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DFDS announces new plan to adapt to market conditions amid COVID-19 pandemic.

NORDIC BUSINESS REPORT-June 30, 2020-DFDS announces new plan to adapt to market conditions amid COVID-19 pandemic

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DFDS A/S (CPH:DFDS), a Danish international shipping and logistics company, announced on Monday that since the outbreak of COVID-19 in mid-March 2020 and the initial actions taken to adapt operations, a plan with a longer perspective has been developed for implementation in the coming months.

Under these new initiatives, industry sales of large freight customer solutions, involving both ferry and logistics operations, will be combined in one unit to drive sales across the DFDS organisation. This unit will be part of the Logistics Division. In addition to creating a stronger commercial focus, overlapping functions will be streamlined.

Consequently, the Ferry division will focus on delivering reliable and cost-efficient services to freight forwarders and hauliers. Freight and logistics operations will be adapted to new market conditions, including optimisation of port terminal and haulage operations.

Also, passenger concepts have been aligned to changes in travel market dynamics with a higher share of passengers that primarily travel for transport purposes, including holiday travel. Onboard concepts and offerings have been simplified.

In addition, a range of improvement and efficiency projects will simplify and focus business support functions. This includes a reshaped and integrated IT and digital organisation, as well as a downsizing of various functions.

These initiatives are expected to generate annual cost savings of up to DKK 250m. In 2020, a positive financial impact of DKK50m to DKK75m is expected.

DFDS added that the adaptation to the new market conditions will lead to around 650 employees leaving DFDS in the coming months, 200 of whom are employed in Denmark. DFDS currently employs around 8,600 people. A one-off redundancy cost of around DKK 100m is expected in 2020 and will be recorded under Special items. On 29 June 2020 , DFDS will exit the Danish furloughing scheme.

Further, DFDS maintained its outlook for EBITDA before special items of DKK 2bn, which was reduced on 7 May 2020. Uncertainty remains exceptionally high, particularly for passenger travel, and this may still cause the outlook and its assumptions to change significantly in the second half of the year, the company added.

(EUR1.00=DKK7.45)

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Publication:Nordic Business Report
Date:Jun 30, 2020
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