Examining DSV's Solid Financial Performance and Future Outlook
DSV's Interim Financial Report: A Strong Start for 2025
Company Announcement No. 1159
Stable organic financial performance and strong start to the integration of Schenker in a challenging market environment
- The integration of Schenker is progressing well, with the commencement of country integrations slated for Q3 2025. This process is anticipated to create expected synergies of approximately DKK 9 billion by the conclusion of 2028.
- In Q2 2025, the DSV Group recorded an EBIT before special items of DKK 4,725 million, reflecting stable organic performance and a robust contribution of DKK 925 million from the Schenker acquisition.
- Adjusted free cash flow reached DKK 3,982 million in Q2 2025, showcasing an impressive cash conversion rate of 143%, aiding in the deleveraging efforts that led to a pro forma gearing ratio of 2.7x.
- For the full year of 2025, the guidance for EBIT before special items remains steady in the range of DKK 19.5 - 21.5 billion, despite the prevailing uncertainty due to trade tariffs and macroeconomic conditions.
Jens H. Lund, Group CEO, commented: "The second quarter has been extraordinary, highlighted by the successful completion of the Schenker acquisition. Despite ongoing market volatility, we achieved stable organic earnings and a favorable contribution from Schenker. Our commitment to high-quality service remains a priority, and we are implementing a smooth integration through dialogues with customers and negotiations with employees in Germany."
Selected Key Performance Indicators for H1 2025
Review of Financial Metrics
The market conditions during H2 2025 were marked by volatility, primarily due to uncertainty surrounding trade tariffs and geopolitical issues. Nevertheless, DSV reported a significant increase in EBIT before special items compared to the previous year, fueled by stable organic growth and positive contributions from acquisitions.
The DSV Air & Sea division reported EBIT before special items of DKK 3,461 million, significantly up from DKK 2,898 million year-over-year. This growth was supported by enhanced gross profit and contributions from Schenker.
Conversely, the Road division experienced a decline in EBIT before special items to DKK 520 million from DKK 549 million, impacted by lower activity and sluggish market conditions in certain areas.
Contract Logistics reported EBIT before special items of DKK 724 million, representing growth from DKK 661 million last year, driven by Schenker’s positive contributions and effective cost management strategies.
Following the completion of the Schenker acquisition on April 30, 2025, DSV is off to a strong integration phase with over 500 executives appointed by May 2025. Constructive negotiations with German works councils have paved the way for a smooth transition and reduction of uncertainties.
Future Outlook for 2025
Based on the results of H1 2025 and anticipated performance in H2 2025, the full-year projections remain:
- EBIT before special items expected between DKK 19.5 - 21.5 billion.
- Initial synergies of DKK 500-600 million anticipated from the Schenker integration.
- Expected amortization of purchase price allocations below DKK 500 million.
- Restructuring and integration costs anticipated to be between DKK 2.0-2.5 billion.
- Effective tax rate projected between 26-28%, modestly elevated during the integration phase.
Despite numerous uncertainties stemming from trade tariffs and geopolitical factors, DSV closely monitors market conditions and stands ready to adjust capacity and costs accordingly.
Frequently Asked Questions
What were DSV's key financial figures for Q2 2025?
In Q2 2025, DSV reported an EBIT before special items of DKK 4,725 million and an adjusted free cash flow of DKK 3,982 million.
How is the integration of Schenker progressing?
The integration is on track with the establishment of a global leadership team and planned country integrations set to begin in Q3 2025.
What synergies is DSV expecting from the Schenker integration?
DSV expects to achieve annual synergies of approximately DKK 9 billion by the end of 2028 from the Schenker integration.
What challenges is DSV facing in the current market?
DSV faces uncertainties due to trade tariffs and geopolitical issues that may impact global trade and market activity levels.
What is DSV's outlook for the rest of 2025?
DSV's outlook for 2025 remains strong with EBIT guidance unchanged and continued focus on optimizing operational efficiencies during the integration phase.
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