unifeeder

ANNUAL REVIEW 2011

WELCOME

UNIFEEDER ANNUAL REVIEW 2011

CONTENTS

2011 in brief inside cover

About Unifeeder 1

Strategies and goals 2

Vision and objectives 3

Invitation to come backstage 4

Characters of the play 9

Act 1 Juggling the network 12

Act 2 First-class props 14

Act 3 Making the engine sing 16

Act 4 Directing the cast 18

Act 5 Picking up the glove 20

Act 6 Unifeeder breaks new ground 22

Act 7 Sparkling performances 24

Director’s cut 26

Corporate Social Responsibility 28

Board of Directors 30

Group management 31

Risk management 32

Ownership and corporate governance 33

Financial review 34

Consolidated income statement 35

Consolidated balance sheet 36

Consolidated cash flow statement 37

Report of the independent auditors on the summary financial statements 38

Glossary inside cover

2011 IN BRIEF

Revenues grew by 24.9 per cent to DKK 3,207 million (2,568).

Unifeeder handled 1,948,050 TEU (1,748,823) of which Feeder Services accounted for 1,684,061 (1,533,757) and Shortsea Services 263,989 (215,066), respectively.

For Shortsea Services the 22.8 per cent increase in containers handled meant a continuation of the trend and an all-time-high.

Operating profit (EBIT) amounted to DKK 298 million (281). Operating cash flow was DKK 295 million (271).

Revenue by business unit 2011

Feeder Services, 75% (77)Shortsea Services, 25% (23)Numbers in brackets refer to 2010

1UNIFEEDER ANNUAL REVIEW 2011

ABOUT UNIFEEDER

Unifeeder is a dynamic logistics company. Faced with growing demands for efficient and sustainable transport solutions, customers turn to us to take advantage of the best connected network in Northern Europe.

We simplify the complex tasks of choosing and manag-ing supply chains. For more than 30 years customers have trusted us with finding routes and moving goods anywhere in Europe – whether they are international container ship-ping lines or industrial companies.

Unifeeder helps to release the full potential of busi-nesses in search of new markets and more effective logistics solutions.

Business Unit FEEDER SERVICESUnifeeder’s network is a crucial link in regional and global supply chains. Covering all the major ports in Northern Europe, Unifeeder extends the reach of international container shipping lines. The network stretches from the western edge of the North Sea to the eastern rim of the Baltic.

Unifeeder’s network links 41 ports in 13 countries with daily calls across Northern Europe. In 2011 Unifeeder Feeder Services handled 1,684,061 TEU (1,533,757).

Business Unit SHORTSEA SERVICESUnifeeder Shortsea Services provides primarily industrial customers in Europe with fully intermodal door to door solutions, combining seaborne transportation with road and/or rail. Unifeeder tailors solutions to suit individual needs as required using its extensive network and frequent services. In 2011 Unifeeder Shortsea Services handled 263,989 TEU (215,066).

We find smarter ways to move our customers’ containers anywhere in Europe – using the best combination of sea, rail and road


STRATEGIES AND GOALS

Feeder ServicesUnifeeder Feeder Services’ goals are threefold: to be the preferred partner for feeder clients – irrespective of size; to achieve even larger economies of scale; and to expand its operations beyond Northern Europe.

Mathematically proven cost advantageUnifeeder has proven that feedering outsourced to inde-pendent feeders like Unifeeder is financially more attractive than in-house feedering performed by the international container shipping lines themselves. This is partly because of Unifeeder’s constant focus on optimising resources based on a very flexible and agile production. The cost advantage of independent feedering is recognised by most of the international container shipping lines as a key parameter in decisions on whether to outsource or not.

Maximize economies of scaleThe mathematical logic depends to a large extent on the scale of Unifeeder’s business, which is why Unifeeder continues to build the scale of its services through further growth. Scale advantages are what provide the opportuni-ties to tailor services on behalf of our clients.

Getting even closer to customers When working closely with customers on day-to-day feeder requirements, improvements are continually being suggested and new business opportunities arise. Unifeeder

Unifeeder will continue to create value from the size and scope of its business. The geographical reach and large volumes handled in Northern Europe ensure strong competitiveness and form a solid basis for further growth and expansion.

constantly strives to increase agility and flexibility even further, to strengthen the relationships with customers and to develop new ways of cooperating with them for the benefit of both parties.

Expand business to new geographies Unifeeder Feeder Services aims to leverage its current business model, its knowledge and capabilities into new markets. Ensuring exportability of its core capabilities will be a strong focus area in the coming years, where new markets are being explored. Unifeeder aims to utilise its capabilities in both adjacent geographies that are con-nected to Unifeeder’s current network as well as in new geographies such as the Mediterranean. In recent years, Unifeeder has added Poland and UK to its extensive network.

Shortsea ServicesUnifeeder Shortsea Services aspires to be the leading multimodal service provider in Northern Europe. Through continued land-to-sea conversion of intra-European trans-portation and extended service delivery with increased multimodality, Unifeeder will continue the strong growth of its door to door business.

Focus on large accountsUnifeeder’s dual approach to the market with customers handled both directly and through forwarders works well,

as the largest accounts have varying needs. The focus on the largest customers is enhanced by Unifeeder’s key account setup, which works increasingly in sales verticals to identify the customers most strongly matched to Unifeeder’s services.The sales verticals are either defined by cargo commodity, geography or certain “value attributes”.

Inland expansionIn order to get closer to customers in the European hinter-land, Unifeeder will establish a stronger inland presence and thereby better match the position flexibility of road haulage.

Virtual cooperationIt will be even easier for customers to do business with Unifeeder. Improved IT solutions allow for improved automation and virtual cooperation, adding another layer to the interaction with Unifeeder Shortsea Services.

Towards new horizons


VISION AND OBJECTIVES

Building on a successful past, Unifeeder has set demand-ing goals for its business units to be reached by 2015.

Vision for Feeder Business Unit

in Europe.

Feeder Business Unit ObjectivesUnifeeder will build on its leading market position and expand market share in its existing territories, enlarge the contents of its products and grow into new geographies. Unifeeder will achieve this by focusing on its core com-petences of providing customers with unrivalled service, frequency, reliability and innovative solutions.

Unifeeder Core Values We are dedicated to serving our customers We are committed to continuous improvement It is all about people We dare to take responsibility

Vision for Shortsea Business Unit

by 2015.

Shortsea Business Unit ObjectivesUnifeeder will grow its door to door business through continued land-to-sea conversion of intra-European trans-portation and extend its service delivery with increased multimodality. Unifeeder will achieve this by increasing the market’s awareness of the competitiveness of an environmentally friendly and safe shortsea transport vis-à-vis road haulage and rail.


INVITATION TO COME BACKSTAGE

The CEO invites you to take a look at what goes on behind the scenes at Unifeeder

WELCO


A premium on stabilityIn times of crises people look for stability and reliability. A premium is put on suppliers, debtors, creditors, counter-parts and employers that have staying power. Such compa-nies are not necessarily large. They may very well be the opposite. The present conditions tend to favour nimble, flexible and asset-light players – characteristics usually associated with small or medium sized companies.

We aspire to be the preferred partner to our present and future customers not only today and tomorrow, but also the day after that. That is the only sensible thing to be in a world marked by uncertainty and volatility.

Making a differenceUnifeeder is in the logistics industry. In our feeder business we serve almost all of the world’s largest international

container lines. Likewise, we have among our shortsea clients some of the world’s leading logistics and industrial companies.

All of them are affected by the crisis, although in different ways. We believe our claim to being a source of calm to them is well-founded. Because we hire vessels and containers we are highly efficient, operating with just as much capacity as needed. Offering our clients a variable cost model, relieving them of the burden of fixed costs, investments in capacity and underutilised own systems contribute to weathering the present difficult conditions.

Flexibility and agility are the hallmarks of our organi-sation. We are always ready to accommodate our clients’ needs, regardless of circumstances. Our operative and financial performance testifies to our ability to ride out the storm.

Inspiring confidence In short, we think we have found a way to satisfy customers, grow our business over the long term, inspire confidence in owners, employees and partners and develop new serv-ices and business lines at the same time.

With this Annual Review we would like to offer you the opportunity to glimpse how we work to make a difference in the industry, to facilitate our customers’ complex task of choosing transport solutions and how we continuously try to improve our performance.

Please join me for a walk behind the scenes at Unifeeder!

Jesper KristensenCEO

BACKSTAGEWhile the financial crisis continues to impact global trade and business, Unifeeder weathers difficult conditions

THE VESSEL ALWAYS CALLS TWICE – OR AS YOU LIKE IT

Unifeeder presents


8 UNIFEEDER ANNUAL REVIEW 2011

UNIFEEDER FEEDER SERVICESUnifeeder Feeder Services extends the reach Unifeeder is a reputable feeder services company with a history that goes back to the late 1970s. It has the largest and best connected network in Northern Europe.

Unifeeder extends the reach of international container ships by serving port terminals where they cannot call directly for economic, geographic, technical or other reasons (distance from the main trade routes, shortage of infrastructures, shallow waters, modest quantities of containerisable cargo, etc).

Historically Unifeedeer’s success is in no small part due to its agility and ability to come up with solutions that have made a real diff erence to the international container shipping lines. It has steadily expanded its network and developed its customer off ering in such a way that it is now the largest feeder operator in Northern Europe.

INTERNATIONAL CONTAINER SHIPPING LINESInternational container shipping lines rule the waves In global trade, or in business generally for that matter, few companies stand out like the international container shipping lines. The top 20 liner companies account for some 70 per cent of the world’s fully cellular container ship capacity.

CHARACTERSINTERNATIONAL CONTAINER SHIPPING LINES TOP 20 GLOBALLY

MAERSK LINE

MEDITERRANEAN SHIPPING CO

CMA CGM GROUP

EVERGREEN LINE

HAPAGLLOYD

CSAV GROUP

APL

COSCO CONTAINER LINES

HANJIN SHIPPING

CSCL

MOL

NYK LINE

HAMBURG SÜD GROUP

OOCL

K LINE

ZIM

YANG MING MARINE TRANSPORT CORP.

HYUNDAI MERCHANT MARINE

PIL (PACIFIC INT. LINE)

UASC

rule the wavesclosing the ranks


UNIFEEDER ANNUAL REVIEW 2011 10

That capacity is concentrated to ever larger ships as their operators take advantage of the economies of scale of sea-borne transport. Average unit transport costs fall steeply with distance but also in response to ship size.

The persistent trend for giant ships means they can call at only a limited number of deep-sea ports where they concentrate large amounts of cargo.

Closing the ranks These are dismal times for the world economy. The debt crisis among high-income countries is almost fi ve years old. Yet it shows no sign of abating. After a feeble recovery from the worst fi nancial and economic crisis since the 1930s three years ago, there is a risk that the world economy once again could be heading for a recession.

Global trade is one of the fi rst victims of fi nancial and economic crises. And since 90 per cent of goods are sea-borne, international container shipping lines have suff ered.

A global oversupply in shipping capacity has exacer-bated the drop in volumes and freight rates on most routes, not least the East Asia-North Europe route. In response, international container shipping lines have reduced service speeds, cancelled orders for new tonnage and idled ships. They have also formed alliances to pool

ships and share routes. Under such arrange ments ships carry cargo booked by all alliance members. By carrying cargoes on fewer ships, alliance members increase utilisa-tion ratios and lower their costs.

Having come into full eff ect in the second half of 2011, these alliances jointly vie for signifi cant goods fl ows on the major routes on which they are deploying their largest ships. Eighty-fi ve percent of the volume on the East Asia–North Europe route is now handled by Maersk Line and three large alliances.

UNIFEEDER SHORTSEA SERVICESUnifeeder Shortsea Services now a white swan Shortsea is about converting intra-European land-based freight streams to seaborne transports around the conti-nent. Shortsea combines sea, road and rail transport into supply chains that optimise costs, reduce environmental impact and increase competitiveness.

In 1985 Unifeeder took advantage of the opportunities provided by its feeder network to branch out into shortsea operations. Today, the shortsea duckling has grown into one of the largest single users of Unifeeder’s vessel capacity.

Unifeeder would not have been what it is today without the complementarity and interdependence of

feedering and shortsea. As one grows, so does the chances of the other and vice versa. The mutual benefi ts drawn from the common platform of network, vessels and con-tainers are proving more valuable by the day. The unique combination of shortsea and feeder services has given Unifeeder capabilities which ultimately benefi t customers in both segments.

EUROPEAN LARGE MANUFACTURERS The success of Unifeeder Shortsea Services refl ects the logistical change taking place in the European manu-facturing community. Increasingly customers rethink their supply chains with a view to optimise costs, lessen dependence on overstrained land-based networks and reduce their carbon footprint.

In particular, large companies in the chemical, automo-tive and paper and pulp industries have come to under-stand the advantages of shortsea. Unifeeder Shortsea Services matches the needs of large companies that face mounting competitive pressure and increasing environ-mental concerns. In the last few years, Unifeeder has made special eff orts to reach out to these businesses.

OF THE PLAY

HAPPY ENDING MAYBE IN SIGHT The drama is played out in Unifeeder’s arena, which encompasses Europe, neighbouring countries and its most frequented waterways. Whereas fairytales have what is known in the theatrical world as a closed end, this drama is open. Thus it mirrors the world we live in. Happy endings (because we are optimists) can come about in many ways. In our play it is the close interaction between the characters above that gives rise to hope. As a provider of both feeder and shortsea services Unifeeder off ers international container shipping lines and European large manufacturers solutions that point in the direction of favorable conclusions being achievable.

Act 1 page 12 – Juggling the network

Act 2 page 14 – First-class props

Act 3 page 16 – Making the engine sing

Act 4 page 18 – Directing the cast

Act 5 page 20 – Picking up the glove

Act 6 page 22 – Unifeeder breaks new ground

Act 7 page 24 – Sparkling performances

page 26 – Director’s cut

UNIFEEDER ANNUAL REVIEW 2011 11


Act 1 Juggling the network

At Unifeeder we make sure that almost 2 million containers per year reach their destina-tions in time and in good condition by keeping some 40 fully loaded vessels in constant motion between as many ports


THE SCENE: Friday afternoon Planning for the weekend is in progress... At Unifeeder’s head office in Aarhus, Denmark, Capacity Management is making the necessary adjustments to the network to ensure timely deliveries and optimal utilisation of the capacity. Centrally and in local offices, the Opera-tions Departments is coordinating berth slots and crane and gang availability with the port terminals. Load lists are being completed locally and sent to the terminals. The stowage coordinators are working their way through the 70-odd stows which are typical for any Friday. Communication between functions and offices is intense – a change in one will inevitably lead to adjustments for the others and there are many things to consider when you plan over 70 calls with some 40 vessels over a two-day period.

...when an urgent call demands attention One of the ocean liners will be delayed into Hamburg so that 275 containers to Gothenburg, Sweden, planned to load on M/V Herm departing Hamburg on Sunday, will now only be able to load on Monday.

Two people from Capacity Management discuss the problem:

A: Put the containers on M/V Robert, which is due to leave Hamburg on Monday for Halmstad, Malmö, Gothenburg and Helsingborg in Sweden.

B: But M/V Robert is already fully booked and cannot accommodate the 275 contain-ers unless some cargo is moved.

A: How about M/V Francop? She is leaving Hamburg on Tuesday.

B: Yes, she has open space and most of the time needed to make an additional port call. But she is scheduled to cover Danish ports only, with Aarhus as the final destination.

B: Have M/V Francop call Malmö in addition to her already planned ports. That will free space on M/V Robert for the other containers.

A: That means M/V Francop will then load containers in both Copenhagen, Denmark and Malmö bound for the continent before discharging in Aarhus! I think we need the stowage people to take a look at that.

A: OK, stowage say that we can take off the containers that were put on in Malmö and Copenhagen and put them back on the vessel again when we have removed those that should stay in Aarhus. Twelve shiftings should do.

B: Looks like we have a solution, but before we communicate it, we need to have

Operations check whether we can operate in Malmö at the new time – and if M/V Francop is to make it back to Hamburg on schedule, then we need extra gangs in Copenhagen and Aarhus so we can get her operated faster.

A: Okay, I’ll ask Operations to check with our people in Copenhagen.

When all is cleared, and load lists and stow-age plans corrected and resent, vessels are informed of their new routing. The 275 containers finally arrived safe and sound and in time in Gothenburg.

Note: M/V is short for Motor Vessel. M/V Francop, M/V Herm and M/V Robert are feeder vessels chartered by Unifeeder. A gang is a team of dockworkers. A berth is a designated location in a port where a vessel may be moored for loading and unloading.


Act 2 The show has to run flawlessly 24 hours a day 365 days a year. That means the props* of the . . .

* Props and set decorations A theatrical property, commonly referred to as a prop, is an object used on stage by actors to further the plot or story line of a theatrical production. If the item is not touched by a performer for any reason it is simply a set decoration. If it is touched by the actor in accordance to script requirements or as deemed by the director, it is a prop.

Vessels Unifeeder charters all vessels. That means that they are always modern, readily available and up to the assignment. The largest of Unifeeder’s vessels carries almost 1,700 TEU.

Trains Rail is a crucial component in the European transport system. Uni-feeder Shortsea Services is a partner to some of the continent’s most well-known rail operators. A 25 rail car unit train can accommodate a maximum of 100 TEU.

Trucks Road transport has since long been and still is the mainstay of European logistics. Trucks are indispensable for the last mile but less suitable for longer distances. Trucks carry two containers at the most.

IT Modern logistics is about moving information as much as moving goods. Unifeeder’s state-of-the-art IT system has direct connections with customers, ports, terminals, and authorities throughout the region to manage the flow of goods.

Schedule Unifeeder’s master schedule is the main plank of the scene. It provides a firm structure for all the movements of the actors, land based or sea based.

Containers Containers can be easily moved on sea, road and rail and switched between these modes. Unifeeder Shortsea Services leases its own containers and puts them at the customers’ disposal.


Ten years of relentless travelling equals…Here’s the story of good old CRXU 9708088 – a 40 feet well travelled fl oating warehouse and one of Unifeeder’s many workhorses.

Unifeeder started using it in April 2001 and sold it in April 2011. It operated in closed traffi c, taking synthetic resin from Stenungsund not far from Gothenburg in Sweden to Arendonk, Belgium, with approximately eighteen tons each time and then loaded four tons of packing material back from Arendonk to Stenungsund, functioning as a fl oating warehouse.

Total distance of each round trip was 2,200 km Rotterdam

(511 nautical miles) Gothenburg

…nine times round the world From April 2001 until March 2011, Unifeeder used container CRXU 9708088 exclusively in this traffi c. In total, the container was used for 164 round trips meaning that it travelled 360,800 kilometres and moved 3,600 tons of synthetic resin and packing material. Since there were eight lifts per trip during the ten year-period the container was lifted 1,312 times.

Ten years of traveling equals...

...nine times round the world

CASE: The well travelled container

. . . play must always be up to the job


Act 3 Making the engine sing

To support its growth strategy and development Unifeeder needs uniform, high-quality business processes that are scalable and efficient


Not broken but fixed anyway It wasn’t broken but Unifeeder decided to fix it anyway. The old IT system for Shortsea customer service across the European offices did not support Unifeeder’s geographic expansion and the service levels Unifeeder is aim-ing for. So Unifeeder had a new IT system for booking cargo installed. The problem was that procedures belonging to the old system were partly still in place.

Trouble-shooting teams Unifeeder’s offices in Germany, the Nether lands and Finland took the lead in optimising and creat-ing a new corporate workflow for Shortsea, later to be implemented in all countries. In each country local “frontrunners” were appointed and given the task of securing the actual implementation of the new standard and driving the continuous improvement in the local office.

Building LEGO motorcyclesOptimisation is about creating good ideas and holding on to new habits, which is why the employees are the key. Each office started by playing a simple game – they had to produce LEGO motor cycles in a calm but highly efficient flow showing high quality of produc-tion. Through this simple act all got acquainted with the Lean principles and were better able to give input to the process.

The next step was to analyse the current process set-up in each of the appointed offices. When the team of frontrunners from the three countries got together they understood their own process even better. Together they defined and tested a joint workflow also known as a Standard Operating Procedure (SOP).

Whiteboard roll-outWhen the offices in Germany, the Netherlands and Finland had implemented the new SOP, they jointly rolled it out throughout the group. Process owner special-ists and frontrunners from the lead offices teamed up to show the new process and to share implementation experiences.

Then local frontrunners took over and dealt with most of the implementation themselves.

Bi-weekly reports and phone conferences between frontrunner and the process specialist together with the process owner supported by a few follow-up visits were the tools to get the SOP really implemented in each country.

During the implementation period whiteboard meetings became the communication tool internally in the departments. This was where tasks agreed upon were followed up and new initiatives noted.

Keeping the spirit alive After the implementation, continu-ous improvement of the SOP was taken over by the process owner who makes sure that processes are kept at Unifeeder standard and that local improvements are imple mented in all offices. The process owner carries out audits to ensure that SOPs are followed and that whiteboard meetings are held to keep the spirit of continu-ous improvement alive.

Nothing but the best The work performed by the employees involved has signifi-cantly improved the procedures and thereby the service provided to Unifeeder’s customers. Proce-dures are now standardised and everyone knows how to perform quality customer service, irrespec-tive of seniority.

The continuous improvement of processes is a strategic priority. At any point in time Unifeeder has eight to nine task forces in the field, engaged in efforts to bring processes to the level of best practice

CASE: Lean booking for Shortsea customers Lean makes sure all have the same script Lean systems give people at all levels of the organisation the skills and a shared way of thinking about systematically improving activities, connec-tions, processes and work-flows. By cultivating the skills of a learning organisation and creating an environment of real-time learning nearest to the problem or point of impact, all employees can contribute to the success of the firm.

For Unifeeder, lean means 1. having uniform procedures

for performing service to customers

2. ensuring high quality of the service performed, internal or external

3. ensuring fast flow4. improving efficiency and

scalability


Act 4 Directing the cast Agility is a key feature of Unifeeder’s identity. It means having the imagination to foresee and act upon customers’ requests even before they are expressed. It means being sensitive and responsive towards customers and colleagues in everything you do. It means being able to improvise – to create on the spur of the moment and in response to the stimulus of your immediate environment.

How can you encourage all employees and the organisation itself to develop such agility? What strategies has Unifeeder adopted?

Office exchange One way to go about it is to get people across the entire organisation to know each other better. Unifeeder has employees in nine countries. The nature of the business means they have to communicate closely. By spending time working in another office than their own, employees will develop ties with each other faster than otherwise would be the case. Within this framework, employees or groups of employees can inspire or be inspired by others. Unifeeeder currently has 15 people working from offices other than their own.

Trust people to do the right thing Another way is to trust people or groups of people to take respon-sibility themselves. This will speed up decision-making, which is an essential part of agility. Pay Unifeeder a visit and you will see people everywhere gathering in informal groups that make decisions on the spot in the everyday business context as and when the need arises.

Uniting Unifeeder Unifeeder regularly invites all employees to conferences to inspire, educate and mobilise them - and to enable them to get to know each other. Such events, the most recent of which took place in Hamburg in the autumn of 2011, contribute greatly to the whole being larger than the sum of its parts. Ensemble play, as it would be called in the theatre world.

Unifeeder’s values reflect its appreciation of team spirit and corporate culture.

It is all about people

We dare to take responsibility

We are dedicated to serving our customers

We are committed to continuous improvement

Unifeeder’s VALUES


Broadening viewsWith offices in nine countries, we encourage our employees to broaden their minds and gain international experience by working in offices other than their own for shorter or longer periods.

Andreas Blankenburg Andreas Blankenburg, 39, is one of our talents who took the opportunity that was offered to him in 2009 to assume new responsibilities and to take further steps in his career.

Trained and qualified in shipping at world renowned shipping company Hapag-Lloyd, Andreas joined Unifeeder in 1995. He did well in Unifeeder’s office in Hamburg and when offices submitted names for an exchange of employees Andreas was one of the candidates.

At the same time Unifeedeer was looking for a young and talented person to complement Capacity Management in Aarhus. So Andreas was offered a temporary job in Aarhus. He worked there for a total of 16 months before he returned to Hamburg in the autumn of 2011.

Win-win for all concernedAndreas’ stint at Aarhus proved a huge success. Exchanging information between Aarhus and Hamburg in Capacity Management improved. It also pushed Andreas’ career ahead. Today he heads Unifeeder’s Operations Department in the Hamburg office. He is a member of group wide teams responsible for process improvements and execution, contributes to training of apprentices and supports Capacity Management in Aarhus with local input to issues of concern to the whole group. Unifeeder’s exchange programme between offices is a win-win game for all concerned.

Young people are the stars of tomorrow. We coach and nurture them with the right mix of challenges and support

CASE: Coaching the talents


Act 5 Unifeeder picks up the glove Productive division of labour Until recently there has been a clear division of labour between international container ships and feeder vessels. International container ships have brought cargo to and from the continental hubs in Europe, where feeder companies like Unifeeder have picked it up or unloaded it for further transport to fi nal destinations.

Advantages of independent feedering There are many good reasons for international container shipping lines to outsource feed-ering. Fluctuations in business make it diffi cult for international shipping lines to match their resources to demand. Independent feedering services providers serve several clients, which makes it possible to operate on a larger scale and at a more stable and high capacity utilisation rate. Moreover, competition demands that lines concentrate on their core business, not ancillary business like feedering.

Reversal of the trend turns table upside down All went very well for 20 years during which trade volumes on the important Far East – Europe trade seemed to grow unstoppably. So ship owners may be forgiven for ordering new tonnage to accommodate that growth. When the fi nancial crisis that started in 2008 (and is still ongoing) brought global trade development to a standstill, ship owners were left with excess capacity.

Ship owners form alliances To match supply with demand, ship owners cancelled orders, idled ships, reduced the speed and formed alliances. Members of an alliance are not involved in price-setting but in the rationalisation of capacity through such schemes as vessel, terminal and equipment sharing, joint-scheduling, slot chartering, etc. Shipping alliances work like the better-known airline alliances, allowing members to share space on services operated by other members and making the best possible use of capacity. Alliances strive for economies of scale as well as operational synergies.

Repercussions of alliances on feeder businessAlliances made ship owners reconsider also their feeder arrangements. Could some of their excess capacity be used on feeder routes? Rather than making use of independent feeder companies, could international shipping lines use excess capacity for direct calls on main ports on routes to Scandinavia and the Baltic? After all, some of the international container shipping companies have the critical mass to run their own feeders.

Unifeeder has answers to the challenge The more things change, however, the more they stay the same. The reasons for independent feedering are more valid than ever due to its cost eff ectiveness and fl exibility in terms of frequencies and services. In response to the recent development, Unifeeder currently works very closely together with the alliances and their single member lines to provide them with tailor-made feeder service solutions that are cheaper and more frequent than their own - based on Unifeeder’s focus on feedering and our scale advantages.

Both the single shipping lines and the alliances will on a continuous basis consider whether feasible alternative options are available in the market and this is where Unifeeder is constantly at the forefront to make sure that customers achieve the optimal solution. Unifeeder adapts capacity to what the shipping lines require and charges only for what is delivered. No excess, no waste, no lost opportunities. Unifeeder’s solutions have clear and transparent cost structures, safeguarding that there are no reasons con-nected to cost, frequency or general service levels that would make a shipping line or an alliance choose an in-house solution over Unifeeder’s.

Stable partner in all weathers Not to forget that for almost 40 years Unifeeder has been a reliable and stable partner in all weathers, steadily expanding its network into the largest and best connected in Northern Europe, thereby providing its customers with a growing number of opportunities to reach out to end-consumers.

Diff erentiationPerseverance Stability

Flexibility AgilityCost advantagesOutsourcing


Act 6 Unifeeder Shortsea Services – breaking new ground

2011 at a glanceUnifeeder Shortsea Services grew strongly in 2011, which means a continuation of the long-term trend of rising volumes and another all-time-high in terms of TEU.

The success in 2011 is a sign that the product develop-ment and marketing efforts especially in the two last years have borne fruit.

Previous marketing directed towards large European companies paid off. They increased volumes in the second or third year of the contract, showing confidence in and adding power to the coopera-tion with Unifeeder.

In a market under pressure and in which quality considerations seem to have been less pronounced, Unifeeder’s cost optimisation approach has met with consid-erable success. Where existing customers have asked for new tenders, Unifeeder has once again been awarded new contracts, resulting in a continued growth pattern.

Unifeeder has worked hard to define all important components of the implementation of its undertakings towards customers. This has resulted in transparent processes and outcomes which benefit customers.

Unifeeder’s efforts to create a proprietary fleet of containers were rewarded with the apprecia-tion of customers as Unifeeder succeeded in increasing the availability of containers at inland terminals.

Unifeeder’s focus on improvements

Unifeeder Shortsea Services

offers clients all over Europe

environmentally sustainable

or complementary alternatives

to rail and road transport

Classical drama took place in a single physical space, had one plot and played out within 24 hours. In contrast, Unifeeder Shortsea Services delivers goods door to door over distances that span several time-zones in cycles that may take weeks to complete. In doing so Unifeeder ties together numerous subplots involving sea, rail and road transport modes.


The paper and pulp industry’s demand for organic products as replacement for traditional oil-based products has grown in recent years in response to environ-mental concerns.

Bruhn Spedition has enjoyed the confidence of both Europe’s leading starch producers as well as the Swedish and Finnish paper and pulp industry for trans-ports of such organic products for many years.

Supported by Unifeeder’s network, Bruhn Spedition handles the supply chain of industrial starches from door to door, using 30’ purpose-built box-containers and innovative technical solutions. Product integrity and safe handling are absolute imperatives.

An important feature of the solution is the forward stock locations, allowing storage of various qualities in the customer’s vicinity and guaranteeing a just-in-time approach to meet often-volatile production schedules.

“Our customers are dynamic and are well aware of both the economical and environmental advantages of shortsea transportation. They value the commit-ment of Bruhn Spedition and Unifeeder to green logistics and sustainable management. To underline this we supply our customers with performance figures on items like reliability of service and savings on CO2 emissions compared to other modes of transports”, says Mr. Gert Laurĳssens, Managing Director at Bruhn Spedition in Antwerp.

The joint skills of Bruhn Spedition and Unifeeder in specialised transport provide the paper and pulp industry with a powerful and sustainable tool.

CASE: STARCH for the paper and pulp industry – Unifeeder’s network capabilities realise

the potential of intermodal solutions

...releases UNIFEEDER ANNUAL REVIEW 201124

Act 7 Getting the acts together...In a demanding and ever evolving market, how does Unifeeder propose to deliver sparkling performances again and again?

As our play has shown, Unifeeder’s continued ability to draw audiences rests on the strengths of its network, people and processes and not less important, its capacity to change and willingness to improve. In the short and long term, regardless of market uncertainties and turmoil.

Unifeeder’s network is a steady yet pliable platform for Feeder Services and Shortsea Services. New hubs, ports and loops are added or adapted as customers change ways of doing business or as the logistical landscape develops in other ways.

As for the offering, Unifeeder is always looking for ways to add value, to accommodate and to anticipate customer needs.

Backstage excellenceHowever, delivering sparkling performances repeatedly requires not only a good script, superb actors and first-class props but also excellence in the wings and backstage. The daily work behind the scenes away from the lime-light may seem incidental but in fact is crucial. Unifeeder’s belief in its ability to deliver solutions that make a differ-erence to customers is in no small part due to its attention to details and the smooth running of the engine that powers the play. The basic feeder and shortsea craftmanship is where Unifeeder wants to excel and where our heart lies.

Unifeeder has grown from a small feedering company to a major logistics player that enjoys the trust of almost all the world’s leading international container shipping lines and some of the largest manufacturing companies in Europe.

Unifeeder takes pride in that trust and will work hard to keep earning it.


a sparkling performance


Director’s cut – Unifeeder stays its courseA few years ago Unifeeeder set itself a goal of moving 3.5 million TEU by 2015. Last year you moved almost 2 million. Is the goal within reach?

We have grown our volumes at a double-digit rate in the last two years. Of course we are also affected by the recent develop-ment in global trade. However, as we have tried to show in our play, we believe our business model and products are efficient answers to the chal-lenges of turbulent times, also for the years to come.

Where do you see future growth coming from?

Organically, there are still substantial untapped feeder vol-umes and co-operation possibilities in our present market. And there is a tremendous amount of new busi-ness to be done in the shortsea segment.

As for other ways to grow, we are always considering a number of initiatives in terms of new geographies, acquisitions and new products.

Does that growth require additional financing?

Given our asset-light and scalable busi-ness model, organic growth requires little additional financing. Acquisitions are differ-ent but our financial position is good and so is our cash flow.

The EBIT-margin has dropped from 11.0 per cent in 2010 to 9.3 per cent in 2011. What were the main reasons?

There has been and there is still downward pressure on freight rates for our custom-ers and us. We do not compete solely on price but price is of course important for our customers.

Another reason for the drop in margins is that increasing bunker costs add to both revenues and costs but not to our profits, thereby creating the impression of falling margins.

Last year saw another all-time-high for volumes handled by Unifeeder Shortsea Services. Could you elaborate on the relationship between Unifeeder Feeder Services and Shortsea Services?

The scale economies of combining shortsea and feedering benefit customers in both segments. And for us it means a better balance operationally and financially. Shortsea now accounts for 25 per cent of our revenue which means that our dependence on feeder operations is less pronounced.

Both business units are of course sensitive to the business cycle but to a variable extent. Above all, they do not move in tandem. The combined scale is however a cross-fertilizing benefit for both areas.

What is the most striking feature of your operational and financial performance in recent years?

We are of course proud of Unifeeder’s growth achievements. Having said that I am espe-cially happy about the resilience of Unifeeder’s overall performance which remains robust also in adverse market conditions. That shows Unifeeder’s ability to navigate in troubled waters and should be a source of calm for all Unifeeder’s stake-holders.


“ We wish to be a source of calm for customers”

Jesper Kristensen, CEO


CORPORATE SOCIAL RESPONSIBILITY

Fuel economy, ethical business and care for employees are at the heart of Unifeeder’s social responsibility

Unifeeder has ambitious policies in the area of environmental, ethical and social responsibility.

Improving fuel economyContinuous improvement permeates opera-tions at Unifeeder and this could not be more true than for vessels’ fuel consump-tion. Unifeeder is known as a demanding and professional charterer of vessels that works closely with ship owners, brokers and the vessels themselves to bring down ship-related costs, among which bunker is one of the most important.

Unifeeder’s Fleet Department in Aarhus has a central role in this respect. Fleet pro-cures bunker for the vessels and monitors consumption on a continuous basis. Over the years, Unifeeder and its partners have achieved substantial reductions of fuel consumption.

All Unifeeder’s vessels must meet the high-est standards of safety and classification. The chartering of new vessels is yielding lower fuel consumption and CO2 per trans-ported unit.

Doing ethical business Unifeeder does not tolerate corruption or fraudulent practices and has taken meas-ures to prevent non-desirable behaviour in and outside the company. The company’s Code of Conduct governs relationships with customers, competitors and suppliers. Managers, sales persons and other relevant employees have been educated in the relevant competition law and signed an agreement that they will at all times com-ply with the rules and that they understand the implications and consequences for Unifeeder.

The Code of Conduct also guides Unifeeder’s employees as regards environmental responsibility and in handling issues dealing with the external community in general.

A copy of the Code of Conduct has been distributed to all employees and is avail-able at Unifeeder’s website. Through these actions and policies Unifeeder has shown that it conducts its business with integrity.

Care for employees and workplace In our officesThe motivation, competences and well-being of employees are crucial to the ability of Unifeeder to compete in the market and deliver on its promises to customers.

Unifeeder is an international company with offices in nine countries and employ-ees from 13 different nations. Unifeeder believes diversity helps the company to generate more ideas and do better busi-

ness and that it promotes the company spirit that Unifeeder wishes to instill.

Unifeeder recognises and rewards talent and work regardless of gender, religion, ethnicity, sexual preferences etc. Unifeeder is an equal opportunity employer.

On vessels and in ports On the high seas and in ports there are always health, safety and environmental risks. Unifeeder has formulated clear HSSE (health, safety, security and environmental) policies that address risks tied to opera-tions and that serve as guidelines for employees, crews and business partners.

60

70

80

90

100

110

120Index Jan 2007 = 100

20112010200920082007

Bunker consumption per TEU-mile

The chartering of modern tonnage, the increased efficiency of the network and higher vessel utilisation ratios have resulted in lower consumption of bunker oil per TEU-mile over the last five years.


Management

legislation

or fraudulent practices

abuse of our position in Unifeeder

when we represent Unifeeder

– We are dedicated to serving our customers – We are committed to continuous

improvement – It is all about people – We dare to take responsibility

Customers

best service in the industry

Suppliers

Unifeeder and expect mutual respect

expect to be treated as such

of any kind are unacceptable

Competitors-

tors and compete on fair terms

customers the best solutions

contact competitors in a way that may bring Unifeeder into conflict with any applicable legislation

Environment, employees and external community

transport solutions that reduce the environ-mental impact

conventions in force at any time

religious and political customs of the coun-tries where we carry out our business

discrimination based on race, religion, sex, age, etc.

employees, and acknowledge our social and environmental responsibility

a Unifeeder employee

Unifeeder is a responsible logistics company that safeguards the health of its personnel and crews and handles goods and equip-ment with the utmost care.

The attestation that Unifeeder has gone through a SQAS assessment is the most recent proof of Unifeeder’s dedication to live up to the highest possible standards in the industry.

SQAS raises the bar The assessment is in line with Unifeeder’ strategic approach towards securing the very large companies across Europe as custom-ers. The chemicals industry is looking for logistics partners that comply with stringent standards in all respects, but above all in the transport of potentially hazardous goods.

Qualifier for tendersThe programme is further a qualifier for participation in requests for tender and to expand cooperation with a number of our existing customers. The quality recognition conferred by the assessment is unique and will give more oppor-tunities to develop the customer base within Unifeeder Shortsea Services.

Facts about SQASSafety and Quality Assess-ment System (SQAS) evaluates the quality, safety, security and environmental performance of logistics service providers and chemical distributors in a uniform manner by a single standardised assessment carried out by independent assessors using a standard questionnaire.

A SQAS assessment offers a detailed factual report which each chemical company or other procurer of logistics service needs to evaluate according to its own requirements.

SQAS is administered by the European Chemical Industry Council (CEFIC).

The SQAS attestation shows Unifeeder’s dedication to stringent environmental standards

Unifeeder’s Code of Conduct


BOARD OF DIRECTORS

HENRIK VON SYDOW, CHAIRMAN

Year of birth: 1952

Director: 2010

Education: B.Sc. in International Finance and Business Administration from Gothenburg School of Economics.

Background: Director of Corporate Strategy and Head of International Freight of Kerry Logistics (2007-2008), CEO of Baltrans Holding (2006-2007), CEO of Wilson Logistics (1991-2004).

Other board positions: Indepen dent advisor and board member for companies in a number of sectors including inter national logistics and internet technology.

Appointed by Montagu Private Equity LLP

JESPER KRISTENSEN

Year of birth: 1967

Director: 2007

Education: Graduate Diploma in Business Admini-stration (Foreign Trade) from Aarhus School of Business and ADP from London Business School.

Background: CEO of Unifeeder (2007-present), Managing Director of Unifeeder Germany (2000-2007) as well as responsible for traffics into Russia and the Baltic region (1997-2007), Representa tive in Hamburg (1999-2000), Department Manager in Aarhus (1995-1999), Representative in Sweden (1992-1994).


CHRISTIAN RASMUSSEN

Year of birth: 1976

Director: 2008

Education: M.Sc. in Applied Economics and Finance from Copenhagen Business School and CFA Charter-holder.

Background: Director at Montagu Private Equity (2007-present), Associate in the Investment Banking Division at Morgan Stanley in London and New York (2003-2007).

Other board positions: Board member of Hansen Protection AS and Montagu Private Equity LLP.


KNUD STUBKJAER

Year of birth: 1956

Director: 2008

Education: A.P. Moeller-Maersk Shipping Academy, IMD Switzerland.

Background: CEO of E.R. Schiffahrt (2008-2011), numerous positions at A.P. Moeller-Maersk (1977-2008) including Partner and member of the executive board of A.P. Moeller-Maersk (2000-2008), Head of Worldwide Liner Activities (1999-2008), Head of Maersk Line United Kingdom, President of Maersk K.K. Japan and Regional Manager A.P. Moeller-Maersk Asia-Middle East-Oceania Region.

Other board positions: Independent advisor and board member for companies in a number of sectors including international logistics.



GROUP MANAGEMENT

JESPER KRISTENSEN

Year of birth: 1967

Title: CEO.

Education: Graduate Diploma in Business Administration (Foreign Trade) from Aarhus School of Business and ADP from London Business School.

JESPER ULDBJERG

Year of birth: 1966

Title: CFO.

Education: M.Sc. in Business Economics and Auditing from Aarhus School of Business.

SIMON GALSGAARD

Year of birth: 1970

Title: Director of Shortsea Services.

Education: CBA (Certificate in Business Administration) from AVT.

ANNEMETTE JEPSEN

Year of birth: 1964

Title: Chief Operations Officer.

Education: Maersk Inter national Shipping Education, Graduate Diploma in Business Administra-tion (Logistics) from Copenhagen Business School. Management courses from Penn State University and Columbia Business School.

KIM LARSEN

Year of birth: 1971

Title: Chief Commercial Officer.

Education: Market Economist from Aalborg Business College and Maersk International Shipping Education.

JON RISVIG

Year of birth: 1976

Title: Director of HR and Business Development.

Education: M.Sc. (Econ) from Aarhus School of Business.


RISK MANAGEMENT

Managing operational and financial risks is an integral part of day-to-day operations. The relative stability of Unifeeder’s revenues and results in recent years testify to the resilience against short term economic downturns.

Operating risks Macroeconomic and market risksThe logistics and transportation market is impacted by the general state of the economy, whereby positive or negative growth can result in under- or over-capacity and price fluctuations.

Global trade, and thus demand for maritime transport, tends to grow faster than GDP over the long term due to greater inter-national economic integration and an increasing geographical fragmentation of production processes. In the short term, however, swings in the global economic cycle may cause more than proportionate fluctuations in demand for sea transport.

Following the decline in global trade volumes of more than 10 per cent in 2009, trade recovered in 2010, only to be affected by the deepening downturn in the global economy in the last six months of 2011. Unifeeder’s volumes, meas-ured as TEU handled, dropped in 2009 and rose substantially in 2010 and in 2011, despite the severity of the economic down-turn. The relative stability of Unifeeder’s revenues and results in recent years is proof of Unifeeder’s resilience to short-term economic volatility.

Charter rates and bunker oil Unifeeder’s asset-light business model offers operational flexibility that makes it possible to adapt capacity to the current demand situation on a short term basis. Fluctuations in charter rates and bunker oil prices constitute the most important risks.

Unifeeder manages a portfolio of vessels with varying sizes and contract terms, expiring continu-ously over the course of the year. In many cases Unifeeder has one-sided options for extension or termination of the charter agree-ments. This reduces the effect of short-term fluctuations in charter rates on Unifeeder. Unifeeder also has a number of purchase options on its vessels. Unifeeder has included a time charter adjust-ment factor to a number of agreements with larger cus-tomers, which means that time charter rates are indexed and that changes in this index affect the final cost for the customer accordingly.

Another large portion of Unifeeder’s costs is attributable to the pur chase of bunker fuel for its vessels. The effect of price changes for the company is lim-ited through a contractual Bunker Adjustment Factor (BAF) that reflects the movements of market price of bunker fuel and through which changes in bunker oil prices

are passed on to customers. This means that Unifeeder to a large extent is hedged from changes in bunker prices albeit with a lag.

ReputationSince its foundation in 1977, Unifeeder has built a strong reputation by consistently offering reliable, high-quality services. Unifeeder ensures that its employ-ees are continuously receiving training regarding company policies to make sure that the company’s best-in-class reputa-tion in the market is maintained.

AcquisitionsUnifeeder will continue to pursue acquisitions where integration and financing risk have to be considered.

ComplianceTo ensure that all relevant rules and regulations are being followed, the company has implemented a comprehensive compliance pro-gramme covering its interaction with all stakeholders. Unifeeder also ensures that its products, organisation and vessels are fully compliant with IMO regulations and other international or national legislation.

SecurityThe risk of unauthorised access to containers during a voyage is

considered to be low. Unifeeder only charters vessels from own-ers that guarantee a high level of security for the containers onboard. In addition, the company has agreements with terminals that guarantee security of the containers in connection with both handling and storage. Such agreements are carried out in accordance with the internationally recognised International Ship and Port facility Security Code (ISPS).The high level of security has been certified through a SQAS attesta-tion. The entire range of services where Unifeeder is involved in the transportation and container handling process is fully insured with reputable insurance agen-cies.

ITUnifeeder’s operations are depend-ent on IT. The company aims to continuously optimise its business processes and operations where IT is an important factor. Unifeeder makes assessments of the systems on a regular basis and has recently invested in a new centralised IT infrastructure at the headquarters in Aarhus with external back-up facilities.

Employees and third-party agenciesUnifeeder is dependent on its ability to attract and retain quali-fied and committed employees.

The company also works closely with third-party agencies to ensure that they offer a level of service as high as that of its own employees.

Financial risks Foreign currency riskMost of Unifeeder’s revenues and expenses are in EUR, meaning that its foreign exchange expo-sure is limited. The company is, however, exposed to fluctuations in the USD due to purchases of bunker oil, however to large extend hedged though customer contracts. The company expects that the DKK fixed exchange rate policy against the EUR will continue and does not hedge its positions in EUR.

Interest riskUnifeeder has limited exposure to interest rate fluctuations due to hedging.

Credit riskUnifeeder’s credit risk relates to trade receivables. The company reviews overdue receivables continuously. The company’s diversified customer base means credit risks are spread over a large number of businesses, and past performance has shown very limited credit losses on the cus-tomer portfolio.


OWNERSHIP AND CORPORATE GOVERNANCE

Exercise of ownershipIn Unifeeder, Montagu exercises its ownership through its directorships at board meetings and in informal and frequent dialogues with the CEO and other members of group management.

Montagu brings expertise to UnifeederMontagu has brought its expertise into play on the stra-tegic, financial and operational levels by being an active participant in determining the value creation approach as well as the broader strategy direction. It has continuously assisted within the field of financing and acquisitions.

As for corporate governance, a number of measures and programmes have been implemented to ensure that Unifeeder adheres to best practices on issues ranging from compliance, audit and assessment to general management.

Board of DirectorsTwo of the four directors, Henrik von Sydow (chairman) and Knud Stubkjaer, are considered independent, with no relationship with Unifeeder or Montagu other than their board positions. Information about the individual directors can be found on page 30.

In 2011 the Board held seven meetings. It is required to meet at least four times annually, with additional meetings being scheduled as required. At the meetings the Board discusses business- and market-related matters, financial reporting, KPIs and the company’s financial posi-tion and strategy, normally including growth and value creation initiatives.

Unifeeder is owned by Montagu, an international private equity investor, which acquired the company in 2007. Thanks to close collaboration at the board and management levels, Unifeeder has benefited from the experience and expertise that comes with private equity ownership.

Montagu is a leading private equity investor in the European mid-market with offices in London, Manchester, Paris, Düsseldorf, Stockholm and Warsaw. Since its inception in 1968

the firm has supported more than 400 businesses operating across a range of different segments and sectors.

Montagu is focused on investing in management buyouts in partnership with the incumbent management team. The firm has a strong track record of delivering superior returns

over time, an extensive network of contacts and offers its portfolio companies capital, financial expertise and strategic assistance in order to unleash their full development and

growth potential.

CommitteesBoard committees may be established by the Board of Directors to prepare decisions and recommendations for evaluation and approval by the Board.

The Board has appointed an audit committee and a remuneration committee. The audit committee discusses and analyses the annual accounts with the auditors, assesses the internal control systems within the company and evaluates to what extent the control procedures of the company are adequate.

The remuneration committee determines compensation for the management and sets remuneration guidelines for the entire Unifeeder organisation.


FINANCIAL REVIEW

Income statementIn 2011 Unifeeder experienced heavily fluctuating transport volumes in its markets.Having increased in the first half of 2011, volumes decreased rapidly in the last half of the year as as result of the global economic downturn and lower demand for transpor-tation in most traffic areas.

Nonetheless Unifeeder was able to increase transported volumes compared with 2010. This was mainly due to an increased trend towards outsourcing of feeder activities by the global container shipping lines, a continuation of and increase in the activities in the UK market (which started in mid-2010) and not least continued investment in expand-ing the activities within the Shortsea business unit, which was able to continue its consider-able growth from the past accounting year.

RevenueRevenue of DKK 3,207 million relates to both Feeder Services and Shortsea Services, with the latter increasing to 25 per cent of Unifeeder’s total revenue. The increase in revenue in 2011 was the result of higher volumes however, as well as increased bunker surcharges (due to rising bunker prices). This has led to increased revenue without an equivalent profit improvement and a technical impair-ment of several earn-ings ratios.

Operating profitMeasured as a percent-age of revenue, operat-ing profit margin was 9.3 per cent. Excluding depreciation and amortisation of DKK 11.2 million, EBITDA was DKK 309 million.

Increasing bunker prices have had a negative effect on profit in 2011 as surcharges are adjusted periodi-cally based on historical averages. As such an

increasing bunker price environment will nega-tively affect short term profits. At the same time the increasing bunker surcharges are lowering profit margins by grow-ing revenues but not actual profit.

Higher costs due to increasing charter rates of the tonnage deployed have put a considerable strain on earnings.

Exceptional and/or non-recurring expensesNon-recurring items of DKK 4 million were realised during the year and comprised costs in connection to strategic initiatives.

Financial and associate income etc.Despite the positive cash position financial items are net negative due to currency adjustments related to inter-company accounts. Investments in associated compa-nies contributed with an income of DKK 0.7 million during the year. Associated company investments relate to

stevedoring activities in Denmark (Aarhus) and Norway (Oslo) as well as an office build-ing in Copenhagen, Denmark.

Net profit for the yearUnifeeder recorded a net profit of DKK 284 million in 2011, corresponding to a net profit margin of 8.9 per cent.

Balance sheetUnifeeder’s total assets amounted to DKK 792 million as at 31 December 2011. Of this property, plant and equipment totalled DKK 10 million (1.3 per cent of total assets).

Intangible assets amounted to DKK 124 million and mainly comprise goodwill related to the acquisi-tion of the IMCL Group completed on 30 December 2009.

Return on assets was 37.6 per cent.

Working capitalWorking capital amounted to DKK 1 million as at 31 December 2011.

The number shows that the operating activities are self-financing.

The liquidity ratio was 170.6 per cent at year end.

EquityShareholders’ equity amounted to DKK 432 million as at 31 December 2011, equal to a solvency ratio of 54.6 per cent.

Net cash positionThe net cash position as at 31 December 2011 was DKK 248 million. The cash is placed in deposits carrying variable rates of interest.

Cash flowCash flow from operat-ing activities amount-ed to DKK 295 million, corresponding to 99.8 per cent of operating profits.

Cash flow exclud-ing acquisitions was DKK 290 million, equal to 9.0 per cent of revenues and 93.9 per cent of EBITDA.

Acquisitions of DKK 34 million repre-

sent payments related to the acquisition of the IMCL Group com-pleted on 30 December 2009.

Cash flow after acquisitions amounted to DKK 257 million, equal to 8.0 per cent of revenue and 90.3 per cent of net profit for 2011.

Conversion of DKKIn the summary financial statements, amounts in DKK have been converted to EUR at the year-end cur-rency rate.

Statement by Group Management and the Board of Directors

on the annual reviewWe have today presented the summary financial

statements of Unifeeder A/S for the financial year

1 January to 31 December 2011, as an extract of our

annual report prepared in accordance with the Danish

Financial Statements Act.

For purposes of obtaining a better understanding

of the company’s financial position and result, the

summary financial statements should be read in the

context of the annual report from which the summary

financial statements were derived.

Aarhus, 26 April 2012

Group ManagementJesper Kristensen, CEO, Annemette Jepsen, Chief

Operations Officer, Simon Galsgaard, Director of Shortsea

Services, Kim Larsen, Chief Commercial Officer,

Jon Risvig, Director of HR and Business Development,

Jesper Uldbjerg, CFO.

Board of DirectorsHenrik von Sydow, Jesper Kristensen,

Christian Rasmussen and Knud Stubkjaer.


CONSOLIDATED INCOME STATEMENT

2011 2010 2011 2010

Thousands DKK DKK EUR EUR

Revenue 3,207,226 2,567,921 431,415 344,484

Costs of sale -2,700,500 - 2,095,428 -363,254 - 281,100

Gross profit 506,726 472,493 68,161 63,384

Administrative expenses -211,546 - 193,275 -28,456 - 25,928

Other operating income 2,856 2,170 385 292

Operating profit 298,036 281,388 40,090 37,748

Financial and associate income, etc -13,838 - 9,508 -1,862 - 1,276

Net profit for the year 284,198 271,880 38,228 36,472


CONSOLIDATED BALANCE SHEET

2011 2010 2011 2010


ASSETS

Intangible assets 123,544 127,181 16,618 17,060

Property, plant and equipment 10,253 12,185 1,379 1,635

Investments in associates 57,861 59,402 7,783 7,969

Other fixed asset investments 549 645 74 87

Fixed assets 192,207 199,413 25,854 26,751

Inventories 43,815 39,124 5,894 5,248

Trade receivables 277,367 310,708 37,310 41,681

Other receivables and prepayments 31,021 25,903 4,173 3,476

Cash and cash equivalents 247,613 291,000 33,307 39,037

Current assets 599,816 666,735 80,684 89,442

TOTAL ASSETS 792,023 866,148 106,538 116,193

LIABILITIES AND EQUITY

Shareholders’ equity 432,129 448,850 58,127 60,213

Provisions 8,334 8,575 1,121 1,150

Trade payables 274,100 309,086 36,871 41,464

Other payables and deferred income 77,460 99,637 10,419 13,366

Short-term debt 351,560 408,723 47,290 54,830

TOTAL LIABILITIES AND EQUITY 792,023 866,148 106,538 116,193


CONSOLIDATED CASH FLOW STATEMENT

2011 2010 2011 2010


Net profit for the year 284,198 271,880 38,228 36,472

Change in working capital, adjustments etc. 10,414 - 1,030 1,401 - 138

Cash flow from operating activities 294,612 270,850 39,629 36,334

Investments -5,630 - 6,339 -757 - 850

Acquisitions -33,570 - 24,466 -4,516 - 3,282

Dividend received 1,250 2,500 168 335

Cash flow from investing activities -37,950 - 28,305 -5,105 - 3,797

Cash flow after investing activities 256,662 242,545 34,524 32,537


REPORT OF THE INDEPENDENT AUDITORS ON THE SUMMARY FINANCIAL STATEMENTSTo the readers of Unifeeder Annual Review 2011

The accompanying summary financial statements, which comprise the “Consolidated Income Statement, Consolidated Balance Sheet and Consolidated Cash Flow Statement” presented in DKK on pages 35–37 in the “Unifeeder Annual Review 2011” for the year then ended are derived from the audited financial statements of Unifeeder A/S for the year ended 31 December 2011. We expressed an unmodified audit opinion on those financial statements in our report dated 26 April 2012.

The “Consolidated Income Statement, Consolidated Balance Sheet and Consolidated Cash Flow Statement” presented in Euro are not derived from the audited financial statements of Unifeeder A/S for the year ended 31 December 2011. Therefore these figures are not part of this opinion.

The summary financial statements do not contain all the disclosures required by the Danish Financial Statements Act. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements of Unifeeder A/S.

Management’s responsibility for the summary financial statementsManagement is responsible for the preparation of a summary of the audited financial statements.

Auditor’s responsibilityOur responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, Engagements to Report on Summary Financial Statements and additional requirements in accordance with Danish audit regulation.

OpinionIn our opinion, the summary financial statements derived from the audited financial statements of Unifeeder A/S for the year ended 31 December 2011 are a fair summary of those financial statements.

Aarhus, 26 April 2012

PricewaterhouseCoopersStatsautoriseret Revisionspartnerselskab

Michael Nielsson Lars Greve JensenState Authorised Public Accountant State Authorised Public Accountant


GLOSSARY

BAFBunker adjustment factor.

ContainerisationGlobalisation of production and consump-tion patterns has been greatly facilitated by the increased use of container trans-portation. This is largely because of the numerous technical and economic advan-tages it possesses over traditional methods of transportation.

CSRCorporate social responsibility.

EBITDAEarnings before interest, tax, depreciation and amortisation.

EBITEarnings before interest and tax.

FeederOn transoceanic routes, international con-tainer shipping lines use large container ships with capacities of up to 15,000 TEU. The cargo is discharged at large trans-shipment (hubs) and reloaded on smaller vessels (feeders) for further transport to the actual port of the destination.

HSSEHealth, safety, security and environment.

IntermodalMovement of goods (in one and the same loading unit or a vehicle) by successive modes of transport without handling of the goods themselves when changing modes. Intermodal transport is therefore a particular type of multimodal transport.

Liquidity ratioCurrent assets/Short-term debt.

MultimodalCarriage of goods by at least two different modes of transport.

Net profit margin, %Net profit times 100/Revenues.

Operating profit margin, %Operating profit times 100/Revenues.

Return on assets, %Operating profit times 100/Total assets.

ShortseaWhen intra-European cargoes are carried from door to door, seaborn transport is combined with rail and/or road into an integrated multimodal transport chain that optimises the whole supply chain rather than each part.

Solvency ratio, %Equity at year end times 100/Total assets.

SQASSafety and Quality Assessment System.

TEUOne TEU (twenty feet equivalent unit) represents the cargo capacity of a standard intermodal container, 20 feet long and 8 feet wide.

Working capitalSum of inventories, receivables and other current assets less current payables.

Unifeeder’s Annual Review 2011 was produced in co-operation with Wildeco. Photography: Getty Images, Kenneth Hellman, iStockphoto, Matton, Jackie Reedy, Scanpix and Unifeeder. Printed by TMG on environmentally friendly paper.

Unifeeder A/S Tel: +45 88 83 00 00Shipping Huset Fax: +45 88 83 00 99Hveensgade 1 www.unifeeder.comDK-8000 Aarhus C

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