Dfds A/s · OMXCOP:DFDS
Dfds A/s — Company Day at Jyske Bank, Silkeborg, 3 September 2018
45 slides from Dfds A/s's conference presentation, Sep 3, 2018
Slide 1: Ferry Routes & Logistics: DFDS Group Overview
FERRY ROUTES & LOGISTICS DFDS Group Overview September 2018
Slide 2: What We Do
WHAT WE DO . 2 2
Slide 3: We move freight and passengers on ferry routes in Europe
We move freight and passengers on ferry routes in Europe 3
Slide 4: It's all about the routes – and their location
It’s all about the routes – and their location 4
Slide 5: Routes are part of Europe's and Turkey's infrastructure
Routes are part of Europe’s and Turkey’s infrastructure And part of business supply chains 5
Slide 6: We mainly move fast moving freight for fast delivery
We mainly move fast moving freight for delivery same day, next day or day after (A,B,C) 85% of carried volumes are trailers 6
Slide 7: Our key freight customers are forwarders and hauliers
Our key freight customers are forwarders and hauliers Manufacturers of heavy goods are also important customers 7
Slide 8: On 9 routes we move freight and passengers together
On 9 routes we move freight and passengers together 8
Slide 9: People travelling by car are our key customers
People travelling by car are our key customers as is cruise passengers Both for holiday and transport purposes 9
Slide 10: We also provide transport and logistics solutions
We also provide transport and logistics solutions to a wide range of businesses 10
Slide 11: Freight, logistics & pax – northern Europe & Mediterranean
Freight, logistics & pax – northern Europe & Mediterranean 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
Slide 12: Roll on, roll off
Roll on, roll off • Ro-ro/ro-pax shipping: roll on, roll off of freight units and passenger cars • Routes carry both 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 12 12
Slide 13: Ferry types
FERRY TYPES Day ferry (ro-pax), Channel Freight ferry (ro-ro) Cruise ferry Combined freight and passenger ferry (ro-pax)
Slide 14: Structure & Performance
STRUCTURE & PERFORMANCE . 14 14
Slide 15: DFDS structure, ownership and earnings split
DFDS structure, ownership and earnings split DFDS Group DKK bn Revenue 2017-18 Q2 LTM per division People & Ships Finance 16 14 12 Shipping Division Logistics Division 10 10.2 Shipping Division 8 Logistics Division • 23 ferry routes - freight • Door-door transport 6 Eliminations and other and passen
Slide 16: DFDS key figures – impact from UNRR acquisition in 2018
DFDS key figures – impact from UNRR acquisition in 2018 DKK bn Revenue Inv cap, DKK bn Invested capital & ROIC before special items ROIC, % 15 18 20 16 18 12 14 16 14 12 9 12 10 10 6 8 8 6 6 3 4 4 2 2 0 0 0 2014 2015 2016 2017 2018 Q2 LTM 2014 2015 2016 2017 2018 Q2 LTM Shipping Division Logistics D
Slide 17: Shipping
SHIPPING Q2 LTM 2018: Shipping Division Business units & ROIC, Q2 LTM 2018 Revenue North Sea Baltic Sea Channel Mediterranean North Sea Baltic Channel Mediterranean Passenger Passenger EBIT Sea 16% 31% 20% 2% 20% 0% 20% 40% 60% 80% 100% . 17 17
Slide 18: It's All About the Route
IT’S ALL ABOUT THE ROUTE . 18 18
Slide 19: Ferry route capacity dynamics
FERRY ROUTE CAPACITY DYNAMICS - stepwise addition of ferries on a route 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 1 100% Klaipeda ddd
Slide 20: Logistics
LOGISTICS Q2 LTM 2018 Logistics Division Business units & ROIC, Q2 LTM 2018 Revenue Nordic Continent UK & Ireland EBIT Nordic Continent UK & Ireland 24% 14% 7% 0% 50% 100% . 20 20
Slide 21: Brexit
BREXIT . 21 21
Slide 22: Some slowdown in UK-EU trade growth in 2018
Some slowdown in UK-EU trade growth in 2018 • EU growth scenario continues EU-UK trade of goods – volume growth to mitigate uncertainty related 10% to Brexit 8% • Lift in UK export growth to EU post Brexit vote leveling off 6% but still above pre-Brexit level 4% Brexit vote • Volume growth divergenc
Slide 23: DFDS is planning for two scenarios
DFDS is planning for two scenarios Hard Brexit Transition period Brexit March 19, 2019 December 31, 2020 • UK departs the EU at 11pm UK time • Transition period to allow UK to get most in place and allow businesses • UK gives up full access to the single and others to prepare for the new market and
Slide 24: Actions to mitigate possible Brexit impacts
Actions to mitigate possible Brexit impacts • Key risk is development of UK GDP Possible hard Brexit impacts growth as trading volumes are linked to GDP • Cumbersome customs process • Congestion in ports • Reduction in trade volumes • UK supply chains closely integrated with • Increase in unaccompan
Slide 25: Mediterranean
MEDITER RANEAN . 25 25
Slide 26: Mediterranean expansion through acquisition of U.N. Ro-Ro
Mediterranean expansion through acquisition of U.N. Ro-Ro • Leading freight ferry company with 34% market share of ferry & road market and 60% market share of ferry market • High growth region • Similar unaccompanied ferry business model and fleet create opportunities for synergies • Increased flexi
Slide 27: U.N. Ro-Ro routes and ports
(1) U.N. Ro-Ro owns 60% of Port of Trieste’s operator (Samer Seaports Company), owns the company that has the concession agreement (2) Pendik port is fully owned 27 Source: U.N. Ro-Ro
Slide 28: U.N. Ro-Ro overview
U.N. Ro-Ro overview Business overview Key figures • Established 1994, #1 freight ferry operator in Vessels 12 (total capacity of 45.4km lanemeters) Turkey in terms of market share, number and capacity of vessels Ports Owns Pendik and Trieste Port(1), operates in Ambarli, Toulon, Mersin and Bari • 5
Slide 29: Ferry expected to continue to gain market share vs road
Ferry expected to continue to gain market share vs road Export freight from Turkey to Europe • Truck investment needs for forwarders and hauliers reduced by using Units '000 unaccompanied ferry solution 300 59% • Ferry also competitive vs driving through 250 57% Balkan region: 55% 200 • Transit time
Slide 30: EU is important and balanced trade partner with Turkey
EU is important and balanced trade partner with Turkey Turkey’s top trade partners (2017) Turkish trade market share 9.3% 40 5.0% 30 (US$bn) 20 0.6% 10 0 Romania France China Russia UAE Iran Iraq Germany US UK India Poland Spain Japan Italy Belgium Israel Switzerland Netherlands South Korea Source:
Slide 31: Turkey - inflation and exchange rate development of TRY
Turkey - inflation and exchange rate development of TRY • TRY-depreciation is linked to high TRY/DKK inflation rates in Turkey: 2.55 2016 2017 2018 • 2016: 8% 2.35 • 2017: 11% • 2018 ytd: 16% 2.15 1.95 • Turkey’s real GDP was up 7% in Q1 1.75 • FY GDP forecast at around 4% before -15% TRY dropped in
Slide 32: Turkey – impact of TRY depreciation on DFDS finance items
Turkey – impact of TRY depreciation on DFDS finance items • Finance items impacted by ‘one-off’ currency TRY/DKK loss on debtors 1.45 1.40 • Mediterranean’s prices are set in EUR to 1.35 protect revenue development 1.30 • Invoicing in TRY implies, however, currency risk 1.25 in 60 day payment period
Slide 33: Turkish trade historically resilient in face of TRY depreciation
Turkish trade historically resilient in face of TRY depreciation Turkey trading, indexed import/export ro-ro volumes, and exchange rate TRY/EUR 6.00 300 Crisis 4 Depreciation sparked by conflict with USA 5.17 5.00 240 250 Crisis 2 Crisis 1 Global financial crisis Banking led crisis EUR/TRY depreciat
Slide 34: Turkey – impact of TRY depreciation on trading
Turkey – impact of TRY depreciation on trading • Export volumes increased 17% Jan-May 2018 while import volumes were up 3% Turkey-Europe cargo split 0% 5% 10% 15% 20% 25% 30% 35% • Currency depreciation is impacting import Parts volumes – once TRY is stabilised imports are expected to resume but lik
Slide 35: Key Focus Areas 2018
KEY FOCUS AREAS 2018 . 35
Slide 36: Key growth and efficiency events shaping 2018 & beyond
Key growth and efficiency events shaping 2018 & beyond Growth from • Special Cargo: operator of flatbed trailers in Europe, acquisitions consolidated 3 January 2018 • U.N. Ro-Ro: freight ferry routes connecting Europe and Turkey, completed 7 June 2018 • Integration expected to be completed in 2018 •
Slide 37: as AER ae ‘ ae
as AER ae ‘ ae
Slide 38: Appendices
APPENDICES . 38 38
Slide 39: Key Northern European ferry companies
KEY NORTHERN EUROPEAN FERRY COMPANIES • Logistics office/warehouse ― Container/sideport route 39 39
Slide 40: DFDS fleet overview and key figures 2017
DFDS fleet overview and key figures 2017 Average age Passenger Container and Ownership of owned Total ships Ro-ro ships Ro-pax ships ships sideport ships share, % ships, yrs DFDS Group 64 22 18 4 20 - - Shipping Division 40 22 14 4 - - - North Sea 18 18 - - - 72 13 Baltic Sea1 9 2 7 - - 67 16 Channe
Slide 41: Freight ferry capacity (ro-ro) – total down, large ships growing
Freight ferry capacity (ro-ro) – total down, large ships growing Global freight ferry (ro-ro) capacity per ship size, lane • Freight ferry (ro-ro) capacity expected to LM '000 metres decrease 2% in 2017 driven by smaller 1,000 CAGR: -2.4% ships 800 600 2501-4000+ • CAGR of -2.4% in global LM capacit
Slide 42: Ferry capacity (ro-pax) – stable, large ships growing
Ferry capacity (ro-pax) – stable, large ships growing Global ro-pax capacity per ship size, lane metres • Ferry (ro-pax) capacity expected to LM '000 remain flat in 2017 as increase in 600 CAGR: -0.2% capacity of large ships is balanced by 500 CAGR: +4.6% decrease for smaller ships 400 2501-4000+ 30
Slide 43: Orders for own routes set to maintain stable ferry market
Orders for own routes set to maintain stable ferry market • Trend towards larger ships set to Shipping Division: Fleet overview 2016 continue as ferry operators order ships Average age of for own route networks Ro-pax Passenger Ownership owned Total ships Ro-ro ships ships ships share, % ships, yrs
Slide 44: 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 44 44
Slide 45: 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 forw
DFDS — Company Day at Jyske Bank, Silkeborg, 3 September 2018 on 6ix