Annual Report 2021
DFDS A/S - Marmorvej 18, DK-2100 Copenhagen Ø - CVR 14 19 47 11
We target a female gender ratio of 30%. Our new
colleague from HSF is one of our many talented women.
We provide
Freight and passenger
routes plus port &
rail services
Freight forwarding
and contract logistics
Logistics
solutions
Ferry
services
2
DFDS Annual Report 2021
Introduction
We move for
all to grow
By moving freight and passengers reliably
and efficiently, we provide vital services for
trade and travel in and around Europe
Sustainable trade and travel
is our future
We care about people – the safety
and wellbeing of our passengers and
colleagues as well as a culture of
diversity and inclusion
We grow by partnering and innovating
with our customers
Our purpose
3
DFDS Annual Report 2021
Introduction
Click for more information about
our ferry and logistics networks
We keep Europe
and Turkey
moving by sea,
road and rail
17
Freight ferry routes
9
Freight and passenger
ferry routes
+60
logistics locations
Our ferry network Our logistics network
4
DFDS Annual Report 2021
Introduction
Introduction
Hydrogen
Hydrogen
Ammonia
Ammonia fuel
Electricity
Ammonia
plant
Supermarket
Green
fertiliser
Electrolysis
4321
Meat processing
Dairy production
Bunker boat
Animal farm
Distribution
center
Animal feed
production
Green transport corridors
of tomorrow
The transition from fossil to sustainable fuels to create
green transport corridors has begun. The Denmark-UK
corridor could be our first green corridor driven by customer
demand and fuel availability. Our goal is to provide
emission-free ferry and logistics services for products
– for example butter and meat – destined for consumers
in the UK. In partnership with our stakeholders, we are
working on overcoming the challenges of a green corridor.
Read more by clicking on the four topics below.
Fuel type Green ferries & trucks Fuel availability Biodiversity
5
DFDS Annual Report 2021
Claus V. Hemmingsen
Chair of Board of Directors
Setting
a new course
While continuing to provide reliable and
efficient services to customers
A new era is in the making as the climate changes and
social elements of the ESG (Environment Social Governance)
agenda move corporate citizenship to the top of our strategic
agenda as an integral part of our business strategy.
How we contribute to society and to the collective good
has become a focus point in our actions and in our dialogue
with stakeholders.
The EU’s taxonomy for sustainable activities marks a clear
political signal to invest money and efforts in becoming
a green company. Customers are looking for ways to make
supply chains and passenger travel sustainable. Many
investors now focus on ESG results as much as on financial
results, and young generations want to work for companies
with green and inclusive agendas.
We welcome this new reality, while acknowledging the
magnitude of the transformation DFDS is embarking on to
become a truly green and inclusive company.
Joint letter from the Chair and CEO
Torben Carlsen
President & CEO
DFDS Annual Report 2021
Introduction6
Reinvention and new solutions are called for
A freight ferry loaded with goods weighs around 80,000
tons. No batteries are today durable enough to move such
a ferry across the North Sea. Sustainable fuels such as
methanol, hydrogen, or ammonia can do the job but first
the supporting infrastructure, which we today take for
granted, must be transformed. This will inevitably take
many years.
The good thing is that the roadmap to sustainability is
becoming clearer. It is also clear that we must partner with
suppliers and customers to reinvent business processes
and develop new ways of working together.
One of the tasks in the roadmap is the production of
sustainable fuels in the quantities required to facilitate
trade and passenger travel. Sustainable fuel technologies
still need to mature, and buyers of sustainable fuels, such
as DFDS, have yet to make final decisions on fuel types. To
do our part to kick-start the sustainable fuel sector, we are
taking an active role and are partnering up with potential
fuel providers. This will include making firm commitments
to buy sustainable fuel when it becomes available.
Furthermore, we are engaging with customers to assess
where the demand for – and the impact of – sustainable
solutions is greatest and how cost impacts can be shared
or mitigated.
Caring employer
Expectations concerning the way we treat each other at
work and outside work are evolving.
The Covid-19 pandemic and supply chain bottlenecks have
reaffirmed the significance of our colleagues’ knowledge and
expertise as well as their ability to solve problems as they arise.
Diversity, inclusion, sexual and other forms of harassment, equal
pay and opportunities, are human rights issues that we as a
corporate citizen are acting on and must be held accountable
for. The well-being of employees is our responsibility.
Our Caring Employer strategy and activities are focused
on these fundamental issues and we aremaking progress
in this respect.
Business performance and strategy
We maintain a relentless focus on business development and
financial performance. In 2021, EBITDA increased 25% to
DKK 3.4bn before special items and a total dividend of DKK
8.00 per share is planned for payment in 2022. We expect
to continue to grow earnings in 2022 with an outlook range
for EBITDA of DKK 3.9-4.4bn before special items.
Our freight ferry and logistics activities performed above
the initial outlook during 2021. A highlight of the year was
the improved performance of the Mediterranean business
unit. Passenger earnings remained on level with 2020 as
Covid-19 continued to disrupt passenger travel markets.
Global supply chain bottlenecks spread to intra-European
freight flows in 2021, especially freight flows linked to the
UK. We adapted to the market change, but the sudden cost
volatility introduced to our markets after decades of cost
stability did initially impact margins negatively.
Growth is a key part of our strategy. We opened new
ferry routes in 2021 and we introduced duty-free sales;
we expanded our customs services, and we scaled up
our cold chain logistics offering significantly through
the acquisition of HSF Logistics Group. In addition, we
continuously strive to provide more and better services
for our customers.
We expect to continue to grow our freight activities both
organically and by acquisitions in the coming years. Our
passenger travel activities are expected to begin their
recovery to former strength in 2022 as Covid-19 subsides,
with full impact expected in 2023.
Moving ahead in 2022
To reflect how business and ESG are melting together in
our decision-making and strategic ambitions, our 2021
annual report for the first time integrates financial and
ESG reporting.
The annual report features as an example a ‘green transport
corridor’ to show that real changes are achievable in the
not too distant future if we all join forces.
We look forward to moving ahead on sustainability, diversity
& inclusion, as well as business performance in 2022.
We end this letter with a heartfelt thank you to all our
colleagues in DFDS for your hard work and contributions
in a 2021 that turned out to be another challenging year.
We also thank all our external stakeholders, not least our
customers, for your collaboration and support in 2021.
The good thing is
that the roadmap
to sustainability is
becoming clearer.
7
DFDS Annual Report 2021
Management review
About this report This report constitutes DFDS’ Communication on Progress to the UN Global Compact. The consolidated ESG
statement covers the DFDS Group’s ESG approach and activities for the financial year 1 January to 31 December 2021. With this
section we fulfil the requirements of Sections 99a, 99b, 99d and 107d of the Danish Financial Statements Act Taxonomy.
Management review Management review
(continued)
Financial statements
10 Key results 2021
11 Key figures - financials & ESG
13 Business review
18 Strategy
20 Business model
23 Outlook
Divisions
27 Ferry Division
38 Logistics Division
46 People
Results
50 Financial review
57 ESG review
Corporate governance
60 Governance practices
64 Risks and risk management
68 Shareholders
71 Board of Directors
73 Executive Management Team
74 Remuneration Report summary
Consolidated financials
77 Income statement
78 Statement of comprehensive income
79 Balance sheet
80 Statement of changes in equity
82 Statement of cash flows
83 Notes
Parent company financials
131 Income statement
132 Statement of comprehensive income
133 Balance sheet
134 Statement of changes in equity
136 Statement of cash flows
137 Notes
Reports
155 Management statement
156 Independent Auditors Reports
Consolidated ESG statements
159 Consolidated ESG statements
160 EU sustainable taxonomy
161 Environment
165 Social
169 Governance
Other
172 Fleet list
174 Glossary
175 Definitions
177 DFDS' history
8
DFDS Annual Report 2021
Content
Management
review
10 Key results 2021
11 Key figures - financials & ESG
13 Business review
18 Strategy
20 Business model
23 Outlook
9
DFDS Annual Report 2021
Management review
Main ESG eventsKey results 2021
Revenue per division
(DKK bn)
Logistics
0 5 10 15 20
Ferry
2019
2020
2021
CO2 emissions own fleet
(per GT mile)
2019
2020
2021
0 3 6 9 12 15
EBITDA per division
(DKK bn)
Logistics
Non-allocated
items
Ferry
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
-0.5
2019 2020 2021
Female gender ratio of total workforce
(%)
0
5
10
15
20
25
2019 2020 2021
10
DFDS Annual Report 2021
Management review
DKK m
2021
1)
EUR m 2021 2020 2019 2018
2)
2017
2)
Income statement
Revenue 2,403 17,869 13,971 16,592 15,717 14,328
Ferry Division
3)
1,587 11,806 9,445 12,197 11,117 9,892
Logistics Division
3)
962 7,155 5,301 5,116 5,324 5,160
Non-allocated items and eliminations
3)
-147 -1,092 -776 -722 -724 -724
Operating profit before depreciations (EBITDA) and
special items
4)
459 3,411 2,732 3,633 2,988 2,702
Ferry Division
3)
383 2,852 2,315 3,254 2,713 2,513
Logistics Division
3)
80 593 462 421 330 263
Non-allocated items -5 -35 -45 -42 -55 -74
Profit on disposal of non-current assets, net 0 2 5 6 7 7
Operating profit (EBIT) before special items
4)
177 1,313 858 1,751 1,909 1,782
Special items, net 5 34 -117 -101 -49 -41
Operating profit (EBIT)
4)
181 1,348 741 1,650 1,859 1,741
Financial items, net -37 -278 -275 -278 -165 -55
Profit before tax 144 1,069 466 1,371 1,694 1,686
Profit for the year 131 976 442 1,313 1,637 1,618
Profit for the year excluding
non-controling interest 129 958 433 1,309 1,630 1,617
Capital
Total assets 4,131 30,721 27,006 26,863 22,132 13,308
DFDS A/S’ share of equity 1,539 11,446 10,511 10,276 9,175 6,565
Equity 1,554 11,554 10,600 10,356 9,255 6,614
Net-interest-bearing debt 1,813 13,481 11,361 11,954 8,513 2,352
Invested capital, end of period 3,411 25,369 22,121 22,476 17,908 9,099
Invested capital, average 3,136 23,324 22,500 20,927 13,778 9,178
DKK m
2021
1)
EUR m 2021 2020 2019 2018
2)
2017
2)
Cash flows
Cash flows from operating activities, before
financial items and after tax 468 3,484 2,772 3,258 2,516 2,666
Cash flows from investing activities -432 -3,210 -1,618 -2,651 -4,802 -1,564
- Acquistion of enterprises and activities -237 -1,765 -14 -131 -3,635 0
- Other investments, net -194 -1,444 -1,603 -2,519 -1,167 -1,564
Free cash flow (FCFF) 37 274 1,155 607 -2,286 1,102
Repayment of lease liabilities and lease interest -125 -929 -679 -785 - -
Adjusted free cash flow -88 -655 475 -178 -2,286 1,102
Key operating and return ratios
Average number of employees (FTE) 8,874 8,213 8,367 7,791 7,235
Number of ships 80 70 70 70 64
Revenue growth, % 27.9 -15.8 5.6 9.7 3.9
EBITDA margin, % 19.1 19.6 21.9 19.0 18.9
Operating margin, % 7.3 6.1 10.6 12.1 12.4
Revenue/invested capital average, (times) 0.8 0.6 0.8 1.1 1.6
Return on invested capital (ROIC), % 5.3 3.0 7.6 13.1 18.6
ROIC before special items, % 5.2 3.5 8.1 13.5 19.0
Return on equity, % 8.7 4.2 13.5 20.7 24.5
Key capital and per share ratios
Equity ratio, % 37.6 39.3 38.6 41.8 49.7
Net-interest-bearing debt/EBITDA, times
5)
3.7 4.2 3.3 2.8 0.9
Earnings per share (EPS), DKK 16.7 7.6 22.9 29.0 29.1
Dividend paid per share, DKK 0.0 0.0 4.0 4.0 10.0
Number of shares, end of period , ’000 58,632 58,632 58,632 58,632 57,000
Weighted average number of circulating shares,
’
000
57,416 57,310 57,196 56,204 55,594
Share price, DKK 349.0 275.2 325.0 262.2 331.3
Market value, DKK m 20,018 15,790 18,593 14,990 18,106
1
Applied exchange rate for Euro
as of 31 December 2021: 7.4370
(Average) and 7.4365 (End).
2
2017-18 comparative numbers
are not restated to IFRS 16.
3
North Sea port logistics
activities have been transferred
from the Ferry Division to the
Logistics Division per 1 January
2021. 2020 comparative figures
have been restated accordingly.
whereas 2017-2019 compara
-
tive numbers are not restated.
4
Reference is made to “Definitions”
on page 175
5
The ratio for 2021 includes a pro
forma EBITDA for the last twelve
month for HSF Logistics Group.
Key figures
11
DFDS Annual Report 2021
Management review
ESG overview
Environmental data* Unit 2021 2020 2019 2018
Total number of days operated Days 23,197 18,774 20,460 18,937
Capital
CO2 emissions per GT mile (Own fleet) gCO1 13.0 13.4 13.9 -
CO2 emissions per GT mile (Route network) gCO2 13.6 13.5 14.1 14.4
Energy consumption
Total fuel consumption Tonnes HFOe 771,738 619,867 699,115 654,795
Fuel consumption per GT-nautical mile
(Route network) g/GT/Nm 4.4 4.3 4.4 4.5
Oil spills
Spills (>1 barrel) Number 0 1 0 0
* All ESG data is excluding the
newly acquired HSF Logistics
Group.
Social data* Unit 2021 2020 2019 2018
Average number of employees (FTE) FTE 8,328 8,213 8,367 7,791
Representation of women
Total workforce % 24 23 25 23
- At sea % 17 15 18 15
- On land % 29 27 29 29
Senior management % 17 16 19 10
Managers % 14 13 18 -
Employees % 27 26 26 -
Safety at sea
Lost-time injury frequency (LTIF)
Incidents/
mill. hours 4.3 4.1 4.5 5.5
Safety on land
Lost-time injury frequency (LTIF)
Incidents/
mill. hours 7.4 5.9 6.7 3.8
Fatalities
Colleagues Fatalities 1 0 0 0
Contractors Fatalities 0 2 1 1
Governance data Unit 2021 2020 2019 2018
Representation of women in the Board % 33 33 33 33
Attendance at Board meetings
(all board members) % 100 96 94 91
12
DFDS Annual Report 2021
Management review
2
Business review
Freight earnings growth and increasing
sustainability focus
We grew freight earnings, broadened the scope of our freight
offering to customers, and made important progress on
sustainability in 2021.
The growth in freight earnings was to a large extent
achieved in the first half-year as Covid-19 lockdowns
reduced earnings considerably in the first half-year of 2020.
In the second half of 2021, freight earnings growth was
lowered by cost increases due to supply chain bottlenecks
that peaked in Q3.
In addition, Mediterranean business unit earnings increased
considerably as capacity was expanded to carry higher
volumes between Turkey and the EU as trade was boosted
by depreciation of the Turkish Lira (TRY).
Passenger earnings remained on level with 2020 as travel
restrictions were in place for most of the year. Passenger
earnings are thus still reduced by approximately DKK 1bn
compared to 2019.
Three new freight ferry routes were opened in 2021,
facilitating trade between Ireland and France/the Continent
(EU), Turkey and Spain, as well as the UK and France.
We also significantly expanded our cold chain logistics
offering through the acquisition of the HSF Logistics Group.
A new ESG (Environment, Social, Governance) management
framework was established in 2021 to move our
sustainability and diversity & inclusion agendas forward.
The announcement of an ambition to deploy a green ferry
by 2025 marks the start of a journey to de-carbonise our
ferry operations. By ordering of 125 e-trucks for delivery
later in 2022 and in 2023, we also embarked on a similar
journey to de-carbonise our logistics solutions.
A key challenge of the de-carbonisation journeys is the
availability of sufficient green electricity for sustainable
fuel production in the quantities required. We are already
engaging in partnerships and open innovation projects with
our stakeholders to overcome the many challenges of de-
carbonisation.
Also in 2021, customer service was maintained at a
satisfactory level despite Covid-19, Brexit, and supply chain
bottlenecks. This was accomplished by a great effort by the
people of DFDS across the ferry and logistics networks.
Impacts from external macro events in 2021
In 2021, our markets and results were impacted by several
external macro events:
Brexit: The new trade agreement between the UK and the
EU came into effect from the beginning of 2021. The new
rules and processes initially led to a slowdown in trade due
to transport equipment shortages as turnaround times for
equipment increased. Freight volumes recovered from
around March. A combination of Covid-19 and fewer EU
truck drivers in the UK led to truck driver shortages and port
congestion in Q3. The supply chain bottlenecks eased
somewhat in Q4.
Brexit also led to a rerouting of trade flows, particularly
between Ireland and continental Europe as flows moved
away from the UK land-bridge. Duty-free sales and customs
clearance services were introduced from the start of the
year in line with the new trade agreement.
Trade volumes between the UK and the EU dropped to
below 2019-levels in 2021. It remains to be seen if volumes
recover to recent historical levels when Covid-19 and
supply chain bottlenecks subside.
Covid-19 and normalisation of passenger volumes: Travel
restrictions were upheld through most of 2021 as new
waves of the pandemic occurred. The primary effect of
Covid-19 was thus to reduce activity on ferry travel
markets to mostly essential travel as well as periods with
layup of ferries.
Most ferry passengers on our routes are Europeans, except
for the Oslo-Frederikshavn-Copenhagen route that had
around 125,000 overseas passengers in 2019. Overseas
passengers did not return in 2021 and are not anticipated to
return in larger numbers in 2022. Covid-19’s impact on
passenger numbers on our Baltic routes has been limited as
a high share of the passengers are migrant workers. It
remains to be seen whether historic travel patterns will
change once travel restrictions are lifted.
Covid-19 also contributed to the global supply chain
bottlenecks that developed through the year as the growth
in demand for consumer goods exceeded transport capacity
as the latter was reduced by staff shortages caused by the
pandemic.
"The announcement
of an ambition to
deploy a green ferry
by 2025 marks the
start of a journey to
de-carbonise our
ferry operations."
13
DFDS Annual Report 2021
Management review
3
Supply chain bottlenecks and pricing: Intra-European
supply chains started to develop widespread bottlenecks in
Q3 driven by rising demand for consumer goods on the one
hand, and on the other hand restricted supply side transport
capacity due to Covid-19 and Brexit. This led to significant
price increases in some carrier markets, for example in
haulage and global container transport. Freight ferry ports
also congested as customers were not able to pick up their
trailers due to truck driver and equipment shortages.
The freight capacity of our ferry route network was through
2021 sufficient to handle market volumes and pricing was
therefore not immediately impacted. However, in the second
half of 2021, wages, spare parts, and other costs for ferry
and port operations increased due to the supply chain
bottlenecks. Such cost increases are reflected in pricing for
2022.
Most of DFDS’ logistics solutions are based on longer
contracts, as opposed to spot, and due to the speed of
carrier cost increases and inadequate cost compensation
terms in contracts, gaps developed between pricing and
solution costs through 2021. Many contracts have been
renegotiated and flexible cost compensation terms have
been added to counter cost volatility.
Depreciation of TRY and Turkish export growth: During
2019, a further step was taken to significantly reduce the
currency risk related to Turkish Lira (TRY) of our
Mediterranean business unit as the invoicing currency was
changed from TRY to EUR. This aligned the pricing and
invoicing currencies.
Mediterranean’s currency risk is therefore mainly related to
the impact of changes in TRY on trade between Turkey and
the EU. The depreciation of TRY versus EUR boosted Turkish
exports to Europe in 2021 and continued export growth is
expected in 2022. The current imbalance between export
and import volumes in our route network are around 10%
as export growth exceeds import growth.
The depreciation of TRY and the subsequent high inflation in
Turkey is currently depressing domestic demand. A large
part of the freight volumes carried in our Mediterranean
route network is however not linked to domestic demand,
but rather to manufacturing in Turkey that uses imported
semi-finished goods from Europe in the assembly of finished
goods that are exported to Europe.
Longer term, we expect Turkey will benefit from nearshoring
of manufacturing from overseas regions as companies
already in 2021 started to take measures to reduce supply
chain disruption risks.
Key financial results of 2021
On this background, revenue for 2021 increased 28% to
DKK 17,869m. The revenue growth thus exceeded the
outlook range of 23-25% that was narrowed on 17
November 2021 from the initial outlook range of 20-25%
growth for 2021 announced on 10 February 2021.
The operating profit (EBITDA) before special items increased
25% to DKK 3,411m in 2021 compared to 2020 as freight
earnings recovered from the 2020-lockdowns and the
Mediterranean business unit improved performance.
The following changes were made to the outlook for EBITDA
before special items during 2021:
DFDS Group, key financial figures
DKK m
2021
2020 2019
Revenue
17,869 13,971 16,592
EBITDA* 3,411 2,732 3,633
EBIT*
1,313 858 1,751
Profit before tax*
1,035 583 1,472
Profit for the period
976 442 1,313
Free cash flow, FCFF
274 605 607
Adjusted free cash flow, FCFF
-655 444 -151
Invested capital, end of year
25,369 22,121 22,476
Net interest-bearing debt/EBITDA*, times
3.7 4.2 3.3
Return on invested capital*, %
5.2 3.5 8.1
Number of employees, average
8,874 8,213 8,367
* Before
special items
3
Supply chain bottlenecks and pricing: Intra-European
supply chains started to develop widespread bottlenecks in
Q3 driven by rising demand for consumer goods on the one
hand, and on the other hand restricted supply side transport
capacity due to Covid-19 and Brexit. This led to significant
price increases in some carrier markets, for example in
haulage and global container transport. Freight ferry ports
also congested as customers were not able to pick up their
trailers due to truck driver and equipment shortages.
The freight capacity of our ferry route network was through
2021 sufficient to handle market volumes and pricing was
therefore not immediately impacted. However, in the second
half of 2021, wages, spare parts, and other costs for ferry
and port operations increased due to the supply chain
bottlenecks. Such cost increases are reflected in pricing for
2022.
Most of DFDS’ logistics solutions are based on longer
contracts, as opposed to spot, and due to the speed of
carrier cost increases and inadequate cost compensation
terms in contracts, gaps developed between pricing and
solution costs through 2021. Many contracts have been
renegotiated and flexible cost compensation terms have
been added to counter cost volatility.
Depreciation of TRY and Turkish export growth: During
2019, a further step was taken to significantly reduce the
currency risk related to Turkish Lira (TRY) of our
Mediterranean business unit as the invoicing currency was
changed from TRY to EUR. This aligned the pricing and
invoicing currencies.
Mediterranean’s currency risk is therefore mainly related to
the impact of changes in TRY on trade between Turkey and
the EU. The depreciation of TRY versus EUR boosted Turkish
exports to Europe in 2021 and continued export growth is
expected in 2022. The current imbalance between export
and import volumes in our route network are around 10%
as export growth exceeds import growth.
The depreciation of TRY and the subsequent high inflation in
Turkey is currently depressing domestic demand. A large
part of the freight volumes carried in our Mediterranean
route network is however not linked to domestic demand,
but rather to manufacturing in Turkey that uses imported
semi-finished goods from Europe in the assembly of finished
goods that are exported to Europe.
Longer term, we expect Turkey will benefit from nearshoring
of manufacturing from overseas regions as companies
already in 2021 started to take measures to reduce supply
chain disruption risks.
Key financial results of 2021
On this background, revenue for 2021 increased 28% to
DKK 17,869m. The revenue growth thus exceeded the
outlook range of 23-25% that was narrowed on 17
November 2021 from the initial outlook range of 20-25%
growth for 2021 announced on 10 February 2021.
The operating profit (EBITDA) before special items increased
25% to DKK 3,411m in 2021 compared to 2020 as freight
earnings recovered from the 2020-lockdowns and the
Mediterranean business unit improved performance.
The following changes were made to the outlook for EBITDA
before special items during 2021:
DFDS Group, key financial figures
DKK m
2021
2020 2019
Revenue
17,869 13,971 16,592
EBITDA* 3,411 2,732 3,633
EBIT*
1,313 858 1,751
Profit before tax*
1,035 583 1,472
Profit for the period
976 442 1,313
Free cash flow, FCFF
274 605 607
Adjusted free cash flow, FCFF
-655 444 -151
Invested capital, end of year
25,369 22,121 22,476
Net interest-bearing debt/EBITDA*, times
3.7 4.2 3.3
Return on invested capital*, %
5.2 3.5 8.1
Number of employees, average
8,874 8,213 8,367
* Before
special items
Revenue up
28%
to DKK 17.9bn
EBITDA up
before special items
25%
to DKK 3.4bn
ROIC of
5%
before special items
Equity ratio
38%
3
Supply chain bottlenecks and pricing: Intra-European
supply chains started to develop widespread bottlenecks in
Q3 driven by rising demand for consumer goods on the one
hand, and on the other hand restricted supply side transport
capacity due to Covid-19 and Brexit. This led to significant
price increases in some carrier markets, for example in
haulage and global container transport. Freight ferry ports
also congested as customers were not able to pick up their
trailers due to truck driver and equipment shortages.
The freight capacity of our ferry route network was through
2021 sufficient to handle market volumes and pricing was
therefore not immediately impacted. However, in the second
half of 2021, wages, spare parts, and other costs for ferry
and port operations increased due to the supply chain
bottlenecks. Such cost increases are reflected in pricing for
2022.
Most of DFDS’ logistics solutions are based on longer
contracts, as opposed to spot, and due to the speed of
carrier cost increases and inadequate cost compensation
terms in contracts, gaps developed between pricing and
solution costs through 2021. Many contracts have been
renegotiated and flexible cost compensation terms have
been added to counter cost volatility.
Depreciation of TRY and Turkish export growth: During
2019, a further step was taken to significantly reduce the
currency risk related to Turkish Lira (TRY) of our
Mediterranean business unit as the invoicing currency was
changed from TRY to EUR. This aligned the pricing and
invoicing currencies.
Mediterranean’s currency risk is therefore mainly related to
the impact of changes in TRY on trade between Turkey and
the EU. The depreciation of TRY versus EUR boosted Turkish
exports to Europe in 2021 and continued export growth is
expected in 2022. The current imbalance between export
and import volumes in our route network are around 10%
as export growth exceeds import growth.
The depreciation of TRY and the subsequent high inflation in
Turkey is currently depressing domestic demand. A large
part of the freight volumes carried in our Mediterranean
route network is however not linked to domestic demand,
but rather to manufacturing in Turkey that uses imported
semi-finished goods from Europe in the assembly of finished
goods that are exported to Europe.
Longer term, we expect Turkey will benefit from nearshoring
of manufacturing from overseas regions as companies
already in 2021 started to take measures to reduce supply
chain disruption risks.
Key financial results of 2021
On this background, revenue for 2021 increased 28% to
DKK 17,869m. The revenue growth thus exceeded the
outlook range of 23-25% that was narrowed on 17
November 2021 from the initial outlook range of 20-25%
growth for 2021 announced on 10 February 2021.
The operating profit (EBITDA) before special items increased
25% to DKK 3,411m in 2021 compared to 2020 as freight
earnings recovered from the 2020-lockdowns and the
Mediterranean business unit improved performance.
The following changes were made to the outlook for EBITDA
before special items during 2021:
DFDS Group, key financial figures
DKK m
2021
2020
2019
Revenue
17,869
13,971
16,592
EBITDA*
3,411
2,732
3,633
EBIT*
1,313
858
1,751
Profit before tax*
1,035
583
1,472
Profit for the period
976
442
1,313
Free cash flow, FCFF
274
605
607
Adjusted free cash flow, FCFF
-655
444
-151
Invested capital, end of year
25,369
22,121
22,476
Net interest-bearing debt/EBITDA*, times
3.7
4.2
3.3
Return on invested capital*, %
5.2
3.5
8.1
Number of employees, average
8,874
8,213
8,367
* Before special items
Revenue up
28%
to DKK 17.9bn
EBITDA up
before special items
25%
to DKK 3.4bn
ROIC of
5%
before special items
Equity ratio
38%
14
DFDS Annual Report 2021
Management review
4
• 10 February: Outlook range of DKK 3.0-3.5bn
announced
• 23 April: Outlook range raised to DKK 3.2-3.6bn after
stronger start to year
• 17 November: Outlook range narrowed to DKK 3.3-3.5bn.
On a divisional level, the Ferry Division’s EBITDA before
special items increased 23% to DKK 2,852m. The Logistics
Division’s EBITDA before special items increased 28% to
DKK 593m mostly driven by the acquisition of the HSF
Logistics Group consolidated from 14 September 2021.
The Group’s free cash flow was positive by DKK 2.0bn
before cash flow from acquisitions of DKK -1.8bn. Including
acquisitions and adjusted for lease payments, the free cash
flow was negative by DKK 0.7bn.
Financial leverage, measured by the ratio of net interest-
bearing debt (NIBD) to operating profit (EBITDA) before
special items, was 3.7 at year-end compared to 4.2 at year-
end 2020. The leverage ratio for 2021 includes a pro forma
EBITDA for HSF Logistics Group for the last twelve months.
The equity ratio was 38% at year-end 2021.
The average number of full-time employees (FTE) increased
8% to 8,874 in 2021 mainly due to the acquisition of the
HSF Logistics Group. The headcount was 10,559 at the end
of 2021.
Major events in 2021
An overview of major events of the year is provided per
quarter on page 16. The most important of these events are
reviewed in this section.
Cold chain logistics offering expanded by acquisition of
HSF Logistics Group: On 14 September 2021, the
acquisition of HSF Logistics Group was completed. The
enterprise value of the transaction was DKK 2.5bn. HSF
Logistics Group is one of Europe’s leading cold chain
logistics providers to meat producers and other food
producers that operate temperature-controlled supply
chains. HSF Logistics Group has around 1,800 employees
with annual revenue of approximately DKK 3.3bn and
EBITDA of DKK 368m.
Channel space charter agreement: To enhance the offering
to freight customers through shorter waiting times, as well
as to improve the efficiency of the ferry infrastructure
between the UK and the EU, a mutual space charter
agreement was made with P&O Ferries covering the Dover-
Calais route.
The space charter is expected to become fully operational in
the first half-year of 2022 following ongoing development
and testing of systems to support the space charter since
the autumn of 2021. The UK and French competition
authorities are reviewing the agreement.
UK duty-free sales and customs clearance services
introduced post Brexit: Since the beginning of 2021, duty-
free sales and customs clearance services were introduced
for activities linked to the UK.
Duty-free sales were in 2021 available on four passenger
ferry routes – Dover-Calais, Dover-Dunkirk, Amsterdam-
Newcastle, and Newhaven-Dieppe – as well as from border
shops in the ports of Calais and Dunkirk starting in Q4 2021.
In the latest pre-Covid-19 year of 2019, 4.1 million
passengers travelled on these routes as well as 1.2 million
truck drivers. Spending per head increased considerably in
2021 but assessment of the full potential of duty-free sales
awaits the return of passengers in larger numbers. Duty-free
sales prices are around 50% lower than UK high street
prices.
Customs clearance and related services are primarily
offered by the Logistics Division to customers trading with
the UK.
"Longer term, we
expect Turkey will
benefit from
nearshoring of
manufacturing from
overseas regions as
companies already in
2021 started to take
measures to reduce
supply chain
disruption risks."
15
DFDS Annual Report 2021
Management review
5
Major events in 2021
Q1
Q2
Q3
Q4
•
Agreement to acquire HSF Logistics Group, leading
provider of cold chain logistics in northern Europe
•
New freight ferry route opened between Ireland and
France/Continental Europe (Rosslare-Dunkirk)
•
New freight ferry route opened between Turkey and
Spain (Izmir-Tarragona)
•
Passenger ferry route between Norway and Denmark
suspended (Oslo-Frederikshavn-Copenhagen)
•
Customs clearance services and duty-free sales
introduced on UK-EU trading and travel following Brexit
•
Freight capacity agreement with UK Department for
Transport (DfT)
•
Sixth and final mega freight ferry delivered
•
Turkish seafarer dies in tragic accident in the
Port of Sête during loading of a freight ferry
•
Space charter agreement to shorten freight customers
Channel journey time announced
•
Sale of a freight ferry and purchase of another freight
ferry in an asset swap transaction
•
Acquisition of HSF Logistics Group approved and
closed. Payment made in two instalments in Q3 and
Q4, respectively
•
Agreement to acquire ICT Logistics
•
Passenger ferry route between Norway and Denmark
reopened (Oslo-Frederikshavn-Copenhagen)
•
New unaccompanied freight ferry route between UK
and France opened (Calais-Sheerness)
•
Deployment of a new combined freight and passenger
ferry on Dover-Calais
•
Sale of a short-sea combined freight and passenger
ferry built in 1992
•
Sale of Belgian logistics property
•
Agreement to build two new logistics centres in
Sweden (Vaggeryd and Karlshamn)
•
125 electric trucks ordered for logistics network
•
Acquisition of Swedish haulier GA Åkerierna
•
Space charter agreement with CLdN to open freight
ferry route between Rotterdam and Humberside
•
Shore power facility in Copenhagen taken into use
•
Delivery of a ro-pax new building for deployed in
Baltic Sea in January 2022
•
Borås warehouse opened
•
Agreement to sell and lease-back two side-port
ships; one ship delivered in Q4 and one in Q1 2022
16
DFDS Annual Report 2021
Management review
6
Progress on Climate Action Plan: Several actions were
taken in 2021 to enhance sustainability in both the short-
and long-term:
• Inauguration of shore power facility in Copenhagen –
making it possible to shut down engines in both Oslo and
Copenhagen while in the port
• Commitment to a Green ferry in 2025 – decision on route
and fuel type to be made in 2022
• 19 technical initiatives implemented to lower fuel
consumption and reduce emissions from our fleet at cost
of DKK 34m. The installations are expected to reduce
emissions by 21,800 t CO2 in 2022
• Order of 125 e-trucks – deployment in 2022-23
• Green transport corridor projects – development ongoing
in close collaboration with customers and infrastructure
partners with overlapping sustainability priorities and
geographical areas.
Diversity & Inclusion (D&I): In 2021, the land-based female
ratio increased from 27% to 29%, and the sea-based female
ratio increased from 15% to 17%. As the focus on D&I
(Diversity & Inclusion) is beginning to show results, the
target of 30% minority representation by 2023 is
maintained. In 2022 we will evaluate the target from a sea
based perspective and consider if a vessel by vessel
approach will be a suitable approach going forward.
Several actions to develop a diverse talent pool were
implemented in 2021:
• Diversity training of senior management and
implementation of D&I toolbox
• A new talent mentor programme was launched to
develop the talent pipeline for future management
positions
• D&I was the focal point of a case during DFDS’ selection
of participants for Horizon, our 12-month talent
development programme
• Zero tolerance policy towards harassment, bullying,
and discrimination introduced supported by internal
campaign.
Health & Safety: A global land based Health & Safety
function was established to increase focus on awareness
and implementation of additional preventive actions.
On 6 April 2021, a Turkish seafarer died from injuries
sustained in a tragic fatal accident in the Port of Sête
during loading of a freight ferry. The accident was
thoroughly investigated, and learnings led to an immediate
strengthening of the local Health & Safety organization by
allocating resources to improve local procedures and align
these across rest of the country.
Major events after 2021
On 15 February 2022, DFDS awarded 23,350 restricted
stock units and 176,706 share options to the Executive
Board and a number of key employees. The theoretical
value of the awards is DKK 14.6m calculated according to
the Black-Scholes model.
17
DFDS Annual Report 2021
Management review
• Automotive
• Forest & Metal
• Cold Chain
• Easy access for
customers
• Value-adding
services
• Operational
effiency
• Digitise core
systems
• Mediterranean
business plan
fulfillment
• Ferry new building
benefits
• Continous improve
ment projects
• Acquisitions
• Develop on
board customer
experience
• Business develop
ment initiatives
• Fleet development
• Climate Action
Plan
• Develop green
transport corridors
Grow solutions
to select
industries
Digitise services
to accelerate
growth
Develop and
expand network
Create more
value for
passengers
A B C D
DFDS
Drive
environmental
transformation
E
7
Our strategy
Our strategy is focused on five key areas to drive growth,
earnings, and sustainability.
A. Grow solutions to select industries
Industry sales of large freight customer solutions, involving
both ferry and logistics operations, was in 2020 combined in
one unit in the Logistics Division to drive sales across the
network. This includes development of solutions to the
automotive and forest & metal sectors.
The growth of solution sales to these sectors was in both
2020 and 2021 held back by disruptions of production
flows from Covid-19, Brexit, and supply chain bottlenecks.
As production normalises in the sectors, the ambition is to
grow revenue from these sectors.
The offering to cold chain logistics customers was in 2021
significantly boosted by the acquisition of HSF Logistics
Group specialised in logistics for meat producers. In
combination with DFDS’ existing cold chain activities
focused on seafood and other fresh food products, a strong
platform for further growth is now in place. In addition, the
demand for contract logistics solutions for a range of dry
goods, including warehousing, has increased and around 10
warehouses are expected to be opened in northern Europe
within the next three years.
B. Digitise services to accelerate growth
Digitising customer relationships, automating for
operational efficiency, and supporting sustainability goals
through digital solutions, are key focus areas for the digital
strategy. We also continue to prepare for autonomous
transport solutions.
For freight ferry customers, a new improved version of the
MyFreight online booking system will be rolled out during
2022. In port terminals, the first of a new generation of gate
systems are being installed to reduce congestion in and
around terminals. This is also supported by notifications
from an app helping drivers to better plan their arrivals.
[Insert Table from Excel]
18
DFDS Annual Report 2021
Management review
8
For passengers, a new online booking flow will be rolled out
which will make it easier to book and improve the customer
experience. Digital solutions are also being introduced on-
board for cabin access, restaurant bookings, and shopping.
On duty-free routes, passengers can already now shop
online and reserve items in advance for collection on arrival.
Among logistics customers, the DFDS Direct platform
continues to gain traction with features such as instant
quotes, booking, track & trace, and management of
transport documents. Digital solutions are applied to
optimise trip planning and avoid empty running which
translates into less emissions and thus more sustainable
transports. Within 1-2 years, it is expected that information
on carbon footprint can be made available to customers. For
larger customers, both standardised and bespoke system
integrations are offered. Overall, more than half of
customers now book digitally.
C. Develop and expand network
The Mediterranean ferry route network continued to
improve earnings and operational efficiency in 2021. The
network was further expanded to deploy 20 ferries by the
end of 2021 compared to 12 in 2018.
To accommodate growing freight volumes from customers,
a fleet renewal program was launched in 2016 covering nine
newbuildings delivered from 2019 to 2022. The program’s
final newbuilding will enter service in early Q2 2022. The
new ferries are larger and more cost-efficient and also
contribute to lowering emissions per transported freight
unit.
Growth is also pursued by business development initiatives
and by acquisitions.
In the ferry sector, catalysts for opening or closing of routes
are often events that alter flows of freight and passengers.
Both Covid-19 and Brexit impacted flows and route
networks have been adjusted; with DFDS opening four new
routes since 2020. Other growth and efficiency initiatives
include introduction of customs services and space charter
agreements with other operators, such as between Sweden
and Belgium with CLdN, and on the English Channel with
P&O Ferries.
Acquisitions are a key tool to improve the scope of our
customer offerings and improve cost-efficiency. Due to the
mature nature of the ferry sector and DFDS’ existing market
position, acquisition opportunities are limited in some
regions. The logistics market is, on the other hand, more
fragmented and offers more acquisition opportunities. Five
acquisitions have expanded the logistics network since the
strategy launch in mid-2019.
We expect to continue to grow the freight activities both
organically and by acquisitions in the coming years.
D. Create more value for passengers
Development of the passenger offering continued across the
Channel, Baltic Sea, and Passenger business units in 2021.
Duty-free sales were introduced on UK routes from the
beginning of the year and, in addition, Channel’s on-board
facilities were improved by replacement of an older ferry
with a newbuilding. 2022 will be the first full-year of the
Oslo-Frederikshavn leg added in 2020. In the Baltic Sea, a
key passenger route between Sweden and Lithuania was
boosted by deployment of a newbuilding in late January
2022 and a second newbuilding is expected to enter service
in early Q2 2022.
As a result of Covid-19, the passenger organisation and on-
board concepts were during 2020 and 2021 adapted to the
new market circumstances with more focus on transport
passenger segments. The recovery of passenger volumes is
expected to last through 2022 and 2023.
E. Drive environmental transformation
The transformation is governed by our Climate Action Plan
launched in 2020, and in 2021 this was added as a fifth
strategy pillar. The drive to reduce emissions from the
existing fleet of ferries and trucks continued in 2021
. In
parallel, the longer-term plan to transform the fleets to
green ferries and trucks gained traction by the
establishment of new dedicated sustainability and
innovation functions in both divisions. An ambition to
deploy a green ferry by 2025 was announced and 125
electric trucks were ordered for deployment in the logistics
network in 2022 and 2023.
Strategy goals – Win23
The Win23 program comprises the plans and financial
ambitions linked to the strategy for achievement by 2023.
The overall financial ambition is to reach an EBITDA of
around DKK 5bn in 2023 corresponding to a return on
invested capital (ROIC) towards 10%.
The three key drivers of the financial ambition - organic
growth and initiatives, Mediterranean business plan
fulfilment, and acquisitions - are on track to meet the
ambition in 2023. However, the positive impact of these
drivers is partly reduced by negative financial impacts from
macro events since mid-2019, mainly Brexit and Covid-19.
"Acquisitions are a
key tool to improve
the scope of our
customer offerings
and improve cost-
efficiency."
19
DFDS Annual Report 2021
Management review
DFDS’ business model combines ferry services and logistics solutions
to facilitate trade and travel between people and businesses. The ferry
routes are a vital part of Europe’s transport infrastructure. The logistics
solutions range from door-door transports to complex supply chain
management. Logistics solutions often include ferry services, and 9%
of our freight ferry volumes were carried for our own Logistics Division
in 2021 with a share of up to 25% on some routes.
Ferry routes
Door-door solutions
For dry goods and cold chain
Contract logistics
For dry goods and cold chain
Pickup
point
Catchment
area A
Port
terminal A
Port
terminal A
Freight and passengers
Port
terminal B
Port
terminal B
Delivery
point
Catchment
area B
Support WarehouseCustom
solutions
Temperature-controlled
warehousing
Our business
model
20
DFDS Annual Report 2021
Management review
Ferry business model
Customer offering
Ferry types & capacity
Market and route location/ports
Key value drivers: Volumes and volume growth • Capacity deployed and utilisation • Unit costs • High operating cost
leverage as ferry and port costs are fixed and constitute over half of total costs • Freight pricing driven by transport
alternatives, efficiency, and cost inflation • Passenger pricing mainly online and dynamic.
Key enablers: The knowledge and expertise of our people ensuring our ferries depart and arrive on time, take care of
passengers, load and unload ferries in ports, and make it all come together in offices • Customer relations
• Digital solutions, customer facing and operations.
There are four main types of customer offerings depending on market demand:
• Freight only – unaccompanied freight units
• Combined freight and passenger, overnight – accompanied and
unaccompanied freight units
• Combined freight and passenger, short sea – only accompanied freight units
• Passenger routes, overnight – deck space mainly used for cars, limited and
seasonal freight capacity
• Port terminal services, such as warehousing and cross-docking
• Rail solutions for transport to and from port terminals.
All routes offer a fixed schedule of departures and arrivals.. Duty-free sales
on-board and from border shops can be offered to passengers.
For freight customers, it is of particular importance that route capacity is
continuously adapted to their need to grow volumes.
The main ferry types are ro-ro ferries for freight only routes, ro-pax ferries for
combined routes and cruise ferries for passenger routes. In addition, ferries are
custom built to specifications such as:
• Freight and passenger capacity requirements
• On board facilities
• Speed
• Deck strength and ramps
• Ice class.
We deploy both owned and chartered ferries, including short- and long-term
charter periods. The capacity of a ferry route is determined by the number of
ferries deployed, the size of the ferries and the frequency of the schedule.
The choice of ports to connect is critical for a ferry route that typically only
sails between two ports. Important criteria are:
• Market size, growth potential and competitive structure
• Road and rail infrastructure linked to the ports
• Level of industrial and other production within each port’s catchment area
• Population density (impacts goods consumption and passenger market
potential)
• Port terminal areas for parking of freight units, mostly trailers.
The ports we call are either owned or leased for longer periods, and in some
cases we also operate the leased ports.
Our ferry routes connect countries or regions separated by water. They
also offer an alternative to land transport. The value proposition to
freight customers includes cost-efficiency, reliability, capacity, and
customer services. For passengers, safety and the on-board experience
are also important.
Ferries are built to carry vehicles and freight units that drive, or can
be tugged, on and off ferries, e.g. trucks, trailers, cars, and buses. As
ferries cover shorter distances and sail relatively fast, they mainly
carry time-sensitive freight for delivery within 1-3 days. The use of
rolling cassettes enables ferries to also carry heavy industrial goods
such as metals, paper, and other forest products.
21
DFDS Annual Report 2021
Management review
Our logistics solutions include transport, distribution, storage
and value-added services to manufacturers, food producers and
retailers. The customer value proposition includes performance
enhancement, cost-efficiency, reliability, and customer service.
The geographic focus overlaps to a large extent with DFDS’
ferry route network. Sector specific solutions are focused on the
automotive, forest product, and metal sectors as well as food
producers requiring temperature-controlled logistics (cold chain).
Logistics business model
Contract logistics, dry
Cold chain logistics
Forwarding, dry and cold chain
Key value drivers: Volumes and volume growth • Sector specific market developments • Forwarding: balance between
front and back loads • Empty running • Management and procurement of sub-contracted transport • Contract cost
adjustment flexibility • Contract logistics: capacity utilisation of equipment and facilities • Low operating cost leverage
as majority of costs are variable • Pricing driven by transport alternatives, carrier costs, efficiency, and cost.
Key enablers: The knowledge and expertise of our people that plan transport solutions, pick up and deliver freight on time,
store and distribute fresh produce at the right temperatures, and make it all come together in offices • Customer relations
• Carrier network and relations • Digital solutions, customer facing and operations.
Operation or management of parts of customer supply chains. Solutions are
developed in partnership with customers and include:
• Inbound transport to warehouses, including ferry transport
• Warehousing: storage, picking and inventory management
• Value-added services: wrapping, packaging, cleaning, and repairs
• Cross docking of consignments
• Distribution using mainly third-party providers
• Just-in-sequence transport to assembly lines
• Last mile delivery
• Management of customer supply chains using the customer’s own facilities
and equipment or third-party providers (4PL).
Warehouses are owned or leased. Sector specific solutions can require special
equipment for handling heavy goods such as steel or paper.
Solutions for fresh or frozen foods requiring supply chains with temperature
control and strict hygiene standards in distribution centres and in transport
equipment. Solutions include:
• Inbound reefer transport to distribution centres
• Operation of distribution centres
• Storage and cross docking of consignments
• Rental of specialised packaging, e.g. plastic box pallets, crates and pallets
• Cleaning and repair of reusable packaging
• Distribution by inhouse trucking, including drivers, or third-party providers
• Last mile delivery
• Customs clearance and other processing services.
Distribution centres are owned or leased. Customer contracts are typically
longer term.
Design and planning of transport solutions according to preferences for speed,
delivery precision, and transport modes. Transport equipment - trailers or
containers – is provided to customers as well as access to online booking and
tracking. The primary activities are:
• Full loads (FTL) for dry and reefer trailers and containers
• Part loads (LTL) for dry and reefer trailers
• Sub-contraction of transport from hauliers and ferry, container ship,
and rail operators
• On contract or spot terms. Large flows mostly contract based, from
months to 1-2 years
• Overlap of traffic corridors with ferry route network
• Customs clearance and other processing services.
Transport equipment is owned or leased.
22
DFDS Annual Report 2021
Management review
10
Outlook
The outlook for 2022 builds on multiple assumptions that
may change significantly as the year progresses.
Visibility continues to be reduced by Covid-19, particularly
with regard to its effect on European passenger ferry
markets.
General market growth prospects
The current consensus outlook for GDP-growth in 2022
(Gross Domestic Product) for Europe and Turkey is 4.0%
and 3.5%, respectively (Source: Thomson Reuters).
Turkey’s export to Europe benefited from the depreciation
of TRY vs EUR in 2021 and this trend is expected to
continue in 2022. Inflation is expected to be elevated in
2022 and this is likely to increase the imbalance between
Turkey’s export and import growth. Geopolitical risks
related to Turkey could dampen the expected growth, both
short and long-term.
Key freight outlook assumptions for 2022
Freight volumes are expected to grow in most of our
markets in 2022.
The North Sea and Channel ferry business units as well as
the Logistics Division have a high share of activities linked
to the UK. Freight volumes linked to the UK market are
expected to grow in 2022 following the slowdown in 2021,
especially across the Channel.
The UK freight market will in 2022 still be in a transition
phase as final implementation of the Brexit trade
agreement is completed in steps during 2022.
The entry of a third ferry operator on the Dover Strait
creates considerable overcapacity in the market, especially
since freight volumes have declined since 2019. The
overcapacity is likely to increase price pressure in the
market and reduce incumbents’ market share.
The Mediterranean business unit is expected to benefit in
2022 from continued growth in Turkish export volumes
supported by capacity expansion and further optimisation
of operations.
Ferry and logistics volumes are expected to continue to
grow in the Baltic region. Additional freight ferry capacity
has been attracted in recent years and capacity growth is
expected to exceed market growth in 2022. Our deployment
of two new combined freight and passenger ferries is
expected to strengthen the customer offering in 2022.
The Logistics Division’s revenue and earnings are expected
to grow significantly in 2022, primarily due to the full-year
impact of the HSF Logistics Group acquired with effect from
14 September 2021. Margins for both the Dry and Cold
Chain forwarding and logistics activities are expected to
improve in 2022, partly due to a higher level of cost
coverage.
Freight flows may also in 2022 be impacted by supply chain
bottlenecks, although it is anticipated that such impacts
will be less severe than in 2021.
In February 2022, the EU Mobility Package comes into effect
concerning alignment of minimum wages for truck drivers
across member states, return of trucks to country of origin,
and cabotage rules. DFDS is well prepared to comply with
the new rules. The package is expected to entail a general
cost increase for haulage services.
DKK m
Outlook 2022 2021
Revenue growth
23-27% 17,869
EBITDA before special items 3,900-4,400 3,411
Per division:
Ferry Division
3,050-3,450 2,852
Logistics Division
900-1,000 593
Non-allocated items
-50 -35
Investments
-2,300 -3,210
Types:
Operating
-1,400 -975
Ferries: sale & purchase and newbuildings
-800 -490
Acquisitions
-100 -1,745
23
DFDS Annual Report 2021
Management review
11
Key passenger outlook assumptions for 2022
The EBITDA for passenger services across business units -
Passenger, Channel and Baltic Sea - was reduced by around
DKK 1bn in 2020 compared to 2019 and remained on level
with 2020 in 2021. This was a consequence of the travel
restrictions that were imposed to limit the spread of
Covid-19.
The outlook initially assumes that around 50% of the
EBITDA decrease of the two previous years is regained in
2022. The current most likely scenario is that travel
restrictions will continue to limit travel in Q1 2022 while
subsequent easings of restrictions and a gradual return to
historic travel patterns are expected to increase the number
of passengers compared to 2021. The number of passengers
in 2021 was 83% below the pre-Covid-19 level in 2019.
The entry of a third ferry operator on the Dover Strait
creates considerable overcapacity in the market. The
overcapacity is likely to increase price pressure in the
market and reduce incumbents’ market share. Duty-free
sales are expected to mitigate these effects somewhat.
The high season for ferry travel is Q3 and the outlook is
thus especially sensitive to the scope of travel restrictions
in this quarter.
Revenue outlook
The Group’s revenue is expected to increase by 23-27%
compared to 2021. The two main growth drivers are the
full-year impact of the acquisition of the HSF Logistics
Group, and the assumed recovery in passenger volumes. In
addition, freight volumes are expected to grow in most
markets in 2022.
Earnings outlook
Based on the above assumptions, the Group’s EBITDA before
special items is expected to be within a range of DKK 3.9-
4.4bn (2021: DKK 3.4bn). See outlook table for divisional
split.
Investments
Investments of around DKK 2.3bn are expected in 2022:
• One combined freight and passenger ferry new building
and exercise of a purchase option to buy one freight
ferry: DKK 800m
• Dockings and ferry upgrades, including energy efficiency
projects: DKK 600m
• Port terminals and other equipment: DKK 300m
• Cargo carrying equipment and warehouses, mainly
related to Logistics Division: DKK 400m
• Other investments, including digital and acquisition of
ICT Logistics completed in January 2022: DKK 200m.
Capital structure
The financial leverage, as measured by the ratio between
NIBD and EBITDA, is expected to decrease from 3.7 at year-
end 2021 towards the target range of 2.0-3.0 by year-end
2022. This includes payment of dividend as proposed on
page 68.
Various risks and uncertainties
pertain to the outlook.
The most important among these are
possible major changes in the
demand for ferry services
– for
freight and passengers
-
and logistics
solutions.
Such demand is to a large extent
linked to the level
of economic
activ
ity and trade in primarily
Europe, especially northern Europe,
and in particular the UK, as well as
adjacent regions, particularly Turkey.
Demand can also be impacted by
competitor actions, supply chain
disruptions, and extraordinary events
such as virus
outbreaks and
geopolitical
instability. Covid-19
continues to constitute a significant
risk, particularly for the passenger
ferry services.
The outlook can moreover be
impacted by political changes, first
and foremost within the EU and
Turkey. The intro
duction of a new
trade agreement between the EU and
the UK, that is yet to be fully
implemented, and its possible
consequences on trade constitutes
an important risk.
Changes in economic variables,
especially oil prices and exchange
rate
s, can furthermore impact
earnings.
Future financial results may
therefore differ significantly from the
outlook expectations.
[Chart - Heading]
Insert foto
[Insert chart]
24
DFDS Annual Report 2021
Management review
Storyline
H
2
Electrolysis
Ammonia
Ammonia fuel
Electricity
Hydrogen
Green transport corridors of tomorrow
Fuel type Green ferries & trucks Fuel availability Biodiversity
Fuel type - from fossil to
sustainable fuels
It all starts with sustainable energy
sources, such as wind or solar power.
Already today, sustainable energy
goes directly into the energy system as
electricity, for example for use by electric
cars and trucks.
For ferries there are currently four
possible sustainable fuels or energy
sources that could be suitable: ammonia,
methanol, and hydrogen as well as
batteries for short-sea ferries.
The three fuels have different attributes
regarding storage and energy efficiency.
Ammonia is toxic but can be stored, in a
manageable way regarding temperature
and pressure, as a liquid in tanks, while
hydrogen can be stored as a gas in high-
pressure tanks or as a liquid at -252.8 C.
Methanol can be stored at ambient
temperatures.
The less energy dense a fuel is, the higher
the quantity required to produce energy
equivalent to fossil fuel.
A final important factor is the long-term
expected fuel price which will depend on
cost of renewable electricity, scale of the
production, and availability of required
feedstock for methanol.
No decisions have been taken yet, but
ammonia’s attributes makes it a likely choice
for ferries with longer crossing times.
The next step is to build ferries with
sustainable fuel engines.
Fossil fuel
Energy efficiency (sailing distance)
Ammonia
Hydrogen
Batteries
1
3
10
32
25
DFDS Annual Report 2021
Management review
Divisions
27 Ferry Division
38 Logistics Division
46 People
26
DFDS Annual Report 2021
Management review
12
Freight earnings growth
despite headwind from Brexit
and supply chain bottlenecks
Mediterranean improved
performance strongly
Passenger earnings still
down DKK 1bn vs 2019 due
to travel restrictions
In 2021, freight volumes recovered from the 2020-
lockdowns, new freight routes were opened, and the
investments of recent years in larger and more efficient
freight ferries – both in cost and environmental terms –
strengthened the reliability and capacity we offer to our
primary customers: forwarders and hauliers.
It was also a challenging year as Brexit and supply chain
bottlenecks lowered visibility, impacted freight flows, and
raised operating costs. In addition, travel restrictions
prevented a recovery in passenger numbers that remained
on level with 2020.
In line with DFDS’ Climate Action Plan, initiatives were
taken to reduce emissions from the existing fleet while
planning for long-term de-carbonisation intensified. Focus
on Diversity & Inclusion actions and targets also gained
momentum through the year.
Ferry Division
North Sea
Mediterranean
Channel
Baltic Sea
Passenger
DKK
3% to DKK
1
27
DFDS Annual Report 2021
Management review
Gliwice
Kutno
Belgrade
Curtici
Ploiestie
Budapest
Vienna
Melzo
Ostrava
Lambach
Wels
Munich
Nuremberg
Ludwigshafen
Novara
Cologne
Lyon
Le Boulou
Barcelona
Bettemburg
Tashkent
Vladivostok
Ulaanbaatar
Almaty
Kiev
Minsk
Moscow
Malmö
Mosjøen
Mo i Rana
Fauske
Mersin
Yalova
Pendik
Ambarl
Patras
Bari
Trieste
Tunis
Marseille
Sète
Valencia
Tarragona
İzmir
Dieppe
Boulogne-
sur-Mer
Calais
Dunkirk
Duisburg
Neuss
Ghent
Antwerp
Brugge
Zeebrugge
Rotterdam
Amsterdam
(IJmuiden)
Hamburg
Cuxhaven
Kiel
Prague
Poznan
Vilnius
Klaipeda
Liepaja
Riga
Ventspils
Muuga
Vuosaari
Paldiski
St. Petersburg
Frederikshavn
Kapellskär
Karlshamn
Esbjerg
Fredericia
Copenhagen
Køge
Gothenburg
Halden
Fredrikstad
Oslo
Brevik
Stavanger
Bergen
Trondheim
Rosslare
Dover
Newhaven
Sheerness
Felixstowe
Immingham
Newcastle
Helsingborg
Ferry routes
Short sea ferry
Overnight ferry
Freight route
Freight and passenger route
Rail connections
Mini cruise
Packaged breaks
Groups & events
Conferences at sea
Rail Solutions
Special Cargo
Ferry transport of freight
units, accompanied and
unaccompanied
Port terminal services
Freight
Our key freight and passenger offerings
Passenger
28
DFDS Annual Report 2021
Management review
14
Financial performance
The Ferry Division’s revenue increased 25% to
DKK 11,806m compared to 2020 driven by a recovery in
freight volumes and the opening of three new routes.
Passenger revenue – from the Channel, Passenger, and
Baltic Sea business units - remained on level with 2020.
In 2021, the revenue split between freight and passenger
revenue was around 90/10. In 2019, a pre-Covid-19 year,
the split was 70/30.
EBITDA before special items increased 23% to DKK 2,852m
and EBIT before special items increased 45% to
DKK 1,160m. EBIT after special items increased 67% as
2021 included gains on asset sales and 2020 included
special cost items related to organisational changes made
in response to Covid-19.
The return on invested capital, ROIC, before special items
increased to 5.3% in 2021 from 3.8% in 2020 primarily due
to a considerable improvement in Mediterranean’s ROIC.
Invested capital – ferry fleet and port terminals
The invested capital was DKK 20.5bn at year-end 2021, of
which ferries amounted to DKK 13.6bn and port terminals to
DKK 3.0bn. Intangible assets accounted for DKK 4.1bn,
including goodwill of DKK 3.0bn mainly related to the
Mediterranean business unit.
In 2021, the ferry route network deployed 64 ferries,
including two side-port and container ships, of which 71%,
or 47, were owned and 19 were chartered in for varying
periods.
A fleet renewal program was launched in 2016 to grow the
route network’s capacity, improve cost efficiency, and lower
emissions per freight unit transported. The program
comprised nine new buildings:
• Six freight ferries (ro-ro) with each 6,700 lane metres of
freight capacity equivalent to around 450 trailers.
Deployed in North Sea and Mediterranean
• Two combined freight and passenger ferries (ro-pax) with
each 4,500 lane metres of freight and passenger vehicle
capacity and onboard facilities for 600 passengers. To be
deployed in 2022 in Baltic Sea
• One combined freight and passenger ferry (ro-pax) with
3,100 lane meters of freight capacity and onboard
facilities for 1,000 passengers (chartered on a 10-year
bareboat agreement). Deployed in Channel.
There are currently no plans to build new ferries, apart from
a green ferry new building scheduled for 2025. The next
major fleet investment program is expected to be renewal
of the five short-sea Channel ferries for completion towards
2030. These ferries are expected to be battery powered due
to the short crossing time of the Dover Strait.
The lifespan of freight and passenger ferries is estimated at
35 years and 45 years for passenger cruise ferries. The
duration of port terminal leases is typically between 10 and
40 years.
Port terminals are owned/operated in eight strategic
locations. The Vlaardingen port terminal area is being
expanded and the new area is expected to become fully
operational in 2022. This will improve rail services to and
"In 2021, the ferry
route network
deployed 64 ferries."
Ferry Division, DKK m
2021
2020 ∆ ∆ %
Revenue
11,806 9,445 2,360 25.0%
EBITDA before special items 2,852 2,315 537 23.2%
Share of profit/loss of associates and joint ventures
-13 -5 -7 n.a.
Profit/loss on disposal of non-current assets, net
4 1 3 n.a.
Depreciation and impairment
-1,684 -1,509 -175 11.6%
EBIT before special items
1,160 802 358 44.7%
EBIT-margin before special items, %
9.8 8.5 1.3 n.a.
Special items, net
12 -98 111 n.a.
EBIT
1,172 703 469 66.7%
Invested capital, average
20,442 20,222 220 1.1%
ROIC before special items, %
5.3 3.8 1.5 n.a.
Average number of employees 5,381 5,452 -71 -1.3%
Lane metres, '000
43,011 40,886 2,125 5.2%
Tons, '000 633 664 -31 -4.7%
Passengers, '000
869 1,498 -629 -42.0%
29
DFDS Annual Report 2021
Management review
15
from the terminal. The Trieste port terminal area was
expanded towards the end of 2021 and by moving some
calls to another terminal more space will be freed up in
2022.
ESG development
The key environmental challenge is to de-carbonise ferry
operations by replacing fossil fuels with sustainable fuels.
DFDS’ Climate Action Plan includes short-term actions to
reduce emissions from the existing fleet and transformative
long-term actions to de-carbonise.
In 2021, several initiatives were taken to lower emissions
from the existing ferry fleet:
• Shore power facility in Copenhagen taken into use in
October 2021. Planning ongoing for shore power
projects in other ports in the route network
• Latest route planning and propulsion control technology
installed on three ferries to improve fuel performance
• Anti-fouling hull paint applied to ten ferries to reduce
friction in the water and hence fuel consumption
• LED lighting installed on freight decks on three ferries
• Installation of new injection system to optimise engine
combustion on five ferries to save fuel (PMI VIT).
Emission savings are continuously documented and
subsequently applied to the rest of the fleet as appropriate.
In 2021, the CO2 per GT mile increased from 13.5 g/CO2/GT
mile in 2020 to 13.6 g/CO2/GT mile. The increase is not a
result of decreasing efficiency but rather due to 2020 being
an abnormal year where a large part of the fleet was laid up
due to Covid-19. As such, 2020 is not a viable benchmark.
Compared to 2019, efficiency was improved as CO2
emissions per GT mile of 14.1 g/CO2/GT mile was reduced to
the 13.6 g/CO2/GT mile in 2021.
In port terminals, emissions are being reduced by focus on
electrification, energy efficiency improvements, and
increasing use of HVO (Hydrogenated Vegetable Oil) by
terminal equipment such as tug-masters.
Most port terminals are connected to a rail infrastructure
enabling freight to be transported to and from a terminal by
rail. We encourage customers to move freight to rail as this
lowers emissions considerably compared to road transport.
In the Trieste port terminal, more than half of the freight
volumes are now moved by rail to European rail hubs. In
2022, the expanded rail infrastructure of the Vlaardingen
port terminal is expected to increase rail volumes.
Health & Safety (H&S) procedures are critical in the
operation of ferries and port terminals, not least the loading
and unloading of large, heavy freight units done by tug-
masters driven by port terminal staff. This interaction
1
VSAs (vessel sharing agreements)
and SCAs (slot charter agreements)
.
Fleet overview and key figures, year
-end 2021
Total fleet
Freight ferries
(ro-ro)
Freight &
passenger
ferries (ro-
pax)
Cruise ferries
Sideport
ships
Ownership
share, %
Average age of
owned ships,
yrs
DFDS Group
80 45 17 4 15 - -
Ferry Division 64 41 17 4 2 - -
North Sea
19 17 - - 2 79 13
Mediterranean
20 20 - - - 70 13
Channel
11 1 10 - - 50 16
Baltic Sea
10 3 7 - - 90 18
Passenger
4 - - 4 - 100 32
Logistics Division 13 - - - 13 - -
Dry Goods
1
13 - - - 13 0 -
Chartered out ferries 3 3 - - - -
30
DFDS Annual Report 2021
Management review
16
between ferries and port terminals is identified as a high-
risk activity. The largest freight ferries carry around 450
trailers that are turned around in seven to nine hours.
In addition to H&S procedures, a Safety First culture is
therefore promoted across high-risk locations such as port
terminals. To further embed and maintain a safety culture
are key priorities of the new Global H&S organisation
implemented in 2021.
The target for gender diversity is a total workforce female
gender ratio of 30%. In 2021, this ratio was 28% in the
Ferry division, including a 25% ratio of female managers.
There is, however, a high level of variance in ratios for the
office and non-office workforce. In offices, the female
gender ratio was 45%, and 28% for managers, while the
non-office ratio was 10%, and 3% for managers. In the
coming years, the focus will thus increasingly be on raising
the non-office female gender ratios.
Digitisation
A new generation of our online freight booking system was
launched in 2021 with roll-out for all customers expected
during 2022. Support to truck drivers using our port
terminals was increased via the DFDS app, which offers
proactive notifications via push messages to make drop-off
and pick-up of units smoother, helping drivers to plan their
arrival better and so reduce congestion. Adoption of the
services provided via the app increased significantly in
2021.
For passengers, a new passenger booking flow was
introduced that reduces the time to book and improves the
booking experience. On the Channel, a new online shop for
duty-free sales offers passengers an opportunity to shop
and reserve items in advance for collection on arrival.
Ferry industry and market trends
This section reviews current topics of strategic relevance for
the ferry industry and its growth prospects.
Brexit
Brexit triggered several changes in European ferry markets
in 2021. One of the largest was the re-routing of some of
the Ireland-Continent freight flows away from the UK land-
bridge (driving through the UK and crossing via the Dover
Strait) to ferry routes sailing directly between Ireland and
the Continent. New routes were opened, including DFDS’
Rosslare-Dunkirk route, and capacity added to existing
routes which lowered volumes carried by routes connecting
Ireland and the UK in the southern part of the Irish Sea.
Freight volumes between the UK and the Continent have
been impacted by events of the Brexit transition in recent
years. Volumes have to a large extent held up on
unaccompanied routes while driver-accompanied volumes
have declined, particularly on the Dover Strait. This
development is linked to truck driver shortages that are
partly caused by fewer eastern European truck drivers
returning to the UK post Brexit.
Competition
The competitive landscape in most regions was overall
unchanged in 2021, with a couple of important exceptions.
A ferry operator at the end of June 2021 opened a route
between Dover and Calais
with initially one ferry. A second
ferry was deployed at the end of December 2021, and a
[Chart - Heading]
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- Subheading]
[Insert chart]
31
DFDS Annual Report 2021
Management review
17
third ferry is expected to be deployed in the spring of 2022.
The Channel ferry market freight volumes have overall
declined in recent years, partly due to a general decline in
UK-EU trade, and partly due to rising demand for
unaccompanied ferry services. The long-term impact of
Brexit on future Channel freight volumes can likely only be
assessed towards the end of 2022 when the entire Brexit
agreement is expected to have been implemented. There is
thus currently no demand or need in the Channel freight
market for additional capacity.
The excess capacity created by the entry of an additional
operator is therefore likely to impact both freight and
passenger pricing negatively in 2022. The likely passenger
ticket price decreases will to some extent be mitigated by
additional revenue from duty-free sales. Moreover, the new
entrant will decrease the energy efficiency of the Dover
Strait transport corridor.
In the Baltic Sea region, freight volumes have grown in
recent years which has led to capacity increases on routes
operated by both direct and indirect competitors. The bridge
between Germany and Denmark is expected to be
completed within the next ten years and this has also
prompted some operators to adjust their route networks.
Freight ferry capacity in the region is therefore expected to
continue to grow faster than demand in 2022.
The truck driver shortages experienced in 2021 are likely to
persist in the coming years. This is expected to support
continued growth in the demand for unaccompanied ferry
services that DFDS primarily provides in the North Sea and
Mediterranean business units.
Near-shoring of manufacturing to Europe and adjacent
countries
In 2021, the disruption of supply chains reliant on overseas
manufacturing prompted reviews of supply chain reliability.
Global manufacturers are increasingly reviewing allocations
of manufacturing between regions, for example Asia and
Europe, and reducing dependency on single sources of
supply. This is expected to lead to nearshoring of more
manufacturing to Europe and countries close to Europe.
This trend is in general expected to support future growth of
freight volumes on ferry routes carrying intra-European
trade as well as trade between Europe and adjacent
countries.
Ferry vessel market
The markets for chartering and sale/purchase of ferries used
for transporting freight were busy in 2021 with limited idle
capacity.
Freight ferries (ro-ro): There was high demand for ferries
offered for chartering in the market and fixtures were made
for longer periods at strong rates. Despite a market
orderbook for newbuildings above both 2019 and 2020
(2019: 50k LM, 2020: 25k LM, 2021: 43k LM) and limited
scrapping, all new buildings were absorbed in the market
and several large operators added extra charter capacity
to
their networks.
The orderbook for 2022 and 2023 is around 70k LM,
although Covid-19 related delays are expected to move
delivery of several ferries into 2024. Smaller/older vessels
are currently sold to secondary markets, rather than
scrapped, and thus removed from the European market as
well.
Demand for freight ferries is expected to remain high in
2022 supported by nearshoring and congestion in other
segments of the transport sector.
Combined freight and passenger ferries (ro-pax): There was
high demand for combined ferries with an overweight of
freight capacity, to the extent that no vessels were
available for chartering during most of 2021. Charter rates
for this ferry type thus increased during 2021. Conversely,
the demand for passenger-focused ferries was low and
several vessels were idle during the year. The orderbook for
combined ferries is around 105k LM stretching to 2025 as
few vessels were delivered in recent years (2019: 11k LM,
2020: 11k LM, 2021: 17k LM).
Transition to green ferries: Sustainable fuel and engine
technologies are emerging. During 2022 it is expected that
orders can be placed for a first generation of ferries using
ammonia as fuel. A significant challenge for the transition
to green ferries is, however, the availability of green fuels
that in turn must be produced using renewable energy, for
example from a wind mill. The current prices of sustainable
fuels are in addition around 3-4 times higher than fossil
fuels.
It will take years before these and other transition
challenges are resolved and aligned with the commercial
needs of ferry operators. Meanwhile, most ferries built from
around 2010 can be retrofitted for partly sustainable fuels,
such as methanol or biofuels. Ro-pax ferries under
construction are typically equipped to use LNG as an interim
solution.
DFDS is engaging with customers, technology providers, fuel
providers, and other infrastructure partners to transition as
" The long-term
impact of Brexit on
future Channel
freight volumes can
likely only be
assessed towards
the end of 2022
when the entire
Brexit agreement is
expected to have
been implemented."
32
DFDS Annual Report 2021
Management review
18
fast as possible. This includes dialogues with governments
and regulators about public infrastructure’s critical role in
enabling the green transition.
The demand for freight ferry capacity is expected to remain
high during the initial phase of the green transition as
technologies mature and become commercially viable.
Business unit performance
Additional information on business unit performance is
available from quarterly reports, link.
North Sea – freight only
Revenue increased 22% to DKK 4,161m in 2021. The
increase was mainly driven by 8% higher volumes as
activity recovered from the Covid-19 lockdowns that
reduced volumes in Q2 and Q3 in 2020. In addition, revenue
was increased by a capacity agreement with the UK
Department for Transport (DfT), additional port terminal
standage fees, and higher bunker surcharges due to a rise in
the oil price.
EBITDA before special items increased 10% to DKK 1,287m
driven by the volume growth and one-off income from the
capacity agreement with the UK DfT in the first half-year of
2020.
The average invested capital increased 7% to DKK 6.4bn in
2021 primarily due to the deployment of a freight new
building and chartered ferries to increase capacity. ROIC
increased to 11% from 10% in 2020.
Mediterranean – freight only
Revenue increased 45% to DKK 2,993m in 2021. The
increase was driven by 19% higher volumes as activity
recovered, especially the automotive sector, from the Covid-
19 lockdowns that reduced volumes in Q2 and Q3 in 2020.
Turkish export volumes were also boosted by depreciation
of the Turkish Lira in the second half of 2021. Volumes
were, moreover, increased by a new route opened between
Turkey and Spain. In addition, revenue was increased by
additional port terminal standage fees and other services as
well as higher bunker surcharges due to a rise in the oil
price.
EBITDA before special items increased 71% to DKK 1,078m
driven by the volume growth and more efficient operations.
The average invested capital decreased 4% to DKK 9.4bn in
2021, and ROIC increased to 6% from 2% in 2020.
Channel – combined freight and passengers
Revenue increased 30% to DKK 2,619m in 2021. The
increase was mainly driven by a new freight route between
Ireland and France opened at the start of 2021. Freight
volumes on the existing routes decreased 3% in 2021 as UK
import volumes were reduced by a mixture of Brexit, Covid-
19, and supply chain bottlenecks. This decrease was,
however, partly offset by revenue from a capacity
agreement with the UK DfT and higher bunker surcharges
due to a rise in the oil price.
Passenger revenue increased 8% as higher revenue from
duty-free sales to mainly truck drivers offset lower ticket
revenue following a halving of the number of passengers
due to Covid-19 travel restrictions. In 2021, the passenger
revenue was significantly below the pre-Covid-19 revenue
in 2019. It is expected that passenger revenue
gradually will
return to pre-Covid-19 levels during 2022 and 2023.
EBITDA before special items increased 7% to DKK 358m as
the new route and one-off income from the capacity
agreement with the UK DfT offset a negative impact from
lower freight and passenger volumes.
The average invested capital increased 13% to DKK 1.9bn in
2021 primarily due to the opening of a new route. ROIC
decreased to -1% from 5% in 2020 due to negative impacts
from the low number of passengers and lower freight
volumes on the Dover Strait.
Baltic Sea – combined freight and passengers
Revenue increased 9% to DKK 1,381m in 2021. The increase
was mainly driven by higher freight revenue as volumes on
continuing routes increased 8%. The closure of a route in
2020 reduced revenue compared to 2021. In addition,
revenue was increased by higher bunker surcharges due to a
rise in the oil price. Passenger revenue was on level with
2020 as the impact from Covid-19 was limited due to a high
share of passengers are migrant workers.
EBITDA before special items decreased 10% to DKK 391m
due to higher operating costs as additional ferries were in
periods deployed to maintain capacity and the net bunker
cost increased.
The average invested capital of DKK 1.6bn in 2021 was on
level with 2020. ROIC decreased to 14% from 16% in 2020
following the lower earnings.
33
DFDS Annual Report 2021
Management review
19
Passenger – two cruise ferry routes
Revenue decreased 5% to DKK 462m in 2021. The decrease
was due to 29% fewer passengers due to longer periods
with tight travel restrictions than in 2020. The route
between Norway and Denmark was also suspended in the
first half of 2021. The lower number of passengers was
partly mitigated by higher revenue per passenger and an
increase in freight volumes. In 2021, the passenger revenue
was significantly below the pre-Covid-19 revenue in 2019. It
is expected that passenger revenue gradually will return to
pre-Covid-19 levels during 2022 and 2023, with overseas
passengers returning from 2023.
EBITDA before special items was DKK -392m compared to
DKK -373m in 2020. The negative result was due to the
significant drop in the number of passengers to 0.2m in
2021 from 1.4m in 2019.
The average invested capital of DKK 0.7bn in 2021 was 6%
lower than in 2020. ROIC was negative due to the operating
loss.
Non-allocated items
Non-allocated items primarily include activities related to
external chartering of ferries not deployed in DFDS’ route
network.
Revenue decreased 5% to DKK 425m compared to 2020
while EBITDA before special items increased 15% to DKK
137m.
34
DFDS Annual Report 2021
Management review
20
Business unit key figures
North Sea, DKK m
2021 2020 ∆ ∆ %
Revenue
4,161 3,420 740 21.6%
EBITDA before special items 1,287 1,168 119 10.2%
EBIT before special items
690 610 81 13.2%
Invested capital, average
6,362 5,951 411 6.9%
ROIC before special items, %
10.6 10.1 0.5 n.a.
Lane metres, '000
13,769 13,028 741 5.7%
Tons, '000 633 664 -32 -4.7%
Mediterranean, DKK m
2021 2020 ∆ ∆ %
Revenue 2,993 2,071 922 44.5%
EBITDA before special items 1,078 631 447 70.8%
EBIT before special items
635 245 390 159.2%
Invested capital, average
9,375 9,787 -412 -4.2%
ROIC before special items, %
6.3 2.4 3.9 n.a.
Lane metres, '000
5,034 4,034 1,000 24.8%
Channel, DKK m
2021 2020 ∆ ∆ %
Revenue 2,619 2,012 607 30.2%
EBITDA before special items 358 334 23 7.0%
EBIT before special items
-16 91 -107 -117.5%
Invested capital, average
1,939 1,713 226 13.2%
ROIC before special items, %
-1.2 5.2 -6.4 n.a.
Lane metres, '000
19,316 19,031 285 1.5%
Passengers, '000
441 989 -548 -55.4%
Baltic Sea, DKK m
2021 2020 ∆ ∆ %
Revenue 1,381 1,268 114 9.0%
EBITDA before special items 391 434 -43 -9.9%
EBIT before special items
226 268 -43 -15.9%
Invested capital, average
1,600 1,625 -25 -1.6%
ROIC before special items, %
14.0 16.4 -2.4 n.a.
Lane metres, '000
4,467 4,434 34 0.8%
Passengers, '000
214 209 5 2.3%
Passenger, DKK m
2021 2020 ∆ ∆ %
Revenue
463 489 -26 -5.2%
EBITDA before special items -392 -373 -19 n.a.
EBIT before special items
-488 -524 36 n.a.
Invested capital, average
677 722 -45 -6.3%
ROIC before special items, %
-72.6 -73.1 0.5 n.a.
Lane metres, '000
425 359 66 18.5%
Passengers, '000
214 300 -86 -28.8%
Non
-allocated items, DKK m 2021 2020 ∆ ∆ %
Revenue 456 436 21 4.7%
EBITDA before special items 131 122 9 7.2%
EBIT before special items
115 112 3 2.8%
35
DFDS Annual Report 2021
Management review
21
NORTH SEA MEDITERRANEAN CHANNEL BALTIC SEA PASSENGER
Head of business unit Kell Robdrup (South)
Morgan Olausson (North)
Lars Hoffmann Filip Hermann Anders Refsgaard Kasper Moos
Share of Division’s revenue 2021
1
34% 25% 22% 11% 4%
Routes
•
Gothenburg-Brevik/Immingham
•
Gothenburg-Brevik/Ghent
•
Gothenburg-Zeebrugge
•
Esbjerg-Immingham
•
Cuxhaven-Immingham
•
Vlaardingen-Felixstowe
•
Vlaardingen-Immingham
•
Oslo Fjord-Zeebrugge-Immingham
•
Istanbul-Trieste/Bari/Patras
•
Istanbul/Cesme-Sète
•
Mersin-Trieste
•
Izmir-Tarragona
•
Marseille-Tunis
•
Dover-Dunkirk
•
Dover-Calais
•
Newhaven-Dieppe
•
Rosslare-Dunkirk
•
Sheerness-Calais
•
Fredericia/Copenhagen-Klaipeda
•
Karlshamn-Klaipeda
•
Kiel-Klaipeda
•
Kapellskär-Paldiski
•
Muuga-Vuosaari (freight agreement)
•
Oslo-Frederikshavn-Copenhagen
•
Amsterdam-Newcastle
Ferries
•
17 ro-ro and 2 side-port & container
ships
•
20 ro-ro
•
10 ro-pax
•
1 ro-ro
•
3 ro-ro
•
7 ro-pax, including 1 new building
delivered end 2021
•
4 passenger cruise ferries
Port terminals
(owned and/or own operations)
•
Brevik
•
Ghent
•
Gothenburg (joint venture)
•
Immingham
• Vlaardingen
•
Istanbul, Pendik
•
Trieste
•
Copenhagen
Main customer segments
•
Forwarders & hauliers
•
Manufacturers of heavy industrial
goods (automotive, forest and paper
products, metals, chemicals)
•
RDF (refuse derived fuel)
•
Forwarders & hauliers
•
Forwarders & hauliers
•
Car passengers
•
Coach operators
•
Forwarders & hauliers
•
Manufacturers of heavy industrial
goods (automotive, forest products,
metals)
•
Car passengers
•
Mini Cruise passengers
•
Car passengers
•
Business conferences
•
Forwarders & hauliers
Main market areas
•
Benelux
•
Denmark
•
Germany
•
Norway
•
Sweden
•
UK
•
Italy, France, Spain, and other
Continental Europe
•
Tunisia
•
Turkey, and adjacent countries
•
France and Continental Europe
•
Ireland
•
UK
•
Baltic countries
•
Denmark
•
Finland
•
Germany
•
Russia
•
Sweden
•
Benelux
•
Denmark
•
Germany
•
Norway
•
Overseas markets
•
Sweden
•
UK
Main competitors
•
CLdN
•
P&O Ferries
•
Road as well as container and rail
transport
•
Stena Line
•
CMA-CGM
•
Cotunav
•
Grimaldi
•
Road as well as container
and rail transport
•
Ulusoy
•
Brittany Ferries
•
Eurotunnel
•
Irish Ferries
•
P&O Ferries
•
Road and rail transport
•
Stena Line
•
Tallink Silja
•
Transrussia Express (Finnlines)
•
Transfennica
•
TT Line
•
Airlines and road transport
•
Color Line
•
P&O Ferries
•
Stena Line
1 Revenue shares do not add up to 100% as
Non-allocated items are not included in the table
36
DFDS Annual Report 2021
Management review
Electricity
Hydrogen
H
2
Electrolysis
Green transport corridors of tomorrow
Green ferries and trucks
Fuel type Green ferries & trucks Fuel availability Biodiversity
Battery-driven electric trucks are already
now being marketed by manufacturers.
The driving range is still below fossil
trucks but expected to steadily increase
in the coming years. Hydrogen trucks are
being tested and could be better suited
for long haul trucks than electric trucks.
The first generation of smaller ammonia
fuelled ship engines are expected to be
available from manufacturers in 2023,
and larger ammonia engines are expected
to be available from 2025. Several fuel
cell technologies are being developed and
expected to become more attractive than
engines available today but will not be
powerful enough for ships for years to come.
Battery-only powered ships are likely to
be suited for short-sea ferries with crossing
times of a couple of hours. Another
possibility is to combine batteries with
onboard electricity generation for a new
generation of ships designed for being
upgraded throughout their operational life.
Investments in first-generation techno-
logies are inherently risky as more
efficient technologies will emerge. To
manage this risk, we are for example
part nering with truck manufacturers. As a
first step, we ordered 125 electric trucks
in 2021 for delivery in 2022 and 2023.
An infrastructure of charging stations
for trucks and fuel distribution to ferries
must be established in parallel with the
investments in sustainable assets. In
addition, to validate that we are using
green energy, a digital setup is required to
register and report energy footprint data
throughout the green transport corridor.
The great challenge of gaining access to
sustainable fuels is becoming ever more
clear to both DFDS and to the industry.
37
DFDS Annual Report 2021
Management review
23
Cold chain logistics offering
boosted by acquisition of
HSF Logistics Group
Earnings growth despite
headwind from Brexit and
supply chain bottlenecks
125 electric trucks ordered
for delivery in 2022-23
In 2021, the demand for logistics solutions increased to the
extent that supply chain bottlenecks in periods of the year
increased lead times and reduced the ability to meet all
customer demand. Financial performance improved for the
contract logistics activities, cold chain, and specialised
transport solutions as customers increased flows. The
forwarding activities were on the other hand negatively
impacted by fast and considerable carrier price increases
that short-term were not compensated by price increases.
A key event of the year was the acquisition of the HSF
Logistics Group that is specialised in cold chain logistics
solutions, especially for meat producers. In combination
with the existing cold chain activities, mainly in the UK,
DFDS thereby became a leading cold chain logistics
provider in northern Europe.
Business unit structure changed
The Logistics Division was reorganised in two business
units: Dry Goods and Cold Chain.
The cold chain activities embedded in DFDS’ three previous
Logistics business units – Nordic, Continent, and UK &
Logistics Division
Head of division
N
iklas Andersson
Business areas
•
Dry Goods
•
Cold Chain
Revenue
increased
35% to DKK
7.2bn
EBITDA
increased 2
8% to DKK
0.6bn
Logistics people
2
,774
38
DFDS Annual Report 2021
Management review
Amposta
Bilbao
Maia
Dieppe
Boulogne-sur-Mer
Calais
Dunkirk
Duisburg
Ghent
Antwerp
Brugge
Zeebrugge
Nijmegen
Winterswijk
Wijchen
Rotterdam
Amsterdam
IJmuiden
Hamburg
Cuxhaven
Kiel
Padborg
Gyula
Neuenkirchen-Vörden
Poznan
Szubin
Shanghai sales office
Kaliningrad
Klaipeda
Liepaja
Ventspils
Tallinn
Muuga
Vantaa
Turku
Hobro
Karlshamn
Esbjerg
Fredericia
Copenhagen
Helsingborg
Gothenburg
Borås
Lilla Edet
Halden
Fredrikstad
Moss
Oslo
Larvik
Brevik
Kristiansand
Stavanger
Haugesund
Bergen
Florø
Ålesund
Trondheim
Bodø
Waterford
Cork
Dublin
Mullagh
Belfast
Dover
Paignton
Newlyn
Gravesend
Felixstowe
Great Blakenham
Avonmouth
Peterborough
Corby
Coventry
Chesterfield
Grimsby
Immingham
Warrington
Liverpool
Killingholme
Manchester
Newcastle
Larkhall
Bellshill
Greenock
Aberdeen
Fort William
Lerwick
Tibod
Prague
Dry Goods Cold Chain
Logistics network
Distribution centres
Door-door forwarding,
full & part loads
Storage and cross-docking
Rental and cleaning
of reusable packaging
Customs clearance
Door-door forwarding,
full & part loads
Warehousing and
cross-docking
Distribution
Just-in-sequence
transport to assembly
lines
Supply chain
management
Focused industry
solutions to Automotive
and Forest & Metal
Customs clearance
Our key logistics offerings
Dry Goods
Cold Chain
Container routes, VSA
(Vessel Sharing Agreements)
39
DFDS Annual Report 2021
Management review
25
Ireland – have been merged with the HSF Logistics Group to
form a focused Cold Chain business unit. Remaining
activities are organised in a new business unit: Dry Goods.
Financial performance
The Logistics Division’s revenue increased 35% to
DKK 7,155m compared to 2020 driven by the acquisition of
the HSF Logistics Group and considerable rate increases to
compensate for higher costs. Revenue was also increased by
the introduction of new customs clearance services related
to the UK from the beginning of the year.
EBITDA before special items increased 28% to DKK 593m
and EBIT before special items increased 56% to
DKK 269m. The increase was to a large extent due to the
acquisition of HSF Logistics Group consolidated from 14
September 2021. EBIT after special items increased 69% as
2020 included special cost items related to organisational
changes made in response to Covid-19.
The return on invested capital, ROIC, before special items of
8.6% in 2021 was on level with 2020.
Invested capital – transport equipment and intangibles
The invested capital was DKK 4.2bn at year-end 2021, of
which transport equipment amounted to DKK 1.8bn and
warehouses and other buildings was DKK 0.4bn. Intangible
assets accounted for DKK 1.9bn, including goodwill of
DKK 1.3bn mainly related to the acquisition of the HSF
Logistics Group.
At year-end 2021, the logistics network deployed 6.5k
trailers, 2.9k containers, and 1.1k trucks. The majority of
this equipment was leased.
The cost of leasing transport equipment increased in 2021
driven by higher demand as the average number of trip days
for equipment rose due to Brexit and supply chain
bottlenecks. A higher share of transport equipment may be
purchased in 2022, rather than leased, to ensure cost-
efficiency.
In 2021, a new warehouse was opened in Borås close to
Gothenburg. The number of warehouses are planned to grow
in 2022 and 2023 in response to high demand for storage
and related services. The warehouses will all be leased for
periods of up to 10 years.
ESG development
The demand from customers for sustainable logistics
solutions continued to increase in 2021. Sustainability is
becoming a key selection criteria for awarding tenders for
some customers.
Different technologies are emerging to de-carbonise
haulage. For short-haul trips, electric trucks are an option,
while sustainable fuels, such as hydrogen, could be more
suitable for long-haul trips. The 125 electric trucks ordered
for delivery in 2022-23 are expected to be deployed for
short-haul trips in our network. Preparations for
deployment are ongoing, including analysis of customer
needs, flow of goods within different regions as well as the
current and future charging infrastructure.
Further actions to de-carbonise across locations include
installation of solar panels on warehouses, and investments
in first generation reefer trailer and containers powered by
solar and electricity. In addition, HVO is increasingly used to
fuel trucks and other equipment used in warehouses and
distribution centres.
The integration of the HSF Logistics Group brings
competencies regarding reusable packaging that can be
applied to the existing cold chain activities. It also brings a
"The demand from
customers for
sustainable logistics
solutions continued
to increase in 2021."
Logistics Division, DKK m
2021 2020 ∆ ∆ %
Revenue
7,155 5,301 1,854 35.0%
EBITDA before special items 593 462 131 28.4%
Profit/loss on disposal of non-current assets, net
-1 3 -5 -143.8%
Depreciation and impairment
-322 -292 -30 10.3%
EBIT before special items
269 173 96 55.6%
EBIT-margin before special items, %
3.8 3.3 0.5 n.a.
Special items, net
2 -12 14 n.a.
EBIT
271 161 110 68.6%
Invested capital, average
2,520 1,613 907 56.2%
ROIC before special items, %
8.6 8.5 0.1 n.a.
Average number of employees 2,774 2,112 662.0 31.3%
Units, '000
544 525 18.8 3.6%
40
DFDS Annual Report 2021
Management review
26
supply of packing that can be utilised better in the larger
network. By using reusable packaging for transporting
mainly meat products, single-use packaging can be avoided
which reduces resources and emissions.
The target for gender diversity is a total workforce female
gender ratio of 30%. In 2021, this ratio was 20% in the
Logistics Division, including a 16% ratio of female
managers. There is, however, a high level of variance in
ratios for the office and non-office workforces. In offices, the
female gender ratio was 38%, and 18% for managers, while
the non-office ratio was 5%, and no female managers. In the
coming years, the focus on improving the ratio of female
managers in non-office positions will have the highest
priority.
The land-based H&S organisation was re-organised in 2021.
A large number of smaller de-centralised H&S organisations
were integrated in a divisional framework to improve
alignment and anchoring of the DFDS Safety First culture
across all locations.
HSF Logistics Group - integration and financial impacts
The integration plan is focused on five key areas:
• Commercial: Opportunities for expanding customer
relationships and cross-selling driven by a stronger joint
customer offering
• Operations: Creation of one joint equipment pool,
including plastic box pallets, and one joint haulage
organisation. Optimise capacity utilisation of combined
ferry and logistics network
• Procurement: Scale benefits related to equipment and
services
• IT: DFDS systems to cover all applications and
infrastructure
• Business support: Integration of support and back-office
functions.
The majority of the integration is expected to be completed
during 2022, except for the IT integration that is expected to
take longer to complete. The organisational integration was
completed in 2021. Acquisition costs amounted to
DKK 29m in 2021 reported under Special items.
Annual financial integration synergies, mainly from
operation, procurement, and process integration are
targeted to amount to around DKK 75m with a full run-rate
impact from the end of 2023. Part of the impact is expected
to be reported in the Ferry Division.
Digitisation
The share of digital customer bookings on the DFDS Direct
platform was boosted by an introduction of online
onboarding along with a new approach to customer
integrations. Customers are now offered a standard EDI
solution with a very short lead-time, alongside API and
custom EDI connections. Overall this means that more than
half of our customers now book digitally.
To support the new customs clearance services, a wave of
new integrations were introduced, including the ability to
upload and validate customs documentation while booking.
Logistics industry and market trends
This section reviews current topics of strategic relevance for
the logistics industry and its growth prospects.
Brexit
Brexit triggered an introduction of customs clearance and
related services as freight customers sought assistance to
comply with the requirements of the new UK-EU trade
agreement that came into effect from the beginning of
2021.
The new rules and procedures increased the number of trip
days for freight units and lowered volumes, particularly in
the first quarter of 2021. Initially this led to shortages of
transport equipment and later in the year, as volumes
picked up, truck driver shortages also emerged. In turn, this
led to periods with congestion in freight ferry ports as
trailers were picked up at a slower pace than the inflow of
trailers.
Several new Brexit rules and procedures have yet to be
implemented by the UK in 2022 and some teething issues
may occur during the year.
Supply chain bottlenecks
The bottlenecks in global supply chains that started to
emerge towards the end of 2020 spread to intra-European
trade during Q2 2021. Negative impacts peaked in Q3 2021
as costs for both logistics services and goods in general
increased considerably as did delivery lead times. The
impact of the bottlenecks were most visible in the UK as
Brexit and Covid-19 also contributed to the disruption of
supply chains. The bottlenecks eased during Q4 2021 in
Europe, including the UK.
41
DFDS Annual Report 2021
Management review
27
Logistics services are provided on spot and contract terms
with the latter often used for larger and longer term
volumes. The bottlenecks have put more focus on short-
term cost compensation mechanisms for contracted
volumes as contract periods can be up to 12-18 months. In
addition, supply chain reliability has become of higher
interest to buyers of logistics solutions.
Supply chain bottlenecks may resurface in 2022 but likely
at a lower level than in 2021 as market participants are
better prepared. In addition, both Brexit and Covid-19 are
expected to contribute less to bottlenecks in Europe than in
2021.
EU Mobility Package
The aim of the EU Mobility Package is to align the
governance, administration, and operations of the road
transport industry across all EU member states.
The package was adopted in July 2020 and new rules for
driving and rest time were implemented in August 2020.
Rules regarding posting of drivers and manual registration
of border crossings were implemented 2 February 2022, and
rules concerning cabotage and access to transport markets
were implemented 21 February 2022.
The new rules are expected to improve working conditions
for truck drivers which could contribute to making the
profession more attractive. The package will, however, also
increase the cost of road transport as the new rules are
expected to reduce capacity in the market as it will become
more demanding for smaller hauliers to operate across the
EU.
Competition
There was no material changes to the competitive
landscape in northern Europe during the year, although
consolidation of the still quite fragmented logistics market
continues. Market participants are a mix global or pan-
European logistics companies and smaller and more
regional companies specialised in geographic corridors,
transport modes, and/or customer segments.
Circular logistics
Circularity means that a product is created with its own
end-of-life taken into account and is gaining ground as a
tool to develop a more sustainable logistics operations. In a
circular economy, once the user is finished with a product, it
goes back into the supply chain instead of being dumped in
a landfill or incinerated. The circular economy offers
opportunities for logistics companies to change their role
and business model, and to innovate together with
customers and partners. The mindset is not new to DFDS as
we strive to fill trailers to minimise empty running,
including securing back-loads.
To develop more resource-efficient supply chains for
customers based on circularity, among other things, two
new positions were established in 2021: a Circular Lead and
a Head of Sustainable Logistics.
42
DFDS Annual Report 2021
Management review
28
Transition to green haulage
To de-carbonise HGV (Heavy Goods Vehicles) road
transport, the supply of green electricity and hydrogen
needs to be expanded. The public charging infrastructure for
electricity and hydrogen likewise needs to be scaled up.
Economic incentives to support green transport, and
conversely extra costs for fossil fuel road transport, are also
expected to emerge to accelerate de-carbonisation.
Business unit performance
Additional information on business unit performance is
available from quarterly reports, link.
Dry Goods
Revenue increased 18% to DKK 5,166m in 2021. The
increase was driven by 9% higher volumes for forwarding
and specialised transport as activity recovered from the
Covid-19 lockdowns that reduced volumes in 2020. In
addition, revenue was increased by raised prices to cover
rising cost levels for haulage due to supply chain
bottlenecks. Contract logistics revenue also increased as
demand for warehousing and other logistics services was
boosted by the bottlenecks. Moreover, revenue was
increased by the introduction of customs clearance services.
EBITDA before special items increased 4% to DKK 312m as
the positive impact from higher activity was offset by lags
in cost coverage and traffic imbalances from disruption of
production flows, especially in the automotive sector.
The average invested capital decreased 10% to DKK 1.0bn
in 2021. ROIC increased to 10% from 7% in 2020.
Cold Chain
Revenue increased 91% to DKK 2,669m in 2021 mainly due
to the acquisition of HSF Logistics Group consolidated from
14 September 2021. The revenue increase of the existing
business was mainly driven by raised prices to cover rising
cost levels for haulage and other operating costs due to
supply chain bottlenecks. Moreover, revenue was increased
by the introduction of customs clearance services.
EBITDA before special items increased 75% to DKK 281m
mainly due to the acquisition of HSF Logistics Group.
The average invested capital was more than doubled to
DKK 1.5bn in 2021 likewise due to the acquisition of HSF
Logistics Group. ROIC decreased to 8% from 11% in 2020
following the increase in invested capital.
Business unit key figures
Dry
Goods, DKK m 2021 2020 ∆ ∆ %
Revenue
5,166 4,381 785 17.9%
EBITDA before special items 312 301 11 3.7%
EBIT before special items
125 103 22 21.4%
Invested capital, average
1,009 1,125 -116 -10.3%
ROIC before special items, %
9.8 7.5 2.3 n.a.
Units, '000
325.4 299.4 26.0 8.7%
Cold Chain, DKK m
2021 2020 ∆
∆ %
Revenue 2,669 1,400 1,269 90.6%
EBITDA before special items 281 161 120 74.5%
EBIT before special items
145 70 75 107.1%
Invested capital, average
1,512 488 1,024 209.8%
ROIC before special items, %
7.7 10.9 -3.2 n.a.
Units, '000
218.9 225.8 -6.9 -3.1%
43
DFDS Annual Report 2021
Management review
29
DRY GOODS COLD CHAIN
Business unit heads
Michael Bech (Continent), Allan Bell (UK & Ireland), Valdemar Warburg (Nordic)
Martin Gade Gregersen
Share of Logistics Division’s revenue, 2021
66%
34%
Forwarding
Door
-door transport of full & part load trailers and full load containers.
Key transport corridors:
•
Scandinavia <-> UK/Ireland
•
Scandinavia <-> Baltics/Eastern Europe
•
Scandinavia <-> Continent (mainly Belgium/France)
•
Continent (mainly Netherlands, Belgium, Germany, Czech) <-> UK/Ireland
•
Northern Ireland <-> UK
Sales offices across northern Europe, see map for details
.
Door
-door transport of full & part load trailers. Key transport corridors:
•
Scandinavia <-> Continent (mainly southern Europe, Poland, Benelux, France, and Germany)
•
Scandinavia -> UK/Ireland
•
Continent <-> UK/Ireland
•
Domestic Scandinavia, Germany, Benelux, and UK
•
Norway -> US/Asia (air freight)
Sales office across northern Europe, see map for details
.
Contract logistics & distribution centres
Contract
logistics:
•
Sweden – warehousing, cross docking terminals, and just-in-sequence transports
•
Benelux – warehousing, cross docking terminals, and just-in-sequence transports
•
Management contracts in Sweden, Ireland, and Netherlands
•
Warehousing across northern Europe, see map for details
Distribution
centres:
•
Netherlands (Nijmegen, Winterswijk)
•
Germany (Neuenkirchen-Vorden)
•
Denmark (Horsens, Padborg)
•
Scotland (Larkhall)
•
England (Liverpool, Grimsby)
Cross
-docking and distribution of meat, seafood, dairy, and other food products requiring
temperature
-controlled distribution.
Equipment (owned/leased)
•
4,397 trailers
•
2,342 containers
•
266 trucks
•
2,162 reefer trailers
•
573 reefer containers
•
878 trucks
• 177,466 reusable plastic box pallets
Customer segments
•
Manufacturers, mainly heavy industrial goods (automotive, paper), consumer goods,
and chemicals
•
Retailers
•
Food producers of meat, seafood, vegetables, and fruit
•
Aquaculture producers
•
Retailers
Primary competitors
•
Blue Water
•
DHL
•
DSV
•
Green Carrier
•
LKW Walter
•
NTEX
•
NTG
•
Schenker
•
Short-sea container carriers
•
ACS&T Logistics
•
Blue Water
•
DSV
•
Nagel
•
NTG
•
STEF
•
XPO Logistics
•
Yearsley Food
44
DFDS Annual Report 2021
Management review
Electricity
Electrolysis
Ammonia
Ammonia fuel
Ammonia plant
Hydrogen
Green fertiliser
Green transport corridors of tomorrow
Sustainable fuel
availability
Fuel type Green ferries & trucks Fuel availability Biodiversity
Before ferries can sail over longer distances
on renewable electricity, for example
from wind mills, it needs to be converted
to liquid fuel as either ammonia, hydrogen,
r methanol, which then can be stored in
tanks onboard.
To produce the quantities of energy
required by ferries, we need to significantly
increase the production of sustainable
energy. Secondly, the future providers of
renewable fuels need to invest and build
plants to produce the fuels – ideally in
locations close to ports. Thirdly, the fuel
distribution from plant to ferry needs to
be developed.
To kickstart the transition to green
fuels, we must partner with each other
as huge investments are required by all
stakeholders.
The price of sustainable fuels is today
3-4 times higher than fossil fuels and less
energy efficient as well. Scale and a much
larger supply of renewable electricity
are therefore required in sustainable fuel
production to lower pricing to reasonable
levels.
Producers supplying fertiliser to farms
in the green transport corridor envisaged
between Denmark and the UK, can also
add to demand, and thereby scale, as
they use ammonia in their production.
45
DFDS Annual Report 2021
Management review
30
Responsible Employer
framework
Female ratios increasing
across DFDS with two
percentage points on both
land and sea
Strengthening the land-based
Health & Safety organisation
A caring employer supports growth and wellbeing
DFDS is transforming into a diverse and carbon neutral
company. We believe that putting people first is a way to
attract and retain the diverse workforce we need to
successfully transform our company and industry. We need
people with different perspectives and experiences for the
company to develop sustainably. We prioritise building a
strong internal culture where people know that they are
valued for who they are and the competencies and
experiences they bring with them.
Change is constant
Nothing stands still for long in our industry. This requires
our organisation to constantly adapt and expand. In 2021,
this was partly due to macroeconomic challenges like
Brexit and supply chain shortages, but it was also a
consequence of our strategic decision to grow through
acquisitions.
As we expand, we need to ensure that our employees are
equipped to accommodate the changes taking place.
Resilience in the face of change and using modern
technologies to collaborate and work smarter are necessary
People
Head of division
Anne
-Christine Ahrenkiel
Business areas
•
Land based HR
•
Crewing
Countries of employment
22
Employees
8,
874
Average f
ull time
equivalents
Female ratio
24%
46
DFDS Annual Report 2021
Management review
31
skills at DFDS. Our growth strategy also requires us to focus
on recruiting, developing, and retaining bright minds, and
together learning what it takes to successfully integrate our
new companies to work and act as one DFDS.
ESG framework is a tool for change
Our ESG framework is the People’s Division’s main
instrument for change. It enables us to set ambitions and
track progress on becoming an even more attractive,
diverse, and inclusive workplace. We are particularly fond of
the ESG framework as we believe it fits well with the
current trends of making people and environmental
advocacy a priority and making companies an instrument
for sustainable societal development.
A constant eye on employee wellbeing
We use our new employee engagement survey MyVoice as a
tool to help take the temperature of the organisation and
understand how people are doing. By increasing the
frequency of internal surveys and tailoring them for specific
issues, we can keep a constant eye on what employees
deem important and where to focus efforts to improve. The
first digital group-wide survey launched in 2021, and the
response rate was on par with the global transportation
industry benchmark.
Room for everyone to be
We are part of an industry that is historically undiverse.
From non-office workers like drivers and
terminal/warehouse workers to IT and engineering staff,
there are often a majority of males in our workforce. Except
for the People and Finance Divisions, female leaders are a
minority throughout our company, too. We are working to
promote and change the face of the industry through a
dedicated and structured approach to diversity and
inclusion. This includes training sessions, toolboxes and
efforts to raise awareness and to make more bias neutral
decisions.
In terms of gender, we maintain our target of 30% minority
representation in the company. Research shows that this is
the percentage at which a group is no longer a minority but
an integrated part of the whole. In 2022 we will evaluate
the target from a sea based perspective and consider if a
vessel by vessel approach will be a suitable approach going
forward.
We acknowledge that our gender ratio most likely will drop
following each acquisition due to many companies in our
industry traditionally being male dominant. We accept this
as a premise of doing business in the transport and logistics
industry and understand that it requires us to work even
harder to ensure that our unwavering attention to diversity
and inclusion is transferred to new colleagues as part of our
DFDS values.
We want to ensure equal pay for equal work and have in
2021 completed a structured analysis to identify any
unintended pay gaps across the business, starting at the HQ
in Denmark. The process is now being incorporated in annual
salary reviews, through awareness building and guidelines
for responsible leaders.
Room for everyone to grow, professionally and personally
As our business and organisation grow, we need to secure a
pipeline of talented people to step up and fill positions as
they open. We want to give our people the tools to develop
and do this through engaging leaders as talent managers,
formal and informal training programmes of leaders and
employees, group-wide mentoring initiatives and
transparency.
We also want to help our employees grow personally. We
try to spark a strong internal culture that encourages
people to help and volunteer in their teams and local
communities. From fundraising for local charities to
launching a group-wide LGBTQ+ network, we are proud of
all our colleagues who go out of their way to make a
difference.
Staying safe and sane, also during the pandemic
Looking after the well-being of our people includes
awareness and support of their mental health. We increased
communication to our colleagues both on business-related
issues (to enable them to stay informed at a distance) as
well as on more personal matters, as Covid-19 forced us all
to balance working from home with dealing with the
insecurity of not knowing how long isolation would last. As
a seafarer’s work sometimes entails long absences from
family and friends, they are more prone to experience
mental health issues. At DFDS, seafarers make up half of
our employees. Some of them have been impacted by the
pandemic by being unable to get home or return to work
due to ongoing travel restrictions. They have also been
moved around to work on different vessels than what they
have been used to. As an employer, we did everything we
could to give them the support, guidance, and assistance
they needed in these difficult times. We continuously
worked with Shipowners' Associations, unions, and other
industry bodies during the pandemic to ensure safe crew
mobility across borders. In some cases, we interacted
directly with governments. We have managed to keep our
operations going without disruption resulting from Covid-19
related illness.
"Research shows
that at 30%
representation a
group is no longer a
minority but an
integrated part of
the whole”
47
DFDS Annual Report 2021
Management review
32
In 2021, we have introduced more and maintained several
initiatives to support our employees’ mental health. One
example is DFDS UK and Irelands’ partnership with Mental
Health First Aid England, which allows colleagues to
become trained Mental Health First Aiders, teaching the
groundwork for helping individuals who are on the verge of
a crisis point or need to talk. We now have over 50 trained
colleagues across all UK & Ireland sites, with more courses
on the way.
Safeguarding human rights
To ensure that our employees can grow, we must provide
fair working conditions across all locations. We define a
responsible employer as one who respects human rights and
seeks to exceed them. As a responsible employer, we are
fully committed to our responsibility to respect human
rights as defined by the UN Guiding Principles on Business
and Human Rights.
We have clearly articulated responsible employer standards
in our Labour Code of Conduct (LCOC). The LCOC states our
approach to and policies for topics like wages, working
hours, discrimination, and child labour.
Zero-tolerance on discrimination, bullying, and harassment
We believe in the importance of equal treatment of all
employees regardless of their background. All employees
should feel respected and be treated with dignity. All
managers receive ongoing training in diversity and inclusion.
We have a designated toolbox available to all employees
covering themes like sexual harassment prevention, bias
identification, and fair recruitment practices.
We show zero tolerance towards any harassment or abuse.
No employee should ever face humiliation, physical or
mental abuse, sexual harassment, or any other form of
mistreatment. Since 2015, the company has provided the
possibility of reporting, anonymously or not, any concerns
over material breaches of acceptable behaviour by or within
the company through a whistleblower line hosted by a third
party. It is open for reporting by employees as well as third
parties and can be accessed through dfds.com. All reports
are investigated thoroughly, and we are committed to
making appropriate follow-up actions. We ensure that the
follow-up actions are fair to all parties involved and reflect
the severity of the issue. The audit committee receives
regular updates on current reports made as well as the
findings coming out of those reports.
Health and safety first
Operating a business where 45% of our employees work in
high-risk environments requires us to continuously assess
and improve our overall health & safety performance.
In 2021, we, unfortunately, experienced a fatality in
connection with our operation in Séte, France, where one of
our seafarers tragically lost his life in an accident during the
loading and discharge of one of our vessels. The accident
has been investigated in detail, leading to several learnings
and actions. We have strengthened our local Health &
Safety organisation in France following this tragic accident
and increased our efforts to keep employees safe and avoid
re-occurrence. Furthermore, we are looking into applying
new technologies to reduce risks in our terminals.
Unfortunately, our LTIF (Lost Time Injury Frequency) did not
improve in 2021, in part due to better reporting procedures
resulting in more accurate data. On the positive side, the
incidents are becoming less severe, with fewer days lost
from each incident.
To strengthen our land-based health & safety focus, we
have implemented a global health & safety department to
raise awareness and enforce additional preventive actions
to reduce our health & safety risks. Developing a strong
health & safety culture will be part of this.
foto
48
DFDS Annual Report 2021
Management review
Results
50 Financial review
57 ESG review
49
DFDS Annual Report 2021
Management review
33
Revenue up 28% to
DKK 18bn
EBITDA up 25% to
DKK 3.4bn
Freight earnings resilient
Reporting structure
DFDS’ activities are organised in two divisions: The Ferry
Division operates five business units, and the Logistics
Division operates two business units. Non-allocated Group
items consist of corporate costs not allocated to either
division.
Financial results
Revenue
Revenue increased 27.9% to DKK 17,869m in 2021. The
increase was mainly driven by higher revenue from freight
activities.
The Ferry Division’s revenue increased 25% to
DKK 11,806m following higher revenue in all business units,
except for the Passenger business unit. The growth was
driven by a recovery in freight volumes from the Covid-19
lockdowns in 2020 as well as market growth, especially in
the Mediterranean business unit. Revenue from additional
port terminal and other services, partly linked to supply
chain bottlenecks, also increased as did bunker surcharges
due to a higher oil price. In addition, three new freight ferry
routes were opened, and a capacity standby agreement was
entered into with the UK DfT.
Revenue from passenger ferry services remained on level
with 2020 as travel restrictions were in place for most of
the year.
The Logistics Division’s revenue increased 35% to
DKK 7,155m mainly driven by the acquisition of the HSF
Logistics Group consolidated from 14 September 2021, and
considerable rate increases to cover rising costs for external
suppliers of transport services, such as haulage, as well as
rising wages for drivers. The latter increases were due to
supply chain bottlenecks, including truck driver shortages.
EBITDA before special items
Operating profit before depreciation, EBITDA, and special
items increased 25% to DKK 3,411m.
Ferry Division’s EBITDA increased 23% to DKK 2,852m
primarily due to higher earnings in the Mediterranean and
Financial review
%
50
DFDS Annual Report 2021
Management review
34
North Sea business units as freight volumes recovered from
the lockdowns in 2020. Mediterranean also benefitted from
high growth in Turkish exports. Passenger earnings across
business units carrying passengers – Channel, Passenger,
Baltic Sea - remained on level with 2020 due to continued
travel restrictions.
Logistics’ EBITDA increased 28% to DKK 593m. The majority
of the increase was due to the acquisition of the HSF
Logistics Group. The earnings of many of the existing
activities were positively impacted by the recovery in
activity from 2020 result. Supply chain bottlenecks did,
however, entail considerable cost increases that were not
fully compensated by price increases.
The Group cost of Non-allocated items was DKK -35m
compared to DKK -45m in 2020.
Depreciation, impairment and EBIT
Total depreciation and impairment increased 11% to
DKK 2,087m. The increase was mainly due to depreciation
of additional chartered freight ferries deployed on new
routes and to increase the route network’s freight capacity.
Moreover, the acquisition of the HSF Logistics Group
increased depreciation.
The Group’s EBIT before special items increased 53% to
DKK 1,313m.
Special items and EBIT
Special items in 2021 was a net income of DKK 34m
following accounting gains on sale of assets and a minority
shareholding. This was partly offset by integration and
restructuring costs. More information on special items is
available in Note 2.6 on page 92.
The Group’s EBIT after special items was DKK 1,348m, an
increase of 82%.
Financing
The net cost of financing increased 1% to DKK 278m
compared to 2020. The net interest cost increased 11% to
DKK 283m mainly due to an increase in NIBD following the
acquisition of the HSF Logistics Group. There was a positive
variance on currency adjustments of DKK 12m.
Tax and the annual result
The ferry activities of the DFDS Group are covered by
tonnage tax schemes in Denmark, Norway, the Netherlands,
Lithuania, France, and Turkey. The tax on the annual profit
amounted to a total cost of DKK 94m.
The net profit for the year was DKK 976m, an increase of
121% compared to 2020.
Capital
Assets and invested capital
Total assets amounted to DKK 30.7bn at the end of the
year, an increase of 14% compared to 2020 primarily due to
the acquisition of the HSF Logistics Group.
Net working capital was reduced to DKK -98m at the end of
2021 from DKK 132m at the end of 2020. The decrease was
mainly due to longer payment terms for bunker oil.
At year-end 2021, the invested capital had increased 15%
to DKK 25.4bn from year-end 2020 mainly due to the
acquisition of the HSF Logistics Group with an enterprise
value of DKK 2.5bn. Calculated as an average, the invested
capital increased 4% to DKK 23.3bn in 2021.
Revenue
DKK m
2021 2020 ∆ % ∆
Ferry Division
11,806 9,445 25.0 2,360
Logistics Division 7,155 5,301 35.0 1,854
Eliminations etc.
-1,092 -776 40.7 -316
DFDS Group
17,869 13,971 27.9 3,898
EBITDA before special items
DKK m
2021 2020 ∆ % ∆
Ferry Division
2,852 2,315 23.2 538
Logistics Division 593 462 28.4 131
Non-allocated items
-35 -45 -22.3 10
DFDS Group
3,411 2,732 24.9 679
EBITDA-margin, % 19.1 19.6 n.a. -0.5
51
DFDS Annual Report 2021
Management review
35
55% of the invested capital consisted of owned ferries and
other ships and 7% consisted of owned port terminals, land
and buildings and cargo carrying equipment. 22% of the
invested capital was goodwill and other intangible assets.
The net working capital was DKK 0.1bn.
The assets deployed in the Logistics Division mainly include
cargo carrying equipment such as trailers and containers as
well as warehouses and distribution centres.
The Ferry Division’s invested capital was DKK 20.5bn at
year-end 2021 while Logistics Division’s invested capital
was DKK 4.2bn.
Debt
At year-end 2021, interest-bearing debt excluding lease
liabilities had increased 6% to DKK 10.7bn compared to
year-end 2020. The increase was mainly due the acquisition
of the HSF Logistics Group that was financed by use of cash
funds and debt. At year-end 2021, lease liabilities had
increased 35% to DKK 3.6bn following the chartering of
additional ferries.
In 2021, bank loans and mortgaged ship loans amounted to
66% of total interest-bearing debt while lease liabilities
amounted to 25% and corporate bonds amounted to 9%.
Net interest-bearing debt increased 19% to DKK 13.5bn at
year-end 2021.
Capital structure
The leverage of DFDS’ capital structure is measured as the
ratio of net interest-bearing debt (NIBD) to operating profit
before depreciation (EBITDA) and special items. Target
leverage is a NIBD/EBITDA-ratio between 2.0 and 3.0. At
year-end 2021, the NIBD/EBITDA-ratio had decreased to 3.7
compared to 4.2 compared at the end of 2020. The ratio
includes a pro forma EBITDA for HSF Logistics Group for the
last twelve months.
DFDS’ Board of Directors regularly assesses the capital
structure in view of current and expected future earnings as
well as future investment requirements, including
acquisitions.
The capital distribution policy, distribution in 2021, and
distribution proposal for 2022 are reported on pages 68-69.
Equity
Equity amounted to DKK 11,554m at year-end 2021,
including non-controlling interests of DKK 108m. This was
an increase of 2% compared to year-end 2019. Total
comprehensive income for 2021 was DKK 966m. There were
no material transactions with owners in 2021.
The equity ratio was 38% at year-end 2021 compared to
39% at year-end 2020.
Impairment test
Based on the impairment tests performed in 2021 of the
Group’s non-current intangible and tangible assets, no
material impairments or reversals were recognised. The
impairment tests are described in greater detail in Note
3.1.5 on page 103-104.
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
0
5
10
15
20
25
2017 2018 2019 2020 2021
(Times)
DKK bn
Revenue and invested capital
Revenue
Average invested capital
Turnover rate, invested capital
0
200
400
600
800
1,000
1,200
1,400
Q1 Q2 Q3 Q4
DKK m
EBITDA before special items per quarter
2019
2020
2021
52
DFDS Annual Report 2021
Management review
36
ROIC
Return on invested capital and return ambitions
The Group’s ROIC before special items was 5.2% in 2021
compared to 3.5% in 2020.
The level of the ROIC was also in 2021 reduced by a
decrease of DKK 1bn in passenger earnings compared to the
latest pre-Covid-19 year in 2019. The lower passenger
earnings reduces ROIC by around four percentage points.
The increase of the ROIC in 2021 was to a large extent due
to an improvement of Mediterranean’s ROIC from 2% in
2020 to 6% in 2021. Mediterranean’s average invested
capital of DKK 9.4bn in 2021 amounted to 40% of the
Group’s total capital.
DFDS’ return target is a minimum ROIC of 8% before special
items. The target rate is used as a threshold rate for
investments, including acquisitions. DFDS’ weighted average
cost of capital is estimated at around 6%.
Return on invested c
apital (ROIC) 2021
Average
invested
capital, DKK m
ROIC before
special items,
%
DFDS Group 23,324 5.2
Divisions & business units
Ferry Division 20,442 5.3
North Sea 6,362 10.6
Mediterranean 9,375 6.3
Channel 1,939 -1.2
Baltic Sea 1,600 14.0
Passenger 677 -72.6
Non-allocated 489 23.5
Logistics Division 2,520 8.6
Dry Goods 1,009 9.8
Cold Chain 1,512 7.7
Group Non-allocated items 362 n.a.
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2017 2018 2019 2020 2021
DKK bn
Adjusted free cash flow, FCFF
0%
25%
50%
75%
100%
2017 2018 2019 2020 2021
Capital structure
Equity and deferred tax
Net interest-bearing debt
%-share of invested capital
53
DFDS Annual Report 2021
Management review
37
The ROIC was in 2021 above 8% in four of eight business
units: North Sea, Baltic Sea, Nordic, and UK & Ireland. The
severe drop in passenger volumes due to Covid-19 reduced
the ROIC of the Channel and Passenger business units to
below 8%. Returns are expected to improve as passenger
volumes gradually recover. Mediterranean’s ROIC reached
6% in 2021 and 9% excluding goodwill. The business unit’s
invested capital was increased by a considerable capacity
expansion due to a large new and long-term customer
agreement with effect from the beginning of 2019.
Mediterranean’s ROIC is expected to increase towards the
return target in the next 2-3 years. Continent’s ROIC was
negatively impacted by primarily imbalances in automotive
flows in 2021.
The financial ambition of the Win23 strategy is to achieve a
ROIC of 10% in 2023.
Cash flow and investments
Cash flow
The gross cash flow from operations was DKK 3,536m and
DKK 2,607m including payment of lease liabilities and lease
interest. Following a cash flow from investment activities of
DKK -3,210m, the free cash flow (FCFF) was positive by DKK
274m and negative by DKK 655m including payment of
lease liabilities and lease interest.
The cash flow from financing activities was negative by DKK
359m in 2021, including payment of lease liabilities of DKK
834m and net proceeds of DKK 413m from loan financing.
The net cash flow of 2021 was negative by DKK 360m and
cash and cash equivalents decreased to DKK 902m at year-
end.
Investments
Net investments in 2021 amounted to DKK 3,210m of which
DKK 1,765m was related to acquisitions. Net investments in
ferry newbuildings and sale of ferries amounted to DKK
500m. This included hedging gains related to the delivery of
two newbuildings. The remaining operating investments of
DKK 945m consisted mainly of ferry upgrades and dockings,
port terminals, cargo carrying equipment, software and
other items.
Parent company key figures
The revenue of the parent company, DFDS A/S, was
DKK 8,250m in 2021 and the profit before tax was
DKK 106m.
Total assets at year-end amounted to DKK 18,629m and
the equity was DKK 9,355m.
Bunker and financial risks
Bunker risk
The cost of bunker was DKK 2.4bn in 2021 and DKK 1.3bn
net of income from bunker surcharges and other hedging.
Around 93% of the bunker consumption is commercially
hedged in ‘normal’ years through bunker clauses (BAF:
bunker adjustment factor) in freight customer contracts.
Hedging of USD is included in the BAF. The BAF-coverage
lags the actual cost by 1-2 months as the surcharge is
Invested capital
DKK bn, year-end
-2
0
2
4
6
8
10
12
14
16
18
20
22
24
26
28
2020 2021
Net working capital Goodwill
Other intangible assets Other assets
Leased assets Cargo carrying equipment
Terminals, land and buildings Ferries and other ships
54
DFDS Annual Report 2021
Management review
38
adjusted on a monthly basis through the year. The
remaining consumption is consumed on passenger routes
and financially hedged as deemed appropriate.
In 2022, the consumption of bunker by the ferry fleet is
expected to amount to around 850,000 tons. A price change
of 10% compared to the price level at year-end 2021 is
expected to impact operating profit by around DKK 8.9m in
2022.
Financial risks
DFDS is exposed to a range of financial risks related
primarily to changes in exchange rates and interest rates.
DFDS is also exposed to liquidity risks in terms of payments
and counterparty risk. These risks are reported in Note 4.1
on pages 111-114.
55
DFDS Annual Report 2021
Management review
Green transport corridors of tomorrow
Biodiversity in a green
transport corridor
Fuel type Green ferries & trucks Fuel availability Biodiversity
Awareness of the impact of our ferry
and logistics activities on biodiversity is
growing. A primary focus area for us is
marine life.
Fossil ferries emit noise and vibrations
into the water that impact marine life.
As the new engine technologies are likely
to be electric, new ferry designs could
lessen this impact.
Above the water, the transition to
sustainable fuels will also bring cleaner
air which in itself will be a positive impact
on all forms of life.
Other opportunities to support biodiversity
are emerging from the insights created by
the partnership approach to the envisaged
green corridor between Denmark and the
UK. An example is related to the large
quantities of green feed farmers need for
their animals. This could be based on
seaweed which could have ideal conditions
to grow around offshore wind mills.
56
DFDS Annual Report 2021
Management review
39
3% reduction on CO2 per GT
mile on own fleet
Female ratios increased with
two percentage points on
both land and sea
Three additional governance
measures to ESG KPIs
Environmental performance
In 2021, we included scope 3 emissions to the GHG
inventory, and our emissions of CO2e were estimated to
total 3,460,000 tonnes, of which 2,551,000 tonnes are
scope 1 and scope 2 emissions. They have increased 26%
compared to 2020 and 13% compared 2019 due to
increased business activities. But as the absolute emissions
have increased our carbon intensity per GT mile has
decreased. For owned ferries the carbon intensity was
improved by 3% compared to 2020 and by 6% compared to
2019 as measured by emissions per GT mile. Including
chartered ferries, carbon intensity decreased 1% compared
to 2020 and improved 4% compared to 2019.
The variance in energy efficiency between owned and
chartered ferries is due full control of operations and
maintenance of owned ferries. The achieved and targeted
emission reductions are aligned with the Climate Action
Plan’s target of a 45% reduction in CO2 per GT mile in 2030
from a 2008 baseline.
The scope 3 emission analysis indicates that 64% of the
scope 3 CO2e emissions are related to the upstream
production of the fuel used in our operation. 26% is related
to third party suppliers within transport – both on water,
road, and rail. This is a clear indicator from a materiality
perspective, that our focus on reducing emissions from our
direct customer services – intermodal transport – is where
we have the biggest impact.
Social performance
The female gender ratio has increased across land and sea
and the different organisational levels. In the land-based
organisation and across all employees with no management
responsibility, we are closing in on our target of 30%
minority representation in 2023, with 29% and 27%,
respectively. Both are, however, expected to decline from
2022, when the male-dominant HSF Logistics Group is
included in the reporting.
Our main focus going forward will be to increase the ratio of
female managers – both in office- and non-office based
positions.
ESG review
All ESG data for 2021
excludes the acquisition of
HSF Logistics Group.
This
data will be included from
2022.
57
DFDS Annual Report 2021
Management review
40
Unfortunately, Health & Safety performance decreased in
2021 on both land and sea. This was most significant in the
land-based operation, where the LTIF increased to 7.4
compared to 5.9 in 2020. More focus on and follow-up on
reporting is part of the reason for the increase, but the
actual performance is still not satisfactory.
A tragic accident on board a freight ferry in the Port of Setê
also resulted in a Turkish seafarer losing his life due to
injuries.
Governance performance
In 2021, we added three additional measures to the ESG
KPIs: Board independence, board nationality, and reported
whistleblower cases. All three have been part of our annual
reporting for several years, but for the first time, it is
included in the ESG overview, including data from 2018 and
onwards.
KPIs related to the Board have been stable for the last four
years. The female gender ratio is above 30%, five out of six
elected directors are independent, and one is non-Danish.
The attendance at board meetings increased to a maximum
of 100% in 2021.
Since initiation of tracking the number of whistleblower
cases have increased each year. This is a natural
development as the number of employees is growing and
because we continue to communicate and emphasise the
importance of our different reporting channels for identified
breaches to our Code of Conduct and unwanted harassment
and behaviour.
1)
CO2e includes GHG emissions
from all 6 greenhouse gases:
carbon dioxide (CO2); methane
(CH4); nitrous oxide (N2O);
hydrofluorocarbons;
perfluorocarbons; and sulphur
hexafluoride (SF6)
Environment
CO2e emissions
Unit Target 2023 2021 2020 2019 2018
Scope 1 emissions (CO2e)
1
1,000 tonnes - 2,544 2,014 2,253 1,871
Scope 2 emissions (CO2e)
1
1,000 tonnes - 6.9 6.0 7.3 8.5
Scope 3 emissions (CO2e)
1
1,000 tonnes 910 - - -
Total CO2e emissions
1
1,000 tonnes - 3,460 2,020 2,260 1,879
Energy efficiency
CO2 emissions per GT mile (Own fleet) gCO2 12.4
13.0 13.4 13.9 -
CO2 emissions per GT mile (Route network) gCO2 13.6 13.5 14.1 14.4
Social
Representation of women
Unit Target 2023 2021 2020 2019 2018
Total workforce % 30
24 23 25 23
At sea % 30 17 15 18 15
On land % 30
29 27 29 29
Senior management % 30
17 16 19 10
Managers % 30
14 13 18 -
Employees % 30
27 26 26 -
Safety at sea
Lost-time injury frequency (LTIF)
Incidents/
mill. hours 3.5 4.3 4.1 4.5 5.0
Safety on land
Lost-time injury frequency (LTIF)
Incidents/
mill. hours 5.0 7.4 5.9 6.7 3.8
Fatalities
- Colleagues Fatalities 0 (Annually) 1 0 0 0
- Contractors Fatalities 0 (Annually)
0 2 1 1
G
overnance Unit Target 2023 2021 2020 2019 2018
Board representation of women (AGM elected members) % 30
33 33 33 33
Independent directors (AGM elected members) % 83 83 83 83
Board nationality - non Danish (AGM elected members) %
17 17 17 0
Attendance at board meetings (all board members) %
100 96 94 91
CEO Pay ratio Ratio
35 27 29 36
Reported whistleblower cases Cases
29 24 18 16
58
DFDS Annual Report 2021
Management review
Corporate
governance
60 Governance practices
64 Risks and risk management
68 Shareholders
71 Board of Directors
73 Executive Management Team
74 Remuneration report summary
59
DFDS Annual Report 2021
Management review
41
DFDS is compliant with all
Danish corporate governance
recommendations
Five of the six shareholder-
elected directors are
independent and two are
female
Board of Directors
The Board of Directors is made up of six directors appointed
by the annual general meeting (AGM) of shareholders,
elected for a period of one year, as well as three directors
appointed by employees, elected for a period of four years.
Five of the six directors appointed by shareholders at the
most recent ordinary meeting are deemed independent
according to the Danish recommendations on good
corporate governance. Two of the six AGM appointed
directors are women.
The Board of Directors work in accordance with the
company’s articles of association, the rules of procedure of
the Board of Directors as well as an established annual
cycle of focus areas to ensure that all major governance
aspects are reviewed at least once annually. The annual
cycle also includes strategy activities: approval of strategic
priorities within for instance climate and diversity. The
Board of Directors also holds strategy review sessions
focusing on progress and achievements.
In 2021, we updated our sustainability priorities in an ESG
framework for a more targeted and integrated approach to
sustainability across the company. Governance of
sustainability in DFDS is anchored with the Board of
Directors and the Executive Management Team. They secure
executive ownership of the ESG agenda and involvement in
setting sustainability priorities and driving implementation.
They are also in charge of embedding sustainability in core
business processes. We assess risks, analyse, and
investigate relevant initiatives and adjust our actions as
needed to stay on track with our commitments.
The Chair of the Board of Directors undertakes an annual
review of the performance of the Board of Directors, most
recently with third party assistance. The composition of the
Board of Directors aims to ensure that competencies that
are key to the company’s performance are represented. Nine
board meetings were held in 2021, all with 100%
attendance.
Governance practices
"In 2021, we
updated our
sustainability
priorities in an ESG
framework for a
more targeted and
integrated approach
to sustainability
across the company."
60
DFDS Annual Report 2021
Management review
42
Board committees
The Board of Directors has established an audit committee,
a nomination committee, and a remuneration committee.
Each committee has three members.
Audit Committee: The purpose of the Committee is to assist
the Board of Directors in fulfilling its responsibilities relating
to the oversight of the quality and integrity of DFDS’
accounting, auditing and financial reporting, the
qualifications, independence, and performance of the
appointed Statutory Auditor, as well as compliance with
rules on non-audit services provided by the Statutory
Auditors.
The Committee consists of Anders Götzsche (Chair), Dirk
Reich, and Jill Lauritzen Melby. Anders Götzsche and Dirk
Reich are deemed independent. Anders Götzsche has special
competences in international management, board
experience and expertise in finance and accounting as well
as M&A. Dirk Reich has special competences in international
management, board experience and expertise in
international logistics activities. Jill Lauritzen Melby has
special competences in financial controlling.
A total of five meetings were held during 2021, all with full
participation. The main topics dealt with, apart from
recurring items, were monitoring of the HSF Logistics Group
acquisition, a deep-dive into the activities at the shared
service centre in Poznan, and the approach to enterprise risk
management.
Remuneration Committee: The purpose of the Committee is
to assist the Board of Directors in fulfilling its
responsibilities relating to the establishment, monitoring,
and adjustment of the remuneration policy including
incentive schemes. Further, the purpose of the Committee is
to ensure that the executive remuneration of DFDS at all
times complies with the remuneration policy as well as
regulatory and corporate governance requirements.
The Committee consists of Claus V. Hemmingsen (Chair),
Klaus Nyborg, and Marianne Dahl. All members are deemed
independent. Claus V. Hemmingsen has special competences
in international management and expertise in offshore
activities and shipping. Klaus Nyborg has special
competences in international management and board
experience from i.a. listed shipping companies and suppliers
to the shipping industry and expertise in strategy, M&A, and
risk management. Marianne Dahl has special competences
in international management and expertise within strategy,
digitalization, product development, and sales.
The Committee held three meetings in 2021 with full
participation, focusing on the following topics:
• Review of the annual wheel of the Committee
• Adjustment of benchmarks to compare executive
remuneration levels with relevant companies
• Review of gender pay gap analysis
• Recommendation of Executive Board
remuneration and Board fees
• Remuneration report for 2021.
Nomination Committee: The purpose of the Committee is to
assist the Board of Directors in fulfilling its responsibilities
relating to the oversight of the competences required of the
Board of Directors and the Executive Board and the
organisational structure of management bodies. Further, the
Committee assists in recruiting for the management bodies.
The Committee consists of Claus V. Hemmingsen (Chair),
Klaus Nyborg, and Marianne Dahl. All members are deemed
independent. Claus V. Hemmingsen has special competences
in international management and expertise in offshore
activities and shipping. Klaus Nyborg has special
competences in international management and board
experience from i.a. listed shipping companies and suppliers
to the shipping industry and expertise in strategy, M&A, and
risk management. Marianne Dahl has special competences
in international management and expertise within strategy,
digitalization, product development, and sales.
The Committee held two formal meetings during 2021 with
full participation, focusing on competences and succession
planning at board level as well as evaluation of the Board’s
work and performance. In addition, a number of informal
meetings were held in connection with recruitment of a new
Director to be proposed for election at the AGM in 2022.
More information on the three committees are available
here link
Board evaluation
Annually, the Board of Directors conducts an evaluation of
its composition considering the competencies needed to
perform its tasks, and of the cooperation between the Board
of Directors and the Executive Board.
In 2021, the evaluation was facilitated by an external
consulting firm by way of a written questionnaire directed
The corporate governance
polici
es listed below are all
available
on this web page:
https://www.dfds.com/en/a
bout/group/governance
-
and
-policies
More information on DFDS’
corporate governance
Statutory report on
corporate governance
DFDS’ statutes
Materials from DFDS’ most
recent AGM
Remuneration policy
Diversity pol
icy
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DFDS Annual Report 2021
Management review
43
to the Directors of the Board and the Executive Board. The
evaluation included, among other things, the Board of
Directors’ and the committees’ effectiveness and value
contribution, board composition and dynamics, the Chair’s
role, strategy development and implementation,
stakeholder relations, risk awareness, cooperation with the
Executive Board and on- and off boarding.
ESG framework
The ongoing transformation of DFDS also implies changes to
our corporate governance. Our work with environmental and
social topics is increasingly integrated into our business
strategies and operations. As part of the logistics and
transport sector, DFDS has a special responsibility to fulfil
ESG objectives, especially within climate and diversity. In
2021, we introduced our ESG framework. This framework is
our way of structuring issues we have already worked on for
years. By setting specific ESG goals, we make it clear that
doing business today is about more than just giving
shareholders a return on their investment. They are a key
part of running a sustainable business.
Each Executive Management Team member is responsible
for different areas within the ESG framework. But the ESG
framework cannot live in top management alone. We are
delegating ownership to all levels of management, setting
concrete goals for what needs to be achieved, and establish
follow-up structures to ensure sustained and
comprehensive change throughout the organisation.
Code of Conduct guides behaviour
DFDS' Code of Conduct (CoC) is a summary of our company
culture and values. It helps guide our expectations to each
other, shows the way, and is a key part of integrating new
colleagues into the organisation. The CoC follows the
principles laid out in the UN Global Compact and describes
what behaviours we emphasise and how employees should
respond to ethical issues. We work to ensure that all
employees know the CoC and use it as a guide to deal with
potentially sensitive issues. To ensure everyone can report
unwanted behaviour in a structured way, we have a clear
framework for reporting incidents. This can either be done
via managers, HR, the Executive Management Team, the
DFDS Whistleblower line, or on the vessels filing an MLC
Complaint. The MLC is similar to the Whistleblower line, but
only for vessels. Here seafarers can lodge a complaint in
case of non-compliance with legal dispositions, regulations,
or agreements pertaining to seafarers' rights.
29 cases were reported through the whistleblower line in
2021 - a slight increase from the 24 cases the year before.
We take all violations seriously and investigate every report
to learn from them and prevent future cases.
We take responsibility for the people in our supply chain
When we procure goods and services in DFDS it has an
impact on people working within our supply chain and on
our scope 3 CO2 emissions. To ensure that we address key
risks, including Human Rights and increase our sustainable
focus in the supply chain we have launched our Responsible
Procurement Programme. The programme consolidates a
range of both existing and new tools like Supplier Code of
Conduct, ESG performance and risk assessments for
suppliers and tools to measure scope 3 emissions in the
supply chain.
We welcome the recent EU Mobility package as a tool to
help the industry protect the human rights of workers by
regulating driving and rest periods, posting of drivers,
cabotage, access to the road transport industry, and
tachographs across EU member states.
Responsible ship recycling and construction
We have policies in place to determine what happens in the
rare case of us needing to recycle a ship. We have
developed quality standards based on protecting the
environment and making the recycling process safe. If we
need to recycle a ship, we will use an approved yard and
carry out the work in line with EU ship recycling regulations
and the principles of the International Maritime Organisation
(IMO) 's Hong Kong International Convention. The
Convention ensures that ships being recycled at the end of
their operational lives do not pose unnecessary risks to
safety, human health, or the environment.
When we begin developing new vessels, we assess the
materials (like steel) needed from a CO2 emission
perspective. With our first green vessel aimed to be in
operation by 2025, this is a high priority.
Data Ethics policy implemented in 2021
Being a transport and logistics provider, we use data to
maintain and improve customer experience and our
operational efficiency. We are committed to ensuring that
employees, customers and business partners can entrust us
with their data. We are determined to handle data
sustainably and with great care. We recognise that digital
development entails both responsibility and transparency.
Our Data Ethics policy sets a vision for working with data
ethically and is based on three principles: Security,
Confidentiality and Integrity.
"Each Executive
Management Team
member is
responsible for
different areas
within the ESG
framework."
62
DFDS Annual Report 2021
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44
Transparency and collaboration is key for progress
Collaboration is key to solving our industry’s challenges. We
need to share progress and share information to develop
sustainable transport and logistics.
We disclose data to improve and voluntarily disclose and/or
verify ESG data to rating agencies like the Carbon Disclosure
Project (CDP), Sustainalytics, and others. We believe that
standards are a tool to bring our industry in a more
sustainable direction. We support a range of frameworks for
responsible business and acknowledge the need to set
science-based targets to ensure that our climate ambitions
are aligned with the Paris agreement. We expect to develop
our own science-based targets in early 2022 when the
official methodology for maritime transportation is ready.
To improve industry collaboration and create a greener
direction for our sector, we are actively engaged in different
fora and channels. DFDS is part of the European
Sustainable Shipping Forum (ESSF). This group promotes
structured dialogue, technical knowledge exchange,
cooperation, and coordination between relevant maritime
industry stakeholders and the EU Commission. We also
participate in the IMO's Marine Environment Protection
Committee (MEPC). Through our participation in Interferry,
we support the interests of the ferry industry, as well as in
IMO institutions. We are also active members of relevant
national shipowners' organisations, especially in Denmark
and the UK. Collectively, shipowners' voices are represented
in ECSA (European Community Shipowners' Associations).
Lastly, we chair the Green Ship of the Future, an
independent non-profit organisation driven and financed by
members who want to explore the road towards emission-
free maritime transport.
63
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45
Risk management is an
integral part of DFDS’
management processes
Risks and opportunities are
regularly reviewed and
reported to the Board of
Directors for appropriate
responses and actions
Risk management governance structure
The Board of Directors is responsible for the risk
management strategy and the overall risk management
framework and policies. The Board, advised by the Audit
Committee as appropriate, manages risks and reviews the
effectiveness of the risk management and internal control
systems.
DFDS’ Executive Management Team (EMT) is responsible for
the day-to-day risk management processes and for the
continuous development of risk management activities.
Risk management process
The overall risk management process consists of three
independent, but complimentary sub-processes: The
Operational risk management consisting of weekly EMT
meetings where day-to-day risks and operational matters
are reviewed and resolved, the Strategic risk management
consisting of quarterly meetings in the Executive Risk
Committee (ERC) - comprising EMT and DFDS’ General
Counsel - where strategic risks and mitigating action plans
are reviewed, and thirdly the Risk management strategy,
framework and process, which consists of bi-annual
meetings in the Audit Committee and an annual Board of
Directors meeting where strategic risks, mitigating action
plans, and the overall ERM (Enterprise Risk Management)
framework are discussed.
The strategic part of the risk management process is a
quarterly process consisting of separate, but interdependent
sub-processes, as illustrated in the figure on the following
page.
2021 key risks analysis
The top seven risks to achieving DFDS’ strategic ambitions
identified during 2021 are shown in the figure on the
following page. The figure combines the one-year financial
impact with the likelihood of risks occurring over a time
period of three years. The risks are detailed along with
mitigation strategies and risk assessments on pages 66-67.
Risk and risk management
64
DFDS Annual Report 2021
Management review
DFDS Enterprise Risk Management
Operational Framework
1. Risk Identification
• Identification of risks against key
business objectives
• Determination of the risk types
to be included in the process (e.g.,
operational, legal, reputational etc.)
• Identification of resources respon-
sible for the process in each area
3. Risk Mitigation
• Identification of appropriate responses
to risks
• Risk responses should be based on
assessment of loss frequency and
impact
• Management actions should be specific
to reducing likelihood and/or impact
• Action plans with assigned owners
should be developed and monitored
by a risk committee
2. Risk Assessment
• Coordination of risk assessments
through interviews to ensure
consistency
• Identification of the top risks to DFDS
Low Medium High
Residual risks after current mitigation
Low Medium High
Financial
impact
(yearly impact
if occuring)
Likelihood of risk occuring
(within 36 months)
Employees
Technology
Macroeconomy
Pandemics
Compliance
Environmental
IT
Top seven risks
5. Risk Reporting
• Risk reporting highlighting key risks
and recommendations, status of
management action
• Reporting of early indicators and
emerging risks
4. Risk Monitoring
• Continuously monitoring of key
identified risks
R
i
s
k
r
e
p
o
r
t
i
n
g
R
i
s
k
i
d
e
n
t
i
f
i
c
a
t
i
o
n
DFDS
Enterprise Risk
Management
Framework
R
i
s
k
m
o
n
i
t
o
r
i
n
g
R
i
s
k
m
i
t
i
g
a
t
i
o
n
R
i
s
k
a
s
s
e
s
s
m
e
n
t
65
DFDS Annual Report 2021
Management review
48
Key risks
1. Macroeconomy Economic growth and
political
instability
2. IT Systems breakdown, cyber-attacks,
and security breaches
3. Pandemic Covid-19 outbreaks or other
epidemics
4. Environmental Climate change
Risk description:
During 2021 signs of increasing uncertainty in the
g
lobal economy and the geopolitical landscape became more
pronounced.
Financial and/or geopolitical instability or political turmoil
leading to changes in the volume of traded goods and of passengers
may cause major fluctuations in revenue and earnings due
to a strong
correlation between economic development and the ferry and logistics
sectors DFDS oper
ates in. Impacts could come from e.g., shocks to the
European economy and/or lower GDP growth across Europe causing
decreased activity levels, lower investmen
ts, and increased
unemployment, all of which in turn would impact demand and
transported volumes.
Mitigation strategies: Monitoring the development in the global
economic situation and key markets, export/import restrictions and
specific country events is key for DFDS’ preparedness and handling of
potential impacts. Diversification of DFDS’ country, industry and
customer exposure help to mitigate the exposure to any particular
risk. We regularly update our forecast of business results and cash
flows and, if necessary, rebalance investment priorities. We have a
constant focus on cash requirement needs and drawing rights,
securing our ability to meet future financial obligations.
Risk assessment: The 2021 economic recovery post the 2020 Covid-
19 economic slow-down has led to overall improved results for
DFDS, despite the continued delay within the passenger-related
business and supply chain challenges within the logistics business.
The diversified regional exposure of DFDS has proven successful in
2021, as especially the Mediterranean business unit in the Ferry
Division has improved performance. With the 2021 acquisition of HSF
Logistics Group, industry exposure was further diversified.
Risk description:
IT systems and platforms are an essential part of
d
aily operations, increasing our dependency on a stable and secure IT
environment.
Consequently, disruptions to the most critical systems
can have significant negative impacts on commercial operations and
earnings.
Egress of data e.g., loss of data, cyber incidents causing shut
down of critical systems or information security (risk relat
ed to the
handling of data for passengers and freight customers) poses a risk to
DFDS and should be avoided. Failure to do so would not only severely
affect daily operations
but could also impose significant fines and
loss of reputation.
Mitigation strategies:
The scale of IT risks is reduced by increasing
investments in cyber security measures, constant monitoring of
systems, installation of back
-up systems and having proven
procedures in place to restore functionality of systems.
We cont
inuously update our standard systems, test recovery
processes, and prioritize detection and prevention of malware. We use
multi factor authentication and segmented networks. We have
awareness
and security testing carried out, using internal as well as
exte
rnal resources.
Risk assessment: With the acquisition of HSF and the movement of
HSF’s operations onto the DFDS IT platform, detailed IT integration
plans have been prepared but despite this, the overall risk level for
IT risks has been slightly increased with the acquisition of HSF
Logistics Group. During 2021, several measures have been
implemented to improve the risk of cyber-attacks, including
network separation, testing of recovery processes and external
assessments of DFDS’ capabilities and processes. Despite high
internal focus on securing DFDS’ IT risks, a cyber-attack causing
operational disturbance could however still happen.
Risk description:
The Covid-19 outbreak has throughout 2020 and
2021 illustrated how a pandemic can affect
nations, individuals, and
companies. A resurgence of Covid
-19 or a new pandemic could expose
DFDS to operational and financial risks. DFDS is exposed to
government decisions regarding lockdowns, travel res
trictions and
other pandemic
-related restrictions. A pandemic could potentially
also impact the health of
our organisation, when it comes to retention
and motivation of employees
.
Mitigation strategies:
Numerous mitigation initiatives were
implemented dur
ing 2020 in response to the first waves of Covid-19,
and again in 2021 when Covid
-19 resurged. Initiatives included
measures to keep operational sites and offices safe, staff transfers to
other DFDS functions, and increased working
-from-home capabilities.
Other actions included
route changes in the form of (temporary)
closure of passenger routes, reduction of freight capacity through lay
-
up of ferries and fewer sailings, reduction of logistics capacity for
certain sectors, and general cost adjustment
-initiatives to changes in
dem
and.
Risk assessment: In 2021, DFDS was impacted by Covid-19 related
issues, especially passenger activities, due to national travel
restrictions. Pandemic driven bottlenecks furthermore caused
severe challenges for global trade that spread to intra-European
trade. This resulted in production delays, which in some cases
reduced demand for our services. Transport lead times became
longer which in turn led to shortages of cargo-carrying equipment,
such as trucks and trailers, and combined with shortages of truck
drivers throughout Europe, resulted in congestion of cargo at
terminals and warehouses.
Risk description:
Challenges related to climate changes are rising and
focus on
emission reduction is increasing year by year. Expectations of
actions to limit and ultimately eliminate emissions
are growing. DFDS
is subject to expectations from stakeholders
, including customers and
regulator
s. Failure to live up to climate requirements could impact our
licence to operate in certain market
s and our reputation, and with it
financial performance
from lost business or fines. Further, new
regulation from EU/IMO could require increased CO2 efficiency and a
potential significant tax on CO2.
Mitigation strategies:
We contribute to safeguard and develop the
infrastructure to move goods and passengers. We are committed to
reducing our environmental footprint and invest in innovative services
and technologies.
A key strategy is to be an active partner in the
transition from fossil to green fuels. Thi
s is enforced through DFDS’
Climate Action Plan.
The Sustainable Fleet Project unit is working on
projects
to progress the transition. We focus on reducing greenhouse
gasses (GHG) as well as local air pollution of SO2, NOx, and black
carbon.
We participate in local projects and group-wide actions to
achieve incremental changes to daily operations as well as longer
term initiatives to reduce emissions.
Risk assessment
: In 2021, an ambition was launched to deploy a
green ferry by
2025. A new department was established to focus on
achieving this ambition
. Furthermore, an extensive focus on the
existing
ferry fleet’s energy efficiency is in place to reduce emissions.
In 2021
, an order for 125 electric trucks was placed with Volvo.
66
DFDS Annual Report 2021
Management review
49
Key risks continued
5. Compliance Reputational damage,
claims, and fines
6. Employees Retention, attraction, and
diversity
7. Technology Digitalisation and
automation
Risk description:
As a company with broad European reach, DFDS is
subject to natio
nal and international regulatory requirements. This in
particular applies to regulations relating to tax, customs, VAT, privacy
and competition law, which all continue to increase in scope and
complexity, potentially having a material impact on the cost of
doing
business.
Non-compliance could result in fines, licence to operate in
certain markets, and furthermore carry a long
-term impact on our
reputation, which may negatively impact relationships with our
customers and partners and the public image of DFDS
.
Mitigation strategi
es: DFDS is committed to complying with the laws
and regulation in all the countries we operate in. Group functions in
close collaboration with local business units are monitoring and
reviewing our protocols, assuring we are compliant
with all relevant
obl
igations, and internal training programmes are in place for relevant
staff.
Furthermore, a whistle-blower function is available for internal
reporting of non
-compliance. Our Code of Conduct facilitates a focus on
general compliance fo
r both new and current employees. Risks
associated with passenger data are mitigated by internal controls and
adherence to rules and regulations governing information security
.
Risk assessment:
DFDS has a structured approach to compliance risks
with desig
nated people across the organisation responsible for
identifying, prioritizing
, and managing existing or potential threats
related to legal or policy noncompliance or ethical misconduct. An e
-
learning program for all relevant staff was rolled out in 2021.
With the acqu
isition of HSF and the addition of almost 1,800 new
employees, overall compliance risk has
slightly increased. Detailed
integration plans including introduction to
the Code of Conduct and
other compliance processes have been put in place.
R
isk description:
Talented and engaged people are key to the
continued success of DFDS. Focus on talent attraction, retention and
diversity is essential to maintain both performance and development
of the company. A good work environment, strong leadership,
att
ention to employee development and opportunities, and high focus
on diversity
are key for attracting and retaining people and talents.
Loss of experienced key employees or lack of attracting new talents
can potentially have long
-term negative consequences for the
operational, strategic, and financial development of the company.
Mitigation strategies:
Actions have been launched to attract key
employees
through increased employer branding activities. Several
initiatives
to ensure that DFDS is an attractive place to work are in
place
, including having a good and safe physical environment in
offices, warehouses,
port terminals, and ferries. We strive to have a
healthy psychological work environment built on mutual respect,
diversity, good leadersh
ip, and transparency, that together makes
DFDS an attractive employer.
Internal leadership programmes have been implemented to ensure
career advancing opportunities to talented employees.
Risk assessment: In 2021, it was challenging to attract key
employees in certain areas, primarily truck drivers. This is a general
industry issue throughout Europe which also significantly increases
the cost of haulage. With the acquisition of HSF Logistics Group in
2021, access to additional talents and competencies was gained
within certain areas, especially truck drivers and general cold chain
logistics expertise. In other areas, both front-end and back-end,
hiring and retaining the right people remains a challenge.
Risk description:
It is a strategic priority to be at the forefront of
digitali
sation as new digital business models and platforms emerge in
the transport and logistics industry. Such platforms primarily seek to
digitise the intermediary role between manufacturers and end users
that today is manage
d by freight forwarders and transport service
providers.
DFDS’ current business model could be disrupted by new,
evolving technologies for autonomous vehicles, vessels
, and
terminals. Failure to adopt to the technology
-driven industry
development could lea
d to long-term loss of customers and earnings.
Mitigation strategies:
DFDS is closely monitoring changes in the
business environment to protect activities and pursue business
development opportunities.
To compete with new platforms, digital
solutions
are being developing for freight customers as well as for
ferry passenger bookings
and other digital travel solutions.
Risk
assessment: There are no perceived imminent digital threats
related to ferry and logistics operations. In the longer term
, the
current business model
could be disrupted by new, evolving
technologies for autonomous vehicles, vessels
, and terminals, as well
as artificial intelligence (AI), internet of things (IoT) and automation.
I
n recent years, investments have increased in in-house technology
capabilit
ies, partly to counter risks posed by such new technologies
and business models, and partly to be able to develop own solutions
based on such technologies to pursue possible business opportunities.
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DFDS Annual Report 2021
Management review
50
The DFDS
share and
shareholders
27% share price increase
in 2021
Dividend proposed for
payment in 2022
Share capital
DFDS has one class of shares. The share capital at the end
of 2021 was DKK 1,173m comprising 58,631,578 shares,
each with a nominal value of DKK 20. There were no
changes to the share capital during 2021.
Stock exchange trading
The DFDS share is listed on Nasdaq Copenhagen where
20.6m DFDS shares were traded in 2021 equal to an annual
turnover of DKK 6.8bn compared to DKK 7.0bn in 2020. The
average number of trades per day was 1,245 compared to
1,196 in 2020 and the average daily turnover was
DKK 27m compared to DKK 28m in 2020. The DFDS share is
part of Nasdaq’s Large Cap index.
Share price development and yield
DFDS’ share price was DKK 349 at year-end 2021, an
increase of 27% compared to year-end 2020. The market
value at the end of 2021 was DKK 20.5bn, excluding
treasury shares. By comparison, the Danish stock market’s
all-share index increased 22% in 2021.
The total distribution yield of the DFDS share was 0% in
2021 as no capital was distributed to shareholders due to
the general uncertainty caused by Covid-19 as well as its
extraordinary negative impact on passenger earnings in
2021.
Distribution policy
The starting point for determining the level of capital
distribution to shareholders is the current and expected
future financial leverage measured as the ratio between
NIBD and EBITDA. Target leverage is a ratio between 2.0 and
3.0. NIBD/EBITDA was 3.7 at year-end 2021.
Capital is distributed through dividend and share buybacks.
The latter instrument is preferred for distribution of excess
capital while dividend is preferred to be ongoing and
sustainable. Whether capital is in excess is assessed based
on the leverage target as well as future earnings prospects
and investment requirements.
It is preferred to pay dividend semi-annually to facilitate a
faster return of capital to shareholders and to align
payments with DFDS’ seasonal cash flow that normally
Investor relations
Søren Brøndholt Nielsen,
VP, Corporate
Communications & IR
T +45 3342 3359 /
[email protected]
Shareholder’s secretariat
[email protected]om
* Total of registered shareholders
Ownership structure, year
-end 2021, %
Lauritzen Fonden Holding
41.7
Institutional shareholders
44.1
Other registered shareholders
7.8
Treasury shares
2.0
Non-registered shareholders
4.4
Total
100.0
With reference to §38 in the Danish Capital Markets Act, Lauritzen
Foundation domiciled
in Copenhagen, Denmark, has notified DFDS A/S that it
holds more than 5% of the share capital and
voting rights of the company.
Shareholder distribution, year
-end 2021*
No. of shares
No. of
share-
holders
% of
share
capital
1-50 9,689 0.4
51-500 9,833 3.0
501-5,,000 2,200 4.9
5001-50,000 222 5.3
50,001- 88 82.0
Total* 22,032 95.6
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DFDS Annual Report 2021
Management review
51
peaks during the third quarter, the high season for
passenger travel.
Distribution to shareholders in 2021
Due to Covid-19’s continued extraordinary negative impact
on passenger earnings, it was decided to continue to
safeguard the financial position in 2021. It was therefore
decided by the annual general meeting (AGM) that no
dividend was paid in 2021.
Dividend proposal for payment in 2022
The Board of Directors proposes to pay a dividend of
DKK 4.00 per share in 2022. It is the intention of the Board
of Directors according to the authority delegated to it to
distribute an extraordinary dividend of DKK 4.00 per share
by August 2022.
Shareholders
At the end of 2021, DFDS had 22,032 registered
shareholders who owned 96% of the share capital.
International shareholders owned 30% (2019: 34%) of the
total registered share capital. Lauritzen Fonden Holding was
the largest shareholder with a holding of 42% of the total
share capital at the end of 2021 compared to 41% at the
end of 2020.
Investor Relations
The aim of investor relations (IR) is to facilitate an ongoing
dialogue with the financial community, primarily
institutional investors, and analysts. Key events during the
year are quarterly reports, conference calls and roadshows
to present strategic and financial results. In addition,
management and IR participate at investor conferences,
roadshows and meetings with investors and analysts in
between quarters. Due to Covid-19, roadshows and
meetings were mostly virtual in 2021. There is a silent
period of four weeks prior to the release of quarterly
reports.
Share related key figures
2021 2020 2019 2018 2017
Share price, DKK
Price at year-end 349 275 325 262 331
Price high
400 325 332 421 415
Price low
262 134 215 239 321
Market value year-end, DKK m
20,038 15,772 18,593 14,990 18,106
No. of shares year-end, m
59 59 59 59 57
No. of circulating shares year-end, m
57 57 57 57 55
Distribution to shareholders, DKK m
Dividend paid per share, DKK
0 0 4.00 4.00 10.00
Total dividend paid ex. treasury shares 0 0 229 219 555
Buyback of shares
0 0 0 190 1,106
Total distribution to shareholders
0 0 229 409 1,661
FCFE yield, %
-4.9 1.2 -0.8 -15.2 6.1
Total distribution yield, %
0 0 1.2 2.7 9.2
Cash payout ratio, %
0 0 -151.7 -17.9 150.7
Shareholder return
Share price change, %
26.8 -15.3 24.0 -20.9 24.1
Dividend return, % 0 0 1.5 1.2 3.7
Total shareholder return, %
26.8 -15.3 25.5 -19.6 27.8
Share valuation
Equity per share, DKK
199.4 183.4 179.6 160.5 120.7
Price/book value, times 1.8 1.5 1.8 1.6 2.7
69
DFDS Annual Report 2021
Management review
52
Analysts covering the DFDS share
ABG Sundal Collier – coverage suspended, to be resumed
Carnegie
Dan Togo Jensen
T +45 3288 0245
dan.togo@carnegie.dk
Danske Bank Markets
Michael Vitfell-Rasmussen
T +45 4512 8036
[email protected]k
Nordea
Lars Heindorff
T +45 5376 6054
lars.heindorff@nordea.com
RBC Capital Markets
Ruairi Cullinane
T +44 207 002 2275
ruairi.cullinane@rbccm.com
SEB Equities
Ulrik Bak
T +45 3125 6033
ulrik.bak@seb.dk
0
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250
Share price performance relative to
Copenhagen all share index 2017-2021
DFDS All share index Nasdaq Copenhagen (OMXCPI)
2017
2018
2019 2020 2021
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21
200
250
300
350
400
450
0
50
100
150
200
250
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(Share price, DKK)
(No. of shares, '000)
DFDS share price and trading volume, 2021
Trading volume Share price
70
DFDS Annual Report 2021
Management review
Claus V. Hemmingsen (1962)
Chair / 3,336 shares
Position: Managing director,
CVH Consulting Aps
Joined the board: 29 March 2012
Re-elected: 2013-2021
Period of office ends: AGM 2022
Chair of the Nomination
and Remuneration Committees
Board meeting participation: 9/9
Committee participation: 6/6
Chair: Maersk Drilling (The Drilling
Company of 1972 A/S), HusCompagniet A/S,
Innargi A/S
Board member: A..P Møller Holding A/S, A.P.
Møller og Hustru Chastine Mc-Kinney Møllers
Fond til Almene Formaal, Den A.P. Møllerske
Støttefond, Bacher A/S, Maersk Mc-Kinney
Moller Center for Zero Carbon Shipping,
Global Maritime Foundation, Det Forenede
Dampskibs-Selskabs Jubilæumsfond
The Board of Directors is of the opinion
that Claus V. Hemmingsen possesses
the following special competences:
International, commercial, and operational
management experience and expertise in
shipping, offshore, and oil & gas activities,
including HSSE & Sustainability, M&A, capital
markets, and non-executive directorships.
Klaus Nyborg (1963)
Vice Chair / 825 shares
Position: Managing director,
Return ApS
Joined the Board: 31 March 2016
Re-elected: 2017-2021
Period of office ends: AGM 2022
Member of the Nomination and
Remuneration Committees
Board meeting participation: 9/9
Committee participation: 6/6
Chair: Dampskibsselskabet Norden A/S,
A/S United Shipping & Trading, Bawat A/S,
Moscord Pte. Ltd., Singapore and Chairman
of The Investment Committee of Maritime
Investment Fund I K/S and Fund II K/S
Deputy Chair: Bunker Holding A/S,
Uni-Tankers A/S, Uni-Chartering A/S
Board member: Karen og Poul F. Hansens
Familiefond, Norchem A/S,
X-Press Feeders Ltd.
The Board of Directors is of the opinion
that Klaus Nyborg possesses the following
special competences: International
management and board experience
from i.a. listed shipping companies and
suppliers to the shipping industry, and
expertise in strategy, M&A, finance, and risk
management.
Marianne Dahl (1974)
Board member / 1,817 shares
Position: Managing Director & Partner,
Boston Consulting Group
Joined Board:
21 March 2017
Re-elected: 2018-2021
Period of office ends: AGM 2022
Member of the Nomination and
Remuneration Committees
Board meeting participation: 9/9
Committee participation: 6/6
Board member: TDC (resigned December
2021)
The Board of Directors is of the opinion
that Marianne Dahl possesses the following
special competences: International
management experience and expertise
within strategy, digitalisation, product
development, and sales.
Anders Götzsche (1967)
Board member / 3,500 shares
Position: Executive Vice President and CFO,
H. Lundbeck A/S
Joined Board: 19 March 2018
Re-elected: 2018-2021
Period of office ends: AGM 2022
Chair of the Audit Committee
Board meeting participation: 9/9
Committee participation: 6/6
Chair: Rosborg Møbler A/S
Board member and Chair of Audit
Committee: Obsidian Therapeutics Inc
The Board of Directors is of the opinion
that Anders Götzsche possesses the
following special competences: International
management and board experience,
expertise in finance and accounting as well
as M&A.
Jens Otto Knudsen (1958)
Board member (staff representative) / 130
shares
Joined Board: 13 April 2011
Re-elected: 2012-2019
Period of office ends: AGM 2022
Board meeting participation: 9/9
Jens Otto Knudsen has no managerial or
executive positions in other companies.
Jill Lauritzen Melby (1958)
Board member / 4,735 shares
Position: Team Leader Finance, BASF A/S
Joined Board: 18 April 2001
Re-elected: 2002-2021
Period of office ends: AGM 2022
Member of the Audit Committee
Board meeting participation: 9/9
Committee participation: 6/6
Jill Lauritzen Melby has no managerial or
executive positions in other companies.
The Board of Directors is of the opinion that
Jill Lauritzen Melby possesses the following
special competences: Expertise in financial
control
Due to family relations to the company’s
principal shareholder, Lauritzen
Fonden, Jill Lauritzen Melby cannot be
considered independent according to the
Recommendations on Corporate Governance.
Board of Directors as per 24 February 2022
71
DFDS Annual Report 2021
Management review
Board of Directors continued
Executive Board
Jesper Hartvig Nielsen (1975)
Board member (staff representative) /
230 shares
Joined Board: 19 March 2018
Re-elected: 2019
Period of office ends: AGM 2022
Board meeting participation: 9/9
Jesper Hartvig Nielsen has no managerial or
executive positions in other companies.
Lars Skjold-Hansen (1965)
Board member (staff representative) /
530 shares
Joined Board: 22 March 2013
Re-elected: 2014-2019
Period of office ends: AGM 2022
Board meeting participation: 9/9
Lars Skjold-Hansen has no managerial or
executive positions in other companies.
Dirk Reich (1963)
Board member / 0 shares
Joined Board: 1 July 2019
Re-elected: 2020-2021
Period of office ends: AGM 2022
Member of the Audit Committee
Board meeting participation: 9/9
Committee participation: 6/6
Chair: Instafreight GmbH, Log-hub AG, R+R
Holding AG, R+R International Aviation AG
Board member: Skycell AG, Imperial
Logistics Limited, Die Schweizerische Post
AG, PrimaFrio S.L.
The Board of Directors is of the opinion that
Dirk Reich possesses the following special
competences: International management
and board experience, as well as expertise in
international logistics activities.
Torben Carlsen (1965)
President & CEO / 133,902 shares
Appointed: 1 May 2019 (previously CFO of
DFDS since 1 June 2009)
Chair: Copenhagen Infrastructure Partners:
CI II, CI III and CI IV K/S. Gro Capital Partners:
Fund I and II K/S. Chair of the Investment
Committees
Board member: Royal Unibrew A/S. Navigare
Capital: Maritime Investment Fund I and II
K/S, Member of the Investment Committees
Karina Deacon (1969)
EVP & CFO / 1,456 shares
Appointed: 1 January 2020
Board member and Chair of Audit
Committee: Velux A/S
72
DFDS Annual Report 2021
Management review
Executive Management Team
Peder Gellert Pedersen
(1958)
Executive Vice President, Ferry
Division
Ship broker, HD (O)
Employed by DFDS since 1994
Niklas Andersson
(1973)
Executive Vice President,
Logistics Division
Marketing, IHM Business School
Employed by DFDS since 2012
Anne-Christine Ahrenkiel
(1970)
Executive Vice President, Chief People
Officer
MSc (Scient. pol.), Bachelor in
French/Italian
Employed by DFDS since 2019
Torben Carlsen
(1965)
President & CEO
MSc (Finance)
Employed by DFDS since 2009
Karina Deacon
(1969)
Executive Vice President & CFO
MSc (Aud)
Employed by DFDS since 2020
Martin Gade Gregersen
(1980)
Senior Vice President, Logistics
Division
Freight forwarder
Employed by DFDS since 2021
(since 2001 employed by N&K
Spedition that was acquired by DFDS
as part of HSF Logistics Group)
Rune Keldsen
(1979)
Executive Vice President, Chief
Technology Officer
MSc (IT)
Employed by DFDS since 2020
73
DFDS Annual Report 2021
Management review
Remuneration
Report summary
What Purpose What and how much
Base Fee – Board To remunerate in relation to the scope and
complexity of work, similar to fees in comparable
listed companies.
Board members: Base fee.
Chair: 3 times the Base Fee.
Vice Chair: 2 times the Base Fee.
Directors acceding or resigning during an election period will receive a pro rata share of
the annual fees.
Base Fee – Committee Same as above. Chair of the Audit Committee: 2/3 of the Base Fee.
Other members of the Audit Committee: 1/3 of the Base Fee.
Chair of the Remuneration Committee: 2/15 of the Base Fee.
Chair of the Nomination Committee: 2/15 of the Base Fee.
Other members of the Remuneration and Nomination Committee: 2/15 of the Base Fee.
Ad hoc Fee To remunerate for additional ad-hoc task, if
agreed by the Board of Directors.
Fixed fee as per agreement with the Board. To be presented in the notes to the annual
report and/or the remuneration report.
Contributions and expenses To cover social security taxes imposed by foreign
authorities on such fees.
To reimburse expenses incurred by the Directors
in connection with board and/or committee
meetings.
Reasonable contributions and expenses, subject to approval from the Committee.
Insurance To provide the Directors with insurance.
The Directors are covered by a customary D&O insurance policy with coverage deemed
sufficient by the Board of Directors in relation to the size and nature of the business
of DFDS.
To the extent that insurance coverage proves insufficient DFDS may in certain cases
cover additional claims.
Pension None None
Incentive plan None Employee-elected members of the Board may receive incentive pay in their capacity as
employees of DFDS.
Remuneration policy elements, Board of Directors – 2021
The purpose of the remuneration report is to give a
transparent and comprehensive overview of the remune-
ration of DFDS’ Executive Board and Board of Directors
(‘Board’) in 2021. The report is Aligned with the approved
remuneration policy for 2021. It is also aligned with the
requirements of section 139b of the Danish Company
Act and the Recommendations on Corporate Governance
issued by the Danish Committee on Corporate Governance.
Revised remuneration policy for 2021-24
In March 2021, a revised remuneration policy was approved
by the AGM. The revised policy seeks to enable the Board
to remunerate executives according to financial performance,
but it also emphasises how swiftly executives react to
profound and unforeseen market changes and their ability
to define and make critical long-term investments even
in financially challenging times.
By incorporating these principles into the policy for 2021,
the policy contains a dedicated share of short-term
incentives to be allocated to personal targets, including
e.g. strategy and sustainability progress. The policy also
contains a counter cyclical mechanism within the LTIs
through a split between Restricted Share Units (RSUs)
and Share Options.
74
DFDS Annual Report 2021
Management review
Remuneration policy elements, Executive Board – 2021
Component Purpose Link to performance Size/value of component
Base salary
Recognise market value, the nature of the role in
terms of scale, complexity and responsibility and
the Executive Board members’ experience, sustained
performance and contribution.
Indirectly linked to DFDS’ performance through
the Executive Board member’s sustained
performance level.
No pre-defined maximum salary level but determined
according to ‘Purpose’ (ref. explanation to the left).
Short-term
incentive
Reward the achievement of DFDS’ annual goals
guided by the long-term business strategy.
Divided between the following performance areas:
1. DFDS’ financial performance
(e.g. ROIC, Profit before Tax), at least 60%
2. DFDS’ strategic and personal performance
(e.g. sustainability, transformation).
Target: 40% of annual base salary.
Maximum: 80% of annual base salary.
Performance area 1 is evaluated based on meeting
the financial targets, whereas 2 and 3 are based on a
discretionary assessment by the Board.
Information on measures in any given year will be outlined
in the relevant annual remuneration report.
Long-term
incentive
Reward the achievement of DFDS’ long-term goals
through share-based instruments and support
executive retention.
Directly linked to the stock market performance of
DFDS through the share price development.
40% of annual base salary.
Maximum: 80% of annual base salary.
Pension Provide for the Executive Board members’ pension
related needs.
N/A
Equal to level of contributions made for Danish DFDS
salaried employees (currently 10% of the annual base
salary).
Benefits Provide for the Executive Board members’ work-
related equipment.
N/A
E.g. company car, free telephone/ other devices, domestic
broadband access, relevant newspapers.
Termination Apply termination conditions to the Executive Board
member aligned with general market conditions for
the role.
N/A Executive Board member: Six months’ notice in case
of resignation.
DFDS: Twelve months’ notice in case of termination.
The work of the Remuneration Committee
In accordance with the annual cycle of activities the
Remuneration Committee (‘Committee’) had three ordinary
meetings during 2021. In addition to revising the remune-
ration policy, the Committee updated the Executive Board
benchmark analysis as additional input to determine
the level of executive pay.
Further, the Committee conducted a gender pay gap
analysis for DFDS’ headquarter in order to identify
potential structural gaps in salaries at comparable levels
between gender. The analysis serves as a pilot for the rest
of the organisation to be incorporated in the annual salary
review process with the purpose of ensuring that any
unexplainable variances are corrected.
The full Remuneration Report is available here.
75
DFDS Annual Report 2021
Management review
Consolidated
Financial
Statements
77 Income statement
78 Statement of comprehensive income
79 Balance sheet
80 Statement of changes in equity
82 Statement of cash flows
83 Notes
76
DFDS Annual Report 2021
Consolidated Financial Statements
Income statement 1 January – 31 December
DKK million Note 2021 2020
Revenue 2.1, 2.2 17,869 13,971
Costs: 2.3
Ferry and other ship operation and maintenance -3,880 -2,569
Freight handling -2,598 -2,383
Transport solutions -3,893 -2,905
Employee costs 2.4 -3,444 -2,862
Cost of sales and administration -643 -520
Operating profit before depreciation (EBITDA) and special items 3,411 2,732
Share of profit/loss of associates and joint ventures -13 -5
Profit on disposal of non-current assets, net 3.1.4 2 5
Amortisation, depreciation, and impairment losses on intangible
and tangible assets and Right-of-use assets 2.5 -2,087 -1,873
Operating profit (EBIT) before special items 1,313 858
Special items, net 2.6 34 -117
Operating profit (EBIT) 1,348 741
Financial income 4.4 29 5
Financial costs 4.4 -307 -280
Profit before tax 1,069 466
Tax on profit 2.7 -94 -24
Profit for the year 976 442
Profit for the year is attributable to:
Equity holders of DFDS A/S 958 433
Non-controlling interests 18 9
Profit for the year 976 442
1)
The Board of Directors propos-
es to the 2022 Annual General
Meeting that a dividend of
DKK 4.00 per share is paid in
2022. It is the intention of the
Board of Directors according
to the authority delegated to
it to distribute an extraordi-
nary dividend of DKK 4.00 per
share by August 2022.
Earnings per share 4.8
Basic earnings per share (EPS) of DKK 20 in DKK 16.69 7.56
Diluted earnings per share (EPS-D) of DKK 20 in DKK 16.67 7.56
Proposed profit appropriation
Proposed dividend DKK 4.00 per share
1)
(2020: DKK 0.00 per share)
DKK million Note 2021 2020
77
DFDS Annual Report 2021
Consolidated Financial Statements
Statement of comprehensive income 1 January – 31 December
DKK million Note 2021 2020
Profit for the year 976 442
Other comprehensive income
Items that will not subsequently be reclassified to the Income statement:
Remeasurement of defined benefit pension obligations 3.2.4 140 -59
Tax on items that will not be reclassified to the Income statement 2.7 -25 0
Items that will not subsequently be reclassified to the Income statement 115 -59
Items that are or may subsequently be reclassified to the Income statement:
Value adjustments of hedging instruments for the year 42 -103
Value adjustment transferred to operating costs -56 6
Value adjustment transferred to financial costs 1 17
Value adjustment transferred to non-current tangible assets -139 -38
Tax on items that are or may be reclassified to the Income statement 2.7 -1 9
Foreign exchange adjustments, subsidiaries 28 -37
Items that are or may subsequently be reclassified to the Income statement -124 -147
Total other comprehensive income after tax -9 -206
Total comprehensive income 966 236
Total comprehensive income for the year is attributable to:
Equity holders of DFDS A/S 950 227
Non-controlling interests 16 9
Total comprehensive income 966 236
78
DFDS Annual Report 2021
Consolidated Financial Statements
Balance sheet 31 December Assets
DKK million Note 2021 2020
Goodwill 4,280 3,434
Port Concession rights 1,061 1,096
Other non-current intangible assets 599 77
Software 298 239
Development projects in progress 14 55
Non-current intangible assets 3.1.1 6,252 4,901
Land and buildings 427 183
Terminals 718 720
Ferries and other ships 11,460 11,220
Equipment, etc. 1,289 723
Assets under construction and prepayments 1,368 887
Non-current tangible assets 3.1.2 15,263 13,734
Right-of-use assets 3,926 3,133
Non-current Right-of-use assets 3.1.3 3,926 3,133
Investments in associates, joint ventures and securities 35 49
Receivables 3.2.1 16 17
Prepaid costs 222 337
Deferred tax 2.7 31 57
Pension assets 3.2.4 25 0
Derivative financial instruments 4.2 36 76
Other non-current assets 366 536
Non-current assets 25,807 22,304
Inventories 3.2.2 269 169
Receivables 3.2.1 3,423 2,631
Prepaid costs 299 309
Derivative financial instruments 4.2 22 149
Cash 902 1,261
Current assets 4,914 4,520
Assets classified as held for sale 3.1.6 0 182
Total current assets 4,914 4,702
Assets 30,721 27,006
Balance sheet 31 December Equity and Liabilities
DKK million Note 2021 2020
Share capital 1,173 1,173
Reserves -396 -273
Retained earnings 10,435 9,611
Proposed dividend 235 0
Equity attributable to equity holders of DFDS A/S 11,446 10,511
Non-controlling interests 108 89
Equity 4.6 11,554 10,600
Interest-bearing liabilities 4.5 11,825 11,720
Deferred tax 2.7 366 217
Pension and jubilee liabilities 3.2.4 76 197
Other provisions 3.2.5 117 46
Derivative financial instruments 4.2 6 149
Non-current liabilities 12,390 12,329
Interest-bearing liabilities 4.5 2,511 934
Trade payables 3,119 2,090
Other provisions 3.2.5 56 78
Corporation tax 113 61
Other payables 3.2.3 730 725
Derivative financial instruments 4.2 77 52
Prepayments from customers 171 136
Current liabilities 6,778 4,077
Liabilities 19,167 16,406
Equity and liabilities 30,721 27,006
79
DFDS Annual Report 2021
Consolidated Financial Statements
Statement of changes in equity 1 January – 31 December 2021
Reserves
DKK million Share capital
Translation
reserve
Hedging
reserve
Treasury
shares
Retained
earnings
Proposed
dividend
Equity
attributable to
equity holders
of DFDS A/S
Non-
controlling
interests Total
Equity at 1 January 2021 1,173 -394 147 -25 9,611 0 10,511 89 10,600
Comprehensive income for the year
Profit for the year 958 958 18 976
Other comprehensive income
Items that will not subsequently be reclassified to the Income statement:
Remeasurement of defined benefit pension obligations 141 141 -1 140
Tax on items that will not be reclassified to the Income statement -25 -25 -25
Items that will not subsequently be reclassified to the Income statement 116 116 -1 115
Items that are or may subsequently be reclassified to the Income statement:
Value adjustments of hedging instruments for the year 42 42 42
Value adjustment transferred to operating costs -56 -56 -56
Value adjustment transferred to financial costs 1 1 1
Value adjustment transferred to non-current tangible assets -139 -139 -139
Tax on items that are or may be reclassified to the Income statement -1 -1 -1
Foreign exchange adjustments, subsidiaries 28 28 28
Items that are or may subsequently be reclassified to the Income statement 0 28 -151 0 -1 0 -124 0 -124
Total other comprehensive income after tax 0 28 -151 0 115 0 -8 -1 -9
Total comprehensive income 0 28 -151 0 1,073 0 950 16 966
Transactions with owners
Proposed dividend at year-end -235 235 0 0
Acquisition, non-controlling interests 0 2 2
Share-based payments 12 12 12
Purchase of treasury shares -4 -71 -75 -75
Cash from sale of treasury shares related to exercise of share options 4 44 48 48
Total transactions with owners 2021 0 0 0 0 -249 235 -15 2 -12
Equity at 31 December 2021 1,173 -366 -5 -25 10,435 235 11,446 108 11,554
The Parent Company’s share capital is divided into
58,631,578 shares of DKK 20 each. All shares have equal
rights. There are no restrictions on voting rights. The shares
are fully paid up.
The Board of Directors proposes to the 2022 Annual Gen-
eral Meeting that a dividend of DKK 4.0 per share is paid in
2022. It is the intention of the Board of Directors according
to the authority delegated to it to distribute an extraordi-
nary dividend of DKK 4.00 per share by August 2022.
80
DFDS Annual Report 2021
Consolidated Financial Statements
Statement of changes in equity 1 January – 31 December 2020
Reserves
DKK million Share capital
Translation
reserve
Hedging
reserve
Treasury
shares
Retained
earnings
Proposed
dividend
Equity
attributable to
equity holders
of DFDS A/S
Non-
controlling
interests Total
Equity at 1 January 2020 1,173 -357 266 -28 8,988 235 10,276 80 10,356
Comprehensive income for the year
Profit for the year 433 433 9 442
Other comprehensive income
Items that will not subsequently be reclassified to the Income statement:
Remeasurement of defined benefit pension obligations -59 -59 -59
Items that will not subsequently be reclassified to the Income statement 0 0 0 0 -59 0 -59 0 -59
Items that are or may subsequently be reclassified to the Income statement:
Value adjustments of hedging instruments for the year -103 -103 -103
Value adjustment transferred to operating costs 6 6 6
Value adjustment transferred to financial costs 17 17 17
Value adjustment transferred to non-current tangible assets -38 -38 -38
Tax on items that are or may be reclassified to the Income statement 9 9 9
Foreign exchange adjustments, subsidiaries -37 -37 0 -37
Items that are or may subsequently be reclassified to the Income statement 0 -37 -119 0 9 0 -147 0 -147
Total other comprehensive income after tax 0 -37 -119 0 -50 0 -206 0 -206
Total comprehensive income 0 -37 -119 0 383 0 227 9 236
Transactions with owners
Acquisition, non-controlling interests 0 0 -1 0
Cancellation of proposed dividend at year-end 2019
1)
235 -235 0 0
Share-based payments 5 5 5
Sale of treasury shares 0 2 2 2
Cash from sale of treasury shares related to exercise of share options 3 -2 1 1
Total transactions with owners 2020 0 0 0 3 239 -235 8 -1 8
Equity at 31 December 2020 1,173 -394 147 -25 9,611 0 10,511 89 10,600
The Parent Company’s share capital, which is not divided
into different classes of shares, is divided into 58,631,578
shares of DKK 20 each. All shares rank equally. There are
no restrictions on voting rights. The shares are fully paid up.
1)
Due to the reduced opera-
tional and financial visibility
caused by Covid-19 the
Annual General Meeting held
on 4 June 2020 decided not to
pay out the proposed dividend
of DKK 4.0 for the financial
year 2019.
81
DFDS Annual Report 2021
Consolidated Financial Statements
Statement of cash flows 1 January – 31 December
DKK million Note 2021 2020
Operating profit before depreciation (EBITDA) and special items 3,411 2,732
Cash flow effect from special items related to operating activities -51 -125
Adjustments for non-cash operating items, etc. 5.4 62 45
Change in working capital 5.4 148 148
Payment of pension liabilities and other provisions -33 -31
Cash flow from operating activities, gross 3,536 2,769
Interest received, etc. 26 3
Interest paid, etc. -302 -276
Taxes paid -52 3
Cash flow from operating activities, net 3,208 2,499
Investments in ferries and other ships including dockings, rebuildings and
ferries under construction (incl. settlement of forward exchange contracts
related thereto)
1)
-1,145 -1,422
Sale of ferries including prepayment received on ferry held for sale 99 202
Investments in other non-current tangible assets -421 -195
Sale of other non-current tangible assets 64 27
Investments in non-current intangible assets -62 -70
Acquisition of enterprises, associates, joint ventures and activities 5.5 -1,765 -14
Sale of shares in associated company 20 0
Other investing cash flows 1 -146
Cash flow to/from investing activities, net -3,210 -1,618
Cash flow before financing activities, net -1 882
DKK million Note 2021 2020
Proceed from bank loans and loans secured by mortgage
in ferries and other ships 4.3 1,762 1,992
Repayment and instalments on bank loans and loans secured by mortgage
in ferries and other ships 4.3 -1,349 -1,791
Payment of lease liabilities 4.3 -834 -602
Settlement of forward exchange contracts related to leases 90 0
Proceeds from sale of treasury shares 4.7 0 2
Acquisition of treasury shares 4.7 -75 0
Cash received from exercise of share options 48 1
Other financing cash flows 0 -60
Cash flow to/from financing activities, net -359 -458
Net increase/(decrease) in cash and cash equivalents -360 424
Cash and cash equivalents at 1 January 1,261 840
Foreign exchange and value adjustments of cash and cash equivalents 1 -2
Cash and cash equivalents at 31 December
2)
902 1,261
The statement of cash flows cannot directly be derived
from the Income statement and the Balance sheet.
1)
The 2021 cash flow includes
an amount of DKK 19m
related to 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.
2)
At 31 December 2021 DKK
167m (2020: DKK 147m) of
the cash was deposited on
restricted bank accounts.
82
DFDS Annual Report 2021
Consolidated Financial Statements
Notes
1. Basis of preparation of the Consolidated Financial Statements ...84
2. Net Operating Profit After Tax (NOPAT) .........................87
2.1 Segment information ........................................88
2.2 Revenue ....................................................90
2.3 Costs .......................................................91
2.4 Employee costs .............................................91
2.5 Amortisation, depreciation and impairment losses for the year ....92
2.6 Special items, net ...........................................92
2.7 Tax .........................................................93
3. Invested Capital .................................................95
3.1 Invested Capital excl. Net Working Capital
3.1.1 Non-current intangible assets .........................96
3.1.2 Non-current tangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . .98
3.1.3 Leases .............................................100
3.1.4 Profit on disposal of non-current assets ..............103
3.1.5 Impairment testing ..................................103
3.1.6 Assets classified as held for sale .....................105
3.2 Net Working Capital
3.2.1 Receivables ........................................105
3.2.2 Inventories .........................................106
3.2.3 Other payables .....................................106
3.2.4 Pension & jubilee liabilitites .........................107
3.2.5 Other provisions ....................................109
4. Capital structure and finances ................................. 110
4.1 Financial and operational risks ..............................111
4.2 Information on financial instruments ........................115
4.3 Changes in liabilities arising from financing activities .........116
4.4 Financial income and costs .................................117
4.5 Interest-bearing liabilities ...................................118
4.6 Equity ....................................................119
4.7 Treasury shares ............................................119
4.8 Earnings per share ..........................................119
5. Other notes ...................................................120
5.1 Remuneration to Executive Board and Board of Directors ........121
5.2 Fees to Auditors appointed at the Annual General Meeting .....122
5.3 Share based payments .....................................122
5.4 Cash flow ..................................................124
5.5 Acquisitions and sale of enterprises,
activities and non-controlling interests ......................124
5.6 Guarantees, collateral and contingent liabilities ..............126
5.7 Contractual commitments ..................................126
5.8 Related party transactions ..................................127
5.9 Covid-19 impact ...........................................127
5.10 Events after the balance sheet date .........................127
5.11 Company overview .........................................128
Invested capital
(Section 3)
Invested Capital excl.
Net Working Capital
(Section 3.1)
Net Working Capital
(Section 3.2)
NOPAT
(Section 2)
EBIT
Corporate income
tax on EBIT
ROIC
83
DFDS Annual Report 2021
Consolidated Financial Statements
1. Basis of preparation of the Consolidated
Financial Statements
84
DFDS Annual Report 2021
Consolidated Financial Statements
In preparing the Annual Report, DFDS focuses on ensuring
that the content is relevant to the reader and that the
presentation is clear.
The purpose is to provide an overview of what drives
performance. The structure of the notes reflects DFDS’ fi-
nancial performance goal, ROIC, and the structure aims at
providing an enhanced understanding of each accounting
area by describing relevant accounting policies and any
significant accounting estimates and assessments related
thereto at the end of each note.
The accounting policies have been made within the frame-
work of the prevailing International Financial Reporting
Standards (IFRS) as adopted by the EU. The actual text of
the standard is not repeated in the notes. The description
of accounting policies in the notes forms part of the overall
description of DFDS’ accounting policies.
Basis of reporting
The 2021 Consolidated Financial Statements and Parent
Company Financial Statements of DFDS A/S have been pre-
pared on a going concern basis and in accordance with the
IFRS as adopted by the EU, and additional Danish disclosure
requirements for listed companies. The consolidated finan-
cial statements are also in accordance with IFRS as issued
by the International Accounting Standards Board (IASB).
During 2021 Covid-19 had negative impact on passengers
but the Covid-19 situation is not expected to have impact
on DFDS’s ability to continue as a going concern.
On 24 February 2022, the Board of Directors and the Ex-
ecutive Management Board considered and approved the
2021 Annual Report of DFDS A/S. The Annual Report will
be presented to the shareholders of DFDS A/S for approval
at the ordinary Annual General Meeting on 23 March 2022.
Basis for preparation
The Consolidated Financial Statements and the Parent Com-
pany Financial Statements are presented in Danish Kroner
(DKK) which is the Parent Company’s functional currency.
The Consolidated Financial Statements and the Parent
Company Financial Statements are prepared according
to the historical cost convention except that derivatives
and financial instruments classified as “Fair value through
profit loss” (FVTPL) are measured at fair value.
Assets classified as held for sale are measured at the low-
er of the carrying amount before the changed presentation
and the fair value less costs to sell.
The accounting policies, set out below and in the notes,
have been used consistently in respect of the financial
year and to comparative figures.
Rounding
In general, rounding may cause variances in sums and per-
centages in the Annual report.
New International Financial Reporting Standards
and Interpretations
In 2021, the Group has adopted all relevant new and up-
dated accounting standards.
New standards and interpretations not yet adopted
The IASB has issued a number of new or amended stand-
ards and interpretations with effective date post 31 De-
cember 2021, some of which have not yet been endorsed
by the EU. The new and amended Standards and Interpre-
tations are not mandatory for the financial reporting for
2021. The Group expects to adopt the Standards and Inter-
pretations when they become mandatory.
None of the standards and interpretations are expected to
have a significant impact on recognition and measurement.
Application of materiality and relevance
DFDS’ Annual report is based on the concept of materiality
and relevance to ensure that the content is material and
relevant to the user. This objective is pursued by providing
relevant rather than generic descriptions and information.
When assessing materiality and relevance, due considera-
tion is given to ensure compliance with applicable account-
ing legislation etc. and to ensure that the Consolidated
Financial Statements and Parent Company Financial State-
ments give a true and fair view of the Group’s and the Par-
ent Company’s financial position at the balance sheet date
and the operations and cash flows for the financial year.
The Consolidated Financial Statements and the Parent
Company Financial Statements consist of many trans-
actions. These transactions are aggregated into classes
according to their nature or function and presented in
classes of similar items in the Financial Statements and
in the notes as required by IFRS. If items are individually
immaterial they are aggregated with other items of similar
nature in the statements or in the notes. The disclosure
requirements throughout IFRS are substantial and DFDS
provides these specific disclosures required by IFRS unless
the information is considered immaterial to the econom-
ic decision-making of the users of these Financial State-
ments or not relevant for the Group.
Subtotals and alternative performance measures
In the Annual Report DFDS presents certain financial per-
formance measures such as subtotals and key figures
which are not required or defined under IFRS. It is consid-
ered that these alternative measures provide relevant
supplementary information for the stakeholders of DFDS.
Significant income and expenses which DFDS assesses not
to be directly attributable to the operating activities or
which are considered non-recurring are presented in the
Income statement in a separate line item labelled ‘Special
items’ in order to distinguish these items from other in-
come statement items. Reference is made to note 2.6 for
more details on Special items. The Income statement in-
cludes the subtotals ‘Operating profit before depreciation
(EBITDA) and special items’ and ‘Operating profit (EBIT)
before special items’ as these are assessed to provide a
more transparent and comparable view of DFDS’ recurring
operating profit. In note 2.6 it is disclosed how the line items
in the Income statement would have been affected if ‘Spe-
cial items’ had not been presented in a separate line item.
For definitions of key figures please refer to the section
‘Definitions’.
Significant accounting policies
Accounting policies for Basis of consolidation are de-
scribed below, while accounting policies for the remaining
areas are included in the notes to which they relate.
Management considers the accounting policies for the
following areas as the most important for the Group: Con-
solidated Financial Statements; Special items (note 2.6);
Non-current intangible assets (note 3.1.1); Ferries and oth-
er ships (note 3.1.2); Pension and jubilee liabilities (note
3.2.4); Right-of-use assets/Leases (note 3.1.3); Financial
and operational risks (note 4.1); Business combinations
(note 5.5); and Contractual commitments (note 5.7).
Accounting policies for Basis of consolidation, Non-con-
trolling interests and Translation of foreign currencies are
described below, while accounting policies for the remain-
ing areas are included in the notes to which they relate.
Significant estimates
In the preparation of the Consolidated Financial State-
ments, Management undertakes several accounting es-
timates and judgements 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 assumptions are based on his-
torical experience and other factors such as Covid-19 which
the Management considers reasonable under the circum-
stances, but which by their nature are uncertain and unpre-
dictable. The assumptions may be incomplete or inaccurate
and unanticipated events or circumstances may occur, for
which reason the actual results may deviate from the ap-
plied estimates, assessments, and assumptions.
1. Basis of preparation of the Consolidated Financial Statements
85
DFDS Annual Report 2021
Consolidated Financial Statements
In the opinion of Management, the following accounting
estimates and judgements are significant in the prepara-
tion of the Annual report:
- Impairment testing of goodwill, other non-current intangi-
ble assets, ferries and other ships, other non-current tan-
gible assets, and Right-of-use assets. Reference is made
to note 3.1.5.
- Assessment of useful life and scrap values. Reference is
made to note 3.1.5.
- Purchase Price Allocation in connection with acquisitions.
Reference is made to note 5.5.
- Pension and jubilee liabilities. Reference is made to note
3.2.4.
- Deferred tax assets. Reference is made to note 2.7.
- Leasing arrangements. Reference is made to note 3.1.3.
Descriptions of the significant accounting estimates and
judgements are included in the notes to which they relate.
Description of accounting policies
Basis of consolidation
The Consolidated Financial Statements includes the Par-
ent Company DFDS A/S and the subsidiaries in which the
Parent Company controls the financial and operational
policies. Control is obtained when the Group directly or
indirectly holds more than 50% of the voting rights in the
enterprise (i.e. subsidiary) or if it, in some other way, con-
trols the enterprise. Further, control also implies that the
Group is exposed, or has rights, to variable returns from
its involvement with the investee and has the ability to
affect those returns through its power over the investee.
The Parent Company and these subsidiaries are referred
to as the Group.
Enterprises, which are not subsidiaries, over which the
Group exercises significant influence, but which it does
not control, are considered associates. Significant influ-
ence is generally obtained by direct or indirect ownership
or control of more than 20% of the voting rights but less
than 50%.
Enterprises which according to agreement are controlled
together with one or more other companies are considered
joint ventures.
The Consolidated Financial Statements are based on the
Parent Company and the subsidiaries and are prepared
by combining items of a uniform nature and eliminating
inter-company transactions, shareholdings, balances, and
inter-company gains and losses. The Consolidated Finan-
cial Statements are prepared by applying the Group’s ac-
counting policies.
Investments in subsidiaries are eliminated against the pro-
portionate share of the subsidiaries’ net asset value at the
acquisition date.
The Group’s investments in associates and joint ventures
are recognised in the Consolidated Financial Statements
at the Group’s proportionate share of the associate’s / joint
venture’s net asset value. Unrealised intercompany gains
and losses from transactions with associates and joint
ventures are eliminated by the Group’s interest in the re-
spective associate/jointly controlled enterprise.
Non-controlling interests
In the Consolidated Financial Statements, the individual
financial line items of subsidiaries are recognised in full.
The non-controlling interests’ share of the results for the
year and of the equity of subsidiaries which are not whol-
ly-owned are included in the Group’s results and equity,
respectively, but are presented separately in the proposed
profit appropriation and the statement of changes in eq-
uity. If a non-controlling interest has a put option to sell
its ownership interest to DFDS, the fair value of the put
option is recognised as an interest-bearing liability which
means that the results for the year and equity attributable
to non-controlling interests are not presented separately
in the proposed profit appropriation and the Statement of
changes in equity.
Translation of foreign currencies
Functional and presentation currency
Items included in the Financial Statements of each of the
Group’s enterprises are measured using the functional
currency of the primary economic environment in which
the enterprise operates. The Consolidated Financial State-
ments are presented in Danish Kroner (DKK).
Translation of transactions and balances
On initial recognition, foreign currency transactions are
translated into the functional currency using the exchange
rate prevailing at the date of transaction. Currency gains
and losses resulting from the settlement of these transac-
tions as well as from the translation at year-end exchange
rates of monetary assets and liabilities denominated in
foreign currencies are recognised in the Income statement
as Financial income or cost except when deferred in equity
as qualifying for cash flow hedges.
Currency gains and losses on non-monetary items recognised
at fair value, such as securities measured at FVTPL, are rec-
ognised in the same line item as the fair value gain or loss.
Non-current assets acquired in foreign currency are trans-
lated at the exchange rate prevailing at the date of acquisi-
tion. Gains and losses on hedges relating to the acquisition
of non-current assets are recognised as part of the value of
the non-current asset at its initial recognition.
Translation of subsidiaries
In the Consolidated Financial Statements, the Income
statement items of subsidiaries with a functional currency
different from DKK are translated at the average exchange
rate, while the balance sheet items are translated at the
exchange rates at the end of the reporting period.
Foreign exchange differences arising on translation of such
subsidiaries’ equity at the beginning of the reporting peri-
od to the exchange rates at the end of the reporting period
and on translation of the Income statements from average
exchange rates to the exchange rates at the end of the
reporting period are recognised in Other Comprehensive
Income and attributed to a separate translation reserve
under equity. The exchange rate adjustment is allocated
between the Parent Company’s and the non-controlling
interests’ shares of equity.
When loosing control of a consolidated entity, exchange
differences which have accumulated in Equity via Other
Comprehensive Income, and which are attributable to the
enterprise, are transferred from Other Comprehensive In-
come to the Income statement together with any gains or
losses associated with the disposal.
Report under the ESEF regulation
The Commission Delegated Regulation (EU) 2019/815
on the European Single Electronic Format (ESEF Regula-
tion) has introduced a single electronic reporting format
for the annual financial reports of issuers with securities
listed on the EU regulated markets. The Group’s iXBRL tags
have been prepared in accordance with the ESEF taxono-
my, which is included in the ESEF Regulation and devel-
oped based on the IFRS taxonomy published by the IFRS
Foundation. The annual report submitted to the Danish
Financial Supervisory Authority (the Officially Appointed
Mechanism) consists of the XHTML document together
with the technical files, all of which are included in the ZIP
file DFDS-2021-12-31-en.zip.
Key figures
Key figures are calculated in accordance with the latest
version of the Danish Finance Society’s guidelines, ‘Recom-
mendations and Financial Ratios’. The key figures stated
in the overview with consolidated financial highlights are
defined on the ‘Definitions and Glossary’ page.
1. Basis of preparation of the Consolidated Financial Statements (continued)
86
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million Note 2021 2020
Revenue 2.1, 2.2 17,869 13,971
Costs:
Ferry and other ship operation and maintenance 2.3 -3,880 -2,569
Freight handling -2,598 -2,383
Transport solutions -3,893 -2,905
Employee cost 2.4 -3,444 -2,862
Cost of sales and administration 2.3 -643 -520
Operating profit before depreciation (EBITDA) and special items 3,411 2,732
Share of profit/loss from associates and joint ventures -13 -5
Profit on disposal of non-current assets, net 3.1.4 2 5
Amortisation, depreciation and impairment losses on intangible assets and
tangible assets and Right-of-use assets 2.5 -2,087 -1,873
Operating profit (EBIT) before special items 1,313 858
Special items, net 2.6 34 -117
Operating profit (EBIT) 1,348 741
Corporate income tax on EBIT
1)
-107 -60
Net Operating Profit After Tax (NOPAT) 1,240 680
Net Operating Profit After Tax (NOPAT) before special items 1,206 798
Return on invested capital (ROIC)
2)
5.3% 3.0%
Return on invested capital (ROIC) before special items
2)
5.2% 3.5%
EBIT
Corporate Income Tax
on EBIT
ROIC
NOPAT
(Section 2)
1)
Corporate income tax is
calculated for each entity
within the Group following the
tax legislation and current tax
rate in each tax jurisdiction
adjusted by the tax effect
from financial items. The
amounts per entity are then
consolidated.
2)
The increase in ROIC compared
to 2020 is primarily related
to a increase in Net Operating
Profit After Tax (NOPAT) as
2020 was impacted by the
Covid-19 situation.
Return on invested capital (ROIC) is a strategic key
ratio to DFDS when measuring the financial perfor-
mance of our business. DFDS’ minimum return target
goal is a ROIC of at least 8.0%. The financial ambi-
tion of Win23 is to reach a return on invested capital
(ROIC) towards 10% in 2023.
This section provides the notes of the main compo-
nents that forms the basis of Net operating profit
after tax (NOPAT) which is a measure of profit that
excludes the costs and tax benefit of debt financing
by measuring the earnings before interest and taxes
(EBIT) adjusted for corporate income tax on EBIT.
Together with invested capital, NOPAT forms the
basis of the ROIC calculation. Reference is made to
section 3.
2. Net Operating Profit After Tax (NOPAT)
Invested Capital excl.
Net Working Capital
(Section 3.1)
Invested Capital
(Section 3)
Net Working Capital
(Section 3.2)
87
DFDS Annual Report 2021
Consolidated Financial Statements
2.1 Segment information
The segments together with allocation of operating prof-
it, assets and liabilities etc. are identical with the internal
reporting structure of the Group. Management has defined
the Groups’ business segments based on the reporting
regularly presented to the Group Executive Management,
which also forms the basis for management decisions. Seg-
ment performance is evaluated by management based on
EBITDA before special items and EBIT before special items .
The costs of the segments are the directly recorded costs
including a few systematically allocated indirect costs,
primarily concerning Group functions.
Non-allocated costs reflect the general functions which
cannot reasonably be allocated to the segments. The costs
consist primarily of costs concerning the Executive Board
and Board of Directors but also Group functions such as
Treasury, Investor Relations, Legal, Procurement, Commu-
nication, and Finance etc. In addition, the elimination of
transactions between segments is included. Transactions
between segments are concluded at arm’s length terms.
Segment assets include assets which are directly related
to the segment such as non-current intangible, non-current
tangible, other non-current and Right-of-use assets, inven-
tories, receivables, prepayments, and cash. Segment liabil-
ities include current and non-current liabilities.
The Ferry Division’s activities are divided into five business
areas: North Sea, Mediterranean, Channel, Baltic Sea and
Passenger.
Ferry Division operates ferry routes in and around Europe
transporting freight units, mainly trailers, and passengers.
The routes deploy a mix of freight ferries, freight and pas-
senger ferries as well as passenger cruise ferries. In addi-
tion, port terminals are owned and/or operated at strate-
gic hubs of the route network. The freight customers are
mainly forwarders and hauliers as well as manufacturers
of heavy industrial goods. The main passenger customer
groups are passengers travelling with own cars, mini cruise
passengers, tour operators, and business conferences.
The Logistics Division’s activities are divided into two busi-
ness areas: Dry Goods and Cold Chain.
Logistics Division provides transport solutions for full- and
part loads as well as contract logistics solutions, including
warehousing. In addition, container ships, including vessel
sharing agreements with other container operators, are
operated. The customers are primarily manufacturers of
industrial goods and consumables as well as retailers.
DKK million 2021
Ferry
Division
Logistics
Division
Non-
allocated Total
External revenue 10,770 7,081 18 17,869
Intragroup revenue 1,036 74 508 1,618
Revenue 11,806 7,155 526 19,487
Operating costs, external -8,411 -5,516 -531 -14,458
Intragroup operating costs -542 -1,047 -30 -1,618
Operating profit before depreciation
(EBITDA) and special items 2,852 593 -34 3,411
Share of profit/loss of associates and joint ventures -13 0 0 -13
Profit on disposal of non-current assets, net 4 -1 0 2
Depreciation, amortisation and impairment losses on
other non-current assets -1,684 -322 -81 -2,087
Operating profit (EBIT) before special items 1,160 269 -116 1,313
Special items, net 12 2 20 34
Operating profit (EBIT) 1,172 271 -96 1,348
Financial items, net -278
Profit before tax 1,069
Tax on profit -94
Profit for the year 976
Capital expenditures of the year 1,644 2,400
1)
71 4,115
Investments in associates and joint ventures 23 3 0 26
Total assets excluding assets held for sale 23,556 5,899 1,266 30,721
Liabilities 11,897 2,519 4,751 19,167
1)
Addition of capital expendi-
tures of the year primarily re-
lates to the acquisition of HSF
Logistics Group. Reference is
made to note 5.5.
88
DFDS Annual Report 2021
Consolidated Financial Statements
2.1 Segment information (continued)
DKK million 2020
Ferry
Division
1)
Logistics
Division
1)
Non-
allocated Total
External revenue 8,690 5,263 18 13,971
Intragroup revenue 755 39 474 1,269
Revenue 9,445 5,301 491 15,238
Operating costs, external -6,732 -3,999 -508 -11,239
Intragroup operating costs -398 -840 -29 -1,268
Operating profit before depreciation
(EBITDA) and special items 2,315 462 -45 2,732
Share of profit/loss of associates and joint ventures -5 0 0 -5
Profit on disposal of non-current assets, net 0 4 0 5
Depreciation, amortisation and impairment losses on
other non-current assets -1,509 -292 -72 -1,873
Operating profit (EBIT) before special items 802 173 -117 858
Special items, net -98 -12 -7 -117
Operating profit (EBIT) 703 161 -124 741
Financial items, net -275
Profit before tax 466
Tax on profit -24
Profit for the year 442
Capital expenditures of the year 1,518 82 75 1,675
Investments in associates and joint ventures 35 0 4 39
Assets held for sale, reference is made to note 3.1.6 182 0 0 182
Total assets excluding assets held for sale 22,480 2,500 1,843 26,824
Liabilities 11,577 1,025 3,804 16,406
Geographical breakdown
The Group does not have a natural geographic split on coun-
tries since the Group, mainly Ferry Division, is based on a
connected route network in primarily Northern Europe and
Mediterranean. The routes support each other with sales
and customer services located in one country whereas the
actual revenue is created in other countries. Consequently,
it is not possible to present a meaningful split of revenues
and non-current assets by country. The split is therefore
presented by the sea and geographical areas in which DFDS
operates. The geographical split of revenue is shown in the
revenue note. Reference is made to note 2.2.
The applied split results in seven geographical areas: North
Sea, Baltic Sea, English Channel, Continent, Nordic, UK/Ire-
land and Mediterranean. As a consequence of the Group’s
business model, the routes do not directly own the ferries,
but charter the ferries from a Group internal vessel pool.
The ferries are frequently moved within the Group’s routes.
Furthermore, certain non-current assets such as IT-soft-
ware and headquarter owned corporate assets are for the
benefit for the entire Group. It is therefore not possible to
meaningfully estimate the exact value of the non-current
assets per geographical area. Instead an adjusted alloca-
tion has been used.
DKK million
North
Sea
Baltic
Sea
English
Channel Continent
Medi-
terranean Nordic
UK/
Ireland Total
2021
Non-current assets 8,375 1,777 2,402 2,323 1,412 477 9,041 25,807
2020
Non-current assets
7,784 1,627 1,967 798 9,330 338 460 22,304
Accounting policies
The segment information has been compiled in con-
formity with the Group’s accounting policies, and is in
accordance with the internal management reports.
1)
North Sea port logistics ac-
tivities have been transferred
from the Ferry Division to the
Logistics Division per 1 Janu-
ary 2021. 2020 comparative
figures have been restated
accordingly.
Ferry Division
Revenue before restatement
amounts to DKK 9,687m
and after restatement DKK
9,445m EBITDA before
restatement amounts DKK
2,332m and after restatement
2,315m.
Logistics Division
Revenue before restatement
amounts to DKK 5,059m
and after restatement DKK
5,301m EBITDA before
restatement amounts DKK
445m and after restatement
DKK 462m.
The restatement did not im-
pact Non-allocated segment.
89
DFDS Annual Report 2021
Consolidated Financial Statements
1)
North Sea port logistics ac-
tivities have been transferred
from the Ferry Division to the
Logistics Division as per 1 Jan-
uary 2021. 2020 comparative
figures have been restated
accordingly.
DKK million 2020
Ferry
Division
Logistics
Division
Non-
allocated Total
Geographical markets
North Sea
1)
3,459 - 0 3,459
Mediterranean 2,052 - 0 2,052
Baltic Sea 1,207 - 0 1,207
English Channel 1,972 - 0 1,972
Continent
1)
- 2,312 0 2,312
Nordic
1)
- 1,540 0 1,540
UK/Ireland
1)
- 1,410 0 1,410
Other 0 0 18 18
Total 8,690 5,263 18 13,971
Product and services
Seafreight and shipping logistics solutions 6,749 1 0 6,750
Transport solutions 7 4,998 0 5,005
Passenger seafare and on board sales 968 0 0 968
Terminal services 550 116 0 667
Charters including related income 317 0 0 317
Agency and other revenue 99 147 17 264
Total 8,690 5,263 18 13,971
2.2 Revenue
DKK million 2021
Ferry
Division
Logistics
Division
Non-
allocated Total
Geographical markets
North Sea 3,849 - 0 3,849
Mediterranean 2,968 - 0 2,968
Baltic Sea 1,350 - 0 1,350
English Channel 2,603 - 0 2,603
Continent - 3,156 0 3,156
Nordic - 2,327 0 2,327
UK/Ireland - 1,598 0 1,598
Other 0 0 18 18
Total 10,770 7,081 18 17,869
Product and services
Seafreight and shipping logistics solutions 8,432 98 0 8,530
Transport solutions 24 6,778 0 6,802
Passenger seafare and on board sales 976 0 -1 976
Terminal services 851 6 0 856
Charters including related income 311 0 0 311
Agency and other revenue 176 199 18 393
Total 10,770 7,081 18 17,869
Revenue includes revenue recognised from contracts with
customers in accordance with IFRS 15 and other reve-
nue (leasing activities). Revenue from leasing activities
amounts to DKK 336m (2020: DKK 348m).
On board sales amounts to DKK 449m (2020: DKK 313m)
and is recognised at “a point in time”.
90
DFDS Annual Report 2021
Consolidated Financial Statements
2.3 Costs
DKK million 2021 2020
Ferry and other ship operation and maintenance
Ferry and other ship cost including charter related cost 1,583 1,255
Bunker 2,297 1,314
Total ferry and other ship operation and maintenance 3,880 2,569
Accounting policies
Ferry and other ship cost comprise costs of sales re-
lated to catering as well as maintenance and daily
running costs of ferries and other ships. Bunker con-
sumption includes hedging. Impairments and realised
losses on trade receivables are included in ferry and
other ship operation and maintenance.
Freight handling and Transport solutions are cost re-
lated to land-based activities such as stevedoring, ter-
minal, and haulage costs.
Costs of sales and administration comprise costs of
sales, marketing, and administration.
2.4 Employee cost
DKK million 2021 2020
Wages, salaries and remuneration 2,839 2,442
Hereof capitalised employee costs -33 -46
Defined contribution pension plans 139 119
Defined benefit pension plans 7 7
Other social security costs 284 256
Share based payment 37 7
Other employee costs 226 199
Government grants (Covid-19) -55 -122
Total employee costs 3,444 2,862
Full time equivalents (FTE) 8,874 8,213
Reference is made to note 3.2.4 for detailed information
on pension plans, note 5.1 for detailed information on re-
muneration of Management and note 5.3 for detailed in-
formation on the Group’s share option schemes and shares
held by the Management.
Accounting policies
Wages, salaries, social security contributions, pension
contributions, paid annual leave and sick leave, bo-
nuses, and non-monetary benefits are accrued in the
year in which the associated services are rendered by
employees of the Group. Where the Group provides
long-term employee benefits, the costs are accrued to
match the rendering of the services by the employees.
2.2 Revenue (continued)
Accounting policies
Revenue from transport of passengers, freight and
from rendering terminal and warehouse services etc, is
recognised in the Income statement at the time of de-
livery of the service to the customer, which is the time
where the control is transferred and when each sepa-
rate performance obligation in the customer contract
is fulfilled following the “over-time principle”. Some
of the ferry and freight transports have a series of
performance obligations, but as the duration of these
transports are short term the impact from splitting
these contracts into “distinct services” will not have
material impact.
Most transports carried out by the Ferry Division are
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 the Logistics
Division can take delivery over a longer period.
Revenue from chartering out ferries is recognised
straightline over the duration of the agreement.
On board sales is recognised at a “point in time”.
Revenue is measured at fair value excluding value
added tax and after deduction of trade discounts.
Trade receivables are not adjusted for any financing
component when recognised. The general credit terms
are overall short and are following market terms.
Accounting estimates and judgements are made in
order to determine time of delivery and accrue for rel-
evant income along with evaluation of pricing. These
accounting estimates and judgements are based on
experience and historical sales figures along with a
continuous follow-up on service delivered.
91
DFDS Annual Report 2021
Consolidated Financial Statements
2.6 Special Items, net
DKK million 2021 2020
Acquisition and integration costs relating to HSF Logistics Group -29 0
Accounting gain on sale of Liverpool Seaways 0 110
Accounting gain on sale of Gothia Seaways 20 0
Accounting gain on sale of Calais Seaways 26 0
Accounting gain on sale of office and warehousing building in Belgium 31 0
Accounting gain related to disposal of an associated company 16 0
Reversal of accrued cost related to Jubilee shares 4 4
Restructuring costs etc. -63 -102
Impairment of a passenger ferry and a terminal in the business unit Passenger 0 -100
Reversal of impairment of a freight ferry made in connection with reclassification to asset
held for sale (2020: Impairment of a freight ferry made in connection with reclassification
to assets held for sale) 29 -29
Special items, net 34 -117
If special items had been included in the operating profit before special items,
they would have been recognised and have effect as follows:
Operating costs -89 0
Employee costs 0 -99
Operating profit before depreciation (EBITDA) and special items -89 -99
Profit on disposal of non-current assets and associates, net 94 110
Amortisation, depreciation, and impairment losses on intangible and tangible assets 29 -129
Operating profit (EBIT) before special items 34 -117
Accounting policies
Special items include significant income and expenses
not directly attributable to the Group’s recurring oper-
ating activities such as material restructuring of pro-
cesses and significant organisational restructurings/
changes which are of significance over time. In addi-
tion, other non-recurring amounts are classified as spe-
cial items including impairment of goodwill; significant
impairments and reversal of impairments of non-cur-
rent tangible assets; significant acquisition costs and
integration costs in connection with large business
combinations; changes to estimates of contingent con-
siderations related to business combinations; gains
and losses on the disposal of activities; and significant
gains and losses on the disposal of non-current assets.
These items are classified separately in the income
statement in order to provide a more transparent view
of income and costs that are considered not to have
recurring nature.
2.5 Amortisation, depreciation and impairment losses for the year
DKK million 2021 2020
Amortisation and depreciation for the year:
Software 44 40
Other non-current intangible assets 55 54
Land & Buildings 9 8
Terminals 49 49
Ferries and other ships 850 909
Equipment etc. 206 174
Right-of-use assets 874 639
Total amortisation, depreciation and impairment losses for the year 2,087 1,873
Accounting policies
Amortisation and depreciation for the year are recog-
nised based on the amortisation and depreciation
profiles of the underlying assets. Reference is made to
note 3.1.1, 3.1.2 and 3.1.3.
92
DFDS Annual Report 2021
Consolidated Financial Statements
The majority of the ferry activities performed in the Dan-
ish, Turkish, French, Lithuanian, Norwegian, and Dutch
enterprises in the Group are included in local tonnage tax
schemes where the taxable income related to transporta-
tion of passengers and freight is calculated based on the
tonnage deployed during the year and not the actual prof-
its generated. Taxable income related to other activities is
taxed according to the normal corporate income tax rules
and at the standard corporate tax rates.
In 2021, the Group realised an effective tax rate adjusted
for prior years’ tax of 10.0% (2020: 10.3%) combined and
24.1% (2020: 32.8%) on income subject to normal corpo-
rate income tax.
Addition on acquisition of enterprises relates to the acqui-
sition of the HSF group in 2021. The movement in deferred
tax recognised in other comprehensive income primarily
relates to value adjustments of defined benefit pension
schemes in UK.
DFDS A/S and its Danish subsidiaries are subject to com-
pulsory joint taxation with Lauritzen Fonden Holding ApS
and its Danish controlled enterprises. Lauritzen Fonden
Holding ApS is the administration company in the joint
taxation and settles all payments of corporation tax due
by the joint taxed enterprises with the tax authorities. In
accordance with the Danish rules on joint taxation, DFDS
A/S and its Danish subsidiaries are liable for their own cor-
porate tax due and are only subsidiary and pro rata liable
for the corporation tax liabilities towards the Danish tax
authorities for all other enterprises that are part of the
Danish joint taxation.
DKK million 2021
Deferred tax
Ferries and
other ships
Land and
buildings,
terminals
and other
equipment Provisions
Tax loss
carried
forward Other Total
Deferred tax at 1 January 174 28 -28 -11 -2 160
Foreign exchange adjustments -3 0 -1 0 0 -5
Impact from change in corporate income tax rate 0 1 0 0 0 2
Addition on acquisition of enterprises 0 151 0 0 -2 150
Recognised in the Income statement -8 -2 4 -4 13 3
Recognised in other comprehensive income 0 0 24 0 1 25
Adjustment regarding prior years recognised
in the Income statement -9 1 1 -2 9 0
Write-down of deferred tax assets 0 0 0 1 0 1
Reversal of write-down of deferred tax assets 0 0 0 -1 0 -1
Deferred tax at 31 December 154 180 -1 -18 19 334
2.7 Tax
DKK million 2021 2020
Tax in the Income statement:
Current tax -104 -46
Current joint tax contributions 0 -4
Movement in deferred tax for the year -28 11
Adjustment to corporation tax in respect of prior years 14 19
Adjustment to deferred tax in respect of prior years 0 1
Effect of change in corporate income tax rate -2 2
Write-down of deferred tax assets -1 0
Reversal of write-down of deferred tax assets 1 3
Tax for the year -120 -14
Tax for the year is recognised as follows:
Tax in the Income statement -94 -24
Tax in Other comprehensive income -26 9
Tax for the year -120 -14
Tax in the income statement can be specified as follows:
Profit before tax 1.069 466
Adjustment regarding income subject to tonnage tax -640 -329
Profit before tax subject to corporate income tax 430 137
22% tax of profit before tax -95 -30
Adjustment of calculated tax in foreign subsidiaries compared to 22% 3 -2
Tax effect of:
Non-taxable/-deductible items -41 -10
Tax asset for the year, not recognised -10 -10
Utilisation of non-capitalised tax assets 39 8
Adjustments of tax in respect of prior years 13 24
Corporate income tax -91 -21
Tonnage tax -3 -3
Tax in the Income statement -94 -24
Effective tax rate (%) 8.7 5.1
Effective tax rate before adjustment of prior years’ tax (%) 10.0 10.3
Tax in Other comprehensive income can be specified as follows:
Corporate income tax -25 11
Movement deferred tax -1 -2
Total tax in Other comprehensive income -26 9
93
DFDS Annual Report 2021
Consolidated Financial Statements
2.7 Tax (continued)
DKK million 2020
Deferred tax
Ferries and
other ships
Land and
buildings,
terminals
and other
equipment Provisions
Tax loss
carried
forward Other Total
Deferred tax at 1 January 172 27 -21 -10 -3 166
Foreign exchange adjustments 6 1 1 0 0 8
Impact from change in corporate income tax
rate -1 1 -2 0 0 -2
Addition on acquisition of enterprises 0 2 0 0 0 2
Recognised in the Income statement -3 -2 4 0 1 0
Recognised in other comprehensive income 0 0 -11 0 0 -11
Adjustment regarding prior years recognised
in the Income statement 0 0 0 1 -1 -1
Reversal of write-down of deferred tax assets 0 0 0 -3 0 -3
Deferred tax at 31 December 174 28 -28 -11 -2 160
DKK million 2021 2020
Deferred tax is recognised in the balance sheet as follows:
Deferred tax assets -31 -57
Deferred tax liabilities 366 217
Deferred tax at 31 December, net 334 160
The Group has unrecognised tax losses carried forward of
DKK 591m with a tax value of DKK 144m (2020: tax losses
of DKK 593m, tax value of DKK 130m). Of the unrecog-
nised tax losses carried forward of DKK 591m (2020: DKK
593m) an amount of DKK 489m expires within the next
five years (2020: DKK 486m) and DKK 102m expires after
more than five years (2020: DKK 107m). The tax losses of
DKK 591m (2020: DKK 593m) have not been recognised as
it has been assessed that the losses cannot be utilised in
the foreseeable future.
The majority of the ferry activities performed in the Dan-
ish, Turkish, French, Lithuanian, Norwegian and Dutch en-
terprises in the Group are included in local tonnage tax
schemes. If the companies under tonnage taxation with-
draw from the tonnage taxation schemes, a deferred tax
liability in the amount of maximum DKK 942m may be
recognised (2020: DKK 786m).
The companies are not expected to withdraw from the
scheme and consequently no deferred tax relating to as-
sets and liabilities subject to tonnage taxation has been
recognised.
Significant accounting estimates and assessments
Deferred tax assets, including the tax value of tax
losses carried forward, are recognised to the extent
that Management assesses that the tax asset can be
utilised through positive taxable income in the fore-
seeable future which usually is within 3-5 years. As-
sessment is performed annually based on forecasts,
business initiatives and likely structural changes for
the coming years.
Accounting policies
Tax for the year comprises income tax, tonnage tax,
and joint taxation contribution for the year of Dan-
ish subsidiaries as well as changes in deferred tax for
the year. Additionally, the tax for the year comprises
adjustments to prior years taxes and changes in the
assessment of provisions for uncertain tax positions.
The tax for the year is recognised in the Income state-
ment or in the equity in correlation to the underlying
transaction.
The current payable Danish corporation tax is allocat-
ed by the settlement of a joint taxation contribution
between the jointly taxed companies in proportion to
their taxable income. Companies with tax losses re-
ceive joint taxation contributions from companies that
have been able to utilise the tax losses to reduce their
own taxable profit.
Tax computed on the taxable income and tonnage
tax for the year is recognised in the balance sheet as
payable or receivable corporate tax considering on-ac-
count/advance payments.
Deferred tax is provided using the liability method on
temporary differences between the carrying amount
and the tax base of the assets and liabilities at the re-
porting date. However, deferred tax is not recognised
on temporary differences relating to non-tax-deduct-
ible goodwill that arose on acquisition date without
impacting the result or taxable income.
Deferred tax relating to assets and liabilities subject
to tonnage taxation is recognised to the extent that
deferred tax is expected to crystallise. Deferred tax
assets are recognised for all deductible temporary dif-
ferences and the carry forward of any unused tax loss-
es. Deferred tax assets are recognised to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences,
and the carry forward of unused tax losses, can be uti-
lised in the foreseeable future. The carrying amount is
reviewed at each reporting date.
Deferred tax is measured on the basis of the expected
use and settlement of the individual assets and liabil-
ities and according to the tax rules and at the known
tax rates applicable at the balance sheet date when
the deferred tax is expected to crystallise as current
tax. The change in deferred tax as a result of changes
in tax rates is recognised in the Income statement.
Uncertain tax positions are measured, depending on
the type, either as a probability-weighted average of
possible outcomes or as the most likely outcome. Un-
certain tax positions are recognised either as payable/
receivable tax and/or as deferred tax assets/liabilities.
94
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million Note 2021 2020
Invested capital excl. Net Working Capital:
Non-current intangible assets 3.1.1 6,252 4,901
Non-current tangible assets 3.1.2 15,263 13,734
Right-of-use assets 3.1.3 3,926 3,133
Investments in associates and joint ventures 26 39
Assets classified as held for sale 3.1.6 0 182
Invested capital excl. Net Working Capital 25,467 21,989
Net Working Capital:
Receivables (excluding interest-bearing receivables) 3.2.1 3,437 2,489
Inventories 3.2.2 269 169
Prepaid costs 521 646
Derivatives, related to operating activities,
financial assets measured at fair value 4.2 36 214
Derivatives, related to operating activities,
financial liabilities measured at fair value 4.2 -2 -53
Pension assets 3.2.4 25 0
Pension and jubilee liabilities 3.2.4 -76 -197
Other provisions 3.2.5 -173 -124
Trade payables -3,119 -2,090
Corporation tax -113 -61
Other payables 3.2.3 -730 -725
Prepayments from customers -171 -136
Net Working Capital -98 132
Invested capital 25,369 22,121
Average invested capital 23,324 22,500
EBIT
Corporate Income
Tax on EBIT
Invested Capital excl.
Net Working Capital
(Section 3.1)
Invested Capital
(Section 3)
ROIC
NOPAT
(Section 2)
Net Working Capital
(Section 3.2)
Invested capital is a key component when calculat-
ing ROIC. Reference is made to section 2 for more
details about ROIC.
The following section provides the notes of the main
components that forms basis of the Invested capital
being Non-current intangible, tangible assets and
Right-of-use assets and Net Working Capital being
Net current assets (Non interest-bearing current as-
sets minus Non interest-bearing current liabilities)
plus non-current prepaid costs minus Pension and
Jubilee liabilities and Other provisions.
Furthermore, notes that are closely related to the
Non-current intangible, tangible assets and Right-of
use assets such as Impairment testing and Profit on
disposal of non-current assets are also included in
this section.
3 Invested Capital
95
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million
Goodwill
Port conces-
sion rights
etc.
Other non-
current
intangible
assets Software
Development
projects in
progress Total
Cost at 1 January 2020 3,561 1,218 109 525 25 5,439
Foreign exchange adjustments -20 -5 -2 0 0 -26
Addition on acquisition of enterprises
11
4)
0 6
5)
0 0 16
Additions 0 0 0 2 68
6)
70
Disposals 0 0 0 -1 0 -1
Transfers 0 0 0 37 -38 -1
Cost at 31 December 2020 3,552 1,214 113 562 55 5,496
Amortisation and impairment
losses at 1 January 2020 121 75 25 284 0 505
Foreign exchange adjustments -2 0 -1 0 0 -3
Amortisation charge 0 43 11 40 0 94
Disposals 0 0 0 -1 0 -1
Transfers 0 0 0 -1 0 1
Amortisation and impairment
losses at 31 December 2020 119 117 36 323 0 595
Carrying amount at
31 December 2020 3,434 1,096 77 239 55 4,901
3.1.1 Non-current intangible assets
DKK million
Goodwill
Port conces-
sion rights
etc.
Other non-
current
intangible
assets Software
Development
projects in
progress Total
Cost at 1 January 2021 3,552 1,214 113 562 55 5,496
Foreign exchange adjustments 8 0 2 0 0 10
Addition on acquisition of enterprises
840
1)
0 540
2)
0 0 1,381
Additions 0 0 0 0 62
3)
62
Disposals 0 0 0 -2 0 -2
Transfers 0 0 0 102 -102 0
Cost at 31 December 2021 4,400 1,213 656 663 14 6,947
Amortisation and impairment
losses at 1 January 2021 119 117 36 323 0 595
Foreign exchange adjustments 1 0 1 0 0 2
Amortisation charge 0 35 20 44 0 99
Disposals 0 0 0 -2 0 -2
Transfers 0 0 0 0 0 0
Amortisation and impairment
losses at 31 December 2021 120 152 57 365 0 694
Carrying amount at
31 December 2021 4,280 1,061 599 298 14 6,252
1)
Addition of goodwill relates
to the acquisition of HSF
Logistics Group DKK 756m,
acquired existing goodwill in
HSF Logistics Group DKK 81m
and GA Åkerierna DKK 3m.
Reference is made to note 5.5.
2)
Relates to the acquisition
of HSF Logistics Group DKK
538m and GA Åkerierna AB
DKK 2m. Reference is made to
note 5.5.
3)
Primarily relate to the
implementation of a new
ERP system, which went live
in 2021.
4)
Addition of goodwill primarily
relates to the acquisition of
Colley Brothers DKK 10m. Ref-
erence is made to note 5.5.
5)
Relates to the acquisition of
Colley Brothers DKK 6m. Ref-
erence is made to note 5.5.
6)
Primarily relate to implemen-
tation of a new ERP system.
3.1 Invested Capital excl. Net Working Capital
The carrying amount of completed software and develop-
ment projects in progress primarily relates to a Passenger
booking system, a Transport Management System to the
Logistics Division, an onboard sales system, a new ERP
system, and various digital products.
For further information regarding the impairment tests ref-
erence is made to note 3.1.5.
96
DFDS Annual Report 2021
Consolidated Financial Statements
3.1.1 Non-current intangible assets (continued)
Recognised goodwill is attributable to the following cash generating units:
DKK million 2021 2020
Ferry:
North Sea, Baltic Sea and Mediterranean 2,990 2,991
Logistics:
Dry Goods 346 343
Cold Chain 944 99
Total 4,280 3,434
Accounting policies
Non-current intangible assets - Other than goodwill
Generally the following applies unless otherwise
stated:
• Assets are measured at cost less accumulated am-
ortisation and impairment losses.
• The cost includes costs to external suppliers, ma-
terials and components, direct wages, salaries and
interests paid as from the time of payment until the
date when the asset is available for use.
• The assets are amortised on a straight-line basis
over the estimated useful life.
• The effect from changes in amortisation period or
the residual value is recognised prospectively as a
change in the accounting estimate.
ACCOUNTING POLICIES
Goodwill
At initial recognition goodwill is recognised in the bal-
ance sheet at cost, as described in note 5.5 ‘Business
combinations’. Subsequently, goodwill is measured at
cost less accumulated impairment losses. Goodwill is
not amortised.
An impairment test is performed at least once a year
together with other non-current assets of the Group.
The book value of goodwill is allocated to the Group’s
cash-generating units at the time of acquisition.
Development projects in progress
Development projects in progress, primarily develop-
ment of IT software, are recognised as non-current in-
tangible assets if the following criteria are met:
• the projects are clearly defined and identifiable;
• the Group intends to use the projects once com-
pleted;
• the future earnings from the projects are expected
to cover the development and administrative costs;
and
• the cost can be reliably measured.
The amortisation of capitalised development projects
starts after the completion of the development pro-
ject and is recognised on a straight-line basis over the
expected useful life, which normally is 3-5 years, but
in certain cases up to 10 years (where the latter goes
for significant internally developed commercial and
operational systems).
Other non-current intangible assets
Other non-current intangible assets comprise the
value of customer relations or similar, identified as
part of business combinations, and which has definite
useful life. Other non-current intangible assets are
measured at cost less accumulated amortisation and
impairment losses. Amortisation is recognised on a
straight-line basis over the expected useful life, which
normally is 3-5 years, except from customer portfolio
which is up to 15 years.
Port concession rights
Port concession rights comprise the value of access
to strategically placed ports which are recognised at
their fair value at the acquisition date. Acquired port
concession rights are amortised over the concession
period.
Software & Cloud based systems
Purchased or internally developed IT software which
is controlled by the Group is measured at cost less
accumulated amortisation and impairment losses.
Amortisation is recognised on a straight-line basis over
the expected useful life which normally is 5-10 years.
Cloud based costs related to specified upgrades and
enhancements are only capitalised if the upgrade or
enhancement will result in additional functionality.
97
DFDS Annual Report 2021
Consolidated Financial Statements
3.1.2 Non-current tangible assets
DKK million
Land and
buildings Terminals
Ferries
and other
ships
Equipment
etc.
Assets under
construction
and pre-
payments Total
Cost at 1 January 2021 230 1,174 19,368 1,787 887 23,446
Foreign exchange adjustments 11 20 -19 22 0 34
Addition on acquisition of
enterprises 240
1)
0 0 549
1)
9
1)
798
Additions 2 23 399
2)
143 1,306 1,874
Disposals -24 -3 -344 -101 -3 -475
Transfers 16 15 710
3)
86 -831 -3
Transfers to/from assets classified
as held for sale 7 0 104
4)
0 0 111
Cost at 31 December 2021 482 1,230 20,218 2,486 1,368 25,785
Depreciation and impairment losses
at 1 January 2021 46 454 8,149 1,064 0 9,713
Foreign exchange adjustments 1 13 -4 12 0 22
Depreciation charge 9 49 850 206 0 1,114
Reversal of impairment 0 0 -29
5)
0 0 -29
Disposals -8 -3 -326 -89 0 -426
Transfers 7 -3 0 4 0 8
Transferred to/from assets classi-
fied as held for sale 0 0 118
4)
0 0 118
Depreciation and impairment losses
at 31 December 2021 55 512 8,760 1,197 0 10,522
Carrying amount at
31 December 2021
427 718 11,460
6)
1,289 1,368 15,263
DKK million
Land and
buildings Terminals
Ferries
and other
ships
Equipment
etc.
Assets under
construction
and pre-
payments Total
Cost at 1 January 2020 252 1,158 18,579 1,669 1,034 22,692
Foreign exchange adjustments -10 -21 -37 -19 -1 -89
Addition on acquisition of
enterprises 0 0 0 1 0 1
Additions 0 10 44 66 1,467 1,588
Disposals -3 -1 -211 -89 -1 -306
Transfers -9 28 1,480
7)
159 -1,613 45
Transfers to assets classified as
held for sale 0 0 -486
8)
0 0 -486
Cost at 31 December 2020 230 1,174 19,368 1,787 887 23,446
Depreciation and impairment losses
at 1 January 2020 51 417 7,629 927 0 9,023
Foreign exchange adjustments -1 -12 -12 -10 0 -35
Depreciation charge 8 49 909 174 0 1,140
Impairment charge 0 0 101
9)
0 0 101
Disposals -3 0 -211 -70 0 -284
Transfers -9 -1 0 43 0 34
Transferred to assets classified as
held for sale 0 0 -266
8)
0 0 -266
Depreciation and impairment losses
at 31 December 2020 46 454 8,149 1,064 0 9,713
Carrying amount at
31 December 2020
183 720 11,220 723 887 13,734
For further information regarding the impairment tests ref-
erence is made to note 3.1.5.
1)
Relates to the acquisition of
HSF Logistics Group and GA
Åkerierna AB.
2)
Primarily relates to vessel
swap. DFDS Group buys a
vessel DKK 332m.
3)
Primarily relates to a new-
building DKK 388m, which was
deployed in February 2021.
One freight and passenger
ferry (ro-pax) is on order for
delivery in 2022.
4)
Ark Futura has ceased to be
classified as asset held for sale
during 2021 and consequently
reclassified to ferries and
other ships. Furthermore Calais
Seaways has been classified to
asset held for sale during 2021
and subsequently sold. Refer-
ence is made to note 2.6.
5)
Relates to a reversal of an
impairment of DKK 29m that
was made in 2020 on Ark
Futura. The reversal was made
in connection with classifying
the ferry back from Assets
classified as held for sale.
6)
At year-end 2021 Ferries and
other ships do not include
temporarily idle assets
(2020: DKK 206m).
7)
Primarily relates to the large
new-buildings program. Two
freight ferries were deployed in
February and October 2020 re-
spectively. The last one is sched-
uled for delivery in Q1 2021.
8)
Ark Futura and Gothia Seaways
have been reclassified to asset
held for sale during 2020.
9)
An impairment of DKK 29m
on Ark Futura and DKK 72m
on Crown Seaways have been
recognised in Special items.
98
DFDS Annual Report 2021
Consolidated Financial Statements
3.1.2 Non-current tangible assets (continued)
Accounting policies
Generally the following applies unless otherwise stated:
• Assets are measured at cost less accumulated de-
preciation and impairment losses.
• The cost includes costs to external suppliers, ma-
terials and components, direct wages, salaries and
interests paid as from the time of payment until the
date when the asset is available for use. The cost
price also comprises gains and losses on transac-
tions designated as hedges.
• The basis for depreciation is determined as the cost
less estimated residual value.
• The assets are depreciated on a straight line basis
over the estimated useful life to the estimated re-
sidual value.
• Estimated useful life and estimated residual values
are reassessed at least once a year. In estimating the
estimated useful life for ferries and other ships it
is taken into consideration that DFDS continuously
is spending substantial funds on ongoing mainte-
nance.
• The effect from changes in depreciation period or
the residual value is recognised prospectively as a
change in the accounting estimate.
Ferries and other ships
The rebuilding/upgrade of ferries and other ships is cap-
italised if the rebuilding/upgrade can be attributed to:
• Safety measures.
• Measures to extend the useful life of the ferries and
other ships.
• Measures to reduce climate impact.
• Measures to improve earnings.
• Docking.
Maintenance and daily running costs for the ferries
and other ships are expensed in the Income statement
as incurred.
Docking costs are capitalised and depreciated on a
straight line basis until the ferry’s or ship’s next dock-
ing. In most cases, the docking interval is 2 years for
passenger cruise ferries and 2½ years for freight and
passenger ferries as well as freight ferries.
Gains or losses on the disposal of ferries and other
ships are calculated as the difference between sales
price less sales costs and the book value at dispos-
al date. Gains or losses on the disposal of ferries and
other ships are recognised when substantially all risks
and rewards incident to ownership have transferred to
the buyer and are presented in the Income Statement
as ‘Profit on disposal of non-current assets, net’ or
‘Special items’ if the gain/loss is significant.
Accounting policies (continued)
Passenger cruise ferries and freight and passenger
(ro-pax) ferries
Due to differences in the wear of certain components
of passenger cruise ferries and ro-pax ferries, the cost
of these ferries is divided into components with low
wear, such as hull and engine, and components with
high wear, such as parts of the hotel, catering/restau-
rants and shop areas.
Freight ferries (ro-ro)
The cost of freight ferries is not divided into compo-
nents as there is no material difference in the wear of
the various components of freight ferries.
Depreciation – expected useful life and residual value
The depreciation period for components with low wear
is 35 years for freight and passenger and freight ferries
from the year in which the ferry was built. The depre-
ciation period for passenger cruise ferries is 45 years.
The residual value is calculated as the value of the fer-
ry’s steel less estimated costs of disposal.
Components with high wear are normally depreciated
over 5-15 years down to a residual value of DKK 0.
Other non-current tangible assets
Other non-current tangible assets comprise buildings,
terminals and machinery, tools and equipment, and
leasehold improvements.
The estimated useful lifetimes are as follows:
Buildings 25-50 years
Terminals etc. 10-40 years
Equipment etc 4-10 years
Leasehold improvements
Max. depreciated over
the term of the lease
Gains or losses arising from the disposal of other
non-current tangible assets are calculated as the dif-
ference between the disposal price less disposal costs
and the book value at the date of disposal. Gains or
losses on the disposal of these non-current assets are
recognised in the Income statement as ‘Profit on dis-
posal of non-current assets, net’ unless they qualify to
be a special item, reference is made to note 2.6.
99
DFDS Annual Report 2021
Consolidated Financial Statements
1)
Addition on acquisition of
enterprises relates to HSF
Logistics Group.
2)
Addition/remeasurement
primarily relates to a 10 year
charter contract for a freight
and passenger ferry as well as
other new charter contracts
for ferries.
3)
An impairment of DKK 28m
on a terminal in business unit
Passenger has been recog-
nised in Special items.
3.1.3 Leases
The Group has lease contracts for various items of Land
& buildings, terminals, ferries, equipment etc. in its opera-
tions. The Group’s obligations under the leases are secured
by the lessors title to the leased assets. Several lease con-
tracts include extension and termination options and var-
iable lease payments, which are further described below.
Set out below are the carrying amounts of Right-of-use
assets recognised and the movements during the period.
DKK million
Land and
buildings Terminals
Ferries and
other ships
Equipment
etc. Total
Cost at 1 January 2021 424 2,632 735 345 4,136
Addition on acquisition of enterprises 20
1)
0 0 353
1)
373
Additions/Remeasurement 166 107 1,022
2)
73 1,369
Disposals -52 -11 -277 -70 -410
Transfer 0 0 0 4 4
Foreign exchange adjustments -1 84 5 8 96
Cost at 31 December 2021 556 2,812 1,486 713 5,567
Depreciation and impairment losses
at 1 January 2021 150 358 326 170 1,003
Depreciation charge 91 196 472 116 874
Disposals -18 -3 -181 -57 -259
Transfer 0 0 0 0 0
Foreign exchange adjustments 0 16 2 6 23
Depreciation and impairment
losses 31 December 2021 222 566 619 235 1,642
Carrying amount at
31 December 2021 334 2,246 867 479 3,926
DKK million
Land and
buildings Terminals
Ferries and
other ships
Equipment
etc. Total
Cost at 1 January 2020 281 2,352 875 474 3,983
Additions/Remeasurement 146 365 40 41 592
Disposals -6 -9 -172 -144 -331
Transfer 0 0 0 -16 -16
Foreign exchange adjustments 3 -77 -8 -10 -92
Cost at 31 December 2020 424 2,632 735 345 4,136
Depreciation and impairment losses
at 1 January 2020 70 165 257 155 646
Depreciation charge 83 179 244 134 639
Disposals -4 -6 -172 -108 -290
Impairment charges 0 28
3)
0 0 28
Transfer 0 0 0 -6 -6
Foreign exchange adjustments 1 -8 -3 -6 -15
Depreciation and impairment
losses 31 December 2020 150 358 326 170 1,003
Carrying amount at
31 December 2020 274 2,274 410 175 3,133
100
DFDS Annual Report 2021
Consolidated Financial Statements
3.1.3 Leases (continued)
Set out in the following are the carrying amounts of lease liabilities (included under interest-bearing liabilities) and the
movements during the period.
DKK million 2021 2020
As at 1 January 2,926 3,109
Addition on acquisition of enterprises 340 0
Additions/Remeasurement 1,432 544
Payments -834 -602
Disposals -153 -39
Foreign exchange adjustments 127 -86
Total lease liabilities at 31 December 3,839 2,926
In 2021 the Group has paid DKK 929m (2020: DKK 680m)
regarding lease agreements where of interest expenses re-
lated to lease liabilities amount to DKK 95m
(2020: DKK 78m), and repayment of lease liability
amounts to DKK 834m (2020: DKK 602m).
Non-discounted lease liabilities expiring within the following periods from the balance sheet date:
DKK million 2021 2020
Within 1 year 816 586
1-3 years 1,115 787
3-5 years 737 509
After 5 years 1,757 1,515
Total Lease liability, non-discounted 4,425 3,398
Lease liabilities are recognised in the balance sheet as follows:
DKK million 2021 2020
Non-current liabilities 3,118 2,407
Current liabilities 721 519
Total Lease liabilities 3,839 2,926
The following amounts are recognised in the Income statement:
DKK million 2021 2020
Expense relating to short-term leases (included in costs) -1 0
Expense relating to low-value assets (included in costs) -26 -7
Variable lease payments (included in costs) -72 -58
Interest expense on lease liabilities -95 -78
Depreciation, ships -472 -244
Depreciation, other non-current assets -403 -395
Total amount recognised in the income statement -1,069 -782
The following amounts from leases are recognised in the statement of Cash flows:
DKK million 2021 2020
Cash flows from operating activities, gross -100 -65
Interest paid, etc -95 -78
Cash flows from operating activities, net -195 -143
Cash flows from financing activities, net -834 -602
Total cash outflows from leases -1,029 -745
At 31 December 2021 the Group was committed to short-
term and low value leases for an amount of DKK 27m
(2020: DKK 7m).
101
DFDS Annual Report 2021
Consolidated Financial Statements
Significant accounting estimates and assessments
Leases (extension options)
The Group has entered into lease/charter agreements
for ferries with extension options. Management exer-
cises significant judgement in determining whether
these extension options are reasonably certain to be
exercised and in that connection considers all relevant
factors that create an economic and strategic incen-
tive for it to exercise the extention option.
Leases (lease out)
The Group has entered into operating lease/charter
agreements for ferries under usual terms and con-
ditions for such agreements. At inception of each
individual agreement, Management assesses and de-
termines whether the agreement is a finance or an op-
erating leasing agreement.
Accounting policies
The Right-of-use asset and corresponding lease liabil-
ity is recognised at the commencement date, i.e. the
date the underlying asset is ready for use. Right-of-
use assets are measured at cost corresponding to the
lease liability recognised, adjusted for any lease pre-
payments including dismantling and restoration costs.
The lease liabilities are measured at the present value
of lease payments to be made over the lease term. The
lease payments are discounted using DFDS’ incremen-
tal borrowing rate.
Depreciation follows the straight-line method over the
lease term or the useful life of the Right-of-use assets,
whichever is shortest. However, for one terminal the de-
preciation is based on volumes handled in the terminal.
The lease payments include fixed payments less any
lease incentives receivable and variable lease pay-
ments that depend on an index or a rate. If the con-
tract holds an option to purchase, extend or terminate
a lease and it is reasonably certain to be exercised by
the Group, the lease payment will include those. The
variable lease payments that do not depend on an
index or a rate are recognised as expense in the peri-
od on which the event or condition that triggers the
payment occurs.
The Group applies the short-term lease recognition
exemption for lease contracts that, at the commence-
ment date, have a lease term of 12 months or less for
all classes of underlying assets except for terminals
and ferries and other ships, and the exemption for
lease contracts for which the underlying asset is of
low value. Lease payments on short-term leases and
leases of low-value assets are recognised as expenses
on a straight-line basis over the lease term.
For all classes of assets, except for terminals, non-
lease components, i.e. the service element, is separat-
ed from the lease components and thereby form part
of the Right-of-use asset and lease liability recognised
in the balance sheet.
The Group has lease contracts for various items of
Land & buildings, terminals, ferries and other ships,
equipment, and other assets used in its operations.
Leases normally have the following lease terms:
Land & Buildings 3 – 7 years
Terminals 10 – 40 years
Ferries and other ships up to 10 years
Equipment 3 – 7 years
Other assets 1 – 3 years
Rental and lease matters (lease out)
For accounting purposes, assets leased out are divided
into finance and operating leases.
In respect of assets leased out on a finance lease, an
amount equal to the net present value of the future
lease payments is recognised in the balance sheet as
a lease receivable from lessee. The asset leased out is
reclassified from non-current asset to leases receiva-
bles and any gain or loss arising from this is recognised
in the income statement.
Lease income from assets leased out on an operat-
ing lease is recognised in the Income statement on a
straight line basis over the lease term.
3.1.3 Leases (continued)
The Group has two terminal lease contracts that contains
variable payments based on the number of transferred
units. The terms align the lease expense with the units
transferred and revenue earned. The following provides
information on the Group’s variable lease payments in re-
lation to fixed payments:
Fixed
payments
Variable
payments 2021
Fixed
payments
Variable
payments 2020
Fixed rent 93 - 93 86 - 86
Variable lease payment 30 37 67 30 27 57
Variable rent only - 35 35 - 31 31
Total 31 December 123 72 195 116 58 174
A 10% increase in units transferred would increase total
lease payments by 7%.
The Group has lease contracts for ferries and terminals
that include extension and termination options. These op-
tions provide flexibility in managing the leased-asset port-
folio and align with the Group’s business needs.
Group as a lessor
Future minimum receivable under non-cancellable operating leases as at 31 December are as follows:
Operating lease commitments (lessor)
DKK million 2021 2020
Minimum lease payments (income)
Ferries
Within 1 year 386 309
1-3 years 625 144
3-5 years 442 145
After 5 years - 14
Total ferries 1,453 613
The specified minimum payments are not discounted. Op-
erating lease and rental income recognised in the Income
statement amount to DKK 336m in 2021 (2020: DKK
348m). The contracts are entered into on normal condi-
tions.
102
DFDS Annual Report 2021
Consolidated Financial Statements
3.1.4 Profit on disposal of non-current assets, net
DKK million 2021 2020
Profit and losses (net) on disposal of intangible assets, property,
plant and equipment and Right-of-use assets 2 5
Gain on disposal of enterprises, associates and joint ventures 0 0
Total profit on disposal of non-current assets, net 2 5
Accounting policies
Profit/loss on disposal of non-current intangible, tan-
gible and Right-of-use assets is calculated as the dif-
ference between the disposal price and the carrying
amount of net assets at the date of disposal, including
disposal costs.
Introduction
DFDS impairment tests all non-current assets at least once
every year and in case of indication of impairment. Due
to Covid-19 quarterly impairment assessments have been
made in 2021.
Definition of cash-generating units
The breakdown into cash-generating units takes its start-
ing point in the internal structure of the two segments,
Ferry and Logistics, and their business areas, including
the strategic, operational and commercial management
and control of these, both separately and across business
areas, and the nature of the customer services provided.
Based on this the following six cash-generating units have
been identified:
Ferry CGU:
• The business areas North Sea, Baltic Sea and Mediter-
ranean
• The business area English Channel
• The Oslo – Frederikshavn - Copenhagen route which is
part of the Passenger business area
• The Amsterdam – Newcastle route which is part of the
Passenger business area
Logistics CGU:
• Dry Goods
• Cold Chain
These CGUs reflect the reorganisation of the Logistics Divi-
sions that took place during 2021 as a consequence of the
acquisition of the HSF Logistics Group.
Non-current intangible and tangible assets as well as
Right-of-use assets are assigned to the above mentioned
cash-generating units, unless this cannot be done with a
reasonable degree of certainty. Software and other assets
which cannot with reasonable certainty be assigned to one
or more of the above cash-generating units are tested for
impairment as a non-allocated Group asset, i.e. on the basis
of Group earnings.
The vast majority of the ships used in the business areas
‘North Sea’, ‘Baltic Sea’ and ‘Mediterranean’ are interchange-
able and it is centrally decided where and how the ferries
are deployed on the various routes. Revenue generation is
impacted by the capacity deployed on the different routes.
Management therefore concludes that interdependency be-
tween the three business areas in respect of taking decision
on capacity is of such extent that cash inflows are not largely
independent from each other and consequently, these three
business areas are treated as one cash-generating unit.
Basis for impairment testing and calculation
of recoverable amount
In the impairment test for cash-generating units, the re-
coverable amount of the unit is compared with its carrying
amount. The recoverable amount is the higher value of its
value-in-use and its fair value less costs of disposal. If the
recoverable amount is less than the carrying amount, the
latter is written down to the lower value.
The value-in-use is calculated as the discounted value of
the estimated future net cash flows per cash-generating
unit. Impairment testing (value-in-use) is performed based
on management approved forecasts for 2022 and business
plans beyond 2022. Key parameters for the forecast periods
are trends in revenue, EBIT, EBIT margin, future investments,
and growth expectations. These parameters are determined
specifically for each individual cash-generating unit. Growth
is incorporated in forecasts for periods beyond 2022 and in
the terminal period with reference to the growth rate and
cash flow section below.
The recoverable amount for cash-generating units contain-
ing goodwill is determined based on value-in-use calcula-
tions. For a breakdown of goodwill on cash-generating units,
reference is made to note 3.1.1.
The fair value of the Group’s main assets, ferries and other
ships, is determined on the basis of the average of two to
three independent broker valuations per ship less estimated
costs of disposal. The task of the brokers is to assess the
value of the individual ships in a ‘willing buyer – willing sell-
er’ situation. The valuations have been obtained from the
same recognised brokers as in previous years, and Manage-
ment considers an average of these to be the best and most
reasonable expression of the ships’ fair value.
The carrying amount of right-of-use (RoU) assets is added to
the base of non-current tangible and intangible assets being
subject to impairment testing. The RoU assets are regarded
an integrated part of the operating activities taking place in
the Group’s cash-generating unit and accordingly, the carry-
ing amount of a RoU asset is allocated to the cash-generat-
ing unit in which the asset in question is used. Thereby RoU
assets are tested on cash-generating unit level.
Determination of estimated growth rates and cash flow
The expected net cash flows are assessed at CGU level on
basis of approved forecasts for 2022 and management busi-
ness plans beyond 2022. These projections are performed
on basis of assumptions on when the specific CGU will
reach normal activity levels after Covid-19. The projections
also include the estimated impact of long-term strategic
decisions such as WIN23 and assessment of opportunities
for future growth and required investments. For Ferry and
Logistics division CGUs which include a terminal period,
OECD’s prediction for EU long-term consumer price index
growth rate of 1.8% has been applied (2020: 1.0%). Further,
the consequences from Covid-19 outbreak have been incor-
porated in the forecast for 2022 and onwards. It is manage-
ment expectations that a full recovery will take place dur-
ing 2022 and 2023 for those CGUs which are still impacted
by Covid-19. The following assumptions for growth rates
have been applied to each CGU.
Ferry (CGUs):
North Sea, Baltic Sea and Mediterranean: After 2022 a
growth in EBIT for 2023-2026 in the range of 3.3% - 7.7%
is expected and growth in terminal period of 1.8% (2020:
1.0%).
The business area English Channel: The passenger activity is
expected to fully recover from Covid-19 in 2023. A growth in
EBIT for 2024-2026 of 2.0% and growth in terminal period
of 1.8% is expected (2020: 1.0%).
The Oslo – Frederikshavn - Copenhagen route:
The extensive travel restrictions continued in 2021 leading
to significantly reduced passenger traffic. The expectation for
2022 is a negative EBIT. During 2022, management expects
a partial recovery to take place. Varying growth rates have
been incorporated in the forecast years beyond 2022 leading
to an overall positive EBIT. The growth rates in EBIT vary from
year to year and depend to a large extent on when planned
maintenance costs, improvements etc. are taking place. From
2023, growth rates represent a normalised average of 0.7%
(2020: 1.0%).
The Amsterdam – Newcastle route: The expectation for
2022 is a negative EBIT. During 2022, management expects
a partial recovery will take place. Varying growth rates have
been incorporated in the forecast years beyond 2022, and
expects to provide an overall positive EBIT. The growth rates
in EBIT vary from year to year and depend to a large extent
on when planned maintenance costs, improvements etc. are
taking place. After 2023, growth rates represent a normal-
ised average of 2.2% over the forecast period (2020: 3.5%).
Logistics (CGUs):
The Business area Dry Goods: Growth in EBIT for 2023-
2026 of 5% and growth in terminal period of 1.8%
The Business area Cold Chain: Growth in EBIT for 2023-
2026 of 5% and growth in terminal period of 1.8%
Determination of discount rate
The discount rate for year-end 2021 impairment testing
purposes is based on a calculation of DFDS’ weighted
average cost of capital (WACC) taking into account both
debt and equity. The cost of equity is based on a risk-free
rate plus a market risk premium. The risk-free interest
rate is based on a 10-year Danish risk-free rate which at
the end of 2021 is around zero percent (2020: negative).
Accordingly, DFDS has decided to use a normalised risk-
3.1.5 Impairment testing (continued)
3.1.5 Impairment testing
103
DFDS Annual Report 2021
Consolidated Financial Statements
free rate of 1.0% (2020: 1.0%). The market risk premium
is calculated as a general equity market risk premium of
5.9% (2020: 6.0%) multiplied by the leveraged beta value
for DFDS of 1.57 (2020: 1.65). The leveraged beta value
applied at year-end 2021 is calculated by obtaining the
unlevered beta value of peer group companies via the
Capital IQ database. This beta value is then relevered in
accordance with the Groups’ current capital structure. The
cost of debt is based on the interest-bearing borrowings
for the Group plus the risk-free interest. Further, risk pre-
mium may be added for the individual cash-generating
unit if special conditions and/or uncertainties indicate a
need hereto. Conversely, if the risk level for the individual
cash-generating unit is considered to be lower than the
general risk level, then the risk premium is reduced if spe-
cial conditions indicate a need hereto.
The impact of Covid-19 on the cash-generating units is un-
certain and the expected impact is built into the forecasts
where relevant. For the CGU, Oslo – Frederikshavn - Co-
penhagen a specific risk premium of 1.0 percentage point
has been added to determined discount rate to reflect the
increased uncertainty. The discount rates used in deter-
mining the carrying amounts of Right-of-use assets/lease
liabilities are based on borrowing rates which are lower
than the discount rates used in the impairment test, which
all things being equal, will have a negative impact on the
results of the impairment test as the carrying amount of
the cash-generating units will increase more than the val-
ue-in-use of the cash-generating-units.
For cash-generating units where the recoverable amount is
based on value-in-use, the pre-tax discount rates applied
have been within the following ranges in the two segments:
2021 2020
Ferry Division 6.0% - 7.0% 6.4% - 7.4%
Logistics Division 6.0% 6.4%
The applied discount rates in cash-generating units for
which the carrying amount of goodwill forms a significant
part of the Group’s total goodwill are 6.0% (2020: 6.4%)
in ‘North Sea, Baltic Sea and Mediterranean’, 6.0% (2020:
6.4%) in ‘Dry Goods’ and 6.0% (2020: 6.4%) in ‘Cold Chain’.
Sensitivity analysis
As part of the preparation of impairment tests, sensitivity
analysis are prepared on the basis of relevant risk factors
and scenarios that Management can determine with rea-
sonable reliability. Sensitivity analysis are prepared by
altering the estimates within the range of probable out-
comes. The sensitivities have been assessed as follows, all
other things being equal:
• An increase in the discount rate of 0.5%-points.
• A decrease in EBIT of 10%.
• A decrease in broker valuations of 10%.
None of these calculations have given rise to adjustments
of the results of the impairment tests prepared.
Order of recognising impairments
If a need for impairment is identified, goodwill is the first
to be impaired, followed by the primary non-current tangi-
ble and intangible assets and Right-of-use assets in the in-
dividual cash-generating units. Impairments are allocated
to the respective assets according to the carrying amount
of the assets unless this results in an impairment to a val-
ue below the fair value less costs of disposal of the asset.
Impairment tests 2021
On the basis of the impairment tests prepared at year end
2021 no cash-generating units are deemed impaired in
2021 and no impairment losses recognised in prior years
have been reversed. For one Freight ferry a reversal of im-
pairment made in connection with reclassification to asset
held for sale amounts to DKK 29m has been recognised in
Special Items Note 2.6..
Impairment tests 2020
Based on the impairment tests prepared at year end 2020
the cash generating unit: “Oslo - Frederikshavn - Copen-
hagen” has been impaired by DKK 100m. The impairment
is applied to the non-current tangible assets. No goodwill
is allocated to the CGU. The recoverable amount of the
cash generating unit is based on value in use method. The
impairment loss of DKK 100m is recognised under special
items. Reference is made to note 2.6. Further an impair-
ment of DKK 29m has been recognised in relation to re-
classification of a ferry to assets classified as held for sale.
Reference is made to note 2.6 and note 3.1.6.
Significant accounting estimates and assessments
Covid-19 and Brexit considerations
Management has taken the risk and uncertainty relating
to Covid-19 and Brexit into consideration when preparing
the forecasts and cash flows.
Imp airment te sting of goodwill a nd other non-current
intangible assets
Impairment testing of goodwill and other non-current
intangible assets, which primarily relates to IT, acquired
port concession rights and acquired customer portfolios,
is undertaken once every year and in case of indication
of impairment. The impairment tests are based on the
expected future cash flow for the cash-generating unit
in question. The key parameters are trends in revenue,
EBIT, EBIT margin, future investments and growth expec-
tations. These parameters are based on estimates of the
future which are inherently uncertain.
Impairment testing of ferries and other ships, includ-
ing the assessment of useful life and scrap value
Significant accounting estimates and assessments re-
garding ferries and other ships include the allocation
of the ferry’s cost price on components based on the
expected useful life of the identified components; the
ferry’s expected maximum useful life; the ferry’s scrap
value; and impairment testing. The expected useful
life of ferries and other ships and their scrap values
are reviewed and estimated at least once a year. Im-
pairment test is performed at least once a year, typi-
cally at year-end. Additional impairment tests are per-
formed if indications of impairment occur in the period
between the annual impairment tests.
Impairment testing of Right-of-use assets
For information on Significant accounting estimates
and assessments regarding Right-of-use assets from
leases reference is made to note 3.1.3.
Impairment testing of Right-of-use assets, which pri-
marily relates to leases of terminals, ferries, land and
buildings and cargo carrying equipment, is performed
at least once a year, typically at year-end. Addition-
al impairment tests are performed if indications of
impairment occur in the period between the annual
impairment tests.
The Right-of-use assets are regarded an integrated
part of the operating activities taking place in the
Group’s cash-generating units and accordingly, the
carrying amount of a Right-of-use asset is allocated
to the cash-generating unit in which the asset in ques-
tion is used. Thereby Right-of-use assets are tested at
cash-generating unit level.
The impairment tests are based on fair value less costs
of disposal for the assets in the cash-generating unit or
the value-in-use where the expected future cash flow
for the cash-generating unit is a main element in the cal-
culation. The key parameters in assessing expected fu-
ture cash flows are trends in revenue, EBIT, EBIT margin,
future investments and growth expectations, which are
inherently uncertain. The fair value less cost of disposal
for the Group’s main assets, ferries and other ships, are
based on broker valuations. For further information on
broker valuations reference is made to the paragraph
‘Basis for impairment testing and calculation of recov-
erable amount’ which can be found above in this note.
Accounting policies
The carrying amount of Goodwill, non-current intangi-
ble, tangible and Right-of-use assets are continuously
assessed, at least once a year, to determine whether
there is an indication of impairment. When such indi-
cation exists the recoverable amount of the asset is
assessed. The recoverable amount is the higher of the
fair value less costs of disposal and the value-in-use.
The value-in-use is calculated as the present value of
the future net cash flow, which the asset is expected to
generate either by itself or from the lowest cash-gen-
erating unit to which the asset is allocated.
3.1.5 Impairment testing (continued)
104
DFDS Annual Report 2021
Consolidated Financial Statements
1)
Hereof interest bearing part
of non-current receivables of
DKK 0m (2020: DKK 0m).
2)
Hereof interest bearing part of
other receivables of DKK 2m
(2020: DKK 159m).
3.1.6 Assets classified as held for sale
2021
During 2021 the Group has sold the freight ferry (ro-ro)
Gothia Seaways.
ARK Futura has ceased to be classified as assets held for
sale. As part of this an impairment loss of DKK 29m made
in 2020 has been reversed as Special items. Reference is
made to note 2.6.
2020
During 2020 the Group has decided to dispose the freight
ferries (ro-ro) Gothia Seaways and ARK Futura and conse-
quently classified these to assets held for sale. As part of
the reclassification, one of the freight ferries has been writ-
ten down to its expected sales price less cost of disposal.
An impairment loss of DKK 29m has been recognised as
special items. Reference is made to note 2.6.
3.2.1 Receivables
DKK million 2021 2020
Other non-current receivables
1)
16 17
Total non-current receivables 16 17
Trade receivables 2,650 1,896
Work in progress services 122 118
Receivables from associates and joint ventures 26 28
Corporation tax and joint taxation contribution, receivable, reference is made to note 2.7 53 27
Other receivables and current assets
2)
571 562
Total current receivables 3,423 2,631
Total current and non-current receivables 3,439 2,648
The carrying amount of receivables is in all material
respects equal to the fair value. None of the trade receiv-
ables with collateral are overdue at 31 December 2021
(2020: none). The collateral consists of bank guarantees
with a fair value of DKK 26m (2020: DKK 21m).
DKK million 2021 2020
Trade receivables that are past due, but not impaired:
Days past due:
Up to 30 days 386 267
31-60 days 53 66
61-90 days 13 37
91-120 days 10 6
More than 120 days 54 14
Past due, but not impaired 517 389
DKK million 2021 2020
Movements in write-downs, which are included in the trade receivables:
Write-downs at 1 January 63 69
Foreign exchange adjustment 1 -1
Addition on acquisition of enterprises 3 0
Write-downs 18 16
Realised losses -1 -6
Reversed write-downs -23 -15
Write-downs at 31 December 60 63
3.2 Net Working Capital
105
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million 2021 2020
Age distribution of write-downs:
Days past due:
Up to 30 days 0 1
31-60 days 0 1
61-90 days 1 2
91-120 days 2 2
More than 120 days 57 58
Write-downs at 31 December 60 63
The last five years DFDS’ realised credit losses on trade re-
ceivables have been insignificant and the loss rate has not
exceeded 0.1% (2020: 0.2%) of the revenue in any of the
respective years. The changes in payment pattern continue
to be insignificant and at the same level as previous years.
Accordingly, at year-end 2021 the expected credit losses
on trade receivables calculated under the simplified ex-
pected credit loss model is based on the average historical
loss rate on revenue for the last five years of 0.0% (2020:
0.1%) plus adjustments for forward-looking factors where
considered relevant.
Accounting policies
Receivables are recognised at amortised cost less ex-
pected credit losses.
DFDS’ risks regarding trade receivables are not consid-
ered unusual and no material risk is attributable to a
single customer or group of customers. According to
the Group’s policy of undertaking credit risks, asses-
ment of significant customers are performed.
Write-downs on trade receivables are based on the
simplified expected credit loss model. Credit loss al-
lowances on individual receivables are provided for
when objective indications of credit losses occurs
such as customer bankruptcy and uncertainty about
the customers’ ability and/or willingness to pay, etc. In
addition to this, allowances for expected credit losses
are made on the remaining trade receivables based on
a simplified approach.
Contract assets comprise work in progress services
where the customer has not been invoiced yet. Work
in progress services is measured based on the value
of the of the work performed as of the balance sheet
date.
Write-downs and realised losses on trade receivables
and work in progress services are recognised in ferry
and other ship operation and maintenance costs in the
Income statement.
Other receivables comprise other trade receivables;
insurance receivables on loss or damage of ferries and
other ships; financial lease receivables; outstanding
balances for chartered ferries; interest receivable, etc.
3.2.2 Inventories
DKK million 2021 2020
Bunker 173 102
Goods for sale 113 77
Write-down of inventories end of year -18 -10
Total inventories 269 169
Write-down of inventories expensed during the year
amounts to DKK 8m (2020: DKK 16m).
Accounting policies
Bunker are measured at cost based on the FIFO method
or the net realisable value where this is lower. Catering
supplies are measured at cost based on the weighted
average cost method or the net realisable value where
this is lower. Other inventories are measured at cost
based on the weighted average cost method or the net
realisable value where this is lower.
3.2.3 Other payables
DKK million 2021 2020
Holiday pay obligations, etc, 438 388
Public authorities (VAT, duty, etc.) 55 83
Payables to associates and joint ventures 51 51
Other payables 173 189
Accrued interests 13 14
Total other payables 730 725
Accounting policies
Other payables comprise amounts owed to staff,
including wages, salaries holiday pay, salary/wag-
es related items, etc.; amounts owed to the public
authorities, VAT, excise duties, real property taxes,
etc.; amounts owed in connection with the purchase/
disposal of ferries and other ships, buildings and ter-
minals; accrued interest expenses; payables to asso-
ciates and joint ventures; amounts owed in relation to
defined contribution pension plans etc.
3.2.1 Receivables (continued)
106
DFDS Annual Report 2021
Consolidated Financial Statements
3.2.4 Pension and jubilee liabilities
The Group contributes to defined contribution plans as
well as defined benefit plans. The majority of the pen-
sion plans are funded through payments of contributions
to independent insurance companies responsible for the
pension obligation towards the employees (defined con-
tribution plans). In these plans the Group has no legal or
constructive obligation to pay further contributions irre-
spective of the financial situation of these insurance com-
panies. Pension costs from such plans are expensed in the
Income statement when incurred.
In primarily the United Kingdom the Group has defined
benefit plans. In addition there are minor defined benefit
plans in Norway, Belgium, Italy, Turkey, Lithuania, France,
Germany, Denmark, and Sweden. The United Kingdom ac-
count for minus 90.3%
1)
(2020: 73.3%) of the total net lia-
bility and 94.8% (2020: 95.3%) of the funded and unfund-
ed obligation. The majority of the defined benefit plans are
pension plans that yearly pay out a certain percentage of
the employee’s final salary upon retirement. The pensions
are paid out as from retirement and during the remaining
life of the employee. The percentage of the salary is de-
pendent of the seniority of the employee except for certain
closed plans in the United Kingdom and some of the other
minor plans. The defined benefit plans typically include a
spouse pension and disability insurance.
Some of the pension plans in Sweden are multi-employer
plans, which cover a large number of enterprises. The plans
are collective and are covered through contributions paid
to the pension company Alecta. The Swedish Financial Ac-
counting Standards Council’s interpretations committee
(Redovisningsrådet) has defined this plan as a multi-em-
ployer defined benefit plan. Presently, it is not possible
to obtain sufficient information from Alecta to apportion-
ate assets and liabilities of the plans to the participating
employers. Consequently, the pension plans are similarly
to prior years treated as defined contribution plans. The
contributions are DKK 4m in 2021 (2020: DKK 4m). The
collective funding ratio at Alecta amounts to 169% as per
September 2021 (September 2020: 144%). For 2022, the
contributions are expected to be DKK 4m. DFDS’ share of
the multi-employer plan is around 0.0043% and the liabil-
ity follows the share of the total plan.
Based on actuarial calculations the defined benefit plans show the following liabilities:
DKK million 2021 2020
Present value of funded defined benefit obligations 1,031 1,010
Fair value of plan assets -1,054 -879
Funded defined benefit obligations, net -23 131
Present value of unfunded defined benefit obligations 51 45
Recognised liabilities for defined benefit obligations 28 176
Provision for jubilee liabilities 23 21
Total actuarial liabilities, net 51 197
Total actuarial liabilities, net are classified as follows
Pension assets 25 0
Pension and jubilee liabilities 76 197
Total actuarial liabilities, net 51 197
DKK million 2021 2020
Movements in the net present value of funded and unfunded defined benefit obligations
Funded and unfunded obligations at 1 January 1,055 1,031
Foreign exchange adjustments 76 -60
Current service costs 7 8
Interest costs 13 18
Actuarial gain(-)/loss(+) arising from changes in demographic assumptions 9 12
Actuarial gain(-)/loss(+) arising from changes in financial assumptions -42 90
Past service costs 0 1
Benefits paid -35 -42
Settlements and curtailments -2 -2
Funded and unfunded obligations at 31 December 1,082 1,055
Movements in the fair value of the defined benefit plan assets
Plan assets at 1 January -879 -893
Foreign exchange adjustments -66 54
Calculated interest income -11 -16
Return on plan assets excluding calculated interest income -111 -46
Costs of managing the assets 5 4
Employer contributions -23 -21
Benefits paid 32 38
Plan assets at 31 December -1,054 -879
Plan assets consist of the following:
Cash and cash equivalents -30 -1
Blended investment funds -1,020 -875
Other assets (primarily insured plans) -3 -3
Total plan assets -1,054 -879
1)
The United Kingdom defined
benefit plans are at account-
ing basis overfunded by DKK
25m as per end of 2021.
107
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million 2021 2020
Expenses recognised as employee costs in the Income statement:
Current service costs 7 8
Past service costs 0 1
Gain (-)/loss(+) on settlements and curtailments 0 -1
Total included in employee costs regarding defined benefit plans 7 7
Expenses recognised as financial costs in the Income statement:
Interest costs 13 18
Interest income -11 -16
Total included in financial costs regarding defined benefit plans 2 2
Total expenses for defined benefit plans recognised in the Income statement 8 9
Expenses recognised in Other comprehensive income, gain(-)/loss(+):
Remeasurements of plan obligations -34 101
Remeasurements of plan assets -106 -42
Total included in Other comprehensive income regarding defined benefit plans -140 59
Actuarial calculations or roll forward calculations are per-
formed annually for all defined benefit plans. Assumptions
regarding future mortality are based on actuarial advice
in accordance with published statistics and experience in
each country. The following significant assumptions have
been used for the actuarial calculations:
Assumptions:
2021
United
Kingdom Others
Weighted
average
1)
Discount rate 1.8% 0.3%-3.9% 1.8%
Social security rate
2)
0.0% 0.0%-1.8% 0.0%
Future salary increase
2)
0.0% 0.0%-3.0% 0.1%
Future pension increase 3.6% 0.0%-3.4% 3.5%
Inflation 2.9% 0.0%-9.0% 2.9%
2020
United
Kingdom Others
Weighted
average
1)
Discount rate 1.2% -0.1%-3.9% 1.2%
Social security rate
2)
0.0% 0.0%-1.8% 0.0%
Future salary increase
2)
0.0% 0.0%-2.5% 0.1%
Future pension increase 2.9% 0.0%-3.4% 2.8%
Inflation 2.3% 0.0%-9.0% 2.3%
Significant actuarial assumptions for the determination of
the retirement benefit obligation are discount rate, expect-
ed future remuneration increases, and expected mortality.
The sensitivity analysis below has been determined based
on reasonably likely changes in the assumptions occurring
at the end of the period.
DKK million 2021 2020
Sensitivity analysis
Reported obligation 31 December
1,082 1,055
Discount rate -0.5% point compared to assumptions 1,176 1,157
Discount rate +0.5% point compared to assumptions 999 965
Salary increase -0.5% point compared to assumptions 1,080 1,053
Salary increase +0.5% point compared to assumptions 1,084 1,057
Mortality -1 year compared with used mortality tables 1,045 1,022
Mortality +1 year compared with used mortality tables 1,124 1,103
The mortality table used for the two defined benefit
schemes in the United Kingdom is the public S3PxA table
with annual improvement of 1.25% (2020: S3NxA table
with 1.2% annual improvement). Average remaining life
expectanty for a 65 year old is 23.4 year (2020: 23.3 year).
Weighted average duration on the liabilities end of 2021 is
17.0 years (2020: 18.9 years).
The Group expects to make a contribution of DKK 26m to the
defined benefit plans in 2022. The expected contribution for
2021 was DKK 28m, which turned out to be DKK 26m.
DKK million
Maturity analysis of the obligations 2021 2020
0-1 year 36 27
1-5 years 167 113
After 5 years 879 915
Total obligations 1,082 1,055
Significant accounting estimates and assessments
The Group’s defined benefit pension plans are calculat-
ed on the basis of a number of key actuarial assump-
tions, including discount rate, the anticipated returns
on the plans’ assets, the anticipated development in
wages and pensions, anticipated mortality, etc. Even
moderate alterations in these assumptions can result
in significant changes in pension liabilities.
The value of the Group’s defined pension benefit plans is
based on calculations undertaken by external actuaries.
1)
All factors are weighted at the
pro rata share of the individu-
al actuarial obligation.
2)
Schemes closed for new
members will have a social
security rate and future salary
increase of 0%.
3.2.4 Pension and jubilee liabilities (continued)
108
DFDS Annual Report 2021
Consolidated Financial Statements
Accounting policies
Contributions to defined contribution pension plans
are recognised in the Income statement in the period in
which they relate, and any payable contributions are
accrued in the balance sheet as other payables.
As regards defined benefit pension plans, an actuarial
valuation of the value in use of future benefits pay-
able under the plan is made once a year. The value
in use is calculated based on assumptions of future
development in wage/salary levels, interest rates, in-
flation, mortality, etc. The value in use is only calculat-
ed for benefits to which the employees have become
entitled during their employment with the Group. The
actuarial calculation of the value in use less the fair
value of any assets under the plan is recognised in the
balance sheet under pension obligations. If a defined
benefit pension plan constitutes a net asset, the asset
is recognised only if it offsets future refunds from the
plan or will lead to reduced future payments to the
plan. Pension costs of the year are recognised in the
Income statement based on actuarial estimates and
financial expectations at the beginning of the year.
The difference between the calculated development in
pension assets and liabilities and the realised values
are recognised in Other comprehensive income as ac-
tuarial gains and losses.
Changes in the benefits payable for employees’ past
service to the enterprise result in an adjustment of
the actuarial calculation of the value in use, which
is classified as past service costs. Past service costs
are recognised in the Income statement immediately
if the employees have already earned the right to the
adjusted benefit. Otherwise, the benefits will be recog-
nised in the Income statement over the period in which
the employees earn the right to the adjusted benefits.
Other non-current employee obligations include jubi-
lee benefits, etc.
3.2.5 Other provisions
DKK million 2021 2020
Other provisions at 1 January 124 85
Foreign exchange adjustments 1 -1
Addition from acquisition of enterprises
1)
3 0
Provisions made during the year 112 151
Used during the year -55 -78
Reversal of unused provisions -14 -34
Other provisions at 31 December 173 124
Other provisions are expected to be payable in:
0-1 year 56 78
1-5 years 107 37
After 5 years 10 9
Other provisions at 31 December 173 124
Of the Group’s provision of DKK 173m (2020: DKK 124m),
DKK 28m (2020: DKK 28m) is estimated net present value
of earn-out agreements regarding acquisitions; DKK 86m is
restructuring provision (2020: DKK 44m); DKK 24m (2020:
DKK 24m) is redelivery provision on leases and DKK 35m
(2020: DKK 28m) is other provisions.
Accounting policies
Provisions are recognised when, due to an event occur-
ring on or before the reporting date, the Group has a
legal or constructive obligation, and it is probable that
the Group will have to give up future economic bene-
fits to meet the obligation and that the obligation can
be reliably estimated. Provisions are recognised based
on Management’s best estimate of the anticipated ex-
penditure for settling the relevant obligation and are
discounted if deemed material.
1)
2021: Relates to acquisition
of HSF Logistics Group.
3.2.4 Pension and jubilee liabilities (continued)
109
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million Note 2021 2020
Interest-bearing liabilities
1)
4.5 14,337 12,654
Derivative financial instruments, related to
interest-bearing activities, net 4.2 58 137
Receivables, interest-bearing 3.2.1 -2 -159
Securities 4.2 -10 -10
Cash -902 -1,261
Net Interest-Bearing Debt (NIBD) 13,481 11,361
Operating profit before depreciation (EBITDA) and special items 3,411 2,732
Financial leverage ratio (NIBD/EBITDA, times)
2)
3.7 4.2
1)
Hereof DKK 3,839m (2020:
DKK 2,926m) relating to lease
liabilities that have different
characteristics than other
liabilities included in inter-
est-bearing liabilities.
2)
The ratio includes a pro forma
EBITDA for the last twelve
months for HSF Logistics
Group.
This section shows how the activities of DFDS are
financed. DFDS targets a financial leverage ratio be-
tween 2.0 and 3.0, where the ratio is measured as
Net Interest-Bearing Debt to Operating profit before
depreciation (EBITDA) and special items.
The following section provides the notes of the main
compo nents that form basis of the Net Interest-Bear-
ing Debt. Further more, the section includes infor-
mation on Financial and operational risks, Financial
instruments, Treasury shares, and Earnings per share.
4. Capital structure and finances
110
DFDS Annual Report 2021
Consolidated Financial Statements
DFDS’ risk management policy
DFDS’ risk management policy is governed by the DFDS Fi-
nancial Policy, which is approved by the Board of Directors
on an annual basis. The Financial Policy sets out policies,
targets and strategies for the financial risk management
of DFDS. DFDS does not enter into speculation. The most
important financial risk factors are 1) bunker price, 2) in-
terest rate, 3) currency exchange, 4) liquidity and 5) credit
exposure.
Bunker risk
In 2021 DFDS’ total bunker cost was DKK 2,297m or 13%
of Group revenue (DKK 1,314m or 9% in 2020). Therefore,
the fluctuations in the bunker price constitute a significant
risk. Bunker is denominated in USD. The corresponding
USD/DKK risk is described separately below.
In the freight industry it is customary to pass through the
risk of fluctuations in the bunker price and the correspond-
ing currency exchange rate risk to freight customers via a
bunker adjustment factor (BAF). In the passenger industry,
fluctuations in the cost of bunker are reflected in the ticket
price to the extent possible.
On group level approximately 94% (93% in 2020) of DFDS’
bunker price exposure and corresponding currency risk was
passed through to freight customers via BAF agreements.
The remaining bunker price exposure may be financially
hedged up to six quarters ahead in accordance with the
DFDS Financial Policy.
An increase in the bunker price of 10% compared to the ac-
tual bunker price during 2021 would have increased bun-
ker cost by DKK 5m for the Group in 2021 all else equal
(2020: DKK 7m). A decrease in the bunker price would
have had a similar but positive effect.
An increase in the bunker price of 10% compared to the ac-
tual bunker price at balance sheet date would have had a
positive effect on the Group’s equity reserve for hedging of
DKK 0m all else equal (2020: DKK 10m). A decrease in the
bunker price would have had a similar but negative effect.
Interest rate risk
DFDS is primarily exposed to interest rate risk through
funding. According to DFDS’ Financial Policy the interest
rate on 40-70% of the loan portfolio including long-term
charter agreements must be fixed with a weighted average
duration of 9-36 months. DFDS enters into interest rate
swaps and caps to comply with this policy.
The total net interest-bearing debt (including currency
swaps on bonds and lease liabilities) amounts to DKK
13,481m at year end 2021 (2020: DKK 11,361m). The
Group’s total interest-bearing debt primarily consists of
partly secured credit facilities, unsecured corporate bonds
and floating rate mortgages with security in ferries and
other ships. The debt portfolio had an average time to ma-
turity of 3.8 years (2020: 4.2 years).
In accordance with the Financial Policy, interest rate
swaps and caps with a principal amount of DKK 3,364m
(2020: DKK 3,056m) have been established to reduce in-
terest rate risk. The share of fixed-rate debt including in-
terest rate derivatives was 40% at year-end 2021 (2020:
39%). Including long term charter agreements, the share
of fixed-rate debt is 44% (2020: 42%). The duration of the
Group’s debt portfolio (including charter liabilities) was 11
months (2020: 12 months).
An increase in the interest rate of 1%-point compared
to the actual interest rates in 2021 would have in-
creased net interest payments incl. hedging by DKK
4.1 Financial and operational risks
36m for the Group all else equal (2020: DKK 42m).
A decrease in the interest rates of 1%-point would have
reduced the net interest payment by DKK 4m in 2021
(2020: DKK 7m).
An increase in the interest rate of 1%-point compared to
the actual interest rate at balance sheet date would have
had a positive effect on the Group’s equity reserve for
hedging of DKK 44m all else equal (2020: DKK 53m). A
decrease would have had a negative effect of DKK 32m
(2020: DKK 41m).
Currency risk
Currency exchange risk is monitored continuously and
actively hedged in accordance with DFDS Financial Poli-
cy. The aim is to actively reduce currency exposure using
forward exchange contracts and currency swaps. Approx-
imately 94% of DFDS’ revenues in 2021 were invoiced in
foreign currencies (2020: 95%) with the most substantial
revenue generated in EUR which accounted for 67% of
total revenue (2020: 66%). Apart from DKK and EUR, the
most revenue is generated in SEK, GBP and NOK. Howev-
er, SEK, GBP and NOK risks are to a large extent offset by
costs. USD risk primarily comes from future bunker con-
sumption, charter agreements and payments under ship-
building contracts.
EUR is considered a minor risk due to Denmark’s fixed ex-
change rate policy towards EUR and is, accordingly, not
hedged. USD risk is reduced by the BAF as described above
and by entering forward exchange contracts in connection
with hedging of future bunker consumption, charter agree-
ments and payments under shipbuilding contracts. For
other currencies than EUR and USD, DFDS has chosen not
to cash flow hedge. Part of the asset and liabilities recog-
nised at the balance sheet are hedged in certain currencies.
The operational currency cash flow is defined as the
Group’s consolidated net currency cash flows from rev-
enues and operational costs. The table on the following
page shows the impact on the Group’s Operating profit be-
fore depreciation (EBITDA) and special items from changes
in the foreign exchange rate.
111
DFDS Annual Report 2021
Consolidated Financial Statements
1)
Change in fair value of FX
forwards related to commit-
ted investments and future
bunker consumption only
affects equity.
4.1 Financial and operational risks (continued)
Operational currency cash flow risk
DKK million 2021 2020
SEK, income statement effect, 10% strengthening 34 32
NOK, income statement effect, 10% strengthening 24 2
GBP, income statement effect, 10% strengthening 5 -31
TRY, income statement effect, 10% strengthening -24 -19
USD, income statement effect, 10% strengthening -13 -6
The Group’s most significant currency balance positions
are in EUR, SEK, GBP, NOK, TRY, and USD relating to cash,
committed investments and trade payable and receiva-
bles. All else equal a strengthening of SEK, GBP, NOK, TRY,
and USD against DKK at balance sheet date would have
increased/decreased balance sheet items by the amounts
presented below.
Currency balance risk
DKK million 2021 2020
SEK, equity and income statement effect, 10% strengthening 1 3
GBP, equity and income statement effect, 10% strengthening -3 4
NOK, equity and income statement effect, 10% strengthening 2 3
TRY, equity and income statement effect, 10% strengthening -3 1
USD, equity and income statement effect, 10% strengthening 5 -1
USD, equity effect, 10% strengthening
1)
50 191
Liquidity risks
DFDS Financial Policy is to secure adequate liquidity to
meet financial and operational payment obligations by
maintaining a minimum cash resource of DKK 1bn in 2021
and from 2022 a minimum cash resource of DKK 2,000m.
The year-end cash resource was DKK 2,401m (2020: DKK
4,932m), of which undrawn committed and uncommit-
ted credit facilities amounts to DKK 1,499m (2020: DKK
3,671m).
DFDS’ contractual maturities of financial instruments,
including estimated interest payments and excluding the
impact of netting agreements, are stated in the table be-
low:
DKK million 2021
0-1 year 1-3 years 3-5 years After 5 years
Non-derivative financial assets
Cash 902 0 0 0
Trade receivables including work in progress services 2,772 0 0 0
Receivables from associates and joint ventures 26 0 0 0
Other receivables and current assets 624 16 0 0
Non-derivative financial liabilities
Bank loans and mortgage on ferries and other ships -965 -5,850 -1,228 -1,615
Issued corporate bonds -954 -308 0 0
Other interest-bearing debt 0 0 0 0
Lease liabilities (undiscounted) -816 -1,115 -737 -1,757
Trade payables -3,119 0 0 0
Payables to associates and joint ventures -51 0 0 0
Other payables -173 0 0 0
Derivative financial assets
Bunker contracts 0 0 0 0
Interest swaps & caps 3 5 3 0
Forward exchange contracts and currency swaps 20 6 6 14
Derivative financial liabilities
Bunker contracts 0 0 0 0
Interest swaps & caps -4 0 0 0
Cross currency interest rate swaps -71 -6 0 0
Forward exchange contracts and currency swaps -2 0 0 0
Total -1,808 -7,252 -1,956 -3,358
112
DFDS Annual Report 2021
Consolidated Financial Statements
4.1 Financial and operational risks (continued)
DKK million 2020
0-1 year 1-3 years 3-5 years After 5 years
Non-derivative financial assets
Cash 1,261 0 0 0
Trade receivables including work in progress services 2,014 0 0 0
Receivables from associates and joint ventures 28 0 0 0
Other receivables and current assets 586 15 2 0
Non-derivative financial liabilities
Bank loans and mortgage on ferries and other ships -575 -6,410 -560 -1,537
Issued corporate bonds -18 -901 -284 0
Other interest-bearing debt 0 0 0 0
Lease liabilities (undiscounted) -586 -787 -509 -1,515
Trade payables -2,090 0 0 0
Payables to associates and joint ventures -51 0 0 0
Other payables -189 0 0 0
Derivative financial assets
Bunker contracts 17 0 0 0
Interest swaps & caps 0 0 0 0
Forward exchange contracts and currency swaps 128 14 14 40
Derivative financial liabilities
Bunker contracts 0 0 0 0
Interest swaps & caps 0 -8 -1 0
Cross currency interest rate swaps -5 -112 -23 0
Forward exchange contracts and currency swaps -52 0 0 0
Total 467 -8,189 -1,361 -3,011
Assumptions for the maturity table:
The maturity analysis is based on undiscounted cash flows
including estimated interest payments. Interest payments
are estimated based on existing market conditions.
The undiscounted cash flows related to derivative finan-
cial liabilities are presented at gross amounts unless the
parties according to the contract have a right or obligation
to settle at net amount.
Credit risk
DFDS’ credit risk is primarily attributable to trade- and
other receivables and cash. The receivables including work
in progress services are stated in the balance net of write-
downs. Reference is made to note 3.2.1 for a further infor-
mation on write-downs on trade receivables and work in
progress services.
According to the Group’s policy of undertaking credit risks,
assesments of all customers and other partners are per-
formed. Customers have provided bank guarantees for
payments for the benefit of DFDS for DKK 26m in 2021
(2020: DKK 21m). Prepayment guarantees regarding
DFDS’ newbuilding program amount to DKK 325m (2020:
DKK 747m).
DFDS’ credit risk towards financial counterparties primar-
ily relates to cash on bank accounts and positive market
values of derivatives. Credit limits on financial counter-
parties are calculated in accordance with DFDS’ Financial
Policy based on credit ratings from international credit rat-
ing agencies. Credit ratings and resulting credit limits are
monitored continuously.
Capital structure
Capital distribution to shareholders is based on a target
leverage of a NIBD/EBITDA multiple between 2.0 and 3.0.
The target can be suspended in connection with large in-
vestments, acquisitions, and other strategic initiatives. At
year-end 2021 the NIBD/EBITDA multiple was 3.7 (2020:
4.2) including pro forma EBITDA for HSF Logistics Group.
113
DFDS Annual Report 2021
Consolidated Financial Statements
4.1 Financial and operational risks (continued)
DKK million
2021
Expected timing of recycling to Income statement or
Non-current assets of gains/losses recognised in the equity
Expected future
transactions Hedge instrument
Time to
maturity
Notional
principal
amount
Fair
value
assets
Fair
value
liabilities 0-1 year 1-3 years 3-5 years
After
5 years
Fair value recognised on
hedging reserve in equity
Interest Interest swaps 0-3 years 1,876 5 -4 -2 2 1 0 1
Interest Caps 0-4 years 1,190 7 0 0 0 0 0 0
Goods purchased Oil contracts for forward delivery (tons) 0-1 years 0 0 0 0 0 0 0 0
Bond loans Currency swaps 0-3 years 932 0 -71 -4 0 0 0 -4
Bond loans Cross currency interest rate swaps 0-5 years 298 0 -6 0 1 0 0 1
Ferry investments & ferry charter
1
)
Forward exchange contracts 0-11 years 1,229 29 -2 -2 0 0 0 -2
Sales and goods purchased Forward exchange contracts 0-1 years 944 17 -1 0 0 0 0 0
Total 58 -83 -9 3 1 0 -5
1)
For instruments used to
hedge ferry investments the
recycling from equity will be
recognised under non-current
tangible assets.
DKK million
2020
Expected timing of recycling to Income statement or
Non-current assets of gains/losses recognised in the equity
Expected future
transactions Hedge instrument
Time to
maturity
Notional
principal
amount
Fair
value
assets
Fair
value
liabilities 0-1 year 1-3 years 3-5 years
After
5 years
Fair value recognised on
hedging reserve in equity
Interest Interest swaps 0-3 years 1,866 0 -9 -6 -3 -1 0 -9
Interest Caps 0-4 years 1,190 11 0 0 0 0 0 0
Goods purchased Oil contracts for forward delivery (tons) 0-1 years 79 17 0 17 0 0 0 17
Bond loans Currency swaps 0-3 years 882 0 -113 0 0 0 0 0
Bond loans Cross currency interest rate swaps 0-5 years 282 0 -27 0 0 -4 0 -4
Ferry investments & ferry charter
1
)
Forward exchange contracts 0-11 years 1,802 188 -45 73 14 14 40 141
Sales and goods purchased Forward exchange contracts 0-1 years 699 10 -7 2 0 0 0 2
Total 225 -201 87 11 10 40 147
In 2021 no financial hedges were deemed inefficient hence
no gain or loss was recognised in the Income statement
in 2021.
The fair value of the interest swaps has been calculated
by discounting the expected future interest payments.
The discount rate for each interest payment is estimated
on the basis of a swap interest curve, which is calculated
based on market interest rates.
The fair value of forward exchange contracts and bunker
contracts is calculated based on actual forward curves in
DFDS’ Treasury system.
114
DFDS Annual Report 2021
Consolidated Financial Statements
4.2 Information on financial instruments
DKK million 2021 2020
Carrying amount per category of financial instruments
Financial assets measured at fair value:
Derivatives, related to operating activities 36 214
Derivatives, related to interest-bearing activities 23 12
Financial assets measured at amortised cost:
Trade receivables, receivables from associates and joint ventures, other receivables and cash 4,183 3,827
Financial assets measured at fair value through profit or loss:
Securities 10 10
Financial liabilities measured at fair value:
Derivatives, related to operating activities -2 -53
Derivatives, related to interest-bearing activities -81 -148
Financial liabilities measured at amortised cost:
Interest-bearing liabilities, trade payables, payables to associates and joint ventures, and
other payables -17,707 -15,003
Total -13,538 -11,141
Hie ra rch y of f ina nci al in str um en ts me as ur ed a t fai r val ue
The table below ranks financial instruments carried at
fair value by valuation method. The different levels have
been defined as follows:
• Level 1: Quoted prices in an active market for identical
type of instrument, i.e. without change in form or content
(modification or repackaging).
• Level 2: Quoted prices in an active market for similar
assets or liabilities or other valuation methods where
all material input is based on observable market data.
• Level 3: Valuation methods where possible material in-
put is not based on observable market data.
DKK million
2021 Level 1 Level 2 Level 3
Derivatives, financial assets 0 58 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 -83 0
Total 0 -25 10
2020 Level 1 Level 2 Level 3
Derivatives, financial assets 0 226 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 -201 0
Total 0 25 10
Derivative financial assets and liabilities are all measured
at level 2. Reference is made to note 4 .1 for description of
the valuation method.
Securities, financial assets measured at fair value through
the income statement comprise other shares and equity
investments as well as other investments of DKK 10m
(2020: DKK 10m). These are some minor unlisted shares
and investments.
Transfers between levels of the fair value hierarchy are
considered to have occurred at the date of the event or
change in circumstances that caused the transfer. There
were no transfers between the levels in the fair value hier-
archy in 2021 (2020: No transfers).
Significant accounting estimates and assessments
Derivatives
When entering into agreements involving derivatives,
Management assesses whether the derivative in ques-
tion meets the criteria for hedge accounting, including
whether the hedging relates to recognised assets and
liabilities, projected future cash flows, or financial
investments. Effectiveness tests are carried out, and
any inefficiency is recognised in the Income statement.
115
DFDS Annual Report 2021
Consolidated Financial Statements
4.3 Changes in liabilities arising from financing activities
The table below discloses the cash as well as non-cash
changes in interest-bearing liabilities and derivative fi-
nancial instruments related to issued corporate bonds.
The changes arising from cash flows form part of the cash
flows from financing activities in the Statement of cash
flows.
DKK million Non-cash changes
1 Jan.
2021
Cash
flows
Additions
from
acquisitions
Foreign
exchange
move-
ments
New/
disposed/
re measured
leases
Fair
value
changes
Other
changes
31 Dec.
2021
Changes in 2021
Interest-bearing liabilities:
Bank loans and mortgage
on ferries and
other ships 8,557 414 292 -2 0 0 7 9,267
Issued corporate bonds 1,162 0 0 67 0 0 1 1,230
Lease liabilities 2,926 -834 340 127 1,279 0 0 3,839
Other liabilities 9 -1 1 0 0 0 -8 1
12,654 -421 633 192 1,279 0 0 14,337
Derivatives financial
instruments:
Derivatives related to
issued corporate bonds 140 0 0 0 0 -63 0 77
Total liabilities from
financing activities 12,794 -421 633 192 1,279 -63 0 14,414
Accounting policies
Derivatives financial instruments
Derivatives financial instruments are measured in the
balance sheet at fair value as from the date where
the derivatives financial instrument is concluded. The
fair values of derivatives financial instruments are
presented as derivatives financial instruments un-
der asssets if positive or under liabilities if negative.
Netting of positive and negative derivatives financial
instruments is only performed if the Group is entitled
to and has the intention to settle more derivatives
financial instruments as a net. Fair values of deriva-
tives financial instruments are computed on the basis
of current market data and generally accepted valua-
tion methods.
Fair value hedge
Changes in the fair value of financial instruments des-
ignated as and qualifying for recognition as a fair val-
ue hedge of recognised assets and liabilities are recog-
nised in the Income statement together with changes
in the value of the hedged asset or liability based on
the hedged proportion. Hedging of future cash flows
according to agreements (firm commitments), except
for foreign currency hedges, is treated as a fair value
hedge of a recognised asset and liability.
Cash flow hedge
Changes in the fair value of financial instruments des-
ignated as and qualifying for cash flow hedging and
which effectively hedge changes in future cash flows,
are recognised in Other comprehensive income.
The change in fair value that relates to the effective
portion of the cash flow hedge is recognised as a sep-
arate equity reserve until the hedged cash flow im-
pacts the Income statement. At this point in time the
related gains or losses previously recognised in Other
comprehensive income are transferred to the Income
statement into the same line item as the hedged item
is recognised.
However, when the forecast transaction that is hedged
results in the recognition of a non-financial asset, the
gains or losses previously recognised in Other com-
prehensive income are transferred from equity and
included in the initial measurement of the cost of the
non-financial asset.
For derivative financial instruments that no longer
qualify for hedge accounting, the hedge is dissolved
prospectively. The accumulated fair value in equity is
immediately transferred to the Income statement into
the same line item as the hedged item is recognised.
Other financial instruments
For financial instruments that do not fulfil the re-
quirements of being treated as hedge instruments, the
changes in fair value are recognised successively in
the Income statement as Financial income and cost.
4.2 Information on financial instruments (continued)
116
DFDS Annual Report 2021
Consolidated Financial Statements
4.4 Financial income and costs
DKK million 2021 2020
Financial income
Interest income from banks, etc.
1)
1 4
Other dividends 0 0
Foreign exchange gain, net
2)
27 0
Total financial income 29 5
Financial costs
Interest expense to banks, credit institutions, corporate bonds, etc.
1)
-202 -194
Interest expense on lease liabilities, reference is made to note 3.1.3 -95 -78
Foreign exchange loss, net
2)
0 0
Defined benefit pension plans, reference is made to note 3.2.4 -2 -2
Other financial costs
3)
-17 -16
Transfer to assets under construction
4)
8 10
Total financial costs -307 -280
Financial income and costs, net -278 -275
Accounting policies
Financial income and costs comprise interest income
and costs; realised and unrealised gains and losses on
receivables, payables and transactions denominat-
ed in foreign currencies; realised gains and losses on
securities; amortisation of financial assets and liabil-
ities; interests on leasing agreements; bank charges
and fees etc. Also included are realised and unrealised
gains and losses on derivative financial instruments
that are not designated as hedges.
4.3 Changes in liabilities arising from financing activities (continued)
DKK million Non-cash changes
1 Jan.
2020
Cash
flows
Additions
from
acquisitions
Foreign
exchange
move-
ments
New/
disposed/
re measured
leases
Fair
value
changes
Other
changes
31 Dec.
2020
Changes in 2020
Interest-bearing liabilities:
Bank loans and mortgage
on ferries and other ships 8,381 202 0 -30 0 0 5 8,557
Issued corporate bonds 1,249 0 0 -88 0 0 1 1,162
Lease liabilities 3,109 -602 0 -86 505 0 0 2,926
Other liabilities 35 0 0 0 0 0 -26 9
12,774 -400 0 -205 505 0 -20 12,654
Derivatives financial
instruments:
Derivatives related to
issued corporate bonds 55 0 0 0 0 84 0 140
Total liabilities from
financing activities 12,830 -400 0 -205 505 84 -20 12,794
1)
Primarily relates to financial
assets/liabilities measured at
amortised cost. Income (net)
from interest swaps is DKK
4m (2020: DKK 4m) and is in-
cluded under Interest expense
to banks, credit institutions,
corporate bonds, etc.
2)
Foreign exchange gains in
2021 amounts to DKK 219m
(2020: DKK 266m) and foreign
exchange losses amounts to
DKK 192m (2020: DKK 266m)
for the Group.
3)
Other financial costs contains
bank charges, fees, early
repayment fees, commitment
fees and creditline fee.
4)
Interest capitalised on two
newbuildings (2020: three
newbuildings). The interest
was calculated by using a
general interest rate of 1.30%
p.a. (2020: 1.30% p.a.).
117
DFDS Annual Report 2021
Consolidated Financial Statements
DKK million 2021 2020
Allocation of currency, principal nominal amount:
DKK 2,664 2,126
EUR 8,226 7,836
NOK
2)
1,271 1,200
GBP 1,144 1,130
USD 809 188
SEK 193 142
Other 31 32
Total interest-bearing liabilities 14,337 12,654
Accounting policies
Interest-bearing liabilities comprise amounts owed
to mortgage/credit institutions and banks as well as
amounts owed to owners of issued corporate bonds
including liabilities arising from derivatives relating
to issued corporate bonds. The amounts are initially
recognised at fair value net of transaction expenses.
Subsequently, the financial liability is measured at
amortised cost, corresponding to the capitalised value
using the effective interest method, so that the differ-
ence between the proceeds and the nominal value is
recognised in the Income statement under ‘financial
costs’ over the term of the loan.
Interest-bearing liabilities also include capitalised
residual lease obligations on finance leases. Other li-
abilities are recognised at amortised cost, which cor-
responds to the net realisable value in all material
respects.
4.5 Interest-bearing liabilities
DKK million 2021 2020
Bank loans and mortgage on ferries and other ships 8,409 8,151
Issued corporate bonds
1)
298 1,162
Lease liability 3,118 2,407
Total interest-bearing non-current liabilities 11,825 11,720
Bank loans and mortgage on ferries and other ships 858 407
Issued corporate bonds
1)
932 0
Lease liability 721 519
Other current liabilities 1 8
Total interest-bearing current liabilities 2,511 934
Total interest-bearing liabilities 14,337 12,654
In connection with the delivery of one new freight and
passenger ferry and one new freight ferry in 2021 DFDS’
obtained two new mortgage loans; one loan of DKK 744m
(EUR 100m), with a maturity of 12 years based on EURI-
BOR 3M interest rate and one loan of DKK 364m, with a
maturity of 5 years and a fixed interest rate via financial
hedge.
In connection with the delivery of two new freight ferries
in 2020 DFDS’ obtained two new mortgage loans; one loan
of DKK 364m with a maturity of 12 years and a repayment
profile of 15 years and one loan of DKK 352m with a matu-
rity of 12 years and a repayment profile of 15 years. Both
mortgage loans are CIBOR based.
The fair value of the interest-bearing liabilities amounts
to DKK 14,331m (2020: DKK 12,692m). The fair value
measurement is categorised within level 3 in the fair value
hierarchy except for the part that relates to issued corpo-
rate bonds of nominal NOK 1,250m for which the fair value
measurement is categorised within level 1.
The fair value of the financial liabilities is determined as
the present value of expected future repayments and in-
terest rates. The Group’s actual borrowing rate for equiv-
alent terms is used as the discount rate. The fair value of
the issued corporate bonds nominal NOK 1,250m has been
calculated based on the quoted bond price in May 2020
which is the latest quoted price (2020: quoted bond price
in May 2020). The fair value of the issued corporate bonds
nominal NOK 400m has been calculated based on the
quoted bond price in June 2019 which is the latest quoted
price (2020: quoted bond price in June 2019).
DKK 3,109m of the interest-bearing liabilities fall due after
five years (2020: DKK 2,778m). No unusual conditions in
connection with the borrowings are made. The loan agree-
ments can be settled at fair value plus a small surcharge,
whereas premature settlement of the corporate bonds re-
quires a repurchase of the bonds.
The covenants of a loan agreement — entered into in June
2018 in connection with the acquisition of U. N. Ro-Ro
— were adapted in June 2020 to reflect the uncertainty
caused by Covid-19. During 2021 these adoptions were
revoked and the original covenants re-installed. No other
loan agreements contain relevant covenant risk.
Reference is made to note 4.1 for financial risks, etc.
1)
The Group has issued two 5
year corporate bond loans;
one in 2019 of nominal NOK
400m and one in 2017 of
nominal NOK 1,250m respec-
tively.
2)
In 2017 DFDS issued a five-
year corporate bond of NOK
1,250m, which runs for the
period 28 September 2017
until 28 September 2022.
The bond is listed on the Oslo
Stock Exchange. The five-year
bond has been issued with a
floating rate based on three
month NIBOR + 1.32% margin
in NOK, but swapped to CIBOR
+ 0.99% margin in DKK. In
2019 DFDS issued a five-year
corporate bond of NOK 400m,
which runs for the period 7
June 2019 until 7 June 2024.
The bond is listed on the Oslo
Stock Exchange. The five-year
bond has been issued with a
floating rate based on three
month NIBOR + 1.50% margin
in NOK, but swapped to CIBOR
+ 1.00% margin in DKK.
118
DFDS Annual Report 2021
Consolidated Financial Statements
4.7 Treasury shares (continued)
In accordance with the Annual General Meeting in March
2021 the Board of Directors is authorised – until 23
March 2025 – to acquire treasury shares up to 5,860,000
shares corresponding to a nominal share value of DKK
117,200,000. However, DFDS’ total number of treasury
shares cannot at any time exceed 10% of DFDS A/S’ share
capital. The price cannot deviate by more than 10% from
the listed acquisition price on NASDAQ Copenhagen at the
time of acquisition.
DFDS A/S has during 2021 acquired treasury shares for a
total payment of DKK 75m (2020: no treasury shares ac-
quired). Furthermore, during 2021 DFDS A/S has disposed
treasury shares for a total consideration of DKK 48m
(2020: DKK 3m) in connection with employees’ exercise of
share options/jubilee shares.
The Parent Company’s holding of treasury shares at 31 De-
cember 2021 is 1,272,318 shares of DKK 20 each (2020:
1,255,892 shares), corresponding to 2.17% (2020: 2.14%)
of the Parent Company’s share capital. Treasury shares are
held to cover the share option scheme and restricted stock
unit plan for employees.
4.6 Equity
Accounting policies
Dividends
Proposed dividend is recognised as liabilities at the
date on which they are adopted at the annual general
meeting (time of declaration). The expected dividend
payment for the year is disclosed as a separate item
in the equity.
Reserve for treasury shares
The reserve comprises the nominal value of treasury
shares. The difference between the market price paid
and the nominal value as well as dividend on treasury
shares are recognised directly in equity under retained
earnings. The reserve is a distributable reserve.
Currency translation reserve
The reserve comprises DFDS A/S shareholders’ share
of currency translation adjustments arising on the
translation of net investments in enterprises with a
functional currency other than DKK. The reserve is dis-
solved upon disposal of the entity.
Reserve for hedging
The hedging reserve comprises the fair value of hedg-
ing transactions that qualify for recognition as cash
flow hedges and where the hedged transactions have
not been realised. Hedge accounting ceases when the
hedging instrument matures or if a hedge is no longer
effective.
4.7 Treasury shares
Number of shares 2021 2020
Treasury shares at 1 January 1,255,892 1,421,256
Acquisition of treasury shares 200,000 0
Disposal of treasury shares due to exercise of share options, and jubilee shares -183,574 -158,364
Disposal of treasury shares 0 -7,000
Treasury shares at 31 December 1,272,318 1,255,892
Market value of treasury shares based on quoted share price at 31 December, DKK million 444 346
4.8 Earnings per share
2021 2020
Profit for the year (DKK million) 976 442
Attributable to non-controlling interests (DKK million) -18 -9
Attributable to DFDS Group 958 433
Weighted average number of issued ordinary shares 58,631,578 58,631,578
Weighted average number of treasury shares -1,251,616 -1,321,240
Weighted average number of circulating ordinary shares 57,415,962 57,310,338
Weighted average number of share options issued 84,363 306
Weighted average number of circulating ordinary shares (diluted) 57,500,325 57,310,644
Basic earnings per share (EPS) of DKK 20 in DKK 16.69 7,56
Diluted earnings per share (EPS-D) of DKK 20 in DKK 16.67 7,56
When calculating diluted earnings per share for 2021,
339,833 share options (2020: 1,190,564 share options)
have been omitted as they are out-of-the-money, but po-
tentially the share options might dilute earnings per share
in the future.
119
DFDS Annual Report 2021
Consolidated Financial Statements
5. Other notes
5.1 Remuneration to Executive Board and Board of Directors ..............................................121
5.2 Fees to Auditors appointed at the Annual General Meeting .......................................122
5.3 Share based payments ........................................................................122
5.4 Cash flow ....................................................................................124
5.5 Acquisitions and sale of enterprises, activities and non-controlling interests ......................124
5.6 Guarantees, collateral and contingent liabilities .................................................126
5.7 Contractual commitments .....................................................................127
5.8 Related party transactions ....................................................................127
5.9 Covid-19 impact ..............................................................................127
5.10 Events after the balance sheet date ............................................................127
5.11 Company overview ...........................................................................128
120
DFDS Annual Report 2021
Consolidated Financial Statements
5.1 Remuneration to the Executive Board and Board of Directors
Remuneration to the Executive Board Torben Carlsen, CEO Karina Deacon, CFO Executive Board, total
DKK ‘000 2021 2020 2021 2020 2021 2020
Wages and salaries 7,900 6,900 4,200 4,000 12,100 10,900
Bonus 5,000 2.208 2,500 1,335 7,500 3,543
Defined contribution pension plans 790 690 420 400 1,210 1,090
Share based payment 2,381 1,866 1,005 434 3.386 2,300
Other employee costs 250 333 175 192 425 525
Total remuneration to Executive Board 16,321 11,997 8,300 6,361 24,621 18,358
The termination period for the Executive Board is 12
months. Further, the CEO has additional 12 months redun-
dancy payment. In connection with a change of control of
the Group, the members of the Executive Board can – with-
in the first 3 months of the event - terminate their employ-
ment with the same effect as if the Company had given no-
tice of termination of employment to the Executive Board.
Key management personnel is defined as CEO Torben
Carlsen and CFO Karina Deacon
DKK ‘000 2021 2020
Board:
Claus V. Hemmingsen, Chair 1,125 1,125
Klaus Nyborg, Deputy Chair 750 750
Marianne Dahl 375 375
Anders Götzsche 375 375
Jens Otto Knudsen 375 375
Jill Lauritzen Melby 375 375
Jesper Hartvig Nielsen 375 375
Lars Skjold-Hansen 375 375
Dirk Reich 375 375
Total remuneration to the Board (continue to the right) 4,500 4,500
(Continued)
DKK ‘000 2021 2020
Audit Committee:
Anders Götzsche, Chair 250 250
Dirk Reich
1)
500 125
Jill Lauritzen Melby 125 125
Total remuneration to the Audit Committee 875 500
Remuneration & Nomination Committee:
Claus V. Hemmingsen 100 100
Klaus Nyborg 100 100
Marianne Dahl 100 100
Total remuneration to the Nomination Committee 300 300
Total remuneration to the Board of Directors 5,675 5,300
Total remuneration to the Executive Board and Board of Directors 30,296 23,658
Remuneration to the chair of the Audit Committee is DKK
250k (2020: DKK 250k) and remuneration to other mem-
bers of the Audit Committee is DKK 125k (2020: DKK
125k) each. Remuneration to each of the three members
of the Remuneration and Nomination Committee is DKK
100k in total (2020: DKK 100k). No remuneration is paid
to members of other committees.
1)
Dirk Reich received an
extraordinary fee of
DKK 375,000 in 2021 due
to considerable advisory
work related to business
development, acquisitions
and organisational design.
121
DFDS Annual Report 2021
Consolidated Financial Statements
5.2 Fees to Auditors appointed at the Annual General Meeting
DKK million 2021 2020
Audit fees 10 7
Other assurance engagements
1)
0 0
Tax and VAT advice
2)
1 0
Non-audit services
3)
0 0
Total fees 11 8
Fees for services other than the statutory audit of the
financial statements provided by Pricewaterhousecoop-
ers Statsautoriseret Revisionspartnerselskab, Denmark
amounted to DKK 0.4m (2020 ERNST & YOUNG Godkendt
Revisionspartnerselskab, Denmark: DKK 0.8m) including
other assurance opinions and agreed-upon procedures, as
well as tax and accounting advice.
1)
Other assurance engage-
ments amounts to DKK 0.0m
(2020: DKK 0.4m). Include
review of regulatory financial
statements.
2)
Tax and VAT advice amounts
to DKK 0.6m (2020: DKK
0.2m) and comprises advice
in relation to acquisition of en-
terprises, review of tax return
and employee tax assistance
and compliance.
3)
Non-audit services amounts
to DKK 0.3m (2020: DKK
0.1m) and comprises advice
in relation to acquisition of
enterprises and fees for other
services.
5.3 Share based payment (continued)
2020
Executive
Board
Number
Leading
employees
Number
Resigned
Executive
Board members
and employees
Number Total
Average
exercise
price per
option
DKK
Outstanding at 1 January 182,693 412,973 167,540 763,206 337.63
Transferred between categories 0 -89,447 89,447 0 339.74
Granted during the year 177,936 286,040 0 463,976 314.00
Exercised during the year 0 -5,425 0 -5,425 136.00
Forfeited during the year 0 0 -31,193 -31,193 331.65
Outstanding at 31 December 360,629 604,141 225,794 1,190,564 338.55
Of this exercisable at the end of the year 69,830 126,732 121,359 317,921 314.27
The stock options granted in 2021 had a fair value of DKK
6.6m (2020: DKK 9.1m), equal to an average fair value per
option of DKK 42.66 (2020: DKK 19.67).
182,634 stock options have been exercised during 2021
(2020: 5,425). The average weighted market price per
share exercised in 2021 is DKK 289.75 (2020: DKK 280.90).
Vesting of stock options is expensed in the Income state-
ment for 2021 with DKK 7m (2020: DKK 7m). The calcu-
lated fair values are based on the Black-Scholes formula
for measuring stock options. The outstanding options on
31 December 2021 have an average weighted remaining
contractual time 2.3 years (2020: 2.7 years).
Assumptions concerning the calculation of fair value at time of grant:
Year of grant
Exercise
price
Market
price at
grant date
Expected
volatility
Risk-free
interest
rate
Expected
dividend per
share (DKK)
at grant date
Expected
term
Fair value
per option
at time of
granting
2021 301.00 271.00 34.81% -0.55% 6.33 3 years 42.66
2020 314.00 262.40 27.27% -0.72% 9.00 3 years 19.67
2019, November 291.00 273.40 26.86% -0.72% 11.00 27 months 25.28
2019, February 335.00 306.60 27.99% -0.51% 9.00 3 years 34.19
2018 383.00 331.60 27.87% -0.20% 11.00 3 years 30.48
2017 390.00 377.40 28.66% -0.56% 8.00 3 years 54.00
The expected volatility for 2017 to 2021 is based on the
historical volatility for the past three years. The risk-free
interest rate is for 2017 to 2021 is based on three-year
Danish government bonds.
Restricted Stock Units (RSUs)
RSUs have been granted to the Executive Board and lead-
ing employees. Each RSU gives the holder a right to receive
one existing share in the Parent Company of nominal DKK
20 when the three-year vesting period has elapsed. The
RSUs equal a right to receive 0.04% of the share capital
if the remaining RSUs are transferred. Vesting of RSUs is
expensed in the Income statement for 2021 with DKK 2m.
The number of RSUs granted in 2021 is based on the aver-
age share price of the Parent Company’s shares five days
after the release of the Q4 report.
5.3 Share based payments
Long-term incentives
The decision to grant long-term incentives is made by the
Board of Directors. With effect from 2021 the long-term
incentives for the Executive Board and leading employees
consist of two components, Share options and Restricted
Share Units (RSUs) where the award is split 50/50 between
them based on value as per grant date. Both components
vest on a straight-line basis over three years from the date
of grant. Special conditions apply regarding illness and
death and if the capital structure of the Parent Company is
changed. Share options and RSUs granted can only be set-
tled with shares. A part of the treasury shares is reserved
for settling the outstanding share options and RSUs.
Share options
Share options have been granted to the Executive Board
and leading employees. Each share option gives the hold-
er of the option the right to acquire one existing share in
the Parent Company of nominal DKK 20. The share option
schemes equal a right to acquire 2.0% of the share capital
(2020: 2.0%) if the remaining share options are exercised.
Share options were granted in 2016-2020 at an exercise
price equal to the average share price of the Parent Com-
pany’s shares 20 days before the grant with an addition
of 10%. Share options are granted in 2021 at an exercise
price equal to the average share price of the Parent Com-
pany’s shares five days after the release of the Q4 report
with an addition of 10%.
The share options can be exercised when a minimum of
three years and a maximum of five years have elapsed
since the grant dates.
2021
Executive
Board
Number
Leading
employees
Number
Resigned
Executive
Board members
and employees
Number Total
Average
exercise
price per
option
DKK
Outstanding at 1 January 360,629 604,141 225,794 1,190,564 338.55
Granted during the year 56,728 97,898 0 154,626 301.00
Exercised during the year -42,052 -70,214 -70,368 -182,634 262.00
Expired during the year 0 -5,463 0 -5,463 262.00
Outstanding at 31 December 375,305 626,362 155,426 1,157,093 337.63
Of this exercisable at the end of the year 76,991 146,230 116,612 339,833 385.67
122
DFDS Annual Report 2021
Consolidated Financial Statements
5.3 Share based payment (continued)
2021
Executive
Board
Number
Leading
employees
Number Total
Outstanding at 1 January 0 0 0
Granted during the year 8,844 15,260 24,104
Outstanding at 31 December 8,844 15,260 24,104
Of this exercisable at the end of the year 0 0 0
Year of grant
Exercise
price
Market
price at
grant date
Expected
volatility
Risk-free
interest
rate
Expected
dividend per
share (DKK)
at grant date
Expected
term
Fair value
per share
at time of
granting
2021 0.00 271.00 34.81% -0.55% 6.33 3 years 273.65
Employee recognition
In recognition of the contribution made by DFDS’ employ-
ees in a year with exceptional challenges, the Board of
Directors has 22 December 2020 awarded up to 50 shares
free of charge to each employee. The shares will vest over
a three-year period from January 2021 to December 2023
on a straight-line basis. Only employees working through
the full vesting period will be entitled to the shares.
Employees working more than 24 hours per week will get 50
shares, if they work more than 12 hours and up to 24 hours
per week, they get 30 shares and if they work up to 12 hours
per week, they get 10 shares. If an employee retires or
leaves his job because of disability during the period until
December 2023 he/she is entitled to the full number of
shares when he/she leaves. The shares are in most coun-
tries awarded as a phantom share programme whereby
the entitled employees will receive a cash payment in
December 2023 equal to the value of 50 DFDS shares.
In total 8,289 employees are at award date entitled to
the shares. Based on historical attrition rates for each
country the total expected number of shares to be trans-
ferred to the employees is 282,723 of which 168,176 are
phantom shares (cash) and 114,547 are shares.
150 shares have been transferred during 2021. Vesting of
shares for 2021 is an expense of DKK 29m.
Year of grant
Exercise
price
Market
price at
grant date
Expected
volatility
Risk-free
interest
rate
Expected
dividend per
share (DKK)
at grant date
Expected
term
Fair value
per share
at time of
granting
2020 Special Reward 0.00 267.0 34.87% -0.55% 6.33 3 years 247.87
5.3 Share based payment (continued)
Jubilee shares
In recognition of the contribution made by DFDS’ employees
in recent years to the company’s growth and to celebrate the
company’s 150-year anniversary, the Board of Directors has
in 2016 awarded 30 shares free of charge to each full-time
employee.
The shares are awarded as a Restricted Stock Unit Plan,
which contains certain conditions to be eligible for the shares.
Only employees that are employed as per 1 December 2016
and continuously work until 1 February 2020 will receive the
shares. Employees working more than 24 hours per week will
get 30 shares, if they work more than 12 hours and up to 24
hours per week, they get 20 shares and if they work up to 12
hours per week, they get 10 shares. If an employee retires
or must leave his job because of disability during the period
until 1 February 2020 he/she is entitled to the full number of
shares when he/she leaves.
In total 7,751 employees are at award date entitled to the
shares. Based on historical attrition rates for each country
the total expected number of shares to be transferred to the
employees is 187,235 with a total fair value of DKK 55m,
which is expensed under Special items over the vesting pe-
riod.
The last 940 Jubilee shares have been transferred during
2021 (2020: 159,939). The average weighted market price
per share exercised in 2021 is DKK 353.80 (2020: DKK
237.31).
Accounting policies
The Group has set up equity-settled share option plans
and RSUs. Part of the Parent Company’s holding of
treasury shares is used for the share option plans and
the RSUs.
The value of services received in exchange for granted
share based payment is measured at the fair value of
the share based payment granted.
The equity-settled share options and RSUs are meas-
ured at the fair value at grant date and recognised in
the Income statement under staff costs over the vest-
ing period. The counter posting is recognised directly in
equity as a shareholder transaction.
At initial recognition of the share options, an estimate
is made over the number of share based payment that
the employees will vest, cf. the service conditions
described above in this note. Subsequent to initial
recognition, the estimate of share based payments to
be vested is adjusted whereby the total recognition
is based on the actual number of vested share based
payments.
The fair value of the granted share options is calcu-
lated using the Black-Scholes option-pricing model.
Terms and conditions for each grant are taken into ac-
count when calculating the fair value.
The share award programmes are recognised at fair
value over the vesting period and expensed as staff
cost. The accrual is recorded under Other payables or
on equity depending on whether settlement is done in
cash or shares, respectively.
123
DFDS Annual Report 2021
Consolidated Financial Statements
5.5 Acquisitions and sale of enterprises, activities and non-controlling interests
Acquisitions 2021
On 14th September 2021, the acquisition of the HSF
Logistics Group was completed. HSF Logistics Group is
one of Europe’s leading cold chain logistics providers to
meat producers and other food producers that operate
temperature-controlled supply chains. The acquisition
significantly strengthens DFDS’ cold chain activities and
the offering to cold chain logistics customers.
DFDS also acquired most of the existing minority share-
holders and thus holds more than 99% of the ownership
of the HSF Logistics Group as of 31 December 2021.
The total acquisition price was DKK 1,755m (including
DKK 58m related to minority shareholders) of which DKK
966m was paid in cash in September and DKK 789m paid
during 4th quarter of 2021. Cash in the acquired company
amounted to DKK 4m. Accordingly the liquidity effect was
DKK 1,751m. Trade receivables have been recognised at
the acquisition date at a fair value of DKK 403m which is
DKK 2m less than their gross value.
HSF Logistics Group revenue included in the 2021 report-
ing is DKK 1.0bn and EBITDA of DKK 120m. If the transac-
tion had been completed as of 1st January 2021 revenue
from 1 January to 31 December 2021 is estimated to have
been DKK 3.3bn and EBITDA of DKK 368m. The Group has
elected to measure the non-controlling interests in the
acquiree at their proportionate share of the acquired net
assets. Transaction and acquisition costs amounts to DKK
29m which are recognised as special items. The prelimi-
nary purchase price allocation shows the following:
5.4 Cash flow
DKK million 2021 2020
Non-cash operating items
Change in provisions 7 15
Change in write-down of inventories for the year 8 16
Change in provision for defined benefit plans and jubilee obligations 10 8
Vesting of share option plans and employee shares expensed in the Income statement 37 7
Non-cash operating items 62 45
Change in working capital
Change in inventories -91 34
Change in receivables, such as trade receivables, prepaid costs, etc. -359 196
Change in current liabilities, such as trade payables, current account with
joint ventures, etc. 597 -82
Change in working capital 148 148
Accounting policies
The Cash flow statement has been prepared using the
indirect method, and shows the consolidated cash
flow from operating, investing, and financing activities
for the year, and the consolidated cash and cash equiv-
alents at the beginning and end of the year.
The cash flow effect of acquisition and disposal of
enterprises is shown separately in cash flows to/from
investing activities.
Cash flows from acquisitions of enterprises are rec-
ognised in the Cash flow statement from the date of
acquisition. Cash flows from disposals of enterprises
are recognised up until the date of disposal.
Cash flow from operating activities is calculated on
the basis of the profit/loss before amortisation and de-
preciation (EBITDA) and special items adjusted for the
cash flow effect of special items, non-cash operating
items, changes in working capital (such as trade paya-
bles, current account payables to joint ventures, trade
receivables, prepaid costs, etc.), payments related to
pensions and other provisions, payments relating to
financial items and corporation tax paid.
Cash flow from investing activities includes payments
in connection with the acquisition and disposal of en-
terprises and activities and of non-current intangible
assets, tangible assets and investments.
Cash flow from financing activities includes changes
in the size or composition of the Group’s share capi-
tal, payment of dividends to shareholders, purchase of
treasury shares, cash received from exercise of share
options and the obtaining and repayment of bank
loans and mortgage loans and other long-term and
short-term debt. Payment of lease liablities is includ-
ed under financing activities and the related interest is
included as a financial item under operating activities.
Cash and cash equivalents comprise cash at banks and
on hand.
124
DFDS Annual Report 2021
Consolidated Financial Statements
In connection with the acquisition DFDS has measured
identifiable intangible assets i.e., customer relationships
etc. which are recognised in the acquisition balance sheet
at their fair value. The fair value is calculated to DKK
538m at acquisition date.
Following recognition of acquired identifiable assets and
liabilities at their fair value, the goodwill related to the
acquisition is measured at DKK 756m. The goodwill repre-
sents primarily the value of the staff and know-how taken
over and expected synergies from combining the acquired
Group with the existing DFDS activities and network. The
goodwill is not deductible for tax purposes. Goodwill taken
over with acquisition amounted DKK 81m.
2021 Insignificant acquisitions
In October 2021 the acquisition of the Swedish haulier GA
Åkerierna AB headquartered in Hjälteby, Sweden, was com-
pleted in an asset transfer agreement and DFDS Group
obtained control. DFDS paid DKK 14m for the acquired ac-
tivity. The acquisition is not expected to significantly affect
the financial statements of DFDS Group.
2022 ICT Logistics
On 15 September 2021 DFDS entered into an agreement
to acquire 80.1% of the share capital of the Danish freight
forwarder ICT Logistics. DFDS has owned 19.9% of the
shares in ICT Logistics since 2006. Closing of the transac-
tion took place 19 January 2022. DFDS paid DKK 69m for
the acquired Group.
At the date of this report, it is impractical to disclose the
provisional fair values of the acquired assets, liabilities,
contingent liabilities, as well as the expected goodwill, due
to the timing of this acquisition. In addition, the acquisition
is not expected to significantly affect the financial state-
ments of DFDS Group.
2020 Insignificant acquisitions
In March 2020 the acquisition of the UK logistics company
Colley Brothers Ltd. headquartered in Grimsby was com-
pleted and the DFDS Group obtained control. DFDS paid
DKK 18m for the acquired company. Cash in the acquired
company amounted to DKK 3m and accordingly the liquid-
ity effect was DKK 14m.
Acquisition of non-controlling interests
Acquisition of shares by DFDS A/S in AB DFDS Seaways
during 2021 amounts to less than DKK 1m (2020: less
than DKK 1m), equivalent to an ownership of 0.01%
(2020: 0.03%) after which the company is owned 97.1%
(2020: 97.1%). Badwill of less than DKK 1m (2020: Bad-
will of less than DKK 1m) is recognised directly in equity.
Significant accounting estimates and assessments
In applying the acquisition method of accounting, es-
timates are an integrated part of assessing fair values
of several identifiable assets acquired and liabilities
assumed, as observable market prices are typically not
available.
Valuation techniques where estimates are applied typ-
ically relate to determining the present value of future
uncertain cash flows or assessing other events in which
the outcome is uncertain at the date of acquisition.
Significant estimates are typically applied in accounting
for property, plant and equipment and customer rela-
tionships. As a result of the uncertainties in fair value
estimation, measurement period adjustments may be
applied.
5.5 Acquisitions and sale of enterprises, activities and non-controlling interests (continued)
DKK million
Preliminary
Fair value at
acquisition date
Non-current intangible assets 619
Land and buildings 281
Equipment etc. 884
Deferred tax 2
Non-current assets 1,786
Inventories 17
Trade receivables including work in progress services 403
Other receivables 74
Cash at hand and in bank 4
Current assets 498
Total assets 2,285
Deferred tax 155
Interest bearing debt 413
Non-current liabilities 568
Trade payables 322
Interest bearing debt 297
Other current liabilities 97
Current liabilities 716
Total liabilities 1,284
Non-controlling interests’ share of acquired net assets 2
Fair value of acquired net assets 999
Total purchase price
Cash consideration 1,755
Total purchase price 1,755
Goodwill at acquisition 756
The above purchase price allocation is preliminary and is
subject to adjustments.
125
DFDS Annual Report 2021
Consolidated Financial Statements
5.6 Guarantees, collateral and contingent liabilities
Guarantees amount to DKK 619m (2020: DKK 481m) for
the Group. The Group has issued a guarantee for a terminal
agreement. In addition, the Group has issued two guar-
antees in relation to defined benefit pension schemes in
the UK of an amount up to DKK 255m (2020: DKK 389m)
and a few guarantees on behalf of subsidiaries without a
specific capped amount. The Group has also issued letters
of support, particularly for certain Group companies and
associated companies with negative equity.
The Group is in 2021 as well as in 2020 part in various le-
gal disputes. The outcome of these disputes is not consid-
ered likely to influence DFDS’ financial position significant-
ly, besides what is already recognised in the balance sheet.
Certain ferries with a total carrying amount of DKK 7,062m
(2020: DKK 6,946m) have been pledged as security for
mortgage on ferries and bank loans with a total carrying
amount of DKK 5,024m (2020: DKK 4,203m).
At year end 2021 DKK 167m (2020: DKK 147m) of the
cash was deposited on restricted bank accounts.
Significant accounting estimates and assessments
Provisions and contingencies
Management assesses provisions and contingencies
on an ongoing basis, as well as the likely outcome of
pending or potential legal proceedings, etc. Such out-
come depends on future events which are inherently
uncertain. In assessing the likely outcome of signifi-
cant legal proceedings, tax issues, etc., Management
uses external legal advisers as well as relevant case
law.
5.7 Contractual commitments
DKK million 2021 2020
Contractual commitments, term 0-1 year 625 1,417
Contractual commitments, term 1-5 years 86 402
Contractual commitments, term after 5 years 91 527
Contractual commitments (undiscounted) 802 2,346
Accounting policies
Enterprises acquired or formed during the year are
recognised in the Consolidated Financial Statements
from the date of acquisition or formation. Enterprises
disposed are recognised in the Consolidated Financial
Statements until the date of disposal. The compara-
tive figures are not adjusted for acquisitions or dis-
posals.
Business combinations where control is obtained by
the DFDS Group are recognised using the acquisition
method. The identifiable assets, liabilities and con-
tingent liabilities of newly-acquired enterprises are
assessed at their fair value on the acquisition date.
Identifiable intangible assets are recognised if they are
separable or arise from a contractual right. Deferred
tax related to the revaluations is recognised.
The acquisition date is the date on which the DFDS
Group obtains actual control over the acquired enter-
prise.
Positive differences (goodwill) between, on the one
hand, the purchase price, the value of minority inter-
ests in the acquired enterprise and the fair value of
any previously acquired shareholdings, and, on the
other hand, the fair value of the acquired identifiable
assets, liabilities and contingent liabilities are recog-
nised as goodwill under non-current intangible assets.
Goodwill is not amortised, but is tested annually for
impairment. The first impairment test is performed be-
fore the end of the acquisition year.
Upon acquisition, goodwill is allocated to the
cash-generating units, which subsequently form the
basis for the impairment test. Allocation of goodwill
to cash-generating units is described in sections 3.1.1
and 3.1.5.
Goodwill and fair value adjustments in connection
with the acquisition of a foreign enterprise with a dif-
ferent functional currency than the DFDS Group’s pres-
entation currency are treated as assets and liabilities
of the foreign enterprise, and are translated and con-
verted at first recognition to the functional currency
of the foreign enterprise at the exchange rate on the
transaction date.
The purchase consideration of an enterprise is the fair
value of the agreed payment in the form of assets
transferred, liabilities assumed, and equity instru-
ments issued to seller. If part of the consideration is
contingent on future events or fulfilment of agreed
conditions, this part of the consideration is recognised
at fair value at the date of acquisition. Costs attribut-
able to business combinations are recognised directly
in the Income statement when incurred.
If, at acquisition date, uncertainty exist regarding the
identification and measurement of acquired assets,
liabilities or contingent liabilities, or determination of
the purchase price, initial recognition and measure-
ment is done based on preliminary values. The prelimi-
nary values may be adjusted until 12 months from the
acquisition date, provided the initial recognition was
preliminary or incorrect. Changes in estimates regard-
ing contingent considerations are recognised in the
Income statement as Special items.
Incremental acquisitions after control has been ob-
tained, i.e. purchase of minority interests, are recog-
nised directly in equity. Disposal of minority interests
not resulting in loss of control is likewise recognised
directly in equity.
Gains or losses on disposal of subsidiaries, associates
and joint ventures are calculated as the difference
between the disposal consideration and the book
value of net assets at the date of disposal, including
the book value of goodwill, accumulated exchange
gains and losses previously recognised in the equity
as well as anticipated disposal costs. Exchange rate
adjustments attributable to the Group’s ownership in-
terest, and which previously were recognised directly
in equity, are included in the calculation of the gain/
loss. Any retained participating interests are measured
at their fair value at the time at which the controlling
influence was lost.
126
DFDS Annual Report 2021
Consolidated Financial Statements
5.10 Events after the balance sheet date
On 15 February 2022, DFDS awarded 23,350 restricted
stock units and 176,706 share options to the Executive
Board and a number of key employees. The theoretical
value is DKK 14.6m calculated according to the Black-
Scholes-model
5.9 Covid-19 impact
Information about judgements made in relation to Cov-
id-19 and the effects on the amounts recognised in the
financial statement is included in the note.
DKK million 2021 2020
Note Text
2.4 Employee cost Government grants (Covid-19)
1)
55 122
2.4 Employee cost Wages, salaries and remuneration 0 11
Total impact on EBITDA 55 133
2.6. Special Items Termination cost in connection with restructuring 0 -102
2)
2.6 Special Items Impairment of a passenger ferry and terminal 0 -100
3)
Total impact on EBIT 55 -69
Government grants
DFDS has taken part in various government compensa-
tion schemes following Covid-19. Wage compensation
DKK 55m (2020: DKK 122m) is reducing the staff costs
in the Income statement and contributions from volun-
tary salary reduction of DKK 0m (2020: DKK 11m) is
deducted in wages, salaries and remuneration.
Impairment testing
In 2020 and in relation to the underlying assumptions for
Impairment testing in note 3.1.5, the outbreak of Covid-19
has been taken into consideration and lead to an impair-
ment of a passenger ferry and terminal of DKK 100m. In
2021 no impairment nor reversals due to Covid-19 impact.
Leases
The International Accounting Standards Board (IASB) has
published ‘Covid-19-Related Rent Concessions (Amend-
ment to IFRS 16 leases) as of 28 May 2020, amending the
standard to provide DFDS with an exemption from assess-
ing whether a Covid-19 related rent concession is a lease
modification. DFDS did not adopt the Covid-19 amend-
ment and no reassessment nor renegotiations of rent con-
cessions have taken place.
1)
Contributions from Govern-
ment for wage subsidy are
included in employee costs.
DFDS took part in local
schemes during 2021 and
2020.
2)
Restructuring costs related
to Covid-19 are included in
special items and consist of
termination costs related to
employees made redundant.
3)
Due to continued travel
restrictions an impairment
loss of DKK 100m has been
recognised in 2020 under
special items relating to the
business unit “Passenger”
Contractual commitments in 2021 mainly relates to one
new buildings on order for a freight and passenger ferry (ro-
pax) to be delivered in 2022.
The Group has a contractual commitment for a concession
agreement in France regarding the Dieppe-Newhaven route
for two chartered freight and passenger ferry (ro-pax). Fur-
ther, contractual commitments includes a Vessel Share
Agreement in Holland and a new headquarter in Denmark.
5.8 Related party transactions
Lauritzen Fonden, Copenhagen with a nominal share-
holding of 41.73%, through Lauritzen Fonden Holding
Aps, exercises de facto control over DFDS A/S. Accord-
ingly, the members of the Board of Directors and the
Executive Board at Lauritzen Fonden as well as all
companies owned by Lauritzen Fonden are related parties.
Furthermore, related parties comprise DFDS’ Executive
Board and Board of Directors, leading employees and close
members of the family of those, DFDS’ subsidiaries, asso-
ciates and joint ventures, reference is made to note 5.11.
Apart from intra-group balances and transactions (primar-
ily charter hire, financing and commissions etc.), which
are eliminated on consolidation, usual Executive Board
and Board of Directors remuneration (reference is made
to note 2.4 and 5.1), share options to the Executive Board
and leading employees (reference is made to note 5.3) and
the below transactions, no related-party transactions have
been carried out during the year.
DKK million
2021
Sale of
services
Purchase
of services
Sale of
assets Receivables Liabilities
Impairment
loss of
receivables
Associates and joint ventures 35 189 0 26 51 0
2020
Associates and joint ventures
21 175 0 28 51 0
5.7 Contractual commitments (continued)
127
DFDS Annual Report 2021
Consolidated Financial Statements
5.11 Company overview
Company
Owner ship
share 2021
1
Country City Currency Share Capital
Parent Company
DFDS A/S Denmark Copenhagen DKK 1,172,631,560
Subsidiaries:
DFDS Seaways NV
2)
Belgium Gent EUR 2,355,976
N&K Cold Chain Logistics (Shanghai) Co., Ltd.
China
Shanghai CNY 2,901,420
DFDS Logistics s.r.o.
2)
Czech Republic
Prague CZK 1,100,000
DFDS Germany ApS
2)
Denmark Copenhagen DKK 50,000
DFDS Stevedoring A/S
2)
Denmark Esbjerg DKK 502,000
N&K Spedition A/S Denmark Esbjerg DKK 600,000
N&K Spedition Skandinavien Holding A/S Denmark Esbjerg DKK 7,500,000
Skive Køletransport A/S Denmark Hobro DKK 1,500,000
Thadaeus Shipping & Transport ApS Denmark Padborg DKK 312,500
DFDS Seaways Plc.
2)
England Immingham GBP 40,250,000
DFDS Logistics Ltd.
2)
England Immingham GBP 150,000
DFDS Logistics Services Ltd.
2)
England Immingham GBP 100
DFDS Seaways (Holdings) Ltd.
2)
England Immingham GBP 250,000
DFDS Logistics Contracts Ltd. England Immingham GBP 2,571,495
DFDS Logistics Grimsby Holdings Ltd. England Immingham GBP 1,166
DFDS Logistics Property Ltd. England Immingham GBP 250,000
HSF Logistics UK Ltd. England Suffolk GBP 1,000
HSF Fresh Logistics Ltd. England Suffolk GBP 1,000
Huisman International (UK) Ltd. England Corby GBP 100
DFDS Logistics OÜ (Formerly named: Freeco OÜ)
2)
Estonia Tallinn EUR 3,000
DFDS Logistics OY
(Formerly named: Freeco
Logistics OY)
2)
Finland Turku EUR 2,520
DFDS Logistics SARL France Boulogne sur Mer EUR 30,000
DFDS Seaways S.A.S.
2)
France Dieppe EUR 37,000
Dunes Bail SNC
3)
France Paris EUR 1,000
Flandres Bail SNC
3)
France Paris EUR 1,000
DFDS Germany ApS & Co. KG
2, 5)
Germany Cuxhaven EUR 25,000
HSF Logistics Deutschland GmbH Germany Neuenkirchen-Vörden EUR 25,000
HSF Beteiligungs GmbH Germany Neuenkirchen-Vörden EUR 25,000
Eurofresh Logistics GmbH Germany Neuenkirchen-Vörden EUR 25,000
HSF Grundstücksverwaltungs GmbH & co KG. Germany Neuenkirchen-Vörden EUR 20,000
DFDS Logistics Kft. (Formerly named:
Alphatrans-Szállitás Kft) Hungary Gyula HUF 3,000,000
DFDS Logistics Contracts (Ireland) Ltd.
2)
Ireland Dublin EUR 200
DFDS Seaways Ireland Limited
2)
Ireland Dublin EUR 100
Samer seaports & terminals SRL 60.00 Italy Trieste EUR 2,800,000
DFDS SIA (Formerly named: DFDS Logistics Baltic SIA) Latvia Liepaja EUR 113,886
DFDS Seaways SIA
2)
Latvia Riga EUR 99,645
AB DFDS Seaways
2)
97.03 Lithuania Klaipeda EUR 96,438,756
NorthSea Terminal AS Norway Brevik NOK 1,000,000
DFDS Logistics AS
2)
Norway Lysaker NOK 20,538,000
DFDS Logstics Rederi AS
2)
Norway Oslo NOK 49,980,000
DFDS Seaways AS
2)
Norway Oslo NOK 12,000,000
N&K Air Solution AS Norway Oslo NOK 500,000
N&K Trucking Norway AS Norway Oslo NOK 1,000,000
DFDS Polska Sp. Z.o.o.
2)
Poland Poznan PLN 10,005,000
HSF Logistics Sp. Z o.o. 80,00 Poland Szubin PLN 5,000
HSF Logistics Polska Sp. Z o.o. 80,00 Poland Szubin PLN 50,000
GD Investments Sp. z o.o. 80,00 Poland Szubin PLN 5,000
DFDS Special Cargo Unipessoal LDA Portugal Porto EUR 125,000
Romania Transport Group SRL Romania Tibod RON 1,000
DFDS Logistics East Russia Kaliningrad RUB 48,000
DFDS Seaways Ltd.
2)
Russia St. Petersburg RUB 6,134,121
DFDS Seaways Hispania SL
2)
Spain Valencia EUR 3,000
N&K Spedition Spain S.L. Spain Tarragona EUR 60,000
DFDS Seaways AB Sweden Gothenburg SEK 25,000,000
DFDS Logistics AB Sweden Gothenburg SEK 500,000
DFDS Logistics Contracts AB Sweden Gothenburg SEK 50,000
DFDS Seaways Holding AB
2)
Sweden Gothenburg SEK 100,000
DFDS Logistics Services AB
2)
Sweden Gothenburg SEK 1,100,000
DFDS Logistics Karlshamn AB Sweden Karlshamn SEK 1,800,000
DFDS Logistics Partners AB 85.00 Sweden Gothenburg SEK 1,000,000
DFDS Professionals AB 87,50 Sweden Gothenburg SEK 25,000
N&K Spedition Sverige AB Sweden Helsingborg SEK 50,000
N&K Walking Floor Transport AB Sweden Helsingborg SEK 50,000
DFDS Logistics BV the Netherlands Vlaardingen EUR 454,780
DFDS Seaways BV the Netherlands Vlaardingen EUR 18,400
DFDS Holding BV the Netherlands Vlaardingen EUR 40,000,000
DFDS NewCo B.V. the Netherlands Vlaardingen EUR 1
DFDS Logistics France B.V. the Netherlands Nijmegen EUR 22,689
DFDS Logistics Nijmegen B.V. the Netherlands Nijmegen EUR 18,151
DFDS Transport B.V. the Netherlands Nijmegen EUR 22,689
DFDS Seaways IJmuiden BV
2)
the Netherlands IJmuiden EUR 18,000
Alphatrans International Trucking BV the Netherlands Brielle EUR 18,000
Maxibas B.V. the Netherlands Wijchen EUR 18,152
Huisman Group B.V. the Netherlands Wijchen EUR 20,000
Huisman International B.V. the Netherlands Wijchen EUR 15,882
Huisman International Transport B.V. the Netherlands Wijchen EUR 18,152
Huisman Warehousing B.V. the Netherlands Wijchen EUR 18,152
1)
Unless otherwise indicated,
the companies are 100%
owned by DFDS Group.
2)
The company is directly
owned by the Parent Company
DFDS A/S.
3)
The company is controlled
by DFDS Group, but DFDS
Group has no ownership in the
company.
4)
Due to minority protection in
the shareholders’ agreements
the DFDS Group does not have
a controlling interest.
5)
Relief in accordance with Sec.
264b German Commercial
Code (HGB).
Company
Owner ship
share 2021
1
Country City Currency Share Capital
128
DFDS Annual Report 2021
Consolidated Financial Statements
Huisman Network Logistics the Netherlands Wijchen EUR 18,000
DFDS Distri Holding B.V. the Netherlands Winterswijk EUR 18,000
DFDS Bedrijfswagen Service Winterswijk B.V. the Netherlands Winterswijk EUR 18,000
DFDS Distri Coldstores Winterswijk B.V. the Netherlands Winterswijk EUR 18,000
DFDS Expeditie & Emballage B.V. the Netherlands Winterswijk EUR 18,000
DFDS Logistics Winterswijk B.V. the Netherlands Winterswijk EUR 18,150
DFDS Packaging Pool B.V. the Netherlands Winterswijk EUR 18,000
DFDS Logistics Transport Winterswijk B.V. the Netherlands Winterswijk EUR 18,160
HSF Expeditie Holding B.V. the Netherlands Winterswijk EUR 18,000
DFDS Property and Equipment B.V. the Netherlands Winterswijk EUR 20,000
DFDS Property Nijmegen B.V. the Netherlands Winterswijk EUR 18,000
DFDS Property and Equipment Winterswijk B.V. the Netherlands Winterswijk EUR 77,140
DFDS Turkey Denizcilik ve Tasi Yati AS Turkey Istanbul EUR 342,000,000
DFDS Denizcilik ve Tasimacilik A.S. 98.80 Turkey Istanbul EUR 369,967,159
Trieste Newholdco Denizcilik ve Tasımacılık A.S. Turkey Istanbul EUR 461,635,380
Trieste Holdco Denizcilik ve Tasımacılık A.S. Turkey Istanbul EUR 464,440,121
Trieste Midco Denizcilik ve Tasımacılık A.S. Turkey Istanbul EUR 475,242,795
Associates and Joint Ventures:
Bohus Terminal Holding AB
4)
65.00 Sweden Gothenburg SEK 50,000
Gothenburg Ro/Ro Terminal AB 65.00 Sweden Gothenburg SEK 5,000,000
DeaL Energy A/S
2)
50.00 Denmark Hellerup DKK 500,000
Euro Asia cold Chain Logistic. 52,04 China Shanghai CNY 22,100,000
15 Dormant companies
Company
Owner ship
share 2021
1
Country City Currency Share Capital
5.11 Company overview (continued)
129
DFDS Annual Report 2021
Consolidated Financial Statements
Parent
Financial
Statements
131 Income statement
132 Statement of comprehensive income
133 Balance sheet
134 Statement of changes in equity
136 Statement of cash flows
137 Notes
130
DFDS Annual Report 2021
Parent Financial Statements
Income statement 1 January – 31 December
DKK million Note 2021 2020
Revenue 1 8,250 7,385
Costs:
Ferry and other ship operation and maintenance 2 -2,029 -1,594
Freight handling -2,313 -2,104
Transport solutions -321 -304
Employee costs 3 -1,162 -1,027
Cost of sales and administration 4 -654 -598
Operating profit before depreciation (EBITDA) and special items 1,771 1,758
Profit on disposal of non-current assets, net 1 2
Amortisation, depreciation and impairment losses on intangible and
tangible assets and Right-of-use assets 5 -1,695 -1,655
Operating profit (EBIT) before special items 77 104
Special items, net 6 -55 -172
Operating profit (EBIT) 22 -68
Financial income 7 259 421
Financial costs 7 -175 -218
Profit before tax 106 135
Tax on profit 8 24 5
Profit for the year 131 140
Proposed profit appropriation
Proposed dividend, DKK 4.0 per share
1)
(2020: DKK 0.0 per share) 235 0
Retained earnings -104 140
Profit for the year 131 140
1)
The Board of Directors propos-
es to the 2022 Annual General
Meeting that a dividend of
DKK 4.0 per share is paid in
2022. It is the intention of the
Board of Directors according
to the authority delegated to
it to distribute an extraordi-
nary dividend of DKK 4.00 per
share by August 2022.
131
DFDS Annual Report 2021
Parent Financial Statements
Statement of comprehensive income 1 January – 31 December
DKK million Note 2021 2020
Profit for the year 131 140
Other comprehensive income
Items that are or may subsequently be reclassified to the Income statement:
Value adjustment of hedging instruments for the year 43 -103
Value adjustment transferred to operating costs -56 6
Value adjustment transferred to financial costs -73 17
Value adjustment transferred to non-current tangible assets -64 -38
Foreign exchange adjustments, goodwill 0 1
Foreign exchange adjustments, foreign branches 2 -6
Tax on items that are or may be reclassified to the Income statement 8 -1 -2
Items that are or may subsequently be reclassified to the Income statement -150 -127
Total other comprehensive income after tax -150 -127
Total comprehensive income -19 13
132
DFDS Annual Report 2021
Parent Financial Statements
Balance sheet 31 December Assets
DKK million Note 2021 2020
Goodwill 116 116
Software 292 229
Development projects in progress 14 55
Non-current intangible assets 9 423 400
Land and buildings 1 1
Terminals 23 19
Ferries and other ships 4,734 4,445
Equipment, etc. 138 160
Assets under construction and prepayments 1,192 834
Non-current tangible assets 10 6,088 5,458
Right-of-use assets 11 1,209 1,404
Non-current Right-of-use assets 1,209 1,404
Investments in subsidiaries 12 8,387 6,756
Investments in associates, joint ventures and securities 10 14
Receivables 13 62 276
Prepaid costs 8 16
Derivative financial instruments 24 34 70
Deferred tax assets 16 3 0
Other non-current assets 8,504 7,131
Non-current assets 16,224 14,393
Inventories 14 162 104
Receivables 13 1,682 1,753
Prepaid costs 79 68
Derivative financial instruments 24 6 144
Cash 475 735
Current assets 2,405 2,806
Assets classified as held for sale 0 37
Total current assets 2,405 2,842
Assets 18,629 17,236
Balance sheet 31 December Equity and liabilities
DKK million Note 2021 2020
Share capital 1,173 1,173
Reserves 275 402
Retained earnings 7,673 7,808
Proposed dividend 235 0
Equity 9,355 9,382
Interest-bearing liabilities 20 3,041 2,898
Deferred tax 16 0 5
Pension and jubilee liabilities 18 8 7
Other provisions 19 109 34
Derivative financial instruments 24 36 149
Non-current liabilities 3,193 3,093
Interest-bearing liabilities 20 4,194 3,320
Trade payables 1,284 740
Other provisions 19 3 3
Corporation tax 4 0
Other payables 22 394 540
Derivative financial instruments 24 77 52
Prepayments from customers 126 105
Current liabilities 6,082 4,762
Liabilities 9,275 7,854
Equity and liabilities 18,629 17,236
133
DFDS Annual Report 2021
Parent Financial Statements
Statement of changes in equity 1 January – 31 December 2021
Reserves
DKK million Share capital
Translation
reserve
Hedging
reserve
Reserve for
development
costs
Treasury
shares
Retained
earnings
Proposed
dividend Total
Equity at 1 January 2021 1,173 -5 147 285 -25 7,808 0 9,382
Comprehensive income for the year
Profit for the year 131 131
Other comprehensive income
Items that are or may subsequently be reclassified to the Income Statement:
Value adjustment of hedging instruments for the year 43 43
Value adjustment transferred to operating costs -56 -56
Value adjustment transferred to financial costs -73 -73
Value adjustment transferred to non-current assets -64 -64
Tax on items that are or may be reclassified to the Income statement -1 -1
Foreign exchange adjustments, foreign branches 2 2
Items that are or may subsequently be reclassified to the Income statement 2 -151 0 0 -1 0 -150
Total other comprehensive income after tax 2 -151 0 0 -1 0 -150
Total comprehensive income 2 -151 0 0 130 0 -19
Transactions with owners
Proposed dividend at year-end -235 235 0
Share-based payments 13 13
Purchase of treasury shares -4 -71 -75
Sale of treasury shares 6 6
Cash from sale of treasury shares related to exercise of share options 4 44 48
Capitalised development costs, additions 22 -22 0
Total transactions with owners 2021 0 0 0 22 0 -265 235 -8
Equity at 31 December 2021 1,173 -3 -4 307 -25 7,673 235 9,355
The Company’s share capital, which is not divided into dif-
ferent classes of shares, is divided into 58,631,578 shares
of DKK 20 each. All shares rank equally. There are no
restrictions on voting rights. The shares are fully paid up.
The Board of Directors proposes to the 2022 Annual Gener-
al Meeting that a dividends of DKK 4.0 per share is paid in
2022. It is the intention of the Board of Directors according
to the authority delegated to it to distribute an extraordi-
nary dividend of DKK 4.00 per share by August 2022.
134
DFDS Annual Report 2021
Parent Financial Statements
1)
Due to the reduced opera-
tional and financial visability
caused by Covid-19 the
Annual General Meeting held
on 4 June 2020 decided not to
pay out the proposed dividend
of DKK 4.0 for the financial
year 2019.
Statement of changes in equity 1 January – 31 December 2020
Reserves
DKK million Share capital
Translation
reserve
Hedging
reserve
Reserve for
development
costs
Treasury
shares
Retained
earnings
Proposed
dividend Total
Equity at 1 January 2020 1,173 1 266 254 -28 7,440 235 9,339
Comprehensive income for the year
Profit for the year 140 140
Other comprehensive income
Items that are or may subsequently be reclassified to the Income Statement:
Value adjustment of hedging instruments for the year -103 -103
Value adjustment transferred to operating costs 6 6
Value adjustment transferred to financial costs 17 17
Value adjustment transferred to non-current assets -38 -38
Tax on items that are or may be reclassified to the Income statement -2 -2
Foreign exchange adjustments, goodwill 1 1
Foreign exchange adjustments, foreign branches -6 -6
Items that are or may subsequently be reclassified to the Income statement 0 -6 -119 0 0 -1 0 -127
Total other comprehensive income after tax 0 -6 -119 0 0 -1 0 -127
Total comprehensive income 0 -6 -119 0 0 -1 0 -127
Transactions with owners
Cancellation of proposed dividend at year-end 2019
1)
235 -235 0
Share-based payments 8 8
Sale of treasury shares 1 19 20
Cash from sale of treasury shares related to exercise of share options 2 -1 1
Capitalised development costs, additions 32 -32 0
Total transactions with owners 2020 0 0 0 32 3 229 -235 29
Equity at 31 December 2020 1,173 -5 147 285 -25 7,808 0 9,382
The Company’s share capital, which is not divided into dif-
ferent classes of shares, is divided into 58,631,578 shares
of DKK 20 each. All shares rank equally. There are no
restrictions on voting rights. The shares are fully paid up.
135
DFDS Annual Report 2021
Parent Financial Statements
Statement of cash flows 1 January – 31 December
DKK million Note 2021 2020
Operating profit before depreciation (EBITDA) and special items 1,771 1,758
Cash flow effect from special items related to operating activities -31 -44
Adjustments for non-cash operating items, etc. 25 27 23
Change in working capital 26 313 -132
Payment of pension liabilities and other provisions -1 -1
Cash flow from operating activities, gross 2,079 1,603
Interest received, etc. 117 39
Interest paid, etc. -75 -72
Taxes paid 20 0
Cash flow from operating activities, net 2,141 1,570
Investments in ferries and other ships including dockings, rebuildings
and ferries under construction (incl. settlement of forward exchange
contracts related thereto) -952 -1,178
Sale of ferries including payments received from sale of ferries last year 0 678
Investments in other non-current tangible assets -41 -37
Sale of other non-current tangible assets 1 2
Investments in non-current intangible assets -62 -67
Other investing cash flows 153 -146
Sale of shares in associated company 20 0
Group internal acquisition of enterprises 12 -41 0
Capital contributions to subsidiaries, etc. 12 -1,701 -846
Dividends received from subsidiaries 148 243
Cash flow to/from investing activities, net -2,476 -1,350
Cash flow before financing activities, net -335 219
DKK million Note 2021 2020
Proceed from bank loans and loans secured by mortgage
in ferries and other ships 21 1,758 1,016
Repayment and instalments on bank loans and loans secured by
mortgage in ferries and other ships 21 -569 -482
Payment of lease liabilities 21 -1,227 -1,131
Change in Group internal financing, net 21 134 496
Proceeds from sale of treasury shares 6 20
Acquisition of treasury shares -75 0
Cash received from exercise of share options 48 1
Other financing cash flows 0 -60
Dividends paid 0 0
Cash flow to/from financing activities, net 75 -140
Net increase/(decrease) in cash and cash equivalents -260 79
Cash and cash equivalents at 1 January 735 656
Cash and cash equivalents at 31 December 475 735
At 31 December 2021 no cash (2020: no cash) was
deposited on restricted bank accounts.
The statement of cash flows cannot directly be derived
from the Income statement and the Balance sheet.
136
DFDS Annual Report 2021
Parent Financial Statements
Note 1 Revenue ............................................................................... 138
Note 2 Costs .................................................................................. 139
Note 3 Employee costs ......................................................................... 139
Note 4 Fees to Auditors appointed at the Annual General Meeting ................................. 139
Note 5 Amortisation and depreciation for the year ............................................... 139
Note 6 Special items, net ....................................................................... 139
Note 7 Financial income and costs .............................................................. 140
Note 8 Tax .................................................................................... 140
Note 9 Non-current intangible assets ............................................................ 141
Note 10 Non-current tangible assets ............................................................. 141
Note 11 Leases ................................................................................. 142
Note 12 Investments in subsidiaries .............................................................. 144
Note 13 Receivables ............................................................................ 144
Note 14 Inventories ............................................................................. 145
Note 15 Treasury shares (number of shares). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Note 16 Deferred tax ............................................................................ 145
Note 17 Share based payments .................................................................. 146
Note 18 Pension and jubilee liabilities ............................................................ 146
Note 19 Other provisions ........................................................................ 146
Note 20 Interest-bearing liabilities ............................................................... 147
Note 21 Changes in liabilities arising from financing activities ...................................... 147
Note 22 Other payables ......................................................................... 148
Note 23 Information on financial instruments ..................................................... 148
Note 24 Financial and operational risks ........................................................... 149
Note 25 Non-cash operating items ............................................................... 149
Note 26 Change in working capital ............................................................... 150
Note 27 Acquisition and sale of enterprises, activities and non-controlling interests ..................150
Note 28 Guarantees, collateral and contingent liabilities ........................................... 151
Note 29 Contractual commitments ............................................................... 151
Note 30 Related party transactions .............................................................. 151
Note 31 Impairment testing ...................................................................... 152
Note 32 Covid-19 impact ........................................................................152
Note 33 Events after the balance sheet date ...................................................... 152
Note 34 Accounting Policies ..................................................................... 153
Notes
137
DFDS Annual Report 2021
Parent Financial Statements
Note 1 Revenue
2021
DKK million
Ferry
Division
Logistics
Division
Non-
allocated Total
Geographical markets
North Sea 4,351 - 0 4,351
Baltic Sea 1,370 - 0 1,370
English Channel 1,911 - 0 1,911
Continent - 319 0 319
Nordic - 254 0 254
UK/Ireland - 17 0 17
Other 0 0 28 28
Total 7,632 590 28 8,250
Product and services
Seafreight and shipping logistics solutions 5,924 0 0 5,924
Transport solutions 26 454 0 480
Passenger seafare and on board sales 936 0 -1 935
Terminal services 86 0 0 86
Charters including related income 431 0 0 431
Agency and other revenue 230 136 28 394
Total 7,632 590 28 8,250
2020
DKK million
Ferry
Division
Logistics
Division
Non-
allocated Total
Geographical markets
North Sea 3,815 - 0 3,815
Baltic Sea 1,246 - 0 1,246
English Channel 1,762 - 0 1,762
Continent - 290 0 290
Nordic - 232 0 232
Other 0 0 41 41
Total 6,823 521 41 7,385
Product and services
Seafreight and shipping logistics solutions 5,307 0 0 5,306
Transport solutions 15 422 0 437
Passenger seafare and on board sales 925 0 0 925
Terminal services 93 0 0 94
Charters including related income 335 0 0 335
Agency and other revenue 148 100 41 289
Total 6,823 521 41 7,385
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 484m
(2020: DKK 379m). On board sales DKK 445m of total rev-
enue (2020: DKK 311m) is recognised at “a point in time”.
138
DFDS Annual Report 2021
Parent Financial Statements
Note 6 Special items, net
DKK million 2021 2020
Acquisition and integration costs relating to HSF Logistics Group
-29 0
Impairment of a passenger ferry and a terminal in the business unit Passenger 0 -100
Restructuring costs etc. -74 -39
Reversal of impairment of a freight ferry made in connection with reclassification to asset
held for sale (2020: Impairment of a freight ferry made in connection with reclassification
to assets held for sale) 33 -33
Accounting gain related to disposal of an associated company 16 0
Special items, net -55 -172
If special items had been included in the operating profit before special items,
they would have been recognised and have effect as follows:
Operating costs -104 0
Employee costs 0 -39
Operating profit before depreciation (EBITDA) and special items -104 -39
Profit on disposal of non-current assets and associates, net 16 0
Amortisation, depreciation, and impairment losses/reversal on intangible and
tangible assets 33 -133
Operating profit (EBIT) before special items -55 -172
Note 3 Employee costs
DKK million 2021 2020
Wages, salaries and remuneration 1,029 960
Hereof capitalised employee costs -33 -46
Defined contribution pension plans 72 66
Other social security costs 55 48
Share based payments, reference is made to note 17 17 6
Other employee costs 71 62
Government grants (Covid-19) -49 -69
Total employee costs 1,162 1,027
Full time equivalents (FTE) 2,377 2,476
Reference is made to note 5.1 of the Consolidated Financial
Statements for a description of the Parent Company’s remu-
neration, etc. to the Executive Board and remuneration to
the Board of Directors as these are the same for the Parent
Company and the Group.
Note 4 Fees to auditors appointed at the Annual General Meeting
DKK million 2021 2020
Audit fees 2 1
Other assurance engagements 0 0
Tax and VAT advice 0 0
Non-audit services 0 0
Total fees 2 2
In relation to fees for services other than statutory au-
dit of the Financial Statements provided by Pricewater-
housecoopers Statsautoriseret Revisionspartnerselskab,
Denmark reference is made to the Consolidated Financial
Statements note 5.2.
Note 5 Amortisation and depreciation for the year
DKK million 2021 2020
Software 39 35
Terminals 3 3
Ferries and other ships 401 455
Equipment etc. 36 32
Right-of-use assets 1,215 1,129
Total amortisation and depreciation for the year 1,695 1,655
Note 2 Costs
DKK million 2021 2020
Ferry and other ship cost including charters related cost 695 724
Bunker 1,335 870
Total ferry and other ship operation and maintenance 2,029 1,594
139
DFDS Annual Report 2021
Parent Financial Statements
Note 7 Financial income and costs
DKK million 2021 2020
Financial income
Interest income from banks, etc. 1 4
Interest income from subsidiaries 15 26
Foreign exchange gains, net
1)
6 3
Reversal of impairment of investments in subsidiaries
2)
0 145
Dividends received from subsidiaries 148 243
Other dividends 0 0
Ineffectiveness on derivative contracts 89 0
Other financial income 0 0
Total financial income 259 421
Financial costs
Interest expense to banks, credit institutions, corporate bonds, etc. -52 -43
Interest expense on lease liabilities
4)
-13 -20
Interest expense to subsidiaries 0 0
Impairment of investments in subsidiaries
2)
-110 -156
Other financial costs -8 -9
Transfer to assets under construction
3)
8 10
Total financial costs -175 -218
Financial income and costs, net 85 203
DFDS A/S makes forward exchange transactions, etc., on
behalf of all subsidiaries, and therefore foreign exchange
gains and losses in DFDS A/S also consist of the Group’s
gross transactions. Transactions entered into, on behalf of
subsidiaries, are transferred to the subsidiaries on back-to-
back terms.
Except for interest income (net) relating to interest swap
agreements of DKK 4m (2020: DKK 4m) interest income
and interest expenses relate to financial instruments
measured at amortised cost. Ineffectiveness on derivative
contracts of DKK 89m relates to a forward exchange con-
tract related to a lease. The lease agreement has been en-
tered into by a subsidiary of the Parent Company and the
forward exchange contract is legally placed in the Parent
Company.
Other financial costs contain bank charges, fees, early re-
payment fees, commitment fees and creditline fee.
Note 8 Tax
DKK million 2021 2020
Current joint tax contributions 0 -4
Movement in deferred tax for the year 5 -1
Adjustment to corporation tax in respect of prior years 15 8
Adjustment to deferred tax in respect of prior years 3 0
Tax for the year 23 3
Tax for the year is recognised as follows:
Tax in the Income statement 24 5
Tax in Other comprehensive income -1 -2
Tax for the year 23 3
Tax in the Income statement can be specified as follows:
Profit before tax 106 135
Adjustment regarding income subject to tonnage tax -94 78
Profit before tax subject to corporate income tax 12 213
22% tax of profit before tax -3 -47
Tax effect of:
Non-taxable/-deductible items
5)
12 46
Adjustments of tax in respect of prior years 18 8
Corporate income tax 27 8
Tonnage tax -3 -3
Tax in the Income statement 24 5
Effective tax rate (%) -22.9 3.9
Effective tax rate before adjustment of prior years’ tax (%) -5.7 2.3
The ferry activities are included in the Danish tonnage tax
scheme where the taxable income related to transportation
of passengers and freight is calculated based on the ton-
nage deployed during the year. Taxable income related to
other activities is taxed according to the normal corporate
income tax rules at the standard corporate tax rate of 22%.
DFDS A/S and its Danish subsidiaries are subject to compul-
sory joint taxation with Lauritzen Fonden Holding ApS and
its Danish controlled enterprises. Lauritzen Fonden Hold-
ing ApS is the administration company in the joint taxation
and settles all payments of corporation tax due by the
joint taxed enterprises with the tax authorities. In accord-
ance with the Danish rules on joint taxation, DFDS A/S and
its Danish subsidiaries are liable for their own corporate
tax due and are only subsidiary and pro rata liable for the
corporation tax liabilities towards the Danish tax author-
ities for all other enterprises that are part of the Danish
joint taxation.
1)
Foreign exchange gains in
2021 amounts to DKK 137m
(2020: DKK 191m) and foreign
exchange losses amounts to
DKK 132m (2020: DKK 188m).
2)
Reference is made to note 31.
3)
Interest capitalised on
two new buildings under
construction (2020: three
new buildings). The interest is
calculated by using a general
interest rate of 1.30% p.a.
(2020: 1.30% p.a.).
4)
Reference is made to note 11.
5)
2021: Primarily relates to
tax exempt dividends from
subsidiaries and write-down
of investment in subsidiaries.
(2020: Primarily relates to
tax exempt dividends from
subsidiaries and write-down
of investment in subsidiaries)
140
DFDS Annual Report 2021
Parent Financial Statements
Note 9 Non-current intangible assets
DKK million
Goodwill Software
Development pro-
jects in progress Total
Cost at 1 January 2021 116 539 55 711
Foreign exchange adjustments 0 0 0 0
Additions 0 0 62
1)
62
Disposals 0 -1 0 -1
Transfers 0 102 -102 0
Cost at 31 December 2021 116 640 14 771
Amortisation and impairment losses
at 1 January 2021 0 310 0 310
Amortisation charge 0 39 0 39
Disposals 0 -1 0 -1
Amortisation and impairment losses
at 31 December 2021 0 348 0 348
Carrying amount at
31 December 2021 116 292 14 423
DKK million
Goodwill Software
Development pro-
jects in progress Total
Cost at 1 January 2020 116 503 25 643
Foreign exchange adjustments 1 0 0 1
Additions 0 0 67 67
Disposals 0 0 0 0
Transfers 0 36 -36 0
Cost at 31 December 2020 116 539 55 711
Amortisation and impairment losses
at 1 January 2020 0 275 0 275
Amortisation charge 0 35 0 35
Disposals 0 0 0 0
Amortisation and impairment losses
at 31 December 2020 0 310 0 310
Carrying amount at
31 December 2020 116 229 55 400
Note 9 Non-current intangible assets (continued)
The Parent Company’s carrying amount of Goodwill DKK
116m (2020: DKK 116m) relates to the acquisition of two
freight- and passenger routes in 2016 and 2011, respec-
tively, and one freight route in 2005.
The carrying amount of completed software and develop-
ment projects in progress primarily relates to a Passenger
booking system, a new Transport Management System to
the Logistics Division, a new onboard sales system, a new
ERP system and digital initiatives in general.
For further information regarding the impairment tests ref-
erence is made to note 3.1.5.
1)
Related to the implementa-
tion of the new ERP system
(DKK 34m), which went live in
2021, Transport Management
System (DKK 12m) and other
operational systems (DKK
16m).
2)
Primarily relates to a
new-building DKK 388m,
which was deployed in
February 2021. One freight
and passenger ferries
(ro-pax) are on order
for delivery in 2022.
3)
Relates to a reversal of an
impairment of DKK 33m that
was made in 2020 on Ark Fu-
tura. The reversal was made
in connection with classifying
the ferry back from Assets
classified as held for sale.
4)
Ark Futura has ceased to be
classified as asset held for
sale during 2021 and conse-
quently reclassified to ferries
and other ships.
Note 10 Non-current tangible assets
DKK million
Land and
buildings Terminals
Ferries and
other ships
Equipment
etc.
Assets under
construction
and pre-
payments Total
Cost at 1 January 2021 11 64 9,171 443 834 10,523
Foreign exchange adjustments 0 0 -1 0 0 -1
Additions 0 0 0 0 1,001 1,001
Disposals 0 0 -189
2)
-18 0 -207
Transfers 0 7 621 15 -643 1
Transferred from assets
classified as held for sale 0 0 118
4)
0 0 118
Cost at 31 December 2021 11 72 9,720 440 1,192 11,435
Depreciation and impairment
losses at 1 January 2021 10 46 4,726 283 0 5,065
Foreign exchange adjustments 0 0 0 0 0 0
Depreciation charge 0 3 401 36 0 440
Impairment charge 0 0 -33
3)
0 0 -33
Disposals 0 0 -189
4)
-17 0 -206
Transferred from assets
classified as held for sale 0 0 81 0 0 81
Depreciation and impairment
losses at 31 December 2021 10 49 4,986 302 0 5,347
Carrying amount at
31 December 2021 1 23 4,734 138 1,192 6,088
141
DFDS Annual Report 2021
Parent Financial Statements
Note 10 Non-current tangible assets (continued)
DKK million
Land and
buildings Terminals
Ferries and
other ships
Equipment
etc.
Assets under
construction
and pre-
payments Total
Cost at 1 January 2020 11 65 8,280 392 813 9,560
Foreign exchange adjustments 0 0 -6 0 0 -6
Additions 0 0 82
2)
12 1,131
1)
1,225
Disposals 0 0 -124 -13 0 -137
Transfers 0 0 1,058 52 -1,110 0
Transferred to assets classified as
held for sale 0 0 -119
3)
0 0 -119
Cost at 31 December 2020 11 64 9,171 443 834 10,523
Depreciation and impairment
losses at 1 January 2020 10 43 4,373 262 0 4,688
Foreign exchange adjustments 0 0 -2 0 0 -2
Depreciation charge 0 3 455 32 0 491
Impairment charge 0 0 105
4)
0 0 105
Disposals 0 0 -124 -11 0 -135
Transferred to assets classified as
held for sale 0 0 -81
3)
0 0 -81
Depreciation and impairment losses
at 31 December 2020 10 46 4,726 283 0 5,065
Carrying amount at
31 December 2020 1 19 4,445 160 834 5,458
Note 11 Leases
The Parent Company has lease contracts for various items
of Land & buildings, Terminals, Ferries, Equipment etc. in
its operations. The Parent Company oblitations under the
leases are secured by the lessors title to the leased assets.
There are several lease contracts that include extension
and termination options. Set out below are the carrying
amounts of Right-of-use assets recognised and the move-
ments during the period.
DKK million
Land and
buildings Terminals
Ferries and
other ships
Equipment
etc. Total
Cost at 1 January 2021 62 57 3,228
5)
63 3,409
Additions/Remeasurement 0 0 1,122 0 1,122
Disposals 0 0 -765 -14 -779
Foreign exchange adjustments 0 0 0 0 0
Cost at 31 December 2021 62 57 3,585 49 3,752
Depreciation and impairment losses
at 1 January 2021 38 48 1,897 22 2,006
Depreciation charge 22 2 1,181 11 1,215
Disposals 0 0 -672 -5 -677
Foreign exchange adjustments 0 0 0 0 0
Depreciations and impairment losses
31 December 2021 60 50 2,405 28 2,543
Carrying amount at 31 December 2021 2 6 1,180 21 1,209
1)
Primarily related to the large
new-buildings program. Two
freight ferries were deployed
in February and October 2020.
The last one is scheduled
for delivery in Q1 2021. One
freight and one passenger
ferry (ro-pax) are on order for
delivery in 2021-2022.
2)
Primarily related to the Group
internal purchase of one
freight ferry (ro-ro).
3)
The transfer relates to the
ferry Ark Futura, which is
classified as held for sale.
4)
An impairment of DKK 33m
on Ark Futura and DKK 72m
on Crown Seaways have been
recognised in special items.
5)
Primarily related to the Group
internal charter contracts
142
DFDS Annual Report 2021
Parent Financial Statements
Note 11 Leases (continued)
DKK million
Land and
buildings Terminals
Ferries and
other ships
Equipment
etc. Total
Cost at 1 January 2020 58 53 2,813 68 2,991
Additions/Remeasurement 5 4 793 0 801
Disposals 0 0 -375 -5 -380
Foreign exchange adjustments 0 0 -3 0 -3
Cost at 31 December 2020 62 57 3,228 63 3,409
Depreciation and impairment losses
at 1 January 2020 19 9 1,111 14 1,152
Depreciation charge 20 10 1,086 13 1,129
Impairment charges 0 28
1)
0 0 28
Disposals 0 0 -297 -5 -302
Foreign exchange adjustments 0 0 -2 0 -2
Depreciations and impairment losses
31 December 2020 38 48 1,897 22 2,006
Carrying amount at 31 December 2020 24 9 1,331 40 1,404
Set out below are the carrying amounts of lease liabilities (included under interest-bearing liabilities) and the movements
during the period.
DKK million 2021 2020
As at 1 January 1,450 1,859
Additions/Remeasurement 1,122 802
Payments/Installments -1,227 -1,131
Disposals -103 -80
Foreign exchange adjustments 0 -1
Total Lease liailities at 31 December 1,242 1,450
Lease liabilities expiring within the following periods from the balance sheet date:
DKK million 2021 2020
Within 1 year 749 1,156
1-3 years 500 289
3-5 years 3 14
After 5 years 4 9
Total Lease liability, non-discounted 1,256 1,467
Lease liabilities are recognised in the balance sheet as follows:
DKK million 2021 2020
Non-current liabilities 503 307
Current liabilities 739 1,143
Total Lease liabilities 1,242 1,450
The following amounts are recognised in the Income statement:
DKK million 2021 2020
Expense relating to short-tem leases (included in cost and cost of sales
and administration) 0 0
Expense relating to low-value assets (included in cost of sales and administration) -2 -1
Variable lease payments 0 0
Interest expense on lease liabilities -13 -20
Depreciation, ships -1,181 -1,086
Depreciation, other non-current assets -35 -43
Total amount recognised in the Income statement -1,231 -1,150
The following amounts from leases are recognised in the statement of cash flows:
DKK million 2021 2020
Net cash flows from operating activities, gross -2 -1
Interest paid, etc -13 -20
Net cash flows from operating activities, net -15 -21
Net cash flows from financing activities -1,227 -1,131
Total cash outflow from Leases -1,242 -1,152
There are no material impact on other comprehensive
income. At 31 December 2021 the Parent Company was
committed to low-value leases where the total commit-
ment was DKK 2m (2020: DKK 1m). The Parent Company
has no lease contracts including fixed- and variable pay-
ments.
1)
An impairment of DKK 28m
has been recognized in special
items, on a terminal in the
business unit Passenger.
143
DFDS Annual Report 2021
Parent Financial Statements
Note 11 Leases (continued)
The Parent Company as a lessor
The Parent Company has entered into several operating
leases of its ferries. Future minimum receivable under
non-cancellable operating leases as at 31 December are
as follows:
Operating Lease commitments (lessor)
DKK million 2021 2020
Minimum Lease payments (income)
Ferries
Within 1 year 425 309
1-3 years 625 144
3-5 years 442 145
After 5 years 0 14
Total ferries and equipment 1,492 613
The specified minimum payments are not discounted. Op-
erating lease- and rental Income recognised in the Income
statement amount to DKK 431m in 2021 (2020: DKK
335m). The contracts are entered into on usual conditions.
1)
2021: Additions relates to
purchase of a DFDS Group
entity (DKK 41m), establish-
ment of company for purchase
of HSF Group (DKK 1,693m),
capital injection in three
subsidiaries (DKK 7m) and
acquisition of minority shares
in AB DFDS Seaways (less
than DKK 1m).
2)
Reference is made to note 31.
3)
The carrying amount of Inter-
est bearing receivables from
subsidiaries relates to current
credit facilities that are made
available to subsidiaries.
Receivables from subsidiaries
are impaired by DKK 0m at
31 December 2021 (2020:
DKK 0m).
Note 12 Investments in subsidiaries
DKK million 2021 2020
Cost at 1 January 7,091 6,243
Additions
1)
1,741 848
Cost at 31 December 8,832 7,091
Accumulated impairment losses at 1 January -335 -324
Impairment losses
2)
-110 -156
Reversal of prior year impairment losses 0 145
Accumulated impairment losses at 31 December -445 -335
Carrying amount at 31 December 8,387 6,756
Reference is made to the Company Overview in the Con-
solidated Financial Statements note 5.10. The carrying
amount of investments in subsidiaries is tested for impair-
ment at least at year-end.
Note 13 Receivables
DKK million 2021 2020
Other non-current receivables 15 15
Interest-bearing receivables from subsidiaries 47 261
Total non-current receivables 62 276
Trade receivables 619 600
Interest-bearing receivables from subsidiaries
3)
387 493
Non-interest-bearing receivables from subsidiaries 325 206
Receivables from associates and joint ventures 23 27
Other receivables and current assets 328 427
Total current receivables 1,682 1,753
The carrying amount of receivables is in all material re-
spects equal to the fair value. None of the trade receiv-
ables with collateral are overdue at 31 December 2021
(2020: none). The collateral consists of bank guarantees
with a fair value of DKK 0m (2020: DKK 0m).
DKK million 2021 2020
Trade receivables that are past due, but not impaired:
Days past due:
Up to 30 days 72 66
31-60 days 5 4
61-90 days 0 1
91-120 days 2 1
More than 120 days 2 2
Past due, but not impaired 81 74
Movements in write-downs, which are included in the trade receivables:
Write-downs at 1 January 16 13
Write-downs 4 6
Realised losses 0 -1
Reversed write-downs -4 -3
Write-downs at 31 December 15 16
144
DFDS Annual Report 2021
Parent Financial Statements
Note 16 Deferred tax
DKK million
2021
Land and buildings, terminals
and other equipment Provisions
Tax loss
carried forward Total
Deferred tax at 1 January 5 0 0 5
Recognised in the Income statement 1 0 -6 -5
Adjustment regarding prior years
recognised in the Income statement 0 0 -3 -3
Deferred tax at 31 December, net 6 0 -9 -3
2020
Deferred tax at 1 January 4 0 0 4
Recognised in the Income statement 1 0 0 1
Deferred tax at 31 December, net 5 0 0 5
DKK million 2021 2020
Deferred tax is recognised in the balance sheet as follows:
Deferred tax assets 3 0
Deferred tax liabilities 0 5
Deferred tax at 31 December, net -3 5
By joining the tonnage taxation scheme, DFDS A/S is sub-
ject to the requirements of the scheme until end of 2031,
During the period covered by the tonnage tax scheme
ferries and other ships, and other assets and liabilities
related to the tonnage taxed activities owned by DFDS
A/S is deemed maximum depreciated for tax purposes.
Hence, if DFDS A/S withdraws from the tonnage taxation
scheme, deferred tax liability in the amount of maximum
DKK 516m (2020: DKK 455m) may be recognised. DFDS
A/S is not expected to withdraw from the scheme and con-
sequently no deferred tax relating to assets and liabilities
subject to tonnage taxation has been recognised.
Note 13 Receivables (continued)
DKK million 2021 2020
Age distribution of write-downs:
Days past due:
Up to 30 days 6 1
31-60 days 0 0
61-90 days 0 0
91-120 days 0 0
More than 120 days 9 14
Write-downs at 31 December 15 16
Write-downs and realised losses are recognised in Ferry
and other ship operation and maintenance costs in the In-
come statement.
Reference is made to note 4.1 in the Consolidated Finan-
cial Statements for a description of Credit risks.
Note 14 Inventories
DKK million 2021 2020
Bunker 102 55
Goods for sale 78 59
Write-down of inventories end of year -18 -10
Total inventories 162 104
Write-down of inventories expensed during the year
amounts to DKK 8m (2020: DKK 16m).
Note 15 Treasury shares
Information regarding the Parent Company’s and the Group’s
holding of treasury shares is identical. Reference is made to
the Consolidated Financial Statements note 4.7.
145
DFDS Annual Report 2021
Parent Financial Statements
Note 19 Other provisions
DKK million 2021 2020
Other provisions at 1 January 37 42
Provisions made during the year 104 46
Used during the year -30 -45
Reversal of unused provisions 0 -7
Other provisions at 31 December 112 37
Other provisions are expected to be payable in:
0-1 year 3 3
1-5 years 103 28
After 5 years 6 5
Other provisions at 31 December 112 37
Of the Parent Company’s provision of DKK 112m (2020:
DKK 37m), DKK 28m (2020: DKK 28m) is estimated net
present value of earn-out agreements regarding acquisi-
tions; DKK 74m is estimated restructuring provision (2020:
DKK 3m) and DKK 9m (2020: DKK 6m) is other provisions.
Note 18 Pension and jubilee liabilities
The Parent Company contributes to defined contribution
plans as well as defined benefit plans. The majority of the
pension plans are funded through contributions to an in-
dependent insurance company responsible for the pension
obligation towards the employees (defined contribution
plans). In these plans the Parent Company has no legal or
constructive obligation to pay further contributions irre-
spective of the financial situation of the insurance compa-
ny. Pension costs from such plans are charged to the income
statement when incurred. The Parent Company has minor
defined benefit plans. The defined benefit plans are pen-
sion plans that yearly pay out a certain percentage of the
final salary the employee has when the employee retires.
The pensions are paid out as from retirement and during the
remaining life of the employee. The percentage of the salary
is dependent of the seniority of the employees. The defined
benefit plans typically include a spouse pension.
Based on actuarial calculations the defined benefit plans
show the following liabilities:
DKK million 2021 2020
Present value of unfunded defined benefit obligations 0 0
Recognised liabilities for defined benefit obligations 0 0
Provision for jubilee liabilities 8 7
Total actuarial liabilities 8 7
Note 17 Share based payment
Information regarding long-term incentives for the Parent
Company and the Group is identical. Reference is made to
the Consolidated Financial Statements note 5.3.
Employee recognition
In recognition of the contribution made by DFDS’ employ-
ees in a year with exceptional challenges, the Board of
Directors has 22 December 2020 awarded up to 50 shares
free of charge to each employee. The shares will vest over
a three-year period from January 2021 to December 2023
on a straight-line basis. Only employees working through
the full vesting period will be entitled to the shares. If an
employee retires or leaves his job because of disability
during the period until December 2023 he/she is entitled
to the full number of shares when he/she leaves. The
shares are in most countries awarded as a phantom share
programme whereby the entitled employees will receive
a cash payment in December 2023 equal to the value of
50 DFDS shares.
In total 2,362 employees are at award date entitled to
the shares. Based on historical attrition rates for each
country the total expected to be transferred to the
employees is 81,382 of which 16,262 are phantom shares
(cash) and 65,120 as shares.
No shares have been transferred during 2021. Vesting of
shares for 2021 is an expense of DKK 8m.
Year of grant
Exer-
cise
price
Market
price at
grant date
Expected
volatility
Risk-free
interest
rate
Expected
dividend per
share
(DKK) at
grant date
Expected
term
Fair value
per share
at time of
granting
2020 Special Reward 0.00 267.00 34.87% -0.55% 6.33 3 years 247.87
Jubilee shares
Information regarding jubilee shares for the Parent Com-
pany and the Group is identical. Reference is made to the
Consolidated Financial Statements note 5.3.
In total 2,469 employees are at award date entitled to the
shares. Based on historical attrition rates for each coun-
try the total expected number of shares to be transferred
to the employees is 53,300 with a total fair value of DKK
16m, which is expensed under Special items over the vest-
ing period.
The last 40 Jubilee shares have been transferred during
2021 (2020: 43,968). The average weighted market price
per share exercised in 2021 is DKK 324.80 (2020: DKK
243.03). Vesting of Jubilee shares is expensed in the In-
come statement for 2021 with DKK 0m (2020: DKK 0m).
146
DFDS Annual Report 2021
Parent Financial Statements
Note 20 Interest-bearing liabilities
DKK million 2021 2020
Issued corporate bonds
2
298 1,162
Bank loans and mortgage on ferries and other ships 2,240 1,429
Lease liability 503 307
Total interest-bearing non-current liabilities 3,041 2,898
Issued corporate bonds
2
932 0
Bank loans and mortgage on ferries and other ships 578 205
Lease liability 739 1,143
Payables to subsidiaries
1
1,946 1,972
Total interest-bearing current liabilities 4,194 3,320
Total interest-bearing liabilities 7,235 6,217
The fair value of the interest-bearing liabilities amounts to
DKK 7,193m (2020: DKK 6,198m). The fair value measure-
ment is categorised within level 3 in the fair value hier-
archy except for the part that relates to issued corporate
bonds of nominal NOK 1,250m for which the fair value
measurement is categorised within level 1.
The fair value of the financial liabilities is determined as
the present value of expected future repayments and in-
terest rates. The Group’s actual borrowing rate for equiv-
alent terms is used as the discount rate. The fair value of
the issued corporate bonds nominal NOK 1,250m has been
calculated based on the quoted bond price in May 2020
which is the latest quoted price (2020: quoted bond price
in May 2020). The fair value of the issued corporate bonds
nominal NOK400m has been calculated based on the quot-
ed bond price in June 2019 which is the latest quoted price
(2020: quoted bond price in June 2019).
DKK 1,084m of the Interest-bearing liabilities in the Par-
ent Company fall due after five years (2020: DKK 758m).
No unusual conditions in connection with borrowing are
made. The loan agreements can be settled at fair value
plus a small surcharge, whereas settlement of the corpo-
rate bonds requires a repurchase of the bonds. Reference is
made to note 24 for financial risks, etc.
Allocation of currency, principal nominal amount
DKK million 2021 2020
DKK 1,699 1,450
EUR 3,404 2,802
SEK 551 395
NOK 1,239 1,205
GBP 335 364
USD 7 1
Total interest bearing liabilities 7,235 6,217
Note 21 Changes in liabilities arising from financing activities
The table below discloses the cash as well as non-cash
changes in Interest-bearing liabilities, Derivative financial
instruments related to issued corporate bonds and Pay-
ables to subsidiaries, non interest-bearing. The changes
arising from cash flows form part of the cash flows from
financing activities in the Statement of cash flows.
DKK million Non-cash changes
1 Jan.
2021
Cash
flows
Foreign
exchange
movements
New/
diposed/
remea-
sured
leases
Fair value
changes
Other
changes
31 Dec.
2021
Changes in 2021
Interest-bearing liabilities:
Bank loans and mortgage on
ferries and other ships 1,633 1,189 0 0 0 -5 2,818
Issued corporate bonds 1,162 0 67 0 0 1 1,230
Lease liabilities 1,450 -1,227 0 1,019 0 0 1,242
Payables to subsidiaries, inter-
est-bearing 1,972 -26
3)
0 0 0 0 1,946
Other liabilities 0 0 0 0 0 0 0
6,217 -65 67 1,019 0 -4 7,235
Derivati ve financia l instru ments:
Derivatives related to issued
corporate bonds 140 0 0 0 -63 0 77
Other:
Payables to subsidiaries, non
interest-bearing 167 -41
3)
0 0 0 0 126
Total liabilities from financing
activities 6,525 -106 67 1,019 -63 -4 7,438
Receivables from
subsidiaries 202
3)
Total cash flows 96
1)
The carrying amount of
Interest-bearing payables to
subsidiaries relates to deposit
facilities that are made availa-
ble to subsidiaries.
2)
The Parent Company has
issued two 5 year corporate
bond loans; one in 2019 and
one in 2017 respectively.
Reference is made to the
Consolidated Statements
note 4.5.
3)
Cash flows related to Pay-
ables to/Receivables from
subsidiaries are presented net
in the Statement of cash flows
under Financing activities
in the line “Change in Group
internal financing, net” by DKK
134m.
147
DFDS Annual Report 2021
Parent Financial Statements
Note 21 Changes in liabilities arising from financing activities (continued)
DKK million Non-cash changes
1 Jan.
2020
Cash
flows
Foreign
exchange
movements
New/
diposed/
remea-
sured
leases
Fair value
changes
Other
changes
31 Dec.
2020
Changes in 2020
Interest-bearing liabilities:
Bank loans and mortgage on
ferries and other ships 1,103 534 -1 0 0 -2 1,633
Issued corporate bonds 1,249 0 -88 0 0 1 1,162
Lease liabilities 1,859 -1,131 -1 723 0 0 1,450
Payables to subsidiaries, inter-
est-bearing 1,754 218
1)
0 0 0 0 1,972
Other liabilities 11 0 0 0 0 -11 0
5,977 -379 -91 723 0 -13 6,217
Derivati ve financia l instru ments:
Derivatives related to issued
corporate bonds 55 0 0 0 84 0 140
Other:
Payables to subsidiaries, non
interest-bearing 165 3
1)
0 0 0 0 167
Total liabilities from financing
activities 6,197 -376 -91 723 84 -13 6,525
Receivables from
subsidiaries 275
1)
Total cash flows -101
1)
Cash flows related to Pay-
ables to/Receivables from
subsidiaries are presented net
in the Statement of cash flows
under Financing activities
in the line “Change in Group
internal financing, net” by
DKK 496m.
Note 22 Other payables
DKK million 2021 2020
Holiday pay obligations, etc. 159 190
Payables to subsidiaries 126 167
Payables to associates and joint ventures 50 49
Public authorities (VAT, duty, etc.) 11 59
Other payables 42 71
Accrued interests 6 4
Total other payables 394 540
Note 23 Information on financial instruments
DKK million 2021 2020
Carrying amount per category of financial instruments
Financial assets measured at fair value:
Derivatives, related to operating activities 36 214
Derivatives, related to interest-bearing activities 5 0
Financial assets measured at amortised cost:
Trade receivables, receivables from subsidiaries, receivables from associates and joint
ventures, other receivables and cash 2,185 2,764
Financial assets measured at fair value through profit or loss:
Securities 10 10
Financial liabilities measured at fair value:
Derivatives, related to operating activities -32 -53
Derivatives, related to interest-bearing activities -81 -148
Financial liabilities measured at amortised cost:
Interest-bearing liabilities, Leases, trade payables, payables to subsidiaries, payables to
associates and joint ventures and other payables -8,745 -7,250
Total -6,623 -4,463
Hierarchy of financial instruments measured at fair value
The table below ranks financial instruments carried at
fair value by valuation method. The different levels have
been defined as follows:
• Level 1: Quoted prices in an active market for identical
type of instrument, i.e. without change in form or content
(modification or repackaging).
• Level 2: Quoted prices in an active market for similar
assets or liabilities or other valuation methods where
all material input is based on observable market data.
• Level 3: Valuation methods where possible material in-
put is not based on observable market data.
148
DFDS Annual Report 2021
Parent Financial Statements
Note 23 Information on financial instruments (continued)
DKK million
2021 Level 1 Level 2 Level 3
Derivatives, financial assets 0 40 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 -113 0
Total 0 -72 10
2020 Level 1 Level 2 Level 3
Derivatives, financial assets 0 214 0
Securities, financial assets 0 0 10
Derivatives, financial liabilities 0 -201 0
Total 0 13 10
Derivative financial assets and liabilities are all measured
at level 2. Reference is made to note 4.1 in the Consolidat-
ed Financial Statements for description of the valuation
method.
Securities, financial assets measured at fair value through
profit or loss comprise other shares and equity invest-
ments as well as other investments of DKK 10m (2020:
DKK 10m). These are some minor unlisted shares and
investments.
Note 24 Financial and operational risks
DFDS’ risk management policy
The description of DFDS’ risk management policy, financial
risks and capital management is identical for the Group
and the Parent Company. Reference is made to the Consol-
idated Financial Statements note 4.1.
The following specifications for the Parent Company are
different to the similar specifications for the Group.
Financial risks
Interest rate risks
An increase in the interest rate of 1%-point compared to
the actual interest rates in 2021 would, other things being
equal, have increased net interest payments by DKK 5m
for the Parent Company in 2021 (2020: DKK 7). A decrease
in the interest rate of 1%-point compared to the actual in-
terest rates in 2021 would, other things being equal, have
had a positive effect of DKK 1m (2020: DKK 1m).
Liquidity risks
The following are the contractual maturities of financial
liabilities, including estimated interest payments and ex-
cluding the impact of netting agreements:
Note 24 Financial and operational risks (continued)
DKK million
2021 0-1 year 1-3 years 3-5 years After 5 years
Non-derivative financial assets
Cash 475 0 0 0
Trade receivables including work in progress services 619 0 0 0
Non-interest bearing receivables from subsidiaries 325 15 0 0
Interest bearing receivables from subsidiaries 387 45 2 0
Receivables from associates and joint ventures 23 0 0 0
Other receivables and current assets 328 0 0 0
Non-derivative financial liabilities
Bank loans and mortgages on ferries and other ships -604 -523 -742 -1,158
Issued corporate bonds -954 -308 0 0
Other interest-bearing debt 0 0 0 0
Lease liabilities (Non-discounted) -749 -500 -3 -4
Trade payables -1,284 0 0 0
Payables to associates and joint ventures -50 0 0 0
Payables to subsidiaries -2,072 0 0 0
Other payables -7 0 0 0
Derivative financial assets
Bunker contracts 0 0 0 0
Interest swaps & caps 1 2 1 0
Cross currency interest rate swaps 0 0 0 0
Forward exchange contracts and currency swaps 5 6 6 18
Derivative financial liabilities
Bunker contracts 0 0 0 0
Interest swaps & caps -4 0 0 0
Cross currency interest rate swaps -71 -6 0 0
Forward exchange contracts and currency swaps -2 -6 -6 -18
Total -3,636 1,274 -742 -1,162
Beside the contractual maturities the Parent Company has is-
sued guarantees for DKK 7,561m (2020: DKK 6,815m). These
are not presented in the above table as the contractual matu-
rity is not possible to predict. Reference is made to note 28.
Assumptions for the maturity table
The maturity analysis is based on undiscounted cash flows
including estimated interest payments. Interest payments
are estimated based on existing market conditions.
The non-discounted cash flows related to derivative finan-
cial liabilities are presented at gross amounts unless the
parties according to the contract have a right or obligation
to settle at net amount.
149
DFDS Annual Report 2021
Parent Financial Statements
Note 24 Financial and operational risks (continued)
DKK million
2020 0-1 year 1-3 years 3-5 years After 5 years
Non-derivative financial assets
Cash 735 0 0 0
Trade receivables including work in progress services 600 0 0 0
Non-interest bearing receivables from subsidiaries 206 15 0 0
Interest bearing receivables from subsidiaries 493 24 223 14
Receivables from associates and joint ventures 27 0 0 0
Other receivables and current assets 427 31 0 0
Non-derivative financial liabilities
Bank loans and mortgages on ferries and other ships -228 -404 -345 -799
Issued corporate bonds -18 -901 -284 0
Other interest-bearing debt 0 0 0 0
Lease liabilities (Non-discounted) -1,156 -289 -14 -9
Trade payables -741 0 0 0
Payables to associates and joint ventures -49 0 0 0
Payables to subsidiaries -2,139 0 0 0
Other payables -3 0 0 0
Derivative financial assets
Bunker contracts 17 0 0 0
Interest swaps & caps 0 0 0 0
Cross currency interest rate swaps 0 0 0 0
Forward exchange contracts and currency swaps 128 14 14 40
Derivative financial liabilities
Bunker contracts 0 0 0 0
Interest swaps & caps 0 -8 -1 0
Cross currency interest rate swaps -5 -112 -23 0
Forward exchange contracts and currency swaps -52 0 0 0
Total -1,759 -1,630 -429 -754
Note 25 Non-cash operating items
DKK million 2021 2020
Change in provisions 1 0
Change in write-down of inventories for the year 8 16
Change in provision for defined benefit plans and jubilee obligations 2 0
Vesting of share option plans and employee shares expensed in the Income statement 17 7
Non-cash operating items 27 23
Note 26 Change in working capital
DKK million 2021 2020
Change in inventories -66 32
Change in receivables, such as trade receivables, prepaid costs, etc. -74 56
Change in current liabilities, such as trade payables, payables to joint ventures, etc. 453 -219
Change in working capital 313 -132
Note 27 Acquisition and sale of enterprises, activities and non-controlling interests
Acquisition and disposals
There are no acquisition or disposals in 2021 or 2020.
During January 2022 the Parent Company has purchased
ICT Logistics Group. For further details refererence is made
to the Consolidated Financial Statements note 5.5.
Acquisition of non-controlling interests
For further details refererence is made to the Consolidated
Financial Statements note 5.5.
150
DFDS Annual Report 2021
Parent Financial Statements
Note 28 Guarantees, collateral and contingent liabilities
Issued guarantees amount to DKK 7,211m (2020: DKK
6,686m). Particularly, the Parent Company has is-
sued guarantees for loans made by subsidiaries of DKK
6,182m (2020: DKK 6,434m). In addition, the Parent
Company has issued two guarantees in relation to de-
fined benefit pension schemes in the UK of an amount up
to DKK 255m (2020: DKK 389m) and a few guarantees on
behalf of subsidiaries without a specific capped amount.
The Parent Company has also issued letters of support,
particularly for certain Group companies and associated
companies with negative equity.
The Parent Company is in 2021 as well as in 2020 part
in various legal disputes. The outcome of these disputes
is not considered likely to influence the Parent Company
significantly, besides what is already recognised in the
balance sheet.
Certain ferries with a total carrying amount of DKK 2,668m
(2020: DKK 2,385m) have been pledged as security for
mortgage on ferries with a total carrying amount of DKK
2,493m (2020: DKK 1,558m).
Note 30 Related party transactions
Description of the Parent Company’s related parties is
equal to the description for the Group. Reference is made
to the Consolidated Financial Statements note 5.8.
DKK million
2021
Sale of
services
Purchase
of services
Sale of
assets Receivables
Impairment of
receivables Liabilities
Capital
contributions
Associates and joint
ventures 13 171 0 23 0 50 0
Subsidiaries 1,137 1,178 0 759 0 2,072 1,741
2020
Sale of
services
Purchase
of services
Sale of
assets Receivables
Impairment of
receivables Liabilities
Capital
contributions
Associates and joint
ventures 14 155 0 27 0 49 0
Subsidiaries 825 1,125 0 960 0 2,139 848
Impairment losses recognised in the Income statement
in 2021 amount to DKK 110m (2020: DKK 156m) and
reversals of impairment losses amount to DKK 0m (2020:
DKK 145m). Reference is made to note 31.
Receivables are unsecured and are related to trade receiv-
ables and cash pools.
Reference is made to note 28 for a description of
guarantees issued by the Parent Company on behalf of
subsidiaries.
Note 29 Contractual commitments
DKK million 2021 2020
Contractual commitments, term 0-1 year 500 1,352
Contractual commitments, term 1-5 years 78 345
Contractual commitments, term after 5 years 91 527
Total contractual commitments (undiscounted) 669 2,224
Contractual commitments in 2021 mainly relates to two
new buildings on order. One freight and passenger ferry
(ro-pax) is on order for delivery in 2022.
The Parent Company also has a contractual commitment
for a for a new headquarter in Denmark.
151
DFDS Annual Report 2021
Parent Financial Statements
Note 31 Impairment testing
Introduction
DFDS decided to impairment tests all non-current assets
at least once every year and in case of indication of impair-
ment. Due to Covid-19 quarterly impairment assessments
have been made in 2021.
For a description of the definition of cash-generating units,
basis for impairment testing and calculation of recovera-
ble amount reference is made to the Consolidated Finan-
cial Statements note 3.1.5.
Impairment tests of investments in subsidiaries, associ-
ates and joint ventures
Impairment tests are carried out for each subsidiary, asso-
ciates and joint ventures in the Parent Company if there
is indication of impairment. The individual companies are
regarded as the lowest cash-generating units.
The expected net cash flows are assessed on entity level
based of approved forecasts for 2022 and management
business plans beyond 2022. The projections includes the
estimated impact of long-term strategic decisions such as
WIN23 and assessment of opportunities for future growth
and required investments. A Gordon growth cash flow mod-
el has been applied for calculating the NPV and a long term
growth rate of 1.3% has been applied.
Determination of discount rate
The Parent Company uses a discount rate determined for
each subsidiary, associate or joint venture, according to
the business area to which it belongs. The applied discount
rate for 2021 is based on the WACC assumptions for the
Group with reference to note 3.1.5. The WACC applied has
been determined to 6.01% (2020; 6.4%).
2021
In 2021 investments in subsidiaries have been impaired
by DKK 110m in total as the calculated value in use of
the individual investments is lower than the book value.
The impairment of DKK 110m in 2021 is recognised under
Financial items. Reference is made to note 7.
The Parent Company has issued letter of support to some
subsidiaries and associates with negative equity. Conse-
quently, the investment in these subsidiaries and asso-
ciates are written down to zero, and any receivables due
from the subsidiaries and associates are written down by
amounts equal to the respective negative equities. Total
write down of receivables at 31 December 2021 amounts
to DKK 0m. Further, write-downs in previous years have
been reversed by DKK 0m. The write-downs and reversals
are recognised under Financial items.
2020
In 2020 investments in subsidiaries have been impaired
by DKK 156m in total as the calculated value in use of
the individual investments is lower than the book value.
Furthermore, in 2020 previous impairments have been
reversed by DKK 145m. The impairment of net DKK 12m
in 2020 is recognised under Financial items. Reference is
made to note 7.
The Parent Company has issued letter of support to some
subsidiaries and associates with negative equity. Conse-
quently, the investment in these subsidiaries and asso-
ciates are written down to zero, and any receivables due
from the subsidiaries and associates are written down by
amounts equal to the respective negative equities. Total
write down of receivables at 31 December 2020 amounts
to DKK 0m. Further, write-downs in previous years have
been reversed by DKK 0m. The write-downs and reversals
are recognised under Financial items.
Note 32 Covid-19 impact
Information about judgements made in relation to Covid- 19
and the effects on the amounts recognised in the financial
statement is included in the note.
DKK million 2021 2020
Note Text
3 Employee cost Government grants (Covid-19)
1)
50 69
3 Employee cost Wages, salaries and remuneration 0 1
Total impact on EBITDA 50 70
6 Special Items Termination cost in connection with restructuring 0 -39
2)
6 Special Items Impairment of a passenger ferry and terminal 0 -100
3)
Total impact on EBIT 0 -69
Government grants
DFDS has taken part in various government compensa-
tion schemes following Covid-19. Wage compensation
DKK 50m (2020: DKK 69m) is reducing the staff costs
in the income statement and contributions from volun-
tary salary a reduction DKK 0.0m (2020: DKK 1m) are
deducted in wages, salaries and remuneration.
Impairment testing
In relation to the underlying assumptions for Impairment
testing in note 3.1.5, the outbreak of Covid-19 has been
taken into consideration and no impairment has occurred
during 2021 (2020: DKK 100m).
Leases
The International Accounting Standards Board (IASB) has
published ‘Covid-19-Related Rent Concessions (Amend-
ment to IFRS 16 leases) as of 28 May 2020, amending the
standard to provide DFDS with an exemption from assess-
ing whether a Covid-19-related rent concession is a lease
modification. DFDS did not adopted the Covid-19 amend-
ment, and no reassessment nor renegotiations of rent con-
cessions have taken place.
1)
Contributions from Govern-
ment for wage subsidy are
included in employee costs.
DFDS took part in local
schemes during 2021.
2)
Restructuring costs related
to Covid-19 are included in
special items and consist of
termination costs related to
employees made redundant.
3)
In 2020, due to travel
restrictions an impairment
loss of DKK 100m has been
recognised under special
items relating to the business
unit “Passenger”.
Note 33 Events after the balance sheet date
On 15 February 2022, DFDS awarded 23,350 restricted
stock units and 176,706 share options to the Executive
Board and a number of key employees. The theoretical
value is DKK 14.6m calculated according to the Black-
Scholes-model.
152
DFDS Annual Report 2021
Parent Financial Statements
Note 34 Accounting Policies
Investments in subsidiaries, associates and joint ventures
Investments in subsidiaries, associates and joint ventures
are measured at cost in the Parent Company’s Balance
sheet. Impairment testing is carried out if there is any indi-
cation of impairment. The carrying amount is written down
to the recoverable amount whenever the carrying amount
exceeds the recoverable amount. The impairment loss is
recognised as Financial cost in profit for the year unless
it qualifies as a special item. If the Parent Company has a
legal or constructive obligation to cover a deficit in sub-
sidiaries, associates and joint ventures, a provision for this
is recognised.
Equity
Reserves for development costs
The reserve for development costs comprise of DFDS’ de-
velopment costs corresponding to the capitalized develop-
ment cost in the balance sheet. The reserve is non distrib-
utable and cannot be used to cover deficit. The reserve is
dissolved upon disposal of the development cost either by
sale or if the development cost is no longer part of the en-
tity’s operation. The reserve will then be transferred to the
distributable reserves. The reserve will be reduced and the
distributable reserves increased concurrently with either
depreciations or write-downs.
For a description of the Hedging reserve, Revaluation of
securities and Treasury shares, reference is made to Con-
solidated Financial Statements, note 4.6.
The Parent Company Financial Statements are prepared
pursuant to the requirements of the Danish Financial
Statements Act concerning preparation of separate parent
company Financial Statements for companies reporting
under IFRS.
The 2021 Financial Statements have been prepared in ac-
cordance with International Financial Reporting Standards
as adopted by the EU and additional Danish disclosure re-
quirements for annual reports of listed companies.
Critical accounting estimates and assessments
In the process of preparing the Parent Company Financial
Statements, a number of accounting estimates and judge-
ments have been made that affect assets and liabilities at
the balance sheet date and income and expenses for the
reporting period. Management regularly reassesses these
estimates and judgements, partly on the basis of histori-
cal experience and a number of other factors in the given
circumstances.
In the opinion of Management, the accounting estimates
and judgements mentioned in note 1 under section “Signif-
icant estimates” of the Consolidated Financial Statement
are also significant in the preparation of the Parent Compa-
ny Financial Statements. Furthermore impairment test of
investments in subsidiaries also requires critical account-
ing estimates and assessments.
Impairment testing of investments in subsidiaries
Impairment testing of investments in subsidiaries is car-
ried out if there is indication of impairment. The impair-
ment tests are based on the expected future cash flows
for the tested subsidiaries. For further details of estimates
and assessments relating to investments in subsidiaries
reference is made to note 31, which mention impairment
testing.
Management is of the opinion that, except for impairment
testing of investments in subsidiaries, no accounting es-
timates or judgements are made in connection with the
presentation of the Parent Company Financial Statements
that are material to the financial reporting, other than
those disclosed in section 1 to the Consolidated Financial
Statements.
Description of accounting policies
The Parent Company accounting policies are consistent
with the accounting policies described in the Consolidated
Financial Statements with the following exceptions:
Business combinations
In the Parent Company common control acquisitions (and
disposals) of enterprises and activities are measured and
recognised in accordance with the ‘book value method’ by
which differences, if any, between purchase price and book
value of the acquired/sold enterprise/activity are recog-
nised directly in equity.
Translation of foreign currencies
Foreign exchange adjustments of balances accounted for
as part of the total net investment in enterprises that
have a functional currency other than DKK are recognised
in profit for the year as Financial income and costs in the
Parent Company Financial statements. Likewise, foreign
exchange gains and losses on the portion of loans and
derivative financial instruments that has been entered
into to hedge the net investment in these enterprises are
recognised directly in the profit for the year as Financial
income and costs.
Dividends from investments in subsidiaries, associates
and joint ventures
Dividends from investments in subsidiaries, associates and
joint ventures are recognised in the Parent Company’s In-
come statement for the year in which the dividends are
declared. If distributions exceed the subsidiary’s, the asso-
ciate’s or the joint venture’s Comprehensive income for the
period, an impairment test is carried out.
153
DFDS Annual Report 2021
Parent Financial Statements
Reports
155 Management statement
156 Independent Auditors’ Reports
154
DFDS Annual Report 2021
Reports
Statement by the Executive Board and the Board of Directors
The Board of Directors and the Executive Board have to-
day considered and approved the Annual report of DFDS
A/S for the financial year 1 January - 31 December 2021.
The Annual report has been prepared in accordance with
International Financial Reporting Standards as adopted by
the EU and additional requirements in the Danish Financial
Statements Act.
In our opinion the Consolidated Financial Statements and
the Parent Company Financial Statements give a true and
fair view of the Group’s and the Parent Company’s assets,
liabilities and financial position at 31 December 2021 and
of the results of the Group’s and the Parent Company’s op-
erations and cash flows for the financial year 1 January
– 31 December 2021.
Further, in our opinion, the Management’s review includes
a true and fair account of the development in the Group’s
and the Parent Company’s operations and financial mat-
ters, of the result for the year and of the Group’s and the
Parent Company’s financial position as well as a descrip-
tion of the most significant risks and elements of uncer-
tainty facing the Group and the Parent Company.
In our opinion, the annual report with the file name
DFDS-2021-12-31-en.zip is prepared in all material re-
spects in accordance with the ESEF Regulation.
We recommend that the Annual report be adopted at the
Annual General Meeting.
Copenhagen, 24 February 2022
EXECUTIVE BOARD
Torben Carlsen Karina Deacon
President & CEO Executive Vice President & CFO
BOARD OF DIRECTORS
Claus V. Hemmingsen Klaus Nyborg Anders Götzsche Dirk Reich
Chair Vice Chair
Jens Otto Knudsen Jill Lauritzen Melby Jesper Hartvig Nielsen Lars Skjold-Hansen
Marianne Dahl
155
DFDS Annual Report 2021
Reports
TO THE SHAREHOLDERS OF DFDS A/S
Report on the audit of the Financial Statements
Our opinion
In our opinion, the Consolidated Financial Statements and
the Parent Company Financial Statements give a true and
fair view of the Group’s and the Parent Company’s finan-
cial position at 31 December 2021 and of the results of
the Group’s and the Parent Company’s operations and cash
flows for the financial year 1 January to 31 December
2021 in accordance with International Financial Reporting
Standards as adopted by the EU and further requirements
in the Danish Financial Statements Act.
Our opinion is consistent with our Auditor’s Long-form Re-
port to the Audit Committee and the Board of Directors.
What we have audited
The Consolidated Financial Statements and Parent Compa-
ny Financial Statements of DFDS A/S for the financial year
1 January to 31 December 2021, page 76-155, comprise
income statement and statement of comprehensive in-
come, balance sheet, statement of changes in equity,
statement of cash flows and notes, including summary
of significant accounting policies for the Group as well
as for the Parent Company. Collectively referred to as the
“Financial Statements”.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs) and the additional require-
ments applicable in Denmark. Our responsibilities under
those standards and requirements are further described in
the Auditor’s responsibilities for the audit of the Financial
Statements section of our report.
We believe that the audit evidence we have obtained is suf-
ficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the
International Ethics Standards Board for Accountants’ In-
ternational Code of Ethics for Professional Accountants
(IESBA Code) and the additional ethical requirements ap-
plicable in Denmark. We have also fulfilled our other ethi-
cal responsibilities in accordance with these requirements
and the IESBA Code.
To the best of our knowledge and belief, prohibited non-au-
dit services referred to in Article 5(1) of Regulation (EU)
No 537/2014 were not provided.
Appointment
We were appointed auditors of DFDS A/S for the first time
on 23 March 2021 for the financial year 2021.
Key audit matters
Key audit matters are those matters that, in our profes-
sional judgement, were of most significance in our audit of
the Financial Statements for 2021. These matters were ad-
dressed in the context of our audit of the Financial State-
ments as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Acquisition of the HSF Logistics Group
The Group has prepared a purchase price allocation (‘PPA’)
for the acquisition of the HSF Logistics Group resulting in
various assets and liabilities being separately valued. The
Group used projected financial information in the PPA.
Management used their best knowledge to make esti-
mates when utilising the Group’s valuation methodologies.
In order to determine the fair value of the separately iden-
tified assets and liabilities in the acquisition, the valuation
methodologies require input based on assumptions about
the future and use discounted cash flow forecasts.
The significant judgements and estimates involved in the
PPA mainly related to assessing the fair value of customer
relationships and property, plant and equipment including
right-of-use assets.
We focused on the PPA because it involves the identifica-
tion of the acquired assets and liabilities and their respec-
tive fair values, which requires complex and subjective
judgements and estimates by management.
Reference is made to note 5.5 in the Consolidated Finan-
cial Statements.
How our audit addressed the key audit matter
We assessed whether the acquisition of HSF Logistics
Group met the criteria of a business combination.
• We verified the assets and liabilities recorded in the
opening balance, by performing audit procedures on
the opening balance of the HSF Logistics Group before
purchase price adjustments and agreed assets and lia-
bilities to accounting records.
Independent Auditors’ Reports
• We reconciled the purchase price to the Share Purchase
Agreements and verified the cash paid to bank transfers.
• We tested the calculations in the PPA model and chal-
lenged Management’s judgements and estimates, includ-
ing the model, significant assumptions and data applied.
• We involved our internal valuation experts in assessing
the valuation methodologies and the significant as-
sumptions used by management.
• Finally, we assessed the disclosures relating to the ac-
quisition of HSF Logistics Group.
Valuation of intangible and tangible assets
The carrying amount of Goodwill, Ferries and other ships,
other non-current intangible and tangible assets as well
as Right-of-use assets is significant to the Consolidated
Financial Statements.
Management monitors the carrying value of the above-
mentioned assets based on defined CGU’s and performs
impairment tests, if any indication of impairment or rever-
sal of previous impairments exist. Furthermore, goodwill is
tested once a year for impairment.
Management’s assessment of the recoverability of the car-
rying amount of the above-mentioned assets is based on
value-in-use calculations, including determination of the
significant assumptions and data applied. Furthermore,
independent broker valuations are obtained to assess the
fair value less cost to sell of Ferries and other ships.
Bearing in mind the generally long-lived nature of the
above-mentioned assets, the significant assumptions in
estimating the future cash flows in the value-in-use calcu-
lations are revenue, EBIT, EBIT margin, future investments,
and growth expectations. The impairments performed did
not lead to impairments or material reversals of impair-
ments in the Consolidated Financial Statements.
We focused on this area as the amounts involved are sig-
nificant and because Management is required to exercise
considerable estimates and judgements and because of
the inherent complexity in estimating the value-in-use.
Reference is made to note 3.1.5 in the Consolidated Finan-
cial Statements.
How our audit addressed the key audit matter
• We discussed with Management and evaluated the
methodology by which Management monitors indi-
cators of impairment of Ferries and other ships, other
non-current intangible and tangible assets as well as
Right-of-use assets.
• Further, in addressing the risk, we considered the ap-
propriateness of Management defined CGUs. We exam-
ined the methodology used by Management to assess
the carrying amount of the above-mentioned assets
assigned to CGUs, and the process for identifying CGUs
that required impairment testing to determine compli-
ance with IFRS as adopted by the EU.
• We performed detailed testing of the impairment tests,
where indicators of impairment were identified. We as-
sessed the reasonableness of significant assumptions
in relation to the ongoing operation of the assets.
• We corroborated Management’s estimate of future cash
flows and challenged whether these were appropriate in
light of the significant assumptions being revenue, EBIT,
EBIT margin, future investments and growth expectations.
• We used our internal valuation experts to independent-
ly calculate the discount rate. In calculating the dis-
count rate, the key inputs used were independently
sourced from market data. We compared the discount
rate used by Management to our calculated rate.
• We tested the mathematical accuracy of the relevant
value-in-use models prepared by Management.
• Finally, we assessed the disclosure of these matters in
the Consolidated Financial Statements.
Statement on the Management’s review
Management is responsible for Management’s Review,
page 1-75 and from page 158-170.
Our opinion on the Financial Statements does not cover
Management’s Review, and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the Financial Statements,
our responsibility is to read Management’s Review and, in
doing so, consider whether Management’s Review is ma-
terially inconsistent with the Financial Statements or our
knowledge obtained in the audit, or otherwise appears to
be materially misstated.
Moreover, we considered whether Management’s Review
includes the disclosures required by the Danish Financial
Statements Act.
Based on the work we have performed, in our view, Man-
agement’s Review is in accordance with the Consolidated
156
DFDS Annual Report 2021
Reports
Financial Statements and the Parent Company Financial
Statements and has been prepared in accordance with the
requirements of the Danish Financial Statements Act. We
did not identify any material misstatement in Manage-
ment’s Review.
Management’s responsibilities for the financial statements
Management is responsible for the preparation of consoli-
dated financial statements and parent company financial
statements that give a true and fair view in accordance
with International Financial Reporting Standards as adopt-
ed by the EU and further requirements in the Danish Fi-
nancial Statements Act, and for such internal control as
Management determines is necessary to enable the prepa-
ration of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Financial Statements, Management is
responsible for assessing the Group’s and the Parent Com-
pany’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless Management either
intends to liquidate the Group or the Parent Company or to
cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit
of the financial statements
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Rea-
sonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs
and the additional requirements applicable in Denmark will
always detect a material misstatement when it exists. Mis-
statements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could rea-
sonably be expected to influence the economic decisions
of users taken on the basis of these Financial Statements.
As part of an audit in accordance with ISAs and the addi-
tional requirements applicable in Denmark, we exercise pro-
fessional judgement and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the Financial Statements, whether due to fraud or error,
design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the pur-
pose of expressing an opinion on the effectiveness of
the Group’s and the Parent Company’s internal control.
• Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates
and related disclosures made by Management.
• Conclude on the appropriateness of Management’s use
of the going concern basis of accounting and based on
the audit evidence obtained, whether a material uncer-
tainty exists related to events or conditions that may
cast significant doubt on the Group’s and the Parent
Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are re-
quired to draw attention in our auditor’s report to the re-
lated disclosures in the Financial Statements or, if such
disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future
events or conditions may cause the Group or the Parent
Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the Financial Statements, including the disclosures,
and whether the Financial Statements represent the un-
derlying transactions and events in a manner that gives
a true and fair view.
• Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business ac-
tivities within the Group to express an opinion on the Con-
solidated Financial Statements. We are responsible for
the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance re-
garding, among other matters, the planned scope and tim-
ing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify
during our audit.
Independent Auditors’ Reports (continued)
We also provide those charged with governance with a
statement that we have complied with relevant ethical re-
quirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence and,
where applicable, actions taken to eliminate threats or
safeguards applied.
From the matters communicated with those charged with
governance, we determine those matters that were of
most significance in the audit of the Financial Statements
of the current period and are therefore the key audit mat-
ters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in
our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public in-
terest benefits of such communication.
Report on compliance with the ESEF Regulation
As part of our audit of the Financial Statements we per-
formed procedures to express an opinion on whether the
annual report of DFDS A/S for the financial year 1 January
to 31 December 2021 with the filename DFDS-2021-12-
31-en.zip is prepared, in all material respects, in compli-
ance with the Commission Delegated Regulation (EU)
2019/815 on the European Single Electronic Format (ESEF
Regulation) which includes requirements related to the
preparation of the annual report in XHTML format and
iXBRL tagging of the Consolidated Financial Statements.
Management is responsible for preparing an annual report
that complies with the ESEF Regulation. This responsibility
includes:
• The preparing of the annual report in XHTML format;
• The selection and application of appropriate iXBRL
tags, including extensions to the ESEF taxonomy and
the anchoring thereof to elements in the taxonomy, for
all financial information required to be tagged using
judgement where necessary;
• Ensuring consistency between iXBRL tagged data and
the Consolidated Financial Statements presented in hu-
man-readable format; and
• For such internal control as Management determines
necessary to enable the preparation of an annual report
that is compliant with the ESEF Regulation.
Our responsibility is to obtain reasonable assurance on
whether the annual report is prepared, in all material re-
spects, in compliance with the ESEF Regulation based on
the evidence we have obtained, and to issue a report that
includes our opinion. The nature, timing and extent of proce-
dures selected depend on the auditor’s judgement, includ-
ing the assessment of the risks of material departures from
the requirements set out in the ESEF Regulation, whether
due to fraud or error. The procedures include:
• Testing whether the annual report is prepared in XHTML
format;
• Obtaining an understanding of the company’s iXBRL
tagging process and of internal control over the tagging
process;
• Evaluating the completeness of the iXBRL tagging of
the Consolidated Financial Statements;
• Evaluating the appropriateness of the company’s use of
iXBRL elements selected from the ESEF taxonomy and
the creation of extension elements where no suitable
element in the ESEF taxonomy has been identified;
• Evaluating the use of anchoring of extension elements
to elements in the ESEF taxonomy; and
• Reconciling the iXBRL tagged data with the audited
Consolidated Financial Statements.
In our opinion, the annual report of DFDS A/S for the fi-
nancial year 1 January to 31 December 2021 with the file
name DFDS-2021-12-31-en.zip is prepared, in all material
respects, in compliance with the ESEF Regulation.
Hellerup, 24 February 2022
PricewaterhouseCoopers
Statsautoriseret Revisionspartnerselskab
CVR no 3377 1231
Rasmus Friis Jørgensen
State Authorised Public
Accountant
mne28705
Thomas Wraae Holm
State Authorised Public
Accountant
mne30141
157
DFDS Annual Report 2021
Reports
Consolidated
ESG statements
159 Consolidated ESG statements
160 EU sustainable taxonomy
161 Environment
165 Social
169 Governance
158
DFDS Annual Report 2021
Management review
56
Being a transport and logistics provider, we are conscious of
the footprint we have – both in terms of the environment
but also relating to our employees and the people we
impact through our value chain. We are structuring our work
in an ESG framework that helps us address and focus on the
most material topics.
In 2020, we completed our specific, targeted, and actionable
Climate Action Plan and emphasised organisational
sustainability, including Health & Safety, Diversity &
Inclusion, and our Code of Conduct.
In 2021, we introduced our ESG framework. This framework
is our way of structuring issues we have already worked on
for years. By setting specific ESG goals, we make it clear
that doing business today is about more than just giving
shareholders a return on their investment. Ambitious goals
are a key part of running a sustainable business.
--- Insert business model---
Consolidated
ESG statement
Ferry routes
Door-door solutions
For dry goods and cold chain
Contract logistics
For dry goods and cold chain
Pickup
point
Catchment
area A
Port
terminal A
Port
terminal A
Freight and passengers
Port
terminal B
Port
terminal B
Delivery
point
Catchment
area B
Support WarehouseCustom
solutions
Warehouse
refrigerated
159
DFDS Annual Report 2021
Management review
57
EU sustainable
taxonomy
The EU Taxonomy Climate Delegated Act (the taxonomy)
aims to support sustainable investment by making it clearer
which economic activities most contribute to meeting the
EU's environmental objectives.
The taxonomy aims to provide companies, investors, and
policymakers with appropriate definitions for which
economic activities can be considered environmentally
sustainable. It should create security for investors, protect
private investors from greenwashing, help companies to
become more climate-friendly, mitigate market
fragmentation, and help shift investments where they are
most needed.
In short, the taxonomy is a classification and reporting
system that identifies sustainable economic activities. This
reporting against the taxonomy is a first for DFDS and is in
accordance with the requirements for 2021.
In 2021 the taxonomy-eligible share of our revenue was
94%. The taxonomy-eligible share of operational expenses
(opex) was 81% whereas the capital expenses (capex) was
65 %.
All eligible activities fall within a range of transportation
activities, and the majority within freight services by road
and sea. This corresponds with our operational divisions
Logistics and Ferry.
DFDS taxonomy rep
orting for 2021 Revenue Opex Capex
Percent of activities which is eligible within the EU taxonomy
6.2 Freight rail transport 10% 11% 0%
6.6 Freight transport services by road 35% 37% 22%
6.10 Sea and coastal freight water transport, vessels for port operations and auxiliary activities 50% 33% 37%
6.12 Retrofitting of sea and coastal freight and passenger transport 0% 0% 6%
Subtotal
94% 81% 65%
Percent of activities which is non
-eligible within the EU taxonomy
6% 19% 35%
Total
100% 100% 100%
Accounting policies – EU taxonomy
The taxonomy has specified objectives of climate change mitigation and
adaptation to be contained in the reporting for 2021. The total revenue,
opex,
and capex must be divided into the activities defined by the
taxonomy.
Further environmental reporting w
ill become mandatory in 2022 and
subsequent years. As the reporting practice develops and expands DFDS
will review and update it’s reporting of taxono
my-eligible KPIs and
related accounting policies accordingly. This may also impact the
taxonomy
-aligned KPIs reported for 2021.
The taxonomy KPIs have been calculated as followed:
•
Taxonomy revenue KPI = Eligible revenue / Total revenue
•
Taxonomy opex KPI = Eligible opex / Total opex
•
Taxonomy capex KPI = Eligible capex (additions) / Total capex
(additions)
We
have determined the taxonomy-eligible economic activities (the
numerator for the taxonomy KPIs ) by the following process:
1.
Identifying economic activities and processes across the business
of the DFDS Group.
2. Evaluating whether the identified economic activities in the DFDS
Group are covered by the economic activity descriptions included in
the taxonomy.
Activities in DFDS Group determined as taxonom
y-
eligible economic
activities (additional activities are expected to be added in 2022):
•
6.2. Freight rail transport
•
6.6. Freight transport services by road
•
6.10. Sea and coastal freight water transport, vessels for port
operations and auxiliary activities
•
6.12. Retrofitting of sea and coastal freight and passenger water
transport
The denominator f
or the taxonomy KPIs has been determined as followed:
•
Total revenue is aligned with note 2.2 Revenue.
•
Total opex is aligned with the cost definition in the income
statement note 2.3 Costs and 2.4 Employee costs excluding
administration.
•
Total capex is defined as additions to tangible and intangible assets
reported in note 3.1.1 Non-current intangible assets, note 3.1.2 Non-
current tangible
160
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Environment
In an industry with a large carbon footprint, we are
committed to finding solutions that will eventually
transform how our industry operates. Vessels crossing seas
can be the cause of oil spills and discharges, and our trucks
impact air quality.
We aim to be a responsible neighbour who reduces
pollution, waste, and noise in the communities in which we
operate.
We continue our efforts to protect ocean life and
biodiversity by supporting research and education that
focuses on the marine environment. Our projects include
monitoring and protecting whales and dolphins with ORCA,
long-term measurement of the ecological health of marine
plankton with the Continuous Plankton Recorder Survey
and monitoring and researching cetacean and seabirds with
MARINElife.
CO2 emissions
Our approach
97% of our scope 1 and scope 2 CO2e emissions come from
our vessels (87% if scope 3 is included), making it a natural
starting point in our green transition.
However, the challenge is twofold: Vessels and vehicles are
designed and built for fossil fuel, and green fuel alternatives
do not currently exist at the scale we as a business require.
In the short term, we focus on improving and upgrading our
existing fleet and reducing CO2 emissions from our buildings
and operations in general. We have identified actions such
as fleet replacement and environmental upgrading,
optimising the vessels' hydro-dynamic performance to
reduce friction in the water and improving decision support
systems to help crews and shore-side support teams
operate in a more fuel-efficient way, as well as continuous
improvements to energy consumption. We also actively
develop and test new means of propulsion and energy
generation.
The major and long-term transition towards zero-emission
transport requires our industry to replace today's fossil-fuel
dependent fleets with a new generation of vessels and
vehicles that run on sustainable fuels created entirely from
renewable energy.
By 2050, our target is that we have replaced fossil fuels
with zero-emission fuels like ammonia, hydrogen, or
methanol. Storing, handling, and using these new fuels
differs vastly from how fossil fuel works. Finding feasible
alternatives to fossil fuels calls for cross-sector
collaboration and an appetite for experiments. Numerous
1)
CO2e includes GHG emissions from
all 6 greenhouse gases: carbon
dioxide (CO2); methane (CH4);
nitrous oxide (N2O);
hydrofluorocarbons;
perfluorocarbons; and sulphur
hexafluoride (SF6)
Environment
CO2e emissions
Unit
Target 2023
2021
2020 2019 2018
Scope 1 emissions (CO2e)
1
1,000 tonnes 2,544 2,014 2,253 1,871
Scope 2 emissions (CO2e)
1
1,000 tonnes 6.9 6.0 7.3 8.5
Scope 3 emissions (CO2e)
1
1,000 tonnes 909 - - -
Total CO2e emissions
1
1,000 tonnes 3,460 2,020 2,260 1,879
Energy consumption
Marine fuel 1,000 tonnes 771,738 619,867 699,115 654,795
Diesel 1,000 litre
25,447 24,767 19,420 -
Biofuels (HVO) 1,000 litre
1,236 1,150 573 -
Electricity MWh
36,092 31,099 36,680 36,633
Total energy
consumption
TJ
33.9 26.9 30.0 24.9
Energy efficiency
CO2 emissions per GT mile (Own fleet) gCO2
12.4 (2023)
9.6 (2030) 13.0 13.4 13.9 -
CO2 emissions per GT mile (Route network) gCO2
13.6 13.5 14.1 14.4
Fuel consumption per nautical mile (Route network) g/GT/Nm
4.4 4.3 4.4 4.5
Electricity and heating consumption per land-based FTE MWh 5.9
7.0 6.3 7.4 7.9
Oil spills
Spills (> 1 barrel) Cases 0 (Annually) 0 1 0 0
161
DFDS Annual Report 2021
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59
complex uncertainties still hold back the commercial
viability of renewable fuels. Their demand depends on price
differentials between black and green energy, availability,
bunker infrastructure, and public incentives and regulations.
Closing the price gap between fossil and renewable fuels
will be critical to driving zero-emission vessels' adoption,
construction, and use.
To find green fuel alternatives, we partner with other
companies and organisations who share our need and desire
to transform the transport industry into one that runs on
sustainable fuel. We openly share information about which
sustainable fuels we are investigating and the volumes we
estimate to be required to fuel a business of our size. We are
contributing to the development of a hydrogen factory in
Copenhagen and a green ammonia production facility in
Esbjerg to better understand the production of green fuels
and contribute to their availability. With projects like those,
we aim to lessen the price gap between black and green
fuels, sustain our commercial competitiveness, and provide
customers with green transport options that reduce their
Scope 3 emissions.
Our performance
In 2021, we included scope 3 emissions to the GHG
inventory, and our emissions of CO2e were estimated to be
3,460,000 tonnes. 2,551,000 tonnes are from scope 1 and
scope 2 emissions. This is an increase of 26% in absolute
values compared to 2020 but only 13% compared to 2019.
Sustainable fuel availability is currently limited and will
continue to be so for years to come. This means that our
absolute emissions will increase as we grow the business.
The effect of our climate initiatives is visible when we look
at the efficiency of our own vessels and the full route
network. We have reduced CO2 emissions per GT mile for
owned vessels with 6.3% since 2019. For the full network,
including chartered vessels, the reduction is 3.5% during the
same period. The realised and planned reductions align with
our Climate Action Plan of a 45% reduction in CO2 per GT
mile in 2030 from a 2008 baseline.
We have a long tradition of continuously improving our fuel
efficiency and relative CO2 emissions resulting in a 25.6%
reduction from 2008 to 2021 for own vessels.
The scope 3 emission analysis indicates that 64% of our
scope 3 CO2e emissions are related to the upstream
production of the fuel used in our own fleet – both vessels
and trucks. 26% is related to third party suppliers within
transport – both on water, road, and rail. On total this means
that 90% of our scope 3 emissions relates directly to our
services of transport solutions. The last 10% comes from
purchased goods and services, capital goods and waste.
2021 highlights
Ferry: We continued to update and upgrade our fleet with
new tonnage, operational and technical improvements, and
innovative anti-fouling treatments to reduce resistance on
several vessels. We installed route planning and propulsion
control technology on three ferries to improve fuel
performance, applied anti-fouling hull paint to ten ferries to
reduce friction in the water and fuel consumption, and
installed LED lighting on freight decks on three ferries. We
also installed a new injection system to optimise engine
combustion on five ferries to save fuel (PMI VIT) and
expanded the organisation handling initiatives to upgrade
our existing fleet.
Absolute CO2e emissions
CO2e (1,000 tonnes)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2018 2019 2020 2021
Scope 1 Scope 2 Scope 3
162
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60
We continued improving air quality with scrubbers, cutting
sulphur levels through our pioneering work with air cleaning
systems. We were one of the first shipping companies to
deploy scrubbers on our ferries, installing the first system in
2009 on Ficaria Seaways. In 2021, we completed the
installation of scrubber systems onboard Aura Seaways,
bringing the total of vessels in DFDS with installed
scrubbers to 38.
Our Ballast Water Management Programme continued this
year with the installation of ballast water treatment
systems on eight vessels. The system prevents the spread
of potentially invasive aquatic species using ballast water
on ships operating across different regions. This is done
mechanically, using a combination of filtration and UV
radiation to render the organisms non-viable.
Logistics: We upgraded our road fleet by investing in trucks
with the highest possible Euro class engines to reduce
exhaust emissions and ensure optimal safety and efficiency.
In 2021, we purchased 181 Euro 6 standard Volvo trucks for
our operations, maintaining the level of 98% Euro 5 or 6-
certified trucks in our fleet of 571 trucks. These vehicles
effectively reduce harmful gas emissions, and are fuel-
efficient.
Across the Logistics Division, we reduce emissions by
improving fuel efficiency. We train drivers in Eco-driving,
optimised route planning, and expanded our use of biodiesel
(HVO). At the Gothenburg Ro-Ro Terminal in, we use biofuel
in all vehicles and trucks.
We have initiated innovative partnerships with customers
and truck manufacturers to test fuel additives in a research
set-up to confirm that this will increase fuel efficiency and
reduce emission per kilometre. If the test results are
positive, we plan to scale the test to a section of the fleet.
We purchased our first 125 electric trucks this year for
deployment in 2022-2023.
Our focus on circularity is increasing as the circular
economy offers many opportunities for logistics companies.
There is an opportunity to develop new roles and business
models and it can be part of how we innovate together with
customers and partners in 2022 and beyond. The mindset is
not new to DFDS as we already strive to fill trailers to
minimise empty running, including securing back-loads.
Scope 3 included in reporting: We have included scope 3 in
our emissions reporting from 2021. This is an important step
in gaining an overview of our carbon footprint through our
value chain. As our products are transportation and other
services and not physical products, there are no significant
downstream emissions within our value chain. Within the
upstream value chain emissions related to fuel- and energy-
related activities, transportation and distribution, and
purchased goods and services are those material to our
business. In 2022, we will dive further into our Scope 3
categories to identify how to reduce our emissions within
these areas.
Emission accounting: We continue to improve our internal
emission accounting procedures by aligning data from
different operational systems. They are all contributing to
our climate action plan reporting and are key elements in
our common reporting standard. This might have a minor
impact on previously recorded performance, but it is
improving our ability to measure results, assess and identify
areas for improvement and delivery of customer emissions
data.
Scope 3 emissions
Split on categories
8
8
%
%
1
1
%
%
6
6
4
4
%
%
2
2
6
6
%
%
1
1
%
%
Purchased goods and services
Capital goods
Fuel- and energy-related activities (not included in scope 1 & 2)
Upstream transportation and distribution
Waste generated in operations
163
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61
Energy mix
Our approach
We use different types of energy sources to fuel our
operations. These include marine oils, regular diesel, HVO,
green and regular electricity, shore power, batteries, and
solar panels. We always try to save, reduce, or avoid energy
consumption when possible as we transform from a
company that mainly runs on fossil fuel to one that runs on
sustainable fuel. We are also applying circularity principles
to better utilize resources and reduce the energy needed for
a given asset.
When investigating which sustainable fuels we need to run
a business of our size and complexity, we find that there
will not be one fuel to fit all our routes, vessels, vehicles or
purposes. Over time we will see a development in our
energy mix – reducing the fossil/traditional fuels and
increasing sustainable fuels. We are currently looking into
methanol, ammonia, and/or hydrogen for our fleet and
including renewable energy in our portfolio of energy
sources – either by way of own production (for instance,
with solar panels), power purchase agreements, and green
electricity certificates.
Our performance
As the DFDS business continues to grow, so does our energy
consumption. Marine fuel and diesel are still the majority
energy source by far. But as shore power solutions and
electric trucks are added to the operation, we will see an
increase in the use of electricity. The use of biofuel/HVO has
doubled since 2019 and we expect that it will continue to
increase in coming years.
2021 highlights
The shore power facility in Copenhagen was inaugurated in
October, making it possible for the ferries on the OFC route
to shut down engines in both Copenhagen and Oslo where
we have been using shore power since 2019.
We added solar panels to several warehouses, for instance,
in Peterborough. The solar array here will offset 11 tonnes
of carbon in its first year and generate more than 25% of
the electricity needed to run the warehouse. Once the
returns are proven, we will assess viability and apply solar
panels to other relevant sites. Energy efficiency is a primary
concern when we contract or build new buildings. The new
DFDS headquarters that opens in February 2022 will get
25-30% of the energy needed to run it from the solar panels
on its roof.
Water & Waste
We continuously assess our general resource consumption –
including water consumption and waste generation - to
initiate measures that limit our environmental impact. Our
employees can also help make a difference, and we nudge
them to make informed decisions on water use and waste
disposal through clear local guidelines. We are working on
establishing targets for water use and waste disposal by
gathering data that will make us better able to create a
baseline and measure use and procedures across locations.
Accounting policies – Environment
CO²e emissions
Scope 1
emissions (CO2e):
All direct emission
sources where DFDS has operational control
as defined by the Green House Gas Protocol.
This includes all use of fossil fuels for
stationary combustion or transportation, in
owned, leased or rented
assets. It also
inclu
des process emissions (e.g. chemical
processes, industrial gases, direct methane
emissions)
Scope 2 emissions (CO2e
1
: All indirect
emissions related to purchased energy;
electricity or heating/cooling where DFDS has
operational contr
ol as defined by the
Greenhouse Gas Protocol
Scope 3 emissions (CO2e
): Emissions related
to procured goods and services and fuel
- and
energ
y-related emissions not included in
scope 1 or scope 2 as defined by the Green
House Gas Protocol. The emission cate
gories
are selected based on a materiality
assessment of all 15 categories within GHG
accounting standard for scope 3
Total CO2e emissions
: Complete GHG
inventory
– includes both scope 1, scope 2
and scope 3
Energy consumption
Marine fuel
: Total consumption of heavy fuel
oil (HFO) and marine gas oil (MGO) per
nautical mile for ferries in operation
Diesel:
Total consumption of diesel for tr
ucks,
terminal, company cars and other vehicles
Biofuels (HVO): Total consumption of biofuels
for trucks and termi
nal equipment
Electricity:
Total consumption of electricity in
locations where DFDS has financial control of
the utility. Shorepower is included in the total
Total energy consumption
:
Energy consumed
from scope 1 and 2 energy sources. Includes
both land
-based energy consumption and
vessels’ energy consumption
Energy efficiency
CO2 emissions per GT mile (Own fleet):
Emissions measured as gCO2 per gross
tonnage nautical mile for owned ferries in
operation
CO2 emissions per GT mile (Route network):
Emission
s measured as gCO2 per gross
tonnage nautical mile for ferries operating
the route network
Fuel consumption per nautical mile
:
Total
consumption of heavy fuel oil (HFO) and
marine gas oil (MGO) per nauti
cal mile for
ferries in operation
Electricity
& heating consumption per land-
based FTE
:
Indirect energy consumption
(scope 2) in operational activities for offices,
warehouses and terminals, divided by average
FTEs
on land
Oil spills
Spills (> 1 barrel):
Incidents of oil spills
larger than one barrel f
rom ferries in
operation
164
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62
Social
Our company is nothing without our people. They make our
wheels go round and are vital to DFDS’ growth and the
successful execution of our strategies. We strive for a safe,
healthy, diverse, and inclusive work environment that
allows people to thrive and contribute. We support our
employees’ physical and mental health and encourage them
to find opportunities to give back and do good in the
societies where they live and work.
We measure our social performance using several
parameters in labour practices & human rights, diversity &
inclusion, occupational health & safety, business ethics,
employee engagement and community engagement. These
parameters enable us to track our progress and respond to
risks and opportunities related to talent attraction,
employee retention, and business development.
Labour practices & Human rights
Our approach
DFDS ensures that human rights are respected amongst
employees and throughout the value chain, as well as with
third-party workers, hauliers, and seafarers. We have been a
signatory to the United Nations Global Compact since 2015
and as defined in the UN Guiding Principles on Business &
Human Rights, we respect human rights and have
implemented them in our policies and procedures.
Our procurement team strives to minimise the risk of us
negatively affecting human rights and the environment
across our supply chain. Our Supplier Code of Conduct
incorporates the IMPA ACT Supplier Code of Conduct, based
on the UN Global Compact and its Guiding Principles on
Business and Human Rights.
The Supplier Code of Conduct asks all DFDS suppliers to
conform to the code and conform to all applicable laws,
rules and regulations where our suppliers operate. They
must also have policies and procedures to respect human
rights (including labour rights), address significant
environmental impacts, and counter corruption. In 2021, we
made an agreement with an external partner providing tools
to support a structured and transparent way when
assessing supplier risks related to e.g., Human Rights,
Business Ethics and Environment. Increased transparency
will enable us to focus on suppliers with highest risk.
Our Code of Conduct is our internal guideline for how we as
employees act responsibly, treat each other with respect,
and soundly respond to ethical issues. It is directly linked to
the UN Global Compact’s ten principles and covers topics
like human rights, diversity & inclusion, anti-harassment and
discrimination, environmental protection, and anti-
corruption. All employees can report breaches to our CoC
through our anonymous whistleblower line. We take all
violations seriously, investigate every report and learn from
them to prevent future cases.
Social
Representation of women
Target 2023
2021
2020 2019 2018
Total workforce % 30
24 23 25 23
At sea % 30 17 15 18 15
On land % 30
29 27 29 29
Senior management % 30
17 16 19 10
Managers % 30
14 13 18 -
Employees % 30
27 26 26 -
Safety at sea
Lost-time injury frequency (LTIF)
Incidents/
mill. hours 3.5 4.3 4.1 4.5 5.0
Safety on land
Lost-time injury frequency (LTIF)
Incidents/
mill. hours
5
7.4 5.9 6.7 3.8
Fatalities
- Colleagues Fatalities 0 (Annually) 1 0 0 0
- Contractors Fatalities 0 (Annually)
0 2 1 1
165
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63
Our performance
In 2021 we started the development of our Labour Code of
Conduct (LCoC) which will be implemented in the beginning
of 2022. Our LCoC describes expected minimum
requirements regarding our employees’ human rights at
work, in line with our Human Rights commitment. When
there is a difference between national law and this Labour
Code of Conduct, we seek to apply the higher standard to
the extent possible.
Diversity & Inclusion
Our approach
DFDS works to promote and change the face of our industry,
historically with a majority of men, through a dedicated and
structured approach to diversity and inclusion. We are
committed to ensuring equal opportunities and avoiding
discrimination based on race, religion, gender, disabilities, or
age. The monitoring and measures implemented to improve
diversity in DFDS cover all layers of management.
One of our primary priorities on the diversity agenda has
been to increase the number of women in the organisation.
We aim to be 30% women in our organisation by 2023. In
2022 we will evaluate the target from a sea based
perspective and consider if a vessel by vessel approach will
be a suitable approach going forward.
Our performance
In 2021 the female ratio increased across all KPIs compared
to 2021. On land we saw an increase from 27% to 29% and
at sea we moved from 15% to 17% females. On manager
and senior management level we have also seen a slight
increase, but we are still a bit behind compared to 2019
where we had the largest share of female managers. From a
board perspective we have maintained a minimum 33%
female representation between the shareholder elected
directors. Here by we have obtained equal representation in
accordance with authority guidelines.
When analysing the gender distribution on land we see that
there is a high level of variance between office and non-
office workers. In offices, the female gender ratio was 44%,
and 29% for managers, while the non-office ratio was 7%,
with 2% female managers.
In 2022 we will also see the impact of the HSF Logistics
Group acquisition. On a like-for-like comparison the female
representation will drop to from 29% to 25% for all land
based employees but only from 27% to 26% when looking
at manager positions. This is an expected impact of mergers
within an industry where there typically is an over-
representation of males in most companies.
In the coming years we will continue to work with increasing
both awareness and our performance within Diversity &
Inclusion.
2021 highlights
We monitor the development of female representation in
DFDS closely in internal monthly reports within our
Divisions and Business Units. All managers began structured
and ongoing diversity and inclusion training this year. We
introduced a D&I toolbox to all employees covering themes
like sexual harassment prevention, bias identification, fair
recruitment practices, how to phrase job ads to be more
inclusive, and stressing that we encourage applicants from
any background or persuasion to apply.
Female ratio
Workforce
Female ratio
Organisational levels
0
5
10
15
20
25
30
35
2018 2019 2020 2021
Total workforce At sea On land Target
0
5
10
15
20
25
30
35
2018 2019 2020 2021
Board of Directors Senior management Managers
Employees Target
166
DFDS Annual Report 2021
Management review
64
A new talent mentor programme was launched to develop a
diverse talent pipeline for future management positions. D&I
was the focal point of a case during DFDS’ selection of
participants for Horizon, our 12-month talent development
programme.
Manager training on how to handle harassment and bullying
was developed in 2021 and will be implemented in 2022.
Health & Safety
Our approach
DFDS is responsible for many people and their working
conditions. Their safety and wellbeing always come first
and require us to focus on sustaining a culture that keeps
us safe in the workplace, mentally and physically. We aim
to ensure that robust safety processes, equipment, tools,
and training are fully integrated into the way we work.
At sea we use SERTICA on all DFDS vessels to manage and
measure our H&S performance. It is a system widely used by
companies worldwide to optimise internal processes
concerning maintenance, procurement, HSQE, performance
and to make decisions based on data.
At land we operate within our Safety First programme - a
group-wide initiative to improve the knowledge of and
procedures regarding safety. The local H&S organisations
are implementing and integrating Safety First into their
existing procedures and processes ensuring that everyone is
moving in the same direction.
Our performance
The primary indicator for Health & Safety on both land and
sea is LTIF (Lost-Time-Injury Frequency) this is measured
and followed up upon centrally in the central organisations:
Marine Standard and & Land-based Health & Safety. Larger
locations with a high-risk Health & Safety profile will have
additional KPIs that are monitored and managed by the
local safety organisations.
Unfortunately, we have seen an increase of LTIF on both
land and sea. A contributing factor is our increased focus
and follow-up on reporting. But still our performance is not
satisfying, and we are committed to reducing the number
and severity of accidents going forward. With the new land-
based Health & Safety organisation in place we will begin to
look at evaluate if differentiated target setting for
warehouse, terminals and office would be meaningful. In
2021 we sadly saw a tragic fatal accident on board on of
our freight ferries in the Port of Sête. A Turkish seafarer died
from his injuries. The accident was thoroughly investigated,
and learnings led to an immediate strengthening of the local
Health & Safety organization by allocating resources to
improve local procedures and align these across rest of the
country.
2021 highlights
We strengthened our land-based Health & Safety with a
global function to raise awareness and enforce additional
preventive actions to reduce our health & safety risks. The
global Director for land-side Health & Safety is responsible
for establishing, maintaining, and advocating global safety
standards and reporting in close collaboration with the
many sites in our network. This includes reassessing and
further development of our Safety First programme.
Focus on mental wellbeing is an ongoing activity that aims
to help and inspire our leaders and employees. We have
introduced and maintained several initiatives to support our
Health & Safety
Land
Health & Safety
Sea
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2018 2019 2020 2021
LTIF Target
0.0
1.0
2.0
3.0
4.0
5.0
6.0
2018 2019 2020 2021
LTIF Target
167
DFDS Annual Report 2021
Management review
65
employees’ mental health this year. One example is DFDS
UK and Irelands’ partnership with Mental Health First Aid
England, which allows colleagues to become trained Mental
Health First Aiders, teaching the groundwork for helping
individuals who are on the verge of a crisis or need to talk.
We now have over 50 trained colleagues across all UK &
Ireland sites, with more courses on the way.
Accounting policies – Social
Representation of women
Total workforce: Percentage of women in FTE workforce
At sea: Percentage of women of number of employees at sea
On land: Percentage of women of number of employees on
land
Senior Management: Percentage of women of total number of
senior management positions defined as EVPs and VPs
Managers: Percentage of women of number of management
positions, excluding senior management, defined as positions
with responsibility for at least one employee
Employees: Percentage of women of number of employees,
excluding senior management and managers
Safety at sea
Lost-time injury frequency (LTIF): Number of registered work-
related accidents disabling a seafarer to work for more than
24 hours per one million exposure hours
Safety on land
Lost-time injury frequency (LTIF): Number of registered work-
related accidents disabling a land-based employee work for
more than 24 hours per one million exposure hours
Fatalities
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
168
DFDS Annual Report 2021
Management review
66
Governance
DFDS is committed to conducting business in a responsible,
ethical, and transparent manner and meeting stakeholders’
expectations of high business integrity standards. Our
approach to business integrity is embedded in our corporate
values, policies, and procedures. We believe in transparency
and voluntarily disclose and verify ESG (environmental,
social and governance) data to customers and stakeholders
like CDP, Sustainalytics, and others.
In 2021, we incorporated our sustainability priorities in an
ESG framework for a more targeted and integrated
approach. We have thorough processes to help us reduce
our environmental footprint and continuously strengthen
our position as a caring employer. We assess risks, analyse,
and investigate relevant initiatives and adjust our actions
as needed to stay on track with our commitments.
Business Ethics
Our approach
Providing maritime transport and logistics services means
we are in close contact with people throughout our network.
It also implies that our activities can have an impact on
human rights. It is a priority for us to pay attention to
respecting these rights through clear policies designed to
influence and determine all major decisions, actions, and
activities that take place within their boundaries, as we do
not tolerate any form of discrimination or harassment. This
includes protecting and safeguarding the conditions of
those we work with.
We consider corruption as unacceptable, but it is risk to our
business. We mitigate this by having clear policies for
employees and suppliers.
For employees, our Code of Conducts guides behaviour
towards suppliers for corruption to be avoided. We have a
group-wide whistleblower scheme where employees can
anonymously report breaches to our Code of Conduct. All
reports are investigated thoroughly and sanctioned
appropriately.
With suppliers, our procurement team strives to make sure
all procurement is performed responsibly and transparently.
Our Supplier Code of Conduct (SCOC) helps minimise the risk
of us negatively affecting human rights and the
environment across our supply chain.
The SCOC incorporates the IMPA ACT Supplier Code of
Conduct, which is based on the UN Global Compact and its
Guiding Principles on Business and Human Rights. We ask
all DFDS suppliers to conform to this code and all applicable
laws, rules, and regulations where our suppliers operate.
They must also have policies and procedures to respect
human rights (including labour rights), address significant
environmental impacts and counter corruption. They must
also have policies and procedures to respect human rights,
address substantial environmental impacts, and counter
corruption.
Our Code of Conduct and the Supplier Code of Conduct are
pieces of our comprehensive policy landscape. It is designed
to influence , determine, and evaluate all major decisions,
actions, and activities to which they are applicable. We
continuously review and update them to make sure they
stay relevant. Examples of other key policies are:
• Data Ethics Policy
• Diversity & Inclusion Policy
• Responsible Procurement Policy
• Climate & Environment Policy
• Anti-Slavery and Human Trafficking Statement
• Health & Safety Policy
2021 in focus
250 managers underwent e-learning on competition law,
bribery, corruption and sanctions. The training aimed to
make colleagues better prepared to spot and avoid
accidentally becoming involved in illegal practices.
Governance
Target 2023 2021 2020 2019 2018
Board representation of women (AGM elected members) % 30
33 33 33 33
Independent directors (AGM elected members) % 83 83 83 83
Board nationality - non Danish (AGM elected members) %
17 17 17 0
Attendance at board meetings (all board members) %
100 96 94 91
CEO Pay ratio Ratio
35 27 29 36
Reported whistleblower cases Cases
29 24 18 16
Accounting policies – Governance
Representation of women on Board of Directors: Percentage
of women of the total number of members of the Board of
Directors, excluding staff appointed members
Independent directors: The ratio of shareholder elected
directors that are deemed independent according to the Danish
recommendations on good corporate governance
Board nationality – non-Danish: The ratio of shareholder
elected directors with a non-Danish background
Attendance at board meetings: Percentage of total number of
Board meetings attended. (Not gender specific)
CEO Pay ratio: Total CEO remuneration including granted LTI
divided by average total remuneration for all employees in the
company except EB
Reported whistle-blower cases: The number of cases reported
through the DFDS whistle-blower line in the reporting year.
169
DFDS Annual Report 2021
Management review
67
Data Ethics
Our approach
As a transport and logistics provider, we use data to
maintain and improve customer experience and operational
efficiency. We are committed to ensuring that employees,
customers, and business partners can entrust us with their
data. We are determined to handle data sustainably and
with great care. We recognise that digital development
entails responsibility and transparency. Our Data Ethics
policy sets a vision for working with data ethically and is
based on three principles: Security, Confidentiality and
Integrity.
2021 in focus
We launched the Data Ethics policy appointing CTO Rune
Keldsen as overall responsible for implementation and
progress. The objective for 2022 is to make our three
principles of data ethics operational.
Board of Directors
Our approach
Governance in DFDS is anchored with the Board of Directors
and the Executive Management Team (EMT). The EMT
secures executive ownership of the ESG agenda and
involvement in setting sustainability priorities and driving
implementation.
2021 in focus
With the implementation of the ESG framework there has
been an ambition of increasing the transparency on KPIs
relating to the Board of Directors and governance processes
in general. This has resulted in three additional Governance
KPIs addressing nationality and independence in the board
and the number of whistleblower cases.
Accounting policies – Governance
Representation of women on Board of Directors: Percentage of
women of the total number of members of the Board of Directors,
excluding staff appointed members
Independent directors:
The ratio of shareholder elected directors
that a
re deemed independent according to the Danish
recommendations on good corporate governance
Board nationality
– non-Danish: The ratio of shareholder elected
directors with a non
-Danish background
Attendance at board meetings:
Percentage of total number of
Board meetings attended.
(Not gender specific)
CEO Pay ratio
: Total CEO remuneration including granted LTI
divided by average total remuneration for all employees in the
company except EB
Reported whistle
-blower cases: The number of cases reported
through the DFDS whistle
-blower line in the reporting year.
170
DFDS Annual Report 2021
Management review
172 Fleet list
174 Glossary
175 Definitions
177 DFDS' history
Other
171
DFDS Annual Report 2021
Management review
Fleet list per 31.12.2021
Year built GT Lane metres TEU
3)
Deployment
Freight ferries (ro-ro)
North Sea
Ficaria Seaways 2006/09/11 37,939 4,731 Gothenburg-Immingham
Begonia Seaways 2004/09/14 37,939 4,731 Gothenburg-Immingham
Ark Germania 2014 33,313 3,000 342 Gothenburg-Immingham
Freesia Seaways 2005/09/14 37,939 4,731 Gothenburg-Ghent
Humbria Seaways 2020 60,465 6,690 Gothenburg-Ghent
Primula Seaways 2004/14/16 37,985 4,650 Gothenburg-Ghent
Flandria Seaways 2020 60,465 6,690 Gothenburg-Zeebrugge
Petunia Seaways 2004/13 32,523 3,831 Esbjerg-Immingham
Magnolia Seaways 2003/13 32,523 3,831 Esbjerg-Immingham
Paqize
2)
2010 29,429 3,663 Cuxhaven-Immingham
Selandia Seaways 1998/13 24,803 2,772 Cuxhaven-Immingham
Hollandia Seaways 2019 60,465 6,690 Vlaardingen-Immingham
Scandia Seaways 2021 60,465 6,690 Vlaardingen-Immingham
Suecia Seaways 1999/11/14 24,613 2,772 180 Vlaardingen-Felixstowe
Britannia Seaways 2000/11/14 24,613 2,772 180 Vlaardingen-Felixstowe
Gardenia Seaways
1)
2017 32,336 4,076 Vlaardingen-Felixstowe
Transporter
2)
1991 6,620 1,250 296 Oslo-Immingham
Mediterranean
Tulipa Seaways
1)
2017 32,336 4,076 Istanbul-Trieste
Fadiq
2)
2017 32,770 4,076 Istanbul-Trieste
Ephesus Seaways 2019 60,465 6,690 Istanbul-Trieste
Troy Seaways 2019 60,465 6,690 Istanbul-Trieste
Zeugma Seaways 2008/17/19 34,236 4,350 Istanbul-Trieste
Assos Seaways 2005/19 29,060 3,726 Istanbul-Trieste
Artemis Seaways 2005/20 29,060 3,726 Istanbul-Trieste
Dardanelles Seaways 2006/19 29,060 3,726 Istanbul-Trieste
Cappadocia Seaways 2002/20 26,525 3,214 Istanbul-Trieste
Gallipoli Seaways 2001/20 26,525 3,214 Istanbul-Trieste
Aspendos Seaways 2005/19 29,060 3,726 Mersin-Trieste
Olympos Seaways 2002/20 26,525 3,214 Mersin-Trieste
Eliana Marino
2)
2000 18,265 2,500 Mersin-Trieste
Pergamon Seaways 2013/20 31,595 4,094 Istanbul-Sete
Galata Seaways 2010/19 34,215 4,350 Istanbul-Sete
Myra Seaways 2009/17/19 34,236 4,350 Istanbul-Sete
Sumela Seaways 2008/18/19 34,236 4,350 Istanbul-Sete
Super-fast Baleares
2)
2010 30,998 3,521 Izmir-Tarragona
Mont Ventoux
5)
1996 18,469 2,025 Marseille-Tunis
Super-fast Levante
2)
2001 17,505 2,000 Marseille-Tunis
1)
Chartered (bareboat charter)
2)
Chartered (time charter)
3)
TEU: 20 foot container unit
4)
Short-sea day ferry
5)
VSA: Vessel sharing agreement
with owner/charterer
6)
SCA: Slot charter agreement
with owner/charterer
7)
SCA: Slot charter agreement with DFDS
Year built GT Lane metres TEU
3)
Deployment
Freight ferries (ro-ro)
Baltic
Ark Futura 1996/00 18,725 2,308 246 Klaipeda-Køge-Fredericia
Botnia Seaways 2000 11,530 1,899 300 Karlshamn-Klaipeda
Finlandia Seaways 2000 11,530 1,899 300 Kiel-Klaipeda
Channel
Maxine
2)
2000 21,005 2,475 Sheerness-Calais
Chartered out/laid up
Acacia Seaways 2017 32,770 4,076 Chartered out
Belgia Seaways 2000 21,005 2,475 Off hire
Ark Dania
7)
2014 33,313 3,000 342 ARK mission
Year built GT Lane metres Passengers TEU
3)
Deployment
Freight and passenger ferries (ro-pax)
Channel
Dunkerque Seaways
4)
2005 35,923 2,900 780 Dover-Dunkirk
Delft Seaways
4)
2006 35,923 2,900 780 Dover-Dunkirk
Dover Seaways
4)
2006 35,923 2,900 780 Dover-Dunkirk
Côte Des Flandres
4)
2005 33,940 1,900 2,000 Dover-Calais
Côte Des Dunes
4)
2001 33,796 1,900 2,473 Dover-Calais
Côte d'Opale
1)
2021 40,331 3,100 927 Dover-Calais
Côte d'Albâtre
1)
2006 18,940 1,270 600 Newhaven-Dieppe
Seven Sisters
1)
2006 18,940 1,270 600 Newhaven-Dieppe
Regina Seaways
1)
2010/15 25,666 2,500 600 Rosslare-Dunkerque
Visby
2)
2003 29,746 1,800 400 Rosslare-Dunkerque
Baltic
Victoria Seaways 2009/14 25,675 2,500 600 Kiel-Klaipeda
Athena Seaways 2007/15 26,141 2,593 462 Kiel-Klaipeda
Optima Seaways 1999 25,263 2,300 336 Karlshamn-Klaipeda
Patria Seaways 1991 18,332 1,800 213 Karlshamn-Klaipeda
Kerry
2)
2001 24,418 2,030 412 Karlshamn-Klaipeda
Sirena Seaways 2002/03 22,382 2,056 623 Paldiski-Kappelskär
Aura Seaways 2021 56,043 4,500 600 Newbuilding, en-route Europe
(deployed January 2022)
172
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Management review
Fleet list (continued)
Year built GT Lane metres Passengers TEU
3)
Deployment
Passenger cruise ferries
Pearl Seaways 1989/01/05/14 40,231 1,482 2,168 Copenhagen-Frederikshavn-Oslo
Crown Seaways 1994/05/14 35,498 1,370 2,044 Copenhagen-Frederikshavn-Oslo
King Seaways 1987/93/06 31,788 1,410 1,534 Newcastle-Ijmuiden
Princess Seaways 1986/93/06 31,356 1,410 1,364 Newcastle-Ijmuiden
Sideport ships
Lysvik Seaways
2)
1998/04 7,409 160 Westcoast Norway-Continent/UK
Lysbris Seaways 1999/04 7,409 160 Westcoast Norway-Continent/UK
Container ships
Meandi
5)
2007 8,246 962 Oslo Fjord-Rotterdam
Energizer
5)
2004 7,642 750 Oslo Fjord-Rotterdam
Sven D
6)
2005 7,720 809 Oslo Fjord-Rotterdam
NCL Svelgen
6)
2005 9,990 QQ Other / West coast
NCL Haugesund
6)
2004 6,704 QQ Other / West coast
NCL Averøy
6)
2006 9,990 QQ Other / West coast
Samskip Endeavour
5)
2011 7,852 812 Rotterdam-Ireland
Samskip Express
5)
2006 7,852 803 Rotterdam-Ireland
JSP Rider
6)
2006 9,340 804 Rotterdam-Ireland
Miriam
6)
2010 7,852 814 Rotterdam-Ireland
Elbcarrier
6)
2007 8,243 974 Rotterdam-Ireland
CT Rotterdam
6)
2008 8,246 974 Rotterdam-Ireland
68%
24%
7%
1%
●
Freight ferries (ro-ro)
●
Freight and passenger ferries (ro-pax)
●
Passenger cruise ferries)
●
Sideport and container ships
Gross tons fleet distribution, end 2021
1)
Chartered (bareboat charter)
2)
Chartered (time charter)
3)
TEU: 20 foot container unit
4)
Short-sea day ferry
5)
VSA: Vessel sharing agreement
with owner/charterer
6)
SCA: Slot charter agreement
with owner/charterer
7)
SCA: Slot charter agreement with DFDS
Ownership shares of fleet, end 2021
Sideport ships 50%
Freight and passenger ferries (ro-pax) 100%
Freight and passenger ferries (ro-pax) 53%
Freight ferries (ro-ro) 73%
Average age of owned vessels in route network, end 2021
Passenger cruise ferries 32
Freight and passenger ferries (ro-pax) 16
Freight ferries (ro-ro) 13
173
DFDS Annual Report 2021
Management review
AGM:
Annual general meeting
BAF:
Bunker adjustment
factor, surcharge for price
changes in bunker fuel oil
Bareboat charter:
Lease of a ship without
crew for an agreed period
Bunker:
Oil-based fuel
used in shipping
Charter:
Lease of a ship
for an agreed period
Charter-out:
Leasing of a
ship to an external party
for an agreed period
Door-door transport
solution:
Transport of
goods from customer
pick up point to final
destination by a freight
forwarder. A freight
forwarder typically uses
third-party suppliers,
for example hauliers,
rail operators and ferry
MGO:
Marine gas oil, also
known as marine diesel
with sulphur content at
or below 0.1%
Non-allocated items:
Corporate costs not
allocated to divisions
Northern Europe:
The Nordic countries,
Benelux, the United
Kingdom, Ireland, France,
Germany, Poland, the
Baltic nations, Russia
and other SNG countries
Power-to-X:
Process
where electricy is being
converted to sustainable
fuels for example via
electrolysis
Ro-pax:
Combined freight
and passenger ferry
Ro-ro: Roll on-roll off:
Freight ferry on which
freight is driven on and
off, e.g. trailers and other
unitised freight
operators to carry out
the transport
ESG:
Environment, Social
and Governance. Frame
-
work for activities and
reporting of Corporate
Social Responsibility and
other non-financial areas
Ferry:
Ship carrying
passengers and their
cars and freight that
can be rolled on and
off, typically between
only two ports, and
hence over reasonably
short distances, on a
fixed sailing schedule.
On board facilities for
passengers and truck
drivers. Overnight ferries
have cabins while day
ferries usually have no
cabins
Green transport:
Transport by ferries
or trucks powered by
electricity or non-fossil
fuels
Short sea:
Shipping
between destinations
with a duration of typi
-
cally 1-3 days. Converse
is deep-sea shipping
between continents with
a duration of weeks
Sideport ship:
Ship
with ramps for loading/
unloading via ports in
the ship’s side
Scrubber:
Exhaust gas
cleaning system that
removes suplhur oxides
from a vessels boiler
exhaust gases
Space charter:
Third-
party lease of space on a
ship deck
Stevedoring:
Activities
related to loading and
unloading ships in a port
terminal
Intermodal:
Transport
solution that combines
different transport
modes (road, rail, sea)
Lane metre:
An area
on a ship deck one lane
wide and one metre long.
Used to measure freight
volumes
Logistics solution:
Logistics covers
solutions that require
more than just sea or
land-based transport
as this will typically be
combined with storage,
cross docking of consign
-
ments and distribution.
Moreover, information
processing can also be
provided, e.g. booking
and tracking
Lo-lo: Lift on-lift off:
Type of ship for which
cargo is lifted on and off,
e.g. containers
Time charter:
Lease of
a ship with crew for an
agreed period
Tonnage tax:
Taxation
levied on ships according
to ship tonnage, i.e.
weight of ships
Trailer:
An unpowered
vehicle for transport of
freight pulled by a truck
Vessel sharing agree-
ment/slot charter:
Agreement between two
or more parties on the
distribution and use of
a ship’s freight-carrying
capacity
Whistleblower scheme:
System set-up that
enables employees or
stakeholders to report
anonymously on poten
-
tail breaches to rules,
guidelines or regulation
Glossary
174
DFDS Annual Report 2021
Management review
Financial definitions
Operating profit
before depreciation
(EBITDA)
Profit before deprecia-
tion and impairment on
non-current assets
Operating profit (EBIT)
Profit after depreciation
and impairment on
non-current assets
Operating margin
Operating profit
(EBIT) before
special items
Revenue
Net operating profit
after taxes (NOPAT)
Operating profit (EBIT)
minus tax on EBIT
Invested capital
Net working capital
(non-interest bearing
current assets minus
non-interest bearing
current liabilities plus
non-current prepaid
Earnings per share (EPS)
Profit for the year
excluding non-con-
trolling interests
Weighted average
number of circulating
shares
P/E ratio
Share price at year-end
Earnings per share (EPS)
FCFE yield
Adjusted FCFF
including interest
etc. received
and paid
Market value at
year-end plus non-
controlling interests
Total distribution yield
Total distribution
to shareholders
Market value at
year-end plus non-
controlling interests
Roundings may in general
cause variances in sums and
percentages in this report.
costs minus pension and
jubilee liabilities and
other provisions) plus
non-current intangible
and tangible assets
Return on invested
capital (ROIC)
Net operating
profit after taxes
(NOPAT)
Average invested
capital
Weighted average cost
of capital (WACC)
Average capital cost
for net interest-bearing
liabilities and equity,
weighted according to
the capital structure
Free cash flow, FCFF
Cash flow from operating
activities, gross, minus
paid tax and cash flow
from investing activities
Cash pay-out ratio
Total distribution
to shareholders
Cash flow from
operating activities,
net
Dividend return
Paid dividend per share
Share price at beginning
of year
Equity per share
Equity excluding
non-controlling interests
at year-end
Number of circulating
shares at year-end
Price/book value
Share price at year-end
Equity per share at
year-end
Adjusted free cash flow,
FCFF
Free cash flow, FCFF,
minus payment of lease
liabilities and interest
Return on equity
Profit for the
year excluding
non-controlling
interests
Average equity
excluding non-
controlling interests
Equity ratio
Equity
Total assets
Net interest-bearing debt
Interest-bearing
non-current and current
liabilities minus inter-
est-bearing non-current
and current assets
Market value
Number of shares,
ex. treasury shares,
year-end times share
price at year-end
No. of ships
Owned and chartered
ferries and other ships,
including slot charter
and vessel sharing
agreements
x 100
x 100 x 100
x 100
x 100
x 100
x 100
175
DFDS Annual Report 2021
Management review
ESG definitions
Total number of ferry
operating days
Total number of deploy-
ment days for ferries in
operation
CO2 emissions per GT
nautical mile
Emissions measured as
gCO2 per gross tonnage
nautical mile for ferries
in operation
Total marine fuel
consumption
Total consumption of
heavy fuel oil (HFO) and
marine gas oil (MGO) for
ferries in operation
Fuel consumption per
nautical mile
Total consumption of
heavy fuel oil (HFO) and
marine gas oil (MGO) per
nautical mile for ferries
in operation
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
Fuel consumption per GT
nautical mile
gCO2 per gross
tonnage-nautical mile
Spills (>1 barrel)
Incidents of oil spills
larger than one barrel
into the sea from ferries
in operation
Average number of
employees (FTE)
Average fulltime
equivalent number of
employees
Total workforce gender
ratio
Percentage of women in
FTE workforce
Senior management
gender ratio
Percentage of women of
total number of senior
management positions
defined as EVPs (Execu-
tive Vice Presidents) and
VPs (Vice Presidents)
Representation of
women on Board of
Directors
Percentage of women of
the total number of
members of the Board of
Directors, excluding staff
appointed members
Attendance at Board
meetings
Percentage of total
number of Board
meetings attended. (Not
gender specific)
Manager gender ratio
Percentage of women of
total number of manage-
ment positions, excluding
senior management,
defined as positions with
responsibility for at least
one other employee
Employee gender ratio
Percentage of women of
number of employees,
excluding senior manage-
ment and managers
At sea
Percentage of women
of number of employees
at sea
On land
Percentage of women of
number of employees on
land
176
DFDS Annual Report 2021
Management review
Moving for
all to grow
since 1866
For more than 155 years, DFDS has enabled trade and
travel since the company was founded by C.F.Tietgen’s
merger of four Danish steamship companies. Goods and
coal from the UK, the world’s industrial locomotive at the
time, were sailed to Scandinavia and other regions where
markets for textiles and energy, amongst other things, were
developing. The new shipping lines conversely created
access for farmers in these regions to supply the UK’s
rapidly growing market for food and raw materials.
DFDS developed quickly in line with the growth it helped
create. Around 1900, DFDS’ steam ships also connected
farmers around the Black Sea with the new Russian
industrial area around St. Petersburg. Routes were launched
to the USA bringing back soya cake as feed to European
farmers. This supported their transformation from exporters
of livestock to producers and exporters of processed prod
-
ucts like butter and bacon. DFDS also opened new routes to
connect Danish and Scandinavian cities with each other and
the world. All this was based on a fleet of more than 120
ships, among the largest in the world at the time.
For many years DFDS transported emigrants seeking a
better future to the USA. During the world wars, DFDS kept
up supplies of critical food and coal to people in Europe.
Jobs and industry were kept alive.
After the second world war, DFDS’ fleet, many now
powered by diesel engines, kept moving: Goods from USA
to Europe, people between countries, goods between UK
and mainland Europe, between the Mediterranean and
Scandinavia, and to and from Iceland. At the end of the
sixties, DFDS were the among the first to develop a roll-on-
roll-off solution, paving the way for more efficient shipping
of freight units such as trailers carrying industrial cargo.
The logistics activities developed from 1972 with the same
purpose. Connecting businesses with door-door solutions
to facilitate trade and growth. When Dan Transport
was acquired in 1998, DFDS became one of the largest
forwarding and logistics companies in northern Europe.
Aura Seaways on her way from China
to the Baltic Sea where she was
deployed on the Karlshamn-Klaipeda
route in late January 2022.
The merged company, DFDS Dan Transport, was sold in
2000 to focus the company’s resources on developing the
ferry route network for freight and passengers.
This strategy was accelerated by the acquisition of
Norfolkline in 2010 and, in addition, the logistics arm was
restarted to focus on transport corridors overlapping the
route network. In 2018, DFDS again expanded into the
Mediterranean through the acquisition of Turkey’s largest
freight ferry operator, U. N. Ro-Ro.
Today, DFDS is one of Europe’s largest combined ferry
and logistics companies with a continued clear purpose of
moving for all to grow.
* Abbreviation in Danish for The
United Steamship Company.
177
DFDS Annual Report 2021
Management review
Financial calendar 2022
23 March
AGM
11 May
Q1 report 2022
16 August
Q2 report 2022
17 November
Q3 report 2022
Addresses of DFDS’ subsidiaries, locations and offices are available from www.dfds.com
DFDS headquarter, Marmorvej 18 (from March 2022), DK-2100 Copenhagen Ø · T +45 3342 3342 · F +45 3342 3311 · dfds.com · CVR 14 19 47 11
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