Dfds A/s · OMXCOP:DFDS
Dfds A/s — Non-Deal Roadshow (April 2017)
62 slides from Dfds A/s's roadshow presentation, April 2017
Slide 1: Ferry Shipping and Logistics – DFDS Group Overview
FERRY SHIPPING AND LOGISTICS DFDS Group Overview April 2017
Slide 2: Disclaimer
Disclaimer 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 2
Slide 3: Content overview
Content overview What we do How we run DFDS How we perform Introduction Strategy Financial performance overview 5 25 36 Freight business model Continuous improvement ROIC Drive 9 27 37 Route capacity dynamic Digitisation Cash flow and CAPEX 10 29 39 Divisions and business units M&A Capital distribut
Slide 4: What we do
WHAT WE DO . 4 4
Slide 5: DFDS structure, ownership and earnings split
DFDS structure, ownership and earnings split DFDS Group DKK bn Revenue 2016 per division People & Ships Finance 16 14 12 4.9 34% Shipping Division Logistics Division 10 Logistics Division 8 Shipping Division • Ferry services for freight • Door-door transport 6 Eliminations and other and passengers s
Slide 6: Freight, logistics and passengers – focus northern Europe
Freight, logistics and passengers – focus northern Europe Freight routes Logistics solutions Passenger routes Trailers, unaccompanied Door-door full & Overnight Key & accompanied part loads services Day Industry solutions Contract logistics Transport/holiday Port terminals Cruise f
Slide 7: DFDS route network
DFDS ROUTE NETWORK - an integrated part of Europe’s infrastructure 7 7
Slide 8: It's all about the route
IT’S ALL ABOUT THE ROUTE . 8 8
Slide 9: DFDS' freight business model integrates routes and logistics
DFDS’ freight business model integrates routes and logistics • DFDS logistics activities Manufacturers have a narrow scope of full/part load solutions Heavy Other Consumer industrial goods industrial goods goods • Own logistics provides access to market intelligence and ability to DFDS Freight forwa
Slide 10: Ferry route capacity dynamics
FERRY ROUTE CAPACITY DYNAMICS - stepwise addition of ferries leverages capacity significantly Minimum required No. of ships Capacity impact no. of ships for on route today of entry* entry Route Dover-Calais 8 3 38% Gothenburg-Immingham 3 2 67% Fredericia- Copenhagen- 1 1 100% Klaipeda ddddd * Assumi
Slide 11: Key northern European ferry companies
KEY NORTHERN EUROPEAN FERRY COMPANIES • Logistics office/warehouse ― Container/sideport route 11 11
Slide 12: Shipping
SHIPPING 2016: Shipping Division Business units and ROIC 2016 Revenue North Sea Baltic Sea Channel North Baltic Channel Passenger France EBIT Passenger Sea Sea & Med France & Med 12% 30% 20% 43% n.a. 0% 20% 40% 60% 80% 100% . 12 12
Slide 13: Roll on, roll off
Roll on, roll off • Ro-Ro/Ro-Pax shipping: roll on, roll off of freight units and passenger cars • Routes can carry unaccompanied and accompanied trailers • Other types of cargo, e.g. heavy industrial goods and containers, are placed on carrying equipment (mafis) and tugged on to the ship 13 13
Slide 14: Ferry types
FERRY TYPES Freight only (ro-ro) . North Sea, e.g. Gothenburg-Immingham Combined freight and passengers (ro-pax). Baltic Sea, e.g. Kiel-Klaipeda Day ferry (ro-pax). Channel, e.g. Dover-Dunkirk Passengers with freight (cruise ferry). Passenger, e.g. Copenhagen-Oslo Ro-ro trailer deck 14
Slide 15: North Sea
North Sea • Only ro-ro routes (freight-only) • High share of industrial customers out of Sweden • Forwarders main customer group UK-Continent North Sea Invested DKK m Revenue EBIT capital ROIC, % 2016 3,365 515 4,168 12.1 2015 3,402 458 4,368 10.3 Lane metres, '000 ∆ vs LY Pax, '000 ∆ vs LY 2016 11,
Slide 16: Baltic Sea
Baltic Sea • Ro-pax and ro-ro routes • Forwarders main freight customer group • Russia ‘closed for business’ by sanctions Baltic Sea Invested DKK m Revenue EBIT capital ROIC, % 2016 1,349 363 1,203 30.0 2015 1,254 231 1,148 19.9 Lane metres, '000 ∆ vs LY Pax, '000 ∆ vs LY 2016 4,049 15.5% 373 7.0% 1
Slide 17: Channel
Channel • Ro-pax routes • Forwarders main freight customer group • Seasonal passenger market, Q3 high season Channel Invested DKK m Revenue EBIT capital ROIC, % 2016 2,288 394 1,937 20.3 2015 1,853 198 1,203 16.4 Lane metres, '000 ∆ vs LY Pax, '000 ∆ vs LY 2016 20,325 36.2% 4,921 18.2% 2015 14,923 4
Slide 18: Passenger
Passenger • Cruise ferry routes, overnight crossings • Seasonal passenger market, Q3 high season • Increasing share of overseas passengers Passenger Invested DKK m Revenue EBIT capital ROIC, % 2016 1,713 253 577 43.1 2015 1,742 219 677 31.3 Lane metres, '000 ∆ vs LY Pax, '000 ∆ vs LY 2016 634 8.2% 1
Slide 19: France & Mediterranean
France & Mediterranean • Ro-pax and ro-ro routes • Forwarders main freight customer group • Newhaven-Dieppe concession route France & Med Invested DKK m Revenue EBIT capital ROIC, % 2016 481 11 -29 n.a. 2015 501 5 -36 n.a. Lane metres, '000 ∆ vs LY Pax, '000 ∆ vs LY 2016 1,003 -13.4% 353 -2.6% 2015
Slide 20: Balanced ferry market – operators ordering for own routes
Balanced ferry market – operators ordering for own routes • Freight ferry (ro-ro) capacity expected to slightly increase in 2017 following significant decline since 2011 • Combined pax/freight ferry (ro-pax) capacity expected to continue decline in 2017 following decline since 2012 • New ferries ord
Slide 21: Logistics
LOGISTICS 2016: Logistics Division Business units and ROIC 2016 Revenue Nordic Continent Nordic Continent UK & Ireland EBIT UK & Ireland 16% 11% 13% 0% 50% 100% . 21 21
Slide 22: Logistics Division: growing share of contract logistics
Logistics Division: growing share of contract logistics Activity Nordic Continent UK & Ireland Door-door full & part • Scandinavia- • Continent-Scandinavia/ • Northern Ireland-UK loads (trailers, containers UK/Baltics/Continent UK/Ireland • Ireland/UK-Spain & rail) • UK domestic Contract logistics •
Slide 23: Logistics Division is a key customer of the route network
Logistics Division is a key customer of the route network • Top 3 customer of Shipping Division NORDIC • 8% of total shipping volumes UK & • 10-20% volume IRELAND target on individual routes CONTINENT Logistics Division Invested DKK m Revenue EBIT capital ROIC, % Nordic 2016 1,613 53 319 16.2 2015 1
Slide 24: How we run DFDS
HOW WE RUN DFDS . 24 24
Slide 25: Core strategy supports path of value creation
Core strategy supports path of value creation Core strategy 1. The DFDS Way: Customer focus and continuous improvement 2. Network strength: Expand network to leverage operating model Value creation 3. Integrated shipping and logistics operations: Working together to optimise capacity utilisation Tra
Slide 26: 3 key strategic demands and supporting initiatives
3 key strategic demands and supporting initiatives 1. Top line focus 2. Increase 3. Acquisitions efficiency and and investments reduce cost base for future growth Continuous improvement projects M&A IT systems development Fleet strategy Digital DFDS WAY 2.0 26
Slide 27: Continuous improvement projects
Continuous improvement projects • Toplight – simplified rate structure and preparing for digital customer solutions and efficiency gains in freight shipping • Carpe Momentum – improve on board sales and spend per passenger on Channel routes • Haulage Drive – improve efficiency of subcontracted haula
Slide 28: 3 key strategic demands
3 key strategic demands 1. Top line focus 2. Increase 3. Acquisitions efficiency and and investments reduce cost base for future growth Continuous improvement projects M&A IT systems development Fleet strategy Digital DFDS WAY 2.0 28
Slide 29: DFDS' digital journey started in 2014
DFDS’ digital journey started in 2014 OUR INDUSTRY is still among the LEAST DIGITAL… DIGITAL: a KEY FOCUS AREA for DFDS since 2014… Impact of Digital Confusing MEDIA Fully digitized players own the 2015 focus areas customer market, such as Amazon and Netflix M DIGITALIZATION HIT OUR RADAR SCREEN LAS
Slide 30: Apps developed for both freight partners and passengers
Apps developed for both freight partners and passengers Passenger app for Copenhagen-Oslo route Logistics app: POD, tracking, status update and driver communication 30
Slide 31: 3 key strategic demands
3 key strategic demands 1. Top line focus 2. Increase 3. Acquisitions efficiency and and investments reduce cost base for future growth Continuous improvement projects M&A IT systems development Fleet strategy Digital DFDS WAY 2.0 31
Slide 32: Creating value from operational and strategic synergies
Creating value from operational and strategic synergies • Focus on both transformational and Revenue 2015, Routes Regions Major activity bolt-on acquisitions DKK bn Across Northern Europe, Mediterranean DFDS 13.5 22 8 (incl. sideport/container) • Shipping: Stena Line 9.7 23 6 Across Northern Europe,
Slide 33: Operational agility
Operational agility • Faster adaptation of capacity to changes in volumes • Capacity increased on routes in Baltic Sea, North Sea South and Channel to accomodate higher volumes • Capacity decreased between UK and Sweden • Adjustment options for freight routes to reduce fixed costs: • Changed frequen
Slide 34: Value creation supported by DFDS' incentive structures
Value creation supported by DFDS’ incentive structures • PIP – annual performance incentive programme • Around 300 managers included with individual goals • Bonus also linked to Group and Division goals • Share option programme • Extended to 25 managers in 2011 • Around 30 managers included today Fr
Slide 35: How we perform
HOW WE PERFORM . 35 35
Slide 36: EBITDA increased to DKK 2.6bn – ROIC now at 18%
EBITDA increased to DKK 2.6bn – ROIC now at 18% DKK bn Revenue Invested capital & ROIC before special items ROIC, % Inv cap, DKK bn 14 10 20 9 18 12 8 16 10 7 14 8 6 12 5 10 6 4 8 4 3 6 2 2 4 0 1 2 2012 2013 2014 2015 2016 0 0 2012 2013 2014 2015 2016 Shipping Division Logistics Division EBITDA & ma
Slide 37: ROIC Drive – activity by activity performance benchmark
ROIC Drive – activity by activity performance benchmark • Around 90 profit-generating activities covered by programme • Simple ROIC scorecard makes programme accessible for activity Activities performing managers above 10% • 3-year high-level rolling business plans, review meetings with top manageme
Slide 38: Steady ROIC improvement
Steady ROIC improvement • Major challenges resolved: DFDS Group: Return on invested capital (LTM) • Gothenburg-Immingham: 18 entry/exit competitor, Jan 2012 – 17.8 Mar 2013 17.4 16.4 • Russian market sanctions from 16 Jan 2014 15.3 • Channel turnaround from 2012 14 13.7 • Closure of 3 routes end 201
Slide 39: Cash generation and CAPEX
Cash generation and CAPEX • Cash conversion around 100% Cash flow and investments DKK bn • Cash flow boosted by Light Capital project 3.0 started in 2013 to reduce working capital 2.5 • Limited tax payments due to European 2.0 tonnage tax regime 1.5 • Investments expected to stay below operating 1.0
Slide 40: Increased distribution of capital
Increased distribution of capital • Total of DKK 1.26bn distributed in 2016 to Capital distribution overview shareholders DKK m 2015 2016 2017 Actual Actual Current plan • Dividend per share proposed to be paid in 2017 increased by 33% to DKK 8.00 per Dividend per share, DKK 5.40 6.00 8.00 share Div
Slide 41: Strategic priorities 2017
Strategic priorities 2017 • Customer focus – growing the topline • Continuous improvement: achieve benefits from programmes • Fleet renewal: deployment of two freight ship (ro-ro) new buildings and further decisions on fleet strategy • Digital: significant spending boost in digital and IT capabiliti
Slide 42: Q&A DFDS Group
Q&A DFDS GROUP March 2017
Slide 43: Appendices
APPENDICES . 43 43
Slide 44: DFDS fleet overview and key figures 2016
DFDS fleet overview and key figures 2016 Container Average and age of Ro-pax Passenger sideport Ownership owned Total ships Ro-ro ships ships ships ships share, % ships, yrs DFDS Group 57 23 18 4 12 - 16 Shipping Division 41 23 14 4 - - - North Sea 19 19 - - - 68 12 Baltic Sea1 9 2 7 - - 67 15 Chann
Slide 45: Diverse customer base: forwarders, manufacturers & passengers
Diverse customer base: forwarders, manufacturers & passengers Passengers 21% Forwarders 36% Port terminal customers 3% PAX SOLUTIONS External charterers 3% Manufacturers (shipping) 5% TRAILER SHIPPING Manufacturers (transport & logistics) 32% Percent of total revenue per customer segment 45 45
Slide 46: DFDS' digital journey
DFDS’ DIGITAL JOURNEY
Slide 47: The world is changing
The world is changing Freight 3PL Trucking/Haulage Crowd accomodation Travel aggregators aggregators Freight Routes Logistics Passenger Routes Shipping of trailers, Door-door full & part Ferry services for unaccompanied & load solutions travellers in own car Travel accompanied Contract logis
Slide 48: Our digital vision
Our digital vision A best-in-industry digital experience for customers generating tangible business benefits for customers and DFDS Digital strategy • IT systems must support digital • Enhance operational efficiency • Digital customer solutions • Digital awareness and competencies • Digital business
Slide 49: Focus on core and extended in our activity split
Focus on “core” and “extended” in our activity split CORE EXTENDED MOONSHOTS • Integrated bookings • Sign on glass [PODs] Logistics • DFDS.com (and rest of web • Marketing automation software as a presence) • Digital check-in (freight) service • Track & Trace • Global moderation • Email broadcast •
Slide 50: DFDS' digital journey – wrap-up
DFDS’ digital journey – wrap-up • We are well on our way • We see significant value creation opportunities through enhanced customer focus, experience and satisfaction... • ...and through more efficient operations • Our continuous improvement culture, helps drive our digital transformation 50 50
Slide 51: Solid Q4 and strong 2016
SOLID Q4 AND STRONG 2016 DFDS GROUP Q4 2016 7 February 2017
Slide 52: Contents
Contents • Overview • Q4 and FY numbers • Capital distribution • Outlook 2017 • Strategic priorities 2017 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. 52 52
Slide 53: Pursuit of improvement continues on back of higher earnings
Pursuit of improvement continues on back of higher earnings • Earnings level raised considerably in 2016 – EBITDA DFDS Group EBITDA up by 27% to DKK 2.6bn DKK m before special items • ‘Normalisation’ of Channel and full-year impact of 2016 2,588 more efficient Baltic route network were key drivers o
Slide 54: Solid Q4
Solid Q4 EBITDA BEFORE SPECIAL ITEMS, Q4 DKK m • EBITDA increased by 23% to DKK 600 513m in Q4 500 400 • Some slowdown of activity going into 300 495 Q4, strong pick-up in last half of Q4 385 that has continued into 2017 200 100 65 70 • UK economy impacted by lower GBP 0 -31 -52 in usual ways – no B
Slide 55: Main EBIT drivers in Q4
Main EBIT drivers in Q4 • Passenger +19m: positive impact from lower Q4 2016: DFDS Group EBIT development vs LY bunker costs and other cost savings DKK m 300 • North Sea +9m: increase mainly driven by volume 5 growth of 7% -5 3 14 -22 280 • Baltic Sea +20m: result lifted by volume growth 1 of 12% su
Slide 56: Q4 2016 in numbers
Q4 2016 in numbers • 6% revenue growth excluding revenue from Change Change bunker surcharges and adjusted for currency DKK m Q4 16 Q4 15 % changes. Reported revenue up by 1% REVENUE 3,351 3,324 27 1% EBITDA BEFORE SI 513 418 94 23% • EBITDA-margin increased in both divisions. Group margin, % 15.3 1
Slide 57: Full-year 2016 in numbers
Full-year 2016 in numbers • Revenue growth of 8% excluding revenue from Change Change DKKm 2016 2015 bunker surcharges and adjusted for currency % changes. Reported revenue up by 2% REVENUE 13,790 13,474 317 2% EBITDA BEFORE SI 2,588 2,041 547 27% • EBITDA includes a negative impact of DKK 65m from
Slide 58: 2017: major performance drivers for DFDS
2017: major performance drivers for DFDS Certain/Likely Expected Uncertain Macro drivers • Capacity expansion • Some freight shipping • Passenger volume • Impact of Brexit on selected routes volume growth growth process on UK economy and trading • Deployment of two • Some growth in prices • Changes
Slide 59: EBITDA outlook for 2017 is DKK 2.6-2.8bn
EBITDA outlook for 2017 is DKK 2.6-2.8bn • Moderate growth in Europe expected to continue in 2017 OUTLOOK 2017 • Adjusted revenue growth of 4% • Revenue growth of around 4%, excluding revenue from bunker includes growth driven by full-year surcharges impact of new activities of around 1.5% • EBITDA
Slide 60: Total ferry sailings on Channel up 11% in Q4 vs LY
Total ferry sailings on Channel up 11% in Q4 vs LY Channel sailings 2015-2016 • In Q4 2016, the total number 1,800 3,300 of sailings was 11% above 2015 1,600 3,100 • DFDS has increased sailings 1,400 2,900 by 26% while P&O has decreased sailings by 1%, 1,200 2,700 together substituting MFL’s sailing
Slide 61: Continued freight growth, improved trend in car market
Continued freight growth, improved trend in car market Channel freight volume growth YOY, 2015-2016 • Freight market volumes were up by 15% 5.2% in Q4 2016 10% • The YOY growth per rolling full-year 5% was in Dec at 5.2% 0% -5% • Car market volumes were down by 0.8% in Q4 2016 -10% Jan Feb Mar Apr M
Slide 62: Channel market share development
Channel market share development Channel freight market shares, 2015-2016 • DFDS’ freight market share in Q4 45% 2016 increased vs Q4 15 driven by 40% increased capacity from February/March 2016 35% 30% 25% 20% 15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep O