Ferry Routes & Logistics
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Change the color of the angle, choose between the four colors FERRY ROUTES & LOGISTICS DFDS Group Overview in the top menu Enter the date in the field March 2019 WHAT WE DO . 2 We move freight and passengers on 23 ferry routes in and around Europe 3 It’s all about the routes – and their location Serving industrial clusters Combined trade and travel 4 Routes are part of Europe’s and Turkey’s infrastructure And part of business supply chains 5 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 Our key freight customers are forwarders and hauliers Manufacturers of heavy goods are also important customers 7 On 9 routes we move freight and passengers together 8 People travelling by car are our key customers as is cruise passengers Both for holiday and transport purposes 9 We also provide transport and logistics solutions to a wide range of businesses 10 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 ferry Freight Share of Group 45% 20% revenue 85% freight 15% pax 11 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 Change the color of the angle, choose between the four colors FERRY TYPES Day ferry (ro-pax), Channel in the top menu Enter the date in the field Freight ferry (ro-ro) Cruise ferry Combined freight and passenger ferry (ro-pax) IT’S ALL ABOUT THE ROUTE . 14 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 ddddd * Assuming entered ships are identical to incumbent ships and same no. of departures per ship Freight Infrastructure Ferry route Port Port terminal Bridge terminal • Logistics office/warehouseRoad Road ― Container/sideportRail route Rail Tunnel 15 STRUCTURE & PERFORMANCE . 16 DFDS structure, ownership and earnings split DFDS Group DKK bn Revenue 2018 per division People & Ships Finance 18 16 14 12 Ferry Division Logistics Division 10 11.1 Ferry Division 8 Logistics Division • 24 ferry routes - freight • Door-door transport 6 Eliminations and other 4 and passengers • Contract logistics 5.3 • • 2 55 ferries 5,600 trailers and 0 • 7 port terminals 3,500 containers -2 • 2 sideport ships and VSA/SCA* EBITDA 2018 per division DKK bn 3.5 DFDS facts Shareholder structure 3.0 2.5 • Founded in 1866 • Lauritzen: 42% 2.0 Ferry Division 2.7 24.4% margin • Activities in 20 • Free float: 56% 1.5 Logistics Division European countries and • Nasdaq Copenhagen 1.0 Non-allocated items Turkey • Foreign ownership 0.5 0.3 6.2% margin • 8,000 employees share: ~30% 0.0 -0.5 17 *Vessel sharing agreements/slot charter agreements on container ships DFDS key figures Revenue DKK bn DKK bn EBITDA & margin before special items Margin, % 18 3.5 20 16 3.0 18 14 2.5 16 12 10 2.0 14 8 1.5 12 6 1.0 10 4 2 0.5 8 0 0.0 6 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Ferry Logistics Invested capital & ROIC before special items Operating cash flow & NIBD/EBITDA DKK bn Inv cap, DKK bn ROIC, % NIBD/EBITDA 20 20 3.0 3.0 18 18 2.5 2.5 16 16 14 14 2.0 2.0 12 12 10 10 1.5 1.5 8 8 1.0 1.0 6 6 4 4 0.5 0.5 2 2 0 0 0.0 0.0 2014 2015 2016 2017 2018 18 2014 2015 2016 2017 2018 FERRY DIVISION 2018: Ferry Division Business units & ROIC, 2018 Revenue North Sea Baltic Sea Channel North Sea Baltic Channel Mediterranean Passenger Mediterranean Sea EBIT Passenger 17% 29% 21% 4% 18% 0% 20% 40% 60% 80% 100% . 19 LOGISTICS DIVISION 2018 Logistics Division Business units & ROIC 2018 Revenue Nordic Continent Nordic Continent UK & Ireland EBIT UK & Ireland 23% 11% 10% 0% 50% 100% . 20 BREXIT . 21 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 & Ireland business unit mainly domestic. 71% Traffics between Nordic and Continent Freight Passengers • LTM revenue of around DKK 3.4bn with average operating leverage of 15% Logistics: UK-Domestic/Continent/Nordic LTM revenue: DKK 3.4bn • Mitigating factors and actions: • Large cost base in GBP 21% • Capacity adjustment: fewer departures, ferry 34% reallocation, number of ferries • Cost cutting • Assets, processes and expertise • Duty-free sales 45% UK domestic UK-Continent UK-Nordic 22 22 DFDS ready for no-deal Brexit Customs processes Prepared to sustain IT core Brexit and people operations functionalities communication operational in place AEO1 status obtained or about Processes, plans and teams IT automation secured Customers informed of post- to be in key areas ready 24/7 support for new Brexit procedures Last AEO application Manual processes identified functionalities Both digital and traditional processes being finalized where IT will not be ready EDI connections developed for channels leveraged Customs employees being Focus on challenges in key customers hired or trained to handle Channel volume More space in terminals DFDS’s agreement with DfT currently assumed to start as planned Mar 29, despite delay until April 12 of potential hard Brexit 1, AEO: authorized economic operator, status to ease customs processes between the EU and the UK after Brexit 23 SUSTAIN ABILITY . 2924 Our sustainability focus Environmental footprint Caring employer • Support marine environment • Focus on wellbeing for all employees • Be a good and responsible neighbour • Support an inclusive worksplace • Improve air quality • Provide opportunities to do good in communities and society 25 DIGITAL . 3126 Digital moving to centre of strategy • Digital go-to-market • Web development • Marketing automation • Easier access for smaller freight customer • Digitising the core • Improve decision making through data • Optimise operations through automation • Prepare for autonomy through innovation and partnerships • IT foundation • Cybersecurity • New data centre in Istanbul • Composable architecture 27 MEDITER RANEAN . 3328 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 flexibility of fleet deployment in route network as well as synergies in vessel investments • Profitable company with expected EBITDA of around EUR 97m in 2018 29 (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 30 Source: U.N. Ro-Ro Ownership of two key ports and access to five others Pendik Port (Turkey) Port of Trieste (Italy) West East Istanbul Istanbul Ambarlı Pendik Main industrial zones DFDS port Other ports 60% ownership of Samer Seaports Other ports in route network Ambarlı (Turkey) Toulon (France) Mersin (Turkey) Bari (Italy) Patras (Greece) Ambarli-Trieste Pendik-Toulon Mersin-Trieste Pendik-Bari Pendik-Patras Owned by AkçanSA Publicly owned port operated by Owned by Mersin Publicly owned port Publicly owned port CCIV International Ports Long-term exclusive contract 3rd party terminal with no DFDS has private exclusive lease until May 2026 3rd party terminal with no 3rd party terminal with no exclusive contract area for its entire operations exclusive contract exclusive contract 31 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 Owns Pendik and Trieste Port(1), operates in capacity of vessels Ports Ambarli, Toulon, Mersin and Bari • 5 routes between Turkey and France/Italy with Fleet age 11 years a fleet of 12 modern Ro-Ro vessels Market share 34% between Turkey and EU • U.N. Ro-Ro’s operation is based on an intermodal setup, combining land, sea and P&L (€m) 2014A 2015A 2016A 2017A railways for trucks Total Revenues 195,1 192,8 185,2 224,7 EBITDA 72,9 84,4 81,2 94,3 • The Company caters to the international Margin 37% 44% 44% 42% transport companies, importers and exporters EBIT 31,2 46,2 47,0 66,6 in Turkey Margin 16% 24% 25% 30% ▪ In 2013 the largest customer (EKOL Logistics) started own ro-ro Business is EUR denominated, minimising service and switched all its captive cargo to own ships exposure to the volatility in Turkish Lira ▪ Slight underperformance in 2016 due to two engine break-downs 32 (1) Owns company that has the concession agreement for Trieste port Source: U.N. Ro-Ro Corporate Presentation, Company data and press releases Mediterranean’s geographical reach Mediterranean’s Target and Secondary Markets Finland Norway Sweden Latvia Denmark Ireland U.K. Germany Netherlands Poland Belgium Luxembourg Czech Republic Slovakia France Austria Switzerland Slovenia Trieste (1) Portugal Ambarlı Toulon Italy Spain Bari Pendik (2) Turkey Greece Patras Mersin Target Market Secondary Market Port of Trieste Operated by U.N.