CMA CGM – positive outlook for the year 2021

The Board of Directors of the CMA CGM Group, a world leader in shipping and logistics, met today under the chairmanship of Rodolphe Saadé, Chairman and Chief Executive Officer, to review the consolidated financial statements for the 2020 fiscal year.

Upon publication of the 2020 results, Rodolphe Saadé, Chairman and Chief Executive Officer of the CMA CGM Group, commented:

“2020 will remain a year of contrasts. Due to the multiple lockdowns and the unwavering consumption of goods, our customers had to deal with unprecedented complexity with regard to the management of their logistics. They had to count on CMA CGM Group and our fully committed teams to support them during these extraordinary times.

 The year 2020 also demonstrated how valuable our strategy is. Our agility, along with the digital transformation carried out over the past few years, and the synergy between our shipping and logistics solutions with CEVA Logistics have proven to be key assets.

 In 2021, the volumes shipped should remain strong, at least throughout the first part of the year. To better meet our customers’ needs, we have created a new dedicated air freight division called CMA CGM AIR CARGO.

We are expanding our service offering by further developing our logistics business. And we are growing our fleet of vessels with the delivery of 13 additional LNG-powered container ships.”

A Group committed to providing its customers with solutions in an unprecedented context

The CMA CGM Group’s business activities during the fiscal year 2020 were carried out in unprecedented circumstances due to the COVID-19 pandemic. The first half of 2020 saw a global decline of 7% in container shipping compared with the first half of 2019 due to lockdown measures in several countries, including China.

Since the very beginning of the pandemic, the Group introduced measures aimed at protecting its employees, whether they were based at sea or in offices, warehouses, terminals and agencies around the world. Moreover, the CMA CGM Group reacted quickly to secure the transport of essential goods and products, in particular through the creation of several logistics bridges between Asia and the rest of the world. The CMA CGM Group also undertook solidarity actions to distribute medical equipment and millions of masks worldwide.

The second half of 2020 saw a strong rebound in container volumes (+4.3% compared to the second half of 2019), notably due to the shift in household spending from services to consumer goods. The combined impact of inventory rebuilding and the sharp acceleration in e-commerce helped support global trade.

Against this backdrop, CMA CGM drew on its shipping and logistics expertise to meet the heightened needs of its customers by adapting the capacity of its fleet in a flexible and rapid manner and by developing new solutions.

Solutions to help our customers manage complex supply chains.

• Implementation of the Business Continuity Pack, of a set of priority services, of flow and temporary storage management services, specifically created in response to this unprecedented situation;
• Complementarity between maritime and logistics activities to ensure rapid shipment services;
• Reinforcement of digital tools enabling customers to manage their cargo remotely, especially relevant in the context of successive lockdowns;

The Group stepped up the redeployment of operated capacity.

In order to ease supply chain tensions and to respond to the strong demand in the third and fourth quarters of 2020, CMA CGM increased its capacity by deploying the maximum number of containers and vessels across all its trade lanes. For example, the Group:

• increased its Asia-Europe capacity by 18% between the first and the second half of 2020, by introducing larger capacity vessels on its services;
• grew its fleet of containers by 8.7% between the first and second half of 2020.

The Group reduced its CO2 emissions by 4% in 2020

In 2020, the CMA CGM fleet of vessels reduced its overall emissions by 4% compared to 2019, having already reduced them by 6% in 2019 compared to 2018. Since 2008, the Group has reduced its CO₂ emissions by 49% (TEU-km), in line with its objective of reaching -50% emissions by 2030.

This reduction is fully aligned with the Group’s target of becoming carbon neutral by 2050 and increasing the share of alternative fuels consumed to 10% by 2023.

The Group is growing its fleet of Liquefied Natural Gas-powered vessels (LNG).

• As a pioneer in environmental protection and energy transition of the shipping industry, CMA CGM will own a fleet of 32 LNG-powered container ships by the end of 2022.
• LNG is currently the best available technology to preserve air quality. It eliminates 99% of sulfur oxide emissions, 91% of particulate matter emissions, and 92% of nitrogen oxide emissions, going above and beyond current regulations. It also represents an initial response in the fight against global warming. A vessel powered by LNG can emit up to 20% less CO₂ compared to an oil engine.

The Group is ready to embrace the energy sources of tomorrow.

• Launch of the Coalition for the Energies of the Future, initiated by Rodolphe Saadé. Fourteen international companies are committed to stepping up the pace of the development of energies and technologies for the future to support new sustainable mobility solutions and thus reduce the environmental footprint of transport and logistics.

Operating and financial performance for 2020

Group: improvement in operating performance and net income

During the fiscal year 2020, CMA CGM improved the profitability in all its business activities. Revenue for the period rose 3.9% compared with 2019 at USD 31.5 billion.

In 2020, EBITDA reached USD 6.1 billion. EBITDA margin was 19.4% (compared to 12.4% in fiscal year 2019).

In 2020, CMA CGM Group posted USD 1.75 billion in net profit, Group share, compared to a loss of USD 229 million in 2019. This performance reflects the robust momentum of international trade and the effectiveness of the cost control plan initiated by the Group.

In addition to the repayment of nearly all its revolving credit lines, the Group also early repaid certain loans, including part of the syndicated State-guaranteed loan contracted in May 2020. Net debt stood at USD 16.9 billion at the end of 2020, down USD 900 million over the year.

Lastly, the Group’s shareholding structure is evolving with the transfer of Bpifrance’s 3% stake to MERIT France. Following this transaction, the reference shareholder MERIT France will increase its stake in CMA CGM Group to 73%. Bpifrance will continue to hold a 3% stake in CMA CGM Group and will continue to sit on the Board of Directors.

Shipping: EBITDA growth driven by a 6.8% increase in average revenue per TEU

In 2020, volumes transported saw a 2.7% drop compared with 2019. This decline reflects a very contrasted picture, with a strong upturn in activity from May onwards, which partially offset the sudden drop at the beginning of the year. As a result, annual revenue grew 4% compared with 2019, totaling USD 24.2 billion for maritime shipping, thanks to an average revenue per TEU (twenty-foot equivalent unit) of USD 1,154 (up 6.8% year-on-year).

EBITDA for the maritime shipping activity was USD 5.5 billion compared with USD 3.2 billion in 2019. EBITDA margin rose 8.9 points to 22.7%.

Logistics activity: proven synergy with shipping activities and performance bolstered by the effects of the transformation plan

The Group’s logistics activity grew adequately throughout the year, mainly supported by air freight business and then by the recovery of the contract logistics activities (warehousing and related services), following the reopening of sites that had to close during the second quarter due to the health crisis, as well as by the renegotiation of some contracts. CEVA Logistics continues its turnaround and is in line with the trajectory outlined in its transformation plan.

CEVA Logistics posted revenues of USD 7.4 billion in 2020, up 3.1%. EBITDA reached USD 609 million, representing an 11.9% increase over 2019. EBITDA margin rose by 0.7 points to 8.3%.

Net income of CEVA Logistics, excluding non-recurring items, improved during the year.

Outlook

Sustained momentum for International trade

In shipping, the increase in demand observed since June 2020 is expected to continue at a steady pace at least throughout the first half of 2021. In 2021, the Group will continue to roll out new capacities, introduce new services and new ports of call to further improve the services offered to its customers. Favorable trends in the logistics sector should continue in 2021.

The Group is confident about 2021.

Creation of an air cargo division

The CMA CGM Group completes its range of transport solutions with the launch of a specialized air cargo division: CMA CGM AIR CARGO. With air cargo transport and logistics activities, the Group now has a complete range of solutions to offer its customers.

The CMA CGM Group’s air transport offering will comprise four Airbus A330-200F cargo aircraft with a carrying capacity of 60 tons and a flight range of nearly 7,500 kilometers. The first flight will link Liège with Chicago. This initial regular service to the United States illustrates CMA CGM’s commitment to offering its customers international coverage serving the largest cargo airports at the heart of major economic zones.