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May 2017 Bond Investor Presentation – Maersk Oil

Maersk Oil · May 31, 2017 · 53 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. May 2017 Bond Investor Presentation – Maersk Oil – slide 1
    A.P. MLLER - MRSK A/S BOND INVESTOR PRESENTATION MAY 2017
  2. May 2017 Bond Investor Presentation – Maersk Oil – slide 2
    3 Agenda 1 History & Group overview 2 Strategy update 3 Market overview 4 Business segments 5 Financial review & Funding strategy
  3. May 2017 Bond Investor Presentation – Maersk Oil – slide 3
    4 The Maersk Group at a glance Diversified global conglomerate with activities in transportation and energy, focused on becoming an integrated transport and logistics company* Established 1904: 110+ years of financial…
  4. May 2017 Bond Investor Presentation – Maersk Oil – slide 4
    5 FY 2016 - a challenging year for Maersk Financial Highlights Cash flow USDm USDm 2015 2016 2015 2016 10,000 9,074 9,000 7,969 8,000 8,000 6,767 7,000 6,354 6,000 6,000 4,000 3,071 5,000 4,326 4,355 4,000 2,000 925 711 3,000…
  5. May 2017 Bond Investor Presentation – Maersk Oil – slide 5
    6 Financial highlights for Q1 2017 Financial highlights Cash flow USDm Q1 2016 Q1 2017 USDm Q1 2016 Q1 2017 3,500 8 2,500 8,539 8,963 1,863 2,000 3,000 8 1,500 1,253 2,500 7 1,000 877 2,000 1,706 500 250 1,597 1,500 0 -500…
  6. May 2017 Bond Investor Presentation – Maersk Oil – slide 6
    7 Key statements for Q1 2017 On track for full-year Container market Back to revenue growth guidance improving further Total revenue increased by 5%, Underlying profit of USD 201m Market fundamentals continued growing y/y for…
  7. May 2017 Bond Investor Presentation – Maersk Oil – slide 7
    8 Progress on 2017 priorities Transport & Hamburg Sd Energy Gross capex Logistics on track Progressing integration Due diligence finalised Continuing to progress Gross capital of the businesses in and SPA approved on defining…
  8. May 2017 Bond Investor Presentation – Maersk Oil – slide 8
    9 Guidance for 2017 Changes in guidance are versus guidance given in the Annual Report 2016. All SENSITIVITY GUIDANCE figures in parenthesis refer to full-year 2016. A.P. Moller - Maersks guidance for 2017 is subject to considerable…
  9. May 2017 Bond Investor Presentation – Maersk Oil – slide 9
    10 Agenda 1 History & Group overview 2 Strategy update 3 Market overview 4 Business segments 5 Financial review & Funding strategy
  10. May 2017 Bond Investor Presentation – Maersk Oil – slide 10
    11 Setting a new direction TRANSPORT & LOGISTICS ENERGY With effect from 1st January 2017 the five businesses were The businesses in Energy continue to be managed and operated as consolidated into Transport & Logistics and the…
  11. May 2017 Bond Investor Presentation – Maersk Oil – slide 11
    12 Transport & Logistics Leveraging existing strong positions throughout the value chain Supplier Transport & Logistics Unique starting point to create a truly integrated Transport & Logistics company
  12. May 2017 Bond Investor Presentation – Maersk Oil – slide 12
    13 Rating commitment Energy proceeds We are committed to remain investment grade rated Proceeds from separating out the oil and oil related companies will depend on credit metrics and outlook We will take the required measures to…
  13. May 2017 Bond Investor Presentation – Maersk Oil – slide 13
    14 Transport & Logistics Unlocking synergies & propelling forward Synergies from Integration Phasing of synergies 2pp Commercial Revenue synergies growth Overhead savings 2pp ROIC Operational Cost savings efficiencies and…
  14. May 2017 Bond Investor Presentation – Maersk Oil – slide 14
    15 Hamburg Sd is a rare opportunity A quality company with a willing seller Hamburg Sd at a glance Hamburg Sd is a great match for network and terminals German shipping company established in 1871 Owned by the Oetker Group Around…
  15. May 2017 Bond Investor Presentation – Maersk Oil – slide 15
    16 Agenda 1 History & Group overview 2 Strategy update 3 Market overview 4 Business segments 5 Financial review & Funding strategy
  16. May 2017 Bond Investor Presentation – Maersk Oil – slide 16
    17 Container shipping market Challenging market due to continued supply/demand imbalance Freight rates still at low levels but starting to increase as supply and demand is becoming more balanced Growth y/y, (%) Index CCFI 10% 8.7%…
  17. May 2017 Bond Investor Presentation – Maersk Oil – slide 17
    18 The liner industry is consolidating and the top 5 share is growing Consolidation wave is rolling again 8 top 20 players disappeared in last 2 years 96 98 00 02 04 06 08 10 12 14 16 18 Wave 1 Wave 2 Wave 3 27% 31% 36% 43%…
  18. May 2017 Bond Investor Presentation – Maersk Oil – slide 18
    19 Maersk Lines position Cost initiatives Network optimisation Core EBIT margin gap (%) Unit cost, (USD/FFE) TEU m No. 3,200 3.5 450 12% CAGR -7.6% 3.0 391 400 3,000 10% 9% 9%9% 9% 336 347 355 350 8% 8%8% 2,800 2.5 325 326 305 8%…
  19. May 2017 Bond Investor Presentation – Maersk Oil – slide 19
    20 Container terminal market Slow down in volumes growth due to challenging global economy Development in volumes Regional split of container volumes (2016F) 800 25% 2% 700 20% 4% 600 15% 6% Asia/Middle East 500 10% 7% Europe 400 5%…
  20. May 2017 Bond Investor Presentation – Maersk Oil – slide 20
    21 APM Terminals position Container throughput by geographical region Geographical split of terminals ( of terminals) (equity weighted crane lifts, %) 25 1 20 0 Americas Africa & 16% Middle 3 1 East 15 18% 24 10 19 Europe,…
  21. May 2017 Bond Investor Presentation – Maersk Oil – slide 21
    22 Oil market Supply shock pushed oil prices close to lowest levels in a decade Supply/demand imbalance led to increases in oil stocks mb/d mb/d mb 98 2.5 1,250 96 2.0 1,200 94 1.5 1,150 92 1.0 1,100 90 0.5 1,050 88 - 1,000…
  22. May 2017 Bond Investor Presentation – Maersk Oil – slide 22
    23 Maersk Oils responses and position Cost reductions (2014-2016) Other improvements (2014-2016) Disciplined capex spending Impact (%) Safety performance -36 OPEX 40% improvement 1-1.5bn Point improvement in -70 Exploration…
  23. May 2017 Bond Investor Presentation – Maersk Oil – slide 23
    24 Offshore drilling market Declining oil prices have led to reduced rig demand and downward pressure on dayrates Global rig utilisation decreasing as supply Continued bifurcation in utilisation for rigs Dayrates decline as a…
  24. May 2017 Bond Investor Presentation – Maersk Oil – slide 24
    25 Maersk Drillings position Strong forward coverage with backlog providing revenue visibility Contract coverage Revenue backlog, USDbn Revenue backlog by customer Exxon Other 100% 2.0 Shell 80% Conoco 2% Aker BP 1.5 4% 2% Total…
  25. May 2017 Bond Investor Presentation – Maersk Oil – slide 25
    26 Agenda 1 History & Group overview 2 Strategy update 3 Market overview 4 Business segments 5 Financial review & Funding strategy
  26. May 2017 Bond Investor Presentation – Maersk Oil – slide 26
    27 Maersk Line Gradual improvement in earnings from Q4 2016 Q1 Q1 FY Global nominal supply and demand growth (USD million) Change 2017 2016 2016 Growth y/y, (%) Revenue 5,493 4,974 10% 20,715 10% EBITDA 436 486 -10% 1,525 8% -80…
  27. May 2017 Bond Investor Presentation – Maersk Oil – slide 27
    28 APM Terminals challenging market conditions Q1 Q1 FY Volume growth and underlying ROIC development* (USD million) Change 2017 2016 2016 15% Revenue 1,008 962 4.8% 4,176 EBITDA 168 164 2.4% 764 10% Share of profit: - Associated…
  28. May 2017 Bond Investor Presentation – Maersk Oil – slide 28
    29 Damco forwarding margins under pressure Q1 Q1 FY Volumes indexed, 2015 Q1=100 (USD million) Change 2017 2016 2016 140 Revenue 612 596 2.7% 2,507 EBITDA 0 10 -100% 70 130 Underlying profit -8 2 N/A 31 Reported profit -8 2 N/A 31…
  29. May 2017 Bond Investor Presentation – Maersk Oil – slide 29
    30 Svitzer Maersk Container Industry Q1 Q1 FY Q1 Q1 FY (USD million) Change (USD million) Change 2017 2016 2016 2017 2016 2016 Revenue 157 163 -3.7% 642 Revenue 243 112 117% 564 EBITDA 44 47 -6.4% 166 EBITDA 27 -10 N/A -31 Underlying…
  30. May 2017 Bond Investor Presentation – Maersk Oil – slide 30
    31 Maersk Oil strong financial performance Q1 Q1 FY Maersk Oils entitlement share of production (USD million) Change 2017 2016 2016 000 boepd Q1 2016 Q1 2017 Revenue 1,375 1,032 33% 4,808 180 164 Exploration costs 20 57 -65% 223…
  31. May 2017 Bond Investor Presentation – Maersk Oil – slide 31
    32 Maersk Drilling focus on cost savings and operational performance Revenue backlog end-Q1 2017 Q1 Q1 FY (USD million) Change USDbn 2017 2016 2016 Revenue 344 654 -47% 2,297 1.2 1.1 1.0 EBITDA 171 407 -58% 1,390 1.0 Underlying…
  32. May 2017 Bond Investor Presentation – Maersk Oil – slide 32
    33 Maersk Supply Service Maersk Tankers Q1 Q1 FY Q1 Q1 FY (USD million) Change (USD million) Change 2017 2016 2016 2017 2016 2016 Revenue 48 110 -56% 386 Revenue 228 245 -6.9% 877 EBITDA -5 36 N/A 104 EBITDA 43 78 -45% 199 Underlying…
  33. May 2017 Bond Investor Presentation – Maersk Oil – slide 33
    34 Agenda 1 History & Group overview 2 Strategy update 3 Market overview 4 Business segments 5 Financial review & Funding strategy
  34. May 2017 Bond Investor Presentation – Maersk Oil – slide 34
    35 A strong financial framework Strong financial position Well capitalised USDbn Net debt increased USD 1.0bn in Q1 2017 to USD 11.7bn 20 125% USDbn +0.5 11.7 16 100% +1.6 -0.4 +0.5 10.7 -1.7 15.3 14.5 +0.1 +0.4 12 75% 12.4…
  35. May 2017 Bond Investor Presentation – Maersk Oil – slide 35
    36 Strong platform Historically stable operating cash flow* Introducing more disciplined CAPEX approach Generating a stable operating cash flow over time Yearly gross capex (USDbn) USDbn 10 12 9 8 5.5 6.5 8 7 6 5 4 8.7 4 7.2…
  36. May 2017 Bond Investor Presentation – Maersk Oil – slide 36
    37 Financial policy & funding strategy The Group aims at ensuring a strong capital structure and is committed to remain investment grade rated The Maersk Groups The Group targets the following key financial ratios in line with an…
  37. May 2017 Bond Investor Presentation – Maersk Oil – slide 37
    38 Conservative long term funding position end-Q1 2017 Loan maturity profile for the Group Public debt capital markets maturities USDbn USDbn 8.0 2.5 2.0 6.0 1.5 4.0 1.0 2.0 0.5 0.0 0.0 2017 2018 2019 2020 2021 2022…
  38. May 2017 Bond Investor Presentation – Maersk Oil – slide 38
    39 Operating lease obligations end-2016 Operating lease payments Adjusted net debt USDbn Maersk Line APM Terminals All other businesses USDbn 6,000 20 18 5,000 16 4,000 14 7.0 4.6 12 3,000 10 17.7 8 15.3 2,000 6 10.7 4…
  39. May 2017 Bond Investor Presentation – Maersk Oil – slide 39
    40 Ownership & Dividend Policy Summary The Foundation The Family Foundation The shares are listed on NASDAQ OMX Copenhagen and are A.P. Mller og Hustru Chastine Mc-Kinney Mllers Fond til almene Formaal, divided into two classes…
  40. May 2017 Bond Investor Presentation – Maersk Oil – slide 40
    41 Summary SUMMARY Diversified business portfolio across industries and geographies Business portfolio Focused on becoming an integrated transport and logistics company Competitive advantages due to large scale and industry…
  41. May 2017 Bond Investor Presentation – Maersk Oil – slide 41
    42 Appendix
  42. May 2017 Bond Investor Presentation – Maersk Oil – slide 42
    43 Transport & Logistics Focus on growth and synergies 1 Global container liner 4 Global terminal One of the leading 4PL The leading company in Maersk Container by TEU capacity (15.8% operator by equity providers in the logistics…
  43. May 2017 Bond Investor Presentation – Maersk Oil – slide 43
    44 Energy Entities to continue to operate separately Mid sized independent E&P Leading global operator of high One of the largest companies in The leading high-end company company with an entitlement technology drilling rigs, the…
  44. May 2017 Bond Investor Presentation – Maersk Oil – slide 44
    45 Maersk Line Capacity market share by trade 16% no.3 no.3 no.2 no.1 no.3 12% 14% Intra 22% Europe Pacific Atlantic Asia-Europe Pacific Trade y/y Asia-Europe +1pp 9% no.4 Intra Atlantic -1pp Intra 8% Asia no.2 Pacific +4pp…
  45. May 2017 Bond Investor Presentation – Maersk Oil – slide 45
    46 Maersk Line freight rates Q4 Q1 Q2 Q3 Q4 Q1 Average freight rate (USD/FFE) 2015 2016 2016 2016 2016 2017 East-West 1,953 1,713 1,642 1,825 1,929 2,112 North-South 2,188 2,117 1,939 1,942 1,914 2,027 Intra-regional 1,468 1,384…
  46. May 2017 Bond Investor Presentation – Maersk Oil – slide 46
    47 Maersk Oils Key Projects Sanctioned development projects Working Net Capex3 Plateau Production Project First Production Operator Partners Interest (USD Billion) (Entitlement, boepd) Flyndre1) Statoil Q1 2017 73.7% 0.5 7,000…
  47. May 2017 Bond Investor Presentation – Maersk Oil – slide 47
    48 Reserves and resources (million boe) End 2016 End 2015 End 2014 Proved reserves (1P) 339 408 327 Probable reserves (2Pincrement) 216 241 183 Proved and Probable reserves 555 649 510 (2P) Contingent resources (2C) 470 492 801…
  48. May 2017 Bond Investor Presentation – Maersk Oil – slide 48
    49 Performance drives returns Adjusted1 ROIC for FY 2016 (%) 11% 7% 5% 5% 4% 3% 2% 1% 0% 0% -2% -2% -2% -2% -2% -4% Maersk Oil -4% Majors -6% Independents 1. Defined as net income adjusted for non-recurring…
  49. May 2017 Bond Investor Presentation – Maersk Oil – slide 49
    50 Offshore Drilling Market Low levels of scrapping activity and a large orderbook of uncontracted rigs is increasing the supply of rigs Floater rigs, global market Jack-up rigs, global market Scrapping Newbuild deliveries Scrapping…
  50. May 2017 Bond Investor Presentation – Maersk Oil – slide 50
    51 Consolidated financial information Income statement (USD Q1 Q1 FY Change million) 2017 2016 2016 Revenue 8,963 8,539 5.0% 35,464 EBITDA 1,706 1,597 6.8% 6,767 Depreciation, etc. 1,112 1,162 -4.3% 7,265 Gain on sale of non-current…
  51. May 2017 Bond Investor Presentation – Maersk Oil – slide 51
    52 Transport & Logistics and Energy highlights Q1 2017 Net operating Cash flow used Revenue profit/loss after Underlying result Free cash flow for capital Invested capital tax (NOPAT) expenditure Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1…
  52. May 2017 Bond Investor Presentation – Maersk Oil – slide 52
    53 The Management Board Acts as the daily management of the Group Sren Skou Group CEO CEO of Transport & Logistics Years with Maersk: 34 Claus V. Hemmingsen Jakob Stausholm Group Vice CEO Group CFO CEO of Energy Years…
  53. May 2017 Bond Investor Presentation – Maersk Oil – slide 53
    54 Notes Cost Initiatives chart, slide 19 Note: Unit cost excluding gain/loss, restructuring, share of profit/loss from associated companies and including VSA income. Source: Maersk Line Core EBIT margin gap to peers, (% pts.)…

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