Investor Presentaiton

35 A.P. Moller-Maersk Annual Report 2020 Risk description Directors' Report Our business Risk management 6 Mergers & Acquisitions 7 Decarbonisation 8 Organisational capabilities 9 Compliance 10 Company culture and engagement = A key driver to long-term Logistics & Services growth is the expansion of product and people capabilities through successful Mergers & Acquisi- tions (M&A). Acquiring new capabilities is a prerequisite to serve customers end- to-end, and A.P. Moller-Maersk will need to make acquisitions in the com- ing years. Decarbonisation is becoming a business necessity and a license to operate. It is critical for A.P. Moller - Maersk to decar- bonise the end-to-end supply chain at a speed that meets customers' and inves- tors' expectations. Primary focus is the decarbonisation of own emissions. Delivering a digitally trans- formed business model as part of A.P. Moller Maersk's global integrator strategy requires right balance of capabilities and skills at all levels in the organisation. It is imperative for A.P. Moller-Maersk to conduct its business in compli- ance with legislation and regulatory standards. The regulatory landscape is becoming increasingly complex, and A.P. Moller Maersk could be hit by a major compliance case in respect of violations of anti-corruption laws, anti- trust regulations, and/or international sanctions. The A.P. Moller-Maersk culture is strong with many elements that must be retained. These strong cultural ele- ments were critical in getting through the cyberattack in 2017 and most recently in the COVID-19 pandemic, but there is a need to change and adapt parts of this culture and to further enhance employee engagement to sup- port the transformed business model. 2021 Risk assessment Some of the acquisitions may be sub- stantial, and if A.P. Moller - Maersk fails to integrate one or more of these, it will create a risk to successfully execut- ing the A.P. Moller - Maersk integrator strategy. A.P. Moller Maersk has made a com- mitment of carbon neutrality by 2050. With increasing demand from custom- ers and investors, A.P. Moller-Maersk needs to further innovate sustainable supply chain solutions and accelerate its decarbonisation initiatives. A.P. Moller Maersk made good pro- gress in acquiring new and diverse capabilities and skills, especially for Logistics & Services and Technology. Still, the strategy execution could be hampered if the right balance of capabilities and skills are not main- tained at all levels of the organisation. In respect of corruption, A.P. Moller-Maersk operates in high- risk geographies and high-risk sectors (e.g. the terminals and logistics ser- vices sectors). A.P. Moller - Maersk is the largest container carrier and in an industry with many industry coopera- tion agreements. A.P. Moller - Maersk thereby naturally has the attention of competition authorities globally. Most notably, customer centricity is a cultural attribute, which must be honed to a different level than today. Another element that must be further cultivated is the ability to work across functions with shared ownership and accountability for outcomes. Mitigation strategies A post-merger integration office has been established to develop and man- age integration processes and embed learnings. Integration capabilities have been upskilled through external sourc- ing. Further actions are planned to develop seamless transition between acquisition and integration activities, with clear accountabilities and busi- ness ownership. In 2020, a strategic review of climate scenarios and transition pathways was conducted with the conclusion that climate action is a strategic imperative for A.P. Moller-Maersk. Consequently, a new Decarbonisation function has been launched in 2021 to further embed and accelerate the decarbon- isation agenda, including coordinat- ing the efforts to reduce the climate impact of operations and developing relevant customer offerings. A.P. Moller-Maersk Capability Frame- work was established to define key organisational capabilities to support strategic goals. Further actions are in progress to build/buy competencies through functional and leadership pro- grammes and targeted recruitment campaigns. A.P. Moller Maersk has a robust com- pliance programme for anti-corruption, competition law and economic sanc- tions, and export controls designed to fulfil the global requirements and many initiatives are in place to improve focus and emphasis on compliance awareness and training. Actions were launched to assess and address employee engagement levels on a more frequent basis. Further ini- tiatives will be launched to further strengthen the A.P. Moller - Maersk behaviours and elevate the company culture.

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