A.P. Moller - Maersk speeds up transformation to improve profitability

As A.P. Moller - Maersk has delivered strong earnings and growth momentum during the last year and saw the strategy of becoming an integrated container logistics company validated, the company now stands ready to further efforts in building the three world class divisions with strong synergies between them. All embedded with a customer-centric, digital and value creation rooted mindset.

The message fell today on the company’s 2021 Capital Markets Day. Here, Maersk will provide institutional investors and financial analysts with updated ambitions on the development and progress in the 2021-2025 horizon.

”Today, we are rapidly transforming our A.P. Moller - Maersk in line with our strategy. We have come far, but we are not yet done. We continue to see a significant opportunity in the market for global end-to-end logistics and are confident that we can continue to deliver value generating returns above 7.5 pct. ROIC, considering the extraordinary earning levels of 2021 an average of above 12 pct. for the five year period 2021-2025,” said CEO, Søren Skou, A.P. Moller - Maersk.

In the heart of Maersk´s integrator strategy lies the value creation model, which links Logistics and Ocean through customer synergies and Ocean and Terminals though financials and operational synergies. Whereas, Ocean will continue to deliver stable earnings levels and strong enabler of the company’s strategy, Logistics & Services aims for significantly higher growth rates and new ways of addressing customers needs.

”With our portfolio, our approach, and the need that we see across customers and verticals, we are confident that Logistics & Services has become our growth engine, capable of growing organically at 10 pct. per year while maintained a strong EBIT margin above 6 pct.” said Vincent Clerc, CEO of Ocean and Logistics, A.P. Moller – Maersk.

To support this growth, Maersk will spend about USD 1 bn of investment of CAPEX over the coming two years and continue to complement this with Mergers and Acquisitions to continue to build up capabilities and progressively scale.

Also, on the terminal side, Maersk will focus on best-in-class returns and over the next five years the company plans to invest approximately USD 600 mill in total on automation in around 30 terminals. The company has already seen significant improvements on the operational side as well as reductions of carbon emissions from increased use of automation.

Financially, Maersk will continue to secure a financial solidity and guides for a stable underlying profitability and cash generation through continued capital discipline with CAPEX close to depreciation.

”We will continue to execute on the strategy through capital discipline. Given the financial strength of the company we are able to maintain a strong balance sheet and use cash to invest in business, acquisitions, ordinary dividends and lastly return excess cash through share buy-back or extra-ordinary dividends,” said CEO, Søren Skou, A.P. Moller - Maersk.

Maersk also announced the signing of the UN Global Compact commitment letter to a “Business Ambition of 1.5C”, committing to set a long-term science-based target to reach net-zero emissions across the full value chain no later than 2050 and set interim targets in line with Science Based Targets initiative criteria.