DSV Annual Report 2022

33 DSV Annual Report 2022 Corporate governance and shareholder information = III IT security - System breakdowns and cyberattacks Risk description IT systems, networks and related processes are crucial to our day-to-day operations - from the delivery of our core logistics services to our analytic capabilities and reporting to the financial markets. This makes us vulnerable to system breakdowns, cyberattacks and failed IT implementations. A breakdown or an attempt to cause damage to DSV, our customers, sup- pliers or partners through unauthorised access, destruction, corruption or manipulation of data or systems could pose a significant risk to the Group. Mitigation strategies Consolidation, centralisation and standardisation of our systems and processes are cornerstones of our IT strategy and security setup. When integrating acquired companies, we migrate these to our IT platform as quickly as possible. The Group is focused on IT security and awareness, and we conduct regular audits and continu- ous analyses of current controls and regular security updates. Migration to cloud-based solu- tions, continuous cyber awareness training across the organisation, multi-factor authentication, anti-virus and patch management and disaster recovery training are among the measures implemented to mitigate the potential impact of this risk. Our global IT organisation oversees IT risks and is responsible for ensuring infrastructure pre- paredness. The Executive Board and the Audit Committee actively monitor cyber risks and the effectiveness of our key IT controls through reporting and regular meetings with the IT and compliance teams. Risk assessment In 2022, we have experienced stable performance from our IT and security plat- forms both in terms of operational performance and in terms of mitigating cyber- attacks, phishing attempts and other IT security risks. The geopolitical situation and increasing digitalisation of our industry and workplaces have accelerated the risk of targeted cyberattacks. This trend is likely to continue, and our strategy for IT security is already based on this. To mitigate the increased risk, we maintain a high security level, and we have among other initiatives - expanded the IT security training of employees. During 2022, the Agility's Global Integrated Logistics business (GIL) operational systems were successfully migrated to the DSV platform, reducing last year's height- ened exposure level. Everything considered, the IT risk of the Group remains on par with last year, with a slight increase in risk of occurrence. Macroeconomy - Recession and changes to global supply chains Risk description An economic recession triggered by, e.g., geopolitical conflicts, rising infla- tion and interest rates, distortion of the financial markets or a pandemic will have an impact on our activity levels and, consequently, on our finan- cial results. Similarly, protectionist measures enacted by the major world economic powers can also have a negative impact on global trade. Some restrictions may be counterbalanced by increasing domestic activities and, as a result, sale of other logistics services. Finally, changing industry and consumer patterns which lead to lower glob- al trade volumes or shortened logistic chains (e.g., because of increasing environmental awareness or industries bringing production closer to home to mitigate supply chain exposures) is also something we monitor closely, although we have yet to see a material impact of this on our business. Mitigation strategies To diversify our geographical exposure, we have for several years focused on organic and acquisitive growth outside Europe, which has historically been our main market. The acquisitions of UTI, Panalpina and GIL have significantly strengthened our network in Americas, APAC and MENA. Our asset-light approach implies that the majority of our terminals, warehouses and operational equipment are leased on short- to medium-term contracts, with the average duration closely monitored to accommodate capacity requirements. This allows us to quickly adapt to any po- tential slowdown in individual markets. Certain global supply chains are gradually changing, and we continuously adapt our network and service offerings. This way, when production is established in new markets and dual sourcing strategies are applied, we are ready to support our customers. Risk assessment During 2022, the global economy and trade volumes have slowed down. Going into 2023, we are facing lower demand for transport services. This slowdown is already in- cluded in our financial guidance for the year - but, obviously, there is uncertainty related to the development both in terms of timing and severity. We maintain our long-term assumption of 2-3% annual growth in global economy and transport volumes growing in line with this. Navigating economic downturns and the resulting fluctuations in demand 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 very purpose in mind. As a consequence of the economic slowdown, our macroeconomic risk has increased from last year.

View entire presentation