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

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

Thank you, and welcome, everybody, to our Q2 2025 conference call, and thank you for dialing in. My name is Mathias Jensen-Vinstrup, and I’m the Group CEO of NTG. And together with me today, I have Christian Jakobsen, our Group CFO.Â

We move on to the next page. We kindly ask you to read the forward-looking statements provided in the slide. And moving on, you see the agenda for the conference call today. And we’ll spend the next 20, 30 minutes taking you through our highlights for the second quarter of 2025, an update on the recent acquisitions, and then a review of the financial performance of the group, followed by the 2 divisions, a presentation of other key figures, the outlook for the rest of the year. And finally, we will open the line for Q&A.Â

Move on to the next slide, you see the Q2 2025 highlights. But before we get started with the numbers, I want to highlight the acquisition of DTK, which we completed on the 7th of May. DTK is composed of 2 distinct divisions, one being the general cargo business and the other one being the temperature control business. Already from the 1st of June, we had integrated DTK’s general cargo business into our operating platform and realized the synergies we’ve identified from the outset. This thanks to the outstanding performance of our Danish and Swedish colleagues, in particular, and also the central teams supporting them in this achievement.Â

Turning to our financial performance. Adjusted EBIT increased by 11.5% compared to Q2 last year, when excluding the one-off earn-out settlement related to AGL in 2024 of DKK 35 million. This growth is primarily supported by the contributions from DTK, but also organic performance that reflects the underlying strength of our core business despite continued market volatility and headwinds.Â

Before Christian dives into the financial results for the divisions during the second quarter of the year, I also want to take this opportunity to highlight the efforts made by our teams and colleagues around the world who continue to go the extra mile despite the market headwinds that we’ve been facing, which, in particular, the organic growth rates within the Road & Logistics division is a testimony to where we continue to perform very well compared to the general market.Â

Finally, based on the results during the first 6 months of the year, we have narrowed the full year guidance for 2025 to between DKK 560 million and DKK 610 million from previously DKK 560 million to DKK 630 million. And Christian will get back to this later in the presentation.Â

Let’s move on to an M&A update for the quarter. So as mentioned before, we completed the acquisition of DTK on the 7th of May, and I’m pleased to report that the integration has progressed ahead of plan. It has been a pleasure to work with our new colleagues, and we are grateful for the collaborative spirit that met us from the very first day that we closed the deal. And I’m confident that they will do well as part of our organization going forward.Â

During the quarter, we also successfully integrated EDS and Rolls Freight onto the NTG platform. These are smaller bolt-on acquisitions in the U.K., and they also performed in line with expectations.Â

Turning to our acquisitions in Germany. Activity levels in both SCHMALZ+SCHÖN and ITC remained soft during the second quarter. For SCHMALZ Insurance, we continue to consider the performance as largely market-driven, reflecting the broader macroeconomic challenges in the German logistics sector, and we remain optimistic about the long-term prospects of the SCHMALZ Insurance business. On the other hand, ITC continues to be a key focus area for us, and we continue to experience the impact of a soft market combined with the loss of activities as we previously communicated.Â

As mentioned on the call after — or in connection with the Q1 results, the turnaround is taking longer than anticipated, but we remain committed to unlocking the potential of this business and our combined German platform for the future, and the fact that integrations of road-based companies in Germany continues to be a complex task across our industry, reinforces our view that the current market environment is particularly challenging.Â

While our focus continued to be on protecting the business that we have, actions to adjust the cost base across Germany have been implemented, which amounts to a very low double-digit number of million Danish kroner on an annualized basis. This from a wide range of OpEx initiatives, including staff-related adjustments and branch relocations. This exercise will continue over the coming quarters, and we maintain a very close dialogue with our German management teams to continuously evaluate appropriate measures to safeguard the business and to safeguard the platform to bounce back from in the future. But on the other hand, also recognizing that we need to manage the cost base very diligently.Â

So in summary, while we’ve made some progress on recent integrations, we have addressed and we will continue to address the underperformance where needed, and we remain focused on and dedicated to improving the performance in Germany.Â

As you most likely have heard us say before, NTG has a steering principle of staying below 3x net debt to EBITDA before special items to ensure a disciplined approach to capital allocation. M&A will remain a priority for NTG, provided we can continue to meet this target.Â

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

Thank you, Mathias. Let’s take a closer look at the financial performance for the second quarter of 2025. Starting with the revenue, we delivered a growth of 24% compared to Q2 last year. This was primarily driven by the additions of DTK, SCHMALZ+SCHÖN, and ITC Logistics, as well as slightly higher freight rates in selected road markets. That said, the European road market remains soft, particularly on the continent, where demand continues to be weak.Â

Organic growth was negative at 1.8%, primarily due to the lower average freight rates in the ocean freight, while currency translation effects were marginal at negative 0.1%. Gross profit increased by 39.2% to DKK 661 million, and gross margin improved to 23.1%. This improvement was supported by lower average ocean freight rates, higher margins from DTK, and the increased group’s exposure from the SCHMALZ+SCHÖN acquisition.Â

Adjusted EBIT came in at DKK 145 million, which is a decrease of 12.1% compared to Q2 2024. However, as Mathias mentioned, last year’s figure included a DKK 35 million one-off from the gain of the earn-out settlement from DTL. If we exclude that effect, adjusted EBIT actually increased by 11.5% year-over-year. The operating margin for the quarter was 5.1% compared to 7.2% in the same period last year. Again, excluding the one-off effect, the margin was 5.6%, which is — but still, we have seen a small decrease.Â

Then I have to add that we have a couple of other things on the financial, we have on the FX, we have seen that mainly the dollar, but also the Swedish crowns has given us some tailwind on the FX. And if you look at our tax, it’s somewhat higher, some due to the special items, but also due to the underperformance that Mathias mentioned with the ITC, and then we have a smaller one-off item.Â

And then if we look to the divisions, we will start with the Road & Logistics, which continued to face a tough market in Q2 with high competition and soft volume growth, especially in Germany, while overall market development was flat year-over-year, but we are also starting to see early signs of a stabilization in parts of Europe. Net revenue increased 37%, driven by 4% organic growth and 32% acquired growth from DTK, SCHMALZ+SCHÖN, and ITC, but also the smaller ones that we have acquired in the U.K. Adjusted EBIT increased by 19%, mainly due to DTK. And the operating margin declined compared to Q2 last year, impacted by the higher cost base from the German acquisition, but improving compared to previous quarters, mainly due to the acquisition of DTK.Â

The entities in Germany and Poland are still the most impacted by the market, while the Netherlands and Baltics showed solid momentum. Also, our largest entity in Sweden is starting to show good momentum.Â

And then if we go to the Air & Ocean division, the Air & Ocean division saw a decline in net revenue, primarily driven by a 17% drop in organic growth, reflecting lower freight rates and reduced volumes, particularly on the Transpacific trade lanes. Acquired growth contributed with 9% coming from the SCHMALZ+SCHÖN and Freight acquisitions, while currency effects reduced revenue by 2%. Despite the revenue decline, gross profit increased by 20% and the gross margin improved to 24.4%, also supported by the lower average ocean freight rates.Â

As mentioned before, the adjusted EBIT in Q2 last year was impacted by DKK 35 million AGL earn-out settlement. Excluding that one-off, EBIT decreased by 29%. The division’s result were impacted by also the lower project activity and challenging market conditions across all regions, especially in the Asia Pacific and the U.S. entities. The cost base remained flat versus Q1, but higher than Q2 last year, and that was due to the investments made in the organization. The conversion ratio fell to 10.6% and the operating margin to 2.6%. Adjusted for the earn-out, the margin declined by 0.7 percentage points compared to the same period last year.Â

And if we look at the key figures, then we see the key figures for the quarter. As of 30th of June, the group’s net working capital was minus DKK 64 million compared to DKK 18 million at the same time last year. Since Q1 2025, we have seen an improvement of DKK 230 million, driven by seasonality and better working capital performance in particular in the U.S., but also Germany, Sweden, and Denmark has improved. Net working capital had a positive effect on the adjusted free cash flow, which totaled DKK 265 million for the quarter compared to DKK 56 million in the quarter — the same quarter last year. As of quarter end, NTG’s net interest-bearing debt position was DKK 1.2 billion, excluding the IFRS 16 lease liabilities, including the IFRS 16 effects, the leverage ratios was 3x the EBITDA.Â

And if we flip to the next page, we see the full year outlook. Based on the results during the first 6 months of the year, we have narrowed the full year guidance from 2025 to DKK 560 million to DKK from previously being DKK 560 million to DKK 630 million. This means that we have taken the top of the guidance to reflect a more cautious view on the market development, particularly in Germany. The upper part of our initial outlook assumed a modest improvement in the second half of the year, which is no longer expected. We continue to anticipate a flat market environment for the remainder of 2025, characterized by soft macro environment and consumer sentiment.

Now I will hand the word back to Mathias for the closing remarks.

Thank you, Christian. This concludes our presentation of the Q2 2025 results. So moderator, please open the line for questions.

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

First question on the German acquisitions. I was wondering if you could just provide a bit more color on the business case that you’re currently looking into for SSH and ITC. If we compare to the business case at the time of acquisition, the combined EBIT from these 2 companies should have generated DKK 120 million on EBIT, excluding synergies, and around DKK 20 million more, including synergies. And if I read your report correctly, Q2 acquisitions contributed with DKK 21 million in adjusted EBIT, with DTK making up DKK 18 million of those DKK 21 million, which means that all other acquisitions only make up DKK 3 million in the quarter, which seems like a very low run rate. So just some color on whether the run rate should improve, and the overall business case for these 2 companies would be great.

So thanks, Ulrik. You’re absolutely correct in your interpretation of the numbers. I would say, as also communicated in connection with the first quarter results, that if you look at the contribution before group cost, we are 50% roughly higher than what you referred to. Now from a business case perspective and from a performance perspective, SCHMALZ+SCHÖN did see an improvement in the second quarter of the year. And even though the sort of the runway back to the business case is longer than anticipated, we do continue to believe in the business case of the SCHMALZ+SCHÖN team, and they are working diligently, both on the commercial and on the operation and in particular, also on the cost side to support the financial performance going forward.

ITC is certainly a big uncertainty and a moving target for the time being. We did see a somewhat of a stabilization at very low levels during the second quarter of the year, and we are working diligently with the teams in the area in order to identify how to improve performance, both in the short term from a cost perspective, but also in the long term from a commercial perspective.

All right. You mentioned that it’s taking longer than expected. Is that compared to your communication at Q1 or when you acquired the company?

When we acquired.

Then a question on ITC. You stated in the report that this earn-out element of EUR 4 million will be realized if there’s a sustained level of financial performance. And then you state that you have recognized those EUR 4 million at the end of Q2. Just elaborate here because performance is clearly not there.

Okay. But you have to say that doing accounting, then you have to realize a loss when you see it. And therefore, we have not concluded on that, but probably we will conclude that the earn-out will not be paid out. But still you have to await the year-end and the timing for the earn-out before you can release that or not put it into your opening balance. So it’s not a part of our guidance. I guess that is what you’re asking about.

And then a question on the net financials increasing to DKK 57 million in Q2 versus DKK 37 million in Q1. Obviously, you have a higher net debt level with the acquisition of DTK. But then you also mentioned some of these FX impacts. Can you perhaps quantify but also explain some of the mechanics for how long they will continue to weigh on the net financials, and perhaps also if you can guide for ’26, whether there will be any impact there would be great.

Obviously, I can’t guide on FX for 2026. But we have close to DKK 29 million headwinds in the FX. And please remember, when you compare to the same quarter last year, we had some positive effects in 2024. So — but it is mostly coming from some of the intercompany loans, but also from the external banks you have definitely also seen the dollar moving down, in particular at the end of June. So it is mainly the intercompany loans, but also the external, and then we have it on the Swedish krona. I think all our currencies were against us this quarter. So it’s been a little rough on that one.

And you assume in the guidance that FX will be unchanged for the rest of the year. So what — is it a similar impact we should expect for the coming quarters?

No, we are not assuming anything on the FX; we’re not experts in guessing what the FX will be for this. So we will expect it to be neutral for the remaining year.

Then on your tax rate also increasing quite a bit in Q2. Perhaps just put some flavor on why it has increased and what you expect for the tax rate over the — in H2, please?

But the tax rate will, due to the underperformance of ITC, be lower — will be higher than what we have seen prior. But also we will have some special items effects that also will not be tax deductible. So you will see over the next half year that our tax rates will be higher. But we — normally, we would be able to keep that within the earnings of ITC. But since ITC is underperforming, then we will not be able to include that.

But you don’t want to guide on a tax level for 2025?

Not at the moment.

Then my final question on minorities. The share of net profit amounted to 24% in the quarter. And also if I adjust for tax and net financials, the share of adjusted EBIT was around 21%, which is quite elevated compared to previous quarters. So just provide also some flavor here. I know it’s a bit technical, but it would be really nice to understand, and also how that should trend.

I think you’re a little higher on that. But please remember that we’re very happy about the partnership that we have done with the DTK Frigo. That’s one of the reasons why we acquired Frigo. I don’t think we would have bought them without. And that’s really well high-performing companies. So that will see a higher effect on our minorities effect on the EBIT.

Does it also have — is it also impacted by the underperforming German entities?

Obviously, 100% owned company that is underperforming will, of course, mean something on the minority part of the results.

And the question comes from the line of Emilie Fung from Barclays.

I have 3 questions, please. So the first one is on your new narrowed EBIT guidance range. What are the scenarios underpinning the lower versus the higher end? So that’s my first question. The second one is on the new group TMS platform. So you mentioned this will be rolled out in 2H. Could you give some color on which entities will be prioritized and how this platform is expected to enhance the business? And lastly, we’ve seen the Air and Ocean conversion ratio and EBIT margin weaker in the second quarter. Is this reflective of the increased investment in the division or the weaker China to U.S. volumes? And should we expect this to remain subdued during the investment period in the division?

I simply couldn’t hear the third question. If you look at the guidance, I mean, the midpoint of the guidance is a flat version of the market, and not seeing more difficulties operating within the market. And that’s — and if the market improves, then we are hopefully in the higher part of that. And if the market will be even harder than what we are seeing today, then we will come in the lower part. But please remember, we are always guiding for the midpoint. Then on the rollout, we’re definitely seeing — expecting to see some big productivity also say we are definitely seeing productivity improvements when it’s been rolled out, but it will not be the first year. It will be something that we will gradually be able to achieve. So at the moment, we will not comment on it. We will also need to see the system 100% live within our organization, and also the features that we have asked them to program that they will be implemented before we will be able to see what kind of improvements are we expecting.Â

And then on the conversion ratio for the Air & Ocean, I think we have said it a couple of times before also that our company, we are subscaled in our Air & Ocean. And it is difficult to see that it’s on the short run will be much better. But we have put in a lot of investments in the sales that we are definitely expecting to see some benefit from. So it is a little depressed at the moment, but we’re also expecting to see all the initiatives that we have done with the strategy on the central buying, and these things that intercompany — use of intercompany companies will improve some on the conversion ratio. But there is definitely a situation where we are a smaller player on that market.

[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.

Yes. Thank you, everybody, for dialing in. And please remember that you are more than welcome to reach out to our Investor Relations for any questions that you may have. Thank you once again, and have a great day.

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