Maersk partners with IB Cargo to offer tailored logistics solutions for IKEA Supply AG in Romania

Maersk and IB Cargo, a Romanian freight forwarding and logistics provider, announce their partnership for the operation of a 75.000 sqm regional distribution centre for IKEA Supply AG, located in CTPark Bucharest West industrial park. The facility, to be completed by end of 2020 and operational by mid-2021, will be the largest warehouse in Romania and will be used by IKEA Supply AG as their distribution centre for inbound and outbound operations for stores in South Eastern Europe and Eastern Mediterranean.

“We are very proud of this project, which will allow us to offer comprehensive and tailored logistics solutions to IKEA Supply AG”, shares Sedef Ayhan, Managing Director, Eastern Mediterranean at Maersk. “This is in line with our strategy of providing integrated logistics solutions and we come with experience from similar projects for IKEA Supply AG in other countries.”

Maersk partners with IB Cargo to offer tailored logistics solutions for IKEA Supply AG in Romania
The new warehouse will hold BREEAM certification, the world’s leading sustainability assessment method for projects, infrastructure and buildings. It will be part of the CTPark Bucharest West, known as the city’s western gateway, conveniently located close to the A1 motorway, the primary East-West corridor in the country and just 10 km from the city’s ring road.
"Over the past 12 years, we have grown in the freight forwarding industry by continuously adding and developing new services, so that we can deliver to our clients not only transport, but solutions that help them grow and optimise. Entering the warehousing market is therefore a natural development for IB Cargo, completing the range of services we offer to the customers. We strongly believe in continuous improvement and we apply those principles also in this project”, shared Catalin Putineanu, Founder and Managing Partner of IB Cargo.


Maersk meets increased customer needs with a dedicated, carbon neutral Pharma warehouse in Poland

To further increase its capabilities in serving pharmaceutical customers in Central Europe, Maersk is launching its second dedicated warehouse in Poland, specifically designed for this customer segment and with carbon neutrality in mind.

Mszczonow, Poland --- Since 2001, Maersk has been offering global pharmaceutical players in Central Europe professional warehousing and distribution services specifically tailored to meet the needs of this demanding customer segment. To further build on this experience and address growing customer needs, Maersk is launching a project to create a second pharmaceutical warehouse as part of its existing warehousing and distribution centre in Mszczonow (Poland), expected to be operational by end of June 2021.

Focus on quality and sustainable solutions
Equipped with a modern, state-of-the-art temperature controlling system that will ensure the safety of sensitive cargo, the new building will be to a large extent powered by renewable energy, ensuring its sustainability and carbon neutrality. The facility will have integrated Quality Management System implemented, based on Good Distribution and Manufacturing Practice (GDP) and ISO certificates.

The warehouse will be an addition to Maersk’s already existing own warehousing and distribution centre in Mszczonow (Poland), which has dedicated sections for human and animal health products and will be operated by a staff of experts in logistics needs of this customer group.

“In such an industry, quality plays a pivotal role and it can only be guaranteed by experienced and competent personnel who have a thorough understanding of specific requirements of pharmaceutical customers”, shares Jakub Mach, Ph.D., Country Cold Chain Logistics Manager at Maersk in Poland. “In that sense, the new project is equally important for the additional warehousing space we will bring to the market, as it is for the capabilities of our people involved in daily operations”.

The new warehousing and distribution centre will in addition offer repacking capabilities, as well as professional transportation services in different temperature ranges (ambient, cold, liquid nitrogen and dry ice) based on a validated Transport Management System.

Preparing for future growth
“Our ambition is to be top choice healthcare logistics provider and No. 1 in Animal Health logistics by offering high quality solutions for the healthcare industry, as well as flexibility in adapting to its specific requirements”, shares Hristo Petkov, Global Vertical Head, Pharma at Maersk. “The pharmaceutical industry is experiencing growth, which we can support with even more warehousing and distribution capacity, coupled with market knowledge and capabilities of our dedicated teams.”

FACT BOX ? new Maersk pharmaceutical warehouse in Mszczonow, Poland
Fully compliant with EU GDP (Good Distribution Practice) (2013/C 343/01), GMP, ISO 9001 [QMS], ISO 13485 [Medical Devices], ISO 22000 [HACCP]

Modern, carbon neutral facility thanks to photovoltaic energy solutions installed, which provide a total of ca. 600 MWh annually

Available space: ca. 15 000 sqm; operational height: 11,5 m; approximate capacity: ca. 24 000 pallet places

Strategic location:

40 km from Warsaw Chopin Airport
Next to S7 motorway, connecting two most populous Polish metropolitan areas ? Silesia and Mazovia with Warsaw
Easy access to A1 and A2 ? two major Polish highways, linking North with South and East with West
Road bypassing the town allows to reduce traffic jams in the proximity of Logistics Park


CP and Maersk reach agreement that will benefit North American customers and the environment

Calgary - Canadian Pacific Railway Limited (TSX: CP) (NYSE: CP) and Maersk have reached an agreement to build and operate a world-class transload and distribution facility in Vancouver to expand CP’s and Maersk Canada’s supply chain options for customers. The CP transload facility will be an expansion of CP’s existing Vancouver Intermodal Facility and thus will benefit from turnkey rail infrastructure.

The transload facility is designed to apply Maersk’s global integrator of container logistics strategy and will offer customers access to a multi-commodity transload facility that will rely on the substantial use of rail instead of truck in the Vancouver market, as CP will shuttle containers to and from the ocean terminals via rail. Maersk’s ambition to establish a sustainable supply chain aligns with CP’s initiatives to fight climate change. This compelling combination will provide an effective and efficient long-term intermodal solution for customers.

“CP’s unique landholdings in Vancouver enable us to bring to market a first-of-its-kind transload facility that creates tremendous opportunity for sustainable growth,” said CP’s President and CEO Keith Creel. “Together with Maersk, the global shipping leader, we will transform intermodal transportation in North America.”

Omar Shamsie, President of Maersk Canada said, “This agreement installs more agile supply chain options and capacity to and from Vancouver for our North American customers. Marketplace fluctuations, e-commerce demands and omnichannel fulfillment are testing every company ? so this integrated logistics solution with CP will clearly elevate supply chain performance.” Vancouver warehouse space has been tight in 2020 ? which, combined with Vancouver ports experiencinghigh utilizations has placed pressure on supply chain performance. “So we applied our global integrator strategy to simplify the current situation and create more end-to-end supply chain solutions by reducing multi-modal handoffs. We can now offer more responsiveness to the pace of business by giving supply chain leaders more control of order timing/fulfillment through inland routing flexibility, better velocity gained from one day savings of rail versus truck and cost savings through seamless transload operations into domestic 53’ trailers. We feel this is quite compelling to lower their year-on-year cost goals while creating a more sustainable supply chain with less truck emissions,” added Mr. Shamsie.

The import transload facility will be operational in 2021.

Note on forward-looking information
This news release contains certain forward-looking information and forward-looking statements (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, statements concerning expectations, beliefs, plans, goals, objectives, assumptions and statements about possible future events, conditions, and results of operations or performance. Forward-looking information may contain statements with words or headings such as "will", "anticipate", "believe", "expect", "plan", "should" or similar words suggesting future outcomes.

This news release contains forward-looking information relating, but not limited to, our operations, priorities and plans, the anticipated timely performance by us and A.P. Moller - Maersk of our respective obligations, planned capital investments including the development of a new import transload facility in the Vancouver area, expansion of CP's existing Vancouver Intermodal Facility, the anticipated timing, impacts and benefits of such planned long-term relationship with Maersk and capital investments including impacts on CP’s operations and prospects for sustainable growth, decarbonization of the supply chain, and anticipated customer perception of Vancouver as a shipping gateway, CP’s ability to fully serve the planned new import transload facility, anticipated growth in the demand for CP’s services and anticipated future rail traffic in the Lower Mainland of British Columbia.

The forward-looking information contained in this news release is based on current expectations, estimates, projections and assumptions, having regard to CP's experience and its perception of historical trends, and includes, but is not limited to, expectations, estimates, projections and assumptions relating to: North American and global economic growth; commodity demand growth; agricultural production; commodity prices and interest rates; performance of our assets and equipment; sufficiency of our budgeted capital expenditures in carrying out our business plan; our ability to complete our capital and maintenance projects on the timelines anticipated; applicable laws, regulations and government policies; the availability and cost of labour, services and infrastructure; the satisfaction by third parties of their obligations to CP; the anticipated impacts of the novel strain of coronavirus (and the disease known as COVID-19); and capital investments by third parties. Although CP believes the expectations, estimates, projections and assumptions reflected in the forward-looking information presented herein are reasonable as of the date hereof, there can be no assurance that they will prove to be correct. Current conditions, economic and otherwise, render assumptions, although reasonable when made, subject to greater uncertainty.

Undue reliance should not be placed on forward-looking information as actual results may differ materially from those expressed or implied by forward-looking information. By its nature, CP's forward-looking information involves inherent risks and uncertainties that could cause actual results to differ materially from the forward looking information, including, but not limited to, the following factors: changes in business strategies; general North American and global economic, credit and business conditions; risks associated with agricultural production, such as weather conditions and insect populations; the availability and price of energy commodities; the effects of competition and pricing pressures; industry capacity; shifts in market demand; changes in commodity prices; uncertainty surrounding timing and volumes of commodities being shipped via CP; inflation; changes in laws, regulations and government policies, including regulation of rates; changes in taxes and tax rates; potential increases in maintenance and operating costs; changes in fuel prices; uncertainties of investigations, proceedings or other types of claims and litigation; labour disputes; risks and liabilities arising from derailments; transportation of dangerous goods; timing of completion of capital and maintenance projects; currency and interest rate fluctuations; trade restrictions or other changes to international trade arrangements; climate change; various events that could disrupt operations, including severe weather, such as droughts, floods, avalanches and earthquakes, and cybersecurity attacks, as well as security threats and governmental response to them, and technological changes; and the pandemic created by the outbreak of the novel strain of coronavirus (and the disease known as COVID-19) and resulting effects on economic conditions, the demand environment for logistics requirements and energy prices, restrictions imposed by public health authorities or governments, fiscal and monetary policy responses by governments and financial institutions, and disruptions to global supply chains. The foregoing list of factors is not exhaustive. These and other factors are detailed from time to time in reports filed by CP with securities regulators in Canada and the United States. Reference should be made to "Risk Factors"and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements" in CP's annual and interim reports on Form 10-K and 10-Q.

The forward-looking information contained in this news release is made as of the date hereof. Except as required by law, CP undertakes no obligation to update publicly or otherwise revise any forward-looking information, or the foregoing assumptions and risks affecting such forward-looking information, whether as a result of new information, future events or otherwise.

About Canadian Pacific
Canadian Pacific is a transcontinental railway in Canada and the United States with direct links to major ports on the west and east coasts. CP provides North American customers a competitive rail service with access to key markets in every corner of the globe. CP is growing with its customers, offering a suite of freight transportation services, logistics solutions and supply chain expertise. Visit cpr.ca to see the rail advantages of CP. CP-IR


A.P. Moller - Maersk completes the acquisition of KGH Customs Services

A.P. Moller - Maersk has on 1 September 2020 finalised the acquisition of KGH Customs Services, a pan-European customs services provider, further strengthening its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its global customers.

“I am very pleased that we can now officially welcome KGH into the Maersk family”, says Karsten Kildahl, Regional Managing Director of Maersk in Europe. “The integration process now begins, and we are very excited to start working together and start learning from one another.”

“The whole KGH team is looking forward to closely collaborating with our new Maersk colleagues on providing a range of different services within the transportation and logistics industry as one combined entity. Our enhanced product portfolio and geographical reach will enable us to serve our customers and their growing needs even better”, says Lars Börjesson, CEO of KGH Customs Services.

During the remainder of 2020, Maersk and KGH teams will work together on establishing a joint operating model and optimal structure to serve their customer base going forward. Customers will meanwhile continue to interact with their current contacts in both organisations and enjoy the usual level of service.

Lars Borjesson, CEO of KGH, will going forward lead the combined customs related activities of both KGH and Maersk in Europe.


Strong performance by A.P. Moller - Maersk in Q2 despite COVID-19 impact


In Q2 2020, A.P. Moller - Maersk improved profitability across all businesses through agile capacity deployment, cost mitigation initiatives and adaption to changed customer needs. The earnings improvement was achieved despite the sharp drop in global volumes following the COVID-19 crisis.

“As expected, the second quarter was materially impacted by COVID-19 and our focus remained on protecting our employees from the virus, serving our customers by keeping our global network of ships sailing and our ports, warehouses and inland transportation networks operating, and helping the societies we are part of fight the virus,” says Søren Skou, CEO of A.P. Moller ? Maersk and continues:

“I am pleased that we despite the headwinds, continued our track record of improving earnings and free cash flow. Our operating earnings improved by 25%, marking the eighth consecutive quarter with year-on-year improvements, driven by strong cost performance across all our businesses, lower fuel prices and higher freight rates in Ocean and increased profitability in Logistics & Services.

With a strong result and a strong balance sheet we are well positioned to financially and strategically come out stronger of the crisis.”

Earnings before interest, tax, depreciation and amortisation (EBITDA) improved to USD 1.7bn, which is higher than the initial expectations in the trading update from June of an EBITDA slightly above USD 1.5bn. The EBITDA margin increased from 14.1% in Q2 last year to 18.9%.

Revenue decreased by 6.5% to USD 9bn, driven by a volume decrease of 16% in Ocean and 14% in gateway terminals. In Ocean, the lower volumes were partly offset by agile capacity deployment of the global network leading to lower costs, together with lower fuel prices and higher freight rates. In Logistics and Services, profitability increased through cost measures, favorable airfreight contribution and the integration of Performance Team, while Terminals & Towage showed their resilience by compensating lower volumes through cost measures.

The continued focus on improving returns showed further results with cash return on invested capital (CROIC), last twelve months improving to 12.5% from 8.9% and ROIC, last twelve months increasing to 4.7% from 1.4% in the previous year.

The net interest-bearing debt was USD 11.6bn compared to USD 11.7bn by the end of 2019, as free cash flow of USD 1.5bn allowed for share buy-back, dividends and acquisitions in the first six months of 2020.

The focus on a strong cost and capital allocation discipline will continue, and more additional cost and structural measures across the business will be taken to offset the negative impact of COVID-19 and fund the next stages of the transformation.

Guidance for 2020

A.P. Moller - Maersk suspended the full-year guidance for 2020 (EBITDA before restructuring and integration costs of around USD 5.5bn) on 20 March 2020 due to the COVID-19 pandemic, given material uncertainties and lack of visibility related to the global demand for container transport and logistics.

Despite the uncertainties related to COVID-19, A.P. Moller - Maersk reinstates its full-year guidance for 2020 and now expects EBITDA to be between USD 6.0bn-7.0bn, before restructuring and integration costs.

The global demand growth for containers is still expected to contract in 2020 due to COVID-19 and for Q3 2020 volumes are expected to progressively recover with a current expectation of a mid-single digit contraction. Organic volume growth in Ocean is expected to be in line with or slightly lower than the average market growth.

The outlook and guidance for 2020 is subject to significant uncertainties related to the COVID-19 pandemic and does not take into consideration a material second lockdown phase. The guidance is also subject to uncertainties related to freight rates, bunker prices and other external factors.

The accumulated guidance on gross capital expenditures excl. acquisitions (CAPEX) for 2020-2021 is still expected to be USD 3.0bn-4.0bn, with steps being taken to reduce CAPEX in 2020. High cash conversion (cash flow from operations compared to EBITDA) is still expected for both years.


A.P. Moller - Maersk to acquire European specialist KGH Customs Services

The acquisition of KGH Customs Services will further strengthen A.P. Moller - Maersk’s logistics and services offerings by creating a solid platform for growth in customs services in Europe.

A.P. Moller - Maersk announces that it has reached an agreement with Bridgepoint Development Capital to acquire KGH Customs Services (KGH), a Sweden-based specialist in trade and customs management services in Europe. This will further enhance Maersk’s capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers.

With its specialised expertise across freight modes (air, ocean, land) and deep knowledge in selected industries, combined with innovative technology, KGH will significantly improve Maersk’s overall offering within customs services. KGH has a strategy focused on digital solutions and technology as an enabler for a more seamless customer experience, which also corresponds with Maersk’s own digital transformation journey.

Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller - Maersk sees KGH as a perfect fit to Maersk offerings within logistics and services as well as another key building block in its strategic ambitions.

“There are no end-to-end solutions without customs clearance. With KGH, we will not only be able to strengthen our capabilities within customs services and related consultancy, but also reach more of our customers in Europe through a larger geographical footprint and digital solutions that will enhance our ability to meet our customers´ end-to-end supply chain needs. We achieve all this in one go instead of having to build our expertise through multiple acquisitions,” says Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller - Maersk.

Based in Gothenburg, Sweden, KGH is a well-known and respected partner to a wide range of authorities, providing valuable consulting and advice, most recently in the connection with Brexit, as advisors to various authorities in the EU and the UK. KGH has in the past years achieved double-digit annual growth resulting in a revenue of approximately SEK 890m in 2019 (USD 95.5m), recurring EBITDA of approximately SEK 160m (USD 17.2) and an EBITDA margin of approximately 18 percent. KGH has 775 employees and a yearly business of 1.98m clearances.

“With Maersk, we will have a long-term home with a company that share our values. By joining forces, we will be able to continue to build on the great success our teams have achieved, and at the same time play a key role in a combined entity providing a range of different services within the transportation and logistics industry. Customs services is an essential part of our customers’ end-to-end needs which we in unison with Maersk will be able to provide with seamlessness and global reach,” says Lars Börjesson, CEO of KGH Customs Services.

The acquisition of KGH makes Maersk an attractive partner for its customers operating in individual countries, as well as for those looking to combine several geographies under one service provider. With the acquisition of KGH, Maersk will have a solid platform for growth in customs services in Europe with own setups operating in 22 European countries with a total of 2.38m clearances on a yearly basis, 960 specialised employees and a combined turnover of SEK 1.02B (USD 109.4m).

Maersk will acquire KGH for a consideration of SEK 2.6B (USD 279.0m) on a cash and debt free basis equivalent to a multiple of 16.3x 2019 EBITDA before synergies, excluding an earn-out component contingent on future Brexit performance. When ramped up, annual EBITDA synergies from the combination are expected to amount to approximately SEK 50m-75m (USD 5.4m-USD 8.0m).

The closing of the acquisition is subject to customary regulatory approvals. Until then, Maersk and KGH remain two separate companies and thus will do their business as usual.


DP World Joins with TradeLens to Digitize Global Supply Chains

DP World, a leading enabler of global trade, has completed the early stages of integration with TradeLens a blockchain-based digital container logistics platform, jointly developed by A.P. Moller - Maersk (MAERSKb.CO) and IBM (NYSE: IBM).

The collaboration between DP World and the TradeLens platform will help accelerate the digitization of global supply chains. DP World aims to connect all its 82 marine and inland container terminals, as well as feeder companies and logistics divisions with TradeLens. In 2019 DP World’s terminals handled 71.2 million TEU (twenty-foot equivalent units) containers from around 70,000 vessels.

TradeLens brings together data from the entire global supply chain ecosystem including shippers, port operators and shipping lines. It also aims to modernise manual and paper-based documents, replacing them with blockchain enabled digital solutions.

For DP World the data from its integration with TradeLens will improve operational efficiency with earlier visibility of container flows across multiple carriers. Such visibility includes confirmation of the transport modality that follows the port stay for each container, which in heavy transhipment or rail ports enable better yard planning. It will also expand the capabilities of DP World’s digital platforms created to move online the management of logistics. The DF Alliance, SeaRates, LandRates and AirRates enable shippers to move cargo to and from anywhere at the click of a mouse, across DP World’s network and beyond.

Sultan Ahmed Bin Sulayem, Group Chairman and Chief Executive Office of DP World said: “Our decision to team up with TradeLens is driven by our vision for intelligent logistics, reducing costs and creating value. DP World is working to deliver integrated supply chain solutions to cargo owners, backed by our global network of ports, terminals, economic zones and inland operations. By working with TradeLens we will accelerate the digitisation of global trade. Modernising the processes by which logistics operate is critical to building more robust and more efficient supply chains which will help economic development and generate more prosperity.”

TradeLens provides visibility across the entire supply chain, from booking to clearance to payments and is built on a wealth of input from the industry including direct integrations with more than 110 ports and terminals, 15+ customs authorities around the world and an increasing number of intermodal providers.

“It is very encouraging to see the continued adoption of the TradeLens platform among global logistics players as it helps global supply chain customers expand and explore the benefits of digital documentation flows. In turn, the broadened geographic scope of the platform provides new opportunities for TradeLens ecosystem participants to innovate and develop digital offerings on the platform,” said Vincent Clerc, CEO of Ocean and Logistics, A.P. Moller - Maersk.

“At its core the TradeLens business model is an open and neutral platform to spur collaboration and digitization between all parties in the supply chain ecosystem. We are excited to welcome DP World and eagerly await the creation of new potential ways of working for shippers and consignees in global trade. With 4 of the 5 largest global port operators actively engaged with TradeLens, the coverage of the ecosystem continues to expand rapidly,” Mike White, CEO GTD Solutions and Head of TradeLens

DP World has already connected Cochin Port (India) with the TradeLens platform via API technology. Plans to collaborate with other DP World business units, including the feeder line Unifeeder, have also been initiated.


A.P. Moller - Maersk to acquire the warehousing and distribution company Performance Team

A.P. Moller - Maersk announces that it has reached an agreement to acquire Performance Team, a US-based warehousing and distribution company, to further strengthen its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers. As a leader in North America Warehousing & Distribution, Performance Team specializes in B2B and B2C distribution solutions within retail, wholesale and e-commerce with 24 warehousing sites. It has a track record of profitable growth of 17% per year for the last four years, and revenue for 2019 of USD 525m.

“With this acquisition we invest in premium operational capabilities to significantly boost our existing Warehousing & Distribution offering. This will strengthen our ability to deliver products and solutions that meet our customers’ end-to-end supply chain needs. With its strong platform, Performance Team is a good match for A.P. Moller - Maersk as they complement our current Warehousing & Distribution proposition to customers in North America and will enable future growth,” said Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller - Maersk.

Maersk is targeting the Warehousing & Distribution component to offer more supply chain options and flexibility to its Ocean customers. The global size of the Warehousing & Distribution sector is estimated at more than USD 200bn and for North America it is USD 50bn.1 There is a significant growth opportunity for 3rd party Warehousing & Distribution players as only a small part of the Warehousing & Distribution sector in North America is currently outsourced and e-commerce is growing 12% annually.2

“We are going all the way for our customers, offering new ways to optimize their supply chains, grow their e-commerce business and find warehouses and distribution options. Performance Team’s expertise, market reputation and scalability will create significant performance gains for our customers that grow and complement our existing Maersk Warehousing & Distribution product in North America. We are especially excited to strengthen our e-commerce fulfillment capabilities since many of our retailers are looking to grow online retail sales in 2020 and beyond,” said Narin Phol, Regional Managing Director of Maersk in North America.

Performance Team is a family run business that began operations in 1987 in California, US. Today, the company operates 24 warehousing sites covering 800,000 square meters across strategic supply chain locations.

“Joining a global container logistics leader like A.P. Moller - Maersk is the ideal fit for Performance Team’s future growth, our customers and associates. Maersk has a significant presence here in the US. They have a continuous improvement mindset like ours and together we can clearly deliver attractive logistics solutions that make our customers more competitive while ensuring our employees grow with the business. Our focus will continue to be customer-centric and we are excited about delivering results for years to come,” said Craig Kaplan, CEO of Performance Team ? who will remain CEO of Performance Team once the transaction closes.

In North America, Maersk Warehousing & Distribution is based in South Gate, California and has a regional network of 20+ facilities strategically located in the United States and Canada that offer warehouse and distribution solutions, including domestic consolidation, e-commerce fulfillment, inland drayage, facility and yard management and other value-added services.

The value of the transaction is USD 545m (EV) including IFRS 16 lease liabilities of around USD 225m. Performance Team 2019 EBITDA adjusted for IFRS 16 effects is estimated at USD 90m. The acquisition is subject to regulatory approvals and the transaction is expected to close 1 April 2020. Until obtaining required regulatory approvals and closing of transaction, Maersk and Performance Team remain two separate companies and thus will do their business as usual.


A.P. Moller - Maersk shows improved performance and strategic progress


Press Release: A.P. Moller - Maersk shows improved performance and strategic progress

Copenhagen, 20 February 2020

A.P. Moller - Maersk improved earnings and free cash flow in 2019, despite weaker market conditions and global container growth of only 1.4%. Earnings before interest, tax, depreciation and amortisation (EBITDA) improved 14% to USD 5.7bn compared to 2018 and the EBITDA margin increased to 14.7%. Revenue decreased slightly to USD 38.9bn in 2019 from USD 39.3bn. Free cash flow was USD 6.8bn, compared to USD 5.1bn last year and CAPEX declined by USD 1.2bn to USD 2bn in 2019.

“Despite weaker market conditions, A.P. Moller - Maersk was able to improve profitability and cash flow. Our cash return was healthy, and we continued the reduction of net interest-bearing debt, leading to a further deleveraging of USD 3.3bn over the year. It gives us a solid starting point for 2020 to further expand our end-to-end offering within container logistics while at the same time managing the market challenges that are obviously out there,” says Søren Skou, CEO of A.P. Moller - Maersk.

In Ocean, EBITDA in 2019 increased 15% to USD 4.4bn and the EBITDA margin of 15.3% increased by 2 percentage points, driven by a lower cost base. Revenue was USD 28.4bn with a small decrease in volumes to 13.3m FFE. Unit cost at fixed bunker decreased by 1.7%, mainly due to improvements in capacity management and foreign exchange rate developments.

In 2019, EBITDA in Logistics & Services increased 24% to USD 238m with an EBITDA margin of 4%, while revenue decreased slightly to USD 6bn from USD 6.1bn, driven by a decrease in sea and air freight forwarding activity, which was only partly offset by an increase in warehousing and distribution.

Terminals & Towage reported an increase in EBITDA of 11% to USD 1.1bn with an EBITDA margin of 28.4% in 2019. Revenue increased 3.2% to USD 3.9bn. In gateway terminals, EBITDA increased by 17% to USD 902m, reflecting an increase in EBITDA margin to 28% and revenue increased by 4.1% to USD 3.2bn. The positive development was driven by a ramp-up of the new terminal in Moin, Costa Rica, higher volumes, higher storage income and reduction in SG&A.

Net interest-bearing debt decreased through the year to USD 11.7bn from USD 15bn in 2018. In 2019, USD 1.3bn was distributed to shareholders via ordinary dividends and share buy backs. An ordinary dividend equal to USD 469m was paid to shareholders and as part of the share buy-back programme announced in May 2019, the company bought back shares worth USD 791m.

A stronger foundation from improved operational performance and a better customer experience

The strategic focus of 2019 was on improving the financial performance on Ocean and creating a better customer experience through increased reliability, improved customer experience and introduction of online services and products such as Maersk Spot, a unique product in the market that offers price and loading guarantee. Also, during the year, we took further steps in the integration of the business on a structural level and how we go to market.

“While we still need to improve returns, we delivered solid progress in our financial performance in 2019 while progressing the business transformation, in spite of weak trade growth, ongoing trade tensions and geopolitical uncertainty in many markets,” explains Søren Skou.

Maersk reported a cash return on invested capital improvement (CROIC) for the full year of 9.3% due to strong cash flow.

Furthermore, non-Ocean revenue increased by 0.1%, when adjusted for the closing of production facilities in Maersk Container Industry. Strong revenue growth in gateway terminals was offset by declining freight forwarding activities. Gross profit in Logistics & Services grew 8.7% to USD 1.2bn, reflecting a gross profit margin of 20%.

Synergies harvested from the Hamburg Süd acquisition and the integration of transport and logistics reached USD 1.2bn, which is above the expected target.

The long-term target on return on invested capital after tax (ROIC) grew to 3.1% in 2019, compared to 0.2% the year before.

Guidance for 2020

A.P. Moller ?Maersk expects an EBITDA of around USD 5.5bn, before restructuring and integration costs.

The organic volume growth in Ocean is expected to be in line with or slightly lower than the estimated average market growth of 1?3% for 2020.

The outlook and guidance for 2020 is subject to significant uncertainties and impacted by the current outbreak of the Coronavirus in China, which has significantly lowered visibility on what to expect in 2020. As factories in China are closed for longer than usual in connection with the Chinese New Year and as a result of the Coronavirus, we expect a weak start to the year.

The guidance for 2020 is also subject to uncertainties related to the implementation of IMO 2020 and the impact on bunker fuel prices and freight rates combined with the weaker macroeconomic conditions and other external factors.

The accumulated guidance on CAPEX for 2020-21 is still USD 3?4bn. A high cash conversion (cash flow from operations compared to EBITDA) is expected for both years.


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