AP Moller Maersk : A.P. Moller - Maersk Q3 2022 Interim Report

Q3

2022

ALL THE WAY

A.P. Møller - Mærsk A/S  |  Interim Report  |  2 November 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

Jesper Lov,

Head of Media Relations

Tel. [phone]

Webcast and dial-in information

A webcast relating to the Q3 2022 Interim Report will be held on

2 November 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 Q3 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

8 February 2023

Annual Report 2022

Contents

Management review
Highlights Q3 2022 ..........................................................................................................................	3
Summary financial information ..................................................................................................	4
Review Q3 2022 .................................................................................................................................	5
- Delivering strong financial results while markets start to normalise .................	5
- Winding down in Russia ............................................................................................................	5
-	Status on acquisitions ...............................................................................................................	5
-	ESG update .....................................................................................................................................	5
- Delivering on the roadmap to 2025 ...................................................................................	7
Financial review Q3 2022 ..............................................................................................................	8
Financial review 9M 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 September .........................................................................	22
Condensed cash flow statement ................................................................................................	23
Condensed statement of changes in equity .........................................................................	24
Notes .......................................................................................................................................................	25
Additional information
Quarterly summary ...........................................................................................................................	31
Definition of terms ............................................................................................................................	32

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 Q3  |  2 NOVEMBER 2022

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Management review  I  Highlights Q3 2022

Management review

A.P. Moller - Maersk continued to deliver record results in Q3 2022 as revenue increased by 37%, and both EBITDA and EBIT increased around 60% compared to Q3 2021. Profit was USD 8.9bn (USD 5.4bn) for Q3 and USD 24.2bn (USD 11.9bn) for the first nine months.

Profitability was driven by the substantially higher freight rates, however, as expected, freight rates began to decline in the second part of the quarter, due to weakening customer demand, coupled with markets beginning to normalise with fewer supply chain disruptions and progressive unwinding of congestion. The acquisition of LF Logistics was completed and the intended acquisition of Martin Bencher Group was announced. While the divestment of Maersk Container Industry was discontinued following regulatory challenges, the divestment of Terminal's participation in Global Ports Investments (GPI), Russia, was completed.

Highlights Q3 2022

Revenue for Q3 increased by USD 6.2bn to USD 22.8bn (USD 16.6bn), mainly due to an increase in Ocean of USD 4.9bn, while revenue increased by USD 1.6bn in Logistics & Services and by USD 90m in Terminals. EBITDA increased by USD 4.0bn to USD 10.9bn (USD 6.9bn), and EBIT increased by USD 3.6bn to USD 9.5bn (USD 5.9bn) with an increase in:

Ocean by USD 3.4bn to USD 8.7bn (USD 5.3bn), mainly driven by significantly higher freight rates on contract and shipment on routes from Asia to Europe and to North America, partly offset by a decrease in volumes and by higher costs related to bunker, container handling and network.

Logistics & Services to USD 258m (USD 194m), mainly due to added revenue from acquisitions and higher volumes, in particular from top 200 customers, however at lower margins especially in Managed by Maersk and in Fulfilled by Maersk, which was impacted by some softness in the current market.

Terminals to USD 357m (USD 325m), mainly due to higher results from higher volumes and prices and by the disposal of GPI, partially offset by impairments. EBIT excluding divestments and impairments was USD 325m.

Free cash flow increased to USD 7.8bn (USD 5.3bn), due to strong cash flows from operating activities of USD 9.4bn (USD 6.6bn), partly offset by CAPEX of USD 906m (USD 610m) and higher capitalised lease instalments of USD 811m (USD 611m), driven by higher investments across all segments. Total cash and bank balances including term deposits increased to USD 22.9bn (USD 11.9bn).

Total distribution of cash to shareholders through share buy-backs was USD 858m in Q3 2022.

On the ESG strategy, A.P. Moller - Maersk made further progress during Q3 on its decarbonisation journey to net zero, announcing new investments, partnerships and logistics facilities that will enable A.P. Moller - Maersk to deliver low carbon solutions for its customers.

	Highlights Q3								USD million
		Revenue	EBITDA		EBIT		CAPEX
		2022	2021	2022	2021	2022	2021	2022	2021
Ocean	18,018	13,093	9,924	6,251	8,734	5,337	520	454
Logistics & Services	4,182	2,601	394	267	258	194	163	57
Terminals	1,117	1,027	391	378	357	325	199	59
Towage & Maritime Services	591	486	127	81	100	35	58	42
Unallocated activities, eliminations, etc.	-1,141	-595	26	-34	28	-32	-34	-2
A.P. Moller - Maersk consolidated	22,767	16,612	10,862	6,943	9,477	5,859	906	610
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					A.P. MOLLER - MAERSK  INTERIM REPORT Q3  |  2 NOVEMBER 2022

Management review  I  Summary financial information

Summary financial information

				Q3	Q3	9M	9M	12M
			Income statement	2022	2021	2022	2021	2021
Revenue	22,767	16,612	63,709	43,281	61,787
		Profit before depreciation, amortisation and impairment
		losses, etc. (EBITDA)	10,862	6,943	30,273	16,046	24,036
		Depreciation, amortisation and impairment losses, net	1,649	1,206	4,574	3,318	4,944
		Gain on sale of non-current assets, etc., net	4	27	68	46	96
		Share of profit/loss in joint ventures and associated companies	260	95	-29	266	486
		Profit before financial items (EBIT)	9,477	5,859	25,738	13,040	19,674
		Financial items, net	-303	-185	-800	-601	-944
Profit before tax	9,174	5,674	24,938	12,439	18,730
	Tax	263	213	598	515	697
Profit for the period	8,911	5,461	24,340	11,924	18,033
A.P. Møller - Mærsk A/S' share	8,879	5,438	24,248	11,848	17,942
Underlying profit1	8,818	5,448	24,840	11,892	18,170
Balance sheet
Total assets	89,058	65,394	89,058	65,394	72,271
Total equity	60,231	39,771	60,231	39,771	45,588
Invested capital	53,386	42,876	53,386	42,876	44,043
Net interest-bearing debt	-6,855	3,123	-6,855	3,123	-1,530
Cash flow statement
Cash flow from operating activities	9,444	6,572	26,276	14,142	22,022
Capital lease instalments - repayments of lease liabilities	811	611	2,219	1,693	2,279
Gross capital expenditure, excl. acquisitions and divestments (CAPEX)	906	610	3,268	1,391	2,976
Cash flow from financing activities	-1,968	-1,853	-12,534	-6,530	-7,900
Free cash flow	7,787	5,298	20,645	10,900	16,537
Financial ratios
Revenue growth	37.1%	67.5%	47.2%	51.9%	55.5%
EBITDA margin	47.7%	41.8%	47.5%	37.1%	38.9%
EBIT margin	41.6%	35.3%	40.4%	30.1%	31.8%
Cash conversion	87%	95%	87%	88%	92%
Return on invested capital after tax (ROIC) (last twelve months)	66.6%	34.5%	66.6%	34.5%	45.3%
Equity ratio	67.6%	60.8%	67.6%	60.8%	63.1%
Underlying ROIC1 (last twelve months)	68.1%	34.5%	68.1%	34.5%	45.7%
Underlying EBITDA1	10,851	6,943	30,326	16,046	24,036
Underlying EBITDA margin1	47.7%	41.8%	47.6%	37.1%	38.9%
Underlying EBIT1	9,381	5,842	26,242	13,004	19,808
Underlying EBIT margin1	41.2%	35.2%	41.2%	30.0%	32.1%
Stock market ratios
Earnings per share, USD	488	287	1,318	620	941
Diluted earnings per share, USD	487	287	1,313	619	938
Cash flow from operating activities per share, USD	519	348	1,428	741	1,155
Share price (B share), end of period, DKK	13,865	17,385	13,865	17,385	23,450
Share price (B share), end of period, USD	1,817	2,707	1,817	2,707	3,576
Total market capitalisation, end of period, USD	32,099	49,637	32,099	49,637	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 Q3  |  2 NOVEMBER 2022

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Management review  I  Review Q3 2022

Review Q3 2022

Delivering strong financial results while markets start to normalise

A.P. Moller - Maersk's strong financial results continued in Q3 2022, with higher earnings in the three main businesses compared to the same quarter last year.

In particular, the earnings in Ocean increased significantly through higher freight rates on both contract and shipments, however, rates started to decline as expected during the latter part of Q3 due to weakening customer demand, as markets began to normalise with fewer supply chain disruptions and a gradual relieve of congestion.

In Logistics & Services, the increase in earnings came from both inorganic growth from recent acquisitions and organic growth. The increase in Terminals was driven by higher volume in Europe and Asia, CPI-related tariff increases, and higher global storage income offset by cost increases.

The businesses experienced pressure on the cost base due to inflation, which is expected to continue for a longer period.

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 since Q1, and in Q3, sale of the minority stake of 30.75% of Global Ports Investments (GPI) was completed. The process of divesting the remaining assets is ongoing.

The original impact on EBIT in Q1 from the Russia/Ukraine situation was less negative due to the reversal in Q2 of USD 94m and in Q3 with the reversal of container impairments and the disposal of GPI, net of translation reserves totalling USD 92m, leaving a net EBIT impact of negative USD 532m for 9M 2022.

Russia/Ukraine EBIT impact		USD million
	Q1 2022	Q2 2022		Q3 2022	9M 2022
Ocean	-162	93		14	-55
Logistics & Services	-53	1		-4	-56
Terminals	-485	-		82	-403
Towage & Maritime
Services	-18	-		-	-18
Total	-718	94		92	-532

Status on acquisitions

The acquisition of LF Logistics was completed in August 2022 and LF Logistics was included in the financials for Logistics & Services for the first time in September.

Status on other intended acquisitions

The creation of a joint venture with Grindrod Intermodal Group in which A.P. Moller - Maersk would own 51% of the group was announced in November 2021 and is expected to close in Q1 2023. In August 2022, the intended acquisition of Martin Bencher, a 25-year-oldDanish-based project logistics business with premium capabilities in designing end-to-end project solutions for its customers, was announced. The intended acquisition is expected to close in Q1 2023. Both transactions are subject to regulatory approvals.

ESG update

In Q3, A.P. Moller - Maersk made further progress on its decarbonisation journey to net zero, announcing new investments, partnerships and logistics facilities that will enable the company to deliver low carbon solutions for its customers.

For a full overview of A.P. Moller - Maersk's ESG strategy and roadmap, please see WWW.MAERSK.COM/SUSTAINABILITY

Green transformation of shipping continues with six additional large container vessels

In addition to the orders announced in 2021 and 2022 of one feeder vessel and 12 large ocean-going container ves- sels, on 5 October 2022, A.P. Moller - Maersk announced an additional order of six large ocean-going vessels that can sail on green methanol. The six vessels will be built by Hyundai Heavy Industries (HHI) and have a nominal capacity of approx. 17,000 containers (Twenty Foot Equivalent - TEU). They will be delivered from 2025 and will replace existing capacity in the fleet. With the order, A.P. Moller - Maersk has now ordered a total of 19 vessels with dual-fuel engines able to operate on green methanol.

A.P. Moller - Maersk engages in green bio-methanol partnership with Debo

A.P. Moller - Maersk adds another methanol partnership with Chinese bioenergy enterprise Debo on the quest to boost global production capacity for the green methanol needed to power the company's vessels.

A.P. MOLLER - MAERSK  INTERIM REPORT Q3  |  2 NOVEMBER 2022

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