A.p. Moller - Maersk A/s Class A · OMXCOP:MAERSK_A
A.p. Moller - Maersk A/s Class A — A.P. Møller - Mærsk — Q1 2020 Earnings Presentation
27 slides from A.p. Moller - Maersk A/s Class A's earnings presentation, May 13, 2020
Slide 1: A.P. Møller - Mærsk A/S Q1 2020 investor and analyst presentation
A.P. Møller - Mærsk A/S Q1 2020 investor and analyst presentation Date: 13 May 2020 Conference Call: 11:00 CET Webcast: investor.maersk.com Classification: Confidential
Slide 2: Forward-looking statements
Forward-looking statements 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
Slide 3: Q1 2020 Key statements
Q1 2020 Key statements 3 Q1 2020 interim report
Slide 4: The journey towards higher earnings and cash flow progresses
Strategic transformation The journey towards higher earnings and cash flow progresses USDm EBITDA USDm USDm Cash flow generation* USDm 1,700 7,000 2,000 LTM 5,000 LTM 6,000 1,500 3,750 5,000 1,000 2,500 1,400 4,000 500 1,250 3,000 1,100 0 0 2,000 -500 -1,250 1,000 -1,000 -2,500 800 0 Q1 16 Q3 16 Q1
Slide 5: Financial highlights for Q1 2020
Key statements Financial highlights for Q1 2020 Continued improvement in profitability and solid free cash generation • Revenue increased marginally to USD 9.6bn, despite lower volumes across all segments due to impact from the COVID-19 pandemic, driven by Ocean. Revenue (USD) EBITDA (USD) • Continu
Slide 6: Strategic Transformation update
Key statements Strategic Transformation update Earnings growth and capex discipline lead to further improvements in CROIC and ROIC • The COVID-19 situation confirms that our integrator strategy is Q1 2020 Q1 2019 FY 2019 the right one and our role in the global supply chains is even more important i
Slide 7: COVID-19 update and response
Key statements COVID-19 update and response The lockdowns have led to significantly lower demand, affecting all parts of the business in A.P. Moller – Maersk. Cost initiatives are in place across the business to mitigate the negative effects from the declining demand • Main cost levers to mitigate d
Slide 8: Q1 interim report Financial highlights
Q1 interim report Financial highlights 8 Q1 2020 interim report
Slide 9: Improvements on all financials
Financial highlights Q1 2020 Improvements on all financials USDm Financial highlights Despite headwinds from 10,000 9,571 weaker global demand, incl. 9,540 Q1 2020 Q1 2019 COVID-19 effects impacting the businesses and the 1,521 implementation of IMO 2020 leading to higher fuel 1,236 prices, profitab
Slide 10: CAPEX reduced significantly
Financial highlights Q1 2020 CAPEX reduced significantly Capex excluding acquisitions and divestments, USDbn CAPEX for Q1 2020 was USD 0.3bn down from USD 0.8bn in Q1 2019, driven by the strong 4.5 1.0 4.0 capital discipline. 4.0 0.9 For 2020 and 2021 the 0.8 3.5 0.8 accumulated CAPEX 3.2 0.7 guidan
Slide 11: Increased free cash flow due to lower CAPEX
Financial highlights Q1 2020 Increased free cash flow due to lower CAPEX Development in cash flow, USDm Q1 2020 Q1 2019 CFFO of USD 1.2bn 2,000 reflecting a cash conversion of 80% was negatively impacted by an 1,482 1,500 increase in net working capital. 1,216 Free cash flow was 1,000 USD 506m, afte
Slide 12: Net debt increased slightly after dividend and share buy backs
Financial highlights Q1 2020 Net debt increased slightly after dividend and share buy backs Development in net interest-bearing debt, USDbn Net interest bearing 13 debt of USD 12.0bn includes lease +0.2 12.0 liabilities of USD 12 +0.3 11.7 -1.5 +0.3 8.4bn down from +0.4 USD 8.6bn in Q4 11 +0.3 2019.
Slide 13: Consolidated financial information
Financial highlights Consolidated financial information Income statement (USDm) Q1 2020 Q1 2019 FY 2019 Key figures and financials (USDm) Q1 2020 Q1 2019 FY 2019 Revenue 9,571 9,540 38,890 Profit/loss continuing operations 209 -104 509 EBITDA 1,521 1,236 5,712 Gain/loss on sale of non-current assets
Slide 14: Ocean Highlights Q1 2020
Highlights Q1 2020 Development in EBITDA and EBITDA margin (%) Ocean 1,400 20% 1,200 1,000 15% 800 10% 600 • Revenue increased 3.1% compared to Q1 400 5% 2019, mainly due to higher freight rates offset by lower volumes. 200 0 0% • Volumes declined 3.2% mainly due to COVID- Q1 19 Q2 19 Q3 19 Q4 19 Q1
Slide 15: Ocean - Higher fuel prices and volume decline fully mitigated
Ocean - highlights Q1 2020 Higher fuel prices and volume decline fully mitigated USDm 0 EBITDA Freight Bunker Volume Container Network cost Others Unrealised EBITDA Q1 2019 rates price effect handling cost, and bunker derivative gains Q1 2020 effect excl. volume consumption on inventory effect hedge
Slide 16: Ocean - Higher freight rates compensated increases in bunker prices
Ocean - highlights Q1 2020 Higher freight rates compensated increases in bunker prices • Freight rates increased in Q1 2020 in an effort to compensate for Average loaded the more expensive IMO 2020 compliant fuel. freight rates Q1 2020 Q1 2019 Change Change FY 2019 % (USD/FFE) • Average freight rate
Slide 17: Ocean - Agile capacity management mitigated lower volumes
Ocean - highlights Q1 2020 Agile capacity management mitigated lower volumes • Total operating costs increased 5.2% to USD 6.4bn (USD 6.0bn), Unit cost at fixed bunker* Total unit cost was 2,110 6.1% adjusted for FX, mainly due to higher bunker prices and cost of decreased by 2.3% to 2,026 USD/FFE (
Slide 18: Logistics & Services Highlights Q1 2020
Highlights Q1 2020 Development in gross profit and gross profit margin (%) Logistics & Services 400 25% 20.3% 20.8% 21.2% 350 18.5% 18.7% 20% 300 250 15% 200 • Revenue declined 5.1% mainly due to lower 150 10% revenue in intermodal and sea freight 100 forwarding. 5% 50 • Gross profit increased by 8.
Slide 19: Logistics & Services - Improved gross profit and EBIT conversion
Logistics & Services - highlights Q1 2020 Improved gross profit and EBIT conversion • The gross profit margin improved by 2.7%-points to 21.2%, supported by growth in profitable regions and the continued Gross profit improved 8.9% EBIT conversion ratio was 9.4% to USD 306m (USD 281m) (6.1%) margin o
Slide 20: Terminals & Towage Highlights Q1 2020
Highlights Q1 2020 Development in EBITDA and EBITDA margin (%) Terminals & Towage 350 35% 300 30% 250 25% 200 20% • Revenue declined by 9.3%, while EBITDA 150 15% increased by 2.6% with a margin of 30.3%. 100 10% • Gateway terminals reported revenue of USD 50 5% 740m (USD 837m), while towage reporte
Slide 21: Terminals & Towage - Margin improvements despite lower volumes
Terminals & Towage - highlights Q1 2020 Margin improvements despite lower volumes • Gateway terminals volumes declined 1.6% (declined 2.0% like- for-like), as volume in North America decreased by 15%, due to Like-for-like throughput declined Utilisation declined by 8.6%-points 2.0% (-0.2% from exter
Slide 22: Stable earnings and cash contribution from JV's and Associates
Terminals & Towage - highlights Q1 2020 Stable earnings and cash contribution from JV’s and Associates Equity weighted EBITDA for gateway terminals 400 1,313 1,400 • The equity weighted EBITDA was on par with Q1 2019, with a negative impact 350 1,202 1,200 from Apapa, lower volumes in North America
Slide 23: Manufacturing & Others Highlights Q1 2020
Highlights Q1 2020 Development in EBITDA and EBITDA margin (%) Manufacturing & Others 60 50 16% 14% 12% 40 10% 30 8% 20 6% • Revenue in Maersk Container Industry 4% decreased to USD 124m (USD 140m), due to 10 2% required shut-down of the factory in Qingdao 0 0% because of COVID-19, however, EBITDA i
Slide 24: Full-year guidance
2020 Full-year guidance 24 Q1 2020 interim report
Slide 25: Guidance for 2020 still suspended
Guidance Guidance for 2020 still suspended A.P. Moller - Maersk suspended the full-year guidance for 2020 (EBITDA Sensitivity guidance before restructuring and integration costs of around USD 5.5bn) on 20 A.P. Moller - Maersk’s financial performance for the full-year 2020 March 2020 due to the COVID
Slide 26: Questions and answers
Questions and answers To ask a question, please press 01 26 Q1 2020 interim report
Slide 27: Final remarks
Final remarks • Profitability in Ocean was protected through successful implementation of IMO 2020, operational efficiencies and agile capacity management leading to significant cost savings • Positive development in free cash flow and CROIC driven by continued lower capex • Strong capital structure