DSV: Strong Q1 results across all divisions – full-year outlook raised
DSV reports a strong Q1 result with growth and high productivity across all three divisions. Supported by the integration of GIL, gross profit grew 61% in Q1 2022 while EBIT before special items more than doubled compared to the same period last year.
- DSV reports a strong Q1 result with growth and high productivity across all three divisions. Supported by the integration of GIL, gross profit grew 61% in Q1 2022 while EBIT before special items more than doubled compared to the same period last year.
- The challenging and volatile market conditions in the global supply chains continue in 2022 and are especially impacted by the conflict in Ukraine and new COVID-19 lockdowns in China. DSV is focused on finding the best solutions for customers across all transport modes.
- The performance in the Solutions division was outstanding in Q1. The division's EBIT growth of close to 200% driven by strong gross profit growth and continued cost discipline confirms the long-term strategy of consolidation into large, multi-client campuses and continued investments in warehouse automation. Additionally, the GIL integration contributed strongly to the division's result.
- The Air & Sea division reported an EBIT growth of 109%, while the Road division steered through the disruptive market conditions with 24% EBIT growth compared to the same period last year.
- The previously disclosed guidance for 2022 is upgraded. EBIT before special items is expected to be in the range of DKK 21,000-23,000 million (previously DKK 18,000-20,000 million)
Q1 2022 results
The Group achieved a gross profit of DKK 12,877 million for the first three months of 2022, compared to DKK 7,785 million for the same period last year. The strong increase was driven by the addition of GIL business and growth in all divisions - especially the Air & Sea and Solutions divisions.
EBIT before special items for the first three months of 2022 came to DKK 6,496 million, compared to DKK 3,067 million for the same period last year.
For the rolling 12-month period ended 31 March 2022, the Group achieved an 80% increase in diluted adjusted earnings per share.
Jens Bjørn Andersen, Group CEO:
"For Q1 2022, we report a strong set of results, with earnings growth across all divisions and a strong cash flow. We are tracking the plans for the GIL integration and are on track for completion in Q3 2022. The markets continue to be impacted by tight capacity and congestion, and in March we saw the return of COVID-19 lockdowns in China - a reminder to us all that the pandemic is still not over.
The difficult situation in Ukraine is on everyone's mind. DSV shipments to and from Russia and Belarus have stopped, except certain humanitarian shipments, and we are in the process of divesting and exiting our activities in Russia. The direct financial impact is not material as the combined revenue in Ukraine, Russia and Belarus represents less than 1% of the Group's revenue. Still, the situation has impacted the markets negatively in several ways, especially for air and road transports, and we continue to do our best to find capacity and alternative solutions for our customers."
Outlook for 2022
Uncertainty related to the global economy has increased in recent months; however, DSV expects that the continued disruptions of global supply chains will support a high demand for DSV-services. Based on the strong performance in Q1 2022 and expectations for the remainder of the year, DSV upgrades the full-year outlook for 2022 as follows:
- EBIT before special items is expected to be in the range of DKK 21,000-23,000 million (previously DKK 18,000-20,000 million).
Ukraine and Russia
As part of the global network, DSV has subsidiaries in Ukraine, Russia and Belarus. The combined revenue in the three countries represents less than 1% of the Group's revenue and therefore no material direct impact on the financial results or financial position of Group is expected.
Activities in Ukraine were temporarily suspended when the crisis started. A small part of the operation is up and running again to support humanitarian shipments and other activities.
The situation has led to a stop of DSV shipments to and from Russia, with the exception of medical and humanitarian supplies. DSV is in the process of divesting its activities in Russia.
The situation in Ukraine and the sanctions imposed in response by the EU, US, UK and others against Russia have impacted the transport markets in several areas. The closure of Russian airspace has reduced available air freight capacity between Asia and Europe due to longer flight time and sanctions against Russian airlines. In Europe, the decision by many Ukrainian truck drivers to return to their home country has contributed to further capacity tightness for road freight. In both cases, DSV has been able to find capacity and alternative solutions for the customers.
Integration of Agility's Global Integrated Logistics business
The acquisition of Agility's Global Integrated Logistics business (GIL) was closed in August 2021. The integration of GIL is progressing according to plan, and final completion is expected in Q3 2022. In line with previous announcements, GIL is expected to contribute with at least DKK 3,000 million to the combined EBIT before special items on an annual basis. Around 85% of the EBIT contribution is expected to impact the income statement in 2022, and DSV expects full-year impact in 2023.
A separate company announcement about the launch of a new share buyback programme of up to DKK 6,000 million will be issued 27 April 2022. The programme will be concluded no later than 25 July 2022.
Full company announcement
Read the full Q1 Company announcement here.
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