Maersk Group strategy and performance page 2 Maersk Group
• Founded in 1904
• Represented in over 130 countries, employing around 90,000 people
• Market capitalisation of around USD 27.6bn end Q4 2015
Facilitating global containerised trade Maersk Line carries around 14% of all seaborne containers and, together with APM Terminals and Damco, provides infrastructure for global trade
Supporting the global demand for energy The Group is involved with production of oil and gas and other related activities including drilling, offshore, services, towage, and transportation of oil products.
Strategy and performance – AR 2015 page 3 Maersk Group overview Revenue, NOPAT and Invested capital split1
MAERSK LINE MAERSK OIL APM TERMINALS MAERSK DRILLING APM SHIPPING SERVICES Revenue, FY2015 (%)
58% 14% 10% 6% 12%
UNDERLYING PROFIT2, FY2015 (%)
37% 12% 18% 21% 12%
INVESTED CAPITAL, FY2015 (%) 47% 8% 15% 19% 11%
Note 1: Reportable segments Note 2: Excluding net impact from divestments and impairments
Strategy and performance – AR 2015 page 4 Ambitions
• The Group will create value through profitable growth and by creating winning businesses
• The Group seeks to improve the Return on Invested Capital (ROIC) by;
• Focused and disciplined capex allocation
• Execute portfolio optimization
• Performance management
• The Group intends to share the value creation by growing ordinary dividends in nominal terms.
Strategy and performance – AR 2015 page 5 Group strategy overview The Group’s ambition is for all our businesses to deliver top quartile returns and achieve above 10% ROIC over the cycle
Maersk Line Maersk Oil APM Terminals Maersk Drilling APM Shipping Services
• Growing at least • Mature key projects • Container and • Capitalize on large • Executing on cost with the market to multiport (adjacent) & new fleet programs defend our market • Acquisitions and expansion leading position opportunistic • Maintain core focus on • Rejuvenating part of investments • Active portfolio ultra-deepwater & the fleet • EBIT margin 5%- management harsh-environment points above peer • Focus on cost market segments average management • Grow ahead of global transportation market • Focus on cost savings • Funded by own cash initiatives flow • Optimise operational • Average returns of efficiency 8.5-12.0% (ROIC) performance
Strategy and performance – AR 2015 page 6 Most of our businesses deliver top quartile returns
Below WACC return and top quartile performance Above WACC return and top quartile performance
Top quartile performance in H1 2015
Not top quartile performance in H1 2015
Below WACC return and not top quartile performance Above WACC return and not top quartile performance
Below BU WACC return in H1 2015 Above BU WACC return in H1 2015
Source: Benchmarking study H1 2015; Maersk Group
Strategy and performance – AR 2015 page 7 Invested capital and ROIC
Invested ROIC % ROIC % ROIC % ROIC % Business capital Q4 2015 Q4 2014 FY 2015 FY 2014 (USDm)
Group 43,509 -20.8% 2.3% 2.9% 11.0%
Maersk Line 20,054 -3.6% 13.0% 6.5% 11.6%
Maersk Oil 3,450 -214% -2.5% -38.6% -15.2%
APM Terminals 6,177 8.3% 7.9% 10.9% 14.7%
Maersk Drilling 7,978 9.0% 2.7% 9.3% 7.1%
APM Shipping Services 4,748 5.1% -35.8% 9.5% -4.2%
Maersk Tankers 1,644 7.3% 5.2% 9.9% 6.8%
Maersk Supply Service 1,769 0% 15.2% 8.5% 11.9%
Svitzer 1,132 10.4% -114% 10.9% -19.2%
Damco 203 2.6% -177% 7.1% -63.2%
Other Businesses 861 -6.8% -2.2% 10.8% 6.1%
Strategy and performance – AR 2015 page 8 Disciplined capital allocation
Development in invested capital since Q4 2010
Maersk Drilling 115% Invested capital re-allocated APM Terminals 30%
Maersk Line 19% Commitments of around USD Damco 7% 9bn with pipeline of investments still not Group -7% committed Maersk Supply -20%
SVITZER -28% Focus on consistent delivery Maersk Oil -30% of returns
Maersk Tankers -51% -88% Other businesses -100% Dansk Supermarked
-100% -50% 0% 50% 100% 150%
Note. Development since Q4 2010. The 2010 numbers have not been restated with the changed consolidation method for joint ventures in 2013
Strategy and performance – AR 2015 page 9 Capital commitment Low fraction of capital expenditure committed, provides financial flexibility
Maersk Line Maersk Oil APMT Maersk Drilling APM Shipping Services
USDbn 1.4 9.4 9.0 5.2
6.0
2.8 3.0
0.0 2016 2017-2020 2020+ Total
Strategy and performance – AR 2015 page 10 Active portfolio management
Cash flow from divestments has been USD 17bn with divestment gains of USD 5.7bn pre-tax since 2009
USDbn 8 5.8 6 4.4 4 3.3 3.4
2 1.4 1.2 0.7 0.6 0.5 0.2 0.5 0.2 0.1 0.5 0 2009 2010 2011 2012 2013 2014 2015
Selected Cash flow from divestments Divestment gains (pre-tax) divestments
Rosti Sigma Netto, UK Maersk LNG DFDS stake Dansk Danske Bank Loksa Baltia FPSO Ngujima- FPSO Peregrino US BTT Supermarked stake Yin US Chassis ERS Railways majority share Esvagt Dania Trucking VLGC’s 15 Owned Handygas VLCCs FPSO Curlew APM Terminals Virginia
Strategy and performance – AR 2015 page 11 Value creation shared with investors
DKKbn Ordinary dividend Executed share buy back
40 36.7
11.8
10.0 10 5.2 3.9
5.3 5 4.4 4.4 2.9 6.2 6.6 1.4
0 2009 2010 2011 2012 2013 2014 2015 2015 Extraordinary dividend (Danske Bank)
Note. Dividend and share buy back in the paid year. The second share buy back of USD ~1bn was initiated 1 September 2015.
Strategy and performance – AR 2015 page 12 Maersk B relative performance
Outperformed its synthetic peer by Outperformed its synthetic peer by 14%-points in 2015 16%-points YTD 2016
Forwarders 13.3% Maersk B -2.2%
Maersk B -11.5% Ports -7.6%
Liners -16.3% Forwarders -9.1%
Ports -16.9% Upstream -11.9%
Synthetic -25.2% Offshore -16.3%
Upstream -28.2% Synthetic -17.9%
Tankers -30.9% Liners -21.7%
Drillers -42.6% Drillers -23.9%
Offshore -63.3% Tankers -24.4%
-80% -60% -40% -20% 0% 20% -30% -25% -20% -15% -10% -5% 0%
Note: Total shareholder return in local currency. Note: Total shareholder return in local currency As of 4th Feb 2016
Strategy and performance – AR 2015 page 13 Shareholder composition
A.P. Møller og Hustru North Rest of Denmark Nordics Rest of World Unidentified Chastine Mc-Kinney America Europe Møllers Fond til almene Formaal Share capital Share capital Share capital Share capital Share capital Share capital 23.8%* 8.5% 2.7% 6.1% 1.4% 4.5% 100%
Den A.P. A.P. Møller A.P. Møller og Hustru Chastine Møllerske Free float Holding A/S Mc-Kinney Møllers Familiefond Støttefond
Share capital 41.5% Share capital 8.5% Share capital 3.0% Share capital 47.0% Voting rights 51.2% Voting rights 12.9% Voting rights 5.9% Voting rights 30.0%
A.P. Møller - Mærsk A/S
Source: CMi2i. As of November 2015 * Including 1.4% in treasury shares
Strategy and performance – AR 2015 page 14 Underlying profit reconciliation
Profit for the year Gain on sale of Impairment losses, Tax on - continuing non-current Underlying profit net1 adjustments operations assets, etc., net1 USD million 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
Group 925 2,339 482 600 -3,163 -2,951 535 158 3,071 4,5322
Maersk Line 1,303 2,341 40 89 -17 72 -7 -19 1,287 2,199
Maersk Oil -2,146 -861 5 4 -3,131 -2,208 545 308 435 1,035
APM Terminals 654 900 15 374 14 -181 -1 -142 626 849
Maersk Drilling 751 478 46 82 -27 -85 - 10 732 471 APM Shipping 446 -230 45 13 -1 -426 -2 -2 404 185 Services
Maersk Tankers 160 132 5 -4 -1 -4 - 1 156 139 Maersk Supply 147 201 30 12 - - - - 117 189 Services
Svitzer 120 -270 5 5 - -354 -1 -3 116 82
Damco 19 -293 5 - - -68 -1 - 15 -225
1 Including the Group’s share of gains on sale of non-current assets etc, net and impairments, net, recorded in joint ventures and associated companies 2 USD 4,083m excluding the underlying result from Danske Bank of USD 449m
Strategy and performance – AR 2015 page 15 Impairments of assets Intangible assets (note 6 in the consolidated financial statements)
Impairment
Operating segment Cash generating unit Methodology losses, USDm 2015 2014
Oil concession rights Angola Value in use 114 - USA Value in use 44 - UK Value in use 38 50 Maersk Oil Norway Value in use 6 - Brazil Value in use 599 1,706 Kurdistan Value in use 225 -
Goodwill Adsteam Marine Svitzer Value in use - 357 Limited (Australia) Damco Airfreight Service Value in use - 35
Other rights
Other Value in use - 34
Total 1,026 2,182
Strategy and performance – AR 2015 page 16 Impairments of assets Property, plant and equipment (note 7 in the consolidated financial statements)
Impairment
Operating segment Cash generating unit Methodology losses, USDm 2015 2014 Maersk Line Multi-purpose vessels Fair value 17 - Angola Value in use 645 - Kazakhstan Value in use 418 - Denmark Value in use 310 - Maersk Oil USA Value in use 54 - UK Value in use 649 426 Norway Value in use 28 28
Maersk Drilling Endurer Fair value 27 35
Other 2 9
Total 2,150 498
Strategy and performance – AR 2015 page 17 Maersk Line Capacity market share by trade
16% no.3 no.3 no.2 no.1 no.3 15% Intra 21% 8% Europe Pacific Atlantic Asia-Europe Pacific
no.4 9% Intra 8% Asia no.1 Intra Trade Δ y/y America Latin Africa West- Oceania Asia-Europe -1pp America Central Atlantic +10pp Asia Pacific +1pp Oceania +1pp 26% 26% 17% 16% West-Central Asia 0pp Africa -2pp Latin America +3pp no.1 no.1 no.1 no.1 Intra Europe +2pp Intra Asia +1pp Intra America +1pp Maersk Line capacity (TEU)
East-West 40.5% North-South 48.2% Intra 11.4% Capacity market share no. Market position
Note: 1)West-Central Asia is defined as import and export to and from Middle East and India. 2) Trades mapped as per ML definition. 3) ML EW market shares calculated as ML accessible capacity based on internal data on ML-MSC allocation split applied to 2M capacity market share (deployed capacity data from Alphaliner) Source: Alphaliner as of 2015 FY (end period), Maersk Line
Strategy and performance – AR 2015 page 18 Industry is fragmented… but East-West trades now operated mainly through 4 key alliances
Capacity market share (%) Far East – Europe (capacity share by Alliance)
Maersk Line 14.7% 1% MSC 13.2% CMA CGM 8.9% 18% Evergreen 4.6% 34% Hapag-Lloyd 4.6% COSCO 4.2% 25% CSCL 3.4% Hamburg Süd 3.2% 22% Hanjin 3.1% OOCL 2.8% MOL 2.7% Far East – North America (capacity share by Alliance) APL 2.6% Yang Ming 2.6% 6% 15% UASC 2.5% NYK 2.4% 30% 14% K Line 1.9% G6 Alliance Hyundai 1.9% Ocean 3 PIL 1.8% 2M CKHYE Zim 1.8% 35% Wan Hai 1.0%
0.0% 5.0% 10.0% 15.0% 20.0% 2M Ocean 3 CKYHE G6 Others
Source: Alphaliner, 1 January 2016
Strategy and performance – AR 2015 page 19 Freight rate outlook is uncertain Many factors drive rates
Supply Demand • • Orderbook and new deliveries Competitive Global economic growth • Scrappings reactions • Global inventories • Idling • Outsourcing / offshoring • Slow steaming • Containerisation • Cancellations (“blankings”)
Bunker cost
Strategy and performance – AR 2015 page 20 The vicious circle of the container industry
Declining and gives incentive to invest in volatile rates… larger vessels… ~2% reduction -25% Freight rate at floating bunker price Unit cost reduction when 2004 - 2015 (CAGR) doubling vessel size1
Vicious circle of container shipping which leads leading to strong vessels to overcapacity… ordering… 10% vs. 5% 11% Nominal capacity growth vs. Average yearly vessel capacity demand growth (2004 – 2015 H1) ordered 2004 – 2015 H1 (% of fleet)
Note: Nominal capacity growth is deliveries less scrappings. 1) Assuming unchanged utilization of larger vessel and fixed bunker price of USD 400/tonne Source: Maersk Line, Alphaliner
Strategy and performance – AR 2015 page 21 Supply has outgrown demand past 10 years except for 2010 and trend expected to continue
Y/Y Growth, (%) Y/Y Supply Growth Y/Y Demand Growth
20% Estimate
15%
10%
5%
0%
-5%
-10%
-15%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E
Note: Capacity growth compares standing container vessel capacity beginning of year to end of year, while demand growth compares total amount of containers in two consecutive years. Source: Alphaliner, Maersk Line
Strategy and performance – AR 2015 page 22 Rates will continue to be under pressure from supply/demand imbalance
Maersk Line’s average freight rate has declined 1.9% p.a. since 2004
Maersk Line freight rate, (USD/FFE)
3,500 CAGR -1.9% Since CAGR (%) 3,300 2004 -1.9 3,100 2008 -5.6
2,900 2010 -6.4 2012 -8.5 2,700 2014 -16.0 2,500 Vicious circle
2,300
2,100 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: Maersk Line
Strategy and performance – AR 2015 page 23 Maersk Line’s response is to focus on cost…
Maersk Line’s unit cost has declined 7.5% p.a. since Q1 2012
Unit cost, (USD/FFE) 3,200 CAGR -8.6% Since CAGR (%) 3,000 2012 -9.2 2014 -11.5 2,800
2,600
2,400
2,200
2,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15
Note: Unit cost excluding gain/loss, restructuring, share of profit/loss from associated companies and including VSA income. Source: Maersk Line
Strategy and performance – AR 2015 page 24 … and will continue to drive cost down with plenty of opportunities
Network Speed equalization & Improve rationalization Slow steaming utilization
SG&A 2M Improve procurement
Inland Deployment of Retrofits optimization larger vessels
Source: Maersk Line
Strategy and performance – AR 2015 page 25 Network rationalisation and initiatives
Example of network rationalisation… …and further 2015 network initiatives
AE9 – Far East - Europe: Closure September 2015
Utilise AE network to balance required Trade flows Close ME5 TA4 – Atlantic: Closure October 2015
AE3 – Far East - Mediterranean: Closure October 2015
WHAT: Closure of ME5 service, through better utilisation of AE network through Suez. IMPACT: Reduced bunker consumption, vessels, and port/canal expenses.
Note: ME5 service: Middle East – Mediterranean. Source: Maersk Line
Strategy and performance – AR 2015 page 26 As the largest carrier we have delivered a sustainable EBIT margin gap
Gap to peers on par with target… …and Maersk Line continues to be best in class
Core EBIT margin gap, (% pts.) Q3 2015 Core EBIT margin, (%)
10% 9% 9% 9% 9% Maersk Line 5.7% 9% 8% 8% 8% CMA CGM 4.0% 8% Hapag Lloyd 3.4% 7% 7% 7% 7% NYK 2.0%
6% 6% Hanjin 1.2% 5% 5% ZIM -0.1% 4% 5% Target 4% K Line -0.6% 3% 3% MOL -2.1% Hyundai MM. -4.6% 2% 2% APL -5.5% 1% Peer group Avg* 0.8% 0% 12Q1 12Q3 13Q1 13Q3 14Q1 14Q3 15Q1 15Q3 -15% -10% -5% 0% 5% 10% 15%
Note: *Peer group includes CMA CGM, APL, Hapag Lloyd, Hanjin, ZIM, Hyundai MM, K Line, NYK, MOL and OOCL, CSCL and COSCO also included with average of 14H2-15H1 gap to MLB as they only report half-yearly; Peer average is TEU-weighted. EBIT margins are adjusted for gains/losses on sale of assets, restructuring charges, income/loss from associates. Maersk Line’ EBIT margin is also adjusted for depreciations to match industry standards (25 years). Source: Alphaliner, Company reports, Maersk Line
Strategy and performance – AR 2015 page 27 Scale is a lever of profitability
Average EBIT margin 2012-2015H1, (%)
10% Global scale leaders Regional focus Maersk Line 8%
6% Wan Hai CMA
SITC 4% OOCL
2% Hanjin COSCO K Line Evergreen 0% NYK Yang Ming Hapaq Lloyd CSCL -2% ZIM APL
-4% Hyundai MOL
-6% 0 500 1,000 1,500 2,000 2,500 3,000
Average capacity 2012-2015H1, (‘000 TEU)
Source: Maersk Line, Company Reports, Alphaliner
Strategy and performance – AR 2015 page 28 Terminal and vessel costs represent the largest components of our cost base
Cost base, FY 2015
Administration 10% and other USD 21.8bn costs Terminal 32% costs FY 2015 cost base 13% Bunker
2,288 USD/FFE 28% 12% FY 2015 unit cost Inland 5% transpor- Vessel costs tation
Containers & other equipment Note: Terminal costs: costs related to terminal operation such as moving the containers (mainly load/discharge of containers), container storage at terminal, stuffing (loading) and stripping (unloading) of container content, power for reefer units, etc. Inland transportation: costs related to transport of containers inland both by rail and truck. Containers and other equipment: costs related to repair and maintenance, third party lease cost and depreciation of owned containers. Vessel costs: costs related to port and canal fees (Suez and Panama), running costs and crewing of owned vessels, depreciation of owned vessels, time charter of leased vessels, cost of slot (capacity) purchases and vessel sharing agreements (VSA) with partners. Bunkers: costs related to fuel consumption. Administration and other costs: cost related to own and third party agents in countries, liner operation centers, vessel owning companies, onshore crew and ship management, service centers and headquarters. Administration cost types such as staff, office, travel, training, consultancy, IT, legal and audit, etc. Other costs covering currency cash flow hedge, cargo and commercial claims and bad debt provision. Cost base: EBIT cost adjusted for VSA income, restructuring result from associated companies and gains/losses. Source: Maersk Line
Strategy and performance – AR 2015 page 29 Maersk Oil’s portfolio
The value chain
Exploration Appraisal Development Primary production Mature field EOR1) Abandonment
Greenland
Norway United Kingdom Denmark Kazakhstan
Algeria Kurdistan Region of Iraq USA Qatar
Ethiopia2) Kenya
Active in 13 countries Angola
• Exploration in 9 Brazil • Development projects in 9 • Operated production in 4 • Non-operated in 4
1) Enhanced Oil Recovery 2) Ethiopia acquisition is subject to government approval
Strategy and performance – AR 2015 page 30 Maersk Oil Entitlement Production, 2015
Hydrocarbon type Location Operatorship OECD/non-OECD (%) (%) (%) (%)
Oil Shallow water Operated OECD Gas Onshore Deepwater Operated by others Non-OECD
100 100 100 100
80 80 80 80
60 60 60 60
40 40 40 40
20 20 20 20
0 0 0 0
Strategy and performance – AR 2015
page 31 Maersk Oil’s reserves and resources
End End End (million boe) 2012 2013 2014
Proved reserves (1P) 410 392 327
Probable reserves (2Pincremental) 209 207 183 Proved and Probable reserves (2P) 619 599 510
New picture Contingent resources (2C) 740 874 801 Reserves & resources (2P + 2C) 1,359 1,473 1,311
Note: 2015 reserves and resources numbers will be released in connection with the interim report for the first quarter 2016, including reserves additions from Johan Sverdrup and Culzean.
Definitions: • Proved Reserves: quantities of oil and gas estimated with reasonable certainty to be commercially recoverable. • Probable Reserves: additional reserves, which analysis of geoscience and engineering data indicate are more likely than not to be commercially recoverable. • Contingent Resources: quantities of oil and gas estimated, as of a given date, to be potentially recoverable from known accumulations, but which are not yet considered mature enough for commercial development due conditions that are not fulfilled.
Strategy and performance – AR 2015
page 32 Long -term profitable growth
Selecting growth Profitable growth opportunities
• Maersk Oil will grow to ensure a Balanced portfolio and cost curve profitable future • Focus is on inorganic growth in 2016 and investing in exploration acreage Geographic fit, risk profile to deliver sustained exploration performance by 2016/17 Production profile & timing • Longer term, exploration is considered a critical element for reserves replacement Leveraging our capabilities • To deliver both long and short term growth Maersk Oil must expand within our core and beyond
Strategy and performance – AR 2015 page 33 Capital discipline – Investing through the cycle
Development Capex1) • Capex reductions realised in 2015 in (USD million) response to market changes
• Continuously optimising capital 4,000 expenditure by active portfolio
3,500 management and contract re- negotiations 3,000
2,500 • Investing through the cycle – Johan Sverdrup (NO) and Culzean 2,000 3,788 (UK) 1,500
1,000 2,198 2,017 1,959 1,800
500
0 2011 2012 2013 2014 2015
1) Including acquisitions
Strategy and performance – AR 2015 page 34 Reducing our costs
• Focus on building a sustainable Portfolio Organisational cost base Management and Process Efficiency
• On track to reach 20% Opex savings end of 2016
• Global workforce reduced by approximately 1,250 positions in 2015
• Active portfolio management
• Focus on shift from organic to inorganic growth Procurement Cost Focus and Supply and Performance Chain Management
Strategy and performance – AR 2015
page 35 Maersk Oil’s share of Production and Exploration Costs Maersk Oil’s share of production (‘000 boepd)
500 424 429 387 400 377 321 333 312 ~315 300 257 251 235 200 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e DK UK Qatar Algeria Other Maersk Oil’s exploration costs* (USDm)
1,400 1,149 1,200 1,088 990 1,000 831 765 800 676 605 600 404 423 ~423 400 229 200
0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016e
*All exploration costs are expensed directly unless the project has been declared commercial Strategy and performance – AR 2015
page 36 Maersk Oil’s portfolio (Q4 2015)
Exploration Resources Project Maturation Process Reserves Production
Prospects in Initiate & 1) the pipeline1) Discoveries1) Assess Select Define Execute Assets
Southern Area Jack II Fields2) USA Denmark Yeoman Johan Sverdrup II3) Johan Farsund Sverdrup I Kazakhstan Buckskin Flyndre & Drumtochty Cawdor Zidane Alma Swara Tika UK Itaipu Adda LC Wahoo Chissonga5)
Algeria
Quad9 Gas Culzean Tap o’Noth Greater Blowdown Gryphon Area4) Qatar Total of 25 exploration Al Shaheen prospects and leads in FDP 2012 Harald East the exploration pipeline Brazil Tyra Future Total 25 5 9 12 6 15 Total no. of projects per phase
Uncertainty
Bubble size indicates estimate of net resources: Colour indicates resource type: >100 mmboe 50-100 mmboe <50 mmboe Primarily oil Primarily gas Discoveries and prospects (Size of bubbles do not reflect volumes)
1) Does not include prospects from Kenya and Ethiopia acreage 2) Southern Area Fields cover Dan Area Redevelopment and Greater Halfdan FDP projects (Denmark). 3) Phase 2 of the Johan Sverdrup development (Norway) is expected to commence production in 2022. 4) Greater Gryphon Area project has been reduced to a number of small well projects to be matured on an individual basis with different timing 5) Reevaluating options in light of the low oil price page 37 Maersk Oil’s Key Projects
Sanctioned development projects
Project First Production Working Net Capex Plateau Production Operator Interest (USD Billion) (Entitlement, boepd)
Flyndre & Cawdor 73.7% & 2017 ~0.5 8,000 Maersk Oil (UK/Norway) 60.6% Johan Sverdrup Late 2019 8.44% 1.82 29,0002 Statoil Phase 1 (Norway) Culzean (UK) 2019 49.99% 2.3 30-45,000 Maersk Oil
Major discoveries under evaluation (Pre-Sanctioned Projects1)
Project First Working Net Capex Plateau Production Production Interest Estimate Estimate Estimate (USD Billion) (Entitlement, boepd)
Chissonga (Angola) TBD 65% TBD TBD Buckskin3 (USA) 2019 20% TBD TBD Lokichar (Kenya) 2021 25% TBD TBD
1 Significant uncertainties about time frames, net capex estimates and production forecast 2 Capex and production estimates are for Phase 1 only 3 Buckskin being re-evaluated following operator Chevrons decision to exit
Strategy and performance – AR 2015 page 38 Sanctioned projects against the trend
Swara Tika, Johan Sverdrup, Culzean, Kurdistan Norway United Kingdom
Sanctioned Maersk Oil’s Sanctioned the biggest Sanctioned mega gas first on-shore project in planned project in the project and biggest Kurdistan, Iraq North Sea over the discovery in the UK sector coming decade in ten years page 39 African Oil acquisition
• Maersk Oil acquired 50% of Africa Oil’s shares in three onshore exploration licences in Kenya and two in Ethiopia
• The licences include nine recent oil discoveries
• Four of the blocks are operated by Tullow Oil and the remaining by Africa Oil
• Upfront farm-in payment of USD 365m, including exploration costs. Future payments of up to USD 480m for the Lokichar Project Lokichar Basin
Strategy and performance – AR 2015 page 40 Abandonment provisions
Provisions for abandonment, USDm
3,500 3,166 • 3,000 2,774 Provisions for abandonment have increased USD 392m over the year 2,500 2,198 2,000 1,638 1,698 1,500 • 51% of the provisions is expected to be 1,000 utilised over the next 10 years compared 500 to 43% by end-2014 - 2011 2012 2013 2014 2015
Expected utilisation, USDm
2,000 2014 2015 1,600 1,526 1,500 1,198
1,000 773 763
500
4 40 36 - 0-10 years 10-20 years 20-30 years 30-40 years
Strategy and performance – AR 2015 page 41 APM Terminals Portfolio overview
36.0m TEUs (equity) 75.2m TEUs (gross)
60 shipping lines serviced
63 operating ports 7 new port projects 10 expansion projects 140 inland locations
20,600 employees in 67 countries Terminals Inland
Note: Volume figures are full year 2015
Strategy and performance – AR 2015 page 42
The ports business will remain attractive
World population growth and growing middle class
Growing consumer demand in emerging markets
Increasing regional trade (e.g. Intra-Asia)
Increasing containerization of commodities (e.g. grain, reefer)
Production of goods, food and energy differ from where it is consumed
Strategy and performance – AR 2015 page 43 Diversified Global Portfolio
Container throughput by geographical region (equity Geographical split of terminals (number of terminals) weighted crane lifts, %) Total throughput of 25 36.0m TEU in 2015 20 2 Americas Africa & 1 2 Middle East 18% 15 19%
2 10 19 Europe, 17 17 Russia and 5 Baltics 10 Asia 29% 34% 0 Americas Europe, Russia Asia Africa and Middle and Baltics East
Existing terminals New terminal projects
Average remaining concession length in years Port Volume growth development (%)
30 28 12% 65 64 63 25 23 62 21 8% 20 16 4% 15 11 0% 10 55 -4% 5
0 -8% Americas Europe, Asia Africa and Total portfolio 2011 2012 2013 2014 2015 Russia and Middle East No. of terminals Equity Weighted Like-for-like Global market Baltics
Note: Average concession lengths as of FY 2015, arithmetic mean Note: Like for like volumes exclude divestments and acquisitions
Strategy and performance – AR 2015 page 44 APM Terminals – New terminal developments
Project Opening Details Investment
Lázaro Cárdenas, 2016 • Signed 32-year concession for design, construction and operation USD 0.9bn Mexico (TEC2) of new deepwater terminal • Will add 1.2 million TEUs of annual throughput capacity and projected to become fully operational in H2 2016 Ningbo, China (Meishan 2016 • Major gateway port in Eastern China and Zhejiang Province. 6th n/a Container Terminal largest and fastest growing, deepwater container port in the Berths 3, 4, and 5) world • 67%/33% (Ningbo Port Group/APM Terminals) share to jointly invest and operate
Izmir, Turkey (Aegean 2016 • Agreement with Petkim to operate a new 1.5 million TEU deep- USD 0.4bn Gateway Terminal) water container and general cargo terminal
Moin, Costa Rica (Moin 2018 • 33-year concession for the design, construction and operation of USD 1.0bn Container Terminal) new deepwater terminal • The terminal will have an area of 80 hectares, serving as a shipping hub for the Caribbean and Central America
Savona-Vado, Italy 2017 • 50-year concession for the design, construction, operation and USD 0.4bn (Vado-Ligure) maintenance of a new deep-sea gateway terminal
Abidjan, Ivory Coast 2018 • Terminal will be the second in one of the busiest container ports USD 0.6bn in West Africa • New facility will be able to accommodate vessels of up to 8,000 TEU in size (existing facility 0.75 million TEU) Tema, Ghana TBD • Joint venture with existing partner Bolloré (35%) and the USD 0.8bn Ghana Ports & Harbours Authority (30%) • Will add 3.5 million TEUs of annual throughput capacity • Greenfield project located outside the present facility that includes an upgrade to the adjacent road network
Strategy and performance – AR 2015 page 45 Active portfolio management continues to create value
Acquisitions and secured Projects Grup TCB
Valencia Parangua Buenaventura Quetzal Lazaro Cardenas Yucatan Gothenburg Izmir Ningbo La Palma Monrovia Talin Abidjan Qingdao Tenerife Moin Kotka/Helsinki Ust Luga Vado reefer Gijon Cotonou Callao Vostochny St. Petersburg 2 Cartagena Castellon Santos Poti St. Petersburg Izmir Namibe Tema Barcelona
2010 2011 2012 2013 2014 2015 2016
Kaoshiung Dailan Oslo Le Havre Charleston
Dunkirk Virginia Houston
Oakland Jacksonville
Gioia Tauro Divestments
Note: Grup TCB deal close expected in Q1 2016, subject to regulatory approvals
Strategy and performance – AR 2015 page 46 Transaction multiples remain high amid strong competition for projects
Port M&A transaction multiples (EV/EBITDA) Port landlord 35 x Terminal operator
Maher (32x) 30 x Port Newcastle (27x)
25 x Port Brisbane (22x) Carrix Port Botany OOCL (20x) Forth Ports (20x) ABP 20 x (20.5x) (19x) (20x) TIL/MSC Euroports (17.5x) DP World Montreal (17x) Australia DP World HK (16x) 15 x HPH Montreal (12.7x) (15x) (14.8x) Peel Group (15.4x) (16.3x) Terminal Link (12.5x) NCC 10 x Prince Rupert Port of (13x) (12x) PD Ports Brisbane (7.9x) (9.3x) Global Ports 5 x (8.4x) Dragados (6.5x)
0 x maj-05 okt-06 feb-08 jul-09 nov-10 apr-12 aug-13 dec-14 maj-16
Strategy and performance – AR 2015 page 47 Grup Maritim TCB acquisition
• Grup Maritim TCB has 11 container terminals in Spain and Latin America
• Annual throughput capacity is 4.3m TEUs and estimated annual container volume of 3.5m TEUs (2.6m TEUs weighted with APM Terminals’ ownership interest in the individual terminals)
• The implied enterprise value of the transaction is approximately USD 1.1bn for 100% of the issued shares
• Expected capex of USD 400m over the next five years, subject to market conditions
• The acquisition will initially have a negative impact on ROIC of just over one percentage point due to the increased asset base and the amortisation of terminal rights.
• Transaction is expected to close in the first quarter of 2016, subject to regulatory approvals
Barcelona container terminal APM Terminals has signed agreement to acquire Grup Maritim TCB that will add 11 container terminals to the portfolio
Strategy and performance – AR 2015 page 48 All segments remain profitable with an obvious negative impact from implementations
Consolidated JV & Operating Q4 2015 Implementations Total USDm businesses Associates businesses
Throughput (TEUm) 5.0 3.8 8.8 - 8.8
Revenue 985 - 985 40 1,025
EBITDA 212 - 212 -13 199
EBITDA margin 21.5% - 21.5% -32.4% 19.4%
Reported profit 115 22 137 -11 128
Reported profit, underlying 109 18 126 -11 117
ROIC 11.4% 6.2% 10.0% -6.7% 8.3%
ROIC, underlying 10.7% 5.1% 9.2% -6.6% 7.6%
Average Invested capital 4,046 1,423 5,469 636 6,105
Note: Implementations include terminals currently under construction (Vado, Italy; Moin, Costa Rica; Izmir, Turkey; Lazaro Cardenas, Mexico) and eliminations
Strategy and performance – AR 2015 page 49 Consolidated businesses heavily impacted by challenging markets
Q4 Q4 Q4 ’15 USDm 2015 2014 /Q4 ’14
Throughput (TEUm) 5.0 5.5 -8%
Revenue 985 1,119 -12%
EBITDA 212 236 -10%
EBITDA margin 21.5% 21.1% 0.4pp
Reported profit 115 137 -16%
Reported profit, 109 139 -22% underlying
ROIC 11.4% 14.1% -2.7pp
ROIC, underlying 10.7% 14.3% -3.6pp
Average Invested 4,046 3,885 4% capital
Note: Consolidated businesses includes terminals and inland services that are financially consolidated
Strategy and performance – AR 2015 page 50 JV and Associates in tough emerging market conditions
Q4 Q4 Q4 ’15 USDm 2015 2014 /Q4 ’14
Throughput (TEUm) 3.8 3.9 -3%
Revenue - - n.a.
EBITDA - - n.a.
EBITDA margin - - n.a.
Reported profit 22 -7 -414%
Reported profit, 18 95 -81% underlying
ROIC 6.2% -1.6% 7.8pp
ROIC, underlying 5.1% 22.2% -17.1pp
Average Invested capital 1,423 1,711 -17%
Note: Includes joint venture and associate companies in the portfolio
Strategy and performance – AR 2015 page 51 Bigger vessels and alliances require enhanced capabilities
Less frequent ship calls and SPEED greater throughput peaks
Increased segmentation of terminal capacity and rapid capacity RELIABILITY obsolescence
2M Customer size and complexity O3 G6 AVAILABILITY increasing CKYHE
Ports even more vital element LOW COST in network optimization
Strategy and performance – AR 2015 page 52 Maersk Drilling Rig fleet overview North West Europe 8 ultra harsh jack-up rigs 3 premium jack-up rigs
Caspian Sea 1 midwater floater
US Gulf of Mexico South East Asia 3 ultra deepwater floaters 1 premium jack-up rig Ghana 1 ultra deepwater floater
Angola Egypt 1 ultra deepwater floater 1 ultra deepwater floater Egyptian Drilling Company Under construction Available 50/50 Joint Venture 1 ultra harsh jack-up rig 1 ultra deepwater floater** 1 ultra harsh jack-up rig* 1 premium jack-up rig
Note: As per end Q4 2015 * Maersk Guardian converted to accommodation rig. Rig will go on contract with Maersk Oil in Denmark in Sep 2016 ** Maersk Venturer will go on contract with Total in Uruguay in Mar 2016
Strategy and performance – AR 2015 page 53 Drop in oil price has led to… Reduced rig demand, lower utilisation levels while modern rigs retain competitive advantage, and decreasing dayrates
Global rig utilisation Continued bifurcation in Dayrates decline as a decreasing as supply utilisation for rigs delivered reaction to the rig supply- outpaces demand before and after 2000 demand imbalance
Demand Supply Floaters (Post-2000) UDW Dayrates Utilisation (RHS) Floaters (Pre-2000) Premium JU Dayrates (RHS) No. of rigs USD `000s 1000 90% 100% 600 300
500 250 800 85% 90%
400 200 600 80% 80% 300 150
400 75% 70% 200 100
200 70% 60% 100 50
0 65% 50% 0 0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015
Source: IHS Petrodata, Maersk Drilling
Strategy and performance – AR 2015 page 54 Maersk Drilling’s response A modern state-of-the-art rig fleet offers true competitive advantage during adverse market conditions
FLOATERS JACK-UPS FINANCIAL INVESTMENT
Maersk Voyager (2015) Maersk XL Enhanced 4 (2016) Maersk Convincer (2008) Egyptian Drilling Company (EDC) Maersk Valiant (2014) Maersk Integrator (2015) Maersk Completer (2007) (50/50 Joint Venture) Maersk Venturer (2014) Maersk Interceptor (2014) Mærsk Inspirer (2004) Maersk Viking (2014) Maersk Intrepid (2014) Mærsk Innovator (2002) Onshore rigs: 62 Mærsk Deliverer (2010) Maersk Reacher (2009) Mærsk Gallant (1993) Offshore rigs: 4 Maersk Discoverer (2009) Maersk Resolve (2009) Mærsk Giant (1986) Mærsk Developer (2008) Maersk Resilient (2008) Maersk Guardian (1986)1 Heydar Aliyev (2003) Maersk Resolute (2008)
Average Age Average Age 5 Years 10 Years
Note 1: Maersk Guardian converted to accommodation rig, therefore not included jack-up average age calculation Source: Maersk Drilling
Strategy and performance – AR 2015 page 55 Maersk Drilling has one of the most modern fleets of floaters in the competitive landscape
Floater fleet average age, years
35
30
25
20
15
10
5
0 Rowan Seadrill Maersk Ensco Noble Atwood Transocean Diamond Drilling Offshore
Industry average (floaters) = 16 years
Source: IHS Petrodata, Maersk Drilling
Strategy and performance – AR 2015 page 56 Maersk Drilling rigs also compete well in the jack-up segment
Jack-up fleet average age, years
35
30
25
20
15
10
5
0 Seadrill Atwood Maersk Transocean Noble Rowan Ensco Diamond Drilling Offshore
Industry average (jack-ups) = 17 years
Note: Maersk Guardian converted to accommodation rig, therefore not included jack-up average age calculation Source: IHS Petrodata, Maersk Drilling
Strategy and performance – AR 2015 page 57 Cost savings program Our commitment to enhancing resiliency has enabled 8% cost reduction FY 2015 vs. FY 2014
OPERATIONAL YARD STAYS ADMINISTRATIVE STRATEGIC APPROACH EXPENDITURES & OVERHEAD, TO STACKING LOCATION COSTS
Leaner maintenance & Optimisation of Refitting the head office, Evaluate on a case-by- project management, yardstays, rolling expat position case basis, aggressively procurement savings, maintenance evaluation, localisation, consultants, pursue new contracts & travel expense predictive maintenance travel & benefits extensions, rigorously reductions, general & real-time monitoring efficiencies realised re-evaluate stacking cost efficiency programmes levels
Note: cost reduction excluding FX
Strategy and performance – AR 2015 page 58 Our competitors have also focused aggressively on cost reduction across both Opex and SG&A
X USD m X % savings savings
Opex savings1 SG&A savings Fleet redn. USD m, % USD m, % Impact USDm Industry wide initiatives SG&A costs Maersk Drilling 10 10 ▪ Reviewing all back office/support function spend ▪ Cutting air travel class and amount of travel Atwood 63 11 3 5 37m and instead meeting via tele/video conference
Diamond 316 20 13 16 430m Crew costs ▪ Onshore staff reduction (~15%) Ensco 355 16 13 10 373m ▪ Reducing variable pay and benefits company-wide (10-15%) Noble 251 16 26 25 193m ▪ Stopping merit raises in 2015 ▪ Hiring freezes
Rowan 3 0 17 13 40m ▪ Stopping all offshore retention pay and salary adjustments
Transocean 1385 27 59 25 397m R&M costs ▪ Ensuring vendors and suppliers agree to cost cuts Seadrill 278 27 36 11 309m ▪ Reducing spend on spares through inventory management Pacific Drilling 35 8 3 5 47m ▪ Focus on R&M on being right first time
Note 1 Savings shown for all competitors is calculated as change in 2015 over 2014, as announced in Q3 2015 (Q2 for Seadrill), and includes impact due to operational changes, stacking, rig additions and cost reduction initiatives. Not adjusted for FX Source: Company filings, Maersk Drilling
Strategy and performance – AR 2015 page 59 Utilisation adversely impacted by idle rigs but continued strong operational uptime
Contracted days (left) and coverage % (right) Operational uptime*
2,000 100% 100%
96% 96% 97% 97% 97% 1,800 94% 92% 95% 1,600 80%
1,400 90% 1,200 60%
1,000 85%
800 40% 80% 600
400 20% 75% 200
0 70% 0% Q1 Q1 Q1 Q1 Q1 Q1 Q1 2009 2010 2011 2012 2013 2014 2015 2009 2010 2011 2012 2013 2014 2015 Contracted days Coverage % *Operational availability of the rig
Source: Maersk Drilling
Strategy and performance – AR 2015 page 60 Strong forward coverage with backlog providing revenue visibility
Contract coverage Revenue backlog, USDbn Revenue backlog by customer
Others 100% 2.0 Shell ~1.9 Chevron
80% Maersk Oil 1.5 77% Conoco- Phillips BP ~1.4 60% Exxon USD 52% 1.0 Conoco/ 5.4bn ~1.0 Marathon 40% 43% Total Statoil Eni Det Norske 0.5 ~0.6 20% ~0.5
0% 0.0 2016 2017 2018 2016 2017 2018 2019 2020+
Source: Maersk Drilling
Strategy and performance – AR 2015 page 61 Fleet status – jack-ups
Jack-ups Delivery year Customer Contract start Contract end Country Comments
Mærsk Innovator 2003 ConocoPhillips Feb 2010 Jun 2018 Norway 1 x 1 year option
Mærsk Inspirer 2004 Statoil (Volve) May 2007 Dec 2016 Norway
Maersk Intrepid 2014 Total Aug 2014 Sep 2018 Norway 4 x 1 year option
Maersk Interceptor 2014 Det norske Dec 2014 Dec 2019 Norway Up to 2 years option
Maersk Integrator 2015 Statoil Jun 2015 Jun 2019 Norway 2 x 1 year option
Mærsk Gallant 1993 Statoil Aug 2014 Aug 2016 Norway
Mærsk Giant 1986 DONG Nov 2015 Mar 2016 Denmark
Maersk Guardian 1986 Maersk Oil Sep 2016 Sep 2021 Denmark Accommodation contract
Maersk Reacher 2009 BP Sep 2011 Sep 2016 Norway
Maersk Resolute 2008 Hess Nov 2012 Apr 2016 Denmark
Maersk Resolve 2009 DONG Jun 2014 Feb 2017 Denmark 2 x 1 well option
Maersk Resilient 2008 Maersk Oil Oct 2015 Oct 2018 Denmark
Maersk Completer 2007 BSP Nov 2014 Oct 2018 Brunei 3 x 1 year option
Maersk Convincer 2008 Available
XL Enhanced 4 2016 BP Apr 2017 Apr 2022 Norway 5 x 1 year option
Note. As of 1 Jan 2016
Strategy and performance – AR 2015 page 62 Fleet status - floaters
Semisubmersibles Delivery year Customer Contract start Contract end Country Comments
Mærsk Developer 2009 Statoil Sep 2009 Jan 2016 USA
Mærsk Deliverer 2010 Chevron Jun 2012 Nov 2016 Angola
Maersk Discoverer 2009 BP Jul 2012 Aug 2019 Egypt
Heyday Aliyev 2003 BP Sep 2012 May 2021 Azerbaijan
Drillships
Maersk Viking 2014 ExxonMobil May 2014 Jun 2017 USA
ConocoPhillips/ Maersk Valiant 2014 Jun 2014 Aug 2017 USA 2 x 1 year option Marathon
Maersk Venturer 2014 Total Mar 2016 Jul 2016 Uruguay
Maersk Voyager 2015 Eni Jul 2015 Dec 2018 Ghana 1 x 1 year option
Note. As of 1 Jan 2016
Strategy and performance – AR 2015 page 63 APM Shipping Services Combined revenue of approx. USD 5bn and 18,000 employees operating all over the world
MAERSK TANKERS MAERSK SUPPLY SVITZER DAMCO SERVICE
One of the largest The leading high-end The leading company One of the leading 4PL companies in the company in the in the towage industry providers in the product tanker industry offshore supply vessel logistics industry industry
Strategy and performance – AR 2015 page 64 Improving and growing the business
Underlying NOPAT, USDm
H1 H2
450 404
350
204
250 185
150 80
37 200
50 105 76
-37 -50 2013 2014 2015
Note: Excluding sales gain/loss and impairments
Strategy and performance – AR 2015 page 65 Maersk Tankers strategy execution
PERFORMANCE • Strong FY 2015, NOPAT USD 160m (FY 2014: UPDATE USD 132m) and ROIC of 9.9% (FY 2014: 6.8%). Best result since 2008 • Product FY 2015 NOPAT USD 154m (FY 2014: loss of USD 35m) ) – highest ever result for the product tanker segment • ROIC on par with average product peers
STRATEGIC • Taking Lead strategy remains focused on EXECUTION improving profitability and relative performance within: • Cost Leadership • Active Position Taking • 3rd Party Services • FY 2015 Taking Lead has contributed with USD 21m • Continued strong focus on Safety, with the 2015 result being the best in the history of Maersk Tankers • Taking lead is estimated to contribute 2-3% to ROIC over the next years and bringing Maersk
Source: Company financial reports and press releases Tankers to best in class in the industry
Strategy and performance – AR 2015 page 66 Maersk Supply Service strategy execution
PERFORMANCE • Challenging markets the coming 2 years UPDATE • 2015 NOPAT at USD 147m (2014: USD 201m) and ROIC of 8.5% (2014: 11.9%) driven by: • Decrease in revenue caused by lower rates and utilisation in wake of weak market • Partly mitigated by significant costs improvements during 2015
STRATEGIC • Overall strategic direction remains: EXECUTION • 0 incidents • Top quartile performance • +10% return over the cycles • De-risking growth plans – e.g. building to contracts only • Implemented cost efficiency project resulting in significant operational cost improvements • 300+ seafarers made redundant (15% of crew pool) resulting in annual saving of USD 21.5m • Working alongside customers to reduce total costs of operations
Strategy and performance – AR 2015 page 67 Svitzer strategy execution
PERFORMANCE • 2015 NOPAT USD 120m (2014: USD -270m) and UPDATE ROIC of 10.9% (2014: -19.2%) • Financial and operating performance has improved to historic high levels driven by improved productivity, pricing/surcharge initiatives and higher market shares in harbor towage • The difficult outlook for the commodity exports and for shipping and off shore in general will likely impact Svitzer’s growth potential negatively in the coming years
STRATEGIC • Focus on three closely related towage segments: EXECUTION Harbour towage, Terminal Towage and Light Offshore • Continued margin improvements in Harbour Towage from improved asset utilization, behavioral pricing and broader service offering for global clients • Leverage relationships with global clients to accelerate investments in emerging markets targeting long-term commitments
Strategy and performance – AR 2015 page 68 Damco strategy execution
PERFORMANCE • FY 2015 NOPAT USD 19m (FY 2014: USD - UPDATE 293m) and ROIC of 7.1% (FY 2014: -63.2%) • Continuous overhead cost reduction and productivity improvement • Strong development in supply chain management product, while forwarding products remains behind competition • Net Working Capital improved by two-thirds (USD 112m) vs. year end 2014
STRATEGIC EXECUTION • Top-priorities for Damco remains: • Growing Ocean and Air profitability by providing visibility and improving margins through procurement • Gradual reduction of overhead costs and headcount following the 2014 restructuring initiatives, which started to pay off
Strategy and performance – AR 2015 page 69
Henrik Lund Johan Mortensen Maja Schou-Jensen Head of Investor Relations Senior Investor Relations Officer Investor Relations Officer [email protected] [email protected] [email protected] Tel: +45 3363 3106 Tel: +45 3363 3622 Tel: +45 3363 3639