Søren Skou – Chief Executive Officer Jakob Stausholm – Chief Financial Officer Vincent Clerc – Chief Commercial Officer Claus Hemmingsen – Vice Chief Executive Officer and Head of our Energy Division Søren Toft – Chief Operating Officer

Jorgen Bruaset – Nordea Markets Robert Joynson – Exane Lars Heindorff – SEB Casper Blom – ABG Edward Stanford – HSBC Dan Togo – Handelsbanken Capital Markets Neil Glynn – Credit Suisse Søren Skou: Good morning, everybody. Welcome to A.P. Moeller-Maersk result announcement for 2017. My name is Søren Skou. I’m the CEO. I’m joined here today by Claus Hemmingsen, our Vice CEO and Head of our Energy Division, Jakob Stausholm, our CFO; Vincent Clerc, our Chief Commercial Officer and Søren Toft, our Chief Operating Officer. So, let me start by providing you with an overview and then we’ll go into the details. So first of all, I would like to start by saying that 2017 was a year where we made solid progress on our strategic journey. We sold Maersk Oil. We sold Maersk Tankers. We sold the remaining part of our stake in Dansk Supermarked Group. We sold Mercosul, a Brazilian cabotage carrier. And we acquired Hamburg Süd in total around $14 billion worth of M&A transactions. And with Maersk Oil and Maersk Tankers, the company will lose around $5.5 billion worth of turnover. And with the acquisition of Hamburg Süd, we are getting more or less the same amount of turnover. We have now reclassified both Maersk Drilling and Maersk Supply Service as businesses held for sale. And we are working hard to find solutions for how to separate Maersk Drilling and Maersk Supply during 2018. We expect to close the Maersk Oil transaction, as previously announced, this quarter. And as far as our Hamburg Süd transaction, as you all know, we closed on the 1st of December. And we are on track with the integration and we are reconfirming our targets for synergies of $350 million to $400 million by next year. We have progressed on the integration of our transport logistics businesses. We are today disclosing that we believe we captured just over $100 million of synergies last year towards our target of $600 million by 2019. Finally, we have also made significant progress on our digital transformation. Many of you were present at our Capital Markets Day last year where we provided with a lot of details on our transfer for digital transformation. When you join us, hopefully, in 11 days at our Capital Markets Day this year, you will see a number of specific digital products that we have actually launched and are gaining traction with customers. In terms of our financial results, I have to say it’s a coin with 2 sides. We have made and delivered solid improvements in the underlying results in 2017 compared to a weak 2016. We grew revenue by $3.7 billion to $31 billion, our T&L business has made a NOPAT of $1 billion, up from $100 million in 2016. We grew operating cash flow by well over $1 billion and therefore made good improvements. We were not able to deliver on the guidance that we set out at this time last year of making more than $1 billion improvement in Maersk Line, mainly because of – because of the cyber attack that we had in June and impacting the third quarter quite a lot by $250 million to $300 million. But other than that we were pretty much on plan. When that is being said, we also have to recognize that the absolute level of profitability is not where we want it to be. We cannot be satisfied with that. And we could also not be satisfied with our relative level of performance. We do believe that we in 2018 will do better and that’s why we are guiding a higher result in 2018 than we had in 2017. Finally, on the financials, in my view, the fourth quarter had a couple of positive elements that I would like to highlight. First of all, Maersk Line grew volumes by 3.6% that is probably in line or slightly better with the market growth. And I take that as a sign that there is no negative long-term impact from the cyber attack from our customers. So that’s good. And I also want to highlight that Maersk Line in the fourth quarter were able to deliver unit cost at $1,913 per FFE which is very close to the all-time low level we reached in 2016 and a very, very strong improvement of more than 6% over the third quarter where our unit costs were impacted by the cyber attack. So with those few words of introduction, I would like to hand over to Jakob Stausholm, who will take you through the key numbers.

Thank you. As Søren said, when a company goes through significant changes, so does the accounts. And just to recap, to be sure of we look at the same numbers, in Q3 we took Maersk Drilling, Maersk Oil and Maersk Tankers to the line of discontinued businesses. In Q4, we have taken Maersk Supply Services to discontinued businesses. And we have closed the deal of Maersk Tankers and Dansk Supermarked during Q4 and hence they are out of our accounts. Now, in my view it actually should provide more clarity now, because it basically means that the continued business is our transport and logistics business all the way down to a NOPAT. But of course the financial items related to all parts of A.P. Moller - Maersk, something that should go down significantly when we finalize the journey of separation of energy. Moving on to Chart Number 7. If we look at the revenue – the profit and loss here, as Søren already have said, we are growing the top line. One of the challenges to really look at the numbers here is that we have 1 month of Hamburg Süd result in. So Q4 year-on-year goes up by 16%. If you exclude the acquisitive impact from Hamburg Süd, it goes up by 8%. And we are growing the top line and we are – and that is a combination of growth across the businesses and specifically to higher freight rates in Maersk Line. Now if you look at EBITDA where our main focus is, then it’s up by 45%. Looks good, but have to admit it is from a low point in Q4 of 2016. If you look at the reported profit and loss and the underlying profit, happy to see that we don’t have too many special items here in the quarter. We do have though a few pluses and minuses and we’re disclosing that in our results that we have integration cost to the tune of $59 million from Hamburg Süd, but we also had a gain on the sale of Mercosul and a few other gains. Overall, it basically nets out. Moving on to the next page of our cash flow, we had a strong cash flow in the fourth quarter. I have though to say – to remind you of what I said on the third call – third quarter call, I think I asked you not to look too much into Q3 cash flow because it was heavily impacted by the cyber attack. The good news is that we have got back our DSO, our receivable levels in Maersk Line in Q4. And that has led to a fairly strong cash flow in Maersk Line in the fourth quarter. Our days sales outstanding in Maersk Line is now back at or below the pre-cyber attack levels. If you look at our cash – capital expenditure, it is a very high number but that’s of course mainly due to the fact that we report Hamburg Süd that has an impact of $4.2 billion and then opposite to that we sold Dansk Supermarked, $0.9 billion. But – so you could basically say out of the $4.0 billion, $3.1 billion is related to those 2 transactions. So the underlying capital expenditure is $0.9 billion. It’s at a high number – high level. We did receive 2 new major vessels in the fourth quarter. And if you look at the free cash flow, if you just adjust for the 2 major transactions, Hamburg Süd and Dansk Supermarked, then actually in the fourth quarter we had a positive cash flow to the tune of $0.2 billion for our continuing businesses. Moving onto Page Number 9. If you look at our net debt, you will see that it naturally went up due to the acquisition of Hamburg Süd from the third quarter to the fourth quarter. We hit a level of $14.9 billion. That is obviously going to go down, and fairly quickly because we do expect Maersk Oil to close soon, and that in itself will have a significant impact at the overall level. And we also expect other structural solutions to further reduce the overall debt of A.P. Moller - Maersk. But we do recognize the tough market conditions and our overall profitability. So capital discipline is critical to us. And although we had high levels of capital in 2017 mainly related to years back investment decisions of on new vessels and new terminals. You can see that we keep on reducing the contractual commitments. And at the end of the year, it stood at $3.9 billion. We have reduced it every quarter the last 4, 5 quarters and we have reduced it by $1.5 billion compared to end of last year. We will dive deeper into capital expenditure and provide you an update at the upcoming Capital Markets Day. Moving on, Page 10. I didn’t intend to talk about it. But here you see the consolidated accounts and you see the total accounts both from continuing operation and discontinued operations. We obviously recognize, Søren said that as well, that the profitability or ROIC is still too low, but we are, and I think all the measures show, that we are on a recovery journey and that hasn’t stopped yet. Moving on to Page 11. when you look at the full-year numbers, we have to first go back to how did we guide. And we did guide that the T&L business is – which on all the continuing businesses would have a NOPAT around $1 billion. In fact, we clarified the guidance from – beginning of the year we said above $1 billion, and at the end of Q3, we said around $1 billion. NOPAT is, if you look deeper into the account, at $1,015 million. So you could argue we in a way met both guidance. We still believe it was right to change it to around $1 billion. When you see the lower number here, it’s because it includes financial – financial items for the whole of A.P. Moller - Maersk, of course. Our focus is very much on EBITDA and on operating cash flow. And as you can see, we had EBITDA to the tune of $2.5 billion in 2016. We improved it by $1 billion to $3.5 billion in 2017 and that is what Søren will come back to with which we will guide upon for 2018. The operating cash flow we improved even more. We improved it from $1.3 billion to $2.6 billion, so an improvement of $1.3 billion. And I would like to highlight that I think this is quite a good result given the fact that we actually grew our business quite a lot during 2017 and therefore it can – when you have growth it’s difficult to have such a high cash conversion. But let’s dive deeper into each part of our business and I’d like to hand over to Vincent Clerc.

Thank you, Jakob. So, I think on Maersk Line, we also ended up with an improvement on underlying in line with the guidance and especially a recovery on the volumes, which as Søren mentioned, leads us to believe that there will be no longer-term impact for the cyber attack that we faced in the Q3. The volumes were up about 3.6%, not all statistics for the markets are out, but we expect the market to grow a little slower in the fourth quarter than it did in the beginning of the year and we expect that growth to land around 3%. Encouraging also our growth in the headhaul was 5.2%, which we also believe to be slightly above what the market has been doing overall. Unfortunately though, the rates have had some impacts in the course of the year from Q2, which was the highest point of the rate recovery. We’ve seen rate decreases in the different segments, especially on East-West. We had $214 decrease – we have observed a $214 decrease since the second quarter. It’s a decrease on the second quarter, but the rates are still 7.2% up year-on-year and basically the trend that we see is that due to this deceleration of the market growth, there has been some temporary pressure in the fourth quarter on freight rates as utilization levels have decreased slightly in the market. Our numbers are slightly different because we had the cyber attack in Q3 and have had a return to a higher utilization. But this is not what we expect to have seen across the market. Compounding though the impact of the decrease in freight rate on our result has been an increase in bunker costs that we’ve faced over the period. Our cost per FFE has increased about $60 year-on-year because of the increase in bunker price. And this is net of the impact of slot sales because obviously our – as we’ve talked about in the last couple of quarters, our growth in capacity exceeds our growth in volumes, not because of a reduction in utilization but because of an increased level of net slot sales to HMM and Hamburg Süd for at least two months of the quarter. So if we net this out, we get to a bunker increase per FFE in the low $60s and that has had of course an adverse impact on our profitability, and it’s one of the challenges that we are dealing with here going forward. The capacity increase, I mentioned it, it’s still driven primarily by the impact of the slot sales to Hamburg Süd and HMM but has otherwise been in line with the volume growth that we have seen. In the fourth quarter and year-on-year, we are actually closing on utilization that is similar on head haul, that’s what we had a year ago. And now I think we’ll pass it on to Søren Toft for a description on what’s happening to our cost. Søren Toft: Thank you, Vincent. And adding a few things on the cost line, then what we can say is that our cost rebounded from a very poor Q3 2017. So Q4 2017, we’re now at the same level as the record 2016 quarter four and obviously in between quarter four 2016 and quarter four 2017 the rate of exchange hasn’t exactly helped us. The excess variable costs that we observed in quarter three due to cyber are basically out of the system. Again Q4, we are back down to the lower level. We have seen an improved utilization. We are seeing some pressure on the time charter rates, mainly as a result of the idle fleet being low. We see that positively because a low charter fleet hopefully means that capacity is not easy to come by and that will help our efforts to drive revenue growth. Our fuel efficiency, I know we reported, as Vincent Clerc said, on a kilo per FFE including the capacity deployed for third parties. If we deduct that from the numbers, actually our fuel efficiency in quarter four was lower than the corresponding quarter four in 2016, slightly below the 900 kilo per FFE level. So we take some comfort in that too. We are investing money in SG&A to drive our IT and digital agenda. But obviously medium to long term, the essence is that leads to better customer satisfaction and also better efficiency for us, hence the investment. Reliability wise we rebounded from a very poor quarter four and Maersk Line is back up in near the top quartile for the fourth quarter. We are seeing, as per the normal seasonality, adverse weather here in the wintertime. But we have firm plans in place to stay a very reliable carrier in the industry. So overall, we can say that 2017 was a mixed year on cost but we have in no way given up or lost, I believe, by the way of being able to reduce unit cost in quarter four 2017 helps our confidence in that direction. If we go to the next slide, then Søren Skou already referred to it, but just a few more details in Hamburg Süd. We added Hamburg Süd 1st December, 2017 as another member of the Maersk family. We are taking over a very well-run company and a company that is serving their clients very well. You can see that we are now here presenting unaudited internal management accounts for the year 2017. And what I want to highlight is obviously the revenue based on the IFRS principles of $5.4 billion and also an EBITDA of $554 million and actually from an underlying level, EBITDA is closer to $600 million when we back in the integration cost that we have spent. So, we believe that we have taken over a strong company and we also are heartened by the fact that in this phase where Hamburg Süd are very active, we are seeing better market fundamentals for the coming year. The integration of Hamburg Süd is proceeding as per plan. We are reconfirming the $350 million to $400 million synergies by the end of 2019 and we believe we have realized very good progress to date. We have recently, two weeks ago, announced the first combined network between Asia and West Coast, Latin America, where we combined the fortunes of the two companies, providing customers really with an unrivaled product, but also a product that obviously supports our synergy case. So, overall, we are excited by this addition, but obviously in 2018, we’re going to spend a lot of our efforts in making sure that the integration is a success so that we hopefully by the end of 2018 can report a successful outcome of taking over Hamburg Süd

Yes. So, let’s move on to Page 17 on APM Terminals. And if you look at the numbers, they look quite – there are many similarities between 2016 and 2017. APM Terminals is a stable business. But I think if you dive a little bit deeper down, there are a couple of important highlights. It was a difficult starting point at the beginning of last year. And if you look carefully at the earnings, the underlying profit in every quarter, APMT has actually delivered a little better result, improved every quarter. And although EBITDA overall in 2017 is lower than in 2016, then you can actually see that the operating cash flow is higher. There is a good cash generation from APM Terminals. If you try to dive a little bit deeper around that, I think we need to start looking at the commercial traction where, as I said, the starting point was difficult from the beginning, but APM Terminals have actually been quite successful of winning – being competitive in the market and winning new business with third parties. And on top of that, we can see that collaboration between Maersk Line and APMT pays out for the help of the results of APM Terminals. So good commercial traction. And if you go to Page 18, you can also see that APMT has been on an increased growth trajectory during the year with a volume growth of 6.8% in Q4, and a full year growth of 6.5%. So growing slightly above market and actually quite significant increase from 4.2% in Q2 to 6.5% in Q3 to 6.8% in Q4. This is a very important first step on the journey for APMT to reduce its unit cost. You will see that the unit cost is flat in 2017 versus 2016, but APMT is on a journey moving towards reducing the unit cost and it is important for terminals that we are entering into 2018 with good volume growth. Let me move on and quickly go through the smaller businesses in Transport & Logistics. Damco, it can be said in short words it was a difficult, unsatisfactory year, but the positive things about Damco is that it is growing, quite significantly growing its top line. It’s winning business. But there is no doubt that the cyber impact has been by far hardest in Damco than any other places in A.P. Moeller-Maersk and therefore the recovery has also taken longer than in other units. The very, very negative cash flow is obviously unsatisfactory but it’s largely due to an increase in the days sales outstanding and that’s where the focus is right now, about collecting that so it should lead to a reversal in cash flow here in 2018. Moving on to Svitzer. I mean, we are quite proud of the results. I think it’s excellent result from Svitzer, they tick the boxes. If you look at it quarter-on-quarter, the quarterly results year-on-year, the yearly results year-on-year are up on all metrics. Top line is growing, EBITDA is growing, operating cash flow is growing and they are now reaching a satisfactory return on invested capital around 8%. What you don’t see on Chart 20 is that the capital expenditure has also been reduced. So there is now a positive – a good positive free cash flow from Svitzer. Moving on to Page 21 with Maersk Container Industries. It’s actually quite a significant turnaround. We had some ideas that we could do something but the impact is exceeding our expectations. It’s a combination of synergies, better- run business and also a better market. Revenue is twice as big as previous years and EBITDA is up $118 million and you basically turned return on invested capital from minus 13% to plus 13%. So the trick now is to – not so much about – there is no further turnaround, but to keep Maersk Container Industry as a profitable industry. But let me now hand over to Claus for the energy businesses.

Thank you, Jakob. And let me make a few comments on the energy businesses. Undoubtedly, the markets on Maersk Drilling and Maersk Supply Service have been tough also in 2017. However, we did see the oil price improving throughout the year and we did see our oil company customers making profits. We also saw an increase in tender activity during the year, which continued into the fourth quarter. I think it’s noteworthy that Maersk Drilling successfully signed four new contracts during the fourth quarter, adding 3,867 rig days and no less than $873 million to the backlog. Maersk Drilling reported a net profit of $98 million, which was positively impacted by the reversal of depreciation as we moved it as a discontinued business. However, it was also negatively impacted by rigs being idle and the day rates being lower. The free cash flow in fourth quarter amounted to $234 million, which was also impacted by the sale of the Egyptian Drilling Company, which came in at $100 million. If you move to Slide 24, not a lot of comments to add to that. But it was gratifying to see Maersk Drilling coming out of the fourth quarter with a revenue backlog of $3.3 billion and a contract coverage of no less than 63% of 2018. You’ll also note the high uptime and you will note that we took delivery of the last rig in the new building program so we can see the final elements of the large CapEx in Maersk Drilling. Turning to Page 25. Maersk Supply Service reported a net loss of $200 million, also negatively impacted by impairments of $180 million towards the end of the year and the market conditions continued to be difficult. On the positive side, we also see Maersk Supply Service successfully adding new contracts to the backlog and they also successfully continued to make inroads in their new strategy to expand their service offerings, including, for instance, into the decommissioning space. So, although still tough, some traction on the commercial side. Let me just add one comment on Maersk Oil. Søren Skou already mentioned it that we expect the transaction to close in the first quarter. But I just want to remind you that we are still exposed to the oil business and you would probably have taken note of the total shares having increased in value so that we at this stage are $450 million ahead of the closing – of the value when we signed the deal. And then my final comment, as usual, is that we will get back to you as soon as we know something for Maersk Drilling and Maersk Supply Service. We do expect to find structural solutions in 2018. However, we will announce those as we rank them. Thank you. And then over to you, Søren Skou. Søren Skou: Thank you, Claus. And before we take questions, just briefly on guidance. As I’m sure most of you have noticed by now, we have decided to guide on one bottom line only. We are doing that because we are quickly moving towards becoming a focused and integrated global container logistics company, being one company, so to speak, and therefore we believe it’s right to guide on EBITDA. We will provide you with more color on this and on the financial disclosures in general when we meet at the Capital Markets Day on the 20th of February. Guidance for next year is a result – underlying profit above 2017 and we expect to deliver an EBITDA in the range of $4 billion to $5 billion against $3.5 billion in 2017. So with that, we complete presentation and we’ll be ready to take questions.

[Operator Instructions] And the first question comes from the line of Jorgen Bruaset from Nordea Markets. Please go ahead, your line is open.

Thank you, very much. A few questions from my side. So first question is on the guidance for 2018. Could you please try to give some – I’m guessing that you won’t give us the full bridge as you will save that for the CMD, but try to give us some knowledge on your base assumptions for the guidance for 2018? So just your thoughts on what to expect at least on global demand for 2018 would be very helpful. Thank you.

Jorgen, it’s Jakob. Thanks for the question. Yes, this is of course the first time we are guiding on EBITDA. I think it’s some very simple math. First of all, I would say we guide in a wide range. It is hugely complex to give a narrow guidance for the year here just before we have finalized the annual contract negotiation and Chinese New Year. We are hugely exposed to our line of business that has volatility. But if you look at it, we made $3.5 billion of EBITDA last year. We have today disclosed for the first time ever financials for Hamburg Süd. You will see that there is EBITDA – pro forma EBITDA of $550 million and then there’s a little bit of restructuring. So there is almost $600 million of EBITDA from Hamburg Süd. You add that, you get to just above $4 billion, we say $4 billion to $5 billion. You could of course say we had a cyber attack, that’s another $300 million. But we really feel that it is the right way of thinking. We want to improve the business but we also have to be honest about the fact that there are volatility. We have a number of measures in place why we think the business would do better this year. But at this stage, we keep the wide range. But for me there are three things; there are last year’s result, Hamburg Süd addition and the cyber impact. And of course in 2018, Søren alluded to it many times, we are working hard on integrating and that means that we will benefit of getting more synergies from T&L integration and of course synergies from Hamburg Süd.

Okay, thank you. Just following up on that. So guided for the $350 million to $400 million in synergies from Hamburg Süd in 2019. Should we expect to see some of that materializing already in 2018? That’s the first question. And also, we have realized $100 million in T&L synergies in 2017. Is that sort of – is that the level you’re expecting to be at in 18 months going into the new strategy? And should we assume that sort of remaining synergies on T&L is linear or is it going to be more back-end loaded as suggested by 2017 level? Thank you.

Yes, I think in terms of synergies, we have in total of almost $1 billion by 2019 between $600 million on T&L and $350 million to $400 million on Hamburg Süd. And obviously we expect and hope and we’ll work very hard towards delivering a good part of that during this year. We will have – on the Hamburg Süd synergies, we will have some back-end loading because a number of the things that we will be doing will result in, let’s say, severance cost and when we redeploy the networks there will be cost with that. But we are hoping to make good progress on both the T&L integration synergies and the Hamburg Süd synergies this year.

Okay, thank you. And just a final short one to follow up on that. With respect to Hamburg Süd outlook for 2018, maybe you could give some color on sort of the North-South versus East-West dynamics you’re seeing in the market at the moment?

Yes. So far, as you can see also from the data, the part of the business that has been most affected by the rate decreases that we have seen has actually been the East-West trades and we have seen a more sustained recovery on the North-South and especially in the trades where Hamburg Süd is active. So I think Søren Toft also mentioned the fact that the underlying health in the trades where Hamburg Süd has been most active is also where we are seeing the best market conditions and we expect that to continue in 2018.

So it’s fair to assume a higher run rate for Hamburg Süd than Maersk Line organically year-on-year in 2018 versus 2017?

I think we have to go through – we have to go through the integration of the networks, look also at what retention issues we will run into as we redeploy the assets and realize the synergies before we can conclude on that.

Okay. And thank you, very much.

Next question comes from the line of Robert Joynson from Exane. Please go ahead. Your line is open.

Good morning everybody. A couple of questions on Maersk Line, if may. First of all on the unit costs. You said in the accounts that a key focus for 2018 will be to reduce, say, the unit cost on an ex-bunker basis further. Could you maybe just provide some color on what will drive that in terms of improved utilization rates, still benefits from new deliveries, et cetera and also maybe quantify what type of percentage reduction may be possible? And then just on pricing, the volume rebound in Q4 that Maersk Line saw versus Q3 was obviously very good. But I think it’s fair to say that the development in freight rates versus Q3 was maybe slightly worse in the market overall. Would it be fair to conclude that some of the volume gain in Q4 came from a bit of help from pricing or is that not correct? Søren Toft: So it’s Søren Toft. If I start with the questions on cost, we still believe, as I said, that we can continue to drive down our cost base in 2018. We still believe to be able to do that on a like-for-like 1% to 2%. We still have a number of initiatives on optimizing the network, both as a result of new deliveries, but we also continue to remain and become creative, finding new ways of combining the networks. Obviously we are going to have the benefits from Hamburg Süd or part benefits in 2018 even though the implementation only really starts from April onwards. So the big effect comes from 2019. We are continuing to drive hard on procurement. We’re continuing to find ways to become more fuel efficient, both in terms of the current means, but also applying new technologies. So we are using the entire width of the toolbox also for this year. And then on the pricing, we – so, obviously the contracts haven’t moved throughout the year and the adjustments that we have seen it’s just a factor also of how exposed you are to some of the short-term contracts. I mentioned that it was primarily pronounced in the East-West trades and there we have seen year-on-year the fact that CFI is down 17% on Europe and 24% on the Pacific. We monitor very, very closely every week on how our prices jive compared to what the indices say and whatever other market until we can have an at least from all the data points that we have it is – the rebound that we saw in volumes has not been caused by more aggressive pricing behavior, but simply by having customers come back with the support that we’ve been lacking during the third quarter as a result of cyber.

Okay, thank you. And maybe just one final question. During 2017, there was obviously a lot of problems at various hubs such as Algeciras and Tanjung Pelepas. Can you just comment on an update with respect to that, please? Søren Toft: Yes, this is Søren Toft here. We are doing better in our hubs both because we don’t have the same type of disruptions, but because we have also instigating certain measures of making sure we don’t overload our hubs because they are an integrated part of our global delivery network. We are getting new assets delivered in Tanjung Pelepas, eight cranes that can fit largest ships in the trade, that’s also going to help our efficiency. And we believe we have a future agreement in Spain that’s going to create both stability and higher productivity for the future.

Thank you.

And next question comes from the line of Lars Heindorff from SEB. Please go ahead. Your line is open.

Thank you, very much. Also a couple of questions regarding Maersk Line. Firstly, regarding your capacity, as far as I can see from some of the databases that we subscribed here, your capacity in nominal terms continued to increase from Q4 into Q1. So a question regarding your strategy there post the Chinese New Year and also if you believe that you can continue to improve utilization sequentially from Q4 into Q1. That’s the first one. And secondly, regarding other revenue, as you call it in Maersk Line, if my math this is me right, then you had roughly $7000 million, now you said I think in the report, about $2.4 billion in other revenue in Maersk Line in 2017. Could you give us any indication about the magnitude of decline going into 2018 now that the VSA with Hamburg Süd obviously had expired? I assume that will – that to decline. And then lastly, a question regarding your debt capacity when all these transactions are done, what kind of debt capacity you believe you’ll have in T&L? Søren Toft: If I start, I’m Toft, with the capacity question last then first of all, if you look at Q4 over Q4 we have grown our deployed capacity by 10.8%. About 6% of that is going to these third party slot sales, mainly HMM, Hamburg Süd and also quite a lot on the West Coast of Latin America. We have grown our headhaul volumes as Vincent flagged a little bit more than 5%. So we have done relatively better and certainly a lot better than in Q3. Going forward, we’ll put a bit more color on the capacity development when we get to the Capital Markets Day. But for sure, we are planning to, first of all, keep the capacity growth discipline. But we have, of course when you measure year-on-year, a significant growth because we report Hamburg Süd but the intention is that we will grow capacity slightly below the level of growing volumes.

And then the debt capacity, Lars, a couple of words around that. In a way, we are in a very fortunate situation, but I can’t provide you all the answers because we still have a couple of things to be structured in Energy. But if you think about it, we have said very clearly, we want to remain being investment grade as a new transport and logistic company. And we have the means to create it because we – when we close the deal with Maersk Oil, then we’d receive some cash that will reduce our debt, but we’ll also receive some Total shares. And we’ve been very explicit about it that subject to investment grade, we will distribute out to shareholders. We don’t want to – what do I say, two well consolidated balance sheets, but we want a strong balance sheet that is investment grade. So you have a kind of an adjustment factor here. We will elaborate a bit more on it on Capital Markets Day. But obviously, the only wise things at least seen from my perspective for the company is to continue not taking final decisions on those matters until we have the structural solutions in place, at least for one more if not two more of the remaining Energy businesses so that we – that we have the buffer while we have the uncertainties.

Okay. Then the second question was regarding the what I call or you call other revenue, which was up $300 million, which I assume is partly caused by the VSA with Hamburg Süd, which will obviously expire. So it would be nice if you could give us at least some feeling for what you expect in terms of other revenue going into 2018, how much that will be down, which I assume it will be. Søren Skou: Yes. So when you look at the combined business, we expect that to be more or less flat. It’s true that Hamburg Süd will fall out. But that was a smaller part of what we have done. The majority was actually for HMM and the agreement with them is still running into this year. And here we also expect to – that they will grow their volumes in line with the market and therefore the slot income will also grow in line with the market.

Okay. Thank you, very much.

And next question comes from the line of the Casper Blom from ABG. Please go ahead. Your line is open.

Thank you, very much. You talk quite a lot about these higher bunker costs, but not very much about potentially recovering these. I know that it’s maybe difficult to separate bunker cost from the total freight rate. But what is your sort of view on recovering these higher bunker costs when speaking to clients? And secondly, you of course also mentioned that the contract negotiations on the Asia- Europe routes have not been finalized yet. But could you give any sort of kind of color on how this is developing? Vincent has it a little bit in the press earlier but maybe an update on that? Thank you.

Yes. So we are – Vincent here. We are about a little bit over half way into the renewal of our contracts so far. So it’s maybe too easy to – too early, sorry, not too easy, but too early to really have a postmortem on how much we are getting. But obviously the bunker recovery is very important. And on what we have signed up so far across all geographies, we are signing up contracts with increased rates in excess of what increases we have faced in bunker. So on that part of the business, which is about half of what we do, or just under half of what we do, we can see that we are able to regroup that. The other half of the business is in the short term and there it’s – the negotiation is more of an all-in price that where bunker plays a factor. But the overall asset utilization across the different trades plays a bigger role. So there it’s a bit more negotiation on a week-by-week or month-by-month basis. The numbers that are – the information that I just shared are on an overall basis. You asked specifically about Asia-Europe. And I mentioned also earlier on that some of the decreases we have seen in – since quarter two are affecting primarily the East-West trades. And of course if you look specially at Asia-Europe, then the situation is a bit tougher towards customers. But I think overall, we’re still able to renegotiate contracts with increase in Europe as well.

Okay. So, just to be absolutely sure I understand here, when you looked at the overall business, were you saying that you were getting rates that were not only covering your higher bunker cost but also higher sort of underlying or was that a misunderstanding from my side?

On a global basis, if we look at the contracts that we’re signing up, we’re signing them up with increases that are slightly above – or that are above what we’re seeing on bunker increase, yes. But that’s – it’s important to remember that it is only half the business that we’re talking about here. The other half moves independently from that.

Okay. Then my another question is just regarding Hamburg Süd. There is a mentioning that you have some PPAs here in the quarter affecting the other line. Could you quantify that and maybe also talk a little bit about what should we expect here in 2018 on those, how can you call it extraordinary cost lines?

So we can. I think there are full disclosures in – there are full disclosures in the Annual Report. I’ll ask you to look at Page 23. It’s really technical. I think that’s one of the reasons as well why that makes a lot of sense, even more sense to look at the EBITDA line because when you make an acquisition and we are not recording a lot of goodwill, so we do a lot of depreciation and that’s why you might see them. That’s quite a bit of difference between the EBITDA and the EBIT line. But I suggest the best thing is probably to look at Page 23, I would argue. We spent quite some time researching this that we have very extensive disclosures when it comes to explaining about the standalone performance of Hamburg Süd and how we account for it.

Thanks a lot and sorry I have not received that chart yet. Thanks.

And next question comes from the line of Edward Stanford from HSBC. Please go ahead. Your line is open.

Good morning, everybody. A few questions, please in a particularly order. First of all, you mentioned that the reliability of Maersk Line is improving post the cyber attack. Are you able to give some flavor of where it is relative to pre-cyber attack levels? Also, when you think about returning value, is it too early to consider whether there is merits in considering a proportional consolidation of the equity in relation to the shrinking of the business? And finally, can you talk, perhaps about the – remind us what the costs of achieving the synergies might be? Thank you. Søren Skou: Yes. This is Søren Skou. Could you just repeat the question on returning value? I’m not sure we fully understood.

Yes. Sorry, if you return value with a proportional reduction in the shareholdings, the outstanding number of shares in issues, given that you’ve shrunk the business quite considerably, I just wonder that was a consideration, which is sometimes done with return of capital to shareholders? Søren Skou: Okay. Thank you.

Jakob here. Let me just start with that one. I think – I mean what we are really trying to do here, we have to be a little bit sequential when it comes to providing value to the shareholders. We’ve taken the decision to separate the Energy businesses. And right now we’re really trying to structure deals that meet the criteria of optimizing shareholder value and having sufficient reduction in debt so it works for us. Now how we then going to distribute, first of all depends on some individual deals and it depends on how the totality will look like. So it’s simply too early. We will try to come up with distribution mechanisms that are as efficient for all shareholders as possible. And as I said earlier, we want to be investment grade, but nothing more, and that means that if there is surplus, it will be distributed to shareholders. That’s also the intent of the measures we’ve set around the Total shares.

And the quick answer on reliability is basically that we measure our fortunes in an external index called [indiscernible] where the top 20 carriers are being ramped. During the cyber attack, Maersk Line and all the Maersk Line related brands fell very much towards the bottom of this. This is something we’re of course not proud of but something that is squarely related to a cyber attack and the difficulties we had in the ups. In the fourth quarter we are back up into the bottom range of the top quartile. And as I said earlier, we are still working on relative and nominal improvements despite the next couple of months will all be challenge due to the weather.

Thank you. And just the final question, if you could remind me any costs of achieving the synergies with Hamburg Süd and elsewhere if you can, please? Søren Skou: What we are disclosing, $350 million to $400 million in 2019, that’s the net number after the cost.

Thank you.

And next question comes from the line of Dan Togo from Handelsbanken Capital Markets. Please go ahead. Your line is open.

Yes. I’ll have a few questions as well here. I’d like to get back to Hamburg Süd. First of all, impacts on volumes and rates in Q2, I know it’s only December, but at least to get some flavor on that. And then also on the seasonality in Hamburg Süd, a small deficit in December. How should we see the seasonality in Hamburg Süd throughout 2018? So that’s the first question. Søren Skou: Let me just take that one, Dan. I think we have one month of impact of Hamburg Süd in our Q4. And frankly, it doesn’t provide us with any significant meaningful data to answer the question. I think for 2018, we are adding – with adding the Hamburg Süd volume, we do expect some retention loss or some cargo loss as we add the two companies together. So our ambition for this year is to grow the combined business of Hamburg Süd and Maersk Line and all other brands, probably slightly below overall market growth for 2018.

Okay. Then a question on the Maersk Line from integrating T&L. You communicated USD 100 million here in 2017. Can you provide some color on which business units? I know you just want to communicate on T&L as a whole. But we are still making estimates below. Can you provide some color on which business units that has impacted primarily and how that will pan out, so to say in 2018 as well? Thanks.

Yes, certainly the first part, yes you probably need to revisit your models at some stage then. But I think, while we are saying $100 million in a way is a little bit lower than what we had expected because as SA¸ren said, we need to get to the $600 million in 2019, we need to make good progress in this year. And one of the reasons for that is it’s a net number. So there is a lot of good things going on between Maersk Line and APMT. We’re not disclosing what hits the one bottom line or the other bottom line, but we have actually very cautiously offset and put in negative synergies. So the $100 million is a net number, because there are negative synergies from the hub disruptions in Algeciras, Tanjung Pelepas et cetera. We’ve talked about that throughout the year and we have offset that in the calculation. Had we not have that, we would have achieved much more synergies.

That was actually panic because can you quantify in any way that disruption at Tanjung Pelepas and Algeciras, how much that has impacted numbers in 2017 in any way because I guess that’s also part of the bridge to EBITDA in 2018?

Got it. But it’s a net number. And I think we are not disclosing it specifically. But you now know that it is deducted in the $100 million and if you do well on this, of course, we will do well on synergies this year.

Understood. And then just one final question to Claus on the Drilling side. The new contracts you’ve been out and signed here in quarter Q4, what levels – are these contracts profitable or is it just so to say, cost – covering costs?

Thank you. We don’t disclose the particular levels of the contracts. I can say tell that, as you probably know, it’s one big contract in deepwater and one big contract in the Norwegian sector and they’re both positively contributing, but that we don’t disclose further detail.

Okay. Thank you.

(60:05):

(60:11) squeeze: But clearly that story is very important to Maersk Line’s unit cost too. And I’m just interested to what extent should absolute costs be taken out or just – this just rely on volume growth? And the final question, the synergies of $100 million, I think very – very well explained. But can we get a breakdown as to what the key moving parts or the key contributors to that $100 million are or if not, what is the biggest chunk of that $100 million on a net basis? Thank you.

If I start maybe – Vincent here, if I start with the first part of your questions, clearly this is – the reduction in number of global carriers is something that is taking an increasing part of the conversations that we have with the customers for two reasons. I think one is that the products that we provide are actually much bigger, go more deeper and are better than they were before. So it gives also a different level of conversations. But the other one is of course, they have few alternatives they do realize that how long it’s going to take and how many deals it’s going to take before you can start to see a very different – or a very different game or a different level of volatility. I cannot tell you at this stage, I can just say that this is an important part of the conversations we’re having with customers right now and certainly something that they proactively engage on. And on your question on cost, then yes, utilization is part of the toolbox. But last year we disclosed at Capital Markets Day that we are running the network in the low 90%s of utilization. So obviously it’s not only going to come from there because it also need to run a reliable network. So there will both be utilization improvements helping us but all kinds of other things in the toolbox. And then just finally, obviously absolute levels will go up in 2018 as we are adding Hamburg Süd, but the trick here is of course to grow cost below the revenue line.

Yes, on the synergies, I don’t think we’ll go further in our disclosures. We are very, very careful about recording synergies in the right way but it’s not – it’s not a perfect number, it cannot be. And that’s why – to give you too much details on that would not be right. But it is a net number. And in a way we are basically doing exactly what we said at Capital Markets Day. If you look at, there is a chart that shows the various components. And we also said that the cost synergies would be the first part to reap and revenue synergies will be back-end loaded. The only thing that sort to say has not gone entirely to plan is improvements in hubs. You could also say that we have further potential in SG&A, which is another category that we’re pursuing in 2018.

Thank you. Søren Skou: And on that note, let me thank all of you for participating. We hope to see all of you at our Capital Markets Day on the 20th this month where we will hopefully provide you with a lot of interesting data. So with that, have a nice weekend, all. Thank you.