Annual Report
2020
Photo: In 2020, DFDS moved extraordinary freight volumes as Brexit and Covid-19 congested ports
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Our freight
offering
We keep Europe moving
through a wide range of
freight services from
ferry transport to complex
logistics solutions
DFDS’ key freight
market offerings
Door-door forwarding,
full & part loads
and containers
Industry solutions,
asset-backed and 4PL
Contract logistics
solutions
Ferry transport of freight
units, accompanied and
unaccompanied
Port terminal services
Select industry solutions:
Automotive, Forest & Metal,
Cold Chain and others
Port rail services
70
ferries and other
vessels
27
routes
8
port
terminals
50
logistics
locations
2 Our freight offering
DFDS Annual Report 2020
Our passenger
offering
23,000
sailings
We move people and
their cars on ferry routes
to enjoy a maritime
experience and connect
with others
9
ferry routes
17
ferries
Our passenger
offering
Short sea ferry
Mini cruise
Packaged
breaks
Overnight ferry
Groups & events
Conferences
at sea
DFDS’ key passenger
offerings
3 Our passenger offering
DFDS Annual Report 2020
Our Win23 strategy
Grow solutions
to select
industries
Digitise services
to accelerate
growth
Develop and
expand the ferry
and logistics
networks
Create more
value for
passengers
A B C D
4 Our Win23 strategy
DFDS Annual Report 2020
By moving freight and passengers reliably
and efficiently, we provide vital services for
trade and travel in and around Europe.
We care – about the safety of our
passengers and employees and about our
environmental footprint.
We seek to partner and innovate
with customers to grow their business
and the economy.
Our purpose
5 Our purpose
DFDS Annual Report 2020
Short-term plan
Reduce CO
²
emissions from
existing fleet responsible for
+90% of our total emissions
2030 target
Reduction of relative CO
²
emis-
sions from fleet by 45% from
2008 baseline
Long-term plan
Planning of zero emission
newbuilds to start in 2025
Ensure green fuel availability
through partnerships
2050 target
Climate neutral
Getting our house in order
R
eduction of the 10% of emissions that are non-fleet: trucks, travel,
company cars, buildings, and more
Our climate action plan
6 Our climate action plan
DFDS Annual Report 2020
Management review
8 Key results
9 Letter from the Chair
10 CEO looks ahead
11 Key figures
12 Management review
27 Ferry Division
33 Logistics Division
38 Sustainability summary
44 Risk factors
48 The DFDS share and shareholders
51 Financial review
55 Corporate governance summary
58 Board of Directors and Executive Board
59 Executive Management Team
Consolidated financials
61 Income statement
62 Statement of comprehensive income
63 Balance sheet
64 Statement of changes in equity
65 Statement of cash flows
67 Notes
Reports
114 Management statement
115 Independent Auditors report
Parent company financials
118 Income statement
119 Statement of comprehensive income
120 Balance sheet
121 Statement of changes in equity
123
Statement of cash flows
124
Notes
Other information
141 Fleet list
143 Glossary
144 Definitions
145 DFDS’ history
7 Content
DFDS Annual Report 2020
Key results 2020
Revenue down 16% to
DKK 14bn
Revenue per division
DKK bn
EBITDA per division
¹
DKK bn
Return on invested capital (ROIC)
¹
%
1
Before special items
2
2018 restated to IFRS 16 on
a proforma and unaudited basis
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
16
14
12
10
8
6
4
2
0
16
14
12
10
8
6
4
2
0
EBITDA¹ down 25% to
DKK 2.7bn
Return on invested capital¹
after tax of 4%
Logistics Division
Ferry Division
Non-allocated items
DFDS Group
2018 2019 2020 2018² 2019 20202018² 2019 2020
The results for 2020 include
a significant negative
impact from the Covid-19
pandemic on the Group’s
passenger activities that
generated 16% of revenue
in 2019. Due to the imposed
travel restrictions, the
EBITDA from passenger
activities was reduced by
DKK 1bn compared to 2019.
Management review
DFDS Annual Report 2020
8
Rough seas in 2020
– may 2021 bring calmer waters
and new opportunities
I look back on 2020 with mixed emotions. On the one
hand, Covid-19 severely disrupted our lives and parts of
our business. On the other hand, our ability to adapt to the
changed circumstances proved the strength of the DFDS
organisation and the resilience of our business model.
Adapting to such a severe event as Covid-19 did, however,
entail significant actions and costs, not least for the people
we had to let go due to the sudden drop in demand across
markets, especially in the passenger segment.
Management’s resolute adaptation of activities
mitigated the impact on EBITDA, however, still with
a 25% decrease to DKK 2.7bn. As the year evolved,
freight demand rose to levels above 2019 helped by
stock building in the UK ahead of Brexit while passenger
volumes remained almost at a standstill. The decrease
in earnings was in the end caused by the drop in
passenger volumes.
At the start of 2020, five of six members of the Execu-
tive Management Team were new in their roles or had just
joined. It was thus a new and untried team that faced the
Covid-19 crisis. I am impressed with their ability to quickly
rise to the challenge, how fast they got together and the
way they managed DFDS skilfully through a difficult period.
Claus V. Hemmingsen
Chair of DFDS’
Board of Directors
Financial position and dividend
In last year’s annual report, it was announced that dividend
payments would resume. Following the outbreak of Covid-19,
the proposed dividend was cancelled to safeguard our finan
-
cial position. We consolidated our financial position post the
outbreak and today our position is solid. Leverage remains,
however, well above our targeted range and the Board there
-
fore proposes not to pay a dividend in 2021.
Breakthrough year for climate
2020 was a breakthrough year for the climate agenda in
the world of business. It’s now all about how and when we
become climate-neutral, not if. We launched our own climate
action plan that includes numerous projects to reduce our
footprint over the next ten years as well as an ambition to
replace fossil fuel with sustainable fuels to achieve climate
neutrality by 2050. For several years, a lot of effort has
gone into developing our approach to sustainability and the
climate action plan is the preliminary culmination of this
work. I am optimistic and encouraged by our green agenda.
Strategic roadmap in place
Going into 2021, we face an elevated level of uncer-
tainty, particularly about the effects of Brexit on UK trade
volumes as well as when and to what extent passengers
will return in larger numbers to our ferry routes.
In the meantime, I am confident and have faith in DFDS’
ability to adapt to market changes as well as a firm belief
in our Win23 strategic roadmap and ambitions. The acqui-
sition of HSF Logistics Group is a testament to this belief
and management’s commitment to deliver on the strategy.
In addition, the efficiency and improvement measures
carried out in 2020 has positioned us well to both manage
challenges and pursue opportunities in 2021.
Finally, thank you!
DFDS has emerged in good shape from 2020 due to
an extraordinary and impressive effort from the entire
organisation. The cost has regrettably been significant
in both human and financial terms. I am grateful for the
great cooperation with our stakeholders, not least our
customers as well as our business and financial partners.
I extend my deepfelt gratitude to management and
staff for your support and efforts in overcoming the many
challenges of 2020. Hopefully 2021 will bring calmer
waters and new opportunities to all.
9 Letter from the Chair
DFDS Annual Report 2020
Managing through
challenges and opportunities
Our focus in 2020 was to serve our stakeholders as well
as possible through a period of great uncertainty. To keep
our colleagues safe. To maintain service and reliability to
customers. To collaborate with partners. To maintain a
strong financial position that keeps DFDS safe.
Looking back on 2020, Covid-19’s disruption of our
passenger services stands out. A sad consequence of the
pandemic was laying off around 700 competent and loyal
employees as we adapted to the new market conditions.
Disruptions nevertheless also bring opportunities. We
forged a commercially stronger and more focused freight
sales organisation in the adaptation process, and have
already achieved important customer wins. We opened
new routes between Norway and Jutland in Denmark and
between Ireland and France, with the latter starting on 2
January 2021. We built a new organisation from scratch to
provide customs clearance and related services.
Strategic roadmap in place
When the pandemic broke out, we reviewed our Win23
strategy and I am happy to report that it remains a
relevant and ambitious roadmap. Our commitment
to deliver on the Win23 growth ambitions was
underlined by the recent agreement to acquire HSF
Logistics Group.
Our financial ambitions are refocused on ROIC as
the pandemic and other events have lowered the return
to a level that is not satisfactory. Our ROIC minimum
target is 8% while the ambition of Win23 is to reach a
ROIC of 10% in 2023 compared to 4% in 2020.
Climate action plan launched
A highlight of 2020 was the launch of our ambition
to become climate neutral by 2050. This includes
a pioneering project that will enable us to build
a hydrogen ferry, hopefully already by 2027. To
achieve the 2050-ambition we are engaging in open
innovation partnerships to develop commercially
viable technologies that will make it possible to use
sustainable fuels, such as hydrogen and ammonia,
on our ferries. This is the start of an exciting,
transformative journey.
Looking ahead and thank you!
Our freight business proved to be strong and resilient
during 2020. In addition, Brexit is now behind us and
we can focus on our long term growth opportunities
in the UK. Uncertainty remains, however, elevated
going into 2021. How quickly will trade normalise
between the EU and the UK? When and to what extent
will passengers return to our ferry routes? We cannot
predict the outcomes of these key questions but
we are prepared to respond to any challenges and
opportunities that will arise during the year.
I would like to send a warm, huge thank you to
my colleagues throughout DFDS for their exceptional
contribution and ability to come up with solutions to
the many challenges we faced in 2020.
I am also very grateful to our customers, partners
and shareholders for your collaboration and support
in a difficult year.
Torben Carlsen
President & CEO
More information on
our approach to
sustainability
is available
in our CSR Report:
link
10 CEO letter
DFDS Annual Report 2020
DKK m
2020
1
EUR m 2020 2019 2018
2
2017
2
2016
2
Income statement
Revenue 1,874 13,971 16,592 15,717 14,328 13,790
Ferry Division
3
1,298 9,678 12,197 11,117 9,892 9,468
Logistics Division
3
680 5,069 5,116 5,324 5,160 4,930
Non-allocated items and eliminations
3
-104 -776 -722 -724 -724 -608
Operating profit before depreciations (EBITDA) and
special items
4
366 2,732 3,633 2,988 2,702 2,588
Ferry Division
3
313 2,332 3,254 2,713 2,513 2,439
Logistics Division
3
60 445 421 330 263 252
Non-allocated items -7 -45 -42 -55 -74 -103
Profit on disposal of non-current assets, net 1 5 6 7 7 8
Operating profit (EBIT) before special items
4
115 858 1,751 1,909 1,782 1,644
Special items, net -16 -117 -101 -49 -41 -13
Operating profit (EBIT)
4
99 741 1,650 1,859 1,741 1,631
Financial items, net -37 -275 -278 -165 -55 -43
Profit before tax 63 466 1,371 1,694 1,686 1,588
Profit for the year 59 442 1,313 1,637 1,618 1,548
Profit for the year excluding
non-controling interest 58 433 1,309 1,630 1,617 1,548
Capital
Total assets 3,630 27,006 26,863 22,132 13,308 13,004
DFDS A/S’ share of equity 1,413 10,511 10,276 9,175 6,565 6,636
Equity 1,425 10,600 10,356 9,255 6,614 6,685
Net-interest-bearing debt 1,527 11,361 11,954 8,513 2,352 2,424
Invested capital, end of period 2,974 22,121 22,476 17,908 9,099 9,205
Invested capital, average 3,025 22,500 20,927 13,778 9,178 9,037
DKK m
2020
1
EUR m 2020 2019 2018
2
2017
2
2016
2
Cash flows
Cash flows from operating activities, before
financial items and after tax 373 2,772 3,258 2,516 2,666 2,662
Cash flows from investing activities -217 -1,618 -2,651 -4,802 -1,564 -1,207
Acquistion of enterprises and activities -2 -14 -131 -3,635 0 -51
Other investments, net -216 -1,603 -2,519 -1,167 -1,564 -1,156
Free cash flow (FCFF) 155 1,155 607 -2,286 1,102 1,455
Repayment of lease liabilities and lease interest -91 -679 -785 - - -
Adjusted free cash flow 64 475 -178 -2,286 1,102 1,455
Key operating and return ratios
Average number of employees 8,213 8,367 7,791 7,235 7,065
Number of ships 70 70 70 64 63
Fuel consumption per nautical mile (g/GT/Nm) 4.25 4.78 4.93 5.22 5.20
Revenue growth, % -15.8 5.6 9.7 3.9 2.4
EBITDA margin, % 19.6 21.9 19.0 18.9 18.8
Operating margin, % 6.1 10.6 12.1 12.4 11.9
Revenue/invested capital average, (times) 0.6 0.8 1.1 1.6 1.5
Return on invested capital (ROIC), % 3.0 7.6 13.1 18.6 17.7
ROIC before special items, % 3.5 8.1 13.5 19.0 17.8
Return on equity, % 4.2 13.5 20.7 24.5 23.4
Key capital and per share ratios
Equity ratio, % 39.3 38.6 41.8 49.7 51.4
Net-interest-bearing debt/EBITDA, times 4.2 3.3 2.8 0.9 0.9
Earnings per share (EPS), DKK 7.6 22.9 29.0 29.1 26.6
Dividend paid per share, DKK 0.0 4.0 4.0 10.0 6.0
Number of shares, end of period , ’000 58,632 58,632 58,632 57,000 60,000
Weighted average number of circulating shares,
’
000
57,310 57,196 56,204 55,594 58,141
Share price, DKK 275.2 325.0 262.2 331.3 322.6
Market value, DKK m 15,790 18,593 14,990 18,106 18,405
1
Applied exchange rate for Euro
as of 31 December 2020: 7.4544
(Average) and 7.4393 (End)
2
2016-18 comparative numbers
are not restated to IFRS 16
3
The Norwegian sideport shipping
activities have been transferred
from the Logistics Division to
the Ferry Division per 1 January
2020. 2019 comparative
numbers have been restated
accordingly whereas 2016-2018
comparative numbers are not
restated
4
Reference is made to “Definitions”
on page 144
Key figures
Management review
DFDS Annual Report 2020
11
Management
review
A challenging year
2020 was dominated by two events: The outbreak
of Covid-19 across Europe and an extensive round of
stockbuilding in the UK ahead of Brexit. There were distinct
phases through the year with negative and positive
impacts from these events on operations and results:
•
Q1:
Start of year in line with expectations. Outbreak
of Covid-19 impacts DFDS’ markets from March. Initial
adaptation launched
•
Q2:
Travel restrictions entail severe drop in demand
for passenger services. Freight demand also declines
considerably. Continued adaptation of operations and
business structure
•
Q3:
Freight demand returns to levels comparable to
2019. Travel restrictions eased in first half of quarter
and thereafter tightened again
•
Q4:
Freight demand boosted by UK stockbuilding.
Tight travel restrictions continue to limit demand for
passenger services.
Revenue down 16%
to DKK 14.0bn
EBITDA before special
items down 25%
to DKK 2.7bn
ROIC before special items
of 4%
Equity ratio of 39%
Operations and business
structure adapted to
drop in demand caused
by Covid-19
2020 freight earnings
ended above 2019
Passenger earnings
reduced by DKK 1bn
Climate action plan
launched
The outbreak of Covid-19 generated an exceptionally high
level of uncertainty, especially in Q2. As Q3 progressed it
became increasingly clear that freight markets would pick
up and recover to activity levels similar to 2019. In the end,
total freight earnings in 2020 were higher than in 2019
helped by the extensive stockbuilding in the UK ahead of
Brexit in Q4.
For DFDS’ passenger services, the consequences of
Covid-19 were far more severe and the uncertainty persists.
Travel restrictions were introduced already in March 2020
and this immediately led to a significant decrease in demand
and hence passenger revenues. Apart from a brief period
in the first half of Q3, passenger volumes were reduced to
mainly essential travel since the outbreak in March. At the
end of 2020, the EBITDA of passenger services was reduced
by around DKK 1bn compared to 2019. Passengers are carried
in the Passenger, Channel, and Baltic Sea business units.
An initial adaptation of operations to the sudden changes
in market demand was launched at the end of April 2020, and
a number of longer term adaptations to operations and the
business structure were implemented at the end of June 2020.
Management review
DFDS Annual Report 2020
12
Another severe and regrettable consequence of Covid-19
was that around 700 employees were made redundant in
2020 as part of the adaptations. Around 70% of the laid
off employees were employed in passenger services. The
adaptations are described in more detail on page 15-16.
On this background, DFDS’ operating profit (EBITDA)
before special items decreased 25% to DKK 2,732m in
2020 compared to 2019. Overall, the decrease was due to
the drop in passenger earnings.
The visibility of financial performance in 2020 was
disrupted by the outbreak of Covid-19. This led to the
following development in the outlook for EBITDA before
special items during 2020:
• 6 February: Outlook range of DKK 3.5-3.9bn announced
• 18 March: Outlook suspended due to significant uncer
-
tainty created by introduction of travel restrictions and
general lockdowns across Europe
• 7 May: Outlook updated to an EBITDA likely to be
reduced towards DKK 2bn
• 12 August: Outlook changed to a range of
• DKK 2.2-2.5bn
• 23 October: Outlook raised to DKK 2.5-2.7bn as freight
volumes continued to develop more positively than
expected.
The outlook announced on 6 February 2020 also included
an outlook for revenue growth of 4% compared to 2019. In
August, this was restated as minus 15-18% and changed
to minus 16-18% in October. Revenue for 2020 was DKK
14.0bn, a decrease of 16%.
On a divisional level, Ferry Division’s EBITDA before
special items decreased 28% to DKK 2,332m due to the drop
in passenger earnings. Logistics Division’s EBITDA before
special items increased 5% to DKK 445m mostly driven by
the addition of two companies acquired in December 2019.
The Group’s free cash flow was positive by DKK 1.2bn
and adjusted for lease payments, the free cash flow was
positive by DKK 0.5bn. The free cash flow included net
investments of DKK 1.6bn which was 30% lower than the
initial expectation for 2020 of DKK 2.3bn. Investments were
reduced as part of a process to secure the financial position
following the uncertainty due to the outbreak of Covid-19.
Financial leverage, measured by the ratio of net
interest-bearing debt (NIBD) to operating profit (EBITDA)
before special items, was 4.2 at year-end compared to 3.3
at year-end 2019. The increase in leverage was due to the
decrease in EBITDA as NIBD was lowered 5% compared to
year-end 2019. The equity ratio was 39% at year-end 2020
which was on level with 2019.
The average number of employees decreased 2% to
8,213 in 2020 on account of the adaptation of the organi
-
sation to the drop in revenue caused by Covid-19.
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.
DFDS Group, key figures
DKK m 2020 2019 2018**
Revenue 13,971 16,592 15,717
EBITDA
* 2,732 3,633 3,589
EBIT
* 858 1,751 1,965
Profit before tax
* 583 1,472 1,743
Profit for the period 442 1,313 1,638
Free cash flow, FCFF 1,155 607 -1,685
Adjusted free cash flow, FCFF 475 -151 -2,286
Invested capital, end of year 22,121 22,476 20,460
Net interest-bearing debt/EBITDA
*, times 4.2 3.3 3.1
Return on invested capital
*, % 3.5 8.1 11.8
Number of employees, average 8,213 8,367 7,791
* Before special items
** 2018 restated to IFRS 16 on a proforma and unaudited basis
Management review
DFDS Annual Report 2020
13
Win23 strategy pillars
Grow solutions
to select
industries
• Automotive
• Forest & Metal
• Cold Chain
Digitise services
to accelerate
growth
• Easy access for customers
• Value-adding services
• Operational efficiency
• Digitise core systems
Create more
value for
passengers
• Develop on board
customer experience
• Business development
initiatives
• Fleet development
Develop and
expand the ferry and
logistics networks
• Mediterranean business
plan fulfillment
• Ferry new building benefits
• Continuous improvement
projects
• Acquisitions
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 increase 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 increase
ROIC linked to passenger services is considerable as this pillar
is focused on regaining the drop in EBITDA of DKK 1bn caused
by Covid-19 in 2020 compared to 2019. A prerequisite for this
to happen is the return of passengers in large numbers to the
routes on the English Channel, between Norway and Denmark,
and between the Netherlands and the UK.
Major events in 2020
An overview of major events of the year is provided on
page 20, divided into three sections: business development
and competition; operations and digital; and people, envi
-
ronment and finance. The most important of these events
are reviewed in this section.
Business development and competition
Completion of fleet renewal program expected early 2022
A fleet renewal program was launched in 2016 comprising:
• Six freight ferry (ro-ro) newbuildings. 6,700 lane metres of
freight capacity per ferry equivalent to around 450 trailers
• Two combined freight and passenger (ro-pax) newbuildings.
4,500 lane metres of freight and passenger vehicles
capacity per ferry as well as on board facilities for 600
passengers
• A 10-year bareboat charter agreement for a combined
freight and passenger (ro-pax) newbuilding. 3,100 lane
meters of freight capacity and on board facilities for
1,000 passengers.
The new freight ferries have in line with expectations added
efficiency and lowered emissions per transported lane metre.
The first two freight newbuildings were deployed in 2019
between Istanbul and Trieste. The third newbuilding was
deployed in April 2020 on the Gothenburg-Zeebrugge route
that previously deployed three smaller freight ferries. On
the Rotterdam-Immingham route two newbuildings were
deployed in Q2 2020 and at the start of Q4 2020, respec
-
tively. The route’s freight capacity has increased even though
it now deploys two freight ferries compared to previously
three. The sixth and final ferry was delivered in January 2021
and deployed between Sweden and Belgium in February 2021.
The first of the two combined freight and passenger
newbuildings (ro-pax) is expected to be deployed later in
the year in the Baltic route network. The second is expected
to be deployed in 2022.
The chartered newbuilding is expected to be delivered in
time for deployment on the Channel in July 2021.
A B DC
Management review
DFDS Annual Report 2020
14
New route Oslo-Frederikshavn
On 25 June 2020, a new ferry route between Oslo
and Frederikshavn was opened in connection with the
reopening of the route between Oslo and Copenhagen.
The latter was temporarily closed since mid-March due
to lockdowns and travel restrictions related to Covid-19.
Customers targeted for the new route are mainly passen
-
gers travelling in their own car for transport purposes. The
new route is operated by the same two passenger ferries
that are deployed between Oslo and Copenhagen.
Sale of ferry completed
In September 2019 an agreement was made to sell a
combined freight and passenger ferry (ro-pax) – Liverpool
Seaways, built 1997 – to La Meridionale. The ferry was
delivered to the new owner in May 2020. The sales price
was DKK 225m and an accounting gain of DKK 110m from
the sale was recorded in Q2 2020 under Special items.
Capacity agreement with UK’s Department
for Transport (DfT)
In October 2020, 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 end of the Brexit tran
-
sition period on 31 December 2020. The agreement runs
for six months starting 1 January 2021. The agreement
comprises the Dieppe-Newhaven and Rotterdam-Felix
-
stowe routes.
New agreement with Danish Defence
DFDS and the Danish Defence have a longstanding coop
-
eration and in November 2020 a new six-year agreement
was entered into with the Joint Movement and Transport
Organisation (JMTO) that provides strategic transport for
Danish military missions. A total of seven freight ferries
(ro-ro) will be made available for maritime transport of
military materiel and equipment in connection with NATO
preparedness, military exercises and operations, and
humanitarian crises.
On a day-to-day basis, the ferries remain deployed in
DFDS’ route network but will be made available when and to
the extent requested by the Danish Defence. The agreement
is also linked to the ARK project, a cooperation between
Denmark and Germany, which ensures access to and
availability of maritime transport capacity for Danish and
German defences in accordance with obligations to NATO.
Operations and digital
Initial adaptation of operations to Covid-19 impact
During March 2020, Covid-19 broke out in DFDS’ market
areas and lockdowns and travel restrictions were imposed
to contain the outbreak. This led to rapid changes in
customer demand in both freight and passenger markets.
The initial response implemented from mid-March included
the following key actions:
• Operational sites and offices kept safe, including freight
ferry routes, port terminals, and logistics solutions such
as forwarding and warehousing operations
• Suspension mid-March of two passenger routes, Oslo-Co
-
penhagen and Amsterdam-Newcastle
• Channel and Baltic Sea passenger services reduced to
only essential travel
• Freight capacity reduced by lay-up of freight ferries and
reduced sailings
• Reduction of logistics capacity for certain sectors,
particularly automotive and cold chain
• Around 2,800 employees in Q2 sent on paid leave
through government compensation programs
• Immediate cost saving and postponement initiatives.
Longer term adaptation to Covid-19 impact
On 29 June 2020, a number of longer term adaptations of
the business structure to Covid-19 impacts was launched,
including:
• Merger of industry sales of large freight customer
solutions, involving both ferry and logistics operations,
into one unit to drive industry sales across the DFDS
organisation. Commercial focus strengthened and
overlapping functions consolidated
• Ferry Division to focus commercially on delivering
reliable and cost-efficient services to freight forwarders
and hauliers
• Other freight and logistics operations adapted to new
market conditions, including optimisation of port
terminal and haulage operations
1
CSAT asks customers
“How would you rate the
overall performance, products
and services of DFDS?” and is
measured on a 5-point scale
(1-Not satisfied at all;
5-Fully satisfied)
2
NPS asks customers
“How likely would you be to
recommend the products/
services of DFDS?” on a
10-point scale (1-Not at all
likely; 10-Extremely likely).
The NPS is an aggregate
score created by subtracting
the percentage of detractors
(those who gave scores from
1 to 6) from the percentage
of promoters (those who gave
scores of 9 and 10)
3
2019 not reported due to
change in CSAT scale in 2020
from 10-point to 5-point scale
to align with industry standards
4
Passenger scores not reported
in 2020 due to extraordinary
circumstances caused by
Covid-19
Customer satisfaction scores
CSAT
1
NPS
2
2020 2019
3
SCALE 2020 2019 SCALE
Freight ferry services 4.1 n.a. Satisfied 52 33 Good
Transport and logistics solutions 3.8 n.a. Neutral 37 27 Good
Passenger ferry services
4
n.a. n.a. n.a. n.a. 36 n.a.
Management review
DFDS Annual Report 2020
15
• Passenger concepts aligned to changes in travel market
dynamics with a higher share of passengers that
primarily travel for transport purposes, including holiday
travel. Onboard concepts and offerings simplified
• Improvement and efficiency projects that simplified
and focused business support functions. This included
a reshaped and integrated IT and digital organisation as
well as a downsizing of various functions.
The adaptations regretfully led to around 700 employees
leaving DFDS. Before the layoffs, DFDS employed around
8,600 people. The total run-rate of annual cost savings
is estimated at around DKK 250m of which around
DKK 100m impacted 2020 positively. One-off redundancy
costs in 2020 amounted to DKK 102m recorded under
Special items.
Covid-19 government aid schemes
The Group is included in various Covid-19 government aid
schemes primarily in Denmark, UK, Sweden and France.
Various wage compensation programs amounted to DKK
124m and related payroll reductions of DKK 9m were
realised equal to a total reduction of DKK 133m in 2020.
Fixed cost compensation programs amounted to DKK 1m
as this was reduced significantly by withdrawal of a fixed
cost application of DKK 52m in Denmark. The decision to
abstain from benefitting from the fixed cost compensation
program was made late 2020 in view of the Group’s strong
earnings achieved in 2020 compared to expectations
during first wave of Covid-19. DFDS also benefitted from
various liquidity improvement programs that deferred
VAT and tax payments, primarily in Denmark, the UK, the
Netherlands and France.
New limits on sulphur emissions in Mediterranean
On 1 January 2020, IMO (International Maritime Organisa
-
tion) introduced a global limit of 0.5% on sulphur in fuel oil
down from previously 3.5%. In 2015, a limit of 0.1% was
introduced in northern Europe. DFDS has in northern Europe
complied with the limit set in 2015 by a mix of scrubber
installations and consumption of low sulphur fuel oil.
To comply with the new rules scrubbers were installed
on all deployed freight ferries in the Mediterranean route
network. Installations started in 2019 and were completed
by mid-2020. The total investment in scrubbers was
DKK 328m, of which DKK 153m was invested in 2020. In
the installation period replacement freight ferries were
deployed which added operational cost.
Customer Focus
In 2020, a new structure and format for measuring customer
satisfaction and loyalty was implemented to increase the
frequency and relevance of the customer feedback. The aim
is to respond more rapidly to customer needs.
Customer service and feedback was impacted by the
Covid-19 pandemic. The loyalty of freight customers
increased due to, among other things, the reliability and
flexibility of operations. On the other hand, there were also
customers that experienced a lack of capacity in periods
and changes in schedules caused by the pandemic. There
was some shift in customer focus during the pandemic
away from price towards reliability and customer service.
In the table on the previous page the results of the
annual customer focus survey are reported. The overall
customer satisfaction is measured by CSAT and NPS scores
as defined in the table. The CSAT scale was revised in
2020 from 10-point to 5-point scale to align with industry
Rune Keldsen
Chief Technology Officer
standards. Due to this change there are no comparison
figures for the CSAT score.
Customer scores for passenger services are not reported
for 2020 due to the severe negative impact of Covid-19 on
passenger volumes.
IT, Digital & Innovation – adapting to a post-Covid-19
world while continuing to transform
During 2020, the IT, Digital and Innovation functions were
merged into a joint new function Technology & Innovation
along with the arrival of Rune Keldsen, EVP and Chief Tech
-
nology Officer (CTO). The mission of the new organisation
is to increase the pace, efficiency and value of our digital
transformation.
Following the outbreak of Covid-19 in late Q1 most staff
transitioned to remote working, Remote working, and the
technical capability to support it, has been a consistent
theme through the year to ensure that staff had both the
tools and the training to stay connected and maintain
productivity.
Focus on cross-functional collaboration
Collaboration between those working with all aspects of
technology and the commercial and operational teams
is a key focus area. As a result of this and the impact of
Covid-19 on customers, there was substantial growth in
usage of customer-facing freight solutions, such as the
logistics platform DFDS Direct and mobile applications for
truck drivers.
A new version of DFDS Direct was released in May
2020 reaching more than 10% of the Logistics Division’s
bookings by the end of year. The ambition is to at least
double this level by 2023.
Management review
DFDS Annual Report 2020
16
Collaboration was also critical in preparing for Brexit, which
resulted in multiple new processes and integrations with
various external authorities to ensure that the freight of
our customers kept moving during the transition. Systems
and processes were updated and adapted in the beginning
of 2021 to the new post-Brexit rules.
Automation and data - roadmap to autonomous logistics
Covid-19 slowed progress on automation, which relies
predominantly on machine learning techniques to address
use cases such as asset utilization, yield management and
target setting. As the pandemic disrupted ordinary behav
-
iour, the operational usefulness of several algorithms was
reduced as they rely on historical data to predict outcomes.
Progress is nevertheless being made on increasing auto
-
mation and real-time data transparency for the logistics
of entering port terminals and performing tasks within the
terminal area, as part of our innovation roadmap towards
autonomous logistics. We continue to innovate in this area
together with Volvo and other partners.
IT foundation: ERP and architectural maturity
still top priorities
Preparations for the implementation of a new ERP (Enter
-
prise Resource Planning) system continued throughout the
year to develop the prototypes and the extensive integra
-
tions needed between back-office and core operational
systems. Benefits are expected to come through from the
shift towards a more composable architecture. Complexity
of passenger systems is reduced, which makes new devel
-
opment faster and cheaper. Similar efforts are underway in
the Freight Ferry and Logistics solution areas to improve our
ability to integrate with customers and partners.
Cybersecurity is still top of mind and a strengthened Cyber
-
security team is in place to ensure that we respond fast
to external threats as well as keep up to date with threat
prevention techniques and systems. The security perspec
-
tive of our Cloud strategy is also high on the agenda.
Management receives regular updates on cybersecurity,
including regular reports to the Board of Directors. In order
to continuously monitor progress, the Board of Directors
meets the Head of Technology & Innovation and the head
of cyber security biannually.
Environment, people and finance
Innovating for a zero-emission future
2020 saw the launch of the climate action plan that
includes a transition to a zero-emission fleet and to green
terminals. Funding applications together with partners
were submitted for the development of a hydrogen test
vessel, and for testing of other alternative fuels such
as green Ammonia, as well as for the EU’s Green Ports
initiative.
A large part of becoming climate-neutral is also driven
by automation and data transparency. Focus is on two
main innovation tracks – Autonomous and Energy 2.0 –
that are increasingly converging in the search for solutions
to reduce fuel consumption in the short-term, and for more
radical approaches to climate neutrality.
Our policy on innovation is that a green future is best
achieved by working openly together within our industry and
across industries to solve the challenging problems we all
face. We actively practice open innovation, and seek to form
partnerships as well as supporting others who can benefit
from access to an operator in order to test their ideas.
Climate action plan launched
On 7 September 2020, DFDS launched a climate action
plan to consistently reduce Greenhouse Gas (GHG)
emissions and ultimately become climate neutral by
2050. The climate action plan reaffirms our commitment
and responsibility for the environment. The plan also
aims to ensure that DFDS stays relevant as a provider of
ferry and logistics services for both freight customers and
passengers in the coming decades.
The climate action plan includes three key initiatives:
•
Next 10 years:
+20 technical initiatives to reduce
emissions from the ferry fleet by 45% from 2008 to
2030, with 25-35% expected to be achieved between
2019 and 2030
•
Long-term ferry fuel replacement:
Introduction of a
new generation of zero emission fuels to replace fossil
fuels. The new fuels are sustainable as they consist
of renewable energy stored in the form of ammonia,
hydrogen, or methanol
•
Trucks, terminals, facilities and offices:
Reduction of
emissions from third-party haulier trucks, own trucks
and equipment used in port terminals.
DFDS joined ambitious sustainable fuel project
On 26 May 2020, a unique partnership between A.P. Moller
-Maersk, Copenhagen Airports, DFDS, DSV Panalpina, SAS
and Ørsted was announced. It brings together the demand
and supply side of sustainable fuels with a concrete vision
to develop a new ground-breaking hydrogen and efuel
production facility as early as 2023. When fully scaled-up
by 2030, the project could annually deliver more than
The Cybersecurity team
Strengthened to ensure
that we respond fast
to external threats and
keep up with threat
prevention techniques
and systems.
DFDS Direct was
released in May 2020
in a new version that
reached more than 10%
of the Logistics Division’s
bookings by year-end.
The ambition is to at
least double this level
by 2023.
Management review
DFDS Annual Report 2020
17
250,000 tonnes of sustainable fuel for busses, trucks,
maritime vessels, and airplanes. The production from the
fully scaled facility can reduce annual carbon emissions
by 850,000 tonnes.
DFDS in partnership to develop hydrogen ferry
DFDS partnered up with a group of companies in 2020 to
develop a 100% hydrogen powered ferry for initially the
Oslo-Frederikshavn-Copenhagen route.
In November 2020, the partnership applied for support
from EU’s Innovation Fund to develop a ferry powered
by electricity from a hydrogen fuel cell system, capable
of producing up to 23 MW, emitting only water. Green
hydrogen for the ferry is envisioned to be produced by a
projected offshore wind energy-powered electrolyser plant
in Greater Copenhagen based on offshore wind.
The largest fuel cell systems today produce only 1-5
MW, and the development of such large-scale fuel cell
installations for an electric ferry is a monumental task. The
partnership committed to achieving this includes DFDS,
ABB, Ballard Power Systems Europe, Hexagon Purus, Lloyd’s
Register, KNUD E. HANSEN, Ørsted and Danish Ship Finance.
The partnership has applied for support from the EU in
order to accelerate the process and in view of the public
interest in developing such technology. There are no ferries
of this kind in the world today and a high level of uncer
-
tainty is therefore involved in the undertaking. However, if
the project develops as projected, the ferry could be in full
operation on the route, or elsewhere, as early as 2027.
The project also aims to make these fuel types and
technologies commercially viable, which is key for the
transition of the industry to climate neutrality. This is also
the ultimate goal of DFDS’ climate action plan.
The ferry that has the working name Europa Seaways, is
designed for 1,800 passengers and has capacity for 120
trucks or 380 cars.
Biofuel development project
In 2019, an investment was made in the start-up company
MASH Energy that produces biofuel from agricultural
waste, currently from the by-products of nut processing in
India. The biofuel is CO
2
neutral and can be used in ships.
In addition, the residual product is an effective fertiliser
and will also contribute to reduce CO
2
emissions. During
the spring of 2021 large scale test results of the fuel will
become available and this will determine how to approach
testing the fuel on board a DFDS vessel going forward.
Together with MASH Energy, the goal is to develop a
commercially viable alternative to fossil fuels.
People
A key challenge in 2020 was to keep employees safe from
Covid-19. For non-office employees on board ferries, in
port terminals and warehouse or driving trucks a number
measures were introduced. This included frequent tests,
work shifts/safe bubbles, focus on hygiene and use of face
masks as well as frequent campaigns about how to stay
safe. For employees in offices working from home was in
some periods mandatory or recommended to create safe
working environments and minimise risks. Clear signage
of distance was introduced in all public areas. Remote
leadership training was also introduced, including focus
on mental health issues arising from being separated from
colleagues for longer periods.
Sadly, two fatal accidents occurred for two people
employed by external contractors in 2020. One occurred
for a truck driver in the Vlaardingen port terminal. The
second occurred in Mersin for a repairman on the deck of
a freight ferry. Our Health & Safety team worked closely
with authorities to support their investigations into the
accidents. Both cases were closed with no remarks to our
responsibility. The accidents have also been assessed
locally to gather any learnings. More information about
the accidents and safety is available in the CSR Report.
Reporting on people and environment is part of DFDS’ CSR
report. A CSR summary is included in this report on pages
38-42 The full CSR Report 2020 is available from this link
DFDS’ People activities aim to support employees and
business units in making the right decisions with regard
to recruitment, retention, employee and management
development, talent spotting, performance management,
compensation and benefits as well as organisational
efficiency. More information about employees and people
management is available from DFDS’ CSR report:
link
A key challenge in 2020
To keep employees safe
from Covid-19 both on
board ferries, in port
terminals and warehouses
or driving trucks as well
as in offices
Management review
DFDS Annual Report 2020
18
Helping customers through Brexit
We built a new customs organisation from scratch with
around 100 employees and invested in systems that could
connect with customs authorities to offer a full service
concept to our customers. A new direct ferry link between
Ireland and France was opened to offer customers a hassle
free alternative to driving through the UK.
Management review
DFDS Annual Report 2020
19
Important events 2020
January February March April May June July August September October November December
Karina Deacon, CFO
& EVP, joined
Executive Board
DFDS signs gender
equality charter of
Danish Shipping
Rune Keldsen,
Chief Technology
Office & EVP
joined Executive
Management
Team (EMT)
Fatal accident in
Vlaardingen freight
port terminal
Fatal accident during
maintenance work on
board a freight ferry
in Mersin port
Annual general
meeting (AGM)
postponed and
dividend cancelled
Financial outlook for
2020 suspended
DFDS joins project to
develop industrial
scale production
facility for hydrogen
AGM held as a virtual
event
Green automation
project, EU funded
Financial outlook for
2020 reinstated
Ambition to become
climate neutral by
2050 launched as
part of new climate
action plan
Filip Hermann appointed
Head of Channel
business unit replacing
Kasper Moos. Kasper
Moos appointed Head of
Passenger business unit
Financial outlook
for 2020 raised
Start of external
reporting of monthly
ferry volumes
Partnership project
to develop hydrogen
ferry launched
21 Horizon talent
program participants
graduate
Employees
recognised for
exceptional
contribution by
award of shares
Acquisition of
Colley Brothers, UK,
aquaculture logistics
Freight agreement with
Eckerö Line on route
between Estonia and
Finland
Sale of Liverpool
Seaways, combined
freight and passenger
ferry
Partnership
with primeRail
to develop rail
solutions as part
of Turkey-Europe
freight services
New staffing
company established
in Gothenburg
DFDS and Danish
Defence enter
into new six-year
agreement
New direct ferry
route between
Ireland and France
announced to open
2 January 2021
Ferry office in
Rosslare opened
Third freight
ferry newbuilding
deployed on
Vlaardingen-
Immingham route
Oslo-Copenhagen
route suspended due
to Covid-19
Amsterdam-
Newcastle route
suspended due to
Covid-19
12 freight ferries laid
up and departures
to adapt capacity to
impact of Covid-19
Initial adaptation
of operations to
Covid-19 launched
One of six ferries on
Dover routes laid up
due to Covid-19
Schedule improved
on Paldiski-
Kapellskär and
capacity reduced on
Paldiski-Hanko
DFDS Direct logistics
platform launched
Fourth freight
ferry newbuilding
deployed on
Gothenburg-
Zeebrugge route
New route between
Oslo and Frederikshavn
opened and Oslo-
Copenhagen route
reopened
Adaptation of business
structure and operations
to post Covid-19 market
conditions, including
layoff of 650 employees
Amsterdam-
Newcastle route
reopene
d
Further layoff of 200
employees mainly
due to adaptation of
Channel operation
Freight ferries laid
up from March
redeployed apart
from one
Fifth freight ferry
newbuilding deployed
on Vlaardingen-
Immingham route
Laid-up ferry on Dover
routes deployed again
DFDS part of
EU-funded AWARD
project to develop
automated driving
systems
One of two
ferries laid up on
Oslo-Frederikshavn-
Copenhagen route
Environment, people and finance Business development and competition Operations and digital
Management review
DFDS Annual Report 2020
20
Major events after 2020
New direct ferry route between Ireland
and France/ Continental Europe
To facilitate trade between Ireland and continental Europe,
DFDS opened on 2 January 2021 a new freight ferry route
between Rosslare in Ireland and Dunkirk in Northern
France. The port of Dunkirk is a gateway to Ireland’s top
export markets – France, Belgium, Germany and Nether
-
lands – and a host of secondary markets.
Additional capacity was chartered in order to deploy
three combined freight and passenger ferries on the route
to carry drivers along with their trucks and trailers. The
new route thus offers a cost-efficient alternative to driving
through the UK.
The deployment of three ferries ensures a competitive
frequency with six weekly departures in each direction. Each
ferry has a capacity of up to 125 trucks and their drivers in
Covid-19 safe single cabins. The crossing time is 24 hours.
The route is initially not targeting passengers, although a
passenger offering may be marketed at a later stage.
The route is expected to reach revenues above
DKK 300m in 2022. The route is jointly owned by DFDS
and Irish interests. Managing director will be Aidan Coffey.
The new route will be operated from offices in Rosslare,
Cork, and Dunkirk.
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 temper
-
ature-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.
Closing of the transaction is expected to take place
around 1 May 2021 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.
Return on invested capital (ROIC) 2020
Average invested capital,
DKK m
ROIC before special items,
%
DFDS Group 22,500 3.5
Divisions & business units
Ferry Division 20,222 3.9
North Sea 5,951 10.3
Baltic Sea 1,625 16.4
Channel 1,713 5.2
Mediterranean 9,787 2.4
Passenger 722 -73.1
Non-allocated 424 26.2
Logistics Division 1,613 7.7
Nordic 399 10.3
Continent 711 5.2
UK & Ireland 504 9.3
Group Non-allocated items 665 n.a.
ROIC and capital structure
Return on invested capital
DFDS’ return target is a minimum ROIC (return on invested
capital) of 8% before special items and after tax over a
business cycle. DFDS’ weighted average cost of capital is
around 5%.
The Group’s ROIC before special items was 3.5% in 2020
compared to 8.1% in 2019. The sharp decrease in ROIC was
driven by negative impacts from the outbreak of Covid-19
that severely reduced earnings from passenger services.
The ROIC was in 2020 above 8% in four of eight business
units: North Sea, Baltic Sea, Nordic and UK & Ireland.
Covid-19 caused a severe drop in passenger volumes that
Management review
DFDS Annual Report 2020
21
reduced the ROIC of the Channel and Passenger business
units, while a slowdown of particularly the automotive
sector reduced the ROIC of the Continent and Mediter
-
ranean business units. The latter was also negatively
impacted by a slowdown in other sectors and travel
restrictions for truck drivers.
The financial ambition of the Win23 strategy is refo
-
cused on ROIC with an ambition to achieve a ROIC of 10%
in 2023 which is above the minimum return target of 8%.
Capital structure
The leverage of DFDS’ capital structure is defined as the
ratio of net interest-bearing debt (NIBD) to operating profit
before depreciation (EBITDA) and special items. Target
leverage is an NIBD/EBITDA-ratio of between 2.0 and 3.0.
At the end of 2020, the NIBD/EBITDA-ratio was 4.2.
DFDS’ Board of Directors continuously assesses the
capital structure in relation to current and expected future
earnings as well as future investment requirements,
including acquisitions.
The capital distribution policy, distribution in 2020 and
proposal for distribution in 2021 are reported on page 48.
Business model and assets
Business model
DFDS moves freight and passengers on ferry routes in and
around Europe. In addition, transport and logistics solu
-
tions are provided to a wide range of businesses using the
ferry routes as part of the solution whenever that is the
most efficient choice.
In 2019, around 84% of DFDS’ revenue derived from
freight activities and 16% was generated by passenger
activities. The share of passenger revenue decreased in
2020 due to Covid-19 and in 2021 passenger revenue
is expected to recover partly. Assuming a full recovery
of passenger revenue in 2022 and consolidation of HSF
Logistics Group, it is expected that the share of passenger
revenue will be around 14%.
Ferry activities
DFDS’ ferry routes aim to provide reliable and efficient
services for trade and travel, as such the routes are part of
Europe’s transport infrastructure.
The location and capacity of DFDS’ ferry routes is
determined by demand from businesses and consumers.
Some routes link regions with a high level of manufacturing
activity and carry only freight, and some routes serve
freight and passenger markets at the same time. Two
routes in the network connect attractive city destinations
and carry mainly passengers.
Port terminals are operated in key hubs to ensure access
and efficiency, and also to offer additional services to
freight customers, for example warehousing and storage.
All routes operate according to fixed schedules with
capacity determined by the number and size of ferries
deployed on each route as well as the frequency of the
schedule.
Different ferry types are deployed on the routes
according to customer requirements. Freight ferries (ro-ro)
are deployed on routes carrying only freight, combined
freight and passenger ferries (ro-pax) are deployed on
routes where the demand for freight capacity exceeds
passenger demand. Passenger cruise ferries are deployed
on routes that predominantly carry passengers and have a
24
22
20
18
16
14
12
10
8
6
4
2
0
Net working capital
Goodwill
Other intangible assets
Other assets
Leased assets
Cargo carrying equipment
Terminals, land and buildings
Ferries and other ships
Invested capital (year-end)
DKK bn 2019 2020
Management review
DFDS Annual Report 2020
22
wide range of on board facilities to make the journey itself
an attractive experience.
The purpose of ferries is to carry freight units and cars
that are rolled on and off, hence the ‘ro-ro’ abbreviation.
Around 82% of the freight volumes carried on DFDS’ ferry
routes are trailers that contain a wide variety of goods
mostly for fast delivery within a few days. Forwarders and
hauliers are the main freight customers of the routes.
Trailers can be accompanied by a truck driver throughout
a crossing or the trailer can be unaccompanied, i.e. it is
delivered to the port and loaded on the ferry as part of
port operations. On most longer routes the trailers are not
accompanied by a driver and vice versa on short crossings.
Between Turkey and Europe all trailers are unaccompanied,
the North Sea is mainly an unaccompanied market while
trailers on the Baltic Sea are mostly accompanied which
requires ferries with cabins to accommodate drivers. On the
Channel, almost all trailers are accompanied but no cabins
are required due to the short duration of the crossing.
On a number of routes, mostly from Scandinavia to UK
and the European continent, heavy industrial cargo is carried
for manufacturers. This typically requires specialised equip
-
ment as well as port terminal and warehousing services.
Apart from the location of a route, key elements of the
value proposition to freight customers are schedules that
match market requirements, capacity allowing customers to
grow their business, reliability and being easy to work with.
The latter includes both digital solutions and relationships.
For passengers, a key element of the value proposition
is likewise the route location. Moreover, the ability to
bring a car, the on board facilities, reliability, high season
capacity and an easy booking process are all important.
To operate ferry routes and port terminals, including
warehouses, a range of assets are deployed that are both
owned and leased. Information on the fleet is reported
in the table and more details are available in the Fleet
Overview on page 141-142.
Logistics activities
DFDS provides transport and logistics solutions that to
a large extent uses DFDS’ route network as part of the
solutions. The business model aims to provide flexible
solutions that fit customer requirements and allows for
fast reactions to changes in market conditions.
The main activity is transport solutions for full- and
part-loads in both ambient and temperature-controlled
trailers. Another major activity is logistics solutions that are
developed in partnership with customers, including manu
-
facturers and retailers. Such solutions can include ware-
housing and cross-docking services, freight management
contracts and just-in-time/sequence deliveries. In addition,
a new manning agency for logistics and port operations was
established in Sweden at the end of 2020.DFDS deploys a
mix of owned and leased trailers while most transports are
subcontracted to a network of carriers: Hauliers, rail opera
-
tors, ferry operators and container shipping operators. Own
drivers and trucks are deployed in some contract logistics
Fleet overview and key figures, year-end 2020
Total
fleet
Freight
ferries
Freight &
passenger
ferries
Cruise
ferries
Sideport
and
container
ships
Own-
ership
share,
%
Average
age of
owned
ships,
yrs
DFDS Group 70 38 16 3 12 - -
Ferry Division 58 38 15 3 2 - -
North Sea 21 19 - - 2 79 13
Baltic Sea 8 3 5 - - 88 19
Channel 10 - 10 - - 60 18
Mediterranean 16 16 - - - 94 13
Passenger 3 - - 3 - 100 31
Logistics Division 10 - - - 10 - -
Nordic
1
3 - - - 3 0 -
Continent
1
7 - - - 7 0 -
Chartered out ships - - - - - - -
Laid-up ships 2 - 1 1 - 50 26
1
Includes VSAs (vessel sharing
agreements) and SCAs (slot
charter agreements)
Management review
DFDS Annual Report 2020
23
and distribution activities. A number of warehouses are also
operated as part of contract logistics activities.
Assets and invested capital
DFDS operated a fleet of 70 vessels at the end of 2020. The
ferry routes deployed 59 ferries, of which 49 were owned
and ten were chartered in for varying periods.
The ownership share of ferries is to a large extent
determined by the required degree of specialisation of a ferry
in order to match customer needs on different routes. In addi
-
tion, ferry operators have in recent years in general increased
their share of ownership, partly due to the specialisation and
growing size of ferries and partly due to fewer companies
focused on owning and chartering out ferries.
The degree of specialisation of freight ferries (ro-ro,
ro-pax) is linked to capacity requirements for freight and
passengers, configuration of passenger areas, deck strength
for loading of heavy freight, hanging decks for cars, sailing
speed, fuel efficiency and ramps, including requirements for
turnaround speed in ports.
The lifespan of freight and passenger ferries is estimated at
35 years and 45 years for passenger cruise ferries. The duration
of port-terminal leases is typically between 10 and 40 years.
The assets deployed in Logistics mainly include cargo
carrying equipment such as trailers and containers. It also
includes warehouses and storage facilities.
At the end of 2020, the total invested capital was
DKK 22.1bn, including leased assets of DKK 3.1bn. 55% of
the invested capital consisted of owned ferries and other
ships and 7% consisted of owned port terminals, land and
buildings and cargo carrying equipment. 22% of the invested
capital was goodwill and other intangible assets. The net
working capital was DKK 0.1bn.
Ferry Division’s invested capital was DKK 20.1bn at
year-end 2020 while Logistics Division’s invested capital
was DKK 1.4bn.
Outlook 2021
The level of visibility continues to be below normal levels
for mainly two reasons: the Covid-19 pandemic and 2021
being the first year post Brexit with longer term effects
of the transition yet to emerge. Uncertainty is therefore
elevated going into 2021.
The outlook for 2021 builds on a number of assump
-
tions that may change significantly as the year progresses.
General market growth prospects
The consensus outlook for GDP-growth (Gross Domestic
Product) in Europe and Turkey predicts that growth will
resume in 2021 after a decrease in GDP in 2020. The
consensus outlook thereby assumes that the negative
impact of Covid-19 will be less in 2021 than in 2020. It
also reflects continued support from EU monetary and
fiscal policies.
Turkey’s economy, and in particular its trading with
Europe, is linked to the development in demand on Euro
-
pean markets that is expected to grow. Turkey’s export is
also expected to benefit from the depreciation of TRY vs
EUR. Longer term, Turkey should gradually benefit from
nearshoring of manufacturing from overseas region as
companies consider reducing risks of supply chain disrup
-
tions. Geopolitical issues involving Turkey could dampen
the expected growth, both short and long term.
The current consensus estimate for European real GDP
Outlook 2021*
DKK m Outlook 2021 2020
Revenue growth 20-25% 13,971
EBITDA before special items 3,000-3,500 2,732
Per division:
Ferry Division 2,300-2,700 2,332
Logistics Division 750-850 445
Non-allocated items -50 -45
EBIT before special items 1,000-1,500 858
Investments -2,800 -1,618
growth in 2021 is around 5.5%, including growth of 4.2%
for UK and 4.5% for Turkey. (Source: Thomson Reuters).
Key outlook freight assumptions for 2021
As expected, 2021 has started with a considerable
decrease in freight ferry and logistics volumes related
to the UK following the extended stockbuilding in Q4
2020. Due to the uncertainty linked to the first year post
Brexit, visibility on the earnings outlook for business units
facilitating trade with the UK and trading in the UK is low.
Earnings in 2021 for UK-linked activities are therefore
expected to be below 2020.
The Mediterranean business unit is expected to improve
earnings in 2021 driven by volume growth and more
efficient operations.
In the Baltic region, freight ferry capacity and competi
-
tion increased in the second half of 2020. This is expected
to continue with lower earnings from ferry services in 2021
compared to 2020.
* Including acquisition of HSF
Logistics Group from 1 May
Management review
DFDS Annual Report 2020
24
Various risks and uncertainties pertain
to the outlook.
Various risks and uncertainties pertain to
the outlook.
The most important among these are
possible major changes in the demand for
ferry – freight and passengers - and logis
-
tics services. For DFDS, such demand is to a
large extent linked to the level of economic
activity in primarily Europe, especially
northern Europe and in particular the UK,
as well as adjacent regions, particularly
Turkey.
Demand can also be impacted by
competitor actions and extraordinary
events such as virus outbreaks. Covid-19
continues to constitute a significant
risk, particularly for passenger services.
The outlook can moreover be impacted
by political changes, first and foremost
within EU and Turkey. The introduction of
a new trade agreement between the EU
and the UK constitutes an important risk.
Changes in economic variables, espe
-
cially the oil price and exchange rates, can
furthermore impact earnings.
Future financial results may therefore
differ significantly from expectations.
Key outlook assumptions for HSF Logistics Group
The acquisition of HSF Logistics Group is expected to
be consolidated from 1 May 2021 subject to regulatory
approval. For eight months in 2021, the Group’s revenue
is expected to be around DKK 1.9bn and EBITDA before
special items around DKK 250m.
Key outlook passenger assumptions for 2021
The EBITDA for passenger services across business
units - Passenger, Channel and Baltic Sea - was reduced
by around DKK 1bn in 2020 due to travel restrictions
imposed to limit the spread of Covid-19.
It is initially assumed that around 40% of the decrease
in 2020 is regained in 2021. The current most likely
scenario is that travel restrictions will continue to limit
travel in the first half of 2021 while some easing of
restrictions are expected in the second half of the year.
The high season for ferry travel is Q3 and the outlook
is thus especially sensitive to the scope of restrictions in
this quarter.
Revenue outlook
The Group’s revenue is expected to increase by 20-25%
compared to 2020.
The main growth drivers are the addition of HSF Logis
-
tics Group, the opening of a new route between Ireland
and France and an increase in passenger volumes.
EBITDA outlook before special items
Based on the assumptions described above, the Group’s
EBITDA before special items is expected to be within
a range of DKK 3.0-3.5bn (2020: DKK 2.7bn). See the
outlook table for a divisional split.
EBIT outlook before special items
The Group’s EBIT before special items is expected to be
within a range of DKK 1,000-1,500m (2020: DKK 858m).
Investments
Investments of around DKK 2.8bn are expected in 2021 of
which DKK 0.9bn is the initial payment for HSF Logistics
Group.
One new freight ferry (ro-ro) was delivered in February
2021 and in Q4 the first of two new combined freight and
passenger ferries (ro-pax) is scheduled for delivery.
The second is planned for delivery in 2022.
Investments in 2021 are expected to comprise:
• Acquisition of HSF Logistics Group: DKK 930m
• Ferry newbuildings: DKK 800m
• Dockings and ferry upgrades: DKK 500m
• Port terminals and other equipment: DKK 200m
• Cargo carrying equipment and warehouses, mainly
related to Logistics Division: DKK 250m
• Other investments, including IT and digital: DKK 150m.
Risk factors are
reviewed on pages 44-47
in this report.
Management review
DFDS Annual Report 2020
25
Managing through big swings in demand
The pandemic reduced freight volumes in early spring and
a number of ferries were laid up to adapt operations to
the new situation. As freight volumes picked up again, we
brought capacity back to the market to support the growth
of customers. For the UK stockbuilding ahead of Brexit,
we again increased capacity through more departures and
even our new mega freight ferries were close to full as the
stockbuilding peaked in December.
Management review
DFDS Annual Report 2020
26
Ferry Division
Ferry Division’s revenue decreased 21% to DKK 9,678m
compared to 2019. The decrease was mainly driven by a drop
in passenger revenue due to travel restrictions. In addition,
the decline in the oil price reduced revenue from bunker
surcharges and freight revenue was reduced in Q2 2020 by
lockdowns. Freight revenue picked up well from the beginning
of Q3 and stockbuilding in the UK ahead of Brexit boosted
revenue further in Q4. EBITDA before special items decreased
28% to DKK 2,332m. EBIT before special items decreased
52% to DKK 815m and after special items the decrease was
57% due to one-off costs for adapting the organisation to
Covid-19 .
The return on invested capital, ROIC, before special
items decreased to 3.9% in 2020 from 8.7% in 2019
primarily due to the significant drop in passenger earn
-
ings caused by the pandemic. Average invested capital
increased 4% to DKK 20,222m compared to 2019.
North Sea
Revenue decreased 8% to DKK 3,653m compared to 2019
mostly due to lower revenue from bunker surcharges as
Head of division
Peder Gellert Pedersen
Share of DFDS Group
revenue 2020
66%
Business areas
North Sea
Baltic Sea
Channel
Mediterranean
Passenger
Freight ferry infrastructure
proved resilient and improved
earnings despite Covid-19
Mediterranean routes
recovered strongly in second
half-year
Passenger earnings dropped
DKK 1bn as travel restrictions
brought travel to a standstill
the oil price declined in 2020. EBITDA before special items
decreased 8% to DKK 1,185m due to negative impacts
from Covid-19 on some routes as well as a one-off income
from a capacity agreement with the UK Department for
Transport in 2019.
Freight volumes increased 2% in 2020 compared to
2019. Following a sharp drop in volumes Q2 caused
by lockdowns related to Covid-19, volumes recovered
through Q3. In Q4 volumes were boosted by UK stock
-
piling ahead of Brexit. The slowdown in Q2 was particu-
larly pronounced for the automotive industry as some
plants were temporarily closed. Volumes of both finished
cars and spare parts decreased. Tem-perature controlled
freight volumes, mostly medicine and food products, were
less impacted.
One new mega freight ferry was deployed on the
route between Gothenburg and Zeebrugge and two were
deployed on the route between Vlaardingen (Rotterdam)
and Immingham. Capacity on the latter route was increased
which was well utilised during the stockbuilding period.
Management review
DFDS Annual Report 2020
27
Ahead of Brexit at the end of December 2020, a six-month
agreement was entered into with the UK Department for
Transport regarding supply of freight ferry capacity in the
first half of 2021. The agreement had no financial impact
in 2020.
Baltic Sea
Revenue decreased 14% to DKK 1,268m compared to
2019 and by 5% adjusted for route closures and a decline
in revenue from bunker surcharges due to the oil price.
EBITDA before special items decreased 13% to DKK 434m
following lower passenger earnings and a higher level of
costs as more capacity was added on some routes.
Freight volumes were up 4% compared to 2019 adjusted
for the closure of the Paldiski-Hanko route at the end of Q3.
This followed on from a capacity reduction from mid-Q2 and
a freight agreement with Eckerö Line announced at the same
time to serve volumes between Finland and Estonia. These
changes provided an opportunity to improve the schedule
and capacity between Estonia and Sweden where some
market share was gained as competitors reduced capacity in
parts of the year.
A high level of volumes were carried on the routes
between Lithuania and Sweden/Germany supported by
additional capacity on the routes. Competition increased,
both direct and indirect, as competitors increased capacity,
including the opening of a new route.
Passenger volumes decreased 15% in 2020 as passenger
travel was restricted to essential travel. The volume
decrease was less than on other passenger services in and
outside Baltic Sea as migrant workers constitute a high
share of the passengers. In addition, the capacity to carry
passengers was increased on Paldiski-Kapellskär in Q3
.
Ferry Division
DKK m 2020 2019
* ∆ ∆ %
Revenue 9,678 12,197 -2,519 -20.7%
EBITDA before special items 2,332 3,254 -922 -28.3%
Share of profit/loss of associates and joint ventures -5 6 -11 n.a.
Profit/loss on disposal of non-current assets. net 0 2 -2 n.a.
Depreciation and impairment -1,512 -1,558 46 -3.0%
EBIT before special items 815 1,704 -889 -52.2%
EBIT-margin before special items. % 8.4 14.0 -5.6 n.a.
Special items. net -98 -53 -45 n.a.
EBIT 717 1,651 -934 -56.6%
Invested capital. average 20,222 19,421 801 4.1%
ROIC before special items. % 3.9 8.7 -4.8 n.a.
Average number of employees 5,452 5,766 -314.0 -5.4%
Lane metres. '000 40,886 41,280 -394 -1.0%
Tons. '000 664 766 -102 -13.3%
Passengers. '000 1,498 5,116 -3,618 -70.7%
Channel
Revenue decreased 25% to DKK 2,012m compared
to 2019. The decrease was mainly driven by a drop in
passenger revenue due to travel restrictions. Freight
revenue, excluding bunker surcharges, was on level with
2019. EBITDA before special items decreased 33% to
DKK 334m.
Freight volumes were on level with 2019 while passenger
volumes decreased 65%. The year started with freight
volumes below 2019 as Q1 in that year had seen a spike in
volumes leading up to a Brexit deadline that was eventually
postponed. From mid-March volumes were reduced by lock
-
downs before picking up towards the end of Q2. The pickup
in volumes continued into Q3 and in Q4 volumes reached
record levels due to stockpiling in the UK ahead of Brexit.
Total volumes in the Dover Strait freight market decreased
7% in 2020 while DFDS’ market share increased 2 ppt on
2019, particularly in the second half of the year.
The decrease in passenger volumes was higher than the
56% decrease in the total market. The pandemic signifi
-
cantly reduced volumes from the end of Q1. There was a
mild recovery in Q3 as travel restrictions were eased tempo
-
rarily. Due to customer uncertainty around international
travel and social distancing onboard volumes were however
still below 2019. As travel restrictions were tightened
for the rest of the year volumes again fell back. The low
volumes were mitigated somewhat by higher revenue per
passenger.
Capacity on the Dover Strait was adapted through the
year by reducing the number of sailings and laying up one of
six ferries for several months.
In 2021, a combined freight and passenger ferry
newbuilding will replace the oldest ferry on the Dover Strait
* The Norwegian sideport shipping
activities were transferred from
the Logistics Division to the Ferry
Division 1 January 2020. 2019 is
restated accordingly
Management review
DFDS Annual Report 2020
28
expectedly in July. On 2 January 2021, a new route between
Ireland and France was opened deploying three combined
freight and passenger ferries. The new route will be reported
as part of the Channel business unit.
Mediterranean
Revenue decreased 5% to DKK 2,071m compared to 2019
while EBITDA before special items increased 8% to
DKK 631m.
Freight volumes decreased 8% in 2020 as high growth
in the first two months of the year was offset by a sharp
decline in volumes from mid-March when Covid-19 started
to impact markets. In addition to the general slowdown,
customers’ haulage operations were negatively impacted
by travel restrictions for truck drivers. The slowdown was
exacerbated by a high share of automotive and textile
volumes that dropped as manufacturers temporarily closed
plants. Ferry capacity was reduced during the slowdown by
lay-up of ferries.
Volumes recovered through Q3 and was on level with
2019 in the last month of the quarter. The positive volume
trend continued in Q4 as depreciation of the Turkish
Lira supported export growth. The volume recovery was
supported by a normalisation of customers’ trucking opera
-
tions as air travel restrictions for truck drivers were eased.
Rail services continued to grow and the utilisation level
improved considerably compared to 2019. Port terminal oper
-
ations were also improved, although capacity continues to
be a constraint in some ports. From 1 January 2020, the new
rules limiting sulphur in fuel oil were adopted. Installation of
scrubbers on all freight ferries was completed by mid-year.
Extra costs were incurred during the installation process
which also reduced the reliability of schedules in periods.
Mediterranean’s result is expected to further improve in
2021 driven by volume growth as well as further improve
-
ment of operational efficiency and customer service levels.
Passenger
Revenue decreased 71% to DKK 489m compared to 2019
and EBITDA before special items decreased DKK 618m to
DKK -373m.
The significant decrease in revenue and earnings was a
result of the travel restrictions that were imposed for most
of the year from mid-March. Both routes were suspended
at the start of the pandemic in mid-March until end June
and mid-July, respectively. The number of sailings on the
Oslo-Frederikshavn-Copenhagen route were also reduced
for most of Q4.
A new route between Oslo and Frederikshavn was added
to the Oslo-Copenhagen route after a competitor closed its
route permanently in March 2020.
Non-allocated items
Non-allocated items primarily include activities related
to external chartering of ships not deployed in the route
network.
Revenue decreased 5% to DKK 436m compared to
2019 and EBITDA before special items decreased 15% to
DKK 122m.
Mediterranean’s result
is expected to further
improve in 2021 driven by
volume growth as well as
further improvement of
operational efficiency and
customer service levels
Management review
DFDS Annual Report 2020
29
Activities and business model
DFDS’ Ferry Division operates
one of the largest networks
of ferry routes in and around
Europe providing both freight
and passenger services.
Freight ferry services
The routes are strategically located to service the
freight volumes of forwarders, hauliers and manufac
-
turers of heavy industrial goods. All routes operate on
fixed, reliable schedules with a frequency adapted to
customer requirements.
Further visibility for customers is available by access
to apps for online tracking of shipments as well as
other value-adding services.
Bespoke logistics solutions are delivered in partnership
with manufacturers of heavy goods such as automo
-
biles, metals, forest products, and chemicals.
To further enhance the efficiency of customer services,
own port terminals are operated in strategic locations,
including warehousing services.
Passenger ferry services
The route network offers both overnight and short cross-
ings. Passenger cars are transported on all routes. The
onboard facilities are adapted to each route’s particular
mix of passengers and their requirements for enjoying
maritime travel.
North Sea DKK m 2020 2019* ∆ ∆ %
Revenue 3,653 3,971 -318 -8.0%
EBITDA before special items 1,185 1,284 -99 -7.7%
EBIT before special items 623 679 -56 -8.2%
Invested capital, average 5,951 5,633 318 5.6%
ROIC before special items, % 10.3 11.9 -1.6 n.a.
Lane metres, '000 13,028 12,815 213 1.7%
Tons, '000 664 766 -102 -13.3%
Baltic Sea DKK m 2020 2019 ∆ ∆ %
Revenue 1,268 1,472 -204 -13.9%
EBITDA before special items 434 497 -63 -12.6%
EBIT before special items 268 345 -77 -22.2%
Invested capital, average 1,625 1,384 241 17.4%
ROIC before special items, % 16.4 24.7 -8.3 n.a.
Lane metres, '000 4,434 4,613 -179 -3.9%
Passengers, '000 209 245 -36 -14.6%
Channel DKK m 2020 2019 ∆ ∆ %
Revenue 2,012 2,678 -666 -24.9%
EBITDA before special items 334 497 -163 -32.8%
EBIT before special items 91 268 -177 -66.0%
Invested capital, average 1,713 1,830 -117 -6.4%
ROIC before special items, % 5.2 14.6 -9.4 n.a.
Lane metres, '000 19,031 18,995 36 0.2%
Passengers, '000 989 3,520 -2,531 -71.9%
Mediterranean DKK m 2020 2019 ∆ ∆ %
Revenue 2,071 2,179 -108 -4.9%
EBITDA before special items 631 587 44 7.5%
EBIT before special items 245 231 14 6.0%
Invested capital, average 9,787 9,304 483 5.2%
ROIC before special items, % 2.4 2.4 0.0 n.a.
Lane metres, '000 4,034 4,365 -331 -7.6%
Passenger DKK m 2020 2019 ∆ ∆ %
Revenue 489 1,709 -1,220 -71.4%
EBITDA before special items -373 245 -618 n.a.
EBIT before special items -524 59 -583 n.a.
Invested capital, average 722 790 -68 -8.5%
ROIC before special items, % -73.1 7.1 -80.2 n.a.
Lane metres, '000 359 491 -132 -26.9%
Passengers, '000 300 1,351 -1,051 -77.8%
Non-allocated items DKK m 2020 2019 ∆ ∆ %
Revenue 436 461 -25 -5.5%
EBITDA before special items 122 143 -21 -14.6%
EBIT before special items 112 123 -11 -9.2%
* The Norwegian sideport
shipping activities were
transferred from the Logistics
Division to the Ferry Division 1
January 2020. 2019 is restated
accordingly
Management review
DFDS Annual Report 2020
30
North Sea Baltic Sea Channel Mediterranean Passenger
Head of business unit
Kell Robdrup (South)
Morgan Olausson (North)
Anders Refsgaard Filip Hermann Lars Hoffmann Kasper Moos
Share of Division’s revenue 2020
1
37% 13% 20% 21% 5%
Routes
• Gothenburg-Brevik/Immingham
• Gothenburg-Brevik/Ghent
• Gothenburg-Zeebrügge
• Esbjerg-Immingham
• Cuxhaven-Immingham
• Vlaardingen-Felixstowe
• Vlaardingen-Immingham
• Oslo Fjord-Zeebrugge-Immingham
• Fredericia/Copenhagen-Klaipeda
• Karlshamn-Klaipeda
• Kiel-Klaipeda
• Kapellskär-Paldiski
• Muuga-Vuosaari
(freight agreement)
• Dover-Dunkirk
• Dover-Calais
• Newhaven-Dieppe
• Rosslare-Dunkirk
(from January 2021)
• Istanbul-Trieste/Bari/Patras
• Istanbul/Cesme-Sète
• Mersin-Trieste
• Marseille-Tunis
• Oslo-Frederikshavn-Copenhagen
• Amsterdam-Newcastle
Ferries
• 21 freight • 3 freight
• 5 freight and passenger
• 6 freight and passenger, short sea
• 5 freight and passenger
(2 chartered end 2020 for
new route)
• 16 freight • 4 passenger cruise
Port terminals
(owned and/or own operations)
• Brevik
• Ghent
• Gothenburg (joint venture)
• Immingham
• Vlaardingen
• Istanbul, Pendik
• Trieste
• Copenhagen
Main customer segments
• Forwarders & hauliers
• Manufacturers of heavy
industrial goods (automotive,
forest and paper products,
metals, chemicals)
• RDF (refuse derived fuel)
• Forwarders & hauliers
• Manufacturers of heavy
industrial goods (automotive,
forest products, metals)
• Car passengers
• Forwarders & hauliers
• Car passengers
• Coach operators
• Forwarders & hauliers • Mini Cruise passengers
• Car passengers
• Business conferences
• Forwarders & hauliers
Main market areas
• Benelux
• Denmark
• Germany
• Norway
• Sweden
• UK
• Baltic countries
• Denmark
• Finland
• Germany
• Russia
• Sweden
• Continental Europe
• UK
• Continental Europe
• Tunisia
• Turkey
• Benelux
• Denmark
• Germany
• Norway
• Overseas markets
• Sweden
• UK
Main competitors
CLdN / P&O Ferries / Stena Line /
Container, road and rail transport
Road and rail transport / Stena Line /
Tallink Silja / Transfennica / TT Line /
Transrussia Express (Finnlines)
Brittany Ferries / Eurotunnel /
P&O Ferries
CMA-CGM / Cotunav / Ulusoy /
Container, road and rail transport
Airlines and road transport /
Color Line / P&O Ferries / Stena Line
1
Revenue shares do not
add up to 100% as
Non-allocated items are
not included in the table
Ferry Division activity overview
Management review
DFDS Annual Report 2020
31
Adapting the passenger business
When the pandemic struck in early spring passenger volumes
dropped dramatically. Ferries were laid up and we regrettably
had to adapt the workforce to the new situation. When
passenger services resumed, we saw an opportunity to add
Frederikshavn as a new destination between Norway and
Denmark to expand the route to new customer groups.
Management review
DFDS Annual Report 2020
32
Logistics Division
Logistics Division’s revenue of DKK 5,069m was 1% below
2019. EBITDA before special items increased 5% to
DKK 445m and EBIT before special items decreased 6% to
DKK 159m. EBIT after special items decreased 10% due to
one-off costs for adapting the organisation to Covid-19 .
The return on invested capital, ROIC, before special
items decreased to 7.7% in 2020 from 9,2% in 2019.
Average invested capital increased 7% to DKK 1,613m.
Nordic
Revenue increased 3% to DKK 1,625m compared to 2019
and EBITDA before special items increased 17% to
DKK 131m.
From mid-March until the end of May, activity was
reduced by lockdowns following the outbreak of Covid-19.
The Swedish market was the most impacted as a high share
of solutions are provided to the automotive sector and the
demand for specialised services also dropped. From the
end of Q2 activity started to pick up again, although the
automotive sector was slower to recover than most other
sectors. Towards the end of Q3 and in Q4 activity was
Head of division
Niklas Andersson
Share of DFDS Group
revenue 2020
34%
Business areas
• Nordic
• Continent
• UK & Ireland
Revenue down 1% to
DKK 5.1bn
EBITDA before special
items up 5% to
DKK 445m
Strong earnings recovery
in H2 offset negative impact
in Q2 from Covid-19
Successful integration of
acquisitions in Finland and
the Netherlands
increased by UK stockbuilding ahead of Brexit. Margins also
improved through cost control measures.
The acquired Finnish logistics company Freeco Logistics
was successfully integrated during 2020 adding transport
services between mainly Finland and Scandinavia, Baltics
and continental Europe. The positive full-year impact on
revenue from Freeco offset the drop in revenue caused by
Covid-19, especially in Sweden and Denmark. The full-year
result for Freeco was in line with expectations.
The Swedish contract logistics activities will in 2021
be expanded with a new warehouse in Karlshamn for both
ambient and cold chain customers. In addition, a new ware
-
house is planned to open in Borås, close to Gothenburg, at
the end of the year.
Continent
Revenue decreased 4% to DKK 2,391m compared to 2019
while EBITDA before special items of DKK 159m was
maintained on level with 2019.
Continental market activity was also reduced from
mid-March until the end of May by lockdowns following
Management review
DFDS Annual Report 2020
33
the outbreak of Covid-19. The impact was most severe on
automotive, special cargo construction and airline catering
volumes. Apart from the airline sector all sectors recovered
well in H2 and traffics between the Continent and the UK
were in addition boosted by UK stockbuilding ahead of
Brexit. Margins were also improved through cost control
measures.
The acquired Dutch logistics company Huisman Group
was successfully integrated during 2020 adding part-load
solutions between the Netherlands and the UK, including
warehouses and cross-docking facilities in Wijchen and in
Corby. The positive full-year impact on revenue from Huisman
was insufficient to offset the drop in revenue caused by
Covid-19, especially in the Netherlands and in Belgium. The
full-year result for Huisman was in line with expectations.
The annual result for the special cargo business was
considerably reduced by inefficiencies in its trucking
operation, including one-off costs reported in Q1 2020.
Since then operations were steadily improved and earnings
in H2 were above 2019.
UK & Ireland
Revenue increased 6% to DKK 1,444m compared to
2019 and EBITDA before special items increased 3% to
DKK 155m.
As a large part of the activities in the UK & Ireland
business unit are domestic in scope, the overall impact
from Covid-19 was less severe. The cold chain activities
distributing seafood and other produce to the UK catering
sector were, however, disrupted in periods through the
year. This was offset by a high level of activity in transport
services delivered to incoming trailer volumes from the
Continent and Scandinavia. The organisation was adapted
to the market changes following Covid-19.
Changes were made to the cold stores operated in
mid-England as the Warrington cold store was exited and
an agreement to operate a cold store in Liverpool was
entered into.
A smaller seafood distribution company, Colley Bros, linked
to the Grimsby activities was acquired during the year. More
-
over, a new freight forwarding office was opened in Dover.
Non-allocated items
Revenue of non-allocated items is mainly related to an
internal trailer equipment pool.
Acquisition of HSF Logistics Group
An acquisition of HSF Logistics Group, a leading cold chain
logistics provider, was announced in January 2021. The
acquisition is aligned with DFDS’ Win23 strategy of growing
solutions to selected industries, including cold chain
logistics customers.
HSF Logistics Group is a full-service provider of
cold chain logistics solutions to the food industry with
a specialist focus on meat logistics. Services include collec
-
tion from food producers, packaging, storage, processing
services, and distribution of both part and full loads.
The company operates from 22 locations across Europe,
including key distribution and storage centres in the Neth
-
erlands, Germany, and Denmark. In addition, the company
also has offices in China and Morocco.
Closing of the transaction is expected to take place
around 1 May 2020 subject to regulatory approval and
completion of required employee consultation processes.
More information on the transaction is available from
this
link
Logistics Division
DKK m 2020 2019* ∆ ∆ %
Revenue 5,069 5,116 -48 -0.9%
EBITDA before special items 445 421 24 5.6%
Profit/loss on disposal of non-current assets, net 4 4 0 2.6%
Depreciation and impairment -289 -256 -34 13.2%
EBIT before special items 159 170 -10 -6.0%
EBIT-margin before special items, % 3.1 3.3 -0.2 n.a.
Special items, net -12 -7 -6 n.a.
EBIT 147 163 -16 -9.7%
Invested capital, average 1,613 1,503 110 7.3%
ROIC before special items, % 7.7 9.2 -1.5 n.a.
Average number of employees 2,112 1,964 148.0 7.5%
Units, '000 525 540 -14.9 -2.8%
* The Norwegian sideport shipping
activities were transferred from
the Logistics Division to the
Ferry Division 1 January 2020.
2019 is restated accordingly
Management review
DFDS Annual Report 2020
34
Activities and business model
DFDS’ Logistics Division
provides flexible, cost efficient,
on-time door-door transport
solutions to producers of a
wide variety of consumer
and industrial goods.
The main activity is transport solutions for full- and
part-loads, both ambient and temperature-controlled.
In close partnership with retailers and manufacturers,
performance enhancing and cost efficient logistics
solutions are developed and provided, including ware
-
housing services and just-in-time/sequence concepts.
All solutions are supported by a European network
of road, rail and container carriers and, not least, the
transport infrastructure of DFDS’ ferry routes.
In some business areas, the carrier network is supple
-
mented with own drivers and trucks.
The business model aims to provide flexible solutions
that fit customer requirements and fast reactions to
changes in market conditions.
enjoying maritime travel.
* The Norwegian sideport shipping
activities were transferred from
the Logistics Division to the
Ferry Division 1 January 2020.
2019 is restated accordingly
Nordic, DKK m 2020 2019* ∆ ∆ %
Revenue 1,625 1,581 44 2.8%
EBITDA before special items 131 111 19 17.4%
EBIT before special items 50 48 2 3.3%
Invested capital, average 399 359 40 11.1%
ROIC before special items, % 10.3 11.4 -1.1 n.a.
Units, '000 108.9 108.8 0.1 0.1%
Continent, DKK m 2020 2019 ∆ ∆ %
Revenue 2,391 2,483 -91 -3.7%
EBITDA before special items 159 159 0 0.1%
EBIT before special items 49 50 -1 -2.8%
Invested capital, average 711 691 20 2.9%
ROIC before special items, % 5.2 5,7 -0.6 n.a.
Units, '000 224.5 240.9 -16.3 -6.8%
UK & Ireland, DKK m 2020 2019 ∆ ∆ %
Revenue 1,444 1,361 82 6.1%
EBITDA before special items 155 151 4 2.9%
EBIT before special items 61 72 -11 -15.1%
Invested capital, average 504 453 51 11.3%
ROIC before special items, % 9.3 12,8 -3.5 n.a.
Units, '000 191.8 190.5 1.3 0.7%
Non-allocated items 2020 2019 ∆ ∆ %
Revenue 89 94 -5
-5.3%
EBITDA before special items 0
0 0 n.a.
EBIT before special items 0
0 0 n.a.
Management review
DFDS Annual Report 2020
35
Nordic Continent UK & Ireland
Head of business unit
Valdemar Warburg Michael Bech Allan Bell & Eddie Green
Share of Logistics Division’s revenue, 2020
30% 43% 27%
Main Activities
Door-door full & part load solutions
Routes
• Scandinavia-UK/Ireland
• Scandinavia/UK-Baltic/Russia/CIS
• Sweden-Poland
• Sweden/Norway-Italy
• Holland-UK/Ireland
• Germany-UK
• Belgium/France-UK
• Belgium/France-Scandinavia
• Czech-UK/Ireland
• Northern Ireland-UK
• UK-Continent
Contract logistics • Arendal, cross docking terminal
• JIT haulage service (just in time)
• 4PL contracts
• Warehousing
• Ghent
• 4PL contracts
• JIT automotive
• Warehousing UK
• UK/Ireland domestic
• UK-Continent
• Northern Ireland retail distribution
• Dublin
• Seafood distribution
network
• Warehousing
• 4PL contracts
Container shipping • Norway-Zeebrugge-Immingham-Norway
Door-door container solutions (incl. VSA & SCA) • Norway-UK
• Norway-Continent
• Holland-UK/Ireland
• Germany-UK/
Norway/Italy
• Czech–UK/Ireland
Door-door rail solutions • Norway-Italy
• Baltic-Russia/CIS
Equipment (owned/leased) • 5,937 trailers
• 2,680 containers
Warehouses
Equipment (owned/leased)
• Gothenburg
• Karlshamn
• Fredericia
• Ventspils
• Brevik
• Rotterdam
• Wijchen
• Ghent
• Prague
• Peterborough
• Liverpool
• Immingham
• Larkhall
• Belfast
• Grimsby
• Bellshill
• Lerwick, Shetland
Sales offices
• Oslo
• Gothenburg
• Turku
• Copenhagen
• Karlshamn
• Lilla Edet
• Liepaja
• Hamburg
• Ghent
• Bruges
• Rotterdam
• Prague
• Boulogne Sur Mer
• Aberdeen
• Peterborough
• Immingham
• Larkhall
• Stallingborough
• Dover
• Belfast
• Grimsby
• Coventry
• Dublin
• Lerwick, Shetland
• +8 operational sites
Customer segments
• Manufacturers of heavy industrial goods (automotive, paper),
consumer goods, chemicals and temperature controlled goods
• Retailers
• Third party container operators
• Contract management
• Manufacturers of heavy industrial goods (automotive, paper),
consumer goods, chemicals and temperature controlled goods
• Retailers
• Forwarders
• Contract management
• Frozen, chilled and ambient cargo for retailers/manufacturers
• Aquaculture producers
• Contract management
Primary competitors
Blue Water / DSV / Green Carrier / Lo-Lo, container & sideport carriers /
NTEX / NTG / Schenker
CLdN / Container carriers / European forwarders /
LKW Walter / P&O Ferrymasters /Samskip
ACS&T / DHL / Yearsley / XPO
Logistics Division activity overview
Management review
DFDS Annual Report 2020
36
DFDS extends railway network
During the autumn of 2020, DFDS extended its network of
rail freight routes with a new service between Trieste and
Nuremberg. More than half of DFDS’ freight ferry volumes
between Turkey and Europe is transported by rail from the
ports of Trieste in Italy and Sète in France. This benefits the
climate and reduces road traffic.
Management review
DFDS Annual Report 2020
37
UN Sustainable Development Goals UN Sustainable Development Goals
Caring Employer
Ambition
Well-being
for all
employees
Inclusive
workplace
Opportunities
to do good
Environmental Footprint
Ambition
Support
marine
environment
Responsible
neighbour
Improve
air quality
Sustainability
summary
Management review
DFDS Annual Report 2020
38
Management review
DFDS Annual Report 2020
39
Management review
DFDS Annual Report 2020
40
Representation of women
Managers
Total workforce
Excecutive Management Team
Board of Directors
33% DFDS Group
33% DFDS Group
DFDS Group 33%
DFDS Group 33%
DFDS Group 23%
On land
27%
At sea
15%
DFDS Group 13%
On land
27%
At sea
7%
25% DFDS Group
29%
On land
18%
At sea
18% DFDS Group
26% On land
9% At sea
30%
2019
30%
2020
Management review
DFDS Annual Report 2020
41
ESG key figures
Target Target
Unit 2030 2023
2020 2019 2018 2017
Operated ships Amount - - 66 63 54 45
Total number of days operated Days - - 18,774 20,460 18,937 15,020
CO
²
e emissions
Direct CO
²
e emissions (Scope 1) 1,000 tonnes - - 2,014 2.253 1,871 1,582
Indirect CO
²
e emissions (Scope 2) 1,000 tonnes - - 5.99 7.31 8.46 7.68
Total CO
²
e emissions
1
1,000 tonnes - - 2,020 2,260 1,879 1,590
CO
²
emissions per GT mile
2
gCO
²
9.6 12.4 13.5 14.1 14.4 -
Energy consumption
Total fuel consumption Tonnes - - 619.867 699.115 654,795 490,401
Fuel consumption per nautical mile g/GT/Nm - - 4.25 4.42 4.49 4.90
Total energy consumption TJ - - 26.850 29.995 24,878 21,069
Electricity and heating consumption
per land-based FTE MWh - 5.9 6.3 7.4 7.9 8.6
Oil spills
Spills (> 1 barrel) Amount - 0
3
1 0 0 0
Target
Unit 2023
2020 2019 2018 2017
Number of employees end of period FTE - 8.213 8.638 8.073 7.167
Representation of women
Total workforce % 30 23 25 23 26
At sea
2
% 30 15 18 15 -
On land
2
% 30 27 29 29 -
Senior management % 30 16 19 10 15
Managers
2
% 30 13 18 - -
Employees
2
% 30 26 26 - -
Safety at sea
Lost-time injury frequency (LTIF) Incidents/mill. hours 3.50 4.05 4.52 5.04 6.40
Near-miss reports
4
Average per ship 48 36 55 64 67
Safety on land
Lost-time injury frequency (LTIF) Incidents/mill. hours 5.00 5.90 6.73 3.81
5
5.53
Minor accidents Incidents - 134 152 185 139
Fatalities
Colleagues Accident 0
3
0 0 0 1
Contractors Accident 0
3
2 1 1 0
Target
Unit 2023
2020 2019 2018 2017
Representation of women on the Board % 30 33 33 33 50
Attendance at Board meetings % - 96 94 91 97
CEO Pay ratio Times - 27 29 36 33
Environmental data Social data
Governance
Management review
DFDS Annual Report 2020
42
Preparing for clean fuels
DFDS’ climate action plan aims to reduce emissions by
45% in 2030 and achieve full climate neutrality in 2050.
In partnership with Danish companies, a hydrogen factory
outside Copenhagen is being developed. We are also
testing a program for hydrogen fuel cells to supply power
on board the freight ferry Ark Germania, and designing a
hydrogen fuel cell powered passenger ferry for possibly
the Oslo–Frederikshavn–Copenhagen route. The great thing
about hydrogen fuel cells is that they emit only water.
Management review
DFDS Annual Report 2020
43
Risk factors
General and specific operational risks
Economic risks from lower demand
Changes in economic activity that lead to changes in the
volume of the trade of goods and passengers can cause
major fluctuations in earnings as volumes are a key earn
-
ings driver for both the freight and passenger activities.
Risks are higher for the ferry activities, both freight and
passenger, than for the logistics activities. The difference
in risk profile is due to a high share of fixed costs in ferry
operations as opposed to a high share of variable costs in
logistics operations as the majority of haulage and other
transport services are subcontracted to external carriers.
This entails more flexibility to adapt activities to changes
in demand.
The demand for freight and passenger ferry services is
reflected in volumes and pricing, which in turn are linked
to the general level of demand in the countries and regions
that DFDS operate routes between. General demand levels
are most often determined by changes in macroeconomic
variables such as consumption. Demand can however also
Risk management is an
integral part of DFDS’
management processes
Risks and opportunities
are regularly reviewed
and reported to the
Board of Directors for
appropriate responses
and actions
be impacted by virus outbreaks or other exceptional events
that can lead to significantly lower economic activity due
to, for example, travel and other restrictions in people’s
usual activities. The scope of such exceptional events can
be both regional and global. Changes in economic variables
such as exchange rates can also impact demand.
Decreases in demand can lead to overcapacity on
ferry routes and lower earnings. This can be remedied by
reducing the frequency of departures, replacing incumbent
ferries with smaller ferries, removing a ferry from a route
or laying up a ferry, and ultimately by route closure.
Overcapacity also tends to increase price pressure which
can also reduce earnings.
Partly in order to counteract cyclical demand risk, part
of the freight fleet is chartered to enhance flexibility. DFDS
aims to charter a share of the fleet on contracts of shorter
duration with options for extension to provide opportuni
-
ties for redelivery of ferries at a few months’ notice.
The four passenger ferries in the fleet are 100% owned
which limits the options for adapting capacity in the short
term. DFDS’ container activities mainly operate through
Risks are higher for
the ferry activities, both
freight and passenger,
than for the logistics
activities
Management review
DFDS Annual Report 2020
44
vessel sharing and slot charter agreements with container
shipping companies which provides flexibility. To a large
extent, the logistics activities lease equipment.
DFDS’ geographic diversification across northern Europe,
the Mediterranean as well as parts of eastern Europe and
adjacent countries reduces dependence on individual
markets. In addition, the large and diversified route
network provides opportunities to reallocate ferry capacity
among routes.
Freight and passenger ferry markets can, moreover, be
impacted by changes in market conditions of competing
transport modes such as road, rail and air – the latter
mainly impacts the passenger sector.
In addition, markets are impacted by changes in local
and regional competition, such as the opening or closing
of competing routes and capacity increases on existing
competing routes. On a few routes, a significant proportion
of freight volumes are derived from a single customer.
Risks inherent in such customer relationships are mitigated
by multiple-year customer agreements that also reflect
investment requirements to service such agreements.
The ferry charter market and newbuildings
DFDS charters mainly freight ferries for varying periods.
Such charters are subject to price fluctuations (charter
rates) and to risks concerning availability of ferries that fit
route requirements. Similar risks, including counterparty
risks, are relevant when chartering out excess capacity.
In addition, there is a price risk related to the timing
of acquiring or ordering ferries. In connection with the
ordering of ferries, there is a default risk related to the
yards constructing the ferries, which can lead to additional
costs, including delays.
Our markets can be
impacted by changes
in local and regional
competition, such as
the opening or closing
of competing routes
and capacity increases
on existing competing
routes
Our markets can be
impacted by changes
in local and regional
competition, such as
the opening or closing
of competing routes
and capacity increases
on existing competing
routes
Management review
DFDS Annual Report 2020
45
Due to the ongoing process of replacing and renewing the
fleet, the sale of ferries or the cancellation of newbuilding
contracts may result in gains or losses and costs that
cannot be anticipated in annual profit forecasts.
It takes around two years or more from the time of
ordering a ferry newbuilding to its delivery. The period
depends on the complexity of the newbuilding. During such
a period markets may change significantly and the need for
additional capacity may have declined. Such risks can be
mitigated by having an option available to redeliver a ferry
that matches the planned delivery of a newbuilding.
Risks associated with business
development and investments
DFDS’ growth strategy entails business development and
investment risks. This is related to both organic growth
from investment in ferries and growth driven by the
opening of new ferry routes, new logistics activities, acqui
-
sition of companies and activities. The most pervasive risk
associated with organic growth is related to the expansion
of capacity on a route by deployment of larger ferries.
The acquisition of companies and activities involves
significant risks that are linked to the size of the invest
-
ment and the complexity of a subsequent integration
process. Risks associated with business development
ventures are managed by thorough planning and deci
-
sion-making processes governed by internal policies and
guidelines for investment decisions, including a required
rate of return on investments.
Operational, security and environmental risks
The main operational risks are associated with ferries and
other ships, port terminals as well as road and rail transport
of freight. Technical incidents and accidents may lead to
physical harm to employees and employees of business
partners, unplanned periods in dock for ships, interruption
of sailing schedules, and loss of revenue. Replacement
tonnage can usually be deployed at short notice through
chartering. In order to minimise operational risks, DFDS has
a systematic and comprehensive maintenance programme
in place for the fleet, including regular docking schedules. In
addition, extreme weather conditions can cause delays and
cancellations, and strikes in ports can also disrupt services.
In the course of ordinary operations, DFDS deploys freight
and passenger ferries, port terminals, warehouses and
cargo-carrying equipment, all of which are subject to the
usual safety risks associated with such equipment. These
risks are controlled and minimised partly through compli
-
ance with safety requirements and routines, as well as
preventative work, and partly through insurance against risk.
More information on health and safety is available from
www.dfds.com/group/about/responsibility.
Environmental and safety measures are based on
DFDS’ environmental and safety policies, as well as rules
and regulations and customer requirements. Changes in
these factors can increase costs. The Group is insured
against personal injury and environmental risks in line
with industry standards, and participates in preparatory
legislative procedures through industry organisations.
It is widely acknowledged that the climate is changing.
This is increasing climate risks, for example more volatile
weather such as storms or floodings. In particular for DFDS,
ferry operations are exposed to strong winds and other
weather phenomena that can lead to cancellation of depar
-
tures and entail loss of revenue and/or extra costs. Such
impacts could rise in the future if weather patterns become
more volatile. Further legislation to mitigate or reduce
harmful impacts on the environment could be adopted in
the future. This could include costs in the form of taxes or
duties as well as limitations on activities that could have
negative financial impacts.
The EU is expected to propose the martime industry is
included in ETS (European Emissions Scheme) in the first half
of 2021 with effect from 2022 or 2023. Introduction of such
a scheme would entail that part or all of DFDS’ emission
of CO
2
from ferries is subject to this system. A number of
elements regarding implementation need to be clarified such
as scope, free allowances, baselines and financial implica
-
tions. It is therefore not yet possible to assess the potential
consequences of ETS for DFDS and our stakeholders.
The ambition of DFDS’ climate action plan is to become
climate neutral in 2050. This may entail considerable
changes in the fleet as fossil fuel based technology is
replaced with sustainable technology. At some point in this
process, ferries using fossil fuels could become obsolete.
Due to freight ferries’ estimated lifetime of around 35
years and 45 years for passenger cruise ferries, it is envis
-
aged that the replacement process will be gradual over the
next thirty years, also bearing in mind that it requires 1-3
years to build a new ferry.
Digital and technology disruption
New digital business models or platforms are emerging
within the transport and logistics industry. Such platforms
primarily seek to digitise the intermediary role between
manufacturers and end users that today is managed by
freight forwarders and transport service providers. To
compete with such platforms, DFDS is developing digital
solutions for freight customers and monitoring changes
In order to minimise
operational risks,
DFDS has a systematic
and comprehensive
maintenance programme
in place for the fleet,
including regular docking
schedules
Management review
DFDS Annual Report 2020
46
in the business environment closely in order to protect
activities and pursue business development opportunities.
Platforms for booking of ferry trips by consumers are
available today. Commissions are paid to such platforms
for bookings. To compete with such platforms, DFDS is
further developing digital solutions for passenger bookings
and monitoring changes in the business environment
closely in order to protect activities and pursue business
development opportunities.
There are no perceived imminent digital threats related
to ferry route and logistics operations as such. In the longer
term, DFDS’ current business model could be disrupted
by new, evolving technologies for autonomous vehicles,
vessels and terminals, as well as artificial intelligence (AI),
internet of things (IoT) and automation.
DFDS has in recent years invested in in-house capabilities
in such technologies, partly to monitor and counter risks
posed by such new technologies and business models, and
partly to be able to develop own solutions based on such
technologies to pursue possible business opportunities.
IT risks
Disruptions to critical systems through breakdowns or virus
and other cyberattacks can have a significant negative
impact on commercial operations and thereby earnings. The
scope of such risks is reduced by increasing investments in
cyber security measures, constant monitoring of systems,
installation of back-up systems and having proven proce
-
dures in place to restore functionality of systems.
Information security risks are related to the handling of
data for passengers and freight customers. Such risks are
mitigated by internal controls and adherence to rules and
regulations governing information security.
Political and legal risks
DFDS’ activities are impacted by changes in rules and regu-
lations governing the ferry, shipping and transport sectors,
as well as changes in conditions that impact infrastruc
-
tures in Europe and Turkey. In addition to political bodies,
DFDS is subject to International Maritime Organization
(IMO) conventions. The IMO is the UN body responsible for
maritime issues, primarily safety and environment.
Changes in the above rules and regulations can have
negative financial consequences, including higher costs
and entail changes in the travel patterns of passengers and
routing of freight, including the distribution of volumes
between sea and land transport.
The EU and the UK entered into a new trade agreement
in December 2020 with effect from 1 January 2021. As the
deal was finalised just days before its implementation, all
parties involved in trading between the EU and the UK have
experienced a number of issues with application of the new
rules. It is too early to assess how the new agreement will
impact trading volumes between the EU and the UK. There
is a risk that the new rules will reduce volumes, including
reassessment and relocation of supply chains by manufac
-
turing and other companies.
The new trade agreement entails additional paperwork
and border inspections. DFDS has therefore established a
full service customs clearance offering to customers and
income from this enterprise may mitigate possible adverse
impacts of the trade agreement. In addition, duty-free sales
have resumed on passenger ferry routes and this may also
provide some mitigation.
Other possible changes concern taxation arrangements
for staff at sea, the abolition of duty-free sales on ferry
Around 90% of the
bunker consumption is
commercially hedged in
‘normal’ years through
bunker clauses (BAF:
bunker adjustment
Operating profit before
depreciation, EBITDA,
and special items
decreased 25% in 2020
to DKK 2,732m.
DFDS is subject to
International Maritime
Organisation (IMO)
conventions. The IMO is
the UN body responsible
for maritime issues,
primarily safety and
environment.
trips from Norway if the country were to join the EU,
cancellation of applicable VAT exemptions and changes to
tonnage tax schemes. DFDS monitors these issues actively,
including participation in industry organisations.
Bunker risk
The cost of bunker was DKK 1.3bn in 2020 and DKK 1.0bn
net of income from bunker surcharges. Around 90% of the
bunker consumption is commercially hedged in ‘normal’
years through bunker clauses (BAF: bunker adjustment
factor) in freight customer contracts. Hedging of USD is
included in the BAF. The BAF-coverage lags the actual cost
by 1-2 months as the surcharge is adjusted on a monthly
basis through the year. The remaining consumption is
consumed on passenger routes and financially hedged as
deemed appropriate.
In 2021, the consumption of bunker by the ferry fleet
is expected to amount to around 750,000 tons. Part of
the bunker consumption on passenger routes is financially
hedged. A price change of 10% compared to the price level
at year-end 2020 is expected to impact operating profit by
around DKK 5.1m in 2021.
Financial risks
DFDS is exposed to a range of financial risks related
primarily to changes in exchange rates and interest
rates. DFDS is also exposed to liquidity risks in terms of
payments and counterparty risk. These risks are reported in
Note 4.1 on pages 95-98.
Management review
DFDS Annual Report 2020
47
The DFDS share
and shareholders
Share capital
DFDS has one class of shares. The share capital at the end
of 2020 was DKK 1,173m comprising 58,631,578 shares,
each with a nominal value of DKK 20. There were no
changes to the share capital during 2020.
Stock exchange trading
The DFDS share is listed on Nasdaq Copenhagen where
32.9m DFDS shares were traded in 2020 equal to an annual
turnover of DKK 7.0bn compared to DKK 7.6bn in 2019.
The average number of trades per day was 1,196 compared
to 1,145 in 2019 and the average daily turnover was DKK
28m compared to DKK 30m in 2019. The DFDS share is part
of the Large Cap index.
Share price development and yield
DFDS’ share price was DKK 275 at year-end 2020, a decrease
of 15% compared to year-end 2019. The market value at
the end of 2020 was DKK 15.8bn, excluding treasury shares.
By comparison, the Danish stock market’s all-share index
increased 29% in 2020.
Share price decreased
15% in 2020
Dividend cancelled due
to negative impact
of Covid-19
The divergence in the development between the DFDS share
and the all-share index was, among other things, due to the
significant negative impact of Covid-19 on the passenger
ferry market that DFDS is part of.
The total distribution yield on the DFDS share was 0% in
2020 as no capital was distributed to shareholders due to the
extraordinary negative impact of Covid-19 on earnings in 2020.
Distribution policy
The starting point for determining the level of capital distri-
bution to shareholders is the current and expected future
financial leverage measured as the ratio between NIBD and
EBITDA. Target leverage is a ratio between 2.0 and 3.0. NIBD/
EBITDA was 4.2 at the end of 2020.
It is preferred to pay dividend semi-annually to facilitate
a faster return of capital to shareholders and to align
payments with DFDS’ seasonal cash flow that peaks during
the third quarter, the high season for passenger travel.
Capital is distributed through dividend and share
buybacks. The latter instrument is preferred for distribution
of excess capital while dividend is preferred to be ongoing
Investor relations
Søren Brøndholt Nielsen
VP, Corporate Communica
-
tions & IR
+45 33 42 33 59
udsbn@dfds.com
Shareholder’s secretariat
shareholder@dfds.com
Management review
DFDS Annual Report 2020
48
and sustainable. Whether capital is excess is assessed based
on the leverage target and future investment requirements.
Distribution to shareholders in 2020
Due to the extraordinary negative impact on earnings in 2020
from Covid-19, it became necessary to safeguard the financial
position. It was therefore decided by the annual general meeting
(AGM) that no dividend was paid in 2020.
Dividend proposal
The Board of Directors proposes to the 2021 AGM that no
dividends are paid in 2021 due to the continued safeguarding
of the financial position. The financial leverage is, all else
being equal, expected to decrease during 2021.
Shareholders
At the end of 2020, DFDS had 22,152 registered shareholders
who owned 95% of the share capital. International share
-
holders owned 30% (2019: 34%) of the total registered share
capital. The Lauritzen Foundation was the largest shareholder
with a holding of 42% of the total share capital at the end of
2020 compared to 41% at the end of 2019.
Investor Relations
The aim of investor relations (IR) is to facilitate an ongoing
dialogue with the financial community, primarily institutional
investors and analysts. Key events during the year are quarterly
reports, conference calls and roadshows to present strategic and
financial results. In addition, management and IR participate at
investor conferences, roadshows and meetings with investors
and analysts in between quarters. Due to Covid-19, roadshows
and meetings were mostly virtual in 2020. There is a silent
period of four weeks prior to the release of quarterly reports.
DFDS is currently covered by six equity analysts. Reports on this link,
investor presentations and a range of other information are available.
Announcements made in 2020 are available from this link
Share related key figures
2020 2019 2018 2017 2016
Share price, DKK
Price at year-end 275 325 262 331 323
Price high 325 332 421 415 360
Price low 134 215 239 321 211
Market value year-end, DKK m 15,790 18,593 14,990 18,106 18,405
No, of shares year-end, m 59 59 59 57 60
No, of circulating shares year-end, m 57 57 57 55 57
Distribution to shareholders, DKK m
Dividend paid per share, DKK 0 4.00 4.00 10.00 6.00
Total dividend paid ex, treasury shares 0 229 219 555 349
Buyback of shares 0 0 190 1,106 914
Total distribution to shareholders 0 229 409 1,661 1,263
FCFE yield, % 2.8 -0.8 -15.2 6.1 7.5
Total distribution yield, % 0 1.2 2.7 9.2 6.8
Cash payout ratio, % 0 -151.7 -17.9 150.7 91.4
Shareholder return
Share price change, % -15.3 24.0 -20.9 2.7 20.8
Dividend return, % 0 1.5 1.2 3.1 2.2
Total shareholder return, % -15.3 25.5 -19.6 5.8 23.1
Share valuation
Equity per share, DKK 183.4 179.6 160.5 120.7 116.3
Price/book value, times 1.5 1.8 1.6 2.7 2.8
Ownership structure, end of 2020
Lauritzen Foundation 42.4
Institutional shareholders 40.9
Other registered shareholders 10.0
Treasury shares 2.1
Non-registered shareholders 4.6
Total 100.0
With reference to §38 in the Danish Capital Markets Act, Lauritzen
Foundation domiciled in Copenhagen, Denmark, has notified DFDS A/S
that it holds more than 5% of the share capital and voting rights of the
company.
Shareholder distribution, end of 2020
No. of shares
No. of share-
holders
% of share
capital
1-50 9,525 0.5
51-500 9,899 3.1
501-5,000 2,400 5.3
5,001-50,000 252 5.9
50,001- 76 80.5
Total
* 22,152 95.4
* Total of registered shareholders
Management review
DFDS Annual Report 2020
49
Investor relations
Søren Brøndholt Nielsen, VP,
Corporate Communications & IR
T +45 3342 3359 / udsbn@dfds.com
Shareholder’s secretariat
shareholder@dfds.com
Analysts covering the DFDS share
ABG Sundal Collier
Casper Blom
T +45 3546 3015 / casper.blom@abgsc.dk
Carnegie
Dan Togo Jensen
T +45 3288 0245 / dan.togo@carnegie.dk
Danske Bank Markets
Michael Vitfell-Rasmussen
T +45 4512 8036 / vitf@danskebank.dk
Nordea
Marcus Bellander
T +45 5547 8967 / marcus.bellander@nordea.com
RBC Capital Markets
Ruairi Cullinane
T +44 207 002 2275 / ruairi.cullinane@rbccm.com
SEB Equities
Ulrik Bak
T +45 3328 3314 / ulrik.bak@seb.dk
DFDS share price and trading volume, 2020
Jan 20 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20
1 00
1 50
2 00
2 50
3 00
3 50
0
2 00
4 00
6 00
8 00
Ja n 20 Fe b 2 0 Mar 2 0 Ap r 20 May 2 0 Jun 20 Ju l 2 0 Au g 20 Se p 2 0 O ct 20 N ov 2 0 De c 2 0
(Share price, DKK)
(No. of shares, '000)
DFDS share price and trading volume, 2020
Trading volume Share price
Share price Trading wolume
350
300
250
200
150
100
800
600
400
200
0
No. of shares, ‘000 Share price, DKK
Share price performance relative to
Copenhagen all share index 2016-2020
200
150
100
50
0
2016 2017 2018 2019 2020
0
50
1 00
1 50
2 00
Share price performance relative to
Copenhagen all share index 2016-2020
DF DS Al l s ha re i nd e x N as da q C o pe nh ag en ( OMX C PI )
2016
2017 2018 2019 2020
DFDS All share index Nasdaq Copenhagen (OMXCPI)
Management review
DFDS Annual Report 2020
50
Financial review
Reporting structure
DFDS’ activities are organised in two divisions: Ferry
Division operates five business units and Logistics Division
operates three business units. Group Non-allocated items
consist of corporate costs not allocated to either division.
Each division also has Non-allocated items which mainly
include external charter activities in Ferry Division and an
equipment pool in Logistics Division.
Revenue
Reported revenue decreased 15.8% to DKK 13,971m in
2020. The decrease was due to the outbreak of Covid-19
that from mid-March reduced travel as restrictions were
introduced. Moreover, the initial lockdowns that were
applied reduced manufacturing and other activity which
led to a drop in the demand for freight services.
These events were also the main driver of a 20.7% or
DKK 2.5bn decrease in Ferry Division’s revenue to
DKK 9,678m. The decrease in passenger revenue was
DKK 1.7bn spread across three business units: Passenger,
Channel and Baltic Sea. The remaining decrease of
Investments of DKK 1.6bn
included DKK 0.9bn for
newbuildings
Year ended with strong
financial position
Covid-19 travel restrictions
lowered revenue 16%
to DKK 14.0bn
Drop in passenger earnings
decreased EBITDA 25%
to DKK 2.7bn
Freight earnings resilient
DKK 0.8bn was thus related to freight revenue. Half of
the decrease was due to lower revenue bunker surcharges
following a declining oil price. The other half was due to
the lower activity in Q2 caused by the Covid-19 lockdowns.
The negative impact on freight revenue was most severe
in the Mediterranean and North Sea business units that
have a large share of automotive customers as this sector
temporarily closed manufacturing plants.
Logistics Division’s revenue declined only 0.9% to
DKK 5,069m as a negative impact from Covid-19, also
mainly in Q2, was offset by revenue from two acquisitions
made in December 2019, one in Finland and one in the
Netherlands. The Finnish company was added to the Nordic
business unit and the Dutch company was added to the
Continent business unit. In May 2020, a smaller UK seafood
distribution company was acquired and added to the UK &
Ireland business unit.
In Q4 2020, freight revenue in both divisions increased
by a surge in volumes from stockbuilding in UK ahead of
Brexit.
Management review
DFDS Annual Report 2020
51
EBITDA before special items
Operating profit before depreciation, EBITDA, and special
items decreased 25% to DKK 2,732m.
Ferry Division’s EBITDA decreased 28% or DKK 922m to
DKK 2,332m as passenger earnings across three business
units dropped DKK 1,029m in 2020. Freight earnings thus
ended the year above 2019 as particularly earnings in Q4
2020 offset the negative impact from Covid-19 on earnings
in Q2 2020. The increase in freight earnings was driven by
the Mediterranean and Channel business units as the latter
benefited from the UK stockbuilding ahead of Brexit.
Logistics’ EBITDA increased 5% to DKK 445m mainly
driven by a positive full-year impact from the addition of
two acquired companies that both performed in line with
expectations set before Covid-19. This helped the Nordic
and Continent business units in total to increase EBITDA
compared to 2019 as the recurring activities overall were
negatively impacted by Covid-19, for example by a slow
-
down in the automotive industry. UK & Ireland performed
just above 2019 as good performance in parts of the
business unit was offset by negative impacts from Covid-
19, for example on the UK catering sector. In addition, a
provision of DKK 10m was made at the end of the year
related to a cold chain warehouse.
The Group cost of Non-allocated items increased to
DKK -45m from DKK -42m in 2019.
Depreciation, impairment and EBIT
Total depreciation and impairment decreased 1% to
DKK 1,873m. Depreciation was mainly lowered by the rede
-
livery of four chartered freight ferries that were capitalised
and depreciated according to IFRS 16. The chartered ferries
were replaced by fewer and larger owned freight ferries.
The net effect was a decrease in depreciation.
The Group’s EBIT before special items decreased 51%
to DKK 858m.
Special items and EBIT
Special items in 2020 was a net cost of DKK 117m. The
two largest cost items was DKK 102m related to adap
-
tation of the organisation to the effects of Covid-19 and
an impairment of DKK 100m related to the Oslo-Fred
-
erikshavn-Copenhagen route. These items were partly
offset by an accounting gain of DKK 110m on the sale of a
combined freight and passenger ferry. More information on
special items is available in Note 2.6 on page 76.
The Group’s EBIT after special items was DKK 741m, a
decrease of 55%.
Financing
The net cost of financing decreased 1% to DKK 275m
compared to 2019. There was a positive variance on
currency adjustments of DKK 17m while the net interest
cost increased DKK 13m. The latter was among other
things negatively impacted by costs related to a temporary
waiver of loan covenants.
Tax and the annual result
The ferry activities of the DFDS Group are covered by
tonnage tax schemes in Denmark, Norway, the Netherlands,
Lithuania, France, and Turkey. The tax on the annual profit
amounted to a total cost of DKK 24m. This included a tax
cost of DKK 48m for the year and an adjustment to prior
years that was a net income of DKK 24m.
The net annual result was DKK 442m, a decrease of
66% compared to 2019.
Operating profit before
depreciation, EBITDA,
and special items
decreased 25% in 2020
to DKK 2,732m
Revenue
DKK m 2020 2019 ∆ ∆ %
Ferry Division 9,678 12,197 -20.7 -2,519
Logistics Division 5,069 5,116 -0.9 -47
Eliminations etc. -776 -721 7.6 -55
DFDS Group 13,971 16,592 -15.8 -2,621
EBITDA before special items
DKK m 2020 2019 ∆ ∆ %
Ferry Division 2,332 3,254 -28.3 -922
Logistics Division 445 421 5.7 24
Non-allocated items -45 -42 7.1 -3
DFDS Group 2,732 3,633 -24.8 -901
EBITDA-margin, % 19.6 21.9 n.a.
-2.3
Management review
DFDS Annual Report 2020
52
Investments
Net investments in 2020 amounted to DKK 1,618m.
This included DKK 1,422m of ship investments of which
DKK 906m was used for ferry newbuildings, delivered and
on order, DKK 363m for upgrades and dockings and
DKK 153m for scrubbers. The cash flow from sale of ships
was positive by DKK 202m from the sale of a combined
freight and passenger ferry. The remaining investments of
DKK 398m were mainly related to port terminals, cargo
carrying equipment, software and other items.
Assets, invested capital and return
Total assets amounted to DKK 27.0bn at the end of the
year which was on level with 2019.
Net working capital was DKK 132m at the end of 2020
compared to DKK 417m at the end of 2019. Net working
capital was decreased in both divisions with the largest
decrease achieved in the Mediterranean business unit as
trade receivables from a major customer were reduced.
At year-end 2020, the invested capital had decreased
2% to DKK 22.1bn from year-end 2019 mainly due to a
reduction of the working capital and fewer leased assets.
The former was partly reduced by extended payment
terms on VAT and taxes related to Covid-19 compensation
programs. A focused effort on collection of outstanding
accounts receivable also reduced the working capital.
Calculated as an average, the invested capital increased
8% to DKK 22.5bn in 2020.
In 2020, the return on invested capital, ROIC, was 3.0%
and 3.5% adjusted for special items.
EBITDA before special items per quarter
DKK m
Revenue and invested capital
DKK bn
1,400
1,200
800
400
0
Q1 Q2 Q3 Q4
2018 2019 2020
Turnover rate, invested capital Average invested capital Revenue
24
20
16
12
8
4
0
2.0
1.8
1.4
1.2
1.0
0.6
0.4
0
2016 2017 2018 2019 2020
Times
Management review
DFDS Annual Report 2020
53
Financing and capital structure
At year-end 2020, interest-bearing debt was DKK 12.8bn
which was on level with year-end 2019. These amounts
included lease liabilities of DKK 3.1bn and DKK 2.9bn in
2019 and 2020, respectively.
In 2020, bank loans and mortgaged ship loans amounted
to 69% of interest-bearing debt while lease liabilities
amounted to 22% and corporate bonds amounted to 9%.
Net interest-bearing debt decreased 5% to DKK 11.4bn at
year-end 2020 and the ratio of net interest-bearing debt to
EBITDA before special items was 4.2 compared to 3.3 at the
end of 2019.
Cash flow
The gross cash flow from operations was DKK 2,769m and
DKK 2,090m including payment of lease liabilities and lease
interest. Following a cash flow from investment activities
of DKK -1,618m, the free cash flow (FCFF) was positive by
DKK 1,155m and by DKK 475m including payment of lease
liabilities and lease interest.
The cash flow from financing activities was negative by
DKK 458m in 2020, including payment of lease liabilities of
DKK 602m and net proceeds of DKK 201m from loan financing.
The net cash flow of 2020 was DKK 424m and cash and
cash equivalents increased to DKK 1,261m at year-end.
Impairment test
Based on the impairment tests performed in 2020 of the
Group’s non-current intangible and tangible assets, impair
-
ments were made on assets deployed by the Oslo-Frederiks-
havn-Copenhagen route of DKK 100m and on a freight ferry
held for sale of DKK 29m. The impairment tests are described
in greater detail in Note 3.1.5 on pages 87-88.
Equity
Equity amounted to DKK 10,600m at year-end 2020,
including non-controlling interests of DKK 89m. This was
an increase of 2% compared to year-end 2019. Total
comprehensive income for 2020 was DKK 236m. There
were no material transactions with owners in 2020.
The equity ratio was 39% at year-end 2020 which was
on level with year-end 2019.
Parent company key figures
The revenue of the parent company, DFDS A/S, was
DKK 7,385m in 2020 and the profit before tax was
DKK 135m. Total assets at year-end amounted to
DKK 17,236m and the equity was DKK 9,382m.
Capital structure
%-share of invested capital
Adjusted free cashflow, FCFF
DKK bn
100
75
50
25
0
2.0
1.5
1.0
0.5
0
-0.5
-1.0
-1.5
-2.0
-2.5
2016 2017 2018 2019 2020
2016 2017 2018 2019 2020
Equity and deferred tax Net interest-bearing debt
Management review
DFDS Annual Report 2020
54
Corporate governance
summary
Revised remuneration
policy proposal
DFDS is compliant
with all Danish
corporate governance
recommendations
Five of the six appointed
directors are independent
and two are female
The composition of the
Board of Directors aims to
ensure that competencies
that are key to the
company’s performance
are represented
Management review
DFDS Annual Report 2020
55
More information on DFDS’
corporate governance is
available from
link
Statutory report on
corporate governance
link
DFDS’ statutes
link
Materials from DFDS’
most recent AGM
link
Remuneration policy
link
Diversity policy
link
Management review
DFDS Annual Report 2020
56
Board of Directors and Executive Board
Claus V. Hemmingsen
Chair
Jesper Hartvig Nielsen
Board member (staff
representative)
Lars Skjold-Hansen
Board member (staff
representative)
Dirk Reich
Board member
Marianne Dahl Steensen
Board member
Jens Otto Knudsen
Board member (staff
representative)
Anders Götzsche
Board member
Klaus Nyborg
Vice Chair
Torben Carlsen
President & CEO
Jill Lauritzen Melby
Board member
Jesper
Lars
Dirk
Marianne
Jens
Anders
Klaus
Torben
Karina
Jill
Claus
Executive Board
Torben Carlsen
President & CEO
Karina Deacon
CFO
Board of Directors
Claus V. Hemmingsen
Chair
Klaus Nyborg
Vice Chair
Anders Götzsche
Board member
Jens Otto Knudsen
Board member
(staff representative)
Jill Lauritzen Melby
Board member
Jesper Hartvig Nielsen
Board member
(staff representative)
Dirk Reich
Board member
Lars Skjold-Hansen
Board member
(staff representative)
Marianne Dahl
Board member
Management review
DFDS Annual Report 2020
57
Board of Directors
Claus V. Hemmingsen
(1962)
Chair / 3,336 shares
Position: Managing director, CVH
Consulting Aps
Joined the board: 29 March 2012
Re-elected: 2013-2020
Period of office ends: AGM 2021
Chair of the Nomination
and Remuneration Committees
Board meeting participation: 10/10
Committee participation: 6/6
Chair: Maersk Drilling (The
Drilling Company of 1972 A/S),
HusCompagniet A/S
Board member: A.P Møller Holding
A/S, A.P. Møller og Hustru Chastine
Mc-Kinney Møllers Fond til Almene
Formaal, Den A.P. Møllerske
Støttefond, Bacher A/S, Maersk
Mc-Kinney Moller Center for Zero
Carbon Shipping, Global Maritime
Foundation, Det Forenede Dampskibs-
Selskabs Jubilæumsfond
The Board of Directors is of the opinion
that Claus V. Hemmingsen possesses
the following special competences:
International management experience
and expertise in offshore activities
and shipping. : Extensive international,
commercial and managerial experience
and expertise in offshore oil & gas
and shipping industries, incl. HSSE &
Sustainability, M&A, capital markets
and non-executive directorships.
Klaus Nyborg
(1963)
Vice Chair / 0 shares
Position: Managing director,
Return ApS
Joined the Board: 31 March 2016
Re-elected: 2017-2020
Period of office ends: AGM 2021
Member of the Nomination and
Remuneration Committees
Board meeting participation: 10/10
Committee participation: 6/6
Chair: Dampskibsselskabet Norden
A/S, A/S United Shipping & Trading,
Bawat A/S, Moscord Pte. Ltd.,
Singapore and Chairman of The
Investment Committee of Maritime
Investment Fund I K/S and Fund II K/S
Deputy Chair: Bunker Holding A/S,
Uni-Tankers A/S, Uni-Chartering A/S
Board member: Karen og Poul F.
Hansens Familiefond, Norchem A/S,
X-Press Feeders Ltd Singapore.
The Board of Directors is of the
opinion that Klaus Nyborg possesses
the following special competences:
International management and
board experience from i.a. listed
shipping companies and suppliers to
the shipping industry, and expertise
in strategy, M&A, finance and risk
management.
Marianne Dahl
(1974)
Board member / 1,817 shares
Position: Vice President, Microsoft
Western Europe
Joined the Board: 21 March 2017
Re-elected: 2018-2020
Period of office ends: AGM 2021
Member of the Nomination and
Remuneration Committees
Board meeting participation: 9/10
Committee participation: 6/6
Board member: TDC
The Board of Directors is of the
opinion that Marianne Dahl possesses
the following special competences:
International management experience
and expertise within strategy,
digitalisation, product development
and sales.
Anders Götzsche
(1967)
Board member / 3,500 shares
Position: Executive Vice President and
CFO, H. Lundbeck A/S
Joined the Board: 19 March 2018
Re-elected: 2018-2020
Period of office ends: AGM 2021
Chair of the Audit Committee
Board meeting participation: 8/10
Committee participation: 6/6
Chair: Rosborg Møbler A/S
Board member and Chair of Audit
Committee:
Obsidian Therapeutics Inc
The Board of Directors is of the opinion
that Anders Götzsche possesses
the following special competences:
International management and board
experience, expertise in finance and
accounting as well as M&A.
Jens Otto Knudsen
(1958)
Board member (staff representative)
130 shares
Joined the Board: 13 April 2011
Re-elected: 2012-2019
Period of office ends: AGM 2022
Board meeting participation: 10/10
Jens Otto Knudsen has no managerial
or executive positions in other
companies.
Jill Lauritzen Melby
(1958)
Board member / 4,735 shares
Position: Team Leader Finance,
BASF A/S
Joined the Board: 18 April 2001
Re-elected: 2002-2020
Period of office ends: AGM 2021
Member of the Audit Committee
Board meeting participation: 10/10
Committee participation: 6/6
Jill Lauritzen Melby has no managerial
or executive positions in other
companies.
The Board of Directors is of the opinion
that Jill Lauritzen Melby possesses
the following special competences:
Expertise in financial control
Due to family relations to the
company’s principal shareholder,
Lauritzen Fonden, Jill Lauritzen Melby
cannot be considered independent
according to the Recommendations on
Corporate Governance.
Jesper Hartvig Nielsen
(1975)
Board member (staff representative)
230 shares
Joined the Board: 19 March 2018
Re-elected: 2019
Period of office ends: AGM 2022
Board meeting participation: 10/10
Jesper Hartvig Nielsen has no
managerial or executive positions in
other companies
Lars Skjold-Hansen
(1965)
Board member (staff representative)
530 shares
Joined the Board: 22 March 2013
Re-elected: 2014-2019
Period of office ends: AGM 2022
Board meeting participation: 9/10
Lars Skjold-Hansen has no managerial
or executive positions in other
companies.
Dirk Reich
(1963)
Board member / 0 shares
Joined the Board: 1 July 2019
Re-elected: 2020
Period of office ends: AGM 2021
Member of the Audit Committee
Board meeting participation: 9/10
Committee participation: 6/6
Chair: Instafreight GmbH, Log-hub AG,
R+R Holding AG, R+R International
Aviation AG
Board member: Skycell AG, Imperial
Logistics Limited
The Board of Directors is of the
opinion that Dirk Reich possesses the
following special competences:
International management and board
experience, as well as expertise in
international logistics activities.
Board of Directors and Executive Board
As per 23 February 2021
Executive Board
Torben Carlsen
(1965)
President & CEO
123,850 shares
Appointed: 1 May 2019
(previously CFO since 1 June
2009)
Chair: Copenhagen Infrastructure
Partners, CI-II K/S, CI-III K/S & NMF
K/S, Chairman of the Investment
Committee; IV K/S and Fund II
K/S, Chairman of Limited Partner
Advisory Committees
Member: Maritime Investment
Fund I K/S and Fund II K/S,
Member of the Investment
Committee
Karina Deacon
(1969)
CFO / 1,456 shares
Appointed: 1 January 2020
Board member and Chair of
Audit Committee:
DOVISTA A/S
Management review
DFDS Annual Report 2020
58
Executive Management Team
Sitting (from left):
Peder Gellert Pedersen
(1958)
Executive Vice President, Ferry
Division
Ship broker, HD (O)
Employed by DFDS since 1994
Karina Deacon
(1969)
CFO
MSc (Aud)
Employed by DFDS since 2020
Standing (from left):
Niklas Andersso
n (1973)
Executive Vice President,
Logistics Division
Marketing, IHM Business School
Employed by DFDS since 2012
Anne-Christine Ahrenkiel
(1970)
Executive Vice President, Chief
People Officer
MSc (Scient. pol.), Bachelor in
French/Italian
Employed by DFDS since 2019
Rune Keldsen
(1979)
Executive Vice President, Chief
Technology Officer
MSc (IT)
Employed by DFDS since 2020
Torben Carlsen
(1965)
President & CEO
MSc (Finance)
Employed by DFDS since 2009
59 Management review
DFDS Annual Report 2020
Consolidated
Financial Statements
61 Income statement
62 Statement of comprehensive income
63 Balance sheet
64 Statement of changes in equity
66 Statement of cash flows
67 Notes
60 Consolidated Financial Statements
DFDS Annual Report 2020
Income statement 1 January – 31 December
DKK million Note 2020 2019
Revenue 2.1, 2.2 13,971 16,592
Costs: 2.3
Ferry and other ship operation and maintenance -2,569 -3,667
Freight handling -2,383 -2,521
Transport solutions -2,905 -2,994
Employee costs 2.4 -2,862 -3,077
Cost of sales and administration -520 -699
2,732 3,633
Share of profit/loss of associates and joint ventures -5 6
Profit on disposal of non-current assets, net 3.1.4 5 6
Amortisation, depreciation, and impairment losses on intangible-
and tangible assets and Right-of-use assets 2.5 -1,873 -1,894
858 1,751
Special items, net 2.6 -117 -101
741 1,650
Financial income 4.4 5 6
Financial costs 4.4 -280 -284
Profit before tax 466 1,371
Tax on profit 2.7 -24 -59
Profit for the year 442 1,313
Profit for the year is attributable to:
433 1,309
Non-controlling interests 9 4
Profit for the year 442 1,313
1)
The Board of Directors propos-
es to the 2021 Annual General
Meeting that no dividends are
paid in 2021.
2)
Due to the reduced opera-
tional and financial visability
caused by Covid-19 the
Annual General Meeting held
on 4 June 2020 decided not to
pay out the proposed dividend
of DKK 4.0 for the financial
year 2019.
4.8
7.56 22.88
7.56 22.80
Proposed profit appropriation
Proposed dividend
: DKK 0.0 per share)
DKK million Note 2020 2019
61 Consolidated Financial Statements
DFDS Annual Report 2020
Statement of comprehensive income 1 January – 31 December
DKK million Note 2020 2019
Profit for the year 442 1,313
Other comprehensive income
Items that will not subsequently be reclassified to the Income statement:
Remeasurement of defined benefit pension obligations 3.2.4 -59 106
Items that will not subsequently be reclassified to the Income statement -59 106
Items that are or may subsequently be reclassified to the Income statement:
Value adjustments of hedging instruments for the year -103 169
Value adjustment transferred to operating costs 6 12
Value adjustment transferred to financial costs 17 20
Value adjustment transferred to non-current tangible assets -38 -113
Tax on items that are or may be reclassified to the Income statement 2.7 9 -15
Foreign exchange adjustments, subsidiaries -37 42
Items that are or may subsequently be reclassified to the Income statement -147 116
-206 222
236 1,535
227 1,530
Non-controlling interests 9 5
236 1,535
62 Consolidated Financial Statements
DFDS Annual Report 2020
Assets
DKK million Note 2020 2019
Goodwill 3,434 3,440
Port Concession rights 1,096 1,144
Other non-current intangible assets 77 84
Software 239 241
Development projects in progress 55 25
Non-current intangible assets 3 .1 .1 4,901 4,934
Land and buildings 183 201
Terminals 720 741
Ferries and other ships 11,220 10,950
Equipment, etc. 723 742
Assets under construction and prepayments 887 1,034
Non-current tangible assets 3.1.2 13,734 13,669
Right-of-use assets 3,133 3,337
Non-current Right-of-use assets 3.1.3 3,133 3,337
Investments in associates, joint ventures and securities 49 53
Receivables 3.2.1 17 29
Prepaid costs 337 129
Deferred tax 2.7 57 47
Derivative financial instruments 4.2 76 242
Other non-current assets 536 500
Non-current assets 22,304 22,440
Inventories 3.2.2 169 219
Receivables 3.2.1 2,631 2,878
Prepaid costs 309 336
Derivative financial instruments 4.2 149 75
Cash 1,261 840
Current assets 4,520 4,347
Assets classified as held for sale 3.1.6 182 76
4,702 4,423
27,006 26,863
Equity and Liabilities
DKK million Note 2020 2 019
Share capital 4.7 1,173 1,173
Reserves -273 -120
Retained earnings 9,611 8,988
Proposed dividend 0 235
10,511 10,276
Non-controlling interests 89 80
4.6 10,600 10,356
Interest-bearing liabilities 4.5 11,720 11,742
Deferred tax 2.7 217 213
Pension and jubilee liabilities 3.2.4 197 160
Other provisions 3.2.5 46 47
Derivative financial instruments 4.2 149 69
Non-current liabilities 12,329 12,231
Interest-bearing liabilities 4.5 934 1,032
Trade payables 2,090 2,292
Other provisions 3.2.5 78 38
Corporation tax 61 30
Other payables 3.2.3 725 690
Derivative financial instruments 4.2 52 19
Prepayments from customers 136 172
Current liabilities 4,077 4,275
Liabilities 16,406 16,506
27,006 26,863
63 Consolidated Financial Statements
DFDS Annual Report 2020
Statement of changes in equity 1 January – 31 December 2020
Reserves
DKK million Share capital
reserve
Hedging
reserve
shares
Retained
earnings
Proposed
dividend
attributable to
equity holders
Non-
controlling
interests
Equity at 1 January 2020
Comprehensive income for the year
Profit for the year
Other comprehensive income
Items that will not subsequently be reclassified to the Income statement:
Remeasurement of defined benefit pension obligations
-59
-59 -59
Items that will not subsequently be reclassified to the Income statement 0 0 0 0 -59 0 -59 0 -59
Items that are or may subsequently be reclassified to the Income statement:
Value adjustments of hedging instruments for the year
-103
-103 -103
Value adjustment transferred to operating costs
Value adjustment transferred to financial costs
Value adjustment transferred to non-current tangible assets
-38
-38 -38
Tax on items that are or may be reclassified to the Income statement
Foreign exchange adjustments, subsidiaries
-37
-37
-37
Items that are or may subsequently be reclassified to the Income statement 0 -37 -119 0 9 0 -147 0 -147
Acquisition, non-controlling interests
-1
Cancellation of proposed dividend at year-end 2019
Vested share-based payments
Sale of treasury shares
Cash from sale of treasury shares related to exercise of share options
0 0 0 3 239 -235 8 -1 8
1,173 -394 147 -25 9,611 0 10,511 89 10,600
The Parent Company’s share capital, which is not divided
into different classes of shares, is divided into 58,631,578
shares of DKK 20 each. All shares rank equally. There are
no restrictions on voting rights. The shares are fully paid up.
The Board of Directors proposes to the 2021 Annual Gener-
al Meeting that no dividends are paid in 2021.
1)
Due to the reduced opera-
tional and financial visability
caused by Covid-19 the
Annual General Meeting held
on 4 June 2020 decided not to
pay out the proposed dividend
of DKK 4.0 for the financial
year 2019.
64 Consolidated Financial Statements
DFDS Annual Report 2020
Statement of changes in equity 1 January – 31 December 2019
Reserves
DKK million Share capital
reserve
Hedging
reserve
shares
Retained
earnings
Proposed
dividend
attributable to
equity holders
Non-
controlling
interests
Equity at 1 January 2019 1,173 -398 177 -29 8,019 235 9,175 80 9,255
Change in accounting policies
-231 -231 -1 -232
1,173 -398 177 -29 7,788 235 8,944 79 9,022
Comprehensive income for the year
Profit for the year 1,309 1,309 4 1,313
Other comprehensive income
Items that will not subsequently be reclassified to the Income statement:
Remeasurement of defined benefit pension obligations 106 106 106
Items that will not subsequently be reclassified to the Income statement 0 0 0 0 106 0 106 0 106
Items that are or may subsequently be reclassified to the Income statement:
Value adjustments of hedging instruments for the year 169 169 169
Value adjustment transferred to operating costs 12 12 12
Value adjustment transferred to financial costs 20 20 20
Value adjustment transferred to non-current tangible assets -113 -113 -113
Tax on items that are or may be reclassified to the Income statement - 15 -15 -15
Foreign exchange adjustments, subsidiaries 42 42 1 42
Items that are or may subsequently be reclassified to the Income statement 0 42 89 0 -15 0 115 1 116
0 42 89 0 91 0 221 1 222
0 42 89 0 1,399 0 1,530 5 1,535
Dividend paid -229 -229 -3 -232
Dividend on treasury shares 6 -6 0 0
Proposed dividend at year-end -235 235 0 0
Vested share-based payments 25 25 25
Cash from sale of treasury shares related to exercise of share options 1 6 7 7
Other adjustments -1 -1 -1
0 0 0 1 198 0 -197 3 -201
1,173 -357 266 -28 8,988 235 10,276 80 10,356
The Parent Company’s share capital, which is not divided
into different classes of shares, is divided into 58,631,578
shares of DKK 20 each. All shares rank equally.
There are no restrictions on voting rights. The shares are
fully paid up.
1)
Impact from implementation
of IFRS 16.
65 Consolidated Financial Statements
DFDS Annual Report 2020
Statement of cash flows 1 January – 31 December
DKK million Note 2020
2,732 3,633
Cash flow effect from special items related to operating activities -125 -78
Adjustments for non-cash operating items, etc. 5.4 45 26
Change in working capital 5.4 148 -224
Payment of pension liabilities and other provisions -31 -52
Cash flow from operating activities, gross 2,769 3,304
Interest received, etc. 3 6
Interest paid, etc. -276 -266
Taxes paid 3 -46
Cash flow from operating activities, net 2,499 2,997
Investments in ferries and other ships including dockings, rebuildings and
ferries under construction (incl. settlement of forward exchange contracts
related thereto) -1,422 -2,120
Sale of ferries including prepayment received on ferry held for sale 202 117
Investments in other non-current tangible assets -195 -467
Sale of other non-current tangible assets 27 13
Investments in non-current intangible assets -70 -66
Acquisition of enterprises, associates, joint ventures and activities 5.5 - 14 -131
Other investing cash flows -146 4
Cash flow to/from investing activities, net -1,618 -2,651
Cash flow before financing activities, net 882 346
DKK million Note 2020
Proceed from bank loans and loans secured by mortgage
in ferries and other ships 4.3 1,992 1,658
Repayment and instalments on bank loans and loans secured by mortgage
in ferries and other ships 4.3 -1,791 -799
Proceed from issuance of corporate bonds 4.3 0 304
Repayment of corporate bonds incl. settlement of cross currency swap 4.3 0 -500
Payment of lease liabilities 4.3 -602 -706
Proceeds from sale of treasury shares 4.7 2 0
Acquisition of treasury shares 4.7 0 0
Cash received from exercise of share options 1 7
Other financing cash flows -60 -3
0 -229
Cash flow to/from financing activities, net -458 -268
Net increase/(decrease) in cash and cash equivalents 424 79
Cash and cash equivalents at 1 January 840 761
Foreign exchange and value adjustments of cash and cash equivalents -2 0
The statement of cash flows cannot directly be derived
from the Income statement and the Balance sheet.
At 31 December 2020 DKK
147m (2019: DKK 108m) of
the cash was deposited on
restricted bank accounts.
66 Consolidated Financial Statements
DFDS Annual Report 2020
Notes
1. Basis of preparation of the Consolidated Financial Statements ......
...........................71
2.1 Segment information ........................................72
2.2 Revenue ....................................................74
2.3 Costs .......................................................75
2.4 Employee costs .............................................75
2.5 Amortisation, depreciation and impairment losses for the year ....76
2.6 Special items, net ...........................................76
2.7 Tax .........................................................77
3. Invested Capital ..................................................
3.1 Invested Capital excl. Net Working Capital
3.1.1 Non-current intangible assets .........................80
3.1.2 Non-current tangible assets ...........................82
3.1.3 Leases ..............................................84
3.1.4 Profit on disposal of non-current assets ................87
3.1.5 Impairment testing ...................................87
3.1.6 Assets classified as held for sale ......................89
3.2 Net Working Capital
3.2.1 Receivables .........................................89
3.2.2 Inventories ..........................................90
3.2.3 Other payables ......................................90
3.2.4 Pension & jubilee liabilitites ...........................91
3.2.5 Other provisions .....................................94
4. Capital structure and finances ....................................
4.1 Financial and operational risks ...............................95
4.2 Information on financial instruments .........................99
4.3 Changes in liabilities arising from financing activities ..........100
4.4 Financial income and costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
4.5 Interest-bearing liabilities ...................................102
4.6 Equity ....................................................103
4.7 Treasury shares ............................................103
4.8 Earnings per share ..........................................103
5. Other notes ................................................... 104
5.1 Remuneration to Executive Board and Board of Directors ........105
5.2 Fees to Auditors appointed at the Annual General Meeting .....106
5.3 Share options ..............................................106
5.4 Cash flow ..................................................107
5.5 Acquisitions and sale of enterprises,
activities and non-controlling interests. . . . . . . . . . . . . . . . . . . . . . .108
5.6 Guarantees, collateral and contingent liabilities ..............110
5.7 Contractual commitments ..................................110
5.8 Related party transactions ..................................110
............................................111
5.10 Events after the balance sheet date .........................111
5.11 Company overview .........................................112
Invested capital
Invested Capital excl.
Net Working Capital
(Section 3.1)
Net Working Capital
(Section 3.2)
Corporate income
ROIC
67 Consolidated Financial Statements
DFDS Annual Report 2020
1. Basis of preparation of the Consolidated
Financial Statements
Consolidated Financial Statements
DFDS Annual Report 2020
In preparing the Annual Report, DFDS focuses on ensuring
that the content is relevant to the reader and that the
presentation is clear.
The purpose is to provide an overview of what drives
performance. The structure of the notes reflects DFDS’ fi-
nancial performance goal, ROIC, and the structure aims at
providing an enhanced understanding of each accounting
area by describing relevant accounting policies and any
significant accounting estimates and assessments related
thereto at the end of each note.
The accounting policies have been made within the frame-
work of the prevailing International Financial Reporting
the standard is not repeated in the notes. The description
of accounting policies in the notes forms part of the overall
description of DFDS’ accounting policies.
Basis of reporting
The 2020 Consolidated Financial Statements and Parent
-
pared on a going concern basis and in accordance with the
requirements for listed companies. The consolidated finan-
cial statements are also in accordance with IFRS as issued
impact on DFDS’s ability to continue as a going concern.
on passenger as well freight activities. In the second half
of 2020 the negative impact continued for the passenger
activities due to travel restrictions whereas the freight ac-
Brexit did not impact the financial statement negatively
for 2020.
On 23 February 2021, the Board of Directors and the Ex-
ecutive Management Board considered and approved the
at the ordinary Annual General Meeting on 23 March 2021.
Basis for preparation
The Consolidated Financial Statements and the Parent
Company Financial Statements are presented in Danish
currency.
The Consolidated Financial Statements and the Parent
Company Financial Statements are prepared according
to the historical cost convention except that derivatives
and financial instruments classified as “Fair value through
Assets classified as held for sale are measured at the low-
er of the carrying amount before the changed presentation
and the fair value less costs to sell.
The accounting policies, set out below and in the notes,
have been used consistently in respect of the financial
year and to comparative figures.
Rounding
In general, rounding may cause variances in sums and per-
centages in the Annual report.
New International Financial Reporting Standards and Inter-
pretations
In 2020, the Group has adopted all relevant new and up-
dated accounting standards.
New standards and interpretations not yet adopted
The IASB has issued a number of new or amended stand-
ards and interpretations with effective date post 31 De-
cember 2020, some of which have not yet been endorsed
-
tations are not mandatory for the financial reporting for
2020. The Group expects to adopt the Standards and Inter-
pretations when they become mandatory.
None of the standards and interpretations are expected
to have a significant impact on recognition and measure-
ment.
DFDS’ Annual report is based on the concept of materiality
and relevance to ensure that the content is material and
relevant to the user. This objective is pursued by providing
relevant rather than generic descriptions and information.
When assessing materiality and relevance, due consid-
eration is given to ensure compliance with applicable
accounting legislation etc. and to ensure that the Consol-
idated Financial Statements and Parent Company Finan-
cial Statements give a true and fair view of the Group’s
and the Parent Company’s financial position at the bal-
ance sheet date and the operations and cash flows for the
financial year.
The Consolidated Financial Statements and the Parent
Company Financial Statements consist of many trans-
actions. These transactions are aggregated into classes
according to their nature or function and presented in
classes of similar items in the Financial Statements and
in the notes as required by IFRS. If items are individually
immaterial they are aggregated with other items of similar
nature in the statements or in the notes. The disclosure
requirements throughout IFRS are substantial and DFDS
provides these specific disclosures required by IFRS unless
the information is considered immaterial to the econom-
ic decision-making of the users of these Financial State-
ments or not relevant for the Group.
Subtotals and alternative performance measures
In the Annual report DFDS presents certain financial per-
formance measures such as subtotals and key figures
which are not required or defined under IFRS. It is consid-
ered that these alternative measures provide relevant
supplementary information for the stakeholders of DFDS.
Significant income and expenses which DFDS assesses
not to be directly attributable to the operating activities
or which are considered non-recurring are presented in the
Income statement in a separate line item labelled ‘Special
items’ in order to distinguish these items from other in-
come statement items. Reference is made to note 2.6 for
more details on Special items. The Income statement in-
cludes the subtotals ‘Operating profit before depreciation
-
fore special items’ as these are assessed to provide a more
transparent and comparable view of DFDS’ recurring oper-
ating profit. In note 2.6 it is disclosed how the line items in
the Income statement would have been affected if ‘Special
items’ had not been presented in a separate line item.
For definitions of key figures please refer to the section
‘Definitions’.
Significant accounting policies
Management considers the accounting policies for the
following areas as the most important for the Group: Con-
solidated Financial Statements; Business combinations;
Non-current intangible assets; Ferries and other ships;
Pension and jubilee liabilities; Deferred tax assets; Right-
of-use assets; Derivatives; Special items; Provisions and
contingencies. Accounting policies for Basis of consolida-
tion, Non-controlling interests and Translation of foreign
currencies are described below, while accounting policies
for the remaining areas are included in the notes to which
they relate.
Significant estimates
In the preparation of the Consolidated Financial State-
ments, Management undertakes several accounting es-
timates and assessments and makes assumptions which
provide the basis for recognition and measurement of the
assets, liabilities, revenues and expenses of the Group
and the Parent Company. These estimates assessments,
and assumptions are based on historical experience and
-
agement considers reasonable under the circumstances,
but which by their nature are uncertain and unpredictable.
The assumptions may be incomplete or inaccurate and un-
anticipated events or circumstances may occur, for which
reason the actual results may deviate from the applied
estimates, assessments, and assumptions.
In the opinion of Management, the following accounting es-
timates and assessments are significant in the preparation
of the Annual report: Impairment testing of goodwill and
other non-current intangible assets; Impairment testing of
ferries and other ships including the assessment of use-
ful life and scrap value; Purchase Price Allocation in con-
nection with acquisitions; Pension and jubilee liabilities;
Deferred tax assets; Leasing arrangements; Derivatives;
Provisions and contingencies.
1. Basis of preparation of the Consolidated Financial Statements
Consolidated Financial Statements
DFDS Annual Report 2020
Descriptions of the significant accounting estimates and
assessments are included in the notes to which they relate.
Basis of consolidation
The Consolidated Financial Statements includes the Par-
Parent Company controls the financial and operational
policies. Control is obtained when the Company directly
or indirectly holds more than 50% of the voting rights in
the enterprise (i.e. subsidiary) or if it, in some other way,
controls the enterprise. The Parent Company and these
subsidiaries are referred to as the Group.
Enterprises, which are not subsidiaries, over which the
Group exercises significant influence, but which it does
not control, are considered associates. Significant influ-
ence is generally obtained by direct or indirect ownership
or control of more than 20% of the voting rights but less
than 50%.
Enterprises which according to agreement are controlled
together with one or more other companies are considered
joint ventures.
The Consolidated Financial Statements are based on the
Parent Company and the subsidiaries and are prepared
by combining items of a uniform nature and eliminating
inter-company transactions, shareholdings, balances, and
inter-company gains and losses. The Consolidated Finan-
cial Statements are prepared by applying the Group’s ac-
counting policies.
Investments in subsidiaries are eliminated against the pro-
portionate share of the subsidiaries’ net asset value at the
acquisition date.
The Group’s investments in associates and joint ventures
are recognised in the Consolidated Financial Statements
at the Group’s proportionate share of the associate’s / joint
and losses from transactions with associates and joint
ventures are eliminated by the Group’s interest in the re-
spective associate/jointly controlled enterprise.
Non-controlling interests
In the Consolidated Financial Statements, the individual
financial line items of subsidiaries are recognised in full.
The non-controlling interests’ share of the results for the
year and of the equity of subsidiaries which are not whol-
ly-owned are included in the Group’s results and equity,
respectively, but are presented separately in the proposed
profit appropriation and the statement of changes in eq-
uity. If a non-controlling interest has a put option to sell
its ownership interest to DFDS, the fair value of the put
option is recognised as an interest-bearing liability which
means that the results for the year and equity attributable
to non-controlling interests are not presented separately
in the proposed profit appropriation and the Statement of
changes in equity.
Government Grants
Grants from the government are recognised at their fair
value where there is a reasonable assurance that the
grant will be received and the Group will comply with all
attached conditions. Government grants relating to costs
are deferred and recognised in profit or loss over the peri-
od necessary to match them with the costs that they are
intended to compensate.
Functional and presentation currency
Items included in the Financial Statements of each of the
Group’s enterprises are measured using the functional
currency of the primary economic environment in which
the enterprise operates. The Consolidated Financial State-
On initial recognition, foreign currency transactions are
translated into the functional currency using the exchange
rate prevailing at the date of transaction. Currency gains
and losses resulting from the settlement of these transac-
tions as well as from the translation at year-end exchange
rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the Income statement
as Financial income or cost except when deferred in equity
as qualifying for cash flow hedges.
Currency gains and losses on non-monetary items recog-
nised at fair value, such as securities measured at FVTPL,
are recognised in the same line item as the fair value gain
or loss.
Non-current assets acquired in foreign currency are trans-
lated at the exchange rate prevailing at the date of acquisi-
tion. Gains and losses on hedges relating to the acquisition
of non-current assets are recognised as part of the value of
the non-current asset at its initial recognition.
In the Consolidated Financial Statements, the Income
statement items of subsidiaries with a functional currency
different from DKK are translated at the average exchange
rate, while the balance sheet items are translated at the
exchange rates at the end of the reporting period.
Foreign exchange differences arising on translation of such
subsidiaries’ equity at the beginning of the reporting peri-
od to the exchange rates at the end of the reporting period
and on translation of the Income statements from average
exchange rates to the exchange rates at the end of the
reporting period are recognised in Other Comprehensive
Income and attributed to a separate translation reserve
under equity. The exchange rate adjustment is allocated
between the Parent Company’s and the non-controlling in-
terests’ shares of equity.
When disposing of 100%-owned foreign enterprises, ex-
change differences which have accumulated in Equity via
Other Comprehensive Income, and which are attributable
to the enterprise, are transferred from Other Comprehen-
sive Income to the Income statement together with any
gains or losses associated with the disposal.
-
tion) has introduced a single electronic reporting format
for the annual financial reports of issuers with securities
have been prepared in accordance with the ESEF taxono-
my, which is included in the ESEF Regulation and devel-
oped based on the IFRS taxonomy published by the IFRS
Foundation. The annual report submitted to the Danish
Financial Supervisory Authority (the Officially Appointed
with the technical files, all of which are included in the ZIP
Key figures
Key figures are calculated in accordance with the latest
version of the Danish Finance Society’s guidelines, ‘Recom-
mendations and Financial Ratios’. The key figures stated
in the overview with consolidated financial highlights are
defined on the ‘Definitions and Glossary’ page.
1. Basis of preparation of the Consolidated Financial Statements (continued)
70 Consolidated Financial Statements
DFDS Annual Report 2020
DKK million Note 2020
Revenue 2.1, 2.2 13,971 16,592
Costs
Ferry and other ship operation and maintenance 2.3
Freight handling
Transport solutions
Employee cost 2.4
Cost of sales and administration 2.3
2,732 3,633
Share of profit/loss from associates and joint ventures 6
Profit on disposal of non-current assets, net 3.1.4 5 6
Amortisation, depreciation and impairment losses on intangible assets and
tangible assets and Right-of-use assets 2.5
1,751
Special items, net 2.6
741 1,650
Corporate income tax on EBIT
3.0% 7.6%
3.5%
ROIC
(Section 2)
Corporate income tax is
calculated for each entity
within the Group following the
tax legislation and current tax
rate in each tax jurisdiction.
The amount for each entity
is then adjusted by the tax
effect from financial items
calculated following the tax
legislation and current tax
rate in each tax jurisdiction to
get corporate income tax on
EBIT. The amounts per entity
are then consolidated.
The decrease in ROIC com-
pared to 2019 is primarily
related to a decrease in Net
Operating Profit After Tax
(NOPAT) as a consequence of
the Covid-19 situation.
ratio to DFDS when measuring the financial perfor-
mance of our business. DFDS’ minimum return target
goal is a ROIC of at least 8.0%. The financial ambi-
tion of Win23 is to reach a return on invested capital
This section provides the notes of the main compo-
nents that forms the basis of Net operating profit
excludes the costs and tax benefit of debt financing
by measuring the earnings before interest and taxes
Together with invested capital, NOPAT forms the
basis of the ROIC calculation. Reference is made to
section 3.
Invested Capital excl.
Net Working Capital
(Section 3.1)
Invested Capital
(Section 3)
Net Working Capital
(Section 3.2)
71 Consolidated Financial Statements
DFDS Annual Report 2020
2.1 Segment information
The segments together with allocation of operating prof-
it, assets and liabilities etc. are identical with the internal
reporting structure of the Group. Management has defined
the Groups’ business segments based on the reporting
regularly presented to the Group Executive Management,
which also forms the basis for management decisions.
The costs of the segments are the directly registered costs
including a few systematically allocated indirect costs,
primarily concerning Group functions.
Non-allocated costs reflect the general functions which
cannot reasonably be allocated to the segments. The
costs consist primarily of costs concerning the Executive
Board and Board of Directors but also Group functions
such as Treasury, Investor Relation,s Legal, Procurement,
Communication, Finance, and depreciation on the Group’s
IT-systems etc. In addition, the elimination of transactions
between segments is included. Transactions between seg-
ments are concluded at arm’s length terms.
Segment assets include assets which are directly related
to the segment such as non-current intangible, non-cur-
rent tangible, other non-current and Right-of-use assets,
inventories, receivables, prepayments, cash in hand and at
bank. Segment liabilities include current and non-current
liabilities.
The Ferry Division’s activities are divided into five business
areas: North Sea, Baltic Sea, Channel, Mediterranean, and
Passenger.
Ferry Division operates ferry routes in and around Europe
transporting freight units, mainly trailers, and passengers.
The routes deploy a mix of freight ferries, freight and pas-
senger ferries as well as passenger cruise ferries. In addi-
tion, port terminals are owned and/or operated at strate-
gic hubs of the route network. The freight customers are
mainly forwarders and hauliers as well as manufacturers
of heavy industrial goods. The main passenger customer
groups are passengers travelling with own cars, mini cruise
passengers, tour operators, and business conferences.
The Logistics Division’s activities are divided into three
Logistics Division provides transport solutions for full- and
part loads as well as contract logistics solutions, including
warehousing. In addition, container ships, including vessel
sharing agreements with other container operators, are
operated. The customers are primarily manufacturers of
industrial goods and consumables as well as retailers.
DKK million 2020
Ferry
Logistics
Non-
allocated
External revenue 8,923 5,030 18 13,971
Intragroup revenue 755 39 474 1,269
Revenue 9,678 5,069 491 15,238
Operating costs, external
Intragroup operating costs
Operating profit before depreciation
2,332 445 2,732
Share of profit/loss of associates and joint ventures 0 0
Profit on disposal of non-current assets, net 0 4 0 5
Depreciation, amortisation and impairment losses on
other non-current assets
Special items, net
717 147 741
Financial items, net
Profit before tax 466
Tax on profit
Profit for the year 442
Capital expenditures of the year 1,518 82 75 1,675
Investments in associates and joint ventures 35 0 4 39
Assets held for sale, reference is made to note 3.1.6 182 0 0 182
Total assets excluding assets held for sale 22,480 2,500 1,843 26,824
Liabilities 11,577 1,025 3,804 16,406
72 Consolidated Financial Statements
DFDS Annual Report 2020
2.1 Segment information (continued)
DKK million
Ferry
Logistics
Non-
allocated
External revenue 11,475 5,095 21 16,592
Intragroup revenue 721 22 519 1,262
Revenue 12,197 5,116 540 17,853
Operating costs, external
Intragroup operating costs
and special items 3,254 421 3,633
Share of profit/loss of associates and joint ventures 6 0 0 6
Profit on disposal of non-current assets, net 2 4 0 6
Depreciation, amortisation and impairment losses on
other non-current assets
1,704 170 1,751
Special items, net
1,651 163 1,650
Financial items, net
Profit before tax 1,371
Tax on profit
Profit for the year 1,313
Capital expenditures of the year 2,368 330 71 2,769
Investments in associates and joint ventures 40 0 4 44
Assets held for sale, reference is made to note 3.1.6 76 0 0 76
Total assets excluding assets held for sale 22,414 2,687 1,687 26,787
Liabilities 12,213 896 3,398 16,506
Geographical breakdown
The Group does not have a natural geographic split on coun-
tries since the Group, mainly Ferry Division, is based on a
connected route network in primarily Northern Europe and
Mediterranean. The routes support each other with sales
and customer services located in one country whereas the
actual revenue is created in other countries. Consequently,
it is not possible to present a meaningful split of revenues
and non-current assets by country. The split is therefore
presented by the sea and geographical areas in which DFDS
operates. The geographical split of revenue is shown in the
revenue note. Reference is made to note 2.2.
The applied split results in seven geographical areas: North
-
land and Mediterranean. As a consequence of the Group’s
business model, the routes do not directly own the ferries,
but charter the ferries from a Group internal vessel pool.
The ferries are frequently moved within the Group’s routes.
Furthermore, certain non-current assets such as IT-soft-
ware and headquarter owned corporate assets are for the
benefit for the entire Group. It is therefore not possible to
meaningfully estimate the exact value of the non-current
assets per geographical area. Instead an adjusted alloca-
tion has been used.
DKK million
North
Sea
Baltic
Sea
Channel Continent
Medi-
terranean Nordic
UK/
Ireland
2020
Non-current assets 7,784 1,627 1,967 798 9,330 338 460 22,304
Non-current assets 7,004 2,393 2,015 922 9,476 198 432 22,440
The segment information has been compiled in con-
formity with the Group’s accounting policies, and is in
accordance with the internal management reports.
The Norwegian sideport
shipping activities have been
transferred from the Logistics
Division to the Ferry Division
per 1 January 2020. 2019
comparative figures have
been restated accordingly.
73 Consolidated Financial Statements
DFDS Annual Report 2020
The Norwegian sideport
shipping activities have been
transferred from the Logistics
Division to the Ferry Division
per 1 January 2020. 2019
comparative figures have
been restated accordingly.
DKK million
Ferry
Logistics
Non-
allocated
Geographical markets
North Sea
5,280 - 0 5,280
Baltic Sea 1,406 - 0 1,406
English Channel 2,632 - 0 2,632
Mediterranean 2,158 - 0 2,158
Continent - 2,349 0 2,349
Nordic
- 1,473 0 1,473
- 1,273 0 1,273
Other 0 0 21 21
11,475 21
Product and services
Seafreight and shipping logistics solutions
7,579 0 0 7,579
Transport solutions 23 5,072 0 5,094
Passenger seafare and on board sales 2,664 0 0 2,664
Terminal services
643 3 0 646
Charters including related income 347 0 0 347
Agency and other revenue 221 21 21 262
11,475 21
2.2 Revenue
DKK million 2020
Ferry
Logistics
Non-
allocated
Geographical markets
North Sea 3,692 - 0 3,692
Baltic Sea 1,207 - 0 1,207
English Channel 1,972 - 0 1,972
Mediterranean 2,052 - 0 2,052
Continent - 2,280 0 2,280
Nordic - 1,507 0 1,507
- 1,243 0 1,243
Other 0 0 18 18
5,030
Product and services
Seafreight and shipping logistics solutions 6,750 0 0 6,750
Transport solutions 24 4,981 0 5,005
Passenger seafare and on board sales 968 0 0 968
Terminal services 664 2 0 667
Charters including related income 317 0 0 317
Agency and other revenue 199 47 17 264
5,030
Revenue includes revenue recognised from contracts with
customers in accordance with IFRS 15 and other reve-
nue (leasing activities). Revenue from leasing activities
recognised at “a point in time”.
74 Consolidated Financial Statements
DFDS Annual Report 2020
2.3 Costs
DKK million 2020
Ferry and other ship operation and maintenance
Ferry and other ship cost including charter related cost 1,255 1,592
Bunker 1,314 2,075
3,667
When revenue from transport of passengers, freight
and from rendering terminal and warehouse services
etc is recognised as income, the related costs are rec-
ognised in the Income statement.
Ferry and other ship cost comprise costs of sales re-
lated to catering and maintenance and daily running
costs of ferries and other ships. Bunker consumption
includes hedging. Impairments and realised losses on
trade receivables are included in ferry and other ship
operation and maintenance.
Freight handling and Transport solutions are cost re-
lated to land-based activities such as stevedoring, ter-
minal, and haulage costs.
Costs of sales and administration comprises costs of
sales, marketing, and administration.
DKK million 2020
Wages, salaries and remuneration 2,442 2,502
Defined contribution pension plans 119 118
Defined benefit pension plans 7 8
Other social security costs 256 258
Share based payment 7 7
Other employee costs 199 234
-
3,077
8,213 8,367
Reference is made to note 3.2.4 for detailed information
on pension plans, note 5.1 for detailed information on re-
muneration of Management and note 5.3 for detailed in-
formation on the Group’s share option schemes and shares
held by the Management. In wages, salaries and remuner-
ation an reduction of DKK 11m relating to contributions
from voluntary salary reduction is recognised. Reference
to note 5.9.
Wages, salaries, social security contributions, pension
contributions, paid annual leave and sick leave, bo-
nuses, and non-monetary benefits are accrued in the
year in which the associated services are rendered by
employees of the Group. Where the Group provides
long-term employee benefits, the costs are accrued to
match the rendering of the services by the respective
employees.
2.2 Revenue (continued)
Revenue from transport of passengers, freight and
from rendering terminal and warehouse services etc, is
recognised in the Income statement at the time of de-
livery of the service to the customer, which is the time
where the control is transferred and when each sepa-
rate performance obligation in the customer contract
is fulfilled following the “over-time principle”. Some
of the ferry and freight transports have a series of
performance obligations, but as the duration of these
transports are short term the impact from splitting
these contracts into “distinct services” will not have
material impact.
Most transports carried out by the Ferry Division are
charaterised by short delivery time (Most sailings are
less than 30 hours while sailings to/from Turkey are up
to 60 hours). Transports carried out by Logistics Divi-
sion can take delivery over a longer period.
Revenue from chartering out ferries is recognised
straightline over the duration of the agreement.
On board sales is recognised at a “point in time”.
Revenue is measured at fair value excluding value
added tax and after deduction of trade discounts.
Trade receivables are not adjusted for any financing
component when recognised. The general credit terms
are overall short and are following market terms.
Accounting estimates and judgements are made in
order to determine time of delivery and accrue for rel-
evant income along with evaluation of pricing. These
accounting estimates and judgements are based on
experience and historical sales figures along with a
continuous follow-up on service delivered.
75 Consolidated Financial Statements
DFDS Annual Report 2020
2.6 Special Items, net
DKK million 2020
Seaways, net) 110 30
Accrual of the total estimated costs (estimated fair value) related to the DFDS shares
awarded to DFDS employees as a special one-off award in connection with DFDS’ 150 years
anniversary in December 2016. The costs accrued from December 2016 to February 2020 4
Termination cost in connection with restructuring
Impairment of a passenger ferry and a terminal in the business unit Passenger 0
Impairment of a freight ferry made in connection with reclassification to asset held for
sale 0
Accounting loss and costs related to disposal of two associated companies 0
includings costs related to the closure of Toulon port etc. 0
Special items, net
If special items had been included in the operating profit before special items,
they would have been recognised and have effect as follows:
Operating costs 0
Employee costs
Profit on disposal of non-current assets and associates, net 110 26
Amortisation, depreciation, and impairment losses on intangible and tangible assets 0
Special items, net
Special items include significant income and expens-
es not directly attributable to the Group’s recurring
operating activities such as material restructuring of
processes and significant organisational restructur-
ings/changes which are of significance over time. In
addition, other non-recurring amounts are classified
as special items including impairment of goodwill; sig-
nificant impairments of non-current tangible assets;
significant transaction costs and integration costs in
connection with large business combinations; changes
to estimates of contingent considerations related to
business combinations; gains and losses on the dispos-
al of activities; and significant gains and losses on the
disposal of non-current assets.
These items are classified separately in the income
statement in order to provide a more transparent view
of income and costs that are considered not to have
recurring nature.
DKK million 2020
Software 40 51
Other non-current intangible assets 54 36
Land & Buildings 8 8
Terminals 49 49
Ferries and other ships 909 850
Equipment 174 159
Right-of-use assets 639 735
Impairment losses for the year:
Equipment 0 7
0 7
0m) has been recognised in Special items. Reference is
made to note 2.6.
Amortisation and depreciation for the year are rec-
ognised based on the amortisation and depreciation
profiles of the underlying assets. Reference is made to
note 3.1.1, 3.1.2 and 3.1.3.
76 Consolidated Financial Statements
DFDS Annual Report 2020
The majority of the ferry activities performed in the Dan-
ish, Turkish, French, Lithuanian, Norwegian, and Dutch
enterprises in the Group are included in local tonnage tax
schemes where the taxable income related to transporta-
tion of passengers and freight is calculated based on the
tonnage deployed during the year and not the actual prof-
its generated. Taxable income related to other activities is
taxed according to the normal corporate income tax rules
and at the standard corporate tax rates.
In 2020, the Group realised an effective tax rate adjusted
-
rate income tax.
Addition on acquisition of enterprises relates to the ac-
quisition of Colley Brothers Ltd. in 2020. The movement
in deferred tax recognised in other comprehensive income
relates to value adjustments of defined benefit pension
and these two enterprises’ Danish controlled enterprises.
LF Investment ApS is the administration company in the
joint taxation and settles all payments of corporation tax
due by the joint taxed enterprises with the tax authorities.
In accordance with the Danish rules on joint taxation, DFDS
-
able for their own corporate tax due and are only subsid-
iary and pro rata liable for the corporation tax liabilities
towards the Danish tax authorities for all other enterprises
that are part of the Danish joint taxation.
DKK million 2020
Ferries and
other ships
Land and
buildings,
terminals
and other
equipment Provisions
carried
forward Other
Deferred tax at 1 January 172 27 166
Foreign exchange adjustments 6 1 1 0 0 8
Impact from change in corporate income tax
rate 1 0 0
Addition on acquisition of enterprises 0 2 0 0 0 2
Recognised in the Income statement 4 0 1 0
Recognised in other comprehensive income 0 0 0 0
Adjustment regarding prior years recognised
in the Income statement 0 0 0 1
Reversal of write-down of deferred tax assets 0 0 0 0
174 160
DKK million 2020
Current tax
Current joint tax contributions
Movement in deferred tax for the year 11
Adjustment to corporation tax in respect of prior years 19 0
Adjustment to deferred tax in respect of prior years 1 0
Effect of change in corporate income tax rate 2 0
Write-down of deferred tax assets 0
Reversal of write-down of deferred tax assets 3 0
Tax in the Income statement
Tax in Other comprehensive income 9
Profit before tax 466 1,371
Adjustment regarding tonnage taxed income
Profit before tax (corporate income tax) 137
22.0% tax of profit before tax
Adjustment of calculated tax in foreign subsidiaries compared to 22.0%
Non-taxable/-deductible items
Tax asset for the year, not recognised
8 0
Other adjustments of tax in respect of prior years 24
Corporate income tax
Tonnage tax
5.1 4.3
10.3 3.7
Corporate income tax 11
Movement deferred tax 2
77 Consolidated Financial Statements
DFDS Annual Report 2020
(continued)
DKK million
Ferries and
other ships
Land and
buildings,
terminals
and other
equipment Provisions
carried
forward Other
Deferred tax at 1 January 176 18 1 141
Foreign exchange adjustments 0 0 0
Impact from change in accounting policies 0 0 0 0
Addition on acquisition of enterprises 0 12 0 0 8
Recognised in the Income statement 0 3 1 2
Recognised in other comprehensive income 0 0 17 0 0 17
Adjustment regarding prior years recognised
in the Income statement 0 2 0 0
Write-down of deferred tax assets 0 0 0 7 0 7
172 27 166
DKK million 2020
Deferred tax (assets)
Deferred tax (liabilities) 217 213
160 166
The Group has unrecognised tax losses carried forward of
of DKK 548m, tax value of DKK 120m). Of the unrecog-
548m) an amount of DKK 486m expires within the next
it has been assessed that the losses cannot be utilised in
the foreseeable future.
The majority of the ferry activities performed in the Dan-
ish, Turkish, French, Lithuanian, Norwegian and Dutch en-
terprises in the Group are included in local tonnage tax
schemes. If the companies under tonnage taxation with-
draw from the tonnage taxation schemes, a deferred tax
liability in the amount of maximum DKK 786m may be
The companies are not expected to withdraw from the
scheme and consequently no deferred tax relating to as-
sets and liabilities subject to tonnage taxation has been
recognised.
Significant accounting estimates and assessments
Deferred tax assets, including the tax value of tax
losses carried forward, are recognised to the extent
that Management assesses that the tax asset can be
utilised through positive taxable income in the fore-
-
sessment is performed annually based on forecasts,
business initiatives and likely structural changes for
the coming years.
Tax for the year comprises income tax, tonnage tax,
and joint taxation contribution for the year of Dan-
ish subsidiaries as well as changes in deferred tax for
the year. Additionally, the tax for the year comprises
adjustments to prior years taxes and changes in the
assessment of provisions for uncertain tax positions.
The tax for the year is recognised in the Income state-
ment or in the equity in correlation to the underlying
transaction.
The current payable Danish corporation tax is allocat-
ed by the settlement of a joint taxation contribution
between the jointly taxed companies in proportion to
their taxable income. Companies with tax losses re-
ceive joint taxation contributions from companies that
have been able to utilise the tax losses to reduce their
own taxable profit.
Tax computed on the taxable income and tonnage tax
for the year is recognised in the balance sheet as tax
payable or receivable or joint taxation contribution for
Danish companies considering on-account/advance
payments.
Deferred tax is provided using the liability method on
temporary differences between the carrying amount
and the tax base of the assets and liabilities at the re-
on temporary differences relating to non-tax-deduct-
ible goodwill that arose on acquisition date without
impacting the result or taxable income.
Deferred tax relating to assets and liabilities subject
to tonnage taxation is recognised to the extent that
deferred tax is expected to crystallise. Deferred tax
assets are recognised for all deductible temporary dif-
ferences and the carry forward of any unused tax loss-
es. Deferred tax assets are recognised to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences,
and the carry forward of unused tax losses, can be uti-
lised in the foreseeable future. The carrying amount is
reviewed at each reporting date.
Deferred tax is measured on the basis of the expected
use and settlement of the individual assets and liabil-
ities and according to the tax rules and at the known
tax rates applicable at the balance sheet date when
the deferred tax is expected to crystallise as current
tax. The change in deferred tax as a result of changes
in tax rates is recognised in the Income statement.
the type, either as a probability-weighted average of
-
certain tax positions are recognised either as payable/
receivable tax and/or as deferred tax assets/liabilities.
Consolidated Financial Statements
DFDS Annual Report 2020
DKK million Note 2020
Invested capital excl. Net Working Capital:
Non-current intangible assets 3.1.1 4,901 4,934
Non-current tangible assets 3.1.2 13,734 13,669
Right-of-use assets 3.1.3 3,133 3,337
Investments in associates and joint ventures 39 44
Assets classified as held for sale 3.1.6 182 76
Invested capital excl. Net Working Capital 22,060
Net Working Capital:
Receivables (excluding interest-bearing receivables) 3.2.1 2,489 2,883
Inventories 3.2.2 169 219
Prepaid costs 646 465
Derivatives, related to operating activities,
financial assets measured at fair value 4.2 214 300
Derivatives, related to operating activities,
financial liabilities measured at fair value 4.2
Pension and jubilee liabilities 3.2.4
Other provisions 3.2.5
Trade payables
Corporation tax
Other payables 3.2.3
Prepayments from customers
Net Working Capital 132 417
Invested capital 22,121 22,476
22,500
Corporate Income
Invested Capital excl.
Net Working Capital
(Section 3.1)
Invested Capital
(Section 3)
ROIC
(Section 2)
Net Working Capital
(Section 3.2)
Invested capital is a key component when calculat-
ing ROIC. Reference is made to section 2 for more
details about ROIC.
The following section provides the notes of the main
components that forms basis of the Invested capital
being Non-current intangible, tangible assets and
Right-of-use assets and Net Working Capital being
Net current assets (Non interest-bearing current as-
sets minus Non interest-bearing current liabilities)
plus non-current prepaid costs minus Pension and
Jubilee liabilities and Other provisions.
Furthermore, notes that are closely related to the
Non-current intangible, tangible assets and Right-of
use assets such as Impairment testing and Profit on
disposal of non-current assets are also included in
this section.
3 Invested Capital
Consolidated Financial Statements
DFDS Annual Report 2020
DKK million
Goodwill
Port conces-
sion rights
etc.
Other non-
current
intangible
assets Software
projects in
progress
Cost at 1 January 2019 3,458 1,218 50 541 2 5,269
Foreign exchange adjustments 6 0 1 0 0 8
Addition on acquisition of enterprises
98
0 57
1 0 156
Additions 0 0 0 3 63
66
Disposals 0 0 0 0
Transfers 0 0 0 43 3
3,561 525 25
Amortisation and impairment
losses at 1 January 2019 121 43 20 297 0 480
Foreign exchange adjustments 0 0 1 0 0 1
Amortisation charge 0 31 5 51 0 87
Disposals 0 0 0 0
121 75 25 0 505
Carrying amount at
3,440 1,144 241 25
3.1.1 Non-current intangible assets
DKK million
Goodwill
Port conces-
sion rights
etc.
Other non-
current
intangible
assets Software
projects in
progress
Cost at 1 January 2020 3,561 1,218 109 525 25 5,439
Foreign exchange adjustments 0 0
Addition on acquisition of enterprises
11
1
0 6
2
0 0 16
Additions 0 0 0 2 68
3
70
Disposals 0 0 0 0
Transfers 0 0 0 37
3,552 1,214 113 562 55
Amortisation and impairment
losses at 1 January 2020 121 75 25 284 0 505
Foreign exchange adjustments 0 0 0
Amortisation charge 0 43 11 40 0 94
Disposals 0 0 0 0
Transfers 0 0 0 0 1
117 36 323 0
Carrying amount at
3,434 77 55
1)
Addition of goodwill primarily
relates to the acquisition of
Colley Brothers (DKK 10m).
Reference is made to note 5.5.
2)
Relates to the acquisition of
Colley Brothers (DKK 6m).
Reference is made to note 5.5.
3)
Primarily related to the
implemention of the new ERP
system, which is planned to go
live in 2021.
4)
Addition of goodwill primarily
relates to the acquisition of
and Freeco Logistics (DKK
53m). Reference is made to
note 5.5.
5)
Relates to the acquisition of
and Freeco Logistics (DKK
23m). Reference is made to
note 5.5.
6)
Primarily related to the
implemention of the new ERP
system, which is planned to go
live in 2021.
3.1 Invested Capital excl. Net Working Capital
Consolidated Financial Statements
DFDS Annual Report 2020
3.1.1 Non-current intangible assets (continued)
Recognised goodwill is attributable to the following cash generating units:
DKK million 2020
Ferry:
North Sea, Baltic Sea and Mediterranean 2,991 3,003
Logistics:
Nordic (
comprising forwarding- and logistics activities in the Nordic and Baltic countries)
118 116
Continent 205 206
119 115
3,434 3,440
The carrying amount of completed software and develop-
ment projects in progress primarily relates to a Passenger
booking system, a Transport Management System to the
Logistics Division, an onboard sales system, a new ERP
system, and various digital products.
For further information regarding the impairment tests ref-
erence is made to note 3.1.5.
Non-current intangible assets - Other than goodwill
• Generally the following applies unless otherwise
stated:
• Assets are measured at cost less accumulated am-
ortisation and impairment losses.
• The cost includes costs to external suppliers, ma-
terials and components, direct wages, salaries and
interests paid as from the time of payment until the
date when the asset is available for use.
• The basis for amortisation is determined as the cost
less estimated residual value.
• The assets are amortised on a straight-line basis
over the estimated useful life to the estimated re-
sidual value.
• The effect from changes in amortisation period or
the residual value is recognised prospectively as a
change in the accounting estimate.
Goodwill
At initial recognition goodwill is recognised in the bal-
ance sheet at cost, as described in note 5.5 ‘Business
combinations’. Subsequently, goodwill is measured at
cost less accumulated impairment losses. Goodwill is
not amortised.
An impairment test is performed at least once a year
together with other non-current assets of the Group.
The book value of goodwill is allocated to the Group’s
cash-generating units at the time of acquisition.
Development projects in progress, primarily develop-
ment of IT software, are recognised as non-current in-
tangible assets if the following criteria are met:
• the projects are clearly defined and identifiable;
• the Group intends to use the projects once com-
pleted;
• the future earnings from the projects are expected
to cover the development and administrative costs;
and
• the cost can be reliably measured.
The amortisation of capitalised development projects
starts after the completion of the development pro-
ject and is recognised on a straight-line basis over the
goes for significant internally developed commercial
and operational systems).
Other non-current intangible assets
Other non-current intangible assets comprise the
value of customer relations or similar, identified as
part of business combinations, and which has definite
useful life. Other non-current intangible assets are
measured at cost less accumulated amortisation and
impairment losses. Amortisation is recognised on a
straight-line basis over the expected useful life, which
which is 10 years.
Port concession rights
Port concession rights comprise the value of access to
stategically placed ports which are recognised at their
fair value at the acquisition date.
Acquired port concession rights are amortised over the
concession period.
Software
IT software purchased or internally developed is
measured at cost less accumulated amortisation and
impairment losses.
Amortisation is recognised on a straight-line basis over
Consolidated Financial Statements
DFDS Annual Report 2020
3.1.2 Non-current tangible assets
DKK million
Land and
buildings
Ferries
and other
ships
etc.
construction
and pre-
payments
Cost at 1 January 2020 252 1,158 18,579 1,669 1,034 22,692
Foreign exchange adjustments
Addition on acquisition of
enterprises 0 0 0 1 0 1
Additions 0 10 44 66 1,467 1,588
Disposals
Transfers 28 1,480
159 45
Transfers to assets classified as
held for sale 0 0
0 0
230 1,174 23,446
Depreciation and impairment losses
at 1 January 2020 51 417 7,629 927 0 9,023
Foreign exchange adjustments 0
Depreciation charge 8 49 909 174 0 1,140
Impairment charge 0 0 101
0 0 101
Disposals 0 0
Transfers 0 43 0 34
Transferred to assets classified as
held for sale 0 0
0 0
46 454 1,064 0
Carrying amount at
720 11,220
723 13,734
DKK million
Land and
buildings
Ferries
and other
ships
etc.
construction
and pre-
payments
Cost at 1 January 2019 205 1,793 16,884 1,618 1,021 21,520
Foreign exchange adjustments 8 15 14 2 24
Reclassification to
Right-of-use assets
0 0 0
Addition on acquisition of
enterprises 0 0 0 13 0 13
Additions 1 18 404
120 1,990
2,533
Disposals 0 0
Transfers 38 42 1,805
88
Transfers to assets classified as
held for sale 0 0
0 0
252 1,034
Depreciation and impairment losses
at 1 January 2019 42 359 7,153 877 0 8,431
Foreign exchange adjustments 1 10 7 0 12
Reclassification to
Right-of-use assets
0 0 0 0
Depreciation charge 8 49 850 159 0 1,065
Impairment charge 0 0 0 7 0 7
Disposals 0 0 0
Transferred to assets classified as
held for sale 0 0
0 0
51 417 0
Carrying amount at
201 741
742 1,034
For further information regarding the impairment tests ref-
erence is made to note 3.1.5.
Primarily related to the large
new-buildings program. Two
freight ferries were deployed
in February and October 2020.
The last one is scheduled
for delivery in Q1 2021. One
freight and one passenger
ferry (ro-pax) are on order for
delivery in 2021-2022.
Ark Futura and Gothia Sea-
ways have been reclassified
to asset held for sale during
2020.
An impairment of DKK 29m
on Ark Futura and DKK 72m
on Crown Seaways have been
recognised in special items.
At year-end 2020 Ferries and
other ships includes temporar-
ily idle assets with a carrying
amount of DKK 206m (2019:
DKK 0m).
Primarily related to acquisi-
tion of two ferries acquired in
Q2 2019.
Primarily related to the large
new-buildings program. In
2019, three freight ferries
(ro-ro) were deployed,
Sale of the freight ferry Anglia
Seaways.
On 2 September 2019 DFDS
entered into an agreement to
sell a combined freight and
passenger ferry. The ferry was
be delivered in April 2020.
Reference is made to note
3.1.6.
Reference is made to note
3.1.3.
Consolidated Financial Statements
DFDS Annual Report 2020
3.1.2 Non-current tangible assets (continued)
Generally the following applies unless otherwise stated:
• Assets are measured at cost less accumulated de-
preciation and impairment losses.
• The cost includes costs to external suppliers, ma-
terials and components, direct wages, salaries and
interests paid as from the time of payment until the
date when the asset is available for use. The cost
price also comprises gains and losses on transac-
tions designated as hedges.
• The basis for depreciation is determined as the cost
less estimated residual value.
• The assets are depreciated on a straight line basis
over the estimated useful life to the estimated re-
sidual value.
• Estimated useful life and estimated residual values
are reassessed at least once a year. In estimating the
estimated useful life for ferries and other ships it
is taken into consideration that DFDS continuously
is spending substantial funds on ongoing mainte-
nance.
• The effect from changes in depreciation period or
the residual value is recognised prospectively as a
change in the accounting estimate.
Ferries and other ships
The rebuilding/upgrade of ferries and other ships is cap-
italised if the rebuilding/upgrade can be attributed to:
• Safety measures.
• Measures to extend the useful life of the ferries and
other ships.
• Measure to reduce climate impact.
• Measures to improve earnings.
• Docking.
Maintenance and daily running costs for the ferries
and other ships are expensed in the Income statement
as incurred.
Docking costs are capitalised and depreciated on a
straight line basis until the ferry’s or ship’s next dock-
ing. In most cases, the docking interval is 2 years for
passenger cruise ferries and 2½ years for freight and
passenger ferries as well as freight ferries.
Gains or losses on the disposal of ferries and other
ships are calculated as the difference between sales
price less sales costs and the book value at dispos-
al date. Gains or losses on the disposal of ferries and
other ships are recognised when substantially all risks
and rewards incident to ownership have transferred to
the buyer, and are presented in the Income Statement
as ‘Profit on disposal of non-current assets, net’ or
‘Special items’ if the gain/loss is significant.
Passenger cruise- and freight and passenger (ro-pax)
ferries
Due to differences in the wear of certain components
of passenger cruise- and Freight and passenger ferries,
the cost of these ferries is divided into components
with low wear, such as hull and engine, and compo-
nents with high wear, such as parts of the hotel, cater-
ing/restaurants and shop areas.
Freight ferries (ro-ro)
The cost of freight ferries is not divided into compo-
nents as there is no material difference in the wear of
the various components of freight ferries.
The depreciation period for components with low wear
is 35 years for freight and passenger- and freight fer-
ries from the year in which the ferry was built. In July
2020 the remaining lifetime of two passenger cruise
ferries has been reassessed and based on the condi-
tion of the ships the remaining useful life has been pro-
longed by 10 years. The depreciation period is hereaf-
ter 45 years for all passenger cruise ferries. The impact
on depreciation in 2020 is a reduction of DKK 13m.
The residual value is calculated as the value of the
ferry’s steel less estimated costs of disposal.
Components with high wear are normally depreciated
Other non-current tangible assets
Other non-current tangible assets comprise buildings,
terminals and machinery, tools and equipment, and
leasehold improvements.
Buildings
Terminals etc.
Equipment etc
Leasehold improvements
Max. depreciated over
the term of the lease
Gains or losses arising from the disposal of other
non-current tangible assets are calculated as the dif-
ference between the disposal price less disposal costs
and the book value at the date of disposal. Gains or
losses on the disposal of these non-current assets are
recognised in the Income statement as ‘Profit on dis-
posal of non-current assets, net’ unless they qualify to
be a special item, reference is made to note 2.6.
Consolidated Financial Statements
DFDS Annual Report 2020
An impairment of DKK 28m
on a terminal in business unit
Passenger has been recog-
nised in special items.
Reclassified to Right-of-use
assets from Terminals and
Equipment etc.
Terminal contract commenced
end December 2018.
3.1.3 Leases
The Group has lease contracts for various items of Land
& buildings, terminals, ferries, equipment etc. in its opera-
tions. The Group’s obligations under the leases are secured
by the lessors title to the leased assets. Several lease con-
tracts include extension and termination options and var-
iable lease payments, which are further described below.
Set out below are the carrying amounts of Right-of-use
assets recognised and the movements during the period.
DKK million
Land and
buildings
Ferries and
other ships
etc.
Cost at 1 January 2020 281 2,352 875 474 3,983
Additions/Remeasurement 146 365 40 41 592
Disposals
Transfer 0 0 0
Foreign exchange adjustments 3
424 2,632 735 345 4,136
Depreciation and impairment losses
at 1 January 2020 70 165 257 155 646
Depreciation charge 83 179 244 134 639
Disposals
Impairment charges 0 28
0 0 28
Transfer 0 0 0
Foreign exchange adjustments 1
150 326 170 1,003
Carrying amount at
274 2,274 410 175 3,133
DKK million
Land and
buildings
Ferries and
other ships
etc.
Cost at 1 January 2019 - - - - -
Reclassification of IAS 17 Leases
0 711
0 90 801
Change in accounting policy 126 1,564 703 137 2,529
Addition on acquisition of enterprises 47 0 0 24 71
Additions/Remeasurement 109 60 290 232 691
Disposals
Foreign exchange adjustments 0 27 1 6 34
2,352 474
Depreciation and impairment losses
at 1 January 2019 - - - - -
Reclassification of IAS 17 Leases
0 0 0 35 35
Depreciation charge 70 168 375 122 735
Disposals 0
Foreign exchange adjustments 1 3 0 4 7
70 165 257 155 646
Carrying amount at
212 320 3,337
Weighted average incremental
borrowing rate
2.1% 3.0% 1.7% 1.8%
Consolidated Financial Statements
DFDS Annual Report 2020
3.1.3 Leases (continued)
Set out in the following are the carrying amounts of lease liabilities (included under interest-bearing liabilities) and the
movements during the period.
DKK million 2020
As at 1 January 3,109 -
Reclassification of IAS 17 leases - 292
Change in accounting policy - 2,765
Addition on acquisition of enterprises 0 71
Additions/Remeasurement 544 691
Payments
Disposals
Foreign exchange adjustments 6
regarding lease agreements where of interest expenses re-
lated to lease liabilities amount to DKK 78m
Non-discounted lease liabilities expiring within the following periods from the balance sheet date:
DKK million 2020
Within 1 year 586 593
787 879
509 452
After 5 years 1,515 1,270
Lease liabilities are recognised in the balance sheet as follows:
DKK million 2020
Non-current liabilities 2,407 2,556
Current liabilities 519 552
The following amounts are recognised in the Income statement:
DKK million 2020
Expense relating to short-term leases (included in cost and cost of
sales and administration) 0
Expense relating to low-value assets (included in cost of sales and administration)
Variable lease payments (included in cost)
Interest expense on lease liabilities
Depreciation, ships
Depreciation, other non-current assets
The following amounts from leases are recognised in the statement of Cash flows:
DKK million 2020
Cash flows from operating activities, gross
Interest paid, etc
Cash flows from operating activities, net
Cash flows from financing activities, net
At 31 December 2020 the Group was not committed to any
Consolidated Financial Statements
DFDS Annual Report 2020
The Right-of-use asset and corresponding lease liabil-
ity is recognised at the commencement date, i.e. the
date the underlying asset is ready for use. Right-of-
use assets are measured at cost corresponding to the
lease liability recognised, adjusted for any lease pre-
payments including dismantling and restoration costs.
The lease liabilities are measured at the present value
of lease payments to be made over the lease term. The
lease payments are discounted using DFDS’ incremen-
tal borrowing rate.
Depreciation follows the straight-line method over the
lease term or the useful life of the Right-of-use assets,
-
preciation is based on volumes handled in the terminal.
The lease payments include fixed payments less any
lease incentives receivable and variable lease pay-
ments that depend on an index or a rate. If the con-
tract holds an option to purchase, extend or terminate
a lease and it is reasonably certain to be exercised by
the Group, the lease payment will include those. The
variable lease payments that do not depend on an
index or a rate are recognised as expense in the peri-
od on which the event or condition that triggers the
payment occurs.
The Group applies the short-term lease recognition
exemption for lease contracts that, at the commence-
ment date, have a lease term of 12 months or less for
all classes of underlying assets except for terminals
and ferries and other ships, and the exemption for
lease contracts for which the underlying asset is of
low value. Lease payments on short-term leases and
leases of low-value assets are recognised as expenses
on a straight-line basis over the lease term.
For all classes of assets, except for terminals, non-
lease components, i.e. the service element, is separat-
ed from the lease components and thereby form part
of the Right-of-use asset and lease liability recognised
in the balance sheet.
The Group has lease contracts for various items of
Land & buildings, terminals, ferries and other ships,
equipment, and other assets used in its operations.
Leases normally have the following lease terms:
Land & Buildings
Terminals
Ferries and other ships up to 10 years
Equipment
Other assets
Rental and lease matters (lease out)
For accounting purposes, assets leased out are divided
into finance and operating leases.
In respect of assets leased out on a finance lease, an
amount equal to the net present value of the future
lease payments is recognised in the balance sheet as
a lease receivable from lessee. The asset leased out is
reclassified from non-current asset to leases receiva-
bles and any gain or loss arising from this is recognised
in the income statement.
Lease income from assets leased out on an operat-
ing lease is recognised in the Income statement on a
straight line basis over the lease term.
3.1.3 Leases (continued)
The Group has two terminal lease contracts that contains
variable payments based on the number of transferred
units. These terms have been negotiated to align the lease
expense with the units transferred and revenue earned.
The following provides information on the Group’s varia-
ble lease payments including the magnitude in relation to
fixed payments:
Fixed
payments
Variable
payments 2020
Fixed
payments
Variable
payments
Fixed rent 86 - 86 91 - 91
Variable rent with minimum
payment 30 27 57 30 27 57
Variable rent only - 31 31 - 31 31
116 174 121
A 10% increase in units transferred would increase total
lease payments by 7%.
The Group has several significant lease contracts for fer-
ries and terminals that include extension and termination
options. These options are negotiated by management to
provide flexibility in managing the leased-asset portfolio
and align with the Group’s business needs.
Group as a lessor
Future minimum receivable under non-cancellable operating leases as at 31 December are as follows:
Operating lease commitments (lessor)
DKK million 2020
Minimum lease payments (income)
Ferries
309 285
304 161
613 447
The specified minimum payments are not discounted. Op-
erating lease and rental income recognised in the Income
347m). The contracts are entered into on normal condi-
tions.
Significant accounting estimates and assessments
Leases (extention options)
The Group has entered into lease/charter agreements
for ferries with extension options. Management exer-
cises significant judgement in determining whether
these extension options are reasonably certain to be
exercised and in the connection considers all relevant
factors that create an economic and strategic incen-
tive for it to exercise the extention option.
Leases (lease out)
The Group has entered into operating lease/charter
agreements for ferries under usual terms and con-
ditions for such agreements. At inception of each
individual agreement, Management assesses and de-
termines whether the agreement is a finance or an op-
erating leasing agreement.
Consolidated Financial Statements
DFDS Annual Report 2020
3.1.4 Profit on disposal of non-current assets, net
DKK million 2020
Profit and losses (net) on disposal of intangible assets, property,
plant and equipment and Right-of-use assets 5 6
Gain on disposal of enterprises, associates and joint ventures 0 0
5 6
Profit/loss on disposal of non-current intangible, tan-
gible and Right-of-use assets is calculated as the dif-
ference between the disposal price and the carrying
amount of net assets at the date of disposal, including
disposal costs.
3.1.5 Impairment testing
Introduction
DFDS decided to impairment tests all non-current assets
at least once every year and in case of indication of impair-
have been made in 2020.
The breakdown into cash-generating units takes its start-
ing point in the internal structure of the two segments,
Ferry and Logistics, and their business areas, including
the strategic, operational and commercial management
and control of these, both separately and across business
areas, and the nature of the customer services provided.
Based on this the following seven cash generating units
have been identified:
Ferry CGU:
• The business areas North Sea, Baltic Sea and Mediter-
ranean
• The business area English Channel
• The Oslo – Frederikshavn - Copenhagen route which is
part of the Passenger business area
• The Amsterdam – Newcastle route which is part of the
Passenger business area
Logistics CGU:
• The business area Nordic – forwarding- and logistics ac-
tivities in the Nordic and Baltic countries
• The business area Continent – forwarding and logistics
activities at the European continent
• -
Non-current intangible and tangible assets as well as
Right-of-use assets are assigned to the above cash-gener-
ating units, unless this cannot be done with a reasonable
degree of certainty. Software and other assets which can-
not with reasonable certainty be assigned to one or more
of the above cash-generating units are tested for impair-
ment as a non-allocated Group asset, i.e. on the basis of
Group earnings.
Basis for impairment testing and calculation
of recoverable amount
In the impairment test for cash-generating units, the re-
coverable amount of the unit is compared with its carrying
amount. The recoverable amount is the higher value of its
value-in-use and its fair value less costs of disposal. If the
recoverable amount is less than the carrying amount, the
latter is written down to the lower value.
3.1.5 Impairment testing (continued)
The value-in-use is calculated as the discounted value of
the estimated future net cash flows per cash-generating
unit. Impairment testing (value-in-use) is performed based
on management approved forecast for 2021 and business
plans beyond 2021. Key parameters for the forecast pe-
riods are trends in revenue, EBIT, EBIT margin, future in-
vestments, and growth expectations. These parameters
are determined specifically for each individual cash-gener-
ating unit. Growth is incorporated in forecasts for periods
beyond 2021 and in the terminal period with reference to
the growth rate and cash flow section below.
The recoverable amount for cash-generating units contain-
ing goodwill is determined based on value-in-use calcu-
lations. For a breakdown of goodwill on cash-generating
units, reference is made to note 3.1.1.
The fair value of the Group’s main assets, ferries and other
ships, is determined on the basis of the average of two to
three independent broker valuations per ship less estimat-
ed costs of disposal. The task of the brokers is to assess
the value of the individual ships in a ‘willing buyer – willing
seller’ situation. The valuations have been obtained from
the same recognised brokers as in previous years, and Man-
agement considers an average of these to be the best and
most reasonable expression of the ships’ fair value.
The carrying amount of Right-of-use assets is added to the
base of non-current tangible and intangible assets being
subject to impairment testing. The Right-of-use assets are
regarded an integrated part of the operating activities
taking place in the Group’s cash-generating unit and ac-
cordingly, the carrying amount of a Right-of-use asset is
allocated to the cash-generating unit in which the asset in
question is used. Thereby Right-of-use assets are tested on
cash-generating unit level.
Determination of estimated growth rates and cash flow
on basis of approved forecast for 2021 and manage-
ment business plans beyond 2021. These projections are
performed on basis of assumptions on when the specific
The projections also include the estimated impact of long-
term strategic decisions such as WIN23 and assessment of
opportunities for future growth and required investments.
terminal period, OECD prediction for long term consumer
price index, a growth rate of 1.0% have been applied. Fur-
incorporated in the forecast for 2021 and onwards. It is
management expectations that a full recovery from Cov-
The following assumptions for growth rates have been ap-
North Sea, Baltic Sea and Mediterranean: End of 2022 a
-
The business area English Channel: End of 2022 a full EBIT
-
The Oslo – Frederikshavn - Copenhagen route:
The extensive travel restrictions in 2020 have resulted
in a significantly reduced passenger traffic. The expecta-
tion for 2021 is negative growth as well as negative EBIT.
During 2022, management expects a partiel recovery will
take place and a steady state will be achieved by the end
of 2022. Varying growth rates have been incorporated in
the forecast years beyond 2022, and expects to provide an
overall positive EBIT. The growth rates in EBIT vary from
year to year and depend to a large extent on when planned
maintenance costs, improvements etc. are taking place.
From 2022, growth rates represent an avg. of 1.0% over
the forecast period due to OECD prediction consumer price
The Amsterdam – Newcastle route: The expectation for
2021 is a negative growth as well as negative EBIT. During
2022, management expects a partiel recovery will take
place and a steady state will be achieved by the end of
2022. Varying growth rates have been incorporated in the
forecast years beyond 2022, and expects to provide an
overall positive EBIT. The growth rates in EBIT vary from
year to year and depend to a large extent on when planned
maintenance costs, improvements etc. are taking place.
From 2022, growth rates represent an avg. of 3.5% over
Consolidated Financial Statements
DFDS Annual Report 2020
Determination of discount rate
The discount rate for year-end 2020 impairment testing
purposes is based on a calculation of DFDS’ weighted
debt and equity. The cost of equity is based on a risk-free
rate, plus a market risk premium. The risk-free interest
rate is based on a 10-year Danish risk-free rate at year-end
which at the end of 2020 is negative. Accordingly, DFDS
has decided to use a normalised risk-free rate of 1.0%.
The market risk premium is calculated as a general equity
beta value). The leveraged beta value applied at year-end
2020 is calculated by obtaining the unlevered beta val-
ue of peer group companies via the Capital IQ database.
This beta value is then relevered in accordance with the
Groups’ current capital structure. The cost of debt is based
on the interest-bearing borrowings for the Group plus the
risk-free interest. Further, risk premium may be added for
the individual cash-generating unit if special conditions
and/or uncertainties indicate a need hereto. Conversely,
if the risk level for the individual cash-generating unit is
considered to be lower than the general risk level, then
the risk premium is reduced if special conditions indicate
a need hereto.
units is uncertain and the expected impact is built into
-
hagen a specific risk premium of 1.0 percentage point
has been added on top of the determined discount rate
to reflect the increase in uncertainty for passengers. The
discount rates used in determining the carrying amounts
of Right-of-use assets/lease liabilities are based on bor-
rowing rates which are lower than the discount rates used
in the impairment test, which all things being equal will
have a negative impact on the results of the impairment
test as the carrying amount of the cash-generating units
will increase more than the value-in-use of the cash-gen-
erating-units.
For cash-generating units where the recoverable amount is
based on value-in-use, the pre-tax discount rates applied
have been within the following ranges in the two segments:
2020
Ferry Division
Logistics Division 6.4%
The applied discount rates in cash-generating units for
which the carrying amount of goodwill forms a significant
Sensitivity analysis
As part of the preparation of impairment tests, sensitivity
analysis are prepared on the basis of relevant risk factors
and scenarios that Management can determine with rea-
sonable reliability. Sensitivity analysis are prepared by
altering the estimates within the range of probable out-
comes. The sensitivities have been assessed as follows, all
other things being equal:
• An increase in the discount rate of 0.5%-points.
• A decrease in EBIT of 10%.
• A decrease in broker valuations of 10%.
None of these calculations have given rise to adjustments
of the results of the impairment tests prepared.
Order of recognising impairments
If a need for impairment is identified, goodwill is the first
to be impaired, followed by the primary non-current tangi-
ble and intangible assets and Right-of-use assets in the in-
dividual cash-generating units. Impairments are allocated
to the respective assets according to the carrying amount
of the assets unless this results in an impairment to a val-
ue below the fair value less costs of disposal of the asset.
Impairment tests 2020
Based on the impairment tests prepared at year end 2020
the cash generating unit: “Oslo - Frederikshavn - Copenha-
gen” has been impaired by DKK 100m. The impairment is
applied to the non-current tangible assets. No goodwill is
generating unit is based on value in use method. The im-
pairment loss of DKK 100m is recognised under special
items. Reference is made to note 2.6. Further an impair-
ment of DKK 29m has been recognised in relation to re-
classification of a ferry to assets classified as held for sale.
Reference is made to note 2.6 and note 3.1.6.
On the basis of the impairment tests prepared at year end
2019 it was not deemed necessary to impair any of the
cash-generating units in 2019 nor reverse any impairment
losses recognised in prior years.
Significant accounting estimates and assessments
Management has taken the risk and uncertainty relating
the forecasts and cash flows.
Impairment testing of goodwill and other non-current
intangible assets
Impairment testing of goodwill and other non-current
intangible assets, which primarily relates to IT, acquired
port concession rights and acquired customer portfolios,
is undertaken at least once every year and in case of in-
dication of impairment. The impairment tests are based
on the expected future cash flow for the cash-generating
unit in question. The key parameters are trends in reve-
nue, EBIT, EBIT margin, future investments and growth
expectations. These parameters are based on estimates
of the future which are inherently uncertain.
Impairment testing of ferries and other ships, includ-
ing the assessment of useful life and scrap value
Significant accounting estimates and assessments re-
garding ferries and other ships include the allocation
of the ferry’s cost price on components based on the
expected useful life of the identified components; the
ferry’s expected maximum useful life; the ferry’s scrap
value; and impairment testing. The expected useful
life of ferries and other ships and their scrap values
are reviewed and estimated at least once a year. Im-
pairment test is performed at least once a year, typi-
cally at year-end. Additional impairment tests are per-
formed if indications of impairment occur in the period
between the annual impairment tests.
Impairment testing of Right-of-use assets
For information on Significant accounting estimates
and assessments regarding Right-of-use assets from
leases reference is made to note 3.1.3.
Impairment testing of Right-of-use assets, which pri-
marily relates to leases of terminals, ferries, land and
buildings and cargo carrying equipment, is performed
at least once a year, typically at year-end. Addition-
al impairment tests are performed if indications of
impairment occur in the period between the annual
impairment tests.
The Right-of-use assets are regarded an integrated
part of the operating activities taking place in the
Group’s cash-generating units and accordingly, the
carrying amount of a Right-of-use asset is allocated
to the cash-generating unit in which the asset in ques-
tion is used. Thereby Right-of-use assets are tested on
cash-generating unit level.
The impairment tests are based on fair value less costs
of disposal for the assets in the cash-generating unit or
the value-in-use where the expected future cash flow
for the cash-generating unit is a main element in the cal-
culation. The key parameters in assessing expected fu-
ture cash flows are trends in revenue, EBIT, EBIT margin,
future investments and growth expectations, which are
inherently uncertain. The fair value less cost of disposal
for the Group’s main assets, ferries and other ships, are
based on broker valuations. For further information on
broker valuations reference is made to the paragraph
‘Basis for impairment testing and calculation of recov-
erable amount’ which can be found above in this note.
The carrying amount of non-current intangible, Good-
will, tangible and Right-of-use assets are continuously
assessed, at least once a year, to determine whether
there is an indication of impairment. When such indi-
cation exists the recoverable amount of the asset is
assessed. The recoverable amount is the higher of the
fair value less costs of disposal and the value-in-use.
The value-in-use is calculated as the present value of
the future net cash flow, which the asset is expected to
generate either by itself or from the lowest cash-gen-
erating unit to which the asset is allocated.
3.1.5 Impairment testing (continued)
Consolidated Financial Statements
DFDS Annual Report 2020
of non-current receivables of
DKK 0m (2019: DKK 24m).
of other receivables of DKK
159m (2019: DKK 0m).
2020
During 2020 the Group has decided to dispose of freight
ferries (ro-ro) Gothia Seaways and ARK Futura and conse-
quently classified these to assets held for sale. As part of
the reclassification, one of the freight ferries has been writ-
ten down to its expected sales price less cost of disposal.
An impairment loss of DKK 29m has been recognised in
special items. Reference is made to note 2.6.
On 2 September 2019, DFDS entered into an agreement
to sell a combined freight and passenger ferry (ro-pax) —
Liverpool Seaways, built 1997 — to La Meridionale. The
ferry was delivered to the new owner in May 2020. The
sales price was DKK 225m and an expected accounting
profit of DKK 110m was recognised under Special items.
3.2.1 Receivables
DKK million 2020
Other non-current receivables
17 29
17
Trade receivables 1,896 2,332
Work in progress services 118 78
Receivables from associates and joint ventures 28 46
Corporation tax and joint taxation contribution, receivable, reference is made to note 2.7 27 31
Other receivables and current assets
562 391
2,631
The carrying amount of receivables is in all material
respects equal to the fair value. None of the trade receiv-
ables with collateral are overdue at 31 December 2020
DKK million 2020
Days past due:
267 378
66 102
37 63
6 47
More than 120 days 14 87
Past due, but not impaired
DKK million 2020
Movements in write-downs, which are included in the trade receivables:
Write-downs at 1 January 69 80
Foreign exchange adjustment 0
Addition on acquisition of enterprises 0 3
Write-downs 16 13
Realised losses
Reversed write-downs
63
3.2 Net Working Capital
Consolidated Financial Statements
DFDS Annual Report 2020
DKK million 2020
Days past due:
1 3
1 1
2 3
2 1
More than 120 days 58 61
63
The last five years DFDS’ realised credit losses on trade re-
ceivables have been insignificant and the loss rate has not
respective years. The changes in payment pattern continue
to be insignificant and at the same level as previous years
-
ingly, at year-end 2020 the expected credit losses on trade
receivables calculated under the simplified expected cred-
it loss model is based on the average historical loss rate on
adjustments for forward-looking factors where considered
Receivables are recognised at amortised cost less ex-
pected credit losses.
DFDS’ risks regarding trade receivables are not consid-
ered unusual and no material risk is attributable to a
single customer or group of customers. According to
the Group’s policy of undertaking credit risks, credit
ratings of significant customers are performed at least
once a year.
Write-downs on trade receivables are based on the
simplified expected credit loss model. Credit loss al-
lowances on individual receivables are provided for
when objective indications of credit losses occurs
such as customer bankruptcy and uncertainty about
the customers’ ability and/or willingness to pay, etc. In
addition to this, allowances for expected credit losses
are made on the remaining trade receivables based on
a simplified approach.
Contract assets comprise work in progress services
where the customer has not been invoiced yet. Work
in progress services is measured based on the value
of the of the work performed as of the balance sheet
date.
Write-downs and realised losses on trade receivables
and work in progress services are recognised in ferry
and other ship operation and maintenance costs in the
Income statement.
Other receivables comprise other trade receivables;
insurance receivables on loss or damage of ferries and
other ships; financial lease receivables; outstanding
balances for chartered ferries; interest receivable, etc.
3.2.2 Inventories
DKK million 2020
Bunker 102 133
Goods for sale 77 89
Write-down of inventories end of year
Write-down of inventories expensed during the year
Bunker are measured at cost based on the FIFO method
or the net realisable value where this is lower. Catering
supplies are measured at cost based on the weighted
average cost method or the net realisable value where
this is lower. Other inventories are measured at cost
based on the weighted average cost method or the net
realisable value where this is lower.
3.2.3 Other payables
DKK million 2020
388 379
83 59
Payables to associates and joint ventures 51 109
Other payables 189 131
Accrued interests 14 12
725
Other payables comprise amounts owed to staff,
including wages, salaries holiday pay, salary/wag-
es related items, etc.; amounts owed to the public
authorities, VAT, excise duties, real property taxes,
etc.; amounts owed in connection with the purchase/
disposal of ferries and other ships, buildings and ter-
minals; accrued interest expenses; payables to asso-
ciates and joint ventures; amounts owed in relation to
defined contribution pension plans etc.
3.2.1 Receivables (continued)
Consolidated Financial Statements
DFDS Annual Report 2020
3.2.4 Pension and jubilee liabilities
The Group contributes to defined contribution plans as
well as defined benefit plans. The majority of the pen-
sion plans are funded through payments of contributions
to independent insurance companies responsible for the
pension obligation towards the employees (defined con-
tribution plans). In these plans the Group has no legal or
constructive obligation to pay further contributions irre-
spective of the financial situation of these insurance com-
panies. Pension costs from such plans are expensed in the
Income statement when incurred.
benefit plans. In addition there are minor defined benefit
plans in Norway, Belgium, Italy, Turkey, Lithuania, France,
-
-
ligation. The majority of the defined benefit plans are pen-
sion plans that yearly pay out a certain percentage of the
employee’s final salary upon retirement. The pensions are
paid out as from retirement and during the remaining life
of the employee. The percentage of the salary is depend-
ent of the seniority of the employee except for certain-
minor plans. The defined benefit plans typically include a
spouse pension and disability insurance.
Some of the pension plans in Sweden are multi-employ-
er plans, which cover a large number of enterprises. The
plans are collective and are covered through contribu-
tions paid to the pension company Alecta. The Swedish
Financial Accounting Standards Council’s interpretations
committee (Redovisningsrådet) has defined this plan as
a multi-employer defined benefit plan. Presently, it is not
possible to obtain sufficient information from Alecta to
assess the plans as defined benefit plans. Consequently,
the pension plans are similarly to prior years treated as
defined contribution plans. The contributions are DKK 4m
Alecta amounts to 144% as per September 2020 (Septem-
to be DKK 5m. DFDS’ share of the multi-employer plan is
around 0.0046% and the liability follows the share of the
total plan.
Based on actuarial calculations the defined benefit plans show the following liabilities:
DKK million 2020
Present value of funded defined benefit obligations 1,010 990
Fair value of plan assets
Funded defined benefit obligations, net 131
Present value of unfunded defined benefit obligations 45 41
Recognised liabilities for defined benefit obligations 176
Provision for jubilee liabilities 21 22
160
DKK million 2020
Movements in the net present value of funded and unfunded defined benefit obligations
Funded and unfunded obligations at 1 January 1,031 962
Foreign exchange adjustments 56
Current service costs 8 8
Interest costs 18 27
12
90 102
Past service costs 1 0
Benefits paid
Settlements and curtailments
1,055 1,031
Movements in the fair value of the defined benefit plan assets
Plan assets at 1 January
Foreign exchange adjustments 54
Calculated interest income
Return on plan assets excluding calculated interest income
Costs of managing the assets 4 4
Employer contributions
Benefits paid 38 40
Settlements and curtailments 0 3
Plan assets consist of the following:
Cash and cash equivalents
Blended investment funds
Other assets (primarily insured plans)
Consolidated Financial Statements
DFDS Annual Report 2020
DKK million 2020
Current service costs 8 8
Past service costs 1 0
0
7
Interest costs 18 27
Interest income
2 6
14
Remeasurements of plan obligations 101 23
Remeasurements of plan assets
Actuarial calculations or roll forward calculations are per-
formed annually for all defined benefit plans. Assumptions
regarding future mortality are based on actuarial advice
in accordance with published statistics and experience in
each country. The following significant assumptions have
been used for the actuarial calculations:
2020
Kingdom Others
Weighted
average
Discount rate 1.2% 1.2%
Social security rate
0.0% 0.0%
Future salary increase
0.0% 0.1%
Future pension increase 2.9% 2.8%
Inflation 2.3% 2.3%
Kingdom Others
Weighted
average
1
Discount rate 1.9% 1.9%
Social security rate
0.0% 0.0%
Future salary increase
0.0% 0.1%
Future pension increase 3.1% 3.0%
Inflation 2.2% 2.2%
Significant actuarial assumptions for the determination of
the retirement benefit obligation are discount rate, expect-
ed future remuneration increases, and expected mortality.
The sensitivity analysis below has been determined based
on reasonably likely changes in the assumptions occurring
at the end of the period.
DKK million 2020
Sensitivity analysis
Reported obligation 31 December 1,055 1,031
1,157 1,128
965 946
1,053 1,030
1,057 1,033
1,022 993
1,103 1,075
Weighted average duration on the liabilities end of 2020 is
The Group expects to make a contribution of DKK 28m to the
defined benefit plans in 2021. The expected contribution for
2020 was DKK 28m, which turned out to be DKK 25m.
DKK million
Maturity analysis of the obligations 2020
27 28
113 109
After 5 years 915 895
1,055 1,031
Significant accounting estimates and assessments
The Group’s defined benefit pension plans are calculat-
ed on the basis of a number of key actuarial assump-
tions, including discount rate, the anticipated returns
on the plans’ assets, the anticipated development in
wages and pensions, anticipated mortality, etc. Even
moderate alterations in these assumptions can result
in significant changes in pension liabilities.
The value of the Group’s defined pension benefit plans is
based on calculations undertaken by external actuaries.
All factors are weighted at the
pro rata share of the individu-
al actuarial obligation.
Schemes closed for new
members will have a social
security rate and future salary
increase of 0%.
3.2.4 Pension and jubilee liabilities (continued)
Consolidated Financial Statements
DFDS Annual Report 2020
Contributions to defined contribution pension plans
are recognised in the Income statement in the period in
which they relate, and any payable contributions are
accrued in the balance sheet as other payables.
As regards defined benefit pension plans, an actuarial
valuation of the value in use of future benefits payable
under the plan is made once a year. The value in use
is calculated based on assumptions of future devel-
opment in wage/salary levels, interest rates, inflation,
mortality, etc. The value in use is only calculated for
benefits to which the employees have become entitled
during their employment with the Group. The actuarial
calculation of the value in use less the fair value of
any assets under the plan is recognised in the balance
sheet under pension obligations. Pension costs of the
year are recognised in the Income statement based on
actuarial estimates and finance expectations at the
beginning of the year. The difference between the cal-
culated development in pension assets and liabilities
and the realised values are recognised in Other com-
prehensive income as actuarial gains and losses.
Changes in the benefits payable for employees’ past
service to the enterprise result in an adjustment of
the actuarial calculation of the value in use, which
is classified as past service costs. Past service costs
are recognised in the Income statement immediately
if the employees have already earned the right to the
adjusted benefit. Otherwise, the benefits will be recog-
nised in the Income statement over the period in which
the employees earn the right to the adjusted benefits.
Other non-current employee obligations include jubi-
lee benefits, etc.
3.2.5 Other provisions
DKK million 2020
Other provisions at 1 January 85 67
Foreign exchange adjustments 1
Addition from acquisition of enterprises
0 28
Provisions made during the year 151 28
Reversal of unused provisions
124
Other provisions are expected to be payable in:
78 38
37 39
After 5 years 9 8
124
of earn-out agreements regarding acquisitions; DKK 44m is
Provisions are recognised when, due to an event occur-
ring on or before the reporting date, the Group has a
legal or constructive obligation, and it is probable that
the Group will have to give up future economic bene-
fits to meet the obligation and that the obligation can
be reliably estimated. Provisions are recognised based
on Management’s best estimate of the anticipated ex-
penditure for settling the relevant obligation and are
discounted if deemed material.
2019: Relates to earn-out on
Freeco Logistics.
3.2.4 Pension and jubilee liabilities (continued)
Consolidated Financial Statements
DFDS Annual Report 2020
DKK million Note 2020
Interest-bearing liabilities
4.5 12,654 12,774
Derivative financial instruments, related to
interest-bearing activities, net 4.2 137 52
Receivables, interest-bearing 3.2.1
Securities 4.2
Cash
11,361
2,732 3,633
4.2 3.3
DKK 3,109m) relating to
lease liabilities that have
different characteristics than
other liabilities included in
interest-bearing liabilities.
purchase options are included
if the Group is reasonable
certain that these will be
exercised. These options are
not legally or contractually
obligated.
This section shows how the activities of DFDS are
financed. DFDS targets a financial leverage ratio be-
tween 2.0 and 3.0, where the ratio is measured as
The following section provides the notes of the main
-
ing Debt. Further more, the section includes infor-
mation on Financial and operational risks, Financial
instruments, Treasury shares, and Earnings per share.
4. Capital structure and finances
Consolidated Financial Statements
DFDS Annual Report 2020
DFDS’ risk management policy is governed by the DFDS
Treasury Policy, which is approved by the Board of Direc-
tors on an annual basis. The Financial Policy sets out the
framework, key policies, limits and guidelines for financial
risk management of DFDS. DFDS does not enter into specu-
lation. The most important risk factors managed financial-
-
es its capital structure as described below.
Bunker risk
In 2020 DFDS total bunker cost was DKK 1,314m or 9% of
the fluctuations in the bunker price constitute a significant
In the freight industry it is customary to pass through the
risk of fluctuations in bunker price and corresponding cur-
rency exchange rate risk to freight customers via a bunker
-
ations in the cost of bunker are reflected in the ticket price
to the extent possible.
bunker price exposure and corresponding currency risk is
passed through to freight customers via BAF agreements.
The remaining bunker price exposure is financially hedged
up to six quarters ahead in accordance with DFDS Treasury
Policy.
An increase in the bunker price of 10% compared to the ac-
tual bunker price during 2020 would have increased bun-
ker cost by DKK 7m for the Group in 2020 all else equal
have had a similar but positive effect.
An increase in the bunker price of 10% compared to the ac-
tual bunker price at balance sheet date would have had a
positive effect on the Group’s equity reserve for hedging of
bunker price would have had a similar but negative effect.
Interest rate risk
DFDS is primarily exposed to interest rate risk through
funding. According to DFDS Treasury Policy the interest
charter agreements must be fixed with a weighted average
swaps and caps to comply with this policy.
The total net interest-bearing debt (including currency
swaps on bonds and lease liabilities) amounts to DKK
Group’s total interest-bearing debt primarily consists of
partly secured credit facilities, unsecured corporate bonds
and floating rate mortgages with security in ferries and
other ships. The debt portfolio had an average time to ma-
As part of the financial strategy, interest rate swaps and
2,700m) have been established to reduce interest rate
risk in compliance with DFDS Treasury Policy. The share of
fixed-rate debt including interest rate derivatives was 39%
-
4.1 Financial and operational risks
An increase in the interest rate of 1%-point compared to
the actual interest rates in 2020 would have increased
net interest payments on long term debt incl. hedging by
39m). A decrease in the interest rates of 1%-point would
DKK 7m).
An increase in the interest rate of 1%-point compared to
the actual interest rate at balance sheet date would have
had a hypothetical positive effect on the Group’s equity
48m). A decrease would have had a negative effect of DKK
Currency risk
Approximately 95% of DFDS’ revenues in 2020 were in-
to reduce currency risk. In 2020 than 90% of customers
expenses are limited to salary- and certain port operation
costs while most other cash flows are in currencies other
Currency exchange risk is monitored continuously and ac-
tively hedged in accordance with DFDS Treasury Policy.
The aim is to actively reduce currency balance sheet and
expected currency cash flow exposure using forward ex-
a minor risk due to Denmark’s fixed exchange rate policy.
contracts in connection with hedging of future bunker
consumption, charter agreements, and payments under
shipbuilding contracts. Expected future cash flow in other
within the limits accepted in the Treasury Policy.
The operational currency cash flow is defined as the
Group’s consolidated net currency cash flows from rev-
enues and operational costs. The table below shows the
impact on the Group’s Operating profit before depreciation
exchange rate.
Consolidated Financial Statements
DFDS Annual Report 2020
-
wards related to ferries and
future bunker consumption
only affects equity.
4.1 Financial and operational risks (continued)
Operational currency cash flow risk
DKK million 2020
SEK, profit or loss effect, 10% strengthening 32 59
NOK, profit or loss effect, 10% strengthening 2 7
GBP, profit or loss effect, 10% strengthening 7
The Group’s most significant currency balance positions
investments and accounts payable and receivables. All
against DKK at balance sheet date would have increased/
decreased balance sheet items by the amounts presented
below.
Currency balance risk
DKK million 2020
SEK, equity and profit /loss effect, 10% strengthening 3
GBP, equity and profit /loss effect, 10% strengthening 4
NOK, equity and profit / loss effect, 10% strengthening 3 1
1 4
191 238
In addition to currency risk arising from operations, trans-
lation risk arise when foreign currency financial state-
ments of subsidiaries are translated into DKK as part of
the consolidation process. The Group’s most substantial
translation risks are in SEK, GBP, and NOK. The impact on
net profit from an increase of the average exchange rates
in 2020 is outlined in the table below.
DKK million 2020
SEK, equity and profit /loss effect, 10% strengthening 176 132
GBP, equity and profit /loss effect, 10% strengthening 169 31
NOK, equity and profit / loss effect, 10% strengthening 45 16
Liquidity risks
DFDS Financial Policy is to secure adequate liquidity to
meet financial and operational payment obligations by
maintaining a minimum cash resource of DKK 0,4bn in
2020 and from 2021 a minimum cash ressource of DKK
DKK 2,290m), of which undrawn committed and uncom-
DKK 1,450m).
DFDS contractual maturities of financial instruments, in-
cluding estimated interest payments and excluding the im-
pact of netting agreements are stated in the table below:
DKK million 2020
Non-derivative financial assets
Cash 1,261 0 0 0
Trade receivables including work in progress services 2,014 0 0 0
Receivables from associates and joint ventures 28 0 0 0
Other receivables and current assets 586 15 2 0
Non-derivative financial liabilities
Bank loans and mortgage on ferries and other ships
Issued corporate bonds 0
Other interest-bearing debt 0 0 0 0
Lease liabilities (undiscounted)
Trade payables 0 0 0
Payables to associates and joint ventures 0 0 0
Other payables 0 0 0
Bunker contracts 17 0 0 0
Interest swaps & caps 0 0 0 0
Forward exchange contracts and currency swaps 128 14 14 40
Bunker contracts 0 0 0 0
Interest swaps & caps 0 0
Cross currency interest rate swaps 0
Forward exchange contracts and currency swaps 0 0 0
467
Consolidated Financial Statements
DFDS Annual Report 2020
4.1 Financial and operational risks (continued)
DKK million
Non-derivative financial assets
Cash 840 0 0 0
Trade receivables including work in progress services 2,410 0 0 0
Receivables from associates and joint ventures 46 0 0 0
Other receivables and current assets 391 3 26 0
Non-derivative financial liabilities
Bank loans and mortgage on ferries and other ships
Issued corporate bonds 0
Other interest-bearing debt 0 0
Lease liabilities (undiscounted)
Trade payables 0 0 0
Payables to associates and joint ventures 0 0 0
Other payables 0 0 0
Bunker contracts 0 0 0 0
Interest swaps & caps 0 0 0 0
Forward exchange contracts and currency swaps 70 145 18 67
Bunker contracts 0 0 0
Interest swaps & caps 0 0
Cross currency interest rate swaps 0
Forward exchange contracts and currency swaps 0 0
The maturity analysis is based on undiscounted cash flows
including estimated interest payments. Interest payments
are estimated based on existing market conditions.
The undiscounted cash flows related to derivative finan-
cial liabilities are presented at gross amounts unless the
parties according to the contract have a right or obligation
to settle at net amount.
Credit risk
DFDS credit risk is primarily attributable to trade- and oth-
er receivables and cash. The receivables including work in
progress services are stated in the balance net of write-
downs. Reference is made to note 3.2.1 for a further infor-
mation on write-downs on trade receivables and work in
progress services.
According to the Group’s policy of undertaking credit risks,
credit ratings of all customers and other partners are per-
formed at least once a year. Customers have provided
bank guarantees for payments for the benefit of DFDS. for
-
tees regarding DFDS’ newbuilding program amount to DKK
DFDS’ credit risk towards financial counterparties primar-
ily relates to cash on bank accounts and positive market
values of derivatives. Credit limits on financial counter-
parties are calculated in accordance with DFDS Treasury
Policy based on credit ratings from international credit
rating agencies. Credit ratings and resulting credit limits
are monitored continuously.
Capital structure
Capital distribution to shareholders is based on a target
The target can be suspended in connection with large in-
vestments, acquisitions, and other strategic initiatives. At
-
termined based on the leverage target, including future
investment requirements, and distributed through share
buybacks.
Consolidated Financial Statements
DFDS Annual Report 2020
4.1 Financial and operational risks (continued)
DKK million
2020
Non-current assets of gains/losses recognised in the equity
transactions Hedge instrument
maturity
Notional
principal
amount
Fair
value
assets
Fair
value
liabilities
5 years
Fair value recognised on
hedging reserve in equity
Interest Interest swaps 1,866 0 0
Interest Caps 1,190 11 0 0 0 0 0 0
Goods purchased Oil contracts for forward delivery (tons) 79 17 0 17 0 0 0 17
Bond loans Currency swaps 882 0 0 0 0 0 0
Bond loans Cross currency interest rate swaps 282 0 0 0 0
Ferry investments & ferry charter
1
)
Forward exchange contracts 1,802 188 73 14 14 40 141
Sales and goods purchased Forward exchange contracts 699 10 2 0 0 0 2
225 11 10 40 147
For instruments used to
hedge ferry investments the
recycling from equity will be
recognised under non-current
tangible assets.
DKK million
Non-current assets of gains/losses recognised in the equity
transactions Hedge instrument
maturity
Notional
principal
amount
Fair
value
assets
Fair
value
liabilities
5 years
Fair value recognised on
hedging reserve in equity
Interest Interest swaps 1,199 0 0 0
Interest Caps 1,195 17 0 0 0 0 0 0
Goods purchased Oil contracts for forward delivery (tons) 33 0 0 0 0
Bond loans Currency swaps 948 0 0 0 0 0 0
Bond loans Cross currency interest rate swaps 303 0 0 0 2 0 2
Ferry investments & ferry charter
1
Forward exchange contracts 1,238 298 55 144 18 67 285
Sales and goods purchased Forward exchange contracts 547 2 0 0 0 0 0
45 136 20 67 266
In 2020 no financial hedges were deemed inefficient hence
no profit or loss was recognised in the income statement
in 2020.
The fair value of the interest swaps has been calculated
by discounting the expected future interest payments.
The discount rate for each interest payment is estimated
on the basis of a swap interest curve, which is calculated
based on market interest rates.
The fair value of forward exchange contracts and bunker
contracts is calculated based on actual forward curves in
DFDS’ Treasury system.
Consolidated Financial Statements
DFDS Annual Report 2020
4.2 Information on financial instruments
DKK million 2020
Carrying amount per category of financial instruments
Financial assets measured at fair value:
Derivatives, related to operating activities 214 300
Derivatives, related to interest-bearing activities 12 17
Financial assets measured at amortised cost:
Trade receivables, receivables from associates and joint ventures, other receivables and cash 3,827 3,670
Financial assets measured at fair value through profit or loss:
Securities 10 10
Financial liabilities measured at fair value:
Derivatives, related to operating activities
Derivatives, related to interest-bearing activities
Financial liabilities measured at amortised cost:
Interest-bearing liabilities, trade payables, payables to associates and joint ventures, and
other payables
Hierarchy of financial instruments measured at fair value
The table below ranks financial instruments carried at
fair value by valuation method. The different levels have
been defined as follows:
• Level 1: Quoted prices in an active market for identical
type of instrument, i.e. without change in form or content
(modification or repackaging).
• Level 2: Quoted prices in an active market for similar
assets or liabilities or other valuation methods where
all material input is based on observable market data.
• Level 3: Valuation methods where possible material in-
put is not based on observable market data.
DKK million
2020 Level 1 Level 2 Level 3
Derivatives, financial assets 0 226 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 0
0 25 10
Level 1 Level 2 Level 3
Derivatives, financial assets 0 317 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 0
0 10
Derivative financial assets and liabilities are all measured
at level 2. Reference is made to note 4 .1 for description of
the valuation method.
Securities, financial assets measured at fair value through
profit or loss comprise other shares and equity invest-
DKK 10m). These are some minor unlisted shares and in-
vestments.
Transfers between levels of the fair value hierarchy are
considered to have occurred at the date of the event or
change in circumstances that caused the transfer. There
were no transfers between the levels in the fair value hier-
Significant accounting estimates and assessments
When entering into agreements involving derivatives,
Management assesses whether the derivative in ques-
tion meets the criteria for hedge accounting, including
whether the hedging relates to recognised assets and
liabilities, projected future cash flows, or financial
investments. Effectiveness tests are carried out, and
any inefficiency is recognised in the Income statement.
Consolidated Financial Statements
DFDS Annual Report 2020
4.3 Changes in liabilities arising from financing activities
The table below discloses the cash as well as non-cash
changes in interest-bearing liabilities and derivative fi-
nancial instruments related to issued corporate bonds.
The changes arising from cash flows form part of the cash
flows from financing activities in the Statement of cash
flows.
DKK million Non-cash changes
2020
Cash
flows
from
acquisitions
Foreign
exchange
move-
ments
New/
disposed/
re measured
leases
Fair
value
changes
Other
changes
2020
Changes in 2020
Interest-bearing liabilities:
Bank loans and mortgage
on ferries and
other ships 8,381 202 0 0 0 5 8,557
Issued corporate bonds 1,249 0 0 0 0 1 1,162
Lease liabilities 3,109 0 505 0 0 2,926
Other liabilities 35 0 0 0 0 0 9
12,774 0 505 0 12,654
instruments:
Derivatives related to
issued corporate bonds 55 0 0 0 0 84 0 140
financing activities 0 505
Derivatives financial instruments are measured in the
balance sheet at fair value as from the date where
the derivatives financial instrument is concluded. The
fair values of derivatives financial instruments are
presented as derivatives financial instruments un-
der asssets if positive or under liabilities if negative.
Netting of positive and negative derivatives financial
instruments is only performed if the Group is entitled
to and has the intention to settle more derivatives
financial instruments as a net. Fair values of deriva-
tives financial instruments are computed on the basis
of current market data and generally accepted valua-
tion methods.
Fair value hedge
Changes in the fair value of financial instruments des-
ignated as and qualifying for recognition as a fair val-
ue hedge of recognised assets and liabilities are recog-
nised in the Income statement together with changes
in the value of the hedged asset or liability based on
according to agreements (firm commitments), except
for foreign currency hedges, is treated as a fair value
hedge of a recognised asset and liability.
Cash flow hedge
Changes in the fair value of financial instruments des-
ignated as and qualifying for cash flow hedging and
which effectively hedge changes in future cash flows,
are recognised in Other comprehensive income.
The change in fair value that relates to the effective
portion of the cash flow hedge is recognised as a sep-
arate equity reserve until the hedged cash flow im-
pacts the Income statement. At this point in time the
related gains or losses previously recognised in Other
comprehensive income are transferred to the Income
statement into the same line item as the hedged item
is recognised.
results in the recognition of a non-financial asset, the
gains or losses previously recognised in Other com-
prehensive income are transferred from equity and
included in the initial measurement of the cost of the
non-financial asset.
For derivative financial instruments that no longer
qualify for hedge accounting, the hedge is dissolved
prospectively. The accumulated fair value in equity is
immediately transferred to the Income statement into
the same line item as the hedged item is recognised.
Other financial instruments
For financial instruments that do not fulfil the re-
quirements of being treated as hedge instruments, the
changes in fair value are recognised successively in
the Income statement as Financial income and cost.
4.2 Information on financial instruments (continued)
100 Consolidated Financial Statements
DFDS Annual Report 2020
4.4 Financial income and costs
DKK million 2020
Financial income
Interest income from banks, etc.
4 5
Other dividends 0 0
Other financial income 0 0
Total financial income 5 6
Financial costs
Interest expense to banks, credit institutions, corporate bonds, etc.
Interest expense on lease liabilities, reference is made to note 3.1.3
Foreign exchange loss, net
0
Defined benefit pension plans, reference is made to note 3.2.4
Other financial costs
Transfer to assets under construction
10 10
Total financial costs -280 -284
Financial income and costs, net
Financial income and costs comprise interest income
and costs; realised and unrealised gains and losses on
receivables, payables and transactions denominat-
ed in foreign currencies; realised gains and losses on
securities; amortisation of financial assets and liabil-
ities; interests on leasing agreements; bank charges
and fees etc. Also included are realised and unrealised
gains and losses on derivative financial instruments
that are not designated as hedges.
4.3 Changes in liabilities arising from financing activities (continued)
DKK million Non-cash changes
Change in
accounting
policies
Cash
flows
from
acquisi-
tions
Foreign
exchange
move-
ments
New/
disposed/
re measured
leases
Fair
value
changes
Other
changes
Interest-bearing
liabilities:
Bank loans and
mortgage on
ferries and
other ships 7,508 0 859 6
2 0 0 6 8,381
Issued corporate
bonds 1,433 0
0 11 0 0 1 1,249
Lease liabilities 292
2,765
71
6 680 0 0 3,109
Other liabilities 24 0 0 0 0 0 0 11 35
9,257 2,765 78 19 680 0 18 12,774
financial
instruments:
Derivatives
related to issued
corporate bonds 62 0 0 0 0 0 0 55
from financing
activities 2,765
1
Relates to IAS 17 Finance
leases.
2
Relates to the implementation
of IFRS 16 ‘Leases’.
3
In 2019 cash flows from issu-
ing corporate bonds amounts
to DKK 304m and cash flows
to repayment of corporate
bonds amounts to DKK -500m
corresponding to a net cash
flow of DKK -196m.
4
Relates to the acquisitions of
Logistics, reference is made to
note 5.5.
5
Primarily related to financial
assets/liabilities measured at
amortised cost. Income (net)
from interest swaps is DKK
4m (2019: DKK 9m) and is in-
cluded under Interest expense
to banks, credit institutions,
corporate bonds, etc.
6
Foreign exchange gains in
2020 amounts to DKK 266m
(2019: DKK 125m) and foreign
exchange losses amounts to
DKK 266m (2019: DKK 142m)
for the Group.
7
Other financial costs contains
bank charges, fees, early
repayment fees, commitment
fees and creditline fee.
Interest capitalised on three
newbuildings (2019: five new-
buildings). The interest was
calculated by using a general
interest rate of 1.30% p.a.
(2019: 0.87% - 1.30% p.a.).
101 Consolidated Financial Statements
DFDS Annual Report 2020
DKK million 2020
Allocation of currency, principal nominal amount:
DKK 2,126 1,578
7,836 8,422
NOK
1,200 1,347
GBP 1,130 1,323
188 30
SEK 142 37
Other 32 37
12,654 12,774
Interest-bearing liabilities comprise amounts owed
to mortgage/credit institutions and banks as well as
amounts owed to owners of issued corporate bonds
including liabilities arising from derivatives relating
to issued corporate bonds. The amounts are initially
recognised at fair value net of transaction expenses.
Subsequently, the financial liability is measured at
amortised cost, corresponding to the capitalised value
using the effective interest method, so that the differ-
ence between the proceeds and the nominal value is
recognised in the Income statement under ‘financial
costs’ over the term of the loan.
Interest-bearing liabilities also include capitalised
residual lease obligations on finance leases. Other li-
abilities are recognised at amortised cost, which cor-
responds to the net realisable value in all material
respects.
4.5 Interest-bearing liabilities
DKK million 2020
Bank loans and mortgage on ferries and other ships 8,151 7,901
Issued corporate bonds
1,162 1,249
Lease liability 2,407 2,556
Other non-current liabilities 0 35
11,720 11,742
Bank loans and mortgage on ferries and other ships 407 480
Issued corporate bonds
0 0
Lease liability 519 552
Other current liabilities 8 0
1,032
12,654 12,774
In June 2019 DFDS issued a new five year bond of NOK
priced at par. The bond was immediately swapped into
Danish kroner and fixed interest. The purpose of the bond
issued was to refinance existing bonds and extend debt
maturity as well as for general corporate purposes.
In connection with the delivery of two new freight ferries
in 2020 DFDS obtained two new mortgage loans; one loan
of DKK 364m with a maturity of 12 years and a repayment
profile of 15 years and one loan of DKK 352m with a matu-
rity of 12 years and a repayment profile of 15 years. Both
mortgage loans are CIBOR based.
In connection with the delivery of three new freight ferries
in 2019 DFDS obtained three new mortgage loans; two fer-
ry loans of each DKK 365m with a maturity of 7 years and
a repayment profile of 20 years and one ferry loan of DKK
364m with a maturity of 12 years and a repayment profile
of 15 years. All three mortgage loans are CIBOR based.
The fair value of the interest-bearing liabilities amounts
measurement is categorised within level 3 in the fair value
hierarchy except for the part that relates to issued corpo-
rate bonds of nominal NOK 1,250m for which the fair value
measurement is categorised within level 1.
The fair value of the financial liabilities is determined as
the present value of expected future repayments and in-
terest rates. The Group’s actual borrowing rate for equiv-
alent terms is used as the discount rate. The fair value
of the issued corporate bonds nominal NOK 1,250m has
been calculated based on the quoted bond price in May
-
rate bonds nominal NOK400m has been calculated based
on the quoted bond price in June 2019 which is the latest
DKK 2,778m of the interest-bearing liabilities fall due after
connection with the borrowings are made. The loan agree-
ments can be settled at fair value plus a small surcharge,
whereas premature settlement of the corporate bonds re-
quires a repurchase of the bonds.
The covenants of a loan agreement — entered into in June
— were adapted in June 2020 to reflect the uncertainty
-
evant covenant risk.
Reference is made to note 4.1 for financial risks, etc.
The Group has issued two 5
year corporate bond loans;
one in 2019 of nominal NOK
400m and one in 2017 of
nominal NOK 1,250m respec-
tively (2019: one in 2019 of
nominal NOK 400m and one in
2017 of nominal NOK 1,250m
respectively).
In 2017 DFDS issued a five-
year corporate bond of NOK
1,250m, which runs for the
period 28 September 2017
until 28 September 2022.
The bond is listed on the Oslo
Stock Exchange. The five-year
bond has been issued with a
floating rate based on three
in NOK, but swapped to CIBOR
2019 DFDS issued a five-year
corporate bond of NOK 400m,
which runs for the period 7
June 2019 until 7 June 2024.
The bond is listed on the Oslo
Stock Exchange. The five-year
bond has been issued with a
floating rate based on three
in NOK, but swapped to CIBOR
102 Consolidated Financial Statements
DFDS Annual Report 2020
(continued)
In accordance with the Annual General Meeting in June
2020 the Board of Directors is authorised – until 4
June 2024 – to acquire treasury shares up to 5,860,000
shares corresponding to a nominal share value of DKK
capital. The price cannot deviate by more than 10% from
the listed acquisition price on NASDAQ Copenhagen at the
time of acquisition.
-
nection with employees’ exercise of share options/jubilee
shares and sale of treasury share to a joint venture in order
for this entity to accommodate its employees’ exercise of
jubilee shares, respectively.
The Parent Company’s holding of treasury shares at 31 De-
of the Parent Company’s share capital. Treasury shares are
held to cover the share option scheme and restricted stock
unit plan for employees.
Proposed dividend is recognised as liabilities at the
date on which they are adopted at the annual general
meeting (time of declaration). The expected dividend
payment for the year is disclosed as a separate item
in the equity.
Reserve for treasury shares
The reserve comprises the nominal value of treasury
shares. The difference between the market price paid
and the nominal value as well as dividend on treasury
shares are recognised directly in equity under retained
earnings. The reserve is a distributable reserve.
Currency translation reserve
of currency translation adjustments arising on the
translation of net investments in enterprises with a
functional currency other than DKK. The reserve is dis-
solved upon disposal of the entity.
Reserve for hedging
The hedging reserve comprises the fair value of hedg-
ing transactions that qualify for recognition as cash
flow hedges and where the hedged transactions have
hedging instrument matures or if a hedge is no longer
effective.
Number of shares 2020
Treasury shares at 1 January 1,421,256 1,463,253
Disposal of treasury shares due to exercise of share options and jubilee shares
Disposal of treasury shares 0
1,421,256
Market value of treasury shares based on quoted share price at 31 December, DKK
million 346 462
2020
442 1,313
433
Weighted average number of issued ordinary shares 58,631,578 58,631,578
Weighted average number of treasury shares
Weighted average number of circulating ordinary shares 57,310,338 57,196,380
Weighted average number of share options issued 306 199,814
Weighted average number of circulating ordinary shares (diluted) 57,310,644
7,56 22.88
7,56 22.80
When calculating diluted earnings per share for 2020,
have been omitted as they are out-of-the-money, but po-
tentially the share options might dilute earnings per share
in the future.
103 Consolidated Financial Statements
DFDS Annual Report 2020
5.1 Remuneration to Executive Board and Board of Directors ....................................... 105
5.2 Fees to Auditors appointed at the Annual General Meeting ..................................... 106
5.3 Share options ............................................................................... 106
5.4 Cash flow .................................................................................. 107
5.5 Acquisitions and sale of enterprises, activities and non-controlling interests ..................... 108
5.6 Guarantees, collateral and contingent liabilities ............................................... 110
5.7 Contractual commitments and operational lease .............................................. 110
5.8 Related party transactions .................................................................. 110
............................................................................. 111
5.10 Events after the balance sheet date .......................................................... 111
5.11 Company overview .......................................................................... 112
5. Other notes
104 Consolidated Financial Statements
DFDS Annual Report 2020
Remuneration for the Executive Board
Niels Smedegaard
DKK ‘000 2020 2020 2020 2020
Wages and salaries 6,900 6,432 4,000 - - 4,618 11,050
Bonus 2.208 1,500 1,335 - - 1,847 3,543 3,347
Defined contribution pension plans 690 643 400 - - 462 1,105
Share based payment 1,866 1,547 434 - - 1,562 2,300
Other employee costs 333 353 192 - - 262 525 615
10,475 6,361 - -
The termination period for the Executive Board is 12
months. Further, the CEO has additional 12 months redun-
dancy payment. In connection with a change of control of
the Group, the members of the Executive Board can – with-
in the first 3 months of the event - terminate their employ-
ment with the same effect as if the Company had given no-
tice of termination of employment to the Executive Board.
DKK ‘000 2020
Board:
1,125 1,031
Klaus Nyborg, Deputy Chair 750 675
375 356
375 356
Jill Lauritzen Melby 375 356
375 356
Jens Otto Knudsen 375 356
375 356
375 187
- 75
4,500 4,104
DKK ‘000 2020
250 238
125 63
Jill Lauritzen Melby 125 119
- 31
- 25
500 476
Nomination Committee:
100 88
Klaus Nyborg 100 88
Marianne Dahl 100 88
300 264
5,300
Remuneration to the chair of the Audit Committee is DKK
-
119k) each. Remuneration to each of the three members of
No remuneration is paid to members of other committees.
Torben Carlsen was appointed
new CEO 1 May 2019 (previ-
ously CFO since 1 June 2009).
Karina Deacon was appointed
new CFO 1 January 2020.
Niels Smedegaard resigned as
CEO at 30 April 2019.
105 Consolidated Financial Statements
DFDS Annual Report 2020
DKK million 2020
Audit fees 7 6
Other assurance engagements
0 0
Tax and VAT advice
0 2
Non-audit services
0 1
Fees for services other than the statutory audit of the
-
kendt Revisionspartnerselskab, Denmark amounted to
opinions and agreed-upon procedures, as well as tax and
accounting advice.
Other assurance engagements
amounted to DKK 0.5m (2019:
DKK 0.3m) and primarily
include review of regulatory
financial statements.
Tax and VAT advice amounted
to DKK 0.3m (2019: DKK
1.9m) and comprise advice in
relation to acquisition of en-
terprises, review of tax return
and employee tax assistance
and compliance.
Non-audit services amounted
to DKK 0.3m (2019: DKK
1.1m) and comprise advice
in relation to acquisition of
enterprises and fees for other
services.
5.3 Share options (continued)
Board
Number
Leading
employees
Number
Resigned
Board members
and employees
Number
exercise
price per
option
Outstanding at 1 January 277,767 331,863 4,196 613,826 333.66
Transferred between categories 252,694 0 343.48
Granted during the year 122,147 150,423 0 272,570 331.81
Exercised during the year 0 186.67
Forfeited during the year 0 0 354.56
167,540 763,206 337.63
Of this exercisable at the end of the year 42,052 95,400 56,070 193,522 258.47
The share options granted in 2020 had a fair value of DKK
5,425 share options have been exercised during 2020
Vesting of share options is expensed in the Income state-
-
for measuring share options. The outstanding options at
31 December 2020 have an average weighted remaining
Assumptions concerning the calculation of fair value at time of grant:
Year of grant
price
Market
price at
grant date
volatility
Risk-free
interest
rate
dividend per
at grant date
term
Fair value
per option
at time of
granting
2020 314.00 262.40 27.27% 9.00 3 years 19.67
2019, November 291.00 273.40 26.86% 11.00 27 months 25.28
2019, February 335.00 306.60 27.99% 9.00 3 years 34.19
2018 383.00 331.60 27.87% 11.00 3 years 30.48
2017 390.00 377.40 28.66% 8.00 3 years 54.00
2016 262.00 246.70 27.18% 5.00 4 years 35.66
The expected volatility for 2016 is based on the historic
volatility for the past 4 years. The expected volatility for
2017 to 2020 is based on the historic volatility for the
past three years. The risk free interest rate is for 2016
based on four year Danish government bonds and for 2017
to 2020 based on three year Danish government bonds.
5.3 Share options
The decision to grant share options is made by the Board of
Directors. Share options have been granted to the Executive
Board and leading employees. Each share option gives the
holder of the option the right to acquire one existing share
in the Parent Company of nominal DKK 20. The share option
schemes equal a right to acquire 2.0% of the share capital
Share options are granted in 2015 at an exercise price equal
to the average share price of the Parent Company’s shares
20 days before the grant with an addition of 5%. Share op-
the average share price of the Parent Company’s shares 20
days before the grant with an addition of 10%.
Vesting occurs on a straight line basis over three years from
the date of grant. Special conditions apply regarding illness
and death and if the capital structure of the Parent Compa-
ny is changed.
The share options can be exercised when a minimum of
three years and a maximum of five years have elapsed since
the grant dates.
Share options granted can only be settled with shares. A
part of the treasury shares is reserved for settling the out-
standing share options.
2020
Board
Number
Leading
employees
Number
Resigned
Board members
and employees
Number
exercise
price per
option
Outstanding at 1 January 182,693 412,973 167,540 763,206 337.63
Transferred between categories 0 89,447 0 339.74
Granted during the year 177,936 286,040 0 463,976 314.00
Exercised during the year 0 0 136.00
Forfeited during the year 0 0 331.65
604,141
Of this exercisable at the end of the year 69,830 126,732 121,359 317,921 314.27
106 Consolidated Financial Statements
DFDS Annual Report 2020
5.4 Cash flow
DKK million 2020
Non-cash operating items
Change in provisions 15 5
Change in write-down of inventories for the year 16 3
Change in provision for defined benefit plans and jubilee obligations 8 11
Vesting of share option plans expensed in the Income statement 7 7
Non-cash operating items 45 26
Change in working capital
Change in inventories 34
Change in receivables, such as trade receivables, prepaid costs, etc. 196
Change in current liabilities, such as trade payables, current account with
joint ventures, etc. 102
Change in working capital
The Cash flow statement has been prepared using the
indirect method, and shows the consolidated cash
flow from operating, investing, and financing activities
for the year, and the consolidated cash and cash equiv-
alents at the beginning and end of the year.
The cash flow effect of acquisition and disposal of
enterprises is shown separately in cash flows to/from
investing activities.
Cash flows from acquisitions of enterprises are rec-
ognised in the Cash flow statement from the date of
acquisition. Cash flows from disposals of enterprises
are recognised up until the date of disposal.
Cash flow from operating activities is calculated on
the basis of the profit/loss before amortisation and de-
cash flow effect of special items, non-cash operating
items, changes in working capital (such as trade paya-
bles, current account payables to joint ventures, trade
receivables, prepaid costs, etc.), payments related to
pensions and other provisions, payments relating to
financial items and corporation tax paid.
Cash flow from investing activities includes payments
in connection with the acquisition and disposal of en-
terprises and activities and of non-current intangible
assets, tangible assets and investments.
Cash flow from financing activities includes changes
in the size or composition of the Group’s share capi-
tal, payment of dividends to shareholders, purchase of
treasury shares, cash received from exercise of share
options and the obtaining and repayment of bank
loans and mortgage loans and other long-term and
short-term debt. Payment of lease liablities is includ-
ed under financing activities and the related interest is
included as a financial item under operating activities.
Cash and cash equivalents comprise cash at banks and
on hand.
5.3 Share options (continued)
In recognition of the contribution made by DFDS’ employees
in recent years to the company’s growth and to celebrate the
company’s 150 year anniversary, the Board of Directors has
awarded 30 shares free of charge to each full time employee.
which contains certain conditions to be eligible for the
shares. Only employees that are employed as per 1 Decem-
ber 2016 and continuously work until 1 February 2020 will
receive the shares. Employees working more than 24 hours
per week will get 30 shares, if they work more than 12 hours
and up to 24 hours per week they get 20 shares and if they
work up to 12 hours per week they get 10 shares. If an em-
ployee retires or has to leave his job because of disability
during the period until 1 February 2020 he/she is entitled to
the full number of shares when he/she leaves.
In total 7,751 employees are at award date entitled to the
shares. Based on historical attrition rates for each country
the total expected number of shares to be transferred to
the employees is 187,235 with a total fair value of DKK
55m, which is expensed under Special items over the vest-
ing period.
159,939 Jubilee shares have been transferred during 2020
-
ing of Jubilee shares is an income in the Income statement
Year of grant
price
Market
price at
grant date
volatility
Risk-free
interest
rate
dividend per
at grant date
term
Fair value
per share
at time of
granting
Jubilee shares, December 2016 0.00 319.60 28.65% 8.00 3 years 295.45
In recognition of the contribution made by DFDS’ employ-
ees in a year with exceptional challenges, the Board of Di-
rectors has 22 December 2020 awarded up to 50 shares
free of charge to each employee. The shares will vest over
a three-year period from January 2021 to December 2023.
The shares are in most countries awarded as a phantom
share programme whereby the entitled employees will re-
ceive a cash payment in December 2023 equal to the value
of 50 DFDS shares. The total number of employees eligi-
ble for the award of shares is around 8,000 and the total
value of awarded shares is around DKK 110m, which will
be proportionally expensed in the Income statement under
Employee costs over the vesting period.
The Group has set up equity-settled share option
plans. Part of the Parent Company’s holding of treas-
ury shares is used for the share option plan.
The value of services received in exchange for grant-
ed share options is measured at the fair value of the
share options granted.
The equity-settled share options are measured at the
fair value at grant date and recognised in the Income
statement under staff costs over the vesting period.
The counter posting is recognised directly in equity as
a shareholder transaction.
At initial recognition of the share options, an estimate
is made over the number of share options that the em-
ployees will vest, cf. the service conditions described
above in this note. Subsequent to initial recognition,
the estimate of share options to be vested is adjusted
whereby the total recognition is based on the actual
number of vested share options.
The fair value of the granted share options is calcu-
Terms and conditions for each grant are taken into ac-
count when calculating the fair value.
The share award programmes are recognised at fair
value over the vesting period and expensed as staff
cost. The accrual is recorded under Other payables or
on equity depending on whether settlement is done in
cash or shares, respectively.
107 Consolidated Financial Statements
DFDS Annual Report 2020
On 26 January 2021 DFDS entered into an agreement to
regulatory approval and completion of required employee
consultation processes.
Insignificant acquisitions
Colley Brothers Ltd. headquartered in Grimsby was com-
pleted and the DFDS Group obtained control. DFDS paid
DKK 18m for the acquired company. Cash in the acquired
company amounted to DKK 3m and accordingly the liquid-
ity effect was DKK 14m.
Acquisition - Huisman Group
In December 2019 the acquisition of the Dutch company
-
ed and the DFDS Group obtained control. The company has
the acquisition the DFDS Group has 100% ownership of the
acquired company and the acquired company is consoli-
dated in the DFDS Group from 31 December 2019.
B.V. and the acquired company is after the acquisition in-
DFDS paid DKK 77m for the acquired company. Cash in the
acquired company amounted to DKK 10m and accordingly
the liquidity effect in 2019 was DKK 67m. Trade receiva-
bles have been recognised at the acquisition date at a fair
value of DKK 28m which is DKK 1m less than their gross
value.
The goodwill is not deductible for tax purposes.
Transaction costs incurred were insignificant and were ex-
pensed in 2019 as part of Administration costs.
DKK million
Fair value at
acquisition date
Non-current assets 97
Current assets 40
136
Non-current liabilities 50
Current liabilities 47
Fair value of acquired net assets
Cash consideration 77
77
Goodwill at acquisition
-
nue or Group’s profit before tax in 2019.
In December 2019 the acquisition of the Finnish company
Freeco Logistics headquartered in Turku was completed
and the DFDS Group obtained control as from this date. The
20m. After the acquisition the DFDS Group has 100% own-
ership of the acquired company and the acquired company
is consolidated in the DFDS Group from 31 December 2019.
company is after the acquisition included in the Nordic
DFDS paid DKK 52m for the acquired company. Cash in the
acquired company amounted to DKK 2m and accordingly
the liquidity effect in 2019 was DKK 50m. In addition, an
earn-out agreement was entered into according to which
seller is entitled to additional payment based on the Free-
co Logistics’ financial performance for 2022 and 2023.
Trade receivables have been recognised at the acquisition
date at a fair value of DKK 23m which is DKK 1m less than
their gross value.
The goodwill is not deductible for tax purposes.
Transaction costs incurred were insignificant and were ex-
pensed in 2019 as part of Administration costs.
DKK million
Fair value at
acquisition date
Non-current assets 46
Current assets 26
72
Non-current liabilities 16
Current liabilities 28
44
Fair value of acquired net assets 27
Cash consideration 52
Estimated value of earn-out 28
Goodwill at acquisition 53
Freeco Logistics did not contribute to the Group’s total reve-
nue or Group’s profit before tax in 2019.
Consolidated Financial Statements
DFDS Annual Report 2020
Enterprises acquired or formed during the year are
recognised in the Consolidated Financial Statements
from the date of acquisition or formation. Enterprises
disposed are recognised in the Consolidated Financial
Statements until the date of disposal. The compara-
tive figures are not adjusted for acquisitions or dis-
posals.
Business combinations where control is obtained by
the DFDS Group are recognised using the acquisition
method. The identifiable assets, liabilities and con-
tingent liabilities of newly-acquired enterprises are
assessed at their fair value on the acquisition date.
Identifiable intangible assets are recognised if they are
separable or arise from a contractual right. Deferred
tax related to the revaluations is recognised.
The acquisition date is the date on which the DFDS
Group obtains actual control over the acquired enter-
prise.
Positive differences (goodwill) between, on the one
hand, the purchase price, the value of minority inter-
ests in the acquired enterprise and the fair value of
any previously acquired shareholdings, and, on the
other hand, the fair value of the acquired identifiable
assets, liabilities and contingent liabilities are recog-
nised as goodwill under non-current intangible assets.
Goodwill is not amortised, but is tested annually for
impairment. The first impairment test is performed be-
fore the end of the acquisition year.
cash-generating units, which subsequently form the
basis for the impairment test. Allocation of goodwill
to cash-generating units is described in sections 3.1.1
and 3.1.5.
Goodwill and fair value adjustments in connection
with the acquisition of a foreign enterprise with a dif-
ferent functional currency than the DFDS Group’s pres-
entation currency are treated as assets and liabilities
of the foreign enterprise, and are translated and con-
verted at first recognition to the functional currency
of the foreign enterprise at the exchange rate on the
transaction date.
The purchase consideration of an enterprise is the fair
value of the agreed payment in the form of assets
transferred, liabilities assumed, and equity instru-
ments issued to seller. If part of the consideration is
contingent on future events or fulfilment of agreed
conditions, this part of the consideration is recognised
at fair value at the date of acquisition. Costs attribut-
able to business combinations are recognised directly
in the Income statement when incurred.
If, at acquisition date, uncertainty exist regarding the
identification and measurement of acquired assets,
liabilities or contingent liabilities, or determination of
the purchase price, initial recognition and measure-
ment is done based on preliminary values. The prelimi-
nary values may be adjusted until 12 months from the
acquisition date, provided the initial recognition was
preliminary or incorrect. Changes in estimates regard-
ing contingent considerations are recognised in the
Income statement as Special items.
Incremental acquisitions after control has been ob-
tained, i.e. purchase of minority interests, are recog-
nised directly in equity. Disposal of minority interests
not resulting in loss of control is likewise recognised
directly in equity.
Gains or losses on disposal of subsidiaries, associates
and joint ventures are calculated as the difference
between the disposal consideration and the book
value of net assets at the date of disposal, including
the book value of goodwill, accumulated exchange
gains and losses previously recognised in the equity
as well as anticipated disposal costs. Exchange rate
adjustments attributable to the Group’s ownership in-
terest, and which previously were recognised directly
in equity, are included in the calculation of the gain/
loss. Any retained participating interests are measured
at their fair value at the time at which the controlling
influence was lost.
(continued)
Insignificant acquisitions
On 12 July 2019 the acquisition of stevedoring activ-
ities from the Belgium company Gezworen Wegers en
Meters Surveys b.v.b.a. was completed and the DFDS
Group obtained control as from this date. DFDS paid
DKK 10m for the acquired acitivities. As DFDS is the
main customer, the acquisition will not have material
impact on the DFDS Group’s revenue and result before
tax. Furthermore the Group has acquired one associated
company for DKK 4m.
During Q2 2019 the Group disposed two minor associated
companies.
than DKK 1m), equivalent to an ownership of 0.03%
-
will of less than DKK 1m) is recognised directly in equity.
Consolidated Financial Statements
DFDS Annual Report 2020
Contractual commitments in 2020 mainly relates to three
new buildings on order. One freight ferry (ro-ro) for delivery
in January 2021, and two freight and passenger ferries (ro-
The Group has a contractual commitment for a non-cancel-
lable lease contract for a freight and passenger ferry (ro-
pax) with delivery in Q3 2021. The future lease payment
The Group also has a contractual commitment for a con-
-
whaven route for two chartered freight and passenger fer-
ry (ro-pax). Further, contractual commitments includes a
in Denmark.
5.6 Guarantees, collateral and contingent liabilities
the Group. The Group has issued a guarantee for a terminal
agreement. In addition, the Group has issued an unlimit-
ed guarantee to cover any obligations under a Payment
Service Agreement for creditcard payments. The Group has
issued letter of support to cover total underfundings in
two defined benefit pension schemes in two English sub-
sidiaries. The total underfunding amount to DKK 129m
The Group is in 2020 as well as in 2019 part in various le-
gal disputes. The outcome of these disputes is not consid-
ered likely to influence DFDS financial position significant-
ly, besides what is already recognised in the balance sheet.
In one of the Group companies discovered in 2005, the
Group has during 2020 cleaned contaminated land. As
a part of the original purchase price for the company. the
seller of the land have made a deposit on a bank account
in DFDS’ name which cover the cleaned contaminated land.
Certain ferries with a total carrying amount of DKK 6,946m
mortgage on ferries and bank loans with a total carrying
cash was deposited on restricted bank accounts.
Significant accounting estimates and assessments
Provisions and contingencies
Management assesses provisions and contingencies
on an ongoing basis, as well as the likely outcome of
pending or potential legal proceedings, etc. Such out-
come depends on future events which are inherently
uncertain. In assessing the likely outcome of signifi-
cant legal proceedings, tax issues, etc., Management
uses external legal advisers as well as relevant case
law.
5.7 Contractual commitments
DKK million 2020
1,417 922
402 1,280
Contractual commitments, term after 5 years 527 492
Contractual commitments (undiscounted) 2,346
Lauritzen Fonden, Copenhagen with a nominal sharehold-
Accordingly, the members of the Board of Directors and
the Executive Board at Lauritzen Fonden as well as all
companies owned by Lauritzen Fonden are related parties.
Furthermore, related parties comprise DFDS’ Executive
Board and Board of Directors, leading employees and close
members of the family of those, DFDS’ subsidiaries, asso-
ciates and joint ventures, reference is made to note 5.10.
Apart from intra-group balances and transactions (primar-
ily charter hire, financing and commissions etc.), which
are eliminated on consolidation, usual Executive Board
and Board of Directors remuneration (reference is made
the below transactions, no related-party transactions have
been carried out during the year.
DKK million
2020
Sale of
services
Purchase
of services
Sale of
assets Receivables Liabilities
Impairment
loss of
receivables
Associates and joint ventures 21 175 0 28 51 0
Associates and joint ventures 14 142 0 46 109 0
5.7 Contractual commitments (continued)
110 Consolidated Financial Statements
DFDS Annual Report 2020
On 26 January 2021 DFDS entered into an agreement to
to take place in Q2 2021 subject to regulatory approval
and completion of required employee consultation
processes.
Information about judgements made in relation to Cov-
financial statement is included in the note.
DKK million 2020
Note
2.4 Employee cost
122
2.4 Employee cost Wages, salaries and remuneration 11
133
2.6. Special Items Termination cost in connection with restructuring
2.6 Special Items Impairment of a passenger ferry and terminal
Government grants
DFDS has taken part in various government compensa-
DKK 122m is reducing the staff costs in the Income
statement and contributions from voluntary salary a
reduction of DKK 11m are deducted in wages, salaries
and remuneration.
Impairment testing
In relation to the underlying assumptions for Impairment
taken into consideration and lead to an impairment of a
passenger ferry and terminal of DKK 100m.
Leases
-
ment to IFRS 16 leases) as of 28 May 2020, amending the
standard to provide DFDS with an exemption from assess-
-
ment and no reassessment nor renegotiations of rent con-
cessions have taken place.
Due to the reduced operational and financial visability
June 2020 decided not to pay out the proposed dividend
of DKK 4.0 for the financial year 2019.
1)
Contributions from Govern-
ment for wage subsidy are
included in employee costs.
DFDS took part in local
schemes during 2020.
2)
Restructuring costs related
to Covid-19 are included in
special items and consist of
termination costs related to
employees made redundant.
3)
Due to continued travel
restrictions an impairment
loss of DKK 100m has been
recognised under special
items relating to the business
unit “Passenger”
111 Consolidated Financial Statements
DFDS Annual Report 2020
5.11 Company overview
Company
Owner ship
share 2020
1
Country City Currency Share Capital
Parent Company
Denmark Copenhagen DKK 1,172,631,560
Subsidiaries:
DFDS Seaways NV
Belgium Gent 62,000
DFDS Logistics NV
Belgium Gent 297,472
DFDS Logistics Services NV Belgium Brugge 1,996,503
Gezworen Wegers en Meters Survey b.v.b.a. Belgium Gent 75,000
DFDS Logistics s.r.o.
Czech Republic
Prague CZK 1,100,000
DFDS Germany ApS
Denmark Copenhagen DKK 50,000
Denmark Esbjerg DKK 502,000
DFDS Seaways Newcastle Ltd. England Immingham GBP 8,050,000
DFDS Seaways Plc.
England Immingham GBP 40,250,000
DFDS Logistics Ltd.
England Immingham GBP 150,000
DFDS Logistics Services Ltd.
England Immingham GBP 100
England Immingham GBP 250,000
DFDS Logistics Contracts Ltd. England Immingham GBP 2,571,495
DFDS Pension Ltd. England Immingham GBP 165,210
England Immingham GBP 1,166
DFDS Logistics Property Ltd. England Immingham GBP 250,000
England Corby GBP 100
Colley Brothers limited England Grimsby GBP 4,000
DFDS Seaways OÜ Estonia Tallinn 3,800
Estonia Tallinn 3,000
Finland Kotka 58,866
(Formerly named: Freeco
Finland Turku 2,520
DFDS Logistics SARL France Boulogne sur Mer 30,000
DFDS Seaways S.A.S.
France Dieppe 37,000
Dunes Bail SNC
France Paris 1,000
Flandres Bail SNC
France Paris 1,000
DFDS Germany ApS & Co. KG
Germany Cuxhaven 25,000
DFDS Logistics Kft. (Formerly named:
Gyula 3,000,000
DFDS Logistics Contracts (Ireland) Ltd.
Ireland Dublin 200
DFDS Seaways Ireland Limited
Ireland Dublin 100
Samer seaports & terminals SRL 60.00 Italy Trieste 2,800,000
DFDS Logistics Baltic SIA Latvia Liepaja 113,886
DFDS Seaways SIA
Latvia Riga 99,645
AB DFDS Seaways
97.03 Lithuania Klaipeda 96,438,756
97.03 Lithuania Klaipeda 115,848
Company
Owner ship
share 2020
1
Country City Currency Share Capital
NorthSea Terminal AS Norway Brevik NOK 1,000,000
DFDS Logistics AS
Norway Lysaker NOK 20,538,000
DFDS Logstics Rederi AS
Norway Oslo NOK 49,980,000
DFDS Seaways AS
Norway Oslo NOK 12,000,000
Moss Container Terminal AS Norway Moss NOK 1,000,000
DFDS Polska Sp. Z.o.o.
Poland Poznan PLN 5,000
Portugal Porto 125,000
Romania Transport Group SRL Romania Tibod RON 1,000
DFDS Logistics East Russia Kaliningrad 48,000
DFDS Seaways Ltd.
Russia St. Petersburg 6,134,121
Spain Valencia 3,000
DFDS Seaways AB Sweden Gothenburg SEK 25,000,000
DFDS Logistics AB Sweden Gothenburg SEK 500,000
DFDS Logistics Contracts AB Sweden Gothenburg SEK 50,000
Sweden Gothenburg SEK 100,000
DFDS Logistics Services AB
Sweden Gothenburg SEK 1,100,000
DFDS Logistics Karlshamn AB Sweden Karlshamn SEK 1,800,000
DFDS Logistics Partners AB 85.00 Sweden Gothenburg SEK 1,000,000
DFDS Professionals AB Sweden Gothenburg SEK 25,000
DFDS Logistics BV the Netherlands Vlaardingen 454,780
DFDS Seaways BV the Netherlands Vlaardingen 18,400
the Netherlands Vlaardingen 40,000,000
DFDS Seaways IJmuiden BV
the Netherlands IJmuiden 18,000
Alphatrans International Trucking BV the Netherlands Brielle 18,000
Maxibas B.V. the Netherlands Wijchen 18,152
the Netherlands Wijchen 20,000
the Netherlands Wijchen 15,882
the Netherlands Wijchen 18,152
the Netherlands Wijchen 18,152
the Netherlands Wijchen 18,000
Turkey Istanbul 342,000,000
DFDS Denizcilik ve Tasimacilik A.S. 98.80 Turkey Istanbul 369,967,159
Turkey Istanbul 461,635,380
Turkey Istanbul 464,440,121
Turkey Istanbul 475,242,795
65.00 Sweden Gothenburg SEK 50,000
Mash Energy ApS
23.08 Denmark Kgs. Lyngby DKK 51,000
the companies are 100%
owned by DFDS Group.
Company is directly owned
by the Parent Company DFDS
A/S.
Company is controlled by
DFDS Group, but DFDS Group
has no ownership in the
company.
Due to minority protection in
the shareholders’ agreements
the DFDS Group does not have
a controlling interest.
Relief in accordance with Sec.
264b German Commercial
112 Consolidated Financial Statements
DFDS Annual Report 2020
114
115
Reports
DFDS Annual Report 2020
113 Reports
President & CEO Executive Vice President & CFO
Claus V. Hemmingsen Klaus Nyborg
Chair Vice Chair
114 Reports
DFDS Annual Report 2020
Report on the audit of the Consolidated Financial Statements
and Parent Company Financial Statements
Opinion
Basis for opinion
Independence
Appointment of auditor
Key audit matters
115 Reports
DFDS Annual Report 2020
statements
(continued)
Copenhagen, 23 February 2021
CVR no. 30 70 02 28
Torben Bender
State Authorised
Public Accountant
mne21332
Morten Weinreich Larsen
State Authorised
Public Accountant
mne42791
116 Reports
DFDS Annual Report 2020
Parent Financial
Statements
DFDS Annual Report 2020
117 Parent Financial Statements
Income statement 1 January – 31 December
DKK million Note 2020
Revenue 1 7,385 9,757
Costs:
Ferry and other ship operation and maintenance 2
Freight handling
Transport solutions
Employee costs 3
Cost of sales and administration 4
2,727
Profit on disposal of non-current assets, net 2 1
tangible assets and Right-of-use assets 5
104 1,011
Special items, net 6 106
1,117
Financial income 7 421 64
Financial costs 7
Profit before tax 135 1,052
Tax on profit 8 5
Profit for the year 140
Proposed profit appropriation
0
235
Retained earnings 140 814
140
1)
The Board of Directors propos-
es to the 2021 Annual General
Meeting that no dividends are
paid in 2021.
Due to the reduced opera-
tional and financial visability
caused by Covid-19 the
Annual General Meeting held
on 4 June 2020 decided not to
pay out the proposed dividend
of DKK 4.0 for the financial
year 2019.
Parent Financial Statements
DFDS Annual Report 2020
Statement of comprehensive income 1 January – 31 December
DKK million Note 2020
Profit for the year 140
Other comprehensive income
Items that are or may subsequently be reclassified to the Income statement:
Value adjustment of hedging instruments for the year 169
Value adjustment transferred to operating costs 6 12
Value adjustment transferred to financial costs 17 20
Value adjustment transferred to non-current tangible assets
Foreign exchange adjustments, goodwill 1
Foreign exchange adjustments, foreign branches 8
Tax on items that are or may be reclassified to the income statement 8 2
Items that are or may subsequently be reclassified to the Income statement
13 1,147
Parent Financial Statements
DFDS Annual Report 2020
Assets
DKK million Note 2020
Goodwill 116 116
Software 229 228
Development projects in progress 55 25
Non-current intangible assets 400
Land and buildings 1 1
Terminals 19 22
Ferries and other ships 4,445 3,906
Equipment, etc. 160 130
Assets under construction and prepayments 834 813
Non-current tangible assets 10
Right-of-use assets 11 1,404 1,839
Non-current Right-of-use assets 1,404
Investments in subsidiaries 12 6,756 5,920
Investments in associates, joint ventures and securities 14 14
Receivables 13 276 3
Prepaid costs 16 0
Derivative financial instruments 24 70 230
Other non-current assets 7,131 6,166
Non-current assets 13,246
Inventories 14 104 152
Receivables 13 1,753 2,878
Prepaid costs 68 94
Derivative financial instruments 24 144 70
Cash 735 656
Current assets
Asset classified as held for sale 37 0
17,236
Equity and liabilities
DKK million Note 2020
Share capital 17 1,173 1,173
Reserves 402 493
Retained earnings 7,808 7,440
Proposed dividend 0 235
Interest-bearing liabilities 20 2,898 2,955
Deferred tax 16 5 4
Pension and jubilee liabilities 18 7 8
Other provisions 19 34 33
Derivative financial instruments 24 149 69
Non-current liabilities
Interest-bearing liabilities 20 3,320 3,022
Trade payables 740 1,027
Other provisions 19 3 9
Corporation tax 0 4
Other payables 22 540 477
Derivative financial instruments 24 52 19
Prepayments from customers 105 130
Current liabilities 4,762
Liabilities 7,756
17,236
120 Parent Financial Statements
DFDS Annual Report 2020
Statement of changes in equity 1 January – 31 December 2020
Reserves
Share capital
reserve
Hedging
reserve
Reserve for
development
costs
shares
Retained
earnings
Proposed
dividend
1,173 1 266 254 7,440 235
Comprehensive income for the year
Profit for the year 140 140
Other comprehensive income
Items that are or may subsequently be reclassified to the Income Statement:
Value adjustment of hedging instruments for the year
Value adjustment transferred to operating costs 6 6
Value adjustment transferred to financial costs 17 17
Value adjustment transferred to non-current assets
Tax on items that are or may be reclassified to the income statement
Foreign exchange adjustments, goodwill 1 1
Foreign exchange adjustments, foreign branches
Items that are or may subsequently be reclassified to the Income statement 0 0 0 0
0 0 0 0
0 0 0 0
Cancellation of proposed dividend at year-end 2019
235 0
Proposed dividend at year-end
Vested share-based payments 8
Sale of treasury shares 1 19 20
Cash from sale of treasury shares related to exercise of share options 2 1
Capitalised development costs, additions 32 0
0 0 0 32 3
1,173 147 0
The Company’s share capital, which is not divided into dif-
ferent classes of shares, is divided into 58,631,578 shares
of DKK 20 each. All shares rank equally. There are no
restrictions on voting rights. The shares are fully paid up.
The Board of Directors proposes to the 2021 Annual
General Meeting that no dividends are paid in 2021.
1)
Due to the reduced opera-
tional and financial visability
caused by Covid-19 the
Annual General Meeting held
on 4 June 2020 decided not to
pay out the proposed dividend
of DKK 4.0 for the financial
year 2019.
121 Parent Financial Statements
DFDS Annual Report 2020
Statement of changes in equity 1 January – 31 December 2019
Reserves
Share capital
reserve
Hedging
reserve
Reserve for
development
costs
shares
Retained
earnings
Proposed
dividend
1,173 177 235 6,634 235
Change in accounting policies
1,173 177 235 6,607 235
Comprehensive income for the year
Profit for the year 1,049 1,049
Other comprehensive income
Items that are or may subsequently be reclassified to the Income Statement:
Value adjustment of hedging instruments for the year 169 169
Value adjustment transferred to operating costs 12 12
Value adjustment transferred to financial costs 20 20
Value adjustment transferred to non-current assets
Tax on items that are or may be reclassified to the income statement 2 2
Foreign exchange adjustments, goodwill
Foreign exchange adjustments, foreign branches 8 8
Items that are or may subsequently be reclassified to the Income statement 0 0 0 1 0
0 0 0 1 0
0 0 0 1,050 0 1,147
Dividend paid
Dividend on treasury shares 6 0
Proposed dividend at year-end 235 0
Vested share-based payments 25 25
Cash from sale of treasury shares related to exercise of share options 1 6 7
Capitalised development costs, additions 18 0
Other adjustments
0 0 0 1 0
1,173 1 266 254 7,440 235
The Company’s share capital, which is not divided into
different classes of shares, is divided into 58,631,578
shares of DKK 20 each. All shares rank equally.
There are no restrictions on voting rights. The shares are
fully paid up.
Impact from implementation
of IFRS 16, reference is made
to note 11.
122 Parent Financial Statements
DFDS Annual Report 2020
Statement of cash flows 1 January – 31 December
DKK million Note 2020
2,727
Cash flow effect from special items related to operating activities
Adjustments for non-cash operating items, etc. 25 23 12
Change in working capital 26 101
Payment of pension liabilities and other provisions
Cash flow from operating activities, gross 1,603
Interest received, etc. 39 52
Interest paid, etc.
Taxes paid 0 0
Cash flow from operating activities, net 1,570
Investments in ferries and other ships including dockings, rebuildings
and ferries under construction (incl. settlement of forward exchange
contracts related thereto)
Sale of ferries including payments received from sale of ferries last year 678 467
Investments in other non-current tangible assets
Sale of other non-current tangible assets 2 3
Investments in non-current intangible assets
Other investing cash flows 0
Acquisition of enterprises and associates 0
Group internal acquisition of enterprises 0
Capital contributions to subsidiaries, etc. 12
Dividends received from subsidiaries 243 26
Cash flow to/from investing activities, net
Cash flow before financing activities, net
DKK million Note 2020
Proceed from bank loans and loans secured by mortgage
in ferries and other ships 21 1,016 794
Repayment and instalments on bank loans and loans secured by
mortgage in ferries and other ships 21
Proceed from issuance of corporate bonds 21 0 304
Repayment of corporate bonds incl. settlement of cross currency swap 21 0
Payment of lease liabilities 21
Change in Group internal financing, net 21 496 78
Proceeds from sale of treasury shares 20 0
Cash received from exercise of share options 1 7
Other financing cash flows 0
Dividends paid 0
Cash flow to/from financing activities, net
Net increase/(decrease) in cash and cash equivalents 75
Cash and cash equivalents at 1 January 656 581
735 656
deposited on restricted bank accounts.
The statement of cash flows cannot directly be derived
from the Income statement and the Balance sheet.
123 Parent Financial Statements
DFDS Annual Report 2020
Note 1 Revenue ............................................................................... 125
Note 2 Costs .................................................................................. 126
Note 3 Employee costs ......................................................................... 126
Note 4 Fees to Auditors appointed at the Annual General Meeting ................................. 126
Note 5 Amortisation and depreciation for the year ............................................... 126
Note 6 Special items, net ....................................................................... 126
Note 7 Financial income and costs .............................................................. 127
Note 8 Tax .................................................................................... 127
Note 9 Non-current intangible assets ............................................................ 128
Note 10 Non-current tangible assets .............................................................. 128
Note 11 Leases ................................................................................. 129
Note 12 Investments in subsidiaries .............................................................. 131
Note 13 Receivables ............................................................................ 131
Note 14 Inventories ............................................................................. 132
Note 15 Treasury shares (number of shares). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
Note 16 Deferred tax ............................................................................ 132
Note 17 Share options ........................................................................... 133
Note 18 Pension and jubilee liabilities ............................................................ 133
Note 19 Other provisions ........................................................................ 133
Note 20 Interest-bearing liabilities ................................................................134
Note 21 Changes in liabilities arising from financing activities ...................................... 134
Note 22 Other payables ......................................................................... 135
Note 23 Information on financial instruments ..................................................... 135
Note 24 Financial and operational risks ........................................................... 136
Note 25 Non-cash operating items ................................................................ 137
Note 26 Change in working capital ............................................................... 137
Note 27 Acquisition and sale of enterprises, activities and non-controlling interests ..................137
Note 28 Guarantees, collateral and contingent liabilities ........................................... 138
Note 29 Contractual commitments ............................................................... 138
Note 30 Related party transactions .............................................................. 138
Note 31 Impairment testing ...................................................................... 139
........................................................................ 139
Note 33 Events after the balance sheet date ...................................................... 139
Note 34 Accounting Policies ..................................................................... 140
Notes
124 Parent Financial Statements
DFDS Annual Report 2020
Note 1 Revenue
2020
DKK million
Ferry
Logistics
Non-
allocated
Geographical markets
North Sea 3,815 - 0 3,815
Baltic Sea 1,246 - 0 1,246
English Channel 1,762 - 0 1,762
Continent - 290 0 290
Nordic - 232 0 232
Other 0 0 41 41
521 41
Product and services
Seafreight and shipping logistics solutions 5,307 0 0 5,306
Transport solutions 15 422 0 437
Passenger seafare and on board sales 925 0 0 925
Terminal services 93 0 0 94
Charters including related income 335 0 0 335
Agency and other revenue 148 100 41 289
521 41
Revenue includes revenue recognised from contracts with
customers in accordance with IFRS 15 and other revenue
(leasing activities). Revenue from leasing activities
-
ognised at “a point in time”.
DKK million
Ferry
Logistics
Non-
allocated
Geographical markets
North Sea 5,363 - 0 5,363
Baltic Sea 1,430 - 0 1,430
English Channel 2,319 - 0 2,319
Mediterranean 35 - 0 35
Continent - 308 0 308
Nordic - 262 0 262
Other 0 0 40 40
40
Product and services
Seafreight and shipping logistics solutions 5,937 0 0 5,937
Transport solutions 15 469 0 484
Passenger seafare and on board sales 2,520 0 0 2,520
Terminal services 195 0 0 195
Charters including related income 347 0 0 347
Agency and other revenue 133 100 40 274
40
125 Parent Financial Statements
DFDS Annual Report 2020
Note 6 Special items, net
DKK million 2020
Gain regarding group internal sale of the ro-ro freight ferries Ephesus Seaways and
Troy Seaways and adjustment to gain on sale of Côte Des Dunes and Côte Des
0 109
Gain on sale of freight ferry Anglia Seaways, net 0 29
Impairment of a passenger ferry and a terminal in the business unit Passenger 0
Termination cost in connection with restructuring 0
Impairment of a freight ferry made in connection with reclassification to asset held for
sale 0
0
Accrual of the total estimated costs (estimated fair value) related to the DFDS shares
awarded to DFDS employees as a special one-off award in connection with DFDS’ 150
years anniversary in December 2016. The costs will accrue from December 2016 to
February 2020 0
Accounting loss and costs related to disposal of two associated companies 0
Costs related to organisational changes and restructurings 0
Special items, net 106
If special items had been included in the operating profit before special items,
they would have been recognised and have effect as follows:
Employee costs
Cost of sales and administration 0
Profit on disposal of non-current assets and associates, net 0 135
Amortisation, depreciation, and impairment losses on intangible - and tangible
assets 0
Financial income/costs 0 0
Special items, net 106
DKK million 2020
Wages, salaries and remuneration 960 1,070
Defined contribution pension plans 66 67
Other social security costs 48 49
Share based payment, reference is made to note 16 6 7
Other employee costs 62 86
-
1,027
2,476 2,666
Reference is made to note 5.1 of the Consolidated Financial
Statements for a description of the Parent Company’s remu-
neration, etc. to the Executive Board and remuneration to
the Board of Directors as these are the same for the Parent
Company and the Group.
DKK million 2020
Audit fees 1 2
Other assurance engagements 0 0
Tax and VAT advice 0 2
Non-audit services 0 1
2 5
-
kendt Revisionspartnerselskab, Denmark reference is made to the Consolidated Financial Statements note 5.2.
DKK million 2020
Software 35 46
Terminals 3 3
Ferries and other ships 455 437
Equipment etc. 32 28
Right-of-use assets 1,129 1,203
1,655 1,717
Note 2 Costs
DKK million 2020
Ferry and other ship cost including charters related cost 724 1,027
Bunker 870 1,432
126 Parent Financial Statements
DFDS Annual Report 2020
Note 7 Financial income and costs
DKK million 2020
Financial income
Interest income from banks, etc. 4 2
Interest income from subsidiaries 26 36
Foreign exchange gains, net
3 0
Reversal of impairment of investments in subsidiaries
145 0
Dividends received from subsidiaries 243 26
421 64
Financial costs
Interest expense to banks, credit institutions, corporate bonds, etc.
Interest expense on lease liabilities
Interest expense to subsidiaries 0
Foreign exchange gains, net
0
Impairment of investments in subsidiaries
Other financial costs
Transfer to assets under construction
10 10
Financial income and costs, net 203
behalf of all subsidiaries, and therefore foreign exchange
gross transactions. Transactions entered into, on behalf of
subsidiaries, are transferred to the subsidiaries on back-to-
back terms.
Except for interest income (net) relating to interest swap
and interest expenses relate to financial instruments
measured at amortised cost.
Other financial costs contain bank charges, fees, early re-
payment fees, commitment fees and creditline fee.
DKK million 2020
Current joint tax contributions
Movement in deferred tax for the year
Adjustment to corporation tax in respect of prior years 8 0
3
Tax in the Income statement 5
Tax in Other comprehensive income 2
3
Profit before tax 135 1,052
Adjustment regarding tonnage taxed income 78
Profit before tax (corporate income tax) 213
22.0% tax of profit before tax 12
Adjustment of calculated tax in foreign branches compared to 22.0% 0 0
Tax effect of:
Non-taxable/-deductible items
46
Adjustments of tax in respect of prior years 8 0
Corporate income tax 0
Tonnage tax
5
3.9 0.3
2.3 0.3
The ferry activities are included in the Danish tonnage tax
scheme where the taxable income related to transportation
of passengers and freight is calculated based on the ton-
nage deployed during the year. Taxable income related to
other activities is taxed according to the normal corporate
income tax rules at the standard corporate tax rate of 22%.
and these two enterprises’ Danish controlled enterprises.
LF Investment ApS is the administration company in the
joint taxation and settles all payments of corporation tax
due by the joint taxed enterprises with the tax authorities.
In accordance with the Danish rules on joint taxation, DFDS
-
able for their own corporate tax due and are only subsid-
iary and pro rata liable for the corporation tax liabilities
towards the Danish tax authorities for all other enterprises
that are part of the Danish joint taxation.
1)
Foreign exchange gains in
2020 amount to DKK 191m
(2019: DKK 89m) and foreign
exchange losses amount to
DKK 188m (2019: DKK 92m).
2)
Reference is made to note 31.
3)
Interest capitalised on three
newbuildings under construc-
tion (2019: five newbuildings).
The interest is calculated by
using a general interest rate
of 1.30% p.a. (2019: 0.87% -
1.30% p.a.).
4)
Reference is made to note 11.
5)
2019: Primarily relates to
write-down of investment in
subsidiaries and adjustments
regarding financial items.
2020: Primarily relates to
tax exempt dividends from
subsidiaries and write-down
of investment in subsidiaries.
127 Parent Financial Statements
DFDS Annual Report 2020
DKK million
Goodwill Software
-
jects in progress
Cost at 1 January 2020 116 503 25 643
Foreign exchange adjustments 1 0 0 1
Additions 0 0 67
67
Disposals 0 0 0 0
Transfers 0 36 0
116 55 711
Amortisation and impairment losses
at 1 January 2020 0 275 0 275
Amortisation charge 0 35 0 35
Disposals 0 0 0 0
0 310 0 310
Carrying amount at
116 55 400
DKK million
Goodwill Software
-
jects in progress
Cost at 1 January 2019 116 524 2 643
Foreign exchange adjustments 0 0
Additions 0 1 63
64
Disposals 0 0
Transfers 0 40 0
116 503 25 643
Amortisation and impairment losses
at 1 January 2019 0 291 0 291
Amortisation charge 0 45 0 46
Disposals 0 0
0 275 0 275
Carrying amount at
116 25
(continued)
The Parent Company’s carrying amount of Goodwill DKK
freight- and passenger routes in 2016 and 2011, respec-
tively, and one freight route in 2005.
The carrying amount of completed software and develop-
ment projects in progress primarily relates to a Passenger
booking system, a new Transport Management System to
the Logistics Division, a new onboard sales system, a new
ERP system and digital initiatives in general.
For further information regarding the impairment tests ref-
erence is made to note 3.1.5.
Related to the implementa-
tion of the new ERP system
(DKK 32m), which is planned
to go live in 2021, and other
operational systems (DKK
35m).
Primarily related to the large
new-buildings program. Two
freight ferries were deployed
in February and October 2020.
The last one is scheduled
for delivery in Q1 2021. One
freight and one passenger
ferry (ro-pax) are on order for
delivery in 2021-2022.
Primarily related to the Group
internal purchase of one
freight ferry (ro-ro).
The transfer relates to the
ferry Ark Futura, which is
classified as held for sale.
An impairment of DKK 33m
on Ark Futura and DKK 72m
on Crown Seaways have been
recognised in special items.
Note 10 Non-current tangible assets
DKK million
Land and
buildings
Ferries and
other ships
etc.
construction
and pre-
payments
Cost at 1 January 2020 11 65 8,280 392 813 9,560
Foreign exchange adjustments 0 0 0 0
Additions 0 0 82
12 1,131
1,225
Disposals 0 0 0
Transfers 0 0 1,058 52 0
Transferred to assets clasified as
held for sale 0 0
0 0
11 64 443 10,523
Depreciation and impairment
losses at 1 January 2020 10 43 4,373 262 0 4,688
Foreign exchange adjustments 0 0 0 0
Depreciation charge 0 3 455 32 0 491
Impairment charge 0 0 105
0 0 105
Disposals 0 0 0
Transferred to assets clasified as
held for sale 0 0
0 0
10 46 4,726 0 5,065
Carrying amount at
1 4,445 160
Parent Financial Statements
DFDS Annual Report 2020
Note 10 Non-current tangible assets (continued)
DKK million
Land and
buildings
Ferries and
other ships
etc.
construction
and pre-
payments
Cost at 1 January 2019 11 64 7,834 395 836 9,140
Additions 0 0 0 40
1,538
1,578
Disposals 0 0
0
Transfers 0 0 1,560 0 0
11 65
Depreciation and impairment
losses at 1 January 2019 9 40 4,166 274 0 4,489
Depreciation charge 0 3 437 28 0 468
Disposals 0 0 0
10 43 4,373 262 0
Carrying amount at 31
1 22 130
For further information regarding the impairment tests,
reference is made to the Consolidated Financial State-
ments note 3.1.5.
Note 11 Leases
The Parent Company has lease contracts for various items
of Land & buildings, Terminals, Ferries, Equipment etc. in
its operations. The Parent Company oblitations under the
leases are secured by the lessors title to the leased assets.
There are several lease contracts that include extension
and termination options. Set out below are the carrying
amounts of Right-of-use assets recognised and the move-
ments during the period.
DKK million
Land and
buildings
Ferries and
other ships
etc.
Cost at 1 January 2020 58 53 2,813 68 2,991
Additions/Remeasurement 5 4 793 0 801
Disposals 0 0
Foreign exchange adjustments 0 0 0
62 57 63
Depreciation and impairment losses
at 1 January 2020 19 9 1,111 14 1,152
Depreciation charge 20 10 1,086 13 1,129
Impairment charges 0 28
0 0 28
Disposals 0 0
Foreign exchange adjustments 0 0 0
22 2,006
24 1,331 40 1,404
1)
Primarily related to the large
new-building program. In
2019, three freight ferries
(ro-ro) were deployed in
March, June and November,
respectively.
2)
Primarily related to the
internal sale of two freight
sale of the freight ferry Anglia
Seaways.
3)
Primarily related to acquisi-
tion of reefers and trestles.
4)
An impairment of DKK 28m
has been recognised in special
items, on a terminal in the
business unit Passenger.
Parent Financial Statements
DFDS Annual Report 2020
Note 11 Leases (continued)
DKK million
Land and
buildings
Ferries and
other ships
etc.
Cost at 1 January 2019 - - - - -
Change in accounting policy 27 53 1,782 26 1,888
Additions/Remeasurement 31 0 1,081 47 1,160
Disposals 0
53
Depreciation and impairment losses
at 1 January 2019 - - - - -
Depreciation charge 19 9 1,160 14 1,203
Disposals 0 0
1,111 14 1,152
44 1,702 54
Weighted average incremental
borrowing rate 2.0% 2.7% 1.5% 2.2%
Set out below are the carrying amounts of lease liabilities (included under interest-bearing liabilities) and the movements
during the period.
DKK million 2020
As at 1 January 1,859 -
Change in accounting policy - 1,914
Additions/Remeasurement 802 1,160
Payments/installments
Disposals 6
Foreign exchange adjustments 0
1,450
DKK 1,235m) regarding lease agreements whereof interest
expenses related to lease liabilities amount to DKK 20m
Lease liabilities
Lease liabilities expiring within the following periods from the balance sheet date:
DKK million 2020
Within 1 year 1,156 1,132
289 720
14 29
After 5 years 9 11
1,467
Lease liabilities are recognised in the balance sheet as follows:
DKK million 2020
Non-current liabilities 307 747
Current liabilities 1,143 1,112
1,450
The following amounts are recognised in the Income statement:
DKK million 2020
Expense relating to short-tem leases (included in cost and cost of sales
and administration) 0
Expense relating to low-value assets (included in cost of sales and administration)
Variable lease payments 0 0
Interest expense on lease liabilities
Depreciation, ships
Depreciation, other non-current assets
The following amounts from leases are recognised in the statement of cash flows:
DKK million 2020
Net cash flows from operating activities, gross
Interest paid, etc
Net cash flows from operating activities, net
Net cash flows from financing activities
130 Parent Financial Statements
DFDS Annual Report 2020
Note 11 Leases (continued)
There are no material impact on other comprehensive
income. At 31 December 2020 the Parent Company was
committed to short-term leases where the total commit-
has no lease contracts including fixed- and variable pay-
ments.
The Parent Company has entered into several operating leases of its ferries. Future minimum receivable under non-can-
cellable operating leases as at 31 December are as follows:
Operating Lease commitments (lessor)
DKK million 2020
Minimum Lease payments (income)
Ferries and equipment
309 273
304 161
613 434
The specified minimum payments are not discounted. Op-
erating lease- and rental Income recognised in the Income
347m). The contracts are entered into on usual conditions.
2020: Additions relates to
capital injection in two sub-
sidaries (DKK 846m), acquisi-
tion of minority shares in AB
DFDS Seaways (less than DKK
1m) and recharge of cost of
jubilee shares to subsidiaries
(DKK 1m).
Reference is made to note 31.
The carrying amount of Inter-
est bearing receivables from
subsidiaries relates to current
credit facilities that are made
available to subsidiaries.
Receivables from subsidiaries
are impaired by DKK 0m at
31 December 2020 (2019:
DKK 0m).
Note 12 Investments in subsidiaries
DKK million 2020
Cost at 1 January 6,243 6,126
Additions
848 117
6,243
Accumulated impairment losses at 1 January
Impairment losses
Reversal of prior year impairment losses 145 0
6,756
Reference is made to the Company Overview in the Con-
solidated Financial Statements note 5.10. The carrying
amount of investments in subsidiaries is tested for impair-
ment at least at year-end.
Note 13 Receivables
DKK million 2020
Other non-current receivables 15 3
Interest bearing receivables from subsidiaries 261 0
276 3
Trade receivables 600 645
0 715
Interest bearing receivables from subsidiaries
493 983
Other non-interest bearing receivables from subsidiaries 206 216
Receivables from associates and joint ventures 27 46
Other receivables and current assets 427 273
1,753
The carrying amount of receivables is in all material re-
spects equal to the fair value. None of the trade receiv-
ables with collateral are overdue at 31 December 2020
DKK million 2020
Days past due:
66 123
4 12
1 7
1 2
More than 120 days 2
Past due, but not impaired 74 142
Movements in write-downs, which are included in the trade receivables:
Write-downs at 1 January 13 25
Write-downs 6 4
Realised losses
Reversed write-downs
16 13
131 Parent Financial Statements
DFDS Annual Report 2020
DKK million
2020
Land and buildings, terminals
and other equipment Provisions
carried forward
Deferred tax at 1 January 4 0 0 4
Recognised in the Income statement 1 0 0 1
5 0 0 5
Deferred tax at 1 January 4 0 0 3
Recognised in the Income statement 1 0 0 1
4 0 0 4
DKK million 2020
Deferred tax (assets) 0 0
Deferred tax (liabilities) 5 4
5 4
-
ject to the requirements of the scheme until 2021. During
the period covered by the tonnage tax scheme ferries and
other ships, and other assets and liabilities related to the
withdraws from the tonnage taxation scheme, deferred tax
withdraw from the scheme and consequently no deferred
tax relating to assets and liabilities subject to tonnage tax-
ation has been recognised.
Note 13 Receivables (continued)
DKK million 2020
Days past due:
1 0
0 0
0 1
0 0
More than 120 days 14 12
16 13
Write-downs and realised losses are recognised in Ferry
and other ship operation and maintenance costs in the In-
come statement.
Reference is made to note 4.1 in the Consolidated Finan-
cial Statements for a description of Credit risks.
Note 14 Inventories
DKK million 2020
Bunker 55 81
Goods for sale 59 74
Write-down of inventories end of year
104 152
Write-down of inventories expensed during the year
Information regarding the Parent Company’s and the Group’s
holding of treasury shares is identical. Reference is made to
the Consolidated Financial Statements note 4.7.
132 Parent Financial Statements
DFDS Annual Report 2020
DKK million 2020
Other provisions at 1 January 42 7
Addition from acquisition of enterprises
0 28
Provisions made during the year 46 14
Reversal of unused provisions
37 42
Other provisions are expected to be payable in:
3 9
28 28
After 5 years 5 5
37 42
present value of earn-out agreements regarding acquisi-
The Parent Company contributes to defined contribution
plans as well as defined benefit plans. The majority of the
pension plans are funded through contributions to an in-
dependent insurance company responsible for the pension
obligation towards the employees (defined contribution
plans). In these plans the Parent Company has no legal or
constructive obligation to pay further contributions irre-
spective of the financial situation of the insurance compa-
ny. Pension costs from such plans are charged to the income
statement when incurred. The Parent Company has minor
defined benefit plans. The defined benefit plans are pen-
sion plans that yearly pay out a certain percentage of the
final salary the employee has when the employee retires.
The pensions are paid out as from retirement and during the
remaining life of the employee. The percentage of the salary
is dependent of the seniority of the employees. The defined
benefit plans typically include a spouse pension.
Based on actuarial calculations the defined benefit plans
show the following liabilities:
DKK million 2020
Present value of unfunded defined benefit obligations 0 0
Recognised liabilities for defined benefit obligations 0 0
Provision for jubilee liabilities 7 7
7
1
2019: Relates to earn-out on
Freeco Logistics.
Note 17 Share options
Information regarding share options for the Parent Com-
pany and the Group is identical. Reference is made to the
Consolidated Financial Statements note 5.3.
Information regarding jubilee shares for the Parent Com-
pany and the Group is identical. Reference is made to the
Consolidated Financial Statements note 5.3.
In total 2,469 employees are at award date entitled to the
shares. Based on historical attrition rates for each coun-
try the total expected number of shares to be transferred
to the employees is 53,300 with a total fair value of DKK
16m, which is expensed under Special items over the vest-
ing period.
43,968 Jubilee shares have been transferred during 2020
Vesting of Jubilee shares is expensed in the Income state-
Year of grant
-
cise
price
Market
price at
grant date
volatility
Risk-free
interest
rate
dividend per
share
grant date
term
Fair value
per share
at time of
granting
Jubilee shares, December 2016 0.00 319.60 28.65% 8.00 3 years 295.45
In recognition of the contribution made by DFDS’ employ-
ees in a year with exceptional challenges, the Board of Di-
rectors has 22 December 2020 awarded up to 50 shares
free of charge to each employee.
The shares will vest over a three-year period from January
2021 to December 2023. The shares are in most countries
awarded as a phantom share programme whereby the en-
titled employees will receive a cash payment in December
2023 equal to the value of 50 DFDS shares. The total num-
ber of employees eligible for the award of shares is around
2,400 and the total value of awarded shares is around DKK
33m, which will be proportionally expensed in the income
statement under Employee costs over the vesting period.
133 Parent Financial Statements
DFDS Annual Report 2020
Note 20 Interest-bearing liabilities
DKK million 2020
Issued corporate bonds
2
1,162 1,249
Bank loans and mortgage on ferries and other ships 1,429 947
Lease liability 307 747
Other non-current liabilities 0 11
Bank loans and mortgage on ferries and other ships 205 156
Lease liability 1,143 1,112
Payables to subsidiaries
1,972 1,754
3,320 3,022
6,217
The fair value of the interest-bearing liabilities amounts to
-
ment is categorised within level 3 in the fair value hier-
archy except for the part that relates to issued corporate
bonds of nominal NOK 1,250m for which the fair value
measurement is categorised within level 1.
The fair value of the financial liabilities is determined as
the present value of expected future repayments and in-
terest rates. The Group’s actual borrowing rate for equiv-
alent terms is used as the discount rate. The fair value
of the issued corporate bonds nominal NOK 1,250m has
been calculated based on the quoted bond price in May
-
rate bonds nominal NOK400m has been calculated based
on the quoted bond price in June 2019 which is the latest
DKK 758m of the Interest-bearing liabilities in the Parent
unusual conditions in connection with borrowing are made.
The loan agreements can be settled at fair value plus a
small surcharge, whereas settlement of the corporate
bonds requires a repurchase of the bonds. Reference is
made to note 24 for financial risks, etc.
DKK million 2020
DKK 1,450 865
2,803 2,982
SEK 395 418
NOK 1,205 1,320
GBP 364 393
6,217
Note 21 Changes in liabilities arising from financing activities
The table below discloses the cash as well as non-cash
changes in Interest-bearing liabilities, Derivative financial
instruments related to issued corporate bonds and Pay-
ables to subsidiaries, non interest-bearing. The changes
arising from cash flows form part of the cash flows from
financing activities in the Statement of cash flows.
DKK million Non-cash changes
Cash
flows
Foreign
exchange
movements
New/
diposed/
remea-
sured
leases
Fair value
changes
Other
changes
2020
Changes in 2020
Interest-bearing liabilities:
Bank loans and mortgage on
ferries and other ships 1,103 534 0 0 1,633
Issued corporate bonds 1,249 0 0 0 1 1,162
Lease liabilities 1,859 723 0 0 1,450
Payables to subsidiaries, inter-
est-bearing 1,754 218
0 0 0 0 1,972
Other liabilities 11 0 0 0 0 0
5,977 723 0 6,217
Derivatives related to issued
corporate bonds 55 0 0 0 84 0 140
Other:
Payables to subsidiaries, non
interest-bearing 165 3
0 0 0 0 167
activities 723 6,525
Receivables from
subsidiaries 275
1)
The carrying amount of
Interest-bearing payables to
subsidiaries relates to deposit
facilities that are made availa-
ble to subsidiaries.
2)
The Parent Company has
issued two 5 year corporate
bond loans; one in 2019 and
one in 2017 respectively
(2019: one in 2019 and one in
2017 respectively). Reference
is made to the Consolidated
Statements note 4.5.
3)
Cash flows related to Pay-
ables to/Receivables from
subsidiaries are presented net
in the Statement of cash flows
under Financing activities
in the line “Change in Group
internal financing, net” by DKK
496m.
134 Parent Financial Statements
DFDS Annual Report 2020
Note 21 Changes in liabilities arising from financing activities (continued)
DKK million Non-cash changes
Change in
accounting
policies
Cash
flows
Foreign
exchange
movements
New/
diposed/
remea-
sured
leases
Fair value
changes
Other
changes
Interest-bearing
liabilities:
Bank loans and mortgage on
ferries and other ships 873 0 230 0 0 0 0 1,103
Issued corporate bonds 1,433 0 11 0 0 1 1,249
Lease liabilities - 1,914 0 1,154 0 0 1,859
Payables to subsidiaries,
interest-bearing 1,445 0 309
0 0 0 0 1,754
Other liabilities 0 0 0 0 0 0 11 11
3,751 1,914 11 1,154 0 12 5,977
-
ments:
Derivatives related to
issued corporate bonds 62 0 0 0 0 0 55
Other:
Payables to subsidiaries,
non interest-bearing 141 0 24
0 0 0 0 165
financing activities 11 1,154 12
Receivables from
subsidiaries
1)
Cash flows related to Pay-
ables to/Receivables from
subsidiaries are presented net
in the Statement of cash flows
under Financing activities
in the line “Change in Group
internal financing, net” by
DKK 78m.
Note 22 Other payables
DKK million 2020
190 145
Payables to subsidiaries 167 165
Payables to associates and joint ventures 49 107
59 33
Other payables 71 24
Accrued interests 4 4
540 477
Note 23 Information on financial instruments
DKK million 2020
Carrying amount per category of financial instruments
Financial assets measured at fair value:
Derivatives, related to operating activities 214 300
Financial assets measured at amortised cost:
Trade receivables, receivables from subsidiaries, receivables from associates and joint
ventures, other receivables and cash 2,764 3,537
Financial assets measured at fair value through profit or loss:
Securities 10 10
Financial liabilities measured at fair value:
Derivatives, related to operating activities
Derivatives, related to interest-bearing activities
Financial liabilities measured at amortised cost:
Interest-bearing liabilities, Leases, trade payables, payables to subsidiaries, payables to
associates and joint ventures and other payables
The table below ranks financial instruments carried at
fair value by valuation method. The different levels have
been defined as follows:
• Level 1: Quoted prices in an active market for identical
type of instrument, i.e. without change in form or content
(modification or repackaging).
• Level 2: Quoted prices in an active market for similar
assets or liabilities or other valuation methods where
all material input is based on observable market data.
• Level 3: Valuation methods where possible material in-
put is not based on observable market data.
135 Parent Financial Statements
DFDS Annual Report 2020
Note 23 Information on financial instruments (continued)
DKK million
2020 Level 1 Level 2 Level 3
Derivatives, financial assets 0 214 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 0
0 13 10
Level 1 Level 2 Level 3
Derivatives, financial assets 0 300 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 0
0 212 10
Derivative financial assets and liabilities are all measured
at level 2. Reference is made to note 4.1 in the Consolidat-
ed Financial Statements for description of the valuation
method.
Securities, financial assets measured at fair value through
profit or loss comprise other shares and equity invest-
DKK 10m). These are some minor unlisted shares and
investments.
Note 24 Financial and operational risks
The description of DFDS’ risk management policy, financial
risks and capital management is identical for the Group
and the Parent Company. Reference is made to the Consol-
idated Financial Statements note 4.1.
The following specifications for the Parent Company are
different to the similar specifications for the Group.
Financial risks
Interest rate risks
An increase in the interest rate of 1%-point compared to
the actual interest rates in 2020 would, other things being
equal, have increased net interest payments by DKK 7m
-
crease in the interest rate of 1%-point compared to the ac-
tual interest rates in 2020 would, other things being equal,
Liquidity risks
The following are the contractual maturities of financial
liabilities, including estimated interest payments and ex-
cluding the impact of netting agreements:
Note 24 Financial and operational risks (continued)
DKK million
2020
Non-derivative financial assets
Cash 735 0 0 0
Trade receivables including work in progress services 600 0 0 0
Non-interest bearing receivables from subsidiaries 206 15 0 0
Interest bearing receivables from subsidiaries 493 24 223 14
Receivables from associates and joint ventures 27 0 0 0
Other receivables and current assets 427 31 0 0
Non-derivative financial liabilities
Bank loans and mortgages on ferries and other ships
Issued corporate bonds 0
Other interest-bearing debt 0 0 0 0
Lease liabilities (Non-discounted)
Trade payables 0 0 0
Payables to associates and joint ventures 0 0 0
Payables to subsidiaries 0 0 0
Other payables 0 0 0
Bunker contracts 17 0 0 0
Interest swaps & caps 0 0 0 0
Cross currency interest rate swaps 0 0 0 0
Forward exchange contracts and currency swaps 128 14 14 40
Bunker contracts 0 0 0 0
Interest swaps & caps 0 0
Cross currency interest rate swaps 0
Forward exchange contracts and currency swaps 0 0 0
Beside the contractual maturities the Parent Company has is-
are not presented in the above table as the contractual matu-
rity is not possible to predict. Reference is made to note 28.
The maturity analysis is based on undiscounted cash flows
including estimated interest payments. Interest payments
are estimated based on existing market conditions.
The non-discounted cash flows related to derivative finan-
cial liabilities are presented at gross amounts unless the
parties according to the contract have a right or obligation
to settle at net amount.
136 Parent Financial Statements
DFDS Annual Report 2020
Note 25 Non-cash operating items
DKK million 2020
Change in provisions 0 1
Change in write-down of inventories for the year 16 3
Change in provision for defined benefit plans and jubilee obligations 0 1
Vesting of share option plans expensed in the Income statement 7 7
Non-cash operating items 23 12
Note 26 Change in working capital
DKK million 2020
Change in inventories 32
Change in receivables, such as trade receivables, prepaid costs, etc. 56 96
Change in current liabilities, such as trade payables, payables to joint ventures, etc. 9
Change in working capital 101
There are no acquisition or disposals in 2020.
On 19 December 2019 the acquisition of the Finnish com-
pany Freeco Logistics headquartered in Turku was com-
pleted For further details refererence is made to the Con-
solidated Financial Statements note 5.5.
For further details refererence is made to the Consolidated
Financial Statements note 5.5.
Note 24 Financial and operational risks (continued)
DKK million
Non-derivative financial assets
Cash 656 0 0 0
Trade receivables including work in progress services 645 0 0 0
Non-interest bearing receivables from subsidiaries 715 0 0 0
Interest bearing receivables from subsidiaries 1,199 0 0 0
Receivables from associates and joint ventures 46 0 0 0
Other receivables and current assets 273 3 0 0
Non-derivative financial liabilities
Bank loans and mortgages on ferries and other ships
Issued corporate bonds 0
Other interest-bearing debt 0 0 0
Lease liabilities (Non-discounted)
Trade payables 0 0 0
Payables to associates and joint ventures 0 0 0
Payables to subsidiaries 0 0 0
Other payables 0 0 0
Bunker contracts 0 0 0 0
Interest swaps & caps 0 0 0 0
Cross currency interest rate swaps 0 0 0 0
Forward exchange contracts and currency swaps 70 145 18 67
Bunker contracts 0 0 0
Interest swaps & caps 0 0
Cross currency interest rate swaps 0
Forward exchange contracts and currency swaps 0 0
137 Parent Financial Statements
DFDS Annual Report 2020
6,417m). The Parent Company has is issued guarantees
DKK 6,015m). Further, the Parent Company has a 8 year
guarantee for a terminal agreement entered into by a
subsidiary. In addition, the Parent Company has issued
an unlimited guarantee on behalf of a subsidiary to
cover any obligations under a Payment Service Agree-
ment for creditcard payments. The Parent Company has
issued letter of support to cover total underfundings in
two defined benefit pension schemes in two English sub-
sidiaries. The underfunding amount to DKK 129m at 31
has issued letter of support for certain Group companies
with negative equity.
The Parent Company is in 2020 as well as in 2019 part
in various legal disputes. The outcome of these disputes
is not considered likely to influence the Parent Company
significantly, besides what is already recognised in the
balance sheet.
Certain ferries with a total carrying amount of DKK 2,385m
mortgage on ferries with a total carrying amount of DKK
Note 30 Related party transactions
Description of the Parent Company’s related parties is
equal to the description for the Group. Reference is made
to the Consolidated Financial Statements note 5.8.
DKK million
2020
Sale of
services
Purchase
of services
Sale of
assets Receivables
Impairment of
receivables Liabilities
Capital
contributions
Associates and joint
ventures 14 155 0 27 0 49 0
Subsidiaries 825 1,125 0 699 0 2,139 848
Sale of
services
Purchase
of services
Sale of
assets Receivables
Impairment of
receivables Liabilities
Capital
contributions
Associates and joint
ventures 10 123 0 46 0 107 0
Subsidiaries 813 1,176 0 1,199 0 1,919 500
Impairment losses recognised in the Income statement in
-
DKK 0m). Reference is made to note 31.
Receivables are unsecured and are related to trade receiv-
ables and cash pools.
Reference is made to note 28 for a description of
guarantees issued by the Parent Company on behalf of
subsidiaries.
DKK million 2020
1,352 839
345 1,229
Contractual commitments, term after 5 years 527 492
2,224 2,560
Contractual commitments in 2020 mainly relates to a total
of three new buildings on order. In 2021, one freight ferry
(ro-ro) is on order for delivery in January. Two freight and
passenger ferries (ro-pax) are on order for delivery in 2021.
The Parent Company has a contractual commitment for a
non-cancellable lease contract that has not yet commenced
at 31 December 2020 for a freight and passenger ferry (ro-
pax) with delivery in Q3 2021. The future lease payment for
The Parent Company also has a contractual commitment
for a for a new headquarter in Denmark.
Parent Financial Statements
DFDS Annual Report 2020
Note 31 Impairment testing
Introduction
DFDS decided to impairment tests all non-current assets
at least once every year and in case of indication of impair-
have been made in 2020.
For a description of the definition of cash-generating units,
basis for impairment testing and calculation of recovera-
ble amount reference is made to the Consolidated Finan-
cial Statements note 3.1.5.
Impairment tests of investments in subsidiaries, associ-
ates and joint ventures
Impairment tests are carried out for each subsidiary, asso-
ciates and joint ventures in the Parent Company if there
is indication of impairment. The individual companies are
regarded as the lowest cash-generating units.
The estimated value in use is based on cash flows accord-
ing to management approved budget for the coming finan-
cial year and for specific subsidiaries approved buisness
cases beond 2021 have been aplied. Expectations towards
the cash flows are adjusted for uncertainty on the basis of
historical results, and take into account expectations to-
wards possible future fluctuations in cash flows.
The Parent Company uses a discount rate determined for
each subsidiary, associate or joint venture, according to
the business area to which it belongs. The applied discount
rates for 2020 and 2019 are shown in the table in the Con-
solidated Financial Statements note 3.1.5.
2020
In 2020 investments in subsidiaries have been impaired
by DKK 156m in total as the calculated value in use of
the individual investments is lower than the book value.
Furthermore, in 2020 previous impairments have been
reversed by DKK 145m. The impairment of net DKK 12m
in 2020 is recognised under Financial items. Reference is
made to note 7.
The Parent Company has issued letter of support to some
subsidiaries and associates with negative equity. Conse-
quently, the investment in these subsidiaries and asso-
ciates are written down to zero, and any receivables due
from the subsidiaries and associates are written down by
amounts equal to the respective negative equities. Total
write down of receivables at 31 December 2020 amounts
to DKK 0m. Further, write-downs in previous years have
been reversed by DKK 0m. The write-downs and reversals
are recognised under Financial items.
In 2019 investments in subsidiaries have been impaired
by DKK 60m in total as the calculated value in use of the
individual investments is lower than the book value. The
impairment of net DKK 60m in 2019 is recognised under
Financial items. Reference is made to note 7.
The Parent Company has issued letter of support to some
subsidiaries and associates with negative equity. Conse-
quently, the investment in these subsidiaries and asso-
ciates are written down to zero, and any receivables due
from the subsidiaries and associates are written down by
amounts equal to the respective negative equities. Total
write down of receivables at 31 December 2019 amounts
to DKK 0m. Further, write-downs in previous years have
been reversed by DKK 0m. The write-downs and reversals
are recognised under Financial items.
Information about judgements made in relation to Cov-
financial statement is included in the note.
DKK million 2020
Note
3 Employee cost
69
3 Employee cost Wages, salaries and remuneration 1
70
6 Special Items Termination cost in connection with restructuring
6 Special Items Impairment of a passenger ferry and terminal
Government grants
DFDS has taken part in various government compensa-
DKK 69m is reducing the staff costs in the income
statement and contributions from voluntary salary a
reduction of DKK 1m are deducted in wages, salaries
and remuneration.
Impairment testing
In relation to the underlying assumptions for Impairment
taken into consideration and refer to an impairment of an
passenger ferry and terminal of DKK 100m.
Leases
-
ment to IFRS 16 leases) as of 28 May 2020, amending the
standard to provide DFDS with an exemption from assess-
-
ment, and no reassessment nor renegotiations of rent con-
cessions have taken place.
Due to the reduced operational and financial visability
June 2020 decided not to pay out the proposed dividend
of DKK 4.0 for the financial year 2019.
1)
Contributions from Govern-
ment for wage subsidy are
included in employee costs.
DFDS took part in local
schemes during 2020.
2)
Restructuring costs related
to Covid-19 are included in
special items and consist of
termination costs related to
employees made redundant.
3)
Due to continued travel
restrictions an impairment
loss of DKK 100m has been
recognised under special
items relating to the business
unit “Passenger”.
On 17 February 2021, DFDS awarded 154.626 share options and 24,104 restricted share units to the Executive Board and
a number of key employees. The award of the restricted share units is subject to the approval of a revised remuneration
policy at the coming Annual General Meeting. The theoretical value of the shares options and restricted share units is DKK
Parent Financial Statements
DFDS Annual Report 2020
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures
are measured at cost in the Parent Company’s Balance
sheet. Impairment testing is carried out if there is any indi-
cation of impairment. The carrying amount is written down
to the recoverable amount whenever the carrying amount
exceeds the recoverable amount. The impairment loss is
recognised as Financial cost in profit for the year unless
it qualifies as a special item. If the Parent Company has a
legal or constructive obligation to cover a deficit in sub-
sidiaries, associates and joint ventures, a provision for this
is recognised.
Reserves for development costs
The reserve for development costs comprise of DFDS’ de-
velopment costs corresponding to the capitalized develop-
ment cost in the balance sheet. The reserve is non distrib-
utable and cannot be used to cover deficit. The reserve is
dissolved upon disposal of the development cost either by
sale or if the development cost is no longer part of the en-
tity’s operation. The reserve will then be transferred to the
distributable reserves. The reserve will be reduced and the
distributable reserves increased concurrently with either
depreciations or write-downs.
securities and Treasury shares, reference is made to Con-
solidated Financial Statements, note 4.6.
The Parent Company Financial Statements are prepared
pursuant to the requirements of the Danish Financial
Statements Act concerning preparation of separate parent
company Financial Statements for companies reporting
under IFRS.
The 2020 Financial Statements have been prepared in ac-
cordance with International Financial Reporting Standards
-
quirements for annual reports of listed companies.
Critical accounting estimates and assessments
In the process of preparing the Parent Company Financial
Statements, a number of accounting estimates and judge-
ments have been made that affect assets and liabilities at
the balance sheet date and income and expenses for the
reporting period. Management regularly reassesses these
estimates and judgements, partly on the basis of histori-
cal experience and a number of other factors in the given
circumstances.
Impairment testing of investments in subsidiaries
Impairment testing of investments in subsidiaries is car-
ried out if there is indication of impairment. The impair-
ment tests are based on the expected future cash flows
for the tested subsidiaries. For further details of estimates
and assessments relating to investments in subsidiaries
reference is made to note 31, which mention impairment
testing.
Management is of the opinion that, except for impairment
testing of investments in subsidiaries, no accounting es-
timates or judgements are made in connection with the
presentation of the Parent Company Financial Statements
that are material to the financial reporting, other than
those disclosed in section 1 to the Consolidated Financial
Statements.
The Parent Company accounting policies are consistent
with the accounting policies described in the Consolidated
Financial Statements with the following exceptions:
Business combinations
In the Parent Company common control acquisitions (and
disposals) of enterprises and activities are measured and
recognised in accordance with the ‘book value method’ by
which differences, if any, between purchase price and book
value of the acquired/sold enterprise/activity are recog-
nised directly in equity.
Foreign exchange adjustments of balances accounted for
as part of the total net investment in enterprises that
have a functional currency other than DKK are recognised
in profit for the year as Financial income and costs in the
Parent Company Financial statements. Likewise, foreign
exchange gains and losses on the portion of loans and
derivative financial instruments that has been entered
into to hedge the net investment in these enterprises are
recognised directly in the profit for the year as Financial
income and costs.
and joint ventures
Dividends from investments in subsidiaries, associates and
joint ventures are recognised in the Parent Company’s In-
come statement for the year in which the dividends are
declared. If distributions exceed the subsidiary’s, the asso-
ciate’s or the joint venture’s Comprehensive income for the
period, an impairment test is carried out.
140 Parent Financial Statements
DFDS Annual Report 2020
Fleet list per 31.12.2020
Year built GT Lane metres Passengers TEU (3) Deployment
Freight ferries (ro-ro)
Hollandia Seaways 2019 60,465 6,690 Vlaardingen-Immingham
Humbria Seaways 2020 60,465 6,690 Vlaardingen-Immingham
Flandria Seaways 2020 60,465 6,690 Gothenburg-Zeebrügge
Ficaria Seaways 2006/09/11 37,939 4,731 Drydock
Freesia Seaways 2005/09/14 37,939 4,731 Gothenburg-Gent
Begonia Seaways 2004/09/14 37,939 4,731 Gothenburg-Imingham
Ark Dania
7
2014 33,313 3,000 342 Esbjerg-Immingham
Ark Germania 2014 33,313 3,000 342 Esbjerg-Immingham
Magnolia Seaways 2003/13 32,523 3,831 Esbjerg-Immingham
Petunia Seaways 2004/13 32,523 3,831 Gothenburg-Gent
Primula Seaways 2004/14/16 37,985 4,650 Gothenburg-Gent
Selandia Seaways 1998/13 24,803 2,772 Cuxhaven-Immingham
Suecia Seaways 1999/11/14 24,613 2,772 180 Vlaardingen-Felixstowe
Britannia Seaways 2000/11/14 24,613 2,772 180 Cuxhaven-Immingham
Ark Futura 1996/00 18,725 2,308 246 Kiel-Klaipeda
Botnia Seaways 2000 11,530 1,899 300 Marseilles-Tunis
Finlandia Seaways 2000 11,530 1,899 300 Baltic Sea
Gardenia Seaways
¹ 2017 32,336 4,076 Vlaardingen-Immingham
Tulipa Seaways
1
2017 32,336 4,076 Vlaardingen-Felixstowe
Belgia Seaways 2000 21,005 2,475 Esbjerg-Immingham
Gothia Seaways 2000 21,005 2,475 Fredericia-Copenhagen-Klaipeda
Mont Ventoux
5
1996 18,469 2,025 Marseille-Tunis
Fadiq
2
2017 32,770 4,076 Gothenburg-Imingham
Transporter
2
1991 6,620 1,250 296 Oslo Fjord-Continent/UK
Ephesus Seaways 2019 60,465 6,690 Istanbul-Trieste
Troy Seaways 2019 60,465 6,690 Istanbul-Trieste
Pergamon Seaways (ex UN Istanbul) 2013/20 31,595 4,094 Istanbul-Trieste
Galata Seaways (ex Cemil Bayülgen) 2010/19 34,215 4,350 Istanbul-Sete
Myra Seaways (ex Cuneyt Solakoglu) 2009/17/19 34,236 4,350 Istanbul-Sete
Zeugma Seaways (ex UN Akdeniz) 2008/17/19 34,236 4,350 Istanbul-Sete
Assos Seaways (ex Saffet Ulusoy) 2005/19 29,060 3,726 Istanbul-Trieste
Sumela Seaways (ex UN Karadeniz) 2008/18/19 34,236 4,350 Istanbul-Sete
Artemis Seaways (ex UN Marmara) 2005/20 29,060 3,726 Istanbul-Trieste
Aspendos Seaways (ex UN Pendik) 2005/19 29,060 3,726 Istanbul-Trieste
Dardanelles Seaways (ex UN Trieste) 2006/19 29,060 3,726 Istanbul-Trieste
Cappadocia Seaways (ex UND Atilim) 2002/20 26,525 3,214 Istanbul-Trieste
Olympos Seaways (ex UND Birlik) 2002/20 26,525 3,214 Mersin-Trieste
Gallipoli Seaways (ex UND Ege) 2001/20 26,525 3,214 Mersin-Trieste
Year built GT Lane metres Passengers TEU (3) Deployment
Freight and passenger ferries (ro-pax)
Victoria Seaways 2009/14 25,675 2,500 600 Kiel-Klaipeda
Regina Seaways
1
2010/15 25,666 2,500 600 Kiel-Klaipeda
Athena Seaways 2007/15 26,141 2,593 462 Karlshamn-Klaipeda
Optima Seaways 1999 25,263 2,300 336 Rosslare-Dunkirk
Patria Seaways 1991 18,332 1,800 213 Karlshamn-Klaipeda
Dunkerque Seaways
4
2005 35,923 2,900 780 Dover-Dunkirk
Delft Seaways
4
2006 35,923 2,900 780 Dover-Dunkirk
Dover Seaways
4
2006 35,923 2,900 780 Dover-Dunkirk
Calais Seaways
4
1991/92/99 28,833 1,800 1,850 Dover-Calais
Côte Des Flandres
4
2005 33,940 1,900 2,000 Dover-Calais
Côte Des Dunes
4
2001 33,796 1,900 2,473 Dover-Calais
Côte d'Albâtre
1
2006 18,940 1,270 600 Newhaven-Dieppe
Kerry
2
2001 24,418 2,030 412 Rosslare-Dunkirk
Visby
2
2003 29,746 1,800 400 Rosslare-Dunkirk
Sirena Seaways 2002/03 22,382 2,056 623 Paldiski-Kappelskär
Seven Sisters
1
2006 18,940 1,270 600 Newhaven-Dieppe
Passenger cruise ferries 31
Freight ferries (ro-ro) 13
Freight and passenger ferries (ro-pax) 18
Average age of owned vessels in route network, end 2020
1
Chartered (bareboat charter)
2
Chartered (time charter)
3
TEU: 20 foot container unit
4
hort-sea day ferry
5
VSA: Vessel sharing agree-
ment ith owner/charterer
6
SCA: Slot charter agreement
with owner/charterer
7
SCA: Slot charter agreement
with DFDS
141 Fleet list
DFDS Annual Report 2020
Fleet list (continued)
Year built GT Lane metres Passengers TEU (3) Deployment
Passenger cruise ferries
Pearl Seaways 1989/01/05/14 40.231 1.482 2.168 Oslo-Frederikshavn-Copenhagen
Crown Seaways 1994/05/14 35.498 1.370 2.044 Laid-up
King Seaways 1987/93/06 31.788 1.410 1.534 Newcastle-Ijmuiden
Princess Seaways 1986/93/06 31.356 1.410 1.364 Newcastle-Ijmuiden
Sideport ships
Lysvik Seaways 1998/04 7.409 160 Westcoast Norway-Continent/UK
Lysbris Seaways 1999/04 7.409 160 Westcoast Norway-Continent/UK
Container ships
Meandi
5
2007 8.246 962 Oslo Fjord-Rotterdam
Energize
5
2004 7.642 750 Oslo Fjord-Rotterdam
Sven D
6
2005 7.720 809 Oslo Fjord-Rotterdam
Samskip Endeavour
5
2011 7.852 812 Rotterdam-Ireland
Samskip Express
5
2006 7.852 803 Rotterdam-Ireland
JSP Rider
6
2006 9.340 804 Rotterdam-Ireland
Miriam
6
2010 7.852 814 Rotterdam-Ireland
Elbcarrier
6
2007 8.243 974 Rotterdam-Ireland
CT Rotterdam
6
2008 8.246 974 Rotterdam-Ireland
Mirror
6
2007 7.852 814 Rotterdam-Ireland
Freight ferries (ro-ro)
Freight and passenger ferries
(ro-pax)
Passenger cruise ferries
Sideport and container ships
67%
24%
8%
Gross tons fleet distribution, end 2020
Ownership shares of fleet, end 2020
Sideport and container ships 100%
Freight ferries (ro-ro) 87%
Freight and passenger ferries (ro-pax) 63%
Freight and passenger ferries (ro-pax) 100%
1
Chartered (bareboat charter)
2
Chartered (time charter)
3
TEU: 20 foot container unit
4
hort-sea day ferry
5
VSA: Vessel sharing agree-
ment ith owner/charterer
6
SCA: Slot charter agreement
with owner/charterer
7
SCA: Slot charter agreement
with DFDS
1%
Management review
DFDS Annual Report 2020
142
AGM:
Annual general meeting
BAF:
Bunker adjustment
factor, surcharge for price
changes in bunker fuel oil
Bareboat charter:
Lease
of a ship without crew
for an agreed period
Bunker:
Oil-based fuel
used in shipping
Charter:
Lease of a ship
for an agreed period
Charter-out:
Leasing of a
ship to an external party
for an agreed period
MGO:
Marine gas oil, also
known as marine diesel
with sulphur content at
or below 0.1%
Non-allocated items:
Corporate costs not
allocated to divisions
Northern Europe:
The Nordic countries,
Benelux, the United
Kingdom, Ireland, France,
Germany, Poland, the
Baltic nations, Russia
and other SNG countries
Ro-pax: Combined freight
and passenger ferry
Ro-ro: Roll on-roll off:
Freight ferry on which
freight is driven on and
off, e.g. trailers and other
unitised freight
Door-door transport
solution:
Transport of
goods from customer
pick up point to final
destination by a freight
forwarder. A freight
forwarder typically uses
third-party suppliers,
for example hauliers,
rail operators and ferry
operators to carry out
the transport
Ferry:
Ship carrying
passengers and their
cars and freight that
can be rolled on and
off, typically between
only two ports, and
hence over reasonably
short distances, on a
fixed sailing schedule.
On board facilities for
passengers and truck
drivers. Overnight ferries
have cabins while day
ferries usually have no
cabins
Short sea:
Shipping
between destinations
with a duration of typi
-
cally 1-3 days. Converse
is deep-sea shipping
between continents with
a duration of weeks
Sideport ship:
Ship
with ramps for loading/
unloading via ports in
the ship’s side
Space charter:
Third-
party lease of space on a
ship deck
Stevedoring:
Activities
related to loading and
unloading ships in a port
terminal
Time charter:
Lease of
a ship with crew for an
agreed period
Intermodal:
Transport
solution that combines
different transport
modes (road, rail, sea)
Lane metre:
An area
on a ship deck one lane
wide and one metre long.
Used to measure freight
volumes
Logistics solution:
Logis-
tics covers solutions that
require more than just
sea or land-based trans
-
port as this will typically
be combined with
storage, cross docking
of consignments and
distribution. Moreover,
information processing
can also be provided, e.g.
booking and tracking
Lo-lo:
Lift on-lift off:
Type of ship for which
cargo is lifted on and off,
e.g. containers
Tonnage tax:
Taxation
levied on ships according
to ship tonnage, i.e.
weight of ships
Trailer:
An unpowered
vehicle for transport of
freight pulled by a truck
Vessel sharing agree-
ment/slot charter:
Agreement between two
or more parties on the
distribution and use of
a ship’s freight-carrying
capacity
Glossary
143 Glossary
DFDS Annual Report 2020
Definitions
Operating profit before
depreciation (EBITDA)
and special items
Profit before deprecia-
tion and impairment on
non-current assets and
special items. Special
items are defined and
specified in note 2.6.
Operating profit (EBIT)
before special items
Profit after depreciation
and impairment on
non-current assets
before special items.
Special items are defined
and specified in note 2.6.
Operating margin
Operating profit
EBIT before
special items
Revenue
Net operating profit
after taxes (NOPAT)
Operating profit (EBIT)
minus tax on EBIT
Return on equity
Profit for the
year excluding
non-controlling
interests
Average equity
excluding
non-controlling
interests
Equity ratio
Equity
Total assets
Net interest-bearing debt
Interest-bearing
non-current and current
liabilities minus interest-
bearing non-current and
current assets
Earnings per share (EPS)
Profit for the year
excluding non-controlling
interests
Weighted average
number of circulating
shares
Market value
Number of shares, ex.
treasury shares, year-end
times share price at
year-end
No. of ships
Owned and chartered
ferries and other ships,
including slot charter
and vessel sharing
agreements
Invested capital
Net working capital
(non-interest bearing
current assets minus
non-interest bearing
current liabilities plus
non-current prepaid
costs minus pension and
jubilee liabilities and
other provisions) plus
non-current intangible
and tangible assets.
Return on invested
capital (ROIC)
Net operating
profit after taxes
(NOPAT)
Average
invested
capital
P/E ratio
Share price at year-end
Earnings per share (EPS)
FCFE yield
FCFF including
interest etc.
received and paid
Market value at
year-end plus
non-controlling
interests
Total distribution yield
Total distribu-
tion to share-
holders
Market value at year-end
plus
non-controlling
interests
Cash payout ratio
Total distribu-
tion to share-
holders
Cash flow from
operating
activities, net
Weighted average cost
of capital (WACC)
Average capital cost
for net interest-bearing
liabilities and equity,
weighted according to
the capital structure
Free cash flow, FCFF
Cash flow from operating
activities, gross,
minus
paid tax and cash flow
from investing activities
Adjusted free cash
flow, FCFF
Cash flow from operating
activities, gross,
minus
paid tax, cash flow from
investing activities
and payment of lease
liabilities and interest
Dividend return
Paid dividend per share
Share price
at beginning of year
Equity per share
Equity excluding
non-controlling interests
at year-end
Number of circulating
shares at year-end
Price/book value
Share price at year-end
Equity per share
at year-end
x 100
x 100
x 100
x 100
x 100
x 100
x 100
Roundings may in
general cause variances
in sums and percentages
in this report.
144 Definitions
DFDS Annual Report 2020
Moving for all
to grow since 1866
To enable trade and growth C. F. Tietgen merged four
Danish steamship companies to become DFDS
* in 1866.
Goods and coal from the UK, the world’s industrial loco
-
motive at the time, were sailed to Scandinavia and other
regions where markets for, among other things, textiles and
energy were developing. The new shipping lines conversely
created access for farmers in these regions to the UK’s
rapidly growing market for food and raw materials.
DFDS developed quickly in line with the growth it
helped create. Around 1900, DFDS’ steam ships also
connected farmers around the Black Sea with the new
Russian industrial area around St. Petersburg. Routes were
launched to the USA bringing back soya cake as feed to
European farmers. This supported their transformation
from exporters of livestock to producers and exporters
of processed products like butter and bacon. DFDS also
opened new routes to connect Danish and Scandinavian
cities with each other and the world. All this was based on
a fleet of more than 120 ships, among the largest in the
world at the time.
For many years DFDS transported immigrants, who
sought a better future, to the USA. During the world wars,
DFDS kept up supplies of critical food and coal to people in
Europe who otherwise would have been starving and unable
to heat their homes. Jobs and industry were kept alive.
After the war, DFDS’ fleet, many now powered by diesel
engines, kept moving: Goods from USA to Europe, people
between countries, goods between UK and mainland
Europe, between the Mediterranean and Scandinavia and to
and from Iceland. At the end of the sixties, DFDS were the
among the first to develop a roll-on-roll-off service, paving
the way for more efficient shipping of freight units such as
trailers carrying industrial cargo.
The logistics activities were developed from 1972 with
the same purpose. Connecting businesses with door-door
solutions to facilitate trade and growth. When Dan Trans
-
port was acquired in 1998, DFDS became one of the largest
forwarding and logistics companies in northern Europe. The
merged company, DFDS Dan Transport, was sold in 2000 to
focus the company’s resources on further developing the
ferry route network for freight and passengers.
This strategy was accelerated by the acquisition of
Norfolkline in 2010 and, in addition, the logistics arm
was now redeveloped to focus on transport corridors that
overlapped with the route network. In 2018, DFDS again
expanded into the Mediterranean through the acquisition of
Turkey’s largest freight ferry operator, U. N. Ro-Ro.
Today, DFDS is one of Europe’s largest combined ferry
and logistics companies with a continued clear purpose of
moving for all to grow.
In January 2021, DFDS entered into
an agreement to acquire HSF Logistics
Group to create Northern Europe’s
leading provider of cold chain logis
-
tics. The acquisition is subject to regu-
latory approval.
* Abbreviation in Danish for The
United Steamship Company.
145 DFDS’ history
DFDS Annual Report 2020
Financial calendar 2021
23 March
AGM, virtual
11 May
Q1 report 2021
17 August
Q2 report 2021
17 November
Q3 report 2021
Addresses of DFDS’ subsidiaries, locations and offices are available from www.dfds.com
DFDS A/S · Sundkrogsgade 11, DK-2100 Copenhagen Ø · T +45 3342 3342 · F +45 3342 3311 · dfds.com · CVR 14 19 47 11