2015 was characterised by deteriorating market conditions with declining rates and close to zero volume growth. Maersk Line’s average rate decreased by 16% compared to 2014. In the fourth quarter (Q4), the decrease was 25% compared to Q4 2014. Rates declined due to weak demand, over-capacity and intense price competition. Rates declined across all trades except North America. In the Asia – Europe trade, rates reached an all-time low.

Global container shipping demand growth was 0-1% and the global container fleet (capacity) growth was 8%. The low demand growth was due to weaker imports into Europe and slowdown in emerging market economies. The Europe, West Africa and South America (East Coast) markets had negative growth.

“2015 was a challenging year. We delivered a record first quarter result and a strong first half year result. However, the continued lack of demand and over-capacity resulted in sharply declining rates from the second quarter and onwards. At the end of 2015, rates were record low and our fourth quarter result was negative. In light of our expectations at the beginning of the year, our result is less than satisfactory. But considering the market in 2015 it is a solid financial performance,” says Søren Skou, CEO of Maersk Line.

Maersk Line achieved a number of milestones in 2015.

“We maintained our market share. We improved our competitiveness by continuing to reduce unit cost. We successfully implemented 2M, the world’s largest vessel sharing agreement. We launched a new container shipping line – SeaLand – in the Americas. We accelerated cost and transformation efforts to prepare our organisation to the future. Last but not least, we ordered new vessels and containers to support our growth ambition,” says Søren Skou.

The unit cost decreased by 11.5% to a record low of 2,288 USD/FFE. The EBIT-margin gap to peers is at 6.6%-points (est.), in line with the +5%-points target.

The implementation of the 2M vessel sharing agreement (VSA) with MSC entailed an unprecedented phase-in of 193 vessels and 2M is delivering benefits in line with the target.

In November 2015, Maersk Line announced the acceleration of its organisational transformation driven by standardisation, automation, and digitisation of processes. This includes reducing the global organisation by at least 4,000 positions by the end of 2017. This will result in a leaner, more agile and more focused organisation.

In August 2015, Maersk Line announced a revised growth strategy: To grow at least in line with the market to defend its market leading position. In support hereof, Maersk Line ordered 27 new container vessels and 130,000 containers. The container vessels will be delivered 2017 and onwards.

Maersk Line expects the container shipping market to remain weak and rates under pressure due to over-capacity. Maersk Line expects the global container shipping demand to grow by 1-3% in 2016.

“MacGregor’s market situation is challenging, but we are confident that we are taking the correct measures in order to adapt to the situation in that business area. Orders received were strong also in the fourth quarter in Kalmar and Hiab, and therefore, orders for the full year 2015 reached the previous year’s level despite clearly lower orders for MacGregor. Sales in 2015 grew 11 percent and the operating profit margin excluding restructuring costs improved to 6.2 percent. Our 2015 cash flow was also strong. The doubled earnings per share enables dividend growth of 45 percent. We see attractive opportunities in executing our strategy by further investing in growing our businesses, which in our view increases shareholder value best.

Towards the end of the year, we updated our strategy with the aim of transforming Cargotec into a market leader in intelligent cargo handling by building on services, digitalisation and people leadership. We will invest in R&D in order to ensure that our products remain market leaders and ahead of our competitors’ products. We will develop our portfolio by investing in businesses with high growth, as well as by complementing our technological competence and geographical coverage. In particular, we will invest in competence development in order to accelerate our transformation process. We have also updated our financial targets: the new goals for each of the business areas are to reach 10 percent operating profit margin (EBIT) over the cycle as well as to grow faster than the market, and for the group to reach 15 percent return on capital employed (ROCE pre-tax) over the cycle. These targets reflect our growth strategy and
expected high return on the planned investments.”

January-December 2015 in brief
– Orders received totalled EUR 3,557 (3,599) million.
– Sales grew 11 percent to EUR 3,729 (3,358) million.
– Operating profit excluding restructuring costs was EUR 230.7 (149.3) million, representing 6.2 (4.4) percent of sales.
– Operating profit was EUR 213.1 (126.6) million, representing 5.7 (3.8) percent of sales.
– Cash flow from operations before financial items and taxes totalled EUR 314.6 (204.3) million.
– Net income for the period amounted to EUR 142.9 (72.0) million.
– Earnings per share was EUR 2.21 (1.11).

The Board of Directors proposes a dividend of EUR 0.79 per class A share and EUR 0.80 per outstanding class B share be paid.

Port of Long Beach terminals moved 536,188 TEUs (twenty-foot equivalent units, the industry unit of measurement) last month. Imports were up 30.3 percent to
278,491 TEUs. Exports saw an increase of 8.4 percent to 106,739 container units. Empty containers rose 28.6 percent year over year, to 150,958 TEUs. Empty containers that were filled with items for post-holiday sales were sent back overseas to be reloaded with goods.

Long Beach continues to demonstrate its strength as the seaport of choice for trans-Pacific trade based on the Port’s compelling value proposition – being the shortest, fastest and most cost effective gateway for multi-modal movement of goods from Asia to America’s major consumer markets.

“We are encouraged by the strong start to the year, which stands in stark contrast to the congestion we faced a year ago,” said Port of Long Beach CEO Jon Slangerup. “Our January results are another indicator that the hard work by our entire Port team – our customers, employees, business partners and key community stakeholders – continues to deliver superior results. We are off to a solid start in 2016 and will continue to make the necessary strategic investments in capital, energy and innovative solutions to ensure that Long Beach remains the port of choice for international trade.”

With an ongoing $4 billion program to modernize its facilities this decade, the Port of Long Beach is building the Port of the Future by investing in capital and service improvements that will bring long-term, environmentally sustainable growth, and maintain its competitive advantage as the fastest route from Asia to anywhere in North America.