Dfds A/s · OMXCOP:DFDS
Dfds A/s — Debt Investor Presentation (September 2017)
25 slides from Dfds A/s's debt investor presentation, September 2017
Slide 1: Bond Issue and Tender Offer
BOND ISSUE AND TENDER OFFER September 2017
Slide 2: Disclaimer
Disclaimer IMPORTANT: This presentation is being supplied to you solely for information purposes only. You must read the following before continuing. The following applies to this document, the oral presentation of the information in this document by DFDS A/S (the “Company”) or any person on behalf
Slide 3: Content
Content • Overview of DFDS Appendices: • Shipping Division • Risk factors • Logistics Division • Outlook/Market trends • Credit • Strategic priorities • Key credit highlights 3 3
Slide 4: DFDS structure, ownership and earnings split
DFDS structure, ownership and earnings split DFDS Group DKK bn Revenue LTM Q2 2017 per division 16 People & Ships Finance 14 12 5,0 10 Shipping Division Logistics Division Logistics Division 8 Shipping Division • Ferry services for freight • Door-door transport solutions 6 Eliminations and other and
Slide 5: Freight, logistics and passengers – northern Europe focus
Freight, logistics and passengers – northern Europe focus 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 6: DFDS Route Network
DFDS ROUTE NETWORK - part of Europe’s infrastructure 6
Slide 7: 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 15 10 20 9 18 12 8 16 7 14 9 6 12 5 10 6 4 8 3 6 3 2 4 1 2 0 0 0 2013 2014 2015 2016 LTM Q2 2017 2013 2014 2015 2016 LTM Q2 2017 Shipping Division Logistics Division In
Slide 8: 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 8 8
Slide 9: Shipping Division overview
Shipping Division overview • Freight: Route location and capacity, fixed schedules and Shipping LTM Q2 2017 Invested reliability to meet customers’ transport requirements DKK m Revenue EBIT capital ROIC, % • Bespoke solutions to manufacturers of heavy goods North Sea 3,546 576 4,222 13.4 • Port term
Slide 10: It's all about the route
IT’S ALL ABOUT THE ROUTE - ferry route capacity dynamics: stepwise addition of ferries leverages capacity significantly Minimum required No. of ships Capacity impact Route no. of ships for on route today of entry* entry Dover-Calais 8 3 38% Gothenburg-Immingham 3 2 67% Fredericia- Copenhagen- 1 1 10
Slide 11: Logistics Division overview
Logistics Division overview • Flexible, cost efficient and on-time transport solutions to Logistics LTM Q2 2017 Invested wide variety of manufacturers of goods DKK m Revenue EBIT capital ROIC, % • Main activity is full and part loads in traffic corridors with Nordic 1,699 51 325 15.7 DFDS ferry rout
Slide 12: 2017: Q2 update on major performance drivers for DFDS
2017: Q2 update on major performance drivers for DFDS Certain/Likely Expected Uncertain Macro drivers • Capacity expansion • Some freight shipping • Passenger volume • Uncertain impact of on selected routes volume growth – growth – UK Brexit process on UK strong North Sea, consumers’ economy and tra
Slide 13: H1 2017 in numbers
H1 2017 in numbers • Half-year numbers even out late Easter impact • Revenue and earnings trend overall in line with Q2 • Freight volumes up 1% despite 7% decrease in Channel as the decrease is offset by higher volume growth in other business units • Passenger volumes up 1% includes flat volumes in
Slide 14: EBITDA outlook for 2017 of DKK 2.6-2.8bn unchanged
EBITDA outlook for 2017 of DKK 2.6-2.8bn unchanged • Continued positive outlook for Europe in 2017 OUTLOOK 2017 • Freight markets expected to remain robust • Revenue growth of around 4%, excluding revenue from bunker • UK passenger market at new lower level surcharges due to depreciation of GBP • EB
Slide 15: Growth in Europe expected to continue – also in UK
Growth in Europe expected to continue – also in UK • EU’s growth scenario set to continue creating GBP bn UK-EU trade in goods favorable environment for UK economy and trade 70 Brexit vote 65 • UK GDP growth expected to continue in 2017 (real 60 GDP growth of 1.7% in Q2 y/y) 55 Continued large trade
Slide 16: Clear policy on capital structure & distribution
Clear policy on capital structure & distribution • Capital structure target: NIBD/EBITDA NIBD/EBITDA 3 multiple of minimum 2.0 and maximum 3.0 Capital structure target 2,5 • Excess capital to be returned to 2 shareholders if multiple is below 2.0 1,5 1,8 1,7 1,8 1,8 1,9 1,8 1,8 1,8 1,7 1 1,3 1,3 1,2
Slide 17: Encumbrance and debt composition
Encumbrance and debt composition Mortgage Ships / Total Assets • Mortgage on ships well below 20% of total 35% 32% Encumbrance, ships Q2 2017 (DKKm) assets 30% 27% Mortgage on ships Total assets 1,486 12,941 % of assets 11% 25% 21% 19% • Operating lease commitments reduced 20% 17% 17% 17% 16% 15% 13
Slide 18: Debt repayment profile and CAPEX
Debt repayment profile and CAPEX • Partial bond proceeds to repay 2013/2018 bond • CAPEX Guidance 2017: (Total: DKK 1.8bn) 1.000 Bond Debt Repayment Profile • DKK 750m payment of 2 Channel ferries 2013/2018 • DKK 450m dockings/ship upgrades 800 Bond 2014/2019 • DKK 200m port terminals 600 • DKK 150m
Slide 19: Steady progress on strategic priorities in 2017
Steady progress on strategic priorities in 2017 • Customer focus – growing the topline • Continuous improvement: benefits being achieved in line with expectations • Fleet renewal: first chartered freight new building deployed in July, second in October. Four freight new buildings contracted for deli
Slide 20: Key credit highlights
Key credit highlights Key credit considerations Leading position • Market leader in ferry services for freight and passengers in Northern Europe • Ferry service shipping market is a low volatility shipping segment in a low • Diversified customer base – Logistics division and Passenger routes provide
Slide 21: Gardenia Seaways - Klaipeda
a i Ye “, GARDENIA SEAWAYS - KLAIPEDA
Slide 22: Risk factors
Risk factors Macro-economic and market risks – The DFDS Group is exposed to economic downturns or recession The DFDS Group is exposed directly or indirectly to downturns in the macro-economic environment. A downturn, either globally or in one or more of DFDS’ primary markets may lead to decreasing c
Slide 23: Risk factors
Risk factors Buniess development and investment risks – DFDS’ growth strategy relies on both organic growth and acquisitions DFDS’ growth strategy embodies business development and investment risks. This is both related to organic growth from investment in ships and growth driven by acquisition of c
Slide 24: Risk factors
Risk factors Political and legal risks – Political decisions and legislative changes may affect the DFDS Group DFDS’ activities are impacted by changes in rules and regulations governing the shipping and transport sector, as well as changes in the overall conditions concerning Europe’s infrastructur
Slide 25: Risk factors
Risk factors Financial risks – The DFDS Group is exposed to fluctuations in bunker prices The freight industry is highly exposed to fluctuations in the bunker price and in many cases contracts are entered with the customers in which the customers agree to pay part of the cost of bunkers. DFDS is exp