DSV Annual Report 2022
67
DSV Annual Report 2022
Consolidated financial statements 2022
4.1 Equity continued
Reserves
-
Reserves as presented in the statement of changes in equity comprise
treasury share reserve, hedging reserve and translation reserve, as speci-
fied on the previous page.
Treasury share reserve
The reserve comprises the nominal value of treasury shares. The difference
between the market price paid and the nominal value plus dividends on
treasury shares is recognised directly as retained earnings in equity.
Treasury shares are bought to meet obligations under the Company's incen-
tive schemes and to adapt the capital structure.
The reserve is a distributable reserve.
Hedging reserve
The reserve comprises the fair value of hedging instruments qualifying for
hedge accounting.
Hedge accounting ceases when the hedging instrument matures or if a
hedge is no longer effective.
Translation reserve
The reserve comprises foreign currency translation arising on the transla-
tion of net investments and related hedging in entities with a functional
currency other than DKK.
The reserve is dissolved upon disposal of entities.
4.2 Capital structure and
capital allocation
Capital structure
= III
The capital structure of DSV is intended to maintain financial stability, opti-
mise cost of capital and to ensure financial readiness allowing to act on
business opportunities as they present themselves. The gearing ratio was
1.0 at 31 December 2022 (2021: 1.4). The target gearing ratio is below
2.0 x EBITDA, but may exceed this level following significant acquisitions.
Capital allocation
The Group aims to spend its free cash flow in the following order of priority:
1. Repayment of net interest-bearing debt in periods when the financial
gearing ratio is above target;
2. Value-adding investments in the form of acquisitions or development of
the existing business;
3. Distribution to the Company's shareholders by means of share buybacks
and dividends.
2022
2021
Treasury shares
Market value % of share capital
(DKKm) at 31 December
Nominal value
(DKKm)
Market value % of share capital
(DKKm) at 31 December
Nominal value
(DKKm)
Net interest-bearing debt
Portfolio, beginning of year
New shares issued
8,921
2.4%
5.8
3,972
1.7%
3.9
The Group increased its net interest-bearing debt in 2022 by DKK 625
million (2021: increased by DKK 11,056 million). Net interest-bearing
debt can be specified as follows:
24,495
6.7%
16.0
Cancellation of treasury shares
(24,474)
(9.6%)
(21.0)
(5,863)
(2.5%)
(6.0)
Net interest-bearing debt (DKKm)
2022
2021
Lease liabilities
16,767
15,288
Portfolio, adjusted for
Interest-bearing borrowings
22,206
21,472
amount of shares
(15,553)
(6.9%)
(15.2)
22,604
5.8%
13.9
Pensions and other post-employment benefit plans
1,183
908
Purchased during the year
20,313
8.5%
18.6
17,841
5.5%
13.3
Other receivables
(126)
(124)
Consideration for acquisition
(29,571)
(8.0%)
(19.3)
Cash and cash equivalents
(10,160)
(8,299)
Sold during the year
(1,601)
(0.6%)
(1.3)
(784)
(0.9%)
(2.1)
Net interest-bearing debt
29,870
29,245
Value adjustment
(820)
(1,169)
Portfolio, end of year
2,339
1.0%
2.1
8,921
2.4%
5.8View entire presentation