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Q3 2013 EARNINGS CALL – Maersk Oil

Maersk Oil · Nov 13, 2013 · 58 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. Q3 2013 EARNINGS CALL – Maersk Oil – slide 1
    A.P. Mller - Mrsk A/S Interim Report Q3 2013 13 November 2013 Conference call 9.30am CET webcast available at www.maersk.com
  2. Q3 2013 EARNINGS CALL – Maersk Oil – slide 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 cause…
  3. Q3 2013 EARNINGS CALL – Maersk Oil – slide 3
    page 3 Executing on Group Strategy Profit in Q3 was USD 1,195m and ROIC was 9.5%. Profit for the first 9M was USD 2,841m and ROIC was 8.3% Maersk Line reduced unit costs further mainly through improved utilisation. Fourth…
  4. Q3 2013 EARNINGS CALL – Maersk Oil – slide 4
    page 4 Group Financial Highlights Group Financial Highlights Reported profit of USD 1,195m in Q3 2013 (USD 934m). Profit 9M 2012 9M 2013 excluding one-offs was USD 1,254m (USD 948m), driven by an USD million accounting loss of USD…
  5. Q3 2013 EARNINGS CALL – Maersk Oil – slide 5
    page 5 Maersk Line results Q3 Q3 9M 9M (USD million) 2013 2012 2013 2012 Highlights Q3 2013 Revenue 6,782 6,961 19,746 20,595 Maersk Line delivered a profit of USD 554m (USD 498m) and a ROIC of 10.9% (9.7%) EBITDA 999 932 2,550…
  6. Q3 2013 EARNINGS CALL – Maersk Oil – slide 6
    page 6 Maersk Line cost reductions Continued unit cost improvements Unit costs declined by USD 81/FFE to USD Unit cost (USD/FFE) 2,622/FFE Q3/Q2 driven by increased 3,200 volume on flat cost base 3,108 3,100 3,054 Total costs…
  7. Q3 2013 EARNINGS CALL – Maersk Oil – slide 7
    page 7 Maersk Oil results Q3 Q3 9M 9M Highlights Q3 2013 (USD million) 2013 2012 2013 2012 Revenue 2,210 2,388 6,650 7,650 Maersk Oil delivered a profit of USD 189m (USD 243m) and a ROIC of 12.0% (14.3%), impacted by lower…
  8. Q3 2013 EARNINGS CALL – Maersk Oil – slide 8
    page 8 APM Terminals results Q3 Q3 9M 9M (USD million) 2013 2012 2013 2012 Highlights Q3 2013 Revenue 1,122 1,051 3,230 3,164 Profit rose to USD 203m (USD 156m) with a strong underlying profit of USD 195m (USD 156m). ROIC…
  9. Q3 2013 EARNINGS CALL – Maersk Oil – slide 9
    page 9 Active Portfolio Management focusing on growth markets Significant recent developments New project Expansion Acquisition New Projects Major Acquisitions Major Expansions Divestments Lazaro Cardenas, Mexico Global…
  10. Q3 2013 EARNINGS CALL – Maersk Oil – slide 10
    page 10 Maersk Drilling results Q3 Q3 9M 9M (USD million) 2013 2012 2013 2012 Highlights Q3 2013 Revenue 507 400 1,499 1,243 Profit increased by 76% to USD 148m (USD 84m), mainly due to two rigs on yardstay in Q3 2012, higher…
  11. Q3 2013 EARNINGS CALL – Maersk Oil – slide 11
    page 11 Services & other shipping Underlying profit by activity 9 months* Highlights Q3 2013 USD million 9M 2012 9M 2013 Maersk Supply Service Reported profit increased to USD 76m (USD 48m) mainly due to higher utilisation and…
  12. Q3 2013 EARNINGS CALL – Maersk Oil – slide 12
    page 12 12 page Focus on performance Breakdown of ROIC by business Business Invested ROIC % ROIC % ROIC % capital Q3 2013* 9M 2013* 2012 (USDm) Group 53,403 9.5 8.3 8.9 Maersk Line 20,334 10.9 7.8 2.3 Maersk Oil 6,107 12.0…
  13. Q3 2013 EARNINGS CALL – Maersk Oil – slide 13
    page 13 Investments and debt Cash flow used for capital expenditure net of sales proceeds Optimise balance sheets for future growth was USD 1.4bn (USD 0.6bn) in Q3: USD million The Group continues to allocate capital to the most…
  14. Q3 2013 EARNINGS CALL – Maersk Oil – slide 14
    page 14 Consolidated Financial Information Income statement (USD million) Q3 2013 Q3 2012 Change 9M 2013 9M 2012 Change FY 2012 Revenue 14,562 14,643 -0.6% 42,772 44,334 -3.5% 59,089 EBITDA 3,233 3,254 -0.6% 9,094 9,220 -1.4%…
  15. Q3 2013 EARNINGS CALL – Maersk Oil – slide 15
    page 15 Outlook for 2013 The Group revises its expected result for 2013 to around USD 3.5bn Sensitivities for the remainder of 2013 (USD 4.0bn) from previously around USD 3.3bn. Excluding impairment losses and divestment gains, the…
  16. Q3 2013 EARNINGS CALL – Maersk Oil – slide 16
    page 16 Final remarks Development in invested capital since Q2 2012 The Group will create value through Maersk Drilling 36% profitable growth APM Terminals 34% The Group has the ambition to grow invested Damco 17% capital…
  17. Q3 2013 EARNINGS CALL – Maersk Oil – slide 17
    page 17 Q&A - To ask a question please press * then 01 Interim Report Q3 2013
  18. Q3 2013 EARNINGS CALL – Maersk Oil – slide 18
    page 18 Appendix
  19. Q3 2013 EARNINGS CALL – Maersk Oil – slide 19
    page 19 Maersk Group Key facts Founded in 1904 Represented in over 130 countries, employing around 121,000 people Market capitalization of around USD 40bn Facilitating global containerised trade Maersk Line carries around…
  20. Q3 2013 EARNINGS CALL – Maersk Oil – slide 20
    page 20 Group Financial Highlights Q3 2013 Group financial highlights Reported profit of USD 1,195m (USD 934m in Q3 2012). Profit USD million Q3 2012 Q3 2013 excluding one-offs was USD 1,254m (USD 948m), driven by an accounting…
  21. Q3 2013 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. Q3 2013 EARNINGS CALL – Maersk Oil – slide 22
    page 22 Priorities for execution Deliver on commitments Maersk Line will keep managing its capacity effectively during the introduction of the Triple-E vessels while maintaining market share. In addition to a safe operation,…
  23. Q3 2013 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. Q3 2013 EARNINGS CALL – Maersk Oil – slide 24
    page 24 Consolidated Financial Information (DKK) Income statement (DKK million) Q3 2013 Q3 2012 Change 9M 2013 9M 2012 Change FY 2012 Revenue 82,060 87,280 -6.0% 242,323 257,499 -5.9% 342,363 EBITDA 18,228 19,344 -5.8% 51,522…
  25. Q3 2013 EARNINGS CALL – Maersk Oil – slide 25
    page 25 Group Business Drivers Q3-13 Q2-13 Q3-12 Change vs Change vs previous previous year quarter Transported container 2.3 2.2 2.1 +5% +10.6% volumes, FFE (million) Average container freight 2,654 2,618 3,022 +1.4%…
  26. Q3 2013 EARNINGS CALL – Maersk Oil – slide 26
    page 26 Development in invested capital Invested capital Q2 2012 Invested capital Q3 2013 Maersk Line Maersk Oil Maersk Line Maersk Oil APM Terminals Maersk Drilling APM Terminals Maersk Drilling Other businesses* Shipping &…
  27. Q3 2013 EARNINGS CALL – Maersk Oil – slide 27
    page 27 Investment in growth Cash flow from operations and Capex Track record for growth USDbn 14 Cash flow used for capital 12.0 11.4 expenditure, gross accumulates 12 10.1 to USD 52bn since 2008 10 9.4 8.5 8.4 Cash flow…
  28. Q3 2013 EARNINGS CALL – Maersk Oil – slide 28
    page 28 Cash flow supported by active portfolio management Cash flow and gains from divestments Divestment cash flow USDbn Cash flow from divestments has been USD 3.5 3.3 11.0bn with divestment gains of USD 4.4bn 3.0 pre-tax…
  29. Q3 2013 EARNINGS CALL – Maersk Oil – slide 29
    page 29 Investment in growth Capital commitments Growth commitment USDbn The Group has entered into 14 4.6 12.3 USD 12.3bn capital 12 commitments per 30 September 2013 10 5.8 76% of all capital commitments or USD 9.4bn…
  30. Q3 2013 EARNINGS CALL – Maersk Oil – slide 30
    page 30 Credit rating of BBB+/Baa1assigned in September 2013 APMM has received a credit A credit rating is the natural next step in rating in order to: APMMs funding strategy Support the Groups growth Funding historically based…
  31. Q3 2013 EARNINGS CALL – Maersk Oil – slide 31
    page 31 The Groups financial GPI facility in St. Petersburg guidelines Defined financial ratios in line with strong investment grade rating Key ratio guidelines: Equity / Total Assets 40% Equity / Adj. Total Assets* 30% Adj.…
  32. Q3 2013 EARNINGS CALL – Maersk Oil – slide 32
    page 32 Funding in place with liquidity buffer of USD 15.2bn Loan maturity profile end Q3 2013 Funding USD billion BBB+/Baa1 credit ratings (both stable) 10 assigned by S&P/Moodys on 25 September 2013 8 Liquidity reserve of…
  33. Q3 2013 EARNINGS CALL – Maersk Oil – slide 33
    page 33 Investments Profit by activity* Dansk Supermarked Group USD million Q3 2012 Q3 2013 Profit improved to USD 62m (USD 36m) due to; 48 Revenue growth seen across all Dansk Supermarked countries 62 Cost reduction…
  34. Q3 2013 EARNINGS CALL – Maersk Oil – slide 34
    page 34 Development in dividends Development in dividends and yield since 2002 Pay-out ratio 33% of underlying profit in 2012 DKK % The Groups objective is to 1,400 3.5% increase the nominal dividend per share over time;…
  35. Q3 2013 EARNINGS CALL – Maersk Oil – slide 35
    page 35 Maersk Line Key facts 596 vessels with a capacity of 2.6m TEU transporting 8.5m FFE generating a total revenue of USD 27bn in 2012 Enabling global growth with a total value of goods transported estimated at USD…
  36. Q3 2013 EARNINGS CALL – Maersk Oil – slide 36
    page 36 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 2,654 2,700 2,671 2,646 2,618 2,600…
  37. Q3 2013 EARNINGS CALL – Maersk Oil – slide 37
    page 37 Maersk Line EBIT-margin gap to peers EBIT-margin, % EBIT-margin gap, %-points 25% 25% 20% 20% 15% 12.8% 15% 10.4% 9.2% 10% 5.4% 8.3% 10% 7.3% 7.0% 7.0% 4.8% 4.6% 4.9% 5.6% 4.9% 2.9% 5% 0.7% 3.9% 5% 3.0% 3.6%…
  38. Q3 2013 EARNINGS CALL – Maersk Oil – slide 38
    page 38 Improved competitiveness has made us best in class Maersk Line improving gap to peers H1 2013 industry top performers EBIT margin, (% points) EBIT margin, (%) EBIT, (USD m) 10% Maersk Line 6% 755 8% CMA CGM 4% 286…
  39. Q3 2013 EARNINGS CALL – Maersk Oil – slide 39
    page 39 Vessel, bunker and terminal represent the largest components of our cost base Cost base, FY 2012 Administration Terminal 9% and other costs USD 26bn costs 24% FY 2012 cost base Bunker 25% 12% Inland 3,054…
  40. Q3 2013 EARNINGS CALL – Maersk Oil – slide 40
    page 40 Stability from diversity in contract duration and global footprint Revenue split, H1 2013 Volume split, FY 2012 Demurrage, 3+ month Oceania North America detention 10% contracts 5% and other 15% revenue West & 17%…
  41. Q3 2013 EARNINGS CALL – Maersk Oil – slide 41
    page 41 P3 Network In June, Maersk Line, MSC and CMA CGM agreed in principle to establish a long-term operational alliance on EastWest trades, called the P3 Network (press release). The P3 Parties have carefully reviewed the…
  42. Q3 2013 EARNINGS CALL – Maersk Oil – slide 42
    page 42 Maersk Oil Maersk Oil operates production of about 600,000 barrels of oil equivalent per day from Denmark, the UK, Qatar, Kazakhstan, Brazil and Algeria. Exploration activities are ongoing in Angola, Norway, the US Gulf…
  43. Q3 2013 EARNINGS CALL – Maersk Oil – slide 43
    page 43 Maersk Oils Key Projects (as of Q3 2013) 2013-2014 Sanctioned development projects Project (Country) First Production Working Interest Net Capex Plateau Production (USD Billion) (Entitlement, boepd) FDP2012 (Qatar) 2013…
  44. Q3 2013 EARNINGS CALL – Maersk Oil – slide 44
    page 44 Progress on the road to 400,000 barrels per day (Q3 2013) - A maturing project portfolio EXPLORATION Resources PROJECT MATURATION PROCESS Reserves PRODUCTION Prospects in Initiate & the pipeline Discoveries Assess…
  45. Q3 2013 EARNINGS CALL – Maersk Oil – slide 45
    page page 45 45 page 45 Maersk Oils share of Production and Exploration Costs Maersk Oils share of production (000 boepd) 500 DK UK Qatar Algeria Other 450 400 350 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008…
  46. Q3 2013 EARNINGS CALL – Maersk Oil – slide 46
    page 46 Maersk Oil: Short-term perspectives Denmark: Field development plan for Tyra SE: drilling activities ramping-up and construction progressing Qatar: Field development plan for FDP 2012: drilling activities ramping-up…
  47. Q3 2013 EARNINGS CALL – Maersk Oil – slide 47
    page 47 Maersk Oil: Long-term perspectives Denmark: Completion of service check on the 2003 North Sea agreement Provides stable and long-term framework for investments and production UK: Golden Eagle on track for production…
  48. Q3 2013 EARNINGS CALL – Maersk Oil – slide 48
    page 48 APM Terminals Commercial Operations selling delivering our services our services Portfolio management Implementation developing constructing our services our services
  49. Q3 2013 EARNINGS CALL – Maersk Oil – slide 49
    page 49 APM Terminals execution on strategy Strategic aspiration by 2016 Status September 2013 (communicated at CMD 2012) Best port operator in the world ROIC remains 12% despite high investment level 8% crane…
  50. Q3 2013 EARNINGS CALL – Maersk Oil – slide 50
    page 50 APM Terminals financials including pro-rata share of joint ventures and associates Q3 2013 Q3 2012 Share of Share of (USD million) Consolidated Total Consolidated Total JVs & ass. JVs & ass. Revenue 1,122 297 1,419…
  51. Q3 2013 EARNINGS CALL – Maersk Oil – slide 51
    page 51 Portfolio APM Terminals has seven new terminal projects: Santos, Brazil, late 2013 Maasvlakte II, end-2014 Izmir, Turkey, 2015 Lazaro Cardenas, Mexico, 2015 Ningbo, China, 2015 Moin, Costa Rica, end-2016 Vado, Italy…
  52. Q3 2013 EARNINGS CALL – Maersk Oil – slide 52
    page 52 Port projects underway - 2013 New terminal developments Existing terminal expansion Americas Region Americas Region Lzaro Crdenas, Mexico (TEC2) Buenos Aires, Argentina (Terminal 4) Moin, Costa Rica (Moin Container…
  53. Q3 2013 EARNINGS CALL – Maersk Oil – slide 53
    page 53 Maersk Drilling Founded Revenue in 2012 (USDm) 1972 1,683 3,600 638 employees EBITDA in 2012 (USDm) Rig fleet (existing and newbuilds) Net Operating Profit After Tax in 2012 (USDm) 16+7 347 Note: Figures stated…
  54. Q3 2013 EARNINGS CALL – Maersk Oil – slide 54
    page 54 Managing the newbuild programme Expected delivery schedule XL Enhanced I Keppel KeppelFELS FELS XL Enhanced II Keppel KeppelFELS FELS XL Enhanced III Keppel KeppelFELS FELS XL Enhanced IV Daewoo Daewoo…
  55. Q3 2013 EARNINGS CALL – Maersk Oil – slide 55
    page 55 Full utilisation of Maersk Drillings rigs in 2013 and continued strong operational uptime Contracted days (left) and coverage % (right) Operational uptime* 1,500 100% 100% 96% 98% 96% 96% 96% 1,200 94% 80% 94% 92%…
  56. Q3 2013 EARNINGS CALL – Maersk Oil – slide 56
    page page 5656 High forward contract coverage reflecting solid demand for high end assets Maersk Drilling forward contract coverage 100% 100% 80% 90% 60% 61% 40% 45% 20% 0% 2013 2014 2015 2016 Note: As per end…
  57. Q3 2013 EARNINGS CALL – Maersk Oil – slide 57
    page 57 Long term EBITDA margin set to improve EBITDA Margin (2009 Q3 2013) Improving long term EBITDA margin 60% Improving operational efficiency Investing in high margin assets 50% Focusing on attractive industry segments…
  58. Q3 2013 EARNINGS CALL – Maersk Oil – slide 58

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