DSV Annual Report 2022

18 DSV Annual Report 2022 Strategy and financial targets Capital structure and allocation ROIC before tax (%) = III ROIC before tax incl. goodwill and customer relationships Goodwill and customer relationships ■ Invested capital excl. goodwill and customer relationships ■ 120,000 30 100,000 80,000 60,000 40,000 20,000 0 יויו 25 20 15 10 5 0 2018 2019 2020 2021 2022 Capital structure The aim of DSV's target capital structure is to ensure: sufficient financial flexibility to meet our strategic objec- tives; and a robust financial structure to maximise the return for our shareholders. Our target financial gearing ratio is below 2.0 x EBITDA before special items. The ratio may exceed this level following signi- ficant acquisitions. Capital allocation policy Our free cash flow allocation prioritisation remains unchanged: 1. We pay net interest-bearing debt in periods when the financial gearing ratio is above target range. As a Group, we have a track record of successful company inte- grations - the most recent chapter in this story being the acquisi- tion of Agility's Global Integrated Logistics business (GIL) in 2021. We have been able to create increasing return on invested capital (ROIC) over time. However, large acquisitions have initially diluted ROIC before tax. Capital structure Group Management continuously monitors whether the capital structure is in line with the targets, and excess capital is distribut- ed to shareholders through share buybacks and dividends. Distribution of capital (DKKm) 25,000 Dividends Share buyback ■ Total 21,633 Total 18,761 | 20,313 + 17,841 Adjustments to the capital structure are usually announced in connection with the release of quarterly financial reports and are made primarily through share buybacks. 20,000 15,000 2. We make value-adding investments in the form of acqui- sitions or development of the existing business. Dividend policy 3. Our distribution to the shareholders takes place through share buybacks and dividends. DSV aims to ensure an annual dividend pay-out ratio of approx- imately 10-15% of our net profit. 10,000 Total 4,541 Total 5,311 Total 5,619 Value-adding investments DSV pursues an active acquisition strategy. Our acquisitions have created substantial value for shareholders over the years and have also contributed to consolidating an otherwise frag- mented industry. Proposed dividend for 2022 amounts to DKK 6.50 per share (2021: 5.50 per share). The proposed dividend for 2022 is equivalent to 8.1% of net profit. The lower dividend payout- ratio for 2022 reflects the extraordinary result for 2022 and expected normalisation of earnings in 2023. 5,000 4,888 5,031 4,161 380 423 588 920 1,320 0 2018 2019 2020 2021 2022

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