Dsv A/s · OMXCOP:DSV
Dsv A/s — DSV Panalpina — FY2019 Earnings Presentation
47 slides from Dsv A/s's earnings presentation, Feb 7, 2020
Slide 1: Full-Year 2019 Results
FULL-YEAR 2019 RESULTS DSV Panalpina A/S - Investor presentation Released 7 February 2020 (updated 25 March 2020)
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 Panalpina A/S’ control, may cause actual developments and results to differ materially from the “ expectations c
Slide 3: Content
Content 1 Highlights 2 Integration update 3 Business segments 4 Financial review 5 Outlook 2020 6 Allocation to shareholders 7 Appendix 3 | DSV Panalpina – Annual Report 2019
Slide 4: Highlights
Highlights Gross profit (DKKm) EBIT (DKKm) Management commentary 4.4%* 5.7%* 9.9%* 8.4%* EBIT before special items was in line with outlook for 2019. Q4-19 was the first quarter with full 7,084 23,754 Panalpina impact. 1,784 6,654 17,489 1,338 5,450 4,447 In spite of soft transport markets, the 2019
Slide 5: Integration update
Integration update On track Operational integration Cost synergies As per February 2020, more than 20 countries Target of DKK 2,300 million and expected timeline have been onboarded, representing more than is maintained. 60% of Panalpina volume. No material loss of Panalpina customers since Full-yea
Slide 6: Air & Sea
Air & Sea (DKKm) Q4 2019 Q4 2018 Growth* M&A** FY 2019 FY 2018 Growth* M&A** Management commentary Significant Panalpina impact since 1,808 1,120 +6.4% 582 5,923 4,566 +7.0% 896 August 2019. Gross profit The division delivered solid organic 2,313 1,182 +0.6% 1,081 6,594 4,627 +4.8% 1,594 Gross profi
Slide 7: Air & Sea volumes – significant Panalpina impact
Air & Sea volumes – significant Panalpina impact DSV tonnes PAN tonnes DSV TEU PAN TEU Gross profit/tonne, DKK Gross profit/tonne excl. PAN, DKK Gross profit/TEU, DKK Gross profit/TEU excl. PAN, DKK 7,895 3,317 3,335 3,300 3,255 7,462 7,231 7,187 3,135 3,107 6,730 6,328 2,845 5,230 635,820 442,069 5
Slide 8: Road
Road (DKKm) Q4 2019 Q4 2018 Growth* M&A** FY 2019 FY 2018 Growth* M&A** Management commentary 2019 was impacted by general market 7,988 7,893 (0.6%) 133 31,621 31,243 +1.0% 45 slowdown, in particular in the German Revenue automotive sector and for UK related traffics. 1,532 1,311 +1.5% 28 6,156 5,30
Slide 9: Solutions
Solutions (DKKm) Q4 2019 Q4 2018 Growth* M&A** FY 2019 FY 2018 Growth* M&A** Management commentary For DSV Solutions 2019 was a year 4,729 3,853 +8.7% 504 14,390 13,229 +1.9% 792 with focus on stabilisation and Revenue preparation for future growth. 1,401 837 +8.6% 118 4,969 3,035 +7.1% 218 After a
Slide 10: P&L 2019
P&L 2019 (DKKm) FY 2019 IFRS 16 FY 2019 FY 2018 Organic reported impact* (excl. (excl. growth** Management commentary IFRS 16*) IFRS 16) Significant impact from the implementation of Revenue 94,701 - 94,701 79,053 2.0% IFRS 16 Leases and from the Panalpina Direct costs 70,947 (2,289) 73,236 61,564 G
Slide 11: Cash flow FY 2019
Cash flow FY 2019 (DKKm) FY 2019 FY 2018 Variance (excl. IFRS 16) Management commentary EBIT before special items 6,654 5,450 1,204 Depreciation of right-of-use assets 2,734 30 2,704 Cash flow from operating activities was Depreciation and amortisation of owned assets 904 732 172 EBITDA before speci
Slide 12: Outlook 2020
Outlook 2020 Main assumptions (DKKm) Outlook 2020 Actual 2019 Operating profit before special items 8,200 - 8,700 6,654 Special items, in the level of 1,500 800 Effective tax rate 23% 25.8% Main assumptions We expect growth rates in the transport markets for 2019 to be in line with GDP growth (2-3%)
Slide 13: Allocation to shareholders
Allocation to shareholders Total announced allocation to shareholders In 2019, a total of 7.4 million shares were bought back at a purchase price of DKK 4,888 million (average price of DKK 664.1 per share). At 31 December 2019, DSV Panalpina held 6.1 million treasury shares. New share buyback progra
Slide 14: Appendix
Appendix 14 | DSV Panalpina – Annual Report 2019
Slide 15: DSV Panalpina
DSV Panalpina Fourth largest global freight forwarder Global operations One company – three divisions DSV Panalpina Hedehusene, Denmark 60,000 Air & Sea Headquarters Employees A global network Nasdaq Copenhagen No majority shareholder – 100% free float 1,400 Road BBB+ Overland transport Credit ratin
Slide 16: Working together to support the entire supply chain
Working together to support the entire supply chain 60,000 people in more than 80 countries at your service Third-party logistics services (3PL) 4PL services Air and Sea Road Solutions Lead Logistics DSV Air & Sea DSV Road DSV Solutions Enabling intelligent supply chains • Access to all markets thro
Slide 17: DSV Panalpina
DSV Panalpina Global transport and logistics 60,000 Employees 1,400 Offices and logistics facilities +80 Countries 120 Billion DKK annual revenue DSV Panalpina countries 17 | DSV Panalpina – Annual Report 2019
Slide 18: Our four strategic focus areas
Our four strategic focus areas We want to be a leading freight forwarder targeting extensive growth Customers Growth Operational We offer our customers global and competitive transport and Excellence logistics services of a consistent high quality. Growth We actively pursue profitable growth balance
Slide 19: Focus on customer needs
Focus on customer needs Industry-specific expertise and solutions Automotive Industrial Chemicals Retail & Fashion Healthcare Technology Oil & Gas Perishables 19 | DSV Panalpina – Annual Report 2019
Slide 20: Creating value in the transport and logistics business
Creating value in the transport and logistics business From A to B and much more End-to-end solutions Freight forwarding Transport Logistics and From shipper To consignee services (subcontracted) distribution services • Shipment booking • Warehousing • Pick-up • Picking/packing 3PL services • Wareho
Slide 21: Competitive landscape
Competitive landscape Third-party logistics providers by 2018 revenue in USD billion 1 DHL Logistics (DE) 33.4 2 Kuehne + Nagel (CH) 25.4 3 DB Schenker (DE) 19.5 4 DSV Panalpina (DK) 18.7 5 Nippon Express (JP) 18.2 6 C. H. Robinson (US) 15.5 7 XPO Logistics (US) 11.8 8 UPS (US) 9.8 9 J. B. Hunt (US)
Slide 22: From local haulier to global player
15% From local haulier to global player 18% A global network created through organic growth and M&A 67% Breakdown of EBIT by division Air & Sea 2019 Road Solutions 3% Breakdown of EBIT by geography 38% EMEA Americas 59% 2016 APAC 100% 2008 2006 2000 1989 1997 1976 797 DKKm 2,694 DKKm 19,478 DKKm 31,
Slide 23: Achieving more together
Achieving more together DSV+Panalpina 60,000 employees DKK 120 billion pro forma revenue 1.7 million tonnes of air freight DSV: 47,000 Panalpina: 14,000 DSV: DKKm 80,000 Panalpina: DKKm 40,000 DSV: 700,000 Panalpina: 1,000,000 2.6 million TEUs sea freight DKK +33 billion Road revenue 6 million m2 wa
Slide 24: Diversification of business mix and geography
DSV Panalpina Diversification of business mix and geography Combined DSV Panalpina (pro forma) 9% 14% 16% (Revenue) 23% Division 33% 38% 53% 26% 39% 22% 27% Air Sea Road Solutions / Logistics 19% 21% Geography (Revenue) 26% 44% 10% 17% 62% 71% 30% AMERICAS APAC EMEA Note: Illustrative purposes only
Slide 25: Trade lane statistics
Trade lane statistics Pro forma 2019 Other 13% Other 9% APAC - EMEA 17% Intra Americas 6% APAC - EMEA 28% Intra Americas 9% Intra APAC 10% EMEA - APAC 14% APAC - Americas 9% 1.7 million tonnes of air freight APAC - Americas 2.6 million TEUs sea freight 11% EMEA - APAC 10% Americas - EMEA 9% Intra EM
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 2.3% 4.6% 3.2% 3.1% 3.5% 3.7% 3.0% 3.2% Global trade 4.4% 4.3% 2.8% 2.4% 4.2% 4.2% 3.4% 3.9% multiplier ^ (x) 1.9x 0.9x 0.9x 0.8x 1.2x 1.1x 1.1x 1.2x Container volumes* 9.0% 7.0% 1.2% 3.2
Slide 27: We are committed to being responsible
We are committed to being responsible DSV Panalpina has been committed to UN Global Compact since 2009 The UN Global Compact is We focus on the five following UN Sustainable based on the main areas Development Goals: • Human rights • 8: Decent Work and Economic Growth • Labour • 12: Responsible Cons
Slide 28: Partnering with Red Cross | Red Crescent
Partnering with Red Cross | Red Crescent Since 2017, the Danish Red Cross has been DSV Panalpina’s international human aid partner. DSV Panalpina’s contribution includes • Warehouse space for storage of emergency relief equipment • Transport of equipment to ports or airports • Financial support of i
Slide 29: Setting environmental targets
Setting environmental targets Science-Based Targets initiative • DSV Panalpina is committed to the Science-Based Targets initiative • Panalpina was one of the first in the logistics sector to commit in 2015, and this will continue in DSV Panalpina • Targets are set according to Greenhouse Gas Protoc
Slide 30: Capital structure and capital allocation
Capital structure and capital allocation Total announced allocation to shareholders Distribution of capital (DKKm) Dividend Share buyback Target for financial Net interest-bearing debt below 2.0x EBITDA before special items. 6,000 gearing 1. Repayment of debt (if above target gearing ratio). Free ca
Slide 31: Long-term financial targets to be published
Long-term financial targets to be published 2020 financial targets reached by H1-2019 Actual 2019 Actual H1-2019 Previous 2020 targets Management commentary Operating margin 7.0% 7.7% >7.5% The 2020 financial targets were set Conversion ratio 28.0% 29.7% >30.0% in 2016, and reached, in all essential
Slide 32: Solid financial performance over the years
Solid financial performance over the years Revenue Gross 24,000 (DKKm) 90,000 profit 80,000 (DKKm) 20,000 70,000 60,000 16,000 50,000 12,000 40,000 30,000 8,000 20,000 4,000 10,000 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Slide 33: Financial performance per division
Financial performance per division Selected KPIs DSV Panalpina DSV Air & Sea EBIT DKKm Operating margin (Rhs) Conversion ratio (Rhs) EBIT DKKm Operating margin (Rhs) Conversion ratio (Rhs) 7,000 35% 4,800 45% 6,000 30% 40% 4,000 35% 5,000 25% 3,200 30% 4,000 20% 25% 2,400 3,000 15% 20% 1,600 15% 2,0
Slide 34: Cash flow and ROIC
Cash flow and ROIC Operating cash flow (DKKm) ROIC before tax (%) 8,000 30% 7,000 25% 6,000 5,000 20% 4,000 15% 3,000 10% 2,000 5% 1,000 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Invested capital (DKKm) Cash conversio
Slide 35: Diluted adjusted earnings per share (DKK)
Diluted adjusted earnings per share (DKK) 22.1 22.1 18.4 13.4 12.9 10.5 10.1 9.5 7.8 6.1 6.2 3.9 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CAGR 12 .4% 35 | DSV Panalpina – Annual Report 2019
Slide 36: P&L 2019 Quarter Full-year
P&L 2019 Quarter Full-year (DKKm) Q4 2019 IFRS 16 impact* Q4 2019 Q4 2018 FY 2019 IFRS 16 impact* FY 2019 FY 2018 reported (excl. IFRS 16*) (excl. IFRS 16) reported (excl. IFRS 16*) (excl. IFRS 16) Revenue 30,122 - 30,122 20,945 94,701 94,701 79,053 Direct costs 23,038 (573) 23,611 16,498 70,947 (2,
Slide 37: IFRS 16 impact – divisions
IFRS 16 impact – divisions Quarter Full-year (DKKm) Q4 2019 IFRS 16 impact* Q4 2019 Q4 2018 FY 2019 IFRS 16 impact* FY 2019 FY 2018 reported (excl. IFRS 16*) (excl. IFRS 16) reported (excl. IFRS 16*) (excl. IFRS 16) Air & Sea Revenue 18,077 - 18,077 9,838 51,151 - 51,151 36,972 Gross profit 4,121 34
Slide 38: Growth tables Q4-19 and full-year 2019
Growth tables Q4-19 and full-year 2019 DSV Group Currency translation Q4-19 (excl. IFRS (DKKm) Q4-18 adjustments M&A, net* Organic growth Organic growth** 16)*** IFRS 16 Impact*** Q4-19 Revenue 20,945 210 9,197 (230) (1.1%) 30,122 - 30,122 Gross profit 4,447 51 1,816 197 4.5% 6,511 573 7,084 EBIT be
Slide 39: Growth tables Q4-19 and full-year 2019
Growth tables Q4-19 and full-year 2019 DSV Road Currency translation Q4-19 (excl. IFRS (DKKm) Q4-18 adjustments M&A, net* Organic growth Organic growth** 16)*** IFRS 16 Impact*** Q4-19 Revenue 7,893 9 133 (47) (0.6%) 7,988 - 7,988 Gross profit 1,311 1 28 20 1.5% 1,360 172 1,532 EBIT before special i
Slide 40: Quarterly P&L details
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 Q3 2019 Q4 2019 FY 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 24,521 30,122 94,701 Direct costs 14,003 14,707 1
Slide 41: 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 Q3 2019 Q4 2019 FY 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 13,981 18,077 51,151 Direct costs 6,354 6,656 6,
Slide 42: 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 Q3 2019 Q4 2019 FY 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 7,698 7,988 31,621 Direct costs 6,200 6,368 6,235 6,5
Slide 43: Our approach to IT
Our approach to IT Strong platforms with ongoing development and investments Consolidated IT landscape with one Millions of shipments are booked and myDSV, our online booking platform, transport/warehouse management system per tracked by our customers enables our customers to easily division ensurin
Slide 44: Our IT landscape
Our IT landscape Designed to support good customer service, high data quality and growth Customer myDSV ∙ EDI / API Air & Sea Road Solutions • Global transport management • One primary transport • Global warehouse system management system management system • Off-the-shelf system • Partly off-the-she
Slide 45: myDSV
myDSV Our self-service platform Online, convenient and fast. myDSV is more than a booking portal; it also supports features such as: Track & Trace Reporting Notifications Upload bookings Label printing 45 | DSV Panalpina – Annual Report 2019
Slide 46: Innovation in DSV
Innovation in DSV Track On our radar in 2020 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 47: Investor contact information
Investor contact information Share information Financial calendar 2020 DSV Panalpina A/S is listed on the Copenhagen stock exchange under the symbol ‘DSV’. 16 Mar. 2020 Annual General Meeting 2020 For further company information, please visit: www.dsv.com 30 Apr. 2020 Interim Financial Report, First