DFDS Group

Ladies and gentlemen, welcome to the DFDS Q2 Report 2026 conference call. I'm Lorenzo, the chorus call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Michael Hansen, CEO. Please go ahead, sir.

Thank you very much. Good morning and welcome everyone to the DFDS Q2 call. I'm Michael Hansen, the CEO of DFDS, and today I'm joined here by our CFO, Karen Boesen, and our Head of Investor Relations, Soren Brondholt. So today is my first conference call together with all of you in GFGS, so just a brief introduction. I've spent most of my career in international operationally complex B2B businesses, most recently as CEO of Hemble, and before that almost 20 years with the April Moller Merce Group. Much of that work has been about transformation, performance improvement, and making clear choices about where a company can create the most value. So my leadership style is quite straightforward. Facts, transparency, accountability, and then listening, but listening that leads to decisions and actions. So I've been with DSTS for a little over a month now. Obviously not long enough to have all the answers, but on the other hand, long enough to have some initial views. And I see a company with very strong assets, leading positions in important markets, strong customer relationships, Great operational capabilities and a lot of talented people. At the same time, we have also very clear challenges around our performance, complexity, capital allocation, and more fundamentally making sure that we are absolutely clear on where DFDS should compete and how we can be different for our customers. So we need to do two things in parallel. We need to continue to improve our business and deliver on the areas that are within our control today. and we need to take a step back and make sure that we have the right long-term direction for DFDS. We'll come back to both of these elements during the presentation this morning. If we turn to the next page, I'll just briefly take you through the agenda of the call. I'll just do a very brief intro now before elaborating a little bit more on the strategic review that we have communicated that we're commencing here in the middle of August. Kahn will then take us through the Q2 performance, including the ESG numbers, after which I'll sum it up through our outlooks and priorities, and we'll open up for Q&A towards the end. Going to the next page. So before we go into all the numbers, I just want to make a brief reflection on why I believe that DFDS truly matters. If we look across Europe, supply chains, they depend on reliability. Factories, retailers, communities, and millions of passengers rely on goods and travel arriving on time. And behind that, we have our 16,000 DFDS colleagues who keep Europe connected, north to south, east to west. So we don't just move freight or passengers, but we actually enable travel, trade, and economic activity across the continent. Thousands of companies rely on us to keep their operations running and that responsibility is truly what defines who we are and why the FDS plays such an important role in the European logistics and mobility infrastructure. If we turn to pitch four, then it's also been very clear during my onboarding that one theme has been consistently coming up. Ambiguity. A lack of one clear direction. And that raises some fundamental questions to all of us. Who is DFDS? Where should we invest? And how do we create competitive advantage? How do we best combine our ferry and logistics businesses? And what kind of company do we really want to build over the next decade? That's not academic questions. They're questions that need to guide decisions on fleet renewal, our footprint, our technologies, and not least our capital allocation. And without that clarity, it's really hard to make consistent choices. So that's why we have launched a strategy review. And the goal is not just to get a fancy document, but it's really about clarity for our business. It's about having one ambition and one direction for GFTS. Clearer understanding of our customers, for our colleagues and for our investors as well about where we're heading. So we'll complete this review within the next six months and it will include financial ambitions as well. In parallel with that, we will continue to drive the needed financial performance improvements through the already established programs. Turning to page five. So with strategic clarity, it all equally needs to be met also with clarity in how we work together. And with 16,000 colleagues across Europe, we need shared expectations or what I call the non-negotiables. Number one, safety. It is the number one priority for this company across our vessels, our terminals, warehouses, trucks, and offices. Collaboration is the second one. We'll succeed across our boundaries and not within silos, right? With a mindset of high challenge, high support. Number three, ownership and discipline. To make decisions, take responsibility, follow through and then operate with transparency and not least with integrity. Number four, our customers. Every role across DFDS somehow contributes to the customer experience, which is our foundation for future sustainable growth. So we will succeed if we act as one company with a shared commitment, shared accountability and a collective success. So with this brief introduction to myself and to the initial perspectives of DFDS, we'll now go in to the Q2 results. Turning to the next page. We'll start out on page seven with the Q2 safety performance. And I'm sad to report that we have had a fatality in May of 2026 involving a Dutch DFDS colleague, a truck driver, who during unloading operation on board one of our ferries in Dunkirk. The circumstances leading to this tragic accident are still being investigated by the authorities and in close collaboration with DFDS. Following the investigation's outcome, The learnings will naturally be integrated into our DFDS Safety First program to prevent a similar accident in the future. Looking at the sea and land-based safety, there's no material changes to the LTIF compared to last year. As part of the strategy review, we will also revisit our targets for safety performance because we have to do much better. With that, I'll pass it over to Karen to take us through the numbers.

Thank you, Michael, and good morning to everyone. So, we delivered a Q2 in line with our plan, which is satisfying, and we are happy with that progress. It's a Q2 where both divisions delivered significant improvement year on year. Various improvements are supported by the lower net bunker cost. and Logistik demonstrated strong progress in their BOOTS projects. Unfortunately, our Q2 result is also impacted by a one-off of 53 million. It's a one-off that relates to a litigation case that started back in 2015 and now has had a ruling in the opposite direction as the previous two rulings. So, result impacted negatively by 53 million, unfortunately. Moving on to our turning point. They all progressed in Q2. We saw continued progress in our Mediterranean ferry business. Our ferry rates are sustained. Jersey performance improved versus last year. We saw logistic boost projects continue to deliver quarter-on-quarter impact. And we are on track to deliver our 300 million cost program with over 250 million delivered to date. Finally, TESS is also progressing, but more needs to happen there. Looking ahead, our earnings outlook and financial leverage improvements are on track as we will report in more detail in the coming slides. We do see a market that is at the risk of some downside with the high oil price levels that we see across the globe. Our fuel cost recovery is in focus across our network and to ensure a stable level there, we have hedged Some of our oil price exposure in the second half of 2026 to reduce this uncertainty. Moving into the results, starting with page 9, our Q2 revenue. Our Q2 revenue growth was driven by fuel charges due to the elevated oil product prices, both in ferry and logistics, but both divisions also saw some small underlying revenue growth when you disregard the fuel surcharges. and a satisfying and improved growth in the revenue compared to our previous quarters where we have been more flat. Turning to page 10 and a quick walkthrough of the key elements in our Q2 income statement. In addition to the 10% revenue growth of the quarter, we also delivered a 35% increase in the EBITDA level. Our EBITDA was up with more than 300 million for the quarter. At the EBIT level, we have a quarter where we are up 291 million to 454 million EBIT for the quarter, which is more than double compared to the same quarter last year. If we look at our financial costs, we also saw a good improvement. We saw a reduced interest expense in the quarter of 24 million. And if you clean off the one of 9 million interest costs relating to the litigation case that I just mentioned, The reduction is actually 33 million or 16% reduction in our interest costs. This is both driven by lower absolute debt, but also lower interest cost levels. Turning to page 11, we zoom in on the FAERI activities. As already stated, we delivered a high year-on-year improvement with an EBIT of 423 million for the quarter, up 237 million compared to last year's Q2. This is driven by lower net bunker cost expenses, but also an improvement in the business units, where the key highlights are, and we have listed them on the slide, strong passenger results from channels, good freight rates, and a jersey improvement compared to same quarter last year. Mediterranean, with the capacity taken out, we see an utilization that is overall up, Our rail services, which is associated with the ferry services from Turkey to Europe, also improved, and although we do see some slowdown in the Turkish volumes overall. Both North Sea and Baltic saw some positive volume and rate development, but we are also challenged by higher cost in those areas, which luckily not offset all the positive improvements we see. And finally, Strait of Gibraltar were more or less flat with fewer sailings because of weather. We also have provided the adjusted EBITDA excluding the items that I have mentioned, which of course underlines that the improvement on the underlying is higher than what we report in the actual accounts. Turning to page 12 and looking at our logistic results for the quarter, we had a strong underlying business improvement in logistics this quarter. Our EBITDA is up 39%. and EBIT is up 52 million to 85 million for the quarter, also here more than a doubling of the results the same quarter last year. This is driven by strong performance recovery in both Nordic and continent. In continent, the recovery from last year's foot and mouth disease is also contributing here. And in UK and Ireland, business continues to deliver stable performance. Finally, our business unit test, our Turkish and Europe sales logistics, Improved on a like-for-like business basis, but we continue to have challenges that we will have to address in an even more rigorous way, and we'll come back to that later in the call. Turning to page 13, cash flow, we saw a strong cash flow generation for the quarter. This was driven by the better operating cash flow, the higher EBITDA. but also working capital where we both have seasonality impacts and we also have good impact from our working capital initiatives. The seasonality impacts is mainly two parts. It's our build up of prepayments from passengers up to the high summer season and it's a mechanical thing around the ETA charges which is cleared with the EU in queue free every year. Our investments for the quarter were 316 million gross and 247 million net when you take into account our asset sales of 69 million. They were mainly related to ferry dockings and acquisition of transport equipment. In total, our adjusted free cash flow for the first half year of 2026 amounts to just over a billion, which is a good result. and turning to page 14, looking at our financial leverage. With the reduction in net interest bearing debt over the past 12 months of more than 2 billion, our debt equity ratio is now back at 50-50 and combined with the improved earnings levels, I'm happy to report that our leverage ratio in Q2 was down at 3.4, which is within our target range. Finally, turning to page 15, a word on our ESG results for the quarter. First, our emission intensity, which increased by the quarter, unfortunately. Our absolute emission levels remains at level with last year, but due to the fewer sailings over the quarter, so in absolute terms, that means that our intensity per sailing goes up. In terms of e-truck fleet, we now have 151 electrical trucks in our fleet deployed around Europe. which adds to lower emissions, but also provides some cost reductions where we are exempted from road tolls. Finally, looking at our gender diversity, our overall rate of women remained stable, whereas we saw a good progress in women in non-office based positions increase from 10 to 14%. And with that, I will hand back to you, Michael.