OUTLOOK , RAISED FOR 2016 DFDS GROUP Q1 2016 p u d 12 May - - PowerPoint PPT Presentation

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OUTLOOK , RAISED FOR 2016 DFDS GROUP Q1 2016 p u d 12 May - - PowerPoint PPT Presentation

Dec 10, 2022 235 likes •365 views

OUTLOOK , RAISED FOR 2016 DFDS GROUP Q1 2016 p u d 12 May 2016 Contents Overview Q1 numbers Financial leverage Channel Outlook 2016 Strategy, goals and priorities The statements about the future in this

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p u d , OUTLOOK

RAISED FOR 2016

DFDS GROUP Q1 2016

12 May 2016

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Contents

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  • Overview
  • Q1 numbers
  • Financial leverage
  • Channel
  • Outlook 2016
  • Strategy, goals and priorities

The statements about the future in this announcement contain risks and uncertainties. This entails that actual developments may diverge considerably from the statements about the future.

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Earnings improved throughout route network

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  • The route network’s volume and unit revenue growth exceeded

expectations in Q1:

  • Freight overflow to routes from Polish-Russian border dispute
  • Channel volume growth stronger than foreseen
  • 5% freight volume growth in network excluding Channel
  • Higher average unit revenues
  • In addition, Shipping Division’s Q1 earnings boosted by early Easter

and reduced bunker costs - performance in all business units improved

  • Logistics Division’s Q1 earnings above expectations and LY in Nordic

and Continent – UK & Ireland improved vs LY in local currency

  • Continued earnings support from improvement and efficiency projects
  • ROIC LTM* Q1 increased to 15.3% (FY 2015: 13.7%) before special

items

  • EBITDA outlook raised to DKK 2,300-2,500m (DKK 2,100-2,300m)

*Last twelve months

0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2013 2014 2015 LTM Q1 2016 Outlook 2016 DKK bn

EBITDA before special items

New outlook

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52 54 189 367

  • 13
  • 16
  • 50

50 150 250 350 450

Q1 2015 Q1 2016

DKK m

EBITDA before special items, Q1

Logistics Division Shipping Division Non-allocated

100 200 300 400 500 600 700 800 900 Q1 Q2 Q3 Q4 DKK m

EBITDA before special items per quarter

2014 2015 2016

Q1 2016 – EBITDA up by 77% to DKK 405m

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Margin: 10.3% Margin: 12.6%

  • Three primary drivers of the EBITDA

increase:

  • Baltic Sea boosted by an overflow of trucks

from border dispute between Poland and Russia, benefits from scrubbers and conversion of Russian route to a slot charter

  • North Sea saw continued volume growth on

UK-Continent routes supported by increased

  • capacity. Unit revenues increased
  • Channel improved result despite extra costs

for capacity increase. 36% higher volume for both freight and passengers

  • Key logistics activities in Scandinavia,

Continent and UK increased earnings - some weakness in Norway, Northern Ireland and Italy

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Baltic Sea and North Sea main EBIT drivers

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  • North Sea +41m: Highest volume and RPM

growth achieved on NS South routes supported by increased capacity. Positive impact on Vlaardingen port terminal. Benefits from scrubber installations, largest

  • n NS North & Esb-Imm routes
  • Baltic Sea +64m: Overflow of trucks from

border dispute boosted both volumes and

  • RPM. Benefits achieved from scrubber
  • installations. Russian route converted to

slot charter

  • Channel +23m: Dover-Calais improved

result despite extra costs for capacity

  • increase. Growth in passengers on Dover-

Dunkirk

  • Passenger +14m: Positive impact from

Easter and lower bunker cost

181 27 14 41 64 23 13 2 2

  • 1
  • 4

20 40 60 80 100 120 140 160 180 200 DKK m

Q1 2016: DFDS Group EBIT development vs LY

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Q1 2016 in numbers

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  • Reported revenue growth of 6% and 9%

excluding revenue from bunker surcharges

  • Operating costs reduced by lower bunker

costs and EBITDA-margin increased to 13.1%

  • Increase in depreciations mainly due to

addition of ferries on the Channel and full- year impact of scrubber installations

  • Net finance cost reduced by net positive

currency adjustment and one-offs included in Other items

  • Positive profit before tax in Q1!
  • Increase in invested capital mainly driven by

capitalisation of two chartered Channel ferries

DKK m1 Q1 16 Q1 15 Change vs LY Change % REVENUE 3,088 2,926 162 6% EBITDA BEFORE SI 405 228 177 77%

margin, % 13.1 7.8 5.3 n.a.

P/L associates

  • 1
  • 3

2

  • 77%

Gain/loss asset sales 1 1 385% Depreciations

  • 224
  • 198
  • 26

13% EBIT BEFORE SI 181 27 153 564%

margin, % 5.8 0.9 4.9 n.a.

Special Items

  • 2

3 n.a. EBIT 181 25 156 628% Finance

  • 24
  • 41

17

  • 42%

PBT BEFORE SI 157

  • 13

170 n.a. PBT 157

  • 16

173 n.a. EMPLOYEES avg., no. 6,791 6,322 469 7% INVESTED CAPITAL 9,083 8,674 409 5% ROIC LTM ex. SI, % 15.3 9.0 6.3 n.a. NIBD 2,952 2,694 258 10% NIBD/EBITDA, times 1.3 1.7

  • 0.4

n.a. SOLVENCY, % 46 49

  • 3

n.a.

SI: Special items. PBT: Profit before tax. NIBD: Net interest-bearing debt. 1: Roundings may cause variances in sums

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1.8 1.8 1.7 0.9 1.3

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2012 2013 2014 2015 Q1 2016 LTM Times

NIBD/EBITDA

Leverage increased by Channel ferries & share buyback

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  • The NIBD/EBITDA multiple increased to 1.3 at the

end of Q1

  • NIBD increased from DKK 1.8bn at year-end 2016

to DKK 3.0bn at the end of Q1 2016 due to the capitalisation of two Channel ferries and completion of the DKK 400m share buyback end of February

  • The Channel ferries have been treated as finance

leases following delivery in February

  • 54% of current DKK 250m share buyback

completed

  • Dividend of DKK 3.00 paid in April. DKK 2.00

planned to be paid in August

  • Total distribution to shareholders of DKK 950m in

2016

LTM: Last twelve months Target leverage

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  • 10%
  • 5%

0% 5% 10% 15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Channel freight volume growth YOY, 2015-2016

Capacity increase on Dover-Calais completed

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  • 3-ferry operational set-up in place on Dover-

Calais since end of February

  • High volume growth also expected for DFDS in

Q2 as only one ferry was operated on Dover- Calais in most of Q2 2015

  • Total freight market volumes were up by 1.5%

in Q1 2016, including a drop of 2.2% in March due to the early Easter

  • Market has recovered since the turbulence in

Q3/Oct 2015, although the growth rate has decreased

  • Total car market volumes were up by 4.5% in

Q1 2016, including an increase of 12.9% in March due to the early Easter

  • Following the disrupted high season and the

Paris attacks in mid-November, the car market has been recovering

  • 15%
  • 10%
  • 5%

0% 5% 10% 15% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Channel car volume growth YOY, 2015-2016

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EBITDA outlook for 2016 raised to DKK 2.3-2.5bn

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  • Moderate economic growth in Europe continuing

in 2016 as expected

  • Freight and passenger volumes are consequently

growing – growth trends on the Baltic Sea, the English Channel and parts of the North Sea somewhat above expectations

  • Revenue growth outlook maintained at around

6%

  • Revenue growth, excluding bunker surcharges,

above expectations in Shipping is offset by lower fuel surcharges and impact from GBP depreciation in Logistics

  • Total investments of DKK 1.6bn unchanged
  • Delivery of Channel ferries ‘non-cash’ until such

time that Eurotunnel may decide to exercise their put option for the ferries

NEW OUTLOOK 2016

  • Revenue growth of around 6%,

excluding revenue from bunker surcharges

  • EBITDA of DKK 2.3-2.5bn

(prev. DKK 2.1-2.3bn)

  • Shipping Division: DKK 2,150-2,325m
  • Logistics Division: DKK 250-275m
  • Non-allocated items: DKK -100m
  • Investments of DKK 1.6bn
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2016 outlook: update of major performance drivers

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Certain/Likely Expected Uncertain Macro drivers

  • Capacity expansion:

Channel, North Sea - implemented

  • Capacity reduction:

Baltic Sea – extra ship added due to customer demand

  • Revenue increase

from new logistics contracts – drop in fuel surcharges, GBP depreciation, slower ramp-up on one contract

  • Freight shipping

volume growth raised to 15-20% (8-10%)

  • Passenger volume

growth raised to 15- 20% (6-8%)

  • Competitive pricing

environment – some easing

  • Bunker cost savings

in Passenger

  • Logistics earnings

boost from new contracts

  • Channel competitor

dynamics after deployment of upgraded ferries

  • Competitor actions
  • Impact of stock

market setback on general economy – none so far

  • Possible impacts from

migration and terrorist attacks

  • UK economy –

slowdown?

  • Brexit referendum
  • Swedish economy –

pick up?

  • Norwegian economy

– slowdown?

  • Russian market

demand set to remain ‘zero’

  • Changes in oil price

and exchange rates –

  • il price rising, GBP

weakened

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Strategy, goals and priorities

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Best practic ice Performance e culture Contin inuous improv

  • vemen

ent Leveragin ing scale Customer driven en

  • People: succession planning, talent

programme, transformation office

  • The DFDS Way: further development of
  • perating model
  • Tonnage: strategy development and

renewal decisions

  • Digital: business model development and

implementation of next initiatives

  • Market coverage: gain synergies from

expansion of route network and logistics activities through acquisitions

  • Financial performance: continue from

new higher level

DFDS’ strategy drivers:

  • The DFDS Way: Continuous improvement of

customer focus and efficiency

  • Route network expansion to leverage
  • perating model
  • Integrated route and logistics operations to

fill ships

  • Reliable partner: Financial strength and

performance

  • ROIC target of 10% across business cycle
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AIMING HIGHER IN 2016

Q&A

.