DSV Group
We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation.
Our reach is global, yet our presence is local and close to our customers. Approximately 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
H1 2023
Company Announcement No. 1046
25 July 2023
Selected key figures and ratios for the period 1 January - 30 June 2023
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Key figures (DKKm)
Revenue
37,727
62,749
78,681
123,874
Gross profit
11,331
14,078
22,722
26,955
Operating profit (EBIT) before special items
4,705
7,453
9,377
13,949
Special items, costs
-
257
-
661
Profit for the period
3,375
5,070
6,662
9,456
Adjusted earnings for the period
3,448
5,333
6,788
10,080
Adjusted free cash flow
8,137
10,688
Ratios
Conversion ratio
41.5%
52.9%
41.3%
51.7%
Diluted adjusted earnings per share of DKK 1 for the last 12
months
69.8
71.8
Jens Bjørn Andersen, Group CEO: “In Q2 2023, we delivered a solid set of results across all three divisions and a strong cash flow. The
demand for transport and logistics services is soft, and during the first half of 2023 we have demonstrated our ability to adapt to changing
market conditions. The market development outlook is still uncertain, but we see signs of stabilisation and we anticipate gradual
improvement in global trade volumes over the next quarters.”
Outlook for 2023
As announced today in Company Announcement no. 1045, we upgrade the full-year outlook for 2023 as follows:
• EBIT before special items is expected to be in the range of DKK 17,000-18,500 million (previously DKK 16,000-18,000 million).
The upgrade is based on DSV’s performance in H1 2023 and the assumption of a gradual improvement in global trade volumes in H2 2023.
As the global logistics markets continue to normalise, we expect a further decline in gross profit yields for air and sea compared to the H1-
23 levels.
Share buyback
A separate company announcement about the launch of a new share buyback programme of up to DKK 4.0 billion is issued today. The
programme will be concluded no later than 23 October 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 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Interim Financial Report
H1 2023
Keeping supply chains flowing in a world of change
Page 3 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 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 .................................................. 23
Page 4 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Financial highlights
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Results (DKKm)
Revenue
37,727
62,749
78,681
123,874
Gross profit
11,331
14,078
22,722
26,955
Operating profit before amortisation and depreciation (EBITDA)
before special items
6,022
8,701
11,963
16,377
Operating profit (EBIT) before special items
4,705
7,453
9,377
13,949
Special items, costs
-
257
-
661
Net financial expenses
172
516
518
845
Profit for the period
3,375
5,070
6,662
9,456
Adjusted earnings for the period
3,448
5,333
6,788
10,080
Cash flows (DKKm)
Operating activities
10,749
12,335
Investing activities
(1,494)
(341)
Free cash flow
9,255
11,994
Adjusted free cash flow
8,137
10,688
Share buyback
(7,230)
(8,316)
Dividends distributed
(1,424)
(1,320)
Cash flow for the period
(217)
2,163
Gross investment in property, plant and equipment
997
347
Financial position (DKKm)
DSV A/S shareholders’ share of equity
70,080
78,473
Non-controlling interests
236
179
Equity total
70,316
78,652
Balance sheet total
151,540
171,490
Net working capital
2,651
8,846
Net interest-bearing debt
30,350
27,868
Invested capital
97,019
105,596
Financial ratios (%)
Gross margin
30.0
22.4
28.9
21.8
Operating margin
12.5
11.9
11.9
11.3
Conversion ratio
41.5
52.9
41.3
51.7
Effective tax rate
25.5
24.1
24.8
24.0
ROIC before tax
20.4
27.2
Return on equity
19.9
25.5
Solvency ratio
46.2
45.8
Gearing ratio
1.2
1.0
Share ratios
Earnings per share of DKK 1 for the last 12 months
67.4
67.9
Diluted adjusted earnings per share of DKK 1 for the last 12 months
69.8
71.8
Number of shares issued (’000)
219,000
234,000
Number of treasury shares (’000)
5,262
6,327
Average number of shares issued (’000) for the last 12 months
219,417
232,048
Average diluted number of shares (’000) for the last 12 months
221,520
236,147
Diluted number of shares (’000) at 30 June
215,528
230,140
Share price end of period (DKK)
1,433.0
991.2
Non-financial data
Employees (FTE) at 30 June
74,178
76,071
For definition of key figures and ratios, please refer to page 83 of the DSV Annual Report 2022.
For definition of non-financial data, please refer to DSV Sustainability Report 2022.
Page 5 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Management’s commentary
In a soft market environment, the DSV Group achieved good financial results for the first half of 2023.
Gross profit was down 14% and EBIT declined 32% compared to last year's extraordinarily strong results
(both in constant currencies). Supported by a reduction of net working capital, the Group achieved a
strong cash flow for the period.
In the first half of 2023, global trade volumes were in decline – most significantly for air freight – and the
freight markets have normalised rapidly after recent years’ disruptions. By maintaining focus on cost
control and strong pricing discipline, we achieved a good financial performance across all business areas.
Results for the period
Revenue
For H1 2023, revenue amounted to DKK 78,681 million,
compared to DKK 123,874 million last year. In constant
currencies, revenue declined 35.4% compared to the same
period last year. In Q2 2023, revenue declined 37.8%.
Revenue and growth by division compared to the same period
last year are specified below:
(DKKm)
Q2 2023
Growth*
YTD
2023
Growth*
Air & Sea
22,993
(49.6%)
49,206
(46.3%)
Road
9,650
(8.9%)
19,744
(4.5%)
Solutions
5,898
(0.9%)
11,523
(4.6%)
Group and
eliminations
(814)
(1,792)
Total
37,727
(37.8%)
78,681
(35.4%)
* Growth in constant currencies
In H1 2023, Air & Sea saw a decline in revenue due to both
lower freight rates and lower volumes compared to the same
period last year. While ocean freight volumes showed signs of
improvement during Q2 2023, the air freight market remained
weak. From a service perspective, the global freight markets
have largely recovered from the disruptions and capacity
constraints we saw in recent years.
Road and Solutions also reported reduced activity in H1 2023,
leading to lower revenue. Still, the two divisions were less
impacted by the economic slowdown than the Air & Sea division.
Revenue by division, H1 2023
Gross profit
For H1 2023, gross profit amounted to DKK 22,722 million,
compared to DKK 26,955 million last year. In constant
currencies, gross profit declined 14.2% compared to the same
period last year. For Q2 2023, gross profit declined 16.9%.
Gross profit and growth by division compared to the same
period last year are specified below:
(DKKm)
Q2 2023
Growth*
YTD
2023
Growth*
Air & Sea
6,754
(27.1%)
13,781
(23.0%)
Road
2,023
(0.3%)
3,999
1.4%
Solutions
2,373
6.0%
4,658
2.2%
Group and
eliminations
181
284
Total
11,331
(16.9%)
22,722
(14.2%)
* Growth in constant currencies
The low gross profit of Air & Sea in the first half year was due to
lower freight volumes and continued normalisation of gross profit
yields, compared to the record-high levels achieved in 2022.
The division maintains its focus on pricing discipline and high-
yielding cargo, but as the normalisation of freight markets
continues, it is expected that the yields will decline further.
During H1 2023, both Road and Solutions achieved growth in
gross profit despite challenging markets. For Q2 2023, Road
reported gross profit levels similar to last year. Solutions
achieved 6% gross profit growth for the quarter driven by high
Page 6 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
warehouse utilisation rates and continued focus on improved
productivity.
In H1 2023, gross profit declined across most regions, most
significantly in APAC. The Middle East, on the other hand, stood
out as the only region to achieve gross profit growth in the
period.
Gross profit by division, H1 2023
The gross margin for the Group was 28.9% for H1 2023,
compared to 21.8% for the same period last year. This
development was mainly due to the significant decline in air and
sea freight rates, leading to a lower pass-through element of
revenue.
EBIT before special items
EBIT before special items amounted to DKK 9,377 million for H1
2023, compared to DKK 13,949 million last year. In constant
currencies, EBIT before special items was down 31.6%.
For Q2 2023, EBIT before special items declined 34.8%. It
should be noted that the unprecedented pandemic-related
demand for logistics services distorts the comparison with the
previous year and that Q2 2022 was the peak of earnings in
2022.
EBIT and growth by division compared to same period last year
are specified below:
(DKKm)
Q2 2023
Growth*
YTD
2023
Growth*
Air & Sea
3,574
(40.1%)
7,200
(35.7%)
Road
525
(5.6%)
1,020
(2.8%)
Solutions
613
(15.0%)
1,161
(23.4%)
Group and
eliminations
(7)
(4)
Total
4,705
(34.8%)
9,377
(31.6%)
* Growth in constant currencies
The reduced EBIT was mainly due to lower gross profit in Air &
Sea. This development is in line with our expectations.
The conversion ratio for the Group reached 41.3% for H1 2023,
compared to 51.7% for the same period last year. As usual in
periods with declining activity, we have initiated relevant cost
saving initiatives to adjust capacity, especially in the Air & Sea
division. The effect of the initiatives has partly been offset by
cost inflation.
In the first half of 2023, most regions recorded lower EBIT
compared to the same period last year; the Middle East being
the only region to record growth in EBIT for the period.
EBIT by division, H1 2023
Page 7 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Growth 2022 – 2023
(DKKm)
Q2 2022
Currency
translation
Q2 2022 in
constant
currencies
Growth
Growth %*
Q2 2023
Revenue
62,749
(2,095)
60,654
(22,927)
(37.8%)
37,727
Gross profit
14,078
(446)
13,632
(2,301)
(16.9%)
11,331
EBIT before special items
7,453
(241)
7,212
(2,507)
(34.8%)
4,705
Gross margin (%)
22.4
30.0
Operating margin (%)
11.9
12.5
Conversion ratio (%)
52.9
41.5
(DKKm)
YTD 2022
Currency
translation
YTD 2022 in
constant
currencies
Growth
Growth %*
YTD 2023
Revenue
123,874
(2,143)
121,731
(43,050)
(35.4%)
78,681
Gross profit
26,955
(465)
26,490
(3,768)
(14.2%)
22,722
EBIT before special items
13,949
(233)
13,716
(4,339)
(31.6%)
9,377
Gross margin (%)
21.8
28.9
Operating margin (%)
11.3
11.9
Conversion ratio (%)
51.7
41.3
* Growth in constant currencies
Financial items
Financial items totalled a net expense of DKK 518 million for H1
2023, compared to a net expense of DKK 845 million for the
same period last year. The lower net costs compared to last
year were mainly related to foreign exchange gains on
intercompany loans driven by the decline in USD and CNY
against DKK.
(DKKm)
YTD 2023
YTD 2022
Interest on lease liabilities
400
337
Other interest cost, net
162
205
Interest on pensions
18
10
Foreign exchange adjustments
(62)
293
Net financial expenses
518
845
Tax on profit for the period
The effective tax rate came to 24.8% for H1 2023, compared to
24.0% for the same period last year. The increase was primarily
driven by higher withholding taxes on dividends.
Profit for the period
Profit for H1 2023 was DKK 6,662 million, compared to DKK
9,456 million for the same period of 2022. The decline was
mainly due to the lower EBIT for the period, although this was
partly offset by the absence of special items in 2023 (no
restructuring costs related to integrations).
Diluted adjusted earnings per share
The rolling 12-month figure decreased by 2.8% compared to last
year and came to DKK 69.8 per share (2022: DKK 71.8 per
share). The decline in earnings over the 12-month period was
partly offset by a lower number of outstanding shares following
the Group’s share buy-back programmes.
Cash flow
Cash flow statement – summary
(DKKm)
YTD 2023
YTD 2022
EBITDA before special items
11,963
16,377
Change in net working capital
2,540
(957)
Tax, interests, change in provisions, etc.
(3,491)
(2,577)
Special items, paid
(263)
(508)
Cash flow from operating activities
10,749
12,335
Cash flow from investing activities
(1,494)
(341)
Free cash flow
9,255
11,994
Cash flow from financing activities
(9,472)
(9,831)
Cash flow for the period
(217)
2,163
Free cash flow
9,255
11,994
Acquisition of subsidiaries (reversed)
550
-
Special items (reversed)
263
508
Repayment of lease liabilities
(1,931)
(1,814)
Adjusted free cash flow
8,137
10,688
Adjusted free cash flow for H1 2023 was 23.9% lower than last
year. The decline was primarily attributable to lower EBITDA
and higher tax payments but was offset by a net cash inflow
from NWC.
Page 8 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Cash flow from investing activities came to a cash outflow of
DKK 1,494 million for H1 2023 and was impacted by the
acquisition of two US-based transport and logistics companies
as announced in the Q1 2023 Interim Financial Report.
Additionally, further investments have been made in warehouse
equipment and automation technology.
Cash flow from financing activities was a cash outflow of DKK
9,472 for H1 2023 and was primarily related to share buyback
and dividend.
Net working capital
On 30 June 2023, the Group’s net working capital was DKK
2,651 million, compared to DKK 8,846 million on 30 June 2022,
a decline of DKK 6,195 million.
The decline in net working capital (NWC) can be attributed to a
combination of reduced activity and lower average freight rates,
but is also the result of continued optimisation of processes after
the Agility GIL acquisition. The largest cash inflow came in the
first quarter of the year.
Relative to estimated full-year revenue, funds tied up in NWC
were 1.8% on 30 June 2023 (30 June 2022: 3.6%).
Capital structure and finances
DSV A/S shareholders’ share of equity
DSV shareholders’ share of equity was DKK 70,080 million on
30 June 2023 (DKK 71,519 million on 31 December 2022). The
slight decrease was mainly driven by allocations to shareholders
and currency translation adjustments, offset by profit for the
period.
On 30 June 2023, the Company’s portfolio of treasury shares
was 5,262,428 shares. On 24 July 2023, the portfolio of treasury
shares was 5,797,020 shares.
The solvency ratio excluding non-controlling interests was
46.2% on 30 June 2023 (30 June 2022: 45.8%).
Development in equity – summary
(DKKm)
YTD 2023
YTD 2022
Equity at 1 January
71,519
74,103
Profit for the period (attributable to
DSV shareholders)
6,628
9,410
Currency translation, foreign
enterprises
(1,252)
4,115
Allocated to shareholders
(8,654)
(9,636)
Sale of treasury shares
1,339
314
Other equity movements
500
167
Equity end of period
70,080
78,473
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 30,350 million on 30
June 2023, compared to DKK 27,868 million on 30 June 2022.
The gearing ratio was 1.2x on 30 June 2023, compared to 1.0x
last year. We maintain a financial gearing ratio target
(NIBD/EBITDA) of below 2.0x. A new share buyback
programme of DKK 4,000 million is initiated on 25 July 2023.
The weighted average duration of the Company’s long-term
bonds and drawn credit facilities was 7.8 years on 30 June
2023.
Invested capital and ROIC
The invested capital including goodwill and customer
relationships amounted to DKK 97,019 million on 30 June 2023,
compared to DKK 105,596 million on 30 June 2022. The
decrease was mainly due to lower net working capital and
currency impact on goodwill.
Return on invested capital (including goodwill and customer
relationships) was 20.4% for the rolling 12-month period ended
30 June 2023, compared to 27.2% for the same period last year.
The decrease was attributable to the decline in earnings and the
fact that the goodwill from the GIL acquisition did not have full
impact on the ROIC calculation last year.
Excluding goodwill and customer relationships, return on
invested capital was 87.2% for the rolling 12-month period
ended 30 June 2023, compared to 103.3% for the same period
last year.
Outlook
Based on the performance in the first six months of 2023 and
our expectations for the second half of 2023, we upgrade the
full-year outlook for 2023 as follows:
• EBIT before special items is expected to be in the
range of DKK 17,000-18,500 million (previously DKK
16,000-18,000 million).
• The effective tax rate is expected to be approximately
25.0% (previously 24.0%).
We assume a gradual recovery in global trade volumes and that
there will be no significant worsening of the global economic
environment in the second half of 2023.
As the global logistics markets continue to normalise, we expect
a further decline in gross profit yields for air and sea compared
to the H1-23 levels.
For Road and Solutions, we expect that markets will be flat or
decline slightly in H2 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 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 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 characterised by reduced volumes and declining freight rates, the division saw a 23.0%
decrease in gross profit and 35.7% decrease in EBIT before special items for the first six months of 2023
(both in constant currencies). This development reflects a decline in the demand for transport services,
driven by the general economic slowdown and, furthermore, a normalisation of global supply chains
following the pandemic.
Income statement
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Divisional revenue
22,993
47,282
49,206
93,169
Direct costs
16,239
37,707
35,425
74,957
Gross profit
6,754
9,575
13,781
18,212
Other external expenses
883
1,028
1,906
2,104
Staff costs
2,005
2,082
4,098
4,115
EBITDA before special items
3,866
6,465
7,777
11,993
Amortisation and depreciation
292
302
577
606
EBIT before special items
3,574
6,163
7,200
11,387
Key figures and ratios
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Gross margin (%)
29.4
20.3
28.0
19.5
Operating margin (%)
15.5
13.0
14.6
12.2
Conversion ratio (%)
52.9
64.4
52.2
62.5
Number of full-time employees
21,695
23,292
Total invested capital (DKKm)
64,163
74,497
Net working capital (DKKm)
1,080
10,067
ROIC before tax (%)
23.8
31.3
Market development
DSV volume growth
Q2 2023
YTD 2023
Air freight – tonnes
(21%)
(21%)
Sea freight – TEUs
(7%)
(9%)
During the first half of 2023, the global air and sea freight
markets were characterised by a decline in demand, largely
driven by the macroeconomic slowdown and the normalisation
of consumer behaviour post the pandemic. Furthermore, there is
an ongoing reduction of inventory across several sectors.
DSV’s air volumes declined approximately 21% in H1 2023, with
the weakest development on export volumes from APAC (e.g.,
retail and consumer electronics). Besides the general decline in
demand, the air freight market was also impacted by the
normalisation of supply chains, with some volumes shifting from
air and back to sea freight.
Owing to the combination of lower demand and more available
belly-space in passenger planes, air freight rates dropped
further during Q2 2023. Measured excluding fuel cost, the rates
are now close to pre-pandemic levels on most trade lanes.
DSV’s sea freight volumes were down 9% in H1 2023. While
growth rates were still in negative territory, there was a gradual
improvement in volumes during Q2 compared to Q1 2023.
Page 10 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
With the combination of lower demand, lower congestion and
new capacity added, sea freight rates are largely back at pre-
pandemic levels on all major trade lanes.
In H1 2023, we estimate that DSV's volume development for
both air and sea freight was slightly below the general market. In
a highly competitive market, this underperformance can be
attributed to our pricing discipline and focus on high-yielding
cargo. However, we are reinforcing our commercial efforts and
maintain our ambition of outgrowing the general market.
Divisional revenue
The division’s revenue amounted to DKK 49,206 million for H1
2023, compared to DKK 93,169 million for the same period last
year, and was down 46.3% in constant currencies.
For Q2 2023, revenue amounted to DKK 22,993 million,
compared to DKK 47,282 million for the same period last year.
In constant currencies, revenue for the quarter was down
49.6%.
The development was driven by the decline in volumes and
lower freight rates. The division’s average revenue per unit for
H1 2023 was 32% below last year for air and 43% below last
year for sea.
In Q2 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 closing took place on 24
April 2023, and the integration is progressing as planned.
Gross profit
For the first six months of 2023, gross profit amounted to DKK
13,781 million, compared to DKK 18,212 million for the same
period last year. In constant currencies, gross profit was down
23.0%.
For Q2 2023, gross profit amounted to DKK 6,754 million,
compared to DKK 9,575 million for the same period last year.
In constant currencies, gross profit for the quarter was down
27.1%.
Besides the lower volumes, the decline in gross profit was due
to lower gross profit yields compared to the record-high levels
last year.
In a competitive market, the division has maintained its focus on
pricing discipline and high-margin business. Furthermore, in line
with the procurement strategy, the division has not taken long
positions by entering long-term capacity commitments.
Gross profit yields are expected to gradually decline in the
coming quarters as the normalisation of freight markets continue
and contracts are renewed.
The division’s gross margin was 28.0% for H1 2023, compared
to 19.5% last year. The development was mainly due to the
product mix and lower pass-through revenue compared to last
year.
Geographically, APAC saw the weakest development in gross
profit during H1 due to declining export volumes from the
region.
EBIT before special items
EBIT before special items came to DKK 7,200 million for the first
six months of 2023, compared to DKK 11,387 million for the
same period last year. In constant currencies, EBIT declined
35.7%.
For Q2 2023, EBIT before special items amounted to DKK 3,574
million, compared to DKK 6,163 million for the same period last
year. In constant currencies, EBIT before special items for the
quarter was down 40.1%.
The decline in EBIT before special items can be attributed to the
reduction in gross profit, which was only partly offset by a lower
cost base. Since Q3 2022, several cost reduction initiatives have
been implemented, reducing both staff costs and other external
costs.
The conversion ratio was 52.2% for H1 2023, compared to the
extraordinarily high ratio of 62.5% for the same period last year.
Net working capital
The Air & Sea division’s net working capital came to DKK 1,080
million on 30 June 2023, compared to DKK 10,067 million on 30
June 2022. The significant reduction was due to lower revenue
and improved NWC processes.
Page 11 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Growth Air & Sea 2022 - 2023
(DKKm)
Q2 2022
Currency
translation
Q2 2022 in
constant
currencies
Growth
Growth %*
Q2 2023
Divisional revenue
47,282
(1,633)
45,649
(22,656)
(49.6%)
22,993
Gross profit
9,575
(315)
9,260
(2,506)
(27.1%)
6,754
EBIT before special items
6,163
(199)
5,964
(2,390)
(40.1%)
3,574
(DKKm)
YTD 2022
Currency
translation
YTD 2022 in
constant
currencies
Growth
Growth %*
YTD 2023
Divisional revenue
93,169
(1,554)
91,615
(42,409)
(46.3%)
49,206
Gross profit
18,212
(308)
17,904
(4,123)
(23.0%)
13,781
EBIT before special items
11,387
(190)
11,197
(3,997)
(35.7%)
7,200
* Growth in constant currencies
Air & Sea freight performance
Air freight
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Divisional revenue
12,166
25,032
26,431
49,239
Direct costs
8,592
19,980
19,130
39,492
Gross profit
3,574
5,052
7,301
9,747
Gross margin (%)
29.4
20.2
27.6
19.8
Volume (tonnes)
316,456
402,594
644,168
813,505
Gross profit per unit (DKK)
11,294
12,549
11,334
11,981
Sea freight
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Divisional revenue
10,827
22,250
22,775
43,930
Direct costs
7,647
17,727
16,295
35,465
Gross profit
3,180
4,523
6,480
8,465
Gross margin (%)
29.4
20.3
28.5
19.3
Volume (TEUs)
641,924
690,621
1,230,131
1,358,274
Gross profit per unit (DKK)
4,954
6,549
5,268
6,232
Page 12 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 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.
For the first six months of 2023, the Road division reported 1.4% growth in gross profit and a 2.8%
decrease in EBIT before special items (both in constant currencies). In a soft market with lower activity
across most sectors, the division performed well and gained market share.
Income statement
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Divisional revenue
9,650
10,835
19,744
21,023
Direct costs
7,627
8,761
15,745
17,011
Gross profit
2,023
2,074
3,999
4,012
Other external expenses
367
373
730
714
Staff costs
918
904
1,820
1,775
EBITDA before special items
738
797
1,449
1,523
Amortisation and depreciation
213
231
429
459
EBIT before special items
525
566
1,020
1,064
Key figures and ratios
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Gross margin (%)
21.0
19.1
20.3
19.1
Operating margin (%)
5.4
5.2
5.2
5.1
Conversion ratio (%)
26.0
27.3
25.5
26.5
Number of full-time employees
16,234
16,484
Total invested capital (DKKm)
11,529
10,923
Net working capital (DKKm)
439
(1,032)
ROIC before tax (%)
17.8
20.1
Market development
We estimate that market volumes declined by mid single digits
in H1 2023, compared to the same period last year. This was
driven by lower activity and destocking across several
industries.
The reduced activity has gradually led to more available
capacity in the market. However, the market is still impacted by
the changes related to the EU Mobility Package (implemented in
2022) and general cost inflation.
Divisional revenue
The division’s revenue amounted to DKK 19,744 million for the
first six months of 2023, compared to DKK 21,023 million for the
same period last year. In constant currencies, revenue for the
period declined 4.5%.
For Q2 2023, revenue amounted to DKK 9,650 million,
compared to DKK 10,835 million for the same period last year.
In constant currencies, revenue for the quarter was down 8.9%.
The activity levels were slightly down compared to last year, but
it is estimated that the division performed better than the general
market, especially on international transports. Development of
DSV’s European groupage network is a strategic focus area for
the division.
Page 13 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
The lower activity was compensated by higher freight rates and
fuel surcharges, especially compared to Q1 2022 levels.
Gross profit
For the first six months of 2023, gross profit totalled DKK 3,999
million, compared to DKK 4,012 million for the same period last
year. In constant currencies, growth for the period was 1.4%.
For Q2 2023, gross profit amounted to DKK 2,023 million,
compared to DKK 2,074 million for the same period last year.
In constant currencies, gross profit for the quarter was down
0.3%.
The division’s gross margin was 20.3% for H1 2023, compared
to 19.1% for the same period in 2022. The increase 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 1,020 million for the first six
months, compared to DKK 1,064 million for the same period last
year. In constant currencies, EBIT before special items for the
period declined 2.8%.
For Q2 2023, EBIT before special items amounted to DKK 525
million, compared to DKK 566 million for the same period last
year. In constant currencies, EBIT before special items for the
quarter was down 5.6%.
The best EBIT performance was achieved in Germany and the
Netherlands.
The conversion ratio came to 25.5% for H1 2023, compared to
26.5% for the same period last year. The cost base for H1 2023
was impacted by inflation, which led to a slight decline in
conversion ratio, and the division maintains its focus on
productivity and cost management.
Net working capital
The Road division’s net working capital was DKK 439 million on
30 June 2023, compared to a negative DKK 1,032 million on 30
June 2022. The development was due to an increase in funds
tied up in property projects.
Growth Road 2022 - 2023
(DKKm)
Q2 2022
Currency
translation
Q2 2022 in
constant
currencies
Growth
Growth %*
Q2 2023
Divisional revenue
10,835
(246)
10,589
(939)
(8.9%)
9,650
Gross profit
2,074
(45)
2,029
(6)
(0.3%)
2,023
EBIT before special items
566
(10)
556
(31)
(5.6%)
525
(DKKm)
YTD 2022
Currency
translation
YTD 2022 in
constant
currencies
Growth
Growth %*
YTD 2023
Divisional revenue
21,023
(346)
20,677
(933)
(4.5%)
19,744
Gross profit
4,012
(69)
3,943
56
1.4%
3,999
EBIT before special items
1,064
(15)
1,049
(29)
(2.8%)
1,020
* Growth in constant currencies
Page 14 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 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.
For H1 2023, the Solutions division reported an EBIT of DKK 1,161 million, compared to an extraordinarily
strong DKK 1,542 million for the same period last year. The development was impacted by a slight decline
in activity levels as well an increase in the cost base due to planned expansion of the division’s
warehouse capacity.
Income statement
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Divisional revenue
5,898
6,182
11,523
12,344
Direct costs
3,525
3,858
6,865
7,698
Gross profit
2,373
2,324
4,658
4,646
Other external expenses
420
405
873
828
Staff costs
613
552
1,201
1,077
EBITDA before special items
1,340
1,367
2,584
2,741
Amortisation and depreciation
727
614
1,423
1,199
EBIT before special items
613
753
1,161
1,542
Key figures and ratios
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Gross margin (%)
40.2
37.6
40.4
37.6
Operating margin (%)
10.4
12.2
10.1
12.5
Conversion ratio (%)
25.8
32.4
24.9
33.2
Number of full-time employees
31,736
31,730
Total invested capital (DKKm)
23,995
22,585
Net working capital (DKKm)
2,350
1,448
ROIC before tax (%)
10.0
16.1
Market development
It is our estimate that the contract logistics market dropped by
low single digits in H1 2023. The decline was mainly related to
companies within the high-tech, retail and e-commerce sectors.
Divisional revenue
The division’s revenue was DKK 11,523 million for the first six
months of 2023, compared to DKK 12,344 million for the same
period of 2022. In constant currencies, revenue decreased
4.6%.
For Q2 2023, revenue amounted to DKK 5,898 million,
compared to DKK 6,182 million for the same period last year. In
constant currencies, revenue for the quarter was down 0.9%.
For H1 2023, warehouse activity, measured by number of order
lines handled, was slightly below last year owing to lower
demand.
The Americas achieved the best performance and reported
revenue growth in H1 2023, whereas the APAC region
underperformed last year.
Page 15 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Gross profit
For the first six months of 2023, gross profit was DKK 4,658
million, compared to DKK 4,646 million for the same period of
2022. In constant currencies, growth for the period was 2.2%.
For Q2 2023, gross profit amounted to DKK 2,373 million,
compared to DKK 2,324 million for the same period last year.
Growth for the quarter was 6.0%.
The division’s gross margin was 40.4% for H1 2023, compared
to 37.6% for the same period last year.
The improved gross margin is supported by the division’s long-
term strategy of consolidation in large and efficient warehouses
and implementation of warehouse automation.
EBIT before special items
EBIT before special items was DKK 1,161 million for the first six
months of 2023, compared to DKK 1,542 million for the same
period of 2022, and was down by 23.4% in constant currencies.
For Q2 2023, EBIT before special items was to DKK 613 million,
compared to DKK 753 million for the same period last year. In
constant currencies, EBIT before special items for the quarter
was down 15.0%.
The conversion ratio was 24.9% for H1 2023, compared to
33.2% for the same period last year. The cost base in H1 2023
was impacted by general cost inflation and the addition of new
warehouses. The new capacity is not yet fully utilised, and the
division operates with a warehouse utilisation rate slightly below
last year. This has a dilutive effect on the conversion ratio.
It should be noted that H1 2022 was extraordinarily strong, with
high warehouse utilisation, high activity levels and exceptional
performance in the new GIL countries.
Net working capital
The division’s net working capital came to DKK 2,350 million on
30 June 2023, compared to DKK 1,448 million on 30 June 2022.
The development was impacted by an increase in funds tied up
in property projects.
Growth Solutions 2022 - 2023
(DKKm)
Q2 2022
Currency
translation
Q2 2022 in
constant
currencies
Growth
Growth %*
Q2 2023
Divisional revenue
6,182
(231)
5,951
(53)
(0.9%)
5,898
Gross profit
2,324
(85)
2,239
134
6.0%
2,373
EBIT before special items
753
(32)
721
(108)
(15.0%)
613
(DKKm)
YTD 2022
Currency
translation
YTD 2022 in
constant
currencies
Growth
Growth %*
YTD 2023
Divisional revenue
12,344
(270)
12,074
(551)
(4.6%)
11,523
Gross profit
4,646
(90)
4,556
102
2.2%
4,658
EBIT before special items
1,542
(27)
1,515
(354)
(23.4%)
1,161
* Growth in constant currencies
Page 16 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Interim financial statements
Income statement
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Revenue
78,681
123,874
Direct costs
55,959
96,919
Gross profit
22,722
26,955
Other external expenses
2,575
2,627
Staff costs
8,184
7,951
Operating profit before amortisation and depreciation (EBITDA) before special
items
11,963
16,377
Amortisation and depreciation
2,586
2,428
Operating profit (EBIT) before special items
9,377
13,949
Special items, costs
-
661
Financial income
259
143
Financial expenses
777
988
Profit before tax
8,859
12,443
Tax on profit for the period
2,197
2,987
Profit for the period
6,662
9,456
Profit for the period attributable to:
Shareholders of DSV A/S
6,628
9,410
Non-controlling interests
34
46
Earnings per share:
Earnings per share of DKK 1 for the period
30.7
40.6
Diluted earnings per share of DKK 1 for the period
30.4
40.0
Page 17 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Statement of comprehensive income
(DKKm)
Q2 2023
Q2 2022
YTD 2023
YTD 2022
Profit for the period
6,662
9,456
Items that may be reclassified to the income statement when certain
conditions are met:
Net foreign exchange differences recognised in OCI
(351 )
(1,252)
4,124
Fair value adjustments of hedging instruments
(6 )
(12 )
(8)
(4)
Fair value adjustments of hedging instruments transferred to financial
expenses
(2 )
3
(1)
Tax on items reclassified to the income statement
(3 )
2
(5)
Items that will not be reclassified to the income statement:
Actuarial gains/(losses)
110
645
Tax on items that will not be reclassified
(48 )
(76 )
(32)
(143)
Other comprehensive income, net of tax
(208 )
(1,177)
4,616
Total comprehensive income
5,485
14,072
Total comprehensive income attributable to:
Shareholders of DSV A/S
5,451
14,017
Non-controlling interests
34
55
Total
5,485
14,072
Page 18 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Cash flow statement
(DKKm)
YTD 2023
YTD 2022
Operating profit before amortisation and depreciation (EBITDA) before special items
Adjustments:
Share-based payments
Change in provisions
(21 )
Change in working capital
(957 )
Special items, paid
(263 )
(508 )
Interest received
Interest paid, lease liabilities
(400 )
(337 )
Interest paid, other
(438 )
(356 )
Income tax paid
(3,044 )
(2,100 )
Cash flow from operating activities
Purchase of intangible assets
(203 )
(166 )
Purchase of property, plant and equipment
(997 )
(347 )
Disposal of property, plant and equipment
Acquisition of subsidiaries and activities
(550 )
Change in other financial assets
(135 )
Cash flow from investing activities
(1,494 )
(341 )
Free cash flow
Proceeds from borrowings
Repayment of borrowings
(356 )
(3,074 )
Repayment of lease liabilities
(1,931 )
(1,814 )
Other financial liabilities incurred
(181 )
Transactions with shareholders:
Dividends distributed to shareholders of DSV A/S
(1,424 )
(1,320 )
Purchase of treasury shares
(7,230 )
(8,316 )
Sale of treasury shares
Other transactions with shareholders
(5 )
Cash flow from financing activities
(9,472 )
(9,831 )
Cash flow for the period
(217 )
Cash and cash equivalents 1 January
Cash flow for the period
(217 )
Currency translation
(90 )
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
YTD 2023
YTD 2022
Free cash flow
9,255
11,994
Acquisition of subsidiaries and activities (reversed)
550
-
Special items (reversed)
263
508
Repayment of lease liabilities
(1,931)
(1,814)
Adjusted free cash flow
8,137
10,688
Page 19 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Balance sheet – Assets
(DKKm)
30.06.2023
31.12.2022
30.06.2022
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)
30.06.2023
31.12.2022
30.06.2022
Share capital
Reserves
(344 )
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 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Statement of changes in equity at 30 June 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
(1,260 )
(1,177 )
(1,177 )
Total comprehensive income for the period
(1,260 )
Transactions with shareholders and
non-controlling interests:
Share-based payments
Tax on share-based payments
Dividends distributed
(1,424 )
(1,424 )
(25 )
(1,449 )
Purchase of treasury shares
(6 )
(7,224 )
(7,230 )
(7,230 )
Sale of treasury shares
Dividends on treasury shares
Other adjustments
(4 )
(4 )
Total equity transactions
(3 )
(6,887 )
(6,890 )
(20 )
(6,910 )
Equity at 30 June 2023
(344 )
Statement of changes in equity at 30 June 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
Total comprehensive income for the period
Transactions with shareholders and
non-controlling interests:
Share-based payments
Tax on share-based payments
(466 )
(466 )
(466 )
Dividends distributed
(1,320 )
(1,320 )
(46 )
(1,366 )
Purchase of treasury shares
(8 )
(8,308 )
(8,316 )
(8,316 )
Sale of treasury shares
Capital reduction
(6 )
-
-
Dividends on treasury shares
Other adjustments
(5 )
(1 )
Total equity transactions
(6 )
(9,641 )
(9,647 )
(51 )
(9,698 )
Equity at 30 June 2022
Page 21 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
Notes to the interim financial statements
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 and notes to the
interim financial statements.
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 H1 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)
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
Condensed income statement
Revenue
48,915
92,368
18,405
19,654
11,151
11,909
210
(57)
78,681
123,874
Intercompany revenue
291
801
1,339
1,369
372
435
(2,002)
(2,605)
-
-
Divisional revenue
49,206
93,169
19,744
21,023
11,523
12,344
(1,792)
(2,662)
78,681
123,874
Direct costs
35,425
74,957
15,745
17,011
6,865
7,698
(2,076)
(2,747)
55,959
96,919
Gross profit
13,781
18,212
3,999
4,012
4,658
4,646
284
85
22,722
26,955
Other external expenses
1,906
2,104
730
714
873
828
(934)
(1,019)
2,575
2,627
Staff costs
4,098
4,115
1,820
1,775
1,201
1,077
1,065
984
8,184
7,951
Operating profit before amortisation,
depreciation (EBITDA) before special items
7,777
11,993
1,449
1,523
2,584
2,741
153
120
11,963
16,377
Amortisation and depreciation
577
606
429
459
1,423
1,199
157
164
2,586
2,428
Operating profit (EBIT) before special
items
7,200
11,387
1,020
1,064
1,161
1,542
(4)
(44)
9,377
13,949
Condensed balance sheet
Total assets
85,715
103,791
24,594
25,024
30,840
29,572
10,391
13,103
151,540
171,490
Total liabilities
58,360
80,050
18,106
19,094
24,174
22,824
(19,416)
(29,130)
81,224
92,838
Page 22 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 2023
5 Revenue
Sale of services by geographical segment:
EMEA
Americas
APAC
Total
(DKKm)
Q2 2023
Q2 2022
Q2 2023
Q2 2022
Q2 2023
Q2 2022
Q2 2023
Q2 2022
Air services
5,117
7,942
3,723
7,708
3,326
9,382
12,166
25,032
Sea services
5,354
10,727
3,525
7,685
1,948
3,837
10,827
22,249
Road services
8,750
9,785
900
1,050
-
-
9,650
10,835
Solutions services
3,898
4,286
1,181
1,061
819
835
5,898
6,182
Total
23,119
32,740
9,329
17,504
6,093
14,054
38,541
64,298
Non-allocated items and eliminations
(814)
(1,549)
Total revenue
37,727
62,749
EMEA
Americas
APAC
Total
(DKKm)
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
YTD 2023
YTD 2022
Air services
10,957
15,336
8,167
15,463
7,307
18,440
26,431
49,239
Sea services
11,225
21,872
7,541
14,472
4,009
7,586
22,775
43,930
Road services
17,940
18,966
1,804
2,057
-
-
19,744
21,023
Solutions services
7,542
8,608
2,328
2,001
1,653
1,735
11,523
12,344
Total
47,664
64,782
19,840
33,993
12,969
27,761
80,473
126,536
Non-allocated items and eliminations
(1,792)
(2,662)
Total revenue
78,681
123,874
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)
30 June 2023
31 December 2022
Carrying amount
Fair value
Carrying amount
Fair value
Financial assets:
Currency derivatives
17
17
93
93
Trade receivables
24,235
24,235
32,387
32,387
Other receivables
7,404
7,404
6,640
6,640
Cash and cash equivalents
9,853
9,853
10,160
10,160
Financial assets measured at amortised costs
41,492
41,492
49,187
49,187
Issued bonds measured at amortised cost
21,510
17,452
21,377
16,615
Overdraft and credit facilities
451
451
829
829
Trade payables
13,142
13,142
14,992
14,992
Financial liabilities measured at amortised cost
35,103
31,045
37,198
32,436
Page 23 of 23 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1046 – 25 July 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
six-month period ended 30 June 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 at 30 June 2023 and of the results of the Group’s activities and the cash flow for the six-month period ended 30 June 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: