Slide 1: Q1 2014 Investor Presentation
Q1 2014 Investor Presentation
Slide 2: Forward-looking statements
Forward-looking statements This presentation contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond DSV A/S’ control, may cause actual development and results to differ materially from the expectations contained in the
Slide 3: Content
Content 1. Highlights Q1 2014 2. Business segments 3. Financial review, cash flow and capital allocation 4. Operational Excellence 2.0 – update 5. Appendix 3 | Q1 2014 Investor Presentation
Slide 4: Highlights Q1 2014
Highlights Q1 2014 • Transport markets have developed as expected in terms of volume growth • DSV is gaining market share • Competitive environment continues • EBIT growth of 7.3% in Q1 2014 – driven by Air & Sea • Operational Excellence 2.0 on track to deliver expected savings • Share buyback progr
Slide 5: Regional development Q1 2014 (DKK million)
Regional development Q1 2014 (DKK million) Gross profit* EBIT before special items* +3% 2,465 546 2,404 +7% 509 618 Nordic countries 583 +6% 25% 149 24% 27% 136 +10% 27% 442 54 Southern Europe** 457 (3%) 18% 45 20% 10% 19% 9% 173 185 (6%) 32% 36% 970 973 Other Europe / EMEA 40% 0% 39% 81 72 +13% 15%
Slide 6: Business segments – Air & Sea
Business segments – Air & Sea • Sea freight – volume growth of 10% (approx. 4% from M&A) • Air freight – volume growth of 12% (approx. 2% from M&A) • GP/unit negatively impacted by currency translation and competitive pricing – Growth in large accounts • Strong EBIT performance in Q1 2014 with 11.9%
Slide 7: Gross profit per unit – Air & Sea
Gross profit per unit – Air & Sea Air Sea Gross profit per tonne, DKK Gross profit per TEU, DKK 6.866 7.179 6.966 7.107 6.954 6.738 6.586 3.318 3.248 3.242 3.234 3.144 3.224 3.142 Full year Full year Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Full year Full year Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014
Slide 8: Business segments – Road
Business segments – Road • 5% volume growth (approx. 1% from M&A) – Positive trend across most countries in Europe • 2% organic growth in gross profit – Gross margin remains under pressure • EBIT for Q1 2014 on level with Q1 2013 – Cost base impacted by integration of Ontime Logistics Q1 Growth deta
Slide 9: Business segments – Solutions
Business segments – Solutions • 2% growth in order lines in Q1 2014 – In line with market • 4.6% organic decline in gross profit – Market remains competitive – Utilisation and activity levels too low in certain areas • Cost base further reduced Q1 Growth details DKK million 2014 2013 Var. Org. M&A F
Slide 10: Financial review Q1 2014
Financial review Q1 2014 Q1 Growth details DKK million 2014 2013 Var. Org. M&A Fx • Gross profit positively impacted by volume, but this was partly offset by Net revenue 11,602 10,981 5.7% 4.5% 3.8% -2.6% yield pressure Gross profit 2,465 2,404 2.5% 3.1% 2.5% -3.0% EBIT before special items 546 509
Slide 11: Financial review – cash flow and debt
Financial review – cash flow and debt DKK million Q1 2014 Q1 2013 • Cash flow from operating activities EBITDA before special items 676 642 for Q1 2014 was positively impacted Cash flow from operating activities 558 275 by higher results, positive development in net working capital Cash flow from in
Slide 12: Share buyback and dividend
Share buyback and dividend • New share buyback programme of DKK 400 million according to safe harbour method launched on April 30 2014 and running until 29 July 2014 • The purpose of the share buyback is to meet the exercise of share options under the Group's incentive schemes and adjust the capital
Slide 13: Operational Excellence 2.0 – update
Operational Excellence 2.0 – update • The initiatives are expected to deliver cost savings of DKK 150 million per year • P&L effect of approx. DKK 50 million in H2 2014 • Full year P&L effect expected in 2015 • Impact from cost savings mainly in Road and Solutions • Headlines • Consolidation and opt
Slide 14: Backup slides
Z = e = r Backup slides
Slide 15: General Facts – DSV Group
General Facts – DSV Group Global supplier of transport and logistics services DSV countries Three divisions • Air & Sea – global network • Road – complete network in Europe • Solutions – contract logistics Asset light business model • transport services outsourced Own operations in 75 countries • an
Slide 16: Milestones – creation of a global network
Milestones – creation of a global network DSV acquires ABX LOGISTICS DSV acquires Frans Maas 2012- DFDS Transport Group of companies 2008 2013 is divided into three divisions 2007 DSV acquires Samson 10 independent haulers Transport and becomes 2006 establish DSV, De DSV Samson Transport 2005 sammen
Slide 17: The Divisions – facts and figures
The Divisions – facts and figures DSV Air & Sea DSV Road DSV Solutions 10 % Share of DSV EBIT 36 (2013) 54 % % • 6,300 employees • 9,400 employees • 5,800 employees • Warehousing and supply chain • Global network • Full European road freight management network • Approximately 770,000 20’ • Strong pr
Slide 18: Market position - Top Global freight forwarders
Market position - Top 15 Global freight forwarders Based on 2013 revenue – Billion USD 1. DHL Logistics (DE) 36.9 2. Kuehne + Nagel (CH) 22.6 3. DB Schenker (DE) 18.9 4. C.H. Robinson (US) 11.1 5. Ceva Logistics (NL) 8.5 6. DSV (DK) 8.1 DSV Road ranks a top 3 in Europe 7. Panalpina (CH) 7.3 In Air &
Slide 19: The business model – adding value through services
The business model – adding value through services Freight forwarding services Transportation Logistics & Distribution (subcontracted) services Warehousing Cargo plane Customs Pickup Cargo Clearance Picking/ consolidation Packing From Shipper.. … to Consignee Hauling Terminal truck Terminal Trucking
Slide 20: Long-term financial targets – timeframe extended, otherwise unchanged
Long-term financial targets – timeframe extended, otherwise unchanged Targets Actual 2013 DSV – total • We expect to reach the targets within 5 Profit margin 7% 5.6% years counting from 2013 Conversion ratio 30% 25.5% ROIC (pre tax) 25% 21.1% • Time horizon has been extended by 2 years due to lower
Slide 21: Outlook for 2014 – reiterated
Outlook for 2014 – reiterated DKK million Actual 2013 Outlook 2014 Growth % Gross profit 10,005 10,100 - 10,500 +1% to +5% EBIT before special items 2,552 2,500 - 2,700 -2% to +6% Special items costs – Operational Excellence 2.0 300 Net financial expenses 298 300 Effective tax rate 26.1% 26% Adjuste
Slide 22: Keeping the cost base in line
Keeping the cost base in line Cost base – staff + other external costs (DKK million) The cost base has been stable for 3 2.000 consecutive years. 1.500 Inflationary increases of 1-2% per year and impact from M&A were absorbed by 1.000 cost control and productivity gains. 500 A number of initiatives
Slide 23: DSV Group - geographical footprint (% of group total 2013)
DSV Group - geographical footprint (% of group total 2013) 84% of revenue and 71% of EBIT is generated in Europe DSV countries Nordics Revenue 28% EBIT 26% Americas Other Europe/ EMEA Revenue 7% Revenue 39% EBIT 15% EBIT 35% Southern Europe Asia/Pacific Revenue 17% Revenue 9% EBIT 10% EBIT 14% 23 |
Slide 24: Geographic Exposure by Revenue (2013)
Geographic Exposure by Revenue (2013) DSV A/S DSV Air & Sea 9% 15% Nordic countries - 28% Nordic countries - 15% 21% 7% 28% Southern Europe - 17% Southern Europe - 20% Other Europe / EMEA - 39% 20% Other Europe / EMEA - 28% 16% Americas - 7% Americas - 16% 39% 17% APAC - 9% APAC - 21% 28% DSV Road D
Slide 25: M&A update 2012 + 2013
M&A update 2012 + 2013 Annual revenue Area Division Included in DSV Est. revenue (DKK million) (primary) Group from impact 2014 October 225 Czech Republic Road N/a 2012 400 Africa, Middle October (70% Air & Sea N/a East, Asia 2012 consolidated) 190 Argentina, Chile, Air & Sea November 2012 N/a Peru
Slide 26: DSV Air & Sea services
DSV Air & Sea services DSV Air & Sea is a premier air- and sea freight service provider offering exemplary services, which makes us the preferred service partner for some of the most selective international trading companies and retailers. Fast and flexible air freight Complete customs clearance and
Slide 27: DSV Road services – efficient and flexible
DSV Road services – efficient and flexible Top 3 road freight forwarder in Europe that provides all kinds of road transport services in a fast, efficient, flexible and environmentally friendly manner – creating good connections to the rest of the world Groupage DSV Daily Pallet • Domestic and cross
Slide 28: DSV Solutions services
DSV Solutions services DSV Solutions creates competitive advantages by developing, optimising and executing efficient supply chain solutions Warehousing Industry sectors • Managing, inspecting and unloading inbound goods Through substantial investments in warehouse and freight management systems we
Slide 29: DSV Corporate Social Responsibility
DSV Corporate Social Responsibility DSV is aware of and acknowledges its social responsibility as one of the world's largest transport and logistics providers. We find it natural to take good care of our employees and the environment and to ensure that our work is based on an ethical business model.
Slide 30: DSV freight volume versus market
DSV freight volume versus market 14% Air 14% 12% Sea 12% 10% 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% -2% -2% -4% -4% -6% DSV Market DSV Market 6% 12% 10% Road 5% Solutions 4% 8% 6% 3% 4% 2% 2% 1% 0% 0% -2% -1% -4% -2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011201120112011201220122012201220132013201320132
Slide 31: DSV’s Air & Sea exposure (volume – 2013 full year)
DSV’s Air & Sea exposure (volume – 2013 full year) DSV Air freight – by export region 16% EMEA Asia-Pacific 55% 29% Americas DSV Sea freight – by trade lane Asia-Europe (WB) 5% 5% Europe-Asia (EB) 5% Trans-Atlantic 7% 42% Trans-Pacific Intra Europe 7% Intra Asia Europe-Africa 15% Europe-S.America 12
Slide 32: Gross profit per unit – Air & Sea “Old indexed format”
Gross profit per unit – Air & Sea “Old indexed format” Air Sea Gross profit per tonne Gross profit per TEU 2008 = Index 100 2008 = Index 100 102,8 100,6 100,4 100,0 100,0 99,7 99,8 100,2 97,4 97,3 92,9 91,1 85,8 83,3 85,0 82,4 82,1 83,1 81,3 78,7 Full Full Full Full Full Q1 Q2 Q3 Q4 Q1 Full Full Ful
Slide 33: Market growth - The ”multiplier” has faded since 2008
Market growth - The ”multiplier” has faded since 2008 Source: Morgan Stanley Research – January 21 2014 • The big wave of outsourcing of production to the Far East and general growth in international trade has been driving growth in the period 1990-2008 above Global GDP growth • Note: These are Morg
Slide 34: Financial performance (CAGR incl. M&A)
Financial performance (CAGR incl. M&A) CAGR: 6,1% CAGR: 8,1% Revenue EBITDA 50.000 3.500 3.000 40.000 2.500 DKKm DKKm 30.000 2.000 20.000 1.500 1.000 10.000 500 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 CAGR: 10,0% CAGR: 11,0% E
Slide 35: Cash flow and ROIC
Cash flow and ROIC Average 104% Operating Cash Flow Cash conversion ratio* 120% 2.000 100% 1.500 80% DKKm 1.000 60% 40% 500 20% 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Invested Capital ROIC 15.000 25% 12.500 20% 10.000 DKKm 1
Slide 36: Earnings Per Share
Earnings Per Share 12,00 10,05 10,00 9,48 7,82 7,63 7,82 8,00 7,17 6,12 6,16 6,00 5,77 5,64 5,00 4,95 4,50 3,98 3,93 4,00 3,40 3,50 3,14 2,30 2,28 1,70 1,70 1,90 1,90 2,00 0,00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Diluted, adjusted EPS (DKK) Diluted, adjusted EPS (DKK) - exclu
Slide 37: Estimated effect on financial gearing if operational leasing is recognised
Estimated effect on financial gearing if operational leasing is recognised in balance sheet Estimated effect on EBITDA, NIBD and financial gearing if operational leasing is recognised: DKK million 2010 2011 2012 2013 Reported EBITDA 2.721 2.975 3.074 3.052 Operational leasing costs in P&L reversed 1
Slide 38: Quarterly P&L details
Quarterly P&L details DSV (DKKm ) Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Q1 2014 Revenue 10,981 11,406 11,466 11,857 45,710 11,602 Direct costs 8,577 8,853 8,944 9,331 35,705 9,137 Gross profit 2,404 2,553 2,522 2,526 10,005 2,465 Other external expenses 520 504 489 497 2,010 512 Staff costs 1,242
Slide 39: Quarterly P&L details
Quarterly P&L details Road (DKKm ) Q1 2013 Q2 2013 Q3 2013 Q4 2013 FY 2013 Q1 2014 Revenue 5,666 5,800 5,686 5,964 23,116 6,024 Direct costs 4,609 4,688 4,614 4,906 18,817 4,945 Gross profit 1,057 1,112 1,072 1,058 4,299 1,079 Other external expenses 244 239 246 247 976 254 Staff costs 579 574 544 5