Q3 2022 interim report
OUTLOOK RAISED
BY STRONG Q3
• Q3 EBITDA up 88% to DKK 1.59bn
• Higher earnings in all business units
• Passenger earnings 11% above 2019 (pre-Covid-19)
• Financial leverage of 2.9x back in target range
• Full-year EBITDA outlook raised to DKK 4.8-5.0bn
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Q3 2022
• ROIC above 8% target
• Operating cash flow of DKK 1.4bn
• Ferry CO2 emissions reduced 4%
(g/CO2/GT per mile)
Outlook 2022
• EBITDA raised to DKK 4.8-5.0bn
(previously DKK 4.4-4.8bn)
• Revenue growth of around 45%
“Steady demand from freight customers
and strong return of passengers raised
our result again in Q3. With financial
leverage back in our target range, we are
well positioned to face challenges and
to pursue growth opportunities.”
Torben Carlsen, CEO
Group revenue increased 64% to DKK 7.2bn driven by the
continued recovery in passenger numbers and spending as
well as price increases for freight services to cover rising
energy and other costs. Revenue was also increased by
the acquisitions of HSF Logistics Group in September 2021
and ICT Logistics in January 2022.
Total EBITDA before special items increased 88% to
DKK 1,591m. The EBITDA for freight ferry and logistics
activities increased 28% to DKK 1,036m driven by higher
earnings in all business units except for Channel. Oil price
increases were covered by the contractual pass-through
clauses for ferry services. Cost coverage for logistics
services improved in Q3 on the back of initiatives taken in
previous quarters.
The Q3 EBITDA for passenger activities in the Channel,
Baltic Sea, and Passenger business units increased to
DKK 569m from DKK 52m in 2021. The continued
recovery in passenger travel improved earnings in all three
business units. The Q3 passenger EBITDA was 11% above
2019, the latest pre-Covid-19 year.
Outlook 2022
The outlook for EBITDA before special items is raised to
DKK 4.8-5.0bn following a strong Q3 result and steady
demand in both freight and passenger markets (previously
DKK 4.4-4.8bn, 2021: DKK 3.4bn). Revenue is expected to
grow by around 45% compared to 2021 (previously
around 40%). The outlook is detailed on page 10.
Highlights Q3
17 November 2022. Conference call today at 10.00am CET
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KEY FIGURES
2022
2021
2021-22
2020-21
2021
DKK m
Q3
Q3
Change, %
LTM
LTM
Change, %
FY
Revenue
7,205
4,406
64
25,458
16,148
58
17,869
EBITDA before special items
1,591
848
88
4,786
3,265
47
3,411
EBIT before special items
968
332
191
2,317
1,294
79
1,313
Profit before tax and special items
853
263
224
2,000
974
105
1,035
Profit before tax
853
291
193
2,021
907
123
1,069
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Key figures
2022
2021
2022
2021
2021-22
2021
DKK m
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year
Income statement
Revenue
7,205
4,406
19,976
12,387
25,458
17,869
• Ferry Division
4,634
3,029
12,424
8,583
15,647
11,806
• Logistics Division
2,947
1,633
8,591
4,614
11,132
7,155
• Non-allocated items
166
124
481
397
610
526
• Eliminations
-542
-380
-1,520
-1,207
-1,931
-1,618
Operating profit before depreciation (EBITDA)
and special items
1,591
848
3,871
2,496
4,786
3,411
• Ferry Division
1,310
704
3,110
2,112
3,852
2,852
• Logistics Division
297
155
787
382
998
593
• Non-allocated items
-16
-11
-27
2
-64
-34
Profit/loss on disposal of non-current assets, net
1
1
9
3
8
2
Operating profit (EBIT) before special items
968
332
2,008
1,004
2,317
1,313
Special items, net
0
28
17
30
21
34
Operating profit (EBIT)
968
360
2,025
1,034
2,338
1,348
Financial items, net
-115
-69
-264
-225
-317
-278
Profit before tax
853
291
1,762
810
2,021
1,069
Profit for the period
817
242
1,636
720
1,891
976
Profit for the period excluding non-controlling in-
terest
814
238
1,625
707
1,877
958
Capital
Total assets
-
-
34,188
30,435
-
30,721
DFDS A/S' share of equity
-
-
12,639
11,109
-
11,446
Equity
-
-
12,753
11,214
-
11,554
Net interest-bearing debt
-
-
14,038
12,226
-
13,481
Invested capital, end of period
-
-
27,125
23,795
-
25,369
Invested capital, average
26,634
23,335
26,265
22,813
25,771
23,324
2022
2021
2022
2021
2021-22
2021
DKK m
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year
Cash flows
Cash flows from operating activities, before fi-
nancial items and after tax
1,335
1,147
3,694
2,634
4,544
3,484
Cash flows from investing activities
-987
-1,106
-2,498
-1,616
-4,091
-3,210
• Acquisition of enterprises and activities
-224
-962
-280
-962
-1,083
-1,765
• Other investments, net
-763
-143
-2,218
-654
-3,008
-1,444
Free cash flow
348
41
1,196
1,018
453
274
Payment of lease liabilities and lease interest
-263
-233
-853
-655
-1,127
-929
Adjusted free cash flow (FCFF)
85
-192
344
363
-674
-655
Key operating and return ratios
Average number of employees (FTE)
-
-
11,351
8,296
10,105
8,874
Number of ferries
-
-
82
80
-
80
Revenue growth (reported), %
63.5
22.5
61.3
21.3
42.5
27.9
EBITDA-margin before special items, %
22.1
19.3
19.4
20.1
18.8
19.1
Operating margin before special items, %
13.4
7.5
10.1
8.1
9.1
7.3
Revenue/invested capital average, times
-
-
-
-
1.0
0.8
Return on invested capital (ROIC), %
-
-
-
-
8.5
5.3
ROIC before special items, %
-
-
-
-
8.4
5.2
Return on equity, %
-
-
-
-
15.8
8.7
Key capital and per share ratios
Equity ratio, %
-
-
37.3
36.8
-
37.6
Financial leverage, times
-
-
2.9
3.3
2.9
3.7
Earnings per share (EPS), DKK
14.21
4.15
28.38
12.30
32.76
16.69
Dividend paid per share, DKK
4.00
0.00
8.00
0.00
8.00
0.00
Number of shares, end of period, '000
-
-
58,632
58,632
-
58,632
Weighted average number of circulating shares,
'000
-
-
57,351
57,735
-
57,416
Share price, DKK
-
-
197.9
341.2
-
349.0
Market value
-
-
11,330
19,571
-
20,018
* Defined as “Net interest-bearing debt/EBITDA (LTM)”. The ratio includes a pro forma EBITDA for acquired companies.
Definitions on page XX.
Definitions on page 31
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1
*2021 full-year ESG data excludes HSF Logistics Group acquired in
September 2021.
ESG key figures
2022
2021
2022
2021
2021-22
2021
Environmental data
Unit
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year*
Total number of days operated
Days
5,801
5,827
17,514
17,278
23,433
23,197
CO2 emissions
CO2 emissions per GT nautical mile (Own fleet)
gCO2
12.3
12,8
12.6
13.0
12.6
13.0
CO2 emissions per GT nautical mile (Route network)
gCO2
12.7
13.2
13.1
13.6
13.1
13.6
Energy consumption
Total fuel consumption (Route network)
Tonnes
200,706
189,772
615,018
568,009
818,747
771,738
Oil spills
Spills (>1 barrel)
Number
0
0
0
0
0
0
2022
2021
2022
2021
2021-22
2021
Social data
Unit
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year*
Representation of women
Total workforce:
%
-
-
24
25
-
24
• Non-officed based
%
-
-
13
14
-
13
• Office based
%
-
-
41
39
-
44
Senior management
%
-
-
15
17
-
17
Managers
%
-
-
16
13
-
14
Employees
%
-
-
25
27
-
27
Safety at sea
Lost-time injury frequency (LTIF)
Incidents/mill. hours
5.2
5.5
4.8
4.3
4.4
4.3
Safety on land
Lost-time injury frequency (LTIF)
Incidents/mill. hours
6.8
7.8
7.4
5.9
8.3
7.4
Fatalities
Colleagues
Accidents
0
0
0
1
0
1
Contractors
Accidents
0
0
0
0
0
0
2022
2021
2022
2021
2021-22
2021
Governance data
Unit
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year*
Representation of women in the Board (AGM elected members)
%
-
-
33
33
-
33
Board nationality - non-Danish (AGM elected members)
%
-
-
33
17
-
17
Independent directors (AGM elected members)
%
-
-
83
83
-
83
Attendance at Board meetings (All Board members)
%
100
100
99
100
99
100
Whistle-blower reporting
Cases
8
11
22
22
27
27
Definitions on page 32.
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Market overview
Despite rising inflation and interest rates, Q3 demand in
Europe for freight services and solutions remained stable
in most regions. Freight volumes are, however, expected to
weaken during Q4 as inflation, including higher energy
prices, bites into consumer demand.
European supply chains are still challenged by shortages
of haulage capacity and personnel. Backlogs have
therefore accumulated and this is expected to support
activity levels even if underlying demand slows down in
the rest of the year. The introduction of EU’s Mobility
Package and wage inflation continued to put pressure on
the supply of haulage capacity.
The growth of Turkey’s economy slowed down in Q3 by
rising inflation and further depreciation of the Turkish Lira
(TRY). Industrial production in the country’s export sector
continued to grow in the quarter, although at a lower pace
than in the first half-year. Activity levels also slowed in
Scandinavia and the UK as well as most parts of
Continental Europe.
Ferry passenger volumes continued to recover from travel
restrictions through the third, and high season, quarter
across northern Europe. Many routes carried volumes on
level with or above 2019. The recovery is supported by a
rise in holiday travel by car due to the increased ticket
prices and disruptions of air travel.
The main changes in average exchange rates in Q3 2022
vs Q3 2021 were depreciation of TRY/DKK by 44% and
appreciation of USD/DKK by 17%.
Major events in Q3
Acquisition expands Irish logistics network
To further expand and develop the European logistics
offering, DFDS agreed in July 2022 to acquire 100% of the
share capital of Lucey Transport Logistics Ltd based in
Dublin, Ireland.
Lucey Transport Logistics is an Irish provider of transport
and logistics solutions, primarily to consumer goods
companies. Door-door transports are provided for full- and
part-loads as well as distribution services. The logistics
solutions include warehousing, inventory management,
bonded storage, and product rework and labelling.
Solutions are supported by a distribution centre in Dublin
and regional warehousing facilities in key locations across
Ireland and Northern Ireland totalling 38k m2. Operations
also include 70 trucks and more than 400 trailers. Lucey
Transport Logistics had annual revenue of DKK 240m
(EUR 32m) and 240 employees in 2021.
The acquisition strengthens DFDS’ customer offering in the
region, including an opportunity to offer international
transports to Lucey Transport Logistics’ customers. In
addition, synergies are expected from mainly haulage
efficiency and equipment procurement.
The transaction was completed at the end of September
2022 and Lucey Transport Logistics was included in DFDS’
consolidated accounts from 30 September 2022.
BBB- investment grade credit rating from Scope
DFDS A/S received a first-time issuer rating of BBB- with
stable outlook from Scope Ratings GmbH (Scope). DFDS
A/S’ senior unsecured debt was also rated BBB in line with
the issuer rating. The rating corresponds to an investment
grade credit rating and is obtained to support and enhance
access to capital markets as well as to optimise the
financing cost on any future bond issuances.
Major events after Q3
Strategic dialogue initiated with Ekol Logistics
DFDS has since 2018 operated a freight ferry route
network in the Mediterranean facilitating trade between
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Turkey and multiple European markets via routes calling
Italy, France, and Spain.
In view of geopolitical developments and supply chain
security and stability, Turkey’s manufacturing capabilities
and trade with Europe are expected to continue to grow in
the coming years.
To further develop our ability to facilitate trade and to
enhance customer offerings, a strategic dialogue between
DFDS and Ekol Logistics, a major Turkish logistics
company, has been initiated to explore a possible
acquisition of Ekol Logistics’ international road haulage
activities. Such a combination of ferry and logistics
activities in the Mediterranean network would mirror
DFDS’ proven northern European business model.
To ensure an efficient strategic dialogue for all
stakeholders, a filing was submitted on 14 October 2022
to the Turkish competition authorities to obtain their view
on a possible acquisition. In Turkey it is customary and
possible to file for clearance before transaction terms and
documents are finalised.
Any possible transaction linked to the strategic dialogue
with Ekol Logistics awaits among other things the
outcome of the filing with the Turkish competition
authorities and Board approval of transaction terms.
New Head of Ferry Division
Mathieu Girardin was appointed Head of Ferry Division,
EVP, and member of the Executive Management Team
(EMT) in July 2022 and joined DFDS in October 2022.
Mathieu Girardin, a French national born in 1982, was
previously Senior Vice President at CMA CGM, one of the
world’s largest shipping and logistics companies, for Short
Sea Lines Europe and Containerships. He has held senior
management positions at CMA CGM since 2013, including
both operational and corporate responsibilities.
Mathieu Girardin succeeds Peder Gellert Pedersen, Head of
Ferry Division and EVP, who retired after 28 years with
DFDS on 1 August 2022.
Dividend
An extraordinary dividend of DKK 4.00 per share was
distributed in August 2022 as announced and approved in
connection with the annual general meeting (AGM). In
March 2022, an ordinary dividend of DKK 4.00 per share
was approved by the AGM and distributed.
ESG actions and plans
Environment
DFDS’ Climate Action Plan covers short-term actions to
reduce emissions from existing assets (mainly ferries and
transport equipment), and transformative long-term
actions to de-carbonise operations.
Short-term actions and results
In Q3 2022, CO2 emissions were reduced on both own and
chartered vessels deployed across the route network. Own
fleet emissions were reduced 4% to 12.3 g/CO2/GT per
mile from 12.8 g/CO2/GT per mile in Q3 2021. Emissions
from the entire route network saw a similar 4% reduction
to 12.8 g/CO2/GT per mile from 13.2 g/CO2/GT per mile in
Q3 2021.
The ongoing redution of emissions is a result of the
continuous improvement of the fleet’s fuel efficiency
through operational end technical solutions such as
silicone hull paint and changed route schedules. The
largest reductions were achieved by the freight ferries
deployed on the North Sea and in the Mediterranean,
including the higher efficiency of the newbuildings.
Reductions are also driven by a Vessel Performance
Management team coupled with weekly performance
reports provided to crews on individual vessels.
During Q3 the first batch of biofuel (B100) was delivered
to Acacia Seaways in Rotterdam. The biofuel’s operational
and technical impacts are currently being analysed. So far
no critical issues have surfaced and the foreseen increased
fuel consumption has been less than expected..
Deployment of the first of 125 eTrucks is expected to
start in Gothenburg during December 2022.
Long-term transformative actions and plans
Projects to enable deployment of a green freight ferry in
the route network by 2025 continued in the quarter. In
addition, a feasibility study to retrofit existing ferries to
sail on hydrogen was initiated with H2 Energy.
The project to develop ‘green transport corridors’
continued in partnership with stakeholders that include
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companies in different parts of the value chain -
agricultural suppliers, food producers, fuel suppliers, and
logistics and transport providers as well as ports. The aim
is to accelerate the green transition – from incremental
steps to full climate neutrality - by knowledge sharing
across sectors, efficient use of resources, and large-scale
implementation of de-carbonisation initiatives.
The de-carbonisation of logistics activities includes a
target of a 50% absolute reduction in emissions from
warehousing and road transport by 2030. Reductions of
road emissions will come from use of alternative fuels and
further electrification of the truck fleet. By investing in
solar panels (photovoltaic systems), our warehouses are
expected to produce 10m kWh of green electricity per year
by 2030. 1m kWh is expected to be produced in 2022 and
production is expected to triple in 2023.
Social
Diversity & Inclusion
The total female representation in the workforce of 24%
was a percentage point lower than Q1-3 2021 due to the
consolidation of HSF Logistics Group with a female gender
ratio below DFDS. The office female gender ratio increased
to 41% for Q1-3 2022 from 39% in 2021. The ratio is
above DFDS’ 30% target. The senior management female
gender ratio for Q1-3 2022 decreased to 15% from 17%
last year as senior management was expanded with male
managers. The ratio of female managers increased to 16%
from 13% in 2021 following a return of more female than
male managers from the furloughing that took place in
2020 and 2021.
Safety
For sea-based operations, the lost-time injury frequency
(LTIF) decreasd to 5.2 in Q3 2022 from 5.5 in Q3 2021.
The decrease was due to minor injuries.
The land-based Health & Safety organisation launched a
safety campaign in the beginning of September to raise
awareness of general safety issues. The lost-time injury
frequency for the land-based operation decreased to 6.8 in
Q3 compared to 7.8 in Q3 2021.
The accuracy and reliability of the Health & Safety
reporting continues to improve as focus is upheld on data
quality, completeness, and timeliness of reporting from
both central and local parts of the organisation.
Fatal accident in Turkish port terminal
Colleagues and management were deeply saddened by
the demise of a yard worker in October following an
accident in the Pendik Terminal in Istanbul. The incident
was thoroughly analysed and investigated, including a
review of traffic and handling operations within the
terminal. Psychological and financial support were
provided for the family.
Governance
The number of whistleblower cases is an indicator of
employees’ awareness of the Code of Conduct. In 2022,
64% of reported cases were related to employee relations,
theft, or substance abuse while harrassment and
discrimination accounted for 18% of reported cases. All
cases are investigated with the involvement of relevant
managers and/or HR responsibles. Most reported incidents
have a low level gravity and main sanctions on closed
cases have been to address unacceptable behaviour and
emphasise the importance of acting in accordance with
DFDS’ Code of Conduct.
Financial performance
Revenue
The Group’s Q3 revenue was DKK 7,205m, an increase of
63.5% compared to 2021.
The Group’s Q1-3 revenue was DKK 19,976m, an increase
of 61.3% compared to 2021.
Revenue
DKK m
Q3 2022
Q3 2021
Change, %
Change
Ferry Division
4,634
3,029
53
1,605
Logistics Division
2,947
1,633
80
1,313
Non-allocated items
166
124
34
42
Eliminations
-542
-380
-42
-161
DFDS Group
7,205
4,406
64
2,799
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Ferry Division’s Q3 revenue increased 53.0% to
DKK 4,634m following a significant increase in passenger
revenue driven by the recovery from Covid-19 and higher
average revenue per passenger. In addition, revenue from
bunker surcharges increased considerably due to higher oil
prices throughout the quarter. Freight revenue was
otherwise flat as higher volumes and rates in primarily the
Mediterranean and North Sea business units were offset
by lower volumes in Channel and Baltic Sea.
Logistics Division’s Q3 revenue increased 80.4% to
DKK 2,947m. Around 75% of the increase was due to the
acquisitions of HSF Logistics Group and ICT Logistics.
Organic revenue growth for the existing activities was
21% reflecting higher activity, including new warehousing
and customs activities, and improved cost coverage
across regions. The latter included surcharges for higher
fuel prices and the EU Mobility Package as well as
increases to cover higher costs, particularly for haulage.
Operating profit before depreciation (EBITDA) and
special items
The Group’s Q3 EBITDA increased 88% or DKK 742m to
DKK 1,591m driven primarily by higher passenger
earnings.
The Group’s Q1-3 EBITDA increased 55% to DKK 3,871m
while EBITDA for the last twelve months was DKK
4,786m. Ferry Division’s Q3 EBITDA increased 86% or DKK
605m to DKK 1,310m. The EBITDA for freight ferry
activities increased 13% or DKK 88m to DKK 741m driven
mostly by the Mediterranean and North Sea business
units. Channel’s freight result was reduced by
Operating profit before depreciation (EBITDA) & special items
DKK m
Q3 2022
Q3 2021
Change, %
Change
Ferry Division
1,310
704
86
606
Logistics Division
297
155
91
141
Non-allocated items
-16
-11
-42
-5
DFDS Group
1,591
848
88
742
EBITDA-margin, %
22.1
19.3
n.a.
2.8
Associates and joint ventures, profit/loss on disposals and depreciation
DKK m
Q3 2022
Q3 2021
Change, %
Change
EBITDA before special items
1,591
848
88
742
Associates and joint ventures
-2
-3
18
1
Profit/loss on disposals
1
1
-54
-1
Depreciation and impairment
-621
-514
-21
-106
EBIT before special items
968
332
191
636
Financial items
DKK m
Q3 2022
Q3 2021
Change, %
Change
Interests, net
-87
-73
-19
-14
Foreign exchange gains/losses, net
-24
8
n.a.
-32
Other items, net
-5
-5
0
0
Total finance, net
-115
-69
-66
-46
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Q1 Q2 Q3 Q4
DKK m
DFDS GROUP - EBITDA BEFORE SPECIAL ITEMS
2020 2021 2022
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overcapacity on the Dover Strait market as well as a
decrease in overall market volume.
The total EBITDA for passenger activities across the
network increased DKK 517m to DKK 569m from
DKK 52m in 2021. The increase was driven by the
recovery of passenger travel from Covid-19.
Logistics Division’s Q3 EBITDA increased 91% or
DKK 142m to DKK 297m as both divisions increased
earnings. The higher result for the Cold Chain business unit
was due to the acquisition of HSF Logistics Group while
the increased result for Dry Goods was driven by cost
coverage initiatives as well as organic growth and
operational improvements.
Depreciation and operating profit (EBIT) before
special items
Depreciation in Q3 of DKK 621m was slightly below the
previous quarter but 21% or DKK 106m higher than last
year. Around 60% of the increase was due to acquisitions.
The remaining increase was primarily related to
depreciation on ferry newbuildings.
The Group’s Q3 EBIT before special items almost tripled to
DKK 968m and for Q1-3 EBIT before special items doubled
to DKK 2,008m.
Special items and operating profit (EBIT) after
special items
There were no material special items in Q3 2022. For Q1-3
special items were a net income of DKK 17m. The Group’s
Q3 EBIT after special items increased 167% to DKK 968m
and for Q1-3 EBIT after special items increased 96% to
DKK 2,025m.
Financial items
Total net financial items in Q3 was a cost of DKK 115m,
an increase of DKK 46m compared to Q3 2021. The net
interest cost was DKK 14m above 2021 due to an increase
in net interest-bearing debt and interest rates. In addition,
there was a variance of DKK -32m on net currency
adjustments following a net loss this year and a net gain
in Q3 2021.
For Q1-3, total net financial items was a cost of
DKK 264m compared to DKK 225m for Q1-3 2021.
Profit before special items and tax
The Q3 profit before special items and tax more than
tripled to DKK 853m and the profit for the period was
DKK 817m, an increase of DKK 575m compared to 2021.
For Q1-3, the profit before special items and tax increased
124% to DKK 1,745m and the profit for the period was
DKK 1,636m.
Earnings per share
Q3 earnings per share (EPS) increased 242% to DKK 14.21
and for Q1-3 EPS increased 131% to DKK 28.38.
Cash flow and investments
The Q3 cash flow from operating activities increased 18%
to DKK 1,360m compared to Q3 2021. The improved
operating result offset a negative cash flow of DKK 176m
from working capital mainly due to a reversal of
passenger prepayments made ahead of Q3.
Net investments in Q3 totalled a negative cash flow of
DKK 987m of which DKK 449m was operating capital
expenditure, DKK 312m was related to purchase of a
freight ferry, and DKK 226m was used for acquisitions. The
operating capital expenditure was related to ferry
upgrades and dockings, port terminals, cargo carrying
equipment, and digitisation.
The Q3 free cash flow (FCFF) was DKK 348m and
DKK 85m adjusted for payment of lease liabilities
including interest.
The Q3 cash flow from financing activities was negative
by DKK 342m, including a net inflow from loans of
DKK 110m, payment of lease liabilities of DKK 226m, and
distribution of a dividend of DKK 229m. The net decrease
in cash was DKK 75m and at the end of Q3 cash amounted
to DKK 1,452m.
For Q1-3, the free cash flow (FCFF) was DKK 1,196m and
DKK 344m adjusted for payment of lease liabilities
including interest. Net investments in Q1-3 was an
outflow of DKK 2,498m of which DKK 1,339m was
operating capital expenditure, DKK 877m was related to
ferry newbuildings and purchase of a freight ferry, and
DKK 282m was related to acquisitions. The cash flow from
financing activities was a net outflow of DKK 405m
bringing the net cash flow for Q1-3 to a plus of DKK 552m.
2022
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Q3 2022 interim report / p 10
Invested capital and ROIC
Invested capital increased 14% to DKK 27.1bn at the end
of Q3 2022 compared to the same period in 2021. The
increase was mostly due to the second payment of the
acquisition of HSF Logistics Group, completion of ferry
newbuildings as well as capitalisation of additional ferry
and logistics leases.
The return on invested capital, ROIC, for Q3 2022 (last
twelve months) was 8.4% before special items compared
to 5.2% for the full-year 2021. DFDS’ return target is a
minimum ROIC of 8% before special items.
Capital structure
At the end of Q3 2022 net-interest-bearing debt (NIBD)
was DKK 14.0bn, an increase of 15% compared to the end
of Q3 2021. The increase was primarily due to the
acquisition of HSF Logistics Group.
During Q3 2022, a significant portion of interest-bearing
liabilities was reclassified from non-current to current
liabilities as it matures within one year. The debt is
expected to be refinanced in Q4 2022.
Financial leverage, as measured by the ratio of NIBD to
EBITDA before special items for the last twelve months
(LTM), was 2.9 at the end of Q3 compared to 3.7 at year-
end 2021 and 3.3 at the end of Q3 2021. The ratio
includes a pro forma LTM EBITDA for acquired companies.
Equity
Equity amounted to DKK 12,753m at the end of Q3 2022,
including non-controlling interests of DKK 114m. This was
an increase of 14% compared to the end of Q3 2021.
Total comprehensive income for Q1-3 2022 was
DKK 1,677m. Transactions with owners of DKK -474m
included dividend payments of DKK 470m.
The equity ratio was 37% at the end of Q3 2022 which
was on level with Q3 2021.
Outlook 2022
Demand for freight and passenger services remained
overall steady in Q3. Signs of a slowdown in freight
volumes are apparent or emerging in certain transport
corridors or sectors, for example the Dover Strait and
logistics services to the construction sector.
It is assumed that around 80% of the passenger EBITDA
decrease vs 2019 will be regained in 2022.
Revenue outlook
The revenue growth is expected to increase by around
45% compared to 2021 up from previously around 40%.
The main revenue growth drivers are the full-year impact
of acquisitions, the recovery in passenger volumes as well
as higher revenue from oil price surcharges and general
cost coverage initiatives for both ferry and logistics
activities.
Earnings outlook
The Group’s EBITDA before special items is expected to be
within a range of DKK 4.8-5.0bn (previously DKK 4.4-
4.8bn, 2021: DKK 3.4bn). See outlook table for divisional
split.
Investments
The 2022 outlook for investments remains around
DKK 2.7bn split on:
OUTLOOK 2022
DKK m
Outlook 2022
Previous outlook 2022
2021
Revenue growth
Around 45%
Around 40%
17,869
EBITDA before special items
4,800-5,000
4,400-4,800
3,411
Per division:
Ferry Division
3,900-4,000
3,500-3,800
2,852
Logistics Division
950-1,050
950-1,050
593
Non-allocated items
-50
-50
-35
Investments
-2,700
-2,700
-3,210
Types:
Operating
-1,500
-1,600
-975
Ferries: sale & purchase and newbuildings
-900
-800
-490
Acquisitions
-300
-300
-1,745
2022
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Q3 2022 interim report / p 11
• One combined freight and passenger ferry newbuilding
and exercise of a purchase option to buy one freight
ferry: DKK 900m
• Ferry operating capital expenditure: DKK 1,000m
(mainly related to ferry upgrades and dockings, port
terminals, cargo carrying equipment)
• Logistics operating capital expenditure: DKK 500m
(mainly related to cargo carrying equipment and
warehousing)
• Acquisitions: DKK 300m.
Capital structure
Financial leverage, as measured by the ratio between NIBD
and EBITDA, is expected to decrease further in Q4 from
2.9x for LTM Q3 2022. The target range for financial
leverage is 2.0-3.0x.
Various risks and uncertainties pertain to the outlook
The most important among these are possible major
changes in the demand for ferry services – freight and pas-
sengers - and logistics solutions.
Such demand is to a large extent linked to the level of eco-
nomic activity and trade in primarily Europe, especially
northern Europe, and in particular the UK, as well as adja-
cent regions, particularly Turkey.
Demand can also be impacted by competitor actions, sup-
ply chain disruptions, and extraordinary events such as
virus outbreaks and geopolitical instability.
The outlook can moreover be impacted by political changes,
first and foremost within the EU and Turkey. Brexit, the
trade agreement that came into effect on 1 January 2021
between the EU and the UK, is yet to be fully implemented
and its possible impact on trade therefore still constitutes
a risk.
Changes in economic variables, especially oil prices and ex-
change rates, can furthermore impact earnings.
Future financial results may therefore differ significantly
from outlook expectations.
2022
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Q3 2022 interim report / p 12
Cold chain expansion on track
The acquistion of HSF Logistics Group was completed one
year ago in September 2021. Annual revenue for our Cold
Chain business unit is now around DKK 5.6bn of which HSF
has added around DKK 4.0bn. Integration and synergies are on
track and our ferries now carry more reefer trailers.
2022
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Q3 2022 interim report / p 13
The division is organised in five
business units:
• North Sea
• Mediterranean
• Channel
• Baltic Sea
• Passenger
Q3 market, activity, and result trends
Total Q3 freight volumes decreased 6.6% compared to Q3
2021 and decreased 1.5% for the last twelve months.
Total Q3 passenger volumes increased more than fourfold
to 1,704k from 388k in Q3 2021. The Q3 2022 volumes
equalled 85% of volumes in Q3 2019.
North Sea
Q3 freight volumes were on level with Q3 2021.
Automotive volumes picked up in the quarter while paper
volumes were lower than last year. UK volumes were
reduced by strikes in the Felixstowe port during the
quarter but transfer of volumes to Immingham and higher
volumes on other routes maintained overall UK volumes
on level with Q3 2021.
Q3 EBITDA increased 45% to DKK 413m driven by lower
operating costs and revenue growth from rate increases
and standage fees in port terminals.
Mediterranean
Q3 freight volumes increased 7.0%. The growth rate was
lower than in the first half-year mainly due to operational
bottlenecks caused by fires in the Trieste region which
resulted in cancellations of train departures from the port.
Ferry capacity between Turkey and Italy was therefore
reduced in the quarter. The volume growth rate has picked
up again post Q3.
Q3 EBITDA increased 31% to DKK 362m driven by the
higher volumes and overall lower operating costs.
Channel
Q3 freight volumes decreased 11.5% due to lower
volumes on the Dover Strait following a decrease in total
market volumes and addition of capacity by a third ferry
operator. Volumes between Ireland and France were on
level with 2021.
Passenger volumes continued to recover through Q3
increasing to 1,206k from 224k in Q3 2021. The number of
passengers amounted to 81% of passengers in Q3 2019.
Ferry Division
Ferry Division
2022
2022
2021
2021
2021-22
2021
DKK m
Q1
Q2
Q3
Q1-Q3
Q1-Q3
Q1
Q2
Q3
Q4
LTM
Full year
Revenue
3,369
4,420
4,634
12,424
8,583
2,594
2,960
3,029
3,223
15,647
11,806
EBITDA before special items
598
1,203
1,310
3,110
2,112
641
766
704
741
3,852
2,852
Share of profit/loss of associates and
joint ventures
-4
-1
-2
-7
-8
-3
-2
-3
-4
-11
-13
Profit/loss on disposal of non-current
assets, net
2
0
-3
-1
2
1
0
1
2
1
4
Depreciation and impairment
-445
-466
-451
-1,362
-1,229
-387
-420
-422
-455
-1,816
-1,684
EBIT before special items
151
735
854
1,741
876
251
343
281
284
2,024
1,160
EBIT margin before special items, %
4
17
18
14
10
10
12
9
9
13
10
Special items, net
0
15
-
15
20
0
20
0
-8
7
12
EBIT
151
750
854
1,755
896
251
364
281
277
2,031
1,172
Invested capital, average
20,780
20,796
20,839
20,810
20,419
20,299
20,668
20,539
20,371
20,689
20,442
ROIC before special items, %
-
-
-
-
-
-
-
-
-
9.4
5.3
Average number of employees
-
-
-
6,048
5,301
-
-
-
-
5,669
5,381
Lane metres, '000
10,617
11,523
9,915
32,054
31,926
10,246
11,078
10,602
11,085
43,140
43,011
Tons, '000
169
149
156
474
476
167
147
162
157
631
633
Passengers, '000
283
984
1,704
2,971
580
83
109
388
289
3,260
869
2022
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Q3 2022 interim report / p 14
Duty-free sales was increased by the higher number of
passengers compared to 2021.
Q3 EBITDA more than doubled to DKK 207m. The freight
result was considerably reduced by the lower volumes but
this was offset by the recovery in passenger volumes and
onboard spending. The passenger result was above the
pre-Covid-19 level in Q3 2019.
Baltic Sea
Q3 freight volumes were down 18.7% as the war in
Ukraine reduced volumes, especially between Germany
and Lithuania. The route network’s capacity has been
adapted to market changes.
Passenger volumes were up 20.7% as holiday travel by
car gained market share from airline travel in the summer
high season.
Q3 EBITDA increased 26% to DKK 144m as lower
operating costs and higher passenger earnings offset the
lower freight volumes.
Passenger
Passenger volumes continued to recover through Q3
increasing to 402k from 84k in Q3 2021. The number of
passengers equalled 94% of passengers in Q3 2019.
Q3 EBITDA increased DKK 250m to DKK 165m from
DKK -85m in Q3 2021. The increase was driven by the
recovery in passenger volumes as well as an increase in
average revenue per pax which partly offset a
considerable increase in the net bunker cost.
Non-allocated items
These items primarily include external charter activities.
Q3 EBITDA was halved to DKK 17m.
2022
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Q3 2022 interim report / p 15
Ferry Division
2022
2022
2021
2021
2021-22
2021
DKK m
Q1
Q2
Q3
Q1-Q3
Q1-Q3
Q1
Q2
Q3
Q4
LTM
Full year
North Sea
Revenue
1,165
1,372
1,320
3,857
3,079
971
1,117
991
1,081
4,938
4,161
EBITDA before special items
314
457
413
1,183
963
301
378
284
325
1,508
1,287
EBIT before special items
159
308
272
739
521
150
229
142
169
908
690
Invested capital*
6,038
5,971
6,652
6,148
6,470
6,762
6,811
6,253
5,930
6,169
6,362
ROIC before special items, %
-
-
-
-
-
-
-
-
-
14.4
10.6
Lane metres freight, '000
3,510
3,574
3,366
10,450
10,329
3,358
3,609
3,362
3,439
13,890
13,769
Tons, '000
169
149
156
474
476
167
147
162
157
631
633
Mediterranean
Revenue
903
1,101
1,024
3,028
2,152
670
743
740
841
3,869
2,993
EBITDA before special items
293
341
362
996
781
248
257
276
297
1,293
1,078
EBIT before special items
151
196
214
561
469
155
154
160
166
727
635
Invested capital*
9,291
9,247
9,328
9,265
9,421
9,558
9,408
9,182
9,192
9,248
9,375
ROIC before special items, %
-
-
-
-
-
-
-
-
-
7.2
6.3
Lane metres freight, '000
1,363
1,426
1,329
4,118
3,685
1,191
1,265
1,229
1,349
5,467
5,034
Channel
Revenue
685
1,074
1,202
2,961
1,892
568
643
681
728
3,688
2,619
EBITDA before special items
69
205
207
481
256
74
104
78
102
583
358
EBIT before special items
-21
100
104
183
-26
-16
7
-18
10
194
-16
Invested capital*
2,172
2,426
2,070
2,177
1,914
1,701
2,250
2,133
2,040
2,168
1,939
ROIC before special items, %
-
-
-
-
-
-
-
-
-
8.7
-1.2
Lane metres freight, '000
4,629
5,410
4,220
14,260
14,222
4,531
4,923
4,767
5,094
19,354
19,316
Passengers, '000
127
629
1,205
1,961
311
38
50
224
130
2,091
441
Baltic Sea
Revenue
334
412
441
1,188
1,049
306
361
382
333
1,520
1,381
EBITDA before special items
51
119
144
314
311
83
111
118
80
394
391
EBIT before special items
16
86
107
208
199
51
68
80
26
235
226
Invested capital*
2,250
2,515
2,466
2,213
1,595
1,525
1,320
1,689
1,620
2,108
1,600
ROIC before special items, %
-
-
-
-
-
-
-
-
-
11.0
14.0
Lane metres freight, '000
999
986
900
2,886
3,411
1,104
1,199
1,108
1,056
3,942
4,467
Passengers, '000
40
61
96
197
173
40
53
79
41
238
214
Passenger
Revenue
184
446
632
1,262
255
31
40
184
208
1,469
463
EBITDA before special items
-147
64
165
82
-305
-100
-120
-85
-87
-5
-392
EBIT before special items
-168
34
141
7
-380
-124
-147
-109
-108
-101
-488
Invested capital*
798
859
854
802
672
629
731
751
699
792
677
ROIC before special items, %
-
-
-
-
-
-
-
-
-
-13.1
-72.6
Lane metres freight, '000
114
127
99
340
278
61
82
136
147
487
425
Passengers, '000
116
294
403
813
95
5
6
84
118
931
214
Non-allocated items
Revenue
140
76
100
317
293
86
102
105
164
481
456
EBITDA before special items
18
17
17
52
106
36
36
34
25
77
131
EBIT before special items
14
12
15
42
93
35
33
25
22
63
115
*The invested capital in the quarter is shown as per the end of the period.
For the full year and LTM, the invested capital is shown as an average.
2022
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Q3 2022 interim report / p 16
The division is organised in two
business units:
• Dry Goods
• Cold Chain
Q3 market, activity and result trends
Dry Goods
Forwarding volumes picked up within the Nordic region,
except for Finland, and in the UK corridors, except for
Netherlands-UK, as demand was stable and availability of
haulage capacity improved through the quarter. New
customer volumes were added, especially in the Nordic
region. Demand for contract logistics solutions continued
to expand with high utilisation of new warehousing
facilities in Sweden, the Netherlands, and the UK. The
existing Swedish and Dutch contract logistics solutions
also continued to grow.
Q3 EBITDA increased 55% to DKK 144m as most activities
in the Nordic and Continent regions improved coverage of
rising haulage and energy costs. New warehousing and
customer contracts as well as considerable performance
improvements achieved by several activities also raised
earnings. Results for the UK region was on level with last
year despite one-off gains last year.
Cold Chain
The addition of HSF Logistics Group almost tripled
revenue compared to Q3 2021. Nordic forwarding volumes
developed positively in the quarter. Lagging cost coverage
for the Danish haulage operation was improved during the
quarter. The Norwegian activities were restructured,
including closure of activities performing below
expectations.
On the Continent, activity in Germany continued to grow.
The Dutch distribution centre in Nijmegen is focused on
exports to the UK and France. The adaptation of its
operating model, that includes in-house haulage operated
out of Poland, to EU’s Mobility Package continued in the
quarter. Demand was reduced somewhat by the increased
complexity of trading with the UK. The Winterswijk
distribution centre services the Benelux and German
markets where demand was stable. This centre was less
impacted by the Mobility Package as it primarily uses
local haulage providers. Cost coverage was on track in the
quarter.
Demand recovered through Q3 for most of the UK
activities, although seafood volumes from Shetland
decreased and demand from retailers in England for
certain seafood segments declined.
Q3 EBITDA increased DKK 90m to DKK 153m from
DKK 63m in Q3 2021 due to the acquisition of HSF
Logistics Group that was consolidated from 14 September
2021. Financial performance was overall in line with
expectations. The result for the UK activities was on level
with last year.
Logistics Division
Logistics Division
2022
2022
2021
2021
2021-22
2021
DKK m
Q1
Q2
Q3
Q1-Q3
Q1-Q3
Q1
Q2
Q3
Q4
LTM
Full year
Revenue
2,666
2,979
2,947
8,591
4,614
1,426
1,554
1,633
2,541
11,132
7,155
EBITDA before special items
216
274
297
787
382
101
126
155
211
998
593
Share of profit/loss of associates and
joint ventures
-1
0
0
-1
0
0
0
0
0
-1
0
Profit/loss on disposal of non-current
assets, net
2
4
3
10
1
0
1
0
-2
7
-1
Depreciation and impairment
-144
-147
-148
-439
-195
-62
-61
-73
-127
-566
-322
EBIT before special items
74
131
152
357
188
39
66
83
81
438
269
EBIT margin before special items, %
3
4
5
4
4
3
4
5
3
4
4
Special items, net
2
0
0
2
6
0
-19
25
-4
-2
2
EBIT
77
131
152
359
194
39
47
109
77
437
271
Invested capital, average
4,418
4,676
4,934
4,676
2,094
1,469
1,497
2,720
4,091
4,532
2,520
ROIC before special items, %
-
-
-
-
-
-
-
-
-
7.5
8.6
Average number of employees
-
-
-
4,483
2,218
-
-
-
-
3,659
2,774
2022
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Q3 2022 interim report / p 17
Logistics Division
2022
2022
2021
2021
2021-22
2021
DKK m
Q1
Q2
Q3
Q1-Q3
Q1-Q3
Q1
Q2
Q3
Q4
LTM
Full year
Dry Goods
Revenue
1,522
1,732
1,668
4,922
3,569
1,147
1,231
1,191
1,352
6,274
4,922
EBITDA before special items
109
147
144
400
246
70
83
93
66
466
312
EBIT before special items
44
77
75
197
105
23
38
44
20
216
125
Invested capital*
1,562
1,682
2,025
1,593
985
1,038
989
922
1,103
1,459
1,009
ROIC before special items, %
-
-
-
-
-
-
-
-
-
12.0
9.8
Cold Chain
Revenue
1,319
1,433
1,461
4,213
1,282
351
399
533
1,354
5,567
2,636
EBITDA before special items
107
127
153
387
136
31
43
63
145
532
281
EBIT before special items
30
54
77
161
83
16
28
39
62
223
145
Invested capital*
3,048
3,059
3,102
3,083
1,110
475
492
3,037
3,122
3,074
1,512
ROIC before special items, %
-
-
-
-
-
-
-
-
-
5.4
7.7
* The quarterly invested capital is shown as per the end of the period. For the full-year, the invested capital is shown as an average.
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Q3 2022 interim report / p 18
Management statement
Executive Board Torben Carlsen , CEO . Ka rina Deaco n , CFO
Board of directors Clau s V. Hemmi ngsen , Chai r , Klaus N yborg , Vice Chair ,
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DFDS Group - Income statement
DFDS Group - Income Statement
2022
2021
2022
2021
2021-22
2021
DKK m
Note
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year
Revenue
3
Costs
Ferry and other ship operation and maintenance
-1,766
-973
-4,869
-2,517
-6,232
-3,880
Freight handling
-780
-668
-2,358
-1,917
-3,039
-2,598
Transport solutions
-1,573
-925
-4,623
-2,635
-5,881
-3,893
Employee costs
-1,202
-830
-3,461
-2,365
-4,541
-3,444
Costs of sales and administration
-294
-162
-794
-457
-979
-643
Operating profit before depreciation (EBITDA) and special items
Share of profit/loss of associates and joint ventures
-2
-3
-8
-9
-12
-13
Profit/loss on disposal of non-current assets, net
Depreciation, ferries and other ships
-358
-333
-1,100
-963
-1,458
-1,322
Depreciation, other non-current assets
-263
-181
-763
-522
-1,007
-766
Operating profit (EBIT) before special items
Special items, net
4
Operating profit (EBIT)
Financial income
Financial costs
-129
-78
-287
-230
-358
-307
Profit before tax
Tax on profit
-36
-49
-126
-90
-130
-94
Profit for the period
Attributable to:
Equity holders of DFDS A/S
Non-controlling interests
Profit for the period
Earnings per share
Basic earnings per share (EPS) of DKK 20 , DKK
Diluted earnings per share (EPS-D) of DKK 20 , DKK
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DFDS Group – Statement of Comprehensive income
2022
2021
2022
2021
2021-22
2021
DKK m
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year
Profit for the period
Other comprehensive income
Items that will not be reclassified subsequently to the Income statement:
Remeasurement of defined benefit pension obligations
Tax on items that will not be reclassified to the Income statement
-25
-25
Items that will not be reclassified subsequently to the Income statement
Items that are or may be reclassified subsequently to the Income statement:
Value adjustment of hedging instruments:
Value adjustment for the period
Value adjustment transferred to operating costs
-1
-16
-1
-37
-21
-56
Value adjustment transferred to financial costs
-2
Value adjustment transferred to non-current tangible assets
-65
-96
-36
-139
Tax on items that may be reclassified to the Income statement
-21
-2
-33
-2
-32
-1
Foreign exchange adjustments, subsidiaries
-58
-9
-146
-134
Items that are or may be reclassified subsequently to the Income statement
-6
-57
-86
-124
Total other comprehensive income after tax
-6
-57
-86
-9
Total comprehensive income
Attributable to:
Equity holders of DFDS A/S
Non-controlling interests
Total comprehensive income
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DFDS Group - Balance sheet
Assets
Equity and liabilities
2022
2021
2021
DKK m
30 Sept.
30 Sept.
31 Dec.
Goodwill
Other non-current intangible assets
Software
Development projects in progress
Non-current intangible assets
Land and buildings
Terminals
Ferries and other ships
Equipment, etc.
Assets under construction and prepayments
Right-of-use assets
Non-current tangible assets
Investments in associates, joint ventures and securities
Receivables
Prepaid costs
Deferred tax
Pension assets
Derivative financial instruments
Other non-current assets
Non-current assets
Inventories
Trade receivables
Receivables from associates and joint ventures
Other receivables
Prepaid costs
Derivative financial instruments
Cash
Current assets
Assets classified as held for sale
Total current assets
Assets
2022
2021
2021
DKK m
30 Sept.
30 Sept.
31 Dec.
Share capital
Reserves
-324
-356
-396
Retained earnings
Equity attributable to equity holders of DFDS A/S
Non-controlling interests
Equity
Interest-bearing liabilities
Lease liabilities
Deferred tax
Pension and jubilee liabilities
Other provisions
Derivative financial instruments
Non-current liabilities
Interest-bearing liabilities
Lease liabilities
Trade payables
Payables to associates and joint ventures
Other provisions
Corporation tax
Other payables
Derivative financial instruments
Prepayments
Current liabilities
Liabilities
Equity and liabilities
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DFDS Group - Statement of changes in equity 1 January - 30 September 2022
DKK m
Share
capital
Translation
reserve
Hedging
Reserve
Treasury
shares
Retained
earnings
Equity
attributable
to equity
holders
of DFDS A/S
Non-
controlling
interests
Total
Equity at 1 January 2022
-366
-5
-25
Comprehensive income for the period
Profit for the period
Other comprehensive income
-145
-33
Total comprehensive income
-145
Transactions with owners
Acquisition, non-controlling interests
-1
Dividend paid
-235
-235
-235
Dividend paid, non-controlling interests
-3
-3
Dividend on treasury shares
Extraordinary dividend paid
-235
-235
-235
Extraordinary dividend on treasury shares
Share-based payments
Purchase of treasury shares
-2
-30
-32
-32
Transactions with owners
-2
-472
-474
-4
-478
Equity at 30 September 2022
-511
-28
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DFDS Group - Statement of changes in equity 1 January - 30 September 2021
DKK m
Share
capital
Translation
reserve
Hedging
Reserve
Treasury
shares
Retained
earnings
Equity
attributable
to equity
holders
of DFDS A/S
Non-
controlling
interests
Total
Equity at 1 January 2021
-394
-25
Comprehensive income for the period
Profit for the period
Other comprehensive income
-100
-2
-86
-86
Total comprehensive income
-100
Transactions with owners
Acquisition, non-controlling interests
Share-based payments
Purchase of treasury shares
-4
-71
-75
-75
Cash from sale of treasury shares related to exercise of share options
Transactions with owners
-22
-22
-20
Equity at 30 September 2021
-378
-25
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DFDS Group – Statement of cash flows
2022
2021
2022
2021
2021-22
2021
DKK m
Q3
Q3
Q1-Q3
Q1-Q3
LTM
Full year
Operating profit before depreciation (EBITDA) and special items
Cash flow effect from special items related to operating activities
-48
-9
-51
-44
-58
-51
Adjustments for non-cash operating items, etc.
Change in working capital
-176
-50
-144
Payment of pension liabilities and other provisions
-6
-7
-20
-23
-31
-33
Cash flow from operating activities, gross
Interest received, etc.
Interest paid, etc.
-95
-56
-263
-218
-352
-302
Taxes paid
-25
-7
-89
-59
-82
-52
Cash flow from operating activities, net
Investments in ferries including dockings, etc.*
-530
-121
-1,577
-529
-2,193
-1,145
Sale of ferries
Investments in other non-current tangible assets
-236
-56
-667
-141
-947
-421
Sale of other non-current tangible assets
Investments in non-current intangible assets
-18
-10
-50
-38
-74
-62
Acquisition of enterprises, associates, joint ventures, and activities
-224
-962
-280
-962
-1,083
-1,765
Divestment of enterprises and associates
-2
-2
Other investing cash flows
-2
Cash flow to/from investing activities, net
-987
-1,106
-2,498
-1,616
-4,091
-3,210
Cash flow before financing activities, net
-15
-1
Proceed from bank loans and loans secured by mortgage in ships
Repayment and instalments of bank loans and loans secured by mortgage in ships
-690
-264
-2,041
-662
-2,728
-1,349
Repayment of corporate bonds incl. settlement of cross currency swap
-1,000
-1,000
-1,000
Payment of lease liabilities
-226
-209
-750
-592
-992
-834
Settlement of forward exchange contracts related to leases
Acquisition of treasury shares
-32
-75
-32
-75
Cash received from exercise of share options
Other financing cash flows
-2
-33
-33
Dividends paid to non-controlling interests
-3
-3
Dividends paid to equity holders of DFDS A/S
-229
-459
-459
Cash flow to/from financing activities, net
-342
-278
-405
-678
-86
-359
Net increase (decrease) in cash and cash equivalents
-75
-293
-360
Cash and cash equivalents at beginning of period
Foreign exchange and value adjustments of cash and cash equivalents
-1
-2
-1
Cash and cash equivalents at end of period **
* The cash flow for Q1-Q3 2021 and Full year 2021 includes an amount of DKK 19m related to a net settlement of a vessel swap where DFDS buys a vessel of DKK 332m, sells a vessel of DKK 165m, and settles a loan receivable of DKK
149m.
** At 30 September 2022 DKK 175m (30 September 2021: DKK 167m) of the cash was deposited on restricted bank accounts.
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Note 1 Accounting policies and significant estimates
Basis of reporting
This section provides an overview of the Groups principal accounting policies as well as new
and amended IFRS standards and interpretations.
Accounting policies
This interim report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’
as adopted by the EU and additional Danish disclosure requirements for interim reports of
listed companies. The interim report has been prepared using the same accounting policies,
judgements and estimates as for the annual report for 2021 except as described below.
Implementation of new or changed accounting standards and interpretations
DFDS has adopted all new, amended, or revised accounting standards and interpretations
(IFRSs) endorsed by the EU effective for the accounting period beginning on 1 January 2022
none of which has had material impact on the Group’s Financial Statements.
Significant estimates
In the view of Management, the areas where accounting estimates and assessments are
significant remain the same as per DFDS’ latest annual report. However, considering the war
in Ukraine and the current macro-economic environment certain significant estimates have
been revisited in Q3 2022 compared to year-end 2021, particularly related to passenger
traffic and DFDS’ activities in Eastern Europe. The review did not give rise to a change in
estimates.
In the preparation of the Interim Report, Management undertakes several accounting
estimates 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 other factors which Management considers reasonable under the
circumstances, but which by their nature are uncertain and unpredictable. The assumptions
may be incomplete or inaccurate, and unanticipated events or circumstances may occur, for
which reason the actual results may deviate from the applied estimates, assessments, and
assumptions.
Impairment considerations due to the war in Ukraine and current macro environment
Impairment testing is undertaken at year-end unless indications of impairment occur during
the year. In Q3 2022 Management has revisited forecasts for all cash generating units
(CGUs) and concludes that no impairments nor reversals of prior year impairments are
necessary.
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Note 2 Segment Information
DKK m
Ferry
Division
Logistics
Division
Non-
allocated
Total
Q1-Q3 2022
External revenue
11,423
8,539
13
19,976
Intragroup revenue
1,001
52
468
1,520
Total revenue
12,424
8,591
481
21,496
Operating profit (EBITDA) before special items
3,110
787
-27
3,871
Operating profit (EBIT) before special items
1,741
357
-89
2,008
Operating profit after special items (EBIT)
1,755
359
-89
2,025
Invested capital, average
20,810
4,676
780
26,265
DKK m
Ferry
Division
Logistics
Division
Non-
allocated
Total
Q1-Q3 2021
External revenue
7,821
4,551
15
12,387
Intragroup revenue
762
63
382
1,207
Total revenue
8,583
4,614
397
13,594
Operating profit (EBITDA) before special items
2,112
382
2
2,496
Operating profit (EBIT) before special items
876
188
-59
1,004
Operating profit after special items (EBIT)
896
194
-56
1,034
Invested capital, average
20,419
2,094
299
22,813
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Note 3 Revenue
All material revenue is recognised when each separate obligation in the customer contract
is fulfilled following the "over-time principle". Most transports carried out by the Ferry
Division are characterised by short delivery time (most sailings are less than 30 hours while
sailings to/from Turkey are up to 72 hours). Transports carried out by Logistics Division can
take delivery over a longer period, but the impact is insignificant.
On board sales is recognised according to the “a point in time” principle and amount to DKK
982m (Q1-Q3 2021: DKK 266m).
Revenue includes revenue recognised from contracts with customers in accordance with
IFRS 15 and other revenue (leasing activities). Revenue from leasing activities amounts to
DKK 281m (Q1-Q3 2021: DKK 237m).
Q1-Q3 2022
DKK m
Ferry
Division
Logistics
Division
Non-
allocated
Total
Geographical markets
North Sea
4,250
-
0
4,250
Mediterranean
3,010
-
0
3,010
English Channel
3,032
-
0
3,032
Baltic Sea
1,131
-
0
1,131
Continent
-
3,398
0
3,398
Nordic
-
3,323
0
3,323
UK/Ireland
-
1,819
0
1,819
Other
0
0
13
13
Total
11,423
8,539
13
19,976
Product and services
Seafreight and shipping logistics solutions
7,894
20
0
7,913
Transport solutions
53
8,054
0
8,107
Passenger seafare and on board sales
2,353
0
0
2,353
Terminal services
697
4
0
702
Charters
248
0
0
248
Agency and other revenue
178
462
13
653
Total
11,423
8,539
13
19,976
Q1-Q3 2021
DKK m
Ferry
Division
Logistics
Division
Non-
allocated
Total
Geographical markets
North Sea
2,778
-
0
2,778
Mediterranean
2,139
-
0
2,139
English Channel
1,881
-
0
1,881
Baltic Sea
1,023
-
0
1,023
Continent
-
1,979
0
1,979
Nordic
-
1,377
0
1,377
UK/Ireland
-
1,194
0
1,194
Other
0
0
15
15
Total
7,821
4,551
15
12,387
Product and services
Seafreight and shipping logistics solutions
6,154
87
0
6,241
Transport solutions
17
4,416
0
4,433
Passenger seafare and on board sales
642
0
0
642
Terminal services
641
5
0
646
Charters
237
0
0
237
Agency and other revenue
130
42
15
187
Total
7,821
4,551
15
12,387
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Note 4 Special items
Note 5 Acquisition of enterprises and sale of activities
2022
ICT Logistics
On 15 September 2021 DFDS Group entered into an agreement to acquire 80.1% of the
shares in ICT Logistics Group. The acquisition was approved by Danish merger authorities on
13 January 2022 and the transaction was completed on 19 January 2022. The purchase
price for the acquired shares amounted to DKK 69m. Cash in the acquired company
amounted to DKK 33m. Consequently, the liquidity effect was DKK 35m.
The acquisition is made by DFDS A/S which already owned 19.9% of the shares in ICT
Logistics Group. In Q1 2022 the Group revalued the existing ownership share of 19.9% to
DKK 17m which has resulted in a gain of DKK 9m.
primeRail
On 10 May 2022 DFDS Group acquired 100% of the share capital of the German rail
forwarding company primeRail GmbH headquartered in Troisdorf, Germany. The purchase
price for the acquired shares amounted to DKK 37m. Cash in the acquired company
amounted to DKK 16m. Accordingly the liquidity effect was DKK 21m.
Lucey Transport Logistics
On 30 September 2022 DFDS Group acquired 100% of the share capital of the Irish logistics
service company Lucey Transport Logistics Ltd. The Group has per 30 September 2022
incorporated a preliminary opening balance. However, due to the acquisition date being 30
September 2022 DFDS Group has not had detailed access to data and consequently the
purchase price allocation is preliminary and will be subject to adjustments. A detailed fair
value overview will be presented in the Q4-2022 announcement.
2021
The purchase price allocation for HSF Group (acquired 14 September 2021) is finalised and
unchanged compared to 31 December 2021. For further details of the acquisition, refer to
the annual report for 2021.
Note 6 Fair value measurement of financial instruments
The table discloses fair value and carrying amount of financial instruments measured at fair
value in the balance sheet. Furthermore, categorisation of the valuation method according
to the fair value hierarchy is stated.
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 hierarchy in Q1-Q3 2022.
Techniques for calculating fair values
Derivatives
DFDS' usage of derivatives includes interest rate swaps, bunker swaps, forward exchange
contracts and currency swaps. The fair values on interest rate swaps have 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 a
wide spread of market interest rates. The fair value on forward exchange contracts are
based on interest curve calculations in DFDS' Treasury system. Calculations are based on a
spread of market interest rates in the various currencies. Calculation on bunker swaps are
based on quoted forward curve from various financial institutions.
2022
2021
DKK m
Q1-Q3
Q1-Q3
Acquisition and integration planning costs relating to HSF Logistics Group
0
-25
ICT value adjustment, etc.
2
0
Accounting gain on sale of Gothia Seaways
0
20
Reversal of restructuring cost
15
0
Reversal of accrued cost related to Jubilee shares
0
4
Accounting gain on sale of office and warehousing building in Belgium
0
31
Special items, net
17
30
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Note 6 continued
30 Sept. 2022
30 Sept. 2021
DKK m
Fair value
Carrying
amount
Fair value
Carrying
amount
Financial assets
Derivatives (Level 2)
386
386
84
84
Securities (Level 3)
2
2
10
10
Financial liabilities
Derivatives (Level 2)
21
21
99
99
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Note 7 Supplementary financial information on
the Parent Company
As a result of DFDS A/S' issuance of corporate bonds on the Oslo Stock Exchange there is a
requirement to provide certain supplementary financial information on the Parent Company.
The following financial information has been prepared using the same accounting policies as
for the Annual Report for 2021. DFDS has adopted all new, amended or revised accounting
standards and interpretations (IFRSs) endorsed by the EU effective for the accounting
period beginning on 1 January 2022. For further description reference is made to note 1
Accounting policies.
The Parent Company’s revenue increased by DKK 2,766m, equivalent to 46% compared to
Q1-Q3 2021. Operating profit before depreciation (EBITDA) and special items increased by
DKK 727m equivalent to 53% compared to Q1-Q3 2021.
Profit before tax increased by DKK 816m equivalent to 311% compared to Q1-Q3 2021.
The Parent Company’s net interest-bearing debt decreased by DKK 1,042m equivalent to
17% compared to 31 December 2021.
2022
2021
2021-22
2021
DKK m
Q1-Q3
Q1-Q3
LTM
Full year
Income statement
Revenue
8,812
6,046
11,016
8,250
Operating profit before depreciation (EBITDA) and special items
2,089
1,362
2,497
1,771
Operating profit (EBIT) before special items
944
99
923
77
Special items, net
50
-25
20
-55
Operating profit (EBIT)
995
73
943
22
Financial items, net
84
189
-21
85
Profit before tax
1,078
262
922
106
Profit for the period
1,084
277
938
131
Assets
Non-current intangible assets
440
409
-
423
Non-current tangible assets
6,815
5,541
-
6,088
Right-of-use assets
2,045
485
-
1,209
Investments in affiliated companies, associates and joint ventures
8,817
8,459
-
8,387
Non-current receivables from affiliated companies
62
51
-
47
Other non-current assets
282
55
-
70
Non-current assets
18,461
15,000
-
16,224
Current receivables from affiliated companies
939
647
-
712
Receivables from associates and joint ventures
22
24
-
23
Cash
637
984
-
475
Other current assets
1,520
1,274
-
1,195
Current assets
3,119
2,930
-
2,405
Total assets
21,580
17,930
-
18,629
Equity and liabilities
Equity
10,072
9,542
-
9,355
Non-current liabilities
4,460
2,026
-
3,193
Current liabilities to affiliated companies
1,757
2,095
-
2,072
Other current liabilities
5,291
4,267
-
4,010
Current liabilities
7,048
6,362
-
6,082
Total equity and liabilities
21,580
17,930
-
18,629
Equity ratio, %
46.7
53.2
-
50.2
Net interest-bearing debt
7,306
4,296
-
6,264
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Definitions
Operating profit before depreciation (EBITDA)
Profit before depreciation and impairment on non-current assets
Operating profit (EBIT)
Profit after depreciation and impairment on non-current intangible and tangible assets
Operating margin, %
Operating profit (EBIT) before special items
Revenue
× 100
Net operating profit after taxes (NOPAT)
Operating profit (EBIT) minus payable tax for the period adjusted for the tax effect of net finance cost
Invested capital
Non-current intangible and tangible assets plus net working capital (non-interest bearing current assets minus non-interest bearing current liabilities) minus
pension and jubilee liabilities and other provisions
Net Interest-bearing debt (NIBD)
Interest-bearing liabilities (excluding provision for pensions) minus interest-bearing assets minus cash and securities
LTM
Last twelve months
Return on invested capital (ROIC), %
Net operating profit after taxes (NOPAT)
Average invested capital
× 100
Adjusted free cash flow (FCFE)
Cash flow from operating activities excluding net interest received and paid minus cash flow from net investments and payment of lease liabilities and interest
Return on equity, %
Profit for the period excluding non-controlling interests
Average equity excluding non-controlling interests
× 100
Equity ratio, %
Equity at end of period
Total assets
× 100
Financial leverage, times
Net Interest-bearing debt (NIBD)
EBITDA LTM before special items incl. pro forma EBITDA for acquired companies
Earnings per share (EPS)
Profit for the period excluding non-controlling interests
Weighted average number of ordinary shares in circulation
Dividend per share
Dividend for the year
Number of shares at the end of the period
Market value
Number of shares, ex. treasury shares, end of period times share price end of period
Number of ships
Owned and chartered ships, including slot charter and vessel sharing agreements
Roundings may in general cause variances in sums and percentages in this report.
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ESG definitions
Total number of days operated
Total number of deployment days for vessels in operation
CO2 emissions per GT nautical mile (Own fleet)
Emissions measured as gCO2 per gross tonnage nautical mile for vessels in operation (Own fleet)
CO2 emissions per GT nautical mile (Route network)
Emissions measured as gCO2 per gross tonnage nautical mile for vessels in operation (Route network)
Total fuel consumption (Route network)
Total consumption of heavy fuel oil (HFO) and marine gas oil (MGO) for vessels in operation (Route network)
Spills (>1 barrel)
Incidents of oil spills larger than one barrel into the sea from vessels in operation
Total workforce
Percentage of women in total workforce
Non-office based
Percentage of women of total number of non-office based employees
Office based
Percentage of women of total number of office based employees
Senior management
Percentage of women of total number of senior management positions defined as EVPs and VPs
Managers
Percentage of women of total number of management positions, excluding senior management, defined as positions with responsibility for at least one other
employee
Employees
Percentage of women of total number of employees, excluding senior management and managers
Lost time injury frequency (LTIF), sea
Number of registered work-related accidents disabling a seafarer to work for more than 24 hours per one million exposure hours
Lost time injury frequency (LTIF), land
Number of registered work-related accidents disabling a land-based employee work for more than 24 hours per one million exposure hours
Colleagues
Number of fatalities among employees caused by work-related accidents
Contractors
Number of fatalities among third-party contractors caused by work-related accidents while operating for DFDS
Representation of women on Board of Directors (AGM
elected members)
Percentage of women of total number of members of the Board of Directors, excluding staff appointed members, elected at the Annual General Meeting
Board nationality – non-Danish (AGM elected
members)
Percentage of non-Danish members of total number of members of the Board of Directors elected at the Annual General Meeting
Independent directors (AGM elected members)
Percentage of independent directors of total number of members of the Board of Directors elected at the Annual General Meeting
Attendance at Board meetings (All Board members)
Percentage of total number of Board meetings attended (Not gender specific)
Whistle-blower reporting
Number of cases of whistle-blower reportings
2022
Management review
Ferry
Logistics
Reports
Financials
Contact
Q3 2022 interim report / p 33
CVR 14 19 47 11
www.dfds.com
17 November 2022
Company announcement no.: 31/2022
Contact
Torben Carlsen, CEO: +45 33 42 32 01
Karina Deacon, CFO: +45 33 42 33 42
Søren Brøndholt Nielsen, IR: +45 33 42 33 59
Nicole Seroff, Communications: +45 31 40 34 46
Disclaimer
The statements about the future in
this announcement contain risks and uncertainties
and actual developments may therefore diverge
significantly from the statements about the future.
About DFDS
DFDS provides ferry and transport services in and around
Europe, generating annual revenues of around DKK 25bn.
To over 10,000 freight customers, we deliver high
performance and superior reliability through ferry & port
terminal services and transport & logistics solutions.
For millions of passengers, we provide safe overnight and
short sea ferry services.
Our 11,000 employees are located on ferries, port
terminals, distribution centres, and in offices across more
than 20 countries. DFDS was founded in 1866, is
headquartered in Copenhagen, and listed on NASDAQ
Copenhagen.