Maersk posts record earnings, further expands logistics portfolio

Danish container shipping and logistics giant A.P. Moller – Maersk has delivered record earnings for 2021 despite persistent supply chain disruptions.

In 2021, revenue was up 55 percent to $61.8 billion, EBITDA tripled to $24 billion and free cash flow was $16.5 billion, allowing the company to make strategic long-term investments into decarbonisation 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,” Søren Skou, CEO of A.P. Moller – Maersk, commented.

“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 41 percent to $9.8 billion.

Furthermore, six businesses were acquired within 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 $48.2 billion in 2021, compared to $29.2 billion 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 prioritise contracted volumes, according to Maersk.

Also in Terminals, profitability continued to grow in 2021 driven by strong volumes performance and storage income.

During the year, the use of digital solutions and services grew significantly, with turnover on Maersk.com reaching $38 billion. Traffic increased 15 percent as customers continued to adopt digital solutions even further. Also, bookings via mobile app increased more than 15-fold.

Guidance 2022

Maersk expects the current market situation to continue into Q2 2022 with a normalisation to occur early in the second half of the year.

Based on these assumptions, the company said it expects for full year 2022:

• Underlying EBITDA of around $24 billion
• Underlying EBIT of around $19 billion
• Free cash flow (FCF) of above $15 billion

Ocean is expected to grow in line with global container demand, which is expected to increase 2-4 pct. in 2022, subject to high uncertainties related to the current congestion, network disruptions and demand patterns.

Maersk to to acquire Pilot Freight Services

Coinciding with the publication of the financial results, Maersk announced today the intended acquisition of Pilot Freight Services (Pilot), a U.S.-based first, middle and last mile as well as border crossing solutions provider, specializing in the big and bulky freight segment in North America for B2C and B2B distribution models.

With the intended acquisition of Pilot, Maersk plans to extend its integrated logistics offering deeper into the supply chain of its customers.

It will complement the earlier acquisitions already made to provide integrated logistics solutions in North America, especially with Performance Team and Visible SCM, as explained by the company.

Pilot will be adding specific new services within the fast-growing big and bulky e-commerce segment, thus increasing cross-selling opportunities. It will also create significant cost synergies by leveraging capabilities across the different parts of service solutions.

The transaction price is $1.68 billion. The acquisition is subject to regulatory review and approval which is expected to be obtained by Q2 2022.

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