Outlook 2024 (updated 1 November 2024)

• EBIT of DKK 1.5-1.7bn
• Revenue growth of 8-10%
• Adjusted free cash flow of around DKK 1.2bn

CEO’s comments

Q3 was as expected a challenging quarter. The European slowdown in demand and manufacturing that began in Q2 became more widespread in Q3. Instead of a rebound in Q4, we are now expecting a further slowdown in the rest of the year.

Despite the market headwinds, we continued in line with our organic growth ambitions to protect and grow volumes in Q3 on the back of our network strength. This did not, however, translate into earnings growth as price and margin pressures were intensified through our exposure to the automotive sector, the Baltic region and eastern Europe, and the new Brexit border checks that are holding back food exports to the UK.

Our Q3 result was therefore lower than expected and following our revised view on Q4 market demand, the 2024 earnings outlook range was lowered.

We remain committed to moving our green transition forward even though this entails extra costs in the short-term. Strengthening customer service and operating efficiency through standardisation and digitisation are also strategic priorities.

Ferry increased volumes in tough market

Our freight ferry network achieved 4% organic growth in Q3 which was overall in line with our expectations. Pricing continued however to be impacted by overcapacity in some network regions. The organic passenger volume growth was 2%, and we’re pleased to report that our new route network across Strait of Gibraltar had a successful high season.

Logistics challenged by market slowdown

A large part of the Logistics’ network continued in Q3 to perform on level with 2023, especially the UK/Ireland network. Earnings pressures did however increase further in Q3, not least in full-load (FTL) markets, and this is expected to continue in Q4. A set of specific actions are being taken to mitigate headwind impacts and improve earnings. The Nordic Cold Chain turnaround is in addition still expected to be completed by year-end.

Capital distribution

We continue to return excess capital to shareholders. Our share buyback program has year-to-date returned DKK 380m to shareholders besides the dividend of DKK 168m.

Outlook 2024

The EBIT outlook range is narrowed and lowered following a Q3 result below expectations and a weaker market outlook for Q4. The adjusted free cash flow outlook is changed to around DKK 1.2bn from previously DKK 1.5bn.

Full report here https://www.dfds.com/en/about/investors/reports-and-presentations/q3-report-2024

October volumes:

Ferry – freight: Total volumes in October 2024 were 10.3% above 2023 and up 5.6% adjusted for the addition of Strait of Gibraltar routes in 2024 and closure of the Calais-Tilbury route in 2023.

North Sea, Channel, and Baltic Sea volumes were all above 2023 following solid growth on most routes. Mediterranean volumes were in October also above 2023.

For the last twelve months 2024-23, the total transported freight lane metres increased 6.7% to 41.0m from 38.5m in 2023-22. The increase was 3.4% adjusted for the addition of Strait of Gibraltar routes and the Calais-Tilbury route closure.

Ferry – passenger: The number of passengers in October 2024 was 33.0% above 2023 and down 1.3% adjusted for the addition of the Strait of Gibraltar routes. The adjusted decrease was due to smaller variances across routes. The number of cars was 16.0% above 2023 and down 10.9% adjusted for Strait of Gibraltar.

For the last twelve months 2024-23, the total number of passengers increased 45.9% to 6.5m compared to 4.5m for 2023-22. The increase was 6.1% adjusted for Strait of Gibraltar.

© Shippax