Slide 1: Full-Year 2023 Results
FULL-YEAR 2023 RESULTS DSV A/S Investor presentation
Slide 2: Content
Content • Highlights • Business segments • Financial review • Outlook for 2024 • Our executive management team • 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 be
Slide 3: Highlights
Highlights • Good financial performance in soft markets. EBIT for 2023 in line with our guidance. • Solid cash flow and DKK 15.4 billion allocated to shareholders in 2023. • Eventful year with key focus on our organic growth strategy and NEOM joint venture. • EBIT guidance 2024: DKK 15.0 – 17.0 bill
Slide 4: Air & Sea
Air & Sea Management commentary (DKKm) Q4 2023 Q4 2022 Growth* FY 2023 FY 2022 Growth* • Gross profit and EBIT impacted by Gross profit Air 3,030 4,063 (22.7%) 13,420 18,603 (25.5%) lower volumes and lower yields compared to the extraordinary 2022. Gross profit Sea 2,949 3,214 (4.1%) 12,550 16,021 (
Slide 5: Air freight Q4 2023
Air freight Q4 2023 • Negative volumes on most major trade lanes in 2023 – most significantly on Trans-Pacific. • Volume trends improved towards the end of the year. • Gross profit levels are stabilising. Gross profit (DKKm) Volume & yields YoY change: (23%)* Yield YoY change: (16%)* FX impact: (3%)
Slide 6: Sea freight Q4 2023
Sea freight Q4 2023 • During 2023, the Trans-Pacific and Trans-Atlantic trade lanes saw the weakest performance. • Volume turned positive (year-on-year) in Q4-23 – partly due to easier comparison figures. • Gross profit levels seem to be stabilising. • Q4-2023 was not impacted by Red Sea situation.
Slide 7: Road
Road Management commentary (DKKm) Q4 2023 Q4 2022 Growth* FY 2023 FY 2022 Growth* • Market characterised by declining activity and lower rates – especially towards the Revenue 9,375 10,078 (5.7%) 38,155 41,507 (6.4%) end of 2023. • The division performed well under these Gross profit 1,937 1,910 2.6
Slide 8: Solutions
Solutions Management commentary (DKKm) Q4 2023 Q4 2022 Growth* FY 2023 FY 2022 Growth* • During 2023, most industries were impacted by the general decline in Revenue 6,079 6,224 0.2% 23,140 24,409 (2.4%) global trade, but momentum improved towards year end. Good momentum in e-commerce sector. Gross
Slide 9: P&L 2023
P&L 2023 Management commentary (DKKm) Q4 2023 Q4 2022 Growth* FY 2023 FY 2022 Growth* Headlines • During 2023, revenue was impacted by lower freight rates and declining Revenue 36,528 51,231 (26.3%) 150,785 235,665 (34.1%) volumes. Gross profit 10,447 11,656 (7.5%) 43,818 52,149 (13.4%) • Gross marg
Slide 10: Cash flow and financial ratios
Cash flow and financial ratios (DKKm) FY 2023 FY 2022 Variance Management commentary EBITDA before special items 22,997 30,275 (7,278) • Cash conversion ratio for the year was Change in working capital 826 2,840 (2,014) close to 100%. Tax, interest, change in provisions, etc. (7,102) (5,605) (1,497)
Slide 11: Allocations to shareholders
Allocations to shareholders Management commentary • Proposed dividend of DKK 7.00 per share for 2023. • 11.1 million shares bought back in 2023 at an average price of DKK 1,264. • New safe harbour share buyback programme of DKK 1.0 billion starting 1 February 2024 and running until 23 April 2024. •
Slide 12: Outlook 2024
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, but our strategic growth initiatives may only hav
Slide 13: Group Executive Committee
Group Executive Committee Setting a new – and highly experienced – team Group CEO Group CFO Jens H. Lund Group COO Michael Ebbe Brian Ejsing CEO, DSV Air & Sea CEO, DSV Road CEO, DSV Solutions Group CCO Group CIO Frank Sobotka* Søren Schmidt Albert-Derk Bruin Morten Landry Jesper Riis *) Carsten Tro
Slide 14: Appendix
DISV cictat transport and Logistics
Slide 15: 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 Employees A global network A3 (Stable) by Moody’s A- (Stable) by Standard & Poors +1,600 Road Fortune Global 500 company Overland transport in Europe, Off
Slide 16: 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 17: 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 18: 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 19: Our market position
Our market position 1st 3rd 3rd ~10th Air freight Sea freight Road freight (Europe) Logistics solutions Source: Transport Intelligence (by 2022 revenue) 19
Slide 20: 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 21: 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 22: Vertical specialists closely connected to our customers
Vertical specialists closely connected to our customers Our industry-specific expertise and solutions offered globally Specialised Air & Sea verticals Retail & Fashion Automotive Other industries Oil & Gas and Chemicals ~25% ~15% ~20% Semiconductors Project Logistics Technology Healthcare & Pharma E
Slide 23: DSV x NEOM joint venture
DSV x NEOM joint venture
Slide 24: Why the joint venture with NEOM
Sourcing to NEOM from across the world Why the 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 sup
Slide 25: 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 26: ESG
ESG • 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 throughout the duration of the proj
Slide 27: Sustainability
Sustainability
Slide 28: 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 29: 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 30: 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 31: 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 new introducing the first customer-ready product renewable energy-powered - carbon footprints
Slide 32: 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 33: Our approach to IT
Our approach to IT
Slide 34: 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 35: Digital 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 36: 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 37: Financial details
Financial details SF» eS
Slide 38: 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. • We assume that annual GDP growth will be Conversion ratio 40.4 >45.0 around 3% and transport market g
Slide 39: Earnings per share
Earnings per share • Flexible and scalable business model • Performance driven organisation • Strong M&A track record • 21% CAGR* in EPS from 2014-2023 • Graph illustrates diluted adjusted earnings per share of DKK 1 21% CAGR* 2014-2023 81.4 58.7 50.9 26.5 22.1 22.1 18.4 10.5 12.9 13.4 0.0 2014 2015
Slide 40: 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 41: 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 42: 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 43: Divisional and geographical exposure 2023
Divisional and geographical exposure 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% 22%
Slide 44: 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 45: 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 46: 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 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 Direct costs 70,947 87,398 144,691 48,248 48,671 47,022 39,5
Slide 47: 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 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 Direct costs 38,634 56,780 108,132 37,250 3
Slide 48: 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 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 Direct costs 25,465 24,257 28,321 8,250 8,76
Slide 49: Balance sheet
Balance sheet (DKKm) Assets 31.12.2023 31.12.2022 Variance Equity and liabilities 31.12.2023 31.12.2022 Variance Intangibles assets 77,106 77,674 (568) DSV shareholders’ share of equity 68,703 71,519 (2,816) Right-of-use assets 15,655 14,694 961 Non-controlling interests 263 222 41 Property, plant a
Slide 50: 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