DSV Panalpina A/S, Hovedgaden 630, 2640 Hedehusene, Denmark, tel. +45 43 20 30 40, CVR No. 58233528, www.dsv.com.
DSV Panalpina Group
We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation.
Our reach is global, yet our presence is local and close to our customers. More than 57,000 employees in more than 80 countries work passionately to deliver great
customer experiences and high-quality services. Read more at www.dsv.com
Page 1 of 20
INTERIM FINANCIAL REPORT
Q1 2021
Company Announcement No. 882
27 April 2021
Selected key figures and ratios for the period 1 January - 31 March 2021
(DKKm)
Q1 2021
Q1 2020
Key figures and ratios
Revenue
33,616
27,309
Gross profit
7,785
6,684
Operating profit (EBIT) before special items
3,067
1,566
Profit after tax
2,329
331
Adjusted earnings for the period
2,390
755
Adjusted free cash flow
1,690
915
Conversion ratio
39.4%
23.4%
Diluted adjusted earnings per share of DKK 1 for the last 12 months
33.7
19.0
Jens Bjørn Andersen, Group CEO: “Today, we are proud to announce our agreement to unite with Agility’s Global Integrated Logistics. The
combination of our two groups is a perfect match, and Global Integrated Logistics will add around 23% to DSV Panalpina’s annual revenue
and strengthen our global network, especially in the Air & Sea division. On an eventful day, we are also happy to report 106% growth in
EBIT before special items in the first quarter of 2021 and an upgrade of the financial outlook for full-year 2021. The strong earnings growth
in Q1 was driven by good performance in all business areas, and we benefit from cost discipline and the full-year impact from Panalpina
synergies. The markets in air and sea are characterised by strong demand and tight capacity, and it takes an extraordinary effort by our
staff to find good solutions for our customers under these challenging market conditions.”
The agreement to acquire Agility’s Global Integrated Logistics business in an all-share transaction is further described in this
announcement and in Company Announcement No. 881.
Outlook for 2021
Based on the strong start to the year, the full-year outlook for 2021 previously announced is upgraded as follows:
• Operating profit before special items is expected to be in the range of DKK 11,250 - 12,000 million (previously DKK 10,500-
11,500 million).
• The effective tax rate is expected to approximate 23% (unchanged).
The financial outlook for 2021 is for DSV Panalpina stand-alone and excludes the impact from the acquisition of Global Integrated
Logistics. The outlook will be updated upon closing, which is expected in Q3 2021.
Share buyback
A separate company announcement about the launch of a new share buyback programme of up to DKK 4,000 million will be issued today.
The programme will run until 28 July 2021 or earlier if finalised.
Contacts
Investor Relations: Flemming Ole Nielsen, tel. +45 43 20 33 92, flemming.o.nielsen@dsv.com
Investor Relations: Mads Kristian Hofmeister, tel. +45 43 20 33 88, madskristian.hofmeister@dsv.com
Media: Maiken Riise Andersen, tel. +45 43 20 30 74, maiken.r.andersen@dsv.com
Yours sincerely,
DSV Panalpina A/S
Page 2 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Financial highlights
Q1 2021
Q1 2020
Results (DKKm)
Revenue
33,616
27,309
Gross profit
7,785
6,684
Operating profit before amortisation and depreciation (EBITDA) before special items
4,016
2,604
Operating profit (EBIT) before special items
3,067
1,566
Special items, costs
-
511
Net financial expenses
21
597
Profit for the period
2,329
331
Adjusted earnings for the period
2,390
755
Cash flows (DKKm)
Operating activities
2,603
1,346
Investing activities
(357)
(201)
Free cash flow
2,246
1,145
Adjusted free cash flow
1,690
915
Financing activities
(2,332)
(824)
Share buyback
(4,815)
(3,030)
Dividends distributed
(920)
(588)
Cash flow for the period
(86)
321
Financial position (DKKm)
DSV Panalpina A/S shareholders’ share of equity
45,501
46,214
Non-controlling interests
(102)
(112)
Balance sheet total
101,586
96,370
Net working capital
3,646
3,532
Net interest-bearing debt
21,992
21,257
Invested capital
66,420
67,868
Gross investment in property, plant and equipment
269
220
Financial ratios (%)*
Gross margin
23.2
24.5
Operating margin
9.1
5.7
Conversion ratio
39.4
23.4
Effective tax rate
23.5
27.7
ROIC before tax
16.4
13.7
Return on equity (ROE)
13.6
10.0
Solvency ratio
44.8
48.0
Gearing ratio
1.5
2.0
Share ratios*
Earnings per share of DKK 1 for the last 12 months
27.6
14.5
Diluted adjusted earnings per share of DKK 1 for the last 12 months
33.7
19.0
Number of shares issued (’000)
230,000
235,000
Number of treasury shares (’000)
7,640
8,977
Average number of shares issued (’000) for the last 12 months
226,291
210,493
Average diluted number of shares (’000) for the last 12 months
230,911
213,892
Share price end of period (DKK)
1,244.5
618.2
Non-Financials
Number of full-time employees at 31 March
57,642
58,788
* For a definition of key figures and ratios, please refer to page 79 of the 2020 DSV Panalpina Annual Report.
Page 3 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Management’s commentary
The Group had a strong start to 2021 with growth in EBIT before special items of 106.3%. The significant
growth in earnings was attributable to 21.3% growth in gross profit and improved conversion ratios in all
divisions.
Driven by the growth in earnings, adjusted free cash flow came to DKK 1,690 million for Q1 2021, an
increase of 84.7% compared to the same period last year.
FINANCIAL DEVELOPMENT 2020 - 2021
(DKKm)
Q1 2020
Currency
translation
Growth
Growth %*
Q1 2021
Revenue
27,309
(1,124)
7,431
28.4%
33,616
Gross profit
6,684
(267)
1,368
21.3%
7,785
EBIT before special items
1,566
(79)
1,580
106.3%
3,067
Gross margin (%)
24.5
23.2
Operating margin (%)
5.7
9.1
Conversion ratio (%)
23.4
39.4
* Growth in constant currencies
Results for the period
Revenue
For Q1 2021, revenue amounted to DKK 33,616 million against
DKK 27,309 million last year. Revenue growth by division is
specified below:
(DKKm)
Q1 2021
Growth*
Air & Sea
22,924
45.5%
Road
8,056
3.0%
Solutions
3,609
9.0%
Group and eliminations
(973)
Total
33,616
28.4%
* Growth in constant currencies
The transport and logistics market volumes continue to recover
after the COVID-19 crisis in 2020. For both air and sea freight,
the capacity situation remains extremely tight. This is a
continuation of the situation we have seen in recent quarters,
which has led to record-high freight rates. The high rates were
the main driver behind the growth in revenue in the Air & Sea
division in Q1 2021.
The growth in the road freight and contract logistics markets
accelerated during the quarter as activity picked up and
comparisons from 2020 were impacted by the COVID-19 crisis.
Growth in Solutions was also positively impacted by the
acquisition of Prime Cargo.
Revenue was negatively impacted by currency translation of
DKK 1,124 million in Q1 2021, mainly due to USD and
currencies floating with USD.
Revenue by division, Q1 2021
Gross profit
For Q1 2021, gross profit amounted to DKK 7,785 million
against DKK 6,684 million last year. Gross profit growth by
division is specified below:
(DKKm)
Q1 2021
Growth*
Air & Sea
4,788
30.4%
Road
1,657
9.2%
Solutions
1,348
11.2%
Group and eliminations
(8)
Total
7,785
21.3%
* Growth in constant currencies
In Air & Sea the growth in gross profit was driven by improved
yields (gross profit per TEU/tonne). This was partly due to
benefits from the integration of Panalpina, but also due to the
special market conditions with tight capacity and historically high
freight rates.
Page 4 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Road and Solutions realised higher gross margins than in Q1
2020. This is a continuation of the development from last year
and driven by higher productivity and better utilisation of the
network.
Gross profit by division, Q1 2021
The consolidated gross margin was 23.2% for Q1 2021,
compared to 24.5% for Q1 2020. Both Road and Solutions
achieved higher gross margins, but this was offset by a decline
in Air & Sea due to the impact from pass-through revenue where
higher freight rates cause lower gross margin.
Gross profit was negatively impacted by currency translation of
DKK 267 million in Q1 2021.
EBIT before special items
EBIT before special items amounted to DKK 3,067 million for Q1
2021 against DKK 1,566 million last year. EBIT growth by
division is specified below:
(DKKm)
Q1 2021
Growth*
Air & Sea
2,393
126.0%
Road
403
56.8%
Solutions
263
69.7%
Group and eliminations
8
Total
3,067
106.3%
* Growth in constant currencies
The growth in EBIT was driven by the increase in gross profit in
all divisions and improved conversion ratios. Q1 2021 was the
first quarter with full-year impact of the Panalpina integration
synergies and the permanent COVID-19 cost savings initiatives.
Across the Group, EBIT before special items for Q1 2021 was
positively impacted by the extraordinary market conditions and
certain temporary cost savings, e.g. due to low travel activity. It
should also be noted that earnings in Q1 2020 were negatively
impacted by the first effects of COVID-19.
EBIT before special items was negatively impacted by currency
translation of DKK 79 million in Q1 2021.
EBIT by division, Q1 2021
The conversion ratio was 39.4% for Q1 2021 (2020: 23.4%).
The improved productivity illustrates both the scalability of our
internal processes and systems and strong cost management
across the Group. The margin was also positively impacted by
extraordinary strong yields in Air & Sea and certain temporary
cost savings.
Financial items
Financial items totalled a net expense of DKK 21 million for Q1
2021, compared to DKK 597 million for the same period last
year. Currency translation amounted to an income of DKK 158
million (2020: expense of DKK 407 million) and primarily relates
to the currency impact from USD on intercompany loans.
(DKKm)
Q1 2021
Q1 2020
Interest on lease liabilities
119
114
Other interest cost, net
57
72
Interest on pensions
3
4
Currency translation
(158)
407
Financial expenses
21
597
Tax on profit for the period
The effective tax rate was at the expected level and came to
23.5% for Q1 2021, compared to 27.7% for Q1 2020.
Profit for the period
Profit for Q1 2021 was DKK 2,329 million, compared to DKK 331
million for the same period of 2020. The improved profit for the
period was driven by higher EBIT, no special items costs
(integration and restructuring) and lower net financial expenses.
Diluted adjusted earnings per share
The 12-month figure increased by 77.4% compared to last year
and came to DKK 33.7 per share (2020: DKK 19.0 per share).
Page 5 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Cash flow
CASH FLOW STATEMENT
(DKKm)
Q1 2021
Q1 2020
Cash flow from operating activities
2,603
1,346
Cash flow from investing activities
(357)
(201)
Free cash flow
2,246
1,145
Cash flow from financing activities
(2,332)
(824)
Cash flow for the period
(86)
321
Free cash flow
2,246
1,145
Repayment of lease liabilities (IFRS 16
impact reversed)
(745)
(785)
Special items (restructuring costs)
189
555
Adjusted free cash flow
1,690
915
Cash flow from operating activities was positively affected by
higher EBITDA before special items, but this effect was slightly
offset by an increase in NWC due to increased activity in the
quarter.
Adjusted free cash flow for the period was DKK 1,690 million
and significantly above the DKK 915 million for the same period
last year.
Net working capital
On 31 March 2021, the Group’s net working capital was DKK
3,646 million, compared to DKK 3,532 million on 31 March 2020.
Relative to full-year revenue, the net working capital amounted
to 3.0% on 31 March 2021 (31 March 2020: 3.5%).
Optimisation of NWC continues to be a priority, but we consider
the level by the end of Q1 2021 to be satisfactory, considering
both seasonality and the high rate levels.
Capital structure and finances
DSV Panalpina A/S shareholders’ share of
equity
DSV Panalpina shareholders’ share of equity was DKK 45,501
million on 31 March 2021 (DKK 47,385 million on 31 December
2020). Equity was positively impacted by the result for the period
and currency translation on goodwill, but this was offset by
distribution to shareholders.
DSV Panalpina reduced its share capital on 15 April 2021
through the cancellation of 6,000,000 treasury shares. Please
refer to Company Announcement No. 878.
On 31 March 2021, the Company’s portfolio of treasury shares
was 7,639,561 shares. On 26 April 2021, the portfolio of
treasury shares was 2,231,604 shares.
The solvency ratio excluding non-controlling interests was
44.8% on 31 March 2021 (31 March 2020: 48.0%).
DEVELOPMENT IN EQUITY
(DKKm)
Q1 2021
Q1 2020
Equity at 1 January
47,385
49,430
Profit for the period
2,334
328
Currency translation, foreign
enterprises
810
(467)
Allocated to shareholders
(5,735)
(3,618)
Sale of treasury shares
273
674
Other equity movements
434
(133)
Equity end of period
45,501
46,214
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 21,992 million on 31
March 2021, compared to DKK 21,257 million on 31 March
2020.
On 25 February 2021, it was announced that DSV Panalpina
had completed a new 10-year EUR 500 million Eurobond issue
(approx. DKK 3,750 million). Please refer to Company
Announcement No. 869.
The financial gearing ratio (NIBD/EBITDA) was 1.5x on 31
March 2021, compared to 2.0x last year. The main reason for
the decline was the higher EBITDA. A new share buyback
programme of DKK 4,000 million will be initiated and we
maintain the target financial gearing ratio of below 2.0x
NIBD/EBITDA.
The weighted average duration of the Company’s bonds,
committed loans and credit facilities was 5.9 years on 31 March
2021, compared to 4.25 years on 31 March 2020.
Invested capital and ROIC
The Group’s invested capital including goodwill and customer
relationships amounted to DKK 66,420 million on 31 March
2021, compared to DKK 67,868 million on 31 March 2020. The
decrease is mainly due to currency translation on goodwill.
Return on invested capital including goodwill and customer
relationships was 16.4% for the 12-month period ended 31
March 2021, compared to 13.7% for the same period last year.
Return on invested capital excluding goodwill and customer
relationships was 62.9% for the 12-month period ended 31
March 2021, compared to 41.8% for the same period last year.
Subsequent events
DSV Panalpina to acquire Agility’s Global
Integrated Logistics business
DSV Panalpina and Agility Public Warehousing Company
K.S.C.P. (Agility) have reached an agreement that DSV
Panalpina will acquire Agility’s Global Integrated Logistics
business, which is the global logistics division of Agility, in an all-
share transaction by issuing 19,304,348 shares of 1 DKK/share
to Agility, representing approximately 8.0% of all post-
transaction outstanding shares of DSV Panalpina. Based on the
DSV Panalpina share closing price of DKK 1,299.5 and an
exchange rate of DKK 1.00 = USD 0.163 as of 26 April 2021,
Page 6 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
the all-share transaction has an implied equity value of Global
Integrated Logistics of USD 4.1 billion. The transaction is subject
to regulatory approvals and approval by Agility’s shareholders.
Completion of the transaction is expected in the third quarter of
2021.
About Agility’s Global Integrated Logistics
Agility’s Global Integrated Logistics business is a leading global
transport and logistics provider with a strong footprint in
emerging markets. The group offers a mix of integrated logistics
services, including air, ocean and road freight forwarding
services, contract logistics and specialised logistics capabilities.
Global Integrated Logistics generated revenues of
approximately USD 4.0 billion (DKK 26.0 billion) in 2020 and
operates a global network across 100+ countries (including
agents). Global Integrated Logistics has a global workforce of
approximately 17,000 people.
Strategic rationale
The combination with Global Integrated Logistics is expected to
increase DSV Panalpina's annual revenue by approximately
23%, which will rank the combined company in the freight
forwarding industry top three with a pro forma revenue of
approximately USD 22 billion (DKK 142 billion) and a combined
workforce of more than 70,000 employees. The combined
company will have own operations in more than 90 countries.
DSV Panalpina and Global Integrated Logistics are a strong
match with many potential synergies as a result of similarities in
business models, services and strategies. Scale remains one of
the key competitive advantages in freight forwarding with
significant operational and commercial benefits.
Transactional overview and further details of the agreement are
provided in DSV Panalpina Company Announcement No. 881.
Outlook
The consolidated full-year outlook for 2021 previously
announced is upgraded as specified below:
• EBIT before special items is expected to be in the
range of DKK 11,250-12,000 million (previously DKK
10,500-11,500 million)
• The effective tax rate of the Group is expected to be
approximately 23% (unchanged)
The upgrade is based on a strong start to the year, where all
business areas have exceeded our internal expectations.
The financial outlook for 2021 is for DSV Panalpina stand-alone
and excludes the impact from the acquisition of Agility’s Global
Integrated Logistics. The outlook will be updated upon closing,
which is expected in Q3 2021.
The outlook for the remaining part of 2021 assumes a continued
stable development in the markets in which we operate and a
continued gradual recovery of the global economy after the
COVID-19 crisis. Furthermore, the outlook for 2021 assumes
that the currency exchange rates, especially the US dollar
against the DKK, will remain at the current level.
Page 7 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
DSV Air & Sea
The Air & Sea division operates a global network specialising in transportation of cargo by air and sea.
The division offers both conventional freight forwarding services and tailored project cargo solutions.
Driven by strong profit per shipment, the division achieved 30.4% growth in gross profit and 126.0%
growth in EBIT before special items for Q1 2021. The significant growth in earnings was supported by the
full-year impact of Panalpina synergies and COVID-19 cost saving initiatives.
INCOME STATEMENT
(DKKm)
Q1 2021
Q1 2020
Divisional revenue
22,924
16,674
Direct costs
18,136
12,799
Gross profit
4,788
3,875
Other external expenses
753
797
Staff costs
1,445
1,679
EBITDA before special items
2,590
1,399
Amortisation and depreciation
197
269
EBIT before special items
2,393
1,130
KEY FIGURES AND RATIOS
Q1 2021
Q1 2020
Gross margin (%)
20.9
23.2
Operating margin (%)
10.4
6.8
Conversion ratio (%)
50.0
29.2
Number of full-time employees
17,999
20,610
Total invested capital (DKKm)
44,596
46,047
Net working capital (DKKm)
4,079
3,518
ROIC before tax (%)
18.3
15.8
Market development
Freight volume growth
DSV Q1 2021
Market Q1 2021
Sea freight – TEUs
1%
5-7%
Air freight – tonnes
(7%)
5-7%
Market growth rates are based on DSV estimates.
The demand for ocean freight continues to be strong, especially
driven by export volumes from Asia to North America and
Europe. The situation with capacity shortages and lack of
equipment continued into Q1 2021 with continued high rates.
The disruption at the Suez Canal at the end of March will only
prolong the situation.
The limited availability of belly space in passenger planes
continues to impact the air freight market. Demand is generally
strong, especially for Asia export, and the limited capacity is
keeping rates up.
The activity level in Q1 2020 was impacted by COVID-19,
mainly the lock-down in China during February 2020. By the end
of Q1 2021, market growth accelerated as the global transport
market volumes were negatively impacted by the pandemic in
2020.
Compared to the market, DSV’s volume growth in Q1 2021 was
impacted by discontinued Panalpina business following the
integration. However, compared to the trend in 2020, we are
now closing in on the market and we expect that we will be able
to gain market share again during the course of Q2 2021.
Page 8 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Divisional revenue
The division’s revenue amounted to DKK 22,924 million for Q1
2021, compared to DKK 16,674 million for the same period last
year. The growth for the period was 45.5%, driven by the
significant increase in freight rates compared to Q1 2020.
All regions contributed to the strong growth in revenue, but, in
line with the market, the division saw the strongest growth in
APAC, driven by high export activity.
Gross profit
For Q1 2021, gross profit amounted to DKK 4,788 million,
compared to DKK 3,875 million for the same period last year,
which corresponds to a growth of 30.4%.
Compared to Q1 2020, the division achieved improved gross
profit per TEU of sea freight and per tonne of air freight. This
was partly due to the benefits from the integration of Panalpina,
where the combination of the two networks have provided scale
benefits. All shipments are now handled on one IT platform,
which improves transparency and productivity.
Similar to the trend in recent quarters, the gross profit per unit in
Q1 2021 was positively impacted by the extraordinary market
conditions following COVID-19 with tight capacity, low carrier
reliability and historically high rates. Providing capacity and
finding good logistics solutions for the customers require a
significant effort by our freight forwarders, and each shipment is
significantly more time consuming than normally. Scalable IT
systems and efficient workflows are important, but freight
forwarding is a people’s business, and the good financial
performance clearly reflects the skills and hard work by our
teams across the globe.
The division’s gross margin was 20.9% for Q1 2021, compared
to 23.2% last year. The decline was mainly due to the impact
from pass-through revenue where higher freight rates cause
lower gross margin.
EBIT before special items
EBIT before special items came to DKK 2,393 million for Q1
2021, compared to DKK 1,130 million for the same period last
year. This corresponds to a growth for the period of 126.0%.
The positive development was driven by the growth in gross
profit. Furthermore, the division benefitted from the full-year
impact of Panalpina synergies and the permanent COVID-19
cost savings.
All regions contributed to the strong growth in EBIT before
special items.
The conversion ratio was 50.0% for Q1 2021, compared to
29.2% for the same period last year, clearly reflecting the
improved productivity of the division but also impacted by the
extraordinary market conditions during the quarter and certain
temporary cost savings.
Net working capital
The Air & Sea division’s net working capital came to DKK 4,079
million on 31 March 2021, compared to DKK 3,518 million on 31
March 2020. The development was due to the increase in
revenue.
FINANCIAL DEVELOPMENT 2020 - 2021
(DKKm)
Q1 2020
Currency
translation
Growth
Growth %*
Q1 2021
Divisional revenue
16,674
(918)
7,168
45.5%
22,924
Gross profit
3,875
(202)
1,115
30.4%
4,788
EBIT before special items
1,130
(71)
1,334
126.0%
2,393
* Growth in constant currencies
AIR AND SEA SPLIT
Sea freight
Air freight
(DKKm)
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Divisional revenue
9,949
7,144
12,975
9,530
Direct costs
7,923
5,422
10,213
7,377
Gross profit
2,026
1,722
2,762
2,153
Gross margin (%)
20.4
24.1
21.3
22.6
Volume (TEUs/tonnes)
581,019
575,814
336,307
359,975
Gross profit per unit (DKK)
3,487
2,991
8,213
5,981
Page 9 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
DSV Road
The Road division is among the market leaders in Europe and furthermore has operations in North
America and South Africa. The division offers full load, part load and groupage services through a network
of more than 200 terminals and operates approximately 20,000 trucks.
For Q1 2021, the Road division achieved 56.8% growth in EBIT before special items. The strong growth in
earnings was driven by higher activity with 9.2% growth in gross profit along with continued cost
discipline.
INCOME STATEMENT
(DKKm)
Q1 2021
Q1 2020
Divisional revenue
8,056
7,921
Direct costs
6,399
6,386
Gross profit
1,657
1,535
Other external expenses
258
287
Staff costs
742
757
EBITDA before special items
657
491
Amortisation and depreciation
254
232
EBIT before special items
403
259
KEY FIGURES AND RATIOS
Q1 2021
Q1 2020
Gross margin (%)
20.6
19.4
Operating margin (%)
5.0
3.3
Conversion ratio (%)
24.3
16.9
Number of full-time employees
14,222
15,200
Total invested capital (DKKm)
9,189
10,096
Net working capital (DKKm)
(968)
(458)
ROIC before tax (%)
15.9
13.2
Market development
We estimate that the demand for road freight grew by 2-3% in
Q1 2021 compared to the same period last year. Growth
accelerated in March 2021, as the comparison numbers for
2020 were impacted by the first COVID-19 lockdowns. The
domestic distribution markets continue to be strong, whereas
parts of the market for international transports remain below
normal activity levels.
Geographically, the Southern European and South African
markets continue to be more negatively impacted by the COVID-
19 crisis than Northern/Eastern Europe and North America.
Brexit led to an increase in activity in Q4 2020, as customer
inventories built up. In Q1 2021, the activity level on traffics to
and from the UK was lower, as the newly implemented customs
formalities created delays and difficulties in the market. In March
and April 2021, the situation improved and volumes have
gradually rebounded. The UK represent approximately 5% of
DSV Road’s activities.
The accelerating market growth and more equipment tied up on
the UK trade lanes due to longer transit times is gradually
leading to a situation where capacity is becoming tighter and
rates are increasing.
Divisional revenue
The division’s revenue amounted to DKK 8,056 million for Q1
2021, compared to DKK 7,921 million for the same period last
year, corresponding to an increase of 3.0%.
In line with the market, the division’s growth was mainly driven
by strong performance in Northern and Eastern Europe,
especially on domestic transports.
Page 10 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Similar to the development in the second half of 2020, DSV
Road has benefitted from scale and a strong network, enabling
the division to offer a high service level to customers, also on
trade lanes with lower-than-normal activity.
Gross profit
For Q1 2021, gross profit totalled DKK 1,657 million, compared
to DKK 1,535 million for the same period last year. This
corresponds to an increase of 9.2%.
The division’s gross margin was 20.6% for Q1 2021, compared
to 19.4% for the same period last year. The improvement was
mainly driven by improved productivity and improved utilisation
of the network.
EBIT before special items
EBIT before special items was DKK 403 million for Q1 2021,
compared to DKK 259 million for the same period last year.
This corresponds to a growth for the period of 56.8%.
The growth in EBIT before special items for Q1 2021 was driven
by the growth in gross profit and lower cost base due to COVID-
19 savings initiatives.
The conversion ratio was 24.3% for Q1 2021, compared to
16.9% for the same period last year.
In line with market trends, the growth in earnings in Q1 2021
was mainly driven by Northern and Eastern Europe.
Net working capital
The Road division’s net working capital was negative by DKK
968 million on 31 March 2021, compared to a negative DKK 458
million on 31 March 2020. The development is primarily related
to the higher activity level.
FINANCIAL DEVELOPMENT 2020 - 2021
(DKKm)
Q1 2020
Currency
translation
Growth
Growth %*
Q1 2021
Divisional revenue
7,921
(101)
236
3.0%
8,056
Gross profit
1,535
(18)
140
9.2%
1,657
EBIT before special items
259
(2)
146
56.8%
403
* Growth in constant currencies
Page 11 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
DSV Solutions
The Solutions division offers warehousing and logistics services globally and controls more than 400
logistics facilities. The service portfolio includes freight management, customs clearance, order
management and e-commerce solutions.
For Q1 2021, the Solutions division achieved 11.2% growth in gross profit and 69.7% growth in EBIT
before special items.
INCOME STATEMENT
(DKKm)
Q1 2021
Q1 2020
Divisional revenue
3,609
3,441
Direct costs
2,261
2,185
Gross profit
1,348
1,256
Other external expenses
281
289
Staff costs
377
385
EBITDA before special items
690
582
Amortisation and depreciation
427
423
EBIT before special items
263
159
KEY FIGURES AND RATIOS
Q1 2021
Q1 2020
Gross margin (%)
37.4
36.5
Operating margin (%)
7.3
4.6
Conversion ratio (%)
19.5
12.7
Number of full-time employees
22,188
20,079
Total invested capital (DKKm)
12,073
11,416
Net working capital (DKKm)
1,008
887
ROIC before tax (%)
10.8
9.8
Market development
We estimate that the market for contract logistics grew
approximately 2-4% in Q1 2021. Activity levels within the e-
commerce segment and pharmaceuticals have been growing
following COVID-19, and activity levels in traditional industries
are close to pre-COVID-19 levels.
We continue to see strong demand for modern and efficient
warehousing solutions, and new facilities are generally filling up
faster than expected.
Divisional revenue
The division’s revenue was DKK 3,609 million for Q1 2021,
compared to DKK 3,441 million for the same period of 2020.
Growth for the period was 9.0%.
Approximately 4% of the growth in Q1 2021 was due to the
acquisition of Prime Cargo, which was included from 1 January
2021. Prime Cargo has added competencies within e-commerce
in the Nordic region.
Regionally, Europe and APAC were the main drivers behind the
growth in Q1 2021, and also organically the growth was
strongest in the e-commerce segment.
Gross profit
For Q1 2021, gross profit was DKK 1,348 million, compared to
DKK 1,256 million for the same period of 2020. Growth for the
period was 11.2%.
The division’s gross margin was 37.4% for Q1 2021, compared
to 36.5% for the same period last year. The increase reflects
that the division is consolidating the physical infrastructure,
replacing small and less efficient warehouses with large,
multiuser facilities. Automation of processes in the new
warehouses is also driving up productivity.
Page 12 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
EBIT before special items
EBIT before special items was DKK 263 million for Q1 2021,
compared to DKK 159 million for the same period of 2020,
corresponding to an increase of 69.7%.
Growth in EBIT before special items for the quarter was driven
by higher gross profit and reduced cost base due to the
permanent COVID-19 cost savings.
The growth in EBIT before special items was driven by all
regions, but was strongest in Europe.
The conversion ratio was 19.5% for Q1 2021, compared to
12.7% for the same period last year.
Net working capital
The division’s net working capital came to DKK 1,008 million on
31 March 2021, compared to DKK 887 million on 31 March
2020.
FINANCIAL DEVELOPMENT 2020 - 2021
(DKKm)
Q1 2020
Currency
translation
Growth
Growth %*
Q1 2021
Divisional revenue
3,441
(129)
297
9.0%
3,609
Gross profit
1,256
(44)
136
11.2%
1,348
EBIT before special items
159
(4)
108
69.7%
263
* Growth in constant currencies
Page 13 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Interim financial statements
Income statement
(DKKm)
Q1 2021
Q1 2020
Revenue
Direct costs
Gross profit
Other external expenses
Staff costs
Operating profit before amortisation and depreciation (EBITDA) before special
items
Amortisation and depreciation
Operating profit (EBIT) before special items
Special items, costs
Financial income
Financial expenses
Profit before tax
Tax on profit for the period
Profit for the period
Profit for the period attributable to:
Shareholders of DSV Panalpina A/S
Non-controlling interests
(5 )
Earnings per share:
Earnings per share of DKK 1 for the period
Diluted earnings per share of DKK 1 for the period
Page 14 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Statement of comprehensive income
(DKKm)
Q1 2021
Q1 2020
Profit for the period
Items that will be reclassified to income statement when certain conditions are met:
Net exchange differences recognised in OCI
(470 )
Fair value adjustments relating to hedging instruments
(14 )
(6 )
Fair value adjustments relating to hedging instruments transferred to financial expenses
(6 )
Tax on items reclassified to income statement
Items that will not be reclassified to income statement:
Actuarial gains/(losses)
(36 )
Tax relating to items that will not be reclassified
(38 )
Other comprehensive income, net of tax
(507 )
Total comprehensive income
(176 )
Total comprehensive income attributable to:
Shareholders of DSV Panalpina A/S
(176 )
Non-controlling interests
(10 )
Total
(176 )
Page 15 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Cash flow statement
(DKKm)
Q1 2021
Q1 2020
Operating profit before amortisation and depreciation (EBITDA) before
special items
Adjustments:
Share-based payments
Change in provisions
(48 )
(55 )
Change in working capital, etc.
(798 )
(355 )
Special items
(189 )
(555 )
Interest received
Interest paid on lease liabilties
(124 )
(122 )
Interest paid, other
(105 )
(170 )
Income tax paid
(233 )
(96 )
Cash flow from operating activities
Purchase of intangible assets
(59 )
(70 )
Purchase of property, plant and equipment
(269 )
(221 )
Disposal of intangible assets, property, plant and equipment
Change in other financial assets
(41 )
Cash flow from investing activities
(357 )
(201 )
Free cash flow
Proceeds from borrowings
Repayment of borrowings
(43 )
(1,006 )
Repayment of lease liabilities
(745 )
(785 )
Other financial liabilities incurred
(18 )
Transactions with shareholders:
Dividends distributed
(920 )
(588 )
Purchase of treasury shares
(4,815 )
(3,030 )
Sale of treasury shares
Other transactions with shareholders
(2 )
Cash flow from financing activities
(2,332 )
(824 )
Cash flow for the period
(86 )
Cash and cash equivalents 1 January
Cash flow for the period
(86 )
Currency translation
(385 )
Cash and cash equivalents end of period
The cash flow statement cannot be directly derived from the balance sheet and income statement.
Statement of adjusted free cash flow
Q1 2021
Q1 2020
Free cash flow
2,246
1,145
Special items (restructuring costs)
189
555
Repayment of lease liabilities (IFRS 16 impact reversed)
(745)
(785)
Adjusted free cash flow
1,690
915
Page 16 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Balance sheet – Assets
(DKKm)
31.03.2021
31.12.2020
31.03.2020
Intangible assets
Right-of-use (ROU) assets
Property, plant and equipment
Other receivables
Deferred tax assets
Total non-current assets
Trade receivables
Contract assets
Inventories
Other receivables
Cash and cash equivalents
Assets held for sale
Total current assets
Total assets
Balance sheet – Equity and liabilities
(DKKm)
31.03.2021
31.12.2020
31.03.2020
Share capital
Reserves and retained earnings
DSV Panalpina A/S shareholders’ share of equity
Non-controlling interests
(102 )
(88 )
(112 )
Total equity
Lease liabilities
Borrowings
Pension obligations
Provisions
Deferred tax liabilities
Total non-current liabilities
Lease liabilities
Borrowings
Trade payables
Accrued cost of services
Provisions
Other payables
Tax payables
Total current liabilities
Total liabilities
Total equity and liabilities
Page 17 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Statement of changes in equity at 31 March 2021
Attributable to shareholders of DSV Panalpina A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity at 1 January 2021
(2,836 )
(88 )
Profit for the period
(5 )
Other comprehensive income, net of tax
(5 )
Total comprehensive income for the period
(10 )
Transactions with shareholders:
Share-based payments
Tax on share-based payments
Dividends distributed
(920 )
(920 )
(1 )
(921 )
Purchase of treasury shares
(5 )
(4,810 )
(4,815 )
(4,815 )
Sale of treasury shares
Dividends on treasury shares
Other adjustments
(3 )
Total transactions with shareholders
(4 )
(5,121 )
(5,125 )
(4 )
(5,129 )
Equity at 31 March 2021
(2,036 )
(102 )
Statement of changes in equity at 31 March 2020
Attributable to shareholders of DSV Panalpina A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity at 1 January 2020
(265 )
(111 )
Profit for the period
Other comprehensive income, net of tax
(486 )
(18 )
(504 )
(3 )
(507 )
Total comprehensive income for the period
(486 )
(176 )
(176 )
Transactions with shareholders:
Share-based payments
Tax on share-based payments
(126 )
(126 )
(126 )
Dividends distributed
(588 )
(588 )
(1 )
(589 )
Purchase of treasury shares
(5 )
(3,025 )
(3,030 )
(3,030 )
Sale of treasury shares
Dividends on treasury shares
Other adjustments
(23 )
(23 )
(23 )
Total transactions with shareholders
(3 )
(3,037 )
(3,040 )
(1 )
(3,041 )
Equity at 31 March 2020
(754 )
(112 )
Page 18 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Notes
1 Accounting policies
This Interim Financial Report has been prepared in accordance
with IAS 34 “Interim Financial Reporting” as adopted by the
European Union and Danish disclosure requirements for listed
companies.
Except as stated below, accounting policies applied in preparing
the Interim Financial Report are consistent with those applied in
preparing the 2020 DSV Panalpina Annual Report. The 2020
DSV Panalpina Annual Report provides a full description of the
Group’s accounting policies.
Changes in accounting policies
The DSV Panalpina Group has implemented the latest
amendments to the International Financial Reporting Standards
(IFRS) effective as of 1 January 2021 as adopted by the
European Union.
None of the amendments implemented has had any material
impact on the Group’s financial statements, nor are they
expected to have so in the foreseeable future.
2 Management judgements and estimates
In preparing the Interim Financial Statements, Management
makes various accounting estimates and judgements that affect
the reported amounts and disclosures in the statements and in
the notes to the financial statements. These are based on
professional experience, historical data and other factors
available to Management.
By nature, a degree of uncertainty is involved when carrying
out these judgements and estimates, hence actual results
may deviate from the assessments made at the reporting
date. Judgements and estimates are continuously evaluated,
and the effects of any changes are recognised in the
relevant period.
Primary financial statement items in which more significant
accounting estimates are applied are listed in Chapter 1 of the
Notes to the 2020 DSV Panalpina Annual Report to which is
referred.
3 New accounting regulations
The IASB has issued a number of new standards and
amendments not yet in effect or endorsed by the EU and
therefore not relevant for the preparation of the Q1 2021 Interim
Financial Report.
None of these are currently expected to carry any significant
impact on the financial statements of the DSV Panalpina Group
when implemented.
4 Segment information
Air & Sea
Road
Solutions
Non-allocated items
and eliminations
Total
(DKKm)
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Condensed income statement
Revenue
22,526
16,479
7,565
7,469
3,499
3,347
26
14
33,616
27,309
Intercompany revenue
398
195
491
452
110
94
(999)
(741)
-
-
Divisional revenue
22,924
16,674
8,056
7,921
3,609
3,441
(973)
(727)
33,616
27,309
Direct costs
18,136
12,799
6,399
6,386
2,261
2,185
(965)
(745)
25,831
20,625
Gross profit
4,788
3,875
1,657
1,535
1,348
1,256
(8)
18
7,785
6,684
Other external expenses
753
797
258
287
281
289
(443)
(506)
849
867
Staff costs
1,445
1,679
742
757
377
385
356
392
2,920
3,213
Operating profit before amortisation,
depreciation (EBITDA) before special items
2,590
1,399
657
491
690
582
79
132
4,016
2,604
Amortisation and depreciation
197
269
254
232
427
423
71
114
949
1,038
Operating profit (EBIT) before special items
2,393
1,130
403
259
263
159
8
18
3,067
1,566
Condensed balance sheet
Total assets
55,264
50,254
22,542
20,554
16,915
13,542
6,865
12,020
101,586
96,370
Total liabilities
53,182
50,337
16,379
13,868
13,154
11,502
(26,528)
(25,439)
56,187
50,268
Page 19 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
5 Revenue
Sale of services and geographical segmentation specify as follows:
EMEA
Americas
APAC
Total
(DKKm)
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Q1 2021
Q1 2020
Air services
4,888
4,133
3,657
3,093
4,430
2,304
12,975
9,530
Sea services
5,280
4,501
2,861
2,237
1,808
406
9,949
7,144
Road services
7,458
7,306
598
615
-
-
8,056
7,921
Solutions services
2,592
2,355
688
757
329
329
3,609
3,441
Total
20,218
18,295
7,804
6,702
6,567
3,039
34,589
28,036
Non-allocated items and eliminations
(973)
(727)
Total revenue
33,616
27,309
6 Share options schemes
DSV Panalpina has launched a new 2021 share-based payment
incentive scheme with the purpose of motivating and retaining
senior staff and members of the Executive Board. The scheme
is also intended to align the interests of staff and shareholders.
Share options are granted pursuant to the current DSV
Panalpina Remuneration Policy as approved by the Annual
General Meeting and the Board of Directors.
The share options are equity settled and can be exercised by
cash purchase of shares only during the exercise period. The
obligation relating to the share options scheme will be covered
by the Company’s treasury shares.
The fair value at 31 March 2021 of the 2021 share options
granted amounts to DKK 205 million and has been determined
based on a Black & Scholes valuation model. The assumptions
applied are listed in the following table:
Vesting period
01.04.2021-31-03.2024
Exercise period
01.04.2024-31.03.2026
Number of employees included
2,201
Number of options granted:
Executive Board
156,750
Senior staff
2,281,550
Total
2,438,300
Value assumptions:
Exercise price
1,325
Volatility (%)
18
Risk-free interest rate (%)
-0.1
7 Events after the reporting date
On 27 April 2021, DSV Panalpina A/S and Agility Public
Warehousing Company K.S.P.C. (Agility) have reached an
agreement for DSV Panalpina to acquire 100% of the shares in
Agility’s Global Integrated Logistics business which is the global
logistics division of Agility.
The consideration will be made in DSV Panalpina shares by
offering 19,304,348 shares of 1 DKK/share to Agility. The
transaction has an enterprise value of approximately USD 4.2
billion (approximately DKK 26.0 billion).
The closing date is expected to occur in the third quarter of
2021, subject to regulatory approvals and approval by Agility’s
shareholders.
Transactional overview and further details of the agreement are
provided in DSV Panalpina Company Announcement No. 881
and on pages 5-6 of the Q1 2021 Interim Financial Report.
Page 20 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 882 – 27 April 2021
Statement by the Board of
Directors and the Executive
Board
Hedehusene, 27 April 2021
Executive Board:
Jens Bjørn Andersen
CEO
Jens H. Lund
CFO
Board of Directors:
Thomas Plenborg
Chairman
Jørgen Møller
Deputy Chairman
Anette Sadolin
Birgit W. Nørgaard
Marie-Louise Aamund
Beat Walti
Niels Smedegaard