Danish group now expects to close Panalpina takeover by end of Q3 2019.
DSV has made a very strong start to 2019 gaining market share across all of its business segments.
Speaking at conference call with analysts earlier today, CEO ,Jens Bjørn Andersen described the Danish forwarding and logistics group’s financial performance in the first quarter as “historic.”
He also revealed that the transaction for the acquisition of Panalpina, announced at the start of the month, was now likely to be completed by the end of the third quarter this year and not during the fourth quarter as initially stated.
Looking at the Q1 performance in more detail, revenue growth for the period, adjusted for exchange rate fluctuations (in constant currencies), was 7.9% to DKK 19,979 million.
Each of DSV’s three divisions increased turnover, driven by growth in freight volumes as well as higher average rates per shipment.
Group operating profit (EBIT) grew by 14.9% to DKK 1,454 million, all divisions contributing but with Air & Sea the “powerhouse.”
Andersen described the Air & Sea’s performance as “rock, rock solid”, adding that the divsion’s management and staff had done “an extraordinary job in the first three months of the year.”
Volumes in air freight increased 5% despite a negative market picture (-1%), which produced a positive yield development, mainly driven by growth in exports from the Americas.
Sea freight volumes were up 4%, comfortably outperforming the market (+1% in Q1) , with a positive yield development. too The Americas was also the main growth driver in the segment.
The division’s EBIT increased by 20.5% to almost DKK 1 billion while the conversion ratio (gross profit to EBIT) was 41.2%, compared to 37.1% a year ago, closing in on DSV’s target of 42.5%.
“It’s fantastic that the division continues to perform and everybody can be proud of themselves,” Andersden noted.
DSV’s Road division posted revenue growth of 5.7%, reflecting a higher activity level and a slight increase in rates and the positive impact of a higher number of working days in the first quarter.
EBIT was up 13.6% to DKK 298 million.
The Solutions (Logistics) division increased its revenue by 6.2%, also benefitting from a higher activity level with growth driven by the retail and industrial verticals.
EBIT rose by 3.9% to DKK 193 million.
Q1 growth across DSV’s business segments had been achieved “without pricing sacrifices in other words, gross profit has grown in line with revenue in the period.”
Commenting on the forthcoming merger with Panalpina, subject to regulatory approval, Andersen said:
“We are very much looking forward to teaming up with Panalpina, and while preparing for the integration, we are focused on delivering good customer service and managing the day to day operations. Our Q1 report is a clear testament to this.”