ALL THE WAY
Q1
2021
A.P. Møller - Mærsk A/S | Interim Report | 5 May 2021
Esplanaden 50, DK-1263 Copenhagen K / Registration no. 22756214
2A.P. Moller - Maersk Interim Report Q1 | 5 May 2021
Table of contents
3 Directors' Report
- Message from the CEO
- Highlights Q1 2021
- Summary financial information
- Financial review
- Guidance for 2021
- Market update
- Ocean
- Logistics & Services
- Terminals & Towage
- Manufacturing & Others
16 Statement of the Board of Directors and the Executive Board
17 Financials
17 Condensed income statement
- Condensed statement of comprehensive income
- Condensed balance sheet at 31 March
- Condensed cash flow statement
- Condensed statement of changes in equity
- Notes
25 Additional information
- Quarterly summary
- Definition of terms
Contacts for further information
Søren Skou, CEO
Tel. +45 3363 1901
Patrick Jany, CFO
Tel. +45 3363 3106
Investors
Stig Frederiksen, Head of Investor Relations Tel. +45 3363 3106
Media
Signe Wagner, Head of External Relations Tel. +45 3363 1901
The Q2 2021 Interim Report is expected to be announced on 6 August 2021.
Webcast and dial-in information
A webcast relating to the Q1 2021 Interim Report will be held on 5 May 2021 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 2021 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.
Forward-looking statements
The interim report contains forward-looking state- ments. Such statements are subject to risks and uncertainties as numerous factors, many of which are beyond the control of A.P. Moller - Maersk, may cause the actual development and results to differ materially from expectations contained in the interim report.
3 | A.P. Moller - Maersk Interim Report Q1 | 5 May 2021 | Message from the CEO Directors' Report |
Message from the CEO
"A.P. Moller - Maersk delivered an exceptionally strong performance in Q1 2021 with a record profit for the quarter.
The high growth and profitability were driven by solid demand across Ocean, Logistics and Terminals, coupled with strong freight rates. Strong demand combined with bottle necks, lack of capacity and equipment shortage in the global supply chains drove freight rates up significantly.
While the pandemic continues to impact the industry with a temporary economic upside coupled with significant operational challenges, our focus remains on the long- term transformation of our business, prioritising our customer's wish for connected logistic services now and in the future. The need for a strong and accountable logistics partner was evident during the quarter and our integrator-strategy was validated by strong customer support and growth.
In Ocean, EBITDA almost tripled reflecting strong volumes, significant increases in freight rates and lower bunker fuel prices.
Logistics & Services continued its strong growth momentum, driven by organic growth and margin expansion, but also positive synergies from the acquisitions of Performance Team and KGH.
Also, Terminals & Towage had a strong performance, led by terminals with growth in volumes and higher storage income, given congestions in multiple locations.
Those exceptional results came in a persisting difficult environment where countries are still contending with the effects of the pandemic. We have continued to dedicate significant efforts to the safety of our employees and contribute to the societies where we operate, this quarter with a particular emphasis in India.
Overall, I am very pleased with Q1. The strong profitability, with an EBIT of USD 3.1bn compared to USD 552m a year ago led to a ROIC of 15.7% and very strong free cash flow.
Given the strong start of the year and that we now expect the current dynamics to last into the fourth quarter, we have upgraded our guidance significantly. Further- more, we will accelerate the current share buy-back programme for it to be completed as early as September and will subsequently launch a new, additional share buy-back programme of approximately USD 5bn over two years."
Søren Skou
Chief Executive Officer A.P. Moller - Maersk
4 | A.P. Moller - Maersk Interim Report Q1 | 5 May 2021 | Highlights Q1 2021 Directors' Report |
Highlights Q1 2021
- A.P. Moller - Maersk delivered a record performance in Q1 2021 with a significant increase in revenue, EBITDA and EBIT. Profit for the period almost equalled the profit for the full year 2020. Business in Q1, particular in Ocean, was strongly impacted by the significant distortion of demand caused by the ongoing pandemic. Higher demand, mainly on headhaul volumes from exports out of Asia, triggered significant bottlenecks which in turn implied a sharp increase in short-term rates and contract renegotiations.
- Revenue increased by 30% or USD 2.9bn to USD 12.4bn (USD 9.6bn), driven by an increase in Ocean of 31% or USD 2.2bn, while revenue increased in Logistics & Services by 42% or USD 603m. In Terminals & Towage, revenue increased by 20% or USD 178m while Manufacturing & Others saw an increase of USD 47m.
- EBITDA increased to USD 4.0bn (USD 1.5bn), with 85% coming from Ocean and the EBITDA margin increased to 32.5% (15.9%).
- EBIT increased to USD 3.1bn (USD 552m) as a result of a significantly improved EBITDA. The EBIT margin increased to 24.9% (5.8%).
- EBIT in Ocean increased to USD 2.7bn (USD 348m), driven by higher volumes and increase in freight rates and bunker cost reductions from lower fuel prices in Q1 2021 versus Q1 2020.
- In Logistics & Services, EBIT increased to USD 139m (USD 29m) reflecting the significant growth in revenue driven by strong performance across all product offerings.
- In Terminals & Towage, gateway EBIT increased to USD 239m (USD 162m), driven by higher volumes, higher storage income due to congestions and the consolidation of Pipavav, India.
- Free cash flow increased to USD 2.4bn (USD 445m) due to disciplined CAPEX at USD 329m (USD 310m) and good cash flow from operating activities increasing to USD 3.4bn (USD 1.2bn), driven by the significant increase in EBITDA.
- Return on invested capital (ROIC), last twelve months, increased to 15.7% (3.8%), as earnings improved and invested capital declined slightly.
- Net interest-bearing debt decreased to USD 7.7bn (USD 9.2bn end of 2020), as free cash flow of USD 2.4bn was used for dividends of USD 889m and share buy-back of USD 333m, and a net decrease in lease liabilities of USD 324m. Excluding lease liabilities, the Group had a net cash position of USD 677m (debt of USD 485m end of 2020).
- Given the strong cash flow generation and balance sheet the Board of Directors has decided to accelerate the remaining share buy-back programme to be completed within the next five months.
- The guidance for the underlying EBITDA is expected to be in the range of USD 13.0bn-15.0bn and the underlying EBIT in the range of USD 9.0-11.0bn, as announced on 26 April 2021.
5 | A.P. Moller - Maersk Interim Report Q1 | 5 May 2021 | Summary financial information Directors' Report |
Summary financial information
Amounts in USD million
Q1 12M
Income statement | 2021 | 2020 | 2020 | |
Revenue | 12,439 | 9,571 | 39,740 | |
Profit before depreciation, amortisation and impairment losses, etc. (EBITDA) | 4,039 | 1,521 | 8,226 | |
Depreciation, amortisation and impairment losses, net | 1,025 | 1,073 | 4,541 | |
Gain on sale of non-current assets, etc., net | 7 | 19 | 202 | |
Share of profit/loss in joint ventures and associated companies | 76 | 85 | 299 | |
Profit/loss before financial items (EBIT) | 3,097 | 552 | 4,186 | |
Financial items, net | -230 | -215 | -879 | |
Profit/loss before tax | 2,867 | 337 | 3,307 | |
Tax | 150 | 128 | 407 | |
Profit/loss for the period | 2,717 | 209 | 2,900 | |
A.P. Møller - Mærsk A/S' share | 2,697 | 197 | 2,850 | |
Underlying profit/loss1 | 2,712 | 197 | 2,960 | |
Balance sheet | ||||
Total assets | 56,734 | 53,990 | 56,117 | |
Total equity | 31,905 | 27,945 | 30,854 | |
Invested capital | 39,829 | 39,977 | 40,121 | |
Net interest-bearing debt | 7,746 | 11,978 | 9,232 | |
Cash flow statement | ||||
Cash flow from operating activities | 3,433 | 1,216 | 7,828 | |
Gross capital expenditure, excl. acquisitions and divestments (CAPEX) | 329 | 310 | 1,322 | |
Cash flow from financing activities | -2,534 | -1,620 | -5,618 | |
Free cash flow | 2,372 | 445 | 4,648 | |
Financial ratios | ||||
Revenue growth | 30.0% | 0.3% | 2.2% | |
EBITDA margin | 32.5% | 15.9% | 20.7% | |
EBIT margin | 24.9% | 5.8% | 10.5% | |
Cash conversion | 85% | 80% | 95% | |
Return on invested capital after tax (ROIC) (last twelve months) | 15.7% | 3.8% | 9.4% | |
Equity ratio | 56.2% | 51.8% | 55.0% | |
Underlying ROIC1 (last twelve months) | 15.9% | 3.8% | 9.6% | |
Underlying EBITDA1 | 4,039 | 1,521 | 8,324 | |
Underlying EBITDA margin1 | 32.5% | 15.9% | 20.9% | |
Underlying EBIT1 | 3,092 | 540 | 4,231 | |
Underlying EBIT margin1 | 24.9% | 5.6% | 10.6% | |
Stock market ratios | ||||
Earnings per share - USD | 139 | 10 | 145 | |
Diluted earnings per share - USD | 139 | 10 | 145 | |
Cash flow from operating activities per share, USD | 178 | 61 | 399 | |
Share price (B share), end of period, DKK | 14,735 | 6,092 | 13,595 | |
Share price (B share), end of period, USD | 2,324 | 894 | 2,246 | |
Total market capitalisation, end of period, USD | 43,243 | 17,002 | 41,957 | |
1 Underlying profit/loss is profit/loss for the period from continuing operations adjusted for net gains/losses from sale of non-current assets etc. and net impairment losses as well as transaction, restructuring and integration costs related to major transactions. The adjustments are net of tax and include A.P. Moller - Maersk's share of mentioned items in joint ventures and associated companies.
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A.P. Møller-Mærsk A/S published this content on 05 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 May 2021 06:06:02 UTC.