31 October 2007 STOCK EXCHANGE ANNOUNCEMENT NO. 266 Interim Announcement for the period ended 30 September 2007 and announcement of commencement of share buy-back programme Financial highlights for the period ended 30 September 2007 • Revenue amounted to DKK 25,824 million • Gross profit came to DKK 5,759 million • Operating profit before special items came to DKK 1,292 million • Profit before tax amounted to DKK 1,017 million • DSV's share of the profit for the period amounted to DKK 677 million, and the diluted adjusted earnings per share amounted to DKK 4.0 • Free cash flow for the period adjusted for the acquisition of enterprises amounted to DKK 428 million Group Management considers the results for the nine months ended 30 September 2007 very satisfactory. Upward revision of expectations for 2007 As a consequence of improved earnings in the first nine months of the year and the expectations for Q4 as well as an expected property sale, DSV revises the expectations for 2007 announced in the 2006 Annual Report. The expectations for the financial year 2007 are as follows: • Revenue is expected to be DKK 35,300 million • Operating profit before special items is expected to increase to DKK 1,875 million, including DKK 100 million from the expected profit from the sale of real property • Free cash flow for the period adjusted for the acquisition of enterprises is expected to reach DKK 1,250 million New share buy-back programme DSV will launch a new share buy-back programme of DKK 400 million according to the 'safe harbour' method. Yours faithfully DSV MANAGEMENT'S REVIEW DSV achieved very satisfactory financial results for the period under review. Revenue In the first nine months of 2007, DSV achieved a revenue increase of 11.0% relative to the same period of 2006. The increase in revenue is mainly attributable to the acquisition of Frans Maas. Accordingly, the organic growth was 3.2% in the first nine months of 2007. The organic growth increased in Q3, but is still influenced by the elimination of loss-making contracts and replacement of agents with own networks. NINE-MONTH REVENUE - REALISED 2007 VERSUS REALISED 2006 DKKm Nine-month revenue to 30 September 2006 23,262 Foreign currency translation adjustments (118) Acquisition and divestments of enterprises, net 1,940 Growth 740 Nine-month revenue to 30 September 2007 25,824 The revenue realised by the Group was 2.4% below budget. NINE-MONTH REVENUE - REALISED 2007 VERSUS BUDGET 2007 DKKm Nine-month revenue to 30 September 2007, budget 26,447 Foreign currency translation adjustments 41 Acquisition and divestments of enterprises, net 97 Growth (761) Nine-month revenue to 30 September 2007 25,824 Gross profit The consolidated gross margin ratio increased to 22.3% relative to 21.5% in the same period of 2006. The synergies realised in connection with the acquisition of Frans Maas as well as the merger of IT systems and adaptation of processes have had a positive impact on gross profit. The gross margin ratio realised was 0.7 percentage points above budget. Operating profit before special items The Group returned an operating profit before special items for the first nine months of 2007 of DKK 1,292 million compared with DKK 1,071 million for the corresponding period last year, equalling a growth of 20.6%. The ratio was 5.0% for the period compared with 4.6% for the same period of 2006. NINE-MONTH OPERATING PROFIT BEFORE SPECIAL ITEMS - REALISED 2007 VERSUS REALISED 2006 DKKm Nine-month operating profit before special items to 30 September 2006 1,071 Foreign currency translation adjustments (18) Acquisition and divestments of enterprises, net 11 Growth 228 Nine-month operating profit before special items to 30 September 2007 1,292 Operating profit before special items was 7.5% above budget. This is due to an improved gross margin ratio and to the fact that other external costs and amortisation and depreciation of intangibles, property, plant and equipment were below budget. NINE-MONTH OPERATING PROFIT BEFORE SPECIAL ITEMS - REALISED 2007 VERSUS BUDGET 2007 DKKm Nine-month operating profit before special items to 30 September 2007, budget 1,202 Foreign currency translation adjustments (2) Acquisition and divestments of enterprises, net 4 Growth 88 Nine-month operating profit before special items to 30 September 2007 1,292 When adjusted for amortisation of customer relationships of DKK 44 million and costs related to share-based payments of DKK 10 million, the Group's operating profit before special items came to DKK 1,346 million. The corresponding profit for 2006 amounted to DKK 1,103 million. Special items Special items represent a net cost of DKK 97 million for the period and primarily relate to restructuring costs in Germany and France. Special items were DKK 16 million below budget. This is attributable to a time lag compared with the budget. Financial expenses, net Financial expenses netted DKK 178 million for the period as against DKK 156 million for the same period of 2006. Net financial expenses were slightly above budget, which is attributable to rising interest expenses as a consequence of the increased interest-bearing debt. The increase in interest-bearing debt is mainly attributable to the share buy-backs made. Profit before tax Profit before tax came to DKK 1,017 million for the period as against DKK 665 million for the same period of 2006. Profit before tax for the period ended 30 September 2006 was affected negatively by one-off items of DKK 250 million net, while the profit before tax for the same period of 2007 was affected negatively by special items of DKK 97 million. When adjusted for these special items, the profit before tax for the period improved by DKK 199 million. The main reason for this increase is the higher activity level following the acquisition of Frans Maas and improved margin ratios, although they are partly offset by higher financial expenses. Profit before tax was 9.7% above budget. Diluted adjusted earnings per share Diluted adjusted earnings per share came to DKK 5.3 for 2007 compared with DKK 4.2 for 2006, corresponding to an increase of 26.2%. Balance sheet The balance sheet stood at DKK 16,721 million at 30 September 2007 as against DKK 16,062 million at 31 December 2006. The increase in the balance sheet total at 30 September 2007 is primarily attributable to the acquisition of enterprises and an increase in working capital. Equity On 30 April 2007, the Supervisory Board of DSV decided to buy back shares for up to DKK 400 million in the period from 30 April to 31 July 2007, both days inclusive. This share buy-back programme has been closed, and the Company has acquired treasury shares for DKK 400 million. On 3 August 2007, the Supervisory Board of DSV decided to buy back shares for up to DKK 500 million in the period from 3 August to 31 October 2007, both days inclusive. At 30 September 2007, DSV has bought back shares for an amount of DKK 319 million under this share buy-back programme. At 30 September 2007, Group equity came to DKK 3,678 million, DKK 183 million of which is attributable to minority interests. At 31 December 2006, Group equity came to DKK 3,844 million. The increase derived mainly from profit for the period, which is offset by share buy-backs to cover an incentive programme and a share buy-back programme as well as distribution of dividends to the DSV shareholders. DEVELOPMENT IN EQUITY DKKm 2006 2007 Equity at 1 January 3,323 3,844 Net profit for the period 463 710 Share buy-back, net (156) (825) Dividends (50) (50) Foreign currency translation adjustments (33) (22) Fair value adjustment of interest swaps 14 10 Other 9 11 Equity at 30 September 3,570 3,678 The solvency ratio exclusive of minority interests came to 20.9%. This is a decrease on 31 December 2006 when the corresponding ratio was 23.0%. The development is primarily attributable to share buy-backs and to an increase in the balance sheet total. At the Annual General Meeting of DSV on 30 April 2007, the shareholders resolved to reduce the nominal value of the shares in the Company and to issue bonus shares. The Company's share capital thus changed from DKK 40.3 million divided into 20.15 million shares of DKK 2 per share to DKK 201.5 million divided into 201.5 million shares of DKK 1 per share. Net working capital The Group's funds tied up in net working capital came to DKK 974 million at 30 September 2007 compared with DKK 722 million at 31 December 2006. The working capital increase is attributable to seasonal fluctuations and increased Air & Sea activities, which usually require large funds tied up in working capital. Another negative impact on the working capital is that the last day of Q3 is in a weekend. Finally, the current implementation of new IT systems and establishment of shared service centres imply that more working capital is tied up during a transitional phase. Net interest-bearing debt Net interest-bearing debt amounted to DKK 5,439 million at 30 September 2007 as against DKK 4,835 million at 31 December 2006. The increase is primarily attributable to share buy-backs, an increase in net working capital and acquisitions of enterprises, which are set off in part by cash flow from operating activities. Cash flow from operating activities Cash flow from operating activities came to DKK 682 million for the period compared with DKK 619 million for the same period of 2006. Cash flow from operating activities includes an increased profit before tax, which is set off in part by the increase in working capital. Cash flow from investing activities Cash flow from investing activities netted an outflow of DKK 362 million. Adjusted for the impact of acquisition of enterprises, cash flow from investing activities recorded a net outflow of DKK 254 million. Free cash flow Free cash flow for the period adjusted for the acquisition of enterprises amounted to DKK 428 million. Invested capital including goodwill and customer relationships The Group's invested capital including goodwill and customer relationships came to DKK 9,374 million at 30 September 2007 as against DKK 8,965 million at 30 September 2006, equal to an increase of DKK 409 million. The increase is mainly due to the working capital increase and acquisitions in the past year. ROIC including goodwill and customer relationships Return on invested capital including goodwill and customer relationships was 18.7% for the period compared with 19.2% for the same period of 2006. The development is primarily caused by an increase in average invested capital. Events after the balance sheet date of the Interim Report. As described below, the Supervisory Board of DSV has resolved to launch yet another share buy-back programme. On 30 October 2007, DSV signed a conditional agreement on the sale of real property situated in Brøndby. The accounting profit from the sale is expected to amount to about DKK 100 million. Simultaneously, DSV signed a six-year lease with the new property owner. At 30 October 2007, DSV has bought back shares for an amount of DKK 500 million under the share buy-back programme authorised by the Supervisory Board on 3 August 2007. Otherwise no significant events have occurred after the balance sheet date. Outlook for 2007 As a consequence of improved earnings in the first nine months of the year and the expectations for the last three months as well as the expected property sale, DSV revises the expectations for 2007 announced in the 2006 Annual Report. Revenue The revenue is expected to be DKK 35,300 million. Operating profit before special items Operating profit before special items is expected to increase to DKK 1,875 million, including DKK 100 million from the expected profit from the sale of real property. Special items, net Special items, net, are expected to remain unchanged at DKK 150 million. Financials, net Net financial expenses are expected to rise to DKK 245 million as a consequence of the increase in interest-bearing debt. Tax on profit for the year Changes in the Group's earnings pattern and a revision of the tax legislation in a number of the countries in which DSV has commercial activities imply an increase in the expected effective tax rate to about 30%. Net profit for the year Net profit for the year is expected to increase to DKK 1,050 million. Cash flow The Group's funds tied up in net working capital are expected to exceed the budgeted level. Investments in assets are expected to net a negative DKK 100 million for 2007. Free cash flow for the period adjusted for the acquisition of subsidiaries is expected to increase to DKK 1,250 million. Status of consolidation As previously communicated, DSV has a strong intention 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 finds that the Company should play an active role in the consolidation of the sector. At present, DSV is in dialogue with a number of transport and logistics companies. The interest is mainly focused on additional consolidations within Air & Sea. 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 400 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 30 October 2007, DSV holds 11,606,127 treasury shares of a nominal value of DKK 1 each, corresponding to 5.76% 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 operations 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. Considering the financial results achieved and the expectations for the remaining part of 2007, the Group's net interest-bearing debt should be around DKK 4.4-6.5 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. At the next 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 1 November 2007 to 29 February 2008, both days inclusive. During this period DSV will buy back own shares up to a maximum value of DKK 400 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, which 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 which is to make its own trading decisions independently of and without influence from DSV and execute the buy-backs within the announced limits. DSV will retain Danske Market, a division of Danske 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 400 million and the maximum number of shares for acquisition is 8,543,873 corresponding to 4.24% of the current share capital of DSV A/S. • No shares may be bought back at a price deviating by more than 5% from the most recently quoted market price of the shares at the date of acquisition, or which otherwise exceeds the higher of the price of the last independent trade and the highest current independent bid price on the OMX Nordic Exchange 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 203,938 shares in the Company may be purchased, corresponding to 25% of the average trading volume of DSV shares on the OMX Nordic Exchange in September 2007. • The reporting obligations under Danish law and the rules of the OMX Nordic Exchange must be fulfilled within the applicable time-limits. Audit This Interim Announcement has not been audited or reviewed. EXCHANGE RATES Currency Realised Year-to-date average Budget 30.09.06 30.09.07 30.09.06 30.09.07 2007 Euroland EUR 746 745 746 745 745 UK GBP 1,100 1,070 1,090 1,101 1,100 Norway NOK 91 97 94 92 92 Sweden SEK 80 81 80 81 80 USA USD 589 526 601 554 580 DKK for 100 currency units DSV GROUP - INCOME STATEMENT FOR THE PERIOD, SUMMARY (DKKm) 01.01.06-30.09.06 Realised 01.01.07-30.09.07 Budget 01.01.07-30.09.07 Realised Revenue 23,262 26,447 25,824 Direct costs 18,258 20,727 20,065 Gross profit 5,004 5,720 5,759 Other external expenses 1,267 1,496 1,405 Staff costs 2,432 2,693 2,761 Operating profit before amortisation, depreciation and special items 1,305 1,531 1,593 Amortisation, depreciation and impairment of intangibles, property, plant and equipment, excluding customer relationships 206 286 257 Amortisation and impairment of customer relationships 28 43 44 Operating profit before special items 1,071 1,202 1,292 Special items, net (250) (113) (97) Operating profit (EBIT) 821 1,089 1,195 Financial expenses, net 156 162 178 Profit before tax 665 927 1,017 Calculated tax 202 269 307 Net profit for the period 463 658 710 Net profit for the period is allocated to: Shareholders of DSV A/S 441 638 677 Minority interests 22 20 33 DSV GROUP - BALANCE SHEET, SUMMARY (DKKm) 31.12.06 30.09.07 Goodwill and customer relationships (Acquisition cost: DKK 5,429 million) 4,755 4,888 Other intangibles, property, plant and equipment 3,928 4,045 Other non-current assets 410 441 Total non-current assets 9,093 9,374 Receivables 6,562 6,950 Cash 407 397 Total current assets 6,969 7,347 Total assets 16,062 16,721 Equity including minority interests 3,844 3,678 Interest-bearing long-term debt 4,604 5,053 Other non-current liabilities, including provisions 1,136 1,231 Non-current liabilities 5,740 6,284 Interest-bearing short-term debt 638 783 Other short-term debt 5,840 5,976 Total current liabilities 6,478 6,759 Total equity and liabilities 16,062 16,721 Number of employees: 19,554. DSV GROUP - CASH FLOW STATEMENT FOR THE PERIOD (DKKm) 01.01.06-30.09.06 01.01.07-30.09.07 Profit before tax 665 1,017 Reversed amortisation and depreciation of intangibles, property, plant and equipment 234 301 Other non-cash operating items 0 10 Changes in working capital (153) (379) Changes in provisions 77 0 Corporation tax paid (204) (267) Cash flow from operating activities 619 682 Acquisition/divestment of subsidiaries and activities, net (1,537) (108) Acquisition/divestment of intangibles, property, plant and equipment, net (9) (287) Acquisition/divestment of financial assets, net 0 33 Cash flow from investing activities (1,546) (362) Free cash flow (927) 320 Financial payments, net 1,370 580 Cash items under equity, net (204) (873) Cash flow from financing activities 1,166 (293) Cash flow for the period 239 27 Cash and cash equivalents at beginning of period 385 407 Cash flow for the period 239 27 Foreign currency translation adjustments (12) (37) Cash and cash equivalents at end of period 612 397 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 (927) 320 Acquisition/divestment of subsidiaries and activities, net 1,537 108 Normalisation of net working capital in subsidiaries and activities acquired 100 0 Adjusted free cash flow 710 428 Specification 2: Statement of enterprise value of acquirees: Acquisition/divestment of subsidiaries and activities, net 1,537 108 Interest-bearing debt 1,877 10 Normalisation of net working capital in subsidiaries and activities acquired 100 0 Enterprise value of acquirees 3,514 118 FINANCIAL HIGHLIGHTS At 30.09.2006 At 30.09.2007 Financial ratios (%) Gross margin ratio 21.5 22.3 EBITDA margin 5.6 6.2 EBITA margin 4.6 5.0 EBIT margin 3.5 4.6 ROIC including goodwill and customer relationships 19.2 18.7 ROE 17.4 26.0 Equity ratio (exclusive of minority interests) 21.2 20.9 Key figures (DKKm) Adjusted earnings 635 790 Net interest-bearing debt 5,162 5,439 Invested capital including goodwill and customer relationships 8,965 9,374 Share ratios1) Earnings per share for the year (DKK) 3.0 4.6 Diluted adjusted earnings per share for the period (DKK) 3.1 4.0 Diluted adjusted earnings per share for the year (DKK) 4.2 5.3 Total number of shares (1,000) 201,500 201,500 Average number of shares (1,000) 198,550 196,381 Average number of diluted shares (1,000) 202,080 199,860 1) Comparative figures at 30 September 2006 have been adjusted to the changed denomination of the Company's shares and the issue of bonus shares. The financial ratios have been calculated in accordance with "Recommendations & Financial Ratios 2005" published by the Danish Society of Financial Analysts. See also DSV's 2006 Annual Report, page 56. SUMMARY OF DIVISION RESULTS Segmentation change DSV has changed its segmentation of Frans Maas and own activities in 2007 relative to 2006. In 2007, the Frans Maas activities are reported under the individual divisions, as opposed to previously when it was mainly booked under the Road Division. This has resulted in a transfer in the 2007 budget of about DKK 3,500 million of the acquired revenue from the Road Division to the Air & Sea Division (about DKK 400 million) and to the Solutions Division (about DKK 3,100 million). Road Division Revenue The revenue of the Road Division was 2.7% below budget. Norway, Germany and South Eastern Europe outperformed, while the Netherlands and Sweden underperformed relative to budget. Gross profit The gross margin ratio of the Road Division came to 21.2% in the period as against the budgeted 20.8%. This is mainly due to elimination of loss-making activities and realised synergies in connection with the acquisition of Frans Maas. Operating profit before special items The Road Division achieved an operating profit before special items that was 4.3% above budget. Denmark, Norway and the UK outperformed, while the Netherlands, Germany, Spain, France and Italy underperformed relative to budget. Balance sheet The balance sheet of the Road Division stood at DKK 13,451 million at 30 September 2007 as against DKK 14,094 million at 31 December 2006. The main reason for the decline is the reduction of non-current assets following the changed segmentation of divisions. Net working capital The Road Division's funds tied up in net working capital came to DKK 671 million at 30 September 2007 compared with DKK 598 million at 31 December 2006. The change is due to the segmentation change in the divisions, which is partly offset by the current implementation of new IT systems and establishment of shared service centres at the former Frans Maas locations, which imply that more funds are tied up in working capital in a transitional phase. Group Management is very satisfied with the development and results of the Division. Air & Sea Division Revenue The revenue of the Air & Sea Division was 1.1% below budget in the period. Germany and the Netherlands underperformed, while Denmark, the UK & Ireland and China outperformed relative to budget. Gross profit The gross margin ratio of the Air & Sea Division came to 20.8% in the period as against the budgeted 19.3%. Operating profit before special items The operating profit before special items of the Air & Sea Division was 13.9% above budget for the period ended 30 September 2007. The USA, the Project Department in Denmark, the UK & Ireland and China outperformed, while the Netherlands underperformed relative to budget. Balance sheet The balance sheet of the Air & Sea Division stood at DKK 3,136 million at 30 September 2007 as against DKK 2,766 million at 31 December 2006. The increase is mainly due to the acquisition of enterprises in the second quarter of 2007, which is partly offset by payment of dividends to DSV A/S. Net working capital The Air & Sea Division's funds tied up in net working capital came to DKK 231 million at 30 September 2007 compared with DKK 91 million at 31 December 2006. The change is due to increasing activities and the current implementation of new IT systems and establishment of shared service centres at the former Frans Maas locations, which imply that more funds are tied up in working capital in a transitional phase. Group Management is very satisfied with the development and results of the Division. Solutions Division Revenue The revenue of the Solutions Division was 4.5% above budget in the period. Both the Nordic countries and the rest of Europe outperformed relative to budgets. Gross profit The gross margin ratio of the Solutions Division came to 27.4% in the period as against the budgeted 28.4%. Operating profit before special items Operating profit before special items came to DKK 165 million for the period ended 30 September 2007, which is better than the budgeted amount of DKK 158 million. This is attributable to the rest of Europe, the Nordic countries being slightly below budget. Balance sheet The balance sheet of the Solutions Division stood at DKK 3,411 million at 30 September 2007 as against DKK 554 million at 31 December 2006. The increase is mainly attributable to the segmentation change in the divisions. Net working capital The Solutions Division's funds tied up in net working capital came to DKK 127 million at 30 September 2007 compared with DKK 61 million at 31 December 2006. The increase is mainly attributable to the segmentation change in the divisions and the current implementation of new IT system. Group Management is very satisfied with the development in and results of the Division. ROAD DIVISION INCOME STATEMENT FOR THE PERIOD, SUMMARY (DKKm) 01.01.06-30.09.06 Realised 01.01.07-30.09.07 Budget 01.01.07-30.09.07 Realised Revenue 17,449 17,506 17,042 Direct costs 13,723 13,858 13,431 Gross profit 3,726 3,648 3,611 Other external expenses 975 943 882 Staff costs 1,894 1,853 1,879 Operating profit before amortisation, depreciation and special items 857 852 850 Amortisation, depreciation and impairment of intangibles, property, plant and equipment, excluding customer relationships 192 208 184 Amortisation and impairment of customer relationships 23 13 8 Operating profit before special items 642 631 658 BALANCE SHEET, SUMMARY (DKKm) 31.12.06 30.09.07 Goodwill and customer relationships 2,307 2,437 Other intangibles, property, plant and equipment 3,707 2,900 Other non-current assets 542 598 Total non-current assets 6,556 5,935 Receivables 5,278 4,708 Cash and intercompany balances 2,260 2,808 Total current assets 7,538 7,516 Total assets 14,094 13,451 Equity 827 1,349 Interest-bearing long-term debt 848 401 Other non-current liabilities, including provisions 1,037 949 Non-current liabilities 1,885 1,350 Interest-bearing short-term debt, including intercompany debt 6,702 6,715 Other short-term debt 4,680 4,037 Total current liabilities 11,382 10,752 Total equity and liabilities 14,094 13,451 ROIC came to 13.9%. The calculation of ROIC included DKK 2,650 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: 11,415. Activities The Road Division handles transport (full and part loads and mixed cargo) by trucks domestically and between the European countries. The services are produced by Group enterprises all over Europe. The actual transport operations are basically outsourced to sub-contractors. The Division in brief When compared, the market conditions throughout Europe are quite different. On the whole, progress is seen almost everywhere, but earnings are generated in Northern, Eastern and Western Europe. Compared with the same period last year, the Division made handsome progress. The great work carried out to integrate and develop the former partner countries is no doubt progressing in a sensible manner. The outcome of these efforts has contributed to new growth and improved quality, thereby giving rise to a higher EBITA margin. The major challenges are still Germany, Spain and the Netherlands, which are, however, markets with optimistic undertones. The demand for Road services has been great during the past couple of years. Generally, the Division does not sense any weakened demand for these services. COUNTRY DEVELOPMENT IN REVENUE DEVELOPMENT IN OPERATING PROFIT BEFORE SPECIAL ITEMS (EBITA) FOCUS Denmark Slightly below budget Outperformed budget and markedly better than last year The strongest enterprise of the Division - good management - focus on continued growth. Sweden Slightly below budget Better than budget year-to-date and considerably better than the same period last year A good effort in the Swedish enterprise. The 4% target applicable so far has been reached. The upper threshold should be raised to 5%, Norway Outperformed budget 50% above budget and markedly better than last year Handsome operating results. Lean organisation. Growth focus is to maintain growth rate and high EBITA margin. Finland Outperformed budget On a level with budget Well run enterprise. Management has spent resources on assisting the Solutions Division. EBITA margin ought to be improved. UK Slightly below budget Outperformed budget Very handsome operating profit. One of the finest turnarounds ever seen in the Division. EBITA margin increased more than twofold compared with Q3 2006. Ireland Slightly below budget Slightly below budget EBITA margin ought to be improved by 1-2%, and growth should increase. Well run enterprise. Germany Outperformed budget Below budget Very handsome improvement of operating results compared with Q3 2006. The country has benefited from changes in internal rates. The Netherlands Below budget Below budget Disappointing results. The enterprise has potential, history and size for far better results. There is a new management in the country. Belgium Outperformed budget Slightly better than budget Solid results as always in Belgium. Has handled the integration in a fine manner. Will no doubt revert to a higher EBITA margin. France Slightly below budget Below budget, but improvement during the last three months Good efforts made all along the line. Good reason to believe in a positive 2008. Italy Slightly below budget Below budget The county manages to get ever more hold on the comprehensive activities. EBITA margin ought to be improved in 2008. Spain Below budget Below budget Operating results not reasonable relative to the network potential and the Spanish facilities. Portugal Outperformed budget On a level with budget Well run and positive enterprise with good EBITA margin. Considerably better than Q3 2006. Poland Below budget Almost on a level with budget Good EBITA margin, considerable improvement compared with Q3 2006. The Baltics, Russia & Ukraine Slightly below budget Outperformed budget Fine growth in both revenue and EBITA. Good management at all levels. Czech Republic Below budget Outperformed budget Very handsome result. Good integration. Good management. Central Europe (Austria, Switzerland, Hungary and Slovakia) On a level with budget Outperformed budget Fair growth. Higher EBITA and more growth possible in this area. South Eastern Europe (Greece, Bulgaria, Slovenia, Croatia, Serbia, Turkey and Morocco) Considerably better than budget Outperformed budget Handsome EBITA margin. The area should maintain growth and improve EBITA margin. Revenue and operating profit before special items by markets Revenue Operating profit before special items Operating profit before special items (%) (DKKm) Realised Budget Realised Realised Budget Realised Realised Budget Realised 01.01.06-30.09.06 01.01.07-30.09.07 01.01.07-30.09.07 01.01.06-30.09.06 01.01.0 7-30.09.07 01.01.07-30.09.07 01.01.06-30.09.06 01.01.07-30.09.07 01.01.07-30.09. 07 Denmark 3,366 3,655 3,554 186 195 233 5.5 5.3 6.6 Sweden 3,019 3,154 3,024 104 97 101 3.4 3.1 3.3 Norway 2,224 2,350 2,461 92 107 141 4.1 4.6 5.7 Finland 879 904 934 26 30 30 3.0 3.3 3.2 UK 1,588 1,575 1,539 41 61 86 2.6 3.9 5.6 Ireland 447 442 433 19 18 20 4.3 4.1 4.6 Germany 2,700 1,656 1,749 (36) (3) (23) -1.3 -0.2 -1.3 The Netherlands 1,461 940 709 119 49 11 8.1 5.2 1.6 Belgium 799 699 683 65 38 42 8.1 5.4 6.1 France 831 1,038 1,027 (19) (14) (24) -2.3 -1.3 -2.3 Italy 370 713 661 0 16 5 0.0 2.2 0.8 Spain 271 419 362 (7) (9) (26) -2.6 -2.1 -7.2 Portugal 62 110 114 (1) 4 4 -1.6 3.6 3.5 Poland 395 302 301 15 14 13 3.8 4.6 4.3 The Baltics, Russia & Ukraine 618 776 785 31 39 43 5.0 5.0 5.5 Czech Republic 150 182 173 6 7 12 4.0 3.8 6.9 Central Europe 250 426 429 (2) 1 4 -0.8 0.2 0.9 (Austria, Switzerland, Hungary and Slovakia) South Eastern Europe 299 251 316 11 5 8 3.7 2.0 2.5 (Greece, Bulgaria, Slovenia, Croatia, Serbia, Turkey and Morocco) Total 19,729 19,592 19,254 650 655 680 3.3 3.3 3.5 Group 417 630 613 15 (11) (14) - - - Amortisation of customer relationships 0 0 0 (23) (13) (8) - - - Elimination (2,697) (2,716) (2,825) 0 0 0 - - - Net 17,449 17,506 17,042 642 631 658 3.7 3.6 3.9 AIR & SEA DIVISION INCOME STATEMENT FOR THE PERIOD, SUMMARY (DKKm) 01.01.06-30.09.06 Realised 01.01.07-30.09.07 Budget 01.01.07-30.09.07 Realised Revenue 5,650 6,616 6,543 Direct costs 4,505 5,339 5,181 Gross profit 1,145 1,277 1,362 Other external expenses 260 281 293 Staff costs 473 542 553 Operating profit before amortisation, depreciation and special items 412 454 516 Amortisation, depreciation and impairment of intangibles, property, plant and equipment, excluding customer relationships 13 17 17 Amortisation and impairment of customer relationships 5 5 7 Operating profit before special items 394 432 492 BALANCE SHEET, SUMMARY (DKKm) 31.12.06 30.09.07 Goodwill and customer relationships 745 918 Other intangibles, property, plant and equipment 100 104 Other non-current assets 37 38 Total non-current assets 882 1,060 Receivables 1,301 1,528 Cash and intercompany balances 583 548 Total current assets 1,884 2,076 Total assets 2,766 3,136 Equity 491 597 Interest-bearing long-term debt 1 32 Other non-current liabilities, including provisions 83 84 Non-current liabilities 84 116 Interest-bearing short-term debt, including intercompany debt 981 1,126 Other short-term debt 1,210 1,297 Total current liabilities 2,191 2,423 Total equity and liabilities 2,766 3,136 ROIC came to 41.6%. The calculation of ROIC included DKK 1,441 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: 2,889. 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 Compared with the same period last year, the Division saw a growth of 20%. The EBITA margin of the Division for the period under review was 7.6%. In brief, this is a fantastic result of a very strong division. Except for one single European country, all markets experienced progress compared with the same period of 2006. The falling exchange rate of dollar naturally had a negative impact on the results in the USA, Canada, China, Hong Kong, the remainder of the Far East and Australia. It is obvious that the outstanding challenge of the Division is its size. This is no novelty - it has been said many times, but that does not make is less correct. Group Management in Copenhagen, Division Management and key employees are aware of and committed to following the acquisition potentials throughout the world. In reality this means particular focus on Europe, the USA and the Far East. If possible, this awareness is keener now than ever before. Maybe it is somewhat too optimistic to aim at a continued growth of 20%, but in general there are no indications that the demand will decrease. COUNTRY DEVELOPMENT IN REVENUE DEVELOPMENT IN OPERATING PROFIT BEFORE SPECIAL ITEMS (EBITA) FOCUS USA Outperformed budget Considerably better than budget and markedly better than Q3 2006 The highest EBITA margin ever. Handsome operating results, high quality and good management at all levels. Denmark Much better than budget Outperformed budget Handsome operating results. Good management. Good balance within leadership team. Denmark Project Dept. Slightly below budget Considerably better than budget and considerably better than last year Good management, solid operating results. Norway On a level with budget Outperformed budget Lean enterprise. Best European EBITA margin in the DSV world. Comparable to the USA and Far East. Sweden Slightly below budget On a level with budget Handsome improvement of EBITA margin. Higher growth possible in the large Swedish market. Finland Slightly below budget Slightly below budget Good EBITA margin, but growth too small. UK & Ireland Much better than budget Outperformed budget Very handsome growth. EBITA margin ought to be improved. Germany Slightly below budget On a level with budget Historically, the EBITA margin was low in the German enterprise, although it has improved slightly. The Netherlands Below budget Below budget Both Road and Air & Sea have encountered operating difficulties. There is reason to believe that the enterprise is on the right track. Central Europe (Poland, Hungary, the Czech Republic and Turkey) Outperformed budget Below budget In fact the EBITA margin is too low, but the enterprise is on the right track. Canada Below budget On a level with budget Impressive turnaround. Good EBITA margin. China Outperformed budget Outperformed budget Good management, fine operating results. Handsome EBITA margin. Good growth management and related recruiting. Hong Kong Below budget Below budget Very high EBITA margin, well run enterprise. Australia & New Zealand Much better than budget Outperformed budget Large growth. Handsome EBITA margin. More growth. Other Far East (Indonesia, Thailand, Singapore, Malaysia, the Philippines, Korea, Taiwan, Vietnam, India, Bangladesh and the United Arab Emirates) Outperformed budget Outperformed budget Nicely growing revenue and EBITA. Revenue and operating profit before special items by markets Revenue Operating profit before special items Operating profit before special items (%) (DKKm) Realised Budget Realised Realised Budget Realised Realised Budget Realised 01.01.06-30.09.06 01.01.07-30.09.07 01.01.07-30.09.07 01.01.06-30.09.06 01.01.0 7-30.09.07 01.01.07-30.09.07 01.01.06-30.09.06 01.01.07-30.09.07 01.01.07-30.09. 07 USA 1,336 1,364 1,334 140 128 150 10.5 9.4 11.2 Denmark 1,080 1,204 1,301 63 67 71 5.8 5.6 5.5 Project Dept. 476 515 489 18 20 36 3.8 3.9 7.4 Norway 189 234 234 15 17 22 7.9 7.3 9.4 Sweden 414 325 308 16 12 18 3.9 3.7 5.8 Finland 165 189 167 8 9 8 4.8 4.8 4.8 UK & Ireland 666 845 958 29 31 41 4.4 3.7 4.3 Germany 799 812 750 20 18 19 2.5 2.2 2.5 The Netherlands 195 423 369 9 25 12 4.6 5.9 3.3 Central Europe 103 195 199 2 7 3 1.9 3.6 1.5 (Poland, Hungary, the Czech Republic and Turkey) Canada 111 111 87 1 5 4 0.9 4.5 4.6 China 333 343 388 26 31 42 7.8 9.0 10.8 Hong Kong 268 336 302 27 36 35 10.1 10.7 11.6 Australia & New Zealand 143 172 193 6 8 12 4.2 4.7 6.2 Other Far East 353 475 503 19 23 27 5.4 4.8 5.4 (Indonesia, Thailand, Singapore, Malaysia, the Philippines, Korea, Taiwan, Vietnam, India, Bangladesh and the United Arab Emirates) Total 6,631 7,543 7,582 399 437 500 6.0 5.8 6.6 Group 8 4 4 0 0 (1) - - - Amortisation of customer relationships 0 0 0 (5) (5) (7) - - - Elimination (989) (931) (1,043) 0 0 0 - - - Net 5,650 6,616 6,543 394 432 492 7.0 6.5 7.5 SOLUTIONS DIVISION INCOME STATEMENT FOR THE PERIOD, SUMMARY (DKKm) 01.01.06-30.09.06 Realised 01.01.07-30.09.07 Budget 01.01.07-30.09.07 Realised Revenue 722 3,003 3,138 Direct costs 554 2,151 2,278 Gross profit 168 852 860 Other external expenses 52 324 295 Staff costs 65 287 319 Operating profit before amortisation, depreciation and special items 51 241 246 Amortisation, depreciation and impairment of intangibles, property, plant and equipment, excluding customer relationships 11 60 54 Amortisation and impairment of customer relationships 0 23 28 Operating profit before special items 40 158 164 BALANCE SHEET, SUMMARY (DKKm) 31.12.06 30.09.07 Goodwill and customer relationships 81 691 Other intangibles, property, plant and equipment 111 1,042 Other non-current assets 26 133 Total non-current assets 218 1,866 Receivables 250 959 Cash and intercompany balances 86 586 Total current assets 336 1,545 Total assets 554 3,411 Equity 276 369 Interest-bearing long-term debt 8 479 Other non-current liabilities, including provisions 18 200 Non-current liabilities 26 679 Interest-bearing short-term debt, including intercompany debt 63 1,531 Other short-term debt 189 832 Total current liabilities 252 2,363 Total equity and liabilities 554 3,411 ROIC came to 16.5%. The calculation of ROIC included DKK 1,338 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: 5,251. Activities The Solutions Division defines solutions as comprehensive logistics solutions, including outsourcing of stocks, distribution and a number of services related to the customers' 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 The Division had a very good three-month period. Results were slightly better than budget, despite the efforts made by the Division to find a solution to the difficult conditions of the Road Division in Germany and France. Considerable efforts are made to sort out the structure of the logistics and road activities in these countries. These efforts do not come for free; but the work performed by Management and staff of the Division is of high quality and has greatly benefited the Road Division. The Division has a considerable pipeline and displays impressive efforts to make sales and new contracts, while at the same time having shown its capability to cooperate with the two other divisions. This is a field experiencing great demand, and there is no doubt that this demand will continue. COUNTRY DEVELOPMENT IN REVENUE DEVELOPMENT IN OPERATING PROFIT BEFORE SPECIAL ITEMS (EBITA) FOCUS Nordic countries (Denmark, Norway, Sweden and Finland) Outperformed budget Slightly below budget Positive that Finland has improved. By contrast, it is worrying that Denmark displayed weakness during the three-month period. The EBITA margin ought to be higher in the Nordic countries. Other Europe (The UK, Germany, the Netherlands, Belgium, France, Poland and Romania) Outperformed budget Outperformed budget In spite of the work performed to the benefit of the Road Division, earnings and EBITA margin are still impressive. Revenue and operating profit before special items by markets Revenue Operating profit before special items Operating profit before special items (%) (DKKm) Realised Budget Realised Realised Budget Realised Realised Budget Realised 01.01.06-30.09.06 01.01.07-30.09.07 01.01.07-30.09.07 01.01.06-30.09.06 01.01.0 7-30.09.07 01.01.07-30.09.07 01.01.06-30.09.06 01.01.07-30.09.07 01.01.07-30.09. 07 Nordic countries 779 736 820 40 30 25 5.1 4.1 3.0 (Denmark, Norway, Sweden and Finland) Other Europe 0 2,347 2,419 0 151 167 - 6.4 6.9 (The UK, Germany, the Netherlands, Belgium, France, Poland and Romania) Total 779 3,083 3,239 40 181 192 5.1 5.9 5.9 Group 3 4 4 0 0 0 - - - Amortisation of customer relationships 0 0 0 0 (23) (28) - - - Elimination (60) (84) (105) 0 0 0 - - - Net 722 3,003 3,138 40 158 164 5.5 5.3 5.3 SHAREHOLDER INFORMATION Remuneration of the Executive Board In the first three quarters of 2007, DKK 9.7 million was paid out to the members of the Executive Board of DSV as remuneration. DKK 9.1 million was paid out in the corresponding period of 2006. Incentive programme DSV has launched an incentive programme consisting of options with a view to motivating and retaining staff, senior staff and members of the Executive Board. The incentive programme launched is also to make staff and shareholders identify with the same interests. The market value of the Group's incentive programme at 30 September 2007 amounted to DKK 213.6 million, DKK 20.0 million of which constituted the proportion held by members of the Executive Board. The market value is calculated according to the Black & Scholes model. Latest important stock exchange announcements 3 August 2005 (announcement No. 252): Interim Announcement for the period ended 30 June 2007 30 October 2007 (announcement No. 265): Share buy-back by DSV A/S - regarding the closing of a share buy-back programme of DKK 500 million. Investor teleconference DSV invites investors, shareholders, analysts and others to participate in an investor teleconference on 31 October 2007 at 11:00 a.m. At the conference, DSV will present this Interim Announcement. Participants will have the opportunity to ask questions. Participants from DSV will be: Kurt K. Larsen, Group CEO Jens H. Lund, CFO The phone number for the teleconference is +44 (0) 208 817 9301. The conference will be in English. No prior registration is required to attend the teleconference. Web-based investor teleconference The teleconference can be viewed and heard directly at the DSV website (http://www.dsv.com) or via the OMX Nordic Exchange (http://www.omxgroup.com/nordicexchange/). Questions can only be asked by telephone. Please note that Microsoft Media Player is required to view the teleconference. 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 this Interim Announcement 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. Statement by the Executive and Supervisory Boards Today, the Board of Directors and the Executive Board have reviewed and approved the Interim Announcement of DSV A/S for the period ended 30 September 2007. The Interim Report (unaudited) has been prepared in accordance with the rules on recognition and measurement of the International Financial Reporting Standards (IFRS) as well as additional Danish disclosure requirements of the financial reporting of listed companies. We consider the accounting policies applied to be appropriate and the estimates made acceptable so that the Interim Report gives a true and fair view of the Group's assets, equity, liabilities and financial position at 30 September 2007 and of the results of the Group's activities and cash flow for the nine-month period ended 30 September 2007. Brøndby, 31 October 2007 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