Nordic Transport Group Stock

Good day, and thank you for standing by. Welcome to the NTG Nordic Transport Group First Half 2026 Conference Call and Webcast.

[Operator Instructions]

I will hand the floor to the to CEO of NTG Nordic Transport Group, Mathias Jensen-Vinstrup. Please go ahead.

Thank you, and welcome, everybody, to our conference call for the first half of 2026. And thank you for dialing in. My name is Mathias Jensen-Vinstrup, and I'm the Group CEO of NTG. I have Tinneke Torpe, our Group CFO, with me today.

As always, we'll spend the next 15 to 20 minutes taking you through our highlights and results for the second quarter of 2026 and finish off answering questions from the participants on this call.

And if we move on to the next page, we kindly ask you to read the forward-looking statements provided on the page. And on Page #3, you see the agenda for this conference call, which includes the highlights for the second quarter, a review of the financial performance of the group as well as each of our 2 divisions, the financial highlights and ratios, the outlook for the year, and finally, we open up for Q&A.

Moving on to the highlights for the second quarter of the year for the group. We are generally pleased with the performance that we delivered. Gross profit increased by 8%, while adjusted EBIT increased by 23% compared to the same period last year. The performance was driven by strong organic growth across the business, supported by higher freight rates and continued market share gains, as well as the inclusion of the final month of the DTK acquisition as we illustrate on the slide.

We continue to operate in an uncertain markets with big regional differences. But on a headline basis, market conditions improved during the second quarter. Germany, however, remained muted activity-wise, whereas most other markets, in particular, in the Nordic region developed quite positively. At the same time, freight rates were impacted by higher fuel prices and capacity constraints, which led to higher rates and thus revenue across both divisions.

Within the Road & Logistics division, an important milestone was reached during the second quarter with the completion of the TMS rollout in the Southern region of Germany. And while the implementation continued to affect operations and also working capital during the quarter, we are encouraged by the progress made, and we remain confident in the long-term benefits of the direction that we have set out, especially in light of the valuable experience that we gained during the first 6 months of the year and also the organizational strengthening that we have made in preparation for the continued migration of our groupage activities.

Within Air & Ocean, the restructuring and reorganization program progressed ahead of plan. And numerous initiatives have now been executed across the division, and we are gradually seeing these efforts translate into a lower cost base and improved profitability. Based on the performance in the first 6 months of the year as well as our current view on the market, we have narrowed our full year guidance range for adjusted EBIT to between DKK 625 million and DKK 650 million. [indiscernible] raising the floor by DKK 25 million.

On the next page, we summarize the financial highlights of the group. And in the second quarter, we realized double-digit growth organically and including M&A of 14.8% and 16.6%, respectively. This was mainly driven by, as I mentioned before, higher freight rates across both divisions, while solid volume growth and continued market share gains, particularly in the Road & Logistics division, also had a notable impact in the first part of the second quarter, in particular.

On the gross margin side, which decreased to 21.5%, the development reflected changes in our business mix, as well as the impact of the higher freight rates in the Air & Ocean division. And as we have communicated previously, increasing rates create revenue growth but typically dilute gross margins.

The conversion ratio increased across both divisions, supported by operational improvements and cost-out initiatives, which drove the operating margin up to 5.4% during the second quarter. Special items amounted to DKK 12 million in the second quarter and DKK 24 million for the first half of the year, primarily related to the restructuring initiatives that we are currently implementing within the Air & Ocean division.

If we turn to the Road & Logistics division on the next page, the division delivered yet another strong quarter and continued the positive momentum that we have seen over quite a few quarters by now. Growth in adjusted EBIT on an organic basis was 18%, supported by the higher freight rates, volume growth and generally a strong performance across the majority of our entities.

In particular, we did experience a very strong performance across the Nordic region, where several of our larger entities delivered strong and significantly improving performance and continue to take market shares. As quickly mentioned before, Germany continued to be challenging. Activity levels were muted and the rollout of the groupage TMS also affected operation and the results in the second quarter of the year.

But as I mentioned, we remain optimistic about the long-term prospects of the migration plan, not only in Germany, but across our footprint. So while there's still much work ahead of us, we continue to be confident in the long-term viability of the initiatives that we have set out across the division.

If we move on to the Air & Ocean division on the next page, market conditions improved during the second quarter with higher volumes on the container on the ocean freight side, improving air freight demand and increasing freight rates across several of the key trade lanes. Operationally, our main focus was on the reorganization and the strengthening of the division and we continue to accelerate this trajectory as we introduced earlier this year, which included rightsizing initiatives as well as multiple new hires and team strengthening globally.

Carsten, who joined us on the 1st of April, has now been with us for 4 months, and he has already had a significant impact on the pace of execution, which is also starting in the very early days to show in the numbers during the second quarter. During the quarter, we also opened a new branch in Charlotte, North Carolina, which we expect to be the first of many, not only in the U.S. but across our footprint, both as it looks today and also how we expect to see it in the years to come.

And we also benefited from an even stronger intercompany collaboration and trade lane development, which is completely in line with the ambitions that we laid out in our Route '27 strategy.

Our focus remains very clear. We are building a stronger and more profitable Air & Ocean platform through a combination of leadership changes, cost-out initiatives and commercial improvements and we are accelerating the investments in organic growth also as we move into the second part of the year.

As I said, we started to see the first signs of effects on our numbers, as illustrated in the adjusted EBIT growth of 12.5%, which was mainly driven by the lower cost base.

And with those words, I will now hand it over to Tinneke to take you through the detailed financial highlights.

Thank you, Mathias. So moving to the next slide, then I will start with the special items. As Mathias already mentioned, special items amounted to DKK 12 million in the second quarter and DKK 24 million for the first 6 months of 2026. This related to the restructuring program in Air & Ocean, which has progressed ahead of plan. And as we will continue this normalization program, our expectation is also that special items for that region will increase to a level of DKK 30 million to DKK 35 million for the full year of '26 versus the DKK 20 million to DKK 25 million we originally guided.

Moving on to the financial -- net financial expenses, they amounted in the second quarter to DKK 31 million compared to DKK 57 million in Q2 last year. When we look at that comparative year '25, this was mainly impacted by the elevated foreign exchange effects we saw from the U.S. dollar in the second quarter of '25 as well as higher interest expenses.

During the quarter -- the second quarter of '26, net financial expenses returned to a level that we consider closer to what is a normal quarter for NTG. Finally, I will address the tax in the P&L. Our effective tax rate amounted to 31.6% in second quarter compared to 46.2% in the same period last year, we continue to be impacted by unrecognized tax losses in Germany. And although the impact was lower in '26 than it was in second quarter last year, we still see an effect. We are pleased with the development that the tax rate remains elevated, and there is room for improvement compared to our long-term expectations. So this is a focus area for our group.

Finally, looking at our cash flow, then our adjusted free cash flow amounted to DKK 225 million for the second quarter. It was slightly below same quarter last year, which was primarily due to contributions from our net working capital. The higher EBITDA that we delivered in the second quarter was partly offset by a lower working capital inflow. But overall, we are very satisfied with the cash generation that the group generated in the second quarter.

I appreciate if you turn to the next slide, where we now will be focusing on the balance sheet and the key financial ratios. Returning back to the cash flow and the impact on the net working capital, then the development in our net working capital during second quarter was primarily a reflection of a normal seasonality of our business, but also an element of timing. Some of you might remember -- then we made in the first quarter of '26 an unusual early payment to a number of our holders ahead of Easter. And this move of payments from April into March had a negative effect on working capital in the first quarter, while the reverse impact being reflected in our second quarter. And this supported that we saw, yes, a positive cash inflow in -- from our net working capital.

This was partially counter affected by our implementation of the TMS in Germany, which has caused some delays in our invoicing and therefore, had an unfavorable temporary impact on our net working capital. As we are coming close to finalization of the rollout in the southern region of Germany, we do expect that this unfavorable impact will gradually reduce over the coming months and will normalize most likely during Q3.

If we then move on to our leverage and our -- yes, net debt, then our leverage ratio improved in the second quarter and reached a level of 2.25x EBITDA compared to 3.04 in the same period last year. This improvement was primarily driven by our rolling 12 month increase in EBITDA, but also offset partially by the ongoing share buyback program that has progressed during the quarter as well.

And speaking of this program, then it is running in accordance with plan. During our -- the first 6 months of '26, we had a -- we acquired treasury shares for DKK 75 million. And the program will be running until November, reaching a total amount of the treasury shares bought back of DKK 200 million. Finally, if we look at the return on our invested capital, then our ROIC before tax reached 16.3% in second quarter compared to 16.5% last year. So basically on par year-on-year. The development that we've seen reflects that we have a higher average invested capital following the recent acquisitions but also offset by an equivalent increase in our EBIT.

And that brings me to our outlook for full year '26. As Mathias has already mentioned, then based on the performance of the first 6 months of the year, we have lifted or narrowed the guidance that we provide to a full year adjusted EBIT in the range between DKK 625 million and DKK 650 million, which is also an indication that we had -- and we believe in a strong performance -- yes, for the rest of the year our assumptions behind our updated guidance are broadly unchanged. We continue to expect positive developments during the remainder of the year from both divisions. But we also foresee that we will be operating in a market characterized by elevated macroeconomic and geopolitical uncertainty.

The higher freight rates that have supported our performance during the first half of the year are expected to moderate from the current levels during the second half of the year. We do expect to continue to see transport volumes slightly increase. But we also expect that the freight rates will gradually normalize as diesel prices resulting in available capacity returns to the market.

At the same time, we are very focused on managing our cost base. And we -- yes, this is the background for why we have narrowed down the guidance. As I already mentioned, special items are in our recent guidance updated to end in the range between DKK 30 million and DKK 35 million.

This reflects our accelerated pace of initiatives within the Air & Ocean and our ambition is to continue investing and strengthening both Air & Ocean performance and also the long-term profitability.

Thank you, Tinneke. So to summarize and as we've both alluded to, we are quite pleased with the development during the first half of the year and the second quarter of the year and we are increasingly excited for what comes next.

With that, I'll hand the word back to the moderator to open the mic to questions from the audience.

[Operator Instructions]

And now we're going to take the first question. The question comes from the line of Emilie Fung from Barclays.

I have 2, if that's all right. The first one I have is, as you mentioned in your outlook, you expect freight rates to normalize from 1H levels, how should we think about then the gross margin development year-on-year into the second half for both the Road and the Air & Sea division?

And secondly, -- so how much of that Road 13.8% organic growth in 2Q came from share gains? And should we expect these recent customer wins to also contribute more meaningfully in 3Q?

So on the expectations to the gross margin in light of a potential normalization of the freight rate environment, we do not see any reason to expect anything else than what we usually see in terms of the higher level of pass-through revenue that we see when the freight rates go up. So should the rates come meaningfully down, we would expect to see a positive impact on the gross margins.

Now I would say this effect is mainly clean on the Air & Ocean side, whereas on the Road side during the second quarter of the year, it was kind of a mixed bag of effects being one, a rather elevated spot market environment to a rather significant impact of the situation in the Middle East and the implied impact on the fuel prices, which also impacts both our revenue, gross margin and gross profit.

And then as we mentioned, volume growth. Now coming back to the volume growth questions, I would say that the composition of volume vis-a-vis price did change over the course of the second quarter, whereas the first part of the quarter was mainly characterized by both volume and price drivers with volumes in the beginning, outweighing the price effect, whereas that ratio changed towards the second of the quarters, I would say with somewhat of a balanced impact but with rates coming out as the biggest driver by some but not a huge margin.

And the question comes from the line of Ulrik Bak from Danske Bank.

The first one will be on the rollout of the TMS system in Road. So, could you perhaps provide some more details when will it be fully rolled out? And also, you mentioned that it weighed on results in H1 by what magnitude and what that negative impact might be in H2? And trying to grasp, so what is the upside once this is fully rolled out, would be great if you could comment.

I mean -- thank you, Ulrik. We mentioned we did complete the migration in the southern part of Germany in the Baden-Württemberg area. And the next up is the western part of Germany, where we aim to be in a fully up and running state in the early days of 2027. As to the road map from that particular point forward, we are currently looking into which part of the Road & Logistics division to deploy the system next. We are fully committed to the system on the groupage side, but we do see a potential to investigate a potential broader application. So we will get back to this when we convene in a broader group at the Capital Markets Day in November.

As to the financial impact, we should definitely expect to see a gradual improvement as we move further into the year. However, caveating that there is a rather pronounced seasonality pattern on the groupage side, in particular, in Germany with the summer holiday period kicking in as we speak and also a very low activity level towards the very late part of 2026. But sort of on a like-for-like on a cyclicality or seasonality perspective basis, we do expect to see improvements from this point forward.

There's also a few effects as to how we adjust for the fuel key that comes with a delayed effect in Germany and that will also provide some support for performance in the second quarter, so -- I'm sorry, in the second half of the year. So all in all, we expect to see an improvement, but it will be a gradual improvement as we move further into Q3 and Q4.

All right. Perhaps just a follow-up. So if you decide to roll this TMS system out more broadly, could we see some more negative impact beyond 2026 on the operations?

We expect the adverse implications or the temporary adverse implications of migrating to the new TMS to reduce every time we move to a new location based on not only the experience and the lessons that we gain, but also because we have invested quite heavily in the organization that is taking care of the migration plan, both from a business perspective and also from an IT perspective.

So the lessons that we learned in the southern part of Germany, and we must admit it took longer than expected, but we are quite comfortable with us being able to avoid many of the pitfalls that we fell into during this part of the migration. And that gives us a rather high degree of comfort in these temporary adverse financial impacts, reducing case-by-case or rollout by rollout.

Okay. Then a question about the restructuring in Air & Ocean. As we all know, you have attempted to restructure the Air & Ocean division, at least once before without too much success. Of course, now you have Carsten Trolle on board and has great -- have done it before. So what are you doing differently this time around in this restructuring phase compared to previously that makes you certain that this time will succeed?

The scope of the reorganization and strengthening of the organization is significantly different from anything we have ever done in the past. And if you look at the number of employees in the division, we have previously and as part of the DKK 20 million to DKK 25 million range on special items, expected somewhat in the range of at 10%. And based on the progress that Carsten and his team made since he commenced his endeavor at NTG on the 1st of April, we do expect to see a bigger scope for these reorganization initiatives. And then we have been fairly successful, and we have seen a good momentum on also not only rightsizing and initiating cost-out measures but also investing in organic growth, in particular in the U.S., but also in Denmark, where we made the announcement of a new person joining us.

So we do expect the magnitude of cost savings to be significantly higher than in the past. So it is this duality of taking cost out of the equation while simultaneously strengthening the platform that we have and investing in expanding the platform together with a very seasoned team of individuals that makes us very comfortable and optimistic about the long-term implications also from a financial side of this journey that we are on.

All right. And then my final question here. On your guidance, you assume that freight rates will gradually decrease from the Q2 levels. Just for Road, can you perhaps just clarify where are spot rates currently and quarter-to-date compared to the Q2 average? Yes.

That's a good question. The spot rates differ market by market. We have seen a sort of moderation of the spot rates, in particular towards the end of the second quarter. And we are seeing a, I would say, in particular, in the Nordic region, a rather stable situation on the capacity side. But as we've mentioned before and as Tinneke also alluded to, we do expect to see a further moderation and normalization of the rates as we move further into the quarter.

But again, rates are composed of different components, right? So there is the capacity side of the equation and related rate impact, but also the fuel impact. So really, it really comes down to an expectation of what will be the potential resolution, if any, to the situation in the Middle East, what will that impact the fuel prices, and how will that translate into the spot rates? And from a -- in a net summarized version, the underlying market seems to be healthy, but there will be substantial fluctuations on the rate side, if there is a normalization of the situation in the Middle East and the fuel prices.

[Operator Instructions]

And a question comes line of Lars Heindorff from Nordea.

Follow-up on the spot questions by Ulrik. So how much of your volumes are spots? And also, are there any particular areas or countries where you're more spot exposed? And also, I mean, given the comments in the report about fairly positive development in the Nordics and probably a bit more muted development in Germany, are there any sort of pockets or areas where you are enjoying particular headwind or have enjoyed particular headwinds owing to those higher spot rates during the second quarter may also see some headwind, as you mentioned, given a further sort of normalization of spot rates into the second half? That's the first one.

Lars, I mean, keep in mind that we sort of participate in the spot market from a buy and sell perspective. So we can buy capacity or we can buy loads, if you may, if we have either loads or no capacity or capacity, but no load. So it really depends on what side of the market that we position ourselves on. Now I would say over the course of the past few years, we've really seen an uptick in what we referred to as controlled volume on the Road side, meaning recurring customers and not agents or the forwarders that are booking with us. We've always been an overweight, a significant overweight in Denmark. And ever since the merger of the -- some of the entities in Sweden, we have seen a steadily increasing share of controlled volumes there.

So if you look at sort of the dependencies on getting volumes from ad hoc customers, it is fairly low in the Nordic region. Now it expands as we move to some of the Continental European full and part load operators but we do see the same overweight of controlled volumes when we look at the groupage network. Of course, depending on which direction, is it import, is it export, where we mainly control volumes in the 1 direction and then work with other our own entities across border, or different partners in the big network that we have built and acquired over the course of the year. So really, it really depends on how you disseminate the spot market exposure.

But the flexibility -- or the key for us is really to position ourselves based on the expectations that we have for the spot market. So if we expect prices in the spot market to be elevated, and we want to position ourselves in a way so that we can leverage these higher rates, i.e., front-loading, the capacity that we soft committed to so that we have the capacity that we can then deploy in the market to take the loads off the market that are being remunerated at an attractive price.

So it is really -- it is a split that's changing all the time, but key feedback is that we are mainly a controlled volume business on the Road side.

And then a second one on the situation south of the border in Germany. You talked about the TMS rollout. Just to be clear, I mean, you're doing this, if I understand you correctly by location. I mean, have you already rolled out TMS in ITC and Smart Insuring, what is the status with those 2 in terms of the rollout of the TMS system? And also I don't know if you can say how much they contributed within EBITDA in the second quarter.

So we don't do it by location. We do it by legal entity for technical and infrastructure reasons. So what we did complete in the very early days of acquiring Smart Insuring was the entity in Belgium. And what we did complete at the end of the second quarter was the largest activity and legal entity in Germany being in the Stuttgart region. So ITC is up next for the migration, and that will again also be on a legal entity basis.

From an EBIT perspective, it was a fairly modest contribution that the entire German market had on the Road side in the second quarter.

And just again, on the housekeeping question, how much of the Road volumes are on groupage?

On the volume side, it's -- I think it's a rather difficult measure to have. And that's not something we have on the top of the minds, to be honest, Lars. But it is -- it is 30% to 40% of our volumes.

Okay. And then a follow-up on your -- some of your earlier comments on the -- what Carsten is doing now and the development in the Air & Ocean division. I mean, clearly, there's a lot of restructuring going on given the size of special items. In terms of headcount and FTEs, I mean, do you expect that to remain stable in Air & Ocean? Or will these restructuring that you're currently conducting, Will that lead to fewer people going forward? Because you had a comment earlier on that you expected to see cost decline going forward. Will that mean that we will see the other external costs and staff costs in combination will be lower in '27 compared to '26?

We do expect the number of employees in the division as well as the staff cost to continue to decline, although at a somewhat slower pace during the second half of 2026, yes.

Okay. And then just a final one, Tinneke. Maybe I didn't hear you well enough. It was on the net financials, sort of the run rate because you don't carve out what actually financial -- sorry, what is the currency impact on the net finances in the quarterly report, so what should we expect in terms of run rate going forward here?

It would be -- we had this quarter, DKK 31 million, and that is DKK 30 million to DKK 35 million is what you should expect as run rate. The impact from FX during second quarter of '26 was rather limited.

We have no further questions for today. I would now like to hand the conference over to your speaker, Mathias Jensen-Vinstrup, for any closing remarks.

Thank you, everybody, for taking the time to join this call. And should there be any follow-up questions, please do not hesitate to reach out to our Investor Relations Officer. Thank you, and have a nice day.

This concludes this conference call. Thank you for participating. You may now disconnect. Have a nice day.

Good day, and thank you for standing by. Welcome to the NTG Q1 2026 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to CEO of NTG Nordic Transport Group, Mathias Jensen-Vinstrup. Please go ahead.

Thank you, and welcome, everybody, to our Q1 2026 Conference Call, and thank you for dialing in. My name is Mathias Jensen-Vinstrup, I'm the Group CEO of NTG and I have Tinneke Torpe, our new Group CFO, with me today. I'll spend the next 15 to 20 minutes taking you through our highlights and results for the first quarter of the year and finish off by answering questions from the audience. On the next page, and in case you didn't do so before, we kindly ask you to read the forward-looking statement provided on the page. And moving on to the next page, you see the agenda for the conference call, which includes the highlights for the first quarter of 2026, a review of the financial performance of the group and each of our 2 divisions, a presentation about the key figures, and then finally, we will open up for a Q&A session.

Moving on to the next page, you see a summary of the highlights for the first quarter of the year, a quarter in which we did quite well in large parts of our business. Gross profit increased by 8.1% and adjusted EBIT increased by 14.9% compared to the same period last year. The development was primarily driven by the inclusion of DTK and yet another quarter of organic growth within the Road & Logistics division. When you look at the M&A effect on revenue and EBIT, i.e., the DKK 26 million that you see on the slide, please keep in mind that more than half of the revenue from the acquisition of BTK. The ambient part was fully integrated into our existing entity in Denmark, in particular, but also in Sweden shortly after closing of the transaction.

And the M&A impact from this part of the business represents an estimate, just like in the previous quarters, which likely implies a somewhat positive bias that potentially understates the residual, the organic growth slightly. From an overall market perspective, we continue to operate in a volatile environment with geopolitical events impacting our industry in an increasingly frequent manner, most recently with the war in the Middle East that added yet another disruption. But as also seen in the past, we adjust quickly and decisively. And so long as the war doesn't turn into a broader macroeconomic headwind, we do see opportunities arising out of this turmoil as well.

In Germany, the underlying activity levels have stabilized, yet the ongoing implementation of a new TMS or groupage represented a drag on performance during the first quarter of the year. We are, however, confident in the direction that we have set out and the operating model that we have built with the introduction of a second TMS on the road to cater for the groupage activities that represent a sizable portion of our Road & Logistics division, also outside of Germany.

Within the Air & Ocean division, the restructuring and strengthening of the organization globally continues to accelerate in momentum and numerous measures were taken during the quarter to lower the cost base through rightsizing of the organization and also to elevate the focus on commercial initiatives to stimulate organic growth in the short, medium and longer term. And we expect this momentum to continue in the coming quarters. Based on the financial performance in the first quarter of 2026 and our current view and expectations on the market, we maintain our full year 2026 adjusted EBIT guidance in the range of DKK 600 million to DKK 650 million.

On the next page, we dive into the financial highlights for the group, where I want to highlight the organic growth of 4.4%, which was a result of strong performance in the Road & Logistics division. Looking at the gross margin, the development reflects 2 main factors: first and mainly the ongoing rollout of the new groupage TMS in Germany; and secondly, a more aggressive pricing strategy to take market shares across the Nordic region. On the operating margin side, we experienced a year-on-year improvement, driven by an improved conversion ratio in the Road & Logistics division, combined with the realization of synergies from the acquisition of DTK. Special items in the first quarter amounted to DKK 12 million, mainly related to the reorganization activities within the Air & Ocean division.

Turning to the Road & Logistics division on the next page. And the division delivered a double-digit organic revenue growth in the first quarter of the year, driven by a combination of price increases, the fuel surcharge, mainly towards the end of the quarter as well as volume growth. Market trends in Q1 differed a bit across geographies, again, with Germany remaining somewhat muted, while markets outside of Germany showed signs of improvement. Overall, the market conditions were flat to slightly improving on a year-on-year basis following a prolonged period of decline.

Outside of Germany, the development was broadly positive and stable compared to Q1 last year. And we continue to focus on gaining market shares and expanding our network organically, fighting for every customer and every shipment. Overall, the division improved profitability compared to last year and delivered organic adjusted EBIT growth of 2.0%.

On the next page, we dive into the Air & Ocean division. And from a market perspective, global container volumes increased during the first quarter of the year, but market conditions remained volatile. Container freight rates continued to face a sort of underlying downward pressure as additional capacity entered the market, somewhat counterbalanced by disruptions across global trade lanes. And towards the end of the quarter, the conflict in the Middle East led to short-term rate increases from the carriers. On air freight, market demand improved compared to last year and freight rates increased towards the end of the first quarter this year, again, partly driven by the situation in the Middle East.

During the quarter, reorganization initiatives picked up in momentum, as I mentioned before, with a focus on cost reductions and organizational rightsizing, particularly in the U.S., but also broadening to multiple other markets. As at the time of speaking, rightsizing initiatives within the division amounts to a little shy of 10% of the total number of employees in the division as per the beginning of the year. But please keep in mind that this is a gross number, i.e., investments in new competencies and existing as well as in new locations reduces the net impact in the short term. Disregarding investments in expanding our footprint in existing and new markets, we do expect a gradual decline in the cost base as we move further into the year. And finally, also in continuation of what I mentioned before, we are happy to announce that we have welcomed Carsten Trolle as the new CEO of our Air & Ocean division from the 1st of April this year, and we are pleased to see that Carsten is off to a good start.

Moving on, we turn to the key figures of the group, where we did see net working capital during the quarter was driven by normal seasonality, but also in the first quarter of 2026 with a greater than usual impact of the Easter holiday period, which we do expect to reverse in the coming quarters as well as a temporary increase in the net working capital as a result of the ongoing rollout of the new brokerage TMS in Germany. This development had an adverse impact on our cash flow during the quarter. The leverage ratio remained at 2.6x adjusted EBITDA during the quarter, positively impacted by the inclusion of BTK and negatively impacted by our ongoing share buyback program.

Finally, the decline in the return on invested capital before tax compared to the same period last year was primarily driven by higher average invested capital following the acquisitions that we have made, which carried a greater impact on the invested capital than the corresponding increase in the adjusted EBIT.

As a concluding remark, we've also shared an invitation to our Capital Markets Day in Copenhagen on the 18th of November 2026, and we look much forward to welcoming institutional investors and analysts to deep dive on the progress that we are making across the entire footprint of the business and also to introducing our new and now complete management team. You can register via a link on our website or in case of any questions, you can reach out to our Investor Relations team. So this concludes the presentation. So moderator, please open for Q&A.

[Operator Instructions] And our first question comes from the line of Lars Heindorff from Nordea.

The first one is on the Road business, quite impressive organic growth, a decent topline with 10%. Could you please give us a bit more details? I mean, to what extent is this caused by volumes? And to what extent is this price? There's been a lot of price increases. And then perhaps also if you can share some thoughts about the impact on growth as we head into the second quarter, maybe even perhaps the third quarter from the increase in the diesel prices? That's the first one.

Sure. Thank you, Lars. So I'd say the split has been different or changing over the course of the first quarter. So for the majority of the first quarter, I would say it's more of a balanced split in terms of volume and price growth. But there's no doubt in particular on the revenue side that as we introduced also a more frequent update of our diesel surcharge mechanisms that the price portion of the growth did expand. And we continue to expect this to be the case as we move further into the year as also as we see some of the customers with less frequent updates also coming up to speed, so to speak, on the diesel surcharge mechanisms. Now what we also did see if we look at it from sort of a gross profit perspective is that we did manage to sort of keep the haulers on a lower level for a few weeks during the quarter, and they will also be picking up as we move further into the year.

So -- but there's no doubt that we do expect to see a positive contribution on the gross profit side as we move further into the year, but we do expect that positive contribution to normalize somewhat as the haulers also pick up. But it all depends on where the price per barrel will sort of stabilize and also the macroeconomic implications of such a high fuel price going forward.

And just to understand that because you referred yourself to the gross margin, which is down year-on-year. As you point out, apparently some price increases towards the haulers. Now is the easy flow that is rather positive or negative? And if you already have conceived some price increases towards the haulers, what will that then do to the gross margin as we head into the coming quarters? Is that going to be a little bit under pressure as well compared to last year?

I mean I'd say there's -- as we tried to allude to in the presentation, there's 2 main drivers of the gross margin development in the Road division. There's the situation with the rollout in Germany, where we definitely did take a rather significant toll on our margin that we do expect to recover as we move further into the year. But it will be a process that will continue throughout the remaining 3 quarters of the year. And also in the Nordic region, we did see a decline in the gross margin given the pricing strategy that I mentioned during the presentation. But in isolation, the impact of our changes to the diesel surcharge mechanism is expected to have a positive impact.

Okay. And then just 2 more, then I'll jump back in the queue. The first one on the cash flow and the net working capital, you mentioned yourself that's been and also you had a comment on the rollout of the new TMS system tying up some net working capital. I mean, is that something that we will see in the coming quarters or will have -- will that have any kind of negative impact on a full year basis as well? I guess you won't be completely done with the rollout of [ transport structure ] until the end of this year?

I mean it's a moving situation. We do expect to have seen the biggest tie-up of capital in the first quarter of the year. But it is a process and with sort of a groupage system and a group workflow, any challenges will end up in the invoicing phase of the shipment life cycle. And that's what we did see that took a rather significant tie-up of net working capital. But again, as I also mentioned, I think a big factor in the buildup of working capital in the first quarter was also a more sort of intended move towards some of the haulers from our Nordic entities where because of the timing of the Easter holiday, we wanted to make sure that the money would be in the bank as soon as possible as we move into April.

But because of the timing of the holiday, we did decide contrary to previous years to do rather a large payment by the end of March instead of into April. So that also did take a rather significant toll on working capital.

Okay. And then the last is on the M&A side, 2.6x EBITDA is still fairly high leverage and then you've initiated a share buyback program. So maybe if you could give us a status on your thoughts about M&A. Will you -- I mean, geographically by division perhaps? And also, I mean, are we looking at if you do something this year, given a lot of all the changes that goes on, will it be bolt-ons? Or could you potentially be looking into something which could be bigger?

We could potentially be looking into something that would be bigger in this case. I mean if you look at it from a divisional perspective on the Road side, there's still a full and prioritized focus on Germany and the rollout of the TMS, which continue to take the majority of our attention in that part of the business. And on the Ocean side, Carsten just joined as of the 1st of April, and there's definitely a lot of initiatives being launched at the moment.

But given the sort of the agility and the size of the division, we do expect to be much more prepared for potential M&A just, say, 6 months plus down the road. So we are -- I mean, we are preparing the entire organization, not only on sort of a divisional level, but also from a group perspective on the IT side and on the finance side to make sure that we can do integrations much more seamlessly and quicker than ever before, and we are seeing quite a lot of improvements these days.

Our next question comes from the line of Ulrik Bak from Danske Bank.

So a couple of questions from my side. Firstly, follow-up on Lars' question about the gross margin in Road & Logistics. So diesel prices are up roughly 30% since before the Middle East situation started. And I understand that around 1/3 of your whole year cost before the situation started is diesel. So 30% times 1/3, that's a 10% increase price component if we assume that the current diesel prices last for the rest of the quarter in Q2. So if you say that it will also have a positive impact on your gross margin, we should see a significant increase in the gross profit and i.e., also in EBIT in Q2. I just want to be sure that I understand that correctly.

As I tried to allude to, there's a lot of moving parts in the gross margin of the group. In isolation, we definitely do expect a positive contribution. But what we're also seeing is quite extensive discussions with our clients in terms of that 1/3 that you allude to. I mean, of course, we're trying to argue that if you keep the total cost base, excluding the fuel prices constant, that 1/3 would be higher. That is tricky. And by the end of that all what matters to the customers is the total price of the transport and not so much the different components, even though that we try to argue for the increases that we are introducing.

But I would say that if you look at sort of the general activity level in the market and the capacity situation, especially towards the end of the first quarter, but also moving into the to the second quarter. We have seen a tightening spot market, in particular, with price increases as a result, which also means that the bargaining position of the haulers is strengthening as capacity becomes an increasingly scarce resource. And of course, that will have an adverse impact on this particular effect that we are talking about. But everything else being equal, we do expect to see a positive contribution, but we also do expect to continue to be competitive, especially in a market that seems to be suffering a little bit on the road side, where we do want to go in to win the business and make sure that we take as much market share as we can.

And we do that by launching a multitude of initiatives, but mainly based on pricing. So that will have a negative impact expectedly.

So second question on the drag from the TMS rollout. Can you quantify what the impact was in Q1 on EBIT or gross profit? And how long we should expect this drag to be in place? So when will it be fully rolled out and see a contribution, positive contribution from it?

Sure. So we won't do any sort of precise quantification of the impact, but it was indeed a meaningful impact, to a certain extent, significant impact. We are seeing a recovery. We've seen that over the course of the quarter, but that recovery will be longer than expected, and it will continue for 1 or 2 quarters moving.

Okay. And then perhaps back to what you alluded to before, just the market outlook on the different regions. You made a comment in the report saying that you saw stabilization towards the end of the quarter, but it was subdued during the quarter. So what here at the beginning of May, what are you seeing currently? Are we starting to see a pickup? Or is it still just stable?

I mean, as I mentioned, the spot market seems to be doing quite well as we speak, in particular, when looking from a Nordic perspective. I do think on the Air & Ocean side, it's a bit of a different environment that we are looking into. We did see quite a muted activity, in particular, in the beginning of the first quarter. And in addition to the project activity that we've discussed quite a few times, we also did see a downturn of similar magnitude in the U.S. given sort of a lower activity and the more hesitant behavior amongst our customers. And that sort of hesitant behavior seems to have been picking up a little bit in the wake of the war in the Middle East.

So on the Air & Ocean side, as we also alluded to during the full-year presentation for the '25 numbers, we do expect it to be a tough market, at least from an activity and yield perspective, looking 12 to 24 months ahead. And that's why we are fairly firm and quick in our rightsizing of the organization, but also in terms of investments in strengthening the organization and positioning ourselves for the pickup whenever that may occur.

So I think it's somewhat of a blurry picture. There's no doubt that Germany seems from sort of a macroeconomic perspective to have improved in the beginning of the first quarter and then the development turned quite quickly again for the worst. So it is a little bit up and down right now on the continent, in particular, in the middle part of the continent. But in particular on the Western side, we have seen similar patterns as is the case in the Nordics.

All right. And perhaps final question on your guidance sensitivity to this macro environment. You maintained the guidance on EBIT, DKK 600 million to DKK 650 million. So can you provide any flavor about the assumptions now you say that the TMS is perhaps a bit behind schedule, macro, yes, still uncertain. But what are the levers to bring you at the top or low end of the guidance range here?

So basically a continuation of the situation that we find ourselves in right now. As you mentioned, the drag from the TMS is bigger than expected, but we also have seen performance elsewhere in the business that has improved compared to the expectations. And on a net basis, this makes us comfortable still with the guidance range that we provided. But in case the activity levels generally deteriorate because of the fuel prices and in particular, the derived effects that may have on activity levels globally, then that will rest outside of the guidance range.

We will now take our next question this one comes from the line of Emilie Fung from Barclays.

Just a quick follow-up for me from the last question we just had. So when we think about the guidance, should we assume a normal seasonality to bridge guidance? Or is it delivery more dependent on the second half step-up in Air & Ocean than the Germany TMS normalization? And are you able to give some color on your expectations, your assumptions behind the duration of the Middle East conflict in your guidance, please?

As I mentioned before, we base our guidance on a continuation of the current market environment and also the challenges that we are facing from a more sort of endogenous or internal perspective. Now we have no firm opinion on when the situation in the Middle East will come to an end. But even though there may be an improvement in the environment, so to speak, we do expect to see implications on the fuel prices to persist at least for a period after a potential sort of resolvement of the situation. So it is a little bit like extrapolating the situation from Q1 to the rest of the year that confirms the guidance range that we provided.

We have one more question and this one comes from Lars Heindorff from Nordea.

Just a follow-up. It's on the costs in roads. So you say that there has been a slight delay in the rollout and also incurred some costs, it sounds like that in the first quarter. But if you look at the total cost base, it's only very marginal up compared to the level of Q4. Actually, it's slightly down. I think it was DKK 300 million if you adjust for the earn-out in the fourth quarter, and it's DKK 294 million combined, both of the internal and staff costs in the first quarter. So maybe if you can just, I mean, share some details on that, why if there are some extra costs related to these things on the rollout, why are costs down sequentially? And what kind of run rate should we expect for the rest of the year?

It's a fair point. I think it comes back to what we discussed before in terms of the gross margin. I think the biggest impact of the challenges that we're facing in Germany is not so much on the OpEx side, it's more on the gross margin side. And it's not system related, and it's not per se a delay in the rollout of the system. I actually think that went quite well from a technical perspective.

And as I mentioned, we are even more confident in the choice of the system that we made and also in our competencies from a technical perspective in migrating on to Translogic as it's called in the future. It is a huge change management exercise, and it definitely requires a rather significant overhaul of the previous more manual processes, which gives room for a greater number of errors than what we've seen in the past and also decisions that are of a greater cost to make sure that we uphold the service level towards the customers. So we do expect in isolation to see a decline in the OpEx and the cost base once we are on the other side of the challenges with the rollout of Translogic, but the main impact has been more on the gross margin side and on the gross profit side.

Okay. And just a clarification again on the back of Ulrik's earlier question. When will the rollout be completed?

So we do expect by the end of the second quarter and the third quarter of the year to be in a stable situation where we move back to business as usual and more continuous optimization as opposed to some of the large organizational changes that we're introducing.

That was our last question for today. I will now hand the call back to Mathias Jensen-Vinstrup for closing remarks.

All right. Thank you, everybody, for participating. Thank you for the questions, and please do not hesitate to reach out to our Investor Relations team in case you have any follow-ups. Thank you, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the NTG Nordic Transport Group Full Year 2025 Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I will hand the word to CEO of NTG Nordic Transport Group, Mathias Jensen-Vinstrup. Please go ahead.

Welcome, everybody, to our Q4 and full year 2025 conference call, and thank you for dialing in. My name is Mathias Jensen-Vinstrup, and I'm the Group CEO of NTG. I'll spend the next 20 to 30 minutes taking you through our highlights for the fourth quarter of 2025 and provide an update on the full year results, the outlook for 2026 and finish off with answering questions from the audience.

On the next page, we kindly ask you to read the forward-looking statement provided in the slides.

And if we move on to Page #3, you see the agenda for this conference call, which, as always, includes the Q4 highlights for 2025, a review of the financial performance of the group, followed by each of the 2 divisions, a presentation of other key figures and finally, our guidance for 2026.

On Page #4, you see the highlights for the fourth quarter of 2025. And overall, and in light of the challenges that we experienced throughout 2025, we did see an improved momentum towards the end of the year. Gross profit increased by 14.5% in the fourth quarter of '25, driven by a combination of continued organic momentum across large parts of the group as well as contributions from our recent acquisitions. That said, we did experience a normalization in Air & Ocean project volumes compared to the same period last year. This was expected and it was partly -- and it partly offset the underlying progress elsewhere in the business. But if we exclude the decline in projects activity, the underlying gross profit also increased within the Air & Ocean division in Q4.

If we move to the earnings, adjusted EBIT increased by 27.5% year-on-year in the fourth quarter of 2025. And the main driver here is the Road & Logistics division, where we continue to see both organic growth and a strong contribution from acquisitions, most notably DTK, who also performed very well in the fourth quarter of the year. In addition to this, we also recognized a DKK 22 million earn-out reversal related to the ITC acquisition, which supported the EBIT development in the period. In connection with the release of our 2025 annual report, we also launched a share buyback program of DKK 200 million. And the program will run until no later than the 9th of November this year, and it is fully aligned with our approach to capital allocation and within the boundaries of our leverage framework.

Finally, based on the performance so far and our current view on the market, we are guiding for full year 2026 adjusted EBIT in the range of DKK 600 million to DKK 650 million. And this guidance assumes a broadly unchanged market environment and reflects both the progress we have made operationally and also a continued focus on execution of the strategy as well as cost consciousness initiatives across the group.

If we flip to the next page, we turn to the financial highlights for the group. And from a market perspective, the European road market generally remains subdued, and we continue to see muted demand and fierce competition, particularly in parts of Continental Europe. That said, we are holding up very well organically relative to the market. In Air & Ocean, volumes continue to grow, although the mix is different from what we've seen in earlier periods with less project activity and more general cargo, as I mentioned before. And if we take a look at the margins, the gross margin benefited from 2 main effects. First, we've seen lower average ocean freight rates, which structurally supports gross margins. And secondly, following the recent acquisitions that we made, we have a higher groupage mix and exposure within the Road & Logistics division, which also carries higher gross margins. And together, these effects supported the margin development.

On the cost side, we did see a slight increase in the organic cost base, which is partly a result of the investments that we've made to support the business and also our integration activities and competencies across the group. But at the same time, this increase was partly offset by cost-saving initiatives across the group, but also in certain countries, and we remain very focused on cost discipline also for the future.

And finally, the positive operating margin trend continued. This was obviously supported by the earn-out reversal related to the ITC acquisition, which had a positive effect. And this development was partly offset by the impact from the normalization of project activity in the Air & Ocean division, again, as mentioned before, which had been at very elevated and extraordinary levels in the comparison periods. If we adjust for the ITC earn-out reversal, the margin for Q4 was 5.0% from an operating margin perspective. Overall, we are satisfied with the margin development given the market backdrop, and we remain focused on protecting profitability through elevated cost consciousness while continuing to execute on our strategic priorities, professionalizing the organization, particularly within the group in Germany and across the Air & Ocean division, and we remain optimistic as to the coming year.

On the next page, we turn to the Road & Logistics division. And again, if we start with the market environment, volumes were flat year-on-year, and the trend has continued into January and February this year. In other words, we are not seeing any meaningful recovery yet. However, we are also not seeing a further deterioration. The market remains competitive and subdued but relatively stable.

Looking at earnings. Adjusted EBIT in the quarter was positively impacted by the ITC earn-out reversal of DKK 22 million, as I mentioned before. And that effect is clearly visible in the reported numbers. But it's important to keep in mind when assessing the underlying performance in any event. Adjusted for the earn-out, the adjusted EBIT in Q4 expanded organically by 5.3%. And we are pleased with this development, particularly given the market backdrop and the flat volume environment. And the development once again testifies to our operational capabilities within the Road & Logistics division.

Finally, on pricing, we started to see the industry implementing freight rate adjustments during the fourth quarter of 2025. There was no material impact of this in the Q4 numbers but we expect the price increases, which we also introduced to be fully reflected over the course of 2026, supporting earnings as volumes normalize over time. Overall, the Road & Logistics division continued to demonstrate resilience and a solid performance, and we remain focused on the German integrations while positioning the business for any potential market recovery.

On the next page, we turn to the Air & Ocean division. And again, from a market environment perspective, the conditions remained rather volatile throughout the fourth quarter of the year. This has been a consistent theme for some time now. And while volumes did increase in the fourth quarter, visibility certainly remains limited. As we move into 2026, rising geopolitical tensions, not least in the Middle East, are expected to influence global trade patterns, and that adds another layer of uncertainty to the market environment that we are facing and acting within. If we look at the rates, ocean freight rates remained below last year's levels and continue to experience a downward pressure. We're also seeing capacity entering the market, which is weighing on pricing. But with the conflict in the Middle East, there may be or there may become a certain rate support if the situation continues.

Air freight rates were impacted to a lesser extent, but the overall rate environment remains challenging across both the air and the ocean road. As mentioned earlier, results from the project organization were lower than in Q4 of 2024. This was fully anticipated and also communicated in previous conference calls. And it does explain a meaningful part of the year-on-year comparison within the Air & Ocean division. But if we adjust for the effects of the AGL earn-out reversal in 2024 as well as the project activity normalization, both gross profit and the adjusted EBIT increased in 2025. And in the fourth quarter of 2025, gross profit also increased, while EBIT was slightly down compared to the same period in 2024 due to mainly muted activity in the U.S. and in the U.K.

Overall, Air & Ocean continues to operate in a challenging market environment. And our focus remains firmly on improving the organic growth through strengthening of the organization, opening of new markets and branches, but also cost discipline to adapt to the realities of the market that we are seeing at the moment.

We flip to the next page, we turn to the key figures. Net working capital was positively impacted by seasonality during the final quarter of 2025. And we typically see this to provide a tailwind on the working capital. But regardless of this development, we still work on and aim to bring our working capital down even further, especially in the U.S. Air & Ocean business, even though we did see a significant decline compared to December 2024. So this remains a focus area for us, and we continue to work with the collection and dunning procedures all across the footprint of the company. Overall, we are comfortable with the balance sheet position and the cash flow development. and we remain committed to a disciplined capital allocation going forward, which also includes the introduction of a DKK 200 million share buyback program, as I mentioned in the beginning.

And finally, on the last slide, you see the full year outlook for 2026. And based on our performance so far and our current view on the market environment, we are guiding for a full year adjusted EBIT in the range of DKK 600 million to DKK 650 million. And as we've communicated consistently, this guidance assumes a broadly unchanged market environment. We are not building in any meaningful market recovery, but neither are we assuming a further deterioration from the current levels. The range that we provide reflects solid execution in the Road & Logistics division and a challenging market environment in Air & Ocean, but also a continued focus on the cost discipline across the entire organization.

In addition to the full year outlook guidance for 2026, we also guide for special items in the range of DKK 20 million to DKK 25 million. These special items relate to the strengthening and the reorganization program that we have launched already within the Air & Ocean division, which kicked off towards the end of last year in the U.S. And the objective of this program is to align the organization with the current market environment in line with the ordinary course of business, but more importantly, to strengthen our focus and investments in organic growth for the future. It's important to emphasize that these special item costs are nonrecurring in nature, and it's part of a global strategic review, mainly aimed at elevating organic growth and the conversion ratio within the Air & Ocean division in its entirety.

This concludes the presentation from our side. So moderator, please open the line to questions from the participants.

[Operator Instructions] We will now take the first question from the line of Emilie Fung from Barclays.

Just one question to start with. So with the price increases in Road, how much is already implemented? And what should we expect is still to come? And how -- can you give any color to how sticky it's been across the regions? And are you able to quantify what type of level of price increase we should expect within 2026 and when it should start to show in the numbers?

So the price increases introduced in the Road & Logistics division were mainly implemented in the first 2 months of 2026. And based on sort of the general behavior in the market, we have seen a rather solid reception of the price increases. And the stickiness of the increases seem to be at least in line with the best cases that we have seen in the past. So there seems to be support from the customers' perspective, not least given that this has been a general move in the market and not something we have been the sole provider of...

[Operator Instructions] There are no further questions at this time. I would like to hand back over to Mathias Jensen-Vinstrup for closing remarks.

Well, thank you, everybody, for dialing in. And please do not hesitate to reach out to our Investor Relations for any questions that may pop up. I'm sure we'll be meeting a lot of you during the next few days on the road. Thank you, and have a nice day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Nordic Transport Group Third Quarter 2025 Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Mathias Jensen-Vinstrup. Please go ahead, sir.

Thank you, and welcome, everybody, to our Q3 2025 conference call, and thank you for dialing in. My name is Mathias Jensen-Vinstrup, and I'm the Group CEO of NTG. And I have Christian Jakobsen, our Group CFO, with me today. We will spend the next 20 to 30 minutes taking you through the highlights for the third quarter of 2025, and finish off with answering questions from the callers.

If we flip to the next page. We kindly ask you to read the forward-looking statement provided in the slide. And on Page #3, you see the agenda for today's conference call, which, as always, includes the quarterly highlights, including a short M&A update, a review of the financial performance of the group, followed by the 2 divisions, a presentation of other key figures, and finally, our outlook for 2025. By the end of the presentation, the line will be open to questions from the audience.

And if we flip to the next page, you see the key highlights of the third quarter of this year, during which both divisions achieved double-digit growth in gross profit, driven by organic performance and contributions from our recent acquisitions.

Despite a quarter characterized by challenging market conditions across modes and geographies, adjusted EBIT increased by 40% year-on-year on the back of organic growth in mainly Denmark and Sweden, but also in the Netherlands, the Baltics and in Switzerland, as well as continued positive impacts from the acquisition of DTK. The integration of DTK is close to finalized with only minor synergies yet to be realized, which is expected no later than by the end of this year, i.e., some 7 months after closing of the transaction.

In Germany, market conditions continued to impact both Schmalz+Schön and ITC during the third quarter of the year. And as communicated in previous updates, Schmalz+Schön's performance remains aligned with the broader market trends, reflecting persistent macroeconomic challenges within the German logistics industry. At the same time, ITC continues to face difficulties adapting to the current market environment, and the teams are working diligently to recover the grounds lost during the initial months of our ownership.

We are collaborating with the German and local management teams to implement commercial and operational enhancement initiatives, aiming to position ITC for a recovery, and an organizational restructuring has been completed to ensure that the appropriate competencies are in place within key roles going forward. Nonetheless, it's important to acknowledge that the recovery process for ITC will continue and the journey ahead will focus on upgrading the digital infrastructure and executing coordinated commercial initiatives to regain market shares in Germany.

Based on the results for the first 3 quarters, we have narrowed the full year guidance for 2025 to between DKK 560 million and DKK 590 million, which Christian will get back to later in the presentation. But before Christian presents the divisional and group financial results, I would like to take a moment to recognize the dedication and hard work of our teams and colleagues worldwide, who've continued to safeguard customer service and profitability despite continued challenging market conditions, a commitment and adaptability that, as an example, has been fundamental to our consistent outperformance of the broader market from an organic growth perspective within Road & Logistics.

With those words, I will hand it over to Christian, who will take you through the financial results for the third quarter of the year. Please go ahead, Christian.

Thank you, Mathias, and also warm welcome from my side. Before jumping into the financials, I just want to confirm that we, as promised, are now live with the generic pilot of the new groupage TMS system. From my side, I want to thank everybody who has been a part of this hard work. It was a journey, and we will start implementing the next in Q1 2026.

If we take a closer look at the financial highlights for the third quarter, net revenue for Q3 came in at DKK 2.941 billion, representing an increase of 28% compared to the same period last year. The growth was primarily driven by acquisitions, which contributed 30%, while organic growth was slightly negative at minus 1.2%, mainly due to the lower average ocean freight rates.

Currency effects were marginally negative at minus 0.8%. Gross profit increased by 44% to DKK 657 million, and the gross margin improved by 2.4 percentage points to 22.3%. This improvement was mainly the result of lower ocean freight rates and a higher share of groupage and warehousing coming from the German acquisitions.

Adjusted EBIT came in at DKK 160 million, up 40% year-on-year. The increase was primarily driven by the DTK acquisition and the organic growth in the Road & Logistics division. The operating margin improved by 0.4 percentage points to 5.4%, reflecting stronger performance in the underlying Road & Logistics business, especially in Denmark and Sweden. If we look at the market environment, the European road market remains subdued with muted demand and continued pressure on freight rates. That said, we are starting to see some stabilization following a prolonged period of decline, and we expect to see rate increases in selected markets during Q4 '25 and Q1 2026.

And if we go to the Road & Logistics division, market condition remains subdued, and we continue to operate in an environment with low visibility and have not yet seen any material changes in market demand. Market volumes were essentially flat year-on-year, but we are starting to see some stabilization after a prolonged period of decline, while overall environment is still characterized by high competition and muted demand.

Net revenue for the division increased by 47% to DKK 2.296 billion in the third quarter with organic growth of 6.8% and acquired growth of just over 40%, primarily from the DTK, Schmalz+Schön and ITC acquisitions. Currency effects were marginal at 0.3%. Gross profit was up 57% to DKK 511 million, and the gross margin improved by 1.4 percentage points to 22.3%. This improvement was, as mentioned before, mainly driven by the higher groupage and warehousing exposure from our German acquisitions, which typically carry higher gross margin.

Adjusted EBIT for the division increased by 48% to DKK 139 million, and the operating margin improved by 0.5 percentage points to 6.1%. The positive development in adjusted EBIT compared to last year was driven by both organic growth and by the contribution from recent acquisitions. In particular, we saw a strong performance in Denmark and Sweden, which helped to offset the lower activity in the U.K. If we look at the verticals, the automotive segment remains under pressure and continued to negatively impact our results in Q3. This trend is expected to continue through the remainder of 2025 and into 2026.

And if we move to the Air & Ocean division, the market environment in Air & Ocean remained volatile in the third quarter with the ongoing uncertainties surrounding U.S. tariffs and continued changes in market announcement. Ocean freight rates stayed below last year's levels and continued to be under pressure as additional capacity into the market. Air freight volumes were also impacted, although to a lesser extent, and air freight rates were slightly down year-on-year. Net revenue for the division decreased by 13%, primarily driven by lower average freight rates, reduced volumes and normalized project activity. Organic growth was down 18%, while acquired growth contributed 9% coming from the Schmalz+Schön and Freightzen acquisitions.

Currency effects were negative at minus 3%. Despite the decline in revenue, gross profit increased by 12% and the gross margin improved 5.1 percentage points. This improvement was mainly due to lower average ocean freight rates and the positive contribution from our recent acquisitions. The gross profit growth reflects the shift in our business mix with general cargo activities replacing last year's higher project activity. Adjusted EBIT for the division decreased by 19% as the high-margin project volumes seen last year were replaced by lower margin general cargo activities in Q3 2025. The operating margin decreased slightly to 3.3% and the conversion ratio was down to 14.4%, reflecting the lower contribution from the project volumes.

And if we flip to the next page and have a closer look at the key figures for the third quarter, net working capital was negatively impacted by the seasonality and elevated levels within the Air & Ocean, and we saw a negative development of DKK 90 million compared to previous quarter, but in line with last year's quarter. Cash flow for the third quarter was affected by the net working capital development with adjusted free cash flow totaling DKK 1 million.

If we look at the balance sheet, net interest-bearing debt, excluding IFRS 16 lease liabilities, was DKK 1.2 billion at the end of the quarter. This increase in net debt and gearing ratio compared to last year was driven by the acquisition completed during the last year, including Schmalz+Schön, DTK and ITC. Return on invested capital before tax declined to 18% compared to 25.5% last year, primarily due to the impact of the acquisitions and the higher capital base following these transactions. In summary, while we continue to see the effect of seasonality and acquisitions on our key financial metrics, we remain focused on disciplined net working capital management and maintaining a strong balance sheet.

And then if we flip to the last page, we have narrowed our guidance. As Mathias mentioned, based on the results during the first quarter of the year, we have narrowed to DKK 560 million to DKK 590 million. Taking the top of the range reflects the current market where we saw muted development across all modes and a cautious view on the Q4 that we are already halfway through. We continue to anticipate an unchanged market environment for the remainder of 2025, characterized by a soft macro environment and consumer sentiment.

And now I'll hand the word back to Mathias for the closing remarks.

Thank you, Christian. This concludes our presentation. So moderator, please open the line to questions.

[Operator Instructions] Now we're going to take our first question, and it comes from the line of Kristian Godiksen from SEB.

A couple of questions from my side. So just maybe if you could add a bit of flavor to the narrowing of the guidance towards the low end. Actually, this is based on the fact that actually it's pretty strong Q3 numbers, especially within the Road & Logistics part of the business. That would be the first question.

And then secondly, interested on your view on the -- Christian, you mentioned it as well that you expect some selected price increases during Q4 and this year and Q1 next year. Can you maybe speak somewhat more about that? What should we expect? I believe we have seen high single-digit price increases announced. So what's the expectation we should have to -- on what prices will actually come through in actual rates?

And then thirdly, maybe if you could put a bit more flavor on your choice of the new TMS system within the groupage. When do you expect that to be fully implemented? As I heard you, we will start the implementation in Q1? And what kind of EBIT contribution on an annualized basis should we expect once it's fully implemented?

Yes, if we look at the narrowing of the guidance, please remember that with the acquisition of the 2 German companies there, our seasonality has changed somewhat. We will definitely see a good October and a pretty good November. But due to the higher fixed cost that you have in a groupage organization than December where they closed down in the middle of December, there you will see an awful December. So that is definitely, what you can say, the challenge with a high fixed cost in the group setup.

Then on the price increase, if we look at the price increases in general, I think a lot of our competitors have been out in the market and obviously also us where we are being pushed by the hauliers because they will either have to have price increases or they will run into bankruptcy. So we are a little bit in the same situation as we saw last year. And yes, we are still in the early days of the price increases. So we don't know how much the market will affect us, but we will have to see that in general, our industry has to have some price increases, because we can't simply absorb the price increases that we have to pay towards the hauliers.

Then on the new TMS system, the new TMS system is actually a full pilot that we started here Thursday. So it is running, and we had the first bookings coming through, but we also took a smaller entity to do the test on. It is like we also did with CargoWise. The pilot is always, you think you have done everything to prepare yourself and thought of everything, but you know in reality when you come live, then there will be something which you didn't sort of. And therefore, it's always good to start with something that is less complicated, if there's something. It seems to run smooth. And obviously, we are just -- as I said, we were live Friday morning. So it's not that we have a lot of test data, live data yet, but it seems to be running smoothly. And confirming also that the big project we have in Fellbach in the first quarter that we should be prepared for. So we expect that we can talk more about that when we are live in connection with the annual report.

Okay. So just a couple of follow-ups. If I may challenge you a bit on the reasoning for the narrowing of the guidance range, you mentioned that December is -- with the new German entities coming in, that is you have a higher fixed cost base in that regard. I acknowledge that, but I guess that was also the case in connection with the Q2 results. That's not something that's changed between Q2 and Q3. So yes, maybe some flavor on that.

And then I guess, on the price increases, I hear what you say and agree. But I guess I was just wondering whether you could maybe potentially be a bit more optimistic this year based on volumes having, if not improved, and at least not declining to the extent they were and then have stabilized. And also, it seems like there is a bit more positive optimism in expectations, not least in Germany. And hence, you could argue that you could be a bit more optimistic on how much of the price increases that will actually come through.

Are you asking me to be more optimistic? I mean we need to see it coming through, and we don't want to sit and promise you something that we can't deliver. So we would rather say that we are doing all we can, but I can't sit and promise you that we will see an uptick in the gross margin. Obviously, we are under pressure. And I think you also see some of our bigger competitors being under pressure. So I will not sit and promise you a lot on the effects of the price increases, but it's necessary.

But still looking at Q2, we were more -- the groupage business and logistics business is more hit by lower volumes in soft months. And that means that instead of full and part loads making a smaller profit, then you will typically see that logistics and groupage will deliver a minus in the smaller months. And if the volumes are a little soft, then they will be hit harder. And therefore, you will see that our strong months will keep being very strong and the soft months will be weaker than what we used to see in the legacy entity.

In addition to the effects of the groupage activities, it's also fair to state that from an Air & Ocean perspective, we do expect a lower activity in the fourth quarter compared to our expectations during the second quarter given that we've seen some sort of front-loading of volumes given the elevated uncertainty in the market in general.

And the lower volume within the groupage network, say, sequentially between what you expected in Q2 and expect now, is that due to market expectations? Or is that the pickup in volumes in your German acquisitions that are the main reason for that?

Maybe we should give room for the next ones. But we are seeing in general that the German market is softer than the Nordics at the moment.

Now we are going to take our next question, and it comes from the line of Lars Heindorff from Nordea.

Also, I'll limit myself to 7 questions. So the first one is on Roads. Quite impressive organic growth in the third quarter. Can you maybe help us explain how you achieved that? And as usual, I'm interested in the split between what is volume, what is price? Are there anything else in there? Just to get a sense for the development? That's the first one.

I mean, we don't provide the exact split between price and volume. What we are able to say is that it's mainly -- I mean, the organic performance, as mentioned in the introductory speech, is driven by Denmark and Sweden. And in both countries, we have seen quite a big uptick in volumes also, in particular, in Sweden, which came from a lower point in 2024. They have continued the positive momentum from the second quarter and from the first quarter into the third quarter, really taking market shares all across the board. So sort of from a net customer inflow perspective, we have seen quite a positive tailwind across the Danish and Swedish entities, in particular, the 2 biggest ones being the Road entities.

Okay. And then on Air & Ocean, I mean, earnings in that division has been sort of tagging along with the development of market in general. And I mean, you still have a subscale. I think that's not a secret. You have exposure -- too much still exposure to the spot market. So the question is basically, what should we see here? I know you're doing some stuff in terms of how you organize your cargo. But if we assume that the sea freight market will be under pressure well into next year because of structural oversupply in the container business, I mean, what should make the earnings in Air & Ocean actually recover, or will there be a recovery? And then also as an add-on to the Air & Ocean part, can you maybe indicate -- I'm not sure how precise you want to be, but indicate how much impact the project business that you don't have this quarter, how much actually is that of a swing factor?

No, on the latter question first, the sort of design in front of the growth development in EBIT would be different had we sort of excluded the project-based business. So it is quite a big swing factor. And if you look at the underlying business or the business excluding the project activities, it would be a sort of satisfactory development from a percentage perspective. But by the end of it all, it's the bottom line that matters, everything included. And so looking at the Q3 numbers, we delivered a 14.4% conversion ratio and a 3.3% EBIT margin in the Air & Ocean division, which is even despite the sort of insufficient scale, not satisfying.

Now we do expect that the markets will continue to be and perhaps be slightly more challenged as we move further into Q4 and into 2026. And this will necessitate an even greater focus on the cost base also to make sure that we protect what we have and also strive to optimize the business from a 360-degree perspective. But it will be challenging as it looks right now moving into '26 on an Air & Ocean perspective.

But Mathias, I mean, does that mean that we will see that the cost base will decline on a quarterly basis as we head into next year?

I mean everything is up for analysis and investigations as we speak, and we will do everything we can to protect the earnings that we have, but also drive further growth in the volumes even in challenging markets. But the cost base needs to come down within the division in order to improve the results no matter what happens in the market.

Now we are going to take our next question. And the question comes from the line of Ulrik Bak from Danske Bank.

Mathias and Christian, also a couple of questions from my side. So first on Road & Logistics. I was just wondering if you could elaborate a bit more on the 2 German acquisitions, both the current state of them and perhaps also if you have insight into their customers, the volumes, how they have trended versus 1 quarter ago. But also if you could guide us in any way about the earnings contribution from Schmalz+Schön and ITC over the coming 12 months, because this year, looking at the M&A contribution, I assume that most of it comes from DTK. So it's roughly neutral contribution to EBIT this year. So if you can guide us in somehow to what you expect for the coming 12 months there?

No, happy to do so. I mean, from a Schmalz+Schön perspective, the customer portfolio continues, by and large, to be fixed. I mean there's always a little bit of a churn, but nothing significant at all, and we are also adding new customers to the portfolio. And in terms of the larger accounts within the Schmalz+Schön family, we are very optimistic about the long-term collaboration with one account in particular. And so what we have been seeing and sort of continue to see is a muted activity level, and there's no immediate signs of recovery within Q4, but we do see what could be a turning point in terms of order intake expectations as we move into 2026.

So from a Schmalz+Schön perspective, it's steady at a low level. And as Christian mentioned, we do have quite a big milestone as we move into 2026 in terms of the migration onto the new groupage system in the biggest entity within the Schmalz+Schön family in addition to the live pilot that we have in the Eastern part of Europe all ready. So from an ITC perspective, the situation is fairly constant from a customer portfolio perspective compared to the second quarter and what we discussed back then. But there's no doubt that the road to recovery is longer and more difficult than is the case from a Schmalz+Schön perspective. But the groupage system that we will launch in the southern part of Germany in the beginning of '26 will also be applied in the ITC universe. And we do expect to see sort of so far externally unquantified productivity improvements similar to what we believe is sort of market conform when upgrading the digital infrastructure of an entity. So that's my 5 cents opinion.

Sorry, Christian, go ahead.

Should I give a little on the expectations? Then as Mathias mentioned, we will see some productivity improvements with the new system. But we always see that the first 3 months, there will be no improvements. And then afterwards, we can definitely take more shipments per employees within the systems, and that means the sales guys should definitely go out and find some more. And if we look at the contribution, then we also took some measurements on the cost side within the German organization, and that should also improve the results compared to where we are this year.

Okay. Could you quantify that and just the restructuring costs, just remind us.

No. But I think you have seen that our special items were a little higher than what we originally announced. And some of it is obviously coming from that we lost some customers within the ITC and therefore, we have closed the terminal in Schwieberdingen and moved it into Fellbach. And that cost saving is -- I'm not giving you quantified, but that cost saving will obviously affect us positively next year.

All right. Then a question on the price increases that you mentioned will be phased in, in Q4 and Q1. So which markets are you increasing prices on, or attempting to increase prices? And you mentioned that you are being under pressure from higher whole year costs. So is this just a measure to cover costs? Or could it also be a source of earnings growth?

Well, so the price increases will, similar to previous periods, mainly be applied within Denmark and in Sweden, the 2 biggest markets, but it will also be applied sporadically in Germany given the circumstances and the situation that we are facing there. It will, similar to previous periods, also be a very sort of diversified rollout plan, taking the different entities, markets, trade lanes and customers into account. So the percentages will range from low to high single-digit numbers in this case.

Understood. But is this just to cover cost, just to repeat.

No. I mean, basically, look, it's to ensure and safeguard capacity, right? So we do believe with the limited sort of elasticity of supply, if you may, we do believe that having capacity in case of a market rebound, if and when it occurs, will be crucial to ride the wave of a potential uptick. And in order to safeguard that capacity, we need to pay more than what is the case today. And in order to be able to do that, the price increases will be a necessity. So basically, it's a little bit of a reactive approach to ensure that we have the capacity and can continue to service customers if and when volumes will rebound. And that's when we do see the sort of more proactive benefits of the increases. But by the end of it all, we do believe it's about securing capacity.

Now we're going to take our next question. And it comes from the line of Emilie Fung from Barclays.

I just have 2 questions. So first one, following on from an earlier question on the full year '26 trends you see in Air & Ocean, could you discuss perhaps your view into the full year '26 Road dynamics? So what are the main moving parts you see with respect to the German recovery, pricing, the groupage TMS system? So that's the first one. And the second one is that some of your American competitors have been discussing AI and its impact on the forwarding sector. What's your view on this?

No. Thank you for the questions. I mean in terms of the expectations for 2026, as a starting point, we prefer to comment on that in connection with the publication of our guidance for that particular year. And given that we only guide on 2025 at the time of speaking, we will limit ourselves to the commentary on '26. From sort of a dynamic perspective, though, I do think that you can sort of -- you can split up the 2 divisions, in particular, the Road division into the full and partload activities, which is mainly sort of Nordic-based, and then sort of what is south of the border being the groupage activities.

And on the Air & Ocean side, similar to the impact in the third quarter, you can split it up to the general cargo activities and the project-based activities. And there's no doubt that the full and part load activity seems to be recovering quicker than what is the case for the groupage activities. But we do have hopes and expectations and plans for sort of idiosyncratic initiatives within Germany, in particular, on the groupage side to elevate performance, as Christian alluded to, both from a cost-out perspective, but also from a productivity perspective as we continue to migrate onto the new groupage platform.

On the Air & Ocean side, it looks challenging, in particular, as the capacity continues to come online within ocean freight, in particular. And on the project-based activity, we continue to be at the normalized level that we are seeing also this particular year. So I don't know if you have anything to add.

If I should give a shot on the AI?

Yes.

On the AI, we are also working on the AI and definitely, at the moment, on the back office part, we already have a lot of AI running a lot, but definitely have AI running. And we're also now on the front side looking at the AI on the booking platforms and we have already some projects that will go live within the next 3 months. So we will definitely also see an improvement on our productivity due to the AI. So this is definitely also a theme in our organization.

Now we will take our next question, and the question comes from the line of Dan Togo Jensen from DNB Carnegie.

Yes. Just a few left for me here. Maybe some color on how the Q3 progressed starting point and exit point, because I understand you're being cautious on Q4 due to seasonality, as you mentioned, et cetera. But it seems like you're underlining that things are muted at the moment. Did the exit of Q3, was it weaker than the entry, so to say? So you came out of Q3 on a more soft note? So that would be the first question.

Second question, maybe a bit on the business case for ITC now. I think you originally planned for around EUR 13 billion in EBIT, including synergies, et cetera. Where do you see that now basically? Has this halved potentially? Or where are we on the math here? And then maybe just some color on the DKK 19 million special items. I understand you are closing down the site here. How many FTEs are made redundant here, just to get some sort of understanding of the potential impact from this. I know there was a question alluding to this before, but maybe some color on maybe how many was made redundant in that connection.

If we look at the seasonality, then we saw, and that was maybe also in particular in Germany, that the holidays were a little later. So in average, I think when I asked Copilot, then the average was 1 week later that was moved into the August. So we were actually a little bit better in July than anticipated, and then August was weaker than anticipated. And I think September was spot on. So we didn't see a lot of movements within the quarter, except from the holidays. So it's not that we saw that we came out very strong or something like that. We came out strong, but we also anticipated that with the September being one of the strongest months within our Road business.

And on the ITC acquisition and business case, I mean, we did communicate in connection with closing of the transaction, I believe, at least in connection with signing of the transaction, an expectation of EUR 10.8 million as sort of the expected contribution on an IFRS basis to the group. I mean, right now, as also alluded to and communicated in the second quarter of the year, we are sort of fluctuating around the breakeven levels on a month-by-month basis. And that is the new baseline that we are working from and rebuilding from going forward.

Now if and when the market improves and the activity improves, in particular because of the cost structure and the fixed component of the cost structure, we do expect there to be a decent upside, but the EUR 10.8 million expected initially is quite a lot higher than a potential run rate of that particular part of the German business going forward.

And if you look at the special items, I mean, most of it came from Germany. And if you look at Schwieberdingen, where we closed the terminal, we still have some offices there. There, we spent, I think it was EUR 680,000, so a little over DKK 5 million on that for the quarter.

That is cost that they are exiting. Is that the way to understand it?

That was the cost of closing down the terminal activities. It's subleased and then you have the difference between what we are paying and then sublease, and then you have the termination of the people that we had to terminate.

Is there anything feeding through to Q4 on special items? Will there be a part left there?

Not in Schwieberdingen. That's, no.

Okay. But there would be special items in Q4. Is that how to understand this?

That is to be expected, yes.

[Operator Instructions] And now we're going to take our next question. Just give us a moment. And it comes from the line of Lars Heindorff from Nordea.

Just a few follow-ups. The first one is on ITC. Clearly, the most troublesome of those acquisitions that you made. Mathias, you alluded to a bit of upside if you can get these things right. So how are -- now with the closure of Schwieberdingen, how far are you into that restructuring process of ITC? And what I'm trying to get at here is risk of revenue loss going forward. I mean this is people business. Have you done the redundancies that you need to do? Are there risks if you need to do more that you will lose more revenue and hence, perhaps also with the share fixed cost that, that will pull in the other direction? Yes, that's the first one.

And then the second one is on M&A. I mean, we need to touch a little bit on that. Leverage still fairly high. I mean, do you feel comfortable now also, in light of the 2 recent acquisitions in Germany, to go out and make acquisitions either in Road or in sea and air (sic) Air & Ocean? And what's sort of your thoughts about the M&A part of the story?

On the ITC question, I mean, the biggest risk, set aside a deterioration of the market in general, is naturally the loss of customers going forward. So that's where all of our focus rests and where our efforts primarily are focused on. So we are, by and large, done with the reorganization from a sort of staff perspective, and all the new competencies that were needed in order to start preparing for and actually executing on the turnaround and the recovery of the ITC business is in place right now. That doesn't mean that it's a quick fix, and a big portion of the uptick from an earnings perspective will also be the introduction of the groupage system. So the risks prevail in terms of customer losses. but we are diligently working on meeting with and engaging with all of these customers. But also, as was the initial idea with the German acquisitions, also pushing for and promoting the services across Germany and not just within the Aua area of the country in this case.

From an M&A perspective, the focus remains on Germany for the time being for all of our colleagues within the Road & Logistics division. And from an Air & Ocean perspective, as we have communicated before, we are keen on and interested in doing Air & Ocean acquisitions subject to leverage allowing and subject to us staying below the 3x. However, as we also communicated, the market looks challenging as we move further into Q4 and into 2026. And this may give rise to sort of a bid-ask spread challenge similar to what we did experience in 2023, when the sellers were sort of extrapolating from COVID levels, and we were extrapolating from significantly lower levels from an earnings perspective. So that's kind of where we are right now. So we are in a bit of a waiting position on the M&A side, and we use the period, until any potential opportunity would materialize, to delever.

And just on the deleverage part, if you don't do -- let's assume that you're not going to do any M&A, how much further down do you need the leverage to come before you will start doing share buybacks?

That's a good question, and it's a case-by-case evaluation. We definitely need to come down further. And I guess we need to be trending in the lower end of the 2 to 3 range before we engage in share buybacks.

[Operator Instructions] Dear speakers, there are no further questions for today. I would now like to hand the conference over to Mathias Jensen-Vinstrup for any closing remarks.

Well, thank you, everybody, for the questions. Thank you for dialing in. And please do not hesitate to reach out to our Investor Relations Officer in case of any follow-up questions or meeting requests. Thank you, and have a nice day.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.