AI assistant
DSV Interim / Quarterly Report 2021
3363_rns_2021-07-29_ad63940d-521e-4ffe-ae0c-9d979c104bd6.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
DSV
INTERIM FINANCIAL REPORT H1 2021
Company Announcement No. 900
29 July 2021
Selected key figures and ratios for the period 1 January – 30 June 2021
| (DKKm) | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Key figures and ratios | ||||
| Revenue | 37,831 | 28,782 | 71,447 | 56,091 |
| Gross profit | 8,333 | 7,386 | 16,118 | 14,070 |
| Operating profit (EBIT) before special items | 3,571 | 2,613 | 6,638 | 4,179 |
| Profit after tax | 2,527 | 1,390 | 4,856 | 1,721 |
| Adjusted earnings for the period | 2,580 | 1,838 | 4,970 | 2,593 |
| Adjusted free cash flow | 2,817 | 3,356 | ||
| Conversion ratio | 42.9% | 35.4% | 41.2% | 29.7% |
| Diluted adjusted earnings per share of DKK 1 for the last 12 months | 37.1 | 20.8 |
Jens Bjørn Andersen, Group CEO: "We are proud to report strong results for the first six months of 2021, where we deliver an EBIT result equivalent to our full-year EBIT of 2019. This is a clear testament to the successful integration of Panalpina and a strong performance by our organisation in an extraordinary market environment. The logistics markets continue to be characterised by tight capacity, congestion and low visibility, and we are doing our best to find solutions for our customers and keep their supply chains flowing.
We still expect to close the Agility Global Integrated Logistics transaction in Q3 2021. The preparations for the integration are tracking the plans, and we look forward to combining the two global networks and creating an industry leader in logistics."
Outlook for 2021
Based on the strong financial performance for the first six months of 2021 and a positive outlook for the remainder of the year, we upgrade the full-year outlook for 2021 as follows:
- EBIT before special items is expected to be in the range of DKK 12,500 - 13,000 million (previously DKK 11,750-12,500 million).
- The effective tax rate is expected to approximate 23% (unchanged).
The financial outlook for 2021 is for DSV Panalpina stand-alone and excludes the impact from the acquisition of Agility's Global Integrated Logistics business. The financial outlook will be updated upon closing, which is expected in Q3 2021.
Share buyback
A separate company announcement about the launch of a new share buyback programme of up to DKK 4,000 million will be issued today. The programme will run until 25 October 2021 or earlier if finalised.
Contacts
Investor Relations: Flemming Ole Nielsen, tel. +45 43 20 33 92, [email protected]
Investor Relations: Mads Kristian Hofmeister, tel. +45 43 20 33 88, [email protected]
Investor Relations: Daniela Veleva, tel. +45 43 20 33 87, [email protected]
Media: Maiken Riise Andersen, tel. +45 43 20 30 74, [email protected]
Yours sincerely,
DSV Panalpina A/S
DSV Panalpina A/S, Hovedgaden 630, 2640 Hedehusene, Denmark, tel. +45 43 20 30 40, CVR No. 58233528, www.dsv.com.
DSV Panalpina Group
We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation.
Our reach is global, yet our presence is local and close to our customers. More than 57,000 employees in more than 80 countries work passionately to deliver great customer experiences and high-quality services. Read more at www.dsv.com
Financial highlights
| Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | |
|---|---|---|---|---|
| Results (DKKm) | ||||
| Revenue | 37,831 | 28,782 | 71,447 | 56,091 |
| Gross profit | 8,333 | 7,386 | 16,118 | 14,070 |
| Operating profit before amortisation and depreciation (EBITDA) before special items | 4,545 | 3,666 | 8,561 | 6,270 |
| Operating profit (EBIT) before special items | 3,571 | 2,613 | 6,638 | 4,179 |
| Special items, costs | - | 515 | - | 1,026 |
| Net financial expenses | 253 | 222 | 274 | 819 |
| Profit for the period | 2,527 | 1,390 | 4,856 | 1,721 |
| Adjusted earnings for the period | 2,580 | 1,838 | 4,970 | 2,593 |
| Cash flows (DKKm) | ||||
| Operating activities | 4,491 | 4,373 | ||
| Investing activities | (711) | (417) | ||
| Free cash flow | 3,780 | 3,956 | ||
| Adjusted free cash flow | 2,817 | 3,356 | ||
| Share buyback | (8,603) | (3,030) | ||
| Dividends distributed | (920) | (588) | ||
| Cash flow for the period | (1,912) | 192 | ||
| Financial position (DKKm) | ||||
| DSV Panalpina A/S shareholders' share of equity | 45,029 | 47,326 | ||
| Non-controlling interests | (94) | (97) | ||
| Balance sheet total | 102,147 | 95,013 | ||
| Net working capital | 5,144 | 3,367 | ||
| Net interest-bearing debt | 23,934 | 18,874 | ||
| Invested capital | 67,690 | 66,546 | ||
| Gross investment in property, plant and equipment | 407 | 383 | ||
| Financial ratios (%)* | ||||
| Gross margin | 22.0 | 25.7 | 22.6 | 25.1 |
| Operating margin | 9.4 | 9.1 | 9.3 | 7.5 |
| Conversion ratio | 42.9 | 35.4 | 41.2 | 29.7 |
| Effective tax rate | 23.8 | 25.9 | 23.7 | 26.3 |
| ROIC before tax | 17.8 | 16.0 | ||
| Return on equity (ROE) | 16.0 | 10.5 | ||
| Solvency ratio | 44.1 | 49.8 | ||
| Gearing ratio | 1.5 | 1.6 | ||
| Share ratios* | ||||
| Earnings per share of DKK 1 for the last 12 months | 32.8 | 14.8 | ||
| Diluted adjusted earnings per share of DKK 1 for the last 12 months | 37.1 | 20.8 | ||
| Number of shares issued ('000) | 224,000 | 230,000 | ||
| Number of treasury shares ('000) | 3,451 | 2,738 | ||
| Average number of shares issued ('000) for the last 12 months | 225,035 | 222,381 | ||
| Average diluted number of shares ('000) for the last 12 months | 229,596 | 225,623 | ||
| Share price end of period (DKK) | 1,462.5 | 809.8 | ||
| Non-Financials | ||||
| Number of full-time employees at 30 June | 59,871 | 53,399 |
- For a definition of key figures and ratios, please refer to page 79 of the 2020 DSV Panalpina Annual Report.
Page 2 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Management's commentary
The Group achieved a gross profit of DKK 16,118 million for the first six months of 2021, a growth of 18.0% compared to the same period last year. The growth was driven by higher activity and extraordinary market conditions following COVID-19.
EBIT before special items for H1 2021 came to DKK 6,638 million, up by 64.7%. The growth was attributable to the growth in gross profit and a higher productivity, reflected in a record-high conversion ratio of 41.2% for the Group.
For the rolling 12-month period ended 30 June 2021, the Group achieved 78.4% growth in diluted and adjusted earnings per share.
FINANCIAL DEVELOPMENT 2020 - 2021
| (DKKm) | Q2 2020 | Currency translation | Growth | Growth %* | Q2 2021 |
|---|---|---|---|---|---|
| Revenue | 28,782 | (628) | 9,677 | 34.4% | 37,831 |
| Gross profit | 7,386 | (146) | 1,093 | 15.1% | 8,333 |
| EBIT before special items | 2,613 | (70) | 1,028 | 40.4% | 3,571 |
| Gross margin (%) | 25.7 | 22.0 | |||
| Operating margin (%) | 9.1 | 9.4 | |||
| Conversion ratio (%) | 35.4 | 42.9 | |||
| (DKKm) | YTD 2020 | Currency translation | Growth | Growth %* | YTD 2021 |
| --- | --- | --- | --- | --- | --- |
| Revenue | 56,091 | (1,752) | 17,108 | 31.5% | 71,447 |
| Gross profit | 14,070 | (413) | 2,461 | 18.0% | 16,118 |
| EBIT before special items | 4,179 | (148) | 2,607 | 64.7% | 6,638 |
| Gross margin (%) | 25.1 | 22.6 | |||
| Operating margin (%) | 7.5 | 9.3 | |||
| Conversion ratio (%) | 29.7 | 41.2 |
- Growth including M&A and in constant currencies
Acquisition of Agility's Global Integrated Logistics business
On 27 April 2021, DSV Panalpina announced an agreement to acquire Agility's Global Integrated Logistics business (GIL). Closing of the transaction is subject to relevant regulatory approvals and the overall steps in combining DSV and GIL are progressing according to plan. Closing is expected in Q3 2021. DSV Panalpina will acquire GIL, the global logistics division of Agility, in an all-share transaction.
GIL is a leading global transport and logistics provider with a strong footprint in emerging markets. GIL generated revenues of approximately USD 4.0 billion (DKK 26.0 billion) in 2020 and operates a global network across 100+ countries (including agents). GIL has a global workforce of approximately 17,000 people.
Based on 2020 annual revenue and headcount the combination with GIL is expected to increase DSV Panalpina's annual revenue by approximately 23%, which will rank the combined company in the freight forwarding industry top three with a pro forma revenue of approximately USD 22 billion (DKK 142 billion) and a combined workforce of more than 70,000 employees.
Transactional overview and further details of the agreement are provided in DSV Panalpina Company Announcement No. 881.
Results for the period
Revenue
For the first six months of 2021, revenue amounted to DKK 71,447 million, compared to DKK 56,091 million last year.
Page 3 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Revenue growth by division is specified below:
| (DKKm) | Q2 2021 | Growth* | YTD 2021 | Growth* |
|---|---|---|---|---|
| Air & Sea | 25,948 | 40.3% | 48,872 | 42.7% |
| Road | 8,663 | 23.4% | 16,719 | 12.7% |
| Solutions | 3,997 | 23.5% | 7,606 | 16.2% |
| Group and eliminations | (777) | (1,750) | ||
| Total | 37,831 | 34.4% | 71,447 | 31.5% |
- Growth including M&A and in constant currencies
In Air & Sea the revenue growth was driven by higher freight rates and also by double-digit growth in transported volumes, especially in Q2 2021. The market was negatively impacted by COVID-19 in Q2 2020, but activity levels have recovered in most markets, most significantly on the Trans-Pacific trade lanes.
The pandemic continues to create congestion at ports and lack of equipment, which impact available capacity for both air freight and sea freight. This has led to record-high freight rates and for sea freight the situation has worsened during Q2 2021.
Road and Solutions also saw strong growth in revenue, driven by recovery of volumes after the low point in Q2 2020. Growth in Road and Solutions was also positively impacted by a couple of small acquisitions (Prime Cargo and Globeflight).
Revenue by division, H1 2021
Gross profit
For the first six months of 2021, gross profit amounted to DKK 16,118 million, compared to DKK 14,070 million last year. Gross profit growth by division is specified below:
| (DKKm) | Q2 2021 | Growth* | YTD 2021 | Growth* |
|---|---|---|---|---|
| Air & Sea | 5,142 | 13.9% | 9,930 | 21.3% |
| Road | 1,768 | 22.9% | 3,425 | 15.9% |
| Solutions | 1,377 | 8.6% | 2,725 | 9.9% |
| Group and eliminations | 46 | 38 | ||
| Total | 8,333 | 15.1% | 16,118 | 18.0% |
- Growth including M&A and in constant currencies
In Air & Sea, the growth in gross profit was driven by improved yields, mainly in sea freight, and in Q2 2021 also by growth in volumes. The yields were positively impacted by the extraordinary market conditions with tight capacity and high freight rates.
In Road and Solutions, the growth in gross profit was driven by a recovery in activity-levels after the lock-downs in 2020.
Gross profit by division, H1 2021
The gross margin was 22.6% for H1 2021, compared to 25.1% for the same period last year. The decline relates to Air & Sea and the impact from pass-through revenue where higher freight rates cause a lower gross margin.
EBIT before special items
EBIT before special items amounted to DKK 6,638 million for the first six months of 2021 compared to DKK 4,179 million last year. EBIT growth by division is specified below:
| (DKKm) | Q2 2021 | Growth* | YTD 2021 | Growth* |
|---|---|---|---|---|
| Air & Sea | 2,843 | 39.5% | 5,236 | 69.0% |
| Road | 476 | 82.4% | 879 | 69.7% |
| Solutions | 278 | 15.8% | 541 | 37.0% |
| Group and eliminations | (26) | (18) | ||
| Total | 3,571 | 40.4% | 6,638 | 64.7% |
- Growth including M&A and in constant currencies
The growth in EBIT was driven by the increase in gross profit in all divisions combined with the effect of cost synergies and savings realised in prior periods.
Conversion ratio for the Group reached 41.2% for H1 2021 against 29.7% for the same period last year. The increase was driven by the full-year impact of synergies and cost savings but is also impacted by the current extraordinary market conditions.
EBIT by division, H1 2021
The improvement reflects the full-year impact of the Panalpina integration synergies and the Group's ability to navigate the current extraordinary market conditions. This is a result of a
INTERIM FINANCIAL REPORT - COMPANY ANNOUNCEMENT NO. 900 - 29 July 2021
highly skilled organisation, scalability of internal processes and systems as well as strong cost management.
Financial items
Financial items totalled a net expense of DKK 274 million for H1 2021, compared to DKK 819 million for the same period last year.
Foreign exchange adjustments amounted to an income of DKK 82 million (H1 2020: expense of DKK 487 million) and was primarily related to intercompany loans and had no cash impact.
| (DKKm) | YTD 2021 | YTD 2020 |
|---|---|---|
| Interest on lease liabilities | 227 | 209 |
| Other interest cost, net | 122 | 114 |
| Interest on pensions | 7 | 9 |
| Foreign exchange adjustments | (82) | 487 |
| Financial expenses | 274 | 819 |
Tax on profit for the period
The effective tax rate was at the expected level and came to 23.7% for H1 2021, compared to 26.3% for H1 2020. The level of around 23% is a normalised level in a year without special items (related to integrations or restructuring programmes) or other non-recurring items.
Profit for the period
Profit for the first six months of 2021 was DKK 4,856 million, compared to DKK 1,721 million for the same period of 2020. The improved profit for the period was driven by higher EBIT, no special items and lower net financial expenses.
Diluted adjusted earnings per share
The rolling 12-month figure increased by 78.4% compared to last year and came to DKK 37.1 per share (2020: DKK 20.8 per share).
Cash flow
CASH FLOW STATEMENT
| (DKKm) | YTD 2021 | YTD 2020 |
|---|---|---|
| Cash flow from operating activities | 4,491 | 4,373 |
| Cash flow from investing activities | (711) | (417) |
| Free cash flow | 3,780 | 3,956 |
| Cash flow from financing activities | (5,692) | (3,764) |
| Cash flow for the period | (1,912) | 192 |
| Free cash flow | 3,780 | 3,956 |
| Repayment of lease liabilities (IFRS 16 impact reversed) | (1,481) | (1,564) |
| Net acquisition of subsidiaries and activities | 193 | |
| Special items (restructuring costs) | 325 | 964 |
| Adjusted free cash flow | 2,817 | 3,356 |
Cash flow from operating activities was positively affected by higher EBITDA before special items, but this was offset by an increase in NWC due to higher revenue during H1 2021.
During 2021, DSV acquired Globeflight, a Road freight business based in South Africa.
Net working capital
On 30 June 2021, the Group's net working capital was DKK 5,144 million, compared to DKK 3,367 million on 30 June 2020.
Relative to full-year revenue, the net working capital amounted to 3.9% on 30 June 2021 (30 June 2020: 3.0%). Q2-20 was impacted by extended payment-terms on VAT, duties and other payments to authorities in certain countries.
During H1 2021 NWC has been impacted by higher activity across all divisions, but also by changes in the activity mix. Driven by higher volumes and rate increases, the Air & Sea division achieved the highest growth rate in H1 2021 and the division generally has a higher NWC than the other divisions.
Furthermore, funds tied up in a specific property development have temporarily increased our NWC with approximately DKK 900 million on 30 June 2021. The facility will be divested in Q4 2021 and adjusted for the above the underlying NWC would be 3.2% of full-year revenue.
Capital structure and finances
DSV Panalpina A/S shareholders' share of equity
DSV Panalpina shareholders' share of equity was DKK 45,029 million on 30 June 2021 (DKK 47,385 million on 31 December 2020). Equity decreased due to distribution to shareholders which was partly offset by profit for the period and currency translation.
On 30 June 2021, the Company's portfolio of treasury shares was 3,450,769 shares. On 28 July 2021, the portfolio of treasury shares was 4,326,844 shares.
On 15 April 2021, the share capital was reduced to DKK 224 million through the cancellation of 6 million treasury shares of DKK 1.
The solvency ratio excluding non-controlling interests was 44.1% on 30 June 2021 (30 June 2020: 49.8%).
DEVELOPMENT IN EQUITY
| (DKKm) | YTD 2021 | YTD 2020 |
|---|---|---|
| Equity at 1 January | 47,385 | 49,430 |
| Profit for the period | 4,854 | 1,713 |
| Currency translation, foreign enterprises | 864 | (1,347) |
| Allocated to shareholders | (9,523) | (3,618) |
| Sale of treasury shares | 649 | 1,098 |
| Other equity movements | 800 | 50 |
| Equity end of period | 45,029 | 47,326 |
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 23,934 million on 30 June 2021, compared to DKK 18,874 million on 30 June 2020.
On 25 February 2021, a 10-year EUR 500 million Eurobond (approximately DKK 3,750) million was issued.
Page 5 of 21
INTERIM FINANCIAL REPORT - COMPANY ANNOUNCEMENT NO. 900 - 29 July 2021
On 30 June 2021, a 12-year EUR 600 million Eurobond (approximately DKK 4,400 million) was issued. The proceeds from this bond were received on 5 July 2021.
The financial gearing ratio (NIBD/EBITDA) was 1.5x on 30 June 2021, compared to 1.6x last year. A new share buyback programme of DKK 4,000 million will be initiated, and we maintain the financial gearing ratio target of: below 2.0x NIBD/EBITDA.
The weighted average duration of the Company's long-term bonds, drawn- and undrawn credit facilities and committed loans, was 5.0 years on 30 June 2021, compared to 5.4 years on 30 June 2020. Including the new 12-year Eurobond received 5 July 2021 the weighted average duration is 6.6 years.
Invested capital and ROIC
The invested capital including goodwill and customer relationships amounted to DKK 67,690 million on 30 June 2021, compared to DKK 66,546 million on 30 June 2020. The increase is mainly due to higher net working capital.
ROIC including goodwill and customer relationships was 17.8% for the rolling 12-month period ended 30 June 2021, compared to 16.0% for the same period last year.
Excluding goodwill and customer relationships ROIC was 66.9% for the rolling 12-month period ended 30 June 2021 compared to 49.4% for the same period last year.
Outlook
Based on the strong financial performance for the first six months of 2021 and a positive outlook for the remainder of the year, we upgrade the full-year outlook for 2021 as follows:
- EBIT before special items is expected to be in the range of DKK 12,500 - 13,000 million (previously DKK 11,750-12,500 million).
- The effective tax rate is expected to approximate 23% (unchanged).
The financial outlook for 2021 is for DSV Panalpina stand-alone and excludes the impact from the acquisition of Agility's Global Integrated Logistics business. The financial outlook will be updated upon closing, which is expected in Q3 2021.
The upgraded outlook for 2021 is based on the assumption that the current situation in the transport markets with strong demand, tight capacity and high rates will continue for the remainder of 2021 and that currency exchange rates will remain at current levels.
INTERIM FINANCIAL REPORT - COMPANY ANNOUNCEMENT NO. 900 - 29 July 2021
DSV Air & Sea
The Air & Sea division operates a global network specialising in transportation of cargo by air and sea. The division offers both conventional freight forwarding services and tailored project cargo solutions.
The division achieved 21.3% growth in gross profit and 69.0% growth in EBIT before special items for H1 2021. The strong growth in earnings was driven by growth in transported volumes and high gross profit per unit and was further supported by the full-year effect of Panalpina synergies and cost savings.
INCOME STATEMENT
| (DKKm) | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Divisional revenue | 25,948 | 19,144 | 48,872 | 35,818 |
| Direct costs | 20,806 | 14,481 | 38,942 | 27,280 |
| Gross profit | 5,142 | 4,663 | 9,930 | 8,538 |
| Other external expenses | 663 | 736 | 1,416 | 1,533 |
| Staff costs | 1,435 | 1,530 | 2,880 | 3,209 |
| EBITDA before special items | 3,044 | 2,397 | 5,634 | 3,796 |
| Amortisation and depreciation | 201 | 285 | 398 | 554 |
| EBIT before special items | 2,843 | 2,112 | 5,236 | 3,242 |
KEY FIGURES AND RATIOS
| Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | |
|---|---|---|---|---|
| Gross margin (%) | 19.8 | 24.4 | 20.3 | 23.8 |
| Operating margin (%) | 11.0 | 11.0 | 10.7 | 9.1 |
| Conversion ratio (%) | 55.3 | 45.3 | 52.7 | 38.0 |
| Number of full-time employees | 18,067 | 18,723 | ||
| Total invested capital (DKKm) | 46,431 | 45,364 | ||
| Net working capital (DKKm) | 5,582 | 3,864 | ||
| ROIC before tax (%) | 19.7 | 19.6 |
Market development
Freight volume growth
| DSV Q2 2021 | Market Q2 2021 | DSV YTD 2021 | Market YTD 2021 | |
|---|---|---|---|---|
| Sea freight – TEUs | 12% | 10-15% | 6% | 10-13% |
| Air freight – tonnes | 26% | 25-30% | 11% | 15-18% |
Market growth rates are based on DSV estimates. Airfreight is adjusted for discontinued activities.
Global supply chains continue to be impacted by inefficiencies caused by the pandemic, impacting both the demand and available capacity. For both air and sea, the volume development must be seen in light of the Pandemic, which had a negative impact on volumes, especially in Q2 2020. The market has recovered, and, overall, volumes are back at or above 2019 levels.
The sea freight market continues to be characterised by robust demand and tight capacity due to port congestion and lack of equipment/containers. Freight rates are record high, schedule reliability is low, and during Q2 2021 the challenges have only increased.
DSV achieved 12% volume growth in sea freight in Q2 2021 (6% YTD 2021), and considering our relatively low exposure to the high-growth Trans-Pacific trade lane, we estimate that we have been able to gain market share on our main markets in Q2 2021. Securing additional capacity has been a main obstacle to gaining new customers during 2021 as we prioritise existing customers.
In air freight, limited belly space capacity in passenger planes continues to impact the available capacity and is keeping rates high. The rollout of vaccinations is starting to show a positive capacity impact due to more belly capacity entering the market, although this is primarily relevant for regional and domestic
Page 7 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
passenger flights, and we only expect a gradual return of long-haul passenger flights.
On a like for like basis (adjusted for disposal of Airflo perishables activities as per 1 July 2020), DSV achieved growth of approximately 26% in Q2 2021 (YTD 2021: 11%) which is in line with market growth.
Divisional revenue
The division's revenue amounted to DKK 48,872 million for the first six months of 2021, compared to DKK 35,818 million for the same period last year. The growth for the period was 42.7%.
For Q2 2021, revenue amounted to DKK 25,948 million, compared to DKK 19,144 for the same period last year. Growth for the quarter was 40.3%.
The growth in revenue in H1 2021 was driven by the elevated freight rates and during Q2 2021 also by double digit growth in volumes, for both air and sea.
All regions contributed to the strong growth in revenue for the first six months of 2021, and in line with market trends, the division saw the strongest growth in APAC and Americas, where the China-US trade is growing at a high pace. The growth in APAC was, however, also impacted by the exceptional surge in demand for higher yielding goods, incl. PPE, in Q2 2020. This market has now normalised, and as a consequence, the division saw a decline in gross profit from air freight in Q2 2021 compared to the same period last year.
Gross profit
For the first six months of 2021, gross profit amounted to DKK 9,930 million, compared to DKK 8,538 million for the same period last year, which corresponds to a growth of 21.3%.
For Q2 2021, gross profit amounted to DKK 5,142 million, compared to DKK 4,663 million for the same period last year, which corresponds to a growth of 13.9%.
The growth in the first six months of 2021 was driven by strong yields per unit in both air & sea, and in Q2 2021 also by double-digit volume growth.
The market conditions with tight capacity, congestion and disruption on the global logistics markets continue to have a positive impact on gross profit per TEU (sea freight) and per tonne (air freight). Our skilled freight forwarders, scale and strong carrier relationships enable us to find transport solutions for our customers, despite the disruption caused by the pandemic. At the same time, disruptions impact the time consumption per shipment as our freight forwarders work hard to find the most optimal solutions for our customers.
The division's gross margin was 20.3% for H1 2021, compared to 23.8% last year. The decline was due to the impact from pass-through revenue, where higher freight rates cause lower gross margin.
EBIT before special items
EBIT before special items came to DKK 5,236 million for the first six months of 2021, compared to DKK 3,242 million for the same period last year. This corresponds to a growth for the period of 69.0%.
For Q2 2021, EBIT before special items was DKK 2,843 million, compared to DKK 2,112 million for the same period last year, which corresponds to a growth of 39.5%.
The strong EBIT before special items was driven by the growth in gross profit, and, further supported by the full-year impact of cost saving initiatives and realised synergies.
All regions contributed to the strong growth in EBIT before special items with Americas and EMEA delivering the highest growth rates.
The conversion ratio was 52.7% for H1 2021, compared to 38.0% for the same period last year, clearly reflecting the high productivity of the staff, scalability of the systems and cost discipline.
Net working capital
The Air & Sea division's net working capital came to DKK 5,582 million on 30 June 2021, compared to DKK 3,864 million on 30 June 2020.
FINANCIAL DEVELOPMENT 2020 - 2021
| (DKKm) | Q2 2020 | Currency translation | Growth | Growth %* | Q2 2021 |
|---|---|---|---|---|---|
| Divisional revenue | 19,144 | (643) | 7,447 | 40.3% | 25,948 |
| Gross profit | 4,663 | (147) | 626 | 13.9% | 5,142 |
| EBIT before special items | 2,112 | (74) | 805 | 39.5% | 2,843 |
| (DKKm) | YTD 2020 | Currency translation | Growth | Growth %* | YTD 2021 |
| Divisional revenue | 35,818 | (1,561) | 14,615 | 42.7% | 48,872 |
| Gross profit | 8,538 | (349) | 1,741 | 21.3% | 9,930 |
| EBIT before special items | 3,242 | (144) | 2,138 | 69.0% | 5,236 |
- Growth including M&A and in constant currencies
Page 8 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
AIR AND SEA SPLIT
| (DKKm) | Sea freight | Air freight | ||||||
|---|---|---|---|---|---|---|---|---|
| Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | |
| Divisional revenue | 11,751 | 7,087 | 21,700 | 14,231 | 14,197 | 12,057 | 27,172 | 21,587 |
| Direct costs | 9,506 | 5,439 | 17,429 | 10,861 | 11,300 | 9,042 | 21,513 | 16,419 |
| Gross profit | 2,245 | 1,648 | 4,271 | 3,370 | 2,897 | 3,015 | 5,659 | 5,168 |
| Gross margin (%) | 19.1 | 23.3 | 19.7 | 23.7 | 20.4 | 25.0 | 20.8 | 23.9 |
| Volume (TEUs/tonnes) | 573,385 | 512,138 | 1,154,404 | 1,087,952 | 349,210 | 287,452 | 685,517 | 647,427 |
| Gross profit per unit (DKK) | 3,915 | 3,218 | 3,700 | 3,098 | 8,296 | 10,489 | 8,255 | 7,982 |
Page 9 of 21 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
DSV Road
The Road division is among the market leaders in Europe and furthermore has operations in North America and South Africa. The division offers full load, part load and groupage services through a network of more than 200 terminals and operates approximately 20,000 trucks.
For H1 2021, the Road division achieved 69.7% growth in EBIT before special items. The strong growth in earnings was driven by higher activity with 15.9% growth in gross profit and an improved conversion ratio.
INCOME STATEMENT
| (DKKm) | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Divisional revenue | 8,663 | 6,987 | 16,719 | 14,908 |
| Direct costs | 6,895 | 5,556 | 13,294 | 11,942 |
| Gross profit | 1,768 | 1,431 | 3,425 | 2,966 |
| Other external expenses | 272 | 242 | 530 | 529 |
| Staff costs | 779 | 686 | 1,521 | 1,443 |
| EBITDA before special items | 717 | 503 | 1,374 | 994 |
| Amortisation and depreciation | 241 | 240 | 495 | 472 |
| EBIT before special items | 476 | 263 | 879 | 522 |
KEY FIGURES AND RATIOS
| Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | |
|---|---|---|---|---|
| Gross margin (%) | 20.4 | 20.5 | 20.5 | 19.9 |
| Operating margin (%) | 5.5 | 3.8 | 5.3 | 3.5 |
| Conversion ratio (%) | 26.9 | 18.4 | 25.7 | 17.6 |
| Number of full-time employees | 15,503 | 13,408 | ||
| Total invested capital (DKKm) | 9,407 | 9,250 | ||
| Net working capital (DKKm) | (813) | (941) | ||
| ROIC before tax (%) | 18.7 | 13.3 |
Market development
We estimate that the market growth grew by 7-10% in H1 2021 compared to the same period last year. The growth accelerated in Q2 2021 due to the timing impact of COVID-19 lockdowns in 2020.
During H1 2021 international transport activity levels have been close to pre COVID-19 levels whereas we continue to see strong momentum in domestic distribution.
Geographically, activity in Northern Europe remained strong while Southern Europe activity is recovering. UK import and export have largely adapted to the new trade conditions and have stabilised after a turbulent Q1 2021.
The high activity levels are starting to impact the capacity situation and rates are increasing for road freight in Europe.
Divisional revenue
The division's revenue amounted to DKK 16,719 million for the first six months of 2021, compared to DKK 14,908 million for the same period last year, corresponding to an increase of 12.7%.
For Q2 2021, revenue amounted to DKK 8,663 million, compared to DKK 6,987 million for the same period last year, a growth of 23.4%, as the activity in Q2 2020 was impacted by lockdowns.
Geographically, all regions achieved growth in the first six months of 2021, but Southern Europe and South Africa delivered the highest growth rates compared to 2020, as they were severely impacted by COVID-19 in Q2 2020.
Approximately 2% of the growth in Q2 2021 was due to the acquisition of Globeflight, which was included from 1 May 2021. Globeflight has added competencies within courier express services in South Africa.
Page 10 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Gross profit
For the first six months of 2021, gross profit totalled DKK 3,425 million, compared to DKK 2,966 million for the same period last year. This corresponds to an increase of 15.9%.
For Q2 2021, gross profit amounted to DKK 1,768 million, compared to DKK 1,431 million in Q2 2020, which is an increase of 22.9%.
The division's gross margin was 20.5% for H1 2021, compared to 19.9% for the same period last year. The division continues to benefit from increased productivity and utilisation of the network. Our scale and strong network enable us to find efficient transport solutions for the customers despite the disruptions caused by the pandemic.
EBIT before special items
EBIT before special items was DKK 879 million for the first six months of 2021, compared to DKK 522 million for the same period last year. This corresponds to a growth for the period of 69.7%. The growth in EBIT before special items for H1 2021 was driven by the growth in gross profit and an improved conversion ratio.
For Q2 2021, EBIT before special items totalled DKK 476 million compared to DKK 263 million for the same period last year, which corresponds to a growth of 82.4%.
All regions contributed to the growth in earnings, and in line with revenue, the growth in earnings in H1 2021 was highest in regions that were heavily impacted by COVID-19 and lockdowns last year.
The conversion ratio was 25.7% for H1 2021, compared to 17.6% for the same period last year. The division benefits from cost saving initiatives implemented in 2020; however, compared to H1 2020, the cost base in 2021 was impacted by a general increase in activity and cost inflation across the division and certain extra costs related to Brexit.
The number of full-time employees increased by 24% compared to June 2020. The growth was mainly related to blue collar employees and driven by higher activity, Brexit and the acquisition of Globeflight.
Net working capital
The Road division's net working capital was negative by DKK 813 million on 30 June 2021, compared to a negative DKK 941 million on 30 June 2020.
FINANCIAL DEVELOPMENT 2020 - 2021
| (DKKm) | Q2 2020 | Currency translation | Growth | Growth %* | Q2 2021 |
|---|---|---|---|---|---|
| Divisional revenue | 6,987 | 31 | 1,645 | 23.4% | 8,663 |
| Gross profit | 1,431 | 8 | 329 | 22.9% | 1,768 |
| EBIT before special items | 263 | (2) | 215 | 82.4% | 476 |
| (DKKm) | YTD 2020 | Currency translation | Growth | Growth %* | YTD 2021 |
| Divisional revenue | 14,908 | (70) | 1,881 | 12.7% | 16,719 |
| Gross profit | 2,966 | (10) | 469 | 15.9% | 3,425 |
| EBIT before special items | 522 | (4) | 361 | 69.7% | 879 |
- Growth including M&A and in constant currencies
Page 11 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
DSV Solutions
The Solutions division offers warehousing and logistics services globally and controls more than 400 logistics facilities. The service portfolio includes freight management, customs clearance, order management and e-commerce solutions.
For H1 2021, the Solutions division achieved 9.9% growth in gross profit which was translated to 37.0% growth in EBIT before special items.
INCOME STATEMENT
| (DKKm) | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Divisional revenue | 3,997 | 3,256 | 7,606 | 6,697 |
| Direct costs | 2,620 | 1,985 | 4,881 | 4,170 |
| Gross profit | 1,377 | 1,271 | 2,725 | 2,527 |
| Other external expenses | 297 | 244 | 578 | 533 |
| Staff costs | 377 | 365 | 754 | 750 |
| EBITDA before special items | 703 | 662 | 1,393 | 1,244 |
| Amortisation and depreciation | 425 | 428 | 852 | 851 |
| EBIT before special items | 278 | 234 | 541 | 393 |
KEY FIGURES AND RATIOS
| Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 | |
|---|---|---|---|---|
| Gross margin (%) | 34.5 | 39.0 | 35.8 | 37.7 |
| Operating margin (%) | 7.0 | 7.2 | 7.1 | 5.9 |
| Conversion ratio (%) | 20.2 | 18.4 | 19.9 | 15.6 |
| Number of full-time employees | 22,814 | 18,428 | ||
| Total invested capital (DKKm) | 11,969 | 11,560 | ||
| Net working capital (DKKm) | 1,145 | 807 | ||
| ROIC before tax (%) | 11.1 | 9.7 |
Market development
It is our estimate that the market for contract logistics have grown approximately 8-11% in H1 2021 compared to the same period last year. The growth was highest in Q2 2021, as COVID-19 lockdowns had significant effect during most of Q2 2020.
In general, there is good momentum in the market in 2021 with growth across most industries.
Divisional revenue
The division's revenue was DKK 7,606 million for the first six months of 2021, compared to DKK 6,697 million for the same period of 2020. Growth for the period was 16.2%.
Approximately, 3% of the growth in revenue for H1 2021 was due to the acquisition of Prime Cargo, which was included from January 2021.
Regionally, EMEA was the main driver behind the growth in H1 2021 due to implementation of new customers and the general recovery after COVID-19. The division operates with high utilisation of the warehouses, and demand for new and efficient warehouses continues to be high globally.
Gross profit
For the first six months of 2021, gross profit was DKK 2,725 million, compared to DKK 2,527 million for the same period of 2020. Growth for the period was 9.9%.
For Q2 2021, gross profit amounted to DKK 1,377 million, compared to DKK 1,271 million for the same period last year, which corresponds to a growth of 8.6%.
The division's gross margin was 35.8% for H1 2021, compared to 37.7% for the same period last year. The decrease in gross margin is partly due to costs related to customer implementations, mainly during Q2 2021, as well as the fact that gross margin in 2020 was positively impacted by temporary cost savings due to COVID-19.
Page 12 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
EBIT before special items
EBIT before special items was DKK 541 million for the first six months of 2021, compared to DKK 393 million for the same period of 2020, corresponding to an increase of 37.0%.
For Q2 2021, EBIT before special items totalled DKK 278 million, compared to DKK 234 million for the same period last year, which corresponds to a growth of 15.8%.
The growth in EBIT before special items was driven by higher gross profit, and at the same time the division continues to exercise cost discipline and drive up productivity.
The conversion ratio was 19.9% for Q2 2021, compared to 15.6% for the same period last year. The increase is driven by improved productivity and the full-year impact of COVID-19 cost saving initiatives.
The number of full-time employees increased by 24% compared to June 2020. The growth was mainly related to blue collar employees and was driven by higher activity and the acquisition of Prime Cargo.
Net working capital
The division's net working capital came to DKK 1,145 million on 30 June 2021, compared to DKK 807 million on 30 June 2020.
FINANCIAL DEVELOPMENT 2020 - 2021
| (DKKm) | Q2 2020 | Currency translation | Growth | Growth %* | Q2 2021 |
|---|---|---|---|---|---|
| Divisional revenue | 3,256 | (20) | 761 | 23.5% | 3,997 |
| Gross profit | 1,271 | (3) | 109 | 8.6% | 1,377 |
| EBIT before special items | 234 | 6 | 38 | 15.8% | 278 |
| (DKKm) | YTD 2020 | Currency translation | Growth | Growth %* | YTD 2021 |
| Divisional revenue | 6,697 | (149) | 1,058 | 16.2% | 7,606 |
| Gross profit | 2,527 | (47) | 245 | 9.9% | 2,725 |
| EBIT before special items | 393 | 2 | 146 | 37.0% | 541 |
- Growth including M&A and in constant currencies
Page 13 of 21 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Interim financial statements
Income statement
| (DKKm) | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Revenue | 37,831 | 28,782 | 71,447 | 56,091 |
| Direct costs | 29,498 | 21,396 | 55,329 | 42,021 |
| Gross profit | 8,333 | 7,386 | 16,118 | 14,070 |
| Other external expenses | 818 | 795 | 1,667 | 1,662 |
| Staff costs | 2,970 | 2,925 | 5,890 | 6,138 |
| Operating profit before amortisation and depreciation (EBITDA) before special items | 4,545 | 3,666 | 8,561 | 6,270 |
| Amortisation and depreciation | 974 | 1,053 | 1,923 | 2,091 |
| Operating profit (EBIT) before special items | 3,571 | 2,613 | 6,638 | 4,179 |
| Special items, costs | - | 515 | - | 1,026 |
| Financial income | (16) | 91 | 192 | 156 |
| Financial expenses | 237 | 313 | 466 | 975 |
| Profit before tax | 3,318 | 1,876 | 6,364 | 2,334 |
| Tax on profit for the period | 791 | 486 | 1,508 | 613 |
| Profit for the period | 2,527 | 1,390 | 4,856 | 1,721 |
| Profit for the period attributable to: | ||||
| Shareholders of DSV Panalpina A/S | 2,520 | 1,385 | 4,854 | 1,713 |
| Non-controlling interests | 7 | 5 | 2 | 8 |
| Earnings per share: | ||||
| Earnings per share of DKK 1 for the period | 11.4 | 6.1 | 21.8 | 7.5 |
| Diluted earnings per share of DKK 1 for the period | 11.1 | 6.0 | 21.4 | 7.4 |
Page 14 of 21 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Statement of comprehensive income
| (DKKm) | Q2 2021 | Q2 2020 | YTD 2021 | YTD 2020 |
|---|---|---|---|---|
| Profit for the period | 2,527 | 1,390 | 4,856 | 1,721 |
| Items that will be reclassified to income statement when certain conditions are met: | ||||
| Net exchange differences recognised in OCI | 56 | (879) | 861 | (1,349) |
| Fair value adjustments relating to hedging instruments | 1 | 1 | (13) | (5) |
| Fair value adjustments relating to hedging instruments transferred to financial expenses | 2 | 6 | 2 | - |
| Tax on items reclassified to income statement | (3) | 1 | (1) | 1 |
| Items that will not be reclassified to income statement: | ||||
| Actuarial gains/(losses) | 26 | (56) | 173 | (92) |
| Tax relating to items that will not be reclassified | (3) | 15 | (41) | 26 |
| Other comprehensive income, net of tax | 79 | (912) | 981 | (1,419) |
| Total comprehensive income | 2,606 | 478 | 5,837 | 302 |
| Total comprehensive income attributable to: | ||||
| Shareholders of DSV Panalpina A/S | 2,597 | 472 | 5,838 | 296 |
| Non-controlling interests | 9 | 6 | (1) | 6 |
| Total | 2,606 | 478 | 5,837 | 302 |
Page 15 of 21 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Cash flow statement
| (DKKm) | YTD 2021 | YTD 2020 |
|---|---|---|
| Operating profit before amortisation and depreciation (EBITDA) before special items | 8,561 | 6,270 |
| Adjustments: | ||
| Share-based payments | 76 | 65 |
| Change in provisions | (33) | (88) |
| Change in working capital, etc. | (2,509) | (227) |
| Special items | (325) | (964) |
| Interest received | 110 | 126 |
| Interest paid on lease liabilities | (227) | (209) |
| Interest paid, other | (240) | (261) |
| Income tax paid | (922) | (339) |
| Cash flow from operating activities | 4,491 | 4,373 |
| Purchase of intangible assets | (165) | (119) |
| Purchase of property, plant and equipment | (407) | (535) |
| Disposal of intangible assets, property, plant and equipment | 100 | 203 |
| Acquisition of subsidiaries and activities | (193) | - |
| Change in other financial assets | (46) | 34 |
| Cash flow from investing activities | (711) | (417) |
| Free cash flow | 3,780 | 3,956 |
| Proceeds from borrowings | 4,591 | 3,527 |
| Repayment of borrowings | (229) | (2,610) |
| Repayment of lease liabilities | (1,481) | (1,564) |
| Other financial liabilities incurred | 274 | (39) |
| Transactions with shareholders: | ||
| Dividends distributed | (920) | (588) |
| Purchase of treasury shares | (8,603) | (3,030) |
| Sale of treasury shares | 649 | 545 |
| Other transactions with shareholders | 27 | (5) |
| Cash flow from financing activities | (5,692) | (3,764) |
| Cash flow for the period | (1,912) | 192 |
| Cash and cash equivalents 1 January | 4,060 | 2,043 |
| Cash flow for the period | (1,912) | 192 |
| Currency translation | (114) | (284) |
| Cash and cash equivalents end of period | 2,034 | 1,951 |
The cash flow statement cannot be directly derived from the balance sheet and income statement.
| Statement of adjusted free cash flow | YTD 2021 | YTD 2020 |
|---|---|---|
| Free cash flow | 3,780 | 3,956 |
| Acquisition of subsidiaries and activities | 193 | - |
| Special items (restructuring costs) | 325 | 964 |
| Repayment of lease liabilities (IFRS 16 impact reversed) | (1,481) | (1,564) |
| Adjusted free cash flow | 2,817 | 3,356 |
Page 16 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Balance sheet – Assets
| (DKKm) | 30.06.2021 | 31.12.2020 | 30.06.2020 |
|---|---|---|---|
| Intangible assets | 49,512 | 48,665 | 50,469 |
| Right-of-use (ROU) assets | 10,802 | 11,111 | 10,858 |
| Property, plant and equipment | 3,243 | 3,014 | 3,091 |
| Other receivables | 419 | 372 | 461 |
| Deferred tax assets | 2,726 | 2,536 | 2,099 |
| Total non-current assets | 66,702 | 65,698 | 66,978 |
| Trade receivables | 23,358 | 19,038 | 19,087 |
| Contract assets | 5,000 | 3,283 | 3,247 |
| Inventories | 2,337 | 1,426 | 1,276 |
| Other receivables | 2,624 | 2,635 | 2,369 |
| Cash and cash equivalents | 2,034 | 4,060 | 1,951 |
| Assets held for sale | 92 | 110 | 105 |
| Total current assets | 35,445 | 30,552 | 28,035 |
| Total assets | 102,147 | 96,250 | 95,013 |
Balance sheet – Equity and liabilities
| (DKKm) | 30.06.2021 | 31.12.2020 | 30.06.2020 |
|---|---|---|---|
| Share capital | 224 | 230 | 230 |
| Reserves and retained earnings | 44,805 | 47,155 | 47,096 |
| DSV Panalpina A/S shareholders' share of equity | 45,029 | 47,385 | 47,326 |
| Non-controlling interests | (94) | (88) | (97) |
| Total equity | 44,935 | 47,297 | 47,229 |
| Lease liabilities | 9,308 | 9,428 | 8,836 |
| Borrowings | 10,386 | 7,696 | 8,801 |
| Pension obligations | 1,060 | 1,219 | 1,390 |
| Provisions | 1,092 | 1,253 | 1,283 |
| Deferred tax liabilities | 246 | 243 | 364 |
| Total non-current liabilities | 22,092 | 19,839 | 20,674 |
| Lease liabilities | 2,739 | 2,850 | 3,065 |
| Borrowings | 2,567 | 1,185 | 295 |
| Trade payables | 11,964 | 9,926 | 8,710 |
| Accrued cost of services | 7,331 | 5,913 | 5,800 |
| Provisions | 1,318 | 1,525 | 1,169 |
| Other payables | 7,562 | 6,316 | 6,933 |
| Tax payables | 1,639 | 1,399 | 1,138 |
| Total current liabilities | 35,120 | 29,114 | 27,110 |
| Total liabilities | 57,212 | 48,953 | 47,784 |
| Total equity and liabilities | 102,147 | 96,250 | 95,013 |
Page 17 of 21 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Statement of changes in equity at 30 June 2021
Attributable to shareholders of DSV Panalpina A/S
| (DKKm) | Share capital | Reserves | Retained earnings | Total | Non-controlling interests | Total equity |
|---|---|---|---|---|---|---|
| Equity at 1 January 2021 | 230 | (2,836) | 49,991 | 47,385 | (88) | 47,297 |
| Profit for the period | - | - | 4,854 | 4,854 | 2 | 4,856 |
| Other comprehensive income, net of tax | - | 866 | 118 | 984 | (3) | 981 |
| Total comprehensive income for the period | - | 866 | 4,972 | 5,838 | (1) | 5,837 |
| Transactions with shareholders: | ||||||
| Share-based payments | - | - | 76 | 76 | - | 76 |
| Tax on share-based payments | - | - | 573 | 573 | - | 573 |
| Dividends distributed | - | - | (920) | (920) | (1) | (921) |
| Purchase of treasury shares | - | - | (8,603) | (8,603) | - | (8,603) |
| Sale of treasury shares | - | - | 649 | 649 | - | 649 |
| Capital reduction | (6) | 6 | - | - | - | - |
| Dividends on treasury shares | - | - | 28 | 28 | (1) | 27 |
| Other adjustments | - | - | 3 | 3 | (3) | - |
| Total transactions with shareholders | (6) | 6 | (8,194) | (8,194) | (5) | (8,199) |
| Equity at 30 June 2021 | 224 | (1,964) | 46,769 | 45,029 | (94) | 44,935 |
Statement of changes in equity at 30 June 2020
Attributable to shareholders of DSV Panalpina A/S
| (DKKm) | Share capital | Reserves | Retained earnings | Total | Non-controlling interests | Total equity |
|---|---|---|---|---|---|---|
| Equity at 1 January 2020 | 235 | (265) | 49,460 | 49,430 | (111) | 49,319 |
| Profit for the period | - | - | 1,713 | 1,713 | 8 | 1,721 |
| Other comprehensive income, net of tax | - | (1,356) | (61) | (1,417) | (2) | (1,419) |
| Total comprehensive income for the period | - | (1,356) | 1,652 | 296 | 6 | 302 |
| Transactions with shareholders: | ||||||
| Share-based payments | - | - | 65 | 65 | - | 65 |
| Tax on share-based payments | - | - | 76 | 76 | - | 76 |
| Dividends distributed | - | - | (588) | (588) | (1) | (589) |
| Purchase of treasury shares | - | (5) | (3,025) | (3,030) | - | (3,030) |
| Sale of treasury shares | - | 3 | 1,095 | 1,098 | - | 1,098 |
| Capital reduction | (5) | 5 | - | - | - | - |
| Dividends on treasury shares | - | - | 23 | 23 | - | 23 |
| Other adjustments | - | - | (44) | (44) | 9 | (35) |
| Total transactions with shareholders | (5) | 3 | (2,398) | (2,400) | 8 | (2,392) |
| Equity at 30 June 2020 | 230 | (1,618) | 48,714 | 47,326 | (97) | 47,229 |
INTERIM FINANCIAL REPORT - COMPANY ANNOUNCEMENT NO. 900 - 29 July 2021
Notes
1 Accounting policies
This Interim Financial Report has been prepared in accordance with IAS 34 “Interim Financial Reporting” as adopted by the European Union and Danish disclosure requirements for listed companies.
Except as stated below, accounting policies applied in preparing the Interim Financial Report are consistent with those applied in preparing the 2020 DSV Panalpina Annual Report. The 2020 DSV Panalpina Annual Report provides a full description of the Group’s accounting policies.
Changes in accounting policies
The DSV Panalpina Group has implemented the latest amendments to the International Financial Reporting Standards (IFRS) effective as of 1 January 2021 as adopted by the European Union.
None of the amendments implemented has had any material impact on the Group’s financial statements, nor are they expected to have so in the foreseeable future.
2 Management judgements and estimates
In preparing the Interim Financial Statements, Management makes various accounting estimates and judgements that affect the reported amounts and disclosures in the statements and in the notes to the financial statements. These are based on professional experience, historical data and other factors available to Management.
By nature, a degree of uncertainty is involved when carrying out these judgements and estimates, hence actual results may deviate from the assessments made at the reporting date. Judgements and estimates are continuously evaluated, and the effects of any changes are recognised in the relevant period.
Primary financial statement items in which more significant accounting estimates are applied are listed in Chapter 1 of the Notes to the 2020 DSV Panalpina Annual Report to which is referred.
3 New accounting regulations
The IASB has issued a number of new standards and amendments not yet in effect or endorsed by the EU and therefore not relevant for the preparation of the Q2 2021 Interim Financial Report.
None of these are currently expected to carry any significant impact on the financial statements of the DSV Panalpina Group when implemented.
4 Segment information
| (DKKm) | Air & Sea | Road | Solutions | Non-allocated items and eliminations | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | |
| Condensed income statement | ||||||||||
| Revenue | 48,347 | 35,457 | 15,666 | 13,899 | 7,370 | 6,581 | 64 | 154 | 71,447 | 56,091 |
| Intercompany revenue | 525 | 361 | 1,053 | 1,009 | 236 | 116 | (1,814) | (1,486) | - | - |
| Divisional revenue | 48,872 | 35,818 | 16,719 | 14,908 | 7,606 | 6,697 | (1,750) | (1,332) | 71,447 | 56,091 |
| Direct costs | 38,942 | 27,280 | 13,294 | 11,942 | 4,881 | 4,170 | (1,788) | (1,371) | 55,329 | 42,021 |
| Gross profit | 9,930 | 8,538 | 3,425 | 2,966 | 2,725 | 2,527 | 38 | 39 | 16,118 | 14,070 |
| Other external expenses | 1,416 | 1,533 | 530 | 529 | 578 | 533 | (857) | (933) | 1,667 | 1,662 |
| Staff costs | 2,880 | 3,209 | 1,521 | 1,443 | 754 | 750 | 735 | 736 | 5,890 | 6,138 |
| Operating profit before amortisation, depreciation (EBITDA) before special items | 5,634 | 3,796 | 1,374 | 994 | 1,393 | 1,244 | 160 | 236 | 8,561 | 6,270 |
| Amortisation and depreciation | 398 | 554 | 495 | 472 | 852 | 851 | 178 | 214 | 1,923 | 2,091 |
| Operating profit (EBIT) before special items | 5,236 | 3,242 | 879 | 522 | 541 | 393 | (18) | 22 | 6,638 | 4,179 |
| Condensed balance sheet | ||||||||||
| Total assets | 56,962 | 51,942 | 23,075 | 21,186 | 15,030 | 14,605 | 7,080 | 7,280 | 102,147 | 95,013 |
| Total liabilities | 55,595 | 51,784 | 18,789 | 15,133 | 12,545 | 12,487 | (29,717) | (31,620) | 57,212 | 47,784 |
Page 19 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
5 Revenue
Sale of services and geographical segmentation specify as follows:
| (DKKm) | EMEA | Americas | APAC | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Q2 2021 | Q2 2020 | Q2 2021 | Q2 2020 | Q2 2021 | Q2 2020 | Q2 2021 | Q2 2020 | |
| Air services | 5,220 | 4,135 | 4,114 | 2,649 | 4,863 | 5,273 | 14,197 | 12,057 |
| Sea services | 6,265 | 2,856 | 3,475 | 1,805 | 2,011 | 2,426 | 11,751 | 7,087 |
| Road services | 7,989 | 6,440 | 674 | 547 | - | - | 8,663 | 6,987 |
| Solutions services | 2,920 | 2,258 | 723 | 659 | 354 | 339 | 3,997 | 3,256 |
| Total | 22,394 | 15,689 | 8,986 | 5,660 | 7,228 | 8,038 | 38,608 | 29,387 |
| Non-allocated items and eliminations | (777) | (605) | ||||||
| Total revenue | 37,831 | 28,782 | ||||||
| (DKKm) | EMEA | Americas | APAC | Total | ||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | YTD 2021 | YTD 2020 | |
| Air services | 10,108 | 8,268 | 7,771 | 5,742 | 9,293 | 7,577 | 27,172 | 21,587 |
| Sea services | 11,545 | 7,357 | 6,336 | 4,042 | 3,819 | 2,832 | 21,700 | 14,231 |
| Road services | 15,447 | 13,746 | 1,272 | 1,162 | - | - | 16,719 | 14,908 |
| Solutions services | 5,512 | 4,613 | 1,411 | 1,416 | 683 | 668 | 7,606 | 6,697 |
| Total | 42,612 | 33,984 | 16,790 | 12,362 | 13,795 | 11,077 | 73,197 | 57,423 |
| Non-allocated items and eliminations | (1,750) | (1,332) | ||||||
| Total revenue | 71,447 | 56,091 |
Page 20 of 21
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021
Statement by the Board of Directors and the Executive Board
The Board of Directors and the Executive Board have today considered and adopted the Interim Financial Report of DSV Panalpina A/S for the six-month period ended 30 June 2021.
The Interim Financial Report, which has not been audited or reviewed by the Company auditor, has been prepared in accordance with IAS 34 "Interim Financial Reporting" as adopted by the European Union and additional requirements in accordance with the Danish Financial Statements Act.
In our opinion, the Interim Financial Statements give a true and fair view of the Group's assets, equity, liabilities and financial position on 30 June 2021 and of the results of the Group's activities and the cash flow for the six-month period ended 30 June 2021.
We also find that the Management's commentary provides a fair statement of developments in the activities and financial situation of the Group, financial results for the period, the general financial position of the Group and a description of the major risks and elements of uncertainty faced by the Group. Over and above the disclosures in the Interim Financial Report, no changes in the Group's most significant risks and uncertainties have occurred relative to the disclosures in the annual report for 2020.
Hedehusene, 29 July 2021
Executive Board:
Jens Bjørn Andersen
CEO
Jens H. Lund
CFO
Board of Directors:
Thomas Plenborg
Chairman
Jørgen Møller
Deputy Chairman
Annette Sadolin
Birgit W. Nørgaard
Marie-Louise Aamund
Beat Walti
Niels Smedegaard
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 900 – 29 July 2021