NTG Nordic Transport Group (Copenhagen:NTG) Q3 2026 Earnings Call

0:00 Welcome to the NTG Nordic Transport Group third quarter 2026 conference call and webcast. At this time all participants are in listen only mode. After the speaker's presentation there will be the question and answer session. To ask a question during the session you need to press star 1 1 on your telephone keypad. You will then hear an automatic message advising your hand is raised. To withdraw a question please press star 1 and 1 again. Please be advised that this conference has been recorded. I will now hand the word to the CEO of NTG Nordic Transport Group, Matthias Jensen-Winstrup. Please go ahead.

0:34 Thank you and welcome everybody to our Q3 2026 conference call and thank you for taking the time to listen in. My name is Matthias Jensen-Winstrup and I'm the Group CEO of NTG and I have Tineke Torpe, our Group CFO with me today. I'll spend the next 15 to 20 minutes taking you through our highlights and results for the third quarter of the year and by the end of the presentation we will wrap it up with questions from the participants. If we move to the next page we kindly ask you to read the forward-looking statement provided in the slide and if we move on to the agenda page you see the items that we will be going through today, including the highlights for the third quarter, a review of the financial performance of the group, followed by each of the two divisions, the financial highlights, as well as the outlook for 2026, and then also our newly introduced medium-term financial targets before we move to Q&A. If we move to the next page, to the Q3 2026 highlights, When we reflect on the quarter in its entirety, we're generally satisfied with our performance, particularly within the Nordic and Dutch road businesses, and not least within Anocean, where we continued the momentum of previous

2:04 quarters, which highlights the first benefits of the reorganizational initiatives and the strengthenings completed over the last two quarters since Carsten joined us. In the third quarter, Anocean delivered its strongest quarter this year and Rotor logistics continued to perform well despite a German market still lacking behind the rest of Europe. Based on the performance for the first nine months of the year and our current view on the market, we have upgraded our full year guidance on operating profit before special items to between 660 and 685 million Danish kroner from previously 625 to 650 million Danish kroner. So an uplift of the midpoint of around or of exactly 35 million Danish kroner. During the quarter, we also completed our 200 million Danish kroner share buyback program, which we announced back in March this year.

3:04 And finally, we are very pleased to launch our new medium term financial targets where we target a conversion ratio between 28 and 30% and the return on invested capital including goodwill and before tax of more than 20% within a three to five year horizon. And if we move to the next page and dive further into the numbers, Organic growth for the group was 15.5% during the quarter, which was primarily driven by higher freight rates and decent activity across both of our divisions. Currency effects had a positive impact of 0.4% during the quarter. The gross margin continued its downward trajectory because of higher pass-through revenue from increased freight rates across both divisions, And on the operating margin side, we continue to improve profitability driven by Nordic Road Business and improve performance within the Air and Ocean Division, which, as I mentioned before, was supported by slightly higher volumes and freight rates, but also the organizational changes and the restructuring initiatives that we've completed over the last couple of months. Altogether, these were the main drivers of the conversion ratio increase from 26.5% compared to 24.4% during the same period last year. Special items amounted to 10 million Danish kroner in the quarter and 34 million Danish kroner for the first nine

4:36 months of the year. And as we've communicated before, these primarily relate to the restructuring activities within the air and ocean division. For the full year, we expect special items in the range of 50 million Danish kroner, which reflects not only the ongoing reorganization of AnOcean, but also the restructuring of the German road and logistics activities in the wake of the efficiency improvements that are enabled by the rollout of the new transport management system. Move to the next slide and turn to the Road and Logistics Division. The division delivered another solid quarter and continued to perform well despite a mixed market backdrop. Organic EBIT growth was 9.4%, driven by performance across the Nordic region as well as a positive contribution from our Dutch road activities.

5:30 We look at the market, the market conditions remained broadly favorable outside of Germany as freight rates continue to be supported by elevated fuel prices, but also capacity constraints. In line with previous quarters, the German market remained challenging in the third quarter of the year, but we did make further progress on adapting our ways of working. and Terry Clyde Matlack. remains on supporting profitable growth, improving operational efficiency and strengthening the long-term competitiveness of the German business, but it will take time and it will require further actions, but we are slowly moving in the right direction.

6:36 If we flip to the next page, turning to Air and Ocean, it is fair to say that we are quite pleased with the performance of the division in the third quarter of the year. During the quarter, market conditions remained supportive, global container and air freight volumes continued to grow, and ocean freight rates eased somewhat due to increasing capacity, whereas air freight rates remained elevated, supported by geopolitical disruptions and higher fuel costs. From an operational perspective, we continue to execute on the priorities outlined earlier this year, which includes maintaining a dedicated commercial focus, strengthening collaboration across our network, signing additional key hires globally to further strengthen the organization, and last but not least, we continue to see increasing benefits of the actions that have already been taken earlier in the year, including the cost of initiatives, leadership changes, and the greater commercial collaboration within the division.

7:39 These efforts all together translated into a significant improvement in financial performance compared to the same period last year, with organic EBIT before special items up by two thirds, driven by higher activity and the organizational adjustments and a conversion ratio up by almost 10 percentage points, which represents the strongest level in 2026. As part of our growth ambitions, we also expanded our footprint in the US with the opening of two new offices in Nashville, Tennessee and Dallas, Texas, respectively. So overall, We are encouraged by the progress made during the quarter, and we continue to see positive momentum across the organization as we look to the future.

8:29 With those words, I will hand it over to Tinika for a detailed review of the financial highlights.

8:36 Thank you, Mathias. So if we look to the next page, then I would start with special items. As Mathias already mentioned, special items amounted to 10 million for the quarter and 34 million Danish kroner in the first nine months of the year. Those special items reflected the ongoing reorganization we have in our air and ocean division as well as the restructuring of our German road and logistics business. We continue to invest in these initiatives which are aimed to strengthening our performance, improving efficiency and supporting long-term profitability. which is also why we have adjusted our guidance on special items to 50 million for the full year 2026.

9:24 If we move on to the net financial expenses then our net financial expenses reached 29 million in the quarter which compared to 50 million in the same quarter last year. This reduction was predominantly driven by lower foreign exchange rates but also impacted by lower interest expenses. Overall, our net financial expenses remained at a level that is both in line with what we would consider as a normal quarterly run rate. If we then turn to our taxes, then the effective tax rates for the quarter reached 23.5%, which compared to 33% in the same period last year. This lower tax rate was positively impacted by an adjustment to our accrued taxes in the US, which were made in the quarter.

10:21 Finally, our free cash flow amounted to negative 30 million Danish kroner in the quarter. This development was predominantly driven by higher net working capital in our air and ocean division, which reflected the strong growth that we've seen. It was partly offset by a stronger EBITDA generated during the quarter and overall we remain satisfied with your underlying earnings development as well as the cash generation for our business. If we turn to the next slide, then when we look at our balance sheet and our key financial ratios, then as mentioned the net working capital increased during the quarter and ended at just Low of 200 million.

11:11 This development was driven by high activity and increased receivable in our air and ocean division. And again, reflecting the strong growth that we have delivered during the third quarter. Our levels ratio improved to 2.33 times 78, which compared to 2.77 in the same period last year. It was however slightly higher than in Q2 and was predominantly driven by the higher net working capital. The improvement compared to last year reflected the increase in our earnings over the last 12 months, partly offset by the higher net working capital and the completion of our share buyback program.

11:58 Speaking of the share buyback program, then we have completed this as planned and in total we have repurchased 200 million Danish kroner during 2026. Finally, looking at our return on invested capital, our return on invested capital before tax ended at 16.6% compared to 18.0% last year. This decrease reflected a higher invested capital base following the acquisitions completed in recent years, as well as the increased working capital investment and was partly offset by the continued improvement in earnings delivered in 2026. So if we turn to the next page.

12:50 Then, as Mathias already has mentioned, then based on the performance we have delivered in the first nine months of the year, we have upgraded our full year EBIT guidance to the range of 660 million to 685 million. The assumptions behind this upgrade guidance remain broadly unchanged. We continue to expect positive development across both divisions, supported by gradually improving market conditions. For our road and logistics division, freight rates are expected to remain around the current levels, while we in our air and ocean division expect freight rates to gradually decline as capacity returns to the market.

13:35 The macroeconomic and geopolitical uncertainty remains elevated, and we continue to monitor the developments closely. Furthermore, we have also increased our expectations to special items to 50 million dc, as already mentioned, and this is both the finalization of the reorganization in the air and ocean division in the fourth quarter, as well as restructuring of our German road and logistics business, which is accelerating in the last quarter of the year. Overall, we are pleased with the development during the quarter and the first nine months of the year, and we believe that NTG is well positioned heading into the last quarter.

14:24 Thank you, Tineke. So before we open the line for questions, Turning to the final page, we would like to briefly introduce our medium term financial targets as alluded to by the beginning of the presentation. The targets reflect our ambition to continue to improve profitability and returns across the group over the coming years as we are targeting a conversion ratio between 28 to 30% and a return on investment capital including goodwill and before tax of above 20%. The targets are based on organic developments and therefore exclude the impact of potential future acquisitions. But at the same time, Value Accretive M&A remains a key part of our strategy and it is expected to contribute in addition to these targets as we look to the future. We believe these targets reflect both the opportunities available to NCEG and the progress that we continue to make across the organization.

15:28 And we are looking much forward to discussing these targets as well as a number of these strategic priorities in more detail at our upcoming Capital Markets Day on the 18th of November, 2026. So with that, I'll hand it back to the moderator and open the floor for questions, please. Yes, of course. Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on the telephone keypad and wait for a name to be announced. To withdraw a question, please press star 11 again. Please stand by, we'll compile the Q&A. This will take a few moments. And now we're going to cover the first question.

16:14 and it comes to the line of Emily Fung from Barclays. Your line is open. Please ask your question.

16:19 Thank you very much. Thank you, Matthias and Tanika. I have three questions, please. The first one on road, maybe a few parts, but could you please just explain a bit more about how you see the Nordic volumes and rates trading through foreign 4Q and whether you still see share gains being part of the story? And also on road, if we look at the German performance, you speak about improvements towards the end of the quarter. Is this only due to operational efficiency gains And lastly, if we look at your guidance and what it implies for 4Q, what are the main variables you could give us some color on for where we end up, whether it be the bottom or the top end of the range? Thank you very much.

17:13 Thank you, Emily. So as to the Nordic rope business and what we see in terms of volumes and rates as we sort of move into or further into Q4, I would say over the course of the first nine months of the year, we've seen a shift in the split between volume and the price driven revenue growth. Whereas in the beginning of the year, we did see the majority being driven by volume growth, at least on a year-on-year basis. Whereas as we move to Q3, that has been shifted to a greater degree of price growth vis-à-vis volume growth. And we expect to see this trend continue as we move further into the fourth quarter. But from a rate perspective, I would say one of the main drivers of the rates has been the fuel, which continues to be at a somewhat high level from the capacity constraints.

18:28 So in terms of the German road business and whether the efforts and initiatives that are focused on operational efficiency gains or we see market improvements also, I would say the majority of the The non-financial progress that we are making relates to operational efficiency gains. In terms of market improvements, that is, I think, not something we see trickling down into our business yet. As to market share gains, we are yet to see the return on the investment that we are making in the commercial organization as we speak. On the air and ocean side, in terms of how much of the uptick is driven by market tailwinds vis-à-vis restructuring initiatives, I would say that it is a combination of both. The market has clearly been supportive, particularly in air freight, but we're also seeing benefits from a higher degree of intercompany trades, and we're also seeing a slightly

19:40 lower cost base compared to the same period last year.

19:46 Now as to the guidance variables, I would say that The biggest components are probably the activity in the Nordic region, including the development of the spot rates in particular as we move further into the quarter, and then also the development in the German activities, which in holiday months is notoriously low activity-wise, and given that groupage comes with a higher cost base, that is certainly not the best periods of the year for such a business. I hope that sort of addresses your questions, Emily.

20:28 Yes, thank you. And if I could just have one quick follow-up. You mentioned the capacity constraints in the Nordics. So how are you seeing that in terms of, you say it's to a lesser extent, but could it extend to next year? Or do you think that the whole air capacity could adjust quite quickly as we've seen in the past? Or whether, yeah.

20:46 Listen, I think over the last, A couple of years, probably, we have been aware of the fact that there is a lack of drivers, which is the main bottleneck from a capacity perspective. We are seeing more and more drivers retire and sort of the deficit compared to the demand projections in the market continue to increase over time. So I think it's a structural phenomenon that we are experiencing in Europe. We are not seeing any sort of mitigating actions from a political perspective, quite the contrary, I would say. So as at the time of speaking, I'd expect that to continue as we move into 27 and potentially also beyond, to be honest.

21:37 Of course, it's an equilibrium, right, between supply and demand. So I would say what we're seeing right now and the reason why capacity constraints are not sort of a huge driver of the rates compared to the fuel is that even though demand is healthy, I don't think we've seen an explosion or a boom as such. And so I do think that any increment to the demand from a positive perspective will trickle down into prices immediately more so than supply adjusting. Thank you. Now we're going to take our next question. And the question comes from Christian Goddiksen from SEB.

22:25 Your line is open. Please ask your question.

22:27 Yes, thank you. Just a couple of questions from my side initially. So first of all, in relation to your mid-term targets. I'm just wondering, so how, just to make sure, how to think about M&A in relation to this? So acquisitions, will they be supportive to the above 20% ROIC target post synergies and hence be the hurdle rate for acquisitions? That would be the first question.

22:53 So that is definitely the idea. I mean, by the end of the day, that target will include everything that has been in the books by more than 12 months. So that's how we report on M&A. So yes, we strive for a return on invested capital of the entire company of more than 20%, which over time will include M&A now. Do we think that within the first 12 months of a deal being closed that we'll be able to get there? That's not necessarily the case. But yes, over time, this is the return that we expect to generate also when we take M&A into account.

23:32 And then just also on the mid-term targets, the potential in the conversion ratios, you're just giving one number for the group part of it. So I guess, can you maybe comment a bit on the potential? I guess obviously the upside is greater than an ocean coming from the lowest level, but also based on the business mix or the way of the business, how they're structured, I think they should also have the highest potential. So just wondering if you could comment a bit on the conversion ratio between the two businesses, and then also whether there is a cap in the time period since it's a range target and not an open-ended target, or how to think of it.

24:13 So in all honesty, there is some elasticity baked into, in particular, the conversion ratio targets from two perspectives. One, we provide a range, and two, we don't do any explicit quantitative guidance on a divisional level and that's completely intentional given that a lot is happening at the company right now. There's a lot of moving parts and while they are all pointing in the right direction for the future, how quickly each initiative will evolve vis-a-vis the other, that is extremely difficult to say. Now if we sort of you know look at the 28 to 30 percent and reflect a little bit on where the two divisions are coming from. As you mentioned there's no doubt the road logistics division is coming from a much higher baseline and also from a baseline which you know in the future will continue to be experiencing a drag from the German activities.

25:06 Now of course we expect that drag to be smaller but it will be a drag so I would say from an upside perspective in particular compared to Q3 it is an ocean where we see The biggest upside potential. Now, by the end of the day, the conversion ratio of the group is a weighted average of the two divisions. So only an uptake in an ocean at the current size of the business will have a smaller impact than when we continue to grow that business over time, where hopefully the weighted average will be pulled in an upward direction. So I'll say, you know, the group activities, at least in Germany, it will be a drag on the conversion ratio and on the roadside, it will probably be slightly lower or, you know, slightly lower compared to compared to the range or the top end of the range and on the ocean that will that could potentially be above that range.

26:02 Okay. Okay. And then maybe just finally on the within the road part of the division, then how should we think about the mix, as you pointed out, a mix in relation to the group which versus the FTL or LTL business? Is that taken into consideration in the targets or is that as is? So it depends on also where you will grow organically in terms of when we are to evaluate you in the coming years, basically.

26:29 I mean, in terms of the organic growth, we sort of, you know, in line with pretty much every period since the IPO, we do believe, which is a firm sort of target that we want to grow, outgrow the market and the market being sort of Proxied by European GDP growth on road logistics and global GDP growth on an ocean. So that that sort of notion continues to prevail as to as to the growth now. In terms of the weight. I think it depends a little bit on how you measure it. Right. I mean, do you measure it by revenue, GDP, EBIT volumes, etc. But just looking at at EBIT, we do aim for Germany to compose a higher share of earnings over time that is unquestionable.

27:22 And is that baked into the target then, or is that, and maybe just to be sure, is groupage dilutive on a conversion ratio opposite, it comes with a higher gross margin, but is it dilutive on a conversion ratio versus FTL-LTL, or is it somewhat the same?

27:40 Well, if we talk about groupage Germany, there's no doubt that it's fairly dilutive to

27:45 the . I was more thinking about in the targets, how it's baked into the targets or on the overall, you know, as a structural basis, what should the conversion ratios be between the two segments within road?

27:58 Narrowing. I think that's the guidance that we're able to give, Christian.

28:03 That's the guidance. Okay, so that's still small, still lower for groupage, right? When you narrow, just to understand. Yeah, okay, perfect. Thank you, Mathias. Thank you. Now we're going to take our next question. And the question comes from the line of Ulrich Back from Danske Bank. Your line is open. Please ask your question.

28:25 Yes, hello, Mathias and Tineke. Also, a couple of questions from my side. I'll take them one by one. Firstly, I want to revisit the Germany performance, because as far as I can see, revenue declined 11% year-over-year in Q3, which is a weakening compared to H1, where it was broadly flat. And this is despite quite large positive impact from higher diesel prices in Q3 this year versus last year. So could you please just talk about what drove that weaker development in Q1, both versus last year, but also the deterioration compared to H1?

29:03 Yeah, so I think first and foremost, when sort of reflecting on the revenue development vis-à-vis the diesel price, there's a much greater lack in when we adjust the fuel surcharge in Germany compared to in particular the FTL, LTL business in the Nordic region. So it sort of came with a delayed effect. and that effect was further diminished by generally declining volumes, I would say. I think one of the biggest drivers of the development in Germany in the third quarter of the year was a very slow summer holiday period. I mean you know in the southern part of Germany that's particular in August and it took a little it took a little while I think you know probably two weeks into September before sort of the wheels started to turn again and as mentioned quite a few times you know with a higher fixed base a cost base that just materializes directly in Not only but also on the bottom line. I would say if we look now, there's no sort of significant downward spiraling trend on the shipment numbers. So I would say it was definitely a weak summer holiday period and then just a generally muted activity and an unsatisfying performance. It's not like a sort of convex downward spiral.

30:34 All right. But just to clarify, so the German revenue that we can see in your report, what is the split between road and logistics and air and ocean?

30:48 That's a good question. I don't have the exact split, but sort of on the top of my mind, and we can revert to you on this, I would say it's 2080. Understood.

31:02 This negative revenue growth, I acknowledge that it was due to a weak summer period, but when would you expect to return to positive growth given the rollout of new TMS systems and whatnot? So when would you expect to return to positive territory?

31:22 Well, I would say, you know, TMS can do a lot of good things. Unfortunately, it doesn't convince customers to come on board. That is a commercial effort that we have been investing in quite substantially, but only recently. So as I mentioned during the presentation, We are sort of planting a lot of seeds also in order to return to growth, not only on a like for like basis in terms of the customers that we have in the portfolio, but also actually starting to add new logos to that particular portfolio. But it is a long push and it will take time and that is also reflected in the medium term financial targets that we discussed.

32:02 Understood. And then a question on your capital allocation. Leverage was 2.3 times EBITDA at the end of Q3. The 200 million biobank program has concluded without you initiating a new one. So in this context, what leverage range are you comfortable with operating in for doing new M&A?

32:28 So you can see that As long as we have a levels ratio above 2, then we are focusing on de-levering, still allowing ourselves quite a bit of flexibility for doing M&A. We can go up to 3.5x if need be, if the right opportunity arises. When our levels ratio comes below 2x, Then we also start looking into doing share buybacks.

33:05 Okay, but is this a signal that you're not initiating a new one? Is that a signal that you want to pursue M&A more actively going forward?

33:17 I don't think it's going to necessarily be either or. At this point in time, we do not have any concrete plans of initiating a new share buyback, but we were not ruling out the possibility that it could occur. And we're definitely, as always, interested in doing M&A and are continuously looking for the right opportunities.

33:42 All right. Thank you. No further questions. Thank you. Now we're going to take our next question. And the next question comes from Peter Adelgun from Morgan Stanley. Your line is open. Please ask your question.

33:59 Peter Adelgun Thank you. Good morning. I think I've got three. The first one is just around Germany. You mentioned Germany improving towards quarter end. Was that broad-based customer demand or is it specific contract wins? And has it continued into Q4 on an increasing basis? Maybe just some color on that would be great. That's the first one.

34:24 Okay, so I mean, as I mentioned, there's no significant commercial momentum as at the time speaking. So sort of the rebound in volumes in the wake of the summer holiday period was most of the volumes returning to a normalized basis, more so than any sort of net increments.

34:47 Okay, helpful. And then the second question was just around air and ocean. You mentioned kind of a better intercompany collaboration. What does that mean commercially? Is it more freight retained within your network or is it cross-selling? Better Procurement, just maybe if you could give a bit more color around the nature of that collaboration.

35:11 Sure, it's a good question. It's actually in particular, I mean it's all three, in particular the first two, so we keep more freight within the network. So we keep more of the FOB charges on usually import collect shipments. And then it's a trade lane development, so selling across countries to customers from a sort of one-stop shop perspective. And then on the procurement side, I would say we did strengthen our procurement set up quite significantly, more decentralized than in the past. We are entertaining fairly interesting conversations with many of the steamship lines and also airlines, but that is yet to materialize in our results.

35:53 Okay, thank you. Helpful. And then just the last one from me was just on I mean, I'm conscious that you're growing off a bit of a disrupted earnings base. You could say there's a few tailwinds in there, like fuel driver shortages is perhaps more structural as things stand. Just in terms of where do you think this all nets off into 27 from a road perspective in terms of maybe fuel starting to come down, driver shortages will probably be ongoing, and then you have the German normalization as well. Is that kind of enough to kind of offset maybe the tailwinds you've seen in 26?

36:34 I would say if we keep everything else constant, then fuel returning to the pre-Middle East war will have a negative impact on our financial results. That is inevitable, I would say. So in order to mitigate such a potential normalization short term, we would need to continue what we're doing, addressing the cost base and improve performance in Germany. And to the extent that demand picks up, capacity remains sort of inelastic, that could potentially soften the blow, if you may, from a significantly declining fuel price, should that occur.

37:21 Thanks, Mateusz. And maybe just one extra one. Just on Germany, I understand that you still have things to do around the TMS. You also mentioned that with customers, what TMS won't do is just put customers into the system automatically, right? And I think one of your competitors is also talking around you know, trying to rebuild volumes on their groupage business as well. Maybe just practically, could you just speak around, you know, what are some of the things you're doing or can do better to kind of increase that commercial viability for your groupage business? That would just be interesting.

38:02 Yeah, no, it's a good question also. So, and it's very similar to what we're doing on AnOcean, I would say, you know, get on the road, go out visit the customers and be intelligent in which customers that we go to visit so our group is set up compared to sort of the rest of the pack or at least the larger part of the pack is a more flexible group is set up so it's not overly sort of in the sense that we don't take sort of ugly goods as we refer to them or goods that comes in different forms and shapes or where there's different service requirements. what are different requirements in terms of flexibility that wouldn't necessarily fit into a more automated and less sort of human touch setting. So that is really how we will do it. That's how we did it in the past, not only in the acquired entities, but also in the legacy and GG entities, focusing on the customers with a higher touch need, the customers with the different types of goods, and then and then go out there to sell it.

39:14 That is the strategy and so it's a little bit back to basics really compared to where we were and it's completely similar to what we are doing on an ocean right now. But in order to do that, we need the people and we need the people to be on the road and that's what we're investing in as we speak.

39:33 Thank you, Mattias, very clear. Thank you, Pia. Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. Now we're going to take our next question. And the question comes line of Lars Heindorf from Nordea. Your line is open, please ask your question.

39:57 Yes, morning. Thank you for taking my questions as well. The first one is on the working capital. Tinuke, you point out it's quite a bit of a tie-up here in the third quarter. Maybe you could put some more words on it. Is this solely caused by the restructuring and the development in the ANC, or is there something in road as well, and also maybe a sort of a path towards normalization of the working capital? Thanks. That's the first one.

40:25 Yes. As mentioned, it is predominantly in our air and ocean business in the US that we have seen an uptake in the receivables. We have had a small incline in our DSO of a couple of days as well, but it is the activity growth that we have seen that's driving it. We also have an impact from our road and logistics business in Germany with the rollout of Translogica where we, as mentioned in connection with the half year, we saw that there were some delays in the invoicing. Those have partially been picked up, but there is still a drag that we expect will be burned in the fourth quarter. And you can say following up diligently to ensure that that will happen.

41:19 When it comes to the normalization of our networking capital, then we do expect it to move down towards zero again, which has been, you can say historically, the level where we've been able to balance our trade receivables with our trade payables. However, the dynamics of the air and ocean division are slightly different from rodent logistics and therefore It might be that over time, as AnOcean grows, that we will start seeing it slightly coming up from zero.

41:53 But is it doable to keep it around zero, given that the growth structure that you are about to embark on, and which I see the sense that you were aiming for in AnOcean, which typically ties up considerably more network and capital compared to the road business?

42:08 As mentioned, no, it's not going to be around zero. What we expect will happen is that there will be an increase from an ocean on the receivable side. But at the same time, we are also working on strengthening our procurement, which will lead to credit terms being improved and at least partially be able to offset the unfavorable impact from increased receivables.

42:38 Okay, thank you. And then on the rollout of Translogica, we've been talking about it earlier. If I recall correctly, you're done with smart insurance and in the process of doing it in ITC, is that correct?

42:57 Sort of 90% correct, I would say. I think as you can allude to, there's still tweaks and bugs to be fixed in Stuttgart. But correct, we are working in the Ruhr area to go live on Transloca again. We expect to do that sometime during the first quarter of 2027.

43:17 So how much of your volumes are now in Germany, is now on Transstratica?

43:29 That is a good question, I would say. Around one-third, a little bit more on translogic as we speak. Moving up to around about a half, a little bit more than a half once we go live in the whole area.

43:50 Okay, and the aim is just to get it clear because I can't recall those numbers. Is the aim 100% or? How should we think about this?

43:59 Yes, the aim is 100%.

44:01 Okay. And timeframe for the remaining 50 when you're done with the rural district?

44:08 That depends on the exact go-live date in Q1, as well as the sort of seamlessness of the hypercare period.

44:22 Okay. And then on roads, thanks for the insight into the split between volumes and prices. Obviously, DC Floater moves quite a bit. Now we're getting towards the end of the year. Typically, that's the contract season and you start to reach out to customers and talk with them about the contract for the coming years. Maybe, I don't know if you can give any kind of insight. It was also earlier in one of the earlier questions I alluded to that you have a A large competitor which is struggling a little bit. Have you seen any price pressure in the market?

45:08 These high spot prices, could that perhaps lead to an increase in contracts for next year? Or how should we think about the development in terms of the contract rates into next year?

45:21 I mean, I would say most prices in a contract are excluding fuel, right? And then there's a separate fuel mechanism. So I would say trying to lock in rates at the current fuel levels or not locking in rates wouldn't really matter because there's a variable adjustment mechanism for that. So I think the dynamic that plays out right now is more customers looking into on the base rate, if you may, disregarding fuel, would it be favorable now to lock that in, i.e. go in a tender for a year or two years, or would it be beneficial to sort of wait and see how the market will pan out and while there's definitely different decisions as to the matter, the underlying structural sort of lack of drivers I think is sort of, you know, is seen as most customers as a good time to actually start engaging in tender discussions, at least in Q4 anyway.

46:21 And then as to the price pressure, I would say, you know, when capacity is short, The price pressure is more upwards than downwards. That's sort of the preliminary intelligence that we have from the market as we speak.

46:38 Thank you. Thank you. Dear participants, just a quick reminder, if you wish to ask a question, please press star 11 on your telephone keypad. Dear speakers, we'll just give a moment for our participants. Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Matthias Janssen-Winstrup, for any closing remarks.

47:09 Perfect. Thank you very much for taking the time to join the conference call today. Thank you for the questions, and we look forward to seeing you on the road. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Have a nice day.