dfds and digital

DFDS AND DIGITAL
January 2016
Insert date August 29, 2015
DFDS overview
Revenue split LTM Q3 2015 per division
14
12
DFDS GROUP
Finance
SHIPPING DIVISION
LOGISTICS DIVISION
• Ferry services for freight and
passengers
• Bespoke industry solutions
• Port terminals
• Door-to-door transport
solutions
• Contract logistics
DKK bn
People & Ships
4.9
10
8
6
8.9
4
2
0
-2
Shipping Division
2,5
•
•
•
•
Lauritzen Foundation: 42.5%
DFDS: 3.5%
Free float: 54.0%
Listed on Nasdaq OMX
Copenhagen
0.2
4.6% margin
1,5
DKK bn
• Founded in 1866
• Activities in 20 European
countries
• 6,500 employees
Shareholder structure
Eliminations and other
EBITDA split LTM Q3 2015 per division
2
DFDS facts
Logistics Division
1
20.2% margin
1.8
0,5
0
-0,5
Shipping Division
2
DKK/USD: 6.84
Logistics Division
Non-allocated items
DFDS key financials
Revenue
DKK bn
14
Margin, %
2,0
16
12
1,8
15
10
1,6
14
1,4
13
1,2
12
1,0
11
4
0,8
10
2
0,6
9
0,4
8
0,2
7
8
6
0
2012
2013
Shipping Division
2014
LTM Q3 15
0,0
Logistics Division
DKK bn
Inv cap, DKK bn
2,0
2,0
10
1,8
1,8
9
1,6
1,6
8
1,4
1,4
7
1,2
1,2
6
1,0
1,0
5
0,8
0,8
4
0,6
0,6
3
0,4
0,4
2
0,2
0,2
1
0,0
0
0,0
2012
2013
2014
6
2012
Operating cash flow & NIBD/EBITDA
NIBD/EBITDA
3
EBITDA & margin before special items
DKK bn
LTM Q3 15
2013
2014
Invested capital & ROIC before special items
LTM Q3 15
ROIC, %
14
12
10
8
6
4
2
0
2012
2013
2014
LTM Q3 15
Shipping & logistics – focused on northern Europe
Freight Shipping
Main
services
Logistics Solutions
 Trailers,
unaccompanied &
accompanied
 Industry solutions
 Port terminals
 Door-to-door full & part
loads
 Contract logistics
Passenger Shipping




Travel
Short sea
Transport
Cruise ferry
Freight
Share of
revenue
45%
80% freight
4
35%
20%
DFDS route network
- an integrated part of Europe’s infrastructure
•
57
Logistics office/warehouse
Why did we hire a CDO,
and what do we hope to achieve?
6
The starting point
• We have been around for 150 years
…if we want to be around for the next 150 years, we cannot ignore digital
• Our Passenger business is almost completely digital today
…but the rest of the business was lagging behind
• Our industry is one of the least “digitized” industries
…and that gives us an opportunity
7
Major digital players and start-ups play the game differently, and they are
starting to appear in our industry
8
The pace of change in digital technologies, adoption and behaviours
is exponential: the future is closer than it has ever been
Already most cars have vastly more computing power than the first space shuttle.1
Est. 25/75/212 billion things connected to the Internet by 2020. 2
The year that machines get smarter than humans? Roughly 2040 if you average out
all the predictions. 3
1, 3 Dave
2
9
Coplin, The rise of the humans
depending on who you ask
Customer experience is rarely face to face any more: most of it will end up
online
70% of a buyer’s journey has been completed before he gets to talk to a sales rep
Sirius Decisions, 2014
Steven van Belleghem, When Digital becomes Human
10
And digital is disrupting at a deeper level than customer experience
11
It started with setting goals and
understanding the current state
12
High-level goals for digital
“Grow top line and make operations more efficient”
•
Reach more customers
•
Move processes online
•
Get more business from existing
customers
•
Automate where possible
•
Simplify and manage external
touchpoints and interfaces
•
Grow loyalty and customer value
Improve customer experience online;
provide digital tools and services that make it
easier for customers to buy and easier for us to operate
13
Digital maturity assessment
Business
model
(Content)
marketing
strategy
Reactive
Tactical
Integrated
Managed
Strategic
Traditional business.
Digital as
communication channel
via owned web sites
Digital as transactional
medium towards
customers; introduction
of earned and paid
media, analytics
Digital analytics
integrated with offline
data; service provision;
digitization of
processes
Channel shifting
strategies and
omnichannel focus;
digital analytics
essential to business
intelligence
Digital products and
services; reinvention of
business model,
customer relations,
organizational design
Focus on quantity
Strategy and process
creation; SEO; “more is
better”
Focus on quality
Functional and useful
content & services;
refined processes;
customer centric
Focus on experience
Brand leadership via
storytelling; optimized
buy cycle; multi and
omnichannel; Agile
marketing
Focus on monetization
Marketing ROI, content
publishing ROI,
syndication and
services ROI; scale
BI/ Corporate
performance mgmt;
360 degree customer
experience mgmt;
strategic planning
Focus on status quo
Few resources; brand
centric; linear decision
and approvals process
Analytics
Web metrics; IT driven;
minimal value
Behaviour
optimization: AB/MV
testing
Business goals driven;
emarketing
optimization; KPI alerts
CRM; multichannel
analysis; predictive
analytics; decision
support
Digital IT
Ad-hoc request-based IT
support for digital
initiatives; slow TTM;
linear processes; who
shouts loudest
Project-based IT
support; cost-focus;
restrictive policies;
centralization of IT
systems and people
Dedicated crossfunctional web service
teams (Business & IT);
test-driven and Agile
development
Managed
decentralization of IT
resources; focus on TTM
and agility; crossfunctional Digital
teams; value-driven
Big data management;
Adaptive Digital IT;
technologies adopted
and adapted in short
cycles; fluid teams;
performance-driven
Organization
Unplanned
Diffuse management
Centralized
management
Decentralized
operations
Integrated and
optimized
14
Maturity and ambition level
Business model
5
4
3
Analytics
Marketing &
content
2
1
Assessed maturity (B2B)
Assessed maturity (B2C)
Ambition level
Organization
15
Digital IT
Resulting in a direction and priorities
Priority 1: integrated experience
LONG-TERM GOAL
BEST-IN INDUSTRY
CUSTOMER EXPERIENCE
TOOLS
Logical web site information architecture for all audiences
Priority 1: Transactional and mobile tools
Customer facing interfaces for booking & fulfillment; device agnostic
Priority 1: Internal capabilities and mindset
Central responsibility; digital organization, process and governance
Priority 2: Service provision
Marketing as a service; valuable information and content online
SERVICES
STORY
TELLING
Priority 3: Brand-driven storytelling
Blogging and social media engagement with business customers
16
To meet our goals, we needed to
address our internal capabilities
17
Becoming more digital as a business would require changes to our existing
ways of working
Optimized
customer
experience
Managing
constant change
New or adapted
business offerings
18
Understand
preferences of the
digital customer
Develop
digital IT
capabilities
To CDO or not to CDO?
Considerations
• We have very few central functions – our business is lean and decentralized
• The digital strategy and initiatives to support it need to be very closely aligned to
business objectives
• We have a deliberately small C-suite: this also means we have the agility and ability to
take fast decisions that is needed in a rapidly digitizing world
• Still, we needed a role with both the mandate and digital expertise that was lacking
19
Decision 1: a centralized digital function, with senior steering
Factors influencing the decision:
• Relatively low digital maturity, especially in
B2B business and IT
EC functions as a
Digital steering committee
• Mitigate the risk of becoming a digital
“fashionista”
• Keep up with the pace of external change
Chief Digital Officer
• Have the mandate to transform crossfunctionally
• Close alignment needed between digital and EC
Ad hoc IT and agency resources
20
Decision 2: ensure business relevance and operational change
Embedding digital competence within the divisions by appointing “DDOs”
CDO becomes “GDO”
Digital Steering Committee
Divsional Digital Officer
Freight Shipping
Group Digital Officer
Divsional Digital Officer
Passenger Shipping
Divsional Digital Officer
Logistics
Ad hoc IT and agency resources
21
What we expect from the new
organization
22
Transforming business process in parallel with customer experience
Simplify and standardize to enable automated flexibility
From: everyone tries to please their own customers
To: automated personalization
+ personalization
+ customization
Simplified standard service,
product and process
23
Example: Project Toplight and Digital
Project Toplight (run by TMO) and Digital establish a common goal: 85-90% of Freight Shipping bookings online by end 2017
TMO audits internal processes
in Freight Shipping
Digital researches and defines
customer journeys
TMO defines simplified taxonomy
and fee structure
Joint project established: to establish a new service architecture
towards customers
 Fine-tuning of service definition and naming, business rules,
terms and pricing
 Implementation of new services online
 Implementation of new service definitions in booking tools
 User testing process for new services
24
Delivering towards a best-in-industry customer experience
WEB FOUNDATION
Web site consolidation leads to
unified brand. Relaunch of
DFDS.com as a responsive site.
25
LOGISTICS TRACK & TRACE
Driver app and
interface for
tracking Logistics
shipments on
mobile, tablet,
desktop
PHOENIX CUSTOMER WEB
User-friendly booking and
tracking for Shipping customers,
on mobile, tablet, desktop
And ultimately, becoming redundant
“Within just a few years, we need to weave
digital business expertise throughout the organization
until “digital” becomes simply “business as usual”…
… I’ll know I’m successful when my role
is no longer needed”
– Sophie-Kim Chapman, GDO DFDS
26