DSV (DSV) Q4 2023 earnings summary

Executive summary

• Soft-market conditions weighed on 2023 results; EBIT before special items was DKK 17.7bn, in line with guidance. Cash flow remained solid, with DKK 15.4bn allocated to shareholders.

• 2024 EBIT before special items guidance is DKK 15.0-17.0bn; strategic growth initiatives may have only a gradual impact during the year.

Financial highlights

• FY 2023 revenue was DKK 150,785m, down 34.1% YoY; gross profit was DKK 43,818m, down 13.4%, and EBIT before special items was DKK 17,723m, down 27.4%.

• FY 2023 profit for the period was DKK 12,407m, down 29.8% YoY; Q4 profit was DKK 2,937m versus DKK 3,789m in Q4 2022.

• Q4 2023 revenue was DKK 36,528m, down 26.3% YoY; gross profit was DKK 10,447m, down 7.5%, and EBIT before special items was DKK 3,950m, down 13.9%.

• Lower freight rates and declining volumes reduced revenue; gross margin benefited from high Air & Sea yields and improved margins in Road and Solutions.

Outlook and guidance

• FY 2024 EBIT before special items guidance is DKK 15.0-17.0bn; effective tax rate assumption is 24.0%.

• Air and sea markets are expected to grow 3-4% in 2024; gross profit yields are expected to stabilise around or slightly below Q4 2023 levels.

• Road market outlook is flat or low growth; Solutions is expected to grow faster. Capacity and costs will be adjusted as activity develops.

• Planned NEOM joint venture is excluded from 2024 guidance; strategic growth initiatives may contribute gradually during 2024.

• 2026 targets are maintained: group conversion ratio above 45% and pre-tax ROIC above 20%; targets assume organic growth and exclude large acquisitions.