AP Moller Maersk : Maersk Q3 2023 Investor presentation

A.P. Møller - Mærsk A/S

Q3 2023 Investor Presentation

Forward-lookingstatements

This presentation contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond the control of A.P. Møller - Mærsk A/S (APMM), may cause actual developments and results to differ materially from the expectations contained in this presentation

Comparative figures

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

2	APMM Q3 2023 Financial Results

Q3 2023

Highlights

3APMM Q3 2023 Financial Results

Highlights

Third quarter in line with expectations, market environment worsening

• Group revenue of USD 12.1bn, with EBIT margin of 4.4%
• Despite a volume recovery in Q3, freight rates declined at an accelerated pace with further significant headwinds expected
• Continued volatile environment with worsening market conditions in Ocean from increased supply, highlighting the need to focus on efficiency and costs
• Full-yearfinancial guidance maintained but APMM now expects results towards the lower end of the previously communicated EBIT and EBITDA ranges

4APMM Q3 2023 Financial Results

Highlights

Comprehensive focus on costs and organizational efficiency intensified

• Restructuring measures expanded
• • Workforce reduced from 110,000 to 103,000 (end of Q3)
  • Further measures announced to reduce below 100,000
  • Expected savings of USD ~600m in 2024
  • Restructuring costs now expected at USD 350m
• Continuous focus on cost measures and efficient utilisation of our assets
• Given the expected continuation of the difficult market environment, APMM is lowering CAPEX and considering all options to preserve cash including reviewing the continuation of the share buy-back programme in 2024

5APMM Q3 2023 Financial Results

Third quarter 2023

Ocean

• Increased volumes combined with excellent asset utilisation
• Supply side risk started to materialize, impacting rates with Ocean now at break-even
• High levels of additional supply expected in Q4 and next year with idling and scrapping now expected to remain at low levels

Normalized to 100																			EBIT margin (%)
300																							50%
250																							40%
																							30%
200																							20%
150																							10%
																							0%
100																							-10%
50	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2 Q3 Q4 Q1 Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3 -20%
	18	18	18	18	19	19	19	19	20	20	20	20	21	21	21	21	22	22	22	22	23	23	23
		Revenue		Loaded volumes		Total Operating Costs		EBIT margin

6APMM Q3 2023 Financial Results

Third quarter 2023

Logistics & Services

• Volumes recovered while we achieved good customer wins
• Lower rates, especially in Air and Landside transportation. E-commerce as well as Retail & Lifestyle verticals remain challenged, particularly in North America
• Increased cost management led to EBIT margin stabilizing
• Progressive margin recovery expected despite weaker rate environment

EBIT
EBITDA (USDm)																												Revenue (USDm)
400																																5,000
300																																4,000
200																																3,000
100																																2,000
0																																1,000
-100																																0
Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
	18	18	18	18		19	19	19	19		20	20	20	20	21	21	21	21	22	22	22	22	23	23	23
														EBITDA				EBIT			Revenue

7APMM Q3 2023 Financial Results

Third quarter 2023

Terminals

• Continued robust, attractive returns with strong EBITDA margin (35%) despite normalisation of storage revenue and inflationary pressure
• Volumes slightly down year-on-year, fully driven by exits and ongoing construction (flat like-for-like)
• ROIC (LTM) above 2021 levels

Revenue (USDm)												ROIC (%)
1,200			1,027	1,089	1,131	1,124	1,117				20
							999			999
		969							950
1,000	915
									876
										15
									13.1
							12.5	12.8	12.3
800							11.9	11.4
					10.9			10.3
			10.0
600	7.4	8.7					7.1	7.4	8.2	7.6			10
400
														5
200
0	Q1	Q2	Q3	Q4		Q1	Q2	Q3	Q4	Q1	Q2	Q3 0
	21	21	21		21	22	22	22	22	23	23	23
						Revenue		ROIC	ROIC excl. Impairment in Russia

8APMM Q3 2023 Financial Results

2021-2025

Expected downturn in Ocean calls for continued focus on transformation of APMM

Intensified cost efforts will accelerate our strategic shift

Segment	KPI	Targets	LTM

APMM

Ocean

Logistics

• Services
  Terminals

Return on invested capital (ROIC) - (LTM)

EBIT margin - under normalised conditions

Execute with the existing fleet size

Organic revenue growth

• hereof from top 200 Ocean customers EBIT margin
  Return on invested capital (ROIC) - (LTM)

Every year >7.5%

Average 2021-25 >12.0%

Above 6%

4.1-4.3m TEU

Above 10%

Min. 50%

Above 6%

Above 9%

17.7%

20.0%

4.2m

-14%

N/A

3.7%

10.3%

2021-2025mid-term targets were introduced at the CMD in May 2021

9APMM Q3 2023 Financial Results

Guidance

Full-year 2023 financial guidance

• APMM now sees global container volume growth in the range of -2% to -0.5% compared to -4% to -1% previously. APMM expects to grow in-line with the market
• Full-year2023 financial outlook: A.P. Moller-Maersk maintains its outlook ranges but now expects results towards the lower end of the previously communicated ranges of underlying EBITDA of USD 9.5 - 11.0bn and underlying EBIT of USD 3.5 - 5.0bn. Guidance for free cash flow (FCF) of at least USD 3.0bn remains unchanged
• CAPEX is now expected at around USD 8.0bn for 2022-2023 (previously USD 9.0 - 10.0bn) and USD 8.0-9.0bn for 2023-2024 (previously USD 10.0 - 11.0bn)
• Restructuring costs increased to USD 350m (previously USD 150m) of which the majority will be recognized in 2023. Total cost savings in 2024 expected to be around USD 600m

10APMM Q3 2023 Financial Results

EBITDA underlying EBIT underlying Free cash flow

9.5-11.0	3.5-5.0	≥3.0
At lower end of range	At lower end of range	USDbn
USDbn	USDbn

CAPEX guidance 2022-2023 CAPEX guidance 2023-2024

~8.0	8.0-9.0
USDbn	USDbn