INTERIM FINANCIAL REPORT H1 2018

• The effective tax rate is expected to approximate 23% (unchanged). A separate company announcement about the launch of a new three-month share buyba...

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INTERIM FINANCIAL REPORT H1 2018 Company Announcement no. 704 1 August 2018 Selected financial and operating data for the period 1 January - 30 June 2018

(DKKm)

Q2 2018

Q2 2017

YTD 2018

YTD 2017

Net revenue

19,491

18,924

37,871

37,147

Gross profit

4,450

4,217

8,570

8,437

Operating profit (EBIT) before special items

1,449

1,240

2,605

2,369

Operating margin

7.4%

6.6%

6.9%

6.4%

Conversion ratio

32.6%

29.4%

30.4%

28.1%

Profit for the period

1,187

742

1,956

1,411

Adjusted earnings for the period

1,214

828

2,000

1,637

1,671

2,038

10.7

8.7

Adjusted free cash flow Diluted adjusted earnings per share of DKK 1 for the period

6.5

4.4

Jens Bjørn Andersen, CEO: Our financial results for Q2 2018 are at an all-time high and I am pleased to see that all business areas have performed well. So far, the impact from trade tariffs has been limited and going into the second half of 2018 we continue to see a stable development on the global transport markets. DSV has good momentum and a strong foundation for further growth, and we upgrade our expectations for 2018.” The consolidated full-year outlook for 2018 previously announced is upgraded as follows: • • •

Operating profit before special items is expected to be in the range of DKK 5,300-5,600 million (previously DKK 5,100-5,400 million). Adjusted free cash flow is expected to approximate DKK 4,200 million (previously DKK 4,000 million). The effective tax rate is expected to approximate 23% (unchanged).

A separate company announcement about the launch of a new three-month share buyback programme of DKK 1,200 million will be issued today. Contacts Investor Relations Flemming Ole Nielsen, tel. +45 43 20 33 92, [email protected] Frederikke Linde, tel. +45 43 20 31 95, [email protected] Media Tina Hindsbo, tel. +45 43 20 36 63, [email protected] This announcement has been forwarded to Nasdaq Copenhagen and to the press. It is also available at www.dsv.com. 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. Global Transport and Logistics With offices and facilities in more than 80 countries on six continents, we provide and run supply chain solutions for thousands of companies on a daily basis. Our reach is global yet our presence is local and close to our customers. Read more at www.dsv.com

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Financial highlights* Q2 2018

Q2 2017

YTD 2018

YTD 2017

19,491 4,450 1,631 1,449 (120)

18,924 4,217 1,434 1,240 88 182

37,871 8,570 2,969 2,605 35

37,147 8,437 2,745 2,369 248 276

1,187 1,214

742 828

1,956 2,000

1,411 1,637

Balance sheet (DKKm) DSV A/S shareholders' share of equity Non-controlling interests Balance sheet total Net working capital Net interest-bearing debt Invested capital Gross investment in property, plant and equipment

15,210 (31) 39,395 2,023 5,454 20,678 332

14,546 (42) 39,984 2,097 6,523 21,483 330

Cash flows (DKKm) Operating activities Investing activities Free cash flow Adjusted free cash flow Financing activities Share buyback Dividends distributed Cash flow for the period

1,699 (28) 1,671 1,671 (1,748) (1,449) (380) (77)

1,804 (2) 1,802 2,038 (1,770) (345) 32

Income statement (DKKm) Net revenue Gross profit Operating profit before amortisation, depreciation and special items Operating profit (EBIT) before special items Special items, costs Net financial expenses Profit for the period Adjusted earnings for the period

Financial ratios (%) Gross margin Operating margin Conversion ratio Effective tax rate ROIC before tax Return on equity (ROE) Solvency ratio Gearing ratio Share ratios Earnings per share of DKK 1 Earnings per share of DKK 1 for the last 12 months Diluted adjusted earnings per share of DKK 1 Diluted adjusted earnings per share of DKK 1 for the last 12 months Number of shares issued ('000) Number of treasury shares ('000) Average number of shares issued ('000) for the period Average number of shares issued ('000) for the last 12 months Average diluted number of shares ('000) for the period Average diluted number of shares ('000) for the last 12 months Share price on 30 June (DKK)

22.8 7.4 32.6 24.3

22.3 6.6 29.4 23.5

22.6 6.9 30.4 23.9 24.3 23.8 38.6 0.9

22.7 6.4 28.1 23.5 20.0 19.0 36.4 1.3

6.5

4.0

6.5

4.4

183,878

186,809

186,831

189,257

10.7 19.2 10.7 20.5 188,000 5,192 183,628 184,718 186,517 187,443 515.6

7.6 13.5 8.7 16.0 190,000 2,885 186,270 185,843 188,526 187,810 400.0

47,144

44,851

Staff Number of full-time employees on 30 June *) For a definition of the financial highlights, please refer to page 81 of the 2017 Annual Report.

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INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Management’s commentary The Group achieved a gross profit of DKK 8,570 million for the first six months of 2018 against DKK 8,437 million for the same period last year. In constant currencies, the growth in gross profit was 6%. Operating profit before special items was DKK 2,605 million for the period against DKK 2,369 million for the same period of 2017. The growth in earnings was mainly driven by the Air & Sea and Solutions divisions. In constant currencies, growth in EBIT before special items came to 15% for the first six months of 2018.



As a result of improved productivity, the conversion ratio was 30.4% for H1 2018 against 28.1% for the same period last year

Profit for the period Net revenue For the first six months of 2018, DSV recorded net revenue of DKK 37,871 million (2017: DKK 37,147 million). Adjusted for exchange rate fluctuations (constant currencies), growth for the period was 6.0%. The growth in net revenue was primarily driven by higher activity levels in all divisions. DSV gained market shares in the first six months of 2018, most significantly in air freight.

In constant currencies, the Air & Sea division achieved a growth in net revenue of 6.7%, Road 3.9% and Solutions 9.8% in the first six months of 2018. For Q2 2018, revenue amounted to DKK 19,491 million against DKK 18,924 million for the same period last year. Adjusted for exchange rate fluctuations (constant currencies), growth for the period was 6.4%.

The global freight and logistics markets continue to exhibit positive trends in most areas with growth rates close to the underlying GDP growth. We are closely monitoring the ongoing development around trade tariffs. So far, the impact on DSV’s transport volumes has been limited. NET REVENUE YTD 2018 (DKKm)

5,959 15% 17,509 45% 15,538 40%

In constant currencies, the Air & Sea division achieved a growth in net revenue of 7.2%, Road 4.6% and Solutions 9.3% in the second quarter of 2018.

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INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Air & Sea Road Solutions

Gross profit Gross profit was DKK 8,570 million for the first six months of the year against DKK 8,437 million for the same period of 2017. In constant currencies, the growth in gross profit was 5.9%. The growth in gross profit was primarily driven by higher activity levels in all divisions. In H1 2018, the Air & Sea and Solutions divisions achieved growth of 10.7% and 9.2%, respectively, whereas the Road division saw a decline of 2.3% (all in constant currencies). For Q2 2018, gross profit amounted to DKK 4,450 million against DKK 4,217 million for the same period last year. In constant currencies, the growth in gross profit was 9.0%. For the quarter, Air & Sea achieved a growth of 12.6%, Road 2.1% and Solutions 9.8%.

For Q2 2018, operating profit before special items amounted to DKK 1,449 million against DKK 1,240 million for the same period last year. In constant currencies, growth for the period was 20.8%. The growth in earnings in Q2 2018 is attributable to a strong performance in all divisions. Air & Sea achieved a growth of 22.9%, Road 15.4% and Solutions 36.7%. As a result of improved productivity, the conversion ratio was 30.4% for the six-month period against 28.1% for the corresponding period of 2017. The operating margin (before special items) was 6.9% for the six-month period against 6.4% for the same period last year.

EBIT BEFORE SPECIAL ITEMS YTD 2018 (DKKm) GROSS PROFIT YTD 2018 (DKKm) 302 12% 1,440 17%

4,532 53%

2,624 30%

Air & Sea

563 21%

Air & Sea Road

Road Solutions

1,783 67%

Solutions

Financial items The consolidated gross margin was 22.6% for the first six months of 2018 against 22.7% for the same period of 2017.

Operating profit before special items

Financial items totalled a net expense of DKK 35 million for H1 2018, including a net exchange rate gain of DKK 98 million. For H1 2017, financial items totalled a net expense of DKK 276 million, including a net exchange loss of DKK 128 million.

Operating profit before special items was DKK 2,605 million for H1 2018 against DKK 2,369 million for the same period of 2017. In constant currencies, growth for the period was 15.1%.

The exchange rate fluctuations were mainly related to intraGroup loans, which are not hedged.

GROWTH

(DKKm) Net revenue Gross profit EBIT before special items

Q2 2017 18,924 4,217 1,240

Currency translation adjustments (604) (136) (40)

Net revenue Gross profit EBIT before special items

YTD 2017 37,147 8,437 2,369

(1,427) (343) (105)

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Growth 1,171 369 249

Growth in constant currencies 6.4% 9.0% 20.8%

Q2 2018 19,491 4,450 1,449

2,151 476 341

6.0% 5.9% 15.1%

YTD 2018 37,871 8,570 2,605

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Tax on profit for the period The effective tax rate of 23.9% for H1 2018 was at the expected level.

Relative to full-year revenue, the net working capital amounted to 2.7% on 30 June 2018 (30 June 2017: 2.9%). The target for NWC is 2% of net revenue by year-end, but due to seasonality NWC is higher during the year.

Profit for the period Profit for the period was DKK 1,956 million for the first six months of the year against DKK 1,411 million for the same period of 2017. The growth was driven by higher operating profit, no integration costs and lower net financial expenses in 2018.

Capital structure and finances

Diluted adjusted earnings per share

Equity was mainly affected by the profit for the period, distribution of dividends and share buybacks.

DSV A/S shareholders’ share of equity The equity interest of DSV shareholders was DKK 15,210 million on 30 June 2018 (DKK 14,835 million on 31 December 2017).

Diluted adjusted earnings per share was DKK 10.7 for the first six months of 2018, up 23.0% compared to the same period last year. The 12-month figure to the end of June 2018 was DKK 20.5 per share against DKK 16.0 for the same period last year, corresponding to an increase of 28.1%.

The solvency ratio excluding non-controlling interests was 38.6% on 30 June 2018 (30 June 2017: 36.4%).

Cash flow statement CASH FLOW STATEMENT (DKKm)

On 30 June 2018, the Company's portfolio of treasury shares amounted to 5,191,877 shares, corresponding to 2.76% of the total number of shares issued. On 1 August 2018, DSV’s portfolio of treasury shares amounts to 5,854,877 shares.

YTD 2018

YTD 2017

Cash flow from operating activities

1,699

1,804

Cash flow from investing activities

(28)

(2)

1,671

1,802

(1,748)

(1,770)

Cash flow for the period

(77)

32

Adjusted free cash flow

1,671

2,038

Free cash flow

DSV reduced its share capital on 10 April 2018 through the cancellation of 2.0 million treasury shares. Consequently, the share capital of DSV has a current nominal value of DKK 188 million, corresponding to 188 million shares with a face value of DKK 1. DEVELOPMENT IN EQUITY

Cash flow from financing activities

(DKKm) Equity on 1 January

Cash flow from operating activities Cash flow from operating activities was DKK 1,699 million for the first six months of 2018 against DKK 1,804 million for the same period of 2017. Operating profit before amortisation, depreciation and special items for the period was higher than last year, but fluctuations in net working capital led to a net decrease in cash flow from operating activities.

Cash flow from investing activities Cash flow from investing activities amounted to DKK -28 million for the first six months of 2018 against DKK -2 million for the same period of 2017.

Adjusted free cash flow Adjusted free cash flow for the period was DKK 1,671 million against DKK 2,038 million for the same period last year. The variance is primarily due to the development in net working capital.

Profit for the period Currency translation adjustments, foreign enterprises Allocated to shareholders Sale of treasury shares Other equity movements Equity on 30 June

YTD 2018

YTD 2017

14,835

13,416

1,965 (151)

1,408 (265)

(1,829) 312

(342) 253

78

76

15,210

14,546

Net interest-bearing debt Consolidated net interest-bearing debt amounted to DKK 5,454 million on 30 June 2018 against DKK 6,523 million on 30 June 2017. The financial gearing ratio was 0.9 on 30 June 2018 against 1.3 for the same period last year. In line with DSV’s capital allocation principles, a three-month share buyback programme of DKK 1,200 million is initiated on 2 August 2018 to bring the financial gearing ratio within our target range (between 1.0 and 1.5x net interest-bearing debt to EBITDA). The duration of the Group's long-term loan and credit facilities was 3.0 years on 30 June 2018 against 2.7 years on 30 June 2017.

Net working capital The Group reported funds tied up in net working capital of DKK 2,023 million on 30 June 2018 against DKK 2,097 million on 30 June 2017.

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Invested capital The Group's invested capital including goodwill and customer relationships amounted to DKK 20,678 million on 30 June 2018 against DKK 21,483 million on 30 June 2017.

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Return on invested capital (ROIC before tax)

Outlook for 2018

Return on invested capital including goodwill and customer relationships was 24.3% for the 12-month period ended 30 June 2018 against 20.0% for the 12-month period ended 30 June 2017.

The consolidated full-year outlook for 2018 previously announced is upgraded as follows: •

• •

Operating profit before special items is expected to be in the range of DKK 5,300-5,600 million (previously DKK 5,100-5,400 million). Adjusted free cash flow is expected to approximate DKK 4,200 million (previously DKK 4,000 million). The effective tax rate is expected to approximate 23% (unchanged).

The upgrade is based on solid financial results in the first half of 2018, driven by both top line growth and a high conversion ratio. We expect that the good momentum will continue in the second half of 2018. Furthermore, the upgrade is impacted by the strengthening of the USD against DKK. The outlook for 2018 is based on the assumption of a stable development in the markets in which the Group operates and that currency exchange rates, especially USD against DKK, will remain at the current level.

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INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

DSV Air & Sea Activities The Air & Sea division offers a global network and specialises in the transportation of cargo by air and sea. The division offers both conventional freight services and tailored project cargo solutions. In H1 2018, the division reported 11% growth in air freight volumes and 4% growth for sea freight. The division reported EBIT before special items of DKK 1,783 million for H1 2018 (2017: DKK 1,533 million). The conversion ratio for the first six months of 2018 was 39.3% (2017: 35.4%).



For Q2 2018, EBIT before special items totalled DKK 988 million against DKK 843 million last year

INCOME STATEMENT (DKKm)

Q2 2018

Q2 2017

YTD 2018

YTD 2017

Divisional net revenue

9,095

8,873

17,509

17,343

Direct costs

6,708

6,656

12,977

13,010

Gross profit

2,387

2,217

4,532

4,333

Other external expenses

485

451

942

942

Staff costs

893

895

1,763

1,799

1,009

871

1,827

1,592

EBITDA before special items Amortisation and depreciation of intangibles, property, plant and equipment EBIT before special items

21

28

44

59

988

843

1,783

1,533

KEY OPERATING DATA Q2 2018

Q2 2017

YTD 2018

YTD 2017

Gross margin (%)

26.2

25.0

25.9

25.0

Conversion ratio (%)

41.4

38.0

39.3

35.4

Operating margin (%)

10.9

9.5

10.2

8.8

Number of full-time employees on 30 June

12,065

12,282

Total invested capital (DKKm)

10,971

11,260

1,554

1,207

31.3

24.1

Net working capital (DKKm) ROIC before tax (%)

Page 7 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Market development

Gross profit per shipment showed a satisfactory development in H1 2018 and improved both for air and sea, when adjusted for the currency headwind.

Freight volume growth on 2017 DSV

Market

DSV

Market

Q2 2018

Q2 2018

YTD 2018

YTD 2018

Sea freight – TEUs

3%

3%

4%

3%

Air freight – tonnes

12%

4%

11%

5%

Market growth rates are based on own estimates.

The division reported an increase in sea freight volumes (TEUs) of 4% for H1 2018. This is estimated to be slightly above the underlying market. DSV’s growth was mainly driven by export from the EMEA region. In H1 2018, the division reported a volume increase (tonnes) of 11% for air freight, mainly driven by strong performance on EMEA and Americas export. It is estimated that the market grew 5% in the same period.

Divisional net revenue

EBIT before special items EBIT before special items was DKK 1,783 million for the first six months of 2018 against DKK 1,533 million for the same period last year. In constant currencies, growth for the period was 23.7%. For Q2 2018, EBIT before special items totalled DKK 988 million against DKK 843 million for the same period last year, corresponding to a growth in constant currencies of 22.9%. Geographically, the growth in earnings was driven by all regions with a strong performance across EMEA, the Americas and APAC. The conversion ratio was 39.3% for H1 2018 against 35.4% for the same period last year. The operating margin was 10.2% against 8.8% for the same period last year.

The division’s net revenue amounted to DKK 17,509 million for the first six months of 2018 against DKK 17,343 million for the same period last year. In constant currencies, growth for the period was 6.7%.

For Q2 2018, the conversion ratio was 41.4% against 38.0% for the same period last year. The operating margin was 10.9% compared to 9.5% for Q2 2017.

For Q2 2018, net revenue amounted to DKK 9,095 million against DKK 8,873 million for the same period last year, corresponding to a growth in constant currencies of 7.2%.

The record high margins were driven by continued improvement in productivity across the organisation. At the same time, the remaining synergies from the UTi integration have now been realised.

The increase was mainly driven by the growth in freight volumes in both air and sea freight.

Gross profit Gross profit was DKK 4,532 million for H1 2018 against DKK 4,333 million for the same period of 2017. In constant currencies, growth for the period was 10.7%. For Q2 2018, gross profit amounted to DKK 2,387 million against DKK 2,217 million for the same period last year, corresponding to a growth in constant currencies of 12.6%.

Several strategic initiatives to further digitise workflows and improve customer services are in progress. These initiatives include roll-out of a mobile IOD (information of delivery) app, implementation of software robotics and use of predictive analytics. Furthermore, the division continues to develop customer services, e.g. within purchase order management.

Net working capital The Air & Sea division's funds tied up in net working capital came to DKK 1,554 million on 30 June 2018 against DKK 1,207 million on 30 June 2017.

The division’s gross margin was 25.9% for H1 2018 against 25.0% for the same period last year.

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INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

GROWTH

(DKKm) Divisional net revenue Gross profit EBIT before special items

Q2 2017 8,873 2,217 843

Currency translation adjustments (386) (98) (39)

Divisional net revenue Gross profit EBIT before special items

YTD 2017 17,343 4,333 1,533

(930) (239) (92)

Growth 608 268 184

Growth in constant currencies 7.2% 12.6% 22.9%

Q2 2018 9,095 2,387 988

1,096 438 342

6.7% 10.7% 23.7%

YTD 2018 17,509 4,532 1,783

AIR AND SEA SPLIT

(DKKm)

Q2 2018

Divisional net revenue Direct costs Gross profit Gross margin (%) Volume (TEUs/tonnes) Gross profit per unit (DKK)

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Sea freight Q2 2017 YTD 2018

YTD 2017

Q2 2018

Air freight Q2 2017 YTD 2018

YTD 2017

4,485 3,284 1,201

4,662 3,517 1,145

8,693 6,412 2,281

9,104 6,876 2,228

4,610 3,424 1,186

4,211 3,139 1,072

8,816 6,565 2,251

8,239 6,134 2,105

26.8 369,211 3,253

24.6 358,383 3,195

26.2 715,999 3,186

24.5 691,170 3,224

25.7 173,578 6,833

25.5 155,430 6,897

25.5 336,267 6,694

25.5 302,869 6,950

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

DSV Road Activities DSV Road is among the market leaders in Europe and, furthermore the division has operations in North America and South Africa. The division offers full load, part load and groupage services through a strong network of more than 200 terminals and operates more than 20,000 trucks daily. In H1 2018, DSV Road continued to gain market share and reported 4% growth in shipments. EBIT before special items was DKK 563 million for H1 2018 against DKK 659 million for the same period of 2017. H1 2017 was impacted by a gain on property transactions of DKK 125 million.



For Q2 2018, EBIT before special items totalled DKK 322 million against DKK 281 million last year

INCOME STATEMENT (DKKm)

Q2 2018

Q2 2017

YTD 2018

YTD 2017

Divisional net revenue

7,862

7,684

15,538

15,317

Direct costs

6,544

6,368

12,914

12,568

Gross profit

1,318

1,316

2,624

2,749

Other external expenses

275

309

622

641

Staff costs

687

688

1,373

1,374

EBITDA before special items

356

319

629

734

Amortisation and depreciation of intangibles, property, plant and equipment EBIT before special items

34

38

66

75

322

281

563

659

KEY OPERATING DATA Q2 2018

Q2 2017

YTD 2018

YTD 2017

Gross margin (%)

16.8

17.1

16.9

17.9

Conversion ratio (%)

24.4

21.4

21.5

24.0

Operating margin (%)

4.1

3.7

3.6

4.3

13,160

12,706

Total invested capital (DKKm)

4,287

5,200

Net working capital (DKKm)

(748)

(108)

23.3

25.4

Number of full-time employees on 30 June

ROIC before tax (%)

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INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

The division’s gross margin was 16.9% for H1 2018 compared to an underlying gross margin of 17.1% for H1 2017 when adjusted for property transactions. The gross margin for Q2 2018 was 16.8% compared to 17.1% for Q2 2017.

Market development Freight volume growth on 2017

Shipments

DSV

Market

DSV

Market

Q2 2018

Q2 2018

YTD 2018

YTD 2018

5%

2-3%

4%

2-3%

Market growth rates are based on own estimates.

With shipment growth of 4% in the first six months of 2018 compared to the same period last year, Management estimates that the Road division has gained market share in most markets.

Divisional net revenue The division’s net revenue amounted to DKK 15,538 million for the first six months of 2018 against DKK 15,317 million for the same period last year. In constant currencies, growth for the period was 3.9%.

Following haulier rate increases in the second half of 2017, the division has been able to increase prices toward customers in the beginning of 2018. However, the market remains highly competitive, and this has led to pressure on the gross margin, which going forward is expected to be around 17%.

EBIT before special items EBIT before special items was DKK 563 million for the first six months of 2018 against DKK 659 million for the same period last year. A net gain of approx. DKK 125 million on property transactions impacted Q1 2017 positively. For Q2 2018, EBIT before special items totalled DKK 322 million against DKK 281 million for the same period last year.

For Q2 2018, net revenue amounted to DKK 7,862 million against DKK 7,684 million for the same period last year, corresponding to a growth in constant currencies of 4.6%.

The conversion ratio was 21.5% for H1 2018 against 24.0% for the same period last year. The operating margin was 3.6% against 4.3% for the same period last year.

The increase was mainly attributable to the growth in number of shipments.

For Q2 2018, the conversion ratio was 24.4% against 21.4% for the same period last year. The operating margin was 4.1% compared to 3.7% for Q2 2017. The growth in earnings in Q2 2018 was driven by a lower cost base.

Gross profit For the first six months of 2018, gross profit totalled DKK 2,624 million against DKK 2,749 million for the same period last year. Gross profit in Q1 2017 was impacted by a net gain of approx. DKK 125 million on property transactions resulting in a negative growth from H1 2017 to H1 2018 of 2.3% measured in constant currencies.

The Road division continues to focus on strategic projects. These include an update of the TMS (transport management system), which is currently being tested in a pilot, and roll-out of the online platform myDSV.

Net working capital For Q2 2018, gross profit amounted to DKK 1,318 million against DKK 1,316 million for the same period last year, corresponding to a growth in constant currencies of 2.1%.

The Road division reported funds tied up in net working capital of DKK -748 million on 30 June 2018 against DKK -108 million on 30 June 2017.

GROWTH

(DKKm) Divisional net revenue Gross profit EBIT before special items

Q2 2017 7,684 1,316 281

Currency translation adjustments (167) (25) (2)

Divisional net revenue Gross profit EBIT before special items

YTD 2017 15,317 2,749 659

(368) (63) (14)

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Growth 345 27 43

Growth in constant currencies 4.6% 2.1% 15.4%

Q2 2018 7,862 1,318 322

589 (62) (82)

3.9% (2.3%) (12.7%)

YTD 2018 15,538 2,624 563

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

DSV Solutions Activities DSV Solutions specialises in contract logistics – logistics and warehousing solutions that support customers’ entire supply chains. In addition to traditional warehousing and distribution services, the division’s service portfolio also includes freight management, customs clearance, order management and e-commerce solutions. DSV Solutions reported EBIT before special items of DKK 302 million for the first six months of 2018 against DKK 194 million for the same period of 2017.



For Q2 2018, EBIT before special items totalled DKK 175 million against DKK 128 million last year

INCOME STATEMENT (DKKm)

Q2 2018

Q2 2017

YTD 2018

YTD 2017

Divisional net revenue

3,111

2,913

5,959

5,591

Direct costs

2,370

2,223

4,519

4,230

Gross profit

741

690

1,440

1,361

Other external expenses

226

220

461

456

Staff costs

286

274

564

583

EBITDA before special items

229

196

415

322

Amortisation and depreciation of intangibles, property, plant and equipment EBIT before special items

54

68

113

128

175

128

302

194

KEY OPERATING DATA Q2 2018

Q2 2017

YTD 2018

YTD 2017

Gross margin (%)

23.8

23.7

24.2

24.3

Conversion ratio (%)

23.6

18.6

21.0

14.3

Operating margin (%)

5.6

4.4

5.1

3.5

19,584

17,692

Total invested capital (DKKm)

4,335

3,937

Net working capital (DKKm)

1,165

822

14.6

12.6

Number of full-time employees on 30 June

ROIC before tax (%)

Page 12 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Market development

EBIT before special items

The contract logistics market is estimated to have grown by 34% in H1 2018. After a period with stable growth, the market is relatively balanced and warehouse utilisation is high in most regions.

EBIT before special items was DKK 302 million for the first six months of 2018 against DKK 194 million for the same period of 2017. In constant currencies, growth came to 56.5%.

As seen in previous years, growth was strongest in the ecommerce sector, but we continue to see good momentum in other more conventional industries. Measured by divisional net revenue, the division achieved growth of 9.8% in H1 2018 with retail (incl. e-commerce) and automotive industries as the main growth drivers.

Divisional net revenue The division’s net revenue was DKK 5,959 million for H1 2018 against DKK 5,591 million for the same period of 2017. In constant currencies, growth for the period was 9.8%. For Q2 2018, net revenue amounted to DKK 3,111 million against DKK 2,913 million for the same period last year, corresponding to a growth in constant currencies of 9.3%.

Gross profit Gross profit was DKK 1,440 million for the first six months of 2018 against DKK 1,361 million for the same period of 2017. In constant currencies, growth for the period was 9.2%. For Q2 2018, gross profit amounted to DKK 741 million against DKK 690 million for the same period last year, corresponding to a growth in constant currencies of 9.8%. The division’s gross margin was 24.2% for H1 2018 against 24.3% for the same period last year. The gross margin for Q2 2018 was 23.8% compared to 23.7% for Q2 2017.

For Q2 2018, EBIT before special items totalled DKK 175 million against DKK 128 million for the same period last year. In constant currencies, growth came to 36.7%. Regionally, growth was mainly driven by a strong performance in the EMEA region. The conversion ratio was 21.0% for H1 2018 against 14.3% for the same period last year. The division's operating margin was 5.1% for H1 2018 against 3.5% for the same period last year. For Q2 2018, the conversion ratio was 23.6% against 18.6% for the same period last year. The operating margin was 5.6% compared to 4.4% for Q2 2017. The improvement in margins was driven by higher gross profit and a stable cost base compared to the same period last year. The division has managed to improve productivity and profitability in several locations. The division continues to focus on increasing productivity via automation of warehouses, development of larger and more efficient warehouses and roll-outof the divisions global warehouse management system.

Net working capital The division reported funds tied up in net working capital of DKK 1,165 million on 30 June 2018 against DKK 822 million on 30 June 2017.

GROWTH

(DKKm) Divisional net revenue Gross profit EBIT before special items

Q2 2017 2,913 690 128

Currency translation adjustments (67) (15) -

Divisional net revenue Gross profit EBIT before special items

YTD 2017 5,591 1,361 194

(164) (42) (1)

Page 13 of 20

Growth 265 66 47

Growth in constant currencies 9.3% 9.8% 36.7%

Q2 2018 3,111 741 175

532 121 109

9.8% 9.2% 56.5%

YTD 2018 5,959 1,440 302

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Interim financial statements Income statement Q2 2018

Q2 2017

YTD 2018

YTD 2017

Net revenue

19,491

18,924

37,871

37,147

Direct costs

15,041

14,707

29,301

28,710

Gross profit

4,450

4,217

8,570

8,437

(DKKm)

Other external expenses

733

769

1,491

1,620

Staff costs

2,086

2,014

4,110

4,072

Operating profit before amortisation, depreciation and special items

1,631

1,434

2,969

2,745

Amortisation and depreciation of intangibles, property, plant and equipment Operating profit before special items Special items, costs

182

194

364

376

1,449

1,240

2,605

2,369 248

-

88

-

Financial items

(120)

182

35

276

Profit before tax

1,569

970

2,570

1,845

382

228

614

434

1,187

742

1,956

1,411

1,195

740

1,965

1,408

(8)

2

(9)

3

Earnings per share of DKK 1

6.5

4.0

10.7

7.6

Diluted earnings per share of DKK 1 for the period

6.4

3.9

10.5

7.5

Tax on profit for the period Profit for the period Profit for the period is attributable to: Shareholders of DSV A/S Non-controlling interests Earnings per share:

Statement of comprehensive income Q2 2018

Q2 2017

YTD 2018

YTD 2017

1,187

742

1,956

1,411

Currency translation adjustments, foreign enterprises

(44)

(369)

(146)

(265)

Fair value adjustment relating to hedging instruments

(9)

30

(20)

38

1

(1)

1

1

(1)

(4)

-

(7)

19 (6)

(1) -

(15) 1

(40) 10

(40)

(345)

(179)

(263)

1,147

397

1,777

1,148

1,148

393

1,781

1,145

(1)

4

(4)

3

1,147

397

1,777

1,148

(DKKm) Profit for the period Items that will be reclassified to income statement when certain conditions are met:

Fair value adjustment relating to hedging instruments transferred to financials Tax on items reclassified to income statement Items that will not be reclassified to income statement: Actuarial gains/(losses) Tax relating to items that will not be reclassified Other comprehensive income (OCI), net of tax Total comprehensive income Total comprehensive income is attributable to: Shareholders of DSV A/S Non-controlling interests Total

Page 14 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Cash flow statement (DKKm)

Operating profit before amortisation, depreciation and special items Adjustments: Share-based payments

YTD 2018

YTD 2017

2,969

2,745

43

31

Change in provisions

(118)

(110)

Change in working capital, etc.

(647)

30

Special items Interest received Interest paid

37 (126)

(228) 57 (246)

Corporation tax, paid

(459)

(475)

Cash flow from operating activities

1,699

1,804

Purchase of intangible assets

(221)

(130)

Purchase of property, plant and equipment

(332)

(329)

555

417

-

(8)

Disposal of property, plant and equipment Acquisition and disposal of subsidiaries and activities Change in other financial assets

(30)

48

Cash flow from investing activities

(28)

(2)

Free cash flow

1,671

1,802

Proceeds from and repayment of short-term and long-term debt

(201)

(1,641)

(43)

(41)

(380)

(345)

Other financial liabilities incurred Shareholders: Dividends distributed Purchase of treasury shares Sale of treasury shares

(1,449)

-

312

253

Other transactions with shareholders

13

4

Cash flow from financing activities

(1,748)

(1,770)

(77)

32

Cash flow for the period Cash and cash equivalents on 1 January 2018

1,348

1,714

Cash flow for the period

(77)

32

Currency translation adjustments

(46)

70

1,225

1,816

1,671

1,802

Cash and cash equivalents on 30 June 2018 The cash flow statement cannot be directly derived from the balance sheet and income statement. Statement of adjusted free cash flow Free cash flow Net acquisition of subsidiaries and activities

-

8

Special items (restructuring costs)

-

228

1,671

2,038

Adjusted free cash flow

Page 15 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Balance sheet - Assets (DKKm)

30.06.2018

31.12.2017

30.06.2017

16,614

16,573

16,802

2,455

2,431

3,012

287

257

269

1,003

965

1,049

Total non-current assets

20,359

20,226

21,132

Trade receivables

Intangible assets Property, plant and equipment Other receivables Deferred tax assets

13,495

12,557

12,929

Work in progress (services and inventories)

2,337

1,762

1,998

Other receivables

1,755

1,778

1,796

Cash and cash equivalents

1,225

1,348

1,816

224

717

313

Total current assets

19,036

18,162

18,852

Total assets

39,395

38,388

39,984

30.06.2018

31.12.2017

30.06.2017

Assets held for sale

Balance sheet – Equity and liabilities (DKKm) Share capital

188

190

190

Reserves

15,022

14,645

14,356

DSV A/S shareholders' share of equity

15,210

14,835

14,546

(31)

(26)

(42)

15,179

14,809

14,504

Non-controlling interests Total equity Deferred tax liabilities Pensions and similar obligations Provisions

190

82

244

1,119

1,124

1,503

607

706

716

Financial liabilities

5,855

6,491

7,258

Total non-current liabilities

7,771

8,403

9,721

Provisions

384

383

368

Financial liabilities

880

495

1,139

Trade payables

7,628

7,477

6,861

Work in progress (services)

2,794

2,539

2,657

Other payables

4,398

3,953

4,260

Corporation tax

361

329

474

Total current liabilities

16,445

15,176

15,759

Total liabilities

24,216

23,579

25,480

Total equity and liabilities

39,395

38,388

39,984

Page 16 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Statement of changes in equity – 1 January - 30 June 2018

Retained earnings

DSV A/S shareholders' share of equity

Noncontrolling interests

Total equity

Share capital

Share premium

Treasury share reserve

190

4,744

(6)

(35)

(508)

10,450

14,835

(26)

14,809

Profit for the period

-

-

-

-

-

1,965

1,965

(9)

1,956

Net exchange differences recognised in OCI

-

-

-

-

(151)

-

(151)

5

(146)

Fair value adjustments relating to hedging instruments

-

-

-

(20)

-

-

(20)

-

(20)

Fair value adjustments relating to hedging instruments transferred to financial expenses

-

-

-

1

-

-

1

-

1

Actuarial gains/(losses)

-

-

-

-

-

(15)

(15)

-

(15)

Tax on other comprehensive income

-

-

-

-

-

1

1

-

1

Other comprehensive income, net of tax

-

-

-

(19)

(151)

(14)

(184)

5

(179)

Total comprehensive income for the period

-

-

-

(19)

(151)

1,951

1,781

(4)

1,777

Share-based payments

-

-

-

-

-

43

43

-

43

Dividends distributed

-

-

-

-

-

(380)

(380)

(1)

(381)

Purchase of treasury shares

-

-

(3)

-

-

(1,446)

(1,449)

-

(1,449)

Sale of treasury shares

-

-

2

-

-

310

312

-

312

(2)

-

2

-

-

-

-

-

-

Dividends on treasury shares

-

-

-

-

-

14

14

-

14

Other adjustments

-

-

-

-

-

3

3

-

3

Tax on transactions with owners

-

-

-

-

-

51

51

-

51

(2)

-

1

-

-

(1,405)

(1,406)

(1)

(1,407)

188

4,744

(5)

(54)

(659)

10,996

15,210

(31)

15,179

(DKKm) Equity on 1 January 2018

Hedging reserve

Translation reserve

Transactions with owners:

Capital reduction

Total transactions with owners Equity on 30 June 2018

Statement of changes in equity – 1 January - 30 June 2017

(DKKm) Equity on 1 January 2017

Share capital

Share premium

Treasury share reserve

Hedging reserve

Translation reserve

Retained earnings

DSV A/S shareholders' share of equity

Noncontrolling interests

Total equity

190

4,744

(5)

(18)

(79)

8,584

13,416

(38)

13,378

Profit for the period

-

-

-

-

-

1,408

1,408

3

1,411

Net exchange differences recognised in OCI

-

-

-

-

(265)

-

(265)

-

(265)

Fair value adjustments relating to hedging instruments

-

-

-

38

-

-

38

-

38

Fair value adjustments relating to hedging instruments transferred to financial expenses

-

-

-

1

-

-

1

-

1

Actuarial gains/(losses)

-

-

-

-

-

(40)

(40)

-

(40)

Other adjustments

-

-

-

(55)

-

55

-

-

-

Tax on other comprehensive income

-

-

-

(7)

-

10

3

-

3

Other comprehensive income, net of tax

-

-

-

(23)

(265)

25

(263)

-

(263)

Total comprehensive income for the period

-

-

-

(23)

(265)

1,433

1,145

3

1,148

Share-based payments

-

-

-

-

-

31

31

-

31

Dividends distributed

-

-

-

-

-

(342)

(342)

(3)

(345)

Sale of treasury shares

-

-

2

-

-

251

253

-

253

Addition/disposal of non-controlling interests

-

-

-

-

-

-

-

(4)

(4)

Dividends on treasury shares

-

-

-

-

-

7

7

-

7

Other adjustments

-

-

-

-

-

2

2

-

2

Tax on transactions with owners

-

-

-

-

-

34

34

-

34

Transactions with owners:

Total transactions with owners Equity on 30 June 2017

Page 17 of 20

-

-

2

-

-

(17)

(15)

(7)

(22)

190

4,744

(3)

(41)

(344)

10,000

14,546

(42)

14,504

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

Notes 1 Accounting policies

2 Accounting estimates and judgements

The 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.

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 estimates are based on professional judgement, historical data and other factors available to Management. By their nature, estimates include a degree of uncertainty, and actual results may therefore deviate from the estimates on the reporting date. Estimates are continuously evaluated, and the effects of any changes are recognised in the relevant period.

Except as stated below, accounting policies applied in preparing the Interim Financial Report are consistent with those applied in preparing the 2017 Annual Report. The 2017 Annual Report provides a full description of Group accounting policies. Changes in accounting policies DSV A/S has implemented the latest International Financial Reporting Standards (IFRS) and amendments effective as of 1 January 2018 as adopted by the European Union. Implementation of the standards and amendments have not had any material impact on the Group’s Financial Statements and are likewise not expected to have any significant future impact. Of the new standards and amendments implemented the most significant are as follows: IFRS 9 Financial Instruments IFRS 9 introduces several changes to IAS 39 - including a new impairment framework, new rules for hedge accounting and new requirements and guidance on classifications and measurement of financial assets and liabilities. The standard has resulted in only minor changes to existing accounting practices, mainly affecting credit-loss and impairment models applied. The most significant change has been applied to impairment assessments of trade receivables as these are now considered based on IFRS 9’s expected creditloss model, where previously an incurred-loss model was applied. This revised approach has not resulted in any materially different impairment assessment of trade receivables compared to prior practices. Additionally, the new standard has not carried any significant changes to classifications of financial assets or financial liabilities.

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 2018 interim financial statements. The most significant of these is IFRS 16 Leases which is also currently the only standard expected to have a significant impact on the DSV financial statements when implemented 1 January 2019. The standard broadens the criteria for recognition of lease assets and liabilities and will have a material impact on DSV’s financial statements, as off-balance operating leases will be capitalised and accounted for, similar to our current finance lease accounting practices. The expected impact of implementing the standard on the DSV financial statements remains unchanged from the assessment disclosed in chapter 1 of the DSV Annual Report 2017.

IFRS 9 has been applied following the standard retrospective approach, with the practical expedients permitted under the standard and with no restatement of the comparison period. IFRS 15 Revenue from contracts with customers IFRS 15 introduces a new framework for revenue recognition and measurement. The standard has resulted in only minor changes to existing accounting practices, mainly relating to extended external reporting disclosure requirements. IFRS 15 has been applied following the modified retrospective approach with any cumulative effects recognised in retained earnings as of 1 January 2018 and with no restatement of the comparison period.

Page 18 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

4 Segment information

Air & Sea YTD 2018 YTD 2017

(DKKm)

Road YTD 2018 YTD 2017

Solutions YTD 2018 YTD 2017

Other activities, nonallocated items and eliminations YTD 2018 YTD 2017

Total YTD 2018 YTD 2017

Condensed income statement Divisional net revenue Intercompany revenue

17,509 (293)

17,343 (288)

15,538 (742)

15,317 (690)

5,959 (160)

5,591 (184)

1,166 (1,106)

1,074 (1,016)

40,172 (2,301)

39,325 (2,178)

Net revenue

17,216

17,055

14,796

14,627

5,799

5,407

60

58

37,871

37,147

Gross profit

4,532

4,333

2,624

2,749

1,440

1,361

(26)

(6)

8,570

8,437

Other external expenses Staff costs

942 1,763

942 1,799

622 1,373

641 1,374

461 564

456 583

(534) 410

(419) 316

1,491 4,110

1,620 4,072

44

59

66

75

113

128

141

114

364

376

1,783

1,533

563

659

302

194

(43)

(17)

2,605

2,369

Total assets

21,184

21,553

16,094

15,931

7,664

7,000

(5,547)

(4,500)

39,395

39,984

Total liabilities

24,247

26,765

10,116

9,510

7,024

6,976

(17,171)

(17,771)

24,216

25,480

Amortisation and depreciation of intangibles, property, plant and equipment Operating profit before special items Condensed balance sheet

5 Net revenue Net revenue comprises freight forwarding services, income from property projects and other related services delivered in the financial period as well as changes in the completion of services in progress.

short delivery time with the exception of sea services, which usually take longer due to the nature of the transport service delivered. Our major service deliveries – Air & Sea services, Road services and Solutions services – follow our divisional structure as presented in note 4 Segment information. Geographical segmentation of net revenue breaks down as follows:

Net revenue from freight forwarding services are recognised following the over-time recognition principle. Most freight forwarding services and related services are characterised by

EMEA Q2 2018 Q2 2017

(DKKm) Air & Sea services Road services Solutions services Divisional net revenue Non-allocated items and eliminations

Americas Q2 2018 Q2 2017

APAC Q2 2018 Q2 2017

4,553 7,187 2,417

4,474 7,019 2,287

2,418 675 461

2,204 665 407

2,124 233

2,195 219

9,095 7,862 3,111

8,873 7,684 2,913

14,157

13,780

3,554

3,276

2,357

2,414

20,068 (577)

19,470 (546)

19,491

18,924

Total net revenue

EMEA YTD 2018 YTD 2017

(DKKm)

Total Q2 2018 Q2 2017

Americas YTD 2018 YTD 2017

APAC YTD 2018 YTD 2017

Total YTD 2018 YTD 2017

Air & Sea services Road services Solutions services

8,974 14,244 4,608

8,752 13,990 4,318

4,498 1,294 899

4,380 1,327 843

4,037 452

4,211 430

17,509 15,538 5,959

17,343 15,317 5,591

Divisional net revenue Non-allocated items and eliminations

27,826

27,060

6,691

6,550

4,489

4,641

39,006 (1,135)

38,251 (1,104)

37,871

37,147

Total net revenue

Page 19 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018

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 sixmonth period ended on 30 June 2018. 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 F inancial Statements Act. Apart from the implementation of IFRS 9 and IFRS 15, the accounting policies remain unchanged from the 2017 Annual Report. In our opinion, the Interim Financial Statements give a true and fair view of the DSV Group's assets, equity, liabilities and financial position on 30 June 2018 and of the results of the Group's activities and the cash flow for the six-month period ended on 30 June 2018. We also find that the Management's commentary provides a fair statement of development 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. Except as disclosed in the Interim Financial Report, no changes in the major risks and elements of uncertainty faced by the Group have occurred relative to the disclosures in 2017 Annual Report. Hedehusene, 1 August 2018

Executive Board:

Jens Bjørn Andersen CEO

Jens H. Lund CFO

Board of Directors:

Kurt K. Larsen Chairman

Thomas Plenborg Deputy Chairman

Annette Sadolin

Birgit W. Nørgaard

Robert S. Kledal

Jørgen Møller

Page 20 of 20

INTERIM FINANCIAL REPORT – DSV COMPANY ANNOUNCEMENT NO. 704 – 1 AUGUST 2018