEU car carriers, meaning that they can carry 9,300 cars and that is inside here. You find 12 decks of cars, it takes the same space as 12 proper football fields to park all these cars in volume. So these are not just carrying cars, of course, as we talked about earlier, one of our specialties is to carry also trucks and buses and interesting yellow and orange equipment, which is much heavier and higher than cars. So these vessels are also tailored to our needs in that respect. So they have taller decks, stronger ramps, wider ramps and more features inside than regular car carriers. When it comes to engine, these vessels have a methanol dual-fuel engines. So they can consume, of course, regular fuels as conventional vessels, biofuels, and also methanol. And when we say methanol here, we are going to be ready to consume the methanol from day 1. It's not just a ready for notation. Today, we are also happy to announce that together with Shipyard Jinling, we have reached an agreement to upsize 4 of our 12 vessels from 9,300 CEU to 11,700 CEU. That we have done by stretching them 6 meters and widening them 2 meters and adding 2 more cargo decks, so that has been done now in cooperation with the ship designers, Deltamarin and our specialist on ship design and also, of course, with a big involvement of our operational people to actually confirm that we can get in and out of the port with such a big vessel and also to fill them up. So these will be the largest car carriers in the world. They are on order, and they are slated for delivery in '27 and '28. The point, of course, the value in this is in the scale. With this, we are lowering the cost per unit and thereby also the emissions per unit substantially. That's the point, and that's -- Lene will talk more about that. These, of course, are reducing the cost for us to provide the net zero end-to-end service. So in a bit more detail, we see this as a way to reduce consumption, obviously, per unit transported compared with our existing fleet. The Shapers reduce the emissions by 27% and these big ones even more, by 37%. In the middle here, you see the ramp strength and CEU capacity plotted. These have the highest capacity in the whole order book and thereby, the ability to carry the high and heavy cargo. Here's an illustration as well of the decks and the flexibility that these vessels provide. We can carry lots of different heavy equipment in many different modes and we can carry 100% electric vehicles in these vessels. So, Lene.

Okay. So Morten, you have touched upon the Shaper Class vessels, a bit about the technicalities and why these vessels are important to us and also to you. I will also talk a bit about why these vessels are extremely important for our decarbonization ambitions. As you know, we want to be net zero by 2040 and that is -- these are very much part of that plan. It's also extremely important to our customers. They have ambitions that actually, at least a lot of them have ambitions that align with our ambitions. And for those customers who doesn't have ambitions that align with ours, they still know and appreciate that we do this because they have to meet requirements coming to reduce their Scope 3 emissions. We will get these vessels delivered from 2026 up until third quarter 2028. Two of the 11,700-CEU vessels will be delivered in '27 and two of them in '28. These vessels, as Morten mentioned, and as also Lasse and Mike touched on earlier, they are crucial for our net zero end-to-end service that we will launch in 2027. And that service is basically a slice of where we want to be in 2040. We aim to show you and our customers that we are able to provide exactly what we want to provide in 2040 in 2027. So it's not just an ocean, it's including everything that Mike talked about earlier. It's end-to-end, meaning all the way from the production plant to the dealer or the consumer. And then basically -- I think I can move on now actually, sorry. We are already, yes, I've touched upon what we want to do in '27 and 2040. So that's a bit in the future. But we are already partnering with a lot of customers who is asking us about helping them reduce their Scope 3 emissions. So we have already -- we are already consuming biofuel on our vessels. We have primarily consumed B30, but also piloted B100, and that will be scaled up. We are having our customers pay for that biofuel by selling them our reduced carbon service, which is basically emission reduction declarations that they achieve -- that they receive when the emissions reductions are achieved. As you can see, we have in 2024, we will -- 10% of our total fuel consumption will be biofuel-based and most of our new contracts have an element of biofuel in it. And basically, also I want to say that I touched on it earlier, but our customers really appreciate this. They ask -- they didn't ask for it too much, but now they are starting to ask for it, some of them. And those who don't, like I said, they see the value of this because they have to comply with coming requirements. Then of course, I already did say a bit about this now. Our ambition is to become net zero by 2040. That is expensive. It costs a lot. Green fuels cost a lot. We have said that the Shaper Class vessels, we will be able to run on methanol from day one. But what we believe in is a mix of green fuels. We don't necessarily think that one thing is the only solution. We know there will be a different variety of fuels. And we are constantly, currently and will be working with sourcing and introducing affordable and available green fuels. We are, like I said, already having customers pay for the consumption of biofuel on our vessels when we get the Shaper Class vessels that's going to run on methanol, we will introduce methanol into the reduced carbon service so that they will get emission reduction declarations also based on that consumption. In addition, we will introduce net zero services, like I already touched upon the next end-to-end service, but also being able to provide net-zero ocean services alone. But in addition to that and what we think is probably the most important adjustment that we do is not to give the customers an option to be part of this. But to basically say that we adjust our bunker adjustment factor to include all the fuels that we will consume in our fleet in the future, not just fossil fuels. And this adjustment is done, and we will start to roll that out. But that is basically something we believe very strongly in, but this is something everyone has to do. We have to do this transition sustainably, and it has to be rolled out all the way to the end consumers. We also know that -- no, sorry, the BAF mechanism follows our 2040 trajectory. That's the main important thing. So by having our customers into the BAF mechanism, we will get to our net zero ambition by 2040. And of course, very important to remember is that even with these green fuels, transportation still remains a minor part of the total vehicle or equipment purchase cost. So we actually see this as not just a cost, a big cost, but something that creates value. We are -- yes, we are removing emissions and that cost, but we are adding technology, new ideas and transparency, and that is something the customers welcome the way we see it. We are in different customer meetings talking about all these things and it's a positive. We have met with positive customers, who are happy to hear that we are here to help them reduce their Scope 3 emissions and to take on that responsibility and take that off their hands, so to say, for their outbound supply chain. Yes, that was actually it.

Thank you, Morten and Lene. A couple of questions. First of all, Morten, these ships are stronger and bigger than anything else in the order book. And I believe they are instrumental to the way we are trading. But why did you have to upsize only now and not doing it when ordering the ships?

Yes, this option hasn't been available until now. We have worked together with the yard from early this year on this subproject, both on the technical side and also on our side, on the commercial infrastructure side. So it's only now that this is available to us, and we have done it as fast as we could.

Okay. Lene, you touched a little bit upon it, but you've been part of all these customer talks and how are the customers actually reacting when you talk about the introduction of new fuels and a net zero trade corridor?

Yes, I touched on it. And we are left with a feeling that many customers are very positive about this. And the way we see it, decarbonization kind of changed -- has changed the dialogue with the customers quite a lot. They see that they have to do something. Most of them want to do something. They have requirements from their end customers. And that's kind of the main driver and why we are able to have these discussions on that level with the customers, looking at how to build a business case more or less to sell a car to the end consumers delivered net zero. And -- so yes, we actually think that decarbonization is a huge driver in these dialogues and that the customers want to have these discussions.

Do you feel that they're actually -- is that a selling point when you go to them and they're actually asking for it? Or...

Some are asking for it, but absolutely not everyone. And I think, Lasse has pointed on that a few times as well that we have had to sell it and we have had to do that, but at the same time, when we sit down with them and discuss this at least the net zero end-to-end service and try to get into the details of what we want to achieve and why we want to achieve it, it is a welcomed idea and they are positive to hear what we are trying to do.

Okay. Are there any questions from the audience? I guess everybody wants to know what happens to the option, so. Petter was first, then Eirik and then Erik.

Well -- yes, this is Petter Haugen from ABG, again. In terms of 4 not 12, why?

Because there are some more progressed in production, so it's not easy to convert all 12 and it's also a stepwise increase in size, which means -- we think it makes sense to have mainly 9s, but some 11s.

What is the cost of the upscaling?

Yes, Torbjorn will come back to the CapEx. We see it as a very cost-efficient way of reducing emissions and the cost per unit.

And is there any known restrictions to the trade lanes, those vessels can be used for?

Well, that's the advantage of having a huge network as we have as the largest player in this area that we have found several trade lanes where we can put these on, and then there are, of course, others where they are too big, but that can be developed over time.

Okay. Could the market read this as sort of, if not changing strategy, but at least explicitly saying that you will opt now to not sort of internalize the cost of the transition in terms of buying a lot of new green ships and instead now transferring the cost of carbon-less transportation to the clients, the title clients will pay for the green fuels?

I guess that's for you, Lene.

Yes. Yes, we are. We are absolutely aiming for that. And that's like, Lasse said as well, the customers will pay for the fuel. And that's still the ambition and the Shaper Class, they are crucial in that regard because they'll use less fuel. So yes, efficiency wise, they will be a lot better and then also potential to consuming both biofuel and methanol.

Can I be allowed just one quick one at the end? So I think many people think that you need to scrap ships because they become too old, is that true?

Yes, of course, over time, we need to scrap ships, but car carriers have longer operational lives than other types of vessels, like bulk carriers or tankers because there is less mechanical damage and so on. So we -- as you know, we have several vessels that are quite old, but still are operating in a safe and orderly manner. And we don't see any problems to keep them running. We have vessels up to 30 years, and it's possible to even extend beyond that if we need to.

Erik?

Erik Hovi, Nordea. So touching a bit on what Petter said, these vessels are going to be very specialized in the types of trades they are doing? Is it going to be more tilted towards cars versus heavy -- high and heavy for instance? And secondly, is the 25% like capacity increases just due to the widening of the ships or are you committing to some sort of conventional fuel tanks or the sizing of the tanks, is that the place where you got more capacity?

Well, we -- these vessels can be traded as our other vessels. They have the ability to carry a huge amount of high and heavy in addition to the cars, if we want to do that. We -- where we will trade them, we don't exactly know yet, but it's natural to think that they deliver the most value on the longest hauls where you get the best fuel efficiency values. So I wouldn't be surprised if they were trading Asia-Europe, Europe-Asia trades, for example.

And then on the capacity increase, is it just due to the wider ships or have you reduced -- have you taken out some of the...

No, they are pretty similar to the other shapers in that -- but longer and wider and 2 decks taller, so it's a very similar design. It's just scaled up. And of course, the advantage with methanol as compared with LNG is that we don't steal the cargo space in the main deck, as you will, with LNG dual fuel vessels. We can have bunker tanks in the hull as with regular fuels.

And for ammonia type readiness, it's the same?

It's the same, yes.

Any other questions? There seems to be no further questions. So thank you, Morten. Thank you, Lene.

Next in line is our CFO, Torbjorn Wist. I think Financial Times has something called how to spend it. I hope you're not spending it all Torbjorn, but I think you're going to shed some light on our CapEx plans and so forth. So take it away, Torbjorn.

Thank you. Good morning to everybody. Yes, I will shed some light on the capital allocation within Wallenius Wilhelmsen Group. As you know, at the beginning of 2024, the AGM of Wallenius Wilhelmsen resolved a new dividend policy under which we will continue to pay between 30% and 50% of net profit on an annual basis. It will be paid in 2 installments, but we're now doing it on a pay-as-you-go basis. And the Board has also secured the authorization to consider extraordinary dividends and/or buybacks. 2024, given that we are paying a combination of both the dividend for '23 plus the dividend for the first half of '24, we're paying $738 million which, in essence, is 100% of the free cash flow to equity the past 12 months. Given that we have a dividend policy of paying between 30% and 50% means that we have a policy of investing between 50% and 70% of our net profits back into the business. These investments will include new buildings that Morten just talked about. We have purchase options on vessels that are in charter at the moment. There will be land-based activities, digital capabilities as well as the sort of normal maintenance of our hardware. We can also look at M&A opportunities, greenfield or brownfield development. And just to attach one comment to Mike's presentation, terminal which we consider to be an extremely important middleware with a strong strategic value to us. Often, what we see is that they are not particularly CapEx heavy because the port authorities themselves will take the CapEx of doing, call it, constructing the berth, doing the tarmacking and then what we will pay or invest is rather the in-terminal processing facilities, but that's a relatively minor part of the CapEx. On the flip side, we will then, of course, enter into long-term leases on these assets, which we believe to have a strong strategic value for the group. Wallenius Wilhelmsen has a very strong commitment to dividends. Over the past 3 years, we have paid out some $1.2 billion. And you can see on the chart on the left, the growth that we've had in the dividends year-over-year. And just to illustrate the commitment of the company, its board management, the payout ratio has continued to increase and is now at 50% of both '23 profits as well as the first half of 2024. Now Anders said that particularly analysts like to use other reference points. So the digger you can see on the right, this is a Liebherr 996, it's one of the world's largest excavators. And if we take the dividend paid in 2024, and pay that out in dollar bills, $1 bills that would weigh as much as this digger on the right side of the chart. This is a digger that is about 9 meters tall, it weighs about 720 metric tonnes -- 728 metric tonnes, so it is a massive piece of equipment. And you can see the people standing below, just to give you a frame of reference of how big this piece of equipment is. We have done some CapEx on the new builds to date, relatively minor amounts. And the remaining CapEx commitment that we have on our new build investments, including the upsize of the last 4 now is $1.2 billion. This morning, Korea time, we signed the financing for the first 6 vessels, which will be placed in EUKOR. This is a financing we've done with Korean as well as international banks. We are borrowing roughly 70% of the purchase price, and this will be drawn down upon delivery. It's not a predelivery financing. It is a 7-year tenor and the time starts ticking from delivery. So we're locking in financing this year, 2 years in advance of delivery, on attractive rates and the 7-year period will start running from delivery of the vessels. The pricing, we consider to be very attractive. It's term SOFR plus 155 basis points from delivery. And the commitment fee that we are paying in the meantime is extremely competitive, much more competitive than what we have seen on European shores. The remaining 6 vessels will be placed in WW Ocean. Unfortunately, there, apologies to all the bankers in the room, the European financing is not so competitive when it comes to locking in financing now because if we lock in financing now 2 years ahead of delivery, that would actually eat up from the tenor of the financing. So that -- those vessels, we will be financing a little bit closer to delivery. And as you can see on the right, you can see a schedule of payments -- CapEx payments throughout the period and the cumulative CapEx that we have on our new build investments in the period. In addition, we hold multiple purchase options for vessels that are under long-term leases. A majority of these vessels that are under purchase options resides with EUKOR. The total investment, if we were to buy out these purchase options is USD 235 million. And currently, the market value of the same vessels is around $1 billion. We may, of course, consider financing on some of these, but that will be a later decision. Any call it, profit, if you can call it that, between the purchase price and the market value is not recognized separately because under IFRS accounting, this is all baked into the IFRS 16 lease accounting. So you won't see capital gains, but clearly, given the market value of these assets, the options are deeply in the money. And on the right side of the page, you can see the timing of when these options are exercisable. Now I've spent a little bit of time on this in quarterly presentations. But we have a continuous focus within the group of upstreaming cash to ASA. We have financing on ASA level and we have financing within the business units you can see below. At ASA level, we have bond financing. We recently repaid the last portion of the September maturity, so that was not refinanced, but we are keeping 3 bonds outstanding, so we have a curve. In addition, in about, well, a couple of weeks, we will be paying out the dividend for, call it, the second tranche of the '23 dividend and the dividend for the first half of '24, that will leave the accounts on the 10th of October. And as you will have seen, our share price went ex dividend today. Then we have the business units, and I'm not going to go through all the numbers here. But if the -- call it, the main units that are important for our investment capacity, dividend capacity, EUKOR and Ocean in particular. EUKOR is a Korean private company. That means you can only upstream cash via dividends twice a year. It used to be once a year in the system, but we recently changed the Articles of Association as well as the Shareholders Agreement we have with HMG to facilitate upstreaming cash twice a year in order to match the dividend profile from EUKOR more to the dividend policy we have at ASA. So we are looking at any means to upstream this cash, as I like to say in Norwegian, [Foreign Language], poor mother in best part of town with rich daughters. We want to lift the cash up so we can either pay dividends or reinvest in the business as we see fit because we very much view the cash pile we have as something that can be deployed where we see the best opportunities, not just within each segment. So we are continuously working on upstreaming this cash and also, call it, reducing some of the drain on ASA cash where bonds will compete with dividend capacity as a result of which we took the -- took out the last bond now in September. And as you can see at the bottom, the main methods for upstream is through dividends. And in EUKOR, we, of course, have a 20% minority in the shape of HMG Group, so they will also, of course, get their pro rata share of any dividend that comes out of EUKOR. So we are a much more complex structure than perhaps some of our peers, but the main focus within our group is to ensure a continuous upstream of cash to ensure that we have the capacity to pay dividends. So with that, I will stop and -- Anders?

Yes. Thank you, Torbjorn. I think you touched a little bit upon it, financing of the EUKOR vessels, why finance now versus holding back?

Yes. Look, it's fair to say the interest in financing our vessels is extremely strong. We are also doing sustainability-linked financing. And I think it is quite -- Lene's presentation about decarbonization. During my tenure here, my first meeting with Korean banks, you talked about green financing and you basically did not get much traction. But that has really pivoted and Asian banks are also now a lot more focused on green financing. So we have seen a very strong appetite to participate in the financing of our vessels and that obviously translates into attractive terms. And the fact that we can lock in good terms now, 2 years ahead of delivery without it eating from the tenor makes tremendous sense.

All right. That's good. Any questions from the audience to Torbjorn? Nothing? So Eirik goes first.

[indiscernible] 30% to 50% payout ratio. I mean anyone who model your company, you're going to have way too much cash, come 2027-2028, so what -- as a CFO, what do you think you should do as a company in 2027-2028?

Well, first of all, we are looking to grow also on the land base, as we have talked about. And I can promise you, we have continuous discussions with our own Board in terms of dividends. The aim, of course, is not for us to be a bank, so how we deploy the capital is a key topic that I'm not going to sort of talk about any news today, but I can -- only to state that the deployment of cash, how we utilize it, how we distribute it either to shareholders or investing in the business, is a very central topic. And of course, we're now moving towards the end of the year, and we will have to come back on further signals in that regard once we come back with Q4 numbers.

If you look at Wallenius Wilhelmsen prior to 2022, I think, you had roughly $3.5 billion of debt -- or net debt on your 120, 130 vessel operations. Is that the level you see? I mean interest rates are a little bit higher now, but is that the level you still see as efficient or would you -- yes.

I mean, we've obviously been through a very interesting journey. I think the first quarterly presentation I did, we had net debt to EBITDA of 6.4%, and you know the numbers we're on now. We can either pay dividends, we can invest in the business, we can do debt management and working on reducing debt positions that are more expensive than others, refinancing it with a more attractive rate, all of those are tools and levers that we are pulling as we sort of look at the cash position we have today, which, I agree, is a substantial portion, but there's always not a shortage of quarters that are trying to get their share of that investment portfolio, but we do not have an intention of being a bank.

Petter, do you have a question?

Yes, just a quick one on the 2 options still held in yards. Any news on that?

Sorry, say again?

Two further options on new buildings.

On new buildings. Decision has not been made there. This is something that we are discussing with our Board. So with the main announcement today is that we are upsizing 4 vessels. But as of now, we have not made any decision in terms of what we do with the remaining 4 options.

Remaining 4 options or 2?

Yes. Well, 4 vessels. We're talking about the new builds. Yes.

Any further questions or is there everyone keen on getting more coffee? Good. Okay. Let's be back here by 11:10. Thank you for this. And yes, get some coffee, refresh and back here by 11:10. Thank you. [Break]

All right. Welcome back to the third and final session of today. Hopefully, we'll have some more information about the market, but we're also talking about our customers. So first out, we have our Chief Customer Officer, Pia Synnerman. She's going to talk a little bit about how we do our business, but Pia has a bit of experience from Wallenius Wilhelmsen, but you have global experience from Ericsson, where you've been across the world selling their stuff. So I'm pretty sure our sales are in very good hands. So with that, Pia.

Thank you, everybody, and thanks for coming here. I will share with you a bit about our customers, what we do for customers and how we are changing the relationship with customers of building more and deeper relationships, especially with the partner type of customers. We'll talk a bit about the development of the business the past few years, especially on the rate side, which is interesting. And then we will talk a bit about the auto industry and the auto segment and how that puts requirements on us and how we try to use that as an opportunity to develop the business going forward and especially towards growing the logistics business. We have impressive numbers here, but I'll go to the next slide. I want to give you a bit of a color to what we do. Mike talked to the logistics business, which is, I think, impressive part of the company and maybe have a bit of a back seat. When we talk about this company, it's a shipping company, but it has a very strong logistics arm. On this picture, the green lines here show all the voyages we made in 2023. If you are -- if you have good eyes, you can see that there are lines through the Suez Canal here, but we stopped that towards the end of the year, last year. You see the terminals and the VPCs and how the terminals and the VPCs and EPCs are connected to the port and the trade routes that we have. This is to our customers, the reason why many are loyal. It's an extensive network. It is a comprehensive portfolio of services. We serve the OEMs, the car makers of the world and the high and heavy companies of the world. They have production in many parts of the world, and they need to move the goods to from production units to markets. Impressive numbers here as well. I think just the 3 million units handled in 8 terminals is just mind blowing to me. I came here from Ericsson 3 years ago, and I didn't know that we managed this many units and cars. The split between the segments, we have 3 major segments: the Auto, the High and Heavy and the Breakbulk segment. This Breakbulk segment is industrial products, big and bulky stuff that can be put on a trailer or rolled on to a ship. Auto segment represents now 60% of the revenue. High and Heavy, 32%. And the Breakbulk segment, 8%. You see a number of logos here. This is just a selection of all the customers that we have. We have more than 400 customers, but we have a few customers, which represent the vast majority of the business, all well-known brands. There are many smaller industrial companies that we deal with as well. This picture sort of to show the ratio of how many customers or a small number of customers represent a large portion of the business. And what we're doing now is we are intensifying the focus on these customers. We have 10 customers representing 50% of the business, both in shipping and logistics. And through the past 2, 3 years with many disruptions in this industry, we have intensified the work with these customers and stayed even closer. It's been important for them that we have addressed their needs and manage through many disruptions, which affect them quite a bit. Here, we talk a bit about the share of revenue per segment and how it's changed over the past few years. And I think it's important to remember what has happened in the past few years. We had a pandemic and coming out of the pandemic, both during and after the pandemic we had an adjacent industry, the container industry with huge capacity issues. And with the capacity issues in container industry and the spike in rates, we had an influx of cargo to foremost the Breakbulk segment. So you will see an increase in volumes and an increase in rates on the Breakbulk segment in year '20 to '22. Then we, with the Auto, and High and Heavy industry started to have capacity issues in '22-'23 and now '24. There's not enough tonnage to serve all the customers. There has been disruptions in the systems. You have a bridge in Baltimore coming down, and we have the Red Sea situation and a lot of other disruptions. And with this, the rates started to increase in our industry as well. We have taken advantage of this by resetting and renegotiating contracts with both high and heavy and auto customers. And the rate increases you see here from '20 to '24 is on market rate level and much needed. This has been an underpriced industry for quite a few years, and we haven't had enough money to invest in new vessels, which eventually has hit the capacity issue in the industry. Talking a bit about the carmakers. I think we had several speakers talking about them earlier today as well. The car industry is going through maybe the biggest change in the industry ever. The transformation of the car industry is phenomenal. And it leaves both opportunities, but also challenges, and we're affected by that. The competition from the new carmakers is phenomenal. The competition in the industry is phenomenal. We don't think that China is going to slowdown even with trade barriers in Europe or U.S. or Canada. It's going to have a fundamental profound change on the industry. If you, to that, add regional regulations and you have elections happening throughout the world this year, protectionism and other issues, it's more and more complex world we operate in and a more disruptive world we operate in. And for a carmaker today and the customers that we deal with, they seek basic support from us, and they have expressed -- many of them expressed that they want to deal with fewer suppliers and suppliers that are specialized in their field, and we are a specialist in our field. We have used this. We have negotiated many of our contracts now between '23 -- January '23 and towards the end of this year, we will have renegotiated about 70% of all the shipping contracts. And in these discussions, if we go to the next one, we have used the opportunity to, like I said before, deepen the relationship and address the needs of the customer. The needs being more flexibility, but also certainty on capacity and many of them expressed needs for biofuel or decarbonization solutions. And certainly, digitalization is a topic, which is high in the agenda. We have used this in our negotiations and have been able to negotiate healthier contracts and better rates. And I think I know that customers are -- many of our customers have been willing to pay a premium to get certainty and to deal with a customer that can address many of their needs. I want to address is why we talked about decarbonization before. I have the opportunity to visit customers' supply events around the world, and it's really interesting to share or to compare the ambitions on decarbonization. I would say that what happened after the pandemic was a real boom in ambition on decarbonization. And it's real. It comes from many times the CEO, him or herself, expressing this and pointing to suppliers to ask for help because they don't control every part of the supply chain, so they really need specialized companies to help them in the part of supply that they don't operate. We're one of them. And we have pushed for biofuel being 1 component of the contracts that we negotiated. And I must say that the uptake has been way above our expectations, way above our expectations. This is to show the shipping book of business and how we've negotiated. So as said, many of the contracts have been renegotiated from '23 and then spans 3, 4 or 5 years out. And this has been very important to us because we need more predictability. We aim to even out the curves on the cyclicality and our customers as well have appreciated to have longer-term contracts. They also need predictability. What we're doing now is that we are starting to focus more on serving our top customers in selling a more complete solution. We hear from many of the customers that they want to buy more from us. They actually express that. They want more parts of the outbound supply chain to be delivered by us. And many of our customers by either shipping or logistics or both, and what we do in the sales force now is that we, together with the business units, start to discuss how can we expand, how can we become a more complete provider and a more integrated provider. The focus is, as mentioned by Mike, both in organic growth. There's lots and lots of opportunities to grow organically. But of course, if M&A appears as opportunities, we will look into that as well. We do want to grow our share of wallet of the customer, but it's also a true ambition to be a more complete supplier to these customers and to decrease the complexity they have in their world. The digitalization is extremely important. All customers ask for more visibility, they want to track their cargo, they want predictability by visibility. And in a fragmented -- a very fragmented outbound supply chain, this is a challenge, but we will work very hard to improve this going forward. And then as said, the net zero topic is becoming more and more hot. We have met with customers only a couple of months ago in the past few months, which is expressing that they have asks from their customers, i.e., the car buyers for complete green solutions. If they buy a green car, they say they don't want the car to be shipped on the ocean by a dirty, if you will, logistics mode. And so customers are asking us to develop these solutions. And this is very important to us and great because we need big companies to codevelop these services. We will continue to be a leader in RoRo industry and logistics. We want to shape the industry, and I think that with the partnership that we've built with many of the customers and deepened with the customers over the past 2 years, we have a very good foundation for that going forward.

Okay. Thank you, Pia. I was wondering in terms of -- you mentioned the Chinese, you have a lot of Chinese OEMs that have ordered ships, the likes of BYD, you fare those as competitors or how do you view that?

You mean the Chinese buying their own vessels?

Yes.

Yes. No. Well, of course, you should never be complacent. I would say the Chinese have a very ambitious export plan and what they've done is they've secured capacity on ocean. What will happen with those vessels is, we don't know, but they will for sure serve these customers and the export plans of China. It is a constrained trade ex China. So not for now, no.

When talking to customers, do you feel that -- you say that you want to have an increased share of the wallet, is it an easy sell or is it something that differs from customer to customer?

It's differs from customer to customer. But I think many of the customers we have, the big customers are asking for more complete solution. They want more of a one-stop shop. This is a fragmented part of the supply chain. It's also not optimized. So if they can find a player who can provide them with more complete solution studies, but you have to have a good product.

Okay. Any questions from the audience? I mean, Pia is the one to ask about our customer experience and how we approach customers and the whole integrated part of the system. So anyone? Very quiet, so that means that you've done a very good job in enlightening the audience. Next out is we're going to get an external view on the shipping markets by Espen Wessel, who's from Hesnes Shipping. Brief introduction, Hesnes has a 50-year history as ship brokers. They specialize in automobile shipping. Espen has been with the company since 1997. Prior to that, he was with UECC. And yes, he's been in the car carrier business for his whole career. So welcome, Espen.

Thank you. I am coming from Hesnes. We are a shipbroker company located in, let us call, Tonsberg. We have -- it's not that big company, we have 10 people dedicated for this service, and we only focus on car carriers. So we try to cover this market and today, we will talk about the deep sea market. And we divide that when we talk about vessels in the deep sea market. We have put a cut of 3,000 units intake or more, less that we call the short sea market. They have a different kind of pattern, saving pattern. So we don't put them into our system. I will have 3 small topics. I will talk about the order book, I will talk about what we call the bottleneck, and we will also have a quick view on the supply and demand side. When we talk about the fleet, this is the development number of vessels from 2000 until 2024. As you can see from 2010, almost flat. No new buildings were coming into the market. But now we have 190 vessels in the order book, 27% of the existing fleet when we count a number of vessels. This is a huge growth we have in front of us. If we do the same figures with intake, it's even worse, then it's 36% of the capacity, which we have today is now in the order book. This could be -- we could be afraid of a situation like this. And what we will do is to talk a little bit about that to see why is it like this and what is the problem? This is the delivery as it was of yesterday. We are some kind of conservative when we talk about new buildings. In Hesnes, we don't have -- we only have what we think is confirmed vessels we put in the book. But you see it's a big number in '25 and '26, 50 or 60 vessels will come each year. It will take time before they are involved into the service. So -- but we then put a lot of new vessels into the market, and the majority of them are coming in China where the bottleneck are starting in the far east and China especially. So every day, almost everyday -- third day, it will become a new vessel ready for loading into the market. This will have an effect. But when we see the order book here, you see that this is in white, it's the existing fleet, which we have today and the order book is in yellow. And you see it's very limited vessels that are past 28 years by today. So we have relatively few scrapping candidates ready if the market is getting worse -- not worse, but getting really bad if the demand side is losing out. But in front of that, we have in -- you see in '97, '98, '99, a huge number is coming, which are turning 28 years. And the average scrapping age for this segment is about 27, 28 years. Some vessels will trade much longer, some trade a little bit shorter. But it's fair to believe that 28 years is an average for a while. The yards that are building car carriers today are mainly China. More than 80% of all car carriers order are in China. Korea is relatively small with 5 and Japan has the rest. And we can see that the development and the -- yes, Chinese yards are attractive and Korea and Japan is turning to be more expensive. But of course, it's on Korean and Japanese players that want to use Japanese yards as their main yard or supplier. We have tried to have a look on the efficiency about -- from the yards, try to see -- can we see some improvement or the other way, is the market now that you want to postpone or have the vessel later delivered. This is more or less all vessels that has been delivered in the last -- in '23 and '24. Number of days from the keel was [ late ] to delivery has been reduced somewhat from 340 to 290 days. We cannot count on ordering or contract date because if you have a series of vessels that will be a funny figure, so we have to go to keel or we have to go to water when where the vessel is placed on water and when was it delivered. And we have more efficiency here. We can see that we have gone from 160 to 120 days. So some kind of efficiency are in the yards now that they are able to reduce the number of days they need for -- make the vessel delivered and then we go into more [ funny ] things. Why is it all-time high now because the market is very hot, has been for a while. We see time charter rates that are, let us call $100,000 a day. When the last peak, we saw $40,000 a day, and we thought we will never see that back. And now it's more than double. In these 10 years, it was only 2% added tonnage in number of vessels. It was 6% in capacity. 138 vessels was delivered and 123 was demolished. And new vessel is always, as you saw earlier today, is bigger than the old one. So in capacity wise, it's 6% versus 2%. We have the same graph here. Limited numbers that has gone fairly flat. And when this is flat, then we have the demand side. In exports, some 50% increase out of Far East, China, Japan, Korea, almost 4 million units -- it was flat out of Japan. It was a reduction of 300,000 units, more or less out of Korea. Figures from Japan and Korea is quite accurate. There they have official figures, which is quite easy to get hold though. China is much more difficult. But in this period, it has gone more or less from 0 up to more than 4 million exported in total, 4 million or 3.8 million in total increase. When the demand side -- or sorry, the supply side is flat, and we have demand side that are increasing like this out of the bottleneck. We are turning into a tough time. And here, you see in blue one, that is the Japanese export, Red is Korean and China is coming from steady 500,000-something and then you see the [ hockey ] effect climbing. Last year, the first year that China was bigger than Japan, 4.9% versus 4.4%. In total, this was the export. The forecast for this year is like this. And then we will see, instead of [ $12 million ], we will see in total [ $13.4 ] million. And you see that Japan, Korea, more or less flat, the growth is purely in China. And one Deepsea vessel is in average transporting between 25,000 and 30,000 units a year. And then it's quite easy to -- if you have 2 million or 1 million -- if you put [ 25,000 ] then you need a lot of vessels to transport 1 million units. But of course, this peak here and on top of a market that are quite hot, then we need vessels to be able to cover the demand side. And then how can we try to look into the future. This is -- we buy forecasting figures of sales and production from a company called Global Data. This is from their figures. They say that the production in China increased a lot in '22 and '23, and now it's more flat in the end, 2029. In the period, it was 26%, but it's only 4% left growth in production for the rest of the period. And then will this -- what will then be the result for the export? Here is a simple way to calculate is to take the production and you take the domestic sales, and you make it easy to say that domestic sales [ swallow ] have one source. That's the domestic production. If it's any left, we export. If that is the case, you see that the growth in China in the bottom export is very limited. It's almost not 1%, it's 200,000 units. The forecast is saying that Korea is going down with 300,000 units, 9%. In the period, it was almost 5%, but now in total, it's only 300,000 units in the growth potential in -- from the bottleneck. It's one missing thing here. The domestic market could change if the domestic market is going down, it will be more units ready for exports or the behavior of the population could be that they want to have more import cars and then the production in China is more ready than to export. So it's a simple way, which is not correct. It will not be that way, but it will tell us something that the potential now for further increase out of China is more limited than we saw 2, 3, 4 years back. And then just to jump a little bit. Some mentioned it this tariffs going on. On the top there, that's year-to-date figures that 37% is going to Europe, 13% to North America and the majority of North America is going to Mexico. So it's limited what is going to the U.S. sorry, the last one is in yellow, electrical cars. So 26% of the cars exported out of China is electric. Per month, electrical cars to the world is like this. 13% of the volume to North America -- Eastern North America, it's only 60,000 of them that are going to U.S. and only half of that is electric. So it's a very limited effect what Biden administration is saying that he wants to put 100% tariff on an electrical car to U.S., the number is very low. Europe, more or less the same. 37% is going to Europe, 400,000, but is also here only 50% that are electric. So in the first elements of this tax tariff regulations, if it's coming, is limited. And you all have seen the trend now in Europe that electrical car is not so popular at least not so popular as it is in Norway. So IC cars is taking some market share again. Here, you see out of the total export out of China, electrical cars to Europe is the yellow one. Then I think we are here. This is how we see the supply and demand. The way we in Hesnes, do we start with a situation where we have control. Before the COVID, all car carriers in the world were sailing. We're having, okay time. That's -- we were close to 100%. All volumes, we were able to lift everyone was happy. The economy is another thing, but -- all vessels were sailing. Then we get COVID, it fall down in the way we calculate to some 85% or something. Some vessels were layup and it was a lot of hiccups and things. But then a quite good growth. And we see that today, it's very -- or we have more than 100% utilization, and we will have even higher some months in front of us. But then, as I showed you earlier, a lot of newbuildings will be delivered, it will press down this graph or the line. But here, with more than 100%, a lot of units are not lifted at least not on car carriers. So how is that working? In China, a lot of cars are lifted by containers. With some bulkers, it could be with some trains or other way of transporting it. It's something between 1 million, 1.5 million cars out of China are now in container. And if you produce cars, you don't want to have them in containers, if you have a solution that is in same price, which is on a car carrier. The damage ratio is much lower, if you roll on the unit instead of putting into a container and lift it up. So you want to put it back to the car carriers. With this and we put 28 on, as I mentioned, because that's fair to believe that this is the scrapping age. Then I'm not concerned. In this period until 2029, the general growth in the world need approximately 70 vessels. We have a hidden capacity in China about 60. And we have 70 vessels that is scrapping candidates until 2028. And this is versus [ 190 ]. This is in balance. And what we also see that we always have some hiccups, if it's the Red Sea effect or we have some stinky bugs in Australia, we can have lack of water in Panama. It's a lot of things. We have congestions in ports, distribution on the inland side, take longer time than before. So we have a lot of things that are pushing the efficiency down. Environmental things are coming, reduce the speed, you get better ratio. So it's a lot of things that will help us, but this [ 95 million ] will not go very low. And we think that it is more likely that we will have a situation from '28 and onwards that will have more newbuildings will come, will flattening out but the market is very -- all the operators feel that the market is okay, when we have in our way of calculating 92% efficiency. That's a good market. So when we see 85%, we know it's too low. 92% is okay. And we need a lot of new buildings in 2018 and onwards to keep up with a world fleet of 700 vessels, which is the total now. So we are not concerned about the future, but we think that all the players need to be -- have some discipline in what they order with delivery at a special time and you as an analysts should not be shocked if the rates -- time charter rates are going down a little bit because of the development of the yellow line. Today's level is too high, and it's only one vessel that is the last one. The industry, this is industrial shipping, is surviving on totally different levels than we see as a time charter top level, which you heard rumors out in the market. So we think that we will see some dip in the rates, but the market is quite strong, and we think it will continue to be strong. And actually, that was all. Thank you.

Thank you, Espen, for your insights. Much appreciate it. We're getting towards the close of today's presentations. But before you go to lunch, we will have some closing remarks on Lasse, our CEO. But we also have a few questions that you can pose to our speakers. So Lasse feel free to wrap up.

Yes. Thank you. I noticed there was only one applaud today, and that was the guy saying the market will be strong. So that's -- we'll make sure that we tell that next time. First of all, thank you for coming. I hope you have had an insight into what we are dealing with the industries we are part of. And I can only repeat this and stress this. The industry is -- I mean, we normally say, well, this time is different and it's not. But this time, it is different. And we can prove it. I mean we are transitioning from equipment being driven by fossil fuels or vessels or a product that we transport into electrically driven. We see compute cars becoming computers, and we see that there is a complete change in the dynamics of who is allowed to trade, who and where the equipment is sourced from. So I can assure you that when -- as Pia said, our customers are challenged and frustrated. And prior to 2020, [ outbound ] supply chains were not an issue. It was horribly managed, very unstructured, but there were overcapacity in all elements. So a poorly working process could be fixed by just adding capacity, and we were one of them. Those days are gone. So our customers need more help, and that is why we wanted to give you a particular insight into the logistics area today because they don't really look for shipping or tracking or processing, they just want to get their product to the market. And I can assure you that companies like Volvo or John Deere, where they spend their top talent and their time, that's on product development. It's on sales and marketing, it's on optimizing their factories. But when that job is done, they're done. They just assume that the product gets to their customer. It doesn't do that in the way they want to. So we believe -- and you saw the case that Mike presented, with one customer, we have had 20% annual growth for 20 years on growing the logistics business with them. And that tells you a tale that companies need or help. So if you are to remember a few things from today, one is that we will not be one thing to all. We will be an integrated supply chain partner to some -- we will be a strong logistics partner to many, and we will be #1 player in shipping for a lot. We see large opportunities to grow. We have a very strong position in the U.S. and North America. So when I say the U.S. is actually Canada, U.S. and Mexico on logistics. We see large opportunities in Europe. There was a question around China, but how can you deal with Chinese? You just train them and they take over your knowledge and then you're out. Yes, that's in China. And that's what Mike actually said. We try to do processing in China. It's hard. But what the Chinese need is help to get into export markets. And the Chinese will never become better than Europeans in operating in the European context. So we, for instance, just to give an example, the fact that the Chinese now are putting up factories in the Europe, is a huge opportunity for us because they need a partner like us to figure out how do we do post production operation in Europe for Europe. Then the second thing I'd like you to remember is that we are taking the world from [ 7,110 to 11,700 ]. So that's the slogan for today. Most of the vessels around the world are 7,000 new builds. We are now upsizing to 11,700. And why do we do that? Well, it's because we believe that even when we decarbonize, we need to be a cost leader. And because we will decarbonize fast, we need to be a cost leader, and we need to make that as cheap as we can. And then the assurance Lene gave you, saying that our customers will pay for it. They do pay for it. They've always paid for it, and they will continue to pay for it, and they want to pay for it. And it was just mentioned briefly, but we're now introducing the bunker adjustment factor, the one we use for every customer in the world. Historically, that was just hydrocarbon fuels. Going forward, we will tell our customers that when you do business with us, this is your adjustment factor, and you will slowly but steadily pay for more and more greener fuels. And why should they? Because they have the same strategy? Most of the brands you saw up here, they have strategies of reaching 0 by 2040 and they need a partner to do it. Torbjorn got some tough questions on capital allocation. So I will not look forward, but I will just help you looking backwards and remind you of one thing. The last 12 months, we have paid all 3 cash flow to equity back to the shareholders. That's not a forward-looking statement, but a backward-looking statement show that we are really working hard to remunerate all our shareholders with the fantastic cash flow we have. And then Pia talked about our customers, and they want us to connect their dots. Today, they are buying shipping and logistics and different parts of us, and we have not been able to help them to connect them well enough. We will have to be better at that in the future. So if I were to sum up, I would say that we have a history as a shipping company. We have, over the last 20 years, become a shipping and logistics company. And if I were to give one projection for the next 20 years, we will be shipping logistics and technology company. What will drive value to our customers and to ourselves is by introducing digital services, digital capabilities in our operations and in our interaction with our customers.

[indiscernible] Well, they come up -- you talked about the ROCE future and it's challenging, but what keeps you up at night as except for rock music?

Yes. Maybe this is the wrong audience for that, but what keeps me up at night is safety. We have 12,000 people working in high-risk environments every day around the world. And this is something that we truly and deeply care about. And every time we have an injury, I feel it personally. So that's my biggest worry to wake up one morning and we have a big accident.

Okay. Let's open up for questions from the audience. Is there any questions before we adjourn for lunch. Seems to be quiet. This is your chance people. You have all these nice people here that knows everything about Wallenius Wilhelmsen. This is your chance to pose your questions.

There's one question in [ model brakes ] that we would like to want to address? And that's a good question because you said that we do a lot on our existing fleet efficiency improvements, and we didn't address that much. So I will not go into that in detail at all, but that's very correct. We do a lot on our existing fleet to improve the efficiency every day, and that's one of our main ambitions. Improving the bulbs, improving everything basically with the ship so that we can reduce emissions and reduce consumption of fuel. Maybe we should talk about that as well next time.

We will. And we are working on a very detailed -- we have a detailed plan. We will present the detailed plan on how we will actually get down by more or less 50% in 2030, same way in 2040. Just to give you some higher numbers, today, we have taken out 5% to 10% of the fuel improvement in efficiency. With the current technologies we already know and have tested, we think we can take that to 15 to 20 and now we're experimenting to take that even further with harvesting wind on existing vessels. And next year, we will have the first big wind sale on one of our vessels Tirranna. 40 meters high, 560 square meters or something like that. an enormous installation, and we have 12 vessels, low bridges, so we need to be able to pull this thing down first in the world. And I can assure you that there's a lot of smart people working with that not us, but our vendor Ocean Bird, which is basically Alfa Laval technology.

Yes. We do have some questions from the web, but we'll try to respond to those in writing, but there is one for you Torbjorn you hold the mic anyway. So and it's all about -- what about your cash? When are we going to pay extraordinary dividends?

Well, I think I addressed that in my earlier session. We do not have the ambition to be a bank. The deployment of our cash is something that we continuously discuss with the Board and something we'll have to come back to as we get closer to year-end.

Please show up on the quarterly presentations, then we will -- that's where we will share the stuff. But as Torbjorn said, we have a policy today of 30% to 50% of our net result paid as dividend. We have, over the last occasions, put that at 50%. And again, not a forward-looking statement. We also have in our policy that we could do extraordinary dividends. So we will have a very active view on capital allocation. And I can assure you, we will not sit on cash and invest them in poor projects. If we don't have really good opportunities to grow and increase the profitability of our business, we will return the cash to owners.

I think on that note, I think that actually ends our 2024 Capital Markets Day, 2 minutes ahead of time. So that's not too bad. I invite anyone to come and have lunch with us. The online audience. Thanks for listening, and thanks for watching. I would also like to thank everyone who's made this happen. So there's a lot of people that has done a lot of work to make all these presentations and everything goes smoothly. So thank you to all of that. And with that, have a nice day.