DSV Reports Q3 EBIT Growth, Narrows 2026 Guidance

DSV (OTC: DSDVY ) reported third-quarter financial results on Wednesday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary DSV reported a 2.3% increase in gross profit for Q3 2026, with significant growth in EBIT at 11.5%, driven by synergies from the Schenker acquisition. The company has narrowed its EBIT guidance to between 24 and 25 billion DKK, with a solid cash flow of 6.4 billion DKK despite elevated freight rates. Integration of Schenker is progressing well, with most customer integration completed, though Road synergies are delayed to 2027 due to prior quality issues. Air & Sea division saw a 4% GP increase in air freight and slight declines in ocean freight, while Contract Logistics achieved a 50% EBIT growth.

A new share buyback program of 1.5 billion DKK was initiated, and DSV aims to reduce its gearing ratio to two times by 2027. Management expressed confidence in regaining lost volume in the Road division, emphasizing improved quality and increased commercial activity. Full Transcript Moritz (Conference Call Operator) Ladies and gentlemen, welcome to the DSV Q3 2026 conference call. I'm Moritz, the conference call operator.

I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question-and-answer session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0.

The conference may not be recorded for publication or broadcast at this time. It's my pleasure to hand over to Jens Lund, Group CEO. Please go ahead, sir. Jens Lund (Group CEO) Good morning and welcome to our Q3 call.

We are, as usual, Michael and I, to present the results and I'll go through some of the first slides here and then later on Michael will cover some of the other points on the agenda. So let's quickly go into it and we can start basically with, I think, the most important topic for many of you during the quarter. We can say that the service levels on Road are back on track and the quality issues that we had are resolved. But of course it has had the consequence that our synergies will be realized a little bit later on the Road side because we've had to focus on solving those issues.

In general, on group level the GP is up 2.3%. When we made the business plan for acquiring Schenker we said we were going to lose certain volume or GP at the end of the day, and now in Q3 it's really great to see that we're back on the growth trajectory when it comes to GP. On the EBIT side, we've grown significantly more because, of course, the synergies that we realize drive a higher conversion, and at the end of the day also the EBIT has come up; we are right now at 11.5% growth. This has led to a situation where we are now going into the fourth quarter and we've narrowed our guidance.

We've done this, of course, because normally you start the year with a broader guidance and now we have more certainty when it comes to the result. So the guidance is now between 24 and 25 billion DKK in EBIT. If we look at the cash flow, we've delivered a solid cash flow here in the quarter, even if the freight rates are still elevated, not least on ocean freight, and we've started the first share buyback program since we acquired Schenker. So all in all, those were some of the highlights from Q3.

I just wanted to say a few words on the integration as well. I think we are continuing as per plan. There's only a few countries outstanding, no major countries left on the integration, and much of the customer integration is also done. So good progress on that one.

Of course, we just talked about the issues that we had on Road that lead to a delay in the realization of the synergies. So that will happen now and be finalized in 2027. Basically, the expected outcome and also the costs in relation thereto remain the same, but of course a little bit delayed. Also on the special items into 2027.

If we look at the financial highlights for the quarter for the group, I think the earnings growth we just talked about and I think also that the GP has grown. This is something that we're very focused on here in the headquarter: that we add more value to our customers and, of course, then also that we convert that into solid growth. The operational results, I would say that the Air & Sea division has delivered as expected and CL has delivered a very solid result, I should say. And then, of course, the Road results are clearly affected by the quality issues that we've had.

The cash flow for the quarter: 6.4 billion. And I'd already talked about the revision—basically the narrowing—of our guidance. So that's really the financial highlights. If we look at Air & Sea, I think one thing that is important, and we have also just added a slide on Global Products that used to be part of the results for the divisions, and therefore if you look here now you will say, well, the gross profit has grown 0.2%, but if we'd adjusted for the GP that we've taken out of Air & Sea, actually we've grown 2.8% year over year.

But that's always what happens when you move some of the volumes around: that it's a little bit blurry what's the baseline and what's the actual figures and are they fully comparable? So we just added this information on the right side here. If we look at basically the conversion rate, it continues to increase and we are aspiring to get up to the 50% target also during the next year, where we will definitely see an impact of the continued work we do on productivity. And then, of course, the EBIT margin also trending towards the 10%.

If we look at air freight, we grew the GP 4% actually during the quarter. We did still—we'd had this where we sanitized the portfolio, and this actually continued a little bit into July. After July, basically we've finished this and I would say the general trend on the air freight is that we've seen that the volumes into Europe are still under pressure, and not least the volumes related to automotive. On the other side, of course, we've seen progress on the technology vertical where we've grown our volumes and, as you can see, also the yield at a very solid level, almost 9,000 per tonne.

And overall, as I said, the GP has increased by 4%, so we are quite happy about that. If we look at the ocean freight, the GP has decreased by 4% and yields a little bit down, and volumes also slightly down on the ocean freight. What we are working on right now is we are very much focused on the commercial activity in the ocean freight to make sure that we swing the trend round. And I would say both for air and for ocean, we've seen that we are slowly getting into a situation where we've basically levelled out and we should hopefully during the next quarter start to see the inflection point where we get growth.

Yield is at 4,100 kroner at the end of the quarter. So basically, if you look over the cycle, it's more or less the same as we had Q3 2025, and basically the composition of VAs and freight markup is also in the 1/3, 2/3 range—so 1/3 is the freight markup and 2/3 is the VAs. Then we come to Road. Here on Road we can see, not least on the GP, what impact the issues that we've had has on the GP in our company.

I would say that the difference is probably approximately one-third related to extra cost due to the quality issues—so they should go—and then the remaining part is actually that we lack volume in the network. So we need to have this commercial focus. Now that we've solved the operational issue—we've put that behind us—it's very important to get that message across that the quality in the network is solid. So now it's the commercial activities that we're looking into.

And when we look at the commercial activities, I think it's also important here to state how this normally works is that you try to fix the quality issue first. Now that's solved. Then what you want to work on is basically that you want to work on making the sales calls. Of course, in the beginning, when you have quality issues, it takes a while before you start the sales calls.

So we started that in September, really intensified the interaction with the customers, building up the pipeline. Then once the customers accept our proposals—and here you have to remember that we have the strongest groupage network in Europe, so it's not that we can't get the appointments; the customers do want to talk to us—then basically we've converted some of that and then we will have to make the integrations if it's a customer that needs an IT integration before we go live. So that cycle will probably take at least 90 days. So what we sell right now will then come in, let's say in three months.

So it has a delayed impact. We can look at all the KPIs. NPS has improved and there's been some concern—was there a spillover on the NPS to other divisions? It has not spilled over.

So they basically have a very solid NPS development, the other divisions. But, of course, the Road net promoter score has declined. But right now it's actually had the trough and now it's increasing again. So that's really the status when it comes to Road.

We just put some KPIs here and I can tell you that normally, historically, the performance has probably been more in the 92% range. So having 94% in DIFOT is very solid. But as you can see the trend line has been increasing all the time. We were very happy in August when we saw the 92.4, but we were concerned when the volumes come back after the summer holiday whether it would be sustainable.

And actually it's proof that the initiatives we've taken have continued to improve the delivery quality. So that's really positive. So well done to the Road division. If we take the Contract Logistics, here you can see that we've actually grown the EBIT by 50%.

If we exclude the properties, we've grown it by 42%. So a very, very solid performance. Two things have driven this performance. One thing is that we've continued to sanitize our portfolio and basically clean out business that doesn't deliver the desired outcomes.

And then the other one is that we've managed to compensate for all that volume we've taken out with new volume, in particular for the hyperscalers. So these two things in combination, they're really important. I think what is also important for you to notice is that we see that basically the pace that we grow with the hyperscalers is going to continue. We can see the pipelines; they're very, very solid.

So I think you should expect that the CL division will continue this journey that it's on. And of course that's very positive because one of the things that we were criticized for was the low return on invested capital, and now you can see that there's a better connection. We are now at 10.9% on the return on invested capital and the comparable figure was 6.9. So, of course, this growth in EBIT, but also the focus on the capital that we've deployed, has really helped us a lot.

And I think it wouldn't surprise me if we managed to take, what can I say, another step up at year-end, and it would make me very proud to trend towards the 15% that we set as a target for the Contract Logistics division and take another step in the next quarter. So well done to Contract Logistics on that. Then I'll just say last call people were asking a few questions about this Global Products, and rightfully so. So we've just taken a slide and said, listen, what kind of activities is it that needs an enterprise approach so that it's not part of a country-based setup and that should have a life on their own?

So here are the products that we move to a separate structure. It's called Fairs and Events. This is where you have to have specialty knowledge for fairs, events, all these kinds of things, and to have this knowledge across countries—this is very important. On the Parcels, it's the same: we are 3PL on parcels, and also here you need perhaps a more network approach in order to continue to develop that.

And then, of course, the Customs—always quite important as well. Normally it's part of a country-based setup and we've decided to make an enterprise function out of that. And this is then also so that we can serve the customer end to end. And also the technology we have allows us basically to produce on the same platform, so kind of a single-file system for all of that.

So these are some of the main services, actually. We also have some supply chain engineering that we can do as well to add some value, and some 5PL capacity. But these activities are a little bit smaller. So now I've said a lot and it's time for you, Michael, to go through some of the numbers and other stuff in detail.

So please have a go at it. Michael (Chief Financial Officer) Thanks a lot, Jens, and I will immediately skip to the next slide here with an overview of our P&L for the first nine months of 2026. A couple of highlights on that slide that I would like to elaborate a little bit on. Of course, you can see that the revenue has actually increased 10.5% as a consequence of the rate environment and also to a certain extent the activity level.

That also has an impact on net working capital, which I will come back to in a second. And Jens, you already touched upon the EBIT growth, which is also nice to see. But also if you look at profit for the period, it has actually increased 900 million compared to the same quarter last year, which is also good to see. And also the conversion ratio for the group — I think that's also worth highlighting — that we have increased from 27.9 to 32.6, driven by all the initiatives and the synergies that we have worked on.

So that's also nice to see that. And of course the net interest costs are higher than last year due to the fact that now we have, you can say, the full financing of the Schenker acquisition included for all the period, which we did not have last year obviously. And then, Jens, you already touched a little bit on it. But the EPS — now we actually can see that we are growing on a 12—month rolling basis.

Our EPS has increased 11.5% compared to the same period last year. And for many, this is what it is about. Then I will go to the cash flow statement, where we have also a little bit of highlights. Starting out with the adjusted free cash flow, which amounted to 6.4 billion in Q3.

Looking at the cash conversion ratio — and I promise that will continue — it's nice to see that we can collect some money here with a cash conversion ratio of more than 128%. Net working capital slightly increased due to the freight rates. If you look at the ratio a little bit further down on the slide, you will see that the ratio is actually better than it was at the end of last quarter. So we are grinding our way through it.

We promised to reduce the net working capital, but of course if we get more activity and higher rates, that will have an impact clearly. I also would like to highlight that on the gearing ratio it's now 2.46 — actually, we can only have one digit here, but it's 2.56. So during the quarter since last quarter, we've actually reduced by 0.2 on the gearing ratio. And also worth mentioning is that since we started the integration, we have reduced net interest-bearing debt by 12.6 billion DKK as well.

All in all, I think it's nice to see these kind of numbers. Of course we would like to have them even better, but it's positive. The cash flow and the current state of our financial situation has also led to the fact that we have started and launched a share buyback this morning of 1.5 billion. It's good to be back on that.

What I would like to highlight is the journey, the path that we are on, where we have decreased our gearing ratio for the last couple of quarters. It's a positive trajectory that we are on. We do stay committed to the capital allocation policy, heading towards two times in the gearing, expectedly during 2027. Of course, the ambition is to do it in the first half of 2027, but that is our aim.

The reason also for this start of the share buyback is that we have an obligation towards our share option program, and we have to buy back shares to be able to deliver on those obligations. So that means that we have now — you can see on the slide here — that in 2025 there was not much share buyback, so now we will see we have these columns again with the share buyback, hopefully. But I would also like to highlight that, like I've said also last quarter, we are now in a position where we every quarter assess according to our capital allocation policy.

So that we have started is not necessarily, you can say, that we will continue that journey, but of course we expect that we will have solid cash flow going forward as well. Then, Jens, you already touched upon the next slide here on the guidance, where we have narrowed the outlook to between 24 and 25 billion DKK. Given the slight delay due to the Road integration, we also have a spillover impact on the special items — we are slightly delayed on those as well — so that is the overall number.

And some of the assumptions: of course we have some synergies that we have already realized last year, and then on top this year 4 billion more, and then we have the additional 1 billion that we postpone into next year. It's still a volatile world that we live in, highly uncertain about the macro environment and interest rates and so forth. So that's of course also worth bearing in mind. In terms of Air & Sea, on volume for the last quarter we assume volume growth to be slightly below the market in Air & Sea and also yields slightly below what we have in Q4.