DSV Annual Report 2022

5 DSV Annual Report 2022 Introduction = III Strong financial performance 2022 was a good year for DSV. I am proud of the results we have achieved for the year and we also made good progress on our long- term strategic ambitions. Our gross profit for the year amounted to DKK 52.1 billion (+33.3%), and operating profit before special items was DKK 25.2 billion (+48.0%). Our adjusted free cash flow for 2022 amounted to DKK 22.8 billion (+163.4%) and ROIC improved by 550bp to 25.1%. Read more about our Group results on pages 19-22. The significant supply chain disruptions increased the value of our services and had a positive impact on our financial performance for 2022. As the freight markets gradually normalise and the general economic slowdown continues, we expect a significant decline in earnings for 2023. This development is reflected in our outlook. Navigating macroeconomy and geopolitics COVID-19 had a lasting effect on our industry and global supply chains. Over the past two years, we have managed to adapt to the challenges it created, mitigate disruptions and offer our customers robust logistics solutions. Although today the world seems to have moved on from COVID-19, the pandemic made a significant impact on 2022 and still casts its shadows across our industry. Market volatility persists. At the start of 2022, capacity was tight, freight rates reached unprecedented highs, and then plummeted. In the second half of 2022, we have been in a period of economic slowdown and declining transport volumes across most markets. Several factors caused the current slump - normalisation of consumer behaviour after the pandemic, the ongoing energy crunch and inflationary levels not seen in decades, to name a few. Not all geographies and indus- tries have been affected the same - the Middle East region and the healthcare and energy industries are examples of more resilient areas. The volatile macroeconomic environment in 2022 was further fuelled by Russia's invasion of Ukraine. In response, we divested or closed down our operations in Russia and Belarus. In response to Ukraine's humanitarian crisis, we have donated transport and logistics services, food and supplies, and in some instances, our staff have opened their homes to take in families fleeing the war. Navigating market volatility and tough challenges is not new to DSV. Our cost discipline, focus on keeping net working capital under control, strong capital structure and scalable asset-light business model are all designed with this purpose in mind. A stronger company We integrated GIL within a year - our fastest integration to date. To bring together two large and complex organisations across multiple countries and divisions is a considerable undertaking, and we are very happy with the outcome. Lessons learnt from previous integrations, cultural synergies between our two companies and the close collaboration all contributed to a successful integration. We are a different company today compared to only a few years ago. Our journey of successful acquisitions and integrations has transformed us into a top three player in our industry. We have added new highly skilled colleagues to our teams, and by joining forces, we have a more comprehensive service offering, greater scale and a stronger global net- work. On top of this, we have worked to develop our digital production platforms and create more transparent supply chains. That means we are now even better placed to support growing customer needs. Our organisation and market position are already strong, but M&A remains an important part of our strategy, and we will continue to monitor the market in search of value creation opportunities. Committing to net-zero by 2050 In 2022, we raised our ambitions and took additional steps to create a more sustainable business. On the environment, we recalculated our 2019 CO₂ emission baseline to reflect our larger size after the GIL inte- gration. We implemented an internal CO2 fee to support new sustainability initiatives and innovation with funding. But most importantly, we committed to net-zero emissions across our operations by 2050. To achieve our sustainability ambitions, we also changed our organisation in 2022 and established a new Operational Sustainability Team headed by our COO. Its purpose is to connect our operational teams directly to our sustainability tar- gets. This will more concretely embed sustainability into our operations and help us drive innovation and implement environmental and climate initiatives. We are determined to reach our long- and mid-term targets, but we know we are at the start of a long and complex net-zero journey. We cannot get there alone; we must collaborate closely with our customers, suppliers and other stakeholders across the industry. And ultimately, we depend on continued technological development in our industry. Success built by our people I have always believed that DSV is a people business, and I will never grow tired of celebrating our employees' hard work and contributions. They are central to our current and long-term success. Operating in the volatile and challenging environment of recent years has rein- forced the importance of our people and their outstanding efforts in supporting our customers - making our success during this period even more remarkable. A huge thanks to all of them for their amazing work and team spirit. Whatever market challenges persist in 2023 and beyond, we are optimistic about the future and are committed to keeping supply chains flowing in this world of change. Jens Bjørn Andersen Group CEO, DSV A/S

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