DSV Annual Report 2022
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DSV Annual Report 2022 Corporate governance and shareholder information
= III
M&A Acquisitions and integration failure
-
Risk description
Growth through strategic acquisitions is fundamental to our corporate
strategy and has been for many years.
Acquisitions always involve the risk of unsuccessful integration of the
acquired company, which could result in cost synergies, strategic advan-
tages or economies of scale being delayed or not fully realised.
Deciding on and carrying out the wrong acquisition may also be costly and
take up valuable resources that could have been spent on other potential
acquisition candidates.
Mitigation strategies
We have a history of successful integration of acquired companies and realisation of expected
synergies. This rests on several factors. First of all, we stress the importance that any potential
acquiree matches our business model
Our IT, reporting and operational systems are designed to be scalable and to accommodate
effective integration of acquired companies.
Large integrations are headed by an integration board, and the activities are organised into work
streams (operational, commercial, financial, IT, legal, tax, etc.). The integration of operational ac-
tivities is anchored with and led by local management teams, based on guidance from Group Man-
agement. Local ownership ensures that acquired activities are integrated, with due consideration
of local legislation, market conditions and cultures.
Risk assessment
A little over a year after the takeover date, the integration of GIL was finalised in
2022. The integration of operations, IT and back-office functions across close to
60 countries was carried out according to our plans and in line with our financial
business case.
M&A remains an important part of our strategy; this can lead to both large and small
acquisitions and integrations in the coming years. We continue to apply our strong
governance structure around M&A, but the financial risk related to each transaction
will depend on the size and type of the acquired company.
Due to the completed integration of GIL, the M&A risk has decreased compared to
last year.
Technology - Disruption and technological adoption
Risk description
As with most industries, freight forwarding undergoes continuous techno-
logical developments, while also being exposed to gradual changes in the
competitive landscape, driven by both existing players and new entrants
to the market.
Currently, we see digitalisation and automation of processes (quoting,
booking, tracking, reporting and billing) and the increasing focus on sus-
tainability as the most significant developments impacting the freight
forwarding industry in the coming years. These developments provide an
opportunity to optimise workflows and increase productivity, while also
providing higher levels of service and product offerings to our customers.
Failure to keep up with, adapt to and utilise these new technological op-
portunities as well as tackle the competitive challenges they bring
- will lead to gradual loss of market share and earnings.
Mitigation strategies
Central to our mitigation strategy is the monitoring of the logistics market, our customers'
needs and emerging technologies that could impact and improve our operations or services.
Strategic planning, innovation and continued development of our digital and physical infrastruc-
ture are anchored with our COO. Based on strategic roadmaps for each business area, we focus
on developing our service catalogues, systems and operational procedures to ensure that we
have a strong and competitive product offering that meets customer needs.
The aim of our strategy is to ensure that we can continue to benefit from our logistics exper-
tise, scale and global network as a classic freight forwarder, while increasing our digital com-
petences and utilising the benefits of technology.
Risk assessment
We believe that we are well positioned in our industry within these areas, and that
our current development and strategic plans will ensure that we will remain so in
the coming years.
In 2022, we have continued to invest in and develop our IT platforms across our
service offerings. The COO function was established in 2021 and has been further
strengthened during 2022.
Consequently, we assess that our technology risk has remained largely unchanged
from last year.
For additional descriptions of our current technology focus areas, please see
'A responsive approach to technology and digitalisation' on page 16.View entire presentation