600 office workers have left DSV Panalpina since acquisition

DSV Panalpina has so far said goodbye to 600 office workers since the billion-dollar acquisition of the Swiss logistics firm was finalized last year, CEO Jens Bjørn Andersen tells ShippingWatch.

DSV's integration of its billion-dollar Panalpina acquisition is going according to plan, explains CEO Jens Bjørn Andersen in an interview with ShippingWatch. | Photo: Staff/Reuters/Ritzau Scanpix

In about half a year, 600 office workers have left DSV Panalpina, says Jens Bjørn Andersen in an interview with ShippingWatch.

Andersen takes stock of the ongoing integration of DSV's billion-dollar acquisition target, Swiss logistics company Panalpina, a transaction that was finalized on Aug. 19 last year.

Since September, the number of employees for our office staff has decreased by 600.

Jens Bjørn Andersen, CEO, DSV Panalpina

The merger of the two companies created a logistics group totaling 60,000 employees spread across more than 80 countries. But as was the case with its acquisition of US-based UTi Worldwide, DSV saw a number of double functions between the two companies. At the time, the company therefore announced that the integration process would result in a number of staff reductions.

DSV warns of layoffs after Panalpina takeover 

"Since September, the number of employees for our office staff has decreased by 600, and this follows the plan we have set out," Andersen tells ShippingWatch.

He emphasizes that this figure also includes employees that were slated to retire as well as employees that have resigned voluntarily.

In its 2019 annual report, DSV Panalpina repeats its previous announcement that it needs to achieve cost synergies of DKK 2.3 billion (USD 337 million).

Approximately five percent of these were achieved in 2019, while 60 percent need to be achieved during 2020 and the remaining 35 percent in 2021.

DSV Panalpina now has a comprehensive idea of the total number of layoffs needed as a result of the acquisition, but Andersen does not wish to disclose the actual figures. 

At the end of 2019, DSV Panalpina had a total of 61,216 employees. In 2018, and before the Panalpina acquisition, DSV had 47,394 employees worldwide.

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Going according to plan

The integration of Panalpina is currently going according to plan, the CEO reports. In the past five to six months, the logistics company has transferred 60 percent of Panalpina's volumes into its own systems.

"We're very pleased about that. It shows that our system can scale and handle significantly more volume," Andersen says, explaining that they have now added the business in countries like the US, China, Hong Kong, Germany and the UK to DSV Panalpina's systems.

Of course, it's a very big operation, but it's going really well and completely as expected.

Jens Bjørn Andersen

"Layers of management have settled around the world, moved together and we are rebranding. Of course, it's a very big operation, but it's going really well and completely as expected," adds Andersen.

In 2019, DSV Panalpina's operating profit before special items (EBIT) landed at DKK 6.7 billion (USD 977 million) against DKK 5.4 billion in 2018. The result after tax landed at DKK 3.7 billion compared to nearly DKK 4 billion in 2018.

DSV Panalpina expects to raise its EBIT result further this year, aiming for somewhere between DKK 8.2 and 8.7 billion.

The annual report also states that there is a risk of losing five percent of volumes from Panalpina's so called legacy business in the first year following the acquisition.

But this has not happened yet, says Andersen.

"It is based on a precautionary principle where we factor in a number for potential customer drop-out rate," he says.

DSV and Panalpina agreed on the deal in April 2019. The price of the acquisition landed at CHF 4.6 billion, set to be paid in DSV equities rather than a cash amount.

This turned out to be a rather good deal for a number of shareholders as the DSV stock has since increased.

English Edit: Ida Jacobsen

DSV Panalpina books USD 977 million operating profit in 2019 

DSV's new transport deal with Vestas excludes competitors

Analysts keep close eye on DSV Panalpina integration 

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