AP Moller Maersk : A.P. Moller - Maersk Q2 2022 Interim Report

Q2

2022

ALL THE WAY

A.P. Møller - Mærsk A/S  |  Interim Report  |  3 August 2022

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

Contacts for further information

Søren Skou,

CEO

Tel. [phone]

Patrick Jany,

CFO

Tel. [phone]

Investors

Sarah Spray,

Head of Investor Relations

Tel. [phone]

Media

Signe Wagner,

Head of External Relations

Tel. [phone]

Webcast and dial-in information

A webcast relating to the Q2 2022 Interim Report will be held on

3 August 2022 at 11.00 (CET). Dial-in information on investor.maersk.com.

Presentation material for the web- cast will be available on the same page.

The Interim Report for Q2 2022 of A.P. Møller - Mærsk A/S (further referred to as A.P. Moller - Maersk as the consolidated group of com- panies) 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 statements. 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.

Financial calendar

2 November 2022

Interim Report Q3 2022

8 February 2023

Annual Report 2022

Contents

Management review
Highlights Q2 2022 ..........................................................................................................................	3
Summary financial information ..................................................................................................	4
Review Q2 2022 .................................................................................................................................	5
- Delivering strong financial results with clear customer focus ...............................	5
- Winding down in Russia ............................................................................................................	5
-	Status on acquisitions ...............................................................................................................	5
-	ESG update .....................................................................................................................................	5
-	Change in management ...........................................................................................................	6
- Delivering on the roadmap to 2025 ...................................................................................	7
Financial review Q2 2022 ..............................................................................................................	8
Financial review H1 2022 ..............................................................................................................	9
Guidance for 2022 ............................................................................................................................	10
Market insights ...................................................................................................................................	11
Segments ...............................................................................................................................................	12
-	Ocean .................................................................................................................................................	12
-	Logistics & Services ....................................................................................................................	14
-	Terminals .........................................................................................................................................	16
- Towage & Maritime Services ..................................................................................................	18
Statement of the Board of Directors and the Executive Board ...................................	20
Financials
Condensed income statement ....................................................................................................	21
Condensed statement of comprehensive income .............................................................	21
Condensed balance sheet at 30 June ......................................................................................	22
Condensed cash flow statement ................................................................................................	23
Condensed statement of changes in equity .........................................................................	24
Notes .......................................................................................................................................................	25
Additional information
Quarterly summary ...........................................................................................................................	30
Definition of terms ............................................................................................................................	31

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 100,000+ talents, 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 optimistic 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 Q2  |  3 AUGUST 2022

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Management review  I  Highlights Q2 2022

Management review

A.P. Moller - Maersk continued to deliver record results in Q2 2022 as revenue increased by 52%, and both EBITDA and EBIT more than doubled compared to Q2 2021. Profit was USD 8.6bn (USD 3.7bn) for Q2 and USD 15.4bn (USD 6.5bn) for H1.

The company's focus remains on assisting customers who continue to face exceptional conditions with persisting landside congestion particularly in the United States and Europe. The acquisitions of Pilot Freight Services and Senator International were completed in Q2, and A.P. Moller - Maersk further strengthened its air freight offering by launching Maersk Air Cargo. In Russia, A.P. Moller - Maersk continues the process of winding down operations with the intent to ultimately leave the country.

Highlights Q2 2022

Revenue for Q2 increased by USD 7.4bn to USD 21.7bn (USD 14.2bn), mainly due to an increase in Ocean of USD 6.3bn, while revenue increased by USD 1.3bn in Logistics & Services and by USD 155m in Terminals. EBITDA increased by USD 5.3bn to USD 10.3bn (USD 5.1bn) and EBIT increased by USD 4.9bn to USD 9.0bn (USD 4.1bn) with an increase in:

Ocean by USD 4.9bn to USD 8.5bn (USD 3.6bn), mainly driven by significantly higher freight rates as contract rates continued to be strong despite a progressive softening of short-term rates, slightly offset by a decrease in volumes and by higher costs related to bunker, handling and network.

Logistics & Services to USD 234m (USD 153m), mainly due to higher volumes from new customer wins, increased spending from existing customers and acquisitions.

Terminals to USD 316m (USD 302m), mainly due to higher storage income, partly offset by higher costs.

Free cash flow increased to USD 6.8bn (USD 3.2bn), due to strong cash flows from operating activities of USD 8.6bn (USD 4.1bn), partly offset by CAPEX of USD 1.0bn (USD 452m) and higher capitalised lease instalments of USD 762m (USD 453m), mainly related to vessels and aircraft.

Total distribution of cash to shareholders through share buy-backs was USD 553m in Q2 2022.

On the ESG agenda, A.P. Moller - Maersk's terminal business reached an important milestone towards achieving net zero greenhouse gas emissions in 2040 after having successfully transitioned eight of its European terminals to operating on renewable elec- tricity. Maersk ECO Delivery, the low-carbon shipping product, was in demand with volumes four times higher than in Q2 2021.

As communicated on 2 August, guidance for 2022 has been revised upwards to an underlying EBITDA of around USD 37.0bn (previously around USD 30.0bn), an underlying EBIT of around USD 31.0bn (previously around USD 24.0bn) and a free cash flow above USD 24.0bn (previously above USD 19.0bn).

Based on the improved guidance the Board of Directors has decided to increase the current share buy-backprogramme by USD 500m annually from USD 2.5bn to USD 3.0bn for the years 2022-2025.

	Highlights Q2								USD million
		Revenue	EBITDA		EBIT		CAPEX
		2022	2021	2022	2021	2022	2021	2022	2021
Ocean	17,412	11,072	9,598	4,400	8,526	3,580	517	313
Logistics & Services	3,502	2,168	337	216	234	153	286	36
Terminals	1,124	969	400	370	316	302	105	40
Towage & Maritime Services	579	529	81	95	16	64	93	56
Unallocated activities, eliminations, etc.	-967	-508	-89	-17	-104	-15	7	7
A.P. Moller - Maersk consolidated	21,650	14,230	10,327	5,064	8,988	4,084	1,008	452
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					A.P. MOLLER - MAERSK	INTERIM REPORT Q2  |  3 AUGUST 2022

Management review  I  Summary financial information

Summary financial information

				Q2	Q2	6M	6M	12M
			Income statement	2022	2021	2022	2021	2021
Revenue	21,650	14,230	40,942	26,669	61,787
		Profit before depreciation, amortisation and impairment
		losses, etc. (EBITDA)	10,327	5,064	19,411	9,103	24,036
		Depreciation, amortisation and impairment losses, net	1,418	1,087	2,925	2,112	4,944
		Gain on sale of non-current assets, etc., net	37	12	64	19	96
		Share of profit/loss in joint ventures and associated companies	42	95	-289	171	486
		Profit before financial items (EBIT)	8,988	4,084	16,261	7,181	19,674
		Financial items, net	-203	-186	-497	-416	-944
Profit before tax	8,785	3,898	15,764	6,765	18,730
	Tax	164	152	335	302	697
Profit for the period	8,621	3,746	15,429	6,463	18,033
A.P. Møller - Mærsk A/S' share	8,593	3,713	15,369	6,410	17,942
Underlying profit1	8,553	3,732	16,022	6,444	18,170
Balance sheet
Total assets	80,426	60,040	80,426	60,040	72,271
Total equity	52,586	35,282	52,586	35,282	45,588
Invested capital	49,195	41,481	49,195	41,481	44,043
Net interest-bearing debt	-3,356	6,216	-3,356	6,216	-1,530
Cash flow statement
Cash flow from operating activities	8,611	4,137	16,832	7,570	22,022
Capital lease instalments - repayments of lease liabilities	762	453	1,408	1,082	2,279
Gross capital expenditure, excl. acquisitions and divestments (CAPEX)	1,008	452	2,362	781	2,976
Cash flow from financing activities	-3,046	-2,143	-10,566	-4,677	-7,900
Free cash flow	6,844	3,230	12,858	5,602	16,537
Financial ratios
Revenue growth	52.1%	58.2%	53.5%	43.6%	55.5%
EBITDA margin	47.7%	35.6%	47.4%	34.1%	38.9%
EBIT margin	41.5%	28.7%	39.7%	26.9%	31.8%
Cash conversion	83%	82%	87%	83%	92%
Return on invested capital after tax (ROIC) (last twelve months)	62.5%	23.7%	62.5%	23.7%	45.3%
Equity ratio	65.4%	58.8%	65.4%	58.8%	63.1%
Underlying ROIC1 (last twelve months)	64.2%	24.0%	64.2%	24.0%	45.7%
Underlying EBITDA1	10,289	5,064	19,475	9,103	24,036
Underlying EBITDA margin1	47.5%	35.6%	47.6%	34.1%	38.9%
Underlying EBIT1	8,924	4,070	16,861	7,162	19,808
Underlying EBIT margin1	41.2%	28.6%	41.2%	26.9%	32.1%
Stock market ratios
Earnings per share, USD	466	194	830	333	941
Diluted earnings per share, USD	464	193	827	332	938
Cash flow from operating activities per share, USD	467	215	909	393	1,155
Share price (B share), end of period, DKK	16,555	18,025	16,555	18,025	23,450
Share price (B share), end of period, USD	2,313	2,883	2,313	2,883	3,576
Total market capitalisation, end of period, USD	42,108	54,076	42,108	54,076	64,259

1 Underlying is computed as the relevant performance measure adjusted for the net gains/losses from the sale of non-current assets, etc. and net impairment losses as well as transaction, restructuring and integration costs related to major transactions. The adjustments include A.P. Moller - Maersk's share of mentioned items in joint ventures and associated companies and, when applicable, the adjustments are net of tax.

AMOUNTS IN USD MILLION

A.P. MOLLER - MAERSK  INTERIM REPORT Q2  |  3 AUGUST 2022

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Management review  I  Review Q2 2022

Review Q2 2022

Delivering strong financial results with clear customer focus

A.P. Moller - Maersk's strong financial results continued in Q2 2022, with higher profits compared to Q2 2021 in all three major businesses and record operational results in Ocean and Logistics & Services.

In particular, the profit in Ocean increased significantly through higher freight rates driven by strong contract rates. Record profitability in Logistics & Services came from both acquisitions and organic revenue growth, with new customer wins, increased business with existing customers and realised customer synergies between Logistics

• Services and Ocean. The increase in Terminals was driven by storage income in North America, Consumer Price Index (CPI) related tariff increases and higher volumes offset by cost increases.

Landside congestion continues to be an issue around the world, with additional pressure from the Chinese lockdown which affected most upstream operations­. A.P. Moller - Maersk continues to assist contract customers facing these exceptional conditions, supporting their supply chains by alleviating the persisting landside congestion, through investing in additional equipment and increasing the capacity allocated to contracted volumes.

Winding down in Russia

As previously announced, A.P. Moller - Maersk is winding down its operations in Russia, which will ultimately result in a complete exit from the country. All services to and from Russia have been discontinued, and the process of divesting assets, including a minority stake of 30.75% of Global Ports Investments (GPI), is ongoing.

The impact on EBIT from the Russia/Ukraine situation was less negative due to a reversal in Q2 of USD 93m of certain losses and impairments in Ocean previously recognised in Q1. USD 70m relates to more containers successfully being evacuated from the affected areas than previously anticipated.

The net EBIT impact for H1 2022 is negative USD 624m.

	Russia/Ukraine EBIT impact	USD million
		Q1 2022	Q2 2022	H1 2022
Ocean	-162	93	-69
Logistics & Services	-53	1	-52
Terminals	-485	-	-485
Towage & Maritime Services	-18	-	-18
Total	-718	94	-624

Status on acquisitions

The acquisition of Pilot Freight Services (Pilot) was completed in early May and the acquisition of Senator International­ in early June.

Both Pilot and Senator International have been reported in the financials for Logistics & Services for the first time in May and June respectively.

Status on other intended acquisitions

The intended acquisition of LF Logistics was announced in December 2021 and is expected to close in Q3 2022. The creation of a joint venture with Grindrod Intermodal Group in which A.P. Moller - Maersk would own 51% of the stake was announced in November 2021 and is expected to close in Q4 2022. Both transactions are subject to regulatory approvals.

ESG update

A.P. Moller - Maersk has a comprehensive and ambitious ESG strategy encompassing the full scope of material sustainability risks, responsibilities and opportunities for the company. A.P. Moller - Maersk is guided by three core com- mitments:

• Environment: take leadership in the decarbonisation of logistics
• Social: ensure that people thrive at work by providing a safe and inspiring workplace
• Governance: operate based on responsible business practices.

Progress highlights for Q2 are outlined below. For a full overview of A.P. Moller - Maersk's ESG strategy and roadmap, please see WWW.MAERSK.COM/SUSTAINABILITY.

Eight terminals in Europe now operating on renewable electricity

A.P. Moller - Maersk has an ambitious target of achieving net zero emissions across all scopes by 2040 and an emission reduction target of 70% (scope 1 and 2) by 2030 for Terminals specifically. One of the major pillars of Terminals' decarbonisation strategy is to radically reduce the company's consumption of fossil fuels across terminals by transitioning­ to the use of electricity from renewable­ sources for controlled terminals.

After switching to renewable electricity in APM Terminals Aarhus, Denmark, earlier this year, the company has achieved an important milestone, with all electric equipment at eight European terminals now powered by renewable electricity.

A.P. MOLLER - MAERSK  INTERIM REPORT Q2  |  3 AUGUST 2022

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