XCSE:DSV ESEF Annual Report
DSV A/S (XCSE:DSV)
ESEF Annual Report
2021-10-28
For: 2021-09-30
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Added on
September 23, 2026
DSV A/S , Hovedgaden 630 , 2640 Hedehusene , Denmark , tel. +45 43 20 30 40 , CVR No. 58233528 , www.dsv .com . 
49,557 28,125 121,004 84,216 39,734 20,873 95,063 62,894 9,823 7,252 25,941 21,322 1,030 831 2,697 2,493 3,277 2,708 9,167 8,846 5,516 3,713 14,077 9,983 1,044 988 2,967 3,079 4,472 2,725 11,110 6,904 154 453 154 1,479 119 58 311 214 284 536 750 1,511 4,153 1,794 10,517 4,128 992 457 2,500 1,070 3,161 1,337 8,017 3,058 3,138 1,341 7,992 3,054 23 25 4 13.7 5.9 35.6 13.4 13.4 5.8 34.8 13.2 
3,161 1,337 8,017 3,058 314 1,175 22 17 1 16 3 16 - 157 - 16 42 298 1,279 3,459 307 9,296 609 3,439 305 9,277 601 20 2 19 8 3,459 307 9,296 609 
14,077 9,983 118 100 33 163 214 6,271 7,139 173 302 1,631 - 63 788 7,059 6,510 12,038 2,395 263 12 735 758 3,739 1,116 4,060 2,043 3,739 1,116 333 8,132 2,909 
75,479 48,665 49,180 13,072 11,111 10,466 6,111 3,014 3,131 2,281 372 432 3,302 2,536 2,305 100,245 65,698 65,514 33,951 19,038 18,994 7,567 3,283 3,170 2,683 1,426 1,557 3,698 2,635 2,697 8,132 4,060 2,909 89 110 103 56,120 30,552 29,430 156,365 96,250 94,944 240 230 230 73,985 47,155 47,892 74,225 47,385 48,122 168 74,393 47,297 48,026 11,157 9,428 8,570 18,126 7,696 8,107 1,482 1,219 1,481 3,256 1,253 1,204 478 243 331 34,499 19,839 19,693 3,200 2,850 2,892 2,557 1,185 102 16,297 9,926 9,198 11,036 5,913 5,937 2,110 1,525 1,231 9,639 6,316 6,650 2,634 1,399 1,215 47,473 29,114 27,225 81,972 48,953 46,918 156,365 96,250 94,944 
230 49,991 47,385 47,297 - - 7,992 7,992 25 8,017 - 1,183 102 1,285 1,279 - 1,183 8,094 9,277 19 9,296 - - 118 118 - 118 - - 734 734 - 734 - - - - - 3 732 735 - 735 16 - 24,479 24,495 - 24,495 6 - - - - - 3 5,073 5,076 - 5,076 - - - - 283 283 - - 28 28 - 28 - - 12 12 10 2 17,551 17,563 237 17,800 240 75,636 74,225 168 74,393 235 49,460 49,430 49,319 - - 3,054 3,054 4 3,058 - 4 - 2,921 601 8 609 - - 100 100 - 100 - - 318 318 - 318 - - - - - 2 1,309 1,311 - 1,311 5 - - - - - - - - 1 1 - - 23 23 - 23 - - 8 2 7 230 50,475 48,122 48,026 
Hedehusene , 26 October 2 021 Jens Bjørn Andersen CEO Jens H. Lund CFO Thomas Plenborg Chairman Jørgen Møller Deputy Chairman An nette Sadolin Birgit W. Nørgaard Marie-Louise Aamund Beat Walti Niels Smedegaard Tarek Sultan Al-Essa
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. 75,000 employees in more than 90 countries work passionately to deliver great customer
experiences and high-quality services. Read more at www.dsv.com
Page 1 of 22
INTERIM FINANCIAL REPORT
Q3 2021
Company Announcement No. 924
26 October 2021
Selected key figures and ratios for the period 1 January – 30 September 2021
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Key figures and ratios
Revenue
49,557
28,125
121,004
84,216
Gross profit
9,823
7,252
25,941
21,322
Operating profit (EBIT) before special items
4,472
2,725
11,110
6,904
Special items, costs
154
453
154
1,479
Profit after tax
3,161
1,337
8,017
3,058
Adjusted earnings for the period
3,331
1,746
8,301
4,339
Adjusted free cash flow
3,718
5,674
Conversion ratio
45.5%
37.6%
42.8%
32.4%
Diluted adjusted earnings per share of DKK 1 for the last 12 months
43.9
21.7
Jens Bjørn Andersen, Group CEO: “In August, we completed the acquisition of Agility’s Global Integrated Logistics business and took over
a well-run company and were joined by a team of skilled new colleagues. The integration is off to a good start, and in the coming period our
two organisations will be merged into one. The transport markets continue to be characterised by disruption and imbalances causing
extraordinary challenges for both our customers and us. Under the extraordinary market conditions, we are happy to report solid results
across all divisions.”
Outlook for 2021
On 11 October 2021, we pre-released the Q3 2021 numbers and upgraded the outlook for 2021. The guidance for 2021 is reiterated and
the expected special items regarding the integration are added:
• EBIT before special items is expected to be in the range of DKK 15,250-16,000 million
• The effective tax rate is expected to be approximately 23%
• Transaction and integration costs (special items) is expected to be in the level of DKK 500 million in 2021
Synergies and integration costs
Once fully integrated, Agility’s Global Integrated Logistics business is expected to contribute approximately DKK 3,000 million (previously
2,800 million) to the combined EBIT before special items on an annual basis. The integration is expected to be completed by the end of Q3
2022 and the full-year EBIT effect is expected in 2023. The estimated EBIT impact includes the underlying result in Agility GIL and
synergies from the consolidation of operations, logistics facilities, back-office functions and IT infrastructure.
Around 30% of the EBIT contribution is expected to impact the income statement in 2021, around 85% in 2022 and 100% in 2023. Total
transaction and integration costs are expected in the level of DKK 1,500 million. These costs will be charged to the income statement under
special items. We expect that approximately DKK 500 million of the special items (transaction and integration costs) will materialise in 2021
and the rest in 2022.
Share buyback
A separate company announcement about the launch of a new share buyback programme of up to DKK 5,000 million will be issued today.
The programme will run until 8 February 2022 or earlier if finalised.
Contacts
Investor Relations: Flemming Ole Nielsen, tel. +45 43 20 33 92, fl[email protected]om
Media: Maiken Riise Andersen, tel. +45 43 20 30 74, maiken.r.ande[email protected]
Yours sincerely,
DSV A/S
Page 2 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Financial highlights
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Results (DKKm)
Revenue
49,557
28,125
121,004
84,216
Gross profit
9,823
7,252
25,941
21,322
Operating profit before amortisation and depreciation (EBITDA) before
special items
5,516
3,713
14,077
9,983
Operating profit (EBIT) before special items
4,472
2,725
11,110
6,904
Special items, costs
154
453
154
1,479
Net financial expenses
165
478
439
1,297
Profit for the period
3,161
1,337
8,017
3,058
Adjusted earnings for the period
3,331
1,746
8,301
4,339
Cash flows (DKKm)
Operating activities
6,271
7,139
Investing activities
788
(629)
Free cash flow
7,059
6,510
Adjusted free cash flow
3,718
5,674
Share buyback
(12,715)
(3,030)
Dividends distributed
(920)
(588)
Cash flow for the period
3,739
1,116
Financial position (DKKm)
DSV A/S shareholders’ share of equity
74,225
48,122
Balance sheet total
156,365
94,944
Net working capital
8,815
3,402
Net interest-bearing debt
28,316
16,599
Invested capital
100,316
65,018
Gross investment in property, plant and equipment
745
676
Financial ratios (%)*
Gross margin
19.8
25.8
21.4
25.3
Operating margin
9.0
9.7
9.2
8.2
Conversion ratio
45.5
37.6
42.8
32.4
Effective tax rate
23.9
25.5
23.8
25.9
ROIC before tax
16.6
12.9
Return on equity (ROE)
15.0
7.1
Solvency ratio
47.5
50.7
Gearing ratio
1.6
1.3
Share ratios*
Earnings per share of DKK 1 for the last 12 months
40.8
15.3
Diluted adjusted earnings per share of DKK 1 for the last 12 months
43.9
21.7
Number of shares issued (’000)
240,000
230,000
Number of treasury shares (’000)
2,351
2,110
Average number of shares issued (’000) for the last 12 months
225,348
228,016
Average diluted number of shares (’000) for the last 12 months
230,194
231,787
Share price end of period (DKK)
1,540.5
1,037.5
Non-Financials
Number of full-time employees at 30 September
79,325
56,090
* For a definition of key figures and ratios, please refer to page 79 of the 2020 DSV Annual Report.
Page 3 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Management’s commentary
The Group achieved a gross profit of DKK 25,941 million for the first nine months of 2021, compared to
DKK 21,322 million for the same period last year. The increase was driven by higher activity across all
divisions and positive impact from extraordinary market conditions on the global transport markets.
EBIT before special items for the first nine months of 2021 came to DKK 11,110 million, compared to DKK
6,904 million for the same period last year. The increase was attributable to a combination of increased
gross profit and higher productivity, reflected in a record-high conversion ratio of 42.8% for the Group.
Agility’s Global Integrated Logistics business was included in the consolidated results as per 16 August
2021.
For the rolling 12-month period ended 30 September 2021, the Group achieved a 102% increase in
diluted adjusted earnings per share.
FINANCIAL DEVELOPMENT 2020 - 2021
Change
(DKKm)
Q3 2020
Currency
translation
Agility GIL
Growth
Growth %*
Q3 2021
Revenue
28,125
183
4,395
16,854
59.5%
49,557
Gross profit
7,252
68
866
1,637
22.4%
9,823
EBIT before special items
2,725
30
270
1,447
52.5%
4,472
Gross margin (%)
25.8
19.8
Operating margin (%)
9.7
9.0
Conversion ratio (%)
37.6
45.5
Change
(DKKm)
YTD 2020
Currency
translation
Agility GIL
Growth
Growth %*
YTD 2021
Revenue
84,216
(1,569)
4,395
33,962
41.1%
121,004
Gross profit
21,322
(345)
866
4,098
19.5%
25,941
EBIT before special items
6,904
(119)
270
4,055
59.8%
11,110
Gross margin (%)
25.3
21.4
Operating margin (%)
8.2
9.2
Conversion ratio (%)
32.4
42.8
* In constant currencies excluding GIL impact
Integration of Agility’s Global Integrated
Logistics business
The acquisition of Agility’s Global Integrated Logistics business
(GIL) was closed on 16 August 2021, as of which date GIL has
been included in the consolidated financial statements of DSV.
DSV acquired GIL in an all-share transaction, and a total of
19,304,348 DSV shares was used as consideration. The
enterprise value of the transaction was approximately DKK 30.2
billion.
GIL is a significant global provider of supply chain solutions,
employing more than 17,000 employees globally and with a
strong presence in the Middle East and APAC.
The business combination had a significant impact on the
consolidated balance sheet of the Group, but only limited impact
on the income statement year-to-date in 2021.
We have initiated the operational and legal integration of GIL,
while focusing on maintaining a high service level towards our
customers in the transition phase. Once fully integrated, GIL is
expected to contribute with approximately DKK 3,000 million
(previously 2,800 million) to the combined EBIT before special
items on an annual basis. The EBIT impact includes synergies
from the consolidation of operations, logistics facilities, back-
office functions and IT infrastructure, and we expect full-year
effect from 2023.
Around 30% of the EBIT contribution is expected to impact the
income statement in 2021, around 85% in 2022 and 100% in
Page 4 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
2023. Total transaction and integration costs are expected in the
level of DKK 1,500 million. These costs will be charged to the
income statement under special items. We expect that
approximately DKK 500 million of the transaction and integration
costs will materialise in 2021 and the rest in 2022.
The GIL activities have been included in the existing DSV
divisional structure. The acquisition will have the largest impact
on the Air & Sea division. Approximately 75-80% of the activities
of GIL are air and sea freight related and the rest are Road and
Solutions services. For further information, please see note 6.
Results for the period
Revenue
For the first nine months of 2021, revenue amounted to DKK
121,004 million, compared to DKK 84,216 million last year.
Adjusted for exchange rate fluctuations and excluding GIL,
growth for the nine-month period was 41.1%.
Revenue by division compared to same period last year is
specified below:
(DKKm)
Q3 2021
Growth*
YTD
2021
Growth*
Air & Sea
36,861
85.0%
85,733
57.2%
Road
8,783
12.1%
25,502
12.5%
Solutions
4,739
20.3%
12,345
17.6%
Group and
eliminations
(826)
(2,576)
Total
49,557
59.5%
121,004
41.1%
* In constant currencies excluding GIL impact
The revenue growth in Air & Sea was driven by higher freight
rates and higher transport volumes, mainly in air freight. The
market was negatively impacted by COVID-19 in 2020, but
activity levels have recovered in 2021 in most markets, most
significantly on the Trans-Pacific trade lanes.
The pandemic continues to create operational disruption due to
consequences of the COVID-19 lockdowns, 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 the situation has worsened during Q3 2021 for both
air and sea freight.
The revenue contribution from GIL (1.5 months) came to DKK
4,395 million in Q3 2021, of which DKK 3,580 million was
included in Air & Sea and was impacted by the same market
factors.
Road and Solutions have also achieved strong growth in
revenue, driven by a continued recovery of volumes compared
to 2020 and market share gains in both divisions. Growth in
Road and Solutions was also positively impacted by the addition
of GIL and a couple of smaller acquisitions (Prime Cargo and
Globeflight).
Revenue by division, YTD 2021
Gross profit
For the first nine months of 2021, gross profit amounted to DKK
25,941 million, compared to DKK 21,322 million last year. In
constant currencies and excluding GIL, increase in gross profit
was 19.5%.
Gross profit by division compared to same period last year is
specified below:
(DKKm)
Q3 2021
Growth*
YTD
2021
Growth*
Air & Sea
6,314
31.3%
16,244
24.7%
Road
1,745
5.9%
5,170
12.4%
Solutions
1,717
13.5%
4,442
11.1%
Group and
eliminations
47
85
Total
9,823
22.4%
25,941
19.5%
* In constant currencies excluding GIL impact
The increase in Air & Sea was mainly driven by volume growth
in air freight and improved yields in sea freight. The yields were
positively impacted by the extraordinary market conditions
characterised by volatility, tight capacity and high freight rates.
The gross profit contribution from GIL (1.5 months) came to
DKK 866 million in Q3 2021, of which DKK 624 million were
included in Air & Sea. Similar to DSV, the gross profit from the
GIL activities was positively impacted by the market conditions.
In Road and Solutions, the increase in gross profit was driven by
growth in activity compared to 2020, as markets have generally
recovered.
Gross profit by division, YTD 2021
The gross margin was 21.4% for the first nine months,
compared to 25.3% for the same period last year. The decline
mainly relates to Air & Sea, where higher freight rates cause
higher pass-through revenue and thus a lower gross margin.
Furthermore, the GIL business carries lower average gross
Page 5 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
margin.
EBIT before special items
EBIT before special items amounted to DKK 11,110 million for
the first nine months of 2021, compared to DKK 6,904 million
last year. In constant currencies and excluding GIL, increase in
EBIT before special items was 59.8%.
EBIT by division compared to same period last year is specified
below:
(DKKm)
Q3 2021
Growth*
YTD
2021
Growth*
Air & Sea
3,521
65.1%
8,757
67.5%
Road
465
(1.1%)
1,344
36.7%
Solutions
486
39.5%
1,027
38.1%
Group and
eliminations
-
(18)
Total
4,472
52.5%
11,110
59.8%
* In constant currencies excluding GIL impact
The increase in EBIT was driven by the increase in gross profit
in all divisions combined with the effect of continued strong cost
management and GIL activity.
The EBIT before special items from GIL (1.5 months) came to
DKK 270 million in Q3 2021, of which DKK 198 million were
included in Air & Sea. The EBIT contribution from GIL in Q3 was
positively impacted by the extraordinary logistics markets and
does not reflect normalised full-year result.
Conversion ratio for the Group reached 42.8% for the first nine
months, compared to 32.4% for the same period last year. The
increase was driven by the full-year impact of Panalpina
synergies and cost savings, but was also positively impacted by
the current extraordinary market conditions.
EBIT by division, YTD 2021
Transaction and integration costs
Transaction and integration costs (reported under special items,
costs) totalled DKK 154 million for the first nine months of 2021
(2020: DKK 1,479 million) and consist of transaction and
integration costs related to the acquisition of GIL.
Financial items
Financial items totalled a net expense of DKK 439 million for the
first nine months, compared to DKK 1,297 million for the same
period last year.
Foreign exchange adjustments amounted to an income of DKK
148 million (first nine months of 2020: expense of DKK 797
million) and were primarily related to intercompany loans
between DSV entities in different countries and had no cash
impact.
(DKKm)
YTD 2021
YTD 2020
Interest on lease liabilities
352
318
Other interest cost, net
224
165
Interest on pensions
11
17
Foreign exchange adjustments
(148)
797
Financial expenses
439
1,297
Tax on profit for the period
The effective tax rate came to 23.8% for the first nine months,
compared to 25.9% for the same period last year. The effective
tax rate for the Group is normally around 23%; however, the
effective tax rate can be impacted by non-deductible
transactions and integration costs during large integrations.
Profit for the period
Profit for the first nine months of 2021 was DKK 8,017 million,
compared to DKK 3,058 million for the same period of 2020. The
improved profit for the period was driven by higher EBIT and
lower net financial expenses.
Diluted adjusted earnings per share
The rolling 12-month figure increased by 102% compared to last
year and came to DKK 43.9 per share (2020: DKK 21.7 per
share). The capital increase carried out in August 2021 has not
yet fully impacted the average number of shares. The impact
from the capital increase will gradually materialise over a 12-
month period.
Cash flow
CASH FLOW STATEMENT
(DKKm)
YTD 2021
YTD 2020
Cash flow from operating activities
6,271
7,139
Cash flow from investing activities
788
(629)
Free cash flow
7,059
6,510
Cash flow from financing activities
(3,320)
(5,394)
Cash flow for the period
3,739
1,116
Free cash flow
7,059
6,510
Repayment of lease liabilities
(2,261)
(2,342)
Net acquisition of subsidiaries and activities
(1,631)
-
Special items (restructuring costs)
551
1,506
Adjusted free cash flow
3,718
5,674
Cash flow from operating activities was positively affected by
higher EBITDA before special items, offset by an increase in
NWC mainly caused by the high freight rates resulting in the
significant growth in trade receivables during 2021.
Cash flow from investing activities amounted to DKK 788 million
for the first nine months of 2021, compared to a negative cash
flow of DKK 629 million for the same period of 2020. The
development is due to the Agility GIL transaction, where a net
cash position of DKK 1,819 million was included as positive
cash flow from acquisition.
Page 6 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Net working capital
On 30 September 2021, the Group’s net working capital was
DKK 8,815 million, compared to DKK 3,402 million on 30
September 2020. NWC increased by DKK 5,413 million, of
which DKK 1,058 million relates to the acquisition of GIL.
During 2021, and especially in Q2 and Q3, receivables from our
customers were impacted by the record-high freight rates
leading to a significant increase in revenue and thereby increase
in trade receivables and NWC. Especially the infrastructure
challenges in the US impact the invoicing process due to delays
in seaports and airports.
The main NWC impact is seen in Air & Sea, as this division
achieved the highest growth rate of the three divisions in 2021
and the division generally has a higher NWC than the other
divisions. Furthermore, funds tied up in a specific property
development project have temporarily increased our NWC with
approximately DKK 1,000 million on 30 September 2021. The
facility will be divested in Q4 2021.
Adjusted for the extraordinary funds tied up in property and
relative to full-year revenue (pro forma incl. GIL and based on
current rate levels), the net working capital amounted to 3.6% on
30 September 2021 (30 September 2020: 3.0%).
Capital structure and finances
DSV A/S shareholders’ share of equity
DSV shareholders’ share of equity was DKK 74,225 million on
30 September 2021 (DKK 47,385 million on 31 December
2020).
The development in equity was driven by the capital increase
carried out in connection with the GIL transaction.
On 16 August 2021, the share capital was increased by
nominally DKK 16,000,000. The capital increase corresponds to
7.14% of the share capital. After the capital increase, the share
capital amounted to nominally DKK 240,000,000 divided into
240,000,000 shares of DKK 1 each. Each share has one vote. In
addition to the capital increase, 3,304,348 treasury shares were
used as consideration, totalling 19,304,348 shares.
On 30 September 2021, the Company’s portfolio of treasury
shares was 2,350,652 shares. On 25 October 2021, the portfolio
of treasury shares was 3,367,052 shares.
DEVELOPMENT IN EQUITY
(DKKm)
YTD 2021
YTD 2020
Equity at 1 January
47,385
49,430
Profit for the period (attributable to
DSV shareholders)
7,992
3,054
Currency translation, foreign
enterprises
1,181
(2,344)
Capital increase
24,495
-
Allocated to shareholders
(13,635)
(3,618)
Sale of treasury shares
735
1,311
Transfer of treasury shares as
business combination consideration
5,076
-
Other equity movements
996
289
Equity end of period
74,225
48,122
The solvency ratio excluding non-controlling interests was
47.5% on 30 September 2021 (30 September 2020: 50.7%).
Net interest-bearing debt
Net interest-bearing debt amounted to DKK 28,316 million on 30
September 2021, compared to DKK 16,599 million on 30
September 2020. NIBD increased by DKK 11,717 million, of
which DKK 1,168 million relates to GIL. During 2021 we have
issued three new Eurobonds for a total of DKK 11,900 million
(EUR 1,600 million):
• On 25 February 2021, a 10-year EUR 500 million
Eurobond (approximately DKK 3,750 million) was issued.
• On 30 June 2021, a 12-year EUR 600 million Eurobond
(approximately DKK 4,400 million) was issued.
• On 14 September 2021, a 15-year EUR 500 million
Eurobond (approximately DKK 3,750 million) was issued.
The financial gearing ratio (NIBD/EBITDA) was 1.6x on 30
September 2021, compared to 1.3x last year. We maintain the
financial gearing ratio target of below 2.0x NIBD/EBITDA, and a
new share buyback programme of DKK 5,000 million is initiated
on 26 October 2021.
The weighted average duration of the Company’s long-term
bonds, drawn and undrawn credit facilities and committed loans
was 8.6 years on 30 September 2021, compared to 4.4 years on
30 September 2020. The increase in average duration is a result
of the three bond issues in 2021.
Invested capital and ROIC
The invested capital including goodwill and customer
relationships amounted to DKK 101,316 million on 30
September 2021, compared to DKK 65,018 million on 30
September 2020. The increase is mainly due to the GIL
acquisition.
Return on invested capital including goodwill and customer
relationships was 16.6% for the rolling 12-month period ended
30 September 2021, compared to 12.9% for the same period
last year. Excluding goodwill and customer relationships, return
on invested capital was 62.7% for the rolling 12-month period
ended 30 September 2021, compared to 49.6% for the same
period last year.
Outlook
On 11 October 2021, we pre-released the Q3 numbers and
upgraded the outlook for 2021 as follows:
• EBIT before special items is expected to be in the range of
DKK 15,250-16,000 million
• The effective tax rate is expected to be approximately 23%
• Transaction and integration costs is expected to be in the
range of DKK 500 million
The outlook is based on the assumptions that the current
situation in the transport markets with strong demand and tight
capacity will continue throughout 2021. Furthermore, we
assume that the integration of Agility GIL will continue as
planned and that currency exchange rates will remain at the
current levels.
Page 7 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 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
majority of the Agility GIL business will be integrated into the Air & Sea division.
The division achieved a 24.7% increase in gross profit and 67.5% increase in EBIT before special items
for the first nine months of 2021. The increase in earnings was driven by an increase in activity levels and
high gross profit per unit due to the extraordinary market conditions. Furthermore, the full-year impact
from the Panalpina integration and cost savings initiatives in 2020 contributed to earnings growth.
INCOME STATEMENT
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Divisional revenue
36,861
17,910
85,733
53,728
Direct costs
30,547
13,607
69,489
40,887
Gross profit
6,314
4,303
16,244
12,841
Other external expenses
814
692
2,230
2,225
Staff costs
1,698
1,394
4,578
4,603
EBITDA before special items
3,802
2,217
9,436
6,013
Amortisation and depreciation
281
223
679
777
EBIT before special items
3,521
1,994
8,757
5,236
KEY FIGURES AND RATIOS
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Gross margin (%)
17.1
24.0
18.9
23.9
Operating margin (%)
9.6
11.1
10.2
9.7
Conversion ratio (%)
55.8
46.3
53.9
40.8
Number of full-time employees
25,742
18,067
Total invested capital (DKKm)
71,381
44,085
Net working capital (DKKm)
9,069
3,612
ROIC before tax (%)
18.3
14.0
Market development
Freight volume growth
DSV
Q3 2021
Market
Q3 2021
DSV YTD
2021
Market
YTD
2021
Sea freight –
TEUs
12%
0%
8%
5-10%
Air freight –
tonnes
29%
15-20%
13%
15-20%
Market growth rates are based on DSV estimates.
Global supply chains continue to be impacted by inefficiencies
caused by the pandemic, impacting both demand and available
capacity. For both air and sea, the markets have recovered and,
overall, volumes are back at or above 2019 levels.
The sea freight market continues to be characterised by
relatively robust demand and tight capacity due to port
congestion and lack of equipment. Freight rates are record-high
and schedule reliability low. Market growth has stagnated during
Q3 2021, partly due to capacity constraints, but also due to
lower growth on the Trans-Pacific trade lane.
DSV achieved 12% volume growth in sea freight in Q3 2021
(8% YTD 2021). Adjusted for the addition of GIL, DSV’s volume
growth was flat and in line with the market, according to our
estimates. Securing additional capacity has been a main
obstacle to gaining new customers during 2021, as we prioritise
existing customers.
In air freight, high demand, airport restrictions (COVID-19
restrictions) and limited belly space capacity in passenger
planes continue to impact the available capacity and are
keeping rates high. The return of passenger traffic is gradually
having a positive impact on capacity due to more belly capacity
entering the market, although this is primarily relevant for
Page 8 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
regional and domestic passenger flights, and we only expect a
gradual return of long-haul passenger flights.
DSV achieved 29% volume growth in air freight in Q3 2021
(13% YTD 2021). Adjusted for the addition of Agility GIL, we
estimate that DSV’s growth figures were in line with the market.
Divisional revenue
The division’s revenue amounted to DKK 85,733 million for the
first nine months of 2021, compared to DKK 53,728 million for
the same period last year.
For Q3 2021, revenue amounted to DKK 36,861 million,
compared to DKK 17,910 for the same period last year.
Excluding the impact from GIL, growth for the quarter was
85.0%.
The growth in revenue for the first nine months of 2021 was
driven by elevated freight rates and growth in volumes for both
air and sea. In Q3 2021, air freight was driving the volume
growth, while sea volumes were flat.
The revenue contribution from GIL (1.5 months) came to DKK
3,580 million in Q3 2021 and was also impacted by the
extraordinary market conditions.
The growth was driven by all regions; however, especially APAC
and US contributed to the growth during 2021.
Gross profit
For the first nine months of 2021, gross profit amounted to DKK
16,244 million, compared to DKK 12,841 million for the same
period last year.
For Q3 2021, gross profit amounted to DKK 6,314 million,
compared to DKK 4,303 million for the same period last year,
corresponding to a growth of 31.3%.
The increase in the first nine months of 2021 was driven by
higher yields per unit in sea freight and by increasing activity
levels, especially in air freight.
The gross profit contribution from GIL (1.5 months) came to
DKK 624 million in Q3 2021 and was impacted by the same
market factors.
The market conditions of 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 benefits
and strong carrier relationships enable us to find transport
solutions for our customers despite imbalances in the market. At
the same time, the disruptions impact 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 18.9% for the first nine months
of 2021, compared to 23.9% last year. The decline is primarily
due to higher freight rates, which cause lower gross margin due
to the pass-through element of freight rates on revenue. The
combination with GIL also impacts negatively on the gross
margins due to GIL’s lower gross margins in general.
EBIT before special items
EBIT before special items came to DKK 8,757 million for the first
nine months of 2021, compared to DKK 5,236 million for the
same period last year.
For Q3 2021, EBIT before special items was DKK 3,521 million,
compared to DKK 1,994 million for the same period last year,
which corresponds to an increase of 65.1% excluding the impact
from GIL.
The increase in EBIT before special items was driven by the
growth in gross profit and supported by the continued focus on
cost management. The full-year impact from the Panalpina
integration and COVID-19 cost savings initiatives in 2020 were
also contributing to EBIT growth, especially in H1 2021.
All regions contributed to the strong increase in EBIT before
special items with Americas and EMEA delivering the highest
EBIT increases.
The EBIT contribution from GIL (1.5 months) came to DKK 198
million in Q3 2021 and was also positively impacted by the
extraordinary market conditions.
The conversion ratio was 53.9% for the first nine months of
2021, compared to 40.8% for the same period last year, clearly
reflecting the high productivity of the staff, scalability of the
systems and cost discipline.
The number of full-time employees increased by 42% compared
to September 2020. The increase was mainly related to the
acquisition of GIL.
Net working capital
The Air & Sea division’s net working capital came to DKK 9,069
million on 30 September 2021, compared to DKK 3,612 million
on 30 September 2020. The steep increase was mainly due to
higher activity and higher freight rates and must be seen in
connection with the division’s 85% growth in revenue in Q3
2021. Furthermore, NWC was impacted by the inclusion of GIL
in Q3 2021. We also refer to the comments about NWC on page
6.
Page 9 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
FINANCIAL DEVELOPMENT 2020 – 2021
Change
(DKKm)
Q3 2020
Currency
translation
Agility GIL
Growth
Growth %*
Q3 2021
Divisional revenue
17,910
79
3,580
15,292
85.0%
36,861
Gross profit
4,303
32
624
1,355
31.3%
6,314
EBIT before special items
1,994
19
198
1,310
65.1%
3,521
Change
(DKKm)
YTD 2020
Currency
translation
Agility GIL
Growth
Growth %*
YTD 2021
Divisional revenue
53,728
(1,482)
3,580
29,907
57.2%
85,733
Gross profit
12,841
(317)
624
3,096
24.7%
16,244
EBIT before special items
5,236
(125)
198
3,448
67.5%
8,757
* In constant currencies excluding GIL impact
AIR AND SEA SPLIT
Sea freight
Air freight
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Divisional revenue
18,462
7,614
40,162
21,845
18,399
10,296
45,571
31,883
Direct costs
15,477
5,889
32,906
16,750
15,070
7,718
36,583
24,137
Gross profit
2,985
1,725
7,256
5,095
3,329
2,578
8,988
7,746
Gross margin (%)
16.2
22.7
18.1
23.3
18.1
25.0
19.7
24.3
Volume (TEUs/tonnes)
633,690
568,130
1,788,094
1,656,082
386,702
300,147
1,072,219
947,574
Gross profit per unit (DKK)
4,711
3,036
4,058
3,077
8,609
8,589
8,383
8,175
Page 10 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 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 operates more than 20,000 trucks and offers full load, part load
and groupage services through a network of more than 200 terminals. Agility GIL adds Road activities in
the Middle East and Europe.
For the first nine months of 2021, the Road division achieved a 36.7% increase in EBIT before special
items. The increase in earnings was driven by higher activity with a 12.4% increase in gross profit and
improved conversion ratio.
INCOME STATEMENT
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Divisional revenue
8,783
7,521
25,502
22,429
Direct costs
7,038
5,936
20,332
17,878
Gross profit
1,745
1,585
5,170
4,551
Other external expenses
282
251
812
780
Staff costs
761
650
2,282
2,093
EBITDA before special items
702
684
2,076
1,678
Amortisation and depreciation
237
236
732
708
EBIT before special items
465
448
1,344
970
KEY FIGURES AND RATIOS
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Gross margin (%)
19.9
21.1
20.3
20.3
Operating margin (%)
5.3
6.0
5.3
4.3
Conversion ratio (%)
26.6
28.3
26.0
21.3
Number of full-time employees
16,942
14,090
Total invested capital (DKKm)
11,327
9,172
Net working capital (DKKm)
(284)
(909)
ROIC before tax (%)
17.2
13.1
Market development
We estimate that the market grew by 5-8% in the first nine
months of 2021 compared to the same period last year. The
growth was highest in Q2 2021 due to the timing impact of
COVID-19 lockdowns in 2020.
For international transports, we assess that transport activity
levels are back at 2019 levels and domestic distribution activity
is above 2019.
The high activity levels have led to tight capacity and increasing
road freight rates across most regions, especially in the UK.
During 2021, we estimate that the Road division has been able
to take market share across most markets and benefit from the
strong network and market position.
Divisional revenue
The division’s revenue amounted to DKK 25,502 million for the
first nine months of 2021, compared to DKK 22,429 million for
the same period last year.
For Q3 2021, revenue amounted to DKK 8,783 million,
compared to DKK 7,521 million for the same period last year.
The growth in revenue during 2021 was driven by higher activity
levels. However, haulier rates and oil prices have also gradually
increased, especially in Q3 2021.
Gross profit
For the first nine months of 2021, gross profit totalled DKK 5,170
million, compared to DKK 4,551 million for the same period last
year.
Page 11 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
For Q3 2021, gross profit amounted to DKK 1,745 million,
compared to DKK 1,585 million in Q3 2020, which is an increase
of 5.9%.
The division’s gross margin was 20.3% for the first nine months
of 2021, same level as 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, Brexit and other events.
EBIT before special items
EBIT before special items was DKK 1,344 million for the first
nine months of 2021, compared to DKK 970 million for the same
period last year. This corresponds to an increase for the period
of 36.7% excluding the impact of GIL. The increase in EBIT
before special items for the first nine months of 2021 was driven
by the increase in gross profit and an improved conversion ratio.
For Q3 2021, EBIT before special items totalled DKK 465
million, compared to DKK 448 million for the same period last
year. It should be noted that EBIT for Q3 2020 was positively
impacted by temporary cost savings due to COVID-19.
All regions contributed to the increase in earnings, and similar to
revenue the increase in earnings for the first nine months of
2021 was highest in regions that were heavily impacted by
COVID-19 lockdowns and restrictions last year.
The conversion ratio was 26.0% for the first nine months of
2021, compared to 21.3% 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 20% compared
to September 2020. The increase was mainly due to the GIL
and Globeflight acquisitions as well as added staff due to Brexit.
Net working capital
The Road division’s net working capital was negative by DKK
284 million on 30 September 2021, compared to a negative DKK
909 million on 30 September 2020. The development was
impacted by higher activity and the inclusion of GIL in Q3 2021.
We also refer to the comments about NWC on page 6.
FINANCIAL DEVELOPMENT 2020 – 2021
Change
(DKKm)
Q3 2020
Currency
translation
Agility GIL
Growth
Growth %*
Q3 2021
Divisional revenue
7,521
63
283
916
12.1%
8,783
Gross profit
1,585
15
50
95
5.9%
1,745
EBIT before special items
448
4
18
(5)
(1.1%)
465
Change
(DKKm)
YTD 2020
Currency
translation
Agility GIL
Growth
Growth %*
YTD 2021
Divisional revenue
22,429
(7)
283
2,797
12.5%
25,502
Gross profit
4,551
5
50
564
12.4%
5,170
EBIT before special items
970
-
18
356
36.7%
1,344
* In constant currencies excluding GIL impact
Page 12 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
DSV 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. Agility GIL adds around 1.4 million m2 logistics facilities and a
strong footprint in the Middle East.
For the first nine months of 2021, the Solutions division achieved a 11.1% increase in gross profit, which
was converted into a 38.1% increase in EBIT before special items.
INCOME STATEMENT
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Divisional revenue
4,739
3,388
12,345
10,085
Direct costs
3,022
2,075
7,903
6,245
Gross profit
1,717
1,313
4,442
3,840
Other external expenses
348
255
926
788
Staff costs
418
344
1,172
1,094
EBITDA before special items
951
714
2,344
1,958
Amortisation and depreciation
465
402
1,317
1,253
EBIT before special items
486
312
1,027
705
KEY FIGURES AND RATIOS
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Gross margin (%)
36.2
38.8
36.0
38.1
Operating margin (%)
10.3
9.2
8.3
7.0
Conversion ratio (%)
28.3
23.8
23.1
18.4
Number of full-time employees
32,007
21,039
Total invested capital (DKKm)
19,247
11,290
Net working capital (DKKm)
1,437
869
ROIC before tax (%)
9.7
9.2
Market development
It is our estimate that the contract logistics market has grown
approximately 7-10% in the first nine months of 2021 compared
to the same period last year. The growth was highest in Q2
2021, due to the timing of COVID-19 lockdowns in 2020.
In general, there is good momentum in the market in 2021 with
growth across most industries, and we estimate that DSV
Solutions has taken market share in most markets.
Divisional revenue
The division’s revenue was DKK 12,345 million for the first nine
months of 2021, compared to DKK 10,085 million for the same
period of 2020. Growth for the period was 17.6% excluding the
impact of GIL.
For Q3 2021, revenue amounted to DKK 4,739 million,
compared to DKK 3,388 million for the same period last year, a
growth of 20.3% excluding the impact of GIL.
The revenue contribution from GIL (1.5 months) came to DKK
607 million in Q3 2021.
Regionally, EMEA was the main driver of the growth in the first
nine months of 2021, due to implementation of new customers
and the general recovery after COVID-19. The division operates
with high utilisation of the warehouses, and global demand for
new and efficient warehouses remains high.
Gross profit
For the first nine months of 2021, gross profit was DKK 4,442
million, compared to DKK 3,840 million for the same period of
2020. Increase for the period was 11.1% excluding the impact of
GIL.
Page 13 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
For Q3 2021, gross profit amounted to DKK 1,717 million,
compared to DKK 1,313 million for the same period last year.
Driven by a strong gross margin in Q3 2021 growth for the
quarter came to 13.5%.
The gross profit contribution from GIL (1.5 months) came to
DKK 203 million in Q3 2021.
The division’s gross margin was 36.0% for the first nine months
of 2021, compared to 38.1% for the same period last year. The
decrease in gross margin was 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 COVID-19 cost savings.
EBIT before special items
EBIT before special items was DKK 1,027 million for the first
nine months of 2021, compared to DKK 705 million for the same
period of 2020, corresponding to an increase of 38.1%.
For Q3 2021, EBIT before special items totalled DKK 486
million, compared to DKK 312 million for the same period last
year, which corresponds to an increase of 39.5%.
The EBIT before special items from GIL (1.5 months) came to
DKK 41 million in Q3 2021.
The increase in EBIT before special items was driven by higher
gross profit and continued focus on cost optimisation and driving
up productivity.
The conversion ratio was 23.1% for the first nine months of
2021, compared to 18.4% 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 52% compared
to September 2020. The increase was mainly driven by the
acquisitions of GIL and Prime Cargo and, secondly, a general
increase in activity levels.
Net working capital
The division’s net working capital came to DKK 1,437 million on
30 September 2021, compared to DKK 869 million on 30
September 2020. The development was mainly due to higher
activity and the inclusion of GIL in Q3 2021. We also refer to the
comments about NWC on page 6.
FINANCIAL DEVELOPMENT 2020 – 2021
Change
(DKKm)
Q3 2020
Currency
translation
Agility GIL
Growth
Growth %*
Q3 2021
Divisional revenue
3,388
47
607
697
20.3%
4,739
Gross profit
1,313
21
203
180
13.5%
1,717
EBIT before special items
312
7
41
126
39.5%
486
Change
(DKKm)
YTD 2020
Currency
translation
Agility GIL
Growth
Growth %*
YTD 2021
Divisional revenue
10,085
(102)
607
1,755
17.6%
12,345
Gross profit
3,840
(26)
203
425
11.1%
4,442
EBIT before special items
705
9
41
252
38.1%
1,027
* In constant currencies excluding GIL impact
Page 14 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Interim financial statements
Income statement
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Revenue
Direct costs
Gross profit
Other external expenses
Staff costs
Operating profit before amortisation and depreciation (EBITDA) before special
items
Amortisation and depreciation
Operating profit (EBIT) before special items
Special items, costs
Financial income
Financial expenses
Profit before tax
Tax on profit for the period
Profit for the period
Profit for the period attributable to:
Shareholders of DSV A/S
Non-controlling interests
(4 )
Earnings per share:
Earnings per share of DKK 1 for the period
Diluted earnings per share of DKK 1 for the period
Page 15 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Statement of comprehensive income
(DKKm)
Q3 2021
Q3 2020
YTD 2021
YTD 2020
Profit for the period
Items that will be reclassified to income statement when certain
conditions are met:
Net exchange differences recognised in OCI
(991 )
(2,340 )
Fair value adjustments relating to hedging instruments
(1 )
(14 )
Fair value adjustments relating to hedging instruments transferred to
financial expenses
Tax on items reclassified to income statement
(4 )
(1 )
(3 )
Items that will not be reclassified to income statement:
Actuarial gains/(losses)
(16 )
(89 )
(181 )
Tax relating to items that will not be reclassified
(41 )
Other comprehensive income, net of tax
(1,030 )
(2,449 )
Total comprehensive income
Total comprehensive income attributable to:
Shareholders of DSV A/S
Non-controlling interests
Total
Page 16 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Cash flow statement
(DKKm)
YTD 2021
YTD 2020
Operating profit before amortisation and depreciation (EBITDA) before
special items
Adjustments:
Share-based payments
Change in provisions
(66 )
Change in working capital, etc.
(5,416 )
(206 )
Special items
(551 )
(1,506 )
Interest received
Interest paid on lease liabilities
(352 )
(413 )
Interest paid, other
(397 )
(314 )
Income tax paid
(1,404 )
(653 )
Cash flow from operating activities
Purchase of intangible assets
(219 )
(166 )
Purchase of property, plant and equipment
(745 )
(828 )
Disposal of intangible assets, property, plant and equipment
Acquisition of subsidiaries and activities (Note 6)
Change in other financial assets
(52 )
Cash flow from investing activities
(629 )
Free cash flow
Proceeds from borrowings
Repayment of borrowings
(444 )
(2,593 )
Repayment of lease liabilities
(2,261 )
(2,342 )
Other financial liabilities incurred
Transactions with shareholders:
Dividends distributed
(920 )
(588 )
Purchase of treasury shares
(12,715 )
(3,030 )
Sale of treasury shares
Other transactions with shareholders
(16 )
(6 )
Cash flow from financing activities
(3,320 )
(5,394 )
Cash flow for the period
Cash and cash equivalents 1 January
Cash flow for the period
Currency translation
(250 )
Cash and cash equivalents end of period
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
7,059
6,510
Acquisition of subsidiaries and activities
(1,631)
-
Special items (restructuring costs)
551
1,506
Repayment of lease liabilities
(2,261)
(2,342)
Adjusted free cash flow
3,718
5,674
Page 17 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Balance sheet – Assets
(DKKm)
30.09.2021
31.12.2020
30.09.2020
Intangible assets
Right-of-use (ROU) assets
Property, plant and equipment
Other receivables
Deferred tax assets
Total non-current assets
Trade receivables
Contract assets
Inventories
Other receivables
Cash and cash equivalents
Assets held for sale
Total current assets
Total assets
Balance sheet – Equity and liabilities
(DKKm)
30.09.2021
31.12.2020
30.09.2020
Share capital
Reserves and retained earnings
DSV A/S shareholders’ share of equity
Non-controlling interests
(88 )
(96 )
Total equity
Lease liabilities
Borrowings
Pension obligations
Provisions
Deferred tax liabilities
Total non-current liabilities
Lease liabilities
Borrowings
Trade payables
Accrued cost of services
Provisions
Other payables
Tax payables
Total current liabilities
Total liabilities
Total equity and liabilities
Page 18 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
Statement of changes in equity at 30 September 2021
Attributable to shareholders of DSV A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity at 1 January 2021
(2,836 )
(88 )
Profit for the period
Other comprehensive income, net of tax
(6 )
Total comprehensive income for the period
Transactions with shareholders:
Share-based payments
Tax on share-based payments
Dividends distributed
(920 )
(920 )
(1 )
(921 )
Purchase of treasury shares
(10 )
(12,705 )
(12,715 )
(12,715 )
Sale of treasury shares
Capital increase
Capital reduction
(6 )
Transfer of treasury shares as business
combination consideration
Addition/disposal of non-controlling interests
Dividends on treasury shares
Other adjustments
(45 )
(33 )
Total transactions with shareholders
Equity at 30 September 2021
(1,651 )
Statement of changes in equity at 30 September 2020
Attributable to shareholders of DSV A/S
(DKKm)
Share
capital
Reserves
Retained
earnings
Total
Non-
controlling
interests
Total equity
Equity at 1 January 2020
(265 )
(111 )
Profit for the period
Other comprehensive income, net of tax
(2,320 )
(133 )
(2,453 )
(2,449 )
Total comprehensive income for the period
(2,320 )
Transactions with shareholders:
Share-based payments
Tax on share-based payments
Dividends distributed
(588 )
(588 )
(2 )
(590 )
Purchase of treasury shares
(5 )
(3,025 )
(3,030 )
(3,030 )
Sale of treasury shares
Capital reduction
(5 )
Addition/disposal of non-controlling interests
Dividends on treasury shares
Other adjustments
(43 )
(43 )
(35 )
Total transactions with shareholders
(5 )
(1,906 )
(1,909 )
(1,902 )
Equity at 30 September 2020
(2,583 )
(96 )
Page 19 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 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 Annual Report. The 2020 DSV Annual
Report provides a full description of the Group’s accounting
policies.
Changes in accounting policies
The DSV 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 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 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 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 Q3 2021 Interim
Financial Report.
None of these are currently expected to carry any significant
impact on the financial statements of the DSV Group when
implemented.
4 Segment information
Air & Sea
Road
Solutions
Non-allocated items
and eliminations
Total
(DKKm)
YTD 2021
YTD 2020
YTD 2021
YTD 2020
YTD 2021
YTD 2020
YTD 2021
YTD 2020
YTD 2021
YTD 2020
Condensed income statement
Revenue
85,031
53,212
23,860
20,976
11,935
9,820
178
208
121,004
84,216
Intercompany revenue
702
516
1,642
1,453
410
265
(2,754)
(2,234)
-
-
Divisional revenue
85,733
53,728
25,502
22,429
12,345
10,085
(2,576)
(2,026)
121,004
84,216
Direct costs
69,489
40,887
20,332
17,878
7,903
6,245
(2,661)
(2,116)
95,063
62,894
Gross profit
16,244
12,841
5,170
4,551
4,442
3,840
85
90
25,941
21,322
Other external expenses
2,230
2,225
812
780
926
788
(1,271)
(1,300)
2,697
2,493
Staff costs
4,578
4,603
2,282
2,093
1,172
1,094
1,135
1,056
9,167
8,846
Operating profit before amortisation,
depreciation (EBITDA) before special items
9,436
6,013
2,076
1,678
2,344
1,958
221
334
14,077
9,983
Amortisation and depreciation
679
777
732
708
1,317
1,253
239
341
2,967
3,079
Operating profit (EBIT) before special items
8,757
5,236
1,344
970
1,027
705
(18)
(7)
11,110
6,904
Condensed balance sheet
Total assets
78,307
52,810
21,913
21,311
23,385
14,364
32,760
6,459
156,365
94,944
Total liabilities
70,793
50,372
17,120
15,071
17,879
12,299
(23,820)
(30,824)
81,972
46,918
Page 20 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
5 Revenue
Sale of services and geographical segmentation specify as follows:
EMEA
Americas
APAC
Total
(DKKm)
Q3 2021
Q3 2020
Q3 2021
Q3 2020
Q3 2021
Q3 2020
Q3 2021
Q3 2020
Air services
6,492
4,258
5,341
2,518
6,566
3,520
18,399
10,296
Sea services
9,876
3,652
5,583
2,533
3,003
1,429
18,462
7,614
Road services
8,017
6,950
766
571
-
-
8,783
7,521
Solutions services
3,435
2,347
815
697
489
344
4,739
3,388
Total
27,820
17,207
12,505
6,319
10,058
5,293
50,383
28,819
Non-allocated items and eliminations
(826)
(694)
Total revenue
49,557
28,125
EMEA
Americas
APAC
Total
(DKKm)
YTD 2021
YTD 2020
YTD 2021
YTD 2020
YTD 2021
YTD 2020
YTD 2021
YTD 2020
Air services
16,600
12,526
13,112
8,260
15,859
11,097
45,571
31,883
Sea services
21,421
11,009
11,919
6,575
6,822
4,261
40,162
21,845
Road services
23,464
20,696
2,038
1,733
-
-
25,502
22,429
Solutions services
8,947
6,960
2,226
2,113
1,172
1,012
12,345
10,085
Total
70,432
51,191
29,295
18,681
23,853
16,370
123,580
86,242
Non-allocated items and eliminations
(2,576)
(2,026)
Total revenue
121,004
84,216
6 Business combinations
On 16 August 2021, DSV acquired the Global Integrated
Logistics division of Agility Public Warehousing Company
K.S.C.P.
About Agility Global Integrated Logistics
Agility’s stand-alone Global Integrated Logistics (GIL) business
is a leading global transport and logistics provider with a strong
footprint in emerging markets. The business offers a mix of
integrated logistics services, including air, ocean and road
freight forwarding services, contract logistics and specialised
logistics capabilities. GIL operates a flexible, customer-centric
and sustainability-driven business with a global workforce of
approximately 17,000 people and service provision across 100+
countries around the world (incl. agents). GIL empowers
businesses of all sizes, from small businesses to large
multinationals, through sector-specific expertise and digital tools
and technology to enhance supply chain efficiency.
Strategic rationale and synergies
Acquisitions are an integral part of DSV's strategy, and DSV has
a track record of successful integrations. The combination with
GIL is expected to increase DSV's annual revenue by
approximately 23%, which will rank the combined company in
the freight forwarding industry top three with a combined
workforce of more than 75,000 employees. The combined
company will have own operations in more than 90 countries.
Scale remains one of the key competitive advantages in freight
forwarding with significant operational and commercial benefits.
The Air & Sea division will be strengthened and will further
cement its position as one of the largest providers. GIL’s
presence in the fast-growing emerging markets in APAC as well
as Europe and Americas will be a strong addition to DSV’s
existing network.
Contract logistics capabilities are increasingly important due to
complex supply chains and changing distribution channels. GIL
will bring additional warehousing capacity of more than 1.4
million square metres, mainly in APAC and the Middle East, and
will thereby significantly strengthen the Solutions division.
Finally, GIL will add road freight activities to DSV’s network in
Europe and the Middle East.
DSV and GIL are a strong match with many potential synergies
as a result of similarities in business models, services and
strategies:
• Commercial synergies and cross-selling opportunities from
stronger network and service offerings, new competencies
and skills
• Consolidation of operations, administration and logistics
facilities
• Consolidation of IT infrastructure
• Strong focus on corporate responsibility and sustainability
The transaction is expected to be EPS accretive (diluted and
adjusted) in year 2 after completion, and it is DSV’s aspiration to
lift the operating margin of the combined entity to DSV's existing
levels within the respective business areas.
Consideration transferred
The consideration transferred for Global Integrated Logistics has
been made in DSV equity instruments by offering in total
19,304,348 DSV shares at a fair value of DKK 29,493 million
based on the acquisition date closing price of DKK 1,531 on
Nasdaq Copenhagen offset by a cash consideration transferred
from Agility to DSV of approximately DKK 61 million.
Adjusted for the fair value of cash and cash equivalents
acquired of DKK 1,759 million, the total net consideration
amounts to DKK 27,734 million.
Transaction costs
Total transaction costs recognised until 30 September 2021
amount to DKK 86 million (recognised as special items).
Fair value of acquired net assets and recognised goodwill
Fair value of acquired net assets have been identified and
goodwill recognised. Net assets, goodwill and contingent assets
and liabilities recognised at the reporting date are to some
Page 21 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 2021
extent still provisional. Adjustments may be applied to these
amounts for a period of up to twelve months from the acquisition
date in accordance with IFRS 3.
The major categories of net assets for which acquisitional
accounting is still ongoing mainly relate to other provisions and
deferred tax assets. In addition, other minor adjustments may be
applied to the various net asset categories as full alignment to
DSV accounting policies is finalised. The provisional fair value of
identified net assets and goodwill recognised may be specified
as follows:
Assets identified at fair value:
(DKKm)
Customer relationships
569
Other intangible assets
13
Right-of-use assets
2,389
Property, plant and equipment
2,679
Trade receivables
5,450
Contract assets
1,453
Inventories
34
Deferred tax assets
505
Other receivables
2,383
Cash and cash equivalents
1,759
Total Assets
17,234
Liabilities identified at fair value:
Lease liabilities
2,321
Borrowings
660
Provisions
3,088
Pensions and similar obligations
280
Trade payables
2,496
Accrued cost of services
1,882
Deferred tax liabilities
237
Corporation tax
565
Other payables
1,047
Total liabilities
12,576
Non-controlling interests share of acquired net
assets
291
Total net assets acquired
4,367
Fair value of total consideration transferred
29,493
Goodwill arising from acquisitions
25,126
The fair value of acquired trade receivables, contract assets and
other receivables, amounts to DKK 9,286 million. Collectability
of receivables has been assessed based on credit assessment
policies; in this regard, expected credit-losses of DKK 345
million have been provided for.
Goodwill recognised mainly relates to the expertise and
knowhow of the acquired workforce and expected synergies
from the integration into the DSV Group. Recognised goodwill is
non-deductible for tax purposes.
Earnings impact
As a consequence of the integration of Global Integrated
Logistics into DSV, the disclosed earnings impact is based on
estimates as no financial reporting capabilities are maintained
that provide detailed consolidated financial data on the separate
pre-acquisition consolidation groups.
The acquisition is estimated to have contributed revenues of
around DKK 4,395 million and operating profit before special
items of DKK 270 million to the DSV Group results for the period
16 August 2021 to 30 September 2021.
If the acquisition had occurred on 1 January 2021, consolidated
pro-forma revenue and operating profit before special items for
the period ended 30 September 2021 of the combined Group
would have been approximately DKK 140,000 million and DKK
11,850 million, respectively.
Fair value measurement
Material net assets acquired for which significant estimates have
been applied in the fair value assessment have been recognised
using the following valuation techniques:
Property, plant and equipment
Fair value of individual material property, plant and equipment
assets has been measured based on external market valuations
carried out by professional appraisers and assessments of
prices on an active market.
Customer relationships
Customer relationships have been measured using a multi-
period excess earnings model (MPEE), by which the present
value of future cash flows from recurring contract customers
expected to be retained after the date of acquisition has been
valuated using a peer-group WACC of 7% as discount rate. In
total, customer relationships amounting to DKK 569 million have
been included in the opening balance.
The main input value drivers in the MPEE model used are the
estimated future retention rate and net cash flow of the acquired
contract customer base. These inputs have been estimated
based on Management’s professional judgement from analysis
of the acquired customer base, historical data and general
business insight.
Trade receivables and payables, contract assets and accrued
cost of services
Fair value of trade receivables and trade payables, contract
assets and accrued cost of services has been measured at the
contractual amount expected to be received or paid. In addition,
collectability has been taken into consideration on trade
receivables. The amounts have not been discounted, as
maturity on trade receivables- and payables generally is very
short and the discounted effect therefore immaterial.
Financial liabilities
Lease liabilities have been measured at the present value of the
remaining lease payments at the acquisition date discounted
using an appropriate incremental borrowing rate.
Other financial liabilities have been measured at the present
value of the repayable amounts discounted using a
representative DSV borrowing rate, unless the discount effect is
insignificant. A DSV borrowing rate has been applied as DSV
vouches for the acquired debt, hence the credit enhancement of
the Group has been applied in the valuation.
Page 22 of 22 INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 924 – 26 October 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 A/S for the
nine-month period ended 30 September 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 September 2021 and of the results of the Group’s activities and the cash flow for the nine-month period ended 30
September 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.
Executive Board:
Board of Directors: