DFDS AGREES NEW TERMS AND COMPLETES TURKISH LOGISTICS ACQUISITION

15 Nov 2024 12:53 CET

COMPANY ANNOUNCEMENT no. 83 - 15 November 2024



* DFDS acquires international transport network connecting Türkiye and Europe
from Ekol Logistics
* Acquisition replicates DFDS' ferry/road business model to the Mediterranean
and connects Türkiye to DFDS' existing logistics network
* Network expected revenue for 2024 of DKK 3.3bn and 3,700 employees
* Share purchase agreement revised since 1 November 2024
* Transaction enterprise value of DKK 1.8bn corresponding to 0.55x
EV/Sales for Q3 2024 LTM
* Investor/analyst conference call Friday 15 November 2024 at 1.30pm CET, see
registration details below.


DFDS has today completed the acquisition of the international transport network
of Ekol Logistics (the "Company"). Ekol Logistics is a leading Turkish transport
and logistics company headquartered in Istanbul.

The acquisition is based on a revised set of terms agreed since the termination
of the share purchase agreement on 1 November 2024. The main change in terms
relates to the amount of debt included in the transaction. In addition, DFDS now
has an option to extend the duration of the terminal agreement with Yalova Port.

The Company transports goods between Türkiye and Europe with own offices and
facilities in 10 European countries. More than half of transports provided are
intermodal using combinations of road, ferry, and rail making the Company the
largest customer of DFDS' Mediterranean ferry route network.

"DFDS' acquisition of Ekol's international transport network greatly enhances
our ability to provide a reliable and efficient transport infrastructure
supporting Türkiye's continued growth as a manufacturing hub. Given the revised
terms, well prepared business plans, and the strength of our expanded network,
we are well positioned to protect and grow our Mediterranean business", says
Torben Carlsen, CEO of DFDS.

"The strategic logic of the sale of Ekol Logistics' international transport
network to our longstanding partner DFDS is compelling. On behalf of all my
great colleagues, I'm therefore very pleased we came together again and forged a
revised agreement. A new growth story can begin", says Ahmet Musul, founder and
Chair of the Board of Directors of Ekol Logistics.

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.

Strategic fit and business model
The acquisition is fully aligned with DFDS' transport network strategy focused
on moving goods in mainly trailers by ferry, road, and rail, and on offering
complementary logistics solutions.

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.

Moreover, DFDS' logistics network will be expanded across Europe and connected
to Türkiye. This provides DFDS access to offer end-to-end transport and
logistics solutions directly to end customers trading between Türkiye and
Europe.

In addition, the acquisition expands DFDS' presence in a high-growth region
supported by nearshoring of supply chains closer to Europe.

Business and integration plan to improve financial performance
The Company's EBIT-margin declined to 2.5% in 2023 and for 2024 the Company is
expected to report a loss.

The key drivers of the Company's earnings development comprise both commercial
and operational issues, including a loss of market share and margin pressure due
to changing trade flow balances between Türkiye and Europe as Turkish import
volumes slowed down in 2024 while export volumes increased.

The business and integration plan's financial objective is unchanged since April
2024 to improve the EBIT-margin to around 5% by year-end 2027. This includes a
net positive impact from synergies and integration costs. The latter are mainly
related to system integrations. A break-even result is expected to be achieved
by year-end 2025 while annual revenue growth is expected to exceed 5%.

Extensive integration preparations have been made since April 2024. A management
organisation will be established comprising managers from both companies.
Detailed plans are in place to drive the earnings turn-around and the
integration focused on three phases:

Phase 1 (year 1): Commercial and operational focus to increase volume throughput
and improve equipment utilisation by enhancing sale of transports to/from
Türkiye by leveraging DFDS' existing northern European network. Grow volumes to
Türkiye from acquired European offices. Align operations to change in trade
flows. Improve cost coverage of pricing/surcharges. Improve equipment operating
efficiency and road/ferry/rail coordination.

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

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

The Company will be managed as a separate business unit as part of the Logistics
Division, although some country organisations will be integrated in the existing
Continent business unit.

Transaction structure and financing
DFDS acquires the Company for a debt-free price of DKK 1.8bn (EUR 240m) equal to
a EV/Sales multiple of 0.55x based on revenue for Q3 2024 LTM. The Company has
since April 2024, due to the decline in earnings and asset investments, incurred
additional debt that has been excluded from the revised agreement. The
transaction's equity value of DKK 1.5bn (EUR 205m) is unchanged compared to
April 2024.

The transaction is financed by a combination of loan financing and use of
existing cash funds.

All relevant regulatory approvals have been received.

Investor conference call today
An investor and analyst conference call will be held on 15 November 2024 at
1.30pm CET.

Please register for the call via this link
(https://services.choruscall.it/DiamondPassRegistration/register?confirmationNum
ber=7378174&linkSecurityString=112f0dc0da). Live streaming is available from
this link (https://getvisualtv.net/stream/?dfds-cvvtwoqm4u).

About the Company's international transport network
The Company transports goods for global manufacturers between Türkiye and Europe
using primarily trailers to minimise trip days as most goods carried are time
sensitive.

The network is set up for both intermodal and road-only transports using mostly
inhouse haulage and ferry/rail transport provided by third-party ferry and rail
operators. Around 80% of all transports combine transport modes. DFDS is the key
provider of ferry transport between Türkiye and Europe for the Company.

Customers are mainly European and global manufacturers with production or
assembly plants in Türkiye and Europe. Primary sectors served are automotive,
industrial parts, and textiles/garments.

The network offers customers both full-load (FTL) and part-load (LTL) transports
with a split of around 60/40 as well as complementary services, e.g. customs.
The top three transport flow corridors are Türkiye-Germany followed by Spain and
France. Own offices and facilities are operated in 10 European countries to
service customers and haulage operations.

The Company operates around 5,800 owned equipment units, including 1,300 trucks,
3,900 trailers/swap bodies, and 600 containers. There are 26 facilities in
Europe with a total area of 120,000 sqm. Around 75% are cross-docking terminals
for LTL operations and the remainder are warehousing with storage capacity.


Contact

Torben Carlsen, CEO +45 33 42 32 01

Karen Boesen, CFO +45 20 58 58 40

Søren Brøndholt Nielsen, IR +45 33 42 33 59

Dennis Kjærsgaard, Media +45 42 30 38 47


About DFDS

We operate a transport network in and around Europe with an annual revenue of
DKK 28bn and 14,000 full-time employees.

We move goods in trailers by ferry, road & rail, and we offer complementary and
related transport and logistics solutions.

We also move car and foot passengers on short sea and overnight ferry routes.

DFDS was founded in 1866 and headquartered and listed in Copenhagen.


This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act

More information:
Access the news on Oslo Bors NewsWeb site

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