DSV and Schenker deal faces market, integration risks

On the day DSV announced healthy Q1 results against increasingly turbulent market conditions, the integration of its largest acquisition began in earnest. Where does the world’s largest forwarder stand as the process begins?

 What the numbers tell us:

• Reporting Q1 finances, DSV showed group revenue up 9% against the 2024 quarter.

• This included a 6.2% increase in gross profit and a 4.8% rise in EBIT

• While DSV's Air & Sea division drove results (8.2% revenue increase y/y), its road division faced hurdles, recording a 3% y/y revenue dip.

• Division highlights:

  • Air & Sea: Growth in GP (+11%) and value-added services is evident, despite global shipping challenges.

  • Road: Weak quarter, but expectation of more stability as the Schenker integration progresses.

  • Solutions: Soon to be rebranded as Contract Logistics, revenue (+6%) and GP (+7%) benefited from higher volumes and improved warehouse utilization.

And what will the numbers look like?

• DB Schenker gets integrated into the DSV financials from 1^st May, the impacts are expected to include:

• Projected revenues of €41.6bn, this acquisition isn't just about size; it's about financial strategy.

• An upwards revision to annual guidance of DKK 19.5 billion to DKK 21.5 billion.

• Synergies driving $1.4bn in anticipated savings by 2028. Expected to start immediately in Air & Sea, while Road and Solutions Contract Logistics savings won’t be fully recognised until 2028.

So, DSV's financial strategy focuses on managing cash flow and net working capital. The company aims to bring Schenker’s margins up to DSV’s standards and for the transaction to be accretive by 2026.

What should we expect from the new DSV over the coming quarters?

Integration and Synergies: Integrating DB Schenker will be a major undertaking. DSV has deep experience with large-scale integrations and will need it to align operations and services efficiently.

• The near-term priority is Air & Ocean, where market headwinds will provide extra challenges for efforts to retain Schenker’s customer base.

• Road and Solutions Contract Logistics will take longer, with greater complexity. In both, DSV plans to build around Schenker’s existing operations, integrating its own where it adds value.

 Technology Integration:

Technology is now as critical as cultural fit in logistics M&A, and DSV has made it a cornerstone of past integrations.

• Schenker, limited by years under a capital-constrained state rail owner, lags in tech investment. Its in-house systems are seen as rigid and less adaptable, so a fast transition in Air & Ocean is critical.

Culture and clients: This deal is a clear acquisition of Schenker by DSV, but as the details become clearer, the more it looks like a merger of (near-)equals.

• This looks especially true in Road, where DB Schenker’s Helmut Schweighofer, formerly Head of Europe, takes the reins and Schenker brings nearly double the market share of DSV’s Road division.

• And in Solutions Contract Logistics, Schenker’s expertise is already shaping direction, particularly through its knowledge and strong Asia Pacific footprint.

• Schenker’s business has been built around individual offices having close relationships with clients where they live and operate.

These priorities challenge DSV’s reputation as the gold standard in integration, particularly outside Air & Sea, where most of its M&A wins have come.

DSV’s integration playbook relies on standardisation, culture, and tech. But transitioning teams and clients where DSV isn’t the clear dominant party introduces real execution risk. And with the market across all divisions looking set for a prolonged period of downturn, DSV may not have a lot of time to prove its integration techniques can be transferred.

PS. Jens Lund’s shot across the bows at Maersk - “[the transaction] also means quite a lot for our country, Denmark, as well. We will now have a leading player within our industry. And I think this is something that we can all be proud of.” - would have been bruising to those listening in from Esplanaden. We’ll be analysing Maersk’s numbers when those are released for Q1 on 6th May.