INTERIM FINANCIAL REPORT Q3 2019

for 2019 are at DKK 6,600 million including amortisation of customer relationships of approximately DKK 100 million, of which DKK 80 million are relat...

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INTERIM FINANCIAL REPORT Q3 2019 Company Announcement no. 799 1 November 2019

Selected financial and operating data for the period 1 January - 30 September 2019 (DKKm) Revenue Gross profit EBIT before special items Operating margin Conversion ratio Special items, costs Profit after tax Adjusted earnings for the period Adjusted free cash flow Diluted adjusted earnings per share of DKK 1 for the last 12 months

Q3 2019

Q3 2018 excl. IFRS 16

YTD 2019

YTD 2018 excl. IFRS 16

24,521 6,271 1,785 7.3% 28.5%

20,237 4,472 1,507 7.4% 33.7%

64,579 16,670 4,870 7.5% 29.2%

58,108 13,042 4,112 7.1% 31.5%

172 1,149 1,403

1,104 1,126

191 3,261 3,592 2,453 24.2

3,060 3,126 2,631 21.6

Jens Bjørn Andersen, Group CEO: “The closing of the Panalpina transaction on 19 August was the all-important event in Q3. We have had a good start to the integration and the first operational integrations have already started. Meanwhile, we are pleased to report strong results for Q3, despite challenging market conditions, especially in the air freight market.” Financial outlook for 2019 Due to the Panalpina transaction, we withdrew the financial outlook for 2019 earlier this year. With the transaction completed and Panalpina included in the consolidated financial statements as of 19 August 2019, the expectations for full-year EBIT before special items for 2019 are at DKK 6,600 million including amortisation of customer relationships of approximately DKK 100 million, of which DKK 80 million are related to Panalpina. Transaction and integration costs (reported as special items) for 2019 are expected to amount to approximately 30% of total expected restructuring costs of DKK 2,300 million. Synergies and integration costs When Panalpina is fully integrated we expect to achieve annual cost synergies of around DKK 2,300 million (previously announced DKK 2,200 million). Around 5% of the cost synergies are expected to impact the income statement in 2019, around 60% in 2020 and the remaining 35% in 2021. Total transaction and integration costs are expected in the level of DKK 2,300 million. These costs will be charged to the income statement under Special Items. We expect that approximately 30% of the transaction and integration costs will materialise in 2019, 55% in 2020 and 15% in 2021. Share buyback On 11 November, we will launch a new share buyback programme of a maximum value of DKK 2,500 million, running until 6 February 2020. Please refer to Company Announcement No. 800 for further details. Contacts Investor Relations Flemming Ole Nielsen, tel. +45 43 20 33 92, [email protected] Nicolas Thomsen, tel. +45 43 20 31 93, [email protected] Media Tina Hindsbo, tel. +45 43 20 36 63, [email protected] Yours sincerely, DSV Panalpina A/S DSV Panalpina A/S, Hovedgaden 630, 2640 Hedehusene, Denmark, tel. +45 43 20 30 40, CVR No. 58233528, www.dsv.com. DSV Panalpina Group We provide and manage supply chain solutions for thousands of companies every day – from the small family run business to the large global corporation. Our reach is global, yet our presence is local and close to our customers. 60,000 employees in more than 90 countries work passionately to deliver great customer experiences and high-quality services. Read more at www.dsv.com

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Financial highlights Q3 2018 Q3 2019 excl. IFRS 16 Income statement (DKKm) Revenue Gross profit EBITDA before special items EBIT before special items Special items, costs Net financial expenses Profit for the period Adjusted earnings for the period

YTD 2018 YTD 2019 excl. IFRS 16

24,521 6,271 2,727

20,237 4,472 1,699

64,579 16,670 7,431

58,108 13,042 4,668

1,785 172 113 1,149 1,403

1,507 94 1,104 1,126

4,870 191 435 3,261 3,592

4,112 129 3,060 3,126

Balance sheet (DKKm) DSV Panalpina 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

50,842 (190) 99,427 3,719 17,134 69,424 693

15,327 (33) 40,201 2,342 5,602 20,912 466

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

5,219 1,410 6,629 2,453 (4,787) (2,466) (423) 1,842

2,776 (204) 2,572 2,631 (2,420) (2,579) (380) 152

25.8 7.5 29.2 23.2 12.5 12.7 51.1 1.8

22.4 7.1 31.5 23.2 25.2 25.6 38.1 0.9

22.6 18.9 24.2 241,527 9,484 185,493 188,099 651.8

20.9 16.8 21.6 188,000 6,933 183,399 186,522 584.0

61,799

48,182

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 for the last 12 months Diluted adjusted earnings per share of DKK 1 for the period 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 last 12 months Average diluted number of shares ('000) for the last 12 months Share price end of period (DKK)

25.6 7.3 28.5 23.4

22.1 7.4 33.7 21.9

6.7

6.1

Staff Number of full-time employees

The implementation of IFRS 16 Leases as from 1 January 2019 has a material impact on the financial statements and key ratios. Comparative figures for 2018 have not been restated. For a definition of the financial highlights, please refer to page 81 of the 2018 Annual Report. *For the calculation of financial ratios for 2019, certain pro forma adjustments have been made, please refer to Note 2.

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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Management’s commentary On 19 August 2019, DSV completed the acquisition of Panalpina. The acquisition was an all-share transaction, and 55.5 million new shares were issued. The Group achieved a gross profit of DKK 16,670 million for the first nine months of 2019, compared to DKK 13,042 million for the same period last year, with organic growth of 6.2%. EBIT before special items was DKK 4,870 million for the first nine months of 2019, compared to DKK 4,112 million for the same period last year, with organic growth of 7.9%. FINANCIAL DEVELOPMENT 2018 - 2019

(DKKm) Revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Q3 2018 Currency excl. translation IFRS 16 adjustments 20,237 253 4,472 58 1,507 20

Acquisitions, net ** 4,301 975 62

Organic growth (270) 196 93

Organic growth* (1.3%) 4.3% 6.1%

Q3 2019 excl. IFRS 16 *** 24,521 5,701 1,682

22.1 7.4 33.7

YTD 2018 Currency excl. translation IFRS 16 adjustments 58,108 514 13,042 140 4,112 67

IFRS 16 impact *** 570 103

Q3 2019 24,521 6,271 1,785

23.2 6.9 29.5

Acquisitions, net ** 4,170 959 63

Organic growth 1,787 813 330

Organic growth* 3.0% 6.2% 7.9%

YTD 2019 excl. IFRS 16 *** 64,579 14,954 4,572

22.4 7.1 31.5

25.6 7.3 28.5

IFRS 16 impact *** 1,716 298

YTD 2019 64,579 16,670 4,870

23.2 7.1 30.6

25.8 7.5 29.2

* Growth in constant currencies excluding acquisitions and IFRS 16 impact ** Acquisitions includes Panalpina's amortisation of customer relationships and Panalpina's IFRS 16 impact *** IFRS 16 impact from the former DSV Group

Integration of Panalpina Welttransport (Holding) AG The acquisition of Panalpina Welttransport (Holding) AG (Panalpina) was closed on 19 August 2019, from which date Panalpina has been included in the consolidated financial statements of DSV. The acquisition was an all-share transaction (public exchange offer), and 55.5 million new shares corresponding to DKK 35.4 billion were issued in a capital increase and used as consideration. Following the completion of the transaction the legal name of the holding company was changed to DSV Panalpina A/S. However, all commercial activities will continue under the DSV brand. The Panalpina Group was one of the world's leading providers of supply chain solutions. On acquisition, the Swiss-based company employed approximately 14,500 full-time employees

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in 70 countries generating annual revenue of approximately DKK 40 billion in 2018. Panalpina was included in the consolidated financial statements as of 19 August 2019. The 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 2019. We have initiated the operational and legal integration of Panalpina. The process is carried out while focusing on maintaining a high service level for our customers in the transition phase. We expect to achieve annual cost synergies of around DKK 2,300 million (previously announced DKK 2,200 million). The cost synergies will primarily be derived from the consolidation of operations, logistics facilities, administration and IT infrastructure.

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

We expect to recognise around 5% of the cost synergies in the income statement for 2019. In 2020 we expect around 60% of the synergies to materialise and the remaining 35% in 2021. Total transaction and integration costs are expected in the level of DKK 2,300 million. These costs will be charged to the income statement under Special Items. We expect that approximately 30% of the transaction and integration costs will materialise in 2019, 55% in 2020 and 15% in 2021. The Panalpina activities have been included in the existing DSV divisional structure from the date of acquisition based on Panalpina’s segment structure of Air- and Ocean Freight (included in Air & Sea) and Logistics (split approximately 50/50 between Road and Solutions). The Panalpina acquisition will have the largest impact on the Air & Sea division (approximately 90% of Panalpina revenue is Air & Sea activities) and only limited impact on Road and Solutions. As the integration progresses, new information may result in adjustments to the opening balance and accounting estimates as well as changes to the allocation of activities and number of employees to the individual segments (divisions). For further information please see Note 8.

Profit for the period Revenue For the first nine months of 2019, DSV Panalpina revenue amounted to DKK 64,579 million (YTD 2018: DKK 58,108 million). Adjusted for exchange rate fluctuations (in constant currencies) and the inclusion of Panalpina, growth for the ninemonth period was 3.0%. The Air & Sea division achieved organic growth in revenue of 5.4%, Road 1.5% and Solutions a negative 0.8% for the first nine months of 2019, compared to the same period last year; all in constant currencies and excluding the impact of Panalpina.

REVENUE YTD 2019 (DKKm)

Gross profit Gross profit was DKK 16,670 million for the first nine months of the year, compared to DKK 13,042 million for the same period of 2018. In constant currencies and excluding IFRS 16 and Panalpina, growth in gross profit was 6.2%. The Air & Sea division achieved organic growth in gross profit of 6.7%, Road 1.9% and Solutions 6.6% for the first nine months of 2019, compared to the same period last year. All in constant currencies and excluding IFRS 16 and the impact of Panalpina. For Q3 2019, gross profit amounted to DKK 6,271 million, compared to DKK 4,472 million for the same period last year. Similar to the development in revenue, the acquisition of Panalpina had a large impact on the increase in gross profit for Q3 2019. In constant currencies and excluding IFRS 16 and Panalpina, organic growth in gross profit was 4.3% and was positively impacted by an increase in profit per shipment in Air & Sea and improved gross margins in both Road and Solutions. IFRS 16 had a positive impact on gross profit of DKK 570 million for Q3 2019 and DKK 1,716 million for the nine-month period ended 30 September. GROSS PROFIT YTD 2019 (DKKm)

For Q3 2019, revenue amounted to DKK 24,521 million, compared to DKK 20,237 million for the same period last year. The increase in Q3 2019 was mainly attributable to the inclusion of the results of the Panalpina operations as of 19 August. Organic growth in Q3 was negative by 1.3%. Demand weakness in several segments of the global logistics markets continued in the third quarter of 2019. This led to lower average freight rates, especially in the air freight market, where market volumes are estimated to be down by 4% for the first nine months. The sea freight market is estimated to have grown 1-2% for the first nine months of 2019, although there have been significant differences between trade lanes, with the TransPacific lane showing the weakest development. The European road freight market and contract logistics market have been more stable and are estimated to have grown by 1-2%, close to the growth in the underlying economy.

The consolidated gross margin was 25.8% for the first nine months of 2019 (23.2% excluding IFRS 16), compared to 22.4% for the first nine months of 2018.

EBIT before special items EBIT before special items was DKK 4,870 million for the first nine months of 2019, compared to DKK 4,112 million for the same period of 2018. In constant currencies and excl. IFRS 16 and Panalpina, organic growth for the period was 7.9%. For Q3 2019, EBIT before special items amounted to DKK 1,785 million, compared to DKK 1,507 million for the same period last year. In constant currencies (organic growth) and excl. IFRS 16

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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

and the acquisition of Panalpina, growth for the period was 6.1%. IFRS 16 had a positive impact on EBIT before special items of DKK 103 million for Q3 2019 and DKK 298 million for the ninemonth period ended 30 September. EBIT before special items was positively affected by the inclusion of Panalpina, which reported positive EBIT before special items of DKK 61 million for the period including amortisation of customer relationships of DKK 26 million. The cost synergies from the acquisition had very limited effect in the quarter, but the synergy impact is expected to increase in the coming quarters. EBIT BEFORE SPECIAL ITEMS YTD 2019 (DKKm)

to Q3 2018, but this was partly offset by exchange rate gains of DKK 57 million in Q3 2019. The exchange rate gains were mainly related to intra-group loans and had no cash flow impact.

Tax on profit for the period The effective tax rate was 23.2% for the first nine months of 2019 and in line with the first nine months of 2018.

Profit for the period Profit for the first nine months of 2019 was DKK 3,261 million, compared to DKK 3,060 million for the same period of 2018. The growth was primarily driven by higher operating profit in 2019 but was negatively impacted by an increase in special items related to the integration.

Diluted adjusted earnings per share Diluted adjusted earnings per share were DKK 18.9 for the first nine months of 2019, compared to DKK 16.8 for the same period last year. The 12-month figure to the end of September 2019 was DKK 24.2 per share, compared to DKK 21.6 for the same period last year, corresponding to an increase of 12.0%. The 29.9% capital increase carried out in August 2019 has not yet fully impacted the average number of shares. The impact from the capital increase will gradually materialise over a 12month period.

The conversion ratio was 29.2% for the first nine months of 2019 (30.6% excluding IFRS 16), compared to 31.5% for the corresponding period of 2018.

IFRS 16 has no material impact on earnings per share.

Cash flow statement The conversion ratio was 28.5% for Q3 2019 (29.5% excluding IFRS 16), compared to 33.7% for the same period last year. The decline in margins in Q3 2019 is attributable to the Panalpina integration, which initially has an adverse effect on the margins of the Group. As the integration progresses and the synergies are realised, margins are expected to increase again. The amortisation of customer relationships came to DKK 41 million for the first nine months of 2019 against DKK 21 million for the same period last year. For Q3 2019, amortisation of customer relationships came to DKK 31 million, of which DKK 26 million was related to Panalpina. Amortisation of customer relationships was DKK 7 million in Q3 2018.

CASH FLOW STATEMENT YTD 2019

YTD 2018 excl. IFRS16

Cash flow from operating activities Cash flow from investing activities

5,219 1,410

2,776 (204)

Free cash flow

6,629

2,572

Proceeds from and repayment of short-term and long-term debt Allocated to shareholders Exercise of share options Other transactions with shareholders

(2,459) (2,889) 692 (131)

160 (2,959) 366 13

Cash flow from financing activities

(4,787)

(2,420)

Cash flow for the period

1,842

152

Free cash flow Repayment of lease liabilities and interest (IFRS 16 impact reversed) Net acquisition of subsidiaries and activities Special items (restructuring costs) Adjusted free cash flow

6,629

2,572

(2,256) (2,101) 181 2,453

59 2,631

(DKKm)

Special items, costs Special items, costs totalled DKK 191 million for the first nine months of 2019 (2018: DKK 0 million) and are mainly related to transaction and integration costs related to the acquisition of Panalpina.

Financial items Financial items totalled a net expense of DKK 435 million for the first nine months of 2019, compared to DKK 129 million for the same period last year. The increase was mainly due to the implementation of IFRS 16, as interest on lease liabilities amounted to DKK 276 million for the first nine months of 2019 (2018: DKK 10 million). For Q3 2019, financial items totalled a net expense of DKK 113 million, compared to DKK 86 million for the same period last year. IFRS 16 caused an increase of DKK 93 million, compared

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Cash flow from operating activities Cash flow from operating activities was DKK 5,219 million for the first nine months of 2019, compared to DKK 2,776 million for the same period of 2018. The increase was mainly due to IFRS 16, which had a positive impact of DKK 2,256 million for the first nine months as repayment of lease liabilities and interest is now reported as financing activities. The underlying improvement was around DKK 200 million and was driven primarily by an increase in operating results.

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Cash flow from investing activities Cash flow from investing activities amounted to DKK 1,410 million for the first nine months of 2019, compared to a negative cash flow of DKK 204 million for the same period of 2018. The development is due to the Panalpina transaction, where the net cash position of DKK 1,975 million was included as a positive cash flow from acquisition.

Adjusted free cash flow Adjusted free cash flow for the period was DKK 2,453 million, compared to DKK 2,631 million for the same period last year.

DEVELOPMENT IN EQUITY (DKKm) Equity at 1 January 2019 as previously reported Impact of accounting policy change

YTD 2019

YTD 2018 excl. IFRS 16

14,561 (593)

14,835 -

Equity on 1 January Profit for the period Currency translation adjustments, foreign enterprises Capital increase Allocated to shareholders Sale of treasury shares Other equity movements

13,968 3,265

14,835 3,072

308 35,390 (2,889) 692 108

(191) (2,959) 366 204

Equity end of period

50,842

15,327

Net working capital The Group reported net working capital of DKK 3,719 million on 30 September 2019, compared to DKK 2,342 million on 30 September 2018. Relative to full-year revenue, the net working capital amounted to 4.3% on 30 September 2019 (30 September 2018: 3.0%).

Capital structure and finances DSV Panalpina A/S shareholders’ share of equity The equity interest of DSV Panalpina shareholders was DKK 50,842 million on 30 September 2019 (DKK 14,561 million on 31 December 2018). The development in equity was driven by the capital increase made in connection with the Panalpina transaction. On 15 August 2019, the share capital was increased by nominally DKK 55,526,507. The capital increase corresponds to 29.9% of the share capital. After the capital increase, the share capital amounted to nominally DKK 241,526,507 divided into 241,526,507 shares of DKK 1 each. Each share has one vote. DSV Panalpina reduced its share capital on 25 October 2019 through the cancellation of 6,526,507 treasury shares. Consequently, the share capital of DSV Panalpina has a nominal value of DKK 235 million, corresponding to 235 million shares with a face value of DKK 1. On 30 September 2019, the Company's portfolio of treasury shares amounted to 9,483,574 shares. On 31 October 2019, the portfolio of treasury shares amounts to 4,306,067 shares. The Company currently runs a share buyback programme of a maximum value of DKK 3,500 million, running from 30 April to 8 November 2019. Please refer to Company Announcement No. 745 for further details. On 11 November we will launch a new share buyback programme of a maximum value of DKK 2,500 million, running until 6 February 2020. Please refer to Company Announcement No. 800 for further details. The solvency ratio excluding non-controlling interests was 51.1% on 30 September 2019 (30 September 2018: 38.1%). The increase was primarily due to the capital increase.

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Net interest-bearing debt Net interest-bearing debt amounted to DKK 17,134 million on 30 September 2019, compared to a total net interest-bearing debt of DKK 5,602 million on 30 September 2018. The increase is mainly due to IFRS 16. Due to the impact from IFRS 16, the financial gearing ratio was 1.8 on 30 September 2019, up from 0.9 for the same period last year. The targeted financial gearing ratio is below 2 times EBITDA. The weighted average duration of the Company’s bonds, committed loans and credit facilities was 2.6 years on 30 September 2019 and unchanged, compared to 30 September 2018.

Invested capital and ROIC The Group's invested capital including goodwill and customer relationships amounted to DKK 69,424 million on 30 September 2019, compared to DKK 20,912 million on 30 September 2018. Return on invested capital including goodwill and customer relationships was 12.5% for the 12-month period ended 30 September 2019, compared to 25.2% for the same period last year. The development is due to the Panalpina transaction and the implementation of IFRS 16.

Outlook Due to the Panalpina transaction the financial outlook for 2019 was withdrawn earlier this year. With the transaction completed and Panalpina included in the consolidated financial statements as of 19 August 2019, the revised expectations for full-year 2019 are as follows: •



EBIT before special items are expected to be DKK 6,600 million including amortisation of customer relations of approximately DKK 100 million, of which DKK 80 million are related to Panalpina. Special items (primarily transactions and integration costs) in 2019 are expected to amount to approximately 30% of the total expected restructuring costs of DKK 2,300 million.

The outlook is based on the current level of currency exchange rates and assumes that growth on global transport markets does not deteriorate further for the remainder of 2019. Furthermore, it is assumed that synergies for 2019 are achieved as expected.

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

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 combination with Panalpina substantially strengthens the Air & Sea division, which will be among the largest providers globally with close to 3 million containers (TEUs) and 1.5 million tonnes of air freight transported yearly. The division reported EBIT before special items of DKK 3,311 million for the first nine months of 2019 (2018: DKK 2,796 million), to which Panalpina contributed DKK 39 million. INCOME STATEMENT Q3 2018 Q3 2019 excl. IFRS 16

(DKKm) Divisional revenue Direct costs

YTD 2018 YTD 2019 excl. IFRS 16

13,981 10,538

9,625 7,266

33,074 24,678

27,134 20,243

Gross profit

3,443

2,359

8,396

6,891

Other external expenses Staff costs

594 1,442

439 886

1,404 3,320

1,381 2,649

EBITDA before special items

1,407

1,034

3,672

2,861

127 60

2 19

270 91

5 60

1,220

1,013

3,311

2,796

Depreciation of right-of-use assets Depreciation and amortisation of owned assets EBIT before special items

KEY PERFORMANCE INDICATORS Q3 2018 Q3 2019 excl. IFRS 16 Gross margin (%) Operating margin (%) Conversion ratio (%)

25.4 10.0 39.4

25.4 10.3 40.6

Number of full-time employees

22,824

12,090

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

48,113 3,117 13.9

10,884 1,611 32.6

Market development Freight volume growth DSV Market DSV Market Q3 Q3 YTD YTD 2019 2019 2019 2019 Sea freight – TEUs 41% 3% 17% 2% Air freight – tonnes 63% (4%) 23% (4%) DSV growth includes acquired and organic growth. Market growth rates are based on market statistics and own estimates.

Growth in Q3 2019, was significantly impacted by Panalpina. For Q3 2019, the division reported a total increase in sea freight volumes (TEUs) of 41%. Excluding Panalpina volumes, organic growth for the quarter was approximately 7%.

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24.6 8.7 35.4

24.5 10.5 42.9

YTD 2018 YTD 2019 excl. IFRS 16

For air freight, the division reported total volume (tonnes) growth of 63% for Q3 2019. Excluding Panalpina volumes, organic growth for the quarter was a decline of 6%. Historically, Panalpina has applied different criteria for measuring transported units than those of DSV. Therefore, there is not a one-to-one correlation to Panalpina’s historically reported volume numbers. Data quality will gradually improve as Panalpina’s transport volumes are migrated to DSV’s systems.

Divisional revenue The division’s revenue amounted to DKK 33,074 million for the first nine months of 2019, compared to DKK 27,134 million for the same period last year. The increase in revenue is mainly attributable to Panalpina. Organic growth for the period was 5.4%.

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

For Q3 2019, revenue amounted to DKK 13,981 million, compared to DKK 9,625 million for the same period last year. Organic growth for the quarter was 1.4% and was positively impacted by higher activity in sea freight, but offset by lower air freight volumes and lower average freight rates.

same period last year. This corresponds to an organic growth for the period of 13.3%. For Q3 2019, EBIT before special items totalled DKK 1,220 million, compared to DKK 1,013 million for the same period last year, which corresponds to an organic growth of 13.1%.

Gross profit Gross profit was DKK 8,396 million for the first nine months of 2019, compared to DKK 6,891 million for the same period in 2018. This corresponds to an organic growth for the period of 6.7%. For Q3 2019, gross profit amounted to DKK 3,443 million, compared to DKK 2,359 million for the same period last year, which corresponds to an organic growth of 7.6%. The organic growth in gross profit for Q3 2019 was driven by higher volumes and stronger yields for sea freight. For air freight, volumes were down for the quarter, but this was compensated by a significant improvement in yields. The reported gross profit per unit (TEU/tonne) for Q3 2019 declined, compared to the same period last year, which is a result of Panalpina having lower gross profit per unit. The division’s gross margin was 25.4% for the first nine months of 2019, which was on level with the same period last year. The inclusion of Panalpina had no material impact on the division’s gross margin.

EBIT before special items EBIT before special items was DKK 3,311 million for the first nine months of 2019, compared to DKK 2,796 million for the

The positive development is a result of a strong organic performance by the legacy DSV operation. Furthermore, EBIT before special items was positively affected by the inclusion of Panalpina, which reported positive EBIT before special items of DKK 39 million for the period including amortisation of customer relationships of DKK 23 million. The conversion ratio was 39.4% for the first nine months of 2019, compared to 40.6% for the same period last year. The operating margin was 10.0%, compared to 10.3% for the same period last year. For Q3 2019, the conversion ratio was 35.4%, compared to 42.9% for the same period last year. The operating margin was 8.7%, compared to 10.5% for Q3 2018. The decline in margins is attributable to the Panalpina inclusion, which initially has an adverse effect on the margins. As the integration progresses and the synergies are realised, margins are expected to increase again.

Net working capital The Air & Sea division's net working capital came to DKK 3,117 million on 30 September 2019, compared to DKK 1,611 million on 30 September 2018. The increase is mainly due to Panalpina.

FINANCIAL DEVELOPMENT 2018 - 2019

(DKKm) Divisional revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Divisional revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Q3 2018 Currency excl. translation IFRS 16 adjustments 9,625 205 2,359 48 1,013 20

Acquisitions, net ** 4,017 827 39

Organic growth 134 182 135

Organic growth* 1.4% 7.6% 13.1%

Q3 2019 excl. IFRS 16 *** 13,981 3,416 1,207

24.5 10.5 42.9

YTD 2018 Currency excl. translation IFRS 16 adjustments 27,134 433 6,891 131 2,796 65

24.4 8.6 35.3

Acquisitions, net ** 4,017 827 39

Organic growth 1,490 472 381

Organic growth* 5.4% 6.7% 13.3%

YTD 2019 excl. IFRS 16 *** 33,074 8,321 3,281

25.4 10.3 40.6

25.2 9.9 39.4

* Growth in constant currencies excluding acquisitions and IFRS 16 impact ** Acquisitions includes Panalpina's amortisation of customer relationships and Panalpina's IFRS 16 impact *** IFRS 16 impact from the former DSV Group

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IFRS 16 impact *** 27 13

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Q3 2019 13,981 3,443 1,220 24.6 8.7 35.4

IFRS 16 impact *** 75 30

YTD 2019 33,074 8,396 3,311 25.4 10.0 39.4

AIR AND SEA SPLIT Sea freight

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

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Q3 2019

Q3 2018 excl. IFRS16

6,629 5,013 1,616 24.4 520,048 3,107

Air freight

YTD 2019

YTD 2018 excl. IFRS16

Q3 2019

Q3 2018 excl. IFRS16

YTD 2019

YTD 2018 excl. IFRS16

4,731 3,566 1,165

16,560 12,446 4,114

13,425 9,978 3,447

7,352 5,525 1,827

4,894 3,700 1,194

16,514 12,232 4,282

13,709 10,265 3,444

24.6 369,143 3,156

24.8 1,271,305 3,236

25.7 1,085,141 3,177

24.9 288,793 6,328

24.4 177,155 6,736

25.9 629,197 6,806

25.1 513,422 6,707

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

DSV Road The Road division 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 network of more than 200 terminals and operates approximately 20,000 trucks. The acquisition of Panalpina is expected to add approximately DKK 1,5 billion of annual revenue to the Road division. EBIT before special items came to DKK 979 million with negative organic growth of 2.1%, compared to the same period last year. INCOME STATEMENT Q3 2018 Q3 2019 excl. IFRS 16

(DKKm)

YTD 2018 YTD 2019 excl. IFRS 16

Divisional revenue Direct costs

7,698 6,170

7,812 6,439

23,633 19,009

23,350 19,353

Gross profit

1,528

1,373

4,624

3,997

Other external expenses Staff costs

261 679

357 639

793 2,123

979 2,012

EBITDA before special items

588

377

1,708

1,006

Depreciation of right-of-use assets Depreciation and amortisation of owned assets

212 33

2 30

643 86

9 89

EBIT before special items

343

345

979

908

KEY PERFORMANCE INDICATORS Q3 2018 Q3 2019 excl. IFRS 16 Gross margin (%) Operating margin (%) Conversion ratio (%)

19.6 4.1 21.2

17.1 3.9 22.7

Number of full-time employees

13,493

13,345

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

9,776 (411) 13.6

4,579 (473) 23.1

Market development We estimate that the European road freight market has grown 12%. The market stalled in the third quarter of 2019, where especially the automotive sector saw declining volumes.

Divisional revenue The division’s revenue amounted to DKK 23,633 million for the first nine months of 2019, compared to DKK 23,350 million for the same period last year. Organic growth for the nine-month period was 1.5%. For Q3 2019, revenue amounted to DKK 7,698 million, compared to DKK 7,812 million for the same period last year. Organic growth for the quarter was negative by 2.2%. Revenue was impacted positively by the acquisition of Panalpina, but negatively by the divestment of the US-based

Page 10 of 24

19.8 4.5 22.4

17.6 4.4 25.1

YTD 2018 YTD 2019 excl. IFRS 16

Market Transport Ltd. as per 1 April 2019 (annual revenue approximately DKK 600 million). The development was driven by a decline in shipments due to lower market growth on most markets, especially the slowdown in the automotive sector and lower activity on UK related traffics.

Gross profit For the first nine months of 2019, gross profit totalled DKK 4,624 million, compared to DKK 3,997 million for the same period last year. The increase was mainly due to IFRS 16. Organic growth for the period was 1.9%. For Q3 2019, gross profit amounted to DKK 1,528 million, compared to DKK 1,373 million for the same period last year and the growth was mainly driven by IFRS 16. Organic growth for the quarter was a negative 4.3%.

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Similar to revenue, the gross profit was impacted positively by the acquisition of Panalpina, but negatively by the divestment of US-based Market Transport Ltd. and low market growth. The division’s gross margin was 19.6% for the first nine months of 2019 (17.3% excluding IFRS 16), compared to 17.1% for same period of 2018.

EBIT before special items EBIT before special items was DKK 979 million for the first nine months of 2019, compared to DKK 908 million for the same period last year. The increase was mainly due to IFRS 16. Organic growth for the period was negative by 2.1%. For Q3 2019, EBIT before special items totalled DKK 343 million, compared to DKK 345 million for the same period last year and the growth was mainly driven by IFRS 16. Organic growth was a negative 10.7%. The decline was due to the lower gross profit, which has not been fully compensated by adjustments to the cost base.

EBIT before special items was positively affected by the inclusion of Panalpina, which reported positive EBIT before special items of DKK 10 million for the period including amortisation of customer relationship of DKK 1 million. The conversion ratio was 21.2% for the first nine months of 2019 (22.1% excluding IFRS 16), compared to 22.7% for the same period last year. The operating margin was 4.1% (3.8% excluding IFRS 16), compared to 3.9% for the same period last year.

Net working capital The Road division’s net working capital was negative by DKK 411 million on 30 September 2019, compared to a negative DKK 473 million on 30 September 2018.

FINANCIAL DEVELOPMENT 2018 - 2019

(DKKm) Divisional revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Divisional revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Q3 2018 Currency excl. translation IFRS 16 adjustments 7,812 19 1,373 2 345 1

Acquisitions, net ** 43 40 11

Organic growth (176) (59) (37)

Organic growth* (2.2%) (4.3%) (10.7%)

Q3 2019 excl. IFRS 16 *** 7,698 1,356 320

17.6 4.4 25.1

YTD 2018 Currency excl. translation IFRS 16 adjustments 23,350 15 3,997 908 5

17.6 4.2 23.6

Acquisitions, net ** (88) 24 12

Organic growth 356 76 (19)

Organic growth* 1.5% 1.9% (2.1%)

YTD 2019 excl. IFRS 16 *** 23,633 4,097 906

17.1 3.9 22.7

17.3 3.8 22.1

* Growth in constant currencies excluding acquisitions and IFRS 16 impact ** Acquisitions includes Panalpina's amortisation of customer relationships and Panalpina's IFRS 16 impact *** IFRS 16 impact from the former DSV Group

Page 11 of 24

IFRS 16 impact *** 172 23

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Q3 2019 7,698 1,528 343 19.8 4.5 22.4

IFRS 16 impact *** 527 73

YTD 2019 23,633 4,624 979 19.6 4.1 21.2

DSV Solutions The Solutions division offers warehousing and logistics services such as e-commerce solutions, distribution and order management. The acquisition of Panalpina adds approximately 500 thousand square metres of warehouse capacity to the existing capacity and is expected to add annual revenue of approximately DKK 2 billion. EBIT before special items came to DKK 673 million for the first nine months of 2019 with negative organic growth of 2.9%, compared to the same period last year.

INCOME STATEMENT Q3 2018 Q3 2019 excl. IFRS 16

(DKKm)

YTD 2018 YTD 2019 excl. IFRS 16

Divisional revenue Direct costs

3,465 2,209

3,417 2,659

9,661 6,093

9,376 7,178

Gross profit

1,256

758

3,568

2,198

Other external expenses Staff costs

278 341

235 283

796 951

696 847

EBITDA before special items

637

240

1,821

655

Depreciation of right-of-use assets Depreciation and amortisation of owned assets

329 69

2 54

978 170

9 160

EBIT before special items

239

184

673

486

KEY PERFORMANCE INDICATORS Q3 2018 Q3 2019 excl. IFRS 16 Gross margin (%) Operating margin (%) Conversion ratio (%)

36.9 7.0 18.9

23.4 5.2 22.1

Number of full-time employees

22,521

20,384

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

11,471 1,483 9.2

4,445 1,204 16.0

Market development The contract logistics market is estimated to have grown 1-2% in the first nine months of 2019. The general economic slowdown continued and especially the weak development in the automotive industry impacted market growth in Q3 2019.

Divisional revenue The division’s revenue was DKK 9,661 million for the first nine months of 2019, compared to DKK 9,376 million for the same period of 2018. Organic growth for the period was negative by 0.8%. For Q3 2019, revenue amounted to DKK 3,465 million, compared to DKK 3,417 million for the same period last year. Panalpina contributed DKK 288 million for the quarter. Organic growth for Q3 2019 was negative by 8.0%. The development was impacted by the slowdown in the automotive sector and a

Page 12 of 24

36.2 6.9 19.0

22.2 5.4 24.3

YTD 2018 YTD 2019 excl. IFRS 16

general decline in the UK market.

Gross profit Gross profit was DKK 3,568 million for the first nine months of 2019, compared to DKK 2,198 million for the same period of 2018. The increase was mainly due to IFRS 16. Organic growth for the period was 6.6%. For Q3 2019, gross profit amounted to DKK 1,256 million, compared to DKK 758 million for the same period last year, and the growth was mainly driven by IFRS 16. Panalpina contributed DKK 100 million for the quarter. Organic growth was 2.6%. The development in gross profit was positively impacted by optimised processes and warehouse automation. The division’s gross margin was 36.9% for the first nine months of 2019 (25.4% excluding IFRS 16), compared to 23.4% for the

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

same period last year. The gross margin for Q3 2019 was 36.2% (25.5% excluding IFRS 16), compared to 22.2% for Q3 2018.

The cost base was impacted by IT migration (to the global warehouse management system) and implementation of new technology in warehouses.

EBIT before special items

EBIT before special items for Q3 2019 was positively affected by the inclusion of Panalpina, which reported positive EBIT before special items of DKK 11 million for the period including amortisation of customer relationships of DKK 2 million.

EBIT before special items was DKK 673 million for the first nine months of 2019, compared to DKK 486 million for the same period of 2018. The increase was mainly due to IFRS 16. Organic growth for the period was a negative 2.9%. For Q3 2019, EBIT before special items totalled DKK 239 million, compared to DKK 184 million for the same period last year. The growth was mainly driven by IFRS 16. Organic growth for the period was negative by 12.0%.

The conversion ratio was 18.9% for the first nine months 2019 (19.6% excluding IFRS 16), compared to 22.1% for the same period last year. The division's operating margin was 7.0% for the first nine months of 2019 (5.0% excluding IFRS 16), compared to 5.2% for the same period last year.

Net working capital The division’s net working capital came to DKK 1,483 million on 30 September 2019, compared to DKK 1,204 million on 30 September 2018.

FINANCIAL DEVELOPMENT 2018 - 2019

(DKKm) Divisional revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Divisional revenue Gross profit EBIT before special items Gross margin (%) Operating margin (%) Conversion ratio (%)

Q3 2018 Currency excl. translation IFRS 16 adjustments 3,417 35 758 7 184 -

Acquisitions, net ** 288 100 11

Organic growth (275) 20 (22)

Organic growth* (8.0%) 2.6% (12.0%)

Q3 2019 excl. IFRS 16 *** 3,465 885 173

22.2 5.4 24.3

YTD 2018 Currency excl. translation IFRS 16 adjustments 9,376 74 2,198 9 486 (1)

25.5 5.0 19.5

Acquisitions, net ** 288 100 11

Organic growth (77) 146 (14)

Organic growth* (0.8%) 6.6% (2.9%)

YTD 2019 excl. IFRS 16 *** 9,661 2,453 482

23.4 5.2 22.1

25.4 5.0 19.6

* Growth in constant currencies excluding acquisitions and IFRS 16 impact ** Acquisitions includes Panalpina's amortisation of customer relationships and Panalpina's IFRS 16 impact *** IFRS 16 impact from the former DSV Group

Page 13 of 24

IFRS 16 impact *** 371 66

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Q3 2019 3,465 1,256 239 36.2 6.9 19.0

IFRS 16 impact *** 1,115 191

YTD 2019 9,661 3,568 673 36.9 7.0 18.9

Interim financial statements Income statement Q3 2018 Q3 2019 excl. IFRS 16

(DKKm)

YTD 2018 YTD 2019 excl. IFRS 16

Revenue Direct costs

24,521 18,250

20,237 15,765

64,579 47,909

58,108 45,066

Gross profit

6,271

4,472

16,670

13,042

Other external expenses Staff costs

817 2,727

769 2,004

2,115 7,124

2,260 6,114

EBITDA before special items

2,727

1,699

7,431

4,668

680 262

6 186

1,938 623

23 533

1,785

1,507

4,870

4,112

172 85 96 102

(4) 3 87

191 132 276 291

132 10 251

1,500

1,413

4,244

3,983

Depreciation of right-of-use assets Depreciation and amortisation of owned assets EBIT before special items Special items, costs Financial income Financial expenses, lease liabilities Financial expenses, other Profit before tax Tax on profit for the period Profit for the period

351

309

983

923

1,149

1,104

3,261

3,060

1,141 8

1,107 (3)

3,265 (4)

3,072 (12)

5.6 5.5

6.1 6.0

17.4 17.2

16.8 16.5

Profit for the period attributable to: Shareholders of DSV Panalpina A/S Non-controlling interests Earnings per share of DKK 1 for the period Diluted earnings per share of DKK 1 for the period

Page 14 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Statement of comprehensive income Q3 2019

Q3 2018 excl. IFRS 16

YTD 2019

YTD 2018 excl. IFRS 16

1,149

1,104

3,261

3,060

Items that will be reclassified to income statement when certain conditions are met: Net exchange differences recognised in OCI Fair value adjustments relating to hedging instruments

181 (13)

(39) 19

309 (20)

(185) (1)

Fair value adjustments relating to hedging instruments transferred to financial expenses Tax on items reclassified to income statement

9 2

(2) -

9 4

(1) -

Items that will not be reclassified to income statement: Actuarial gains/(losses) Tax relating to items that will not be reclassified

(15) -

(1)

(139) 30

(15) -

Other comprehensive income, net of tax

164

(23)

193

(202)

Total comprehensive income

1,313

1,081

3,454

2,858

Total comprehensive income attributable to: Shareholders of DSV Panalpina A/S Non-controlling interests

1,303 10

1,083 (2)

3,457 (3)

2,864 (6)

Total

1,313

1,081

3,454

2,858

(DKKm) Profit for the period

Page 15 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Cash flow statement

YTD 2019

YTD 2018 excl. IFRS 16

7,431

4,668

86 (71) (1,155) (181) 47 (195) (743)

68 (70) (1,024) 37 (228) (675)

Cash flow from operating activities

5,219

2,776

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

(223) (693) 288 2,101 (63)

(332) (466) 630 (59) 23

Cash flow from investing activities

1,410

(204)

Free cash flow

6,629

2,572

Proceeds from borrowings Repayment of borrowings Interests paid on lease liabilities Repayment of lease liabilities

623 (826) (267) (1,989)

445 (285) -

Transaction with shareholders: Dividends distributed Purchase of treasury shares Sale of treasury shares Other transactions with shareholders

(423) (2,466) 692 (131)

(380) (2,579) 366 13

Cash flow from financing activities

(4,787)

(2,420)

Cash flow for the period

1,842

152

Cash and cash equivalents 1 January

1,158

1,348

Cash flow for the period Currency translation adjustments

1,842 (19)

152 (51)

Cash and cash equivalents end of period

2,981

1,449

6,629 (2,101) 181 (2,256)

2,572 59 -

2,453

2,631

(DKKm) EBITDA before special items Adjustments: Share-based payments Change in provisions Change in working capital, etc. Special items Interest received Interest paid Corporation tax, paid

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 Special items (restructuring costs) Repayment of lease liabilities and interest (IFRS 16 impact reversed) Adjusted free cash flow

Page 16 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Balance sheet – Assets 31.12.2018 30.09.2018 30.09.2019 excl. IFRS 16 excl. IFRS 16

(DKKm) Intangible assets Right-of-use assets Property, plant and equipment Other receivables Deferred tax assets

52,211 11,679 3,088 496 1,791

16,742 193 2,297 291 851

16,687 181 2,214 235 1,067

Total non-current assets

69,265

20,374

20,384

Trade receivables Contract assets Inventories Other receivables Cash and cash equivalents Assets held for sale

20,181 2,955 1,597 2,407 2,981 41

13,252 1,554 718 1,662 1,158 94

13,795 1,850 877 1,617 1,449 229

Total current assets

30,162

18,438

19,817

Total assets

99,427

38,812

40,201

Balance sheet – Equity and liabilities 31.12.2018 30.09.2018 30.09.2019 excl. IFRS 16 excl. IFRS 16

(DKKm) Share capital Reserves and retained earnings

242 50,600

188 14,373

188 15,139

DSV Panalpina A/S shareholders' share of equity

50,842

14,561

15,327

(190)

(29)

(33)

50,652

14,532

15,294

9,198 7,002 1,845 1,246 348

132 6,461 915 627 188

113 6,087 1,125 658 187

Total non-current liabilities

19,639

8,323

8,170

Lease liabilities Borrowings Trade payables Accrued cost of services Provisions Other payables Corporation tax

3,291 806 10,078 6,034 936 6,927 1,064

60 485 7,646 2,813 412 4,087 454

66 874 7,470 2,905 376 4,613 433

Total current liabilities

29,136

15,957

16,737

Total liabilities

48,775

24,280

24,907

Total equity and liabilities

99,427

38,812

40,201

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

Page 17 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Statement of changes in equity – 1 January - 30 September 2019 DSV Panalpina A/S shareholders' Retained share of earnings equity

Noncontrolling interests

Total equity

14,561 (593)

(29) (16)

14,532 (609)

14,484

13,968

(45)

13,923

296

3,265 (104)

3,265 192

(4) 1

3,261 193

-

296

3,161

3,457

(3)

3,454

56 (2) 54

(4) 3 2 1

86 276 (423) (2,462) 689 35,334 22 (160) 33,362

86 276 (423) (2,466) 692 35,390 22 (160) 33,417

(1) (16) (125) (142)

86 276 (424) (2,466) 692 35,374 (125) 22 (160) 33,275

242

(407)

51,007

50,842

(190)

50,652

DSV Panalpina A/S shareholders' Retained share of earnings equity

Noncontrolling interests

Total equity

Share capital

Reserves

Equity 1 January 2019 as previously reported Impact of accounting policy change*

188 -

(704) -

15,077 (593)

Equity 1 January 2019

188

(704)

Profit for the period Other comprehensive income, net of tax

-

Total comprehensive income for the period

(DKKm)

Transactions with owners: Share-based payments Tax on share-based payments Dividends distributed Purchase of treasury shares Sale of treasury shares Capital increase Capital reduction Addition/disposal of non-controlling interests Dividends on treasury shares Other adjustments Total transactions with owners Equity 30 September 2019

*Cumulative effect of applying IFRS 16 Leases - see Note 1 to the Interim Financial Statements

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

Share capital

Reserves

190

4,195

10,450

14,835

(26)

14,809

Profit for the period Other comprehensive income, net of tax

-

(193)

3,072 (15)

3,072 (208)

(12) 6

3,060 (202)

Total comprehensive income for the period

-

(193)

3,057

2,864

(6)

2,858

(2) (2)

(5) 2 2 (1)

68 139 (380) (2,574) 364 14 (2,369)

(1) (1)

188

4,001

11,138

68 139 (380) (2,579) 366 14 (2,372) 15,327

68 139 (381) (2,579) 366 14 (2,373) 15,294

(DKKm) Equity on 1 January 2018

Transactions with owners: Share-based payments Tax on share-based payments Dividends distributed Purchase of treasury shares Sale of treasury shares Capital reduction Dividends on treasury shares Total transactions with owners Equity 30 September 2018

Page 18 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

(33)

Notes

The weighted average incremental borrowing rate applied at 1 January 2019 was 3.43% for assets classified as land and buildings and 2.57% for assets classified as other plant and operating equipment.

1 Accounting policies 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. Except as stated below, accounting policies applied in preparing the Interim Financial Report are consistent with those applied in preparing the 2018 Annual Report. The 2018 Annual Report provides a full description of DSV Panalpina accounting policies. Changes in accounting policies DSV Panalpina A/S has implemented the latest International Financial Reporting Standards (IFRS) and amendments effective as of 1 January 2019 as adopted by the European Union. Of the standards and amendments implemented, only IFRS 16 Leases has had material impact on the Group’s financial statements. IFRS 16 Leases IFRS 16 Leases was implemented 1 January 2019. Implementation of IFRS 16 had a material impact on DSV Panalpina’s financial statements as most contracts previously classified as off-balance operating leases under IAS 17 have now been capitalised, recognising right-of-use assets and lease liabilities similar to previous practices for finance leases. Consequently, reported operating profits have increased, as previous operating lease expenses have been replaced by depreciation and interest expenses. However, the impact on profit for the period is neutral over time, but a timing effect does occur due to frontloading of interest expenses. Reported cash flow from operating activities has increased but is offset by an increased cash outflow from financing activities. Accordingly, total cash flow for the period is unchanged.

For existing leases classified as finance leases under IAS 17, the carrying amount of lease liabilities and right-of-use assets on 1 January 2019 equals the carrying amount of lease liabilities and lease assets on 31 December 2018. The following practical expedients have been applied in implementing the standard: •

Existing assessments of whether a contract contains a lease in accordance with IAS 17 and IFRIC 4 have been maintained. No reassessment of existing lease contracts has been made at the commencement date.



Contracts not previously determined to contain a lease in accordance with IAS 17 and IFRIC 4 have not been reassessed at the commencement date.



A single discount rate has been applied to appropriate groups of leases with similar characteristics.



Existing assessments of whether leases are onerous have been applied.

The following practical expedients have not been applied: •

Allowing non-recognition of right-of-use assets and related lease liabilities for existing leases ending within 12 months of 1 January 2019.



Exclusion of initial direct costs from the right-of-use asset measurement.



The use of hindsight.

Implementation impact Implementation of the standard has impacted the 2019 opening balance as outlined below: Increase (+) Decrease (-)

Change

193 851 14,373 192 1,662 4,087

+ + + -

9,991 138 593 10,704 26 8

Reclassifications of financial lease assets (IAS 17): Property, plant and equipment 2,490 Borrowings 7,138

-

193 192

(DKKm)

Application and practical expedients applied IFRS 16 has been applied following the modified retrospective approach with the cumulative effect of applying the standard recognised in the opening balance of retained earnings. Comparatives have not been restated and are presented in accordance with the previous IFRS standard on leases (IAS 17 and IFRIC 4) – as disclosed in the 2018 Annual Report. Rightof-use assets and lease liabilities have been presented as separate line items in the balance sheet, which has led to minor reclassifications of comparative figures. For existing leases classified as operating leases under IAS 17, lease liabilities have been measured at the present value of the remaining lease payments discounted using an appropriate incremental borrowing rate at 1 January 2019. Right-of-use assets have been measured as if IFRS 16 had been applied since the lease commencement date and discounted using an appropriate incremental borrowing rate on 1 January 2019.

Page 19 of 24

Implementation impact : Right-of-use assets Deferred tax assets Reserves and retained earnings Lease liabilities Other receivables Other payables

31 December 2018 (IAS 17)

Recognised right-of-use assets have been classified within the following asset categories: (DKKm) Land and buildings Other plant and operating equipment Total right-of-use assets recognised

1 January 2019 8,893 1,098 9,991

Differences between the operating lease commitments on 31 December 2018, disclosed in the 2018 Annual Report, and

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

3 Management judgements

lease liabilities recognised in the opening balance on 1 January 2019 in accordance with IFRS 16 specify as follows:

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.

(DKKm) Operating lease commitments 31 December 2018

12,020

Discounted using incremental borrowing rate at 1 January 2019

(1,135)

Finance lease liabilities recognised at 31 December 2018

223

Short-term and low-value leases recognised as an expense on a straight line basis

(404)

Lease liabilities recognised 1 January 2019

By their nature, management judgements and estimates include a degree of uncertainty, and actual results may therefore deviate from the judgements and estimates on the reporting date.

10,704

Current /non-current classification: Non-current liabilities

8,135

Current liabilities

2,569

Judgements and estimates are continuously evaluated, and the effects of any changes are recognised in the relevant period.

2 Adjusted financial ratios

4 New accounting regulations

Due to the impact of IFRS 16, the following financial ratios for Q3 2019 have been adjusted on a pro forma basis: ROIC before tax: DKK 9,500 million have been added to invested capital at the beginning of the period.

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 2019 Interim Financial Statements.

Gearing ratio: EBITDA for 6 months of 2018 has been raised by DKK 2,145 million (corresponding to a full-year pro forma EBITDA impact of DKK 2,860 million).

None of these are currently expected to carry any significant impact on the DSV Panalpina Financial Statements when implemented.

Other financial highlights are presented in line with the definition on page 81 of the 2018 Annual Report.

5 Segment information Air & Sea

Road

YTD 2019

YTD 2018 excl. IFRS16

Condensed income statement Revenue Intercompany revenue Divisional revenue

32,606 468 33,074

Direct costs Gross profit

Solutions

YTD 2019

YTD 2018 excl. IFRS16

26,682 452 27,134

22,485 1,148 23,633

24,678

20,243

8,396

6,891

Other external expenses Staff costs

1,404 3,320

Operating profit before depreciation, amortisation and special items

(DKKm)

Depreciation of right-of-use assets Depreciation and amortisation of owned assets Operating profit before special items

Other activities, nonallocated items and eliminations

YTD 2019

YTD 2018 excl. IFRS16

22,201 1,149 23,350

9,413 248 9,661

19,009

19,353

4,624

3,997

1,381 2,649

793 2,123

3,672

2,861

270 91

Total

YTD 2019

YTD 2018 excl. IFRS16

YTD 2019

YTD 2018 excl. IFRS16

9,138 238 9,376

75 (1,864) (1,789)

87 (1,839) (1,752)

64,579 64,579

58,108 58,108

6,093

7,178

(1,871)

(1,708)

47,909

45,066

3,568

2,198

82

(44)

16,670

13,042

979 2,012

796 951

696 847

(878) 730

(796) 606

2,115 7,124

2,260 6,114

1,708

1,006

1,821

655

230

146

7,431

4,668

5 60

643 86

9 89

978 170

9 160

47 276

224

1,938 623

23 533

3,311

2,796

979

908

673

486

(93)

(78)

4,870

4,112

35,439 36,471

21,760 24,657

18,116 13,370

15,964 9,840

13,406 12,046

8,159 6,895

32,466 (13,112)

(5,682) (16,485)

99,427 48,775

40,201 24,907

Condensed balance sheet Total assets Total liabilities

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INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

6 Revenue Sale of services and geographical segmentation are specified in the tables below:

EMEA

(DKKm)

Q3 2019

Air services Sea services Road services Solutions services Divisional revenue Non-allocated items and eliminations

Americas

Q3 2018 excl. IFRS16

Q3 2019

APAC

Q3 2018 excl. IFRS16

Q3 2019

Eliminations

Q3 2018 excl. IFRS16

4,257 5,100 7,803 2,518

2,535 3,537 7,796 2,705

2,571 2,198 649 675

1,726 1,550 774 499

2,469 1,514 310

1,681 1,193 261

19,678

16,573

6,093

4,549

4,293

3,135

Q3 2019 (1,945) (2,183) (754) (38)

Q3 2018 excl. IFRS16 (1,048) (1,549) (758) (48)

Total revenue

EMEA

Americas

YTD 2019

YTD 2018 excl. IFRS16

Air services Sea services Road services Solutions services

9,211 12,215 23,899 7,133

Divisional revenue Non-allocated items and eliminations

52,458

(DKKm)

APAC

YTD 2019

YTD 2018 excl. IFRS16

7,666 9,858 23,434 7,386

6,335 5,443 2,008 1,789

48,344

15,575

Eliminations

YTD 2019

YTD 2018 excl. IFRS16

4,837 4,192 2,197 1,413

5,418 3,802 853

4,702 3,336 721

12,639

10,073

8,759

Total

Q3 2019

Q3 2018 excl. IFRS16

7,352 6,629 7,698 3,465

4,894 4,731 7,812 3,417

25,144 (623)

20,854 (617)

24,521

20,237

Total

YTD 2019

YTD 2018 excl. IFRS16

YTD 2019

YTD 2018 excl. IFRS16

(4,450) (4,900) (2,274) (114)

(3,496) (3,961) (2,281) (144)

16,514 16,560 23,633 9,661

13,709 13,425 23,350 9,376

66,368 (1,789)

59,860 (1,752)

64,579

58,108

Total revenue

separable from the lease contract are also accounted for following same principle.

7 Leases Accounting policies Whether a contract contains a lease is assessed at contract inception. For identified leases a right-of-use asset and corresponding lease liability are recognised on the lease commencement date. Upon initial recognition, the right-of-use asset is measured at cost corresponding to the lease liability recognised, adjusted for any lease prepayments or directly related costs, including dismantling and restoration costs. The lease liability is measured at the present value of lease payments discounted using the interest rate implicit in the lease contract. In cases where the implicit interest rate cannot be determined, an appropriate incremental DSV Panalpina borrowing rate is used.

Leases 2019 Right-of-use assets classified as land and buildings mainly relate to leases of warehouses, terminals and office buildings, whereas assets recognised as other plant and operating equipment mainly relate to leases of trailers, trucks, company cars, forklifts, IT hardware and other office equipment. Land and buildings leases normally have a lease term of up to 10 years, whereas leases of other plant and operating equipment normally have a lease term of up to 5 years. Classification of right-of-use assets: YTD 2019

At subsequent measurement, the right-of-use asset is measured less accumulated depreciations and impairment losses and adjusted for any remeasurements of the lease liability. Depreciations are done following the straight-line method over the lease term or the useful life of the right-of-use asset, whichever is shortest. The lease liability is measured at amortised cost using the effective interest method and adjusted for any remeasurements or modifications made to the contract.

Land & Buildings

Other plant and operating equipment

Total

Opening balance 1 January 2019 Impact of accounting policy change Addition from business combinations Addition for the period Disposals for the period Depreciations for the period Currency translation adjustments

14 8,893 1,765 1,321 (187) (1,540) (42)

179 1,098 470 191 (86) (398) 1

193 9,991 2,235 1,512 (273) (1,938) (41)

Carrying amount at 30 September 2019

10,224

1,455

11,679

(DKKm)

Right-of-use assets and lease liabilities are not recognised for low value lease assets or leases with a lease term of 12 months or less. These are recognised as an expense on a straight-line basis over the term of the lease. Any service elements

Page 21 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

8 Business combinations On 19 August 2019, DSV acquired 100% of the shares in Panalpina Welttransport (Holding) AG (Panalpina) via a public exchange offer, thereby obtaining control of the company. About Panalpina Panalpina was one of the world’s leading providers of supply chain solutions with its core services comprising Air Freight, Ocean Freight, and Logistics and Manufacturing. Panalpina generated revenues of approximately DKK 40 billion in 2018 and operated a global network with some 500 offices in more than 70 countries and approximately 14,500 people worldwide. Strategic rationale and synergies The combination with Panalpina is expected to increase DSV’s annual revenue by close to 50%, which will rank the combined company in the industry top four with a pro forma revenue of approximately DKK 118 billion, a combined workforce of more than 60,000 employees and own operations in more than 90 countries. DSV and Panalpina are a strong match with many potential synergies as a result of similarities in business models, services and strategies. Additionally, scale remains one of the key competitive advantages in freight forwarding with significant operational and commercial benefits. The DSV Air & Sea division will be substantially strengthened and will be among the largest providers globally with close to 3 million containers (TEUs) and more than 1.5 million tonnes of air freight transported yearly. Likewise, the DSV Solutions division will be strengthened and Panalpina will bring additional warehousing capacity of more than 500,000 square metres. DSV’s road network will be a strong cross selling opportunity to Panalpina’s existing service offerings. Furthermore, the combination will increase DSV’s activities in the APAC and Americas regions, thereby further extending DSV’s geographical reach. Consideration transferred The consideration transferred for the shares in Panalpina was made in DSV equity instruments by offering 2.375 ordinary DSV shares for one Panalpina share. A total of 55,526,507 DSV shares was exchanged at a fair value of DKK 35,270 million based on the acquisition date closing price of DKK 635.20 on Nasdaq Copenhagen. The total consideration transferred amounts to DKK 35,983 million. Adjusted for the fair value of cash and cash equivalents acquired of DKK 1,975 million, the net consideration amounts to DKK 34,008 million.

Fair value of acquired net assets and recognised goodwill As accounting for the Panalpina acquisition is ongoing, net assets, goodwill, and contingent assets and liabilities recognised at the reporting date are to some 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 valuation of IT systems, customer relationships and various other provisions. In addition, other minor adjustments may be applied to the various net asset categories as full alignment to DSV accounting policies is being finalised. The provisional fair value of identified net assets and goodwill recognised comprises: Assets identified at fair value: Customer relationships Other intangible assets Right-of-use assets Property, plant and equipment Trade receivables Contract assets Inventories Deferred tax assets Other receivables Cash and cash equivalents Total Assets Liabilities identified at fair value: Lease liabilities Borrowings Provisions Pensions and similar obligations Trade payables Accrued cost of services Deferred tax liabilities Corporation tax Other payables Total liabilities Non-controlling interests share of acquired net assets Total net assets acquired Fair value of total consideration transferred Goodwill arising from acquisitions

(DKKm) 761 7 2,219 653 6,655 1,166 626 620 1,975 14,682

2,219 1,109 1,187 787 2,581 3,216 195 535 1,547 13,376

(139) 1,445 35,970 34,525

Earnings impact The Panalpina acquisition has contributed revenues of DKK 4,453 million and operating profit before special items of DKK 61 million to the Group for the period 19 August 2019 to 30 September 2019.

The fair value of acquired trade receivables, contract assets and other receivables amounts to DKK 8,441 million. Collectability of receivables has been assessed based on credit assessment policies. Expected credit losses in total of DKK 300 million has been provided for as trade receivables.

If the acquisition had occurred on 1 January 2019, consolidated pro forma revenue and operating profit before special items for the period ended 30 September 2019 of the combined DSV Panalpina Group would have been approximately DKK 90 billion and DKK 5.3 billion, respectively.

Goodwill recognised mainly relates to the expertise and insight of the acquired workforce and expected synergies from the integration into the DSV Panalpina Group. Recognised goodwill is non-deductible for tax purposes.

Transaction costs Total transaction costs recognised until 30 September 2019 amount to DKK 105 million, of which DKK 92 million have been recognised as special items costs in the income statement and DKK 13 million recognised in equity relating to the issue of DSV shares used for settling the public exchange offer. Page 22 of 24

Fair value measurement Material net assets acquired for which significant management judgements have been applied are recognised using the following valuation techniques:

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Property, plant and equipment Fair value of property, plant and equipment relating to material individual assets is measured based on external market valuations carried out by professional appraisers. Customer relationships Customer relationships have been measured using a multiperiod excess earnings model (MPEE) in which the present value of future cash flows from recurring contract customers expected to be retained after the date of acquisition have been valuated using a peer group WACC of 6.75% as discount rate. In total, customer relationships amounting to DKK 761 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.

Page 23 of 24

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 receivables- and payables is generally very short and the discounted effect therefore immaterial. Financial liabilities Fair value of acquired publicly traded company bonds has been measured at market value at the acquisition date. 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, and as such the credit enhancement of the Group has been applied in the valuation.

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Statement by the Board of Directors and the Executive Board The Board of Directors and the Executive Board have today considered and adopted the Interim Financial Report of DSV Panalpina A/S for the nine-month period ended 30 September 2019. 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 DSV Panalpina Group's assets, equity, liabilities and financial position on 30 September 2019 and of the results of the Group's activities and the cash flow for the nine-month period ended 30 September 2019. 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 2018.

Hedehusene, 1 November 2019

Executive Board:

Jens Bjørn Andersen CEO

Jens H. Lund CFO

Board of Directors:

Thomas Plenborg Chairman

Jørgen Møller Deputy Chairman

Annette Sadolin

Robert S. Kledal

Marie-Louise Aamund

Beat Walti

Page 24 of 24

INTERIM FINANCIAL REPORT – COMPANY ANNOUNCEMENT NO. 799 – 1 November 2019

Birgit W. Nørgaard