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DFDS annual report 2009 STRATEGY 9
Implementation
GROUP MANAGEMENT
Implementation of the strategy involves three primary focus areas:
n Expansion of the route network to more regions in Northern Europe,
particularly in and around the Baltic Sea
n Integration of passenger activities in the network
n Securing higher volumes.
RO-RO
SHIPPING
CONTAINER
SHIPPING
PASSENGER
SHIPPING
TERMINAL
SERVICES
TRAILER
SERVICES
The route network will mainly be expanded through acquisitions, which
will also serve to consolidate the network in selected areas. Both these
objectives are supported by the acquisition of Norfolkline.
Approval of the Norfolkline acquisition will limit the need to make
further major acquisitions related to the United Kingdom and the
North Sea. Future expansion of the route network will therefore
focus on other European regions in which DFDS will be able to reap
benefits from a larger network.
DFDS’s passenger competences, which have been built up primarily
through cruise-ferry activities, are now to a greater extent employed
across both cruise-ferry and ro-pax concepts. This development will
continue, and it is expected that growth within passenger activities will
be driven first and foremost by ro-pax-oriented concepts.
Securing volumes for the route network is done in three ways.
Firstly, co-operation agreements and relationships with transport
companies will continue to be developed to mutual advantage.
Secondly, the aim is to continue to grow the proportion of industrial
logistics through more and longlasting partnerships. Thirdly, DFDS’
own trailer activities will be selectively expanded to add volume on
specific routes, which the expected acquisition of Norfolkline also will
contribute to.
Business structure
DFDS’ business structure consists of five areas: The business areas
Ro-Ro Shipping, Container Shipping and Passenger Shipping are
responsible for different activities on the route network as a whole,
while the business areas Terminal Services and Trailer Services
support the network.
The sale of freight solutions across business areas and the network
in general is co-ordinated by a separate organisational unit, Freight
Sales Solutions.
Financial targets
FREIGHT SALES SOLUTIONS
GROUP FUNCTIONS
DFDS’ long-term financial objective is a return on invested capital
(ROIC) on a level that exceeds the Group’s cost of capital by 30-50 %.
The cost of capital (WACC) in the beginning of 2010 was calculated at
6.5 %. This includes a risk-free interest rate of 3.75 %, equivalent to a tenyear
Danish government bond, a market risk premium of 5.0 %, a beta
value of 0.94, a borrowing rate before tax of 5.0 %, a tax rate of 10.5 %
and a capital structure with a 50/50 distribution. The capital structure
is the ratio between equity and net interest-bearing debt. The management
report contained in this annual report for 2009 outlines the
current and long-term achievement of these objectives.
It is furthermore an objective to maintain a solidity of
approximately 40 %.