Dfds A/s · OMXCOP:DFDS
Dfds A/s — Debt Investor Presentation (May 2019)
30 slides from Dfds A/s's debt investor presentation, May 2019
Slide 1: Bond Investor Presentation
BOND INVESTOR PRESENTATION May 2019
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: Key credit highlights
Key credit highlights 1 Leading Ferry Route operator for freight and passengers in and around Europe 2 Focused logistic operator supporting Ferry Routes 3 Founded in 1866 with supportive and stable ownership structure 4 Mature ferry sector has stable competitive dynamic and ongoing consolidation 5 D
Slide 4: Our sustainability focus
Our sustainability focus a Environmental Footprint Our ambitions Support marine environment Responsible neighbour Improve air quality UN Sustainable Development Goals wip Caring Employer Our ambitions Well-being for all employees Inclusive workplace Opportunities to do good UN Sustainable Developmen
Slide 5: Leading European ferry operator & focused logistics provider
Leading European ferry operator & focused logistics provider About DFDS Stable and long term ownership ‒ Founded in 1866 ‒ Listed on Nasdaq Copenhagen ‒ Headquartered in Copenhagen, Denmark ‒ Lauritzen Foundation 42% ‒ President and CEO: Torben Carlsen ‒ DFDS A/S 4% ‒ Current market cap of approx. D
Slide 6: DFDS moves freight & passengers on ferry routes in & around Europe
DFDS moves freight & passengers on 23 ferry routes in & around Europe It’s all about the routes – and their location • Serving industrial clusters • Combined trade and travel Routes are key European infrastructure elements • Part of business supply chains • 85% of carried volumes are trailers • DFDS
Slide 7: DFDS moves freight & passengers on ferry routes in & around Europe
DFDS moves freight & passengers on 23 ferry routes in & around Europe Forwarders and hauliers are key customers • Manufacturers of heavy goods are also important On 9 routes we move freight and passengers together • Business and pleasure • Key customers are people travelling by car • Cruise passenge
Slide 8: Contents
CONTENTS Overview of DFDS ‒ Ferry Division ‒ Logistics Division Mediterranean Expansion - Acquisition of U.N. Ro-Ro Market Outlook and Financial Overview Appendix 8
Slide 9: DFDS' two divisions: Ferry & Logistics
DFDS’ two divisions: Ferry & Logistics – ferry services used by Logistics Ferry Division Logistics Division • 23 ferry routes – freight and passengers • Door-door transport & contract logistics Description • 56 ferries • 5,600 trailers & 3,500 containers • 7 port terminals • 2 sideport ships and VSA
Slide 10: Ferry Division – ferry route network moving freight and passengers
Ferry Division – ferry route network moving freight and passengers • Freight: Route location and capacity, fixed schedules and Ferry Division LTM Q1 2019* Invested reliability to meet customers’ transport requirements DKK m Revenue EBIT capital ROIC % • Bespoke solutions to manufacturers of heavy go
Slide 11: 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 * Ass
Slide 12: Logistics Division – focused on full loads & contract logistics
Logistics Division – focused on full loads & contract logistics • Flexible, cost efficient and on-time transport solutions to Logistics wide variety of manufacturers of goods LTM Q1 2019* Invested DKK m Revenue EBIT capital ROIC % • Main activity is full and part loads in traffic corridors with Nord
Slide 13: Contents
CONTENTS Overview of DFDS ‒ Ferry Division ‒ Logistics Division Mediterranean Expansion - Acquisition of U.N. Ro-Ro Market Outlook and Financial Overview Appendix 13
Slide 14: Mediterranean Expansion – Acquisition of UN Ro-Ro
Mediterranean Expansion – Acquisition of UN Ro-Ro • On 7 June 2018 DFDS acquired 98.8% of the shares in U.N. Ro-Ro for DKK 3.6bn, corresponding to an EV of DKK 7.1bn • U.N. Ro-Ro is the #1 ferry operator in Turkey. ‒ Ferry routes between Turkey and France/Italy ‒ 12 modern Ro-Ro vessels at time of a
Slide 15: U.N. Ro-Ro's route network as per acquisition
U.N. Ro-Ro’s route network as per acquisition (1) U.N. Ro-Ro owns 60% of Port of Trieste’s operator (Samer Seaports), owns the company that has the concession agreement 15 (2) Pendik port is fully owned
Slide 16: Expanding customer cooperation in the Mediterranean
Expanding customer cooperation in the Mediterranean • On 21 December 2018, DFDS entered into an agreement with Ekol Logistics regarding transport of freight on DFDS’ routes • To support the expected volume increase of around 30%, DFDS entered into agreements to expand port terminals and capacity • I
Slide 17: Ownership of two key ports and access to six others
Ownership of two key ports and access to six others Pendik Port (Turkey) Port of Trieste (Italy) West East Istanbul Istanbul Ambarlı Pendik Yalova Main industrial zones DFDS port Other ports 60% ownership of Samer Seaports Other ports in route network Ambarli (Turkey) Toulon (France) Mersin (Turkey)
Slide 18: Contents
CONTENTS Overview of DFDS ‒ Ferry Division ‒ Logistics Division Mediterranean Expansion - Acquisition of U.N. Ro-Ro Market Outlook and Financial Overview Appendix 18
Slide 19: Key financial figures
Key financial figures Revenues EBITDA and margin before special items DKKbn DKKbn Margin (%) 18 Ferry Logistics Eliminations EBITDA Margin Margin (IFRS 16) 16 4,0 25 14 3,5 IFRS16 impact 12 3,0 20 10 2,5 8 2,0 15 6 1,5 4 1,0 10 2 0,5 0 0,0 5 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 -2 Inves
Slide 20: Clear policy on capital structure and distributions
Clear policy on capital structure and distributions NIBD/EBITDA • Capital structure target: NIBD/EBITDA multiple of Reported IFRS 16 restated FY2020 & unaudited 1Q19 minimum 2.0x and maximum 3.0x 3,5x 3,3 3,1 3,0x IFRS16 impact 2,8 Capital structure target • Excess capital to be returned to sharehol
Slide 21: Debt composition and ship encumbrance
Debt composition and ship encumbrance Mortgage Ships/Total Assets Debt composition Q1 2019 35% DKKbn Bonds; 1,5 Internal LT target: 30% Ship Mortgage / total assets 20% 25% Ship Mortgage; 20% 2,1 15% Bank Debt; 6,0 10% 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018* Q1 Leasing; 2,9 2019* * 2018
Slide 22: Debt repayment profile and CAPEX
Debt repayment profile and CAPEX Debt Repayment Profile* Capex Outlook DKKbn Amortisation Refinance, Bond 7,0 • Capex Guidance 2019: Total DKK 2,800m 6,0 ‒ Newbuildings DKK 1,400m 5,0 4,0 ‒ Other Capex incl. scrubbers DKK 1,400m 3,0 2,0 • Capex 2020: delivery 3 freight new buildings 1,0 0,0 2019 202
Slide 23: IFRS 16 adjustments
IFRS 16 adjustments Q4 2018 LTM Covenants Proforma IFRS 16 Before After Reported unaudited IFRS Adjustment IFRS 16 IFRS 16 DKKm 16 restated EBITDA before special items 2,988 601 3,589 Total Assets 22,132 2,581 24,713 Net interest-bearing debt 8,513 2,738 11,251 Equity ratio, % 41.8 -5.0 36.8 Min 30%
Slide 24: Major drivers and DFDS performance overview Q1 2019
Major drivers and DFDS performance overview Q1 2019 • Revenue growth of 11% driven by Mediterranean Change vs DKKm Q1 19 Q1 18 LY Change % Revenue 3,870 3,485 385 11% • Cost increase from Mediterranean ramp-up, EBITDA BEFORE SI 677 597 80 13% additional dockings and development of IT/Digital margin,
Slide 25: Priorities 2019 – unchanged earnings outlook
Priorities 2019 – unchanged earnings outlook • Adapting to market changes: OUTLOOK 2019 ‒ Continue Brexit preparation ‒ Optimise capacity utilization in • Revenue growth of 10-12% Mediterranean • Opening of new route, Gothenburg-Zeebrugge • EBITDA range of DKK 3,800-4,000m (2018: restated DKK 3,589m
Slide 26: IFRS Adjustments Q&A
IFRS 16 Adjustments Q&A . 26
Slide 27: 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 28: Risk factors
Risk factors Business 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
Slide 29: 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 30: 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