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DFDS annual report 2009 Management Report 11
When the transaction was announced it was contingent on a condition
concerning approval by DFDS’ extraordinary general meeting
to approve the rights issue and the directed rights issue. Both issues
were approved at the extraordinary general meeting held on 11
January 2010.
Strategy follow-up
The expected acquisition of Norfolkline represents the initial culmination
of DFDS’ network strategy, which was drawn up in 2007 and based
on a vision of creating a European, sea-based transport network. The
strategy and its objectives are described in greater detail on page 8-9.
Strategically, 2010 and 2011 is expected to be dominated by two
main objectives: integrating DFDS and Norfolkline, and improving
ROIC in DFDS’ existing activities.
As announced at the time of the acquisition, integration of the
two companies is expected to last two to three years. However,
most of the process will be completed in the first two years. During
this period, DFDS’ resources will primarily be focused on integration,
so no major acquisitions or investments are expected in this period.
However, opportunities to pursue acquisitions arise continuously, and
smaller acquisitions that underpin the network strategy cannot be
ruled out.
The second main strategic objective relates to achieving a higher
ROIC from existing activities. This is dependent partly on implementation
of structural changes to activities, as well as ongoing operational
changes and improvement in the difficult market conditions caused by
the recession.
DFDS implemented a streamlining process in 2008 and 2009, as
outlined below, and Ro-Ro Shipping’s tonnage has been modernised. A
recovery in the freight market and subsequent higher volumes are not
expected to result in a need for new tonnage in 2010 or 2011.
It is foreseen that the planned integration of Norfolkline will help
to solve structural earnings problems on routes in the southern part
of the North Sea. In addition, there is also a need to restructure certain
routes in the Baltic Sea and phase out excess tonnage.
A more focused financial control process was initiated at the end
of 2009 with the aim of intensifying focus on areas of activity with low
earnings. This process is expected to help improve operations in all
business areas.
REVENUE PER
BUSINESS AREA
2009
RETURN ON INVESTED CAPITAL (ROIC)
AND CAPITAL COST (WACC)
(%)
9
8
7
6
5
4
RO-RO SHIPPING (42 %)
CONTAINER SHIPPING (16 %)
PASSENGER SHIPPING (23 %)
TERMINAL SERVICES (8 %)
TRAILER SERVICES (11 %)
3
2
1
0
2005
2006
2007
2008
2009
WACC
ROIC