Kuehne + Nagel International AG (KHNGF) CEO Detlef Trefzger on Q4 2020 Results - Earnings Call Transcript
Kuehne + Nagel International AG (OTCPK:KHNGF) Q4 2020 Results Earnings Conference Call March 3, 2021 8:00 AM ET
Detlef Trefzger - Chief Executive Officer
Markus Blanka-Graff - Chief Financial Officer
Conference Call Participants
Daniel Roeska - Bernstein Research
Robert Johnson - Exane BNP Paribas
Sathish Sivakumar - Citigroup
Neil Glynn - Credit Suisse
Andy Chu - Deutsche Bank
Mark McVicar - Barclays
David Kerstens - Jefferies
Michael Foeth - Vontobel
Muneeba Kayani - Bank of America
Sam Bland - JPMorgan
Ladies and gentlemen, welcome to the Full Year 2020 Results Conference Call and Live Webcast. I am Myra, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. [Operator Instructions]
At this time, it’s my pleasure to hand over to Detlef Trefzger, CEO of Kuehne + Nagel. Please go ahead, sir.
Thanks, Myra. Good morning, good day, good afternoon and good evening to all of you, and welcome to the analyst conference on the full year 2020 results of Kuehne + Nagel International AG. Our CFO, Markus, and I welcome you from as always from sunny Switzerland.
We published our full year 2020 results and the respective slide deck early this morning. And also as always, we get started on slide three.
Kuehne + Nagel successfully navigates through the crisis in 2020. Accelerating of operational and market momentum in quarter three, and especially in quarter three 2020, we were able to see underlying earnings recovery, which outpaced the improved volume trends, which is a reflection of improved market conditions on one side, cost control and the portfolio mix on the other side.
As you see on the slide, we closed the year with CHF 20.4 billion net turnover, CHF 7.475 billion gross profit, which is a decrease of 6.3% versus previous year and as you - you're not very often today, but at least at this of my presentation, we were fighting currency headwinds of around 6%, both in net turnover, as well as in gross profit last year.
The free cash flow closed at CHF 1.453 billion which was an increase versus previously of 27.7%. And the earnings per share slightly were reduced and ended up at CHF 6.59 per share. As a result of the strong operational performance, the increase of the free cash flow is what we are proud of, because that shows the solid operational performance of the organization.
Let's continue on the next slide, slide four. Kuehne + Nagel had a strong performance. We ended the group EBIT at CHF 1,070 billion which was up 0.8% versus 2019, EBIT and - operational EBIT improvement for the full year has been 4.4%. The last quarter has been extremely strong from a pure operational point of view the EBIT was up 4.9% and closed at CHF 280 million in quarter four 2020.
A quick glance at the four business units. Sea Freight closed the year 2020 with an EBIT of CHF 423 million and a conversion rate of 29.9%. The increasing share of small and medium sized customers recovered or increased since quarter three, and especially in quarter four, the conversion rate in quarter four, just for interest has been 32.5% in Sea Freight.
Air Logistics, the Air Logistics business closed the year 2020 with CHF 505 million EBIT and an operational EBIT despite one-time effects of CHF 442 million. The underlying performance has been a conversion rate of 33.2% purely operational in 2020. And the strong yield performance in quarter four 2020 showed a conversion rate of 41.4%. So a very strong operational performance, especially the recovery in quarter three and exceptionally in quarter four 2020.
Road Logistics closed the year 2020 with an EBIT of CHF 62 million. Domestic transport volumes back to pre-crisis levels, we mentioned that already in quarter three, while we still experienced end of last year, also early this year low volumes in North America.
In Contract Logistics the EBIT closed at CHF 80 million, you know that this business unit has heavy restructuring exercise, we will come to this later on. And market share gains in pharma and healthcare and e-commerce fulfillment are the highlights of the year 2024 for Contract Logistics.
Let's go into the details of the volume development of Sea and Air Logistics on slide six.
The Sea, let's start with Sea Freight or Sea Logistics. The volume trends improved month-by-months, we posted a volume reduction in June of minus 8% which was the inflection point, quarter three minus 5.1% and quarter two minus 4.2%. The markets was slightly stronger especially in quarter four, and this is a reflection of a lower demand for commodity shipments, forestry products for example, and a very high demand for high yield solutions with higher [ph] capacity on the supplied side, we were also very selective except in volume and especially in quarter four did not accept too much of the commoditized cargo.
SME volumes, small and medium sized enterprise regained ground in quarter three and even more in quarter four, which was also beneficial for not only volume development but as you will see in the next slide also the years development.
The winners from a category point of view, industry point of view, the winners were sports, garden equipment, furniture and leisure products which can be used individually for the end consumers.
The Air Logistics development showed material volume improvement. Also throughout the year, we started the one with minus 9%. Quarter two, we posted a reduction of minus 22%. Quarter three minus 12.8% and still negative, but a huge improvement in quarter four minus 7.5%. So sequentially improving market share is stable in 2020 in Air Logistics and in some of the businesses in Europe, we lost shares because the perishable business, we saw reduced volumes due to the lockdowns, especially in Europe.
Asia exports were extremely strong both into North America and Europe. And we benefited from this. And automotive, high tech pharma were the big winners in Air Logistics commodities that we transported, while perishables as mentioned and also general cargo was rather weak.
Let's go into the details of Sea Logistics, slide eight. And as you know, our slide deck very well, I would assume these are the unit KPIs. So per TEU in the case of Sea Logistics, we ended quarter four with CHF 321 per TEU gross profit, reflection of the favarable portfolio development, especially with more SME customers in our portfolio coming back, and the sea freight yields holding what we have already seen in quarter two, so very stable yield.
The volume driven cost control also showed traction again, and so it was CHF 217 per TEU, the cost on a very moderate level. And that is also a reflection of the efficiency programs, operating care centers and customer care locations that we implemented throughout the year 2020. And I think we have mentioned that it's while - some of our last calls.
So we are confident and we always stated that confidence that the EBIT and per TEU would end up on a sustainable basis at around CHF 100. And you see that was one out of four [ph] we are in that corridor.
We continued in quarter three and four our selective growth approach, and most likely that will be the path forward for the time being. And we are focusing on delivering an excellent customer service in See Logistics.
Air Logistics, slide nine, briefly strong yield performance in quarter four 2020. And as we mentioned already in our last call when we published our quarter three results, a positive one-off impact of net CHF 36 million, sorry, CHF 63 million in quarter three 2020.
Air Logistics KPIs on slide 10, are operational KPIs, so be careful, the one-off effects have all been excluded for comparison reasons. And you see that we benefited also here from the cargo mix and the strong intake from high yielding, new customers and new volumes, as per market situations. So the 100 kilo gross profit ended at or was at CHF 95 Swiss francs per 100 kilo. The active cost management confirmed rather stable CHF 55 per 100 kilo. Cost base and we had a very strong operational performance, purely operational in quarter four, ending the quarter four with 100 kilo EBIT of CHF 40 Swiss francs. And I mentioned the conversion rates before.
The operational - and that's my last point. And I mentioned that also in the short overview was at - or was at CHF 442 million, which was 28.9% above prior year, and in quarter four CHF 155 million which was 93.8% above prior year. The whole KN Group and especially Air Logistics, but not only, are well positioned to serve increasing COVID-related demand.
So we are here to drive growth that we see through the demand of all the COVID-related demand related products and versus the e-commerce demand in some of the trade mix.
Let's continue with Road Logistics slide 11. The demand of domestic transports in Europe returned to pre-crisis levels. So we were very happy to see this happening especially in quarter four. The high yield in cross border volumes are still lagging. But there was a spike that we experienced in pre-Brexit demand last six weeks of 2020 or so. So there was a stock build-up that we experienced and for sure, road logistics benefited from that as well.
North America unchanged, volumes are lagging behind. And there are only two exceptions, which is pharma, not surprisingly, and also e-commerce. Fulfilment that saw growth in our networks, the rest is rather depressed and we see less volume growth.
Slide 12. I mentioned that in our quarter three call, and I think also in our quarter two call. Road Logistics is our hardest hit business unit, with a strong recovery in quarter four, really. But - and you see this in the shape of the graph, and the pictures are in sync here, which is not by chance, obviously. So we have driven the graph according to the picture. That was our intention. But we see a shipment recovery.
And we have seen a shipment recovery in the fourth quarter. But the shipment recovery shows also much lighter average weight of the shipments. So this drives productivity or the gross profit per unit down and is a productivity strain that we are dealing with.
At the same time, we still lack the export and events business and that is dragging on the results. While some of the export and events team found a new home dealing with the last mile solutioning for vaccines, distribution and vaccination, so to say.
We have seen a very positive trend last year in the booking development of eTrucknow, our online platform for Road Logistics. And I can tell you that we have rolled this new blockbuster out into more than 14 markets worldwide. And it's used [ph] by the customers or the markets in using that platform for their bookings.
In total, the EBIT for the full year 2020 in Road Logistics was at CHF 62 million, which is 20.5% below prior year. And last year - last quarter was exceptional, all sorts of very positive development. That at least was for sure highlight in Road Logistics.
On slide 13, next slide, you will see the details of Contract logistics or the front page of Contract Logistics and before we get into the details, let may state one thing. In 2020, especially, but also already in 2019, but in 2020, especially Contract Logistics coped successfully with two challenges. One was the pandemic. And we mentioned that there was a nice and an ugly face to the pandemic. Because we saw extreme volume declines on one side in our Contract Logistics operations for customers serving industries that were either shut down or had no demand, have not seen any demand and volume spikes in other warehousing locations where we were dealing with essential goods or pharmaceuticals or e-commerce fulfillment.
So both has been a challenge for our Contract Logistics teams around the world. And in addition, the business and portfolio restructuring was continued with full speed and full focus throughout 2020. Today I can say Contract Logistics, congratulations, mission accomplished, restructuring completed. And that's the main message, as we have stated by end of 2020 this should be accomplished and it is accomplished. And now we have a very strong and solid base to selectively grow that business further in the months, quarters, years to come.
We experienced market share gains in pharma, healthcare and as in e-commerce fulfillment and from the disposal of a business in the UK, a contract logistics business in the UK experienced net one-off impact of CHF 42 million in quarter four 2020.
On the next slide, a couple of details on the Contract Logistics development. We saw mid single digit business wins in Contract Logistics, assets, e-commerce and pharma, mainly, we operate more than 150 [ph] e-commerce fulfillment centers around the world, and we see an increasing portfolio profitability. If you look into our key data sheet, at the end of the presentation, you will see that the EBIT margin operationally improved from 2.4% in 2019 to 2.5% in 2020, given all the restructuring, and if given all the headwind in some of the operations from the pure operational point of view, I think that's a fantastic performance.
The idle space is at the very low end. If you would have asked years ago, I would have said it's not possible. But we are below, slightly below 2% idle space at the moment. And it's a very healthy figure, which is managed very carefully and diligently by our contract logistics team.
So after the mission completed signal has been given to contract logistics or has been given by contract logistics, I should say. They have started now to shift back to selective growth mode again. And that is fully analyzing market opportunities and focusing on those solutions that we can scale throughout the organization. And that are in markets that are complimentary to the rest of the network businesses as well.
So 2020 has been a bit of a roller-coaster, but we have driven and managed that roller coaster well. It has been an excellent team performance throughout our organization. And I know it's an analyst call. But let me say a heartfelt thank you to all our colleagues worldwide for what they have achieved and done and contributed to our success last year. Thank you.
And now I'm pleased to hand over for key financials and the secrets of the figures, to Markus, our CFO.
Thank you, Detlef. And also welcome from my side too, ladies and gentlemen on the call. I'm starting, as usual page 16 of the presentation, income statement. And indeed, it has been a year of extraordinary events. I think, looking into the full year numbers, they do not, at least justice to what has happened on the development of the year. I think what started as a maybe a series of unfortunate events, what we thought would be the second quarter of 2020 has really given a lot of uncertainty and volatility into business, and it's also in the numbers.
And I would like to just point out a couple of facts how the year developed when you look into the P&L statement. On the paper, we have ended the year with CHF 506 million less gross profits than we had a year ago. And knowing that as nearly every year, the translation impact into the Swiss franc is negative, it has been negative to the effect of CHF 425 million out of this CHF 500 is actually attributable to the exchange rate differences.
So, a year that has been very difficult and challenging and only put up speed and recovery on the third and fourth quarter ended up basically at the same level of gross profit than it had been a year before.
And moving down slightly in the P&L to the EBIT line or EBITDA line either way, and not only that we have extraordinary events in terms of business development, we also have two extraordinary events in the third quarter positively impacted by the early termination of the acquisition from Quick in the US and the fourth quarter negatively impacted by the impact from the deconsolidation and the sale of the parts of our contract logistics portfolio in the UK. You will find the details on each of these two main special effects in the key data sheet.
However, when I normalize and when I look into - only normalizing these two events for the quarterly review, you can say already the third and the fourth quarter have tremendously increased in profitability and had been substantially better than a year ago.
Having said that, that drives for sure conversion rate and all of you on the call here are very well aware that our target conversion rate for the group is 16% and I can tell that operationally, so adjusting for only these two main impacts, we would have a conversion rate in the third quarter and fourth quarter each above 16%.
I think that is for the very extraordinary year that we have behind us, the sign that it can be done, and that we are not deviating from our targets to achieve 16%, which is our group target.
Moving on to page 17, shedding a bit of details around the extraordinary effects that we had. And small illustration of what has happened, you can see here the bridge. Coincidentally, I would say there is the negative and the positive impact of the two larger effects, have been nearly cancelling each other out. And you see the foreign currency impact on them [Technical Difficulty] EBIT is CHF 64 million. Normalizing for that, you see very clearly that the improvement year-over-year in what we call a crisis year is 10.4% or CHF 105 million.
And important page number 18. As much as the P&L statement can move up and then I think one of our focus areas is the stability in the balance sheet. Very important, we have a close eye to our cash position for sure. And to the risk that we have in the receivables, either half today or always forward looking, what do we have to expect for the future.
I want to highlight three topics here in the balance sheet. Some of you may ask, well, okay, you have sold the UK part of the business, you still keep it on the 31st of December on the balance sheet? Fact is that we have deconsolidated as of 1st of January 2021. Hence, as of the 30th of December, you'll see here still the - both position asset-held for sale and the associated liabilities with it. However, the P&L impact has been recorded as required IFRS in December 2020.
And cash and cash equivalents CHF 1.7 billion, nearly on the - of 2020. You have to see that of course, also in the context with the acquisition of Apex, you have seen in our annual reports that we have disclosed the range of the purchase value between CHF 1.1 and CHF 1.2 billion for the share that we have purchased. Hence, you see, that was - I think, expected also, since last year, when we declared our target and focus on Asia acquisition that that will happen in such a magnitude I would say.
At the same time equity ratio improved from around 23.6% last year to 24.5% this year. So very well in the range where we are, I think we can talk about solid and healthy equity ratio.
And cash is king, not anything I would usually being like to be quoted for, but I think in times of crisis is something that is even more important than in normal, ongoing business.
Page 19. And I would again point out one thing when we look into the cash flow from operating activities, variance between 2019 and 2020. It is remarkable that it's nearly the same number. And I think it doesn't look like it's coming out of a year of crisis.
But I think what it does is, it reveals the hard work, the dedication and the effort of each of the employees of the group to actually make it happen. We often talk about this stringent management and cost management and also receivables, credit management, cash management, but I think we have put - we have put that to the test in the year 2020. And I'm very proud that from free cash flow perspective we have delivered that huge amount in 2020.
Main driver of course, working capital KPIs, page number 20. We ended the year with working capital and networking capital of CHF 570 million and representing a 2.3% working capital intensity. A ratio that is, I think, very remarkable. I would just be clear also for the coming quarters, I think 2.3% is the level that we should consider at far below our corridor that we have set ourselves for market growth and normal net working capital requirement. I believe that in the regular quarters during the year, that number will get close to 2% to 3.5%, where we usually sit with our net capital intensity.
Switching from working capital management to return management, on page 21, return on capital employed. You may remember even in the days where the return on capital employed number was around 50% or 60%, I never stopped insisting that the calculated return on capital capacity on the balance sheet and the business we have is around 70%. I think we made it now, we are around 70%, is now 75%, 71%, but I think it is at the right level.
Hence, I think it is very - we are confident that we can confirm our financial targets for the growth that we have not changed. And we can reiterate those on the return on capital employed 70%.
Effective tax rate between 24% and 26%, working capital 3% to 5%, the ones that follow us for a longer period of time. That has been 3.5% to 4.5% previously. But we have extended the corridor a little bit downwards to reflect the group management of working capital we have. And again, the confirmation of our conversion rate of 16%.
And one of the elements to achieve to 16% conversion rate, of course, is gross profit margins, some of the extraordinary good business that we have been able to manage over the last two quarters, but also the progress on our most important initiative in automation, what we call eTouch.
And I have added in that presentation, two pages on eTouch. I think also to illustrate again, what is the context of eTouch. So that we remind ourselves again, what it actually is. And you see here a little pictogram, you know, of how the branches have operated in the past. And what we call the efficient way, but it was kind of the master of his own efficiency by sequencing the way of work.
Now that has been more managed and organized centrally on what is the workflow, this is on the left side, bottom. And part of these components are now being shifted step-by-step, also depending on the implementation of our backbone, operational system in Sea and Air Freight has shifted into shared service centers, operation or even being entirely automated. That is really the driver of what we do.
What do we do with the effect of that? There is always twofold and very cautious in what I'm saying here, twofold to the extent that we are saying and there is lower costs associated with this? Yes, of course, we can use in a cheaper way. You have seen some of that already in the P&L. I'm going to come to that back in a minute.
But also, we improved service quality for customers. And I think the last year has shown that service quality for customers and being able to offer individualized solutions to customers that have an immense demand for solutions in times of crisis is something that attracts new business, keeps both our customers and lowers attrition rate.
Just as an example, when we today - when we talk about costs in the Sea Freight arena. Prior to 2020 situations, we probably had a very – we certainly had a very well-managed communication with carriers that immediately has gone into a much greater effort and I want to do today one booking for containers. What probably was and I'm just picking random numbers.
What probably has been one phone call 18 months ago is now 5 phone calls with carriers to make things happen. There is no container available, the containers in the wrong place in the world. We have to create a lot of additional effort, that we have a lot of additional efforts to make supply chains actually work. So, even looking at our current situation, which is certainly far more intense servicing, I think our cost base has been stable or even reducing a bit.
Which leads me to page number 24 and I emphasize this is one snapshot out of the Air Freight arena where we are more advanced on the eTouch operation. So, whereas it is certainly more difficult to quantify the service quality right, and the management is indirectly as I said, is through higher customer satisfaction, lower attrition rate, more customer gains. So - but there is no KPI out there that is reflected in our financial numbers.
But the cost side can be monitored very closely and on this slide we have tried to spread a bit of transparency. And forgive us, we are trying not to be explicitly transparent also, in terms of some of our competitors may be looking into some of our slides as well.
So we have grouped some of the activities into clusters that you can see here and we have looked into the hours, man hours saved, we always talk about the personnel cost, of course, man hours saved that we have been recording here in these activity clusters, then have put a value to it. That value is - although it looks like round number, 30, 15, 16 or so. But there are numbers that are very, very well and very close to what we calculated.
You can see that through these activities in Air Freight, we have already managed an improvement on conversion rate of around 1.1%. Some of you may remember, I said an improvement with full rollout of eTouch is an equivalent of around 3% improvement of conversion rate, I think that clearly reflects where we currently have to and again, also should reflect a certain confidence to get there.
All therefore mentioned, the eTouch conversion rate, cash generation, free cash flow and so on, I think that should give us also the or that has given us the confidence to put forward a proposal for the dividend for the year 2020 to be paid out after approval of the AGM in 2021 of CHF4.50 at a gross level. And I think it also reflects the expectations for 2020 with what we said, our acquisition ambitions in Asia and I think a quite satisfying return on the dividend side.
With that message, I want to thank you and handover back to Detlef on the topics of our acquisition.
Thank you very much, Markus. During the last year, the pandemic year, a crisis year which we tend to forget when we look at the figures, our strategy has been clearly confirmed and in all aspects. The strategy, if you remember, right, is a blend of customer, technology and people and we have a lot of programs running. One Markus was presenting in detail, which was the eTouch program.
But we also said that this implies a strategy also has an M&A element and we made clear statements on that, also during the last calls. We always were doing bolt-ons as we call them or you call them and we always stated that Asia is in our focus, especially was sizable asset light operation with an attractive or giving access to an attractive Asian customer base.
We were very happy that eventually with Apex Logistics, we found exactly that fitting target so to say, and we announced Monday last week, the signing of acquiring 87.3% of the Apex Logistics Corporation and for a purchase price that Markus has stated in the range of CHF1.1 to 1.2 billion.
We have posted some details on that slide 26 here, which I will not read out to you, but it's sizable business. It's interesting competence. It's focusing on where we are weak at the moment, the Trans-Pac, as well, the intra-Asian trades. And it's also giving us access - an expertise in e-commerce fulfillment, hi-tech and e-mobility that could be complimentary to our customer base.
We buy the stock on a debt and cash free basis. And as always, this may be the earnings are immediately accretive for 2021. And as always, please expect also a material impact on the EBIT from amortization of acquired intangible assets, the typical approach that we apply.
There were some questions posted or announced on the EBIT of Apex. And there was from our side [ph] of your very good assessment, was one of the analysts that stated that the EBIT should be around CHF 100 million per annum on a continuous - on a continuing basis. So I think that's a very good range.
We will not show any details or figures at the moment because Apex doesn't belong to us yet. And we expect closing by quarter three 2021. So that in the quarter three we thought we could do or will do for sure a deep dive on the Apex figures and how these are then complimentary to the Kuehne + Nagel figures.
We are excited about this because it confirms that an asset light target is available. And we were always looking for successful competitors, so to say in the market, rather than restructuring cases because we wanted to combine strengths with strengths for leveraging our customers business.
The other strategic element that we always stated in the last year's part of our strategy has been sustainability. And also in the pandemic year 2020, despite all the restructuring and M&A and so on, we continue pursuing our sustainability targets.
Based on the principles, identify, avoid, reduce, compensate, all four principles are part of our doing in the sustainability sector. And it's an important program that we launched. The program is called Net Zero Carbon, it has hundreds of initiatives and program is running, some of them are internal, some of them are supplier-related and some others are customer-related.
In 2020, for the first time ever, we were CO2 neutral for our own emissions, Scope 1 and 2. And we push hard to achieve the target to be CO2 neutral, the entire emissions, including Scope 3 by the year 2030.
For that we are also an active participant in many sustainability initiatives. And we are listed in the Swiss Performance Index, ESG and ESG Weighted, as well as in the Swiss Bond Index for the ESG category.
You will for sure hear more of that development throughout the next analyst calls because we believe that we have responsibility as one of the leading players in our industry to signal that CO2 emissions and the reduction of those matters for all of us.
And last, but not least, let me summarize the key investment highlights, because we had some discussions with you and questions recently and let us conclude on who we are and how do we do our business and what can you expect next?
First of all, we are building on upon 130-years of success. And this is based on a global leadership, as a sustainable high quality integrated for water and contract logistics supplier. So the integrated approach is important because we are one of the few that can holistically find solutions for our customers worldwide.
We are specializing in tailored, asset light, industry specific solutions and we have mentioned pharma and e-commerce, very often in these days, but there are other specialized - so that we pursue. For example in the aerospace industry, interior chain for example, in farm - in projects business, product logistics, in reefer and perishable. So there are areas where we have experts and solutions that we scale around our lope - around the globe to service our customers.
The basis for this is our strong in-house Information Technology and Innovation platform, which we invest in continuously. And that is always on the latest state of technology, and very important driver for our e-commerce initiatives, a very important driver for our other platform activities that have gained a lot of traction, especially last year.
How we grow? We concentrate, we focus on profitable organic growth, and complemented by strategic bolt-on acquisitions. And the last years not only was epic, but with other acquisitions, we have shown that these bolt-on acquisitions can create a very significant impact, positive impact on our further organic growth, but also on the P&L.
And how we think? Had we mentioned that also in some of the calls, we have the pleasure and the honor that we have a long-term vision, that we can pursue our long-term vision, which is supported by a majority of ownership that is also long-term or forever. And that helps us to stay on course, even in times of a pandemic or other crisis, and to pursue targets like an acquisition or development of business niches organically ourselves.
And having said so, that is the key investment highlights of the Kuehne + Nagel organization. And here with, I’ll hand back to Maura and we are looking forward now to Q&A.
[Operator Instructions] The first question is from Daniel Roeska from Bernstein Research. Please go ahead.
Good morning, gentlemen. Three if I may. Number one towards the volume growth. What are the main reasons why kind of in Europe mind - Europe lagging the market a little bit? And what needs to achieve - what needed to change in order for you to achieve your twice market growth target again, kind of what's the path from here on? And when can you kind of grow back into the market and take market share?
Secondly, in a call earlier, you mentioned kind of a update on medium, longer term targets, probably later this year after Q3. Which means you're probably reviewing strategic targets right now. What's the focus of that? Kind of what which areas are you looking at? Kind of what are some of the themes you're considering?
And then maybe on the Apex business, you already said, kind of what Apex brings to the Kuehne group? Could you know, flip that around, and what is it that Kuehne brings to Apex, given that you're running this now at a kind of arm's length or with minority share in a way. What benefits does Kuehne bring to the Apex business? Thanks.
Hi, Daniel. Detlef, speaking and I'm happy to answer your questions. Let me start with your first question, volume growth. We are talking about a pandemic year and yields being in a off-equilibrium situation, the supply side of capacity being very tight. A lot of the commodity businesses couldn't afford the rates anymore virtually.
So we are talking about forestry products, we are talking about parts of the recycling business and so on and so forth on paper and so on. And all this led to a different cargo mix, which was more advantageous. And also we were more selective, especially in quarter four in Sea Logistics, accepting cargo when the market was so tight that it was very hard not only to find capacity on the vessels, but also to find some containers empty to be filled with whatever goods.
We have to review whether twice the market will be a target for the next 12 or 18 months. In principle, I would always say yes, that's our target and it's doable. But given the market situation, there better - we might be. It's not an answer, we might be better off in being more selective for the next couple of months because there will be no major change in the next - in the next maybe months or quarters to be expected.
We stated that we would review our targets and I think it's also clear, with Apex joining Kuehne + Nagel eventually throughout this year, and becoming part of Kuehne + Nagel, even if it's continuous standalone at arm's length, I think we have to review our target setting.
But this is a process that has no hurry because we confirm again our 16% conversion rate target for 2022 for the whole group in the mix or in the in the setup as – that we have stated when we went through the details with you during the Capital Markets Day, at September 2017. So, expect maybe an answer end of this year, early next. But it's still two years to go. Now we are we are all impatient, like you, but it's still two years to go. We have started the fourth year of a five year strategy, plan implementation.
And your fifth - your third question is what can Kuehne + Nagel bring to Apex? Apex is a strong player in air logistics Intra-Asia and across Trans-Pac. And this strengths has a chance to be leveraged with Chinese or Asian customer base into the Kuehne + Nagel networks. In Sea Logistics global, but also when it comes to European, Middle East African or even Latin American customer base.
So we can mutually benefit from network access, both - in both directions. And we bring complimentary solutioning to Apex with regards to maybe road logistics, contract logistics, but for sure sea logistics and maybe also with some of our niche solutions that we pursue.
The next question is from Robert Johnson from Exane BNP Paribas. Please go ahead.
Good afternoon, Detlef and Markus and well done on the strong results today. Three questions from me also, please. First of all on air freights, could you perhaps provide some additional detail on what drove the gross profit per kilo to such a high level during Q4? You obviously mentioned a focus on high yield volumes during your comments. But was that the only factor or were there any other factors at play, such as locking in capacity at attractive rates or successful using your dedicated capacity or anything else? I guess what I'm really trying to get a feel for is the sustainability of the GP per 100 kilo load around the CHF 95 level?
And second question on Apex. You said in the press release when the deal was announced that Apex would be operated separately within the Kuehne + Nagel Group, could maybe just talk a bit more about the rationale for taking that approach. And also maybe just talk about whether you see any material operational synergies from the deal?
And then finally, just on the purchase price of Apex, you mentioned the CHF 1.1 to CHF 1.2 billion on the call for the 87% stake. Could you also maybe just provide an indication of how much net debt will come with the acquisition? Thank you.
Sure. Happy to answer your questions. Let me answer the latter. We - I think we have stated that we buy Apex on cash and debt free basis. And that is the clear answer to that. So Apex operated separately was your second question. The rationale is, it's a different customer base. And yes, there are some synergies, but it's a gross M&A. It's a strong player, it's a successful player. And we want to combine strengths, as I mentioned before.
So it's orienting - its orientation is to continue growing with its customer base and deploying the Asian markets, as much as we can, and offering network access for both sides. So them joining our networks where applicable and vice versa.
Standalone doesn't mean that we don't have synergies, we will have for example, procurement synergies, most likely, but we want to keep the strong and very experienced management of Apex in the Kuehne + Nagel organization and the freedom to act is very important to them, because their business is similar to ours, but their customer base is different. And that's the beauty of that deal.
Your Air Logistics question, you will get an answer now which might sound funny, but it's a Sea Logistics answer. Because high rates, very constrained ports and low capacity or low capacity no containers and sea logistics heavy especially for some of our customers to move parts of our effort and it was a you know, a top decision to ensure that the Christmas business and other goods are right on time at the destination. And that for sure has led to higher yields and also the volume development.
In addition, we have the cargo mix is different because perishables is under pressure and the perishable portion of our total volume has been reduced relative to the rest. And that altogether leads to the figures that you have seen in quarter four.
All very clear, thank you.
The next question is from Sathish Sivakumar from Citigroup. Please go ahead.
Thanks, Detlef and Markus. I’ve three questions here. Firstly, on the inventory levels. What are your customers are talking about in terms of the inventory levels? Where are you seeing versus 2019 across the different verticals? And just following up on that, are you - is your customers actually factoring a potential impact on consumption from the vaccine rollout and opening up of the hospitality sector?
And my second question is on contract logistics. You know, in the past you used to give a split between the warehouses and the solutions. If you could just give some color on it, where we are today, between the warehouse and solution?
And then are you seeing any pressure on acquiring more warehouse spaces for your customers and you already flagged that you're operating at a low idle space? And what are the growth opportunities that are you likely to target? Is it fair to say that division will see growth from Q2 onwards?
And finally, on the financials, if you could quantify the overall impact from the government support in 2020, like the furlough schemes and force majeure, and so on? And how does one should think about it going into 2021?
Okay. Sathish, hello, and let me answer your questions. Inventory levels, I think it's different for industry, and it would take very long to go through all the industries. But in principle, we have seen inventory levels being built up in quarter four, and partly early this year.
This is driven in quarter four, it was driven, especially in Europe, by the Brexit, so many of our customers have built up inventory levels, pre-Brexit end of last quarter, and it's partly driven by certain commodities that are more seasoned business. So DIY, for example, driven or impacted by the pandemic.
And as I said, in our short presentation, at the moment, the consumption pattern has changed, but consumption is happening and consumption is happening in-house, apartment, garden and leisure, private sports, so to say, and that is very strong.
The impact of consumption with the vaccination, I think it's by far too early to say, Sathish. We are - if you ask me personally, one year away from seeing a real impact of the societies globally being vaccinated by a degree of minimum 50%, 60%, 70%. We do not expect a major rebound of hospitality or leisure sector where people can, you know, meet other people with hundreds or thousands in the next, let's say two or three quarters, would be very surprising. The focus is and should be on vaccination and the rollout of vaccines and that's the most important topic.
The sea air special services I mean, the focus is on pharma and e-commerce fulfillment. I think we mentioned that, which is a huge part of the portfolio already today. But our target is that 30%, 35% of the total portfolio is a pharma and healthcare business.
We scale some of the automotive solutions right now and industrial solutions, but that's it. We are not pursuing isolated standalone warehousing, simple warehousing businesses anymore. And that would be my feedback to your first three questions and then there was a fourth question question, which Markus is happy to answer.
I think your fourth question was on government subsidies, I have to emphasize that the company itself has never received government subsidies. So we're not talking about liquidity bridges or anything else that other companies have drawn from government.
So the supports that our employees have received through short term labor or any programs like furlough programs. And you can see that in our annual report, we have disclosed it as the [Technical Difficulty] impact employees and through our payroll have received subsidies in the total amount of CHF 83 million. But again, I emphasize the company itself has never drawn on any government subsidies.
And just to follow up on that Markus…
Thank you, Sathish. If you need any further question, please address either to Chris or go into the annual report, please place. Thank you.
The next question is from Neil Glynn from Credit Suisse. Please go ahead.
Good afternoon, everybody. Thanks for taking the questions. And if I could ask two please. The first one, just on the subject of M&A again, from my vantage point over the years, Kuehne, as an acquirer, it's always been a bit difficult to judge given the scale of acquisitions in the past. But you've obviously bought targets with specific capabilities and customer bases in the past.
So would it be possible to help us understand whether with Quick or any other acquisitions, how your governance approach has worked with respect to that M&A, how you've measured synergies and any tangible fruits of synergy within those deals in the past? Just to help us think about how you'll manage Apex going forward?
And then the second question a bit more specific on the financials, with respect to lease liabilities. And the lease liabilities on the long-term side, or the non-current side, stepped up about 9% in the fourth quarter on the balance sheet. At the same time, the cash payment for lease liabilities in the fourth quarter was down to CHF 101 million, whereas the prior three quarters, it had been around CHF 130 million. So just interested in what exactly happened with respect to the lease liabilities and the cash associated in the fourth quarter, if it's possible to provide some color. Thank you.
Sure. Maybe I take the second one first, on the lease liabilities, I think it's a function of renewal of longer term leases, that obviously puts on to the - puts onto the balance sheet with on the one side, right-of-use assets and the other side, lease liabilities increasing. So it's a function of thinner [ph] rather then increasing cost base. So that's why you have different dynamics around the cash out. And actually, what happens on the balance sheet. IFRS 16 is - I try to be as polite as possible, helpful on that one.
Thank you. I appreciate. It's a really – its probably frustrating question.
No, no, it's fine.
And then a question regarding M&A, Neil. The - you're right. We have a track record of bolt-on acquisitions. And it's always focused on either a niche, a solutioning, or access to customers, that we were looking at a competence that we could not build up ourselves in the short time organically.
And I'll give you two examples. In Air Logistics to compare this with, we have acquired CSI, the market leader in perishable logistics in the US, which became an integrated part - integral part of our perishable networks globally.
And then we have acquired a couple of years ago, Quick as the market leader or one of the market leader, was not the market leader in time- critical shipments, which is a complimentary and integrated part of our solutioning in the pharma and healthcare sector and also in the aerospace aviation AOG solutioning.
So what is the principle? We acquire a nucleus and then we scale that nucleus into the markets that we have access to or our customer base. And at the same time, we offer a much broader range of services to the nucleus’s customer base itself.
Understood. And just - and thank you for that Detlef. And I guess, I mean, 2020 has obviously been obscured by a myriad of factors, but from your perspective in terms of how you assess the value created by CFO - CFI, which I think was 2017, and Quick, internally, do you judge it as the incremental contribution to EBIT per 100 kilos? Or what is the central truth for you, when you asses it?
I will answer with Quick. And quick is the nucleus to have gotten access at a very early stage of research and development, Phase 1, 2, 3 testing in the COVID-19 vaccine development. So we deal with many OEMs via Quick at a very early stage of their product development. And then we hand that customer over eventually to become a customer of ours in the normal air logistics or other networks, when it comes to vaccine distribution. So I think that is - it gives you the best example.
Without Quick, our vaccine solutioning would be not as strong as it is today. And we would not be able to deal with more than 300 pharma OEMs in some of their solutioning and research- research phases that eventually become then a high scale product distribution business worldwide.
Great. Thank you for the detail.
The next question is from Andy Chu from Deutsche Bank. Please go ahead.
Afternoon and well done on some fantastic numbers. Three questions, please. In terms of air freight yields, I guess a lot of people are thinking about the air freight yields will collapse, as we go through the year, so just wonder what your view is on air freight yield capacity in the market?
Secondly, on the Apex acquisition, if you look at sort of EV to sales, you can quickly get to sort of 0.6 times EV to sales, that would imply something around 6% EBIT margin. I think there was some press articles around $120 million of EBITDA for Apex, I wonder if you can help us maybe with a sort of profit number for Apex?
And then just - maybe a bit of a weird one, just in terms of contract logistics and the Airbus contract, which apparently, if I'm correct, has gone back in-house, and there was - but there was a an article, again, in the press around say the picking up some Airbus contracts, but I'm not sure whether that's - the business that he lost and was taken in house or maybe a comment please on Airbus and whether that might be material and then why was that contract taken back in-house? Many thanks.
So I will take the Airbus question first. And the Airbus contract which we handed many years, we indeed handed back to Airbus, and most of it is taken back in house. And I think Airbus has also announced that the production figures have decreased significantly and will stay on a very low level for the years to come.
And we mutually agreed that the best solution would be to do what we will do in the next couple of months to hand back that business to them. And parts of it might be subcontracted to a local service provider. But the majority, two third of the contract is in source internally and the rest is with this local provider. The other two questions [indiscernible]
Let me take the Apex profit number. And the surge for it, I think is, I have to be very clear. We had multiple requests as you can imagine, to disclose some of the profit numbers. I have to emphasize one thing, we are in a period between signing and closing and in the unlikely event, the very unlikely event that closing would not happen, we have an obligation today not to disclose any numbers that would not be public.
So Apex has never published numbers to the extent of their profitability. So I can not respond to your question today. If I may ask you that, we have to respect the fact that between signing and closing that is the situation we are in. We can only as we did previously, we said there is some reports out there that we will not endorse, but we will find or we would find reasonably well analyzed. So I cannot go further than that and please forgive me that I cannot do more than this.
Good. And then your first question, air logistics yield collapse, you said, I would like to remind you that the market at the moment is driven by a lack of belly capacity, significant lack of belly capacity, we are around 90% down to the normal belly capacity that we have seen in the networks globally in 2019. And we do not expect and nobody knows, but we do not expect this capacity to be back and available before 2024, 2025.
And Markus has given you some details on eTouch, before our counter response to that development will be a much higher proportion of our processes and shipments being shipped eTouch, because that's the – the purpose so to say of our eTouch approach. I hope that answers your question.
Yeah, it does. And thanks very much for those answers. And maybe just quick follow up on the air freight yield, does that in effect mean that you think that air freight yields for ‘21 and the second half remain relatively resilient than either the capacity, you know, it comes back in 2024 and you mentioned 2025, and therefore actually a strength in air freight yield should remain for the foreseeable future? Is that the conclusion?
I would say your conclusion is correct for 2021. And we might see the first signs of yield slight, not collapse, slight decline, as of 2022, speculation. It really depends on alternative capacity, which is belly capacity.
Sure. Okay, that makes sense. Thank you very much.
The next question is from Mark McVicar from Barclays. Please go ahead.
Good afternoon, both. I hope you're well. Just two quick questions. First one because we were talking about supply you know, containers supply is clearly a mess all the reasons you know, we understand around boxes in the wrong place and the lack of people capacity of terminals. In your planning, how long is that going to take to unwind, is it another quarter from here or two quarters or longer than that?
And the second question is just to pick up on, you know, you talk about the US road volumes still being quite weak, what are the specific industry verticals that are still down so much?
Okay, Mark, hello. Detlef, speaking, let me answer your questions. Container supply is tight, because the demand is there, but we have a congestion at the port and this congestion is driven by all the health and security measures the pandemic has caused. At the moment you wait in Long Beach for the vessel to be unloaded, 16 days one six.
So, one aspect to get off that hook, so to say or to ease up the container situation is to fasten the ship handling in the ports. We would expect this not to be solved before summer this year, yeah, and it depends on vaccination, depends on other security measures and so on and so forth.
The other topic with regards to your industry or industry volumes and situation, I would say at the moment we have a very distorted consumption pattern and that drives also what is happening in the US, it drives the demand and the level and some of the industries have a very low consumption. For example, the aviation aerospace industry with spare parts business they are at 90% of the planes are still grounded.
We have other industries the whole what I would call leisure, private entertainment, travel, restaurants, hotel industry, even cruise lines, they are not existent at the moment, as showing a demand that is significant. So all this together will need and we mentioned that during the presentation, more higher percentage of vaccination grade in the societies we are doing business in and that will take time.
So at the moment, most of the industries are not on a level, volume and consumption level that we have seen before and e-commerce is the alternative consumption pattern because consumers have money and they want to spend it. But it's a different channel that is used. I hope that answers your question.
That's great. Thank you very much.
The next question is from David Kerstens from Jefferies. Please go ahead.
Good afternoon, gentlemen. Two questions, please. First of all the IATA figures published yesterday, I think they said volume is now back at the pre-COVID-19 levels in January, whereas capacity was down 5% versus December. Does it mean the market is still tightening? And that we could actually see your average yield to go up even further in 2021, rather than declining to a more normal level?
Second question is regarding to - regarding the divestment of the drinks, contract logistics drinks business in the UK to XPO logistics. When was this business deconsolidated? I think the approval was early January, I was wondering what the accounting effects were that you are normalizing for any bridge on slide 17, the CHF 62 million. And I think in the press release, you highlighted a one-off impact of CHF 42 million in the fourth quarter? Thanks very much.
Sure. So let me start David was the drinks logistics, we announced that deal with XPO, I think early March last year, if I'm not mistaken. And it took until end of last year to get the approval from the antitrust authorities or the merger control authorities. And the numbers of 2020 include fully the care [ph] and drinks logistics business that we have disposed. With the 1st of January 2021, the deconsolidation has happened and the colleagues of drinks logistics now find a better home at the XPO and we are happy for them.
The IATA volume figures, I think we mentioned that before, the market is tightening because it's tightening is there - is additional demand coming into the average networks from the so to say time-critical shippers that cannot rely on sea logistics anymore, as they have to wait in Long Beach, for example 16 days to get their container unloaded in the port.
So that is causing an additional demand. And the city is still tight, we don't see any change in capacity. And belly I mentioned before, I don't think we need to repeat it, 90% of the belly capacity is not existent anymore. The majority of belly is existent only intra-Asia.
Understood. And the CHF 62 million, if that's the one-off accounting effects plus the EBIT that you take out of the…
No. Sorry, David, that's only the one-off effect, operationally the EBIT is shown in the contract logistics business. There's an additional negative EBIT effect because we had lockdowns, furloughs, and couldn't ship and no consumption in restaurants.
I think David, there is two things, you're referring to the 62, which is the one-off from the XPO sale and the quarter four we have 46, right? And the difference to that is there's also other one-off effects that are smaller on the single unit. But we have highlighted the one in contract logistics, there's also some real estate, so the usual one-offs that we normally disclose. So I think that's a bit too confusing.
Okay. So that's the CHF 20 million that you show is all understood. Thank you very much, gentlemen.
The next question is from Michael Foeth from Vontobel. Please go ahead.
Yes, thank you. Good afternoon, gentlemen. Just two questions. One is you mentioned that some of your teams in the cross-border road business are now focusing on last mile vaccine distribution. And then I think you also mentioned two examples for that in your press release.
Considering the difficulties countries have with the distribution locally, are you seeing more demand for your services and can you fulfill those demands? And is it an attractive business for you? That will be the first question.
And the second one is just, if you are interested [ph] to provide any directional indication of where you see sea and air volumes heading in the first quarter directionally? Thank you.
Happy to answer your questions, Michael. We mentioned road logistics but we mentioned a specialist team in road logistics which is the expo and event team, which usually deals with people flow and goods flow together in expo sites.
And the last mile vaccine business is interesting for us. But we have in many countries around the globe, a very federal system, and the decision is taken in the state or the county or the canton in Switzerland, it's not a decision that is taken on a government level.
So we are in contact with many. And we have announced the last mile distribution to 54, 55 vaccination centers in North Rhine-Westphalia on behalf of the North Rhine-Westphalian in Germany, so the most populous state in Germany, as well as in the canton of Zurich, which is the most populous state in Switzerland.
And yes, we are discussing with others, but so far, we are not able to announce others. While we also work for other OEMs, which we are not able to communicate openly. So this business is attractive, because we have an idle team sitting there and rather than going on furlough with them, use their expertise for a very, very important solutioning that is demanded by societies at the moment.
Thank you. And on the volume directions?
So the second question was in sea and air freight volumes in Q1 right? As far as we can see right now, and obviously, what we can say on current trading, in air freight we certainly see an increase of volume in Q1 versus Q1 2019. And not only because of the demand increase in general, but also because we won a good number of new business in the second and third quarter 2020.
From the - on the sea freight side, I think we have still to a knowledge that currently and I was just - during the last two or three questions, I was looking up on sea explorer, how many ships actually are currently stranded in front of the US ports. And we have a total of 51 container vessels in front of US ports. So you can actually see that on our sea explorer platform that gives you that visibility.
So you asked me about what is the volume forecast? I think as much as any ship can carry and actually be on the water? The answer is that's going to be the number. I think we will own these, when it's really flushing through with containers being available, and maybe some of the supply chains being faster than today. How much was the real volume? So I wouldn't like if any outlook, I would say we will not see any movement for the next couple of weeks, or even for the next two months in that situation.
Okay, it's very, very clear. Very helpful. Thank you.
Next question is from Muneeba Kayani from Bank of America. Please go ahead.
Good afternoon. A few follow up questions, please. Under contract logistics business, what sort of margins should we think about now that the restructuring is complete? And then secondly, on dividends, now that you've announced Apex and that will close in the third quarter, how should we be thinking about dividends going forward?
And then thirdly, with your involvement in vaccine distribution, and kind of the volumes picking up now in the rollout of the vaccine globally. How do you see that impacting the air freight market for the rest of the year? Thank you.
Right. Muneeba, let me answer your CL margin question, I think would be our target to see a 5% EBIT margin for the CL business moving forward, sustainable, including our investment into growth because as you know, ramping up projects with investment in the beginning, but 5% I think would be a figure that seems to be sustainable in long run.
The third question with regards to vaccines. And I think we mentioned that during the presentation or at least I mentioned it today, I don't even know whether I mentioned it in the call today. We have - in the first quarter this year we will see 50 million doses being shipped of vaccines globally. And if you see that figure, it's rather small if you ask me, because we want to vaccinate, 8 point something billion people globally. So we will see 10 to 15 billion doses being shipped throughout the next couple of years.
But we know already from the production plants, and it's a production topic. And it's not a logistics topic. We know from the production plants that these figures will increase by a factor of five to seven in the next couple of weeks and months. So we will see a higher figure.
But the impact on the P&L is rather moderate. Because that is not - it's not a big part of our business that will drive our P&L here.
And with the dividends going forward, Muneeba, yes. Dividend going forward, you know, we have no published or dividend policy and write, I think we have to rely on what we have done and how we have been transparent in communication in the past. I think our dividend payout ratio is around 90%, 88%, 92%. I think that was based on an excess cash availability at that point in time and no targets that would have fit into our strategic development plans for acquisition.
And the moment that has changed, I think we have been very clear in communicating this that we have a focus on M&A target in Asia. And hence we have, I think, put back our dividend payout ratio around the 60% level that we have spoken to in various terms over the last 18 months.
I would like to believe that there is also the going forward situation that we have also demonstrated this year again, the payout ratio around 68%. I would believe that this is the way how we should think about the payout ratio going forward.
Is there any question operator?
Sorry, the next question is from Sam Bland from JPMorgan. Please go ahead.
Hi, there. I've just got two questions, please. The first one is on- so you’ve got the 16% 2022 conversion rate target, obviously above that in the second half of last year. Do you think that target could be reached the year early in ‘21? Or if not, what are the kind of drags and headwinds to the conversion rate to be aware of in ‘21?
And the second question is, I think I've seen some headlines today that you’ve been following Apex, the group might look at some further M&A and bolt-ons. Just can you confirm that and what might be left to do, does Apex, you achieve all that you wanted to achieve in Asia? Or might there be some other things in Asia that you'd be interested in? Thanks.
Sam, conversion rate targets 16%. We confirm that this will be achieved end of 2022. If we achieved that earlier, it will be another reason to review our targets I think for 2022 and the years beyond. But you know, it's a huge effort to get to the 16%. And we always confirm the target.
It's not a tick in the box yet. And as we said before, we have to be very cautious with the KPIs at the moment. 2020 was an exceptional year and so will be 2021. And that includes also the comps. So, we will achieve the 16% conversion rate in 2022. And we will work hard for achieving that. Your second question was…
Can you repeat your second question…
Can you please repeat your second question.
It was just in some headlines around maybe the business looking at further bolt-on acquisitions, even past Apex, Would be interested in what more thing? What might be interesting from that angle?
Right. Okay, so first of all, we concentrate on closing Apex and then driving the synergetic roles that we have alluded to before. But we will stay in the market and will be active M&A and the criteria for M&A has not changed, its competence, its customer access, its geography, trade lanes [ph]. These other criteria we are looking at.
And there are other segments where we could think about M&A, pharma, for example, pharma fulfillment, or the e-commerce fulfillment segment. But it's too early to say and don't start any speculations, please, because now it's on closing - the focus is on closing Apex.
All right, thank you.
There are no more questions at this time.
And thanks, ladies and gentlemen for joining our analyst call on the annual results 2020 of Kuehne + Nagel International AG. And we look forward to seeing and speaking all of you again, I think in seven weeks, mid-April, when we disclose our quarter one 2021 figures. In the meantime, stay healthy, get your vaccination, and we talk again soon. Bye-bye from Schindellegi.
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. Good bye.
- Read more current KHNGF analysis and news
- View all earnings call transcripts