Annual Report 2022
Keeping supply
chains flowing in
a world of change
DSV A/S
Hovedgaden 630
2640 Hedehusene
Denmark
CVR no. 58 23 35 28
1 January – 31 December 2022
DSV is one of the world’s leading freight forwarders. We help
companies connect with the world and ensure smooth and
ecient storage and transport of their goods. By air, sea and road.
We keep supply chains flowing – from shipper to customer doorstep
– and help to deliver sustainable growth. By giving our customers
the logistics services they require. By running a profitable operation
that delivers return on investment for our shareholders. And by
giving our people an inspiring place to work and equal oppor tunities
to develop their talent.
Combining the latest technologies and the talent of our strong global
workforce, we make supply chains leaner and greener. That is how
we will help to shape a sustainable future.
Welcome to our Annual Report 2022.
Delivering sustainable growth
Tel. +45 43 20 30 40, CVR no. 58 23 35 28
Annual Report for the year ending 31 December 2022
(46 th financial year). Published 2 February 2023.
Contents
Management’s
commentary
Introduction
Letter from our CEO.......................................... 4
Highlights 2022 ............................................. 6
Five-year overview........................................... 8
Strategy and financial targets
Our strategy: Growth. Eciency. Sustainability. ................. 9
Sustainable logistics for a fast-changing world.................. 11
Our business model ......................................... 13
Our industry and market trends............................... 14
A responsive approach ....................................... 16
Outlook for 2023 and 2026 financial targets................... 17
Capital structure and allocation ............................... 18
Financial and non-financial performance
Financial review ............................................ 19
ESG performance ...........................................23
Air & Sea ................................................... 24
Road ...................................................... 27
Solutions ................................................... 29
Corporate governance and
shareholder information
Risk management ........................................... 31
Corporate governance ....................................... 37
Board of Directors........................................... 40
Shareholder information ..................................... 41
Other information
Quarterly financial highlights.................................. 43
Financial
statements
Consolidated financial statements
Income statement........................................... 45
Statement of comprehensive income .......................... 45
Cash flow statement ........................................ 46
Balance sheet............................................... 47
Statement of changes in equity ............................... 48
Notes to the consolidated financial statements ................. 49
Definition of key figures and ratios ............................ 83
Group company overview .................................... 84
Statements
Management’s statement .................................... 91
Independent Auditor’s reports ................................ 92
Parent Company financial statements
Parent Company financial statements.......................... 95
3 DSV Annual Report 2022 Contents
Keeping supply
chains flowing in
a world of change
In extraordinary market conditions with continued supply
chain disruptions, our teams delivered a strong set of
results in 2022. It was also a year when we finalised the
integration of Agility's Global Integrated Logistics business
(GIL) and we continued to drive the sustainability agenda.
In addition, we had to adjust to an increasingly volatile
macroeconomic and geopolitical environment.
Letter from our CEO
We integrated
Agility GIL
within a year
– our fastest
integration
to date.
Strong financial performance
2022 was a good year for DSV. I am proud of the results we have
achieved for the year and we also made good progress on our long-
term strategic ambitions. Our gross profit for the year amounted to
DKK 52.1 billion (+33.3%), and operating profit before special items
was DKK 25.2 billion (+48.0%).
Our adjusted free cash flow for 2022 amounted to DKK 22.8 billion
(+163.4%) and ROIC improved by 550bp to 25.1%. Read more about
our Group results on pages 19-22.
The significant supply chain disruptions increased the value of our services
and had a positive impact on our financial performance for 2022. As the
freight markets gradually normalise and the general economic slowdown
continues, we expect a significant decline in earnings for 2023. This
development is reflected in our outlook.
Navigating macroeconomy and geopolitics
COVID-19 had a lasting eect on our industry and global supply chains. Over
the past two years, we have managed to adapt to the challenges it created,
mitigate disruptions and oer our customers robust logistics solutions.
Although today the world seems to have moved on from COVID-19, the
pandemic made a significant impact on 2022 and still casts its shadows
across our industry. Market volatility persists. At the start of 2022,
capacity was tight, freight rates reached unprecedented highs, and then
plummeted. In the second half of 2022, we have been in a period of
economic slowdown and declining transport volumes across most markets.
Several factors caused the current slump – normalisation of consumer
behaviour aer the pandemic, the ongoing energy crunch and inflationary
levels not seen in decades, to name a few. Not all geographies and indus-
tries have been aected the same – the Middle East region and the
healthcare and energy industries are examples of more resilient areas.
The volatile macroeconomic environment in 2022 was further fuelled by
Russia’s invasion of Ukraine. In response, we divested or closed down our
operations in Russia and Belarus. In response to Ukraine’s humanitarian
crisis, we have donated transport and logistics services, food and supplies,
and in some instances, our sta have opened their homes to take in
families fleeing the war.
Navigating market volatility and tough challenges is not new to DSV. Our
cost discipline, focus on keeping net working capital under control, strong
capital structure and scalable asset-light business model are all designed
with this purpose in mind.
A stronger company
We integrated GIL within a year – our fastest integration to date. To bring
together two large and complex organisations across multiple countries
and divisions is a considerable undertaking, and we are very happy with
the outcome. Lessons learnt from previous integrations, cultural synergies
between our two companies and the close collaboration all contributed
to a successful integration.
We are a dierent company today compared to only a few years ago.
Our journey of successful acquisitions and integrations has transformed
us into a top three player in our industry. We have added new highly
skilled colleagues to our teams, and by joining forces, we have a more
comprehensive service oering, greater scale and a stronger global net-
work. On top of this, we have worked to develop our digital production
platforms and create more transparent supply chains. That means we
are now even better placed to support growing customer needs.
Our organisation and market position are already strong, but M&A remains
an important part of our strategy, and we will continue to monitor the
market in search of value creation opportunities.
Committing to net-zero by 2050
In 2022, we raised our ambitions and took additional steps to create
a more sustainable business. On the environment, we recalculated our
2019 CO
2
emission baseline to reflect our larger size aer the GIL inte-
gration. We implemented an internal CO
2
fee to support new sustainability
initiatives and innovation with funding.
But most importantly, we committed to net-zero emissions across our
operations by 2050.
To achieve our sustainability ambitions, we also changed our organisation in 2022
and established a new Operational Sustainability Team headed by our COO. Its
purpose is to connect our operational teams directly to our sustainability tar-
gets. This will more concretely embed sustainability into our operations and
help us drive innovation and implement environmental and climate initiatives.
We are determined to reach our long- and mid-term targets, but we know
we are at the start of a long and complex net-zero journey. We cannot
get there alone; we must collaborate closely with our customers, suppliers
and other stakeholders across the industry. And ultimately, we depend on
continued technological development in our industry.
Success built by our people
I have always believed that DSV is a people business, and I will never grow
tired of celebrating our employees' hard work and contributions. They are
central to our current and long-term success.
Operating in the volatile and challenging environment of recent years has rein-
forced the importance of our people and their outstanding eorts in supporting
our customers – making our success during this period even more remarkable.
A huge thanks to all of them for their amazing work and team spirit.
Whatever market challenges persist in 2023 and beyond, we are optimistic
about the future and are committed to keeping supply chains flowing in
this world of change.
Jens Bjørn Andersen
Group CEO, DSV A/S
5 DSV Annual Report 2022 Introduction
Highlights
Group results
+.%
growth in
Gross profit
DKK , million
Air & Sea
% of total
Road
% of total
Solutions
% of total
+.%
growth in
EBIT before
special items
DKK , million
Air & Sea
% of total
Road
% of total
Solutions
% of total
EBIT before special items
EBIT before special items was up 48.0% for 2022, in
line with our latest outlook for the year. Growth com-
pared to 2021 was driven by strong performance
across all business areas and geographical regions and
by the addition of Agility Global Integrated Logistics
(GIL), which was fully integrated during the year.
.%
.%
Adjusted free cash flow
The earnings growth was converted to cash, and the
adjusted free cash flow was also impacted by improved
net working capital. In line with our capital allocation
policy, we allocated DKK 21,633 million to sharehold-
ers in 2022 through share buyback and dividend.
ROIC before tax
The increase in ROIC (pre-tax) was driven by the
strong earnings growth, while invested capital stayed
stable in 2022. Earnings and ROIC for 2022 were
boosted by the extraordinary market conditions. We
maintain our 2026 target of a minimum ROIC of 20%.
,
,
,
- ,
,
,
Actual
Actual
Actual
Actual
Actual
Actual
Outlook
Growth including M&A and in constant currencies.
6 DSV Annual Report 2022 Introduction
Solutions
Solutions achieved 35.3% growth in
gross profit and 47.4% growth in
EBIT in 2022. This was driven by the
inclusion of GIL, primarily in the
Middle East, and strong organic
growth across all regions.
EBIT before special items:
DKK 2,701 million
+.%
Road
The increase in EBIT before special
items was driven by 11.0% growth
in gross profit. In a market impact-
ed by new regulation, geopolitical
events and by significant cost in-
flation, all regions performed well
and contributed to the growth.
EBIT before special items:
DKK 2,040 million
+.%
Air & Sea
The division achieved 38.5% increase in gross profit and 53.0%
growth in EBIT for the year. This was driven by the successful
integration of GIL and by earnings growth across all regions. The
results were positively impacted by the extraordinary market
conditions, which led to higher gross profit per shipment, espe-
cially in the first half of the year. Towards the end of 2022,
freight markets declined, and the division increased its focus on
productivity and cost management.
EBIT before special items:
DKK 20,658 million
+.%
Global footprint
AMERICAS
Gross profit: DKK 13,274 million
%of total
EBIT before special items: DKK 7,111 million
%of total
EMEA
Gross profit: DKK 27,501 million
%of total
APAC
Gross profit: DKK 11,374 million
%of total
EBIT before special items: DKK 10,952 million
%of total
EBIT before special items: DKK 7,141 million
%of total
CO
emissions
As an asset-light company, we know
lowering our Scope 3 emissions re-
quires collaboration with our partners.
And to do so, we have developed
DSV Green Logistics.
Green Logistics provides a set of
solutions ranging from CO
2
reporting,
strategic supply chain optimisation,
emission compensation, and sustain-
able fuel oerings designed to reduce
the carbon footprint of our Scope 3
supply chain.
(' tonnes)
Scope 3:
,
Scope 1:
Scope 2:
7 DSV Annual Report 2022 Introduction
Five-year overview
Ratios 2022 2021 2020 2019 2018*
Financial ratios (%)
Gross margin 22.1 20.6 24.6 25.1 22.1
Operating margin 10.7 8.9 8.2 7.0 6.9
Conversion ratio 48.3 43.1 33.4 28.0 31.2
Eective tax rate 23.9 24.5 24.3 25.8 23.3
ROIC before tax 25.1 19.6 14.3 13.4 26.7
Return on equity 24.1 18.4 8.8 11.6 27.2
Solvency ratio 45.0 45.9 49.2 50.7 37.5
Gearing ratio 1.0 1.4 1.3 1.8 0.9
Share ratios
Earnings per share of DKK 1 77.3 49.3 18.7 18.7 22.0
Diluted adjusted earnings per share of DKK 1 81.4 50.9 26.5 22.1 22.1
Number of shares issued (‘000) 219,000 240,000 230,000 235,000 188,000
Share price at year-end (DKK) 1,096.5 1,527.5 1,020.0 767.8 429.2
Proposed dividend per share (DKK) 6.50 5.50 4.00 2.50 2.25
Financials 2022 2021 2020 2019 2018*
Results (DKKm)
Revenue 235,665 182,306 115,932 94,701 79,053
Gross profit 52,149 37,615 28,534 23,754 17,489
Operating profit before amortisation and
depreciation (EBITDA) before special items 30,275 20,417 13,559 10,292 6,212
Operating profit (EBIT) before special items 25,204 16,223 9,520 6,654 5,450
Special items, costs 1,117 478 2,164 800 -
Net financial expenses 866 841 1,729 858 249
Profit for the year 17,671 11,254 4,258 3,706 3,988
Adjusted earnings 18,765 11,847 6,146 4,456 4,093
Cash flow (DKKm)
Operating activities 26,846 12,202 10,276 6,879 4,301
Investing activities (966) 420 (556) 1,371 (444)
Free cash flow 25,880 12,622 9,720 8,250 3,857
Adjusted free cash flow 22,810 8,659 8,746 3,678 3,916
Share buyback 20,313 17,841 5,031 4,888 4,161
Dividends distributed 1,320 920 588 423 380
Cash flow for the year 1,635 3,942 2,721 766 (143)
Financial position (DKKm)
DSV A/S shareholders’ share of equity 71,519 74,103 47,385 49,430 14,561
Non-controlling interests 222 175 (88) (111) (29)
Balance sheet total 159,045 161,395 96,250 97,557 38,812
Net working capital 5,116 8,031 2,701 3,125 1,767
Net interest-bearing debt (NIBD) 29,870 29,245 18,189 18,355 5,831
Invested capital 99,540 101,231 64,285 68,595 20,381
Gross investment in property, plant and equipment 1,514 1,180 1,121 1,000 720
* The implementation of IFRS 16 Leases as of 1 January 2019 had a material impact on the financial statements and key
ratios for 2019 onwards. Comparative figures for 2018 have not been restated.
** Comparative figures have been restated, as our method for calculation and data transparency has improved.
For a definition of financial key figures and ratios, please refer to page 83.
For definition of ESG data, please refer to Sustainability Report.
ESG data 2022 2021 2020 2019 2018
CO
2
e (g/tonne-km) - Air transport 694.4 **707.4 704.0 718.2 728.0
CO
2
e (g/tonne-km) - Sea transport 6.6 **6.5 6.2 6.4 7.0
CO
2
e (g/tonne-km) - Road transport 97.5 **98.7 92.8 93.2 96.5
Lost Time Injury Frequency Rate 2.8 4.5 6.7 5.0 4.6
Lost workdays due to lost time injury 52.0 61.0 78.8 97.5 98.0
Gender diversity (%) (female/male) 39/61 38/62 38/62 39/61 38/62
Employee turnover ratio (adjusted for synergies) 22.1 21.9 20.5 21.1 20.1
Employees (FTE) 76,283 77,958 56,621 61,216 47,394
8 DSV Annual Report 2022 Introduction
People
Customers
Operational
excellence
Sustainable
growth
Our strategy is anchored in our corporate purpose of keeping supply
chains flowing in a world of change. The four focus areas for delivering
our strategy remain consistent: sustainable growth, our customers, our
people and operational excellence. With this focus we aim to create long-
term value for our stakeholders and make DSV fitter for the future.
Helping our customers grow sustainably
By combining a broad range of logistics service oerings, competitive
pricing and a strong geographic footprint, DSV continues to enhance
the customer experience we deliver. We are able to leverage our scale
and global reach, providing capacity and consistent service levels across
our network.
Across the three divisions, our end-to-end logistics services and digital
integrations enable customers to achieve visibility and control of supply
chains, which is essential when operating in today’s complex market
conditions.
Throughout our operations, we seek to support customers' growth while
remaining mindful of the environmental impact of our services and provid-
ing options for reduction of emissions through our Green Logistics services.
Following the successful integration of Agility's Global Integrated Logistics
business (GIL), we have in 2022 reinforced our focus on initiatives to support
organic growth. We have also raised our ambitions for sustainability and
reconfirmed our M&A strategy.
Our strategy: Growth.
Eciency. Sustainability.
In 2022, we completed the integration of more than 35,000 customers
from GIL, adding to our foothold among both the large, global customers
as well as small and mid-sized customers. Our industry-specific solutions
in automotive, industrial, chemicals, retail and fashion, healthcare, tech-
nology and energy help customers in those sectors succeed, and we will
continue to strengthen our expertise, not least in the fast-growing
healthcare and e-commerce sectors.
We proactively manage customer relations through our Global Customer
Success Programme. In 2022, we received feedback from more than
13,000 customers, and in line with our internal targets, we responded
to the evaluations within 48 hours.
Our organic growth target remains unchanged: we aim to take market
share across our three divisions and the markets we operate in.
Supporting our people to develop their talent
Our employees are the heart of our business and responsible for the long-
term success of our company. DSV employs more than 75,000 people
worldwide – from oce workers to warehouse operatives. Regardless
of function or position, we respect our employees' rights.
Keeping supply chains flowing
in a world of change
For nearly five decades, we have moved millions of ship-
ments across oceans and continents. Knowing how to do
that in the most streamlined way is how we have earned
the trust of our customers and partners. And it is how we
will continue to deliver global transport and logistic services
that can help businesses and societies prosper.
Our purpose:
Focus areas in our strategy
9 DSV Annual Report 2022 Strategy and financial targets
We work to create a safe, healthy and nurturing workplace where every-
one has the chance to grow and develop their talent.
To enable our employees to do their best, we give them the right digital
tools, training and conditions. In recent years, the pandemic showed the
im portance of the skills and knowledge of our experienced teams, and
the continued development of our industry will increase the need for
further skills.
As for any company, hiring and keeping talented employees is critical for
us. To attract, motivate and retain the best of them, we provide career-
a dvancing opportunities through our DSV Academy and our talent
management programme.
DSV operates globally and employs +150 dierent nationalities. In com-
bination with an inclusive and responsive culture, diversity – also related
to gender and other factors – makes our workplaces more dynamic and
ultimately leads to better business decisions. In 2022, we continued our
focus on diversity and inclusion across our organisation, supported by
mandatory e-learning programmes.
Operational excellence, every day
Local empowerment and global scale
We maintain a flat, locally empowered organisation, firmly anchored in local
markets. This has always been a core strength in DSV, and we continue to
believe in local ownership and decisions based on sound business acumen,
supported by solid data.
As a global company, we aim to benefit from our scale where we can. We
work together as one global network, and we have centralised selected
activities – e.g. in our International Shared Service Centres and group
functions such as our Global Commercial Organisation, Group Property,
Group Insurance and Group Procurement.
Transparency, productivity and scalability
Through our focus on transparency, productivity and scalability, we support
more ecient global trade flows for our customers. And more ecient
workflows for DSV.
We support transparency by measuring productivity and financial perfor-
mance, ensuring that our managers have good insights to inform their
decision making. High data quality across systems, activity-based costing
and a strong financial organisation are key elements in this.
We boost productivity by defining and standardising our service catalogues
across geographies and divisions. Standardised service catalogues enable
digitalisation, automation and ecient workflows across the organisation. By
streamlining our services across the organisation, we can deliver a high and
consistent service level – this is exactly what our customers are looking for.
To support our growth strategy, our physical and digital infrastructure must
be able to scale. Working according to the principle of one main system per
business area, we run a consolidated, standardised and scalable IT platform
and, where available, we use standard o-the-shelf IT systems with high
focus on data quality and security.
Developing our infrastructure
Based on our knowledge of the logistics markets, technological trends and
our ongoing dialogue with customers, we plan development of our IT infra-
structure as well as the long-term planning of warehouses (and warehouse
automation), terminals and oces.
We prepare strategic roadmaps for each business area, closely managed
and prioritised by our Group Executive Committee. All planning of our infra-
structure and innovation is based on enterprise solutions which can be
applied across our network.
Continued focus on M&A
DSV has had a remarkable journey in recent years. The acquisitions and
successful integrations of UTi Worldwide, Panalpina Welttransport and
Agility's Global Integrated Logistics business have transformed us into a top
three global player in our industry. Our worldwide organisation is now big-
ger than ever; our geographical footprint is more diverse; and the services
we oer to our customers are more advanced.
We continue to focus on balancing stable, above-market organic growth
with an active acquisition strategy. Measured by revenue and profit mar-
gins, we are one of the industry’s largest and most profitable players. This
gives us a strong market position and forms the foundation of our ambition
to continuously grow our business.
Within the fragmented transport and logistics industry, we believe there is
room for further consolidation, and we will continue to monitor the market
for relevant, value-creating opportunities.
Fitter for the future
Our ambitions for the coming years revolve around three themes: growth,
eciency and sustainability. At a practical level, that means continuing our
focus on M&A, strengthening our market position through organic growth,
enhancing our logistics and digital capabilities, continuing our work on the
sustainability agenda and exploring new opportunities in response to
changing market dynamics.
As we engage in all of these activities, our mindset will always be to try to
do more with less, accelerating our operational excellence initiatives and
digital transformation to constantly find more ecient solutions to support
our customers.
Key strategic projects for each of our divisions are described in the divisional
reviews on pages 24-30.
10 DSV Annual Report 2022 Strategy and financial targets
Sustainability strategy anchored at the top
Our sustainability strategy and eorts are driven from the highest manage-
ment levels in our company. In close collaboration with the Executive Board,
the Board of Directors sets the direction, reviews the performance and
further develops our Sustainability targets and strategy.
We are guided by our commitment to promote and fulfil the United Nations’
Sustainable Development Goals (SDGs). Our strategy and targets are based
on our analysis of materiality, risks and opportunities and our dialogue with
our major stakeholders.
Our sustainability strategy is centred around our sustainability priorities with-
in environment, social and governance. These priorities and our associated
material topics are highlighted in the adjacent figure.
DSV’s approach to sustainability has evolved
systematically over recent years. As the world’s
third-largest transport and logistics provider,
we take an active role in the sustainability agenda
in our industry, and today, this is fully integrated in
our corporate strategy and business operations.
Sustainable
logistics for a fast-
changing world
Our sustainability
priorities
Environment
Reducing our impact.
We recognise the urgent need
to protect the planet.
We play our part by reducing
our environmental impact.
And we want to lead our industry
in tackling climate change and
decarbonising transport and
logistics.
Governance
Doing business with integrity. We do business
compliantly and honestly and pay taxes where we
generate our profits. We handle data ethically with
the right safeguards around data privacy.
Running a responsible supply chain. We make sure
all suppliers match our standards, environmental and
social criteria, and understand our sustainability goals.
Social
Caring for our employees. We strive to be a safe and inclusive
place to work. We work hard to attract and keep talent by giving em-
ployees responsibility and growth opportunities. We want to promote
diver sity, protect rights and improve our employees well-being.
Engaging with communities. We work with local
communities across the globe. We respond to local needs,
challenges and emergencies everywhere we do business.
• Diversity and inclusion
• Human capital development
• Health and safety
• Labour rights &
working conditions
• Human rights
• Community
engagement
• Climate change
• Waste management
and recycling
• Business integrity
• Responsible
supply chain
• Tax transparency
• Data ethics and
cybersecurity
11 DSV Annual Report 2022 Strategy and financial targets
Raising our environmental ambitions
We – and the whole industry – need to do more to protect the environ-
ment. To hold ourselves accountable to that goal, we have now commit-
ted to reaching net-zero carbon emissions across our operations by
2050. To make sure this follows a common, robust and science-based
definition, we follow the recognized SBTi Net-Zero Standard.
We continue to work towards our 2030 emission reduction targets, and
this year, we increased our target ambition for the 1.5°C global warming
scenario for scope 1 and 2, in line with the latest climate science. We also
recalculated our 2019 CO
2
emission baseline for all scopes, to reflect our
larger business size aer the integration of Agility's Global Integrated
Logistics business (GIL).
Our biggest challenge to reach net-zero is technological; in our industry today
there are still no carbon neutral solutions available at scale. Another challenge
is that the majority of emissions in our supply chain are not in our full control.
As an asset-light freight forwarder we do not own or control the trans-
port equipment and we have limited direct influence on investments in
new technologies. Still, we take responsibility for our scope 3 emissions
and engage with our customers, suppliers and other partners in finding
new and more sustainable transport solutions to be able to optimise sup-
ply chains and oer our customers lower-emission transport alternatives.
Our approach to managing the risk and opportunities from climate change
is an embedded part of our risk management framework, as described on
page 36.
Driving innovation in logistics
Delivering our targets will require a huge eort across our industry. We
have strengthened our governance and initiated various organisational
changes in DSV to anchor our ESG strategies in our business operations
and help drive innovation and implementation of our environmental and
climate initiatives. Solar panels on rooops, partnerships with suppliers on
sustainable fuel and pilots with electric trucks are examples of the inno-
vation initiatives we worked on in 2022 to investigate the possibilities
within these technologies.
In 2023, we are introducing an internal carbon fee – the fee will be levied
on our activities, based on their CO
2
emissions. The funds generated will
be invested back into our innovation initiatives.
At the end of 2021, we implemented our Green Logistics services to
help customers reduce emissions from their supply chains. We continue
to promote and develop these services, and we expect growing demand
in the coming years, as many of our customers have set their own, ambitious
climate targets.
Partnerships and stakeholder engagement
No one, DSV included, can tackle planet-wide environmental challenges
alone. Collaboration and partnerships are key to finding and implementing
eective and long-lasting solutions to our most pressing sustainability
challenges.
We engage regularly with employees, customers, suppliers and investors
on our sustainability strategy – and use their input and ideas to enhance
our plans. During 2022 we evaluated more options for expanding existing
partnerships and working with innovative new companies. These are part-
nerships that can help us develop more sustainable energy sources, scale
sustainable fuel technologies and run alternative trucking technology pilots.
Integrity and transparency
As one of the world’s largest freight forwarding companies, our global
network spans geographical and cultural borders across the globe, engag-
ing with customers, suppliers, business partners and public authorities in
more than 80 dierent countries.
We are committed to conducting our activities with integrity and engag-
ing with our stakeholders in an open and transparent manner. We strive to
ensure that we apply and maintain uniform high ethical standards across
our global organisation as defined by our Code of Conduct. To safeguard
this focus, we run global awareness campaigns and recurring training
programmes for all employees.
As a freight forwarder we are aware of our position in the global logistics
value chain in which our services are, to a large degree, performed by
third-party suppliers. How our suppliers act reflects back on us as a com-
pany and on our industry as a whole. Our Supplier Code of Conduct out-
lines our ethical business standards, which we require our suppliers to
follow. And our new centralised third-party risk management vetting
platform and ongoing annual supplier audits are other measures to safe-
guard compliance with our standards.
Our social responsibility
Freight forwarding is a people business, and ensuring that our employees
thrive in an inspiring working environment is a central part of our HR
strategy. We believe that a diverse and inclusive working environment
consisting of people from across dierent nationalities, cultures, genders
and ages generates better work dynamics and provides a stronger basis
for engaging with our customer base.
Being mindful of employee safety is also high on our agenda which we
manage through several health and safety initiatives as well as addressing
labour and human rights.
We apply this mindset everywhere we operate globally, and when we
integrate companies – like GIL in 2021/22 – we make sure this culture
and these standards are implemented across the organisation. In 2022,
we performed our first global people survey – this has provided us with
valuable information to further enhance these values and culture, making
DSV an even more attractive place to work.
Across the globe, we continue to engage in and support the communities
we are part of. In 2022, the war in Ukraine only confirmed how quickly
things can change and how important it is that we are ready to respond as
a company with both financial and logistics support.
12 DSV Annual Report 2022 Strategy and financial targets
Our business model
End-to-end logistics
Through our global network, we provide a wide range of end-to-
end supply chain solutions. We track our environmental impact
systematically with a view to making our operations as carbon,
energy and resource ecient as possible. The majority of our CO
2
emissions come from subcontracted transport (scope 3).
Subcontracted
transport
Scope 1 + 2 + 3
Warehousing — Picking/packing — Cross-dock terminal — Deconsolidation
Labelling, configuration, testing — Distribution — Documentation & customs clearance
E-commerce fulfilment — Carbon emission reports — Supply chain optimisation — 4PL
Shipment booking — Pick-up — Warehouse — Documentation & customs clearance
Cargo consolidation — Purchase order management
Cross-dock terminal — Insurance
Scope 1 + 2 + 3
Scope 3
From
shipper
To
consignee
Freight forwarding services
Logistics and distribution
We ship freight by land, sea and air – and provide
contract logistics too. Our business model is flexible
and asset light, which helps us to keep supply chains
flowing eciently, from shipper to consignee.
A light model for the right reasons
Our business model allows us to quickly scale activities to match changes in market
demand or modes of transport. It also helps us choose the best partners for any ser-
vice, based on reliability, available capacity, sustainability factors, transit time and price.
Although we are a global business, we are always close to local markets. Working
with container carriers, airlines, road hauliers and railway operators, we move goods
to wherever they are needed. And being one of the largest buyers globally means we
– and our customers – benefit from keen pricing and strong, long-standing relation-
ships with carriers.
We oer a unique combination of a highly skilled workforce with extensive industry
know-how, advanced IT systems, modern warehouses and terminals, strong carrier
relationships and a global network across more than 80 countries.
Adding value to complex supply chains
As well as transport, our customers buy a full range of freight forwarding, logistics
and distribution services from us. And we constantly develop new services to keep
ahead of what customers need.
Our workflows are highly digitalised, and our systems tightly integrated with cus-
tomers and suppliers. To cut the environmental impact of our business, we work
closely with customers and suppliers to track and minimise emissions across our
entire supply chain – from shipper to final destination.
CO
2
CO
2
CO
2
Green
logistics
services
CO
2
reporting — Green
supply chain design &
optimisation — Sustainable
fuel oerings — Carbon
osetting
13 DSV Annual Report 2022 Strategy and financial targets
5%
5%
4%
3%
3%
20%60%
A fragmented competitive landscape
We are one of the top three global freight forwarders, with a market
share of roughly 4%. Together, the top 20 forwarders have an estimated
global market share of 30-40%. The rest of the market consists of a long
tail of smaller regional and local freight forwarders.
The mix of industry fragmentation and service standardisation creates a
competitive pricing landscape. But because of our scale, global network,
strong IT systems and logistics competences, big freight forwarders like
DSV are in a good position to consolidate the market and gain market
share. Our acquisition track record is a strong ex ample of this, and we
expect the consolidation trend to prevail in the coming years.
New competition emerging
In recent years, new competitors have entered the industry. One category
is the digital forwarders, who typically oer a simple, standardised range
of services, mainly focused on online price quoting and booking. Digital
forwarders have a high level of digital capabilities but a lower level of
logistics capabilities, such as operational expertise, global networks,
scale, warehouses and carrier relationships.
Furthermore, a few of the large ocean carriers now aim to provide door-
to-door transport services, air and overland transport in addition to ocean
transport.
Our industry and
market trends
By understanding market trends in our own industry – and in others that aect us
– we can take advantage of opportunities and act quickly to reduce risks.
This has created scenarios where these carriers are both suppliers and
competitors to freight forwarders.
So far, the new players have not gained material market shares. Based on our
strong logistics capabilities and our clear roadmap to further enhance our
digital capabilities, we are confident that DSV will remain highly competitive.
GDP sets the pace for market growth
In recent years, global trade growth has been on level with GDP growth,
and we believe this correlation will continue in the long term – with
dierent growth rates between regions.
As a result of the slowdown in the global economy and a post-COVID shi
in consumer spending away from goods and towards services, global
trade volumes have contracted during 2022 and have developed worse
than the general economy. This development will also impact our markets
going into 2023. Our asset-light model enables us to quickly adjust our
capacity to such changes in demand.
Our industry has changed dramatically in recent years. New trends and
market dynamics are aecting transport and logistics globally and locally.
We must understand these dynamics so we can act quickly to capitalise
on opportunities and mitigate threats.
In the following chart we have listed important ongoing trends aecting DSV.
Market share
Top five global freight forwarders and
market share based on 2021 revenue.
Source: Armstrong & Associates and DSV estimates.
■ Kuehne + Nagel
■ DHL Logistics
■ DSV+GIL
Top five Others
■ DB Schenker
■ C.H. Robinson
■ Top 6-20
■ Others, estimated
14 DSV Annual Report 2022 Strategy and financial targets
Trends Their impact Our response
A need for reliable global supply chains
Even before the COVID-19 pandemic, companies sought
more reliable and transparent supply chains.
That need has only grown, and companies are contingency
planning and adjusting their setup to protect against
future risks.
Many companies are diversifying outsourced production between China and other East
Asian countries. With dual sourcing and with more countries involved, dependencies are
reduced, but complexity goes up.
Companies are also considering reshoring of production. It is happening for certain products,
but so far with limited impact on global trade.
For some companies, storing extra buer inventory closer to the end market can be another
way to make supply chains more robust.
We help our customers optimise their supply chains – suggesting eciency improvements to increase reliability,
cut costs or reduce the environmental impact.
By providing supply chain visibility through our digital services, we can support planning and monitoring all the
way from purchase order to final delivery.
Dual sourcing and more complex supply chains may increase the demand for our services – e.g., purchase order
management, cargo consolidation, customs clearance and warehousing.
Geopolitical instability and protectionism
Geopolitical instability causes tension and unrest. Global
trade flows and economies are impacted by factors
like protectionism, trade wars and political and military
conflicts.
Across the globe, we continue to see new examples of conflicts, protectionism, changes
to taris and embargoes.
In 2022, the war in Ukraine had both direct and indirect impact on the supply chains
of many companies and on transport markets due to the closure of Russian air space
and Ukrainian truck drivers leaving the European market.
In recent years, the UK Brexit and the “trade war” between China and the US have also
had a significant impact on supply chains and our operations.
When such changes occur, we and our customers must react quickly to keep supply chains flowing – and to
avoid violating any regulation. We oer a strong operational and compliance setup to help customers prepare
for and adapt to market changes.
Ultimately, we expect the benefits of global supply chains to win out over protectionism, and we believe
globalisation is here to stay. There will be examples of more local production, and with our flexible business
model we can adapt to such changes in trade flows.
Greener supply chains
The demand for greener supply chain solutions is growing
– driven by increasing environmental regulations and
consumer pressure.
The transport and logistics industry is a major contributor to carbon emissions, and the
sector as a whole must make a bigger eort to develop more environmentally sustainable
business practices and reduce emissions from its activities.
Having a clear sustainability strategy and service oering is increasingly becoming a
“license to operate” for transport and logistics companies.
In 2022, we continued our eorts to support greener supply chains for our customers through our
Green Logistics oerings.
This market is still at an early stage, and we expect that the demand for these services will increase in
the coming years. We continue to develop our services, and in 2022, we changed our organisation and
created new operational and commercial sustainability teams to support this.
The rise of e-commerce
Consumer behaviour is becoming increasingly digital,
sending fulfilment centre and last-mile delivery activities
skyward.
COVID-19 lockdowns accelerated the shi in consumers’ buying behaviour towards
more online shopping.
During 2022, e-commerce slowed a little, in line with the economic slowdown. But we
still expect high structural growth in this area in the coming years, both for local and
cross-border transactions.
We continue to see growth potential for DSV in the e-commerce market, and we are continuously devel-
oping our services. This includes the roll-out of our automated e-fulfilment factories and customised
solutions for large customers.
Digitalisation and automation
Technology has transformed our industry over the past
decades. This development will continue and will impact
the way we operate and interact with customers and
other stakeholders.
Across supply chains, the demand for visibility and productivity – oen in tight labour
markets – drives technological development.
Customer and vendor interactions are gradually changing from manual and classic EDI based
to more modern API connections. And to drive productivity and support the fast-growing
e-commerce segment, warehouses are increasingly being fitted with automated storage
& retrieval systems.
We aim to combine our strong logistics competences with advanced digital solutions. We work with
strategic roadmaps to develop our digital and physical infrastructure, and we implement scalable tech-
nology across our organisation.
Read more about our approach to technology in the following chapter.
15 DSV Annual Report 2022 Strategy and financial targets
Our business operations rely on strong systems and technology. Last year,
our scalable, digital platforms handled almost 270 million jobs, shipments and
order lines. This platform not only supports ecient workflows; it also ensures
a fast and smooth integration of M&As and supports our growth strategy.
Hybrid computing and AI
To fulfil our strategy and react quickly to our dynamic markets, we have a
strong, scalable IT infrastructure. We take a hybrid computing approach
blending on-premises and cloud-based infrastructure across operational
systems, customer integrations and engagement services.
On top of our Advanced Integration Platform that we implemented in
2021, we are now applying artificial intelligence (AI) to improve our oper-
ational eciency in various ways. In 2022, we implemented systems for
improving data quality of vendor data and for automated scanning of cus-
toms declaration forms. Our modular approach to developing AI solutions
allows us to quickly reuse models and data across the business to roll out
even more solutions and respond to customer needs in a quick fashion.
Delivering supply chain visibility
Digitalisation is changing the way we interact with customers and vendors
through every phase of a shipment. From quote, purchase order, booking,
shipment tracking and status alerts to final billing and KPI reports. Our
digital tools provide supply chain visibility to DSV customers – and make
it easy to do business with us.
Our digital freight forwarding platform, myDSV, is part of our critical IT
infrastructure, not only managing bookings but also tracking, claims and
reporting. In 2022, bookings on myDSV were up by more than 30%.
A responsive approach
At DSV, we continuously monitor the latest trends and adopt new
technologies that benefit our business and our customers.
Besides myDSV, we provide direct customer integrations for large
customers. Increasingly, we are seeing EDI connections replaced by
more advanced API integrations.
Automated, ecient warehousing
Automating and optimising warehouse processes improve customers’
experiences and enable us to utilise warehouse space more eciently.
The structural growth in e-commerce transactions means that the
demand for ecient warehouse solutions is growing too.
The journey towards more automated warehouses continued in 2022. Our
automated goods-to-person storage and retrieval program, DSV Fulfilment
Factory, was launched in 2021, and during 2022, it has been rolled out to
even more sites and customers. In addition, we are increasing the adoption
of a wider range of warehouse automation technologies, including auto-
mated guided vehicles and airborne autonomous drones for cycle count.
Digital cargo twins
In more and more warehouses and terminals, we now scan the size and
weight of every incoming parcel and distribute this data across our IT systems
as a ”digital cargo twin”. This gives us a precise view of the utilisation and
performance of our warehouses and other assets, allowing us to optimise
performance. In addition, the scanning of parcels ensures that customers are
invoiced accurately based on the actual size and weight of their shipments.
Staying abreast of the latest trends
Our DSV Innovation Hub drives our global innovation eorts, monitoring
trends and technologies and prioritising which to explore. Working with
internal and external stakeholders, this team tests ideas, establishes fi-
nancial business cases and implements projects across our global network.
DSV technology
trend radar
Power-
to-X
Adopting
Testing
Tracking/
Assessing
Computer
Vision
Micro
mobility
Quantum
computing
Smart
Robots
Autonomous
vehicles
Electrical
trucks
Wearables
Autonomous
drones for delivery
Artificial
intelligence
Digital
cargo
twins
Hybrid
computing
platform
Warehouse
Automation
16 DSV Annual Report 2022 Strategy and financial targets
We have based our guidance on the assumption of declines in
air and sea freight volumes of 2-5% for the full year 2023. As
transport markets continue to normalise, we expect that our
gross profit yields in Air & Sea will decline compared to the
average level in 2022.
For Road and Solutions, we expect that markets will be flat or
decline by low single digits in 2023. Across all divisions our
aim of taking market share remains intact.
We will monitor activity closely across our organisation and
adjust our capacity and cost base accordingly.
The outlook for 2023 assumes that the currency exchange
rates, especially the US dollar against DKK, will remain at the
current level.
The geopolitical and macroeconomic environment remains
uncertain, and unforeseen changes may therefore impact
our financial results.
Assumptions for 2023 financial outlook
Aer an extraordinary 2022, we expect a decline in our earn-
ings and margins for 2023 as freight markets find a new nor-
mal level aer the pandemic.
The World Bank projects global GDP growth in the level of 2-3%
in 2023 – with lowest growth rates in the advanced economies.
Normally, we expect transport volumes to grow in line with
the economy, but in the second half of 2022, we saw volumes
declining more than GDP due to reduction of inventory levels
and normalisation of consumer behaviour aer COVID-19.
We expect this negative development in freight volumes to
continue in the first part of 2023, but we expect a recovery
in the second half of the year.
Outlook for and
financial targets
2026 financial targets
While we expect decline in conversion ratio and ROIC in 2023
compared to the extraordinary levels in 2022 – mainly for
Air & Sea – our 2026 targets are unchanged.
The targets are based on the assumption of stable global eco-
nomic development during the period 2024-26, with average
annual global GDP growth of at least 3% and transport market
growth in line with GDP.
All the way towards 2026 we will continue our focus on achiev-
ing organic growth ahead of the market, and we see opportuni-
ties to improve productivity across the Group. Our IT systems,
infrastructure and back-oce functions are scalable, providing
opportunities to leverage operations in all three divisions.
The targets are based on organic growth and do not include
the potential impact from large acquisitions in the period.
The strategic objectives of the Group are translated into
the following targets:
Outlook
(DKKm)
2022
actual
Outlook
2023
Operating profit (EBIT)
before special items 25,204
16,000-
18,000
Eective tax rate 23.9% 24.0%
For 2023, we expect EBIT before special items of DKK 16,000-18,000
million. We maintain our 2026 financial targets and aim for a 45%
conversion ratio for the Group.
2026 targets (%)
2022
actual
2026
targets
DSV Group
Conversion ratio 48.3 >45.0
ROIC (before tax) 25.1 >20.0
Divisional targets for
conversion ratio
Air & Sea 59.7 >50.0
Road 25.8 >30.0
Solutions 29.0 >30.0
Forward-looking
statements
This Annual Report in-
cludes forward-looking
statements on various
matters, such as expect-
ed earnings and future
strategies and expansion
plans. Such statements
are uncertain and involve
various risks, because
many factors, some of
which are beyond our
control, may result in
actual developments
diering considerably
from the expectations
set out in the 2022
Annual Report. Such
factors include, but are
not limited to, general
economic and business
conditions, exchange
rate and interest rate
fluctuations, the demand
for our services, compe-
tition in the transport
sector, operational prob-
lems in one or more of
DSV’s sub sidiaries and
uncertainty in connec-
tion with the acquisition
and divestment of
enterprises.
17 DSV Annual Report 2022 Strategy and financial targets
As a Group, we have a track record of successful company inte-
grations – the most recent chapter in this story being the acquisi-
tion of Agility's Global Integrated Logistics business (GIL) in 2021.
We have been able to create increasing return on invested capital
(ROIC) over time. However, large acquisitions have initially
diluted ROIC before tax.
Capital structure
Group Management continuously monitors whether the capital
structure is in line with the targets, and excess capital is distribut-
ed to shareholders through share buybacks and dividends.
Adjustments to the capital structure are usually announced in
connection with the release of quarterly financial reports and
are made primarily through share buybacks.
Dividend policy
DSV aims to ensure an annual dividend pay-out ratio of approx-
imately 10-15% of our net profit.
Proposed dividend for 2022 amounts to DKK 6.50 per share
(2021: 5.50 per share). The proposed dividend for 2022 is
equivalent to 8.1% of net profit. The lower dividend payout-
ratio for 2022 reflects the extraordinary result for 2022 and
expected normalisation of earnings in 2023.
Capital structure
The aim of DSV’s target capital structure is to ensure:
• sucient financial flexibility to meet our strategic objec-
tives; and
• a robust financial structure to maximise the return for our
shareholders.
Our target financial gearing ratio is below 2.0 x EBITDA before
special items. The ratio may exceed this level following signi-
ficant acquisitions.
Capital allocation policy
Our free cash flow allocation prioritisation remains unchanged:
1. We pay net interest-bearing debt in periods when the
financial gearing ratio is above target range.
2. We make value-adding investments in the form of acqui-
sitions or development of the existing business.
3. Our distribution to the shareholders takes place through
share buybacks and dividends.
Value-adding investments
DSV pursues an active acquisition strategy. Our acquisitions
have created substantial value for shareholders over the years
and have also contributed to consolidating an otherwise frag-
mented industry.
Capital structure
and allo cation
ROIC before tax (%)
120,000
100,000
80,000
60,000
40,000
20,000
0
20222018 2019 2020 2021
ROIC before tax incl. goodwill and customer relationships ■
Goodwill and customer relationships ■
Invested capital excl. goodwill and customer relationships ■
30
25
20
15
10
5
0
Distribution of capital (DKKm)
Dividends ■
Share buyback ■
25,000
20,000
15,000
10,000
5,000
0
20222018
,
Total
,
2019
,
Total
,
2020
,
Total
,
2021
,
Total
,
,
Total
,
,
18 DSV Annual Report 2022 Strategy and financial targets
Michael Ebbe
CFO
Financial review
Income statement (DKKm) 2022 2021 Growth*
Revenue 235,665 182,306 24.3%
Direct costs 183,516 144,691
Gross profit 52,149 37,615 33.3%
Gross margin 22.1% 20.6%
Other external expenses 5,559 4,173
Sta costs 16,315 13,025
Operating profit before amortisation and
depreciation (EBITDA) before special items
30,275 20,417
Amortisation and depreciation 5,071 4,194
Operating profit (EBIT) before special items 25,204 16,223 48.0%
Conversion ratio 48.3% 43.1%
Special items, costs 1,117 478
Net financial expenses 866 841
Profit before tax 23,221 14,904
Tax on profit for the year 5,550 3,650
Profit for the year 17,671 11,254
The Group delivered strong results for 2022, achieving 33% growth in
gross profit. EBIT before special items was DKK 25,204 million – up 48%
and in line with the expected level of DKK 24,500-25,500 million.
Strong performance in an extraordinary year
2022 was an eventful year with volatile freight markets,
heightened geopolitical unrest, historically high inflation rates
and a macroeconomic slowdown. The market for air and sea
shied from congestion, lack of capacity and record-high
freight rates in the first half of the year to declining volumes
and rapidly falling rates in the second half. The markets for
road and contract logistics were less volatile – but certainly
also impacted by the changes in the world around us.
For DSV, it was also an integration year. We completed the
integration of Agility's Global Integrated Logistics business
(GIL) less than one year aer the closing of the transaction
– a new record for us.
Across all business areas, we achieved growth in earnings in
2022 – with the strongest performance in Air & Sea and Solu-
tions. In the extraordinary market conditions, we delivered 48%
growth in EBIT before special items. And very importantly, we
converted the earnings to cash. Adjusted free cash flow was up
by 163.4% compared to 2021, and in line with our capital allo-
cation policy, we allocated DKK 21,633 million to shareholders
through share buyback and dividend.
Earnings per share (diluted and adjusted) was up 59.9% in 2022,
* Growth including M&A and in constant currencies.
100
80
60
40
20
0
60,000
50,000
40,000
30,000
20,000
10,000
0
(DKKm)
(DKKm)
(DKK)
%
%
50
40
30
20
10
0
28,000
24,000
20,000
16,000
12,000
8,000
4,000
0
2021
2021
2021
2020
2020
2020
2019
2019
2019
2018
2018
2018
2022
2022
2022
20
16
12
8
4
0
Operating margin
EBIT
driven primarily by growth in earnings and to a less degree a reduction
in the number of issued shares.
The performance of each of our divisions is further described in the
reviews on pages 24-30.
Integration of Agility's Global Integrated Logistics business
The acquisition of GIL was closed in August 2021, at which date we
included GIL in our consolidated financial statements. Consequently,
the business combination was only partly included in the comparable
P&L figures for 2021.
We finalised the integration during Q3 2022, and in line with previous
announcements, we estimate that GIL will contribute at least DKK 3 billion
annually to combined EBIT before special items. The integration triggered
costs of DKK 1.1 billion in 2022, which are recognised in the income
statement under special items.
Ukraine and Russia
As previously announced, we have divested or closed down all DSV sub-
sidiaries in Russia and Belarus. We made this decision shortly aer Russia’s
invasion of Ukraine, and the exit had no material impact on the financial
results of the Group. We also make sure that we comply with international
sanctions against Russia and Belarus at all times, and we have stopped
organising transports to, from and through the two countries, except for
pharmaceutical shipments and humanitarian aid.
Our Ukrainian operations were temporarily suspended when the invasion
started in February 2022. During the year, we have resumed activities in
the country to the extent possible.
Results
Revenue
Revenue was up 24.3% in 2022. The Air & Sea division grew revenue by
26.1%, driven by the inclusion of GIL and higher freight rates in the first
half of the year. In the second half of 2022, the economic slowdown
resulted in lower demand for freight services.
In combination with less congestion this led to falling freight rates and
lower revenue for the division.
(DKKm) 2022 2021 Growth*
Air & Sea 174,431 131,901 26.1%
Road 41,507 35,416 16.4%
Solutions 24,409 18,734 26.2%
Non-allocated items and
eliminations (4,682) (3,745) n.a.
Total revenue 235,665 182,306 24.3%
* Growth including M&A and in constant currencies.
The Road and Solutions divisions also achieved strong revenue growth for
the year. This was driven by higher average rates/fuel prices and higher ac-
tivity (market share gains). GIL business contributed to the growth in both
divisions, especially in Solutions, due to its strong footprint in the Middle
East and APAC. The economic slowdown also aected Road and Solutions
in the second half of 2022; however, less than the Air & Sea division.
Gross profit
Gross profit was up 33.3% in 2022. Growth in Air & Sea was mainly driven
by the addition of GIL and higher gross profit yields due to the extra-
ordinary market conditions with port congestion, high freight rates and
general cost inflation. In the second half of the year, the division was
aected by a gradual drop in yields as congestion started to ease.
(DKKm) 2022 2021 Growth*
Air & Sea 34,624 23,769 38.5%
Road 7,911 7,095 11.0%
Solutions 9,318 6,653 35.3%
Non-allocated items and
eliminations 296 98 n.a.
Total gross profit 52,149 37,615 33.3%
* Growth including M&A and in constant currencies.
Gross profit (DKKm)
EBIT before special items (DKKm)
Diluted adjusted earnings per share of DKK 1
Conversion ratio
Gross profit
20 DSV Annual Report 2022 Financial and non-financial performance
Gross profit growth in Road and Solutions was driven by the addition of
GIL business and higher activity levels. Solutions in particular achieved
high growth as we added new warehouse capacity.
Gross margin for the Group was 22.1%, compared to 20.6% last year.
This increase was driven by the Air & Sea division with high gross profit
yields and a change in its product mix. The Solutions division also achieved
a higher gross margin, due to increased warehouse utilisation and more
ecient workflows.
All regions achieved growth in gross profit in 2022, strongest in APAC and
Americas. Furthermore, the Middle East was significantly strengthened by
the addition of GIL’s network in this region.
EBIT before special items
For the Group, EBIT before special items increased by 48.0%. This was
driven by gross profit growth across all divisions and geographical regions
and by the addition of GIL.
(DKKm) 2022 2021 Growth*
Air & Sea 20,658 12,768 53.0%
Road 2,040 1,857 9.2%
Solutions 2,701 1,775 47.4%
Non-allocated items and
eliminations (195) (177) n.a.
Total EBIT before special items 25,204 16,223 48.0%
* Growth including M&A and in constant currencies.
The 2022 conversion ratio was 48.3%, compared to 43.1% last year. Our
Air & Sea and Solutions divisions improved their ratios and Road was on
par with 2021, even though inflation put high pressure on the cost base
in the second half of the year. In extraordinary market circumstances –
and while managing the GIL integration – our teams continued to opti-
mise workflows and systems and leverage our network. As logistics mar-
kets gradually normalise, we expect a lower conversion ratio in 2023.
Total sta costs (excluding hourly workers) were DKK 16,315 million in
2022 (2021: DKK 13,025 million). The cost rise was from the inclusion
of GIL as well as organic increases in activity, cost inflation and the impact
of exchange rate fluctuations.
Other external expenses totalled DKK 5,559 million in 2022 (2021: DKK
4,173 million). They were aected by the same factors as sta costs.
Depreciations totalled DKK 5,071 million in 2022 (2021: DKK 4,194
million). This rise was due to the inclusion of GIL and the addition of
several warehouses in our Solutions division.
Special items totalled DKK 1,117 million in 2022 (2021: DKK 478 mil-
lion), relating to the now finalised GIL integration. The total GIL integration
cost came to DKK 1.6 billion.
Net financial expenses totalled DKK 866 million in 2022 (2021: DKK 841
million). The increase was partly due to the inclusion of GIL and an increase in
our leasing debt compared to 2021 due to our warehouse expansions in 2022.
Gain on currency translation was DKK 276 million in 2022, compared to a
DKK 53 million loss in 2021. Currency translations were mainly related to
intercompany loans and had no cash impact. The integration of GIL led to
a temporary increase in intra-group currency exposure.
(DKKm) 2022 2021
Interest on lease liabilities 727 495
Other interest cost, net 396 276
Interest on pensions 19 17
Currency translation, net (276) 53
Net financial expenses 866 841
The eective tax rate was 23.9% in 2022, compared to 24.5% in 2021.
This was in line with our expectations. The inclusion of GIL and the growth
of the Air & Sea division have increased the Group’s presence in countries
with a relatively higher corporate tax rate.
Diluted adjusted earnings per share
Diluted adjusted earnings per share went up by 59.9% to DKK 81.4 in
2022 (2021: DKK 50.9). This was driven by the significant increase in
adjusted earnings and also a reduction in shares outstanding, as treasury
shares from share buybacks were cancelled during the year.
Cash flow statement
Cash flow from operating activities in 2022 rose by 120.0% to DKK
26,846 million. Cash flow from operating activities was positively aected
by higher EBITDA before special items and an improvement in net working
capital, but oset by higher tax payments for the period.
On 31 December 2022, our net working capital (NWC) was DKK 5,116
million, compared to DKK 8,031 million in 2021. The main reason was lower
NWC for the Air & Sea division, where lower freight rates and lower activity
in the last months of 2022 reduced funds tied up in NWC. Process optimi-
sations, especially in the GIL business, also contributed to lower NWC.
(DKKm) 2022 2021
Cash flow from operating activities 26,846 12,202
Cash flow from investing activities (966) 420
Free cash flow 25,880 12,622
Cash flow from financing activities (24,245) (8,680)
Cash flow for the period 1,635 3,942
Free cash flow 25,880 12,622
Net acquisition of subsidiaries and activities - (1,631)
Special items 664 828
Repayment of lease liabilities (3,734) (3,160)
Adjusted free cash flow 22,810 8,659
21 DSV Annual Report 2022 Financial and non-financial performance
Relative to full-year revenue, funds tied up in NWC at year-
end decreased to 2.2%, from 3.5% in 2021.
Cash flow from investing activities was an outflow of DKK 966
million in 2022, in line with our expectations. The cash inflow
of DKK 420 million in 2021 was due to including the positive
cash position of GIL.
Adjusted free cash flow (adjusted for acquisitions, special items
and IFRS 16) was DKK 22,810 million, compared to DKK
8,659 million last year. The adjusted free cash flow was mainly
driven by the significant positive increase in cash flow from
operating activities.
Cash flow from financing activities was negative by DKK
24,245 million in 2022 (2021: negative DKK 8,680 million).
This dierence was mainly due to higher proceeds from bor-
rowings last year. In 2021, we issued three new corporate
bonds versus only one in 2022.
In line with our capital allocation policy, we allocated DKK
21,633 million to shareholders via share buybacks and divi-
dend in 2022. At year end, the financial gearing ratio was
1.0x EBITDA (2021: 1.4x).
Capital structure
On 31 December 2022, DSV shareholders’ share of equity
was DKK 71,519 million (2021: DKK 74,103 million). This
decrease was mainly driven by allocations to shareholders,
partly oset by profit for the period.
The share capital was nominally DKK 219 million by the end of
2022 (2021: 240 million). The share capital is divided into
219 million shares of DKK 1 each. Each share has one vote.
The share capital was reduced on 20 April 2022 through the
cancellation of 6 million treasury shares and on 22 December
2022 through the cancellation of 15 million treasury shares.
The solvency ratio excluding non-controlling interests was
45.0% on 31 December 2022, compared to 45.9% on
31 December 2021.
Net interest-bearing debt (including IFRS 16 lease liabilities)
was DKK 29,870 million by the end of 2022 – close to the
level of last year (2021: DKK 29,245 million).
In 2022, we issued one new corporate eight-year bond of
EUR 600 million. The weighted average duration of corporate
bonds, committed loans and credit facilities was 8.3 years
on 31 December 2022, compared to 9.6 years on
31 De cember 2021.
Invested capital and ROIC
The invested capital including goodwill and customer relation-
ships amounted to DKK 99,540 million on 31 December 2022
(2021: DKK 101,231 million). The decrease was mainly due to
lower net working capital, partly oset by higher currency
exchange rates.
Driven by strong growth in earnings, return on invested capital
(including goodwill and customer relationships) was 25.1% for
2022 (2021: 19.6%). Excluding goodwill and customer rela-
tionships, return on invested capital was 105.1% for 2022
(2021: 77.9%).
Reporting on corporate
social responsibility
For more information on developments within each ESG
area, please refer to our Sustainability Report at:
https://www.dsv.com/en/sustainability-reports
Sustainability Report 2022
Accelerating our ambitions
towards a more sustainable
future
22 DSV Annual Report 2022 Financial and non-financial performance
Performance on CO
2
emissions
In 2022, we raised our ambitions and committed to reaching net-zero
carbon emissions across our operations by 2050, and we revised our 2030
emission reduction targets for scope 1 and 2. According to our revised
targets, we will reduce our scope 1 and 2 emissions by 50% by 2030
and our scope 3 emissions by 30%.
Our total CO
2
emissions in 2022 increased by 4% compared to 2021.
The increase was primarily due to the full-year eect from GIL, but this
was oset by declining volumes within air and sea due to the economic
slowdown in the second half of 2022. The growth in scope 1 and 2
emissions was also impacted by the growth in our Solutions division
and an increase in our own truck fleet.
Compared to the 2019 baseline – now including GIL – our total emissions
declined by 22%. The main reason for this was an overall decline in freight
volumes in the period. As volume growth is expected to return in the
coming years, we need to achieve lower carbon intensity per transport.
Carbon intensity has generally improved over the years as transport
equipment becomes more ecient enabling better utilisation of capacity.
For sea freight, carbon intensity saw a negative development in 2021 and
2022, mainly due to less slow-steaming in a period with port congestion
and tight capacity – we expect this situation to reverse in the coming
years as more capacity is added.
With our CO
2
baseline in place, we are now working on a roadmap with
initiatives which over time can contribute to reducing our emissions
across all business areas. This includes the continued development of our
Green Logistics oerings, the use of sustainable fuels, pilots with electric
trucks, own production of energy and continued focus on optimising
our own buildings.
A business powered by people
We successfully integrated GIL in 2022. Across the organisation we
were able to retain the key GIL employees, which was very positive. In a
tight labour market we also achieved a relatively stable development for
existing DSV employees, and as a result, our employee turnover adjusted
for synergies was 22.1%. This was on level with last year and we estimate
that this is on level with our industry.
Promoting health and safety capabilities across the organisation is a key
priority for us in order to keep employees safe. It is reflected in our lost
time injury frequency rate, which this year dropped to 2.8 compared to
4.5 in 2021.
Conducting our business activities responsibly and applying strong ethical
standards is high on our agenda. This includes ensuring that we comply with
the latest human rights regulations, and in 2022 we developed a new and
improved Human Rights programme which will be fully rolled out in 2023.
Towards the end of 2022, we carried out a global engagement survey
across our organisation. The survey achieved a high response rate and
provided valuable feedback and insight on how we can make DSV an
even better place to work. The results of the survey are currently being
reviewed, and we look forward to addressing these findings over the
coming year.
Working with integrity
The DSV Code of Conduct forms our ethical foundation and guides our
principles, behaviour and culture. We conduct mandatory internal e-learning
modules every year, and in 2022, we achieved a 100% completion rate
among the employees assigned this year.
As freight forwarders, we depend on our suppliers who perform the trans-
port services. This year, we have implemented a new global third-party risk
management system, enabling us to improve our risk assessments, approval
and monitoring capabilities. In combination with new automated distribution
and sign-o capabilities of our Supplier Code of Conduct, these solutions
will help enforce our standards across our entire supply chain.
We will continue developing the new platform in 2023, improving our
supplier screening and evaluation capabilities.
In 2022, we committed to an ambitious 2050 net-zero target, and we restated our 2019
baseline for CO
2
emissions to now include GIL. We also completed our first global employee
engagement survey and updated our human rights assessment programme.
ESG performance
2021
2019
Baseline2022
Total Co
2
emissions ('000 tonnes) 15,930 15,373 20,526
Scope 1+2 441 254 409
Scope 3 15,489 15,119 20,117
Carbon intensity - Co
2
e (g/tonne-km)
Air transport 694.4 707.4 739.5
Sea transport 6.6 6.5 6.3
Road transport 97.5 98.7 98.1
23 DSV Annual Report 2022 Financial and non-financial performance
Condensed income statement and key figures (DKKm) 2021 Growth*2022
Revenue 174,431 131,901 26.1%
Direct costs 139,807 108,132
Gross profit 34,624 23,769 38.5%
Other external expenses 4,244 3,366
Sta costs 8,471 6,598
Operating profit before amortisation and
depreciation (EBITDA) before special items
21,909 13,805
Amortisation and depreciation 1,251 1,037
Operating profit (EBIT) before special items 20,658 12,768 53.0%
Gross margin (%) 19.8 18.0
Conversion ratio (%) 59.7 53.7
Operating margin (%) 11.8 9.7
Number of full-time employees at year end 23,032 24,675
Total invested capital 68,813 73,256
Net working capital 5,849 10,675
ROIC before tax (%) 29.1 21.9
For 2022, the division reported a 38.5% increase in gross profit and
53.0% increase in EBIT before special items. This growth was driven
by the inclusion of GIL, high gross profit yields in extraordinary freight
markets and a continued focus on operational excellence.
Air & Sea
* Growth including M&A and in constant currencies.
Market situation
Navigating volatile markets was a major theme in 2022. Dur-
ing the year, there was a significant change in the dynamics of
the global freight markets. At the start of the year, supply
chains were still heavily impacted by congestion and COVID- 19
lockdowns. This resulted in lack of capacity, high freight rates
and low schedule reliability.
During the second half of the year, demand for transport servic-
es declined as a result of the general macroeconomic slowdown,
de-stocking in the retail sector and a gradual normalisation aer
COVID-19 lockdowns as consumption shied away from mate-
rial goods and towards services. Congestion across supply chains
gradually eased and capacity started to recover, leading to a
more balanced market situation by the end of the year.
Air
The global air freight market saw gradually declining demand
during 2022, especially for export from Asia to Europe and to
North America. Demand for air freight was also impacted by
improving schedule reliability and lower rates in the sea freight
market, which made sea freight a more competitive alternative.
The available air freight capacity gradually increased as belly-
space capacity in passenger planes returned. As a result,
air freight rates declined, mainly in the second half of 2022.
This year, we achieved air freight volume growth of 3% (in-
cluding M&A impact). Adjusted for the acquisition of GIL, the
division’s 2022 volumes were down by approximately 7%,
compared to an estimated general market decline of 8-10%.
Sea
In the global sea freight market, port congestion was still an
issue on the US East Coast and in Northern Europe in the first
part of 2022, but available capacity gradually increased as
congestion eased during the year. In combination with weaker
The Air & Sea division operates a global
network specialising in transportation
of cargo by air and sea. The division
oers both conventional freight for-
warding services and tailored project
cargo solutions.
Gross profit
DKK 34,624 million
+.%
+.%
Operating profit
DKK 20,658 million
%
EMEA
%
APAC
%
AMERICAS
Geographic segmentation
based on gross profit
demand – especially on the Asia-Europe and Trans-Pacific routes – this
led to rapidly declining spot rates from the historical high rate levels we
saw at the end of 2021.
In 2022, we achieved sea freight volume growth of 7% (including M&A
impact). Adjusted for the acquisition of GIL, the division’s 2022 volumes
were down by approximately 7%, which we estimate to be in line with the
general market.
The volume development compared to the market for both air and sea was
impacted by our relatively high exposure to the Asia-Europe trade lane,
which was among the weakest performing in 2022. Furthermore, our abili-
ty to outgrow the market is normally limited during an integration year.
Strategic and operational highlights
We successfully completed the integration of GIL in 2022, less than a
year aer the acquisition – thanks to the strong eorts from our teams
worldwide. The inclusion of GIL has strengthened our Air & Sea network
across most geographies, especially in the Middle East and APAC. With
the integration of GIL, we also gained new competences, e.g., within
the energy and the chemicals sectors.
With the GIL integration behind us and general demand declining, our
focus has shied to adjusting our capacity and workforce and managing
the impact of cost inflation on our business. This was a theme in the last
part of 2022 and will continue to be high priority for us in 2023.
In 2022, we continued to develop systems and service oerings to cus-
tomers. Our workflows are already close to paperless, but we see poten-
tial to use and further improve our systems, focusing on areas like digital
customer integrations and booking data quality. This will help us provide
better and faster supply chain visibility to customers – and increase our
own productivity.
Our air charter network provides tailor-made solutions to customers
on specific routes. In 2022, we added new lanes to the network, e.g.,
from Singapore to Los Angeles. We operate the network with a clear fo-
cus on flexibility so we can scale capacity up and down as demand chang-
es. LCL (less than container load) in ocean freight is another business
area where we increased our focus in 2022. We have gained a strong
position within LCL in recent years, and we see good growth opportu-
nities in this market.
We saw increasing interest from customers for our Green Logistics
services in 2022, especially around carbon footprint transparency and
supply chain optimisation. The market for sustainable fuel is still relatively
immature with volatile pricing and limited availability. We expect this
will improve in the coming years, and it is highest priority for us to make
sure that our customers have the option to choose lower-emission
transports.
Results
DSV Air & Sea revenue was DKK 174,431 million in 2022 (2021: DKK
131,901 million), a growth of 26.1%.
This revenue growth was driven by the addition of GIL business and high-
er freight rates for both air and sea compared to 2021. Geographically,
all regions contributed to the growth in revenue.
Gross profit came to DKK 34,624 million for 2022 (2021: DKK 23,769
million), a growth of 38.5%. The increase was driven by the addition of
GIL and high yields per unit for both air and sea freight compared to the
same period last year.
The extraordinary market conditions over the past years have had a
positive impact on gross profit per TEU (sea freight) and per tonne (air
freight). Our skilled forwarders, scale benefits and strong carrier relation-
ships have enabled us to navigate the complex markets and oer trans-
port solutions for our customers despite the challenges. With weaker
demand, less congestion and lower freight rates, our gross profit yields
started to decline in the second half of 2022.
The division’s gross margin was 19.8% for 2022 (2021: 18.0%). The in-
crease was mainly due to the extraordinary markets as well as a change
in product mix compared to 2021 – with growth within higher- margin
activities like LCL and decline in lower-margin project business.
This year, EBIT before special items was DKK 20,658 million (2021: DKK
12,768 million) – an increase of 53.0%. The significant growth was driven
by the inclusion of GIL, the general gross profit rise and our continued focus
on productivity, achieving synergies and managing costs (operational excel-
lence). All regions contributed to the EBIT growth in 2022.
The conversion ratio came to 59.7%, compared to 53.7% last year. The con-
version ratio was positively aected by extraordinary high gross profit yields.
As yields normalise, we expect conversion ratio to decline. The improvement
in 2022 was also driven by the GIL integration and the achieved synergies.
Air freight (DKKm) 2022 2021
Revenue 90,591 70,846
Direct costs 71,988 57,795
Gross profit 18,603 13,051
Gross margin (%) 20.5 18.4
Volume (tonnes) 1,557,972 1,510,833
Gross profit per unit (DKK) 11,941 8,638
Sea freight (DKKm)
Revenue 83,840 61,055
Direct costs 67,819 50,337
Gross profit 16,021 10,718
Gross margin (%) 19.1 17.6
Volume (TEUs) 2,665,147 2,493,951
Gross profit per unit (DKK) 6,011 4,298
25 DSV Annual Report 2022 Financial and non-financial performance
21
18
15
12
9
6
3
0
Gross profit
Conversion ratio
Operating margin
EBIT
(DKKm) (DKKm) (DKKm)
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
25,000
20,000
15,000
10,000
5,000
0
%%
2021 2021 20212020 2020 2020
2019
2019 2019
2018
2018 2018
60
50
40
30
20
10
0
2022 2022 2022
Net working capital (NWC) was DKK 5,849 million at the end of the year,
compared to DKK 10,675 million at year-end 2021. This was due to
a combination of lower freight volumes and lower freight rates in
the last part of 2022, but also process improvements, especially in
the GIL related business.
In 2022, return on invested capital was 29.1%, compared to 21.9%
in 2021. The increase was driven by the strong earnings growth.
Focus areas for 2023
Aer completing three large integrations in recent years, we have
achieved a strong market position. We have the network, skilled people
and digital tools to provide market-leading global services to our custom-
ers, and our clear target is to gain market share. Today, some companies
are taking a critical look at their supply chains. We see this as an oppor-
tunity, and we are ready to help them with production relocation, dual
sourcing strategies, lowering emissions and by creating more supply
chain visibility/predictability.
In 2022, we had good momentum within sectors like energy, healthcare
and semiconductors, and we will continue to focus on these sectors.
Furthermore, we will continue to develop our LCL network, express
services and our air charter network as well as adapting to future
changes in demand.
Supply chain disruptions and volatility will still be an issue in some parts
of the market in 2023, but the so markets we saw in the second half of
2022 are likely to continue in the first part of 2023.
Due to the transport market slowdown and increasing competition,
we expect a decline in gross profit yields compared to the 2022 level,
and we will do our best to navigate the markets, adjust capacity and
protect our margins.
Revenue Gross profit EBIT before special items
26 DSV Annual Report 2022 Financial and non-financial performance
For 2022, the Road division achieved 11.0% growth in gross profit
and a 9.2% increase in EBIT before special items. The increase in
earnings was mainly driven by organic growth. The division deliv-
ered strong operational performance in a market aected by tight
capacity and cost inflation.
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 oers full load, part load
and groupage services through a net-
work of more than 250 terminals.
Gross profit
DKK 7,911 million
+.%
+.%
%
%
Operating profit
DKK 2,040 million
EMEA
AMERICAS
Road
Condensed income statement and key figures (DKKm) 2021 Growth*2022
Revenue 41,507 35,416 16.4%
Direct costs 33,596 28,321
Gross profit 7,911 7,095 11.0%
Other external expenses 1,425 1,122
Sta costs 3,543 3,149
Operating profit before amortisation and
depreciation (EBITDA) before special items 2,943 2,824
Amortisation and depreciation 903 967
Operating profit (EBIT) before special items 2,040 1,857 9.2%
Gross margin (%) 19.1 20.0
Conversion ratio (%) 25.8 26.2
Operating margin (%) 4.9 5.2
Number of full-time employees at year end 16,701 16,888
Total invested capital 10,690 9,624
Net working capital (586) (2,133)
ROIC before tax (%) 20.1 20.0
* Growth including M&A and in constant currencies.
Market situation
We estimate that our main road freight market in Europe grew by
around 1-3 % in 2022 – in line with European GDP. With the
general economic slowdown in the second half of the year, the
road freight market slowed down and market volumes dropped
below 2021 levels in the last quarter of the year.
The road market was characterised by tight capacity and lack of
truck drivers during most of 2022. The EU Mobility Package
came into eect at the beginning of the year, and the new regu-
lation eectively reduced available capacity. On top of this, the
market was impacted by higher fuel costs and general cost infla-
tion, which also contributed to increasing freight rates and costs.
In a challenging market, we estimate that our Road business grew
its share across most markets as a consequence of our strong
network and market position.
Strategic and operational highlights
The war in Ukraine, EU’s Mobility Package and other market
challenges were top of mind in 2022. Following the outbreak
of the war, many Ukrainian truck drivers le Western Europe
and returned to their home country. This added to the already
tight situation with structural lack of truck drivers.
Our eective procurement setup and network meant that, in
most cases, we were able to provide necessary capacity for our
customers. We believe that this was an important factor be-
hind our market share gains in 2022.
We also made progress on our Road Way Forward programme.
We implemented improvements across our European groupage
network, including enhanced planning, better equipment utilisa-
tion – and most importantly, more departures and higher and
more consistent customer service levels. Our new transport
management system is live in the Baltic countries, but we made
less progress than expected in 2022. We have now changed our
approach and reduced vendor dependency, and we are confident
that we will achieve further progress in 2023.
Geographic segmentation
based on gross profit
10
8
6
4
2
0
Gross profit
Conversion ratio
Operating margin
EBIT
(DKKm)
(DKKm)
(DKKm)
48,000
40,000
32,000
24,000
16,000
8,000
0
10,000
8,000
6,000
4,000
2,000
0
2,500
2,000
1,500
1,000
500
0
%
%
2021
2021
2021
2020
2020
2020
2019
2019
2019
2018
2018
2018
40
35
30
25
20
15
10
5
0
2022
2022
2022
The GIL acquisition had a limited impact on the Road division, but it did add
road activities in the Middle East, which continued to perform well in 2022.
We have continued our work to help customers optimise their supply chains
and reduce their carbon footprints. This includes promoting our Green
Logistics services, where we are seeing good interest – especially in North-
ern Europe and among large customers. Longer term, we are involved in
strategic partnerships with truck manufacturers, and we are testing dier-
ent technologies and equipment. This includes electric trailers, which have
the potential to reduce CO
2
emissions from transport by up to 40%.
Results
DSV Road revenue was DKK 41,507 million in 2022 (2021: DKK 35,416
million) – a growth of 16.4%. This was driven mainly by higher freight
rates and higher fuel surcharges. For international transports and busi-
ness-to-business shipments, we achieved growth year-on-year. Busi-
ness-to-consumer shipments were down, mainly due to lower activity for
customers within e-commerce and construction/do-it-yourself and simi-
lar sectors. In a market with record-high rate increases and cost inflation,
the division has tracked developments closely and has generally been able
to adjust prices and provide capacity to our customers.
The division has more than 85% of its revenue in Europe and saw good
performance across most countries in this region – especially in our
German operations. Our still relatively small operation in North America
achieved the highest organic growth rate in 2022, and adding GIL’s road
activities also contributed to growth.
Gross profit was DKK 7,911 million in 2022 (2021: DKK 7,095 million),
an annual increase of 11.0%.
The division’s gross margin was 19.1% for 2022, compared to 20.0% for
2021. Capacity shortages, higher fuel prices and general cost inflation
– partly due to the EU Mobility Package – led to higher direct freight cost
for the division. The pass-through element of cost inflation had a negative
impact on the gross margin.
EBIT before special items was DKK 2,040 million in 2022, compared to DKK
1,857 million in 2021. This 9.2% increase was driven by the gross profit
growth and solid performance across all regions, except for South Africa
which was loss-making in 2022. The conversion ratio came to 25.8% for
2022, compared to 26.2% for the same period last year. In an environ-
ment with high inflationary pressure on the cost base, the division has
maintained focus on productivity and cost management.
Net working capital (NWC) was negative DKK 586 million at the end of the
year, against negative DKK 2,133 million at year-end 2021. This development
was mainly a result of pre-payments related to property projects included in
NWC at the end of 2021.
Return on invested capital was 20.1% in 2022 and was on level with last year.
Focus areas in 2023
We expect a competitive market in 2023, with activity levels still impact-
ed by the economic slowdown. During the year, we will monitor activity
levels closely and adjust capacity when needed. Our target of gaining
market shares across geographies remains unchanged.
Across our network, we will continue to develop our services and systems,
supporting our customers’ need for supply chain visibility. We take more
than 90% of customer bookings digitally, and we aim to enhance data
quality in these bookings to improve customer service quality and our own
productivity. We will also continue to promote and develop our Green
Logistics services, and we expect an increasing demand for these services.
We continue to see North America as an attractive market with strong
potential for DSV Road, both organically and through M&A.
The Road Way Forward project continues in 2023. This includes rolling out
our transport management system in more countries and continuing devel-
opment of our European groupage services – aiming for greater geographi-
cal network coverage and improved performance on first/last mile distribu-
tion. Based on the network improvements we have already made, we ex-
pect growth in international groupage shipments in 2023.
Revenue
Gross profit
EBIT before special items
28 DSV Annual Report 2022 Financial and non-financial performance
The Solutions division achieved a 35.3% increase in gross profit
and a 47.4% increase in EBIT before special items. The strong
performance was driven by organic growth and the addition of
GIL activities.
Condensed income statement
and key figures
(DKKm) 2021 Growth*2022
Revenue 24,409 18,734 26.2%
Direct costs 15,091 12,081
Gross profit 9,318 6,653 35.3%
Other external expenses 1,759 1,338
Sta costs 2,254 1,664
Operating profit before amortisation and
depreciation (EBITDA) before special items 5,305 3,651
Amortisation and depreciation 2,604 1,876
Operating profit (EBIT) before special items 2,701 1,775 47.4%
Gross margin (%) 38.2 35.5
Conversion ratio (%) 29.0 26.7
Operating margin (%) 11.1 9.5
Number of full-time employees at year end 32,077 31,866
Total invested capital 23,364 20,182
Net working capital 1,624 1,061
ROIC before tax (%) 12.4 11.3
Solutions
* Growth including M&A and in constant currencies.
Market situation
The contract logistics market grew by an estimated 3-4% in
2022 compared to the previous year. The market had strong
momentum for the first part of the year, but growth deceler-
ated towards the end of the year. For many companies, espe-
cially in the retail sector, inventory levels increased during the
year, but in- and outbound transactions in warehouses de-
clined compared to the high activity level in 2021.
Throughout the year, warehouse capacity stayed in high demand
across most markets. As a result, warehouse utilisation has been
high, and the market was impacted by lack of labour, increasing
energy prices, general cost inflation and higher interest rates.
We estimate that Solutions took market share in all its major
markets during the year. This was driven by a strong service
oering, addition of new warehouse capacity and high utilisa-
tion of existing capacity.
Strategic and operational highlights
In 2022, we completed the GIL integration. The contract
logistics operations in the Middle East and South-East Asia
added activities across several industries, including pharma/
healthcare, and were a strong contributor to the growth.
We continued executing our long-term strategy for developing
multi-client warehouse campuses based on strategic roadmaps
for each region, and in 2022 we added more than 800,000 m
of warehouse facilities – of which approximately 300,000 m
was a net addition to the existing capacity. The campuses are
partly replacing existing facilities but are also adding new capac-
ity and are a key organic growth driver for the division.
The new warehouses can be equipped and automated to
match the needs of customers in dierent industries – and can
accommodate changes in customer needs around seasonality
and growth. Having several customers in the same location
The Solutions division oers ware-
housing and logistics services globally
and controls more than 500 logistics
facilities. The service portfolio includes
freight management, customs clear-
ance, order management and e-com-
merce solutions.
Gross profit
DKK 9,318 million
+.%
+.%
%
%
%
Operating profit
DKK 2,701 million
EMEA
APAC
AMERICAS
Geographic segmentation
based on gross profit
14
12
10
8
6
4
2
0
Gross profit
Conversion ratio
Operating margin
EBIT
(DKKm)
(DKKm)
(DKKm)
28,000
24,000
20,000
16,000
12,000
8,000
4,000
0
10,000
8,000
6,000
4,000
2,000
0
3,000
2,500
2,000
1,500
1,000
500
0
%
%
2021
2021
2021
2020
2020
2020
2019
2019
2019
2018
2018
2018
30
25
20
15
10
5
0
2022
2022
2022
delivers significant scale benefits, including improved utilisation of space
and equipment, warehouse automation and better sta planning. This is
clearly reflected in the division’s higher profit margins in recent years.
Across both new and existing warehouses, we continue to focus on sus-
tainability, launching several initiatives to reduce the environmental im-
pact of our operations. Our new warehouses are certified in line with
leading standards, such as BREEAM, and we increase the utilisation of
rooop areas for solar panels.
Our ongoing consolidation eorts also include the IT infrastructure. More
than 70% of all sites operate on the division’s global Warehouse Manage-
ment System, enabling standardisation of services and workflows while
reducing the cost per transaction (order line).
In 2021, we launched DSV Fulfilment Factory. This solution enables us
to oer warehouse automation to all sizes of companies with multiple
distribution channels, both B2B and B2C. We continued rolling it out in
2022 and now have 8 of 16 planned sites in operation.
Results
Solutions revenue was DKK 24,409 million in 2022 (2021: DKK 18,734
million), an annual growth of 26.2%. Growth was strongest in the first
part of the year and was driven both by the inclusion of GIL and by
organic growth across all regions.
Gross profit was DKK 9,318 million in 2022 (2021: DKK 6,653 million)
– an annual increase of 35.3%. The division achieved a gross margin of
38.2%, compared to 35.5% last year. Higher activity, high warehouse
utilisation and more ecient workflows in the new campuses were the
main drivers behind this development.
EBIT before special items was DKK 2,701 million (2021: DKK 1,775
million). This increase of 47.4% was driven by organic growth across
all regions and the successful integration of GIL.
The conversion ratio was 29.0%, compared to 26.7% last year.
This improvement was driven by growth in gross profit, and it was
achieved despite general cost inflation aecting the cost base – especially
in the second half of the year.
Net working capital (NWC) was DKK 1,624 million at the of the year,
compared to DKK 1,061 million last year. The increase was mainly due to
higher activity levels and property projects in progress.
Return on invested capital came to 12.4%, compared to 11.3% last year.
The growth in earnings was partly oset by an increase in average invest-
ed capital compared to 2021, mainly due to increases in warehouse leas-
ing commitments.
Focus areas in 2023
The current economic slowdown is also impacting the contract logistics market.
We are closely monitoring developments and maintain high focus on continu-
ously adjusting capacity and managing our cost base to match demand levels.
Despite the temporary economic slowdown, we still expect the market to
be characterised by strong demand for modern, ecient and automated
warehouses in the right locations.
We will continue to develop multi-client, automated warehouses with a high
focus on sustainability and energy eciency. We aim to strengthen our foot-
print across existing countries and focus particularly on growing our presence
in Americas and APAC. Bolt-on acquisitions may be relevant for us, especially
to gain specific industry competences or a foothold in a specific market.
We maintain our target of gaining market share – our improved pharma
sector oering and strengthened e-commerce products are examples of
commercial initiatives we expect will support growth in 2023.
Several industries are focusing on creating more robust supply chains.
This may lead to relocating production for our customers, more regional
production and assembly, higher inventory levels and more stock points
or distribution centres closer to the end consumer. We will work closely
with our customers and pursue the opportunities this will provide.
Revenue
Gross profit
EBIT before special items
30 DSV Annual Report 2022 Financial and non-financial performance
Ongoing key risk reassessment Tracking
Risk governance structure
As a global freight forwarder, we are exposed to a variety of risks that
are inherent to our operations. Managing these risks is an integrated part
of our management activities.
Our risk management framework is based on structured risk identification,
analysis and reporting processes, all of which provide the basis for ongoing
risk assessments and subsequent initiation of relevant mitigating actions.
Risk management
MitigationReportingRecordingAnalysis and
assessment
Identification
Dynamic risk adaption
Identified risks
are analysed
to determine cause,
impact and likelihood
of the risk occurring.
Risks are identified
using the Group’s
risk reporting tools.
Identified risks
are recorded
and prioritised. Risk
owners are allo cated to
identified key risks.
Risks are reported
to the Board of
Directors, the Audit
Committee, the Execu-
tive Board and other
stakeholders in the
organisation.
Risks are monitored
and preventive measures
implemented in cooperation
with the aected business
units. When necessary, mitiga-
tion actions are initiated imme-
diately aer risk identification.
Our flat organisational structure allows for fast escalation and timely re-
sponse to issues that may have a material impact on the Group’s earnings
and financial and strategic targets.
The Board of Directors is responsible for the Group’s risk management
strategy and the overall framework for identifying and mitigating risks. The
Audit Committee supervises compliance with the established framework.
The Executive Board is responsible for the day-to-day risk management
processes as well as the continuous development of the Group’s risk
management activities.
Risk management
Our risk management process is structured into two parallel tracks:
1. Operational risk management – which includes continuous handling of
various identified risks resulting from our normal day-to-day operations;
2. Strategic risk management – which addresses key risks and other
mid- to long-term strategic risks.
Operational risk management
Every week, the operational risks that arise as part of the daily business
operations are registered and processed across the organisation, followed
by initiation of mitigating actions.
The risks and risk management procedures initiated are reported on a
weekly basis to the Executive Board as well as to senior management
across the Group.
Our weekly operational risk reporting forms the basis for the Executive
Board’s day-to-day risk management activities and serves as input for
the regular reporting to the Board of Directors and the Audit Committee.
The weekly report is also distributed to lower management levels across
the organisation to create awareness and support knowledge sharing on
risks and other matters of importance to the Group.
Strategic risk management
The operational risk management process is followed up annually by
high-level strategic risk assessments. They focus on identifying and map
-
ping the key risks facing the Group.
These assessments are based on input from the operational risk manage-
ment process and extensive risk surveys involving a number of key em-
ployees across functions, departments and regions.
31 DSV Annual Report 2022 Corporate governance and shareholder information
1
3
Likelihood
of occurrence
DKK
750 million
Estimated
annual EBIT
impact in case
of occurence
Almost
certain
Moderate LikelyUnlikelyRare
5
8
6
2
7
4
Key risk map
1
IT Security
System breakdowns
and cyberattacks
2
Macroeconomy
Recession and changes
to global supply chains
3
Employees
Retention and
attraction
4
Compliance
Increasing regulatory
complexity
5
M&A
Acquisitions and
integration
6
Technology
Disruption and
technological adaption
7
Com mercial
Failure to execute
on organic growth
strategy
8
Climate risk
The short-term impact
from climate change
The key risks identified are addressed by the Executive Board and as-
signed to risk owners within the Group to make sure that relevant pre-
ventive measures are implemented. In line with the established frame-
work, the key risks are reported to and addressed by the Audit Commit-
tee and the Board of Directors.
Key risk assessment 2022
The latest assessment of the Group’s internal and external strategic risks
was carried out in Q4 2022.
The analysis confirmed the eight overall key risk areas – also identified in
previous years – which may have a significant impact on the Group’s
earnings, financial position and ability to achieve other strategic objec
-
tives, should they materialise.
The results of the risk analysis are presented in the adjacent risk map and
described in greater detail in the following pages. The risks are not listed
in a specific order.
The indicated likelihood of occurrence and annual EBIT impact are based
on our best estimates, taking mitigation strategies into consideration. As
such, it should be noted that the quantifications applied in the risk map
carries some degree of uncertainty.
Financial risks
Our daily operations involve various financial risks. However, these are
not considered key risks. Our financial risks are monitored by our Group
Finance departments to ensure a high level of management attention on
the eectiveness of our hedging strategies. Please refer to Chapter 4
of the notes for additional information on our financial risks.
32 DSV Annual Report 2022 Corporate governance and shareholder information
IT security – System breakdowns and cyberattacks
Risk description Mitigation strategies Risk assessment
IT systems, networks and related processes are crucial to our day-to-day
operations – from the delivery of our core logistics services to our analytic
capabilities and reporting to the financial markets.
This makes us vulnerable to system breakdowns, cyberattacks and failed IT
implementations.
A breakdown or an attempt to cause damage to DSV, our customers, sup-
pliers or partners through unauthorised access, destruction, corruption or
manipulation of data or systems could pose a significant risk to the Group.
Consolidation, centralisation and standardisation of our systems and processes are cornerstones
of our IT strategy and security setup. When integrating acquired companies, we migrate these
to our IT platform as quickly as possible.
The Group is focused on IT security and awareness, and we conduct regular audits and continu-
ous analyses of current controls and regular security updates. Migration to cloud-based solu-
tions, continuous cyber awareness training across the organisation, multi-factor authentication,
anti-virus and patch management and disaster recovery training are among the measures
implemented to mitigate the potential impact of this risk.
Our global IT organisation oversees IT risks and is responsible for ensuring infrastructure pre-
paredness. The Executive Board and the Audit Committee actively monitor cyber risks and the
eectiveness of our key IT controls through reporting and regular meetings with the IT
and compliance teams.
In 2022, we have experienced stable performance from our IT and security plat-
forms – both in terms of operational performance and in terms of mitigating cyber-
attacks, phishing attempts and other IT security risks.
The geopolitical situation and increasing digitalisation of our industry and workplaces
have accelerated the risk of targeted cyberattacks. This trend is likely to continue,
and our strategy for IT security is already based on this. To mitigate the increased
risk, we maintain a high security level, and we have – among other initiatives
– expanded the IT security training of employees.
During 2022, the Agility's Global Integrated Logistics business (GIL) operational
systems were successfully migrated to the DSV platform, reducing last year’s height-
ened exposure level.
Everything considered, the IT risk of the Group remains on par with last year, with
a slight increase in risk of occurrence.
Macroeconomy – Recession and changes to global supply chains
Risk description Mitigation strategies Risk assessment
An economic recession triggered by, e.g., geopolitical conflicts, rising infla-
tion and interest rates, distortion of the financial markets or a pandemic
will have an impact on our activity levels and, consequently, on our finan-
cial results.
Similarly, protectionist measures enacted by the major world economic
powers can also have a negative impact on global trade. Some restrictions
may be counterbalanced by increasing domestic activities and, as a result,
sale of other logistics services.
Finally, changing industry and consumer patterns which lead to lower glob-
al trade volumes or shortened logistic chains (e.g., because of increasing
environmental awareness or industries bringing production closer to home
to mitigate supply chain exposures) is also something we monitor closely,
although we have yet to see a material impact of this on our business.
To diversify our geographical exposure, we have for several years focused on organic and
acquisitive growth outside Europe, which has historically been our main market. The acquisitions
of UTi, Panalpina and GIL have significantly strengthened our network in Americas, APAC
and MENA.
Our asset-light approach implies that the majority of our terminals, warehouses and operational
equipment are leased on short- to medium-term contracts, with the average duration closely
monitored to accommodate capacity requirements. This allows us to quickly adapt to any po-
tential slowdown in individual markets.
Certain global supply chains are gradually changing, and we continuously adapt our network and
service oerings. This way, when production is established in new markets and dual sourcing
strategies are applied, we are ready to support our customers.
During 2022, the global economy and trade volumes have slowed down. Going into
2023, we are facing lower demand for transport services. This slowdown is already in-
cluded in our financial guidance for the year – but, obviously, there is uncertainty related
to the development both in terms of timing and severity.
We maintain our long-term assumption of 2-3% annual growth in global economy and
transport volumes growing in line with this.
Navigating economic downturns and the resulting fluctuations in demand is not new
to DSV. Our cost discipline, focus on keeping net working capital under control, strong
capital structure and scalable asset-light business model are all designed with this very
purpose in mind.
As a consequence of the economic slowdown, our macroeconomic risk has increased
from last year.
33 DSV Annual Report 2022 Corporate governance and shareholder information
Employees – Retention and attraction
Risk description Mitigation strategies Risk assessment
Our employees are our most important asset and vital to ensuring that we
succeed when it comes to executing on our strategies and meeting our
financial targets.
As freight forwarding is a people-reliant service oering, we depend on
highly qualified management teams and employees with technical and
operational qualifications, customer and market insights at all organisa-
tional levels.
Failure to attract new talent or to retain existing, experienced key employ-
ees can potentially have long-term consequences for the operational,
strategic and financial development of our company.
We strive to make our company an attractive place to work by oering a supportive and inspiring
working environment for all employees. This includes ensuring that our oce and warehouse
premises are modern and safe places to work as well as encouraging a safe and healthy working
environment.
We have established a performance culture centred around the empowerment of the individual,
which allows our employees to take responsibilities, make decisions and influence their everyday
work life. We also oer clear career-advancing opportunities to talented employees.
We implement this strategy through several initiatives driven by both local management teams
and our Group HR department. Examples include initiatives to promote our diversity and inclusion
policy, DSV Academy, talent development programmes and retention bonus programmes for key
employees.
During 2022, it remained a challenge to recruit new candidates for certain open
positions and in some cases to retain existing colleagues. Skilled employees and
managers will most likely continue to be in high demand, but as the global economy
slows down, we expect parts of the labour markets to ease.
Compared to previous years, we were able to retain a stable turnover ratio for our
employees, despite the challenging market in 2022.
The integration of GIL now completed, we see that we have managed to retain key
sta throughout the GIL organisation, as we intended.
Despite the positive notes, it is our assessment that the challenges involved in
recruiting and retaining sta for key positions have intensified. This implies that the
employee risk has slightly increased.
Compliance – Increasing regulatory complexity
Risk description Mitigation strategies Risk assessment
At all levels of our organisation and in all the regions and countries we do
business, we are committed to honest and ethical business practices and
complying with all relevant international and local regulations.
As a result of our global operations, we are subject to extensive national
and international regulatory requirements. In particular, regulations relating
to tax, customs, VAT, data privacy and competition law continue to in-
crease in scope and complexity. Trade embargoes impacting international
transports is another area currently increasing in magnitude.
Cases of non-compliance may carry a long-term impact on our public
reputation, which may in turn have a negative impact on our relationships
with customers and other stakeholders.
Additionally, cases of non-compliance may lead to significant fines, claims,
etc., for the Group, members of our Management or our employees.
'We do not deal in compliance' is a mantra which is well-known throughout the DSV organisa-
tion. This fundamental principle has been defined to safeguard the company and its employees,
but also because we believe it is the right way to run a business.
Our internal procedures, systems and employee training programmes are designed to ensure
awareness of this core principle and to ensure proper understanding and compliance with
relevant legislation and our Code of Conduct.
Our compliance framework is integrated into our business processes, containing clear guidelines
on how to identify compliance-related issues and how to act accordingly. In addition, communi-
cating and creating awareness of relevant issues is high on our agenda and activated through
regular news updates, global newsletters, webcasts and internal conferences.
Significant compliance-related risks are monitored and managed at Group level in close
cooperation with our local business units.
Following the trend from previous years, regulatory requirements continue to expand
in number and complexity. The fact that our operational activities span more than
80 countries and jurisdictions adds to this complexity.
To ensure adherence, we keep a close track of changes in the regulations governing
international taxation, transfer pricing as well as goods and country restrictions
– the latter currently emphasised by the international sanctions imposed as a result
of the Russian-Ukrainian war.
The integration of the GIL business into our compliance framework was completed
in 2022, significantly reducing the risk of non-conformance with existing DSV
compliance processes.
Although the GIL integration has been successfully completed, regulatory complexity
remains high. In addition to this, the current geopolitical situation also poses chal-
lenges. This leads us to conclude that the overall compliance risk exposure has
increased slightly.
34 DSV Annual Report 2022 Corporate governance and shareholder information
M&A – Acquisitions and integration failure
Risk description Mitigation strategies Risk assessment
Growth through strategic acquisitions is fundamental to our corporate
strategy and has been for many years.
Acquisitions always involve the risk of unsuccessful integration of the
acquired company, which could result in cost synergies, strategic advan-
tages or economies of scale being delayed or not fully realised.
Deciding on and carrying out the wrong acquisition may also be costly and
take up valuable resources that could have been spent on other potential
acquisition candidates.
We have a history of successful integration of acquired companies and realisation of expected
synergies. This rests on several factors. First of all, we stress the importance that any potential
acquiree matches our business model
Our IT, reporting and operational systems are designed to be scalable and to accommodate
eective integration of acquired companies.
Large integrations are headed by an integration board, and the activities are organised into work
streams (operational, commercial, financial, IT, legal, tax, etc.). The integration of operational ac-
tivities is anchored with and led by local management teams, based on guidance from Group Man-
agement. Local ownership ensures that acquired activities are integrated, with due consideration
of local legislation, market conditions and cultures.
A little over a year aer the takeover date, the integration of GIL was finalised in
2022. The integration of operations, IT and back-oce functions across close to
60 countries was carried out according to our plans and in line with our financial
business case.
M&A remains an important part of our strategy; this can lead to both large and small
acquisitions and integrations in the coming years. We continue to apply our strong
governance structure around M&A, but the financial risk related to each transaction
will depend on the size and type of the acquired company.
Due to the completed integration of GIL, the M&A risk has decreased compared to
last year.
Technology – Disruption and technological adoption
Risk description Mitigation strategies Risk assessment
As with most industries, freight forwarding undergoes continuous techno-
logical developments, while also being exposed to gradual changes in the
competitive landscape, driven by both existing players and new entrants
to the market.
Currently, we see digitalisation and automation of processes (quoting,
booking, tracking, reporting and billing) and the increasing focus on sus-
tainability as the most significant developments impacting the freight
forwarding industry in the coming years. These developments provide an
opportunity to optimise workflows and increase productivity, while also
providing higher levels of service and product oerings to our customers.
Failure to keep up with, adapt to and utilise these new technological op-
portunities – as well as tackle the competitive challenges they bring
– will lead to gradual loss of market share and earnings.
Central to our mitigation strategy is the monitoring of the logistics market, our customers’
needs and emerging technologies that could impact and improve our operations or services.
Strategic planning, innovation and continued development of our digital and physical infrastruc-
ture are anchored with our COO. Based on strategic roadmaps for each business area, we focus
on developing our service catalogues, systems and operational procedures to ensure that we
have a strong and competitive product oering that meets customer needs.
The aim of our strategy is to ensure that we can continue to benefit from our logistics exper-
tise, scale and global network as a classic freight forwarder, while increasing our digital com-
petences and utilising the benefits of technology.
We believe that we are well positioned in our industry within these areas, and that
our current development and strategic plans will ensure that we will remain so in
the coming years.
In 2022, we have continued to invest in and develop our IT platforms across our
service oerings. The COO function was established in 2021 and has been further
strengthened during 2022.
Consequently, we assess that our technology risk has remained largely unchanged
from last year.
For additional descriptions of our current technology focus areas, please see
‘A responsive approach to technology and digitalisation’ on page 16.
35 DSV Annual Report 2022 Corporate governance and shareholder information
Commercial – Failure to execute on organic growth strategy
Risk description Mitigation strategies Risk assessment
With the acquisitions of UTi in 2016, Panalpina in 2019 and GIL in 2021,
DSV has grown significantly over few years, more than tripling our revenue
and the number of employees of the Group.
Our network and market position have been strengthened, but growth also
carries challenges. While we integrate acquired companies and grow as a
business, we must make sure to maintain a strong commercial focus and
stimulate collaboration across the organisation.
Most important of all, we must retain our focus on customer needs, know
how to adapt to market changes and develop our services to ensure that
our value proposition is clear. If we fail to deliver in these areas, our ability
to execute on our organic growth strategy will be impaired, and this will
influence our long-term financial results.
Managing our commercial risk is anchored with the Executive Board and the Group Executive
Committee. In this forum, strategic initiatives are aligned and our commercial threats and op-
portunities are explored. For each of our business areas, we define the overall strategy and
purpose, our value proposition and which customer segments we target.
Through regular business reviews with divisions and our operational companies in each country,
Executive Management ensures that each division and country is aligned with the Group’s strat-
egy and policies. These reviews include financial performance, market situation, organisation,
local strategic initiatives, etc.
During 2022, we estimate that DSV has taken market share across most of the
markets we operate in. For the coming years, we maintain our target of achieving
organic growth above the market.
A number of strategic projects are in place to support our organic growth ambitions.
In 2022, we implemented a more systematic approach to managing and prioritising
these projects. The initiatives are anchored with our COO and include enhancing our
digital capabilities, deepening our vertical expertise, improving our green logistics
services and strengthening the cooperation across divisions.
We go into 2023 with a stronger network and market position than ever. Still, we
assess that the current macroeconomic slowdown will limit our short-term growth
potential and intensify the competition across our industry. Based on this, we esti-
mate that the potential impact from commercial risk for 2023 has increased slightly.
Climate – The long-term impact from climate change
Risk description Mitigation strategies Risk assessment
The long-term negative eects of climate change (as forecasted by the
UN IPCC and others) have the potential of significantly impacting our
industry. As such, it is a risk that we monitor closely.
Associated risks may manifest themselves as physical disruptions of our
logistic sites and operations or other forms of disruption in the global sup-
ply chains, triggered by an increase in the number of extreme weather
events.
Increasing climate regulations, taxations and customer requirements may
also impact the financial results of our company – for example as a result
of higher fuel costs or tax on emissions – to the extent that we are not
able to transfer the associated costs to our customers.
Finally, increasing consumer climate awareness may also lead to changes in
global supply and demand patterns, resulting in supply chains moving clos-
er to home markets. This could have a dampening eect on the long-term
growth potential on the more profitable intercontinental transport lanes.
Oversight and management of climate-related risks is anchored with the Board of Directors. To
support the Board of Directors in this role, we have established a Sustainability Board, headed
up by the Group CEO. The Sustainability Board takes the lead when it comes to identifying,
assessing and reporting on the development in climate-related risk.
To address the longer-term risk from climate change, we have committed to the Science Based
Targets initiative. We aim to achieve our CO
2
emission reduction targets through a number of
initiatives, such as making lower-emission transport alternatives available to our customers and
investing in modern and energy-ecient infrastructure.
As part of our mitigation strategy, we include the potential impact from climate changes when
we plan our physical infrastructure. For example, new warehouses and logistic centres are de-
signed to withstand more extreme weather conditions; and when deciding on placement, loca-
tions with lower risk of flooding is also taken into consideration.
Furthermore, our asset-light business model allows us to adapt to changes in the market, as we
have not invested in specific transport equipment.
For additional details and results on our 2022 TCFD climate risk assessment, please see the DSV
Sustainability Report 2022: https://www.dsv.com/en/sustainability-reports
Climate change and sustainability continue to move up on our agenda. In 2022, we
have – among other initiatives – increased our ambitions and introduced a net-zero
target for carbon emissions. And to support innovation and ensure that our sustaina-
bility ambitions are embedded in our operations, we established an Operational
Sustainability team, headed up by our COO.
We continue to develop our climate risk assessment framework based on guidelines
set by the Task Force on Climate-related Financial Disclosures (TCFD).
As reflected in the risk map, it is our current assessment that the overall climate risk
to our company is unchanged from last year, with a potential low-to-moderate im-
pact on our business, should unmitigated risks materialise.
Making projections on the long-term eects of climate change on our business in-
volves a high degree of uncertainty, hence our assessment may change in the future.
36 DSV Annual Report 2022 Corporate governance and shareholder information
Annual General Meeting
Board of Directors
Executive Board
Division Management
Air & SeaRoad Solutions
Organisation
Board
Committees
Group
functions
Management structure
The Board of Directors outlines and supervises the overall vision, strategy
and objectives of the Group’s business activities.
The Executive Board is responsible for the execution of these and for the
day-to-day management of the Group. It also provides input and supports
the work done by the Board of Directors.
Divisional Management is responsible for managing the operational activi-
ties of the divisions, supported by centralised Group functions.
The Board of Directors
Board composition
The Board of Directors must comprise five to nine members in accordance
with the Articles of Association and currently numbers eight. Directors are
elected for a term of one year, and new Directors are elected in accordance
with the applicable rules of the Danish Companies Act.
At the ordinary General Meeting in March 2022, Annette Sadolin resigned
from her position aer serving more than 12 years on the Board. Benedikte
Leroy joined in her place, bringing substantial management experience from
the tech industry as well as extensive expertise in the fields of legal com-
pliance, ESG and business ethics.
Corporate governance
All members of the Board of Directors are considered independent in ac-
cordance with the Danish Recommendation on Corporate Governance with
the exception of Birgit W. Nørgaard, who has served more than 12 years
on the Board. Birgit is not up for re-election at the Annual General Meeting
in 2023.
Board competencies
The Board is composed so as to ensure that the competencies of its mem-
bers are diverse and business relevant, so it can perform its duties as in-
tended. Overboarding is also taken into consideration when determining
the Board’s composition.
The current competencies required of Board members are: knowledge
of the transport sector, international commercial experience as well as
ex perience in strategy, M&A, risk management, IT, human resources and
accounting. See page 40 for a description of the individual members’
com petencies and experience.
Board self-evaluation
Once a year, the Board of Directors self-evaluates its composition, compe-
tencies and performance during the year. Diversity, overboarding, internal
management cooperation, succession planning and strategic focus areas
for the coming year are some of the topics evaluated.
The Board of Directors and the Executive Board form the governing body
of DSV, the ultimate authority resting with the shareholders at the General
Meeting. The allocation of tasks and responsibilities between the two boards is
defined by the Rules of Procedure.
37 DSV Annual Report 2022 Corporate governance and shareholder information
The Chairman of the Board is responsible for initiating and running the
evaluation process, which includes a mix of questionnaires and interviews.
When completed, the outcome is presented to – and discussed by – the Board.
At least every third year, external advisors are brought in to help conduct
the annual self-evaluation. The last time was in 2021. Using external advi-
sors helps give an independent perspective on the performance and com-
positions of the Board of Directors. The Board can then use their input to
support the self-evaluation the following years.
The 2022 self-evaluation addressed a number of topics – including Board
members’ mix of competencies and insight in areas like digitisation and ESG
regulation. The summary report had no reservations on these topics and
validated the appropriateness of the current Board composition.
Board committees
The Board of Directors is assisted by an audit, nomination and remunera-
tion committee. Each is responsible for carrying out various preparatory
tasks around the Board’s key areas of responsibility.
The committees also assist the Board by preparing and assessing all man-
agerial and strategic proposals presented to the Board, to ensure a solid
and informed basis for decision-making.
The rules of procedure for the committees are available at:
https://www.dsv.com/en/board-committees
Board meetings
In 2022, the Board of Directors held nine ordinary and no extraordinary
meetings. The agenda for each is defined in accordance with the annual
cycle of the Board to make sure the strategic and operational policy
framework of the Group is always up to date and in accordance with the
emphasis defined by the Board.
Besides the work laid down in the annual cycle, this year the Board mainly
focused on M&A and growth strategies, various integration topics around
the acquisition of Agility's Global Integrated Logistics business (GIL), cy-
bersecurity and the continuous development of our digital freight for-
warding platforms.
Meeting attendance 2022
Board of
Directors
Audit
Committee
Nomination
Committee
Remune ration
Committee
Thomas Plenborg 9/9 3/3 2/2 2/2
Jørgen Møller 9/9 - 2/2 2/2
Birgit W. Nørgaard 9/9 - 2/2 -
Marie-Louise Aamund 9/9 3/3 - -
Beat Walti 9/9 - - 2/2
Niels Smedegaard 9/9 3/3 - -
Tarek Sultan Al-Essa 9/9 - - -
Benedikte Leroy (elected March 2022) 7/7 2/2 - -
Annette Sadolin (resigned March 2022) 2/2 1/1 - -
38 DSV Annual Report 2022 Corporate governance and shareholder information
ME = Member
The Board also addressed various strategic considerations and business
adaptations in light of the European energy crisis, emergence of a global
economic downturn and other macroeconomic impacts brought on by the
war in Ukraine.
Remuneration of the Board of Directors and Executive Board
Remuneration policy
Remuneration of the Board of Directors and Executive Board is carried
out in accordance with DSV’s Remuneration Policy as adopted by the
Annual General Meeting.
The purpose of the Remuneration Policy is threefold: to make sure DSV
can attract and retain qualified members of the Board of Directors and
Executive Board; to align the interests of the Executive Board with those
of our investors and other societal stakeholders; and ultimately to create
incentive for generating long-term value for shareholders and executing
on goals set by the Board of Directors (for example around sustainability
or other strategic business initiatives).
The latest DSV Remuneration Policy is available at:
https://www.dsv.com/en/remuneration-policy
Remuneration report
We report on the remuneration of members of the Board of Directors and
Executive Board separately in the DSV Remuneration Report.
The report is prepared in accordance with section 139b of the Danish
Companies Act and the Danish Recommendations on Corporate Govern-
ance and is available at: https://www.dsv.com/en/remuneration-reports
Jens Bjørn Andersen
Oce CEO
Member since 2008
Born 1966
Jens H. Lund
Oce COO and
Vice CEO
Member since 2002
Born 1969
Michael Ebbe
Oce CFO
Member since 2021
Born 1970
Board positions
ME EET Group Holdings ApS
Executive Board
39 DSV Annual Report 2022 Corporate governance and shareholder information
Jørgen Møller
Oce Deputy Chairman
Member since 2015
Up for re-election Yes
Independent Yes
Born 1950
Committee
Audit Committee -
Nomination Committee Member
Remuneration Committee Member
Skills and experience
• General international management experience
• Extensive experience in shipping and logistics
(industry expert)
• CEO of DSV Air & Sea Holding A/S 2002-2015
Beat Walti
Oce Member
Member since 2019
Up for re-election Yes
Independent Yes
Born 1968
Committee
Audit Committee -
Nomination Committee -
Remuneration Committee Member
Skills and experience
• Professional board and general management experience
• Dr. jur. and legal experience serving as an attorney-at-law
• Acquisition and divestment of enterprises
Other Board positions
CM Ernst Göhner Foundation ME Siegfried Holding AG*
CM Zurzach Care AG ME Wenger Vieli AG
DC Rahn AG ME EGS Beteiligungen Ltd
Benedikte Leroy
Oce Member
Member since 2022
Up for re-election Yes
Independent Yes
Born 1970
Committee
Audit Committee Chairman
Nomination Committee -
Remuneration Committee -
Skills and experience
• International board and general management experience
• Extensive experience in technology from international
leadership roles in Dell, Symantec, GE and Apple
• Legal compliance, ethics and extensive insight in environ-
mental, social and governance regulation (ESG expert)
• Acquisition and divestment of enterprises
Birgit W. Nørgaard
Oce Member
Member since 2010
Up for re-election No
Independent No
Born 1958
Committee
Audit Committee -
Nomination Committee Member
Remuneration Committee -
Skills and experience
• General international management experience
• Strategy and financial management
• Acquisition and divestment of enterprises
Other Board positions
CM NO Invest A/S and two
related subsidiaries
DC NNE A/S
DC The Danish Council for ICT
DC Dansk Vækstkapital I
ME Dansk Vækstkapital II
ME NCC AB*
ME ABP Associated
British Ports
ME WSP Global Inc.*
ME RGS Nordic A/S
ME Consolis Group SAS
Niels Smedegaard
Oce Member
Member since 2020
Up for re-election Yes
Independent Yes
Born 1962
Tarek Sultan Al-Essa
Oce Member
Member since 2021
Up for re-election Yes
Independent Yes
Born 1964
Committee
Audit Committee Member
Nomination Committee -
Remuneration Committee -
Skills and experience
• General international management experience
• Extensive experience in shipping, logistics and the
airline industry (industry expert)
• Acquisition and divestment of enterprises
Other Board positions
CM ISS A/S*
CM Molslinjen Group ApS and
two related subsidiaries
CM Abacus Medicine A/S
Committee
Audit Committee -
Nomination Committee -
Remuneration Committee -
Skills and experience
• General international management experience
• Extensive experience in shipping and logistics
• Acquisition and divestment of enterprises
• Extensive insight in environmental, social and
governance regulation (ESG expert)
Other Board positions
DC Agility Public Warehousing Company K.S.C.P.*
ME National Real Estate Company K.P.S.C.*
Thomas Plenborg
Oce Chairman
Member since 2011
Up for re-election Yes
Independent Yes
Born 1967
Committee
Audit Committee Member
Nomination Committee Chairman
Remuneration Committee Chairman
Skills and experience
• Management experience from directorships and
honorary oces
• Strategy and financial management
• Professor of accounting and auditing at
Copenhagen Business School
Other Board positions
CM ECIT AS* ME Menzies Aviation
Marie-Louise Aamund
Oce Member
Member since 2019
Up for re-election Yes
Independent Yes
Born 1969
Committee
Audit Committee Member
Nomination Committee -
Remuneration Committee -
Skills and experience
• General international management experience
• International tech leadership experience from Microso,
IBM and Google
• Cybersecurity, digital transformation and sustainability
• Acquisition and divestment of enterprises
Other Board positions
CM Thinkproject GmbH ME KIRKBI A/S
ME The Lego Foundation ME WS Audiology A/S
CM = Chairman
DC = Deputy Chairman ME = Member * = Listed company
CM Bikubenfonden
CM Falck A/S
ME UK P&I
ME TT Club
Board of Directors
40 DSV Annual Report 2022 Corporate governance and shareholder information
DSV share price (DKK) ■ DSV ■ C25 rebased 31-12-2018
31/12 201931/12 2018 31/12 2020 31/12 2021 31/12 2022
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Share price performance in 2022
At year-end, the closing price for DSV shares on Nasdaq
Copenhagen was DKK 1,096.5 – down 28.2% since year-
end 2021. During the same period, the Danish C25 Index
decreased by 13.5%.
The average daily trading volume of DSV shares on Nasdaq
Copenhagen was 383,288 shares in 2022 (0.2% of shares issued).
At year-end, DSV’s market capitalisation (excluding treasury
shares) was DKK 238 billion against DKK 358 billion at the
end of 2021.
Ownership
There is no complete record of all shareholders. Based on the
available information as of 31 December 2022, DSV had
92,179 registered shareholders. The registered shares totalled
211 million, corresponding to 96.2% of the share capital. The
25 largest shareholders owned 60.9% of the free-floating
share capital.
DSV has no majority shareholders.
Shareholders owning more than 5% of the share capital in
DSV A/S according to latest shareholding notifications are:
• Ernst Göhner Stiung, Switzerland (9.7%)
• Agility Public Warehousing Company K.S.C.P, Kuwait (8.0%)
• BlackRock, Inc., USA (7.8%)
• Capital Group Companies, Inc., USA (5.1%)
Shareholder information
Share buyback and treasury shares
In 2022, DSV acquired 18.6 million treasury shares at a total
purchase price of DKK 20,313 million (average purchase price
DKK 1,092.8 per share).
During 2022, 21 million treasury shares were cancelled in
connection with reduction of the registered share capital.
On 31 December 2022, DSV held 2.1 million shares as treasury
shares, corresponding to 1.0% of the share capital.
On 1 February 2023, our portfolio of treasury shares amounted
to 3.1 million shares.
Throughout 2022, we have engaged in five share buy -
back programmes. The purpose of these was to accommo-
date the exercise of share options under incentive schemes
and to adjust the capital structure in accordance with the
financial targets.
The shares were acquired under the authorisation of the Annual
General Meeting. One programme was carried out outside
the Safe Harbour principles, while the remaining programmes
were executed under the Safe Harbour principles.
Dividends
The Board of Directors proposes an ordinary dividend of DKK
6.5 per share for 2022 (2021: DKK 5.5).
Shares issued (‘000) 2018 2019 2020 2021 2022
Number of shares issued 188,000 235,000 230,000 240,000 219,000
Average number of shares issued
during the past 12 months 182,092 198,273 227,246 227,501 235,438
Average diluted number of shares
during the past 12 months 185,287 201,405 231,576 232,639 230,467
41 DSV Annual Report 2022 Corporate governance and shareholder information
Capital allocation policy
Our capital allocation principles are described on page 18.
Authorities granted to the Board of Directors
The following authorities have been granted to the Board of Directors:
• to increase DSV’s share capital by issuing up to 48 million shares with
or without pre-emptive rights for existing shareholders. This authority
remains valid until 8 September 2026; and
• to acquire up to 21.9 million own shares, of which 3.1 million were
utilised as per 1 February 2023. This authority remains valid until
22 November 2027.
Communication with shareholders
We wish to provide the basis for fair and ecient pricing of the DSV share
by practising open and proactive communication.
To keep investors and other stakeholders up to date with the latest devel-
opments, our Executive Management host conference calls following the
release of financial results. Throughout the year, Executive Management
and Investor Relations stay in close contact with existing and potential
investors as well as market analysts, engaging with them through road-
shows and conferences hosted by various brokers.
We observe a four-week silent period prior to the publication of
annual and interim reports. DSV is covered by more than 20 equity
analysts. For more information about analyst coverage, please
visit investor.dsv.com
DSV share data
Number of shares of DKK 1 on 31 Dec. 2022 219,000,000
Share classes 1
Restrictions on transferability and voting rights None
Listed Nasdaq Copenhagen
Trading symbol DSV
ISIN code DK0060079531
Company announcements
In 2022, we published 71 company announcements (Nos. 936-1006).
The most important of these are listed in the chart below:
09 Feb. No. 941 Annual Report 2021
11 Mar. No. 949 EUR 600 Million EUROBOND issue
17 Mar. No. 951 Annual General Meeting
20 Apr. No. 956 Reduction of Share Capital in DSV A/S
27 Apr. No. 957 Interim Financial Report Q1 2022
26 Jul. No. 972 Interim Financial Report H1 2022
03 Aug. No. 975 Major shareholder announcement
21 Oct. No. 988 Major shareholder announcement
25 Oct. No. 991 Interim Financial Report – Q3
22 Nov. No. 998 Extraordinary General Meeting
22 Dec. No. 1005 Reduction of Share Capital in DSV A/S
Financial calendar
The financial calendar for 2023 is as follows:
Annual General Meeting 16 March
Q1 2023 Report 27 April
H1 2023 Report 25 July
Q3 2023 Report 24 October
Denmark
%
Kuwait
%
UK
%
Switzerland
%
USA
%
%
Others
The geographical distribution
of our shareholders
42 DSV Annual Report 2022 Corporate governance and shareholder information
2022 2021
Q1 Q2 Q3 Q4 Full year Q1 Q2 Q3 Q4 Full year
Income statement (DKKm)
Revenue* 61,125 62,749 60,560 51,231 235,665 33,616 37,831 49,557 61,302 182,306
Gross profit* 12,877 14,078 13,538 11,656 52,149 7,785 8,333 9,823 11,674 37,615
Operating profit (EBIT) before special items* 6,496 7,453 6,506 4,749 25,204 3,067 3,571 4,472 5,113 16,223
Operating margin (%) 10.6 11.9 10.7 9.3 10.7 9.1 9.4 9.0 8.3 8.9
Conversion ratio (%) 50.4 52.9 48.1 40.7 48.3 39.4 42.9 45.5 43.8 43.1
ROIC before tax (%) (trailing 12 months) 23.1 27.2 24.7 25.1 25.1 16.4 17.8 16.6 19.6 19.6
Invested capital (YTD) 103,986 105,596 106,713 99,540 99,540 66,420 67,690 100,316 101,231 101,231
Segment information (DKKm)
Air & Sea
Revenue 45,887 47,282 45,339 35,923 174,431 22,924 25,948 36,861 46,168 131,901
Gross profit 8,637 9,575 9,135 7,277 34,624 4,788 5,142 6,314 7,525 23,769
Operating profit (EBIT) before special items 5,224 6,163 5,455 3,816 20,658 2,393 2,843 3,521 4,011 12,768
Operating margin (%) 11.4 13.0 12.0 10.6 11.8 10.4 11.0 9.6 8.7 9.7
Conversion ratio (%) 60.5 64.4 59.7 52.4 59.7 50.0 55.3 55.8 53.3 53.7
Road
Revenue 10,188 10,835 10,406 10,078 41,507 8,056 8,663 8,783 9,914 35,416
Gross profit 1,938 2,074 1,989 1,910 7,911 1,657 1,768 1,745 1,925 7,095
Operating profit (EBIT) before special items 498 566 525 451 2,040 403 476 465 513 1,857
Operating margin (%)
4.9 5.2 5.0
4.5 4.9
5.0 5.5 5.3
5.2 5.2
Conversion ratio (%) 25.7 27.3 26.4 23.6 25.8 24.3 26.9 26.6 26.6 26.2
Solutions
Revenue 6,162 6,182 5,841 6,224 24,409 3,609 3,997 4,739 6,389 18,734
Gross profit 2,322 2,324 2,325 2,347 9,318 1,348 1,377 1,717 2,211 6,653
Operating profit (EBIT) before special items 789 753 613 546 2,701 263 278 486 748 1,775
Operating margin (%) 12.8 12.2 10.5 8.8 11.1 7.3 7.0 10.3 11.7 9.5
Conversion ratio (%) 34.0 32.4 26.4 23.3 29.0 19.5 20.2 28.3 33.8 26.7
Please refer to page 83 for a definition of key figures and financial ratios. * Reference is made to note 2.1 Segment information for a reconciliation of revenue, gross profit and operating profit before special items.
Quarterly financial highlights
43 DSV Annual Report 2022 Other information
Consolidated
financial
statements
2022
Income statement .................................... 45
Statement of comprehensive income ................... 45
Cash flow statement .................................. 46
Balance sheet ........................................ 47
Statement of changes in equity ........................ 48
Notes to the consolidated financial statements ........... 49
Income statement Statement of comprehensive income
(DKKm) Note 2022 2021
Revenue 2.2 235,665 182,306
Direct costs 2.3 183,516 144,691
Gross profit 52,149 37,615
Other external expenses 2.4 5,559 4,173
Staff costs 2.5 16,315 13,025
Operating profit before amortisation and depreciation (EBITDA)
before special items 30,275 20,417
Amortisation and depreciation 2.6 5,071 4,194
Operating profit (EBIT) before special items 25,204 16,223
Special items, costs 2.7 1,117 478
Financial income 2.8 606 206
Financial expenses 2.8 1,472 1,047
Profit before tax 23,221 14,904
Tax on profit for the year 5.1 5,550 3,650
Profit for the year 17,671 11,254
Profit for the year attributable to:
Shareholders of DSV A/S 17,568 11,205
Non-controlling interests 103 49
Earnings per share: 4.6
Earnings per share of DKK 1 77.3 49.3
Diluted earnings per share of DKK 1 76.2 48.2
(DKKm) Note 2022 2021
Profit for the year 17,671 11,254
Items that may be reclassified to the income statement when certain
conditions are met:
Net foreign exchange differences recognised in OCI 1,260 2,472
Fair value adjustments of hedging instruments 9 (21 )
Fair value adjustments of hedging instruments transferred
to financial expenses 9 6
Tax on items reclassified to the income statement 5.1 (2 ) 3
Items that will not be reclassified to the income statement:
Actuarial gains/(losses) 3.7 (395 ) 555
Tax on items that will not be reclassified 5.1 54 (119 )
Other comprehensive income, net of tax 935 2,896
Total comprehensive income 18,606 14,150
Total comprehensive income attributable to:
Shareholders of DSV A/S 18,500 14,109
Non-controlling interests 106 41
Total 18,606 14,150
45 DSV Annual Report 2022 Consolidated financial statements 2022
Cash flow statement
(DKKm) Note 2022 2021
Operating profit before amortisation and depreciation (EBITDA)
before special items 30,275 20,417
Adjustments:
Share-based payments 6.2 202 160
Change in provisions 520 105
Change in working capital 2,840 (4,604 )
Special items 2.7 (664 ) (828 )
Interest received 2.8 323 153
Interest paid, lease liabilities 3.6 (727 ) (495 )
Interest paid, other 2.8 (745 ) (443 )
Income tax paid 5.1 (5,178 ) (2,263 )
Cash flow from operating activities 26,846 12,202
Purchase of intangible assets 3.2 (280 ) (303 )
Purchase of property, plant and equipment 3.3 (1,514 ) (1,180 )
Disposal of property, plant and equipment 824 420
Acquisition of subsidiaries and activities 6.1 - 1,631
Change in other financial assets 4 (148 )
Cash flow from investing activities (966 ) 420
Free cash flow 25,880 12,622
Proceeds from borrowings 4.3 4,393 12,834
Repayment of borrowings 4.3 (3,719 ) (489 )
Repayment of lease liabilities 4.3 (3,734 ) (3,160 )
Other financial liabilities incurred (161 ) 118
(DKKm) Note 2022 2021
Transactions with shareholders:
Dividends distributed to shareholders of DSV A/S 4.2 (1,320 ) (920 )
Purchase of treasury shares 4.1 (20,313 ) (17,841 )
Sale of treasury shares 4.1 618 784
Other transactions with shareholders (9 ) (6 )
Cash flow from financing activities (24,245 ) (8,680 )
Cash flow for the year 1,635 3,942
Cash and cash equivalents 1 January 8,299 4,060
Cash flow for the year 1,635 3,942
Currency translation 226 297
Cash and cash equivalents 31 December 10,160 8,299
The cash flow statement cannot be directly derived from the balance sheet and income statement.
Statement of adjusted free cash flow (DKKm) Note 2022 2021
Free cash flow 25,880 12,622
Net acquisition of subsidiaries and activities (reversed) 6.1 - (1,631 )
Special items (reversed) 2.7 664 828
Repayment of lease liabilities 4.3 (3,734 ) (3,160 )
Adjusted free cash flow 22,810 8,659
46 DSV Annual Report 2022 Consolidated financial statements 2022
Balance sheet
Assets (DKKm) Note 2022 2021
Intangible assets 3.2 77,674 76,661
Right-of-use assets 3.6 14,694 13,709
Property, plant and equipment 3.3 6,284 6,262
Other receivables 2,461 2,395
Deferred tax assets 5.2 3,494 3,544
Total non-current assets 104,607 102,571
Trade receivables 4.4 32,387 36,369
Contract assets 3.4 5,785 9,797
Inventories 3.5 1,889 284
Other receivables 4,179 4,009
Cash and cash equivalents 10,160 8,299
Assets held for sale 38 66
Total current assets 54,438 58,824
Total assets 159,045 161,395
Equity and liabilities (DKKm) Note 2022 2021
Share capital 4.1 219 240
Reserves 4.1 919 (356 )
Retained earnings 70,381 74,219
DSV A/S shareholders’ share of equity 71,519 74,103
Non-controlling interests 222 175
Total equity 71,741 74,278
Lease liabilities 3.6 13,190 11,848
Borrowings 4.3 21,398 16,993
Pensions and other post-employment benefit plans 3.7 1,183 908
Provisions 3.8 4,260 3,508
Deferred tax liabilities 5.2 504 447
Total non-current liabilities 40,535 33,704
Lease liabilities 3.6 3,577 3,440
Borrowings 4.3 814 4,472
Trade payables 4.4 14,992 17,040
Accrued cost of services 3.4 12,085 13,289
Provisions 3.8 2,407 1,841
Other payables 9,640 10,257
Tax payables 3,254 3,074
Total current liabilities 46,769 53,413
Total liabilities 87,304 87,117
Total equity and liabilities 159,045 161,395
47 DSV Annual Report 2022 Consolidated financial statements 2022
Statement of changes in equity
2022 2021
Attributable to shareholders of DSV A/S Attributable to shareholders of DSV A/S
(DKKm)
Share
capital Reserves*
Retained
earnings Tota l
Non-
con trolling
interests
Total
equity
Share
capital Reserves*
Retained
earnings Tota l
Non-
con trolling
interests
Total
equity
Equity at 1 January 240 (356 ) 74,219 74,103 175 74,278 230 (2,836 ) 49,991 47,385 (88 ) 47,297
Profit for the year - - 17,568 17,568 103 17,671 - - 11,205 11,205 49 11,254
Other comprehensive income, net of tax - 1,271 (339 ) 932 3 935 - 2,482 422 2,904 (8 ) 2,896
Total comprehensive income for the year - 1,271 17,229 18,500 106 18,606 - 2,482 11,627 14,109 41 14,150
Transactions with shareholders and
non-controlling interests:
Share-based payments - - 202 202 - 202 - - 160 160 - 160
Tax on share-based payments - - (322 ) (322 ) - (322 ) - - 791 791 - 791
Dividends distributed - - (1,320 ) (1,320 ) (58 ) (1,378 ) - - (920 ) (920 ) (7 ) (927 )
Purchase of treasury shares - (19 ) (20,294 ) (20,313 ) - (20,313 ) - (13 ) (17,828 ) (17,841 ) - (17,841 )
Sale of treasury shares - 2 616 618 - 618 - 2 782 784 - 784
Capital increase - - - - - - 16 - 24,479 24,495 - 24,495
Capital reduction (21 ) 21 - - (1 ) (1 ) (6 ) 6 - - - -
Transfer of treasury shares as business combination
consideration - - - - - - - 3 5,073 5,076 - 5,076
Addition/disposal of non-controlling interests - - - - - - - - - - 273 273
Dividends on treasury shares - - 43 43 - 43 - - 28 28 - 28
Other adjustments - - 8 8 - 8 - - 36 36 (44 ) (8 )
Total equity transactions (21 ) 4 (21,067 ) (21,084 ) (59 ) (21,143 ) 10 (2 ) 12,601 12,609 222 12,831
Equity at 31 December 219 919 70,381 71,519 222 71,741 240 (356 ) 74,219 74,103 175 74,278
* For a specification of reserves, please see note 4.1.
48 DSV Annual Report 2022 Consolidated financial statements 2022
Notes to the
consolidated
financial
statements
Contents
Chapter 1
Basis of preparation
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Basis of measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Changes in accounting policies . . . . . . . . . . . . . . . . . . . . . . . 50
Management judgements and estimates . . . . . . . . . . . . . . . . . 50
Basis of consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Presentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
New accounting regulations. . . . . . . . . . . . . . . . . . . . . . . . . 51
Chapter 2
Profit for the year
2.1 Segment information . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.2 Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2.3 Direct costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.4 Other external expenses . . . . . . . . . . . . . . . . . . . . . . . 55
2.5 Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2.6 Amortisation and depreciation. . . . . . . . . . . . . . . . . . . . 55
2.7 Special items. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2.8 Financial income and expenses . . . . . . . . . . . . . . . . . . . 56
Chapter 3
Operating assets and liabilities
3.1 Impairment testing . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.2 Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
3.3 Property, plant and equipment . . . . . . . . . . . . . . . . . . . 60
3.4 Contract assets and accrued cost of services . . . . . . . . . . . 61
3.5 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.6 Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
3.7 Pension and other post-employment benefit plans . . . . . . . . 63
3.8 Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Chapter 4
Capital structure and finances
4.1 Equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4.2 Capital structure and capital allocation . . . . . . . . . . . . . . . 67
4.3 Financial liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
4.4 Financial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
4.5 Derivative financial instruments. . . . . . . . . . . . . . . . . . . 72
4.6 Earnings per share. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
4.7 Financial instruments – fair value hierarchy . . . . . . . . . . . . 73
Chapter 5
Tax
5.1 Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
5.2 Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Chapter 6
Other notes
6.1 Acquisition and disposal of entities . . . . . . . . . . . . . . . . . 77
6.2 Share option schemes . . . . . . . . . . . . . . . . . . . . . . . . 79
6.3 Remuneration of the Executive Board and
the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . 81
6.4 Fees to auditors appointed at the
Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . 81
6.5 Related-party transactions . . . . . . . . . . . . . . . . . . . . . 81
6.6 Contingent liabilities and security for debt. . . . . . . . . . . . .82
49 DSV Annual Report 2022 Consolidated financial statements 2022
50 DSV Annual Report 2022 Consolidated financial statements 2022
51 DSV Annual Report 2022 Consolidated financial statements 2022
Chapter 2
Profit for
the year
This chapter includes disclosures on
components of consolidated profit for the
year. The consolidated profit is based on the
combined results of our three operating
segments – Air & Sea, Road and Solutions
– as described in the following.
Reference is also made to the comments on
the financial performance of the Group and
the divisions in Management’s commentary.
52 DSV Annual Report 2022 Consolidated financial statements 2022
53 DSV Annual Report 2022 Consolidated financial statements 2022
54 DSV Annual Report 2022 Consolidated financial statements 2022
55 DSV Annual Report 2022 Consolidated financial statements 2022
56 DSV Annual Report 2022 Consolidated financial statements 2022
Chapter 3
Operating assets
and liabilities
This chapter includes notes disclosures on the
Group’s invested capital that forms the basis of
our business activities. Invested capital repre-
sents the Group’s property, plant and equip-
ment, intangible assets and net working capital
in the form of operating assets and liabilities.
Invested capital is structured based on our
asset-light business model, including our focus
on minimising funds tied up in working capital to
optimise the generation of available free cash
flow. Invested capital also com prises significant
intangible assets mainly relating to acquired
goodwill from business combinations carried
out over the years.
57 DSV Annual Report 2022 Consolidated financial statements 2022
3.1 Impairment testing — continued
58 DSV Annual Report 2022 Consolidated financial statements 2022
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60 DSV Annual Report 2022 Consolidated financial statements 2022
61 DSV Annual Report 2022 Consolidated financial statements 2022
3.6 Leases — continued
62 DSV Annual Report 2022 Consolidated financial statements 2022
63 DSV Annual Report 2022 Consolidated financial statements 2022
64 DSV Annual Report 2022 Consolidated financial statements 2022
65 DSV Annual Report 2022 Consolidated financial statements 2022
Chapter 4
Capital structure
and finances
This chapter includes disclosures on the
financial basis and exposures of the Group’s
activities derived by our capital structure and
net working capital.
The capital structure is linked to our long-term
financial target of a gearing ratio below 2.0 x
EBITDA before special items and the principles
for capital allocation.
In order of priority, the free cash flow is used to
reduce the Group’s net interest- bearing debt in
periods when the gearing ratio exceeds the
target, for investments and business combina-
tions, and for share buybacks or distribution to
the Company’s shareholders.
66 DSV Annual Report 2022 Consolidated financial statements 2022
4.1 Equity — continued 4.2 Capital structure and
67 DSV Annual Report 2022 Consolidated financial statements 2022
4.2 Capital structure and
capital allocation — continued
* Other includes additions and remeasurement of financial liabilities.
68 DSV Annual Report 2022 Consolidated financial statements 2022
4.4 Financial risks
69 DSV Annual Report 2022 Consolidated financial statements 2022
4.4 Financial risks — continued
70 DSV Annual Report 2022 Consolidated financial statements 2022
4.4 Financial risks — continued
71 DSV Annual Report 2022 Consolidated financial statements 2022
72 DSV Annual Report 2022 Consolidated financial statements 2022
73 DSV Annual Report 2022 Consolidated financial statements 2022
Chapter 5
Tax
In 2022, we contributed with direct and
indirect taxes such as corporate taxes, VAT,
GST, duties, etc., in more than 80 countries.
Our corporate tax payments amounted to
DKK 5,178 million.
We believe in contributing to the societies and
communities we do business in. One of the
ways we do that is through our global tax
payments. In all tax matters, we act in a fair,
compliant and responsible way.
74 DSV Annual Report 2022 Consolidated financial statements 2022
75 DSV Annual Report 2022 Consolidated financial statements 2022
76 DSV Annual Report 2022 Consolidated financial statements 2022
Chapter 6
Other notes
This chapter includes disclosures on other
statutory information not directly related
to the operating activities of the Group.
The chapter describes the acquisition and
disposal of entities during the year, contingent
liabilities and security for debt as well as trans-
actions with Group Management, auditors
and other related parties.
77 DSV Annual Report 2022 Consolidated financial statements 2022
6.1 Acquisition and disposal of entities — continued
78 DSV Annual Report 2022 Consolidated financial statements 2022
79 DSV Annual Report 2022 Consolidated financial statements 2022
6.2 Share option schemes — continued
Executive
Key
Average exercise
80 DSV Annual Report 2022 Consolidated financial statements 2022
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82 DSV Annual Report 2022 Consolidated financial statements 2022
83 DSV Annual Report 2022 Consolidated financial statements 2022
84 DSV Annual Report 2022 Consolidated financial statements 2022
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89 DSV Annual Report 2022 Consolidated financial statements 2022
90 DSV Annual Report 2022 Consolidated financial statements 2022
Statement by
the Board of
Directors and
the Executive
Board
The Board of Directors and Executive Board have today considered
and adopted the Annual Report of DSV A/S for the financial year
1 January to 31 December 2022.
The Annual Report has been prepared in accordance with International
Financial Reporting Standards (IFRS) as issued by the International
Accounting Standard Board (IASB) and in accordance with IFRS as
adopted by the EU and further requirements in the Danish Financial
Statements Act.
In our opinion, the Consolidated Financial Statements and the Parent
Company Financial Statements give a true and fair view of the financial
position of the Group and the Parent Company at 31 December 2022
and of the results of the Group and Parent Company operations and
cash flows for the financial year 2022.
Executive Board:
Board of Directors:
In our opinion, the annual report of DSV A/S for the financial year 1 January
to 31 December 2022 with the file name DSV-2022-12-31-en.zip is
prepared, in all material respects, in compliance with the ESEF Regulation.
In our opinion, Management’s commentary includes a true and fair account
of the development in the operations and financial circumstances of the
Group and the Parent Company, of the results for the year and of the
financial position of the Group and the Parent Company as well as a de-
scription of the most significant risks and elements of uncertainty facing
the Group and the Parent Company.
We recommend that the Annual Report be adopted at the Annual
General Meeting.
91 DSV Annual Report 2022 Statements
To the shareholders of DSV A/S
Report on the audit of the Financial
Statements
Independent
Auditor’s reports
92 DSV Annual Report 2022 Statements
93 DSV Annual Report 2022 Statements
CVR no 3377 1231
94 DSV Annual Report 2022 Statements
Parent
Company
financial
statements
2022
Contents
Financial statements
Income statement ...............................................96
Statement of comprehensive income ..............................96
Cash flow statement ............................................97
Balance sheet ...................................................98
Statement of changes in equity ...................................99
Notes
Basis of preparation
1. Accounting policies ........................................ 100
2. Changes in accounting policies .............................. 100
3. Management judgements and estimates ..................... 100
4. New accounting regulations ................................ 100
Income statement
5. Revenue ................................................. 100
6. Fees to auditors appointed at the Annual General Meeting ..... 100
7. Sta costs ................................................ 100
8. Special items ............................................. 100
9. Financial income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10. Financial expenses ......................................... 101
11. Income tax ............................................... 101
Balance sheet
12. Intangible assets .......................................... 101
13. Other plant and operating equipment ........................ 102
14. Current receivables from Group entities and other receivables .. 102
15. Equity reserves ........................................... 102
16. Financial liabilities ......................................... 103
17. Payables to Group entities and other payables ................. 103
18. Deferred tax .............................................. 103
Supplementary information
19. Share option schemes ..................................... 104
20. Investments in Group entities ............................... 104
21. Derivative financial instruments ............................. 105
22. Financial risks ............................................. 105
23. Contingent liabilities and security for debt .................... 106
24. Related-party transactions ................................. 106
95 DSV Annual Report 2022 Parent Company financial statements 2022
Income statement Statement of comprehensive income
(DKKm) Note 2022 2021
Revenue 5 3,077 2,417
Gross profit 3,077 2,417
Other external expenses 6 1,533 1,138
Sta costs 7 1,411 1,095
Operating profit before amortisation and depreciation (EBITDA)
before special items 133 184
Amortisation and depreciation 255 268
Operating profit (EBIT) before special items (122) (84)
Special items, costs 8 84 251
Financial income 9 5,006 6,543
Financial expenses 10 594 212
Profit before tax 4,206 5,996
Tax on profit for the year 11 349 137
Profit for the year 3,857 5,859
Proposed distribution of profit:
Proposed dividend per share is DKK 6.50 (2021: DKK 5.50 per share) 1,424 1,320
Transferred to equity reserves 2,433 4,539
Total distribution 3,857 5,859
(DKKm) 2022 2021
Profit for the year 3,857 5,859
Items that may be reclassified to the income statement when certain conditions are met:
Fair value adjustments of hedging instruments transferred to financial expenses 1 14
Tax on items reclassified to the income statement - (8)
Other comprehensive income, net of tax 1 6
Total comprehensive income 3,858 5,865
96 DSV Annual Report 2022 Parent Company financial statements 2022
Cash flow statement
(DKKm) Note 2022 2021
Operating profit before amortisation and depreciation (EBITDA)
before special items 133 184
Adjustments:
Share-based payments 19 36 -
Change in working capital 55 (583)
Special items - (185)
Dividend received 9 2,930 5,746
Interest received 9 227 797
Interest paid, other 10 (161) (212)
Income tax paid 71 (477)
Cash flow from operating activities 3,291 5,270
Purchase of intangible assets 12 (236) (230)
Purchase of other plant and operating equipment 13 (204) (146)
Acquisition of subsidiaries and activities 6,212 2,153
Cash flow from investing activities 5,772 1,777
Free cash flow 9,063 7,047
(DKKm) Note 2022 2021
Proceeds from borrowings 4,462 11,898
Repayment of borrowings (1,500) -
Change in long-term receivables and borrowings, net 7,116 (828)
Transactions with shareholders:
Dividends distributed (1,320) (920)
Dividends on treasury shares 43 28
Purchase of treasury shares (20,313) (17,841)
Sale of treasury shares 1,426 2,150
Cash flow from financing activities (10,086) (5,513)
Cash flow for the year (1,023) 1,534
Cash and cash equivalents 1 January 7,696 6,160
Cash flow for the year (1,023) 1,534
Currency translation - 2
Cash and cash equivalents at 31 December 6,673 7,696
The cash flow statement cannot be directly derived from the balance sheet and income statement.
97 DSV Annual Report 2022 Parent Company financial statements 2022
Assets (DKKm) Note 2022 2021
Intangible assets 12 710 657
Other plant and operating equipment 13 306 216
Investments in Group entities 20 47,874 54,087
Receivables from Group entities and other receivables 24,449 24,062
Deferred tax assets 18 - 20
Total non-current assets 73,339 79,042
Receivables from Group entities and other recievables 14 18,999 18,463
Tax receivables - 216
Cash and cash equivalents 6,673 7,696
Total current assets 25,672 26,375
Total assets 99,011 105,417
Equity and liabilities (DKKm) Note 2022 2021
Share capital 219 240
Reserves 15 545 488
Retained earnings 40,385 56,704
Total equity 41,149 57,432
Borrowings 16 21,388 27,176
Provisions 74 -
Deferred tax liabilities 18 16 -
Total non-current liabilities 21,478 27,176
Borrowings 16 206 1,714
Provisions 145 -
Tax payables 168 -
Payables to Group entities and other payables 17 35,865 19,095
Total current liabilities 36,384 20,809
Total liabilities 57,862 47,985
Total equity and liabilities 99,011 105,417
Balance sheet
98 DSV Annual Report 2022 Parent Company financial statements 2022
Statement of changes in equity
2022 2021
(DKKm) Share capital Reserves*
Retained
earnings Total equity Share capital Reserves*
Retained
earnings Total equity
Equity at 1 January 240 488 56,704 57,432 230 425 37,920 38,575
Profit for the year - 52 3,805 3,857 - 59 5,800 5,859
Other comprehensive income, net of tax - 1 - 1 - 6 - 6
Total comprehensive income for the year - 53 3,805 3,858 - 65 5,800 5,865
Transactions with shareholders:
Share-based payments - - 36 36 - - - -
Dividends distributed - - (1,320) (1,320) - - (920) (920)
Purchase of treasury shares - (19) (20,295) (20,313) - (13) (17,828) (17,841)
Sale of treasury shares - 2 1,425 1,426 - 2 2,166 2,168
Capital increase - - - - 16 - 24,479 24,495
Capital reduction (21) 21 - - (6) 6 - -
Transfer of treasury shares as business combination consideration - - - - - 3 5,073 5,076
Dividends on treasury shares - - 43 43 - - 28 28
Other adjustments - - (13) (13) - - (14) (14)
Total transactions with shareholders (21) 4 (20,124) (20,141) 10 (2) 12,984 12,992
Equity at 31 December 219 545 40,385 41,149 240 488 56,704 57,432
* For a specification of reserves, please refer to note 15.
99 DSV Annual Report 2022 Parent Company financial statements 2022
Basis of preparation
1. Accounting policies
As the Parent Company of the DSV Group, the financial statements of
DSV A/S are separate financial statements disclosed as required by the
Danish Financial Statements Act. The separate financial statements have
been prepared in accordance with International Financial Reporting Stand-
ards (IFRS) as issued by the International Accounting Standards Board
(IASB) and additional disclosure requirements in the Danish Financial
Statements Act for listed companies. IFRS standards have been applied to
the extent these have been adopted by the European Union. The account-
ing policies of the Parent Company are identical with the accounting poli-
cies for the consolidated financial statements, except for the following:
Dividends from investments in subsidiaries
Dividends from investments in subsidiaries are recognised as income
in the Parent Company’s income statement under financial income in
the financial year in which the dividends are declared.
Investments in subsidiaries in the Parent Company’s financial statements
Investments in subsidiaries are measured at cost. If there is any indica-
tion of impairment, investments are tested for impairment as described
in the accounting policies applied by the Group. If the cost exceeds the
recoverable amount, the investment is written down to this lower value.
Currency translation
Foreign currency adjustments of balances considered part of the to-
tal net investment in enterprises which have a functional currency
other than Danish kroner (DKK) are recognised in the income state-
ment of the Parent Company under financials.
Development cost reserve
In accordance with the Danish Financial Statements Act the reserve
for development costs comprises capitalized development costs ad-
justed for deferred tax.
2. Changes in accounting policies
All amendments to the International Financial Reporting Standards
(IFRS) eective for the financial year 2022 have been implemented
as basis for preparing the Parent Company financial statements and notes
to the statements. None of the implementations have had any material
impact on the statements or notes presented.
3. Management judgements and estimates
In preparing the Parent Company financial statements, Management makes
various accounting judgements that aect the reported amounts and disclo-
sures in the statements and in the notes to the financial statements. These
are based on professional judgement, historical data and other factors availa-
ble to Management. By nature, a degree of uncertainty is involved when car-
rying 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 eect of any changes is recognised in the
relevant period. The primary financial statements items for which significant
accounting judgements and estimates are applied are listed below:
Investments in subsidiaries
Management assesses annually whether there is an indication of impair-
ment of investments in subsidiaries. If so, the investments will be tested
for impairment in the same way as Group goodwill, involving various esti-
mates on future cash flows, growth, discount rates, etc. On 31 December
2022, no impairment indicators were identified.
4. New accounting regulations
The IASB has issued a number of new standards and amendments not yet in ef-
fect or adopted by the EU and therefore not relevant for the preparation of the
2022 Parent Company financial statements. These standards and amendments
are expected to be implemented when they take eect. None of the new
standards or amendments issued are currently expected to have any signi ficant
impact on the Parent Company financial statements when implemented.
Income statement
5. Revenue
(DKKm) 2022 2021
Intra-group charges 3,077 2,417
Total revenue 3,077 2,417
(DKKm) 2022 2021
Statutory audit 7 9
Other assurance services 1 2
Tax and VAT advisory services 1 1
Other services 1 4
Total fees 10 16
7. Sta costs
For information on remuneration of the Executive Board and the Board of
Directors, refer to notes 6.2 and 6.3 to the consolidated financial statements.
(DKKm) 2022 2021
Remuneration of the Board of Directors 7 7
Salaries etc. 390 332
Intra-group salary charges etc.* 971 721
Defined contribution pension plans 43 35
Total sta costs 1,411 1,095
Average number of full-time employees 607 507
8. Special items
(DKKm) 2022 2021
Restructuring and integration costs 84 165
Transaction costs relating to acquisition
of GIL - 86
Total special items, costs 84 251
6. Fees to auditors appointed at the Annual General Meeting
* The intra-group salary charges relate to an average of 1,803 FTEs in 2022
(2021: 1,364).
100 DSV Annual Report 2022 Parent Company financial statements 2022
11. Income tax
Tax for the year is disaggregated as follows:
Balance sheet
12. Intangible assets
Tax on profit for the year specifies as follows: Tax rate specifies as follows:
Interest income includes interest on financial assets of DKK 227 million
(2021: DKK 154 million).
10. Financial expenses
Interest expenses include interest on financial liabilities measured at
amortised cost of DKK 161 million (2021: DKK 145 million).
(DKKm) 2022 2021
Interest income 227 154
Interest income from Group entities 831 406
Currency translation, net 1,018 237
Dividends from subsidiaries 2,930 5,746
Total financial income 5,006 6,543
(DKKm) 2022 2021
Interest expenses 161 145
Interest expenses to Group entities 433 67
Total financial expenses 594 212
(DKKm) 2022 2021
Tax on profit for the year 349 137
Tax on other comprehensive income - 8
Total tax for the year 349 145
(DKKm) 2022 2021
Current tax 326 187
Deferred tax 24 (78)
Tax adjustment relating to previous years (1) 28
Total tax on profit for the year 349 137
(DKKm) 2022 2021
Calculated tax on profit for the year before tax 22.0% 22.0%
Tax eect of:
Non-deductible expenses/non-taxable income (13.7%) (20.2%)
Tax adjustment relating to previous years 0.0% 0.5%
Eective tax rate 8.3% 2.3%
2022 2021
(DKKm) Soware
Soware in
progress Tot a l Soware
Soware in
progress Tot a l
Cost at 1 January 908 266 1,174 1,004 166 1,170
Additions - 236 236 - 230 230
Disposals (141) - (141) (226) - (226)
Reclassifications 174 (174) - 130 (130) -
Total cost at 31 December 941 328 1,269 908 266 1,174
Total amortisation and im pairment at 1 January 517 - 517 554 - 554
Amortisation and impairment for the year 151 - 151 140 - 140
Disposals (109) - (109) (177) - (177)
Total amortisation and im pairment at 31 December 559 - 559 517 - 517
Carrying amount at 31 December 382 328 710 391 266 657
9. Financial income
101 DSV Annual Report 2022 Parent Company financial statements 2022
13. Other plant and operating equipment 15. Equity reserves
Equity reserves are specified below:
For a description of equity reserves, please refer to note 4.1 to the consolidated financial statements.
14. Current receivables from Group entities
and other receivables
(DKKm) 2022 2021
Cost at 1 January 460 350
Additions 204 146
Disposals (140) (36)
Total cost at 31 December 524 460
Total depreciation and impairment at 1 January 244 204
Depreciation for the year 104 76
Disposals (130) (36)
Total depreciation and
impairment at 31 December 218 244
Carrying amount at 31 December 306 216
(DKKm) 2022 2021
Receivables from Group entities 18,764 18,138
Other receivables 235 325
Total 18,999 18,463
2022
(DKKm)
Treasury share
reserve Hedging reserve
Development
cost reserve Total reserves
Reserves at 1 January (6) (4) 498 488
Profit for the year - - 52 52
Other comprehensive income, net of tax - 1 - 1
Transactions with shareholders:
Purchase of treasury shares (19) - - (19)
Sale of treasury shares 2 - - 2
Capital reduction 21 - - 21
Reserves at 31 December (2) (3) 550 545
2021
(DKKm)
Treasury share
reserve Hedging reserve
Development
cost reserve Total reserves
Reserves at 1 January (4) (10) 439 425
Profit for the year - - 59 59
Other comprehensive income, net of tax - 6 - 6
Transactions with shareholders:
Purchase of treasury shares (13) - - (13)
Sale of treasury shares 2 - - 2
Capital reduction 6 - - 6
Transfer of treasury shares as business combination consideration 3 - - 3
Reserves at 31 December (6) (4) 498 488
102 DSV Annual Report 2022 Parent Company financial statements 2022
16. Financial liabilities 17. Payables to Group entities and other payables
18. Deferred tax
Borrowings are subject to standard trade covenants. All financial ratio
covenants were observed during the year. The weighted average interest
rate was 0.9% (2021: 0.7%).
(DKKm) 2022 2021
Overdra and credit facilities 16,408 22,036
Issued bonds 5,186 6,681
Other financial liabilities - 173
Total financial liabilities 21,594 28,890
Financial liabilities as recognised
in the balance sheet:
Non-current liabilities 21,388 27,176
Current liabilities 206 1,714
Financial liabilities at 31 December 21,594 28,890
Carrying amount
(DKKm) Expiry Fixed/floating 2022 2021
Bond loans 2024-2027 Fixed 5,186 6,681
Overdra and
credit facilities 2023-2036 Fixed 16,408 22,036
Loans and credit facilities at 31 December 21,594 28,717
2022 2021
Non-cash change Non-cash change
Financing activities (DKKm)
Beginning
of year Cash flow
Acqui-
sition Other
End of
year
Beginning
of year Cash flow
Acqui-
sition Other
End of
year
Overdra and credit facilities 22,036 (5,628) - - 16,408 4,045 17,807 - 184 22,036
Issued bonds 6,681 (1,500) - 5 5,186 6,674 7 - - 6,681
Lease liabilities - - - - - 1 (1) - - -
Total liabilities from
financing activities 28,717 (7,128) - 5 21,594 10,720 17,813 - 184 28,717
Other non-current liabilities 173 - 90 173
Total financial liabilities 28,890 21,594 10,810 28,890
(DKKm) 2022 2021
Payables to Group entities 34,901 18,364
Other payables 964 731
Total 35,865 19,095
(DKKm) 2022 2021
Deferred tax at 1 January 20 (29)
Deferred tax for the year (24) 78
Tax adjustments relating to previous years 1 (38)
Tax on changes in equity (13) 9
Deferred tax at 31 December (16) 20
Deferred tax as recognised in
the balance sheet:
Deferred tax liabilities 16 -
Deferred tax assets - 20
Deferred tax, net (16) 20
Specification of deferred tax:
Intangible assets (84) (86)
Current assets (11) (3)
Other liabilities 79 109
Deferred tax at 31 December (16) 20
Overdra and credit facilities:
103 DSV Annual Report 2022 Parent Company financial statements 2022
Supplementary information
19. Share option schemes
DSV A/S has issued share options to key employees and members of the
Executive Board of the Company. Refer to note 6.2 to the consolidated
financial statements for a list of current incentive share option schemes
and a description of the assumptions used for the valuation of the share
options granted in 2022. Total costs recognised in 2022 for services re-
ceived but not recognised as an asset amounted to DKK 36 million (2021:
DKK 27 million). The average share price for options exercised in the
financial year was DKK 1,097.7 per share at the date of exercise.
20. Investments in Group entities
DSV A/S owns the following subsidiaries, all of which are included in the
consolidated financial statements:
Owner ship
2022
Owner ship
2021
Registered
oce
Share capital
(DKKm)
DSV Road
Holding A/S 100% 100%
Hedehusene,
Denmark 100
DSV Air & Sea
Holding A/S 100% 100%
Hedehusene,
Denmark 50
DSV Solutions
Holding A/S 100% 100%
Hedehusene,
Denmark 100
DSV Insurance A/S
100% 100%
Hedehusene,
Denmark 25
DSV Group
Services A/S 100% 100%
Hedehusene,
Denmark 5
DSV FS A/S
100% 100%
Hedehusene,
Denmark 0.5
Panalpina
Welttransport
(Holding) AG 100% 100%
Basel,
Switzerland 18
Agility Logistics
International B.V. 100% 100%
Rozenburg,
Netherlands 2,632
DSV Finance B.V.
100% 100%
Venlo,
Netherlands 0
GIL International
Holdings I Ltd. 100% 100%
Abu Dhabi,
UAE 3,108
Share option schemes at 31 December 2022
Scheme Exercise period
Executive
Board
Key
employees Total
Average
exercise price
per option
2018* 28.03.2021 - 28.03.2023 190,000 58,000 248,000 477.5
2019* 29.03.2022 - 27.03.2024 190,000 154,000 344,000 545.0
2020 31.03.2023 - 31.03.2025 202,000 283,250 485,250 560.0
2021 01.04.2024 - 31.03.2026 168,750 239,925 408,675 1,325.0
2022 01.04.2025 - 31.03.2027 198,250 263,675 461,925 1,485.0
Outstanding at 31 December 2022 949,000 998,850 1,947,850 926.7
Open for exercise at 31 December 2022 380,000 212,000 592,000 516.7
Life (years) 2 3 3 n.a.
Market value (DKKm) 350 299 650 n.a.
* Share options granted in 2018 and 2019 are currently exercisable.
Outstanding share options
Executive
Board
Key
employees Total
Average
exercise price
per option
Outstanding at 1 January 2021 760,000 926,129 1,686,129 501.3
Granted 156,750 263,850 420,600 1,325.0
Transferred
** 36,000 (36,000) - -
Exercised (190,000) (222,056) (412,056) 401.7
Options waived/expired - (11,775) (11,775) 703.3
Outstanding at 31 December 2021 762,750 920,148 1,682,898 972.4
Outstanding at 1 January 2022 762,750 920,148 1,682,898 972.4
Granted 198,250 274,075 472,325 1,485.0
Exercised (12,000) (164,573) (176,573) 514.1
Options waived/expired - (30,800) (30,800) 1,112.0
Outstanding at 31 December 2022 949,000 998,850 1,947,850 926.7
** A member of the Executive Board has previously received share options in the Director’s former capacity as DSV key employee.
104 DSV Annual Report 2022 Parent Company financial statements 2022
21. Derivative financial instruments
DSV A/S has obtained long-term loans mainly on a fixed rate basis, imply-
ing that DSV A/S is less exposed to interest rate fluctuations.
DSV A/S mainly uses interest rate swaps to hedge future cash flows relat-
ing to interest rate risks. Thereby, floating-rate loans are converted to
fixed-rate financing.
At the balance sheet date, DSV A/S no longer have any interest rate
swaps. The weighted average eective interest rate for existing interest
rate instruments used as hedges of long-term loans was therefore 0% at
the reporting date (2021: 0.8%).
For 2022 a gain on hedging instruments of DKK 208 million was recog-
nised in the income statement (2021: loss of DKK 51 million). In the same
period, a gain of DKK 810 million was recognised relating to assets and
liabilities (2021: loss of DKK 5 million). For more information on foreign
currency and interest rate risk hedging, refer to notes 4.4 and 4.5 to the
consolidated financial statements.
22. Financial risks
Financial risks of the Parent Company are handled within the risk manage-
ment processes and framework of the Group. Please refer to note 4.4 to
the consolidated financial statements.
The liabilities of DSV A/S fall due as listed in the adjacent table.
The analysis of expected maturity is based on contractual cash flows,
including estimated interest payments. No amounts have been discount-
ed, for which reason they cannot necessarily be reconciled to the related
items of the balance sheet.
2022
Hedging instruments
(DKKm) Contractual value Maturity Fair value
Of which recog-
nised in income
statement
Of which
recognised
in OCI
Currency instruments 16,736 2023-2025 82 86 (4)
Total 16,736 82 86 (4)
2021
(DKKm) Contractual value Maturity Fair value
Of which recog-
nised in income
statement
Of which
recognised
in OCI
Currency instruments 26,137 2022 (26) (27) 1
Interest rate instruments 744 2022 (7) - (7)
Total 26,881 (33) (27) (6)
2022 2021
Loan and credit facilities
(DKKm) 0-1 year 1-5 years > 5 years
Total cash
flows, incl.
interest 0-1 year 1-5 years > 5 years
Total cash
flows, incl.
interest
Loans, credit facilities and issued bonds 186 5,852 17,024 23,062 11,805 1,952 16,230 29,987
Other payables 964 - - 964 736 - - 736
Payables to Group entities 34,901 - - 34,901 18,359 - - 18,359
Currency derivatives 80 2 - 82 26 - - 26
Interest rate derivatives - - - - 3 6 - 9
Total 36,131 5,854 17,024 59,009 30,929 1,958 16,230 49,117
105 DSV Annual Report 2022 Parent Company financial statements 2022
22. Financial risks – continued
Financial instruments by category
DSV has no financial instruments measured at fair value based on level 1
input (quoted active market prices) or level 3 input (non-observable
market data).
All financial instruments are measured based on level 2 input (input other
than quoted prices that are observable either directly or indirectly).
Derivative financial instruments
The fair value of currency derivatives is determined based on generally
accepted valuation methods using available observable market data.
Calculated fair values are verified against comparable external market
quotes on a monthly basis.
2022 2021
Carrying amount (DKKm)
Carrying amount Fair value Carrying amount Fair value
Financial assets:
Currency derivatives 97 97 13 13
Current receivables from Group entities and other receivables 18,998 18,998 18,463 18,463
Non-current receivables from Group entities and
other receivables 24,448 24,448 24,062 24,062
Cash and cash equivalents 6,673 6,673 7,696 7,696
Financial assets measured at amortised cost 50,119 50,119 50,221 50,221
Financial liabilities:
Interest rate derivatives - - 9 9
Currency derivatives 15 15 39 39
Issued bonds measured at amortised cost 5,186 4,649 6,681 6,681
Loans and credit facilities 16,408 16,408 22,036 22,036
Payables to Group entities and other payables 35,865 35,865 19,095 19,095
Financial liabilities measured at amortised cost 57,459 56,922 47,812 47,812
Financial liabilities measured at amortised cost
In 2021, the carrying value of financial liabilities measured at amortised
cost was not considered to dier significantly from fair value.
Due to changes in the macroeconomic environment, the carrying value of
financial liabilities measured at amortised cost is no longer considered to
represent the fair value. The 2022 fair value of issued bonds measured
at amortised cost is within level 1 of the fair value hierarchy.
Receivables from Group entities and other receivables and payables to
Group entities and other payables.
Receivables and payables pertaining to operating activities and with short
churn ratios are considered to have a carrying value equal to fair value.
23. Contingent liabilities and security for debt
Contingent liabilities
DSV A/S and the other Danish Group entities are registered jointly for
VAT purposes and are jointly and severally liable for the VAT liabilities.
DSV A/S is assessed jointly for Danish tax purposes with the other do-
mestic Group entities. DSV A/S is the administration company of the joint
taxation arrangement and is under an unlimited and joint liability regime
for all Danish tax payments and withholding taxes on dividends, interest
and royalties from the jointly taxed entities. Income tax and withholding
tax payables under the joint taxation arrangement amounted to DKK
168 million (2021: payable of DKK 506 million), which is included in
the financial statements of DSV A/S.
Parent Company guarantees
DSV A/S has provided guarantees for subsidiaries’ outstanding balances
with banks and liabilities to leasing companies, suppliers and public
authorities, etc. in the amount of DKK 12,424 million (2021: DKK 11,005
million). Moreover, DSV A/S has issued several declarations of intent
relating to outstanding balances between subsidiaries and third parties.
24. Related-party transactions
DSV A/S has no related parties with control of the Group and no related
parties with significant influence other than key management personnel
– mainly in the form of the Board of Directors and Executive Board.
Related-party transactions
Board of Directors and Executive Board
No transactions with the Board of Directors and Executive Board were
made in the 2022 financial year other than ordinary remuneration, as
described in notes 6.2 and 6.3 to the consolidated financial statements.
Intra-group transactions
No intra-group transactions were made in 2022 other than as stated in
the income statement and notes.
106 DSV Annual Report 2022 Parent Company financial statements 2022
