Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NTG Nordic Transport Group AS (FRA:NRSA, Financial) achieved significant organic EBIT growth despite a challenging market environment.
- The company successfully completed two strategic acquisitions: DTK, which strengthens their position in the Nordics, and EDS and Rolls Freight, enhancing their UK presence.
- The Air & Ocean division reported an increase in transported volumes, driven by organic growth and startup activities.
- The Road & Logistics division implemented price increases in key markets, positively influencing gross margins.
- The acquisition of DTK is expected to contribute approximately DKK96 million to NTG's consolidated adjusted EBIT over the next 12 months, with anticipated annual synergies of around DKK24 million.
Negative Points
- Schmalz+Schön and ITC Logistics are underperforming due to a weak German market, impacting overall financial results.
- The EBIT contribution from recent acquisitions was significantly lower than expected, leading to dissatisfaction and the need for cost-saving initiatives.
- The company updated its full-year guidance to DKK560 million to DKK630 million due to uncertainties from US tariffs and performance in Germany.
- The Road & Logistics division faced a highly competitive market with low growth and ongoing pressure on freight rates, with muted volumes and an unexpected lack of seasonal spring volume pickup.
- The integration of recent acquisitions has led to a higher cost base, affecting operating margins and necessitating further integration and cost-saving measures.
Q & A Highlights
Q: Can you provide more details on the updated guidance and the impact of recent acquisitions and US-China tariffs?
A: Christian Dyander Jakobsen, Group CFO, explained that the acquisition contributed DKK5 million, which was below expectations. The main impact on guidance comes from acquisitions and the US tariffs situation. The uncertainty in the market is high, and the guidance range reflects this uncertainty.
Q: Are the earnouts for Schmalz+Schön and ITC Logistics related to financial performance, and could they be reversed?
A: Mathias Jensen-Vinstrup, Group CEO, stated that the earnouts are linked to specific customers and their trading levels. The current downturn in activity levels affects these earnouts, and while the situation is evolving, there is potential for adjustments similar to past transactions.
Q: What restructuring costs are expected for Schmalz+Schön and ITC Logistics, given the revised earnings outlook?
A: Mathias Jensen-Vinstrup mentioned that initial restructuring costs were EUR2 million for ITC and EUR1 million for Schmalz+Schön. Due to the current situation, integration efforts are being accelerated, and additional costs are being analyzed.
Q: How does the current situation with acquisitions affect NTG's future M&A strategy and leverage targets?
A: Mathias Jensen-Vinstrup acknowledged the need for reflection and adjustments in M&A strategy. Future acquisitions will be more cautious, with a focus on stabilizing current operations before pursuing new deals. The leverage target remains ambitious, but M&A will not be a short-term focus.
Q: What is the impact of the DB Schenker acquisition on NTG's volume gains and employee integration?
A: Mathias Jensen-Vinstrup noted limited customer wins so far, with ongoing efforts to recruit good candidates, particularly in Germany. The muted activity levels are currently absorbing potential gains, and the situation is being closely monitored.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
