DFDS — Regulatory Filings 2019

Jan 18, 2019

Company Announcement

RESTATEMENT OF 2018 ACCORDING TO IFRS ON LEASES

• IFRS 16 effective from 1 January 2019
• Pro forma unaudited restatement of Q1-3 2018 and Q3 LTM
• EBITDA for Q3 2018 LTM raised from DKK 2.9bn to DKK 3.5bn

DFDS 2018

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OFDS 2018
Company Announcement / p 2

IFRS 16 RESTATEMENT OF Q1-3 2018 AND Q3 LTM

Q3 2018 LTM**
DKK m	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
EBITDA*	2.874	584	3.458
EBIT*	1.845	54	1.899
Capital
NIBD	7.666	2.594	10.260
Invested capital, average, LTM	12.042	2.384	14.425
Key operating and return ratios
EBITDA-margin, %	18,8	3,8	22,7
ROIC, %, LTM	14,8	-2,1	12,7
Key capital ratios
Equity ratio, %	39,4	-4,6	34,8
NIBD/EBITDA, LTM	2,7	0,3	3,0

Before special items
*Last twelve months

With effect from 1 January 2019, DFDS will implement the new IFRS accounting standard on leases requiring all lease contracts, including operating leases, to be recognised in the balance sheet. For DFDS, this entails that operating leases for port terminals, ships, land and buildings, cargo carrying equipment and other assets will be recognised in the balance sheet while lease payments for such assets are converted from operating costs to depreciations and interest costs. Port terminals and ships comprise 66% and 22% of the balance sheet change, respectively.

To provide comparison figures for 2019, a pro forma unaudited restatement of the first three quarters of 2018 and Q3 2018 LTM for the DFDS Group, divisions and business units is enclosed in this announcement.

Impact on income statement and capital

In the restatement for Q3 2018 LTM, EBITDA before special items is raised by DKK 584m to DKK 3,458m from DKK 2,874m.

For the same period, depreciation is raised by DKK 530m and EBIT before special items is thus raised by DKK 54m to DKK 1,899m. The increase in EBIT is offset by a cost increase in Financial items, net leaving profit before tax unchanged.

Total assets are raised by DKK 2.4bn to DKK 15.6bn, primarily due to recognition of port terminal and ship leases. Invested capital is likewise raised by DKK 2.4bn to DKK 18.8bn at the end of Q3 2018 and net interest-bearing debt is raised DKK 2.6bn to DKK 10.3bn.

Impact on ROIC and capital structure

ROIC before special items is lowered by 2.1 ppt to 12.7% for Q3 2018 LTM. Financial leverage, as measured by the ratio of NIBD to EBITDA, is raised to 3.0 from 2.7 at the end of Q3 2018. On a pro forma basis, including U. N. RoRo's EBITDA for the last twelve months, NIBD/EBITDA is raised to 2.6. The equity ratio is lowered from 39% to 35%.

Q4 2018 and outlook 2019

Q4 2018 and full-year 2018 will also be restated according to IFRS 16 as part of the Q4 2018 report for release on 7 February 2019. EBITDA and other outlook items for 2019, included in the Q4 2018 report, will be based on IFRS 16.

Implementation option

DFDS will implement IFRS 16 in accordance with the modified retrospective approach requiring no restatement of comparison figures.

However, in order to provide one year of comparison figures, the pro forma unaudited restatement of key financial information for the period 1 January 2018 – 30 September 2018 included in this announcement has been prepared. The pro forma unaudited restatement presents the impact of IFRS 16 with effect from 1 October 2017.

17 January 2019
Contact details on page 7.

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DFDS 2018

Company Announcement / p 3

DFDS Group

	Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
Operating profit before depreciation (EBITDR) and special items	453	144	597	802	146	948	1.045	151	1.197	2.874	584	3.458
• Shipping Division	388	112	500	715	114	829	982	117	1.099	2.617	453	3.070
• Logistics Division	81	23	105	91	24	116	78	26	103	326	96	422
• Non-allocated items	-15	8	-8	-4	8	4	-16	9	-6	-69	35	-34
Operating profit (EBIT) before special items	216	13	229	533	14	547	747	14	762	1.845	54	1.899
Financial items, net	-12	-13	-25	-39	-14	-53	-126	-14	-140	-180	-54	-234
Profit before tax	177	0	177	431	0	431	625	0	625	1.546	0	1.546
Profit for the period	157	1	158	407	0	407	602	0	602	1.462	0	1.462
Balance sheet items impacted by IFRS 16
Land and buildings	164	170	334	161	153	314	160	136	296
Terminals	475	1.407	1.882	733	1.608	2.342	723	1.600	2.323
Ships	7.425	676	8.101	10.598	608	11.205	10.498	539	11.036
Equipment, etc.	695	131	826	739	141	881	713	134	847
Deferred tax asset	65	29	94	69	29	97	68	29	98
Interest-bearing liabilities, non-current	2.974	1.998	4.972	8.438	2.109	10.547	8.417	2.020	10.437
Interest-bearing liabilities, current	235	572	807	1.012	586	1.598	850	574	1.424
Capital
Total assets	13.164	2.413	15.577	21.454	2.539	23.993	21.805	2.438	24.243
Equity	6.399	-156	6.243	7.935	-156	7.779	8.583	-156	8.427
Net interest-bearing debt	2.630	2.569	5.199	8.256	2.695	10.951	7.666	2.594	10.260
Invested capital, end of period	9.165	2.384	11.549	16.327	2.510	18.838	16.389	2.409	18.798
Invested capital, average, LTM	9.170	2.323	11.493	10.599	2.363	12.963	12.042	2.384	14.425
Key operating and return ratios
EBITDR-margin, %	13,0	4,1	17,1	20,6	3,8	24,4	23,8	3,5	27,3	18,8	3,8	22,7
Return on invested capital (RDIC) before special items, %, LTM	19,3	-3,5	15,8	16,9	-2,7	14,2				14,8	-2,1	12,7
Key capital ratios
Equity ratio, %	48,6	-8,5	40,1	37,0	-4,6	32,4	39,4	-4,6	34,8
Net interest-bearing debt/EBITDR, LTM, (times)	1,0	0,6	1,6	2,9	0,3	3,2				2,7	0,3	3,0

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DFDS 2018

Company Announcement / p 4

Divisions

Shipping Division

	Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
EBITOR before special items	388	112	500	715	114	829	982	117	1,099	2,617	453	3,070
EBIT before special items	194	12	206	488	12	500	729	13	742	1,754	48	1,802
Capital
Invested capital, average LTM	8,262	1,999	10,261	9,658	2,044	11,702	11,049	2,073	13,122
Key operating and return ratios
EBIT margin before special items, %, quarterly	8,4	0,5	9,0	17,9	0,5	18,3	22,2	0,4	22,6	16,4	0,5	16,9
ROIC before special items, %, LTM	20,8	-3,6	17,2	17,9	-2,7	15,2				15,6	-2,1	13,5

Logistics Division

	Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
EBITOR before special items	81	23	105	91	24	116	78	26	103	326	96	422
EBIT before special items	48	1	49	60	1	61	47	1	48	205	3	209
Capital
Invested capital, average LTM	1,155	228	1,382	1,167	226	1,393	1,181	221	1,402
Key operating and return ratios
EBIT margin before special items, %, quarterly	3,5	0,1	3,5	4,5	0,1	4,6	3,7	0,1	3,7	3,9	0,1	3,9
ROIC before special items, %, LTM	14,5	-2,2	12,4	14,9	-2,2	12,7				14,5	-2,1	12,4

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OFDS 2018

Company Announcement / p 5

Shipping Division business units

	Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
North Sea
EBIT before special items	150	11	161	186	11	198	140	11	151	642	45	688
Invested capital, end of period	3.967	1.894	5.861	3.808	1.814	5.623	3.754	1.761	5.514	3.942	1.807	5.749
ROIC before special items, %, LTM	16,0	-4,1	11,9	16,5	-4,4	12,2				16,0	-4,3	11,8
Baltic Sea
EBIT before special items	70	1	70	104	1	104	111	1	111	368	2	370
Invested capital, end of period	1.218	140	1.358	1.234	125	1.359	1.103	108	1.211	1.179	137	1.316
ROIC before special items, %, LTM	31,5	-3,4	28,1	31,4	-3,3	28,1				31,5	-3,1	28,4
Channel
EBIT before special items	25	0	25	80	0	80	221	0	222	399	0	399
Invested capital, end of period	2.025	14	2.039	1.872	12	1.884	1.777	10	1.786	1.892	14	1.906
ROIC before special items, %, LTM	19,4	-0,1	19,3	19,7	-0,1	19,6				20,0	-0,1	19,8
Mediterranean
EBIT before special items	3	0	3	29	0	29	66	1	67	101	1	102
Invested capital, end of period	122	1	123	7.204	232	7.436	7.239	229	7.468	2.961	93	3.054
ROIC before special items, %, LTM	9,1	0,0	9,0	2,2	0,0	2,1				3,4	-0,1	3,3
Passenger
EBIT before special items	-80	0	-80	57	0	57	164	0	164	112	1	112
Invested capital, end of period	562	23	585	479	22	501	650	20	671	626	22	647
ROIC before special items, %, LTM	23,8	-0,7	23,1	20,2	-0,6	19,6				17,5	-0,5	17,0
Non-allocated items
EBIT before special items	27	0	27	33	0	33	26	0	26	133	0	133

*The EBIT before special items of the business units has been adjusted since the Q3 2018 report due to changes in the allocation of vessel pool items among the business units. The primary changes are an increase in EBIT of DKK 21m for the Channel business unit and a decrease in EBIT of DKK 12m for the North Sea business unit, both amounts accumulated for Q1-3 2018.

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OFDS 2018

Company Announcement / p 6

Logistics Division business units

	Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	Rs Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Nordic
EBIT before special items	26	0	26	26	0	27	15	0	15	89	2	91
Invested capital, end of period	362	124	486	306	115	421	299	103	402	350	123	473
ROIC before special items, %, LTM	21,3	-5,3	16,0	23,8	-5,9	18,0				23,2	-5,6	17,6
Continent
EBIT before special items	18	0	18	22	0	22	18	0	19	80	0	80
Invested capital, end of period	513	54	567	521	51	572	528	46	574	455	50	505
ROIC before special items, %, LTM	15,5	-1,7	13,8	14,4	-1,5	13,0				13,2	-1,2	12,0
UK & Ireland
EBIT before special items	4	0	4	13	0	13	14	0	14	37	1	38
Invested capital, end of period	387	44	431	357	56	413	373	56	429	376	48	424
ROIC before special items, %, LTM	7,5	-0,6	6,9	7,3	-0,6	6,6				8,2	-0,8	7,4
Non-allocated items
EBIT before special items	0	0	0	0	0	0	0	0	0	0	0	0

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DFDS 2018

Contact

Company Announcement / p 7

DFDS A/S
Sundkrogsgade 11, DK-2100 Copenhagen Ø
CVR 14 19 47 11
www.dfds.com

17 January 2019
Company announcement no.: 1/2019

Contact
Torben Carlsen, CFO: +45 33 42 32 01
Søren Brøndholt Nielsen, IR: +45 33 42 33 59

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.

Roundings may in general cause variances in sums and
percentages in the tables in this announcement.

About DFDS
DFDS provides ferry and transport services in Europe and
Turkey, generating annual revenues of EUR 2.2bn.

To over 10,000 freight customers, we deliver high
performance and superior reliability through ferry & port
terminal services, and transport & logistics solutions.

For more than five million passengers, we provide safe
overnight and short sea ferry services.

Our 8,000 employees are located on ferries and in offices
across 20 countries. DFDS was founded in 1866, is
headquartered in Copenhagen, and listed on NASDAQ
Copenhagen.