Maersk unveils plans to accelerate business transformation

Maersk to accelerate business transformation

A.P. Moller-Maersk (Maersk) has said it will accelerate efforts to transform its business model to an integrated end-to-end container logistics provider following its strong financial performance in 2020.

During Maersk’s 2021 Capital Markets Day, CEO Soren Skou said the company continues to see a “significant opportunity” in the market for global end-to-end logistics and is confident it can continue to deliver value generating predicted 7.5% returns of invested capital (ROIC) for the period 2021-2025.

Maersk has been looking to change its operations from an ocean carrier to meet demand from cargo owners and end consumers for faster, more nimble and reliable services.

We will continue to execute on the strategy through capital discipline. Given the financial strength of the company we are able to maintain a strong balance sheet and use cash to invest in business, acquisitions, ordinary dividends and lastly return excess cash through share buy-back or extra-ordinary dividends,”Skou said. 

Vincent Clerc, CEO of Ocean and Logistics, Maersk, said, “With our portfolio, our approach, and the need that we see across customers and verticals, we are confident that Logistics & Services has become our growth engine, capable of growing organically at 10 pct. per year while maintained a strong EBIT margin above 6%.”

To support this growth, Maersk will spend about $1 billion over the coming two years and continue to “complement this with Mergers and Acquisitions to continue to build up capabilities and progressively scale”.

Also, on the terminal side, Maersk will focus on best-in-class returns and over the next five years the company plans to invest approximately $600 million in total on automation in around 30 terminals.

The company has already seen significant improvements on the operational side as well as reductions of carbon emissions from increased use of automation.

Maersk also announced the signing of the UN Global Compact commitment letter to a ‘Business Ambition of 1.5C’, committing to set a long-term science-based target to reach net-zero emissions across the full value chain no later than 2050 and set interim targets in line with Science Based Targets initiative criteria.

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