A.P. Møller - Mærsk A/S August 2016 page 2 Forward-looking statements This presentation contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond A.P. Møller - Mærsk A/S’ control, may cause actual development and results to differ materially from the expectations contained in the presentation. Comparative figures Unless otherwise stated, all comparisons refer to y/y changes. Strategic review As announced on 23 June 2016, the Board of Directors has tasked the management to investigate the strategic and structural options to further increase agility and synergies. The Board of Directors will communicate on the progress before end of 3rd quarter 2016. Title of presentation |page 3 Agenda 1 History and Group overview 2 Market Overview 3 Business segments 4 Financial review and strategy 5 Funding strategy page| page 4 4 The Maersk Group at a glance • Diversified global conglomerate with activities focused in energy and transportation • Established 1904: 110+ years of financial strength • Headquartered in Copenhagen, Denmark • 2015 FY revenues USD 40.3bn, EBITDA USD 9.1bn • Market cap of around USD 26.4bn at end Q2 2016 • Approximately 90,000 employees in more than 130 countries • Long term credit ratings of BBB+ (credit watch negative) and Baa1 (stable) from S&P and Moody’s respectively • Stable and consistent ownership structure • Strategic focus on: • Maersk Line • Maersk Oil • APM Terminals • Maersk Drilling • APM Shipping Services page 5 The Maersk Group at a glance MAERSK LINE Brands Share of FY #1 Global container liner by TEU capacity (15.3% share1) 2015 CFFO Operates a capacity of 3.1m TEU by end Q2 2016: • 283 (1.8m TEU) owned vessels • 347 (1.3m TEU) chartered vessels 41% Young fleet – efficient on fuel and reduced environmental impact MAERSK OIL Mid sized independent E&P company with an entitlement production of 312,000 boepd in 2015 Production in 7 countries, exploration portfolio in 9 countries Reserves and resources (2P+2C) of 1,141m boe with proved and probable reserves (2P) of 649m 22% boe at end-2015 Expecting total cost savings by end-2016 to be 25-30% compared to end-2014. APM TERMINALS #4 Global terminal operator by equity throughput in 20152 Services around 60 shipping companies 72 operating terminals and 140 inland operations with an overall presence in 69 countries, 11% spanning 5 continents Total container throughput of 36m TEU in 2015 MAERSK DRILLING Leading global operator of high technology drilling rigs, providing offshore drilling services to oil and gas companies Has one of the youngest and most advanced fleets in the world, consisting of premium, harsh and 16% ultra-harsh environment assets Market leader in the Norwegian jack-up market and growing in the ultra deep-water segment APM SHIPPING SERVICES The leading high-end company One of the leading 4PL in the offshore supply vessel providers in the logistics industry industry 10% One of the largest companies The leading company in the in the product tanker industry towage industry 1 Source: Alphaliner, July 1st, 2016 2 Source: Drewry Maritime Research, July 2016 page 6 Group financial highlights Group Financial Highlights* Group highlights Q2 2016 • Group profit decreased 89% to USD 118m (USD 1.1bn) USDm negatively impacted by significantly lower container freight Underlying Q2 2015 Q2 2016 Profit profit*Free cash flow rates and oil price. Group ROIC was 2.0% (10.2%) 4,852 5,000 • Underlying profit decreased to USD 134m (USD 1.1bn), 4,000 predominantly driven by a loss in Maersk Line 3,000 • The Group continues to execute on reducing cost and delivering high operational performance across its business 2,000 units. Maersk Line realised unit cost below 2,000 USD/FFE and 1,086 1,099 Maersk Oil continues to operate with a break-even price level 1,000 326 118 134 86 in the range of USD 40-45 per barrel 0 Profit Underlying Free cash flow • Free cash flow was USD 326m (USD 4.9bn) profit* • Cash flow from operating activities decreased to USD 940m *Free cash flow in Q2 2015 include the sale of shares in Danske Bank of USD 4.8bn. (USD 1.8bn) materially impacted by the low profit Underlying profit by activity* • Net cash flow used for capital expenditure was USD 614m USDm (USD 1.7bn excluding the sale of shares in Danske Bank of Q2 2015 Q2 2016 USD 4.8bn) mainly driven by the acquisition of the jack-up 600 499 rig Maersk Highlander and development of the Culzean oil field 400 217 189 • Net interest bearing debt increased to USD 11.7bn (USD 130 159 164 200 109 109 10.7bn end-Q1 2016) mainly driven by dividend payment of 51 USD 1.0bn 0 • The Group maintains its strong financial position with an equity ratio of 55% and a liquidity reserve of USD 11.5bn. -200 -139 Maersk Maersk APM Maersk APM Line Oil Terminals Drilling Shipping Services • In H1 2016 the Group’s profit was USD 342m (USD 2.7bn) *Underlying profit is equal to the profit or loss for the period excluding net impact from • Cash flow from operations in H1 was USD 1.2bn (USD 3.7bn) divestments and impairments page 7 Acceptable full year result in challenging times Group Financial Highlights Group highlights FY 2015 USDm Underlying 2014 2015 • Group profit decreased 82% to USD 925m (2014: USD Profit profit*Free cash flow** 5.2bn) negatively impacted by net impairments of USD 8,000 6,561 2.6bn on oil assets as well as lower container freight rates and lower oil prices 6,000 5,195 4,532 • Group ROIC was 2.9% (2014: 11.0%) 4,000 3,071 2,588 • Underlying profit decreased to USD 3.1bn (2014: USD 2,000 4.5bn). All business units remained profitable but with 925 1,633 significantly lower profits in Maersk Line, Maersk Oil and 0 APM Terminals Profit Underlying Free cash flow** profit* • Free cash flow was USD 6.6bn (2014: USD 2.6bn). Excluding the sale of the shares in Danske Bank free cash flow was USD 1.6bn Underlying profit by activity* • Net cash flow used for capital expenditure came at USDm 2014 2015 USD 6.3bn (2014: USD 6.2bn), excluding the sale of 2,500 2,199 shares in Danske Bank of USD 4.9bn 2,000 • Cash flow from operating activities remained at a high 1,500 1,287 level of USD 8.0bn (2014: USD 8.8bn) 1,035 1,000 849 732 626 435 471 404 500 185 0 Maersk Line Maersk Oil APM Maersk APM Shipping Terminals Drilling Services *Continuing businesses excluding net impact from divestments and impairments **From continuing operations page 8 Strategy update - Group Strategic review Current strategy The Group is performing well relative to the industries in During the ongoing strategic review the Group strategy which it operates. Seven out of eight business units were remains unchanged as previously communicated with a top-quartile performers in their industries in FY 2015, strategic direction of representing around 97% of the Group’s invested capital. • targeting profitable growth through The Group has achieved its strong operational performance through focused efforts to reduce cost, improve utilisation, • business optimization and cost efficiency operational uptime and production efficiency. • strong customer focus Currently, however, the Group is challenged by market • value-enhancing acquisitions headwinds in form of low growth and excess capacity in most of its industries, which has led to declining prices and • maintain top-quartile performance in all business units revenue. • grow our businesses and thereby achieve our ambition Recognizing the Group’s low growth and returns the Board of a ROIC above 10% over the cycle. The Group of Directors has during Q2 initiated a process to develop reiterates that in a low interest environment its and consider the strategic and structural options for the businesses can make investment decisions that on a Maersk Group to further increase agility and synergies. standalone basis do not fully comply with the 10% ROIC target The purpose of this review is to ensure that the Group remains strong, profitable and financially viable and that The Group continues to focus on ensuring a strong capital the Group develops new growth opportunities. structure and a high operating cash flow conversion with an ambition to increase the nominal dividend per share over Progress will be communicated before end of Q3 2016. time, supported by underlying earnings growth. page 9 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 • Growing at least with the market to defend our market leading position • EBIT margin 5%-points above peer average • Funded by own cash flow MAERSK LINE • Average returns of 8.5-12.0% (ROIC) • Mature key projects • Acquisitions and opportunistic investments • Focus on cost management MAERSK OIL • Container and multiport (adjacent) expansion • Active portfolio management • Grow ahead of global transportation market APM TERMINALS • Capitalize on large & new fleet • Maintain core focus on ultra-deepwater & harsh-environment market segments • Focus on cost savings initiatives MAERSK DRILLING • Optimise operational efficiency performance • Executing on cost programs • Rejuvenating part of the fleet APM SHIPPING SERVICES page 10 Invested capital and ROIC Breakdown of ROIC by business Guidance for 2016 The Group’s expectation of an underlying result significantly Invested ROIC % ROIC % ROIC % Business capital below last year (USD 3.1bn) is unchanged. Gross cash flow Q2 2016 Q2 2015 FY 2015 (USDm) used for capital expenditure is now expected to be around USD 6bn in 2016 (USD 7.1bn) from previously around USD Group 46,424 2.0% 10.2% 2.9% 7bn.