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Q1 2014 EARNINGS CALL – Maersk Oil

Maersk Oil · May 21, 2014 · 50 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Q1 2014 EARNINGS CALL – Maersk Oil – slide 1
    A.P. Mller - Mrsk A/S Interim Report Q1 2014 21 21 May 2014 Conference May 2014 Conference call 9.30am call 9.30am CET CET webcast webcastavailable availableatatwww.maersk.com www.maersk.com
  2. Q1 2014 EARNINGS CALL – Maersk Oil – slide 2
    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. Mller - Mrsk A/S control, may…
  3. Q1 2014 EARNINGS CALL – Maersk Oil – slide 3
    page 3 Group Financial Highlights Q1 2014 Group Financial Highlights Reported profit of USD 1.2bn in Q1 2014 (USD 0.8bn). Profit excluding one-offs increased by USD million Q1 2013 Q1 2014 51% to USD 1.1bn (USD 0.8bn) 1,400…
  4. Q1 2014 EARNINGS CALL – Maersk Oil – slide 4
    page 4 Maersk Line results Q1 Q1 FY (USD million) 2014 2013 Change 2013 Highlights Q1 2014 Revenue 6,463 6,313 +2.4% 26,196 Maersk Line delivered a profit of USD 454m (USD EBITDA 862 631 +36.6% 3,313 204m). ROIC was 9.0%…
  5. Q1 2014 EARNINGS CALL – Maersk Oil – slide 5
    page 5 Maersk Line cost reductions Unit cost including VSA income Highlights Q1 2014 USD/FFE 3,100 3,054 Unit costs declined by 9.0% or 259 USD/FFE to 2,612 USD/FFE compared to Q1 2013 driven by -323 2,871 * network efficiencies…
  6. Q1 2014 EARNINGS CALL – Maersk Oil – slide 6
    page 6 Maersk Oil results (USD million) Q1 Q1 Change FY Highlights Q1 2014 2014 2013 2013 Maersk Oil delivered a profit of USD 346m (USD 346m) Revenue 2,448 2,381 +2.8% 9,142 and a ROIC of 21.2% (20.6%) Exploration costs 173…
  7. Q1 2014 EARNINGS CALL – Maersk Oil – slide 7
    page 7 Progress on all major projects in line with expectations Short-term perspectives Long-term perspectives Qatar: The Al Shaheen FDP2012 development Angola: Chissonga FDP submitted to authorities. plan; six of 51 wells…
  8. Q1 2014 EARNINGS CALL – Maersk Oil – slide 8
    page 8 Reserve and resource update (million boe) End End 2012 2013 Proved reserves (1P) 410 392 Probable reserves (2Pincrement) 209 207 Proved and Probable reserves (2P) 619 599 Contingent resources (2C) 740 874 Reserves &…
  9. Q1 2014 EARNINGS CALL – Maersk Oil – slide 9
    page 9 APM Terminals results Q1 Q1 FY Highlights FY Q1 2014 (USD million) Change 2014 2013 2013 Revenue 1,092 1,040 +5.0% 4,332 Profit rose by 30% to USD 215m (USD 166m) EBITDA 265 201 +31.8% 892 with a ROIC of 14.0% (12.0%)…
  10. Q1 2014 EARNINGS CALL – Maersk Oil – slide 10
    page 10 Maersk Drilling results Q1 Q1 FY (USD million) 2014 2013 Change 2013 Highlights Q1 2014 Profit decreased to USD 116m (USD 146m), mainly due to Revenue 477 480 -0.1% 1,972 three rigs on planned yard stays and start-up…
  11. Q1 2014 EARNINGS CALL – Maersk Oil – slide 11
    page 11 Services & Other Shipping results Underlying profit by activity Q1 2014* Highlights Q1 2014 USD million Q1 2013 Q1 2014 Services & Other Shipping Reported profit for Services & Other Shipping improved to USD 75m versus…
  12. Q1 2014 EARNINGS CALL – Maersk Oil – slide 12
    page page 12 12 Focus on performance Breakdown of ROIC by business Business Invested ROIC % ROIC % ROIC % capital Q1 2014* Q1 2013* FY 2013 (USDm) Group 53,558 10.0% 8.0% 8.2% Maersk Line 20,161 9.0% 4.0% 7.4% Maersk Oil…
  13. Q1 2014 EARNINGS CALL – Maersk Oil – slide 13
    page 13 A strong financial framework Well capitalised position Active portfolio management Net debt reduction of USD 2.3bn since Q4 2013 Cash flow from divestments has been USD 7.2bn with divestment gains of USD 1.8bn pre-tax 2009…
  14. Q1 2014 EARNINGS CALL – Maersk Oil – slide 14
    page 14 Consolidated Financial Information Income statement (USD million) Q1 2014 Q1 2013 Change FY 2013 Revenue 11,736 11,634 0.9% 47,386 EBITDA 3,017 2,782 8.4% 11,372 Depreciation, etc. 937 1,050 -10.8% 4,628 Gain on sale of…
  15. Q1 2014 EARNINGS CALL – Maersk Oil – slide 15
    page 15 Outlook for 2014 The Group still expects a result for 2014 significantly above the Sensitivities for 2014 2013 result of USD 3.8bn predominantly impacted by the USD Factors Change Effect on the 2.8bn gain from the sale of…
  16. Q1 2014 EARNINGS CALL – Maersk Oil – slide 16
    page 16 Priorities for execution in 2014 Maersk Line Manage capacity effectively and maintain market share during introduction of additional Triple-E vessels P3 network operational subject to regulatory approval Keep EBIT-margin…
  17. Q1 2014 EARNINGS CALL – Maersk Oil – slide 17
    page 17 Q&A - To ask a question please press * then 01
  18. Q1 2014 EARNINGS CALL – Maersk Oil – slide 18
    page 18 Appendix Appendix
  19. Q1 2014 EARNINGS CALL – Maersk Oil – slide 19
    page 19 Group Business Drivers Q1-14 Q1-13 Q4-13 Change vs Change vs previous previous quarter year Transported container 2.2 2.1 2.2 - +7.3% volumes, FFE (million) Average container freight 2,628 2,770 2,662 -1.3% -5.1%…
  20. Q1 2014 EARNINGS CALL – Maersk Oil – slide 20
    page 20 Maersk Group Key facts Founded in 1904 Represented in over 130 countries, employing around 90,000 people Market capitalization of around USD 51bn end Q1 2014 Facilitating global containerised trade Maersk Line…
  21. Q1 2014 EARNINGS CALL – Maersk Oil – slide 21
    page 21 Strategy and targets Maersk Line Maersk Oil APM Terminals Maersk Drilling Services & other shipping* Self-funded 400,000 boepd USD 1bn NOPAT USD 1bn NOPAT USD 0.5bn NOPAT EBIT 5%-points peers ROIC at least 10% Global…
  22. Q1 2014 EARNINGS CALL – Maersk Oil – slide 22
    page 22 Development in invested capital Development in invested capital since Q2 2012 Invested capital Q1 2014 Maersk Line Maersk Oil Maersk Drilling 58% APM Terminals Maersk Drilling APM Terminals 41% Other businesses Services &…
  23. Q1 2014 EARNINGS CALL – Maersk Oil – slide 23
    page 23 Capital allocation Businesses Investment guidelines Maersk Line Invest up to own cash flow from operations when required to defend market position and preserve cost leadership Maersk Oil Continued investment program to…
  24. Q1 2014 EARNINGS CALL – Maersk Oil – slide 24
    page 24 Cash flow supported by active portfolio management Cash flow from divestments has been USD 7.2bn with divestment gains of USD 1.8bn pre-tax since 2009 USDbn 3.5 3.3 3.0 2.5 2.0 1.4 1.5 1.2 1.0 0.7 0.5 0.6 0.5…
  25. Q1 2014 EARNINGS CALL – Maersk Oil – slide 25
    page 25 The Groups financial guidelines Defined financial ratios in line with strong investment grade rating Key ratio guidelines: Equity / Total Assets 40% Equity / Adj. Total Assets* 30% Adj. FFO / Adj. Net Debt* 30% Adj.…
  26. Q1 2014 EARNINGS CALL – Maersk Oil – slide 26
    page 26 Liquidity reserve of USD 15.9bn Loan maturity profile end Q1 2014 Funding USD bn. 10 BBB+/Baa1 credit ratings (both stable) assigned by S&P/Moodys 8 Liquidity reserve of USD 15.9bn as of end Q1 2014 6 Average debt…
  27. Q1 2014 EARNINGS CALL – Maersk Oil – slide 27
    page 27 Shareholders and share performance Maersk B relative share performance Share fact box Maersk B 23% Listed on NASDAQ MAERSK-A (voting right) 11% OMX Copenhagen MAERSK-B (no voting right) Synthetic peer -17% -6% Market…
  28. Q1 2014 EARNINGS CALL – Maersk Oil – slide 28
    page 28 Maersk Line Founded Revenue in 2013 (USDm) 1928 26,196 32,900 3,313 employees EBITDA in 2013 (USDm) Number of vessels/ fleet capacity (TEUm) Net Operating Profit After Tax in 2013 (USDm) 584 / 2.6 1,510 Note:…
  29. Q1 2014 EARNINGS CALL – Maersk Oil – slide 29
    page 29 Maersk Lines execution on strategy Strategic medium term aspiration Status March 2014 (communicated at CMD 2013) Top quartile performer Achieved EBIT margin 5% points above peer average EBIT margin gap was 9.9% in Q1…
  30. Q1 2014 EARNINGS CALL – Maersk Oil – slide 30
    page 30 Maersk Lines capacity market share by trade no.3 12% no.2 no.6 no.3 no.1 no.2 Intra 8% 5% Europe 22% Pacific Atlantic Asia-Europe Pacific Intra 6% Asia no.3 Latin Africa West- Oceania America Central Asia 16%…
  31. Q1 2014 EARNINGS CALL – Maersk Oil – slide 31
    page 31 ML carried volume versus fleet capacity development Indexed Q1 2012 = 100 Fleet capacity Volumes 110 105 100 95 90 Q1'12 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Appendix
  32. Q1 2014 EARNINGS CALL – Maersk Oil – slide 32
    page 32 Maersk Line break-even level for freight rate reduced Average freight rate, (USD/FFE) 3,100 Quarterly 3,014 3,022 Annual 3,000 2,908 2,892 2,900 2,846 2,860 2,800 2,770 2,662 2,654 2,700 2,671 2,646 2,618…
  33. Q1 2014 EARNINGS CALL – Maersk Oil – slide 33
    page 33 Maersk Line EBIT-margin gap to peers EBIT-margin, % EBIT-margin gap, %-points 25% 25% 20% 20% 15% 12.9% 15% 10.5% 9.9% 7.0% 9.2% 10% 7.9% 8.4% 9.1% 10% 6.7% 6.7% 5.3% 5.4% 5.8% 5.8% 5.4% 5.4% 5.4% 3.1% 1.2% 4.0%…
  34. Q1 2014 EARNINGS CALL – Maersk Oil – slide 34
    page 34 Vessel, bunker and terminal represent the largest components of our cost base Cost base, FY 2013 Administration Terminal 10% and other costs USD 24.7bn costs 26% FY 2013 cost base Bunker 21% 11% Inland 2,731…
  35. Q1 2014 EARNINGS CALL – Maersk Oil – slide 35
    page35 page 35 Maersk Oil Founded 1962 4,100 employees Operated production/ entitlement production 557,000 boepd 235,000 boepd Number of platforms/FPSOs* 77/3 End 2013 numbers *Floating Production, Storage and…
  36. Q1 2014 EARNINGS CALL – Maersk Oil – slide 36
    page 36 Maersk Oils execution on strategy Strategic aspiration by 2020 Status March 2014 (communicated at Capital Markets Day 2012) ROIC expected to remain above 10% ROIC was 21.2% in Q1 2014 Creating value by investing in…
  37. Q1 2014 EARNINGS CALL – Maersk Oil – slide 37
    page 37 Maersk Oils portfolio EXPLORATION Resources PROJECT MATURATION PROCESS Reserves PRODUCTION Prospects in Initiate & the pipeline Discoveries Assess Select Define Execute Assets Jack I Dunga III Farsund Jack II…
  38. Q1 2014 EARNINGS CALL – Maersk Oil – slide 38
    page 38 Maersk Oils Key Projects Sanctioned development projects Project (Country) First Production Working Interest Net Capex Plateau Production (USD Billion) (Entitlement, boepd) Al Shaheen FDP2012 (Qatar) 2013 100% 1.5…
  39. Q1 2014 EARNINGS CALL – Maersk Oil – slide 39
    page 39 Maersk Oils share of Production and Exploration Costs Maersk Oils share of production (000 boepd) 500 424 429 387 377 400 333 321 300 257 235 240 200 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014e DK UK…
  40. Q1 2014 EARNINGS CALL – Maersk Oil – slide 40
    page 40 APM Terminals Founded Revenue in 2013 (USDm) 2001 4,332 20,300 892 employees EBITDA in 2013 (USDm) Number of terminals + new projects Net Operating Profit After Tax in 2013 (USDm) 65 + 7 770 Note: Figures…
  41. Q1 2014 EARNINGS CALL – Maersk Oil – slide 41
    page 41 APM Terminals execution on strategy Strategic aspiration by 2016 Status March 2014 (communicated at CMD 2012) Best port operator in the world ROIC remains 12% despite high investment level Recognized for operational…
  42. Q1 2014 EARNINGS CALL – Maersk Oil – slide 42
    page 42 Portfolio APM Terminals has seven new terminal projects: Maasvlakte II, Netherlands, end-2014 Izmir, Turkey, 2015 Lazaro Cardenas, Mexico, 2015 Ningbo, China, 2015 Moin, Costa Rica, end-2016 Vado, Italy, end-2016…
  43. Q1 2014 EARNINGS CALL – Maersk Oil – slide 43
    page 43 Port projects underway New terminal developments Existing terminal expansion Americas Region Americas Region Lzaro Crdenas, Mexico (TEC2) Buenos Aires, Argentina (Terminal 4) Moin, Costa Rica (Moin Container Terminal)…
  44. Q1 2014 EARNINGS CALL – Maersk Oil – slide 44
    page 44 APM Terminals financials including pro-rata share of joint ventures and associates Q1 2014 Q1 2013 Consolidated Share of Total including Consolidated Share of Total including (USD million) under current JVs & ass. JVs…
  45. Q1 2014 EARNINGS CALL – Maersk Oil – slide 45
    page 45 Maersk Drilling Founded Revenue in 2013 (USDm) 1972 1,972 4,000 863 employees EBITDA in 2013 (USDm) Rig fleet (existing and order book) Net Operating Profit After Tax in 2013 (USDm) 18+6 528 Note: Figures…
  46. Q1 2014 EARNINGS CALL – Maersk Oil – slide 46
    page 46 Maersk Drillings execution on strategy Strategic aspiration Status March 2014 (communicated at CMD 2013) Deliver on the financial ambition of NOPAT of NOPAT was USD 116m in Q1 2014 USD 1bn in 2018 ROIC expected to…
  47. Q1 2014 EARNINGS CALL – Maersk Oil – slide 47
    page page47 page 47 47 Managing the newbuild programme Expected delivery schedule Maersk Intrepid Keppel FELS Delivered XL Enhanced II Keppel FELS XL Enhanced III Keppel FELS XL Enhanced IV Daewoo Maersk Viking Samsung…
  48. Q1 2014 EARNINGS CALL – Maersk Oil – slide 48
    page 48 Full utilisation and continued strong operational uptime for Maersk Drillings rigs in 2014 Q1 Contracted days (left) and coverage % (right) Operational uptime* 1,500 100% 100% 97% 96% 96% 97% 1,200 94% 80% 94% 92%…
  49. Q1 2014 EARNINGS CALL – Maersk Oil – slide 49
    page page 4949 Forward contract coverage reflecting reduced demand for high end assets Maersk Drilling forward contract coverage 100% 93% 80% 60% 70% 40% 50% 20% 31% 0% 2014 RoY 2015 2016 2017 Maersk…
  50. Q1 2014 EARNINGS CALL – Maersk Oil – slide 50
    page 50 Henrik Lund Johan Mortensen Stephanie Fell Head of Investor Relations Senior Investor Relations Officer Investor Relations Officer henrik.lundmaersk.com johan.mortensenmaersk.com stephanie.fellmaersk.com Tel: +45 3363 3106…

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