Slide 1: Half-Year 2019 Results
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Slide 2: Disclaimer
Disclaimer Forward-looking statements This announcement contains forward-looking statements that reflect DSV’s current expectations and views of future events. Some of these forward-looking statements can be identified by terms and phrases such as “estimate,” “expect,” “target,” “plan,” “project,” “
Slide 3: Content
Content 1 Highlights 2 Business segments 3 Financial review 4 Status on Panalpina 5 Appendix 3 | HALF-YEAR 2019 INVESTOR PRESENTATION
Slide 4: Highlights
Highlights Management Commentary Gross profit (DKKm) EBIT (DKKm) • Good results in the second quarter in spite of soft transport markets – Q2-19 H1-19 Q2-19 H1-19 especially within air freight. 5,285 10,399 1,631 3,085 • Managed to outgrow market while still delivering market leading profitability.
Slide 5: Air & Sea
Air & Sea Management Commentary (DKKm) Q2 2019 Q2 2018 Growth* H1 2019 H1 2018 Growth* • Sea freight volume growth of 6% in Q2 Gross profit and stable yield development. 1,305 1,201 +6.6% 2,499 2,281 +6.7% • Air freight volumes down 2% in a weak market. This was compensated Gross profit 1,224 1,186
Slide 6: Air & Sea: Strong yield development in challenging market conditions
Air & Sea Strong yield development in challenging market conditions TEU Gross Profit/TEU, DKK Tonnes Gross Profit/tonne, DKK YOY yield growth: 5.2% YOY yield growth: 2.5% 7,233 7,187 6,833 6,736 6,730 3,318 3,335 3,253 3,156 3,135 391,333 369,211 369,143 359,925 357,206 173,578 177,155 175,623 170,1
Slide 7: Road
Road Management Commentary (DKKm) Q2 2019 Q2 2018 Growth* H1 2019 H1 2018 Growth* • In Q2-19, DSV Road divested the US Revenue based Market Transport Ltd. (annual 7,833 7.862 (0.4%) 15,935 15,538 +2.6% revenue approx. DKK 600 million). Adjusted for the divestment, revenue growth was 1.3% in Q2-19. G
Slide 8: Solutions
Solutions Management Commentary (DKKm) Q2 2019 Q2 2018 Growth* H1 2019 H1 2018 Growth* • Solid 8.5% underlying growth in gross Revenue 6,196 profit in Q2-19, despite flat revenue. 3,147 3,111 +0.6% 5,959 +3.3% • Following high growth in 2018, processes have been optimised Gross profit 1,186 741 +8.5
Slide 9: P&L Q2 2019
P&L Q2 2019 Management (DKKm) Q2 2019 IFRS 16 Q2 2019 Q2 2018 Underlying Commentary reported impact (excl. (excl. growth* Increase, IFRS 16) IFRS 16) decrease (-) • Q2-19 is impacted by a lower number Revenue 20,079 - 20,079 19,491 2.4% Direct costs 14,794 (550) 15,344 15,041 1.4% of working days. G
Slide 10: P&L H1 2019
P&L H1 2019 Management (DKKm) H1 2019 IFRS 16 H1 2019 H1 2018 Underlying Commentary reported impact (excl. (excl. growth* Increase, IFRS 16) IFRS 16) decrease (-) • DSV has performed well and gained Revenue 40,058 40,058 37,871 5.0% Direct costs 29,659 (1,147) 30,806 29,301 4.5% market share in all
Slide 11: Cash flow H1 2019
Cash flow H1 2019 Management (DKKm) H1 2019 H1 2018 Variance Commentary (excl. IFRS 16) EBIT 3,085 2,605 480 • Adjusted free cash flow grew 7.8% Depreciation of right-of-use assets 1,258 17 1,241 Depreciation and amortisation of owned assets 361 347 14 and was impacted by a higher EBITDA 4,704 2,969
Slide 12: Panalpina and DSV to join forces
Panalpina and DSV to join forces Expected timeline Q3 2019 1 April 2019 May 2019 May 2019 May 2019 June 2019 August 2019 Pre- Filing to relevant Announcement Shareholders' Publication of Acceptance of Regulatory Expected announcement authorities of public approval of listing tender offer approvals s
Slide 13: Appendix
Appendix 13 | HALF-YEAR 2019 INVESTOR PRESENTATION
Slide 14: DSV – Global Transport and Logistics
DSV – Global Transport and Logistics We support our customers’ entire supply chain • Operations in more than 75 countries • More than 1,000 branch offices, terminals and warehouse facilities • Top 5 global freight forwarder One company – three divisions • Air & Sea – global network • Road – overland
Slide 15: Working together to support the entire supply chain
Working together to support the entire supply chain 3PL services 4PL services Air & Sea Road Solutions Lead Logistics Enabling intelligent supply chains • Access to all markets through our • Road freight services in Europe, North • Contract logistics services worldwide global network America and Sou
Slide 16: A strong global transport and logistics network
A strong global transport and logistics network EMEA 458 offices 405 logistics & cross-dock facilities (4,600,000 sqm) 34,000 employees 320,000 tonnes of air freight (export) 565,000 TEU (export) Americas 100 offices 30 million shipments APAC 38 logistics & cross-dock facilities (625,000 sqm) 101 of
Slide 17: Vision and strategy
Vision and strategy We want to be a leading freight forwarder targeting extensive growth and being among the most profitable in our industry Customer statement We offer our customers global and competitive transport and logistics services of a consistent high quality. Growth Operational Growth state
Slide 18: We are committed to being responsible
We are committed to being responsible The UN Global Compact is based on ten principles concerning: • Environment and climate • Business ethics • Employees and working environment The 17 UN Sustainable Development Goals (SDG) • We apply the 17 SDG goals as a framework for defining our strategies and
Slide 19: Creating value in the transport and logistics business
Creating value in the transport and logistics business From A to B and much more KEY RESOURCES AND PERFORMANCE DRIVERS Shipper Freight Forwarding Services Transport (subcontracted) Logistics and distribution services Consignee • Shipment booking • Warehouse • Pick-up • Picking/packing • Warehouse •
Slide 20: Competitive landscape
Competitive landscape Global top 20 freight forwarders based on 2018 revenue (billion USD) DHL Logistics (DE) 1 33.4 Kuehne + Nagel (CH) 2 25.4 DB Schenker (DE) 3 19.5 Nippon Express (JP) 4 18.2 C. H. Robinson (US) 5 15.5 (DK) 6 12.5 XPO Logistics (US) 7 11.8 UPS (US) 8 9.8 J. B. Hunt (US) 9 8.2 • T
Slide 21: DSV's history
DSV’s history 13% A global network created through organic growth and M&A 20% 67% Breakdown of EBIT by division Air & Sea Road Solutions 2018 3% Breakdown of EBIT by geography 2016 38% EMEA Americas 59% APAC 100% 2008 2006 100% 2000 1997 1989 1976 797 DKKm 2,694 DKKm 19,478 DKKm 31,972 DKKm 37,435 D
Slide 22: DSV and Panalpina
DSV and Panalpina Expected closing in Q3 2019 DSV Panalpina 47,400 EMPLOYEES 14,500 DKK 79.0 bn. DKK 39.0 bn. ANNUAL REVENUE CHF 12.2 bn. CHF 6.0 bn. 689,000 AIR FREIGHT (tonnes) 1,039,000 1,442,000 SEA FREIGHT (TEU) 1,484,000 DKK 31.2 bn. DKK 1.9 bn. ROAD FREIGHT (turnover) CHF 4.8 bn. CHF 0.3 bn.
Slide 23: DSV and Panalpina: Diversification of business mix and geography
DSV and Panalpina Diversification of business mix and geography Combined DSV Panalpina (pro forma) 9% 16% 23% 14% (Revenue) Division 33% 38% 53% 26% 39% 22% 27% Air Sea Road Solutions / Logistics 19% 21% Geography 26% (Revenue) 10% 44% 62% 17% 71% 30% AMERICAS APAC EMEA Note: Illustrative purposes o
Slide 24: Geographical exposure by Gross profit FY 2018
Geographical exposure by Gross profit FY 2018 DSV A/S DSV Air & Sea APAC, 14% APAC, 24% Americas, 19% EMEA, 48% Americas, 28% EMEA, 67% DSV Road DSV Solutions APAC, 6% Americas, 6% Americas, 14% EMEA, 80% EMEA, 94% 24 | HALF-YEAR 2019 INVESTOR PRESENTATION
Slide 25: Regional development H1 2019 (DKKm)
Regional development H1 2019 (DKKm) Gross profit EBIT before special items +7% 9,252 +9% 2,890 8,570 2,605 1,436 55% 6,023 1,357 +6% +5% 67% 55% EMEA 5,796 69% 558 19% 501 +9% 18% 1,233 1,152 14% APAC +4% 13% 896 747 26% 1,996 +14% AMERICAS 1,622 +17% 19% 27% 18% H1 2018 H1 2019 H1 2018 H1 2019 Grow
Slide 26: Historical transport market growth
Historical transport market growth CAGR in % 1980-2008 2000-2015 2015 2016 2017 2018 2019e 2020e Global real GDP 2.30% 4.60% 3.20% 3.10% 3.50% 3.70% 3.40% 3.50% Global Trade 4.40% 4.30% 2.80% 2.40% 4.20% 4.20% 4.00% 4.10% multiplier ^ (x) 1.9x 0.9x 0.9x 0.8x 1.2x 1.1x 1.2x 1.2x Container volumes* 9%
Slide 27: Tradelane details
Tradelane details Tradelane Statistics Tonnage 2018 Tradelane Statistics TEU 2018 Other Other 9% 9% Americas - EMEA APAC - EMEA 6% 19% Americas - EMEA 8% Intra APAC 7% APAC - EMEA 32% Intra APAC 10% 700,000 tonnes 1,500,000 TEU Total YoY growth +8 % Total YoY growth +4 % EMEA - APAC Intra EMEA 9% 16
Slide 28: Capital allocation
Capital allocation Target for financial gearing and priority for use of free cash flow • Target (after IFRS 16 implementation): Below 2.0 x EBITDA before special items • Repayment of debt if financial gearing ratio is above target range • If below target range: 1. Value creating acquisitions or furt
Slide 29: Financial targets 2020
Financial targets 2020 Key assumptions • The 2020 targets are adjusted for the Previous 2020 Revised 2020 FY 2018 IFRS 16 impact targets targets expected impact of IFRS 16. DSV – total % % % % Operating margin 6.9% 7.5% 0.0 – +0.5% > 7.5% • We assume stable macro-economic Conversion ratio 31.2% 32.5
Slide 30: Financial performance
Financial performance CAGR incl. M&A Revenue (DKKm) Gross profit (DKKm) 80,000 18,000 70,000 16,000 60,000 14,000 50,000 12,000 10,000 40,000 8,000 30,000 6,000 20,000 4,000 10,000 2,000 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 31: Financial performance per division
Financial performance per division Selected KPIs DSV A/S DSV Air & Sea EBIT Conversion ratio (Rhs) Operating margin (Rhs) EBIT Conversion ratio (Rhs) Operating margin (Rhs) 6,000 35% 4,000 45% 30% 3,600 40% 5,000 3,200 35% 25% 4,000 2,800 30% 20% 2,400 25% 3,000 2,000 15% 20% 1,600 2,000 15% 1,200 1
Slide 32: Cash flow and ROIC
Cash flow and ROIC Operating cash flow (DKKm) Cash conversion ratio* (%) 25,000 30.0% 20,000 25.0% 20.0% 15,000 15.0% 10,000 10.0% 5,000 5.0% 0 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Average: 110% Invested capital (DKKm) ROI
Slide 33: Diluted adjusted earnings per share (DKK)
Diluted adjusted earnings per share (DKK) 23.5 22.1 18.4 13.4 12.9 10.5 10.1 9.5 7.8 6.2 2010 2011 2012 2013 2014 2015 2016 2017 2018 H1-2019 CAGR 15.1% 33 | HALF-YEAR 2019 INVESTOR PRESENTATION
Slide 34: IFRS 16 impact - divisions (Air & Sea)
IFRS 16 impact - divisions (DKKm) Q2 2019 IFRS 16 Q2 2019 Q2 2018 H1 2019 IFRS 16 H1 2019 H1 2018 Air & Sea reported impact (excl. IFRS 16) (excl. IFRS 16) reported impact (excl. IFRS 16) (excl. IFRS 16) Increase, Increase, decrease (-) decrease (-) Revenue 9,682 - 9,682 9,095 19,093 - 19,093 17,509
Slide 35: IFRS 16 impact - divisions (Road)
IFRS 16 impact - divisions (DKKm) Q2 2019 IFRS 16 Q2 2019 Q2 2018 H1 2019 IFRS 16 H1 2019 H1 2018 Road reported impact (excl. IFRS 16) (excl. IFRS 16) reported impact (excl. IFRS 16) (excl. IFRS 16) Increase, Increase, decrease (-) decrease (-) Revenue 7,833 - 7,833 7,862 15,935 - 15,935 15,538 Dire
Slide 36: Quarterly P&L details: DSV Group
Quarterly P&L details DSV Group (DKKm) Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Revenue 18,223 18,924 18,735 19,019 74,901 18,380 19,491 20,237 20,945 79,053 19,979 20.079 Direct costs 14,003 14,707 14,621 14,965 58,296 14,260 15,041 15,765 16,4
Slide 37: Quarterly P&L details: Air & Sea
Quarterly P&L details Air & Sea (DKKm) Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Divisional revenue 8,470 8,873 9,044 8,817 35,204 8,414 9,095 9,625 9,838 36,972 9,411 9,682 Direct costs 6,354 6,656 6,845 6,725 26,580 6,269 6,708 7,266 7,536 27,7
Slide 38: Quarterly P&L details: Road
Quarterly P&L details Road (DKKm) Q1 2017 Q2 2017 Q3 2017 Q4 2017 FY 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Divisional revenue 7,633 7,684 7,514 7,796 30,627 7,676 7,862 7,812 7,893 31,243 8,102 7,833 Direct costs 6,200 6,368 6,235 6,537 25,340 6,370 6,544 6,439 6,582 25,935 6,
Slide 39: Our IT landscape
Our IT landscape Designed to support good customer service, high data quality and growth Customer myDSV ∙ EDI Air & Sea Road Solutions • Global Transport • One primary Transport • Global Warehouse Management System Management System Management System • Off-the-shelf system • Partly off-the-shelf • M
Slide 40: myDSV: DSV's digital self-service platform
myDSV DSV’s digital self-service platform Facts • myDSV handles 250.000 shipments per month • Rolled out in more than 40 countries • Fully rolled out in DSV Road in 2018 Why myDSV? • Booking, tracking and support in one single platform • High level of customer data transparency • Fast response time
Slide 41: Innovation in DSV
Innovation in DSV Track On our radar in 2019 Self driving vehicles Augmented reality Assess Cognitive email dispatching Drones (air) Chatbots for IT ServiceDesk Test Internet of Things – data platform for Blockchain for live tracking and ETA shipping documents SAP invoice matching Advanced cognitive
Slide 42: Investor contact information
Investor contact information Share information Financial calendar 2019 DSV shares are listed on the stock exchange in Copenhagen under the 25 Oct. 2019 Interim Financial Report, Third Quarter 2019 symbol ‘DSV’. For further company information, please visit DSV’s website at: www.dsv.com Investor Rela