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DSV Interim / Quarterly Report 2024
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Interim / Quarterly Report
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INTERIM FINANCIAL REPORT
H1 2024
Company Announcement No. 1123
24 July 2024
Strong Q2 2024 results with market share gains in all divisions
- The DSV Group achieved strong Q2 2024 results in line with expectations, with a decline in gross profit of 4.0% and a 12.4% decline in EBIT before special items compared to the same period last year. The financial results reflect a strong performance with further market share gains in all three divisions despite a competitive market.
- Sequentially, comparing Q2 2024 to Q1 2024, the DSV Group achieved nominal growth throughout Q2 2024 in EBIT before special items of 12.6% driven by increasing volumes and stabilisation of earnings per unit in Air & Sea.
- Solid adjusted free cash flow for Q2 2024 was impacted by higher net working capital due to increased activity and higher freight rates throughout the quarter.
- Based on our strong performance in the first half year and outlook for the second part of the year, we are narrowing the full-year 2024 EBIT guidance to DKK 15,500-17,000 million.
Jens H. Lund, Group CEO: "In a challenging environment, we delivered a strong financial performance in Q2 2024 driven by positive volume growth and stabilisation of gross profit per unit in the Air & Sea division. We continue to gain market share across all three divisions driven by our strengthened commercial platform. Furthermore, we have increased our productivity in all three divisions."
Selected key figures and ratios for the period 1 January – 30 June 2024
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
|---|---|---|---|---|
| Key figures (DKKm) | ||||
| Revenue | 41,157 | 37,727 | 79,497 | 78,681 |
| Gross profit | 10,841 | 11,331 | 21,106 | 22,722 |
| Operating profit (EBIT) before special items | 4,099 | 4,705 | 7,740 | 9,377 |
| Profit for the period | 2,712 | 3,375 | 5,105 | 6,662 |
| Adjusted earnings for the period | 2,790 | 3,448 | 5,253 | 6,788 |
| Adjusted free cash flow | 1,229 | 3,239 | 1,672 | 8,137 |
| Ratios | ||||
| Conversion ratio | 37.8% | 41.5% | 36.7% | 41.3% |
| Diluted adjusted earnings per share of DKK 1 for the last 12 months | 52.7 | 69.8 |
Performance in Q2 2024
In a challenging environment, DSV demonstrated a strong financial performance characterised by an uptake in volumes, market share gains across all three divisions and solid cash flow generation. On the back of this performance, we are narrowing our full-year guidance to DKK 15,500-17,000 million, and we launch a new share buyback programme of DKK 1,500 million.
Air & Sea continued to see a stabilisation of gross profit per unit during Q2 2024, indicating a steady operational performance in a competitive and fluctuating market. While the situation in the Red Sea has not yet materialised in our financial results, it is expected to have a slightly positive impact in the second half of 2024.
DSV A/S, Hovedgaden 630, 2640 Hedehusene, Denmark, tel. +45 43 20 30 40, CVR No. 58233528, www.dsv.com.
DSV 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. Approximately 75,000 employees in more than 80 countries work passionately to deliver great customer experiences and high-quality services. Read more at www.dsv.com
Road continued to deliver satisfactory results in a competitive market with stable gross profit and a 4.4% increase in EBIT before special items for Q2 2024 compared to the same period last year. The division has further strengthened the network by establishing control towers and expanding the European groupage network in close collaboration with the other divisions of the Group.
Solutions saw a gross profit increase of 8.1% and an increase in EBIT before special items of 6.8% for Q2 2024 compared to the same period last year. Despite temporary low utilisation rates at new sites, the Solutions division delivered a strong performance owing to an increase in order lines driven by new wins.
We are well positioned for growth in an ever-changing market and maintain our focus on having industry leading margins, which is a testament to the company's competitive culture and operational efficiency. M&A remains a core pillar in DSV, and we believe that the combination of organic and inorganic growth will create a stronger DSV going forward.
We consistently assess our operations to optimise productivity and remain flexible and competitive to meet market demand, and we continuously invest in digital and physical infrastructure that drives productivity up. In order to leverage on these investments, we have launched a company-wide operational efficiency initiative in Q2. The gains from these initiatives are expected to materialise gradually over the coming quarters starting in Q3 and with a full-year impact in 2025 in EBIT before special items of approximately DKK 750 million.
Outlook for 2024
Based on our performance in the first six months of 2024 and our expectations for the rest of the year, we are narrowing the full-year outlook for 2024 as follows:
- EBIT before special items is expected to be in the range of DKK 15,500-17,000 million (previously DKK 15,000-17,000 million).
- The effective tax rate is expected to be approximately 24%.
- One-off costs (special items) are expected to be in the level of DKK 650 million in 2024.
Share buyback
A separate company announcement about a new share buyback programme of DKK 1,500 million will be issued today. The programme starts 24 July 2024 and will run until 22 October 2024.
Contacts
Investor Relations: Sebastian Rosborg, tel. +45 43 20 33 87, [email protected]
Media contact: Jonatan Rying Larsen, tel. +45 25 41 77 37, [email protected]
Yours sincerely,
DSV A/S
DSV A/S, Hovedgaden 630, 2640 Hedehusene, Denmark, tel. +45 43 20 30 40, CVR No. 58233528, www.dsv.com.
DSV 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. Approximately 75,000 employees in more than 80 countries work passionately to deliver great customer experiences and high-quality services. Read more at www.dsv.com
Interim Financial Report
H1 2024
Keeping supply chains flowing in a world of change
Global Transport and Logistics
DSV
Contents
Financial highlights ... 3
Management’s commentary ... 4
Air & Sea ... 9
Road ... 12
Solutions ... 14
Interim financial statements ... 16
Notes to the interim financial statements ... 21
Statement by the Board of Directors and the Executive Board ... 23
Page 2 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Financial highlights
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
|---|---|---|---|---|
| Results (DKKm) | ||||
| Revenue | 41,157 | 37,727 | 79,497 | 78,681 |
| Gross profit | 10,841 | 11,331 | 21,106 | 22,722 |
| Operating profit before amortisation and depreciation (EBITDA) before special items | 5,509 | 6,022 | 10,541 | 11,963 |
| Operating profit (EBIT) before special items | 4,099 | 4,705 | 7,740 | 9,377 |
| Net financial expenses | 521 | 172 | 1,005 | 518 |
| Profit for the period | 2,712 | 3,375 | 5,105 | 6,662 |
| Adjusted earnings for the period | 2,790 | 3,448 | 5,253 | 6,788 |
| Cash flows (DKKm) | ||||
| Operating activities | 2,462 | 4,628 | 4,218 | 10,749 |
| Investing activities | (128) | (1,097) | (486) | (1,494) |
| Free cash flow | 2,334 | 3,531 | 3,732 | 9,255 |
| Adjusted free cash flow | 1,229 | 3,239 | 1,672 | 8,137 |
| Share buyback | (915) | (4,211) | (2,528) | (7,230) |
| Dividends distributed | - | - | (1,533) | (1,424) |
| Cash flow for the period | 2,411 | (1,797) | 2,530 | (217) |
| Gross investment in property, plant and equipment | (422) | (589) | (983) | (997) |
| Financial position (DKKm) | ||||
| DSV A/S shareholders' share of equity | 70,899 | 70,080 | ||
| Non-controlling interests | 269 | 236 | ||
| Total equity | 71,168 | 70,316 | ||
| Total assets | 157,775 | 151,540 | ||
| Net working capital (NWC) | 8,750 | 2,651 | ||
| Net interest-bearing debt (NIBD) | 38,199 | 30,350 | ||
| Invested capital | 105,735 | 97,019 | ||
| Financial ratios (%) | ||||
| Gross margin | 26.3 | 30.0 | 26.5 | 28.9 |
| Operating margin | 10.0 | 12.5 | 9.7 | 11.9 |
| Conversion ratio | 37.8 | 41.5 | 36.7 | 41.3 |
| Effective tax rate | 24.2 | 25.5 | 24.2 | 24.8 |
| ROIC before tax | 15.9 | 20.4 | ||
| Return on equity | 15.3 | 19.9 | ||
| Solvency ratio | 44.9 | 46.2 | ||
| Gearing ratio | 1.8 | 1.2 | ||
| Share ratios | ||||
| Earnings per share (EPS) of DKK 1 for the last 12 months | 51.3 | 67.4 | ||
| Diluted adjusted earnings per share of DKK 1 for the last 12 months | 52.7 | 69.8 | ||
| Number of shares issued ('000) at 30 June | 214,000 | 219,000 | ||
| Number of treasury shares ('000) at 30 June | 6,094 | 5,262 | ||
| Average number of shares outstanding ('000) for the last 12 months | 209,971 | 219,417 | ||
| Average diluted number of shares ('000) for the last 12 months | 210,804 | 221,520 | ||
| Diluted number of shares ('000) at 30 June | 208,037 | 215,528 | ||
| Share price end of period (DKK) | 1,067.0 | 1,433.0 | ||
| Non-financial data | ||||
| Full-time employees (FTE) at 30 June | 73,881 | 74,178 |
For definition of key figures and ratios, please refer to page 82 of the DSV Annual Report 2023.
For definition of non-financial data, please refer to the DSV Sustainability Report 2023.
Page 3 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Management's commentary
The DSV Group achieved strong Q2 2024 results in a competitive environment with a decline in gross profit of 4.0% and a 12.4% decline in EBIT before special items compared to the same period last year. The financial results reflect a strong performance in all three divisions with further market share gains despite a competitive market. Sequentially, the Group achieved nominal gross profit growth of 5.6% and 12.6% nominal growth in EBIT before special items compared to Q1 2024.
Adjusted free cash flow for Q2 2024 and H1 2024 was impacted by the higher net working capital due to increased activity and increasing sea freight rates.
Quarterly business highlights
In the beginning of 2024, we strengthened our operational and commercial focus to enable sustainable organic growth. The revised focus is driven by a deeper understanding and collaboration with our customers across industry verticals as well as further development and leveraging of our global network and targeted services.
The strengthened commercial structure to support our largest customers is off to a good start, receiving positive customer feedback and securing significant wins within our targeted verticals. At the same time, we have maintained our stronghold in the small- and mid-sized customer segments.
We are pleased to note that the satisfaction ratings across our customer base are at all-time high levels in all divisions.
M&A will remain central to DSV's strategy, and we believe that the combination of organic and inorganic growth will create a stronger DSV going forward.
Operational excellence – benefitting from strategic investments
DSV continuously invests in digital and physical infrastructure that drives productivity up. In order to leverage on these investments, we have launched a company-wide operational efficiency initiative.
The impact of this initiative is expected to materialise gradually in the coming quarters starting in Q3 with a full-year impact in 2025 in EBIT before special items of approximately DKK 750 million. One-off costs for this initiative are estimated to be around DKK 650 million which will be reported as special items in 2024.
NEOM update
The exclusive logistics joint venture to provide logistics services for the projects in the NEOM region is mobilised and ready to go live but is awaiting final approvals from local authorities.
The timing of investments in the joint venture will follow the progress of the individual projects in NEOM. Based on current plans, we expect the joint venture activities to ramp up over the next 3-4 years.
The joint venture will have a positive impact on the DSV network, and we expect a return on the invested capital in line with our financial targets.
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Results for the period
Growth 2023 – 2024
| (DKKm) | Q2 2023 | Currency translation | Q2 2023 in constant currencies | Growth | Growth in constant currencies % | Q2 2024 |
|---|---|---|---|---|---|---|
| Revenue | 37,727 | (186) | 37,541 | 3,616 | 9.6% | 41,157 |
| Gross profit | 11,331 | (42) | 11,289 | (448) | (4.0%) | 10,841 |
| EBIT before special items | 4,705 | (24) | 4,681 | (582) | (12.4%) | 4,099 |
| Gross margin (%) | 30.0 | 26.3 | ||||
| Operating margin (%) | 12.5 | 10.0 | ||||
| Conversion ratio (%) | 41.5 | 37.8 | ||||
| (DKKm) | YTD 2023 | Currency translation | YTD 2023 in constant currencies | Growth | Growth in constant currencies % | YTD 2024 |
| --- | --- | --- | --- | --- | --- | --- |
| Revenue | 78,681 | (767) | 77,914 | 1,583 | 2.0% | 79,497 |
| Gross profit | 22,722 | (200) | 22,522 | (1,416) | (6.3%) | 21,106 |
| EBIT before special items | 9,377 | (98) | 9,279 | (1,539) | (16.6%) | 7,740 |
| Gross margin (%) | 28.9 | 26.5 | ||||
| Operating margin (%) | 11.9 | 9.7 | ||||
| Conversion ratio (%) | 41.3 | 36.7 |
Revenue
In Q2 2024, revenue increased 9.6% compared to same period last year. For H1 2024, revenue amounted to DKK 79,497 million, compared to DKK 78,681 million last year. Revenue increased by 2.0% compared to same period last year.
Revenue and growth by division compared to same period last year are specified below:
| (DKKm) | Q2 2024 | Growth* | YTD 2024 | Growth* |
|---|---|---|---|---|
| Air & Sea | 24,616 | 8.1% | 47,332 | (2.3%) |
| Road | 10,561 | 9.1% | 20,986 | 6.2% |
| Solutions | 6,916 | 17.0% | 12,905 | 12.3% |
| Group and eliminations | (936) | (1,726) | ||
| Total | 41,157 | 9.6% | 79,497 | 2.0% |
- Growth in constant currencies
For H1 2024, the Air & Sea revenue was positively impacted by higher volume partly offset by lower average freight rates compared to the same period last year, leading to a slight decline in revenue for H1 2024.
The Road and Solutions divisions experienced revenue growth in H1 2024 compared to the same period last year. Road was primarily driven by higher volumes in our European groupage network, though partially offset by lower market rates. The Solutions division grew revenue primarily due to increased number of order lines, new wins and further development of our global footprint.
Revenue by division, H1 2024 (DKKm)
Gross profit
For Q2 2024, gross profit for the Group declined 4.0% compared to same period last year. Gross profit increased sequentially and was up by 5.6% nominally compared to Q1 2024.
For H1 2024, gross profit amounted to DKK 21,106 million, compared to DKK 22,722 million last year. Gross profit declined 6.3% compared to the same period last year, mainly due to a normalising freight market causing lower yields in the Air & Sea division.
Page 5 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Gross profit and growth by division compared to same period last year are specified below:
| (DKKm) | Q2 2024 | Growth* | YTD 2024 | Growth* |
|---|---|---|---|---|
| Air & Sea | 6,072 | (9.3%) | 11,835 | (12.8%) |
| Road | 2,061 | 1.5% | 4,025 | 0.4% |
| Solutions | 2,576 | 8.1% | 4,977 | 7.0% |
| Group and eliminations | 132 | 269 | ||
| Total | 10,841 | (4.0%) | 21,106 | (6.3%) |
- Growth in constant currencies
For H1 2024, gross profit for Air & Sea benefitted from the continued volume improvement in both air and sea. However, as expected, the gross profit for Air & Sea declined compared to the same period last year due to the normalisation of gross profit yields.
The Road division achieved slight gross profit growth in H1 2024, despite a challenging market. The division continued its positive trajectory, particularly in the European groupage network, and gained additional business with our large customers. The growth in volumes is partly offset by reduced freight rates.
Solutions delivered gross profit growth of 7.0% for H1 2024 due to higher activity levels with existing customers and the expansion of our global footprint paving the way for growth with new customers.
Gross profit by division, H1 2024 (DKKm)
The gross margin for the Group was 26.5% for H1 2024, compared to 28.9% for the same period last year. The decline was mainly due to Air & Sea and reflects the continued normalisation of both air and sea gross profit yields. In Solutions, the gross margin was lower than last year as a consequence of the implementation of new facilities following our warehouse strategy to increase our global footprint.
EBIT before special items
For Q2 2024, EBIT before special items declined 12.4% compared to last year but increased nominally by 12.6% compared to the first quarter. The reduced EBIT was due to lower gross profit in the Air & Sea division.
EBIT before special items amounted to DKK 7,740 million for H1 2024, compared to DKK 9,377 million last year. EBIT before special items was down 16.6%.
EBIT and growth by division compared to same period last year are specified below:
| (DKKm) | Q2 2024 | Growth* | YTD 2024 | Growth* |
|---|---|---|---|---|
| Air & Sea | 2,898 | (18.2%) | 5,525 | (22.1%) |
| Road | 549 | 4.4% | 1,039 | 1.4% |
| Solutions | 661 | 6.8% | 1,161 | (0.5%) |
| Group and eliminations | (9) | 15 | ||
| Total | 4,099 | (12.4%) | 7,740 | (16.6%) |
- Growth in constant currencies
The conversion ratio for the Group was 36.7% for H1 2024, compared to 41.3% for the same period last year. The decline is primarily due to the normalisation of freight markets and lower gross profit yields in Air & Sea. In Solutions, we see a temporary lower average warehouse utilisation as a result of the expansion of warehouse infrastructure.
For H1 2024, our continued focus on cost management resulted in a stable cost base despite cost of growth compared to the same period last year. Changes to the operational set-up has been made to improve efficiency and enable productivity gains. New group-wide initiatives have been initiated during the quarter to leverage on previous investments in improved digitalisation, standardised services, and new terminals and warehouses. This will reduce both staff cost and other external cost and improve the conversion ratio.
From a regional perspective, all regions realised lower EBIT for H1 2024 compared to the same period last year. The best performing region compared to the same period last year was EMEA.
EBIT by division, H1 2024 (DKKm)
INTERIM FINANCIAL REPORT - COMPANY ANNOUNCEMENT NO. 1123 - 24 July 2024
Financial items
Financial items totalled a net expense of DKK 1,005 million for H1 2024, compared to a net expense of DKK 518 million for the same period last year. The higher net financial expenses compared to last year were related to the increase in lease liabilities, less financial income due to lower cash balances and foreign exchange losses, especially on intercompany balances.
| (DKKm) | YTD 2024 | YTD 2023 |
|---|---|---|
| Interest on lease liabilities | 530 | 400 |
| Other interest cost, net | 327 | 162 |
| Interest on pensions | 22 | 18 |
| Foreign exchange adjustments | 126 | (62) |
| Net financial expenses | 1,005 | 518 |
Tax on profit for the period
The effective tax rate came to 24.2% for H1 2024, compared to 24.8% for the same period last year.
Profit for the period
Profit for H1 2024 was DKK 5,105 million, compared to DKK 6,662 million for the same period of 2023. The decline was mainly due to the lower EBIT before special items for the period.
Diluted adjusted earnings per share
Diluted adjusted EPS (rolling 12-months) decreased by 24.5% compared to the same period last year and came to DKK 52.7 per share (30 June 2023: DKK 69.8 per share). The decline was due to the decrease in adjusted earnings partly offset by a 4.8% decrease in average number of diluted shares outstanding following the Group's share buyback programmes.
Cash flow
Cash flow statement – summary
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| EBITDA before special items | 5,509 | 6,022 | 10,541 | 11,963 |
| Change in net working capital | (1,681) | 551 | (3,773) | 2,540 |
| Tax, interests, change in provisions, etc. | (1,366) | (1,814) | (2,550) | (3,491) |
| Special items, paid | - | (131) | - | (263) |
| Cash flow from operating activities | 2,462 | 4,628 | 4,218 | 10,749 |
| Cash flow from investing activities | (128) | (1,097) | (486) | (1,494) |
| Free cash flow | 2,334 | 3,531 | 3,732 | 9,255 |
| Proceeds and repayment of debt | 973 | (1,568) | 2,278 | (2,152) |
| Transactions with shareholders | (896) | (3,760) | (3,480) | (7,320) |
| Cash flow for the period | 2,411 | (1,797) | 2,530 | (217) |
| Free cash flow | 2,334 | 3,531 | 3,732 | 9,255 |
| Acquisition of subsidiaries | - | 550 | - | 550 |
| Special items | - | 131 | - | 263 |
| Repayment of lease liabilities | (1,105) | (973) | (2,060) | (1,931) |
| Adjusted free cash flow | 1,229 | 3,239 | 1,672 | 8,137 |
Adjusted free cash flow for Q2 2024 amounted to DKK 1,229 million, a decrease of DKK 2,010 million compared to same quarter last year. For H1 2024, the adjusted free cash flow was DKK 1,672 million, compared DKK 8,137 million for the same period last year.
The decline in adjusted free cash flow for both Q2 2024 and for H1 2024 was predominantly impacted by higher net working capital and lower EBITDA but partly offset by lower tax payments and a reduction in investing activities.
The change in net working capital increased during Q2 2024 owing to higher activity levels which led to higher net revenue compared to Q2 2023.
For H1 2024, the change in net working capital resulted in a cash outflow of DKK 3,773 million compared to an inflow last year of DKK 2,540 million due to the same factors as for the quarter. The change in net working capital was a result of a more normalised market, whereas the first six months of 2023 were impacted positively by the market conditions with high rates from 2022.
Cash flow from investing activities only showed a cash outflow of DKK 128 million for Q2 2024 compared to a cash outflow of DKK 1,097 million for the same period last year. For the first six months, cash flow from investing activities showed a cash outflow of DKK 486 million, compared to a cash outflow of DKK 1,494 million for H1 2023. The decrease is related to the disposal of properties and no material acquisitions in 2024.
Cash flow from financing activities was a net cash inflow of DKK 77 million for Q2 2024 and a cash outflow of DKK 1,202 million for H1 2024, primarily related to shareholder distribution and lease payments but partly offset by the issuance of the EUR 500 million Eurobond in Q2 2024.
Net working capital
On 30 June 2024, the Group's net working capital (NWC) was DKK 8,750 million, compared to DKK 2,651 million on 30 June 2023. The increase is mainly driven by higher activity levels in combination with increasing freight rates, primarily in Air & Sea in the second quarter of 2024.
Funds tied up in property projects increased compared to last year. The impact from property projects is expected to decrease over the coming quarters and the NWC to be reduced by approximately DKK 2,000 million by year-end 2024.
Relative to estimated full-year revenue, funds tied up in NWC were 5.3% as of 30 June 2024 (compared to 1.8% on 30 June 2023). We remain committed to managing the NWC and have not seen changes to invoicing days or overdue receivables.
Capital structure and finances
DSV A/S shareholders' share of equity
DSV shareholders' share of equity was DKK 70,899 million on 30 June 2024 (DKK 68,703 million on 31 December 2023). Equity increased as the profit for the period exceeded the redistribution to shareholders (share buyback and dividend).
Page 7 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
On 30 June 2024, the Company's portfolio of treasury shares was 6,094,444 shares. On 23 July 2024, the portfolio of treasury shares was 6,184,944 shares.
The solvency ratio excluding non-controlling interests was 44.9% on 30 June 2024 (30 June 2023: 46.2%).
The development in equity since 1 January is specified below:
| (DKKm) | YTD 2024 | YTD 2023 |
|---|---|---|
| Equity at 1 January | 68,703 | 71,519 |
| Profit for the period (attributable to DSV shareholders) | 5,076 | 6,628 |
| Currency translation, foreign enterprises | 342 | (1,252) |
| Allocated to shareholders | (4,061) | (8,654) |
| Sale of treasury shares | 537 | 1,339 |
| Other equity movements | 302 | 500 |
| Equity end of period | 70,899 | 70,080 |
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 38,199 million on 30 June 2024, compared to DKK 30,350 million on 30 June 2023. The increase in net interest-bearing debt can mainly be attributed to increases in lease liabilities, dividend, share buyback payments to our shareholders and increased funds tied up in net working capital.
On 26 June 2024, it was announced that DSV had completed a new 5-year EUR 500 million Eurobond issue (approximately DKK 3,725 million). Please refer to Company Announcement No. 1118.
The gearing ratio (NIBD/EBITDA) was 1.8x on 30 June 2024, compared to 1.2x last year. A new share buyback programme of DKK 1,500 million is initiated on 24 July 2024 in accordance with our target of a financial gearing ratio below 2.0 and expected future cash flow as we expect to tie up additional funds in NWC due to increasing rate levels.
The weighted average duration of the company's long-term bonds and drawn credit facilities was 6.9 years on 30 June 2024.
Invested capital and ROIC
The invested capital including goodwill and customer relationships amounted to DKK 105,735 million on 30 June 2024, compared to DKK 97,019 million on 30 June 2023. The increase was mainly a result of higher net working capital and right-of-use lease assets.
Return on invested capital (including goodwill and customer relationships) was 15.9% for the rolling 12-month period ended 30 June 2024 compared to 20.4% last year. The decrease is predominantly due to the lower operational result.
Excluding goodwill and customer relationships, return on invested capital was 64.4% for the rolling 12-month period ended 30 June 2024, compared to 87.2% for the same period last year.
Outlook
Based on our performance in the first six months of 2024 and our expectations for rest of the year, we narrow the full-year outlook for 2024 as follows:
- EBIT before special items is expected to be in the range of DKK 15,500-17,000 million (previously DKK 15,000-17,000 million).
- The effective tax rate is expected to be approximately 24%.
- One-off costs (special items) are expected to be in the level of DKK 650 million in 2024.
Page 8 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Air & Sea
The Air & Sea division operates a global network specialising in transportation of cargo by air and sea. The division offers conventional freight forwarding services and tailored project cargo solutions.
In a market characterised by freight rate volatility and increasing volumes, the division saw a 9.3% decrease in gross profit and a 18.2% decrease in EBIT before special items for Q2 2024 compared to the same period last year. Compared to H1 last year, the gross profit yields have normalised and remained relatively stable throughout H1 2024. There has been no significant financial impact from the situation in the Red Sea, and we estimate that the division has gained market share.
Statement of profit or loss
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Divisional revenue | 24,616 | 22,993 | 47,332 | 49,206 |
| Direct costs | 18,544 | 16,239 | 35,497 | 35,425 |
| Gross profit | 6,072 | 6,754 | 11,835 | 13,781 |
| Other external costs | 890 | 883 | 1,798 | 1,906 |
| Staff costs | 1,994 | 2,005 | 3,937 | 4,098 |
| EBITDA before special items | 3,188 | 3,866 | 6,100 | 7,777 |
| Amortisation and depreciation | 290 | 292 | 575 | 577 |
| EBIT before special items | 2,898 | 3,574 | 5,525 | 7,200 |
Key figures and ratios
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
|---|---|---|---|---|
| Gross margin (%) | 24.7 | 29.4 | 25.0 | 28.0 |
| Operating margin (%) | 11.8 | 15.5 | 11.7 | 14.6 |
| Conversion ratio (%) | 47.7 | 52.9 | 46.7 | 52.2 |
| Full-time employees | 21,170 | 21,695 | ||
| Total invested capital (DKKm) | 65,257 | 64,163 | ||
| Net working capital (DKKm) | 3,258 | 1,080 | ||
| ROIC before tax (%) | 18.1 | 23.8 |
Quarterly business highlights
The commercial strategy continued to see positive traction in our pipeline of opportunities and dialogues with customers, and we expect the results of the positive developments to materialise across all customer segments over the coming quarters.
In addition, we have moved forward with the expansion of our global network, continuing the optimisation of our European and American air routings and development of the air gateway infrastructure. For our LCL sea freight product, we have increased our own controlled consolidation. We continue to see greater collaboration internally between the divisions, thereby strengthening our comprehensive end-to-end services for our customers.
Market development
| DSV volume growth | Q2 2024 | YTD 2024 |
|---|---|---|
| Air freight – tonnes | 10% | 6% |
| Sea freight – TEUs | 4% | 6% |
Air
The global air freight market was impacted by high growth in the e-commerce segment, especially on China export volumes. This tied up a significant part of the available capacity and kept rates elevated, particularly for air freight out of APAC. On other trade lanes, available capacity increased due to more passenger travel and airlines' summer schedules.
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Adjusted for e-commerce and perishables, we estimate that our addressable market grew by mid-single digits in Q2 2024.
DSV's air freight volumes grew by 10% in Q2 2024 and by 6% in H1 2024 compared to the same period last year. The increase was mainly driven by improved export from APAC, which was positively impacted by growing textile and pharma customer volumes out of China and sea-to-air conversion in the Indian sub-continent. We estimate that we have grown faster than our addressable market on air freight.
Sea
The continued rerouting of ships around the Cape of Good Hope in response to the Red Sea situation kept freight rates at an elevated level during the quarter. In the second half of Q2, a combination of early summer peak, increasing port congestion, void sailing programmes and longer transit times resulted in an additional increase in freight rates, especially on the Asia-Europe trade lane, but also impacting other head haul trades. We estimate that the market grew by mid-single digits in Q2 2024.
DSV's sea freight volumes grew by 4% during Q2 2024 and by 6% in the first half of 2024 compared to the same period last year. We estimate that we have grown in line with the sea freight market. The strongest growth rates continued to be recorded on export volumes out of APAC.
Divisional revenue
For Q2 2024, revenue amounted to DKK 24,616 million, compared to DKK 22,993 million for the same period last year. Revenue for the quarter was up 8.1% compared to the same period last year due to increased activity and sea freight rates.
The division's revenue amounted to DKK 47,332 million for H1 2024, compared to DKK 49,206 million for the same period last year, and was down 2.3%.
Compared to the same period last year, air and sea volumes grew in H1 2024 and continued to be positively impacted by the increase in demand across both air and sea freight.
Gross profit
For Q2 2024, gross profit amounted to DKK 6,072 million, compared to DKK 6,754 million for the same period last year. Gross profit for the quarter was down 9.3%. The decline in gross profit compared to last year was caused by lower gross profit yields in both air and sea. Yields remained relatively stable in Q2 2024 compared to Q1 2024, and in combination with the increased activity, gross profit increased nominally by 5.4% from the first quarter.
For the first six months of 2024, gross profit amounted to DKK 11,835 million, compared to DKK 13,781 million for the same period last year. Gross profit decreased by 12.8%.
We expect that the current market situation around the Red Sea will have a slightly positive impact on the gross profit in H2 2024.
The division's gross margin was 25.0% for H1 2024, compared to 28.0% last year. The decrease was driven by higher volume but offset by lower yields compared to same period last year.
EBIT before special items
For Q2 2024, EBIT before special items amounted to DKK 2,898 million, compared to DKK 3,574 million for the same period last year. EBIT before special items for the quarter was down 18.2%. The decline in EBIT before special items is a consequence of the lower gross profit, which was partially offset by a reduced cost base compared to last year. Due to strong cost management by the division, cost related to both staff and other external cost was reduced compared to same period last year.
Sequentially, the division delivered nominal EBIT growth of 10.3% from Q1 2024 to Q2 2024 due to high activity levels and stable gross profit yields.
EBIT before special items came to DKK 5,525 million for the first six months of 2024, compared to DKK 7,200 million for the same period last year. EBIT before special items declined 22.1%.
The conversion ratio was 46.7% for H1 2024, compared to 52.2% for the same period last year. The reduced conversion ratio is primarily due to lower gross profit.
Productivity, measured as shipments per white collar FTE, increased by 18% compared to H1 2023, thus continuing the sequential improvement from previous quarters.
Net working capital
The Air & Sea division's net working capital came to DKK 3,258 million on 30 June 2024, compared to DKK 1,080 million on 30 June 2023. The increase in net working capital is driven by higher activity and sequential increase in sea freight rates during the period.
INTERIM FINANCIAL REPORT - COMPANY ANNOUNCEMENT NO. 1123 - 24 July 2024
Growth Air & Sea 2023 – 2024
| (DKKm) | Q2 2023 | Currency translation | Q2 2023 in constant currencies | Growth | Growth in constant currencies % | Q2 2024 |
|---|---|---|---|---|---|---|
| Divisional revenue | 22,993 | (226) | 22,767 | 1,849 | 8.1% | 24,616 |
| Gross profit | 6,754 | (56) | 6,698 | (626) | (9.3%) | 6,072 |
| EBIT before special items | 3,574 | (30) | 3,544 | (646) | (18.2%) | 2,898 |
| (DKKm) | YTD 2023 | Currency translation | YTD 2023 in constant currencies | Growth | Growth in constant currencies % | YTD 2024 |
| --- | --- | --- | --- | --- | --- | --- |
| Divisional revenue | 49,206 | (768) | 48,438 | (1,106) | (2.3%) | 47,332 |
| Gross profit | 13,781 | (202) | 13,579 | (1,744) | (12.8%) | 11,835 |
| EBIT before special items | 7,200 | (108) | 7,092 | (1,567) | (22.1%) | 5,525 |
Air & Sea freight performance
| (DKKm) | Air freight | |||
|---|---|---|---|---|
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
| Divisional revenue | 13,365 | 12,166 | 25,532 | 26,431 |
| Direct costs | 10,412 | 8,592 | 19,684 | 19,130 |
| Gross profit | 2,953 | 3,574 | 5,848 | 7,301 |
| Gross margin (%) | 22.1 | 29.4 | 22.9 | 27.6 |
| Volume (tonnes)* | 349,076 | 316,456 | 684,289 | 644,168 |
| Gross profit per unit (DKK) | 8,459 | 11,294 | 8,546 | 11,334 |
| (DKKm) | Sea freight | |||
| --- | --- | --- | --- | --- |
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
| Divisional revenue | 11,251 | 10,827 | 21,800 | 22,775 |
| Direct costs | 8,132 | 7,647 | 15,813 | 16,295 |
| Gross profit | 3,119 | 3,180 | 5,987 | 6,480 |
| Gross margin (%) | 27.7 | 29.4 | 27.5 | 28.5 |
| Volume (TEUs)* | 666,310 | 641,924 | 1,302,854 | 1,230,131 |
| Gross profit per unit (DKK) | 4,681 | 4,954 | 4,595 | 5,268 |
- Volume is defined as the quantity of export cargo processed within DSV network. Sea volume is measured in TEUs (twenty-foot equivalent units), while air volume is determined by chargeable weight, quantified in tonnes.
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Road
The Road division is one of the market leaders in Europe and has operations in North America, South Africa and in the Middle East. The division offers full load, part load and groupage services through a network of more than 280 terminals.
The division saw a stable gross profit and a 4.4% increase in EBIT before special items for Q2 2024 compared to the same period last year. In a competitive market with pressure on the freight rates due to low demand and overcapacity, the Road division achieved strong results. We estimate that the division gained market share, especially on European groupage shipments.
Statement of profit or loss
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Divisional revenue | 10,561 | 9,650 | 20,986 | 19,744 |
| Direct costs | 8,500 | 7,627 | 16,961 | 15,745 |
| Gross profit | 2,061 | 2,023 | 4,025 | 3,999 |
| Other external costs | 319 | 367 | 643 | 730 |
| Staff costs | 963 | 918 | 1,900 | 1,820 |
| EBITDA before special items | 779 | 738 | 1,482 | 1,449 |
| Amortisation and depreciation | 230 | 213 | 443 | 429 |
| EBIT before special items | 549 | 525 | 1,039 | 1,020 |
Key figures and ratios
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
|---|---|---|---|---|
| Gross margin (%) | 19.5 | 21.0 | 19.2 | 20.3 |
| Operating margin (%) | 5.2 | 5.4 | 5.0 | 5.2 |
| Conversion ratio (%) | 26.6 | 26.0 | 25.8 | 25.5 |
| Full-time employees | 16,608 | 16,234 | ||
| Total invested capital (DKKm) | 13,259 | 11,529 | ||
| Net working capital (DKKm) | 1,504 | 439 | ||
| ROIC before tax (%) | 16.4 | 17.8 |
Quarterly business highlights
In Q2 2024, our commercial efforts showed promising results, with volume awards across our European groupage network. We also continued onboarding customers and further streamlining our pan-European control tower set-up to deliver even better services to all our customers.
In addition, we have further strengthened the commercial collaboration across the three divisions. The operational interaction is in its first phase across Road and Air & Sea, supporting our efforts to continue to deliver sustainable above market growth.
Market development
As a result of low demand and continued overcapacity in the market, the division saw lower freight rates across most of Europe in H1 2024 compared to last year. Despite a challenging market, the division registered a positive development and gained market share, especially because of our strong international network.
Divisional revenue
For Q2 2024, revenue amounted to DKK 10,561 million, compared to DKK 9,650 million for the same period last year. Revenue for the quarter was up 9.1%. The increase in revenue for the quarter was driven by continued volume growth in our
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
European groupage network and with larger customers, partly offset by lower market rates.
The division's revenue amounted to DKK 20,986 million for the first six months of 2024, compared to DKK 19,744 million for the same period last year. Revenue for the first six months was up 6.2%.
The division generates more than 85% of its revenue in Europe and continues to see good performance across most countries in the region.
Gross profit
For Q2 2024, gross profit amounted to DKK 2,061 million, compared to DKK 2,023 million for the same period last year. Gross profit for the quarter was up 1.5%.
For the first six months of 2024, gross profit totalled DKK 4,025 million, which was on level with the same period last year.
The division's gross margin was 19.2% for H1 2024, compared to 20.3% for the same period in 2023. The margin is impacted by the current overcapacity in the market and is expected to improve as demand increases.
The division maintains its focus on developing the control tower setup and European groupage network, which is expected to positively impact the gross margin over time.
EBIT before special items
For Q2 2024, EBIT before special items amounted to DKK 549 million, compared to DKK 525 million for the same period last year. EBIT before special items for the quarter was up 4.4%. The increase was a result of the improved gross profit and stable cost base.
EBIT before special items was DKK 1,039 million for the first six months of 2024, compared to DKK 1,020 million for the same period last year. EBIT before special items for H1 2024 was up 1.4%. The division delivered a satisfactory performance in a challenging market.
The conversion ratio was 25.8% for H1 2024, compared to 25.5% for the same period last year. The conversion ratio was positively impacted by increased gross profit, partly offset by a one-off implementation cost on a large contract. The division continues to focus on cost management and productivity gains.
Net working capital
The Road division's net working capital was DKK 1,504 million on 30 June 2024, compared to DKK 439 million on 30 June 2023. The development compared to last year was impacted by an increase in funds tied up in property projects.
Growth Road 2023 - 2024
| (DKKm) | Q2 2023 | Currency translation | Q2 2023 in constant currencies | Growth | Growth in constant currencies % | Q2 2024 |
|---|---|---|---|---|---|---|
| Divisional revenue | 9,650 | 28 | 9,678 | 883 | 9.1% | 10,561 |
| Gross profit | 2,023 | 7 | 2,030 | 31 | 1.5% | 2,061 |
| EBIT before special items | 525 | 1 | 526 | 23 | 4.4% | 549 |
| (DKKm) | YTD 2023 | Currency translation | YTD 2023 in constant currencies | Growth | Growth in constant currencies % | YTD 2024 |
| --- | --- | --- | --- | --- | --- | --- |
| Divisional revenue | 19,744 | 24 | 19,768 | 1,218 | 6.2% | 20,986 |
| Gross profit | 3,999 | 9 | 4,008 | 17 | 0.4% | 4,025 |
| EBIT before special items | 1,020 | 5 | 1,025 | 14 | 1.4% | 1,039 |
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Solutions
The Solutions division offers warehousing and logistics services globally and controls more than 500 logistics facilities. The service portfolio includes freight management, customs clearance, order management and e-commerce solutions.
The Solutions division delivered a strong performance and reported a gross profit increase of 8.1% and an increase of 6.8% in EBIT before special items for Q2 2024 compared to the same period last year. We believe that the division has gained market share during H1 2024.
Statement of profit or loss
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Divisional revenue | 6,916 | 5,898 | 12,905 | 11,523 |
| Direct costs | 4,340 | 3,525 | 7,928 | 6,865 |
| Gross profit | 2,576 | 2,373 | 4,977 | 4,658 |
| Other external costs | 448 | 420 | 885 | 873 |
| Staff costs | 658 | 613 | 1,308 | 1,201 |
| EBITDA before special items | 1,470 | 1,340 | 2,784 | 2,584 |
| Amortisation and depreciation | 809 | 727 | 1,623 | 1,423 |
| EBIT before special items | 661 | 613 | 1,161 | 1,161 |
Key figures and ratios
| Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 | |
|---|---|---|---|---|
| Gross margin (%) | 37.2 | 40.2 | 38.6 | 40.4 |
| Operating margin (%) | 9.6 | 10.4 | 9.0 | 10.1 |
| Conversion ratio (%) | 25.7 | 25.8 | 23.3 | 24.9 |
| Full-time employees | 31,614 | 31,736 | ||
| Total invested capital (DKKm) | 28,226 | 23,995 | ||
| Net working capital (DKKm) | 4,071 | 2,350 | ||
| ROIC before tax (%) | 9.0 | 10.0 |
Quarterly business highlights
In Q2 2024, we continued executing on our long-term strategy of consolidating and developing multi-client warehouse campuses based on regional roadmaps. In Q2 2024, we have added new warehouse space, predominantly in Sweden and North America. While these efforts have resulted in continued above-market growth, there is a ramp-up period for new warehouses.
As part of DSV's overall commercial strategy, we continue to develop our vertical expertise and aligning our services globally in pursuit of global customers. In Q2 2024, we saw a positive development in cross-divisional collaboration with our largest customers and overall increased customer satisfaction rates across all customer segments.
Market development
In H1 2024, the demand for contract logistics services was slightly higher than the same period last year. The market is still characterised by low inventory levels, but we are starting to see increased activity and signs of improvement, and we estimate that the division gained market share.
Divisional revenue
For Q2 2024, revenue amounted to DKK 6,916 million, compared to DKK 5,898 million for the same period last year. Revenue for the quarter was up 17.0%. The increase in revenue for the quarter was primarily due to increased activity within the technology, automotive and healthcare verticals. The division also saw an increase in order lines driven by new wins. The Americas and EMEA regions delivered the strongest
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
performance during the quarter.
The division's revenue was DKK 12,905 million for the first six months of 2024, compared to DKK 11,523 million for the same period of 2023. Revenue increased 12.3% for the first six months.
Gross profit
For Q2 2024, gross profit amounted to DKK 2,576 million, compared to DKK 2,373 million for the same period last year. Gross profit for the quarter was up 8.1%.
For the first six months of 2024, gross profit was DKK 4,977 million, compared to DKK 4,658 million for the same period of 2023. Gross profit was up by 7.0%.
The division's gross margin was 38.6% for H1 2024, compared to 40.4% for the same period last year. We have seen an expected temporary decline in gross margin as we continue to execute on our strategy of developing multi-client warehouse campuses with a high degree of automation.
EBIT before special items
For Q2 2024, EBIT before special items amounted to DKK 661 million, compared to DKK 613 million for the same period last year. EBIT before special items for the quarter was up 6.8% as a result of increased activity with existing customers and warehouse expansions.
EBIT before special items was DKK 1,161 million for the first six months of 2024, compared to DKK 1,161 million for the same period of 2023. EBIT before special items was on level with last year.
The conversion ratio was 23.3% for H1 2024, compared to 24.9% for the same period last year. In the first half of 2024, the cost base was impacted by higher depreciations due to the addition of new warehouses. The expected decline in conversion ratio was due to newly opened warehouses with lower utilisation in the ramp-up phase. The existing warehouse capacity continues to operate with a high conversion ratio.
Net working capital
The division's net working capital came to DKK 4,071 million on 30 June 2024, compared to DKK 2,350 million on 30 June 2023. The development was mainly impacted by an increase in funds tied up in property projects supporting our roadmap for expanding our global footprint.
Growth Solutions 2023 – 2024
| (DKKm) | Q2 2023 | Currency translation | Q2 2023 in constant currencies | Growth | Growth in constant currencies % | Q2 2024 |
|---|---|---|---|---|---|---|
| Divisional revenue | 5,898 | 12 | 5,910 | 1,006 | 17.0% | 6,916 |
| Gross profit | 2,373 | 10 | 2,383 | 193 | 8.1% | 2,576 |
| EBIT before special items | 613 | 6 | 619 | 42 | 6.8% | 661 |
| (DKKm) | YTD 2023 | Currency translation | YTD 2023 in constant currencies | Growth | Growth in constant currencies % | YTD 2024 |
| --- | --- | --- | --- | --- | --- | --- |
| Divisional revenue | 11,523 | (32) | 11,491 | 1,414 | 12.3% | 12,905 |
| Gross profit | 4,658 | (5) | 4,653 | 324 | 7.0% | 4,977 |
| EBIT before special items | 1,161 | 6 | 1,167 | (6) | (0.5%) | 1,161 |
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Interim financial statements
Statement of profit or loss
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Revenue | 41,157 | 37,727 | 79,497 | 78,681 |
| Direct costs | 30,316 | 26,396 | 58,391 | 55,959 |
| Gross profit | 10,841 | 11,331 | 21,106 | 22,722 |
| Other external costs | 1,143 | 1,235 | 2,286 | 2,575 |
| Staff costs | 4,189 | 4,074 | 8,279 | 8,184 |
| Operating profit before amortisation and depreciation (EBITDA) before special items | 5,509 | 6,022 | 10,541 | 11,963 |
| Amortisation and depreciation | 1,410 | 1,317 | 2,801 | 2,586 |
| Operating profit (EBIT) before special items | 4,099 | 4,705 | 7,740 | 9,377 |
| Financial income | 34 | 169 | 62 | 259 |
| Financial expenses | 555 | 341 | 1,067 | 777 |
| Profit before tax | 3,578 | 4,533 | 6,735 | 8,859 |
| Tax on profit for the period | 866 | 1,158 | 1,630 | 2,197 |
| Profit for the period | 2,712 | 3,375 | 5,105 | 6,662 |
| Profit for the period attributable to: | ||||
| Shareholders of DSV A/S | 2,699 | 3,362 | 5,076 | 6,628 |
| Non-controlling interests | 13 | 13 | 29 | 34 |
| Earnings per share: | ||||
| Earnings per share of DKK 1 for the period | 12.9 | 15.6 | 24.3 | 30.7 |
| Diluted earnings per share of DKK 1 for the period | 12.9 | 15.5 | 24.3 | 30.4 |
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Statement of comprehensive income
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Profit for the period | 2,712 | 3,375 | 5,105 | 6,662 |
| Items that may be reclassified to profit or loss when certain conditions are met: | ||||
| Net foreign exchange differences recognised in OCI | 263 | (351) | 351 | (1,252) |
| Fair value adjustments of hedging instruments | (6) | (6) | (3) | (8) |
| Fair value adjustments of hedging instruments transferred to financial expenses | - | 1 | 1 | 3 |
| Tax on items reclassified to profit or loss | - | 2 | (1) | 2 |
| Items that will not be reclassified to profit or loss: | ||||
| Actuarial gains/(losses) | 84 | 194 | 143 | 110 |
| Tax on items that will not be reclassified | (19) | (48) | (33) | (32) |
| Other comprehensive income, net of tax | 322 | (208) | 458 | (1,177) |
| Total comprehensive income | 3,034 | 3,167 | 5,563 | 5,485 |
| Total comprehensive income attributable to: | ||||
| Shareholders of DSV A/S | 3,018 | 3,152 | 5,525 | 5,451 |
| Non-controlling interests | 16 | 15 | 38 | 34 |
| Total | 3,034 | 3,167 | 5,563 | 5,485 |
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Statement of cash flows
| (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Operating profit before amortisation and depreciation (EBITDA) before special items | 5,509 | 6,022 | 10,541 | 11,963 |
| Adjustments: | ||||
| Share-based payments | 90 | 71 | 163 | 124 |
| Change in provisions | (96) | 14 | (103) | 8 |
| Change in working capital | (1,681) | 551 | (3,773) | 2,540 |
| Special items, paid | - | (131) | - | (263) |
| Interest received | 34 | 169 | 62 | 259 |
| Interest paid, lease liabilities | (278) | (205) | (530) | (400) |
| Interest paid, other | (228) | (240) | (465) | (438) |
| Income tax paid | (888) | (1,623) | (1,677) | (3,044) |
| Cash flow from operating activities | 2,462 | 4,628 | 4,218 | 10,749 |
| Purchase of intangible assets | (118) | (113) | (198) | (203) |
| Purchase of property, plant and equipment | (422) | (589) | (983) | (997) |
| Disposal of property, plant and equipment | 260 | 230 | 677 | 245 |
| Acquisition of subsidiaries and activities | - | (550) | - | (550) |
| Change in other financial assets | 152 | (75) | 18 | 11 |
| Cash flow from investing activities | (128) | (1,097) | (486) | (1,494) |
| Free cash flow | 2,334 | 3,531 | 3,732 | 9,255 |
| Proceeds from borrowings | 2,097 | (338) | 4,423 | 86 |
| Repayment of borrowings | (53) | (309) | (117) | (356) |
| Repayment of lease liabilities | (1,105) | (973) | (2,060) | (1,931) |
| Other financial liabilities incurred | 34 | 52 | 32 | 49 |
| Transactions with shareholders: | ||||
| Dividends distributed to shareholders of DSV A/S | - | - | (1,533) | (1,424) |
| Purchase of treasury shares | (915) | (4,211) | (2,528) | (7,230) |
| Sale of treasury shares | 45 | 451 | 537 | 1,339 |
| Other transactions with shareholders and non-controlling interests | (26) | - | 44 | (5) |
| Cash flow from financing activities | 77 | (5,328) | (1,202) | (9,472) |
| Cash flow for the period | 2,411 | (1,797) | 2,530 | (217) |
| Cash and cash equivalents 1 January | 6,514 | 11,682 | 6,452 | 10,160 |
| Cash flow for the period | 2,411 | (1,797) | 2,530 | (217) |
| Currency translation | 10 | (32) | (47) | (90) |
| Cash and cash equivalents end of period | 8,935 | 9,853 | 8,935 | 9,853 |
The statement of cash flows cannot be directly derived from the statement of financial position and statement of profit or loss.
| Statement of adjusted free cash flow (DKKm) | Q2 2024 | Q2 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Free cash flow | 2,334 | 3,531 | 3,732 | 9,255 |
| Acquisition of subsidiaries and activities | - | 550 | - | 550 |
| Special items | - | 131 | - | 263 |
| Repayment of lease liabilities | (1,105) | (973) | (2,060) | (1,931) |
| Adjusted free cash flow | 1,229 | 3,239 | 1,672 | 8,137 |
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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Statement of financial position
| Assets (DKKm) | 30.06.2024 | 31.12.2023 | 30.06.2023 |
|---|---|---|---|
| Intangible assets | 77,391 | 77,106 | 77,298 |
| Right-of-use assets | 17,106 | 15,655 | 15,216 |
| Property, plant and equipment | 6,491 | 6,214 | 5,991 |
| Other receivables | 2,482 | 2,461 | 2,949 |
| Deferred tax assets | 3,089 | 3,300 | 3,404 |
| Total non-current assets | 106,559 | 104,736 | 104,858 |
| Trade receivables | 25,225 | 22,296 | 24,235 |
| Contract assets | 6,351 | 4,985 | 4,512 |
| Inventories | 5,860 | 4,314 | 3,583 |
| Other receivables | 4,813 | 4,283 | 4,455 |
| Cash and cash equivalents | 8,935 | 6,452 | 9,853 |
| Assets held for sale | 32 | 44 | 44 |
| Total current assets | 51,216 | 42,374 | 46,682 |
| Total assets | 157,775 | 147,110 | 151,540 |
| Equity and liabilities (DKKm) | 30.06.2024 | 31.12.2023 | 30.06.2023 |
| --- | --- | --- | --- |
| Share capital | 214 | 219 | 219 |
| Reserves | (375) | (718) | (344) |
| Retained earnings | 71,060 | 69,202 | 70,205 |
| DSV A/S shareholders' share of equity | 70,899 | 68,703 | 70,080 |
| Non-controlling interests | 269 | 263 | 236 |
| Total equity | 71,168 | 68,966 | 70,316 |
| Lease liabilities | 15,865 | 14,139 | 13,714 |
| Borrowings | 23,767 | 20,004 | 21,503 |
| Pensions and other post-employment benefit plans | 1,132 | 1,281 | 1,063 |
| Provisions | 3,997 | 3,772 | 4,163 |
| Deferred tax liabilities | 558 | 609 | 556 |
| Total non-current liabilities | 45,319 | 39,805 | 40,999 |
| Lease liabilities | 4,080 | 3,808 | 3,604 |
| Borrowings | 2,642 | 2,139 | 458 |
| Trade payables | 14,453 | 13,111 | 13,142 |
| Accrued cost of services | 8,372 | 7,920 | 9,342 |
| Provisions | 1,680 | 1,967 | 2,233 |
| Other payables | 8,994 | 8,138 | 9,417 |
| Tax payables | 1,067 | 1,256 | 2,029 |
| Total current liabilities | 41,288 | 38,339 | 40,225 |
| Total liabilities | 86,607 | 78,144 | 81,224 |
| Total equity and liabilities | 157,775 | 147,110 | 151,540 |
Page 19 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Statement of changes in equity at 30 June 2024
Attributable to shareholders of DSV A/S
| (DKKm) | Share capital | Reserves | Retained earnings | Total | Non-controlling interests | Total equity |
|---|---|---|---|---|---|---|
| Equity at 1 January 2024 | 219 | (718) | 69,202 | 68,703 | 263 | 68,966 |
| Profit for the period | - | - | 5,076 | 5,076 | 29 | 5,105 |
| Other comprehensive income, net of tax | - | 339 | 110 | 449 | 9 | 458 |
| Total comprehensive income for the period | - | 339 | 5,186 | 5,525 | 38 | 5,563 |
| Transactions with shareholders and non-controlling interests: | ||||||
| Share-based payments | - | - | 163 | 163 | - | 163 |
| Tax on share-based payments | - | - | (44) | (44) | - | (44) |
| Dividends distributed | - | - | (1,533) | (1,533) | (23) | (1,556) |
| Purchase of treasury shares | - | (2) | (2,526) | (2,528) | - | (2,528) |
| Sale of treasury shares | - | 1 | 536 | 537 | - | 537 |
| Capital reduction | (5) | 5 | - | - | - | - |
| Dividends on treasury shares | - | - | 75 | 75 | - | 75 |
| Other adjustments | - | - | 1 | 1 | (9) | (8) |
| Total equity transactions | (5) | 4 | (3,328) | (3,329) | (32) | (3,361) |
| Equity at 30 June 2024 | 214 | (375) | 71,060 | 70,899 | 269 | 71,168 |
Statement of changes in equity at 30 June 2023
Attributable to shareholders of DSV A/S
| (DKKm) | Share capital | Reserves | Retained earnings | Total | Non-controlling interests | Total equity |
|---|---|---|---|---|---|---|
| Equity at 1 January 2023 | 219 | 919 | 70,381 | 71,519 | 222 | 71,741 |
| Profit for the period | - | - | 6,628 | 6,628 | 34 | 6,662 |
| Other comprehensive income, net of tax | - | (1,260) | 83 | (1,177) | - | (1,177) |
| Total comprehensive income for the period | - | (1,260) | 6,711 | 5,451 | 34 | 5,485 |
| Transactions with shareholders and non-controlling interests: | ||||||
| Share-based payments | - | - | 124 | 124 | - | 124 |
| Tax on share-based payments | - | - | 286 | 286 | - | 286 |
| Dividends distributed | - | - | (1,424) | (1,424) | (25) | (1,449) |
| Purchase of treasury shares | - | (6) | (7,224) | (7,230) | - | (7,230) |
| Sale of treasury shares | - | 3 | 1,336 | 1,339 | - | 1,339 |
| Dividends on treasury shares | - | - | 19 | 19 | - | 19 |
| Other adjustments | - | - | (4) | (4) | 5 | 1 |
| Total equity transactions | - | (3) | (6,887) | (6,890) | (20) | (6,910) |
| Equity at 30 June 2023 | 219 | (344) | 70,205 | 70,080 | 236 | 70,316 |
Page 20 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
Notes to the interim financial statements
1 Material accounting policy information
This Interim Financial Report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’ as adopted by the European Union and additional disclosure requirements for listed companies under the Danish Financial Statements Act.
Material accounting policies applied in preparing the Interim Financial Report are consistent with those applied in preparing the DSV Annual Report 2023. The DSV Annual Report 2023 provides a full description of the Group’s accounting policies.
Changes in accounting policies
The DSV Group has implemented amendments to the IFRS Accounting Standards effective as of 1 January 2024 as adopted by the European Union.
None of the amendments implemented have 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 judgements and estimates that affect the reported amounts and disclosures in the financial statements and in the notes to the 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 judgements and estimates are applied are listed in Chapter 1 of the Notes to the 2023 DSV 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 adopted by the EU and therefore not relevant for the preparation of the H1 2024 Interim Financial Report.
4 Segment information – divisions
| Air & Sea | Road | Solutions | Non-allocated items and eliminations | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (DKKm) | YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 |
| Condensed statement of profit or loss | ||||||||||
| Revenue | 47,058 | 48,915 | 19,602 | 18,405 | 12,611 | 11,151 | 226 | 210 | 79,497 | 78,681 |
| Intersegment revenue | 274 | 291 | 1,384 | 1,339 | 294 | 372 | (1,952) | (2,002) | - | - |
| Divisional revenue | 47,332 | 49,206 | 20,986 | 19,744 | 12,905 | 11,523 | (1,726) | (1,792) | 79,497 | 78,681 |
| Direct costs | 35,497 | 35,425 | 16,961 | 15,745 | 7,928 | 6,865 | (1,995) | (2,076) | 58,391 | 55,959 |
| Gross profit | 11,835 | 13,781 | 4,025 | 3,999 | 4,977 | 4,658 | 269 | 284 | 21,106 | 22,722 |
| Other external expenses | 1,798 | 1,906 | 643 | 730 | 885 | 873 | (1,040) | (934) | 2,286 | 2,575 |
| Staff costs | 3,937 | 4,098 | 1,900 | 1,820 | 1,308 | 1,201 | 1,134 | 1,065 | 8,279 | 8,184 |
| Operating profit before amortisation, depreciation (EBITDA) before special items | 6,100 | 7,777 | 1,482 | 1,449 | 2,784 | 2,584 | 175 | 153 | 10,541 | 11,963 |
| Amortisation and depreciation | 575 | 577 | 443 | 429 | 1,623 | 1,423 | 160 | 157 | 2,801 | 2,586 |
| Operating profit (EBIT) before special items | 5,525 | 7,200 | 1,039 | 1,020 | 1,161 | 1,161 | 15 | (4) | 7,740 | 9,377 |
| Condensed statement of financial position | ||||||||||
| Total assets | 80,784 | 85,715 | 27,300 | 24,594 | 35,861 | 30,840 | 13,830 | 10,391 | 157,775 | 151,540 |
| Total liabilities | 51,971 | 58,360 | 21,282 | 18,106 | 29,359 | 24,174 | (16,005) | (19,416) | 86,607 | 81,224 |
- Reference is made to the statement of profit or loss for reconciliation of operating profit (EBIT) before special items to profit for the period.
Page 21 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
5 Revenue
| Services and geographical segmentation of revenue (DKKm) | EMEA | Americas | APAC | Total | ||||
|---|---|---|---|---|---|---|---|---|
| Q2 2024 | Q2 2023 | Q2 2024 | Q2 2023 | Q2 2024 | Q2 2023 | Q2 2024 | Q2 2023 | |
| Air services | 5,184 | 5,117 | 3,599 | 3,723 | 4,582 | 3,326 | 13,365 | 12,166 |
| Sea services | 5,445 | 5,354 | 3,715 | 3,525 | 2,091 | 1,948 | 11,251 | 10,827 |
| Road services | 9,573 | 8,750 | 988 | 900 | - | - | 10,561 | 9,650 |
| Solutions services | 4,911 | 3,898 | 1,211 | 1,181 | 794 | 819 | 6,916 | 5,898 |
| Total | 25,113 | 23,119 | 9,513 | 9,329 | 7,467 | 6,093 | 42,093 | 38,541 |
| Non-allocated items and eliminations | (936) | (814) | ||||||
| Total revenue | 41,157 | 37,727 | ||||||
| Services and geographical segmentation of revenue (DKKm) | EMEA | Americas | APAC | Total | ||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 | YTD 2024 | YTD 2023 | |
| Air services | 10,237 | 10,957 | 7,015 | 8,167 | 8,280 | 7,307 | 25,532 | 26,431 |
| Sea services | 10,732 | 11,225 | 7,120 | 7,541 | 3,948 | 4,009 | 21,800 | 22,775 |
| Road services | 19,126 | 17,940 | 1,860 | 1,804 | - | - | 20,986 | 19,744 |
| Solutions services | 8,917 | 7,542 | 2,407 | 2,328 | 1,581 | 1,653 | 12,905 | 11,523 |
| Total | 49,012 | 47,664 | 18,402 | 19,840 | 13,809 | 12,969 | 81,223 | 80,473 |
| Non-allocated items and eliminations | (1,726) | (1,792) | ||||||
| Total revenue | 79,497 | 78,681 |
6 Financial instruments – fair value hierarchy
Derivative financial instruments
DSV has no financial instruments measured at fair value based on level 1 input (quoted active market prices) or level 3 input (non-observable market data). Derivative financial instruments are measured based on level 2 input (input other than quoted prices that are observable either directly or indirectly). The fair value of currency derivatives is determined based on generally accepted valuation methods using available observable market data. Calculated fair values are verified against comparable external market quotes on a monthly basis.
Issued bonds
The fair value of issued bonds measured at amortised cost is within level 1 of the fair value hierarchy.
Overdraft and credit facilities
The carrying amount of overdraft and credit facilities measured at amortised cost is not considered to differ significantly from the fair value.
Trade receivables, trade payables and other receivables
Receivables and payables pertaining to operating activities with short churn ratios are considered to have a carrying amount equal to fair value.
Cash and cash equivalents
The carrying amount of cash and cash equivalents is not considered to differ significantly from the fair value.
| (DKKm) | 30 June 2024 | 31 December 2023 | ||
|---|---|---|---|---|
| Carrying amount | Fair value | Carrying amount | Fair value | |
| Financial assets: | ||||
| Currency derivatives | 3 | 3 | 37 | 37 |
| Trade receivables | 25,225 | 25,225 | 22,296 | 22,296 |
| Other receivables | 7,295 | 7,295 | 6,744 | 6,744 |
| Cash and cash equivalents | 8,935 | 8,935 | 6,452 | 6,452 |
| Financial assets measured at amortised costs | 41,455 | 41,455 | 35,492 | 35,492 |
| Financial liabilities: | ||||
| Currency derivatives | 23 | 23 | - | - |
| Issued bonds measured at amortised cost | 25,218 | 21,707 | 21,450 | 18,364 |
| Overdraft and credit facilities | 1,154 | 1,154 | 677 | 677 |
| Trade payables | 14,453 | 14,453 | 13,111 | 13,111 |
| Financial liabilities measured at amortised cost | 40,825 | 37,314 | 35,238 | 32,152 |
Page 22 of 23
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024
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 A/S for the six-month period ended 30 June 2024.
The Interim Financial Report, which has not been audited or reviewed by the Company's 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 financial position on 30 June 2024 and the profit or loss and cash flows of the Group for the six-month period ended 30 June 2024.
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. Aside from 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 2023.
Hedehusene, 24 July 2024
Executive Board:
Jens H. Lund
CEO
Michael Ebbe
CFO
Brian Ejsing
COO
Board of Directors:
Thomas Plenborg
Chairman
Jørgen Møller
Deputy Chairman
Marie-Louise Aamund
Beat Walti
Niels Smedegaard
Tarek Sultan
Al-Essa
Benedikte Leroy
Helle Østergaard
Kristiansen
INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 1123 – 24 July 2024