DSV Group
Our reach is global, yet our presence is local and close to our customers. 75,000 employees in more than 80 countries work passionately to deliver great customer
experiences and high-quality services. Read more at www.dsv.com
INTERIM FINANCIAL REPORT
Q1 2023
Company Announcement No. 1030
Selected key figures and ratios for the period 1 January – 31 March 2023
27 April 2023
Q1 2023
Q1 2022
Key figures (DKKm)
Revenue
40,954
61,125
Gross profit
11,391
12,877
Operating profit (EBIT) before special items
4,672
6,496
Special items, costs
-
404
Profit for the period
3,287
4,386
Adjusted earnings for the period
3,340
4,747
Adjusted free cash flow
4,898
4,858
Ratios
Conversion ratio
41.0%
50.4%
Diluted adjusted earnings per share of DKK 1 for the last 12 months
76.9
60.5
Jens Bjørn Andersen, Group CEO: “As anticipated, the demand for transport services and freight rates declined during the first quarter of
2023. Nonetheless, we achieved good results and strong cash flow in all our business areas by providing good customer service and
efficiently managing our capacity. We expect that global trade volumes will improve gradually in the upcoming quarters, and we stand by
our full-year EBIT guidance for 2023.”
Outlook for 2023
We maintain our outlook for 2023 as announced in the 2022 Annual Report:
• Operating profit (EBIT) before special items is expected to be in the range of DKK 16,000-18,000 million.
• The effective tax rate is expected to be approximately 24.0%.
Share buyback
A separate company announcement about the launch of a new share buyback programme of up to DKK 4.5 billion is issued today. The
programme will be concluded no later than 24 July 2023.
Contacts
Investor Relations: Flemming Ole Nielsen, tel. +45 43 20 33 92, flemming.o.nielsen@dsv.com
Media: Christian Krogslund, tel. +45 43 20 41 28, christian.krogslund@dsv.com
Yours sincerely,
Page 2 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Interim Financial Report
Q1 2023
Keeping supply chains flowing in a world of change
Page 3 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Contents
Financial highlights ......................................................................................................................... 4
Management’s commentary ............................................................................................................ 5
Air & Sea ........................................................................................................................................... 9
Road ................................................................................................................................................ 12
Solutions ........................................................................................................................................ 14
Interim financial statements .......................................................................................................... 16
Notes to the interim financial statements .................................................................................... 21
Statement by the Board of Directors and the Executive Board .................................................. 24
Page 4 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Financial highlights
Q1 2023
Q1 2022
Results (DKKm)
Revenue
40,954
61,125
Gross profit
11,391
12,877
Operating profit before amortisation and depreciation (EBITDA) before special items
5,941
7,676
Operating profit (EBIT) before special items
4,672
6,496
Special items, costs
-
404
Net financial expenses
346
329
Profit for the period
3,287
4,386
Adjusted earnings for the period
3,340
4,747
Cash flows (DKKm)
Operating activities
6,121
5,301
Investing activities
(397)
49
Free cash flow
5,724
5,350
Adjusted free cash flow
4,898
4,858
Share buyback
(3,019)
(3,546)
Dividends distributed
(1,424)
(1,320)
Cash flow for the period
1,580
2,420
Gross investment in property, plant and equipment
408
148
Financial position (DKKm)
DSV A/S shareholders’ share of equity
70,503
75,621
Non-controlling interests
217
197
Equity total
70,720
75,818
Balance sheet total
154,772
168,308
Net working capital
3,126
9,051
Net interest-bearing debt
28,960
29,621
Invested capital
97,151
103,986
Financial ratios (%)
Gross margin
27.8
21.1
Operating margin
11.4
10.6
Conversion ratio
41.0
50.4
Effective tax rate
24.0
23.9
ROIC before tax
23.2
23.1
Return on equity
22.5
21.8
Solvency ratio
45.6
44.9
Gearing ratio
1.0
1.2
Share ratios
Earnings per share of DKK 1 for the last 12 months
73.8
57.6
Diluted adjusted earnings per share of DKK 1 for the last 12 months
76.9
60.5
Number of shares issued (’000)
219,000
240,000
Number of treasury shares (’000)
2,901
8,097
Average number of shares issued (’000) for the last 12 months
223,204
229,807
Average diluted number of shares (’000) for the last 12 months
225,714
234,733
Diluted number of shares (’000) at 31 March
218,280
235,507
Share price end of period (DKK)
1,326.5
1,300.5
Non-financials
Employees (FTE) at 31 March
74,613
77,358
For a definition of key figures and ratios, please refer to page 83 of the DSV Annual Report 2022.
Page 5 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Management’s commentary
The DSV Group had a good start to 2023, despite a competitive market with declining freight volumes.
Gross profit was down 11.4% and EBIT declined 28.2% compared to last year's extraordinarily strong
results. Owing to a significant reduction of net working capital, adjusted free cash flow for the quarter was
on level with last year.
As expected, global trade volumes were impacted by the general macroeconomic slowdown and
reduction of inventory levels during the first quarter of 2023. This led to lower freight volumes and
declining freight rates, especially for air and sea freight activities – however, this was compensated by
continued strong gross profit yields.
Results for the period
Revenue
For Q1 2023, revenue amounted to DKK 40,954 million,
compared to DKK 61,125 million last year. In constant
currencies, revenue declined 32.9% compared to same period
last year.
Revenue and growth by division compared to same period last
year are specified below:
(DKKm)
Q1 2023
Q1 2022
Growth*
Air & Sea
26,213
45,887
(43.0%)
Road
10,094
10,188
0.1%
Solutions
5,625
6,162
(8.1%)
Group and eliminations
(978)
(1,112)
Total
40,954
61,125
(32.9%)
* Growth in constant currencies
Air & Sea revenue declined in Q1 due to lower volumes and
lower average freight rates compared to the same period last
year. The freight markets have largely normalised following the
disruptions and capacity constraints witnessed in 2021 and H1
2022.
Road and Solutions also experienced reduced activity in Q1
2023. However, in Road, the decline in activity was offset by
increased average freight rates and higher fuel surcharges
compared to the same period last year.
Revenue by division, Q1 2023
Gross profit
For Q1 2023, gross profit amounted to DKK 11,391 million,
compared to DKK 12,877 million last year. In constant
currencies, gross profit declined 11.4% compared to same
period last year.
Gross profit and growth by division compared to same period
last year are specified below:
(DKKm)
Q1 2023
Q1 2022
Growth*
Air & Sea
7,027
8,637
(18.7%)
Road
1,976
1,938
3.2%
Solutions
2,285
2,322
(1.4%)
Group and eliminations
103
(20)
Total
11,391
12,877
(11.4%)
* Growth in constant currencies
Air & Sea’s lower gross profit was primarily due to reduced
activity. Gross profit per unit remained relatively strong in Q1
2023, supported by the division’s pricing discipline and focus on
higher-yielding cargo. However, as the normalisation of freight
markets continues, we expect gross profit yields to gradually
decline in the coming quarters.
Road achieved 3.2% gross profit growth for the quarter driven
by good performance on international business activity, while
Solutions reported gross profit levels similar to last year despite
challenging market conditions.
26,213
63%
10,094
24%
5,625
13%
Air & Sea
Road
Solutions
Ex. Group and
elimination
Page 6 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Gross profit declined in most regions, particularly in APAC
where lower export volumes from the region had a significant
impact. The Middle East was the only region to experience
gross profit growth in Q1 2023.
Gross profit by division, Q1 2023
The gross margin for the Group was 27.8% for Q1 2023,
compared to 21.1% for the same period last year. This
development was mainly due to the continued strong gross profit
yields in Air & Sea, despite the lower freight rates.
EBIT before special items
EBIT before special items amounted to DKK 4,672 million for Q1
2023, compared to DKK 6,496 million last year. In constant
currencies, EBIT before special items was down 28.2%.
The reduced EBIT was mainly due to lower gross profit in Air &
Sea and Solutions and is in line with our expectations for the full
year.
EBIT and growth by division compared to same period last year
are specified below:
(DKKm)
Q1 2023
Q1 2022
Growth*
Air & Sea
3,626
5,224
(30.7%)
Road
495
498
0.4%
Solutions
548
789
(31.0%)
Group and eliminations
3
(15)
Total
4,672
6,496
(28.2%)
* Growth in constant currencies
The conversion ratio for the Group reached 41.0% for Q1 2023,
compared to 50.4% for the same period last year. Across the
organisation, we have initiated relevant cost saving initiatives to
adjust capacity to the lower activity levels. The initiatives had
limited impact in Q1 2023, but are expected to gradually reduce
the cost base in the coming quarters; however, the effect will be
partly offset by cost inflation.
Most regions reported lower EBIT in Q1 2023 compared to the
same period last year. The Middle East performed well
achieving results on level with last year.
EBIT by division, Q1 2023
Growth 2022 - 2023
(DKKm)
Q1 2022
Currency
translation
Q1 2022 in
constant
currencies
Growth
Growth %*
Q1 2023
Revenue
61,125
(48)
61,077
(20,123)
(32.9%)
40,954
Gross profit
12,877
(19)
12,858
(1,467)
(11.4%)
11,391
EBIT before special items
6,496
7
6,503
(1,831)
(28.2%)
4,672
Gross margin (%)
21.1
27.8
Operating margin (%)
10.6
11.4
Conversion ratio (%)
50.4
41.0
* Growth in constant currencies
7,027
62%
1,976
18%
2,285
20%
Air & Sea
Road
Solutions
Ex. Group and
elimination
3,626
78%
495
10%
548
12%
Air & Sea
Road
Solutions
Ex. Group and
elimination
Page 7 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Financial items
Financial items totalled a net expense of DKK 346 million for Q1
2023, compared to a net expense of DKK 329 million for the
same period last year. This development was mainly due to an
increase in lease liabilities.
(DKKm)
Q1 2023
Q1 2022
Interest on lease liabilities
195
162
Other interest cost, net
100
112
Interest on pensions
8
2
Foreign exchange adjustments
43
53
Net financial expenses
346
329
Tax on profit for the period
The effective tax rate came to 24.0% for Q1 2023, compared to
23.9% for the same period last year.
Profit for the period
Profit for Q1 2023 was DKK 3,287 million, compared to DKK
4,386 million for the same period of 2022. The decline was
mainly due to the lower EBIT for the quarter; however, this was
partly offset by the absence of special items (restructuring
costs).
Diluted adjusted earnings per share
The rolling 12-month figure increased by 27.1% compared to
last year and came to DKK 76.9 per share (2022: DKK 60.5 per
share). The increase was driven by the high earnings levels over
the 12-month period and supported by a decline in number of
shares issued following the Group’s share buyback
programmes.
Cash flow
Cash flow statement – summary
(DKKm)
Q1 2023
Q1 2022
EBITDA before special items
5,941
7,676
Change in net working capital
1,989
(1,145)
Tax, interests, change in provisions, etc.
(1,677)
(833)
Special items
(132)
(397)
Cash flow from operating activities
6,121
5,301
Cash flow from investing activities
(397)
49
Free cash flow
5,724
5,350
Cash flow from financing activities
(4,144)
(2,930)
Cash flow for the period
1,580
2,420
Free cash flow
5,724
5,350
Special items
132
397
Repayment of lease liabilities
(958)
(889)
Adjusted free cash flow
4,898
4,858
Adjusted free cash flow for Q1 2023 was on level with same
period last year. The lower EBITDA and higher tax payments for
the period were offset by a significant improvement in NWC.
Cash flow from investing activities came to a cash outflow of
DKK 397 million for Q1 2023 and was impacted by installation of
equipment and automation technology in warehouses.
Cash flow from financing activities was a cash outflow of DKK
4,144 for Q1 2023 and primarily related to share buyback and
dividend.
Net working capital
On 31 March 2023, the Group’s net working capital was DKK
3,126 million, compared to DKK 9,051 million on 31 March 2022,
a decline of DKK 5,925 million. The significant decline was
driven by both lower activity and lower average freight rates,
which have led to a reduction in capital tied up in trade
receivables. Furthermore, we constantly monitor NWC and
optimise processes across the organisation.
Relative to estimated full-year revenue, funds tied up in NWC
were 1.9% on 31 March 2023 (31 March 2022: 3.7%).
Capital structure and finances
DSV A/S shareholders’ share of equity
DSV shareholders’ share of equity was DKK 70,503 million on
31 March 2023 (DKK 71,519 million on 31 December 2022). The
decrease was mainly driven by allocations to shareholders and
currency translation adjustments, offset by profit for the period.
On 31 March 2023, the Company’s portfolio of treasury shares
was 2,901,064 shares. On 26 April 2023, the portfolio of
treasury shares was 3,300,514 shares.
The solvency ratio excluding non-controlling interests was
45.6% on 31 March 2023 (31 March 2022: 44.9%).
Development in equity – summary
(DKKm)
Q1 2023
Q1 2022
Equity at 1 January
71,519
74,103
Profit for the period (attributable to
DSV shareholders)
3,266
4,360
Currency translation, foreign
enterprises
(899)
1,737
Allocated to shareholders
(4,443)
(4,866)
Sale of treasury shares
888
199
Other equity movements
172
88
Equity end of period
70,503
75,621
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 28,960 million on 31
March 2023, compared to DKK 29,621 million on 31 March
2022.
The gearing ratio (NIBD/EBITDA) was 1.0x on 31 March 2023,
compared to 1.2x last year. We maintain a financial gearing ratio
Page 8 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
target of below 2.0x. A new share buyback programme of DKK
4,500 million is initiated on 27 April 2023.
The weighted average duration of the company’s long-term
bonds and drawn credit facilities was 8.0 years on 31 March
2023.
Invested capital and ROIC
The invested capital including goodwill and customer
relationships amounted to DKK 97,151 million on 31 March
2023, compared to DKK 103,986 million on 31 March 2022. The
decrease was mainly due to lower net working capital.
Return on invested capital (including goodwill and customer
relationships) was 23.2% for the rolling 12-month period ended
31 March 2023. This was on level with the same period last
year.
Excluding goodwill and customer relationships, return on
invested capital was 97.8% for the rolling 12-month period
ended 31 March 2023, compared to 88.2% for the same period
last year.
Outlook
We maintain our outlook for 2023 as announced in the 2022
Annual Report:
• EBIT before special items is expected to be in the
range of DKK 16,000-18,000 million.
• The effective tax rate is expected to be approximately
24.0%.
The outlook assumes volume decline of up to 5% in the air and
sea market for the full year 2023. For Road and Solutions, we
expect markets will be flat or decline by low single digits in 2023.
The outlook assumes that currency exchange rates will remain
at current levels. As the geopolitical and macroeconomic
environment remains uncertain, unforeseen changes may
impact our financial results.
Page 9 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Air & Sea
The Air & Sea division operates a global network specialising in transportation of cargo by air and sea.
The division offers both conventional freight forwarding services and tailored project cargo solutions.
In a market with lower volumes and freight rates, the division saw a 18.7% decrease in gross profit and
30.7% decrease in EBIT before special items for Q1 2023 compared to the same period last year. This
development was in line with our expectations and reflects the gradual normalisation of global supply
chains after the pandemic.
Income statement
(DKKm)
Q1 2023
Q1 2022
Divisional revenue
26,213
45,887
Direct costs
19,186
37,250
Gross profit
7,027
8,637
Other external expenses
1,023
1,076
Staff costs
2,093
2,033
EBITDA before special items
3,911
5,528
Amortisation and depreciation
285
304
EBIT before special items
3,626
5,224
Key figures and ratios
Q1 2023
Q1 2022
Gross margin (%)
26.8
18.8
Operating margin (%)
13.8
11.4
Conversion ratio (%)
51.6
60.5
Number of full-time employees
22,270
23,700
Total invested capital (DKKm)
65,118
73,608
Net working capital (DKKm)
2,738
10,584
ROIC before tax (%)
27.5
26.4
Market development
Freight volume growth
DSV
Q1 2023
Air freight – tonnes
(20%)
Sea freight – TEUs
(12%)
In Q1 2023, the global air and sea freight markets were
characterised by lower demand, driven by the general
macroeconomic slowdown, reduction of inventory levels and
continued normalisation of consumer behaviour after the
pandemic (shift towards services and less material goods).
DSV’s air volumes declined approximately 20% in Q1 2023, with
the weakest development on export volumes from APAC. The
volume decline was most significant at the beginning of the
quarter, and momentum gradually improved towards the end.
Air freight rates dropped further during the quarter and
measured excluding fuel rates are now close to pre-pandemic
levels on most trade lanes.
DSV’s sea freight volumes were down 12% in Q1 2023. As for
air freight, momentum improved during the quarter.
The congestion which has impacted the market over the past
two years has largely disappeared. Furthermore, new container
vessels have entered the market and added additional capacity.
In combination with weaker demand, especially on the large
Trans-Pacific and Asia-Europe lanes, this has caused a further
drop in spot rates, and for sea freight the rate levels are now in
most cases close to pre-pandemic levels.
Page 10 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
For both air and sea freight, we estimate that DSV’s volume
development was slightly below the general market in Q1 2023
(based on preliminary market data). Under the current highly
competitive market conditions, the underperformance can partly
be attributed to our continued pricing discipline and focus on
higher-yielding cargo. Still, we will reinforce our commercial
efforts, and we maintain our long-term ambition of outgrowing
the general market.
Divisional revenue
The division’s revenue amounted to DKK 26,213 million for Q1
2023, compared to DKK 45,887 million for the same period last
year, and was down 43.0% in constant currencies.
The development was driven by the decline in volumes and
lower freight rates. The division’s average revenue per unit was
26% below last year for air and 37% below last year for sea.
In Q1 2023, DSV strengthened its position within the
semiconductor industry with the acquisition of two US-based
transport and logistics companies, S&M Moving Systems West
and Global Diversity Logistics. The acquisitions are expected to
add annual revenue of approximately USD 80 million, and
closing took place on 24 April 2023.
Gross profit
For Q1 2023, gross profit amounted to DKK 7,027 million,
compared to DKK 8,637 million for the same period last year. In
constant currencies, gross profit dropped 18.7%.
The decline in gross profit was most significant for air freight and
was mainly driven by lower freight volumes. Gross profit per unit
remained relatively strong in Q1 2023, supported by the
division’s focus on higher-yielding cargo. In a competitive
market, the division has maintained its focus on pricing
discipline and higher-margin business. Furthermore, in line with
the procurement strategy, the division has not taken long
positions by entering into long-term capacity commitments.
It is expected that gross profit yields will gradually decline in the
coming quarters, as the normalisation of freight markets
continues and contracts are renewed.
The division’s gross margin was 26.8% for Q1 2023, compared
to 18.8% last year. The development was mainly due to the
product mix and less pass-through revenue compared to last
year.
Geographically, APAC saw the weakest development in gross
profit during Q1, due to declining export volumes from the
region.
EBIT before special items
EBIT before special items came to DKK 3,626 million for Q1
2023, compared to DKK 5,224 million for the same period last
year. In constant currencies, EBIT declined 30.7%.
The decline in EBIT before special items was mainly due to the
reduced gross profit. Also on EBIT level, all geographical
regions were impacted by lower activity and lower earnings
compared to the same period last year.
The conversion ratio was 51.6% for Q1 2023, compared to
60.5% for the same period last year. Relevant cost reduction
initiatives have been initiated to adjust operations to the lower
activity levels, the effect of which will be visible in the coming
quarters.
Net working capital
The Air & Sea division’s net working capital came to DKK 2,738
million on 31 March 2023, compared to DKK 10,584 million on
31 March 2022. The development was mainly due to the lower
activity and lower freight rates. Furthermore, the division has
had focus on process optimisation after the integration of GIL.
Growth Air & Sea 2022 – 2023
(DKKm)
Q1 2022
Currency
translation
Q1 2022 in
constant
currencies
Growth
Growth %*
Q1 2023
Divisional revenue
45,887
79
45,966
(19,753)
(43.0%)
26,213
Gross profit
8,637
8
8,645
(1,618)
(18.7%)
7,027
EBIT before special items
5,224
9
5,233
(1,607)
(30.7%)
3,626
* Growth in constant currencies
Page 11 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Air & Sea freight performance
Air freight
(DKKm)
Q1 2023
Q1 2022
Divisional revenue
14,265
24,207
Direct costs
10,538
19,512
Gross profit
3,727
4,695
Gross margin (%)
26.1
19.4
Volume (tonnes)
327,712
410,911
Gross profit per unit (DKK)
11,373
11,426
Sea freight
(DKKm)
Q1 2023
Q1 2022
Divisional revenue
11,948
21,680
Direct costs
8,648
17,738
Gross profit
3,300
3,942
Gross margin (%)
27.6
18.2
Volume (TEUs)
588,207
667,653
Gross profit per unit (DKK)
5,610
5,904
Page 12 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Road
The Road division is among the market leaders in Europe and furthermore has operations in North
America, South Africa and in the Middle East. The division operates more than 23,000 trucks and offers
full load, part load and groupage services through a network of more than 250 terminals.
In Q1 2023, the Road division reported 3.2% growth in gross profit and a 0.4% increase in EBIT before
special items. This is considered satisfactory in a market characterised by declining activity.
Income statement
(DKKm)
Q1 2023
Q1 2022
Divisional revenue
10,094
10,188
Direct costs
8,118
8,250
Gross profit
1,976
1,938
Other external expenses
363
341
Staff costs
902
871
EBITDA before special items
711
726
Amortisation and depreciation
216
228
EBIT before special items
495
498
Key figures and ratios
Q1 2023
Q1 2022
Gross margin (%)
19.6
19.0
Operating margin (%)
4.9
4.9
Conversion ratio (%)
25.1
25.7
Number of full-time employees
16,291
17,001
Total invested capital (DKKm)
11,312
10,617
Net working capital (DKKm)
87
(1,130)
ROIC before tax (%)
18.6
19.7
Market development
We estimate that the market retracted by low single digits in Q1
2023, compared to the same period last year. This was driven
by softened activity across most industries.
The reduced activity has led to more available capacity in the
market. However, the market is still impacted by the changes
related to the EU Mobility Package and general cost inflation
causing rates to remain relatively high.
Divisional revenue
The division’s revenue amounted to DKK 10,094 million for Q1
2023, which was on level with last year.
The activity level was slightly down compared to last year,
mainly on domestic distribution activities, whereas demand for
international transports held up better. The lower activity was
compensated by higher freight rates and fuel surcharges
compared to Q1 2022.
The division generates more than 85% of its revenue in Europe
and saw good performance across most countries in the region.
Gross profit
For Q1 2023, gross profit totalled DKK 1,976 million, compared
to DKK 1,938 million for the same period last year. In constant
currencies, growth for the period was 3.2%.
Page 13 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
The division’s gross margin was 19.6% for Q1 2023, compared
to 19.0% for the same period in 2022. The development was
supported by better performance on international transports,
including international groupage shipments, which normally
carry a higher gross margin than domestic distribution activities.
EBIT before special items
EBIT before special items was DKK 495 million for Q1 2023,
which was on level with last year. The best performance was
achieved in Europe, where especially the division’s activities in
Germany saw good momentum.
The cost base for Q1 2023 was impacted by inflation, and the
division maintains its focus on productivity and cost
management. The conversion ratio came to 25.1% for Q1 2023,
compared to 25.7% for the same period last year.
Net working capital
The Road division’s net working capital was DKK 87 million on
31 March 2023 compared to a negative DKK 1,130 million on 31
March 2022. The development was impacted by an increase in
funds tied up in property projects.
Growth Road 2022 - 2023
(DKKm)
Q1 2022
Currency
translation
Q1 2022 in
constant
currencies
Growth
Growth %*
Q1 2023
Divisional revenue
10,188
(100)
10,088
6
0.1%
10,094
Gross profit
1,938
(24)
1,914
62
3.2%
1,976
EBIT before special items
498
(5)
493
2
0.4%
495
* Growth in constant currencies
Page 14 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Solutions
The Solutions division offers warehousing and logistics services globally and controls more than 500
logistics facilities. The service portfolio includes freight management, customs clearance, order
management and e-commerce solutions.
In Q1 2023, the Solutions division achieved an EBIT of DKK 548 million, compared to DKK 789 million for
the same period last year. The financial performance for the quarter was impacted by lower inbound and
outbound activity in the warehouses.
Income statement
(DKKm)
Q1 2023
Q1 2022
Divisional revenue
5,625
6,162
Direct costs
3,340
3,840
Gross profit
2,285
2,322
Other external expenses
453
423
Staff costs
588
525
EBITDA before special items
1,244
1,374
Amortisation and depreciation
696
585
EBIT before special items
548
789
Key figures and ratios
Q1 2023
Q1 2022
Gross margin (%)
40.6
37.7
Operating margin (%)
9.7
12.8
Conversion ratio (%)
24.0
34.0
Number of full-time employees
31,511
31,845
Total invested capital (DKKm)
23,660
22,280
Net working capital (DKKm)
1,741
1,553
ROIC before tax (%)
10.7
13.4
Market development
It is our estimate that the contract logistics market dropped by
low/mid-single digits in Q1 2023. The decline was mainly related
to companies within the high-tech, retail and e-commerce
sectors, although weakening activity levels were also noted in
other industries.
Divisional revenue
The division’s revenue was DKK 5,625 million for Q1 2023,
compared to DKK 6,162 million for the same period of 2022. In
constant currencies, revenue decreased 8.1%.
The division operates with a warehouse utilisation rate above
90%, which is slightly below same period last year. Furthermore,
following the general decline in demand, warehouse activity
(order lines handled) in Q1 2023 was also below last year’s
level.
Regionally, Americas achieved the best performance and grew
revenue in the first quarter of 2023.
Gross profit
For Q1 2023, gross profit was DKK 2,285 million, compared to
DKK 2,322 million for the same period of 2022. In constant
currencies, gross profit was down by 1.4%.
Page 15 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
The division’s gross margin was 40.6% for Q1 2023, compared
to 37.7% for the same period last year.
The gross margin was supported by high warehouse utilisation
rates, continued consolidation in large and efficient warehouses
and implementation of warehouse automation.
EBIT before special items
EBIT before special items was DKK 548 million for Q1 2023,
compared to DKK 789 million for the same period of 2022, and
was down by 31.0% in constant currencies.
On regional level, Americas achieved the best performance
compared to last year.
The conversion ratio was 24.0% for Q1 2023, compared to
34.0% for the same period last year. The cost base in Q1 2023
was impacted by general cost inflation and higher depreciations
on lease liabilities, due to investments in new warehouses.
Net working capital
The division’s net working capital came to DKK 1,741 million on
31 March 2023, compared to DKK 1,553 million on 31 March
2022.
Growth Solutions 2022 - 2023
(DKKm)
Q1 2022
Currency
translation
Q1 2022 in
constant
currencies
Growth
Growth %*
Q1 2023
Divisional revenue
6,162
(39)
6,123
(498)
(8.1%)
5,625
Gross profit
2,322
(5)
2,317
(32)
(1.4%)
2,285
EBIT before special items
789
5
794
(246)
(31.0%)
548
* Growth in constant currencies
Page 16 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Interim financial statements
Income statement
(DKKm)
Q1 2023
Q1 2022
Revenue
Direct costs
Gross profit
Other external expenses
Staff costs
Operating profit before amortisation and depreciation (EBITDA) before special
items
Amortisation and depreciation
Operating profit (EBIT) before special items
Special items, costs
Financial income
Financial expenses
Profit before tax
Tax on profit for the period
Profit for the period
Profit for the period attributable to:
Shareholders of DSV A/S
Non-controlling interests
Earnings per share:
Earnings per share of DKK 1 for the period
Diluted earnings per share of DKK 1 for the period
Page 17 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Statement of comprehensive income
(DKKm)
Q1 2023
Q1 2022
Profit for the period
Items that may be reclassified to the income statement when certain conditions are met:
Net foreign exchange differences recognised in OCI
(901 )
Fair value adjustments of hedging instruments
(2 )
Fair value adjustments of hedging instruments transferred to financial expenses
Tax on items reclassified to the income statement
(2 )
Items that will not be reclassified to the income statement:
Actuarial gains/(losses)
(84 )
Tax on items that will not be reclassified
(67 )
Other comprehensive income, net of tax
(969 )
Total comprehensive income
Total comprehensive income attributable to:
Shareholders of DSV A/S
Non-controlling interests
Total
Page 18 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Cash flow statement
(DKKm)
Q1 2023
Q1 2022
Operating profit before amortisation and depreciation (EBITDA) before special items
Adjustments:
Share-based payments
Change in provisions
(6 )
Change in working capital
(1,145 )
Special items
(132 )
(397 )
Interest received
Interest paid, lease liabilities
(195 )
(162 )
Interest paid, other
(198 )
(201 )
Income tax paid
(1,421 )
(823 )
Cash flow from operating activities
Purchase of intangible assets
(90 )
(87 )
Purchase of property, plant and equipment
(408 )
(148 )
Disposal of property, plant and equipment
Change in other financial assets
(12 )
Cash flow from investing activities
(397 )
Free cash flow
Proceeds from borrowings
Repayment of borrowings
(47 )
(2,065 )
Repayment of lease liabilities
(958 )
(889 )
Other financial liabilities incurred
(3 )
(86 )
Transactions with shareholders:
Dividends distributed to shareholders of DSV A/S
(1,424 )
(1,320 )
Purchase of treasury shares
(3,019 )
(3,546 )
Sale of treasury shares
Other transactions with shareholders
(5 )
Cash flow from financing activities
(4,144 )
(2,930 )
Cash flow for the period
Cash and cash equivalents 1 January
Cash flow for the period
Currency translation
(58 )
Cash and cash equivalents end of period
The cash flow statement cannot be directly derived from the balance sheet and income statement.
Statement of adjusted free cash flow
Q1 2023
Q1 2022
Free cash flow
5,724
5,350
Special items
132
397
Repayment of lease liabilities
(958)
(889)
Adjusted free cash flow
4,898
4,858
Page 19 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Balance sheet – Assets
(DKKm)
31.03.2023
31.12.2022
31.03.2022
Intangible assets
Right-of-use assets
Property, plant and equipment
Other receivables
Deferred tax assets
Total non-current assets
Trade receivables
Contract assets
Inventories
Other receivables
Cash and cash equivalents
Assets held for sale
Total current assets
Total assets
Balance sheet – Equity and liabilities
(DKKm)
31.03.2023
31.12.2022
31.03.2022
Share capital
Reserves
Retained earnings
DSV A/S shareholders’ share of equity
Non-controlling interests
Total equity
Lease liabilities
Borrowings
Pensions and other post-employment benefit plans
Provisions
Deferred tax liabilities
Total non-current liabilities
Lease liabilities
Borrowings
Trade payables
Accrued cost of services
Provisions
Other payables
Tax payables
Total current liabilities
Total liabilities
Total equity and liabilities
Page 20 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Statement of changes in equity at 31 March 2023
Attributable to shareholders of DSV A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Equity at 1 January 2023
Profit for the period
Other comprehensive income, net of tax
(899 )
(68 )
(967 )
(2 )
(969 )
Total comprehensive income for the period
(899 )
Transactions with shareholders and
non-controlling interests:
Share-based payments
Tax on share-based payments
Dividends distributed
(1,424 )
(1,424 )
(24 )
(1,448 )
Purchase of treasury shares
(3 )
(3,016 )
(3,019 )
(3,019 )
Sale of treasury shares
Dividends on treasury shares
Total equity transactions
(1 )
(3,314 )
(3,315 )
(24 )
(3,339 )
Equity at 31 March 2023
Statement of changes in equity at 31 March 2022
Attributable to shareholders of DSV A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total
equity
Equity at 1 January 2022
(356 )
Profit for the period
Other comprehensive income, net of tax
(1 )
Total comprehensive income for the period
Transactions with shareholders and
non-controlling interests:
Share-based payments
Tax on share-based payments
(231 )
(231 )
(231 )
Dividends distributed
(1,320 )
(1,320 )
(1,320 )
Purchase of treasury shares
(3,546 )
(3,546 )
(3,546 )
Sale of treasury shares
Dividends on treasury shares
Other adjustments
(3 )
Total equity transactions
(4,807 )
(4,807 )
(3 )
(4,810 )
Equity at 31 March 2022
Page 21 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Notes to the interim financial statement
1 Accounting policies
This Interim Financial Report has been prepared in accordance
with IAS 34 ‘Interim Financial Reporting’ as adopted by the
European Union and additional disclosure requirements for
listed companies under the Danish Financial Statements Act.
Accounting policies applied in preparing the Interim Financial
Report are consistent with those applied in preparing the DSV
Annual Report 2022. The DSV Annual Report 2022 provides a
full description of the Group’s accounting policies.
Changes in accounting policies
The DSV Group has implemented amendments to the
International Financial Reporting Standards (IFRS) effective as
of 1 January 2023 as adopted by the European Union.
None of the amendments implemented have had any material
impact on the Group’s financial statements, nor are they
expected to have so in the foreseeable future.
2 Management judgements and
estimates
In preparing the Interim Financial Statements, Management
makes various accounting estimates and judgements that affect
the reported amounts and disclosures in the statements and in
the notes to the financial statements. These are based on
professional experience, historical data and other factors
available to Management.
By nature, a degree of uncertainty is involved when carrying
out these judgements and estimates, hence actual results
may deviate from the assessments made at the reporting
date. Judgements and estimates are continuously evaluated,
and the effects of any changes are recognised in the
relevant period.
Primary financial statement items in which more significant
accounting estimates are applied are listed in Chapter 1 of the
Notes to the 2022 DSV Annual Report to which is referred.
3 New accounting regulations
The IASB has issued a number of new standards and
amendments not yet in effect or endorsed by the EU and
therefore not relevant for the preparation of the Q1 2023 Interim
Financial Report.
None of those are currently expected to carry any significant
impact on the financial statements of the DSV Group when
implemented.
4 Segment information
Air & Sea
Road
Solutions
Non-allocated items
and eliminations
Total
(DKKm)
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Condensed income statement
Revenue
26,062
45,638
9,409
9,473
5,429
5,973
54
41
40,954
61,125
Intercompany revenue
151
249
685
715
196
189
(1,032)
(1,153)
-
-
Divisional revenue
26,213
45,887
10,094
10,188
5,625
6,162
(978)
(1,112)
40,954
61,125
Direct costs
19,186
37,250
8,118
8,250
3,340
3,840
(1,081)
(1,092)
29,563
48,248
Gross profit
7,027
8,637
1,976
1,938
2,285
2,322
103
(20)
11,391
12,877
Other external expenses
1,023
1,076
363
341
453
423
(499)
(551)
1,340
1,289
Staff costs
2,093
2,033
902
871
588
525
527
483
4,110
3,912
Operating profit before amortisation,
depreciation (EBITDA) before special
items
3,911
5,528
711
726
1,244
1,374
75
48
5,941
7,676
Amortisation and depreciation
285
304
216
228
696
585
72
63
1,269
1,180
Operating profit (EBIT) before special
items
3,626
5,224
495
498
548
789
3
(15)
4,672
6,496
Condensed balance sheet
Total assets
89,919
101,346
25,147
24,311
29,599
28,987
10,107
13,664
154,772
168,308
Total liabilities
62,276
79,796
18,233
18,247
23,519
23,198
(19,976)
(28,751)
84,052
92,490
Page 22 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
5 Revenue
Sale of services by geographical segment:
EMEA
Americas
APAC
Total
(DKKm)
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Air services
5,840
7,394
4,444
7,755
3,981
9,058
14,265
24,207
Sea services
5,871
11,145
4,016
6,787
2,061
3,749
11,948
21,681
Road services
9,190
9,181
904
1,007
-
-
10,094
10,188
Solutions services
3,644
4,322
1,147
940
834
900
5,625
6,162
Total
24,545
32,042
10,511
16,489
6,876
13,707
41,932
62,238
Non-allocated items and eliminations
(978)
(1,113)
Total revenue
40,954
61,125
6 Financial instruments – fair value hierarchy
DSV has no financial instruments measured at fair value based on level 1 input or level 3 input. The fair value of derivative financial
instruments is determined based on level 2 input. The fair value of issued bonds measured at amortised cost is within level 1 of the fair
value hierarchy.
Other financial instruments are considered to have a carrying value equal to fair value.
(DKKm)
31 March 2023
31 December 2022
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets:
Currency derivatives
74
74
93
93
Trade receivables
26,570
26,570
32,387
32,387
Other receivables
7,588
7,588
6,640
6,640
Cash and cash equivalents
11,682
11,682
10,160
10,160
Financial assets measured at amortised costs
45,840
45,840
49,187
49,187
Issued bonds measured at amortised cost
21,413
17,337
21,377
16,615
Overdraft and credit facilities
1,235
1,235
829
829
Trade payables
13,514
13,514
14,992
14,992
Financial liabilities measured at amortised cost
36,162
32,086
37,198
32,436
Page 23 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
7 Share options schemes
DSV has launched a new 2023 share-based payment incentive
scheme with the purpose of motivating and retaining key
employees across the organisation and aligning the interests of
these with our shareholders. Share options are awarded at all
levels in the organisation, e.g. from team leads, specialists,
branch managers, country managers, up to Executive
Management.
Share options are granted pursuant to the latest DSV
Remuneration Policy as adopted at the Extraordinary General
Meeting held on 8 September 2021.
The share options granted are equity-settled and can be
exercised by cash purchase of shares only during the exercise
period. The obligation relating to the share options scheme is
covered by the Company’s treasury shares.
The exercise price of share options granted amounts to DKK
1,485 and has been determined based on the average quoted
market price of the DSV share for the last five trading days
leading up to the date of grant at 31 March 2023, plus a strike
premium of 13.8%.
The fair value of the 2023 share options granted amounts to
DKK 368.1 million and has been determined based on a Black &
Scholes valuation model.
Key assumptions applied in the valuation are:
Vesting period
01.04.2023-31-03.2026
Exercise period
01.04.2026-31-03.2028
Number of employees included
2,516
Number of options granted:
Executive Board
198,750
Key employees
2,465,250
Total
2,664,000
Value assumptions:
Exercise price
1,485
Volatility (%)
18
Risk-free interest rate (%)
3.39
Expected dividend (%)
0.80
Expected remaining life (years)
3.5
Page 24 of 24 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1030 – 27 April 2023
Statement by the Board of Directors
and the Executive Board
The Board of Directors and the Executive Board have today considered and adopted the Interim Financial Report of DSV A/S for the
three-month period ended 31 March 2023.
The Interim Financial Report, which has not been audited or reviewed by the Company auditor, has been prepared in accordance
with IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union and additional requirements in accordance with the
Danish Financial Statements Act.
In our opinion, the Interim Financial Statements give a true and fair view of the Group’s assets, equity, liabilities and financial
position on 31 March 2023 and of the results of the Group’s activities and the cash flow for the three-month period ended 31 March
2023.
We also find that the Management’s commentary provides a fair statement of developments in the activities and financial situation of
the Group, financial results for the period, the general financial position of the Group and a description of the major risks and
elements of uncertainty faced by the Group. Aside from the disclosures in the Interim Financial Report, no changes in the Group’s
most significant risks and uncertainties have occurred relative to the disclosures in the Annual Report for 2022.
Executive Board:
Board of Directors: