* DSV CEO says bigger takeovers are the way forward
* Jens Bjorn Andersen plans to keep DSV asset-light
* Graphic tmsnrt.rs/2dnaaM0
By Jacob Gronholt-Pedersen and Ole Mikkelsen
COPENHAGEN, Oct 4 Denmark's DSV, which became
the world's fifth largest freight transportation company by
buying up competitors, is considering more large acquisitions to
expand in a fragmented market despite weak growth in global
The company's simple corporate structure and success in
turning around loss-making firms has helped to boost its shares
by 25 percent this year as it integrates its $1.35 billion
acquisition of loss-making, California-based UTi in January.
DSV's culture is embodied in chief executive Jens Bjorn
Andersen, whose straight talking, including blunt statements
prioritising profit over workplace diversity or the environment,
mark him out in the Nordics.
The UTi deal, DSV's biggest yet, doubled the number of its
employees to 44,000, propelling it into competition with
Deutsche Post-controlled DHL Logistics and Swiss-based Kuehne &
Nagel. The company's shares surged 10 percent after
UTi deal was announced a year ago and its operating profit rose
16 percent to 3 billion Danish crowns ($450 million) last year.
New acquisitions would only come once DSV has proven the
success of the UTi deal, Andersen said in an interview, despite
what he described as weekly calls from investment bankers
touting potential new assets.
"We've come to realise that bigger acquisitions probably
suit us better than smaller ones," Andersen said. "We will go
for the big ones, if we can find them and convince the owners."
Founded by ten truckers in 1976, DSV still only commands
about 3 percent of a global market made up largely of small
players. Furthermore, a lack of digitalisation in places like
Africa and India makes it difficult for large players with
sophisticated IT systems to penetrate.
"It's very difficult to take market share, even though the
market is so fragmented," Andersen said.
"SMELL OF DIESEL"
With some 20,000 long-haul trucks on the road every day and
about 200 warehouses spread across Europe, DSV specializes in
complex transportation logistics, handling everything from
pallets of turf to resurface a football pitch at short notice to
the entire supply-chain for multinational companies.
Andersen's office overlooks a massive warehouse outside
Copenhagen with more than 300 trucks passing by every day.
"We've always had a culture of being close to operations, so
we don't forget what we do," the 50-year-old executive
explained. "We like the smell of diesel."
A survey of fund managers in March by Danish Stock Analysis
found Andersen to be the best CEO in Denmark, ahead of Lars
Rebien Sorensen of Novo Nordisk, who Harvard Business
Review had found to be the world's best-performing CEO.
Starting as a trainee at age 22, Andersen was appointed CEO
just a few weeks before the collapse of Lehman Brothers in 2008,
an event that caused freight volumes to fall 25 percent
overnight and banks to stop credit lines just as DSV needed to
raise $1.2 billion to buy ABX Logistics.
Andersen says he lost trust in the banking system and
financed more than half of the UTi deal by selling shares even
before the deal had gone through to avoid a situation like in
2008. Leading up to the Brexit vote, DSV minimized its exposure
to British pounds to avoid currency risks.
"When I started in this job, people asked me what my 100-day
plan was. I didn't have one," says Andersen, explaining his main
ambition at the time was for no one to find out he had taken
"People ask what our corporate DNA is. I have no idea," he
The company owns very little - no ships, no planes, no
warehouses, only a small proportion of the trucks it uses daily,
not even its own headquarters. Transportation is outsourced to
the likes of Maersk Line, Lufthansa and road haulage firms.
But digitalisation and new technology could pose risks to
freight-forwarding firms, which organise shipments, with major
players in world trade ranging from online retailer Amazon to
container shipper Maersk Line eyeing a bigger share of the
logistics value-chain for freight.
Contrary to most other large companies, DSV's management
team consists only of the CEO and a chief financial officer. The
company remains decentralized, giving lots of freedom to country
chiefs to pursue new business opportunities, but also setting
clear financial targets.
"Our culture is very profit-centric. We like good
old-fashioned budgets and would like every single employee to
have a budget for what he needs to achieve. We measure him on
that, and people love it, especially if they are successful,"
Being asset-light gives DSV an advantage when the market is
falling, competition strengthens and costs are under pressure,
says Otto Friedrichsen, equity strategist at Formuepleje.
"But it also means they risk missing out when the market
goes up and asset values rise," he says.
For now, world trade is set to grow this year at the slowest
pace since the financial crisis and lag growth of the world
economy for the first in 15 years.
"We have great belief in our business model," Andersen said.
"No ships, no airplanes - that is set in stone."
He played down the idea that technical advances could
threaten that model. "We are not a commodity. We make some very
advanced and complex logistics solutions for our customers that
an app cannot replace."
Turning DSV into a global player means becoming "a little
more boring" since Andersen took over eight years ago when DSV
did not even have a legal department. But some things remain the
same in a business dominated by white males.
"We have no need to fulfil diversity targets. This is a
male-dominated industry. I have gathered the best," Andersen
"Whether you like it or not, I've been put here to make
money, not to bring down CO2 emissions from our trucks," he
said, while quickly pointing out that the company actually did
($1 = 6.6622 Danish crowns)
(Editing by Philippa Fletcher)