Full Year 2024 AP Moeller - Maersk A/S Earnings Call

February 6, 2025

I'm the CEO of a P moller Maersk and with me in the room today is our CFO Patrick <unk>.

We start with the highlights from the year that just passed.

On the back of a strong fourth quarter, we closed the books for 2024 with a full year EBITDA of $12 $1 billion and an EBIT of $6 5 billion. This figure Mark the best financial year in Merck's history outside the pandemic fueled boom of the years 2021 and 'twenty to 'twenty two.

CFO Patrick Jani: CFO Patrick Jani. We start with the highlights from the year that just passed. On the back of a strong fourth quarter, we close the books for 2024 with a full-year EBITDA of $12.1 billion and an EBIT of $6.5 billion. This figure marks the best financial year in Maersk's history outside the pandemic-fuelled boom of the years 2021 and 2022. As important as these financial results are the great strides that we have made internally in making the business better, stronger and more resilient, notwithstanding the high uncertainty we saw in our external environment, and I want to thank all of the team for achieving this.

We start with the highlights from the year that just passed.

On the back of a strong fourth quarter, we closed the books for 'twenty to 'twenty four with a full year EBITDA of $12 $1 billion and an EBIT of $6.5 billion.

This figure Mark the best financial year in Merck's history outside the pandemic fueled boom of the years 2021 and 'twenty to 'twenty two.

As important as these financial results are the great strides that we have made internally in making the business better stronger and more resilient notwithstanding the high uncertainty we saw in our external environment and I want to thank all of the team for achieving this.

Vincent Clerc (A.P. Moller: The launch of Gemini last Saturday on 1 February is the first result of years of hard work and collaboration by our teams from designing the network to preparing our vessels and hub terminals. I will have a bit more to say about Gemini later in the call. Looking forward to 2025, we count on our operating skills and our agility to continue to deliver good results. We expect global volume growth to be around 4% subject to any major trade disruptions, and for us to grow in line with the market. There has been much discussion about potential Red Sea reopening in recent weeks. We do, however, see no imminent indication of the reopening, but we will continue to monitor the situation closely.

We made clear and tangible progress in our growth segments logistics and services with a sustainable step change in margin during the year from two 5% in the first half to four 6% in the second half this step change or to our continued focus on productivity and cost management, while achieving close to 10.

CFO Patrick Jani: We made clear and tangible progress in our growth segment Logistics and Services with a sustainable step change in margin during the year from 2.5% in the first half to 4.6% in the second half. This step change owes to our continued focus on productivity and cost management, while achieving close to 10% growth here in the last quarter. We are not yet where we want to be, but the operational improvements that we have made in Fulfilled by Maersk are starting to show results. Then, we have Ocean, which demonstrated strong operations and more importantly, agility in the wake of the Red Sea disruptions, as well as strong market demand.

We made clear and tangible progress in our growth segments logistics and services with a sustainable step change in margin during the year from two 5% in the first half to four 6% in the second half. This step change owes to our continued focus on productivity and cost management, while achieving close to 10%.

Sent a growth here in the last quarter.

We are not yet where we want to be but the operational improvements that we've made and fulfilled by Maersk is starting to show results.

Growth here in the last quarter we.

Then we have ocean, which demonstrated strong operations and more importantly, agility in the wake of the Red Sea disruptions as well as strong market demand.

We are not yet where we want to be but the operational improvements that we've made and fulfilled by Maersk is starting to show results.

Vincent Clerc (A.P. Moller: What all of this means for our financial guidance is that we expect an underlying EBIT for 2025 to be breakeven, between breakeven and $3 billion. I will explain the context and the assumptions underpinning the guidance in more detail later on the call. With the books now closed on 2024, we can also announce the dividend proposal for the year just passed. For 2024, the dividend proposals will be set by the A.P. Moller - Maersk Board at the AGM on 18 March and is a dividend per share of 1,120 DKK. This is equivalent to a 30% payout of our underlying net results in line with our dividend policy and higher than last year's payout.

Then we have ocean, which demonstrated strong operations and more importantly, agility in the wake of the Red Sea disruptions as well as strong market demand.

We responded to the changes operate in the operate in operating environment decisively, while maintaining stable and reliable operation for our customers.

CFO Patrick Jani: We responded to the changes in the operating environment decisively while maintaining stable and reliable operation for our customers. Meanwhile, we continue to look forward and plan and prepare for our new ocean network, Gemini. In terminals, we did not only maintain, but surpassed the strong performance from the year prior. The portfolio of gateway terminals generated an impressive return on invested capital of 13.5%, all the while under-tanking growth investments to expand and extend the portfolio for the future. As we look ahead to 2025, we have several things to feel excited about, but our ocean network, Gemini, in collaboration with Hapag-Lloyd, is one of these.

We responded to the changes operate in the operate in operating environment decisively, while maintaining stable and reliable operation for our customers.

Meanwhile, we continue to look forward and planned and prepared for a new Ocean network Gemini.

In terminals, we not we did not only maintain but surpassed the strong performance from the year prior.

The portfolio of Gateway terminals generated an impressive return on invested capital of 13, 5% all the while undertaking growth investments to expand and extend the portfolio for the future.

In terminals, we not we did not only maintain but surpassed the strong performance from the year prior.

The portfolio of Gateway terminals generated unimpressive return on invested capital of 13.5% all the while undertaking growth investments to expand and extend the portfolio for the future.

As we look ahead to 2025, we have several things to feel excited about.

Vincent Clerc (A.P. Moller: On the back of a better than expected 2024, the strong balance sheet bolstered by further cash generation in 2024 and an improved outlook for 2025, we are also in a position to reinstate the share buyback program, which we suspended this time last year. The program will start effective tomorrow with a size of approximately $2 billion and a duration of 12 months. This implies that the total cash return to shareholder will be approximately $4.4 billion, of which $2.4 billion is the proposed 2024 dividend subject to AGM approval, and the remaining $2 billion, the reinstated share buyback. This follows the TSR of 8% in 2024 that we achieved for shareholders through the cash dividend for 2023, the Svitzer dividend in-kind, and the share buyback until the suspension last February.

But our Ocean network Gemini in cooperation with Hapag Lloyd is one of these Gemini marks the most innovative milestone in the history of Merck and represents the first step in what we call the network of the future.

As we look ahead to 2025, we have several things to feel excited about.

But our Ocean network Gemini in cooperation with Hapag Lloyd is one of these Gemini marks the most innovative milestone in the history of Maersk and represents the first step in what we call the network of the future.

CFO Patrick Jani: Gemini marks the most innovative milestone in the history of Maersk and represents the first step in what we call the network of the future. The launch of Gemini last Saturday, on February 1st, is the first result of years of hard work and collaboration by our teams from designing the network to preparing our vessels and hub terminals.

The launch of Gemini last Saturday on February 1st is the first result of years of hard work and collaboration by our teams from designing the network to preparing our vessels and hub terminals.

I will have a bit more to say about Gemini later in the call.

But looking forward to 2025, we count on our operating skills and our agility to continue to deliver good results, we expect global volumes global volume growth to be around 4% subject to any major trade disruptions and for us to grow in line with the market.

CFO Patrick Jani: I will have a bit more to say about GemIIni later in the call. But looking forward to 2025, we count on our operating skills and our agility to continue to deliver good results. We expect global volume growth to be around 4%, subject to any major trade disruptions, and for us to grow in line with the market. There has been much discussion about potential Red Sea reopening in recent weeks. We do, however, see no imminent indication of the reopening, but we will continue to monitor the situation closely. What all of this means for our financial guidance is that we expect an underlying EBIT for 2025 to be between breakeven and $3 billion.

I will have a bit more to say about Gemini later in the call.

There has been much discussion about potential read see reopening in recent weeks, we do however, see no imminent education of the reopening, but we will continue to monitor the situation closely.

Vincent Clerc (A.P. Moller: Looking further forward, we are confident to continue the share buyback in the years following 2025, given the balance sheet strength that we have today. As mentioned at the start, this quarter marked a strong finish to a financial year with strong performance and operational progress, notwithstanding a very dynamic external environment. In Logistics & Services, we saw good revenue growth driven by air and LCL in our Transported by Maersk service model by warehousing and Fulfilled by Maersk. We also continued to progress in improving the underlying performance in Middle Mile as well as Last Mile, who continued to track positively in Q4 and would expect to see further improvement in the coming quarters.

There has been much discussion about potential read see reopening in recent weeks, we do however, see no imminent education of the reopening, but we will continue to monitor the situation closely.

What all of this means for our financial guidance is that we expect an underlying EBIT for 2025 to be breakeven between breakeven and $3 billion I will explain the context and the assumptions underpinning the guidance in more detail later on the call.

What all of this means for our financial guidance is that we expect an underlying EBIT for 2025 to be breakeven between breakeven and $3 billion I would explain the context and the assumptions underpinning the guidance in more detail later on the call.

With the books now close on 2024, we can also announce the dividend proposal for the year just passed for 2020 for the dividend proposals will be set by the APM epidermal aboard at the AGM on March 18, and is a dividend per share of 1100 20 Danish kroner.

CFO Patrick Jani: I will explain the context and the assumptions underpinning the guidance in more detail later on the call. With the books now closed on 2024, we can also announce the dividend proposal for the year just passed. For 2024, the dividend proposals will be set by the A.P. Moller Board at the AGM on March 18 and is a dividend per share of 1,120 Danish Kroners. This is equivalent to a 30% payout of our underlying net results in line with our dividend policy and higher than last year's payout. On the back of a better-than-expected 2024, the strong balance sheet bolstered by further cash generation in 2024 and an improved outlook for 2025, we are also in a position to reinstate the share buyback program, which was suspended this time last year.

With the books now close on 2024, we can also announce the dividend proposal for the year just passed for 2020 for the dividend proposals will be set by the E. P. M. P. P female aboard at the AGM on March 18, and is a dividend per share of 1100 20 Danish kroner.

This is equivalent to a 30% payout of our underlying net results in line with our dividend policy and higher than last year's payout.

Vincent Clerc (A.P. Moller: All in all, a good performance in logistics and services with an improved EBIT margin to 4.1, some one-offs driven by strong margins and driven also by strong margins in Managed by Maersk and Transported by Maersk. In Ocean, we experienced robust profitability despite rates coming off the peak set in Q3. Rates surprised on the upside as they eroded more slowly than expected during Q4. We ran a tight and efficient ship with strong asset utilization at 95%, and much of our efforts in Ocean in Q4 went into preparing for the new Gemini network. Finally, Terminals continued its streak of excellent performance, as reflected by a significant increase in revenue per move while keeping cost per move at bay and driving strong volumes throughput throughout the portfolio of gateways.

This is equivalent to a 30% payout of our underlying net results in line with our dividend policy and higher than last year's payout.

On the back of a better than expected 2020 for the strong balance sheet bolstered by further cash generation in 2024, and an improved outlook for 2025. We are also in a position to reinstate the share buyback program, which we suspended this time last year the.

On the back of our better than expected 2020 for the strong balance sheet bolstered by further cash generation in 2024, and an improved outlook for 2025. We are also in a position to reinstate the share buyback program, which we suspended this time last year.

The program will start effective tomorrow with the size of approximately $2 billion and a duration of 12 months.

CFO Patrick Jani: The program will start effective tomorrow, with a size of approximately $2 billion and a duration of 12 months. This implies that the total cash return to shareholder will be approximately $4.4 billion, of which $2.4 billion is the proposed 2024 dividend subject to AGM approval, and the remaining $2 billion, the reinstated share buyback. This follows the TSR of 8% in 2024 that we achieved for shareholders through the cash dividend for 2023, the Switzer dividend in kind, and the share buyback until the suspension last February. Looking further forward, we are confident to continue the share buyback in the years following 2025, given the balance sheet strength that we have today.

This implies that the total cash return to shareholder will be approximately $4 4 billion of which $2 $4 billion is the proposed 'twenty 'twenty four dividends subject to AGM approval and the remaining $2 billion the reinstated share buyback.

The program will start effective tomorrow with a size of approximately $2 billion and the duration of 12 months.

This implies that the total cash return to shareholder will be approximately $4 $4 billion of which $2 $4 billion is the proposed 'twenty 'twenty four dividends subject to AGM approval and the remaining $2 billion to reinstate it share buyback.

This follows the T. S. R of 8% in 2024 that we achieved for shareholders through the cash dividend for 2023, the spitzer dividend in kind and the share buyback until the suspension last February.

Vincent Clerc (A.P. Moller: All of these factors combine to make this quarter the strongest ever fourth quarter and a year which in all quarters exceeded EBIT of $300 million. The segment achieved a last twelve-month ROIC of 13.5%, well above our midterm targets of 9%. Before I dive into the scorecard, let me take the opportunity to announce the date for our next Capital Markets Day. We are pleased to announce that the Capital Markets Day will be held in London on 13 November, later this year. We hope to see many of our analysts and investors at the event at which we intend to share our progress towards becoming an end-to-end logistics provider, and further details will follow. Together with the executive leadership team at Maersk, I look forward to seeing you there. Now, on the scorecard for Q4.

This follows the T. S. R of 8% in 2024 that we achieved for shareholders through the cash dividend for 2023, the spitzer dividend in kind and the share buyback until the suspension last February.

Looking further forward, we are confident to continue the share buyback in the years. Following 2025, given the balance sheet strength that we have today.

As mentioned at the start this quarter marked a strong finish to a financial year with strong performance and operational progress notwithstanding a very dynamic external environment.

CFO Patrick Jani: As mentioned at the start, this quarter marked a strong finish to a financial year with strong performance and operational progress notwithstanding a very dynamic external environment. In logistics and services, we saw good revenue growth driven by air and LCL in our transported by Maersk service model, by warehousing and fulfilled by Maersk. We also continue to progress in improving the underlying performance in middle mile as well as last mile, who continue to track positively in the fourth quarter, and would expect to see further improvement in the coming quarters. All in all, a good performance in logistics and services, with an improved EBIT margin to 4.1, some one-offs, driven also by strong margins, in managed by Maersk and transported by Maersk.

As mentioned at the start this quarter marked a strong finish to a financial year with strong performance and operational progress notwithstanding a very dynamic external environment.

In logistics and services, we saw good revenue growth driven by air and LCL in all transported by Maersk service model by warehousing and fulfilled by Maersk.

In logistics and services, we saw good revenue growth driven by air and LCL in all transported by Maersk service model by warehousing and fulfilled by Maersk. We also continued to progress in improving the underlying performance in middle mile as well as last mile who continue to track positively in the fourth quarter.

We also continued to progress in improving the underlying performance in middle mile as well as last mile who continue to track positively in the fourth quarter I would expect to see further improvement in the coming quarters.

All in all a good performance in logistics.

Vincent Clerc (A.P. Moller: With the throw-off of the non-normalization that we saw in 2023 now falling out of the last twelve months period, we see a much brighter scorecard highlighting our good delivery on most of our strategic targets. Where we still fall short is within Logistics & Services. The job for us there is clear and simple. We must achieve profitable growth towards the 10% organic revenue growth and 6% margin targets that we have set for ourselves. We have made good strides in improving the quality of our Logistics & Services business over the past twelve months, but we are not done yet, and our mission is to deliver in Logistics & Services in the year ahead. That's actually a good segue into the next slide. As we move into 2025, we have set these strategic priorities around our main business segment.

And services with an improved EBIT margin to 4.1 someone offs driven by strong margins in.

I would expect to see further improvement in the coming quarters.

All in all a good performance in logistics and.

And it's driven also by strong margins in managed by Maersk and transported by Maersk.

And services with an improved EBIT margin to 4.1 someone offs driven by strong margins.

In Ocean, we experienced robust profitability despite rates coming off the peak set in the third quarter.

And it's driven also by strong margins in managed by Maersk and transported by Maersk.

CFO Patrick Jani: In ocean, we experience robust profitability, despite rates coming off the peak set in the third quarter. Rates surprised on the upside as they eroded more slowly than expected during the fourth quarter. We ran a tight and efficient ship with strong asset utilization at 95% and much of our efforts in ocean in the last quarter went into preparing for the new Gemini network. Finally, terminals continued its streak of excellent performance as reflected by a significant increase in revenue per move while keeping cost per move at bay and driving strong volumes throughput throughout the portfolio of gateways.

Rates surprised on the upside as they eroded more slowly than expected during the fourth quarter.

In Ocean, we experienced robust profitability despite rates coming off the peak set in the third quarter.

We ran a tight and efficient ship with strong asset utilization at 95% and much of our efforts in ocean in the last quarter went into preparing for the new Gemini network.

Rates surprised on the upside as they eroded more slowly than expected during the fourth quarter.

We ran a tight and efficient ship with strong asset utilization at 95% and much of our efforts in ocean in the last quarter went into preparing for the new Gemini network.

Finally terminals continued its streak of excellent performance as reflected by a significant increase in revenue per move while keeping cost per move at bay and driving strong volumes throughput throughout the portfolio of gateways.

All of these factors combined with combined to make this quarter, the strongest ever fourth quarter in a year, which which in all quarter exceeded EBIT of $300 million.

Vincent Clerc (A.P. Moller: In Logistics & Services, we maintain our bearings towards profitable growth, namely achieving 6% EBIT margin and continuing the growth trajectory we have set for ourselves in 2024. A main element to achieve this will be to continue the recovery momentum we have achieved in Fulfilled by Maersk, specifically in Middle Mile and warehousing. Finally, across the board in Logistics & Services, we maintain our relentless focus on productivity and cost to become a best-in-class logistics operator. In Ocean, our number one priority is to successfully phase in Gemini and reach 90% schedule reliability, which will both deliver better service to our customers and a more agile and cost-effective way to operate our fleet. That will allow us to grow our volumes and reduce our cost per unit with the same equipment.

CFO Patrick Jani: All of these factors combine to make this quarter the strongest ever fourth quarter and a year which in all quarters exceeded EBIT of $300 million. The segment achieved a last 12-month ROIC of 13.5%, well above our mid-term targets of 9%.

All of these factors combined with combined to make this quarter, the strongest ever fourth quarter in a year, which which in all quarter exceeded EBIT of $300 million.

This segment achieved a last 12 month ROIC of 13, 5% well above our mid term targets of 9%.

Before I dive into the scorecard, let me take the opportunity to announce the date for our next capital markets day. We are pleased to announce that the capital markets day will be held in London on November 13th later this year.

This segment achieved a last 12 month ROIC of 13.5% well above our mid term targets of 9%.

CFO Patrick Jani: Before I dive into the scorecard, let me take the opportunity to announce the date for our next Capital Markets Day. We are pleased to announce that the Capital Markets Day will be held in London on November 13th, later this year. We hope to see many of our analysts and investors at the event, at which we intend to share our progress towards becoming an end-to-end logistics provider, and further details will follow. Together with the executive leadership team at Maersk, I look forward to seeing you there. Now on the scorecard for the fourth quarter. With the throw of the normalization that we saw in 2023 now falling out of the last 12-month period, we see a much brighter scorecard highlighting our good delivery and on most of our strategic targets.

We hope to see many of our analysts and investors at the event at which we intend to share our progress towards becoming an end to end logistics provider and further details will follow.

We hope to see many of our analysts and investors at the event at which we intend to share our progress towards becoming an end to end logistics provider and further details will follow together.

Together with the executive leadership team at Maersk I look forward to seeing you there.

Now on the scorecard for the fourth quarter.

Together with the executive leadership team at Maersk I look forward to seeing you there.

Vincent Clerc (A.P. Moller: Finally, terminals will provide the world-class hub terminals in which we have invested $3 billion to increase capacity by about 30 percent. Capabilities such as IoT technology and digital twin modeling, all to facilitate effective and second-to-none transshipment. On our gateway specifically, we seek to grow in line with the market on our existing portfolio while expanding the portfolio opportunistically through securing of new concessions. You've heard me mention Gemini numerous times now, and that is perhaps a testament to how excited we all are at Maersk about our plan to transform the ocean industry in the quarters to come. Last Saturday, we hit the launch button on the new network after switching our bookings over from the existing network to the new Gemini network from December 2024.

With the throat of the normalization that we saw in 2023 and now falling out of the last 12 months period, we see a much brighter scorecard, highlighting our good delivery and on most of our strategic targets.

Now on the scorecard for the fourth quarter.

But where we still fall short is within logistics and services the job for US there is clear and simple we must achieve profitable growth towards the 10% organic revenue growth and 6% margin targets that we have set for ourselves.

CFO Patrick Jani: But where we still fall short is within logistics and services. The job for us there is clear and simple. We must achieve profitable growth towards the 10% organic revenue growth and 6% margin targets that we have set for ourselves. We have made good strides in improving the quality of our logistics and services business over the past 12 months, but we are not done yet. And our mission is to deliver in logistics and services in the year ahead. And that's actually a good segue into the next slide. As we move into 2025, we have set these strategic priorities around our main business segments.

We have made good strides in improving the quality of our logistics and services business over the past 12 months, but we haven't we are not done yet and our mission is to deliver in logistics and services in the year ahead.

And that's actually a good segue into the next slide.

As we move into 2025, we have set these strategic priorities around our main business segment.

And that's actually a good segue into the next slide.

Vincent Clerc (A.P. Moller: Customer feedback and retention have been very positive, with bookings into the new network continuing as planned. As we phase in the new network and phase out of the old, there will be a period of 12 to 15 weeks, or about one calendar quarter, representing a typical East-West cycle during which the two networks will run in parallel. June will therefore be our first month in which Gemini will run on its own and alone and therefore be fully phased in. Leaning on the operational strength of our hubs, we can design a network with more density, higher asset turn, while we maintain the same geographical coverage and competitive transit times for our customers. Those were guardrail principles we had set for ourselves during the design exercise. Gemini represents a more efficient network with benefit for customers and for us.

In logistics and services, we maintained our bearing stores profitable growth, namely achieving 6% EBIT margin and continuing the growth trajectory, we have set for ourselves in 2024.

As we move into 2025, we have set these strategic priorities around our main business segment.

CFO Patrick Jani: In logistics and services, we maintain our bearings towards profitable growth, namely achieving 6% EBIT margin and continuing the growth trajectory we have set for ourselves in 2024. A main element to achieve this will be to continue the recovery momentum we have achieved in Fulfilled by Maersk, specifically in middle mile and warehousing. And finally, across the board in Logistics and Services, we maintain our relentless focus on productivity and cost to become a best-in-class logistics operator. In Ocean, our number one priority is to successfully phase in Gemini and reach 90% scheduled reliability, which will both deliver better service to our customers and a more agile and cost-effective way to operate our fleet.

In logistics and services, we maintained our bearings stores profitable growth, namely achieving 6% EBIT margin and continuing to growth trajectory, we have set for ourselves in 2024.

A main element to achieve this will be to continue the recovery momentum, we have achieved and fulfilled by maersk specifically in middle mile and warehousing.

Our main elements to achieve this will be to continue the recovery momentum, we have achieved and fulfilled by maersk specifically in middle mile and warehousing.

And finally across the board in logistics and services, we maintained our relentless focus on productivity and cost to become a best in class logistics operator.

In Ocean, our number one priority is to successfully phase in Gemini and reached 90% scheduled reliability, which will both deliver better service to our customers and a more agile and cost effective way to operate our fleet.

In Ocean, our number one priority is to successfully faced in Gemini and reached 90% schedule reliability, which will both deliver better service to our customers and a more agile and cost effective way to operate our fleet.

That will allow us to grow our volumes and reduce our cost per unit with the same equipment.

Finally terminals will provide the world class hub terminals.

CFO Patrick Jani: that will allow us to grow our volumes and reduce our cost per unit with the same equipment. Finally, terminals will provide the world-class hub terminals. A.P. Moller and capabilities such as IoT technology and digital twin modeling, all to facilitate effective and second-to-none transshipment. On our gateway specifically, we seek to grow in line with the market on our existing portfolio while expanding the portfolio opportunistically through securing of new concessions. You've heard me mention Gemini numerous times now, and that is perhaps a testament to how excited we all are at Maersk about our plan to transform the ocean industry in the quarters to come.

That will allow us to grow our volumes and reduce our cost per unit with the same equipment.

Vincent Clerc (A.P. Moller: The goal of higher schedule reliability for more than 90% on-time arrival, such that the ocean cargo is more likely to arrive on time and onwards to the customer supply chain than anywhere else. For us, it represents better asset utilization, leading to decreased cost of approximately half a billion dollars, mostly from lower bunker consumptions. It's horses for courses. Smaller vessels on shuttle services calling a smaller number of ports, feeding into hubs, and the larger vessels on the main liners serving and calling mostly the very big ports and hubs, many of which operated by APMT. This main line of service will therefore have fewer stops than the shorter loops at the extremities of the old loops and will be serviced by shuttle services.

Hub terminals in which we have invested $3 billion to increase capacity by about 30%.

Finally terminals will provide the world class hub terminals.

And capabilities, such as Iot technology, and digital twin modeling all to facilitate effective and second to non trend shipment.

Hub terminals in which we have invested $3 billion to increase capacity by about 30%.

And capabilities, such as Iot technology, and digital twin modeling all to facilitate effective and second to non trend shipment.

On our gateway, specifically, we seek to grow in line with the market on our existing portfolio, while expanding the portfolio opportunistically through securing of new concessions.

You've heard me mention Gemini numerous time now and that is perhaps a testament to how excited we all are at Maersk about our plan to transform the ocean industry in the quarters to come.

Last Saturday, we hit the lounge button on the new network after switching our bookings over from the existing network to the new Gemini network from December.

CFO Patrick Jani: Last Saturday, we hit the launch button on the new network after switching our bookings over from the existing network to the new Gemini network from December 2024. Customer feedback and retention have been very positive, with bookings into the new network continuing as planned. As we phase in the new network and phase out of the old, there will be a period of 12 to 15 weeks. or about one calendar quarter, representing a typical east-west cycle during which the two networks will run in parallel. June will therefore be our first month in which Gemini will run on its own and alone and therefore be fully phased in.

Last Saturday, we hit the lounge button on the new network after switching our bookings over from the existing network to the new Gemini network from December.

Four from December 2024.

Vincent Clerc (A.P. Moller: On the right-hand side, on the right-hand side of the slide, you have an example of how cargo from Xingang to Bremerhaven will flow in the new network. With the old network, the point-to-point route would have had seven stops. With Gemini, we can simplify this to only three stops across the entire route. The fewer the stops, the lower the risk that cargo will experience and accumulate port side delays. Furthermore, with six out of the eight hub terminals that we rely on operated by APMT, there will be a better real-time planning, prioritization, and turnaround of vessels so as to neutralize any delay accumulated earlier in the journey and to prevent delays from accumulating during the transshipment. Overall, Gemini represents a rare phenomenon of quality, namely better schedule reliability for the customer that is also more efficient for us to service.

Customer feedback and retention have been very positive with bookings into the net new network continuing as planned.

Four from December 2024.

As we phase in the new network and phase out of the old there will be a period of 12 to 15 weeks.

Customer feedback and retention have been very positive with bookings into the net new network continuing as planned.

Or about one calendar quarter, representing a typical east west cycle during which the tune at work will run in parallel.

As we phase in the new network and phase out of the old there will be a period of 12 to 15 weeks.

June will therefore be our first month in which Gemini will run on its own and alone and therefore be fully phased in.

Or about one calendar quarter, representing a typical east west cycle during which the tune at work will run in parallel.

June will therefore be our first month in which Gemini will run on its own and alone and therefore be fully phased in.

Leaning on the operational strength of our hubs, we can design in network with more density higher asset turn while we maintained the same geographical coverage and competitive transit times for our customers.

CFO Patrick Jani: leaning on the operational strength of our hubs. We can design a network with more density, higher asset turn, while we maintain the same geographical coverage and competitive transit times for our customers. Those were guardrails principles we had set for ourselves during the design exercise. Gemini represents a more efficient network with benefit for customers and for us. The goal of higher scheduled reliability for more than 90% on-time arrival, such that the ocean cargo is more likely to arrive on time and onwards to the customer supply chain than anywhere else. For us, it represents better asset utilization, leading to decreased costs of approximately half a billion dollars, mostly from lower bunker consumption.

Leaning on the operational strength of our hubs, we can design a network with more density higher asset turn while we maintained the same geographical coverage and competitive transit times for our customers.

Those were guardrails principles, we had set for ourselves during the design exercise.

Jim and I represents a more efficient network with benefit for customers and for us.

Vincent Clerc (A.P. Moller: It's a win for customers and a win for us. Throughout the course of 2024, we spoke much about the significant oversupply challenge and the high uncertainty surrounding the duration and degree of the Red Sea disruption. Fundamentally, the supply-demand imbalance that we could have seen in 2024 has likely been pushed back to 2025. However, we think that the outlook from where we stand today is much more nuanced and benign than what we had in front of us just a year ago before the outbreak of the Red Sea disruption. If we first look at the supply side, the new deliveries that will come online throughout 2025, representing a capacity increase of about 2 million TEUs.

Those were guardrails principles, we had set for ourselves during the design exercise.

The goal of higher scheduled reliability for more than 90% on time arrival, such as such that the ocean cargo is more likely to arrive on time and onwards to the customer supply chain than anywhere else.

Gemini represents a more efficient network with benefit for customers and for us.

For us it represents better asset utilization, leading to decreased cost of approximately half a billion dollars, mostly from lower bunker consumptions.

It's horse for course.

Smaller vessels on shuttle services, calling a smaller number of ports feeding into hubs and the larger vessels on the main liners, serving and calling mostly the very big ports and hubs many of which operated by a P. M T.

CFO Patrick Jani: It's horse for course. Smaller vessels on shuttle services calling a smaller number of ports feeding into hubs and the larger vessels on the mainliners serving and calling mostly the very big ports and hubs, many of which operated by A.P.M.T. This mainliner service will therefore have fewer stops than the shorter loops at the extremities of the old loops and will be serviced by shuttle service. On the right-hand side of the slide, you have an example of how cargo from Shingang to Bremerhaven will flow in the new network. With the old network, the point-to-point route would have had 7 stops.

It's horse for course.

These mainline of service will therefore have fewer stops than the shorter loops at the extremities of the old loops and will be service that will be serviced by a shuttle services.

Vincent Clerc (A.P. Moller: On top of this will come a potential reopening of the Red Sea, which would remove the supply chain disruptions that we and our customers have experienced over the past year, but would also cause a capacity release of anywhere between 1.5 and 2 million TEUs. All representing about 5 to 6% of the global fleet, as vessels need to sail shorter routes through the Suez Canal. On the other hand, the increase in supply will be partially offset by other supply side drivers, such as scrapping of vessels that are near or have passed their end of life and slow steaming out of the environmental and financial consideration. Further, in the short term, potential congestion could ensue from a potential reopening of the Red Sea and from port congestions from vessels bunching and arriving simultaneously at destination.

These mainline of service will therefore have fewer stops than the shorter loops at the extremities of the old loops and will be serviced that will be serviced by shuttle services.

On the ran hand side on the right hand side of the slide you have an example of how cargo from Xinjiang to Bremerhaven will flow in the new network.

On the ran hand side on the right hand side of the slide you have an example of how cargo from Xinjiang to Braemar haven't will flow in the new network.

With the old network the point to point route would have had seven stops with Gemini we can simplify this to only three stops across the entire route to few other stops the lower the risk that cargo will experience and accumulate portside delays.

CFO Patrick Jani: With Gemini, we can simplify this to only 3 stops across the entire route. The fewer the stops, the lower the risk that cargo will experience and accumulate portside delays. Furthermore, with six out of the eight hubs terminals that we rely on, operated by A.P.M.T., there will be a better real-time planning, prioritization, and turnaround of vessels so as to neutralize any delay accumulated earlier in the journey and to prevent delays from accumulating during the transhipment. Overall, Gemini represents a rare phenomenon of quality, namely better scheduled reliability for the customer, that is also more efficient for us to service.

Furthermore, with six out of the hate hubs terminals that we rely on operated by a P. M. T. There will be a better real time planning prioritization and turnaround of vessels so as to neutralize any delay accumulated earlier in the journey and to prevent delays from accumulating during the transhipment.

Overall Gemini represents a rare phenomenon of quantity, namely better schedule reliability for the customer that is also more efficient for us to service, it's a win for customers and a win for us.

Vincent Clerc (A.P. Moller: The one via the Cape of Good Hope and another going the faster route through the Suez. Another change compared to last year's assessment is that we can count on improved demand. We are looking into continued strong market demand in 2025 on the back of a strong 2024, which can further net off an increase in supply of about 1 to 1.5 million TEUs. All these factors point towards a supply-demand imbalance that is likely not as bad as what we faced, 12 months ago. What does this mean for the guidance? Well, first, we expect the container volume growth, as I mentioned, to remain robust at about 4% for Maersk, and for Maersk to grow in line with the market.

Overall Gemini represents a rare phenomenon of quantity, namely better schedule reliability for the customer that is also more efficient for us to service, it's a win for customers and a win for us.

Throughout the course of 'twenty 'twenty four we spoke mud we spoke much about a significant oversupply challenge and the high uncertainty surrounding the duration and degree of the Red Sea disruption.

CFO Patrick Jani: It's a win for customers and a win for us.

CFO Patrick Jani: Throughout the course of 2024, we spoke much about the significant oversupply challenge and the high uncertainty surrounding the duration and degree of the Red Sea disruption. Fundamentally, the supply-demand imbalance that we could have seen in 2024 has likely been pushed back to 2025. However, we think that the outlook from where we stand today is much more nuanced and benign than what we had in front of us just a year ago before the outbreak of the Red Sea Disruption. If we first look at the supply side, the new deliveries that will come online throughout 2025 representing a capacity increase of about 2 million TEUs.

Throughout the course of 2024, we spoke mud we spoke much about a significant oversupply challenge and the high uncertainty surrounding the duration and degree of the Red Sea disruption.

Fundamentally the supply demand imbalance that we could have seen in 2024 has likely been pushed back to 2025.

However, we think that the outlook from where we stand today is much more nuanced and benign than what we had in front of US just a year ago before the outbreak of the Red Sea disruption.

However, we think that the outlook from where we stand today is much more nuanced and benign than what we had in front of US just a year ago before the outbreak of the RNC disruption.

If we first look at the supply side, the new deliveries that will come online throughout 2025, representing a capacity increase of about 2 million teus.

Vincent Clerc (A.P. Moller: As far as our broader financial outlook is concerned, we present to you a range with the timing that it depends on the timing of the potential opening of the Red Sea, as a variable. The low end of the range assumes a mid-year reopening in the Red Sea, while the high end represents a year-end opening, implying no financial impact from the reopening in 2025. Considering these factors and assumption, we expect the full year 2025 underlying EBITDA of $6 to 9 billion, an underlying EBIT of breakeven to $3 billion, and a free cash flow of negative $3 billion or higher. On CapEx, we maintain our CapEx guidance for 2024 to 2025 of ten to eleven billion dollars, and confirm the same level for 2025 to 2026.

If we first look at the supply side, the new deliveries that will come online throughout 2025, representing a capacity increase of about 2 million teus.

On top of this will come a potential reopening of the Red Sea, which would remove the.

The supply chain disruptions that we are that we and our customers have experienced over the past year, but would also cause a capacity release of anywhere between one five and 2 million Teus.

CFO Patrick Jani: On top of this will come a potential reopening of the Red Sea, which would remove the supply chain disruptions that we and our customers have experienced over the past year, but would also cause a capacity release of anywhere between 1.5 and 2 million TEUs. all representing about 5-6% of the global fleet. as vessels need to sail shorter routes through the Suez Canal. On the other hand, the increase in supply will be partially offset by other supply-side drivers such as scrapping of vessels that are near or have passed their end of life and slow steaming out of the environmental and financial consideration.

On top of this will come a potential reopening of the Red Sea, which would remove.

The supply chain disruptions that we are that we and our customers have experienced over the past year, but would also cause a capacity release of anywhere between one five and 2 million Teus.

All representing about 5% to 6% of the global fleet.

As vessels need to sell shorter routes through the Suez Canal.

All representing about 5% to 6% of the global fleet.

On the other hand, the increase in supply will be partially offset by other supply side drivers such as scrapping of vessels that are near or have passed their end of life and slow steaming out of the environmental and financial consideration.

As vessels need to sell shorter routes through the Suez Canal.

Further in the short term potential congestion could end schuh ensue as a from a potential reopening of the red Sea and from port congestion from vessels bunching in arriving simultaneously a destination. The one via the Cape of good hope and another going the faster route through the trends Suez.

Vincent Clerc (A.P. Moller: I would now like to pass over to Patrick for a closer look at the financials.

CFO Patrick Jani: Further, in the short term, potential congestion could ensue from a potential reopening of the Red Sea and from port congestions from vessels bunching and arriving simultaneously at destination, the one via the Cape of Good Hope and another going the faster route through the trans-Suez. Another change compared to last year's assessment is that we can count on improved demand. We are looking into continued strong market demand in 2025, on the back of a strong 2024, which can further net off an increase in supply of about 1 to 1.5 million TEUs. All these factors point towards a supply-demand imbalance that is likely not as bad as what we faced 12 months ago.

Patrick Jany (A.P. Moller: Thank you, Vincent, and thanks to everyone on the call for joining us today. With the Q4 driven by good results in all our segments, we had a strong finish to our fiscal year 2024. A year defined in large parts by the ongoing uncertainty about the Red Sea disruption, and strong volumes. When we announced our initial guidance back in February of last year, we expected a loss for the year driven by a significant impact of the oversupply situation in ocean, which we saw materializing in Q4 a year ago, together with the limited impact of the Red Sea disruption. As it became increasingly evident that the Red Sea situation became entrenched and that demand picked up more than we anticipated, we were able to raise our guidance on multiple occasions reflecting the improving outlook for the year.

Another change compared to last year's assessment is that we can count on improved demand.

We are looking into continued strong market demand in 2025 on the back of a strong 'twenty 'twenty four which can further net of an increase in supply of about one to one and a half million teus.

Another change compared to last year's assessment is that we can count on improved demand.

We are looking into continued strong market demand in 2025 on the back of a strong 'twenty 'twenty four which can further net of an increase in supply of about one to one and a half million teus.

All these factors point towards a supply demand imbalance that is likely not as bad as what we faced 12.

12 months ago.

All these factors point towards a supply demand imbalance that is likely not as bad as what we faced.

So what does this mean for the guidance well first we expect to container volume growth as I mentioned to remain robust at about 4%.

12 months ago.

CFO Patrick Jani: So, what does this mean for the guidance? Well, first, we expect the container volume growth, as I mentioned, to remain robust at about 4%. for Maersk and for Maersk to grow in line with the market. As far as our broader financial outlook is concerned, we present to you a range with the timing of the potential opening of the Red Sea as a variable. The low end of the range assumes a mid-year reopening in the Red Sea, while the high end represents a year-end opening, implying no financial impact from the reopening in 2025. Considering these factors and assumptions, we expect the full year 2025 underlying EBITDA of $6 to $9 billion, an underlying EBIT of break-even to $3 billion, and a free cash flow of negative $3 billion or higher.

So what does this mean for the guidance well first we expect to container volume growth as I mentioned to remain robust at about 4%.

For Maersk and farmers to grow in line with the market.

Patrick Jany (A.P. Moller: In that context, our full year numbers with an EBIT of $6.5 billion, a free cash flow of $5.1 billion, and a ROIC of 12.3% reflect both a stronger environment and a great operational performance, and cost control of our businesses. Looking closer at Q1, the improved year-on-year performance across all segments resulted in significantly higher profitability compared to Q4 2023. The business delivered an EBITDA of $3.6 billion and an EBIT of $2.1 billion compared to an EBITDA of $839 million a year ago and an EBIT loss of $537 million.

As far as our broader financial outlook is concerned we present to you arrange with the timing of the protect that it depends on the timing of the potential opening of the Red Sea as a variable.

For Maersk and for Maersk to grow in line with the market.

As far as our broader financial outlook is concerned we present to you a range with the timing of the protect that it depends on the timing of the potential opening of the Red Sea as a variable.

The low end of the range assumes a mid year reopening in the Red Sea, while the high end represents a year end opening implying no financial impact from the reopening in 2025.

Considering these factors and assumptions, we expect the full year 2025 underlying EBITDA of $6 billion to $9 billion.

And underlying EBIT of breakeven to $3 billion, and our free cash flow of negative $3 billion or higher.

On Capex, we maintain our capex guidance for 'twenty four 'twenty five of 11 of $10 billion to $11 billion and confirm the same level for 'twenty five 'twenty six.

And underlying EBIT of breakeven to $3 billion, and our free cash flow of negative $3 billion or higher.

Patrick Jany (A.P. Moller: Consequently, net profit after tax increased $2.1 billion and free cash flow increased to $2.2 billion for the quarter, supported by favorable working capital development, a stark contrast to the free cash flow loss in Q4 2023. Given the Q4 results, our total cash increased to $24 billion with a net cash position of $7.4 billion, up both sequentially and year-on-year. As mentioned earlier by Vincent, our strong balance sheet allows us to relaunch the share buyback program. Looking past 2025, we are confident to be in a position to continue to return cash to shareholders while continuing to invest in the growth of our business despite quite volatile times ahead.

CFO Patrick Jani: On CAPEX, we maintain our CAPEX guidance for $24 to $25 of $10 to $11 billion and confirm the same level for $25 to $26.

On Capex, we maintain our capex guidance for 'twenty four 'twenty five of 11 of $10 billion to $11 billion and confirm the same level for 'twenty five 'twenty six.

Patrick: I would now like to pass over to Patrick for a closer look at the financials.

Patrick: Thank you Vincent and thanks to everyone on the call for joining us today.

CFO Patrick Jani: I would now like to pass over to Patrick for a closer look at the financials.

Patrick: I would now like to pass over to Patrick for a closer look at the financials.

With the fourth quarter driven by good results in all our segments, we had a strong finish to our fiscal year 2020 for the year defined a large france by the ongoing uncertainty about the red sea disruption and strong volumes.

CFO Patrick Jani: Thank you, Vincent, and thanks to everyone on the call for joining us today. With a fourth quarter driven by good results in all our segments, we had a strong finish to our fiscal year 2024, a year defined in large parts by the ongoing uncertainty about the Red Sea disruption, and strong volume. When we announced our initial guidance back in February of last year, we expected a loss for the year driven by a significant impact of the oversupply situation in ocean, which we saw materializing in Q4 a year ago, together with the limited impact of the Red Sea Disruption.

Patrick: Thank you Vincent and thanks to everyone on the call for joining us today.

Patrick: With the fourth quarter driven by good results in all our segments, we had a strong finish to our fiscal year 2020 for the year defining large France by the ongoing uncertainty about the red sea disruption and strong volumes.

Patrick: When we announced our initial guidance back in February of last year, we expected a loss for the year driven by a significant impact of the oversupply situation in ocean, which we saw materializing. The Q4, a year ago together with the limited impact of the Ritchie disruption.

Patrick Jany (A.P. Moller: When considering both the significant dividend and the announced share buyback, we will be returning $4.4 billion to shareholders, equivalent to 18% of the market capitalization. Let's take a closer look at our cash generation in Q4 on the next slide. Cash flow from operations was $4.4 billion, a significant increase from $166 million in Q4 last year, driven primarily by the increased business performance and by the positive impact of $837 million from net working capital. The improvement in working capital came mainly from better collection and a favorable currency impact. All in all, cash conversion for the quarter increased significantly to 123%, representing an increase both sequentially and year-on-year.

Patrick: As it became increasingly evident that the red sea situation became entrenched in their demand picked up more than we anticipated we were able to raise our guidance on multiple locations, reflecting the improving outlook for the year.

CFO Patrick Jani: As it became increasingly evident that the Red Sea situation became entrenched and that demand picked up more than we anticipated, we were able to raise our guidance on multiple occasions reflecting the improving outlook for the year. In that context, our Fourier numbers with an EBIT of $6.5 billion, a free cash flow of $5.1 billion and a ROIC of 12.3% reflect both a stronger environment and a great operational performance and cost control of our business.

Patrick: In that context, our full year numbers with inhibitor of $6 $5 billion of free cash flow of $5 1 billion and a ROIC of 12.3% reflect both a strong environment.

Patrick: In that context, our full year numbers with inhibitor of $6 $5 billion of.

Patrick: <unk> operational performance and cost control of our businesses.

Patrick: Free cash flows of $5 1 billion and a ROIC of 12.3% reflect both a stronger environment and a great operational performance and cost control of our businesses.

Patrick: Looking closer at the first quarter.

Patrick: The improved year on year performance across all segments resulted in significantly higher profitability compared to the fourth quarter of 2023, the business delivered an EBITDA of $3 $6 billion in inhibitor of $2.1 billion compared to an EBITDA of $839 million a year ago.

CFO Patrick Jani: looking closer at the first quarter. The improved year-on-year performance across all segments resulted in significantly higher profitability compared to the fourth quarter of 2023. The business delivered an EBITDA of $3.6 billion and an EBITDA of $2.1 billion compared to an EBITDA of $839 million a year ago and an EBITDA loss of $537 million. Consequently, net profit after tax increased to $2.1 billion and free cash flow increased to $2.2 billion for the quarter, supported by favorable working capital development, a stark contrast to the free cash flow loss in the fourth quarter of 2023. Given the fourth quarter results, our total cash increased to $24 billion, with a net cash position of $7.4 billion, up both sequentially and year-on-year.

Patrick: Looking closer at the first quarter.

Patrick Jany (A.P. Moller: As we highlighted in last earnings call, we had higher CapEx in the Q4, with growth CapEx amounting to $1.7 billion. Of this, $1.2 billion relates to Ocean, with 60% going to installments of the vessels we ordered during the summer and the remaining 40% relating to our equipment enhancements. Overall, CapEx remained tightly managed and below the original yearly guidance. Of the $2.2 billion free cash flow in the quarter, most of the net proceeds were reinvested into short-term deposits. Now let's move on to our segments, starting with Ocean on slide 15. The Ocean business had another strong quarter with high freight rates supported by strong demand, resulting in a significantly better performance than the Q4 of 2023.

Patrick: And an EBIT loss of $537 million.

Patrick: Consequently, net profit after tax increased $2.1 billion and free cash flow increased to $2 $2 billion for the quarter supported by favorable working capital development. The Stark contrast to the free cash flow loss in the fourth quarter of 2023.

Patrick: Compared to an EBITDA of $839 million, a year ago, and an EBITDA loss of $537 million.

Patrick: Consequently, net profit after tax increased $2.1 billion and free cash flow increased to $2 $2 billion for the quarter supported by favorable working capital development.

Patrick: Given the fourth quarter results, our total cash increased to $24 billion with a net cash position of $7 $4 billion.

Patrick: Stark contrast to the free cash flow loss in the fourth quarter of 2023.

Patrick: Given the fourth quarter results, our total cash increased to $24 billion with a net cash position of $7 $4 billion.

Patrick: Both sequentially and year on year.

Patrick: As mentioned earlier by Vincent our strong balance sheet allows us to relaunch the share buyback program.

Patrick: Both sequentially and year on year.

Speaker Change: And looking past 2025, we are confident to be in a position to continue to return cash to shareholders, while continuing to invest in the growth of our business. Despite quite volatile times ahead.

CFO Patrick Jani: As mentioned earlier by Vincent, our strong balance sheet allows us to relaunch the share buyback program and looking past 2025, we are confident to be in a position to continue to return cash to shareholders while continuing to invest in the growth of our business despite quite volatile times ahead. when considering both the significant dividend and the announced share buyback, we will be returning $4.4 billion to shareholders, equivalent to 18% of the market capitalization.

Patrick Jany (A.P. Moller: Volumes increased 0.8% year-on-year, while sequentially decreasing 1.3% following the ordinary seasonal pattern where Q3 is usually stronger than Q4 in terms of volumes. While freight rates remained high compared to 2023, they have come down from the peak in Q3 as expected, but erosion was slower than expected with some pickup in rates throughout December, which supported business performance in Q4. Operationally, we were able to ensure further sequential improvements to schedule reliability while running close to full capacity and handling the ongoing impact of reroutings. Consequently, profitability increased, delivering an EBIT of $1.6 billion compared to a loss of $920 million last year, and equivalent to an EBIT margin of 16.2%.

Patrick: As mentioned earlier by Vincent our strong balance sheet allows us to re launch the share buyback program.

Patrick: And looking past 2025, we are confident to be in a position to continue to return cash to shareholders, while continuing to invest in the growth of our business. Despite quite volatile times ahead.

Speaker Change: When considering both the significant dividend, India announced share buyback will.

Speaker Change: We will be returning $4 4 billion to shareholders.

Patrick: When considering both the significant dividend, India announced share buyback we.

Speaker Change: Trivalent to 18% of the market capitalization.

Patrick: We will be returning $4 4 billion to shareholders.

Speaker Change: Let's take a closer look at our cash generation in the fourth quarter on the next slide.

Patrick: <unk> to 18% of the market capitalization.

Cash flow from operations was $4 $4 billion, a significant increase from $166 million in Q4 last year.

CFO Patrick Jani: Let's take a closer look at our cash generation in the fourth quarter on the next slide. Cash flow from operations was $4.4 billion, a significant increase from $166 million in Q4 last year, driven primarily by the increased business performance and by the positive impact of $837 million from net working capital. The improvement in working capital came mainly from better collection and a favorable currency impact. All in all, cash conversion for the quarter increased significantly to 123%, representing an increase both sequentially and year-on-year. As we highlighted in the last earnings call, we had higher capex in the fourth quarter, with growth capex amounting to $1.7 billion.

Patrick: Let's take a closer look at our cash generation in the fourth quarter on the next slide.

Patrick: Cash flow from operations was $4 $4 billion, a significant increase from $166 million in Q4 last year.

Speaker Change: Driven primarily by the increased business performance and by the positive impact of $837 million from net working capital the improvement in working capital.

Patrick: Driven primarily by the increased business performance and by the positive impact of $837 million from net working capital the improvement in working capital.

Speaker Change: Came mainly from better collection, and a favorable currency impact all in on cash conversion for the quarter increased significantly to 123% representing an increase both sequentially and year on year.

Patrick Jany (A.P. Moller: Moving on to the Ocean EBIT EBITDA bridge on slide 16. Here we can clearly see the large impact of higher freight rates compared to Q4 2023, while a reduced bunker price helped to compensate for the higher bunker consumption, which is given due to the rerouting around the Cape of Good Hope. Finally, there was a positive contribution from higher detention in the merchant revenue, as well as the mechanical impact of revenue recognition. Now let's look at our KPIs for Ocean on slide 17. As I've touched upon previously, freight rates were significantly up year-on-year, averaging $2,659 per FFE in the quarter, representing an increase of 38% compared to Q4 2023, but an 18% sequential decline as we moved beyond the freight peak.

Came mainly from better collection, and a favorable currency impact all in on cash conversion for the quarter increased significantly to 123% representing an increase both sequentially and year on year.

Speaker Change: As we highlighted in last earnings call, we had higher capex in the fourth quarter with growth Capex amounting to $1 $17 billion of this $1 2 billion relates to ocean with 60% going to installments of the vessels, we ordered during the summer and the remaining 40% relating to our equipments in hubs.

Patrick: As we highlighted in last earnings call, we had higher capex in the fourth quarter with growth Capex amounting to $1 $7 billion of this 1.2 billion relates to ocean with 60% going to installments of the vessels, we ordered during the summer and the remaining 40% relating to our equipments and hubs.

CFO Patrick Jani: Of this, $1.2 billion relates to ocean, with 60% going to installments of the vessels we ordered during the summer, and the remaining 40% relating to our equipment and hardware. Overall, CAPEX remained tightly managed and below the original yearly guide. of the $2.2 billion free cash flow in the quarter, most of the net proceeds were reinvested into short-term deposits.

Speaker Change: Overall, capex remain tightly managed and below the original yearly guidance.

Speaker Change: Of the $2.2 billion free cash flow in the quarter. Most of the net proceeds were reinvested into short term deposits.

Patrick: Overall, capex remained tightly managed and below the original yearly guidance.

Speaker Change: Now, let's move on to our segments, starting with Ocean on slide 15.

Patrick: Of the $2.2 billion free cash flow in the quarter most over the net proceeds were reinvested into short term deposits.

Speaker Change: The Ocean business had another strong quarter with high freight rates supported by strong demand, resulting in a significantly better performance in the fourth quarter of 2023.

CFO Patrick Jani: Now let's move on to our segment, starting with Ocean on slide 15. The ocean business had another strong quarter with high freight rates supported by strong demand, resulting in a significantly better performance than the fourth quarter of 2023. Volumes increase 0.8% year-on-year, while sequentially decreasing 1.3%, following the ordinary seasonal pattern, where the third quarter is usually stronger than the fourth in terms of volume. While freight rates remained high compared to 2023, they have come down from the peak in the third quarter as expected, but erosion was slower than expected, with some pick-up in rates throughout December, which supported business performance in Q4.

Patrick: Now, let's move on to our segments, starting with Ocean on slide 15.

Patrick Jany (A.P. Moller: We successfully kept operating costs, excluding bunker, flat year-on-year, offsetting inflation and all the additional costs relating to the reroutings. As in every quarter in 2024, unit cost at fixed bunker increased though year-on-year, given the higher bunker consumption due to the longer sailings. Our average operating fleet increased 6.4% year-on-year, mainly on additional chartered vessels. This reflects our approach of strategically injecting capacity to meet market demand and maintain the necessary agility in the network, which can be seen in light of our continued high vessel utilization. Volumes increased 0.8% in Q4, driven by strong demand in Asia, Europe, and Intra-Asia, among others, in marking a 3.6 volume increase for the full year.

Patrick: The Ocean business had another strong quarter with high freight rates supported by strong demand, resulting in a significantly better performance during the fourth quarter of 2023.

Speaker Change: Volumes increased 8% year on year, whereas sequentially decreasing one 3% following the ordinary seasonal pattern, where the third quarter is usually stronger than the fourth in terms of volumes.

Patrick: Volumes increased 8% year on year, whereas sequentially decreasing one 3% following the ordinary seasonal pattern, where the third quarter is usually stronger than the fourth in terms of volumes.

Speaker Change: When freight rates remained high compared to 2023.

Speaker Change: <unk> have come down from the peak in the third quarter as expected, but erosion was slower than expected with some pick up in rates throughout December which supported business performance in Q4.

Patrick: When freight rates remained high compared to 2023.

Patrick: We have come down from the peak in the third quarter as expected, but erosion was slower than expected with some pick up in rates throughout December which supported business performance in Q4.

Speaker Change: Operationally, we were able to ensure further sequential improvements to schedule reliability.

Speaker Change: While running close to full capacity and handling the ongoing impact of rerouting.

CFO Patrick Jani: Operationally, we were able to ensure further sequential improvements to schedule reliability. while running close to full capacity and handling the ongoing impact of reruns. Consequently, profitability increased, delivering an EBIT of $1.6 billion compared to a loss of $920 million last year, and equivalent to an EBIT margin of 16.2%. Moving on to the Ocean-Ebita bridge on slide 16, here we can clearly see the large impact of higher freight rates compared to the fourth quarter of 2023, while a reduced bunker price helped to compensate for the higher bunker consumption which is given due to the rerouting around the Cape of Good Hope.

Operationally, we were able to ensure further sequential improvements just schedule reliability.

Speaker Change: Consequently profitability increased the delivering an EBIT of $1 $6 billion compared to a loss of $920 million last year.

Patrick: While running close to full capacity and handling the ongoing impact of rerouting.

Patrick Jany (A.P. Moller: While our 2024 volume growth was below our estimated global container market growth, it's important to note that our vessels have been sailing at full capacity throughout the year, with vessel utilization at an excellent 96% for the full year. Now, let us turn to Logistics & Services on slide 18. Financial performance in Q4 highlights the improvements made to the business since the trough reached at Q1 of the year.

Patrick: Consequently profitability increased the delivering an EBIT of one $6 billion compared to a loss of $920 million last year.

Speaker Change: An equivalent to an EBIT margin of 16 two.

Speaker Change: 2%.

Speaker Change: Moving on to the Ocean EBITDA bridge on Slide 16 here, we can clearly see the large impact of higher freight rates compared to the fourth quarter of 2023, while it reduce bunker price helped to compensate for the higher bunker consumption wishes given due to the rerouting around the Cape of good hope.

Patrick: An equivalent to an EBIT margin of 16, 2%.

Patrick: Moving on to the Ocean EBITDA bridge on Slide 16 here, we can clearly see the large impact of higher freight rates compared to the fourth quarter of 2023, while at reduced bunker price helped to compensate for the higher bunker consumption, which is given due to the rerouting around the Cape of good hope.

Speaker Change: Finally, there was a positive contribution from higher detention and demurrage revenue as well as the mechanical impact of revenue recognition.

Patrick Jany (A.P. Moller: Revenue increased by 9.9% year-on-year to $3.9 billion on the back of a solid development in all regions and in most of our products, supported in particular by strong year-on-year growth in warehousing, less than container load, and air. Profitability also increased year-on-year with an EBIT of $158 million, which is more than twice the amount delivered in Q4 2023, and equivalent to an EBIT margin of 4.1%. While this represents a sequential margin decline from Q3, mainly due to the business mix and some one-offs, the margin recovery throughout 2024 shows that our logistics business is strengthening and that our cost initiatives are paying off. There is still some way to go as we pursue the 6% EBIT margin, but we are confident we are moving closer to reaching our ambition.

CFO Patrick Jani: Finally, there was a positive contribution from higher detention and demerit revenue as well as a mechanical impact of revenue recognition.

Patrick: Finally, there was a positive contribution from higher detention and demurrage revenue as well as the mechanical impact of revenue recognition.

Speaker Change: Now, let's look at our Kpis evolution on slide 17, as I've touched upon previously freight rates were significantly up year on year, averaging 2000 and $659 for efficacy in the quarter.

CFO Patrick Jani: Now let's look at our KPIs for Ocean on slide 17. As I have touched upon previously, freight rates were significantly up year-on-year, averaging $2,659 per FFE in the quarter. representing an increase of 38% compared to Q4-23, but an 18% sequential decline as we moved beyond the freight peak. We successfully kept operating costs, excluding bunker flat year-on-year, offsetting inflation and all the additional costs relating to the reroute. as in every quarter in 2024, unit costs at fixed bunker increase though year-on-year, given the higher bunker consumption due to the longer sailing. Our average operating fleet increased 6.4% year-on-year, mainly on additional chartered vessels.

Patrick: Now, let's look at our Kpis Ocean.

Patrick: On slide 17, as I've touched upon previously freight rates were significantly up year on year, averaging 2000, and $659 square feet in the quarter.

Speaker Change: Representing an increase of 38% compared to Q4, 'twenty three but this 18% sequential decline as we moved beyond the freight peak.

Patrick: Representing an increase of 38% compared to Q4, 'twenty three but this 18% sequential decline as we moved beyond the freight peak.

Speaker Change: We successfully.

Speaker Change: Kept operating cost excluding bunker flat year on year, offsetting inflation and all the additional costs relating to the rerouting.

Patrick: We successfully.

Patrick: Kept operating cost excluding bunker flat year on year, offsetting inflation and all the additional costs relating to the rerouting.

Speaker Change: As in every quarter in 2024 unit cost at fixed bunker increase year on year, given the higher bunker consumption due to the long of savings.

Patrick: As in every quarter in 2024 unit cost at fixed bunker increase year on year, given the higher bunker consumption due to the long of savings.

Speaker Change: Our average operating fleet increased six 4% year on year, mainly on additional chartered vessels. This reflects our approach of strategically injecting capacity to meet market demand and maintain the necessary agility in the network, which can be seen in light of our continued high vessel utilization.

Patrick Jany (A.P. Moller: We continue to invest in CapEx as well as we pursue organic growth and optimizing product offering. The $232 million CapEx in Q4 related mostly to air and our contract logistics business. Looking closer at the performance by product family. In Managed by, our revenue increased 20% to $584 million in Q4, driven by solid growth in project logistics and lead logistics. Revenue, together with stronger operational performance across most products, resulted in an overall EBITA margin of 20.6%. Fulfilled by also saw year-on-year growth in almost all regions, with the largest revenue gains coming from warehousing and, in particular, from the North American market.

Patrick: Our average operating fleet increased six 4% year on year, mainly on additional chartered vessels. This reflects our approach of strategically injecting capacity to meet market demand and maintain the necessary agility in the network, which can be seen in light of our continued high vessel utilization.

CFO Patrick Jani: This reflects our approach of strategically injecting capacity to meet market demand and maintain the necessary agility in the network, which can be seen in light of our continued high vessel utilization. Volumes increased 0.8% in the fourth quarter, driven by a strong demand in Asia-Europe and inter-Asia, amongst others, in marking a 3.6 volume increase for the full year. While our 2024 volume growth was below our estimated global container market growth, it's important to note that our vessels have been sailing at full capacity throughout the year, with vessel utilization at an excellent 96% for the full year.

Speaker Change: Volumes increased 0.8% in the fourth quarter, driven by strong demand in Asia, Europe and into Asia, amongst others, and marking a $3 six volume increase for the full year.

Patrick: Volumes increased 0.8% in the fourth quarter, driven by strong demand in Asia, Europe and into Asia, amongst others and marking a three six volume increase for the full year.

Speaker Change: 2020 for volume growth was below our estimate of global container market growth.

Speaker Change: It is important to note that our vessels, having sitting at full capacity throughout the year with vessel utilization at an excellent 96% for the full year.

Patrick: 2020 for volume growth was below our estimated global container market growth.

Patrick: It is important to note that our vessels have been sitting at full capacity throughout the year with vessel utilization at an excellent 96% for the full year.

Speaker Change: Now, let us now turn on logistics and services on slide 18.

Patrick Jany (A.P. Moller: Despite increased revenue and improved margin in warehousing, lower results in operational one-off costs in Last Mile and ground freight contributed to an EBITA margin decline to -5.5% for the quarter. Revenue also increased in our largest product family Transported by Maersk, where solid volume growth in most of our products, together with higher rates in LCL and air, resulted in a 9.9% year-on-year increase to a total of $1.8 billion. Meanwhile, refocusing on customer profitability and unit cost savings from route optimization and procurement in air, we supported an EBITA margin increase to 9.5%. Let's move on to our Terminals business. On slide 20, Terminals delivered another quarter of excellent results, with Q4 2024 marking the best Q4 in the segment's history and closing off the best ever year in that business.

Speaker Change: Our financial performance in the fourth quarter highlights the improvements made to the business since the trough reached at the first quarter of the year revenue increased by 9.9% year on year to $3 $9 billion on the back of a solid development in all regions and in most of our products supported in particular by strong.

CFO Patrick Jani: Now, let us now turn on Logistics and Services on slide 18. Financial performance in the fourth quarter highlights the improvements made to the business since the trough reached at the first quarter of the year. Revenue increased by 9.9 percent year-on-year to $3.9 billion on the back of a solid development in all regions and in most of our products, supported in particular by strong year-on-year growth in warehousing, less-than-container load and air. Profitability also increased year-on-year, with an EBIT of $158 million, which is more than twice the amount delivered in Q4-23. and equivalent to an EBIT margin of 4.1%.

Patrick: Now, let us now turn on logistics and services on slide 18.

Patrick: Our financial performance in the fourth quarter.

Patrick: Highlights the improvements made to the business since the trough reached at the first quarter of the year revenue increased by 9.9% year on year to $3 9 billion on the back of a solid development in all regions and in most of our products supported in particular by strong year on year growth in warehousing and Kantar.

Speaker Change: Year on year growth in warehousing less than container load and air.

Speaker Change: Profitability also increased year on year with an EBITDA of $158 million, which is more than twice the amount delivered in Q4 23.

Patrick: In a load in the air.

Patrick: Profitability also increased year on year with an EBITDA of $158 million, which is more than twice the amount delivered in Q4 23.

Speaker Change: And equivalent to an EBIT margin of four 1%.

Speaker Change: While this represents a sequential margin decline from the third quarter, mainly due to the business mix and some one offs.

Patrick: And equivalent to an EBIT margin of four 1% well.

Speaker Change: The margin recovery throughout 2024 shows that our logistics business is strengthening and then our cost initiatives are paying off.

CFO Patrick Jani: Well, this represents a sequential margin decline from the third quarter, mainly due to the business mix and some one-offs. The margin recovery throughout 2024 shows that our logistics business is strengthening and that our cost initiatives are paying off. There is still some way to go as we pursue the 6% EBIT margin, but we are confident we are moving closer to reaching our ambition. We continue to invest in CAPEX as well, as we pursue organic growth and optimizing product offerings. The $232 million CAPEX and Q4 related mostly to air and our contract logistics.

Patrick: While this represents a sequential margin decline from the third quarter, mainly due to the business mix and some one offs.

Patrick: The margin recovery throughout 2024 shows that our logistics business is strengthening and then our cost initiatives are paying off.

There's still some way to go as we pursue the 6% EBIT margin, but we are confident we are moving closer to reaching our ambition.

Patrick Jany (A.P. Moller: Top line growth was strong as revenue increased 17% to $1.2 billion, driven by higher volume growth and revenue per move. Volumes grew 6% year-over-year, particularly from strong growth in Los Angeles, while revenue per move increased 9% from inflation offsetting tariff increases, better product mix, and higher storage revenue. Cost per move increased 1.1%, reflecting inflation, inflationary impact together with depreciation and product mix. With top line growth outpacing higher costs, EBIT logically increased 44% to $338 million and resulting in a return on invested capital of 13.5%. Finally, CapEx decreased to $158 million this year as the investment into Pier 400 and Port Elizabeth, which we have mentioned last year, have been completed. Turning to the Terminals EBITA overview on the next slide.

Patrick: There's still some way to go as we pursue the 6% EBIT margin, but we are confident we are moving closer to reaching our ambition.

Speaker Change: We continue to invest in capex as well as we pursue organic growth and optimizing product offering.

Speaker Change: 232 million Donuts Capex in Q4 related mostly to air in our contract logistics business.

Patrick: We continue to invest in capex as well as we pursue organic growth and optimizing product offering.

Speaker Change: Looking closer at the performance by product family.

Patrick: 232 million Donuts Capex in Q4 related mostly to air in our contract logistics business.

Speaker Change: In managed by.

Speaker Change: Revenue increased 20% to $584 million in the fourth quarter.

CFO Patrick Jani: Looking closer at the performance by product family. It managed by revenue increased 20% to $584 million in the fourth quarter, driven by solid growth in project logistics and lead logistics. Revenue together with stronger operational performance across most products resulted in an overall EBITDA margin of 20.6%. Fulfilled Buy also saw year-on-year growth in almost all regions, with the largest revenue gains coming from warehousing and in particular from the North American market. Despite increased revenue and improved margins in warehousing, lower results in operational one-off costs in last mile and ground trade contributed to an EBITDA margin decline to minus 5.5% for the quarter.

Patrick: Looking closer at our performance by product family.

Speaker Change: Driven by solid growth in project logistics and need logistics.

Speaker Change: In managed by Liam.

Speaker Change: <unk> revenue increased 20% to $584 million in the fourth quarter drill.

Speaker Change: Revenue together with strong operational performance across most products resulted in an overall EBITDA margin of 26%.

Speaker Change: Driven by solid growth in project logistics and need logistics.

Speaker Change: Revenue together with strong operational performance across most products resulted in an overall EBITDA margin of 26%.

Speaker Change: Fulfilled by also saw year on year growth in <unk>.

Speaker Change: Almost all regions.

Speaker Change: With the largest revenue gains coming from warehousing and in particular from the North American market.

Speaker Change: Fulfilled by also saw year on year growth.

Speaker Change: Despite increased revenue and improved margins in warehousing lower results and operational one off costs in last mile and ground freight contributed to an EBITDA margin declined to minus five 5% for the quarter.

Speaker Change: Almost all regions.

Speaker Change: With the largest revenue gains coming from warehousing and in particular from the North American market.

Patrick Jany (A.P. Moller: Starting from the left, you can see the profitability impact from the 6.7% like-for-like increase in volumes, with growth coming from the mainly external customers and as well as regionally driven by North America. The 9% higher revenue per move made the largest contribution to profitability more than offsetting the increased cost per move together with high utilization. With this, I conclude the financial review of our Q4 earnings, and we shall proceed to the Q&A section. Operator, please go ahead.

Speaker Change: Despite increased revenue and improved margins and warehousing.

Speaker Change: Lower results in operational one off costs in last mile and ground trade contributed to an EBITDA margin declined to minus five 5% for the quarter.

Revenue also increased in our largest product family transported by where solid volume growth in most of our products together with the higher rates at SCE and air.

CFO Patrick Jani: Revenue also increased in our largest product family, transported by, where solid volume growth in most of our products together with the higher rates in LC and in air, resulted in a 9.9% year-on-year increase to a total of $1.8 billion. Meanwhile, refocusing on customer profitability and unit cost savings from route optimization and procurement in-air, we supported and added our margin increase to 9.5%.

Speaker Change: Revenue also increased in our largest product family transported by where solid volume growth in most of our products together with the higher rates and as he an error resulted in a nine 9% year on year increase to a total of $1 $8 billion.

Speaker Change: Results in the nine 9% year on year increase to a total of $1 8 billion.

Speaker Change: Meanwhile, refocusing on customer profitability and unit cost savings from route optimization and procurement in error.

Speaker Change: Put it in the EBITA margin increase to nine 5%.

Speaker Change: Meanwhile, refocusing on customer profitability and unit cost savings from route optimization and procurement in error.

Operator 1: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handset while asking question. Please limit yourself to one question. For any further question, you may queue up again. Anyone who has a question may press star and one at this time. The first question comes from the line of Alexia Dogani from J.P. Morgan. Please go ahead.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handset while asking question. Please limit yourself to one question. For any further question, you may queue up again. Anyone who has a question may press star and one at this time. The first question comes from the line of Alex Dogani from JPMorgan. Please go ahead.

Speaker Change: Let's move on to our terminals business.

Speaker Change: On slide 20 terminals delivered another quarter of excellent results with Q4 2024, marking the best fourth quarter in the segments history.

Speaker Change: Supported and EBITA margin increased to nine 5%.

CFO Patrick Jani: Let's move on to our terminals business. on slide 20. Terminals delivered another quarter of excellent results with Q4 2024 marking the best fourth quarter in the segment's history and closing off the best ever year in that business. Top-line growth was strong as revenue increased 17% to $1.2 billion, driven by higher volume growth and revenue per move. Volumes grew 6% year-on-year, particularly from strong growth in Los Angeles, while revenue per move increased 9% from inflation offsetting tariff increases, better product mix, and higher storage revenue. Cost per move increased 1.1%, reflecting an inflationary impact together with depreciation with top-line growth outpacing higher costs, EBIT logically increased 44% to $338 million and resulting in a return on invested capital of $13.5 billion.

Speaker Change: Let's move on to our terminals business.

Speaker Change: <unk> 20 terminals delivered another quarter of excellent results with Q4 2024, marking the best fourth quarter in the segment's history and closing of the best ever year in that business.

Speaker Change: In closing of the best ever year in that business.

Speaker Change: Topline growth was strong as revenue increased 17% to $1 $2 billion.

Speaker Change: Driven by higher volume growth and revenue per move volumes grew 6% year on year, particularly from strong growth in Los Angeles, while revenue per move increased 9% from inflation offsetting tariff increases.

Topline growth was strong as revenue increased 17% to $1 $2 billion, driven by higher volume growth and revenue per move volumes grew 6% year on year, particularly from strong growth in Los Angeles, while revenue per move increased 9% from inflation offsetting tariff increases.

Alexia Dogani: Yeah, good morning. Thank you for taking my question. Really it's about competition. Obviously, your largest competitor is pulling ahead in terms of size, and it seems that it has started crossing the Red Sea more recently. How should we think about your use of cash? I mean, clearly you've decided to do a share buyback. Could you have considered M&A again in Logistics & Services? If no opportunities there, could you look at doubling down on container shipping again to close the gap with your largest competitor? Thanks.

Our product mix and higher storage revenue.

Speaker Change: As per move increased one, 1%, reflecting inflation inflationary impact together with depreciation and product mix.

Speaker Change: Our product mix and higher storage revenue cost per move increased one 1%, reflecting in Christian inflationary impact together with depreciation and product mix.

Speaker Change: With top line growth outpacing higher costs, maybe logically increased 44% to $338 million and resulting in a return on invested capital of 13, 5%.

Speaker Change: With topline growth outpacing higher costs, EBIT logically increased 44% to $338 million and resulting in a return on invested capital of 13, 5%.

Speaker Change: Finally, capex decreased to $158 million this year as the investment into Pier 400, and Port Elizabeth, which we have mentioned last year have been completed.

CFO Patrick Jani: Finally, CapEx decreased to $158 million this year as the investment into Pier 400 and Port Elizabeth, which we have mentioned last year, have been completed. Turning on to the terminals EBITDA bridge on the next slide, starting from the left you can see the profitability impact from the 6.7% like-for-like increase in volumes, with growth coming from the mainly external customers and as well as regionally driven by North America. The 9% higher revenue per move made the largest contribution to profitability. More than offsetting the increased cost per move together with high utilization.

Speaker Change: Finally, capex decreased to $158 million this year as the investment into Pier 400, and Port Elizabeth, which we have mentioned last year have been completed.

Speaker Change: Turning onto the terminals EBITDA bridge on the next slide starting from the left you can see the profitability impact from the six 7% like for like increase in volumes with growth coming from the mainly external customers and as well as regionally driven by North America, the 9% higher revenue per move made the largest contribution.

Patrick Jany (A.P. Moller: Thank you, Alexia. First, I think it's true that MSC and CMA have a very ambitious investment program in new fleet. It's true also that we have been very clear on what we want to do with ocean shipping, which is to stay where we are, because we don't see any correlation between size and increased margin. So there is no more correlation there. Therefore, with the Gemini network, we have the most competitive and the cheapest network to serve our customers. That's really what matters. That's I think one key point. It has been true for the past years, and it will continue to be true for the foreseeable future.

Vincent Clerc (A.P. Moller: Thank you, Alex. First, I think it's true that MSC and CMA have a very ambitious investment program in new fleet. It's true also that we have been very clear on what we want to do with ocean shipping, which is to stay where we are, because we don't see any correlation between size and increased margin. So there is no more correlation there. Therefore, with the Gemini network, we have the most competitive and the cheapest network to serve our customers. That's really what matters. That's I think one key point. It has been true for the past years, and it will continue to be true for the foreseeable future.

Speaker Change: Turning on to the terminals EBITDA bridge on the next slide starting from the left you can see the profitability impact from the six 7% like for like increase in volumes with growth coming from the mainly external customers and as well as regionally driven by North America.

Speaker Change: <unk> to profitability.

Speaker Change: More than offsetting the increased cost per move together with high utilization.

Speaker Change: The 9% higher revenue per move made the largest contribution to profitability.

Speaker Change: And with this I conclude the financial review of our fourth quarter earnings.

Speaker Change: More than offsetting the increased cost per move together with high utilization.

Speaker Change: And we shall proceed to the Q&A section.

Speaker Change: Operator, Please go ahead.

CFO Patrick Jani: And with this, I conclude the financial review of our fourth quarter earnings, and we shall proceed to the Q&A section.

Speaker Change: And with this I conclude the financial review of our fourth quarter earnings and we shall proceed to the Q&A section.

Speaker Change: We will now begin the question and answer session anyone who wishes to ask a question May press star and one on the attached on California.

Operator: Operator, please.

Speaker Change: Operator, Please go ahead.

Operator: We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and...

Speaker Change: We will now begin the question and answer session anyone who wishes to ask a question you May press star and one on the attached on California.

Speaker Change: I tell them to confirm that you have entered the queue.

Speaker Change: Wish to remove yourself from the question queue, you May press star two.

Vincent Clerc (A.P. Moller: The other thing that I want to say is that actually the situation on the Red Sea is the same that it has been all the time. They are not starting to cross again. We have one competitor, CMA, that tried to make one test service, and then they have one service that has, throughout last year, been sailing through the Red Sea, and that's still what they have. The test service is sailing the long route today. Actually what you're seeing is everybody, I think, is worried about the same thing. Is it safe to travel?

Speaker Change: On the phone I requested to use only handed way asking question. Please.

Speaker Change: To confirm that you have entered the queue.

Speaker Change: If you wish to remove yourself from the question queue, you May press star two.

Speaker Change: Please limit yourself to one question for any further question you may queue up again.

Operator: Questioners on the phone are requested to use only hands while asking questions. Please limit yourself to one question. For any further questions, you may queue up again. Anyone who has a question may press star and 1 at this time.

Speaker Change: Question on the phone I requested to use only handsets way asking question.

Speaker Change: Anyone who asked the question makes sense Scott.

Speaker Change: At this time.

Speaker Change: Please limit yourself to one question for any further question you may queue up again.

Speaker Change: First question comes from the line of Alexia look on it from J P. Morgan. Please go ahead.

Speaker Change: Anyone who has a question Nathan.

Alexia Look: Yes. Good morning, Thank you for taking my question.

Speaker Change: At this time.

Alexa Dugani: The first question comes from the line of Alexa Dugani from J.P. Morgan. Please go ahead. Yeah, good morning. Thank you for taking my question. Really, it's about competition. Obviously, your largest competitor is pulling ahead in terms of size, and it seems that it has started crossing the Red Sea more recently. How should we think about your use of cash? I mean, clearly you've decided to do a share buyback. Would you have considered M&A again in logistics and services? And if no opportunity is there, could you look at doubling down on container shipping again to close the gap with your largest competitor?

Alex: First question comes from the line of Alex <unk> from Jpmorgan. Please go ahead.

Speaker Change: Really its about competition.

Speaker Change: Obviously your largest competitor is pulling ahead in terms of size and it seems that he has started crashing they're actually more recently and how should we think about <unk>.

Alex: Yes. Good morning, Thank you for taking my question.

Vincent Clerc (A.P. Moller: Two, if we need to, or when we get to sail back to the normal trade routes, we need to be sure that it is not only safe today, but that we won't have to go back a few months later because suddenly the situation has reignited. The situation on the ground in the Middle East is still way too complex and unsettled for us to make that decision. I think to the last point, with respect to capital allocation, I think you're hopefully pleased with the decisions that we have made on both dividends and share buyback, and our communication on this respect.

Alex: Really its about competition.

Alex: Obviously your largest competitor is pulling ahead in terms of size and it seems that he has started crossing there actually more.

Speaker Change: Cash I mean, clearly you've decided to do.

Speaker Change: Share buyback could you have considered M&A again.

Alex: More recently and.

How should we think about.

Alex: Use of cash I mean, clearly you've decided to do.

Speaker Change: Services and if no opportunities there could you look at doubling down on container shipping again to close that gap.

Alex: I'll share buyback could you have considered M&A again.

Alex: Services.

Speaker Change: Large competitor.

Alex: And if no opportunities.

Alex: Could you look at doubling down on container shipping again to close the gap with your largest competitor.

Alex: Thank you Alex so the.

Alex: First I think it's true that our MSC and CMA have a very ambitious investment program and a new fleet.

Vincent Clerc (A.P. Moller: We believe that the balance sheet that we have today allows us to be both generous to our shareholders and to continue the execution of the strategy that we have. When the time comes, and we feel that we have the right solidity in the platform, both from a profitability, from a control, and from a tech perspective, we will see when it's time to reengage on M&A. That will be on the logistics side or the terminal side, but it won't be by doing something big in shipping, which would close a gap that has no impact on profitability.

Alex: Yes.

CFO Patrick Jani: Thank you, Alexa.

Alex: Thank you Alex.

Alex: No.

CFO Patrick Jani: First, I think it's true that the MSC and CMA have a very ambitious investment program in the new fleet. It's true also that we have been very clear on what we want to do with ocean shipping, which is to stay where we are because we don't see any correlation between size and increased margin, so there is no more correlation there. With the Gemini network, we have the most competitive and the cheapest network to serve our customers. And that's really what matters. So that's, I think, one key point. It has been true for the past years, and it will continue to be true for the future.

Alex: It's true also that we have been very clear on what we want to do with our with Ocean shipping which is to stay aware, where we are because we don't see any correlation between the between between size and increased margin normal. So there's no more core of correlation there. So therefore.

Alex: First I think it's true that our MSC and CMA have a very ambitious investment program and a new fleet.

Alex: It's true also that we have been very clear on our what we want to do with our with Ocean shipping, which is to stay where where we are because we don't see any correlation between the between between size and increased margin.

Alex: With the Gemini network, we have the most competitive and the cheapest network to serve our customers and that's really what that's really what matters. So so that's a that's I think one key point it has been true for the for the past years and it will continue to be true for the foreseeable future.

Alex: So theres no more core of correlation there so therefore.

Alex: With the Gemini network, we have the most competitive and the cheapest network to serve our customers and that's that's really what that's really what matters. So so that's a that's I think one key point it has been true for the for the past years and it will continue to be true.

Alex: The other thing that I would say is actually the situation on the Red Sea is the same that it has been all the time they are not starting to cross again, we have one competitor CMA that tried to make one test.

Alexia Dogani: Thank you.

Operator 2: The next question comes from Dan Togo Jensen from Carnegie. Please go ahead.

Operator: The next question comes from Dan Togo Jensen from Carnegie. Please go ahead.

Dan Togo Jensen: Yes, thank you, and congrats with the strong finish in 2024. One question on unit cost. With a utilization of 95%, what are the levers, so to say, to improve the unit cost going further? I can understand, of course, the bunker arguments when you start to sail shorter, but with this utilization, what are the levers to further drive down unit costs? Thanks.

Alex: Service and then they have one service that has.

Alex: Throughout last year's been sailing through our through the Red Sea and that's still what they have and the test services selling the long route today. So so actually what you're seeing is everybody. I think is is worried about the same thing a is it safe to travel and true if we need to when we get to sell back to the normal trade routes, we need to be sure.

Alex: Sure. It is not only safe today, but that we won't have to go back a few months later, because suddenly situation has reignited and the situation on the ground in the Middle East is still way too complex and unsettled for us to to make that decision then.

Vincent Clerc (A.P. Moller: Yeah. Dan, I think you have, I would put this in two buckets. One, obviously at 95% for the year across the network, higher utilization is a bucket that is pretty much exhausted. This is actually a higher utilization that we had during COVID. That's a tribute to the team. They have really done something amazing to have this new efficiency frontier. I think this one is pretty much maxed out. I think we have two ways to do it. One is through what I would call operational efficiency, which is what Gemini is about. How do you create more density in the network? How do we create better asset turns?

Alex: Then.

Alex: I think to the last point with respect to capital allocation.

Alex: I think where you'll hopefully pleased with the the.

Alex: The decisions that we have made on both dividends and share buyback.

Alex: In our communication on this respect we believe that.

Alex: The balance sheet that we have today allows us to be both a generous to our shareholders and to continue the execution of the strategy that we have so when the time comes and we feel that we have the right solidity in the platform both from a profitability.

Vincent Clerc (A.P. Moller: Having fewer ports, fewer port calls, and having the coverage that we're building now together with Hapag-Lloyd will achieve these $500 million of savings. You can see the volumes that we have. You can see how meaningful it is on a per FFE basis to bring the unit cost down. I think this is one of the things that we have. The second will follow more, I think, the return to the Red Sea, we will see some of the inflation that there has been in some of the cost items, such as the charter rates, and so on.

Alex: From a from a control and from a tech perspective, we will see.

Alex: <unk>.

Alex: When it's time to Reengage on M&A, but that will be that will be on the logistics side.

Alex: The terminal side, but it won't be.

Alex: By doing something big in.

Alex: In shipping, which would close the gap that has no impact on their own profitability.

Vincent Clerc (A.P. Moller: That will come down as this gets renewed, and that will continue to bring our unit costs down as just the input or the input into our network gets to be cheaper. I think it's these two buckets is where there has been inflation. As you see the situation loosen up, you will see this inflation revert on leasing, on container leasing, on ship leasing, and on procurement as well, terminal capacity and so on. There will be maybe some opportunities to some place there. Then the operational efficiencies in, and I think a big one there is Gemini, but we will continue every year to find new ways of getting more effective on how we design our network.

Alex: Thank you.

Speaker Change: The next question comes from Danielle Brill Jensen from Carnegie. Please go ahead.

Speaker Change: Yes. Thank you.

Speaker Change: But it was a strong finish in 'twenty for one.

Speaker Change: One question on unit cost.

Speaker Change: But the yen where utilization of 95%.

Speaker Change: What is what are the leaders so to say tool to improve unit cost going further I can understand of course.

Speaker Change: Got you mentioned when you start to see the shoulder, but utilization was down to two to further drive down costs.

Speaker Change: Yeah, Dan so.

Speaker Change: So I think that you have a I would put this in two buckets. One so obviously you're at 95% for the year across the network higher utilization is a is a bucket that is pretty much exhausted. This is actually a higher utilization that we had during COVID-19.

Vincent Clerc (A.P. Moller: There is still, on the asset turn, there is still a lot to go there.

Dan Togo Jensen: Can you maybe give some guidance? What are we talking about here in percentage terms per annum just to get a flavor?

Vincent Clerc (A.P. Moller: I think I'll give you the guidance that it's a $500 million annualized with Gemini. You will have half a year of Gemini this year. I would certainly expect $250 in the second half year, and a minimum of $500 the following. After that, we'll need to continue to dig into that toolbox to see how much more we can get. I think maybe that will be one of the topic we will be happy to talk to in a little more detail when we get to our Capital Markets Day. I think it needs a bit of time to be unpacked.

Speaker Change: That's a tribute to the team they have really done something.

Speaker Change: Amazing to have this new efficiency frontier. So I think this one is a is pretty much maxed out. So I think we have two ways to do it.

Speaker Change: One is through what I would call operational efficiency, which is what Gemini is about how do you create more density in the network. How do we create better asset turns having fewer ports fewer port calls and having the coverage that we're building now together with Hapag Lloyd will achieve these $500 million of savings you can see the volumes that we have you can.

Speaker Change: See how meaningful it is on a per <unk> basis to bring the unit cost down I think this is a this is one of the thing that we have the second and I will the second will follow more.

Dan Togo Jensen: Sounds good. Thanks a lot.

Operator 2: The next question comes from Robert Joynson from BNP Paribas Exane. Please go ahead.

Operator: The next question comes from Robert Joynson from BNP Paribas Exane. Please go ahead.

Robert Joynson: Yeah. Good morning, Vincent and Patrick. I'll focus my question on the bigger picture, if I may. The context being that it's now been more than eight years since the Global Integrator strategy was announced. Over which time, I think it's fair to say progress has been slower than expected, and it's certainly true that Maersk has consistently lagged its competitors in terms of profitability. Looking forward, I think part of the problem for Maersk investment case is that investors don't know what the Integrator strategy will look like when it's completed. They don't know when it will be completed. They don't know what investment or M&A spend will be required to get there. If you could provide some color on the latest thinking around those issues, I think that would be super helpful.

Speaker Change: I think the return to the Red Sea is we will see some of the inflation that there has been some of the cost items such as the charter rates.

Speaker Change: And so on that that will come down as this gets renewed and that will continue to bring.

Speaker Change: To bring our unit costs down is just the input.

Speaker Change: In into our network gets gets to be cheaper. So I think it is there's two buckets is where there has been inflation as you see the situation loosen up you will see these disinflation revert on leasing on container leasing on ship leasing and and on procurement as well as terminal capacity and so on there will be maybe some opportunities.

Speaker Change: To some place there and then the operational efficiencies and.

Speaker Change: And I think a big one there is.

Robert Joynson: Just in that context, with the stock trading pretty close to historic lows and actually quite a wide range of metrics even after this morning's bounce, to what extent do you take into account valuation when thinking about the future strategy and future actions? Thank you.

Speaker Change: It.

Speaker Change: Is gemini, but we will continue every year to find new ways of getting more effective on how we design. Our network. There is still on the asset turn there is still a lot to go there.

Speaker Change: Can you maybe give some guidance.

Speaker Change: What are we talking about here in percentage terms trend I'm, just you can't get a flavor.

Speaker Change: I'll give you the guidance that it's a $500 million annualized with Gemini.

Vincent Clerc (A.P. Moller: That's a quite wide question, so let me try to give a couple of thoughts on this. I think some of the things that you allude to is also something that is, I think, better parked into a Capital Markets Day where we can again unpack the different elements. Let me start by saying that obviously valuation is something that weighs when we consider what we need to do and where we take the strategy. Let me take it, besides that, from the other side.

Speaker Change: And you will have half a year of Gemini this year.

Speaker Change: So I would certainly expect a 250 in the second half year.

Speaker Change: And a minimum of 500, the following and then after that we'll need to continue to too deep to dig into our into the toolbox to see how much more we can we can get I think maybe that will be one of the topics. We will be happy to talk to in a little more detail when we get to our capital markets day, I think it needs a bit of time to be unpacked.

Vincent Clerc (A.P. Moller: If you look at the way the world is going, with all the disruptions and all the changes that there has been, there's no doubt if you talk to any companies that produces goods, that these disruptions in the supply chain is going to make logistics an area where there is more value to add by supporting customers and being good at doing the job. For us to continue the diversification and the development of capabilities for the long run in logistics makes more sense today than it did eight years ago when we started the strategy. That that's why it continues to be our direction. Now, you point to the fact that the progress have been slower than expected. I think that for me, there are two reasons for that.

Speaker Change: Sounds good thanks a lot.

Speaker Change: The next question comes from Robert <unk> from BNP Paribas. Please go ahead.

Robert: Yes, good morning, Patrick.

Speaker Change: Patrick.

Speaker Change: Just my question on the bigger picture if I may.

Speaker Change: A complex thing, but it's now been more than is supposed to global integrated strategy was announced.

Speaker Change: <unk> I think it's fair to say progress has been slower than expected.

Speaker Change: Sure.

Speaker Change: Consistently ranked as competitors in terms of profitability.

Speaker Change: So looking forward I think part of the problem for the.

Speaker Change: Investment case, it's the investors know.

Speaker Change: It's great to stretch REIT structure will look like when it's completed.

Speaker Change: I don't know when it will be completed.

Speaker Change: I don't know what investment or M&A studies will be required to get that so if you could provide some color on latest thinking around privacy issues I think that would be super helpful.

Vincent Clerc (A.P. Moller: One is fairly mundane. In some cases, there are some operational pains that comes into growing into the scale that we need to have. It sounds easy to do M&A, but there is a lot of difficulties with that. It sounds easy to go full organic, but there's also some difficulties to go with that. I think that this is what we're getting on top of. The second has been the huge volatility of having had to go through both COVID, especially COVID, on the way, and the many disruptions.

Speaker Change: And also just in that context with the stock trading pretty close to historically was actually quite a wide range of metrics even after this morning's bounce.

Speaker Change: Extend can you take into account valuation when thinking about the future strategy and future actions. Thank you.

Speaker Change: That's a quite quite a wide question. So let me try to give a couple of thoughts on this and I think some of the things that you allude to is also is also something that is I think better parked into our capital markets day, where we can again unpack the different elements, but let me start by.

Vincent Clerc (A.P. Moller: It does, you know, create something where actually because of the abnormally high profitability of Ocean in the last 5 years and a huge volatility in the market in general, the progresses that have been made in logistics and services are not really coming through because the volatility on Ocean is taking a lot of that light. There is the direction is the right one. The destination that we have is still the same. I think to unpack a little bit more, what does that look like when we get there? I would like to park this to the Capital Markets Day.

Speaker Change: Saying that obviously valuation.

Speaker Change: Is is something that that ways. When we are when we consider what we need to what we need to do and where we take the strategy.

Speaker Change: So let me take it.

Speaker Change: Besides that let me take it from the some of the other side. If you look at the way the world is going with all the disruptions and all the changes that there has been there's no doubt if you talk to any companies that has that produces goods that these disruptions in the supply chain is going to make logistics an area, where there is more value to add by supporting customers and.

Vincent Clerc (A.P. Moller: I think that's one of the key reasons why we feel it's important to hold such an event and to be able to really take you through how does that look like, and why do we think that we have a much, we're in a much different place today than we were just a couple of years ago with respect to actually getting that executed.

Speaker Change: Being good at doing the job so for us to continue the diversification and the development of capabilities for the long run in a in logistics makes more sense today than it did eight years ago. When we started the strategy and that's why it continues to be our direction now.

Robert Joynson: If we just think about the integrator strategy in a simple terms, let's say it was a football match. Are we at half time yet? Is that a fair assessment or maybe not?

Speaker Change: Now.

Speaker Change: You are you point to the fact that the the AR. The progress has been slower than unexpected I think that for me that there are two reasons for that.

Vincent Clerc (A.P. Moller: I'll take another metaphor. It's a bit difficult because as you know, in business, we never get the end whistle that says we can go rest and think about next week's game. It's a continuum. What I would say is, in my book, we've gone through the hard stuff, which is all the building, the foundational capabilities on the technology side, on the job side, on some of the side, on connecting the different parts. All of this is stuff that is not visible and that is super hard to do. That is what we have spent actually most of the time in these past few years doing.

Speaker Change: One is fairly mundane.

Speaker Change: In some cases it's.

Speaker Change: They're awesome operational pains that comes into growing into the scale that we need to have.

Speaker Change: It sounds easy to do M&A, but there is a lot of difficulties without it sounds easy to go full organic but theres also some difficulties to go with that and I think that this is this is what where we're getting on top of the second has been has been the huge volatility of having to go through both the COVID-19.

Speaker Change: Specialty COVID-19 on the way.

Speaker Change: And and and.

Speaker Change: And there are many disruptions it does.

Vincent Clerc (A.P. Moller: We are in a position today that is completely different from what we're looking at. We have a couple of areas such as middle mile and last mile, where it's dragging us down in our Fulfilled by Maersk compared to where we need to be from a profitability. I think the first thing that we need, going back to the slide that I had, we need to get to the 6% next year because that means that all that foundation is done and that we have what it takes then to accelerate the execution of this. I can't give you a percentage, but I would say the foundational, the hard stuff is done. Now we need to continue the work.

Speaker Change: You know create something we're actually because of the the abnormally high profitability of ocean in the last five years and a huge volatility in the market in general.

Speaker Change: The progress is that that have been made in logistics and services are not really coming through because the volatility on ocean is taking a lot of of that life, but there is the direction is the right. One the destination that we have is is still the same and I think to unpack a little bit more what does that look like when we get there.

Speaker Change: I'd like to park this too.

Speaker Change: To the capital markets day, I think that's that's one of the key reasons why we feel it's important.

Vincent Clerc (A.P. Moller: I think we've done the hardest part of what there is in our strategy.

Speaker Change: To have to hold such an event and to be able to really take you through how does that look like and why do we think that we have a much we in a much different place today than we were just a couple of years ago with respect to actually getting that it execute it.

Robert Joynson: All clear. Thank you then. I look forward to catching up tomorrow.

Operator 2: The next questions come from Omar Nokta from Jefferies. Please go ahead.

Operator: The next questions come from Omar Nokta from Jefferies. Please go ahead.

Omar Nokta: Thank you. Good morning. Yeah, just a question on the contracting. So far, how would you say the Asia-Europe season went in terms of securing contracts for this year? And any kind of color you can give on what percentage was put under contract, and how it fared in relation to 2024. And then also maybe kind of what the setup is for the Transpacific contracting season. Thank you.

Speaker Change: If we just have to think about it it's a great strategy is simple thoughts that site.

Speaker Change: It was a football match.

Speaker Change: Oh, a half time yet.

Speaker Change: Is that a fair assessment or or maybe not.

Speaker Change: So our Alta I'll I'll take another metaphor, it's a bit difficult because as you know in business, we never get the end the end whistle that says we can go arrest and think about next week's game.

Vincent Clerc (A.P. Moller: Yes, on the contracting, I have two or three points that I want to make. First of all, at the overall level, we're gonna be around the same percentage of contract as spot. I think when the market weakens, it's a good idea to lean into contracts because they tend to adjust lower than the spot. I think this is something we're continuing to execute. The contracting so far has been progressing quite well. Volumes are in line with the guidance that we have made with respect to volumes. What customers expect at this stage. Rate levels are also at a fairly decent level.

Speaker Change: It's a continuum, but what I would say is is we in my book, we've gone through the hard stuff, which is all the fact that the building the foundational capabilities on the technology side on the on the on the job side on some of the side side on the connecting the different parts. All of this is stu.

Speaker Change: That is not visible and that is super hard to do and that is what we have spent actually most of the time in these in these past few years doing we are in a in a position today that is completely different from what we're looking at we have a couple of areas such as.

Speaker Change: Middle mile and last mile, where it's dragging us down in our fulfill by mirrors compared to where we need to be from a profitability. So I think the first thing that we need going back to the slide that I had we need to to get to the 6% next year because that means that all of that foundation is done and that we have what it takes them to access.

Vincent Clerc (A.P. Moller: Now, I have to stress that with the fact that contract levels have been adjusted a couple of times up during the last year, we should expect that if rates on the spot market move significantly, customers will be also more willing than usual to come to the table and say, "We need to relook at this." I think given how much we have adjusted in 2024, we should expect also that the stabilizing effect of contract will maybe erode a little bit compared to what it has been in the past. In Transpacific, it's the same thing. Actually, from a market growth perspective, customers are very positive on market growth. They expect that the incoming administration will be good for consumption. Therefore, they are talking about fairly strong volumes.

Speaker Change: The execution of this.

Speaker Change: I can't give you a percentage, but I would say the foundational the hard stuff is done now we need to we need to continue to work, but I think we've done the hardest part of what there is in our in our strategy.

Alexia Look: Okay. Thank you Vincent and look forward to catching up tomorrow.

Speaker Change: The next question comes from Omar <unk> from Jefferies. Please go ahead.

Omar: Thank you and good morning.

Omar: Yes, just a question on the contracting and so far how would you say the Asia Europe season in terms of.

Omar: Security contract for this year and any kind of color you can give on.

Vincent Clerc (A.P. Moller: It's too early to talk about rate levels there on the Pacific, but at least from a volume perspective, this is continuing to look positive. Then a final note on emerging markets. The wider south also looked like there is some good resilience and some good demand for transport still.

Omar: What percentage was put under contract.

Omar: And how it fared in relation to 24, and then also maybe kind of what the setup is for.

For the Trans Pacific contracted deal. Thank you.

Omar: Yes, so on the contracting I have two two points or two or three points that I want to make four so first of all at the overall level, we're going to be.

Omar Nokta: Okay. Thanks, Vincent.

Omar: Around the same percentage of contract as a spot I think when the market weakens. It's a good idea to lean into contracts because they tend to adjust the lower.

Operator 2: The next question comes from Lars Heindorff from Nordea. Please go ahead.

Operator: The next question comes from Lars Heindorff from Nordea. Please go ahead.

Lars Heindorff: Yeah, thank you. It's also on Gemini. I'm just wondering, so, I mean, with you and Hapag-Lloyd now entering into this hub spoke, why do you believe that none of the other carriers think this is a good idea? Is the cost in terms of the savings that you have mentioned now, the $500 million there, cheaper to run the Gemini network compared to a point to point? Last but not least, are the customers willing to pay a premium for the service that you offer?

Omar: And then the spot. So I think this is a this is something we're continuing to execute.

Omar: The contracting so far has been progressing quite well volumes are in line with the guidance that we have made with our with respect to volumes so what customers expect.

Omar: At this stage rate levels are also at a fairly decent level now I have to I have to stress that with the fact that contract levels have been adjusted a couple of times up during the last year, we should expect that if rates on the spot market move significantly.

Vincent Clerc (A.P. Moller: I think, let me start with the last point that you have on customers. I think we're gonna need to prove it before we can even entertain conversations on premium. The customers have been educated to having low reliability. I think they're gonna need to feel the good stuff before they can actually draw benefits from it. That, I think, is the most important, a very important point. We are doing this for the reasons that I mentioned in my presentation. It's good for the customer because it will deliver 90%, and it's good for us because it is cheaper to run. The reason why others are not doing it, I think there is one good reason and one not so good reason.

Omar: Customers will be also more willing than usual to come to the table and say we need to re look at this so I think.

Omar: Given how much we have adjusted in 'twenty four we should expect also that the stabilizing effect of contract will maybe erode a little bit compared to what it has been in the past in.

Omar: In Pacific It's the same thing actually from a market growth perspective, our customers are very positive on the on market growth.

Omar: I expect that the incoming administration will be good for consumption.

Omar: And therefore they are they are they are talking about very strong volumes. It's too early to talk about rate levels. There on the on the Pacific, but at least from a volume perspective. This is a this is continuing to look positive and then a final note on emerging markets. So the.

Vincent Clerc (A.P. Moller: One good reason is if you don't have 100% operational controls of your hubs, you can't do it. We have worked 3 years in reviewing all the working processes and all the integration of technology between the operation of the hubs and the operation of the shipping line in order to transform hubs into a point that helps you be more on time rather than a point that creates delay. That's. You need to control the hubs. If you rely on third-party hubs, your incentives between the hub operator and the shipping line destroy the ability that you have to deliver what we deliver. I think that's the good reason why some of them are saying they don't believe in it, because they can't do it.

Omar: While the south.

Omar: It also looked like there was some good resilience in some good demand for for transport steel.

Omar: Okay. Thanks, Thank you.

Speaker Change: The next question comes from last Hangups from Nordea. Please go ahead.

Speaker Change: Yeah. Thank you. It's also on the on Jim and I was just wondering.

Speaker Change: So I mean would you in high Tech now entering into this hub spoke why do you believe that none of the other carriers seek to secure idea.

Speaker Change: It is the cost in terms of the savings that you have mentioned now the 500 millionaire.

Vincent Clerc (A.P. Moller: The second is, I think that it's an industry that has not invented anything fundamental in quite a long time, and therefore there is quite a lot of caution when somebody tries something new as to whether it's gonna work or not. That's a bit the default position, and I don't think it's a great position, but that's the position that they have. Today, it's a matter of opinion whether Gemini is better or not. The good thing is on the second half of the year, we will show it in fact, and it will be a matter of fact whether it's better or not. We will see it on the reliability, and we will see it on the cost.

Speaker Change: The other cost cheat is cheaper to run the gym and non accrual compared to a price point and last but not least are the customers that they really are.

To pay a premium for this service that you offer.

Speaker Change: Okay.

Speaker Change: So I think let me start with the last point that you have on customers I think we're going to need to prove it before we can even entertain conversations on the on premium.

Speaker Change: Customers have been educated to having low reliability I think they're going to need to feel the good stuff before they before they can actually draw benefits.

Speaker Change: From it so that I think is the most important is a very important point we were doing this.

Vincent Clerc (A.P. Moller: I think, for us now, you know, we worked on it for three years. We started to get into it, so we can't wait to look at the results in the second part of the year.

Speaker Change: For the for the reasons that I mentioned in the in my presentation. It's good for the customer because it will deliver 90% and it's good for us because it is cheaper to run the reason why others are not doing it I think there is one good reason and one not so good reason one. Good reason is if you don't have 100% operational controls of your.

Lars Heindorff: Thank you.

Vincent Clerc (A.P. Moller: I think it's the most innovative thing that has happened in this space in a couple of decades.

Operator 2: Next question comes from Alexia Irving from Bernstein. Please go ahead.

Operator: Next question comes from Alex Irving from Bernstein. Please go ahead.

Speaker Change: Hubs.

Speaker Change: You can't do it.

Alexia Irving: Hi. Good morning, gentlemen. My question as follows. What needs to happen for you to start reshaping your network and returning to the Red Sea and Suez transits, please?

Alex Irving: Hi. Good morning, gentlemen. My question as follows. What needs to happen for you to start reshaping your network and returning to the Red Sea and Suez transits, please?

Speaker Change: So you need to make you need to we have worked three years in reviewing all the working processes and all the integration of technology between operating of the operation of the hubs and the operation of the shipping line in order to transform hubs into.

Vincent Clerc (A.P. Moller: Let's just be clear on. There are two things that I'm looking for. First, it needs to be safe because I have colleagues that I need to send in the Red Sea on board those ships, and I want to make sure I don't put them in harm's way when I send them through that. It's true for our colleagues. It's true also as an expectation for all the cargo and the assets that we have. Safety is number one.

Speaker Change: Into a point that helps you be more on time, rather than a point that creates delay.

Speaker Change: So that's you need to control the hubs if you rely on third party hubs your incentives between the herb operator in a shipping line destroy the ability that you have to deliver what we deliver to so I think that's that's a good reason why some of them are saying they don't believe in it because they can't do it the second is.

Vincent Clerc (A.P. Moller: The second thing that we have is it costs actually a lot of work and money to redo the network, redo all the berthing lineups in the US, in Europe, in the Mediterranean, so that we can cater for this new service that arrives certainly at different times. I need to be sure that it's not only safe for the first time that I send it, but I have reasons to believe that this is going to be safe for the foreseeable future. Because if it's not, and I risk to flip back three months, six months, even a year later, to go back to the Cape of Good Hope, that's $hundreds of millions of cost to us, maybe more. It's huge disruptions to the customers. I think I'm engaging with customers a lot.

Speaker Change: I think that it's an industry that has not invite invented anything.

Speaker Change: Fundamental in quite a long time, and therefore, there was quite a lot of caution when somebody try something new as to whether he is going to work or not and that's a bit the default position and I don't think it's a great.

Speaker Change: It's a great position, but that's that's that's.

That's the position that they have today, it's a matter of opinion, whether whether Gemini is is better or not the good thing is.

Speaker Change: On the second half of the year, we will we will show it in fact and it will be a matter of fact, whether it's better or not we will sit on the reliability and we would see it on the on the cost and I think for US now you know we worked on it for three years, we started to get into it. So we can't wait to to look at the results in the second part of the year.

Vincent Clerc (A.P. Moller: They're all eager to go back, but they all have always that caveat, we don't want to go and flip-flop back and forth. You get one shot at going through Suez. I think you need to look at the situation on the ground and say, are the Houthis either no longer capable or what gives them the willingness to attack is no longer there. That's one of the two things that would need to happen. It's either a full degradation of their capabilities, or there is some type of deal, permanent deal on Gaza and permanent deal between the US administration and Iran that takes away the incentive for them to do something like that. I think it will be safe for us to go back.

Speaker Change: I think it's the most innovative thing that has happened in this space in.

Speaker Change: In a in a couple of decades.

Speaker Change: Yeah.

Speaker Change: Next question comes from Alex Irving from Bernstein. Please go ahead.

Alex Irving: Hi, good morning, gentlemen.

Speaker Change: My question is.

Speaker Change: What needs to happen for you to start reshaping your network.

Speaker Change: Wed see service charges. Please.

Speaker Change: So.

Speaker Change: It is.

Speaker Change: Just be clear on there are two things that I'm looking for.

Speaker Change: First it needs to be safe, because I have colleagues that I need to send in a in the red Sea onboard those ships and I want to make sure I don't put them in harm's way in harm's way when when I said when I sent him through that.

Alexia Irving: Clear. Thank you.

Alex Irving: Clear. Thank you.

Operator 2: The next question comes from Ulrik Bak from SEB. Please go ahead.

Operator: The next question comes from Ulrik Bak from SEB. Please go ahead.

Ulrik Bak: Yes. Hello, Vincent, Patrick. Thank you for taking my question. It's on the ocean volume growth. In Q3 and Q4, your growth has been between 0% and 1%, while market growth has been 4% to 5%, according to my figures. Now you state that you want to grow in line with the market in 2025. So considering that your order book is lower than most of the top ten carriers, how will you achieve, you know, bridging that gap between the underperformance in Q3, Q4, and 2025? Thank you.

Speaker Change: It's true for our colleagues. It's true also as an expectation for all the cargo and the assets that that we have so safety is number one the second thing that we have is it cost actually a lot of work and money to redo the network redo all the Berthing lineups in the U S and in Europe in the Mediterranean So that we can.

Speaker Change: Kate are for this new service are that arrived suddenly at different times.

Speaker Change: Times.

Speaker Change: I need to be sure that its not only save for the first time that I send it but I have reasons to believe that this is going to be safe for the foreseeable future.

Vincent Clerc (A.P. Moller: Ulrik, it's quite simple. It's Gemini. Gemini is, because it increases the asset turn, it frees ships that you can dedicate to growth, while maintaining a higher asset turn. As I mentioned before, from a utilization perspective, with the old way of designing network, we're pretty much at the max of what we can do. Thanks to Gemini, we're freeing the possibility for us to grow in line with market for the coming years.

Speaker Change: Because if it's not in our risk to flip back.

Speaker Change: Three months six months, even a year later to go back to the Cape of good hopes that hundreds of millions of dollars of cost to us maybe more and it's huge disruptions to the customers and I think I'm engaging with customers a lot. They're all eager to go back but they are all have always that caveat, we don't want to go and flip flop back and forth you get one shot at going.

Speaker Change: Through our through Suez and therefore, I think you need to you need to look at the situation on the ground and say Aldo who is either no longer capable or is this what gives them. The willingness to attack is no longer there. That's one of the two things that would need to happen. So it's either a full the degradation of.

Ulrik Bak: Perhaps just to follow up then. In the contracting season you've had on the Asia-Europe, is that also talking supporting your view that Gemini will be, you know, increasing the growth for you?

Vincent Clerc (A.P. Moller: Yes.

Speaker Change: Their capabilities or there is some type of deal permanent deal on Gaza and permanent deal between the U S administration on Iran that takes away the incentive for them to do something like that and then I think it will be safe for us to go back.

Ulrik Bak: Okay. That's very clear. Thank you.

Operator 2: Next question comes from Parash Jain from HSBC. Please go ahead.

Operator: Next question comes from Parash Jain from HSBC. Please go ahead.

Parash Jain: Hi, thank you for taking my question. I have two, if I may. With respect to your 6% logistics business margin, in terms of the building blocks, is it much to do with the self-help with respect to looking at your cost? Or you think it will still depend upon the market dynamics in your logistics supply chain? Second question, with respect to Gemini, while it certainly will free up your main vessels in terms of the turnaround, who would be responsible for the feeder vessel network? Would it be only two of you, or you'll rely on the independent players to do the heavy lifting with respect to connecting the cargoes to your hub network? Thank you.

Speaker Change: Thank you.

Speaker Change: The next question comes from Eric back from F. E. D. Please go ahead.

Speaker Change: Yes Hello.

Eric: Thank you for taking my question, it's on the Ocean volume growth in Q3 and Q4.

Speaker Change: Between zero and 1% while the market.

Speaker Change: 45% According to my figures.

Speaker Change: Now you state that you want to grow in line with the market in 2025.

Speaker Change: So considering that your order book is lower than most of the top 10 carriers.

Speaker Change: How will you achieve you know.

Speaker Change: Bridging that gap between the on the performance in Q3 Q4 and in.

Vincent Clerc (A.P. Moller: Yeah, thank you. I think for to your first questions, the big delta, as we've mentioned, throughout the year is on what we call Fulfilled by Maersk. It's both. We need to continue the progress that we have made in contract logistics, and we need to continue the progress that we have made in especially Middle Mile. The big problem that we have there is a problem of asset utilization and density. We have too much white space still in our warehousing network. We need to. This is why actually we don't want to say only margin and then growth, because the growth is when we target it in the right place, is part of the solution.

Speaker Change: 25, okay.

Speaker Change: So we'll make that its quite simple as Gemini.

Speaker Change: Germanize, because it increases the asset turn it frees ships.

Speaker Change: That you can dedicate to growth.

Speaker Change: While maintaining a higher asset turn so as I mentioned before from a utilization perspective with the current with the old way of designing network, we're pretty much at the Max of what we can do thanks to Jim and I were freeing the possibility for us to grow in line with market for the for the coming years.

Speaker Change: Yeah.

Speaker Change: Just a follow up then so in the contracting season, you've had on the Asia Europe that also talking.

Vincent Clerc (A.P. Moller: We need to utilize the white space that we have and bring that white space percentage significantly down. That's one big part. Then the other part, our ground freight. It's actually the density that we have in the network of freight stations that we have across North America is way too low. Here, too, we need to increase density and increase traffic so that we get higher utilization of our assets and higher utilization and higher density on the loads, the trucks that move around. A lot of it now is really focused on Fulfilled by Maersk, Transported by Maersk, and Managed by Maersk. We are at the margins that we need to be.

Speaker Change: In your view, Jim and I will be Oh, increasing.

Speaker Change: Increasing the growth for you.

Speaker Change: Yes.

Speaker Change: Okay, that's very clear thank you.

Speaker Change: Next question comes from Pavel <unk> from HSBC. Please go ahead.

Speaker Change: Thank you.

Speaker Change: I have two.

Speaker Change: And with respect.

Speaker Change: Logistic business margin.

Speaker Change: In terms of the building blocks is it much to do it.

Speaker Change: And with respect to looking at your costs.

Vincent Clerc (A.P. Moller: In Fulfilled by Maersk, we need to continue the progress that we have made this year. That's the part that needs to get us and lift us above the six. There is some cost items that we need to address, but the biggest building block there is higher asset utilization and more density across the network. For Gemini, I want to be clear, most of what you call the heavy lifting of the shuttles, it will be executed by us. As we have done always in the past, there is a few corridors and a few services where we rely on third-party feeder service providers.

Speaker Change: It's going to depend upon the market dynamics in logistics.

Speaker Change: And second question is with respect to Gemini.

Speaker Change: Yeah.

Speaker Change: And even free up that you are in terms of the timing at all.

Speaker Change: Uh huh.

Speaker Change: For the for the network.

Speaker Change: There are only two of you.

Speaker Change: You rely on.

Speaker Change: And then to do the heavy lifting with respect to connecting the carloads.

Speaker Change: Thank you.

Speaker Change: Yeah. Thank you I think for to your first questions. The Big Delta as we've mentioned throughout the year is on what we call fulfilled by Maersk. So it's both we need to continue the progress that we've made in contract logistics and we need to continue the progress that we've made in especially middleman. The big problem that we have there is a problem of <unk>.

Vincent Clerc (A.P. Moller: It was true in the old network. It will continue to be true in the new one, and we have actually worked very strategically with them on service level agreements and so on, so that what they deliver to us, we can expect it to be at the same level of quality as what we can produce ourselves.

Speaker Change: Asset utilization and density so we have too much white space is still in our in our warehousing network. So we need to this is why actually we don't want to say.

Parash Jain: Okay. That's very helpful. Thank you, and have a good day.

Operator 2: The next question comes from Jake Lacks from Wolfe Research. Please go ahead.

Operator: The next question comes from Jake Lacks from Wolfe Research. Please go ahead.

Speaker Change: Only margin and then growth because the growth is when we targeted in the right place is part of the solution. So we need to have to utilize the white space that we have and bring that white space a percentage significantly down.

Jake Lacks: Hey, good morning. Thanks for taking my question. So as things currently stand, do you see any risk of demand disruption from US tariffs on China? It didn't really sound like it based on your comments around Transpacific expectations, but just wanted to get your thoughts there. Do you see any pull-forward ahead of the tariffs in the near term and port labor, or has demand on the trade lane held pretty steady in your view?

Speaker Change: That's one big part and then the other part our ground freight it's actually the density that we have in the in the network of freight stations that we have across North America is way too low. So here too we need to increase density and increased traffic, so that we get higher utilization of assets and higher utilization and.

Vincent Clerc (A.P. Moller: From a labor perspective, I think we're past the negotiation on the East Coast has been concluded so that we don't expect more disruptions. As far as we can see, we're not expecting any major disruption. With respect to tariffs, I just want to start by saying that nobody knows at this stage what's gonna happen on the tariff front. This what I'm gonna say here is, of course, with a pinch of salt. The way customers are thinking about this, and the reason why they're very strong still on when I look at how many purchase order have been placed for the coming months, despite the talks on tariff, is two things.

Speaker Change: And higher density on the loads are.

Speaker Change: The trucks that that move around so a lot of it now is really focused on FBA on transported by Maersk and false and managed by Maersk.

Speaker Change: We are at the margins that we need to be in fulfilled by Maersk, we need to continue the we need to continue the progress that we've made just this year and that's the part that needs to get us in lift us above the six and it is.

There is some cost items that we need to address but the biggest building block there is higher asset utilization and more density across our across the network.

Speaker Change: For Jim and I want to be clear most of what you call. The heavy lifting of the shuttles it will be executed by us.

Speaker Change: As we have done always in the past there is a few corridor is on a few services, where we rely on third party feeder.

Vincent Clerc (A.P. Moller: They think that the new administration came in because the American people was tired with inflation, and therefore that they are very aware that whatever they do, reigniting a bout of inflation is going to be very detrimental politically, also. That creates a lot of confidence among retailers and companies that they can continue to count on high level of consumption because that's what has been promised to the US consumer. Now, there are some tariffs that are implemented.

Speaker Change: The service providers.

Speaker Change: It was it was true in the old doesn't work it will be continue to be true in the new one and we have actually work very strategically with them on service level agreements and so on so that's what they deliver to us.

Speaker Change:

Speaker Change: We can expect it to be at the same level of quality as what we can produce ourself.

Speaker Change: Yeah.

Speaker Change: Okay, that's very helpful.

Speaker Change: Thank you.

Speaker Change: Good day.

Speaker Change: The next question comes from Jaco blocks from Wolfe Research. Please go ahead.

Vincent Clerc (A.P. Moller: The other thing that feeds a lot for our customers is the fact that when the first round of tariffs were implemented under the first Trump administration, actually Forex movements between the renminbi and the dollars compensated for the tariff so that in U.S. terms, the US consumer could basically pay the tariff without feeling it in U.S. terms when he was going to his department store to buy the goods. I think there is some expectations that as long as the tariffs are measured and as long as the administration stays true to the fact that they're gonna do something on tariff, but with an eye on inflation, that things will be okay and will not have a huge impact on volume.

Jaco blocks: Hey, good morning, Thanks for taking my question.

Jaco blocks: So as things currently stand do you see any risk of demand disruption from U S tariffs on China.

Jaco blocks: It sounds like it based on your comments around traffic.

Jaco blocks: Mutations, but just wanted to get your thoughts there and then.

Jaco blocks: Did you see any pull forward ahead of the tariffs in the near term and port labor as demand on the trade Lane held pretty steady in Europe yet.

Jaco blocks: So from a from a labor perspective, I think where are the the negotiation on the east coast has been concluded so that we don't expect more disruption and as far as we can see we don't plan on any major or we were not expecting any major disruption with respect to tariffs I just want to start by saying.

Vincent Clerc (A.P. Moller: Of course, if things turn completely and somebody slaps 60% tariffs overnight, then this will have an impact. That is not what seems to be the dominant scenario so far. We're seeing actually a more measured implementation and also a more measured response from China, which leads us to believe that at least so far, there is some balance. That, of course, is subject to a lot of things neither you nor I can really forecast accurately, I think.

Speaker Change: That nobody knows at this stage, what's going to happen on the tariff front. So is this a what.

Jaco blocks: I'm going to say here is of course with a pinch of salt.

Jaco blocks: But the way customers are thinking about this and the reason why they are a very strong still on when I look at.

Jaco blocks: How many purchase order has been placed for the next for the coming months. Despite the talks on tariff is is two things do you think that that the new administration came in because the American.

Jake Lacks: Very clear and helpful. Thank you.

Jaco blocks: People it was tired with inflation and therefore that they are very aware that whatever they do reigniting about inflation is going to be very detrimental politically also and that that creates a lot of confidence amongst retailers and <unk> companies that they can that they can continue to count.

Operator 2: The next question comes from Muneeba Kayani from Bank of America. Please go ahead.

Operator: The next question comes from Muneeba Kayani from Bank of America. Please go ahead.

Muneeba Kayani: Yes, good morning. Just on your balance sheet, and as you've thought about the $2 billion buyback, and you said that you expect to continue that beyond this year, kind of how do you see your balance sheet evolving at the end of this year? In the scenario that 2026 is tougher, what are the buffers in there as you've thought about the balance sheet over not just this year, but beyond that?

Jaco blocks: On high level of consumption because that's that's what that's what has been promised to the U S. Consumer now there are some tariffs that are implemented.

Jaco blocks: The other thing that that field feeds a lot for for our customers is the fact that when the first round of tariffs were implemented.

Vincent Clerc (A.P. Moller: Yeah. Thanks, Muneeba. Indeed, we do have a balance sheet today which is even stronger than it was last year. While we are actually more confident in terms of the impact of imbalance of supply and demand in Ocean, that makes us more confident that actually we will be able to continue to return cash looking past 2025, so also 2026 and onwards in the scenarios that we have today because we can indeed have a necessary buffer to absorb a bit of volatility in Ocean, which will come. We just talked about macroeconomics, which none of us can really forecast precisely now. Overall, the demand is solid.

Jaco blocks: Under the first Trump administration actually Forex movements between the remember in the dollars compensated for the tariffs so that in in U S term the U S consumer could basically pay the tariff without feeling it in our U S term when he was going to as department store.

Jaco blocks: Two two by two by the goods and I think there is some expectation that as long as the tariffs are measured and as long as.

Jaco blocks: The administration stays true to the fact that theyre going to do something on tariff, but with an eye on inflation that things will be okay, and will not have a huge impact on volume.

Jaco blocks: Of course, if things turn completely in somebody's lapsed, 60% tariffs overnight. Then then this will have a M.

Vincent Clerc (A.P. Moller: There is a way out of the supply-demand situation, which is more benign than we thought a year ago. Therefore, I would say we do have the strengths to both continue to return cash to shareholders and to invest in growth, whether it's organic growth, and as Vincent earlier mentioned as well, when we are ready and have the right opportunity as well in logistics. From that point of view, I think we are in a good position now to continue and accelerate as well the implementation of our strategy, right? You have to see the balance sheet is strong, and actually we just, you know, had the third year best ever.

Jaco blocks: An impact but that is not the what seems to be the dominant scenarios, so far and we're seeing actually a more measured.

Jaco blocks: Implementation and also our more measured response from from China, which leads us to believe that at.

Jaco blocks: At least so far there is some balance but that of course is subject to a lot of things. Neither you and all I can really forecast accurately I think.

Jaco blocks: Very clear and helpful. Thank you.

Speaker Change: The next question comes from when you back <unk> from Bank of America. Please go ahead.

Vincent Clerc (A.P. Moller: We have Ocean, which runs operationally in a new dimension with Gemini, which we talked about a lot during the call. We have L&S, which actually is starting to perform and generate cash, and we have Terminals, which is actually at best ever. The operational picture is actually pretty good, and there's clear progress here in the implementation of our strategy.

Speaker Change: Yes. Good morning, So just on your balance sheet and as you've talked about the 2 billion buyback and you said that you expect to continue that beyond this year.

Speaker Change: How do you see your balance sheet evolving at the end of this year and listen to audio that 26 is tougher like what are the buffers isn't bad as he was.

Muneeba Kayani: If I can follow up, when do you think the industry would react? Would, you know, you have this estimate around scrapping, idling, slow steaming. What is needed to trigger that response from the industry?

Speaker Change: Talk about the balance sheet the way not just this year, but beyond that.

Speaker Change: Yeah, I think so many vessels or so indeed, we do have our balance sheet today, which is even stronger than it was last year, while we actually more confident in terms of the.

Vincent Clerc (A.P. Moller: Muneeba, that's an inexact science, but I can say that, you know, as Patrick said, because we have visibility basically 4 to 5 years out on the supply side with the order book of the yard, and because the delivery of new ships was very front-loaded in 2024 and 2025 and actually quite low in the years that follow, we think that the situation actually is much more benign than what it was that we were facing last time, because we have absorbed quite a bit of that capacity, and because also the market has been much more resilient. The demand side has been much more resilient than we have. Now, there was one other slide.

Speaker Change: The impact of imbalance of supply and demand and ocean that makes us more confident that actually we will be able to continue to return cash are looking past 2025. So also 96 and onwards in the scenarios that we are that we have today, because we can indeed have unnecessary.

Speaker Change: Ari buffer to absorb a bit of volatility in ocean, which will come we just talked about macroeconomics, which none of us can really.

Speaker Change: Forecast. Besides you know, but overall the demand is solid there is a way out of the supply demand situation, which is a.

Speaker Change: The more benign than we thought a year ago.

Speaker Change: And therefore, I would say, we do have the strength to both continue to return cash to shareholders and to invest in growth, whether it's organic growth and has that been scenario mentioned as well when we are ready and have the right.

Vincent Clerc (A.P. Moller: There's still 2 million capacity coming, and there's about 1.5 that will eventually be freed when we go back through the Suez. There is also pent-up demand for scrapping. There is a lot of ships that can be returned. I think the tools are there. But you should probably expect 2 to 3 bumpy quarters when that happens, because it takes a bit of time for the leasing contract to expire and being able to return tonnage. It takes a bit of time to actually act on some of the scrapping, to secure the positions and so on.

Speaker Change: Opportunity as well and in logistics so from that part of it I think we were we are in a good a good position now to.

Speaker Change: To continue and accelerate.

Speaker Change: The implementation of our strategy right you have to see the balance sheet is strong and actually we just had the third best ever we have ocean, which runs operationally in a new dimension with Gemini, which we talked about a lot during the call. We have elements, which actually is starting to perform and generate cash and we have terminals, which is actually our best ever so the operational.

Vincent Clerc (A.P. Moller: I think the outlook is much more benign if you take, you know, the 3 to 5-year view, but it doesn't mean that there won't be a couple of quarters here and there where things will get a bit more bumpy. That is as we deal with some of the supply shock, for instance, from sailing back through Suez. I've not factored in here any type of demand shock back to the previous questions on if there is like a big tariff impact and so on. That we would also have to deal with through the same measures, like we have done at the beginning of COVID, like we have done before.

Speaker Change: Picture is actually pretty good and there's clear progress here in the implementation of our strategy.

Speaker Change: If I can follow up when when do you get the industry would react.

Speaker Change: You'll have this estimate around scrapping.

Speaker Change: Slow steaming, but it needed to trigger that response.

Speaker Change: Okay.

Speaker Change: When you bet, that's a that's an inexact science, but I can say that.

Speaker Change: <unk>.

Speaker Change: As Patrick said, because we have visibility basically four to five years out on the on the supply side with the order book of the yard and because the delivery of new ship was very frontloaded in 'twenty, four 'twenty, five and actually quite low in the years that the that that follow.

Operator 1: Ladies and gentlemen, in the interest of time, that was the last question. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Operator: Ladies and gentlemen, in the interest of time, that was the last question. I would now like to turn the conference back over to Vincent Clerc for any closing remarks.

Vincent Clerc (A.P. Moller: Thank you everyone for all of your questions. I would like to make a few final remarks before wrapping up the call. We closed the year with a really strong finish in Q4, and 2024 marks the best financial year in the history of Maersk outside this pandemic-fueled boom that we had in 2021 and 2023. Overall, we saw strong business performance across all segments on the back of strong demand and operational progress. Specifically, we saw tangible progress in the form of margin improvement in Logistics & Services, strong operation in Ocean, as we responded decisively to the Red Sea disruption and captured strong market demand and high performance in Terminals as well, confirming the new normal that we had set for ourselves at the end of the previous year.

Speaker Change: We think that the situation actually is much more benign than what it was that what we were facing last time, because we have absorbed quite a bit of that capacity.

Speaker Change: And and because also the market has been much more resilient the demand side has been much more resilient that we have now.

Speaker Change: There was one of the slides, there's still 2 million capacity coming in there is about one and a half that will eventually be freed when we go back through our through through this through the Suez. There is also a pent up demand for scrapping there is a lot of ships that can be return. So I think the tools are there, but you should probably expect.

Speaker Change: Two to three bumpy quarters.

Speaker Change: When that happens because it takes a bit of time for the leasing contract to expire and being able to return tonnage. It takes a bit of time to to to actually act on some of the scrapping to secure the positions and so on so.

Vincent Clerc (A.P. Moller: The financial performance in 2024 translates into a proposed dividend per share of DKK 1,120 for 2024, while our wider financial position and outlook for 2025 support the reinstatement of the share buyback program of approximately $2 billion over the next 12 months. Overall, our strong business, our agility to respond to changes, and our financial position makes us confident that we can continue to progress and grow further in 2025 at a time where resilient supply chains are more important than ever for our customers. We also look forward to seeing many of you in our upcoming roadshows and investor conferences. Thank you for your attention, and see you soon. Bye-bye.

Speaker Change: I think the.

Speaker Change: Outlook is much more benign if you take the three to five year view, but it doesn't mean that there won't be a couple of quarters here and there where things will get a bit more bumpy that is as we deal with some of the supply shock for instance from from selling back through through Suez I'm not I have not.

Speaker Change: Factored in here any type of demand shock back to the previous questions on if there is like a big tariff impact.

Speaker Change: Impact and so on that that we would also have to deal with through the same measures like we have done at the beginning of Covid like we have done before.

Speaker Change: Yeah.

Speaker Change: Ladies and gentlemen in the interest of time that was the last question I would now like to turn the conference back over to Vincent Clark for any closing remarks.

Vincent Clark: Thank you everyone for all of your questions I would like to make a few final remarks before wrapping up the call.

Vincent Clark: We closed the year with a really strong finished in the fourth quarter and 2024 marks the best financial year in the history of Maersk outside that this pandemic fueled boom that we had in 'twenty, one and 'twenty three.

Vincent Clark: Overall, we saw strong business performance across all segments on the back of strong demand and operational progress.

Vincent Clark: Specifically, specifically, we saw tangible progress in the form of margin improvement in logistics and services strong operation in Ocean has responded decisively to the Red Sea disruption and captured strong market demand and high performance and terminal as well confirming the new normal that we had set for ourselves at the end of the previous year.

The financial performance in 2024 translates into a proposed dividend per share of 1100 20 kroner as for 2024, while our wider financial position and outlook for 2025 support the reinstated a reinstatement of the share buyback program of approximately $2 billion over the next two.

Vincent Clark: <unk> months.

Vincent Clark: Overall, our strong business, our agility to respond to changes and I'll finish out financial position makes us confident that we can continue to progress and grow further in 2025 at a time, where resilient supply chain are more empowered more important than ever for our customers.

Vincent Clark: We also look forward to seeing many of many of you in our upcoming Roadshows and investor conferences. Thank you for your attention and see you soon bye bye.

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