Annual Report • Feb 27, 2014
Annual Report
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A.P. Møller - Mærsk A/S
Majestic Mærsk Langelinie, Copenhagen visited Copenhagen 23-29 September 2013 and appreciated the visit of around 225,000 guests.
The A.P. Moller - Maersk Group is a conglomerate of worldwide businesses with core focus on shipping and oil & gas. The Group employs approximately 89,000 people, operates in 135 countries and is headquartered in Copenhagen, Denmark.
1. Maersk Line is the Group's largest business unit in terms of revenue and the world's leading container shipping company. Maersk Line is a customer-focused leader in reliable and eco-efficient global transport.
2. Maersk Oil is an international oil and gas company with roots in the North Sea going 50 years back in time, now with operations worldwide. Maersk Oil is active in the oil and gas value chain from exploration to production both onshore and offshore.
3. APM Terminals has its core expertise in the development, construction and operation of port and cargo inland services with a Global Terminal Network including 65 operating port facilities in 40 countries and Inland Services operations in over 160 locations in 47 countries.
4. Maersk Drilling is a leading global operator of high-technology drilling rigs. Maersk Drilling provides offshore drilling services to oil and gas companies with one of the world's youngest and most advanced fleets.
SERVICES & OTHER SHIPPING
5. Services & Other Shipping consists of Maersk Supply Service, Maersk Tankers, Damco and Svitzer.
We are the world's largest container shipping company and together with our container terminals and logistics businesses we handle a large share of the world's containerised trade.
Maersk Supply Service A fleet of 98 vessels providing worldwide services to the offshore and associated industries.
Is a global market leader within towage, salvage and emergency response with a fleet of 376 vessels.
platforms and three FPSOs. The total entitlement production is 235,000 barrels of oil equivalent per day.
Maersk Tankers owns and operates a fleet of 130 tankers. Maersk Tankers' product tanker fleet is one of the largest in the world.
We support global energy needs through the exploration, extraction and transportation of oil and gas.
3 APM Terminals operates a global terminal network in 68 countries.
Damco is one of the world's leading providers of freight forwarding and supply chain management services. Damco operates in more than 93 countries worldwide.
Maersk Container Industry Is a manufacturer of dry containers, reefer containers and refrigeration systems.
| Contents | Page | Page |
|---|---|---|
| ---------- | ------ | ------ |
| ٦ × ٧ M. × ۰, |
|---|
| ------------------------------ |
| DIRECTORS' REPORT | |
|---|---|
| Financial highlights | 4 |
| Group highlights | 6 |
| Outlook for 2014 | 11 |
| Message from the Group CEO | 12 |
| The Group strategy | 14 |
| Execution on Group strategy 2013 | 16 |
| Businesses | |
|---|---|
| Invested capital and ROIC | 22 |
| Segment overview | 25 |
| Maersk Line | 26 |
| Maersk Oil | 32 |
| APM Terminals | 38 |
| Maersk Drilling | 44 |
| Maersk Supply Service | 50 |
| Maersk Tankers | 52 |
| Damco | 54 |
| Svitzer | 56 |
| Other businesses | 58 |
| Discontinued operations | 58 |
| Financial report | 59 |
| Risk management | 62 |
| Shareholders | 66 |
| Corporate governance | 69 |
| CONSOLIDATED FINANCIAL STATEMENTS 2013 | |
|---|---|
| Consolidated income statement | 72 |
| Consolidated statement of comprehensive income | 73 |
| Consolidated balance sheet at 31 December | 74 |
Consolidated cash flow statement 76 Consolidated statement of changes in equity 77 Notes to the consolidated financial statements 79
| Statement of the Board of Directors and Management | 142 |
|---|---|
| Independent auditors' report | 143 |
| Board of Directors and Executive Board | 145 |
| Company overview | 150 |
| Definitions | 153 |
| Company announcements | 154 |
| Financial statements 2013 | 155 |
|---|---|
| Financial highlights | 157 |
| Income statement | 158 |
| Comprehensive income | 159 |
| Balance sheet at 31 December | 160 |
| Cash flow statement | 162 |
| Statement of changes in equity | 163 |
| Notes to the financial statements | 166 |
The presentation of joint ventures has been changed from 1 January 2013 according to IFRS 11 Joint Arrangements. The previous segment Maersk FPSOs and Maersk LNG as well as Discontinued operations are, apart from Dansk Supermarked Group, included in Other businesses. Comparative figures have been restated. The changes are described in note 27. Unless otherwise stated, all figures in parenthesis refer to the corresponding figures for the prior year.
The annual report 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 expectations contained in the annual report.
The annual report has been translated from Danish. The Danish text shall govern for all purposes and prevail in case of any discrepancy with the English version.
| 2013 | 2012 | 2011 | 2010 | 2009 | ||
|---|---|---|---|---|---|---|
| Revenue | 266,236 | 286,753 | 267,299 | 256,180 | 203,115 | |
| Profit before depreciation, amortisation and | ||||||
| impairment losses, etc. (EBITDA) | 63,893 | 68,352 | 75,524 | 85,475 | 45,745 | |
| Depreciation, amortisation and impairment losses | 26,007 | 29,346 | 28,336 | 33,007 | 29,652 | |
| Gain on sale of non-current assets, etc., net | 814 | 3,532 | 1,125 | 3,770 | 985 | |
| Share of profit/loss in joint ventures | 854 | 754 | - | - | - | |
| Share of profit/loss in associated companies | 1,660 | 1,286 | 651 | 461 | 360 | |
| Profit before financial items (EBIT) | 41,214 | 44,578 | 48,964 | 56,699 | 17,438 | |
| Financial items, net | -4,021 | -4,515 | -4,614 | -5,772 | -5,859 | |
| Profit before tax | 37,193 | 40,063 | 44,350 | 50,927 | 11,579 | |
| Tax | 18,186 | 18,315 | 31,764 | 25,406 | 19,578 | |
| Profit/loss for the year – continuing operations | 19,007 | 21,748 | 12,586 | 25,521 | -7,999 | |
| Profit/loss for the year – discontinued operations | 2,216 | 1,649 | 5,497 | 2,694 | 2,510 | |
| Profit/loss for the year | 21,223 | 23,397 | 18,083 | 28,215 | -5,489 | |
| A.P. Møller - Mærsk A/S' share | 19,382 | 21,673 | 15,189 | 26,455 | -7,027 | |
| Total assets | 403,296 | 409,698 | 404,743 | 374,723 | 345,199 | |
| Total equity | 230,108 | 222,539 | 207,935 | 192,962 | 158,868 | |
| Cash flow from operating activities | 50,056 | 40,796 | 35,690 | 53,895 | 20,713 | |
| Cash flow used for capital expenditure | -27,425 | -33,730 | -55,071 | -23,430 | -38,934 | |
| Investments in property, plant and equipment and intangible assets | 39,815 | 45,344 | 58,376 | 31,636 | 49,586 | |
| Return on invested capital after tax (ROIC) | 8.1% | 9.0% | 7.8% | 12.7% | -0.2% | |
| Return on equity after tax | 9.4% | 10.9% | 9.0% | 16.0% | -3.5% | |
| Equity ratio | 57.1% | 54.3% | 51.4% | 51.5% | 46.0% | |
| Earnings per share (EPS), DKK | 4,438 | 4,964 | 3,479 | 6,061 | -1,674 | |
| Diluted earnings per share, DKK | 4,437 | 4,962 | 3,478 | 6,058 | -1,674 | |
| Cash flow from operating activities per share, DKK | 11,461 | 9,343 | 8,175 | 12,347 | 4,936 | |
| Dividend per share, DKK | 1,400 | 1,200 | 1,000 | 1,000 | 325 | |
| Share price (B share), end of year, DKK | 58,850 | 42,600 | 37,920 | 50,510 | 36,600 | |
| Total market capitalisation, end of year | 250,636 | 180,388 | 160,982 | 217,464 | 156,901 |
Discontinued operations comprise Dansk Supermarked Group. The 5-year income statements and cash flow figures have been restated accordingly.
| 2013 | 2012 | 2011 | 2010 | 2009 | |
|---|---|---|---|---|---|
| Revenue | 47,386 | 49,491 | 49,917 | 45,559 | 37,902 |
| Profit before depreciation, amortisation and | |||||
| impairment losses, etc. (EBITDA) | 11,372 | 11,797 | 14,104 | 15,201 | 8,537 |
| Depreciation, amortisation and impairment losses | 4,628 | 5,065 | 5,292 | 5,870 | 5,534 |
| Gain on sale of non-current assets, etc., net | 145 | 610 | 210 | 670 | 184 |
| Share of profit/loss in joint ventures | 152 | 130 | - | - | - |
| Share of profit/loss in associated companies | 295 | 222 | 122 | 82 | 67 |
| Profit before financial items (EBIT) | 7,336 | 7,694 | 9,144 | 10,083 | 3,254 |
| Financial items, net | -716 | -780 | -862 | -1,026 | -1,094 |
| Profit before tax | 6,620 | 6,914 | 8,282 | 9,057 | 2,160 |
| Tax | 3,237 | 3,161 | 5,932 | 4,518 | 3,652 |
| Profit/loss for the year – continuing operations | 3,383 | 3,753 | 2,350 | 4,539 | -1,492 |
| Profit/loss for the year – discontinued operations | 394 | 285 | 1,027 | 479 | 468 |
| Profit/loss for the year | 3,777 | 4,038 | 3,377 | 5,018 | -1,024 |
| A.P. Møller - Mærsk A/S' share | 3,450 | 3,740 | 2,836 | 4,705 | -1,311 |
| Total assets | 74,509 | 72,396 | 70,444 | 66,756 | 66,511 |
| Total equity | 42,513 | 39,324 | 36,190 | 34,376 | 30,610 |
| Cash flow from operating activities | 8,909 | 7,041 | 6,665 | 9,585 | 3,865 |
| Cash flow used for capital expenditure | -4,881 | -5,822 | -10,285 | -4,167 | -7,266 |
| Investments in property, plant and equipment and intangible assets | 7,087 | 7,826 | 10,901 | 5,626 | 9,252 |
| Return on invested capital after tax (ROIC) | 8.2% | 8.9% | 8.3% | 12.2% | -0.2% |
| Return on equity after tax | 9.2% | 10.7% | 9.6% | 15.4% | -3.4% |
| Equity ratio | 57.1% | 54.3% | 51.4% | 51.5% | 46.0% |
| Earnings per share (EPS), USD | 790 | 857 | 650 | 1,078 | -312 |
| Diluted earnings per share, USD | 790 | 856 | 649 | 1,077 | -312 |
| Cash flow from operating activities per share, USD | 2,040 | 1,613 | 1,527 | 2,196 | 921 |
| Dividend per share, USD | 259 | 212 | 174 | 178 | 63 |
| Share price (B share), end of year, USD | 10,873 | 7,528 | 6,600 | 8,998 | 7,052 |
| Total market capitalisation, end of year | 46,305 | 31,876 | 28,018 | 38,741 | 30,231 |
| Average USD/DKK exchange rate | 5.62 | 5.79 | 5.35 | 5.62 | 5.36 |
| End of year USD/DKK exchange rate | 5.41 | 5.66 | 5.75 | 5.61 | 5.19 |
| Maersk Line | |||||
| Transported volumes (FFE in million) | 8.8 | 8.5 | 8.1 | 7.3 | 6.9 |
| Average rate (USD per FFE) | 2,674 | 2,881 | 2,828 | 3,064 | 2,370 |
| Average fuel price (USD per tonne) | 595 | 661 | 620 | 458 | 342 |
| Maersk Oil | |||||
| Average share of oil and gas production1 | 235 | 257 | 333 | 377 | 428 |
| Average crude oil price (Brent) (USD per barrel) | 109 | 112 | 111 | 80 | 62 |
| APM Terminals | |||||
| Containers handled2 | 36.3 | 35.4 | 33.5 | 31.5 | 30.9 |
| Maersk Drilling | |||||
| Operational uptime | 97% | 92% | 96% | 96% | 94% |
| 1Thousand barrels of oil equivalent per day | |||||
| 2Measured in million TEU and weighted with ownership share | |||||
The Group delivered a profit of USD 3.8bn (USD 4.0bn), which was slightly higher than the latest announced outlook of around USD 3.5bn in the Q3 interim report. The return on invested capital (ROIC) was 8.2% (8.9%).
Profit for 2013 was positively affected by improved volumes and unit cost reductions in Maersk Line, higher volume in APM Terminals and higher operational uptime in Maersk Drilling. Profit was negatively affected by lower freight rates in Maersk Line, a decline in Maersk Oil's share of production, a decline in the average oil price as well as impairment losses primarily relating to Maersk Tankers and non-recurring business transformation costs in Damco. Divestment gains were USD 145m (USD 610m) including sale of 24 vessels in Maersk Tankers and sale of shares in companies in APM Terminals. Excluding impairment losses and divestment gains the result was USD 4.0bn (USD 2.9bn).
The result for 2013 was USD 261m lower than in 2012 where profit was positively impacted by a one-off income of USD 899m from Maersk Oil's settlement of an Algerian tax dispute.
Revenue decreased by 4% to USD 47.4bn (USD 49.5bn), primarily as a consequence of lower container freight rates and lower share of oil production which were partly offset by higher container volumes.
Cash flow from operating activities was USD 8.9bn (USD 7.0bn) while cash flow used for capital expenditure was USD 4.9bn (USD 5.8bn) after netting sales proceeds amounting to USD 1.4bn (USD 3.2bn). The Group's free cash flow was positive USD 4.0bn (USD 1.2bn).
Net interest bearing debt decreased by USD 2.9bn to USD 11.6bn (USD 14.5bn). Total equity was USD 42.5bn (USD 39.3bn); positively affected by the profit for the year of USD 3.8bn. Dividend paid was USD 1.1bn (USD 945m).
With an equity ratio of 57.1% (54.3%) and a liquidity buffer of USD 14.8bn (USD 13.1bn), the Group is well prepared and determined to execute on its long-term growth aspirations and seize market opportunities within its core businesses.
Maersk Line made a profit of USD 1.5bn (USD 461m) and a ROIC of 7.4% (2.3%). The improvement was achieved through vessel network efficiencies resulting in lower unit costs also supported by lower bunker price. Average freight rates decreased by 7.2% to 2,674 USD/FFE (2,881 USD/FFE) and volumes increased by 4.1% to 8.8m FFE (8.5m FFE). Bunker consumption was reduced by 12.1%.
Maersk Line maintained a market share in line with last year.
The fleet capacity increased by 0.2% to 2.6m TEU (2.6m TEU), mainly by delivery of four Triple-E container vessels in 2013. An additional 16 Triple-E vessels with capacity of 288,000 TEU are scheduled for delivery during 2014-2015.
Cash flow from operating activities was USD 3.7bn (USD 1.8bn) and cash flow used for capital expenditure was USD 1.6bn (USD 3.6bn).
Maersk Oil made a profit of USD 1.0bn (USD 2.4bn) negatively affected by lower average entitlement production of 235,000 boepd (257,000 boepd) and lower average oil prices of USD 109 per barrel (USD 112 per barrel). The 2012 result included one-off income of USD 1.0bn from the Algerian tax dispute and divestment gains. ROIC was 16.2% (35.7%).
A focus in 2013 was to mature the portfolio of major developments, including submission of development plan for Chissonga in Angola also covering the Cubal discovery made during the year. The reinstatement of the Gryphon FPSO, UK and the continued ramp up of El Merk, Algeria returned Maersk Oil's entitlement production to growth from late 2013.
Exploration costs continued at a high level of USD 1.1bn (USD 1.1bn) with the completion of 25 exploration and appraisal wells. The wells included two successful Cubal wells in Angola and six successful appraisal wells at Johan Sverdrup in Norway.
Cash flow from operating activities was USD 3.2bn (USD 3.9bn) and cash flow used for capital expenditure was USD 1.8bn (USD 2.0bn), less than indicated as an expected acquisition did not materialise.
APM Terminals made a profit of USD 770m (USD 701m) impacted by pre-tax divestment gains of USD 70m (USD 117m) and a tax expense of USD 56m (USD 163m). ROIC was 13.5% (15.2%).
Number of containers handled increased by 3% to 36.3m TEU (35.4m TEU) boosted by additions to the portfolio. Earnings were positively affected by the full year profit contribution of the co-controlling share of Global Ports Investments PLC, Russia acquired in November 2012. Further, the jointly owned Brasil Terminal Portuario in Santos, Brazil commenced operations.
The continued high investment level includes the development of the new terminal Maasvlakte II, The Netherlands. New terminal projects were secured in Izmir, Turkey, and Abidjan, Ivory Coast.
Cash flow from operating activities was USD 923m (USD 910m) and cash flow used for capital expenditure was USD 841m (USD 1.3bn).
Maersk Drilling made a profit of USD 528m (USD 347m), a historically high result driven by full utilisation of all rigs and impacted positively by higher operational uptime and higher day rates. ROIC was 10.8% (8.8%).
During 2013 Maersk Drilling entered into several new major contracts and has now secured contracts for six out of eight newbuildings to be delivered in 2014-2016. The revenue backlog increased to USD 7.9bn (USD 7.0bn), and the one-year forward coverage by the end of 2013 was 94% (98%). Operational uptime averaged 97% (92%).
Cash flow from operating activities was USD 775m (USD 597m) and cash flow used for capital expenditure was USD 1.5bn (USD 555m).
Maersk Supply Service made a profit of USD 235m (USD 132m) and a ROIC of 10.9% (6.1%) positively affected by higher utilisation and improved operational margins.
Contract coverage for 2014 is 56% and 32% for 2015 excluding options.
Maersk Tankers made a loss of USD 317m (loss of USD 315m) and a negative ROIC of 10.4% (negative 8.2%). The result was negatively affected by impairment losses and provisions for onerous contracts of USD 297m (USD 238m) as well as restructuring costs of USD 36m (USD 2m). Excluding one-off items, the result was positive USD 8m (loss USD 80m).
Maersk Tankers divested seven product carriers, one VLCC and 16 LPG carriers during 2013. Additionally 11 time-chartered vessels were redelivered to the owners. Maersk Tankers reached agreement in January 2014 to sell the fleet of 15 VLCCs for delivery in 2014.
Damco made a loss of USD 111m (profit USD 55m) and ROIC was negative 22.0% (positive 13.1%). The result was primarily impacted by significant business transformation costs and provisions.
Svitzer made a profit of USD 156m (USD 7m) positively impacted by sales gains, partly offset by restructuring costs. The result further included impairment losses of USD 6m (USD 109m). ROIC was 10.8% (0.5%).
Dansk Supermarked Group (DSG) made a profit of DKK 1.8bn (DKK 1.3bn) generated through profitability improvements across the Dansk Supermarked Group and strong sales growth in the Netto businesses.
An agreement was signed to sell a majority share of DSG which is classified as discontinued operations on 7 January 2014.
The Maersk B-share price increased by 38.1% to DKK 58,850 during 2013. The dividend pay-out proposed by the Board of Directors is DKK 1,400 per share of DKK 1,000, representing a dividend yield of 2.4% based on the B-share closing price as of 30 December 2013.
The Board proposes to issue four new bonus shares per one A.P. Møller - Mærsk A/S share in its respective share class. This will increase the registered share capital from DKK 4,395.6m to DKK 21,978.0m. The capital increase will be done by transfer from retained earnings.
Quarterly figures for the Group for 2010-2013 are available onhttp://investor.maersk.com/financials.cfm
An independently assured Sustainability Report for 2013 is published and provides detailed information on the Group's sustainability performance and new sustainability strategy. The report serves as the Group's Communication on Progress as required by the UN Global Compact, and ensures compliance with the requirements of the Danish Financial Statements Act on corporate social responsibility and reporting on the gender composition of management. The report is available on: www.maersk.com/Sustainability/Documents/Maersk\_ Sustainability\_Report\_2013.pdf
From left to right: Erik Rasmussen, Arne Karlsson, Sir John Bond, Jan Leschly, vice chairman Ane Mærsk Mc-Kinney Uggla, chairman Michael Pram Rasmussen, vice chairman Niels Jacobsen, Lars Pallesen, Leise Mærsk Mc-Kinney Møller, Robert Routs, Jan Tøpholm, John Axel Poulsen.
Maersk Line Mærsk Mc-Kinney Møller Aarhus, Denmark
The world's largest container ship, the 18,000 TEU Mærsk Mc-Kinney Møller, called on a number of container terminals in the APM Terminals' global terminal network during her maiden voyage, leading to individual productivity records in Rotterdam, The Netherlands; Aarhus, Denmark; Gothenburg, Sweden and Tangier, Morocco.
The Group expects a result significantly above the 2013 result (USD 3.8bn) impacted by the sale of Dansk Supermarked Group. The underlying result is expected to be in line with the result for 2013 (for continuing business USD 3.6bn) when excluding impairment losses and divestment gains.
Gross cash flow used for capital expenditure is expected to be around USD 10bn (USD 6.3bn), while cash flow from operating activities is expected to develop in line with the result.
Maersk Line expects a result in line with 2013 (USD 1.5bn). Maersk Line aims to improve its competitiveness although unit cost reductions will be less than in 2013. Global demand for seaborne container transportation is expected to increase by 4-5% and Maersk Line aims to grow with the market. Excess capacity is likely to depress freight rates.
Maersk Oil expects a result below 2013 (USD 1.0bn) based on an oil price of USD 104 per barrel.
Maersk Oil's entitlement production is expected to be above 240,000 boepd. Production will be higher in Q1 and Q4, whereas planned shut downs will result in lower production in Q2 and Q3. The entitlement production increase from 235,000 boepd in 2013 is mainly based on higher contributions from Algeria and UK.
Exploration costs are expected to be around USD 1.0bn.
APM Terminals expects a result above 2013 (USD 770m) and to grow more than the market supported by increased contribution from joint ventures and associates combined with productivity improvements in existing facilities.
Maersk Drilling expects a result below 2013 (USD 528m) due to planned yard stays in 2014 and high costs associated with training and start-up of operation of six new rigs.
Services & Other Shipping expect a result above 2013.
The Group's outlook for 2014 is subject to considerable uncertainty, not least due to developments in the global economy.
The Group's expected result depends on a number of factors. Based on the expected earnings level and all other things being equal, the sensitivities for four key value drivers are listed in the table below:
| Factors | Change | Effect on the Group's profit |
|---|---|---|
| Oil price for Maersk Oil | +/-10 USD/barrel | +/-USD 0.2bn |
| Bunker price | +/-100 USD/tonne | -/+USD 0.2bn |
| Container freight rate | +/-100 USD/FFE | +/-USD 0.9bn |
| Container freight volume | +/-100,000 FFE | +/-USD 0.2bn |
Despite difficult market conditions in our global shipping markets, 2013 was a good year for the Group.
We increased our underlying earnings from USD 2.9bn in 2012 to USD 4.0bn, with most of our businesses improving their results thanks to a strong focus on operational effectiveness, market opportunities and customer relations.
We improved our balance sheet and strengthened the competiveness of our operations, with six of our eight core businesses now top quartile performers in their industries.
These achievements are down to the quality and hard work of our people. I would like to thank our management teams and employees in all our businesses across the world for their dedicated efforts, and the significant progress and good results achieved.
Our earnings increase in 2013 was driven mainly by continued progress in Maersk Line, which strengthened its leadership in the container shipping industry in terms of profitability, stable market share and environmental performance; through enhanced customer service, cost management and optimisation of its network.
Our increased competitiveness means we are well-placed to tackle the challenges of a volatile shipping industry going forward. Our planned initiation of the P3 operational alliance in the East-West trades will be a further step to lower costs.
As expected, Maersk Oil's underlying result was below last year due to a decline in production and lower oil prices. However, production stabilised as planned during the year and we expect some growth in 2014.
We saw increased earnings in APM Terminals and Maersk Drilling, which are on track with their strategic plans. Our remaining businesses also performed well with the exception of Damco where we are reorganising the global organisation and introducing new systems.
Over USD 7bn was invested in 2013 to strengthen the Group for the future, with the majority of investment allocated to our four large core business units in line with our strategy. We continued – where appropriate – to favour investment in growth markets.
In Latin America, APM Terminals opened Santos, Brazil's largest container terminal; and greenfield and expansion projects are underway in Mexico, Costa Rica and Peru.
The Group made an important investment in Russia in 2013 with our acquisition of National Container Company through our stake in Global Ports, making Global Ports the largest container terminal operator in Eastern Europe.
In addition to port expansions, Maersk Drilling, Maersk Supply Service and Svitzer increased their efforts in West Africa; and Maersk Oil continues to explore and move towards production in Angola.
Going forward, we see opportunities for growth in several of our smaller, but in some cases world-leading businesses; and to that end have introduced a fifth core business unit to the Group – Services & Other Shipping – with a profit target of USD 500m by 2016.
At all times, and in all locations, maintaining a stringent focus on the safety of our people is paramount to us. In 2013, four people lost their lives in our operations – in Vietnam, Peru and Malaysia in APM Terminals and offshore Cameroon at a Maersk Drilling rig.
The tragic loss of human life while at work is totally unacceptable to us and stands in sharp contrast with our values. Our focus is on creating a working environment where safety is deeply rooted into behaviour, performance and company culture, and we continue to strive for a fatality-free operation.
An important element in improving returns and freeing funds for future profitable growth was commitment to our 2013 Group priority – Project FIT. During the year, USD 4.7bn was realised through sales of assets, reduction of leasing obligations and working capital improvements, enabling us to invest in six new product tankers and a drilling rig on top of our planned 2013 capital investments.
The sale of our majority stake in Dansk Supermarked Group at the start of 2014 was a further important development in our divestment of non-core assets.
In 2014 we continue our strong focus on servicing customers and partners, and building competitiveness in all our businesses, in addition to delivering satisfactory financial results.
Preparing for future growth will put demands on the organisation as the Group's core business units undergo significant expansion, with a large number of projects underway.
Maersk Drilling takes delivery of six new large drilling rigs, entailing major investment in hiring, training and start-up activities.
Maersk Line introduces nine Triple-E ships to its fleet, APM Terminals will launch the Maasvlakte II terminal in The Netherlands, and Maersk Oil starts production in two new fields in the UK and US.
Delivering on earnings and commitments will be our first Group priority in 2014.
Under our second priority Stay FIT, we will continue to focus on improving the balance sheet to enable future growth and make optimal use of shareholder funds.
Our third Group priority: Develop innovative customer solutions is also about preparing for the future. We will ensure that we stay alert and in close contact with our customers and partners and make use of opportunities to create win-win propositions which build on our skills, market and technical knowledge.
In a world of rapidly evolving economic and market conditions, as a Group we remain strongly focused on our company values which have governed the way we do business for over a century, and will continue to guide our future development in a sustainable way. Our commitment to "constant care" and "our employees" reminds us every day of the importance of ensuring the safety of all our employees.
Our efforts in 2013 have helped build the foundations for solid and profitable expansion in the years ahead. We have a professional organisation, good market positions and a strong balance sheet, and for the Group the journey ahead will be exciting.
Nils S. Andersen
The Group has executed on the strategy to grow world class businesses while delivering good overall returns on our invested capital. Our portfolio continues to become more focused by divestments of some non-core assets and businesses together with growing all of the core businesses and improving capital efficiency thoughout the Group.
Disciplined capital expenditure and divestments have resulted in a position as a well-capitalised company.
The Group has diversified its funding sources and the credit rating received in September 2013 has further enhanced our financial flexibility.
We want to maintain a strong investment grade credit over the cycle and steadily increase nominal dividends supported by underlying earnings growth. The Group will evaluate its capital structure in periods with excess capital.
We will continue to build a premium conglomerate through active portfolio and performance management, disciplined capital allocation and a clear financial strategy.
We use our global network, skilled people and financial flexibility to enable customers and countries to create wealth and fulfil their economic potential.
The existing strong position in growth markets will remain a focus area going forward as the Group is in a good position to assist and capitalise on the growth.
The Group's financial ambition is to develop its core business units and achieve above 10% ROIC over the cycle.
As a group, our business success is built on a number of strengths: our size and global reach, our financial flexibility, our talented employees, our time-honoured values, our commitment to safety and sustainability and our drive to innovate. Combined, these strengths form a unique platform for our continued profitable growth.
We are proud of our heritage and our corporate values are of the highest importance to us. Our values are closely linked to our founding family, and have helped us earn and keep the trust and goodwill of customers, business partners and employees across the globe.
Our values guide the way our employees behave, make decisions and interact with others – whether they work in Denmark or globally. Our values unite our global workforce, ensuring a commitment and continuity of service and customer experience of a high calibre.
| Constant Care | Take care of today, actively prepare |
|---|---|
| for tomorrow. | |
| Humbleness | Listen, learn, share, and give space |
| to others. | |
| Uprightness | Our word is our bond. |
| Our Employees The right environment for the right | |
| people. | |
| Our Name | The sum of our values: passionately |
| striving higher. |
The Group's annual strategy review and the allocation of capital is a fully integrated process. Strategies including detailed plans and opportunities for the coming years are developed with each business unit. The total capital requirements across businesses are prioritised with a view to optimise the portfolio of the Group and in line with financial policies. Evaluation parameters include industry attractiveness, financial return forecasts, business performance and overall strategic aspirations. The resulting plan provides the framework for each business unit. Portfolio adjustments are integrated into the plan.
The integrated Group strategy review, portfolio actions and capital prioritisation process starts at the beginning of the year. The Board of Directors have their annual strategy conference at which the Board discusses proposals put forward by the Executive Board and decides on the strategy.
The updated Group strategy approved by the Board of Directors is then communicated in the Group's interim report for the second quarter and can be downloaded from http://investor.maersk.com/financials.cfm
The Group is focused on performance management, both towards the specific long-term goals established for each business unit, as well as on the current operational performance across a range of key performance indicators. Financial targets are set both in absolute terms as well as relative to the industry. Specifically for return on assets, all business units have as a target to be top quartile performers in their industry, which most achieved during 2013.
The Group has an ambition to grow its invested capital by around 30% from USD 53bn in Q2 2012 towards USD 65-70bn by 2017 adjusted for the divestment in 2014 of the Dansk Supermarked Group, mainly by execution of the investment pipeline.
Today, 76% of the Group's invested capital is allocated to Maersk Line, Maersk Oil, APM Terminals and Maersk Drilling, ahead of the 2017 target at 75%.
In line with the direction of investments towards more profitable and less volatile business areas, Maersk Line's share of the Group's invested capital is likely to see a decline from 40% today towards a 25-30% range, while the combined share of invested capital in Maersk Oil, APM Terminals and Maersk Drilling will see an increase from 36% towards a 45-50% range over the coming 4-5 years.
APM Terminals and Maersk Drilling have seen the largest relative increase in their invested capital since Q2 2012, driven by acquisitions and investments in terminals and rigs. Maersk Oil has spent more than USD 1bn per year on exploration, however this investment in finding and developing future sources of production is not capitalised. Maersk Tankers has made divestments significantly decreasing their invested capital.
The portfolio optimisation will continue over the next years to enhance the strategic focus of the Group to the eight core businesses. In order to secure the most optimal business portfolio, the Group is assessing the composition of its assets. In connection with this optimisation, the Group participates in acquisitions and divestments of companies and individual assets considering both strategic and opportunistic possibilities. The Group's focus will remain on developing its strong position in
growth markets, and exit businesses that do not support the future strategy and where the Group does not see a reasonable outlook for acceptable returns.
No acquisitions of companies or activities with significant impact to the Group were undertaken in 2013. The focus has primarily been execution of the organic growth plans for the five main strategy pillars.
| Strategic priority | Target /policy | Progress in 2013 |
|---|---|---|
| Performance management |
• Develop world class businesses that achieve above 10% ROIC over the cycle • Top quartile performers in their industry |
• Five out of eight core businesses achieved a ROIC above 10% • Maersk Line now top performer in industry • Six out of eight core businesses top quartile performers in their industries |
| Capital allocation and growth |
Portfolio strategy towards 2017 (base Q2 2012): • 75% of the Group's invested capital to be invested in Maersk Line, Maersk Oil, APM Terminals and Maersk Drilling • Total invested capital to grow by around 30% |
• 76% of the Group's invested capital invested in Maersk Line, Maersk Oil, APM Terminals and Maersk Drilling (71% in Q2 2012) • Invested capital grew by 3.7% since Q2 2012 • 78% of all outstanding capital commitments dedicated to growth in Maersk Oil, APM Terminals and Maersk Drilling |
| Portfolio management | • Actively manage the portfolio of businesses to ensure focus on the most profitable and least volatile business areas • Building a balanced portfolio across several legs • Focused capital allocation |
• Divestments of USD 1.4bn in released cash flow, primarily: – Divestment of 31.3% stake in DFDS A/S – Exit of Handy Gas and Very Large Gas Carriers • Established Services & Other Shipping as a core unit, targeting self-funded growth to USD 500m NOPAT |
| Funding | • Secure long term commitments • Obtain funding from diversified sources • Adequate liquidity reserve at all times |
• Group raised almost USD 3bn in new financing in 2013 • Received credit rating of BBB+/Baa1, (stable) from S&P/Moody's • Increased liquidity reserve by USD 1.7bn to USD 14.8bn |
| Delivering increasing value and dividends to shareholders |
• The Group's objective is to increase the nominal dividend per share over time; supported by underlying earnings growth |
• Dividend per share to be paid out for 2013 is an increase of 17% over 2012, supported by underlying earnings growth of 35% • 38% increase in share price in 2013 |
As part of the Group's priority to optimise the balance sheet for future growth a number of assets and activities have been divested during 2013. The released cash flow totalled USD 1.4bn and was primarily related to:
Further, the net present value of lease commitments related to vessels on time charter was reduced by USD 1.6bn.
Cash flow from divestments, including discontinued operations, has been USD 7.9bn since 2009 resulting in pre-tax divestment gains of USD 2.5bn.
The Group has in the beginning of 2014 entered into an agreement to divest its 68% stake in Dansk Supermarked Group (DSG). The transaction encompasses two steps: 1) A.P. Moller - Maersk divests 49% in 2014 and retains ownership of 19% in DSG and 2) in 2019 the buyer has a call option and A.P. Moller - Maersk has a put option on the remaining 19% share in DSG currently valued at DKK 5bn. The value of the 49% is DKK 25bn of which DKK 8bn is already deposited with A.P. Moller - Maersk. The remaining DKK 17bn will be received at closing, which is expected during the first half of 2014.
Additionally, Maersk Tankers has as part of its strategy to focus on transport of refined oil products entered into an agreement to divest its fleet of 15 VLCCs, with delivery expected to be completed during 2014 as the carriers come off contracts. Total proceeds from this divestment are around USD 980m.
As the Group continues to invest in growing the businesses in 2014, improving the returns and delivering on projects remains critical to realising the Group potential.
Hence the 2013 priorities of Optimise Balance Sheet for Growth (Project FIT) and deliver on commitments will continue in 2014. The Group also introduces a third, externally-focused priority reflecting the ambition to prepare for the future by developing truly innovative customer solutions. These solutions will help to identify the next steps beyond the mid-term goals for the Group.
The Group has significant investment plans and clear strategic goals in place for 2014. Delivering on commitments will ensure that the Group upholds the reputation as an organisation that delivers on its promises. Each business unit has defined its key commitments for 2014.
As an asset heavy group, Project FIT is key in ensuring that the Group remains focused on optimising the balance sheet and in lifting returns. In 2013 the Project FIT targets were exceeded with over USD 4bn stemming from divestments and working capital improvements. The Group will continue the efforts and build on these achievements in 2014.
While continuing to optimise the performance, the Group must also build for the future. The third priority is about driving forward products and services that will enhance the Group's competiveness, differentiate the Group to the customers and ultimately enable the Group to expand beyond the current strategic goals. Throughout the Group, teams are today developing innovative new solutions for the customers.
The Group is exposed from asset heavy industries with significant cyclical influence. The level of solidity in all financial aspects has been considered when setting the targets in the capital structure.
Maersk Line DSME Shipyard Okpo, South Korea
"The cradle to cradle passport" will make it possible to recycle 95% of the main components of the vessel to an extent and quality far better than today.
In September 2013, Moody's Investors Service and Standard & Poor's initiated their credit ratings of A.P. Møller - Mærsk A/S by assigning long term credit ratings of Baa1 and BBB+ respectively, both with "stable" outlooks.
A credit rating is a further step in the Group's funding strategy. A.P. Møller - Mærsk A/S issued its first bond in 2009 and was the largest unrated bond issuer in Europe with approximately an equivalent of USD 5bn of bonds outstanding prior to the assignment of the credit ratings. The new credit ratings provide the Group with wider access to investors, particularly in the US bond markets, and are expected to lower future funding costs.
The Group is committed to maintaining a conservative capital structure over the business cycle to ensure continued creditworthiness and has defined financial ratio guidelines in line with a strong investment grade rating:
1 Adjusted for operating lease obligations
As of 31 December 2013, the Group is well within the financial ratio guidelines.
The Group's ambition is to remain a strong investment grade company at the current rating level.
The main elements in the Group's funding strategy, to support growth and secure a sound liquidity profile, are:
At 31 December 2013, the Group's gross interest-bearing debt totalled USD 15.7bn (USD 18.2bn) with net interestbearing debt of USD 11.6bn (USD 14.5bn). The net interestbearing debt decreased by USD 2.8bn during 2013 due to strong development in the cash flow from operating activities and divestments. The debt leverage in the Group (net debt/EBITDA) remains within the historic range (0.5 – 2.0).
The average cost of funding was 4.0% (4.6%) and at 31 December 2013 the average maturity of loan facilities was about five years (about five years). Amortisations in the coming five years are expected to be approximately USD 2.3bn per year (USD 2.6bn).
The Group raised USD 2.9bn in new financing in 2013 (including new and refinancing of existing undrawn committed facilities) to support net investments of USD 4.9bn (USD 5.8bn), amortisation on the debt portfolio of USD 2.5bn (USD 2.6bn) and net repayment of revolving credit facilities of USD 60m (USD 2.0bn).
The Group continues to optimise its funding position, specifically looking at opportunities to repay relatively expensive borrowings due to the Group's strong liquidity position and improved access to the debt capital markets on the back of the credit ratings.
At 31 December 2013, the liquidity reserve, defined as cash and bank balances and securities of USD 3.6bn (USD 2.2bn) and committed undrawn revolving credit facilities of USD 11.2bn (USD 11.0bn), was USD 14.8bn (USD 13.1bn). The increased level of the Group's liquidity reserve was mainly caused by the strong operating cash flow of USD 8.9bn (USD 7.0bn) generated in 2013 partly driven by the execution of a working capital reduction programme. Dividend payment for the year was USD 1.1bn (USD 945m).
During 2013 the Group signed new committed revolving credit facilities of USD 450m and extended committed revolving credit facilities maturing in 2014 of USD 1.2bn. The Group expects in 2014 to refinance its syndicated committed revolving credit facility of USD 6.75bn maturing in September 2015.
Additionally, at 31 December 2013 the Group had financing commitments related to the newbuilding programme of USD 2.5bn and a number of overdraft facilities relating to the daily cash management operations.
The Group is committed to maintaining a conservative funding profile over the business cycle. As a consequence of the payment schedule of the investments and potential fluctuations in the Group's cash flow, some volatility in the financial profile is expected. Based on the size of the committed loan facilities, including investment specific financing, the maturity of the loan facilities and the capital commitments, the Group's funding and liquidity position is deemed satisfactory.
Dividend is the Group's primary distribution of capital to our shareholders. The nominal dividend has increased steadily over the last decade. The Group will continue to increase the nominal dividend as long as this is supported by an underlying earnings growth.
The Group may have a stronger financial position than what is needed to fund the strategic development and retain financial flexibility over a longer period of time. In these periods, the Group will evaluate the need for capital and will consider how to manage excess capital.
The Group's invested capital was USD 55bn at the end of 2013 and the return on invested capital after tax (ROIC) was 8.2%. The Group's ambition is to achieve a ROIC above 10% over the cycle.
APM Terminals Tangier Morocco
The terminal serves the West Mediterranean market, and it has high productivity and provides ideal access to regional markets.
| DKK million | USD million | ||||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Revenue | |||||
| Maersk Line | 147,184 | 157,119 | 26,196 | 27,117 | |
| Maersk Oil | 51,364 | 58,833 | 9,142 | 10,154 | |
| APM Terminals | 24,341 | 24,370 | 4,332 | 4,206 | |
| Maersk Drilling | 11,077 | 9,749 | 1,972 | 1,683 | |
| Maersk Supply Service | 5,222 | 5,080 | 930 | 877 | |
| Maersk Tankers | 9,132 | 11,454 | 1,625 | 1,977 | |
| Damco | 18,049 | 18,709 | 3,212 | 3,229 | |
| Svitzer | 4,671 | 4,754 | 831 | 820 | |
| Total reportable segments | 271,040 | 290,068 | 48,240 | 50,063 | |
| Other businesses | 7,407 | 13,099 | 1,318 | 2,261 | |
| Unallocated activities (Maersk Oil Trading) | 2,476 | 4,717 | 441 | 814 | |
| Eliminations | -14,687 | -21,131 | -2,613 | -3,647 | |
| Total | 266,236 | 286,753 | 47,386 | 49,491 | |
| Profit/loss for the period | |||||
| Maersk Line | 8,483 | 2,671 | 1,510 | 461 | |
| Maersk Oil | 5,875 | 14,164 | 1,046 | 2,444 | |
| APM Terminals | 4,327 | 4,065 | 770 | 701 | |
| Maersk Drilling | 2,965 | 2,012 | 528 | 347 | |
| Maersk Supply Service | 1,323 | 765 | 235 | 132 | |
| Maersk Tankers | -1,781 | -1,825 | -317 | -315 | |
| Damco | -626 | 320 | -111 | 55 | |
| Svitzer | 878 | 43 | 156 | 7 | |
| Total reportable segments | 21,444 | 22,215 | 3,817 | 3,832 | |
| Other businesses | 1,980 | 3,728 | 352 | 643 | |
| Unallocated activities | -4,343 | -4,204 | -773 | -726 | |
| Eliminations | -74 | 9 | -13 | 4 | |
| Discontinued operations, after elimination | 2,216 | 1,649 | 394 | 285 | |
| Total | 21,223 | 23,397 | 3,777 | 4,038 | |
| MAERSK LINE |
|
|---|---|
| ----------------------- | -- |
| Corporate office | Copenhagen, Denmark |
|---|---|
| Employees | 32,900 |
| Countries | Worldwide |
| Vessels | 584 |
| CEO | Søren Skou |
Maersk Line improved its profit in 2013 by USD 1.0bn, delivering a profit of USD 1.5bn (USD 461m), despite increasing imbalance in supply and demand growth resulting in lower freight rates. The improvement was driven by lower unit costs through the continuous focus on operational cost savings mainly from vessel network efficiencies, active capacity adjustments and improved vessel utilisation, and also supported by lower bunker price.
Maersk Line followed its strategy to grow with the market and despite 7.2% lower average freight rates, profit improved to USD 1.5bn compared to USD 461m in 2012. The improvement was driven by operational cost savings mainly from vessel network efficiencies and improved utilisation. The result improved the return on invested capital (ROIC) from 2.3% in 2012 to 7.4% in 2013, however still below cost of capital.
Revenue decreased by 3.4% to USD 26.2bn, negatively impacted by a decrease of 7.2% in the average freight rate to 2,674 USD/FFE partly offset by a volume increase of 4.1% to 8.8m FFE. To minimize the impact of the low and volatile freight rate environment Maersk Line continued to absorb capacity by active capacity adjustments throughout the year in the form of idling, slow steaming and blanked sailings. Recognised freight revenue was USD 23.7bn (USD 24.5bn) and other revenue was USD 2.5bn (USD 2.6bn).
| Maersk Line | USD million | |
|---|---|---|
| Highlights | 2013 | 2012 |
| Revenue | 26,196 | 27,117 |
| Profit/loss before depreciation, amortisation | ||
| and impairment losses, etc. (EBITDA) | 3,313 | 2,179 |
| Depreciation, amortisation and impairment losses | 1,780 | 1,678 |
| Gain on sale of non-current assets, etc., net | 38 | 23 |
| Share of profit/loss in associated companies | - | 1 |
| Profit/loss before financial items (EBIT) | 1,571 | 525 |
| Tax | 61 | 64 |
| Net operating profit/loss after tax (NOPAT) | 1,510 | 461 |
| Cash flow from operating activities | 3,732 | 1,793 |
| Cash flow used for capital expenditure | -1,607 | -3,550 |
| Invested capital | 20,046 | 20,648 |
| ROIC | 7.4% | 2.3% |
| Transported volumes (FFE in million) | 8.8 | 8.5 |
| Average rate (USD per FFE) | 2,674 | 2,881 |
| Unit cost (USD per FFE incl. VSA income) | 2,731 | 3,054 |
| Average fuel price (USD per tonne) | 595 | 661 |
In line with strategy, Maersk Line maintained its market share for the full year with a volume increase of 4.1% compared to 2012. On the main Asia-Europe trades, the head haul volumes increased by 4% while backhaul volumes increased by 3%, to overall growth of 3% compared to 2012. Volumes increased 2% on East-West trades,
Revenue split
4% on North-South trades and 10% on Intra trades compared to 2012. Average freight rates decreased on all trades with 6% decrease in average freight rates for Asia-Europe trades.
Total cost per FFE decreased by 10.6% to 2,731 USD/FFE mainly driven by decreasing bunker consumption and operational cost savings. Maersk Line continued to utilise slow and equal steaming to reduce emissions and despite 4.1% volume growth Maersk line reduced bunker consumption by 12.1%. The bunker price was 9.9% lower in 2013, but total bunker costs decreased by 21.0% to USD 5.3bn compared to 2012.
As a result of Maersk Line's strategy to grow with the market combined with cost leadership, Maersk Line managed to deliver a higher than expected EBIT margin gap to peers of around 7.5% point well above the ambition of 5% points EBIT margin above peer average (based on available Q3 2013 year to date data).
Terminal cost: Cost related to terminal operation such as moving the containers (mainly load/ discharge of containers), container storage at terminal, stuffing (loading) and stripping (unloading) of container content, power for reefer units, etc.
Inland transportation: Cost related to transport of containers inland both by rail and truck.
Containers and other equipment: Cost related to repair and maintenance, third party lease cost and depreciation for owned containers.
Vessel costs: Cost related to port and canal fees (Suez and Panama), running cost including lubricants and crewing of owned vessels, depreciation of owned vessels, time charter of leased vessels, cost of slot (capacity) purchases and vessel sharing agreements (VSA) with partners.
Bunker: Cost related to fuel consumption.
Administration and other costs: Cost related to own and third party agents in countries, liner operation centres, vessel owning companies, onshore crew and ship management, service centres and headquarters. Administration cost types such as staff, office, travel, training, consultancy, IT, legal and audit, etc. Other cost covering currency cash flow hedge, cargo and commercial claims, and bad debt provision.
Cash flow from operating activities of USD 3.7bn was significantly higher than 2012 driven by improvements in profitability and working capital. Cash flow used for capital expenditure of USD 1.6bn was primarily related to the Triple-E newbuildings and was significantly lower than 2012 (USD 3.6bn), mainly due to decreased container investments leaving a positive free cash flow of USD 2.1bn (negative USD 1.8bn).
Maersk Line's fleet increased by 0.2% to 2.6m TEU total capacity. The fleet consisted of 275 owned vessels (1.6m TEU) and 299 chartered vessels (1.0m TEU) by the end of 2013. The owned fleet was increased by delivery of four Triple-E container vessels, five vessels designed for growth markets in Africa and Latin America trades and purchase of an already chartered vessel. To optimise network costs Maersk Line has in Q4 2013 entered an agreement to terminate 14 finance leased vessels. Five vessels (20,000 TEU) have been redelivered to owners in Q4 2013 and nine vessels (36,000 TEU) will be redelivered in Q1 2014. The chartered fleet was reduced by 27 vessels compared to 2012 and the chartered fleet declined by 8.5% to 1.0m TEU capacity. Idle capacity at the end of 2013 was 47,000 TEU (nine vessels) and corresponds to around 6% of total idle capacity in the market. Maersk Line owns five and charters five multipurpose vessels.
16 Triple-E vessels suited for the Asia-Europe trade with a capacity of 288,000 TEU are on order for delivery during 2014-2015. No newbuilding orders were placed during 2013.
Global container demand growth is forecasted to remain modest at 4-5% range in 2014. The challenging demand side is coupled with a significant amount of new tonnage being delivered corresponding to a capacity increase of 9.8% or 1.7m TEU. Thus, without significant capacity adjustments, the container shipping market is most likely expected to see a continued downward pressure on freight rates in 2014.
Maersk Line will continue to grow with the market, and to improve cost leadership and commercial excellence to maintain an EBIT margin of at least 5% points above peer average with a long term objective to deliver stable returns above cost of capital.
In June, Maersk Line, MSC and CMA CGM agreed in principle to establish a long term operational alliance on East–West trades, called the P3 Network. While the P3 Network vessels will be operated independently by a joint vessel operating centre (Network Centre), the three lines will continue to have fully independent sales, marketing and customer service functions. With the continued delivery of Triple-E vessels the implementation of the P3 Network is a strategic focus for 2014 to improve East-West profitability after initial phase-in costs.
The P3 Parties have carefully reviewed the applicable laws and are cooperating closely with competition and maritime authorities worldwide to provide the information required to obtain regulatory approval. The Network Centre and joint fleet operation intend to start operations mid-2014 pending regulatory approval. P3 represents a unique opportunity to make the P3 parties' container liner shipping more efficient in several ways: It will improve service quality for customers and provide for significantly reduced fuel consumption together with cost reductions and delivering extensive environmental benefits.
To better serve the large and growing market of intra-America, Maersk Line has decided to establish a new and dedicated carrier, SeaLand, with an aim to grow existing Maersk Line intra-Americas business. SeaLand will gain additional flexibility in operations to provide customers with a better service and get a stronger market position. SeaLand will commence operations on 1 January 2015.
To improve the competitiveness of Maersk Line, five key focus areas were defined for 2013. Overall, Maersk Line is on track with these focus areas and they have successfully supported the improved financial performance.
The reefer rate restructuring initiative has been successful in getting reefer rates up, but at the expense of volume, especially on the East-West trades. Overall freight rates have been under pressure and volatile, especially on the Asia-Europe trade, and the rates and contracting initiative has proven important to limit the decline in freight rates. The network cost initiative and total unit cost initiative delivered significant results and total cost reductions are ahead of plan, especially due to a more cost-effective and better utilised vessel network. Through the volume and market share initiative Maersk Line managed to keep its market share on par with the level of 2012.
The global market for container demand grew around 3.5% in 2013 compared to 2012. While the global container market grew only 1-2% in Q1 2013 compared to Q1 2012, demand growth steadily improved during the rest of the year ending at around 4% growth in Q4. Above all, westbound Asia-Europe container demand improved during 2013 with volumes 7-8% higher in H2 2013 compared to the same period in 2012.
Bunker consumption
(USD/FFE)
EBIT unit cost adjusted for gains/losses, associated companies, restructuring cost and including VSA income.
For the full year 2013, the total Asia-Europe trade increased 5%, while volumes on the transpacific trade grew 2%.
Container trade was also affected by the fact that a range of emerging countries' foreign exchange rates lost value against the US dollar in 2013, leading to more expensive imports for these countries while exports became more price-competitive.
Above all, imports to South Africa from Asia and North America struggled on that account and container demand declined slightly. Container imports to West Africa, on the other hand, increased in particular imports from Asia and Middle East were strong. In Latin America, container market activity was weaker than normal as Southbound trades from Europe and North America was affected by the weak economic growth in Argentina, Brazil and Mexico.
The nominal increase in capacity from deliveries of new container vessels was 8.4% in 2013. Even though the industry managed to reduce the effective capacity growth through slow steaming and scrappings it was not quite enough to balance it with the modest overall head-haul demand growth and deteriorations of the global supply/ demand balance. Moreover, the equivalents of 1.9m TEU new container vessels were ordered during 2013 leading to an increase of the container vessel orderbook in Q3 and Q4 for the first time since Q2 2011.
Global container freight rates followed a declining trend in 2013 reflecting the challenging supply/demand development.
Teamwork, focus and simplicity were re-emphasised in January 2013 as behaviours that Maersk Line needs to amplify in order to succeed in delivering financial performance improvements and a longer-term transformation of Maersk Line into a sustainable value creating top quartile performer.
In supporting the strategy, Human Resources' focus is on embedding the above three cultural amplifiers in the business and daily work. Human Resources will act as a lever for Maersk Line's transformation by developing an engaged, capable and high-performing workforce driving the business objectives.
Maersk Line continues to invest in innovation focused on safety, cost effectiveness, delivering better services and environmental improvements. The ECO Retrofit Technology Programme has assisted to improve the vessel efficiency with short pay-back periods of 1-2 years. Retrofit initiative examples include:
Additionally, Maersk Line continues to work with key suppliers to develop innovative solutions to further reduce fuel costs, increase fuel flexibility and cost effective compliance.
Maersk Line facilitates global trade at continuously lower CO2 footprint. The average CO2 emission per container-kilometre has been cut by more than one third (34%) since 2007, and Maersk Line is well underway to achieving a 40% CO2 reduction target by 2020. In 2013, CO2 emissions per container-kilometre dropped by 12% compared to 2012, which is directly related to the consistent efforts to reduce fuel costs. Main initiatives driving the improved CO2 performance were: network and speed optimisation; technical upgrading of vessels; change of behaviour and the deployment of new and more efficient vessels, such as the Triple-E vessels.
Maersk Line experienced increased attention to sustainability performance from customers. In 2013, large customers representing around 19% of transported volumes have requested tailored sustainability information as part of their business relationship with Maersk Line.
Maersk Line's air pollutants such as sulphur oxides (SOx) and nitrous oxides (NOx) have also been reduced mainly due to less consumed fuel. From 2015, the permitted sulphur content in fuel will be lowered to 0.10% in so-called Emission Control Areas in North Europe and North America. Maersk Line plans to comply by switching to cleaner fuels while alternative technical solutions have proven unviable.
A stable and reliable supply chain is very important to Maersk Line. In 2013, Maersk Line continued the efforts to enrol suppliers in Maersk's Responsible Procurement Programme.
The lost time injury frequency (LTIF) for 2013 was 0.71 (0.76) per million working hours.
Maersk Line accepts no forms of corruption in conducting business. Controlling facilitation payments are high on the agenda and remain a great challenge in many parts of the world. In 2013, Maersk Line has focused the anti-corruption efforts on training of employees as well as reporting of incidents.
| TEU | Number of vessels | |||
|---|---|---|---|---|
| Fleet | 2013 | 2012 | 2013 | 2012 |
| Own container vessels | ||||
| 0–2,999 TEU | 105,432 | 103,805 | 58 | 57 |
| 3,000–4,699 TEU | 393,277 | 403,042 | 95 | 98 |
| 4,700–7,999 TEU | 268,696 | 268,732 | 41 | 41 |
| 8,000 TEU | 815,609 | 704,050 | 81 | 74 |
| Total | 1,583,014 | 1,479,629 | 275 | 270 |
| Chartered container vessels | ||||
| 0–2,999 TEU | 413,755 | 425,852 | 214 | 220 |
| 3,000–4,699 TEU | 52,392 | 120,525 | 13 | 29 |
| 4,700–7,999 TEU | 272,959 | 276,998 | 43 | 46 |
| 8,000 TEU | 308,726 | 321,673 | 29 | 31 |
| Total | 1,047,832 | 1,145,048 | 299 | 326 |
| Own and chartered container vessels | 2,630,846 | 2,624,677 | 574 | 596 |
| Own and chartered multi purpose vessels | - | - | 10 | 12 |
| Newbuilding programme (own vessels) | ||||
| 3,000–4,699 TEU | - | 9,000 | - | 2 |
| 4,700–7,999 TEU | - | 26,100 | - | 3 |
| 8,000 TEU | 288,000 | 360,000 | 16 | 20 |
| Container vessels total | 288,000 | 395,100 | 16 | 25 |
| V7 MAERSK . UIT |
|---|
| Corporate office | Copenhagen, Denmark | |
|---|---|---|
| Employees | 4,100 | |
| Platforms / FPSOs | 77 / 3 | |
| Entitlement share of production | 235,000 | |
| CEO | Jakob Thomasen |
Maersk Oil's key focus has been safe operations, exploration and progressing major projects towards production start, including Al Shaheen in Qatar, Chissonga in Angola, Johan Sverdrup in Norway, and Culzean in the UK. The reinstatement of the Gryphon FPSO, UK and the continued ramp up of El Merk, Algeria returned Maersk Oil's entitlement production to growth from late 2013.
Maersk Oil's profit was USD 1.0bn (USD 2.4bn) and the return on invested capital (ROIC) was 16.2% (35.7%). The result was USD 1.4bn lower than 2012 where oneoff gains from tax income of USD 899m in Algeria and a USD 91m divestment gain in Brazil positively affected the result.
A lower average oil price of USD 109 per barrel (USD 112 per barrel) and lower entitlement production 235,000 boepd (257,000 boepd) negatively impacted the result. However, the entitlement production returned to growth from late 2013 mainly due to reinstatement of the
Gryphon FPSO, UK and the ramp up of production from the El Merk fields, Algeria.
| Maersk Oil | USD million | ||
|---|---|---|---|
| Highlights | 2013 | 2012 | |
| Revenue | 9,142 | 10,154 | |
| Profit/loss before depreciation, amortisation | |||
| and impairment losses, etc. (EBITDA) | 5,760 | 7,156 | |
| Depreciation, amortisation and impairment losses | 1,668 | 1,895 | |
| Gain on sale of non-current assets, etc., net | - | 109 | |
| Share of profit/loss in associated companies | -42 | -42 | |
| Profit/loss before financial items (EBIT) | 4,050 | 5,328 | |
| Tax | 3,004 | 2,884 | |
| Net operating profit/loss after tax (NOPAT) | 1,046 | 2,444 | |
| Cash flow from operating activities | 3,246 | 3,857 | |
| Cash flow used for capital expenditure | -1,800 | -1,959 | |
| Invested capital | 6,478 | 6,920 | |
| ROIC | 16.2% | 35.7% | |
| Exploration costs | 1,149 | 1,088 | |
| Average share of oil and gas production | |||
| (thousand barrels of oil equivalent per day) | 235 | 257 | |
| Average crude oil price (Brent) (USD per barrel) | 109 | 112 | |
Exploration and production are global activities for Maersk Oil. The target is to have a diverse and promising project pipeline and opportunities are found throughout the globe. From the Arctic waters of Greenland where projects are in early exploration stages with seismic surveys to appraisal drilling in the North Sea on the Johan Sverdrup discovery and to production in the El Merk desert of Algeria.
From early evaluation of many prospects to drilled discoveries of carefully selected targets and through the evaluation and engineering phases prior to production lie thousands of man hours and a timespan easily reaching a decade.
1Maersk Oil, in agreement with the partners, decided to relinquish the Elly-Luke project in 2013.
2The Cubal discovery made in the second half of 2013 has now been included in the field development plan for Chissonga.
Maersk Oil remains focused on building and managing the portfolio in line with entitlement production growth targets and double-digit returns on investment through to the end of the decade. In the short to mid-term this will be achieved by delivering on a number of projects. Longer term, sustainable production will also be achieved through maturing exploration prospects and through discoveries to production; this process typically takes longer than five years. In general, Maersk Oil aims at investing in areas where it can add value through experience in extracting oil and gas from tight reservoirs such as chalk or with high pressure/high temperature conditions or in deep water.
In 2014, particular focus will be to continue to mature the substantial number of development projects that are being executed currently or being progressed towards approval.
With current development plans and exploration activities, Maersk Oil has planned annual development capital expenditure in the range of USD 3-5bn against USD 1-3bn in recent years, in order to build the portfolio.
Maersk Oil has exploration and production activities in 11 countries with producing assets in six of these.
The return of the Gryphon FPSO, UK to full production and the continued ramp up of El Merk in Algeria reversed the decline in Maersk Oil's entitlement from late 2013.
Work progresses according to plan towards production start-up in late 2014 on Golden Eagle, UK and the Jack field, US Gulf of Mexico. In Qatar the first well has been drilled as part of the latest Al Shaheen Field Development Plan, FDP2012, and in Denmark, the Tyra South East development plan was approved.
Development plans for Chissonga, Angola and the combined Flyndre/Cawdor project, UK were submitted to authorities for approval. 25 exploration/appraisal wells were completed, including two successful Cubal wells in Angola and six successful appraisal wells at Johan Sverdrup in Norway. The other 17 wells were under evaluation or assessed not to be commercially viable by the end of 2013 which was a result below expectation.
Maersk Oil increased its focus in the Kurdistan region of Iraq, where a 5-well exploration work programme was ongoing by the end of 2013 in the Sarsang licence area. In addition, acquisition of two new licence areas in the Piramagrun and Qala Dze blocks was approved by the local authorities.
Maersk Oil's reserves and resources are estimated according to international standards (Society of Petroleum Engineers' Petroleum Resources Management System) and the reserves are independently audited. The yearly update of Maersk Oil's reserves and resources as per end of 2012 showed entitlement reserves and resources (2P+2C) of 1.36bn barrels of oil equivalent (1.38bn boe) including proved and probable (2P) reserves of 0.62bn barrels of oil equivalent (0.59bn boe). 2013 reserves and resources numbers will be released together with the financial results for Q1 2014.
Entitlement production in 2013 was 235,000 boepd (257,000 boepd). The lower production was mainly due to natural production decline in the maturing fields across the portfolio and the entry of the Danish stateowned North Sea Fund as partner with 20% interest in the Danish Underground Consortium in mid-2012. Although the 9% decline was slightly higher than expected, the reinstatement of the Gryphon FPSO, UK and the continued ramp up of El Merk, Algeria returned the entitlement production to growth from late 2013.
Daily entitlement production in Qatar was 99,000 boepd (103,000 boepd). The reduction was due to lower cost recovery and in line with expectations.
Entitlement production in Denmark was 70,000 boepd (91,000 boepd). The reduction was mainly caused by the natural decline in production from mature fields and the entry of the Danish state-owned North Sea Fund as partner. In addition, the entitlement production was impacted by a planned shut-down for reconfiguration of the Tyra asset to allow higher gas production to commence at the end of 2013.
In the UK, entitlement production was 30,000 boepd (28,000 boepd) positively affected by the reinstatement of the Gryphon FPSO in mid-2013.
Algeria experienced an upward trend in the entitlement oil production reaching 28,000 boepd (27,000 boepd) from ramp up of the El Merk Fields in the second half of the year, offset by the decline in production from mature assets.
In Kazakhstan and Brazil the levels of entitlement production from 2012 of 3,000 and 5,000 boepd respectively were maintained in 2013.
The key focus for Maersk Oil is to deliver the development projects that are being executed or being progressed towards approval. These include major projects such as Al Shaheen in Qatar, Chissonga in Angola, Johan Sverdrup in Norway, El Merk in Algeria and Culzean in the UK.
The USD 1.5bn Al Shaheen FDP2012 development plan in Qatar was initiated and the first of 51 planned wells has been completed. The project continued according to plan and preparations for the next major development step is progressing with Qatar Petroleum.
In Angola, the Chissonga field development plan was submitted to the authorities in Q3 2013. The adjacent Cubal discovery in 2013 was included in the development plan to be developed as part of the overall Chissonga project.
The concept for first phase of the Johan Sverdrup development in Norway was selected in February 2014. First oil is expected in late 2019, initially with a capacity of 315,000 boepd and a later plateau production estimated at 550,000-650,000 boepd. Maersk Oil holds 20% interest in Licence PL501, one of the three licences encompassing the Johan Sverdrup discovery.
El Merk, Algeria commenced production in 2013 with all four of the fields on-line by the end of the year. Maersk Oil's entitlement of the production reached 15,000 boepd by the end of 2013.
The Culzean gas project, UK, was progressed towards submission of a development plan in 2015. The Golden Eagle Area Development project also in the UK continued to progress on budget and on schedule for first oil by end 2014. The combined Flyndre / Cawdor project, UK was submitted to authorities for approval.
In the US Gulf of Mexico, work continued according to plan to commence production from the first development stage in the Jack deepwater field by the end of 2014. A second stage is planned for later production start-up.
The Dunga Phase II project in Kazakhstan is progressing with 72 wells out of 198 planned wells completed with gradual ramp up of production expected over the next four years.
In 2013, 25 (23) exploration/appraisal wells were completed in Angola, Brazil, Denmark, Iraq (Kurdistan), Norway, Qatar, UK and the US. The wells included two successful Cubal wells in Angola and six successful appraisal wells at Johan Sverdrup in Norway. The exploration drilling result for the year was below expectation as 15 of the other wells were assessed not to be commercially viable. Further, the Itaipu and Wahoo fields in Brazil, acquired in 2012 with significant intangible assets of USD 2.3bn, were still under evaluation by the end of 2013.
In Kurdistan, Maersk Oil has increased its activities. In the Sarsang licence, a 5-well exploration programme is ongoing with expected completion in 2014. Furthermore, in late 2013 Maersk Oil acquired a 40% interest in the Piramagrun and Qala Dze licences with exploration drilling ongoing at end of 2013.
In the US Gulf of Mexico, exploration drilling on the Oceanographer prospect and appraisal drilling on the Buckskin discovery were ongoing by end of 2013.
In the increasing complexity of the upstream oil industry, Maersk Oil benefits from its demographic profile with a healthy blend of juniors, mid-careers and experienced technical professionals. This constitutes a strong base to address common industry challenges such as timely delivery of major projects, development of local leaders, and talent attraction and retention.
Alumni from MITAS (Maersk International Technology and Science Programme) have reached critical mass and play an important role in delivering synergies between disciplines, functions and geographies.
The development of local leaders demands constant focus and understanding of local culture and motivation. For example Maersk Oil in Kazakhstan today has 76% Kazakhs in leadership positions. Similarly a newly launched "Qatarisation" strategy will accelerate the development of Qatari leaders. The coming year, a specific project manager development programme will further support the project delivery performance.
All the initiatives are being supported by global processes regarding talent identification, monitoring and development, and mapping against critical positions.
In early 2013, Maersk Oil (on behalf of the Danish Underground Consortium) entered into an agreement with the Danish Government to establish a new research and technology centre at the Technical University of Denmark. The new centre, named the Danish Hydrocarbon Research & Technology Centre, is planned to employ close to 100 researchers, focused on developing technical solutions which can increase the recovery of oil and gas from the Danish North Sea. The agreement runs for 10 years with a total budget of DKK 1bn. The inauguration of the center will take place mid-2014.
In late 2013, Maersk Oil also entered into an agreement with the Nano-Science Center at University of Copenhagen and Højteknologi Fonden. A jointly financed project aims to develop new methods to obtain detailed information on the oil and gas reservoirs through micro-particles recovered during well-drilling. If successful, the methods will allow Maersk Oil to obtain significant cost savings during the appraisal phase of discoveries, while at the same time acquiring more and better data than currently possible.
Maersk Oil is pursuing a strategy of protecting inventions and was in 2013 granted patents for six of these. The Company now holds patents for 19 inventions in total and has applications pending for 62 more.
For the past three years, Maersk Oil has carried out a culture change programme involving global training, leadership responsibility, employee engagement and safety awareness.
Maersk Oil has processes in place to prevent oil spills. Should an oil spill, however occur, an effective response plan is in place. The plans specify requirements in areas such as well control, containment, mechanical recovery, dispersant application and response personnel. In 2013, Maersk Oil experienced two onshore oil spills of substance in Kazakhstan; however, both were contained with minimal environmental impact.
Social investments are supported for example through building a health clinic in Kazakhstan, diabetes initiatives in Qatar and the drilling of water wells and sponsoring of agricultural projects in Angola.
Maersk Oil experienced no fatalities and had 22 lost time injuries in 2013, underlining the relevance of the constant high focus on safety performance.
The lost time incidents frequency (LTIF) for 2013 was 0.89 (0.75) per million working hours.
A continued focus on safety culture and behaviours is ongoing to embed lessons learned and address root causes from incidents across the organisation. Maersk Oil also undertook a detailed analysis of high potential incidents from the last two years and process safety integrity reviews conducted in the operated units. The learnings will be used to drive improvements in, for example, asset integrity and reliability, organisation and documentation, risk management and the identification and understanding of root causes. Action plans to address the high priority actions across Maersk Oil's business have been prepared and will be a priority focus in 2014-2015.
| Corporate office The Hague, The Netherlands | |
|---|---|
| Employees | 20,300 |
| Countries | 68 |
| Terminal operations | 65 |
| Inland operations | 166 |
| CEO | Kim Fejfer |
APM Terminals delivered an increase in profit. The expansion into high growth markets continued, exemplified by projects in Mexico, Peru, Brazil, Ivory Coast, Nigeria, Russia and China. APM Terminals continued to work on developing attractive customer propositions as well as driving continuous improvement in operational efficiency.
APM Terminals delivered an increased profit of USD 770m (USD 701m) and a return on invested capital of 13.5% (15.2%), reflecting improved underlying performance but also a higher asset base due to the continued high investment level.
The number of containers handled by APM Terminals (weighted with APM Terminals' ownership interest) increased by 3% compared to 2012. Volumes from customers outside the Group grew by 7%.
| APM Terminals | USD million | ||
|---|---|---|---|
| Highlights | 2013 | 2012 | |
| Revenue | 4,332 | 4,206 | |
| Profit/loss before depreciation, amortisation | |||
| and impairment losses, etc. (EBITDA) | 892 | 871 | |
| Depreciation, amortisation and impairment losses | 297 | 283 | |
| Gain on sale of non-current assets, etc., net | 70 | 117 | |
| Share of profit/loss in joint ventures | 93 | 100 | |
| Share of profit/loss in associated companies | 68 | 59 | |
| Profit/loss before financial items (EBIT) | 826 | 864 | |
| Tax | 56 | 163 | |
| Net operating profit/loss after tax (NOPAT) | 770 | 701 | |
| Cash flow from operating activities | 923 | 910 | |
| Cash flow used for capital expenditure | -841 | -1,297 | |
| Invested capital | 6,177 | 5,495 | |
| ROIC | 13.5% | 15.2% | |
| Containers handled (measured in million TEU and weighted with ownership share) |
36.3 | 35.4 |
Total revenue increased by 3% due to higher volume and increased construction revenue on behalf of certain concession grantors. Excluding construction revenue, port revenue grew broadly in line with volume growth. Inland revenue was impacted by the divestments of the Maersk Equipment Service Company Inc., USA (MESC) in 2012, and Bridge Terminal Transport Inc., USA in 2013.
Operations in emerging markets faced inflationary cost pressures. However, excluding the construction revenue, the EBITDA margin improved by 0.6%. This was mainly due to a cost savings programme which delivered cost reductions of more than USD 100m primarily through operational efficiencies and retendering of several supplier contracts.
APM Terminals Maasvlakte II Rotterdam, The Netherlands
APM Terminals is building the terminal of the future in Rotterdam. Opening in 2014, the facility will be the first fully automated container terminal in the world with zero emissions from container handling equipment and capable of handling the largest ships in the world.
Pre-tax gains of USD 70m were partly achieved through the divestment of 70% of Brigantine Group in Hong Kong, China.
Tax at USD 56m was USD 107m lower than in 2012. The charge in 2012 was high due to exceptional items such as tax on divestment gains.
The invested capital increased to USD 6.2bn (USD 5.5bn) reflecting the continued high investment level in APM Terminals, including the development of new terminals
in Santos, Brazil, and Maasvlakte II, the Netherlands as well as various expansion projects. In total more than 3m TEUs of additional container handling capacity was added to the APM Terminals network in 2013 (more than 1.3m TEUs at APM Terminals' equity share).
For APM Terminals the strategic focus is unchanged with the aim to become the leading port and inland operator in the world by 2016. APM Terminals will secure this position by serving the global shipping lines and
cargo owners in long term partnerships through safe and excellent operations and by actively managing the portfolio and developing port infrastructure and inland services in high growth markets.
APM Terminals is actively pursuing an investment strategy with focus on growth markets. 41 out of 65 container terminals operate in growth markets and in 2013 more than 80% of EBITDA was generated in these markets.
The expected market growth rate for 2014 is 4-5%. APM Terminals aims for above market volume growth rates, supported by new additions to the portfolio and various commercial drives.
APM Terminals continued to work on developing attractive customer propositions. Volumes from 3rd party customers reached 50% of the total in 2013 (48%).
The higher productivity achieved in 2012 was maintained throughout 2013. A further improvement is targeted for 2014.
APM Terminals remains committed to driving continuous improvement in operational efficiency. A recent study on global port and terminal productivity released by the US-based Journal of Commerce Group, and based on data from the first half of 2013, has named five facilities from the APM Terminals Global Terminal Network among the world's 10 most productive container terminals.
The global container terminal market measured in TEU increased by 3% during 2013 (Drewry).
The shipping industry is trending towards more global alliances and larger vessels, with an associated cascading of bigger vessels down the shipping lanes. Port operators can expect to handle fewer but larger calls, placing additional demands on port infrastructure. APM Terminals is well placed to take advantage of these developments in the market.
APM Terminals and Turkey-based Petkim entered into an agreement to build and operate Aegean Gateway Terminal, Izmir – one of Turkey's largest container and general cargo terminals. Operations are expected to start in summer 2015. The initial investment for the container terminal is approximately USD 400m. APM Terminals will have the right to operate the port for a period of 28 years which may be extended. The terminal will be capable of handling vessels with capacity over 10,000 TEU.
Global Ports, the leading operator of container terminals in Russia and in which APM Terminals holds a cocontrolling share, completed an agreement to acquire a competing operator, NCC Group Limited. The transaction has diluted APM Terminals' ownership share to 30.75% in the combined entity. The enlarged Global Ports will operate seven container terminals, with a total marine container handling capacity of approximately 4m TEU's, located both around the Baltic Sea and the Russian Far East. Global Ports is now the largest container terminal operator in Russia.
The jointly owned Brasil Terminal Portuario in Santos, Brazil commenced operations during Q3 2013. This was eight months later than expected due to delays in getting the necessary permits issued. Operations are in a
| APM Terminals | Number of terminals |
Number of new terminal projects |
Average remaining concession |
Equity weighted crane lifts in million TEU | ||
|---|---|---|---|---|---|---|
| length in years | 2013 | 2012 | Change | |||
| Americas | 14 | 2 | 17 | 7.0 | 7.2 | -3% |
| Europe, Russia and Baltics | 19 | 3 | 30 | 10.8 | 10.2 | 7% |
| Asia | 17 | 1 | 26 | 10.9 | 10.8 | 1% |
| Africa and Middle East | 15 | 1 | 19 | 7.6 | 7.2 | 5% |
| Total | 65 | 7 | 24 | 36.3 | 35.4 | 3% |
ramp up phase. The facility is equipped with eight Shipto-Shore cranes operating over 1,100 meters of quay.
APM Terminals opened the 600 metres re-constructed quay in Monrovia, Liberia. The re-construction was completed on time and within budget.
APM Terminals divested 70% of the Brigantine Group in Hong Kong, China at the end of the year.
To maintain a position as an attractive employer to the existing global workforce as well as to future employees, APM Terminals continued in 2013 to focus on diversity by enhancing the inclusive work environment, developing and leveraging female talent, and strengthening the leadership pipeline in growth markets. APM Terminals has incorporated "Diversity & Inclusion" in both the curriculum and selection processes for all of the leadership development programmes.
To stay ahead in a very dynamic business environment, APM Terminals is ensuring a constant learning environment for all employees. To further strengthen the capabilities of leaders, APM Terminals launched several leadership programmes with a focus on enhancing leadership capabilities at all levels of the organisation.
When Maasvlakte II in Rotterdam, The Netherlands opens end 2014, it will be the most automated terminal in the world. However, many of the systems and technologies being implemented in this terminal will also be utilised at APM Terminals' new project at Lazaro Cardenas, Mexico. This is scheduled to open in mid-2015, and will be the first automated container terminal in Latin America.
Lazaro Cardenas will feature fully automated electric yard stacking cranes and shuttle carriers will be used for transport between the yard cranes and Ship-to-Shore cranes.
Automation of key processes in terminal operations improves safety by enabling a better segregation of people from heavy machinery. Automation also provides the foundation for consistently high productivity.
APM Terminals' sustainability strategy focuses on four core areas:
For each core area programmes have been developed to address specific topics and the needs of various stakeholders. These sustainability programmes are integrated into the business and are managed within the functional departments to which they relate.
APM Terminals saw a reduction in fatal accidents from 10 in 2011 to three in 2013 following significant investments in safety activism, systematic training of the workforce and management involvement. In a busy container terminal, the key safety risks are traffic, working at heights, objects being dropped and stored energy. These four risks – among others – are being addressed by APM Terminals' global minimum requirements. Action plans have been created to complete identified gaps, and 97% of these actions were completed on time. Action plans exist to complete the remaining 3%. APM Terminals also increased the number of terminal inspections and reviews.
Also in 2013 APM Terminals completed a global sustainability self-assessment. The aim of the self-assessment was to gather information from the local businesses to review the material sustainability issues and to improve visibility on the sustainability performance over the portfolio. This important input has contributed to the development of the global sustainability strategy and the next steps in sustainability.
The lost time incidents frequency (LTIF) for 2013 was 1.81 (2.53) per million working hours.
APM Terminals Tangier Morocco
Berth productivity requires significant planning, coordination and execution.
| Corporate office | Copenhagen, Denmark |
|---|---|
| Employees | 4,000 |
| Offices | 13 |
| Countries | 13 |
| Rigs | 26 |
| Newbuildings | 8 |
| CEO | Claus V. Hemmingsen |
Maersk Drilling reported a historically high profit of USD 528m (USD 347m) driven by increased operational uptime. With high forward contract coverage and an order book of eight large rigs with delivery in 2014-2016, Maersk Drilling is on track towards its strategic aspiration of delivering a profit of USD 1bn by 2018.
Maersk Drilling delivered a profit of USD 528m (USD 347m) and a return on invested capital (ROIC) of 10.8% (8.8%). The increase in profit of USD 181m compared to 2012 was mainly due to higher operational uptime, full utilisation of all rigs and higher dayrates and effective cost management for rigs in operation.
Throughout 2013, all of Maersk Drilling's 16 jack-up rigs and floaters, the 10 drilling barges in Venezuela and the managed semi-submersible rig have been on contract. Maersk Drilling's operational uptime in 2013 averaged 97% (92%). For the floating rigs the operational uptime averaged 96% (85%), while the operational uptime for the jack-up rigs averaged 97% (95%).
Maersk Drilling owns and operates 10 drilling barges on Lake Maracaibo in Venezuela, which in 2013 generated revenue of USD 195m (USD 194m).
Further, Maersk Drilling holds a 50% investment in the joint venture Egyptian Drilling Company, which owns and operates 66 rigs, the main part being land rigs. The profit contribution amounted to USD 19m (USD 0m).
Two yard stays for planned surveys and upgrades were completed in 2013. The yard stays were completed on
| Maersk Drilling | USD million | |
|---|---|---|
| Highlights | 2013 | 2012 |
| Revenue | 1,972 | 1,683 |
| Profit/loss before depreciation, amortisation | ||
| and impairment losses, etc. (EBITDA) | 863 | 638 |
| Depreciation, amortisation and impairment losses | 239 | 197 |
| Gain on sale of non-current assets, etc., net | 4 | - |
| Share of profit/loss in joint ventures | 19 | 0 |
| Profit/loss before financial items (EBIT) | 647 | 441 |
| Tax | 119 | 94 |
| Net operating profit/loss after tax (NOPAT) | 528 | 347 |
| Cash flow from operating activities | 775 | 597 |
| Cash flow used for capital expenditure | -1,517 | -555 |
| Invested capital | 5,320 | 4,283 |
| ROIC | 10.8% | 8.8% |
| Operational uptime | 97% | 92% |
time and budget. Two yard stays planned for 2013 were postponed and will not be completed until beginning of 2014. For 2014, Maersk Drilling has an extensive yard stay programme where further six rigs will have surveys and upgrades.
By the end of 2013, Maersk Drilling's forward contract coverage was 94% for 2014, 70% for 2015 and 53% for 2016. The total revenue backlog for Maersk Drilling by the end of 2013 amounted to USD 7.9bn (USD 7.0bn).
As a consequence of the significant growth and taking many new rigs into operation, Maersk Drilling expects additional costs associated with training and start-up
of operations, USD 20-30m per rig, which will negatively impact the result in 2014 and 2015.
Maersk Drilling's overall business objective is to become a significant and stable contributor to the Group with a profit in excess of USD 1bn by 2018, while conducting incident free operations. This will be achieved by developing and growing the business within the ultra deepwater and ultra-harsh environment segments.
| Segment | 2014 | 2015 |
|---|---|---|
| Ultra-harsh environment jack-up rigs (Norway) | 100% | 83% |
| Premium jack-up rigs | 97% | 62% |
| Ultra deepwater and midwater rigs | 86% | 63% |
| Total | 94% | 70% |
Annual revenue backlog figures reflect upcoming yard stays.
Maersk Drilling Maersk Viking South Korea
Maersk Viking is the first in a series of four ultra deepwater drillships to enter Maersk Drilling's rig fleet. The four drillships represent a total investment of USD 2.6bn and will be delivered from the Samsung Heavy Industries shipyard in 2014.
The focus areas for growth are Norway, where Maersk Drilling will leverage its market leading position in the ultra-harsh jack-up market, and the deepwater regions in the US Gulf of Mexico and West Africa where Maersk Drilling aims to build strong positions.
In order to provide a solid basis for its growth strategy, Maersk Drilling aims to maintain high forward contract coverage to ensure a high degree of earnings visibility.
The main risks to Maersk Drilling's performance and strategy execution relate to operational performance, cost inflation as well as execution of newbuilding projects and yard stays for existing rigs. On longer terms, Maersk Drilling will be exposed to fluctuations in oil prices.
In line with the strategy, Maersk Drilling has in 2013 started to look into divesting its drilling barge activities in Venezuela.
Maersk Drilling signed several new contracts in 2013 of which the major are:
The oil price has averaged above USD 100 per barrel in 2013, and thus continued to provide support for the oil companies' exploration and development activities.
The Norwegian jack-up market remained strong with full utilisation throughout the year and is expected to remain tight in the years ahead. Currently no jack-up rigs are available until fourth quarter 2014. Day rates are around USD 425,000 for newbuilding ultra-harsh jack-up rigs, and older jack-up rigs have secured rates just below USD 400,000.
The market for international premium jack-up rigs continues to benefit from the fact that oil companies prefer newer rigs due to the safety and efficiency gains offered. Premium jack-up rigs enjoy high utilisation and day rates have stabilised in excess of USD 200,000 in the North Sea and around USD 170,000 in South East Asia. In general, demand for premium jack-up rigs looks set to remain healthy, with many long term duration projects commencing in 2014.
The ultra deepwater market was characterised by full utilisation in 2013 and day rate levels peaked at around USD 600,000 with some variations across regions and countries reflecting differences in operating cost levels and taxes. In 2014, the ultra deepwater market will experience intensified competition due to a number of uncontracted rigs entering the market while several operators have postponed commencement for a large number of the longer term projects from 2014 to 2015 and beyond.
Maersk Drilling has ordered an ultra-harsh environment jack-up rig in 2013 to be delivered in 2016, backed by a long duration customer contract. Maersk Drilling has since 2011 committed total investments of USD 5.2bn.
Currently, Maersk Drilling has eight rigs under construction. The order book includes four ultra-harsh environment jack-up rigs, which will be delivered between 2014 and 2016 as well as four ultra deepwater drillships to be delivered during 2014. The newbuilding programme is on budget, however, five of the eight rigs
under construction are delayed by two to four months per rig due to interruptions in the delivery of certain equipment and services from sub suppliers.
Of the eight rigs under construction, contracts have already been secured for six of the rigs totalling a contract backlog of 24 rig years and estimated revenue backlog around USD 4.1bn.
Maersk Drilling needs 1,450 new employees to manage the eight rigs under construction. The core component of recruiting so many people is to enlarge the internal talent pool through drilling trainee programmes and apprenticeship.
Individual and team training is conducted through a structured training programme, which includes the use of the most advanced offshore drilling simulator in the world. To ensure a safe and efficient operation of the new rigs, the teams on the new units will be a combination of experienced employees and new hires enabling an effective integration of new employees.
In 2013, Maersk Drilling and BP signed a partnership agreement to develop conceptual engineering designs for a new breed of advanced technology offshore drilling rigs that will be critical to unlocking the next frontier of deepwater oil and gas resources.
BP and Maersk Drilling will collaborate on concepts for deepwater drilling rigs that can operate in high pressure/ high temperature reservoirs up to 20,000 pounds per square inch (PSI) and 350 degrees Fahrenheit. The agree-
ment is part of BP's Project 20KTM, a multi-year initiative to develop next-generation systems and tools for deepwater exploration and production that are beyond the reach of today's technology, which has a technical limit of 15,000 psi pressure and temperatures of 250 degrees Fahrenheit.
BP estimates that application of this technology across its own global portfolio alone could potentially access an additional 10-20 billion barrels of resources.
Approximately 90% of new hydrocarbon production in the next 20 years will come from developing countries. Many of these countries have introduced local content requirements into the governmental and regulatory frameworks and in formal local stakeholder expectations that govern natural resource developments. The purpose is to create jobs, promote enterprise development and acquire new skills and technologies.
As an example of Maersk Drilling's operations in Angola, the local staffing requirement is 70%. Training is an essential part of achieving this goal. In 2013, Maersk Drilling embarked on a process of hiring local employees directly instead of using a manning agency, amongst others to ensure competencies and to build loyalty.
The lost time injury frequency (LTIF) for 2013 was 1.61 (1.12) per million working hours.
The increase in the LTIFs is disappointing even in spite of being in line with industry safety performance. A number of initiatives have been implemented in order to improve the safety performance.
| Fleet | 2013 | 2012 |
|---|---|---|
| Jack-up rigs | 12 | 12 |
| Semi-submersible rigs | 4 | 4 |
| Drilling barges | 10 | 10 |
| Total | 26 | 26 |
| Total | 8 | 7 |
|---|---|---|
| Drillships | 4 | 4 |
| Jack-up rigs | 4 | 3 |
Maersk Drilling Maersk XL Enhanced Singapore
Maersk Drilling is currently building the world's most advanced jack-up drilling rigs, the Maersk XL Enhanced 1, 2, 3 and 4. The rigs are purpose-built for operating in the ultra-harsh environment of the North Sea, and their technical features are state-of-the-art.
| Corporate office | Copenhagen, Denmark |
|---|---|
| Employees | 2,900 |
| Offices | 8 |
Vessels 98 CEO Carsten P. Andersen
Maersk Supply Service delivered a significantly improved result of USD 235m in 2013 and has updated their strategic plans.
The improved result for 2013 was mainly due to higher utilisation and improved operational margins.
Maersk Supply Service had good coverage going into 2013 with key strategic markets still being Africa, Brazil, Canada, Australia and the North Sea, where the majority of the fleet is employed.
The North Sea market generally improved compared to 2012 and particularly the market for large anchor handling tug supply vessels (AHTS), whereas the platform supply vessel (PSV) market was more balanced in 2013. Internationally, activity increased especially in Brazil at the end of the year with a number of new tenders being launched. A number of extensions and new contracts were concluded in other key markets.
The general newbuilding activity slowed down in 2013. Most orders were placed in the PSV segment where the order book is already significant whereas orders in the AHTS segment were few. A number of Subsea Support Vessel newbuildings were ordered.
As part of the ongoing portfolio optimisation, four older AHTS were sold in 2013. The order book, currently counts two AHTS for delivery in 2014 and 2015 built for the Canadian market and optimised for the local operating
profile with focus on environmentally friendly operations. As part of the new long term strategy "0 incidents and +10% return", Maersk Supply Service is looking at further focusing on the AHTS and Subsea Support Vessel segments.
Within the emergency response and rescue segment and the offshore wind segment, Esvagt achieved nearly full utilisation in 2013 and all time high turnover and profit. Esvagt took delivery of two vessels during 2013
| Maersk Supply Service USD million |
||
|---|---|---|
| Highlights | 2013 | 2012 |
| Revenue | 930 | 877 |
| Profit/loss before depreciation, amortisation | ||
| and impairment losses, etc. (EBITDA) | 421 | 319 |
| Depreciation, amortisation and impairment losses | 170 | 173 |
| Gain on sale of non-current assets, etc., net | 5 | -4 |
| Share of profit/loss in joint ventures | -1 | - |
| Profit/loss before financial items (EBIT) | 255 | 142 |
| Tax | 20 | 10 |
| Net operating profit/loss after tax (NOPAT) | 235 | 132 |
| Cash flow from operating activities | 436 | 305 |
| Cash flow used for capital expenditure | -140 | -214 |
| Invested capital | 2,131 | 2,206 |
| ROIC | 10.9% | 6.1% |
Maersk Supply Service Maersk Achiever Angola
The vessel is a subsea offshore support vessels, currently trading in Angola. The vessel has a strong safety record wherein it passed a milestone of 10 years with LTI-free performance in 2013 since its delivery in 2003.
bringing the total fleet up to 37 vessels. To strengthen the foot-hold in the offshore wind segment, Esvagt ordered two purpose built vessels in July 2013 against long term contracts.
Contract coverage for 2014 is 56% and 32% for 2015 excluding options for all segments combined.
The lost time incidents frequency (LTIF) for 2013 was 0.15 (0.74) per million working hours.
| Other vessels | 3 | 3 |
|---|---|---|
| Emergency, response and rescue vessels | 37 | 35 |
| Supply vessels | 13 | 13 |
| Fleet Anchor handling vessels |
2013 45 |
2012 49 |
Emergency, response and rescue vessels 4 4 Total 6 6
Corporate office Copenhagen, Denmark Employees 3,100 Offices 6 Countries 6 Vessels 130
CEO Morten H. Engelstoft
Maersk Tankers completed the divestments of the Liquefied Petroleum Gas (LPG) fleet in 2013 and reached agreement in January 2014 to divest its 15 Very Large Crude Carriers (VLCC). The divestment supports Maersk Tankers' strategy to focus on transport of refined oil products.
The result for 2013 was a loss of USD 317m (loss of USD 315m). The result includes impairments and provisions for onerous contracts of net USD 297m (USD 238m) and restructuring costs of USD 36m (USD 2m). Excluding one-off items, the result was USD 8m (loss of USD 80m). The improved results were apart from cost reductions driven by improved TCE earnings in the Gas and Product segments, offset by lower TCE earnings in the VLCC segment.
Maersk Tankers has in 2013 focused on several initiatives to improve profitability. Significant savings have been achieved, of which a reduction in bunker consumption of 3% per day compared to 2012 is the main driver.
In line with the strategy to focus on product tanker segments, Maersk Tankers divested the Very Large Gas Carriers (VLGC) fleet in 2013. The divestment involved five owned and six time chartered gas carriers, concluding the exit from liquefied petroleum gas (LPG) shipping. Maersk Tankers reached agreement in January 2014 to sell the fleet of 15 VLCCs for delivery in 2014. With the sale, the remaining VLCC business consists of six bareboat chartered VLCCs with average 5.9 years remaining.
The sale of the LPG and VLCC segments supports Maersk Tankers strategy to focus on transport of refined oil products. To renew the product fleet, Maersk Tankers has ordered four MR vessels for delivery in 2016 and has ordered another two in February 2014.
| Maersk Tankers | USD million | |
|---|---|---|
| Highlights | 2013 | 2012 |
| Revenue | 1,625 | 1,977 |
| Profit/loss before depreciation, amortisation | ||
| and impairment losses, etc. (EBITDA) | 21 | 214 |
| Depreciation, amortisation and impairment losses | 348 | 536 |
| Gain on sale of non-current assets, etc., net | 8 | 8 |
| Share of profit/loss in joint ventures | - | 1 |
| Profit/loss before financial items (EBIT) | -319 | -313 |
| Tax | +2 | 2 |
| Net operating profit/loss after tax (NOPAT) | -317 | -315 |
| Cash flow from operating activities | 223 | 126 |
| Cash flow used for capital expenditure | 748 | -461 |
| Invested capital | 2,335 | 3,633 |
| ROIC | -10.4% | -8.2% |
Maersk Tankers Maersk Barry Norway
Maersk Tankers is focusing investments on the product segments and has recently ordered four new medium range product tankers and further two to renew the existing fleet. The new vessels are expected to be delivered in 2016 and 2017.
During 2013 seven product carriers, one VLCC and 16 LPGs were sold and delivered to new owners, and 11 time chartered vessels were redelivered to the owners.
The product tanker segments experienced stronger demand growth than in 2012. However, vessel supply continued to hold back significant market improvements across all segments. The MR segment experienced improvements on the back of increasing US exports to Europe and the aftermath of Hurricane Sandy. The Handy segment experienced a flat market development mainly on the back of a weak European core market. The LR2 segment had a weak year with declining European naphtha exports to Asia combined with a strong increase in vessels competing for cargoes in the clean product market.
In general, crude shipping had a weak year. Previous years' strong Chinese storage related imports remained absent and US imports from West Africa largely disappeared as domestic production of shale oil increased. Only towards the end of the year, the market experienced a temporary, positive development driven by port delays and bad weather in Asia.
The VLGC segment experienced some improvement resulting from increasing US exports of LPG driven by the surge in shale oil and gas production.
The lost time incidents frequency (LTIF) for 2013 was 0.56 (0.89) per million working hours.
| 2013 | 2012 | |||
|---|---|---|---|---|
| Fleet | Own | Chartered | Own | Chartered |
| LR2 (Aframax) | 13 | 5 | 13 | 5 |
| MR | 11 | 13 | 12 | 15 |
| Handy | 33 | 4 | 33 | 4 |
| Intermediate | 20 | 7 | 26 | 10 |
| VLCC | 15 | 6 | 16 | 5 |
| Gas | - | 3 | 16 | 7 |
| Total | 92 | 38 | 116 | 46 |
| Newbuilding programme | ||||
| MR* | 4 | - | - | - |
| VLCC | - | - | - | 1 |
| Total | 4 | - | - | 1 |
Additional two vessels have been ordered in 2014.
Significant restructuring initiatives upgrading the operations setup and IT platform have affected profitability of the year. Recovery is expected during 2014.
A global restructuring programme was initiated with the aim at simplifying and consolidating the operational structure within Damco. This involves consolidating locations, optimising operation as well as reviewing and implementing new and improved IT systems. This adds very significant one-time transformation costs to the 2013 result, expected not to be repeated in 2014.
A thorough review to assess Damco's financials and risks revealed an exposure in certain countries. This resulted in significant non-cash accounting adjustments to the 2013 result.
The year ended with a loss of USD 111m (profit of USD 55m). Profitability levels are expected to recover in 2014, mainly due to the absence of the 2013 restructuring costs. The benefits from the restructuring are expected to gradually materialise from the second half of 2014 and onwards.
Revenue for 2013 declined by 1% versus 2012, partly as a result of a reduced activity level in government related project cargo which was also contributing to the slowdown in airfreight volumes.
During 2013 the Supply Chain Management segment grew in volume by 13% over 2012. Ocean freight volumes decreased to 1% below 2012. Airfreight volumes did not maintain the rapid expansion rate from 2012, however, still achieved 8% growth.
Cash flow from operating activities was negative by USD 14m, (negative by USD 102m), an improvement from 2012, mainly driven by improvements in working capital.
During the year Damco completed the corporate office move to The Hague, The Netherlands.
The lost time incidents frequency (LTIF) for 2013 was 0.42 (0.55) per million working hours.
| Damco USD million |
||
|---|---|---|
| Highlights | 2013 | 2012 |
| Revenue | 3,212 | 3,229 |
| Profit/loss before depreciation, amortisation | ||
| and impairment losses, etc. (EBITDA) | -65 | 91 |
| Depreciation, amortisation and impairment losses | 34 | 25 |
| Gain on sale of non-current assets, etc., net | 2 | 19 |
| Share of profit/loss in joint ventures | 8 | 6 |
| Profit/loss before financial items (EBIT) | -89 | 91 |
| Tax | 22 | 36 |
| Net operating profit/loss after tax (NOPAT) | -111 | 55 |
| Cash flow from operating activities | -14 | -102 |
| Cash flow used for capital expenditure | -23 | -20 |
| Invested capital | 412 | 512 |
| ROIC | -22.0% | 13.1% |
Damco South Africa Retail is one of Damco's key focus verticals, next to Lifestyle, Technology, Chemicals and Industrial. Globally, retailers recognise the value of direct sourcing of fresh products.
| Corporate office | Copenhagen, Denmark |
|---|---|
| Employees | 2,800 |
| Countries | 35 |
| Port operations | +100 |
| Vessels | 376 |
| CEO | Robert Uggla |
Svitzer delivered a profit of USD 156m and a ROIC of 10.8%. The result was positively impacted by sales gains, partly offset by restructuring costs and impairments. Svitzer continued to grow its LNG terminal towage portfolio with new contracts in Australia and Qatar.
Harbour towage profit increased despite a high level of competitive pressure. Terminal towage developed as expected with increase in revenue due to better spot vessel utilisation. Svitzer closed several new contracts during the year, most notably a 20 year USD 650m contract for the Wheatstone LNG operation in Australia.
The salvage market experienced historically low levels of activity in 2013. However, Svitzer increased its market share within emergency response as well as wreck removal during the year, with a larger wreck removal project still ongoing in Iraq.
As part of the strategy to optimise the portfolio of more than 100 operations, Svitzer divested its 50% shareholding in Uniwise Towage Limited in Thailand and Pacific Towing (PNG) Ltd. in Papua New Guinea.
Svitzer has stepped up its efforts to further improve the profitability of its harbour towage activities. By the end of 2013, improvements in crew optimisation were identified in several locations. As a result, a number of
positions will be redundant in ports across Australia for which a provision of USD 12m was made.
Svitzer continued to deliver a strong cash flow from operating activities of USD 180m (USD 241m). The increase in wreck removal activities had an adverse impact on working capital.
| Svitzer USD million |
||
|---|---|---|
| Highlights | 2013 | 2012 |
| Revenue | 831 | 820 |
| Profit/loss before depreciation, amortisation | ||
| and impairment losses, etc. (EBITDA) | 217 | 223 |
| Depreciation, amortisation and impairment losses | 91 | 201 |
| Gain on sale of non-current assets, etc., net | 29 | 4 |
| Share of profit/loss in joint ventures | 22 | 19 |
| Profit/loss before financial items (EBIT) | 177 | 45 |
| Tax | 21 | 38 |
| Net operating profit/loss after tax (NOPAT) | 156 | 7 |
| Cash flow from operating activities | 180 | 241 |
| Cash flow used for capital expenditure | -2 | -103 |
| Invested capital | 1,363 | 1,495 |
| ROIC | 10.8% | 0.5% |
Svitzer Port of Gothenburg Sweden
Svitzer TYR, an 80 tonnes bollard-pull tug, berthing a container vessel. The construction offers improved stability which combined with engine power, winch options, and a built-in fender system makes it an ideal vessel for demanding terminal and escort operations.
The lost time incidents frequency (LTIF) for 2013 was 0.51 (1.46) per million working hours.
The positive development was a result of initiatives taken to increase safety awareness in 2012 and 2013. Further improvements to align Svitzer's safety system with standards set by the Oil Companies International Marine Forum have been developed and will be implemented during 2014.
| 2013 | 2012 | |||
|---|---|---|---|---|
| Fleet | Own | Chartered | Own | Chartered |
| Tugboats | 255 | 21 | 269 | 17 |
| Other vessels | 81 | 19 | 82 | 11 |
| Total | 336 | 40 | 351 | 28 |
| Total | 6 | - | 6 | - |
|---|---|---|---|---|
| Other vessels | 2 | - | 2 | - |
| Tugboats | 4 | - | 4 | - |
The profit of Maersk FPSOs was USD 63m in 2013. The decrease of USD 273m compared to 2012 was due to divestments completed in 2012, including the LNG fleet and the FPSO Maersk Peregrino as well as the transfer of the Volve production module to Maersk Drilling beginning of 2013. The result for 2013 was impacted by divestment gains of USD 32m compared to total divestment gains of USD 245m recognised in 2012.
The two remaining assets in joint ventures; FPSO North Sea Producer and FGSO NKossa II, are both on profitable long term contracts.
Revenue was USD 663m (USD 1.1bn) with a loss of USD 5m (profit of USD 60m). ROIC was negative by 2.1% (positive by 26.5%).
The 2013 reefer market was characterised by a moderate demand. During Q4, the market saw a slight increase in demand driven mainly by growth in reefer transported commodities.
The building of the new reefer factory in Chile is progressing well and is expected to become operational during 2014.
The Group owns 20% of the shares in Danske Bank. The bank's profit was DKK 7.1bn (DKK 4.7bn), of which 20%, corresponding to DKK 1.4bn (DKK 952m), is included in the Group's profit.
Ro/Ro and related activities primarily comprise the Group's ownership in Höegh Autoliners. The result was a loss of USD 20m (profit of USD 56m) and ROIC was negative 3.2% (positive 7.9%). The result was due to a loss of USD 56m from divestment of the 31.3% ownership in DFDS A/S in Q3 2013. Taking dividends into account, the shares in DFDS A/S has generated an investment yield of 9.2% over the period of ownership.
Dansk Supermarked Group (DSG) delivered a profit of DKK 1.8bn (DKK 1.3bn). EBIT was DKK 2.4bn (DKK 1.7bn) and ROIC was 11.0% (8.0%). Growth was generated mainly by sales and profitability improvements in the discount segment reflecting the results of extended opening hours as well as various profitability initiatives. During 2013 the market share of DSG increased in Denmark, Sweden and Poland whereas it remained stable in Germany.
On 7 January 2014, the Group entered into an agreement to divest its 68% stake in DSG. The transaction encompasses two steps: 1) A.P. Moller - Maersk divests 49% in 2014 and retains ownership of 19% in DSG and 2) in 2019 the buyer has a call option and A.P. Moller - Maersk has a put option on the remaining 19% share in DSG. The accounting gain of the Group is expected to be around DKK 14bn depending on the timing of closing of the transaction. The transaction will generate cash proceeds of around DKK 17bn.
The A.P. Moller - Maersk Group's profit for the year was DKK 21.2bn (DKK 23.4bn) and the equity totalled DKK 230.1bn (DKK 222.5bn).
Revenue decreased by 7% to DKK 266.2bn (DKK 286.8bn), primarily as a consequence of lower container freight rates and lower share of oil production which were partly offset by higher container volumes. Measured in USD, revenue decreased by 4% to USD 47.4bn (USD 49.5bn).
Operating costs decreased by DKK 17.4bn to DKK 203.7bn (DKK 221.1bn), primarily due to decreasing bunker prices and bunker consumption as well as lower container network costs.
Depreciation, amortisation and impairment losses decreased by DKK 3.3bn to DKK 26.0bn (DKK 29.3bn). The Group recognised impairment losses of net DKK 1.2bn (DKK 2.3bn), mainly related to Maersk Tankers. The 2012 impairments primarily related to Maersk Tankers and Svitzer.
Net gains on sale of non-current assets etc. decreased to DKK 814m (DKK 3.5bn). In 2013, the gains primarily related to the sale of the Brigantine Group in Hong Kong, China, and a number of other assets partly offset by the loss of DKK 317m related to the divestment of DFDS. The gains in 2012 predominantly related to the sale of the FPSO Maersk Peregrino, the LNG activities and a partial divestment of an oil activity in Brazil.
Share of the result in joint ventures increased by DKK 100m to DKK 854m (DKK 754m) primarily due to the
full year effect of the acquisition of Global Ports, Russia, on 28 November 2012.
Share of the result in associated companies increased to DKK 1.7bn (DKK 1.3bn) due to higher profit in Danske Bank.
The financial items were negative by DKK 4.0bn (negative by DKK 4.5bn); a positive development by DKK 494m primarily due to lower net interest costs because of less debt and lower interest rates, partly offset by currency adjustments. Further, financial items were impacted positively by an increase in capitalised borrowing cost primarily related to the newbuilding programmes.
Companies in the Group are taxed under different tax regimes, depending on location and activity. Special tax rules apply to some of the Group's activities.
As a general rule, shipping activities are subject to a tonnage-based or similar tax system, under which the computation of taxable income includes an amount calculated on the basis of the fleet's tonnage. Moreover, in certain countries freight taxes are paid mainly based on the gross freight income in those countries.
In most countries, oil and gas activities are subject to a special form of taxation, which is often considerably higher than the normal corporate tax rate.
In 2013, the total tax charge for the Group was DKK 18.2bn (DKK 18.3bn). In 2012 the tax charge included the settlement of an Algerian tax dispute resulting in a one-off income of DKK 5.2bn. Of the total tax charge, taxes payable to Denmark were DKK 6.2bn in 2013 (DKK 9.2bn), of which DKK 3.5bn (DKK 6.0bn) related to the special hydrocarbon tax and DKK 2.6bn (DKK 3.1bn) represented corporate tax on oil activities. The decrease in the special hydrocarbon tax is largely due to the entry of Nordsøfonden (the Danish state-owned North Sea Fund) as partner with 20% interest in DUC (Dansk Undergrunds Consortium) in 2012. The shipping activities' tax payment to Denmark was DKK 110m (DKK 60m).
Comprehensive income for the year was DKK 13.5bn (DKK 21.7bn) and includes the profit for the year of DKK 21.2bn (DKK 23.4bn) and other comprehensive income which was negative by DKK 7.7bn (negative by DKK 1.7bn). Other comprehensive income mainly includes exchange rate adjustment on translation from functional currency to presentation currency, fair value adjustment of certain securities, value adjustment of cash flow hedges and actuarial gains and losses.
At 31 December 2013, total assets amounted to DKK 403.3bn (DKK 409.7bn).
Intangible assets decreased to DKK 25.9bn (DKK 28.0bn), mainly due to amortisation of oil rights.
Property, plant and equipment of DKK 223.5bn (DKK 248.1bn) decreased by DKK 24.6bn with investments in the year of DKK 38.8bn (DKK 43.2bn). Depreciation for the year was DKK 23.9bn (DKK 25.8bn) and net impairment losses of DKK 931m (DKK 1.9bn) were recognised. Sale of tangible assets amounted to DKK 27.8bn (DKK 9.2bn) including the transfer of Dansk Supermarked Group to assets held for sale. Currency adjustments were a decrease of DKK 10.8bn (decrease of DKK 2.6bn) due to the development in USD versus DKK.
Shares in joint ventures amounted to DKK 10.7bn (DKK 11.4bn), hereof Global Ports, Russia, DKK 4.1bn (DKK 4.7bn).
Shares in associated companies amounted to DKK 34.8bn (DKK 35.5bn), hereof Danske Bank DKK 29.2bn (DKK 27.7bn).
Derivatives were as of 31 December 2013 a net asset of DKK 681m (DKK 19m). The increased balance is primarily related to the USD depreciation against main hedging currencies.
Total cash and cash equivalents, consisting of securities held for trading as well as cash and bank balances, totalled DKK 19.3bn (DKK 13.8bn) at 31 December 2013.
Assets held for sale of net DKK 37.5bn (DKK 3.0bn) comprised assets expected to be sold during 2014 including Dansk Supermarked Group and 15 VLCCs to be delivered in 2014.
Equity totalled DKK 230.1bn (DKK 222.5bn). The increase includes comprehensive income for the year of DKK 13.5bn (DKK 21.7bn), and dividend of DKK 6.2bn (DKK 5.3bn) was deducted.
The actuarial net liability for pensions, etc. in relation to defined benefit plans recognised in the financial statements totalled DKK 1.8bn (DKK 2.5bn) at 31 December 2013. Developments in the actuarial assumptions as well as changes to the minimum funding requirements resulted in actuarial gains of DKK 322m (loss of DKK 253m), which are included in other comprehensive income. In 2013, the Group paid DKK 383m (DKK 584m) to defined benefit plans.
Deferred tax liabilities totalled DKK 6.0bn (DKK 6.5bn) at 31 December 2013, and recognised deferred tax assets totalled DKK 2.6bn (DKK 3.3bn). Furthermore, deferred tax assets of DKK 4.4bn (DKK 4.0bn) have not been recognised, cf. note 10 to the consolidated financial statements.
The Group is involved in a number of legal disputes. Moreover, the Group is party to a number of tax disputes, some of which involve substantial amounts and are subject to considerable uncertainty.
Cash flow from operating activities DKK 50.1bn (DKK 40.8bn) was positively affected by improved working capital as well as less taxes paid. Cash flow used for capital expenditure was DKK 27.4bn (DKK 33.7bn). The decrease was mainly due to lower investments in vessels.
The present value of the operating lease commitments totalled DKK 47.3bn (DKK 56.4bn) at 31 December 2013 using a discount rate of 6% (6%). The amount is divided into the following main items:
About one-third of the time charter payments in Maersk Line and in Maersk Tankers are estimated to relate to operational costs for the assets. Please refer to note 22 in the consolidated financial statements for an overview of maturity.
The consolidated financial statements of the Group are included in the consolidated financial statements of A.P. Møller Holding A/S.
The activities of the parent company comprise the global container services in Maersk Line, activities within offshore and other shipping and the oil and gas activities in the Danish sector of the North Sea. In addition activities include the holding of shares in subsidiaries and associated companies.
In the parent company financial statements, shares in subsidiaries and associated companies are recognised at cost, cf. note 23, less impairment losses, and in the income statement, dividends from subsidiaries and associated companies are recognised as income.
Profit for the year was DKK 7.3bn (DKK 8.4bn), primarily impacted by lower dividends from subsidiaries and associated companies together with lower financial income. Tax was lower due to lower profit before tax.
At 31 December 2013, total assets amounted to DKK 276.9bn (DKK 278.5bn) and equity totalled DKK 114.0bn (DKK 116.5bn).
Cash flow from operating activities was DKK 20.2bn (DKK 17.1bn). Especially working capital items improved, but also financial expenses paid and taxes paid, while dividends received decreased.
Being a capital intensive, multinational conglomerate with long term investments requires not only a solid understanding of single known risks to the businesses, but also of potential emerging risks and risks associated with the portfolio of the businesses and countries in which the Group operates.
The Group runs an Enterprise Risk Management (ERM) process under which the largest risks to the Group are identified, assessed, reported and mitigated at different levels of the organisation. The process is coordinated by the Group and the findings of the ERM process are presented to the Executive Board and the Board of Directors. Once a year the Audit Committee undertakes a review of the ERM process and considers any meas-
Enterprise Risk Management (ERM) process
ures to be implemented in order to improve the effectiveness of the risk management in the Group and the business units.
The Group has identified four major risks to achieving its objectives within the next 3-5 years:
The Group is exposed to substantial fluctuations in freight rates, particularly in the container liner business, due to significant structural imbalances between supply and demand. There is a substantial overcapacity in the larger vessel segments on Maersk Line's East-West trades. The risk is mitigated by designing a cost competitive network, building up customer loyalty, simplifying the organisation and building scalable platforms for systems, tools and processes. Further initiatives to optimise the network utilisation such as the P3 alliance are being pursued.
Overall risk trend: Stable
Maersk Oil Block 16 Offshore Angola In 2013 Maersk Oil drilled several exploration and appraisal wells in Block 16, the same acreage as the 2009 Chissonga discovery, which has developed into a key project for Maersk Oil. The field development plan for Chissonga was submitted to the Angolan authorities in August 2013.
A long term substantial drop in oil prices could make it difficult for Maersk Oil to generate the cash flow required to fund its investment programme. Also, the economic viability of major development projects could be challenged until the development costs have adapted to a lower oil price. Maersk Drilling could face difficulties negotiating day rates for their rig portfolio at a satisfactory level following a substantial drop in oil price. To mitigate this risk, Maersk Drilling has entered into long term contracts with oil majors with a stable need for high quality drilling rigs and Maersk Oil has a portfolio of mature fields with different oil price sensitivities and is carefully considering such sensitivities for every new project. Overall risk trend: Increasing
Exposure to oil spill is an inherent part of the Group's operations particularly in the oil and gas, offshore and tanker businesses. An increased focus on frontier exploration such as deep water operations and high temperature/high pressure (HT/HP) reservoirs combined with a high activity level in the industry has led to increased pressure on workforce and competencies. The Group is constantly engaged in numerous initiatives supporting incident free operations to mitigate this risk.
Overall risk trend: Stable
Today's technological interconnectivity provides tremendous opportunities for the Group but at the same time exposes it to a number of cyber related risks. As a Group involved in complex and wide ranging logistic operations, the Group is highly dependent on well-functioning IT systems. A successful cyber attack could cause prolonged disruption of operations for more of its core businesses. The Group is monitoring the cyber threat closely and to protect the businesses from cyber threats, actions to further enhance the cyber resilience and secure the business continuity are being progressed. Overall risk trend: Increasing
As an asset heavy company with investments lasting well beyond its strategy horizon of 3-5 years, the Group also looks into emerging risks to adjust its strategy and capital allocation on potential future risks and opportunities. During 2013, a study on shale oil and gas in the US and a study on structural changes in the demand for containerised transportation were completed.
| Maersk Line | APM Terminals | Maersk Oil | Maersk Drilling | |
|---|---|---|---|---|
| Maersk Line | 100% | -6% | 5% | -13% |
| APM Terminals | -6% | 100% | 0% | 11% |
| Maersk Oil | 5% | 0% | 100% | 23% |
| Maersk Drilling | -13% | 11% | 23% | 100% |
Business portfolio correlation matrix (NOPAT)
The correlation between business unit results is shown on a scale from -1 to 1. If the correlation is 0 it means that there is no relationship between the results of the relevant business units over the period (e.g. the results of Maersk Oil developed independently of those of APM Terminals and vice versa). If the correlation is positive, there is a positive relationship between the results of the relevant business units over the period, (e.g. when Maersk Oil did well then Maersk Drilling also did well and vice versa). If the correlation is negative, the results of the business units in question have developed oppositely over the period.
With activities spread across different businesses and more than 130 countries the Group also takes a view on risks associated with the composition of the businesses and countries in which it operates.
To establish the risk diversification and volatility in its business portfolio the Group looked at the results of its four core business units over 25 quarters from 2007 to 2013. By comparing the developments in the results, the following conclusions could be drawn:
Consequently, the Group's portfolio of businesses is well diversified with Maersk Line currently being the main contributor to the overall volatility in the results. This means that the portfolio is robust and well positioned to absorb shocks or volatility occurring within single businesses.
The Group has a well-balanced portfolio of countries hosting its major assets. There is currently a large spread in country risk exposure ranging from negligible to high with no large concentration of assets in individual highrisk countries. With approved investments up to 2016 the average exposure for each USD invested will remain moderate with a slight upward trend towards medium. As a result of those investments some concentration of assets in single high-risk countries is anticipated. However, the investments in those countries will be balanced by substantial investments in a number of low-risk countries forming part of OECD.
Impact of diversification (NOPAT volatility)
1The marginal risk contribution is the contribution by a particular business unit to the overall volatility in the Group's results. During the relevant period Maersk Line contributed 51% of the overall volatility in the Group's results, i.e. were Maersk Line not part of the portfolio the volatility in the Group's results over the period would have been 51% less.
The Group's shareholder base became more international during 2013 as European and North American investors increased holdings.
The total market value of the Group was DKK 251bn at the end of 2013. The B share reached its highest price in 2013 of DKK 59,000 on 30 December 2013 and its lowest price of DKK 39,960 on 17 April 2013. The price closed at DKK 58,850 at the end of 2013, corresponding to an increase of 38.1% compared to the end of 2012. The total shareholder return for the B share was 41.4% in 2013.
The Maersk B share outperformed its benchmarks MSCI Europe Transportation by 4.6% and the 40 largest Nordic companies by 18.4% during 2013. Maersk B underperformed benchmarks until the release of the Q2 report in August when especially Maersk Line's reported profit surprised the market.
Shareholders with more than 5% of share capital or votes hold 56.5% of the share capital. The free float base of 43.5% became more international as European inves-
Shareholders according to the Danish Companies Act § 55 are
| Share capital | Votes | |
|---|---|---|
| A. P. Møller Holding A/S, Copenhagen, Denmark |
41.51% | 51.09% |
| A.P. Møller og Hustru Chastine Mc-Kinney Møllers Familiefond, Copenhagen, Denmark |
8.37% | 12.84% |
| The Estate of Mærsk Mc-Kinney Møller, Copenhagen, Denmark |
3.69% | 6.43% |
| Den A.P. Møllerske Støttefond, Copenhagen, Denmark |
2.94% | 5.86% |
tors increased their holdings by 17% and North American investors by 7%. The shareholder base became more concentrated as the number of registered shareholders declined by 10,000 to around 66,000 shareholders at the end of 2013.
The shares are listed on NASDAQ OMX Copenhagen and are divided into two classes: A shares with voting rights and B shares without voting rights. Each DKK 1,000 A share entitles the holder to two votes.
The total share capital of DKK 4,395.6m consists of 4,395,600 shares equally split between A and B shares.
The Group's holding of own shares comprises 0.6% of the share capital and is, among other purposes, held to cover the share option programme, cf. note 13 to the consolidated financial statements. According to the
Source: Factset, numbers are rebased.
| The Maersk share: Key figures | 2013 | 2012 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|
| Year-end share price (DKK, B share) | 58,850 | 42,600 | 37,920 | 50,510 | 36,600 |
| Share price range (DKK, B share) | 19,040 | 12,820 | 21,670 | 14,920 | 17,100 |
| Market capitalisation at year-end (DKK billion, A and B share) | 251 | 180 | 161 | 217 | 157 |
| Earnings per share (DKK) | 4,438 | 4,964 | 3,479 | 6,061 | -1,674 |
| Dividend per share (DKK, A and B share) | 1,400 | 1,200 | 1,000 | 1,000 | 325 |
| Dividend yield (%, B share) | 2.4% | 2.8% | 2.6% | 2.0% | 0.9% |
| Total dividend (DKK million, A and B share) | 6,154 | 5,275 | 4,396 | 4,396 | 1,429 |
| Total shareholder return (%, B share) | 41.4% | 15.5% | -22.9% | 40.7% | 31.4% |
authorisation of the Annual General Meeting, the Board of Directors may in the period up to and including 3 April 2016 allow the Company to acquire own shares up to a holding of 10% of the Company's share capital. The purchase price may not deviate by more than 10% from the price quoted on NASDAQ OMX Copenhagen at the time of purchase.
The Board of Directors proposes a dividend to the shareholders of DKK 1,400 per share of DKK 1,000 – a total of DKK 6,154m (DKK 1,200 per share of DKK 1,000 – a total of DKK 5,275m). The proposed dividend payment represents a dividend yield of 2.4% (2.8%), based on the Maersk B share's closing price as of 30 December 2013. Payment is expected to take place on 4 April 2014. The Group intends to continue the historical trend of increasing dividends nominally per share supported by underlying earnings strength.
| 31 March | Annual General Meeting |
|---|---|
| 21 May | Interim Report 1st Quarter |
| 19 August | Interim Report 2nd Quarter |
| 24 September | Capital Markets Day |
| 11 November | Interim Report 3rd Quarter |
The Annual General Meeting will be held on 31 March 2014 in Copenhagen, Denmark.
The Group continues to develop the Company's level of information and ensures a consistent, regular and relevant flow of information on the Group's activities, business objectives, strategies and results. The Group's second Capital Markets Day was held in September 2013. To ensure a regular and open dialogue with investors and analysts, the management hosts teleconferences in connection with the presentation of the annual and interim reports and visits investors in Europe and the USA.
The Group is covered by around 30 analysts, predominantly from international investment banks, who regularly publish research reports. A list of the analysts and other relevant information, including financial reports, investor presentations, share and bond information, is available on http://investor.maersk.com. Investors and analysts are welcome to contact the Investor Relations office for further information.
Capital Markets Day Copenhagen Denmark
Maersk Line and Maersk Drilling made a presentation at the Group's second Capital Markets Day in September 2013. With more than 300 analysts and investors attending, this was once again the highest attendance for a Capital Markets Day in Denmark.
Corporate governance is a matter that A.P. Møller - Mærsk A/S' Board of Directors continuously considers on the basis of the Company's activities, external environment, history and needs etc.
As a Danish listed company, A.P. Møller - Mærsk A/S must comply with or explain deviations from the "Recommendations for Corporate Governance" (Anbefalinger for god selskabsledelse) implemented by NASDAQ OMX Copenhagen in the Rules for issuers of shares (Regler for udstedere af aktier) and Section 107b of the Danish Financial Statements Act (Årsregnskabsloven).
The Board of Directors of A.P. Møller - Mærsk A/S has prepared a statement on corporate governance for the financial year 2013. The statement can be reviewed and downloaded via http://investor.maersk.com/governancestatement.cfm
The statement includes a description of the Company's approach to each of the recommendations in the "Recommendations for Corporate Governance" as well as a description of the Company's management structure and the main elements of the Group's internal control and risk management systems related to the Group's financial reporting process.
A.P. Møller - Mærsk A/S has a two-tier management structure consisting of the Board of Directors and the Executive Board (Management), as illustrated below. The Board of Directors lays down the general business and management principles for the Group and ensures the proper organisation of the Group. Furthermore, the Board of Directors decides the strategy and the risk policies and supervises the performance of the
Until 1 January 2013, the registered management of A.P. Møller - Mærsk A/S consisted of Firmaet A.P. Møller. On this date, Firmaet A.P. Møller stepped down as registered management and the members of the Executive Board, Nils S. Andersen, Kim Fejfer, Claus V. Hemmingsen, Søren Skou, Jakob Thomasen and Trond Westlie became registered as Management of A.P. Møller - Mærsk A/S. Further information is available in the statement on corporate governance for 2013.
Framework for corporate governance
(In parenthesis the corresponding figures for 2012)
| Note | 2013 | 2012 | ||
|---|---|---|---|---|
| 1 | Revenue | 266,236 | 286,753 | |
| 2 | Operating costs, etc. | 203,733 | 221,095 | |
| Other income | 1,609 | 2,707 | ||
| Other costs | 219 | 13 | ||
| Profit before depreciation, amortisation and impairment losses, etc. | 63,893 | 68,352 | ||
| 6,7 | Depreciation, amortisation and impairment losses | 26,007 | 29,346 | |
| 3 | Gain on sale of non-current assets, etc., net | 814 | 3,532 | |
| 8 | Share of profit/loss in joint ventures | 854 | 754 | |
| 8 | Share of profit/loss in associated companies | 1,660 | 1,286 | |
| Profit before financial items | 41,214 | 44,578 | ||
| 4 | Financial income | 3,151 | 3,490 | |
| 4 | Financial expenses | 7,172 | 8,005 | |
| Profit before tax | 37,193 | 40,063 | ||
| 5 | Tax | 18,186 | 18,315 | |
| Profit for the year – continuing operations | 19,007 | 21,748 | ||
| 12 | Profit for the year – discontinued operations | 2,216 | 1,649 | |
| Profit for the year | 21,223 | 23,397 | ||
| Of which: | ||||
| Non-controlling interests | 1,841 | 1,724 | ||
| A.P. Møller - Mærsk A/S' share | 19,382 | 21,673 | ||
| 13 | Earnings per share of continuing operations, DKK | 4,142 | 4,755 | |
| 13 | Diluted earnings per share of continuing operations, DKK | 4,141 | 4,753 | |
| 13 | Earnings per share, DKK | 4,438 | 4,964 | |
| 13 | Diluted earnings per share, DKK | 4,437 | 4,962 | |
| Note | 2013 | 2012 | |
|---|---|---|---|
| Profit for the year | 21,223 | 23,397 | |
| Items that are or may be reclassified subsequently to the income statement | |||
| Translation from functional currency to presentation currency: | |||
| Translation impact arising during the year | -8,584 | -2,347 | |
| Reclassified to income statement, gain on sale of non-current assets, etc., net | 4 | -280 | |
| Other equity investments: | |||
| Fair value adjustment for the year | 22 | 27 | |
| Reclassified to income statement, gain on sale of non-current assets, etc., net | -15 | -3 | |
| 19 | Cash flow hedges: | ||
| Value adjustment of hedges for the year | 579 | -35 | |
| Reclassified to income statement: | |||
| – revenue | -73 | -17 | |
| – operating costs | -147 | 331 | |
| – financial expenses | 413 | 753 | |
| Reclassified to cost of property, plant and equipment | -32 | 43 | |
| 5 | Tax on other comprehensive income | -183 | -74 |
| Share of other comprehensive income of joint ventures, net of tax | 65 | 6 | |
| Share of other comprehensive income of associated companies, net of tax | -36 | 133 | |
| Total items that are or may be reclassified subsequently to the income statement | -7,987 | -1,463 | |
| Items that will not be reclassified to the income statement | |||
| 16 | Actuarial gains/losses on defined benefit plans, etc. | 322 | -253 |
| 5 | Tax on other comprehensive income | -38 | -16 |
| Total items that will not be reclassified to the income statement | 284 | -269 | |
| Other comprehensive income for the year, net of tax | -7,703 | -1,732 | |
| Total comprehensive income for the year | 13,520 | 21,665 | |
| Of which: | |||
| Non-controlling interests | 1,685 | 1,688 | |
| A.P. Møller - Mærsk A/S' share | 11,835 | 19,977 | |
| 31 December | 1 January | ||||
|---|---|---|---|---|---|
| Note | 2013 | 2012 | 2012 | ||
| 6 | Intangible assets | 25,915 | 27,953 | 26,431 | |
| Ships, rigs, containers, etc. | 150,775 | 168,549 | 165,273 | ||
| Production facilities and equipment, etc. | 33,258 | 31,005 | 33,330 | ||
| Land and buildings | 3,899 | 20,319 | 22,565 | ||
| Construction work in progress and payment on account | 35,575 | 28,247 | 23,204 | ||
| 7 | Property, plant and equipment | 223,507 | 248,120 | 244,372 | |
| 8 | Investments in joint ventures | 10,744 | 11,381 | 6,908 | |
| 8 | Investments in associated companies | 34,828 | 35,539 | 32,464 | |
| Other equity investments | 387 | 425 | 485 | ||
| 19 | Derivatives | 1,364 | 1,249 | 814 | |
| 16 | Pensions, net assets | 358 | 193 | 87 | |
| 9 | Other receivables | 4,401 | 4,920 | 4,198 | |
| Financial non-current assets | 52,082 | 53,707 | 44,956 | ||
| 10 | Deferred tax | 2,589 | 3,292 | 4,485 | |
| Total non-current assets | 304,093 | 333,072 | 320,244 | ||
| 11 | Inventories | 6,773 | 12,869 | 12,719 | |
| Trade receivables | 25,048 | 30,273 | 25,115 | ||
| Tax receivables | 1,150 | 2,273 | 1,343 | ||
| 19 | Derivatives | 948 | 621 | 468 | |
| 9 | Other receivables | 5,863 | 11,206 | 10,268 | |
| Prepayments | 2,620 | 2,509 | 2,295 | ||
| Receivables, etc. | 35,629 | 46,882 | 39,489 | ||
| Securities | 1,687 | 2,160 | 2,151 | ||
| Cash and bank balances | 17,640 | 11,670 | 12,013 | ||
| 12 | Assets held for sale | 37,474 | 3,045 | 9,737 | |
| Total current assets | 99,203 | 76,626 | 76,109 | ||
| Total assets | 403,296 | 409,698 | 396,353 | ||
| 31 December | 1 January | |||
|---|---|---|---|---|
| Note | 2013 | 2012 | 2012 | |
| 13 | Share capital | 4,396 | 4,396 | 4,396 |
| Reserves | 205,032 | 199,129 | 185,365 | |
| Proposed dividend for distribution | 6,154 | 5,275 | 4,396 | |
| Equity attributable to A.P. Møller - Mærsk A/S | 215,582 | 208,800 | 194,157 | |
| Non-controlling interests | 14,526 | 13,739 | 13,771 | |
| Total equity | 230,108 | 222,539 | 207,928 | |
| 15 | Borrowings, non-current | 68,753 | 91,000 | 90,929 |
| 16 | Pensions and similar obligations | 1,768 | 2,531 | 2,546 |
| 17 | Provisions | 22,673 | 19,288 | 18,384 |
| 19 | Derivatives | 686 | 1,310 | 2,340 |
| 10 | Deferred tax | 6,007 | 6,503 | 5,693 |
| 18 | Other payables | 117 | 248 | 340 |
| Other non-current liabilities | 31,251 | 29,880 | 29,303 | |
| Total non-current liabilities | 100,004 | 120,880 | 120,232 | |
| 15 | Borrowings, current | 16,461 | 11,977 | 11,975 |
| 17 | Provisions | 3,980 | 3,583 | 2,921 |
| Trade payables | 29,124 | 34,730 | 36,742 | |
| Tax payables | 2,824 | 2,639 | 3,429 | |
| 19 | Derivatives | 945 | 541 | 2,136 |
| 18 | Other payables | 6,966 | 8,750 | 8,853 |
| Deferred income | 1,356 | 3,984 | 701 | |
| Other current liabilities | 45,195 | 54,227 | 54,782 | |
| 12 | Liabilities associated with assets held for sale | 11,528 | 75 | 1,436 |
| Total current liabilities | 73,184 | 66,279 | 68,193 | |
| Total liabilities | 173,188 | 187,159 | 188,425 | |
| Total equity and liabilities | 403,296 | 409,698 | 396,353 |
| Note | 2013 | 2012 | |
|---|---|---|---|
| Profit before financial items | 41,214 | 44,578 | |
| 6,7 | Depreciation, amortisation and impairment losses | 26,007 | 29,346 |
| 3 | Gain on sale of non-current assets, etc., net | -776 | -3,500 |
| Share of profit/loss in joint ventures | -854 | -754 | |
| Share of profit/loss in associated companies | -1,660 | -1,286 | |
| 24 | Change in working capital | 1,416 | -4,422 |
| Change in provisions and pension obligations, etc. | 1,863 | 552 | |
| 24 | Other non-cash items | 495 | 538 |
| Cash flow from operating activities before financial items and tax | 67,705 | 65,052 | |
| Dividends received | 1,514 | 1,201 | |
| Financial income received | 437 | 506 | |
| Financial expenses paid | -3,741 | -5,265 | |
| Taxes paid | -15,859 | -20,698 | |
| Cash flow from operating activities | 50,056 | 40,796 | |
| 24 | Purchase of intangible assets and property, plant and equipment | -35,178 | -43,608 |
| Sale of intangible assets and property, plant and equipment | 5,877 | 9,715 | |
| 25 | Acquisition of subsidiaries and activities | -111 | -1,668 |
| 25 | Sale of subsidiaries and activities | 152 | 8,879 |
| 24 | Other financial investments | 1,835 | -7,048 |
| Cash flow used for capital expenditure | -27,425 | -33,730 | |
| Purchase/sale of securities, trading portfolio | -145 | -66 | |
| Cash flow used for investing activities | -27,570 | -33,796 | |
| Repayment of borrowings | -14,424 | -23,689 | |
| Proceeds from borrowings | 5,518 | 21,805 | |
| Dividends distributed | -5,241 | -4,366 | |
| Dividends distributed to non-controlling interests | -755 | -1,109 | |
| Acquisition of non-controlling interests | -15 | -1,191 | |
| Other equity transactions | 105 | 570 | |
| Cash flow from financing activities | -14,812 | -7,980 | |
| Net cash flow from continuing activities | 7,674 | -980 | |
| 12 | Net cash flow from discontinued operations | 473 | -153 |
| Net cash flow for the year | 8,147 | -1,133 | |
| Cash and cash equivalents 1 January | 10,758 | 11,726 | |
| Currency translation effect on cash and cash equivalents | -729 | 165 | |
| Cash and cash equivalents 31 December | 18,176 | 10,758 | |
| Of which classified as assets held for sale | -1,086 | - | |
| Cash and cash equivalents 31 December | 17,090 | 10,758 | |
| Cash and cash equivalents | |||
| Cash and bank balances | 17,640 | 11,670 | |
| Overdrafts | 550 | 912 | |
| Cash and cash equivalents 31 December | 17,090 | 10,758 | |
Cash and cash equivalents include DKK 6.4bn (DKK 7.0bn) that relates to cash and cash equivalents in countries with exchange control or other restrictions. These funds are not readily available for general use by the parent company or other subsidiaries.
| Equity 1 January 2013 Translation from functional currency to presentation currency Other equity investments Cash flow hedges Share of other comprehensive income of joint ventures, net of tax Share of other comprehensive income of associated companies, net of tax |
Share capital 4,396 - - - - |
Trans- lation reserve -5,633 -8,409 - - - |
Reserve for other equity invest- ments 84 -4 7 - - |
hedges -665 5 - 730 - |
Reserve Retained Proposed for earnings 205,343 - - - 65 |
dividend for distri- bution 5,275 - - - |
Total 208,800 -8,408 7 730 |
Non- control- ling inter ests 13,739 -172 - 10 |
Total equity |
|---|---|---|---|---|---|---|---|---|---|
| 222,539 -8,580 7 740 |
|||||||||
| - | 65 | - | 65 | ||||||
| - | - | - | - | -36 | - | -36 | - | -36 | |
| Actuarial gains/losses on defined | |||||||||
| benefit plans, etc. | - | - | - | - | 310 | - | 310 | 12 | 322 |
| Tax on other comprehensive income | - | - | - | -182 | -33 | - | -215 | -6 | -221 |
| Other comprehensive income, | |||||||||
| net of tax | - | -8,409 | 3 | 553 | 306 | - | -7,547 | -156 | -7,703 |
| Profit for the year | - | - | - | - | 13,228 | 6,154 | 19,382 | 1,841 | 21,223 |
| Total comprehensive income | |||||||||
| 13,520 | |||||||||
| -6,192 | |||||||||
| 34 | |||||||||
| 78 | |||||||||
| 17 | |||||||||
| 112 | |||||||||
| -5,951 | |||||||||
| for the year Dividends to shareholders Value of granted and sold share options Sale of own shares Capital increases and decreases Tax on transactions Total transactions with shareholders |
- - - - - - - |
-8,409 - - - - - - |
3 - - - - - - |
553 - - - - - - |
13,534 34 34 78 - 76 222 |
6,154 -5,275 - - - - -5,275 |
11,835 -5,241 34 78 - 76 -5,053 |
1,685 -951 - - 17 36 -898 |
| 2012 | A.P. Møller - Mærsk A/S | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Note | Share capital |
Trans- lation reserve |
Reserve for other equity invest- ments |
hedges | Reserve Retained Proposed for earnings |
dividend for distri- bution |
Total | Non- control- ling inter ests |
Total equity |
||
| Balance at 31 December 2011 Impact of changes in |
4,396 | -3,007 | 65 | -1,713 | 190,020 | 4,396 | 194,157 | 13,778 | 207,935 | ||
| accounting policies | - | - | - | - | - | - | - | -7 | -7 | ||
| Restated balance at 1 January 2012 4,396 | -3,007 | 65 | -1,713 | 190,020 | 4,396 | 194,157 | 13,771 | 207,928 | |||
| Translation from functional currency to presentation currency |
- | -2,626 | -2 | 1 | - | - | -2,627 | - | -2,627 | ||
| Other equity investments | - | - | 21 | - | - | - | 21 | 3 | 24 | ||
| Cash flow hedges Share of other comprehensive income of joint ventures, |
- | - | - | 1,097 | - | - | 1,097 | -22 | 1,075 | ||
| net of tax Share of other comprehensive income of associated companies, |
- | - | - | - | 6 | - | 6 | - | 6 | ||
| net of tax Actuarial gains/losses on defined |
- | - | - | - | 133 | - | 133 | - | 133 | ||
| benefit plans, etc. | - | - | - | - | -231 | - | -231 | -22 | -253 | ||
| 5 | Tax on other comprehensive income | - | - | - | -50 | -45 | - | -95 | 5 | -90 | |
| Other comprehensive income, net of tax |
- | -2,626 | 19 | 1,048 | -137 | - | -1,696 | -36 | -1,732 | ||
| Profit for the year | - | - | - | - | 16,398 | 5,275 | 21,673 | 1,724 | 23,397 | ||
| Total comprehensive income | |||||||||||
| for the year | - | -2,626 | 19 | 1,048 | 16,261 | 5,275 | 19,977 | 1,688 | 21,665 | ||
| 14 | Dividends to shareholders Value of granted and sold |
- | - | - | - | 30 | -4,396 | -4,366 | -1,109 | -5,475 | |
| share options Acquisition of non-controlling |
- | - | - | - | 43 | - | 43 | - | 43 | ||
| interests1 | - | - | - | - | -1,029 | - | -1,029 | -640 | -1,669 | ||
| Sale of own shares | - | - | - | - | 18 | - | 18 | - | 18 | ||
| Capital increases and decreases | - | - | - | - | - | - | - | 85 | 85 | ||
| Tax on transactions | - | - | - | - | - | - | - | -29 | -29 | ||
| Other equity movements | - | - | - | - | - | - | - | -27 | -27 | ||
| Total transactions with shareholders |
- | - | - | - | -938 | -4,396 | -5,334 | -1,720 | -7,054 | ||
| Equity 31 December 2012 | 4,396 | -5,633 | 84 | -665 | 205,343 | 5,275 | 208,800 | 13,739 | 222,539 |
1 Acquisition of non-controlling interests primarily relates to the acquisition of additional shares in APM Terminals Apapa Ltd. and OHG Netto Supermarkt GmbH & Co. After the acquisitions, the Group's ownership percentages amount to 94% and 100%, respectively.
| Contents | Page | ||
|---|---|---|---|
| 1 | Segment information | 80 | |
| 2 | Operating costs | 87 | |
| 3 | Gain on sale of non-current assets, etc., net | 89 | |
| 4 | Financial income and expenses | 90 | |
| 5 | Tax | 91 | |
| 6 | Intangible assets | 92 | |
| 7 | Property, plant and equipment | 94 | |
| 8 | Investments in joint ventures and associated companies | 96 | |
| 9 | Other receivables | 98 | |
| 10 | Deferred tax | 99 | |
| 11 | Inventories | 100 | |
| 12 | Discontinued operations and assets held for sale | 101 | |
| 13 | Share capital and earnings per share | 102 | |
| 14 | Share-based payment | 104 | |
| 15 | Borrowings | 106 | |
| 16 | Pensions and similar obligations | 107 | |
| 17 | Provisions | 110 | |
| 18 | Other payables | 111 | |
| 19 | Derivatives | 112 | |
| 20 | Financial instruments by category | 114 | |
| 21 | Financial risks | 116 | |
| 22 | Commitments | 121 | |
| 23 | Contingent liabilities | 123 | |
| 24 | Cash flow specifications | 124 | |
| 25 | Acquisition/sale of subsidiaries and activities | 125 | |
| 26 | Related parties | 127 | |
| 27 | Accounting policies | 129 | |
| 28 | Significant accounting estimates and judgements | 135 | |
| 29 | New financial reporting requirements | 138 | |
| 30 | Subsequent events | 138 | |
| 31 | Effect of changes in accounting policy on consolidated balance sheet | 139 | |
| 32 | Joint operations | 141 |
| Maersk Line |
Maersk Oil |
|
|---|---|---|
| 2013 External revenue |
144,320 | 51,362 |
| Inter-segment revenue | 2,864 | 2 |
| Total revenue | 147,184 | 51,364 |
| Profit before depreciation, amortisation and impairment losses, etc. | 18,615 | 32,363 |
| Depreciation and amortisation | 10,054 | 8,830 |
| Impairment losses | 56 | 549 |
| Reversal of impairment losses | 110 | - |
| Gain on sale of non-current assets, etc., net | 215 | 2 |
| Share of profit/loss in joint ventures | - | - |
| Share of profit/loss in associated companies | -2 | -234 |
| Profit/loss before financial items (EBIT) | 8,828 | 22,752 |
| Tax | 345 | 16,877 |
| Net operating profit/loss after tax (NOPAT) | 8,483 | 5,875 |
| Cash flow from operating activities | 20,968 | 18,233 |
| Cash flow used for capital expenditure | -9,031 | -10,111 |
| Free cash flow | 11,937 | 8,122 |
| Investments in non-current assets1 | 9,713 | 13,565 |
| Intangibles assets | 4 | 16,756 |
| Property, plant and equipment | 115,943 | 35,442 |
| Investments in joint ventures | - | - |
| Investments in associated companies | 8 | 1,068 |
| Other non-current assets | 603 | 3,267 |
| Assets held for sale | - | - |
| Other current assets | 15,974 | 8,117 |
| Total assets | 132,532 | 64,650 |
| Non-interest bearing liabilities | 24,027 | 29,588 |
| Invested capital, net | 108,505 | 35,062 |
1 Comprise additions of intangible assets and property, plant and equipment,
including additions from business combinations.
| Total reportable segments |
Svitzer | Damco | Maersk Tankers |
Maersk Supply Service |
Maersk Drilling |
APM Terminals |
|---|---|---|---|---|---|---|
| 258,770 | 4,553 | 18,049 | 9,126 | 5,102 | 11,078 | 15,180 |
| 12,270 271,040 |
118 4,671 |
- 18,049 |
6 9,132 |
120 5,222 |
-1 11,077 |
9,161 24,341 |
| 64,173 | 1,218 | -367 | 120 | 2,365 | 4,847 | 5,012 |
| 24,574 | 476 | 158 | 1,097 | 956 | 1,339 | 1,664 |
| 1,969 | 36 | 33 | 1,292 | - | - | 3 |
| 544 | - | - | 431 | - | - | 3 |
| 879 | 164 | 12 | 45 | 28 | 20 | 393 |
| 792 | 124 | 45 | -1 | -3 | 107 | 520 |
| 147 | - | - | 2 | - | - | 381 |
| 39,992 | 994 | -501 | -1,792 | 1,434 | 3,635 | 4,642 |
| 18,548 | 116 | 125 | -11 | 111 | 670 | 315 |
| 21,444 | 878 | -626 | -1,781 | 1,323 | 2,965 | 4,327 |
| 53,376 | 1,011 | -81 | 1,253 | 2,448 | 4,358 | 5,186 |
| -29,115 | -12 | -127 | 4,201 | -787 | -8,525 | -4,723 |
| 24,261 | 999 | -208 | 5,454 | 1,661 | -4,167 | 463 |
| 38,292 | 455 | 163 | 106 | 848 | 8,368 | 5,074 |
| 25,899 | 1,988 | 1,046 | 25 | 33 | 103 | 5,944 |
| 221,325 | 5,242 | 487 | 7,794 | 11,647 | 29,549 | 15,221 |
| 10,642 | 357 | 158 | 23 | - | 860 | 9,244 |
| 3,767 5,749 |
- 231 |
1 246 |
28 5 |
- 20 |
- 357 |
2,662 1,020 |
| 6,354 | - | 29 | 5,304 | - | - | 1,021 |
| 40,074 | 1,045 | 4,321 | 2,062 | 1,190 | 2,792 | 4,573 |
| 313,810 | 8,863 | 6,288 | 15,241 | 12,890 | 33,661 | 39,685 |
| 74,232 | 1,485 | 4,056 | 2,604 | 1,354 | 4,867 | 6,251 |
| 239,578 | 7,378 | 2,232 | 12,637 | 11,536 | 28,794 | 33,434 |
| Maersk Line |
Maersk Oil |
|
|---|---|---|
| 2012 | ||
| External revenue | 153,495 | 58,833 |
| Inter-segment revenue | 3,624 | - |
| Total revenue | 157,119 | 58,833 |
| Profit before depreciation, amortisation and impairment losses, etc. | 12,627 | 41,463 |
| Depreciation and amortisation | 9,835 | 10,812 |
| Impairment losses | 467 | 169 |
| Reversal of impairment losses | 579 | - |
| Gain on sale of non-current assets, etc., net | 133 | 632 |
| Share of profit/loss in joint ventures | - | - |
| Share of profit/loss in associated companies | 6 | -243 |
| Profit/loss before financial items (EBIT) | 3,043 | 30,871 |
| Tax | 372 | 16,707 |
| Net operating profit/loss after tax (NOPAT) | 2,671 | 14,164 |
| Cash flow from operating activities | 10,384 | 22,347 |
| Cash flow used for capital expenditure | -20,566 | -11,352 |
| Free cash flow | -10,182 | 10,995 |
| Investments in non-current assets1 | 19,577 | 11,484 |
| Intangibles assets | 18 | 17,806 |
| Property, plant and equipment | 122,048 | 32,552 |
| Investments in joint ventures | - | - |
| Investments in associated companies | 17 | 1,114 |
| Other non-current assets | 414 | 2,985 |
| Assets held for sale | - | - |
| Other current assets | 21,437 | 11,645 |
| Total assets | 143,934 | 66,102 |
| Non-interest bearing liabilities | 27,084 | 26,943 |
| Invested capital, net | 116,850 | 39,159 |
1 Comprise additions of intangible assets and property, plant and equipment, including additions from business combinations.
Maersk Oil's profit for the period included a tax income of DKK 5.2bn from the settlement of a dispute regarding tax collected by the Algerian national oil company, Sonatrach S.P.A. The settlement related to Algerian tax imposed from August 2006.
| APM Terminals |
Maersk Drilling |
Maersk Supply Service |
Maersk Tankers |
Damco | Svitzer | Total reportable segments |
|---|---|---|---|---|---|---|
| 14,674 | 9,688 | 4,941 | 11,329 | 17,314 | 4,643 | 274,917 |
| 9,696 | 61 | 139 | 125 | 1,395 | 111 | 15,151 |
| 24,370 | 9,749 | 5,080 | 11,454 | 18,709 | 4,754 | 290,068 |
| 5,047 | 3,695 | 1,848 | 1,243 | 526 | 1,294 | 67,743 |
| 1,642 | 1,142 | 964 | 1,557 | 133 | 535 | 26,620 |
| - | - | 39 | 1,554 | 14 | 630 | 2,873 |
| - | - | - | - | - | - | 579 |
| 676 | 2 | -21 | 46 | 109 | 22 | 1,599 |
| 579 | 2 | - | 6 | 37 | 111 | 735 |
| 344 | - | - | 2 | - | - | 109 |
| 5,004 | 2,557 | 824 | -1,814 | 525 | 262 | 41,272 |
| 939 | 545 | 59 | 11 | 205 | 219 | 19,057 |
| 4,065 | 2,012 | 765 | -1,825 | 320 | 43 | 22,215 |
| 5,271 | 3,459 | 1,767 | 726 | -591 | 1,395 | 44,758 |
| -7,514 | -3,216 | -1,242 | -2,669 | -118 | -595 | -47,272 |
| -2,243 | 243 | 525 | -1,943 | -709 | 800 | -2,514 |
| 5,155 | 3,619 | 1,329 | 2,901 | 572 | 752 | 45,389 |
| 5,236 | 2 | 8 | 41 | 1,173 | 2,417 | 26,701 |
| 14,612 | 23,533 | 12,372 | 17,182 | 537 | 5,857 | 228,693 |
| 9,792 | 902 | - | 7 | 149 | 429 | 11,279 |
| 2,705 | 1 | - | 34 | 1 | - | 3,872 |
| 966 | 227 | 19 | 3 | 232 | 325 | 5,171 |
| 321 | - | 21 | 2,644 | 20 | 31 | 3,037 |
| 3,577 | 3,014 | 1,389 | 2,522 | 4,533 | 966 | 49,083 |
| 37,209 | 27,679 | 13,809 | 22,433 | 6,645 | 10,025 | 327,836 |
| 6,112 | 3,443 | 1,322 | 1,872 | 3,750 | 1,563 | 72,089 |
| 31,097 | 24,236 | 12,487 | 20,561 | 2,895 | 8,462 | 255,747 |
| 2013 | 2012 | |
|---|---|---|
| Revenue | ||
| Reportable segments | 271,040 | 290,068 |
| Other businesses | 7,407 | 13,099 |
| Unallocated activities (Maersk Oil Trading) | 2,476 | 4,717 |
| Eliminations | -14,687 | -21,131 |
| Total | 266,236 | 286,753 |
| Of which: | ||
| Sale of goods including sale of oil and gas | 55,340 | 65,871 |
| Rendering of services, etc. | 210,896 | 220,882 |
| Profit for the year | ||
| Reportable segments | 21,444 | 22,215 |
| Other businesses 1 | 1,980 | 3,728 |
| Financial items, net | -4,021 | -4,515 |
| Unallocated tax | +490 | +736 |
| Other unallocated items | 812 | 425 |
| Eliminations | -74 | 9 |
| Total continuing operations | 19,007 | 21,748 |
| Discontinued operations, after eliminations | 2,216 | 1,649 |
| Total | 21,223 | 23,397 |
| Assets | ||
| Reportable segments | 313,810 | 327,836 |
| Other businesses | 37,073 | 38,100 |
| Unallocated activities | 31,176 | 22,669 |
| Dansk Supermarked Group | 30,712 | 28,589 |
| Eliminations | -9,475 | -7,496 |
| Total | 403,296 | 409,698 |
| Liabilities | ||
| Reportable segments | 74,232 | 72,089 |
| Other businesses | 2,416 | 3,637 |
| Unallocated activities | 93,582 | 107,133 |
| Dansk Supermarked Group | 11,366 | 10,839 |
| Eliminations | -8,408 | -6,539 |
| Total | 173,188 | 187,159 |
12012 included gain on sale of non-current assets, etc., of DKK 1,419m in Maersk FPSOs and Maersk LNG.
Amounts in DKK million
APM Terminals and Maersk Line have entered into a commercial agreement whereby Maersk Line is secured dedicated capacity in certain strategically important terminals. Under the terms of the agreement, substantially all of the risks and benefits associated with ownership of these terminals are transferred to Maersk Line. Management has chosen not to apply finance lease accounting for the internal reporting and accordingly these terminals are still reported as part of APM Terminals in the segment information.
The effect for APM Terminals is an increase of USD 70m in revenue and USD 42m in EBIT excluding any gains or losses in connection with the de-recognition of non-current assets. Maersk Line is affected by the same amount on cost and EBIT.
The agreement has no effect on the Group as the transactions are eliminated in the consolidation.
Revenue for the shipping activities is based on the destination for ships operated by the Group and on customer location for ships on time charter. The majority of the Group's ships, drilling rigs and containers are registered in Denmark, Singapore, United Kingdom and the USA. These types of assets are allocated to countries based on legal ownership.
| External revenue | Tax paid | Non-current assets1 | |||||
|---|---|---|---|---|---|---|---|
| Geographical split | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| Denmark | 19,468 | 25,202 | 6,280 | 8,745 | 86,170 | 104,089 | |
| Algeria | 7,412 | 7,492 | 681 | 1,194 | 3,056 | 3,155 | |
| Brazil | 7,748 | 8,147 | 188 | 289 | 14,150 | 15,067 | |
| China and Hong Kong | 11,662 | 11,204 | 127 | 197 | 19,566 | 19,104 | |
| Qatar | 22,435 | 24,827 | 8,129 | 8,629 | 3,400 | 5,161 | |
| Singapore | 2,573 | 2,450 | 81 | -3 | 37,078 | 51,438 | |
| United Kingdom | 16,800 | 17,312 | 93 | 400 | 25,350 | 26,128 | |
| USA | 29,071 | 32,480 | -33 | 465 | 15,988 | 11,248 | |
| Other | 149,067 | 157,639 | 313 | 782 | 44,664 | 40,683 | |
| Total | 266,236 | 286,753 | 15,859 | 20,698 | 249,422 | 276,073 |
1Comprise intangible assets and property, plant and equipment.
| Exploration activities (Maersk Oil) | 2013 | 2012 |
|---|---|---|
| Income | 90 | 735 |
| Exploration costs | 6,454 | 6,302 |
| Depreciation, amortisation and impairment losses, net | 672 | 735 |
| Exploration expenses, net | 7,036 | 6,302 |
| Intangible assets 1 | 13,596 | 16,168 |
| Total assets | 22,133 | 30,642 |
| Total liabilities | 3,496 | 2,254 |
| Cash flow from operating activities | -3,559 | -5,074 |
| Cash flow used for capital expenditure | -1,022 | -2,768 |
| Free cash flow | -4,581 | -7,842 |
1Comprise mainly oil rights.
The exploration activities include Maersk Oil's income, expenses, assets, liabilities and cash flows related to exploration for and evaluation of oil and gas resources. Activities in the subsequent development phases are not included. The income relates primarily to farm-out agreements.
Amounts in DKK million
| 2013 | 2012 | |
|---|---|---|
| Costs of goods sold | 3,089 | 4,551 |
| Bunker costs | 33,095 | 39,976 |
| Terminal costs | 25,311 | 26,089 |
| Intermodal costs | 17,450 | 19,999 |
| Port costs | 10,796 | 10,845 |
| Rent and lease costs | 17,958 | 20,862 |
| Exploration costs | 6,454 | 6,302 |
| Staff costs | 31,608 | 31,690 |
| Integration and restructuring costs | 612 | 495 |
| Other | 57,360 | 60,286 |
| Total operating costs | 203,733 | 221,095 |
| Remuneration of employees | ||
| Wages and salaries | 28,420 | 28,220 |
| Severance payments | 746 | 518 |
| Pension costs, defined benefit plans | 244 | 233 |
| Pension costs, defined contribution plans | 1,878 | 2,157 |
| Other social security costs | 2,028 | 1,908 |
| Total remuneration | 33,316 | 33,036 |
| Of which: | ||
| Recognised in the cost of assets | 487 | 320 |
| Included in exploration costs | 664 | 590 |
| Included in integration and restructuring costs | 557 | 436 |
| Expensed as staff costs | 31,608 | 31,690 |
| Average number of employees in continuing operations | 88,909 | 89,569 |
Rent and lease costs include contingent rent totalling DKK 1.2bn (DKK 844m), which entirely relates to operating leases.
Customary agreements have been entered into with employees regarding compensation in connection with resignation with consideration for local legislation and collective agreements.
For information about share-based payment reference is made to note 14.
Amounts in DKK million
Contracts of employment for the Executive Board contain terms customary in Danish listed companies, including termination notice and competition clauses. In connection with a possible takeover offer, neither the Executive Board nor the Board of Directors will receive special remuneration.
The Board of Directors has received fees of DKK 20m (DKK 19m).
As at 1 January 2013, management has changed from Firmaet A.P. Møller to the Executive Board. Remuneration of the Executive Board, which does not include pension or share based payment, is expensed with DKK 106m (Firmaet A. P. Møller DKK 96m).
| Fees to the statutory auditors | KPMG Statsautoriseret Revisionspartnerselskab |
KPMG including network firms |
|||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Statutory audit | 20 | 27 | 67 | 95 | |
| Other assurance services | 2 | 2 | 3 | 5 | |
| Tax and VAT advisory services | 23 | 17 | 32 | 28 | |
| Other services | 20 | 11 | 24 | 22 | |
| Total fees | 65 | 57 | 126 | 150 |
| PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab |
PwC including network firms |
||||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Statutory audit | 15 | 8 | 35 | 15 | |
| Other assurance services | 1 | 1 | 2 | 1 | |
| Tax and VAT advisory services | 2 | 2 | 4 | 3 | |
| Other services | 13 11 |
33 | 42 | ||
| Total fees | 31 22 74 |
61 |
Amounts in DKK million
| 2013 | 2012 | |
|---|---|---|
| Gains1 | 1,431 | 3,607 |
| Losses | 617 | 75 |
| Gain on sale of non-current assets, etc., net | 814 | 3,532 |
1Gains include dividends received from other equity investments of DKK 38m (DKK 32m).
Gains relate to the sale of the Brigantine Group, China of DKK 163m and a number of non-current assets. Losses mainly relate to the divestment of DFDS with a loss of DKK 317m.
In 2012, gains primarily related to the sale of the FPSO, Maersk Peregrino, which was completed 31 July 2012 with a gain of DKK 1,252m, Maersk LNG A/S, DKK 465m, oil concession rights in Brazil, DKK 637m and Maersk Equipment Service Company, Inc., DKK 458m.
| 2013 | 2012 | |
|---|---|---|
| Interest expenses on liabilities | 3,811 | 4,236 |
| Of which borrowing costs capitalised on assets1 | 988 | 318 |
| Interest income on loans and receivables | 467 | 593 |
| Interest income on securities | 3 | 6 |
| Fair value adjustment transferred from equity hedge reserve (loss) | 393 | 754 |
| Unwind of discount on provisions | 377 | 376 |
| Net interest expenses | 3,123 | 4,449 |
| Exchange rate gains on bank deposits, loans and working capital | 1,556 | 1,129 |
| Exchange rate losses on bank deposits, loans and working capital | 3,325 | 2,798 |
| Net foreign exchange gains/losses | -1,769 | -1,669 |
| Fair value gains from derivatives | 1,110 | 1,732 |
| Fair value losses from derivatives | 253 | 141 |
| Fair value gains from securities | 10 | 22 |
| Fair value losses from securities | - | 7 |
| Net fair value gains/losses2 | 867 | 1,606 |
| Dividends received from securities | 5 | 8 |
| Impairment losses on financial non-current receivables | 1 | 11 |
| Financial expenses, net | 4,021 | 4,515 |
| Of which: | ||
| Financial income | 3,151 | 3,490 |
| Financial expenses | 7,172 | 8,005 |
1 The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 4.4% (4.8%).
2 Including loss on hedging instrument in fair value hedge of DKK 500m (gain of DKK 394m) and gain on the hedged item of DKK 362m (loss of DKK 349m).
For an analysis of gains and losses from derivatives reference is made to note 19.
Amounts in DKK million
5 Tax
| 2013 | 2012 | |
|---|---|---|
| Tax recognised in the income statement | 18,186 | 18,315 |
| Of which regarding Danish and foreign tonnage tax, freight tax, etc. | -557 | -432 |
| Total | 17,629 | 17,883 |
| Of which: | ||
| Current tax | 17,741 | 16,579 |
| Deferred tax | -112 | 1,304 |
| Current and deferred tax arise as follows: | ||
| Profit before tax | 37,193 | 40,063 |
| Income subject to Danish and foreign tonnage taxation, etc. | -7,267 | -395 |
| Share of profit/loss in joint ventures | -854 | -754 |
| Share of profit/loss in associated companies | -1,660 | -1,286 |
| Profit before tax, adjusted | 27,412 | 37,628 |
| Calculated 25% tax | 6,853 | 9,407 |
| Tax rate deviations in foreign entities, net | -960 | -633 |
| Additional tax in the oil segment in excess of 25% | 10,467 | 12,961 |
| Gains related to shares, dividends, etc. | 97 | -196 |
| Adjustment to previous years' taxes 1 | -86 | -5,343 |
| Deferred tax assets, not previously recognised | -629 | -402 |
| Tax losses for which no deferred tax asset was recognised | 1,059 | 737 |
| Other permanent differences, net | 828 | 1,352 |
| Total | 17,629 | 17,883 |
| Tax recognised in other comprehensive income and equity | ||
| Cash flow hedges | 183 | 74 |
| Actuarial gains/losses on defined benefit plans, etc. | 38 | 16 |
| Tax recognised in other comprehensive income, net | 221 | 90 |
| Tax recognised directly in equity | -112 | 29 |
| Total | 109 | 119 |
| Of which: | ||
| Current tax | 162 | 65 |
| Deferred tax | -53 | 54 |
1 2012 included a tax income of DKK 5.2bn from the settlement of a dispute regarding tax collected by the Algerian national oil company, Sonatrach S.P.A. The settlement is related to Algerian tax imposed from August 2006.
| Goodwill | Terminal and service concession rights |
Oil con- cession rights |
Other rights |
Total | ||
|---|---|---|---|---|---|---|
| Cost | ||||||
| 1 January 2012 | 4,436 | 4,115 | 40,696 | 3,534 | 52,781 | |
| Addition | - | 624 | 1,141 | 546 | 2,311 | |
| Acquired in business combinations | 235 | 1,619 | - | 184 | 2,038 | |
| Disposal | 11 | 1 | - | 180 | 192 | |
| Transfer, assets held for sale | - | -134 | - | -1 | -135 | |
| Exchange rate adjustment | 3 | 27 | -639 | -39 | -648 | |
| 31 December 2012 | 4,663 | 6,250 | 41,198 | 4,044 | 56,155 | |
| Addition | - | 1,349 | 1,037 | 708 | 3,094 | |
| Acquired in business combinations | - | 39 | - | - | 39 | |
| Disposal | - | 147 | 551 | 17 | 715 | |
| Transfer, assets held for sale | -463 | - | - | -1,362 | -1,825 | |
| Exchange rate adjustment | -549 | -509 | -1,812 | -187 | -3,057 | |
| 31 December 2013 | 3,651 | 6,982 | 39,872 | 3,186 | 53,691 | |
| Amortisation and impairment losses | ||||||
| 1 January 2012 | 562 | 904 | 22,700 | 2,184 | 26,350 | |
| Amortisation | - | 241 | 1,290 | 339 | 1,870 | |
| Impairment losses | 623 | - | - | - | 623 | |
| Disposal | 11 | - | - | 176 | 187 | |
| Transfer, assets held for sale | - | -28 | - | -1 | -29 | |
| Exchange rate adjustment | -16 | -10 | -371 | -28 | -425 | |
| 31 December 2012 | 1,158 | 1,107 | 23,619 | 2,318 | 28,202 | |
| Amortisation | - | 268 | 979 | 348 | 1,595 | |
| Impairment losses | 20 | - | 273 | 8 | 301 | |
| Disposal | - | 78 | 551 | 17 | 646 | |
| Transfer, assets held for sale | -30 | - | - | -278 | -308 | |
| Exchange rate adjustment | -80 | -109 | -1,055 | -124 | -1,368 | |
| 31 December 2013 | 1,068 | 1,188 | 23,265 | 2,255 | 27,776 | |
| Carrying amount: | ||||||
| 31 December 2012 | 3,505 | 5,143 1 |
17,579 2 |
1,726 3 |
27,953 | |
| 31 December 2013 | 2,583 | 5,794 1 |
16,607 2 |
931 3 |
25,915 |
1 Of which DKK 1.0bn (DKK 936m) is under development. DKK 278m (DKK 305m) is related to terminal rights with indefinite useful life in Poti Sea Port Corp. The impairment test is based on the estimated value in use according to a business plan. A discount rate of 13.0% (11.0%) p.a. after tax has been applied in the calculation. Furthermore, the development in volumes and rates are significant parameters.
2 Of which DKK 14.7bn (DKK 15.4bn) is related to oil concession rights where amortisation will begin when production commences. These rights are primarily located offshore in Brazil, and will only be subject to impairment testing when trigger events occur.
3Of which DKK 95m (DKK 839m) is related to on-going development of software.
Amounts in DKK million
The carrying amount of goodwill has been allocated to the following operating segments and cash generating units based on the management structure:
| Carrying amount | |||
|---|---|---|---|
| Operating segment | Cash generating unit | 2013 | 2012 |
| Svitzer | Adsteam Marine Limited (Australia) | 1,900 | 2,325 |
| Damco | Airfreight service | 501 | 515 |
| Dansk Supermarked | OHG Netto Supermarkt GmbH & Co. | - | 413 |
| Other | 182 | 252 | |
| Total | 2,583 | 3,505 | |
The impairment tests are based on the estimated value in use from five year business plans and a calculated terminal value with growth equal to the expected local economic growth.
In 2013, impairment losses of DKK 20m primarily relate to Pacific Network Global Logistics (Damco), due to weak market conditions in airfreight in Australia.
In 2012, impairment losses of DKK 623m primarily related to the Adsteam Marine Limited goodwill in the United Kingdom, which was fully impaired due to weak market conditions. Regarding the goodwill in Australia, an increase in the discount rate of 1%-point was estimated to result in an additional impairment of DKK 570m. Likewise a decline of 1%-point in terminal value growth rate was estimated to result in an impairment of DKK 445m.
| Key assumptions | Terminal value growth rate |
Estimated EBITDA growth p.a. in the forecast period |
Applied discount rate p.a. after tax |
|||
|---|---|---|---|---|---|---|
| Cash generating unit | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 |
| Adsteam Marine Limited (Australia) Airfreight service OHG Netto Supermarkt GmbH & Co. |
2.0% 2.0% - |
1.7% 2.0% 0.0% |
11.0% 4.5% - |
4.3% 7.2% 2.3% |
7.8% 9.0% - |
7.0% 9.1% 7.0% |
Impairment losses for 2013 of DKK 281m primarily relate to oil concession rights on the Janice field in the United Kingdom and are based on estimated value in use. A discount rate of 8.5% p.a. after tax and the forward curve for oil prices at 31 December 2013 are used in the calculation.
| Ships, rigs, containers, etc. |
Production facilities and equipment, etc. |
Land and buildings |
Construc- tion work in progress and payment on account |
Total | ||
|---|---|---|---|---|---|---|
| Cost | ||||||
| 1 January 2012 | 254,678 | 129,861 | 33,966 | 23,710 | 442,215 | |
| Addition | 12,394 | 1,275 | 383 | 28,994 | 43,046 | |
| Acquired in business combinations | - | 185 | - | 1 | 186 | |
| Disposal | 2,422 | 7,965 | 244 | 158 | 10,789 | |
| Disposal on sale of businesses | 40 | 37 | 15 | - | 92 | |
| Transfer | 17,086 | 9,362 | -2,738 | -23,710 | - | |
| Transfer, assets held for sale | -7,751 | -232 | -529 | - | -8,512 | |
| Exchange rate adjustment | -4,063 | -1,631 | 651 | -456 | -5,499 | |
| 31 December 2012 | 269,882 | 130,818 | 31,474 | 28,381 | 460,555 | |
| Addition | 2,941 | 3,629 | 525 | 31,510 | 38,605 | |
| Acquired in business combinations | - | 26 | 129 | - | 155 | |
| Disposal | 6,750 | 896 | 61 | 180 | 7,887 | |
| Disposal on sale of businesses | - | 23 | 6 | - | 29 | |
| Transfer | 9,414 | 12,269 | 438 | -22,121 | - | |
| Transfer, assets held for sale | -11,968 | -7,454 | -25,660 | -337 | -45,419 | |
| Exchange rate adjustment | -12,398 | -6,079 | -468 | -1,603 | -20,548 | |
| 31 December 2013 | 251,121 | 132,290 | 6,371 | 35,650 | 425,432 | |
| Depreciation and impairment losses | ||||||
| 1 January 2012 | 89,405 | 96,531 | 11,401 | 506 | 197,843 | |
| Depreciation | 14,068 | 11,221 | 526 | - | 25,815 | |
| Impairment losses | 2,063 | 220 | 174 | - | 2,457 | |
| Reversal of impairment losses | 565 | 25 | - | - | 590 | |
| Disposal | 1,961 | 7,550 | 113 | 1 | 9,625 | |
| Disposal on sale of businesses | 24 | 30 | 8 | - | 62 | |
| Transfer | 276 | 923 | -826 | -373 | - | |
| Transfer, assets held for sale | -369 | -114 | -63 | - | -546 | |
| Exchange rate adjustment | -1,560 | -1,363 | 64 | 2 | -2,857 | |
| 31 December 2012 | 101,333 | 99,813 | 11,155 | 134 | 212,435 | |
| Depreciation | 13,752 | 9,623 | 531 | - | 23,906 | |
| Impairment losses | 1,493 | 282 | - | - | 1,775 | |
| Reversal of impairment losses | 488 | 278 | 25 | 53 | 844 | |
| Disposal | 6,310 | 810 | 27 | - | 7,147 | |
| Disposal on sale of businesses | - | 21 | 3 | - | 24 | |
| Transfer, assets held for sale | -4,353 | -5,094 | -8,966 | - | -18,413 | |
| Exchange rate adjustment | -5,081 | -4,483 | -193 | -6 | -9,763 | |
| 31 December 2013 | 100,346 | 99,032 | 2,472 | 75 | 201,925 | |
| Carrying amount: | ||||||
| 31 December 2012 | 168,549 | 31,005 | 20,319 | 28,247 | 248,120 | |
| 31 December 2013 | 150,775 | 33,258 | 3,899 | 35,575 | 223,507 | |
| Of which carrying amount of finance leased assets: | ||||||
| 31 December 2012 | 13,395 | 6 | 6 | - | 13,407 | |
| 31 December 2013 | 11,445 | 3 | 5 | - | 11,453 | |
Amounts in DKK million
Impairment tests of property, plant and equipment have been carried out within the following cash generating units, applying the below methods and key assumptions based on identified impairment indicators during the year:
| Applied discount rate p.a. after tax |
Impairment losses |
Reversal of impairment losses |
Recoverable amount |
||||||
|---|---|---|---|---|---|---|---|---|---|
| Operating segment |
Cash generating unit |
Methodology | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 |
| Maersk Tankers | Crude tankers | Fair value | - | - | 1,292 | 1,043 | 431 | - | 5,304 |
| Product Handy | Value in use | 10.0% | 10.0% | - | 406 | - | - | - | |
| Maersk Line | Maersk Line1 | Fair value | - | - | - | 220 | - | 566 | - |
| Multi purpose vessel | Value in use | 10.0% | 10.0% | 56 | 214 | 110 | - | 520 | |
| Maersk Oil | Janice area | Value in use | 8.5% | 8.5% | 276 | 169 | - | - | - |
| Other | - | - | 151 | 405 | 303 | 24 | - | ||
| Total | 1,775 | 2,457 | 844 | 590 |
1Container vessels previously held for sale, partly redeployed or partly laid-up.
Transfer to assets held for sale primarily relates to Dansk Supermarked Group and 15 vessels in the VLCC segment in Maersk Tankers. In 2012, transfer to assets held for sale primarily comprised the FPSO Maersk Peregrino.
The negative transfer from land and buildings in 2012 was primarily related to pavement and other terminal infrastructure being reclassified to production facilities and equipment, etc.
As part of the Group's activities, customary leasing agreements are entered into, especially with regard to the chartering of vessels and lease of containers and other equipment. In some cases, the leasing agreements comprise purchase options for the Group and options for extension of the lease term.
In the financial statements, assets held under finance leases are recognised in the same way as owned assets.
Property, plant and equipment include assets, mainly drillships, rigs and vessels, which are leased out as part of the Group's activities. The future lease income is DKK 57.2bn (DKK 53.3bn) of which DKK 16.7bn (DKK 13.5bn) is receivable within one year, DKK 32.6bn (DKK 35.4bn) between one and five years and DKK 7.9bn (DKK 4.4bn) in more than five years.
Ownership of production facilities, etc., relating to oil production in Qatar and Algeria with a carrying amount of DKK 6.4bn (DKK 8.3bn) is transferred to state-owned oil companies on an on-going basis according to agreements. The right of use is maintained during the concession period.
Ships, rigs, etc., with a carrying amount of DKK 44.5bn (DKK 54.7bn) have been pledged as security for loans of DKK 26.7bn (DKK 33.9bn).
| Investments in joint ventures (100% numbers) | APM Terminals | Other | |||
|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | ||
| Revenue | 13,459 | 9,509 | 5,303 | 4,657 | |
| Expenses, depreciation, amortisation, interest, etc. | 11,704 | 7,596 | 4,537 | 4,293 | |
| Profit for the year | 1,755 | 1,913 | 766 | 364 | |
| Other comprehensive income | 137 | 13 | - | - | |
| Total comprehensive income | 1,892 | 1,926 | 766 | 364 | |
| Non-current assets | 73,255 | 53,137 | 7,195 | 8,524 | |
| Current assets | 6,448 | 4,996 | 2,264 | 2,252 | |
| Non-current liabilities | 24,982 | 19,522 | 3,067 | 4,780 | |
| Current liabilities | 10,140 | 4,733 | 2,890 | 2,680 | |
| Net assets | 44,581 | 33,878 | 3,502 | 3,316 | |
| Cash and bank balances | 1,939 | 2,670 | 771 | 712 |
Commitments in joint ventures, which may require the Group to contribute cash for investments, etc., amount to DKK 3.0bn (DKK 1.4bn).
Amounts in DKK million
| Investments in associated companies (100% numbers) | Danske Bank | Other | ||
|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | |
| Revenue | 117,453 | 127,200 | 23,708 | 28,981 |
| Expenses, depreciation, amortisation, interest, etc. | 110,338 | 122,451 | 22,887 | 28,107 |
| Profit for the year | 7,115 | 4,749 | 821 | 874 |
| Other comprehensive income | 641 | 633 | -310 | 108 |
| Total comprehensive income | 7,756 | 5,382 | 511 | 982 |
| Non-current assets | 2,088,691 | 2,251,073 | 30,171 | 33,937 |
| Current assets | 1,138,366 | 1,234,108 | 5,382 | 19,962 |
| Non-current liabilities | 2,113,972 | 2,199,854 | 13,438 | 23,924 |
| Current liabilities | 967,428 | 1,147,093 | 4,959 | 5,971 |
| Net assets | 145,657 | 138,234 | 17,156 | 24,004 |
| Cash and bank balances | 43,721 | 97,267 | 2,281 | 3,703 |
The fair value of the Group's investment in Danske Bank amounts to DKK 25.2bn (DKK 19.3bn), and the carrying amount to DKK 29.2bn (DKK 27.7bn). Profit in Danske Bank was DKK 7.1bn (DKK 4.7bn). The Group's share is DKK 1.4bn (DKK 952m).
Revenue includes interest income, fee income and net premiums. Contingent liabilities in associated companies totalled DKK 46.8bn (DKK 48.6bn) proportionally and are related to guarantees and other contingent liabilities.
In October 2012, the Group participated in Danske Bank's capital increase DKK 7.2bn with an investment of DKK 1.4bn.
No dividend has been received from Danske Bank in 2013 or 2012. Danske Bank will resume dividend payments in 2014, however certain restrictions under a loan agreement with the Danish State still apply.
| 2013 | 2012 | |
|---|---|---|
| Loans | 1,425 | 5,421 |
| Finance lease receivables | 736 | 868 |
| Other interest-bearing receivables and deposits | 715 | 871 |
| VAT and similar receivables | 1,243 | 908 |
| Receivables from settled claims and disputes, etc. | 260 | 2,494 |
| Other | 5,885 | 5,564 |
| Total | 10,264 | 16,126 |
| Of which: | ||
| Classified as non-current | 4,401 | 4,920 |
| Classified as current | 5,863 | 11,206 |
In 2012, receivables from settled claims primarily related to a tax dispute in Algeria.
The finance lease receivables are primarily related to the Portsmouth terminal in Virginia, USA.
| Finance lease receivables | Gross recei- vables |
Interest | Carrying amount |
Gross recei- vables |
Interest | Carrying amount |
|
|---|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | ||
| Within one year | 73 | 31 | 42 | 83 | 47 | 36 | |
| Between one and five years | 262 | 101 | 161 | 352 | 196 | 156 | |
| After five years | 676 | 143 | 533 | 1,298 | 622 | 676 | |
| Total | 1,011 | 275 | 736 | 1,733 | 865 | 868 |
Amounts in DKK million
Recognised deferred tax assets and liabilities are attributable to the following:
| Assets | Liabilities | Net liabilities | |||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||
| Intangible assets | 305 | 180 | 792 | 1,516 | 487 | 1,336 | |
| Property, plant and equipment | 709 | 1,717 | 10,900 | 10,123 | 10,191 | 8,406 | |
| Receivables, etc. | 127 | 127 | 503 | 438 | 376 | 311 | |
| Provisions, etc. | 4,661 | 3,688 | 272 | 312 | -4,389 | -3,376 | |
| Oil lifting balances in joint operations | 262 | 528 | - | - | -262 | -528 | |
| Tax loss carry forwards | 2,957 | 2,950 | - | - | -2,957 | -2,950 | |
| Other | 224 | 58 | 196 | 70 | -28 | 12 | |
| Total | 9,245 | 9,248 | 12,663 | 12,459 | 3,418 | 3,211 | |
| Offsets | -6,656 | -5,956 | -6,656 | -5,956 | - | - | |
| Total | 2,589 | 3,292 | 6,007 | 6,503 | 3,418 | 3,211 |
| Change in deferred tax, net during the year | 2013 | 2012 |
|---|---|---|
| 1 January | 3,211 | 1,208 |
| Intangible assets | -492 | -342 |
| Property, plant and equipment | 2,028 | 2,300 |
| Receivables, etc. | -13 | 96 |
| Provisions, etc. | -1,387 | 502 |
| Oil lifting balances in joint operations | 256 | -164 |
| Tax loss carry forwards | -236 | -957 |
| Other | -83 | 123 |
| Recognised in the income statement1 | 73 | 1,558 |
| Intangible assets | 2 | 461 |
| Property, plant and equipment | 23 | 3 |
| Other | - | -1 |
| Change from acquisition/sale of businesses | 25 | 463 |
| Recognised in other comprehensive income and equity | -53 | 54 |
| Transfer, assets held for sale, etc. | 180 | -9 |
| Exchange rate adjustments | -18 | -63 |
| 31 December | 3,418 | 3,211 |
1Of which DKK 185m (DKK 253m) is recognised as an expense in Discontinued operations.
The tax losses carried forward have no significant time limitations. No tax value is recognised as it is not considered likely that the deferred tax assets can be realised in the foreseeable future.
| 2013 | 2012 | ||
|---|---|---|---|
| Deductible temporary differences | 1,373 | 1,122 | |
| Tax loss carry forwards | 3,020 | 2,909 | |
| Total | 4,393 | 4,031 |
There are no significant unrecognised tax liabilities on investments in subsidiaries, associated companies and joint ventures.
| 2013 | 2012 | |
|---|---|---|
| Raw materials and consumables | 1,462 | 2,077 |
| Work in progress | 152 | 127 |
| Finished goods and goods for resale | 937 | 4,949 |
| 2,551 | 7,153 | |
| Bunker | 4,222 | 5,716 |
| Total | 6,773 | 12,869 |
No significant write-downs or reversals have been recognised on inventories.
Amounts in DKK million
Dansk Supermarked Group is classified as Discontinued operations and information of discontinued operations below solely relates to Dansk Supermarked Group.
Intangible assets held for sale regarding Dansk Supermarked Group amounts to DKK 1.5bn and property, plant and equipment amounts to DKK 18.3bn. Non-controlling interests within equity related to Dansk Supermarked Group amounts to DKK 11.3bn (DKK 10.6bn). Reference is made to note 30 for further information.
Assets held for sale relate, in addition to Dansk Supermarked Group, primarily to 15 vessels in the VLCC segment in Maersk Tankers.
Comparison figures in the income statement and cash flow statement have been restated as a consequence of the classification of Dansk Supermarked Group as discontinued operations in 2013.
In 2012, assets held for sale primarily related to Maersk Tankers' 11 vessels in the handygas segment.
Seven container vessels in Maersk Line, of which four are owned and three held as finance lease, were due to unsuccessful sales efforts ceased to be classified as held for sale and in consequence net impairment losses of DKK 550m were reversed.
Impairment losses of DKK 148m were recognised in relation to the reclassification to assets held for sale.
| 2013 | 2012 | |
|---|---|---|
| Profit for the year – discontinued operations | ||
| Revenue | 56,857 | 55,610 |
| Expenses | -53,219 | -52,528 |
| Depreciation, amortisation and impairment losses | -733 | -846 |
| Profit before tax, etc. | 2,905 | 2,236 |
| Tax | 689 | 587 |
| Profit for the year – discontinued operations | 2,216 | 1,649 |
| A.P. Møller - Mærsk A/S' share hereof | 1,293 | 910 |
| Earnings and diluted earnings per share, DKK | 296 | 208 |
| Cash flows from discontinued operations for the year | ||
| Cash flow from operating activities | 3,810 | 2,694 |
| Cash flow used for investing activities | -2,614 | -1,998 |
| Cash flow from financing activities | -723 | -849 |
| Net cash flow from discontinued operations | 473 | -153 |
| Balance sheet items comprise: | ||
| Non-current assets | 26,572 | 2,919 |
| Current assets | 10,902 | 126 |
| Assets held for sale | 37,474 | 3,045 |
| Provisions | 246 | - |
| Other liabilities | 11,282 | 75 |
| Liabilities associated with assets held for sale | 11,528 | 75 |
Amounts in DKK million
The share capital on 31 December 2013 comprises:
A shares DKK 2,197.8m divided into 2,197,619 shares of DKK 1,000 and 362 shares of DKK 500 B shares DKK 2,197.8m divided into 2,197,683 shares of DKK 1,000 and 234 shares of DKK 500 All shares are fully issued and paid up.
One A share of DKK 1,000 holds two votes. B shares have no voting rights.
For adoption of resolutions regarding changes in the Company's articles or increase or write down to the share capital requires the presence of two-thirds of the class A voting rights at the Annual General Meeting and that the resolution shall be passed by two-thirds of the votes cast.
Apart from a resolution for the dissolution of the Company, other resolutions at the Annual General Meetings are passed by simple majority, as long as legislation does not require particular voting majority. Reference is made to the Company's articles of association.
In the event of an increase of the Company's share capital, the shareholders in the given share class shall have a pre-emptive right to subscribe for a proportionate share of the capital increase.
According to the authorisation of the Annual General Meeting, the Board of Directors may in the period up to and including 3 April 2016 allow the Company to acquire own shares up to a holding of 10% of the Company's share capital. The purchase price may not deviate by more than 10% from the price quoted on NASDAQ OMX Copenhagen A/S at the time of purchase.
| No. of shares of DKK 1,000 |
Nominal value |
% of share capital |
|||||
|---|---|---|---|---|---|---|---|
| Own shares (B shares) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| 1 January | 29,070 | 29,729 | 29 | 30 | 0.66% | 0.68% | |
| Disposal | 2,544 | 659 | 2 | 1 | 0.06% | 0.02% | |
| 31 December | 26,526 | 29,070 | 27 | 29 | 0.60% | 0.66% |
Disposals of own shares are primarily related to the share option programme.
Based on the parent company's profit of DKK 7,313m (DKK 8,435m), the Board of Directors proposes a dividend to the shareholders of DKK 1,400 per share of DKK 1,000 – a total of DKK 6,154m (DKK 1,200 per share of DKK 1,000 – a total of DKK 5,275m). Payment is expected to take place on 4 April 2014.
Payment of dividends to shareholders does not trigger taxes for the Group.
Amounts in DKK million
Basis for calculating earnings per share is the following:
| A.P. Møller - Mærsk A/S' share of: | 2013 | 2012 |
|---|---|---|
| Profit for the year of continuing operations | 18,089 | 20,763 |
| Profit for the year of discontinued operations | 1,293 | 910 |
| Profit for the year | 19,382 | 21,673 |
| Issued shares 1 January | 4,395,600 | 4,395,600 |
| Average number of own shares | 28,006 | 29,330 |
| Average number of shares | 4,367,594 | 4,366,270 |
At 31 December 2013, there is a dilution effect on earnings per share of 2,522 (4,658) issued share options while there is no dilution effect on 11,852 (15,931) issued share options. This corresponds to 0.06% (0.11%) and 0.27% (0.36%) of the share capital, respectively.
In 2013, the Group has established a restricted shares programme for employees, replacing the previous share option programme.
The fair value of restricted shares (A.P. Møller - Mærsk A/S B shares) granted to 115 employees was DKK 46m at the time of the grant. Total value of granted restricted shares recognised in the income statement is DKK 12m.
The transfer of restricted shares is contingent on the employee still being permanently employed and takes place when three years have passed from the time of grant. The employee is not entitled to any dividend during the vesting period.
Special conditions apply regarding illness, death and resignation as well as changes in the Company's capital structure, etc.
A portion of the Group's holding of own shares is reserved for transfer of restricted shares.
| Outstanding restricted shares | Employees 1 | Total fair value1 |
|---|---|---|
| No. | DKK million | |
| Granted | 1,014 | 46 |
| Forfeited | 13 | |
| Outstanding 31 December 2013 | 1,001 |
1 At the time of grant.
The fair value per restricted share at the time of grant is calculated at DKK 45,315, which is equal to the average share price on the first five trading days following the release of A.P. Møller – Mærsk A/S' annual report .
The average remaining contractual life for the restricted shares as per 31 December 2013 is 2.3 years.
In addition to the restricted shares program, the Group has a share option programme for former partners in Firmaet A.P. Møller and other employees. Each share option granted is a call option to buy an existing B share of nominal DKK 1,000 in A.P. Møller - Mærsk A/S. Share options related to this programme have not been granted in 2013.
In 2012, the fair value of share options granted to 123 employees was DKK 39m at the time of grant. Total value of granted share options recognised in the income statement is DKK 23m (DKK 36m). In addition to the share options granted to the employees in 2012, three partners in Firmaet A.P. Møller bought share options corresponding to a fair value of DKK 7m.
The share options was granted at an exercise price corresponding to 110% of the average of the market price on the first five trading days following the release of A.P. Møller - Mærsk A/S' annual report. Exercise of the share options is contingent on the option holder still being permanently employed at the time of exercise. The share options can be exercised when at least two years and no more than five years have passed from the time of granting and can only be exercised within the trading periods as stated in the internal rules for trading of A.P. Møller - Mærsk A/S' securities in force at any time. Special conditions apply regarding illness, death and resignation as well as changes in the Company's capital structure, etc.
The share options can only be settled in shares. A portion of the Group's holding of own shares is reserved for settlement of granted options.
Amounts in DKK million
| Outstanding share options | Partners in Firmaet A.P. Møller 1 |
Employees 1 | Total | Average exercise price |
Total fair value1 |
|---|---|---|---|---|---|
| No. | No. | No. | DKK | DKK million | |
| 1 January 2012 | 4,459 | 12,113 | 16,572 | 44,716 | |
| Granted | - | 4,356 | 4,356 | 49,843 | 39 |
| Sold | 792 | - | 792 | 49,843 | 7 |
| Exercised | - | 659 | 659 | 27,237 | |
| Forfeited | - | 472 | 472 | 52,351 | |
| Outstanding 31 December 2012 | 5,251 | 15,338 | 20,589 | 46,382 | |
| Exercisable 31 December 2012 | 3,684 | 8,076 | 11,760 | 41,183 | |
| Exercised | 237 | 2,307 | 2,544 | 30,421 | |
| Forfeited | 1,120 | 2,551 | 3,671 | 53,479 | |
| Outstanding 31 December 2013 | 3,894 | 10,480 | 14,374 | 47,394 | |
| Exercisable 31 December 2013 | 3,102 | 6,265 | 9,367 | 46,085 | |
1 At the time of grant.
The weighted average share price at the dates of exercise of shares was DKK 49,982 (DKK 43,124).
The average remaining contractual life as per 31 December 2013 is 2.0 years (2.3 years) and the exercise price for outstanding share options is in the range of DKK 27,237 to DKK 57,959 (DKK 27,237 to DKK 57,959).
In 2012, the fair value per option at the time of grant was calculated at DKK 8,839 based on Black & Scholes' options pricing model.
The following principal assumptions were used in 2012 in the valuation of the share options at the time of grant:
| 2012 | |
|---|---|
| Share price, five days average, DKK | 45,312 |
| Exercise price, DKK | 49,843 |
| Expected volatility (based on four years historical volatility) | 31.3% |
| Expected term | 4.0 years |
| Expected dividend per share, DKK | 1,000 |
| Risk free interest rate (based on the five years swap interest curve) | 1.6% |
| 2013 | 2012 | |
|---|---|---|
| Bank and other credit institutions | 46,839 | 64,743 |
| Finance lease liabilities | 10,747 | 12,384 |
| Issued bonds | 27,628 | 25,850 |
| Total | 85,214 | 102,977 |
| Of which: | ||
| Classified as non-current | 68,753 | 91,000 |
| Classified as current | 16,461 | 11,977 |
| Finance lease liabilities | Minimum lease pay- ments |
Interest | Carrying amount |
Minimum lease pay ments |
Interest | Carrying amount |
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Within one year | 1,625 | 507 | 1,118 | 1,564 | 570 | 994 |
| Between one and five years | 5,153 | 1,681 | 3,472 | 6,230 | 1,861 | 4,369 |
| After five years | 7,579 | 1,422 | 6,157 | 8,930 | 1,909 | 7,021 |
| Total | 14,357 | 3,610 | 10,747 | 16,724 | 4,340 | 12,384 |
The finance lease agreements are described in note 7.
Amounts in DKK million
As employer, the Group participates in pension plans according to normal practice in the countries in which the Group operates. As a main rule, the pension plans within the Group are defined contribution plans, where contributions are recognised in the income statement on an accrual basis. A number of entities have defined benefit plans, in which retirement benefits are based on length of service and salary level. To a limited extent, these defined benefit plans also include payment of medical expenses, etc.
Pension and medical plans which, as part of collective bargaining agreements, have been entered into with other enterprises (known as multi-employer plans) are treated as other pension plans. Such defined benefit plans are treated as defined contribution plans when sufficient information for calculating the individual enterprises' share of the obligation is not available.
In 2014, the Group expects to pay contributions totalling DKK 429m to funded defined benefit plans (DKK 445m in 2013).
| United Kingdom |
Other | Total | United Kingdom |
Other | Total | |
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Specification of net liability | ||||||
| Present value of funded plans | 10,846 | 2,850 | 13,696 | 10,521 | 3,523 | 14,044 |
| Fair value of plan assets | -10,528 | -2,324 | -12,852 | -9,827 | -2,769 | -12,596 |
| Net liability of funded plans | 318 | 526 | 844 | 694 | 754 | 1,448 |
| Present value of unfunded plans | 18 | 450 | 468 | 18 | 839 | 857 |
| Impact of minimum funding | ||||||
| requirement/asset ceiling | 98 | - | 98 | 1 | 32 | 33 |
| Net liability 31 December | 434 | 976 | 1,410 | 713 | 1,625 | 2,338 |
| Of which: | ||||||
| Pensions, net assets | 358 | 193 | ||||
| Pensions and similar obligations | 1,768 | 2,531 | ||||
The majority of the Group's defined benefit liabilities are in the UK (77%) and the USA (13%). All of the plans in the UK and the majority of the plans in the USA are funded. Although all of the UK plans are now closed to new entrants, active members in the two largest plans continue to accrue new benefits. The smaller UK plans are all closed to new accruals, although a salary link remains in some of the plans.
Overall the plans have an average duration of 16 years and approximately 49% of the obligation is in respect of pensioner members.
As well as being subject to the risks of falling interest rates which would increase the obligation, poor asset returns and retirees living longer than anticipated, the Group is also subject to the risk of higher than expected inflation. This is because many pension benefits, particularly in the UK plans increase in line with inflation (although some minimum and maximum limits apply).
| Significant financial assumptions | United Kingdom | Total | United Kingdom | Total |
|---|---|---|---|---|
| 2013 | 2013 | 2012 | 2012 | |
| Discount rate | 4.4% | 4.4% | 4.4% | 4.2% |
| Inflation rate | 3.6% | 3.3% | 3.1% | 2.9% |
| Future salary increase | 4.5% | 4.3% | 4.0% | 3.9% |
| Future pension increase | 3.3% | 3.1% | 2.9% | 2.8% |
Amounts in DKK million
Rates of life expectancy reflect the most recent mortality investigations and in line with market practice an allowance is made for future improvements in life expectancy. The Group assumes that future improvements will be in line with the latest projections (1.25%) for all the UK plans.
| 31 December | |||||
|---|---|---|---|---|---|
| Life expectancy | 2013 | 2033 | 2012 | 2032 | |
| 65 year old male in the UK | 22.2 | 23.5 | 21.9 | 22.7 |
The liabilities are calculated using assumptions that are the Group's best estimate of future experience. The sensitivity of the liabilities and pension cost to the key assumptions are as follows:
| Sensitivities for key assumptions in the UK |
Change by | Change in liability 2013 |
|
|---|---|---|---|
| Factors | Increase | Decrease | |
| Discount rate | 10 basis points | -168 | 173 |
| Inflation rate | 10 basis points | 97 | -108 |
| Life expectancy | 1 year | 373 | -363 |
The Group's plans are funded in accordance with applicable local legislation. In the UK, each plan has a Trustee Board that is required to act in the best interests of plan members. Every three years, a formal valuation of the plan's liabilities is carried out using a prudent basis and if the plan is in deficit, the Trustees agree with the Company on a plan for recovering that deficit.
The expected contributions to the UK plans for 2014 are DKK 300m (DKK 286m in 2013) of which DKK 83m (DKK 65m in 2013) is deficit recovery contributions. In most of the UK plans, any surplus remaining after the last member dies may be returned to the company. However the Merchant Navy Officer's Pension Fund contributions paid by the company are not refundable in any circumstance and the balance sheet liability reflects an adjustment for any agreed deficit recovery contributions in excess of deficit determined using the Group's assumptions. In 2013, an adjustment of DKK 98m (DKK 1m) was applied in this respect.
| Specification of plan assets | United Kingdom |
Other | Total | United Kingdom |
Other | Total | |
|---|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | ||
| Shares | 3,406 | 891 | 4,297 | 3,624 | 911 | 4,535 | |
| Government Bonds | 4,058 | 557 | 4,615 | 3,326 | 971 | 4,297 | |
| Corporate Bonds | 2,309 | 367 | 2,676 | 2,133 | 371 | 2,504 | |
| Real estate | 139 | 19 | 158 | 107 | 23 | 130 | |
| Other assets | 616 | 490 | 1,106 | 637 | 493 | 1,130 | |
| Fair value 31 December | 10,528 | 2,324 | 12,852 | 9,827 | 2,769 | 12,596 |
All the plan assets held by the Group are quoted, except for an insignificant portion.
Amounts in DKK million
The net liability has changed as follows:
| Change in net liability | Present value of obliga- tions |
Fair value of plan assets |
Adjust- ments |
Net liability |
Of which: United Kingdom |
|---|---|---|---|---|---|
| 1 January 2012 | 13,679 | 11,619 | 400 | 2,460 | 991 |
| Current service costs, etc. | 156 | - | - | 156 | 40 |
| Calculated interest expense/income | 629 | 556 | - | 73 | 39 |
| Gains/losses on settlements, past service costs/income, etc. | 2 | - | - | 2 | - |
| Administration expenses, etc. | - 787 |
-9 547 |
- - |
9 240 |
7 86 |
| Recognised in the income statement in 20121 | |||||
| Actuarial gains/losses from change in financial assumptions | 610 | - | - | 610 | 284 |
| Actuarial gains/losses from change in demographic assumptions | 103 | - | - | 103 | 103 |
| Experience gains/losses | 119 | - | - | 119 | 113 |
| Return on plan assets, exclusive calculated interest income | - | 202 | - | -202 | -31 |
| Adjustment for minimum funding requirement | - | - | -359 | -359 | -451 |
| Effect of asset ceiling | - | - | -18 | -18 | - |
| Recognised in other comprehensive income in 2012 | 832 | 202 | -377 | 253 | 18 |
| Contributions from the Group | - | 584 | - | -584 | -407 |
| Contributions from employees | 16 | 16 | - | - | - |
| Benefit payments | -662 | -597 | - | -65 | -2 |
| New plans | 6 | - | - | 6 | - |
| Effect of business combinations and disposals | 9 | - | - | 9 | - |
| Exchange rate adjustment | 234 | 225 | 10 | 19 | 27 |
| 31 December 2012 | 14,901 | 12,596 | 33 | 2,338 | 713 |
| Current service costs, etc. | 146 | - | - | 146 | 33 |
| Calculated interest expense/income | 583 | 499 | - | 84 | 27 |
| Gains/losses on settlements, past service costs/income, etc. | 5 | - | - | 5 | - |
| Administration expenses, etc. | - | -14 | - | 14 | 6 |
| Recognised in the income statement in 20131 | 734 | 485 | - | 249 | 66 |
| Actuarial gains/losses from change in financial assumptions | 123 | - | - | 123 | 385 |
| Actuarial gains/losses from change in demographic assumptions | 137 | - | - | 137 | 74 |
| Experience gains/losses | 47 | - | - | 47 | 23 |
| Return on plan assets, exclusive calculated interest income | - | 695 | - | -695 | -664 |
| Adjustment for minimum funding requirement | - | - | 96 | 96 | 96 |
| Effect of asset ceiling | - | - | -30 | -30 | - |
| Recognised in other comprehensive income in 2013 | 307 | 695 | 66 | -322 | -86 |
| Contributions from the Group | - | 383 | - | -383 | -238 |
| Contributions from employees | 13 | 13 | - | - | - |
| Benefit payments | -1,034 | -962 | - | -72 | -2 |
| Exchange rate adjustment | -454 | -358 | -1 | -97 | -19 |
| Closing balance transferred to held for sale | -303 | - | - | -303 | - |
| 31 December 2013 | 14,164 | 12,852 | 98 | 1,410 | 434 |
| 1 Of which DKK 5m (DKK 7m) is included under Discontinued operations. |
Due to collective agreements, some entities in the Group participate together with other enterprises in defined benefit pension and health insurance schemes for current and retired employees (multi-employer plans). In 2013, the Group's contribution is estimated at DKK 685m (DKK 707m). The contributions to be paid in 2014 are expected to be DKK 693m (DKK 760m).
No reliable basis exists for allocation of the schemes' obligations and plan assets to individual employer participants. The Group's share might be significant. Deficit in some of the schemes may necessitate increased contributions in the future. Based on the most recent available financial data from the plans' trustees, the plan assets totalled DKK 39.4bn (DKK 38.8bn) and the actuarial value of obligations approximately DKK 52.8bn (DKK 52.8bn). Net obligations in the plans with deficits totalled DKK 15.3bn (DKK 15.5bn). In general, the contributions to the schemes are based on man hours worked or cargo tonnage handled, or a combination hereof.
| Abandon- ment |
Restruc- turing |
Legal dis- putes, etc. |
Other | Total | ||
|---|---|---|---|---|---|---|
| 1 January 2013 | 9,610 | 373 | 7,762 | 5,126 | 22,871 | |
| Provision made | 2,529 | 559 | 3,017 | 2,935 | 9,040 | |
| Amount used | 94 | 317 | 580 | 644 | 1,635 | |
| Amount reversed | - | 86 | 1,372 | 1,092 | 2,550 | |
| Addition from business combinations | - | - | - | 1 | 1 | |
| Unwind of discount | 376 | - | - | 1 | 377 | |
| Transfer, assets held for sale | - | - | -21 | -232 | -253 | |
| Exchange rate adjustment | -521 | -28 | -409 | -240 | -1,198 | |
| 31 December 2013 | 11,900 | 501 | 8,397 | 5,855 | 26,653 | |
| Of which: | ||||||
| Classified as non-current | 11,900 | 39 | 6,651 | 4,083 | 22,673 | |
| Classified as current | - | 462 | 1,746 | 1,772 | 3,980 | |
| Non-current provisions expected | ||||||
| to be realised after more than five years | 9,451 | - | 753 | 333 | 10,537 |
Provisions for abandonment comprise estimated expenses for abandonment of oil and gas fields at discounted value. Restructuring includes provisions for decided and publicly announced restructurings. Legal disputes, etc. include tax and duty disputes among other things. Other includes provisions for guarantees, onerous contracts, and risk under certain self-insurance programmes. The provisions are subject to considerable uncertainty, cf. note 28.
Reversals of provisions primarily relate to legal disputes and contractual disagreements, which are recognised in the income statement under operating costs and tax.
Amounts in DKK million
| 2013 | 2012 | |
|---|---|---|
| Interest payable | 765 | 935 |
| VAT and duties payable | 2,522 | 2,836 |
| Accrued staff costs | 2,317 | 3,170 |
| Deposits received | 544 | 579 |
| Contingent consideration regarding business combinations | 165 | 281 |
| Other | 770 | 1,197 |
| Total | 7,083 | 8,998 |
| Of which: | ||
| Classified as non-current | 117 | 248 |
| Classified as current | 6,966 | 8,750 |
Fair value adjustments on contingent consideration in relation to the acquisitions of Poti Sea Port Corp., NTS International Transport Services Co. Ltd. and Pacific Network Global Logistics have during 2013 resulted in gains of DKK 57m (DKK 87m), DKK 41m (DKK 47m) and DKK 16m (DKK 0m), respectively. The gains are recognised as other income. The contingent considerations are dependent on the future financial and operational performance of the companies.
Foreign exchange forwards and option contracts are used to hedge the currency risk related to recognised and unrecognised transactions. Interest rate swaps are used to hedge interest rate exposure on borrowings. Price hedge derivatives are entered into to hedge crude oil prices and bunker prices.
| 2013 | 2012 | ||
|---|---|---|---|
| Non-current receivables | 1,364 | 1,249 | |
| Current receivables | 948 | 621 | |
| Non-current liabilities | 686 | 1,310 | |
| Current liabilities | 945 | 541 | |
| Assets, net | 681 | 19 |
The fair value of derivatives held at the balance sheet date can be allocated by type as follows:
| Fair value | Recognised in income statement |
Recognised in equity |
Fair value | Recognised in income statement |
Recognised in equity |
|
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Currency derivatives 1 | 583 | 288 | 295 | 161 | -52 | 213 |
| Interest rate derivatives 1 | 99 | 137 | -38 | -108 | 578 | -686 |
| Price hedge derivatives | -1 | -1 | - | -34 | -34 | - |
| Total | 681 | 424 | 257 | 19 | 492 | -473 |
1Of which DKK 783m (DKK 857m) is related to fair value hedges.
The fair value recognised in equity relates to derivatives designated as effective hedging of future cash flows. The gains/losses are mainly expected to affect the income statement in the same periods as the cash flows are expected to occur. The expected timing of the effect on the income statement is as follows:
| Currency derivatives |
Interest rate derivatives |
Total | Currency derivatives |
Interest rate derivatives |
Total | |
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Within one year | 276 | -64 | 212 | 221 | -294 | -73 |
| Between one and five years | 3 | -1 | 2 | 5 | -310 | -305 |
| After five years | 16 | 27 | 43 | -13 | -82 | -95 |
| Total | 295 | -38 | 257 | 213 | -686 | -473 |
Amounts in DKK million
The gains/losses, including realised transactions, are recognised as follows:
| 2013 | 2012 | |
|---|---|---|
| Hedging foreign exchange risk on revenue | 73 | 17 |
| Hedging foreign exchange risk on operating costs | 147 | -331 |
| Hedging interest rate risk | -393 | -754 |
| Hedging foreign exchange risk on the cost of property, plant and equipment | 32 | -43 |
| Total effective hedging | -141 | -1,111 |
| Ineffectiveness recognised in financial expenses | -20 | 1 |
| Total reclassified from equity reserve for hedges | -161 | -1,110 |
| Derivatives accounted for as held for trading: | ||
| Currency derivatives recognised directly in financial income/expenses | 904 | 1,355 |
| Interest rate derivatives recognised directly in financial income/expenses | -380 | 580 |
| Hedging of oil prices and freight rates recognised directly in other income/costs | -7 | -12 |
| Net gains/losses recognised directly in the income statement | 517 | 1,923 |
| Total | 356 | 813 |
Currency derivatives hedge future revenue, operating costs and investments and are recognised on an ongoing basis in the income statement and the cost of property, plant and equipment respectively.
Interest rate derivatives swap floating to fixed rates on borrowings and are recognised in the income statement concurrently with the hedged interest expenses. They are also used to swap fixed rates to floating rates, of which some are fair value hedges.
Furthermore, the Group enters into derivatives to hedge economic risks that are not accounted for as hedging. These derivatives are accounted for as held for trading.
For information about currencies, maturities, etc. reference is made to note 21.
| Financial assets measured at amortised cost | Carrying amount | ||
|---|---|---|---|
| 2013 | 2012 | ||
| Loans | 1,425 | 5,421 | |
| Finance lease receivables | 736 | 868 | |
| Other interest-bearing receivables and deposits | 715 | 871 | |
| Total interest-bearing receivables | 2,876 | 7,160 | |
| Trade receivables | 25,048 | 30,273 | |
| Other receivables (non-interest-bearing) | 7,388 | 8,966 | |
| Cash and bank balances | 17,640 | 11,670 | |
| Total loans and receivables | 52,952 | 58,069 |
Fair value of the non-current receivables is not materially different from the carrying amount.
| Financial liabilities measured at amortised cost | Carrying amount |
Fair value |
Carrying amount |
Fair value |
|
|---|---|---|---|---|---|
| 2013 | 2013 | 2012 | 2012 | ||
| Bank and other credit institutions | 46,839 | 48,562 | 64,743 | 68,259 | |
| Finance lease liabilities | 10,747 | 11,965 | 12,384 | 14,510 | |
| Issued bonds | 27,628 | 28,905 | 25,850 | 26,857 | |
| Borrowings | 85,214 | 89,432 | 102,977 | 109,626 | |
| Trade payables | 29,124 | 34,730 | |||
| Other financial liabilities | 6,918 | 8,717 | |||
| Total financial liabilities | 121,256 | 146,424 |
Fair value of listed issued bonds fall within level 1 of the fair value hierarchy. Fair value of the remaining borrowing items fall within level 2 of the fair value hierarchy and are calculated on the basis of discounted interests and instalments.
Amounts in DKK million
Financial instruments measured at fair value can be divided into three levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3 – Inputs for the asset or liability that are not based on observable market data.
| Level | ||||
|---|---|---|---|---|
| Carrying amount |
Quoted prices |
Other inputs |
Other observable measurement methods |
|
| 2013 Bonds |
1,674 | 1,674 | - | - |
| Shares | 5 | 1 | - | 4 |
| Other securities | 8 | - | - | 8 |
| Total securities (held for trading) | 1,687 | 1,675 | - | 12 |
| Derivatives | 2,312 | - | 2,312 | - |
| Shares (available-for-sale) | 387 | - | - | 387 |
| Total financial assets | 4,386 | 1,675 | 2,312 | 399 |
| Derivatives | 1,631 | - | 1,631 | - |
| Other payables | 165 | - | - | 165 |
| Total financial liabilities | 1,796 | - | 1,631 | 165 |
| 2012 | ||||
| Bonds | 2,020 | 2,020 | - | - |
| Shares | 10 | 1 | - | 9 |
| Other securities | 130 | - | 120 | 10 |
| Total securities (held for trading) | 2,160 | 2,021 | 120 | 19 |
| Derivatives | 1,870 | 10 | 1,860 | - |
| Shares (available-for-sale) | 425 | 37 | - | 388 |
| Total financial assets | 4,455 | 2,068 | 1,980 | 407 |
| Derivatives | 1,851 | 44 | 1,807 | - |
| Other payables | 281 | - | - | 281 |
| Total financial liabilities | 2,132 | 44 | 1,807 | 281 |
The majority of derivative contracts are cash flow hedges (designated as hedging instruments) equal to a net asset of DKK 257m (net liability of DKK 473m).
Fair value of level 3 assets and liabilities are primarily based on the present value of expected future cash flows. A reasonably possible change in the discount rate is not estimated to affect the Group's profit or equity significantly.
The Group's activities expose it to a variety of financial risks:
The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the Group's financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by a central finance department under policies approved by the Board of Directors. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Group's Business Units.
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Group's profit or the value of its holdings of financial instruments. Below sensitivity analyses relate to the position of financial instruments at 31 December 2013.
The sensitivity analyses for currency risk and interest rate risk have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies remain unchanged from hedge designations in place at 31 December 2013. Furthermore, it is assumed that the exchange rate and interest rate sensitivities have a symmetric impact, i.e. an increase in rates results in the same absolute movement as a decrease in rates.
The sensitivity analyses show the effect on profit or loss and equity of a reasonably possible change in exchange rates and interest rates.
The Group's currency risk arises due to income from shipping and oil-related activities are denominated mainly in USD, while the related expenses are incurred in both USD and a wide range of other currencies such as DKK, EUR, CNY and GBP. As the net income is in USD, this is also the primary financing currency. Income and expenses from other activities, including APM Terminals, are mainly denominated in local currencies, thus reducing the Group's exposure to these currencies.
The main purpose of hedging the Group's currency risk is to hedge the USD value of the Group's net cash flow and reduce fluctuations in the Group's profit. The Group uses various financial derivatives, including forwards, option contracts and cross-currency swaps, to hedge these risks. The key aspects of the currency hedging policy are as follows:
An increase in the USD exchange rate of 10% against all other significant currencies to which the Group is exposed, is estimated to have a negative impact on the Group's profit before tax by DKK 0.8bn (DKK 0.8bn) and the Group's equity, excluding tax, negatively by DKK 1.9bn (DKK 1.8bn). The sensitivities are based only on the impact of financial instruments that are outstanding at the balance sheet date, cf. notes 19 and 20, and are thus not an expression of the Group's total currency risk.
| Currency position of net interest-bearing debt |
Cash and bank balances |
Other interest- bearing assets1 |
Borrow- ings |
Net interest- bearing debt |
Cash and bank balances |
Other interest- bearing assets1 |
Borrow- ings |
Net interest bearing debt |
|---|---|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | |
| USD | 5,532 | 3,142 | 48,146 | 39,472 | 3,958 | 3,634 | 65,952 | 58,360 |
| EUR | 525 | 548 | 16,496 | 15,423 | 462 | 565 | 17,048 | 16,021 |
| DKK | 3,319 | 350 | 743 | -2,926 | 825 | 4,153 | 1,908 | -3,070 |
| Other currencies | 8,264 | 518 | 19,829 | 11,047 | 6,425 | 958 | 18,069 | 10,686 |
| Total | 17,640 | 4,558 | 85,214 | 63,016 | 11,670 | 9,310 | 102,977 | 81,997 |
1Other interest-bearing assets consist of bonds, other securities and interest-bearing receivables cf. note 20.
Interest rate swaps entered into for the purpose of hedging interest rate risks on loans are mainly in USD. Fair values can be found in note 19.
| Foreign exchange forwards and option contracts for hedging currency risks |
Fair value | |
|---|---|---|
| 2013 | 2012 | |
| USD | 51 | 46 |
| EUR | 155 | -553 |
| DKK | 285 | 182 |
| GBP | 590 | 278 |
| NOK | -498 | 188 |
| SEK | 41 | 15 |
| Other | -41 | 5 |
| Total | 583 | 161 |
The Group has most of its debt denominated in USD, but part of the debt (e.g. issued bonds) is in other currencies such as DKK, EUR, GBP and NOK. Some loans are at fixed interest rates, while others are at floating interest rates.
The Group strives to maintain a combination of fixed and floating interest rates on its net debt, reflecting expectations and risks. The hedging of the interest rate risk is governed by a duration range and is primarily obtained through the use of interest rate swaps. The duration of the Group's debt portfolio is 2.0 years (1.8 years). A general increase in interest rates by one percentage point is estimated, all other things being equal, to affect profit before tax negatively by DKK 0.2bn (DKK 0.4bn). The effect on equity, excluding tax effect, of an increase in interest rates as mentioned above is estimated to be positive by DKK 0.3bn (DKK 0.0bn).
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
| Borrowings by interest rate levels inclusive of interest rate swaps |
Carrying amount |
Next interest rate fixing | |||
|---|---|---|---|---|---|
| 0-1 year | 1-5 years | 5- years | |||
| 2013 | |||||
| 0-3% | 51,906 | 38,053 | 10,728 | 3,125 | |
| 3-6% | 19,898 | 6,797 | 3,934 | 9,167 | |
| 6%- | 13,410 | 6,757 | 1,454 | 5,199 | |
| Total | 85,214 | 51,607 | 16,116 | 17,491 | |
| Of which: | |||||
| Bearing fixed interest | 41,005 | ||||
| Bearing floating interest | 44,209 | ||||
| 2012 | |||||
| 0-3% | 48,463 | 39,586 | 6,011 | 2,866 | |
| 3-6% | 45,257 | 22,649 | 9,256 | 13,352 | |
| 6%- | 9,257 | 993 | 1,779 | 6,485 | |
| Total | 102,977 | 63,228 | 17,046 | 22,703 | |
| Of which: | |||||
| Bearing fixed interest | 51,968 | ||||
| Bearing floating interest | 51,009 |
The Group has substantial exposure to financial and commercial counterparties but has no particular concentration of customers or suppliers. To minimise the credit risk, financial vetting is undertaken for all major customers and financial institutions, adequate security is required for commercial counterparties and credit limits are set for financial institutions and key commercial counterparties.
| Carrying amount | 25,048 | 30,273 |
|---|---|---|
| Provision for bad debt | 1,991 | 1,852 |
| Receivables, gross | 27,039 | 32,125 |
| More than 90 days overdue | 2,755 | 2,642 |
| Less than 90 days overdue | 5,300 | 5,976 |
| Receivables not due | 18,984 | 23,507 |
| Maturity analysis of trade receivables | 2013 | 2012 |
| Change in provision for bad debt | 2013 | 2012 |
|---|---|---|
| 1 January | 1,852 | 1,502 |
| Provision made | 1,160 | 932 |
| Amount used | 333 | 251 |
| Amount reversed | 579 | 298 |
| Exchange rate adjustment | -109 | -33 |
| 31 December | 1,991 | 1,852 |
The equity share of total equity and liabilities was 57.0% at the end of 2013 (54.3%). The Group's long term objective is to maintain a conservative financial solvency profile. Capital is managed for the Group as a whole.
| 2013 | 2012 | |
|---|---|---|
| Borrowings | 85,214 | 102,977 |
| Net interest-bearing debt | 63,016 | 81,997 |
| Liquidity reserve 1 | 80,182 | 75,874 |
1 Liquidity reserve is defined as undrawn committed revolving facilities, securities, cash and bank balances, including balances in countries with exchange control or other restrictions.
Based on the liquidity reserve, the size of the committed loan facilities, including loans for the financing of specific assets, the maturity of outstanding loans, and the current investment profile, the Group's financial resources are deemed satisfactory. The Group's long term objective is to maintain a conservative funding profile, matching that of a strong investment grade company over the business cycle, with a strong liquidity position in order to withstand fluctuations in the economy, and have the strength to exploit new and attractive investment opportunities.
The average term to maturity of loan facilities in the Group was about five years (about five years).
Amounts in DKK million
It is of great importance for the Group to maintain a financial reserve to cover the Group's obligations and investment opportunities and to provide the capital necessary to offset changes in the Group's liquidity due to changes in the cash flow from operating activities.
The flexibility of the financial reserve is subject to ongoing prioritisation and optimisation, among other things, by focusing on release of capital and following up on the development in working capital.
| Maturities of liabilities and commitments | Carrying amount |
Cash flows including interest | |||
|---|---|---|---|---|---|
| 0-1 year | 1-5 years | 5- years | Total | ||
| 2013 | |||||
| Bank and other credit institutions | 46,839 | 9,221 | 31,528 | 12,042 | 52,791 |
| Finance lease liabilities | 10,747 | 1,625 | 5,153 | 7,579 | 14,357 |
| Issued bonds | 27,628 | 8,490 | 13,714 | 10,467 | 32,671 |
| Trade payables | 29,124 | 29,124 | - | - | 29,124 |
| Other payables | 7,083 | 6,966 | 117 | - | 7,083 |
| Non-derivative financial liabilities | 121,421 | 55,426 | 50,512 | 30,088 | 136,026 |
| Derivatives | 1,631 | 945 | 516 | 170 | 1,631 |
| Total recognised in balance sheet | 123,052 | 56,371 | 51,028 | 30,258 | 137,657 |
| Operating lease commitments | 11,948 | 24,447 | 28,886 | 65,281 | |
| Capital commitments | 35,229 | 22,524 | 6,550 | 64,303 | |
| Total | 103,548 | 97,999 | 65,694 | 267,241 | |
| 2012 | |||||
| Bank and other credit institutions | 64,743 | 12,999 | 35,550 | 24,897 | 73,446 |
| Finance lease liabilities | 12,384 | 1,564 | 6,230 | 8,930 | 16,724 |
| Issued bonds | 25,850 | 980 | 20,243 | 9,124 | 30,347 |
| Trade payables | 34,730 | 34,730 | - | - | 34,730 |
| Other payables | 8,998 | 8,750 | 248 | - | 8,998 |
| Non-derivative financial liabilities | 146,705 | 59,023 | 62,271 | 42,951 | 164,245 |
| Derivatives | 1,851 | 541 | 1,179 | 131 | 1,851 |
| Total recognised in balance sheet | 148,556 | 59,564 | 63,450 | 43,082 | 166,096 |
| Operating lease commitments | 14,327 | 31,229 | 30,857 | 76,413 | |
| Capital commitments | 31,142 | 40,500 | 5,058 | 76,700 | |
| Total | 105,033 | 135,179 | 78,997 | 319,209 |
Amounts in DKK million
22 Commitments
As part of the Group's activities, customary agreements are entered into regarding charter and operating leases of ships, containers, port facilities, etc. The future charter and operating lease payments for continuing operations are:
| Maersk Line1 |
Maersk Oil |
APM Terminals |
Maersk Tankers1 |
Other | Total | |
|---|---|---|---|---|---|---|
| 2013 | ||||||
| Within one year | 7,558 | 960 | 1,386 | 1,293 | 751 | 11,948 |
| Between one and two years | 4,812 | 832 | 1,380 | 1,092 | 542 | 8,658 |
| Between two and three years | 3,516 | 791 | 1,388 | 911 | 239 | 6,845 |
| Between three and four years | 2,339 | 498 | 1,395 | 825 | 176 | 5,233 |
| Between four and five years | 1,482 | 16 | 1,310 | 776 | 127 | 3,711 |
| After five years | 2,029 | 41 | 23,811 | 2,492 | 513 | 28,886 |
| Total | 21,736 | 3,138 | 30,670 | 7,389 | 2,348 | 65,281 |
| Net present value 2 | 19,267 | 2,824 | 17,363 | 5,887 | 1,986 | 47,327 |
| 2012 | ||||||
| Within one year | 8,937 | 1,094 | 1,350 | 1,695 | 1,251 | 14,327 |
| Between one and two years | 6,189 | 919 | 1,199 | 1,416 | 887 | 10,610 |
| Between two and three years | 4,307 | 833 | 1,368 | 1,205 | 635 | 8,348 |
| Between three and four years | 3,333 | 779 | 1,380 | 1,021 | 302 | 6,815 |
| Between four and five years | 2,412 | 499 | 1,380 | 973 | 192 | 5,456 |
| After five years | 3,571 | 59 | 23,207 | 3,418 | 602 | 30,857 |
| Total | 28,749 | 4,183 | 29,884 | 9,728 | 3,869 | 76,413 |
| Net present value 2 | 25,124 | 3,683 | 16,501 | 7,716 | 3,331 | 56,355 |
1 About one-third of the time charter payments in Maersk Line and in Maersk Tankers are estimated to relate to operational costs for the assets. 2The net present value has been calculated using a discount rate of 6% (6%).
Total operating lease costs incurred and contingent payments related to volume, etc., are stated in note 2.
| Capital commitments | Maersk Line |
Maersk Oil |
APM Terminals |
Maersk Drilling |
Other | Total |
|---|---|---|---|---|---|---|
| 2013 | ||||||
| Capital commitments relating to | ||||||
| acquisition of non-current assets | 11,511 | 8,865 | 7,200 | 15,040 | 2,394 | 45,010 |
| Commitments towards concession grantors | - | 9,478 | 9,815 | - | - | 19,293 |
| Total capital commitments | 11,511 | 18,343 | 17,015 | 15,040 | 2,394 | 64,303 |
| 2012 | ||||||
| Capital commitments relating to | ||||||
| acquisition of non-current assets | 19,211 | 9,757 | 3,925 | 19,118 | 2,084 | 54,095 |
| Commitments towards concession grantors | - | 9,561 | 13,044 | - | - | 22,605 |
| Total capital commitments | 19,211 | 19,318 | 16,969 | 19,118 | 2,084 | 76,700 |
The decrease in capital commitments is primarily related to contractual payments during 2013.
| No. | |||||
|---|---|---|---|---|---|
| Newbuilding programme | 2014 | 2015 | 2016 | 2017- | Total |
| Container vessels | 9 - |
7 - |
- 4 |
- - |
16 4 |
| Tanker vessels Rigs and drillships |
6 | 1 | 1 | - | 8 |
| Anchor handling vessels, tugboats and standby vessels, etc. | 9 | 3 | - | - | 12 |
| Total | 24 | 11 | 5 | - | 40 |
| DKK million |
||||||
|---|---|---|---|---|---|---|
| Capital commitments relating to | ||||||
| the newbuilding programme | 2014 | 2015 | 2016 | 2017- | Total | |
| Container vessels | 7,052 | 4,404 | - | - | 11,456 | |
| Tanker vessels | 74 | 149 | 521 | - | 744 | |
| Rigs and drillships | 10,578 | 1,497 | 2,328 | - | 14,403 | |
| Anchor handling vessels, tugboats and standby vessels, etc. | 646 | 326 | - | - | 972 | |
| Total | 18,350 | 6,376 | 2,849 | - | 27,575 |
DKK 27.6bn (USD 5.1bn) of the total capital commitments is related to the newbuilding programme for ships, rigs, etc., at a total contract price of DKK 43.8bn (USD 8.1bn) including owner-furnished equipment. The remaining capital commitments of DKK 36.7bn (USD 6.8bn) relate to investments mainly in APM Terminals and Maersk Oil.
The capital commitments will be financed by cash flow from operating activities as well as existing and new loan facilities.
Amounts in DKK million
Except for customary agreements within the Group's activities, no material agreements have been entered into that will take effect, change or expire upon changes of the control over the Company.
The necessary facility of DKK 2.1bn (DKK 2.2bn) corresponding to USD 380m (USD 380m) has been established in order to meet the requirements for trading in the USA under the American Oil Pollution Act of 1990 (Certificate of Financial Responsibility).
Maersk Line and APM Terminals have entered into certain agreements with terminals and port authorities, etc. containing volume commitments including an extra payment in case minimum volumes are not met.
When exploring or producing oil in foreign countries, each subsidiary is generally liable for contractual obligations jointly with the other consortium parties.
The Group is involved in a number of legal disputes. The Group is also involved in tax disputes in certain countries. Some of these involve significant amounts and are subject to considerable uncertainity.
Tax may crystallise if the companies leave the tonnage tax regimes and on repatriation of dividends. Through participation in joint taxation scheme with A.P. Møller Holding A/S, the Group is jointly and severally liable for taxes payable.
| 2013 | 2012 | ||
|---|---|---|---|
| Change in working capital | |||
| Inventories | 1,165 | -450 | |
| Trade receivables | 2,457 | -2,525 | |
| Other receivables and prepayments | -327 | -130 | |
| Trade payables and other payables, etc. | -1,573 | -1,082 | |
| Exchange rate adjustment of working capital | -306 | -235 | |
| Total | 1,416 | -4,422 | |
| Purchase of intangible assets and property, plant and equipment | |||
| Addition | -39,621 | -43,120 | |
| Addition, assets held for sale | - | -39 | |
| Of which finance leases, etc. | 3 | - | |
| Of which borrowing costs capitalised on assets | 988 | 318 | |
| Change in payables to suppliers regarding purchase of assets | 923 | -827 | |
| Change in provision for abandonment | 2,529 | 60 | |
| Total | -35,178 | -43,608 | |
| Other financial investments | |||
| Capital increases and acquisition of shares in joint ventures | -141 | -5,003 | |
| Sale of shares in joint ventures | 262 | 445 | |
| Capital increases and acquisition of shares in associated companies | -237 | -2,378 | |
| Sale of shares in associated companies | 1,634 | -1 | |
| Purchase of non-current assets available-for-sale | -1 | -1 | |
| Sale of non-current assets available-for-sale | 53 | 134 | |
| Loan repayments received | 1,027 | 326 | |
| Loans granted | -762 | -570 | |
| Total | 1,835 | -7,048 |
Other non-cash items related primarily to adjustment of provision for bad debt regarding trade receivables.
Amounts in DKK million
| Cash flow used for acquisitions | 2013 | 2012 |
|---|---|---|
| Fair value at time of acquisition | ||
| Intangible assets | 39 | 1,803 |
| Property, plant and equipment | 155 | 186 |
| Financial assets | 16 | 4 |
| Current assets | 39 | 366 |
| Provisions | -1 | -5 |
| Liabilities | -74 | -841 |
| Net assets acquired | 174 | 1,513 |
| Non-controlling interests | -33 | - |
| A.P. Møller - Mærsk A/S' share | 141 | 1,513 |
| Goodwill | - | 235 |
| Purchase price | 141 | 1,748 |
| Contingent consideration assumed | - | -61 |
| Purchase price paid in prior years | -26 | - |
| Cash and bank balances assumed | -4 | -19 |
| Cash flow used for acquisition of subsidiares and activities | 111 | 1,668 |
No acquisitions of subsidiaries or activities, to an extent of any significance to the Group, were undertaken in 2013.
If acquisitions during the year had occurred on 1 January 2012, the Group's revenue and profit would not have been materially different.
On 4 January 2012, the Group acquired 100% of the shares in Skandia Container Terminal AB, which operates the port of Gothenburg, Sweden. The acquisition will strengthen APM Terminals' position in Scandinavia.
The total purchase price was DKK 1,363m. The net assets acquired consist of terminal rights of DKK 1,627m, property, plant and equipment of DKK 182m , current assets of DKK 111m and liabilities of DKK 557m.
From the acquisition date to 31 December 2012, Skandia Container Terminal AB contributed with a revenue of DKK 540m and a profit of DKK 63m.
| Cash flow from sale | 2013 | 2012 | |
|---|---|---|---|
| Carrying amount | |||
| Intangible assets | 1 | 89 | |
| Property, plant and equipment | 9 | 8,076 | |
| Financial assets | 1 | 15 | |
| Deferred tax assets | 1 | 5 | |
| Current assets | 398 | 554 | |
| Provisions | -7 | -5 | |
| Liabilities | -201 | -521 | |
| Net assets sold | 202 | 8,213 | |
| Non-controlling interests | -4 | -27 | |
| A.P. Møller - Mærsk A/S' share | 198 | 8,186 | |
| Gain/loss on sale | 250 | 984 | |
| Proceeds from sale | 448 | 9,170 | |
| Change in receivable proceeds, etc. | -178 | - | |
| Non-cash items | -39 | -68 | |
| Cash and bank balances sold | -79 | -223 | |
| Cash flow from sale of subsidiaries and activities | 152 | 8,879 |
Sales during 2013 primarily comprise Bridge Terminal Transport Inc., Brigantine International Holdings Limited and Brigantine Services Limited.
Sales during 2012 primarily comprised Maersk LNG A/S and Maersk Equipment Service Company, Inc.
Non-current assets sold include assets that were previously classified as assets available for sale.
Amounts in DKK million
| Associated companies |
Joint ventures | Management 1 | ||||
|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| Revenue | 7 | 62 | 370 | 120 | - | - |
| Operating costs | 1,201 | 1,141 | 3,860 | 2,210 | 78 2 |
89 2 |
| Remuneration to management | - | - | - | - | 143 | 184 |
| Other income | - | - | - | - | 11 | 11 |
| Financial income | 298 | 434 | 36 | 8 | - | - |
| Financial expenses | 29 | 5 | 4 | 2 | - | - |
| Derivatives, non-current | 116 | 87 | - | - | - | - |
| Other receivables, non-current | 22 | 859 | 502 | 334 | - | - |
| Trade r eceivables | 129 | 274 | 213 | 179 | 66 2 |
- |
| Derivatives, current | 110 | 83 | - | - | - | - |
| Other receivables, current | 195 | 59 | 639 | 96 | - | - |
| Securities | - | 83 | - | - | - | - |
| Cash and bank balances | 1,911 | 1,652 | - | - | - | - |
| Derivatives, non-current | 206 | 541 | - | - | - | - |
| Bank and other credit institutions, etc., current | 2 | 6 | 145 | 68 | 23 | 22 |
| Trade payables | 141 | 134 | 531 | 271 | 2 | 13 |
| Derivatives, current | 290 | 3 | - | - | - | - |
| Other payables, current | 5 | 40 | - | - | - | - |
| Purchase of property, plant and equipment, etc. | - | - | - | - | - | 18 |
| Capital increases | 237 | 1,659 | 257 | - | - | - |
| Dividends | 381 | 361 | 1,130 | - | - | - |
1 The Board of Directors and the Executive Board in A.P. Møller - Mærsk A/S, A.P. Møller Holding A/S, A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal and their close relatives (including undertakings under their significant influence). Trade receivables and payables include customary business related accounts in connection with shipping activities.
2 Includes commission and commercial receivables to Maersk Broker K/S from chartering, purchase and sale of ships as well as time charter hire to part owners.
A.P. Møller Holding A/S , Copenhagen, Denmark has control over the Group, of which A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal is the ultimate owner. Related parties also include the companies in which the Group exercises significant influence.
One (one) member of the Executive Board participates in one (one) shipping partnership with one vessel that is operated as part of the A.P. Moller - Maersk fleet. The Group owns more than 50% (50%) of the vessel and holds the ultimate control. The vessel is operated directly in the market, and all transactions between related parties and the Group are subject to arm's length conditions.
Amounts in DKK million
During the year DKK 0m (DKK 1m) has been expensed regarding office rent and shares of DKK 2m (DKK 0m) have been sold to the A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal.
In relation to Danske Bank's arrangement of payment transactions, sale and purchase of securities, etc. only the related costs are included in the above.
None of the Executive Board members bought any share options during 2013. During 2012 three members of the Executive Board bought 792 share options in total corresponding to a fair value of DKK 7m. Further information is provided in note 14.
Dividends distributed are not included.
The consolidated financial statements for 2013 for the A.P. Moller – Maersk Group have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies. In addition, the consolidated financial statements have been prepared in accordance with IFRS issued by the International Accounting Standards Board (IASB).
The accounting policies are, apart from the below, consistent with those applied in the consolidated financial statements for 2012. New financial reporting requirements, which will come into effect in coming years, are outlined in note 29.
Due to reduced activity management has in the segment reporting reclassified Maersk FPSOs and Maersk LNG into Other businesses.
As of 1 January 2013, the Group has implemented IFRS 11 Joint Arrangements with consequential amendments to IAS 28 Investments in Associates and Joint Ventures. In addition, the following have been implemented: IFRS 10, IFRS 12, IFRS 13 as well as amendments to IFRS 7, IAS 1, IAS 19, IAS 27 and Annual Improvements to IFRSs 2009-2011. Furthermore, bank overdrafts are now deducted from cash and cash equivalents where overdraft facilities form an integral part of the Group's cash management, cf. the cash flow statement. Recognition and measurement changes are described below while the other changes mainly concern presentation and disclosure requirements.
IFRS 11 Joint Arrangements replaces IAS 31 Interests in Joint Ventures and entails agreements on joint management to be classified as joint ventures or joint operations on the basis of the contracting parties' rights and obligations. Joint ventures are no longer recognised proportionately, but according to the equity method, similar to associated companies. Joint operations will however continue to be recognised relative to the economic interest in income, expenses, assets and liabilities. The classification principles are described below under Consolidation.
The Group's joint ventures are mainly found in APM Terminals, Maersk Drilling and Svitzer, whereas all joint arrangements in Maersk Oil are classified or treated as joint operations. The activities of vessels that are part of pool arrangements are treated as joint operations. Previously, these earnings were recognised net in revenue based on time charter equivalents.
With a few exceptions, including A.P. Møller – Mærsk A/S's share of profit and equity, all items of the Group's financial statement are affected by the change, although not significantly. Comparative figures have been restated. The effect on the consolidated balance sheet is presented in note 31.
IAS 19 Employee Benefits modifies the method for calculating the financing element of the period's pension costs for defined benefit obligations. Comparative figures are not restated as the change is immaterial to the Group.
As permitted, the Group has early-adopted the amendments to IAS 36 regarding disclosures on recoverable amounts and fair values used in impairment tests.
The consolidated financial statements comprise the parent company A.P. Møller - Mærsk A/S, its subsidiaries and proportionate shares in joint arrangements classified as joint operations.
Subsidiaries are entities controlled by A.P. Møller - Mærsk A/S. Control is based on the power to direct the relevant activities of an entity and the exposure, or right, to variable returns arising from it. In that connection relevant activities are those that significantly affect the investee's returns. Control is usually achieved by directly or indirectly owning or commanding more than 50% of the voting rights or by other rights, such as agreements on management control.
Joint arrangements are entities in which the Group, according to contractual agreements with one or more other parties, has joint control. The arrangements are classified as joint ventures, if the contracting parties' rights are limited to net assets in the separate legal entities, and as joint operations, if the parties have direct and unlimited rights to the assets and obligations for the liabilities of the arrangement.
Entities in which the Group exercises a significant but non-controlling influence are considered to be associated companies.
A significant influence is usually achieved by directly or indirectly owning or controlling 20-50% of the voting rights. Agreements and other circumstances are considered when assessing the degree of influence.
Consolidation is performed by summarising the financial statements of the parent company and its subsidiaries, inclusive of the proportionate share of accounts related to joint operations, part-owned vessels and pool arrangements, which have been prepared in accordance with the Group's accounting policies. Intra-group income and expenses, shareholdings, dividends, intra-group balances and gains on intra-group transactions are eliminated. Unrealised gains on transactions with associated companies and joint arrangements are eliminated in proportion to the Group's ownership share. Unrealised losses are eliminated in the same way, unless they indicate impairment.
Non-controlling interests' share of profit or loss for the year and of equity in subsidiaries which are not wholly owned is included as part of the Group's profit and equity respectively, but shown as separate items.
Upon acquisition of new entities, the acquired assets, liabilities and contingent liabilities are measured at fair value at the date control was achieved using the acquisition method. Identifiable intangible assets are recognised if they arise from a contractual right or can otherwise be separately identified. The difference between the fair value of the acquisition cost and the fair value of acquired identifiable net assets is recognised as goodwill under intangible assets. Any subsequent changes to contingent acquisition costs are recognised as other income or other costs in the income statement. Transaction costs are recognised as operating costs as they are incurred.
In business combinations achieved in stages, value adjustments of previously recognised investments are recognised in the income statement. When surrendering control, the value of any retained investment is adjusted at fair value and the value adjustment is recognised in the income statement as gain on sale of non-current assets, etc., net. The effect of the purchase and sale of non-controlling interests without changes in control is included directly in equity.
The Group uses DKK as its presentation currency. In the translation to the presentation currency for entities with a functional currency different from DKK, the statement of comprehensive income is translated into DKK at average exchange rates and the balance sheet is translated at the exchange rates as at the balance sheet date. Exchange differences arising from such translations are recognised directly in other comprehensive income.
The functional currency varies from business area to business area. For the Group's principal shipping and drilling activities and oil and gas activities, the functional currency is USD. This means that, among other things, the carrying amounts of property, plant and equipment and intangible assets and, hence, depreciation and amortisation are maintained in USD from the date of acquisition. For other activities, including container terminal activities and land-based container activities, the functional currency is generally the local currency in the country in which such activities are performed.
Transactions in other currencies than the functional currency are translated at the exchange rate prevailing at the date of the transaction. Monetary items in foreign currencies not settled at the balance sheet date are translated at the exchange rate as at the balance sheet date. Foreign exchange gains and losses are included in the income statement as financial income or expenses.
Derivative financial instruments are recognised on the trading date and measured at fair value using generally acknowledged valuation techniques based on relevant observable swap curves and exchange rates.
The effective portion of changes in the value of derivative financial instruments designated to hedge future transactions is recognised directly in other comprehensive income until the hedged transactions are realised. At that time, the cumulated gains/losses are transferred to the items under which the hedged transactions are recognised. The effective portion of changes in the value of derivative financial instruments used to hedge the value of recognised financial assets and liabilities is recognised in the income statement together with changes in the fair
value of the hedged assets or liabilities which can be attributed to the hedging relationship. The ineffective portion of hedge transactions, including time value for oil price hedges, and changes in the fair values of derivative financial instruments, which do not qualify for hedge accounting are recognised in the income statement as financial income or expenses for financial instruments, and as other income/costs for oil price hedges and forward freight agreements.
The allocation of business activities into segments reflects the Group's character as a conglomerate and is in line with the internal management reporting. Some activities are related, but are managed as independent units. The segments are as follows:
| Maersk Line | Global container services |
|---|---|
| Maersk Oil | Oil and gas production and exploration activities |
| APM Terminals | Container terminal activities, inland transportation, container depots and repair of containers, etc. |
| Maersk Drilling | Offshore drilling activities and operation of land-rigs through 50% ownership of Egyptian Drilling Company |
| Maersk Supply Service | Supply vessel activities with anchor handling and platform supply vessels, etc. |
| Maersk Tankers | Tanker shipping of crude oil, oil products and gas |
| Damco | Logistic and forwarding activities |
| Svitzer | Towing and salvage activities, etc. |
In addition, the Group comprises Other businesses, which does not constitute a reportable segment. This includes, inter alia, investments in the associated companies Danske Bank, Höegh Autoliners and DFDS. Revenue from Other businesses consists mainly of income from sale of containers, air freight, and services sold to the energy industry.
The reportable segments do not comprise costs in group functions. Also, oil hedging activities in Maersk Oil Trading and the results of Maersk Oil Trading's trading activity in the form of purchasing bunker and lubricating oil on behalf of entities in the Group are not allocated to business segments.
Revenue between segments is limited except for Terminal activities and Damco, which deliver a large part of their services to the Group's container shipping activities. Sales of products and services between segments are based on market terms.
Segment profit or loss (NOPAT), assets and liabilities comprise items directly related to or which can be allocated to segments. With no effect on the Group, long-term agreements between segments on reserved capacity in container terminals are treated as operating leases, where under IFRS they are classified as finance leases (cf. IFRIC 4). Financial assets and liabilities and financial income and expenses are not attributed to business segments.
Revenue from sale of goods is recognised upon the transfer of risk to the buyer.
Revenue from shipping activities is recognised as the service is rendered, by which incomplete voyages are recognised at the share related to the financial year.
Oil and gas sales are recognised as revenue upon discharge from the production site. In agreements where tax is settled in oil, this tax is recognised both as revenue and tax.
Revenue from terminal operations, logistics, forwarding activities and towing activities is recognised upon completion of the service. In container terminals operated under certain restrictive terms of pricing and service, etc., the value of tangible assets constructed on behalf of the concession grantor is also included. For drilling activities, which are typically carried out under long-term agreements with fixed day rates, revenue is recognised for the production time related to the financial year.
Lease income from operational leases is recognised over the lease term.
Exploration costs in the oil and gas activities are recognised as operating costs as they are incurred.
Share in profits of associated companies and joint ventures is recognised net of tax and corrected for the share of unrealised intragroup gains and losses. The item also comprises any impairment losses for such investments, including goodwill, and their reversal.
Tax comprises the amount estimated to be paid for the year, as well as adjustments to previous years and deferred tax. The tax amount includes the special taxes relating to extraction and production of hydrocarbons, including the profit share to the Danish State and tax on income subject to Danish and foreign tonnage taxation etc.
Other comprehensive income consists of income and costs not recognised in the income statement, including exchange rate adjustments arising from the translation from functional currency to presentation currency, adjustment of other equity investments and hedging instruments to fair value and actuarial gains or losses on defined benefit plans, etc. The Group's share of other comprehensive income in associated companies and joint ventures is also included.
In the event of disposal or discontinuation of an entity, the Group's share of the accumulated exchange rate adjustment relating to the relevant entity is reclassified to the income statement. Accumulated value adjustments of securities are transferred to the income statement in the event of sale or when an impairment loss is deemed to be unrecoverable.
Actual and deferred tax relating to other comprehensive income are included.
Intangible assets are measured at cost less accumulated amortisation and impairment losses. Amortisation is calculated on a straight-line basis over the estimated useful lives of the assets. Intangible assets in connection with acquired oil resources (concession rights, etc.) are amortised from the commencement of production until the fields' expected production periods ends – a period of up to 15 years. Acquired exploration rights are amortised from the date of acquisition for a period of up to five years. IT software is amortised over a useful life of 3-5 years. Goodwill and other intangible assets with indefinite useful lives are not amortised, but impairment tests are prepared at least annually, starting in the year of acquisition. Goodwill is attributed to cash-generating units.
For container terminals operated under certain restrictive price and service conditions, etc., concessional rights to collect usage charges are included under intangible assets. The cost includes the present value of minimum payments under concession agreements and the cost of property, plant and equipment constructed on behalf of a grantor of a concession. The rights are amortised from the commencement of operations over the concession period.
Property, plant and equipment are valued at cost less accumulated depreciation and impairment losses. Depreciation is charged to the income statement on a straight-line basis over the useful lives at an estimated residual value. The useful lives of new assets are typically as follows:
| Ships, rigs, etc. | 20-25 years |
|---|---|
| Containers etc. | 12 years |
| Buildings | 10-50 years |
| Terminal infrastructure | over lease or concession period |
| Plant and machinery, cranes and other terminal equipment | 5-20 years |
| Other operating equipment, fixtures, etc. | 3-7 years |
| Oil and gas production facilities, etc. – based on the expected production periods of the fields | up to 15 years |
Estimated useful lives and residual values are reassessed on a regular basis.
The cost of an asset is divided into separate components which are depreciated separately if the useful lives of the individual components differ. Dry-docking costs are recognised in the carrying amount of ships, rigs, etc. when incurred and depreciated over the period until the next drydocking. For oil production facilities, including facilities under construction, where oil is received as payment for the investment (cost oil), depreciation generally takes place concurrently with the receipt of cost oil.
The cost of assets constructed by the Group includes direct and indirect expenses. For assets with a long construction period, borrowing costs during the construction period from specific as well as general borrowings are attributed to cost. In addition, the cost includes the net present value of estimated costs of abandonment, removal and restoration.
Assets held under finance leases are treated as property, plant and equipment.
Impairment losses are recognised when the carrying amount of an asset or a cash-generating unit exceeds the higher of the estimated value in use and fair value less costs to sell. Goodwill is fully impaired before other assets in a cash-generating unit.
Investments in associated companies and joint ventures are recognised as the Group's share of the equity value measured according to the Group's accounting policies inclusive of goodwill less any impairment losses. Goodwill is an integral part of the value of associated companies and joint ventures and is therefore subject to an impairment test together with the investment as a whole. Impairment losses are reversed to the extent the original value is regained.
Securities, including shares, bonds and similar securities, are recognised on the trading date at fair value and subsequently measured at the quoted market price for listed securities and at estimated fair value for other securities. Securities that form part of the liquidity resources (Held for trading) are classified as current assets and value adjustments are recognised in the income statement under financial items. Other equity investments are classified as non-current assets (the category Available-for-sale) where unrealised value adjustments are recognised in other comprehensive income.
Inventories are measured at cost, primarily according to the FIFO method. Write-down is made to net realisable value if lower. The cost of finished goods and work in progress includes direct and indirect production costs.
Receivables are generally recognised at nominal value, which in all material respects corresponds to amortised cost. Non-current receivables are recognised at present value, including finance lease receivables. Write-down is made for anticipated losses based on specific individual or group assessments.
Equity includes total comprehensive income for the year comprising the profit or loss for the year and other comprehensive income. Proposed dividend for distribution is included as a separate component of equity until the declaration date. Proceeds on the purchase and sale of own shares and dividend from such shares are recognised in equity, including proceeds on the disposal of own shares in connection with the exercise of share options.
The translation reserve comprises the Group's share of accumulated exchange rate differences arising on translation from functional currency into presentation currency. The reserve for other equity investments comprises accumulated changes in the fair value of securities in the category Available-for-sale. The reserve for hedges includes the accumulated net change in the fair value of hedging transactions qualifying for cash flow hedge accounting.
Share options and restricted shares allocated to the executive employees of the Group as part of the Group's long-term incentive programme are recognised as staff costs over the vesting period at estimated fair value at the grant date. The counter item is equity. The fair value of share options is calculated on the basis of the Black & Scholes formula.
Provisions are recognised when the Group has a current legal or constructive obligation and include provisions for abandonment of oil fields, restructuring costs, legal disputes, onerous contracts, etc. Provisions are recognised on the basis of best estimates and considering discounting when the time element is significant.
Pension obligations, which are defined benefit plans, are recognised based on actuarial valuations of the obligations and the fair value of the assets in the plans. The pension cost charged to the income statement consists of calculated amounts for vested benefits and interest in addition to settlement gains or losses, etc. Interest on plan assets is calculated with the same rates as used for discounting pension obligations. Actuarial gains and losses are recognised in other comprehensive income. Costs regarding defined contribution pension and insurance plans are recognised as incurred.
Pension plans where the Group, as part of collective bargaining agreements, participates together with other enterprises – so called multiemployer plans – are treated as other pension plans in the financial statements. For defined benefit multi-employer plans where sufficient information to apply defined benefit accounting is not available, the plans are treated as defined contribution plans.
Deferred tax is calculated on differences between the carrying amount and tax base of assets and liabilities. Deferred tax is not provided on goodwill which is not deductible or depreciable for tax purposes, or temporary differences which have no effect on the accounting results or taxable income at the time of the transaction. In addition, deferred tax is not calculated for differences relating to investments in subsidiaries, associated companies and joint ventures to the extent that taxable dividends are unlikely in the foreseeable future. Deferred tax assets are recognised to the extent that it is probable that they can be utilised within a foreseeable future.
Financial liabilities are initially recognised at fair value less transaction costs. Subsequently the financial liabilities are measured at amortised cost using the effective interest method, whereby transaction costs and any premium or discount are recognised as financial expenses over the term of the liabilities. Fixed interest loans which under hedge accounting are swapped to variable interest are measured at amortised cost adding or deducting the fair value of the hedged interest component. Liabilities in respect of finance leases are recognised in the balance sheet as borrowings.
Cash flow for the year is divided into cash flow from operating activities, cash flow used for investing activities and cash flow from financing activities. Cash and cash equivalents comprise cash and bank balances net of bank overdrafts where overdraft facilities form an integral part of the Group's cash management. Changes in marketable securities are included in cash flow used for investing activities.
Discontinued operations represent a separate major line of business disposed of or in preparation for sale. The results of discontinued operations are presented separately in the income statement and comparative figures are restated. Similarly, assets and related liabilities from discontinued operations are presented as separate items in the balance sheet, and the cash flows from discontinued operations are presented separately in the cash flow statement.
Individual assets or groups of assets that are to be disposed of collectively are classified as assets held for sale, when the activities to carry out such a sale have been initiated and the activities are expected to be disposed of within 12 months. Liabilities that are directly related to assets held for sale are presented correspondingly.
Assets and liabilities from discontinued operations and assets held for sale except financial assets, etc., are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets held for sale are not depreciated.
Return on equity is calculated as the profit or loss for the year divided by the average equity.
Equity ratio is calculated as the equity divided by total assets.
Return on invested capital after tax (ROIC) is the profit or loss for the year before interest but after calculated tax, divided by the quarterly average invested capital (equity plus net interest-bearing debt).
The segments' return on invested capital after tax (ROIC) is net operating profit or loss after tax (NOPAT) divided by the quarterly average invested capital, net (assets less liabilities).
Earnings per share and cash flow from operating activities per share comprise A.P. Møller - Mærsk A/S' share of the profit or loss for the year respectively the cash flow from operating activities divided by the number of shares (of DKK 1,000 each), excluding the Group's holding of own shares.
Diluted earnings per share are adjusted for the dilution effect of issued share options.
Total market capitalisation is the total number of shares – excluding the Group's holding of own shares – multiplied by the end-of-year price quoted by NASDAQ OMX Copenhagen.
When preparing the consolidated financial statements for the Group, the management undertakes a number of accounting estimates and judgements to recognise, measure and classify the Group's assets and liabilities.
The most significant areas subject to estimates and judgements are mentioned below.
Intangible assets and property, plant and equipment are tested for impairment, if there is an indication of impairment. However, annual impairment tests are always carried out for goodwill and other intangible assets with indefinite useful lives as well as intangible assets that are not yet in use, except oil concession rights in scope of IFRS 6. Impairment losses are recognised when the carrying amount exceeds the higher of fair value less costs to sell and estimated value in use.
Fair value is sought to be obtained for active markets for corresponding assets or determined on the basis of other observable input. As far as possible, the estimated fair value of ships, rigs and properties is obtained using acknowledged brokers. However, it is not possible to determine reliable fair value for certain types of ships in the current market with continued low trading activity.
The estimated value in use is computed on the basis of the expected free cash flow from the relevant cash-generating unit based on updated business plans for the next five years or the remaining useful lives for assets operating under contracts. The calculated value in use is based on a number of assumptions and is by nature subject to uncertainty. For oil concession rights the value will primarily depend on conclusions regarding the commercial prospects. The values in use for the tanker activities are based on future expectations, which have been adjusted downwards and consequently impairment losses are recognised. Assumptions are described in notes 6 and 7.
The determination and delimitation of cash-generating units differ for the various business areas. For integrated network businesses such as Maersk Line and Safmarine, the container shipping activities are considered to be a single cash-generating unit. For the oil and gas activities, connected oil and gas fields are considered to be cash-generating units, and for offshore drilling activities and other shipping activities, the cash-generating unit is often the individual asset. Maersk Tankers and Maersk Supply Service group vessels according to type, size, etc. in accordance with the structure governing the management's ongoing follow-up.
The useful lives and residual values of intangible assets and property, plant and equipment are reassessed regularly based on available information. In this connection, the long term view is prioritised, in order to disregard to the extent possible temporary market fluctuations, which may be significant. Changes to estimates of useful lives and residual values may affect the annual depreciation and amortisation and thereby the results for the year significantly.
To a certain extent, the classification of entities partly owned by enterprises outside the Group, and thereby how the entities are accounted for in the consolidated financial statements, is based on a judgement of the formal and actual conditions and clauses in shareholders' agreements, etc.
The assessment of control in oil and gas activities entails analysis of the status of operators in joint arrangements. Operators are responsible for the daily management of the activities carried out within the jointly established framework. Since operators are not exposed to, and have no right to, returns beyond the participating share, and since they can be replaced by agreement, the operators are regarded as agents as defined in IFRS 10. Operators of pool arrangements in shipping are assessed similarly.
When assessing joint control, an analysis is carried out on the decisions that require unanimity and on whether these relate to the relevant activities that significantly affect the returns. Joint control is deemed to exist when business plans, work programmes and budgets are unanimously adopted. Within oil and gas activities, an assessment of joint control is carried out for each phase. These are typically exploration and development, production and decommissioning. Unanimity is often not required during the production phase. Given that the contracting parties have direct and unrestricted rights and obligations in the arrangements' assets or liabilities regardless of voting rights, assessment of joint control does not affect recognition, measurement or presentation, and the arrangements are, therefore, handled in the same way as joint operations during all phases.
For pool arrangements in shipping, no unanimity is required in decisions on relevant activities. However, the contracting parties have direct and unrestricted rights and obligations in the unit's assets or liabilities, and as the pool arrangements are not structured into separate legal entities, they are treated in the same way as joint operations.
The allocation of the acquisition cost to the fair value of the acquired assets, liabilities and contingent liabilities and thus to goodwill, including the allocation to cash-generating units, may have a significant impact on future profits. Fair values are based on estimates using information available at the time control was achieved. When part of the acquisition cost for entities acquired is dependent on the development in future profits, estimates are made of the most probable value of the contingent acquisition cost based on current forecasts.
Lease contracts are classified as operating or finance leases at the inception of the lease. Once determined, the classification is not subsequently changed unless there are changes to the contract documents.
Contracts which transfer all significant risks and benefits associated with the underlying asset to the lessee are classified as finance leases. This usually applies to long-term lease contracts or where ownership is transferred to the lessee at the expiry of the lease term. All conditions in a contract are assessed and the classification depends to a certain extent on judgement based on the actual circumstances of the agreement.
The value of assets held under finance leases recognised in the balance sheet is based on the discounted value of the contractual lease payments. No contingent lease payments are included and the value can therefore be determined reliably. Uncertainty relating to the useful lives and residual values of assets and the impairment test principles is the same for assets held under finance leases as for own assets.
Deferred tax assets are recognised and measured to the extent they are expected to be realisable within the foreseeable future. Tax assets, which can only be utilised in the longer term, are deemed to be uncertain and are not recognised.
Provisions for bad debt and write-downs of receivables are carried out on the basis of an assessment of their recoverability at the balance sheet date. Trade receivables are grouped on the basis of maturity analyses for the purpose of providing for bad debt. In special circumstances trade receivables are impaired individually. Other receivables, including loans, are written-down on the basis of an assessment of the individual debtor's credit rating. An analysis of overdue trade receivables and movement in the provisions for bad debt can be found in note 21. The writedowns of non-current receivables recognised in the period can be found in note 4.
The gross liability for defined benefit plans, etc. is based on a number of actuarial assumptions such as discount rates, future inflation, the future rate of salary and pension increases, and mortality rates. External actuaries are used for measuring the gross liabilities. Even modest changes to the actuarial assumptions may result in significant changes in the pension liability.
Plan assets that are used only to meet the obligations are set off against the gross liability. Assets are measured at fair value by fund administrators and comprise cash, securities, real estate, etc. Where there is not an active market for the assets, the fair value is estimated. The less liquid the assets, the greater the uncertainty related to the measurement. The composition of the assets can be found in note 16.
When establishing oil and gas production facilities, provisions are made for the cost of the disposal of the facilities and re-establishment of the sea bed according to the rules which apply to the individual concession areas. The assumptions for the provisions are reassessed annually. A significant part of the liability is not realised until after 20-30 years and consequently the calculation of the liability, including the assumptions applied, is associated with significant uncertainty.
The most significant assumptions are:
The management's estimate of the provisions in connection with legal disputes, including disputes on taxes and duties, is based on the knowledge available on the actual substance of the cases and a legal assessment of these. Due to the nature of legal disputes, the outcome of these is subject to considerable uncertainty.
The amount comprises inter alia estimated provisions for onerous contracts, guarantee obligations and provisions for incurred, but not yet reported, incidents under certain insurance programmes, primarily in the USA.
The Group expects to implement the following new standards when they become mandatory:
IFRS 9 is a new standard for financial instruments that is ultimately intended to replace IAS 39 in its entirety. The project consists of three phases: classification and measurement of financial assets and liabilities, hedge accounting and impairment methodology.
Under IFRS 9, all recognised financial assets will be measured at either amortised cost or fair value, depending on the objective for holding the assets and the instruments' characteristics, but the options for classification and reclassification have been limited. The principles for classification and measurement of financial liabilities were carried forward almost unchanged to IFRS 9.
In 2013 the chapter on hedging was published. The new principles align hedge accounting more closely with financial risk management and establish a more principle-based approach to hedge accounting. IFRS 9 increases the scope of items eligible for hedge accounting. For example, a group of items or a net position may be designated hedged items. The new Standard does not fundamentally change the types of hedging relationships.
The IASB has removed the mandatory effective date for IFRS 9. The date will be set once the standard is final.
The Group's current practice of classifying and recognising gains and losses in the income statement and other comprehensive income can be retained under IFRS 9, observing the changed rules on recycling of value adjustments recognised in other comprehensive income. The effect of the new hedge accounting principles is undetermined at this point in time.
IFRIC 21 Levies, effective from 2014, is an interpretation of when levies imposed by the state or other public authorities shall be recognised as a liability. The interpretation can have an effect on the accrual of levies in certain jurisdictions. The effect on the Group is undetermined at this point in time.
Some of the above changes have not yet been endorsed by the EU. The standards endorsed by the EU with a later effective date than the corresponding effective date from the IASB are pre-implemented and thus comply with the IASB's effective date.
7 January 2014 the Group entered into an agreement to sell 48.68% of the shares in Dansk Supermarked A/S and 18.72% of the shares in F. Salling A/S. The accounting gain of the Group is expected to be around DKK 14bn depending on the timing of closing of the transaction. The transaction will generate cash proceeds of around DKK 17bn. The Group will retain 19% ownership share after the transaction.
Amounts in DKK million
| 31 December | 1 January | |
|---|---|---|
| 2012 | 2012 | |
| Intangible assets | -6,230 | -2,408 |
| Ships, rigs, containers, etc. | -3,774 | -3,911 |
| Production facilities and equipment, etc. | -4,630 | -2,482 |
| Land and buildings | -1,487 | -1,658 |
| Construction work in progress and payment on account | -3,358 | -2,405 |
| Property, plant and equipment | -13,249 | -10,456 |
| Investments in joint ventures | 11,381 | 6,908 |
| Investments in associated companies | -2 | -1 |
| Other equity investments | - | - |
| Derivatives | - | -1 |
| Pensions, net assets | - | - |
| Other receivables | -102 | 347 |
| Financial non-current assets | 11,277 | 7,253 |
| Deferred tax | -481 | -450 |
| Total non-current assets | -8,683 | -6,061 |
| Inventories | -173 | -149 |
| Trade receivables | -494 | -204 |
| Tax receivables | -31 | -27 |
| Derivatives | -1 | -1 |
| Other receivables | -170 | -170 |
| Prepayments | -89 | -80 |
| Receivables, etc. | -785 | -482 |
| Securities | - | -1 |
| Cash and bank balances | -1,341 | -1,082 |
| Assets held for sale | -11 | -615 |
| Total current assets | -2,310 | -2,329 |
| Total assets | -10,993 | -8,390 |
Amounts in DKK million
| 31 December | 1 January | ||
|---|---|---|---|
| 2012 | 2012 | ||
| Share capital | - | - | |
| Reserves | - | - | |
| Proposed dividend for distribution | - | - | |
| Equity attributable to A.P. Møller - Mærsk A/S | - | - | |
| Non-controlling interests | -5 | -7 | |
| Total equity | -5 | -7 | |
| Borrowings, non-current | -7,112 | -5,955 | |
| Pensions and similar obligations | - | -1 | |
| Provisions | -63 | -48 | |
| Derivatives | -131 | -104 | |
| Deferred tax | -1,371 | -315 | |
| Other payables | -123 | -117 | |
| Other non-current liabilities | -1,688 | -585 | |
| Total non-current liabilities | -8,800 | -6,540 | |
| Borrowings. current | -975 | -939 | |
| Provisions | 109 | 52 | |
| Trade payables | -864 | -490 | |
| Tax payables | -167 | -68 | |
| Derivatives | -24 | -46 | |
| Other payables | -242 | -169 | |
| Deferred income | -9 | 38 | |
| Other current liabilities | -1,197 | -683 | |
| Liabilities associated with assets held for sale | -16 | -221 | |
| Total current liabilities | -2,188 | -1,843 | |
| Total liabilities | -10,988 | -8,383 | |
| Total equity and liabilities | -10,993 | -8,390 | |
Amounts in DKK million
The Group's joint operations are solely within Maersk Oil. Significant joint operations are listed below:
| Joint operations | Place of business |
Country | Ownership interest |
Voting rights |
|---|---|---|---|---|
| In production | ||||
| Hassi Berkine | Algeria on shore, Block 208 (El Merk) + Block 404 |
Algeria | 11.0% | - |
| Campo Polvo | Offshore Brazil | Brazil | 40.0% | 40.0% |
| Dansk Undergrunds Consortium | Danish North Sea | Denmark | 31.2% | 31.2% |
| Dunga | Kazakhstan on shore | Kazakhstan | 60.0% | 60.0% |
| Gryphon | United Kingdom North Sea | United Kingdom | 86.5% | 86.5% |
| South Gryphon | United Kingdom North Sea | United Kingdom | 89.9% | 89.9% |
| Harding | United Kingdom North Sea | United Kingdom | 30.0% | 30.0% |
| Not in production | ||||
| Chissonga | Block 16, offshore Angola | Angola | 65.0% | 65.0% |
| Johan Sverdrup | PL501, Norway North Sea | Norway | 20.0% | 20.0% |
| Golden Eagle | United Kingdom North Sea | United Kingdom | 31.6% | 31.6% |
| Culzean | United Kingdom North Sea | United Kingdom | 50.0% | 50.0% |
| Buckskin | Gulf of Mexico | USA | 20.0% | 20.0% |
| Jack | Gulf of Mexico | USA | 25.0% | 25.0% |
The Board of Directors and the Management have today discussed and approved the annual report of A.P. Møller - Mærsk A/S for 2013.
The annual report for 2013 of A.P. Møller - Mærsk A/S has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for annual reports of listed companies and in our opinion gives a true and fair view of the Group's and the Company's assets and liabilities, financial position at 31 December 2013 and of the results of the Group's and the Company's operations and cash flows for the financial year 2013.
In our opinion, the Directors' report includes a fair review of the development in the Group's and the Company's operations and financial conditions, the results for the year, cash flows and financial position as well as a description of the most significant risks and uncertainty factors that the Group and the Company face.
We recommend that the annual report be approved at the Annual General Meeting on 31 March 2014.
| Management: | ||
|---|---|---|
| Nils S. Andersen | ||
| Group CEO | ||
| Kim Fejfer | Claus V. Hemmingsen | Søren Skou |
| Jakob Thomasen | Trond Westlie | |
| Board of Directors: | ||
| Michael Pram Rasmussen | ||
| Chairman | ||
| Ane Mærsk Mc-Kinney Uggla | Niels Jacobsen | |
| Vice chairman | Vice chairman | |
| Sir John Bond | Arne Karlsson | Jan Leschly |
| Leise Mærsk Mc-Kinney Møller | Lars Pallesen | John Axel Poulsen |
| Erik Rasmussen | Robert Routs | Jan Tøpholm |
We have audited the consolidated financial statements and the parent company financial statements of A.P. Møller - Mærsk A/S for the financial year 1 January to 31 December 2013, which comprise income statement, statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity and notes, including a summary of significant accounting policies, for the Group as well as for the parent company. The consolidated financial statements and the parent company financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies.
The Board of Directors and the Management are responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies and for such internal control that management determines is necessary to enable the preparation of consolidated financial statements and parent company financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on the consolidated financial statements and the parent company financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing and additional requirements under Danish audit regulation. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements and the parent company financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements and the parent
company financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the consolidated financial statements and the parent company financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of consolidated financial statements and parent company financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements and the parent company financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
The audit has not resulted in any qualification.
In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the Group's and the parent company's financial position at 31 December 2013 and of the results of the Group's and the parent company's operations and cash flows for the financial year 1 January to 31 December 2013 in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies.
Pursuant to the Danish Financial Statements Act, we have read the Directors' report. We have not performed any further procedures in addition to the audit of the consolidated financial statements and the parent company financial statements. On this basis, it is our opinion that the information provided in the Directors' report is consistent with the consolidated financial statements and the parent company financial statements.
PricewaterhouseCoopers KPMG Statsautoriseret Revisionspartnerselskab Statsautoriseret Revisionspartnerselskab
Gert Fisker Tomczyk Henrik Kronborg Iversen State Authorised Public Accountant State Authorised Public Accountant
Former CEO, Topdanmark A/S.
Coloplast A/S (chairman); Topdanmark A/S (chairman) and two subsidiaries; Semler Holding A/S (chairman) and one subsidiary; JPMorgan Chase International Council; Museumsfonden af 7. december 1966; Louisiana – Fonden.
Not considered independent.
CEO of William Demant Holding A/S.
Other management duties, etc.: LEGO A/S (chairman); KIRKBI A/S (vice chairman); Thomas B. Thriges Fond (chairman).
Considered independent.
Joined the board in 1991. Latest re-election in 2012. Term of office will end in 2014.
A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal (chairman); A.P. Møller Holding A/S (chairman); Maersk Broker A/S (chairman); Maersk Broker K/S (chairman); Estemco A/S (chairman).
Not considered independent.
Joined the board in 2008. Latest re-election in 2012. Term of office will end in 2014.
Former chairman of HSBC Holdings Plc.
Shui On Land Limited; International Advisory Board of Mitsubishi Corporation; China Development Forum; International Business Leaders' Advisory Council to the Mayor of Shanghai; Kohlberg Kravis Roberts & Co. Asia Limited (chairman); Endowment Board of Qatar Foundation; Advisory Director, Northern Trust Corporation; International Advisory Council Tsinghua University School of Economics & Management; International Advisory Council Chinese Banking Regulatory Commission.
Considered independent.
Joined the board in 2010. Latest re-election in 2012. Term of office will end in 2014.
Former CEO, Ratos AB.
Bonnier Holding (chairman); Bonnier AB; Ratos (chairman); SNS (Center for Business and Policy Studies) (chairman); Einar Mattsson (chairman); Swedish Corporate Governance Board (chairman); Ecolean (chairman); Fortnox; Swedish Securities Council and WCPF (World's Children's Prize Foundation).
Considered independent.
Joined the board in 2000. Latest re-election in 2012. Term of office will end in 2014.
Chairman and managing partner for Care Capital LLC. Former CEO, SmithKline Pharmaceuticals.
Not considered independent.
Joined the board in 1993. Latest re-election in 2013. Term of office will end in 2015.
A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal; Bramsløkke Landbrug A/S (chairman); L. Møller Shipping ApS.
Not considered independent.
Joined the board in 2008. Latest re-election in 2012. Term of office will end in 2014.
Former president, Technical University of Denmark (DTU).
Mogens Balslevs Fond (chairman); Metricorr ApS (chairman); Frederiksberg Gymnasium (chairman); Technische Universität Münchens Institute for Advanced Study; Korean Advanced Institute of Science and Technology President's Advisory Council.
Considered independent.
John Axel Poulsen (born 1946) Joined the board in 2008. Latest re-election in 2012. Term of office will end in 2014.
Captain (employee).
Not considered independent.
Erik Rasmussen (born 1955) Joined the board in 2010. Latest re-election in 2012. Term of office will end in 2014.
Lead mechanical engineer (employee).
Other management duties, etc.: Member of the Trade Committee for Offshore.
Not considered independent.
Robert Routs (born 1946) Joined the board in 2010. Latest re-election in 2012. Term of office will end in 2014.
Former Executive Director, Royal Dutch Shell plc.
Other management duties, etc.: Aegon NV (chairman); KPN NV; DSM NV (chairman); ATCO Group; AECOM.
Considered independent.
Jan Tøpholm (born 1946)
Joined the board in 2001. Latest re-election in 2013. Term of office will end in 2015.
Chairman, Widex A/S.
Five subsidiaries to Widex A/S; T & W Holding A/S and one subsidiary (chairman); Widex Holding A/S (chairman); GSA Invest ApS (chairman) and chairman/board member in another seven companies.
Not considered independent.
The Executive Board functions as day-to-day management and consists of: From left to right: Kim Fejfer, Jakob Thomasen, Trond Westlie, Nils S. Andersen (Group CEO), Søren Skou, Claus V. Hemmingsen.
Member of Executive Board since 2007.
F. Salling Holding A/S (chairman); F. Salling Invest A/S (chairman); Dansk Supermarked A/S (chairman); Industria De Diseño Textil S.A. (Inditex); Danske Banks Rådgivende Repræsentantskab; DI's Erhvervspolitiske Udvalg; European Round Table of Industrialists (vice chairman); EU-Russia Industrialists' Round Table.
Member of Executive Board since 2011.
Global Ports Investments PLC (vice chairman).
Member of Executive Board since 2006.
DFDS A/S (vice chairman); Egyptian Drilling Company; International Association of Drilling Contractors (IADC); Danmarks Rederiforening (vice chairman); Denmark-Hong Kong Trade Association (chairman); Danish Chinese Business Forum; EU-Hong Kong Business Co-operation Committee.
Member of Executive Board since 2006.
Skou Invest ApS.
Member of Executive Board since 2009.
Member of the Board of Dansk Arbejdsgiverforening.
Member of Executive Board since 2010.
Dansk Supermarked A/S (vice chairman); Danske Bank A/S; Danmarks Skibskredit A/S; Pepita AS; Shama A/S; Tønsberg Delikatesse AS.
The A.P. Moller - Maersk Group comprises approximately 1,000 companies. Major companies of the Group are listed below. A more comprehensive list of companies is available on http://investor.maersk.com/financials.cfm
| Company | Country of incorporation share |
Owned | Company | Country of incorporation share |
Owned |
|---|---|---|---|---|---|
| 3PSC LLC | USA | 100% | Damco A/S | Denmark | 100% |
| A.P. Moller Finance SA | Switzerland | 100% | Damco Australia Pty. Ltd. | Australia | 100% |
| A.P. Moller Singapore Pte. Ltd. | Singapore | 100% | Damco Belgium NV | Belgium | 100% |
| Addicks & Kreye Container | Damco China Ltd. | China | 100% | ||
| Service GmbH & Co. KG | Germany | 51% | Damco Distribution Services Inc. | USA | 100% |
| APM Terminals – Cargo Service A/S | Denmark | 60% | Damco France SAS | France | 100% |
| APM Terminals Algeciras S.A. | Spain | 100% | Damco India Pvt. Ltd. | India | 100% |
| APM Terminals Apapa Ltd. | Nigeria | 94% | Damco International A/S | Denmark | 100% |
| APM Terminals B.V. | The Netherlands 100% | Damco Italy S.r.l. | Italy | 100% | |
| APM Terminals Bahrain B.S.C. | Bahrain | 80% | Damco Logistics Uganda Ltd. | Uganda | 100% |
| APM Terminals Callao S.A. | Peru | 80% | Damco Sweden AB | Sweden | 100% |
| APM Terminals China Co. Ltd. | Hong Kong | 100% | Damco UK Ltd. | Great Britain | 100% |
| APM Terminals Gothenburg AB | Sweden | 100% | Damco USA Inc. | USA | 100% |
| APM Terminals India Pvt. Ltd. | India | 100% | Danbor A/S | Denmark | 100% |
| APM Terminals Inland Services S.A. | Peru | 100% | Dansk Supermarked A/S | Denmark | 68% |
| APM Terminals Liberia Ltd. | Liberia | 100% | Esvagt A/S | Denmark | 75% |
| APM Terminals Management B.V. | The Netherlands 100% | F. Salling A/S | Denmark | 38% | |
| APM Terminals Mobile, LLC | USA | 100% | Farrell Lines Inc. | USA | 100% |
| APM Terminals North America B.V. | The Netherlands 100% | Gateway Terminals India Pvt. Ltd. | India | 74% | |
| APM Terminals Pacific Ltd. | USA | 100% | Lilypond Container Depot Nigeria Ltd. | Nigeria | 91% |
| APM Terminals Rotterdam B.V. | The Netherlands 100% | Lindø Industripark A/S | Denmark | 100% | |
| APM Terminals Tangier SA | Morocco | 90% | Live Oak Company Ltd. | Bermuda | 100% |
| APM Terminals Virginia Inc. | USA | 100% | Maersk (China) Shipping Company Ltd. | China | 100% |
| APM Terminals Yangshan Co. Ltd. | Hong Kong | 100% | Maersk A/S | Denmark | 100% |
| Aqaba Container Terminal Company Ltd. | Jordan | 50% | Maersk Agency U.S.A. Inc. | USA | 100% |
| Bermutine Transport Corporation Ltd. | Bermuda | 100% | Maersk Aviation Holding A/S | Denmark | 100% |
| Coman SA | Benin | 100% | Maersk B.V. | The Netherlands 100% | |
| Container Operators S.A. | Chile | 100% | Maersk Bangladesh Ltd. | Bangladesh | 100% |
| Damco (UAE) FZE | United Arab | Maersk Container Industry A/S | Denmark | 100% | |
| Emirates | 100% | Maersk Container Industry Dongguan Ltd. | China | 100% |
| Company | Country of incorporation |
Owned share |
|---|---|---|
| Maersk Container Industry Qingdao Ltd. | China | 100% |
| Maersk Contractors Venezuela S.A. | Venezuela | 100% |
| Maersk Denizcilik A.Ş. | Turkey | 100% |
| Maersk Developer LLC | USA | 100% |
| Maersk Djibouti SARL | Djibouti | 60% |
| Maersk Drilling A/S | Denmark | 100% |
| Maersk Drilling Deepwater A/S | Denmark | 100% |
| Maersk Drilling Deepwater Egypt LLC | Egypt | 100% |
| Maersk Drilling Holdings Singapore Pte. Ltd. | Singapore | 100% |
| Maersk Drilling International A/S | Denmark | 100% |
| Maersk Drilling Norge AS | Norway | 100% |
| Maersk Drilling USA Inc. | USA | 100% |
| Maersk Egypt For Maritime Transport SAE | Egypt | 100% |
| Maersk Energia Ltda. | Brazil | 100% |
| Maersk Energy Marketing A/S | Denmark | 100% |
| Maersk Energy UK Ltd. | Great Britain | 100% |
| Maersk FPSOs A/S | Denmark | 100% |
| Maersk FPSOs Australia A/S | Denmark | 100% |
| Maersk Gabon SA | Gabon | 100% |
| Maersk Gas Carriers Pte. Ltd. | Singapore | 100% |
| Maersk Global Service Centres (Chengdu) Ltd. China | 100% | |
| Maersk Global Service Centres (India) Pvt. Ltd. India | 100% | |
| Maersk Handy Gas Pte. Ltd. | Singapore | 100% |
| Maersk Holding B.V. | The Netherlands 100% | |
| Maersk Hong Kong Ltd. | Hong Kong | 100% |
| Maersk Inc. | USA | 100% |
| Maersk Inter Holding B.V. | The Netherlands 100% | |
| Maersk Jupiter Drilling Corporation S.A. | Panama | 100% |
| Maersk K.K. | Japan | 100% |
| Maersk Line Agency Holding A/S | Denmark | 100% |
| Maersk Line UK Ltd. | Great Britain | 100% |
| Maersk Line, Limited | USA | 100% |
| Maersk Logistics Warehousing | ||
| China Company Ltd. | Hong Kong | 100% |
| Maersk Mauritanie SA | Mauritania | 60% |
| Maersk Oil America Inc. | USA | 100% |
| Maersk Oil Brasil Ltda. | Brazil | 100% |
| Maersk Oil GB Ltd. | Great Britain | 100% |
| Maersk Oil Gulf of Mexico Four LLC | USA | 100% |
| Maersk Oil North Sea UK Ltd. | Great Britain | 100% |
| Maersk Oil Norway AS | Norway | 100% |
| Maersk Oil Qatar A/S | Denmark | 100% |
| Maersk Oil Three PL B.V. | The Netherlands 100% | |
| Maersk Oil UK Ltd. | Great Britain | 100% |
| Maersk Peregrino Pte. Ltd. | Singapore | 100% |
| Company | Country of incorporation |
Owned share |
|---|---|---|
| Maersk Reacher Norge A/S | Denmark | 100% |
| Maersk Shipping Hong Kong Ltd. | Hong Kong | 100% |
| Maersk Spain S.L. | Spain | 100% |
| Maersk Supply Service A/S | Denmark | 100% |
| Maersk Supply Service Canada Ltd. | Canada | 100% |
| Maersk Supply Service Holdings UK Ltd. | Great Britain | 100% |
| Maersk Supply Service International A/S | Denmark | 100% |
| Maersk Supply Service UK Ltd. | Great Britain | 100% |
| Maersk Tankers A/S | Denmark | 100% |
| Maersk Tankers Singapore Pte. Ltd. | Singapore | 100% |
| Maersk Treasury Center (Asia) Pte. Ltd. | Singapore | 100% |
| Maersk Trucking Holdings, Inc | USA | 100% |
| Maersk Tunisie SA | Tunisia | 100% |
| Maersk Vietnam Ltd. | Vietnam | 100% |
| MCC Transport Singapore Pte. Ltd. | Singapore | 100% |
| Mercosul Line Navegação e Logistica Ltda. | Brazil | 100% |
| Mærsk Gallant Norge A/S | Denmark | 100% |
| Mærsk Giant Norge A/S | Denmark | 100% |
| Mærsk Guardian Norge A/S | Denmark | 100% |
| Mærsk Innovator Norge A/S | Denmark | 100% |
| Mærsk Inspirer Norge A/S | Denmark | 100% |
| Mærsk Olie Algeriet A/S | Denmark | 100% |
| Mærsk Olie og Gas A/S | Denmark | 100% |
| Nedlloyd Container Line Ltd. | Great Britain | 100% |
| New Times International Transport | ||
| Service Co. Ltd. | China | 100% |
| NTS International Transport Services Co. Ltd. Hong Kong | 100% | |
| Poti Sea Port Corporation | Georgia | 100% |
| PT Damco Indonesia | Indonesia | 100% |
| Rederiaktieselskabet Kuling | Denmark | 100% |
| Rederiet A.P. Møller A/S | Denmark | 100% |
| Safmarine (Pty) Ltd. | South Africa | 100% |
| Safmarine Container Lines NV | Belgium | 100% |
| Safmarine MPV NV | Belgium | 100% |
| Sati Container Services Pty. Ltd. | South Africa | 75% |
| Seago Line A/S | Denmark | 100% |
| Sogester – Sociedade Gestora | ||
| de Terminais S.A. | Angola | 51% |
| Suez Canal Container Terminal SAE | Egypt | 55% |
| Svitzer A/S | Denmark | 100% |
| Svitzer Australia Pty. Ltd. | Australia | 100% |
| Terminal 4 S.A. | Argentina | 100% |
| Universal Maritime Service Corporation | USA | 100% |
| West Africa Container Terminal Nigeria Ltd. | Nigeria | 100% |
| Company | Country of incorporation |
Owned share |
|---|---|---|
| Abidjan Terminal SA | Ivory Coast | 40% |
| Brigantine International Holdings Ltd. | Hong Kong | 30% |
| Brigantine Services Ltd. | Hong Kong | 30% |
| Commonwealth Steamship Insurance | ||
| Company Pty. Ltd. | Australia | 7% |
| Congo Terminal Holding SAS | France | 30% |
| Congo Terminal S.A. | DR Congo | 23% |
| Cosco Ports (Nansha) Ltd. | British Virgin | |
| Islands | 34% | |
| Danske Bank A/S | Denmark | 20% |
| Guangzhou South China Oceangate | ||
| Container Terminal Co. Ltd. | China | 20% |
| Guayanilla Towage Group Inc. | Puerto Rico | 25% |
| Company | Country of incorporation |
Owned share |
|---|---|---|
| Gujarat Pipavav Port Ltd. | India | 43% |
| Höegh Autoliners Holdings AS | Norway | 39% |
| Inttra Inc. | USA | 23% |
| Medcenter Container Terminal SpA | Italy | 33% |
| Meridian Port Services Ltd. | Ghana | 35% |
| New Asia Capital Resources Ltd. | Hong Kong | 33% |
| PT Bonapelangi Devindo | Indonesia | 19% |
| Salalah Port Services Company SAOG | Oman | 30% |
| Shipet Maritime Sdn. Bhd. | Malaysia | 44% |
| South Asia Gateway Pvt. Ltd. | Sri Lanka | 33% |
| Tianjin Port Alliance International | ||
| Container Terminal Co. Ltd. | China | 20% |
| Company | Country of | Owned |
|---|---|---|
| incorporation | share | |
| Anchor Storage Ltd. | Bermuda | 51% |
| Arctic Base Supply A/S | Denmark | 50% |
| Brasil Terminal Portuario S.A. | Brazil | 50% |
| Cai Mep International Terminal Co. Ltd. | Vietnam | 49% |
| Caucedo Marine Services Ltd. | British Virgin | |
| Islands | 50% | |
| Dalian Port Container Terminal Co. Ltd. | China | 20% |
| Douala International Terminal SA | Cameroon | 40% |
| Drilling & Petroleum Services Company | Saudi Arabia | 35% |
| Egyptian Drilling Company SAE | Egypt | 50% |
| Eurogate Container Terminal Wilhelmshaven | ||
| Beteiligungsgesellschaft mbH | Germany | 30% |
| Europe Terminal Brasil Participações S.A. | Brazil | 50% |
| Global Ports Investments PLC | Cyprus | 31% |
| Laem Chabang Container Terminal 1 Ltd. | Thailand | 35% |
| LR2 Management K/S | Denmark | 50% |
| Maersk Supply Service (Angola) Lda. | Angola | 49% |
| Maersk-Rickmers U.S. Flag Project Carrier LLC USA | 50% |
| Company | Country of incorporation |
Owned share |
|---|---|---|
| North Sea Production Company Ltd. | Great Britain | 50% |
| North Sea Terminal Bremerhaven | ||
| Verwaltungsgesellschaft mbH | Germany | 50% |
| OOO Vostochnaya Stevedore Company | Russia | 31% |
| Pelabuhan Tanjung Pelepas Sdn. Bhd. | Malaysia | 30% |
| Petrolesport OAO | Russia | 31% |
| Professional Terminal Service Holdings Ltd. | Mauritius | 41% |
| Qingdao New Qianwan Container | ||
| Terminal Co. Ltd. | China | 16% |
| Qingdao Qianwan Container Terminal Co. Ltd. China | 20% | |
| Riverwijs-Dampier Pty. Ltd. | Australia | 50% |
| Shanghai East Container Terminal Co. Ltd. | China | 49% |
| Shanghai Tie Yang Multimodal | ||
| Transportation Co. Ltd. | China | 49% |
| Smart International Logistics Company Ltd. China | 49% | |
| South Florida Container Terminal LLC | USA | 49% |
| Terminal Porte Océane SA | France | 50% |
| Xiamen Songyu Container Terminal Co. Ltd. | China | 25% |
| Appraisal well – Additional wells drilled after a discovery, to confirm | Mature field – Oil producing field that has passed its peak production |
|---|---|
| the size of a hydrocarbon deposit | Multi-purpose – A vessel designed to carry both containerised and |
| Backhaul – The return leg of the vessel trip | dry bulk cargoes |
| Backlog – The value of future contract coverage (revenue backlog) | Net interest-bearing debt (NIBD) – Equals interest-bearing debt |
| Barge – A drilling rig, which can operate in waters of 5-50 metres | less cash and bank balances less other interest-bearing assets |
| Blanked sailings – Cancelled sailings | P3 – A potentially long-term operational alliance between Maersk |
| boepd – Barrels of oil equivalent per day | Line, MSC and CMA CGM on East-West trades |
| Brent – Sweet light crude oil produced in the North Sea | Product tanker – Vessel transporting refined oil products |
| Bunker fuel – Type of fuel oil used in ship engines | Proved and probable reserves (2P) – Proved reserves: Quantity |
| Contract coverage – Percentage indicating the part of ship/rig | of energy sources estimated with reasonable certainty, from the |
| days that are contracted for a specific period | analysis of geologic and engineering data, to be recoverable from |
| Drillship – A vessel that has been fitted with drilling equipment, | well-established or known reservoirs with the existing equipment |
| mainly used for deepwater drilling | and under the existing operating conditions. Probable reserves: |
| DUC – Dansk Undergrunds Consortium – Operator of oil and gas | Unproved reserves which analysis of geological and engineering |
| fields in the Danish part of the North Sea | data suggests are more likely than not to be recoverable |
| Equal steaming – steady vessel speed | Reefer – A refrigerated container |
| Exposure hours – The total number of working hours in which an | Ro/Ro – Roll On/Roll Off – A vessel that transports vehicles |
| employee is exposed to work related hazards | ROIC – Return on invested capital |
| FFE – Forty Foot Equivalent – Forty foot container unit | Semi-submersible rig – A drilling rig, which can operate in waters |
| FGSO – Floating Gas Storage and Offloading vessel | of 500-3,000 metres |
| Floater – A mobile offshore drilling unit that floats and is not | Slow steaming – Reduction of vessel speed from 22-24 knots to |
| secured to the seabed (except for anchors) | 18 knots |
| FPSO – Floating Production Storage and Offloading vessel | Spot rate – Price quoted for immediate service |
| Free float – Share of share capital that is readily available for trading | TEU – Twenty Foot Equivalent Unit – Twenty foot container |
| Handy-tanker – Smaller product tanker | Time charter – Hire of a vessel for a specified period |
| Head haul – The main leg of the vessel trip | Triple-E – Triple-E stands for Economy of scale, Energy efficiency |
| Jack-up rig – A drilling rig resting on legs. The drilling rig can operate in | and Environmentally improved |
| waters of 25-150 metres | Uptime – A period of time when a unit is functioning and available |
| LNG – Liquefied Natural Gas | for use |
| LPG – Liquefied Petroleum Gas | VSA – Vessel Sharing Agreement |
| LTIF – Lost Time Injury Frequency – Number of lost time injuries, | VLCC – Very Large Crude Carrier |
| including fatalities, per million exposure hours | VLGC – Very Large Gas Carrier |
| Date | Title |
|---|---|
| 22 February | Group Annual Report 2012 for A.P. Møller - Mærsk A/S |
| 13 March | Notice convening the Annual General Meeting 2013 of A.P. Møller - Mærsk A/S |
| 26 March | A.P. Møller - Mærsk A/S places Sterling bonds |
| 17 May | Interim Report 1st Quarter 2013 |
| 18 June | A.P. Møller - Mærsk A/S – Establishment of liner alliance |
| 16 August | Interim Report 2nd Quarter 2013 |
| 25 September | A.P. Møller - Mærsk A/S to be assigned credit ratings by Moody's and Standard & Poor's |
| 13 November | Interim Report 3rd Quarter 2013 |
| 22 November | A.P. Møller - Mærsk A/S – Formal Investigations by the European Commission |
| 06 December | A.P. Møller - Mærsk A/S – Financial Calendar 2014 |
| 20 December | Major shareholder announcement |
(In parenthesis the corresponding figures for 2012)
| 2013 | 2012 | 2011 | 2010 | 2009 | |
|---|---|---|---|---|---|
| Revenue | 149,801 | 157,866 | 148,085 | 143,625 | 108,228 |
| Profit before depreciation, amortisation and | |||||
| impairment losses, etc. (EBITDA) | 21,115 | 20,299 | 20,398 | 32,213 | 1,969 |
| Depreciation, amortisation and impairment losses | 7,635 | 7,828 | 7,889 | 12,409 | 6,783 |
| Gain/loss on sale of companies and non-current assets, etc., net | 160 | 1,165 | 1,201 | 1,024 | -1,346 |
| Profit/loss before financial items (EBIT) | 13,640 | 13,636 | 13,710 | 20,828 | -6,160 |
| Financial items, net | 65 | 4,594 | 8,591 | 3,738 | 4,502 |
| Profit/loss before tax | 13,705 | 18,230 | 22,301 | 24,566 | -1,658 |
| Tax | 6,392 | 9,795 | 11,824 | 11,026 | 7,919 |
| Profit/loss for the year | 7,313 | 8,435 | 10,477 | 13,540 | -9,577 |
| Total assets | 276,856 | 278,457 | 262,833 | 229,447 | 192,399 |
| Total equity | 114,036 | 116,522 | 113,329 | 105,627 | 87,901 |
| Cash flow from operating activities | 20,232 | 17,130 | 17,359 | 26,864 | 6,204 |
| Cash flow used for capital expenditure | -9,527 | -50,432 | -17,565 | -14,007 | -16,468 |
| Investments in property, plant and equipment and intangible assets | 16,455 | 15,117 | 16,441 | 12,999 | 11,612 |
| Proposed dividend per share, DKK | 1,400 | 1,200 | 1,000 | 1,000 | 325 |
| Note | 2013 | 2012 | ||
|---|---|---|---|---|
| Revenue | 149,801 | 157,866 | ||
| 1 | Operating costs | 129,015 | 138,737 | |
| Other income | 329 | 1,170 | ||
| Profit before depreciation, amortisation and impairment losses, etc. | 21,115 | 20,299 | ||
| 5,6 | Depreciation, amortisation and impairment losses | 7,635 | 7,828 | |
| 2 | Gain/loss on sale of companies and non-current assets, etc., net | 160 | 1,165 | |
| Profit before financial items | 13,640 | 13,636 | ||
| 3 | Dividends | 2,354 | 5,222 | |
| 3 | Financial income | 4,514 | 7,372 | |
| 3 | Financial expenses | 6,803 | 8,000 | |
| Profit before tax | 13,705 | 18,230 | ||
| 4 | Tax | 6,392 | 9,795 | |
| Profit for the year | 7,313 | 8,435 | ||
| Appropriation: | ||||
| Proposed dividend | 6,154 | 5,275 | ||
| Retained earnings | 1,159 | 3,160 | ||
| 7,313 | 8,435 | |||
| Proposed dividend per share, DKK | 1,400 | 1,200 | ||
| Note | 2013 | 2012 |
|---|---|---|
| Profit for the year | 7,313 | 8,435 |
| Translation from functional currency to presentation currency | -5,100 | -1,922 |
| Other equity investments: | ||
| Fair value adjustment for the year | 18 | 2 |
| Reclassified to income statement, gain/loss on sale of companies and non-current assets etc., net | -2 | 4 |
| 16 Cash flow hedges: |
||
| Value adjustment of hedges for the year | 381 | 17 |
| Reclassified to income statement: | ||
| – operating costs | -154 | 326 |
| – financial expenses | 317 | 700 |
| Reclassified to cost of property, plant and equipment | - | 6 |
| 4,9 Tax on other comprehensive income |
-139 | -71 |
| Total items that are or may be reclassified subsequently to the income statement | -4,679 | -938 |
| Other comprehensive income, net of tax | -4,679 | -938 |
| Total comprehensive income for the year | 2,634 | 7,497 |
| Note | 2013 | 2012 | |
|---|---|---|---|
| 5 | Intangible assets | 0 | 16 |
| Ships, rigs, containers, etc. | 59,184 | 62,868 | |
| Production facilities and equipment, etc. | 8,033 | 6,844 | |
| Land and buildings | 496 | 560 | |
| Construction work in progress and payment on account | 6,537 | 7,166 | |
| 6 | Property, plant and equipment | 74,250 | 77,438 |
| 7 | Investments in subsidiaries | 93,092 | 97,302 |
| 7 | Investments in associated companies | 19,000 | 21,453 |
| Other equity investments | 369 | 371 | |
| 17 | Interest bearing receivables from subsidiaries, etc. | 31,182 | 30,467 |
| 16 | Derivatives | 1,297 | 1,159 |
| 8 | Other receivables | 2,233 | 1,706 |
| Financial non-current assets | 147,173 | 152,458 | |
| 9 | Deferred tax | 453 | 671 |
| Total non-current assets | 221,876 | 230,583 | |
| 10 | Inventories | 3,482 | 4,608 |
| 18 | Trade receivables | 12,975 | 18,334 |
| Tax receivables | 738 | 1,100 | |
| 17 | Interest bearing receivables from subsidiaries, etc. | 18,165 | 15,942 |
| 16 | Derivatives | 927 | 587 |
| 8 | Other receivables | 699 | 591 |
| Other receivables from subsidiaries, etc. | 3,022 | 2,842 | |
| Prepayments | 572 | 796 | |
| Receivables, etc. | 37,098 | 40,192 | |
| Securities | 1,200 | 1,255 | |
| Cash and bank balances | 8,289 | 1,819 | |
| 11 | Assets held for sale | 4,911 | - |
| Total current assets | 54,980 | 47,874 | |
| Total assets | 276,856 | 278,457 |
| 2013 | 2012 |
|---|---|
| 4,396 | 4,396 |
| 103,486 | 106,851 |
| 6,154 | 5,275 |
| 114,036 | 116,522 |
| 45,107 | 56,388 |
| 1,016 | 3,000 |
| 8,693 | |
| 1,244 | |
| 921 | |
| 10,858 | |
| 70,246 | |
| 6,403 | |
| 62,297 | 51,883 |
| 697 | 1,254 |
| 16,927 | 16,215 |
| 2,399 | 2,197 |
| 1,156 | 571 |
| 2,272 | 2,070 |
| 7,648 | 8,266 |
| 2 | 2,830 |
| 31,101 | 33,403 |
| 104,896 | 91,689 |
| 162,820 | 161,935 |
| 278,457 | |
| 10,450 666 685 11,801 57,924 11,498 276,856 |
Amounts in DKK million
| Note | 2013 | 2012 | ||
|---|---|---|---|---|
| Profit before financial items | 13,640 | 13,636 | ||
| 5.6 | Depreciation, amortisation and impairment losses | 7,635 | 7,828 | |
| 2 | Gain on sale of companies and non-current assets, etc., net | -160 | -1,165 | |
| 21 | Change in working capital | 3,340 | -1,896 | |
| 21 | Other non-cash items, etc. | 957 | 1,381 | |
| Cash from operating activities before financial items and tax | 25,412 | 19,784 | ||
| Dividends received | 2,341 | 8,396 | ||
| Financial income received | 2,165 | 2,177 | ||
| Financial expenses paid | -2,834 | -3,777 | ||
| Taxes paid | -6,852 | -9,450 | ||
| Cash flow from operating activities | 20,232 | 17,130 | ||
| 21 | Purchase of intangible assets and property, plant and equipment | -13,739 | -16,115 | |
| Sale of intangible assets and property, plant and equipment | 7,178 | 388 | ||
| Acquisition of and capital increases in subsidiaries and activities | -4,856 | -34,859 | ||
| Sale of subsidiaries and activities | 236 | 1,516 | ||
| Purchase/sale of shares in associated companies etc. | 1,618 | -1,437 | ||
| 21 | Other financial investments | 36 | 75 | |
| Cash flow used for capital expenditure | -9,527 | -50,432 | ||
| Purchase/sale of securities, trading portfolio | - | -9 | ||
| Cash flow used for investing activities | -9,527 | -50,441 | ||
| Repayment of borrowings | -6,247 | -15,999 | ||
| Proceeds from borrowings | 3,085 | 19,453 | ||
| Dividends distributed | -5,241 | -4,366 | ||
| Movements in interest bearing loans to/from subsidiaries, etc., net | 4,622 | 31,955 | ||
| Purchase/sale of own shares, net | 78 | 18 | ||
| Cash flow from financing activities | -3,703 | 31,061 | ||
| Net cash flow for the year | 7,002 | -2,250 | ||
| Cash and cash equivalents 1 January | 907 | 3,028 | ||
| Currency translation effect on cash and cash equivalents | -86 | 129 | ||
| Cash and cash equivalents 31 December | 7,823 | 907 | ||
| Cash and cash equivalents | ||||
| Cash and bank balances | 8,289 | 1,819 | ||
| Cash management overdrafts | 466 | 912 | ||
| Cash and cash equivalents 31 December | 7,823 | 907 |
Cash and cash equivalents include DKK 0m (DKK 332m) that relates to cash and cash equivalents in countries with exchange control or other restrictions. These funds are not readily available for general use by the Company.
| Note | Share capital |
Reserve for hedges |
Retained earnings |
Proposed dividend for distri bution |
Total equity |
|
|---|---|---|---|---|---|---|
| Equity 1 January 2013 | 4,396 | -428 | 107,279 | 5,275 | 116,522 | |
| Translation from functional currency to presentation currency | - | 4 | -5,104 | - | -5,100 | |
| Other equity investments: | ||||||
| Fair value adjustment for the year | - | - | 18 | - | 18 | |
| Reclassified to income statement, gain/loss on sale of | ||||||
| non-current assets | - | - | -2 | - | -2 | |
| Cash flow hedges: | ||||||
| Value adjustment of hedges for the year | - | 381 | - | - | 381 | |
| Reclassified to income statement, operating costs | - | -154 | - | - | -154 | |
| Reclassified to income statement, financial expenses | - | 317 | - | - | 317 | |
| 4 | Tax on other comprehensive income | - | -139 | - | - | -139 |
| Other comprehensive income, net of tax | - | 409 | -5,088 | - | -4,679 | |
| Profit for the year | - | - | 1,159 | 6,154 | 7,313 | |
| Total comprehensive income for the year | - | 409 | -3,929 | 6,154 | 2,634 | |
| Dividends to shareholders | - | - | 34 | -5,275 | -5,241 | |
| 13 | Value of granted share options and restricted shares | - | - | 43 | - | 43 |
| 12 | Sale of own shares | - | - | 78 | - | 78 |
| Total transactions with shareholders | - | - | 155 | -5,275 | -5,120 | |
| Equity 31 December 2013 | 4,396 | -19 | 103,505 | 6,154 | 114,036 |
| Note | Share capital |
Reserve for hedges |
Retained earnings |
Proposed dividend for distri bution |
Total equity |
||
|---|---|---|---|---|---|---|---|
| Equity 1 January 2012 | 4,396 | -1,427 | 105,964 | 4,396 | 113,329 | ||
| Translation from functional currency to presentation currency | - | 21 | -1,943 | - | -1,922 | ||
| Other equity investments: | |||||||
| Fair value adjustment for the year | - | - | 2 | - | 2 | ||
| Reclassified to income statement, gain/loss on sale of | |||||||
| non-current assets | - | - | 4 | - | 4 | ||
| Cash flow hedges: | |||||||
| Value adjustment of hedges for the year | - | 17 | - | - | 17 | ||
| Reclassified to income statement, operating costs | - | 326 | - | - | 326 | ||
| Reclassified to income statement, financial expenses | - | 700 | - | - | 700 | ||
| Reclassified to cost of property, plant and equipment | - | 6 | - | - | 6 | ||
| 4 | Tax on other comprehensive income | - | -71 | - | - | -71 | |
| Other comprehensive income, net of tax | - | 999 | -1,937 | - | -938 | ||
| Profit for the year | - | - | 3,160 | 5,275 | 8,435 | ||
| Total comprehensive income for the year | - | 999 | 1,223 | 5,275 | 7,497 | ||
| Dividends to shareholders | - | - | 30 | -4,396 | -4,366 | ||
| 13 | Value of granted and sold share options | - | - | 44 | - | 44 | |
| 12 | Sale of own shares | - | - | 18 | - | 18 | |
| Total transactions with shareholders | - | - | 92 | -4,396 | -4,304 | ||
| Equity 31 December 2012 | 4,396 | -428 | 107,279 | 5,275 | 116,522 | ||
| Contents | Page | ||
|---|---|---|---|
| 1 | Operating costs | 167 | |
| 2 | Gain on sale of companies and non-current assets, etc., net | 167 | |
| 3 | Financial income and expenses | 168 | |
| 4 | Tax | 169 | |
| 5 | Intangible assets | 170 | |
| 6 | Property, plant and equipment | 171 | |
| 7 | Investments in subsidiaries and associated companies | 173 | |
| 8 | Other receivables | 174 | |
| 9 | Deferred tax | 174 | |
| 10 | Inventories | 175 | |
| 11 | Assets held for sale | 175 | |
| 12 | Share capital | 176 | |
| 13 | Share-based payment | 177 | |
| 14 | Borrowings | 179 | |
| 15 | Provisions | 180 | |
| 16 | Derivatives | 181 | |
| 17 | Financial instruments by category | 183 | |
| 18 | Financial risks | 185 | |
| 19 | Commitments | 189 | |
| 20 | Contingent liabilities | 190 | |
| 21 | Cash flow specifications | 190 | |
| 22 | Related parties | 191 | |
| 23 | Accounting policies | 192 | |
| 24 | Significant accounting estimates and judgements | 193 | |
| 25 | New financial reporting requirements | 193 | |
| 26 | Subsequent events | 193 |
| 2013 | 2012 | |
|---|---|---|
| Bunker costs | 26,404 | 33,472 |
| Terminal costs | 22,627 | 22,259 |
| Intermodal costs | 12,760 | 14,064 |
| Port costs | 8,842 | 9,196 |
| Rent and lease costs | 21,814 | 22,646 |
| Exploration costs | 85 | 114 |
| Integration and restructuring costs | 26 | 159 |
| Other | 36,457 | 36,827 |
| Total operating costs | 129,015 | 138,737 |
Three (no) members of the Executive Board are employed directly by the Company. All others engaged are employed by Rederiet A.P. Møller A/S.
Contract of employment for the Executive Board contains terms customary in Danish listed companies, including termination notice and competition clauses. In connection with a possible takeover offer, neither management nor the Board of Directors will receive special remuneration. Fees and remuneration do not include pension or share-based payments.
The Board of Directors has received fees of DKK 20m (DKK 19m).
As at 1 January 2013, management has changed from Firmaet A.P. Møller to the Executive Board. The Company's share of remuneration of the entire Executive Board is expensed with DKK 69m (Firmaet A.P. Møller DKK 77m).
| Fees to the statutory auditors of A.P. Møller - Mærsk A/S | 2013 | 2012 |
|---|---|---|
| KPMG Statsautoriseret Revisionspartnerselskab | ||
| Statutory audit | 5 | 8 |
| Other assurance services | 1 | 0 |
| Tax and VAT advisory services | 1 | 1 |
| Other services | 4 | 2 |
| Total fees | 11 | 11 |
| PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab | ||
| Statutory audit | 6 | 4 |
| Other assurance services | 0 | 0 |
| Tax and VAT advisory services | 1 | 1 |
| Other services | 9 | 4 |
| Total fees | 16 | 9 |
| Sale of other equity investments results in a gain of DKK 2m (DKK 4m). | ||
|---|---|---|
| Gain on sale of companies and non-current assets, etc., net | 160 | 1,165 |
| Losses | 27 | 674 |
| Gains | 187 | 1,839 |
| 2013 | 2012 | |
| 2013 | 2012 | ||
|---|---|---|---|
| Interest expenses on liabilities | 2,694 | 2,885 | |
| Of which borrowing costs capitalised on assets ¹ | 107 | 208 | |
| Interest income on loans and receivables | 1,811 | 2,207 | |
| Interest income on securities | 3 | 6 | |
| Fair value adjustment transferred from equity hedge reserve (loss) | 338 | 696 | |
| Unwind of discount on provisions | 188 | 194 | |
| Net interest expenses | 1,299 | 1,354 | |
| Exchange rate gains on bank deposits, loans and working capital | 267 | 126 | |
| Exchange rate losses on bank deposits, loans and working capital | 1,478 | 1,422 | |
| Net foreign exchange gains/losses | -1,211 | -1,296 | |
| Fair value gains from derivatives | 960 | 1,336 | |
| Fair value losses from derivatives | 98 | - | |
| Fair value gains from securities | - | 20 | |
| Net fair value gains/losses 2 | 862 | 1,356 | |
| Dividends received from subsidiaries and associated companies | 2,316 | 5,191 | |
| Dividends received from other securities | 38 | 31 | |
| Total dividends income | 2,354 | 5,222 | |
| Reversal of impairment losses, investments in and loans to subsidiaries and associated companies ³ | 1,111 | 3,328 | |
| Impairment losses, investments in and loans to subsidiaries and associated companies ⁴ | 1,752 | 2,662 | |
| Financial income, net | 65 | 4,594 | |
| Of which: | |||
| Dividends | 2,354 | 5,222 | |
| Financial income | 4,514 | 7,372 | |
| Financial expenses | 6,803 | 8,000 |
1 The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is 4.4% p.a. (4.8% p.a.).
2 Including loss on hedging instrument in fair value hedge of DKK 500m (gain of DKK 394m) and gain on the hedged item DKK 362m (loss of DKK 349m).
3 Reversal of impairment losses is mainly for Maersk FPSOs A/S and Odense Steelshipyard A/S (A.P. Moller Finance S.A. and Maersk FPSOs A/S).
4Impairment losses to lower value in use primarily relate to investment in Maersk Tankers A/S and Damco International A/S (Maersk Tankers A/S).
For an analysis of gains and losses from derivatives reference is made to note 16.
Amounts in DKK million
4 Tax
| 2013 | 2012 | |
|---|---|---|
| Tax recognised in the income statement | 6,392 | 9,795 |
| Of which regarding Danish and foreign tonnage tax, freight tax, etc. | -404 | -324 |
| Total | 5,988 | 9,471 |
| Of which: | ||
| Current tax | 6,003 | 8,659 |
| Deferred tax | -15 | 812 |
| Current and deferred tax arise as follows: Profit before tax |
13,705 | 18,230 |
| Income subject to Danish and foreign tonnage taxation, etc. | -2,687 | 3,034 |
| Profit before tax, adjusted | 11,018 | 21,264 |
| Calculated 25% tax | 2,755 | 5,316 |
| Additional tax in the oil segment in excess of 25% | 3,691 | 6,156 |
| Effect of changed tax rate | -19 | - |
| Gains related to shares, dividends, etc. | -379 | -1,684 |
| Adjustment to previous years' taxes | 23 | -866 |
| Deferred tax assets, not previously recognised | -30 | -61 |
| Other permanent differences, net | -53 | 610 |
| Total | 5,988 | 9,471 |
| Tax recognised in other comprehensive income and equity | ||
| Cash flow hedges | 139 | 71 |
| Tax recognised in other comprehensive income, net | 139 | 71 |
| Of which: | ||
| Current tax | 139 | 71 |
| IT software |
Other rights |
Total | ||
|---|---|---|---|---|
| Cost | ||||
| 1 January 2012 | 1,301 | 162 | 1,463 | |
| Disposal | 47 | 163 | 210 | |
| Exchange rate adjustment | -20 | 1 | -19 | |
| 31 December 2012 | 1,234 | - | 1,234 | |
| Exchange rate adjustment | -55 | - | -55 | |
| 31 December 2013 | 1,179 | - | 1,179 | |
| Amortisation and impairment losses | ||||
| 1 January 2012 | 1,185 | 162 | 1,347 | |
| Amortisation | 69 | - | 69 | |
| Disposal | 17 | 163 | 180 | |
| Exchange rate adjustment | -19 | 1 | -18 | |
| 31 December 2012 | 1,218 | - | 1,218 | |
| Amortisation | 17 | - | 17 | |
| Exchange rate adjustment | -56 | - | -56 | |
| 31 December 2013 | 1,179 | - | 1,179 | |
| Carrying amount: | ||||
| 31 December 2012 | 16 | - | 16 | |
| 31 December 2013 | 0 | - | 0 |
Amounts in DKK million
| Ships, rigs, containers, etc. |
Production facilities and equipment etc. |
Land and buildings |
Construc- tion work in progress and payment on account |
Total | |
|---|---|---|---|---|---|
| Cost | |||||
| 1 January 2012 | 107,872 | 39,021 | 954 | 4,443 | 152,290 |
| Addition | 10,138 | 3 | 34 | 4,942 | 15,117 |
| Disposal | 9,305 | 6,955 | 4 | 163 | 16,427 |
| Transfer | 1,242 | 681 | - | -1,923 | - |
| Transfer, assets held for sale | 2,138 | - | - | - | 2,138 |
| Exchange rate adjustment | -1,724 | -378 | -15 | -133 | -2,250 |
| 31 December 2012 | 110,361 | 32,372 | 969 | 7,166 | 150,868 |
| Addition | 2,079 | 2,454 | - | 11,922 | 16,455 |
| Disposal | 4,002 | 146 | 0 | 7,101 | 11,249 |
| Transfer | 4,694 | 458 | - | -5,152 | - |
| Exchange rate adjustment | -4,908 | -1,520 | -43 | -298 | -6,769 |
| 31 December 2013 | 108,224 | 33,618 | 926 | 6,537 | 149,305 |
| Depreciation and impairment losses | |||||
| 1 January 2012 | 43,911 | 31,059 | 377 | - | 75,347 |
| Depreciation | 6,465 | 1,598 | 42 | - | 8,105 |
| Impairment losses | 220 | - | - | - | 220 |
| Reversal of impairment losses | 566 | - | - | - | 566 |
| Disposal | 2,228 | 6,847 | 4 | - | 9,079 |
| Transfer, assets held for sale | 473 | - | - | - | 473 |
| Exchange rate adjustment | -782 | -282 | -6 | - | -1,070 |
| 31 December 2012 | 47,493 | 25,528 | 409 | - | 73,430 |
| Depreciation | 6,211 | 1,366 | 41 | - | 7,618 |
| Disposal | 2,458 | 145 | - | - | 2,603 |
| Exchange rate adjustment | -2,206 | -1,164 | -20 | - | -3,390 |
| 31 December 2013 | 49,040 | 25,585 | 430 | - | 75,055 |
| Carrying amount: | |||||
| 31 December 2012 | 62,868 | 6,844 | 560 | 7,166 | 77,438 |
| 31 December 2013 | 59,184 | 8,033 | 496 | 6,537 | 74,250 |
| Of which carrying amount of finance leased assets: |
|||||
| 31 December 2012 | 1,477 | - | - | - | 1,477 |
| 31 December 2013 | 1,925 | 1,136 | - | - | 3,061 |
Disposal for the year is mainly related to transfer to subsidiaries.
Impairment losses for 2012 of DKK 220m related to two container vessels written down to estimated fair value.
As part of the Company's activities, customary leasing agreements are entered into, especially with regard to the chartering of vessels, lease of containers, other equipment and dedicated capacity in certain strategically important container terminals. In some cases, the leasing agreements comprise purchase options for the Company and options for extension of the lease term.
In the financial statements, assets held under finance leases are recognised in the same way as owned assets.
Property, plant and equipment include assets which are leased out as part of the Company's activities. The future lease income is DKK 2.6bn (DKK 4.2bn) where of DKK 1.1bn (DKK 0.9bn) is receivable within one year, DKK 1.5bn (DKK 2.8bn) between one and five years and DKK 0.0bn (DKK 0.5bn) in more than five years.
Ships, containers, etc. with a carrying amount of DKK 12.3bn (DKK 15.9bn) have together with ships, containers, etc., owned by subsidiaries with a carrying amount of DKK 4.5bn (DKK 5.0bn) been pledged as security for loans of DKK 10.4bn (DKK 12.8bn).
Amounts in DKK million
| Invest- ments in subsidia- ries |
Invest- ments in associated companies |
|
|---|---|---|
| Cost | ||
| 1 January 2012 | 73,969 | 23,098 |
| Addition | 42,223 | 1,431 |
| Disposal | 3,785 | - |
| Transfer | 4 | -4 |
| Exchange rate adjustment | -2,009 | -381 |
| 31 December 2012 | 110,402 | 24,144 |
| Addition | 6,111 | 5 |
| Disposal | 224 | 1,592 |
| Transfer, assets held for sale | 4,911 | - |
| Transfer | -10 | 10 |
| Exchange rate adjustment | -5,023 | -993 |
| 31 December 2013 | 106,345 | 21,574 |
| Impairment losses | ||
| 1 January 2012 | 14,025 | 2,731 |
| Impairment losses 1 | 2,662 | - |
| Reversal of impairment losses | 3,328 | - |
| Disposal | 65 | - |
| Exchange rate adjustment | -194 | -40 |
| 31 December 2012 | 13,100 | 2,691 |
| Impairment losses 1 | 1,752 | - |
| Reversal of impairment losses | 999 | - |
| Exchange rate adjustment | -600 | -117 |
| 31 December 2013 | 13,253 | 2,574 |
| Carrying amount: | ||
| 31 December 2012 | 97,302 | 21,453 |
| 31 December 2013 | 93,092 | 19,000 |
1 Impairment losses are based on calculated value in use applying a discount rate of 10% p.a. (8-10% p.a.) after tax.
Transfer to Assets held for sale relates to investments in Dansk Supermarked A/S and F. Salling A/S expected to be partly disposed of in 2014. Further information can be found in note 26.
Furthermore, expected group internal transfer of The Maersk Company Limited is included.
Reference is made to pages 150-152 for a list of all significant subsidiaries and associated companies.
Other receivables comprise outlays and deposits, VAT receivables and other items to be reimbursed.
The Company does not have any particular credit risks regarding other receivables. Reference is made to note 18 for a description of currency and interest rate risks.
Recognised deferred tax assets and liabilities are attributable to the following:
| Assets | Liabilities | Net liabilities | |||||
|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||
| Intangible assets | 49 | - | - | - | -49 | - | |
| Property, plant and equipment | - | - | 980 | 918 | 980 | 918 | |
| Inventories | - | - | 114 | 122 | 114 | 122 | |
| Receivables, etc. | - | - | 28 | - | 28 | - | |
| Provisions, etc. | 497 | 136 | - | - | -497 | -136 | |
| Liabilities, etc. | - | - | 249 | 176 | 249 | 176 | |
| Tax loss carry forwards | 606 | 844 | - | - | -606 | -844 | |
| Other | - | - | 13 | 14 | 13 | 14 | |
| Total | 1,152 | 980 | 1,384 | 1,230 | 232 | 250 | |
| Offsets | -699 | -309 | -699 | -309 | - | - | |
| Total | 453 | 671 | 685 | 921 | 232 | 250 |
| Change in deferred tax, net during the year | 2013 | 2012 | |
|---|---|---|---|
| 1 January | 250 | -508 | |
| Recognised in the income statement | -15 | 812 | |
| Transfer | 8 | -45 | |
| Exchange rate adjustments | -11 | -9 | |
| 31 December | 232 | 250 |
Deferred tax assets of DKK 1.0bn (DKK 1.0bn) relating to mainly provisions have not been recognised. No tax value is recognised as it is not considered likely that the deferred tax assets can be realised in the foreseeable future.
There are no significant unrecognised tax liabilities on investments in subsidiaries, associated companies and joint ventures.
Amounts in DKK million
10 Inventories
| 2013 Raw materials and consumables 260 Bunker 3,222 Total 3,482 |
||
|---|---|---|
| 4,608 | ||
| 4,207 | ||
| 401 | ||
| 2012 | ||
No significant write-downs or reversals have been recognised on inventories.
Amounts in DKK million
11 Assets held for sale
Assets held for sale relates to investments in Dansk Supermarked A/S and F. Salling A/S expected to be partly disposed of in 2014. Reference is made to note 26.
Furthermore, expected group internal transfer of The Maersk Company Limited is included.
The share capital on 31 December 2013 comprises:
A shares DKK 2,197.8m divided into 2,197,619 shares of DKK 1,000 and 362 shares of DKK 500 B shares DKK 2,197.8m divided into 2,197,683 shares of DKK 1,000 and 234 shares of DKK 500
All shares are fully issued and paid up.
One A share of DKK 1,000 holds two votes. B shares have no voting rights.
Shareholder disclosure subject to section 104 in the Danish Financial Statements Act:
| Share capital |
Votes | ||
|---|---|---|---|
| A.P. Møller Holding A/S, Copenhagen, Denmark | 41.51% | 51.09% | |
| A.P. Møller og Hustru Chastine Mc-Kinney Møllers Familiefond, Copenhagen; Denmark | 8.37% | 12.84% | |
| The estate after Mærsk Mc-Kinney Møller, Copenhagen; Denmark | 3.69% | 6.43% | |
| Den A.P. Møllerske Støttefond, Copenhagen; Denmark | 2.94% | 5.86% | |
Note 13 in the consolidated financial statements include rules for changing the share capital, and information regarding the authorization of the Board of Directors to acquire own shares as well as the total number of own shares held by the Group.
| No. of shares of DKK 1,000 |
Nominal value | % of share capital | |||||
|---|---|---|---|---|---|---|---|
| Own shares (B shares) | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |
| 1 January | 29,070 | 29,729 | 29 | 30 | 0.66% | 0.68% | |
| Disposal | 2,544 | 659 | 2 | 1 | 0.06% | 0.02% | |
| 31 December | 26,526 | 29,070 | 27 | 29 | 0.60% | 0.66% |
Disposal of own shares are primarily related to the share option programme.
Amounts in DKK million
In 2013, the Company has established a restricted shares programme for employees, replacing the previous share option programme.
The fair value of restricted shares (A.P. Møller – Mærsk A/S B shares) granted to 115 employees was DKK 46m at the time of the grant. Total value of granted restricted shares recognised in the income statement is DKK 5m.
The transfer of restricted shares is contingent on the employee still being permanently employed and takes place when three years have passed from the time of granting. The employee is not entitled to any dividend during the vesting period.
Special conditions apply regarding illness, death and resignation as well as changes in the Company's capital structure, etc.
A portion of the Company's holding of own shares is reserved for transfer of restricted shares.
| Outstanding restricted shares | Employees1 | Total fair value1 |
|---|---|---|
| No. | DKK million | |
| Granted | 1,014 | 46 |
| Forfeited | 13 | |
| Outstanding 31 December 2013 | 1,001 |
1 At the time of grant.
The fair value per restricted share at the time of grant is calculated at DKK 45,315, which is equal to the average share price on the first five trading days following the release of A.P. Møller – Mærsk A/S' annual report .
The average remaining contractual life for the restricted shares as per 31 December 2013 is 2.3 years.
In addition to the restricted shares program, the Company has a share option programme for former partners in Firmaet A.P. Møller and other employees. Each share option granted is a call option to buy an existing B share of nominal DKK 1,000 in A.P. Møller - Mærsk A/S. Share options related to this programme have not been granted in 2013.
In 2012, the fair value of share options granted to 123 employees was DKK 39m at the time of such grant. Total value of granted share options recognised in the income statement is DKK 11m (DKK 17m). In addition to the share options granted to the employees in 2012, three partners in Firmaet A.P. Møller bought share options corresponding to a fair value of DKK 7m.
The share options was granted at an exercise price corresponding to 110% of the average of the market price on the first five trading days following the release of A.P. Møller - Mærsk A/S' annual report. Exercise of the share options is contingent on the option holder still being permanently employed at the time of exercise. The share options can be exercised when at least two years and no more than five years have passed from the time of granting and can only be exercised within the trading periods as stated in the internal rules for trading of A.P. Møller - Mærsk A/S' securities in force at any time. Special conditions apply regarding illness, death and resignation as well as changes in the Company's capital structure, etc.
The share options can only be settled in shares. A portion of the Company's holding of own shares is reserved for settlement of granted options.
| Outstanding share options | Partners in Firmaet A.P. Møller1 |
Employees1 | Total | Average exercise price |
Total fair value1 |
|---|---|---|---|---|---|
| No. | No. | No. | DKK | DKK million | |
| 1 January 2012 | 4,459 | 12,113 | 16,572 | 44,716 | |
| Granted | - | 4,356 | 4,356 | 49,843 | 39 |
| Sold | 792 | - | 792 | 49,843 | 7 |
| Exercised | - | 659 | 659 | 27,237 | |
| Forfeited | - | 472 | 472 | 52,351 | |
| Outstanding 31 December 2012 | 5,251 | 15,338 | 20,589 | 46,382 | |
| Exercisable 31 December 2012 | 3,684 | 8,076 | 11,760 | 41,183 | |
| Exercised | 237 | 2,307 | 2,544 | 30,421 | |
| Forfeited | 1,120 | 2,551 | 3,671 | 53,479 | |
| Outstanding 31 December 2013 | 3,894 | 10,480 | 14,374 | 47,394 | |
| Exercisable 31 December 2013 | 3,102 | 6,265 | 9,637 | 46,085 |
1 At the time of grant
The weighted average share price at the dates of exercise of shares was DKK 49,982 (DKK 43,124).
The average remaining contractual life as per 31 December 2013 is 2.0 years (2.3 years) and the exercise price for outstanding share options is in the range of DKK 27,237 to DKK 57,959 (DKK 27,237 to DKK 57,959).
In 2012, the fair value per option at the time of grant was calculated at DKK 8,839 based on Black & Scholes' options pricing model.
The following principal assumptions were used in 2012 in the valuation of the share options at the time of grant:
| 2012 | |
|---|---|
| Share price, five days average, DKK | 45,312 |
| Exercise price, DKK | 49,843 |
| Expected volatility (based on four years historical volatility) | 31.3% |
| Expected term | 4.0 years |
| Expected dividend per share, DKK | 1,000 |
| Risk free interest rate (based on the five years swap interest curve) | 1.6% |
Amounts in DKK million
| 2013 | 2012 | |
|---|---|---|
| Bank and other credit institutions | 26,690 | 34,342 |
| Finance lease liabilities | 2,287 | 2,599 |
| Issued bonds | 27,628 | 25,850 |
| Subsidiaries, etc., including finance lease liabilities | 63,313 | 54,883 |
| Total | 119,918 | 117,674 |
| Of which: | ||
| Classified as non-current | 46,123 | 59,388 |
| Classified as current | 73,795 | 58,286 |
| Finance lease liabilities | Minimum lease pay- ments |
Interest | Carrying amount |
Minimum lease pay ments |
Interest | Carrying amount |
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Within one year | 332 | 21 | 311 | 234 | 32 | 202 |
| Between one and five years | 1,234 | 117 | 1,117 | 1,539 | 97 | 1,442 |
| After five years | 886 | 27 | 859 | 988 | 33 | 955 |
| Total | 2,452 | 165 | 2,287 | 2,761 | 162 | 2,599 |
The finance lease agreements are described in note 6.
| Finance lease liabilities included in borrowings from subsidiaries |
Minimum lease pay- ments |
Interest | Carrying amount |
Minimum lease pay ments |
Interest | Carrying amount |
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Within one year | 243 | 81 | 162 | - | - | - |
| Between one and five years | 737 | 219 | 518 | - | - | - |
| After five years | 639 | 141 | 498 | - | - | - |
| Total | 1,619 | 441 | 1,178 | - | - | - |
| Aban- donment |
Restruc- turing |
Legal disputes, etc. |
Other | Total | ||
|---|---|---|---|---|---|---|
| 1 January 2013 | 4,739 | 87 | 2,493 | 2,628 | 9,947 | |
| Provision made | 1,106 | 10 | 371 | 2,076 | 3,563 | |
| Amount used | 66 | 74 | - | 407 | 547 | |
| Amount reversed | - | - | 702 | 800 | 1,502 | |
| Unwind of discount | 188 | - | - | - | 188 | |
| Exchange rate adjustment | -252 | -2 | -96 | -152 | -502 | |
| 31 December 2013 | 5,715 | 21 | 2,066 | 3,345 | 11,147 | |
| Of which: | ||||||
| Classified as non-current | 5,715 | 12 | 1,947 | 2,776 | 10,450 | |
| Classified as current | - | 9 | 119 | 569 | 697 |
Non-current provisions for abandonment of DKK 5.7bn (DKK 4.6bn) is expected realised after more than five years.
Provisions for abandonment comprise estimated expenses for abandonment of oil and gas fields at discounted value. Restructuring includes provisions for decided and publicly announced restructurings. Legal disputes, etc. include tax and duty disputes among other things. Other includes provisions for guarantees, onerous contracts, and risk under certain self-insurance programmes. The provisions are subject to considerable uncertainty, cf. note 24.
Reversals of provisions primarily relate to legal disputes, tax and duty disputes and contractual disagreements, which are recognised in the income statement under operating costs and tax.
Amounts in DKK million
Foreign exchange forwards and option contracts are used to hedge the currency risk related to recognised and unrecognised transactions. Interest rate swaps are used to hedge interest rate exposure on borrowings. Derivatives are entered into to hedge crude oil prices and bunker prices.
| Assets, net | 402 | -69 |
|---|---|---|
| Current liabilities | 1,156 | 571 |
| Non-current liabilities | 666 | 1,244 |
| Current receivables | 927 | 587 |
| Non-current receivables | 1,297 | 1,159 |
| 2013 | 2012 | |
The fair value of derivatives held at the balance sheet date can be allocated by type as follows:
| Fair value | Recognised in income statement |
Recognised in equity |
Fair value | Recognised in income statement |
Recognised in equity |
|
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Currency derivatives¹ | 343 | 191 | 152 | -112 | -284 | 172 |
| Interest rate derivatives¹ | 59 | 52 | 7 | 43 | 596 | -553 |
| Total | 402 | 243 | 159 | -69 | 312 | -381 |
1 Of which DKK 783m (DKK 857m) is related to fair value hedges.
The fair value recognised in equity relates to derivatives designated as effective hedging of future cash flows. The gains/losses are mainly expected to affect the income statement in the same periods as the cash flows are expected to occur. The expected timing of the effect on the income statement is as follows:
| Currency derivatives |
Interest rate derivatives |
Total | Currency derivatives |
Interest rate derivatives |
Total | |
|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | |
| Within one year | 152 | -54 | 98 | 172 | -261 | -89 |
| Between one and five years | - | 24 | 24 | - | -247 | -247 |
| After five years | - | 37 | 37 | - | -45 | -45 |
| Total | 152 | 7 | 159 | 172 | -553 | -381 |
The gains/losses, including realised transactions, are recognised as follows:
| 2013 | 2012 | ||
|---|---|---|---|
| Hedging foreign exchange risk on operating costs | 154 | -326 | |
| Hedging interest rate risk | -338 | -696 | |
| Hedging foreign exchange risk on the cost of property, plant and equipment | - | -6 | |
| Total effective hedging | -184 | -1,028 | |
| Ineffectiveness recognised in financial expenses | 21 | -4 | |
| Total reclassifed from equity reserve for hedges | -163 | -1,032 | |
| Derivatives accounted for as held for trading: | |||
| Currency derivatives recognised directly in financial income/expenses | 933 | 1,161 | |
| Interest rate derivatives recognised directly in financial income/expenses | -454 | 528 | |
| Net gains/losses recognised directly in the income statement | 479 | 1,689 | |
| Total | 316 | 657 |
Currency derivatives hedge future revenue, operating costs and investments and are recognised on an ongoing basis in the income statement and the cost of property, plant and equipment respectively.
Interest rate derivatives primarily swap floating to fixed rates on borrowings and are recognised in the income statement concurrently with the hedged interest expenses. They are also used to swap fixed rates to floating rates of which some are fair value hedges.
Furthermore, the Company enters into derivatives to hedge economic risks that are not accounted for as hedging. These derivatives are accounted for as held for trading.
For information about currencies, maturities, etc. reference is made to note 18.
| Financial assets measured at amortised cost | Carrying amount | |||
|---|---|---|---|---|
| 2013 | 2012 | |||
| Interest bearing receivables from subsidiaries, etc. | 49,347 | 46,409 | ||
| Finance lease receivables | 63 | 77 | ||
| Other interest-bearing receivables and deposits | 1 | 20 | ||
| Total interest-bearing receivables | 49,411 | 46,506 | ||
| Trade receivables | 12,975 | 18,334 | ||
| Other receivables (non-interest-bearing) | 2,868 | 2,200 | ||
| Other receivables from subsidiaries, etc. | 3,022 | 2,842 | ||
| Cash and bank balances | 8,289 | 1,819 | ||
| Total loans and receivables | 76,565 | 71,701 |
Fair value of the non-current receivables is not materially different from the carrying amount.
| Financial liabilities measured at amortised cost | Carrying amount |
Fair value |
Carrying amount |
Fair value |
|---|---|---|---|---|
| 2013 | 2013 | 2012 | 2012 | |
| Bank and other credit institutions | 26,690 | 27,646 | 34,342 | 35,887 |
| Finance lease liabilities | 2,287 | 2,287 | 2,599 | 2,594 |
| Issued bonds | 27,628 | 28,905 | 25,850 | 26,857 |
| Interest bearing loans from subsidiaries, including lease liabilities | 63,313 | 63,313 | 54,883 | 54,883 |
| Total borrowings | 119,918 | 122,151 | 117,674 | 120,221 |
| Trade payables | 16,927 | 16,215 | ||
| Other financial liabilities | 2,272 | 2,070 | ||
| Other payables to subsidiaries and associated companies, etc. | 7,648 | 8,266 | ||
| Total financial liabilities | 146,765 | 144,225 |
Fair value of listed issued bonds falls within level 1 of the fair value hierarchy. Fair value of remaining borrowing items fall within level 2 of the fair value hierarchy and are calculated on the basis of discounted interest and instalments.
Financial instruments measured at fair value can be divided into three levels:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
Level 3 – Inputs for the asset or liability that are not based on observable market data
| Level | |||||
|---|---|---|---|---|---|
| Carrying amount |
Quoted prices |
Other observable inputs |
Other measurement methods |
||
| 2013 | |||||
| Shares | 369 | - | - | 369 | |
| Total other equity investments (available for sale) | 369 | - | - | 369 | |
| Bonds Shares |
1,197 3 |
1,197 - |
- - |
- 3 |
|
| Total securities (held for trading) | 1,200 | 1,197 | - | 3 | |
| Derivatives | 2,224 | - | 2,224 | - | |
| Total financial assets | 3,793 | 1,197 | 2,224 | 372 | |
| Derivatives | 1,822 | - | 1,822 | - | |
| Total financial liabilities | 1,822 | - | 1,822 | - | |
| 2012 Shares |
371 | - | - | 371 | |
| Total other equity investments (available for sale) | 371 | - | - | 371 | |
| Bonds Shares |
1,251 4 |
1,251 - |
- - |
- 4 |
|
| Total securities (held for trading) | 1,255 | 1,251 | - | 4 | |
| Derivatives | 1,746 | - | 1,746 | - | |
| Total financial assets | 3,372 | 1,251 | 1,746 | 375 | |
| Derivatives | 1,815 | - | 1,815 | - | |
| Total financial liabilities | 1,815 | - | 1,815 | - |
Derivatives designated as cash flow hedges (hedging instruments) are equal to a net asset of DKK 159m (net liability of DKK 381m).
Fair value of level 3 assets and liabilities are primarily based on the present value of expected future cash flows. A reasonably possible change in the discount rate is not estimated to affect the Company's profit or equity significantly.
Amounts in DKK million
The Company's activities expose it to a variety of financial risks: market risks, i.e. currency risk and interest rate risk, credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise the potential adverse effects on the Company's financial performance. The Company uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by a central finance department under policies approved by the Board of Directors. The finance department identifies, evaluates and hedges financial risks in close co-operation with the Company's Business Units.
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company's profit or the value of its holdings of financial instruments. Below sensitivity analyses relate to the position of financial instruments at 31 December 2013.
The sensitivity analyses for currency risk and interest rate risk have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and the proportion of financial instruments in foreign currencies remain unchanged from hedge designations in place at 31 December 2013. Furthermore, it is assumed that the exchange rate and interest rate sensitivities have a symmetric impact, i.e. an increase in rates results in the same absolute movement as a decrease in rates.
The sensitivity analyses show the effect on profit or loss and equity of a reasonably possible change in exchange rates and interest rate.
The Company's currency risk arises due to income from shipping and oil-related activities are denominated mainly in USD, while the related expenses are incurred in both USD and a wide range of other currencies such as DKK, EUR, CNY and GBP. Overall the Company has net income in USD and net expenses in most other currencies. As the net income is in USD, this is also the primary financing currency. The majority of the Company's borrowings are thus in USD.
The main purpose of hedging the Company's currency risk is to hedge the USD value of the Company's net cash flow and reduce fluctuations in the Company's profit. The Company uses various financial derivatives, including forwards, option contracts and cross-currency swaps, to hedge these risks. The key aspects of the currency hedging policy are as follows:
An increase in the USD exchange rate of 10% against all other significant currencies to which the Company is exposed, is estimated to have a negative impact on the Company's profit before tax by DKK 0.6bn (DKK 0.3bn) and the Company's equity, excluding tax, negatively by DKK 1.4bn (DKK 1.1b). The sensitivities are based only on the impact of financial instruments that are outstanding at the balance sheet date, cf. notes 16 and 17, and are thus not an expression of the Company's total currency risk.
| Currency position of net interest-bearing debt |
Cash and bank balan- ces |
Other interest- bearing assets1 |
Borrow- ings |
Net interest- bearing debt |
Cash and bank balan- ces |
Other interest- bearing assets1 |
Borrow- ings |
Net interest bearing debt |
|
|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | ||
| USD | 2,005 | 44,439 | 78,287 | 31,843 | 1,493 | 42,979 | 77,695 | 33,223 | |
| EUR | 292 | 2,223 | 16,896 | 14,381 | 47 | 1,096 | 17,591 | 16,448 | |
| DKK | 3,133 | 374 | 9,200 | 5,693 | - | 143 | 7,970 | 7,827 | |
| Other currencies | 2,859 | 3,572 | 15,535 | 9,104 | 279 | 3,539 | 14,418 | 10,600 | |
| Total | 8,289 | 50,608 | 119,918 | 61,021 | 1,819 | 47,757 | 117,674 | 68,098 |
1 Other interest-bearing assets consist of bonds and interest-bearing receivables cf. note 17.
Interest rate swaps entered into for the purpose of hedging interest rate risks on loans are mainly in USD. Fair values can be found in note 16.
| Foreign exchange forwards and option contracts for hedging currency risks | Fair value | ||
|---|---|---|---|
| 2013 | 2012 | ||
| EUR | 157 | -538 | |
| DKK | 266 | 169 | |
| CNY | 0 | 1 | |
| GBP | 291 | -1 | |
| NOK | -386 | 236 | |
| Other currencies | 15 | 21 | |
| Total | 343 | -112 |
The Company has most of its debt denominated in USD, but part of the debt (e.g. issued bonds) is in other currencies such as DKK, EUR and NOK. Some loans are at fixed interest rates, while others are at floating interest rates.
The Company strives to maintain a combination of fixed and floating interest rates on its net debt, reflecting expectations and risks. The hedging of the interest rate risk is governed by a duration range and is primarily obtained through the use of interest rate swaps.
A general increase in interest rates by one percentage point is estimated, all other things being equal, to affect profit before tax negatively by DKK 0.3bn (negatively by DKK 0.4bn). The effect on equity, excluding tax effect, of an increase in interest rates as mentioned above is estimated to be positively by DKK 0.1bn (negatively by DKK 0.0bn).
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Amounts in DKK million
| Borrowings by interest rate levels inclusive of interest rate swaps |
Carrying amount |
Next interest rate fixing | ||
|---|---|---|---|---|
| 0-1 years | 1-5 years | 5- years | ||
| 2013 | ||||
| 0-3% | 101,134 | 88,455 | 9,607 | 3,072 |
| 3-6% | 11,752 | 2,240 | 3,263 | 6,249 |
| 6%- | 7,032 | 5,806 | 93 | 1,133 |
| Total | 119,918 | 96,501 | 12,963 | 10,454 |
| Of which: | ||||
| Bearing fixed interest | 30,224 | |||
| Bearing floating interest | 89,694 | |||
| 2012 | ||||
| 0-3% | 84,239 | 77,048 | 4,366 | 2,825 |
| 3-6% | 32,720 | 16,685 | 8,887 | 7,148 |
| 6%- | 715 | 571 | 144 | - |
| Total | 117,674 | 94,304 | 13,397 | 9,973 |
| Of which: | ||||
| Bearing fixed interest | 36,193 | |||
| Bearing floating interest | 81,481 | |||
The Company has substantial exposure to financial and commercial counterparties but has no particular concentration of customers or suppliers. To minimise the credit risk, financial vetting is undertaken for all major customers and financial institutions, adequate security is required for commercial counterparties and credit limits are set for financial institutions and key commercial counterparties.
| Maturity analysis of trade receivables | 2013 | 2012 |
|---|---|---|
| Receivables not due | 9,748 | 14,600 |
| Less than 90 days overdue | 2,806 | 3,044 |
| More than 90 days overdue | 1,099 | 1,315 |
| Receivables, gross | 13,653 | 18,959 |
| Provision for bad debt | 678 | 625 |
| Carrying amount | 12,975 | 18,334 |
| Change in provision for bad debt | ||
| 1 January | 625 | 531 |
| Provisions made | 228 | 292 |
| Amount used | 145 | 135 |
| Amount reversed | - | 52 |
| Exchange rate adjustment | -30 | -11 |
| 31 December | 678 | 625 |
It is of great importance for the Company to maintain a financial reserve to cover the Company's obligations and investment opportunities and to provide the capital necessary to offset changes in the Company's liquidity due to changes in the cash flow from operating activities.
The flexibility of the financial reserve is subject to ongoing prioritisation and optimisation, among other things, by focusing on release of capital and following up on the development in working capital.
| Maturities of liabilities and commitments | Carrying amount |
Cash flows including interest | |||
|---|---|---|---|---|---|
| 0-1 year | 1-5 years | 5- years | Total | ||
| 2013 | |||||
| Bank and other credit institutions | 26,690 | 4,523 | 19,535 | 6,488 | 30,546 |
| Finance lease liabilities | 2,287 | 332 | 1,234 | 886 | 2,452 |
| Issued bonds | 27,628 | 8,490 | 13,714 | 10,467 | 32,671 |
| Interest bearing loans from subsidiaries, etc. | 63,313 | 62,686 | 737 | 639 | 64,062 |
| Trade payables | 16,927 | 16,927 | - | - | 16,927 |
| Other payables | 2,272 | 2,272 | - | - | 2,272 |
| Other payables to subsidiaries, etc. | 7,648 | 7,648 | - | - | 7,648 |
| Non-derivative financial liabilities | 146,765 | 102,878 | 35,220 | 18,480 | 156,578 |
| Derivatives | 1,822 | 1,156 | 495 | 171 | 1,822 |
| Total recognised in balance sheet | 148,587 | 104,034 | 35,715 | 18,651 | 158,400 |
| Operating lease commitments | 15,294 | 25,324 | 5,577 | 46,195 | |
| Capital commitments | 8,329 | 5,098 | - | 13,427 | |
| Total | 127,657 | 66,137 | 24,228 | 218,022 | |
| 2012 | |||||
| Bank and other credit institutions | 34,342 | 6,257 | 20,783 | 10,925 | 37,965 |
| Finance lease liabilities | 2,599 | 234 | 1,539 | 988 | 2,761 |
| Issued bonds | 25,850 | 980 | 20,243 | 9,124 | 30,347 |
| Interest bearing loans from subsidiaries, etc. | 54,883 | 52,146 | 1,042 | 2,115 | 55,303 |
| Trade payables | 16,215 | 16,215 | - | - | 16,215 |
| Other payables | 2,070 | 2,070 | - | - | 2,070 |
| Other payables to subsidiaries, etc. | 8,266 | 8,266 | - | - | 8,266 |
| Non-derivative financial liabilities | 144,225 | 86,168 | 43,607 | 23,152 | 152,927 |
| Derivatives | 1,815 | 571 | 1,115 | 129 | 1,815 |
| Total recognised in balance sheet | 146,040 | 86,739 | 44,722 | 23,281 | 154,742 |
| Operating lease commitments | 18,792 | 38,124 | 5,455 | 62,371 | |
| Capital commitments | 13,355 | 16,880 | - | 30,235 | |
| Total | 118,886 | 99,726 | 28,736 | 247,348 | |
Amounts in DKK million
As part of the Company's activities, customary agreements are entered into regarding charter and operating leases of ships, containers, port facilities, etc. The future charter and operating lease payments for continuing operations are:
| 2013 | 2012 | |
|---|---|---|
| Within one year | 15,294 | 18,792 |
| Between one and two years | 10,810 | 15,800 |
| Between two and three years | 6,882 | 11,208 |
| Between three and four years | 4,538 | 7,028 |
| Between four and five years | 3,094 | 4,088 |
| After five years | 5,577 | 5,455 |
| Total | 46,195 | 62,371 |
| Net present value 1 | 40,557 | 53,504 |
1 The net present value has been calculated using a discount rate of 6% p.a. (6% p.a.).
About one-third of the time charter payments within shipping activities are estimated to relate to operating costs for the assets.
Total operating lease costs incurred are stated in note 1.
At the end of 2013, capital commitments relating to ships, rigs, etc., on order amount to DKK 13.4bn (DKK 30.2bn).
The decrease in capital commitments is related to contractual payments during the year, combined with no new significant commitments in 2013. Furthermore, four drillship contracts were transferred to a subsidiary in 2013.
As part of finance lease agreements entered into with subsidiaries, etc., capital commitments relating to dedicated capacity in certain strategically important container terminals at the end of 2013 amount to DKK 4.3bn (DKK 0.0bn).
Guarantees amount to DKK 14.5bn (DKK 16.7bn). DKK 13.5bn (DKK 15.8bn) related to subsidiaries. The guarantees are not expected to be realised, but they can mature within one year.
Except for customary agreements within the Company's activities, no material agreements have been entered into that will take effect, change or expire upon changes of the control over the Company.
The necessary facility of DKK 2.1bn (DKK 2.2bn) corresponding to USD 380m (USD 380m) has been established in order to meet the requirements for trading in the USA under the American Oil Pollution Act of 1990 (Certificate of Financial Responsibility).
The container trades have entered into certain agreements with terminals, port authorities, etc., containing volume commitments including an extra payment in case minimum volumes are not met.
The Company is involved in a number of legal disputes. The Company is also involved in tax disputes in certain countries. Some of these involve significant amounts and are subject to considerable uncertainty.
Tax may crystallise if the Company leaves the tonnage tax regime and on repatriation of dividends. Through participation in joint taxation scheme with A.P. Møller Holding A/S, the Company is jointly and severally liable for taxes payable.
| 2013 | 2012 | ||
|---|---|---|---|
| Change in working capital | |||
| Inventories | 792 | 409 | |
| Trade receivables | 4,276 | 229 | |
| Other receivables and prepayments | -193 | 149 | |
| Other receivables from subsidiaries, etc. | -303 | 4 | |
| Trade payables and other payables, etc. | -767 | -2,506 | |
| Other debt to subsidiaries, etc. | -268 | -42 | |
| Exchange rate adjustment of working capital | -197 | -139 | |
| Total | 3,340 | -1,896 | |
| Purchase of intangible assets and property, plant and equipment | |||
| Addition | -16,455 | -15,117 | |
| Of which finance leases, etc. | 1,462 | - | |
| Of which borrowing costs capitalized on assets | 107 | 208 | |
| Change in payables to suppliers regarding purchase of assets | 41 | -1,098 | |
| Change in provision for abandonment | 1,106 | -108 | |
| Total | -13,739 | -16,115 | |
| Other financial investments | |||
| Sale of non-current assets available-for-sale | 4 | 6 | |
| Loan repayments received | 32 | 69 | |
| Total | 36 | 75 |
Other non-cash items related primarily to adjustment of provision for bad debt regarding trade receivables.
Amounts in DKK million
| Subsidiaries | Associated companies |
Joint ventures | Management 1 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||
| Revenue | 8,006 | 15,072 | - | - | 140 | 146 | - | - | |
| Operating costs | 54,554 | 62,345 | 1,201 | 1,089 | 3,161 | 3,195 | 64 2 |
70 2 |
|
| Remuneration to management | - | - | - | - | - | - | 89 | 96 | |
| Other income | 292 | 1,096 | - | 1 | 36 | 51 | 11 | 11 | |
| Dividends 3 | 2,179 | 5,055 | 63 | 68 | 74 | 68 | - | - | |
| Financial income | 1,906 | 2,176 | 298 | 424 | - | - | - | - | |
| Financial expenses | 1,276 | 648 | - | 5 | - | - | - | - | |
| Interest bearing receivables, non-current | 31,182 | 30,467 | - | - | - | - | - | - | |
| Derivatives, non-current | 176 | 175 | 116 | 87 | - | - | - | - | |
| Trade receivables | 3,336 | 4,976 | 14 | - | 95 | 173 | 46 2 |
- | |
| Tax receivables | 738 | 523 | - | - | - | - | - | - | |
| Interest bearing receivables, current | 18,165 | 15,942 | - | - | - | - | - | - | |
| Derivatives, current | 184 | 110 | 109 | 83 | - | - | - | - | |
| Other receivables, current | 2,959 | 2,751 | 24 | 49 | 39 | 42 | - | - | |
| Prepayments | 150 | - | - | - | - | - | - | - | |
| Cash and bank balances | - | - | 1,121 | 816 | - | - | - | - | |
| Interest bearing debt, non-current | 1,016 | 3,000 | - | - | - | - | - | - | |
| Derivatives, non-current | - | - | 195 | 521 | - | - | - | - | |
| Interest bearing debt, current | 62,296 | 51,883 | - | - | 1 | - | 23 | 22 | |
| Trade payables | 6,420 | 5,622 | 138 | 94 | 408 | 331 | - | 12 | |
| Tax payable | 550 | 616 | - | - | - | - | - | - | |
| Derivatives. current | 284 | 145 | 283 | - | - | - | - | - | |
| Other liabilities, current | 7,645 | 8,227 | 3 | 39 | - | - | - | - | |
| Investment in activities, property, plant | |||||||||
| and equipment | 3,247 | 3,645 | - | - | - | - | - | 18 | |
| Capital increases and purchase of shares | 6,111 | 42,333 | 5 | 1,431 | - | - | - | - |
1 The Board of Directors and the Executive Board in A.P. Møller - Mærsk A/S, A.P. Møller Holding A/S, A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal and their close relatives (including undertakings under their significant influence). Trade receivables and payables include customary business related accounts in connection with shipping activities.
2 Includes commission and commercial receivables to Maersk Broker K/S from chartering, purchase and sale of ships as well as time charter hire to part owners.
3 Excluding dividend from own shares.
A.P. Møller Holding A/S, Copenhagen, Denmark has control over the Company and prepares consolidated financial statements. A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal is the ultimate owner. Related parties also include the companies in which the Company excercises significant influence.
One (one) member of the Executive Board participates in one (one) shipping partnership with one vessel that is operated as part of the A.P. Moller - Maersk fleet. The A.P. Møller - Mærsk Group owns more than 50% (50%) of the vessel and holds the ultimate control. The vessel is operated directly in the market and all transactions between related parties and the Company are subject to arm's length conditions.
During the year DKK 0m (DKK 1m) has been expensed regarding office rent and shares of DKK 2m (DKK 0m) have been sold to the A.P. Møller og Hustru Chastine Mc-Kinney Møllers Fond til almene Formaal.
In relation to Danske Bank's arrangement of payment transactions, sale and purchase of securities, etc. only the related costs are included in the above.
None of the Executive Board members bought any share options in 2013. During 2012 three members of the Executive Board bought 792 share options in total corresponding to a fair value of DKK 7m. Further information is provided in note 13.
Dividends distributed are not included.
The financial statements for 2013 for A.P. Møller - Mærsk A/S have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and Danish disclosure requirements for listed companies. In addition, the financial statements have been prepared in accordance with IFRS issued by the International Accounting Standards Board (IASB).
The Company uses DKK as a presentation currency, while functional currency is USD.
The accounting policies of the Company are consistent with the accounting policies for the A.P. Moller - Maersk Group (note 27 in the consolidated financial statements) with the following exceptions:
Amounts in DKK million
When preparing the annual report of the Company, management undertakes a number of accounting estimates and judgements to recognize, measure and classify the Company's assets and liabilities.
Estimates that are material to the Company's financial reporting are made on the basis of, inter alia, determination of the useful life and residual value of property, plant and equipment, determination of impairment of property, plant and equipment and financial non-current assets, recognition of deferred tax assets and recognition of provisions.
The accounting estimates and judgements are described in further detail in note 28 in the consolidated financial statements.
Changes in accounting policies are described in note 29 of the consolidated financial statements. The accounting policies and changes to standards (IAS and IFRS) and interpretations (IFRIC) are consistent with those applied by the Group. None of these changes have had an effect on the accounting policies for the Company.
Changes in standards and interpretations and amendments in coming years are stated in note 29 of the consolidated financial statements. The mentioned changes to accounting policy of the Group, do not or only to a limited extend impact the accounting policy of the Company. However the effect of certain standards is undertermined at this point of time.
7 January 2014 the Group entered into an agreement to sell 48.68% of the shares in Dansk Supermarked A/S and 18.72% of the shares in F. Salling A/S. Further information can be found in note 30 of the consolidated financial statements.
Esplanaden 50 DK-1098 Copenhagen K Registration no. 22756214
Michael Pram Rasmussen, Chairman Niels Jacobsen, Vice chairman Ane Mærsk Mc-Kinney Uggla, Vice chairman Erik Rasmussen Robert Routs
Nils S. Andersen, Group CEO Claus V. Hemmingsen
Audit Committee:
Remuneration Committee: Michael Pram Rasmussen, Chairman Niels Jacobsen Ane Mærsk Mc-Kinney Uggla
Auditors:
KPMG
Editors
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