Slide 1: Growth held back by Brexit
GROWTH HELD BACK BY BREXIT DFDS GROUP February 2020
Slide 2: Contents
Contents • Overview • Q4 and FY numbers • Capital structure • Win23 • Outlook and priorities 2020 The statements about the future in this announcement contain risks and uncertainties. This entails that actual developments may diverge significantly from statements about the future. 2
Slide 3: 2019 as expected despite challenging Q4. Growth in 2020
2019 as expected despite challenging Q4. Growth in 2020 • FY: Revenue up 6% and EBITDA up 1% to DKK bn 18 Revenue DKK 3.6bn as Brexit and Turkish recession 14 lowered the margin 10 • Q4: EBITDA down 9% to DKK 771m as UK ferry 6 volumes slowed further and non-comparable cost 2 items reduced Mediterra
Slide 4: Q4 2019 result impacted by higher capital costs
Q4 2019 result impacted by higher capital costs Change Change • Revenue growth leveling off as continued growth DKK m Q4 19 Q4 18 vs LY % in Mediterranean is offset by lower UK ferry REVENUE 4,008 3,955 53 1% volumes EBITDA BEFORE SI 771 847 -76 -9% margin, % 19.2 21.4 -2.2 n.a. P/L associates -1 -3
Slide 5: Ferry Division: Q4 EBIT lowered by Brexit and higher costs
Ferry Division: Q4 EBIT lowered by Brexit and higher costs • North Sea down DKK 44m mainly due to 6.5%* Q4 2019 EBIT development vs LY lower volumes DKK m 425 • Channel down DKK 36m due to a lower freight 400 contribution and ferry cost increase -44 375 5 • Mediterranean topline and contribution up
Slide 6: Turkey-EU trade of goods continues recovery
Turkey-EU trade of goods continues recovery Turkey exports to DFDS' EU target markets Turkey imports from DFDS' EU target markets (source: Drewry) (source: Drewry) 550 650 500 600 550 Tonnes, '000 450 Tonnes, '000 500 400 450 350 400 300 350 Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec 250 Jan F
Slide 7: Brexit uncertainty has lowered UK-EU trade
Brexit uncertainty has lowered UK-EU trade EU-UK trade of goods - volume development • Trading of goods 15% between UK and EU Q4 decreased further in Q4 10% • Some catch-up in October 5% • Large drop in import volumes in Nov/Dec 0% • Export volumes included a high level of precious -5% metals in Nov
Slide 8: Channel freight volumes lowered by UK slowdown
Channel freight volumes lowered by UK slowdown Channel freight volume growth YOY, 2018-2019 • Total Q4 volumes down 6.9% 10% and YTD down 4.7% 5% 0% • Rolling FY change was -4.7% end Q4 -5% -10% • DFDS Q4 volumes down 0.8% -15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Slide 9: Channel passenger volumes likewise lowered by UK slowdown
Channel passenger volumes likewise lowered by UK slowdown Channel car volume growth YOY, 2018-2019 • Total Q4 volumes down 6.1% 20% and YTD down 6.2% 15% 10% 5% • Rolling FY change was -6.2% 0% end Q4 -5% -10% • DFDS Q4 volumes down 8.8% -15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb M
Slide 10: Logistics Division: Q4 EBIT down vs high Nordic 2018 earnings
Logistics Division: Q4 EBIT down vs high Nordic 2018 earnings • Nordic down DKK 14m mostly due to DKK m Q4 2019: Logistics Division, EBIT change vs LY lower activity for Specialised services 50 that peaked in Q4 2018 45 • Continent down DKK 5m mainly due to -14 UK slowdown reduced volumes. Extra 40
Slide 11: Full-year 2019 overview
Full-year 2019 overview Change Change DKK m 2019 2018 vs LY vs LY % • Revenue growth in line with latest outlook of REVENUE 16,592 15,717 875 5.6 EBITDA BEFORE SI 3,633 3,589 44 1.2 around 6% growth and EBITDA in line with margin, % 21.9 22.8 -0.9 n.a. outlook range of DKK 3.55-3.75bn P/L associates
Slide 12: Capital structure – leverage increased in Q4
Capital structure – leverage increased in Q4 • NIBD/EBITDA-ratio of 3.3x end of 2019 NIBD/EBITDA (restated to IFRS 16) 3.5 • Two acquisitions and fleet renewal 3.3 3.3 3.0 3.1 3.2 contribute to increase in leverage – total 3.1 investments of DKK 2.65bn in 2019 2.5 Times 2.0 • Dividend of DKK 4.00 pe
Slide 13: Win23 EBITDA drivers – positive impact continues in 2020
Win23 EBITDA drivers – positive impact continues in 2020 Win23 EBITDA bridge • Key drivers in 2020: DKK m • Mediterranean 5,500 Macro risk • Gothenburg-Zeebrugge Pillar C 500 space charter 5,000 6B • Two 2019 logistics Pillar C acquisitions 4,500 6A 5,500 • 2 mega ferries replace 3 Pillar A ferries
Slide 14: 2020: key performance drivers
2020: key performance drivers Certain/Likely Expected Uncertain Macro drivers • Positive impact from Win23 • Volume growth for freight • Brexit impact on UK freight • Positive global growth strategy initiatives between Turkey and and passenger market Europe development • Turkey’s economy resumes • M
Slide 15: IMO transition 1 Jan 2020 – initial widening of oil price spread
IMO transition 1 Jan 2020 – initial widening of oil price spread Oil price and spread, 2019-2020 • Global transition to 0.5% sulphur 700 limit (northern Europe transitioned to 0.1% limit in 2015) 600 • Price spread between low (MGO) and 500 high sulphur oils (HFO) widened in USD and EUR October 2019
Slide 16: CSR strategy: Large potential to reduce emissions
CSR strategy: Large potential to reduce emissions • Exploring different strategies • New fuel types – investment in MASH Energy, bio fuel developer • ZEEDS (Zero Emission Energy Distribution at Sea) project – collaboration 16
Slide 17: 2020 outlook
2020 outlook • Revenue growth of around 4% - continued growth in Mediterranean, FY impact OUTLOOK 2020 acquisitions and Win23 organic actions • Revenue growth of around 4% (2019: 6%) • Positive earnings impact expected from Win23 strategy initiatives • EBITDA range of DKK 3.5-3.9bn (2019: DKK 3.6bn)
Slide 18: Priorities for 2020
Priorities for 2020 • Continue delivering on Win23 strategy’s financial ambition • Monitor and pursue opportunities to adjust activities to UK market development • CSR – continue to invest in fuel solutions to decarbonise 18
Slide 19: Q&A
Q&A . 19