Investor Presentaiton
12
A.P. Moller-Maersk Annual Report 2020
Directors' Report Financial review 2020
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exchange rate impacts and costs relating to pre-
payment of borrowings.
Tax decreased to USD 407m (USD 458m). The
effective tax rate decreased as a larger proportion
of profit before tax was earned in the Ocean seg-
ment, subject to tonnage taxation.
Net profit was USD 2.9bn (loss of USD 44m) due
to significant improvement in operating earnings,
while the result for discontinued operations in 2019
negatively impacted the net loss of USD 553m due
to a fair value adjustment with Maersk Drilling
being demerged on 2 April 2019.
The underlying net profit after financial items
and tax was USD 3.0bn (USD 546m), due to the
improved operational performance.
Cash flow from operating activities was USD 7.8bn
(USD 5.9bn), positively impacted by an increase in
EBITDA of USD 2.5bn, a decrease in tax paid of USD
77m, offset by negative change in net working cap-
ital of USD 239m (positive USD 476m), leading to a
cash conversion of 95% (104%).
Gross capital expenditure (CAPEX) was USD 1.3bn
(USD 2.0bn), and lower than guidance of USD 1.5bn
due to lower investments in all segments.
Free cash flow was USD 4.6bn (USD 2.3bn), posi-
tively impacted by higher cash flow from operat-
ing activities and lower gross CAPEX, but partly
offset by higher increased lease payments.
Cash flow from borrowings was negative USD 1.9bn
(negative USD 1.5bn), due to repayments of USD
3.2bn, partly offset by USD 1.3bn of new funding,
which was driven by precautions taken due to
COVID-19 in Q2.
Contractual capital commitments totalled USD 1.7bn
(USD 1.7bn), of which USD 1.3bn is related to commit-
ments towards terminal concession grantors. Strong
commitment to capital discipline and free cash flow
generation continue to be a key strategic focus.
Capital structure, issue of bonds
and credit rating
Net interest-bearing debt decreased to USD 9.2bn
(USD 11.7bn), as free cash flow of USD 4.6bn was
partly offset by share buy-back of USD 806m, divi-
dends of USD 520m including dividend to non-con-
trolling interest, acquisitions of USD 425m, and a
net increase in lease liabilities of USD 170m. Net
interest-bearing debt excluding lease liabilities
decreased to USD 485m (USD 3.1bn).
A.P. Moller-Maersk remains investment grade-rated
and holds a Baa3 (positive) rating from Moody's and
a BBB (positive) rating from Standard & Poor's.
Total equity was USD 30.9bn (USD 28.8bn), mainly due
to a net profit of USD 2.9bn and addition of non-con-
trolling interest of USD 288m partly offset by div-
idends of USD 520m and share buy-back of USD
806m, resulting in an equity ratio of 55.0% (52.1%).
The liquidity reserve of USD 11.0bn (USD 10.5bn),
composed of liquid funds of USD 4.8bn excluding
restricted cash (USD 3.8bn) and undrawn revolving
credit facilities of USD 6.2bn (USD 6.6bn).
The ordinary dividend of DKK 150 per
A.P. Møller-Mærsk A/S share of nominally DKK
1,000 (in total equal to USD 430m) declared at the
Annual General Meeting on 23 March 2020 was
paid on 26 March 2020. Of the DKK 150, DKK 75
was related to the underlying profit of the finan-
cial year 2019, and DKK 75 was related to gain
from the sale of Total S.A. shares.
FROM OUR BUSINESS MODEL
We have a strong balance sheet and
are committed to remaining investment
grade-rated.
The Board of Directors proposes an ordinary divi-
dend to the shareholders of DKK 330 per share of
DKK 1,000 (DKK 150 per share of DKK 1,000) cor-
responding to 35% of underlying net result as
per the company's dividend policy of distributing
between 30-50% of the underlying net result to
shareholders in dividend.
The proposed dividend payment represents an
ordinary dividend yield of 2.4% (1.6%), based on the
Maersk B share's closing price of DKK 13,595 as of
30 December 2020. Payment is expected to take
place on 26 March 2021.
Share buy-back
The share buy-back programme initiated in
Q2 2019 was concluded on 24 July 2020 and
A.P. Moller-Maersk has repurchased USD 1.5bn
worth of shares.
On 1 June 2020, the cancellation of 156,977
A shares and 627,938 B shares was completed
$
corresponding to 3.77% of the total share capital
in A.P. Moller - Maersk.
In November 2020, the Board of Directors decided
to initiate a new share buy-back programme of DKK
10bn (around USD 1.6bn) and the programme will
run from December 2020 over a period of up to
15 months.
This will conclude the distribution associated with
the sale of Maersk Oil and any further distribution
to shareholders will come from the continuing busi-
ness activities.
During Q4, A.P. Moller - Maersk bought back 10,306
A shares and 41,232 B shares worth DKK 673m
(around USD 110m).
At 31 December 2020, A.P. Moller - Maersk owns
a total of 119,176 A-shares and 505,281 B-shares
as treasury shares, corresponding to 3.47% of the
share capital.View entire presentation