DSV US expansion continues with major investment in California hub
DSV is betting on the US: it has confirmed it is spending some $107m to ...
© Timon Schneider
By Alex Lennane
DSV focused on gains in market share, organic growth and making investors confident in its new leadership team, as it announced Q1 results this morning.
Revenues were down some 6%, to DKK438.3bn ($5.49bn), while profit fell 27%, to $342.9m.
But new CEO Jens Lund preferred to focus on gaining market share “in all three divisions”, with volumes up 2% in air and 8% in ocean, year on year.
He told analysts: “The type of business we are winning is in the SME segment. But we’ve also … managed to acquire volume for larger accounts. We expect to continue this growth for the rest of the year.
“We will continue to drive our business forward so that we grow with profitable volumes. We are not here to move cargo where we can’t add any value, because then it’s just resource consumption, and it’s not really efficient.”
Mr Lund appeared to avoid specifics on the possibility of acquiring DB Schenker, and talked more about organic growth than in previous earnings calls. He said: “What is important to us is that we are able to outgrow the market. … And secondly if we have a business we can scale, and the ability to scale it.
“I think it’s fair to say that when we have had to focus on M&A, there has been less focus on organic growth. Now we’ve basically completed all the transactions, it’s normal we go back to our growth focus. The customers expect that we get more efficient from year to year, then we can add more value.
“What is very important is that we outgrow our peers. It’s really, really important,” he emphasised.
However, other forwarders say there could be an opportunity for them if DSV, or another forwarder, acquires Schenker.
One senior executive at a very large forwarder told The Loadstar: “I think we’ll feel it if Schenker is bought by another forwarder. Depending on who it is, it can either present a challenge to us, or an opportunity.
“If it’s a forwarder that doesn’t have the market share we have, and it pushes them up, then obviously their buying power has increased. If it’s a forwarder that has large customers and already has a high percentage [of the market], it will grow even higher with Schenker. And I think customers are going to reduce their risk in having so much portfolio with one forwarder. That becomes an opportunity for us.
“We’ve heard customers say …whoever acquires Schenker would have such a significant portfolio that they would look to reduce that footprint with it.”
DSV seems uncertain it will be the winning bidder. It noted that it was built “on a series of large and successfully integrated acquisitions”. It added: “While M&A continues to be at the core of our strategy, we are strengthening our operational and commercial focus. Sustainable organic growth will be driven based on an even deeper understanding of our customers across segments and industries and an intensified development of our global network and services.”
It also noted its new management team, following the forced exit of Jens Andersen last year, had “leading industry capabilities”.
“With the new organisation and strengthened commercial focus in place, we are confident that we have the right platform to deliver above-market growth across all business areas. The strategic focus will deliver increased growth on our largest global customers, which represent more than half of our gross profit, while also maintaining our historically strong position in the small- and mid-sized customer segment.”
Mr Lund added that the year was “off to a good start”.
“The Q1 results are in line with expectations and reflect the normalisation of freight markets.”
You can read further analysis, and a comparison with K+N, on Loadstar Premium.
And you can see the full results here.
Comment on this article