Dfds A/s · OMXCOP:DFDS
Dfds A/s — Danske Winter Seminar, Copenhagen, 5 December 2018
32 slides from Dfds A/s's conference presentation, December 2018
Slide 1: Ferry Routes & Logistics – DFDS Group Update, December 2018
FERRY ROUTES & LOGISTICS DFDS Group Update December 2018
Slide 2: What we do
WHAT WE DO . 2 2
Slide 3: We move freight and passengers on 23 ferry routes
We move freight and passengers on 23 ferry routes in Europe and Turkey 3 3
Slide 4: It's all about the routes – and their location
It’s all about the routes – and their location Serving industrial clusters Combined trade and travel 4 4
Slide 5: Our key freight customers are forwarders and hauliers
Our key freight customers are forwarders and hauliers Manufacturers of heavy goods are also important customers 5 5
Slide 6: On 9 routes we move freight and passengers together
On 9 routes we move freight and passengers together 6 6
Slide 7: We also provide transport and logistics solutions
We also provide transport and logistics solutions to a wide range of businesses 7 7
Slide 8: 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 9: 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 9 9
Slide 10: Ferry types
FERRY TYPES Day ferry (ro-pax), Channel Freight ferry (ro-ro) Cruise ferry Combined freight and passenger ferry (ro-pax)
Slide 11: Structure & performance
STRUCTURE & PERFORMANCE . 11 11
Slide 12: DFDS structure, ownership and earnings split
DFDS structure, ownership and earnings split DFDS Group DKK bn Revenue 2017-18 Q3 LTM per division People & Ships Finance 18 16 14 Shipping Division Logistics Division 12 10.7 Shipping Division 10 8 Logistics Division • 23 ferry routes - freight • Door-door transport 6 Eliminations and other and pas
Slide 13: DFDS key figures
DFDS key figures DKK bn Revenue DKK bn EBITDA & margin before special items Margin, % 16 3.0 20 14 18 2.5 12 16 2.0 10 14 8 1.5 12 6 1.0 10 4 0.5 8 2 0 0.0 6 2014 2015 2016 2017 2018 Q3 LTM 2014 2015 2016 2017 2018 Q3 LTM Shipping Division Logistics Division Invested capital & ROIC before special it
Slide 14: Brexit
BREXIT . 14 14
Slide 15: DFDS' UK exposure
DFDS’ UK exposure • Ferry routes connecting UK to Continent and Ferry routes: UK-Continent/Scandinavia LTM Scandinavia (business units Channel and North Sea revenue: DKK 5.3bn plus Amsterdam-Newcastle) 29% • LTM revenue of around DKK 5.3bn with average operating leverage of 65% • Logistics: UK & Ire
Slide 16: DFDS is planning for two scenarios
DFDS is planning for two scenarios Hard Brexit Transition period Brexit March 29, 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 17: Preparations focus on: assets, processes and expertise
Preparations focus on: assets, processes and expertise Assets Processes Expertise New assets to New Building enable new processes to expertise to services and grow business address mitigate and ensure customs congestion and efficient challenges volume loss operations 17
Slide 18: Assets for new services, mitigate congestion/volume loss
Assets for new services, mitigate congestion/volume loss Objective Asset-related activity Activity description Additional facilities to hold additional stock pre and Enable new services Warehousing facilities post clearance and mitigate congestion Warehousing facilities to allow cargo to be held and
Slide 19: New processes to grow business and efficient operations
New processes to grow business and efficient operations Objective Process-related activity Activity description Customs clearance Offer customs documentation services to customers Grow business Duty free on PAX and RO-PAX routes to increase on- Duty free board sales Test assumed IT processes to asse
Slide 20: Building expertise to address customs challenges
Building expertise to address customs challenges Objective Expertise-related Activity description activity Customs clearance teams being set up, trained and Customs team upsized across the divisions Build internal Dedicated groups of local BUs formed to solved Working groups customs expertise common
Slide 21: Contingency plan triggered if hard Brexit confirmed
Contingency plan triggered if hard Brexit confirmed • Create short-term capacity in terminals to reduce traffic e.g. by renting extra space • Postpone docking of vessels from Q1 to Q2 to cater for pre-Brexit trade spike (already decided) Assets • Focus on sales by supporting customers in navigating
Slide 22: Mediterranean
MEDITER RANEAN . 22 22
Slide 23: U.N. Ro-Ro ownership notes
(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 23 Source: U.N. Ro-Ro
Slide 24: 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 25: Mediterranean's geographical reach
Mediterranean’s geographical reach Mediterranean’s Target and Secondary Markets Finland Norway Sweden Latvia Denmark Ireland U.K. Germany Poland Netherlands Belgium Luxembourg Czech Republic Slovakia France Austria Switzerland Slovenia Trieste (1) Portugal Toulon Ambarlı Italy Spain Pendik (2) Bari
Slide 26: 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 China France UAE Russia Iran Iraq US UK India Poland Spain Japan Germany Italy Belgium Israel South Korea Switzerland Netherlands Source:
Slide 27: UNRR – cargo split on routes
UNRR – cargo split on routes • Semi-manufactured UNRR: Turkey-Europe cargo split goods used as parts in 0% 10% 20% 30% 40% Turkish manufacturing plants comprise around Parts two thirds of import volumes carried on DFDS Auto industry routes Textiles Materials Machines Food Furniture, construction mat
Slide 28: 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 29: Import ro-ro volumes exceed export volumes
Import ro-ro volumes exceed export volumes EUR:TL vs. Export-Import Volume Specific to Ro-Ro 6,000,000 6.00 5.17 5,000,000 5.00 4.12 4,000,000 4.00 3.34 3,000,000 3.02 3.00 2.91 2.53 2.33 2.31 2.16 2,000,000 1.99 2.00 1.90 1.77 1.80 1.78 1.69 1.67 1.43 1.10 1,000,000 1.00 0.58 0 0.00 2000 2001 2002
Slide 30: Robust Mediterranean volume development
Robust Mediterranean volume development Mediterranean (ex. Marseille-Tunis) • Jan-Sept* volumes: LM '000 +3.0% 340 • Q3 volumes: -0.8% 320 • Volumes consistently 300 above 2017 until July 280 • TRY depreciation and extended holiday 260 lowered volumes in August 240 220 • Rebound to above 2017 in Sep
Slide 31: Current priorities
Current priorities • Preparing for Brexit transition • Customer satisfaction – grow the topline • Continue push for efficiency improvements • Improve performance of Passenger business unit • Integration of U.N. Ro-Ro • Realise our next steps in digital strategy • Deployment of two freight new buildi
Slide 32: Q&A
Q&A . 32
DFDS — Danske Winter Seminar, Copenhagen, 5 December 2018 on 6ix