Thank you. Good morning.

Welcome to the DFDS Q1 2026 conference call. I'm joined here by Søren Brøndholt, our Head of IR.

Earlier this year, we labeled 2026 a turning point for DFDS. I'm pleased to report today that our Q1 results confirm that this is the case.

We're turning around and making steady progress on transitioning DFDS to a higher level of financial performance. In addition, we are also making progress on improving our financial leverage, and as you may have seen this morning in the Q1 report, we have firmed up our full-year expectation for the adjusted free cash flow as well.

We'll now dive into a presentation of of the numbers and we'll start looking at slide 3. As mentioned, we have communicated our six turning point actions that are pivotal to our recovery from the un- unsatisfactory 2025.

The six turning points are: Mediterranean capacity reduction and pricing model, a recovery from our BU Med situation; general freight ferry pricing optimization; ramp-up and improvement of our Jersey results that we started last year; logistics boost projects continuing to improve with a full-year impact; the cost program that was announced in November last year; and then our test turnaround progression. Other focus areas for the year are to stay the course on the green transition, and a continued focus on cash flow to improve our balance sheet with the debt reduction, non-core asset review, and working capital improvement as the key actions in that respect.

We will now turn to page 4. We summarize our first quarter of the year as delivering a solid improvement of the results compared to last year.

We improve with 150 million quarter-on-quarter last year. We obviously still have a long way to go to get back to where we want to be, but Q1 2026 is a good start.

It was driven by solid improvements across our network. Ferry results improved in most business units and largest in the Mediterranean.

Logistics results continued to improve and was mainly driven by Continent recovering from the foot-and-mouth disease that hit us same quarter last year. Finally, we have a non-allocated items that are hit negatively by CEO severance cost.

As mentioned, our turning point actions are progressing. Five out of six are progressing better than performed jointly.

We are on track with our cost reduction program, and our test turnaround is progressing, but we would like to accelerate it. If we look ahead, the world around us cannot be characterized as steady in any way, not in Q1 and not today.

Obviously, market volatility is is a key factor in how our future looks. We focus on being adaptable to changing in any customer demand or other market developments.

We focus on fuel cost recovery across our network, that being ferry, road, or rail. In the next couple of pages, I will take you through the results, turning to page 5.

In Q1, we saw a slightly lower revenue than last year. That was driven by weather impacting our our number of sailings and also a reduction in revenue following restructurings we by choice have made in 2025.

A net a group revenue down 2.5%, we are still maintaining that on the full year we will be we will be on level with 2025. The reasons for the lower revenue this quarter was driven in large part by the by the passenger segment where we had fewer sailings, rougher weather, and and generally just less income from that segment.

Our freight ferry was slightly up, 1%, and mainly driven by good volumes in some parts of our network. Finally, our logistics were down 5% following lower volumes, but in particular restructurings, closing of of traffics during 2025.

Turning to page 6, looking at our income statement for the quarter. As mentioned, revenue slightly down.

EBITDA up 51 million, or 7%, taking us to 799 million for the quarter. Translating that into an EBIT of 33 million, which is up 50 150 million since last year.

Last year, we had a net a net EBIT impact from from insurance income following the total construction loss of Finlandia. That's what you see in the other income in 2025 and then offset by the write-down of of 83 million.

The net impact of that was 33 million. We also had other positive one-offs in Q Q1 2025 impacting our EBIT.

Some were route changes made during the year, and we also had other things. Finally, we have this year also the CEO severance cost of 37 million included in this quarter.

Overall, if you clean out for all these one-off items, we have in the blue box on the slide listed where the actual underlying improvements, how they look. Overall, our EBITDA increases in that when cleaned up for one-offs 227 million versus last year, and the EBIT increases actually as large as 262 million versus last year.

Again, quite a little bit of a complicated explanation, but it is to get into the real underlying improvements of of our business that we are doing this adjustment these adjustments for illustration. Turning to our ferry division on page 7, we had a very good quarter, obviously, as I've already mentioned, starting the recovery in some of some of the lost earnings that we have had over the past two years.

Ferry EBITDA is up 51 million. EBIT is up 133 million to a result for the quarter of 124.

Most business units contributed to this improvement: so North Sea with volume, better rates; Mediterranean with capacity and cost reduction and new pricing model; Channel with improved results; Baltic Sea with improved volume, positive from entering the space charter that we have done with TT-Line; and finally, we have Strait of Gibraltar contributing slightly negatively because of a lot of reductions due to tough weather in Q1 in the Strait of Gibraltar. Like I just presented for the group result, we have also in ferry division adjusted for the various one-offs and route changes to illustrate the full underlying improvement, which is an EBITDA up by 190 million and an EBIT improvement of 208 million.

Turning to logistics on page 8, we also see a good start in the recovery from most business areas in logistics. Our EBITDA is up 33 31 million, or 16%, despite a continued tough market in Europe.

Our EBIT is up 48 million, taking into taking it close to break-even for the quarter for our for our business. We remind you that Q1 is seasonality a low quarter for for our logistics business.

Again, most business units contributed to this improvement. Nordic result improved on on most locations, some progress on our boost projects and still a few challenges left in this business unit.

Continent showed a very strong recovery following the foot-and-mouth disease last year. UK & Ireland had had a good stable performance, whereas Scotland and Northern Ireland had some volume reductions.

Our BU tests, the Turkey and Europe South, had improvements in volumes, but a a result and and a performance overall on a like-for-like basis on par with what we saw in Q1 2025. Our EBIT margin for the quarter, if you exclude the loss-making test business unit, is up at 3%.

Still more to achieve, but again, a good step in the right direction. Now turning to page 7, oh page 9, page 9, sorry, looking for cash flow at the quarter.

Our cash Q1 cash flow, adjusted free cash flow, was 300 million. That is 2 22% higher than last year.

It was driven by better operational performance, but also supported by improvements in working capital and tax. I may you may recall that our Q1 2025 cash flow was positively impacted by the introduction of a 900 million factoring program when you compare like-for-like.

Therefore, also a significant improvement as there is no factoring impact in this quarter. We also in our cash flow for Q1 2025 had the insurance income from the total construction lock loss of the Finlandia ferry.

Turning to CapEx, our CapEx were in line with last year and is mainly this is mainly maintenance CapEx in ferry from the dry-dock season that we have in Q1 where we take most ferries into dry- dry-dock. Turning to page 10 with an update on our capital structure and leverage ratio.

Our capital structure is stable in Q1 2026 as opposed to 2025. We also have seen a significant reduction over the past year in our net interest-bearing debt.

That combined with an improved earning takes our leverage ratio below the 4.0 mark down to 3.9 for Q1 2026, last 12 months. Again, that is a a achievement that we are look that we have been looking forward to, and we expect that we will be able to stay below the 4.0 mark going forward.

That ends the the walk-through now of our financial highlights of the quarter, and I will now turn to ESG efforts on page 12. Looking at safety first, our sea-based safety improved in Q1 and our lost-time incident frequency was reduced to 2.3.

Unfortunately, our landside safety deteriorated significantly in Q1, and we were all the way up to 6.1 in lost-time incident free- frequency. This is due to mainly trips and falls on icy weather conditions and has to be a continued key focus areas for us.

The increase in land-based safety is not acceptable nor satisfactory for us. Another not so good performance was that we our suit the CO2 emissions from our ferry fleet were up 2.9% compared to same quarter last year.

This is partly due to rough weather that that made us use more fuel during the same amount of sailings, but also because the timing of when we use biofuel. In Q1 2025, we had a usage of biofuel in.

This will come later in 2026, so that is also make making part of the the reason for why we are up compared to same quarter in 2025. When we look at full-year 2026, we are still targeting to have lower CO2 emissions overall from our ferry fleet than we had in 2025.

We deployed two more e-trucks in in the Q1 2026, taking us to 149, and those were deployed on the Shetland Islands. Finally, we increased women's representation in management with 1 percentage point, and with 2 percentage point if you look at non-office based persons.

With that, I will now turn to our outlook and priorities for the remainder of 2026. On this page, page 14, we present our upgraded guidance that was communicated on the 14th of April.

We still expect our revenue to be on level with 2025. We raised our EBIT outlook in mid-April to be between 1 billion and 1.4 billion in 2026.

CapEx is maintained at around 1.7 billion, and that includes now a ferry a purchase of a ferry, Stena Vinga, that we have concluded the the contract on and that will be we will take over officially in November. The ferry is already deployed on our Jersey route as a chartered ferry, but we will take over ownership, as mentioned, in November.

Finally, we have changed and improved our adjusted free cash flow guidance from being above 0 to now being above 250 million for the day for the year. Summing up and turning to page 15, our Q1 as was a good and strong step in the right direction, but we still have much more to improve and we remain focused on that.

Our priorities remain to be focused on organic growth, and monitor and be responsive to any changes in our market; delivering on our six turning points; continue our strong cash flow focus and working capital improvements; committed to our green transition; and finally, also deliver on our diversity, equity, and inclusion targets. With that, I end our presentation on the call and now open up for questions.

Yes, good morning. Thank you for taking my questions.

The first one is on the logistics business. It's very kind of you that you show, I think, I can't recall the slide number, that's slide 8 in logistics, we can see the difference between the DFDS classic and the test contribution.

You give us the margins there. If my math doesn't sort of trick me too much, that implies that the test contribution in the first quarter has been -122 million.

The similar number for last year was -83 in the first quarter. Then I know there are some PPA adjustments, which adjustment probably around -100.

All else equal, this implies a deterioration of the EBIT in test from Q1 last year to Q1 this year. I just wanted to hear if that is correct.

If I am correct, what is going on there?

I think there's probably an element of allocated group cost as well that were not there last year that makes the difference look worse than it is would be my expectation when you do the backward calculation from the percentage points that we have included there. I think if we are staying around the negative -100, then that's around the results we see.

The group cost impact from allocated group cost is around 20 million?

Yes.

In the quarter.

No, Lars, the like-for-like result is 100 million.

Yeah.

Yeah.

If we back-calculate, it's [unclear].

Okay. Then I assumed that group cost, that will be something similar in the coming quarters?

It's a choice we make where we put the cost right, but we did not have allocated group costs. We never do that the first year we have a new one in operation.

We have that this year.

Okay. Then the reason I'm asking these questions, that because I'm interested in the trajectory here going forward for test.

Because you've been indicating a -300 million for the full year. That means that you need to see quite substantial improvement in the coming quarters.

If I recall correctly, seasonality, the quarters are fairly evenly distributed in terms of earnings over the year. What we will see here in the coming quarters from test?

I would say fairly is maybe a little bit too strong a word. Q1 and Q4 is typically lower quarters than Q2 and Q3 in logistics.

Okay. Then if I'm right, and then including that allocated group cost, you get to the -122, that suggests that with the gain that you have a 21 million, then the DFDS classic part of the business makes 94 million in EBIT in the first quarter.

That's a very, very substantial improvement. Have you moved around this allocated cost from the group, which can distort that earnings improvement from DFDS

classic? Yes of course you can say you have another business unit that you allocated to, overall that there will be a slight movement, but that's not what really moves the needle here, right?

I think it's important to look at the BU test as a business unit in recovery. Obviously, we expect to improve over the quarters during 2026, we're not going to be at the same level of earnings in Q4 as we are in Q1 as our recovery plans kicks in.

Okay. You have already reduced head count quite significantly?

Yes.

Are there more to come in terms of head count reduction, or where should the earnings improvement come from?

Our focus right now is not head count reductions, but we will adjust when required, but it is much more on the asset utilization. It's on the winning volumes, of course, and then it's on working on a various sets of, how should I say, accountability and performance improvement measures.

Okay. Then on the ferry business, maybe just a status on what goes on in the Med in terms of capacity adjustments.

Are you done with those? The pricing situation?

Then last but not least, any update on how Grimaldi is acting out down there? Will we see more vessels coming in?

Yeah. Yeah.

Overall, our situation in the Med is that we are back to being profitable. We have taken out capacity over the course of Q4.

There were two ferries that were contractually chartered and ready for return, we returned those, and we sold one vessel. That means that we have lowered overall our cost down there, and with about the same volumes almost, we are operating at a much higher utilization rate.

I think it's fair to say that our ferries are full, and that brings in the better result for the quarter for Med. We are still the one with the most departures, with the most vessels deployed.

We offer a strong service to our customers, and we are content with the customers coming back as well. Obviously, there's still another player down there as well.

I think it's too early to say that things have stabilized, but gradually things finds it level, but we focus on what we can focus on, and that's our own operation. Whether Grimaldi will bring a fifth vessel or not is on my side I can't say.

It's speculation, right?

In terms of the pricing, the price adjustment, is that done? How much, can you indicate maybe a level of the reduction?

I can't indicate as such the level, but we have our pricing model in place for 2026, which also gives us a stronger reliability on our projected income for the remainder of the year.

Okay. All right.

Thank you.

Yes, good morning. The first question is: what earnings tailwind have you assumed from fuel spreads in full-year 2026 in your upgraded guidance?

Then to what degree should we expect this tailwind reverses in full-year 2027 at current oil futures? Then secondly, on leverage, I see the sort of leverage targets or expectations for full-year 2026 and full-year 2027 aren't changed, even given the upgraded earnings guidance.

Why's that? Thank you.

Thank you, Ruairidh. The way we look at the world right now is we know pretty much what would happen in Q2 when we talk bunker prices, but we have no idea what would happen in Q3 and Q4 because it's an extremely volatile situation, right, down in the Middle East.

As I'm sure everyone on the call is familiar with, in the ferry freight contracts and across the industry, not only in DFDS, but across all players, there are these pass-through models in terms of increases in bunker fuel cost. They typically have a time lag of one month, some may have a longer time lag, so that it takes a month to pass through.

That means that with prices starting to elevate only around 1st of March and thereon, we do not see any impact in Q1 of this, but there will be a sort of a delayed impact coming in Q2 from the elevated prices that we saw already in Q1, and also elevated bunker cost that we as a company had to bear. There will be a positive impact due to the time lag in Q2.

I can't go into details of the magnitude. There are also underlying business improvements in Q2, which drove our guidance upwards for sure.

Come back to the points that I just presented in particular on our Mediterranean ferry business, but also other places, the recovery in logistics, in Continent, and Nordic that is going well as well. That is the basis for our updated guidance back in mid-April.

Your question on leverage, where we are now at 3.9, and as I said, we expect to be below the 4.0 for the remainder of the year. Due to the high uncertainty about, how shall I say, Q3 and Q4 and in this highly volatile market with elevated oil prices that can or may not, we don't know, have impact on volumes, I can't be more specific in the leverage ratio projections for the remainder of the year, other than we aim to stay below the 4.0.

Great. Could I just perhaps clarify on that first question, your EBIT guidance was upgraded $200 to $300 million.

Would it be fair, given the sort of phrasing of the release, that the minority of that came from fuel spreads, and it was primarily your turnaround measures? Would that be a fair assumption?

Thank you.

It would be a fair assumption, absolutely, that the majority is coming from underlying business improvement, yes.

Okay.

Thank you, Ruairidh.

Yes, thank you for taking my questions here as well. Just first one on the Mediterranean segment.

This new pricing structure and the capacity reduction seems to support your earnings in the Med, but you are still quite a bit below the level from before Grimaldi opened a competing ferry route. Are there further initiatives that bring you closer to that earnings level from before 2024, or what factors will determine the earning trajectory perhaps beyond 2026?

That would be my first one. Thanks.

Yeah. I think it's fair to say that the situation in the Med is still impacted by the competitive situation down there.

It would be too early to say that everything has stabilized. That means that there is still a competition for volume, to speak.

As that matures further, we expect to be able to both improve our volumes and our revenue from the area. That would be the further improvement that we would see.

Obviously, if we get higher market prices overall, it would be a positive. Wouldn't there be an offsetting impact from road volumes that has been gained by the ferry operators that could reverse, and therefore, you wouldn't see the full impact from a higher underlying earnings or prices from the ferry industry?

Some comments on that, please.

Yeah. No, you are of course absolutely right that there is the risk of volumes shifting to road.

However, I still think we are a bit away from that break-even point in terms of road. We are still, compared to previous times, at lower prices, we believe there is still some room before that would shift over to road.

Okay. Then a question on one of the comments you made on one of your slides about the North Sea.

You state that there's a positive volume and rate development. Can you please elaborate on the market and competitive development in the North Sea region, please?

Yes. Obviously, the North Sea is a range of many routes, right?

Generally, the traffics between, how shall I say, Nordics over to the UK are good, and we have strong volumes there. The competitive situations we see in what we call our business unit North Sea is more down on routes from the Continent over to the UK, but where we are also seeing a good pick up in volumes for ourselves, meaning that we are dealing with that competition in a good way.

Generally, what we see for the North Sea this quarter is a quite stable development with some improved freight rates, and no, how shall I say, unpleasant surprises.

Okay. Just over the past couple of quarters, you've flagged that there's been increasing capacity from some of your competitors also in that region.

I'm just curious how that stacks up with the comments this quarter.

No. That's a fair question.

I think it's fair to say that, of course, as in many other places, there are more operators on some of the routes. However, the impact this quarter has seemed to be less.

Okay. Then my final question on your free cash flow for Q1, which was at 300 million, but still, you only guide for above 250 million for the full year.

Given that you have the best quarters typically in Q2 and Q3, can you just help me bridge how you should end up at the 250 million?

No, fair question. It's mainly to do with the timing of our CapEx.

As we have said, we've had about 300 million of CapEx this quarter only, right? We have guided at 1.7 for the remainder of the year, meaning there will be a little bit of an uptick in CapEx.

We may also see some deterioration of other elements, for example, our bunker inventory. Given the significantly elevated prices just means that we have more tied up in inventory now.

That's the main reasons why we stay at the level we do.

All right. Net working capital, how is that going to pan out for the coming quarters, do you expect?

The higher inventories due to higher bunker prices, not driven by volumes, but just generally the value of the inventory goes up, right, so that is negatively impacting the working capital. We have done quite a lot of improvements to our working capital, and therefore, right now we have not factored in any further improvements in this guidance forecast.

That's very clear. Thank you.

Thank you. Actually, two, one is a sort of more housekeeping question, the depreciation levels.

If I look at it in ferry, depreciations are marginally down quarter-on-quarter. In logistics, they're down actually a little bit more.

Any reason for this? Is this because of the sale of the ferry in the Med or is this sort of the run rate we should expect for the rest of the year?

I think I would suggest that Søren takes that with you after the call.

Okay. Then a follow-up on some of the previous questions, because when we spoke on the 14th of April in connection with the guidance upgrade, I clearly got the impression that the majority of the reason for the guidance upgrade was caused by the bunker spread and less to do with the underlying operational improvements.

That was not the answer you gave earlier, I'm just a bit confused.

I think there's also been almost a month gone since, and we probably gotten more confidence in our underlying business in terms of how that is looking, and then also have a better view into the impact of bunker, and ultimately the BAFF income that we will see. Hence, that's why we emphasize that there is also a significant element of improvement in our business that is part of our guidance upgrade.

Okay. Thank you.

Thank you. Then just a few remarks to close this call.

As mentioned, we remain focused to improve our financial performance for the rest of the year, and we have discussed now the elements that we have in play to continue to do that. That, of course, includes delivering on our turning point actions.

Further and as also mentioned several times, it's really a key priority for us to monitor the changes in the market that we may see, changes in volumes, and adapt accordingly. Thank you very much for joining this call and for your questions.

We look forward to be speaking to you again soon. Thank you.