DFDS EXPANDS LOGISTICS NETWORK TO TÜRKIYE - Seite 2

The addition of the Company adds road transport to DFDS’ Mediterranean ferry network thereby extending the proven northern European ferry/road business model to this region. DFDS’ logistics network is in addition expanded across Europe and the existing transport network is connected to Türkiye thereby enabling DFDS to offer end-to-end transport and logistics solutions between Türkiye and Europe directly to end customers.

The Company’s transport network builds on a partnership since 2019 with DFDS through a long-term customer agreement providing stable access to ferry capacity in the Mediterranean route network. The agreement also extends access to third-party rail transport from arrival ports to select European destinations. Road-only transport and additional third-party rail transport solutions are offered for destinations outside the ferry network’s catchment areas and for transports requiring faster delivery times.

Business and integration plan to improve financial performance
Due to challenging market conditions, including loss of market share, the Company’s EBIT-margin declined from 4.8% in 2022 to 2.5% in 2023.

The business and integration plan’s financial objective is to improve the EBIT-margin to around 5% by 2027 through a three-phased plan:

Phase 1 (year 1): Commercial and operational focus to increase volume throughput and improve equipment utilisation by initiating sale of transports to/from Türkiye by DFDS’ existing northern European network. Grow volumes to Türkiye from acquired European offices. Insource agency services to own existing network.

Phase 2 (year 1-2): Integrate existing and acquired European networks to gain scale benefits, including improved utilisation of equipment/facilities and consolidation of offices/facilities. Move select volumes to ferry/rail from road. Integrate customs organisations.

Phase 3 (year 2-3): Network optimisation and sales to key customers of contract logistics products to complement transport solutions (FTL/LTL).

In parallel with the integration of operations, it-systems will be integrated over expectedly three years. The two major integrations are replacement of transport management systems and ERP systems with systems used by DFDS.

The Company will become part of the Logistics Division. A detailed business and integration plan, including expected synergies, will be disclosed in connection with the closing of the transaction.

Transaction structure and financing
DFDS acquires the Company for a debt-free price of DKK 1.9bn (EUR 260m) equal to an EV/EBITDA multiple of 7.6x based on 2023 earnings and an EV/Sales multiple of 0.55x based on 2023 sales.