Slide 1: Q1 2024 Results
Q1 2024 RESULTS DSV A/S Investor presentation
Slide 2: Content
Content • Highlights • Business segments • Commercial strategy • Update on NEOM joint venture • Financial review • Appendix Forward-looking statements This presentation contains forward-looking statements. Such statements are subject to risks and uncertainties, as various factors, many of which are
Slide 3: Highlights Q1 2024
Highlights Q1 2024 • Strong start to 2024 with market share gains across all divisions in a normalising market. • Cash flow for Q1 2024 impacted by increased activity across all divisions - share buyback programme of DKK 1.0 billion launched. • Reiterating 2024 EBIT guidance of DKK 15 - 17 billion.
Slide 4: Air & Sea
Air & Sea Management commentary (DKKm) Q1 2024 Q1 2023 Growth* • Strong financial results in line with Gross profit Air 2,895 3,727 (20.8%) expectations and reflects seasonality and the continued Gross profit Sea 2,868 3,300 (11.1%) normalisation. Total gross profit 5,763 7,027 (16.2%) • Return of m
Slide 5: Air freight Q1 2024
Air freight Q1 2024 • We are taking market share in our addressable market, i.e. excluding cross border e-commerce and perishables. • In a highly competitive market with rate volatility ex-Asia, gross profit yields are stabilising. • Strong sequential performance: Q1 2024 volumes in line with Q4 202
Slide 6: Sea freight Q1 2024
Sea freight Q1 2024 • DSV is gaining market share within sea freight. Solid volume recovery, with highest growth on the Trans-Pacific and Asia-Europe trade lanes. • Gross profit yield levels are stabilising, with limited impact from the Red Sea situation during Q1 2024. • Strong start to the year: s
Slide 7: Road
Road Management commentary (DKKm) Q1 2024 Q1 2023 Growth* • Market share gains on international shipments and European groupage Revenue 10,425 10,094 3.3% network. Gross profit 1,964 1,976 (0.7%) • Gross profit and EBIT on par with Q1 2023 and in line with expectations. EBIT 490 495 (1.8%) *) Growth
Slide 8: Solutions
Solutions Management commentary (DKKm) Q1 2024 Q1 2023 Growth* • Solid growth on the back of continued expansion of our Revenue 5,989 5,625 7.3% Campus network, without any increases in FTEs. Gross profit 2,401 2,285 5.8% • Average warehouse utilisation lower than same quarter last year EBIT 500 548
Slide 9: Leadership team in place to deliver growth
Leadership team in place to deliver growth Executive Divisions Commercial management Seamless transition Maintaining the P&L Aligned structure completed for Executive ownership and strong across divisions and Board and Group accountability group to deliver on Executive Committee large accounts • Exp
Slide 10: Accelerating organic growth and accountability with a revised commercial approach
Accelerating organic growth and accountability with a revised commercial approach After recent M&A, our By strengthening our … while retaining and …and digitalising largest customers vertical and commercial further developing the customer account for ~50% of setup, we will boost our traditional jour
Slide 11: Update on the joint venture with NEOM
Update on the joint venture with NEOM Sourcing to NEOM from • In October 2023, we announced an exclusive logistics joint across the world venture to provide logistics services for the projects in the NEOM region. • The project is mobilised and ready to go live in Q2 as planned. The timing of investm
Slide 12: P&L Q1 2024
P&L Q1 2024 Management commentary (DKKm) Q1 2024 Q1 2023 Growth* Headlines • Despite higher activity levels, revenue and gross profit was Revenue 38,340 40,954 (5.0%) impacted by continued market Gross profit 10,265 11,391 (8.6%) normalisation and lower rates EBIT before special items 3,641 4,672 (2
Slide 13: Cash flow and financial ratios Q1 2024
Cash flow and financial ratios Q1 2024 (DKKm) Q1 2024 Q1 2023 Variance Management commentary EBITDA before special items 5,032 5,941 (909) Cash flow Change in working capital (2,092) 1,989 (4,081) Tax, interest, change in provisions, etc. (1,184) (1,677) 493 • A return to normal seasonality with Spe
Slide 14: Allocations to shareholders
Allocations to shareholders Management commentary • Based on cash flow in Q1 2024, we start a new share buyback programme of DKK 1.0 billion (running 24 April 2024 to 23 July 2024). • 1.4 million shares bought back in Q1 2024 at an average price of DKK 1,180. • On 23 April 2024, the portfolio of tre
Slide 15: Reiterating outlook 2024
Reiterating outlook 2024 (DKKm) Outlook 2024 Actual 2023 EBIT before special items 15,000-17,000 17,723 Effective tax rate 24.0% 24.8% Main assumptions • We expect air and sea markets will grow 3-4% in 2024. We continue to target profitable, above market growth, and our strategic growth initiatives
Slide 16: Key takeaways
Key takeaways Strong Q1 result with Completed the We are executing on market share gains leadership transition our strategy – across all three with an experienced supporting organic divisions leadership team in place growth and M&A Continuing to build on our DSV DNA 16
Slide 17: Appendix
* se ¢ t AS PS Pp %
Slide 18: DSV at a glance
DSV at a glance Global One company – DSV operations three divisions Nasdaq Copenhagen No majority shareholder – 100% free float ~75,000 Air & Sea Credit ratings Employees A global network A3 (Stable) by Moody’s A- (Stable) by Standard & Poors +1,600 Road Offices and logistics Overland transport in E
Slide 19: Our purpose and strategy
Our purpose and strategy We want to be a leading freight forwarder targeting sustainable growth Keeping supply chains flowing Purpose Vision Mission We are part of the critical infrastructure driving world trade. We help our Keeping supply Sustainable Operational customers grow by keeping their supp
Slide 20: From local haulier to global player
13% 11% From local haulier to global player 76% A global network created through organic growth and M&A 2023 Breakdown of EBIT by division 2021 Air & Sea Road Solutions EBIT Breakdown of EBIT by geography 3% EMEA 38% Americas APAC 59% 2019 100% 2016 2008 2006 2000 1976 1997 Revenue 2,694 DKKm 19,478
Slide 21: Our market position
Our market position Third-party logistics providers by 2022 revenue in USD billion 1 Kuehne + Nagel (CH) 46.9 2 DHL Logistics (DE) 45.6 3 DSV (DK) 34.9 4 DB Schenker (DE) 30.4 5 SF KEX (CN) 25.7 6 C.H. Robinson (US) 23.9 7 Nippon Express (JP) 19.9 8 CEVA Logistics (CH) 4% 18.7 The estimated market 9
Slide 22: Our market position
Our market position Top 3 Top 3 Top 3 Top 10 Air freight Sea freight Road freight (Europe) Logistics solutions Source: Transport Intelligence (by 2022 revenue) 22
Slide 23: Working together to support your entire supply chain
Working together to support your entire supply ~75,000 people in more than 80 countries at your service Third-party logistics services (3PL) 4 PL services Air and Sea Road Solutions Lead Logistics • Access to all markets through • Road freight services in EMEA • Contract logistics worldwide • Enabli
Slide 24: Creating value in the supply chain
Creating value in the supply chain From A to B and much more Freight forwarding services Shipment booking — Pick-up — Warehouse — Documentation & customs clearance — Cargo consolidation — Purchase order management Cross-dock terminal — Insurance A From shipper End-to-end logistics Through our global
Slide 25: Leveraging our global network
Leveraging our global network Value creation Global network strategy Air freight network – LCL network – Groupage network – Vertical specific solutions – Multi-client warehouses • Higher quality • International consistency • Stronger end-to-end offering Control of Control towers to Increased digital
Slide 26: Focused commercial efforts to grow gross profit
Focused commercial efforts to grow gross profit DSV Gross Profit distribution Management Commentary Illustrative graph SMALLER CUSTOMERS Largest global customers (Top ~250) (less than 5% of gross profit) LARGE TO MID-SIZED • A significant growth potential both in terms CUSTOMERS of share of wallet a
Slide 27: Vertical specialists closely connected to our customers
Vertical specialists closely connected to our customers Our industry-specific expertise and solutions offered globally (% share of gross profit) Specialised Air & Sea verticals Consumer Automotive Industrial Oil & Gas and Chemicals ~25% ~15% ~35% Semiconductors Project Logistics Technology Healthcar
Slide 28: DSV x NEOM joint venture
DSV x NEOM joint venture
Slide 29: Logistics joint venture with NEOM
Logistics joint venture with NEOM • NEOM aims to create one consolidated supply chain to support the projects under NEOM. • In the joint venture, DSV will set up a Control Tower to organise and monitor NEOM’s entire supply chain. • This includes sourcing from suppliers across the world and on-site l
Slide 30: Planned activities in the joint venture
Planned activities in the joint venture NEOM JV Construction End-state Property Management / logistics logistics development back-office Air, sea, road and contract Manage, execute and support Development of Strategy and planning. logistics services for the urban logistics for the population, logist
Slide 31: ESG in NEOM joint venture
ESG in NEOM joint venture • The joint venture will be based on DSV’s values and policies (Human Rights Policy, Code of Conduct, Supplier Code of Conduct). • DSV appoints the Managing Director and will be responsible for daily operations. • Internal and external audits will be conducted. • DSV has op
Slide 32: Sustainability
Sustainability
Slide 33: Sustainability strategy
Sustainability strategy Addressing our material impacts in environment, social and governance ENVIRONMENT SOCIAL GOVERNANCE Reducing our impact Caring for our employees and Doing business with integrity and engaging with communities running a responsible supply • Climate change chain • Waste managem
Slide 34: Our carbon footprint
Our carbon footprint Committed to net zero in 2050 Total carbon footprint 2023 Science-based targets Our emissions by scope Scope 3 by transport mode (Tonne CO2) 2030 3% 37.1% Scope 1 & 2 0.41 million 50% Reduction of scope 93% SCOPE 3 SCOPE 1+2 4% Other categories, SCOPE 3 LAND (Buildings, company
Slide 35: Our roadmap towards net-zero emissions
Our roadmap towards net-zero emissions Energy efficiency and Four key levers to deliver on our decarbonisation targets optimisation Phasing out fossil fuels in transportation 20,526 (CO2e - ‘000 tonnes) Renewable energy Scopes 1+2: ~15% production and charging Scope 3: ~20% Scopes 1+2: ~30% infrastr
Slide 36: Decarbonisation initiatives in 2023
Decarbonisation initiatives in 2023 Validated SBTi Premium member of the Smart Freight Centre and near-term targets its Clean Air Transport programme Launch of carbon digitalisation journey, Development of renewable introducing the first customer-ready product energy-powered facilities in - carbon f
Slide 37: DSV Green Logistics
DSV Green Logistics A set of solutions that reduce the carbon footprint of our customers’ supply chains CO2 Supply chain Sustainable Sustainable Carbon reporting optimisation warehousing fuels offsetting Reporting of customer Customer analysis to Sustainable warehousing Sustainable fuel Offsetting o
Slide 38: Our approach to IT
Our approach to IT
Slide 39: Our IT landscape
Our IT landscape Designed to support good customer service, high data quality and growth Customer myDSV ∙ API / EDI Air & Sea Road Solutions • Global transport management system • One primary transport management system • Global warehouse management system • Off-the-shelf system • New TMS planned as
Slide 40: Digital capabilities and logistical capabilities
Broad and deep service offerings based on a solid IT platform DSV is uniquely positioned to combine logistical and digital capabilities Utilising our global platform to provide Winning formula to compete in the future complex supply chain solutions Digital capabilities Governance & change capacity D
Slide 41: Our technology trend radar
Our technology trend radar Tracking Metaverse Micro mobility Assessing Quantum computing Blockchain Augmented Biodegradable reality packaging Fully Pick and pack Testing Space access autonomous trucks Mass personalization Circular supply H2 chain Micro Power-to-X Wearables Hydrogen satellites Smart
Slide 42: Financial details
Financial details SF» eS
Slide 43: 2026 financial targets
2026 financial targets 2023 actual 2026 targets Assumptions • We maintain the targets, but the negative DSV Group (%) volume trends for Air & Sea in 2022-23 have made the targets more challenging. Conversion ratio 40.4 >45.0 • We assume that annual GDP growth will be around 3% and transport market g
Slide 44: Earnings per share
Earnings per share • Flexible and scalable business model • Performance driven organisation • Strong M&A track record • 20% CAGR* in EPS from 2014 - Q1 2024 • Graph illustrates diluted adjusted earnings per share of DKK 1 20% CAGR* 2014 – Q1 2024 81.4 58.7 55.3 50.9 26.5 22.1 22.1 18.4 10.5 12.9 13.
Slide 45: Financial performance over the years
Financial performance over the years Revenue (DKKm) Gross profit (DKKm) 240,000 56,000 210,000 49,000 180,000 42,000 150,000 35,000 120,000 28,000 90,000 21,000 60,000 14,000 30,000 7,000 0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 CAGR* 13
Slide 46: Financial performance per division
Financial performance per division DSV Group DSV Air & Sea EBIT DKKm Conversion ratio Operating margin EBIT DKKm Conversion ratio Operating margin 28,000 49% 21,000 70% 24,000 42% 18,000 60% 20,000 35% 15,000 50% 16,000 28% 12,000 40% 12,000 21% 9,000 30% 8,000 14% 6,000 20% 4,000 7% 3,000 10% 0 0%
Slide 47: Cash flow and ROIC
Cash flow and ROIC Operating cash flow (DKKm) Cash conversion ratio* (%) 28,000 175% 24,000 150% 20,000 125% 97% 98% 16,000 100% 12,000 75% 8,000 50% 4,000 25% 0 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Average: 99% * Cash conversion rati
Slide 48: Divisional and geographical exposure FY 2023
Divisional and geographical exposure FY 2023 Gross profit by division Gross profit by region Air & Sea EMEA 60% 58% Road Americas 18% 25% Solutions APAC 22% 17% EBIT before special items by division EBIT before special items by region Air & Sea EMEA 76% 49% Road Americas 11% 29% Solutions APAC 13% 2
Slide 49: DSV trade lane exposure vs. market (volume)
DSV trade lane exposure vs. market (volume) Air freight Sea freight Asia-Europe 30% Asia-Europe 34% (both ways) 29% (both ways) 24% Trans-Pacific 17% Trans-Pacific 18% (both ways) 21% (both ways) 20% Trans-Atlantic 26% Trans-Atlantic 16% (both ways) 18% (both ways) 9% 4% 13% Intra APAC Intra APAC 18
Slide 50: Capital structure and capital allocation
Capital structure and capital allocation 22000 Management commentary 20000 Financial gearing Net interest-bearing debt below 2.0x EBITDA before target special items. 18000 Free cash flow 1. Repayment of debt (if above target gearing 16000 priorities ratio). 2. Value-adding investments in the form of
Slide 51: P&L details - Group
P&L details - Group Group (DKKm) FY 2019 FY 2020 FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Revenue 94,701 115,932 182,306 61,125 62,749 60,560 51,231 235,665 40,954 37,727 35,576 36,528 150,785 38,340 Direct costs 70,947 87,398 144,691 48,248 48,
Slide 52: P&L details – Air & Sea
P&L details – Air & Sea Air & Sea (DKKm) FY 2019 FY 2020 FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Divisional revenue 51,151 73,689 131,901 45,887 47,282 45,339 35,923 174,431 26,213 22,993 21,912 21,854 92,972 22,716 Direct costs 38,634 56,780 1
Slide 53: P&L details – Road and Solutions
P&L details – Road and Solutions Road (DKKm) FY 2019 FY 2020 FY 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 FY 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Divisional revenue 31,621 30,395 35,416 10,188 10,835 10,406 10,078 41,507 10,094 9,650 9,036 9,375 38,155 10,425 Direct costs 25,465 24,257 28
Slide 54: Balance sheet
Balance sheet (DKKm) Assets 31.03.2024 31.03.2023 Variance 31.12.2023 Equity and liabilities 31.03.2024 31.03.2023 Variance 31.12.2023 Intangibles assets 77,188 77,020 168 77,106 DSV shareholders’ share of equity 68,629 70,503 (1,874) 68,703 Right-of-use assets 16,698 14,782 1,916 15,655 Non-control
Slide 55: Investor Relations
Investor Relations Share information Financial calendar 2024 Investor Relations contacts DSV A/S is listed on the Copenhagen stock 01 Feb. 2024 Annual Report 2023 DSV A/S exchange under the symbol ‘DSV’. Hovedgaden 630, 2640 Hedehusene, Denmark investor@dsv.com 14 Mar. 2024 Annual General Meeting 20