A.P. Moller – Maersk reports record earnings for 2021 and guides for a strong 2022
Copenhagen – A.P. Moller – Maersk delivers record earnings for 2021, which was an exceptional year with a focus on mitigating supply chain risks for customers while strengthening the integrated logistics offering. In 2021, revenue was up 55pct. to USD 61.8bn, EBITDA tripled to USD 24bn and free cash flow was USD 16.5bn, allowing the company to make strategic long-term investments into decarbonization and logistics growth, combined with strong cash distribution to shareholders.
Exceptional market conditions led to record-high growth and profitability in A.P. Moller – Maersk, however it also led to supply chain disruptions and severe challenges for our customers. We spent tremendous efforts in mitigating bottlenecks by expanding capacity across Ocean, improving productivity in Terminals and growing our global logistics footprint. We will continue these efforts as we see the current market situation persist into Q2.
At the same time, we see conversations with customers change from procurement-led freight rate discussions to more holistic conversations on how we truly partner to keep supply chains running end-to-end. This clearly validates our strategy.
The company continued to strengthen its Logistics & Services business throughout 2021, outperforming the market growth with a revenue increase of 41pct. to USD 9.8bn, whereof 62pct. of the 34pct. organic growth came from cross-selling to our Top 200 Ocean customers. Furthermore, six businesses were acquired within the air, e-commerce, warehousing, and fulfillment, and 85 new warehouses opened, improving capabilities and footprint across the product portfolio.
Within Ocean, profitability increased substantially with a revenue of USD 48.2bn in 2021, compared to USD 29.2bn the previous year, driven by high freight rates due to the ongoing impact from the pandemic that has resulted in disruptions of global supply chains.
To increase predictability and reliability, capacity was increased both for equipment and vessels, and significant effort was made to prioritize contracted volumes, with long-term contracts now representing 65pct., up from 50pct. a year ago. Also in Terminals, profitability continued to grow in 2021 driven by strong volumes performance and storage income. With a focus on increased efficiency, utilization, and improving quality through digitization and automation, return on invested capital (ROIC) increased to 10.9pct. which is above the target of a minimum of 9pct.
During the year, the use of digital solutions and services grew significantly, with a turnover on Maersk.com reaching USD 38bn. Traffic increased 15pct. as customers continued to adopt digital solutions even further. Also, bookings via mobile app increased more than 15-fold.
Dividends
The Board of Directors proposes an ordinary dividend to the shareholders of DKK 2,500 per share of DKK 1,000 (DKK 330 per share of DKK 1,000 previous year). The proposed dividend payment represents an ordinary dividend yield of 10.7pct. (2.4pct. previous year) and 40pct. of the net underlying profit, based on the Maersk B share’s closing price of DKK 23,450 as of 30 December 2021. Payment is expected to take place on 18 March 2022 after the Annual General Meeting.
As Maersk has significantly improved the financial performance and progressed on the strategic journey to become an end-to-end logistics company, we have also been able to increase returns to our shareholders. For 2021, the proposed dividend amounts to a truly exceptional DKK 47bn.
Guidance 2022
A.P. Moller – Maersk expects the current market situation to continue into Q2 2022 with normalization to occur early in the second half of the year. Based on these assumptions A.P. Moller – Maersk expects for full-year 2022:
- Underlying EBITDA of around USD 24bn
- Underlying EBIT of around USD 19bn
- Free cash flow (FCF) of above USD 15bn
The ocean is expected to grow in line with global container demand, which is expected to grow 2-4 pct. in 2022, subject to high uncertainties related to the current congestion, network disruptions and demand patterns.
For 2022-2023, the expectation for the accumulated CAPEX is USD 9.0-10.0bn, driven by intensified growth in Logistics & Services and ESG investments. The CAPEX guidance for 2021-2022 of USD 7bn is maintained.
Financial highlights
Financial performance for A.P.Moller – Maersk for the full year 2022 depends on several factors and is subject to uncertainties related to COVID-19, bunker fuel prices, and freight rates given the uncertain macroeconomic conditions. All else being equal, the sensitivities for the full year 2022 for four key assumptions are listed in the table below:
| Factors | Change | Effect on EBIT (midpoint of guidance) (Full-year 2022) |
|---|---|---|
|
Container freight rate
|
+/- 100 USD/FFE
|
+/- USD 1.4bn
|
|
Container freight volume
|
+/- 100,000 FFE
|
+/- USD 0.1bn
|
|
Bunker price (net of expected BAF coverage)
|
+/- 100 USD/tonne
|
+/- USD 0.5bn
|
|
Foreign exchange rate (net of hedges)
|
+/- 10% change in USD
|
+/- USD 0.2bn
|
About A.P. Moller – Maersk
A.P. Moller – Maersk is an integrated container logistics company working to connect and simplify its customers’ supply chains. As the global leader in shipping services, the company operates in 130 countries and employs approximately 95,000 people.
