Maersk Line or Maersk SeaLand

Mission, values and strategy

The mission A.P. Moller - Maersk is dedicated to Improving life for all by integrating the world At A.P. Moller - Maersk

We aspire to provide truly integrated logistics. Across oceans, ports, on land and in the air. We are combining our supply chain infrastructure with the power of our people and technology to drive end-to-end innovation that accelerates our customers success. With a dedicated team of 100,000+ talents, operating in more than 130 countries. We explore new frontiers and embrace new technologies because we see change as an opportunity.

Managing a year of disrupted supply chains and aligning with climate change

Maersk is doing its part where it can add the most value, doubling down on solutions to keep the worlds supply chains open for business year 2020/2021, as customers continue to be challenged with disruptions, capacity and equipment shortages and port congestion. At the same time, these supply chain disruptions unfortunately had a negative impact on Maersks carbon emissions for

Maersk Partnership and Acquisitions

Maersk continued to deliver record results in Q3 2022 as revenue increased by 37%. Profitability was driven by the substantially higher freight rates, however, as expected, freight rates began to decline in the second part of the quarter, due to weakening customer demand, coupled with markets beginning to normalize with fewer supply chain disruptions and progressive unwinding of congestion. On 22 December 2021, the Group signed an agreement to acquire 100% of the shares in LF Logistics Holdings Limited, a leading omnichannel fulfilment contract logistics company in Asia Pacific. The acquisition was completed end of August 2022.

A comprehensive strategy on Environmental, Social, and Governance priorities &

building resilience

In 2021, A.P. Moller - Maersk reviewed the priorities to ensure a comprehensive focus on all material Environmental, Social and Governance (ESG) issues while integrating ambitions and targets into its business strategy. The ESG priorities are grounded in a strong foundation of societal responsibility and a commitment to serve the customers needs for sustainable logistics solutions, and aligned with key external standards and ratings. This ensures that Maersk prioritizes the issues that are most material to society and to Maersk, with proportional responses and solid metrics to track progress and hold Maersk accountable. As Maersk embarks on the roadmap to deliver on its updated targets, Maersk is committed to tying performance on key ESG metrics to executive remuneration from 2023.

Maersk engagement with customers on sustainability

Sustainability is becoming an integrated element in Maersk engagement with its customers and product offerings. Maersk listens to and engages with its customers on sustainability as part of daily business relationships and in dedicated fora. Maersk is driven by a commercial need to understand customer needs and develop solutions and services that are well received in the market. It is also interested in its customers needs and priorities as input to continuous evaluation of Maersks strategic direction, and Maersk is always looking for potential partners that help in achieving its sustainability goals.

Driving change through pricing

Economists and climate experts agree that the most effective way of driving the green transition of society is to put a price on emissions. Maersk believes International Maritime Organization (IMO) should take steps to introduce a greenhouse gas price phased in over a couple of years by 2025 to reach a price level covering the competitiveness gap between fossil and renewable fuels. A fair estimate of this gap would be at least 450 USD per tonne fuel, i.e., at least 150 USD per tonne CO equivalent, in the medium term at current oil price.

.

Human capital and a new people strategy

Maersk needs highly engaged employees with relationship-building skills to digitize, democratize and decarbonize global supply chains. A key priority in its ESG strategy is to create an engaging environment for all colleagues, based on the premise that its people are the foundation for our success as a company, and that it wants everyone to continue to learn and grow.

1. A ready supply of empathic, ambitious and purpose and values-driven leaders who inspire our employees to do their very best.

2. Continued investment in the development of all employees and outsized investments in areas that particularly fuel its global integrator strategy and drive customer outcomes.

3. A strong employer brand and talent acquisition processes that help Maersk attracts the right skills from the external market. Maersk is investing in these three areas and developing new measures for each in the coming years.

The Maersk group is made up of more than 160 different nationalities from all over the world. Making up huge number of its workforce. Women constitute additional talent, which is capable of forcing a different view. Hence, Maersk wants to provide its talented female employees with time to take care of their personal priorities and return to work with conviction. Maersk has seen maternity leave increase from three to six months, as well as options for flexitime and working from home. Also, women are not just joining the workforce, they are taking strides into senior management.

Financial Highlights and Market Situation

Sren Skou

CEO of A.P. Moller - Maersk

In Q2, revenue grew to USD 21.7bn, earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings before interest and taxes (EBIT) increased to USD 10.3bn and USD 9.0bn respectively, and free cash flow rose to USD 6.8bn. The Q2 net result came in at USD 8.6bn and USD 15.4bn for the first half of the year. Return on invested capital (ROIC) was at 62.5% for the past 12 months.

Sren Skou

CEO of A.P. Moller - Maersk

In Ocean, revenue grew to USD 17.4bn and EBIT increased to USD 8.5bn over the second quarter. The higher freight rates were partly offset by 7.4% lower volumes and by higher fuel, handling, and network costs. Although spot rates have softened from their peak earlier in the year, the company continued to sign contracts at rates above previous year levels given strong demand and continuing global supply chain congestion. During Q2, Maersk maintained its strong momentum in bringing integrated logistics solutions to customers. For the quarter, revenue in Logistics grew 61% to USD 3.5bn and EBIT increased to USD 234m mainly due to higher volumes from new customer wins and increased spending from existing customers. Cargo.

In Terminals, revenue grew to USD 1.1bn and EBIT increased to USD 316m, mainly driven by strong import demand in the United States and above market growth in Asia as well as higher storage income, which was however partly offset by higher costs. Global demand for logistics services continued to moderate across global supply chains in Q2 2022.

Factors	Change	Effect on EBIT (midpoint of guidance) Rest of year
Container freight rate	+/- 100 USD/FFE	+/- USD 0.6bn
Container freight volume	+/- 100,000 FFE	+/- USD 0.2bn
Bunker price (net of expected BAF coverage)	+/- 100 USD/tonne	+/- USD 0.2bn
Foreign exchange rate (net of hedges)	+/- 10% change in USD	+/- USD 0.1bn

1- Maersk managers are adapting with various types of industry and market changes to nurture a contemporary approach to management. Analyze the various contemporary management practices of Maersk. ?

2- Digital transformation of firms in separate industries has been one of the core elements in several nations development and public policy plans. Discuss the aspects which Maersk used to digitally transform and implement their environmental, social and governance framework. ?

3- In the Business-to-Business field, pioneer firms establish wide and strong relationships with their customers through communication and marketing activities especially public relations. In your point of view, discuss Maersks current and potential public relations and publicity to communicate with its large base of international customers. ?

4- HRM teams are responsible to develop employees towards digital mind-set , and adopted technologies to enhance HR practices and employees performance. Discuss how technological development affect human resources management at Maersk and suggest different training methods for employees orientation towards protecting the environment and sustainability priorities such as the decarbonizing logistics. ?

5- Maersk HR professionals can support organizational strategies and success through employees career development and competency models to ensure that all aspects of talent management are implemented. Discuss this statement and illustrate different ways to get this done. ?

6- Globally, the logistics industry has seen an immense growth over the past decade, with 40% of organisations now using third party logistics (3PL) that its trend now is on the rise. The industry being said to be worth $750 billion globally, and $174 billion in Europe. This shows an increase in jobs for transporters, warehouse facility owners, and brokers in freight-related jobs. Logistics plays a huge role within todays economy. For example, it is estimated that the UK Logistics & Posts Sector is worth 55 billion to the economy and comprises 5% of the UK GDP. The industry also employs 1.7m people. This paragraph highlights the importance of the logistics industry, what are the most relevant KPIs for measuring the maritime logistics performance and how can we benefit of studying Maersk as a successful company in this field to improve our logistics and shipping companies performance in Egypt?

7- In the appendices 1 and 2, you will find Maersks Financial Statements over three years from 2019 till 2021. Analyze its financial performance from all dimensions (Profitability, Activity, Liquidity, Solvency) and make relevant comments regarding your expectations of the trend of this performance in the subsequent years. ?