AP Moller Maersk : Maersk Q4 2022 interim report

Q4

2022

ALL THE WAY

A.P. Møller - Mærsk A/S  |  Interim Report  |  8 February 2023

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

Contacts for further information

Vincent Clerc,

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 Q4 2022 Interim Report will be held on

8 February 2023 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 Q4 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

4 May 2023

Interim Report Q1 2023

4 August 2023

Interim Report Q2 2023

3 November 2023

Interim Report Q3 2023

8 February 2024

Annual Report 2023

Contents

Management review
Highlights Q4 2022	3
Summary financial information	4
Review Q4 2022	5
- Strong financial results impacted by normalisation	5
- Winding down in Russia	5
-	Status on acquisitions	5
-	ESG update	5
- Delivering on the roadmap to 2025	5
Financial review Q4 2022	6
Guidance for 2023	7
Segments	8
-	Ocean	8
-	Logistics & Services	9
-	Terminals	11
- Towage & Maritime Services	12
Management's statement	14
Financials
Condensed income statement	15
Condensed statement of comprehensive income	15
Condensed balance sheet at 31 December	16
Condensed cash flow statement	17
Condensed statement of changes in equity	18
Notes	19
Additional information
Quarterly summary	25
Definition of terms	26

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 Q4  |  8 FEBRUARY 2023

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Management review  I  Highlights Q4 2022

Management review

A.P. Moller - Maersk continued to deliver strong results although profitability was at a lower level compared to Q4 2021. Profit was USD 5.0bn (USD 6.1bn) for Q4.

Compared to previous year, results were mainly affected by lower volumes caused by a weakening customer demand which triggered an easing of congestions and operational bottlenecks. Sequentially, freight rates were down from the peak levels reached by mid-2022.

Highlights Q4 2022

Revenue for Q4 decreased by USD 686m to USD 17.8bn (USD 18.5bn), mainly due to a decrease in Ocean of USD 1.3bn, while revenue increased by USD 844m in Logistics & Services and decreased by USD 90m in Terminals. EBITDA decreased by USD 1.5bn to USD 6.5bn (USD 8.0bn), and EBIT decreased by USD 1.5bn to USD 5.1bn (USD 6.6bn) comprising:

Ocean, with a decrease by USD 1.5bn to USD 4.8bn (USD 6.3bn), driven by lower volumes and lower freight rates on shipment rates on routes from Asia to Europe and to North America together with higher costs related to bunker, container handling and network.

Logistics & Services on par at USD 139m (USD 137m), due to the increase in revenue offset by lower margins especially in Managed by Maersk and in Fulfilled by Maersk impacted by the unfolding destocking.

Terminals, with a decrease to USD 232m (USD 307m), mainly due to significantly lower volumes on the US West Coast and in Spain, and lower congestion related storage revenue and volumes in North America.

Free cash flow increased to USD 6.5bn (USD 5.6bn), due to strong cash flows from operating activities of USD 8.2bn (USD 7.9bn), partly offset by CAPEX of USD 895m (USD 1.6bn) and higher capitalised lease instalments of USD 861m (USD 586m), driven by further investments across all segments. Total cash and bank balances, including term deposits and securities increased to USD 28.6bn (USD 16.9bn).

Total distribution of cash to shareholders through share buy-backs was USD 685m in Q4 2022.

	Highlights Q4								USD million
		Revenue	EBITDA		EBIT		CAPEX
		2022	2021	2022	2021	2022	2021	2022	2021
Ocean	13,299	14,589	6,034	7,337	4,817	6,346	427	1,043
Logistics & Services	3,860	3,016	328	219	139	137	174	346
Terminals	999	1,089	288	384	232	307	132	136
Towage & Maritime Services	568	544	82	91	122	-123	118	56
Unallocated activities, eliminations, etc.	-906	-732	-192	-41	-188	-33	44	4
A.P. Moller - Maersk consolidated	17,820	18,506	6,540	7,990	5,122	6,634	895	1,585

A.P. MOLLER - MAERSK  INTERIM REPORT Q4  |  8 FEBRUARY 2023

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Management review  I  Summary financial information

Summary financial information

				Q4	Q4	12M	12M
			Income statement	2022	2021	2022	2021
Revenue	17,820	18,506	81,529	61,787
		Profit before depreciation, amortisation and impairment losses, etc. (EBITDA)	6,540	7,990	36,813	24,036
		Depreciation, amortisation and impairment losses, net	1,612	1,626	6,186	4,944
		Gain on sale of non-current assets, etc., net	33	50	101	96
		Share of profit/loss in joint ventures and associated companies	161	220	132	486
Profit before financial items (EBIT)	5,122	6,634	30,860	19,674
	Financial items, net	171	-343	-629	-944
	Profit before tax	5,293	6,291	30,231	18,730
	Tax	312	182	910	697
Profit for the period	4,981	6,109	29,321	18,033
A.P. Møller - Mærsk A/S' share	4,950	6,094	29,198	17,942
Underlying profit1	4,863	6,278	29,703	18,170
			Balance sheet
			Total assets	93,680	72,271	93,680	72,271
		Total equity	65,032	45,588	65,032	45,588
		Invested capital	52,410	44,043	52,410	44,043
		Net interest-bearing debt	-12,632	-1,530	-12,632	-1,530
		Cash flow statement
		Cash flow from operating activities	8,200	7,880	34,476	22,022
		Capital lease instalments - repayments of lease liabilities	861	586	3,080	2,279
	Gross capital expenditure, excl. acquisitions and divestments (CAPEX)	895	1,585	4,163	2,976
	Cash flow from financing activities	-1,601	-1,370	-14,135	-7,900
	Free cash flow	6,462	5,637	27,107	16,537
	Financial ratios
	Revenue growth	-3.7%	64.4%	32.0%	55.5%
EBITDA margin	36.7%	43.2%	45.2%	38.9%
EBIT margin	28.7%	35.8%	37.9%	31.8%
Cash conversion	125%	99%	94%	92%
Return on invested capital after tax (ROIC) (last twelve months)	60.4%	45.3%	60.4%	45.3%
Equity ratio	69.4%	63.1%	69.4%	63.1%
Underlying ROIC1 (last twelve months)	61.2%	45.7%	61.2%	45.7%
			Underlying EBITDA1	6,517	7,990	36,843	24,036
			Underlying EBITDA margin1	36.6%	43.2%	45.2%	38.9%
			Underlying EBIT1	5,002	6,804	31,244	19,808
			Underlying EBIT margin1	28.1%	36.8%	38.3%	32.1%
			Stock market ratios
			Earnings per share, USD	278	324	1,600	941
		Diluted earnings per share, USD	277	323	1,595	938
		Cash flow from operating activities per share, USD	461	414	1,889	1,155
		Share price (B share), end of period, DKK	15,620	23,450	15,620	23,450
		Share price (B share), end of period, USD	2,242	3,576	2,242	3,576
		Total market capitalisation, end of period, USD	39,135	64,259	39,135	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 Q4  |  8 FEBRUARY 2023

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Management review  I  Review Q4 2022

Review Q4 2022

Strong financial results impacted by normalisation

A.P. Moller - Maersk delivered strong financial results in Q4 2022 as the anticipated normalisation continued.

In Ocean, with lower volumes and market normalisation setting in, deployed capacity is actively being adjusted to meet available demand, and Ocean continues to partner with key customers, offering contract customers additional flexibility and space to help with volatility in their supply chains. A total of 1.9m FFE are currently signed on multi-year deals and the share of long-haul contract volumes stood at 65% (75%).

In Logistics & Services, the development in revenue is driven by inorganic revenue with expanded capabilities through facilitator type acquisitions, while revenue decreased organically as a result of lower volumes and market normalisa- tion in Q4.

In Terminals, business is resilient despite the weakening of the global container market affecting volumes and revenue.

Overall, the businesses performed well in an environment of receding demand and rising inflation.

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, two warehouses and four tugboats 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, in Q3 with the reversal of container impairments and the disposal of GPI, net of translation reserves totalling USD 92m and in Q4 with further reversal of impairments amounting to USD 21m leaving a net EBIT impact of negative USD 511m for 2022.

Russia/Ukraine EBIT impact		USD million
	Q1	Q2	Q3	Q4	2022
	2022	2022	2022	2022
Ocean	-162	93	14	14	-41
Logistics & Services	-53	1	-4	7	-49
Terminals	-485	-	82	-	-403
Towage & Maritime
Services	-18	-	-	-	-18
Total	-718	94	92	21	-511

Status on acquisitions

The acquisition of Martin Bencher Group announced in August 2022 was completed on 2 January 2023 and Martin Bencher Group

was included in the financials for Logistics & Services at the same time.

ESG update

For a full overview of A.P. Moller - Maersk's ESG strategy and roadmap, see  www.maersk.com/sustainability

For a summary ESG update for 2022, reference is made to the Annual Report 2022 for A.P. Moller - Maersk. 

See the 2022 Annual Report

Delivering on the roadmap to 2025

For an update on the roadmap to 2025 with specific targets for the transformation towards becoming the integrator of container logistics, reference is made to A.P. Moller - Maersk's Annual Report 2022. 

See the 2022 Annual Report

A.P. MOLLER - MAERSK  INTERIM REPORT Q4  |  8 FEBRUARY 2023

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