DFDS — Report Publication Announcement 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

2018

IFRS 16 RESTATEMENT OF Q1-3 2018 AND Q3 LTM

		Q3 2018 LTM**
		Pro forma	Pro forma
		unaudited	unaudited
	As	IFRS 16	IFRS 16
DKK m	Reported	adjustment	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 re
turn 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 recog-

17 January 2019 Contact details on page 7. nised 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. Ro-Ro's EBITDA for the last twelve months, NIBD/EBITDA is raised to 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.

DFDS Group

		Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
Operating profit before depreciation (EBITDA) 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 Interest-bearing liabilities, current	2.974 235	1.998 572	4.972 807	8.438 1.012	2.109 586	10.547 1.598	8.417 850	2.020 574	10.437 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
EBITDA-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 (ROIC) 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/EBITDA, LTM, (times)	1,0	0,6	1,6	2,9	0,3	3,2				2,7	0,3	3,0

Divisions

Shipping Division

		Q1 2018			Q2 2018			Q3 2018			Q3 2018 LTM
DKK m	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
EBITDA 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	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated	As Reported	Pro forma unaudited IFRS 16 adjustment	Pro forma unaudited IFRS 16 restated
Income statement
EBITDA 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

Shipping Division business units

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

Logistics Division business units

		Q1 2018			Q2 2018			Q3 2018
		Pro forma unaudited	Pro forma unaudited		Pro forma unaudited	Pro forma unaudited		Pro forma unaudited	Pro forma unaudited		Pro forma unaudited	Pro forma unaudited
DKK m	As Reported	IFRS 16 adjustment	IFRS 16 restated	As Reported	IFRS 16 adjustment	IFRS 16 restated	As Reported	IFRS 16 adjustment	IFRS 16 restated	As Reported	IFRS 16 adjustment	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

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.