Hapag-Lloyd AG

Operator: Ladies and gentlemen, welcome to the Hapag-Lloyd Analyst and Investors 9 Months 2025 Results Conference Call and Live Webcast. I'm Iruna, the Chorus Call operator. Hapag-Lloyd is representative by Rolf E. Jansen, CEO; and Mark Frese, CFO. [Operator Instructions] The conference is being recorded. The presentation will be followed by a Q&A session. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Rolf E. Jansen. Please go ahead, sir. Rolf Jansen: Thank you very much, and welcome, everyone, and thanks for taking the time to be with us today. Yes, short presentation, as always, before we jump into the questions that you may have. I would say that when we look at the first 9 months, a couple of things to mention. I think good strong volume growth over the first 9 months, again, a decent quarter in Q3, on the back of that, good revenue growth. When we look at Q3, I think earnings improved sequentially. But of course, year-to-date performance remained below last year. When looking at Q3 in isolation, I think that was actually a fairly solid result. I think we start to see that the first cost savings from Gemini are starting to come in. We see the network running smoother and smoother. So that gives us a lot of confidence that we'll see further improvement as we go towards the end of the year and moving into 2026. We will continue to invest into the future. We also have some things -- we also continue to work on our Terminal division, but nothing specifically announced there at the moment. think we have narrowed our outlook a little bit going forward. And when you look at the midpoint on EBIT, then you see that we have slightly raised that compared to what we had a couple of months ago. Switching to market. Let's still say it's a fairly robust market. When you recall all the forecast that there were for the container trade in the beginning of this year, but also in fairness in the beginning of last year, then certainly over the last 7 quarters, we have seen a stronger market than many people had expected. In 2024, the market grew over 6%. The first 9 months now, we are again looking at close to 5%. That's a lot more than people had anticipated. And I think that's pretty encouraging and shows also that global trade is quite resilient. We still expect the last quarter to be somewhat weaker, but of course, that remains to be seen. Spot rates under pressure after the relatively early peak season, seen a bit of an uptake in the last couple of weeks with last week again a bit weaker. But I think we also see that demand still remains fairly strong and utilizations remain high. So hopefully, we'll see some further recovery of those spot rates as we move forward. Switching briefly to Gemini. I think it is fair to say that we have set a new benchmark for reliability in the industry. I think with very consistent performance even in very volatile markets and under difficult market positions. I think the network has delivered on its promise pretty much every month. I also believe that drives our above-market growth. We also see customer feedback very positive with our Net Promoter Score that we measure twice a year at the moment at an all-time high. And we also still see, as I mentioned before, quite a lot of things that we can still do better. And we will continue to implement those smaller improvements month after month after month, and that will allow us to get to our anticipated cost saving run rate in the course of 2026. Next steps. make sure that we continue to grow volume on the back of an excellent product and also make sure we get adequately paid for that because if we are able to help our customers to run their supply chains a lot better, then that must be more efficient for them as it allows them, for example, to take out inventory. And of course, we would like also to be adequately paid for that. We will also come with the introduction of a new quality promise for on-time delivery on box level because that's, in the end, the ultimate promise to customers that we make that we deliver their box on time. A little bit on investments before I hand it over to Mark. We have announced also this morning a decision to invest in up to 22 new ships in smaller vessel classes as we have a significant amount of tonnage in those vessel classes that is going out of service in the second half of this decade. That means we need to replace them. We also have to reduce our exposure to the highly elevated time charter at the moment -- market at the moment. And of course, that also helps us to reduce our operational cost base, and it helps us also on our decarbonization journey. The ships that we will order will probably be in a couple of different classes, one around 1,800 TEUs, class around 3,500 and class around 4,500 TEUs. With that, let me now first hand it over to Mark. Mark Frese: Thank you, Rolf. Good morning also from my side, and thank you for joining us today for our 9 months results presentation, which will show that in a complex and volatile market environment, we have delivered a solid operational performance. Our strong volume growth, which is well above the market average, demonstrates the benefits of our strategic positioning, particularly the successful implementation of our Gemini East West network. In the coming quarters, we aim to sustain this growth momentum and still keeping the flat capacity stable. As anticipated, earnings are lower than last year's exceptional performance, and that is primarily due to softer freight rates and continued cost pressure. To address this, we are intensifying our cost discipline and further optimizing our network to enhance efficiency and competitiveness. At the same time, we maintain a robust balance sheet with ample liquidity and a moderate leverage, providing the flexibility to pursue whatever strategic priorities. We focus on or opportunities come up, and we navigate market volatility effectively with that. Let's now take a closer look at our financial performance. Revenue and earnings in the third quarter improved sequentially, driven by a temporary higher spot rates resulting from front-loading effect in the U.S. EBIT increased from USD 189 million in Q2 to USD 228 million in Q3. However, compared to last year's exceptional results, earnings were lower due to the significantly weaker overall freight rate environment. Looking at the first 9 months, revenue grew by 5%, supported by strong volume growth across both operating segments, which helped offset partially the lower freight rate environment. At the same time, persistent cost pressure weighed on operating performance, for the period, group EBIT reached USD 905 million and group profit totaled to USD 946 million. Looking now at the performance of the Liner segment, we can see that revenue in the business segment increased to USD 15.7 billion in the first 9 months. This development was driven by above-market volume growth, particularly in the Gemini trades. EBIT amounted to USD 858 million in the first 9 months, that is compared to USD 1.9 billion during the same period of previous year. In Q3, EBIT improved sequentially to USD 219 million, a temporarily higher cost -- higher spot rates out of Asia lifted our average freight rate by around about 5% compared to the quarter before. After the 9 months of '25, we transported or in the month '25, we transported 10.2 million boxes, representing a volume growth of 9%. As said, well above market rate. This strong performance reflects our sustained investment in efficient fleet capacity and the successful transition to the new Gemini East West network. Particularly noteworthy given the tariff-related demand fluctuations we have navigated through. So growth was especially strong on the Pacific and Asia-Europe trade routes. In contrast, Atlantic volumes improved only modestly due to the soft demand between Europe and North America, while transport volumes between Latin and Europe -- Latin America and Europe were constrained by operational disruptions in ports. Following a persistent decline in the average freight rate improved, which improved 5% in Q3 2025 quarter-over-quarter, driven by front loading effects. However, the first 9 months of '25, the average freight rate stood at USD 1,397 per TEU, almost 5% lower compared to the prior year. Having a look on the unit cost in the first 9 months of '25, they increased by 5% to USD 1,338 per TEU, and this increase was driven by higher storage costs due to port congestions and operational delays, increased hinterland transportation costs from growing the growing share of door-to-door business and plant start-up investment associated with the Gemini Network. In addition, external factors such as rising trade imbalances, higher regulatory compliance cost and for sure, as we all know, the FX effects, which we have experienced generally, elevated the cost base. To mitigate these external factors, you can assume we structured strong, and we are executing already a comprehensive cost program. I would also like to provide more context on the Gemini startup costs as these are likely more pronounced for Hapag-Lloyd than for Gemini partner, as well as on the initial cost savings that are already becoming visible. For us, the new network represents a more significant transformation, which is temporarily associated with higher unit costs. We have not only redesigned the network but also changed the terminals we call the capacity we operate. While we already see clear cost benefits per available slot right now, such such as reduced ship system costs and lower bunker consumption, the unit cost per transport book are still elevated for now. But when we look ahead, growing volumes at stable capacity and further network optimization will drive unit cost down, resulting in tangible positive impact on our P&L in the coming quarters. Let's now have a closer look on the T&I segment. Revenue in the Terminal business increased, as you can see here, by 15% to USD 370 million -- USD 375 million in the first 9 months. This growth was supported by encouraging throughput developments. We have seen and the acquisition of our Terminal in Le Havre, in France this year in March. EBIT amounted to USD 46 million, which is below the prior year level, primarily due to weaker performance at Latin America terminals. This was driven by the U.S. tariff related market volatilities. And we have seen strong unfavorable weather conditions there. Additionally, we continue to ramp up this relatively new business segment which is quite normal that is associated with a temporarily higher cost base. Turning to our cash flow development on the next chart, operating cash flow for the first 9 months. As you can see here, '25 amounted to USD 2.6 billion. We invested around about USD 1.5 billion, mostly investment in containers, as well as in the modernization of our fleet, under our fleet upgrade program. These investments are designed to enhance the cost efficiency and to reduce CO2 emissions across our operations. Including income from interest, dividends and divestments of USD 309 million in net cash outflow from investments totaled to USD 1.2 billion resulting in a robust free cash flow of USD 1.4 billion. Financing cash outflows amounted to USD 2.5 billion, primarily reflecting the dividend payment of more than $1.6 billion to our shareholders, along with debt redemptions and interest payments. Overall, the cash position decreased by USD 1.1 billion, resulting in a still robust cash balance of USD 4.6 billion at the end of Q3. For sure, we continue to maintain a very resilient balance sheet with ample liquidity and moderate leverage. Strong liquidity reserves still there, which includes cash fixed income investments, undrawn revolving credit facilities, which totaled to USD 7.5 billion. This provides us with significant flexibility to fund strategic initiatives and for sure, navigate effectively through difficult market period and volatility. And with that, I will hand it back to Rolf now for the market update and our outlook. Thank you. Rolf Jansen: Thank you, Mark. Yes, maybe just a few words on supply and demand. I think we see here the trend that we have seen over the last years, I would say, a remarkably strong growth in '24. Personally, I would also expect that the '25 is going to come in a little bit stronger than we anticipated. That's a better picture we have seen over the last couple of years. Of course, it's uncertain what's going to happen in '26. It's, however, quite encouraging that over the last 2 years, if you add them up, I think, 6-plus percent in '24, I think we're going to be close to 4% in '25. That's accumulated close to 11% in 2 years, which is well above what everybody expected. For next year, the expectations for now are a little bit lower, but also also fleet growth will be a little bit lower. So for now, we anticipate an environment where there is going to be somewhat lower growth. But when we look at the last couple of years, there's certainly also a scenario thinkable where things remain fairly robust because also when we look around the globe this year, then we certainly see that trades to and from the U.S. have been under pressure, but quite a few other trades have actually done fairly well. Looking at the order book. Order book is still quite big. Could that be lower? Yes, could be. On the other hand, let's also not forget that we are still expected until the end of the decade, overall growth will be 15% to 20%. And we also expect that there's quite a bit of the capacity that is going to be taken out as towards the end of this decade, more than 4 million TEU of capacity will actually have to be replaced by newer tonnage, which is also the background of the order that we just earlier talked about. And on the back of the demands that are being put upon us to work on decarbonization. Also, that is certainly an incentive to sell a little bit slower, which normally would require a bit more capacity. So all in all, no very significant change in the order book. It definitely remains on the high side, but it means it also covers a much longer period as when people order ships today, you can get them in '28, '29 or sometimes also only in 2030. So contrary to what we used to look at in the past when we had an order book typically covering 2.5 years. Today, it covers more to even 4, 4.5, sometimes even 5 years. Moving to the outlook before we hand it -- before we wrap it up and then hand it over to you. We made some slight adjustments to the outlook. As you can see here, mainly on group EBITDA and group EBIT, where we narrowed the range, which we would also expect, if we get closer towards the end of the of the year, and we also raised the midpoint a bit. Then when we look at priorities, I would say, make sure that we leverage the Gemini performance to continue to grow our business at adequate pricing but also make sure that we get all the savings into the book, make sure that we continue to focus on high customer satisfaction. We've been doing that now quite consistently over the last number of years, and we need to make sure that it stays like that. We will try to further expand our Terminal division through acquisitions and potentially also investments here and there also because it drives quite a lot of synergies with the Liner business. We also will invest in the expertise and resilience of our team amongst through a large leadership program. And then finally, we have to ensure that we maintain strict cost discipline as costs are currently definitely at an elevated level. We already mentioned [indiscernible] , and we need to ensure that over the next 12 to 18 months, we see the planned improvement in unit costs. And with that, I would hand it over to the operator, as I think we now move to Q&A. Operator: [Operator Instructions] The first question from the phone comes from Omar Nokta with Jefferies. Omar Nokta: I have a couple of questions. Maybe just first on the new buildings. Can you give us a sense of what kind of capital expenditure you're anticipating for these vessels? When you expect to take delivery of them? And also, where do you plan to deploy them? Are these going to be in that sort of the ideal workhorse for the Gemini network? Rolf Jansen: Okay. If I take that, maybe, Mark, you can say probably something around the CapEx but I think if we look at delivery, most of that will come in '28 and '29. And when we look at where we can deploy them, those are many places across our network, but it would not be illogical to expect quite a few of them to be deployed in our shuttle or feeder networks in Europe or Asia, but only some of them will also be used in IoT Americas or in Africa in Latin America. Omar Nokta: And then in terms of cost, any sense? Rolf Jansen: I mean, I think in the end, we will commit to those ships. I think we're still figuring out what will be the exact split between the various categories and some of it will be time charter and some of it we will own. So it's a bit too early to say something about what the overall CapEx will be. Omar Nokta: Okay. And then just a final one for me, just on the operational costs. I know you mentioned that 2026 is when we'll start to see the benefits of Gemini. Are you able to give any kind of maybe quantify the type of cost savings you anticipate to show next year? Rolf Jansen: I mean what the type or the -- sorry, I didn't hear it -- type or size? Omar Nokta: Yes, just like the dollar amount you anticipate or percentage change versus this year, any kind of range you're able to share? Rolf Jansen: I think when you look at the cost savings that we expect from Gemini, we have, I think, earlier on, gave an indication that we expect it to be net [ $350 million to $400 million ]. And at the moment, I have no reason to have -- to pull out a different number. Operator: The next question from the phone comes from Alexia Dogani with JP Morgan. Alexia Dogani: I have 3 please. Just firstly, on the 4Q outlook, clearly, the low end of the range is very negative and we're only 6 weeks away from the end. How should we interpret that low end that you've provided today? And should we see this as the potential exit rate into 2026? That's my first question. Secondly, Rolf, you made some comments about the Gemini pricing. And can you elaborate a little bit on what the alliance wants to do in terms of kind of capturing the value of this new operating model? Is it really about pricing? Or is it about volume gains? And there has been in the press some discussion around Maersk considering an on-time surcharge. This is slightly counterintuitive because obviously, you operate a scheduled business, customers should expect it to be on time, otherwise, the schedule -- kind of point is missed. And I think at the 2030 strategy presentation, you showed that actually the top thing that customers want is low price. How does that actually change given your experience over the past 12 months? And then my final question is, you helpfully show that the market expects container volumes to grow 15% to 20% by 2030. That implies a 4% to 5% per annum volume CAGR and suggest a multiple of 1.5 to 2x real GDP based on kind of current global forecast. What gives you confidence the multiple can be staying at these higher levels? Because clearly, in '24 and year-to-date, '25, we've had a lot of, let's say, external events affecting demand, be it disruption and tariff front loading. Is that your feeling? And if not, isn't it slightly counterintuitive that tariffs have no impact on trade? Rolf Jansen: Let me maybe try and take them one by one, and then Mark, you may want to add something on the outlook. Maybe start from the bottom. To be honest, I can't really reconcile your math, yes. Because when I look at 15% growth until 2030, that's 5 years. So that's roughly 3% a year growth, which is roughly a multiplier of 1x of GDP when you look at the long-term average of 3%. So personally, I think that's actually not looking at 1.5x GDP, but more looking at just onetime GDP, which I think also when you look at the last number of years, it will not come every year, but on average, we're actually not so far from that. Then when we look at Gemini pricing, I think there is definitely value to be captured from a difference in reliability and a difference in OTD between one and the other, whether you should call it a separate charge for being on time. I think I can relate to your comment that putting a separate charge for being on time is probably odd. But I would also say that if I can choose between 2 carriers, where one of them is going to be on time, and the other one is very unpredictable, that I am willing to pay a little bit more for people that are on time because it allows us to take -- it allows me to take money out of my supply chain. And we have clearly seen in discussions also with customers that they see that and that they do see real opportunity to take 1 or 2 weeks' inventory out of the supply chain, which clearly has value. And then, of course, we need to make sure that we sell that value as well. And part of that to your point, will come in terms of hopefully higher prices or adequate prices and the other one may also be above market growth. I agree with you that there's a those 2 value components in there. And then maybe, Mark, do you want to comment on the outlook. Mark Frese: Yes. Thank you. Yes, on the outlook, you might call it a cautious view. It's maybe 2, but it's due to the scene short-term volatility, which is more attributed not only to the general shipping volatility but also due to the geopolitical uncertainties we are facing, and we are looking at a freight rate environment, which is under pressure right now. Volume growth is slightly slowing down. So let's see what the last weeks are bringing for this year, but I think that is the character of our outlook overall. Alexia Dogani: Thank you for clarifying the growth rate. Can I just do a little follow-up on the GEMINI pricing. When you're competing or when you are on the same route, and you're offering kind of your customers a contract price, should we expect much differentiation between you and your partner? Or given you operate the same network, you're on the same alliance, kind of the pricing opportunity is equally spread? Or just trying to understand a little bit kind of the potential divergence or not. Rolf Jansen: I think your pricing differential you should mainly see with those that have a different product. So I would expect, but I don't know -- and we operate completely independently from that perspective. But I would assume that the Gemini partners are able to get a price premium for being on time compared to those that are not on time. So that's where I think the delta that you will see and that will not come from one day to another, and it will not come in every customer segment. But I think the delta that you will see will be more between Gemini and the other networks then between the partners within Gemini. Operator: The next question from the phone comes from Cristian Nedelcu, with UBS. Cristian Nedelcu: If I can please come back on the cost savings. Could you help us a bit what was the run rate in $1 million that you expect in terms of cost savings in Q4? And what is the time line to get to the $1 billion cost savings that you are flagging in the past? The second one on Gemini. Could you remind us, looking at your ocean volumes, what's the percentage split between BCOs and forwarders. And within your customer base, what proportion do you believe are the time-sensitive BCOs that most likely will find on time proposition as very appealing? Rolf Jansen: Maybe start with the cost savings. I think what we have said is that we expect that in 2026, well over half of that $1.3 billion that we are targeting is going to be effective. We expect to get to full run rate in 2027, and we will see some effects already in the fourth quarter, but those will be limited. In terms of ocean volume, our split traditionally, we have been a bit more focused on the forwarder side. I think at some point in time, we were like 70-30 for orders for BCOs. Today, we are closer to 60-40. And as far as it's around what's the percentage of the customer base are time sensitive, I would say that probably the majority of the BCO business. Cristian Nedelcu: Understood. And could I please add one question if you allow me. Coming back on the very strong volumes from China to the rest of the world. So leaving aside the U.S. for a second. The last 4, 5 months, we've been seeing China, Europe, up 10%, 12% and so on. Do you have any data from your customers, what are the inventory levels in Europe or other LatAm or other countries? I'm just thinking to what extent part of this growth has been just an export push that is currently leading to higher inventories and we actually might see the consequences of that over the next months. And I'm asking this because the value of Chinese exports in October was down 1% year-over-year, and there was a steep deceleration in the exports from China to Europe from double digit to low single-digit growth year-over-year. Rolf Jansen: I think what we saw in October, it's definitely a slower return to work, if you want after Golden Week than we have seen in previous years. In some years, that's good, some years, that's a little bit worse. I think you shouldn't look -- I don't think we should read too much into that. If I look at the last couple of weeks, demand has really been, again, quite strong. We just were a little bit slow coming out of the [indiscernible] After Golden Week. So I don't see too much into that. In terms of inventory, I think that speculation is always out there. I think I'm now hearing since 1.5 years that we are front-loading. At some point in time, one would argue that, that has to stop I think listening to speaking to customers, I do not think that there are many of them that sit on very excessive inventory. What will be critical is what consumer demand will be towards the end of the year, which typically for retail is a peak season, that will probably drive what's going to happen post-Christmas. But I don't see huge amount of front-loading. And yes, you hear -- you speak to one or the other that has high inventories. We also speak to people that have actually fairly low inventory. So difficult judge and there's only a limited amount of really reliable data on that out there. Operator: The next question from the phone comes from Marco Limite with Barclays. Marco Limite: My first question is again on the '25 outlook. This time on the upper end of the guidance because the upper end of the guidance basically implies Q4 EBITDA as strong as Q3, but Q4 is seasonally weaker from a volume perspective. So basically, I guess, implies spot rates up quarter-over-quarter. I mean, is that possible? Do you think that, that sort of scenario? Second question is on your Gemini start-up costs. If you can remind us how much startup costs you had in Q2, how much they have been in Q3 and how much we should expect in Q4? And the third question, if you allow me. I mean if I look at the Q3 results, it just like OpEx was behind of consensus. Is there a single factor or maybe among the many factors that you will point out for higher inflation? Could that be, for example, very strong headhaul growth, but backhaul growth and backhaul volumes not being that strong. And therefore, how can you offset that going forward? Rolf Jansen: Maybe I'll start with the -- I think when you look at the Gemini costs, I think we overall once gave an indication that, that was between [ EUR 150 million and EUR 200 million ]. I think that prediction still holds. The majority of that we incurred in the first half of the year, and we have still a little bit in Q3 and Q4. When you look at OpEx, I think we already mentioned that we also started [indiscernible] Because we believe that OpEx needs to come down. We start seeing that also. So from that perspective, pretty comfortable that, that is indeed going to happen. I think your point to backhaul volume, I think we have certainly seen in the repositioning costs. We've seen a little bit of a spike. Some of that is catch-up and there's still something to do with Gemini, but that's certainly a factor that plays a role. And then I'll leave the comments on the outlook to Mark. Mark Frese: Yes. When we look at that right now, for sure, that scenario is thinkable in the sense that what's reflected in the perspective. And that's why you can see it. But overall, it stays, I think a cautious outlook. Marco Limite: Okay. Just a follow-up to that. Is it fair to assume that you still have got a lag in revenue bookings, so the weak September that includes Q3 actually was in Q4. So basically, we are implying a very strong October, which we have seen also November remaining at very strong with October. Rolf Jansen: I'm not sure we fully understand the question. I think I mentioned earlier that -- and I think it was called out by the previous person asked the question that export volumes out of China have been -- have been a little bit slow following Golden Week. So that's why volume is not exceptionally strong in the month of October. In the last couple of weeks, we see demand picking up again. That's basically what the comment was that we made. It's not technical time shift in a sense when that was your question, too. Marco Limite: I was referring to revenue recognition delay between spot and your revenues, but any your answer was clear. Operator: The next question from the phone comes from Lars Heindorf with Nordea. Lars Heindorff: Also a few one on Gemini. I wonder if you could maybe quantify a bit more about the start-up costs that you have Maersk -- on their call said that I mean, Q3 was the first full quarter with Gemini up and running. So what is actually the difference there between you and them in terms of the start-up cost? Why do you incur maybe later start-up costs compared to Maersk? And then a second one on Gemini, which is the balance again between you and Maersk, are you a net seller or a buyer of capacity? And maybe if you can -- I don't know if you can say anything about the magnitude of that sort of balance in terms of the vessel sharing agreements that you have on -- in the Gemini Agreement? And then the last one is on the rates. Well, I think you said you had a comment in your starting remarks that you said you hope that rates will rebound a bit here into the fourth quarter? Maybe just what is behind that? Are you seeing any signs of recovery? I know there has been a few FAK and GRI successful increases in October and then you have seen a bit of weakness as of lately. But yes, just wondering exactly what is behind that comment. Rolf Jansen: Let me maybe start with the last one on rates. Of course, nobody can predict the rate, unfortunately. I think we saw a bit of a -- we saw some seasonal weakness after Golden Week, then I think we saw rate eroding, which was sort of logical because it took a little bit of time before volumes came back. And we've had a couple of GRIs that ,as you rightfully point out that have been that [indiscernible]. Now we see actually fairly strong bookings. Last week was strong. The beginning of this week is very strong. So I think that gives us some momentum in the market to hopefully get some further rate increase in the short-term market because those [ fleets ] are really very low. I think your second point on the balance. I mean, from all the mainline capacity that we operate and that Maersk operates, I mean, we are balanced in terms of provision. I think we have -- I think we announced it also earlier, we have a 60-40 split roughly on the main line of capacity and Maersk provides 60% of that, and we provide 40% of that. So from that perspective, we're not a net seller or buyer. I know there was a comment on the earnings call of Maersk, and that may have to do with the technical arrangement that we have made on the shuttle space, but I can't look into Maersk books, so I don't know why they exactly treat, but that's my hypothesis. On the Gemini start-up costs, I think it is right. I think you are right. The start the changes were probably a little bit bigger for us than for Maersk because we changed a lot of terminal providers. Maersk was doing a little bit more of hub and spoke already. And whereas the corporation runs really well. And I think we're also happy with network. I think it's also fair to say that there was in some processes, that's probably a little bit more learning for us than there is for Maersk because, for example, in our case, also the empty flows change a lot, and that takes a little bit of time to stabilize that. And that's why, I guess, that some of those cost savings might come a little bit later in our case than what we see at Maersk. Lars Heindorff: Can I just have just another follow-up, but just another one, sorry, is on Suez. there has been a lot of talks lately. We've seen having a few versus going through Suez, also larger vessels. And also now here this morning is some news about Maersk in talks with the authorities down there. Apparently, maybe of course, depending on the security situation that they will return. What's your view on that? I mean, what will it take for you to return to Suez? Rolf Jansen: I mean, I think we've always said that as soon as it's again sufficiently stable and safe, then we will consider a gradual return to Suez. I think we're talking very closely to our partners which is Maersk but also others in other services on when that is the case. We're following it closely while at the moment, I do not see us returning very soon. Operator: The next question from the phone comes from Andy Chu with DB. Andy Chu: Just one question for me. Just on the cost savings, there are quite a few numbers flying around this morning. I think you mentioned in the presentation the full run rate of savings is expected by 2026. But just in terms of the net cost savings, what should we be putting in for 2026 and 2027? Rolf Jansen: I think when you look at our -- there's 2 or 3 things I think that were mentioned. One is, what are the run rate savings we expect from Gemini, that we have previously indicated $350 million to $400 million. And there is no reason to deviate from that number. Then we talk about the [indiscernible] Program, where we are targeting $1.1 billion plus in cost savings, and we expect the vast majority of that to be effective in '26, and we expect the full amount to be effective in '27. Andy Chu: Maybe just one strategic question. Obviously, Maersk has had a pretty good performance in Terminals. So when I look at sort of the weighting of Hapag's business mainly being container shipping focus, does that kind of -- does the current environment sort of shift any kind of thinking in sort of the mix of the business? Rolf Jansen: No, not really. I think we've been -- we've, of course, been in a way we entered the Terminal space much later than some of our competitors. But we will continue to grow that business. I think that if you take into account that we effectively only started somewhere in the beginning of this decade. And today, we are engaged in 22 terminals. I think that's actually a pretty good result, and we will continue to grow that. But of course, we are -- APMT started, I think, in the last century or around 2000. So of course, they have a lot more history and track record there than we have at this point in time. And that's something that we simply need to catch up. Andy Chu: And then just on logistics, you mentioned sort late to the party and Terminals. Is it a party that you'll never join with logistics? Rolf Jansen: We have no plan to go into logistics, the way that others do. Operator: We have a follow-up question from the line of Mr. Nedelcu with UBS. Cristian Nedelcu: Two questions. I wanted to add, the hub and spoke model, how are you thinking about potentially deploying it to other trade lanes and what is the time line there? And secondly, if we leave aside the cost savings initiatives that you mentioned earlier, what is the inherent cost inflation you would expect for 2026? Is it 2%, 3%? Is that reasonable or more or less? Rolf Jansen: I think to take the last one first. I think when you look at cost inflation going into next year, if we would not take measures, then I think that is -- that would unfortunately definitely be more than 2%, yes. I think that's a low mid-single-digit number that you realistically would have to have in mind. And then when you look at hub and spoke, yes, we certainly see the hub and spoke model working. So will that also be used in other trades over time. Probably yes, but I don't see that tomorrow. Operator: Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Rolf E. Jansen for any closing remarks. Rolf Jansen: Not much to add. Thank you for your time, really appreciate it. Also, hopefully, we were able to give you some insight, and thanks also for the questions. Take care. Bye-bye. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.