STOCK EXCHANGE ANNOUNCEMENT NO. 295
Q1 2008 Interim Financial Report (1 January - 31 March 2008) and announcement
of new share buy-back programme
Major key figures of the Q1 Interim Financial 2008 Report for the period 1
January - 31 March 2008
• Revenue amounted to DKK 8,519 million.
• Gross profit came to DKK 1,792 million.
• Operating profit before special items came to DKK 385 million.
• Profit before tax amounted to DKK 734 million.
• DSV's share of the profit for the period amounted to DKK 640 million, and the
diluted adjusted earnings per share for the period amounted to DKK 1.1. Diluted
adjusted earnings per share for the year amount to DKK 4.6.
• Free cash flow for the period adjusted for the acquisition of enterprises
amounted to a negative DKK 424 million.
Group Management considers the results for the first three months of 2008 very
satisfactory.
Outlook for 2008
DSV maintains the expectations for the last nine months of 2008 announced in
the 2007 Annual Report.
New share buy-back
DSV will launch a new share buy-back for DKK 300 million according to the 'safe
harbour' method.
Yours sincerely,
DSV
Financial highlights
FINANCIAL HIGHLIGHTS
Budget
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Realised
01.01.08-31.03.08
Income statement (DKKm)
Revenue 8,020 8,493 8,519
Gross profit 1,737 1,885 1,792
Operating profit before special items (EBITA) 324 370 385
Special items, net 440 4 436
Operating profit (EBIT) 763 374 821
Net financial expenses 66 57 87
Profit before tax 697 317 734
DSV A/S shareholders' share of net profit for the period 625 214 640
Balance sheet (DKKm)
Balance sheet total 16,136 15,477
Equity 3,918 3,735
Net working capital 842 811
Net interest-bearing debt 4,841 4,973
Invested capital including goodwill and customer relationships 9,150 9,065
Cash flows (DKKm)
Operating activities 176 (242)
Investing activities (38) 694
Free cash flow 138 452
Adjusted free cash flow 138 (424)
Financial ratios (%)
Gross margin ratio 22.2 21.0
EBITA margin 4.4 4.5
EBIT margin 4.4 9.6
Effective tax rate 28.7 12.8
ROIC including goodwill and customer relationships 16.4 16.9
Return on equity 23.9 68.4
Solvency ratio 23.3 24.0
Share ratios
Diluted adjusted earnings per share of DKK 1 for the period 1.1 1.1
Diluted adjusted earnings per share of DKK 1 for the year 4.4 4.6
Adjusted profit (DKKm) 221 218
Earnings per share of DKK 1 4.3 13.7
Net asset value per share of DKK 1 19.1 20.1
Number of shares issued at 31 March ('000) 201,500 201,500
Number of shares at 31 March ('000) 197,370 185,236
Average number of shares ('000) 198,770 186,862
Average number of fully diluted shares ('000) 201,400 190,653
Share price quoted at 31 March (DKK) 97.8 103.3
Staff
Number of employees at 31 March 19,113 18,684
Management's review
DSV achieved very satisfactory financial results for the period.
With accounting effect as from 1 January 2008, DSV has sold its 50% stake in
the Norwegian company Tollpost Globe AS, which was fully consolidated in 2007.
Comparative figures for 2007 have not been restated.
REVENUE
In Q1 2008, DSV realised an organic growth of 8.3% on Q1 2007 when adjusted for
foreign currency translation differences and acquisition and divestment of
enterprises. The growth more than offset falling exchange rates (GBP and USD),
the sale of Tollpost Globe AS and public holidays in connection with Easter,
which fell in the first quarter in 2008, but in the second quarter in 2007.
In the first quarter of 2008, revenue increased by 0.3% relative to the same
period of 2007.
Q1 REVENUE
- REALISED 2008 VERSUS REALISED 2007
DKKm
Q1 2007 revenue 8,493
Foreign currency translation adjustments (138)
Acquisition and divestment of enterprises, net (489)
Growth 653
Q1 2008 revenue 8,519
The Group's revenue was 6.2% above budget, which is attributable to organic
growth.
Q1 REVENUE
- REALISED 2008 VERSUS BUDGET 2008
DKKm
Q1 2008 revenue, budget 8,021
Foreign currency translation adjustments (2)
Acquisition and divestment of enterprises, net 0
Growth 500
Q1 2008 revenue 8,519
GROSS PROFIT
The consolidated gross margin ratio decreased to 21.0% relative to 22.2% for
the same period of 2007.
The gross margin ratio realised was 0.7 percentage points below budget.
OPERATING PROFIT BEFORE SPECIAL ITEMS
The Group returned an operating profit before special items for Q1 2008 of DKK
385 million compared with DKK 370 million for the corresponding period last
year. The organic growth was 18.6% when adjusted for foreign currency
translation differences and acquisition and divestment of enterprises.
Operating profit before special items increased by 4.1% compared with the same
period last year.
The ratio was 4.5% for the period compared with 4.4% for the same period of
2007, having been positively influenced by the reduction of other external
expenses.
Q1 OPERATING PROFIT BEFORE SPECIAL ITEMS
- REALISED 2008 VERSUS REALISED 2007
DKKm
Q1 2007 operating profit before special items 370
Foreign currency translation adjustments (15)
Acquisition and divestment of enterprises, net (30)
Growth 60
Q1 2008 operating profit before special items 385
Operating profit before special items was 19.2% above budget. This is mainly
due to organic revenue growth and a reduction of other external expenses,
although that was partly offset by a lower gross margin ratio.
Q1 OPERATING PROFIT BEFORE SPECIAL ITEMS
- REALISED 2008 VERSUS BUDGET 2008
DKKm
Q1 2008 operating profit before special items, budget 323
Foreign currency translation adjustments (2)
Acquisition and divestment of enterprises, net 0
Growth 64
Q1 2008 operating profit before special items 385
When adjusted for amortisation of customer relationships of DKK 15 million and
costs related to share-based payments of DKK 5 million, the Group's operating
profit before special items came to DKK 405 million. The corresponding profit
for 2007 amounted to DKK 386 million.
SPECIAL ITEMS
Special items for the first quarter represents a net income of DKK 436 million
and relates to a book gain from the sale of the shares in Tollpost Globe AS in
Norway.
Special items were on a par with the budget.
NET FINANCIAL EXPENSES
Financial expenses netted DKK 87 million for the period as against DKK 57
million for the same period of 2007.
Net financial expenses were approx. DK 20 million above budget, which is
attributable to foreign currency translation adjustments of approx. DKK 10
million and higher interest expenses due to a larger proportion of funds tied
up in net working capital.
PROFIT BEFORE TAX
Profit before tax came to DKK 734 million for the period as against DKK 317
million for the same period of 2007. Profit before tax for the first quarter of
2008 was affected positively by special items of DKK 436 million net.
When adjusted for these special items, profit before tax for the period dropped
by DKK 19 million.
This is mainly attributable to higher net financial expenses, which are partly
offset by a higher operating profit before special items achieved without any
operating profit from Tollpost Globe AS in the first three months of 2008.
Profit before tax was 5.3% above budget, which is mainly attributable to
organic growth.
EFFECTIVE TAX RATE
The effective tax rate was 12.8% in Q1 2008. It was positively affected by a
non-taxable gain on the sale of DSV's shares in Tollpost Globe AS. When
adjusted for this gain, the effective tax rate was 31.5%. In 2007, the
effective tax rate was 28.7%.
DILUTED ADJUSTED EARNINGS PER SHARE
Diluted adjusted earnings per share came to DKK 1.1 for the period, which is in
line with the corresponding period of 2007.
Diluted adjusted earnings per share is DKK 4.6 for 2008, which is higher than
for 2007 when the diluted adjusted earnings per share came to DKK 4.4.
BALANCE SHEET
The balance sheet stood at DKK 15,477 million at 31 March 2008 as against DKK
16,304 million at 31 December 2007. The drop is mainly caused by the sale of
DSV's shares in Tollpost Globe AS.
EQUITY
DSV has completed a share buy-back programme for DKK 400 million launched in
2007. At 31 March 2008, there is still an ongoing share buy-back programme for
1,500,000 shares. Accordingly, DSV spent DKK 306 million on share buy-backs in
the first three months of 2008.
At 31 March 2008, Group equity came to DKK 3,735 million, DKK 16 million of
which is attributable to minority interests. At 31 December 2007, Group equity
came to DKK 3,649 million. The increase derived mainly from profit for the
period, which is offset by share buy-backs to hedge an incentive programme and
a share buy-back programme as well as the sale of the minority interest in
Tollpost Globe AS.
DEVELOPMENT IN EQUITY
DKKm Q1 2007 Q1 2008
Equity at 1 January 3,844 3,649
Net profit for the period 226 640
Share buy-back, net (139) (306)
Foreign currency translation adjustments (17) (48)
Fair value adjustment of interest swaps 6 (29)
Purchase/disposal minority interests 0 (174)
Other (2) 3
Equity at 31 March 3,918 3,735
The solvency ratio exclusive of minority interests came to 24.0%. This is an
increase compared with 31 December 2007, when the corresponding ratio was
21.2%. The increase was mainly caused by the share buy-backs and the sale of
DSV's shares in Tollpost Globe AS, which reduced the balance sheet total.
NET WORKING CAPITAL
The Group's funds tied up in net working capital came to DKK 811 million at 31
March 2008 as against DKK 291 million at 31 December 2007, which was lower than
usual.
Funds tied up in debtors and other receivables have been reduced since 31
December 2007, but this is more than offset by a reduction of trade payables.
Moreover, funds were tied up in a property, which has subsequently been sold in
Q2 2008 without affecting results.
The current implementation of new IT systems and the establishment of shared
service centres also contribute to the increased working capital because these
implementations imply that more funds are tied up in working capital in a
transitional phase.
NET INTEREST-BEARING DEBT
Net interest-bearing debt amounted to DKK 4,973 million at 31 March 2008 as
against DKK 5,121 million at 31 December 2007. The drop was mainly caused by
proceeds from the sale of DSV's shares in Tollpost Globe AS, although this drop
was partly offset by share buy-backs and an increase in net working capital.
CASH FLOW STATEMENT
DKKm Q1 2007 Q1 2008
Profit before tax 317 734
Changes in net working capital (116) (468)
Adjustment, non-cash operating items etc. (25) (508)
Cash flow from operating activities 176 (242)
Purchase and sale of intangibles, property, plant and equipment (65) (198)
Acquisition and divestment of enterprises/ disposal of activities 0 876
Other 27 16
Cash flow from investing activities (38) 694
Free cash flow 138 452
Proceeds from and repayments of current and non-current liabilities 18 (225)
Transactions with shareholders (143) (309)
Cash flow from financing activities (125) (534)
Cash flow for the period 13 (82)
Adjusted free cash flow for the period 138 (424)
CASH FLOW FROM OPERATING ACTIVITIES
Cash flow from operating activities came to a negative DKK 242 million for the
period as against DKK 176 million for the same period of 2007. The development
is primarily attributable to more funds tied up in net working capital.
CASH FLOW FROM INVESTING ACTIVITIES
Cash flow from investment activities netted an inflow of DKK 694 million.
Adjusted for the impact of acquisition and divestment of enterprises, cash flow
from investing activities netted an outflow of DKK 182 million. The investments
include the construction of buildings to be resold before the end of the year
for about DKK 150 million.
FREE CASH FLOW
Free cash flow for the period adjusted for the acquisition of enterprises
amounted to a negative DKK 424 million.
INVESTED CAPITAL INCLUDING GOODWILL AND CUSTOMER RELATIONSHIPS
The Group's invested capital including goodwill and customer relationships came
to DKK 9,065 million at 31 March 2008 as against DKK 9,150 million at 31 March
2007.
ROIC INCLUDING GOODWILL AND CUSTOMER RELATIONSHIPS
Return on invested capital including goodwill and customer relationships
is16.9% for 2008 compared with 16.4% for 2007.
ACQUISITION AND DIVESTMENT OF ENTERPRISES IN Q1 2008
The sale of DSV's stake in Norwegian Tollpost Globe AS closed on 11 March 2008.
The sales price was DKK 993 million. The assets sold including allocated
goodwill total DKK 720 million, and the liabilities sold totalled DKK 172
million, which resulted in a gain after selling costs of DKK 437 million. For
2007, Tollpost Globe AS had a revenue of DKK 2,100 million and an EBITA of DKK
125 million.
The acquisition of Roadferry Ltd. was completed on 29 February 2008 and will be
recognised in the consolidated financial statements as from 1 March 2008.
Roadferry Ltd. has been included in the budgeted net revenue of the Road
Division for 2008 by DKK 400 million.
EVENTS AFTER THE BALANCE SHEET DATE OF THE INTERIM FINANCIAL REPORT
Kurt Larsen will resign from the Executive Board and has been nominated for the
Supervisory Board to be elected with effect from 1 August 2008 in connection
with the Annual General Meeting of the Company. As already announced, Jens
Bjørn Andersen will become his successor as Group CEO.
On 4 March 2008, the Supervisory Board of DSV decided to buy back up to
1,500,000 treasury shares in the period from 4 March to 10 April 2008, both
days inclusive. This share programme has expired, the result being the
acquisition of treasury shares for DKK 149.1 million.
As mentioned below, the Supervisory Board of DSV decided on 29 April 2008 to
launch yet another share buy-back programme for up to DKK 300 million.
No other material events have occurred after the balance sheet date.
OUTLOOK FOR 2008
DSV maintains the expectations for the last nine months of 2008 announced in
the 2007 Annual Report relating to revenue and operating profit before special
items. The expectations of cash flow and net investments for 2008 remain
unchanged from the expectations announced in the 2007 Annual Report.
STATUS OF CONSOLIDATION
The strategy of DSV is to play a proactive role in the ongoing consolidation of
the transport and logistics sector. Group Management considers DSV to have both
operative and financial strength and that it would be natural for the Company
to play an active role in the consolidation of the sector.
DSV is at all times in dialogue with a number of transport and logistics
companies, including large and medium-sized market players which may contribute
to an expansive development of the current activities of the Group within their
relevant fields.
At present it is impossible for Group Management to assess whether one or more
of these dialogues will result in additional acquisitions or consolidations.
SHARE BUY-BACKS FOR UP TO DKK 300 MILLION ACCORDING TO THE 'SAFE HARBOUR' METHOD
The Supervisory Board of DSV has decided to buy back shares in accordance with
the authorisation granted by the General Meeting on 30 April 2007.
At 29 April 2008, DSV holds 16,850,927 treasury shares of a nominal value of
DKK 1 each, corresponding to 8.24% of DSV's share capital.
Background
The capital structure of DSV is assessed on a regular basis. Considering the
increased activity level of DSV, its strong operating results and high free
cash flow, Group Management has resolved to launch a share buy-back programme
in accordance with the targets set out for the Group's capital structure. The
ratio of net interest-bearing debt to EBITDA (operating profit before
amortisation, depreciation and special items) should be at least 2-3.5.
Considering the financial results achieved and the expectations for the
remaining part of 2008, the Group's net interest-bearing debt should be around
DKK 4.3-7.6 billion.
Group Management deems that the share buy-back will not prevent DSV from
actively contributing to the continued consolidation of the transport and
logistics sector.
The purpose of the share buy-back is to reduce the share capital and to hedge
the Group's incentive programmes. At next year's Annual General Meeting, the
Supervisory Board will propose a resolution to reduce the share capital of DSV
by a nominal amount equalling at least the nominal amount of the shares bought
back.
The share buy-back period runs from 29 April 2008 to 31 July 2008, both days
inclusive. During this period DSV will buy back shares of a value not exceeding
DKK 300 million as set forth in the share buy-back programme prepared in
accordance with the provisions of Commission Regulation (EC) No. 2273/2003 of
22 December 2003, the so-called 'safe harbour' method that protects the
supervisory and executive boards of listed companies from violating insider
trading legislation in connection with share buy-backs.
Buy-back terms
• DSV is required to retain a financial adviser who is to make its own trading
decisions independently of and without influence from DSV and execute the
buy-backs within the announced framework. DSV will retain Carnegie Bank A/S as
its financial adviser and lead manager for the share buy-back.
• The maximum amount that DSV may pay for shares purchased under the share
buy-back programme is DKK 300 million. No more than 3,299,073 shares,
corresponding to 1.76% of the current share capital of DSV A/S, may be
purchased.
• No shares may be bought back at a price deviating by more than 5% from the
most recently quoted market price for DSV shares at the date of acquisition, or
which otherwise exceeds the higher of the price of the latest independent trade
and the highest current independent bid (by buyers) on the OMX Nordic Exchange
Copenhagen at the time of trading. As a result of this restriction, DSV can
hardly expect to make purchases up to the daily share buy-back limit.
• On each business day, a maximum of 292,792 shares in the Company may be
purchased, corresponding to 25% of the average trading volume of DSV shares on
the OMX Nordic Exchange Copenhagen in March 2008.
• The reporting obligations under Danish law and the rules of the OMX Nordic
Exchange Copenhagen must be fulfilled within the applicable time-limits.
EXCHANGE RATES
Realised Year-to-date average Budget
Country Cur¬ren¬cy 31.03.07 31.03.08 31.03.07 31.03.08 2008
Euroland EUR 745 746 745 745 744
UK GBP 1,096 937 1,112 984 1,000
Norway NOK 92 93 91 94 93
Sweden SEK 80 79 81 79 79
USA USD 559 472 569 497 500
DKK for 100 currency units
Summary of Division results
Road Division
REVENUE
The revenue of the Road Division was 5.1% above budget, Sweden, the UK, Germany
and the Netherlands performing particularly well.
GROSS PROFIT
The gross margin ratio of the Road Division came to 19.9% for the period as
against the budgeted 19.1%.
OPERATING PROFIT BEFORE SPECIAL ITEMS
The Road Division achieved an operating profit before special items that was
27.9% above budget, which is mainly attributable to Sweden and the UK.
BALANCE SHEET
The balance sheet of the Road Division stood at DKK 12,031 million at 31 March
2008 as against DKK 13,030 million at 31 December 2007. The drop is mainly
caused by the sale of DSV's shares in Tollpost Globe AS.
NET WORKING CAPITAL
The Road Division's funds tied up in net working capital came to DKK 328
million at 31 March 2008 compared with DKK 152 million at 31 December 2007.
Funds tied up in debtors and other receivables were reduced, but this was more
than offset by a reduction of trade payables and corporation tax payable.
The current implementation of new IT systems and the establishment of shared
service centres contribute to the increased working capital because these
implementations imply that more funds are tied up in working capital in a
transitional phase.
Group Management is very satisfied with the development in and results of the
Division.
Air & Sea Division
REVENUE
The revenue of the Air & Sea Division outperformed budget by 7.1% in the first
three months of 2008, the USA, Denmark and the Project Department being above
budget.
GROSS PROFIT
The gross margin ratio of the Air & Sea Division came to 20.2% for the period
as against the budgeted 21.0%.
OPERATING PROFIT BEFORE SPECIAL ITEMS
The operating profit before special items of the Air & Sea Division was 19.3%
above budget for the first three months of 2008, which is mainly attributable
to the USA and Denmark.
BALANCE SHEET
The balance sheet of the Air & Sea Division stood at DKK 2,820 million at 31
March 2008 as against DKK 3,214 million at 31 December 2007. The decrease is
mainly due to lower net interest-bearing debt.
NET WORKING CAPITAL
The Air & Sea Division's funds tied up in net working capital came to DKK 288
million at 31 March 2008 compared with DKK 165 million at 31 December 2007.
Funds tied up in debtors and other receivables were reduced, but this was more
than offset by a reduction of trade payables and corporation tax payable.
The current implementation of new IT systems and establishment of shared
service centres contribute to the increased working capital because these
implementations imply that more funds are tied up in working capital in a
transitional phase.
Group Management is very satisfied with the development in and results of the
Division.
Solutions Division
REVENUE
The revenue of the Solutions Division outperformed budget by 6.2% in the first
three months of 2008, which is mainly attributable to Other Europe.
GROSS PROFIT
The gross margin ratio of the Solutions Division came to 21.6% for the period
as against the budgeted 23.6%. The drop was mainly caused by greater
competition and major internal relocations.
OPERATING PROFIT BEFORE SPECIAL ITEMS
Operating profit before special items came to DKK 36 million for the first
three months of 2008, which is in line with budget.
BALANCE SHEET
The balance sheet of the Solutions Division stood at DKK 3,808 million at 31
March 2008 as against DKK 3,532 million at 31 December 2007. This increase
mainly occurred because more funds have been tied up in net working capital and
goodwill originating from activities acquired from the Road Division.
NET WORKING CAPITAL
The Solutions Division's funds tied up in net working capital came to DKK 181
million at 31 March 2008 compared with a negative amount of DKK 24 million at
31 December 2007. The increase is caused by more funds being tied up in debtors
and by the repayment of liabilities relating to trade payables.
Moreover, funds were tied up in a property, which has subsequently been sold in
Q2 2008 without affecting results.
Moreover the current implementation of new IT systems and the establishment of
shared service centres for a transitional phase imply that more working capital
is tied up.
Group Management is satisfied with the development in and results of the
Division.
Road Division
CONDENSED INCOME STATEMENT FOR THE PERIOD
(DKKm) 01.01.07-31.03.07
Realised 01.01.08-31.03.08
Budget 01.01.08-31.03.08
Realised
Revenue 5,741 4,726 4,967
Direct costs 4,526 3,822 3,980
Gross profit 1,215 904 987
Other external expenses 314 180 223
Staff costs 640 524 528
Operating profit before amortisation, depreciation and special items 261 200 236
Amortisation, depreciation and impairment of intangibles, property, plant and
equipment, excluding customer relationships 61 43 36
Amortisation and impairment of customer relationships 2 3 3
Operating profit before special items 198 154 197
CONDENSED BALANCE SHEET
(DKKm) 31.12.07 31.03.08
Goodwill and customer relationships 2,456 2,483
Other intangibles, property, plant and equipment 2,784 2,170
Other non-current assets 608 757
Total non-current assets 5,848 5,410
Receivables 4,333 3,983
Cash and intercompany balances 2,849 2,638
Total current assets 7,182 6,621
Total assets 13,030 12,031
Equity 1,614 2,451
Interest-bearing long-term debt 260 222
Other non-current liabilities, including provisions 617 604
Total non-current liabilities 877 826
Interest-bearing short-term debt, including intercompany debt 6,358 5,099
Other short-term debt 4,181 3,655
Total current liabilities 10,539 8,754
Total equity and liabilities 13,030 12,031
ROIC came to 16.5%. The calculation of ROIC included DKK 2,236 million relating
to goodwill and customer relationships. The item consists of the Division's
goodwill, customer relationships and goodwill allocated from DSV.
Number of employees: 10,067.
ACTIVITIES
The Road Division handles transport (full and part loads and mixed cargo) by
trucks domestically and between the European countries. The services are
provided by Group companies throughout Europe.
The actual transports operations have basically been outsourced to
sub-contractors.
THE DIVISION IN BRIEF
During the budgeting phase, the Division was particularly concerned about the
situation in Europe because of the worry that the US economic crisis would
spread to the European market.
Things have, however, developed better than anticipated in the somewhat worried
budgets made for the first quarter. The Division did not see a reduction in
volumes, nor of the EBITA margin. If the results are compared with those of
2007 and adjusted for the Easter season (which did not fall until the second
quarter in 2007) and the divestment of DSV's 50% stake in Tollpost Globe AS,
then the Division achieved a growth rate of more than 20%.
Whether the financial crisis will hit the Division and its operations next
quarter is difficult to foresee.
The Division has improved its quality, and the integration falls more and more
into place. Due to these factors the Division has a chance of improved earnings
and fine growth. What has happened in reality is that the very weak markets
have improved and the strong markets with somewhat higher earnings have held
the fort; some of them have even improved their operating results.
COUNTRY DEVELOPMENT IN REVENUE DEVELOPMENT IN OPERATING PROFIT BEFORE SPECIAL
ITEMS (EBITA) FOCUS
Denmark On budget On budget Very handsome EBITA margin. Good management with
strong initiatives to improve quality and operating results.
Sweden Outperformed budget Much better than budget Very fine improvement of
EBITA margin. Strong growth. The company replaced its operating management
about a year ago. This has contributed to growth and to a notable improve¬ment
of the EBITA margin.
Norway On budget On budget Create a strategy on the future domestic situation
of the company. This is relevant after the sale of DSV's 50% stake in Tollpost
Globe AS. The domestic activities imply considerable develop¬ment potential.
Finland On budget Below budget A clearly reduced EBITA margin as a consequence
of domes¬tic IT problems. The executive management of Finland will assume
direct responsibility for the activity in future. Part of the IT problem is
caused by the Group IT Dept. in Copen¬hagen.
UK Outperformed budget
Outperformed budget The volume decrease seen some time ago has now been
replaced by growth, good quality and stability. Corporate earn¬ings become
stronger and stronger, and there is potential for increased growth in the UK.
Ireland Slightly below budget Slightly below budget The company has experienced
a difficult period. However, managements in Ireland and Copenhagen expect the
old growth rate to return in 2008.
Germany Outperformed budget Outperformed budget Results are better compared
with the corresponding period last year, although there is still cause for full
focus from the national management in Germany and Group Management in
Copenhagen. Quality and operating results have improved, but figures are still
red.
The Netherlands Outperformed budget
Outperformed budget The new Dutch management seems to have got operating
results under control. Group Management has great expectations of the Dutch
organisation. The company ought to return to the previous, strong positions of
both enterprises before the acquisi¬tion of Frans Maas.
Belgium On budget On budget The company performed well. No difference relative
to previous announcements. Good management, handsome margins and good quality.
The company should create larger growth.
France Below budget
Outperformed budget Small loss, but clear improvement on Q1 2007. There is
reason for optimism in the French organisation; and the Group head¬quarters in
Copenhagen feel confident that the French manage¬ment will reach the goal of
positive results in future. Management ran the company well before the
acquisition of Frans Maas.
Italy Below budget Slightly better than budget A large market to which there
are expectations of strong growth. EBITA ought to improve.
Spain Slightly below budget, but much better than Q1 2007 Below budget;
results lower than for Q1 2007 New management working to improve operating
results and company administration. Things are being straightened out in the
company. Group Management has confidence in the new Spanish management.
Portugal On budget On budget Portugal is no big market, but still it should be
possible to create higher top-line growth.
Poland Slightly below budget, but better than Q1 2007 On budget Poland is a big
market, and the company should create the best results among the former Central
and Eastern European countries. This applies to both EBITA and revenue.
The Baltics, Russia and Ukraine Outperformed budget
On budget Ukraine is very new and the company of a modest size.
Russian figures are small, and Group Management has not been particularly
active in respect of Russia.
The economic growth in the Baltic countries has come to a halt. The Companies
still have fine figures, but the previously very strong growth will presumably
slow down.
Czech Republic Outperformed budget On budget Handsome growth which ought to be
maintained in future. The company previously had a somewhat higher EBITA
margin, which is worth having a look at.
Central Europe (Austria, Switzer¬¬land, Hungary and Slovakia) Much better than
budget Outperformed budget The countries in Central Europe differ greatly.
Austria has a modest EBITA and modest growth.
Switzerland returned fairly poor results and weak growth.
Hungary is improving both results and growth.
Slovakia is doing surprisingly well in all areas.
South Eastern Europe (Greece, Bul¬garia, Slovenia, Croatia, Serbia, Turkey and
Morocco) Below budget On budget Turkey saw fine growth.
Greece returned negative results.
Bulgaria is slightly disappointing.
Slovenia, Croatia and Serbia did well measured by all parameters.
Morocco delivered results without attracting much attention from its network.
REVENUE AND OPERATING PROFIT BEFORE SPECIAL ITEMS BY MARKETS
Revenue Operating profit before special items Operating profit before special
items (%)
(DKKm)
Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08
Denmark 1,196 1,189 1,179 80 75 79 6.7 6.3 6.7
Sweden 1,026 995 1,055 25 24 44 2.4 2.4 4.2
Norway 813 290 276 46 16 16 5.7 5.5 5.8
Finland 314 337 331 7 7 4 2.2 2.1 1.2
UK 535 420 466 26 19 36 4.9 4.5 7.7
Ireland 145 97 90 6 4 3 4.1 4.1 3.3
Germany 577 546 612 (9) (8) (5) -1.6 -1.5 -0.8
The Netherlands 226 188 222 3 (5) (1) 1.3 -2.7 -0.5
Belgium 237 258 253 14 16 15 5.9 6.2 5.9
France 359 213 195 (9) (3) (1) -2.5 -1.4 -0.5
Italy 218 162 152 5 2 3 2.3 1.2 2.0
Spain 122 96 92 (9) (6) (12) -7.4 -6.3 -13.0
Portugal 39 41 40 2 1 1 5.1 2.4 2.5
Poland 102 110 107 4 5 5 3.9 4.5 4.7
The Baltics, Russia and Ukraine 246 229 255 11 6 7 4.5 2.6 2.7
Czech Republic 54 60 66 4 2 2 7.4 3.3 3.0
Central Europe 145 146 172 (1) (1) 1 -0.7 -0.7 0.6
(Austria, Switzerland, Hungary and Slovakia)
South Eastern Europe 92 113 105 2 3 2 2.2 2.7 1.9
(Greece, Bulgaria, Slovenia, Croatia, Serbia, Turkey and Morocco)
Total 6,446 5,490 5,668 207 157 199 3.2 2.9 3.5
Group 196 95 112 (7) 0 1 - - -
Amortisation of customer relationships 0 0 0 (2) (3) (3) - - -
Elimination (901) (859) (813) 0 0 0 - - -
Net 5,741 4,726 4,967 198 154 197 3.4 3.3 4.0
Air & Sea Division
CONDENSED INCOME STATEMENT FOR THE PERIOD
(DKKm) 01.01.07-31.03.07
Realised 01.01.08-31.03.08
Budget 01.01.08-31.03.08
Realised
Revenue 1,976 2,377 2,546
Direct costs 1,564 1,879 2,031
Gross profit 412 498 515
Other external expenses 98 126 121
Staff costs 181 228 225
Operating profit before amortisation, depreciation and special items 133 144 169
Amortisation, depreciation and impairment of intangibles, property, plant and
equipment, excluding customer relationships 5 6 6
Amortisation and impairment of customer relationships 2 3 2
Operating profit before special items 126 135 161
CONDENSED BALANCE SHEET
(DKKm) 31.12.07 31.03.08
Goodwill and customer relationships 910 903
Other intangibles, property, plant and equipment 102 97
Other non-current assets 43 42
Total non-current assets 1,055 1,042
Receivables 1,480 1,515
Cash and intercompany balances 679 263
Total current assets 2,159 1,778
Total assets 3,214 2,820
Equity 699 769
Interest-bearing long-term debt 33 32
Other non-current liabilities, including provisions 81 88
Total non-current liabilities 114 120
Interest-bearing short-term debt, including intercompany debt 1,086 704
Other short-term debt 1,315 1,227
Total current liabilities 2,401 1,931
Total equity and liabilities 3,214 2,820
ROIC came to 40.2%. The calculation of ROIC included DKK 1,432 million relating
to goodwill and customer relationships. The item consists of the Division's
goodwill, customer relationships and goodwill allocated from DSV.
Number of employees: 3,133.
ACTIVITIES
The Air & Sea Division handles shipments to overseas markets by air and sea.
The activities are concentrated in Scandinavia, the USA, the UK, Germany, the
Benelux countries and the Far East. The Division handles full loads, part
loads, containers and flight palettes. The Division does not have its own fleet
of aircraft or ships, but mainly acts as an intermediary between the individual
customer and the shipping line or airline company.
THE DIVISION IN BRIEF
As with the Road Division, there has been considerable concern about the
revenue of the Air & Sea Division. However, the US crisis and the low dollar
rate did not influence the growth of the Division, which remains high in
respect of both top line and EBITA.
Of course the low dollar rate has caused some changes; it has created a large
growth in the outbound export from the USA. For our US subsidiary, the greater
export volumes have more than compensated for the somewhat lower import
volumes.
It is seen very clearly from the figures of the Division that nearly all
markets did better than the first quarter of 2007.
The Division supplies high-quality services, for which reason it is likely that
part of the growth is attributable to increased market shares.
COUNTRY DEVELOPMENT IN REVENUE DEVELOPMENT IN OPERATING PROFIT BEFORE SPECIAL
ITEMS (EBITA) FOCUS
USA Outperformed budget and much better than Q1 2007 Outperformed
budget Impressively well run considering the US economic crisis and a declining
dollar rate. The US shippers are very good at seeing the opportunities of a
changing market.
Denmark Outperformed budget Much better than budget and significantly better
than Q1 2007 Well run, handsome growth. Nice improvement of EBITA margin.
Denmark
Project Dept. Much better than budget and significantly better than Q1
2007 Outperformed budget and much better than Q1 2007 The Department has seen a
significant positive development. Earnings were good, but the EBITA margin was
a tiny bit below budget.
Norway Outperformed budget Outperformed budget Fine development, particularly
of the EBITA margin.
Slightly higher growth would look good for the company.
Sweden On budget Slightly below budget and slightly below Q1 2007 A modest
EBITA margin and modest growth. The competitors in the Swedish market are not
performing too well; still the company ought to perform better.
Finland Slightly better than budget Below budget A very small EBITA margin
which ought to be worked on.
UK and Ireland Outperformed budget Outperformed budget Handsome EBITA margin in
Ireland.
The EBITA margin could be tightened up a bit in the UK in particular.
Northern Ireland is a new and positive member of the family.
Germany Slightly below budget Slightly better than budget The EBITA margin of
the company is very low, one of the lowest of the Air & Sea Division. It ought
to be higher in the huge German market.
The Netherlands Outperformed budget Below budget and below Q1 2007 Somewhat
disappointing in the Netherlands; returned a very weak EBITA margin, but also
fairly handsome growth.
France On budget Slightly better than budget Positive, although very modest
results.
Italy Slightly below budget, but 50% better than Q1 2007 On budget Even though
the company performs according to budget, it still returned a loss. Therefore
hard work is needed make black figures in future.
Spain Much below budget and much lower than for Q1 2007 Below budget; lower
than for Q1 2007 The Spanish executive management has been replaced. This
management clean-out may have had a negative effect on the Q1 results.
Central Europe
(Poland, Hungary, the Czech Republic and Turkey) Outperformed budget On
budget Other than the Czech Republic, the companies are of modest sizes. In
general, results are nice and regular.
Canada Below budget, more or less on a level with Q1 2007 On budget, but much
better than Q1 2007 The company ought to grow in terms of both size and
earnings.
China Outperformed budget, almost 40% up on Q1 2007 Better than budget and
very much better than Q1 2007 Fine growth. In general a very well managed and
well run company.
Hong Kong Almost on budget Slightly below budget Handsome EBITA margin, the
highest of the Division. If a wish were to be expressed in respect of Hong
Kong, it should be of growth, maybe not in the order of that of China, but
something like it.
Australia and New Zealand Much better than budget Outperformed budget Good
operating profit in both geographical areas. Particularly Australia excels by
its handsome growth and very fine improvement of the EBITA margin.
Other Far East (Indonesia, Thailand, Singapore, Malaysia, the Philippines,
Korea, Taiwan, Vietnam, India, Bangladesh and the United Arab
Emirates) Slightly below budget Outperformed budget Generally a high EBITA
level. Some of the countries are found in the Division top.
This is one of the areas in the world with the highest growth rates.
Accordingly we ought to create a somewhat higher growth than was the case in
Q1.
REVENUE AND OPERATING PROFIT BEFORE SPECIAL ITEMS BY MARKETS
Revenue Operating profit before special items Operating profit before special
items (%)
(DKKm) Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08
USA 395 401 470 40 40 48 10.1 10.0 10.2
Denmark 400 428 444 22 24 34 5.5 5.6 7.7
Project Dept. 161 164 226 8 11 12 5.0 6.7 5.3
Norway 80 77 86 6 6 8 7.5 7.8 9.3
Sweden 103 102 100 5 4 4 4.9 3.9 4.0
Finland 52 57 61 2 3 2 3.8 5.3 3.3
UK and Ireland 253 339 335 7 10 13 2.8 2.9 3.9
Germany 235 239 233 4 3 4 1.7 1.3 1.7
The Netherlands 122 133 138 5 4 4 4.1 3.0 2.9
France 0 123 121 0 1 1 - 0.8 0.8
Italy 0 71 65 0 (2) (2) - -2.8 -3.1
Spain 0 37 29 0 (1) (3) - -2.7 -10.3
Central Europe 54 84 86 (1) 2 2 -1.9 2.4 2.3
(Poland, Hungary, Czech Republic, Bulgaria and Turkey)
Canada 27 32 26 0 1 1 0.0 3.1 3.8
China 105 141 144 10 12 13 9.5 8.5 9.0
Hong Kong 85 93 91 10 10 9 11.8 10.8 9.9
Australia and New Zealand 54 70 82 3 3 4 5.6 4.3 4.9
Other Far East (Indonesia, Thailand, Singapore, Malaysia, the Philippines,
Korea, Taiwan, Vietnam, India, Bangladesh and the United Arab Emirates) 153
176
172
7
8
10
4.6
4.5
5.8
Total 2,279 2,767 2,909 128 139 164 5.6 5.0 5.6
Group 2 3 3 0 (1) (1) - - -
Amortisation of customer relationships 0 0 0 (2) (3) (2) - - -
Elimination (305) (393) (366) 0 0 0 - - -
Net 1,976 2,377 2,546 126 135 161 6.4 5.7 6.3
Solutions Division
CONDENSED INCOME STATEMENT FOR THE PERIOD
(DKKm) 01.01.07-31.03.07
Realised 01.01.08-31.03.08
Budget 01.01.08-31.03.08
Realised
Revenue 1,051 1,189 1,263
Direct costs 776 908 990
Gross profit 275 281 273
Other external expenses 91 95 84
Staff costs 105 119 123
Operating profit before amortisation, depreciation and special items 79 67 66
Amortisation, depreciation and impairment of intangibles, property, plant and
equipment, excluding customer relationships 18 21 21
Amortisation and impairment of customer relationships 9 9 9
Operating profit before special items 52 37 36
CONDENSED BALANCE SHEET
(DKKm) 31.12.07 31.03.08
Goodwill and customer relationships 764 873
Other intangibles, property, plant and equipment 1,126 1,260
Other non-current assets 119 104
Total non-current assets 2,009 2,237
Receivables 963 1,139
Cash and intercompany balances 560 432
Total current assets 1,523 1,571
Total assets 3,532 3,808
Equity 408 387
Interest-bearing long-term debt 466 468
Other non-current liabilities, including provisions 186 194
Total non-current liabilities 652 662
Interest-bearing short-term debt, including intercompany debt 1,485 1,801
Other short-term debt 987 958
Total current liabilities 2,472 2,759
Total equity and liabilities 3,532 3,808
ROIC came to 5.3%. The calculation of ROIC included DKK 1,390 million relating
to goodwill and customer relationships. The item consists of the Division's
goodwill, customer relationships and goodwill allocated from DSV.
Number of employees: 5,484.
ACTIVITIES
The Solutions Division defines solutions as comprehen¬sive logistics solutions,
including outsourcing of stocks, distribution and a number of services related
to custom¬ers' supply chain. These services are mainly aimed at large
industrial companies within branded products and brands. The business areas of
the Division also include distribution and cross-docking.
THE DIVISION IN BRIEF
It was disappointing to Group Management in Copenhagen that the Nordic
countries were fairly weak and unable to meet their budgets. Some specific
initiatives have been started to regain the old earnings and growth levels. In
the rest of Europe, the Solutions Division is doing fine. The Division
Management is good, and the quality provided is very high. Demand for Solutions
products has not decreased.
For a period the collaboration between the Solutions and Road Divisions has
been less intensive because of the lower quality provided by the Road Division.
Now that quality has regained its previous level, increased collaboration would
benefit both Divisions when looking forward in 2008.
COUNTRY DEVELOPMENT IN REVENUE DEVELOPMENT IN OPERATING PROFIT BEFORE SPECIAL
ITEMS (EBITA) FOCUS
Nordic countries
(Denmark, Norway, Sweden and Finland) On budget Below budget Finland was indeed
a positive surprise this quarter. We have been very worried about the situation
in Finland, but now the country is back with a very fine EBITA margin.
Denmark returned disappointing results of only half the size of last year's
results.
Norway did not perform as budgeted or expected either.
Those results are attributable to a number of specific circumstances in the
Nordic countries, and initiatives have been made to improve operating results.
Other Europe
(The UK, Germany, the Netherlands, Belgium, France, Poland and
Romania) Outperformed budget Slightly below budget Results and EBITA margins
are still very fine in the Netherlands and Belgium.
Italy and Romania look reasonable.
Division Management has made a great effort to solve the problems on several
locations in Europe and has taken charge of some of the German problems.
REVENUE AND OPERATING PROFIT BEFORE SPECIAL ITEMS BY MARKETS
Revenue Operating profit before special items Operating profit before special
items (%)
(DKKm) Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08 Realised
01.01.07-31.03.07 Budget
01.01.08-31.03.08 Realised
01.01.08-31.03.08
Nordic countries 284 266 271 13 8 8 4.6 3.0 3.0
(Denmark, Norway, Sweden and Finland)
Other Europe 796 961 1,024 48 38 36 6.0 4.0 3.5
(The UK, Germany, the Netherlands, Belgium, France, Poland and Romania)
Total 1,080 1,227 1,295 61 46 44 5.6 3.7 3.4
Group 1 3 3 0 0 0 - - -
Amortisation of customer relationships 0 0 0 (9) (9) (8) - - -
Elimination (30) (41) (35) 0 0 0 - - -
Net 1,051 1,189 1,263 52 37 36 4.9 3.1 2.9
Shareholder information
SALARIES AND BONUSES FOR THE EXECUTIVE BOARD
An amount of DKK 4.5 million was charged to the income statement for salaries
and bonuses for the Executive Board members in Q1 2008.
INCENTIVE PROGRAMME
DSV launched a new incentive programme on 31 March 2008. Please see page 22 for
a list of all current incentive programmes.
LATEST IMPORTANT STOCK EXCHANGE ANNOUNCEMENTS
4 March 2008 (announcement No. 286):
2007 Annual Report
11 March 2008 (announcement No. 288):
Sale of DSV's 50% stake in Tollpost Globe AS by DSV Road Holding A/S ("DSV") to
Posten AB closed
INVESTOR TELECONFERENCE
DSV invites investors, shareholders, analysts and others to participate in an
investor teleconference on 29 April 2008 at 1:00 p.m.
At the conference, which will take place in English, DSV will present its Q1
2008 Interim Financial Report. Participants will have an opportunity to ask
questions.
Participants from DSV will be: Kurt K. Larsen, Group CEO, and Jens Lund, CFO.
The telephone number for the teleconference is +45 32 71 47 67 for Danish
participants. Foreign participants can attend the conference on either +44 (0)
208 817 9301 or +1 718 354 1226. Participants will have an opportunity to ask
questions. No prior registration is required to attend the teleconference.
WEB-BASED INVESTOR TELECONFERENCE
The teleconference can be viewed and heard directly on the DSV website
(http://www.dsv.com) or via the OMX Nordic Exchange Copenhagen
(http://.omxgroup.com/nordicexchange/). Questions can only be asked by
telephone. Please note that Microsoft Media Player is required to view the
tele¬conference. Microsoft Media Player can be downloaded free of charge from
both websites. It will be possible to test the connection at the above websites
in the hours before the teleconference.
INQUIRIES RELATING TO THE INTERIM FINANCIAL REPORT
Questions may be addressed to:
Kurt K. Larsen, Group CEO, tel. +45 43 20 30 40, or Jens H. Lund, CFO, tel. +45
43 20 30 40.
This Announcement is available on the Internet at: www.dsv.com. The
Announcement has been prepared in Danish and in English. In the event of
discrepancies, the Danish version shall apply.
ACCOUNTING POLICIES
The Interim Financial Report has been prepared according to IAS 34.
DSV has implemented IFRS 8 "Operating Segments" with effect from 1 January
2008. The new financial reporting standard has not influenced recognition and
measurement, but implies additional segment reporting.
The accounting policies remain unchanged compared with the 2007 Annual Report,
except for the implementation of IFRS 8.
STATEMENT BY THE EXECUTIVE AND SUPERVISORY BOARDS
The Supervisory Board and the Executive Board have today considered and adopted
the Interim Financial Report of DSV A/S for the three-month period ended 31
March 2008.
The Interim Financial Report, which has not been audited or reviewed by the
Company auditor, has been prepared in accordance with IAS 34 "Interim Financial
Reporting" as approved by the European Union and additional Danish disclosure
requirements for interim financial reports of listed companies.
In our opinion, the Interim Financial Report gives a true and fair view of the
Group's assets, equity, liabilities and financial position at 31 March 2008 and
of the results of the Group's activities and the cash flows for the three-month
period ended 31 March 2008.
We also find that Management's review provides a fair statement of developments
in the activities and financial situation of the Group, financial results for
the period, the general financial position of the Group and a description of
the major risks and elements of uncertainty faced by the Group.
Brøndby, 29 April 2008
EXECUTIVE BOARD
Kurt K. Larsen Jens H. Lund
Group CEO CFO
SUPERVISORY BOARD
Palle Flackeberg Erik B. Pedersen
Chairman Deputy Chairman
Kaj Christiansen Per Skov
Hans Peter Drisdal Hansen Egon Korsbæk
Interim Financial Statements
INCOME STATEMENT
(DKKm) 01.01.07-31.03.07 01.01.08-31.03.08
Revenue 8,493 8,519
Direct costs 6,608 6,727
Gross profit 1,885 1,792
Other external expenses 490 413
Staff costs 928 907
Operating profit before amortisation, depreciation and special items 467 472
Amortisation, depreciation and impairment of intangibles, property, plant and
equipment 97 87
Operating profit before special items 370 385
Special items, net 4 436
Operating profit (EBIT) 374 821
Share of associates' net profit after tax - (1)
Financial income 13 21
Financial expenses (70) (107)
Profit before tax 317 734
Tax on profit for the period 91 94
Net profit for the period 226 640
Net profit for the period is allocated to:
Shareholders of DSV A/S 214 640
Minority interests 12 0
Earnings per share (DKK):
Earnings per share of DKK 1 4.3 13.7
Diluted earnings per share of DKK 1 4.4 4.6
STATEMENT OF RECOGNISED INCOME AND EXPENSE
(DKKm) 01.01.07-31.03.07 01.01.08-31.03.08
Foreign currency translation adjustments, foreign enterprises (17) (48)
Value adjustment of hedging instruments for the period 20 7
Value adjustment of hedging instruments transferred to financial
expenses (13) (45)
Share-based payments 2 5
Actuarial adjustments 0 0
Others adjustments (3) 0
Tax on changes in equity 2 9
Net expense recognised directly in equity (9) (72)
Profit for the period 226 640
Total statement of recognised income and expense 217 568
Statement of recognised income and expense is attributable to:
Shareholders of DSV A/S 205 568
Minority interests 12 0
Total 217 568
BALANCE SHEET, ASSETS
(DKKm) 31.03.07 31.12.07 31.03.08
Non-current assets
Intangibles 4,972 5,114 4,808
Property, plant and equipment 3,718 3,795 3,523
Investments in associates 14 7 6
Other securities and receivables 108 118 105
Deferred tax asset 279 328 340
Total non-current assets 9,091 9,362 8,782
Current assets
Assets held for sale 141 121 120
Operating current assets
Trade and other receivables 6,485 6,438 6,271
Cash 419 383 304
Total operating current assets 6,904 6,821 6,575
Total current assets 7,045 6,942 6,695
Total assets 16,136 16,304 15,477
BALANCE SHEET, EQUITY AND LIABILITIES
(DKKm) 31.03.07 31.12.07 31.03.08
Equity
Share capital 40 202 202
Reserves 3,723 3,255 3,517
DSV A/S shareholders' share of equity 3,763 3,457 3,719
Minority interests 155 192 16
Total equity 3,918 3,649 3,735
Liabilities
Non-current liabilities
Deferred tax 293 300 302
Pensions and similar obligations 551 405 412
Provisions 330 178 172
Financial liabilities 4,576 4,900 4,441
Total non-current liabilities 5,750 5,783 5,327
Current liabilities
Liabilities relating to assets held for sale 0 81 0
Other current liabilities
Provisions 74 147 129
Financial liabilities 684 604 835
Trade and other payables 5,707 5,857 5,342
Corporation tax 3 183 109
Total other current liabilities 6,468 6,791 6,415
Total current liabilities 6,468 6,872 6,415
Total liabilities 12,218 12,655 11,742
Total equity and liabilities 16,136 16,304 15,477
CASH FLOW STATEMENT
(DKKm) 01.01.07-31.03.07 01.01.08-31.03.08
Profit before tax 317 734
Adjustment, non-cash operating items etc.
Amortisation, depreciation and impairment losses 97 87
Share-based payments 2 5
Special items 0 (437)
Changes in provisions (22) (28)
Share of profit of associates 0 1
Financial income (13) (21)
Financial expenses 70 107
Cash flow from operating activities before changes in net working capital
451 448
Changes in net working capital (116) (468)
Financial income, paid 13 21
Financial expenses, paid (70) (113)
Cash flow from ordinary activities 278 (112)
Corporation tax, paid (102) (130)
Cash flow from operating activities 176 (242)
Acquisition of intangibles (2) (52)
Sale of intangibles 19 0
Acquisition of property, plant and equipment (111) (181)
Sale of property, plant and equipment 29 35
Net divestment of enterprises/disposal of activities 0 876
Change in other financial assets 27 16
Cash flow from investing activities (38) 694
Free cash flow 138 452
Proceeds from incurring non-current liabilities 40 0
Repayments on loans and credits 0 (215)
Other financial liabilities incurred (22) 10)
Shareholders:
Dividends distributed 0 0
Share buy-backs (139) (306)
Other transactions with shareholders (4) (3)
Cash flow from financing activities (125) (534)
Net cash flow for the year 13 (82)
Foreign currency translation adjustments (1) 3
Cash at 1 January 407 383
Cash at 31 March 419 304
The cash flow statement cannot be directly derived from the balance sheet and
income statement.
Specification 1: Statement of adjusted free cash flow
Free cash flow 138 452
Net divestment of enterprises/disposal of activities 0 (876)
Adjusted free cash flow 138 (424)
Specification 2: Statement of enterprise value of acquirees
Net divestment of enterprises/disposal of activities 0 (876)
Interest-bearing debt 0 10
Enterprise value of acquirees 0 (866)
STATEMENT OF CHANGES IN EQUITY - 01.01.07-31.03.07
(DKKm) Share capital Hedging reserve Reserve for exchange rate adjust-ments
Retained earnings Pro¬posed divi¬dends DSV A/S share¬holders' share of equity
Minority interests Total equity
Equity at 1 January 2007 40 18 (7) 3,598 50 3,699 145 3,844
Recognised income and expense for the period - 7 (18) 214 0 203 14 217
Dividends distributed
- - - - - - (1) (1)
Purchase and sale of treasury shares, net - - - (139) - (139) - (139)
Purchase/disposal minority interests
- - - - - - (3) (3)
Total changes in equity in 2007 - 7 (18) 75 0 64 10 74
Equity at 31 March 2007 40 25 (25) 3,673 50 3,763 155 3,918
STATEMENT OF CHANGES IN EQUITY - 01.01.08-31.03.08
(DKKm) Share capital Hedging reserve Reserve for exchange rate adjust-ments
Retained earnings Pro¬posed divi¬dends DSV A/S share¬holders' share of equity
Minority interests Total equity
Equity at 1 January 2008 202 29 (77) 3,253 50 3,457 192 3,649
Recognised income and expense for the period - (29) (48) 645 - 568 - 568
Dividends distributed
- - - - - - (2) (2)
Purchase and sale of treasury shares, net - - - (306) - (306) - (306)
Purchase/disposal minority interests - - - - - - (174) (174)
Total changes in equity in 2008 - (29) (48) 339 - 262 (176) 86
Equity at 31 March 2008 202 - (125) 3,931 50 3,719 16 3,735
SEGMENT INFORMATION 2007
(DKKm)
Activities - primary segment
Condensed income statement Road Division Air & Sea Division Solutions
Division Parent Non-allocated items and elimination Total
Revenue 5,741 1,976 1,051 0 - 8,768
Intercompany sales (196) (54) (25) - - (275)
Revenue 5,545 1,922 1,026 0 - 8,493
Operating profit before special items 198 126 52 (6) - 370
Special items, net 4 4
Financials, net (57) (57)
Profit before tax (EBT) 198 126 52 (6) (53) 317
Total assets 13,106 2,597 3,491 7,682 (10,740) 16,136
SEGMENT INFORMATION 2008
(DKKm)
Activities - primary segment
Condensed income statement Road Division Air & Sea Division Solutions
Division Parent Non-allocated items and elimination Total
Revenue 4,967 2,546 1,263 83 - 8,859
Intercompany sales (175) (54) (28) (83) - (340)
Revenue 4,792 2,492 1,235 0 - 8,519
Operating profit before special items 197 161 36 (9) - 385
Special items, net 436 436
Financials, net (87) (87)
Profit before tax (EBT) 197 161 36 (9) 349 734
Total assets 12,031 2,820 3,808 7,619 (10,801) 15,477
INCENTIVE PROGRAMMES
DSV has launched incentive programmes consisting of options with a view to
motivating and retaining staff, senior staff and members of the Executive
Board. The incentive programmes launched are also to make staff and
shareholders identify with the same interests.
List of current programmes
Programme Number of employees Options granted Exercise price Market value at
date of grant
2003 465 150,000 21.7 -
2005 483 998,000 44.5 7.9
2006 - tranche I 767 1,500,000 82.0 24.3
2006 - tranche II 1 100,000 65.0 0.3
2007 818 1,500,000 97.5 29.2
2008 825 1,660,000 103.3 37.1
Options granted in 2003 are deemed to have vested before 1 January 2005.
Therefore no market value is calculated at the date of grant as a consequence
of the transitional provisions applicable for the transition to the IFRS
accounting standards at 1 January 2005.
Continued employment with DSV at the date of exercise is a condition for
exercise of options granted after 2003.
All exercise prices have been fixed on the basis of the quoted market value at
the date of grant.
The option schemes can be utilised by the employees by cash purchase of shares
only. The liability relating to incentive programmes is hedged by the Company's
treasury shares.
As regards the 2008 option scheme, Kurt Larsen has been granted 90,000 options
of a value of DKK 2 million, and Jens H. Lund has been granted 60,000 options
of a value of DKK 1.3 million.
A total of 1,076 employees held options at 31 March 2008.
Outstanding incentive programmes at 31 March 2008
Exercise period Executive Board Senior staff Total Average exercise price
per option
Outstanding options of 2003 scheme 01.01.09 - 31.12.09 0 50,000 50,000 21.7
Outstanding options of 2005 scheme 26.04.09 -
26.04.10 100,000 820,700 920,700 44.5
Outstanding options of 2006 scheme 01.04.09 - 31.03.10 0 30,000 30,000 65.0
Outstanding options of 2006 scheme 30.03.10 -
30.03.11 130,000 1,191,300 1,321,300 82.0
Outstanding options of 2007 scheme 01.04.10 -
30.03.12 130,000 1,338,500 1,468,500 97.5
Outstanding options of 2008 scheme 01.04.11 -
27.03.13 150,000 1,510,000 1,660,000 103.3
Outstanding at 31 March 2008 510,000 4,940,500 5,450,500 85.7
Exercise period open at 31 March 2008 0 0 0
The weighted average remaining life at 31 March 2008 was 3.7 years. The
aggregate market value was DKK 173.1 million, of which options amounting to DKK
16.4 million were held by Executive Board members.
Calculation of market values
Programme Historical rolling three-year volatility Risk-free
interest rate Expected dividends Expected remaining life (years)
2008 scheme at date of grant 23.7% 4.06% 0.5% 3.3
Schemes outstanding at balance sheet date 24.4% 4.40% 0.5% 2.4
Overview of development in outstanding options
Executive Board Senior staff Total Average exercise price per option
Outstanding at 1 January 2007 230,000 2,527,230 2,757,230 60.6
Granted in 2007 130,000 1,370,000 1,500,000 97.5
Exercised in 2007 0 210,000 210,000 17.7
Options waived/expired 0 74,830 74,830 20.6
Outstanding at 31 March 2007 360,000 3,612,400 3,972,400 77.5
Outstanding at 1 January 2008 360,000 3,431,500 3,791,500 78.0
Granted in 2008 150,000 1,510,000 1,660,000 103.3
Exercised in 2008 0 1,000 1,000 82.0
Options waived/expired 0 0 0 0
Outstanding at 31 March 2008 510,000 4,940,500 5,450,500 85.7
The average share price as at the date of exercise in 2008 was DKK 98.7.