Normal mail and parcel service across Germany despite corona crisis

For Deutsche Post and DHL, no change in usual service quality levels
CEO Frank Appel: "We continue to ensure reliable mail and parcel delivery."
Deutsche Post and DHL Parcel with special services

"This is a test - the kind we haven't seen in decades - but our customers in Germany can rest assured that we are doing everything in our power to ensure continued, reliable delivery of their mail and parcels," said Frank Appel, CEO of Deutsche Post DHL Group, reassuring customers that the company has taken the necessary steps to ensure basic postal services throughout Germany.

Currently mail and parcel delivery continues nationwide without operational restrictions, with the large majority of partner outlets and DHL Paketshops remaining open for business. This is also reflected in the latest service quality indicators: in the last two weeks, more than 90% of letters and over 85% of parcels were delivered to their recipients one day after arriving in the sorting center - the same kind of quality numbers achieved during normal times, i.e. without special restrictions.

Deutsche Post and DHL Parcel have also adjusted their processes to help protect against infection and ensure continued postal service. To minimize contact and reduce the risk of infection, as of several days ago, Deutsche Post DHL deliverers no longer require recipients to sign for parcels. As part of a pilot project in the Heinsberg region (Germany), Deutsche Post DHL is collaborating with food retailers to deliver food and other household products to higher-risk households. The service allows people with pre-existing medical conditions, older people or those in quarantine to stay home and avoid the risk - to themselves and others - of shopping in stores. Last Sunday, Deutsche Post provided special support to local elections in Bavaria, which took place entirely via absentee ballot and despite a delayed handing over of voting documents to the company. At the request of the Bavarian state government, Deutsche Post provided the additional service of a special collection run on Saturday evening so that the last absentee ballots could be delivered to election offices on Sunday.

All Deutsche Post and DHL facilities are required to comply with strict rules regarding hygiene and person-to-person contact. To protect both employees and customers, the required safety measures as recommended by the Robert Koch Institute are being implemented in all areas. Delivery employees, for example, are currently working in two different shifts in order to minimize contact. Some 30,000 additional liters of hand disinfectant were also made available to delivery personnel in the last several days. In the coming weeks, all delivery vehicles will be equipped with a water canister so that deliverers can wash their hands during their routes, since other facilities are currently inaccessible. As a precautionary measure, Deutsche Post had produced and stored over 1,000 protective shields for the postal outlets' counters. Ten days ago, these were sent to the partner outlets and installed. Additional partner outlets are gradually being fitted with protective shields despite the unusually high demand for such items around the world.

"During this difficult time, our deliverers, drivers, sorters and retail outlet partners are ensuring normal postal service across Germany," said Tobias Meyer, CEO Post & Parcel Germany. "They've received a lot of well-deserved recognition for this - not only from us, but from our customers. Deutsche Post DHL employees are showing tremendous dedication - each for his or her own town, and all of us together for Germany. For everyone in the company, and for me personally, it's a source of tremendous gratitude and pride."

Kuehne + Nagel sells major part of its UK contract logistics portfolio

Divestment of drinks logistics, food services and retail & technology businesses to XPO Logistics
Unchanged high commitment to the Group’s scalable leverage areas in the UK

Kuehne + Nagel enters into a definitive agreement to sell a major part of its UK contract logistics portfolio to XPO Logistics. The scope of the transaction includes the drinks logistics, food services and retail & technology businesses. These operations generated a turnover of approximately CHF 750 million in 2019 and are supported by 7’500 employees.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG, comments: "One year ago, we first announced the strategic review of our contract logistics business to improve profitability and focus on our core, scalable solutions. We have now reached a major milestone in this effort, having secured an agreement to sell significant non-core assets in the UK. With XPO Logistics, we are pleased to have found a good new home for our customers and employees."

Kuehne + Nagel remains highly committed to excellent customer solutions and service in the UK across all business units, including contract logistics. In particular, the company retains the industry verticals aerospace, government and pharma. These are amongst the Group’s scalable leverage areas.

Both parties have agreed not to disclose financial details. The transaction is subject to customary closing conditions including merger clearance by the competent competition authorities. The transaction is expected to close in the second half of the year.

Deutsche Post DHL Group meets 2019 earnings target and addresses impact of Coronavirus

Deutsche Post DHL Group achieves record earnings in 2019
Due to the unforseeable impact of the Coronavirus on the international business activities of Deutsche Post DHL Group, the company's 2020 earnings guidance of more than EUR 5.0 billion is, as of now, excluding the effects of the crisis
CEO Frank Appel: "It is currently hard to judge how strong the impact of the Coronavirus will be"
Decision on StreetScooter: Future focus on the operation of the existing fleet

Deutsche Post DHL Group announced that its 2020 earnings guidance is, as of now, excluding any effect induced by the Coronavirus. Since the Chinese government introduced measures to contain the Coronavirus, DPDHL Group has been consistently monitoring the volume development in its networks. In recent weeks, trade volumes have weakened, not only on the inbound and outbound China trade lanes but also in other countries of Asia; constraints on industrial production are increasingly expected also outside of China.

The Group had seen a very good start into 2020 in January and was prepared for the usual effects around Chinese New Year in February when the measures of the Chinese government were introduced. Since then the business development in Post & Parcel Germany as well as in DHL Supply Chain and DHL eCommerce Solutions has only been marginally impacted by the Corona crisis. In contrast, the Group currently sees more significant effects for the DHL Express and DHL Global Forwarding divisions, where the business is particularly affected with regards to cross-border trade flows into and out of China. Group-wide the negative impacts of the Corona crisis on Group EBIT amount to around EUR 60-70 million for the month of February, compared to the initial internal planning.

Implications for the Group results for full year 2020 cannot be currently concretely assessed. Should the macroeconomic situation normalize again, there could also be positive effects for logistics companies. In case of a longer duration or a worsening of the current situation over the coming months, the negative impacts for the Group are likely to outweigh the positives. The concrete earnings impact can only be assessed after a normalization of the situation.

"Deutsche Post DHL Group had a very good year 2019 and a successful start to 2020 in January. Thanks to our broad geographic set-up and our comprehensive portfolio we are more resilient than other companies. However, a worldwide crisis like the Coronavirus does not leave us unaffected. It is currently hard to judge how strong the impact on our business will be. That is why our guidance is as of now excluding any impact of this", said CEO Frank Appel.

Also against the background of the global economic uncertainties the Group decided to not further actively pursue the current exploratory talks regarding partnership options for the StreetScooter activities. Instead, StreetScooter will concentrate on the operation of the current fleet of e-vehicles.

"Thanks to our StreetScooter we have one of the biggest electric delivery fleets in the world and have made a significant contribution to the development of e-mobility. We have always said that we do not want to be a car manufacturer. A further scaling of the business without the right partner does not fit our long-term strategic goals. Independent from the decision today, we will further foster the transition of our fleet towards e-mobility", said Frank Appel. "We are committed to our Mission 2050, which means zero-emission logistics by 2050.”

Basically, eMobility is only one of the many levers for the company to make logistics more efficient and thus more sustainable. The Group is therefore working intensively on various levers, such as the involvement in the production of alternative fuels, the optimization of its routes and energy efficiency in its buildings.

The refocusing of StreetScooter ? a change outside of the company’s core businesses ? is expected to result in one-off charges of EUR 300-400 million for the current financial year. The impact on the cash flow, however, will be limited.

The 2020 guidance for a Group EBIT of more than EUR 5.0 billion is hence as of now excluding any still to be quantified effect induced by Corona implications, as well as the above mentioned charges related to the decision on StreetScooter. 2022 guidance for a Group EBIT of minimum EUR 5.3 billion is not at all affected by this.

As the guidance update is taking advance on the publication of 2019 full-year results planned for March 10th, the Group also publishes the following key numbers of the preliminary closure of FY2019 accounts:

Deutsche Post DHL Group continued to post profitable growth during the past financial year. Group revenue was up 2.9% year on year to EUR 63.3 billion, with all five divisions contributing to this positive performance.

The Group’s operating profit (EBIT) improved significantly (+30.6%) compared with the previous year in which earnings were impacted by one-time effects. Group EBIT reached EUR 4.13 billion, which is well within the range of EUR 4.0 to 4.3 billion targeted for 2019 by Deutsche Post DHL Group. The Post & Parcel Germany division contributed EUR 1.23 billion to earnings (forecast: EUR 1.1 to 1.3 billion). The DHL divisions generated total EBIT of EUR 3.4 billion (forecast: EUR 3.4 to 3.5 billion). EUR 2.039 billion of which are attributable to the Express division, EUR 521 million to Global Forwarding Freight and EUR 912 million to Supply Chain. The division eCommerce Solutions recorded a result of EUR -51 million, while the result for Corporate Functions came in at EUR -523 million.

?We have reached record earnings in 2019 despite the challenging macroeconomic environment. All divisions continued to grow, and we took a big step forward with regards to our profitability”, said Frank Appel.

Deutsche Post DHL Group continued to invest heavily in profitable growth in the past financial year, spending a total of EUR 3.6 billion across all divisions ? approximately EUR 1 billion more than in the prior year. This includes EUR 1.1 billion for the debt-financed renewal of the Express division’s aircraft fleet. The new machines are 18 percent more efficient and thus also contribute to the group's sustainability goals.

Despite higher capex spending, cash flow performed very well in the past financial year. Free cash flow was EUR 867 million, well above the figure of more than EUR 500 million projected for 2019. The Group had anticipated lower cash inflows in 2019 (previous year: EUR 1.1 billion) due to higher cash outflows for revamping the aircraft fleet at Express.

Once again, Kuehne + Nagel improves result in 2019

Seafreight and overland: volume and earnings growth
Airfreight: resilient despite market drop
Contract logistics: restructuring shows progress
Free cash flow generation increased by CHF 664 million
Dividend proposal CHF 4.00 per share*
Focus in 2020: Growth in Asia and sustainability

The Kuehne + Nagel Group once again saw a considerable improvement to its results in the 2019 business year. Net turnover increased by 1.5% to CHF 21.1 billion and gross profit also increased by 3.5% to CHF 8.0 billion against the previous year. EBIT was up 7.5% at CHF 1.1 billion, exceeding the billion-CHF mark for the first time. Earnings for the year were up 3.6% at CHF 800 million.

Dr. Detlef Trefzger, CEO of Kuehne + Nagel International AG, comments: "In a changing market, we continued to see our strategy yield success. In seafreight and overland, our focus on customer service, cost-effectiveness, operational systems, and digitalisation has once again paid off. We managed to keep results stable in the more volatile airfreight business. In contract logistics, the restructuring of the product, customer and real estate portfolios led to a considerable improvement in results."

Kuehne + Nagel further grew its position as market leader in seafreight in the 2019 business year. Net turnover was up 4.6% at CHF 7.5 billion and gross profit was up by 3.8% at CHF 1.5 billion. Thanks to the focused growth strategy and high-quality service, the business unit again achieved growth in a stagnating market. A total of 4.9 million standard containers (TEU) were shipped, 171,000 TEU more than last year (up 3.6%).

EBIT increased by 9.1% to CHF 456 million against the previous year. The business unit restored the conversion rate (EBIT to gross profit ratio) to 29.6%, one of the top results in the sector.

In the 2019 business year, the drastic drop in demand for airfreight, particularly in key European industries and the perishables business, drove a decline in net turnover to CHF 4.7 billion. Airfreight volume at Kuehne + Nagel fell 5.7% against the previous year to 1.6 million tonnes.

Kuehne + Nagel's airfreight proved resilient in this challenging business environment thanks to the consistent expansion of the service portfolio, the focus on digital solutions, optimisation of the cost structure, and the successful integration of Quick International Courier. Gross profit was up 9.6% at CHF 1.3 billion whereas EBIT was down against the previous year at CHF 329 million.

In the 2019 business year, net turnover for overland grew 1.7% against the previous year at CHF 3.6 billion and gross profit increased by 3.0% to CHF 1.1 billion. Kuehne + Nagel gained market share in a weakening market environment.

The business unit added to the European network with the acquisition of Joebstl in Austria as well as Rotra, a leading road transport provider in the Belgium and the Netherlands. Business with large-scale customers continued to drive growth in North America, whilst the intermodal business weakened because of a falling oil price. The business unit expanded its presence in South East Asia with the launch of a new digital booking platform. EBIT improved by 2.6% to CHF 78 million.

Contract logistics
In the 2019 business year, net turnover in contract logistics was up 2.8% versus the previous year at CHF 5.4 billion; the restructuring of the product and customer portfolio delivered results. The real estate portfolio was reviewed and adapted accordingly. Operationally, productivity gains and better service quality led to a sustainable improvement of results.

With the opening of new distribution centres in Belgium, Germany and Luxembourg, the business unit focused on high-value growth in pharma & healthcare as well as e-commerce fulfilment. The combination of restructuring and growth generated an EBIT of CHF 198 million.

Regional performance
In 2019, the EMEA region (Europe, Middle East and Africa) contributed CHF 12.8 billion (60.8% of total) of net turnover and CHF 561 million (52.9%) of Group EBIT. The Asia Pacific region posted net turnover of CHF 2.5 billion (11.7%) and contributed CHF 273 million (25.7%) of EBIT. The Americas region achieved net turnover of CHF 5.8 billion (27.5%) and EBIT of CHF 227 million (21.4%).

In recent years, the Kuehne + Nagel Group has achieved significant success in the Asia Pacific region. Despite the current economic headwinds posed by the Coronavirus, Asia will continue to be a central driver of global economic development. In 2019, the company laid the operational and financial groundwork for further, accelerated expansion of its network in Asia through both organic and inorganic growth.

Supporting the growth strategy in Asia and the increased liquidity this may require, the Board of Directors proposes a dividend per share of CHF 4.00 to the Annual General Meeting on 5 May 2020

The Kuehne + Nagel Group launched its Net Zero Carbon programme at the New York Climate Week in September 2019. From 2020 onwards, the company will offset all of its own CO2 emissions. It plans to achieve this, in part, by investing in reforestation projects, which are certified to offset CO2 emissions. In addition, all shipments by subcontractors in the Kuehne + Nagel network (airlines, shipping lines, and haulage companies) will be CO2-neutralised by 2030. The Net Zero Carbon programme consists of three areas of action: visibility, reduction and compensation of CO2 emissions.

Comment from the Chairman of the Board of Directors
Dr. Joerg Wolle, Chairman of the Board of Directors of Kuehne + Nagel International AG, says: "For the sixth time in a row, Kuehne + Nagel has considerably improved its results. With the current state of the global economy, that is anything but a given. This year, Kuehne + Nagel celebrates 130 years since it was established. Over this long history and through the efforts of many people, the company turned into a truly global provider of logistics services. Setting aside the unknown scope of the Coronavirus, the Board of Directors is looking ahead with confidence to the 2020 business year and beyond. In the future, we will be focusing particularly on growth in Asia."

Take off to Strategy 2025 goals: DHL Express upgrades its fleet with six new Boeing 777 Freighters this year

First delivery of 2020 batch accomplished, recent 777F touched down at its operational home base Cincinnati last Thursday
DHL continues strengthening its intercontinental network by renewal of its long-haul aircraft fleet
State-of-the-art aircraft also supports the Group's goal of improving its carbon footprint

DHL Express is receiving six new Boeing 777F-200 cargo aircraft this year. The first of these planes to come in 2020 landed last Thursday at its future base of operations, the Cincinnati/Northern Kentucky International Airport (CVG). In 2018 DHL ordered 14 new Boeing 777F, with four delivered in 2019, six to come this year and the remaining four to be taken into service in 2021. The current freighter will be operated by DHL Express' partner airline Kalitta. The renewal is part of the overall modernization of the long-haul intercontinental fleet of the courier company and replaces older planes. The Boeing 777F is equipped with top-of-the-line fuel-efficient technology and features the longest range at full payload of any widebody freighter aircraft. This allows DHL to operate with higher efficiency while meeting the increasing global demand for express logistics service.

"We're excited to welcome more Boeing 777Fs to the DHL Express family this year," says John Pearson, CEO of DHL Express. "With the modernization of our intercontinental fleet, we can simultaneously enhance our proven ability to meet growing demand, improve our environmental footprint and deliver best quality service to our customers. DHL has made its mark time and time again with innovative solutions and technologies. We are pleased to continue demonstrating to partners and customers alike how these advancements stand to elevate the entire express logistics industry while bringing us closer to achieving our Strategy 2025 goals."

In the center of its Strategy 2025 DHL Express focusses particularly on 'E-commerce' as a growth driver and 'efficiency' for further increasing its profit. With a payload capacity of 102 tons and a range of 9,200 km, the B777F has the largest capacity and range of all twin-engine freighter aircraft. They are also more fuel-efficient, reliable than older planes and reducing CO2 emissions by 18 per cent. DHL Express operates over 260 dedicated aircraft with 17 partner airlines on over 3.000 daily flights across 220 countries and territories.

"We expect further growth in cross-border e-commerce trade and, as a result, increased demand for our express logistics services and expertise in intercontinental deliveries," says Travis Cobb, EVP Global Network Operations and Aviation at DHL Express. "With the new Boeing 777Fs, we can increase our intercontinental connections while reducing carbon emissions and fuel consumption. This enables us to continue to provide customers with the excellent quality they've come to expect from us while we work to expand our global services."

A.P. Moller - Maersk to acquire the warehousing and distribution company Performance Team

A.P. Moller - Maersk announces that it has reached an agreement to acquire Performance Team, a US-based warehousing and distribution company, to further strengthen its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers. As a leader in North America Warehousing & Distribution, Performance Team specializes in B2B and B2C distribution solutions within retail, wholesale and e-commerce with 24 warehousing sites. It has a track record of profitable growth of 17% per year for the last four years, and revenue for 2019 of USD 525m.

“With this acquisition we invest in premium operational capabilities to significantly boost our existing Warehousing & Distribution offering. This will strengthen our ability to deliver products and solutions that meet our customers’ end-to-end supply chain needs. With its strong platform, Performance Team is a good match for A.P. Moller - Maersk as they complement our current Warehousing & Distribution proposition to customers in North America and will enable future growth,” said Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller - Maersk.

Maersk is targeting the Warehousing & Distribution component to offer more supply chain options and flexibility to its Ocean customers. The global size of the Warehousing & Distribution sector is estimated at more than USD 200bn and for North America it is USD 50bn.1 There is a significant growth opportunity for 3rd party Warehousing & Distribution players as only a small part of the Warehousing & Distribution sector in North America is currently outsourced and e-commerce is growing 12% annually.2

“We are going all the way for our customers, offering new ways to optimize their supply chains, grow their e-commerce business and find warehouses and distribution options. Performance Team’s expertise, market reputation and scalability will create significant performance gains for our customers that grow and complement our existing Maersk Warehousing & Distribution product in North America. We are especially excited to strengthen our e-commerce fulfillment capabilities since many of our retailers are looking to grow online retail sales in 2020 and beyond,” said Narin Phol, Regional Managing Director of Maersk in North America.

Performance Team is a family run business that began operations in 1987 in California, US. Today, the company operates 24 warehousing sites covering 800,000 square meters across strategic supply chain locations.

“Joining a global container logistics leader like A.P. Moller - Maersk is the ideal fit for Performance Team’s future growth, our customers and associates. Maersk has a significant presence here in the US. They have a continuous improvement mindset like ours and together we can clearly deliver attractive logistics solutions that make our customers more competitive while ensuring our employees grow with the business. Our focus will continue to be customer-centric and we are excited about delivering results for years to come,” said Craig Kaplan, CEO of Performance Team ? who will remain CEO of Performance Team once the transaction closes.

In North America, Maersk Warehousing & Distribution is based in South Gate, California and has a regional network of 20+ facilities strategically located in the United States and Canada that offer warehouse and distribution solutions, including domestic consolidation, e-commerce fulfillment, inland drayage, facility and yard management and other value-added services.

The value of the transaction is USD 545m (EV) including IFRS 16 lease liabilities of around USD 225m. Performance Team 2019 EBITDA adjusted for IFRS 16 effects is estimated at USD 90m. The acquisition is subject to regulatory approvals and the transaction is expected to close 1 April 2020. Until obtaining required regulatory approvals and closing of transaction, Maersk and Performance Team remain two separate companies and thus will do their business as usual.

A.P. Moller - Maersk shows improved performance and strategic progress

Press Release: A.P. Moller - Maersk shows improved performance and strategic progress

Copenhagen, 20 February 2020

A.P. Moller - Maersk improved earnings and free cash flow in 2019, despite weaker market conditions and global container growth of only 1.4%. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved 14% to USD 5.7bn compared to 2018 and the EBITDA margin increased to 14.7%. Revenue decreased slightly to USD 38.9bn in 2019 from USD 39.3bn. Free cash flow was USD 6.8bn, compared to USD 5.1bn last year and CAPEX declined by USD 1.2bn to USD 2bn in 2019.

“Despite weaker market conditions, A.P. Moller - Maersk was able to improve profitability and cash flow. Our cash return was healthy, and we continued the reduction of net interest-bearing debt, leading to a further deleveraging of USD 3.3bn over the year. It gives us a solid starting point for 2020 to further expand our end-to-end offering within container logistics while at the same time managing the market challenges that are obviously out there,” says Søren Skou, CEO of A.P. Moller - Maersk.

In Ocean, EBITDA in 2019 increased 15% to USD 4.4bn and the EBITDA margin of 15.3% increased by 2 percentage points, driven by a lower cost base. Revenue was USD 28.4bn with a small decrease in volumes to 13.3m FFE. Unit cost at fixed bunker decreased by 1.7%, mainly due to improvements in capacity management and foreign exchange rate developments.

In 2019, EBITDA in Logistics & Services increased 24% to USD 238m with an EBITDA margin of 4%, while revenue decreased slightly to USD 6bn from USD 6.1bn, driven by a decrease in sea and air freight forwarding activity, which was only partly offset by an increase in warehousing and distribution.

Terminals & Towage reported an increase in EBITDA of 11% to USD 1.1bn with an EBITDA margin of 28.4% in 2019. Revenue increased 3.2% to USD 3.9bn. In gateway terminals, EBITDA increased by 17% to USD 902m, reflecting an increase in EBITDA margin to 28% and revenue increased by 4.1% to USD 3.2bn. The positive development was driven by a ramp-up of the new terminal in Moin, Costa Rica, higher volumes, higher storage income and reduction in SG&A.

Net interest-bearing debt decreased through the year to USD 11.7bn from USD 15bn in 2018. In 2019, USD 1.3bn was distributed to shareholders via ordinary dividends and share buy backs. An ordinary dividend equal to USD 469m was paid to shareholders and as part of the share buy-back programme announced in May 2019, the company bought back shares worth USD 791m.

A stronger foundation from improved operational performance and a better customer experience

The strategic focus of 2019 was on improving the financial performance on Ocean and creating a better customer experience through increased reliability, improved customer experience and introduction of online services and products such as Maersk Spot, a unique product in the market that offers price and loading guarantee. Also, during the year, we took further steps in the integration of the business on a structural level and how we go to market.

“While we still need to improve returns, we delivered solid progress in our financial performance in 2019 while progressing the business transformation, in spite of weak trade growth, ongoing trade tensions and geopolitical uncertainty in many markets,” explains Søren Skou.

Maersk reported a cash return on invested capital improvement (CROIC) for the full year of 9.3% due to strong cash flow.

Furthermore, non-Ocean revenue increased by 0.1%, when adjusted for the closing of production facilities in Maersk Container Industry. Strong revenue growth in gateway terminals was offset by declining freight forwarding activities. Gross profit in Logistics & Services grew 8.7% to USD 1.2bn, reflecting a gross profit margin of 20%.

Synergies harvested from the Hamburg Süd acquisition and the integration of transport and logistics reached USD 1.2bn, which is above the expected target.

The long-term target on return on invested capital after tax (ROIC) grew to 3.1% in 2019, compared to 0.2% the year before.

Guidance for 2020

A.P. Moller ?Maersk expects an EBITDA of around USD 5.5bn, before restructuring and integration costs.

The organic volume growth in Ocean is expected to be in line with or slightly lower than the estimated average market growth of 1?3% for 2020.

The outlook and guidance for 2020 is subject to significant uncertainties and impacted by the current outbreak of the Coronavirus in China, which has significantly lowered visibility on what to expect in 2020. As factories in China are closed for longer than usual in connection with the Chinese New Year and as a result of the Coronavirus, we expect a weak start to the year.

The guidance for 2020 is also subject to uncertainties related to the implementation of IMO 2020 and the impact on bunker fuel prices and freight rates combined with the weaker macroeconomic conditions and other external factors.

The accumulated guidance on CAPEX for 2020-21 is still USD 3?4bn. A high cash conversion (cash flow from operations compared to EBITDA) is expected for both years.