AP Moller Maersk : A.P. Moller - Maersk Q1 2023 Interim Report

2023

ALL THE WAY

Q1

A.P. Møller - Mærsk A/S  |  Interim Report  |  4 May 2023

Esplanaden 50, DK-1263Copenhagen K / Registration no. 22756214

Contacts for further information

Vincent Clerc

CEO

Patrick Jany

CFO

Investors

Sarah Spray

Head of Investor Relations

Tel. [phone]

Media

Jesper Lov

Head of Media Relations

Tel. [phone]

Webcast and dial-in information

A webcast relating to the Q1 2023 Interim Report will be held on 4 May 2023 at 11.00 (CET). Dial-in information­ on investor.maersk.com.

Presentation material for the webcast will be available on the same page.

The Interim Report for Q1 2023 of A.P. Møller - Mærsk A/S (further referred to as A.P. Moller - Maersk as the consolidated group of companies) has been prepared in accordance with IAS 34 'Interim Financial Reporting' as issued by the International Accounting Standards Board (IASB) and adopted by the EU and additional Danish disclosure requirements for interim financial reporting of listed companies.

The interim consolidated financial statements have not been subject to audit or review.

Comparative figures

Unless otherwise stated, all figures in parentheses refer to the corresponding figures for the same period prior year.

Financial calendar

04 August

Interim Report Q2 2023

03 November

Interim Report Q3 2023

08 February 2024

Annual Report 2023

Produced in Denmark

Contents

Management review

Highlights Q1 2023	. . . . . . . . . . . . .03
Summary financial information	. . . . . . . . . . . . . . .04
Review Q1 2023	. . . . . . . . . . . . 05
-	Financial results reflect market normalisation . . .	. . . . . . . . . . . . . . . . . . . . 05
-	ESG update	. . . . . . . . . . . .06
Financial guidance and targets	. . . . . . . . . . . . 07
Market insights	. . . . . . . . . . . . .08
Segments	. . . . . . . . . . . . . . . . .09
-	Ocean	. . . . . . . . . . . 09
-	Logistics & Services	. . . . . . . . . . . . .10
-	Terminals	. . . . . . . . . . . . 12
-	Towage & Maritime Services	. . . . . . . . . . . . . . . .13

Financials

Condensed income statement	. . . . . . . . . . . 15. . . .	. . . . .
Condensed statement of comprehensive income	. . . . . . . . . . . . . . . . .15	.
Condensed balance sheet at 31 March	. . . . . . . . . . . . .16. . . .	. . . . .
Condensed cash flow statement	. . . . . . . . . . . .17
Condensed statement of changes in equity	. . . . . . . . . . . . . .18
Notes	. . . . . . . . . . .19. . . .	. . . . .
		. . . . . . . . . . . . . .23. .
Management's statement	. . . . .
Quarterly summary	. . . . . . . . . . . 24
Definition of terms	. . . . . . . . . . . . . . . . . . . . 25

Improving life for all by integrating the world

At A.P. Moller - Maersk, we aspire to provide truly integrated logistics. Across oceans, ports, on land and in the air, we are combining our supply chain infrastructure with the power of our people and technology to drive end-to-end innovation that accelerates our customers' success.

With a dedicated team of 110,000+ employees, operating in more than 130 countries, we explore new frontiers and embrace new technologies because we see change as an opportunity. No matter the challenge, we stay confident and resilient because our values are constant. By living our values, we inspire trust in our efforts to integrate the world and improve life for all.

A.P. MOLLER - MAERSK  INTERIM REPORT Q1  |  4 MAY 2023

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Management review  I  Highlights Q1 2023

Management review

As expected, the trends observed in Q4 2022 continued in Q1 2023, with normalisation in Ocean and Air being accentuated by a strong destocking affecting volumes across all segments. Results continued to come off their Q3 2022 peak with a decrease in revenue year-over-year of 26% to USD 14.2bn (USD 19.3bn), an EBITDA of USD 4.0bn (USD 9.1bn) and an EBIT of USD 2.3bn (USD 7.3bn).

A total distribution of cash to shareholders of USD 10.1bn took place during Q1 2023 through dividends paid of USD 9.4bn and share buy-backs of USD 718m.

Highlights Q1 2023

For A.P. Moller - Maersk, Q1 was solidly in line with expectations. The Ocean contract negotiation season is proceeding in line with expectations, and A.P. Moller - Maersk is pleased to see that its customers continue to see value in having a close contractual relationship with the Group. Given current headwinds, the Group has proactively managed costs and aims to continue this effort in coming quarters.

Guidance for 2023 continues to be based on the expectation of a muted 2023 global GDP growth and that volume declines will stabilise by the end of H1, leading to a more balanced demand environment. In this normalisation path, Q1 is expected to be the best quarter of the financial year.

Free cash flow of USD 4.2bn (USD 6.0bn) declined due to decreased cash flow from operating activities and higher capital leases, slightly offset by higher financial income and lower capital expenditures.

A.P. Moller - Maersk entered into an agreement to divest Maersk Supply Service to A.P. Moller Holding with the closing expected to take place in Q2 2023.

Highlights Q1								USD million
		Revenue	EBITDA		EBIT		CAPEX
		2023	2022	2023	2022	2023	2022	2023	2022
Ocean	9,873	15,570	3,352	8,214	1,969	7,072	538	1,156
Logistics & Services	3,471	2,879	316	319	135	183	128	34
Terminals	876	1,131	291	456	207	-73	111	80
Towage & Maritime Services	602	555	83	79	85	69	64	81
Unallocated activities, eliminations, etc.	-615	-843	-73	16	-70	22	-3	3
A.P. Moller - Maersk consolidated	14,207	19,292	3,969	9,084	2,326	7,273	838	1,354

A.P. MOLLER - MAERSK  INTERIM REPORT Q1  |  4 MAY 2023

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Management review  I  Summary financial information

Summary financial information

					Q1	Q1	12M
				Income statement	2023	2022	2022
Revenue	14,207	19,292	81,529
			Profit before depreciation, amortisation and impairment losses, etc. (EBITDA)	3,969	9,084	36,813
		Depreciation, amortisation and impairment losses, net	1,880	1,507	6,186
		Gain on sale of non-current assets, etc., net	140	27	101
		Share of profit/loss in joint ventures and associated companies	97	-331	132
Profit before financial items (EBIT)	2,326	7,273	30,860
	Financial items, net	190	-294	-629
Profit before tax	2,516	6,979	30,231
Tax	193	171	910
Profit for the period	2,323	6,808	29,321
A.P. Møller - Mærsk A/S' share	2,284	6,776	29,198
Underlying profit1	2,561	7,469	29,703
				Balance sheet
				Total assets	85,490	73,031	93,680
			Total equity	55,833	44,940	65,032
		Invested capital	50,322	45,167	52,410
		Net interest-bearing debt	-7,002	-689	-12,632
		Cash flow statement
		Cash flow from operating activities	5,334	8,221	34,476
		Capital lease instalments - repayments of lease liabilities	825	646	3,080
	Gross capital expenditure, excl. acquisitions and divestments (CAPEX)	838	1,354	4,163
	Cash flow from financing activities	-10,726	-7,520	-14,135
Free cash flow	4,224	6,014	27,107
Financial ratios
Revenue growth	-26.4%	55.1%	32.0%
EBITDA margin	27.9%	47.1%	45.2%
EBIT margin	16.4%	37.7%	37.9%
Cash conversion	134%	90%	94%
Return on invested capital after tax (ROIC) (last twelve months)	49.1%	53.6%	60.4%
Equity ratio	65.3%	61.5%	69.4%
Underlying ROIC1 (last twelve months)	49.0%	55.4%	61.2%
				Underlying EBITDA1	4,037	9,186	36,843
				Underlying EBITDA margin1	28.4%	47.6%	45.2%
				Underlying EBIT1	2,563	7,937	31,244
				Underlying EBIT margin1	18.0%	41.1%	38.3%
				Stock market ratios
				Earnings per share, USD	131	364	1,600
			Diluted earnings per share, USD	131	363	1,595
		Cash flow from operating activities per share, USD	306	442	1,889
		Share price (B share), end of period, DKK	12,445	20,370	15,620
		Share price (B share), end of period, USD	1,816	3,040	2,242
		Total market capitalisation, end of period, USD	30,957	55,662	39,135

1 Definition of terms.  See page 25.

AMOUNTS IN USD MILLION

A.P. MOLLER - MAERSK  INTERIM REPORT Q1  |  4 MAY 2023

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Management review  I  Review Q1 2023

Review Q1 2023

Financial results reflect market normalisation

A.P. Moller - Maersk's Q1 2023 financial results reflect the normali- sation of global demand and supply, characterised by the inventory corrections seen in Western economies over the past two quarters. This resulted in significantly lower profitability of the three main businesses compared to Q1 2022, particularly in Ocean, where the profit was lower due to lower volumes and freight rates.

Revenue increased in Logistics & Services driven by the acquisitions made in 2022, however profit decreased due to lower volumes combined with an increased cost base as Logistics & Services continues to scale for growth. Revenue decreased in Terminals as volumes declined and the release of global port congestion led to lower storage income, particularly in the USA. In addition, Terminals' profit was lower when adjusting for the impairment of Global Port Investment (GPI) in Q1 2022.

Revenue decreased by USD 5.1bn to USD 14.2bn (USD 19.3bn), with a decrease in Ocean of USD 5.7bn, while Terminals saw a decrease of USD 255m, slightly offset by an increase of USD 592m in Logistics & Services.

EBITDA decreased to USD 4.0bn (USD 9.1bn), with a decrease in Ocean of USD 4.9bn due to lower revenue, a decrease in Terminals of USD 165m, while EBITDA was on par in Logistics & Services, driven by the consolidation of acquisitions.

Ocean		Logistics & Services		Terminals
(2022: 8.2bn)		(2022: 319m)		(2022: 456m)
3.4bn		316m		291m

EBIT decreased to USD 2.3bn (USD 7.3bn), with an EBIT margin of 16.4% (37.7%), negatively impacted by the decreased EBITDA, specifically in Logistics & Services, due to higher depreciation and amortisation from acquisitions with an EBIT margin of 3.9% (6.4%). When adjusting for the impairment of the Russian GPI participation in Q1 2022, EBIT decreased in Terminals by USD 205m due to lower volumes and lower storage income.

Ocean		Logistics & Services		Terminals
(2022: 7.1bn)		(2022: 183m)		(2022: -73m)
2.0bn		135m		207m

Comparison of the financials
From 2020 to 2022, the supply side of the logistics industry was	As a result of this exceptional market, freight rates peaked in Q3 2022,
disrupted by COVID-19, which, in addition to the severe impact on	which was the 16th quarter in a row with year-on-year earnings growth
human lives when discovered late 2019, had a significant impact	for A.P. Moller - Maersk. After that, the high demand eventually started
on world trade.	to normalise as congestions eased, and consumer demand declined
	leading to an inventory overhang, the correction of which resulted in
The demand for logistics services significantly increased, and, in turn,	rapid and steep declines in shipped volumes starting in late Q3 2022.
freight rates saw all-time highs due to capacity shortages, where con-
tainer availability and air capacity remained tight, and wait times for	A more normal business environment is expected for H2 2023. The
vessels outside of ports remained lengthy given the bottlenecks in	below table with selected KPIs for Q1 in the years 2019-2023 brings
landside transportation and warehousing.	perspective by comparing with 2019, a more normal year.

Selected KPIs for Q1 2019-2023					USD million
		Q1	Q1	Q1	Q1	Q1
Income statement	2023	2022	2021	2020	2019
Revenue	14,207	19,292	12,439	9,571	9,540
	Ocean	9,873	15,570	9,478	7,230	7,015
	Logistics & Services	3,471	2,879	2,045	1,442	1,521
	Terminals	876	1,131	915	740	837
Profit before depreciation, amortisation and impairment losses, etc. (EBITDA)	3,969	9,084	4,039	1,521	1,236
Profit before financial items (EBIT)	2,326	7,273	3,097	552	230
Profit for the period	2,323	6,808	2,717	209	-656
Cash flow statement
Cash flow from operating activities	5,340	8,221	3,433	1,216	1,482
Gross capital expenditure, excl. acquisitions and divestments (CAPEX)	838	1,354	329	310	778
Free cash flow	4,230	6,014	2,372	445	324
Financial ratios
Revenue growth	-26.4%	55.1%	30.0%	0.3%	2.5%
EBITDA margin	27.9%	47.1%	32.5%	15.9%	13.0%
EBIT margin	16.4%	37.7%	24.9%	5.8%	2.4%

A.P. MOLLER - MAERSK  INTERIM REPORT Q1  |  4 MAY 2023

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