DSV Annual Report 2022
28
DSV Annual Report 2022
Financial and non-financial performance
= III
The GIL acquisition had a limited impact on the Road division, but it did add
road activities in the Middle East, which continued to perform well in 2022.
We have continued our work to help customers optimise their supply chains
and reduce their carbon footprints. This includes promoting our Green
Logistics services, where we are seeing good interest - especially in North-
ern Europe and among large customers. Longer term, we are involved in
strategic partnerships with truck manufacturers, and we are testing differ-
ent technologies and equipment. This includes electric trailers, which have
the potential to reduce CO2 emissions from transport by up to 40%.
Results
DSV Road revenue was DKK 41,507 million in 2022 (2021: DKK 35,416
million) a growth of 16.4%. This was driven mainly by higher freight
rates and higher fuel surcharges. For international transports and busi-
ness-to-business shipments, we achieved growth year-on-year. Busi-
ness-to-consumer shipments were down, mainly due to lower activity for
customers within e-commerce and construction/do-it-yourself and simi-
lar sectors. In a market with record-high rate increases and cost inflation,
the division has tracked developments closely and has generally been able
to adjust prices and provide capacity to our customers.
-
The division has more than 85% of its revenue in Europe and saw good
performance across most countries in this region especially in our
German operations. Our still relatively small operation in North America
achieved the highest organic growth rate in 2022, and adding GIL's road
activities also contributed to growth.
Gross profit was DKK 7,911 million in 2022 (2021: DKK 7,095 million),
an annual increase of 11.0%.
The division's gross margin was 19.1% for 2022, compared to 20.0% for
2021. Capacity shortages, higher fuel prices and general cost inflation
- partly due to the EU Mobility Package - led to higher direct freight cost
for the division. The pass-through element of cost inflation had a negative
impact on the gross margin.
EBIT before special items was DKK 2,040 million in 2022, compared to DKK
1,857 million in 2021. This 9.2% increase was driven by the gross profit
growth and solid performance across all regions, except for South Africa
which was loss-making in 2022. The conversion ratio came to 25.8% for
2022, compared to 26.2% for the same period last year. In an environ-
ment with high inflationary pressure on the cost base, the division has
maintained focus on productivity and cost management.
Net working capital (NWC) was negative DKK 586 million at the end of the
year, against negative DKK 2,133 million at year-end 2021. This development
was mainly a result of pre-payments related to property projects included in
NWC at the end of 2021.
Return on invested capital was 20.1% in 2022 and was on level with last year.
Focus areas in 2023
We expect a competitive market in 2023, with activity levels still impact-
ed by the economic slowdown. During the year, we will monitor activity
levels closely and adjust capacity when needed. Our target of gaining
market shares across geographies remains unchanged.
Across our network, we will continue to develop our services and systems,
supporting our customers' need for supply chain visibility. We take more
than 90% of customer bookings digitally, and we aim to enhance data
quality in these bookings to improve customer service quality and our own
productivity. We will also continue to promote and develop our Green
Logistics services, and we expect an increasing demand for these services.
We continue to see North America as an attractive market with strong
potential for DSV Road, both organically and through M&A.
The Road Way Forward project continues in 2023. This includes rolling out
our transport management system in more countries and continuing devel-
opment of our European groupage services - aiming for greater geographi-
cal network coverage and improved performance on first/last mile distribu-
tion. Based on the network improvements we have already made, we ex-
pect growth in international groupage shipments in 2023.
Revenue
(DKKm)
48,000
40,000
32,000
24,000
16,000
8,000
0
2018
2019
2020
2021
2022
Gross profit
(DKKm)
10,000
8,000
6,000
4,000
2,000
Gross profit
Conversion ratio →→
%
40
35
30
25
20
15
10
5
0
0
2018
2019
2020
2021
2022
EBIT
Operating margin →
%
10
8
6
500
0
IT
4
2
0
2018
2019
2020
2021
2022
EBIT before special items
(DKKm)
2,500
2,000
1,500
1,000View entire presentation