Dfds A/s · OMXCOP:DFDS
Dfds A/s — Investor Day (June 2019)
57 slides from Dfds A/s's investor day presentation, Jun 18, 2019
Slide 1: Mediterranean Business Plan
MEDITERRANEAN BUSINESS PLAN Win23, Pillar C 18 June 2019
Slide 2: Content
Content ▪ Overview Mediterranean business unit ▪ Political, economic and competitive landscape ▪ Integration and synergies ▪ Business development 2
Slide 3: Strong Mediterranean ferry route network and port infrastructure
Strong Mediterranean ferry route network and port infrastructure DFDS Mediterranean Activities Key numbers Train lines # Ferry lines 10 ferry lines Ferry lines Calais Dourges Ghent Genk # Train lines 13 train lines Bettembourg Ludwigshafen Paris Munich Wels Salzburg # Terminals 11 terminals Lyon Nov
Slide 4: 2018: June acquisition followed by currency headwind
2018: June acquisition followed by currency headwind DFDS Mediterranean in 2018 after acquisition (June – December) Train lines # Vessels 13 vessels Ferry lines % Utilization 76% utilization Dourges Bettembourg Ludwigshafen Market share of 32% Paris Munich Wels Market share (Jun – Dec) Salzburg Nova
Slide 5: 2019: Transitional year of expansion and recession headwind
2019: Transitional year of expansion and recession headwind DFDS Mediterranean in 2019 Train lines # Vessels 16 vessels Ferry lines % Utilization Dourges Ghent Calais Genk Bettembourg Ludwigshafen Market share increase to 44% Paris Munich Wels Market share Salzburg 8% Lyon Novara 44% 46% Trieste 2%
Slide 6: 2020: All set to optimise operations and cost structure
2020: All set to optimise operations and cost structure DFDS Mediterranean in 2020 Train lines # Vessels 14 vessels Ferry lines % Utilization Dourges Ghent Calais Genk Bettembourg Ludwigshafen Paris ▪ Due to market conditions and completion of Munich Wels Salzburg scrubbers, two ferries will exit Me
Slide 7: DFDS entry to growth market, albeit with political and economic volatility
DFDS entry to growth market, albeit with political and economic volatility Turkish political, economic and competitive landscape ▪ General elections and constitutional changes have stabilized the political Foreign policy situation volatility but close ties to ▪ Increased tension between Turkey and e
Slide 8: European and Turkish growth rates are currently stagnating
European and Turkish growth rates are currently stagnating +6% average Turkish growth between 2012 and 2018 Real GDP growth p.a. 2012-2023 % Turkey European Union ▪ High Turkish growth rates at 14 High growth Down- IMF recovery almost 6% on average since 12 turn forecast 2012 10 ▪ European growth ra
Slide 9: Turkish imports and exports show resilience when facing depreciating currency
Turkish imports and exports show resilience when facing depreciating currency Turkish imports and exports against the EUR to TL exchange rate, 2000 to 2018 Ltm q1 19 EUR to TL mTonnes Crisis 4 6.0 ▪ TRY depreciation 6.0 Crisis 2 5.5 sparked by the pressure 5.8 5.5 ▪ Global financial crisis 5.5 on in
Slide 10: Turkey and Europe interdependent on both imports and exports
Turkey and Europe interdependent on both imports and exports Europe is the main trading partner for Turkey årstal Export Import bUSD 98 94 100 83 80 60 46 40 ▪ Commodity trade with 20 11 11 15 12 Europe accounts for 54% 7 6 0 1 1 2 3 of total Turkish trade Europe Asia Africa North America South Amer
Slide 11: Benefits still to come from commercial, platform and support integration
Benefits still to come from commercial, platform and support integration Commercial Platform Support Utilize network strength to Ensure operational, technical Make use of the increased cross-sell and take advantage and IT competencies of both scale to lower costs and share of new business developmen
Slide 12: 3 key development initiatives
3 key development initiatives: Merge with DFDS network, increase cargo flow and further strengthen route network A B C Merge with DFDS networks Increase flow of business by Further strengthen network and gain further scale upgrading infrastructure 12
Slide 13: Commercial and operational merger with DFDS networks to gain scale
Commercial and operational merger with DFDS networks to gain scale Oslo Gothenburg Train lines Ferry lines ▪ Cross selling on Ghent – Gothenburg route Copenhagen Cross-selling Immingham Kiel Klaipeda GNE-GOT Felixstowe Cuxhaven Dover Vlaardingen ▪ Cross selling on Channel routes (Turkish Calais Ghen
Slide 14: Terminal improvements to increase flow of business
Terminal improvements to increase flow of business Italian terminal expansion Turkish terminal expansion French terminal set up ▪ Migrate terminal train operations ▪ Additional capacity from adjacent ▪ Further capacity through operations area secured from Sete terminal ▪ Additional capacity added fr
Slide 15: Focus on intermodal infrastructure provides platform for growth
Focus on intermodal infrastructure provides platform for growth Intermodal benefits ▪ Increased flow of cargo with intermodal infrastructure Infrastructure ▪ Increased accessibility to Mediterranean network through intermodal infrastructure ▪ Turkish customers use intermodal solutions to by-pass per
Slide 16: We are expanding intermodal network
We are expanding intermodal network Existing lines Taking over intermodal lines operated by single customers Fredericia Kiel Cuxhaven Calais Ghent Duisburg Opening new intermodal connections from Genk Dourges Cologne hubs connecting networks Paris Bettembourg Ludwigshafen Ostrava Karsruhe Munich Wel
Slide 17: Mediterranean business plan intact heading to 2023!
Mediterranean business plan intact heading to 2023! Turkey has seen economic crises before - strong track record of rebounding Volumes consists of diversified trade flows across numerous industries Ferry business model cost efficient for hauliers and logistics providers IMF forecast of 2-3% GDP grow
Slide 18: Q&A
Q&A . 18
Slide 19: Capacity, Ferry Market and Port Terminals
CAPACITY, FERRY MARKET AND PORT TERMINALS Win23, Pillar C 18 June 2019
Slide 20: Content
Content • DFDS new building program – Pillar C • Freight ferry supply side – total market • Port terminals 20
Slide 21: A ferry is not just a ferry
A ferry is not just a ferry • Ferries are increasingly purpose built by operators for deployment Freight and in own route network Freight ferry • Length and width passenger ferry • This trend and the financial crisis • Lane metre capacity • No. of decks and height • Same as freight ferry, have resul
Slide 22: Ephesus - DFDS' first new mega ferry
Ephesus - DFDS’ first new mega ferry • 450 trailers • 6 hours turnaround time • 3 stern ramps • Double ramps to upper deck • Shore power • LED lights • Can use bio-degradeable lube oil . 22
Slide 23: DFDS' new building program
DFDS’ new building program • New buildings ordered at favourable DFDS ferries delivered/ordered 2019-23 point in cycle No. of ships Lanemetres, '000 • Similar new building price today for 4 25 3 ro-ro 3ro-ro new ro-ros vs last generation ro-ros and 20 around 80% more capacity 3 15 • Freight capacity
Slide 24: 2 ro-paxes to lift capacity and offering in Baltic network
2 ro-paxes to lift capacity and offering in Baltic network 1 Individual Cabins 2 # of Drivers 3 Cabin Utilization +12,000 66,000 54,000 ✓ 2014 2017 Free ’12-’15 Occupied ’16-’19 24
Slide 25: DFDS' new building program – strong contribution to Pillar C
DFDS’ new building program – strong contribution to Pillar C • Forecast of 12% capacity increase includes 2% fewer departures and fewer ferries in fleet • Unit cost lowered by size and operating costs close to C current large ferries (crew, bunker) • Some cost increase in port terminals mitigated by
Slide 26: Content
Content • DFDS new building program – Pillar C • Freight ferry supply side – total market • Port terminals 26
Slide 27: New building deliveries – ro-ro and ro-pax
New building deliveries – ro-ro and ro-pax Freight ferry lane metre capacity from new buildings Lane metres, '000 90 80 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Freight ferries, Ro-Ro Freight & pass
Slide 28: New building deliveries – ro-ro and ro-pax
New building deliveries – ro-ro and ro-pax Freight ferry lane metre capacity from new buildings Lane metres, '000 90 80 Capacity 70 growth from deliveries Slump in new 60 following New buildings 50 upturn in generation of following economy, mega ferries 40 financial some ordered 30 crisis 20 specula
Slide 29: Growth of global freight ferry capacity - ro-ro
Growth of global freight ferry capacity* - ro-ro Global freight ferry capacity • LM CAGR 2009-2018: Lane metres, '000 No. of freight ferries, ro-ro 900 550 -1.7% 800 500 • Forecast for LM CAGR 700 450 2019-2023: +1.4% 600 500 400 • No. of freight ferries 400 350 forecast to be halved in 300 300 2023
Slide 30: New building deliveries per operator
New building deliveries per operator Freight ferries, ro-ro, on order 2019-23 Freight and passenger ferries, ro-pax, on order 2019-23 No. of ships Lanemetres, '000 No. of ships Lanemetres, '000 14 100 9 18 90 8 8 16 12 12 80 7 14 10 70 6 12 60 5 10 8 50 4 4 8 6 40 3 6 4 4 30 2 2 2 2 4 3 20 1 1 1 1 1
Slide 31: No race to the bottom in sight in the ferry market
No race to the bottom in sight in the ferry market • European ferry sector consists of a limited number of companies • Almost all with a focused regional strategy • Most ferries are purpose built – but versatile as different types of freight can be carried • Roll-trailers enable freight to become ‘r
Slide 32: Scrapping dynamics
Scrapping dynamics • Scrapping held back due to volume growth and lack of capacity 88 freight ferries, ro-ro, built 1990 • Scrapping expected to resume larger scale during 2020 or before. 109k as new and more efficiency capacity is delivered lane metres • New regulations will drive this process as i
Slide 33: Dynamics of deployment of new ferries
Dynamics of deployment of new ferries • Very few of total orderbook of 46 ro-ro and ro-pax ferries ordered on speculation • Ferries in general ordered by operators to renew fleets and add capacity to existing routes to accommodate growth • Opening of new routes by independent tonnage owners requires
Slide 34: Content
Content • DFDS new building program – Pillar C • Freight ferry supply side – total market • Port terminals 34
Slide 35: Port terminals
Port terminals • Freight ferry port terminals require large space to park trailers & other rolling units • Plus connection to transport infrastructure that can cope with large volumes • Also rail connections required for some customer solutions • New mega ferries will lead to expansion of existing p
Slide 36: DFDS port terminal strategy
DFDS port terminal strategy • Cost-efficient services, flexibility – customer front line • Mix of non-dedicated and dedicated terminals contingent on market situation • Ability to provide value- adding logistics services – support for Pillar A strategy 36
Slide 37: General port terminal trends
General port terminal trends • Focus on development of existing port terminal infrastructure • Existing hubs expected to increase in size • No major new port terminals for ferry services planned or expected to be built in strategy period • Automation of port operations 37
Slide 38: Positive Pillar C impact and stable supply side expected
Positive Pillar C impact and stable supply side expected • New building program contributes to Pillar C through lower unit, capacity growth and changing market dynamics • Capacity entering market in next five years predominantly ordered by operators for own routes • Mature ferry sector focused on de
Slide 39: Ree eg a)
Ree eg a)
Slide 40: Trends and Sustainability
Trends and Sustainability
Slide 41: The Transport & Logistics industry is behind other sectors, but at the brink of major disruptive waves
The Transport & Logistics industry is behind other sectors, but at the brink of major disruptive waves Digital Disruption occurred maturity Fully digitalized players own market Media Telecom, Insurance, and Banking Disruptive moves ongoing Online players on the rise, incumbents partially Retail leve
Slide 42: We have assessed the most important technologies for DFDS
We have assessed the most important technologies for DFDS Deep dive on following pages High Autonomous trucks AI Autonomous terminals IoT Impact Autonomous vessels Energy 2.0 Autonomous Blockchain cars Low 2018 2028 2038 Timing for material impact 42 Source: BCG analysis, Victoria Transport Institut
Slide 43: Autonomous trucks: Multiple players are conducting tests on public roads
Autonomous trucks: Multiple players are conducting tests on public roads 43
Slide 44: Autonomous trucks: Majority of tasks related to trucks and driver can be automated
Autonomous trucks: Majority of tasks related to trucks and driver can be automated Before trip During trip Loading ETA and Booking Maintenance Check-in at Planning and securing Driving delivery capacity on road terminals cargo status • DFDS check for • DFDS plan routes • Truck driver • Drivers neede
Slide 45: Cooperation with Volvo Trucks on autonomous trucking
Cooperation with Volvo Trucks on autonomous trucking 45
Slide 46: Autonomous terminals: Container terminals automated, but no full RoRo terminal automation
Autonomous terminals: Container terminals have long been undergoing automation, but no one has done full RoRo terminal automation Maasvlakte 2 46
Slide 47: Autonomous terminals: Ghent terminal is constructing an autonomous gate
Autonomous terminals: Ghent terminal is constructing an autonomous gate Fundamentals of the “Ghent gate” project Background • Project initiated to enable higher throughput of trailers, to ensure Jinlings can be handled (would increase peak pressure) • Ghent gate would enable more trucks to pass thro
Slide 48: Autonomous vessels: A number of autonomous ship projects, primarily in Norway
Autonomous vessels: A number of autonomous ship projects, primarily in Norway Birkeland Sea Shuttle 48
Slide 49: Energy 2.0: Switch in propulsion is slowly underway
Energy 2.0: Switch in propulsion is slowly underway, partly driven by regulatory developments 49
Slide 50: MASH Biotech: DFDS has invested in a biofuel start-up
MASH Biotech: DFDS has invested in MASH Biotech – a start-up company producing biofuel + Develop a sustainable and commercially viable marine biofuel to reduce the environmental impact from shipping Scale up the production of marine biofuel making it a serious alternative to fossil fuels Replace fos
Slide 51: Sustainability: We have a new CSR strategy
Sustainability: We have a new CSR strategy 51
Slide 52: Sustainability: 63 initiatives already ongoing across all of DFDS
Sustainability: 63 initiatives already ongoing across all of DFDS 52
Slide 53: Q&A
Q&A . 53
Slide 54: WIN23: Wrap up and final Q&A
WIN23: WRAP UP AND FINAL Q&A DFDS GROUP 2019-2023 18 June 2019
Slide 55: WIN23 - strategic and financial ambitions for next 5 years
WIN23 - strategic and financial ambitions for next 5 years • Resilient combination of ferry route infrastructure and logistics solutions 33% 45% • Balanced impact from organic initiatives, 57% Mediterranean business plan and acquisitions • High share of initiatives contingent on own ability to perfo
Slide 56: Q&A
Q&A . 56
Slide 57: Thank you
THANK YOU DFDS CAPITAL MARKETS DAY 2019 18 June 2019