NTG Nordic Transport Group AS

CSE:NTG

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

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

Thank you, and welcome, everybody, to our Q1 2025 conference call, and thank you for dialing in. My name is Mathias Vinstrup, and I'm the Group CEO of NTG. And together with me today, I have Christian Jakobsen, our Group CFO. We'll spend the next 20 to 30 minutes taking you through our highlights for the first quarter of 2025, an update on our recent acquisitions and an update on the outlook for the rest of 2025 and finish off with answering questions from the audience.

On Page #2, we kindly ask you to read the forward-looking statement provided on the page.

And on Page #3, you see the agenda for the conference call, which includes the Q1 highlights, a short update on recent acquisitions, a review of the financial performance of the group, followed by the 2 divisions, a presentation of other key figures and our outlook for 2025. And by the end of the presentation, the line will be open to questions from the audience.

On Slide #4, you'll find the highlights for the first quarter of the year, which was a quarter marked by 2 different realities. If we start out on a positive note, our organization made significant progress growing our EBIT organically in a challenging and volatile market environment. Furthermore, the signing and closing of 2 acquisitions, we secured a strong asset in DTK, and we strengthened our U.K. presence with the acquisition of EDS and Rolls Freight. I'm pleased to see that our existing NTG organization is performing well despite a market that continues to be impacted by headwinds. At the same time, the other reality is that, SCHMALZ+SCHON and ITC Logistics are struggling due to a very weak German market.

As shown on the slide, their EBIT contribution combined with Freightzen, Schenker Italiana and Thortrans is "only DKK 5 million," which is significantly lower than we have anticipated. Please, however, note that the impact of M&A is roughly tripled without the allocation of central costs. But in any event, we are highly dissatisfied with the result, and we have already initiated several initiatives to accelerate the integration and further cost-saving initiatives to mitigate the situation.

Lastly, due to the uncertainty caused by tariffs in the U.S. and the performance in Germany, we have updated our full year guidance for 2025 to between DKK 560 million and DKK 630 million on an adjusted EBIT basis. Christian will get back to this later in the presentation.

And on the next page, we briefly touch upon the latest acquisition. And on the left-hand side of the page, you see the most recent acquisitions, the acquisitions of DTK and EDS and Rolls Freight. DTK is a Danish-based road and logistics provider, specialized in ambient and temperature-controlled full and part load round-trip operations, operating from 8 locations across Denmark, Germany, Sweden and the U.K. and DTK comprises approximately 115 white-collar employees and approximately 80 blue-collar employees. The acquisition of DTK is expected to contribute approximately DKK 96 million to NTG's consolidated adjusted EBIT over the next 12 months on an IFRS basis, excluding allocation of central costs. In addition, and as communicated with signing of the transaction, we continue to expect annual synergies of around DKK 24 million once DTK is fully integrated, which we expect to be finalized within the next 12 months.

The acquisition of DTK will strengthen our position in the Nordics by expanding our scale and further enhancing our capabilities, in particular, in the temperature-controlled segment. Just like DTK -- just like NTG, sorry, DTK adopts a decentralized business model with a strong focus on local empowerment, which is why DTK's general cargo activities and NTG Road in Denmark will join forces across certain locations, which is also expected to drive additional scale and efficiencies across our combined platform in the Nordic region. DTK is currently a leader within temperature-controlled transportation, and they will continue to operate independently going forward, supported by the platform and scale of NTG in the Nordic region. To ensure that we keep the necessary expertise, selected employees have reinvested in their temperature-controlled activities and joined our ring-the-bell model.

On the right-hand side, quickly, we have the smaller bolt-on acquisition in the U.K. of EDS and Rolls Freight. This acquisition will bolster our European road freight and U.K. services, focusing on, in this case, the traffic to and from Ireland. We are pleased to welcome all of our new colleagues into the NTG family, and we look forward to bringing them along on the journey going forward.

With those words, I will hand it over to Christian, who will take you through the [indiscernible] results for the first quarter of 2025. Please go ahead, Christian.

Thank you, Mathias. We continue to see a difficult road market, especially due to a weak German market, which impact the surrounding markets, for example, Poland, which has a large exposure to Germany. The macroeconomic developments are uncertain, impacted by threats of tariffs and fluctuation in consumer spending.

The Road & Logistics division successfully implemented price increases in some key markets, while freight rates in challenging markets such as Germany remains flat due to the current market conditions. The Air & Ocean division delivered an increase in transported volumes compared to last year. The growth is driven by organic growth, start-up activities and tailwind from front-loading before the implementation of tariffs. The gross margin was positively affected by slightly higher rates in certain road markets and the product mix from the 2 German acquisitions. And lastly, the operating margin reflects current market conditions and lower margins from newly acquired companies.

And if we flip to the next page, we see the Road & Logistics division. That continues to navigate in a highly competitive market with low growth and ongoing pressure on freight rates. Throughout the quarter, volumes have remained muted and the seasonal spring pickup in volumes did not materialize as expected. The announced rate adjustments from October 2024 have been implemented in selected Nordic markets and have positively influenced the gross margin during the quarter. The financial performance for the quarter was further strange by challenging business environment in Sweden, Poland and Germany, although growth showed a slight positive figures during March. Denmark was up and the Netherlands have really shown positive momentum.

Net revenue increased by 25% for the quarter. Organic growth was 2.3% driven by volume growth in our key markets. Acquired growth was 22.4%, primarily from the SCHMALZ+SCHON and ITC Logistics acquisitions. The gross margin increase was primarily driven by the integration of SCHMALZ+SCHON and ITC Logistics due to the higher group's exposure produces higher gross margin. The lower operating margin was mainly driven by higher cost base related to the integration of SCHMALZ+SCHON and ITC.

And if we flip to Page 8, you see the Air & Ocean division that delivered net organic revenue growth, supported by slightly higher freight rates on certain trade lanes compared to the same period last year. The market has seen growth despite increased volatility and uncertainty related to the announced U.S. tariffs during the last part of the quarter. The uncertainty have led to some front-loading in Q1 '25, benefiting volume growth in both Air & Ocean markets. Ocean freight rates declined during the quarter and are expected to continue to decline as more capacity enters the market. The U.S. tariffs did not have a big impact on the Q1 results, but the situation has caused disruption here in Q2. It goes without saying that we are monitoring the situation and will adjust our organization accordingly.

The project division delivered another good quarter in line with performance last year. But given the volatility of the project business, we expect to see a normalization in projects in the coming quarters. The improvement in EBIT compared to last year is partly due to the successful turnaround in Germany and continued progress in the U.S. start-ups. Also, the results were driven by a general enhanced performance across the division, especially in Germany and Sweden. The organic cost base grew slightly compared to Q1 2024 as we spend resources on strengthening the organization and intensifying sales efforts.

And if you flip to the next page, you see a few highlights on key figures. The net working capital was negatively affected by seasonality and the integration of the 2 German acquisitions, which historically had higher net working capital requirements. The ongoing high net working capital in the U.S. remains a focus areas, but we have seen some positive effects compared to previous quarters. The development in adjusted free cash flow was mainly driven by the increase in net working capital. The leverage ratio, including the effects of IFRS 16 was 2.6x EBITDA before special items and will be impacted by the acquisition of DTK. We expect that we will be close to 3x on short-term.

And then if we flip to the next page, you see the full year outlook, which we updated on the 7th of May with the completion of the acquisition of DTK behind, and I think it's fair to say that it was below some -- our expectations behind this change, there are some points that I would like to make clear. The recent announced tariffs from the United States have impacted global trade more than expected when we communicated the original guidance. On the largest trade route from China to the U.S., we have been significantly impacted by the number of shipments since tariffs was introduced. Organically, we are doing well and have outperformed our peers in European -- on the European road freight market. So our core road organization is delivering. Our Air & Ocean division has also delivered as expected despite being more sensitive to these volatile conditions. As Mathias mentioned, with the closing of DTK, which we expect to perform very well within the NTG and the business remains intact, we expect that will contribute with around DKK 75 million to our full year EBIT.

The activity levels in our recent acquisitions, SCHMALZ+SCHON and ITC Logistics have been below our expectations. This is primarily due to a decline in recurring business, softer demand and continued macroeconomic pressures in the key European markets. In particular, the German market continues to face significant headwinds, making it difficult to recover the volumes original forecast at the time of the acquisition. This is not good enough, and we are doing what we can to adjust and improve the situation. But based on these points, we have updated our guidance to a range of DKK 560 million to DKK 630 million for the full year of 2025.

And now, I give the word back to Mathias.

Thank you. And please go ahead with opening the line for questions.

[Operator Instructions] And now we're going to take our first question. And the question comes from the line of Ulrik Bak from Danske Bank.

Mathias and Christian, a couple of questions from my side. Just on your updated guidance, if you adjust for DTK, the contribution from that, it is a significant reduction of the underlying guidance. Can you perhaps give a bit of a flavor on the size of these building blocks that Christian, you were mentioning here at the end? So how much -- so organic growth seems not to be the issue, but how much of the underlying decline in the guidance was driven by the recent acquisitions and how much from the U.S.-China tariffs in Air & Ocean?

Ulrik, you can sort of do the math on the acquisition that contributed with DKK 5 million. And as we have said in our statements that we expected significantly more. So you can do the math yourself. And we definitely see that the main part comes from the acquisition, but also some will come from, in particular, the situation with the tariffs in the U.S.

Okay. So -- and the upper and the lower end of the guidance range, if you could just frame what the upper end is a reflection of versus the low end and where the high swing factors are?

The uncertainty that we are facing at the moment is really high. I mean, every time we see figures coming both for consignments and for shipments and for EBIT and turnover, we are -- we really sit and wait and sitting in the box and have no visibility at the current moment. So therefore, we keep the spread. Of course, if Trump is backing down and we are seeing that Ukraine war is stopping and so on, then we will probably be in the high end. And if it continues and so on, then there's a risk that the market will freeze even more than what we are. So -- but please, our own estimate is, as always, around the middle of the midpoint of our guidance. And I think we should -- this is what you should be looking at.

Understood. And then in terms of SCHMALZ+SCHON and ITC, as part of the transactions, you have earn-out agreements of a combined value of DKK 64 million. So are these earn-outs, are they related to the financial performance over the coming years? And if so, could we see you reverse some of these earn-outs as we saw with the AGL transaction as well?

So the earn-out for SCHMALZ+SCHON is related to a few or 1 bigger customer and the current trading of this customer. And the downtick we've seen in activity levels is also driven by this particular customer. Hence, there is a link in that respect. On ITC, the earn-out is linked to a group of customers where we have also experienced a significant down trade, and to a certain extent, loss of activities. And so, while the situation is still evolving, the earn-outs are linked to some of the bigger drivers of the down trade.

And the question comes from the line of Lars Heindorff from Nordea.

Also a couple of questions on ITC and SCHMALZ+SCHON, if I may, for you, Mathias. The -- back in August when you acquired SCHMALZ+SCHON, you said that there will be no synergies in relation with that. Are there -- I don't -- can you give a status on what kind of restructuring cost there will be assuming that given the revised earnings outlook that you are doing something and maybe also something that you haven't planned originally. So what have changed in terms of those plans? And what would be the restructuring costs related to those? That's my first one.

No, it's a fair question. And I mean, as at the signing of the 2 deals, nothing indicated a performance at the levels that we are looking into at the moment. And this includes the historical financial performance, the current trading and the trend that we were looking into as at the signing of the deals. For ITC, they have delivered consistent results in the range of what was communicated to the market for at least 3 consecutive years straight and any run rate analysis we did together with our advisers seem to support this notion.

SCHMALZ+SCHON a significant normalization of the results started in the second half of 2023 and stabilized at new lower levels as communicated to the market until signing, as well as closing of this deal. So what really surprised us, in particular for SCHMALZ+SCHON is based on everything that we have seen and know as at the time of speaking, based on a decline in activity levels. So we are not aware of any significant losses in any shape or form. But given the group it nature of the business, the cost structure is less flexible than we experienced in the Nordic region, which is heavily exposed to the full and part load side of the business and a roughly 10% reduction in activity, which is what we experienced on a year-on-year basis in Q1 takes a huge toll on profitability. But the business is there, and that's important to reiterate, but it's much slower than we anticipated. We still have a skilled team and a capable team down there and our ambitions for the future platform in Germany are intact despite this significant setback.

For ITC, the development is similar to SCHMALZ+SCHON with the addition of a loss of a few larger customers, which accelerated the decline in profitability and nothing indicated during our process and during our post-mortem investigations that this, in any event, was made available during the rather lengthy process that we went through.

So to your question, Lars, and based on this backdrop, what are we doing right now? Well, we are accelerating the integration. And you may ask why accelerate now and not sooner. And I think there's 3 or 4 main reasons for this. First and foremost, the business case and the ambition when we did the acquisitions in Germany was to acquire 2 well-run, very profitable, at least for ITC and profitable entities for SCHMALZ+SCHON. And we wanted to make sure that there was stability immediately after the closing of the deals as we were and are still investigating and identifying the new technical or the new digital platform, the TMS for group activities that will be applied globally within NTG in the future.

Now, this stability did not materialize, and we are in a situation of a very high degree of unstability, as also Christian alluded to. And we cannot afford the luxury of waiting any longer with accelerating these integration efforts. Again, the TMS system is a bit of a hold up, and we wanted to avoid migrating from one to another TMS then to potentially identify a third run rate platform for the future. This will also be accelerated now. And then we onboarded a new CEO in Germany on the 1st of May. We have added a few more resources to the organization, and we are looking to strengthen that organization to increase the bandwidth at a quicker pace in order to turn the situation around.

And then we're looking into cost savings in all areas, in particular, in the areas affected by the loss of the larger customers. This was not part of the initial plan, but we are, obviously, and of course, looking at calibrating the cost base, which is currently overdimensioned to the activity levels in order to safeguard as much of the profitability as we can going forward.

So from a special items or integration cost perspective, there will, over the coming months, be higher integration costs than initially anticipated in the form of cost-saving initiatives, which also includes a review and adjustment of the staff situation. So there will be a higher cost in the near-term. But the magnitude of these is still being analyzed before we are ready to communicate anything.

Okay. But can you then say maybe more because you just remind me, what was the planned restructuring cost at the time of the announcement and closing?

I think it was close to EUR 2 million in ITC and around EUR 1 million in SCHMALZ+SCHON. But no, I just don't have the figures in front of me.

Okay. And then I'm sorry, I'm just stuck with SCHMALZ+SCHON because you paid DKK 600 million roughly for this company, including IFRS 16 debt, which corresponded to around 14x EBITDA at the time of the closing. Now, we're looking at something which is, I mean, considerably higher given the earnings outlook, which means that this is massively earnings dilutive. And again, what is actually the strategic rationale to acquiring a company at a multiple which is higher at that point of time than your own that you were trading at with no synergies? I know you said it's been performing okay for the past 3 years. And then a cost base which is unflexible and a dependency on 1 big customer.

First and foremost, the multiple on a GAAP basis was significantly different, though we recognize the implications of the IFRS 16 obligations. Now, the intention of the deals in Germany was to build a German platform where we have had activities of limited sizes in the future. And I want to reiterate once again that the quality of the SCHMALZ+SCHON business, in particular, remains the same, but the activity levels have significantly surprised us on the downside. But the idea was and continues to be to establish a unified German platform that we can build on organically and once this settles down and not any time before, so far out, a more synergy-driven M&A case also in Germany. But it is...

But, Mathias, you said there were no synergies at the time of the closing.

Yes, exactly. So, Lars, synergies are triggered by existing platforms. And in this particular market, we didn't have an existing platform in the first place. So now we need a platform. We need a unified team, and we need the organizational bandwidth in order to harvest synergies in the future. Now, what we are talking about here are more cost savings triggered by integrations and mergers and co-locations and staff reductions and cost reductions in general, more than any other kind of synergies. And most of the cost initiatives are triggered by the current situation, while some, in particular, in regards to ITC and the combination with our existing entities in the rural area, they are triggered by the continued ambition to co-locate and optimize both the joint platforms in that particular area of Germany.

And the revenue loss and the activity loss that you talk about in both of these 2 companies because I think if I recall correctly, then the biggest client in SCHMALZ+SCHON accounted for roughly 1/3, something like that, maybe 30%. Is that something that you have lost to other competitors? Or is it something that you believe that you can regain? Or what's the situation there?

No. As mentioned before, we are not aware of any customer losses in SCHMALZ+SCHON, and we do believe that over time, as activity picks up and hopefully, as the current situation stabilizes, we will be able to regain the lost momentum. We have nothing to indicate that this would not be an opportunity and the customer relationships are still there.

In terms of the discontinued business, if you may, that is 1 or less than 2 handfuls of customers within the ITC environment.

And just to sort of, again, maybe a follow-up on Ulrik's previous questions that what should we expect that those 2 companies will contribute with for the full year of '25?

Lars, that's too soon for us to say. We are working diligently on, first and foremost, mitigating the current situation, adapting the cost base so that it's dimensioned to the current activity levels. And that's the main focus area right now. So, as to the guidance, Christian can get back to the assumptions included in this, but we are heavily focused on turning this situation around the quicker, the better.

Yes, I understand that. Apparently, it must have come very quickly because it's less than 2 months ago that you were out with your Q4 statement, the full year guidance and then you downgrade now. But this is all related to those 2 companies. I'm just a little bit surprised that since it's related to those 2 companies that you are not prepared to, at least sort of give a range or indication about what kind of earnings levels you expect from those?

Fully understood. But as you said, this came very quickly, and we are still embracing the situation and dealing with it.

And the question comes from the line of Dan Togo Jensen from Carnegie Bank.

Just trying to think a bit ahead here, how does this -- your experience now with these 2 acquisitions, how will this impact your appetite for future acquisitions? And also, with the significantly reduced earnings potential now, how does that impact your leverage opportunities and hence, also your EBIT DKK 1 billion '27 target? And in hindsight, what could you have done different in the due diligence? I'm just thinking, how do you reflect on this in order to avoid a similar situation going forward because I expect that M&A is still very much part of your strategy going forward?

It's a fair question to ask, and it goes without saying there's quite a lot of soul searching and reflections taking place these days in addition to delivering on the action plans that are in place and are being built at the moment. The situation in Germany has caught us by a big surprise. And given the circumstances, there's no doubt that the target by the end of 2027 is even more ambitious than when it was introduced, and we'll do everything we can organically to achieve it. And we continue to assess the likelihood of the target, but it remains a target and an ambition of ours.

I think it's important also to mention in this perspective that in order to get to the target, we will not be pursuing additional M&A compared to the situation prior to last Wednesday. And if anything, M&A activities will need to decline significantly until we've seen a stabilization. And please also keep in mind that we don't have neither the operational nor financial capacity to use M&A to cover this gap even if it was on the table, which it is not I reiterate. But you're fully correct. There's a lot of reflections taking place these days. There's a lot of processes and due diligence work being revisited. We continue based on internal and external evaluations to be under the impression that the process was to the same level of granularity as before. And keep in mind, this level of granularity has been significantly increasing over the past few years. And we are also under the impression that the terms and conditions upon which the deals were made are market standard, and to a certain extent and in certain areas, more buyer than seller-friendly.

But as I mean, a significant driver of the current development is caused by the continued declines in activity, which is one way or the other, inherently tricky to time every time, but 2 larger deals in a rather immature market will not occur again anytime soon without a significantly larger organization being mobilized well ahead of signing, both centrally and decentrally. And the current situation also forces us to reflect on the application of almost 100% buyouts. Yes, there were earn-outs, but one way or the other, the earn-outs were of limited size, especially in territories that are characterized by larger cultural and technical differences compared to our home turf, if you may. And these reflections, if we mirror this on to DTK are to a much higher extent satisfied with no cultural barriers with an extensive organizational bandwidth and with a larger reinvestment by the key employees in the temperature controlled side of the business and the remaining ambient part of the business will be integrated into Road A/S. And as we mentioned, that process and the expectations remain unchanged on all sides.

So there's definitely -- that's -- we are still investigating the processes that led up to the signing of the deals. We are reflecting on how to derisk similar situations in the future significantly, both from a size perspective and also from an incentive perspective. And the entire organizational bandwidth is being evaluated with a view to doing everything we can to avoid ending up in similar situations in the future. But for the time being, focus is on Germany, focus is on mitigating the current situation and M&A will not be on the table before we are well progressed in Germany and before the leverage ratio continues to support this notion. But M&A will be long-term, still a key part of the business model of NTG.

I believe and you still have your covenants to take leverage to around 3.5x in the case of new acquisitions that I understand is not around the corner right now, but just to understand the framework, the financial framework.

You're right. We have the covenants that says that we can go up to 3x EBITDA on the acquisitions with 1 year. And then we are also including the EBITDA from the target companies in that. So still, there's definitely some headroom for acquisitions, but it will probably not be in road anytime near. And Ocean, we will also be very cautious in the coming period. We will not go out and test the 3.5x.

And then just maybe on the project business that you mentioned has a good quarter here, just to understand the impact in the quarter. Is it up sequentially? Is it up year-over-year? Or is it just maintaining the level, so to say?

It's maintaining the level. But as I also said that we had some very good quarters in Q2 and Q3 and Q4 last year. And therefore, we might see it coming a little bit down, but that's still -- we have to see what will come. But we definitely had some good quarters last year.

And just a final one here. Included in the guidance, how much of the, so to say, downgrade is relating to restructuring costs? Anything included here? Or you're talking about, Mathias, and an elevated cost base at the moment. So anything that we can consider one-off in this respect?

No. As always, when we buy a new company, we do the integration within 1 year and these costs will be booked as special items. And after that, then it's a recurring business within NTG and is booked as normally. But we don't have any -- so we don't have any effects of those in our guidance.

And then just a final one on the cash flow. The very high net working capital, how should we see that? I guess, it's also a reflection of what's going on in Germany at the moment. So how should we see that develop in coming quarters? Will there be a release of cash? Or is that level more or less maintained?

There will be a release of cash, but I can't tell you how much. Please remember that we have around DKK 95 million coming from the 2 German acquisitions, but also the Thortrans acquisitions, and we will do our best to lower that as well. So -- and then you have the normal seasonality that with all the activity in March and in particular, with the high activity in Air & Ocean in March, then you had -- we were funding some cash in the Air & Ocean as well.

[Operator Instructions] And the question comes from the line of Kristian Godiksen from SEB.

Just a couple of questions from my side. First of all, I was just wondering on your view on any volume gains from the DB Schenker acquisition, whether there's anything to update on that, both in terms of -- especially due to volume, but also maybe an update on potential employees?

And then the second question, wondering on the -- what is included in the guidance and if there are any upside potential in the guidance based on the current tariff situation being on pause between -- or at least has been lowered between China and the U.S. And, I guess, that was not included when you did the downgrade of the guidance last week.

Those are the 2 main questions, but obviously, a lot of questions regarding the acquisition. Maybe just 1 follow-up on the acquisition part. When would you expect to be comfortable to add M&A to the groupage business to get more scale in Germany? Any -- are there any time horizon on that? Those would be the 3 questions.

No. And to address the latter question first, not anytime soon. And we need to see how the situation evolves before we are ready to even consider doing M&A in Germany for the time being and also within the Road & Logistics division. So that is out in time and not a second before we have the current situation under control.

As to the big merger you referred to as the first question, I mean, we have seen certain but limited customer wins, and we are actively searching for good candidates to join in particular, our German organization. But right now, everything is being absorbed by the muted activity levels that we experienced.

And then on the...

If I may add on the groupage, we already said when we did the acquisition of ITC that we wouldn't do any groupage in Germany or whatever in the near future because we need to design our transport management system, the new TMS system, which we just been through a lot of analysis and are close to picking the one we want to go with. So we have already said that it will not be anytime soon, and it will probably take a year before we have the full setup of our future group set up with all the integrations and everything and the optimizations. So that we already communicated. And yes, so there's nothing new in that one.

On the guidance part on the tariffs?

Yes, of course. But, I mean, we put in -- he changes his mind each week, right? So we put in a conservative look at that, but we were not that conservative that the world would go under. So we put in something which we reflected that was at the time a little optimistic and now it's probably a little conservative. But, I mean, everything changes and nobody can really interpret what is going on.

Okay. Okay. And then just finally, just a follow-up on DB Schenker part, as you say, now limited wins and currently offset. But do you expect that to -- I guess, it's still very new that they have -- that the deal has been closed. So, I guess, clients will also in the coming months, consider what to do on their setup. So is this something that is baked into the top end of the guidance? Or is it not included in the guidance? And which kind of upsides do you see?

No, it's not included in the guidance. But as previously communicated during this call also, the platforms that we acquired in Germany are there and the ambition for the future of Germany remains intact, although postponed in time given the situation that we are facing. So we do have a lot of good business activities. We do have a lot of good employees, but everything is being overshadowed by the current activity levels and then the loss of these certain customers. So we do continue to see opportunities also to gain market shares, at least post any stabilization in Germany, but it's not something that we baked into our guidance.

[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.

Thank you, everybody, for your questions and for dialing in. And I'm sure we'll get a chance to speak further in the coming days and weeks. Thank you.

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