DFDS A/S
Q1 2007
Analyst meeting 23 May 2007 DFDS A/S
Contents
• Q1 Headlines
• Strategic Goals & Themes
• Industry Developments
• DFDS Seaways
• DFDS Tor Line
• Q1 Accounts
• Expectations 2007 DFDS A/S
Headlines Q1 2007
• Positive freight market supported by economic growth and structural factors
• Positive trend in no. of passengers
• DFDS Container Line on course
• Positive cash flow development in line with expectations
• Profit growth in line with expectations DFDS Q1 2007 Slide 4
Key Figures Q1 2007
DKK million Q1 2006 Q1 2007 % 2006
Revenue 1.591 1.880 18 7.524
DFDS Tor Line 1.287 1.551 21 5.710 DFDS Seaways 308 333 8 1.838
EBITDA 144 204 42 1.129
DFDS Tor Line 200 266 33 937 DFDS Seaways -47 -49 -4 241
Profit on disposals 18 -2 n.a. 33
Pre-tax profit -13 -13 0 402 DFDS A/S
Short Term Strategic Goals
• Develop and implement new management and control processes
• Launch specific projects to improve earnings level
• Consolidate capital structure
• Develop platform for future growth strategy
DFDS Q1 2007 Slide 6
4 Focus Areas in Go Forward Plan
Operational Win the Customer Work as a Team Fund the Future Excellence
1. Refine Customer and Market 1. Launch Project Clear Ship 1. Restructure Organization & 1. Redefine Finance function Approach Management
2. Initiate DFDS Tor Line 2. Implement profitability 2. Improve Pricing Strategic Projects 2. Integrate Corporate information systems and Sophistication Functions and Extract financial metrics Organizational Synergies 3. Develop tools/processes to 3. Define Strategic Direction implement Continuous 3. Manage Cash Improvement 3. Integrate Relevant Seaways and Tor Line processes
Grow business while Improve operational efficiency Increase productivity, Increase results and the improving margins and use Best Practice opportunities and excitement Return on Invested Capital (ROIC) DFDS Q1 2007 Slide 7
Going forward examples...
• Strategic direction is presently under review for presentation later this year
• Win the Customer: Development of integrated B2B customer & market approach initiated
• Operational Excellence: Project Clear Ship launched
• Work as a Team: Objective of organizational restructuring is to achieve more transparency and focus
• Fund the Future: More focus on management of cash generation from working capital flows
DFDS A/S
Upgrade of HR & Communications
• General upgrade of HR & Communications to support long term competitiveness and earnings level
• New heads of HR & Communication recruited
• Head of HR: Henrik Holck, 45 yrs
• Head of Communications, Gert Jakobsen 52 yrs
DFDS Q1 2007 Slide 9
Revenue - North European ro/ro-shipping EUR mill.
1.600
1.400
1.200
1.000
800
600
400
200
0
ICG
Birka
DFDS
Tallink
Eckerö
Finnlines
Color Line Color
Norfolkline
Stena LineStena POFerries
Viking Line Viking
SeaFrance Scandlines
Transfennica
Brittany Ferries Brittany Cobelfret Ferries Cobelfret
2002 2003 2004 2005 2006 DFDS Q1 2007 Slide 10
Recent Industry Developments
• ICG (Irish Continental Group) subject to offer by MBO, ongoing
• Bid for Birka by Eckerö, ongoing
• Grimaldi’s ownership share of Finnlines at 50.8%
• Sale of Scandlines still in the balance DFDS Q1 2007 Slide 11
DFDS Seaways
DFDS Q1 2007 Slide 12
Market development
• Overall travel market is still very competitive, but growing
• Some stabilization of price competition in air travel market
• Solid Danish market, competitive Norwegian market
• Good activity levels on markets in UK, Holland and Germany
• High activity level on overseas incoming market
• Robust spending level on nearly all markets
DFDS Q1 2007 Slide 13
Performance Q107 DFDS Seaways - Revenue per quarter
• Revenue up by 8% 700 600 • No. of passengers up by 6%, adjusted for 500 route changes increase was 5% 400 300
mill. DKK • Seafare compensation for bunker surcharge 200 100 achieved in Q1 0 Q1 Q2 Q3 Q4 • EBITDA on a level with last year, EBITA 2006 2007 reduced by higher capital costs DFDS Seaways - EBITDA per quarter
• Positive development on Oslo and 200 Amsterdam routes 150 100 • Passenger activity level on newly started 50
Bergen route somewhat below mill. DKK 0 expectations, freight in line with -50 expectations -100 Q1 Q2 Q3 Q4 • Tough weather conditions made 2006 2007 Bergen’s schedule irregular in Q1 DFDS Q1 2007 Slide 14
Project Clear Ship
• Establish platform for higher level of earnings
• Pricing strategy
• Procurement for onboard sales & technical consumption
• Manning optimization
• Port terminal agreements
DFDS Q1 2007 Slide 15
Tonnage optimization on North Sea
• Tonnage switch between Bergen & Amsterdam routes on May 29
• Optimize match between market demand & tonnage configuration: – more Commodore cabins on BN – larger conference QUEEN OF SCANDINAVIA facilities on BN – more freight capacity on AN – sister ship effect on AN
• Routes optimized before high season DFDS Q1 2007 Slide 16
DFDS Tor Line
DFDS Q1 2007 Slide 17
Market development
• Positive overall sea freight market
• Market growth supported by economic growth and structural factors
• Slight decrease in growth level compared to last year, slowdown in some regions
• Still higher growth levels in Baltic area than North Sea area
• Higher growth from UK alleviates imbalances somewhat
• Price trend is firm with rising tendency DFDS Q1 2007 Slide 18
Performance Q1
DFDS Tor Line - Revenue per quarter • Revenue up by 21% 1.800 1.500 • Approx. 60% of rise due to 1.200 acquisition of DFDS Container Line 900 in Q406 mill. DKK 600 300 0 • Rest of rise attributable to higher Q1 Q2 Q3 Q4 activity level in route network 2006 2007
• No. of transported lanemetres up by DFDS Tor Line - EBITDA per quarter 8% compared to last year 300
250
• EBITDA rose by 33% to DKK 266 200
mio., EBITA up by 22% 150
mill. DKK 100
• Positive volume & price trends on 50 most routes 0 Q1 Q2 Q3 Q4 • Contribution from DFDS Container 2006 2007 Line in line with expectations DFDS Q1 2007 Slide 19
More capacity in ro-ro network
• Capacity doubled on HansaBridge by addition of another ro-pax ship to the service at the beginning of May
• Newer chartered ro-ro ship entered into service on AngloBridge South - Gothenburg-Tilbury - has improved service quality
andet volvo foto findes DFDS Q1 2007 Slide 20
Industrial Logistics growing
• Volvo Logistics agreement extended to 2009
• New contracts with Nordisk Byggdistribusjon, Lumipaper & Honda
• Volumes from Industrial Logistics growing in most market areas
• Further development planned of Customer & Market Approach, an integral part of DFDS Tor Line’s Shipping Logistics
DFDS Q1 2007 Slide 21
Container network strengthened
• Integration of DFDS Container Line into present network and organization proceeding as planned
• Remaining 49% of Transport Partners Intermodal Ltd acquired in January 2007
• DFDS’ Irish organization now comprises 50 employees in four offices
DFDS A/S
Accounts Q1 2007 DFDS Q1 2007 Slide 23
P/L-account
DKK mill. Q1 2006 Q1 2007 Change, % In % of revenue
Revenue 1.591 1.880 18,1 n.a. n.a. Ship operating costs 886 1.061 19,9 55,7 56,5 Charter costs 142 149 4,9 8,9 7,9 Staff costs 322 366 13,5 20,3 19,5 Other costs 97 100 2,8 6,1 5,3 Operating profit before depreciations (EBITDA) 144 204 41,3 9,1 10,9 Profit/loss on sale of ships, buildings & terminals 18 -2 -109,5 1,1 -0,1 Depreciations 127 156 22,8 8,0 8,3 Operating profit (EBITA) 35 46 n.a. 2,2 2,5 Profit share, associated companies 0 -1 n.a. 0,0 -0,1 Value adjustment goodwill/badwill 0 0 n.a. 0,0 0,0 Financial items, net 48 58 21,0 3,0 3,1 Pre-tax profit -13 -13 n.a. -0,8 -0,7 Tax 5 5 -5,6 0,3 0,3 Profit for the period -18 -18 n.a. -1,1 -1,0 DFDS Q1 2007 Slide 24
B/S & Cash Flow
DKK mill. Q1 2006 Q1 2007 Change, % In % of total assets
Intangible assets 290 489 68,6 3,3 5,0 Tangible assets 7.089 7.658 8,0 80,2 77,7 Other non-current assets 144 120 -16,4 1,6 1,2 Current assets 1.318 1.583 20,1 14,9 16,1 Total assets 8.842 9.851 11,4 100,0 100,0
Equity 2.954 3.285 11,2 33,4 33,3 Non-current liabilities 4.200 4.622 10,0 47,5 46,9 Current liabilities 1.688 1.944 15,2 19,1 19,7 Total liabilities 8.842 9.851 11,4 100,0 100,0
Cash flow from operations after tax 195 229 17,3 n.a. n.a. Cash from investments -474 -101 -78,6 n.a. n.a. Free cash flow from operations -279 128 n.a. n.a. n.a. DFDS Q1 2007 Slide 25
Bunker price development
400
350
300
HSFO 380
USD per ton per USD 250
200
150
jul-06
jan-06 jun-06 okt-06 jan-07
feb-06 apr-06 maj-06 feb-07 apr-07 maj-07
mar-06 aug-06 sep-06 nov-06 dec-06 mar-07 DFDS Q1 2007 Slide 26
Invested capital – turnover rate
9.000
8.000 1,0
7.000 0,8 6.000
5.000 0,6
4.000 Times DKK mill. DKK 0,4 3.000
2.000 0,2 1.000
0 0,0 Q1 2005 Q1 2006 Q1 2007
Revenue Average invested capital Turnover rate invested capital, times, p.a. DFDS Q1 2007 Slide 27
Accounting changes
• Reclassification of calculated interest on defined benefit obligations (pensions) and expected return on defined benefit plan assets
• Reclassified from staff costs to financial expenses
• In line with IFRS
• Comparison figures for 2006 have been restated DFDS A/S
Expectations 2007 DFDS Q1 2007 Slide 29
Expectations 2007
• Total revenue growth of 8-10%
• Investments of approximately DKK 150 million
• DFDS Tor Line: adjusted EBITA to rise by 5-7%
• DFDS Seaways: adjusted EBITA to rise by approx. 30%
• DFDS Group pre-tax profit for 2007 expected to rise to approx. DKK 425 million
DFDS A/S
Q1Thank 2007 you for your attention!
Thank you for your attention!