DSV Group
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Page 1 of 20
INTERIM FINANCIAL REPORT
Q1 2022
Company Announcement No. 957
27 April 2022
Selected key figures and ratios for the period 1 January – 31 March 2022
Q1 2022
Q1 2021
Key figures (DKKm)
Revenue
61,125
33,616
Gross profit
12,877
7,785
Operating profit (EBIT) before special items
6,496
3,067
Special items, costs
404
-
Profit for the period
4,386
2,329
Adjusted earnings for the period
4,747
2,390
Adjusted free cash flow
4,858
1,690
Ratios
Conversion ratio
50.4%
39.4%
Diluted adjusted earnings per share of DKK 1 for the last 12 months
60.5
33.7
Jens Bjørn Andersen, Group CEO: “For Q1 2022, we report a strong set of results, with earnings growth across all divisions and a strong
cash flow. We are tracking the plans for the GIL integration and are on track for completion in Q3 2022. The markets continue to be
impacted by tight capacity and congestion, and in March we saw the return of COVID-19 lockdowns in China – a reminder to us all that the
pandemic is still not over.
The difficult situation in Ukraine is on everyone’s mind. DSV shipments to and from Russia and Belarus have stopped, except certain
humanitarian shipments, and we are in the process of divesting and exiting our activities in Russia. The direct financial impact is not
material as the combined revenue in Ukraine, Russia and Belarus represents less than 1% of the Group’s revenue. Still, the situation has
impacted the markets negatively in several ways, especially for air and road transports, and we continue to do our best to find capacity and
alternative solutions for our customers.”
Outlook for 2022
Uncertainty related to the global economy has increased in recent months; however, we expect that the continued disruptions of global
supply chains will support a high demand for our services. Based on DSV’s strong performance in Q1 2022 and our expectations for the
remainder of the year, we upgrade the full-year outlook for 2022 as follows:
• EBIT before special items is expected to be in the range of DKK 21,000-23,000 million (previously DKK 18,000-20,000 million).
Share buyback
A separate company announcement about the launch of a new share buyback programme of up to DKK 6,000 million will be issued 27
April 2022. The programme will be concluded no later than 25 July 2022.
Contacts
Investor Relations:
Flemming Ole Nielsen, tel. +45 43 20 33 92, flemming.o.nielsen@dsv.com
Sebastian Rosborg, tel. +45 43 20 33 87, sebastian.rosborg@dsv.com
Media:
Maiken Riise Andersen, tel. +45 43 20 30 74, maiken.r.andersen@dsv.com
Yours sincerely,
Page 2 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Financial highlights
Q1 2022
Q1 2021
Results (DKKm)
Revenue
61,125
33,616
Gross profit
12,877
7,785
Operating profit before amortisation and depreciation (EBITDA) before special items
7,676
4,016
Operating profit (EBIT) before special items
6,496
3,067
Special items, costs
404
-
Net financial expenses
329
21
Profit for the period
4,386
2,329
Adjusted earnings for the period
4,747
2,390
Cash flows (DKKm)
Operating activities
5,301
2,603
Investing activities
49
(357)
Free cash flow
5,350
2,246
Adjusted free cash flow
4,858
1,690
Share buyback
(3,546)
(4,815)
Dividends distributed
(1,320)
(920)
Cash flow for the period
2,420
(86)
Financial position (DKKm)
DSV A/S shareholders’ share of equity
75,621
45,501
Balance sheet total
168,308
101,586
Net working capital
9,051
3,646
Net interest-bearing debt
29,621
21,992
Invested capital
103,986
66,420
Gross investment in property, plant and equipment
148
269
Financial ratios (%)*
Gross margin
21.1
23.2
Operating margin
10.6
9.1
Conversion ratio
50.4
39.4
Effective tax rate
23.9
23.5
ROIC before tax
23.1
16.4
Return on equity (ROE)
21.8
13.6
Solvency ratio
44.9
44.8
Gearing ratio
1.2
1.5
Share ratios*
Earnings per share of DKK 1 for the last 12 months
57.6
27.6
Diluted adjusted earnings per share of DKK 1 for the last 12 months
60.5
33.7
Number of shares issued (’000)
240,000
230,000
Number of treasury shares (’000)
8,097
7,640
Average number of shares issued (’000) for the last 12 months
229,807
226,291
Average diluted number of shares (’000) for the last 12 months
234,733
230,911
Share price end of period (DKK)
1,300.5
1,244.5
Non-Financials
Number of full-time employees at 31 March
* For a definition of key figures and ratios, please refer to page 85 of the DSV Annual Report 2021.
Page 3 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
The Group achieved a gross profit of DKK 12,877 million for the first three months of 2022, compared to
DKK 7,785 million for the same period last year. The strong increase was driven by the addition of GIL
business and growth in all divisions – especially the Air & Sea and Solutions divisions.
EBIT before special items for the first three months of 2022 came to DKK 6,496 million, compared to DKK
3,067 million for the same period last year.
For the rolling 12-month period ended 31 March 2022, the Group achieved a 79.5% increase in diluted
adjusted earnings per share.
FINANCIAL DEVELOPMENT 2021 - 2022
Change
(DKKm)
Q1 2021
Currency
translation
Growth
Growth %*
Q1 2022
Revenue
33,616
825
26,684
77.5%
61,125
Gross profit
7,785
229
4,863
60.7%
12,877
EBIT before special items
3,067
119
3,310
103.9%
6,496
Gross margin (%)
23.2
21.1
Operating margin (%)
9.1
10.6
Conversion ratio (%)
39.4
50.4
* Growth including M&A and in constant currencies
Integration of Agility’s Global Integrated
Logistics business
The acquisition of Agility’s Global Integrated Logistics business
(GIL) was closed in August 2021, as of when GIL has been
included in the consolidated financial statements of DSV.
Consequently, the business combination was not included in the
comparable figures for Q1 2021.
The integration of GIL is progressing according to plan, and we
expect to complete the integration in Q3 2022. In line with
previous announcements, GIL is expected to contribute with at
least DKK 3,000 million to the combined EBIT before special
items on an annual basis. Around 85% of the EBIT contribution
is expected to impact the income statement in 2022, and we
expect full-year impact in 2023.
The EBIT impact includes synergies from the consolidation of
operations, logistics facilities, back-office functions and IT
infrastructure.
Integration costs in the level of DKK 1,000 million are expected
in 2022. These costs will be charged to the income statement
under special items.
The GIL activities have been included in the existing DSV
divisional structure. The acquisition has the largest impact on
the Air & Sea division. Approximately 75-80% of the activities of
GIL are air and sea freight related and the rest are Solutions and
Road services.
Ukraine and Russia
As part of our global network, DSV has subsidiaries in Ukraine,
Russia and Belarus. The combined revenue in the three
countries represents less than 1% of the Group’s revenue and
the Group has no material investments in these countries. As
such, no material direct impact on the financial results or
financial position of Group is expected.
Activities in Ukraine were temporarily suspended when the crisis
started. A smaller part of the operation is up and running again
to support humanitarian shipments into the country.
The situation has led to a stop of DSV shipments to and from
Russia, with the exception of medical and humanitarian
supplies. We are in the process of divesting our activities in
Russia.
The situation in Ukraine and the sanctions imposed in response
by the EU, US, UK and others against Russia have impacted the
transport markets in several areas. The closure of Russian
airspace has reduced available air freight capacity between Asia
and Europe due to longer flight time and sanctions against
Russian airlines. In Europe, the decision by many Ukrainian
truck drivers to return to their home country has contributed to
further capacity tightness in our Road activities. In both cases,
we have been able to find capacity and alternative solutions for
our customers.
Page 4 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Results for the period
Revenue
For the first three months of 2022, revenue amounted to DKK
61,125 million, compared to DKK 33,616 million last year. In
constant currencies and including the impact from M&A, growth
for the three-month period was 77.5%.
Revenue by division compared to same period last year is
specified below:
(DKKm)
Q1 2022
Growth*
Air & Sea
45,887
94.1%
Road
10,188
25.9%
Solutions
6,162
66.5%
Group and eliminations
(1,112)
Total
61,125
77.5%
* Growth including M&A and in constant currencies
The revenue growth in Air & Sea was driven by the inclusion of
GIL and higher freight rates for both air and sea compared to Q1
2021. Measured on volumes, we estimate that the transport
markets were flat for air freight and down for sea freight in Q1
2022.
The air and sea markets continue to be impacted by capacity
shortages and congestion in different parts of the world. Partly
due to seasonality, the congestion eased slightly in Q1 2022
compared to the situation by the end of 2021. However, the
March 2022 COVID-19 lockdowns in China and the closure of
Russian air space add to the challenges in the freight markets in
the coming quarters.
Road and Solutions have also achieved strong growth in
revenue in Q1 2022, driven by general market growth and
market share gains in both divisions. GIL also contributed to the
growth in the quarter, especially in the Solutions division.
In Q4 2021, we launched our Green Logistics services. The
services have been well received and customers have shown
good interest. However, so far, the impact on actual revenue is
limited.
Revenue by division, Q1 2022
Gross profit
For the first three months of 2022, gross profit amounted to DKK
12,877 million, compared to DKK 7,785 million last year. In
constant currencies and including M&A, growth in gross profit
was 60.7%.
Gross profit by division compared to same period last year is
specified below:
(DKKm)
Q1 2022
Growth*
Air & Sea
8,637
73.6%
Road
1,938
16.5%
Solutions
2,322
67.9%
Group and eliminations
(20)
Total
12,877
60.7%
* Growth including M&A and in constant currencies
The growth in Air & Sea was driven by higher gross profit yields
and positively impacted by the extraordinary market conditions
characterised by disruption, tight capacity and high freight rates.
In Road and Solutions, the increase in gross profit was mainly
driven by growth in activity compared to 2021.
All regions showed growth in gross profit, strongest in APAC
and Americas. Furthermore, the Middle East was significantly
impacted by GIL’s strong network and good performance.
Gross profit by division, Q1 2022
The gross margin was 21.1% for the first three months,
compared to 23.2% for the same period last year. The decline is
related to both Air & Sea and Road, where higher freight rates
and oil prices have caused an increase in the cost for transport
services. This cost inflation leads to a higher pass-through
revenue and thus a lower gross margin.
EBIT before special items
EBIT before special items amounted to DKK 6,496 million for the
first three months of 2022, compared to DKK 3,067 million last
year. In constant currencies, increase in EBIT before special
items was 103.9%.
EBIT by division compared to same period last year is specified
below:
(DKKm)
Q1 2022
Growth*
Air & Sea
5,224
108.5%
Road
498
23.3%
Solutions
789
194.4%
Group and eliminations
(15)
Total
6,496
103.9%
* Growth including M&A and in constant currencies
The increase in EBIT was driven by the increase in gross profit
in all divisions combined with the effect of continued strong cost
management as well as the addition of GIL activities. The
Solutions division achieved the highest EBIT growth for the
Page 5 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
quarter, and besides the inclusion of the strong GIL operations,
the division continues to benefit from consolidation of
infrastructure and high utilisation of capacity.
All regions contributed strongly to the development and all
achieved growth rates above 100% for Q1 2022.
Conversion ratio for the Group reached 50.4% for Q1 2022,
compared to 39.4% for the same period last year. All divisions
improved their conversion ratios even though general cost
inflations are putting pressure on the cost base.
EBIT by division, Q1 2022
Special items
Integration costs related to GIL amounted to DKK 404 million for
Q1 2022 (Q1 2021: DKK 0 million).
Financial items
Financial items totalled a net expense of DKK 329 million for the
first three months, compared to a net expense of DKK 21 million
for the same period last year. Foreign exchange adjustments
amounted to an expense of DKK 53 million (Q1 2021: income of
DKK 158 million) and were primarily related to intercompany
loans between DSV entities in different countries and had no
cash impact. Furthermore, financial expenses for the quarter
were impacted by the inclusion of GIL and higher net interest-
bearing debt compared to the same period last year.
(DKKm)
Q1 2022
Q1 2021
Interest on lease liabilities
162
119
Other interest cost, net
112
57
Interest on pensions
2
3
Foreign exchange adjustments
53
(158)
Financial expenses
329
21
Tax on profit for the period
The effective tax rate came to 23.9% for the first three months,
compared to 23.5% for the same period last year. The effective
tax rate for the Group is still expected to be in the level of 23%
for 2022; however, the effective tax rate can be impacted by
non-deductible integration costs during large integrations.
Profit for the period
Profit for the first three months of 2022 was DKK 4,386 million,
compared to DKK 2,329 million for the same period of 2021. The
higher profit for the period was mainly due to higher EBIT.
Diluted adjusted earnings per share
The rolling 12-month figure increased by 79.5% compared to
last year and came to DKK 60.5 per share (2021: DKK 33.7 per
share).
Cash flow
CASH FLOW STATEMENT
(DKKm)
Q1 2022
Q1 2021
Cash flow from operating activities
5,301
2,603
Cash flow from investing activities
49
(357)
Free cash flow
5,350
2,246
Cash flow from financing
activities
(2,930)
(2,332)
Cash flow for the period
2,420
(86)
Free cash flow
5,350
2,246
Special items (restructuring costs)
397
189
Repayment of lease liabilities
(889)
(745)
Adjusted free cash flow
4,858
1,690
Cash flow from operating activities increased by 104%
compared to last year, driven by higher EBITDA before special
items but offset by higher NWC and higher payments of
company income taxes related to prior year’s good results.
Cash flow from investing activities amounted to DKK 49 million
for the first three months of 2022, compared to a negative cash
flow of DKK 357 million for the same period of 2021. The
positive development is due to disposals of properties.
Net working capital
On 31 March 2022, the Group’s net working capital was DKK
9,051 million, compared to DKK 3,646 million on 31 March 2021.
NWC increased by DKK 5,405 million.
The main increase in NWC is seen in the Air & Sea division, as
this division is more impacted by higher freight rates.
The increase mainly related to higher trade receivables as a
derived consequence of the record-high freight rates also
leading to a significant increase in revenue and thereby increase
in receivables. It is important to emphasize that we see no
increase in overdue receivables compared to last year.
Relative to full-year revenue, funds tied up in NWC is 3.7% on
31 March 2022 (31 March 2021: 2.8%).
Capital structure and finances
DSV A/S shareholders’ share of equity
DSV shareholders’ share of equity was DKK 75,621 million on
31 March 2022 (DKK 74,103 million on 31 December 2021).
DSV reduced its share capital on 20 April 2022 through the
cancellation of 6,000,000 treasury shares. Please refer to
Company Announcement No. 956.
Page 6 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
On 31 March 2022, the Company’s portfolio of treasury shares
was 8,097,491 shares. On 26 April 2022, the portfolio of
treasury shares was 2,130,315 shares.
The solvency ratio excluding non-controlling interests was
44.9% on 31 March 2022 (31 March 2021: 44.8%).
DEVELOPMENT IN EQUITY
(DKKm)
Q1 2022
Q1 2021
Equity at 1 January
74,103
47,385
Profit for the period (attributable to DSV
shareholders)
4,360
2,334
Currency translation, foreign enterprises
1,737
810
Allocated to shareholders
(4,866)
(5,735)
Sale of treasury shares
199
273
Other equity movements
88
434
Equity end of period
75,621
45,501
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 29,621 million on 31
March 2022, compared to DKK 21,992 million on 31 March
2021.
On 11 March 2022, it was announced that DSV had completed a
new 8-year EUR 600 million Eurobond issue (approximately
DKK 4,500 million). Please refer to Company Announcement
No. 849.
The financial gearing ratio (NIBD/EBITDA) was 1.2x on 31
March 2022, compared to 1.5x last year. We maintain the
financial gearing ratio target of below 2.0x NIBD/EBITDA, and a
new share buyback programme of DKK 6,000 million is initiated
on 27 April 2022.
The weighted average duration of the Company’s long-term
bonds, drawn and undrawn credit facilities and committed loans
was 7.5 years on 31 March 2022. The weighted average
duration of the Company’s long-term bonds and drawn credit
facilities was 9.0 years on 31 March 2022.
Invested capital and ROIC
The invested capital including goodwill and customer
relationships amounted to DKK 103,986 million on 31 March
2022, compared to DKK 66,420 million on 31 March 2021. The
increase was mainly due to the GIL acquisition and the increase
in net working capital.
Driven by the strong growth in earnings, return on invested
capital including goodwill and customer relationships was 23.1%
for the rolling 12-month period ended 31 March 2022, compared
to 16.4% for the same period last year. Excluding goodwill and
customer relationships, return on invested capital was 88.2% for
the rolling 12-month period ended 31 March 2022, compared to
62.9% for the same period last year.
Outlook
Uncertainty related to the global economy has increased in
recent months; however, we expect that the continued
disruptions of global supply chains will support a high demand
for our services in 2022. Based on DSV’s strong performance in
Q1 2022 and our expectations for the remainder of the year, we
upgrade the full-year outlook for 2022 as follows:
• EBIT before special items is expected to be in the
range of DKK 21,000-23,000 million (previously DKK
18,000-20,000 million).
• The effective tax rate is expected to approximate 23%
(unchanged).
The outlook is based on the assumption of a global GDP growth
of 2-3% (previously 4%). We expect that the lower activity level
will be compensated by higher gross profit per shipment, driven
by both external market conditions and internal improvements
following the GIL integration.
We are unable to isolate GIL’s activities, but these are positively
impacted by the same factors as the legacy DSV business. We
expect a total EBIT contribution of at least DKK 3,000 million, of
which 85% are expected in 2022. Full-year impact of the GIL
integration is expected in 2023.
Special items of around DKK 1,000 million related to the
integration are expected in 2022.
The upgrade is impacted by the recent increase in currency
rates and assumes that the currency exchange rates, especially
the US dollar against DKK, will remain at the current level.
Due to the volatile and unpredictable transport markets, the
assumptions that our outlook for 2022 rely on are more
uncertain than they would normally be.
Page 7 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
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.
The division achieved a 73.6% increase in gross profit and 108.5% increase in EBIT before special items
for the first three months of 2022. The increase in earnings was driven by strong gross profit yields in
challenging freight markets and a continued focus on operational excellence. The inclusion of GIL also
contributed positively to the result for the quarter.
INCOME STATEMENT
(DKKm)
Q1 2022
Q1 2021
Divisional revenue
45,887
22,924
Direct costs
37,250
18,136
Gross profit
8,637
4,788
Other external expenses
1,076
753
Staff costs
2,033
1,445
EBITDA before special items
5,528
2,590
Amortisation and depreciation
304
197
EBIT before special items
5,224
2,393
KEY FIGURES AND RATIOS
Q1 2022
Q1 2021
Gross margin (%)
18.8
20.9
Operating margin (%)
11.4
10.4
Conversion ratio (%)
60.5
50.0
Number of full-time employees
23,700
17,999
Total invested capital (DKKm)
73,608
44,596
Net working capital (DKKm)
10,584
4,079
ROIC before tax (%)
26.4
18.3
Market development
Freight volume growth
DSV
Q1 2022
Market
Q1 2022
Air freight – tonnes
22%
0%
Sea freight – TEUs
15%
(5-10%)
DSV’s growth includes impact from M&A, market growth rates are based
on DSV estimates.
The freight markets continue to be impacted by the ramifications
of the pandemic, leading to congestion and inefficiencies. The
COVID-19 lock-downs in China and the situation in Ukraine
added to the challenges during Q1 2022.
Available air freight capacity remains impacted by limited belly
space capacity in passenger planes and the closure of Russian
air space led to further capacity tightness during Q1 2022. In
response to this situation, additional capacity was added to
DSV’s Air Charter Network during Q1 2022.
DSV achieved 22% volume growth in air freight in Q1 2022.
Adjusted for the addition of GIL, we estimate that DSV volumes
grew approximately 2%, slightly above the general market for
the quarter.
The sea freight market remains impacted by port congestion
inefficiencies across the supply chains. The seasonally lower
activity in Q1 has led to slight improvements in the situation, but
freight rates remain elevated and schedule reliability low.
DSV achieved 15% volume growth in sea freight in Q1 2022.
Adjusted for the addition of GIL, DSV’s volume growth was
down by approximately 7%. This was in line with the estimated
Page 8 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
market growth and impacted by discontinued low-margin
business and the integration of GIL.
Divisional revenue
The division’s revenue amounted to DKK 45,887 million for the
first three months of 2022, compared to DKK 22,924 million for
the same period last year.
Besides the addition of GIL, the growth in revenue for the first
three months of 2022 was driven by significantly higher freight
rates for both air and sea compared to the same period last
year.
The growth was driven by all regions and was highest in APAC
and Americas.
Gross profit
For the first three months of 2022, gross profit amounted to DKK
8,637 million, compared to DKK 4,788 million for the same
period last year.
The increase in the first three months of 2022 was driven by the
addition of GIL and significantly higher yields per unit for both air
and sea freight.
As we saw in the second half of 2021, the market conditions of
tight capacity, congestion and disruption on the global logistics
markets have a positive impact on gross profit per TEU (sea
freight) and per tonne (air freight). Our skilled freight forwarders,
scale benefits and strong carrier relationships enable us to find
transport solutions for our customers despite imbalances in the
market. At the same time, the disruptions impact time
consumption per shipment, as our freight forwarders work hard
to find the most optimal solutions for our customers.
The division’s gross margin was 18.8% for the first three months
of 2022, compared to 20.9% last year. Higher freight rates for
both air and sea freight have caused significant increases in the
division’s direct cost for freight services. This cost inflation leads
to a higher pass-through revenue and thus a lower gross
margin.
EBIT before special items
EBIT before special items came to DKK 5,224 million for the first
three months of 2022, compared to DKK 2,393 million for the
same period last year.
The increase in EBIT before special items was driven by the
growth in gross profit and supported by the continued focus on
cost management. The conversion ratio was 60.5% for the first
three months of 2022, compared to 50.0% for the same period
last year.
All regions contributed to the strong growth in earnings in the
quarter, and the integration of GIL is progressing well and
contributed positively across the network.
The number of full-time employees increased by 31.7%
compared to March 2021. The increase was mainly related to
the acquisition of GIL.
Net working capital
The Air & Sea division’s net working capital came to DKK
10,584 million on 31 March 2022, compared to DKK 4,079
million on 31 March 2021. The steep increase was due to the
higher freight rates impacting receivables and the inclusion of
GIL. On top of the high freight rates, we continue to see
challenges in the US infrastructure which impacts the invoicing
process due to delays at seaports and airports.
FINANCIAL DEVELOPMENT 2021 - 2022
Change
(DKKm)
Q1 2021
Currency
translation
Growth
Growth %*
Q1 2022
Divisional revenue
22,924
717
22,246
94.1%
45,887
Gross profit
4,788
187
3,662
73.6%
8,637
EBIT before special items
2,393
113
2,718
108.5%
5,224
AIR AND SEA SPLIT
Sea freight
Air freight
(DKKm)
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Divisional revenue
21,680
9,949
24,207
12,975
Direct costs
17,738
7,923
19,512
10,213
Gross profit
3,942
2,026
4,695
2,762
Gross margin (%)
18.2
20.4
19.4
21.3
Volume (TEUs/tonnes)
667,653
581,019
410,911
336,307
Gross profit per unit (DKK)
5,904
3,487
11,426
8,213
Page 9 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
DSV Road
The Road division is among the market leaders in Europe and furthermore has operations in North
America, South Africa and in the Middle East. The division operates more than 23,000 trucks and offers
full load, part load and groupage services through a network of more than 250 terminals.
For the first three months of 2022, the Road division achieved a 16.5% growth in gross profit and a 23.3%
increase in EBIT before special items. The increase in earnings was driven by market share gains and
strong operational performance.
INCOME STATEMENT
(DKKm)
Q1 2022
Q1 2021
Divisional revenue
10,188
8,056
Direct costs
8,250
6,399
Gross profit
1,938
1,657
Other external expenses
341
258
Staff costs
871
742
EBITDA before special items
726
657
Amortisation and depreciation
228
254
EBIT before special items
498
403
KEY FIGURES AND RATIOS
Q1 2022
Q1 2021
Gross margin (%)
19.0
20.6
Operating margin (%)
4.9
5.0
Conversion ratio (%)
25.7
24.3
Number of full-time employees
17,001
14,222
Total invested capital (DKKm)
10,617
9,189
Net working capital (DKKm)
(1,130)
(968)
ROIC before tax (%)
19.7
15.9
Market development
We estimate that the market grew by 3-5% in the first three
months of 2022 compared to the same period last year.
The European haulage capacity declined in Q1 2022 as a result
of several factors. The EU Mobility Package came into effect,
and several Ukrainian truck drivers have returned to their home
country due to the situation. In combination with the high activity
levels this has led to tighter capacity and increasing road freight
rates across most regions. Higher fuel costs also contributed to
increasing freight rates (diesel surcharge) during the quarter.
Thanks to the strong market position and an efficient
procurement setup, DSV Road has been able to secure the
necessary capacity so far, and we estimate that the Road
division has taken market share across most markets during Q1
2022.
Divisional revenue
The division’s revenue amounted to DKK 10,188 million for the
first three months of 2022, compared to DKK 8,056 million for
the same period last year.
The growth in revenue during the first quarter of 2022 was
driven by higher activity levels and higher freight rates. All
regions contributed to the growth in the quarter, with North
America achieving the highest growth.
The addition of GIL and Globeflight in South Africa also
contributed to the growth for the quarter.
Page 10 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Gross profit
For the first three months of 2022, gross profit totalled DKK
1,938 million, compared to DKK 1,657 million for the same
period last year, which is an increase of 16.5%. The growth was
driven by higher activity levels and the addition of GIL and
Globeflight.
The division’s gross margin was 19.0% for the first three months
of 2022, compared to 20.6% for Q1 2021. Capacity shortages,
higher diesel prices and general cost inflation – partly due to the
EU Mobility Package – has led to higher direct freight cost for
the division. The pass-through element of this cost inflation
impacts the gross margin negatively.
The EU Mobility Package includes a number of legislative
changes for the road transport sector. Most importantly, trucks
operating on international traffics must return to the home
address of the haulier every eight weeks. Furthermore, tighter
restrictions for cabotage operations and new requirements for
minimum wage for drivers have been implemented.
EBIT before special items
EBIT before special items was DKK 498 million for the first three
months of 2022, compared to DKK 403 million for the same
period last year. This corresponds to an increase for the period
of 23.3%.
The increase in EBIT before special items for the first three
months of 2022 was driven by the increase in gross profit and
an improved conversion ratio, which came to 25.7% for the
period, compared to 24.3% for the same period last year.
The increase in earnings was driven by good performance
across all regions.
The number of full-time employees increased by 19.5%
compared to March 2021. The increase was mainly due to
generally higher activity and the GIL and Globeflight
acquisitions.
Net working capital
The Road division’s net working capital was negative by DKK
1,130 million on 31 March 2022, compared to a negative DKK
968 million on 31 March 2021.
FINANCIAL DEVELOPMENT 2021 - 2022
Change
(DKKm)
Q1 2021
Currency
translation
Growth
Growth %*
Q1 2022
Divisional revenue
8,056
34
2,098
25.9%
10,188
Gross profit
1,657
7
274
16.5%
1,938
EBIT before special items
403
1
94
23.3%
498
* Growth including M&A and in constant currencies
Page 11 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
DSV Solutions
The Solutions division offers warehousing and logistics services globally and controls more than 500
logistics facilities. The service portfolio includes freight management, customs clearance, order
management and e-commerce solutions.
For the first three months of 2022, the Solutions division achieved a 67.9% increase in gross profit, which
was converted into an impressive 194.4% increase in EBIT before special items.
INCOME STATEMENT
(DKKm)
Q1 2022
Q1 2021
Divisional revenue
6,162
3,609
Direct costs
3,840
2,261
Gross profit
2,322
1,348
Other external expenses
423
281
Staff costs
525
377
EBITDA before special items
1,374
690
Amortisation and depreciation
585
427
EBIT before special items
789
263
KEY FIGURES AND RATIOS
Q1 2022
Q1 2021
Gross margin (%)
37.7
37.4
Operating margin (%)
12.8
7.3
Conversion ratio (%)
34.0
19.5
Number of full-time employees
31,845
22,188
Total invested capital (DKKm)
22,280
12,073
Net working capital (DKKm)
1,553
1,008
ROIC before tax (%)
13.4
10.8
Market development
It is our estimate that the contract logistics market has grown
approximately 5-10% in the first three months of 2022 compared
to the same period last year. The high market growth leads to
increasing prices for warehouse capacity across most
geographies.
We estimate that DSV Solutions has taken market share in all
major markets in Q1 2022.
Divisional revenue
The division’s revenue was DKK 6,162 million for the first three
months of 2022, compared to DKK 3,609 million for the same
period of 2021. Growth for the period was 66.5%.
Activity levels were higher across all regions and across several
industries in Q1 2022. GIL’s well-run contract logistics
operations in the Middle East and South-East Asia were a
strong contributor to the growth.
Global demand for modern warehouse capacity remains high,
and the division systematically develops new warehouse
capacity in key strategic locations. The new warehouses are
partly replacing older warehouses, but are also adding to the
total capacity of the division and are therefore a key driver for
organic growth.
Gross profit
For the first three months of 2022, gross profit was DKK 2,322
million, compared to DKK 1,348 million for the same period of
2021 – an increase of 67.9% for the period, driven by the strong
revenue growth.
The division’s gross margin was 37.7% for the first three months
of 2022 and was on level with the same period last year. Cost
inflation is high in most regions, but, so far, it has been possible
to pass on the higher costs or to compensate by increasing
productivity and capacity utilisation. The division operates with
record-high warehouse utilisation.
Page 12 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
EBIT before special items
EBIT before special items was DKK 789 million for the first three
months of 2022, compared to DKK 263 million for the same
period of 2021, corresponding to an increase of 194.4%.
The increase in EBIT before special items was driven by the
addition of GIL, especially in the Middle East, and strong organic
growth in revenue and gross profit.
The conversion ratio was 34.0% for the first three months of
2022, compared to 19.5% for the same period last year, and the
division continues its focus on cost optimisation and operational
excellence.
The ongoing consolidation of warehouse capacity into larger,
flexible, multi-customer warehouses has a clear positive impact
on both gross margin and conversion ratio. The new
warehouses can be equipped and automated to match the
needs of different customers, and with several customers in the
same location significant scale benefits can be achieved: better
utilisation of equipment, automated processes and better
planning for the staff.
The consolidation also includes the division’s IT infrastructure.
More than 70% of all sites operate on the division’s global
Warehouse Management System, and this enables
standardisation of services and workflows while reducing the
cost per transaction (order-line).
The number of full-time employees increased by 43.5%
compared to March 2021. The increase was mainly driven by
the acquisitions of GIL and a general increase in activity levels.
Net working capital
The division’s net working capital came to DKK 1,553 million on
31 March 2022, compared to DKK 1,008 million on 31 March
2021. The development was mainly due to higher activity and
the inclusion of GIL.
FINANCIAL DEVELOPMENT 2021 - 2022
(DKKm)
Q1 2021
Currency
translation
Growth
Growth %*
Q1 2022
Divisional revenue
3,609
93
2,460
66.5%
6,162
Gross profit
1,348
35
939
67.9%
2,322
EBIT before special items
263
5
521
194.4%
789
* Growth including M&A and in constant currencies
Page 13 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Interim financial statements
Income statement
(DKKm)
Q1 2022
Q1 2021
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 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. 957 – 27 April 2022
Statement of comprehensive income
(DKKm)
Q1 2022
Q1 2021
Profit for the period
Items that may be reclassified to the income statement when certain conditions are met:
Net exchange differences recognised in OCI
Fair value adjustments relating to hedging instruments
(14 )
Fair value adjustments relating to hedging instruments transferred to financial expenses
Tax on items reclassified to income statement
(2 )
Items that will not be reclassified to income statement:
Actuarial gains/(losses)
Tax relating to items that will not be reclassified
(67 )
(38 )
Other comprehensive income, net of tax
Total comprehensive income
Total comprehensive income attributable to:
Shareholders of DSV A/S
Non-controlling interests
(10 )
Total
Page 15 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Cash flow statement
(DKKm)
Q1 2022
Q1 2021
Operating profit before amortisation and depreciation (EBITDA) before
special items
Adjustments:
Share-based payments
Change in provisions
(48 )
Change in working capital, etc.
(1,145 )
(798 )
Special items
(397 )
(189 )
Interest received
Interest paid on lease liabilities
(162 )
(124 )
Interest paid, other
(201 )
(105 )
Income tax paid
(823 )
(233 )
Cash flow from operating activities
Purchase of intangible assets
(87 )
(59 )
Purchase of property, plant and equipment
(148 )
(269 )
Disposal of intangible assets, property, plant and equipment
Change in other financial assets
(12 )
(41 )
Cash flow from investing activities
(357 )
Free cash flow
Proceeds from borrowings
Repayment of borrowings
(2,065 )
(43 )
Repayment of lease liabilities
(889 )
(745 )
Other financial liabilities incurred
(86 )
Transactions with shareholders:
Dividends distributed
(1,320 )
(920 )
Purchase of treasury shares
(3,546 )
(4,815 )
Sale of treasury shares
Other transactions with shareholders
Cash flow from financing activities
(2,930 )
(2,332 )
Cash flow for the period
(86 )
Cash and cash equivalents 1 January
Cash flow for the period
(86 )
Currency translation
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 2022
Q1 2021
Free cash flow
5,350
2,246
Special items (reversed)
397
189
Repayment of lease liabilities
(889)
(745)
Adjusted free cash flow
4,858
1,690
Page 16 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Balance sheet – Assets
(DKKm)
31.03.2022
31.12.2021
31.03.2021
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)
31.03.2022
31.12.2021
31.03.2021
Share capital
Reserves and retained earnings
DSV A/S shareholders’ share of equity
Non-controlling interests
(102 )
Total equity
Lease liabilities
Borrowings
Pensions and similar 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. 957 – 27 April 2022
Statement of changes in equity at 31 March 2022
Attributable to shareholders of DSV A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity at 1 January 2022
(356 )
Profit for the period
Other comprehensive income, net of tax
(1 )
Total comprehensive income for the period
Transactions with shareholders:
Share-based payments
Tax on share-based payments
(231 )
(231 )
(231 )
Dividends distributed
(1,320 )
(1,320 )
(1,320 )
Purchase of treasury shares
(3,546 )
(3,546 )
(3,546 )
Sale of treasury shares
Capital increase
(1 )
(1 )
Dividends on treasury shares
Other adjustments
(2 )
Total transactions with shareholders
(4,807 )
(4,807 )
(3 )
(4,810 )
Equity at 31 March 2022
Statement of changes in equity at 31 March 2021
Attributable to shareholders of DSV 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 )
Page 18 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
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.
Accounting policies applied in preparing the Interim Financial
Report are consistent with those applied in preparing the DSV
Annual Report 2021. The DSV Annual Report 2021 provides a
full description of the Group’s accounting policies.
Changes in accounting policies
The DSV Group has implemented the latest amendments to the
International Financial Reporting Standards (IFRS) effective as
of 1 January 2022 as adopted by the European Union.
None of the amendments implemented have 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 2021 DSV 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 2022 Interim
Financial Report.
None of these are currently expected to carry any significant
impact on the financial statements of the DSV Group when
implemented.
4 Segment information
Air & Sea
Road
Solutions
Non-allocated items
and eliminations
Total
(DKKm)
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Condensed income statement
Revenue
45,638
22,526
9,473
7,565
5,973
3,499
41
26
61,125
33,616
Intercompany revenue
249
398
715
491
189
110
(1,153)
(999)
-
-
Divisional revenue
45,887
22,924
10,188
8,056
6,162
3,609
(1,112)
(973)
61,125
33,616
Direct costs
37,250
18,136
8,250
6,399
3,840
2,261
(1,092)
(965)
48,248
25,831
Gross profit
8,637
4,788
1,938
1,657
2,322
1,348
(20)
(8)
12,877
7,785
Other external expenses
1,076
753
341
258
423
281
(551)
(443)
1,289
849
Staff costs
2,033
1,445
871
742
525
377
483
356
3,912
2,920
Operating profit before amortisation,
depreciation (EBITDA) before special items
5,528
2,590
726
657
1,374
690
48
79
7,676
4,016
Amortisation and depreciation
304
197
228
254
585
427
63
71
1,180
949
Operating profit (EBIT) before special items
5,224
2,393
498
403
789
263
(15)
8
6,496
3,067
Condensed balance sheet
Total assets
101,346
55,264
24,311
22,542
28,987
16,915
13,664
6,865
168,308
101,586
Total liabilities
79,796
53,182
18,247
16,379
23,198
13,154
(28,751)
(26,528)
92,490
56,187
Page 19 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
5 Revenue
Sale of services and geographical segmentation specify as follows:
EMEA
Americas
APAC
Total
(DKKm)
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Q1 2022
Q1 2021
Air services
7,394
4,888
7,755
3,657
9,058
4,430
24,207
12,975
Sea services
11,145
5,280
6,787
2,861
3,749
1,808
21,681
9,949
Road services
9,181
7,458
1,007
598
-
-
10,188
8,056
Solutions services
4,322
2,592
940
688
900
329
6,162
3,609
Total
32,042
20,218
16,489
7,804
13,707
6,567
62,238
34,589
Non-allocated items and eliminations
(1,113)
(973)
Total revenue
61,125
33,616
6 Special items
Special items are used in connection with the presentation of
profit or loss for the year to distinguish consolidated operating
profit from exceptional items, which by nature are not related to
the Group’s ordinary operations or investment in future activities.
Special items totalled DKK 404 million for the first quarter of
2022 compromising restructuring and reorganisation costs
related to the acquisition of GIL.
The costs are part of the total integration costs of approximately
DKK 1,000 million expected to be recognised in 2022
Q1 2022
Q1 2021
(DKKm)
Reported
income
statement
Special items
Adjusted
income
statement
Reported
income
statement
Special items
Adjusted
income
statement
Revenue
61,125
-
61,125
33,616
-
33,616
Direct costs
48,248
84
48,332
25,831
-
25,831
Gross profit
12,877
(84)
12,793
7,785
-
7,785
Other external expenses
1,289
83
1,372
849
-
849
Staff costs
3,912
212
4,124
2,920
-
2,920
Operating profit before amortisation and depreciation
7,676
(379)
7,297
4,016
-
4,016
Amortisation and depreciation
1,180
26
1,206
949
-
949
Operating profit
6,496
(405)
6,091
3,067
-
3,067
Special items, expenses
404
(404)
-
-
-
-
Financial income
67
-
67
208
-
208
Financial expenses
396
(1)
395
229
-
229
Profit before tax
5,763
-
5,763
3,046
-
3,046
7 Share options schemes
DSV has launched a new 2022 share-based payment incentive
scheme with the purpose of motivating and retaining key
employees and senior management across the organisation and
aligning the interests of these with our shareholders. Share
options are awarded at all levels in the organisation, e.g. from
team leads, specialists, branch managers, country managers,
up to Executive Management.
Share options are granted pursuant to the latest DSV
Remuneration Policy as adopted at the Extraordinary General
Meeting held on 8 September 2021.
The share options granted 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 is
covered by the Company’s treasury shares.
The exercise price of share options granted amounts to DKK
1,485 and has been determined based on the average quoted
market price of the DSV share for the last five trading days
leading up to the date of grant at 31 March 2022, plus a strike
premium of 12.7%.
The fair value of the 2022 share options granted amounts to
DKK 279.8 million and has been determined based on a Black &
Scholes valuation model.
Key assumptions applied in the valuation are:
Vesting period
01.04.2022-31-03.2025
Exercise period
01.04.2025-31-03.2027
Number of employees included
2,524
Number of options granted:
Executive Board
198,250
Senior staff
2,442,650
Total
2,640,900
Value assumptions:
Exercise price
1,485
Volatility (%)
18
Risk-free interest rate (%)
1.15
Page 20 of 20 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 957 – 27 April 2022
Statement by the Board of
Directors and the Executive
Board
The Board of Directors and the Executive Board have today considered and adopted the Interim Financial Report of DSV A/S for the
three-month period ended 31 March 2022.
The Interim Financial Report, which has not been audited or reviewed by the Company auditor, has been prepared in accordance
with IAS 34 “Interim Financial Reporting” as adopted by the European Union and additional requirements in accordance with the
Danish Financial Statements Act.
In our opinion, the Interim Financial Statements give a true and fair view of the Group’s assets, equity, liabilities and financial
position on 31 March 2022 and of the results of the Group’s activities and the cash flow for the three-month period ended 31 March
2022.
We also find that the Management’s commentary provides a fair statement of developments in the activities and financial situation of
the Group, financial results for the period, the general financial position of the Group and a description of the major risks and
elements of uncertainty faced by the Group. Over and above the disclosures in the Interim Financial Report, no changes in the
Group’s most significant risks and uncertainties have occurred relative to the disclosures in the Annual Report for 2021.
Executive Board:
Board of Directors: