03 Robert Uggla, AP Moller Holding and Søren Skou, AP Moller-Maersk
The transformation of AP Moller-Maersk from a shipping and energy conglomerate into an integrated transport and logistics company is well under way, but it may be several more years before tangible results start to show through and profits return to the target of a 7.5% return on invested capital
The chief executives head two of the numerous businesses under the Maersk umbrella that are independent of each other but linked through the Mc-Kinney Moller family
MAERSK is probably the closest the shipping industry has to a household name.
Maersk Line, Maersk Tankers and Maersk Broker are all world-class entities in their respective fields, bound by a shared history.
Yet they are not part of the same group and each has a different ownership structure — and hence different people at the helm.
The container shipping, terminals and logistics operation that includes Maersk Line is part of the AP Moller-Maersk group.
Maersk Tankers is owned by AP Moller Holding, while Maersk Broker is privately owned by members of the Mc-Kinney-Moller family.
And that is what connects all three companies, plus many others that come under the Maersk umbrella one way or another.
The children and grandchildren of the late Maersk Mc-Kinney Moller have majority interests in these three distinct businesses.
AP Moller Holding, the investment arm of the AP Moller foundation, whose chief executive is Mr Moller’s grandson Robert Maersk Uggla, controls 51.4% of the voting shares of AP Moller-Maersk, which operates the world’s largest containership fleet, as well as running ports and providing logistics services.
AP Moller Holding also owns Maersk Tankers, a leading product tanker operator, which it acquired from AP Moller-Maersk in 2017,
Meanwhile, Mr Uggla’s mother, Ane Maersk Mc-Kinney Uggla, spent nine years as chair and many more on the board of Maersk Broker, one of the world’s largest shipbroking firms, with a presence in 15 countries, until her retirement in September.
However, she and her two sisters are the sole shareholders of Maersk Broker, which is not part of AP Moller-Maersk.
Both Ana Uggla and Robert Uggla are directors of AP Moller-Maersk, which is currently chaired by Jim Hagemann Snabe, and have shown they are not bound by the past when looking to the future.
For although Maersk Tankers can trace its history back to 1928, Maersk Broker to 1914 and AP Moller-Maersk even further back to 1904, none of them would have survived by sticking to the same strategy over the decades.
Instead, the Maersk group has changed course numerous times, expanding in to new sectors, exiting others and proving it is willing to make some tough calls that would not be for the fainthearted.
Even so, the transformation now under way at AP Moller-Maersk is probably the boldest ever as the Danish powerhouse reinvents itself once again.
The plan, unveiled in 2016, is to withdraw from energy-related activities and become an integrated transport and logistics company.
He recalls how AP Moller-Maersk’s board of directors felt something drastic was required to turn the business round after seeing so much shareholder value destroyed over the years.
“We had to change the trajectory of AP Moller-Maersk in 2016,” he told Lloyd’s List. “We had gone from being a $60bn company in 2011 to a $35bn company in 2016.”
He and the board concluded that the biggest opportunities were in the container shipping, ports and logistics sectors, reflecting the fact that, while Maersk expects world trade to continue to expand despite current tensions, oil demand may soon peak.
In the three years since the board approved the restructuring blueprint, AP Moller-Maersk has been transformed from a conglomerate of nine different business units, each operating independently of each other, with separate management and staff, to a single company with one global sales force, one global customer service organisation and so forth.
As well as selling Maersk Oil and Maersk Tankers, and de-merging Maersk Drilling, the company also acquired Hamburg Süd, a top 10 container line, for $4bn, so consolidating its position at the top of the containership fleet league table.
There is still much more to do, against an equally challenging backdrop as the whole shippng industry catches up on digitalisation, sets out ambitious decarbonisation goals and strives to improve safety after a spate of serious containership casualties.
Yet neither top management nor the board appear to have any misgivings about the chosen path for Maersk.
Mr Skou — who is also chairman of the Box Club and, in November, took over the additional role of chief operating officer on an interim basis following the resignation of Søren Toft — says he is confident Maersk’s strategy, with the focus on becoming the global leader in integrated container logistics, “can deliver good results for our shareholders in the coming years”.
As for his own future, Mr Skou says he hopes to be able to “see the strategic change through to completion”.
For the family that so carefully guards the legacy of Maersk Mc-Kinney Moller, whose guiding principle was “With Constant Care”, the decision to split up the conglomerate and sell off businesses that were no longer regarded as core, was undoubtedly a momentous one that sent shockwaves through the whole industry.
However, in the opinion of Mr Skou, this was the best way to ensure Maersk stayed at the forefront of container shipping, both in terms of scale and leadership, while the family has been able to retain its tanker and other maritime interests through different branches of its huge business empire.
It may, though, be several more years before it is clear whether AP Moller-Maersk’s new direction will deliver long-term success after a decade of disappointing performance.