2017 ANNUAL FINANCIAL RESULTS: CMA CGM pursues its development strategy and once again delivers strong operating results, outperforming its industry.
- Growth of transported volumes by 21%
- Revenue of more than 21 billion USD, a sharp increase of +32%
- Solid core EBIT margin of 7.5%
Upon the publication of its 2017 annual results, Rodolphe Saadé, Chairman and CEO of the CMA CGM Group, commented:
“The Group has recorded an excellent performance in 2017, showing once again the relevance of its strategy and its operational discipline. Quarter after quarter, CMA CGM demonstrates its ability to outperform its peers and these annual results confirm our Group’s position as a leading player in the container shipping industry.
In 2017, we launched several strategic projects fostering our development for the years to come, notably in the digitization of our industry.
Driven by its strategic vision, the expertise of its 30,000 staff members and its financial strength, the Group is pursuing its development with confidence and determination, as it has for the past 40 years.”
|Q4 – 2016||Q4 – 2017||Q4 – 2017|
|FY – 2016||FY – 2017||FY – 2017|
|Revenue in USD billions||4.57||5.48||19.9%||15.98||21.12||32.1%|
|Core EBIT* in USD millions||193||282||1.5x||29||1 575||n.m.|
|Core EBIT margin||4.2%||5.2%||+1.0 pts||0.2%||7.5%||+7.3 pts|
|Net Income Group share in USD millions||45||73||1.6x||(452)||701||n.m.|
|ROIC (return on invested capitals)||(1.4%)||12.1%||+13.5 pts||-||-||-|
|Volumes carried in TEU millions**||4.44||4.93||10.9%||15.64||18.95||21.1%|
|Fleet capacity in TEU millions**||2.21||2.53||14.4%||-||-||-|
* Core EBIT excluding asset sales and depreciation and non-recurring elements
** TEU = Twenty-foot Equivalent Unit
*** On 31st December 2017
The Board of Directors of the French Group CMA CGM, a worldwide leading shipping company, met today under the chairmanship of Rodolphe Saadé, Chairman and CEO, to approve the 2017 annual consolidated financial statements.
2017 ACTIVITY AND FINANCIAL PERFORMANCE
Significant increase in transported volumes and revenue
In 2017, CMA CGM carried nearly 19 million containers, a strong increase of +21.1% compared to 2016. This increase is driven by the contributions of all the shipping lines operated by the Group in addition to APL’s full-year contribution.
This strong momentum is notably linked to:
- The quality of the OCEAN ALLIANCE service offering, particularly appreciated by our customers. Launched on 1 April 2017, it covers 40 shipping services on the East-West trades
- The Transpacific market, where the CMA CGM and APL brands are particularly strong.
Thanks to the increase in freight rates, confirmed throughout 2017, the average revenue per TEU rose by +9% compared to 2016.
Fourth quarter revenues were up 19.9% compared to the same quarter last year and stood at USD 5.5 billion.
Therefore, the annual revenue for 2017 rose by a very strong +32.1% and surpassed the USD 20 billion mark for the first time, reaching USD 21.1 billion.
Best operating result in the industry
In the last quarter, the operational result stood at USD 282 million. The core EBIT margin reached 5.2%, up by 1 point compared to the fourth quarter of 2016.
In 2017, CMA CGM core EBIT reached USD 1.575 billion with a core EBIT margin of 7.5%, up +7.3 points compared to the previous year. CMA CGM thereby recorded the best operating result in the container shipping industry.
In addition to the rise in average revenue per TEU transported, the control of unit costs which rose slightly by 1.6%, despite the sharp rise in fuel prices (+42% compared to 2016) enable this particularly strong result. This once again illustrates the expertise and discipline of the operational management implemented all year long.
Consolidated net income group share for the year 2017 amounts to USD 701 million, a sharp increase compared to 2016 (loss of USD 452 million).
New governance and strategic ambition
Rodolphe Saadé was appointed CEO in February, then Chairman and Chief Executive Officer in November, with Jacques Saadé becoming Founder-Chairman.
Upon his appointment, Rodolphe Saadé outlined 5 priorities:
- Customer centricity
- Maritime, inland and logistics development
- Innovation and digitalization
- Human expertise and organizational agility
First full year of APL’s integration within the Group
APL services were integrated into the Group in June 2016. They carried more than 5 million TEUs in 2017 and contributed to the Group's operating income by USD 340 million in 2017.
Acquisition of local players reinforcing the Group’s global offering
- In October 2017, CMA CGM acquired SOFRANA, an operator in the South Pacific islands,
- In December 2017, CMA CGM closed the acquisition of Mercosul, one of the main players in Brazil’s domestic container shipping market.
Launch of OCEAN ALLIANCE: the world’s largest operational shipping alliance
On 1 April 2017, OCEAN ALLIANCE, the largest operational shipping alliance in the world with 40 services and more than 320 ships, went live. The port coverage, as well as the transit times offered, were much appreciated by customers.
In April 2018, CMA CGM will launch a further improved offering with its “Ocean Alliance Day Two Product”.
In 2017, the Group implemented the appropriate organisation to accelerate its digital transformation and take advantage of innovations in order to:
- Reinforce the added value provided to customers
- Continue its development
- Reinforce its operational performance
The Group's investment fund, CMA CGM Ventures, closed its first investments in 2017, notably in NYSHEX, a digital marketplace for ocean freight contracts, and in e-dray, a software platform designed to improve drayage operations in port terminals.
Order of 9 very large capacity LNG-powered containerships, a world premiere
In November, CMA CGM selected LNG to propel its 9 new vessels of 22,000 TEUs, which are expected to be delivered from 2020 onward. This proactive choice will significantly reduce the emission of greenhouse gases and fine particles. This is part of the Group's overall strategy, which has already resulted in a drop of its CO2 emissions per container transported by 50% from 2005 to 2015 with an objective of an additional 30% reduction by 2025.
Stronger financial profile
In 2017, S&P upgraded CMA CGM's credit rating to B+ with a stable outlook and Moody's upgraded its B1 rating and subsequently adopted a positive outlook.
As planned, CMA CGM sold 90% of the Global Gateway South Terminal in Los Angeles. The sale was signed in July and closed in December for an amount of USD 823 million.
The CMA CGM Group has extended the maturity of its debt thanks to three bond issues for a total amount of EUR 1.4 billion. It has also strengthened its liquidity with a USD 205 million revolving credit facility which has since been increased to USD 345 million.
The momentum of the volumes transported in 2017 is expected to continue in 2018. The Group should continue to benefit from this trend, thanks to its worldwide presence and its portfolio of brands covering the East-West, North-South and intra-regional trades.
In this context, CMA CGM will actively pursue its development and will strengthen its offering in order to consistently meet and exceed customer expectations. In this respect, the Group has announced the launch of a new customer approach with the objective of:
- Supplementing its shipping services with inland and logistics offerings,
- Creating innovative services with strong added value,
- Facilitating customer experience within the shipping environment
In early 2018 CMA CGM took delivery of its new flagship the CMA CGM ANTOINE DE SAINT EXUPERY (20,600 TEUs) the largest containership flying the French flag. This vessel is the true emblem of the Group as it celebrates its fortieth anniversary this year.