A.P. Møller-Mærsk Stock

Welcome, everyone, and thank you for joining us on this earnings call today as we present our second quarter results for 2026. My name is Vincent Clerc. I'm the CEO of A.P. Møller - Maersk. And with me in the room today is our CFO, Robert Erni.

Let me start with the overall highlights for the second quarter. At the macro level, market demand continued unabated despite the disruptions from the war in the Gulf, driven by Far East exports on almost all trade lanes. Exports from the Far East grew for the third consecutive year, while the backhaul volumes were stagnant or negative. This has led to significantly more imbalanced trade flows and increased congestions in various regions, including Europe, the East Coast of South America, West Africa and the Middle East as volume levels are challenging the limits of ports and land site infrastructures in these regions.

These bottlenecks quickly translated into significant and sustained increases in the spot rate from mid-May, which not only had a significant effect on this quarter, but we expect will affect the outlook for the rest of the year, which I will get to shortly.

If we look at the financials, on the back of higher spot rates in Ocean, we delivered an EBITDA of $3 billion and an EBIT of $1.6 billion. Free cash flow turned positive again at $549 million, supported by higher earnings, albeit partially offset by a buildup in working capital driven by higher receivables as a consequence of higher rates and by bunker inventory because of higher energy prices.

As you may have seen, we have upgraded our guidance for the full year. Based on market volumes growth of about 4%, we now guide for an underlying EBIT of $4.5 billion to $6.5 billion and a positive free cash flow. We'll return to the guidance later in the presentation.

But looking at the operational highlights by segments. In Ocean, we leveraged the agility of our network and made the necessary operational adjustments to adjust to the new situation in the Middle East and successfully increased volumes in other corridors. Weekly volumes are now consistently above pre-war levels.

As we indicated last quarter, we successfully implemented commercial measures during March to recover elevated costs linked to the Middle East situation on contracts as well as on our spot business. Separately, the continued strong market demand and more imbalanced trade flows have led to increased congestions in multiple geographies and a second round of increase in the spot rate from mid-May.

On the Red Sea, we have gradually been reintroducing services through the Bab-el-Mandeb Strait with 4 services to date, the first one being announced in -- on July 6. These make up about 1/3 of the volumes that would ordinarily be transiting through the Strait and the Suez Canal. We continue to monitor the security situation in the region and are prioritizing the safety of crews, cargo and vessels in every transit that we make and in the decisions on the return of other services.

In Logistics & Services, the broad commercial momentum that the team has built over the past quarters supported growth across the portfolio. We saw continued margin improvement in both of our new segments of Forwarding and Landside, which is contributing to further EBIT margin improvements to 5.1% for this quarter.

The Gulf region has been impacted by the effective closure of the Strait of Hormuz, but we have managed to protect our customers' supply chains through the use of land bridge solutions.

In terminals, we continue to grow the portfolio through a new greenfield investment that we announced in Da Nang in Central Vietnam. And as far as the existing portfolio goes, we delivered strong top line growth while demonstrating disciplined cost control to drive improvement in both profit and margins.

Now looking at the strategic priorities we had set for ourselves at the start of the year, starting with Ocean. On Grow, we have delivered good volumes growth at around 4% on the back of strong market demand and operational delivery, as we quickly adjusted for the disruption in the Middle East.

On protect our high asset turns, the volume growth have outpassed the fleet growth by 2% points, thanks to the efficiencies that Gemini has delivered. Utilization remains very high at 96% with strong discipline in our fleet management. Gemini is now fully in the base, so future asset turn uplift will likely be less pronounced, meaning that volume growth will be more in line with fleet growth in the coming quarters. Moreover, this with utilization already at a high level, the task for us will be to ensure that we have the capacity to grow, and we will use various levers to ensure that we continue to do so.

On focus on profitability, higher spot rates from the strong market demand and the ensuing congestion drove strong Ocean earnings for the quarter. The cost increase from the Middle East conflict on contracts was recovered through surcharges and bunker formula. Finally, with Gemini now fully implemented for a 12-month period, we can confirm that the Ocean cost benefit came in at about $950 million, just above the upper range previously communicated of $700 million to $900 million.

Turning to Logistics & Services. This quarter, we have introduced a new reporting structure that we announced earlier in the year. Going forward, we will report Logistics & Services across 3 segments, namely Forwarding, Solutions and Landside. At high level, Forwarding comprises Air and Ocean Forwarding product solution -- products, while Solutions comprises Contract and Lead Logistics products and Landside comprises inland and ground freight products. This change is designed to give greater value for customers through clearer and better product categorization, simplify our Logistics & Services portfolio and organizational structures internally and improve comparability with our peers in the industry. Through this, we will also give you a better view and understanding of where growth and margin progressions are coming from across the portfolio.

As you will recall, our priorities in Logistics & Services are to improve growth and accelerate margin improvement. On the first priority, the business delivered very strong revenue growth of 15% in the quarter, driven both by volume growth in most products as well as higher rates. The high growth this quarter is a testament to the growth platform that we have been building over the years. And whilst we are pleased with the growth over the past couple of quarters, we are certainly not complacent and continue to work hard to grow this business sustainably. As I mentioned, Landbridge solutions helped mitigate disruptions from the Middle East situation, illustrating the value of the integrated model for our Ocean customers.

On the margin improvement, we continue to deliver progress with this quarter being the ninth consecutive quarter with year-on-year EBIT margin improvement. Our margins in Forwarding and Landside are strong, but we have to acknowledge that Solutions still needs improvement. The focus here is on converting the warehousing pipeline, reducing white space and improving operational efficiencies as the new business is won and ramps up. Overall, the business has shown that it can grow and improve margins at the same time. And these remain key priorities for us for the remainder of the year.

Turning to terminals. The priorities remain to grow through existing and new locations and to maintain long-term profitability. The segment continues to perform well in that regard. It delivered strong revenue growth of 11%, driven mainly by revenue per move, illustrating the strong pricing power on the terminal side now as most terminals are full. New locations, including Rijeka in Croatia are ramping up and helping compensate for volume impacts from disruptions in the Middle East, most notably our lower volumes in our Gateway terminal in Bahrain. We also continue to expand our portfolio with our greenfield investment in Da Nang, Vietnam. I'll add a few more words on this one very shortly.

On profitability, terminals continued to deliver a strong return on invested capital of 14.8%, while at the same time, investing for growth. As we have signaled, with the series of new investment we undertake, we expect some pressure on the ROIC during the buildup phase, but return on the existing portfolio will remain strong.

Let me briefly highlight that Da Nang -- let me briefly highlight the Da Nang facility, which is an excellent example of the type of long-term infrastructure investments we want to achieve in terminals. APM Terminals, together with our local partner, Hateco Group, won a competitive tender process to develop a new multiuser terminal in Da Nang in Central Vietnam. The port is strategically located in a region of Vietnam that is growing fast and is poised for long-term economic growth.

The concession agreement with the Da Nang government gives our consortium exclusive rights to operate and expand Da Nang container ports for 50 years. This builds on the partnership with Hateco following the opening of the Hai Phong terminal in North Vietnam last year. The terminal will include 8 deepwater berths with a total throughput capacity of more than 5.7 million TEU per year once fully built out. Our terminal will serve the growing Central Vietnam gateway market as well as the neighboring countries of Laos and Cambodia, Thailand and Myanmar as indicated on the map.

The Phase 1 comprising Berths 1 and 2 will already go live in 2029. This is exactly the type of locations where we see long-term value creation, a strategic gateway for a growing market and an opportunity to build a state-of-the-art green and smart container terminal with a partner we know well.

Before I hand over to Robert for the financial review, let me take a step back and talk more broadly about the developments in the Ocean markets that have led to the change in outlook and financial guidance for the year. Container market demand has been extremely resilient, this growth being driven by exports from Asia. This has continued relentlessly despite various events such as the war in the Middle East or a new round of tariffs. Demand out of Asia grew 6.2% in Q2 alone, and our weekly volumes today are above what they were prior to these events. This is not a pull forward, but real underlying demand and has led us to increase our expectation of growth in the container market from 2% to 4% earlier in the year to around 4% at the end of June.

Additionally, that growth continues to be imbalanced with headhaul growth far outpacing backhaul. This means that terminal volumes are growing far faster than container market volume growth given the need to return an ever-increasing number of empty containers on the backhaul. This growth and increasing trade imbalances comes on the heels of about 15 years since the financial crisis where investment into terminal capacity has lagged.

With market demand growing faster than terminal capacity, we were bound to hit a bottleneck at some point. To illustrate this, cumulative headhaul growth from the Far East over the past 3 years, so since 2024, has now been around 25%, with the cumulative global terminal capacity growth only at 10% over the same period. This clearly shows the extreme challenges that some terminals are facing today. Many of them are completely full, resulting in growing congestions in some of the key nodes of our network, which is impacting the global network and not just the local situation because of their criticality. The effect of these disruptions will not be linear. And when a key node like Shanghai, which today has a 12 days waiting time, is affected, this will result in sharp rises in rates.

Given the resilience of demand, the degree of underinvestment into terminal and the time that it will take to bring terminal capacity online to match this demand, it means that rate events such as what has happened since May will become more frequent in the years to come.

As we look at this year, this is what we've been seeing. The combination of strong head haul demand led to increasing congestions in many key ports, which, in turn, led to sharp increases in freight rate and finally led to our upgraded guidance. In effect, the bottleneck in the supply chain has -- is now moving from ships to the landside. And this cannot be debottlenecked quickly. And so we believe that we are seeing right now a structural change with the rate environment becoming more benign, albeit still with a lot of volatility remaining.

With that broader market perspective, I will now hand over to Robert, who will take you through the financial review.

Thank you, Vincent. We had a good second quarter with results stronger in comparison to both the prior year and the first quarter. This performance was driven by all 3 segments, but in particular, Ocean, as higher spot rates and volumes translated into better earnings and stronger cash generation.

We delivered revenue of $15.8 billion, up 20% year-on-year, supported by strong demand in the container market, higher spot rates in Ocean and continued growth across all our segments. The strong revenue growth translated into higher profitability. We delivered EBITDA of $3 billion and EBIT of $1.6 billion, driven mainly by Ocean, while Logistics & Services and Terminals also continued to perform well. Fresh -- free cash flow was positive at $549 million compared with negative $373 million last year, reflecting the stronger earnings. Our balance sheet remains strong with $18.5 billion of cash and deposits and a net cash position of $1.5 billion.

Turning to cash flow. The strong results also translated into improved cash generation in the quarter. Operating cash flow was $2.3 billion, supported by EBITDA of $3 billion. Relative to EBITDA, this implies cash conversion of 75%. The lower cash conversion compared to the last quarter was mainly due to the increased working capital, reflecting higher receivables following the increase in Ocean rates and higher bunker inventory because of higher bunker prices.

Gross CapEx was $931 million, in line with our annual guidance, while repayments of lease liabilities amounted to $863 million. After all of this, free cash flow was positive and better than both last quarter and the same period last year. In addition, we returned $367 million to shareholders during the quarter, of which the majority was through the ongoing share buyback program.

As I mentioned, the increase -- the increased earnings was mainly driven by Ocean. So let me spend a few minutes on what happened during the quarter. Revenue increased to $10.5 billion, up 23% year-on-year, mainly driven by rates and further supported by good volumes. Average loaded freight rates increased by 22% year-on-year and 32% sequentially, driven by strong spot rates across most of our trade clusters, particularly Latin America and intra-Asia. Loaded volumes increased by 4.1% year-on-year to 3.4 million FFE, supported by strong market demand driven mainly by Far East exports.

Despite various cost headwinds, unit costs at fixed energy decreased by 1% year-on-year. Note that if you exclude the positive impact from the extended useful life of our vessels, which was implemented this year, unit costs would be slightly up year-on-year. As a result, earnings increased significantly over the first quarter, and we delivered EBITDA of $2 billion and EBIT of $935 million. The increased profitability was mainly driven by the strong development in spot rates, while the commercial measures with contractual customers compensated for the higher cost -- higher operating costs resulting from the Middle East disruption. Finally, gross CapEx was $663 million, and whilst lower than last year, remains within the scope of our annual guidance.

The year-on-year improvement in Ocean earnings becomes clearer when we break down the main moving parts of the bridge. The largest positive contributor was freight rates, which alone had a positive impact of around $1.6 billion on EBITDA. This included compensation for higher bunker costs, elevated insurance premiums, longer dwell times as well as other transshipment and network costs associated with contingency routing. Strong volume growth also contributed positively, adding $185 million. These benefits were partly offset by significantly higher bunker prices following the oil price surge back in May. Bunker prices were up 44% year-on-year, resulting in a negative impact of around $612 million.

Container handling costs also increased, mainly reflecting congestion in terminals and higher storage costs across the network. Network costs were broadly stable as higher port charter and transshipment costs were offset by 4% lower year-on-year bunker consumption owing to Gemini network efficiencies. Taking everything together, the strong spot rate environment and continued volume growth more than compensated for the elevated cost base during the quarter.

Turning to Logistics & Services. Logistics & Services continued to make steady progress during the quarter. The business is growing, and importantly, continuing to improve profitability at the same time. Revenue increased by 15% year-on-year to $4.2 billion, driven by volume growth across most of the portfolio. EBIT was up 24% to $217 million, up both sequentially and compared to the previous year. Likewise, the EBIT margin increased to 5.1%. The improvement was driven by top line growth, productivity gains, cost discipline and continued efficiency improvements across the business. This was also the ninth consecutive quarter of year-on-year improvement in EBIT margin, reflecting continued operational progress across the portfolio. As we said before, our focus remains on profitable growth and continued margin expansion, particularly in the parts of the portfolio where we still see significant improvement opportunities.

On a Segment basis, Landside was the strongest contributor to margin improvement, benefiting from landbridge solutions offered across the Gulf region. Overall, this was a good quarter with revenue growth of 15% and EBIT growth of 24%. But we are not complacent and continue to target further growth and improved profitability.

So looking at our new segment performance across Logistics & Services. The performance differs across Logistics & Services. We continue to see strong performance in both Forwarding and Landside, where revenue growth has translated into solid profitability and margin progression. Forwarding delivered revenue growth of 32% and an EBIT margin of 6.4%, supported by good development in both Air and Ocean Forwarding activities. Landside also delivered a strong quarter with revenue growth of 14% and an EBIT margin of 6.3%, reflecting solid execution across the portfolio.

The picture is different in Solutions, where revenue increased by 11%, but profitability remains too low. The EBIT margin decreased to 1.7%, while -- which primarily reflects white space associated with new warehouse capacity together with the slow conversion of the commercial pipeline. As a result, our focus remains on improving pipeline conversion, increasing utilization across the network and reducing white space costs.

While there is still work to do in Solutions, the performing in Forwarding and Landside demonstrates the earning potential of the portfolio when scale, productivity and disciplined execution come together. So overall, the message from this slide is that Logistics & Services continues to move in the right direction with the next stage of margin improvement coming from improving the profitability of Solutions.

The final segment that I'd like to cover is Terminals, which once again delivered a solid performance during the quarter. Revenue increased by 11% year-on-year to $1.4 billion, supported by both volume growth and higher revenue per move. Revenue per move increased by 7.1%, reflecting higher rates and increased storage revenue. At the same time, volumes increased by 2.2%, driven mainly by North America and the continued consolidation of Gemini volumes into Lazaro Cardenas. On the cost side, cost per move increased by 5.3%, mainly driven by labor inflation across the portfolio.

Taking these together, EBIT reached $458 million, equivalent to an EBIT margin of 31.6%. Compared with last year, absolute EBIT is broadly stable, while the margin decreased. It is important to remember that the second quarter of '25 benefited from a positive joint venture one-off of $45 million. Excluding that item, the EBIT margin was roughly stable year-on-year despite the inflationary cost environment.

Return on invested capital was 14.8% compared with 15.4% a year ago. The slight decline reflects the ramp-up of new investments where capital is employed ahead of the full earnings contribution. Gross CapEx was $122 million compared with $141 million in the same quarter last year. Overall, the business continues to combine the resilient earnings, attractive returns and disciplined investment in future growth.

Having reviewed the performance across the business, let me finish with our updated outlook for the year. We continue to see a fundamentally stronger and tighter market backdrop than we expected at the beginning of the year. Since our June guidance upgrade, the market dynamics, Vincent described, have become more evident, reinforcing our confidence in the outlook for the remainder of the year. Based on the strong first half performance, better visibility for the remainder of '26 and our continued expectation of container market volume growth of around 4%, we are upgrading our financial guidance for the full year. We now guide for an underlying EBITDA of $10.5 billion to $12.5 billion, underlying EBIT of $4.5 billion to $6.5 billion and a positive free cash flow. Our cumulative CapEx guidance has remained the same. It stays at $10 billion to $11 billion for '25 to '26 and the same for '26 to '27.

With that, we conclude the financial review, and we'll proceed to the Q&A. Operator, please go ahead.

[Operator Instructions] Our first question comes from Parash Jain, HSBC.

Congratulations on solid set of results, Vincent and team. My question is, if you can help us understand your decision of returning to Suez Canal, although gradually. What has changed in the last several quarters or years? Because if anything, what we have seen is heightened tension, not only on the Strait of Hormuz, but also on the Red Sea. In fact, the vessels flowing through has come down to a pretty low level. We have not seen a similar move by many of your industry peers also. So if you can help us guide how shall we think about this. Is it a beginning of bringing all the vessels into it or it's -- you are testing the water with a few vessels at this point of time, if you can share any color?

Yes. Thank you for the question. So we have today about 1/3 of the volumes or 1/3 of the services that we normally would have going through the canal that are sailing through the canal in both directions every week. And that is the part of a gradual return -- full return through Suez. All the analysis that we make and all the stakeholders on the military and intelligence side that we speak to will tell us that as it is today, the conditions for a full return through the Red Sea are met. And that is why we are sending these services through. We don't test the water. We don't compromise on the safety of our crew, on the safety of our ships or on our customers' cargo. But we feel that these -- we believe that these conditions are met and that the recent developments in rhetorics and attacks on the ground from the Houthis are targeted at different segments and different products than what we exercise, and therefore, that we are not a target at this stage.

I have also to say that this is a very volatile situation. And this is an assessment that we make every day, every time we send a ship. We make the assessment whether the situation is still what we believe that it is for that day and then decide to send the ship on -- every day, we can start to decide to go back around the side of Africa if we felt that the security situation would change. So for us, we will see -- we will move towards a gradual full return to Bab-el-Mandeb and Suez.

The next question comes from Cristian Nedelcu, UBS.

I have one question on Ocean capital allocation for the next few years. If I analyze your order book and the age profile of your fleet, I calculate that you're going to have roughly around 12% market share in Ocean by 2030. And I believe it used to be 18%, 19% pre-COVID. You also flagged today the structural congestion that helped Ocean rates. So I guess my question is in terms of capital allocation, how should we think about the next couple of years? Are you happy with having just 12% market share in a few years? Or do you think you need to step up and allocate more capital to Ocean?

Thank you, Cristian. It's a very good question because, as I mentioned in the speech, I think we -- or in the presentation, what we have been able to do with Gemini is actually break this and be able to gain and carry more volumes on a fleet that is growing slower than we are actually able to grow the volumes. But with the current utilization and asset turn, we're starting to reach the limit of what the current fleet can do. And if we want to -- if we believe that the rate environment is going to be more benign in the years to come because of the Landside bottlenecks that we see and that we want to protect our position, then we will need to continue to renew our fleet and to invest a bit of capital as well into maintaining not only the replacement of the fleet, but having some level of fleet growth in there.

The next question comes from Alex Irving from Bernstein.

A related question to the previous one. So given the starting point, insufficient terminal capacity worldwide, what does that mean for the evolution of global fleet? We can all see the record high order books, but do you think that fleet growth from here basically just takes down asset productivity because there is not the terminal capacity to serve the expanding numbers of ships on the Ocean? Or do you think that we end up with capacity getting built that ultimately ships do result in higher capacity, higher throughput, higher container moves and pricing pressure on freight rates? Just trying to understand that dynamic a bit better.

I think -- let me try to see if I can answer that. We saw during COVID that when the market volume suddenly increased, we started to hit the -- or to stretch the limits of what the land side could absorb. And you will remember the long queue that there was in Los Angeles and in many other places around the globe as a result. That's simply because at that time, we hit the ceiling of what the landside could absorb.

The normalization after COVID basically alleviated that, and we thought we would be free for this for quite a while because of the normalization. What has happened is over the last 3 years, the exports out of the Far East have grown by the 25% that I mentioned in there. And we are now getting to gradually to a place where some of the key nodes that we have, the big ports that we have in our network, they are back into a situation where we are stretching the capacity of what they can cope with.

And the fact that trade has become more imbalanced means actually that the container -- that the demand for volumes is actually bigger for terminals than it is for us because they -- we only count the full loads when we say around 4% market growth. But for terminals, that around 4% market growth will be 7%, 8% because the trade becomes more imbalanced and they have more empty moves. When you do that 3 years in a row at 7%, 8% you start quickly to get into more and more places where you start stretching what capacity can cope with.

And then you have other disruption, whether it's water levels on the Rhine that disrupt the ability to move containers in land, whether it is trucking power in Brazil. And you have different things like this that only illustrate it's not just a terminal thing. The whole landside has been underinvested compared to the growth that we have had. Investment in ships have followed, maybe even have been ahead of demand, if you look at the order book, but the bottlenecks that we have on the land side are more sticky, and we're starting to feel them. And it's really hard to forecast when we start to have this.

But I can give you the example today. The largest port in the world is Shanghai and ships take 12 days to get through because of the -- because of how congested and full the port of Shanghai is. And that's when they need to load the cargo. When they arrive in Brazil and they have to go through Santos or they have to go to Jeddah in Saudi Arabia or through the North continent of Europe, they also get delayed because the ports and the infrastructure there is also stretched to the maximum.

And so we will hit those, and we will see rate events much more frequently. And the other thing that COVID has changed is when these rate events happened, what is the magnitude of the changes in freight rate and the speed at which they filter through. And you see this clearly, if you start comparing the standard deviations of SCFI post-COVID with before COVID, it's very, very different. And it's very hard to forecast, hence, 2 profit adjustments in 6 weeks. And -- but when it's there and it's becoming more and more frequent that it's there and supported by the strong market that we see today, then you will see more of that.

And what we need to do to -- what would need to happen for this not to be here anymore is either a significant weakening of demand, which we believe could happen after an energy shock and the Gulf war earlier in the year, but hasn't happened or investment -- catch-up investment around in infrastructure to increase terminal capacity and to increase landside capacity, rail, truck, waterways so that we can move this more fluidly across the supply chain. And you will know that all of those will take a long time.

It takes 7 to 10 years to get a greenfield terminal from the idea to having it operational. It is taking that amount of years. And so I think that as long as we're having the type of demand that we're having today, and we need to invest in landside capacity to alleviate these bottlenecks. And until then, we'll see these bottlenecks as a common feature, not constant, but common feature of the markets that we operate in.

The next question comes from Lars Heindorff, Nordea.

Congratulations on the strong results. I'm trying to get my head around the rate development in the second quarter, which I think surprised most people. If we look at sort of average between most of the leading rate indices, they're up on average by, I don't know, mid-30s, something like that. You increased your average Ocean rate by 32% quarter-on-quarter. But if you look at sort of most of the peers, one, Hapag, OO, CMA, they're up by on average around about 13% quarter-on-quarter. And so basically, the question is, have you done something different this quarter, which ensures you this -- I mean, quite significant outperformance versus the peers in terms of the quarter-on-quarter rate growth? And also, if yes, I mean, is this something that will last? Or is this sort of temporary, i.e., again, maybe sort of alluding to what we can expect into the third quarter?

Thank you, Lars. It's hard for me to comment on what competition has done. What I can share with you is what we have done and why I think that we are very proud of the quarter because the quarter actually rests on a lot of work. The first thing is to really leverage very quickly the redeployment of assets that were suddenly idle because of the situation in the Middle East and redeploy them productively so that you maintain the volume and you keep your costs under control. And I believe that we are today extremely fast and agile at redeploying networks, adjusting capacity and ensuring very, very high asset turns for our network given the trade mix that we have. I think that's one of the advantage that we have.

The other thing is we have invested for a long time in digital solutions for the spot rate and the spot market, which allow us to react to these sharp rate events, I think, faster than anybody in the market. And this allows us, I think, to act with extreme agility in a world that is more unpredictable and where the changes are more and more meaningful because it's -- there's no elasticity in demand. So when you start to hit the ceiling, the impact on rates becomes extremely big. And so it means something how quickly you can act on it and how quickly you can capture it. That's what I think.

I don't think we can -- I don't think at all that we can abstract from market reality. Over time, the market rates are the market rates. But when market is very volatile, the ability that you have to adjust to that volatility faster than anybody else is a competitive advantage. And I think that tentatively what I see in the numbers today say that we've done a really good job this year.

And if I may, just a brief follow-up, which should we then expect that your rates will be more volatile going forward? Because if you look at it historically, there's been -- I mean, your rates -- obtained rates has been far less volatile compared to most of these rate indices.

So it depends on what time horizon you have, Lars, because if you're thinking in a matter of weeks or quarters or years, I think that these bottlenecks that we're up against on the landside, they will appear and resorb themselves as seasonality and trade growth and shifts and new capacity comes online and so on. So there will not be a constant feature where the rates are just high for longer. And as some of these bottlenecks disappear, then the rates will normalize. As they appear somewhere else, they will shoot up again.

I think what will be a feature is continued volatility on the rates over the coming years, but with a higher average than what we have seen because of the frequency at which these bottlenecks start to urge. I think that we're moving into something where what constraints or determines the rate levels is more the inland capacity to absorb the volumes that we bring with our ships more than how many ships we put in the water.

The next question is from Alexia Dogani, JPMorgan.

I'm slightly surprised as an observation, the big shift in narrative compared to last quarter because now we're talking a lot about structural changes in the market, trade imbalances persisting and needing more ships given kind of port congestion, structural issues. I guess, what has fundamentally changed? And specifically, I don't quite understand why headhual volume growth has been so strong, especially, let's say, Asia to Europe. Can you explain to us what kind of sector verticals are really growing? What has really driven that kind of step change? Because we can see typhoons impacting congestion in Asia. Really, my observation is that demand has accelerated substantially. What has driven this substantial acceleration in demand in your view?

And given your comment just now, should we, therefore, be thinking that the order book of 40% could actually go towards 60%, which is the peak the industry saw in 2009?

Thank you, Alex. I think I'm also surprised by -- and what surprises me is the strength and the resilience of market demand. I think our imagination at least has been constrained by all the talks about trade wars and deglobalization and by the view that Iran -- the Iran conflict would unleash an energy crisis that would be -- that would have also a negative impact on global demand.

Despite years of talk about deglobalization and despite the uncertainty around oil prices, what we have seen is that demand for container transport is basically shrugging off all of that, and you see no sign in the number that any of that deglobalization talk or any of that energy crisis is actually denting demand level. I think that's -- for me, compared to where I was 3 months ago, that's a key thing that has changed. It seems that the market is so resilient that it can shrug off these shocks and keep on pumping volumes at an unchanged level. That's the first thing.

The second thing is the compounding effect of having 3 years in a row of strong growth, which is only one way basically in trade flows. And we've been looking at strong growth, but I think we've only started to realize what one-way trade growth means for landside infrastructure because if only your import growth, you basically need 2 trucking moves per every import rather than have trucking move for an import and trucking move for an export. So you need more trucking power just to move the same amount. You need more terminal capacity because you have more empties that you need to remove.

So I think there is a compounding effect there, which is hitting some limitations because there has been a relatively subdued view towards how much the market was going to grow and so how much infrastructure investments you would need on the landside. And we've not put enough terminal capacity. Trucking power has been an issue for a long time. Some of the waterways, especially in Europe right now, are severely affected by water levels and other issues. And all of these kind of tightened the noose around the supply chain. And it's hard to see when you're going to hit those limits. But when you do, then the reactions on prices are strong.

The other thing that is changing is actually what we're moving. So what is in the container is gradually changing. For a long time, the main feature of what we were moving from the Far East was what we would call general department store goods. Anything from furniture, footwear, clothing, food stuff, stuff like that, that was very, very subject to conjuncture and consumption.

What we have seen since COVID is as the export from the Far East have boomed, we are seeing a lot of -- it's more the industrials that are actually driving the growth. And it is anything that is related to electrification from storage, so batteries, solar panels, parts for either solar panels, windmills, turbines, grid, electricity grid, anything that has to do with electrification, cooling units for data centers and other things, EVs. So anything that has to do around electrification, and the race to build more power capacity is driving demand for industrial products, which -- whose production base is very Asia-centric and Asia-dependent.

And that is a lot less subject to conjuncture than what you have because if you have a big contract to build a big sun park, whether there is a higher oil price or not, you're going to need to move the solar panels and the infrastructure to get that sun park built. So that's, I think, something that for me is a shift. We will become less seasonal and more subject to industrial verticals as long as this macro trend will continue to materialize. And this is not only a U.S. issue, this is Europe, this is India, this is the Middle East, this is Latin America, this is Africa. We see this across the whole world, where large Asian companies are exporting more and more of these components into those geographies and those markets.

What all of this means is I still think that the order book is -- reflect a very optimistic view on the world, but I think so less and less as long as this trend continues because if I have a total market growing 4%, but the headhaul demand growing 7%, 8%, I need 7%, 8% capacity more every year just to be able to carry stuff. And so I don't know where the order book is going to end, but I think that this is less of a constraining factor. And I'm actually more looking now at how quickly are some of the nodes that are most stressed in the network, how quickly can these bottlenecks be resorbed. And I would say, if you look at Santos, if you look at Apapa in Nigeria, if you look at the North Continent of Europe, if you look at the U.K., if you look at other places in the market, it's not -- those are not easy bottlenecks to resorb, and it's going to take a while. They have been building up for 15 years, and it will take a while to undo them.

And Vincent, if you allow me to follow up, just on the electrification theme and kind of the industrial goods, obviously, we're hearing that some companies are mentioning prebuying because prices for those goods will come up because of kind of energy costs affecting their production. Do you think that has happened or not? Or is it just fundamental demand? Or is there some prebuying?

I -- all that preponement before tariff and all of these gaming trade, I don't see any sign of it in any of that. I think that you have a macro trend now where people have gone from worrying about electricity as a green transition into worrying about electricity availability because every market needs more and more electricity. If you need more air conditioning, you need more electricity. If you have more EVs, you need more electricity. So there is more -- and there's -- it's gone from is it moving from black to green energy into we need more energy, and therefore, we need to build up the energy infrastructure of the future. And that we're seeing again in all of the markets. And I don't think it will necessarily be linear and there will not be a lull here or a lull there, but I think we're probably going to see a pretty sustained growth in those verticals for the years to come.

The next question is from Jacob Lacks, Wolfe Research.

So could you maybe speak about how you're thinking about unit costs from here? How meaningful can the return to the Red Sea be in driving these lower? And then, any other big puts or takes we should be keeping in mind over the balance of the year?

Yes. Thank you, Jacob. So our opinion is that at this stage, a return through the Red Sea will have very little pricing impact and will have a positive cost impact, obviously, for the short sailing distances and lower cost of going into the straight route versus all around Africa. And the reason why we think it's fairly -- it's not very significant on prices, but it's significant on cost. On cost, I just explained. On prices, it's because we see the bottlenecks being elsewhere. And, therefore, it's not really going to have a material impact on prices. And as long as the safety requirements are met, this is the type of market that is good for a return rather than at once where there was no bottleneck.

And are there any other sort of big puts or takes we should be keeping in mind as it relates to unit costs for the rest of the year?

Yes. So I think there are 2 things that you should keep. First of all, oil price is still obviously a big factor, depending on what reserves are at, what consumption is at, whether Hormuz opens or it doesn't reopen. We have seen some increased volatility in oil prices, which in the short term -- I mean, in the long term, I think we're pretty well covered with our bunker formulas with the contracts, but in the short term, could have some impact on how we think about the unit cost.

And then higher rate environment tends to lead to also longer charter -- longer higher charter markets for the ships that we charter or lease. And we've seen this. If you look at the publicly available data in terms of fixtures and prices of those fixtures, the prices continue to be high, and the fixtures actually go for longer as owners take advantage of the shortage that there is a ship in the current market to demand higher prices for longer. So I think those will have some impact on the unit cost going forward, and they were certainly part also of the assessment that we had when we needed to recover money when we went -- when the Gulf war broke.

The next question is from Ulrik Bak, Danske Bank.

Just on the discrepancy in your guidance upgrade between EBITDA and EBIT, which increased by $2.5 billion, while the free cash flow guidance is $1 billion. So if you could please explain that delta also considering that you keep your CapEx guidance unchanged. And on that last point, given that you now indicate that you may need to increase your new capacities in forward years, why do you keep account?

Thank you. I might take that one. As you explained, obviously, in the free cash flow, mainly driven by what we have seen in Ocean, we have to consider that we also carry a much higher working capital that is, a, due to the fact that our rates went up. So the billing to the customer went up. So that drives a higher working capital cost, mainly driven by higher receivables. And then, we have also more working capital carried by higher bunker costs. So basically inventory that we have on the balance sheet, this -- that inventory costs more due to higher bunker price costs. Does that explain the question?

Yes. Yes, that's very clear. But then also the CapEx side.

CapEx, at least for the quarter, there was not really a change. I think we are right now running a bit -- a little below what we have targeted. But again, that we cannot judge on a quarterly basis. For the full year, the guidance stays as it is.

The next and last question is from Jack Raeburn, Bank of America.

Standing in for Muneeba Kayani. Congratulations on results. Just trying to understand the circumstances you forecasted for the bottom and the top end of your guide. For the low end, is it simply easing congestion? And how likely could that actually be in the next few months given the lack of terminal capacity you cited? And connected to that, would fully reopening the Red Sea, not exacerbate congestion issues, which could actually be supportive for rates in the short term, at least for the rest of this year?

Yes. Thank you, Jack. So you're correct. For the lower end of the guidance, you would need to see an easing of congestion basically around the first week of -- the beginning of the fourth quarter in connection with the Golden Week holidays in China and that it would last into the fourth quarter. You are correct also that the return through Suez in the short term is likely to exacerbate some of these bottlenecks rather than help alleviate them, at least at destination, especially in Europe. And I think that answers both questions.

I think for the upper end of the guidance, it's the opposite, right? It's the -- if demand continues strong and some of these congestions endure, then you would see a more favorable development in the fourth quarter.

Everything remains ceteris paribus in the Red Sea and you do go back in, would that not be included in your circumstances at the high end of the guide then because you get that congestion-related rate increase?

I think the congestion-related rate increase is a function of what the whole market would have to do. I think we're managing this very carefully one service at a time, exactly not to completely collapse the facilities that we utilize because then that would put us at a serious disadvantage compared to competition. So -- but if the market was to move quite suddenly back through the Red Sea, then this would put a more general pressure on that. And how this translates into prices? I don't know because it depends on how the situation would evolve, but it would create an upside to -- probably to some of the rates, possibly.

Ladies and gentlemen, this concludes our Q&A session. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Well, thank you again for joining us today, and thank you for the great questions and discussions. To summarize, we had a really strong quarter with all our key businesses performing well. We demonstrated agility in our operations against the backdrop of a strong container market and many disruptions, allowing us to capture both volumes and the benefit of the higher spot rates, driving higher earnings in Ocean.

Logistics & Services continued to build momentum. It delivered strong top line growth and another quarter of margin improvements with plans in action to further improve on the margin front.

The strong trajectory in Terminals continues with good earnings and returns while undertaking significant investments, positioning the business for future growth.

Taking a broader look at the Ocean industry, the combination of strong demand and tight port capacity is becoming a structural feature of the markets, making the rate environment more benign, albeit still very volatile. As you have seen, this has led to an upgrade of our full-year guidance.

Results like the one of this past quarter do not happen accidentally. They are the results of the capabilities, hard work and commitment of all our colleagues at Maersk. I would also like to thank our customers for their continued support and trust to keep their supply chains moving.

And with that, thank you for your attention, and see you soon.

Welcome, everyone, and thank you for joining us on this earnings call today as we present our first quarter results for 2026. My name is Vincent ClercKirk. I'm the CEO of A.P. Møller - Maersk. And I would like to introduce our new CFO, Robert Erni, who is joining me here in the room for the first time. Many of you will no doubt have the opportunity to meet Robert on the upcoming roadshows and conferences. Let me start with the overall highlights for the quarter. At the macro level, we continue to see strong demand growth across all of our segments and most regions. The big exceptions was North America which has remained weak since the start of the trade tensions about a year ago.

This resilient level of demand is easily observable in our own number, but it wasn't enough to stabilize the ocean freight rates. The supply overhang there has worsened as the many new vessels delivered throughout 2025 and into 2026 have outpaced this strong demand. The Middle East conflict has required also operational adjustments, but it did not have a material financial impact in this quarter. This is mainly due to the delayed recognition of revenues and costs in Ocean. I will elaborate on this shortly on the following slides. Overall, we delivered an EBITDA of $1.8 billion and an EBIT of $340 million, impacted overwhelmingly by the lowest rates in Ocean year-on-year.

Lower earnings led to free cash flow of negative $874 million for the quarter. Looking ahead for the full year, notwithstanding the disruptions that the Middle East conflicts have brought, we are maintaining our guidance given what we can see right now. On the basis of container volume markets of 2% to 4%, we guide for underlying EBIT of between negative $1.5 billion and positive $1 billion and a free cash flow of negative $3 billion or better. The Middle East conflict is not expected to have a material impact at this stage through the use of both operational and commercial levers. Our maintaining the guidance and the range reflects the fluid environment that we are in, but it also speaks to the agility and resilience of our business such that we can withstand such large disruptions without materially changing our financial outlook. And that is a good segue into the next slide, where I'll add a few more words on the Middle East conflict.

It is important to highlight that the outbreak of this conflict is primarily impacting Ocean. Logistics & Services and Terminal have not been and we don't expect will materially be impacted. Thanks to our strategy put in place over the last decade, we have a much more diversified and resilient revenue and cash flow streams today that will cushion the impact on our results that the ocean market is faced with. Let me start by saying that we have of over 6,000 colleagues in the affected countries, and we currently have 6 vessels stuck in the Persian Gulf comprising owned and time charter vessels with crew on board. We also have our gateway terminal at APMT Bahrain, our hub in Salalah. We have warehouses and offices and all the colleagues are safe and accounted for.

Safety of our people, vessels and assets is our #1 priority. This means right now that operations also in and out of the strait of Hormuz have been suspended based on our continuous security assessment. The Gulf region before the outbreak of the conflict represented about 2% to 3% of global containerized trade, so direct volume impact is limited on the global scale. The situation in the Strait of Hormuz has also impacted the situation in the Bab al-Mandab Strait, and we have reversed and halted the gradual return to the Red Sea transit for safety reasons since the beginning of the hostilities. We have seen rate spikes since the outbreak of the conflict, which averages on spot rates up to about 40% since the end of February.

It is important to note that this rate increase has been roughly in line with the cost increase we have faced. Operationally, the modularity of our Gemini network has helped us pivot with volumes back to pre-war levels and limit the disruptions to our volume delivery and service quality. We have been able to isolate part of the network impacted by the conflict and carry on with our operation while maintaining the highest reliability and in delivery. While the oil prices have surged and bunker availability has become under pressure, we have been able to maintain bunker supply through available reserves on board vessels and in storage facilities on land. We have a coverage at this time of minimum for a quarter ahead, which is in line with normal coverage.

We have responded to fuel shortages in certain parts of our network, most notably in Asia by redistributing available fuel from North America and Europe to ensure that our vessels can bunker before departing again for their head ho. The cost impact of this energy shock is unprecedented, both in terms of size, the speed at which it has unfolded and the dislocations it has created in the market. For us so far, it represents approximately $0.5 billion in extra cost per month that we must find a way to pass through. If these elevated bunker prices persist, which seems likely, we would expect to deploy more slow steaming to reduce the cost impact. We remain confident that the impact of the shock can effectively be contained between a combination of commercial and operational measures.

In terms of the numbers, there is limited financial impact from the conflict in the first quarter given the accounting effects of delayed recognitions of both revenue and costs. The increased costs that will flow through the P&L in quarter 2 and beyond are being recovered through higher spot rates and a successful implementation of commercial levers with our contracted customers most notably surcharges and bunker formulas. As mentioned, this is about $500 million of extra cost per month, which we are recovering in full today even in an oversupplied market. Overall, despite heavy disruptions to energy markets, Maersk is well diversified and stand well positioned to weather these challenges and take advantage of the opportunities that will undoubtedly arise.

You may recall the strategic priorities we set for Ocean as well as the other segments back in February. Looking at Ocean first. On Protect, our high asset turn, we have delivered a 6 percentage point overperformance on volume growth versus fleet growth, driven by Asian exports, which is comfortably above market. This has allowed us to increase our asset turn and bring down our unit cost. This follows similar outperformance we saw in the third and fourth quarter of 2025. It is the new baseline now that we have created through Gemini and the one that we must continue to improve on going forward. We also demonstrated strong operational performance by filling our vessels to reach a utilization of 96%, reflecting discipline in fleet deployment.

On grow, with an above-market growth of 9%, we delivered a strong quarter and ensure that we leverage the agility created by Gemini to maximum impact. The strong volume performance was delivered against the backdrop of continued downward pressure on rates with rates down 14% year-on-year. This came from contracts rerating at the start of 2026, driven by this industry oversupply. Finally, on the focus on profitability, we have demonstrated a sustained decrease in unit costs, notwithstanding the Middle East conflict, owing to our strong operational performance. This, I'll return shortly to on the next slide. As mentioned, commercial levers are helping us to recover the cost increase from the Middle East conflict.

The benefits of Gemini are on track and will incrementally benefit the P&L until the end of quarter 2. From quarter 3, it will become part of the baseline. As mentioned, our strong operational performance is also reflected in the sustained decrease in unit costs driven by our modular network, which I'm particularly pleased with and is due to the hard work of our teams. Since Gemini's inception, we have delivered 7% year-on-year decrease in unit cost at fixed energy. What makes this particularly impressive is that we have sustained this trend in this quarter, even in the wake of the Middle East conflict and the operational disruptions it has brought. Cost leadership remains central across all of our businesses, but especially in ocean with tougher times and more disruption.

We will continue to roll out initiatives such as potentially slow steaming or restarting operation through the Red Sea in this regard to ensure that we protect our profit and margins going forward. In Logistics & Services, our priorities in 2026 are twofold: accelerate the margin improvement and improve on our growth performance. So I am very focused on margin expansion and productivity as this will drive better performance this year. On the first priority, we have demonstrated clear improvements in our challenged product, especially airfreight and MinMile with higher year-on-year margins in both. These improvements have come from productivity gains as well as more effective revenue management.

Looking at margins more broadly, this quarter marks the eighth consecutive quarter with year-on-year EBIT margin improvement, reflecting the operational progress we have made across the portfolio. This quarter, we improved our EBIT margin by 0.5 percentage points to 4.6%. There is, of course, more to do, and our focus for the rest of the year remains on revenue management and productivity improvements to drive performance. On the second priority of improving growth, we have delivered a revenue growth of 9% overall across the portfolio. While further proof points need to be delivered in the coming quarters to confirm this good performance, we are satisfied with the current momentum. Our job is to grow, but to do so profitably, continuing to make investments where it makes good sense, like we did in Singapore, if we turn to the next slide.

Back at mid-March, I had the pleasure of attending the opening of our new modern warehouse in Singapore. World Gateway 2 is a fully automated multi-client distribution centers spanning about 100,000 square meters and strategically located close to major transport infrastructure. The facility marks a major expansion of our contract logistics and e-commerce capabilities in Asia Pacific and represents a doubling of our footprint in Singapore. It is equipped with state-of-the-art robotics and automation technologies. For customers, this will mean faster order fulfillment to end to end customers and shorter lead times as well as improved accuracy generally. The modern technology and scalability will unlock opportunities in new verticals, including luxury to complement the others where we already cover such as lifestyle, FMCG, retail, wellness and technology.

We are excited about World Gateway 2 and look forward to delivering value to our contract logistics customers. In terminals, looking at our strategic priorities for the year, in relation to the first one, growth through existing and new location, we demonstrated solid growth of 4% year-on-year. What is equally exciting is that we are the growth plan that we have either announced or executed during this quarter. These investments will allow the business to diversify and increase its portfolio of gateway terminals across the globe while ensuring continued strong value generation.

First, we announced the strategic expansion plan to upgrade North Sea terminal in Bremerhaven together with our partners at Eurogate. I'll elaborate on this one shortly on the next slide. We also announced the acquisition of a 13.7% minority stake in Southern Container Terminal in Jeddah, Islamic Port alongside DP World. And further, we executed the incoming transfer of our 49% minority share in the Hateco Haiphong International Container Terminal which is located in an area of crucial importance for Vietnam's growth and for the Asia and transpacific trade. Finally, we completed Phase 2 of the expansion of Lázaro Cárdenas in Mexico with high level of automation, electrification and the use of clean energy sources. We are now proceeding with Phase 3 of the expansion of that terminal. On our other priority, maintain long-term profitability, the quarter generated a very strong return on invested capital of 16%.

We do expect the effect of growth investment in greenfield projects to affect the ROIC figure in the coming quarters as invested capital increases ahead of activities during the buildup phase. These are great investments, though, that will secure future growth and deliver strong returns over many decades for our shareholders. The expansion plan of the upgrade to upgrade Bremerhaven is an example of what we do best and comes straight out of our playbook of operational excellence. The EUR 1 billion planned investment together with our partners, Eurogate will significantly upgrade North Sea terminal in Bremerhaven and promise a significant return. As we have recently done in Pier 400 in Los Angeles, we will implement automation to bring down our breakeven level.

The learning from Los Angeles means that we expect the implementation and outcome to be even better this time at NTB. In parallel, we will expand NTB's capacity by around 1/3 to 4 million TEUs per annum, which in turn will strengthen the location as a key terminal in the Maersk Ocean network. And I will now hand over to Robert, who will walk you through the detailed financial and segment level performance. Thank you.

Thank you, Vincent. I'd like to take a brief moment to introduce myself as this is my first earnings call with Maersk. My name is Robert Erni, and I started as the Group CFO of Maersk in February of this year. I have 30 years of experience in finance across the global logistics sector, of which about plus 10 years as Group CFO in previous companies. Maersk is a company I've long admired and come to know well from the customer side. I'm very pleased to be part of the team. I look forward to meeting many of you in the days and the weeks ahead. Now let me turn to the results for the quarter. The first quarter was characterized by solid operational execution across the business with strong volume growth. However, this was against a more volatile environment and materially lower earnings in Ocean, driven by deteriorating rates as a result of industry oversupply.

We delivered revenue of $13 billion, which was a 2.6% decrease year-on-year. Lower rates were only partly offset by the strong volume growth. The impact from lower freight rates can be seen in our profitability, which declined despite earnings growth in Terminals and Logistics & Services. We delivered EBITDA of $1.8 billion and EBIT of $340 million. This led to a decline in return on invested capital to 3.8%. Free cash flow was negative $874 million in the quarter, reflecting the lower earnings base. Our balance sheet remains strong, and we retain significant financial flexibility. Following the distribution of dividends for the financial year '25 and continuation of the share buyback program, we ended the quarter with $18.4 billion of cash and deposits and a net cash position of $1.3 billion.

Let us look at our cash flow generation in Q1. Let me comment on a few of the key developments in the bridge, starting from the left. Our net working capital increased by $913 million in the first quarter as the higher price of bunker drove an increase in the value bunker inventory, while customer receivables also increased. As a result, operating cash flow was $1 billion. Relative to EBITDA, this implies a cash conversion of 59%, down from 102% in the first quarter of last year. This is mainly due to the increase in net working capital, as already explained. Our capital lease installments increased by roughly $400 million over last year to $1.2 billion. The increase is mainly related to installments towards the renewal of the Port Elizabeth Terminal in U.S.A. extension, which was signed in Q2 '25 as well as the exercise of purchase option on some formerly chartered vessels.

Gross CapEx remained sequentially stable at $1 billion, but decreased around $400 million year-on-year, reflecting a lower investment level in Ocean. As usual, the majority of gross CapEx related to Ocean investments. After these items and the $231 million proceeds from sale of aircraft, which is included in the other bucket, free cash flow was negative $874 million for the quarter. In addition, we returned $1.3 billion to shareholders through the distribution of dividends for the financial year '25 and the ongoing share buyback. Taking this together with net borrowings and other items, net cash flow for the quarter was negative $874 million. So let us have a closer look at the financial performance of our segments, starting with Ocean.

I will start by reiterating the point made by Vincent earlier. The financial impact of the Middle East conflict was immaterial in the first quarter, even as supply chain disruptions led to an increase in both rates and costs towards quarter end. The impact will be more visible in our P&L in the second quarter as we consume our bunker inventory and recognize revenue from containers shipped at higher freight rates from March onwards. Ocean reported revenue of $8.2 billion, down 8.2% from last year. This is driven by the impact from much lower freight rates, partly offset by the substantial volume growth driven by strong Asian exports. The commercial mix was more or less in line with our target with 44% of volumes on longer-term rate products.

Operating costs remained broadly stable despite various disruption in the external environment. With the increase in volumes, this means that unit cost at fixed energy was down by 7.1% compared to last year. Profits were slightly lower sequentially with EBITDA of $903 million and net EBIT of negative $192 million. Ocean continues to reap the benefits of the Gemini network. We maintained industry-leading reliability for our customers, and we're seeing sustainable financial benefits from better asset turns and bunker savings. These are helping to cushion the full impact of declining rates. Finally, gross CapEx was $716 million, which is in line with our CapEx guidance. In the EBITDA bridge, you can see how all of these different factors have contributed to the year-on-year development in quarter profitability.

The significant rate decline was a dominant factor, driven by lower rates from the supply overhang with a large negative impact of around $1.2 billion. This was only partially offset by stronger volumes. There was a positive impact from the lower price of bunker, which decreased 16% year-on-year to $486 per fuel oil equivalent tonne. Note that this does not reflect the increase in oil price that happened throughout March. Bunker consumption was also down by 5.3%, driven by network efficiencies. Net of the volume effect, we managed to keep both container handling and network costs, excluding bunker price, largely flat year-on-year. There's also a significant revenue recognition element as rates declined sharply between Q4 '24 and Q1 '25, but were stable between Q4 '25 and this past quarter, a pure timing effect.

Continuing to our Logistics and Service business. The segment continued to track positively in the first quarter. We are growing and we are growing profitably. Revenue increased by 8.7% year-on-year to $3.8 billion. Growth came from all 3 service models. Revenue was down sequentially following peak season in the later half of '25. This quarter also marks the eighth consecutive quarter of year-on-year EBIT margin improvement with the business delivering EBIT of $173 billion, implying a margin of 4.6%. This represented a 0.5 percentage point increase in EBIT margin compared to the previous year. Let me remind you that from the next quarter, we will be reporting Logistics & Services under a new structure as already advised. And therefore, only briefly on the current service models, which you will be seeing for the last time.

You can see the volume growth helped to drive increased revenue from all service models. Profitability-wise, most of the increase came from fulfilled by Maersk through Middle Mile and transported by Maersk through Air. Specifically, Air saw volume increase by 20% compared to last year. We continue to prioritize investments in profitable growth. And whilst CapEx was 30% lower year-on-year, this was only as a result of the phasing of investments. Stepping back, the picture shows that broad-based top line growth is translating into better profitability, particularly in the parts of the portfolio where we have been focusing on operational improvements.

Revenue was up around 9%, while EBIT was up 22%, demonstrating good operating leverage and continued improvement. As Vincent says, we are focused on margin expansion and productivity to drive performance. That is our job for the coming quarters. So I round off my financial review of the segments with our terminal business. Through a quarter of geopolitical conflict and supply chain disruptions, our terminal business again demonstrated its resilience and delivered a solid performance. Revenue increased 6.7% year-on-year to $1.3 billion, driven by higher revenue per move and volumes across most regions. The volume growth of 4.3% was largely coming from North America, which experienced growth of 11%.

This was due to Gemini, which consolidated its volumes at 2 North American terminals, representing a net gain relative to the former 2M alliance. Revenue per move increased around 3%, driven by improved rates, favorable mix and ForEx, but partly offset by lower storage revenue. Cost per move similarly increased about 4%, mainly reflecting higher depreciation from recent investments, adverse ForEx and investments to extend the life of our cranes and other equipment. This was partly offset by lower SG&A and the benefit from higher volumes. EBITDA reached $488 million with a margin of 37.1%, while EBIT increased by 11% to $436 million, corresponding to a margin of 33.2%. Gross CapEx increased to $171 million, driven by growth investments, including Zwappe in Brazil and Pipavav in India.

It should be noted that while return on invested capital on a 12-month basis for the segment increased to 15.7%, capital employed will increase following the recent investments while incremental earnings ramp up. Moving on to the financial guidance. Following the first quarter performance and given what we can see now, our 2026 financial guidance remains unchanged. Assuming global demand remains robust, we continue to expect global container volume growth of 2% to 4% in '26 with Maersk to grow in line with the market. On this basis, we continue to guide for an underlying EBITDA of $4.5 billion to $7 billion, underlying EBIT of negative $1.5 billion to positive $1 billion and free cash flow of negative $3 billion or better. Whilst we maintain our cash flow guidance, we are experienced in higher working capital because of higher bunker costs, which is absorbing additional cash.

Our cumulative CapEx guidance also remains unchanged at $10 billion to $11 billion for '25 to '26 and likewise for '26 to '27. The guidance range continues to reflect industry overcapacity from new vessel deliveries as well as different scenarios on the timing of the reopening of the Red Sea and Strait of Hormuz and their consequent impacts. With that, we remain focused on operational execution, cost discipline, capital allocation as we navigate what is still expected to be a volatile year. On that note, we finished the first quarter financial review, and we'll now proceed to the Q&A. Operator, please go $ahead's.

The first question from the phone comes from Cristian Nedelcu with UBS.

Two, if you allow me. The first one is on the Ocean strategy. There have been some statements from the ZIM Board members a few weeks back noting that Maersk made an offer for the acquisition of ZIM. Having this in mind, could you tell us what is your strategy in Ocean going forward? Are you looking to grow capacity? Would you consider acquiring other Ocean assets going forward? And the second one is on the Ocean EBITDA. Historically, seasonality-wise, volumes are up in Ocean in Q2 versus Q1. You earlier alluded to the fact that you're fully passing through the higher fuel costs. Is there any reason why the Q2 Ocean EBITDA should be lower than what you generated in Q1? Any other moving parts that we should keep in mind? Any color would help.

Yes. Thank you for the questions. Our strategy in Ocean is quite simple. We want to deliver the best service to our customers in terms of reliability. We want to have the lowest possible cost, and we intend to grow our volumes in line with the market. Those are the 3 tenets that we have. If we make a deviation to this, such as what we did with ZIM is if we feel that there is something which opportunistically would serve to lower our cost or we can buy assets, which opportunistically would be at a much better price than average because of the current market circumstances, then we look into it. And if suddenly the prices would have to increase to a place where that doesn't make sense and doesn't support our cost leadership, then we get out of the process.

So I don't expect us to be active on the M&A front in Ocean. This is not a core tenet of our strategy. But at the same time, we stay alert to what happens. And if there are some -- a few things that opportunistically would advance some of our fleet goals and lower our breakeven cost, then we will look at it because it's aligned with our strategy. On the EBITDA for Q2, I think the only thing that would change -- the 2 small things that to look at is from a volume perspective, you mentioned -- I mean, you're right, in general, volumes are stronger. This time, Chinese New Year was kind of late in March. So the rebound may be a bit less than when Chinese New Year is strong. And then you had some of the disruptions from the Gulf where it started by -- with a few weeks of booking acceptance being actually shut down and then gradually reopened as the situation there, we found ways to bring the cargo.

So from a total volume perspective, volumes today are back to their pre-war levels, but there's been a few weeks at the beginning of the conflict where they were a bit lower. From a profitability perspective, I think the real question is exactly at what week the cost start to filter through and the revenue start to filter through. What we know is that we've been able to recover these cost increases. And you can see it, 40% increase on the shipping indexes out of China. It means that we're basically on all the shipments are recovering the full cost increase, and we have similar increases that we have secured in the contracts. Now in the very weeks where this phases in, where the one phases in a bit faster.

So if revenue phases in a bit faster than cost, that's very good. If it phases in a bit slower than cost, it's not as good. What is good is that this will quickly be -- it's just a little timing issue at the beginning. So I don't expect major fluctuations in Q2, but I think we -- as Robert mentioned, we have a big range in the guidance, and that is because the situation is extremely volatile and the mood swings around whether we get to a conflict resolution fast or not, they are quite significant from tweet to tweet.

The next question from the phone comes from Muneeba Kayani with Bank of America.

So just following on from the earlier question on 2Q. You've done $1.75 billion in the first quarter of EBITDA. If the second quarter is somewhat similar, we're looking at EUR 3.5 billion, maybe EUR 4 billion of EBITDA in the first half. So can you explain how you've thought about that low end of the guide and kind of what scenario would be needed to reach EUR 4.5 billion for the full year? And then secondly, Vincent, if you could talk a little bit more about what you're seeing in the demand environment. I think you've mentioned that demand has been strong and you've continued to see that. What are your customers saying? And how are you thinking about that volume range turning out for the rest of the year?

Yes. Let me start with the second, Muneeba. Basically, I would say, as we stand here today, we see no impact on demand level from the conflict in the Middle East. As I mentioned, our volumes are back to pre-war levels. So we feel pretty good that the first quarter market will be at the upper end of what we have guided with respect to market, maybe even a hair above. And that -- these strong demand levels we see continuing into April and May. So that's the first thing. So for us, I think if you think about this, the range of 2% to 4% in order to get out of that range for the market for the year based on 5 months with that strength, you would need to see a pretty sharp deceleration coming out pretty soon for it to go out of range. So from that perspective, I think there is quite a lot of resilience in the market.

Now -- the cost increase is significant and how this will -- how long this will take to get down into inflation or margin absorption for the different parties involved across the energy markets. I think that is very much an open question. So we have not yet seen impact on demand from the higher energy prices. We do foresee though a softer growth in the second half year in anticipation of that. But how much -- we still think it's going to be enough that we stay in the range, but we need also to see how the conflict evolves if the war starts again or if we really move towards peace, there is a lot of different dynamics there. So that's, I think, the best color I can give on the demand level. With respect to the EBITDA level. So I think we don't guide specifically on the quarter. So I don't want to be too -- get into the math of it.

But what we see is continued strong demand, which means whether we are in terminal or in logistics, we should be able to continue the normal seasonality that we have there and in ocean as well. As I mentioned, the one thing that could impact a little bit is the phasing in of the revenue upsides and the phasing in of the cost downsides as a result of the hostilities and how they exactly net out in the quarter, which is too early to comment on. But I feel very proud of the speed at which we have been able to pass these cost increases to the customers. And therefore, I don't think it's going to be a huge impact, but I have yet to see the numbers exactly on how that goes and how this is taken through revenue recognition and cost recognition and so on because as Robert mentioned, our working capital has increased as the inventory -- the cost of holding the inventory of fuel has increased significantly.

So we'll see how quickly that phases through on the P&L.

So how do you get to the low end of your guide given you've been happy with the speed so far?

I think what you need to remember is there is -- we have 44% of our business that is in contract where we have secured coverage for this cost increase. And we have 56% of our business, which is on spot or monthly rate for which we have secured it through the spot market, as you can see in the freight exchanges, but where this is a weekly battle to keep it there. So I think our concern would be a softening of the demand environment, insufficient capacity management across the industry, which leads to an erosion of the recovery of these costs on the short-term market, which could -- depending on how much you think it will erode, could quickly get you into a not so pleasant place from an EBITDA level in the second half year.

The next question from the phone comes from James Hollins with BNP Paribas.

So start off with the Logistics division. Clearly, you've shown 50 bps of margin growth year-on-year. Perhaps you run us through what more you're looking to do there on margin expansion, where you think maybe you can get to what projects you're working on? I think you noted margin growth was there in Middle Mile, where else we can see progress coming from there? And the second one was that the old favorite of the Red Sea. Clearly, we've all seen headlines around the data showing some of your competitors going back through the Red Sea. I was just wondering if you could update us on your thought process there? Is it potentially sooner rather than later? Do we absolutely need to see an end of the conflict on the uranium side? What do you need to see to start thinking about going back to clearly you had started?

Yes. The Red Sea, we have a review ongoing right now where we're assessing given the situation between the U.S. and Iran, whether we feel that we should also restart the return of some of our services through the Red Sea. There's no doubt that we have a bit of a different threshold than especially some of the competitors that are going through the Bab-el-Mandeb today because that's the same that have had issues in the Strait of Hormuz and have had either people being detained or people getting injured because they took some different chances than we did. So I think we make sure we have a very independent and very cautious approach because we clearly take the safety of our colleagues as our first priority.

That being said, there has been no attack in the Red Sea for the entire year so far. And for us, the one limiting factor is the limitation of availability of either escorts or monitoring assets from different European U.S. or other navies to make sure that the crossing is safe. That's what we're working through right now. But it is clearly a topic for us as well to see, and that could free tonnage that we could reinvest into slow steaming opportunities for the services that cannot return immediately because at these bunker prices, that would be a good way for us to bring our cost picture down. On Logistics & Services, I think we're going to continue on the margin expansion. Our goal is still to generate a margin that is above 6% on the portfolio.

And I think we'll be able to provide the next quarter as we get through the new breakout on products, a bit more color on what we expect the different areas to deliver. But I think for now, 8 quarters in a row of expansion, we don't expect the theory to end now. We certainly want to continue it. Airfreight, ground freight, contract logistics continue to be the main areas where we're working on. It's reduction of white space in contract logistics. It is continuing the margin expansion and productivity drives in air freight, and it is more revenue management and growth and productivity in ground freight. Those are the levers that we're working on.

The next question comes from Alexia Dogani with JPMorgan.

Right. I have 3. If we start with the second quarter, I think kind of can you explain to us a little bit the bunker fuel adjustment lag for the 44% you said is on contract? Because if I understanding correctly, the bunker adjustment factor will really reprice in Q3 rather than Q2. And in relation to that, Vincent, you mentioned about EUR 1.5 billion extra costs per quarter. What do you include in there? Because it appears quite high if you take into account kind of even the peak of the bunker price. That's my first question. Then secondly, can you discuss a little bit about the order book to fleet ratio? I mean this keeps building and it's approaching almost 40%. And deliveries are accelerating in '27 and '28.

So clearly, even without capacity management, we're looking at very steep increases even without the Red Sea return. How do you actually see the outlook when you say today, even in the second half, we could see a not so pleasant place for EBITDA? And then finally, do you have any thoughts on Amazon Supply Chain services? Clearly, the contract logistics part of Maersk has not been performing. I don't know if it's still losing money. But if there is an additional capacity entering the consumer space in the U.S. does make your turnaround even more challenging in that sector?

Okay. Thank you, Alexia. So the bunker fuel adjustment factor, you're right. market -- normal market practice is that it is adjusted quarterly. In this case, here, we have implemented surcharges and in some cases, changes in the bunker formula so that we can actually start recover immediately simply because of the size of the price hike, it was impossible for us to just shoulder it for a quarter. And that's what we'll be talking about more in 3 months when we meet for the second quarter, but we have been able to basically move forward the recovery of costs so that we match cost increase and revenue increase to the best of the abilities that we have. So that's also similar to some of the questions we had before.

So that's the first one. The -- what is important to realize on the cost is we have actually 3 buckets of cost that we're faced with to get up to the EUR 1.5 billion. The first one is the fact that actually bunker cost has increased more than oil price. If you look at it, not all products, not all oil-derived products have increased by the same and actually, bunker has increased more than the average oil price. The second thing is that you have dislocations in the market where the premiums that we pay today over the WTI or the Rotterdam index are higher in many ports than what they are. So what you would normally accept to be your average given where you bunker in the world, that average has been further increased by these locations.

And then the other thing is that we have had to take on more cost, we have had to move -- physically move bunker from North America and Europe into Africa, Middle East and Far East in order to secure supply where we need the supply. This comes at a cost. And as well, and it's very high cost because the tanker market has exploded. And we have also a time charter market that has increased significantly as a result of this. So we see significant cost increase out of all of these factors, the biggest one being obviously just the nominal cost increase on the price per ton.

Now of course, it depends very much on the price of oil that day. So it has been swinging a lot between $90 and $110. If it's $90, it's going to be a bit less than the 1.5 -- it's going to be a bit less than the $1.5 billion, but still well in excess of $1 billion. If this was to go to $120 or something, then that price could even -- that price tag could even increase. I'll take the order book last, if that's okay, and I'll just go to Amazon SCS. I think the expansion of the Amazon offering is a logical continuation of efforts they have made to build delivery networks in the U.S. domestic market across both ground freight, airfreight and last mile. So Amazon is a great partner of ours. We do a lot of business together.

For the most part, I think we're going -- we don't see that at all as being threatening to what we're doing for different reasons. We are active much more on the international scene where they are active much more on the U.S. domestic scene. We are not so active in the express and last-mile delivery compared to what they are. And we -- a lot of the customers that we have are actually customers that price data sovereignty and are extremely cautious in committing data to Amazon systems who would be able to both train their systems further and also learn a lot about how these customers' supply chain and demand and so on works out, which a lot of them have serious quants about.

So we see certainly that this is going to be something that becomes a factor in the -- especially the U.S. domestic logistics market in the years to come, for sure. But that we feel that we have sufficient differentiation with Amazon that we don't really see this as being a threat for us at this stage. Finally, on the order book, the order book is in -- as far as I can see, I mean, I would wish that it was smaller, Alex. That's pretty clear. I think that we see that there is a capacity overhang today in May of about 1 million, 1.5 million TEUs. And there was about 2 million TEUs that are basically used to serve the longer routes around the coast of Africa for the service affected that cannot sell to the Red Sea. So it's about 3.5 million TEUs overall that is the capacity overhang, the total capacity overhang to a normalized trade routes today.

And the deliveries are okay this year, but they are picking up significantly next year, and that's going to put further pressure on the overhang that we see. My theory is still that it is of a size where if people are disciplined, it's manageable. But we need to see that discipline come into effect. And so far, we're getting disruptions upon disruptions, and that delays actually the need for people to take this on. The higher energy costs are going to trigger a whole new wave of so steaming, I believe. I mean, I can -- we're looking at it ourselves and the cost benefit is quite compelling. So I think that will certainly demand -- high energy costs will demand more ships to cope with -- effectively with the demand.

But if we don't pick up scrapping and actually retiring some of the ships that have not been retired over the last 7 years, this is going to be extremely bumpy. But I think that what you can see with this crisis in how quickly and rapidly costs are being recouped there is -- I still have -- there are reasons for optimism that the conduct in the industry is different despite the fact that the CapEx conduct is not very encouraging, conduct on the ground on the P&L is much better than what we have seen in the previous years, and we'll have to see this play out even more in '27 and '28 for sure.

And sorry, if I just ask a very quick follow-up. Obviously, we've now had the second quarter of EBIT losses in Ocean. And in the past, you have talked about this on-the-ground discipline that the industry won't allow too many quarters of losses. So we're now in the second quarter. What did you mean then by saying not so pleasant place on EBITDA for the second half? Because I think that's something that the market doesn't want to understand? Like why would the EBITDA not be less in the second half?

I think the risk that you have on EBITDA is actually temporary pressure on it from -- the worst that happened to us is if demand softens slowly because before people act on capacity, they first start to use the pricing lever for a while to see if it's -- if that's going to solve the problem for them. If demand was to soften rapidly, just like we can see here, when the cost increase rapidly to get them recovered is good, and we can do it. When cost increases slowly, then it's much more difficult because the you don't have the same urgency. So I think if we saw a gradual softening of demand, you would see a period where people -- or you could see a period where people use pricing levers for a while to try to shore up their utilization. And until you go to an EBITDA-neutral freight rates, that might be tempting until then they start to switch to more capacity-driven tools.

That's the concern that -- I don't think it's necessarily likely. But we're trying to have a range that encompasses both the most concerning and the most optimistic scenarios with what we know today. Again, there's a lot of things that have happened since we talked 3 months ago that may also change that. But with what we know today, we feel that the range that we have covers some of the worst scenario we can think of and some of the better scenarios we can think of.

The next question from the phone comes from Lars Heindorff with Nordea.

The first one is a follow-up on the slow steaming, Vincent, you mentioned that. I mean I don't know if you can quantify -- I think the average speed around is maybe slightly below 15 knots. I mean how much further down can it go? And what kind of impact will that have on supply? What -- how much can you actually tie up in terms of slowing down? And then the second part is on the savings from the slow steaming. And then a question regarding the costs. There is an other cost item of almost USD 250 million in the first quarter in Ocean. You said that you've been moving -- typically been moving bunker around. Is that related to that? And is that something that you expect to continue to do into the second quarter?

Yes. Thank you, Lars. On slow steaming, I think the global networks today, at least on the long haul, they are sailing probably in 16, 17 knots area. And it would be quite -- it would be economical to bring the vessel speed down to about 14, 14.5, 15 knots depending on the service and the route and how you can secure berth windows and so on in the ports. at the current price for bunker is actually it's quite a positive thing. The other thing that would be extremely positive from a fuel cost perspective is actually to reopen the Red Sea, as I think one of the questions previously I was alluding to because when you're sailing from India to the Mediterranean, it's a lot -- you're going to burn a lot less fuel by going through the Red Sea than you will -- if you have to go the long route as we do today.

So those are the 2 things that we certainly are looking at. And it depends on the industry. It's pretty hard to assume exactly what people are going to do. I don't know. I only know what we're looking at. But if people were to do something similar to what we were to do, you could absorb between 1 million and 1.5 million TEUs in slow steaming effectively by reducing your cost in an economically positive way. So that's about the order of magnitude that there would be for me. And then on the other costs, let me -- let Robert give you an answer.

Yes. You might know that we obviously, like many others, we are trying to hedge some of the bunker costs. So this is, let's say, an unrealized loss on derivatives that we had to take according to the accounting standards. Again, it's unrealized. We'll need to see how this evolves, but that is the additional cost that we have seen.

And just, Robert, just on that one, which means that the physical movement of bunkers from North America to Asia, where the cost of that? It sounds terribly expensive. And as Vincent mentioned, DKK 1.5 billion on a quarterly basis. I mean, is that in network cost? Where is that showing up?

We will move to the next question. The next question from the phone comes from Arthur Trans Citi.

The first question I had was just around the Red Sea reopening. So if you imagine a scenario in which the hostility is ended tomorrow, what would be the earliest point that you could realistically imagine a full industry reentry to the Red Sea? Second question, just following up on the previous one. Are you able to just articulate how much of the [indiscernible] that you use is hedged? And then final one, if I may. Obviously, consensus EBITDA for the full year is towards the upper end of the range. It sounds like you are talking to a few uncertainties in H2 and potentially around timing even in Q2. Are you comfortable with consensus near the top of the range? Or would you rather it was somewhere else within that range?

Yes. So I think first on the guidance, I mean, I don't guide on the guidance. We provide a guidance, and I think that's I'm not going to be able to voice an opinion about where in the guidance is we should be. On the bunker, we don't have -- we don't hedge bunker. So the only thing that we have is how much we have on hand. And -- but we do not do speculative hedging of bunker. And then finally, on the Red Sea, it's really hard for me to talk to when -- how fast this could happen. I mean, as I mentioned, we are looking at it ourselves. It would have to be gradual because at least today, we would not -- we would have to go with either escort or monitoring, and there is limited capacity for that. So there is only so many services that we could send through.

And I would think that others would have the same. And for it to be a full return, you would need to feel comfortable with the safety and security assessment that you can sell without any monitoring. And I have no idea given the volatility of the situation between U.S. and Iran for when that is going to be. It could be very soon or it could take a while.

Ladies and gentlemen, thank you. That was the last question. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Thank you again for joining us today. To summarize, we have started 2026 with a quarter marked by strong volumes across all segments and equally important with is the strong cost containment that we have demonstrated, especially in Ocean, where we have seen a downward trend in unit cost since the inception of Gemini. Oversupply continues to affect container shipping, extend exerting downward pressure on rates that are visible in this quarter. While demand remains strong, this continued oversupply makes the ocean market environment very volatile. Nevertheless, as far as the Middle East conflict is concerned, its financial impact in the first quarter was limited, and we expect it to be managed without material financial impact in the coming quarters.

Ultimately, notwithstanding the ongoing disruptions brought about by the conflict, the strength and the resilience of our business means that we are in a position to maintain full year guidance for 2026. Thank you for your attention, and we look forward to seeing many of you on the upcoming roadshows and at conferences. Thank you very much, and see you soon.

Welcome, everyone, and thank you for joining us on this earnings call today, where we present our fourth quarter and full year results for 2025. My name is Vincent Clerc, I'm the CEO of A.P. M�ller - Maersk. And with me in the room today for the last time is our CFO, Patrick Jany.

Before we start, I'd like to thank Patrick for all of his hard work and support over the past 6 years here at A.P. M�ller - Maersk, and wish him the very, very best in the next steps of his career.

As we announced back in December, Robert Erni will succeed Patrick in the coming days. We look forward to introducing you to Robert on our upcoming road shows and conferences. If we start with the highlights from 2025 notwithstanding a challenging external environment, especially in Ocean, we are pleased with the strong year overall, in which we made good operational progress across all of our business segments.

We closed 2025 with a full year EBITDA and EBIT of $9.5 billion and $3.5 billion, respectively. This places us towards the upper end of the most recent financial guidance we had communicated to you back in November. Specifically in Logistics & Services, we strengthened the performance of our portfolio on the back of improved operation, stronger cost and yield management measures, delivering 4.8% in EBIT margin for the year.

This represents an improvement of 1.2 percentage points on 2024. We are, of course, proud of the progress we have made, but are either complacent or satisfied with where we are. And improving both our results and growth rates in Logistics will remain a priority in 2026.

In Ocean, Gemini successfully implemented, delivering unprecedented reliability for our customers and significant cost benefits, which we have revised upwards on an annual basis, and I will look at this further in a short while.

Gemini has also allowed us to deliver strong volume growth of nearly 5% through increasing asset turns while limiting the fleet size expansion. This was against the backdrop of sequentially receding rates because of increasing overcapacity and volatility created by trade tensions, especially towards the middle of the year. The agility of the new network helped us manage this volatility by ensuring that we could react to the volume swings on the U.S.-China trade lanes.

Finally, it has been a record year for Terminals, both in terms of top line and earnings. In the year, we delivered a strong revenue growth of 20% and EBIT growth of 31%. The top line was driven by strong volumes, mainly from additional Gemini services, higher pricing and continued growth investments in critical infrastructure.

Utilization remains high, but with our multiyear investment program, we are confident in our ability to take advantage of the market growth in the upcoming years. As we look ahead to 2026, we see a continuation of strong global container demand translating into a volume growth that we expect to land between 2% and 4%. Based on various scenarios we currently see, especially on industry overcapacity in Ocean, we guide for a full year EBIT of between negative $1.5 billion to positive $1 billion free cash flow above negative $3 billion and a CapEx for full year '26 and '27 combined of between $10 billion and $11 billion.

As usual, more detail on the guidance will follow later in the call. With the numbers now out of the -- for the full year, we can also announce a dividend proposal for the year that just passed. For 2025, the dividend proposal will be set forward by the A.P. M�ller Board at the AGM on March 25 and is a dividend per share of DKK 480.

This is equivalent to 40% payout of our underlying net results in line with our dividend policy and the same payout ratio of the 2024 dividend. Looking back at the year just past, we generated thus a total shareholder return of 35% in 2025 through capital gains and dividends.

With a strong balance sheet, we are also in a position to announce a continuation of the share buyback program. The new tranche will be approximately $1 billion with a duration of 12 months and will begin immediately. The lower level reflects the higher level of uncertainty and the lower rate environment that we are headed into in 2026. This implies a total cash return to shareholders for 2026 of approximately $2.1 billion, of which $1.1 billion is the proposed 2025 dividend subject to the AGM approval, and the remaining $1 billion is the new tranche of the share buyback program.

Now taking a closer look at the fourth quarter performance for each of our business segments. First, Logistics & Services continue to track positively this quarter. We achieved an EBITDA margin of 4.9% up from 4.1% last year, but down from the 5.5% we had in the last quarter. The year-on-year margin improvement comes from the -- on the back of operational progress made in warehousing and distribution primarily. This quarter marks the seventh consecutive quarter year-on-year margin improvement. And meanwhile, the margin contracted sequentially.

On the top line, revenue grew 1.9% year-on-year, driven mainly by warehousing and distribution, but fell 0.5% sequentially against the third quarter of this year of '25. Our focus remains on stringent cost control, portfolio discipline and capital efficiency to live the performance upwards towards an EBIT margin target of 6%. We are happy about the general trend throughout the past 7 quarters, but we also clearly have more work to do. In Ocean, we had our second full and clean quarter after the Gemini implementation. We delivered above-market volume growth with volumes up 8% year-on-year and a stable -- and stable on the prior quarter following the peak season.

The network continued to deliver high schedule reliability of 90% for our customers despite significant weather disruptions and substantial cost savings to Maersk. We continue to use our fleet efficiently with utilization of 94% on par with the third quarter. The cost benefit and agility of the new network have bolstered our operation against the backdrop of the ongoing freight rate decline. In Terminals, we delivered a solid quarter in a record year with a strong top line growth, mainly driven by volumes. Volumes grew 8.4%, driven by Europe, North America and Latin America and mainly through the Gemini network.

As we mentioned last quarter, much of the volume uplift has come from Gemini, which has put more boxes through our gateway terminals. Utilization remains high at 88%, but we are confident that with ongoing investments, we will continue to be able to capture good volume growth in the coming years.

Finally, return on invested capital for Terminals remained strong at 16.1%, well above the target of 9%. Turning to the main achievement of the year. We have updated the Gemini cost benefit we showed you previously and now expect the benefits to be higher than our initial guidance last quarter. Starting with bunker. We can see that the continued advantage of Gemini stemming from a more efficient use of our ships, for example, through lower speed, shorter distances and shorter dwell time is allowing us to reduce bunker consumption. This translated to an approximately 9% bunker consumption improvement adjusted for capacity for the quarter.

Then on the asset turn side, from the more efficient use of our vessels, Gemini allows us to transport more volumes on the same capacity. This quarter, we saw capacity growth of about 4% year-on-year against a volume growth of about 8%. The delta was about 4 percentage points, representing the improvement in asset turn. We can quantify the bunker consumption improvement of about 9% at fixed bunker prices into a cost benefit of about $150 million for the quarter.

Likewise, we can quantify the asset turn improvement of about 4 percentage points, which against our total network where cost translates into about $120 million of cost benefit for the quarter. An added advantage of Gemini has been to increase volumes in some of our gateway terminal, allowing us to significantly increase throughput. As with the prior quarter, the additional uplift has generated about $4 million in benefit this quarter, which annualizes to about $120 million to $200 million based on full year implementation and seasonality. Overall, across Ocean and Terminal, therefore, we have generated over $300 million in benefits here in the fourth quarter, and we are now targeting $820 million to $1.1 billion in annual benefits.

Turning to our midterm targets. As you might recall, we introduced these targets back in May 2021 to cover the midterm period of '21 to '25. Even though the reporting period technically ends, we will continue to use those indicators for 2026 and report on our progress in the same terms. Later in the year or early in 2027, we will revise our achievements and formulate new midterm targets. Nevertheless, we are finishing those 5 years -- as we're finishing those 5 years, it is time to have a closer look at the progress made, and you can see to the right of the table how we have performed over the 19 quarters since the introduction of the targets.

Overall, we have delivered exceptional performance at the group level with almost all quarters delivering last 12 months ROIC above target, which translates into an average ROIC of above target for all 19 quarters. Similarly, Ocean has performed well with EBIT above the 6% target for all but the first 2 quarters in 2024 and this most recent quarter with downward pressure on rates from increasing overcapacity. Terminal has truly transformed with a ROIC starting shy of the target back in 2021, but has been consistently above its target of 9% since the first quarter of 2023.

At the same time, we know where we have fallen short, namely in Logistics & Services, with an EBIT margin still below the 6% target that we laid out and modest revenue growth because of challenged products, primarily in middle mile and warehousing. Our priority in 2026 is to continue to improve where we have fallen short in Logistics & Services. And that is a good segue into the next slide. Looking ahead to 2026, we have laid out our key strategic priorities. In Logistics, our priority is to accelerate margin improvement and push harder on growth wherever it makes sense, which we define as the many part of the portfolio delivering high margin and where higher volumes will increase network utilization and thus, translate also in better margin.

Focus areas are, for example, a further reduction in white space and contract logistics or adding density to our e-commerce network. As part of our efforts to accelerate improvement in Logistics, we will simplify the organization as well. I will get back to this shortly on the following slide.

Within Ocean, we seek to protect the high asset turns we have achieved with Gemini, which will allow us to carry more containers with our existing fleet and so we can grow with minimal fleet expansion. Further, we continue to grow with the market as we did in 2025. Given market headwinds we are facing in -- for 2026, we will focus on profitability by sticking to our core principle of cost leadership, which will prove to be even more important in the coming quarters.

Finally, in Terminals, we continue to grow through existing and new location, maintain long-term profitability and ultimately deliver on our ROIC target. Our aim here is growth, concession excellence and operational excellence. Across all our business segments and in corporate, we continue to focus on driving further efficiency and simplification of our organization. Cost leadership remains core to being the best operator. We are transforming our organization within the Logistics & Services as well. This is to drive more value for our customers and reflecting the feedback from all of you. It will increase comparability and transparency to allow you to better benchmark our performance with peers.

We will report 3 new product segments, which reflect how we will simplify also the way that we run the business. These segments will be landside, forwarding and solutions with each of these product segments comprising its own set of products. Landside will comprise local and regional products linked to inland transportation, drayage in and out of terminals, ground freights in North America which offer largely expedited LCL road transport between centers. Depots, which are often located close to ports and terminals as well as custom services to assist customers with declarations, tariffs and other regulatory matters. Forwarding will comprise global forwarding and ancillary products, namely air freight, less than container load for ocean forwarding and project logistics of large cargo as well as insurance. Finally, solution will complain supply chain management, e-commerce and warehousing and distribution.

This organizational change will take effect on April 1 and will be reported externally for the first time in the second quarter reporting later this year in August. We will provide at that time, a year-to-date and year-on-year figures according to the new segmentation to help you for comparability purpose.

Finally, on the guidance for the upcoming year. First, we expect global container volumes to continue to grow in 2026, with growth expected to be between 2% and 4% and for Maersk to grow in line with the market. In that context, we expect an underlying EBITDA of $4.7 billion to $7 billion, and underlying EBIT between negative $1.5 billion to positive $1 billion and a free cash flow of negative $3 billion or higher. While we plan on operational progress and growth across segment, we expect container shipping rates to develop adversely, such that our guidance for 2026 is lower than for 2025. The guidance range reflect industry overcapacity that already exists today from the new vessel deliveries and different scenarios with respect to a full Red Sea opening in 2026.

Our CapEx guidance for '25 and '26 is unchanged compared to the previous levels and around $10 billion to $11 billion, and we expect the current funding -- the corresponding figure for '26 and '27 to be the same.

I'll now hand over to Patrick, who will walk you through the detailed financial and segment level performance.

Thank you, Vincent, and good morning, everyone. We closed the book on 2025 with a good operational delivery in the fourth quarter, delivering an EBITDA of $1.8 billion and an EBIT of $118 million, implying margins of 13.8% and 0.9%, respectively, placing us very much where we expected to be.

On a full year basis, we delivered an EBITDA of $9.5 billion and an EBIT of $3.5 billion, equating to a 17.7% EBITDA margin and a 6.5% EBIT margin for 2025. While both Logistics & Services and Terminals delivered improving year-on-year performance, excluding one-offs, the first benefiting from improved operational efficiency and the latter from higher throughput from Gemini, the quarter saw overall decreased earnings resulting from receding freight rates in Ocean. Return on invested capital was 5.7%. This is lower both year-on-year and sequentially and reflects the additional investments made this year in Ocean and Terminals together with a very strong earnings in the latter half of 2024, no longer being included in the last 12-month measure.

We continued returning cash to shareholders in Q4, distributing $620 million through the ongoing share buyback program for a total of $2 billion for the full year. Finally, we maintained our strong liquidity positions with total cash and deposits at $21.4 billion at quarter end and with net cash decreasing year-on-year to $2.9 billion primarily due to the cash returned to shareholders through dividend and share buybacks.

Going into 2026, our balance sheet remains strong and allows us to continue pursuing our strategic growth objectives while simultaneously returning cash to shareholders and weathering the expected downturn in Ocean.

Let's take a closer look at the cash flow breakdown on Slide 15. The fourth quarter operating cash flow was $2.5 billion, driven by an EBITDA of $1.8 billion, together with a positive impact from a substantial unwind of net working capital. This resulted in strong cash conversion of 137%, up on last year's 123% in the quarter, leading to 102% conversion for the full year. Gross CapEx decreased to $919 million, down both year-on-year and sequentially, primarily due to a lower level of investments in Ocean which, together with capitalized lease installments of $819 million resulted in free cash flow of around $1 billion.

For the full year, CapEx landed at $4.8 billion at the lower end of our guidance. Free cash flow also included a positive contribution of $349 million, mainly from dividends received from our minority investments. We repurchased roughly $620 million of shares during the quarter, which is reflected in the dividend and share buyback column. Finally, a large portion of our term deposits matured in the quarter, implying an increase of the readily available cash.

Starting our segment review with Ocean on Slide 16. Strong demand prevailed in the fourth quarter and our Ocean business managed to successfully capitalize on this momentum, delivering substantially increased volumes while reaping the cost benefits of Gemini in an otherwise deteriorating market environment. Volumes increased by 8% year-on-year across more trade lanes, driven by sustained strong Asian import. Sequentially, volumes remained roughly stable at a negative 0.4%. Fit rates continue to decline in response to the ongoing market pressure in industry supply demand imbalance, declining by 23% year-on-year and 8.8% since the previous quarter.

As a result of the significant rate decline, profitability turned negative in the fourth quarter as Ocean incurred a loss of $153 million. Ocean continued to benefit from the Gemini network. The scale reliability of the network remains in line with our target. And we have seen the immediate financial and operational year-on-year impact of better asset turns and bunker savings cushioning the full impact of declining rates. While continuing to invest in our Ocean business in line with the overall strategy, CapEx was comparatively low at $603 million compared to $1.2 billion last year, mainly due to significant vessel installments in Q4 2024.

Sequentially, CapEx also decreased by around $300 million due to lower equipment investment. On the next slide, you can see a breakdown of the individual elements, which contributed to the EBITDA development in Ocean. The year-on-year rate decline was the dominant headwind, contributing a large negative impact of $2.1 billion, only partially offset by stronger volumes. The price of bunker decreased 11% year-on-year to $512 per tonne, which had a positive impact together with 5.4% lower bunker consumption from primarily Gemini-related efficiency gains. Container handling costs were up from increased terminals and empty repositioning costs. And then there is a negative comparative impact from the timing of revenue recognition in the final bucket, offsetting the impact of lower SG&A costs. Overall, Ocean EBITDA for the fourth quarter landed at $1.2 billion, down 59% from the previous year and 35% sequentially.

Now let's have a look at the KPIs of the Ocean business on Slide 17. Loaded volumes increased by 8% year-on-year to 3.4 million FFEs across most trade lanes from continuing strong Asian exports, leading us to almost 30 million FFEs for the full year. At the same time, average freight rates decreased 23% from last year and 8% sequentially, while remaining flat throughout the quarter itself. Unit cost at fixed bunker decreased 4% year-on-year and 1% sequentially, benefiting from the stronger volumes offsetting the higher cost base. Bunker costs decreased 12% year-on-year, primarily from 11% lower bunker prices and further supported by the already mentioned 5.4% lower bunker consumption driven by high efficiency of the Gemini network.

This was all partially offset by the EU ETS payments. The size of our fleet was stable sequentially at 4.6 million TEUs, implying a 4.3% increase year-on-year. This is the result of the capacity injection in early 2025, initially for Gemini, which has allowed for higher volumes and to satisfy the strong demand, which is also reflected in our sustained high utilization, which was sequentially unchanged at 94% in the fourth quarter. In terms of product mix like in the last couple of quarters, a majority of the volumes came from strong term contracts with 55% of volumes in Q4 compared to 45% of volumes for our long-term contracts. Looking forward for 2026, we expect a slightly higher share of volumes to come from long-term contracts with about half the volumes to come from long and half from short-term products, respectively.

I would also like to briefly comment on the change in how we account for our vessels in -- on the balance sheet starting in January 1st of this year. Over the last years, we have observed an increase in the average time frame in which our vessels remain economically viable. And as a result, we have increased the estimated useful life from 20 to 25 years. The impact of this will be approximately $700 million of reduced depreciation in 2026, which is reflected in the financial guidance, as you might have already read in the footnote.

We continue to our Logistics & Services business on the next slide. The year-on-year development in Logistics & Services highlights the operational improvements to the segment that we have made throughout 2025. While there was top line growth, the biggest difference came through improved profitability resulting from our efforts at turning around the more challenged products like warehousing and middle mile. Revenue in Logistics & Services grew to almost $4 billion in the quarter, up 1.9% compared to last year, driven by improved volumes across most products.

Sequentially, revenue declined modestly at negative 0.5% following a strong third quarter. EBIT increased to $194 million, mainly driven by solid performance in warehousing, last mile and lead logistics. This implies a 4.9% margins, up 0.8 percentage points compared year-on-year and marking the seventh consecutive quarter of year-on-year EBIT margin increase. Sequentially, the margin decreased by 0.6 percentage. CapEx was $129 million in the fourth quarter, declining another quarter year-on-year to reflect the slightly lower investment level in 2025, where focus has been on improving operational performance.

Now let's have a look at the segment breakdown by service model. Overall, we recorded a positive business development in a generally supportive business environment with one of the biggest weak point being the U.S. import-linked activities. This can be seen in particular, in freight management, where revenue declined to $532 million, down 8.9% year-on-year as lead logistics volumes were significantly down on the China-U.S. corridors, given the tariff environment, while customs held broadly stable. EBITDA margin improved to 19% from better execution. Fulfillment services increased revenue by 1.5% to $1.5 billion, while increasing the EBITDA margin to around breakeven. Warehousing was here the largest contributor to the higher margin with middle and last mile also trending better after the rebasing actions we executed during the year.

In Transport Services, revenue grew by 5.6% to $1.9 billion. EBITDA margin eased to 7.1%, and strong air and landside transportation volumes growth was offset by softened prices against a still relatively fixed cost base in own control capacity. Additionally, margin was impacted by a $22 million impairment of aircraft, representing about 1.2 percentage points of the year-on-year margin decline. Stepping back to margin journey we set out at the start of the year remains on track. We have lifted the operational flow in our fulfilled by Maersk products and prioritize profitable wins while keeping CapEx insured. While the business is by far not where we want it to be in terms of growth and profitability, 2025 has moved us closer.

Let us now turn to our Terminal segment. This business rounded off an excellent year with another strong quarter. Revenue grew 13% to $1.4 billion, driven by strong volumes, which increased 8.4% year-on-year, supported by increased throughput from Gemini and geographically driven by Europe, North and Latin America. Additionally, the top line was supported by a higher rate level. With another quarter of strong volumes, utilization for Terminals remained high at 88%. Revenue per move increased 4% year-on-year to $363 per move driven by improved rates and favorable FX development, somewhat offset by lower revenue from storage. On the other hand, cost per move increased by 5.9% from labor inflation coming through together with adverse FX, overall increasing despite higher utilization.

Terminals delivered fourth quarter EBIT of $321 million, down 5% from $338 million the previous year, impacted by an $86 million expense related to the impairment of a terminal in Europe and a write-down in Asia. Adjusting for this one-off, EBIT would have increased to $407 million, equivalent to an EBIT margin of 30.1%. Sequentially, EBIT decreased as expected given the significant positive one-off reported in the third quarter. On the back of strong performance throughout the year, return on invested capital increased to 16.1%, CapEx remained stable at $152 million, roughly in line with previous quarters.

Now let's have a look at the breakdown of Terminals EBITDA development on the last slide. EBITDA for the fourth quarter increased to $440 million from $421 million the previous year. The year-on-year increase came mainly from the higher volumes contributing a positive impact of $52 million, which was further supported by a $16 million impact from higher revenue per move. This more than offset the negative impact from labor inflation and higher costs of $48 million.

This finishes our business segment review. Let us now proceed to the Q&A. Operator, please go ahead.

[Operator Instructions]

And we have the first question coming from Muneeba Kayani from Bank of America.

So Vincent, you talked about the range of the guidance. I just wanted to get back on that, like how have you thought the low and the top end of that guide in terms of a freight rate scenario or Red Sea timing? I know you said gradual reopening is kind of what you've assumed, but if you can help us think about that scenarios and kind of the cadence of that guide for this year, please?

Muneeba, thank you for your question. I think the way to think about this is whether it is through the new ships that are coming in or through the return to Suez, we're going to free about -- we're going to have an overcapacity of anywhere from 4% to 7%, 8%. And for that to resorb itself, you will need to see some scrapping.

There is a lot of pent-up capacity that needs to get scrapped and didn't get scrapped since COVID basically for 6 years. And there is also a tonnage that needs to be returned. So that will create a few quarters that are going to be a bit bumpy.

If we return fast and full to Suez, we will see probably more pressure on the freight rate because there is a bigger gap that we need to close at once. If we have an orderly slow gradual return, we might be able to manage it better, but it all starts to get to the upper end of the guidance that we start to see some scrapping starting to occur because it means that we're starting to eat into some of that overcapacity. And so it really depends how quickly the industry reacts to the current start over the capacity, how quickly we move through -- we get back to Suez and how much of the tonnage gets pushed back to provider. I think that's really the underlying thing that you need to get into towards the upper or the lower end of the guidance.

The next question comes from Cristian Nedelcu from UBS.

It's a two-part question, if you allow me. The first part of CMHC has recently announced that it's selling a 25% stake in their terminal business. Would you consider spinning off or selling a stake in terminals to crystallize value or accelerate the growth in Terminals? And in relation to this -- in relation to the capital allocation, there are some opportunities out there, Panama ports. You talked about Logistics M&A. The way you've reduced the share buyback, so just a more prudent approach on capital deployment. Is this prudent approach valid also for acquisitions in Terminals and Logistics.?

Cristian, we've seen the deal from CMA. I think they are trying to monetize some of the portfolio. I think with the balance sheet that we have today, we have no need to monetize and can perfectly as we do this year, even on a reduced guidance, maintain a strong return to shareholder and conduct the investment that we need to do.

You mentioned Panama, there would other -- I think, in general, the world has underinvested in terminal capacity for a while, and there is over the coming decade, need for significant investment in greenfield projects to add terminal capacity to match the flows of containers that there is globally.

That's also what we plan on doing, and you've seen some of those facilities start to come online during 2025. There will be more in the coming months and quarter. But here also, we have the wherewithal to do it. We have the wherewithal to continue to renew our fleet and be able to sustain a strong position in shipping. And then on Logistics, it's always a question of finding the right candidate, the right opportunity and being ready to do that integration. Certainly, that remains one of the financial axis of the strategy.

But at this stage, I would say we are, of course, prudent towards capital deployment and keeping as much of our powder dry as possible given some of the unknowns in the outlook. But it is exactly to preserve the ability to countercyclically go and do some moves when the time comes.

The next question comes from James Hollins from BNP Paribas.

Best of luck to you Patrick. Thanks for everything. Just on the Red Sea, I'm just wondering if, if you can run us through kind of the rationale you saw with your desire seeming desire to be a first mover back in the Red Sea amongst your main competitors and kind of linked to that, the expected time lines as you would see them for Maersk to be fully back through the Red Sea, assuming everything else geopolitically stays the same and kind of what you'd expect to see from your competitors from here?

Yes. Thank you, James. So a couple of points to start with. If you look at the Suez transit in January, they're up 50% versus what they were a year ago. So -- and that's not with a lot of Maersk ships there was only one of them that crossed during that period. So we're not the first movers.

There has been a significant uptick across tankers and bulk segments, for sure, but also with CMA having a much more aggressive, they have multiple services already that have been transiting throughout the period and more aggressively also over the past month and even quarter.

So we are a second mover, if you will, on that. For us, the security assessment has been on different levels. First of all, obviously, we follow the situation in Gaza, where we seem to be moving slowly along a peace process with where we are going to go with the reopening of the border with Egypt and so on, where there's a lot more talk about now reconstruction rather than a new round of hostilities.

There has not been any attack since October from the Houthis on any ship. There has been declaration also from the Houthis that they do not intend to attack anybody. So for us, the -- and again, a lot of ships are crossing every week. And we monitor the situation and how we're doing. We're talking to others and see what intelligence do they have. The conclusion that we have is today, it is safe for us to move into a Phase 1, which is having some services specifically the ones for whom going around the Cape of Good Hope is the longest deviation where it is safe to move under escort and go through the Bab el-Mandeb.

There is limited escort capacity. There are a lot of shipowners today that already moved through Bab el-Mandeb without escort. I feel that it's a bit premature for at least for how we assess the security situation. And therefore, there is a certain limit to what we can do.

At some point, we need to get into a situation where the temperature comes further down, where we feel it is also safe for us to move into -- to reopen services even if we don't have escort. And that would be probably what triggered the difference between what we have announced so far and a more full return would be the ability that we have to see that we can move without the military escort that the service that we do it today have.

The next question comes from Lars Heindorff from Nordea.

Yes. On the share buyback, I don't know if you can indicate your thoughts behind the $1 billion, down from the $2 billion last year? And also, what kind of balance sheet ratios, I don't know if net interest bearing debt to EBITDA is the only ratio you look at? Or if there are other ones that you sort of steer after in order to determine the size of the share buybacks?

Yes, I think probably two parts to your question, Lars. So first on the share buyback, I think we decided to continue with the share buyback. I think, which is the main message here because we have a strong balance sheet. And as we have said before and Vincent mentioned as well on the call, we will continue to obviously invest in growth in Terminals to renew our fleet and also to expand our logistics business while knowing that you were downturn in Ocean.

This is now coming, I would say, closer with a return to the Red Sea, which you see different scenarios reflected in our guidance. I think it's a word of caution to continue the confidence, which we show by continuing, but also reduce a bit the dimensioning, which at $1 billion is still pretty significant when you look in terms of absolute returns. So we feel it's a good balance. But by keeping a prudent approach to the balance sheet obviously recognizing and keeping a commitment to return cash to shareholders. If you look at the ratios, which we use for that, I think when you are on a net debt positive, so a net cash position, the ratio is a little bit out of scope in terms of net debt-to-EBITDA, clearly.

So we look more at free cash flow, right ratios, but we are well above those elements. So it's really when you look forward on -- as we talked around the last few years, when you model a potential overcapacity having an impact on Ocean profitability and the Red Sea returns compared to the progress in Terminals and Logistics. You come into different scenarios, and we feel with this strength of balance sheet, return on shareholder via SBB, but also our guidance. We have a good cushion looking ahead, and we will not be threatening any ratios. Typically, as you know, we aim to be solid BBB. That is quite far off the position where we are today. We can only repeat the 1.5x net debt-to-EBITDA as an order of magnitude on the over-the-cycle EBITDA, obviously, not the crisis year EBITDA as being the reference in terms of balance sheet modeling.

The next question comes from Jacob Lacks from Wolfe Research.

So it feels like there's a pretty clear focus on the cost structure between the corporate restructuring and further increases in Gemini savings. To the extent the market remains oversupplied beyond just this year, do you think there's further cost opportunity to help offset inflation rightsize the cost base?

Jacob, yes, I think -- so obviously, as we head towards leaner times, focus on cost and very hard focus on cost is absolutely paramount. So I think the work that we have done with Gemini has yielded quite a significant amount of efficiencies for us. We think that there is more that can be done there. And certainly, we're going to do this. A return to Suez is going to reduce costs going to enable more slow steaming as well. So -- and we can expand some of the Gemini philosophy to other services. Something can be done on organization as well.

We've made some announcements on this. I think there are -- there are 3 more levers to reduce cost further. The first one is we still have a time charter market that is at extremely elevated level. which usually follows freight rates after -- with a bit of lag. And I think when the trend on freight rates confirms itself, which, I mean, unless there is another shock, this is what we're going to continue to see in the months to come, we're going to see the time charter market come down as well, and this will generate significant savings as well because a significant amount of our fleet also is on time charter and will gradually be renewed at those lower levels.

That's the first -- that's the first one. The second one is procurement. I mean the times have been good. And of course, some of our suppliers might have been benefiting a bit from that. And that's certainly time for us to just make sure, and I think this is going to happen across the industry that we get back to pretty hard core negotiation on everything and in some cases, roll back some of the inflation we have seen in the past few years.

And then finally, I think on the front of productivity, the scaling of some of the AI tools that we are having, they have some opportunities to go further on the organizational costs in the couple of years to come. And so those are the areas where we feel there is more to go get and that will help continue to cushion further I think the results, if the supply and demand environment stays weak for a few quarters. And then, of course, the other thing is to continue to diversify the portfolio. The more -- the better margins we get in logistics, the more we get out of our Terminal business also to more, it kind of reinforces the whole thing.

The next question comes from Alex Irving from Bernstein.

I'm going to come back on your Gemini cost savings, please, on your slide 7. So you talk about $820 million -- $1.1 billion of annual cost savings, $960 million at the midpoint, of which there was $310 million in Q4, about 1/3 of it so our cost savings going to be lower in the coming quarters? Or how should we think about the cadence of those cost savings as we go through 2026, please?

Yes. So I think, Alex, you can expect it's hard to estimate there is some seasonality always. I think the savings are going to be a bit less in the first quarter because you have Chinese New Year with a month of subdued demand and a lot of canceled sailings and so on.

And then I think we look a bit at the average of what we have achieved in the third quarter and the fourth quarter, adjust also for maybe seasonality demand first quarter and then we get to a midpoint. What I think is truly important here is that we can see the consistency with which this is being delivered. You see this on a quarterly basis. I have the benefit of getting weekly reports on that.

I think this is very, very solid. We've really made a parallel shift on our production cost with Gemini. And we can see that with some of the reports or some of the financial data we're getting on some of our competitors that we can actually notice that we stand with a competitive advantage today. And especially given some of the tougher times, we might have ahead, I mean that is going to stand -- they're going to be very -- are hitting a dry spot, if you will. I think for us, the key now is to say, how can we grow that? Of course, we need to realize the $1 billion for the full year. But then how can we grow that further because Gemini today is about half of the network, and there is still some potential for us to do that elsewhere. But it does require, for instance, that we have a permanent hub in Panama, so we can stabilize our Latin American coverage over there. It does require a few things that we're working on now to continue to grow that competitive advantage.

The next question comes from Alexia Dogani from JPMorgan.

Could you let us know if you're interested in engaging in any shipping M&A?

Is it because you're aware of candidates or are you selling? I think it's really hard to comment on that. I think the strategy that we have is pretty clear. Our focus is we have an infrastructure business in Terminals and a Logistics business that have a lot of growth potential and a lot of very stable and solid earning potential.

At the same time, we have a shipping business that we continue to invest in from a renewal perspective and where we keep an eye on the competitive landscape and how we can stay, how -- what is the best way for us to remain competitive and not just bleed this to a place where certainly it's not good. So it is not the focus for us to do that in the shipping. Our focus is elsewhere. Our strategy is unchanged. But it's something that might require a review at some point. But I think for now, that's the strategy that we have.

The next question comes from Arthur Truslove from Citi.

So just quite a simple question for me. Based on freight rates that we've seen thus far, is there any reason why the loss in notion in Q1 should be significantly different to what you saw in Q4? Obviously, at the EBIT level and obviously stripping out the adjustment you've made the depreciation rates.

So I think there's 2 things you should expect in Q1. First of all, I think quite a lot of the contracts are basically resetting either the 1st of January or the 1st of February. And then you have some seasonal fluctuations around Chinese New Year, which means that in general, the volumes and therefore, the yields that you carry on your network are a bit lower than what you have in a normalized quarter, which the last 2 would be from a volume perspective.

The next question comes from Parash Jain from HSBC.

I have one follow-up question. if you can shed some color on how has the start of 2026 been? And we have seen some pullback in the rates leading up to the Chinese New Year. But when you look at the CCFI trend sequentially or when you look at the guidance from one of your Asian competitors, it seems like all else being equal, first quarter will be sequentially better than fourth quarter. Do you concur with that impression?

And secondly, what are you hearing from your customers, particularly in the U.S. with consumption remains solid potential restocking post Chinese New Year?

Parash, Yes. So as Vincent was saying, I think we obviously don't guide on the quarter. But I think if you look at directionally, we would expect rates to continue to come down. And as Vincent was saying Q1 is not the strongest quarter, right? You have Chinese New Year and so on. So the rhythm will be determined on how the business is doing after Chinese New Year, right? What is the level that is set afterwards.

I think if you look at our yearly guidance, it implies certainly that Ocean will have results lower than it has in 2025 or even the last quarter of 2025. As you can assume that Terminals will continue to be good. Rather stable, I guess, from 1 year to the other logistics will continue to progress, and therefore, the difference in EBIT is clearly to be looked at from the Ocean point of view.

So I think clearly, we see demand still strong. We had just guided for 2% to 4%. So there might be here and there some quarterly impact. As I said, for Q1, it is Chinese New Year and the rebound. But overall, for the year of '25, we see on a continuation of a quite solid demand. So between 2% and 4%, so roughly 3%. And the EBIT of Ocean being obviously significantly worsening as the rates have come down and continue to come down.

And then on the U.S. consumer, I think the sentiment from the customers I've been talking to is that actually 2026 in the U.S. is going to be strong. There's a midterm coming, and there is a huge fiscal stimulus that continue to be put into -- pumped into the U.S. economy. And therefore, the American consumer keeps on doing what it does best, which is actually consuming. And so we expect demand to stay quite stable in the U.S. and to continue to grow also elsewhere. After that,' '27, we'll have to see, but that is for '26, that's -- we see no sign of weakening anywhere.

The next question comes from Ulrik Bak from Danske Bank.

Just a question on your Ocean volume growth for 2026. You obviously assume the volume growth to be in line with the market, 2% to 4%. However, over the past couple of quarters, you've actually outgrown the market. So would it be fair to expect some tailwind in Q1 and Q2, where you may grow faster than the market as Gemini was only ramping up in H1 last year before aligning with the market in H2. Some comments on that, please?

Yes. Ulrik, I think look at it over the years, you will always have a couple of quarters where you are a bit faster. It's always super hard to just hit it right down to the month or the other quarter basis. I think if you look at 2025, clearly, the Q1 was a bit weaker on the volumes and then the following 3 quarters were very strong and it contributed to us growing in line with the market for the year.

I think probably just a year-on-year comparison would assume that then because we had a first -- a bit of a weak first quarter, growth will be higher than market in Q1. But since we have very strong quarters after that, then more subdued and distributed after -- in the subsequent quarter. But overall, we're going to be able to tag along with the market.

That's very clear. And if I may just follow up, just in terms of your capacity in Ocean, if your prediction that we will see a return to the Red Sea. How should we think about your capacity in Ocean, which has gone up quite significantly over the past couple of years?

I think you should think about -- you should think about it in a way that we're going to manage it with a keen eye on the bottom line. There is some tonnage that we will keep and reinvest into slow steaming. There is some tonnage that we will return to the tonnage provider.

As I mentioned before, I think the market is going to come down. We're going to do also a lot of yield management. The fact that the deliveries that we have from our order book is maybe not as high as some of the others, and we still want to keep growing with the market may mean that some of it we will keep and invest it into ensuring that we do grow with the market. But we have basically -- I think we come into this down cycle with a lot of flexibility. We don't have a lot of capital commitments in investments that are coming online. We have a fairly flexible portfolio. So I think as this situation normalizes, we are left with the optionality to do what's right for the bottom line.

The next question comes from Marco Limite from Barclays.

So you were discussing before about '26 and potentially at least a few quarters of very weak spot rates once and when the Red Sea opens. But then if we look beyond '26, in '27, '28 we have according some external data, we have got 9% capacity addition in '27, 14% '28. I mean, what do you expect for profitability? I mean do you think that profitability will further slowdown in '27 versus '26 and even more '28 versus '27 given the very big influx of new capacity? And therefore, what can you say at this point in time about share buyback beyond '26, so share buyback in '27 and '28?

Look, when you look at the development, we have obviously alluded it in our previous encounter. I think we have a strong balance sheet towards the downturn. The unknown is how deep and how long will it last, which is your question.

I think you have 2 different models. One is to have it on a multiyear smaller impact or to have it on a deeper impact in 1 year and then it rebounds because ultimately, as we have listed and also Vincent alluding to it, -- you do have a lot of capacity, which has not been replaced. So you do have a lot of old vessels on the water, which are economically not viable, which with the current level of rates -- and if you project that this continues, are just not economically viable to be in the water. So there will be, at one point in time, return to the capacity providers or scrapped or idled.

And those tools will be deployed as soon as the rates are starting to take effect and be painful from the cash point of view. And therefore, I would expect this to happen this year, particularly in the scenarios where the Red Sea reopens fully and fast. That will trigger a reaction. So our view is not that we will have 3 years of pain, but more that you will have 1 or 2 years of pain and then the capacity will be taken out and that will readjust a little bit because ultimately, demand is actually quite solid and has been quite solid, and we see it for '26 as well, quite stable. So those elements will adequate over time. It is hard to say whether it's in 12 months, 24 months or 36 months. But it will adequate.

And therefore, we don't feel that the balance sheet is stretched on the one hand, but on the other hand, it is conservative and good to keep a solid balance. And share buybacks are every year, right? So we will look at it every year. And if the world is totally different from what we expect, we'll have to come to new conclusions.

But for now, we see that it's actually pretty much in the line of the scenarios that we have discussed in the past.

And is there a sort of minimum level of rates you have got in mind for the medium term?

Sorry, can you repeat the question? We didn't get it here.

Sure. Is there, let's say, a minimum level of rates on which the industry can leave in your view on the medium term? Where things will normalize despite the big influx of capacity?

Yes. So I think the important thing to consider is that -- for me, the overhang of capacity that is coming in the next 4 years, when I put it side by side with the amount of ships that are over 26, 27 years, and that would be candidates for scrapping because they are just at level of either fuel efficiency or cost or whatever that are no longer or size or models that are no longer competitive.

I think this -- we have all the tools across the industry to get this back in whack. The question for how long it takes is how long does it get for the industry to get back to what was normal before like hygiene before every year, but that has not been necessary for the past 6 years because of the abnormal cycle we've been into.

If it takes long for the discipline to come, then you will see rates that can be at a difficult level for a while. If you -- if there is good discipline and people do what needs to be done because it's not a lot, it's not abnormal. Then this could resorb itself quite fast. But I think what -- to your point, I think you will go down to incremental cost.

So that, I think, is a bit of the -- what is your -- what is the incremental cost that there is for the capacity. And then so you get to this cash neutral pricing. And then on the up as well, if the profit gets above a certain margin, where some of these old ships make sense to sell, then you might want to keep them.

So I think the need that there is now to do that homework will put both a floor under how bad it can be, but also probably a ceiling about how high it can be for a while before people stop doing what they need to do, and it pressures things again.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Well, thank you for joining us today. And to summarize, I think that we have finished 2025 with a really solid fourth quarter, translating into a strong full year results with our 2025 guidance delivered.

We demonstrated operational products across all of our business segments, most notably with the successful implementation of Gemini in Ocean, the operational initiatives that we undertook in Logistics & Services, which have improved our margin there and a record year in our Terminal business helped by the volume uplift from additional Gemini services.

Further, we continue to deliver significant capital returns to our shareholders with the continuation of a share buyback program and dividend in 2025. As we navigate the potential headwinds of the external market environment, our focus remains the same as in prior quarter, and that is to stay the course on being the best operator and for the upcoming period, this means focused on cost discipline and reduction, improving productivity and simplifying the organization.

We will look forward to seeing many of you on our upcoming road shows and conferences. Thank you for your attention, and see you all soon. Thank you. Bye-bye.

Welcome, everyone, and thank you for joining us on this earnings call today as we present our third quarter results for 2025. My name is Vincent Clerc. I'm the CEO of A.P. Møller - Maersk. And with me in the room today is our CFO, Patrick Jany.

As usual, we start with the highlights of the quarter just passed. We are pleased with the strong execution shown during the quarter in all businesses. We improved our performance across the board and delivered on an EBITDA of $2.7 billion and an EBIT of $1.3 billion, up from the previous quarter. All segments showed strong sequential volume progression, while costs were kept under tight control. These efforts paved the way for the strong results, notwithstanding the external environment.

Specifically, in Logistics & Services, we are staying the course, focusing on operational margin improvements on both prior year and quarter to maintain the streak of good progress in 2025. We also registered good underlying and seasonal volume growth, which more than offset the softening observed in North America.

For Ocean, this third quarter was the first full and clean quarter of the Gemini cooperation. While we kept delivering reliability at 90-plus percent, we also generated cost benefits well above the target we had communicated. This excellent performance was supported by strong volumes and high asset utilization as well as asset turns. As expected, rates softened during the period as new capacity continued to be inflated ahead of demand.

Finally, our Terminal business delivered again record high revenues and profitability, driven by strong volumes, not least the ones delivered as a consequence of the Gemini implementation and the highest ever utilization across our portfolio of gateway terminals. With another quarter of sustained high demand, especially out of China, we expect a market growth around 4% for the full year. This strong demand, combined with the successful implementation of Gemini and progress across all segments allows us to narrow the full year 2025 guidance to an underlying EBIT of between $3 billion and $3.5 billion. As usual, more details will follow on this later in the call.

Now taking a closer look at each of our business segments. First, Logistics & Services continued to track positively. We achieved an EBIT margin of 5.5%, up from 5.1% last year and 4.8% last quarter. The key levers of progress remain asset utilization, productivity improvement and stringent cost management. Aside from these efforts, the top line also grew 2% year-on-year and 9% sequentially, the latter reflecting both seasonal strength and new win implementation, which offset the softening of demand in North America.

In Ocean, as mentioned, we had our first full and clean quarter of Gemini -- after the Gemini implementation. From already the first month since the implementation in February, we have seen the network deliver reliability above 90% and show resilience against disruptions such as weather, which we have seen recently in the Far East with the worst typhoon season in 10 years. Meanwhile, we continue to deliver 90-plus percent reliability in the third quarter, and we also achieved significant cost savings even compared to the ambitious target we had communicated to you earlier this year. I will go into more details on this very shortly.

What Gemini has allowed us to do with these savings is to use our fleet more efficiently and capture more volumes. Our volumes are up 7% year-on-year and 5% sequentially for this quarter, while the average loaded freight rate was more or less in line with the prior quarter. Good volume development has also driven high utilization of 94% for the quarter, up 0.5 percentage points sequentially. All of this happened against the backdrop of decreasing rates as expected.

In Terminals, we delivered another excellent quarter, driven by record on volumes, revenue, EBITDA and EBIT. What we have not talked about so much until recently is the volume uplift in our gateway terminals from Gemini, which has been a key contributor to our performance this quarter. Return on invested capital has delivered a further uptick to 17.2%. Here, we note that with utilization close to 90%, we are approaching the full potential at which operations in some of our locations become less efficient and volume growth opportunities become more limited in the short term. We continue to invest to debottleneck our existing terminals as well as grow with new locations as exemplified by the inauguration of Rijeka Terminal in Croatia less than 2 weeks ago and several other projects in the pipeline.

Turning to our midterm target. As you can see, we have shown almost full delivery on our 2021 commitment. As mentioned, we continue to stay the course of regular progress in Logistics & Services, which is tracking positively with EBIT margin up both year-on-year and sequentially, although more needs to be done on that field. We continue to make good operational progress with our challenged products of Air, Middle Mile and Last Mile, while seeing good revenue growth in our other products, more in line with our organic revenue growth targets. Our priority is to continue to improve in the fourth quarter as we round off the relevant period of these targets.

Taking a step back from this quarter, I want to just take a couple of minutes to get into more detail as to what has been driving such a robust demand growth in Ocean and some of the consequences of this phenomenon, which we do not think are sufficiently well understood. Despite talks of deglobalization, nearshoring, trade wars, container demand has shown a remarkable resilience over the past few years that has confounded many observers and models.

During this period, China's export growth into all regions of the world, except for North America, has not only been resilient, it had gathered pace. China's share of global export has increased significantly and never as fast as it has over the past 2 years. Specifically, its global export share has increased steadily from 33% only 2 years ago to about 37% this year. This growth is part of a longer trend as reflected from the chart to the left, but has accelerated recently. It affects all regions with the Far East, excluding China being the biggest market and growing at 12% per annum, and Europe the second biggest market and growing at 10% per annum. North America, which, in this case, is including Mexico, which is the third biggest market, has been weaker, but still has seen growth at 5% per annum despite the known trade tensions in 2025.

Given the widely available production capacity in China and the very competitive products that are being exported, we do not expect this trend of accelerated export growth from China to stop. The momentum is strong. The consequence for us are not only the resilience of demand growth, which will contribute to absorbing some of the new capacity coming online, but also the increased trade imbalance that it is causing, which over time will lead to higher production cost and lower asset intensity for the industry. On both fronts, Gemini offered us a much needed flexibility so that we can capitalize on the growth opportunity while minimizing the cost impact.

Moving back to Q3 and to Gemini specifically, this is the first quarter where we can see the full effect of the new network, and we are pleased that the savings are higher than our original guidance. To give you a sense of the benefits, we separate the Ocean cost savings, which were the ones we had communicated into 2 buckets, namely Bunker Savings and Asset Turn increase. Aside from these, we can also present an upside that we have seen in Terminal as a direct result of this new cooperation.

Now taking each of this in turn and starting with Bunker. We can see that the advantages of Gemini stemming from a more efficient use of our vessels, for instance, through lower speed, shorter sailing distances and shorter dwell time are allowing us to reduce the bunker consumption. This quarter, we saw a 6% higher capacity, but about -- but about 3% lower total bunker consumption. And this translates in an approximately 8% bunker consumption reduction corrected for the changes in capacity. Then on our Asset Turn side. From the most efficient use of our vessels, Gemini allows us to transport more volumes at the same capacity. This quarter, we saw the capacity growth of about 6% against the volume growth of 7%. The delta of about 1% point represent the improvement in asset turns. Both these buckets are driven by improvements we have been able to do under Gemini.

First, we have been able to deploy our largest vessels in most effective routes and on shorter loops. Secondly, the shorter loops have had fewer port calls and more efficient ones. Thirdly, locations outside the shorter main liner loops have been serviced by fit-for-purpose shuttles rather than underutilized mainliners. We can quantify the bunker consumptions improvement to about 8% at fixed bunker into cost benefits of about $135 million for the quarter, which annualized is about $450 million to $550 million based on the full year implementation and normal seasonality. Likewise, we can quantify the asset turn improvement of about 1 percentage point, which against our total network cost translates into about $50 million of cost benefit in the quarter, which annualized is about another $150 million to $200 million benefit. The cost benefits on the Ocean side alone, therefore, sum up to around $600 million to $750 million on an annualized basis.

Another advantage of Gemini has been to increase volumes in some of our gateway terminals, allowing us to significantly increase the throughput. These additional moves have improved port moves per hour and expanded operating terminal capacity. The additional uplift has generated about $40 million in benefits, which annualized is about $120 million to $200 million based on full year implementation and seasonality. Overall, across Ocean and Terminal, therefore, we have generated about $225 million in cost benefits in the third quarter or $720 million to $950 million in annual savings compared to our previously announced targets of about $500 million.

As mentioned earlier, we now expect container volume growth to be around 4% for 2025, given the strong demand that we continue to see outside of North America. There is no change to our assumptions on the Red Sea disruptions, which we still expect will not reopen in the near term, absorbing net supply in the industry as long as it remains closed. Against the backdrop of these factors as well as a strong year-to-date performance, we refine our financial guidance to the full year 2025 to an underlying EBITDA of $9 billion to $9.5 billion from previously $8 billion to $9.5 billion, and an EBIT of $3 billion to $3.5 billion, previously $2 billion to $3.5 billion. And finally, free cash flow of positive $1 billion or higher, previously negative $1 billion or higher. Our CapEx guidance for '24 and '25 combined is revised down to about $10 billion, down from $10 billion to $11 billion, while the guidance for '25 and '26 remains unchanged.

And I will now hand out to Patrick, who will walk you through the detailed financials at segment level for our performance.

Thank you, Vincent, and welcome to everyone on the call. Q3 '25 was a quarter with strong financial performance across the group, significantly up sequentially. Overall, we generated an EBITDA of $2.7 billion and an EBIT of $1.3 billion, implying a margin of 18.9% and 9%, respectively. As expected, the delta to the previous year is driven largely by the shift in rates we have seen in Ocean since the peak levels in mid-'24, which was at the height of the Red Sea disruption, while the progress on the previous quarter is driven by higher volumes and operational improvements across all 3 businesses.

Net profit after tax was $1.1 billion, generating a solid return on invested capital of 9.6%, still at a good level, but decreasing as strong 2024 quarters progressively fall out of the yearly calculation. Solid free cash flow supported a strong balance sheet with cash and deposits standing at $20.9 billion at quarter's end. Our net cash position is down from $5.6 billion last year to $2.6 billion, driven mostly by the strong returns to shareholders, which totaled $4 billion in the first 9 months.

Let's take a closer look at cash flow on Slide 12, where we see that cash flow from operations increased sequentially to $2.6 billion in the third quarter, driven by higher EBITDA of $2.7 billion, while the movements in net working capital was largely flat. Overall, we had a strong cash conversion of 97% up from 89% last year and 81% last quarter. Further, across the chart, gross CapEx for the quarter was $1.2 billion, in line with our multiyear CapEx guidance, driven by our Ocean fleet renewal program.

Meanwhile, capitalized losses -- capitalized leases stood at $868 million, also in line with expectations and down from the previous quarter, which was impacted by the Port Elizabeth concession extension and free cash flow was therefore at $771 million. Capital return via share buyback was $578 million this quarter. And finally, most of the $850 million you see in movements in borrowings relates to our 9-year EUR 500 million green bond issuance in September, extending our maturity profile early in light of extending bonds maturing in March next year. Taking all together, cash generation was strong in the third quarter and supported an already strong balance sheet alongside the continuation of our share buyback.

Turning to our Ocean segment on Slide 13. Ocean delivered a strong operational performance in the third quarter, which marked the first full quarter of Gemini implementation. From a financial standpoint, Ocean generated an EBIT of $567 million, implying a margin of 6.2%. This is down on last year, driven by the expected rate decline, but significantly up sequentially, driven by the strong volume growth of 7% in Gemini. Specifically on Gemini, as Vincent mentioned earlier, the new network generated cost benefits in the form of bunker savings and higher asset turns, without which we would have expected our third quarter Ocean costs and therefore, EBIT to be impacted negatively by about $185 million.

Meanwhile, freight rates were significantly down year-on-year, driven by the ongoing market pressure on rates since 2024, but broadly in line sequentially. CapEx was in line with guidance and comprised mainly installments on vessel orders announced last year as well as a broader equipment renewal and vessel deliveries that are part of our Ocean fleet renewal program.

As usual, the chart on Slide 14 illustrates the main elements of the year-on-year EBITDA development in our Ocean business. On the left, you can see the large impact on profitability from the 31% lower freight rates, cushioned by the tailwind of the 7% increase in volumes year-on-year. Ocean also saw a positive impact of $211 million from lower bunker prices compared to last year, while container handling and network costs increased driven by higher empty repositioning and terminal costs.

Also note that EBITDA was further supported by higher detention and demurrage revenue and a positive delta in revenue recognition, the latter of which accounts for the vast majority of the net $551 million in the final bucket. All in all, these offsetting factors allowed EBITDA in the third quarter to settle at $1.8 billion, down from the previous year, but up on the previous quarter.

Let's now have a look on the Ocean KPIs on Slide 15. Ocean's operational performance in the third quarter is highlighted in these metrics with strong volume performance and Gemini helping to offset headwinds in cost and rates. Loaded volumes increased by 7% year-on-year, reaching 3.4 million FFEs as demand was strong on key trade lanes. Sequentially, volumes grew by 5.2%. As mentioned earlier, our average loaded freight rates declined by 31% year-on-year, reflecting market fundamentals that we have seen since 2024 from growing excess capacity. Nevertheless, as reflected in the flat sequential development, the lower levels in the third quarter at quarter end were actually offset by the high levels at the start of the quarter, therefore, providing a fairly benign rate environment in the quarter.

On the cost side, unit cost at fixed bunker decreased both year-on-year and sequentially by 0.8% and 2.2%, respectively, as strong volume performance, high utilization as well as cost benefits from Gemini offset the general cost pressure. Bunker costs were down 14% year-on-year due to both lower fuel prices by 13% and increased efficiency from Gemini, leading to lower bunker consumption of 3.2%. This is despite us carrying more volumes and managing a larger fleet. Specifically on the fleet, the average operating fleet grew 5.5% year-on-year, reaching 4.6 million TEUs, all while capacity utilisation remained high at 94%.

Let's now turn to our Logistics & Services business on Slide 16. In the third quarter, Logistics & Services delivered revenue of $4 billion, up 2.3% year-on-year and 8.6% sequentially, the latter reflecting seasonal strength. The year-on-year growth was driven by growth across most products.

On the bottom line, EBIT showed a significant increase to $218 million, which also implied a continued EBIT margin improvement of 0.4 percentage points year-on-year and 0.7 percentage points sequentially to 5.5%. The margin improvement is primarily driven by the continued operational progress that the team has made in fulfilled by Maersk, all while continuing to exercise stringent cost control across all service models. CapEx is down on last year, but remains at a stable level sequentially to support growth with particular focus on Depot and Warehousing this quarter.

Now let's have a look at the breakdown by service model within Logistics & Services on Slide 17. Starting with our supply chain management offering. Revenue here decreased by 4.8% year-on-year to $594 million, with the EBITDA margin decreasing to 22.6%, down from 24.2% last year. This decline was driven by weakness in Lead Logistics, our 4PL business, volumes primarily from China to the U.S. on the back of the stop-and-go volatility we have seen in the external environment. In Fulfillment Services, operational progress in Middle Mile North America and Warehousing led to significant improvements in profitability with an EBIT margin of negative 0.9%, up from minus 4.5%. Revenue increased by 2.9%, reaching $1.5 billion. Finally, revenue increased in Transported Services to $1.9 billion, equal to a 4.3% increase year-on-year. This was supported by higher volumes in Landside Transportation in the peak season. However, the EBITDA margin was impacted by weakness in Air, landing lower on the previous quarter at 7.3%.

We round off with our Terminals business on Slide 18. Terminals delivered another excellent quarter, continuing the positive trend. Revenue grew by 22% year-on-year to $1.4 billion, driven by 8.7% higher volumes supported by Gemini and improved rates. Specifically on the Gemini impact, volumes from Maersk Ocean increased 26% year-on-year. The higher volumes brought a further uptick in utilization, which stands at 89%. As mentioned earlier, while this is supportive of higher margins, it also highlights the necessity to invest in capacity extension in the coming years to cater for the long-term growth of our port operations.

Revenue per move increased by 7.8%, reflecting improved rates and mix. Meanwhile, cost per move increased by 6.7%, largely due to labor inflation and higher SG&A costs, but mitigated by higher utilization. Overall, EBIT increased by 69% year-on-year to $571 million with a margin of 39.4%, up 11 percentage points from last year and 4.1% higher sequentially. This underlying good margin was supported by a net $139 million positive impact from one-offs, including the reversal of impairments due to the successful extension of a concession. ROIC rose to a record 17.2%, underlining the intrinsic strong return profile of this business, although levels will taper down progressively with increased renewals and investments. CapEx for the quarter came in at $154 million, more or less in line with previous year and reflect the continued investment in our gateways portfolio.

Turning to the breakdown of Terminals EBITDA on Slide 19. Terminals delivered an increased EBITDA from $424 million last year to $501 million. The increase in cost per move of $56 million was more than offset by higher revenue per move and volume impact. Currency exits and other movements brought a further positive impact of $29 million, bringing the EBITDA to a record level for the quarter.

And with that, we finished the review of our business segments and are ready for the Q&A. Operator, please go ahead.

[Operator Instructions] Our first question comes from Patrick Creuset from Goldman Sachs.

Just 2 questions. First on the outlook. If we look at your Q4 EBITDA, you're implicitly guiding based on the full year range of somewhere between $1.3 billion and $1.8 billion. Can you provide a little bit of color on what sort of volume and rate assumptions are embedded or would be embedded at the top and the bottom? And also based on what you see so far going to Q4, do you see a skew more likely at the top or low end?

And then just on the buyback, you've got a cash position of around $15 billion or so. In the past, you've sometimes given the market a sense on how comfortable you felt on buybacks in the year ahead. Can you again give us a bit of sense today, assuming, for instance, stable trading environment at these levels, would you see a reason to discontinue the buyback next year or keep it?

Thanks very much, Patrick. So indeed, when you look at the guidance for Q4, it implies a continuity of the pace that we have currently. We have seen rates stabilize by September and early October. And that is, I would say, the pace that we have continued to forecast for the Q4. And the volume development actually seems still to be pretty strong as we can see it. So I would rather mentally see, let's say, the revision of the guidance towards indicating the higher end of the guidance, which is what we are doing by narrowing the range, and that's what we intend to signify here, which at group level is more or less a breakeven. It will depend on the last few weeks for the Q4.

When you look at the cash position and balance sheet, it is strong. And as we have indicated as well when we restarted the share buyback back in February this year, the intent is to certainly see this as another 1-year event. And in your assumption of a stability of externalities, I think there's nothing that speaks against the continuation of the share buyback indeed.

Our next question comes from Muneeba Kayani, Bank of America.

Firstly, just on the logistics EBIT improving at the margin to 5.5%, can you remind us what seasonality in this business? And if there was any benefit on that and kind of how much of this is kind of the improvement which can continue?

And then secondly, we've seen in container shipping, the order book-to-fleet ratio for the industry is around 32% now, which I believe is the highest since the global financial crisis. So what do you think is driving that? And how do you see it playing out?

Muneeba, so if I start with your first question on Logistics, I think most of the improvement that we're seeing are due to the cost containment and productivity improvement that we are putting in place. In general, the business will have a seasonality a bit tilted towards the second half year versus the first half year. But -- and mostly, I would say, towards the very end of the year, depending on your product exposure. But I think when we look at it, and you can see that in the volumes and the top line, we see some seasonal improvements that are helping. We also see some of the wins that we have taken in that are helping, but I think most of it is actually coming from the work that we're doing on margin.

From the order book, I think you're correct that at 32%, the order book is quite high. I want you to -- I just need you to remember 2 things. I think the first one is that the time to order, so the number of years over which this is going to phase in is more than it was during the -- before the financial crisis. So if you -- we're going to -- there's a longer installment, if you will, that is being ordered. So that's one thing.

And the second thing is the story that we had about China. The market is growing at about 4%. But on the head haul, it's growing at about 7% and what we're seeing is as long as it grows at 7% on the head haul, you need 7% more capacity to be able to carry this. So I think there is -- this dichotomy that there is between head haul growth and average growth is absorbing a lot more capacity. The longer order books is -- it means that it's not phasing as brutally as one would expect.

And then the last point that there is, is not a single ship has been scrapped for the last 6 years, but the ships all got 6 years older in that period. So there is pent-up demand for that. And so I think over time, we will see that some of the levers that so far have come at us, whether it was higher demand from China or selling around the Cape of Good Hope or COVID, this will fade away, and we'll be back to having to use the tools that we normally use in the industry, which is scrapping, idling, slow steaming and so on. And there, there are still significant levers that we can lift to actually balance the outlook.

The next question comes from Ulrik Bak, Danske Bank.

So on the volume side, Ocean volumes, you obviously have very strong growth, 7% in the quarter. I'm just curious to hear what if there is a split between the feeder legs and the main haul legs? And if there is any issue with double counting, anything because it just looks so extraordinary, your volume growth.

And then if I can sneak in a second one. So this overperformance versus the market, how long do you expect this to be sustained?

All right. So I can guarantee you that there is no double counting of volume like we count the containers and the bills of ladings only once. It's much better. You would see it in the revenue development very different if we were double counting. So I think that we're pretty -- we can be quite categorical around.

I think when I look at what we're able to do right now as a result of Gemini from a cost perspective, I think it's a pretty significant lever that we have unlocked here. And this has, I think, legs to continue into the coming quarters. I cannot give you how many quarters this advantage will last. I think it's going to last quite a while, but it depends also on what we do next and what competition does next. And I'm not in control of all of that. But I think that what we have shown on the slide with Gemini is there are a few levers where we have broken some efficiency frontier that we had under the previous deployment and that we have moved them now to being higher. And this is what allows us to actually lift the cost impact of Gemini quite significantly.

The next question comes from Omar Nokta, Jefferies.

Just wanted to follow up on the share buyback discussion. You mentioned last quarter, you continue to view that as a focal point of the capital allocation strategy. It sounds like that's going to continue for '26 as well. But just in terms of how you're thinking about the size, $2 billion this year, how can we think about how that looks for '26 as you set the budget? Does it become a portion or a function of how much free cash flow was generated this year? Or what's it based on? Is it based off of earnings next year? Any color you can give would be helpful.

Yes. Thanks very much for your question, Omar. No, as we said, clearly, share buyback is a fundamental piece of our capital allocation and will continue to be as well for next year.

I think when you look at the dimensioning, you know that we actually maxed out this year, right, just from the free float and the rules on the daily volumes. So I would expect this to be, say, a maximum amount. But then the exact dimensioning will be done, obviously, in February and when we come out with our guidance for full year. I think it will be premature now to guide. But I think certainly, the willingness to continue a sizable share buyback is certainly there.

Our next question comes from Cedar Ekblom from Morgan Stanley.

I have a question on the Gemini cost savings. I'm looking at that slide that you put together, and it looks like the bulk of the benefits come on the bunker side of things, which I think makes sense. What I am surprised about is why the asset turn benefit is not higher? Maybe you could just talk through like what I'm missing there. Maybe I've just thought that the asset turn would be better. You could optimize the network more, long voyage, big vessels, feeder vessels, et cetera. I'm just trying to understand that split that the bunker number and the asset turn number are not sort of closer to each other?

Yes. Thank you, Cedar. I think let me try to explain that I think the asset turn, it depends also on what is your base. We had an extremely high utilization last year. So we've been able to lift this with 0.5%. We're continuing to look at whether we can actually increase that number in the coming quarter. The bunker, we can very much control because that -- as soon as you're into the deployment, since we measure it against the capacity, we get the full saving calculated there. And we've tried to disaggregate that because we could have just done this in terms of total unit cost per container, and I would have mixed the bunker and the efficiency on the fleet or on the utilization.

So I think the bunker, we see 100% of the saving right away. As long as we deliver on the reliability, this will be pretty steady. I think on the asset turns, this is where I think we have some opportunity to continue to fine-tune and improve the network. So this one, I would look at as still having a bit of leg that we need to exploit in the coming quarters.

Okay. And then, yes, just a follow-up there. So obviously, container handling unit cost at a fixed banker hasn't really come down year-over-year. It obviously has come down sequentially, which is helpful. Could you give any sort of guide around how to think about that sort of container handling cost on a unit basis or maybe network costs on a unit basis? Like are we talking about a 5% decline from here unit-wise? Or I don't know if you could help us quantify how to think about that run rate into '26?

Yes. So the issue with container handling is the fact that, as I mentioned, with an average market growth at 4% and a head haul growth at 7%, trades become more imbalanced. And then under container handling, the amount of empty containers we're moving around increases because there is just more containers going one way and fewer containers going the other way. And that means more empty repositioning.

And that's what I mentioned in the slide for China. I think as we see this imbalance continue to grow, it's important that we understand that we're going to need more and more capacity to cater for growth because it's more and more asymmetrical because between the head haul and the backhaul, but it will also increase our cost per FFE above that because of the increasing balance and more empty containers being moved around.

Our next question comes from Kristian Godiksen, SEB.

Yes. Also a couple of questions on the Gemini part. So just a house of question to start out with the improvement in Terminals, is that in the -- is that for the hubs and hence, included in the Ocean part of the business? Or is that for the Terminals business?

And then if you could maybe comment a bit on the unit cost advantage you see compared to the peers that are not using the hub and spoke model? And then maybe just finally sneak in a question on whether you've had any preliminary discussions with the clients on a potential price premium for your higher schedule reliability?

Yes. Thank you, Kristian. So I think the -- what is important with Gemini from the gateway perspective is the fact that before when we were in 2M, we were paired with probably the other line that has the most comprehensive terminal portfolio. And it means that in a lot of locations, we have to split volumes between the different parties. Here, we are with a partner that has less -- much less of a terminal portfolio. And it means that net, we're getting more locations where 100% of the throughput is not split between 2 different facilities, but it's all going to our facilities. So for the gateways, this is very, very positive because they get the full 100% of the support from Gemini. And that is something that is an uplift for this, and it will last for as long as Gemini lasts. So it's quite positive.

On the unit cost, I think we're going to need 1 or 2 quarters more of data from also the competition to know because we can see how much we have saved sequentially and how much we have saved year-on-year. Obviously, the world doesn't stand completely still. They will also do certain things. What we can see with the numbers that have been released so far is that we're making more progress on unit cost than what they're making, and we attribute this to Gemini, which is the big thing that we did to lower our unit costs. So we're quite positive on the fact that we are opening up a gap now with Gemini that is going to be -- that is going quite handy, especially in the current rate environment, and we will continue to work at making it as big as possible.

Then finally, on customer discussion, I want to say that the customers' reaction is really very, very positive. Obviously, for the premium, this is a conversation that we have started, but it's a bit too early to talk because we need to be certain also that we have a long enough track record that it unlocks value for them that we -- where we can then capture some of that value for us. So for instance, concretely, today, every customer has a buffer stock and that reliability needs to unlock a reduction of that buffer stock. They need to trust that this has weathered sufficient ups and downs and be steady that they can take out some of that buffer stock. And if they do, they pocket that saving and then we can capture some of it in form of a premium.

I think that process is starting. It's a long-haul process to take place, but certainly something that where we see some potential at least to capture some value, but we need to -- it's just a few months. It's the first quarter we're going with it today, where we have the full Gemini. Some of them have been in transition with -- not everything is yet fully in a place where value has been unlocked yet, but we're very positive with the discussion so far.

Our next question comes from Jacob Lacks, Wolfe Research.

So you've discussed in the past maybe a bit of a shift in how quickly contracts get repriced when the market is tightening up. Have you seen customers actively work to reprice contracts again with rates moving lower now? And to that end, do you think the current rate environment will largely be reflected in Q4? Or could there be some incremental pressure in '26 when new contracts are signed?

So we've not -- thank you, Jacob. We've not seen any big movements on contract being open now, which since the contracts have been trending down during Q3, and it was not very timely for people to do it until they -- when they know they have the negotiation coming soon and as long as things are moving their way. So I think that from that perspective, that's one of the things that also holds the contract good. So those have not moved. You will have noticed that over the past few weeks, the rates have actually come up again a little bit. It's too early to call anything on the contracting season. I think we'll have certainly a discussion around this in February when we come with the full year guidance for 2026, and we have some of the early negotiations under wrap.

But I think for now, what we have seen in terms of behavior from customers is that whatever the price did during Q3 did not lead to customers actually reopening contracts or wanting to have commercial discussions on price. And contract adherence has been quite strong as well. So it's not like the volumes just disappeared. I mean they were living up to their commitment.

The next question comes from James Hollins, BNP Paribas.

Obviously, you discussed buybacks a lot pretty important to the market. I was just wondering, I mean, clearly, another way you might not do buybacks is aggressively pursuing M&A. I was wondering how you're looking at M&A if we are indeed looking quite extensively and globally at potential deals?

And secondly, a bit of a sort of generic question, but as I look at consensus for 2026 Ocean, Bloomberg consensus has a loss of $2.8 billion. I mean that would be a business scenario like 2009, you'll come to deposit [ $1.7 billion ], apart from showing how on that forecasting. Maybe just get sort of your view on how you would see, I guess, particularly that Bloomberg consensus against the reality of what you might see in this industry based on someone that's been in it a long time, your work on cost, your work on the alliance and basically whether that's way too pessimistic.

James, I think let me start with the 2026 and give you the standard answer that I look really forward to talking about it in February. But before that, I think we'll have to pause on giving any type of views.

With respect to the M&A I think what we need to remember is that all 3 segments that we operate in are actually over time, segments with -- that are quite competitive and very low margin. So when I hear something like aggressive pursuit of M&A, I hear a premiums that will be difficult to justify through synergies afterwards and a lot of risk to destroy shareholder value. So whereas we've said it and we continue to say that M&A will be a part of the continued repositioning of Maersk. And whenever we see opportunities, we have both the wherewithal and the interest to pursue them, but maybe an aggressive thing right now, given some of the outlook is not necessarily something we will pursue.

Our next question comes from Parash Jain, HSBC.

I mean just first with respect to Red Sea, I know nobody has a crystal ball, but given the recent developments, is it first half of next year looks more likely than ever before? And my second question is, we heard a lot about front-loading by the U.S. retailers, in particular, now that we are well into the peak season, are there any signs of front-loading, which has been reflected into the fourth quarter's volume run rate?

Yes. So for the Red Sea, let me start by saying that, obviously, the ceasefire in Gaza is a significant -- first, it's a great thing for people in Gaza and for the world in general. But it is also a significant step towards being able to reopen the Suez Canal since the -- the situation in Bab al-Mandab and in Gaza have been linked since the beginning.

I think the way we think about this is that we need now to make sure that this moves into a process where it becomes clear that the ceasefire is entrenched and doesn't risk going backward at some point and then we fall back into a new phase of a conflict. And that's the situation we're monitoring quite closely. And we're also figuring out what is the posture of the Houthis specifically to see if we can start to have a safe passage.

So I would whether it's more likely now to be early at some point or whatever, I think if the ceasefire holds, then I think we've crossed a gate and made a big step towards returning through the Red Sea. But I think we need to see that get entrenched, and we need to see the process move ahead. And once that happens, then we'll have a better view of what that means for a return to the Red Sea.

Then in respect of front-loading, I think there was a lot of discussion on front loading, especially end of '24, beginning of '25 before the tariffs in April. We certainly saw following the implementation of tariff that things softened in North America. And we certainly still have seen this still into the third quarter and even, I would say, during the month of October, I will say that what we're seeing now is there is somewhat of a push also into the U.S. for some of the seasonal goods to get there. So I think from a demand perspective, very resilient demand across all geographies and the U.S. that is picking up a bit of pace following this month between April and October that have been a bit more soft.

Our next question comes from Alexia Dogani, JPMorgan.

Just firstly, could you explain a little bit the unit revenue development because we're struggling to reconcile with the trade lane numbers you report on the group level. If you can just explain how it normally developed as per the 6-week lag, the spot versus the contract, has it performed versus expectations, whether it's underperformed or overperformed because, yes, struggling to reconcile a little bit the outcome.

And secondly, on the unit cost, again on Ocean, I mean, clearly, you talked positively about the Gemini contributions. But overall, your unit cost at constant bunker is only down 1% despite you growing 7% capacity and 5.5% volumes -- sorry, the other way, 5.5% capacity, 7% volume. So when we look at into next year, what further cost savings can you deliver if there is less volume growth because I imagine the capacity benefits annualized.

And then finally, obviously, the IMO has now delayed its kind of net zero initiatives. How should we think about the implications for industry capacity discipline? And I guess, more importantly, for yourselves that have invested in green CapEx, which comes at a higher cost. And so it kind of takes you in a relative disadvantage?

Yes. There's quite a few questions. So let me try to cover that to the best possible. I think, first of all, when you look at the cost, there is one element that we're missing. And it is that the net position that we have on our different VSAs, whether it's a plus or a minus is reported under other revenue. And the fact is that our position in 2M was balanced and our position in Gemini is that of a net seller of capacity. And that means that out of the 11% that you see in growth in the network cost, half of that is due to that net position. And once you take that out, then the growth of our network cost is actually 5.5% for 7% volume increase.

So I think that's just important to position this. We see the unit cost being decreased. The biggest efficiency is because we've chose to slow steam and be reliable is going to be seen on bunker. So that was always -- it doesn't matter so much which line item it shows, but we've made choices. We could have gone a bit faster and save a few ships and also generate some cost savings that you would have seen more on the network cost. We've chosen to really focus on bunker.

So I think for the unit cost, there is this -- when we look forward, I think we have 3 levers for cost savings, for further cost savings. One is the expansion of Gemini. Two is actually some of our other costs here under organizational cost that we're looking into. And then finally, I think as the rates soften, we will see also a softening in the time charter market, and that will generate further savings in the unit cost that we have by basically being able to lease ships at a cheaper price. So those are, I think, the 3 key things. I will say that we anticipate -- you mentioned like less volume growth. We don't expect necessarily less volume growth, but we'll talk about this in February. But I think that's not an assumption we should have. So that's both for the unit cost and the growth.

The IMO, I would say, from a CapEx perspective, it's -- what happened at the IMO is a nonevent. Seen from that, that today, every single ship that is on order more or less is a -- has a dual fuel engine. It's either dual fuel LNG bunker or it's dual fuel methanol bunker. And I think everybody understands that it makes sense when you take a bet on the next 30 years by ordering a ship that you cannot just base yourself on what the IMO is doing now, but you need to understand what optionality you have for the next 30 years. And I don't expect that people will start to order only bunker ships because they will think that for the next 30 years, this is not -- green transition is not going to be an issue at all.

So I think from that perspective, I don't think operationally, IMO is a problem. I don't think CapEx-wise, IMO is a problem. It's a problem to execute the energy transition because definitely, it's a loss of momentum. But from an operational perspective, we are not at disadvantage, and I don't think it's going to change order behaviors or supply and demand.

And let me come back on your rate on your first part of your question. So what you have to consider is that we have increased the share of short-term rates in our mix, as you can see as well in our disclosure to 53% compared to 47% long term in the quarter, and which was positive during Q2, Q3. As short-term rates decreased during Q3, you see that our full year estimate for '25 sees an increase of the long term. So we are pushing the contract fulfillment and the long-term rates, which are more resilient to the erosion of the rates in the short term. So you have a progressive change of mix constantly to optimize the revenue there.

Another factor when you try to reconcile is also the very different geographical evolution of the rates. So the North -- the East-West rates are the ones which we always follow very publicly and those ones came down. However, you do have much more resilient rates development in North-South and then the interregional rates as well. So that's a bit of a mix that you see always in our total figure. I hope that helps.

Our next question comes from Marco Limite, Barclays.

So my first question is on demand because you are talking about a fairly strong demand, while some of your competitors in other subsectors are talking about soft demand. You have also mentioned that you expect U.S. demand being sort of strong over the next 6 months. And then also, you have mentioned that China outbound has grown 7% and expect a similar rate going forward. Do you -- what kind of visibility have you got on basically these assumptions? And especially the fact that China has been very strong this year is not that a risk for growth next year on a very high comps, is the first question?

And the second on capital allocation. We have been discussing about potential for M&A and share buyback and so on. But when we think about terminal expansion, I mean, this week, you announced a $2 billion investment in the terminals. But first question is that on your balance sheet or off balance sheet as you have got a minority stake. But more in general, is it a problem for you to have, let's say, the terminal business in the overall Maersk umbrella, where, of course, you cannot take a lot of leverage, but terminal business needs big CapEx investments and also a larger balance sheet buffer?

Yes. So on -- let me start with the demand. First of all, the strength of the demand, if I look at year-to-date, both last year and year-to-date, I mean, this is -- I hope this is undisputed by anybody, at least when it comes to container traffic because you can verify it in the CTS statistics, [ GOC ] statistics and any other widely available port statistics that you can find.

So is the fact that China makes up a large part of this and that this shows no signs of abating. So personally, I don't see any reasonable argument or data source that would go against the fact that demand has been above 5% last year and will be around 4% this year, which is actually quite significant. The demand from China and the growth from China, at least so far shows no sign of abating. And unless at some point, somebody can point to a reason for why this would abate, then I think it's a reasonable assumption to say that if there is no reason for it to slow down or stop, then why would it?

And then you can discuss whether given -- as you mentioned, given the comps, whether it's going to continue to be 11% or that the base becomes so big that it becomes 10% or 9%. But the fact is that it's still quite significant. And at least so far, as we show in the graph, the last 2 years has been accelerating, not decelerating.

So I think from a demand perspective, we feel quite confident that demand growth is very strong. There's a lot of cargo out there to move, and that has a lot to do with China. And I think that there is ample data to back that up. You want to?

Yes. On your question on the capital allocation and terminals. I think -- so first of all, on the capital allocation, I think our first priority is organic growth, and we have always said that we would dedicate the sufficient funds to grow in Logistics, grow in Terminals and renew our fleet for Ocean. That is part of our guidance of the $10 billion to $11 billion CapEx over 2 years. So that's factored in.

I think what you have to see is actually Terminals is a brilliant business that complements Ocean. We capture a lot of the value as we actually just showed on Gemini of the value of the Ocean leg into the port, right? And the margins there are actually higher than in Ocean. So it is good to have.

It comes with, I would say, a high CapEx profile when you have new terminals, but a lot of the CapEx is actually expansion of existing, right? Of existing capacity where you can grow. And then you have a few new ones which are planned. We just announced the -- we just opened one recently and there are others in the pipeline, which, again, are absolutely included in our guidance and do make absolute good sense. Overall, I would say it is still an asset-lighter business than Ocean is. So it's absolutely fine with our balance sheet, and we have the balance sheet structure and financing to fund that development as well.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Thank you again for joining us today. And to summarize the discussions, we have demonstrated strong execution in this quarter in which uncertainties did persist in the external environment, but where we carried to deliver strong results across the whole business portfolio. We've made good progress across the portfolio and continue to see supportive demand, and this has allowed us to narrow the full year guidance.

We look forward to seeing many of you on our upcoming roadshows and investor conference. Thank you for your attention again, and see you soon. Bye-bye.