In This Article:
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Revenue Growth: Significantly higher due to increased volume and prices compared to last year.
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Gross Profit: Up 4.8% overall; ocean freight up 5.2%.
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EBIT Growth: Up 1.5% in constant currencies, marking year-on-year growth.
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EPS Growth: Sequential growth for the first time since Q4 2022.
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Cash Flow: Strong cash flow of DKK2.5 billion in Q3.
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Guidance Update: Narrowed from DKK15.5-17 billion to DKK16-17 billion.
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Air Freight Growth: Up 7% year-to-date and 8% for the quarter.
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Ocean Freight Growth: Up 7% year-to-date and 8% for the quarter.
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Road GP Margin: Around 19.5%, with operating margin at 5.2%.
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Solutions EBIT Margin: Hovering around 10%.
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Net Working Capital Ratio: 4.7%, expected to stabilize around 3% by year-end.
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Gearing Ratio: 1.7, with a target to remain below 2 times.
Release Date: October 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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DSV AS (DSDVF) announced the acquisition of Schenker in September, with capital raised in early October to support the transaction.
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The company reported year-on-year growth in EBIT for the first time in a while, indicating a recovery from previous downturns.
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Gross profit increased by 4.8%, and EBIT rose by 1.5% in constant currencies, showcasing financial improvement.
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DSV AS (DSDVF) has narrowed its guidance range, indicating confidence in achieving higher financial targets.
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The company has seen strong growth in air and ocean freight, with air freight up 7% for the year and ocean freight up 8% for the quarter.
Negative Points
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The road market in Europe is challenging, with declining gross profit margins and conversion ratios due to cost pressures.
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Cost inflation, particularly in IT and software licenses, is a concern, prompting the company to initiate cost-cutting programs.
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The NEOM project is experiencing slower-than-expected ramp-up, leading to limited activity in Q4 and early 2025.
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The company faces tough discussions with customers over price increases in the road segment, which could impact relationships.
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There is uncertainty about the timing of market stabilization in ocean freight, with potential impacts on gross profit per unit.
Q & A Highlights
Q: Can you discuss the composition of your gross profit in Air & Sea and the mix changes from pre-pandemic to now? Also, what is the underlying demand backdrop for Q4 and 2025? A: Jens Lund, Group CEO: The majority of our income in ocean freight is from services rendered, such as documentation and consolidation, rather than freight markups, with about 70% being service-related. In air freight, 50-60% is freight-related. Demand for Q4 and 2025 is expected to be subdued, but we anticipate gaining market share due to our commercial approach.