DSVs Business model and strategy

CEO Jens Bjorn Andersen

DSV Capital Markets Day, 11 May 2010

Introduction
DSV is a global supplier of transport and
logistics services with offices in more than 60
countries. Together with our partners and
agents, we offer transport and logistics
solutions in more than 110 countries.
DSV is listed on NASDAQ OMX Copenhagen
and included in the OMXC20 Index as one of
the 20 most actively traded shares.

2 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

DSV at a glance

Business units:

International and domestic road transport services in a network of own offices throughout Europe
Air and sea freight forwarding services world wide
Logistics solutions services in Europe

3 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Our world - 2009

Turnover 36,085 million DKK

EBITA 1,703 million DKK
21,280 employees
Volumes in Air 175,000 tons
Volumes in Sea 625,000 TEUs
Has more than 17,000 trucks on the roads every day
2,200,000 m of warehousing
Presence in 61 homelands
Transport activities in more than 110 countries
Strong presence in Europe, Asia, North America

(DSV 2009 Annual Report)

4 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

DSVs present market position

The worlds 15 largest forwarders by 2009 turnover

Rank

Company

Headquarter

DHL Logistics

Germany

30.645

Kuehne & Nagel

Switzerland

16.032

DB Schenker Logistics

Germany

14.575

CEVA Logistics

Netherlands

7.648

DSV

Denmark

6.722

C.H. Robinson

USA

5.976

Agility

Kuwait

5.360

Panalpina

Switzerland

5.350

SNCF Geodis

France

5.330

10

UPS Supply Chain Solutions

USA

5.080

11

Dachser & Co

Germany

4.575

12

Expeditors International

USA

4.092

13

Bollore

France

3.657

14

Hellmann Worldwide Logsitics

Germany

3.630

15

UTI Worldwide

USA

3.545

Source: Journal of Commerce

5 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Revenue (USDm 2009)

DSV Group - Turnover Development

Below chart illustrates the development in Turnover and CAGR for DSV Group from
2002 2009.
Turnover in million DKK

40000
31,972

35000

34,899

37,435

36,085

2008

2009

30000
23,015

25000
20000

17,933

17,676

18,092

15000
10000
5000
0
2002
2003
2004
* CAGR: Compound Annual Growth Rate

2005

2006

2007

DSV is a high growth company

* CAGR=[(Current Value/Base Value)^(1/number of years)]-1

6 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

DSV Group Gross Profit Development

Below chart illustrates the development in Gross Profit and the Gross Margin for DSV Group
from 2002 - Q1 2010.
Gross Profit in million DKK
10000
9000

Gross Profit

8000

6,904

7000
6000
5000

4,075

7,704

8,175

40.0%
35.0%
30.0%

4,667
3,888

4000
3000

45.0%

8,898

Gross Margin

3,863

25.0%
24.7%

22.7%

22.0%

2000

21.4%

20.3%

21.6%

22.1%

22.7%

21.8%

20.0%
15.0%

1000
0

10.0%
2002

2003

2004

2005

2006

2007

7 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

2008

2009

Q1 2010

DSV Group EBITA Development

Below chart illustrates the development in EBITA, EBITA margin and Gross Profit conversion
ratio for DSV Group from 2002 - Q1 2010.
EBITA in million DKK
2500

EBITA

EBITA margin

82.2%

Gross Profit conversion ratio

1,882

2000

72.2%

1,936
1,703

1,504

62.2%
52.2%

1500
1,123
1000

783
19.2%

861

854

22.1%

22.1%

24.1%

42.2%
21.8%

24.4%

32.2%

23.7%
19.1%

20.6%

4.7%

4.7%

500
4.4%

4.9%

4.7%

4.9%

4.7%

5.4%

5.2%

22.2%
12.2%
2.2%

2002

2003

2004

2005

2006

2007

2008

2009

Q1 2010

DSVs EBITA margin is among the best in class / highest in the

industry

8 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

DSV Group ROIC Development

Below chart illustrates the development in ROIC and Invested Capital for DSV Group from
2002 2009.
Invested Capital in million DKK
14000

13,323

Invested Capital
ROIC including goodwill and customer relationships

12000

9,057

10000

13,100

35.0%
30.0%

9,151

8000
6000

25.0%
5,524

4000
2000

40.0%

5,271

16.0%

5,865
4,835

21.0%

20.2%

20.0%

20.7%

15.0%

17.2%

16.9%

13.9%

12.9%

10.0%
5.0%

2002

2003

2004

2005

2006

9 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

2007

2008

2009

Comparison by Country in 2005, 2007 and 2009

2005

2007

2009

Pre Frans Maas

Pre ABX

Now

Other
26%

Turnover

Nordic
44%

APAC
5%
NL 6%
DE 11%

Gross Profit

US 7%

Other
28%
Nordic
58%

DE 7%
GB
10%

Other
14%

EBITA

APAC
8%
GB 7%

APAC
5%
DE 8%

APAC
8%
Nordic
58%

Nordic
30%

DE 12%
APAC
7%
GB 6%
IT 12%

GB 8%

Other
APAC 13%
4%

Other
33%

Nordic
41%

Other
36%

Nordic
27%

IT 14%
GB
8%

NL
10%

Other
10%

Nordic
52%

GB 9%
NL 10%

US 13%
US
11%

10 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

APAC
DE 10%
7%
NL 7%

The business model of DSV

DSV is an asset light freight forwarding company we are a broker and we create
the connection between carriers / hauliers and the customers

We offer a true one-stop-shopping-solution: Road, Air & Sea and Solutions

We coordinate and balance transports and create value for the customers and for
the shareholders of DSV

Pooling of volume and production creates economies of scales

Asset light strategy outsourcing
Use of best in class IT provides competitive advantages
Autonomous decision making combined with strong central control creates solid
results

Entrepreneurial thinking part of company culture

Loyal management with strong operational competences
The business model of DSV is very cash-generative

11 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

The DSV business model

Transportation
(subcontracted)

Freight forwarding

Logistics
& Distribution

Warehousing
Cargo plane

Customs
Pickup
Clearance
Cargo
consolidation

Picking/
Packing

From Shipper..
Terminal

Hauling
truck

Trucking /
distribution

Documentation
& Insurance
Shipment
booking

Terminal

Mother vessel

12 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Supply chain
management /
order planning

to Consignee

Divided into Three Divisions

In 2001 the company was divided into three divisions creating a number of advantages:
Transparency in external reporting
Refinement of services and customer segments
Local management close to the customers
High involvement of both customers and employees in the decision making process
Flexible organizations that can quickly adapt to changing demands
Self-governing business units
Industry specialization
Focus on key competences
Shared Service Centre approach

13 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Key figures by division

DSV Road

DSV Air & Sea

DSV Solutions

34 countries

61 countries

17 countries

9,858 employees

5,925 employees

5,497 employees

Turnover 2009

Turnover 2009

Turnover 2009

18,390 million DKK

14,062 million DKK

5,788 million DKK

Gross Profit 2009

3,914 million DKK

Gross Profit 2009

3,524 million DKK

Gross Profit 2009

1,561 million DKK

EBITA 2009

EBITA 2009

597 million DKK

955 million DKK

EBITA 2009
196 million DKK

14 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

DSV Organisation

Group Management
CEO & CFO

Divisional Management

Local Shared Service

Centre

Local Management

15 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Strategy
Capital allocation
Governance
M&A
IR
IT
Business development
Business processes
Monitoring operational
units
Central procurement
Global sales
IT
Operations
Local customers
Financial reporting
Net working capital
Local IT

DSV Management
Jens H. Lund

Jens Bjrn Andersen

CFO and in DSV since 2002

CEO since 2008

Master of Science in Audit

and Accounting

In DSV since 1997

2007 2008: DSV Road, CEO

2003 2007: DFDS Transport Ltd, CEO
2001 2002: Tollpost Globe, CEO
1997 2001: DSV Samson Transport, CEO
1988 1997: Samson Transport (acquired by
DSV in 1997)

Ren Falch Olesen

Sren Schmidt

Jrgen Mller

CCO since 2010

COO DSV Road

President
DSV Air & Sea

In DSV since 2000

In DSV since 1994

2000 2002: Carnegie Corporate

Finance
1998 2000: Danske Bank Corporate
Finance
1989 1998: Deloitte

Anton van Beers

MD, DSV Solutions
In DSV since 2006

In DSV since 2000

2007 : DSV Road UK, MD

1999 - 2007: DSV Road UK, Director
1996 - 1998: Dantransport UK, MD
1993 - 1995: Dantransport, CCO
1991 1992: Dantransport France,
MD
1989 1990: Manager, Dantransport
UK
1983 1997: Dantransport

Member of the Board in DSV Road

2008: DSV Road Holding
1994-2008: DSV Road. Denmark

Member of the Board in DSV Air &

Sea
1980-2009 President Air & Sea USA
1979-1980 Nordisk Transport New
York, USA - Agent representative
1974-1979 Dan Transport, Denmark
1972-1973 Jonemann S.A.,
1971 1972 Josef Hofstetter Munich
Germany
1967-1970 Franck & Tobiesen Liner
Agency, Denmark

16 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Member of the Board in DSV

Solutions
Joined DSV after the acqusition of
Frans Maas in 2006
2000-2006 Frans Maas Venlo
1997-1999 HIM Furness Rotterdam
1991-1996 Pakhoed Rotterdam
1989-1990 Furness Rotterdam
1982-1989 Miro Roosendaal
1981-1982 NAM Bergen op Zoom

Growth strategy
Organic growth

Gain market shares through focus on sales locally and centrally

Focus on costs/efficiency to ensure that DSV can offer the best prices
DSV will continue to focus on small / mid sized companies
Increased focus on large / global accounts
Optimization of cross selling between division
DSV has a history of outperforming the growth of the market

Growth trough acquisitions

DSV has a strong record of both large and small acquisitions and successful
integrations

DSV wishes to continue to take part in the consolidation in the industry

Future acquisition targets will be asset light freight forwarding companies
mainly within Air & Sea and bolt-on type acquisitions in Road

17 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Acquisitions

18 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Updated financial targets

Previous targets
DSV

Road

3-5%

2-4%

8-10%

3-5%

6%

6%

7%

7%

20%

20%

25%

20%

DSV

Road

Organic growth in turnover

5%

3-5%

5-10%

3-5%

EBITA margin

7%

6%

8%

8%

20%

20%

25%

20%

Organic growth in turnover

EBITA margin
ROIC

Air & Sea Solutions

Updated targets

ROIC

Air & Sea Solutions

The financial targets have been updated following a reassessment of

the mid/long term potential of the divisions
Targets are valid medium to long term (3-5 years)

19 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

DSV and CSR

DSV has for a number of years worked with a variety
of Corporate Social Responsibility issues e.g. on
decreasing the environmental impact from transport activities
and different information on the groups employees.
DSV wants to strengthen the corporate CSR work and have in autumn
2009 joined the UN Global Compact initiative.
This initiative is followed by a comprehensive CSR strategy involving
DSV companies world wide.
DSV is right now working on this strategy involving in example the
formulation of a group CSR policy and a set of business ethic rules for
management and employees of the DSV group comprising anticorruption and fraud issues.
Next report of CSR activities, targets and results to Global Compact and
in DSVs annual report 2010.

20 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Carbon Footprint
Energy efficiency - Group and per activity
2008

1000
1000

762,3

775.4

775,4

100
100

CO (g/tonkm)

2
CO2 (g/tonkm)

762.3

67,9
67.9

55,4
55.4

43.0

43,0

33.8

33,8

10
10
8.4 8,4

9.0

9,0

Road transport

Road transport

Sea transport

Sea transport

Air transport

2008

Air transport

Development 2008 2009

Road: +18.4%
Sea: -6.8%
Air: -1.7%
Group: +21.5%

21 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

2009

Group

Group

2009

Financial review Q1 2010

DKKm

Q1 - 2009

Q2 - 2009

Q3 - 2009

Q4 - 2009

YTD 2009

Q1 - 2010

Revenue
Direct costs

9,451
-7,139

8,816
-6,554

8,674
-6,513

9,144
-6,981

36,085
-27,187

9,659
-7,466

Gross profit
Gross margin

2,312
24.5%

2,262
25.7%

2,161
24.9%

2,163
23.7%

8,898
24.7%

2,193
22.7%

Staff costs, white collar

Other ext. expenses, depreciations

-1,269
-685

-1,181
-635

-1,104
-592

-1,117
-612

-4,671
-2,524

-1,155
-587

358
3.8%

446
5.1%

465
5.4%

434
4.7%

1,703
4.7%

451
4.7%

EBITA in % of Gross profit

15.5%

19.7%

21.5%

20.1%

19.1%

20.6%

Employees - end of quarter

23,377

22,449

21,761

21,280

21,153

423
8,954
16.8

149
7,309
23.9

10
7,108
24.1

135
6,890
24.8

16
6,513
25.3

EBITA
EBITA margin

Balance sheet - KPI's

Net Working Capital
Net interest bearing debt
Solvency %

22 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

Outlook 2010 - maintained

Expected growth in turnover 3-7% compared to actual 2009
Expected EBITA in the range DKK 1,900 2,100 million
No significant special items / restructuring costs are expected
Net financial costs are expected in the level of DKK 500 million
Effective tax rate app. 30%
Free cash flow of DKK 1,200 million
NIBD/EBITDA ratio expected to be within target range between 1.5
and 2.5

23 | DSV Capital Markets Day, 11 May 2010 DSV Business model and strategy

www.dsv.com