Welcome, everyone, and thank you for joining us on this earnings call today, as we present our third quarter result for 2026. My name is Vincent Clerc. I am the CEO for A.P. Moller-Maersk, and with me in the room today is our CFO, Robert Erni. Let me start with the overall highlights for this quarter. We delivered a strong quarter across all three segments, with total group revenue of $18 billion. At a macro level, market demand in Ocean remained resilient, driven by strong export activity from the Far East and imports into Africa, Latin America, and North America in particular. A growing share of the incremental volume growth is coming from verticals with green goods and AI-related technology, which are growing two or three times the speed of the overall market.
As we discussed last quarter, this resilient demand continues to reflect different dynamics on headhaul and backhaul trades, contributing to an increasingly imbalanced trade flows. Meanwhile, this year's Pacific typhoon season was particularly active, causing disruptions at key ports and adding to the underlying congestions in our Ocean network. This impacted our schedule reliability during the quarter. Together, these factors contributed to sustained high spot rates and excellent financial results in Ocean. Meanwhile, in Logistics & Services, strong commercial momentum continued from the start of the year, delivering another quarter of double-digit growth. Finally, Terminals deliver another strong quarter and continued to invest for growth. Turning to our financial performance for the quarter, on the back of higher spot rates in Ocean, we deliver an EBITDA of $4.7 billion and an EBIT of $3.3 billion. Higher earnings translated into free cash flow of $2.4 billion.
Cash generation has progressively improved after being negative in the first quarter. Strong year-to-date performance combined with continued strong market demand into the fourth quarter has allowed us to upgrade our earnings guidance for 2026. We now expect underlying EBIT to be in the range of $8 billion-$8.5 billion and free cash flow to be greater than $3 billion. Robert will share further detail in his section. Taking a closer look at the financial and operational highlights by segment, starting with Ocean. Overall, this was a strong quarter. The high spot rates we have captured since mid-May were not only sustained, but also strengthened as the quarter progressed. However, while congestion supported higher rates, it also constrained our volumes alongside available capacity. With our utilization already very high and our ability to grow volume during quarter was limited.
Despite this, on a year-to-date basis, our volume growth remains at a healthy 4%, or in line with what we expect the market to be. Looking ahead, we are investing in our fleet to support growth and its ongoing renewal. In September, we placed an order for 26 vessels, each with a capacity of approximately 19,000 TEUs. These vessels will be equipped with dual-fuel engines capable of running on liquefied gas and are expected to be delivered in 2029 and 2030. In Logistics & Services, we delivered strong top-line growth, continuing the positive momentum from the start of the year. Operational execution supported stronger EBIT performance, especially in Forwarding and Landside. In Solutions, we remain focused on reducing warehousing white space and improving utilization through new contract wins and growth. This is reflected in the sequential improvements in the EBIT margin.
The priorities in Solutions are clear, and we remain focused on delivering against them. Finally, in Terminals, revenue reached a new record, supported by the existing portfolio and the opening of our new gateway terminal at Rijeka in Croatia. High utilization and strong delivery supported record EBITDA as well as a record adjusted EBIT. Looking at the strategic priorities we set for Ocean at the beginning of the year. Grow. Utilization was very high at 96% for the third quarter in a row. However, this high utilization also limited our ability to grow volumes, as reflected in the loaded volume numbers, which were broadly flat year-on-year. With utilization as its ceiling and Gemini now fully phased in, future growth will depend more directly on securing sufficient capacity, either through the charter market or new buildings, so that our growth can keep up with the market.
Our recent fleet investment supports this goal and ensures the long-term competitiveness of the network, particularly in a market with more imbalanced trade flows. On the protect high asset turn, our volume were also impacted by congestion, exacerbated by the Pacific typhoon seasons, which weighed on our asset turns during the quarter. In the short term, we expect a gradual return to Suez to mitigate the congestion impact, as the shorter transit distance allows us to redeploy our existing fleet and circumvent disruptions more effectively. Finally, on profitability, congestion and the resulting higher spot rates provided significant earnings upside, lifting our Ocean EBIT and margin. This was despite the increase in unit cost driven by congestion. As in the second quarter, higher bunker costs driven by the Middle East conflict were recovered through surcharges on contracts and through higher spot rates.
On the Red Sea, we have continued a gradual return of our services via the Bab-el-Mandeb. Suez transits are now just over 2/3 of pre-closure capacity, and this is delivering faster transit times to our customers while also reducing our bunker consumption. Before we round off Ocean, let me say a few words on the market condition that we have been experiencing since we last spoke in August. In the short term, demand remained resilient throughout the third quarter. Following Golden Week holidays, we saw a strong recovery in October, with both demand and utilization staying extremely high. There are more structural factors to consider. As I mentioned in the introduction, global trade flows are becoming increasingly imbalanced, with headhaul growth continuing to outpace backhaul growth. Coupled with longer-term underinvestment in Landside capacity, this has contributed to congestion, with some key terminals operating at their limits.
This situation was further aggravated during the quarter by typhoons in Asia. This combination of factors tightened the infrastructure a lot. Together, resilient demand and tight inland side capacities have supported increase in the spot rates showed on the chart. Rates are now over 10% higher than they were when we announced our second quarter results in August, and over 120% higher than at the start of 2026. Typhoon-related disruptions has recently eased, but the underlying Landside bottleneck will take time to resolve. As a result, we expect congestion to remain an important feature of the market in the periods of strong demand. Overall, continued strong demand in the fourth quarter has allowed us to upgrade our full-year earnings guidance. Turning to Logistics, our priorities remain to improve growth and accelerate margin improvement. On the first priority, revenue grew 13%, of which around 2/3 was volume growth and one-third price.
Prices were supported by elevated rates due to fuel charges, most notably in First Mile and Air Freight. Further, in First Mile, we continue to offer landbridge solution across the Arabian Peninsula in response to the effective closure of the Strait of Hormuz. Overall, this performance reflect the commercial platforms we have built over the past years. While we are encouraged by the momentum, we are not complacent at all. Our focus remain on converting the strong top line into improved margin and earnings. Turning to our second priority, the EBIT margin improved year-on-year to 5.8%. The most notable improvements were in First Mile, Air Freight, and Project Logistics. Solutions represents our key opportunity for improvement, and warehousing white space continued to weigh on our year-on-year comparison, although performance improved sequentially as new customer implementation ramped up and cost discipline kicked in.
Most importantly, we know what needs to be done in Solutions and are focused on delivering. The PUMA partnership showed here is a good example of the customer value proposition we can deliver in Solutions. In September, we announced an expansion of our partnership with PUMA. We will manage three highly automated distribution centers in the U.S., serving wholesale, PUMA-owned stores, and end consumers across a combined 2.3 million square feet. The value proposition for PUMA has three main elements. First, automation that can improve efficiency, reduce cost, while making better use of existing floor space. Second, parcel integration technology enables us later cut-off times and faster dispatch. Third, high-density storage provides capacity for SKU growth and peak demand. Taken together, this shows how existing assets and automation can support customer growth while improving the efficiency of the distribution network.
This is the kind of contract logistics business that we want to grow in Solutions, building on the long-term customer partnerships and with clear value proposition. We thank PUMA for their continued partnership and look forward to building on it. Now, turning to Terminals, our priorities remain to grow through existing and new location while maintaining long-term profitability. The segment continues to perform very well, with record revenue in the quarter. Revenue grew 5%, supported by higher revenue per move, but also the ramp-up of our new terminal in Croatia. This growth came despite the impact of the Middle East situation, which has severely reduced our volumes in our terminal in Bahrain. At the same time, however, the rest of the portfolio performed very well and continued to operate at high utilization, leaving limited room for further additional growth in the same portfolio.
This underlines the importance that we see in investing into new capacity, and Suape is a good example, and I will say a few more words about this shortly. Turning to profitability, return on invested capital remains strong at around 14%. The year-on-year moderation reflects the capital employed in growth investment ahead of their full earning contribution. As we have said before, we expect some pressure on ROIC during the buildup phase of these investments, but return from the existing portfolio remains very strong. Let me briefly highlight Suape, which is a good example of our long-term investment approach in Terminals. It also represents Latin America's first fully electrified container terminal. Back in September, the new terminal welcomed its first vessel call, the Maersk Ganges, operating in Brazil's cabotage service.
The new terminal connects a growing logistics and industrial hub in northeast Brazil to global markets while expanding Brazil's port network beyond the south and southeast region. The investment is of more than $350 million and includes fully electrified equipment and automation, which makes it a green and smart terminal from day one. The initial annual capacity is 400,000 TEUs, or approximately 265,000 moves, increasing container capacity in the Suape port complex by more than 50%. Like the Da Nang project we highlighted last quarter, Suape is exactly the type of locations where we see long-term value creation being a strategic gateway for a growing market. With that, I will now hand over to Robert, who will take you through the financial review.
Thank you, Vincent. Let me build on the operating developments Vincent has just discussed and take you through how these translated into our financial performance. The third quarter was very strong, with the favorable market environment in Ocean providing the main uplift. In addition, we further progressed across the rest of the portfolio. Revenue reached $18.1 billion, up 27% compared with last year. The main driver was Ocean, where the higher freight rates more than offset slightly lower volumes. This translated into a substantial improvement in profitability. EBITDA increased to $4.7 billion and EBIT to $3.3 billion, both up around $2 billion on the previous year. Importantly, the improvement also translated into strong cash generation. Free cash flow increased to $2.4 billion despite the working capital buildup during the quarter. As a result, we continued to operate from a position of considerable financial strength.
Cash and deposits stood at $20.6 billion, with a net cash position of $3.2 billion. Return on invested capital was 8.5% on a last 12 months basis. Let's now look more closely at the development in cash flow. Operating cash flow was $4.4 billion, equivalent to a cash conversion of 93%. This was slightly below last year, but still represents a strong level of conversion given the significant increase in earnings. The main offset was the $394 million increase in net working capital. This was driven by higher receivables in Ocean, as the increase in freight rates also increased billings to customers. From operating cash flow, we had $0.9 billion of capitalized lease installments and gross CAPEX of $1.2 billion, which is in line with guidance. After these items, free cash flow was $2.4 billion.
This brought year-to-date free cash flow into positive territory, marking a clear turnaround from the cash outflow at the start of the year. We also returned $249 million to shareholders through the ongoing share buyback program. With that, let me move into the segments, starting with Ocean. In Ocean, strong underlying demand combined with adverse weather in East Asia added to congestion and tightened capacity across the industry. Together, these effects put sustained upward pressure on freight rates, with our average rate rising 46% year on year and 20% sequentially to $3,287 per FFE. Loaded volumes were 3.37 million FFE, down 0.8% year on year and up 0.3% sequentially. Congestion and tight capacity left limited room to capture growth, underlying the rationale for our recently announced fleet investments to create capacity for growth. As a result, Ocean revenue increased 37% on year to $12.6 billion.
The challenging operating environment came with additional costs. Bunker costs increased by 37%, reflecting the impact of the recent global fuel supply disruption, partly offset by 6.3% lower bunker consumption. Congestion and network adjustments also increased network and container handling costs. Together with lower volumes, these resulted in unit cost at fixed energy increasing by 4.8% year-on-year. Nevertheless, the benefit from higher freight rates was greater, and profitability increased significantly, as EBITDA more than doubled to $3.7 billion and EBIT increased to $2.6 billion. Gross CapEx was $835 million. Let me move to Logistics & Services. That business continued to make progress in the third quarter, growing across the portfolio and further improved profitability. Revenue increased by 13% to $4.5 billion, with all segments and nearly all products delivering year-on-year growth.
This was supported by strong volume growth across most products, despite the mixed macroeconomic environment. Top-line growth again translated into higher earnings. EBITDA increased to $519 million, while EBIT increased to $259 million. The EBIT margin improved by 0.3% year-on-year to 5.8%, supported by top-line growth, cost control, productivity, and efficiency gains. Forwarding and Landside contributed to margin improvement, while Solutions remains the key focus area for further margin progression. The difference in performance between the segments is shown on the next slide. Here, we see a familiar picture to the previous quarter. Revenue grew across all three segments, while the improvement in profitability was driven by Forwarding and Landside. Forwarding delivered a strong quarter, with revenue increasing by 19% to $929 million. At the same time, the EBIT margin improved to 4.3%, mainly driven by strong improvement in Air Freight and Project Logistics.
Landside was another important contributor. Revenue increased 12% to $2.4 billion, while the EBIT margin improved to 7.3%, supported by landbridge-related demand and efficiency initiatives across depot and customs brokerage. Solutions remains the area with greater potential. Revenue increased 9.6%, but the EBIT margin declined to 3.2%. The principal opportunity remains to increase warehouse utilization, reduce white space, and convert the commercial pipeline. Overall, momentum in Logistics & Services is good. Forwarding and Landside demonstrates the earnings improvement we can deliver through volume growth and disciplined execution, while improving returns in Solutions remains an important priority. Now, let's take a look at Terminals. Once again, the Terminals business continued its strong performance, delivering record revenue and EBITDA in the third quarter. Revenue increased by 4.9% to $1.5 billion, supported by both volume growth and improved commercial performance.
Volumes increased by 2.6%, with particularly strong growth in Africa and Europe, which more than offset negative impact from the Middle East conflict. Revenue per move increased by 6.4%, driven by improved rates and higher storage revenue. At the same time, cost per move increased by 5.7%, mainly due to labor inflation and the variable concession costs, partly offset by lower SG&A costs. EBITDA increased 10% to $551 million, with the margin improving to 36.3%. For EBIT, the year-on-year comparison requires some adjustment. The prior year result included a concession-related impairment reversal of $108 million. Excluding this item, EBIT increased by 6.5%, and the adjusted EBIT margin improved by 0.5%. ROIC was 13.8% on a last 12-month average basis. The decline compared with last year reflects higher capital employed as we continue to invest in growth.
Overall, Terminals continued to deliver strong underlying performance with record revenue and EBITDA, and continued attractive returns while investing for growth. Having reviewed the performance across the business, let me finish with our guidance for the full year. As Vincent Clerc mentioned, our strong year-to-date performance and continued favorable demand in Ocean support an earnings guidance upgrade. Based on our continued expectation of container market volume growth of around 4%, we now guide for underlying EBITDA of $14 billion-$14.5 billion, underlying EBIT of $8 billion-$8.5 billion, and free cash flow of greater than $3 billion. Our cumulative CapEx guidance remains unchanged for both periods shown. With that, we conclude the financial review and will proceed to the Q&A. Operator, please go ahead.
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star, then two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. In the interest of time, please limit yourself to one question. Anyone who has a question may press star and one at this time. The first question from Alex Irving, Bernstein. Please go ahead.
Hi, good morning. One from me. This comes down to your order for half a million TEU of capacity last quarter. If I understand the way you've described the market previously, terminal congestion makes global fleet growth a bit like, say, pushing on a string. Ships weighed at anchor and that blunts the drag on freight rates you might normally expect when fleet grows significantly. In which case, can you please help me to understand why the order for half a million TEU of capacity is not a huge capital?
Yeah. Thank you, Alex. There was a bit of noise on the line, but let me try to answer the question if I understood it correctly. I think basically, you have two things playing here. One is the trade is more and more imbalanced, as we mentioned, so more and more is depending on Far East export, and there is fewer full containers going back the other way in terms of ratio, which means you need more ships to move the same path of global trade or of the global market than what you otherwise would have had if you could use the slots both ways. Second thing is, there is an increased level of congestion. And what this means is some ships are sitting at anchor and waiting to be worked.
We expect that not to be a permanent feature, but to be a relatively often occurring feature in the coming years. Both actually pull in the same direction, that shipping becomes more capital-intensive because it takes more ships to move those containers, because when the ship waits at anchor, then basically your transit time, you could say, is extended by the same. If you do not invest to get in there, then the flip side of it is that you will shrink your volume base, because you are still caught in the waiting, but if you do not have extra ships, then you cannot come back and pick up the container.
If you want to be able to stay within the size that you are about having, then you need to be able to weather the level of congestions that you expect, and you need to be able to build on plans that build for more one-way trade. Both of them have the same results for all the shipping lines, that it means the capital intensity per FFE or per container actually slowly increases as a result of those imbalances.
All right. Thank you.
The next question from Parash Jain, HSBC. Please go ahead.
Yeah. Hi. One question from me. Vincent, if you are in a place to talk about how the start of 2027 might look like with your initial discussion with respect to Asia-Europe contracts, especially, are they faring better than what it was a year back, given the change in the spot rates? With more and more capacity returning back to the Red Sea by March, how should we think about the demand-supply situation in 2027? Thank you.
Yeah. Obviously, we are not guiding on 2027 right now. The contracting season is just really starting, so there is no data point at this stage to talk about. There will be a lot more of this when we meet again in February. What I can say, though, is the following. We are going to have a strong fourth quarter. In this fourth quarter, the spot rates will be significantly higher than they were in the fourth quarter of last year. There is some level of correlation between the background of spot market you have when you enter the contract negotiation and where the contract negotiations actually land. That is about as far on the plank as I can go at this level, but I think that is an important point.
Perfect. Thank you.
With respect to Bab-el-Mandeb and return to the Red Sea, I mean,
Yes
we are two-third returned. The market in general is more than half. It has had so far no real impact on freight rates, which is also what we said to you last quarter. We don't expect that this is a major factor. I think the return will continue barring new development in the region and will be there. And I think that with respect to supply and demand for the years to come, I can only go back to what we mentioned last quarter, which is that it will continue to be a volatile environment. If you remember, the first quarter of this year was not good from a profitability perspective.
Yeah.
There will be other quarters like this in the coming three years, but there will also be, as long as the demand side continues to be what it has been for the last three years, there will be a lot of rate events because the Landside infrastructure in quite a few nodes around the globe is starting to have a hard time coping with the volumes that we're bringing in. And then you see these congestions, and then you see some difficulties where actually the supply and demand, or what drives the prices moves away from what is supply and demand, what the supply and demand model on Ocean would imply, because the bottleneck is somewhere else. You need to think of this as it's not always the Landside that decides, and therefore, when it don't, you might see some weaker rate environments.
But when they do, you will see this sharp correction, as we've just seen in the last two quarters. And that should be a feature that repeats itself in the coming years. Hence, we do expect high volatility, but a better average earnings over the period, despite that high volatility.
Yeah. Perfect. Thank you.
The next question from Harishankar Ramamoorthy, Deutsche Bank. Please go ahead.
Yeah. Hi. Good morning, everyone. Maybe I can ask one and then join the queue. I had a question around the rates in Q3. In recent quarters, your absolute rates have been very similar to the CCFI averages. Looking at the CCFI, I would have expected you to print something higher on rates. Put differently, CCFI grew 38% quarter-on-quarter. Your own rates have been up 20%. Would that be an explanation for this? Should we expect this to catch up into Q4?
I think you need to look at the fact that our rate moved significantly faster than our competition in the second quarter. I think where your model might have gotten wrong-footed, that's just a hypothesis from my side, is we were significantly faster at translating the rate opportunity into money in the second quarter. You see that if you compare to what other lines have done. That's what it means that then from Q2 to Q3, there was less of a jump than maybe what you had anticipated. If you look at some of the other carriers that have published either revised guidance or results in the last few days, then you will see that they saw less than us from Q1 to Q2, and more than us from Q2 to Q3, because we're basically converging to the same market levels that we all operate in.
Those levels, actually, both the SCFI and the CCFI have been remarkably stable over the last few months, and have continued to be stable all the way until the latest data.
Thank you.
The next question from Muneeba Kayani, Bank of America. Please go ahead.
Good morning. I wanted to ask around your volumes, which you said were impacted by congestion. It seems to be below kind of the market growth in 3Q. How do we think about this going forward? Will congestion kind of remain a constraint, or was it just during the peak season in 3Q, and then off-peak, you have a bit more wiggle room? How should we think about your relative performance in the fourth quarter? Just overall, what is the demand environment? Is it a 4% growth that you are expecting for the market in 4Q?
Hey, Muneeba. As we guide, we expect the market to grow around 4% for the year, and we expect our performance for the year to be also around 4%. As you rightfully point out, sometimes from one quarter to the other, volume might be a little bit more than the 4%, a little bit less, a little bit depending on when we are phasing in a new string or when we are more affected by some congestion in a certain port than others. You will have, at the margin, on a quarter-to-quarter, it will wiggle a little bit around the market. Certainly, in Q3, after a very strong performance in Q1 and two, in Q3, we could lift a little bit less during the traditional peak because of that congestion. That is correct.
But we expect for the year to basically maintain our share and grow with the market, and we expect next year to be able to do the same thing. We will guide on what that market growth is in February, and then our volume growth will be in line with that. So, that has been the plan now for the year. It will continue to be the plan next year, and I think that is We have enough levers between charter markets, new buildings coming, and so on, that we can keep this up. But exactly, maybe back to the first question, you can see if you do not invest in the fleet over time, if congestion keeps on getting worse and worse, that this is impacting your ability to just keep up with the volumes as it did in this quarter.
But I see this more as a blip than something that worries us in any way.
Thank you.
The next question from Lars Heindorff, Nordea. Please go ahead.
Yes, morning. Thank you for taking my question. It is on the capacity and a little bit combined with the volume growth, perhaps. The return to Suez, you say you are round about 2/3 back. I mean, all those equal, that must have led to quite a bit of capacity being freed up. I am interested in the amount of capacity you freed up, which all is equal, I assume that you have to deploy it somewhere else, which should then in turn be able to facilitate a bit more growth. Also looking a bit further ahead, when you are done with the full implementation back to Suez, how much capacity will then be freed up? Then maybe as a follow-up, do you have any plan on chartering any new vessels?
Hey, thanks, Lars Heindorff. We have now. If you look at this quarter, the base is full Gemini against Gemini. It means that some of the benefits that we saw year-on-year for fourth quarter in terms of asset turns from Gemini, now we are up against the same baseline. If we want to continue to grow with the market next year, we are going to need to charter in a bit of tonnage to do that. For the most part, this is already secured for next year. Furthermore, as you mentioned, the return to Suez is freeing some capacity. It takes a while for that capacity to be available because obviously the ships need to fulfill their full voyage, which is still a 13- to 14-week trip for a ship between Asia and Europe before they are available to phase into a different service.
But it is correct that this is freeing capacity, which then can help being redeployed in different areas. How much capacity this add on a weekly basis depends on where we redeploy it, because it takes six ships to go to the West Coast of the U.S. You take a lot more ships if you go to the East Coast of South America. It is pretty hard for me to give you a number for what you should expect, but you should expect indeed that this allows us for the fourth quarter to open up a little bit of capacity compared to what we had available in the third quarter on a weekly basis.
All right. Thank you.
The next question from Cristian Nedelcu, UBS. Please go ahead.
Thank you very much. It is a question on capital allocation. It has two parts, if you allow me. Maybe firstly on the Ocean side, you mentioned earlier on the call expectations for better average earnings through the next years due to congestion. You mentioned the capacity constraints, and if I do the math on your current order book today, I think your market share in Ocean will shrink down further towards something around 11% by 2030. Having this in mind, what do you think is an appropriate market share that you should have in Ocean for the next few years, having in mind all these data points? The second part, if I sort of think, you have $3.4 billion of net cash currently on the balance sheet. Your return on capital employed in Terminals is very strong. Through Logistics, you have made progress with the integrations.
How do you think about allocating capital to Terminals and Logistics, both in CapEx and in acquisitions for the next few years? In connection to this, is it fair to assume the returns that you get in Terminals and Logistics are better than the returns that you are getting on the share buyback today, or not really? Thank you.
Yeah. Thank you for that question. When we look at market share, we look at market share in terms of volume share, not necessarily capacity, because that capacity is a bit misleading. It is like if you are in retail, measuring this in square meters rather than in revenue. We look at it in containers, and we have today a market share of about 14%, and I would expect that this is what we are going to have in 2030 something. That is what we have, and since the market is growing faster now, three years in a row from what we anticipated, there was a need for us to catch up on some of the capacity we would be lacking. There are different other levers that we can use so that we can keep up with the market to stay around that capacity for the foreseeable future.
In Terminals, you are correct. I think we mentioned the shortage of capacity on the Landside. One discussion around that is what it means for freight rate. The other question is what it means in terms of growth potential and earnings potential for the Terminals, because, of course, Terminals are, in general, in a very positive supply and demand situation because of that shortage of Landside infrastructure. As governments and port authorities are trying to debottleneck this by bringing new capacity online, you see tenders coming on, and we took the example of Suape this time. You have examples in Da Nang, and you have a lot of other things that are ongoing. So, you will see, I think, over the coming years, you will see a higher level of tendering activities for new facilities.
The thing is that these facilities take a while to develop, of course, but it means also that from a capital allocation perspective, given the returns that we are having in APMT, and the fact that we think these returns will be sustained in the portfolio, and if we can develop, we can bring a lot of new facilities online that would deliver similar returns, we look at it very, very positively at everything that we can do, provided that we do not dilute ourselves in the process and overstretch ourselves. So, this has a strong priority. I think on Logistics & Services, there are some areas that are doing very well, and there we would be inclined to, if we find the right candidate, to also dedicate capital to further growth.
As we mentioned in the call, there is a couple of areas still where I think the focus needs to be on margin restoration and performance more than M&A. We continue to scan, and we want to make sure we have enough firepower there should the right thing occur, that we are not constrained from there. So, I think back to your initial questions, I think the balance sheet that we have allows us to seize the opportunity that is going to come in Terminal. It allows us to maintain our market share in Ocean and seize the opportunity of having a better market for the years to come, and it allows us also to do what we want to do in Logistics.
After that, from a question of distribution or share buyback, I think that is something I would like to come as we guide again on that in February. But I think those are the opportunities. I think the stronger performance that we have and the more benign market dynamics that we are seeing across the different sectors for the years to come means there is also more opportunities today to reinvest into the business than there was just a few years ago. How we trade off the different things, I think that will have an influence. But that is something we can talk about in more details at the beginning of next year.
Thank you very much.
The next question from Ulrik Bak, Danske Bank. Please go ahead.
Yes. Hello, Vincent and Robert. Thank you for taking my question. Last week there were some news out that you were ordering additional vessels on top of the ones that you mentioned in your prepared remarks, another 570,000 TEUs. If I convert those TEUs that you ordered to CapEx, on my math, I get around $12 billion between now and 2030. With the delivery in 2029 and 2030, adding maintenance CapEx of $3.5 billion-$4 billion, annual CapEx for these years could be total around $10 billion per year. Does that sound right, or am I missing something here? Thank you.
Hi, Ulrik. It will definitely increase the CapEx towards the years that you mentioned, 2029, 2030. That's when these vessels will hopefully be delivered. It will also average for the next five years, stretch a bit the guidance that we had in the past. I will definitely provide a bit more information at the beginning of the year, how we look at it. The numbers that you provided for look, to us, look a bit on the high side for these particular years.
Thank you. Then perhaps a follow-up on your implied Q4 CapEx guidance, because you have invested around $1 billion per quarter this year. You keep your CapEx guidance for this year unchanged, which implies around $2.7 billion in Q4. Please elaborate on that increase quarter-over-quarter, please.
Yeah, some has to do with the fact that we ordered vessels. There is some as down payments, and that is to a large extent making up the increase in Q4. Whether we land on the higher limit of the guidance, we will see, but that is the main reason, the investment into the fleet and the down payments.
Thank you.
The next question from Kristian Godiksen, SEB. Please go ahead.
Thank you. Also a housekeeping question on the free cash flow side of it. Turning to the net working capital, just wondering if you could elaborate on your assumptions for what is included in your guidance for 2026, where you saw considerable headwind in the Q2 numbers.
Thank you for that question. That is actually a good problem to have, because it is nothing else than translating the higher turnover into invoices to the customer. So, it is a pure timing issue. We will still have a little of that impact into the next two quarters, because again, compared to previous periods, freight rates are much higher. Then we will see how freight rates develop, but then it should basically phase out. So, there should not be at least a year-on-year comparison impact or a drastic impact anymore. What we also have on the working capital is the cost, the inventory cost, which cost us more than it used to be for bunker.
Yeah, especially so, could you maybe So, if oil prices stays at this level, then we should not expect major changes on the inventory side. Is that what you are hearing?
That is correct.
Okay. Perfect. Thank you.
The next question from Alexia Dogani, JP Morgan. Please go ahead.
Yeah, good morning. Thanks for taking my question. Just firstly, a clarification, Vincent. Are you planning another vessel order?
I mean, we order ships every week, Alexia. Not every week, sorry. No, no, every year, sorry. Don't quote me on every week. Every year, we order ships. That's part of the renewal program, and that's also part of the cycle that we have, that I just mentioned, where we need to catch up on the higher market growth and make sure that we're also equipped to withstand whatever congestion, or the congestions that we expect to be there and be able to hold on to that growth, not be victims every time congestion happens. You should expect I mean, we're in regular dialogue with yards, and sometimes we place orders, sometimes we don't.
But we're constantly working on what is the right way for us to renew the fleet and what is the right way for us to just make sure that we position our network to be as competitive as possible. Yes, there will be orders coming in the coming months, as we should expect always.
Okay. I guess my real question is, this is quite a big change in your integrator strategy. When that was introduced, it was all about maintaining a container capacity at 4.1 million-4.3 million TEUs. You're now at 4.7. There is more to come. What has actually changed in your view that you're now willing to double down on Ocean? And what is therefore the investment case for Maersk? Is it more about the shipping cycle again, or is it more to that? Because I think, we all focus on our spreadsheets a bit too much, but ultimately, what is the long-term direction of the group? Thank you.
Yeah. If you look at the return for the industry from 2010 to 2020, you get close to 1% or 1.5%. That is not attractive. If you look at the return for the industry from 2023, let's say, let's just forget the 2021, 2022, because that was maybe special circumstances with COVID. From 2023 until now, and also the expectations that we have for the years to come, this is significantly higher for the industry. So, what has changed is two things, much more benign market dynamics, and therefore, a view on the profitability in the segment as being more positive. So, which makes not an aggressive investment program, but simply retaining our current position, we think an attractive investment opportunity. That, for me, is a complement to the rest of our strategy, which remains the same.
We have, as I mentioned before, the wherewithal to support all three segments, all three of our businesses, to remain competitive and value-accretive for our shareholders. Therefore, this adjustment on Ocean, but a continued pursuit of growth in the Terminals business and a continued pursuit of growth in the Logistics business, which, for the Logistics, will be both organic whenever possible, and inorganic in some areas. So, I think in terms of investment case, I would say the same. The good thing and the positive thing that has changed is that actually the earnings potential of shipping for the years to come, I think, is higher than what was expected at the inception of the strategy, hence the adjustment for that sector.
Okay, we shouldn't be worried about the 45% order book to fleet ratio anymore then?
Well, I think that here's my view on this. If you look at order book over expected market growth, the order book has been too big for the market growth for the last 20 years, and yet here we are, all ships are full. That's the first reflection. Maybe it's time to relook a bit at the model. I think we've made quite a lot of analysis on this. Somehow, these models are not very accurate. The other thing is, there is a very high level of ordering activity. Certainly, some of the years that we have ahead will see ship deliveries that are well ahead of what market demand has. It will eventually translate into a period of adjustment.
Whether this happens next year or in five years, because congestions kind of provide this more positive environment, as we've seen last year, as we've seen this year, I don't know. I don't think that I have never seen a downturn in shipping that lasts more than three to four quarters. I think that even with the order book that there is today, there is sufficient lever for shipping lines to weather whatever adjustment there needs to be, either by returning chartered tonnage to owners. In our planning, we are able to, within a year, to always return 10%-15% of our fleet to owners if we need to get back into a smaller size because the market isn't there for it. I would assume that our competitors have some similar views on what type of flexibility they build in their portfolio.
There is a lot of pent-up scrapping that needs to happen. There is a lot of, with the current energy price, a lot of further slow steaming that could happen. There will still be a lot of congestion. I think that we're still within something where I don't believe in a very negative outlook for the sector, no.
Okay, thank you.
The next question from Arthur Truslove, Citi. Please go ahead.
Good morning, everyone. Thank you very much. One question from me. Your pitch at Q2 was clearly that essentially when the equation between demand and port congestion gets beyond a certain point, freight rate growth is extremely strong. You obviously benefited from this in Q2 and Q3 with very strong freight rates on the back of port congestion. Optically, it now looks like port congestion is easing somewhat. Can you just talk a little bit about where we are now in terms of that equation, now that port congestion seems to be reducing? Thank you very much.
I think the way to think about this is what makes this extremely difficult to forecast is that congestion, it's almost I mean, in the statistics, you can follow utilization of the different Terminals or assets, and it raises 1% or half a percent or 0.1% at a time, and then nothing happens. Then at some point, you cross a tipping point, and then a lot happens. It's a bit the same with when it decongests. It has decongested so far quite a bit from the peak of congestion, because there is an influx of tonnage being freed from Suez and so on. But so far, we have not crossed the tipping point, so it has had no impact on freight rates. Hence also our view on the fourth quarter and the fact that the quarter will be strong throughout.
It's hard to tell you where the tipping point is and whether something else is going to happen before that kind of throws it further away from that tipping point and back to even higher freight rates, or whether at some point it will decongest for a while until the next peak or until the next weather event or labor event or whatever that might be, and then we get back there. But I think we're so close to the ceiling that we're going to cross these tipping points back and forth quite a bit in the coming five years. That's why we're going to see that volatility. This is, I want to say that again, our belief, because I read some of the notes, like people don't believe it's going to be higher rate forever. We don't believe in higher rate forever.
We believe in very volatile rates the next five years, where these tipping points will be crossed multiple times, and where there will be quarters such as the one we just had that are very profitable, and there will be quarters such as the one we had in Q1 that are not profitable, and that this will average into something that maybe a bit like last year or a bit like this year, but certainly much better than what we've seen on average from the 2010 to 2020 decade.
Thank you very much. Very clear. Thank you.
The next question from Marco Limite, Barclays. Please go ahead.
Hi. Thank you very much for the opportunity to ask a question. Just back to the demand-supply picture in the medium term. We have been talking about strong demand and capacity being tight for whatever reason. My question to you is, what is your view on the shipping players more broadly? Do you think that container shipping lines have become more disciplined in terms of capacity, how they manage disruption, how they price, and therefore, let us say, competition now is, let us put it that way, less aggressive on volume growth and more focused on pricing? Thank you.
I think that the shipping lines' ordering behaviors have not changed, but the shipping lines' operating models have evolved towards being much more rational when it comes to dealing with situations of either over or under capacity and how pricing reacts. That is what I think you see playing since after COVID, basically. That is one of the core explanations to what has happened profitability-wise in the last four years.
Do we think that alliances play a role in that sense or not? Thank you.
I do not think alliances play a role in that. If anything, what maybe they do is they make it a bit easier to adapt capacity to demand because it is bigger networks, so you have more flexibility in having a bigger network than you have if you have a smaller network, which is a positive. Otherwise, I think from a competitive behavior, I do not think it makes any difference.
Thank you very much.
This was the last question. I would like to turn the conference back over to Vincent Clerc for any closing remarks. Thank you.
All right. Thank you again for joining us today, and thank you for all the good questions. To summarize, we had a really strong quarter across all of the three segments. In Ocean, sustained high spot rates supported a significant increase in earnings. At the same time, our fleet investments will ensure that we have the capacity to grow with the market and support the long-term competitiveness of our network. In Logistics & Services, we maintained good growth momentum and improved margin while we remain focused on the further potential in Solutions. In Terminals, we continue to deliver strong operational and financial performance while investing in new capacity for growth. Finally, on the back of these strong results and continued strong market, we have upgraded our full-year guidance. Thank you for your attention, and see you soon. Bye-bye.