A.P. Moller Maersk

EXECUTIVE BOARD • Søren Skou (CEO) • Patrick Jany (CFO as of May 2020) • Henriette Thygesen • Morten H. Engelstoft • Vincent Clerc

BOARD OF DIRECTORS • Jim Hagemann Snabe (Chairman) • Ane M. M. Uggla (Vice Chairman) • Arne Karlsson • Bernard Bot • Blythe Masters • Dorothee Blessing • Marc Engel • Robert M. Uggla • Jacob Andersen Sterling • Thomas Lindegaard Madsen

A.P. Moller - Maersk delivered a solid EBITDA of USD 5.7bn (USD 5.0bn) and continues to execute on the strategy transforming the conglomerate to an integrated global transport and logistics company.

A.P. Moller - Maersk was founded by A.P. Møller in 1904. The A.P. Moller Foundation has since its establishment in 1953 been the controlling shareholder of the entities which today make up A.P. Moller - Maersk. The Foundation’s shareholding is held by A.P. Møller Holding A/S, which holds 41.51% of the shares and 51.45% of the voting rights in A.P. Møller - Mærsk A/S.

THE YEAR IN BRIEF A.P. Moller - Maersk continued to progress on the transformation journey which was initiated in the autumn of 2016. In 2019, a number of important milestones were met, including the completion of the energy separation with the demerger and separate listing of Maersk Drilling and the integration of Hamburg Süd.

In connection with the full year 2018 results released in February 2019, A.P. Moller - Maersk announced four metrics to measure the progress on the strategic transformation (i) cash return on invested capital (CROIC), (ii) non-ocean revenue, (iii) gross profit in Logistics & Services and (iv) synergy target related to the Hamburg Süd acquisition. A.P. Moller - Maersk has during 2019 seen improvement on all four measures highlighted by an improvement in CROIC from 2.8% in 2018 to 9.3% in 2019.

The transformation from a conglomerate to one focused company continues, including forming a new global frontline simplifying engagement with customers and integrating support functions into global teams, improving service offering while reducing costs. In February 2020, A.P. Moller - Maersk announced the acquisition of the US based warehousing and distribution company Performance Team, to further strengthen its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers.

Safety remains a priority for A.P. Moller - Maersk. Regrettably, three people lost their lives while engaged in operational activities in 2019. A.P. Moller - Maersk works continuously on improving the safety standards, and launched a new safety approach focusing on leadership, accountability and culture in 2019.

STRATEGY REVIEW A.P. Moller - Maersk’s strategic vision is to become the global integrator of container logistics. The vision is based on creating a portfolio of end-to-end products and services in a superior services delivery network with seamless customer engagement.

The strategic initiatives include focus on growing the businesses by innovative new products. Within Ocean, Maersk Spot was launched; a new Ocean product with fixed price and load guarantee. By the end of 2019, Maersk Spot made up approximately 24% of the total spot volumes. On the landside, A.P. Moller - Maersk acquired the brokerage firm Vandegrift in 2019 and announced the acquisition of Performance Team in February 2020, both strong additions to the US based Logistics & Services platform.

The digital initiatives are also progressing with the ambition to deliver a better customer experience. Tradelens, the digital platform developed jointly by IBM and Maersk in 2018, now has partners signing up representing 66% of global container capacity, 98 terminals and 22 customs authorities, all engaged in pilot projects or exchanging data.

During 2019, A.P. Moller - Maersk announced the vision to have net-zero CO2 emissions from the Ocean operation by 2050. This is an important target and shows A.P. Moller - Maersk’s responsibility to pioneer when it comes to climate change.

FINANCIALS A.P. Moller - Maersk reported a flat development in revenue amounting to USD 38.9bn (USD 39.3bn) with a positive contribution from Ocean and Terminals & Towage offset by declined revenue in Logistics & Services of 1.9%. EBITDA was USD 5.7bn (USD 5.0bn) adjusted for IFRS 16 driven by improvement in all segments. Ocean improved its profitability through focused capacity management and lower bunker fuel costs.

Net profit for the year ended at negative USD 44m (USD 3.0bn, driven by the discontinued operations). The net profit for its continuing operations was USD 509m (negative USD 755m). A.P. Moller - Maersk delivered a strong cash conversion of 104% (85%) leading to cash flow from operating activities of USD 5.9bn (USD 4.4bn).

Gross capital expenditure amounted to USD 2.0bn (USD 3.2bn) reflecting the improved capital discipline. The main reduction was experienced in the Ocean segment.

The net interest-bearing debt decreased to USD 11.7bn (USD 15.0bn).

A.P. Moller - Maersk paid a dividend of DKK 150 per share for 2019.

Leading the industry digitisation and changing the structure of how container logistics have been handled for decades, while improving the customer experience, are important steps in transforming A.P. Moller - Maersk.

REVENUE (USDm) – CONTINUING BUSINESS

30,769 27,646 31,189 39,280 38,890

2015 2016 2017 2018 2019

EBITDA (USDm) – CONTINUING BUSINESS

4,633

2,579 3,546 3,809 5,712

2015 2016 2017 2018 2019

UNDERLYING PROFIT (USDm) – CONTINUING BUSINESS

1,658

286 134 546

-547 2015 2016 2017 2018 2019

FREE CASH FLOW (USDm) – CONTINUING BUSINESS

2,415 3,874 6,793

-809

-2,809 2015 2016 2017 2018 2019