Capacity agreement with UK’s Department for Transport
(DfT)
In October, DFDS entered into an agreement with the UK’s
DfT to ensure ferry freight capacity for vital goods such as
medicine and food after the Brexit transition period ends
on 31 December 2020. The agreement runs for six months
starting 1 January 2021. The agreement comprises the
Dieppe-Newhaven and Rotterdam-Felixstowe routes.
Major events after Q4
New direct ferry route between Ireland and France/
Continental Europe
To facilitate trade between Ireland and continental
Europe, a new freight ferry route was opened on 2 January
2021 between Rosslare in Ireland and Dunkirk in Northern
France. The route bypasses the UK to offer trucks and
drivers direct and paperless transport between EU
countries. The route is expected to reach revenues above
DKK 300m in 2022. The route is jointly owned by DFDS
and Irish interests.
DFDS creates leading provider of cold chain logistics
On 26 January 2021, DFDS entered into an agreement to
acquire 100% of HSF Logistics Group. The company is one
of Europe’s leading cold chain logistics providers to meat
producers and other food producers that operates
temperature-controlled supply chains.
The Group operates four brands with HSF Logistics a
leading brand in the Netherlands, Germany and the UK.
N&K Spedition and Skive Køletransport are leading brands
in Denmark and Scandinavia, together constituting around
half of the revenue of the Group. Eurofresh is a brand
focused on the German market.
DFDS has agreed to acquire the HSF Logistics Group for a
debt-free price of DKK 2.2bn (EUR 296m). The HSF
Logistics Group has revenue of DKK 2.8bn and an EBITDA
of DKK 320m (before adjusting for IFRS 16). The company
has 1,800 employees and operates around 700 trucks and
1,700 reefer trailers, including both owned and leased
units.
The acquisition of HSF Logistics Group is aligned with
DFDS’ Win23 strategy of growing solutions to selected
industries, including cold chain logistics customers.
Closing of the transaction is expected to take place in
around three months subject to regulatory approval and
completion of required employee consultation processes.
More information on the transaction is available from this
link.
Oslo-Frederikshavn-Copenhagen route suspended
In November 2020, one of the two ferries deployed on
Oslo-Frederikshavn-Copenhagen was laid up and in
January 2021 the second ferry was laid up due to the
continued tight travel restrictions. The route will be
reopened once passengers are allowed to travel again.
Sixth and final mega freight ferry delivered
The sixth and final freight ferry newbuilding in a series
arrived early February in Europe from China. The freight
ferry will be deployed between Sweden and Belgium.
Win23: Strategic and financial
ambitions set for 2023
DFDS’ ambition to continue growing revenue and earnings
considerably over the next three years builds on the
Win23 strategy that has four pillars:
A. Grow solutions to select industries
B. Digitise services to accelerate growth
C. Develop and expand the ferry and logistics networks
D. Create more value for passengers.
ROIC before special items was 4% in 2020 while DFDS’
minimum return target is 8%. The financial ambition of
Win23 is to reach a return on invested capital (ROIC) of
10% in 2023.
All four pillars include initiatives that will contribute to
raising ROIC. Of particular importance is Pillar C’s
fulfillment of the business plan for the Mediterranean
business unit that reported a ROIC of 2.4% in 2020 based
on invested capital of DKK 9.5bn at year-end. The latter
equals 43% of the Group’s total invested capital.
Pillar D covers passenger services. The potential to raise
ROIC linked to passenger services is considerable as this
pillar is focused on regaining the drop in EBITDA of