Ladies and gentlemen, welcome to the DSV Q3 2026 conference call. I'm Moritz, the call's call operator. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Jens Lund, Group CEO. Please go ahead, sir.

Good morning and welcome to our Q3 call. We are as usual, Michael and I, to present the results and I'll go through some of the first slides here and then later on, Michael, he will cover some of the other points on the On the agenda. So let's quickly go into it and we can start basically by I think the most important topic for many of you during the quarter. We can say that the service levels on road, they are back on track and the quality issues that we had, they are resolved. But of course it has had the consequence that our synergies will be realized a little bit later on the roadside because we've had to have focus on solving those issues. In general, on group level, the GDP is up 2.3%. When we made the business plan for acquiring Schenker, we said we were going to lose certain volume or GDP at the end of the day. And now, let's say in the Q3, it's really great to see that we're back on the growth trajectory when it comes to GDP. On the EBIT side we've grown significantly more because of course the synergies that we realize drives a higher conversion and I mean at the end of the day also the EPS has come up and we're right now at 11.5% growth so we also see that it trickles all the way down to the bottom. This has led to a situation where we are now going into the fourth quarter, so we've narrowed our guidance. We've done this of course because normally you start the year with a broader guidance and now we have more certainty when it comes to the result. So the guidance is now between 24 and 25 billion DKK in EBIT. If we look at the cash flow, we've delivered a solid cash flow here in the quarter, even if the freight rates are still elevated, not least on ocean freight. And we've started the first share buyback program since we acquired Schenker. So all in all, that were some of the highlights from Q3. Just wanted to say a few words on the integration as well. I think we are continuing as per plan. There's only a few countries outstanding, no major countries left on the integration and much of the customer integration also done. So good progress on that one. Of course, then we just talked about the issues that we've had on road that leads to a little delay in the realization of the synergies. So that will happen now and be finalized in 2027. Basically, the expected outcome and also the costs in relation to remain the same. But of course, a little bit delayed also on the special items into 2027. If we look at the financial highlights for the quarter, for the group, I think the earnings growth we just talked about and I think also that the GEP has grown. This is something that we are very focused on here in the headquarter, that we add more value to our customers and of course then also that we convert that into solid growth and the operational result. I would say that the ANC division has delivered as expected and CL has delivered a very solid result, I should say. And then of course the road results, they are clearly affected by the quality issues that we've had. The cash flow for the quarter is 6.4 billion, and I had already talked about the revision or basically the narrowing of our guidance, so that's really the financial highlight. If we look at ANC, I think one thing that is important, and we have also just added a slide on global products, that used to be part of the results for the divisions. And therefore, if you look here now, you will say, well, the gross profit has grown 0.2%. But if we'd adjusted for the GP that we've taken out on ANC, actually we've grown 2.8% year over year. But that's always what happens when you move some of the volumes around, that it's a little bit blurry. What's the baseline and what's the actual figures? And are they fully comparable? So we just added this information on the right side here. If we look at basically the conversion ratio, it continues to increase and we are aspiring to get up to the 50% target. Also during the next year we will definitely see an impact of the continued work we do on productivity. And then of course the EBIT margin also trending towards the 10%. If we look at air freight, we grew the GDP 4% actually during the quarter. We did shred still. We'd had this where we sanitized the portfolio and this actually continued a little bit into July. After July basically we finished this and I would say the general trend on the air freight is that we've seen The volumes into Europe are still under pressure and not least the volumes related to automotive. On the other side of course we've seen progress on the technology vertical while we've grown our volumes and as you can see also the yield at a Very solid level, almost 9,000 per ton. And overall, as I said, the GP has increased by 4%, so we are quite happy about that. If we look at the ocean freight, the GP has Thank you for watching. What we are working on right now is we are very much focused on the commercial activity in the ocean for it to make sure that we swing the trend round and I'll say both for air and for ocean we've seen that we are slowly getting into a situation where we've basically leveled out and we should hopefully during the next quarter start to see the inflection point where we get growth. The yield is at 4,100 kroner at the end of the quarter. So basically if you look over the cycle it's more or less the same as we had Q3 2025. and basically the composition of VAS and freight markup is also in the one-third, two-third range, so one-third is like the freight markup and two-thirds is the VAS.

Then we come to road.

Here on road we can see not least on the GP what impact the issues that we've had has on the GP in our company. I would say that the difference is probably let's say approximately one third related to extra cost due to the quality issues so they should go and then the remaining part is actually that we lack volume in the

In the network.

So we need to have this commercial focus now that we've solved the operational issue. We've put that behind us. It's very important to get that message across that the quality in the network is solid. So now it's the commercial activities that we're looking into. And when we look at the commercial activities, I think it's also important here to state How this normally works is that you try to fix the quality issue first. Now that's solved. Then what you want to work on is basically that you want to work on making the sales calls. In the beginning, when you have quality issues, it takes a while before you start the sales course. So we started that in September here, really intensified the interaction with the customers, building up the pipeline. Then once the customers, they accept our proposals, and here you have to remember that we have the strongest group of network days in Europe. So it's not that we can't get appointments, the customers, they do want to talk to us. Then basically we have converted some of that and then we will have to make the integrations if it's a customer that needs an IT integration before we go live. So that cycle will probably take at least 90 days. So what we sell right now will then come in, let's say, in three months. So it has a delay impact. We can look at all the KPIs. NPS has improved. and just also there's been some concern was the spillover on the NPS to other divisions. It has not spilled over, so they basically have a very solid NPS development in the other divisions. But of course the road net promoter score has declined, but right now it's actually, it's had the trough and now it's increasing again. So that's really the status when it comes to road. We just put some KPIs here. And I can tell you that normally, historically, the performance has probably been more in the 92% range. So having 94% in default is very solid. But as you can see, the trend line has been increasing all the time. We were concerned We were very happy in August when we saw the 92.4, but we were concerned when the volumes come back after the summer holiday whether it would be sustainable. And actually it's proved that the initiatives we've taken have continued to improve the delivery quality. So that's really positive. So well done to the road division, I would say. If we take the contract logistics, here you can see that we've actually grown the EBIT with 50%. If we exclude the properties, we've grown it with 42%. So a very, very solid performance. Two things have driven this performance. One thing is that we've continued to sanitize our portfolio and basically cleaning out business that don't deliver the desired outcomes. And then the other one is that we've seen that we've managed to compensate for all that volume we've taken out with new volume in particular for the hyperscalers. So these two things in combination, they are really important. I think what's also important for you to notice that we see that basically the pace that we grow with the hyperscalers is going to continue. We can see the pipelines, they're very very solid. So I think you should expect that the CL division will continue this journey that it's on. And of course that's very positive because one of the things that we were criticized for was the low return on invested capital. And now you can see that there's a better connection. We are now at 10.9% on the return on invested capital and the comparable figure was 6.9. So of course this growth in EBIT, but also the focus on the capital that we've deployed, it has really helped us a lot. and I think you know that it wouldn't surprise me if we managed to take what can I say another step up at year end and it would make me very proud you know to to trend towards the the 15 percent that we'd set as a target for the contract logistics division and take another step in the next quarter so well done to contract logistics on that then I'll just say last call people they were asking a few questions about these global products, and rightfully so. So we've just taken a slide and said, listen, what kind of activities is it that needs an enterprise approach so that it's not part of a country-based setup and that should have a life on their own? So here are the products that we move to, what can I say, a separate structure. It's called fairs and events. This is where you have to have speciality knowledge for fairs, events, all these kind of things, and to have this knowledge across countries. This is very important. On the parcels, it's the same. We are 3PL on parcels. And also here, you need perhaps a more network approach in order to continue to develop that. And then of course the custom is always quite important as well. Normally it's part of a country-based setup and we've decided to make an enterprise function out of that. And this is then also so that we can serve the customer end-to-end. And also the technology we have allows us basically to produce on the same platform, so kind of a single file system for all of that. So these are some of the main services, actually we also have some supply chain engineering that we can do as well, add some value and some 5PL capacity, but these activities are a little bit sort of smaller. So now I've said a lot and it's time for you Michael to go through some of the numbers and other stuff in detail so please have a go at it.

Thanks a lot Jens and I will immediately skip to the next slide here with an overview of our P&L for the first nine months of 2026. A couple of highlights on that slide that I would like to elaborate a little bit on. Of course, you can see that the revenue has actually increased 10.5% as a consequence of the rate environment and also to a certain extent the activity level. That also has an impact on net working capital, which I will come back to in a second. And Jens, you already touched upon the EBIT growth, which is also nice to see. But also, if you look at profit for the period has actually increased 900 million compared to the same quarter last year, which is also good to see. Also the conversion ratio for the group, I think that's also worth highlighting that we have increased from 27.9 to 32.6, driven by all the initiatives and the synergies that we have worked on. So that's also nice to see that. And of course, the net interest costs is higher than last year due to the fact that now we have You can say the fully financing of the Schenker acquisition included for all the period, which we did not have last year, obviously. And then, Jens, you already touched a little bit on it, but the EBS, now we actually We can see that we are growing on a 12-month rolling. Our EPS has increased 11.5% compared to the same period last year. For many, this is what it is about. Then I will go to the cash flow statement that we have. Also a little bit of highlights on that one, starting out with the adjusted free cash flow, which amounted to 6.4 billion in Q3. Look at the cash conversion ratio. And I promise that that will continue. But of course, it's nice to see that we can collect some money here with the cash conversion ratio of more than 128%. Network capital slightly increased due to the freight rates. If you look at the ratio a little bit further down on the slide, you will see that the ratio is actually Thank you very much. I also would like to highlight that we have actually on the gearing ratio, it's now 2.46 actually. Now we can only have one digit here, but it's 2.56. So during the quarter, since last quarter, we've actually reduced with 0.2 on the gearing ratio. And also worth mentioning is that since we started the integration, we have reduced net interest bearing debt. with 12.6 billion DKK as well. Small in all, I think it's nice to see these kind of numbers. Of course, we would like to have them even better, but it's positive. The cash flow and the current state of our financial situation has also led to the fact that we have started a launched share buyback this morning of 1.5 billion. It's good to be back on that. I know that people are saying that we are still 2.5 on gearing ratio, but I would like to highlight that we have the journey, the path that we are on, where we have decreased our gearing ratio for the last couple of quarters. It's a positive trajectory that we are on. We do stay committed to the capital allocation policy heading towards two times in the gearing, expectedly during 2027. Of course, the ambition is to do it in the first half of 2027, but that is our aim. The reason also being for this start of the share buyback is that we have an obligation towards our share option program and we have to buy back shares to be able to deliver on those obligations. So that means that we have now you can see on the slide here that in 2025 there was not much share buyback so now we will see we have these columns again with the share buyback hopefully. But I would also like to highlight that this is like I've said also last quarter we are now in a position where we every quarter assess according to our capital allocation policy so that we have started it's not necessarily you can say that we will continue that journey but of course we I expect that we will have solid cash flow going forward as well. Then Jens, you already touched upon the next slide here on the guidance where we have narrowed the outlook to between 24 and 25 billion DKK, giving the slightly delay due to the road integration, also have a spillover impact on the special items. We are slightly delayed on those as well. So that is the overall number. And some of the assumptions, of course, we have some synergies that we have already realized last year and then on top this year, 4 billion more. And then we have the additional 1 billion that we postpone into the next year. It's still a volatile world that we live in, highly uncertain about the You can say the macro environments and interest rates and so forth. So that's, of course, also worth to bear in mind. In terms of R&C and volume for the last quarter, we assume volume grows to be slightly below the market in R&C and also yield slightly below what we have in Q4. Our aim is still to deliver on GDP growth. That's very important to bear in mind here. And for the road, I think you touched upon it as well already. And contract logistics, we also expect to continue the growth that we have seen so far. And of course, the tax rate will remain as the 28 is still impacted by this integration that we have. And then we will be able to come back to a more normal tax rate later on. And back to you, Jens, for the key takeaways.

Thank you very much Michael. I just want to reiterate that road operations are normalized so we basically now can focus on the commercial activities that we are having and of course we can also then focus on driving the productivity up as well. So these are the two key topics for the road division and for GSV also very important. And then of course the guidance, we talked about that. And then the share buy back program that we've launched as well. So I think we have confidence in what we're doing. So with that said, I think we should move on to the Q&A session. And then we can spend some time answering your questions. Please go ahead.

Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questionnaires on the phone are requested to disable the loudspeaker mode while asking a question. In the interest of time, please limit yourself to one question. Anyone who has a question may press star and one at this time. And the first question comes from Jamie Robotham from Deutsche Bank. Please go ahead.

Good morning, gentlemen. Thanks for taking my questions. I was just after a few numbers, please. So in air and sea, How much of the 3% volume decline is deliberate revenue dissynergies or sanitizing the portfolio versus the SME activity levels declining and the Asia to Europe weakness? And in road, could you quantify the amount of synergy shift to 27, the amount of customer volume losses you've been seeing, and the likely amount of gains on property disposals for next year for 2027? Thank you very much.

That was a little bit more than one question the way I counted, but we will try to answer them anyway. I think on air freight, if we look at the development over the quarter, we actually saw the largest decline in July. And that's then more related to attrition. I would say it's been more around the zero to one percent situation in August and September. And that was basically, what can I say, tapering off of this attrition. So if I should say three percent, I would probably say that the two percentage points based on this sort of conversation that we're just having here, would be the remaining part of the sanitizing and then now we are hovering about the zero to one percent decline of business in the air freight right now. So that would be the answer to that one. I think on the road side, we do see that it, what can I say, takes some time to regain that volume. It will happen during next year. But also to realize the synergies will take a little bit extra time, so approximately in the neighborhood of one billion will be pushed into next year. Because not only road is impacted, also the back office functions that have to support that journey, what can I say, will have to keep extra resources as long as it's not completed the integration. Then when we look at the volume decline, we've probably seen a volume decline just shy of a two-digit figure on the group head side in Rhodes. It is something. When it comes to the properties, then we don't necessarily plan for any gains. But as you can see, there has been some this year as well. But we have none in the forecast.

Thank you very much. And the next question comes from Patrick Crusoe from Goldman Sachs. Please go ahead. Hi Jens, Michael.

In road, normally seasonality in Q3 heavily skews to September, I think. And would it therefore be fair to assume that most of the underlying 300 million profit in Q3 in road was made in September? And therefore, when we're trying to look at an exit rate from the quarter, to have an exit rate per month of somewhere north of 200 million EBIT, would that be a fair way of looking at it? I don't know if it counts as a second question, but Michael, if you could just clarify your comments on Q4 R&C yields, which I didn't fully get. Thanks.

I think I'll answer the road, Michael. He can answer the R&C bit. I think normally on the roadside we are of course always a little bit impacted by the summer holidays in July and August. You have a lot of fixed costs. So you're quite right that the result produced on the roadside is basically then produced in September. Now you get two good months as well, October and November. And we've also regained a little bit of volume, so that should also help the figures a little bit there. And then December is going to be a weak month. So if I should model it, I would probably add, if you take the clean figure that we talk about, the 300 million that you also had mentioned, I would see a slight improvement in the next quarter, but not a lot based on this. Where are we at? Because the sales cycle is three months. So let's say we've had quality issues before the summer holidays. The customers, they come back from vacation on the 1st of September. We are now convinced it's good. Then we start selling in September. Then the first impact of these sales efforts, they are in reality going to come maybe in December, but also in January, if you look at that kind of math. So it will take some time to fill the network up, but it's a strong network we have. So we get the sales calls and we can see from the pipeline and the work that is being done that it does pay off.

Thank you, Patrick. What you have to bear in mind here is the normal seasonality on the yield side, which we do see on the sea side. And then also, you can say we have had congestion, which is being a little bit lower, and Suez is slowly opening up again. And that will, in our world, have an impact on the yields compared to Q3. And on the air side, there might be less downside in air also what Jens spoke about. We have peak season and also, of course, tight capacity. So that is kind of some of the underlying assumptions to the thing that we also have written here in the outlook.

Thanks.

And the next question comes from Alex Irving from Bernstein. Please go ahead.

Good morning, everyone, as well. I'd like to talk about the move from cargo-wise to tango, please, in air and sea. I understand that a little better. How much of the air and sea volume is currently flowing through each of those systems? Especially, I noticed that your other external expenses in that division rose by 100 million kroner quarter on quarter from Q2 to Q3. Shouldn't they be falling as you move to your own IT infrastructure? Or how else can you explain this, please?

I think today we approximately produce in the region 20-25% of the volumes on Tango. It's predominantly the larger clients that we have on that platform, so the more complex ones. We've not started the move of any rollout yet. I think we've not indicated that to the market either, that that rollout would start. So we've said that we would want to improve Tango and it will also coexist with CargoWise for quite a while. So that we de-risk, what can I say, the rollout and the two systems they coexist today. So that's basically what I can say on that. Then of course if you look at the cost, I think it's, what can I say, a development where we'd seen the ANC division being a little bit under-allocated beforehand in the Schenker times. and now we've changed the allocation model to the DSV allocation model and this is basically what impacts the figures. It can also be that now we've shifted a little bit more volume onto cargo wise and as you know that comes also with what can I say a very solid cost per transaction so that impacts it a little bit.

And the next question comes from Muneeba Kayani from Bank of America. Please go ahead.

Muneeba Kayani Good morning. On road, I just wanted to clarify your comment earlier, Jens, that one-third of the impact was additional costs and two-thirds related to volumes. So is that from kind of a Thank you so much for joining us. The $4 billion would have been the full EBIT bridge for 2027 and what has it come down to now if it's a mid-2027 full run rate impact? Thank you.

I don't think we guide in full for 27 right now, you know, that will come a little bit later. But I can try to help you with some information so that you can perhaps do some work. So I would say if you look at the quarter in particular, July was still impacted by a lot of express deliveries. Of course, when we got it cleaned up, There were still in August certain terminals that were not in what we call green. This is when you are above 92. So you also had additional cost in August and also some in September, but of course very little. And now it's totally gone. There is no extra cost because of bad quality. So we would estimate that this number would probably be between 200 and 300 million DKK. If you then look at a quarter like this quarter, I would think that, you know, under normal circumstances, we should have made one billion where we were. Then I think all the numbers they add up if you strip out, what can I say, the property in this calculation. Then, of course, going into next year now, we had to have all this focus basically on The quality. Then of course all the productivity initiatives, they have been slowed down because the first thing you want to make sure is you have your delivery quality in place so that you have solid quality. So there are two tracks now. Now we drive productivity, so what does It costs to produce a shipment, and then of course we need more volume into the system. And these two things, they will be the main focus for next year. But I'd say to drive the productivity up, it's something that happens quarter on quarter. It's a lot of activities, so what was my collection delivery cost, what's my productivity on the terminals, what's the utilization of the line holes, etc. So these things you're working on with a very structured plan. It's the same team that solved the default that works with this. So I'm quite certain that they will be able also to deliver on those tasks. And then on the commercial side, as I said, it takes some time for the sales cycle and I would probably presume To regain the volume that we've lost, it will probably take six to nine months into next year before we are at the same level as we were before we saw the attrition. So it will take some time, but we will grind our way through it. So basically, you can look at the road integration in a way, I would say, as if you've almost Jens Lund, Frank Sobotka, Michael Riis, Vishal Sharma, Helmut Schweighofer

The next question comes from James Hollands from BNB Paribas.

Please go ahead. Thanks so much. Just a couple of clarifications. I think there, Jens, appreciate your color on the road customer losses. If we go back to Michael's pre-closed call, there seemed to be a suggestion that there may have been some bleed of customer losses elsewhere in the group outside of road. And I think, Jens, you're saying today that didn't happen. Perhaps you could clarify that for me. Thank you.

I'm not really sure what exactly you're referring to. If we look at bleeder customers, the area where we normally would look at bleeder customers would be on contract logistics, where you would have, what can I say, activities in warehouses that you operate, that basically operate, what can I say, at a very low margin and sometimes even at a minus margin. So this is basically also what we describe on the CL side where we say all this loss making business, all these things that are not delivering the returns that we require, this volume we're basically terminating now. So I think that's typically where we have that topic. and that's then part of the CL improvement that you take some business out that maybe loses money or has very low margin and then you replace it with business that operates at a normal margin. This is in reality what you can see in the CL figures and look at what an impact it has.

And the next question comes from Jacob Black from Void for Research. Please go ahead.

Hey, thanks for your time. So on air and sea, when do you think the division can get back to market growth rates on volume now that we're largely through the integration? Thanks.

We're growing GEP already. I think this is very important to state that we do that. This is the most important metric. Then of course the growth in GEP at the end of the day comes from two things. It comes from volume and yield. So I think we've finished sanitizing, what can I say, the business. If you look at the yield uplift, it's been tremendous during the last year on the ANC side. So that's a job well done. On the volume side, we are hovering around, what can I say, it's basically plateauing now. So we've come out of the trough and we're basically at the inflection point. And whether that will then be in Q4 or as part of the normal tender season into Q1, I can't tell you, because we will have to see how it all pans out. But this is basically how I would model it. So if you're a little bit conservative, model it into next year. And if you're more positive, you can and maybe think about, you know, a slight increase this year.

Thank you. And the next question comes from Christiane Deltru from UBS. Please go ahead.

Hi, thank you very much. And apologies to come back to some of these points, but I think most of us, in terms of synergies next year, we have around 5 billion euro per year incremental, four out of Schenker and one the other. and it's not fully clear to me should we, roughly how much do we take out our Schenker? We take one billion out, align with the special items that you moved or more or less any type of color you could give us there. The second one, the bare argument on roads is if you exclude the express cost that you explained earlier, your run rate is somewhere around 500 million clean EBIT per quarter. If I annualize that, I get to two billion. If I don't get too much synergies next year, I could be at $3.5 billion next year or free. Am I missing anything, any moving parts from this bridge? And probably just a short one. You mentioned, Jens, R&C conversion ratio 50%, the target. Do you believe in some of the quarters next year you can already be at 50% conversion R&C or that's something more for 2028, 2029? Thank you.

We take the conversion ratio on A&C first. If you look at how it's been increasing, then there is also plans for productivity improvements into next year. Jens Lund, Frank Sobotka, Michael Marlow, Jesper Riis, Vishal Sharma, Helmut Schweighofer but it will go towards the 50% I can tell you that. Then I think on the road side we talk about what can I say the impact of what we're doing. I think basically if you look at these two things that are outstanding you will have the operational basically improvements that we need to make so that's kind of like one track and then basically also on the commercial side what is the impact of the volumes that we are missing. I think if we look into that, then to get an impact out of those two initiatives of 500 million on top of what we have this year, that would be a bare argument. I would agree to that, as you said, that's the bare argument. I think just as we fixed the default, we can definitely improve the operational efficiency. And if I look at the impact on the sales side, I also see that we can get the volume back into the system. Then if you try to model that, I'm quite sure that using those assumptions, you will probably end somewhere else than the two and a half. But that's, of course, how you run your model that determines that.

And then just to clarify if needed on the synergies, I think we've stated that last year we had fully a run rate of 800 million. Then we have said that during this year we expect at least 4 billion. Now we say 4 billion. and the remaining part would then come into 2027 as from January 1. Now we say we delete it with 1 billion, so that will of course come in later during the year in 2027.

And the next question comes from Alexia Dogani from JP Morgan. Please go ahead.

Thank you for taking the question. Just again on synergies, You mentioned in the statement that you're committed to the 9 billion of synergies, but there's a kind of offset, partly offset by cost inflation and investment in contract logistics. Could you just clarify the kind of magnitude of offset that you see? And then I'm sorry to also again clarify on the financial impact in 27, But the CMD, you helpfully gave a slide, slide 136, giving kind of the phasing. Obviously now there's a delay. Are we basically saying the delay is one billion, so one billion moves from 27 to 28? Or is it a one billion realization in 27 and the remainder three is in 28? I think that would help everyone make sure their model is aligned with your plan. Thanks.

If I start with the last one first, the one billion, which is delayed, that is, of course, have fully impact from 2028. But we do expect that we will start, you can say, earlier. But the full run rate will be in 2028. That is clear for the one billion.

And did that answer the question?

Was that the answer? Or was there another one? Sorry.

Yeah, it was the net effect. Basically, you've added a statement that says you committed an accident, but there's an offset.

What is the offset? If you look at the contract logistics for a start, then you would see that they have increased the EBIT of 50%, right? And they've also had a staff cost which is higher. So I think you can look at that and then see this is what we do see. The expected synergies in the beginning, when we made the plan from CL, we have taken them out because the CL has grown the business. So that will take that one out. And if you look at, I think the run rate is 100 million on staff costs alone for this quarter. Secondly, we do see inflation also on the other elements of the cost base. For instance, take 3% into that, I think, and then you have the building blocks to do it.

Okay, thank you. And just to clarify one last point, R&C and contract logistics at the end of 26 will have delivered your plan in terms of the financial impact. Is that right for the synergies?

Yes, you can assume that.

Thank you.

And the next question comes from Marco Limite from Barclays. Please go ahead.

Hi, good morning. Thanks for taking my question. I've got a follow-up on these synergy figures, because we're saying that in 2026, you guys are still planning to achieve 4 billion synergies, so guidance isn't changed, but road is clearly lagging already in 2026. So how are we going to get to 4 billion despite road being below? Does that imply R&C or CL? Are you ahead of the plan, or how do we get the $4 billion? We're a weaker route. And then, still related to that, I think this quarter is the first quarter where your total FTE number is not coming down quarter to quarter. I understand contract logistics is up. Nice to see organic growth is good. But why FTE is not coming down in R&C, for instance? And therefore, yeah, shall we expect Thank you.

If you look at it from a total level, then you would see that we have reduced the number of FTEs with around 800 during the quarter, so white collar. So I think that's at least what you need to look into. Then, of course, there is, if you look at the ANC, we also explain a little bit about the global products during the quarter. We have also had a You can see a move for some of those into that area.

Okay, and on the 4 billion 26 despite the road being quite weaker than expected this early year?

Sorry, I can't, it's a little bit difficult here.

So the 4 billion figure that was in the guidance was probably a little bit, what can I say, on the low side. Now you can see it's more accurate. It might be that we say approximately 4 billion. So let's say that it might be a little bit less, which could also be the case because, as you say, that the road has been delayed slightly. So I think we then decided to keep, what can I say, the same number instead of, let's say, writing 3.750 or whatever the number could be. So that's really how we've come to the guidance.

Okay, thank you. And the next question comes from Lars Heindorf from Nordea. Please go ahead.

Yes, morning, thank you. On the road tradition, To get back to that, I understand that you appear as quite confident of regaining some of that volume that you lost. But, I mean, hey, this is a fairly fiercely competitive market that you're operating in. I mean, will you be able to regain that volume without any kind of impact on your GP per consignment, i.e. price or maybe payment terms, which will impact the cash flow? Yeah, maybe just a few comments on, you know, what exactly the path back to getting those and regaining those volumes. And then as a follow up on that also, I mean, the cost per consignment as we enter into Q4, where is that compared to what you want it to be?

If we look at basically regaining the volumes, Our sales activities, the pipeline that we have, it's basically how we normally would conduct business within the various segments. So I should say that it's not like we go out, what can I say, with terms and conditions that are materially different because then it has, what can I say, a longer term impact. So we really have to go out and Thank you for watching.

So that would be that topic.

If you look at production cost, at least what we have planned for in our rolling forecast is that we should be able to lower our production cost between 5 and 10% on what we have due to inefficiencies in the network. So it can be on collection delivery. It can be also, what can I say, the activities in the terminal. And then one of the major topics is also our line haul setup. Jens Lund, Maybe around index 90, and we should definitely be able to drive that, let's say 5% up, if you look at that. And can be other topics as well that we talk about, so the number of stops per route, etc. So on the connection delivery bit. So I would say these plans they are all what can I say committed by by the team as I said that solved the default and they are now working actively on this and we can already see some of the first things being executed so I'm quite confident on that.

Can I just follow up maybe on the cost side in road the there's a sequential decline in staff cost into the third quarter which is I think Is that just caused by normal seasonality? I mean, it tends to be lower in Q3 or into the holiday season. And should we expect the staff cost to increase again into the fourth quarter?

I think basically I'm not 100% certain on that because the holiday accrual makes it very difficult for us to be 100% certain. I would more want the team to get back to you on that. But we take people out as part of realizing the synergies. I can tell you that on the FTE side. So we continue that journey now on road. But how the holiday accruals have sort of impacted Q3, it has a significant impact on it. So I would not want you to make a mistake in your model. So please reach out to the team, then they will be able to give you the exact number.

All right, thank you.

Then the next question comes from Christian Godiksen from SAP. Please go ahead.

Yes, thank you. Also a question on the road part. So obviously there is quite a big Delta to the 2.5 billion for the road APD in 27, which was Christian's question. And then to your own 6 billion that you communicated on the back of the EQ2 numbers. I guess as you pointed out, I guess the main moving part is the trajectory on winning back volumes. So just wanted to to get some more feel on how comfortable you are in winning back the volume and at what potential pricing discount to win that back volume. It's just, I guess, on the basis on the operating leverage being very high in the groupage part of the business, which I guess, based on the underlying numbers for Q3, must have been loss-making as the FTL and LTL business has been marginally less impacted.

Yeah, I think I've said it a couple of times now. What you do when you do sales is that basically you want to have, what can I say, basically the visits, you want to have the appointments with the customers. We can get those appointments so that we get the meetings. Then what we do when we speak to the customers, we can now explain them how the quality is. The quality is very high in the network. So we have very good product. It's the strongest network in Europe. So in a market, for example, like Germany, we have less than 5% of the market. So of course, there's a lot of volume you can go after that we are not in contact with. Then there's the existing customers that maybe have down traded a little bit with us. They can now see the quality is back. And then of course, there's the customers that have switched provider. We can see that on the segmentation, all the larger customers, they've stayed with us. So all the complex volume, they stay with us. So it tells us something about the quality of the network and the service that we provide. It is more, let's say smaller customers that perhaps can operate in one or two markets that has a great opportunity to choose another provider. So of course this is a focus area for us that we now go and see those customers in those markets and make sure that we basically deliver on them. Then the sales cycle, I explained it takes three months. But then you follow it in the pipeline how it's going and you see the conversion on it and then also some of these things they lead to IT integration so that we need to be ready to exchange data. with the customers in a digital format in an efficient way. So that's in reality sort of how we're doing. And when I speak to the team, I see a lot of energy. I see a lot of activity in the pipelines and all these things. So yes, I think that we have the right product. And yes, I think that we can deliver basically on regaining the volume. I think that's what we're all working on.

Thank you. So just to follow up on that, I guess. So to your 6 billion, if I wanted to make a bridge for that for next year, I guess it's the loss of volume in terms of the sales cycle on that and then the delay of synergies. That's basically the two parts I need to deduct from the 6 billion number. Is that the right way to think about it?

Yeah, I would do it like this. I would say, listen, there's some less volume going in, and then basically the GP is a little bit too low in the beginning, and maybe also a little bit on the conversion because, of course, we've been delayed in harvesting the synergies. But there are two types of synergies in road. You have to remember that. It is basically that we then merge the networks, close down the terminals, and take out the overlap. We're already very advanced on that, but of course that has been slowed down due to the quality issues that we've had. We are now, I can just tell you, to give a bit of confidence, we've gone live in Poland, merged the two networks, for example, down there, big networks. There's been no issue at all. We've merged some of the big terminals in the network and I think we've solved all those things. We were approximately 450 terminals when we were two companies and of course we have to go down now to 280 right now. So I think we are right now somewhat over 300, so we've definitely done a lot of the work and I think we've taken learnings from the things we've done and made sure that we don't see quality issues.

Perfect, thank you. And just maybe on the incremental margins too, when I model the volume part, is it fair to assume that an incremental EBIT margin would be around 50% for the groupage part of the business due to the operating leverage?

Thanks a lot. You're welcome.

And the next question comes from Ulrich Back from Danske Bank. Please go ahead.

Yes, thank you for taking my question. So, in terms of the targets that you presented at your capital market today of another 9 billion in savings from IT and network optimization, How should we think about that, given your comments about cost inflation partially upsetting the Schenker cost synergies and the delayed integration of road? Should we also subtract cost inflation here? And how much should these targets be delayed? Thank you.

I think we still shoot for completing what we need to do in 2030. So I would say that that's definitely still the aspiration. I think if we look at now completing the Schenker integration until next year, we should be Thank you very much for your time. Then of course you're quite right, over time we should see a little bit less cost inflation. We have actually seen quite a bit going into the Schenker transaction and normally we should try to offset some of that with productivity gains. So I would really not want to now dilute the target of 9 billion, so that's kind of the feedback you can get on that.

Much appreciated. Thank you.

And the next question comes from Sita Ekblom from Morgan Stanley. Please go ahead.

Thanks very much. Hi, guys. Just two quick questions from me. So it seems that the recovery of profitability in the road business is now very dependent on these customer wins, getting the volumes back with those express costs out of the system. I appreciate that you're talking about a sales cycle of sort of three months and needing six to nine months to sort of fully recover those volumes. So I get it takes time, but is there anything that you can give us Thank you so much for joining us. And then can you just talk about the year-on-year progression or lack of progression in your sea freight GP yield? You talk about a third being rate, two-thirds being value-add. Rates are higher year-over-year, and that yield number hasn't really moved. So just a bit of color for what's going on in the underlying mix maybe would be helpful. Thank you.

Yes, I think very good questions on that. What we look about ourselves is, of course, You have different things you look at when you look at sales. The first thing is the NPS. So what's the customer perception of us? The NPS has bottomed out and it's increasing. Just want to make sure there was a spillover concern also on the NPS, whether it had impacted our CL and our ANC business. I would say they've more or less stayed the same, slightly down. So I would say not really an impact. On the road side, of course, the NPS has been declining quite a bit. So now it's troughed, it's coming up again, and we don't see any escalations from the customer. So I would say under customer satisfaction, we are now coming back again towards the normal levels. This is the first thing. The next thing you want to do is you want to have leads and you want to have sales calls. So right now we can say that the number of sales calls is 2 to 3x up on what we normally do. So we have much more commercial activity when we go and see the customers. Then this normally feeds into a pipeline where you have different stages of the conversation. And then of course the closer you get to a contract, what can I say, the more value it has in the pipeline. So we can see that the pipeline now is much more solid than it's been before. So also that is going well. Then of course at the end of the day you want to do an IT integration and you want to get the volume in and see what is the actual volume that we get based on those efforts here. That's sort of the KPIs that we are following. And as I said, we are two to three eggs up depending on which number of countries it is that we have on visits. And I would also say that the pipeline is definitely showing that we have the largest pipeline that we've had since we acquired Senka, the value of it, the qualified value of the pipeline. So yes, that would normally then convert into volume that you can see into the figures. This is how we We steered, if you look under the hood. Then I think on the ocean freight, I think that you basically We had 4,100 in the same quarter last year. Now we have also 4,100, I believe, this quarter. What we monitor is basically the VAS and basically the freight markup. And right now it might be, normally we say one third. Jens Lund, Frank Sobotka, Michael Marlow, Jesper Riis, Vishal Sharma, Helmut Schweighofer The rates are fairly elevated and I think they're definitely going to also provide for a good yield in the fourth quarter. We will then see what happens in the market. There's been so many speculations about the rates coming off and I think the carriers have done an exceptionally good job at keeping them elevated. So I think that's what I can say right now on the rates.

Ian, sorry, just to come back on your point on, like, the customer points. All of those qualitative comments are very helpful. Is there any way to put quantitative metrics around that? Because I think that that's really, you know, the key to recovering profitability. Like, you know, the best pipeline since we closed Schenker, I mean, that's good to hear, but I don't know what that actually means in quantum. And, like, you know, two to three times more customer sort of You know, leads, etc. Is there any way to think about what volumes do in Q1? Or is it just way too early to answer that question?

No, that's fine. It's fine. But let's say we had index. I'll try to make it just in some index numbers. Let's say we had index 100 in volumes. Now we have index 92. This is where we're at. Then it might be that that will go to index 93 or if we are lucky 93.5 in Q4. And then the rest will have to be recovered in 2 to 3 quarters. This is what the value of all the words that are said means. Does that make sense?

Ladies and gentlemen, this was the last question for today's Q&A. I would now like to turn the conference back over to Group CEO Jens Lund for any closing remarks.

Thank you very much all for listening in. I think that we've had a good conversation about some of the important topics and good questions as well. So thank you very much for that. We will now focus on delivering the results for the fourth quarter. And in relation to that, I will really also to extend gratitude to our staff that have worked exceptionally hard in a very difficult period, not least in the road division. So really well done to them and I'm quite sure that the whole team is very eager to deliver the outcome that we all look for in Q4. Thank you very much and have a good day.