Annual Report • Mar 27, 2013
Annual Report
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hamburger hafen und logistik aktiengesellschaft Annual Report 2012
| HHLA Group | |||||
|---|---|---|---|---|---|
| in € million | 2012 | 2011 | Change | ||
| Revenue and Earnings | |||||
| Revenue | 1,128.5 | 1,217.3 | - 7.3 % | ||
| Pro forma revenue1 | 1,103.6 | 1,119.2 | - 1.4 % | ||
| EBITDA | 307.5 | 333.4 | - 7.8 % | ||
| EBITDA margin in % | 27.2 | 27.4 | - 0.2 pp | ||
| Pro forma EBITDA1 | 288.2 | 337.2 | - 14.5 % | ||
| EBIT | 186.3 | 207.0 | - 10.0 % | ||
| EBIT margin in % | 16.5 | 17.0 | - 0.5 pp | ||
| Pro forma EBIT1 | 166.8 | 212.7 | - 21.6 % | ||
| Profit after tax | 111.8 | 118.8 | - 5.8 % | ||
| Profit after tax and minority interests | 72.4 | 89.3 | - 18.9 % | ||
| Cash Flow and Investments | |||||
| Cash flow from operating activities | 210.5 | 266.1 | - 20.9 % | ||
| Investments | 196.5 | 128.7 | 52.6 % | ||
| Performance Data | |||||
| Container throughput in thousand TEU | 7,183 | 7,087 | 1.4 % | ||
| Container transport 2 in thousand TEU |
1,213 | 1,887 | - 35.7 % | ||
| Pro forma container transport1 in thousand TEU |
993 | 992 | 0.1 % | ||
| in € million | 31.12.2012 | 31.12.2011 | Change | ||
| Balance Sheet | |||||
| Total assets | 1,768.5 | 1,811.5 | - 2.4 % | ||
| Equity | 562.0 | 644.7 | - 12.8 % | ||
| Equity ratio in % | 31.8 | 35.6 | - 3.8 pp | ||
| Employees | |||||
| Number of employees as of 31.12. | 4,915 | 4,797 | 2.4 % |
| Port Logistics Subgroup3,4 | Real Estate Subgroup3,5 | |||||
|---|---|---|---|---|---|---|
| in€ million | 2012 | 2011 | Change | 2012 | 2011 | Change |
| Revenue | 1,101.2 | 1,190.6 | - 7.5 % | 32.4 | 31.7 | 2.3 % |
| Pro forma revenue1 | 1,076.3 | 1,092.6 | - 1.5 % | |||
| EBITDA | 290.4 | 317.3 | - 8.5 % | 17.1 | 16.2 | 5.6 % |
| EBITDA margin in % | 26.4 | 26.6 | - 0.2 pp | 52.7 | 51.1 | 1.6 pp |
| Pro forma EBITDA1 | 271.1 | 321.0 | - 15.5 % | |||
| EBIT | 173.1 | 194.8 | - 11.1 % | 12.8 | 11.9 | 7.7 % |
| EBIT margin in % | 15.7 | 16.4 | - 0.7 pp | 39.6 | 37.6 | 2.0 pp |
| Pro forma EBIT1 | 153.6 | 200.5 | - 23.4 % | |||
| Profit after tax and minority interests | 66.6 | 84.0 | - 20.8 % | 5.9 | 5.3 | 11.5 % |
| Earnings per share in €6 | 0.95 | 1.20 | - 20.8 % | 2.17 | 1.95 | 11.5 % |
| Dividend per share in €7 | 0.65 | 0.65 | 0.0 % | 1.20 | 1.00 | 20.0 % |
1 Pro forma: applying the new ownership structure in the Intermodal segment
The transport volume was fully consolidated
3 Before consolidation between subgroups
4 Listed Class A shares
Non-listed Class S shares 6
Basic and diluted
Business Model
Germany
Hamburg
Czech Republic
Slovenia
Denmark
Australia/ Pacific
Asia/ Far East
As a point of intersection for global sea freight traffic, Hamburg offers unique strengths in connecting Central and Eastern Europe to all important regions of the global economy.
Proportion of freight volume transported by HHLA 2012
Proportion of freight volume handled by HHLA 2012 HHLA's end market exposure HHLA's end market exposure
Twenty-foot Equivalent Unit (TEU) Forty-foot Equivalent Unit (FEU)
27 % Feeder ships 27 % Feeder ships
Mediterranean/ Middle East Africa South America Central America/ Caribbean North America HHLA Seaport Terminal • HHLA Terminal Hub • HHLA Inland Terminal
Economic growth and container throughput, 1998–2012 index-based, in %
Global gross domestic product Global container throughput
Source: Drewry, IMF
I Internationalisation of procurement, production and sales
I Economic development in key markets I Transport and ship operating costs
I Transport geography and nautical access
Largest ports in the North Range in 2012 in million TEU
Logistics chains are the prerequisite for the development of the global economy. As an integrated handling, transport and logistics provider, HHLA offers services along this logistics chain between the overseas port and its European hinterland. 6 % South America
Excluding throughput in Odessa, Ukraine
Seaborne handling by HHLA 2012 im Hamburger Hafen nach Fahrtgebieten 2012
• Port connected to Hamburg through direct liner service Origination/destination regions served by shipping lines
HHLA hinterland traffic via Hamburg
| 1 TEU | 1 FEU | |
|---|---|---|
| Volume | 33 m3 | 67 m3 |
| Empty weight | 2.3 t | 3.8 t |
| Max. weight | 24.0 t | 30.5 t |
We are one of Europe's leading port logistics groups. At our seaport and hinterland hubs, we link three different carriers – ships, trains and trucks – to create powerful logistics chains which set both economic and ecological standards. With our pioneering, integrated services, we organise top-quality and reliable transport between the seaport and the European hinterland. To achieve this, we continuously develop our effi cient container terminals, high-performance transport systems and diverse range of logistics services.
Mega-ship at HHLA container terminal in Hamburg
HHLA's container terminals link ships and rail networks to create effi cient, eco-friendly transport chains. The company's three high-performance terminals – Altenwerder, Burchardkai and Tollerort – make the Port of Hamburg the most important container hub between Asia and Central/Eastern Europe. Technical innovations and automated work processes enable a level of productivity which sets both national and international benchmarks. With its Container Terminal Odessa in Ukraine, HHLA also operates one of the leading handling facilities in the fast-growing region around the Black Sea. With its service companies, HHLA provides an extensive portfolio for all container handling needs.
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Revenue | 697.5 | 712.9 | - 2.2 % |
| EBIT | 146.2 | 195.5 | - 25.2 % |
| EBIT margin in % | 21.0 | 27.4 | - 6.4 pp |
| Employees as of 31.12. | 2,935 | 2,898 | 1.3 % |
| Container throughput in thousand TEU | 7,183 | 7,087 | 1.4 % |
Revenue in € million
HHLA's Intermodal segment offers a comprehensive transport and terminal network for containers by road and rail. While the Intermodal companies create high-performance rail links between ports in Northern Europe and their hinterland, a growing number of inland terminals also provide the high quality of service demanded by maritime logistics in inland regions. The market leader Metrans links the Czech Republic, Slovakia, Hungary, Slovenia, Austria and parts of Germany with the German seaports. Polzug Intermodal focuses on Poland and the CIS countries. The container forwarder CTD operates truck services in the metropolitan areas of major German cities and is the marketleading provider of transport services within the Port of Hamburg.
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Revenue | 299.7 | 357.6 | - 16.2 % |
| EBIT | 41.3 | 24.6 | 68.0 % |
| EBIT margin in % | 13.8 | 6.9 | 6.9 pp |
| Employees as of 31.12. | 1,010 | 902 | 12.0 % |
| Container throughput in thousand TEU | 1,213 | 1,887 | - 35.7 % |
Revenue in € million
A wide range of services are pooled in the Logistics segment – from consultancy and specialist handling services to storage and contract logistics. Unikai Lagerei und Spedition is the competence centre for vehicle logistics in the Port of Hamburg. The Frucht- und Kühlzentrum is the German market leader for fruit handling and Ulrich Stein GmbH offers essential services for the fruit import sector. Through Hansaport, HHLA also holds a stake in Germany's largest terminal for ore and coal handling. HHLA Logistics stands for high-quality logistics solutions, and HPC Hamburg Port Consulting and its subsidiaries Uniconsult and HPTI successfully market HHLA's expertise in port technology and project development around the world.
HHLA Real Estate boasts a broad portfolio of services, from project and property development to modern district management and active urban redevelopment. At the heart of its activ ities is the careful, sustainable renovation of Hamburg's Speicherstadt historical warehouse district. HHLA aims to make this an exemplary redevelopment project. The unique atmosphere of this landmarked warehouse complex attracts tenants from the media, advertising, culture and fashion sectors. On the northern banks of the river Elbe, HHLA and FMH Fischmarkt Hamburg-Altona GmbH also preserve part of the city's fi shing tradition. The property is now embedded in an intelligent site development concept that offers fi sh trading, offi ces and fi ne dining.
| 2012 | 2011 | Change |
|---|---|---|
| 91.9 | 126.7 | - 27.4 % |
| 4.4 | - 1.0 | – |
| 4.8 | - 0.8 | – |
| 311 | 422 | - 26.3 % |
Revenue in € million
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Revenue | 32.4 | 31.7 | 2.3 % |
| EBIT | 12.8 | 11.9 | 7.7 % |
| EBIT margin in % | 39.6 | 37.6 | 2.0 pp |
| Employees as of 31.12. | 37 | 38 | - 2.6 % |
Revenue in € million Real Estate Share of Revenue 2.9 %
Klaus-Dieter Peters Chairman of the Executive Board
Despite the challenging economic conditions, Hamburger Hafen und Logistik AG (HHLA) stood its ground well in the 2012 fi nancial year. In a stagnating market environment, we consolidated our position in container handling and laid the foundation for future growth by realigning our rail companies and implementing a range of modernisation measures at our container terminals.
Global economic growth slowed in the course of 2012. For HHLA, this was primarily refl ected in a signifi cant decline in imports from China to Europe. At the same time, the earnings situation remained tense for our most important customer group, container shipping companies. Rival ports in Europe continued to build up overcapacity at their terminals. Moreover, the long overdue work to deepen the navigation channel of the river Elbe – the most important infrastructure project for the port of Hamburg – was delayed yet again, resulting in narrow time slots for the handling of mega-ships and thereby generating additional costs for us.
Against such a backdrop, we have been able to record volume growth slightly above the market average in our Container and Intermodal segments, which together account for around 90 percent of revenue. In the case of container throughput, we were able to more than compensate for the decline in Far East traffi c – due mainly to strong growth in European feeder traffi c and the rise in trade with North America. Our container transport companies were also able to hold their ground well. They successfully expanded their range of services, enabling them to keep transport volumes stable in a slightly shrinking market.
As a result, we were able to fulfi ll our forecast from summer 2012 with revenue of € 1.13 billion and an operating result of € 186 million. The operating margin narrowed slightly from 17.0 percent to 16.5 percent in a year-on-year comparison, but it remains high. Together with our excellent liquidity position and sound balance sheet structure, it therefore enables us to fi nance capital expenditure almost entirely from our own funds.
This earnings power is also refl ected in our dividend proposal. As in the previous year, the Executive and Supervisory Boards of Hamburger Hafen und Logistik AG (HHLA) will propose a dividend of € 0.65 per entitled share for the 2012 fi nancial year for the publicly listed shares of the Port Logistics subgroup at the Annual General Meeting on 13 June 2013.
We adjusted our original forecast in line with current developments on two occasions during the year. The fi rst time was on 15 May 2012, as the successful realignment of our Intermodal segment led to changes in the ownership structure and thus to changes in revenue and earnings due to consolidation. On top of this came additional expenses caused by high startup costs from reorganising operational and work processes as part of the modernisation of our Container Terminal Burchardkai.
The second adjustment was made on 25 July 2012, when a sluggish economic environment began to take its toll on our handling volumes – after the industry and experts alike had predicted an increase in container traffi c at the Northern European ports at the beginning of the year. The fl exibility and scalability of our expansion projects enabled us to reduce the volume of investment in line with actual demand trends. In particular, we postponed investments aimed at increasing container handling capacity in Hamburg and Odessa, enabling us to reduce our original capital expenditure planning for the 2012 fi nancial year from € 280 million to around € 200 million.
In 2012, we further developed our business model of combining excellence at seaport terminals with top-quality, reliable transport chains for the European hinterland. The new, semiautomated, integrated system at the Container Terminal Burchardkai, the scene of our largest investment project, was launched at the end of 2012. Together with additional process innovations at our other facilities, this has improved our long-term ability to handle the latest generation of container ships.
Attracting and retaining cargo for our seaport terminals is a key part of our strategy and we have made considerable headway in this fi eld with the realignment of our rail companies. After unbundling our shareholdings, we now have majority control of Metrans and Polzug. This enables us to align our entire transport network fi rmly with the requirements of maritime logistics. In doing so, we are making increased use of our own production facilities, such as inland terminals, specialised container-carrying rail wagons and locomotives. We are also expanding our network of high-performance shuttle transport systems. This has helped us to boost the proportion of environmentally friendly rail traffi c used to transport goods from our terminals to the hinterland.
In the past year, we also made a further step towards achieving our sustainability targets. We reduced specifi c CO2 emissions – the amount of CO2 produced per container handled – at our terminals by 4.7 percent in 2012, bringing the total reduction to 24.5 percent since 2008. This means that our goal of reducing specifi c CO2 emissions by at least 30 percent between 2008 and 2020 is already within reach.
We became the fi rst maritime company to issue a declaration of compliance with the German Sustainability Code (GSC) in the reporting year. By publishing this, we have made a special commitment to our sustainable business model. In addition, we have applied the GRI (Global Reporting Initiative) guidelines for the fi rst time in this annual report. These constitute the most widely used sustainability reporting standard in the world at present.
What can we expect from the 2013 fi nancial year? Although the mood brightened somewhat at the beginning of the year, we are still facing signifi cant macroeconomic risks. The earnings situation in the container liner shipping sector is likely to remain tense as many new mega-ships join the fl eet. Similarly, our rival ports will continue to build up terminal overcapacities. Current forecasts indicate that growth in container throughput at the ports in Northern Europe will come to a virtual standstill.
With this in mind and in view of the delay in dredging the river Elbe, we currently expect container throughput to remain unchanged compared with 2012. Following the realignment of our container transport business, we expect our companies to enjoy strong growth from network expansion in fi scal 2013. Under these conditions, we aim to achieve a slight year-onyear increase in revenue. General cost increases despite stagnant container throughput will have a negative impact on earnings and may outweigh any gains in revenue. The increased earnings potential of our rail companies will only have a limited effect on the result in 2013 due to the additional costs incurred to penetrate new markets and thus fail to compensate for the one-off gain of € 17 million in 2012 from the realignment of the Intermodal segment. Based on these revenue and cost expectations, we aim to generate an operating result (EBIT) in a range between € 155 and € 175 million in the 2013 fi nancial year.
We believe that we are well prepared for the coming challenges in a persistently adverse market environment. We will stand fi rmly by the measures introduced and upheld in 2012 to strengthen our medium and long-term growth potential while endeavouring to stabilise our high level of operating income. This will give us greater fl exibility to confront risks and enable us to take full advantage of the opportunities offered by our European logistics markets in a growing global economy based on an increasing division of labour.
Yours,
Klaus-Dieter Peters Chairman of the Executive Board
" Our terminals in Hamburg are an ideal hub for the global transport chains between the growth regions of Asia and those of Central /Eastern Europe."
KLAUS-DIETER PETERS, CHAIRMAN OF THE EXECUTIVE BOARD
With the realignment of its intermodal systems and the continuation of its terminal modernisation programme, HHLA took a number of important steps in the 2012 fi nancial year to pave the way for future growth.
Responsibility
Mr. Peters, the economic environment became considerably gloomier in 2012. This comes on top of the crisis in the shipping industry and growing overcapacities for container handling. Should HHLA expect less favourable economic conditions on a permanent basis?
Klaus-Dieter Peters In contrast to the years leading up to 2008, there is indeed no indication at present that we will return to strong, double-digit growth rates in freight volume in the short term and thus to a situation in which the terminals dotted along the coast of Northern Europe are at full capacity. At the same time, shipping companies are in poor fi nancial health, having invested heavily in much larger container ships. We have to deal with this situation, just like our competitors. HHLA is responding by making timely preparations for the development in ship sizes with corresponding investments in stronger quay walls, larger container gantry cranes and modernising terminal operations. However, this decision to strengthen our market position costs money – especially in an industry as capital-intensive as port logistics – and does not immediately translate into increased earnings during the usual startup phase for such complex changes. Nevertheless, we strongly believe in laying such groundwork for future earnings power as we continue to operate in a largely stable growth market. Container traffi c is growing both as a result of and as a driving force behind the increasing international division of labour. With this in mind, Hamburg is an ideal hub for the global transport and logistics chains between the growth regions of Asia and America on the one hand, and the growth markets of Central and Eastern Europe on the other. This is also refl ected in the positive throughput fi gures we posted in the diffi cult year of 2012, with which we strengthened our market position.
Despite the delay to the project to dredge the river Elbe, the Port of Hamburg
" We are creating the optimum conditions for top-quality, reliable transport chains between the seaport and the European hinterland."
remains especially attractive to large vessels due to its handling capabilities and location. This is demonstrated by the fact that the largest container ships currently afl oat – which can carry more than 16,000 standard containers – are berthing at our high-performance terminals, along with an ever-increasing number of large ships. Hamburg is located well inland, bringing freight closer to customers at a low price and in an environmentally friendly way. At the same time, the Hamburg metropolitan region naturally attracts cargo from around the world due to consumption and production levels, as well as integrated logistics. Last but not least, we have better railway links than any other European port. However, the delay to the deepening of the navigation channel
prevents Hamburg from realising its full potential. Ships are often unable to leave with a full payload and handling processes need to be organised in small time windows determined by high tide. This is currently increasing our costs.
There are many advantages to be had by every party along the transport chain: costs and negative environmental effects are reduced because ships can be optimally loaded and the timetable for terminal operating processes is more relaxed. We expect additional volumes and a lasting improvement to our competitive position. The last time the river Elbe was dredged in 1999, it resulted in an aboveaverage rise in volumes handled by our facilities.
We are continuing with measures to boost the performance of our terminals, which means investing in the modernisation and automation of our facilities. Particular focus is also being placed on overcoming peak loads, which continue to infl ate our operating expenses. Intelligent transport management across all modes of transport is one of our company's traditional strengths. We are currently increasing our contribution to ship management at the Port of Hamburg. Hamburg's position is also strengthened by the realignment of our Intermodal segment, and in particular the restructuring of our hinterland rail services with which we tie cargo volumes to the Port of Hamburg. All of these measures translate into more added value for our customers.
The core focus was on creating the optimum conditions to offer our customers a top-quality, reliable logistics chain for the transport of containers by rail between the European hinterland and the seaport terminal. This principle works particularly well if the individual parts of this transport chain interlock perfectly. To achieve this, we are increasingly relying on our own inland terminals, carriages and even locomotives. In order to develop our transport companies further, we have unbundled the stakes in our rail companies and are now able to consistently implement our intermodal strategy with high value added through Metrans and Polzug. In the medium term, we see major potential to develop the earnings power of this segment by making effi cient use of our own resources.
The real impact of this will unfold in the coming years. With our realignment and substantial investments in 2012, we laid the foundation for a strong increase in our quality transport services in growth markets. Southern and Eastern Germany, Austria and the surrounding Central and Eastern European countries have the greatest potential in this regard. As part of this programme, we enlarged our network considerably during the second half of the year – for example, by acquiring our fi rst terminal in Austria, the container rail terminal in the port of Krems on the river Danube. We also serve a whole host of other terminals in Austria, and now call at destinations in Germany – such as Munich, Nuremberg and Leipzig – with direct trains through our rail subsidiary Metrans. We built a large new container hub in Ceska Trebova (Eastern Bohemia/Czech Republic) in 2012, through which we have also been serving Austria since the beginning of 2013. Furthermore, we added an improved lightweight carrying wagon to our existing fl eet of carriages and purchased more locomotives. The restructuring of our railway subsidiary Polzug focused on strengthening our Polish hub in Poznan. For instance, we were able to cut journey times between the German seaports and Poznan by around a third. These measures also serve to consolidate the competitive position of the Port of Hamburg. The expansion measures for the container terminals and our increased focus on hinterland transport constitute a real win-win situation: high-performance seaport terminals help boost volumes transported to the hinterland, while exemplary transport systems raise the number of containers handled by the port.
The majority of our companies in this segment reinforce Hamburg's reputation as an all-purpose port. Its expertise in all kinds of goods is central to the Port of Hamburg's appeal. In many cases, our logistics companies also serve to complement our range of services. The vehicle logistics team at our multi-function terminal O'Swaldkai, for example, not only operates a handling facility for large RoRo ships but also packs German export ve hicles into containers and distributes them among Hamburg's container terminals. The segment's consulting activities also have a direct link to other Group areas. With over 100 employees, our consulting group not only markets our expertise around the world but also uses this know-how to successfully develop our own company.
There are a number of stable trends which often complement and feed each other in many ways. In particular, there is potential for above-average growth in trading with emerging markets and in transportation between emerging markets. This is demonstrated by the strong growth we have seen in traffi c to the Baltic states, for example. The growth in ship sizes on the most attractive global trading routes is another long-term trend. As a result, shipping companies are increasingly interested in pooling port calls by using high-performance hubs connected to the largest-possible, high-volume hinterland by an excellent network. The trend towards automation has also become much more important, along with the closer dovetailing of all processes along the transport and logistics chains. The emphasis here is increasingly on the availability of intelligent pre- and off-carriage systems. With this in mind, the reliability and performance of the respective transport chain's entire system are becoming key factors. Information chains associated with transport are also playing an ever-growing role. Finally, sustainability issues – and in particular climate protection – are having a greater impact on determining the routes
A textbook example of an environmentally friendly transport chain: the HHLA terminals in Hamburg link mega-ships and trains.
taken by goods fl ows. As a result, we believe that there is considerable growth potential for rail traffi c when it comes to overland transport.
We are superbly placed to benefi t from these trends, not least because we have been anticipating them for years and actively shaping and promoting them, for example, by automating our terminals and expanding our intermodal system for railway transport. Our business model of vertical integration along the transport chain is also proving successful, as we optimise and create intelligent links between individual elements. A further aspect of this approach is the automation and performance leadership of our container terminals, which we combine with a demand-oriented growth strategy by basing capacity expansion on actual demand trends. As a central interface between Asia and Central/Eastern Europe, Hamburg is ideally positioned to enjoy above-average growth. We use our intermodal strategy to make the most of this opportunity by opening up Central and Eastern European markets with high-performance, commercially viable and environmentally friendly railway transport systems.
They own a stake in a company with a successful, forward-looking business model which is well positioned in longterm growth markets and constantly enhancing its value. In the medium term, the modernisation of HHLA's largest container terminal and the realignment of rail traffi c will also pay off in the form of improved earnings and higher dividends. The deepening of the river Elbe's navigation channel would, of course, give this an additional boost.
What contribution does your company make to society and the environment? We make a signifi cant contribution to the quality and competitiveness of logistics " We set up transport chains that protect the environment and conserve resources, demonstrating how environmental and economic targets can be reconciled."
in Europe. Furthermore, we bolster the regional development of communities and economies around our sites on a sustainable basis with our high level of value added and commitment to society. We ensure that freight is transported in a way that conserves resources and protects the environment with the implementation of our ambitious climate protection targets at our facilities and our exemplary, eco-friendly transport chains, which demonstrate how environmental and economic targets can be reconciled.
We will have grasped the opportunities to boost earnings power and sustainably increased our company's value. We will have consolidated and built on our leading position in terms of performance and sustainability at our German and international container terminals, enabling us to fully exploit growth potential at our sites. We will have signifi cantly expanded our network for European hinterland transport by rail, serving most of Central and Eastern Europe with our own trains and inland terminals. We will have exceeded our climate protection target to cut specifi c CO2 emissions per container handled by 30 percent compared with 2008. We will occupy a leading position in the environmentally friendly and resource-effi cient operation of terminals.
DR. ROLAND LAPPIN, EXECUTIVE BOARD MEMBER
Financial management ensures that the company has suffi cient scope to invest in its future development. At the same time, shareholders participate in the Group's earnings by means of a comparatively high dividend ratio.
Responsibility
Dr. Lappin, 2012 was not an easy fi nancial year for HHLA. After all, the capital markets focus primarily on fi gures. How would you assess the company's performance from a purely fi nancial standpoint?
Dr. Roland Lappin First of all, it should be noted that our EBIT margin was well into double fi gures in 2012 – as it has been every year since our going public in 2007, including crisis-hit 2009. We earned a premium on our costs of capital and were able to raise the company's value once again. At the same time, cash fl ow from operating activities was well above capital expenditure again in 2012. We also have a very sound balance sheet structure with a low gearing ratio. Since our going public, we have always distributed a dividend with a high payout ratio. We will once again make a corresponding proposal to the Annual General Meeting 2013. All of this demonstrates our fi nancial stability and a robust business model. On the other hand, we also saw a fall in earnings in 2012. The main reasons for this were the additional expenses incurred by the delay in deepening the river Elbe's navigation channel and the cost of termin al reorganisation work in the Container segment. Initial expenses incurred as a result of the strategic realignment of the shareholder structure in the Intermodal segment as well as restructuring measures in the Logistics segment also played a role. Naturally, we are not satisfi ed with this decline.
We aim to enhance our earnings power at greater capacity util isation – which we need achieve do anyway over the long term in order to meet the investment needs of such a capital-intensive business as port logistics. Ultimately, the aim is to keep cost infl ation below the development of volumes and revenue so as to retain fi nancial stability at least and boost it further if possible. However, in view of the weak economic environment – fraught with risk and promising sluggish growth at best – as well as higher costs across the board and the diffi cult fi nancial situation of our shipping clients, it will not be possible to achieve this consistently in every short-term reporting period.
Like us, the capital markets were very disappointed by the court decision to stop the public infrastructure project to deepen the river Elbe's navigation channel for the time being, following a
protracted plan approval process. This triggered renewed concerns over the length of the procedure, which has understandably a strong impact on investors' future expectations. In addition to this, a mixture of economic concerns and the lingering crisis in the shipping industry served to dampen the general sentiments further. In such an environment, the re organisation of our intermodal traffi c and the further automation of our terminal operations also have a short-term negative effect as they both need time and initially incur additional expense before they bear fruit.
Does the capital market perhaps need a different kind of earnings orientation? Generally speaking, there is a discrepancy between the best possible short-
" It would be negligent to forsake long-term opportunities in favour of maximising short-term quarterly profi ts."
term return and sustainable earnings in the long term – particularly if your business depends on facilities with a useful life of 20 years or more. With regard to the extent of our investment activities, it is essential that we keep a watchful eye on trends in the transport chain. As Dr. Behn explains, we would not be able to keep pace with the development in ship sizes today had we not invested in berths. Furthermore, planning and real isation windows in our infrastructure-linked business are considerably longer than in other industries and it is not generally possible to quickly make up for postponed strategic investments. In this respect, we believe it to be negligent to forsake long-term opportunities in favour of maximising short-term profi ts. It goes without saying that we are working to return gradually to margin levels reached in previous years. In view of the opportunities already mentioned by Mr. Peters, we are generally confi dent of achieving this. However, we cannot avoid phases in which the company has to undergo structural change in order to adapt to new market conditions.
The most important thing for our capital market communications is to clearly explain why and how we are investing in future earnings, and how we are dealing with the current macroeconomic environment. However, that is not easy when you consider that automating our largest handling facility initially incurs additional costs during the start-up phase needed for such complex projects, and the cost mix changes before the effect on earnings takes hold further down the line. Nevertheless, we have been able to maintain a level of earnings which exceeds capital costs even in such an environment. This is demonstrated by an ROCE of 13.7 %. Furthermore, we have upheld a dividend policy which stipulates that at least 50 % of annual net profi t should be distributed to shareholders.
We will maintain our very stable balance sheet structure and make sure that our gearing ratio stays low. This will enable us to take development steps value enhancing or even to acquire companies under the right circumstances. We want to keep this powder dry for activities with long-term potential. This also means having the discipline to wait patiently for the right opportunity.
The company's operational and strategic alignment forms the basis for our earnings strength, which has also proved itself under adverse conditions. We constantly work to strengthen this foundation. However, the current earnings situation is considerably affected by the parameters which apply at present. We are currently under pressure from additional costs arising from the delay in deepening the river Elbe's navigation channel, coupled with growing surplus terminal capacities at rival ports and lower volumes in Far East traffi c as a result of economic developments. By contrast, the record margins seen in 2007 and 2008 were due to the full utilisation of almost every port in Northern Europe with strong double-digit growth rates in freight volumes, as well as highly profi table shipping lines.
We believe we can achieve signifi cantly higher earnings in the medium term, as we have done in the past. We are therefore continuing to optimise and modernise our facilities and processes. However, when and to what extent these measures will translate into margin growth also depends strongly on the development of our environment. The realisation of the project to deepen the navigation channel would really take pressure off our terminal's operational processes. Increased capacity utilisation coupled with a sustainable economic recovery and the return of shipping lines to stable fi nancial health would be just as important as to improve economies of scale and earnings quality.
" Large vessels are a welcome challenge for all of our terminals."
DR. STEFAN BEHN, EXECUTIVE BOARD MEMBER
HHLA is currently upgrading its handling facilities for large and very large container ships at signifi cant expense. The key to success here is intelligent automation and the continuous improvement of all terminal processes.
Responsibility
I Information Systems
On 12 December 2012, the world's largest container ship CMA CGM Marco Polo – which has capacity for more than 16,000 standard containers – moored in Hamburg at the HHLA Container Terminal Burchardkai. Did that present any special challenges?
Dr. Stefan Behn Large vessels are a welcome challenge for all of our terminals. We have been actively accompanying the development in ship sizes with foresight for many years now, not only pursuing an extensive programme of modernisation and expansion but also developing a range of innovative pro cesses. The results speak for themselves: we are regularly honoured for our outstanding handling performance. Because of this, the CMA CGM Marco Polo was less of a new challenge for the terminal than it was for the nautical staff, the pilots and the entire port management. This particular challenge, given the delayed deepening of the navigation channel, was successfully accomplished by the well-oiled cooperation of all involved. As a result, our feeder logistics centre (FLZ), which we operate together with another terminal company, will not only handle European feeder ships in future, but also coordinate the handling of large vessels in the Port of Hamburg.
We have been gradually implementing our expansion programme since 2005. It is all about getting the maximum capacity and performance out of the available space, which also makes sense from an environmental perspective – considering such aspects as the use of space and infrastructure. 2012 was a special year for this project. We brought the new system online with all its components and automation elements. There is a longer start-up curve for such complex systems, which is common for such projects. Additional costs are incurred by operating the existing system at the same time. This will also make itself felt during 2013.
Naturally, we asked ourselves this very question back in 2004 before launching the programme. We now know that we made the right decision – it would not otherwise have been possible to achieve the increases in volume and earnings. This concept also proved its worth during
" Today, we can see that we already correctly identifi ed the trends in terminal technology 15 years ago."
the economic crisis in 2008/2009. It enables us to achieve a scalable expansion speed, in which capacity growth can be adjusted in line with actual demand trends. All in all, HHLA benefi ts signifi cantly from this expansion strategy, in spite of the extra costs currently being incurred. This contrasts sharply with our competitors, who are currently having to cope with expensive surplus capacities for which there is no demand.
Following a start-up phase lasting several years, the CTA is now our most cost-effi cient facility. It has also set new standards in the handling of large vessels. We would certainly not have decided to carry out alterations while maintaining normal operations had we not had these positive experiences in Altenwerder. Our experience of automation and linking all the terminal processes to create a comprehensive control system has helped us enormously. Nevertheless, Altenwerder's system cannot be transferred to Burchardkai on a like-for-like basis. Rebuilding an established facility with a different layout, having to run two systems alongside one another and carrying out alterations without interrupting normal operations makes this a signifi cantly more complex project than the one in Altenwerder.
We already have eight of the modern automated storage blocks in operation. This has increased capacity from 2.5 to 4 million standard containers per year. In 2013, fi ve more large gantry cranes will be built for quayside handling. These will go into service later in the year. This will mark the completion of the quay wall with our new mega-ship berths at the port in Waltershof. The work will take our handling quality and capacity to a new level for our shipping clients. It will then be possible to handle vessels with capacities of 18,000 TEU here. The primary focus of future expansion phases is on expanding capacity. We will monitor demand trends and gradually increase our annual capacity from four to over fi ve million standard containers.
We remain the trendsetter when it comes to automation. Today, we can see that we already correctly identifi ed the trends in terminal technology some 15 years ago. Our Altenwerder concept serves as a blueprint for large terminal projects in cities such as Los Angeles/Long Beach, Rotterdam and London. We are currently applying this know-how to our other terminals while pushing forward with further developments. We are constantly enhancing performance and improving productivity at all of our terminals with a range of innovations. One example of this in 2012 was the simultaneous "twin transport" of two 20-foot containers at the Tollerort terminal using conventional straddle carriers, which are responsible for transporting boxes between the container gantry crane and the container yard. We achieved a substantial increase in productivity in a completely different area at the Altenwerder terminal: the Dual Cycle project combines loading and discharging using the automated gantry crane during ship handling, which makes for considerably shorter transport distances and fewer gantry crane movements. Technology is not an end in itself – it makes it possible to intelligently combine all the processes at the terminal and to dovetail them with transportation to the hinterland. We look after every link in the chain and are confi dent that this will enable us to maintain our leading pos ition when it comes to performance and reliability.
Our facilities have extended their environmental lead by consistently automating and electrifying as many terminal processes as possible and by making the best possible use of space. By the same token, the overall environmental " Technology is not an end in itself – it makes it possible to intelligently combine all the processes at the terminal and to dovetail them with transportation to the hinterland."
impact of the transport chains linked at our terminals has improved sustainably. It is possible that liquefi ed natural gas will be in widespread use as a fuel for large container ships as well by 2020. More over, the proportion of goods transported to the hinterland by rail will have grown considerably. We will have achieved new highs in terminal productivity. There will also have been substantial advances in the optimisation of the entire process chain from shipping traffi c on the river Elbe to the "last mile" in the European hinterland. Considerable improvements in data quality among all those involved in the logistics chain will have contributed to this.
" Information technology does not replace people; it broadens their possibilities."
HEINZ BRANDT, EXECUTIVE BOARD MEMBER
The demands being placed on interfaces in the global transport chains are increasing. HHLA's forward-looking personnel management policy is responding to this process with a comprehensive programme to advance the work organisation and to increase the level of qualifi cation among its employees.
Responsibility
HHLA modernises its terminals on an ongoing basis. A new automation system is being introduced at the Container Terminal Burchardkai, where you have made fundamental changes to the work organisation. How will work change?
Heinz Brandt Work will become more sophisticated and varied – meaning a greater need for employees with advanced skills, such as IT specialists or technicians for repair and maintenance work. At the same time, greater throughput volumes per ship will result in higher peak loads, which require better dovetailing between each and every process at our terminals. However, this will also make the work more interesting, as each person will have a greater understanding of how everything fits together. This development will be accompanied by a variety of education and training courses. For example, in recent years we have been training 150 of our bluecollar workers to become specialists in port logistics. This is a skilled vocational qualification offering comprehensive training across the whole spectrum of tasks and challenges involved in modern port work. Workers who have completed this specialist training have stated that they have a much better understanding of how the port operates as a whole thanks to this qualifi cation.
Does automation result in job losses? The instruments of information technology are modern tools. They do not replace people; they broaden their possibilities. Moreover, we customise most of our IT programs ourselves. Terminals are "learn ing facilities" that improve
continuously over the years, particularly with the help of IT. Many new, highquality jobs have been created in our Information Systems unit and the development departments of our terminals over the past few years. Our expertise in technological automation is an integral part of our competitive advantage – it consolidates our position in a market offering long-term growth. Consequently, it contributes signifi cantly to safeguarding jobs.
" Work will become more sophisticated – meaning a greater need for employees with advanced skills."
Yes, and we are doing a lot in this respect. We have a long-term and forward-looking personnel development system, focusing in particular on unlocking the potential of our existing employees. By way of example, we used the 2008/2009 economic crisis as an opportunity to run customised qualifi cation programmes in which we offered targeted training for a large number of professions. One example of this is that mechatronics engineers in our workshops were given additional training in IT in order to improve their cooperation with our IT specialists. At the same time, we have always endeavoured to be a better-than-average employer. And we aim to remain that way. We know that not only the demands being made of our services are rising, but also those of our employees with regard to their workplace – especially when it comes to striking a balance between work and family life. For this reason, we concluded a collective labour agreement called "Demographic Change" several years ago, which we are now gradually bringing to life.
This is a high priority for us. We have increased the proportion of female employees over the past few years from just under 10 % to over 14 %. However, we do not intend to stop there. We aim to boost the number of women working in every area and at every level of HHLA. In terms of managerial positions, our target is for female workers to account for 20 % of staff.
With a variety of measures at every level, focusing mainly on increasing the percentage of women among our young professionals and involved in qualifi cation programmes. Our need for junior managers, for example, is being met in part by sandwich course graduates where the proportion of female students has already reached 29 %. We place
particular emphasis on training women to assume senior skilled positions and take on managerial tasks. We have developed a new programme to train certifi ed ship planners – a very challenging technical job – in order to meet the need for such specialists at HHLA's container terminals from within the company. 30 % of the participants in this programme were female, all of whom were hired following the course. In total, women make up almost 20 % of participants across all our qualifi cation programmes.
We will remain a very attractive em-
ployer, with a much larger proportion of wom en in managerial positions, as well as in the technical, IT and industrial areas of the business. We will have successfully overcome the challenges presented by demographic change by adopting a variety of qualifi cation programmes and by offering a better worklife balance. The training offered to our employees will continue to set standards in our industry. Our strong market position will have protected the jobs we have today and there is every indication that the expansion of business activities in container handling and container transport will have enabled us to create new and attractive jobs.
CONTAINER TERMINAL BURCHARDKAI
The largest investment project in HHLA's history reached an important milestone in 2012: with the launch of its new, semi-automated system, the Container Terminal Burchardkai (CTB) is venturing into a new dimension of performance. It was therefore no coincidence that the CMA CGM Marco Polo – currently the largest container ship in the world with a capacity of more than 16,000 standard containers (TEU) – moored here on 12 December 2012 during its maiden voyage.
International hub: the world's largest container ship was handled at Burchardkai by seven gantry cranes simultaneously.
24 Stunden am Tag, 360 Tage im Jahr steuert das Leitstandteam den The hull of the CMA CGM Marco Polo extends for an almost never-ending 396 metres in front of berth 2 at Burchardkai. Its impressive side hides a big part of the 1.4-kilometre-long quay wall at the port of Waltershof, which was only recently improved to cater for large ships. The mega-ship has space for exactly 16,020 standard containers – this equates to 200 fully laden goods trains with a length of 700 metres each, or approximately 12,000 lorries. The sheer scale of the vessel made it possible that, when it docked at the port for the fi rst time on 12 and 13 December 2012, as many as eight container gantry cranes worked on the Marco Polo simultaneously – four to
six such gantry cranes are normally used to handle large ships.
Ships like the Marco Polo allow Burchardkai to show off its new capabilities to particular effect. This does not just apply to the modern tandem gantry cranes on the quayside, which can load or discharge four 20-foot or two 40-foot containers with a single movement. At the new control centre, a team of 20 to 40 employees work around the clock organising the processes involved in transporting goods between the ship and the block storage facility and forwarding them to the hinterland, i.e. handling lorries and container trains. A key tool here is the integrated terminal management system known as ITS, which coordinates each individual part of the computer system. HHLA has invested € 400 million in modernising CTB since 2005. This has resulted in the commissioning of a large container rail terminal and modern mega-ship berths, as well as the fi rst few sections of the new, automated block storage system modelled on the HHLA Container Terminal Altenwerder. These elements have been working for the fi rst time in conjunction with the control centre and the ITS system since autumn 2012. Working practices at the terminal were also re organised to harmonise all the processes. The launch of this integrated system represented an
Innovative duo: tandem gantry cranes discharge four 20-foot containers in a single movement.
important milestone in Burchardkai's expansion programme. The new system is currently in its start-up and optimisation phase.
Once five additional tandem gantry cranes have been installed at berths 3 and 4, starting in summer 2013, CTB will have the most modern and highperformance mega-ship berths in Hamburg. Not only do the new tandem gantry cranes have longer jibs, capable of handling the future generation of 18,000 TEU ships with 23 rows of containers, but their standard equipment also includes the many improvements and modifi cations made to previous CTB tandem gantry cranes since 2010. With a total of 15 state-of-the-art gantry cranes, the CTB quay at the port of Waltershof will then be ideally equipped to meet the challenges of container handling.
When Hamburger Hafen und Logistik AG took the brave decision in 2004 to expand and modernise its oldest and largest facility, Burchardkai, without interrupting normal operations, ships of this size were nowhere on the horizon. However, it was already becoming clear that the demands placed on the performance of a modern container terminal would increase considerably in the years to come. More throughput is required per hour of ship's lay time – a demand which challenges the entire terminal. Greater quayside productivity also makes it
The fi rst fully containerised ship, the advent of the container train and the development of the straddle carrier: the Container Terminal Burchardkai (CTB) has a long tradition of technical innovations. Many of the processes and devices that are now an indispensable part of a modern port terminal were developed at or for Burchardkai. Here are some of the highlights of the terminal's 50 years of innovation history.
The container train "Delphin" laid the foundations for Hamburg's good reputation as a rail port. It was the fi rst direct train to call at a terminal – Burchardkai – in May 1968.
The straddle carrier also became popular around the world after fi rst being used at Burchardkai in the early 1970s.
Since 1984, the straddle carrier fl eet has been integrated into the CTB's IT system via mobile data communication. Every container has been located using a satellite-based system since 1995.
necessary that space is used more effi ciently and handling capacities for trains and trucks are increased. In short, the effi ciency of the facility needs to be improved considerably in every area.
HHLA demonstrated back in 2004 how this goal can be achieved with the success of the neighbouring high-tech terminal Altenwerder. As the world's most modern facility when it opened in 2002, the terminal reached optimum performance levels in 2004 after a start-up phase marked by highs and lows. Altenwerder showed how an optimised terminal layout with short distances between the ship, yard, truck and train, coupled with a high degree of automation at the facility, enables new performance records to be set. The control centre was a key success factor here, steering the entire facility and continuously optimising working processes with immense fl exibility.
The decision to transfer much of the technology used successfully in Altenwerder to an existing, long-established large terminal was not exactly risk-free. In contrast to the Container Terminal Altenwerder (CTA), which could be completely built on a greenfi eld site, the work to expand CTB was completed while the terminal was operating at full capacity – something never tried before for a project of this scale. Using innovative construction methods and a "roaming construction site" concept, it was possible to make optimum use of the terminal space during the various phases of construction and to secure the space needed for normal operations. Despite the extra operating expenses this entailed, this form of project management
No unnecessary empty runs: that is the Dual Cycle principle. Whereas traditional handling practices result in many empty runs because ships are mostly discharged fi rst before being loaded again, Container Terminal Altenwerder (CTA) combines the loading and discharging processes. This eliminates unnecessary empty trips. CTA launched the innovative handling process Dual Cycle in 2012 – the fi rst terminal in the world to also use it for on-site transportation. Transport vehicles deposit containers at the gantry crane and pick up new ones to be taken to the yard. This reduces the number of trips and conserves resources. "Combining loading and discharging processes enables us to further accelerate the handling process and thereby boost ship-handling productivity," explains Dr. Stefan Behn, HHLA's Executive Board member responsible for the Container segment. "As a result of Dual Cycle, we are able to substantially increase throughput in the same amount of time."
and implementation proved very effective. It was the only way HHLA could provide its customers with the required handling capacity.
With the launch of the fi rst eight blocks of the automated storage crane system, CTB has increased its total annual capacity from 2.6 million TEU in 2005 to around 4 million TEU today. In the fi nal phase of expansion, annual throughput can be boosted to over 5 million TEU with 29 storage blocks. As a result of the innovative and fl exible construction concept, the exact extent of the increase in capacity will be based on actual demand trends. "With the modernisation work we have carried out so far and our expansion strategy for the future, Burchardkai is excellently placed to come out on top against increasingly tough international competition," said CTB managing directors Thorsten Gloe and Jens Hansen. "Now we have to seize the opportunity and exploit the new potential to the full."
The Container Terminal Tollerort (CTT) can now move many more containers with the same number of straddle carrier trips by transporting two 20-foot containers at the same time. This is known as twin mode. Although many terminals have gantry cranes which work effi ciently in twin mode, containers are generally transported around the site individually by straddle carriers. Only a handful of terminals around the world have straddle carriers that operate in twin mode – CTT is one of them. Right from the outset at the end of May 2012, operating the straddle carriers at Tollerort in twin mode has been a resounding success. As the terminal's container gantry cranes also work in twin mode, and are now supplied with containers more quickly and smoothly, the performance of individual gantry cranes has also improved noticeably.
HHLA INTERMODAL
With new links to Austria, Germany and the Polish seaports, the rail subsidiaries of Hamburger Hafen und Logistik AG (HHLA) – Metrans and Polzug – have extended their transport network considerably. Shuttles and direct trains, as well as their own container hubs bring the performance and quality of maritime logistics to the European hinterland.
The Port of Hamburg continued to expand its position as the leading rail port for the growth markets of Central and Eastern Europe in 2012. The HHLA rail subsidiaries Metrans and Polzug played a major role in this expansion, having signifi cantly increased their services in these markets and thereby laying the foundations for considerable growth in handling volumes over the coming years.
In October 2012, Metrans acquired the container rail terminal at the Danube port of Krems, conveniently located in the heart of Lower Austria. It is the fi rst terminal Metrans has owned and op erated in Austria. Metrans is strength ening Hamburg's position as the most import ant export port for the Alpine republic with services to and from Vienna, Krems, Enns and Salzburg. In addition, the new hub terminal in Ceska Trebova was completed in 2012. A substantial proportion of Austrian traffi c has been routed through this Czech facility since the beginning of 2013 see also "A Hub with Drive", page 41. Metrans also successfully entered the German market. The number of dir ect trains between Hamburg and Munich was already in creased at the beginning of 2013 from three to fi ve pairs of trains per week. Links to Nuremberg, Leipzig and Dresden are due to be added in 2013.
In 2012, the HHLA subsidiary Polzug also improved and extended the range of services it provides via the hub terminal in Poznan opened in 2011. The Polish seaports of Gdynia and Gdansk were connected to the Poznan hub by shuttle trains. It takes the daily pair of shuttle trains between Hamburg and the centrally located Poznan just 12 hours to complete the trip – instead of 18 in the past.
The realignment of HHLA's rail subsidiaries paved the way for this expansion. HHLA acquired majority control of Polzug (100 % compared to 33.3 % previously) and Metrans (86.5 % compared to
A hub for Europe: direct trains and shuttles start and end at the seaport terminal railway stations.
51.5 % previously) in the fi rst half of 2012. This was preceded by the unbundling of HHLA's and Deutsche Bahn's stakes in their joint investment companies in the rail sector please see page 99 et seq.
The result is that HHLA can now consistently refi ne its quality concept for maritime transport and logistics chains in Europe. The basis for this intermodal strategy is the comprehensive optimisation of all parts of the transport chain from seaports to customers in the hinterland. Core elements of this strategy include:
Metrans has its close cooperation with a major Czech carriage builder to thank for a substantial competitive advantage: the carriages developed jointly for container transportation are 30 percent lighter than the conventional ones used by Europe's national railway companies. While the fi rst generation of Metrans carriages (25 tonnes) was already more than ten percent lighter than the 28 or 29-tonne conventional container carriages, a further huge reduction has been achieved with the latest model, which weighs just 21.5 tonnes. This means a saving of around 180 tonnes of unladen weight for a block train with 26 carriages used in Germany – a major economic and environmental benefi t. Another advantage is the extra space offered by the compact design of the carriages. As a result, Metrans trains are already capable of transporting 92 standard containers on 23 carriages with the usual maximum length in Eastern Europe of 610 metres. In Western Europe, as many as 26 Metrans carriages can be pulled by the locomotive, this means that up to 108 containers can be transported as trains are allowed to have a length of 720 metres due to longer sidings. By way of comparison, competitors can transport a maximum of 88 standard containers using conventional carriages – with the same train length of 720 metres. This means that Metrans trains can carry around 20 percent more containers per train than the company's competitors. The Metrans fl eet of vehicles now consists of 1,300 owned carriages. Metrans also has its own carriage servicing facility to keep the carriages in tip-top condition.
from storage and onward transportation by road to customs formalities. With their depots and empty contain er yards, they are an important buffer for global transport chains.
Due to their various benefi ts, HHLA's rail transport systems are excellently placed to capture market share from road transport. This was apparent during the project "Hamburger Hafen 62+", in which the Ministries of Trade and Industry for Hamburg and Bavaria are active together with other parties including HHLA. Its aim is to substantially increase the share of container traffi c transported by rail between Bavaria and the Port of Hamburg from its current level of 62 percent. By way of comparison, over 90 percent of Austrian traffi c and over 80 percent of Czech traffi c is already handled by train.
In autumn 2012, the HHLA subsid iary Metrans set up new direct pairs of trains between Hamburg and Munich. Together with a "Hamburger Hafen 62+" project partner, the bayernhafen Group, Metrans also integrated the container terminal in Nuremberg into this service in early 2013. This further boosted the utilisation of trains between Bavaria and Hamburg and transferred more traffi c from road to rail. This subproject illus tr ates how intelligent concepts can help achieve environmental, transport policy and commercial objectives in harmony with each together.
The 600-metre-long steel earthworm pulls into the new Czech container hub Ceska Trebova at little more than walking speed. Gently, the ES64F4 multi-system locomotive lowers its pantograph and rolls under the huge gantry cranes until the driver brings the train with 92 standard containers (TEU) from Hamburg-Altenwerder to a standstill precisely on the markings. The pantographs are then extended again as the Eurosprinter will need all of its 6,400 kW of power again in just a few hours.
Metrans Managing Director Jiri Samek proudly calls the terminal, newly built in 2012 in the historic east Bohemian rail hub of Ceska Trebova, "our model facility". The particular highlight is that no shunting engines are needed here. Mainline locomotives can move on directly after loading or discharging without rehitching. It only takes a few hours to handle a block train due to the three gantry cranes. Not only does this cut costs associated with shunting and using a further engine, but most importantly it saves a considerable amount of time in the transport chain. In this way, the train can distribute its consignment from Hamburg more quickly among trains for different destinations and itself takes on board containers for its fi nal stop in Krems, Austria. This represents a time saving of between fi ve and eight hours over conventional container rail terminals.
The rail hub located 180 kilometres east of Prague has a long history. As early as the middle of the 19th century, railway engineers built a main artery for the Austro-Hungarian dual monarchy, linking Vienna with the Bohemian industrial belt and Prague, as well as creating a connection to the North and Baltic Seas via Saxony and Prussia. During the cold war, the rail hub became one of the largest marshalling yards for the Eastern European trade block Comecon. Railway worker apprenticeships also enjoy a long tradition in the small, medieval city, to which the railway brought a new economic boom during the 19th century. After the fall of the Berlin wall, the shunting yards initially went into decline. So it is hardly surprising that the opening of the Metrans terminal is being very warmly received.
Today, the terminal in Ceska Trebova enjoys a central location in the pan-European traffi c corridor IV and is on route 22 of the Trans-European Network (TEN) running from Nuremberg/Dresden to Prague, Vienna, Budapest and Sofi a. Only a few days after it went into service in January 2013, 16 trains were calling at the hub terminal every day. From this starting point, Metrans reaches out to the whole south-east of the Czech Republic, as well as to Slovakia, Hungary and Austria, and provides a link to the German seaports of Hamburg and Bremerhaven.
In December, Hamburg was the fi rst continental European port of call on the maid en voyage of the CMA CGM Marco Polo. The ship, with a capacity of 16,020 standard containers, was handled at the HHLA Container Terminal Burchardkai (CTB). The vessel sails the FAL1 service between the Far East and Northern Europe: the most important international trade route. In order to further improve CTB's handling capabilities – particularly for mega-ships – and
to expand its capacity in line with demand, HHLA has invested around € 400 million in its largest terminal over the past few years. "We have specifi cally prepared Burchardkai for handling the latest generation of container mega-ships. Continuous innovation and the tremendous dedication of our staff help keep our terminals at the top of the European rankings," says Dr. Stefan Behn, HHLA's Executive Board member responsible for the Container segment.
The Port of Hamburg provided the backdrop for the Blue Port project performed by lighting artist Michael Batz in mid-August. For an entire week, the gantry cranes of the three HHLA container terminals, the railing of the O'Swaldkai multi-function terminal and the 76-metre-high fl oating crane HHLA III were illuminated in bright blue by a total of 6,000 fl uorescent tubes. The farewell parade drew some 250,000 visitors.
Attractive concepts for modern apartments that refl ect the character of the landmarked warehouse buildings were the result of the ideas competition "At home in the Speicherstadt" presented at the end of May. Organised by the Hamburg Ministry for Urban Development and Environment and HHLA, the competition shows how housing can be a lively element of the overall use concept for the Speicherstadt historical warehouse district.
Polzug
As of August, Polzug has been connecting the Polish ports of Gdansk and Gdynia more closely to the hinterland with its three round trips a week. The block trains shuttle to the Poznan hub terminal, where domestic and international traffi c meet.
When containers are moved from one terminal to another within the Port of Hamburg, the transshipment process is usually organised by market leader Container-Transport-Dienst (CTD). In order to give its clients an environmentally friendly alternative to trucks and reduce the amount of traffi c on port roads, CTD has been offering more and more transportation via inland waterways since autumn. When optimally loaded, a fl eet of pushed barges carrying a maximum of 210 standard containers replaces as many as 100 truck journeys and thus reduces both CO2 and noise emissions.
In October, the HHLA rail subsidiary Metrans acquired the company which operates the trimodal container terminal at the Austrian port of Krems on the river Danube. "The new site allows us to expand our network with a terminal that is strategically well-placed in the centre of Lower Austria. It offers excellent conditions for extending Austrian traffi c to and from the European seaports we serve," explained Jiri Samek, Managing Director of Metrans. The trimodal terminal is connected to the Danube, road and rail, and has four 680-metre-long tracks, each capable of serving an entire block train.
HHLA switched to seaport customs procedures on 1 December 2012 – one month before the offi cial end of the free port. This made it possible to complete the transition fully by the end of December. This process and the thorough preparations made in advance ensured that the end of the free port on 1 January 2013 went smoothly at the HHLA terminals. Two thirds of all containers now clear customs electronically before being collected.
Over 30,000 visitors took part in the Jasper port tours in 2012, exploring the HHLA Container Terminals Altenwerder and Burchardkai by bus. The tour "Face to Face with the Giants", which allows visitors to experience at first hand how modern port handling works, celebrated its successful tenth anniversary last year. The number of visitors has increased substantially since the cooperation between HHLA and Jasper began. The guides are given ongoing training by HHLA to ensure they remain just as up-to-date as the HHLA terminals themselves.
The HHLA Container Terminal Tollerort (CTT) has been using 24 Kangoo Maxi Z.E. (zero emis sions) Crew Vans since December as a means of carbon-free transport. They are powered by electricity from renewable sources. Every Kangoo has its own parking space and charging station to ensure the vehicles are always ready for action in the terminal's 24/7 operations. "CTT has made a conscious decision to prioritise electric vehicles. In view of our sustainability strategy, this represents a further logical step towards replacing ever more diesel with electricity from renewable sources in order to signifi cantly reduce CO2 and noise emissions at our port terminals," explains Klaus-Dieter Peters, Chairman of the HHLA Executive Board.
Despite experiencing volatility at times, the German stock market made clearly positive progress over the course of 2012. The leading share indices were buoyed at the start of the year by optimistic economic prospects and compelling company results. Although expectations were dampened at times by concerns about China's ability to sustain economic growth, even the subsequent correction phase failed to have any long-term impact on stock market prices. As a result, all German share indices had recorded substantial gains by the end of the fi rst quarter. This positive trend was only interrupted by recurring uncertainties about future economic growth, the protracted debt crisis in the eurozone and the volatile state of the fi nancial markets. Signifi cant share price losses were the result. After a brief rally following the outcome of the second parliamentary elections in Greece towards the end of the second quarter, the overall market performance only returned to stability once the results of the EU summit and brighter economic data from the US had been announced. The market received a further boost from the highly expansionary monetary policy of key central banks, whose provision of liquidity led to increased investment pressure. The decision of the German Federal Constitutional Court to ratify the European Stability Mechanism (ESM) gave the
market added security. Restrained economic signals from the USA and a marked decline in the ifo business confi dence index put downward pressure on share prices again towards the end of the third quarter before more optimistic expectations began to outweigh and subsequently drove shares to their highest levels for the year by the end of 2012. The DAX grew in total by 29.1 % to 7,612 points. The MDAX outperformed the bluechip index with growth of 34.7 % to close the year at 12,103 points.
The HHLA share faced a challenging environment in 2012: its price was burdened by continued uncertainty surrounding the delayed dredging of the river Elbe, the resulting additional expenses for handling container mega-ships, surplus capacities among terminal operators in Northern Europe and weak trading with Asia. At the beginning of the year, the share initially benefi ted from the momentum generated by the positive statement of the European Commission in the fi nal quarter of 2011 regarding the environmental compatibility of the deepening of the navigation channel. Further encouragement for the capital markets was provided by the preliminary results for the 2011 fi nancial
Source: Datastream
year, which HHLA announced at the beginning of February. As a result, the share price already reached its year-high of € 26.56 on 29 February. The pending vote of Lower Saxony on the dredging of the Elbe subsequently led to concerns regarding the chances of a swift implementation for this public investment project. At the same time, newly created alliances among shipping companies with yet unknown consequences for the market position of terminal operators sparked a noticeable uncertainty. Despite the submission in spring of the plan approval to improve the nautical accessibility of the Port of Hamburg, and its approval by all federal states involved, and HHLA's forwardlooking realignment of the Intermodal segment, the share price fell strongly on the release of the interim report for the fi rst quarter of 2012. One of the main burdening factors was the temporary additional expense incurred by the modernisation of the HHLA Group's largest container terminal. Following a cut of short-term earnings expectations, the HHLA share traded at signifi cantly lower levels – a trend exacerbated by legal objections fi led by interest groups at the Federal Administrative Court against the dredging of the Elbe. Although rival ports along the Northern European coastline were already reporting volume declines by the middle of the year, the downgrading of growth expectations for the 2012 fi nancial year as a result of general economic trends led to further share price falls at
the end of July, despite continued expectations of stable throughput volume. Against the backdrop of a general decline in traffi c volumes between Asia and Europe, the share fell to its lowest point of the year on 2 August at € 17.00. The share price subsequently rallied until the interim report for the fi rst half of 2012 and gained an additional 5 % on publication. The results, which illustrated the improvements achieved as part of the modernisation of the HHLA Container Terminal Burchardkai (CTB), were well received by the capital markets and taken as evidence of scheduled progress. When a range of economic data confi rmed HHLA's revised estimates at the end of July, the HHLA share initially trended in line with the MDAX and partially made up lost ground. However, it was once again confronted by negative economic data from China, the US and the eurozone at the end of the third quarter. The decision of the Federal Administrative Court in Leipzig to temporarily suspend the dredging of the Elbe and to postpone a further decision to a principal proceeding sent a wave of disappointment through the capital market in October. In particular, the lack of clarity surrounding the additional delay led to increased uncertainty and, correspondingly, strong pressure to sell. The HHLA share therefore closed the year at € 17.82, or 21.9 % down on the previous year. At the end of the year, the market capitalisation of the listed Port Logistics subgroup amounted to € 1.2 billion.
| in € | 2012 | 2011 |
|---|---|---|
| Closing price at year-end 1 | 17.82 | 22.83 |
| Highest share price 1 | 26.59 | 35.81 |
| Lowest share price 1 | 17.00 | 19.65 |
| Performance in % | - 21.9 | - 33.9 |
| Average daily trading volume 1 | 88,585 | 106,157 |
| Number of shares | 72,753,334 | 72,679,826 |
| Listed shares (Class A shares) | 70,048,834 | 69,975,326 |
| Non-listed shares (Class S shares) | 2,704,500 | 2,704,500 |
| Dividend per Class A share | 0.65 2 | 0.65 |
| Dividend yield in % | 3.6 | 2.8 |
| Market capitalisation as of 31.12. (Class A shares) in € million | 1,248.3 | 1,597.2 |
| Price-earnings ratio as of 31.12. | 16.7 | 19.6 |
| Earnings per share | 0.95 | 1.20 |
1 XETRA
2 Dividend proposal for 2012 fi nancial year
Regional Coverage
Source: Contacts during Investment Conferences and Roadshows 2012
as of 31.12.2012
In view of the particular circumstances surrounding the HHLA share – characterised by the exceptional importance of public infrastructure measures, volatile economic and industrial data as well as far-reaching measures to enhance the per formance of the Group – the prompt and comprehensive disclosure of information as well as an open dialogue with investors and fi nancial analysts once again proved essential. As a result, HHLA's IR activities were expanded during the reporting year with the aim of increasing the transparency of all aspects of the business model relevant to value creation by effective fi nancial communication. In order to cover the information needs of retail investors, HHLA attended various investor forums in Germany and participated in a trade fair especially for private investors. The company held meetings with institutional investors during conferences and road shows at the key fi nancial centres of Frankfurt, London and New York. These measures were complemented by numerous discussions with investors in other fi nancial centres of Europe, the UK and the USA, as well as at HHLA's head quarters in Hamburg. The opportunities to get information and hold discussions generated great interest and were entirely used at every opportunity. Furthermore, the Executive Board provided details on business developments during quarterly conference calls.
Interested parties were once again given access to a wide range of information in 2012: in addition to fi nancial reports, tables of key performance fi gures and share price information were made available for download on HHLA's website, along with up-to-date presentations and footage of terminal operations. Furthermore, the company made use of the communication channel Twitter to draw attention to current and future company announcements. The opportunity to contact the IR team via email and telephone was also highly popular in 2012. HHLA investors were not only interested in how the company dealt with peak loads as a result of the development in ship sizes and the modernisation of the Container Terminal Burchardkai but also especially in the progress of the planned dredging of the Elbe and the
future development of competition. Moreover, the current business performance, the economic environment and the company's strategic growth prospects were discussed in detail during numerous conversations. Despite the disappointing share performance, HHLA's communications activities were again well received by the capital markets: in a survey conducted by the US magazine Institutional Investor among more than 2,000 capital market participants, HHLA took second place in the category "Europe's Best Investor Relations Professional" in the transport sector. Furthermore, HHLA's main medium – its annual report – moved up three positions to seventh in the top ten MDAX reports of the highly respected rankings published by the University of Münster and "manager magazin".
HHLA's shareholder base remained largely stable in 2012. The Free and Hanseatic City of Hamburg remained the company's largest shareholder with an unchanged stake of 68.4 %. The free fl oat amounted to 31.6 %. According to the voting rights notifi cations received by HHLA until year-end of 2012, the US investor First Eagle Investment Management LLC was the only free fl oat shareholder to exceed notifi cation thresholds with a stake of 3.02 %. Among the daily traded shares, ownership shifted slightly towards retail investors, who held 8.5 % (previous year: 8.2 %) of nominal capital at the end of the year. This development was partly due to HHLA's third employee partcipation scheme which was used in April 2012 by around 77 % of those staff members entitled to join. However, it had only a limited impact on nominal capital, with an increase of about 0.1 %. By contrast, institutional investors continued to hold the majority of free fl oating shares, with 23.1 % of all shares (previous year: 23.3 %). Overall, HHLA's nominal capital remained widely distributed among approximately 35,000 registered shareholders. In regional terms, the largest free fl oat shareholders are based primarily in Germany, the USA, the UK and other countries, especially in continental Europe.
At the end of 2012, the HHLA share was tracked and assessed by 25 analysts. A further study recommending investors to buy the share was gained in the reporting year. As a result, the HHLA share was able to retain its unusually broad coverage compared with other shares on the MDAX. Around two-thirds of the analysts recommended buying or holding HHLA shares. They emphasised the potential in the expected growth of core markets, in the planned dredging of the Elbe and in further effi ciency improvements. Analysts with a sell recommendation primarily drew attention to the rising intensity of competition among the North Range ports and the risks associated with the continued delay to dredging and the volatile economic environment.
HHLA places great value on broad and wellinformed coverage of its share as this enhances investors' understanding of the company's business model and ensures a comprehensive spectrum of opinion. The Group therefore remains in close contact with all fi nancial analysts and constantly strives to expand the number of independent studies on its business development.
The fi fth Annual General Meeting since HHLA's initial public offering in 2007 was held in Hamburg on 14 June 2012. Approximately 1,000 share holders attended, representing 83 % of nominal capital (previous year: 82 %). The resolutions proposed by the Supervisory Board and the Executive Board were all adopted with large majorities by the share holders present. These included a motion to increase the dividend by 18.2 % to € 0.65 per dividend-bearing share in the listed Port Logistics subgroup (Class A share). HHLA distributed dividends totalling € 45.5 million (previous year: € 38.5 million). This corresponded to a payout ratio of 54 % of the Port Logistics subgroup's net income for the year after minority interests. The dividends were paid out to the shareholders on 15 June. In relation to the share price, the HHLA share achieved a dividend yield of around 3.6 %, placing it in the top third of MDAX shares as regards the profi tability of its payout. Despite lower earnings in 2012, the Executive Board and Supervisory Board will propose a stable dividend of € 0.65 per Class A share at the 2013 Annual General Meeting. The total amount paid out would remain unchanged compared with the previous year at € 45.5 million. The payout ratio would rise to a comparatively high level of 68.4 %. HHLA would therefore go signifi cantly beyond the minimum requirements of its dividend policy of distributing at least 50 % of the Port Logistics subgroup relevant net profi t for the year to its shareholders.
You can find an overview of financial analysts who cover HHLA on www.hhla.de
per Class A share
* Dividend proposal Payout ratio refering to earnings per share of Port Logistics subgroup in %
| Type of shares | No-par-value registered shares |
|---|---|
| ISIN International Security Identifi cation Number | DE000A0S8488 |
| SIC | A0S848 |
| Symbol | HHFA |
| Stock exchanges | Regulated market: Frankfurt / Main, Hamburg Open market: Berlin, Düsseldorf, Hanover, Munich, Stuttgart |
| Stock exchange segment | Prime Standard |
| Sector | Transport & Logistics |
| Indices | MDAX, MSCI Germany, HASPAX, CDAX, HDAX, Prime All Share, Classic All Share |
| Ticker symbol Reuters | HHFGn.de |
| Ticker symbol Bloomberg | HHFA:GR |
| First listing | 2 November 2007 |
You can fi nd current and future company announcements also on the Twitter channel HHLA_IR.
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Prof. Dr. Peer Witten Chairman of the Supervisory Board
In the 2012 fi nancial year, the Supervisory Board fulfi lled the responsibilities entrusted to it by law, the company articles of association and rules of procedure, and the German Corporate Governance Code. It carefully and regularly monitored the Executive Board's management of business and provided advice on the company's further strategic development as well as on important individual measures.
At the Supervisory Board's meetings, as well as in written and verbal reports, the Executive Board provided the Supervisory Board with prompt, regular and comprehensive information, especially on the situation of HHLA and the Group, corporate planning, fundamental issues of company policy and strategy, investment plans and personnel. Further focal points were risk management, the internal accounting control system and HHLA's compliance system. The Chairman of the Supervisory Board was regularly in touch with the Executive Board and was informed about HHLA's current business situation, signifi cant transactions and risk management. The Supervisory Board was involved in all decisions of major signifi cance for HHLA and the HHLA Group. On the basis of its own thorough examination and in-depth discussions with the Executive Board, the Supervisory Board approved all measures submitted to the Supervisory Board for approval by the Executive Board in accordance with the law, the articles of association and the Executive Board's rules of procedure.
In the 2012 fi nancial year, the Supervisory Board held four routine meetings, one constituent meeting and one special meeting. It also adopted two resolutions by means of document circulation. With the exception of members who left offi ce as planned during the reporting year, none of the Supervisory Board members took part in fewer than half of the Supervisory Board meetings held in the period under review.
At each ordinary meeting, the Supervisory Board dealt with the current development of business and the HHLA Group's position in detail. On each occasion, the Executive Board gave a detailed report, focusing in particular on revenue, results and the personnel situation for the Group and the individual segments, as well as on the fi nancial position and the Group's further strategic and structural development. Furthermore, individual meetings concentrated especially on the following items:
The fi nancial statements meeting held on 28 March 2012 focused on the reporting, auditing and approval of the annual fi nancial statements and the management report of HHLA, including the individual divisional fi nancial statements for the A and S divisions, the Consolidated Financial Statements and the Group Management Report for the 2011 fi nancial year. Representatives of the auditors were present at this meeting. They reported on the main results of their audit and were available to answer questions. The Supervisory Board discussed the Executive Board's proposal on the appropriation of profi t and the proposal made by the Audit Committee regarding the choice of auditor for the 2012 fi nancial year. In addition, the Supervisory Board discussed matters including the agenda for the 2012 Annual General Meeting – notably the election proposals for the Supervisory Board – the Supervisory Board's report to the Annual General Meeting, the corporate governance report, the granting of comfort letters, an employee participation scheme and the associated use of Authorised Capital I, as well as the restructuring of key intermodal activities.
At its special meeting on 27 April 2012, the Supervisory Board dealt with the realignment of the Intermodal segment and voted to divest HHLA and Deutsche Bahn holdings in one another's companies. Furthermore, the Supervisory Board used a written circulation procedure in April to handle the employee participation scheme and the associated partial use of Authorised Capital I.
At its meeting on 6 June 2012, the Supervisory Board addressed the situation of the HHLA Group, the preparations for the Annual General Meeting and amendments to the articles of association editorial, among other items.
Following the election of new shareholder representatives at the Annual General Meeting on 14 June 2012 and the preceding election of new employee representatives, a constituent meeting for the newly elected Supervisory Board was held on 25 June 2012. At this meeting, Prof. Dr. Witten was elected Chairman and Mr. Wolfgang Rose Vice Chairman of the Supervisory Board. The Arbitration Committee and the other fi ve Supervisory Board committees currently in place were also constituted. Please refer to the Corporate Governance Report, page 53 et seq. for an overview of the committees and their members.
At the meeting in September, the main focus was on HHLA's strategy and business model, the acquisition of company shares in Polzug Intermodal GmbH held by PKP Cargo S.A. and equity measures in favour of the former, changes to the German Corporate Governance Code and a corresponding amendment to the rules of procedure. This was followed by a written circulation procedure in September, in which the Supervisory Board approved the acquisition of company shares held by PKP Cargo in Polzug Intermodal GmbH by HHLA Intermodal GmbH.
The last meeting in the reporting period was held on 7 December, when the Supervisory Board mainly considered the budget for 2013 – which it duly approved – and the medium-term corporate planning for 2014 to 2017. Another focus of the Supervisory Board meeting was HHLA's risk management system and, in particular, the results of the risk inventory. The Executive Board and the Super visory Board also discussed the declaration of compliance with the German Corporate Governance Code and the Supervisory Board resolved to issue the annual declaration of compliance. In addition, the Supervisory Board discussed the sale of the Altenwerder logistics centre and gave its approval.
The members of the Executive Board participated in all Supervisory Board meetings except for the constituent meeting.
The Supervisory Board has set up a total of six committees: the Finance Committee, the Audit Committee, the Real Estate Committee, the Personnel Committee, the Nomination Committee and the Arbitration Committee. They prepare the resolutions of the Supervisory Board in full council and, if permitted, make decisions on behalf of the Supervisory Board in certain cases. With the exception of the Nomination Committee, all of the committees include an equal number of shareholder and employee representatives. For details on the composition of the committees see Board Members and Mandates, page 62 et seq.
The Finance Committee met a total of four times in the reporting period: in March, May, August and November 2012. In addition to monitoring the Group's fi nancial results and the Group's general fi nancial position, the main focal points of its work included deliberations concerning comfort letters as part of real estate project fi nancing in the S division and in favour of Polzug Intermodal GmbH (March meeting). Equity measures for Polzug Intermodal GmbH were one of the main issues discussed at the meeting in August. The Finance Committee's December meeting was mainly devoted to its comprehensive preliminary review of the budget for 2013 and the medium-term planning for 2014 to 2017, as well as the sale of the Altenwerder logistics centre.
The Audit Committee convened four times in the past fi nancial year. The March meeting focused on an in-depth discussion and examination of HHLA's annual fi nancial statements, consolidated fi nancial statements and management reports for the 2011 fi nancial year. The committee also recommended that the Supervisory Board should submit a proposal to the Annual General Meeting regarding the choice of auditor for the 2012 fi nancial year, as well as the for the auditor's review of the abridged fi nancial statements and interim management report for the fi rst half of the 2012 fi nancial year. Representatives of the auditors were present when the annual fi nancial statements were discussed. They reported on the results of the audit and were available to answer questions. According to the auditor's representatives, there were no circumstances demonstrating any bias of the auditor. The Interim Report for the fi rst quarter of 2012 and the report on the work done by Internal Audit were the main items discussed at the May meeting. The Head of Internal Audit attended this meeting in a reporting capacity and provided comprehensive information. At its third meeting, in August, the Audit Committee was primarily concerned with the Interim Report for the fi rst half of 2012, as well as with changes to the German Corporate Governance Code in the reporting period and a corresponding amendment to the Supervisory Board's rules of procedure. The meeting in November focused on the Interim Report for the third quarter of 2012, a discussion of focal points for the audit and the contract to audit the 2012 annual and Consolidated Financial Statements, as well as a discussion of the fi ndings of the 2012 risk inventory. At this meeting, the Audit Committee also discussed in detail the internal control system, the risk management system, Internal Audit and the compliance management system. It also focused on preparations for the declaration of compliance with the German Corporate Governance Code. HHLA's Compliance Offi cer made his annual report at this meeting; he was also present at the Audit Committee's other meetings, where he spoke about his role, kept the committee abreast of current developments, and was available to answer questions. The Audit Committee acquired the necessary declaration of independence from the auditors. The Chairman of the Executive Board and the Chief Financial Offi cer regularly attend the meetings of both the Finance Committee and the Audit Committee.
The Real Estate Committee met twice in the 2012 fi nancial year. It focused on the general development of business and the discussion and audit of HHLA's annual fi nancial statements, including the separate fi nancial statements of the S division, and of the Consolidated Financial Statements and the management reports for the 2011 fi nancial year (March meeting) as well as the budget for 2013 and the medium-term planning for 2014 to 2017 (November meeting), each in relation to the Real Estate subgroup (S division).
The Nomination Committee convened three times in the 2012 fi nancial year. Its meetings in March dealt with the selection of candidates and the submission of proposals to the Supervisory Board for its own election proposals for the Annual General Meeting. This resulted in two female candidates, Ms. Bödeker-Schoemann and Dr. Roggencamp, being put forward for the Supervisory Board to propose for election by the Annual General Meeting in line with its diversity objectives. The focus of the December meeting was on preparations for updates to the Supervisory Board's diversity targets.
Neither the Personnel Committee nor the Arbitration Committee convened in the reporting period.
Following each meeting, the chairpersons of the committees reported back to the Supervisory Board about the activity of each committee and their fi ndings, and made recommendations on resolutions to be taken.
The declaration of compliance with the German Corporate Governance Code was discussed in detail and prepared together with the Executive Board at the Audit Committee meeting on 26 November 2012. The joint declaration of compliance in accordance with Section 161 of the German Stock Corporation Act (AktG) was passed at the Supervisory Board's December meeting and issued on 7 December 2012. This has been made permanently available to the general public on the HHLA website www.hhla.de/ corporategovernance.
The Supervisory Board does not include any former members of the company's Executive Board.
No confl icts of interest regarding members of the Executive Board or the Supervisory Board requiring immediate disclosure to the Supervisory Board arose in the reporting year.
Details of the declaration of compliance and corporate governance at HHLA have been provided by the Executive Board and Supervisory Board in the corporate governance report for 2012. See also Corporate Governance Report, page 53 et seq.
Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Hamburg, were elected as auditors for the fi nancial statements and for the auditor's review of the abridged fi nancial statements and the interim management report for the fi rst half of the fi nancial year 2012 at the Annual General Meeting on 14 June 2012 and instructed by the Supervisory Board. The auditors carried out an audit of HHLA's annual fi nancial statements as provided by the Executive Board, including the divisional fi nancial statements for the A division (Port Logistics subgroup) and the S division (Real Estate subgroup) presented as part of the Notes, in line with the provisions of the German Commercial Code (HGB), the Consolidated Financial Statements including the subgroup fi nancial statements for the A and S divisions in accordance with International Financial Reporting Standards (IFRS), and the management reports for HHLA and the Group. They issued an unqualifi ed opinion with respect to the foregoing.
The HHLA Executive Board also prepared a report on company transactions with related parties for the 2012 fi nancial year in line with Section 312 of the German Stock Corporation Act (AktG). The auditors audited this report, delivered a written report on their fi ndings and, having no objections to make, gave the following unqualifi ed opinion:
"On the basis of our audit and in our professional opinion we confi rm that
In accordance with Section 4 (5) of the articles of association, the Executive Board of HHLA also prepared a report on the relationship between the A division and the S division in the 2012 fi nancial year. The auditors audited this report, delivered a written report on their fi ndings and, having no objections to make, gave the following unqualifi ed opinion:
"On the basis of our audit and in our professional opinion we confi rm that
Any expenses and income which could not be attributed directly to one division were divided among the divisions in line with the articles of association.
As soon as they had been prepared and audited, the fi nancial statements including the divisional fi nancial statements, the Consolidated Financial Statements including the subgroup fi nancial statements, the management reports for HHLA and the Group, the report on transactions with related parties, the report on the relationship between the A and S divisions and the auditors' report were distributed to all members of the Supervisory Board.
The Audit Committee and the Real Estate Committee each carried out a preliminary review of the fi nancial statements and reports as well as of the proposal for appropriating profi ts at their respective meetings on 18 March 2013. In the fi nancial statements meeting of the Supervisory Board on 25 March 2013, the Supervisory Board examined in detail the aforementioned fi nancial statements and reports as well as the proposal for appropriating profi ts and discussed them thoroughly. Representatives of the auditors were also present at this meeting; they reported on the main results of their audit and were available to answer questions. According to the auditor's representatives, there were no circumstances demonstrating any bias of the auditor. In addition to the audit of the annual fi nancial statements, the auditors completed a review of the interim fi nancial statements. The auditors gave comprehensive information to the Supervisory Board regarding the nature and extent of these services.
Having discussed the course and the results of the audit in detail, and after an in-depth review of the auditors' reports and the Executive Board's proposal for appropriating distributable profi t, and on the basis of its own review and evaluation of the annual fi nancial statements including the divisional fi nancial statements, the Consolidated Financial Statements including the subgroup fi nancial statements, the management reports for HHLA and the Group, the report on transactions with related parties, the report on the relationship between the A and S divisions and the Executive Board's proposal for appropriating distributable profi t, the Supervisory Board approved the results of the audit. The Supervisory Board concluded that in the fi nal analysis it had no objections to make and, at the fi nancial statements meeting held on 25 March 2013, approved the fi nancial statements, including the divisional fi nancial statements, the Consolidated Financial Statements including the subgroup fi nancial statements, the management report and the Group Management Report as recommended by the Audit Committee and the Real Estate Committee. HHLA's annual fi nancial statements for the 2012 fi nancial year have therefore been adopted. The Supervisory Board also concluded that following its review it had no objections to make to the Executive Board's statements on related parties and on the relationship between the A and S divisions. After carrying out its own audit, the Supervisory Board concurred with the Executive Board's proposal on the appropriation of profi t.
In the shareholder representative elections held at the Annual General Meeting on 14 June 2012, the following people were elected to the Supervisory Board for the new period of offi ce: Prof. Dr. Peer Witten, Petra Bödeker-Schoemann, Dr. Bernd Egert, Dr. Norbert Kloppenburg, Michael Pirschel and Dr. Sibylle Roggencamp.
At the employee representative elections held beforehand in June 2012, the following people were elected to the Supervisory Board: Wolfgang Rose, Torsten Ballhause, Holger Heinzel, Frank Ladwig, Arno Münster and Norbert Paulsen.
For further information about Supervisory Board members, please see Board Members and Mandates, page 62 et seq.
The election was for the period of offi ce running until the end of the Annual General Meeting which passes a resolution discharging the Board for the fi nancial year 2016. The Supervisory Board was constituted at its meeting on 25 June 2012. At this meeting, Prof. Dr. Witten was elected Chairman and Mr. Wolfgang Rose Vice Chairman of the Supervisory Board.
Mr. Klauke, Dr. Klemmt-Nissen, Mr. Mendrzik, Mr. Stork and Mr. Wohlers left the Supervisory Board at the end of their term in summer 2012. The Supervisory Board would like to thank them for their good work and dedication.
There were no changes to the Executive Board in the reporting period.
Hamburg, 25 March 2013
The Supervisory Board
Prof. Dr. Peer Witten Chairman
Responsible and transparent corporate management geared towards sustainable value has always been an essential foundation of HHLA's commercial success. For this reason, HHLA's Supervisory Board and Executive Board expressly support the German Corporate Governance Code ("the Code") and the objectives and purposes which it pursues.
In accordance with the stipulations of German stock corporation law, HHLA has a dual system of management with an Executive Board and a Supervisory Board as management bodies, both of which have their own defi ned areas of competence. This system is characterised by having separate personnel to carry out the management and supervision functions: the Executive Board manages the company on its own responsibility, while the Supervisory Board monitors the Executive Board and discusses relevant matters with it. Simultaneous membership of both bodies is not permissible. HHLA's Executive Board and Supervisory Board work closely together for the company's benefi t in an atmosphere of mutual trust.
The Supervisory Board oversees the Executive Board's management of the company, advises it on company management, and is involved in decisions of fundamental importance. Decisions of fundamental importance must be approved by the Supervisory Board. It also decides on the composition of the Executive Board. The examination and approval of the annual fi nancial statements is another of the Supervisory Board's main tasks.
In accordance with the company's articles of association, Sections 95 and 96 of the German Stock Corporation Act (AktG) and Section 7 of the German Co-Determination Act (MitbestG), the Super visory Board consists of six shareholder representatives elected by the Annual General Meeting and six employee representatives elected in accordance with the German Co-Determination Act (MitbestG). No former members of HHLA's Executive Board sit on the Supervisory Board. Unless the Annual General Meeting specifi es a shorter period of offi ce, Supervisory Board members are elected for a period ending with the Annual General Meeting which passes a resolution discharging the Board for the fourth fi nancial year following the start of its term of offi ce. The fi nancial year in which the term of offi ce begins is not included.
Members of the Supervisory Board are obliged to disclose any confl icts of interest to the Supervisory Board as a whole, especially resulting from any advisory role or seat on a management body involving customers, suppliers, creditors or other business partners. If a member of the Supervisory Board has signifi cant confl icts of interest which are not merely temporary, this should result in the termination of his/her period of offi ce. The Supervisory Board is required to give notifi cation of any confl icts of interest which arise and how they are being handled in its report to the Annual General Meeting.
The company has arranged for D&O insurance with an appropriate deductible for members of the Supervisory Board.
The Supervisory Board carries out its work both in full council and in individual committees. The Supervisory Board has adopted its own rules of procedure, which also outline the committees' responsibilities. In order to fulfi l its duties as effi ciently as possible, the Supervisory Board has currently constituted the following six committees:
I The Audit Committee monitors accounting processes and the audit of fi nancial statements, particularly the independence of the auditor and the additional services provided by the auditors. The committee prepares the Supervisory Board's resolution proposal to the Annual General Meeting on the election of the auditor and, after these have been elected by the Annual General Meeting, awards the audit assignment for the consolidated and annual fi nancial statements. It also deals with the fee agreements and determines which areas the audits should focus on. In addition, it concerns itself with the effectiveness of the internal accounting control system, the risk management system, the internal audit system and the compliance system. As an independent member of the Supervisory Board, the Chairman of the Audit Committee, Dr. Norbert Kloppenburg, has expertise and experience in the areas of accounting, the audit of fi nancial statements and the internal monitoring procedures.
I The Arbitration Committee was constituted for the purposes laid down in Section 31 (3) of the German Co-Determination Act (MitbestG). Its task is to make proposals for appointing members of the Executive Board if the statutory majority of two thirds of the Supervisory Board members' votes is not reached after the fi rst round of voting.
For the current composition of the Supervisory Board and its committees please see Board Members and Mandates, page 62 et seq.
The Executive Board manages the company's business under the joint responsibility of its members. It determines the company's goals, its fundamental strategic orientation, and Group policy and organisation. These tasks include, in particular, steering the Group and managing its fi nancing, developing a personnel strategy, appointing and developing managers and representing the company before the capital markets and the general public.
HHLA's Executive Board currently consists of four members. For its composition see Board Members and Mandates, page 62 et seq. In accordance with Article 8 of the articles of association, the Executive Board must consist of at least two members. The Executive Board's members are appointed by the Supervisory Board. Executive Board members are given responsibility for particular departments in line with a schedule of responsibilities, which forms part of the code of practice specifi ed by the Supervisory Board for the Executive Board. When appointing company executives, the Executive Board takes diversity considerations into account. In particular, it aims to ensure the appropriate inclusion of women.
The Executive Board provides the Supervisory Board with regular, timely and comprehensive information on all matters that are relevant for the Group. These include, in particular, the intended business policy, corporate profi tability, the course of business and position of the company, planning, the current risk position, risk management and compliance. The Executive Board must notify the Chairman of the Supervisory Board without undue delay of any important events of fundamental signifi cance for the assessment of the position and development or the management of the Group. These include operational malfunctions and illegal actions which disadvantage the company, for example. Certain actions and transactions of fundamental importance by the Executive Board require the approval of the Supervisory Board in accordance with the Executive Board's code of practice. No confl icts of interest regarding members of the Executive Board requiring immediate disclosure to the Supervisory Board arose in the reporting year. Executive Board members may only take on other duties, especially supervisory board posts at companies outside the Group, with the approval of the Supervisory Board. Transactions of mater ial importance between Group companies and members of the Executive Board, parties related to them, or companies closely associated with them also require the approval of the Supervisory Board. All such transactions must be performed at generally accepted market terms. There were no transactions of this nature in the reporting period.
The Executive Board and Supervisory Board of Hamburger Hafen und Logistik AG herewith state after due examination that in the period starting 8 December 2011 (the date on which the previous declaration of compliance was issued), HHLA complied with the recommendations of the German Corporate Governance Code ("the Code" or "GCGC") in the version dated 26 May 2010 and – subsequent to its taking effect – the version dated 15 May 2012 with the following exceptions. Furthermore, HHLA shall comply with the Code in the future with the following exceptions. This shall apply subject to the changes stated below:
c) According to Section 5.4.6 (2) of the current version of the Code, if a commitment is given to pay performance-related remuneration to members of the Supervisory Board, it should be dependent on sustainable corporate development. The variable remuneration currently applicable to the members of the Supervisory Board was adopted by the Annual General Meeting in 2007 and is linked to a dividend payment to shareholders. It does not currently correspond to this sustainability criterion. The Supervisory Board will examine whether to adapt the remuneration policy in compliance with the Code and will put forward any proposed amendments for resolution at the next Annual General Meeting.
Hamburg, 7 December 2012
The Executive Board
of Hamburger Hafen und Logistik Aktiengesellschaft
The Supervisory Board
of Hamburger Hafen und Logistik Aktiengesellschaft
The above declaration and the declarations of compliance relating to previous years can be viewed on HHLA's website at www.hhla. de/corporategovernance.
Compliance with corporate guidelines and the statutory provisions relevant to the company's activities (hereinafter also referred to as "compliance") is regarded as an essential part of corporate governance at HHLA. The management team in each corporate unit is therefore responsible for working to achieve compliance with the regulations that are relevant for their fi eld of activity and area of responsibility. Workfl ows and processes must be structured in line with these regulations. The cornerstone of HHLA's compliance management system is a code of conduct, which formulates overriding principles on topics with special relevance for compliance, such as conduct in the competitive environment, the prevention of corruption, discrimination and confl icts of interest, and how to deal with sensitive corporate information, especially insider information. Please also see www.hhla.de/compliance. The overall coordination of the compliance management system is performed by a Compliance Offi cer, who reports directly to the Chief Financial Offi cer and synchronises his or her activities closely with those of the Internal Audit and Risk Management departments. In 2012,
further extensive steps were taken to enhance HHLA's compliance management system. These included stepping up preventive work, e.g. by producing and updating Group guidelines and conduct guidance, systematically analysing compliance risks, and training staff at HHLA companies in Germany and abroad on the code of conduct and special issues, such as preventing corruption or observing insider trading rules. The Audit Committee also monitored the development of the compliance management system in the reporting period by means of regular reports from the Executive Board and the Compliance Offi cer. The system will be further extended in the future.
Sustainability has been an integral part of HHLA's business model since the company was established. Port terminals provide an ecologically sound link between global goods fl ows on the one hand and hinterland networks and logistics centres on the other. HHLA's actions are characterised by responsibility towards its employees, the environment and society as a whole and by taking responsibility for its business activities. To reinforce this, HHLA was the fi rst maritime company to issue a declaration of compliance with the German Sustainability Code (GSC). In addition, HHLA applied the GRI (Global Reporting Initiative) guidelines on sustainability reporting – the most commonly used standard of its kind in the world – for the fi rst time in this annual report. See also Sustainability, page 90 et seq.
At its meeting on 7 December 2012, the Supervisory Board of Hamburger Hafen und Logistik Aktiengesellschaft adopted an update to the statement of intent for its future composition, which was fi rst adopted on 15 December 2010, as per Section 5.4.1 of the German Corporate Governance Code ("the Code"):
The HHLA Supervisory Board must always be composed in such a way that its members have the necessary knowledge, skills and industry expertise to fulfi l their responsibilities properly.
In addition, the GCGC calls in Section 5.4.1 for concrete objectives to be defi ned regarding the Supervisory Board's composition. Against the backdrop of an organisation's specifi c situation, these should take into account the company's international operations, potential confl icts of interest, the number of independent Supervisory Board members as defi ned by Section 5.4.2, a defi nable age limit for Supervisory Board members and diversity. In particular, these concrete objectives should stipulate the appropriate inclusion of women.
HHLA's Supervisory Board has incorporated these requirements into its rules of procedure (Section 7 [4*]). The following objectives have been defi ned for the composition of the Supervisory Board:
Diversity should be taken into account in the composition of the Supervisory Board.
Diversity in the Supervisory Board is – inter alia – refl ected by shareholder representatives with different career paths and fi elds of activity who can draw on a wide range of different experiences (e.g. from international assignments).
With regard to the appropriate inclusion of women on the Supervisory Board, the company is pursuing the medium-term goal of increasing the proportion of female shareholder representatives to at least 40 percent. Due to the existing provisions of the German Co-Determination Act, the company has no infl uence over which employee representatives are selected. The possibility of fi lling Supervisory Board posts with female candidates has always been taken into consideration in the past. However, when positions become available, the number of male candidates is regularly substantially larger. For this reason, the Supervisory Board of HHLA decided on a number of concrete measures at its meeting back on 15 December 2010, which are designed to give qualifi ed women a better chance of gaining a seat on the Supervisory Board:
International orientation also plays a role when appointing members to the Supervisory Board. Due to HHLA's business model, the company's operations have a predominantly regional and local focus, which means that it is currently not of paramount importance that members have extensive relevant experience of managing international companies. However, some of the members of the company's Supervisory Board are in possession of such experience.
The rules of procedure of HHLA's Supervisory Board (Section 7 [1] sentence 3*) stipulate that only candidates under the age of 70 may stand for election or re-election as members of the company's Supervisory Board.
To prevent confl icts of interest, the rules of procedure of HHLA's Supervisory Board (Section 7 [3*]) state that Supervisory Board members may not hold a seat on a management body or fulfi l an advisory role involving major competitors of the company.
Members of the Supervisory Board are obliged to disclose any confl icts of interest to the Supervisory Board as a whole, especially confl icts which may arise as a result of an advisory role or seat on a management body involving customers, suppliers, creditors or other third parties. If a member of the Supervisory Board has signifi cant confl icts of interest which are not merely temporary, this should result in the termination of his/her period of offi ce. The Supervisory Board is required to give notifi cation of any confl icts of interest which arise and how they are being handled in its report to the Annual General Meeting.
The company keeps working towards recruiting at least two independent Supervisory Board members from amongst its shareholders. In the view of the Supervisory Board, this currently corresponds to the structure of equity investments, business sectors and, by extension, HHLA's specifi c situation. However, it is the opinion of the Supervisory Board that employee representatives should not automatically be considered dependent. It is important to consider the specifi c circumstances in each case. The Supervisory Board must have at least one member who is independent as defi ned by Section 100 (5) of the German Stock Corporation Act (AktG) and who has expertise in the fi elds of accounting or the auditing of fi nancial statements.
The Supervisory Board's diversity objectives as stipulated in the statement of intent issued on 15 December 2010 were taken into account when the Nomination Committee and the Supervisory Board proposed candidates to the Annual General Meeting for the Supervisory Board elections in June 2012. The proposed candidates were duly elected at the Annual General Meeting on 14 June 2012. The target of achieving a fair representation of women (at least one woman) was exceeded following the appointment of two female Supervisory Board members.
In consideration of the updated target dated 7 December 2012 to increase the share of female shareholder representatives to at least 40 % in the medium term, a ratio of 33.33 % was therefore already achieved in 2012. The targets regarding the number of independent members specifi ed in the updated statement of intent and the existing requirements concerning international orientation, age limit and confl icts of interest were already met in 2012. They will continue to be taken into account when selecting candidates and making election proposals.
In the 2012 fi nancial year, the company did not receive any notifi cations regarding directors' dealings with HHLA shares.
As of 31 December 2012, the Executive Board and Supervisory Board overall did not possess more than 1 % of the shares issued by HHLA.
The HHLA Group's risk management system is described in detail in the risk and opportunity report contained in the management report. See page 113 et seq.
In accordance with the statutory provisions, it is designed to identify signifi cant risks in advance so that they can be minimised, diversifi ed, transferred or averted, ensuring the continued existence of the HHLA Group and its operating companies. The risk strategy and risk policies of HHLA form the primary guidelines for dealing with risks in the HHLA Group. In performing its duties, the Risk Management department receives material support from the Controlling department, the Compliance Offi cer and the Internal Audit department.
HHLA informs capital market participants and interested members of the general public comprehensively about the position of the Group and important company developments, particularly by means of its fi nancial reporting (annual report and interim reports), press conferences for analysts and fi nancial press conferences, dialogue with analysts and the press, press releases and ad hoc announcements as required, and its Annual General Meetings. As a permanently available and up-to-date communication medium, the website www.hhla.de provides all the relevant information in both German and English. In addition to comprehensive information about the HHLA Group and the HHLA share, it contains a fi nancial calendar which gives an overview of the main events. Any enquiries over and above this from shareholders, investors and analysts should be addressed to the Investor Relations department.
Shareholders exercise their rights, in particular their voting rights, at the Annual General Meeting. According to the articles of association, the Annual General Meeting is held in Hamburg, another major German city or the seat of a German stock exchange within the fi rst eight months of each fi nancial year. Each share entitles its holder to one vote at the Annual General Meeting. There are no shares with multiple voting rights, no preference shares and no caps on voting rights.
Shareholders may exercise their voting rights at the Annual General Meeting in person, by appointing a representative of their choice or by giving voting instructions to a proxy designated by the company. The articles of association also authorise the Executive Board to provide for shareholders to cast their votes in writing or by means of electronic communication without attending the Annual General Meeting (postal vote). The company offered postal voting for the fi rst time in 2012. The invitation to the Annual General Meeting includes explanations of the participation conditions, the voting procedure (including proxy voting) and the rights of shareholders. In addition, the company has a telephone hotline for shareholders' questions. The reports and documents required by law for the Annual General Meeting, including the annual report, are published on the company's website at www.hhla.de/agm together with the agenda. The information on attendance at the Annual General Meeting and the voting results can likewise be found on the company's website after the Annual General Meeting.
HHLA prepares its consolidated fi nancial statements and its interim reports in accordance with International Financial Reporting Standards (IFRS). This annual report provides further information on IFRS in the Notes to the Consolidated Financial Statements. The individual fi nancial statements for HHLA Aktiengesellschaft are prepared in line with the accounting regulations of the German Commercial Code (HGB). The appropriation of profi ts is based solely on the individual fi nancial statements.
Arrangements have been made with the auditor for the 2012 fi nancial year – Ernst & Young GmbH, Wirtschaftsprüfungsgesellschaft, Hamburg – for the Chairman of the Audit Committee to be informed immediately of any possible grounds for exclusion or bias arising during the audit, insofar as these are not rectifi ed without delay. The auditor should also report immediately on any fi ndings or incidents arising from the audit of the fi nancial statements which are of signifi cance for the Supervisory Board's remit. Furthermore, the auditor is to inform the Supervisory Board and/or record in its report if – when conducting the audit – it identifi es facts which indicate that the declaration of compliance issued by the Executive Board and Supervisory Board as per Section 161 of the German Stock Corporation Act (AktG) is incorrect. The audit conducted includes an extended audit as stipulated under Section 53 of the German Budgetary Procedures Act (HGrG). This requires an audit and assessment of the propriety of the company's management and its fi nancial situation as part of the audit of the annual fi nancial statements.
The following Remuneration Report is part of the Group Management Report.
Following preparatory work by its Personnel Committee, the Super visory Board in its entirety is responsible for setting remuner ation for individual Executive Board members in accordance with Section 87 (1) of the German Stock Corporation Act (AktG) and a corresponding provision in the Supervisory Board's rules of procedure. The German Corporate Governance Code also stipulates that the full Supervisory Board does not merely provide advice on, and examine the structure of, the remuneration system, but also decides the remuneration system for the Executive Board, including the core contractual components. When conducting their reviews, the Personnel Committee and the Supervisory Board take into account HHLA's size and activities, its fi nancial and economic position and the amount and structure of Executive Board remuneration at comparable companies. The responsibilities and services provided by each Executive Board member are also taken into account.
In the period under review, the remuneration of Executive Board members was made up of a non-performance-related annual salary, a performance-related bonus and other benefi ts.
Executive Board members receive their fi xed annual salary as twelve monthly payments. This fi xed salary includes benefi ts in the form of non-monetary compensation. These consist of the right to use an appropriate company car (for business and private purposes) and the payment of insurance premiums by the company. The members of the Executive Board pay tax on these benefi ts as components of their remuneration.
The performance-related bonus is usually set using a three-year assessment period as a basis. The calculation is based on the average earnings before interest and taxes (EBIT) for the last three years (before additions to pension provisions and reduced by any extraordinary income from the disposal of real estate and companies), the average return on capital employed (ROCE) and
| 0 % minimum |
The payment level of the variable remuneration is capped at 150 % of the basic salary. |
150 % maximum |
||
|---|---|---|---|---|
| Performance-related components |
Average EBIT | (before pension provisions, less extraordinary income) | ||
| Calculated based on a three year assessment period |
||||
| Sustainability targets I Economy Average return on capital employed (ROCE) | ||||
| I Environment CO2 reduction 1 | ||||
| I Society Continuing education and training, health and employment | ||||
| Non-performance related basic salary 2 |
per container handled and transported
plus supplementary payments
the achievement of targets relating to environmental issues (reduction of the carbon footprint of each container handled and transported) and social issues (split between into training and continuing professional development, health and employment) in the same period. Target ranges were set for each of the components used in the calculation for the period from 2011 to 2013. Achieving these targets triggers the payment of the relevant bonus. When making these calculations, roughly equal weight is given to EBIT on the one hand and the above-mentioned sustainability components on the other. The variable remuneration is capped at 150 % of the basic salary. It is paid out once the annual fi nancial statements have been approved.
In addition to this, there is a pension commitment for each Executive Board member. Pensions are paid to former Executive Board members after a minimum of fi ve or eight years' service on the Executive Board if they leave the Board for reasons unrelated to the Board member, or as a result of incapacity or due to reaching retirement age. Pensions consist of a percentage of the entitlement salary, which in turn is based on the annual basic salary. This percentage is between 35 and 50 %. Several different forms of income are taken into account for this, such as earnings from self-employment or employment and, in some cases, income from statutory pensions and related benefi ts from public funds.
Surviving spouses of Executive Board members receive a widow(er)'s pension of 55 to 60 % of the pension entitlement and children receive an orphan's allowance of 12 to 20 % of the pension. Should the pension entitlement have been suspended or no longer apply, transitional or interim pay will apply for a limited period on the basis of the annual basic salary.
After leaving the Executive Board on 31 December 2011, Dr. Jürgens will receive his contractually agreed basic salary until 31 December 2013 at the latest. The sum of € 325,000 has been stipulated as the basis for calculating his performance-related pay. If the employment relationship ends before 31 December 2013, Dr. Jürgens will receive compensation equivalent to 42 % of the remaining remuneration payable until 31 December 2013. With the departure of Dr. Jürgens, the Executive Board has decreased in size to four members. A replacement for this Executive Board position is not envisaged for the time being.
The service contracts valid in the reporting period include a compensation provision relating to change of control or comparable circumstances. This entitles Executive Board members to receive their remuneration entitlements as a lump sum for the remaining duration of their respective contracts, discounted by 2 % per annum, should their service contracts be terminated prematurely in such circumstances. This does not affect their pension entitlements. Should the service contracts be terminated prematurely for another reason without good cause, the payment of compensation by the company shall be limited to the remaining term of the contract.
The members of the Executive Board were not granted any loans or similar payments. The members of the Executive Board received total remuneration of approximately € 3.1 million for their services in the 2012 fi nancial year (previous year: € 4.1 million); this is down on the amount in the 2011 fi nancial year. Former members of the Executive Board and their surviving dependants received a total of € 1,384,630 (previous year: € 781,666), including the severance payments made to Dr. Jürgens in 2012. Total provisions of € 11,416,961 (previous year: € 10,339,784) were formed for pension obligations to former members of the Executive Board and their surviving dependants.
| Performance-unrelated payments | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Basic salary | Supplementary payments |
Performance-related components |
Total remuneration | Appropriation to pension provisions 1 |
||||||
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |
| Klaus-Dieter Peters | 465,000 | 465,000 | 13,066 | 13,451 | 529,547 | 543,586 | 1,007,613 | 1,022,036 | 250,423 | 258,532 |
| Dr. Stefan Behn | 325,000 | 325,000 | 12,484 | 12,188 | 370,315 | 380,132 | 707,799 | 717,321 | 153,644 | 157,582 |
| Heinz Brandt | 325,000 | 325,000 | 11,710 | 13,594 | 370,315 | 380,132 | 707,025 | 718,726 | 177,120 | 185,272 |
| Dr. Sebastian Jürgens | 0 | 325,000 | 0 | 231,902 | 0 | 325,000 | 0 | 881,902 | 0 | 90,772 |
| Dr. Roland Lappin | 325,000 | 325,000 | 9,142 | 7,665 | 370,315 | 380,132 | 704,457 | 712,798 | 94,455 | 99,001 |
| Total | 1,440,000 | 1,765,000 | 46,403 | 278,800 | 1,640,491 | 2,008,983 | 3,126,894 | 4,052,783 | 675,642 | 791,159 |
Additions to pension provisions only include the service and interest expenses attributable to the reporting year.
The fi gure for the previous year has been restated accordingly for ease of comparison.
In accordance with Section 16 of HHLA's articles of association, Supervisory Board members are remunerated as resolved by the Annual General Meeting. This remuneration is based on the scope of the Supervisory Board members' activities as well as on the company's fi nancial position and results. The current remuneration clause was adopted at the General Meetings held on 24 September and 18 October 2007. The members of the Supervisory Board receive fi xed remuneration of € 10,000 per fi nancial year. The Chairman receives three times this amount and the Vice Chairman is paid one-and-a-half times the basic fi gure. This remuneration increases by 35 % if dividends are paid out to the holders of Class A shares for the fi nancial year in question. Supervisory Board members who belong to a committee receive an additional € 2,500 per committee per fi nancial year, while the Chairman of the respective committee receives € 5,000, but altogether no more than € 10,000. Supervisory Board members who have belonged to the Supervi-
sory Board or a committee for less than a whole fi nancial year receive a corresponding pro rata payment. Furthermore, Super visory Board members receive a meeting attendance fee of € 250 for each meeting of the Supervisory Board or one of its committees.
The remuneration system for the Supervisory Board is currently being examined with a view to adjusting it to comply with the German Corporate Governance Code in the version dated 15 May 2012. If applicable, an adjusted system will then be presented to the Annual General Meeting as a resolution to be passed.
No loans or similar payments were granted to members of the Supervisory Board. Other than the remuneration payable to the employee representatives under their contracts of employment, the members of the Supervisory Board did not receive any other payment for additional services rendered. The total remuneration paid to members of the Supervisory Board amounted to € 282,143 (previous year: € 291,148).
| Fixed remuneration |
Variable remuneration |
Remuneration for committee work |
Meeting fee | Total | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | |||||
| Prof. Dr. Peer Witten | 30,000 | 30,000 | 10,500 | 10,500 | 5,000 | 5,000 | 1,750 | 2,750 | 47,250 | 48,250 | ||||
| Wolfgang Rose | 15,000 | 15,000 | 5,250 | 5,250 | 0 | 2,500 | 1,500 | 2,500 | 21,750 | 25,250 | ||||
| Torsten Ballhause | 10,000 | 3,890 | 3,500 | 1,362 | 5,000 | 1,616 | 3,250 | 1,000 | 21,750 | 7,868 | ||||
| Petra Bödeker-Schoemann | 5,492 | 0 | 1,922 | 0 | 2,842 | 0 | 1,250 | 0 | 11,505 | 0 | ||||
| Dr. Bernd Egert | 10,000 | 10,000 | 3,500 | 3,500 | 2,500 | 7,753 | 1,000 | 2,500 | 17,000 | 23,753 | ||||
| Holger Heinzel | 10,000 | 10,000 | 3,500 | 3,500 | 1,298 | 0 | 1,500 | 1,500 | 16,298 | 15,000 | ||||
| Jörg Klauke | 4,536 | 10,000 | 1,587 | 3,500 | 2,268 | 5,000 | 1,000 | 3,500 | 9,391 | 22,000 | ||||
| Dr. Rainer Klemmt-Nissen | 4,536 | 10,000 | 1,587 | 3,500 | 5,669 | 10,000 | 1,250 | 4,000 | 13,042 | 27,500 | ||||
| Dr. Norbert Kloppenburg | 5,492 | 0 | 1,922 | 0 | 3,511 | 0 | 1,750 | 0 | 12,675 | 0 | ||||
| Frank Ladwig | 5,492 | 0 | 1,922 | 0 | 1,298 | 0 | 1,000 | 0 | 9,712 | 0 | ||||
| Thomas Mendrzik | 4,536 | 10,000 | 1,587 | 3,500 | 1,134 | 3,308 | 1,000 | 2,500 | 8,257 | 19,308 | ||||
| Arno Münster | 10,000 | 10,000 | 3,500 | 3,500 | 7,500 | 10,000 | 4,000 | 5,250 | 25,000 | 28,750 | ||||
| Norbert Paulsen | 5,492 | 0 | 1,922 | 0 | 2,596 | 0 | 1,500 | 0 | 11,510 | 0 | ||||
| Michael Pirschel | 10,000 | 5,452 | 3,500 | 1,908 | 7,500 | 1,616 | 3,250 | 1,000 | 24,250 | 9,977 | ||||
| Dr. Sybille Roggencamp | 5,492 | 0 | 1,922 | 0 | 4,809 | 0 | 1,500 | 0 | 13,723 | 0 | ||||
| Uwe Schröder | 0 | 4,959 | 0 | 1,736 | 0 | 3,719 | 0 | 2,750 | 0 | 13,164 | ||||
| Walter Stork | 4,536 | 10,000 | 1,587 | 3,500 | 2,268 | 5,000 | 1,250 | 3,250 | 9,641 | 21,750 | ||||
| Peter Wenzel | 0 | 4,575 | 0 | 1,601 | 0 | 651 | 0 | 1,000 | 0 | 7,827 | ||||
| Jörg Wohlers | 4,536 | 10,000 | 1,587 | 3,500 | 2,268 | 5,000 | 1,000 | 2,250 | 9,391 | 20,750 | ||||
| Total | 145,137 | 143,877 | 50,798 | 50,357 | 57,459 | 61,164 | 28,750 | 35,750 | 282,143 | 291,148 |
All fi gures exclude VAT.
Fully qualifi ed business administration manager, Hamburg Former member of the Otto Group Executive Board
Vice Chairman Banker, Hamburg Social education worker, Hamburg Former executive at ver.di (trade union) in Hamburg (until 15 June 2012)
Fully qualifi ed business and employment lawyer (HWP), Hamburg Trade union secretary for Harbours work group, ver.di Hamburg (until 30 June 2012)
Local manager of the Transport division, ver.di Hamburg (since 1 July 2012)
I HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg
I SGG Städtische Gebäudereinigung GmbH, Hamburg
I IMPF Hamburgische Immobilien Management Gesellschaft mbH (since 20 March 2012)
Physicist, Winsen a. d. Luhe State Secretary at the Hamburg Ministry for the Economy, Transport and Innovation
Fully qualifi ed business administration manager, Hittfeld Director of Finance and Controlling at HHLA
Port technician, Hamburg
Vice Chairman of the HHLA works council
Administrative lawyer, Hamburg
Managing Director of HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg Other mandates
Member of the Executive Board of KfW Bankengruppe, Frankfurt am Main
HHLA ANNUAL REPORT 2012
Chairman of the works council of HHLA Container Terminal Tollerort GmbH
I HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg
Electrical technician, Hamburg
Vice Chairman of the HHLA Container Terminal
Altenwerder GmbH, Hamburg
Port technician, Hamburg Chairman of the works council at HHLA and the Group works council
Fully qualifi ed engineer, Hamburg
HHLA fl ood protection offi cer
Fully qualifi ed economist, Bispingen
Departmental head at the Hamburg Ministry for the Economy, Transport and Innovation in the Free and Hanseatic City of Hamburg
Head of the Offi ce for Asset and Investment Management at the Hamburg Ministry of Finance
Former Chairman of the Executive Board of NAVIS Schiffahrtsund Speditionsgesellschaft AG, Hamburg
Fully qualifi ed senior savings bank manager, Hamburg Haspa Finanzholding, member of the Executive Board (Vice Chairman) (until 31 March 2012) Hamburger Sparkasse AG, Hamburg (Member of the Executive Board) (until 31 March 2012) Other mandates
Dr. Rainer Klemmt-Nissen (until 14 June 2012, Chairman) Dr. Sibylle Roggencamp (since 25 June 2012, Chairwoman since 20 August 2012) Arno Münster (Vice Chairman until 14 June 2012) Frank Ladwig (since 25 June 2012, Vice Chairman since 20 August 2012) Torsten Ballhause Jörg Klauke (until 14 June 2012) Dr. Norbert Kloppenburg (since 25 June 2012) Michael Pirschel Walter Stork (until 14 June 2012)
Jörg Wohlers (until 14 June 2012, Chairman) Dr. Norbert Kloppenburg (since 14 June 2012, Chairman since 20 August 2012) Arno Münster (Vice Chairman) Torsten Ballhause Petra Bödeker-Schoemann (since 14 June 2012) Jörg Klauke (until 14 June 2012) Dr. Rainer Klemmt-Nissen (until 14 June 2012) Norbert Paulsen (since 14 June 2012) Michael Pirschel
Dr. Rainer Klemmt-Nissen (until 14 June 2012, Chairman) Petra Bödeker-Schoemann (since 25 June 2012, Chairwoman since 26 November 2012) Thomas Mendrzik (until 14 June 2012, Vice Chairman) Norbert Paulsen (since 25 June 2012, Vice Chairman since 26 November 2012) Holger Heinzel (since 25 June 2012) Arno Münster Michael Pirschel Dr. Sibylle Roggencamp (since 25 June 2012)
Prof. Dr. Peer Witten (Chairman until 14 June 2012) Arno Münster (Vice Chairman until 14 June 2012) Dr. Bernd Egert Frank Ladwig (since 25 June 2012) Thomas Mendrzik (until 14 June 2012) Dr. Sibylle Roggencamp (since 25 June 2012) Wolfgang Rose Walter Stork (until 14 June 2012)
Prof. Dr. Peer Witten (Chairman) Dr. Bernd Egert (Vice Chairman) Dr. Sibylle Roggencamp (since 25 June 2012) Walter Stork (until 14 June 2012)
Prof. Dr. Peer Witten Dr. Bernd Egert Frank Ladwig (since 25 June 2012) Arno Münster (until 14 June 2012) Wolfgang Rose
Chairman Forwarding agent, Hamburg First appointed: 2003
Fully qualifi ed business administration manager, Hamburg First appointed: 1996
Fully qualifi ed industrial engineer, Hamburg First appointed: 2003
I SC HPC Ukraina, Odessa, Ukraine
Course of Business and Economic Situation
Container Segment
Please see page 198 et seq. for a full list of HHLA's shareholdings, listed by business sector.
Hamburger Hafen und Logistik AG (HHLA) is a leading company in the European seaport transportation industry. As an integrated handling, transport and logistics provider, the HHLA Group offers services along the logistics chain between overseas ports and their European hinterland. Since its foundation, HHLA's activ ities have also included the development and letting of properties in Hamburg. HHLA runs the Group as a strategic management holding company. Its operations are carried out by the 32 domestic and eight foreign subsidiaries which make up the consolidated group.
In the fi nancial year 2012, the following changes were made to the company's structure. In the course of separating ownership structures in the Intermodal segment, one company and its subsidiaries which were consolidated proportionately before were fully included in the scope of consolidation, while another company was deconsolidated following its disposal. At the beginning of the year, the consolidation method used until 2011 for two fully consolidated fruit companies in the Logistics segment was switched to accounting using the equity method. As a result, these fi rms were no longer part of the scope of consolidation. See also Notes on the Reporting, page 95, and Note 3 in the Notes to the Consolidated Financial Statements, page 147. No other signifi cant legal or organisational changes were made.
The HHLA Group is divided into two subgroups, Port Logistics and Real Estate. The subgroup Port Logistics encompasses the Container, Inter modal and Logistics segments. The Holding/Other division is likewise part of the Port Logistics subgroup, although according to International Financial Reporting Standards (IFRS) it does not constitute a separate segment. The Holding division is responsible for strategic corporate development, the central management of resources and processes, and the provision of shared services for the operating companies. It also includes the properties specifi c to HHLA's
port handling business and the Group's fl oating crane operations. The Class A shares, which are listed on the stock exchange, relate to the subgroup Port Logistics and entitle shareholders merely to participate in the result and net assets of these commercial operations.
Through its subgroup Port Logistics, HHLA is one of the leading port logistics companies in the European North Range, i.e. the ports between Hamburg in Germany and Le Havre in France. The geographical focus of its commercial activities is on the Port of Hamburg and its hinterland. The Port of Hamburg is a major international hub for container transport by sea and land, with an optimal hinterland link to the economies of Central and Eastern Europe, Scandinavia and the Baltic region.
The subgroup Real Estate includes those HHLA properties which are not specifi c to port handling, i.e. the properties in Hamburg's historical warehouse district (Speicherstadt) and at the fi sh market Hamburg-Altona. The performance and fi nancial result of the Real Estate subgroup, which also follows urban development objectives, are represented by the Class S shares. These shares are not traded on the stock exchange and are held solely by the Free and Hanseatic City of Hamburg (FHH). In the unlikely and unprecedented event of the subgroup Real Estate reporting a loss, this would be indirectly transferred to the Free and Hanseatic City of Hamburg in line with a separate agreement to assume losses.
As a German stock corporation (Aktiengesellschaft), HHLA has a dual structure of management and supervision consisting of an Executive Board and a Supervisory Board, in line with common German practice. The Executive Board manages the company on its own responsibility. The Supervisory Board appoints, advises and monitors the Executive Board.
Fields of Responsibility
Executive Board Members
| Supervisory Board | ||||||||
|---|---|---|---|---|---|---|---|---|
| Executive Board | ||||||||
| Klaus-Dieter Peters | Dr. Stefan Behn | Heinz Brandt | Dr. Roland Lappin | |||||
| I Coordination Executive Board |
I Container Segment | I Human Resources | I Finance and Controlling |
|||||
| I Intermodal Segment | I Information Systems | I Purchasing and Supplies/ Materials |
I Investor Relations | |||||
| I Logistics Segment | I Legal and Insurance | I Internal Audit | ||||||
| I Corporate Communications |
I Health and Safety in the Workplace |
I Real Estate Segment | ||||||
| I Corporate Development |
||||||||
| I Sustainability |
In 2012, the Executive Board of HHLA comprised four members, whose areas of responsibility are defi ned by their specifi c tasks and operating segments.
The Supervisory Board has twelve members in all, with six representing the shareholders and six representing the employees. See also Board Members and Mandates, page 62 et seq.
The Container segment pools the Group's container handling operations and is its largest business unit in terms of revenue and results. The Group's activities in this segment consist primarily of handling container ships (the loading and discharging of containers) and transferring containers to other carriers (rail, truck, feeder ship or barge). HHLA operates three high-performance container terminals in Hamburg: Altenwerder (CTA), Burchardkai (CTB) and Tollerort (CTT). In addition, HHLA also performs handling services at another container terminal in Odessa (CTO), Ukraine. The portfolio is rounded off by supplementary
container services, such as maintenance and repairs provided by its subsidiary HCCR.
The Intermodal segment is the second-largest of HHLA's segments in terms of revenue and results. As a further key element of HHLA's business model, which is vertically integrated along the transportation chain, the segment provides a comprehensive seaport–hinterland rail and truck network. HHLA runs two rail operators, Metrans and Polzug, who ensure regular train connections to and from Central and Eastern Europe and within Germany, the Czech Republic and Poland. The trucking company CTD transports containers in the Hamburg, Berlin, Munich and Stuttgart metropolitan areas, as well as over long distances within Europe. The segment's service portfolio includes loading and discharging carriers and operating inland terminals.
The Logistics segment is the third pillar of HHLA's vertically integrated business model and offers a supplementary range of services. These encompass a wide range of contract and warehousing logistics, specialist handling services and consulting. Its service portfolio comprises both
stand-alone logistics services and entire process chains for the international procurement and distribution of merchandise, including the operation of handling facilities for dry bulk, motor vehicles and fruit, as well as the handling of cruise ships. In this segment, HHLA also provides consulting and management services for clients in the port and transport industry. Some of the logistics services are provided together with partner companies.
The HHLA Real Estate segment corresponds to the Real Estate subgroup. Its business activities encompass the development, letting and management of properties in the Port of Hamburg's peripheral area. These include the historical warehouse district (Speicherstadt), the largest complex of traditional warehouses in the world. In this central location, HHLA offers some 320,000 m2 of commercial space. Other prime properties totalling around 65,000 m2 are managed by Fisch markt Hamburg-Altona GmbH in the exclusive environment of the River Elbe's northern banks. The segment's core competencies are real estate services tailored to customers' requirements, as well as services such as sales, property management, facility management, project development and construction engineering.
With its listed core business Port Logistics, HHLA operates on the European market for international sea freight services. The company's handling, transportation and logistics services focus primarily on the interface between overseas traffi c and seaborne feeder services, as well as on landbased pre- and onward-carriage systems.
Sea freight shipping as a whole is regarded as a growth market since falling transport costs in relation to merchandise value and looser trade restrictions have created a favourable environment for the global division of labour in procurement, production and sales. Maritime shipping is by far the most important mode of transport used in intercontinental trading as it is the most cost-effective and environmentally friendly option per transported unit. In addition to the effi ciency benefi ts of the container as a standardised transport box, the increasing integration of the emerging economies of Central and Eastern Europe and Asia in particular have led to rising freight volumes. The development of many emerging economies is closely linked to their export business. In turn, the consumer markets and manufacturing opportunities offered by these countries are becoming increasingly important for the industrialised nations.
The market for port services along the North European coast (the North Range) relevant for HHLA is characterised by its high density of ports. Competition is currently strongest between the major North Range ports of Hamburg, HHLA's main hub, Bremen/Bremerhaven, Rotterdam and Antwerp.
Other handling sites – such as Le Havre and Zeebrügge – are considerably smaller in terms of their local freight volume and the size of their catchment areas. At present, the Baltic Sea ports are primarily served by feeder traffi c operating via central distribution points in the North Range (hub-and-spoke system). Overseas services docking directly at ports, such as Gdansk in Poland, compete with this network system.
Source: Port Authorities
Seaborne Container Throughput by shipping region in the port of Hamburg, 2012
Following the opening of a new container terminal in Wilhelmshaven (JadeWeserPort) in autumn 2012, port extension projects in Rotterdam (Massvlakte 2) and the greater London area (London Gateway) will add an extra 10 % to 15 % to existing handling capacities over the next few years. Depending on economic trends and the development in demand, this may lead to more intense competition, especially for freight volume with greater geographical fl exibility, such as seaborne feeder traffi c. In contrast to this, the market position for handling volumes which are tied to the natural catchment area inland is normally very sustainable – given that it is vital to take the shortest route for the disproportionately more expensive land-based transportation. The high capital intensity of running a terminal, long development lead times and start-up phases for facilities which often span several years also place high demands on the size and fi nancial strength of new competitors.
by container throughput, 2012
| 1. | Shanghai, China | 32.5 |
|---|---|---|
| 2. | Singapore | 31.6 |
| 3. | Hong Kong, China | 23.1 |
| 4. | Shenzhen, China | 22.9 |
| 5. | Busan, South Korea | 17.0 |
| 6. | Ningbo, China | 16.8 |
| 7. | Guangzhou, China | 14.7 |
| 8. | Qingdao, China | 14.5 |
| 9. | Los Angeles/Long Beach, USA | 14.1 |
| 10. | Dubai, United Arab Emirates | 13.3 |
| 11. Tianjin, China | 12.3 | |
| 12. | Rotterdam, The Netherlands | 11.9 |
| 13. | Port Kelang, Malaysia | 10.0 |
| 14. | Kaohsiung, Taiwan | 9.8 |
| 15. | Hamburg, Germany | 8.9 |
| 16. | Antwerp, Belgium | 8.6 |
| 17. | Dalian, China | 8.1 |
| 18. Tanjung Pelepas, Malaysia | 7.7 | |
| 19. | Xiamen, China | 7.2 |
| 20. Jakarta, Indonesia | 6.2 |
The Container Segment benefi ts from the Port of Hamburg's position as the most easterly North Sea port, which makes it the ideal hub for the entire Baltic region and for hinterland traffi c to Central and Eastern Europe. Furthermore, the long-standing trading relationships between the Port of Hamburg and the Asian markets are advancing Hamburg's role as an important European container hub.
With a throughput of 8.9 million standard containers (TEU), Hamburg was once again Europe's second-largest container port behind Rotterdam in 2012. After Chinese ports, in particular, have risen to occupy leading places on account of their massive growth in recent years, Hamburg ranks 15th in the list of the world's leading international ports. Consignments to and from Hamburg often originate from, or are destined for, China.
In the Container segment, HHLA competes directly with other terminal operators in Hamburg and the rest of Northern Europe. Primary competitive factors – apart from pricing – are the reliability and speed of ship handling, and the scope and quality of container handling services. Other factors affecting the terminal operators' competitive position are the port's geographical position, its hinterland links and its accessibility from the sea.
In Hamburg, HHLA maintained its position as the largest container handling fi rm with a total throughput volume in all segments of 7.0 million TEU in 2012. A good 78 % of container traffi c (previous year: 75 %) at the Port of Hamburg was handled by HHLA. Among the major North Range ports, its market share rose to 19.6 % (previous year: 19.3 %) which, in addition to a robust increase in Baltic Sea traffi c, was due largely to strong growth in the North America shipping region. HHLA benefi ted from further improvement to its range of services for handling mega-ships and coordinating feeders, while persistently high ship operating costs helped to highlight the port's geographical advantage. See also Container Segment, page 98 et seq.
The Intermodal Segment strengthens HHLA's market position by offering a complementary range of seaport–hinterland traffi c services. In particular, HHLA utilises the advantages of the Port of Hamburg's rail infrastructure – Europe's most important rail traffi c hub. The affi liates which transport containers by train compete with other rail and intermodal transport operators, but also with other carriers such as trucks and, in some cases, feeder ships. As the rail infrastructure is for the most part publicly owned, various authorities guard against discrimination in both access and usage fees. These include the Federal Network Agency and the Federal Railway Authority in Germany and corresponding bodies abroad and at EU level. Against this backdrop, key competitive factors include the density of the available network, the frequency of departures, opportunities for freight pooling and storage in the hinterland, the geographical distance to destinations, on-schedule operation and infrastructural capacity.
The Metrans Group – part of the HHLA rail network – has steadily expanded its market position as a leading rail operator for intermodal transportation from Hamburg, Bremen/Bremerhaven, Koper and Rotterdam to the Czech and Slovak Republics and Hungary. Polzug is an established provider of rail-bound transport services from Hamburg, Bremerhaven and Rotterdam, as well as the Polish ports of Gdynia and Gdansk, operating container trains to the Central and Eastern European hinterland (primarily Poland and the CIS) and ultimately Central Asia. Proprietary inland terminals play a major role in HHLA's service
offering in Central and Eastern Europe and give the company a signifi cant competitive edge. They enable the use of more productive direct trains (shuttles) with shorter transit times and allow the effi cient pooling of rail freight to and from the port. This is distributed and collected using a hub-andspoke model centring on facilities such as those in Prague and Poznan. In the German-speaking region, Metrans operates and develops train links within Germany, and to and from Austria, where a company-owned inland terminal is also used at the port of Krems on the river Danube. In the delivery and collection of containers by truck, the Group's affi liate Container-Transport-Dienst (CTD) has a sound market position in the greater Hamburg region and also offers services throughout Germany by means of a joint venture with the major trucking company EKB Container Logistik. See also Intermodal Segment, page 99 et seq.
The Logistics Segment serves various market sectors, some of them highly specialised. Via Hansaport, for example, HHLA has a stake in Germany's largest seaport terminal for handling iron ore and coal. HHLA's complementary range of warehouse and contract logistics services supports the Group's market positions in the handling and transportation sectors. In the fi eld of port consultancy, the Group's affi liates Hamburg Port Consulting (HPC) and Uniconsult work on pioneering development projects around the world. See also Logistics Segment, page 101 et seq.
With its population of around 1.8 million and its signifi cance as an economic centre, Hamburg is one of the largest and most interesting property markets in Germany for the Real Estate Segment. The HHLA Real Estate segment owes its outstanding market position to the special attractiveness of the properties it manages in Hamburg's historical warehouse district (Speicherstadt) and on the Northern bank of the Elbe, as well as their customer-specifi c and sustainable enhancement. The segment competes with German and international investors marketing high-quality properties in comparable locations. See also Real Estate Segment, page 102.
The customer base in the Container and Intermodal segments consists mainly of shipping companies and freight forwarders. The services provided in the Logistics segment are aimed at various customer groups, ranging from steel companies and power stations (in the fi eld of bulk cargo handling) to international operators of ports and other logistics centres (in the fi eld of port consulting). The Real Estate segment lets its offi ce space and commercial premises to German and international corporate customers from a variety of sectors, ranging from logistics and trading companies to media, consulting and advertising agencies, fashion fi rms and restaurants.
Globally operating container shipping companies are the customers which account for the largest share of HHLA's revenue. In ship handling, HHLA's container terminals work on a neutral basis with many shipping companies (multi-user principle) and are therefore geared to offering a wide range of high-quality services. In the 2012 fi nancial year, HHLA's customer base included 19 of the 20 largest container shipping companies. HHLA therefore believes that it is able to respond fl exibly to changes in the consortia and collaborations formed by its clients in the shipping sector. Many shipping companies are currently following the trend towards optimising their service portfolios by forming new partnerships or pooling capacity and thereby strengthening their competitive position. HHLA is accompanying this development closely based on its long-standing contacts. In the 2012 fi nancial year, HHLA's fi ve most important customers accounted for approximately 50 %, its ten most important for 74 % and its 15 most important for 87 % of revenue generated by the HHLA container terminals in Hamburg. HHLA has maintained commercial relationships with the vast majority of its most important customers for more than two decades.
HHLA generally concludes individual framework contracts with its major customers. These contracts contain comprehensive descriptions of the services to be rendered and of the remuneration arrangements. The actual usage of the services is not fi xed beforehand, as the shipping companies transport the goods, but the freight volumes and transport routes are determined by the producers or purchasers of the goods. Volumes in the Container segment therefore do not constitute
| 1. | APM-Mærsk | 2,584 |
|---|---|---|
| 2. | MSC | 2,233 |
| 3. | CMA CGM | 1,386 |
| 4. | Evergreen Line | 723 |
| 5. | COSCO | 716 |
| 6. | Hapag-Lloyd | 632 |
| 7. | APL | 576 |
| 8. | Hanjin | 573 |
| 9. | CSCL | 549 |
| 10. | MOL | 506 |
| 11. | OOCL | 450 |
| 12. | Hamburg Süd | 421 |
| 13. | NYK | 401 |
| 14. | Yang Ming Line | 358 |
| 15. | K Line | 353 |
| 16. | Hyundai M.M. | 347 |
| 17. | Zim | 318 |
| 18. | PIL (Pacifi c Intl. Line) | 300 |
| 19. | UASC | 271 |
| 20. | CSAV | 259 |
Source: AXS Alphaliner
an order backlog in the traditional sense. Sales activities are organised by means of traditional key account management with individual advice and support for major customers. Selling the services on offer is not the only objective of these activ ities. They are also aimed at optimising processes and thereby helping to increase added value for customers. HHLA therefore provides container shipping companies with their own key account managers. These managers are responsible for providing comprehensive advice at strategic and operational level.
The Intermodal and Logistics segments are aligned locally with the specifi c needs of their customers. Sales activities are usually managed by the individual companies. As far as possible, they follow the strategic approach of vertical integration, i.e. offering comprehensive transport and logistics services from a single source. The companies in the Intermodal segment each maintain their own sales departments at their headquarters in Hamburg, Prague and Warsaw. They also use regional offi ces at the seaports, in the target markets and central locations overseas to provide local support for their shipping and forwarding customers and to acquire new business.
split by customers in the Container segment at the main location Hamburg, 2012
In the Real Estate segment, sales activities are organised according to the two main locations, Hamburg's Speicherstadt historical warehouse district and the northern banks of the Elbe, as well as logistics properties in and around the port. Real estate staff specialising in the respective properties can therefore advise potential customers and tenants across the whole spectrum of services and offer customised solutions based on their location expertise. Construction and consulting services are also provided.
HHLA's strategy is aimed at attaining a leading position as a port logistics provider and thus achieving sustainable growth in its enterprise value. This long-term approach to corporate development considers the company's economic, ecological and social responsibilities in equal measure with the goal of strengthening the Group's competitiveness. With its business model of vertical integration along the transport chain between the international seaport and its European hinterland, HHLA believes it is favourably positioned to exploit the intensifi cation in global trade and achieve profi table growth. This is underlined by Hamburg's role as an international hub linking the Far East, especially China and India, with the economies of Central and Eastern Europe.
No fundamental changes were made to corporate strategy in the 2012 fi nancial year. In order to consolidate and expand the Group's market position, HHLA pursues the following strategic guidelines:
HHLA plans to constantly improve its competitiveness by further enhancing its service quality and technological capabilities. It concentrates both on retaining its broad customer base and attracting new clients. Its ship handling activities focus primarily on improving the effi ciency of its handling services and responding to the requirements of container mega-ships which are increasingly prompting peak workloads. This involves systematically gearing the design and operation of facilities towards maximising the productivity of land usage, manpower and capital. In order to strengthen its leading position in handling technology, HHLA works particularly on innovating its systems and optimising processes. To this end, HHLA continuously improves its IT basis. To ensure that it is largely independent from external IT service providers, HHLA develops and maintains systems critical to success itself – unless standard modules can be procured and used for such purposes. See also Research and Development, page 86 et seq.
HHLA's strategic foundation
In order to ensure a consistently high standard of service, HHLA will continue to pursue its multi-user concept in the Container segment, i.e. providing a neutral service to as many shipping companies as possible in the handling of ships and the allocation of berths. The company believes that this concept will secure the long-term existence of a balanced customer portfolio and the profi tability of its services.
In order to steadily improve the quality of its preand onward-carriage systems, the company also plans to systematically increase its control over the hinterland network at key transport junctions and further enhance its coordination of maritime feeder traffi c. In this way, freight traffi c and the accompanying information can be intelligently linked and thus optimally managed. By tailoring these activities to the specifi c demands of maritime transport chains, HHLA paves the way for an effi cient link between sales and procurement markets in the seaports' hinterland and via seaborne transport within Europe.
HHLA plans to continuously improve the services it provides by expanding intermodal transport between international ports and the rail and road networks. Besides increasing the scope and range of its services, HHLA also focuses on raising its value added. This approach is geared primarily towards making effective use of the Port of Hamburg's advantageous geographical position in terms of transport links by utilising synergies between handling and transport services and by adding complementary services (container repairs, empty container storage facilities, special
logistics, etc.). HHLA's activities are therefore mutually benefi cial: greater handling volumes in the Port of Hamburg result in more traffi c for hinterland transport and increased demand for logistics services. At the same time, the provision of effi cient transport systems and high-quality logistics services generates additional handling volumes for the HHLA container terminals.
In the rail sector, HHLA will continue to strengthen the market position of its Intermodal subsidiaries with the main geographical focus on the growth markets of Central and Eastern Europe. Investments will concentrate on inland terminals and their connection via highly effi cient shuttle systems, i.e. direct links to distribution centres. To this end, the company is also gradually increasing its own rolling stock (locomotives and carriages) so that it can operate as independently as possible on the market. HHLA will accompany these measures by expanding its truck companies, which focus on offering a comprehensive network for delivering and collecting sea containers over the "last mile" inland.
In addition to organic growth, HHLA regularly examines opportunities for acquisitions. Potential acquisitions and equity investments focus on port projects and shareholdings in attractive growth markets. Based on the economies of scope offered by the existing network and the opportunities it presents to tap additional potential, HHLA's primary interest from the North Sea coast is in the catchment area between the Baltic region, the northern Adriatic and the Black Sea. However, it does not categorically rule out potential
Sustainably increasing enterprise value at HHLA
projects and shareholdings in other high-growth regions. HHLA pursues a selective approach which has already proved successful with the takeover of terminal operations in Odessa on the Black Sea, for example. Both the Group's international consultancy activities and its ongoing corporate development work can provide starting points for this approach. In addition to strategic compatibility, key decision-making criteria include growth prospects, the anticipated return on capital employed, and the extent to which entrepreneurial risks can be limited.
In its non-listed Real Estate subgroup, HHLA pursues a long-term and value-oriented approach to enhancing the activities pooled in this segment. This includes in particular the development of areas and properties, their marketing, commercial property management and facility management.
HHLA's strategic development as a whole is supported and safeguarded by sound fi nancial resources and a good corporate credit rating, based on the criteria for investment-grade ratings. This ensures that HHLA can seize opportunities for value-enhancing corporate development and actively shape consolidation processes in the port logistics sector at any time. See also Financial Position, page 103 et seq.
HHLA uses a system of key fi gures to assess the achievement of its objectives. This is based on the return on capital employed (ROCE), which acts as a central gauge of the contribution made by business activities to value creation. The system is also embedded in a number of fi nancial and non-fi nancial progress indicators. These include revenue growth, cost effi ciency and margin development, as well as customer satisfaction, handling speed, geographical reach and many other factors. Together, all the key indicators form a self-contained framework for the value-oriented implementation and further development of the corporate strategy. See also Corporate and Value Management, page 80 et seq.
The most important strategic initiatives at present include the work to modernise the largest container terminal at the Port of Hamburg, which
reached an important milestone in 2012 with the launch of a new integrated system with control centre, block storage facilities and a new IT system. It is now possible to align further expansion phases with anticipated demand. These options are expected to offer suffi cient development opportunities for more than fi ve years. Other key projects expected to make considerable progress – particularly over the next two years – include the expansion of the HHLA Container Terminal Odessa (CTO) and of rail traffi c in the German-speaking region, as well as the restructuring of the now wholly owned Polzug Group in Poland.
In its business operations, HHLA is subject to numerous German and foreign statutory provisions and regulations such as public law, trade, customs, labour, capital market and competition regulations.
As the bulk of HHLA's commercial activities are concentrated in and around the Port of Hamburg, its regulatory environment is largely determined by the Hamburg Port Development Act (Hamburgisches Hafenentwicklungsgesetz – HafenEG). HafenEG formulates the structural framework for the sound development of commercial activity in the Hamburg port area. HafenEG's objectives are to maintain the Port of Hamburg's competitiveness as an international all-purpose port, to safeguard freight volumes and to use the public infrastructure as effectively as possible. To this end, the Port of Hamburg currently employs a "landlord model", by which the Hamburg Port Authority retains ownership of the port area and responsibility for building and maintaining the infrastructure, while the privately owned port operators are responsible for the development and maintenance of the superstructure (buildings and facilities). HHLA has concluded a long-term lease agreement with Hamburg Port Authority for those port areas of importance for its business operations.
For the construction, alteration and operation of its handling facilities, HHLA is reliant on
the issuance and continued existence of authorisations under public law, especially official authorisations in accordance with the German Federal Emissions Control Act (Bundesimmissionsschutz gesetz – BImSchG), the applicable local building regulations and water and waterways laws. All construction and extension measures require separate authorisations by the respective authorities, irrespective of the planning approval procedure for the expansion of the handling areas. HHLA's Group companies are subject to a number of strict regulatory requirements, especially if they are involved in the handling of materials which can have damaging effects on people or the environment, e.g. the handling, storage and transportation of environmentally dangerous materials and hazardous goods. These regulatory requirements also include regulations on technical safety, health and safety in the workplace and environmental protection.
HHLA's commercial activities are governed predominantly by the provisions of German and European competition law. This means that its pricing is determined by the market and is, as a matter of principle, not regulated.
Due to the dangers posed by international terrorism, there are strict security precautions at all ports. An essential component of these precautions is the International Ship and Port Facility Security Code (ISPS Code), which requires the internationally standardised installation of measures to prevent terrorist attacks on ocean-going vessels and port facilities. For the operators of port facilities, compliance with the code involves observing strict access control and implementing numerous other measures for averting danger.
The aforementioned international provisions are implemented in the Port of Hamburg's area by means of the German Port Security Act (Hafensicherheitsgesetz – HafenSG). The act contains far-reaching regulations which take account of the increased security requirements of the Port of Hamburg.
The dissolution of Hamburg's free port and introduction of the customs seaport as of 31 December 2012 resulted in signifi cant changes to the relevant customs regulations and processes for a number of HHLA subsidiaries. The transition to customs seaport processes was fully completed at the HHLA container terminals by the end of year.
The legal framework for HHLA is subject to constant change at national and international level, particularly by the European Community, in order to keep pace with technical progress and increasing public sensitivity with regard to safety and environmental issues. In specifi c terms, the European Commission is currently working on guidelines for the issuing of licences and/or construction, service or supply agreements in the transport sector. Depending on which form these guidelines take, they may affect HHLA in the future. The same applies to the German Regulation on Installations for the Handling of Substances Hazardous to Water, which is currently under development at national level. In the 2012 fi nancial year, however, there were no amendments to the legal framework with a signifi cant impact on the Group's fi nancial position, its earnings or its operating activities.
HHLA's primary objectives include the long-term, sustainable growth of its enterprise value. The company believes this is only possible in the long run if economic success is coupled with ecological and social responsibility. For this reason, all corporate decisions observe the principle of achieving a balance between economic, environmental and social considerations. See also Sustainability, page 88 et seq., and Corporate Strategy, page 77 et seq.
ROCE – defi ning parameters and infl uential factors
HHLA uses a Group-wide value management system for the planning, management and monitoring of its commercial activities. No changes were made to this system in the 2012 fi nancial year. The key performance indicator for fi nancial management is the fi gure ROCE (return on capital employed). This benchmark takes account of all the Group's relevant earnings and assets parameters, thereby encouraging value-generating corporate decisions in the interest of a closely coordinated management of profi tability and capital employed.
The HHLA Group calculates ROCE as a ratio of the operating result (EBIT) and the average operating assets used.
The reported unadjusted EBIT fi gure was used to calculate ROCE for the 2012 fi nancial year. The earnings indicator ROCE principally represents the average return on that capital which is employed to generate the operating performance. See also Note on the Reporting, page 95.
Return on capital employed is not only a central criterion for assessing investments, but also a signifi cant parameter for determining variable remuneration components for executives with operational responsibility. The focus on this target has been additionally emphasised for three years now, ever since a multi-year assessment time-frame was introduced for calculating performance-related remuneration components for executives.
Value-oriented management via the key performance indicator ROCE therefore serves to align all operating activities with the aim of promoting sustainable economic growth and raising enterprise value. Commercial activities are generally regarded as value-generating if the return on capital employed exceeds the cost of capital and they therefore make a positive value contribution. Such capital costs correspond to the weighted average of equity costs and the cost of borrowed capital. As in the previous year, HHLA used a weighted average cost of capital of 10.5 % before tax to
EBIT – target indicator
calculate its value growth at Group level in the 2012 fi nancial year. This cost of capital is based on the Executive Board's assessment of a stable, long-term rate of return arising from a balanced relationship between equity and borrowed capital. This approach aims to prevent temporary fl uctuations which can impair sustainable corporate development.
Group management follows a vertically integrated business model which enables the operating units to derive a high level of mutual benefi t from their business activities. For this reason, the segments and companies are not measured in isolation using a central return target. Instead, they are steered individually depending on their contribution to the Group, i.e. with regard to their specifi c segment and company characteristics.
HHLA's objective is to earn a sustainable premium on its capital costs. For this reason, considerable importance is attached to managing capacities in line with demand and in dialogue with customers – wherever allowed by the highly capital-intensive nature of the industry and investment projects that often take several years to be realised. Potential acquisition and investment possibilities that might constitute strategically useful additions are also mainly assessed according to their expected value contributions. The Group refrains from engaging in commercial activities with negative value contributions if they are unlikely to achieve the required internal return targets in future.
As EBIT dropped while tied-up capital increased slightly, ROCE fell by 1.7 percentage points yearon-year to 13.7 % in 2012, but remained well above the weighted average cost of capital of 10.5 %. This means that a positive contribution to value of € 43.1 million was achieved again in 2012, although this was down € 22.7 million or 34.5 % on the previous year. A positive contribution to value was still achieved after adjustment for the one-off gain of € 17.6 million reported in the fi nancial year from the realignment of Intermodal activities.
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Operating income | 1,187.6 | 1,268.8 | - 6.4 % |
| Operating expenses |
- 1,001.3 | - 1,061.8 | - 5.7 % |
| EBIT | 186.3 | 207.0 - 10.0 % | |
| Ø Net non-current assets |
1,269.8 | 1,257.9 | 0.9 % |
| Ø Net current assets |
93.4 | 86.7 | 7.8 % |
| Ø Operating assets |
1,363.2 | 1,344.5 | 1.4 % |
| ROCE in % | 13.7 | 15.4 | - 1.7 pp |
| Cost of capital before tax1 in % |
10.5 | 10.5 | 0.0 pp |
| Cost of capital before tax1 |
143.1 | 141.2 | 1.4 % |
| Value added in % | 3.2 | 4.9 | - 1.7 pp |
| Value added | 43.1 | 65.8 | - 34.5 % |
Of which 7.5 % for the Real Estate subgroup
In the operating business units, various non-fi nancial performance indicators are used in addition to the ROCE benchmark. For example, the number of handling moves per hour, energy effi ciency or the number of containers handled per square metre, the so-called land usage productivity, are important indicators for the quality of services rendered and the container terminals' performance. These and other performance indicators are therefore used intensively for the ongoing optimisation of specifi c operational processes, although they also serve the overriding objective of value-generating management. See also Sustainability, page 88 et seq.
In addition to the continuous dialogue HHLA maintains with its customers, the company makes extensive use of macroeconomic forecasts as early indicators for its operating activities. These include the anticipated development of gross domestic product for important trading partners, and the subsequent estimates for foreign trade and import/export fl ows, as well as for container traffi c on relevant routes.
HHLA had a total of 4,915 employees at the end of 2012. Compared with the previous year's total, there were 117 employees more, or an increase of 2.4 %. In geographical terms, the workforce was concentrated mainly in Germany, with 3,526 staff members. This corresponds to a share of 71.7 %, of whom the majority worked in Hamburg. The 1,389 jobs at foreign sites consisted mainly of 773 workers (15.7 %) at the Intermodal companies in the Czech Republic and Slovakia and 471 employees (9.6 %) in Ukraine. The remaining 155 employees were spread across subsidiaries in Poland and Georgia.
by segment as of 31.12.
| 2012 | 2011 | Change | |
|---|---|---|---|
| Container | 2,935 | 2,898 | 1.3 % |
| Intermodal | 1,010 | 902 | 12.0 % |
| Logistics | 311 | 422 | - 26.3 % |
| Real Estate | 37 | 38 | - 2.6 % |
| Holding/Other | 622 | 538 | 15.6 % |
| Total | 4,915 | 4,797 | 2.4 % |
Headcount in the Container segment – which accounts for 59.7 % of all jobs at HHLA – increased by 1.3 % to 2,935. Staffi ng levels in the Intermodal segment rose at a much faster rate by a total of 12.0 % to 1,010, thus accounting for 20.5 % of the total workforce. The number of employees in the Logistics segment fell by 26.3 % to 311 and therefore accounted for 6.3 % of the total HHLA headcount. Changes in both segments are largely due to the change in consolidation methods. The number of jobs in the Real Estate segment remained virtually unchanged at 37 or 0.8 % of the HHLA workforce. Meanwhile, the number of staff in the strategic management holding company and associated areas rose by 15.6 % to 622 on the back of consolidation changes, subsequently making up 12.7 % of the Group's total employees.
Collective labour agreements govern pay and working conditions for 92 % of staff in Hamburg. The fl uctuation rate in Hamburg (excluding reassignments within the Group) remained un-
changed at 4.3 % in 2012. Compared to 2011, the average employee age increased slightly by one year to 43 (men: 44, women: 38).
The number of accidents at the companies in the Port of Hamburg fell again to reach 73 (previous year: 88), excluding accidents while commuting. Based on throughput, the ratio improved even more to one accident per 100,000 loaded and discharged containers. The fall in the number of accidents – which shall be reduced even further – is the result of continuous improvements to occupational health and safety measures and efforts to raise awareness of these issues among HHLA's workforce.
The company's occupational safety and health programme includes company doctors, help with addictions and social problems, an integration management programme for employees following a lengthy period of illness, representatives for the severely disabled and staff sporting activities. The works council and HR management also play a part in running the various schemes. Targeted measures are in place to prevent accidents and also to avoid classic occupational illnesses such as those caused by excessive noise. HHLA companies run regular campaigns and incentives to improve health, safety and environmental protection. For instance, one-day campaigns developed in previous years continued to be held; in 2012 they concentrated on healthy eating. Exercise rooms were provided at the container terminals to promote physical fi tness. Regular health circles were held and psychological stress was monitored during hazard assessments to systematically record the need for preventative measures. Individually designed stress management activities were provided for teams under particular strain. Furthermore, staff members had access to internal advice centres for information on the issue of prevention. The tried-and-tested system of in-house counsellors was extended and made more professional by means of thorough training. These counsellors are the fi rst point of contact within the company for staff seeking advice on social and addiction issues.
The issues of all employees in Hamburg are discussed by occupational safety committees. Key
measures are evaluated at the statutory meetings of these occupational safety committees, which are held four times a year. The occupational safety management team actively helps to develop initiatives and delivers information internally by means of in-house tuition, training and practical exercises focusing on emergency precautions, such as preventing fi res and water pollution, advisory services, prevention and risk management programmes.
The Group attaches great importance to HR management and has thus established it as a central division at Executive Board level.
HHLA strengthened its commitment to training in the reporting year by providing apprenticeships for a total of 159 new staff (previous year: 130). The ratio of female trainees was increased: 26 % of apprenticeships offered were taken up by women (previous year: 22 %).
In order to cover the predicted need for highly qualifi ed employees, the number of trainees in parallel career and degree programmes was doubled in the reporting year. The percentage of women taking such courses amounted to 31 % across all years of study. No less than 40 % of the 2012 intake of trainees were women.
Staff development schemes for all employee categories and hierarchy levels in Hamburg are managed by the Central HR Management division. In some cases, special courses are developed for the Group's affi liates. Controlling such personnel management measures centrally makes it possible to create and support continuous learning processes and long-term development paths uniformly across the Group. Binding agreements have been made with the Group's works council regarding access to the programmes, the amount of funding provided by HHLA, and the quality control and evaluation of the various measures.
Training programmes are offered for young professionals and prospective managers to prepare them for future tasks. Experienced professionals and managers are supported with targeted measures such as seminars or needs-based coaching on the basis of individual consultations with the HR division. In 2012, the main focus was on training skilled workers to prepare for managerial roles and assisting managers in container handling. The aim was to prepare current and prospective managers for future changes in workfl ows and organisational processes or to provide them with advice during change processes. The comprehensive training programme was developed by the HR department as part of a strategically integrated knowledge management policy. It is designed and implemented as a modular programme. The training programme is set to be continued in 2013.
The certifi ed ship planner course endorsed by Germanischer Lloyd was also successfully completed in 2012. Ship planners coordinate loading and discharging procedures, making them a key link to our customers. With the introduction of this course, yet another structured career path in a skilled profession was established at HHLA.
In total, HHLA invested € 5.2 million (excluding travel costs) in the training and development of its staff in 2012. Training provided for technical employees accounted for around half of this amount. This corresponds to average expenditure of around € 400 per technical employee.
For three years now, HHLA has being using structured selection procedures known as assessment centres as a staff development tool. In 2012, this selection procedure was further developed and used to systematically determine employees' potential and to decide on suitable staff development measures. The Group-wide principle of diversity was also anchored in this instrument. Assessment centres are not only used to fi ll positions but also to identify existing employees' potential.
In order to be included in the structured staff development programmes, employees must successfully complete the assessment centre process. Candidates are selected by external consultants in an individual or group setting. Furthermore, there are always four company observers – including a member of the Group's
works council – who have been specially trained for the task. If there is a woman among the candidates, then there is also at least one woman on the company's team of observers.
for Management Positions
The majority of jobs at HHLA are in a segment of the labour market in which men are traditionally employed and women are proportionately less represented. Women therefore accounted for only 13.9 % of HHLA's workforce in Hamburg during the reporting period (previous year: 13.3 %). In order to fully utilise the change in working conditions at the port, HHLA offers development opportunities specifi cally for women in all areas and at all levels.
In the reporting year, for example, more female trainees were recruited for traditionally maledominated professions such as port logistics and mechatronics engineering. The fi rst female instructors for training on technical equipment used by skilled workers received their qualifi cations and started work in 2012.
In the programme for prospective managers, the share of female participants was around 30 %. It therefore exceeded the target set by the Executive Board in 2010, which stipulated that women should fi ll 20 % of managerial positions.
Moreover, 30 % of trainees on the certifi ed ship planner course were women.
In order to further increase the proportion of women across all groups of employees, female workers are profi led in information material and in the company's external publications to specifi cally attract women.
The number of part-time positions available has been increased to help employees reconcile their family commitments and work. HHLA also actively keeps in contact with staff on maternity or paternity leave, who receive advice and support from the Central HR Management division. Employees on maternity or paternity leave can still participate in seminars as part of the programme for prospective managers. They are invited to regular parents' get-togethers at the
Group's head offi ce along with their children. At these events, the HR department informs them about the company's development, current vacancies and training opportunities. Staff also have the chance to share their experiences with one another. These events are designed to keep employees involved in the company during maternity or paternity leave.
The aim is to consider aspects such as diversity and a healthy balance between professional and family commitments.
Purchasing is a shared service largely provided by the HHLA Group's management holding company in Hamburg. The process of centralisation made further progress in 2012. In addition to pooling purchasing processes and meeting the requirements of internal customers in terms of service and performance as fully as possible, other important objectives include transparency and harmonisation. The purchasing team ensures that capital goods, raw materials, consumables, supplies, services and other products are delivered reliably and on time, taking aspects such as cost, quality and sustainability into consideration. The department also safeguards process reliability and data security and is committed to standardising the supplier base. Purchasing constantly strives to improve supply chains and optimise supply processes. All staff engaged in this fi eld are obliged to uphold HHLA's code of conduct. See also Compliance, page 55 et seq.
The timely procurement of operating supplies and spare parts continues to play a fundamental role in ensuring the operational readiness of handling facilities and equipment. There were no supply shortages during the reporting year. Moreover, the degree of automation in procurement processes was successfully increased while at the same time retaining the required fl exibility.
Purchasing is divided into four classes of goods, thus offering internal customers a high degree of transparency, service and quality. In the reporting
year, the construction class accounted for approximately 37 % for equipment and energy, 28 % of total Group-wide procurement volumes, while the MRO class (maintenance, repairs and operations) accounted for 18 % and IT for 17 %. All in all, procurement volumes were below the previous year's level. Efforts to streamline the supplier base and pool purchasing activities once again enabled the Group to benefi t from more favourable conditions.
Spending on the various classes of goods was more evenly distributed than in the previous year. Equipment and energy accounted for the largest share of purchasing expenditure. This category includes the maintenance of large plants as well as new acquisitions and replacement investments. The procurement of ground-handling vehicles (straddle carriers) was a major factor here. Purchases in the construction class were on a par with the previous year. Purchases in the MRO category primarily consist of consumables and replacement parts. The purchasing and standardisation of spare parts is becoming increasingly important due to the procurement of ever more expensive equipment. As in the previous year, the IT product group continued to make stable progress in terms of volume.
The Group is deliberately diversifying its procurement activities and streamlining its supplier base. As a result, there were no signifi cant dependencies on individual suppliers in the 2012 fi nancial year, as in the previous year, neither at Group nor at segment level. There was a further increase in the strategic integration of suppliers into the development and optimisation of products, facilities and processes by means of partnerships. At the same time, the Group continued to focus on analysing and evaluating every aspect of its relationships with suppliers, such as reliability, quality, innovative strength, cost structures and economic stability.
Environmental and social compliance is also becoming increasingly important at local and global level for the products, services and business policies of the company's suppliers. HHLA has therefore issued a binding specifi cation stipulating the Group's requirements and guidelines with regard to sustainability and compliance.
As part of the drive to optimise procurement processes, the introduction of digital contract documentation was largely completed in 2012. The process of rolling out e-procurement (SAP-SRM) was also successfully continued in 2012; this application can now be used throughout the Group.
In order to achieve the Group's CO2 emissions targets, green power was again used in the year under review for the annual consumption of the HHLA Group's non-handling electricity consumers and the Container Terminal Altenwerder, rendering them carbon-neutral. Green electricity is also purchased for the amount of energy consumed by the fl eet of e-vehicles introduced in October 2012 at the HHLA Container Terminal Tollerort (CTT), rendering them carbon-neutral as well.
With the aid of energy trading controlled by the operative holding, additional efforts are being made to build on the positive effects in energy management, including the ongoing optimisation of equipment and buyers. The established tranche model used for energy procurement (electricity) made it possible for the Group to keep benefi ting from low purchasing prices.
One of HHLA's strategic objectives is to continuously improve the effi ciency of its operating systems, and consequently its competitiveness, by developing application-oriented technologies. The main focus of these activities is therefore on engineering and IT-based innovation projects. HHLA's project portfolio comprises a range of overarching pilot schemes. A good example is the HHLA Container Terminal Altenwerder (CTA), which is regarded as one of the world's most technologically advanced handling facilities. The intelligent, compact terminal layout, cutting-edge handling technology, innovative IT systems and high level of automation all ensure that loading and discharging is conducted effi ciently. Especially in the case of container mega-ships, this leads to shorter lay times, giving the terminal a signifi cant competitive advantage.
Development activities are largely carried out in a decentralised manner at HHLA's respective operating sites. The specialist departments assemble teams of employees with a wide range of qualifi cations for the various development projects based on the specifi c requirements. In some cases, these teams include staff from different departments and even different Group companies. Due to close collaboration with technical universities, institutes, industry partners and the German Federal Ministry of Economics and Technology, joint projects can be planned, managed and developed by specially assembled task forces. As a result of the collaboration with numerous partners, the technological innovations are generally not registered as HHLA-exclusive patents. A unique feature, however, is the largely proprietary software for terminal operations at the port.
In the 2012 fi nancial year, HHLA channelled considerable resources into implementing new and fully developed technological components at the Group's largest handling facility. Furthermore, available capacity was largely focussed on pursuing the pilot projects outlined below.
As part of the largely completed support initiative Innovative Seaport Technologies II (ISETEC II), new technologies for German seaports and their hinterland links have been examined and developed. The aim is to enable them to cater for fast-growing transport volumes, which remain a long-term trend. The project is funded by the German Federal Ministry of Economics and Technology. Several HHLA companies were involved in various development projects again in the 2012 fi nancial year. The projects focused mainly on enhancing and optimising operating processes at HHLA's container terminals and throughout the transport chain.
The ongoing research project VESUHV is dedicated to networking seaports and railbound hinterland transportation. It focuses on developing a standardised system which will enable the German seaports and hinterland rail service operators to exchange data (e.g. on container availability) reliably at an early stage. The project's aim is to boost the transport chain's performance by improving reliability at the operational planning stage. Together with its network partners, HHLA subsidiaries from the Container and Intermodal segments developed a concept to implement an improved fl ow of information.
The project dedicated to improving maintenance has now been successfully completed. New research fi ndings helped the team fi nd solutions to optimise the organisation of processes associated with automated handling equipment. Handling technology and cranes were also improved and integrated into everyday terminal processes. The primary focus of the project was placed on developing and establishing an automated system to record wear and tear with a view to avoiding unnecessary maintenance work. Needs-based maintenance – enabled by tools such as fi bre-optic sensors integrated into crane cables – reduces downtime and costs incurred by maintenance and repair work.
The joint project Lean Port Management (LPM) strived to minimise port throughput times in order to make more effi cient use of existing resources and improve capacity utilisation during the container import process. The less time containers spend at the port, the more effi ciently existing resources can be used. Key challenges included designing and integrating new customs requirements into the workfl ow with the assistance of the relevant customs authorities, as well as creating an intelligent, centralised information platform covering the entire import process from the ship's arrival at the port to despatching the goods to customers in the hinterland.
Furthermore, the Container ID and Business Integration Truck (BIT) projects were successfully completed in the 2012 fi nancial year. Container ID was aimed at establishing a system which automatically records and identifi es containers in the handling process and is integrated into the information chain. The BIT project involved the terminal and port-wide standardisation of workfl ows, information fl ows and interfaces, incorporating not just terminals but also container depots, packing companies, customs and clients. By acting on project fi ndings, the company was able to stabilise and improve processes along the entire transport chain, improve its handling quality and performance, and reduce handling
times. It is possible to ramp up these systems and make more widespread use of the technologies in question, both of which may enhance productivity even further.
In order to document its performance, the HHLA Container Terminal Altenwerder (CTA) once again received certifi cation in accordance with the Container Terminal Quality Indicator (CTQI) in the reporting year. The standard, which was developed by the Global Institute of Logistics and Germanischer Lloyd, checks criteria such as the safety, performance level and effi ciency of a terminal on both the water and land sides, as well as its links to pre- and onward-carriage systems. With its successful certifi cation, CTA proved once again that it is one of the most productive container terminals in the world.
At HHLA, researching and developing ecofriendly drive systems is a key aspect of our efforts for sustainable technological innovations. Together with Gottwald Port Technology and several research bodies, HHLA continues to pursue its Zero Emissions pilot project launched in the previous year – which involves operating driverless, battery-powered container vehicles – at the HHLA Container Terminal Altenwerder (CTA). Known as automated guided vehicles (AGV), they transport containers between the ocean-going vessel and the block storage yard at the terminal 24 hours a day using fully automated navigation technology. The use of battery-powered AGVs has since reached the next step towards large-scale production, and is due to be further improved in the coming years. For instance, batteries for heavy goods vehicles are to be charged at exactly those times when there is a surplus of renewable power in the grid.
In cooperation with a Czech carriage manufacturer, the HHLA rail subsidiary Metrans has developed a new type of carrying wagon which has been optimised for intermodal container transport and can be used universally for Continental (intra-European) consignments. The standardised, 80-foot-long carriages provide consistent train capacities and weigh up to 30 % less than the carriages previously used by state railways. This means that a 720-metre-long block train
used in Germany weighs around 180 tonnes less unladen. Furthermore, all carriages are fi tted with special, noise-reducing braking systems. Aside from the environmental benefi ts, the newly built carrying wagons offer major space-saving advantages due to their compact design. Around 20 % more containers can be transported per train in comparison with conventional carriages. Now it is possible to transport as many as 108 standard containers back to back instead of 88 on trains with a maximum length of 720 metres and 26 carriages. On journeys to Eastern Europe using trains with a standard length of 610 metres, 92 standard containers can be transported on 23 carriages. The new container carriages also offer additional security. All of the carriages are fi tted with anti-theft protection to prevent the containers from being opened. Metrans now has its own fl eet of more than 1,300 carriages optimised for length and payload. The newly built, lightweight wagons account for around a quarter of the total fl eet of carriages. Maintenance work is carried out in the company's own repair facility, ensuring a high degree of availability.
HHLA's actions have always been guided by economic considerations and a sense of responsibility towards its employees, the environment and society as a whole. Due to high levels of capital intensity and long useful lives, those who build and operate handling facilities, hinterland networks and logistics centres are compelled to take a wider view and gear their business operations towards long-term success spanning several economic cycles. Ever since it was established, the Group has therefore attached the utmost importance to sustainable business practices.
HHLA's business model aims to provide an ecologically sound link between global goods fl ows at port terminals on the one hand and hinterland networks and logistics centres on the other. Ecological transport chains are therefore the focus of HHLA's sustainability strategy. The company provides highly effi cient handling facilities, high-performance transport systems and comprehensive logistics services to put such transport chains in place. By extending its facilities and networks, HHLA is paving the
way for a disproportionately high increase in the percentage of hinterland transport accounted for by rail. The central interfaces in the international fl ow of goods are operated in an environmentally friendly manner which also conserves land and resources. They are constantly developed with an eye on the future.
For four years now, HHLA has had a Sustainability Council headed by the Chairman of the Executive Board. Its members meet regularly with HHLA's stakeholder groups – especially customers, staff, investors, suppliers and the general public – to discuss key sustainability issues of relevance to HHLA. Since the council was established, the Group has also had a specialist team dedicated to sustainability which reports directly to the Chairman of the Executive Board.
HHLA's sustainability strategy is based on three pillars: the environment, society and the economy. Ten fi elds of activity and guidelines have been defi ned and implemented within each of these areas. This puts HHLA in a position to take a leading role in the area of sustainability.
The fi elds of activity focus on environmentally friendly transport chains, climate protection and
effi cient land use. As early as 2008, HHLA also began to regularly publish its carbon footprint as part of the international Carbon Disclosure Project (CDP). The CDP is a non-profi t initiative which now manages one of the world's largest databases of corporate greenhouse gas emissions on behalf of institutional investors and makes this information widely available. HHLA calculates its CO2 emissions on the basis on the Greenhouse Gas Protocol, a global standard for recording greenhouse gas emissions.
The measures implemented to minimise the impact of transport on the environment are rounded out by environmental and resource conservation measures. HHLA strives to conserve resources at its terminals, e.g. by using a total of 61,300 tonnes of recycled building materials to extend and maintain its terminal space during 2012. Of this 61,300 tonnes, the largest share was a mixture of concrete and minerals – 42,000 tonnes to be exact – which came from concrete waste and now serves as a loose sub-base. Furthermore, optimising the storage positions of containers minimises the distance travelled by transport equipment, thereby reducing energy consumption. Using retreaded tyres for straddle carriers also helps to protect the environment.
| Fields of activity | Guidelines | |
|---|---|---|
| Environment | Ecological transport chains | Actively networking with other logistics operators and creating sustainable, environmentally friendly transport chains |
| Space conservation | Increase the effi cient use of port and logistics areas | |
| Nature conservation | Minimise the impact on nature and actively protect natural habitats |
|
| Climate protection | Utilise technically and economically viable means of reducing CO2 emissions |
|
| Society | Occupational safety/ health protection |
Ensure safety, provide appropriate working conditions and promote health-conscious behaviour |
| Staff development | Offer vocational and ongoing specialist training and tailored staff development programmes |
|
| Social responsibility | Step up dialogue with society; information and discussions regarding port logistics |
|
| Economy | Added value | Make an ongoing and signifi cant contribution to value added and consequently raise prosperity at all locations |
| Business partners | Offer tailor-made customer solutions and reliable cooperation with suppliers |
|
| Shareholders | Safeguard a long-term increase in company value and transparency for investors |
Direct CO2 Emissions
in thousand tonnes
¹ Including Metrans traction current as of 2012
CO2 Emissions by equipment type, 2012
The CO2 emissions are based on measured and calculated data as well as estimates.
| Diesel in millions of litres |
Heating oil in millions of litres |
Petrol in millions of litres |
Natural gas in millions of m3 |
Electricity in millions of kWh |
District heating in millions of kWh |
|
|---|---|---|---|---|---|---|
| 2010 | 21.3 | 0.1 | 0.1 | 2.4 | 135 2 | 5.6 |
| 2011 | 26.0 | 0.1 | 0.1 | 2.0 | 145 3 | 5.2 |
| 2012 | 26.5 | 0.1 | 0.1 | 2.11 | 1574, 5 | 4.61 |
Consumption of natural gas and district heating in 2012 is based on measured and estimated fi gures.
2 Of which 65 million kWh from renewable energies
Of which 72 million kWh from renewable energies
4 Of which 70.2 million kWh from renewable energies 5 From 2012 including traction current for the use of electric locomotives in Germany, the Czech Republic and Slovakia
HHLA's commitment to sustainability is binding, transparent, measurable and comparable. In the reporting year, it became the fi rst maritime company to issue a declaration of compliance with the German Sustainability Code (GSC). By publishing this declaration, HHLA has made a fi rm commitment to its sustainable business model. The GSC describes environmental, social and corporate governance aspects based on 20 different criteria, each with up to two performance indicators, in which issues such as the usage of resources, compliance, equal opportunities and health protection for employees play an important role. Clear sustainability targets are also requested. In addition, HHLA applied the GRI (Global Reporting Initiative) guidelines on sustainability reporting – the most commonly used standard of its kind in the world – for the fi rst time in this annual report. In doing so, HHLA also enables comparison at an international level.
Within the HHLA Group, air pollution is largely restricted to absolute CO2 emissions, which are primarily infl uenced by handling and transportation volumes and the use of electricity from renewable sources. HHLA's carbon footprint meets the requirements of the most widely used standard for reporting greenhouse gases, the Greenhouse Gas Protocol. In line with the Greenhouse Gas Protocol, electricity from renewable sources was classifi ed as carbon-neutral. The power needed by a terminal depends largely on the number of seaborne containers it handles and the number of containers transported onwards by land. HHLA uses seaborne and overland throughput as an effective indicator to determine specifi c CO2 emissions in line with the recommendations of the European Economics Environment Group (EEEG). HHLA's climate protection target was set in 2011: by 2020, the Group intends to
reduce CO2 emissions by a minimum of 30 % for each container it handles. 2008 fi gures serve as the basis here. In the period from 2008 to 2012, the company already succeeded in reducing CO2 emissions by 24.5 % per container handled and transported.
Absolute CO2 emissions rose year-on-year by 11,038 tonnes or 11.0 % to 111,479 tonnes in the reporting period. 9,813 tonnes of this stem from the fi rst-time inclusion of traction current used by electric locomotives in Germany, the Czech Republic and Slovakia. The increasing use by Metrans of its own diesel-electric locomotives has led to CO2 emissions totalling around 4,700 tonnes being included in the company's carbon footprint. A long-term increase in the percentage of electricity used within the Group's energy mix will enable the company to utilise more renewable energies and thereby substantially reduce its carbon footprint. To achieve this goal, HHLA is converting more and more of its equipment and machinery at the terminals to electricity. Such equipment and machinery produces fewer emissions and less noise and is also easier to service. HHLA has been making greater use of power from renewable sources since 2009. As of this date, the electricity required by all offi ce buildings and workshops in Hamburg occupied by HHLA has come from renewable energies. The Container Terminal Altenwerder (CTA) has been making exclusive use of green electricity since 2010. This reduced HHLA's CO2 emissions by 22,255 tonnes in the reporting year (previous year: 22,800 tonnes). Compared to the previous year, specifi c CO2 emissions at three of HHLA's four container terminals fell by between 0.1 % and 11.7 %, while one terminal recorded an increase of 2.8 %. Overall, this meant that specifi c CO2 emissions fell by 4.7 %. In addition to power from renewable energies, HHLA continued with
a number of emission-reduction projects at the Group's various affi liates to improve its carbon footprint. For example, a total of seven new lowconsumption, low-emission straddle carriers went into service in 2012. These vehicles use as much as 25 % less diesel per operating hour than earlier models and have replaced older carriers in some cases. The Dual Cycle initiative at the Container Terminal Altenwerder (CTA) is expected to reduce diesel consumption by several hundred thousand litres by slashing the number of empty trips. The Dual Cycle process makes it possible to discharge and load a ship simultaneously, minimising the container gantry crane's empty runs and thereby reducing the specifi c power consumption and the number of empty trips by automated guided vehicles (AGV).
The Twin Operations project was launched at the Container Terminal Tollerort (CTT) in the reporting year. Straddle carriers are now able to transport two 20-foot containers simultaneously instead of carrying just one 20-foot or 40-foot container per trip. This is thanks to a process change and an increase in the spreaders' functionality. In this way, the number of trips required to load and discharge a ship have been reduced further, thereby saving diesel.
Following the successful testing of electric-only crew vehicles at the terminals in 2011, 24 electrically powered terminal vehicles have been in use at the Container Terminal Tollerort (CTT), which is located close to the city, since 2012. These vehicles are powered by renewable electricity and are therefore a quiet, low-maintenance and emission-free solution for local transportation. This means that more than 60 % of the cars and vans used at the terminal are equipped with environmentally friendly electric motors. Around 80 tonnes of CO2 are saved every year.
With the introduction of additional storage blocks at the HHLA Container Terminal Burchardkai (CTB), energy-saving LED technology was used for the fi rst time to provide lighting for reefer platforms. Other pilot projects to use LED technology were also launched.
As well as choosing highly energy-effi cient machinery and equipment, HHLA is actively stepping up its use of renewable energy. In summer 2011, photovoltaic arrays were installed on the roofs of the logistics centre in Altenwerder and
the Container Terminal Tollerort (CTT). Set up and operated by the energy supplier Hamburg Energie Solar, the systems produced 554,750 kWh of zero- carbon electricity in 2012, their fi rst full year of operation.
Water is mostly used in the HHLA Group to clean large-scale equipment and containers and for employee hygiene. Compared to the previous year, the amount of water consumed by operations in Germany, Ukraine and Poland increased by 4,239 m3 or 4.8 % to 92,416 m3 in 2012. HHLA's facilities in Hamburg draw water from the public supply network.
HHLA separates rubbish for recycling wherever possible so that reusable waste can be fed back into the resource cycle. Excluding soil and building rubble, the amount of waste produced at the sites in Germany fell in 2012 by 12.7 % compared with the previous year, taking it to 9,376 tonnes. Waste classifi ed as hazardous also decreased further in the same period by 7 % to 3,245 tonnes. This is equivalent to a share of 34.6 %. Of the total waste volume, 2,201 tonnes or 23.5 % was made up of overripe bananas and other foodstuffs unsuitable for processing or consumption. More than 30 % of this food waste was recycled to generate biogas. In this way, some 150,000 kWh of zero-carbon electricity was produced in the reporting year. 2,258 tonnes or 24 % of the annual waste total was attributable to sludge from oil/water separators collected at the washing, fuelling and parking spaces for straddle carriers and AGVs. This mixture of sludge, oil and water undergoes treatment at a chemical water treatment plant operated by a specialist waste disposal company. Once it has been separated from the oil, the water passes through a biological wastewater treatment plant.
Commercial waste accounted for 11.1 % of total waste, while scrap metal made up 10.0 % and 7.5 % was paper-based waste. Waste wood and structural timber made up 6.8 % of the total. Other waste accounted for the remaining 17.1 %.
Well-trained and motivated employees are the foundation for all of the company's activities. In combination with exemplary occupational safety standards, they guarantee the company's high level of quality. Relations with staff are dominated by the Group's sense of responsibility for its em-
at HHLA's sites in Germany, Poland, the Czech Republic, Slovakia and Ukraine in m3
¹ 2010 and 2011 excluding Poland, the Czech Republic and Slovakia
Commercial Waste by type
Over 30 % was recycled to generate biogas.
ployees. The foundation for a successful working relationship is a close, responsible and active involvement of staff representatives in the Group.
Compliance with legal requirements and internal company guidelines is a key part of HHLA's corporate governance policy. HHLA's compliance system centres on a code of conduct which formulates overriding principles on topics of relevance for compliance, such as conduct in the competitive environment, the prevention of corruption and confl icts of interest, and how to deal with sensitive corporate information. See also Compliance, page 55 et seq.
Our sustainability guidelines place a clear emphasis on occupational health and safety. The company therefore strives to continually improve health and safety standards in the workplace. There are numerous preventive measures and guidelines in place to ensure that staff from both HHLA and external companies, customers, suppliers and visitors do not come to any bodily harm. For the second year in succession, the Hamburg Offi ce for Occupational Safety presented the Container Terminal Tollerort (CTT) with an award for the exemplary systems in place at its facilities in the year under review. Measures introduced in previous years include making the heavy good vehicle handling area much safer by separating internal and external traffi c, improving access to straddle carriers, and developing highly ergonomic and functional cabs for the new straddle carriers and container gantry cranes in conjunction with staff members. Protecting and promoting good health is important as it has a great bearing on staff performance levels. The company's health promotion programmes are geared towards specifi c needs at the sites. At the Container Terminal Altenwerder (CTA), for example, an exercise room was introduced during the reporting year.
Approximately one in eight jobs in Hamburg is connected with cargo handling at the Port of Hamburg. This means that the port and the industries linked to it are major employers in the greater Hamburg metropolitan region. HHLA processes around 78 % of Hamburg's container throughput (in TEU), or 53.6 % of the total throughput in tonnes. The company therefore sees itself as an integral part of economic developments in the greater Hamburg metropolitan area. It is well aware of its responsibility towards society both here and at all its other sites.
The company's dialogue with society focuses on raising awareness of port and logistics-related issues. Its most important education project is the Aqua-Agenten initiative launched by the Michael Otto Foundation. This project was singled out in November 2012 as a "Landmark in the Land of Ideas" as part of a nationwide initiative. It takes a fun approach to teaching schoolchildren aged about eight or nine why water is important for people, nature and businesses. Pupils learn about the signifi cance of shipping and ports for world trade at HHLA's container terminals. In the reporting year, around 250 schoolchildren visited HHLA facilities as part of this education project. Since the project was launched in 2009, another 5,775 children have been taught about the importance of water and ports at school.
Net added value fell by € 9.0 million to € 551.0 million in 2012, primarily as a result of expenses. In contrast, the added value ratio was slightly above the previous year's level at 46.8 %, as a company with low added value was sold and deconsolidated in the course of realigning the Intermodal segment. Net added value serves as an indicator of business activities' economic value creation. It is calculated by taking the value of production and deducting all intermediate inputs, depreciation and amortisation. Added value is shared between employees, lenders, the state (taxes) and shareholders. The largest proportion, 70.7 % or € 389.3 million, went to employees. Shareholders accounted for the second-largest share of € 111.8 million (20.3 %), followed by the public authorities with € 41.6 million (7.5 %) and payments to lenders amounting to € 8.3 million (1.5 %).
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Employees | 389.3 | 374.3 | 4.0 % |
| Shareholders | 111.8 | 118.8 | - 5.8 % |
| Public authorities | 41.6 | 56.1 | - 25.8 % |
| Lenders | 8.3 | 10.8 | - 23.1 % |
| Total | 551.0 | 560.0 | - 1.6% |
Production value € 1,179 million = 100 %
amortisation
Application of Added Value Added value
€ 551 million = 100 %
71 % Employees
The pace of global economic growth slowed considerably in 2012 in a year-on-year comparison. While global gross domestic product increased by 3.2 % in 2012 according to the International Monetary Fund (IMF), growth had reached 3.9 % in 2011. The negative effects of the euro crisis and slower growth in emerging markets led to a general rise in economic uncertainty. This once again weighed heavily on global trade, which had already seen its growth rate cut in half to just 5.9 % in 2011. In 2012, the volume of world trade grew by just 2.8 %, thereby falling short of the increase in global gross domestic product for the fi rst time in years.
The economic cool-off affected every economic region. Although the emerging markets strengthened their role as the engine of the global economy, their growth slowed from 6.3 % (2011) to 5.1 % as a result of weaker demand abroad and a host of structural problems. However, they continued to drive global economic growth – especially in the case of the People's Republic of China. China's GDP grew only modestly to begin with in 2012, before picking up pace in the fourth quarter and recording growth of 7.8 % for the year as a whole.
| in % | 2012 | 2011 |
|---|---|---|
| World | 3.2 | 3.9 |
| Industrialised countries | 1.3 | 1.6 |
| USA | 2.3 | 1.8 |
| Emerging markets | 5.1 | 6.3 |
| China | 7.8 | 9.3 |
| Russia | 3.6 | 4.3 |
| Central and Eastern Europe | 1.8 | 5.3 |
| EU 27 | - 0.2 | 1.6 |
| Eurozone | - 0.4 | 1.4 |
| Germany | 0.9 | 3.1 |
| World trade | 2.8 | 5.9 |
Source: IMF
Growth in the industrialised countries was much weaker, with GDP increasing only slightly by 1.3 % last year. The US economy was able to escape this trend and grow by 2.3 %. In contrast, Europe's economy edged into recession. The 27 countries of the European Union (EU 27) saw their economic output decline by 0.2 %, while the eurozone countries shrank by 0.4 %.
Within this general trend, the economic performance of countries in the currency union varied considerably. While economic productivity in some crisis-stricken Southern European countries decreased signifi cantly, most economies of the remaining eurozone countries recorded slight growth. Germany's economic output grew by 0.9 %, driven in no small part by its growth in exports (+ 4.0 %). This contrasted starkly with the economic performance of heavily indebted countries, which were adversely affected by drastic consolidation measures. At the same time, the economies of Central and Eastern Europe became increasingly embroiled in the crisis within the eurozone. Although production continued to rise, the pace of economic growth slowed dramatically to 1.8 % in the reporting year compared with 5.3 % in 2011.
Following the collapse seen during 2008/2009, container traffi c made a swift recovery starting in 2010. However, the pace of growth has gradually slowed over the past two years. According to data currently available, the increase in global container throughput of 5.0 % reported in the fi rst quarter slowed to 3.2 % in the third quarter of 2012. The boost usually provided by seasonal demand failed to materialise. On this basis, the market research institute Drewry believes that global container traffi c grew by a total of 3.9 % in 2012 as a whole.
With the arrival of new ships – especially new container mega-ships – the international container fl eet's carrying capacity increased by 6 % to a total of 16.3 million standard containers (TEU) last year, considerably outstripping the growth in seaborne cargo volumes. In order to limit the oversupply of capacity, an increasing number of ships were laid up and services suspended. By the end of 2012, the percentage of global container fl eet capacity which was idle had risen to 5 %. Efforts by the shipping companies to counter the persistently unsatisfactory economic situation in the container liner shipping sector by
by vessel size categories in TEU million
World fleet: 16.3 million TEU (4,961 ships)
Order book: 3.4 Mio. TEU (487 ships)
Source: Hafen Hamburg Marketing e.V.
raising freight rates met with only limited success. The development of freight rates was highly volatile over the course of the year.
The economic downturn was also felt in the development of container throughput at the large Northern European ports of Rotterdam, Hamburg, Antwerp, Bremen/Bremerhaven and Zeebrugge in 2012. Container traffi c fell by 0.5 % year-on-year to a total of 37.6 million TEU. The new container port JadeWeserPort in Wilhelmshaven, which entered service in September 2012, did not have a statistically relevant share in 2012.
At the port of Hamburg, the gloomier economic outlook was refl ected above all by a decline in traffi c to China of more than 12 %. In contrast, trade increased considerably with the USA (+ 28 %), Russia (+ 13 %), Poland (+ 11 %) and India (+ 7 %). The clear rise in exports of 4.4 % coupled with a simultaneous fall in imports of 3.6 % led to an even more balanced import/export container traffi c mix at the port of Hamburg. The trend towards ever-larger ships continued in 2012, despite the delay in dredging the river Elbe. There was an 18 % increase year-on-year in the number of vessels calling at the port which fell into the largest category of container ships (carrying capacity > 10,000 TEU), taking the number to 349.
In Germany, the goods traffi c market cooled noticeably on the back of the euro crisis in 2012, declining for the fi rst time after two successive years of growth. According to preliminary data from the German Federal Statistical Offi ce, transport volumes fell by 2.2 % to 4.3 billion tonnes. At the same time, transport fi gures declined by 1.8 % to 638 billion tonne-kilometres. Road freight traffi c recorded the greatest losses with a fall in tonnage of 2.7 % to 3.3 billion tonnes. Following a record year in 2011, the falling demand for transport was noticeable in rail traffi c too. Goods with a total weight of 365 million tonnes were transported on the German rail network in 2012. Compared with the previous year, this represented a decline in volume of 2.7 %. Transport fi gures fell by 3.1 % to 110 billion tonne-kilometres.
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Revenue | 1,128.5 | 1,217.3 | - 7.3 % |
| Pro forma revenue1 | 1,103.6 | 1,119.2 | - 1.4 % |
| EBITDA | 307.5 | 333.4 | - 7.8 % |
| EBITDA margin in % | 27.2 | 27.4 | - 0.2 pp |
| Pro forma EBITDA1 | 288.2 | 337.2 | - 14.5 % |
| EBIT | 186.3 | 207.0 | - 10.0 % |
| EBIT margin in % | 16.5 | 17.0 | - 0.5 pp |
| Pro forma EBIT 1 | 166.8 | 212.7 | - 21.6 % |
| Profi t after tax and minority interest | 72.4 | 89.3 | - 18.9 % |
| ROCE in % | 13.7 | 15.4 | - 1.7 pp |
The pro forma presentation applies the new ownership structure in place in the Intermodal segment since the second quarter of 2012 to the entire reporting period and to the comparable period of 2011.
Overall View. In the opinion of the management team, HHLA held its ground in a challenging market environment in 2012. With its return on capital employed (ROCE), the Group once again succeeded in earning a premium on its capital costs and thereby creating additional value. While the market along the Northern European coast largely stagnated, it was still possible to achieve a slight increase in container throughput compared with the previous year – despite a signifi cant economic cool-down and protracted delays to public infrastructure projects. Based
| Forecast 30.03.2012 |
Forecast 15.05.2012 |
Forecast 14.08.2012 |
Forecast 13.11.2012 |
Actual 31.12.2012 |
|
|---|---|---|---|---|---|
| Revenue | Increase in the region of 5 % |
In the region of € 1.1 billion |
In the region of € 1.1 billion |
In the region of € 1.1 billion |
€ 1,128.5 million |
| EBIT | Margin compar able to the previ ous year (17.0 %) |
At least € 200 million |
In the region of € 170 to € 190 million |
In the region of € 170 to € 190 million |
€ 186.3 million, 16.5 % margin |
on this strenghtened market position, earnings were primarily shaped by the realignment of the Intermodal segment, including the deconsolidation of a loss making rail operator, and extensive measures to boost performance in the Container segment.
Far-reaching structural changes resulted from the reorganisation of HHLA's largest container terminal, enabling it to handle container megaships more effi ciently, and the realignment of the ownership structure in the Intermodal segment in order to tailor rail-bound transport services to the hinterland. The effects of these key strategic measures and their initial expenditure meant that the business forecast had to be revised during the second quarter. The weak macroeconomic environment was increasingly refl ected in volume data during the second half of the year and consequently the forecast had to be adjusted again. At the end of year, earnings were in the upper part of the downgraded earnings range.
As a result of the weak economic environment, HHLA made use of the fl exibility of its investment programme and gradually reduced its capital expenditure to a much lower level than originally planned so as to retain comfortable liquidity reserves.
Notes on the Reporting. Due to the high level of fl exibility required in the sector, handling and transport services are generally not ordered or arranged months in advance. Consequently, an order backlog and order trends do not serve as reporting indicators as they do in other industries.
Since the second quarter of 2012, HHLA's consolidated fi nancial statements have included the effects of realigning the shareholdings of HHLA, Deutsche Bahn and PKP Cargo in the rail operating companies of the Intermodal segment. See also Notes to the Consolidated Financial Statements, page 149.
The realignment led to the deconsolidation of TFG Transfracht (previously consolidated pro rata at 50.0 %) and to the full consolidation of the Polzug Group (previously consolidated pro rata at 33.3 %). The acquisition of the remaining shares in the Polzug Group from a minority shareholder in the fourth quarter did not affect the operating earnings of the HHLA Group. See Notes to the Consolidated Financial Statements, page 149. There were no changes to the preceding full consolidation of the Metrans Group. However, the increased shareholding in Polzug and Metrans meant that a greater share of nez results went to the parent company's shareholders. In order to separate the operating performance of continuing operations from the effects of consolidation and transactions, additional pro forma fi gures are stated for transport volumes, revenue, EBITDA and EBIT, which assume that the continued activities were carried out on the same basis in the previous year and in the reporting period. The pro forma fi gures are only used in the Management Report.
At the beginning of the year, the consolidation method used until 2011 for two fully consolidated fruit companies in the Logistics segment was switched to consolidation using the equity method. This change is based on the contractually agreed transfer of control to the other shareholder. This reduced revenue by around € 14 million in the reporting period. The slight pro rata loss attributable to HHLA for the two companies was therefore disclosed net in the fi nancial result. The fi gures for the previous year have not been restated. See also Notes to the Consolidated Financial Statements, page 149.
In August 2012, UNIKAI Hafenbetrieb GmbH was retroactively merged with HHLA Container Terminals GmbH as of 1 January 2012. This has not resulted in any effect on the Group's revenue and earnings performance. See also the Notes to the Consolidated Financial Statements, page 161.
Currency effects likewise had no material impact on the earnings position of the Group. The 2012 consolidated fi nancial statements were prepared in accordance with the International Financial Reporting Standards (IFRS) applicable in the Euro pean Union, taking the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) into consideration.
Revenue and Earnings. As expected, the economic cooling prevented HHLA from matching its dynamic performance of 2010 and 2011 in 2012 as a whole, despite a robust development in volumes. Throughput in the Container segment was held stable throughout the year with an increase of 1.4 % to 7.2 million TEU (previous year: 7.1 million TEU). Traffi c fi gures to the hinterland were signifi cantly affected by the deconsolidation of a rail operator. 1.2 million TEU were transported (previous year: 1.9 million TEU). Based on pro forma fi gures, however, it was possible to match the previous year's volume of 992 TEU with 993 TEU (+ 0.1 %).
The HHLA Group posted revenue of € 1,128.5 million, which fell 7.3 % short of the previous year's level (€ 1,217.3 million) as a result of the aforementioned deconsolidation. There was a decline in pro forma revenue of 1.4 % to € 1,103.6 million (previous year: € 1,119.2 million). Adjusted for revenue from the deconsolidated fruit companies, the Group achieved revenue almost on previous year's level – despite its inability to push through rate increases and historically low average container dwell times. With its Container, Intermodal and Logistics segments, the listed Port Logistics
subgroup generated revenue of € 1,101.2 million, representing a year-on-year decline of 7.5 % (previous year: € 1,190.6 million). The subgroup's pro forma revenue fell by 1.5 % to € 1,076.3 million (previous year: € 1,092.6 million) almost in line with the Group as a whole. The non-listed Real Estate subgroup improved revenue by 2.3 %, taking it to € 32.4 million (previous year: € 31.7 million). The Real Estate subgroup's share of total external revenue increased to 2.6 % (previous year: 2.4 %), largely as a result of changes in the scope of consolidation of the Port Logistics subgroup.
Changes in inventories at Group level were slightly higher at € 1.7 million (previous year: € 0.6 million), as was own work capitalised at € 9.0 million (previous year: € 7.2 million). Including oneoff gains from the realignment of Intermodal activities in the amount of € 17.6 million, other operating income reached a total of € 48.3 million (previous year: € 43.7 million including compensation received for the early termination of a lease amounting to € 15 million). Without taking these two one-off gains into account, revenue still increased slightly year-on-year.
Expenses. In the 2012 fi nancial year, operating expenses fell by 5.7 % to € 1,001.3 million (previous year: € 1,061.8 million) due to changes in the Group's structure. This translated into a pro forma increase of 2.1 %, which was just above the increase in performance data.
Compared to the previous year, the cost of materials decreased by 15.4 % to € 366.3 million
| in € million | Change | ||
|---|---|---|---|
| Revenue | 1,128.5 | - 7.3 % | I Decline due to changes in consolidation I Disposal and switch to equity method for affi liates I Without one-time effects: stable development |
| Cost of materials | 366.3 | - 15.4 % | I Signifi cant decline due to changes in consolidation I Mainly variable expense item I Without one-time effects: slight volume related increase |
| Personnel expenses |
373.7 | 4.0 % | I Collective wage increase with almost unchanged headcount I Comparatively low consolidation effects I Extra work input needed due to reorganisation |
| Other operating expenses |
140.0 | - 2.0 % | I Largely unchanged lease expenses I Considerably lower external maintenance expenses I Higher consultancy fees for development projects |
| Depreciation and amortisation |
121.2 | - 4.1 % | I Absence of previous year's impairments I Increase due to modernisation investments I Virtually unchanged maintanance investments |
Incidental rental expenses charged on to tenants are no longer shown as revenue but as other operating income. The revenue posted for 2008 to 2009 was not restated.
(previous year: € 432.9 million). The ratio of expenses to revenue dropped by 3.1 percentage points to 32.5 % (previous year: 35.6 %). A pro forma increase of 2.1 % represented a largely proportionate growth in total expenditure. The trend was largely determined by purchased rail services in intermodal traffi c (primarily the use of locomotives and tracks) as well as the cost of procuring fuel, energy and spare parts.
Personnel expenses rose by 4.0 % to € 373.7 million (previous year: € 359.5 million). The ratio of expenses to revenue increased correspondingly to 33.1 % (previous year: 29.5 %). In addition to collective wage increases, this was largely due to the extra work entailed in switching to new working practices at HHLA's largest container terminal in Hamburg as part of restructuring. In contrast, the number of permanent employees remained virtually unchanged.
Other operating expenses declined by 2.0 % to € 140.0 million (previous year: € 142.9 million) in the reporting period. While consultancy fees for development projects in Eastern Europe increased, external maintenance expenses were lower than in the previous year, in which postponed maintenance work was carried out and weather-related surface damage was repaired. As a result of the changed cost structures brought on by the realignment of Intermodal activities, the ratio of expenses to revenue rose slightly to 12.4 % (previous year: 11.7 %).
Compared to the previous year, depreciation and amortisation fell by 4.1 % to € 121.2 million (previous year: € 126.4 million). The ratio of depreciation and amortisation to revenue was 10.7 % (previous year: 10.4 %). Despite increased depreciation caused by investment, there was a year-on-year decline in total depreciation and amortisation due to impairment costs of € 6.7 million recorded in the previous year.
Earnings. Against the background of these developments, the operating result before depreciation and amortisation (EBITDA) fell by 7.8 % to € 307.5 million (previous year: € 333.4 million). The EBITDA margin decreased slightly by 0.2 percentage points to 27.2 % (previous year: 27.4 %). Pro forma EBITDA declined by 14.5 % to € 288.2 million (previous year: € 337.2 million) without the one-off gain from realigning the Intermodal business.
After depreciation and amortisation, the operating result (EBIT) fell by 10.0 % to € 186.3 million (previous year: € 207.0 million). The EBIT margin stood at 16.5 % in the reporting year (previous year: 17.0 %). The downward trend in the operating result was also attributable to the Port Logistics subgroup, which recorded a fall in EBIT of 11.1 % to € 173.1 million (previous year: € 194.8 million) and therefore generated 92.9 % (previous year: 94.1 %) of the Group's operating result in the reporting year. EBIT of the Real Estate subgroup increased by 7.7 % to € 12.8 million (previous year: € 11.9 million) and contributed 7.1 % (previous year: 5.9 %) towards the consolidated operating result. In pro forma terms, the operating result declined by 21.6 % to € 166.8 million (previous year: € 212.7 million). However, the previous year's result contained a non-adjusted one-off gain, meaning that the drop in the actual operating result was 15.6 %.
The fi nancial result includes marginally improved interest income of € 9.9 million (previous year: € 9.6 million) despite lower average liquidity and lower interest rates. This was primarily due to the revaluation of an equalisation liability payable to a minority shareholder in conjunction with a profi t and loss transfer agreement for a subsidiary. In contrast, interest expenses fell to € 39.3 million, compared with € 42.3 million in the previous year, largely as a result of reduced non-current fi nancial liabilities. The fi nancial result also included impairments to the value of investments in fruit logistics in the amount of € 3.5 million. At 27.1 %, the effective tax rate was lower in the reporting period than in the previous year (32.1 %). This was due to above-average earnings contributions made by affi liated companies with lower tax rates. Furthermore, the one-off gain from the realignment of the Intermodal segment was not fully taxable.
Consolidated profi t after tax and minority interests was down on the previous year, falling 18.9 % to € 72.4 million (previous year: € 89.3 million). After one minority shareholder was only entitled to a lower profi t share in 2011 due to a change in service structures, his profi t share returned to the higher level seen in earlier years in the reporting period. Furthermore, the parent company's shareholders were encumbered by the aforementioned reorganisation of a container terminal wholly owned by HHLA, but also profited from the one-off gain from the realignment
EBITDA in € million
EBIT in € million
of business activities in the Intermodal segment. Earnings per share declined correspondingly by 18.7 % to € 1.00 (previous year: € 1.23). The listed Port Logistics subgroup posted a 20.8 % decline in earnings per share to € 0.95 (previous year: € 1.20). Earnings per share for the non-listed Real Estate subgroup were above the previous year's level at € 2.17 (previous year: € 1.95). As in the previous year, there was no difference between basic and diluted earnings per share in 2012.
Appropriation of Profi ts. As in the previous year, HHLA's appropriation of profi ts is oriented towards both the development of results in the fi nancial year ended and the continuation of a consistent profi t distribution policy. The individual fi nancial statements of the HHLA Group's parent company, which are relevant for dividend distribution, show a net profi t of € 64.3 million, according to the German Commercial Code
(HGB), for the 2012 fi nancial year. Of this sum, € 60.0 million is accounted for by the A division (Port Logistics subgroup) and € 4.3 million by the S division (Real Estate subgroup). On this basis, the Executive Board and Supervisory Board of HHLA will propose at the Annual General Meeting on 13 June 2013 that a dividend of € 0.65 per Class A share and € 1.20 per Class S share be distributed. Based on the number of shares outstanding as at 31 December 2012, the sum distributed for listed Class A shares would remain unchanged compared with the previous year at € 45.5 million while the amount for nonlisted Class S shares would increase by 20.0 % to € 3.2 million. In relation to the consolidated profi t and the earnings per share, the dividend payout ratio would increase substantially to 68.4 % for the Port Logistics subgroup and rise slightly to 55.3 % for the Real Estate subgroup.
| Key Figures | |||
|---|---|---|---|
| in € million | 2012 | 2011 | Change |
| Revenue | 697.5 | 712.9 | - 2.2 % |
| EBITDA | 234.9 | 282.7 | - 16.9 % |
| EBITDA margin in % | 33.7 | 39.7 | - 6.0 pp |
| EBIT | 146.2 | 195.5 | - 25.2 % |
| EBIT margin in % | 21.0 | 27.4 | - 6.4 pp |
| Container throughput in thousand TEU | 7,183 | 7,087 | 1.4 % |
in TEU million
In the 2012 fi nancial year, the HHLA container terminals in Hamburg and Odessa increased throughput volumes by 1.4 % to 7,183 thousand standard containers (TEU). Of this total 6,854 thousand TEU (previous year: 6,769 thousand TEU) were handled in Hamburg and 329 thousand TEU (previous year: 318 thousand TEU) in Odessa. In view of the stagnating traffi c trend at competing ports in Europe, HHLA's terminals in Hamburg were able to consolidate their market position. This is all the more remarkable as Hamburg was also affected by the further delay in dredging the river Elbe. In October 2012, the Federal Administrative Court in Leipzig upheld a suit against the immediate completion of the work. The court's pending verdict in the main proceedings will determine how the infrastructure project is to continue.
Volumes at the HHLA terminals in Hamburg were primarily affected by an 8.3 % decline in Far Eastern traffi c as a result of the economic slowdown. Nevertheless, this remained by far the most important shipping region for HHLA's throughput in Hamburg, accounting for 2,967 thousand TEU and a share of 43.3 % – albeit down from its 47.8 % share in 2011. This decline was mainly compensated for by strong growth in:
These fi gures show that HHLA has been able to achieve considerable growth in the highly competitive market of European feeder traffi c. The proportion of feeder traffi c rose correspondingly from 24.7 % to 26.7 %.
Revenue was not quite able to match this positive volume trend. Segment revenue decreased by 2.2 % in 2012 to € 697.5 million (previous year: € 712.9 million). The primary reasons for this were:
The decrease in segment EBIT of 25.2 % to € 146.2 million (previous year: € 195.5 million) includes a one-off gain from the previous year, when a compensation payment of € 15 million was received for the return of space previously used by an empty container centre. Adjusted for this item, revenue declined by 19.0 % in comparison with 2011. EBIT was also burdened by:
The HHLA container terminals improved their performance in the 2012 fi nancial year by implementing a host of measures. The main aim was to speed up the handling of mega-ships – a key competitive factor given the ever-increasing size of new vessels. In addition to a range of process enhancements at every HHLA container terminal, the focus was on expanding the Container Termin al Burchardkai (CTB) and the Container Terminal Odessa (CTO), which accounted for around 80 % of the segment's capital expenditure. Due to the scalability of its expansion projects, it was possible to reduce the segment's level of investment by around 30 % compared with the original plan as the economic prospects grew increasingly gloomy during the year.
| Key Figures | |||
|---|---|---|---|
| in € million | 2012 | 2011 | Change |
| Revenue | 299.7 | 357.6 | - 16.2 % |
| Pro forma revenue 1 | 274.8 | 259.6 | 5.9 % |
| EBITDA | 59.5 | 43.1 | 38.0 % |
| EBITDA margin in % | 19.8 | 12.1 | 7.7 pp |
| Pro forma EBITDA 1 | 40.8 | 46.2 | - 11.7 % |
| EBIT | 41.3 | 24.6 | 68.0 % |
| EBIT margin in % | 13.8 | 6.9 | 6.9 pp |
| Pro forma EBIT 1 | 22.4 | 29.7 | - 24.6 % |
| Container transport 2 in thousand TEU |
1,213 | 1,887 | - 35.7 % |
| Pro forma container transport 1 in thousand TEU |
993.0 | 992.0 | 0.1 % |
The pro forma presentation applies the new ownership structure in place in the Intermodal segment since the second quarter of 2012 to
the entire reporting period and to the comparable period of 2011.
Transport volume was fully consolidated.
HHLA realigned its Intermodal segment in 2012. The realignment focused on unbundling the shareholdings of HHLA and Deutsche Bahn in the Intermodal companies Metrans, Polzug and
TFG Transfracht, as well as HHLA's acquisition of shares in the Polzug Group from PKP Cargo. Following these transactions, HHLA now owns 100 % of the shares in Polzug and 86.5 % of the
shares in Metrans. HHLA's former 50 % stake in TFG Transfracht was taken over by Deutsche Bahn.
With this new structure in place, HHLA is now in a position to align all the companies in the segment systematically with the requirements of maritime logistics. This conforms to HHLA's business model of integrating the production processes along the transport and logistics chain from the seaport through to customers in the European hinterland. In the process, HHLA is increasingly using its own production resources, such as modern inland terminals, specialised container carriages and locomotives, as well as its own equipment for container transport by road.
The companies now managed solely by HHLA were able to maintain container traffi c at the previous year's level in a challenging market environment. At 993 thousand TEU, transport volumes were virtually unchanged year-on-year (2011: 992 thousand TEU pro forma). To maintain this level, the companies had to offset falling volumes on established hinterland routes caused by the economic slowdown by generating new business via new and successful connections. These primarily include services to Austria and Germany operated by Metrans, as well as shuttle connections between the Polzug hub in Poznan and the Polish seaports of Gdansk and Gdynia.
In order to separate income derived from ongoing operations from the consolidation and transaction effects of the reorganisation, pro forma fi gures are also stated for transport volumes, revenue, EBITDA and EBIT in the key fi gures table above. They apply the new ownership structure which has been in place in the Intermodal segment since the second quarter of 2012 to the entire 2012 fi nancial year and to the previous year. This shows that the decline in transport volumes by 35.7 % year-on-year was largely due to the volumes of TFG Transfracht no longer consolidated as of the second quarter of 2012.
A similar trend was seen in revenue. Although segment revenue fell as a result of the restructuring by 16.2 % to € 299.7 million (previous year: € 357.6 million), pro forma revenue increased by 5.9 % to € 274.8 million due to improved earnings quality and the setting up of new connections.
The strong rise of 68.0 % in EBIT to € 41.3 million (previous year: € 24.6 million) stems principally from the deconsolidation of losses at TFG Transfracht and a non-recurring accounting gain resulting from the realignment. See also Notes to the Consolidated Financial Statements, page 149. However, the 24.6 % drop in pro forma EBIT to € 22.4 million was largely due to Polzug's fully consolidated loss, and does not refl ect the earnings improvement caused by the disposal of the unprofi table Transfracht business. The realignment of Polzug's activities has paved the way for a turnaround. An initial positive trend with rising volumes established itself in the second half of 2012, laying the foundations for further growth in volumes at the Poznan hub in 2013.
Metrans expanded its terminal network and transport services in Austria and Germany in particular during the reporting year. The company now connects Munich, Nuremberg and Leipzig to the German seaports with direct trains. In early October 2012, the company acquired the company which operates the container terminal in Krems, a port on the river Danube in Austria. This move has improved transport services in maritime container logistics for the economic region of Lower Austria. Furthermore, a modern new hub terminal was built in the conveniently located Czech town of Ceska Trebova (Eastern Bohemia) during the year. This has also been serving Krems since 2013. Metrans has also added considerably to its own fl eet of wagons and increased its stock of owned and leased locomotives.
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Revenue | 91.9 | 126.7 - 27.4 % | |
| EBITDA | 8.1 | 12.0 - 32.3 % | |
| EBITDA margin in % | 8.8 | 9.5 | - 0.7 pp |
| EBIT | 4.4 | - 1.0 | – |
| EBIT margin in % | 4.8 | - 0.8 | – |
Companies in the Logistics segment make a key contribution to strengthening Hamburg's position as an all-purpose port with their activities in the areas of vehicle logistics, bulk cargo, project and contract logistics, fruit logistics, cruises and consultancy. In addition, they complement and add to the range of services offered by HHLA's Container and Intermodal segments, for ex ample by providing container packing or the global marketing of terminal expertise.
The 2012 fi nancial year presented highly divergent conditions for the respective business areas. At segment level, earnings netted out to an operating result (EBIT) of € 4.4 million (previous year: € - 1.0 million). When comparing with the previous year, however, it must be noted that there was an impairment charge of € 5.8 million relating to fruit logistics in the fourth quarter of 2011.
A comparison of earnings and revenue from 2012 and 2011 is also hindered by changes in the consolidation of the fruit logistics companies. As of 1 January 2012, they are now carried according to the equity method and thus stated net in the fi nancial result of the HHLA Group instead of at segment level. In addition, revenue for the 2011 fi nancial year includes intra-Group invoicing of a large IT contract amounting to around € 10 million. These two effects also explain the fall in revenue of 27.4 % to € 91.9 million (previous year: € 126.7 million). Adjusted segment revenue would have amounted to approximately € 91 million in 2011.
A summary of the performance of individual business divisions is given below:
Vehicle logistics at the multi-function terminal O'Swaldkai performed extremely well. Based on strong volume growth in tonnage handled – including container packing – of 22.9 % to 1,684 thousand tonnes (previous year: 1,370 thousand tonnes) and an increase in vehicle throughput of 10.6 % to 208 thousand vehicles (previous year: 188 thousand), both revenue and earnings improved substantially.
Bulk cargo logistics for ore and coal fell short of the previous year's revenue and earnings. The primary reason for this was the temporary shutdown of two coal-fi red power plants as a result of maintanance work in 2012, which led to a negative development of 14.2 % in coal handling. Ore hand ling was up 6.4 % on the previous year's level. Overall, seaborne handling declined slightly by 2.4 % to 13.6 million tonnes (previous year: 13.9 million tonnes). This represents 10.4 % of the total amount of seaborne freight handled at the port of Hamburg.
Revenue and earnings in project and contract logistics were lower than in the previous year, which was partly due to one-off gains from restructuring.
Cruise logistics benefi ted from the ongoing boom in cruise tourism in Hamburg with an increase in the volume of passengers processed. The number of ships calling at the port rose by more than a third (to 156), as did the number of passengers (to 429 thousand).
The HHLA companies which provide consultancy services in the port and transport sector around the world continued to improve their earnings in the reporting year and were able to expand their business successfully with a host of new contracts. These include advising the Greek government on its plans to privatise ports, as well as projects to improve rail links from North American container terminals to the hinterland.
in the Logistics segment
| 2012 | 2011 | |
|---|---|---|
| General cargo in thousand tonnes |
1,684 | 1,370 |
| Vehicles in thousands | 208 | 188 |
| Bulk cargo handling in million tonnes |
13.6 | 13.9 |
| Cruise ship calls | 156 | 116 |
| in € million | 2012 | 2011 | Change |
|---|---|---|---|
| Revenue | 32.4 | 31.7 | 2.3 % |
| EBITDA | 17.1 | 16.2 | 5.6 % |
| EBITDA margin in % | 52.7 | 51.1 | 1.6 pp |
| EBIT | 12.8 | 11.9 | 7.7 % |
| EBIT margin in % | 39.6 | 37.6 | 2.0 pp |
According to the latest market overview by Jones Lang LaSalle, the market for offi ce space in Hamburg saw a disproportionate fall in new lets compared with other locations in Germany in the 2012 fi nancial year. New leases were signed for 435,500 m2 , a decline of 19.4 %. Despite a high volume of new building – 208,800 m2 (previous year: 187,400 m2 ) – the vacancy rate fell slightly from 8.5 % in 2011 to 8.2 % at the end of 2012. Demand for space in the premium segment remained high. At the same time, average rent fell slightly.
Against this market background, the Real Estate subgroup continued to pursue its long-term growth strategy which focuses on enhancing the value of property in the historical warehouse district (Speicherstadt) and around the Fischmarkt area on the northern banks of the river Elbe. As a result, revenue rose by 2.3 % to € 32.4 million (previous year: € 31.7 million). Bolstered by high occupancy rates in both areas, the segment's operating result (EBIT) climbed by 7.7 % to € 12.8 million (previous year: € 11.9 million). This trend was given an extra boost by the successful placement of new projects back in the course of 2011. This included the letting of the fully refurbished Block Q, which offers an attractive mixture of showrooms and offi ces, as well as the tea emporium "Wasserschloss Speicherstadt" which opened at the end of 2011.
Development opportunities in the Speicherstadt historical warehouse district improved further last year because the city of Hamburg released it from the constraints imposed by the Port Development Act on 12 September 2012. In terms of planning regulations, the Speicherstadt historical warehouse district is now part of Hamburg city centre. Until now, the careful redevelopment of the former logistics centre as a lively, inner-city district was only possible by means of special exemptions in individual cases, as the Port Development Act defi ned a port-related use of the site as the standard. The new legal basis expands the scope of possible projects. One example is the landmark building on Sandtorkai, designed by architect Werner Kallmorgen, which is currently being converted to create the Speicherstadt's fi rst hotel.
Financial management at the HHLA Group is managed centrally and serves the overriding objective of ensuring the Group's long-term fi nancial stability and fl exibility. Group clearing pools the Group's fi nancial resources, optimises net interest income and substantially reduces dependency on external sources of funding. Derivative fi nancial instruments are used to reduce interest rate risks and, to a minor extent, to reduce currency and commodity price risks. They do not have a material impact on HHLA's consolidated fi nancial statements.
HHLA is in a stable fi nancial position at the time of preparing the 2012 annual fi nancial statements. HHLA continues to have a sound balance sheet structure and a low gearing ratio by industry standards. This is refl ected in its equity ratio of 36.1 % (previous year: 40.9 %) before fi nancial settlements to minority shareholders. As a result of a profi t and loss transfer contract concluded within the Container segment during the 2010 fi nancial year, there is a payment commitment which is classifi ed as debt in accordance with IAS 32 (Financial Instruments). To compensate for the contractually agreed profi t and loss pooling, an annual payment must be made to a minority shareholder for a remaining period of three years. This payment is based primarily on future fi nancial results. The total anticipated fi nancial settlement led to a balance-sheet reclassifi cation from minority interests to other fi nancial liabilities. Taking this balance sheet representation into account, the regular equity ratio now comes to 31.8 %.
As a result of the company's liquidity base as of the balance sheet date, it has no signifi cant refi nancing requirements.
Infl ation and exchange rates have no material effect on the HHLA Group's fi nancial position.
When recognising assets and liabilities, estimates were based on past experience and other relevant factors and made on a going concern basis. See also Accounting and Valuation Principles, page 153, and Signifi cant Assumptions and Estimates, page 159, in the Notes to the Consolidated Financial Statements.
HHLA's core business is dominated by a large proportion of property, plant and equipment with long useful life spans. For this reason, HHLA mainly uses medium and long-term loans and fi nance leases to achieve funding with matching maturities.
At € 319.8 million, its liabilities from bank loans were below their previous year's level (€ 331.6 million) in fi nancial year 2012. The Group drew on additional external fi nancing totalling € 28.6 million (previous year: € 65.7 million) in the reporting year. New fi nancing was offset by lower loan repayments. This was countered by separations due to the change in consolidation method used in fruit logistics. The maturity profi le for the coming years includes bullet loans due in 2013 and 2015 from investment projects which have now been completed. These are due to be repaid as scheduled using the cash infl ows generated and the available liquidity. Due to the maturities agreed and the stable liquidity base, the company has no other signifi cant refi nancing requirements.
The majority of the liabilities from loans are denominated predominant in euros. In terms of conditions, approx. 70 % have fi xed interest rates and some 30 % have fl oating interest rates. As a result of borrowing, certain affi liates have covenants linked to key balance sheet fi gures, which mostly require a minimum equity ratio to be met. Covenants were in place for around 17 %
by year in € million
Investments by segments, 2012
Of which finance leases totalling €36.6 million (2012), €32.8 million (2011), €66.1 million (2010)
of the bank loans. The covenants were met at all agreed audit points throughout the reporting year. As of the balance sheet date, HHLA posted non-current liabilities to related parties totalling € 114.1 million (previous year: € 93.6 million). These resulted from the recognition of the leasing liability to the Hamburg Port Authority (HPA) in connection with the mega-ship berths at the HHLA Container Terminal Burchardkai (CTB) and the HHLA Container Terminal Tollerort (CTT). With the exception of operating leases, there are no signifi cant off-balance-sheet fi nancial instruments. See also Notes to the Consolidated Financial Statements, page 189 et seq. These operating leases relate primarily to long-term agreements between the HHLA Group and either the Free and Hanseatic City of Hamburg or the Hamburg Port Authority for leasing land and quay walls in the Port of Hamburg and the Speicherstadt historical warehouse district. The HHLA Group forms provisions primarily for pensions; these are therefore available for long-term fi nancing.
Cash and cash equivalents, the bulk of which is held centrally by the holding company, totalled € 230.1 million (previous year: € 330.0 million) as of the reporting date. These funds are invested at German fi nancial institutions with verifi ed high credit ratings as demand deposits, call money and short-term deposits. Current credit lines play a subordinate role due to HHLA having suffi cient liquid funds. As a result, HHLA scaled back its existing credit lines substantially in the reporting period. As of the balance sheet date, the Group thus had unused credit facilities amounting to some € 1.0 million (previous year: € 27.0 million). The credit line utilisation rate was 88.6 % in the period under review (previous year: 17.1 %). In HHLA's view, the Group's solid balance sheet structure would again enable more substantial credit facilities to be arranged at any time if its medium-term liquidity planning were to reveal a need. Of the total cash and cash equivalents, € 15.1 million (previous year: € 30.3 million) was subject to restrictions in Ukraine relating to the transfer of currency abroad.
As HHLA has a wide range of borrowing options at its disposal outside of the capital market, the Group currently sees no need for an external rating. Instead, it provides existing and potential creditors with comprehensive information to ensure that they can derive appropriate internal credit ratings.
Public subsidies awarded for individual development projects which are subject to specifi c conditions are of minor importance in terms of their volume at Group level.
In view of the economic prospects, HHLA has reduced the investment volume originally planned for the 2012 fi nancial year from up to € 280 million to around € 200 million. The postponed investments relate mainly to capacity increases for container throughput, affecting a programme to modernise the Port of Hamburg's largest handling terminal and a large-scale project to expand handling operations in Odessa. Capital expenditure in the past fi nancial year totalled € 196.5 million (previous year: € 128.7 million). This fi gure includes additions of € 30.5 million from fi nance leases for a mega-ship berth not recognised as a direct cash expense. The focus of capital expenditure in 2012 continued to be on upgrading the handling facilities in Hamburg. Investment projects were largely funded by the operating cash fl ow generated in the fi nancial year.
Property, plant and equipment accounted for € 176.3 million (previous year: € 117.2 million) of capital expenditure, while intangible assets accounted for € 10.0 million (previous year: € 7.4 million) and investment property for € 10.2 million (previous year: € 4.1 million).
As in the previous year, expansion investments accounted for the bulk of capital expenditure. They were primarily invested in extending and modernising the container terminals in Hamburg. Replacement investments were primarily for the procurement of ground-handling vehicles.
Financial funds at beginning of the period Cash flow from operating activities Cash flow from investment activities Cash flow from financing activities Changes due to exchange rates Financial funds at end of the period in € million 294.8 210.5 - 160.9 - 155.9 0.3 188.9
A large number of investments also went towards protecting the environment. For instance, straddle carriers were equipped with new energy-saving tyres and investments were made in electric vehicles to transport people at the terminal. Furthermore, environmentally friendly and recycled building materials were used to extend and maintain terminal space.
The largest share of the Group's aggregate investment was accounted for by the Container segment with € 132.4 million (previous year: € 87.8 million). The company primarily invested in purchasing handling equipment, increasing storage capacities at the handling facilities in Hamburg and extending the HHLA Container Terminal Odessa (CTO) in Ukraine.
Total investment in the Intermodal segment amounted to € 46.9 million, up on its previous year's level of € 32.2 million. The Metrans Group in particular made further investments in hinterland terminals and the procurement of locomotives and container carriages.
Total investments in the Logistics segment came to € 3.3 million (previous year: € 3.9 million). Investments in multifunctional devices for handling dry bulk and purchases of ground-handling vehicles accounted for the largest share.
Total capital expenditure in the Real Estate subgroup amounted to € 10.3 million (previous year: € 4.4 million). Major projects to modernise buildings in the Speicherstadt historical warehouse district accounted for the majority of this amount.
In principle, the main focus of investment will remain on improving the productivity of existing terminal areas by using state-of-the-art handling technology. At the same time, HHLA will continue to promote its expansion of effi cient hinterland connections as well as the extension and optimisation of its logistics activities in line with market requirements.
As of year-end, there were fi nancial liabilities for outstanding purchase commitments totalling € 108.4 million (previous year: € 93.0 million). This fi gure includes € 91.8 million (previous year: € 81.4 million) for the capitalisation of property, plant and equipment.
| in € million | 2012 | 2011 |
|---|---|---|
| Financial funds as of 01.01. |
294.8 | 213.7 |
| Cash fl ow from operating activities |
210.5 | 266.1 |
| Cash fl ow from investing activities |
- 160.9 | - 138.0 |
| Free cash fl ow | 49.6 | 128.1 |
| Cash fl ow from fi nancing activities |
- 155.9 | - 45.9 |
| Change in fi nancial funds | - 106.3 | 82.2 |
| Change in fi nancial funds due to exchange rates |
0.3 | - 1.1 |
| Financial funds as of 31.12. |
188.9 | 294.8 |
Cash fl ow from operating activities declined yearon-year from € 266.1 million to € 210.5 million. This was due in part to lower earnings before interest and taxes (EBIT), the non-cash impact on earnings of separating the Intermodal activities, as well as higher tax payments stemming from the previous year's result and the subsequent higher advance tax payments for the reporting year. On the other hand, more revenue was converted into cash fl ow. In the same period last year, trade receivables went up sharply but were not refl ected in cash balances.
10 11 12
as of 31.12. in € million/in %
Cash fl ow from investing activities (outfl ow) totalled € 160.9 million and was therefore higher than the previous year's € 138.0 million. This was mainly attributable to payments made for investments in property, plant and equipment, investment property and intangible assets amounting to € 153.4 million (previous year: € 132.2 million). Similarly, the € 20.0 million increase in short-term deposits led to higher cash outfl ow for investing activities (previous year: increase in short-term deposits of € 10.0 million). This was offset by effects from the realignment of the Intermodal segment, which primarily arose from the sale of interests in consolidated companies.
Free cash fl ow – the total cash fl ow from operating and investing activities – decreased to € 49.6 million from its previous year's level of € 128.1 million.
Cash fl ow from fi nancing activities (cash outfl ow) amounted to € 155.9 million in the reporting period (previous year: € 45.9 million) and was impacted particularly by payments for acquiring interests in consolidated companies totalling € 91.0 million (previous year: € 0.0 million) and the fact that in the previous year cash infl ow amounting to € 65.7 million (2012 fi nancial year: € 28.6 million) was received from an investment loan. The total dividend of € 66.3 million paid to shareholders in the reporting period was down on the previous year (€ 78.2 million).
With regard to its overall fi nancial position, the HHLA Group has suffi cient liquidity as of yearend 2012. There were no liquidity bottlenecks in the course of the fi nancial year. Financial funds are made up of cash and cash equivalents (€ 230.1 million) less short-term deposits at banks (€ 50.0 million) plus receivables from current assets at HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH (€ 8.8 million). The fi gure amounted to € 188.9 million as of 31 December 2012 and was therefore considerably lower than at the beginning of the year (€ 294.8 million).
HHLA realigned its ownership structure in the Intermodal segment in the 2012 fi nancial year. Additional shares in two already consolidated companies were purchased and shares in another company were sold. See also Notes to the Consolidated Financial Statements, page 149.
With the realignment of the Intermodal segment, HHLA pursued the objective of aligning all the companies in this segment systematically with the requirements of maritime logistics chains. See also Intermodal Segment, page 99 et seq.
Compared with the previous year, the HHLA Group's balance sheet total decreased as of 31 December 2012 by a total of € 43.0 million to € 1,768.5 million.
in € million 683
On the assets side, non-current assets increased by € 44.5 million. This rise was largely attributable to the € 20.6 million increase in deferred tax assets and the € 17.0 million growth in property, plant and equipment as a result of opening a new berth at the HHLA Container Terminal Burchardkai (CTB).
Current assets fell by € 87.6 million to € 443.9 million (previous year: € 531.5 million), due mainly to the decline in trade receivables of € 23.7 million following the deconsolidation of the rail operator TFG Transfracht as part of the realignment of the Intermodal segment. Cash and cash equivalents fell by € 99.9 million, due in part to dividend payments made in the second quarter of 2012 and the acquisition of additional shares in Metrans. There was an opposing trend in receivables from related parties, which rose by € 21.2 million to € 24.9 million. Furthermore, non-current assets held for sale drove up current assets by € 12.4 million as a result of the sale of property owned by a HHLA subsidiary in the coming fi nancial year.
On the liabilities side, equity decreased by € 82.7 million to € 562.0 million (previous year: € 644.7 million) compared with year-end 2011. The sharp decline, despite the positive profi t after taxes posted for the reporting period, is due to the acquisition of further shares in Metrans and its subsequent recognition using the entity concept, the dividend payment made in the second quarter (€ 51.9 million) and the reduction of actuarial gains by € 71.9 million attributable to the lower interest rate used to calculate pension provisions and taken directly to equity. Overall, the equity ratio decreased to 31.8 % (previous year: 35.6 %).
Non-current liabilities climbed by € 2.4 million to € 880.0 million (previous year: € 877.6 million) as of the balance sheet date. Pension provisions rose by € 70.5 million after the interest rate was adjusted to 3.25 % (31 December 2011: 5.0 %) and liabilities to related parties mainly went up by € 20.5 million following the leasing of a new
berth from the Hamburg Port Authority (HPA) in conjunction with a fi nance lease. This was offset by a decline of € 89.2 million in non-current fi nancial liabilities following consolidation changes in the Intermodal and Logistics segments and reclassifi cation as current liabilities.
Current liabilities climbed by € 37.3 million to € 326.6 million (previous year: € 289.3 million). This rise resulted in particular from an increase in current fi nancial liabilities of € 50.0 million to € 138.3 million (previous year: € 88.3 million) caused by reclassifi cations from non-current liabilities. This contrasted with various other developments, including a € 6.2 million fall in trade liabilities to € 65.9 million.
The gearing ratio – i.e. the ratio of net fi nancial liabilities and pension provisions to Group equity – was 1.3 (previous year: 0.9) as of the balance sheet date of 31 December 2012. The increase resulted mainly from a decrease in cash and cash equivalents as well as a fall in equity.
The subscribed capital of the company is now € 72,753,334.00. It is divided into 72,753,334 nopar-value shares, including 70,048,834 Class A shares and 2,704,500 Class S shares (classes of shares). The Class S shares constitute only shareholdings in the net profi t/loss and net assets of the S division, and the Class A shares constitute only shareholdings in the net profi t/ loss and net assets of the remainder of the company (A division). That part of the company which deals with the acquisition, holding, selling, letting, management and development of properties not specifi c to port handling (Real Estate subgroup) is known as the S division. All other parts of the company (Port Logistics subgroup) are known as the A division. The dividend entitlement of holders of Class S shares is based on the proportion of the distributable profi t for the year attributable to the S division, and the dividend entitlement of holders of Class A shares is based on the remaining proportion of distributable profi t for the year (articles of association, Section 4 [1]). Each share entitles the holder to one vote at the Annual General Meeting (articles of association, Section 20 [1]) and gives the holder the rights and responsibilities laid down in the German Stock Corporation Act (AktG). If the statutory provisions require a special resolution to be adopted by holders of a given class of shares, only the holders of that class of shares shall be entitled to vote.
To the Executive Board's knowledge there are no restrictions on voting rights or the transfer of shares, including those arising from agreements between shareholders.
For details on direct or indirect capital shareholdings which entitle the holder to more than 10 % of the voting rights, aee also the Notes to the Consolidated Financial Statements, Note 3, page 148, and Note 35, page 174.
There are no shares with special rights granting powers of control.
Employees who hold stakes in the company's equity exercise their shareholders' rights at their own discretion. There is no control of the voting rights of those employees who hold shares.
Members of the Executive Board are appointed and dismissed in accordance with Sections 84 and 85 of the German Stock Corporation Act (AktG) in conjunction with Section 31 of the German Co-Determination Act (MitbestG) and Article 8 of the articles of association. These stipulate that the Supervisory Board is responsible for appointing and dismissing members of the Executive Board. In accordance with Section 31 of the German Co-Determination Act (MitbestG), it reaches its decisions by a two-thirds majority of its members. If this majority is not reached, the Arbitration Committee has one month as from the Supervisory Board's vote to make a proposal for the appointment. Other proposals may also be made to the Supervisory Board in addition to the proposal by the Arbitration Committee. A simple majority is suffi cient for voting on the proposals made to the Supervisory Board. In the event of a vote being tied, the Chairman of the Supervisory Board has two votes in a second round of voting in accordance with Section 31 (4) of the German Co-Determination Act (MitbestG). Amendments to the articles of association can be made by means of a resolution of the Annual General Meeting. Any such amendment becomes effective when it is recorded in the commercial register. In line with Sections 179 and 133 of the German Stock Corporation Act (AktG) and Article 22 of the articles of association, a simple majority of the votes cast at the Annual General Meeting is suffi cient for amendments to the articles of association. If a capital majority is required in addition to a majority of the votes, a simple majority of the nominal capital represented when the resolution is passed is adequate. Exceptions to this rule are amendments to the articles of association for which the law requires a larger majority. In accordance with Article 11 (4) of the articles of association, the Supervisory Board is authorised to carry out amendments to the articles of association which relate only to the wording. If an amendment to the articles of association is designed to change the relationship between Class A and Class S shares, in the event of a capital increase or steps taken in accordance with the German Reorganisation of Companies Act (UmwG), special resolutions by the Class A and Class S shareholders affected are required as per Section 138 of the German Stock Corporation Act (AktG).
7.1 Subject to the approval of the Supervisory Board, the Executive Board is authorised under Article 3 (4) of the articles of association to increase the company's nominal capital until 13 June 2017 by up to € 35,024,417.00, by issuing up to 35,024,417 new registered Class A shares for subscription in cash and/or kind in one or more stages (Authorised Capital I). The statutory subscription right of the holders of Class S shares shall be excluded. The new shares may also be purchased by one or more banks chosen by the Executive Board together with the obligation to offer them for sale to Class A shareholders (indirect subscription right). The Executive Board was further authorised – with the approval of the Supervisory Board – to exclude the statutory subscription rights of holders of Class A shares,
7.1.1 as necessary for equalising fractional amounts or;
7.1.2 if the Class A shares are issued in return for a contribution in kind, especially in connection with the acquisition of companies, parts of companies or equity stakes in companies, as part of company mergers and/or for the purpose of acquiring other assets, including rights and receivables; subscription rights may only be excluded on Class A shares accounting for up to 20 % of the nominal capital attributable to Class A shares in conjunction with this authorisation (i.e. up to the amount of € 14,009,766.00);
7.1.3 if the company's Class A shares are issued in return for cash and the issue price per share is not signifi cantly lower than the price of similar Class A shares in the company already listed on the stock exchange at the time of the share issue. However, subscription rights can only be excluded in this case if the number of shares thus issued together with the number of treasury shares sold during the term of this authorisation for which subscription rights were excluded as per Section 186 (3) sentence 4 AktG and the number of Class A shares which can be created by exercising warrants and/or conversion rights or fulfi lling conversion obligations arising from warrants, convertible bonds and/or participation rights issued during the term of this authorisation for which subscription rights were excluded as per Section 186 (3) sentence 4 AktG does not exceed a total of 10 % of the company's nominal capital at the time this authorisation comes into effect or – if the total is lower – at the time the authorisation is exercised;
7.1.4 if the Class A shares are offered to persons employed by the company or one of its associates as defi ned in Section 15 AktG or are transferred to them;
7.1.5 to the extent necessary to grant the bearers of warrants, convertible bonds and/or conversion obligations those subscription rights to new Class A shares to which they would be entitled as shareholders after exercising the warrant or conversion right or fulfi lling their conversion obligation.
7.2 Subject to the approval of the Supervisory Board, the Executive Board is additionally authorised under Article 3 (5) of the articles of association to increase the company's nominal capital until 13 June 2017 by up to € 1,352,250.00 by issuing up to 1,352,250 new registered Class S shares by subscription in cash and/or kind in one or more stages (Authorised Capital II). The statutory subscription right of the holders of Class A shares shall be excluded. The Executive Board was further authorised, with the approval of the Supervisory Board, to exclude the statutory subscription rights of holders of Class S shares as is necessary to equalise fractional amounts.
7.3 The company's nominal capital is increased contingently as per Article 3 (6) of the articles of association by up to € 6,900,000.00, by issuing up to 6,900,000 new registered Class A shares. The contingent capital increase is only to be carried out to the extent that
a) the holders and/or creditors of bonds with warrants and/or convertible bonds make use of the option and/or conversion rights granted to them up to 15 June 2013 by the issue of bonds with warrants and/or convertible bonds by the company or by companies in which the company holds a majority stake, or
b) the holders and/or creditors of convertible bonds issued by the company or its affi liates up to 15 June 2013 fulfi l their conversion obligations. The new Class A shares are entitled to profi ts from the beginning of the fi nancial year in which they arise by the exercise of conversion or option rights or by the fulfi lment of conversion obligations. Notwithstanding the foregoing, the Executive Board can, subject to the approval of the Supervisory Board, determine that the new Class A shares are entitled to profi ts from the beginning of the fi nancial year for which the Annual General Meeting has not yet adopted a resolution on the appropriation of distributable profi t at the time the conversion or option rights are exercised or the conversion obligations are fulfi lled.
7.4.1 The Annual General Meeting held on 16 June 2011 authorised the company until 15 June 2016 to acquire Class A shares in the company amounting to up to 10 % of the current nominal capital attributable to Class A shares. Together with other Class A shares held by the company or attributable to it under Section 71a et seq. of the German Stock Corporation Act (AktG), the Class A shares acquired may not at any time constitute more than 10 % of the company's nominal capital accounted for by Class A shares. This authorisation may not be used for the purpose of trading in treasury shares. The authorisation may be exercised in whole or in part, in one or more stages, for one or more purposes, by the company or its affi liates or for its or their account by third parties. At the discretion of the Executive Board, the purchase can be made via the stock exchange or by means of a public purchase offer made to all Class A shareholders or by means of a public request for a purchase offer.
(1) If the Class A shares are acquired via the stock exchange, the amount paid by the company per Class A share (excluding incidental purchasing costs) may not be more than 5 % above or below the average market price of the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the Frankfurt Stock Exchange on the last fi ve trading days before purchase.
(2) If the purchase is made by means of a public offer to all Class A shareholders or a public request for a purchase offer, this is permissible if the price or the threshold of the price range offered per Class A share (excluding incidental purchasing costs) is not more than 10 % above or below the average market price for the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the Frankfurt Stock Exchange on the last fi ve trading days before publication of the decision to make the purchase offer or the public request for a purchase offer. If the defi ning stock price is signifi cantly different after a publication of a purchase offer or a public request for a purchase order, the offer or the request to submit such an offer can be amended. Any amendment made in these cases is made on the basis of the average market price for the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the last fi ve trading days before publication of any amendment. The volume of the offer may be restricted. If the total acceptance of the offer exceeds this volume, the purchase must be pro rata. Preferential purchases of up to 100 Class A shares in the company per shareholder may be admitted subject to the partial exclusion of any possible rights of other shareholders to offer their Class A shares. The purchase offer or the public request for a purchase offer may contain further conditions.
7.4.2 The Executive Board was also authorised, subject to the approval of the Supervisory Board, to use Class A shares purchased under the authorisation to acquire the company's own Class A shares for any legally permissible purpose, including the following:
(1) The Class A shares can be resold by means other than the stock exchange or an offer to all Class A shareholders, provided these Class A shares are resold at a price which is not signifi cantly lower than the price of shares in the company of the same rights at the time of the sale. The defi ning market price for the purposes of this regulation is the average share price of the company's Class A shares in the Xetra fi nal auction (or a similar successor system) on the Frankfurt Stock Exchange over the last fi ve trading days before the sale of the company's own shares. In these cases the number of shares to be sold, together with the new shares issued under Section 186 (3) sentence 4 of the German Stock Corporation Act (AktG) since this authorisation came into effect, excluding subscription rights, must not exceed 10 % of the company's nominal capital in the form of Class A shares at the time this authorisation comes into effect and is exercised.
(2) The Class A shares can be sold as payment in kind to third parties, particularly in the course of mergers with other companies or in order to acquire companies, equity stakes or parts of companies.
(3) The Class A shares can be used to settle rights or obligations held by bearers or creditors under convertible bonds or bonds with warrants issued by the company or by companies in which the company holds a majority stake.
(4) The Class A shares can be transferred or offered for purchase to employees of the company or affi liated companies.
(5) The Class A shares can be redeemed in full or in part without a further resolution by the Annual General Meeting. They can be redeemed in a simplifi ed process in accordance with Section 237 (3–5) of the German Stock Corporation Act (AktG). The authorisation to redeem shares can be made use of multiple times. If the shares are redeemed in a simplifi ed process in accordance with Section 237 (3) (3) of the German Stock Corporation Act (AktG), the Executive Board is authorised to adjust the number of no-par-value shares in the articles of association.
7.4.3 The right of shareholders to subscribe for the company's own shares is excluded if these shares are used in accordance with the aforementioned authorisations in 7.4.2 items 1 to 4.
7.4.4 The authorisations in 7.4.2 items 1 to 5 also cover the use of shares in the company acquired on the basis of Section 71d sentence 5 of the German Stock Corporation Act (AktG).
7.4.5 The authorisations in 7.4.2 can be exercised on a one-off or repeated basis, in whole or in part, and separately or jointly. The authorisations of 7.4.2 items 1 to 4 can also be exercised by independent companies or companies in which the company holds a majority stake or third parties acting for their own account or for the account of the company.
7.5 The Annual General Meeting on 16 June 2010 authorised the Executive Board, subject to the approval of the Supervisory Board, to issue on one or more occasions up to 15 June 2013 bearer or registered bonds with warrants or convertible bonds (hereinafter known collectively as "debenture bonds") and to grant the bearers
or creditors of the debenture bonds warrants or conversion rights for new Class A company shares subject to the detailed terms of the debenture bonds. The total nominal amount of the debenture bonds issued under this authorisation may not exceed € 400,000,000.00. Option and conversion rights may only be issued for Class A company shares accounting for up to € 6,900,000.00 of the company's total nominal capital accounted for by Class A shares. Class S shareholders' subscription rights are excluded. The Executive Board is authorised, subject to the approval of the Supervisory Board, to exclude Class A shareholders' subscription rights to the debenture bonds in full or in part:
I for fractional amounts;
Even if the conversion ratio, exercise price or conversion price are variable, the conversion or exercise price set for one Class A company share (issue price) must be equivalent to either
7.6 Under Article 6 of the articles of association and Section 237 (1) of the German Stock Corporation Act (AktG), the company is authorised to mandatorily redeem Class A or S shares against payment of appropriate compensation if the shareholders whose shares are to be redeemed have given their consent.
The company has no signifi cant agreements dependent on a change of control resulting from a takeover bid.
The contracts of employment with the Executive Board members valid during the reporting period contain clauses which provide for a payment to the respective Executive Board members in the event of them losing their Executive Board seats due to a change of control or similar circumstances. The agreed amount to be paid is the remaining remuneration for the residual terms of their respective contracts of employment, payable to each in one lump sum discounted by 2 % p.a. In calculating this severance pay, the future entitlement to payment of a bonus is calculated based on the average annual net profi t for the preceding three full fi nancial years. If an Executive Board member earns additional income in the period up to the original end of his or her contract or employment, this income is set off against the severance payment up to a certain amount.
The provisions described above correspond to the legal situation and are standard practice at comparable listed companies. Their intention is not to complicate any possible takeovers.
HHLA's risk management system fosters a keen awareness of dealing with corporate risks. It aims to identify risks in good time and take steps to manage or avert them, thereby preventing situations which could jeopardise the continued existence of the HHLA Group. An important element of the system is the promotion of entrepreneurial thinking and independent, responsible action. HHLA defi nes risk in this case as the possibility of any negative deviation from its operational or strategic plans and current forecasts.
In order to enable proactive steps to be taken to deal with the risks and potential rewards inherent in all commercial activity, the risk management system comprises the necessary organisational rules and procedures for identifying risks at an early stage. To this end, HHLA has created a system based on risk policies covering economic and ecological activities and its business operations. Risk management is carried out according to systematic principles and is subject to a continual improvement process.
The main elements of the risk management system were determined in close cooperation between the Executive Board, Internal Audit and Controlling, and establish clear lines of responsibility for the identifi cation, assessment, control, monitoring and reporting of risks. The Executive Board of HHLA bears overall responsibility for the risk management system of the HHLA Group.
Risks are catalogued regularly in the course of the annual planning process. All identifi ed risks are described clearly, classifi ed according to defi ned risk areas and assigned to a risk manager.
Review Report
Risks are categorised by the likelihood of their occurrence and the amount by which such an occurrence would reduce the operating result or cash fl ow before taxes.
When assessing a risk, the level of loss or damage plus the anticipated probability must be stated. A distinction is made here between the gross risk (excluding reduction and management measures) and the net risk (including reduction and management measures). The actual circumstances or a realistic projection are taken into account when assessing risks. In addition to estimates and economic or mathematical/statistical inferences, sensitivities derived from the planning processes can also be used as a basis for assessment.
To ensure that risks of the same kind are portrayed uniformly, staff work together at Group level when assessing identifi ed risks to establish and calculate the likelihood of the risks arising and the associated potential loss or damage.
After identifying and assessing the risk, the company then defi nes control measures aimed at reducing the likelihood of its occurrence and/or the loss or damage. Risks are monitored continuously and any signifi cant changes are reported and documented on a quarterly basis. Additional ad hoc reports are issued whenever signifi cant risks emerge, cease to apply, or change. Risks are reported using standard Group-wide reporting formats in order to ensure a consistent overall picture of current risks.
The most important elements of the risk management system and risk reporting are described in a corporate guideline. The Internal Audit department is responsible for auditing the risk management system. The external auditors also assess the early detection system as part of their audit of the annual fi nancial statements.
HHLA's internal control system is designed to ensure that the (fi nancial) reporting processes used throughout the company are consistent, transparent and reliable. Furthermore, it makes sure they comply with legal standards and the company's own guidelines. It comprises principles, procedures and methods designed to reduce risk and ensure the effectiveness and propriety of HHLA's processes.
The internal control system is regularly monitored and assessed according to documented pro cesses, risks and controls. This process ensures the necessary transparency with regard to its structure and functionality for the purposes of internal and external reporting.
HHLA's internal accounting control and risk management system is based on the criteria laid out in the "Internal Control – Integrated Framework" working paper published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Accounting processes are assessed to determine whether there is a risk posed to the existence, completeness, accuracy, valuation, ownership and reporting of transactions. The company also conducts a risk assessment regarding the possibility of fraud. Concluding unusual or complex transactions can lead to specifi c accounting risks. There is also a latent risk of error when processing non-routine transactions. Employees are by necessity given a certain amount of leeway when recognising and measuring balance sheet items, which can give rise to further risks.
Internal controls are intended to reduce accounting risks and make sure that transactions are documented, recorded, processed and assessed correctly in the balance sheet, as well as being included in the company's fi nancial reporting quickly and correctly. Controls are in place for all accounting processes. Internal controls guarantee that the accounting process is effi cient and avoids – or at the very least detects – the majority of errors.
Accounting processes, risks and controls are documented and described along with the respective lines of responsibility and reporting structures. A risk control matrix is used to document risks and controls. Processes, risks and controls are updated on an ongoing basis.
The Internal Audit department is responsible for monitoring HHLA's internal accounting control and risk management systems. The external auditor also assesses the effectiveness of the accounting-related internal control system, primarily by carrying out spot checks.
The internal accounting control and risk management systems will always have certain limitations, regardless of how carefully they are designed. For this reason, it is impossible to fully guarantee that accounting standards will always be met or that every incorrect statement will always be avoided or identifi ed.
Areas of responsibility related to accounting are clearly structured and assigned by HHLA. The central units of HHLA Holding and the Group companies are responsible for carrying out adequate and orderly accounting processes. The departments involved in the accounting process are provided with appropriate personnel and resources. All employees involved with accounting activities are suitably qualifi ed.
Accounting tasks and functions are clearly defi ned within the Group. There is a clear functional demarcation between accounts payable and accounts receivable as well as the preparation of individual fi nancial statements and the preparation of consolidated fi nancial statements. There is also a clear demarcation between these departments and the respective segment accounting. Separating execution, settlement and authorisation functions and giving these responsibilities to different members of staff reduces the risk of fraud. Multi-stage approval and authorisation thresholds for ordering, payment transactions and accounting are employed across the Group. These include using the double-checking principle. There is a single accounting manual which covers the consistent application and documentation of accounting rules for the entire Group. Other accounting guidelines are also in place. Like the accounting manual, they are reviewed regularly and updated if necessary.
Most bookkeeping procedures are recorded using accounting systems developed by SAP. For the purposes of preparing HHLA's consolidated fi nancial statements, affi liates add more information to their separate fi nancial statements to form standardised report packages, which are then fed into the SAP EC-CS consolidation module for all affi liated companies.
Measures are in place to protect the IT systems from unauthorised access. Access rights are granted in line with each user's role. Only those departments responsible for mapping transactions are given write access. Departments responsible for processing information use read access. Detailed function-related authorisations are defi ned in a set of SAP authorisation guidelines. IT security guidelines also cover access to IT systems in general.
External service providers are used for pension reports, fi scal issues and for other reports and projects if necessary.
The specifi c formal requirements for the consolidation process pertaining to the consolidated fi nancial statements are clearly defi ned. In addition to a defi nition of the consolidated group, there are also detailed rules requiring affi liates to use a standardised and complete report package. There are also specifi c provisions regarding the recording and handling of Group clearing transactions and subsequent balance reconciliations, or the determination of the fair value of shareholdings. As part of consolidation, the Group accounting team analyses the separate fi nancial statements submitted by affi liates and corrects them if necessary. Incorrect information is identifi ed and corrected as necessary using control mechanisms already present in the SAP EC-CS system or using system-based plausibility checks.
Strategic Risks
The continuing growth in ship dimensions also impacts the competitiveness of HHLA and Hamburg as a port location. The expansion of regional transport and hinterland infrastructure is therefore essential.
As the number of new mega-ships rises, it is becoming increasingly important to HHLA that the River Elbe is dredged. On 16 October 2012, the German Federal Administrative Court granted an urgent stay of execution against the plan approval granted by the Waterways and Shipping Directorate North. This means that the plan approval cannot be put into effect until a fi nal ruling is given in the case itself. Construction work is now unlikely to begin in the near future.
For HHLA, the deepening of the navigation channel is a vital prerequisite for maintaining and extending its position as a key hub for international container traffi c in future. Delays in carrying out the work may mean that shipping companies increasingly look to other handling sites with better nautical access when planning their liner services, which over time could mean that developments in freight traffi c might bypass the Port of Hamburg. This trend could be supported by the expansion of handling capacity in the North Range. Faster ship handling and smooth management of high peak loads – with the associated additional expenses – increasingly have to offset the disadvantages caused by the delayed dredging of the river Elbe's navigation channel.
As well as dredging the shipping channel, the regional road and rail infrastructure must be modernised and expanded if the Port of Hamburg wants to remain competitive and optimise its processes for the inbound and outbound fl ows of goods in its hinterland. Projects of this kind with special signifi cance for business at the port include constructing the transversal port motorway (A252), modernising the existing locks, building a fi fth lock in Brunsbüttel and upgrading the Kiel Canal. HHLA is confi dent that the relevant political decision-makers will continue to press for the completion of these infrastructure projects. HHLA is attempting to prevent any further delay by making sure that HHLA's interests are represented on the appropriate committees, as well as by means of lobbying and active public relations activities.
Stable and ongoing economic growth in HHLA's target markets is crucial for the further development of container handling, transport volumes and logistics services. The European sovereign debt crisis and slower growth in emerging markets in 2012 are currently depressing the global economy. Expectations for further global growth and therefore for handling and transport demand are fraught with considerable uncertainty.
Due to the volatile macroeconomic environment, considerable risks remain. One such risk factor is the ongoing sovereign debt crisis, which is jeopardising general economic developments both in Europe and elsewhere. The adverse economic situation has led to increased pressure on the budgets and national banking systems of many countries. The sovereign debt crisis is not only adversely affecting the economies of crisis-hit countries, but also the global economy via the fi nancial markets. The tensions in global fi nancial markets are currently leading to high risk premiums, which not only represent a burden for public borrowing but also for companies in many countries. Necessary consolidation measures and falling investment also threaten to hinder further economic development.
Government intervention by means of monetary policy or the introduction of trade restrictions – such as compensatory tariffs designed to boost a country's own competitiveness – could prompt a wave of protectionist moves, which would hamper world trade.
Prices for commodities such as oil, copper and rare earths may hinder economic developments. If prices do not fall during a phase of contraction, this could also damage the global economy.
Should container throughput, transport volumes or logistics services fail to develop as expected because of persistent economic uncertainty, planned volumes may not be achieved. This may lead to an underutilisation of handling capacity and train systems. Underutilisation generally entails the risk that it might not be possible to compensate fully for negative divergences in earnings in the short term due to the high level of fi xed costs.
Should global economic prospects worsen further, cost pressure will intensify. High overcapacities and further price cuts at rival ports may result, for example, in feeder traffi c shifting to other ports.
It also remains to be seen what effects the introduction of additional handling capacity in Europe will have on the revenue structure. Ports in the North Range are pressing ahead with the creation of additional handling capacities. The supply of container handling capacity will also outstrip demand in the medium term. A surplus of this kind will lead to even greater competition.
Some of the Group companies generate a large percentage of their revenue with a small number of customers. If one of these clients were to switch to a different service provider, it would have a sizeable impact on earnings at the company in question. HHLA works with almost all the major global shipping companies in container traffi c. A wave of consolidation cannot be ruled out in light of the current earnings situation at shipping companies. Mergers and alliances between terminal operators or shipping companies, as well as between terminal operators and shipping companies, may result in a change in the volume and pricing structure currently in place.
The Intermodal companies are exposed to intense competition from competing rail operators as well as from trucks and feeders as carriers. The market entry of new competitors with aggressive pricing policies in Central and Eastern Europe poses the risk that market share will shift to the detriment of HHLA's rail operators.
In the Logistics segment, there is a risk that it may prove impossible to achieve the revenue targets in a challenging market environment.
HHLA is taking specifi c precautionary steps across all segments to reinforce customer loyalty and develop unique selling points. The Group is also making use of the existing fl exibility in cost and capacity management. HHLA's strategy is to adapt its investments in expanding the container terminals as fl exibly as possible to foreseeable demand. Throughput and transport volumes in the affected markets are closely monitored together with the throughput volumes and service structure of each client, so that any negative developments can be recognised at an early stage. The network is also used to anticipate developments of relevance to the competitive situation ahead of time.
A limited number of companies supply port handling equipment and systems. This could lead to bottlenecks in the procurement of replacement parts and changes to purchasing agreements. In response to this, HHLA constantly looks at alternative procurement strategies and diversifi es its purchasing activities where necessary. HHLA also works closely with strategic suppliers in a spirit of partnership. In coordination with HHLA's departments and affi liates, relevant consolidation processes in the markets for handling equipment are also carefully monitored and taken into account when awarding contracts. HHLA also continually tracks its suppliers' credit ratings by means of a monitoring system.
The HHLA companies operating in the Intermodal segment purchase signifi cant traction, carriage and network services from the respective public railway operators. This leads to a certain amount of dependence on one service provider or a small number of suppliers. The Intermodal companies are taking specifi c precautionary steps to develop unique selling points so as to keep customers loyal to the company on a longterm basis. All rail operators are constantly exposed to the risk of the public railway companies charging excessive usage fees. In order to minimise this risk and to enhance production quality, work to enlarge the internal fl eet of locomotives and carriages and expand terminal capacities in line with demand has been intensifi ed. As part of this strategy, services are also purchased from private suppliers. The contracts governing the purchasing of traction services contain fl exible components which permit the company to respond to market fl uctuations and seasonal deviations.
The failure of central technical equipment can restrict the ability of equipment-based companies to provide services. Depending on the length of the downtime, unavailable equipment leads to an increase in the costs involved in providing services. Preventative maintenance, contingency plans, repair services and redundant equipment, such as computing centres and transformer stations, reduce the risk considerably. HHLA's affi liates carry out regular inspections and tests to identify possible faults before they happen. There is also a risk of transport chains being interrupted. HHLA endeavours to adapt capacity to current volumes.
Liquidity risks in fi nancial management are limited by, among other things, HHLA's centralised responsibility for fi nancing its affi liates. Financing of the direct equity holdings where HHLA exercises operational control is safeguarded, controlled and monitored by HHLA by means of a cash pooling arrangement. Liquidity at the other Group equity holdings is ensured by, for example, including them in the Group's clearing system, arranging for their own credit lines or giving them access to those of HHLA.
As a result of borrowing, certain affi liates have covenants linked to key balance sheet fi gures. Violating these covenants would authorise the lender to demand additional collateral, a change in conditions or the repayment of the loan. In order to prevent such steps, HHLA constantly monitors compliance with the covenants and, where required, implements measures to ensure that all conditions of the loan are met. As of 31 December 2012, the relevant total borrow-
ings came to € 54.9 million. The covenants were met at all agreed audit points throughout the reporting year.
When investing liquid funds, generally in the form of call money or term deposits, HHLA currently restricts itself to investments with domestic fi nancial institutions which are fully secured by a deposit protection fund or comparable arrangement. Since HHLA only enters into transactions with institutions boasting a very high credit rating, and the banking sector is currently being stabilised and fortifi ed by government measures, the risk of default can be regarded as low.
Changes in interest levels over the long term may alter the necessary pension provisions. A fall in long-term interest levels increases the fair value of the pension obligations. HHLA monitors interest trends so that it can adjust its provisions as necessary.
The HHLA Group uses derivative fi nancial instruments to reduce interest rate risks, and to a lesser extent the exchange rate and commodity price risks. Interest rate risks are largely hedged by interest rate derivatives and by fi xed-interest agreements. No speculative hedging transactions are conducted. The theoretical default risk in the case of derivative fi nancial instruments is that of counterparty default and is therefore equivalent to the carrying amounts of the individual fi nancial instruments. The risk of default can be regarded as low, as the HHLA Group only conducts derivative fi nancial transactions with counterparties boasting very good credit ratings. See also Note 47 in the Notes to the Consolidated Financial Statements, page 190.
HHLA's services are primarily rendered in Europe, meaning that the majority of its invoices are issued in euros. The Logistics and Intermodal segments operate internationally and a container terminal is operated in the Ukraine. Invoicing here is based on euros or US dollars. Any currency or transfer risks that exist mainly result from exchange rate fl uctuations affecting the Eastern European currencies, with the hryvnya – the Ukrainian national currency – monitored particularly closely. Currency risks
take on a concrete form mainly in the Eastern European affi liates when borrowed capital denominated in euros is converted. All HHLA companies that operate with foreign currencies reduce the risk of exchange rate fl uctuations by monitoring rates regularly and, where necessary, depositing free liquidity in local currency to accounts with hard currency.
In view of rising carrying capacities and ongoing price competition, the liquidity and earnings position of shipping companies remains tense. If volume growth remains modest, freight rates will continue to come under pressure. Breaking even is an ambitious target for many shipping companies; smaller shipping companies in particular may come under strain. As the HHLA Group's customers are international, the Group must adapt its payment transactions to prevailing global practice. For the HHLA Group, this means granting its customers trade credit during the course of its commercial relationships. HHLA uses credit checks to reduce del credere collection risks. To reduce the risk of default, HHLA operates an active receivables management system that enables outstanding accounts to be monitored with precision. HHLA has also taken out loan loss insurance to minimise default risks. Should the fi nancial position of specifi c debtors change signifi cantly, the insurer may limit the amount of cover it offers for new receivables payable by these debtors and/or no longer be able to provide cover.
Economic developments at certain affi liates could make it necessary to write down the carrying amount of holdings and/or set aside provisions for impending losses. It may also prove necessary to assume losses. HHLA checks the value of its equity holdings regularly and makes adjustments where necessary.
The rendering of port services has long been a focal point of legislative considerations at EU level. The EU's deliberations so far have been aimed at opening up the market for port services and establishing a valid EU-wide legal framework for their rendering. As a result, we may see more EU guidelines and their translation into national law over the next few years.
Starting in 2015, the sulphur limits for oceangoing vessels in the North Sea and the Baltic are set to be reduced from their current maximum of 1 % to 0.1 %. In 2012, the international limit was cut from 4.5 % to 3.5 %, with a further reduction to 0.5 % due in 2020. As the stricter limits in the North Sea and the Baltic make transportation costlier, there is a risk of traffi c shifting and competition being distorted.
HHLA's ability to operate relies to a large degree on the skills of its staff. For this reason, the HHLA Group is exposed to individual risks resulting from the age distribution of its workforce, their qualifi cations and training, and fl uctuation among key personnel. In order to minimise such risks, staff selection, recruitment and development are carried out in coordination with the subsidiaries and associated companies using standardised processes and procedures. A new commercial labour agreement has been signed. The key element of this collective labour agreement is an appraisal system that links systematic, transparent and uniform appraisal measures with staff development. Appraisals are both top down and bottom up. This means that staff risks are identifi ed and appropriate action taken in a timely fashion and corresponding staff management measures can be put in place.
Staff risks also include the possibility of fraudulent acts and, at a more general level, employees violating the law during their work. To reduce these risks, HHLA has introduced guidelines, manuals and double-checking, embedded controls in its processes and established spot checks as part of its compliance management system. Furthermore, the Group has issued a code of conduct which applies to all HHLA managers and staff. Training sessions are held regularly on the contents of the code of conduct. New employees and apprentices also receive training on the code. Regular induction and training sessions focusing on special issues are also held for relevant groups of staff. These cover topics such as occupational health and safety, environmental protection, conduct in the competitive environment, preventing corruption and insider trading rules.
As part of the expansion of terminal capacity, major investments were made in hardware and software components. Ever-greater process automation, increasing integration of customers and service providers into organisational processes and the consequent growth of data transfer mean that the availability of IT systems is becoming increasingly important. Redundant
copies of key IT components such as computing centres, computer networks and telecommunications systems substantially reduce the probability of downtime.
IT security and SAP authorisation guidelines defi ne the responsible operation of IT systems and serve to prevent IT security violations.
All of the handling sites within the HHLA Group offer ships and port facilities maximum protection against potential terrorist attacks. The requirements of the International Ship and Port Facility Security Code (ISPS Code), which took effect in 2004, are met in full.
Generally speaking, the competent authorities worldwide are looking to tighten the security guidelines in maritime transport even further. These measures would lead to additional costs which it may not be possible to fully recoup, or which cannot be passed on due to the competitive situation. HHLA makes its position clear by means of lobbying and public relations work in the hope of achieving a sensible, economically viable solution.
Increases in rents in the years ahead are expected as a result of contractual step-up clauses in leases for quays and other areas. Planning authorities may require supplementary conditions to be fulfi lled when granting permission for container terminal capacities to be expanded. These conditions can relate in particular to environmental and emission protection measures. There is also a general risk of further legal obligations if the project turns out to have any unforeseen negative consequences.
As a result of the existing structural situation and the fact that HHLA's port facilities and buildings operate close to water, a risk of storm fl ooding must be assumed. Flood protection work undertaken by HHLA and the Free and Hanseatic City of Hamburg in recent years has reduced this risk considerably, however. Should this risk ever become reality, comprehensive emergency programmes have been put in place by public authorities and companies operating in the port to minimise the potential damage. Additionally, anticipated third-party claims for damage to property are insured against.
The HHLA Group companies are active in Central and Eastern Europe via terminals operated there. The general environment in some parts of these countries is different from that in Western Europe, with less political, economic and legal stability. As a result, the HHLA Group is exposed to a number of factors which it cannot infl uence directly and which could have an impact on its commercial activities in these countries. In particular, it cannot be ruled out that for political or legal reasons, HHLA may not receive all or some of the profi ts it generates.
Above and beyond the risks mentioned, no further signifi cant risks have currently been identifi ed, while those that do exist are largely insured against.
Strategic Opportunities
Due to its favourable geographical location, the Port of Hamburg is the defi nitive international hub for seaborne and overland container transport, situated close to the German North Sea coast with excellent hinterland links to the growing economies of Central and Eastern Europe and the Baltic states. Promptly dredging the navigation channel as planned would give HHLA the opportunity to take the pressure off peak loads caused by the size of ships and to optimise its cost structure so as to maintain and build on its competitive position. The Intermodal segment would also benefi t from the growth in container handling. The shift in container traffi c from road to rail could be accelerated by new environmental policies or an increase in demand for environmentally friendly transport solutions in the future.
Provided that no protectionist tendencies hamper world trade, allowing liberalisation to progress, the international division of labour in the production of consumer and capital goods will continue in future. The Port of Hamburg's integration into the global exchange of goods gives HHLA the chance to benefi t directly from further developments in the global economy. Experts believe that the prerequisites for such a development are in place, thanks to the decisive response of politicians and central banks to market fl uctuations, the stabilisation of fi nancial markets and the further growth of the global economy.
The rising concentration of freight volumes on large international hubs due to the increasing use of container mega-ships, along with the growing importance of handling effi ciency, productivity and reliability as a major cost factor in the transport chain, offer HHLA additional business opportunities to further develop intermodal traffi c between the international seaport, railway and road. See also Corporate Strategy, page 77 et seq.
HHLA has a sound balance sheet structure and a low gearing ratio by industry standards. This means that HHLA has various options for fi nancing investments and shareholdings. In addition to the above, HHLA continually assesses the extent to which strategically advantageous acquisition or investment possibilities are available.
The HHLA Group's overall risk position is determined largely by uncertainties surrounding the future development of the global economy and by strategic and market risks. Overall, there are fewer risks than in 2011 due to a range of implemented measures.
The risks identifi ed, taken both singularly and cumulatively, do not threaten the existence of the Group. As far as the future is concerned, there are also no discernible risks at present which could jeopardise the continued existence of the company.
As the macroeconomic prospects are fraught with uncertainty, this description of risks merely serves as a snapshot. The HHLA Group's quarterly reports contain updated information on any changes to the company's risk position.
In January 2013, non-current assets held for sale were disposed for an accounting gain of around € 5 million in the course of restructuring the Logistics segment.
There were no further events of special signifi cance after the balance sheet date of 31 December 2012.
Although the economic situation continues to be fraught with uncertainty, the decline in global economic momentum appeared to have been halted at the turn of 2012/2013. Underlying conditions in global fi nancial markets have improved and recent sentiment indicators point to an economic upswing in the course of 2013. However, the signals being sent by the global economy are still mixed. While the measures taken by the central banks of the eurozone and the US brought temporary calm to the capital markets, the tremendous pressure to consolidate government budgets coupled with unresolved structural problems continue to cast a shadow on the economic outlook for the industrialised nations. The export sectors of many emerging and developing countries are suffering from sustained weak demand from abroad and are focusing primarily on an expansive fi scal policy to stimulate domestic demand. Considerable uncertainty and material risks to the global economy continue to stem from a renewed escalation of the eurozone debt crisis, the repercussions of a rising public defi cit in the US and an economic cool-off in the emerging and developing countries. Assuming a gradual easing of the macroeconomic situation, the International Monetary Fund (IMF) forecasts a moderate growth in the global economy of 3.5 % year-on-year.
The fragile economic situation is also refl ected in international trade activities. With this in mind, the economic upturn should also lend a certain momentum to global trade. Following on from weak growth in 2012, however, global trade volumes are likely to reach only a moderate 3.8 % increase in 2013.
In those economic regions of prime importance for the business activities of HHLA, the economic development is once again expected to vary widely in 2013. It is believed that Asia's economic expansion will continue to be affected by the debt crisis in the industrialised nations and the ensuing dampening effect on export demand. Nevertheless, the IMF still anticipates comparably strong economic growth of 7.1 % in Asia's emerging nations. There are hopes that the leadership change in the People's Republic of China will result in a stronger emphasis on fi scal and monetary policy as well as a move towards further structural reforms. The world's secondlargest economy is therefore likely to grow by 8.2 % in the coming year.
Given their close ties with the eurozone, growth in the economies of Central and Eastern Europe will increase relatively moderate by 2.4 % according to IMF estimates. On the back of oil and gas exports, however, Russia's economic performance is still expected to expand by 3.7 %.
While the emerging markets are able to counter weak economic growth with fl exible monetary and fi scal policies, the industrial nations have few such options at their disposal in view of high budget defi cits and already low interest rates. Therefore, the IMF expects the eurozone to remain in recession in 2013, whereby the projected decline in economic output of 0.2 % is likely to be less than in the previous year.
In anticipation of rising export demand, particularly from the emerging nations, Germany's gross domestic product may buck this trend with modest growth of 0.6 %. Providing the US can quickly resolve the dispute surrounding the debt ceiling for its national budget, the IMF believes it can achieve economic growth of 2.0 %, despite its ongoing structural problems and high unemployment.
On the basis of this cautiously optimistic economic outlook, the market research institute Drewry forecasts slightly stronger growth in global container throughput for 2013. After 3.9 % growth last year, the global container volume is set to increase by an already downgraded 4.6 % in the coming twelve months. While above-average growth rates are predicted again for inner-Asian container traffi c and throughput in Eastern Europe, the forecasts for the Northern European ports suggest that handling volumes will virtually stagnate, increasing by 0.6 % at best.
| Assumptions | Base case | Relevant growth expectations | ||||
|---|---|---|---|---|---|---|
| I Slight economic upturn and moderate | Gross domestic product | 2013 | ||||
| global economic growth | Global economy | 3.5 % | ||||
| I Fading but lingering uncertainty due to unresolved sovereign debt crisis |
Germany | 0.6 % | ||||
| I Slight recession in the eurozone | Asia | 7.1 % | ||||
| I Ongoing economic burden due to fi scal austerity programmes |
Central and Eastern Europe | 2.4 % | ||||
| I Increase in surplus capacity in container | Industry indicators | |||||
| shipping and at handling terminals in | Global trade | 3.8 % | ||||
| Northern Europe | Container throughput, worldwide | 4.6 % | ||||
| I Fierce competition and consolidation among shipping companies |
Container throughput, Northern Europe | 0.6 % | ||||
| I No start to dredging the river Elbe's | Transport volume, Germany | 2.5 % | ||||
| navigation channel expected | Source: IMF, Drewry, Clarkson, Federal Offi ce for Freight Transport | |||||
| Group | I Revenue in a range of € 1.1 billion to € 1.2 billion (revenue in 2012: € 1.1 billion) I EBIT in a range of € 155 million and € 175 million (2012: € 186.3 million incl. one-off gain of € 17.6 million) I Investments in the region of € 160 million |
|||||
| Subgroup | Port Logistics | Real Estate | ||||
| Revenue | I Following the range of the HHLA Group without revenue of the subgroup Real Estate | I Comparable to the previous year (revenue in 2012: € 32 million) |
||||
| EBIT | I In a range of € 142 million and € 162 million (2012: € 173.1 million incl. one-off gain of € 17.6 million) |
I Comparable to the previous year (2012: € 12.8 million) |
||||
| Segment | Container | Intermodal | Logistics | Real Estate | ||
| Volume | Container throughput: I Similar to previous year in the region of 7.2 million TEU (2012: 7.2 million TEU) |
Container transport: I Above market growth in TEU (2012: 1.0 million activities) |
the region of 1.1 million TEU based on continuing |
I Diverging developments in specialised market segments |
The Real Estate segment is equivalent to the Real Estate subgroup (see section above) |
|
| Revenue | I Slightly up on previous year (2012: € 697 million) |
I Above the previous year (2012: € 300 million) |
I Slightly up on previous year (2012: € 92 million) |
|||
| EBIT | I Below previous year due to impact of cost infl ation and depreciation (2012: € 146.2 million) |
I Below previous year compensated |
(2012: € 41.3 million), one off gain of € 17.6 million from 2012 to not be fully |
I Slightly below previous year due to burden on earnings from realign ment (2012: € 4.4 million) |
||
| Positive case scenario | Negative case scenario | |||||
| Environment | I Rise of economic growth at the end of 2013 |
I Swift and effective solution to the sovereign debt crisis I Considerably improved capacity utilisation I Decreasing price competition I Start to the dredging of the Elbe navigation channel |
I Escalation of sovereign debt crisis I Increasing instability in the fi nancial sector I Global recession sets in again I Deterioration in capacity utilisation I Ruinous price competition I No start to dredging the Elbe navigation channel |
|||
| Group performance | I Container throughput above previous year I Positive effect for container transport I Revenue above € 1.2 billion I EBIT above € 175 million |
I Container throughput below previous year I Negative effect for container transport I Revenue below € 1.1 billion I EBIT below € 155 million |
The diffi cult market situation for container shipping is set to remain tense in 2013. The market research institute Alphaliner expects shipyards to achieve a new delivery record in the coming twelve months. Container ships with a total capacity of 1.7 million TEU are set to go into service, adding to the imbalance between supply and demand. More than 40 of these new ships alone are to have carrying capacities in excess of 10,000 TEU. These vessels will primarily be used on services between Asia and Europe, causing high peak workloads in ports along their routes. It is to be expected that a number of shipping companies will look seriously at consolidation options again in 2013, which could lead to unpredictable changes in the structures and timetables of liner services from the viewpoint of port logistics.
At the same time, HHLA's rival ports are adding capacity which began to be created way before the fi nancial and economic crisis in 2008/2009 due to their long lead times. As volume trends are expected to prove modest with handling facilities being already considerably underutilised, surplus capacity can also be anticipated in ship handling for some time to come. This will place corresponding pressure on the earnings quality of terminal operators.
In view of the lack of growth in Northern European port handling, it is also unlikely that transport volumes for pre- and onwards-carriage systems in the hinterland will increase at any real pace. In fact, indications in the transport market even point to a negative tendency for road freight traffi c, whereby rising operating costs are expected to result in price increases. By contrast, the transport market barometer suggests a positive trend in rail traffi c. The prospects for intermodal traffi c in particular are more encouraging, whereby the forecast for Germany and Eastern Europe is more favourable than for Western Europe. Overall, rising prices can also be expected in rail freight traffi c. The entire market including continental traffi c is forecast to grow by not more than 2.5 % according to a medium-term projection on behalf of the German Federal Ministry of Transportation.
Due to the uncertain economic environment, the outlook for logistics services has darkened noticeably. In particular, the expectations of the
German logistics industry have fallen strongly in view of the latest business forecasts and current order position. Demand-side expectations are also decidedly modest. However, economic sentiment indicators for both industry and commerce continue to lean towards expansion at the moment. The operating environment for affi liates in the Logistics segment is likely to develop differently for each submarket.
Faced with dwindling demand in Western Europe, the German car industry is concentrating heavily on growth markets abroad. Export volumes are set to rise slightly above 2012 levels. The German steel industry cannot expect a sustained recovery in 2013 due to diffi cult conditions in the international environment. Given the current low stock levels, crude steel production is expected to grow by 1 % and steel production by 1 to 2 % in anticipation of an economic upswing in the second half of the year. In contrast, the number of cruise ships booked to dock at the port indicates further strong growth in handling services.
Expected Earnings Position
As a result of the surplus supply of terminal capacity, HHLA expects competition to become even fi ercer and does not currently anticipate making any market share gains – especially in view of further delays to the dredging of the river Elbe. In line with sector development, container throughput in 2013 is expected to remain on a par with 2012 in the region of 7.2 million TEU. Freight volumes remain heavily dependent on economic trends and in some cases on the short-term scheduling of shipping companies. As a consequence, it is currently impossible to exclude the possibility of fl uctuations and signifi cant deviations from the intended targets. Hinterland transport to and from the seaports of Northern Europe will continue to cater for container throughput on existing routes, but will at times face strong competition from other carriers, above all in the west-east direction. Based on the realignment of its Intermodal activities begun in 2012, HHLA still expects transport volumes to increase again for its retained rail companies in 2013, meaning that container transport volumes may reach around 1.1 million TEU in 2013. To achieve this, it is crucial to successfully establish new routes in the German-speaking area and to expand Polish traffi c further.
Based on these performance parameters, which are of key importance to the Group's earnings position as the primary source of income and decisive factors for economies of scale, the Group aims to generate revenue in a range between € 1.1 billion and € 1.2 billion.
Expected cost increases as a result of general price adjustments and higher depreciation and amortisation charges caused by additional handling equipment will have a negative impact on earnings as container throughput stagnates in 2013 and more than cancel out any potential increases in revenue. Furthermore, entering new markets in the Intermodal segment is associated with greater earnings uncertainty. HHLA is convinced of the sustainable earnings potential of its rail operators. However, the continued realignment of its Intermodal activities in 2013 will not yet be able to fully make up for the absence of the one-off gain of € 17.6 million recorded in 2012 in conjunction with the restructuring.
Based on the projected volume growth, the forecast situation in terms of revenue and costs, as well as the additional short-term earnings uncertainty in the Intermodal segment, HHLA anticipates an operating result (EBIT) in a range of € 155 to € 175 million for the Group in 2013. In view of the fact that the Real Estate subgroup's EBIT is expected to remain unchanged compared with the previous year, the listed Port Logistics subgroup is forecast to record an EBIT in a range between € 142 and € 162 million. An effective tax rate of just under 30 % is expected for the Group in 2013. Uncertainty surrounding the further scheduling of shipping companies' liner services will also have an impact on the expected proportion of profi t after taxes payable to the parent company's shareholders as a result of different ownership structures between the handling facilities at the Port of Hamburg. Due to increased reorganisation costs incurred by handling facilities and rail operators wholly owned by HHLA and the one-off gains from the realignment of Intermodal activities in 2012 exclusively attributable to the parent company's shareholders, the proportion of profi ts payable to shareholders of the parent company is expected to fall more strongly than EBIT.
Moreover, the following key developments are forecast for the Port Logistics subgroup:
In the Container segment, a slight increase in revenue is possible in 2013, although the actual development of earnings quality is fraught with considerable uncertainty. From an operational standpoint, the focus is on the reorganisation of the Port of Hamburg's largest handling facility to make it fi t for future developments. The aforementioned rise in costs for the HHLA Group will therefore be felt mainly in the Container segment. In connection with the expected stagnation in container throughput, the operating result is likely to drop below the prior-year fi gure in 2013.
In the Intermodal segment, HHLA expects a signifi cant rise in revenue in 2013 on a comparable basis, leading to a higher fi gure than reported in 2012. The aim of the ongoing realignment of Intermodal activities is to achieve greater earnings power in addition to the extra income from higher volumes. As the comparative fi gures for 2012 included a one-off gain of € 17.6 million, EBIT in this segment will fall short of the previous year's level in 2013.
The various submarkets of the Logistics segment will continue to display divergent trends in the coming year. At segment level, revenue is expected to increase slightly in 2013 compared with the previous year. Even taking an accounting gain of around € 5 million, see also Events After the Balance Sheet Date, page 122 which was achieved in January 2013, into account, this segment will not be able to build on the operating result reported in 2012, as there are restructuring effects which will depress the result. In particular, it faces substantial risks in vehicle logistics which cannot be offset by largely stable developments in other shareholdings. The work to reorganise contract and project logistics started in 2012 will continue to put pressure on earnings in 2013. As a result, earnings may prove volatile in 2013.
As mentioned above, forecasts are highly uncertain at present. Consequently, actual industry and business developments may follow a worse or better economic trend than that described here. HHLA will therefore continue to add more specifi c details to its outlook above and beyond the statements made in this report as soon as the economic environment allows for a more reliable projection.
HHLA will continue to pursue its proven approach of fl exible capital expenditure tailored to actual demand. Due to the high level of macroeconomic uncertainty, the Group reserves the right to make the fi nal decision on whether investment projects are actually implemented. This means that capital expenditure may deviate from what was originally planned as a result of postponing such projects as the year progresses. Currently, Group capital expenditure is planned to be around € 160 million in 2013 – of which around € 140 million is earmarked for the Port Logistics subgroup. According to current plans, and assuming a continued trend towards further economic stability, capital expenditure for the Group and the Port Logistics subgroup will reach a similar level in 2014.
The Group's balance sheet total is likely to increase slightly in 2013. A rise in non-current assets, primarily in the area of property, plant and equipment, can be expected on the assets side. On the liabilities side, the change in equity will mainly be determined by the net profi t for the year, the gradual reduction of an equalisation lia bility payable to a minority shareholder see also Financial Position, page 103 and the development of actuarial gains arising from the calculation of pension provisions. Financial liabilities for the fi nancing of investment projects are also expected to increase.
Other than this, the main funds earmarked for fi nancing the further development of business are the available liquidity reserves, the positive cash fl ows from ongoing business activities and, to a lesser extent, the raising of loans. Additional fi nancing possibilities arise from HHLA's good credit standing. HHLA is therefore confi dent that suffi cient fi nancial funds will remain available for value-creating corporate development in the future as well.
HHLA's objective remains the same: to continue pursuing its yield-oriented dividend distribution policy. As far as fi nancing needs allow and as long as there are no fundamental changes in the situation, the intention is to continue distributing at least 50 % of the net income for the year as dividends.
There are no plans to make any fundamental changes to the Group's strategic alignment and objectives, see also Corporate Strategy, page 77 et seq. As regards the primary goods fl ows in international sea freight shipping – and therefore the relevant sales markets for HHLA's range of services – market research institutes such as Drewry do not anticipate any signifi cant shifts.
However, the extra terminal capacity in Wilhelmshaven and the planned expansion of the port in Rotterdam as part of the Maasvlakte 2 project will intensify competition even further. In addition, the behaviour of shipping companies and competitors with regard to possible direct traffi c in the Baltic Sea must be included in strategic considerations. The natural advantage offered by the Port of Hamburg's location, which en ables mega-ships to travel deep into the inland, delivering commercial and ecological benefi ts, will be of increasing importance. The timely deepening of the river Elbe's navigation channel remains essential here. With its fl exibility from more than 127 years of company history, HHLA will take a proactive approach to these challenges and make any necessary adjustments to its organisation. Following the successful realignment of the Group's Intermodal activities, however, no signifi cant changes in the organisation of the business are planned in the short term.
If an attractive acquisition opportunity should occur which meets HHLA's strategic and fi nancial requirements, it may allow HHLA to expand its core business within existing segments.
| 2014 | |
|---|---|
| Global economy | 4 % |
| Germany | 1 % |
| Asia | 8 % |
| Central and Eastern Europe | 3 % |
| World trade | 6 % |
Source: IMF (rounded off to full percentage numbers)
For HHLA's prospects in 2014 and beyond, it is of paramount importance that the Elbe navigation channel is dredged promptly. Furthermore, it is essential for the business development of HHLA that the global economy returns to stable and reliable growth, meaning that the emerging economies are once again more strongly integrated into the international division of labour as the underlying driver of growth. Once this happens, HHLA's business model will enable it to post revenue and earnings growth again both in 2014 and in the medium term. A demand-oriented investment policy and stable balance sheet relationships continue to represent the fi nancial fundament for this growth potential to be exploited.
Under the circumstances known to the Executive Board at the time the transactions listed in the related parties report in accordance with Section 312 of the German Stock Corporation Act (AktG) were carried out or actions were committed or omitted, the company received adequate consideration for the transaction and was not disadvantaged by committing or omitting the said actions.
In accordance with Article 4 of the articles of association, the Executive Board, with analogous application of the provisions of Section 312 of the German Stock Corporation Act (AktG), must prepare a report on the relationships between the A division and the S division. Under the circumstances that were known to the Executive Board at the time when the legal transactions specifi ed in the report on the relationships between the A division and the S division were completed, both divisions received an appropriate consideration. Any expenses and returns which could not be attributed directly to one division were divided among the divisions in line with the articles of association. No steps were taken or omitted at the behest or in the interests of the other division in each case.
Hamburger Hafen und Logistik Aktiengesellschaft The Executive Board
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Roland Lappin
Some of the disclosures in the Group Management Report – including statements on revenue and earnings developments and on possible changes in the sector or the fi nancial position – contain forwardlooking statements. These statements are based on the current best estimates and assumptions by the company. Depending on whether uncertain events materialise, HHLA's actual results, including its earnings and fi nancial position, may differ materially from those explicitly or implicitly assumed or described in these statements.
| in € thousand | Note | 2012 | 2011 |
|---|---|---|---|
| Revenue | 8. | 1,128,542 | 1,217,272 |
| Changes in inventories | 9. | 1,711 | 602 |
| Own work capitalised | 10. | 9,029 | 7,175 |
| Other operating income | 11. | 48,289 | 43,728 |
| Cost of materials | 12. | - 366,296 | - 432,934 |
| Personnel expenses | 13. | - 373,739 | - 359,527 |
| Other operating expenses | 14. | - 140,026 | - 142,874 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | 307,510 | 333,442 | |
| Depreciation and amortisation | 15. | - 121,233 | - 126,427 |
| Earnings before interest and taxes (EBIT) | 186,277 | 207,015 | |
| Earnings from associates accounted for using the equity method | 16. | - 4,026 | 335 |
| Interest income | 16. | 9,918 | 9,598 |
| Interest expenses | 16. | - 39,277 | - 42,324 |
| Other fi nancial result | 16. | 540 | 217 |
| Financial result | 16. | - 32,845 | - 32,174 |
| Earnings before tax (EBT) | 153,432 | 174,841 | |
| Income tax | 18. | - 41,588 | - 56,053 |
| Profi t after tax | 111,844 | 118,788 | |
| of which attributable to non-controlling interests | 19. | 39,409 | 29,506 |
| of which attributable to shareholders of the parent company | 72,435 | 89,282 |
| in € thousand | Note | 2012 | 2011 |
|---|---|---|---|
| Profi t after tax | 111,844 | 118,788 | |
| Actuarial gains/losses | 36. | - 71,865 | 18,128 |
| Cash fl ow hedges | 47. | - 43 | - 418 |
| Foreign currency translation differences | - 1,348 | 1,435 | |
| Deferred taxes on changes recognised directly in equity | 18. | 23,147 | - 5,745 |
| Other | 146 | - 101 | |
| Income and expense recognised directly in equity | - 49,963 | 13,299 | |
| Total comprehensive income | 61,881 | 132,087 | |
| of which attributable to non-controlling interests | 39,317 | 29,448 | |
| of which attributable to shareholders of the parent company | 22,564 | 102,639 |
132 Consolidated Financial Statements Income Statement HHLA Subgroups Statement of Comprehensive Income HHLA Subgroups
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2012 Group |
2012 Port Logistics |
2012 Real Estate |
2012 Consolidation |
|---|---|---|---|---|
| Revenue | 1,128,542 | 1,101,175 | 32,408 | - 5,041 |
| Changes in inventories | 1,711 | 1,715 | - 4 | 0 |
| Own work capitalised | 9,029 | 8,946 | 0 | 83 |
| Other operating income | 48,289 | 42,012 | 7,155 | - 878 |
| Cost of materials | - 366,296 | - 359,898 | - 6,502 | 104 |
| Personnel expenses | - 373,739 | - 371,565 | - 2,174 | 0 |
| Other operating expenses | - 140,026 | - 131,965 | - 13,793 | 5,732 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | 307,510 | 290,420 | 17,090 | 0 |
| Depreciation and amortisation | - 121,233 | - 117,287 | - 4,253 | 307 |
| Earnings before interest and taxes (EBIT) | 186,277 | 173,133 | 12,837 | 307 |
| Earnings from associates accounted for using the equity method | - 4,026 | - 4,026 | 0 | 0 |
| Interest income | 9,918 | 9,955 | 74 | - 111 |
| Interest expenses | - 39,277 | - 34,755 | - 4,633 | 111 |
| Other fi nancial result | 540 | 540 | 0 | 0 |
| Financial result | - 32,845 | - 28,286 | - 4,559 | 0 |
| Earnings before tax (EBT) | 153,432 | 144,847 | 8,278 | 307 |
| Income tax | - 41,588 | - 38,874 | - 2,640 | - 74 |
| Profi t after tax | 111,844 | 105,973 | 5,638 | 233 |
| of which attributable to non-controlling interests | 39,409 | 39,409 | ||
| of which attributable to shareholders of the parent company | 72,435 | 66,564 | 5,871 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2012 Group |
2012 Port Logistics |
2012 Real Estate |
2012 Consolidation |
|---|---|---|---|---|
| Profi t after tax | 111,844 | 105,973 | 5,638 | 233 |
| Actuarial gains/losses | - 71,865 | - 70,686 | - 1,179 | 0 |
| Cash fl ow hedges | - 43 | - 43 | 0 | |
| Foreign currency translation differences | - 1,348 | - 1,348 | 0 | |
| Deferred taxes on changes recognised directly in equity | 23,147 | 22,767 | 380 | |
| Other | 146 | 146 | 0 | |
| Income and expense recognised directly in equity | - 49,963 | - 49,164 | - 799 | 0 |
| Total comprehensive income | 61,881 | 56,809 | 4,839 | 233 |
| of which attributable to non-controlling interests | 39,317 | 39,317 | ||
| of which attributable to shareholders of the parent company | 22,564 | 17,492 | 5,072 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2011 Group |
2011 Port Logistics |
2011 Real Estate |
2011 Consolidation |
|---|---|---|---|---|
| Revenue | 1,217,272 | 1,190,639 | 31,677 | - 5,044 |
| Changes in inventories | 602 | 600 | 2 | 0 |
| Own work capitalised | 7,175 | 7,097 | 0 | 78 |
| Other operating income | 43,728 | 38,724 | 5,920 | - 916 |
| Cost of materials | - 432,934 | - 426,336 | - 6,704 | 106 |
| Personnel expenses | - 359,527 | - 357,381 | - 2,146 | 0 |
| Other operating expenses | - 142,874 | - 136,085 | - 12,565 | 5,776 |
| Earnings before interest, taxes, depreciation and amortisation (EBITDA) | 333,442 | 317,258 | 16,184 | 0 |
| Depreciation and amortisation | - 126,427 | - 122,472 | - 4,262 | 307 |
| Earnings before interest and taxes (EBIT) | 207,015 | 194,786 | 11,922 | 307 |
| Earnings from associates accounted for using the equity method | 335 | 335 | 0 | 0 |
| Interest income | 9,598 | 9,390 | 331 | - 123 |
| Interest expenses | - 42,324 | - 37,597 | - 4,850 | 123 |
| Other fi nancial result | 217 | 217 | 0 | 0 |
| Financial result | - 32,174 | - 27,655 | - 4,519 | 0 |
| Earnings before tax (EBT) | 174,841 | 167,131 | 7,403 | 307 |
| Income tax | - 56,053 | - 53,608 | - 2,370 | - 75 |
| Profi t after tax | 118,788 | 113,523 | 5,033 | 232 |
| of which attributable to non-controlling interests | 29,506 | 29,506 | ||
| of which attributable to shareholders of the parent company | 89,282 | 84,017 | 5,265 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2011 Group |
2011 Port Logistics |
2011 Real Estate |
2011 Consolidation |
|---|---|---|---|---|
| Profi t after tax | 118,788 | 113,523 | 5,033 | 232 |
| Actuarial gains/losses | 18,128 | 17,900 | 228 | |
| Cash fl ow hedges | - 418 | - 418 | 0 | |
| Foreign currency translation differences | 1,435 | 1,435 | 0 | |
| Deferred taxes on changes recognised directly in equity | - 5,745 | - 5,672 | - 73 | |
| Other | - 101 | - 101 | 0 | |
| Income and expense recognised directly in equity | 13,299 | 13,144 | 155 | 0 |
| Total comprehensive income | 132,087 | 126,667 | 5,188 | 232 |
| of which attributable to non-controlling interests | 29,448 | 29,448 | ||
| of which attributable to shareholders of the parent company | 102,639 | 97,219 | 5,420 |
| in € thousand | |||
|---|---|---|---|
| Assets | Note | 31.12.2012 | 31.12.2011 |
| Non-current assets | |||
| Intangible assets | 22. | 82,642 | 81,490 |
| Property, plant and equipment | 23. | 1,002,307 | 985,340 |
| Investment property | 24. | 180,851 | 180,062 |
| Associates accounted for using the equity method | 25. | 2,039 | 1,830 |
| Financial assets | 26. | 13,935 | 9,086 |
| Deferred taxes | 18. | 42,826 | 22,243 |
| 1,324,600 | 1,280,051 | ||
| Current assets | |||
| Inventories | 27. | 21,743 | 23,162 |
| Trade receivables | 28. | 128,037 | 151,771 |
| Receivables from related parties | 29. | 24,928 | 3,756 |
| Other fi nancial receivables | 30. | 2,382 | 2,429 |
| Other assets | 31. | 14,957 | 16,776 |
| Income tax receivables | 32. | 9,345 | 3,591 |
| Cash, cash equivalents and short-term deposits | 33. | 230,072 | 329,996 |
| Non-current assets held for sale | 34. | 12,442 | 0 |
| 443,906 | 531,481 | ||
| 1,768,506 | 1,811,532 | ||
| Equity and liabilities | |||
| Equity | |||
| Subscribed capital | 72,753 | 72,680 | |
| Subgroup Port Logistics | 70,048 | 69,975 | |
| Subgroup Real Estate | 2,705 | 2,705 | |
| Capital reserve | 141,584 | 139,728 | |
| Subgroup Port Logistics | 141,078 | 139,222 | |
| Subgroup Real Estate | 506 | 506 | |
| Retained earnings | 355,690 | 385,124 | |
| Subgroup Port Logistics | 335,366 | 367,967 | |
| Subgroup Real Estate | 20,324 | 17,157 | |
| Other comprehensive income | - 6,626 | 42,872 | |
| Subgroup Port Logistics | - 7,083 | 41,615 | |
| Subgroup Real Estate | 457 | 1,257 | |
| Non-controlling interests | - 1,411 | 4,258 | |
| Subgroup Port Logistics | - 1,411 | 4,258 | |
| Subgroup Real Estate | 0 | 0 | |
| 35. | 561,990 | 644,662 | |
| Non-current liabilities | |||
| Pension provisions | 36. | 384,235 | 313,729 |
| Other non-current provisions | 37. | 54,221 | 53,526 |
| Non-current liabilities to related parties | 40. | 114,089 | 93,587 |
| Non-current fi nancial liabilities | 38. | 314,016 | 403,184 |
| Deferred taxes | 18. | 13,419 | 13,557 |
| 879,980 | 877,583 | ||
| Current liabilities | |||
| Other current provisions | 37. | 25,569 | 28,759 |
| Trade liabilities | 39. | 65,850 | 72,003 |
| Current liabilities to related parties | 40. | 70,580 | 72,119 |
| Current fi nancial liabilities | 38. | 138,314 | 88,332 |
| Other liabilities | 41. | 21,765 | 25,563 |
| Income tax liabilities | 42. | 4,458 | 2,511 |
| 326,536 | 289,287 | ||
| 1,768,506 | 1,811,532 |
in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes
| Assets | 31.12.2012 Group |
31.12.2012 Port Logistics |
31.12.2012 Real Estate |
31.12.2012 Consolidation |
|---|---|---|---|---|
| Non-current assets | ||||
| Intangible assets | 82,642 | 82,639 | 3 | 0 |
| Property, plant and equipment | 1,002,307 | 980,772 | 5,068 | 16,467 |
| Investment property | 180,851 | 55,597 | 155,183 | - 29,929 |
| Associates accounted for using the equity method | 2,039 | 2,039 | 0 | 0 |
| Financial assets | 13,935 | 11,937 | 1,998 | 0 |
| Deferred taxes | 42,826 | 51,934 | 0 | - 9,108 |
| 1,324,600 | 1,184,918 | 162,252 | - 22,570 | |
| Current assets | ||||
| Inventories | 21,743 | 21,673 | 70 | 0 |
| Trade receivables | 128,037 | 127,377 | 660 | 0 |
| Receivables from related parties | 24,928 | 28,873 | 2,472 | - 6,417 |
| Other fi nancial receivables | 2,382 | 2,377 | 5 | 0 |
| Other assets | 14,957 | 14,777 | 180 | 0 |
| Income tax receivables | 9,345 | 9,505 | 0 | - 160 |
| Cash, cash equivalents and short-term deposits | 230,072 | 229,614 | 458 | 0 |
| Non-current assets held for sale | 12,442 | 12,442 | 0 | 0 |
| 443,906 | 446,638 | 3,845 | - 6,577 | |
| 1,768,506 | 1,631,556 | 166,097 | - 29,147 |
| Equity and liabilities | ||||
|---|---|---|---|---|
| Equity | ||||
| Subscribed capital | 72,753 | 70,048 | 2,705 | 0 |
| Capital reserve | 141,584 | 141,078 | 506 | 0 |
| Retained earnings | 355,690 | 335,366 | 30,449 | - 10,125 |
| Other comprehensive income | - 6,626 | - 7,083 | 457 | 0 |
| Non-controlling interests | - 1,411 | - 1,411 | 0 | 0 |
| 561,990 | 537,998 | 34,116 | - 10,125 | |
| Non-current liabilities | ||||
| Pension provisions | 384,235 | 377,591 | 6,644 | 0 |
| Other non-current provisions | 54,221 | 52,720 | 1,501 | 0 |
| Non-current liabilities to related parties | 114,089 | 114,089 | 0 | 0 |
| Non-current fi nancial liabilities | 314,016 | 284,618 | 29,398 | 0 |
| Deferred taxes | 13,419 | 16,507 | 9,357 | - 12,445 |
| 879,980 | 845,525 | 46,900 | - 12,445 | |
| Current liabilities | ||||
| Other current provisions | 25,569 | 21,364 | 4,205 | 0 |
| Trade liabilities | 65,850 | 61,942 | 3,908 | 0 |
| Current liabilities to related parties | 70,580 | 5,239 | 71,758 | - 6,417 |
| Current fi nancial liabilities | 138,314 | 133,567 | 4,747 | 0 |
| Other liabilities | 21,765 | 21,463 | 302 | 0 |
| Income tax liabilities | 4,458 | 4,458 | 160 | - 160 |
| 326,536 | 248,033 | 85,080 | - 6,577 | |
| 1,768,506 | 1,631,556 | 166,097 | - 29,147 |
annex to the notes
in € thousand; subgroup Port Logistics and subgroup Real Estate;
| Assets | 31.12.2011 Group |
31.12.2011 Port Logistics |
31.12.2011 Real Estate |
31.12.2011 Consolidation |
|---|---|---|---|---|
| Non-current assets | ||||
| Intangible assets | 81,490 | 81,481 | 9 | 0 |
| Property, plant and equipment | 985,340 | 963,148 | 5,285 | 16,907 |
| Investment property | 180,062 | 60,890 | 149,848 | - 30,676 |
| Associates accounted for using the equity method | 1,830 | 1,830 | 0 | 0 |
| Financial assets | 9,086 | 7,517 | 1,569 | 0 |
| Deferred taxes | 22,243 | 30,362 | 0 | - 8,119 |
| 1,280,051 | 1,145,228 | 156,711 | - 21,888 | |
| Current assets | ||||
| Inventories | 23,162 | 23,091 | 71 | 0 |
| Trade receivables | 151,771 | 151,023 | 748 | 0 |
| Receivables from related parties | 3,756 | 16,713 | 1,108 | - 14,065 |
| Other fi nancial receivables | 2,429 | 2,404 | 25 | 0 |
| Other assets | 16,776 | 16,626 | 150 | 0 |
| Income tax receivables | 3,591 | 3,465 | 283 | - 157 |
| Cash, cash equivalents and short-term deposits | 329,996 | 329,868 | 128 | 0 |
| 531,481 | 543,190 | 2,513 | - 14,222 | |
| 1,811,532 | 1,688,418 | 159,224 | - 36,110 | |
| Equity and liabilities | ||||
| Equity | ||||
| Subscribed capital | 72,680 | 69,975 | 2,705 | 0 |
| Capital reserve | 139,728 | 139,222 | 506 | 0 |
|---|---|---|---|---|
| Retained earnings | 385,124 | 367,967 | 27,515 | - 10,358 |
| Other comprehensive income | 42,872 | 41,615 | 1,257 | 0 |
| Non-controlling interests | 4,258 | 4,258 | 0 | 0 |
| 644,662 | 623,037 | 31,983 | - 10,358 | |
| Non-current liabilities | ||||
| Pension provisions | 313,729 | 308,243 | 5,486 | 0 |
| Other non-current provisions | 53,526 | 52,108 | 1,418 | 0 |
| Non-current liabilities to related parties | 93,587 | 93,587 | 0 | 0 |
| Non-current fi nancial liabilities | 403,184 | 380,690 | 22,494 | 0 |
| Deferred taxes | 13,557 | 16,814 | 8,273 | - 11,530 |
| 877,583 | 851,442 | 37,671 | - 11,530 | |
| Current liabilities | ||||
| Other current provisions | 28,759 | 25,719 | 3,040 | 0 |
| Trade liabilities | 72,003 | 69,755 | 2,248 | 0 |
| Current liabilities to related parties | 72,119 | 6,714 | 79,470 | - 14,065 |
| Current fi nancial liabilities | 88,332 | 83,828 | 4,504 | 0 |
| Other liabilities | 25,563 | 25,255 | 308 | 0 |
| Income tax liabilities | 2,511 | 2,668 | 0 | - 157 |
| 289,287 | 213,939 | 89,570 | - 14,222 | |
| 1,811,532 | 1,688,418 | 159,224 | - 36,110 |
| in € thousand | Note | 2012 | 2011 |
|---|---|---|---|
| 1. Cash fl ow from operating activities | |||
| Earnings before interest and taxes (EBIT) | 186,277 | 207,015 | |
| Depreciation, amortisation, impairment and reversals on non-fi nancial non-current assets |
15. | 121,233 | 126,427 |
| Decrease in provisions | - 23,034 | - 12,368 | |
| Gains/losses arising from the disposal of non-current assets | 1,625 | - 1,349 | |
| Change in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
1,335 | - 31,378 | |
| Change in trade payables and other liabilities not attributable to investing or fi nancing activities |
- 2,062 | 25,695 | |
| Interest received | 6,301 | 8,284 | |
| Interest paid | - 17,491 | - 20,637 | |
| Income tax paid | - 45,102 | - 36,378 | |
| Earnings from the acquisition/disposal of interests in consolidated companies | - 17,595 | 0 | |
| Exchange rate and other effects | - 999 | 758 | |
| Cash fl ow from operating activities | 210,488 | 266,069 | |
| 2. Cash fl ow from investing activities | |||
| Proceeds from disposal of intangible assets and property, plant and equipment | 1,267 | 5,188 | |
| Payments for investments in property, plant and equipment and investment property |
- 143,397 | - 124,748 | |
| Payments for investments in intangible assets | 22. | - 10,005 | - 7,403 |
| Proceeds from disposal of non-current fi nancial assets | 175 | 8 | |
| Payments for investments in non-current fi nancial assets | - 1,343 | - 1,016 | |
| Proceeds from the disposal of interests in consolidated companies and other business units (including funds sold) |
14,720 | 0 | |
| Payments for acquiring interests in consolidated companies and other business units (including funds purchased) |
- 2,309 | 0 | |
| Payments for short-term deposits | - 20,000 | - 10,000 | |
| Cash fl ow from investing activities | - 160,892 | - 137,971 | |
| 3. Cash fl ow from fi nancing activities | |||
| Proceeds from contributions to equity | 1,930 | 0 | |
| Payments for increasing interests in fully consolidated companies | - 91,000 | 0 | |
| Dividends paid to shareholders of the parent company | 21. | - 48,236 | - 41,732 |
| Dividends/settlement obligation paid to non-controlling interests | - 18,090 | - 36,423 | |
| Redemption of lease liabilities | 45. | - 4,998 | - 6,273 |
| Proceeds from the issuance of (fi nancial) loans | 28,560 | 65,733 | |
| Payments for the redemption of (fi nancial) loans | - 24,021 | - 27,175 | |
| Cash fl ow from fi nancing activities | - 155,855 | - 45,870 | |
| 4. Financial funds at the end of the period | |||
| Change in fi nancial funds (subtotals 1.– 3.) | - 106,259 | 82,228 | |
| Change in fi nancial funds due to exchange rates | 328 | - 1,107 | |
| Financial funds at the beginning of the period | 294,803 | 213,682 | |
| Financial funds at the end of the period | 43. | 188,872 | 294,803 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2012 Group |
2012 Port Logistics |
2012 Real Estate |
2012 Consolidation |
|---|---|---|---|---|
| 1. Cash fl ow from operating activities | ||||
| Earnings before interest and taxes (EBIT) | 186,277 | 173,133 | 12,837 | 307 |
| Depreciation, amortisation, impairment and reversals on non-fi nancial non-current assets |
121,233 | 117,355 | 4,185 | - 307 |
| Change in provisions | - 23,034 | - 23,923 | 889 | |
| Gains/losses arising from the disposal of non-current assets | 1,625 | 2,544 | - 919 | |
| Change in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
1,335 | 2,798 | - 1,715 | 252 |
| Change in trade payables and other liabilities not attributable to investing or fi nancing activities |
- 2,062 | - 4,126 | 2,316 | - 252 |
| Interest received | 6,301 | 6,338 | 74 | - 111 |
| Interest paid | - 17,491 | - 13,046 | - 4,556 | 111 |
| Income tax paid | - 45,102 | - 44,369 | - 733 | |
| Earnings from the acquisition/disposal of interests in consolidated companies |
- 17,595 | - 17,595 | 0 | |
| Exchange rate and other effects | - 999 | - 999 | 0 | |
| Cash fl ow from operating activities | 210,488 | 198,110 | 12,378 | 0 |
| 2. Cash fl ow from investing activities | ||||
| Proceeds from disposal of intangible assets and property, plant and equipment |
1,267 | - 640 | 1,907 | |
| Payments for investments in property, plant and equipment and investment property |
- 143,397 | - 133,114 | - 10,283 | |
| Payments for investments in intangible assets | - 10,005 | - 10,005 | 0 | |
| Proceeds from disposal of non-current fi nancial assets | 175 | 175 | 0 | |
| Payments for investments in non-current fi nancial assets | - 1,343 | - 1,343 | 0 | |
| Proceeds from the disposal of interests in consolidated companies and other business units (including funds sold) |
14,720 | 14,720 | 0 | |
| Payments for acquiring interests in consolidated companies and other business units (including funds purchased) |
- 2,309 | - 2,309 | 0 | |
| Payments for short-term deposits | - 20,000 | - 20,000 | 0 | |
| Cash fl ow from investing activities | - 160,892 | - 152,516 | - 8,376 | 0 |
| 3. Cash fl ow from fi nancing activities | ||||
| Proceeds from contributions to equity | 1,930 | 1,930 | 0 | |
| Payments for increasing interests in fully consolidated companies | - 91,000 | - 91,000 | 0 | |
| Dividends paid to shareholders of the parent company | - 48,236 | - 45,531 | - 2,705 | |
| Dividends/settlement obligation paid to non-controlling interests | - 18,090 | - 18,090 | 0 | |
| Redemption of lease liabilities | - 4,998 | - 4,998 | 0 | |
| Proceeds from the issuance of (fi nancial) loans | 28,560 | 18,560 | 10,000 | |
| Payments for the redemption of (fi nancial) loans | - 24,021 | - 21,454 | - 2,567 | |
| Cash fl ow from fi nancing activities | - 155,855 | - 160,583 | 4,728 | 0 |
| 4. Financial funds at the end of the period | ||||
| Change in fi nancial funds (subtotals 1. – 3.) | - 106,259 | - 114,989 | 8,730 | |
| Change in fi nancial funds due to exchange rates | 328 | 328 | 0 | |
| Financial funds at the beginning of the period | 294,803 | 303,575 | - 8,772 | |
| Financial funds at the end of the period | 188,872 | 188,914 | - 42 | 0 |
| in € thousand; subgroup Port Logistics and subgroup Real Estate; annex to the notes |
2011 Group |
2011 Port Logistics |
2011 Real Estate |
2011 Consolidation |
|---|---|---|---|---|
| 1. Cash fl ow from operating activities | ||||
| Earnings before interest and taxes (EBIT) | 207,015 | 194,786 | 11,922 | 307 |
| Depreciation, amortisation, impairment and reversals on non-fi nancial non-current assets |
126,427 | 122,472 | 4,262 | - 307 |
| Change in provisions | - 12,368 | - 13,165 | 797 | |
| Gains/losses arising from the disposal of non-current assets | - 1,349 | - 2,139 | 790 | |
| Change in inventories, trade receivables and other assets not attributable to investing or fi nancing activities |
- 31,378 | - 30,266 | - 1,491 | 379 |
| Change in trade payables and other liabilities not attributable to investing or fi nancing activities |
25,695 | 26,845 | - 771 | - 379 |
| Interest received | 8,284 | 8,076 | 331 | - 123 |
| Interest paid | - 20,637 | - 16,177 | - 4,583 | 123 |
| Income tax paid | - 36,378 | - 30,798 | - 5,580 | |
| Exchange rate and other effects | 758 | 758 | 0 | |
| Cash fl ow from operating activities | 266,069 | 260,392 | 5,677 | 0 |
| 2. Cash fl ow from investing activities | ||||
| Proceeds from disposal of intangible assets and property, plant and equipment |
5,188 | 5,181 | 7 | |
| Payments for investments in property, plant and equipment and investment property |
- 124,748 | - 120,307 | - 4,441 | |
| Payments for investments in intangible assets | - 7,403 | - 7,402 | - 1 | |
| Proceeds from disposal of non-current fi nancial assets | 8 | 8 | 0 | |
| Payments for investments in non-current fi nancial assets | - 1,016 | - 1,016 | 0 | |
| Payments for short-term deposits | - 10,000 | - 10,000 | 0 | |
| Cash fl ow from investing activities | - 137,971 | - 133,536 | - 4,435 | 0 |
| 3. Cash fl ow from fi nancing activities | ||||
| Dividends paid to shareholders of the parent company | - 41,732 | - 38,487 | - 3,245 | |
| Dividends/settlement obligationto non-controlling interests | - 36,423 | - 36,423 | 0 | |
| Redemption of lease liabilities | - 6,273 | - 6,273 | 0 | |
| Proceeds from the issuance of (fi nancial) loans | 65,733 | 65,733 | 0 | |
| Payments for the redemption of (fi nancial) loans | - 27,175 | - 24,733 | - 2,442 | |
| Cash fl ow from fi nancing activities | - 45,870 | - 40,183 | - 5,687 | 0 |
| 4. Financial funds at the end of the period | ||||
| Change in fi nancial funds (subtotals 1. – 3.) | 82,228 | 86,673 | - 4,445 | 0 |
| Change in fi nancial funds due to exchange rates | - 1,107 | - 1,107 | 0 | |
| Financial funds at the beginning of the period | 213,682 | 218,009 | - 4,327 | |
| Financial funds at the end of the period | 294,803 | 303,575 | - 8,772 | 0 |
| annex to the notes | Subgroup Port Logistics | ||
|---|---|---|---|
| 2012 | Container | Intermodal | Logistics |
| Segment revenue | |||
| Segment revenue from non-affi liated third parties | 695,137 | 297,977 | 84,357 |
| Inter-segment revenue | 2,325 | 1,738 | 7,551 |
| Total segment revenue | 697,462 | 299,715 | 91,908 |
| Earnings | |||
| EBITDA | 234,927 | 59,475 | 8,121 |
| EBITDA margin | 33.7 % | 19.8 % | 8.8 % |
| EBIT | 146,159 | 41,337 | 4,367 |
| EBIT margin | 21.0 % | 13.8 % | 4.8 % |
| Segment assets | 933,102 | 284,579 | 53,784 |
| Other segment information | |||
| Investments | |||
| Property, plant and equipment and investment property |
123,975 | 45,758 | 3,187 |
| Intangible assets | 8,434 | 1,144 | 79 |
| Depreciation of property, plant and equipment and investment property |
80,729 | 17,720 | 3,555 |
| of which impairment | |||
| Amortisation of intangible assets | 8,038 | 419 | 198 |
| Non-cash items | 11,733 | - 6,216 | 2,526 |
| Container throughput in thousand TEU | 7,183 | ||
| Container transport1 in thousand TEU |
1,213 | ||
| 2011 | |||
| Segment revenue | |||
| Segment revenue from non-affi liated third parties | 707,643 | 355,827 | 108,541 |
| Inter-segment revenue | 5,234 | 1,799 | 18,119 |
| Total segment revenue | 712,877 | 357,626 | 126,660 |
| Earnings | |||
| EBITDA | 282,713 | 43,109 | 11,989 |
| EBITDA margin | 39.7 % | 12.1 % | 9.5 % |
| EBIT | 195,515 | 24,600 | - 1,026 |
| EBIT margin | 27.4 % | 6.9 % | - 0.8 % |
| Segment assets | 904,297 | 266,621 | 92,290 |
| Other segment information | |||
| Investments | |||
| Property, plant and equipment and investment property |
81,578 | 31,530 | 3,606 |
| Intangible assets | 6,213 | 709 | 250 |
| Depreciation of property, plant and equipment and investment property |
80,586 | 15,276 | 12,784 |
| of which impairment | 5,758 | ||
| Amortisation of intangible assets | 6,612 | 3,233 | 231 |
| of which impairment | 2,870 | 5 | |
| Non-cash items | 14,799 | 1,304 | 2,662 |
| Container throughput in thousand TEU | 7,087 | ||
| Container transport1 in thousand TEU |
1,887 |
The transport volume was fully consolidated.
| Group | Consolidation and reconciliation with Group |
Total | Subgroup Real Estate | |
|---|---|---|---|---|
| Real Estate | Holding/Other | |||
| 1,128,542 | 0 | 1,128,542 | 29,825 | 21,246 |
| 0 | - 122,996 | 122,996 | 2,583 | 108,799 |
| 1,251,538 | 32,408 | 130,045 | ||
| 307,510 | - 195 | 307,705 | 17,090 | - 11,908 |
| 52.7 % | - 9.2 % | |||
| 186,277 | 900 | 185,377 | 12,837 | - 19,323 |
| 39.6 % | - 14.9 % | |||
| 1,768,506 | 130,675 | 1,637,830 | 165,639 | 200,727 |
| 186,515 | 0 | 186,515 | 10,283 | 3,313 |
| 10,005 | - 229 | 10,234 | 0 | 577 |
| 112,601 | - 419 | 113,020 | 4,246 | 6,769 |
| 1,090 | 0 | 1,090 | 1,090 | |
| 8,632 | - 675 | 9,308 | 7 | 646 |
| 25,409 | 37 | 25,373 | 2,321 | 15,008 |
| 1,217,272 | 0 | 1,217,272 | 29,151 | 16,110 |
| 0 | - 137,076 | 137,076 | 2,526 | 109,398 |
| 1,354,348 | 31,677 | 125,508 | ||
| 333,442 | - 1,464 | 334,906 | 16,184 51.1 % |
- 19,089 - 15.2 % |
| 207,015 | 2,490 | 204,525 | 11,922 | - 26,486 |
| 37.6 % | - 21.1 % | |||
| 1,811,532 | 149,829 | 1,661,703 | 158,813 | 239,682 |
| 121,346 | - 1,244 | 122,590 | 4,441 | 1,435 |
| 7,403 | - 629 | 8,032 | 1 | 859 |
| 116,641 | - 3,070 | 119,711 | 4,251 | 6,814 |
| 3,778 | - 1,980 | 5,758 | ||
| 9,786 | - 884 | 10,670 | 11 | 583 |
| 2,875 | 0 | 2,875 | ||
| 36,537 | 102 | 36,435 | 1,907 | 15,763 |
in € thousand
| Parent company | |||||||
|---|---|---|---|---|---|---|---|
| Subscribed capital | Capital reserve | Retained consolidated earnings |
Reserve for foreign currency translation |
||||
| A division | S division | A division | S division | ||||
| Balance as of 31.12.2010 | 69,975 | 2,705 | 139,222 | 506 | 337,337 | - 15,046 | |
| Dividends | - 41,732 | ||||||
| Total comprehensive income | 89,282 | 1,499 | |||||
| Acquisition/disposal of non-controlling interests in consolidated entities |
|||||||
| Other changes | 237 | ||||||
| Balance as of 31.12.2011 | 69,975 | 2,705 | 139,222 | 506 | 385,124 | - 13,547 | |
| Balance as of 31.12.2011 | 69,975 | 2,705 | 139,222 | 506 | 385,124 | - 13,547 | |
| Dividends | - 48,236 | ||||||
| Contributions to equity | 74 | 1,856 | |||||
| Change of consolidation method | |||||||
| Acquisition/disposal of non-controlling interests in consolidated entities |
- 53,633 | ||||||
| Total comprehensive income | 72,435 | - 1,420 | |||||
| Other changes | |||||||
| Balance as of 31.12.2012 | 70,048 | 2,705 | 141,078 | 506 | 355,690 | - 14,967 |
| Total consolidated equity |
Non-controlling interests |
Parent com pany interests |
||||
|---|---|---|---|---|---|---|
| Other comprehensive income | ||||||
| Other | Deferred taxes on changes recognised directly in equity |
Actuarial gains/losses |
Cash fl ow hedges |
|||
| 567,002 | - 12,257 | 579,260 | 11,585 | - 15,698 | 49,700 | - 1,026 |
| - 54,186 | - 12,454 | - 41,732 | ||||
| 132,087 | 29,448 | 102,639 | - 88 | - 5,745 | 17,982 | - 292 |
| - 243 | - 243 | 0 | ||||
| 1 | - 236 | 237 | 1 | |||
| 644,662 | 4,258 | 640,404 | 11,498 | - 21,443 | 67,682 | - 1,318 |
| 644,662 | 4,258 | 640,404 | 11,498 | - 21,443 | 67,682 | - 1,318 |
| - 51,890 | - 3,654 | - 48,236 | ||||
| 1,930 | 0 | 1,930 | ||||
| - 3,673 | - 4,029 | 355 | - 169 | - 18 | 543 | |
| - 91,000 | - 37,367 | - 53,633 | ||||
| 61,881 | 39,317 | 22,564 | 135 | 23,074 | - 71,617 | - 43 |
| 82 | 65 | 17 | - 81 | 14 | 85 | |
| 561,990 | - 1,411 | 563,401 | 11,552 | 1,475 | - 3,868 | - 818 |
in € thousand; annex to the notes
| Parent company | |||||
|---|---|---|---|---|---|
| Subscribed capital | Capital reserve | Retained consolidated earnings |
Reserve for foreign currency translation |
||
| Balance as of 31.12.2010 | 69,975 | 139,222 | 322,200 | - 15,046 | |
| Dividends | - 38,487 | ||||
| Total comprehensive income subgroup | 84,017 | 1,499 | |||
| Acquisition/disposal of non-controlling interests in consolidated entities |
|||||
| Other changes | 237 | ||||
| Balance as of 31.12.2011 | 69,975 | 139,222 | 367,967 | - 13,547 | |
| Balance as of 31.12.2011 | 69,975 | 139,222 | 367,967 | - 13,547 | |
| Dividends | - 45,532 | ||||
| Contributions to equity | 74 | 1,856 | |||
| Change of consolidation method | |||||
| Acquisition/disposal of non-controlling interests in consolidated entities |
- 53,633 | ||||
| Total comprehensive income subgroup | 66,564 | - 1,420 | |||
| Other changes | |||||
| Balance as of 31.12.2012 | 70,048 | 141,078 | 335,366 | - 14,967 |
in € thousand; annex to the notes
| Balance as of 31.12.2010 | |
|---|---|
| Dividends | |
| Total comprehensive income subgroup | |
| Balance as of 31.12.2011 | |
| Plus income statement consolidation effect | |
| Less balance sheet consolidation effect | |
| Total effects of consolidation | |
| Balance as of 31.12.2011 | |
| Balance as of 31.12.2011 | |
| Dividends | |
| Total comprehensive income subgroup | |
| Balance as of 31.12.2012 | |
| Plus income statement consolidation effect | |
| Less balance sheet consolidation effect | |
| Total effects of consolidation | |
| Balance as of 31.12.2012 | |
| Total subgroup consolidated equity |
Non-controlling interests |
Parent com pany interests |
||||
|---|---|---|---|---|---|---|
| Other comprehensive income | ||||||
| Other | Deferred taxes on changes recognised directly in equity |
Actuarial gains/losses |
Cash fl ow hedges |
|||
| 547,552 | - 12,257 | 559,810 | 11,585 | - 15,174 | 48,074 | - 1,026 |
| - 50,941 | - 12,454 | - 38,487 | ||||
| 126,667 | 29,448 | 97,219 | - 88 | - 5,671 | 17,753 | - 292 |
| - 243 | - 243 | 0 | ||||
| 1 | - 236 | 237 | 1 | |||
| 623,037 | 4,258 | 618,779 | 11,498 | - 20,845 | 65,827 | - 1,318 |
| 623,037 | 4,258 | 618,779 | 11,498 | - 20,845 | 65,827 | - 1,318 |
| - 49,186 | - 3,654 | - 45,532 | ||||
| 1,930 | 0 | 1,930 | ||||
| - 3,673 | - 4,029 | 355 | - 169 | - 18 | 543 | |
| - 91,000 | - 37,367 | - 53,633 | ||||
| 56,809 | 39,317 | 17,492 | 135 | 22,694 | - 70,437 | - 43 |
| 82 | 65 | 17 | - 81 | 14 | 85 | |
| 537,998 | - 1,411 | 539,409 | 11,552 | 1,693 | - 4,543 | - 818 |
| Total subgroup consolidated equity |
Other comprehensive income | ||||
|---|---|---|---|---|---|
| Deferred taxes on changes recognised directly in equity |
Actuarial gains/losses |
Retained consolidated earnings |
Capital reserve | Subscribed capital |
|
| 30,041 | - 524 | 1,626 | 25,728 | 506 | 2,705 |
| - 3,245 | - 3,245 | ||||
| 5,188 | - 73 | 228 | 5,033 | ||
| 31,983 | - 597 | 1,854 | 27,515 | 506 | 2,705 |
| 232 | 232 | ||||
| - 10,590 | - 10,590 | ||||
| - 10,358 | - 10,358 | ||||
| 21,625 | - 597 | 1,854 | 17,157 | 506 | 2,705 |
| 31,983 | - 597 | 1,854 | 27,515 | 506 | 2,705 |
| - 2,705 | - 2,705 | ||||
| 4,837 | 380 | - 1,179 | 5,638 | ||
| 34,117 | - 217 | 675 | 30,449 | 506 | 2,705 |
| 233 | 233 | ||||
| - 10,358 | - 10,358 | ||||
| - 10,125 | - 10,125 | ||||
| 23,992 | - 217 | 675 | 20,324 | 506 | 2,705 |
The Group's parent company is Hamburger Hafen und Logistik Aktiengesellschaft, Bei St. Annen 1, 20457 Hamburg (in the following, HHLA), registered in the Hamburg Commercial Register under HRB 1902. The holding company above the HHLA Group is HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg.
Since 1 January 2007, the HHLA Group has consisted of the Port Logistics subgroup (A division) and the Real Estate subgroup (S division). That part of the Group which deals with the property in Hamburg's Speicherstadt historical warehouse district and Fischmarkt Hamburg-Altona GmbH is allocated to the subgroup Real Estate (S division). All other parts of the company are allocated together to the subgroup Port Logistics (A division). Individual fi nancial statements are prepared for each division to determine the shareholders' dividend entitlements; these, in line with the company's articles of association, form part of the Notes to the fi nancial statements of the parent company.
When the shareholders' dividend entitlements are being determined, the expenses and income of HHLA which cannot be attributed directly to one subgroup are divided between the two subgroups according to their shares of revenue. All transfer pricing for services between the two subgroups takes place on an arm's length basis. Interest must be paid at market rates on liquid funds exchanged between the two subgroups. A notional taxable profi t or loss is calculated for each subgroup to allocate the taxes paid. The resulting notional tax payment represents the amount of tax which would have been paid had each of the subgroups been separately liable for tax.
To illustrate the net assets, fi nancial and earnings position of the subgroups, the annex to these Notes contains the balance sheet, income statement, statement of comprehensive income, statement of changes in equity and cash fl ow statement for each subgroup.
HHLA's consolidated fi nancial statements for the 2012 fi nancial year were prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC). The provisions of Directive (EC) No. 1606/2002 of the European Parliament and of the Council dating from 19 July 2002 on the application of international accounting standards, together with Section 315a (1) of the German Commercial Code (HGB) and additional commercial law regulations, have been taken into account. The IFRS requirements which apply in the European Union have been met in full and result in a true and fair view of the fi nancial and earnings position of the HHLA Group.
For the most part, the accounting and valuation policies, notes and disclosures about the consolidated fi nancial statements for the 2012 fi nancial year are based on the same accounting and valuation principles used for the 2011 consolidated fi nancial statements. Exceptions are the effects of new IFRS accounting standards stated in Note 5. Use of the latter became mandatory for the Group on 1 January 2012. The accounting and valuation principles applied are explained in Note 5.
The fi nancial year as reported by HHLA and its consolidated subsidiaries is the calendar year. The balance sheet date used by the parent company is the reporting date for the consolidated fi nancial statements. The type-of-expenditure format has been used for the income statement. The consolidated fi nancial statements and the disclosures in the Notes have been prepared in euros. Unless other wise stated, all amounts are in thousands of euros (€ thousand). Due to the use of rounding procedures it is possible that some fi gures do not add up to the stated sums.
These HHLA consolidated fi nancial statements for the fi nancial year ending 31 December 2012 were approved by the Executive Board on 5 March 2013 for presentation to the Supervisory Board. It is the Supervisory Board's responsibility to examine the consolidated fi nancial statements and to state whether or not it approves them. The consolidated fi nancial statements are due to be published on 27 March 2013.
Information concerning the segments in which the HHLA Group operates is provided in Note 44, "Notes to the Segment Report".
The consolidated fi nancial statements include the fi nancial statements of HHLA and its subsidiaries as of 31 December of each fi nancial year. The assets and liabilities of the domestic and foreign companies consolidated in full, pro rata or using the equity method are recognised in accordance with the uniform accounting principles applied in the HHLA Group.
Capital is consolidated at the time of acquisition by setting off the acquisition costs of the investment against the pro rata fair values of the assets acquired and the liabilities and contingent liabilities assumed. Previously unreported intangible assets which can be included in the accounts under IFRS 3 (revised) in conjunction with IAS 38, and contingent liabilities are recognised at fair value. In the course of subsequent consolidations, the previously unrecognised hidden reserves and losses realised by this procedure are retained at the same carrying amount, amortised or reversed, depending on the treatment of the equivalent assets and liabilities.
Any positive difference arising in the course of this initial consolidation is capitalised as goodwill and subjected to an annual impairment test. Following a critical assessment, any negative difference from setting off the acquisition costs against the pro rata fair value of assets, liabilities and contingent liabilities at the time of acquisition is posted to profi t and loss. For a detailed explanation of the impairment testing procedure used, please refer to Notes 6 and 7.
Equity interests held by third parties outside the Group are shown in the balance sheet under the item non-controlling interests within equity capital.
The acquisition of additional non-controlling interests in consolidated companies is treated as an equity transaction in line with the entity concept and therefore set off directly against equity.
Gains or losses from the disposal of non-controlling interests and/ or minority interests in consolidated companies are likewise recognised directly in equity without effect on profi t and loss insofar as the transaction does not lead to a loss of control. In the case of a loss of control, the remaining interests are measured at fair value or, if applicable, using the equity method.
The effects of intra-Group transactions are eliminated. Receivables and liabilities between consolidated companies are netted out (consolidation of liabilities). The values of goods and services sold within the Group are adjusted for unrealised inter-company profi ts (elimination of inter-company profi ts); these assets are therefore recognised at their historical cost to the Group. Intra-Group income is set off against the equivalent expenses (consolidation of income and expenses). Deferred taxes are recognised on temporary differences from consolidation in line with IAS 12.
All signifi cant companies which HHLA can control directly or indirectly are included in the consolidated fi nancial statements. Control as defi ned by IAS 27 is the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities. The company is consolidated from the time when control can be exercised. It is no longer consolidated when control is no longer exercised by the parent company.
The group of consolidated companies at HHLA is made up as follows:
| Domestic | Foreign | Total | |
|---|---|---|---|
| HHLA AG and fully consolidated companies |
|||
| 1. January 2012 | 27 | 6 | 33 |
| Additions | 0 | 1 | 1 |
| Reclassifi cation addition | 1 | 1 | 2 |
| Reclassifi cation disposal | - 2 | 0 | - 2 |
| Mergers | - 1 | 0 | - 1 |
| 31. December 2012 | 25 | 8 | 33 |
| Companies consolidated pro rata | |||
| 1. January 2012 | 6 | 1 | 7 |
| Disposals | - 1 | 0 | - 1 |
| Reclassifi cation disposal | - 1 | - 1 | - 2 |
| 31. December 2012 | 4 | 0 | 4 |
| Companies reported using the equity method |
|||
| 1. January 2012 | 1 | 0 | 1 |
| Reclassifi cation addition | 2 | 0 | 2 |
| 31. December 2012 | 3 | 0 | 3 |
| Total | 32 | 8 | 40 |
A complete list of the Group's equity investments in accordance with Section 313 (4) of the German Commercial Code (HGB) can be found in Note 48.
The Group has interests in joint ventures in the form of jointly managed companies. A joint venture is defi ned as a contractual agreement between two or more parties to carry on an economic activity which is subject to joint control. The partnership or consortium agreements governing joint ventures contain provisions which ensure joint control.
HHLA recognises its interests in joint ventures using the proportionate consolidation method. The Group combines its share of the joint ventures' assets, liabilities, income and expenses with the equivalent items in its consolidated fi nancial statements. The fi nancial statements of the joint ventures are prepared using uniform accounting and valuation principles and for the same reporting year as the consolidated fi nancial statements.
If capital contributions are made to the joint venture or assets are sold to it, the economic substance of the transaction is taken into account when determining the reported share of the gains or losses arising from the transaction. If the Group buys assets from a joint venture, the Group recognises its share of the joint venture's profi t on the transaction only when it sells the assets on to an independent third party.
The joint venture is included in the Group's consolidated fi nancial statements using the proportionate consolidation method until such time as joint control of the entity by the Group ends.
The share of assets, liabilities, income and expenses attributable to the Group from joint ventures is as follows:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Non-current assets | 15,705 | 17,742 |
| Current assets | 4,401 | 25,094 |
| Total assets | 20,106 | 42,836 |
| Non-current liabilities | 8,631 | 10,261 |
| Current liabilities | 7,064 | 31,727 |
| Total liabilities | 15,695 | 41,988 |
| in € thousand | 2012 | 2011 |
|---|---|---|
| Income | 62,212 | 158,182 |
| Expenses | - 53,046 | - 157,536 |
| Total | 9,166 | 646 |
Companies designated as associated companies are those where the shareholder has a material infl uence. At the same time, it is neither a subsidiary nor an interest in a joint venture. A material infl uence is assumed when it is possible to be involved in the asso ciated company's fi nancial and commercial decisions without exercising a controlling infl uence. This is generally the case when 20 to 50 % of the voting rights are held, either directly or indirectly. Shares in associated companies are reported in these fi nancial statements using the equity method. With the equity method, the shares in associated companies are fi rst stated at acquisition cost. The shares' carrying amount then increases or decreases in line with the shareholder's interest in the associated company's results. The shareholder's interest in the associated company's results is reported in its earnings fi gures. Instead of being subjected to scheduled amortisation, any goodwill recognised within the carrying amount of the investment when it is reported in the balance sheet for the fi rst time undergoes an impairment test for the entire carrying amount of the investment if there are any indications of possible impairment.
As from the acquisition date, HHLA's interest in the associated company's results is recorded in the income statement, while its interest in changes in equity is recorded directly in equity. These cumulative changes affect the carrying amount of the interest in the associated company. As soon as HHLA's share in the company's losses exceeds the carrying amount of the investment, however, HHLA records no further shares in the losses unless HHLA has entered into obligations to that effect or has made payments for the associated company.
Signifi cant results from transactions between HHLA and the associated companies are eliminated in proportion to the interests held in the associated companies.
The following overview shows key items from the balance sheet and income statement of the companies accounted for using the equity method in relation to the interest held:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Assets | 24,429 | 4,166 |
| Liabilities | 19,443 | 2,448 |
| in € thousand | 2012 | 2011 |
|---|---|---|
| Revenue | 17,210 | 4,241 |
| Earnings from associates for using | ||
| the equity method | - 4,026 | 335 |
HHLA Frucht- und Kühl-Zentrum GmbH, Hamburg (HHLA Frucht), and Ulrich Stein Gesellschaft mit beschränkter Haftung, Hamburg (STEIN), were previously consolidated in full, but since 1 January 2012 have been included in the consolidated fi nancial statements using the equity method. The change as of 1 January 2012 is based on the loss of control of these subsidiaries in line with contractual provisions. The change in the consolidation method had no material impact on these consolidated fi nancial statements.
In the reporting year, by means of sale and transfer contracts signed on 28 March 2012, HHLA acquired Deutsche Bahn's stake in the intermodal operators Polzug Intermodal GmbH, Hamburg (Polzug) and METRANS a.s., Prague (METRANS).
The equity interest in Polzug, which was previously consolidated on a pro rata basis, was successively increased from 33.3 % to 74.5 % with effect from 30 May 2012 by means of a capital increase and a share purchase. Payments of € 38 thousand to the company's nominal capital and € 762 thousand to the capital reserve initially increased the stake from 33.3 % to 49.0 %. The purchase price for increasing the equity interest from 49.0 % to 74.5 % was € 1. By purchasing the shares, HHLA acquired control of the company. This resulted in the full consolidation of the company for the fi rst time as of 30 June 2012. A negative difference of € 971 thousand resulted from offsetting the purchase price for the equity interest against the assets acquired and liabilities assumed and was recognised in profi t or loss.
When the conditions precedent stipulated in the sale and transfer agreement dated 10 September 2012 were met in October 2012, HHLA Intermodal GmbH, Hamburg, acquired the remaining 25.5 % share in Polzug from PKP CARGO S.A., Warsaw, Poland, for a purchase price of € 1 and thereby increased its stake in Polzug to 100 %. The difference arising from this was accounted for as an equity transaction in line with IAS 27.
HHLA's equity interest in METRANS, which it controls, was increased by 35.0 % to 86.5 % in total as of 11 May 2012 for € 91.0 million. The additional share purchase was accounted for as an equity transaction in line with IAS 27.
In the reporting year, HHLA signed sale and transfer contracts on 28 March 2012 for the sale of its 50 % stake in TFG Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH & Co. KG, Frankfurt am Main (TFG), to Deutsche Bahn for a price of € 9,950 thousand with effect from 15 June 2012. The equity interest had previously been consolidated pro rata.
The following table shows the effects of the deconsolidation following the sale:
| in € thousand | TFG Transfracht |
|---|---|
| Non-current assets | 737 |
| Current assets | 16,781 |
| Cash and cash eqivalents | 23 |
| Assets | 17,541 |
| Current liabilities and provisions | 24,215 |
| Liabilities | 24,215 |
| Net assets | - 6,674 |
| Total compensation received | 9,950 |
| Deconsolidation gain (-)/loss (+) | - 16,624 |
In August 2012, UNIKAI Hafenbetrieb GmbH, Hamburg, was retroactively merged with HHLA Container Terminals GmbH, Hamburg, as of 1 January 2012. This had no effect on the present consolidated fi nancial statements. The merger was entered in the commercial register on 29 August 2012.
Following an increase in the number of shares owned in Polzug by HHLA, the company POLZUG INTERMODAL LLC, Poti (Georgia), in which Polzug has a 75.0 % equity interest, was included in the consolidated fi nancial statements of HHLA for the fi rst time.
There were no other changes in the group of consolidated companies in the year under review.
Monetary assets and liabilities in separate fi nancial statements for the consolidated companies which are prepared in a foreign currency are converted to local currency at the rate applicable on the balance sheet date. The resulting currency differences are recognised in the result for the period. Exceptions are currency differences from loans in foreign currencies used to secure a net investment in a foreign business. These are recognised directly in equity until the net investment is sold and only affect the result for the period on disposal of the net investment.
Non-monetary items held at historical cost in a foreign currency are translated at the applicable rate on the transaction date. Nonmonetary items held at fair value in a foreign currency are translated at the rate applicable on the date fair value was measured.
Exchange rate gains and losses recognised in the income statement on foreign currency items resulted in a profi t of € 50 thousand in the fi nancial year (previous year: a loss of € 1,288 thousand).
The concept of functional currency according to IAS 21 is applied when translating all annual fi nancial statements of foreign affi liates prepared in a foreign currency. As the subsidiaries in question are generally independent in terms of their fi nancial, economic and organisational activities, the functional currency is the respective national currency. As of the balance sheet date, the assets and liabilities of these subsidiaries are converted to euros at the rate prevailing on the reporting date. Income and expenses are translated at the weighted average rate for the fi nancial year. Equity components are converted at their respective historical rates. Any translation differences are recognised as a separate component of equity without effect on profi t and loss. If Group companies leave the group of consolidated companies, the associated translation difference is reversed through profi t and loss.
HHLA did not apply the regulations of IAS 29 because no transactions were conducted in hyperinfl ationary economies.
The main exchange rates used for currency translation are shown in the following table:
| = 1 euro | Spot rate on | Average annual rate = 1 euro |
|||
|---|---|---|---|---|---|
| Currency | ISO Code |
31.12.2012 | 31.12.2011 | 2012 | 2011 |
| Czech crown | CZK | 25.151 | 25.787 | 25.168 | 24.637 |
| Polish zloty | PLN | 4.074 | 4.458 | 4.191 | 4.124 |
| Ukrainian hryvnia | UAH | 10.537 | 10.298 | 10.307 | 11.088 |
| Georgian lari | GEL | 2.183 | 2.161 | 2.139 | 2.355 |
The following revised and new IASB/IFRIC standards and interpretations were mandatory for the fi rst time in the fi nancial year under review:
| Amendments to IAS 12 | Income Taxes – Deferred Tax: Recovery of Underlying Assets |
|---|---|
| Amendments to IFRS 7 | Financial Instruments: Disclosures |
Application of the following amendments to standards is voluntary for the fi nancial year:
| IAS 1 (amended in 2011) | Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income |
|---|---|
| IAS 19 (amended in 2011) | Employee Benefi ts |
The following standards have been recognised by the EU but are only mandatory as of 1 January 2014, as opposed to the IASB standards (1 January 2013):
| IAS 27 (amended in 2011) | Separate Financial Statements |
|---|---|
| IAS 28 (amended in 2011) | Investments in Associates and Joint Ventures |
| IFRS 10 | Consolidated Financial Statements |
| IFRS 11 | Joint Arrangements |
| IFRS 12 | Disclosure of Interests in Other Entities |
The following standards, amendments to standards and interpretations have already been recognised by the European Union. However, they do not have to be applied until some point in the future:
| Amendments to IAS 32 | Financial Instruments: Offsetting Financial Assets and Financial Liabilities |
|---|---|
| Amendments to IFRS 7 | Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities |
| IFRS 13 | Fair Value Measurement |
The following IASB standards and interpretations have not yet been adopted by the EU and have not been applied:
| Improvements to IFRS (May 2012) |
IFRS 1, IAS 1, 16, 32, 34 |
|---|---|
| IFRS 9 | Financial Instruments |
| Amendments to IFRS 9 and IFRS 7 |
Mandatory Effective Date and Transition Disclosures |
| IFRS 10, IFRS 11 and IFRS 12 |
Transition Guidance |
The amendments had the following specifi c effects:
The amendments make it clear that existing temporary tax differences on investment property held at fair value are recovered or settled by means of disposal and no longer through use. The new regulation is relevant to countries in which the use and disposal of such assets are taxed differently. As a result of the amendments, SIC 21 Income Taxes – Recovery of Revalued Non-depreciable Assets – no longer applies to investment property carried at fair value. The other guidelines were integrated into IAS 12, and SIC 21 was subsequently withdrawn. These amendments to IAS 12 had no impact on HHLA's consolidated fi nancial statements.
This standard was published in October 2010 and contains amendments to the way in which transfers of fi nancial assets are disclosed. These alterations offer those who read fi nancial reports greater insight into transactions for the purpose of transferring assets (such as securitisation). The amendments had no impact on HHLA's consolidated fi nancial statements.
The alterations published in June 2011 state that the IFRS income statement formally consists solely of a statement of profi t or loss and other comprehensive income. The income statement must be split into two sections: profi t or loss and other comprehensive income (OCI). In addition to this, reporters must disclose the extent to which the income and expenditure listed under OCI is subsequently reclassifi able to profi t and loss. Companies will still have the option of listing items within OCI before or after tax. If fi gures are shown before tax, a distinction must be made between reclassifi able and non-reclassifi able items. The amendments are mandatory for fi nancial years which begin on or after 1 July 2012. Early adoption is permitted. Applying the amendments will not have a material impact on HHLA's consolidated fi nancial statements in the future.
In June 2011, the IASB published amendments to IAS 19. These stipulate that unexpected fl uctuations in pension obligations and any plan assets – known as actuarial gains and losses – must be recorded directly in other comprehensive income (OCI). The alternative method previously permitted, i.e. deferral using the corridor approach, was eliminated. Moreover, income resulting from the interest expected to be received on plan assets is only recognised up to the discount rate. Other amendments affect the presentation and allocation of changes in net liabilities/assets arising from defi ned benefi t plans and additional disclosure requirements concerning the characteristics and risks of such defi ned benefi t plans. The new IAS 19 is mandatory for fi nancial years which begin on or after 1 January 2013. Early adoption is permitted. The Notes to HHLA's consolidated fi nancial statements will include additional information as a result of these amendments.
IAS 27 (amended in 2008) was revised in the course of publishing the IFRS 10, 11 and 12 standards. IFRS 10 replaces the portion of the previous IAS 27 (amended in 2008) which deals with
consolidation. IAS 27 (amended in 2011) now deals solely with separate fi nancial statements. The amended standard applies to accounting for investments in subsidiaries, joint ventures or associates in separate fi nancial statements produced voluntarily or required under IFRS. Shares are either valued at acquisition cost or in conjunction with IFRS 9. IASB stipulates that the amended IAS 27 is mandatory for fi nancial years which begin on or after 1 January 2013. Under EU law, the standard must be adopted by 1 January 2014. Early adoption is permitted. HHLA will not adopt this standard prematurely. This amendment has no effect on HHLA's consolidated fi nancial statements.
When IFRS 11 Joint Arrangements was altered in May 2011, IAS 28 was amended at the same time. IAS 28 (amended in 2011) explicitly includes joint ventures in its current requirement to use the equity method exclusively. The regulations on material infl uence remained unchanged. Now, if an associate becomes a joint venture or vice versa, it is still reported using the equity method and no revaluation is conducted. IASB stipulates that IAS 28 is mandatory for fi nancial years which begin on or after 1 January 2013. The standard will be mandatory in the EU as of 1 January 2014. Early adoption is permitted. HHLA will not adopt this standard prematurely. This amendment is not expected to have a major impact on HHLA's future consolidated fi nancial statements.
IFRS 10 Consolidated Financial Statements was published in May 2011 and supersedes the guidelines on control and consolidation in IAS 27 Consolidated and Separate Financial Statements and SIC 12 Consolidation – Special Purpose Entities. Due to the new defi nition of control in IFRS 10, all companies are subject to the same criteria when identifying control relationships. This new defi nition of control is supported by extensive application guidelines which highlight different ways in which a reporting company (investor) can control another fi rm (shareholding). The key principle that consolidated fi nancial statements present the parent company and its subsidiaries as a single entity remains unchanged, as do the consolidation procedures. IASB stipulates that IFRS 10 is mandatory for fi nancial years which begin on or after 1 January 2013. It must be adopted in the EU by 1 January 2014. Early adoption is permitted. HHLA will not adopt this standard prematurely. This amendment is not expected to have a major impact on HHLA's future consolidated fi nancial statements.
This standard was published by the IASB in May 2011. IFRS 11 replaced the previous regulations on accounting for joint ventures (IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities). The new standard provides accounting guidance for companies which exercise joint control over joint ventures or joint operations. The previous option of pro rata consolidation for joint ventures has been eliminated. Partners in a joint venture must henceforth use the equity method. IASB stipulates that IFRS 11 is mandatory for fi nancial years which begin on or after 1 January 2013. It must be adopted in the EU by 1 January 2014. Early adoption is permitted. HHLA will not adopt this standard prematurely. This amendment is not expected to have a major impact on HHLA's future consolidated fi nancial statements.
According to the IFRS 12 standard published in May 2011, companies must disclose details which enable users of fi nancial statements to assess the type of risks and fi nancial consequences entailed in the company's interests in subsidiaries, associates, joint arrangements and non-consolidated structured companies (special-purpose entities). IFRS 12 applies to companies who produce balance sheets as per IFRS 10 and IFRS 11. The standard comprises the disclosure obligations currently contained in IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures. IASB stipulates that IFRS 12 is mandatory for fi nancial years which begin on or after 1 January 2013. Early adoption is permitted. HHLA will not adopt this standard prematurely. It must be adopted in the EU by 1 January 2014. Applying the standard is expected to lead to more detailed Notes in HHLA's consolidated fi nancial statements.
Amendments to IAS 32 Financial Instruments: Offsetting Financial Assets and Financial Liabilities; amendments to IFRS 7 Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities The IASB ratifi ed the amendments in December 2011. With the changes, the IASB lays down the offsetting regulations for fi nancial instruments. Overall, these adjustments eliminate inconsistencies. In addition, supplementary information is to be provided in the notes about the use of offsetting and existing offsetting rights. The clarifi cations are mandatory for fi nancial years which begin on or after 1 January 2014 with retroactive effect. The additional information must be provided retroactively for fi nancial periods as of 1 January 2013. The Notes to HHLA's consolidated fi nancial statements will include additional information as a result of these amendments.
The IASB published IFRS 13 Fair Value Measurement in May 2011, which defi nes a uniform framework for the measurement of fair value. The new guideline contains disclosure requirements in connection with measurements at fair value. In the new standard, fair value is defi ned as the exit price and is therefore market based. Values on the market with the greatest market volume or the most market activity for the asset or liability to be measured at the time of valuation must be taken into account. Fair value is measured using approaches based on the market, cost or present value. IFRS 13 is mandatory for fi nancial years which begin on or after 1 January 2013. The amendments to IFRS 13 are not expected to have a material impact on HHLA's consolidated fi nancial statements. However, more detailed information will probably have to be provided in the Notes as a result of applying these standards.
This combined standard contains amendments and clarifi cations which apply to various existing IFRS. These include in particular IFRS 1 First-time Adoption of IFRS, IAS 1 Presentation of Financial Statements, IAS 16 Property, Plant and Equipment, IAS 32 Financial Instruments: Presentation and IAS 34 Interim Financial Reporting. The amendment of various IFRS will have no material impact on HHLA's consolidated fi nancial statements.
IFRS 9 was published in November 2009 as the fi rst part of the project to replace the existing IAS 39 Financial Instruments: Recognition and Measurement. The regulations issued in 2009 explain the requirements for classifying and measuring fi nancial assets. In October 2010, IFRS 9 Financial Instruments was republished to include requirements relating to the recognition, classifi cation and measurement of fi nancial liabilities. In addition to this, the rules from the existing IAS 39 for derecognising fi nancial assets and liabil ities were incorporated. The IASB published the Exposure Draft Classifi cation and Measurement: Limited Amendments to IFRS 9 in November 2011. The next phases of the project are currently being discussed (phase 2: amortised cost and impairment and phase 3: hedge accounting). This standard must be applied for fi nancial years that begin on or after 1 January 2015. IFRS 9 may be adopted early. The amendments to IFRS 9 are not expected to have any material effect on HHLA's future consolidated fi nancial statements.
Effective Date and Transition Disclosures
With this amendment published in December 2011, IASB postponed the mandatory adoption date for IFRS 9 until 1 January 2015. Furthermore, there is now no need to restate fi gures for the previous years during fi rst-time adoption. This relaxation leads to the need for additional disclosures on transition in the Notes pursuant to IFRS 7. These amendments are not expected to have any effect on HHLA's future consolidated fi nancial statements.
IFRS 10, IFRS 11 and IFRS 12 Transition Guidance
The amendments passed in June 2012 to IFRS 10, IFRS 11 and IFRS 12 clarifi ed the transition guidance for the fi rst-time adoption of IFRS 10. These amendments now include a defi nition of the date when IFRS 10 was fi rst adopted in the standard. Furthermore, the amendments provide relief for the fi rst-time adoption of these standards by limiting the requirement to provide restated comparative information to the preceding comparative period only. The previous requirement of IFRS 12 to provide comparative information on non-consolidated, structured companies for periods prior to the fi rst-time application of this new standard was eliminated. The amendments are intended to apply to reporting years which begin on or after 1 January 2013. The European Commission is yet to adopt these provisions. These provisions are not expected to have a major impact on HHLA's future consolidated fi nancial statements.
The annual fi nancial statements of the companies included in the consolidated fi nancial statements are based on uniform accounting and valuation principles. The following specifi c accounting and valuation principles were applied.
Intangible assets are capitalised if the assets are identifi able, a future infl ow of benefi ts can be expected and the acquisition and production costs can be ascertained reliably. Intangible assets acquired in return for payment are recognised at historical cost. Intangible assets with a fi nite useful life are amortised over their useful life on a straight-line basis. The Group examines its intangible assets with a fi nite useful life as of each balance sheet date for signs of impairment.
Intangible assets with an indefi nite useful life are subjected to an impairment test at least once a year. If necessary, value adjustments are made to future expectations. In the reporting period there were no intangible assets with an indefi nite useful life apart from derivative goodwill.
Internally generated intangible assets are recognised at the costs incurred in their development phase between the time when technological and economic feasibility is determined and production. Costs include all directly attributable costs incurred during the development phase.
The capitalised amount of development costs is subject to an impairment test at least once per year if the asset is not yet in use or if there is evidence of impairment during the course of the year.
The following useful lives have been assumed for intangible assets:
| 2012 | 2011 | |
|---|---|---|
| Software | 3 – 7 years | 3 – 7 years |
Property, plant and equipment is reported at the acquisition or production cost less accumulated depreciation, amortisation and impairment. The costs of ongoing maintenance are recognised immediately in profi t and loss. The production costs include specifi c expenses and appropriate portions of attributable production overheads. Demolition obligations are included in the acquisition or production costs at the present value of the obligation as of the time when it arises and an equivalent provision is recognised at the same time. The HHLA Group does not use the revaluation method of accounting.
Depreciation is carried out on a straight-line basis over an asset's useful life. The following table shows the principal useful lives which are assumed:
| 2012 | 2011 | |
|---|---|---|
| Buildings | 10 – 70 years | 10 – 70 years |
| Technical equipment and machinery | 5 – 25 years | 5 – 25 years |
| Other plant, operating and offi ce equipment |
3 –15 years | 3 –15 years |
The carrying amounts for property, plant and equipment are tested for impairment if there is evidence that the carrying amount exceeds the recoverable amount.
According to IAS 23, borrowing costs which can be directly attributed to the acquisition or production of a qualifying asset are capitalised as a component of the acquisition or production cost of the asset in question. Borrowing costs which cannot be directly attributed to a qualifying asset are recognised as an expense at the time they are incurred.
Investment property consists of buildings held for the purpose of generating rental income or for capital gain, and not for supplying goods or services, for administrative purposes or for sale as part of normal business operations.
IAS 40 stipulates that investment property be held at acquisition or production cost less accumulated depreciation and accumulated impairment losses. Subsequent expenses are capitalised if they result in an increase in investment property's value in use. The useful lives applied are the same as those for property used by the Group.
The fair values of these properties are disclosed separately in Note 24.
The carrying amounts for investment property are tested for impairment if there is evidence that the carrying amount exceeds the recoverable amount.
As of each balance sheet date the Group determines whether there are any indications that an asset may be impaired. If there are such indications, or if an annual impairment test is required, as in the case of goodwill, the Group estimates the recoverable amount. The recoverable amount of an asset is the higher of the fair value of the asset or the cash-generating unit, less selling costs and its value in use. The recoverable amount must be determined for each asset individually unless the asset does not generate cash infl ows which are largely independent of those generated by other assets or groups of assets. In this case the recoverable amount of the smallest cash-generating unit must be determined. If the carrying amount of an asset exceeds its recoverable amount, the asset is deemed to be impaired and is written down to its recoverable
amount. The fair value less selling costs and value in use of the cash-generating unit or asset is calculated using the discounted cash fl ow method. This involves discounting estimated future cash fl ows to their present value using a discount rate after tax which refl ects current market expectations of the interest curve and the specifi c risks of the asset. As of the balance sheet date, the interest rate for discounting was between 6.8 and 7.6 % p.a. (previous year: 6.4 to 7.7 % p.a.). The cash fl ow forecasts in the Group's current plans for the next fi ve years were extrapolated to determine future cash fl ows. If new information is available when the fi nancial statements are produced, it is taken into account. Growth factors of 0.0 to 1.0 % are applied. When forecasting cash fl ows the Group takes future market and sector expectations as well as past experience into account in its planning.
On each reporting date an assessment is made as to whether an impairment loss recognised in prior periods no longer exists or has decreased. If there are such indications, the recoverable amount is estimated. Previously recognised impairment losses are reversed if there has been a change in the estimates used to determine the recoverable amount since the last impairment loss was recognised. If this is the case, the carrying amount of the asset is raised to its recoverable amount. This higher carrying amount may not exceed the amount which would have been determined, less scheduled depreciation or amortisation, if no impairment losses had been recognised in prior years. Any such reversals must be recognised immediately in profi t and loss for the period. Following a reversal, the amount of depreciation or amortisation must be adjusted in subsequent periods in order to write down the adjusted carrying amount of the asset, less any residual value, systematically over its remaining useful life.
Impairment losses on goodwill are not reversed.
Financial assets as defi ned by IAS 39 are classifi ed as fi nancial assets at fair value through profi t and loss, loans and receivables, investments held to maturity or available-for-sale fi nancial assets.
Financial assets are initially recognised at fair value. In the case of fi nancial investments for which no fair value through profi t and loss is determined, directly attributable transaction costs are also
included. The Group defi nes the classifi cation of its fi nancial assets on initial recognition and reviews this classifi cation every year insofar as this is permitted and appropriate.
Financial assets are recognised as of their settlement date, i.e. upon delivery and transfer of risk. The only exception is the recognition of derivatives, which are recognised as of the trading day.
Financial Assets at Fair Value through Profi t and Loss Derivative fi nancial instruments are classifi ed as held for trading unless they are derivatives designated and effective as hedging instruments. Gains or losses from fi nancial assets held for trading are recognised in profi t and loss.
Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments which are not quoted in an active market. These assets are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in the result for the period when the loans and receivables are derecognised or impaired and within the scope of repayment.
Trade receivables and other assets are recognised at amortised cost less allowances for doubtful receivables. Write-downs are made if there is substantial objective evidence that the Group will not be able to collect the receivables. Receivables are derecognised as soon as they are deemed to be irrecoverable. Examples of objective evidence are manifest shortages of liquid funds or the institution of insolvency proceedings against a customer. When assessing such situations, HHLA draws on its own data about the specifi c customer, external information and fi gures derived from experience.
Cash, cash equivalents and short-term deposits are cash in hand, cheques, bank balances on deposit and short-term bank deposits which have a maturity of up to six months and which are recognised at their face value.
Cash used as a pledge or collateral is disclosed separately.
Following their initial recognition, available-for-sale fi nancial assets are measured at fair value on each balance sheet date. The gains or losses arising as a result are taken directly to equity, where they are recorded in a separate reserve. The reserve is reversed through profi t and loss on disposal of the fi nancial asset. If impairment losses are recorded based on objective evidence of impairment as per IAS 39.59 rather than valuation-based considerations alone, the impairment must be recognised in the income statement.
The fair values of fi nancial instruments traded on organised markets are determined by reference to the prices quoted on the stock exchange on the balance sheet date. The fair values of fi nancial instruments for which there is no active market are estimated using valuation methods. If the fair values cannot be determined reliably because they are not traded on an active market, they are valued at cost. This applies in particular to non-consolidated interests in affi liated companies and other equity investments.
On each balance sheet date the Group determines whether a fi nancial asset or a group of fi nancial assets is impaired.
If there is an objective indication of impairment to loans and receivables carried at amortised cost, the loss is calculated as the difference between the carrying amount of the asset and the present value of expected future cash fl ows (excepting future credit defaults), discounted by the original effective interest rate of the fi nancial asset (i.e. the interest rate determined on initial recognition). The amount of the loss must be recognised immediately in profi t and loss. If the amount of the write-down decreases in one of the following reporting periods and this decrease can be ascribed objectively to circumstances occurring after the impairment was recognised, then the earlier impairment is reversed. A subsequent write-up is recognised in profi t and loss if the carrying amount of the asset at the time of the write-up does not exceed the amortised cost.
If there is an objective indication of impairment to a non-listed equity instrument that is not recognised at fair value because its fair value cannot be determined reliably, the amount of the writedown is the difference between the carrying amount of the fi nancial asset and the present value of the estimated future cash fl ows, discounted at the current market rate of return for a comparable fi nancial asset.
If an available-for-sale fi nancial asset is impaired, the difference recognised in equity between the acquisition cost (less any repayments and amortisation) and the current fair value, less any impairment allowances for the fi nancial asset, is recognised in profi t and loss. Write-ups on equity instruments classifi ed as available for sale are recognised directly in equity. Write-ups on debt instruments are recognised in profi t and loss if the increase in the instrument's fair value can objectively be ascribed to an event which occurred after the impairment was recognised through profi t and loss.
Inventories include raw materials, consumables and supplies, work in progress, fi nished products and merchandise. They are initially recognised at acquisition or production cost. Measurement at the balance sheet date is made at the lower of cost and net realisable value. Standard sequence of consumption procedures are not used for valuation. Service work in progress is valued using the percentage of completion method if the result of the service transaction can be estimated reliably. Net realisable value corresponds to the estimated sales proceeds in the course of normal operations, less costs until completion and sale.
At initial recognition, fi nancial liabilities are measured at the fair value of the equivalent goods or services received less trans action costs related to borrowing, including discounts and premiums.
After initial recognition, fi nancial liabilities are measured at amortised cost using the effective interest rate method.
This does not apply to derivatives recorded as liabilities, which are carried at fair value.
A provision is formed if the Group has a present (legal or factual) obligation arising from past events, the settlement of which is likely to result in an outfl ow of resources embodying economic benefi ts, and if the amount required to settle the obligation can be estimated reliably. The provision is formed for the amount expected to be necessary to settle the obligation, including future increases in prices and costs. If the Group anticipates a partial reimbursement of an amount made as a provision (e.g. in the case of insurance), the reimbursement is recognised as a separate asset only if it is virtually certain. The expenses arising from making the provision are disclosed in the income statement after the reimbursement has been deducted. If the interest effect is substantial, non-current provisions are discounted before tax at an interest rate which refl ects the specifi c risks associated with the liability. In the event of discounting, the increase in the amount of the provision over time is recognised under interest expenses.
Pensions and similar obligations include the Group's benefi t obligations under defi ned benefi t obligations. Provisions for pension obligations are calculated in accordance with IAS 19 using the projected unit credit method. Actuarial gains and losses are recognised in equity without effect on profi t and loss, after accounting for deferred taxes. Service expense affecting net income is recognised in personnel expenses and the interest proportion of the addition to provisions is recognised in the fi nancial result.
Actuarial opinions are commissioned annually to determine pension obligation costs.
The compensation to be paid in the release phase of the so-called block model is recognised as provisions for phased early retirement. It is recognised pro rata over the working period over which the entitlements accrue. The supplementary contributions to be paid over the entire phased early retirement period are recognised as provisions for phased early retirement.
Actuarial opinions are commissioned annually to measure compensation obligations in the release phase of the block model and supplementary amounts.
If payment obligations do not become payable until after twelve months' time because of entitlements in the block model or supple mentary amounts, they are recognised at their present value.
The question of whether an agreement is, or contains, a lease depends on the commercial content of the agreement and requires an assessment as to whether fulfi lling the agreement depends on the use of a certain asset or assets and whether the agreement grants a right to use that asset.
Finance leases – in which virtually all of the risks and potential rewards associated with ownership of an asset are transferred to the Group – are capitalised at the start of the lease at the lower of the leased asset's fair value or the present value of the minimum lease payments. A lease liability is recognised for the same amount. Lease payments are divided into fi nancing expenses and repayment of the lease liability, so that interest is paid on the residual carrying amount of the lease liability at a constant rate. Financing expenses are recognised in profi t and loss in the period in which they arise.
If the transfer of title to the Group at the end of the lease term is not suffi ciently certain, capitalized leased assets are fully depreciated over the shorter of the lease term and the asset's useful life. Otherwise, the period of depreciation is the leased asset's useful life.
Lease instalments for operating leases are recognised as expenses in profi t and loss on a straight-line basis over the duration of the lease.
The HHLA Group lets properties in and around the Port of Hamburg as well as offi ce properties, warehouses and other commercial space. The rental contracts are classifi ed as operating leases, as the main risks and potential rewards of the properties remain with the Group. The properties are therefore held as investment properties at amortised cost.
Rental income from investment properties is recognised on a straight-line basis over the term of the leases.
Income is recognised when it is probable that the economic benefi t will fl ow to the Group and the amount of income can be determined reliably. The following criteria must also be met for income to be recognised:
Income is recognised when the principal risks and potential rewards incidental to ownership of the goods and merchandise sold have been transferred to the buyer.
Income from services is recognised in proportion to the progress of the project in question. The extent to which the service has been provided is determined by the number of hours worked as of the balance sheet date as a percentage of the total number of hours estimated for the project. If the result of a service transaction cannot be estimated reliably, income is recognised only to the extent that the expenses incurred are eligible for reimbursement.
Interest income and interest expenses are recognised when they are accrued or incurred.
Income from dividends is recognised in profi t and loss when the Group has a legal right to payment. This does not apply to dividends distributed by companies accounted for using the equity method.
Operating expenses are recognised when the service is rendered or when the expense is incurred. Income and expenses resulting from identical transactions or events are recognised in the same period. Rental expenses are recognised on a straight-line basis over the lease term.
Government grants are recognised when there is reasonable certainty that they will be granted and the company fulfi ls the necessary conditions. Grants paid as reimbursement for expenses are recognised as income over the period necessary to offset them against the expenses for which they are intended to compensate. If grants relate to an asset they are deducted from the asset's cost of purchase and recognised in profi t and loss on a straight-line basis by reducing the depreciation for the asset over its useful life.
and prior periods are measured at the amount for which a rebate is expected from, or payment must be made to, the tax authorities. The tax rates and tax legislation in force as of the balance sheet date are used to determine the amount.
Deferred taxes are recognised by using the balance sheet liabilities method on all temporary differences between the carrying amount of an asset or liability in the balance sheet and the amount for tax purposes, as well as on tax loss carry-forwards.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differ ences and unused tax loss carry-forwards proportionate to the probability that taxable income will be available to offset against the deductible temporary differences and the unused tax loss carry-forwards.
The carrying amount of deferred tax assets is reviewed on each balance sheet date and reduced to the extent that it is no longer likely that suffi cient taxable profi ts will be available to use against the deferred tax asset. Unrecognised deferred tax assets are reviewed on each balance sheet date and recognised proportionate to the likelihood that future taxable profi ts will make it possible to use deferred tax assets.
Deferred tax assets and liabilities are measured using the tax rates expected to apply in the period in which the asset is realised or the liability is met. Tax rates (and tax regulations) are applied if they have already been enacted as of the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity, likewise not affecting net income.
Deferred tax assets and liabilities are netted only if the deferred taxes relate to income taxes for the same tax authority and the current taxes may also be set off against one another.
The fair value of fi nancial instruments is determined on the basis of market values or valuation methods. For cash and other current primary fi nancial instruments, fair value is equivalent to the carrying amounts on the respective balance sheet dates. For non-current receivables and other fi nancial assets, as well as non-current provisions and liabilities, fair value is measured based on expected cash fl ows using reference rates of interest at the balance sheet date. The fair value of derivative fi nancial instruments is determined on the basis of reference interest rates and futures prices at the balance sheet date.
The Group uses derivative fi nancial instruments such as interest rate swaps, interest rate caps and currency futures to hedge against interest and currency risks. These derivative fi nancial instruments are initially recognised at fair value at the time the contracts are concluded and subsequently revalued at fair value.
Gains and losses from changes in the fair value of derivative fi nancial instruments which do not meet the criteria for qualifi cation as hedging transactions are recognised immediately through profi t and loss.
For hedge accounting purposes, hedging instruments are classifi ed as cash fl ow hedges if they serve as a hedge against risks arising from fl uctuations in cash fl ows which can be attributed to a recognised asset or liability, or a forecast transaction.
A hedge for the currency risk of a fi xed obligation is treated as a cash fl ow hedge.
At the beginning of a hedging relationship, the Group formally designates the hedging relationship to be recognised as a hedging transaction, as well as the risk management aims and strategies relating to the hedge, and documents them. The documentation includes identifi cation of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and a description of how the company will assess the hedging instrument's effectiveness in offsetting the exposure to changes in the hedged item's fair value or cash fl ows attributable to the hedged risk. These hedging relationships are considered to be highly effective in offsetting changes in fair value or cash fl ows attributable to the hedged risk. The hedges are assessed on an ongoing basis to determine whether they were actually highly effective throughout the fi nancial reporting period for which the hedge was designated.
There were no hedging transactions to hedge fair value or net investments in a foreign operation during the reporting period. Cash fl ow hedges which meet the strict criteria for recognition as hedging relationships are recognised as follows:
The effective portion of gains or losses from changes in the fair value of a hedging instrument is recognised directly in equity, taking account of the deferred taxes, while the ineffective portion is recognised in profi t and loss.
The amounts recognised in equity are recorded in the income statement in the period affected by the hedged transaction, e.g. when the hedged fi nancial income or expense affects profi t and loss or when a forecast sale or purchase occurs. If the hedged transaction is the acquisition cost of a non-fi nancial asset or a non-fi nancial liability, the amounts recognised in equity are added to the originally recognised carrying amount of the non-fi nancial asset or liability.
If the forecast transaction is no longer expected to occur, the amounts previously recognised in equity are recognised in profi t and loss for the period. If the hedging instrument expires, or is sold, terminated or exercised, or rolled over into another hedging instrument, or if the Group withdraws the designation as a hedging instrument, the amounts previously recognised in equity remain separately recognised in equity until the forecast transaction occurs.
Preparing the consolidated fi nancial statements in accordance with IFRS requires management to make estimates and assess individual facts and circumstances. The estimates made are based on past experience and other relevant factors and on a going concern basis.
The amounts which actually arise may differ from those resulting from estimates and assumptions.
The accounting and valuation principles applied are explained in Note 6. Material assumptions and estimates affect the following issues:
The fair value of the assets acquired and liabilities and contingent liabilities assumed as a result of business combinations must be estimated. For this purpose HHLA either makes use of opinions from independent external experts or calculates the fair value internally using suitable calculation models. These are normally based on discounted cash fl ows. Depending on the nature of the assets or the availability of information, market price, capital value and cost-oriented valuation methods are applied.
The Group tests goodwill for impairment at least once a year. This requires an estimate of the fair value less selling costs or the value in use of the cash-generating units to which the goodwill has been allocated. To estimate the fair value or value in use, the Group must forecast the likely future cash fl ows from the cash-generating unit and also choose an appropriate discount rate with which to calculate the present value of these cash fl ows. Unforeseeable changes may mean that the assumptions used during planning are no longer appropriate, making it necessary to adjust plans. An impairment loss may be incurred as a result. As of 31 December 2012, the carrying value of the goodwill reported was € 38,691 thousand (previous year: € 38,691 thousand). For more information, please refer to Note 22.
These activities relate to the development of software within the Group, which are capitalised as soon as the recognition requirements pursuant to IAS 38.57 are fulfi lled. HHLA amortises the software over the expected useful life of three to seven years from the point that the software comes into use. As of 31 December 2012, the carrying amount of intangible assets resulting from internal development activities came to € 26,452 thousand (previous year: € 25,859 thousand). For more information, please refer to Note 22.
HHLA carries out its own calculations to determine the fair value of this property. Industry-standard discounted cash fl ow methods are applied. The calculations are based on assumptions about applicable interest rates and the amount and time-frame of expected future cash fl ows which these assets can generate. As of 31 December 2012, the carrying amount came to € 180,851 thousand (previous year: € 180,062 thousand). Detailed information is available in Note 24.
Actuarial opinions are commissioned annually to determine pension obligation costs. These calculations include assumptions about demographic changes, salary and pension increases, and interest, infl ation and fl uctuation rates. Because these assumptions are long-term in nature, the observations are assumed to be characterised by material uncertainties. As of 31 December 2012, the present value of the company's pension obligations was € 384,235 thousand (previous year: € 313,729 thousand). More detailed information is available in Note 36.
All employees who have signed, or are expected to sign, an agreement are taken into consideration when recognising and measuring provisions for phased early retirement. The number of employees expected to sign is an estimate. The appraisal reports are also based on actuarial assumptions. As of 31 December 2012, the present value of the company's obligations was € 9,578 thousand (previous year: € 9,683 thousand). For more information, please refer to Note 37.
Provisions for demolition obligations result from obligations to be met at the end of the lease term under long-term lease agreements with the Free and Hanseatic City of Hamburg. All HHLA Group companies in the Port of Hamburg are obliged to return leased land free of all buildings owned by them at the end of the lease term. The calculations are based on assumptions concerning the amount of demolition work necessary, interest rates and infl ation. As of 31 December 2012, the present value of the company's obligations was € 41,492 thousand (previous year: € 40,758 thousand). For more information, please refer to Note 37.
This item includes, amongst other things, fi nancial settlement obligations to shareholders with non-controlling interests in consolidated subsidiaries. These liabilities arise in cases where HHLA has concluded a profi t and loss transfer agreement with a subsidiary which entitles shareholders with non-controlling interests to receive fi nancial settlements. Liabilities from fi nancial settlement obligations are entered in the balance sheet at their discounted amount on the reporting date. The parameters used to calculate this amount are subject to signifi cant uncertainties which can cause fi gures to fl uctuate accordingly. As of 31 December 2012, the present value of these obligations was € 77,043 thousand (previous year: € 96,006 thousand). For a more detailed explanation, please refer to Notes 35, 38 and 47.
Assumptions and estimates are also made for value adjustments on doubtful receivables, for determining the duration of amortisation or depreciation for intangible assets and property, plant and equipment, respectively, for determining other provisions and for the application of deferred taxes to tax loss carry-forwards.
The income statement has been prepared using the total expenditure format.
Detailed information about revenue can be found in the Notes to the Segment Report Note 44.
Inventories changed as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Changes in inventories of fi nished and unfi nished products and service work |
||
| in progress | 1,711 | 602 |
Own work capitalised can be broken down into:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Container | 8,220 | 6,553 |
| Intermodal | 207 | 66 |
| Logistics | 53 | 119 |
| Holding/Other | 549 | 437 |
| 9,029 | 7,175 |
Own work capitalised results mainly from technical work capitalised in the course of construction work and development activities.
Other operating income was made up as shown below:
| in € thousand | 2012 2011 |
|
|---|---|---|
| Income from the realignment of intermodal activities |
17,595 | 0 |
| Income from reimbursements | 8,219 | 7,422 |
| Income from other accounting periods | 6,267 | 3,424 |
| Income from reversal of provisions | 2,711 | 1,558 |
| Income from compensation | 2,293 | 17,509 |
| Income from exchange rate differences | 1,865 | 1,760 |
| Proceeds on disposal of property, plant and equipment |
559 | 2,591 |
| Other operating income | 8,780 | 9,464 |
| 48,289 | 43,728 |
Income from the realignment of intermodal activities primarily stems from the sale of the 50 % share held in TFG to Deutsche Bahn in the second quarter of 2012. This generated a profi t of € 16,624 thousand. The equity interest had previously been consolidated pro rata. For further details, please refer to Note 3.
Income from reimbursements related primarily to costs which were passed on in connection with leases.
In the year under review, income from other accounting periods consisted primarily of uninvoiced construction services.
In the previous year, € 15,000 thousand of the income from compensation was paid to UNIKAI Hafenbetrieb and LZU Leercontainer Zentrum Unikai by HPA for their loss of usage of leased port areas.
The cost of materials can be broken down as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Raw materials, consumables and supplies | 83,239 | 82,862 |
| External staff | 169 | 261 |
| Purchased services | 282,888 | 349,811 |
| 366,296 | 432,934 |
The expenses for purchased services mainly consist of rail services purchased by the Intermodal segment. The decline in expenses for purchased services was attributable to the sale of the company's entire 50 % stake in TFG in the second quarter of 2012. For more information, please refer to Note 3.
Personnel expenses were as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Wages and salaries | 266,956 | 253,968 |
| Social security contributions and benefi ts | 49,033 | 46,726 |
| Staff deployment | 53,122 | 52,930 |
| Service expense | 3,839 | 5,320 |
| Other retirement benefi t expenses | 789 | 583 |
| 373,739 | 359,527 |
The direct remuneration paid to members of the Executive Board totalled € 3,127 thousand for the fi nancial year 2012 (previous year: € 4,053 thousand). Of this, € 1,440 thousand related to the basic salary (previous year: € 1,765 thousand), € 46 thousand was other benefi ts (previous year: € 279 thousand) and performancerelated remuneration made up € 1,640 thousand (previous year: € 2,009 thousand). In addition, € 676 thousand was added to pension commitments (previous year: € 791 thousand). Former members of the Executive Board and their surviving dependants received total payments of € 735 thousand (previous year: € 782 thousand). Total provisions of € 11,417 thousand (previous year: € 10,340 thousand) were formed for pension obligations to former members of the Executive Board and their surviving dependants. For more details on the remuneration paid to the Executive Board and the Supervisory Board, please refer to Remuneration Report, page 59.
Expenses for wages and salaries from the termination of employment totalled € 325 thousand in the year under review (previous year: € 2,175 thousand). The previous year included payments made to former Executive Board members, among other things.
Service expense includes payments from defi ned benefi t pension commitments and similar obligations.
Social security contributions include payments towards the public pension scheme amounting to € 24,656 thousand (previous year: € 23,018 thousand) and payments to the German pension insurance scheme.
The average number of employees changed as follows:
| 2012 | 2011 | |
|---|---|---|
| Fully consolidated companies | ||
| Employees receiving wages | 2,470 | 2,551 |
| Salaried staff | 2,109 | 1,868 |
| Trainees | 131 | 114 |
| 4,710 | 4,533 | |
| Proportionately consolidated companies | ||
| Employees receiving wages | 50 | 63 |
| Salaried staff | 59 | 160 |
| Trainees | 0 | 0 |
| 109 | 223 | |
| 4,819 | 4,756 |
In April 2012, HHLA, in accordance with its previous Executive Board resolution and with the approval of the Supervisory Board, carried out a capital increase from authorised capital I. Specifi cally, the capital was increased in exchange for cash contributions while excluding the subscription rights of shareholders in the Port Logistics subgroup. In the process, 73,508 new no-par bearer Class A shares, each with a share of € 1.00 in the nominal capital, were issued to employees of the company and of the domestic companies affi liated to it. The issue price was € 26.25. The sum of € 1,612 thousand set aside for this in the previous year was almost entirely used up.
The capital increase and its implementation were entered in the commercial register on 23 April 2012.
Other operating expenses were made up as shown:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Leasing | 43,954 | 42,554 |
| External maintenance services | 38,260 | 39,767 |
| Consultancy, services, insurance and auditing expenses |
31,945 | 31,389 |
| Travel expenses, advertising and promotional costs |
2,648 | 2,918 |
| External and internal cleaning costs | 2,404 | 2,590 |
| Other taxes | 2,275 | 1,950 |
| Losses on the disposal of property, plant and equipment |
2,184 | 1,242 |
| Expenses from other accounting periods | 1,954 | 1,621 |
| Expenses from exchange rate differences | 1,942 | 2,949 |
| Venture expenses | 1,931 | 2,748 |
| Postage and telecommunications costs | 1,713 | 1,892 |
| Other personnel expenses | 1,701 | 2,076 |
| Other | 7,115 | 9,178 |
| 140,026 | 142,874 |
See Note 45 for further details of leasing expenses.
Depreciation and amortisation in the fi nancial year was as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Intangible assets | 8,632 | 9,786 |
| Property, plant and equipment | 97,647 | 102,294 |
| Assets classifi ed as fi nance leases | 6,337 | 5,533 |
| Investment property | 8,617 | 8,814 |
| 121,233 | 126,427 |
A classifi cation of the depreciation and amortisation by asset category is shown in the fi xed asset movement schedule. Impairment losses totalling € 1,090 thousand (previous year: € 6,653 thousand) were recognised in the reporting year (see Note 23).
The fi nancial result was as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Earnings from associates accounted for using the equity method |
- 4,026 | 335 |
| Income from the adjustment of settlement obligations to non-controlling interests |
4,527 | 1,568 |
| Interest income from bank balances | 2,429 | 2,893 |
| Income from exchange rate differences | 1,374 | 1,938 |
| Interest income from non-affi liated companies |
819 | 1,634 |
| Interest income from plan assets for working lifetime accounts |
451 | 328 |
| Interest income from non-consolidated affi liated companies |
165 | 623 |
| Income from interest rate hedges | 151 | 612 |
| Income from lending of fi nancial assets | 2 | 2 |
| Interest income | 9,918 | 9,598 |
| Interest portion of pension provisions | 16,099 | 15,185 |
| Interest expenses on bank borrowing | 8,286 | 10,775 |
| Interest included in lease payments | 4,668 | 4,475 |
| Interest expenses to non-consolidated affi liated companies |
2,971 | 3,034 |
| Interest portion of other provisions | 2,802 | 2,667 |
| Interest expenses to non-affi liated companies |
2,361 | 2,625 |
| Expenses from exchange rate differences | 1,248 | 2,036 |
| Expenses from interest rate hedges | 842 | 1,527 |
| Interest expenses | 39,277 | 42,324 |
| Net interest income | - 29,359 | - 32,726 |
| Income from other equity investments | 602 | 368 |
| Amortisation of fi nancial assets and non-current fi nancial receivables |
62 | 151 |
| Other fi nancial result | 540 | 217 |
| Financial result | - 32,845 | - 32,174 |
In addition to the pro rata annual earnings of CuxPort, earnings from companies accounted for using the equity method also included the pro rata annual earnings of HHLA Frucht and STEIN for the fi rst time. Earnings include impairment losses on the equity approaches in fruit logistics (see Note 25). The companies HHLA Frucht and STEIN, which were previously consolidated in full, have been included in the consolidated fi nancial statements using the equity method since 1 January 2012 (see Note 3).
For details of income from the adjustment of settlement obligations to shareholders with non-controlling interests, please see Notes 38 and 47.
In the fi nancial year, research costs of € 550 thousand (previous year: € 1,356 thousand) were recognised as an expense. These primarily related to research for software development.
Paid or outstanding income taxes and deferred taxes are shown under the item income taxes. Income taxes are made up of corporation tax, solidarity surcharge and trade tax. Companies domiciled in Germany pay corporation tax of 15.0 % and a solidarity surcharge of 5.5 % of the corporation tax expense. These companies and German-based subsidiaries in the form of limited partnerships are also liable for trade tax, which is imposed at different local rates. Trade tax no longer reduces the amount of a company's profi ts on which corporation tax is payable.
Income tax expenses mainly consisted of the following:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Deferred and current income taxes | ||
| Deferred taxes on temporary differences | ||
| Domestic | 300 | 3,466 |
| Foreign | - 508 | 1,598 |
| - 208 | 5,064 | |
| Deferred taxes on losses carried forward | ||
| Domestic | 653 | 306 |
| Foreign | - 34 | 0 |
| 619 | 306 | |
| 411 | 5,370 | |
| Current income tax expense | ||
| Domestic | 33,908 | 42,119 |
| Foreign | 7,269 | 8,564 |
| 41,177 | 50,683 | |
| Income tax expense recognised in | ||
| the income statement | 41,588 | 56,053 |
Income tax expenses include tax income from other accounting periods amounting to € 354 thousand (previous year: € 1,342 thousand).
Deferred tax assets and liabilities result from temporary differences and tax loss carry-forwards as follows:
| in € thousand | Deferred tax assets | Deferred tax liabilities | ||
|---|---|---|---|---|
| 31.12.2012 | 31.12.2011 | 31.12.2012 | 31.12.2011 | |
| Intangible assets | 0 | 0 | 427 | 56 |
| Property, plant and equipment and fi nance leases | 0 | 0 | 13,172 | 14,199 |
| Investment property | 0 | 0 | 13,471 | 13,020 |
| Financial assets | 0 | 0 | 786 | 101 |
| Inventories | 6 | 23 | 119 | 99 |
| Receivables and other assets | 3,134 | 2,479 | 1,499 | 668 |
| Pension and other provisions | 54,367 | 32,528 | 3,921 | 2,996 |
| Liabilities | 5,988 | 5,542 | 1,656 | 2,330 |
| Tax losses carried forward | 963 | 1,582 | 0 | 0 |
| 64,458 | 42,154 | 35,051 | 33,468 | |
| Netted amounts | - 21,632 | - 19,911 | - 21,632 | - 19,911 |
| Balance sheet items | 42,826 | 22,243 | 13,419 | 13,557 |
The offsetting and reconciliation between the income tax expenses and hypothetical tax expenses based on the IFRS result and the Group's applicable tax rate are as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Profi t before tax 153,432 |
174,841 | |
| Income tax expense at hypothetical income tax rate of 32.28 % (previous year: 32.28 %) |
49,528 | 56,439 |
| Adjustment in current income taxes for prior years |
- 354 | - 1,342 |
| Effect of tax rate changes | - 71 | - 102 |
| Tax-free income | 106 | - 151 |
| Non-deductible expenses | 92 | 101 |
| Trade tax additions and reductions | - 609 | 1,758 |
| Differences in tax rates | - 5,606 | - 4,617 |
| Impairment losses on deferred tax assets | 278 | 2,954 |
| Other tax effects | - 1,776 | 1,014 |
| 41,588 | 56,053 |
Deferred taxes are calculated on the basis of the tax rates currently in force in Germany or those expected to apply at the time of realisation. A tax rate of 32.28 % was used for the calculations in both 2011 and 2012. This is made up of corporation tax at 15.0 %, solidarity surcharge of 5.5 % and the trade tax payable in Hamburg of 16.45 %. Limited partnerships are also liable for trade tax. Due to special rules, property management companies generally do not pay trade tax. Trade tax no longer reduces the amount of a company's profi ts on which trade tax is payable; neither does it lessen the amount on which corporation tax is paid. Due to rules on minimum taxation, tax loss carry-forwards are only partially usable in Germany. Tax losses of up to € 1 million can be set off against taxable profi ts without restriction, and higher tax losses up to a maximum of 60 %.
The effects of tax rates for domestic and foreign taxes that diverge from the Group parent company's tax rate are reported in the offsetting and reconciliation under differences in tax rates.
Deferred tax assets are recognised on tax loss carry-forwards and temporary differences if it is suffi ciently certain that they can be realised in the near future. The Group has domestic corporation tax loss carry-forwards of € 3,674 thousand (previous year: € 5,666 thousand), domestic trade tax loss carry-forwards of € 1,085 thousand (previous year: € 3,137 thousand) and foreign tax loss carry-forwards of € 1,068 thousand (previous year: € 891 thousand), for which deferred taxes in the amount of € 963 thousand (previous year: € 1,582 thousand) are recognised as assets. No deferred tax assets are carried for domestic corporation tax loss carry-forwards of € 3,957 thousand (previous year: € 7,973 thousand), domestic trade tax loss carry-forwards of € 5,585 thousand (previous year: € 17,564 thousand) and foreign tax loss carryforwards of € 4,737 thousand (previous year: € 1,834 thousand). Under current legislation, the tax losses can be carried forward in Germany without restriction.
Deferred tax assets of € 1,458 thousand (previous year: € 425 thousand) and deferred tax liabilities of € 0 thousand (previous year: € 21,868 thousand) recognised directly in equity without effect on profi t and loss come from actuarial gains and losses on pension provisions, cash fl ow hedges and unrealised gains/losses arising from available-for-sale fi nancial assets.
The income tax recognised in the statement of comprehensive income is made up as follows:
| in € thousand | 2012 | 2011 | ||||
|---|---|---|---|---|---|---|
| Gross | Taxes | Net | Gross | Taxes | Net | |
| Actuarial gains/losses | - 71,865 | 23,188 | - 48,677 | 18,128 | - 5,892 | 12,236 |
| Cash fl ow hedges | - 43 | 7 | - 36 | - 418 | 114 | - 304 |
| Unrealised gains/losses on available-for-sale fi nancial assets |
146 | - 47 | 99 | - 101 | 33 | - 68 |
| - 71,762 | 23,148 | - 48,614 | 17,609 | - 5,745 | 11,864 |
Profi ts attributable to non-controlling interests in the amount of € 39.409 thousand (previous year: € 29.506 thousand) primarily relate to shareholders with non-controlling interests in HHLA Container-Terminal Altenwerder GmbH, Hamburg. This share of results was higher than in the previous year as the co-partner was entitled to the profi t share exceeding his equity stake. The conditions for this were not met in the previous year.
Basic earnings per share are calculated in accordance with IAS 33 by dividing the net profi t for the Group attributable to the shareholders of the parent company by the average number of shares.
The following table illustrates the calculation for basic earnings per share:
| 2012 | 2011 | |
|---|---|---|
| Share of consolidated net profi t attribut able to shareholders of the parent company in € thousand |
72,435 | 89,282 |
| Number of common shares in circulation (weighted average) |
72,730,438 | 72,679,826 |
| Basic earnings per share in € | 1.00 | 1.23 |
The basic earnings per share were calculated for the Port Logistics subgroup as follows:
| Basic earnings per share in € | 0.95 | 1.20 |
|---|---|---|
| Number of common shares in circulation (weighted average) |
70,025,938 | 69,975,326 |
| Share of consolidated net profi t attribut able to shareholders of the parent company in € thousand |
66,564 | 84,017 |
| 2012 | 2011 |
The basic earnings per share were calculated for the Real Estate subgroup as follows:
| 2012 | 2011 | |
|---|---|---|
| Share of consolidated net profi t attribut able to shareholders of the parent company in € thousand |
5,871 | 5,265 |
| Number of common shares in circulation (weighted average) |
2,704,500 | 2,704,500 |
| Basic earnings per share in € | 2.17 | 1.95 |
The diluted earnings per share are identical to the basic EPS as there were no conversion or option rights in circulation during the reporting year. An employee stock purchase plan which was agreed in 2011 was implemented in April 2012. In the process, 73,508 new no-par bearer Class A shares, each with a share of € 1.00 in the nominal capital, were issued to employees of the company and of the domestic companies affi liated to it. This was accounted for accordingly in the fi gures given for the weighted average number of common shares in circulation in both the Group and the Port Logistics subgroup in the reporting year.
The dividend entitlement for the share classes is based on the portion of the distributable profi t attributable to the relevant division. This is calculated in accordance with the German Commercial Code (HGB).
A resolution was passed at the Annual General Meeting held on 14 June 2012 to distribute a dividend of € 48,236 thousand to holders of common shares in the reporting year for fi scal 2011. At the time of the distribution, the number of shares entitled to dividends amounted to 72,753,334, of which 70,048,834 are to be attributed to the subgroup Port Logistics (A division) and 2,704,500 to the subgroup Real Estate (S division). This resulted in dividends of € 0.65 per Class A share and € 1.00 per Class S share. The remaining undistributed profi t was carried forward to new account. The number of outstanding shares increased by 73,508 year on year due to the issue of new shares in April 2012 as part of the employee stock purchase programme described in Notes 20 and 35.
In 2013, dividends per share of € 0.65 for the subgroup Port Logistics and € 1.20 for the subgroup Real Estate are due to be paid. Based on the number of shares outstanding as of 31 December 2012, this is equivalent to payouts of € 45,532 thousand for the subgroup Port Logistics and of € 3,245 thousand for the subgroup Real Estate.
The following table shows the changes in intangible assets:
| in € thousand | Goodwill | Software | Internally developed software |
Other intangible assets |
Payments made on account |
Total |
|---|---|---|---|---|---|---|
| Carrying amount as of 1 January 2011 |
41,561 | 4,790 | 26,459 | 0 | 11,040 | 83,850 |
| Acquisition or production cost | ||||||
| 1 January 2011 | 46,873 | 38,428 | 29,280 | 1,399 | 11,040 | 127,020 |
| Additions | 3,219 | 3,590 | 595 | 7,404 | ||
| Disposals | - 262 | - 262 | ||||
| Reclassifi cations | 10,285 | - 10,285 | 0 | |||
| Changes to scope of consolidation | - 38 | - 38 | ||||
| Effects of changes in exchange rates | 49 | 49 | ||||
| 31 December 2011 | 46,873 | 51,681 | 32,870 | 1,399 | 1,350 | 134,173 |
| Accumulated depreciation, amortisation and impairment |
||||||
| 1 January 2011 | 5,312 | 33,638 | 2,821 | 1,399 | 0 | 43,170 |
| Additions | 2,870 | 2,726 | 4,190 | 9,786 | ||
| Disposals | - 258 | - 258 | ||||
| Changes to scope of consolidation | - 38 | - 38 | ||||
| Effects of changes in exchange rates | 23 | 23 | ||||
| 31 December 2011 | 8,182 | 36,091 | 7,011 | 1,399 | 0 | 52,683 |
| Carrying amount as of 31 December 2011 |
38,691 | 15,590 | 25,859 | 0 | 1,350 | 81,490 |
| Carrying amount as of 1 January 2012 |
38,691 | 15,590 | 25,859 | 0 | 1,350 | 81,490 |
| Acquisition or production cost | ||||||
| 1 January 2012 | 46,873 | 51,681 | 32,870 | 1,399 | 1,350 | 134,173 |
| Additions | 769 | 5,584 | 3,652 | 10,005 | ||
| Disposals | - 118 | - 118 | ||||
| Reclassifi cations | 935 | - 935 | 0 | |||
| Changes in scope of consolidation/ consolidation method |
1,769 | 5 | - 379 | 1,395 | ||
| Effects of changes in exchange rates | - 28 | - 28 | ||||
| 31 December 2012 | 46,873 | 55,008 | 38,454 | 1,404 | 3,688 | 145,427 |
| Accumulated depreciation, amortisa tion and impairment |
||||||
| 1 January 2012 | 8,182 | 36,091 | 7,011 | 1,399 | 0 | 52,683 |
| Additions | 3,637 | 4,991 | 4 | 8,632 | ||
| Disposals | - 118 | - 118 | ||||
| Changes in scope of consolidation/ consolidation method |
1,597 | 1,597 | ||||
| Effects of changes in exchange rates | - 9 | - 9 | ||||
| 31 December 2012 | 8,182 | 41,198 | 12,002 | 1,403 | 0 | 62,785 |
| Carrying amount as of 31 December 2012 |
38,691 | 13,810 | 26,452 | 1 | 3,688 | 82,642 |
The carrying amounts for goodwill relate to the following HHLA segments:
| 38,691 | 38,691 | |
|---|---|---|
| Other | 2 | 2 |
| Intermodal | 1,267 | 1,267 |
| Container (HHCT) | 6,493 | 6,493 |
| Container (Rosshafen) | 30,929 | 30,929 |
| in € thousand | 31.12.2012 | 31.12.2011 |
The goodwill of € 30,929 thousand disclosed as of the balance sheet date relates to the 100 % stake in HHLA Rosshafen Terminal GmbH, Hamburg, acquired by HHLA in 2006. This goodwill is primarily derived from additional strategic options to expand the Group's handling activities at the sites let by the company.
Of the internally developed software shown, € 1,715 thousand was not yet completed as of the balance sheet date (previous year: € 612 thousand).
The following tables show the changes in property, plant and equipment:
| in € thousand | Land and buildings |
Technical equipment and machinery |
Other plant, operating and offi ce equipment |
Payments on account and plants under construction |
Total |
|---|---|---|---|---|---|
| Carrying amount as of 1 January 2011 | 435,465 | 340,363 | 140,556 | 62,199 | 978,583 |
| Acquisition or production cost | |||||
| 1 January 2011 | 703,513 | 719,018 | 337,374 | 62,199 | 1,822,104 |
| Additions | 42,053 | 15,983 | 44,963 | 14,213 | 117,212 |
| Disposals | - 22,653 | - 16,374 | - 18,050 | - 227 | - 57,304 |
| Reclassifi cations | 6,869 | 27,347 | 6,201 | - 40,417 | 0 |
| Changes to scope of consolidation | - 33 | - 33 | |||
| Effects of changes in exchange rates | - 52 | 472 | - 18 | 119 | 521 |
| 31 December 2011 | 729,730 | 746,446 | 370,437 | 35,887 | 1,882,500 |
| Accumulated depreciation, amortisation and impairment |
|||||
| 1 January 2011 | 268,048 | 378,655 | 196,818 | 0 | 843,521 |
| Additions | 29,993 | 47,531 | 30,303 | 107,827 | |
| Disposals | - 20,629 | - 16,361 | - 17,305 | - 54,295 | |
| Reclassifi cations | 0 | ||||
| Changes to scope of consolidation | - 24 | - 24 | |||
| Effects of changes in exchange rates | - 20 | 150 | 1 | 131 | |
| 31 December 2011 | 277,392 | 409,975 | 209,793 | 0 | 897,160 |
| Carrying amount as of 31 December 2011 | 452,338 | 336,471 | 160,644 | 35,887 | 985,340 |
| Carrying amount as of 1 January 2012 | 452,338 | 336,471 | 160,644 | 35,887 | 985,340 |
| Acquisition or production cost | |||||
| 1 January 2012 | 729,730 | 746,446 | 370,437 | 35,887 | 1,882,500 |
| Additions | 41,868 | 13,127 | 40,289 | 81,055 | 176,339 |
| Disposals | - 27,436 | - 5,736 | - 9,152 | - 1,915 | - 44,239 |
| Reclassifi cations | 7,154 | 4,507 | 2,309 | - 13,970 | 0 |
| Changes in scope of consolidation/ consolidation method |
- 51,053 | - 29,433 | - 3,129 | 118 | - 83,497 |
| Effects of changes in exchange rates | 47 | - 253 | - 29 | - 704 | - 939 |
| 31 December 2012 | 700,310 | 728,658 | 400,725 | 100,471 | 1,930,164 |
| Accumulated depreciation, amortisation and impairment |
|||||
| 1 January 2012 | 277,392 | 409,975 | 209,793 | 0 | 897,160 |
| Additions | 26,018 | 45,765 | 32,200 | 103,983 | |
| Disposals | - 5,538 | - 5,699 | - 8,652 | - 19,889 | |
| Reclassifi cations | - 1,032 | 1,032 | 0 | ||
| Changes in scope of consolidation/ consolidation method |
- 27,739 | - 22,870 | - 2,849 | - 53,458 | |
| Effects of changes in exchange rates | 46 | 42 | - 27 | 61 | |
| 31 December 2012 | 270,179 | 426,181 | 231,497 | 0 | 927,857 |
| Carrying amount as of 31 December 2012 | 430,131 | 302,477 | 169,228 | 100,471 | 1,002,307 |
Within land and buildings, the additions to assets related mainly to a newly completed mega-ship berth at the Burchardkai container terminal in Hamburg. The investments in technical equipment and machinery concerned the construction and completion of crane tracks, also at the container terminal in Burchardkai. Additions to other assets, operating and offi ce equipment related primarily to investments in new and replacement straddle carriers.
The additions to plants under construction recognised in the reporting year pertain predominantly to the terminal expansion in the form of yard cranes and a container gantry crane.
The disposals of land and buildings include the reclassifi cation of non-current assets held for sale (see Note 34).
The derecognition of € 30,039 thousand of the remaining carrying amount (previous year: € 9 thousand) in conjunction with changes in the group of consolidated companies and the consolidation method used stemmed largely from the change in method used to include HHLA Frucht. This was offset by the increased equity interest in Polzug. For more details, see Note 3.
The write-downs of land and buildings include write-downs in the amount of € 1,090 thousand from redefi ning the surface plan at the Übersee-Zentrum storage and distribution centre during the restructuring of HHLA's logistics activities.
Buildings, surfacing and movable non-current assets with a carrying amount of € 18,961 thousand (previous year: € 44,036 thousand) were assigned by way of collateral in connection with loans taken up by the Group.
Regarding existing restrictions on the disposal and use of buildings in connection with the letting of the associated properties from the Free and Hanseatic City of Hamburg, see the explanatory remarks on the lease agreements in Note 45.
As of the balance sheet date, the Group had obligations of € 91,811 thousand (previous year: € 81,393 thousand) from purchase commitments which were attributable to capitalisation of property, plant and equipment.
In the year under review, HHLA received public subsidies amounting to € 351 thousand in connection with the promotion of intermodal transport (previous year: € 0 thousand). As yet unused subsidies from previous reporting periods were offset against the ongoing cost of acquiring the relevant assets in the amount of € 8,373 thousand in the previous year.
Property, plant and equipment includes the following assets which are classifi ed as fi nance leases as per IAS 17:
| in € thousand | Land and buildings |
Technical equipment and machinery |
Other plant, operating and offi ce equipment |
Total |
|---|---|---|---|---|
| Carrying amount as of 1 January 2011 | 65,659 | 2,486 | 17,956 | 86,101 |
| Acquisition or production cost | ||||
| 1 January 2011 | 66,307 | 6,604 | 27,051 | 99,962 |
| Additions | 28,051 | 368 | 4,414 | 32,833 |
| Disposals | - 245 | - 26 | - 1,483 | - 1,754 |
| Reclassifi cations | - 4,613 | - 4,613 | ||
| Changes to scope of consolidation | 0 | |||
| Effects of changes in exchange rates | - 241 | - 38 | - 279 | |
| 31 December 2011 | 94,113 | 2,092 | 29,944 | 126,149 |
| Accumulated depreciation, amortisation and impairment | ||||
| 1 January 2011 | 648 | 4,118 | 9,095 | 13,861 |
| Additions | 1,772 | 505 | 3,255 | 5,532 |
| Disposals | - 245 | - 10 | - 1,275 | - 1,530 |
| Reclassifi cations | - 3,085 | - 3,085 | ||
| Changes to scope of consolidation | 0 | |||
| Effects of changes in exchange rates | - 157 | - 10 | - 167 | |
| 31 December 2011 | 2,175 | 1,371 | 11,065 | 14,611 |
| Carrying amount as of 31 December 2011 | 91,938 | 721 | 18,879 | 111,538 |
| Carrying amount as of 1 January 2012 | 91,938 | 721 | 18,879 | 111,538 |
| Acquisition or production cost | ||||
| 1 January 2012 | 94,113 | 2,092 | 29,944 | 126,149 |
| Additions | 31,775 | 15 | 4,791 | 36,581 |
| Disposals | - 9,786 | - 92 | - 835 | - 10,713 |
| Reclassifi cations | 0 | |||
| Changes to scope of consolidation | 4,491 | - 55 | 4,436 | |
| Effects of changes in exchange rates | - 27 | 281 | 32 | 286 |
| 31 December 2012 | 116,075 | 6,787 | 33,877 | 156,739 |
| Accumulated depreciation, amortisation and impairment | ||||
| 1 January 2012 | 2,175 | 1,371 | 11,065 | 14,611 |
| Additions | 1,943 | 540 | 3,854 | 6,337 |
| Disposals | - 218 | - 92 | - 835 | - 1,145 |
| Reclassifi cations | 0 | |||
| Changes to scope of consolidation | 3,062 | - 25 | 3,037 | |
| Effects of changes in exchange rates | - 1 | 199 | 7 | 205 |
| 31 December 2012 | 3,899 | 5,080 | 14,066 | 23,045 |
| Carrying amount as of 31 December 2012 | 112,176 | 1,707 | 19,811 | 133,694 |
The additions to land and buildings in the reporting year primarily relate to a newly completed mega-ship berth at the Burchardkai container terminal in Hamburg, which HHLA has leased from a related party, Hamburg Port Authority AöR, Hamburg (HPA). For more information, please refer to Note 45.
The following table shows the changes in investment property:
| in € thousand | Investment property | Payments on account and plants under construction |
Total |
|---|---|---|---|
| Carrying amount as of 1 January 2011 | 178,557 | 7,011 | 185,568 |
| Acquisition or production cost | |||
| 1 January 2011 | 267,477 | 7,011 | 274,488 |
| Additions | 1,636 | 2,497 | 4,133 |
| Disposals | - 1,210 | - 1,210 | |
| Reclassifi cations | 6,739 | - 6,739 | 0 |
| 31 December 2011 | 274,642 | 2,769 | 277,411 |
| Accumulated depreciation, amortisation and impairment | |||
| 1 January 2011 | 88,920 | 0 | 88,920 |
| Additions | 8,814 | 8,814 | |
| Disposals | - 385 | - 385 | |
| Write-backs | 0 | ||
| Reclassifi cations | 0 | ||
| 31 December 2011 | 97,349 | 0 | 97,349 |
| Carrying amount as of 31 December 2011 | 177,293 | 2,769 | 180,062 |
| Carrying amount as of 1 January 2012 | 177,293 | 2,769 | 180,062 |
| Acquisition or production cost | |||
| 1 January 2012 | 274,642 | 2,769 | 277,411 |
| Additions | 135 | 10,041 | 10,176 |
| Disposals | - 53 | - 771 | - 824 |
| Reclassifi cations | 64 | - 64 | 0 |
| 31 December 2012 | 274,788 | 11,975 | 286,763 |
| Accumulated depreciation, amortisation and impairment | |||
| 1 January 2012 | 97,349 | 0 | 97,349 |
| Additions | 8,617 | 8,617 | |
| Disposals | - 54 | - 54 | |
| Write-backs | 0 | ||
| Reclassifi cations | 0 | ||
| 31 December 2012 | 105,912 | 0 | 105,912 |
| Carrying amount as of 31 December 2012 | 168,876 | 11,975 | 180,851 |
The properties held as investment property are mainly warehouses converted to offi ce space in Hamburg's Speicherstadt historical warehouse district as well as logistics warehouses and surfaced areas.
In 2012, rental income from investment property at the end of the fi nancial year was € 43,562 thousand (previous year: € 44,189 thousand). The direct operating expenses for investment property amounted to € 22,286 thousand (previous year: € 22,268 thousand) at the end of the reporting year.
The fair value of the investment property totalled € 479,424 thousand (previous year: € 444,775 thousand). The fair values were determined by HHLA's Real Estate segment.
Fair values are measured by applying the discounted cash fl ow method (DCF method) to the forecast net cash fl ows from managing the properties. The DCF calculation includes detailed forecasts of ten years or up to the end of the useful lives of properties with a remaining useful life of less than ten years.
During the detailed forecast period, the contractually agreed rental income from each property and other specifi c valuation parameters are used to derive the future operating costs, management expenses and maintenance costs. The parameters used are derived from the leases and/or company forecasts.
The cash fl ows are discounted consistently using standard market interest rates of 5.07 to 8.35 % p.a. Property-specifi c fair value is determined on the basis of property-specifi c measurement criteria.
Regarding existing restrictions on the disposal and use of buildings in connection with the letting of the associated properties from the Free and Hanseatic City of Hamburg, see the explanatory remarks on the lease agreements in Note 45.
Investment properties with a residual carrying amount of € 103,015 thousand (previous year: € 95,995 thousand) relate to buildings in the Speicherstadt historical warehouse district. Payments made on account and plant under construction account for € 11,891 thousand of this (previous year: € 2,744 thousand).
The companies HHLA Frucht, STEIN and CuxPort (previous year: just CuxPort) are recognised under shares in associated companies.
The shares held in HHLA Frucht and STEIN were subject to an impairment charge of € 3,515 thousand following an impairment test carried out on this cash-generating unit in the fi nancial year. The associated expense was recognised in the fi nancial result of the companies accounted for using the equity method (see Note 16). The value of the shares concerned has been fully adjusted following this impairment.
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Shares in associated companies | 2,039 | 1,830 |
Other fi nancial assets can be broken down as shown below:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Securities | 4,451 | 3,323 |
| Shares in affi liated companies | 3,858 | 1,519 |
| Other equity investments | 466 | 399 |
| Other fi nancial assets | 5,160 | 3,845 |
| 13,935 | 9,086 |
In the reporting year – as in 2011 – the securities relating to insolvency insurance for phased early retirement entitlements were netted out against the corresponding phased early retirement obligations because they fulfi l the conditions for plan assets as per IAS 19. The securities portfolio recognised as plan assets in the fi nancial year amounted to € 6,868 thousand (previous year: € 5,639 thousand). See Note 37. Before offsetting, this results in a securities portfolio of € 11,319 thousand (previous year: € 8,962 thousand).
The shares in affi liated companies include shares in Group companies which are of minor importance for giving a true and fair view of the Group's net assets, fi nancial and earnings position and are therefore not consolidated.
Shares in affi liated companies and other equity investments are carried at amortised cost.
Other fi nancial assets essentially comprise receivables from a graduated rent amounting to € 2,069 thousand (previous year: € 1,375 thousand) and receivables from HPA totalling € 394 thousand (previous year: € 405 thousand).
Inventories are made up as follows:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Raw materials, consumables and supplies | 17,052 | 20,189 |
| Work in progress | 3,330 | 1,998 |
| Finished products and merchandise | 1,361 | 975 |
| 21,743 | 23,162 |
Impairment losses on inventories recognised as an expense amount to € 1,129 thousand (previous year: € 668 thousand). This expense is reported under cost of materials (see Note 12).
Trade receivables came to:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Trade receivables | 128,037 | 151,771 |
The trade receivables are owed by third parties, do not bear interest and all have a remaining term of less than one year. No receivables were assigned as collateral for fi nancial liabilities, either in 2011 or in the year under review. Collateral for trade receivables is only held to a minor extent (e.g. rental guarantees).
Details of impairment allowances for trade receivables can be found in Note 47.
Receivables from related parties are made up as follows:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Receivables from HHLA Frucht | 10,428 | 0 |
| Receivables from HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH (HGV) |
8,802 | 0 |
| Receivables from the Free and Hanseatic City of Hamburg (FHH) |
2,354 | 684 |
| Receivables from Kombi-Transeuropa Terminal Hamburg GmbH (KTH) |
1,486 | 517 |
| Receivables from Hamburg Port Authority (HPA) |
1,245 | 1,276 |
| Other receivables from related parties | 613 | 1,279 |
| 24,928 | 3,756 |
Receivables from HHLA Frucht were recognised for the fi rst time as of 31 December 2012. This company has been included in HHLA's consolidated fi nancial statements using the equity method since 1 January 2012, see also Note 3.
Receivables from HGV include € 8,800 thousand from existing cash clearing. Liabilities of € 500 thousand were posted in the previous year.
Other fi nancial receivables consist of the following:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Current receivables from employees | 1,274 | 1,387 |
| Current reimbursement claims against insurers |
243 | 426 |
| Positive fair values of interest rate caps | 0 | 1 |
| Other current fi nancial receivables | 865 | 615 |
| 2,382 | 2,429 |
In the reporting year and the previous year, current receivables from employees consisted mainly of prepayments for company pensions.
Other assets can be broken down as shown below:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Current tax credits | 7,286 | 8,188 |
| Payments on account | 1,330 | 1,295 |
| Other | 6,341 | 7,293 |
| 14,957 | 16,776 |
The current tax credits include transaction tax claims.
The other assets shown are not subject to any signifi cant restrictions on title or use.
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Income tax receivables | 9,345 | 3,591 |
Income tax receivables result from offsettable taxes paid on investment income and advance tax payments.
Cash, cash equivalents and short-term deposits consist of the following:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Cash and cash equivalents with a maturity of up to 3 months |
116,316 | 221,044 |
| Short-term deposits with a maturity of 4 – 6 months |
50,000 | 30,000 |
| Bank balances and cash in hand | 63,756 | 78,952 |
| 230,072 | 329,996 |
Cash, cash equivalents and short-term deposits are made up of cash in hand and various bank balances in different currencies.
Cash of € 15,090 thousand (previous year: € 30,258 thousand) is subject to foreign exchange outfl ow restrictions.
Bank balances bear interest at variable rates applicable to demand accounts. Short-term deposits are made for varying periods of time ranging from one day to ten months, depending on the Group's cash requirements. They attract interest at rates payable for shortterm deposits. In the fi nancial year, the interest rates were between 0.0 and 2.0 % (previous year: 0.0 and 2.1 %). The fair value of cash and cash equivalents is largely equivalent to their carrying value.
As of the balance sheet date, the Group had unused lines of credit amounting to € 1,041 thousand (previous year: € 26,989 thousand) and had met all the conditions for their use. HHLA is confi dent that the Group has suffi cient credit lines at its disposal whenever required.
The non-current assets held for sale are mainly buildings owned by the HHLA Logistics segment amounting to € 12,442 thousand which will be sold within the coming fi nancial year.
Changes in the individual components of equity for the 2012 and 2011 fi nancial years are shown in the statements of changes in equity.
As of the balance sheet date HHLA's nominal capital consists of two different classes of share: Class A shares and Class S shares. Subscribed capital is € 72,753 thousand, divided into 70,048,834 Class A shares and 2,704,500 Class S shares; each no-par-value share represents € 1.00 of nominal capital on paper.
The nominal capital has been fully paid in.
In the course of the stock fl otation on 2 November 2007, 22,000,000 Class A shares were sold on the market. This corresponds to a free fl oat of approx. 30 % of HHLA's nominal capital.
As of the balance sheet date, the Free and Hanseatic City of Hamburg, through the company HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg, holds 69.58 % of the shares, including the 18.85 % of voting rights attributable directly to HHLA-Beteiligungsgesellschaft mbH, Hamburg.
As per the voting rights notifi cation dated 12 June 2012, First Eagle Investment Management, LLC, New York, USA, exceeded the threshold of 3 % of the voting rights on 5 June 2012 and, on this date, held 3.01 % of the voting rights attributable to it pursuant to Section 22 (1) sentence 1 no. 6 of the German Securities Trading Act (WpHG).
As per the voting rights notifi cation dated 12 June 2012, Arnold and S. Bleichroeder Holdings, Inc., New York, USA, exceeded the threshold of 3 % of the voting rights on 5 June 2012 and, on this date, held 3.01 % of the voting rights attributable to it pursuant to Section 22 (1) sentence 1 no. 6 and sentence 2 of the German Securities Trading Act (WpHG).
As per the voting rights notifi cation of 24 October 2012, First Eagle Overseas Fund, New York, USA, exceeded the threshold of 3 % of the voting rights on 19 October 2012 and held 3.02 % of those rights on this date.
In April 2012, HHLA, in accordance with its previous Executive Board resolution and with the approval of the Supervisory Board, carried out a capital increase from authorised capital I. Specifi cally, the capital was increased against cash contributions while excluding the subscription rights of Class A shareholders. In the process, 73,508 new no-par bearer Class A shares, each with a share of € 1.00 in the nominal capital, were issued to employees of the company and of the companies affi liated to it. The capital increase and its implementation were entered in the commercial register on 23 April 2012.
Subject to the approval of the Supervisory Board, the Executive Board is authorised to increase the company's nominal capital until 13 June 2017 by up to € 35,024,417.00 by issuing up to 35,024,417 new registered Class A shares for subscription in cash and/or kind in one or more stages (authorised capital I). The holders of Class A shares are to be given subscription rights; the subscription rights of holders of Class S shares are excluded. Furthermore and subject to the approval of the Supervisory Board, the Executive Board is also authorised to exclude the statutory subscription right of holders of Class A shares in certain cases when increasing the nominal capital using authorised capital I.
The Executive Board is authorised, with the approval of the Supervisory Board, to exclude the statutory subscription rights of holders of Class A shares,
(a) in the case of a capital increase for cash in which the amount of capital consisting of Class A shares does not exceed 10 % of the nominal capital (either at the point in time when this authorisation comes into effect or is exercised) and the issue price of the new shares is not substantially lower than the stock exchange price of those shares of the same class and rights which are already listed at the time of the fi nal determination of the issue price by the Executive Board; when calculating the 10 % limit, the proportionate amount of nominal capital allotted to new or re-acquired Class A shares which were issued or sold subject to a simplifi ed subscription right exclusion in accordance with Section 186 (3) sentence 4 of the German Stock Corporation Act (AktG) must be deducted, as must the proportionate amount of nominal capital which is subject to option and/or conversion rights and obligations arising from debenture bonds which have been issued since the authorised capital I came into effect, applying Section 186 (3) sentence 4 of the AktG accordingly;
(b) if it increases the nominal capital by subscription in kind for the purpose of acquiring companies, equity stakes in companies, parts of companies, intellectual property rights such as patents, trademarks or licences to use the above, or other product rights;
(c) if it is necessary to do so in order to offset fractional amounts; or
(d) in order to offer the new shares for sale to employees of the company and its subsidiaries (employee participation).
The Executive Board shall be authorised, with the consent of the Super visory Board, to specify the further details of the implementation of the capital increases out of authorised capital I, in particular the additional rights embodied in share certifi cates and the other conditions of the share issue. After each share increase from author ised capital the Supervisory Board is authorised to adjust the articles of association accordingly, in particular with regard to the amount of nominal capital and the number of Class A shares in existence.
Subject to the approval of the Supervisory Board, the Executive Board is authorised to increase the company's nominal capital until 13 June 2017 by up to € 1,352,250.00 by issuing up to 1,352,250 new registered Class S shares for subscription in cash and/or kind in one or more stages (authorised capital II). The holders of Class S shares are to be given subscription rights; the subscription rights of holders of Class A shares are excluded. Furthermore and subject to the approval of the Supervisory Board, the Executive Board is also authorised to exclude the statutory subscription right of holders of Class A shares in certain cases when increasing the nominal capital using authorised capital I.
The Executive Board shall be authorised, with the consent of the Supervisory Board, to specify the further details of the implementation of the capital increases out of authorised capital II, in particular the additional rights embodied in a share certifi cate and the other conditions of the share issue. Subject to the approval of the Supervisory Board the Executive Board is also authorised to exclude fractional amounts of shares from the Class S share holders' subscription rights. After each share increase from authorised capital the Supervisory Board is authorised to adjust the articles of association accordingly, in particular with regard to the amount of nominal capital and the number of no-par-value S shares in existence.
The Annual General Meeting of HHLA held on 16 June 2010 resolved to authorize the Executive Board to issue on one or more occasions bearer or registered bonds with warrants or convertible bonds for a total nominal amount of up to € 400,000,000.00 in the period until 15 June 2013. Option and conversion rights may only be issued for Class A company shares accounting for up to € 6,900,000.00 of the company's total nominal capital accounted for by Class A shares. Conditional capital in the same amount was created for this purpose.
The Annual General Meeting of HHLA held on 16 June 2011 additionally authorised the company's Executive Board to purchase Class A treasury shares up to a maximum of 10 % of the portion of the company's nominal capital accounted for by Class A shares at that time. In addition to being sold on the stock exchange or offered with subscription rights to all shareholders, the shares acquired under this authorisation may – subject to the approval of the Supervisory Board – be used in the cases stipulated by the resolution excluding other shareholders' subscription rights or be cancelled either in whole or in part without the need for an additional resolution by the Annual General Meeting. This authorisation expires on 15 December 2016. This authorisation may not be used for the purpose of trading in treasury shares.
HHLA does not currently hold any treasury shares. There are no plans to buy back shares.
The Group's capital reserve includes premiums from share issues and the associated costs of issue, which are deducted from the capital reserve. It also comprises premiums from capital increases at subsidiaries with minorities and a reserve increase from an employee stock purchase plan. A capital increase conducted in prior years reduced the capital reserve.
At the reporting date, the HHLA Group therefore had capital reserves of € 141,584 thousand (previous year: € 139,728 thousand). € 1,856 thousand was placed in the capital reserve in the reporting year due to the issue of new shares as part of an employee stock purchase programme. The premium is to be fully attributed to the capital reserve of the A division.
Retained earnings include net profi ts from prior years for companies included in the consolidated fi nancial statements, as far as these were not distributed as dividends. This item also encompasses differences between HGB and IFRS as of 1 January 2006 (the transitional date).
In accordance with the currently applicable version of IAS 19, which offers a choice of how to treat actuarial gains and losses from defi ned benefi t pension obligations, the HHLA Group equity also includes all actuarial gains and losses from defi ned benefi t pension obligations. This item additionally comprises changes in the fair value of hedging instruments (cash fl ow hedges), changes in the fair value of working lifetime accounts and the corresponding tax effects.
The reserve for translation differences enables the recognition of differences arising on the translation of fi nancial statements for foreign subsidiaries.
Non-controlling interests comprise outside interests in the Group companies' consolidated equity and totalled € - 1,411 thousand at the end of the fi nancial year (previous year: € 4.258 thousand).
In the 2010 fi nancial year, profi t and loss transfer agreements were signed between the subsidiaries HHLA Container-Terminal Altenwerder GmbH, Hamburg, and HHLA CTA Besitzgesellschaft mbH, Hamburg, on the one hand and HHLA Container Terminals GmbH, Hamburg (HHCT), on the other. In the profi t and loss transfer agreements, HHCT pledges to pay a fi nancial settlement based largely on future earnings to the above-mentioned companies' minority shareholder for the duration of the agreement.
In accordance with IAS 32, the minority shareholder's future estimated entitlements to fi nancial settlements are recognised as other fi nancial liabilities for the remaining term of the profi t and loss transfer agreement, although the agreement states that the variable entitlement to a settlement only arises once the annual fi nancial statements are approved. This will contribute € 77,043 thousand towards other fi nancial liabilities for the fi nancial years 2012 to 2014 (see Note 47).
Capital management at HHLA aims to ensure the Group's longterm fi nancial stability and fl exibility in order to safeguard the Group's growth and enable its shareholders to participate in its success. Balance sheet equity is the primary benchmark in this regard. The key value-oriented performance indicator at the HHLA Group is the return on capital employed (ROCE). The equity ratio is also monitored in order to maintain a stable capital structure. This should not fall below 30 %.
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Equity | 561,990 | 644,662 |
| Total assets | 1,768,506 | 1,811,532 |
| Equity ratio | 32 % | 36 % |
Despite posting a profi t after taxes in the reporting period, the equity ratio fell compared with the previous year. This was due primarily to the acquisition of further shares in METRANS and subsequent recognition using the entity concept. Furthermore, the drop in the interest rate used to calculate actuarial gains/losses
from 5.00 % in the previous year to 3.25 % in 2012, together with the dividend payment, had a negative impact on equity. A profi t and loss transfer agreement signed in September 2010 has also caused the equity ratio to fall sharply since the fi nancial year 2010. For further details, please refer to the section on "Non-Controlling Interests" in this Note.
If the fi nancial instruments classifi ed in accordance with IAS 32 had not been entered as liability components, but rather – as prior to the profi t and loss transfer agreement – as equity components, equity of € 639,033 thousand and an equity ratio of 36 % would have been reported for the same balance sheet total.
External minimum capital requirements were fulfi lled at all agreed audit points throughout the reporting year. See Note 38 for more information.
Provisions for pensions and similar obligations are formed for commitments arising from both vested rights to future pension payments and current payments to active and former members of HHLA Group companies in Germany and any surviving dependants who are entitled to receive such benefi ts. A distinction is made between defi ned benefi t and defi ned contribution company pension plans.
In the case of defi ned benefi t plans, the Group is obliged to make the agreed payments to active and former employees. HHLA's pension scheme is fi nanced by both provisions and funds.
Company retirement benefi ts are paid on the basis of various entitlements. As well as individual agreements these are primarily the collective company pension agreement (BRTV) and the so-called 'port pension', which is governed by a collective labour agreement for port workers in German seaports.
The BRTV is a total benefi t plan. HHLA guarantees the participating employees a certain amount of benefi ts, which are made up of the statutory pension and the company pension. The amount of total benefi ts is determined by a variable percentage (according to years of service) of a fi ctitious net payment in the fi nal wage or salary band based on social security data for the year 1999.
The amount of the port pension depends on the years in service and is determined by the collective labour agreement for German seaports.
Based on these pension plans, the Group forms provisions for pensions and similar obligations for the amount of expected future retirement and surviving dependants' pensions. External actuaries calculate the amount of the obligation using the projected unit credit method.
Shown below are the amounts recognised for benefi t commitments in the reporting year and the previous four years:
| in € thousand | 31.12.2012 | 31.12.2011 | 31.12.2010 | 31.12.2009 | 31.12.2008 |
|---|---|---|---|---|---|
| Present value of pension commitments | 381,197 | 312,119 | 329,221 | 323,824 | 299,862 |
| Obligations from working lifetime accounts | 3,038 | 1,610 | 1,913 | 1,317 | 802 |
| 384,235 | 313,729 | 331,134 | 325,141 | 300,664 |
The following table reconciles the present value of the obligation arising from pension commitments at the beginning and end of the year:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Present value of pension obligations as of 01.01. |
312,119 | 329,221 |
| Deconsolidation | - 880 | 0 |
| Current service expense | 3,284 | 3,587 |
| Past service expense | 103 | 1,131 |
| Interest expenses | 15,557 | 14,813 |
| Pension payments | - 19,948 | - 19,452 |
| Actuarial gains (-)/losses (+) | 70,962 | - 17,181 |
| Present value of pension obligations as of 31.12. |
381,197 | 312,119 |
The balance sheet shows the full present value of pension obligations including actuarial gains and losses. The reported pension obligation relates to an unfi nanced plan.
The following fi gures were recognised in the income statement:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Current service expense | 3,284 | 3,587 |
| Past service expense | 103 | 1,131 |
| Interest expenses | 15,557 | 14,813 |
| 18,944 | 19,531 |
The gains and losses reported under other comprehensive income developed as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Actuarial gains as of 01.01. | 67,019 | 49,838 |
| Deconsolidation | 79 | 0 |
| Changes in the fi nancial year | - 70,962 | 17,181 |
| Actuarial gains (+)/losses (-) as of 31.12. | - 3,864 | 67,019 |
The following actuarial assumptions are used to determine pension provisions:
| in % | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Discount rate | 3.25 | 5.00 |
| Projected salary increase | 3.00 | 3.00 |
| Projected increase in pensions (without BRTV) |
2.00 | 2.00 |
| Projected increase in pensions (monthly pensions under BRTV) |
1.00 | 1.00 |
| Fluctuation rate | 2.10 | 2.10 |
| Rate of infl ation | 2.00 | 2.00 |
The biometric data is drawn from the 2005 G actuarial tables by Prof. Dr. Klaus Heubeck.
HHLA derives the interest rates used for discounting from corporate loans with a very good credit rating whose terms and payouts match HHLA's pension plans.
In the 2012 fi nancial year, HHLA made pension payments for plans totalling € 19,947 thousand. HHLA anticipates the following payments for pension plans over the next fi ve years:
| Years | in € thousand |
|---|---|
| 2013 | 20,493 |
| 2014 | 20,812 |
| 2015 | 20,931 |
| 2016 | 20,957 |
| 2017 | 20,988 |
| 104,181 |
In 2006, the Group companies in Germany undertook to set up working lifetime accounts due to collective labour agreements. Employees have pay components invested in money market or investment funds by the Group and then use the value of the funds saved to fi nance their early retirement. The amount of pay to which employees are entitled during their early retirement depends on the amount of funds saved, which in turn depends on the performance of the fund assets, plus other contractually agreed social benefi ts during the early retirement phase.
The portion of the obligations covered by the funds saved is reported at the funds' fair value. The additional benefi ts arising from collective labour agreements which are not covered by the funds saved are reported at the full present value of the obligation including actuarial gains and losses.
The allocation of benefi t commitments changed as follows during the reporting year and the previous four years:
| in € thousand | 31.12.2012 | 31.12.2011 | 31.12.2010 | 31.12.2009 | 31.12.2008 |
|---|---|---|---|---|---|
| Present value of obligations | 13,663 | 9,780 | 8,325 | 5,029 | 2,635 |
| Present value of plan assets (fund shares) | - 10,625 | - 8,170 | - 6,412 | - 3,712 | - 1,833 |
| Uncovered allocations | 3,038 | 1,610 | 1,913 | 1,317 | 802 |
The present value of the obligations developed as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Fair value of plan assets as of 01.01. | 9,780 | 8,325 |
| Deconsolidation | - 108 | 0 |
| Current service expense | 2,478 | 2,495 |
| Interest expenses (recognised in income statement) |
542 | 372 |
| Actuarial gains (-) and losses (+) | 988 | - 1,391 |
| Capital payments | - 52 | - 53 |
| Other | 35 | 32 |
| Fair value of plan assets as of 31.12. | 13,663 | 9,780 |
With the exception of the covered part of the service expenses for plan assets, the following amounts were recognised in the income statement:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Current service expense including salary conversion |
2,478 | 2,495 |
| thereof gathered at costs as uncovered part |
452 | 602 |
| thereof gathered at plan assets as covered part |
2,026 | 1,893 |
| Interest expenses | 542 | 372 |
| Expected income from the plan assets | - 451 | - 328 |
| Benefi ts paid | 7 | 1 |
| 2,576 | 2,540 |
The present value of the plan assets developed as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Fair value of plan assets as of 01.01. | 8,170 | 6,412 |
| Deconsolidation | - 95 | 0 |
| Expected income from plan assets | 451 | 328 |
| Proceeds | 2,026 | 1,893 |
| Actuarial gains (+)/losses (-) | 84 | - 443 |
| Benefi ts paid | - 45 | - 52 |
| Miscellaneous | 34 | 32 |
| Fair value of plan assets as of 31.12. | 10,625 | 8,170 |
The plan assets consist solely of shares in money market and investment funds. Losses of € 39 thousand were recorded on the plan assets in the fi nancial year (previous year: € 429 thousand).
The following actuarial assumptions are used to determine provisions for working lifetime accounts:
| in % | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Discount rate | 3.25 | 5.00 |
| Anticipated return on invested capital | 3.25 | 5.00 |
| Forecast increase in pay | 3.00 | 3.00 |
| Fluctuation rate | 0.00 | 0.00 |
The gains and losses offset in equity developed as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Actuarial gains (+)/losses (-) as of 01.01. | 832 | - 116 |
| Deconsolidation | - 30 | 0 |
| Changes in the fi nancial year | - 904 | 948 |
| Actuarial gains (+)/losses (-) as of 31.12. | - 102 | 832 |
Shown below is the structure of the plan asset portfolio for obligations from working lifetime accounts:
| 100 % | 100 % | |
|---|---|---|
| Annuity funds | 2 % | 2 % |
| Fund of funds | 16 % | 16 % |
| Mixed funds | 31 % | 31 % |
| Money market funds | 51 % | 51 % |
| 2012 | 2011 |
In the fi nancial year under review, HHLA made payments for plans totalling € 52 thousand. In return, the company acquired corresponding securities holdings worth € 45 thousand. The outfl ow of funds therefore amounted to € 7 thousand in the year under review. In the next fi ve years, HHLA expects the following payments from obligations arising from working lifetime accounts which are not hedged by securities:
| Years | in € thousand |
|---|---|
| 2013 | 10 |
| 2014 | 43 |
| 2015 | 67 |
| 2016 | 90 |
| 2017 | 143 |
| 353 |
In the case of defi ned contribution plans, the relevant companies merely make payments to dedicated funds. There are no further obligations. HHLA does not incur any fi nancial or actuarial risks arising from these commitments.
The costs incurred in connection with pension funds which are to be regarded as defi ned contribution pension plans amounted to € 306 thousand in the reporting year (previous year: € 300 thousand).
HHLA paid € 24,656 thousand (previous year: € 23,018 thousand) into the state pension system as its employer's contribution.
The following table shows non-current and current provisions:
Provisions for demolition obligations result from obligations to be met at the end of the lease term under long-term lease agreements with the Free and Hanseatic City of Hamburg. All HHLA Group companies in the Port of Hamburg are obliged to return leased land free of all buildings owned by them at the end of the respective lease term. To calculate the amount of the provision it was assumed that the obligation would be carried out in full for all leased property, with the exception of buildings designated as historical landmarks. The demolition obligations relate to HHLA's Container, Real Estate and Logistics segments and are discounted at a rate of 4.5 % p.a. as in the previous year. In the reporting year, an anticipated price increase of 2.0 % was used to calculate the provisions shown. This rate is derived from the German construction cost index.
The cash outfl ow of these provisions is expected in the period 2025–2037.
Based on current lease agreements, provisions for expected increases in rents include anticipated but as yet uninvoiced increases in rents for leased port areas, properties in the Speicherstadt historical warehouse district and quay walls, primarily in Hamburg.
In the 2012 fi nancial year, the lease of a newly completed quay wall at the Container Terminal Burchardkai prompted an appropriation of € 439 thousand.
The total amount transferred also includes € 2,128 thousand (previous year: € 3,012 thousand) for anticipated increases in rents for quay walls which are already leased. Provisions were upped by € 1,114 thousand (previous year: € 1,121 thousand) to compensate for expected increases in the rents charged for areas leased in the Speicherstadt historical warehouse district.
| in € thousand | 31.12.2012 | 31.12.2011 | ||||
|---|---|---|---|---|---|---|
| Total | Thereof current |
Thereof non-current |
Total | Thereof current |
Thereof non-current |
|
| Demolition obligations | 41,492 | 0 | 41,492 | 40,758 | 0 | 40,758 |
| Expected increases in rents | 11,938 | 11,938 | 0 | 13,253 | 13,253 | 0 |
| Phased early retirement | 9,578 | 3,250 | 6,328 | 9,683 | 2,733 | 6,950 |
| Bonuses and single payments | 6,090 | 6,090 | 0 | 8,136 | 8,136 | 0 |
| Insurance excesses | 3,528 | 3,528 | 0 | 3,978 | 3,978 | 0 |
| Anniversaries | 2,607 | 0 | 2,607 | 2,284 | 0 | 2,284 |
| Legal fees and litigation expenses | 751 | 0 | 751 | 952 | 0 | 952 |
| Other | 3,806 | 763 | 3,043 | 3,240 | 658 | 2,582 |
| 79,790 | 25,569 | 54,221 | 82,285 | 28,759 | 53,526 |
Provisions for phased early retirement obligations consist of HHLA's obligations from the entitlements accrued during the benefi ciaries' working period, plus the supplementary amounts.
The securities holdings acquired in connection with phased early retirement contracts are classifi ed as plan assets under IAS 19. They were therefore offset against the phased early retirement obligations included in the provisions. The corresponding fi gure of € 6,868 thousand (previous year: € 5,639 thousand) therefore reduces the provisions reported (see Note 26).
The amount of the provision was determined using a discount rate of 0.9 % p.a. (previous year: 3.0 % p.a.).
Provisions for bonuses and one-off payments largely consist of provisions for Executive Board members and other senior staff. Aside from this, these provisions also included obligations arising from employee stock purchase measures in the previous year.
This obligation relates to provisions largely created by the Group's parent company to allow for potential cases of damage or loss which go beyond the existing insurance cover.
The provisions for anniversaries relate to Group employees' contractual entitlement to anniversary gratuities. The amount recognised is determined by an actuarial opinion. A discount rate of 3.25 % p.a. (previous year: 5.00 % p.a.) was used for the calculation.
The following provisions schedule shows changes in other noncurrent and current provisions:
| in € thousand | 01.01.2012 | Additions | Accrued interest |
Used | Reversed | 31.12.2012 |
|---|---|---|---|---|---|---|
| Demolition obligations | 40,758 | 926 | 2,225 | 2,410 | 7 | 41,492 |
| Expected increases in rents | 13,253 | 5,607 | 0 | 5,757 | 1,165 | 11,938 |
| Phased early retirement | 9,683 | 6,558 | 465 | 7,118 | 10 | 9,578 |
| Bonuses and single payments | 8,136 | 6,231 | 0 | 7,353 | 924 | 6,090 |
| Insurance excesses | 3,978 | 3,057 | 0 | 3,190 | 317 | 3,528 |
| Anniversaries | 2,284 | 254 | 112 | 43 | 0 | 2,607 |
| Legal fees and litigation expenses | 952 | 4 | 0 | 130 | 75 | 751 |
| Other | 3,240 | 1,533 | 0 | 754 | 213 | 3,806 |
| 82,285 | 24,170 | 2,802 | 26,755 | 2,711 | 79,790 |
Non-current and current fi nancial liabilities are broken down as follows:
| in € thousand | ||||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities from bank loans | 319,844 | 74,295 | 122,302 | 123,247 |
| Finance lease liabilities | 15,788 | 5,480 | 9,061 | 1,247 |
| Liabilities towards employees | 15,114 | 15,114 | 0 | 0 |
| Negative fair values of exchange and interest rate hedges | 1,835 | 921 | 914 | 0 |
| Other loans | 4,932 | 0 | 4,113 | 819 |
| Other fi nancial liabilities | 94,817 | 42,504 | 51,754 | 559 |
| 452,330 | 138,314 | 188,144 | 125,872 |
| in € thousand | 31.12.2011 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities from bank loans | 331,564 | 29,471 | 175,541 | 126,552 |
| Finance lease liabilities | 13,698 | 4,318 | 9,126 | 254 |
| Liabilities towards employees | 14,984 | 14,984 | 0 | 0 |
| Negative fair values of exchange and interest rate hedges | 2,926 | 1,958 | 968 | 0 |
| Other loans | 10,549 | 4,695 | 4,216 | 1,638 |
| Other fi nancial liabilities | 117,795 | 32,906 | 84,209 | 680 |
| 491,516 | 88,332 | 274,060 | 129,124 |
Amounts due to banks include interest of € 2,497 thousand accrued up to the balance sheet date (previous year: € 3,391 thousand). Transaction costs of € 798 thousand, incurred by taking out a loan in the reporting year, only increase the amounts due to banks for the duration of the loan.
Buildings, surfacing and movable non-current assets carried at € 18,961 thousand (previous year: € 44,036 thousand) have been pledged as collateral for interest-bearing loans. The collateral agreements provide that the assets are transferred to the banks until the loans and interest have been repaid in full and that they have a right to dispose of the assets if the borrower is in arrears with payments of interest and principal.
The liabilities from fi nance leases amounting to € 15,788 thousand (previous year: € 13.698 thousand) represent the discounted value of future payments for movable non-current assets.
The liabilities towards employees consist primarily of wages, salaries and holiday entitlement.
Other fi nancial liabilities mainly comprise liabilities to shareholders outside the Group. In the 2010 fi nancial year, profi t and loss transfer agreements were signed between the subsidiaries CTA and CTA Besitz on the one hand and HHCT on the other. In the profi t and loss transfer agreements, HHCT pledges to pay a fi nancial settlement to the above-mentioned companies' minority shareholder for the duration of the agreement. Amounting to € 77,043 thousand, this settlement for minority shareholders is reported under other fi nancial liabilities. Please also refer to the section on "Non-Controlling Interests" in Note 35.
| Interest condition | Interest rate | Remaining fi xed interest period |
Currency | Nominal value in TCU |
Carrying amount as of 31.12.2012 in € thousand |
|---|---|---|---|---|---|
| fi xed | 2.85–4.22 % | 2022 | € | 61,250 | 44,404 |
| fi xed | 2.83 % | 2021 | € | 34,257 | 24,665 |
| fi xed | 2.76–2.88 % | 2020 | € | 24,542 | 17,210 |
| fi xed | 3.66 % | 2019 | € | 20,000 | 20,000 |
| fi xed | 3.79–3.84 % | 2018 | € | 7,811 | 2,527 |
| fi xed | 1.90–5.67 % | 2017 | € | 33,579 | 15,895 |
| fi xed | 2.37–5.61 % | 2016 | € | 90,000 | 72,000 |
| fi xed | 4.23 % | 2015 | € | 25,000 | 25,000 |
| fl oating | fl oating + margin | 2013 | € | 115,644 | 88,687 |
| fl oating | fl oating + margin | 2013 | USD | 7,000 | 5,305 |
| fl oating | fl oating + margin | 2013 | CZK | 113,900 | 2,452 |
| 318,145 |
The following table shows the terms of the liabilities from bank loans:
The fl oating interest rates are EURIBOR or PRIBOR rates with maturities of one to six months. The fi nancial liabilities for which fair value is not equivalent to the carrying amount are as follows:
| in € thousand | 31.12.2012 | 31.12.2011 | ||||
|---|---|---|---|---|---|---|
| Carrying amount |
Fair value | Carrying amount |
Fair value | |||
| Fixed interest bearing loans |
221,700 | 225,514 | 210,300 | 206,244 |
Interest rates of 2.0 to 3.2 % p.a. (previous year: 2.6 to 3.9 % p.a.) were used to measure the fair value of fi xed interest-bearing loans. The interest rates are derived from the risk-free rate depending on maturity plus a premium according to the credit rating. They therefore constitute market rates. The average interest rate for the reported liabilities from bank loans was 2.5 % in the reporting year.
The variable interest rates are partly hedged by interest rate hedges. Please refer to the comments on derivative fi nancial instruments under Note 47. As a result of borrowing, individual affi liates have covenants linked to key balance sheet fi gures. Violating these covenants would authorise the lender to demand additional collateral, a change to the conditions or the repayment of the loan. In order to prevent such steps, HHLA constantly monitors compliance with the covenants and, where required, implements measures to ensure that all conditions of the loan are met. As of the balance sheet date, the corresponding borrowings totalled € 54,870 thousand (previous year: € 67,496 thousand). The covenants were met at all agreed audit points throughout the reporting year.
The liabilities to banks become due throughout the next fi ve years and beyond as follows:
| Maturity | in € thousand |
|---|---|
| Up to 1 year | 71,798 |
| 1 year to 2 years | 28,508 |
| 2 years to 3 years | 53,560 |
| 3 years to 4 years | 23,022 |
| 4 years to 5 years | 17,608 |
| Over 5 years | 123,649 |
| 318,145 |
Trade liabilities amount to:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Trade liabilities | 65,850 | 72,003 |
Trade liabilities from the fi nancial year are only owed to third parties. As in the previous year the total amount is due within one year.
Liabilities to related parties are made up as follows:
| in € thousand | 31.12.2012 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities to HGV | 65,776 | 65,776 | 0 | 0 |
| Liabilities to HPA (fi nance leases) | 114,235 | 146 | 1,183 | 112,906 |
| Other liabilities to related parties | 4,658 | 4,658 | 0 | 0 |
| 184,669 | 70,580 | 1,183 | 112,906 |
| in € thousand | 31.12.2011 | |||
|---|---|---|---|---|
| Total | Up to 1 year | 1 to 5 years | Over 5 years | |
| Liabilities to HGV | 65,759 | 65,759 | 0 | 0 |
| Liabilities to HPA (fi nance leases) | 93,675 | 88 | 722 | 92,865 |
| Other liabilities to related parties | 6,272 | 6,272 | 0 | 0 |
| 165,706 | 72,119 | 722 | 92,865 |
Liabilities to HGV of € 65,776 thousand (previous year: € 65,759 thousand) relate to a loan pertaining to the Real Estate subgroup – which attracts standard market interest – along with the corresponding interest portion.
The liabilities to HPA involve leased mega-ship berths at both Container Terminal Burchardkai and Container Terminal Tollerort in Hamburg. The amount recognised in the balance sheet is equivalent to the present value of the liabilities and is based on a lease term up to and including 2062. See also Note 45.
Other liabilities are made up as follows:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Tax liabilities | 7,039 | 8,454 |
| Employers' liability insurance premiums | 4,763 | 4,748 |
| Public subsidies | 2,438 | 2,079 |
| Advance payments received for orders | 1,984 | 1,282 |
| Port workers' welfare fund (Hafenfonds) | 1,952 | 1,354 |
| Social security payables | 927 | 425 |
| Customs duties | 0 | 3,680 |
| Other liabilities | 2,662 | 3,541 |
| 21,765 | 25,563 |
All other liabilities have a remaining term of up to one year.
The public subsidies related to preliminary funding in connection with the promotion of intermodal transport. This will be deducted from the acquisition cost capitalized for the subsidized investments following an audit to confi rm that all the requirements have been met.
The HHLA Group received € 351 thousand in public subsidies (previous year: € 0 thousand) in the year under review.
There is suffi cient certainty that all the conditions have been or will be fulfi lled for the public subsidies to promote intermodal transport totalling € 35,691 thousand which were paid to HHLA in the period between 2001 and 2011. These subsidies have therefore already been deducted from the cost of purchasing the subsidised investments. The conditions for the subsidies include obligations to operate the subsidised equipment for a retention period of fi ve to 20 years, observe certain operating criteria and provide the subsidising body with evidence for the use of the funds.
Income tax liabilities, to the extent that they exist, result from expected additional payments for corporation tax, solidarity surcharge and trade tax.
When preparing the fi nancial statements provisions are made for the corresponding amounts of corporation tax, solidarity surcharge and trade tax on the basis of the tax and legal situation known at the time of preparation.
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Income tax liabilities | 4,458 | 2,511 |
The cash fl ow statement is produced in line with IAS 7 Statement of Cash Flows. It shows changes in cash resources at the HHLA Group during the fi nancial year. The statement distinguishes between cash fl ows from operating, investing and fi nancing activities. Financial funds include cash in hand, cheques and bank balances with a remaining term of up to three months, receivables and/or liabilities relating to HGV and receivables and/or liabilities from cash pooling. They are recognised at nominal value. Currency trans lation effects and changes in the group of consolidated companies are taken into account when calculating the fi gures.
The cash fl ow from operating activities is calculated using the indirect method. This involves adjusting the earnings before interest and taxes (EBIT) for changes to provisions, changes in current assets and liabilities, and changes in non-cash items. Cash items such as interest and income taxes are also taken into account. At € 210,488 thousand, the cash infl ow from operating activities was lower than the previous year's € 266.069 thousand. This was due to a lower EBIT of € 186.277 thousand (previous year: € 207.015 thousand) and the € 17,595 thousand non-cash impact on earnings from separating out the intermodal activities. In add ition, higher tax payments stemming from the previous year's result and the subsequent higher tax payments for the reporting year reduced cash fl ow from operating activities. However, more revenue was converted into cash fl ow, which had the opposite effect. In the same period last year, by contrast, trade receivables went up sharply, but were not refl ected in cash balances.
The cash outfl ow from investing activities is calculated on a cash basis and/or using the direct method. It largely consists of the cash outfl ow from investments in non-current assets and short-term deposits. Cash infl ows from the disposal of non-current assets are also taken into account. In the reporting year, the cash outfl ow from investing activities amounted to € 160,892 thousand (previous year: € 137.971 thousand). This year-on-year increase in the cash outfl ow is mainly attributable to capital expenditure on property, plant and equipment, investment property and short-term deposits. This was partly offset by proceeds from the disposal of interests in consolidated companies as part of the realignment of the Intermodal segment.
The balance of the cash infl ow from operating activities and the cash outfl ow from investing activities makes up the free cash fl ow. This indicates what cash resources are available for dividend payments or the redemption of existing loans. Free cash fl ow was down on the previous year because capital expenditure was higher and the cash infl ow from operating activities was lower. Free cash fl ow dropped from € 128,098 thousand to € 49,596 thousand.
Like the cash outfl ow from investing activities, the cash outfl ow from fi nancing activities is calculated on a cash basis. In the year under review, resources totalling € 66,326 thousand were used for dividend payments to shareholders and minority shareholders. This was € 11,829 thousand less than in the previous year. Other expenditure included payments for increasing shareholdings in consolidated companies amounting to € 91,000 thousand and the repayment of (fi nance) loans and (lease) liabilities. This contrasts with cash infl ows of € 28,560 thousand from taking out (fi nance) loans. This resulted in a cash outfl ow from fi nancing activities of € 155,855 thousand in the reporting year, while the cash outfl ow totalled € 45,870 thousand in the previous year.
In addition to the cash and cash equivalents entered in the balance sheet, fi nancial funds are made up as shown below as of the balance sheet date for the purposes of the cash fl ow statement:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Cash and cash equivalents | 116,316 | 221,044 |
| Short-term deposits with a maturity of 4–6 months |
50,000 | 30,000 |
| Bank balances and cash in hand | 63,756 | 78,952 |
| Cash, cash equivalents and short-term deposits |
230,072 | 329,996 |
| Receivables from HGV | 8,800 | 0 |
| Liabilities to HGV | 0 | - 500 |
| Cash pool receivables | 0 | 2 |
| Cash pool liabilities | 0 | - 4,695 |
| Short-term deposits with a maturity of 4–6 months |
- 50,000 | - 30,000 |
| Financial funds at the end of the period | 188,872 | 294,803 |
Receivables from HGV are overnight deposits available on demand.
The HHLA Group's segment report is prepared in accordance with the provisions of IFRS 8 Operating Segments and requires reporting on the basis of the internal reports to the Executive Board for the purpose of controlling the commercial activities. The segment performance indicator used is the internationally customary key fi gure EBIT (earnings before interest and taxes), which serves to measure the performance of each segment and therefore aids the internal control function.
The accounting and valuation principles applied for internal reporting comply with the principles applied by the HHLA Group described in Note 6 "Accounting and Valuation Principles" in this annual report.
The segment information is reported on the basis of the internal control function, which is consistent with external reporting and continues to be classifi ed in accordance with the distinct activities of the HHLA Group's business segments. These are organised and managed autonomously in accordance with the type of services being offered.
The HHLA Group operates in the following four segments:
The Container segment pools the Group's container handling oper ations. The Group's activities in this segment consist primarily of handling container ships and transferring containers to other carriers (e.g. rail, truck or feeder ship). HHLA operates three container terminals in Hamburg (Altenwerder, Burchardkai and Tollerort) and another container terminal in Odessa, Ukraine. The portfolio is rounded off by supplementary container services, such as maintenance and repairs provided by its subsidiary HCCR.
As a core element of HHLA's business model, which is vertically integrated along the transportation chain, the Intermodal segment provides a comprehensive seaport–hinterland rail and truck network. The rail companies METRANS and POLZUG complete HHLA's range of services in this fi eld.
The Logistics segment encompasses a wide range of contract and warehousing logistics as well as specialist handling services. Its service portfolio comprises stand-alone logistics services, entire process chains for the international procurement and distribution of merchandise, and the processing of cruise ships. The segment also provides consulting and management services for clients in the port and transport sectors.
This segment is equivalent to the Real Estate subgroup. Its business activities encompass the development, letting and management of properties in the Port of Hamburg. These include properties in the Speicherstadt historical warehouse district and the fi sh market area on the northern banks of the river Elbe.
The Holding/Other division used for segment reporting does not represent an independent business segment as defi ned by the IFRS standards. However, it has been allocated to the segments within the subgroup Port Logistics in order to provide a complete and clear picture.
Due to the structure of the HHLA Group, it is necessary to issue a large number of invoices for inter-segmental services. These predominantly relate to the use of real estate, IT services, administrative services and staff provided by the holding company. Wherever possible, these services are valued at market prices. If it is impossible to make a direct comparison with market prices, benchmarks are used to ensure market conformity. The charges for staff provided by the holding company are usually based on the actual cost.
The following table gives the details of the reconciliation of the segment variables with the corresponding Group variables:
The reconciliation of the segment variable EBIT with consolidated earnings before taxes (EBT) incorporates transactions between the segments and the subgroups for which consolidation is mandatory, along with the proportion of companies accounted for using the equity method, net interest income and the other fi nancial result.
| in € thousand | 2012 | 2011 |
|---|---|---|
| Total segment earnings (EBIT) | 185,377 | 204,525 |
| Elimination of business relations between segments and subgroups |
900 | 2,490 |
| Group earnings (EBIT) | 186,277 | 207,015 |
| Earnings from associates accounted for using the equity method |
- 4,026 | 335 |
| Net interest | - 29,359 | - 32,726 |
| Other fi nancial result | 540 | 217 |
| Earnings before tax (EBT) | 153,432 | 174,841 |
The reconciliation of segment assets with Group assets incorporates not only items and fi nancial investments for which consolidation is mandatory, but also claims arising from current and deferred income taxes and fi nancial funds which are not to be assigned to segment assets.
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Segment assets | 1,637,830 | 1,661,703 |
| Elimination of business relations between segments and subgroups |
- 697,735 | - 639,714 |
| Current assets before consolidation | 539,228 | 429,514 |
| Financial assets | 6,940 | 4,199 |
| Deferred tax | 42,826 | 22,243 |
| Income tax receivables | 9,345 | 3,591 |
| Cash, cash equivalents and short-term deposits |
230,072 | 329,996 |
| Group assets | 1,768,506 | 1,811,532 |
The reconciliation with Group investments totalling € - 229 thousand (previous year: € - 1,873 thousand) contains the elimination of internal invoices for services to generate intangible assets and the inter-segmental sale of property, plant and equipment.
In relation to the reconciliation of depreciation and amortisation amounting to € - 1,094 thousand (previous year: € - 3,954 thousand), the entire amount is attributable to the elimination of intercompany profi ts between the segments and the subgroups.
The reconciliation of non-cash items amounting to € 37 thousand (previous year: € 102 thousand) contains items for which consolidation is mandatory between the segments and the subgroups.
| Germany | EU | Outside EU | Total | Consolidation | Group | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| in € thousand | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Segment income | 870,098 | 977,533 213,163 199,780 | 45,281 | 39,959 1,128,542 1,217,272 | 0 | 0 1,128,542 1,217,272 | ||||||
| Non-current segment assets |
987,637 1,026,770 229,078 | 196,897 | 58,483 | 30,742 1,275,198 1,254,409 493,308 557,123 1,768,506 1,811,532 | ||||||||
| Investments in non-current |
||||||||||||
| segment assets | 117,336 | 95,150 | 45,696 | 31,315 | 33,488 | 2,285 | 196,520 | 128,750 | 0 | 0 | 196,520 | 128,750 |
For the information by region, the segment revenue and disclosures on non-current segment assets are broken down in accordance with the affi liates' respective locations. In addition to items between the segments for which consolidation is mandatory, the reconciliation to Group assets primarily contains current assets, fi nancial investments and claims arising from current and deferred income taxes.
In the HHLA Group there is no customer with which more than 10 % of the entire consolidated revenue was generated.
The Group has concluded various fi nance lease and hire-purchase agreements for a number of properties, technical equipment, and operating and offi ce equipment. These agreements relate to, among other things, quay walls, lifting and ground-handling vehicles, container-carrying vehicles and chassis, a light warehouse and IT hardware. For the most part, the contracts include renewal options and in some cases a right to offer the item for sale. The renewal options are always for the lessee; the right to sell the item may, in some cases, be exercised by the respective lessor. A purchase option exists for the light warehouse. No provisions have been made for adjusting the lease payments.
In the fi nancial years 2010, 2011 and 2012, HHLA signed leases for a total of four newly completed quay walls with a related party, HPA. The fi xed lease initially runs until 2036, but HHLA anticipates that the lease terms of these assets will extend over 50 years, as in the past. The negotiations have been completed. The contracts are still subject to approval by HHLA's governing bodies, but HHLA's Executive Board is confi dent that the supervisory boards will grant their approval. The contracts make provisions for the allocation of liability in the event of nullity and the associated premature termination of the lease as a result of confl ict with EU law. The Executive Board of HHLA believes the risk of a confl ict with EU law is currently very low. Following the completion of a present value test, the quay walls leases are to be classifi ed as fi nance lease obligations according to IAS 17. Including expected increases in rent payment rates, this results in anticipated minimum lease payments of € 273,758 thousand.
The following table shows the reconciliation between future minimum lease payments from fi nance leases and hire-purchase agreements and their present value:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Within one year | 11,068 | 8,801 |
| Between one and fi ve years | 30,590 | 26,975 |
| Over fi ve years | 253,637 | 212,441 |
| Total minimum lease payments | 295,295 | 248,217 |
| Within one year | 5,626 | 4,406 |
| Between one and fi ve years | 10,244 | 9,848 |
| Over fi ve years | 114,153 | 93,119 |
| Present value of minimum lease payments |
130,023 | 107,373 |
| Interest expenses from discounting | 165,272 | 140,844 |
Contracts exist between the Free and Hanseatic City of Hamburg and/or HPA and the HHLA Group for the lease of land and quay walls in the Port of Hamburg and in the Speicherstadt historical warehouse district by companies in the HHLA Group. The main contracts expire between 2025 and 2037. Under the terms of the contracts the lease payments are generally reviewed every fi ve years on the basis of price developments in relevant competing ports or based on appropriate rental indices. Provisions are made for the anticipated increases in lease payments. Leasing expenses for the space in the Speicherstadt historical warehouse district are partly linked to the development of Group income from subletting these buildings.
Without the prior approval of the lessor, the leased areas and the buildings on them belonging to HHLA may not be sold or let. Major changes to the terms of subletting agreements also require the approval of the lessor.
There are also leases relating to real estate and movable property at the container terminal in Odessa, Ukraine. On the whole, the rents payable for this are fi xed and will only change during the course of the agreement as a result of future infl ation. The company will not have purchase options at the end of the lease agreements. The respective lease agreements have terms of between fi ve and 34 years.
The Group also has leasing agreements for various motor vehicles and items of technical equipment. These leases have an average duration of one to seven years and generally do not include renewal options. The lessee takes on no obligations when signing these leases.
At the balance sheet date the following minimum lease payment obligations exist under uncancellable operating leases:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Within one year | 36,010 | 37,265 |
| Between one and fi ve years | 133,387 | 138,161 |
| Over fi ve years | 802,151 | 923,131 |
| 971,548 | 1,098,558 |
In the fi nancial year, expenses of € 43,954 thousand (previous year: € 42,554 thousand) were incurred for leases, of which € 1,683 thousand (previous year: € 1,621 thousand) relates to conditional rental payments.
The Group has signed leasing agreements for letting its investment properties on a commercial basis. The investment properties consist of offi ce space and facilities not used by the Group. These leases have remaining uncancellable lease terms of between one and 16 years. After the end of the uncancellable lease period some contracts give tenants the option of extending the lease for a period of between two and up to a maximum of three times fi ve years. Some leases contain a clause under which the rent can be increased in line with market conditions.
The following table shows the minimum lease payments anticipated for the years ahead on the basis of uncancellable operating leases for investment property at the balance sheet date:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Within one year | 28,849 | 31,028 |
| Between one and fi ve years | 82,175 | 71,603 |
| Over fi ve years | 27,299 | 47,097 |
| 138,323 | 149,728 |
In the fi nancial year income of € 49,777 thousand (previous year: € 47,942 thousand) was earned from letting property, plant and equipment and investment property.
No provisions were formed for the following contingent liabilities because it was deemed highly unlikely that they would be utilised:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Guarantees | 5,454 | 4,038 |
| Comfort letters | 1,850 | 1,850 |
| 7,304 | 5,888 |
Of these guarantees, proportionately consolidated joint ventures account for € 0 thousand (previous year: € 553 thousand).
The nominal values of other fi nancial obligations are made up as follows on the balance sheet date:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Outstanding purchase commitments | 108,421 | 92,977 |
| Miscellaneous other obligations | 1,029,767 | 1,160,933 |
| 1,138,188 | 1,253,910 |
Of the obligations from outstanding purchase commitments, € 91,811 thousand (previous year: € 81,393 thousand) is attributable to capitalisation of property, plant and equipment.
Miscellaneous other obligations contain commitments from operating leases amounting to € 971,548 thousand (previous year: € 1,098,558 thousand), see also Note 45. Of the total reported for miscellaneous other obligations, proportionately consolidated joint ventures account for € 58,685 thousand (previous year: € 64,063 thousand).
To fi nance its business activities, the Group uses short, medium and long-term bank loans, fi nance leases and hire-purchase agreements as well as cash and short-term deposits. The Group has access to various other fi nancial assets and liabilities, such as trade payables and receivables which arise directly from its business.
The Group also enters into derivative transactions. The derivative fi nancial instruments include interest rate hedging instruments such as interest rate swaps and interest rate caps and, to a minor extent, currency futures. The purpose of these derivative fi nancial instruments is to manage interest rate, currency and commodity price risks which result from the Group's business activities and its sources of fi nancing.
Derivative fi nancial instruments are used to hedge existing transactions and planned transactions which are suffi ciently likely to take place. Hedging transactions are only concluded with counterparties with very good credit ratings. HHLA also makes use of external ratings to assess its counterparties' creditworthiness. The Group does not hold derivative fi nancial instruments for speculative purposes.
As a result of its borrowing the Group is exposed to an interest rate risk, which principally stems from medium to long-term borrowing at fl oating rates of interest.
Managing the Group's interest expenses involves a combination of fi xed and fl oating-rate debt, depending on the market. It is Group policy to arrange the majority of interest-bearing debt at fi xed rates of interest, either by agreeing fi xed rates with the lenders or by taking out interest rate swaps. The Group also partly limits its interest rate risk for the residual fl oating-rate debt by the use of interest rate caps.
At the balance sheet date, 76.1 % (previous year: 75.0 %) of the Group's borrowing was at fi xed interest rates, including an amount of € 20,336 thousand (previous year: € 35,947 thousand) covered by interest rate swaps. Interest rate caps were also in place in 2011 for a further € 3,824 thousand.
HHLA's interest-bearing receivables and liabilities are mainly at fi xed interest rates. These fi nancial instruments are not held at fair value and are therefore not subject to market price risks on the balance sheet.
Market price risks can, however, affect securities and equity investments in particular. Due to the minor scope of these instruments, the risk is deemed insignifi cant.
A change in the variable interest rate affects the interest expenses arising from fl oating-rate loans, the interest income from overnight deposits and time deposit investments, and the income from interest rate hedges and their fair value.
If the variable interest rate had been 0.5 percentage points higher as of the balance sheet date, interest expenses arising from fl oating-rate loans would have been € 482 thousand p.a. higher, interest income from overnight deposits and time deposit investments would have been € 1,194 thousand p.a. higher, and income from interest rate hedges would have been € 102 thousand p.a. higher. The fair value of the interest rate hedges would have risen by € 259 thousand. Of this, € 145 thousand would be recorded directly in equity and € 114 thousand would be recognised in the income statement, whose result would increase by a total of € 928 thousand before tax.
Due to its investments in countries outside the eurozone, changes in exchange rates can affect the balance sheet. Foreign currency risks on individual transactions, such as the sale of a shareholding for example, are hedged by currency futures or currency options if a market analysis requires it. The hedging transactions are in the same currency as the hedged item. The Group only concludes currency futures contracts when specifi c claims or obligations exist.
On the balance sheet date, the Group did not hold any currency hedging instruments, unlike in the previous year when the Group held such instruments with a nominal volume of € 67 thousand and a market value of € - 5 thousand.
Revenue in the HHLA Group is predominantly invoiced in euros or in the national currencies of the European affi liates. Investments in these countries are largely transacted in euros. There is currently no signifi cant foreign currency risk from the functional currency.
The Group is primarily exposed to a commodity price risk when purchasing fuel. Depending on the market situation the Group can arrange price hedges for part of its fuel requirements. This was not the case at the balance sheet date or on 31 December 2011.
In addition to the market risks mentioned, there are also fi nancial risks in the form of credit and liquidity risks.
The Group only maintains customer relationships on a credit basis with recognised, creditworthy third parties. Clients who wish to complete transactions with the Group on a credit basis are subject to a credit scoring procedure. Receivables are also monitored on an ongoing basis and impairment allowances are made if risks are identifi ed, such that the Group is not exposed to any additional signifi cant default risks on receivables. The maximum default risk for the trade receivables and other fi nancial receivables is theoretically the carrying amount for the individual receivable. HHLA has also taken out loan loss insurance to minimise default risks. This covers key outstanding receivables as of the balance sheet date.
The term structure of trade receivables is as follows:
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Receivables not due for payment and not written down |
99,497 | 114,959 |
| Overdue receivables not written down | 28,540 | 36,812 |
| thereof up to 30 days | 24,066 | 28,994 |
| thereof 31 to 90 days | 3,661 | 6,067 |
| thereof 91 days to 1 year | 801 | 1,406 |
| thereof over 1 year | 12 | 345 |
| 128,037 | 151,771 |
Value adjustments on trade receivables developed as follows:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Impairment as of 01.01. | 2,504 | 2,732 |
| Additions (impairment expenses) | 1,614 | 2,360 |
| Used | - 519 | - 2,166 |
| Reversals | - 978 | - 422 |
| Impairment as of 31.12. | 2,621 | 2,504 |
The default risk in the case of derivative fi nancial instruments and cash, cash equivalents and short-term deposits is, in theory, that of counterparty default and is therefore equivalent to the carrying amounts of the individual fi nancial instruments.
The risk of default can be considered to be very low, since the Group as a rule only conducts derivative fi nancial transactions and liquid investments with counterparties with very good credit ratings.
In addition, credit risks may arise from an availment from the contingencies listed in Note 46.
The Group guarantees suffi cient liquidity at all times with the help of medium-term liquidity planning, by diversifying the maturities of loans and fi nance leases, and by means of existing lines of credit and funding commitments. If covenants have been agreed for individual loans, they are monitored on an ongoing basis to make sure they are being complied with. HHLA will introduce measures it deems necessary to ensure that the covenants are met.
For details on the repayment of the HHLA Group's loans, the liabilities towards employees, the fi nance lease liabilities and other fi nancial liabilities, please refer to the table of residual maturities for fi nancial liabilities in Note 38.
The following outfl ows of liquidity are expected for future interest payments:
| 31.12.2012 | |||||
|---|---|---|---|---|---|
| in € thousand | Total | Up to 1 year |
1 to 5 years |
Over 5 years |
|
| Outfl ow of liquidity for future interest payments on fi xed-interest loans |
43,961 | 6,698 | 18,732 | 18,531 | |
| Outfl ow of liquidity for future interest payments |
|||||
| on fl oating-rate loans | 2,737 | 804 | 1,544 | 389 | |
| 46,698 | 7,502 | 20,276 | 18,920 | ||
| 31.12.2011 | ||||
|---|---|---|---|---|
| in € thousand | Total | Up to 1 year |
1 to 5 years |
Over 5 years |
| Outfl ow of liquidity for future interest payments on fi xed-interest loans |
45,520 | 6,598 | 19,161 | 19,761 |
| Outfl ow of liquidity for future interest payments on fl oating-rate loans |
7,506 | 2,892 | 4,135 | 479 |
| 53,026 | 9,490 | 23,296 | 20,240 |
It is anticipated that the interest rate swaps in place on the balance sheet date will result in the following interest outfl ows in the future. In this context, an interest outfl ow is considered to be the difference between the amount to be paid and the amount to be received. The interest rate caps do not result in interest outfl ows.
| in € thousand | 31.12.2012 | 31.12.2011 |
|---|---|---|
| Within one year | 703 | 781 |
| Between one and fi ve years | 1,144 | 1,902 |
| Over fi ve years | 0 | 123 |
| 1,847 | 2,806 |
Fair Value
With the exception of the non-current fi nancial liabilities described in Note 38, there are no signifi cant differences between the carry ing amounts and fair values of fi nancial instruments.
The following tables show the carrying amounts for the fi nancial assets and liabilities according to the categories defi ned by IAS 39 and other standards:
| in € thousand | Valuation using IAS 39 | Balance sheet |
|||
|---|---|---|---|---|---|
| Loans and receivables |
Held for trading |
Available-for-sale fi nancial assets |
|||
| Amortised cost | Fair value | Amortised cost | |||
| Financial assets | 5,160 | 4,451 | 4,324 | 13,935 | |
| Trade receivables | 128,037 | 128,037 | |||
| Receivables from related parties | 24,928 | 24,928 | |||
| Other fi nancial receivables | 2,382 | 2,382 | |||
| Cash, cash equivalents and short-term deposits | 230,072 | 230,072 | |||
| 390,579 | 0 | 4,451 | 4,324 |
| in € thousand | Valuation using IAS 39 | Valuation using other IAS |
Valuation using IAS 32 |
Balance sheet |
||
|---|---|---|---|---|---|---|
| Held for trading |
Held as effective hedging instruments |
Other fi nancial liabilities |
||||
| Fair value | Fair value | Amortised cost | Amortised cost | Present value | ||
| Non-current and current fi nancial liabilities |
932 | 903 | 357,664 | 15,788 | 77,043 | 452,330 |
| Accounts payable | 65,850 | 65,850 | ||||
| Liabilities towards related parties |
184,669 | 184,669 | ||||
| 932 | 903 | 423,514 | 200,457 | 77,043 |
| in € thousand | Balance Valuation using IAS 39 |
|||||
|---|---|---|---|---|---|---|
| Loans and receivables |
Held for trading |
Available-for-sale fi nancial assets |
||||
| Amortised cost | Fair value | Amortised cost | ||||
| Financial assets | 3,845 | 3,323 | 1,918 | 9,086 | ||
| Trade receivables | 151,771 | 151,771 | ||||
| Receivables from related parties | 3,756 | 3,756 | ||||
| Other fi nancial receivables | 2,428 | 1 | 2,429 | |||
| Cash, cash equivalents and short-term deposits | 329,996 | 329,996 | ||||
| 491,796 | 1 | 3,323 | 1,918 |
| in € thousand | Valuation using IAS 39 | Valuation using other IAS |
Valuation using IAS 32 |
Balance sheet |
||
|---|---|---|---|---|---|---|
| Held for trading |
Held as effective hedging instruments |
Other fi nancial liabilities |
||||
| Fair value | Fair value | Amortised cost | Amortised cost | Present value | ||
| Non-current and current fi nancial liabilities |
1,002 | 1,924 | 378,886 | 13,698 | 96,006 | 491,516 |
| Accounts payable | 72,003 | 72,003 | ||||
| Liabilities towards related parties |
165,706 | 165,706 | ||||
| 1,002 | 1,924 | 450,889 | 179,404 | 96,006 |
The fair value of available-for-sale fi nancial assets is determined on the basis of market prices. These assets are therefore assigned to level 1 according to IFRS 7.27(a). Write-backs totalling € 23 thousand (previous year: € 9 thousand) were recognised here in the reporting year.
Financial assets at fair value held for trading, fi nancial liabilities held for trading and fi nancial liabilities held as effective hedging instruments are derivative fi nancial instruments, for which no market price is available. These are measured using standard market methods (valuation methods) on the basis of instrument-specifi c market parameters. They are therefore assigned to level 2 in accordance with IFRS 7.27(a). The market values are calculated with present value and option pricing models to determine the fair value. Whenever possible, these models use the relevant market prices and interest rates observed at the balance sheet date, obtained from recognised sources, as input parameters.
In the reporting year, gains of € 64 thousand (previous year: € 228 thousand) were recognised in the income statement on fi nancial assets and/or liabilities held at fair value through profi t and loss. These primarily relate to interest rate hedges with no effective hedging relationship as per IAS 39.
In the reporting year, changes of € - 43 thousand (previous year: € - 418 thousand) in the fair value of fi nancial instruments designated as hedging instruments (interest rate swaps) were recognised directly in equity. Losses amounting to € 1,065 thousand were derecognised from equity due to the changes in the scope of consolidation.
Please refer to the table on the fi nancial result in Note 16 for interest income and interest expenses.
The fi nancial liabilities held at fair value as per IAS 32 are liabilities to shareholders outside the Group (see Note 35). This fi nancial instrument is allocated to level 3 according to IFRS 7.27(a). The liability entered is the present value of the Group's anticipated payment obligations for the period from 2012 to 2014. This is calculated based on the assumptions used for the Group's plans; estimates are adjusted annually. As a result of the adjustments, earnings rose by € 4,527 thousand. This is included in fi nancial income, see Note 16.
Derivative fi nancial instruments are used in the HHLA Group to reduce interest rate risks and, to a minor extent, to reduce currency and commodity price risks. The fi nancial derivatives held in the consolidated fi nancial statements are carried at fair value. Resulting gains and losses are recognised through profi t and loss in the fi nancial result unless the derivative fi nancial instrument is part of a designated cash fl ow hedging relationship. The effective portion of unrealised gains and losses on cash fl ow hedges is recognised in equity without effect on profi t and loss.
The following table shows the terms and maturities of the interest rate derivatives held on the balance sheet date:
| in € thousand | Fixed interest rate | Floating rate | Amount covered 31.12.2012 |
Market values 31.12.2012 |
Market values 31.12.2011 |
||
|---|---|---|---|---|---|---|---|
| positive | negative | positive | negative | ||||
| Interest rate swaps | 3.82 % to 4.33 % | 1m to 6m EURIBOR | 20,336 | 0 | - 1,835 | 0 | - 2,921 |
| Interest rate caps | 3.50 % | 6m EURIBOR | 0 | 0 | 0 | 1 | 0 |
| 20,336 | 0 | - 1,835 | 1 | - 2,921 |
The remaining maturity of the interest rate derivatives is between twelve months and four years.
The fair values of derivatives are determined by reference to the market prices posted by counterparties.
The expenses and income from the hedged items included in the fi nancial result and the underlying derivatives are shown separately. Expenses and income are not set off against one another.
Of the interest rate swaps disclosed, as of the balance sheet date fi nancial instruments covering an amount of € 9,299 thousand (previous year: € 22,036 thousand) with a market value of € - 903 thousand (previous year: € - 1,924 thousand) are held as part of cash fl ow hedging relationships to hedge future cash fl ows from interestbearing liabilities. The hedged cash fl ows are expected to occur within the next four years. The amount covered by interest rate swaps is adjusted in line with the anticipated repayment of the loan over the term of the derivative.
IAS 24 defi nes related parties as companies and individuals which directly or indirectly control or exert signifi cant infl uence over the HHLA Group or over which the HHLA Group has control, joint control or signifi cant infl uence.
The shareholders HGV Hamburger Gesellschaft für Vermögensund Beteiligungsmanagement mbH, Hamburg (HGV), and HHLA Beteiligungsgesellschaft mbH, Hamburg, as well as their shareholder, the Free and Hanseatic City of Hamburg (FHH), companies over which the Free and Hanseatic City of Hamburg has control or signifi cant infl uence, the members of HHLA's Executive and Supervisory Boards, and the subsidiaries, associates and joint ventures in the HHLA Group are therefore defi ned as related parties. HGV is the fi nal parent company of HHLA which publishes consolidated fi nancial statements. HHLA is the parent company of the HHLA Group.
In addition to the business relationships with subsidiaries fully consolidated in the consolidated fi nancial statements, the following transactions took place with related parties in the respective fi nancial year:
| Income | Expenses | Receivables | Liabilities | |||||
|---|---|---|---|---|---|---|---|---|
| in € thousand | 2012 | 2011 | 2012 | 2011 | 31.12.2012 | 31.12.2011 | 31.12.2012 | 31.12.2011 |
| Companies with control over the Group |
523 | 909 | 4,174 | 4,519 | 11,156 | 0 | 65,776 | 65,759 |
| Non-consolidated subsidiaries | 3,199 | 341 | 726 | 2,760 | 355 | 903 | 963 | 4,085 |
| Joint ventures | 6,286 | 9,852 | 5,874 | 5,423 | 1,537 | 1,388 | 1,517 | 654 |
| Associated companies | 6,098 | 197 | 971 | 3 | 10,444 | 91 | 904 | 0 |
| Other transactions with related parties |
5,838 | 19,602 | 28,793 | 28,521 | 1,436 | 1,374 | 115,509 | 95,208 |
| 21,944 | 30,901 | 40,538 | 41,226 | 24,928 | 3,756 | 184,669 | 165,706 |
Liabilities towards related parties with control over the Group include a loan of € 65,000 thousand (previous year: € 65,000 thousand) to the Real Estate subgroup, which is granted by HGV for an indefi nite period and attracts interest at a rate of 4.50 % p.a. (previous year: 4.50 %) as of the balance sheet date. The loan can be cancelled with three months' notice. In addition, HHLA has receivables from cash clearing with HGV totalling € 8,800 thousand (previous year: liabilities totalling € 500 thousand). HHLA's receivables accrued interest at a rate of between 0.13 and 0.83 % p.a. (previous year: between 0.40 and 2.08 % p.a.) in the reporting year. The interest rates for HHLA's liabilities were between 0.23 and 0.93 % p.a. (previous year: between 0.50 and 2.18 %).
Obligations from fi nance leases amounting to € 114,235 thousand (previous year: € 93,676 thousand) for the lease of four mega-ship berths from HPA are included in other transactions with related parties.
In the previous year, income from other transactions included a compensation payment from HPA of € 15,000 thousand for the loss of leased areas in the Port of Hamburg, among other things.
Expenses with related parties mostly include rent for land and quay walls in the port and the Speicherstadt historical warehouse district.
Furthermore, HGV and the Free and Hanseatic City of Hamburg as parties related to HHLA have provided comfort letters and guarantees to lender banks for loans granted to companies in the HHLA Group. The nominal amount of the associated loan liabilities is € 248,000 thousand (previous year: € 248,000 thousand), of which around € 193,500 thousand plus interest was still outstanding on the balance sheet date (previous year: € 201,763 thousand).
With effect from 18 October 2007, a partial loss compensation agreement was concluded between HHLA and HGV. HGV hereby undertakes to assume each annual defi cit posted by the HHLA subgroup Real Estate as per commercial law during the term of the agreement. This applies insofar as the defi cit is not compensated for by transferring amounts from retained earnings, other revenue reserves or the capital reserve which were carried forward as profi t or transferred to these reserves during the term of the contract in accordance with Section 272 (2) (4) of the German Commercial Code (HGB).
Expenses and income from related parties are on standard market terms. The amounts outstanding at year-end are not secured and – with the exception of overnight funds in clearing and the loan liability to HGV – do not attract interest.
No loans or comparable benefi ts were granted to the members of the Executive and Supervisory Boards in the reporting year or in the previous year.
The following table lists subsidiaries, associated companies and joint ventures, plus HHLA's other participating interests:
| Name and headquarters of the company | Share of capital held |
Equity | Result for the fi nancial year |
||
|---|---|---|---|---|---|
| directly | indirectly | ||||
| in % | in % | in € thousand |
Year | in € thousand |
|
| Port Logistics | |||||
| Container segment | |||||
| HHLA Container Terminals Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 111,449 | 2012 | 0 | |
| HCCR Hamburger Container- und Chassis-Reparatur-Gesellschaft mbH, Hamburg 1, 2, 3 | 100.0 | 1,942 | 2012 | 0 | |
| HHLA Container Terminal Tollerort GmbH, Hamburg 1, 2, 3 | 100.0 | 34,741 | 2012 | 0 | |
| HHLA Rosshafen Terminal GmbH, Hamburg 1 | 100.0 | 19,466 | 2012 | 2,037 | |
| HHLA Container-Terminal Altenwerder GmbH, Hamburg 1, 2, 3 | 74.9 | 74,072 | 2012 | 0 | |
| SCA Service Center Altenwerder GmbH, Hamburg 1, 2, 3 | 74.9 | 601 | 2012 | 0 | |
| Kombi-Transeuropa Terminal Hamburg GmbH, Hamburg 4 | 37.5 | 113 | 2012 | 3 | |
| HHLA CTA Besitzgesellschaft mbH, Hamburg 1, 2, 3 | 74.9 | 6,360 | 2012 | 0 | |
| CuxPort GmbH, Cuxhaven 6 | 25.1 | 6,842 | 2011 | 1,335 | |
| FLZ Hamburger Feeder Logistik Zentrale GmbH, Hamburg 4 | 66.0 | 25 | 2012 | 0 | |
| HHLA Container Terminal Burchardkai GmbH, Hamburg 1, 2, 3 | 100.0 | 76,961 | 2012 | 0 | |
| Service Center Burchardkai GmbH, Hamburg 1, 2, 3 | 100.0 | 26 | 2012 | 0 | |
| Cuxcargo Hafenbetrieb GmbH & Co. KG, Cuxhaven 5 | 50.0 | 3 | 2012 | 5 | |
| Cuxcargo Hafenbetrieb Verwaltungs-GmbH, Cuxhaven 5 | 50.0 | 16 | 2012 | 0 | |
| DHU Gesellschaft Datenverarbeitung Hamburger Umschlagsbetriebe mbH, Hamburg 5 | 23.0 | 17.4 | 1,737 | 2012 | 908 |
| SC HPC UKRAINA, Odessa, Ukraine 1 | 100.0 | 66,580 | 2012 | 7,350 | |
| Intermodal segment | |||||
| HHLA Intermodal GmbH, Hamburg 1, 2, 3 | 100.0 | 29,043 | 2012 | 0 | |
| CTD Container-Transport-Dienst GmbH, Hamburg 1, 2, 3 | 100.0 | 1,256 | 2012 | 0 | |
| CIT Container Inland Trucking GmbH, Hamburg 5 | 50.0 | 36 | 2011 | 13 | |
| HHLA Intermodal Polska Sp. z o.o., Warsaw, Poland 1 | 100.0 | 4,984 | 2012 | - 892 | |
| HHLA Intermodal Polska Terminals Sp. z o.o., Warsaw, Poland 1, 5 | 100.0 | 4 | 2012 | - 3 | |
| METRANS a.s., Prague, Czech Republic 1 | 86.5 | 128,936 | 2012 | 21,757 | |
| METRANS (Deutschland) GmbH, Hamburg 1, 5 | 86.5 | 156 | 2012 | 9 | |
| METRANS (Danubia) a.s., Dunajská Streda, Slovakia 1 | 86.5 | 22,277 | 2012 | 3,088 | |
| METRANS Danubia Kft., Győr, Hungary 1, 5 | 86.5 | 140 | 2012 | 130 | |
| METRANS Adria D.O.O., Koper, Slovenia 1, 5 | 86.5 | 416 | 2012 | 9 | |
| METRANS D.O.O., Rijeka, Croatia 1, 5 | 86.5 | - 10 | 2012 | - 5 | |
| METRANS Danubia Krems GmbH, Krems an der Donau, Austria 1, 5 | 86.5 | 775 | 2012 | 223 | |
| METRANS DYKO Rail Repair Shop s.r.o., Prague, Czech Republic 1 | 86.5 | 3,131 | 2012 | 45 | |
| METRANS Rail s.r.o., Prague, Czech Republic 1 | 69.2 | 1,414 | 2012 | 563 | |
| METRANS Rail (Deutschland) GmbH, Kirnitzschtal 1, 5 | 69.2 | 245 | 2012 | 137 | |
| IBZ Pankrác a.s., Nýřany, Czech Republic 1, 5 | 80.8 | 221 | 2012 | 6 |
| Name and headquarters of the company | Share of capital held |
Result for the fi nancial year |
|||
|---|---|---|---|---|---|
| directly | indirectly | ||||
| in % | in % | in € thousand |
Year | in € thousand |
|
| JPFE-07 INVESTMENTS s.r.o., Ostrava, Czech Republic 1, 5 | 86.5 | 821 | 2012 | - 9 | |
| POLZUG Intermodal GmbH, Hamburg 1 | 100.0 | - 271 | 2012 | - 9,008 | |
| POLZUG Intermodal Polska sp. z o.o., Warsaw, Poland 1 | 100.0 | 1,666 | 2012 | - 1,238 | |
| POLZUG INTERMODAL LLC, Poti, Georgia 1 | 75.0 | 534 | 2012 | 381 | |
| IPN Inland Port Network Verwaltungsgesellschaft mbH, Hamburg 5 | 50.0 | 29 | 2012 | 3 | |
| IPN Inland Port Network GmbH & Co. KG, Hamburg 5 | 50.0 | 47 | 2012 | - 93 | |
| Logistics segment | |||||
| HPC Hamburg Port Consulting GmbH, Hamburg 1, 2, 3 | 100.0 | 1,367 | 2012 | 0 | |
| HPTI Hamburg Port Training Institute GmbH, Hamburg 1, 2, 3 | 100.0 | 102 | 2012 | 0 | |
| Uniconsult Universal Transport Consulting Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 100 | 2012 | 0 | |
| UNIKAI Lagerei- und Speditionsgesellschaft mbH, Hamburg 1 | 51.0 | 4,782 | 2012 | 1,464 | |
| ARS-UNIKAI GmbH, Hamburg 4 | 25.5 | 326 | 2012 | 20 | |
| HHLA Frucht- und Kühl-Zentrum GmbH, Hamburg 6 | 51.0 | 7,962 | 2012 | - 2,333 | |
| Ulrich Stein Gesellschaft mit beschränkter Haftung, Hamburg 6 | 51.0 | 311 | 2012 | 147 | |
| HHLA Logistics GmbH, Hamburg 1, 2, 3 | 100.0 | - 1,237 | 2012 | 0 | |
| HHLA Logistics Altenwerder GmbH & Co. KG, Hamburg 1 | 100.0 | 587 | 2012 | 9 | |
| HHLA Logistics Altenwerder Verwaltungsgesellschaft mbH, Hamburg 1, 5 | 100.0 | 47 | 2012 | - 1 | |
| Hansaport Hafenbetriebsgesellschaft mit beschränkter Haftung, Hamburg 3, 4 | 49.0 | n. a. | 2012 | n. a. | |
| HCC Hanseatic Cruise Centers GmbH, Hamburg 1 | 51.0 | 725 | 2012 | 54 | |
| Holding/Other | |||||
| GHL Zweite Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung mbH, Hamburg 1, 2, 3 | 100.0 | 3,609 | 2012 | 0 | |
| HHLA-Personal-Service-Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 45 | 2012 | 0 | |
| HCCR Erste Beteiligungsgesellschaft mbH, Hamburg 1 | 100.0 | 33 | 2012 | 0 | |
| Real Estate | |||||
| Real Estate segment | |||||
| Fischmarkt Hamburg-Altona Gesellschaft mit beschränkter Haftung, Hamburg 1, 2, 3 | 100.0 | 4,518 | 2012 | 0 | |
| GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Block D mbH, Hamburg 1, 2, 3 | 100.0 | 8,184 | 2012 | 0 |
Hamburg 1 100.0 12,232 2012 1,476
Controlled companies
2 Profi t and loss transfer agreements were held in these companies in 2012.
The disclosure simplifi cation provided for in Section 264 (3) of the German Commercial Code (HGB) was used for these companies.
4 Proportionately consolidated companies
5 Due to the minor importance of these companies, they are not recognised using the equity method in the
GHL Gesellschaft für Hafen- und Lagereiimmobilien-Verwaltung Bei St. Annen mbH,
consolidated fi nancial statements or as associated companies, but rather as an equity investment.
6 Companies recognised using the equity method
The relevant group of people includes the current and former members of the Executive Board and their surviving dependants. The Supervisory Board and their immediate families also count as related parties. Apart from the details provided below, there were no notifi able transactions with related parties or their close relatives in the 2012 fi nancial year.
In accordance with Article 11 (2) of HHLA's articles of association, the Supervisory Board is responsible for signing and terminating service contracts with members of the Executive Board. The Supervisory Board in its entirety also establishes and regularly reviews the remuneration system for the Executive Board – including the core contractual components – based on recommendations by the Personnel Committee. When conducting such reviews, the Personnel Committee considers HHLA's size and area of operations, its commercial and fi nancial position and the amount and structure of Executive Board remuneration in comparable companies. The responsibilities and services provided by each Executive Board member are also taken into account. Following the introduction of the German Act on the Appropriateness of Management Board Remuneration (VorstAG), the Supervisory Board approved a new remuneration system at its meeting in December 2010. This system has been in use since 1 January 2011.
The remuneration of Executive Board members is made up of a non-performance-related basic annual salary, a performancerelated bonus and other benefi ts. The performance-related bonus is usually set using a three-year assessment period as a basis. The calculation is based on the average earnings before interest and taxes (EBIT) for the last three years (before additions to pension provisions and less any extraordinary income from the disposal of real estate and companies), the average return on capital employed (ROCE) and the achievement of targets relating to environmental issues (reduction of the carbon footprint of each container handled and transported) and social issues (broken down into training and continuing professional development, health and employment) over the same period. Target ranges were set for each of the components used in the calculation for the period from 2011 to 2013. Achieving these targets triggers the payment of the relevant bonus. When making these calculations, roughly equal weight is given to EBIT on the one hand and the above-mentioned sustainability components on the other. The variable remuneration is capped at 150 % of the basic salary. It is paid out once the annual fi nancial statements have been approved.
In addition to this, there is a pension commitment for each Executive Board member. Pensions are paid to former Executive Board members either after fi ve or eight years' service on the Executive Board, if they leave the Board for reasons unrelated to the Board member, or as a result of incapacity or due to reaching retire-
ment age. Pensions consist of a percentage of the entitlement salary, which is based on the annual basic salary. The percentage is between 35 and 50 %. Surviving spouses of Executive Board members receive a widow(er)'s pension of 55 to 60 % of the pension entitlement and children receive an orphan's allowance of 12 to 20 % of the pension.
Should the pension entitlement be suspended or no longer exist upon leaving the Executive Board, transitional pay will apply for a limited period based on the annual basic salary. This clause is not included in all Executive Board members' service contracts.
The service contracts valid during the year under review include a change of control clause. This stipulates that Executive Board members will receive their fi nancial entitlement for the remaining duration of their contract, discounted by 2 % p.a. and discharged in a one-off payment. This does not affect their pension entitlements.
Please see the remuneration report for details of the remuneration paid to individual Board members.
The following remuneration was paid to the members of the Executive Board:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Non-performance-related remuneration | ||
| Basic salary | 1,440 | 1,765 |
| Other benefi ts | 46 | 279 |
| Performance-related remuneration | 1,641 | 2,009 |
| 3,127 | 4,053 |
Benefi ts comprise non-monetary compensation – primarily the use of company cars – as well as pension contributions paid out to former Executive Board members in the reporting year.
After leaving the Executive Board on 31 December 2011, Dr. Jürgens will receive his contractually agreed basic salary until 31 December 2013 at the latest. The sum of € 325,000 has been stipulated as the basis for calculating his performance-related pay. If the employment relationship ends before 31 December 2013, Dr. Jürgens will receive compensation equivalent to 42 % of the remaining remuneration payable until 31 December 2013.
Benefi ts totalling € 1,385 thousand (previous year: € 782 thousand) were paid to former members of the Executive Board and their surviving dependants. Provisions of € 8,365 thousand (previous year: € 4,278 thousand) have been made for pension commitments to active Executive Board members and provisions of € 11,417 thousand (previous year: € 10,340 thousand) have been made for pension commitments to former Executive Board members and their surviving dependants.
In accordance with Article 16 of HHLA's articles of association, Supervisory Board members are remunerated as resolved by the Annual General Meeting. This remuneration is based on the scope of the Supervisory Board members' activities and the company's fi nancial position and its performance. This remuneration was revised with effect as of 2 November 2007.
The members of the Supervisory Board receive fi xed remuneration of € 10,000 per fi nancial year. The Chairman receives three times this amount and the Vice Chairman is paid one and a half times the basic fi gure. This remuneration increases by 35 percent when a dividend is paid to the holders of the company's Class A shares for the fi nancial year in question. Supervisory Board members who belong to a committee receive an additional € 2,500 per committee per fi nancial year, while the Chairman of the respective committee receives € 5,000, but altogether no more than € 10,000. Furthermore, Supervisory Board members receive a meeting attendance fee of € 250 for each meeting of the Supervisory Board or one of its committees. Supervisory Board members who have belonged to the Supervisory Board or a committee for less than a whole fi nancial year receive a corresponding pro rata payment.
The remuneration paid to the Supervisory Board in the fi nancial year under review totalled € 282 thousand (previous year: € 291 thousand).
HHLA has based its corporate governance on the recommendations and suggestions of the German Corporate Governance Code (the Code) as published on 26 May 2010 and the subsequent version dated 15 May 2012 and published on 15 June 2012. It will continue to observe the Code in future as well. Information on corporate governance at HHLA and a detailed report on the amount and structure of the remuneration paid to the Supervisory Board and Executive Board can be found in the Group management report and Note 48 of this report. The Executive Board and Supervisory Board discussed matters of corporate governance in 2012 and on 7 December 2012 issued the declaration of compliance 2012 in accordance with Section 161 of the German Stock Corporation Act (AktG), which is permanently available to shareholders on the company's website (www.hhla.de).
The following fees have been recognised as expenses for services provided by the auditors of the consolidated fi nancial statements, Ernst & Young GmbH:
| in € thousand | 2012 | 2011 |
|---|---|---|
| Audit of fi nancial statements | 531 | 491 |
| Other certifi cation services | 79 | 69 |
| Tax advisory services | 0 | 27 |
| Other services | 14 | 26 |
| 624 | 613 |
Fees for auditing fi nancial statements primarily consist of the fees for the audit of the consolidated fi nancial statements and for the audits of the fi nancial statements of Hamburger Hafen und Logistik Aktiengesellschaft and its domestic subsidiaries. In the year under review and the previous year, fees for other certifi cation services related predominantly to the qualifi ed review of interim fi nancial statements.
In January 2013, non-current assets held for sale were sold for an accounting gain of around € 5 million in the course of restructuring the Logistics segment.
There were no other transactions of special signifi cance after the balance sheet date 31 December 2012.
Hamburg, 5 March 2013
HAMBURGER HAFEN UND LOGISTIK AKTIENGESELLSCHAFT
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Roland Lappin
for the period 1 January to 31 December 2012
| in € | 2012 | 2012 | 2011 | 2011 | |
|---|---|---|---|---|---|
| 1. | Revenue | 142,704,922.21 | 140,264,949.38 | ||
| 2. | Increase/Decrease in work in progress | 21,800.26 | - 2,258,772.74 | ||
| 3. | Own work capitalised | 466,566.30 | 358,912.12 | ||
| 4. | Other operating income of which income from translation differences € 3,469.53 (previous year: € 3,450.67) |
8,068,575.51 | 3,675,844.89 | ||
| 5. | Cost of materials | ||||
| a) Expenses for raw materials, consumables, supplies and purchased merchandise |
4,272,846.56 | 5,335,036.01 | |||
| b) Expenses for purchased services | 1,314,205.52 | 5,587,052.08 | 1,432,764.69 | 6,767,800.70 | |
| 6. | Personnel expenses | ||||
| a) Wages and salaries | 95,782,085.78 | 93,906,495.23 | |||
| b) Social security contributions and expenses for pension and similar benefi ts of which for pensions € 5,157,063.70 (previous year: € 4,533,008.15) |
20,757,715.92 | 116,539,801.70 | 20,118,406.21 | 114,024,901.44 | |
| 7. | Depreciation and amortisation on intangible fi xed assets and property, plant and equipment |
6,399,710.73 | 5,917,944.91 | ||
| 8. | Other operating expenses of which expenses from translation differences € 1,739.31 (previous year: € 4,496.06) |
36,334,440.95 | 35,954,613.31 | ||
| 9. | Income from profi t transfer agreements | 123,134,160.50 | 162,048,470.46 | ||
| 10. Income from equity participations of which from affi liated companies € 726,223.09 (previous year: € 862,637.44) |
3,945,815.28 | 4,164,070.44 | |||
| 11. Other interest and similar income of which from affi liated companies € 4,422,531.91 (previous year: € 5,614,785.01) of which income from discounting € 0.00 (previous year: € 19,815.00) |
7,061,303.92 | 9,017,625.74 | |||
| 12. Expenses from assumed losses | 6,341,833.13 | 1,251,156.37 | |||
| 13. Interest and similar expenses of which to affi liated companies € 3,637,527.48 (previous year: € 4,593,036.70) of which from accrued interest € 18,518,729.70 (previous year: € 16,206,571.62) |
22,566,893.19 | 21,011,799.69 | |||
| 14. Result from ordinary income | 91,633,412.20 | 132,342,883.87 | |||
| 15. Taxes on income of which deferred € 299,516.23 (previous year: € 5,261,530.26) |
26,906,096.73 | 39,741,579.86 | |||
| 16. Other taxes | 441,442.10 | 462,403.32 | |||
| 17. Net profi t for the year | 64,285,873.37 | 92,138,900.69 | |||
| 18. Profi t carried forward from the previous year | 216,110,617.11 | 165,703,545.72 | |||
| 19. Dividend distributed | 48,236,242.11 | 41,731,829.30 | |||
| 20. Unappropriated profi t | 232,160,248.37 | 216,110,617.11 |
The annual fi nancial statement and report of Hamburger Hafen und Logistik Aktiengesellschaft, Hamburg, for the 2012 fi nancial year have been prepared according to the provisions of German commercial law and have been endorsed with an unrestricted auditor's certifi cate by the auditors of Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft. The statement of income for the period 1 January to 31 December 2012, and the balance sheet as of 31 December 2012, are presented on this and the following pages.
as of 31 December 2012
| in € | 31.12.2012 | 31.12.2012 | 31.12.2011 | 31.12.2011 | |
|---|---|---|---|---|---|
| Assets | |||||
| A. | Non-current assets | ||||
| I. | Intangible assets | ||||
| 1. | Purchased software | 1,466,883.02 | 1,589,944.00 | ||
| 2. | Payments made on account | 53,250.00 | 1,520,133.02 | 0.00 | 1,589,944.00 |
| II. | Property, plant and equipment | ||||
| 1. | Land, equivalent land rights and buildings, including buildings on leased land |
70,861,889.15 | 75,135,654.95 | ||
| 2. | Technical equipment and machinery | 2,381,496.30 | 2,531,836.05 | ||
| 3. | Other plant, operating and offi ce equipment | 3,275,215.78 | 2,904,498.46 | ||
| 4. | Payments made on account and plant under construction | 8,118,737.96 | 84,637,339.19 | 2,781,710.21 | 83,353,699.67 |
| III. | Financial assets | ||||
| 1. | Interests in affi liated companies | 228,325,243.93 | 226,037,545.57 | ||
| 2. | Equity investments | 3,279,163.18 | 2,618,861.54 | ||
| 3. | Non-current securities | 920,839.80 | 232,525,246.91 | 706,402.85 | 229,362,809.96 |
| 318,682,719.12 | 314,306,453.63 | ||||
| B. | Current assets | ||||
| I. | Inventories | ||||
| 1. | Raw materials, consumables and supplies | 173,306.12 | 181,769.66 | ||
| 2. | Work in progress | 1,777,249.81 | 1,950,555.93 | 1,755,449.55 | 1,937,219.21 |
| II. | Receivables and other assets | ||||
| 1. | Trade receivables | 859,685.20 | 885,637.50 | ||
| 2. | Receivables from the Free and Hanseatic City of Hamburg of which with a residual term of more than one year € 394,053.05 (previous year: € 404,883.82) |
2,699,794.44 | 1,043,219.43 | ||
| 3. | Receivables from affi liated companies | 493,794,111.27 | 427,695,614.83 | ||
| 4. | Receivables from investee companies | 10,417,223.80 | 10,063.97 | ||
| 5. | Other assets of which with a residual term of more than one year € 1,143,259.02 (previous year: € 1,224,327.41) |
13,590,604.42 | 521,361,419.13 | 8,883,631.47 | 438,518,167.20 |
| III. | Cash and cash equivalents | 199,625,655.34 | 283,236,759.66 | ||
| 722,937,630.40 | 723,692,146.07 | ||||
| C. | Accruals and deferrals | 780,934.70 | 323,482.37 | ||
| D. | Deferred tax assets | 26,483,487.25 | 25,568,251.54 | ||
| 1,068,884,771.47 | 1,063,890,333.61 |
as of 31 December 2012
| in € | 31.12.2012 | 31.12.2012 | 31.12.2011 | 31.12.2011 | |
|---|---|---|---|---|---|
| Equity and liabilities | |||||
| A. | Equity | ||||
| I. | Subscribed capital | ||||
| 1. | Port Logistics | 70,048,834.00 | 69,975,326.00 | ||
| 2. | Real Estate | 2,704,500.00 | 72,753,334.00 | 2,704,500.00 | 72,679,826.00 |
| II. | Capital reserve | ||||
| 1. | Port Logistics | 136,771,470.63 | 134,915,393.63 | ||
| 2. | Real Estate | 506,206.26 | 137,277,676.89 | 506,206.26 | 135,421,599.89 |
| III. | Revenue reserves | ||||
| 1. | Statutory reserve | ||||
| a) Port Logistics | 5,125,000.00 | 5,125,000.00 | |||
| b) Real Estate | 205,000.00 | 5,330,000.00 | 205,000.00 | 5,330,000.00 | |
| 2. | Other earnings reserves | ||||
| a) Port Logistics | 56,105,325.36 | 56,105,325.36 | |||
| b) Real Estate | 1,322,353.86 | 57,427,679.22 | 1,322,353.86 | 57,427,679.22 | |
| 62,757,679.22 | 62,757,679.22 | ||||
| IV. | Unappropriated profi t | ||||
| 1. | Port Logistics | 217,448,194.18 | 202,971,678.40 | ||
| 2. | Real Estate | 14,712,054.19 | 232,160,248.37 | 13,138,938.71 | 216,110,617.11 |
| 504,948,938.48 | 486,969,722.22 | ||||
| B. | Provisions | ||||
| 1. | Provisions for pensions and similar obligations | 292,116,413.74 | 289,079,536.47 | ||
| 2. | Tax provisions | 0.00 | 956,209.32 | ||
| 3. | Other provisions | 34,195,133.52 | 32,337,595.42 | ||
| 326,311,547.26 | 322,373,341.21 | ||||
| C. | Liabilities | ||||
| 1. | Payments on account | 2,024,149.95 | 1,974,495.89 | ||
| 2. | Trade Liabilities | 1,973,240.89 | 1,746,064.73 | ||
| 3. | Liabilities towards the Free and Hanseatic City of Hamburg | 3,688.61 | 10,743.00 | ||
| 4. | Liabilities towards HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH, Hamburg |
56,473,774.84 | 65,758,851.79 | ||
| 5. | Liabilities towards affi liated companies | 163,533,103.58 | 173,301,646.69 | ||
| 6. | Liabilities towards investee companies | 3,813,255.72 | 1,147,273.96 | ||
| 7. | Other liabilities of which from taxes € 2,046,611.94 (previous year: € 2,777,702.19) of which for social security € 1,413,003.02 (previous year: € 1,867,289.53) |
7,046,957.07 | 9,012,410.63 | ||
| 234,868,170.66 | 252,951,486.69 | ||||
| D. | Accruals and deferrals | 472,161.33 | 526,581.69 | ||
| E. | Deferred tax liabilities | 2,283,953.74 | 1,069,201.80 | ||
| 1,068,884,771.47 | 1,063,890,333.61 |
"We have audited the consolidated fi nancial statements prepared by the Hamburger Hafen und Logistik Aktiengesellschaft, Hamburg, comprising the statement of fi nancial position, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash fl ows and the notes to the consolidated fi nancial statements, together with the group management report for the fi scal year from 1 January 2011 to 31 December 2011. The preparation of the consolidated fi nancial statements and the group management report in accordance with IFRSs as adopted by the EU, and the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB ["Handelsgesetzbuch": "German Commercial Code"] and articles of incorporation and bylaws are the responsibility of the parent company's management. Our responsibility is to express an opinion on the consolidated fi nancial statements and on the group management report based on our audit.
We conducted our audit of the consolidated fi nancial statements in accordance with Sec. 317 HGB and German generally accepted standards for the audit of fi nancial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, fi nancial position and results of operations in the consolidated fi nancial statements in accordance with the applicable fi nancial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated fi nancial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual fi nancial statements of those entities included in consolidation, the determination of entities to be included in consolidation, the accounting and consolidation principles used and signifi cant estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the fi ndings of our audit, the consolidated fi nancial statements comply with IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to Sec. 315a (1) HGB and articles of incorporation and bylaws and give a true and fair view of the net assets, fi nancial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated fi nancial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development."
Hamburg, 5 March 2013
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft
Grummer Röseler Wirtschaftsprüfer Wirtschaftsprüfer
[German Public Auditor] [German Public Auditor]
We hereby give our assurance that – to the best of our knowledge – the consolidated fi nancial statements convey a true and fair view of the assets, fi nancial position and profi t situation of the Group in accordance with the applicable accounting principles. Furthermore, we hereby certify that the Group Management Report conveys a true and fair view of the course of business, including the business earnings and the Group's situation, and that the principal opportunities and risks entailed in the Group's probable development in the coming fi nancial year are described.
Hamburg, 5 March 2013
Hamburger Hafen und Logistik Aktiengesellschaft
The Executive Board
Klaus-Dieter Peters Dr. Stefan Behn
Heinz Brandt Dr. Roland Lappin
Sustainable business practices have always been an integral part of HHLA's business model. The company connects global goods fl ows to transport chains that are environmentally friendly and conserve resources in an exemplary way. The corporate management is geared towards the principle of sustainable value creation too and demonstrates how environmental and economic targets can be reconciled with one another. HHLA's ten fi elds of activity within its On Course sustainability initiative comprise environmental, social and economic aspects. In order to document these transparently, this report is based on the guidelines issued by the Global Reporting Initiative or GRI (version GRI 3.1).
The content structure of this annual report is regulated by the disclosure obligation for public limited companies as defi ned by the German Commercial Code (HGB). In addition to details on the fi nancial and economic situation of the company, the report also includes information from HHLA's "On Course" sustainability programme. An extended Sustainability Council, comprising members of the Group management and external experts, is responsible for the sustainability strategy. This body provides a forum for discussing and approving sustainability issues and measures across the Group, as well as for regularly evaluating and updating the existing stakeholder structure. The data on economic performance, as well as environmental and social issues, is prepared centrally by the Finance, Sustainability and HR departments and subsequently made available.
The Group Management Report and Consolidated Financial Statements have been audited by Ernst & Young. The report has also been presented to the GRI, where it was put in the "B+" category. The GRI index points to parts in this annual report or sections of HHLA's website which provide information about individual GRI indicators.
The reporting period is the 2012 fi nancial year (1 January to 31 December 2012). The data presented generally refers to this period or the facts and fi gures at the end of the reporting period. If information refers to a different period of time, this is explicitly stated. The report is published once a year. This year is the fi rst time that it is based on GRI standards. The previous annual report was published on 30 March 2011.
Unless otherwise stated, the key fi gures and information in this report concern the entire Group including associated companies in which the company has a majority holding.
Some sections contain forward-looking statements. These estimates and statements were made to the best of our knowledge and in good faith. Future global economic conditions, legislation, market conditions, competitors' activities and other factors are not within the control of HHLA.
All data and information was collected from the respective units responsible for such information using representative methods for the reporting period.
HHLA prepares its consolidated fi nancial statements and its interim reports in accordance with International Financial Reporting Standards (IFRS). This annual report provides further information on IFRS in the Notes to the consolidated fi nancial statements. The individual fi nancial statements for HHLA Aktiengesellschaft are prepared in line with the accounting regulations of the German Commercial Code (HGB). The appropriation of profi ts is based solely on the individual fi nancial statements.
Sustainability-relevant key fi gures are input into the internal management information system on a monthly basis and analysed every six months. The Executive Board receives a corresponding report. The sustainability performance indicators are calculated every year and published in the management report section of the annual report, having been signed off by the auditors. This ensures the reliability of the data. Data comparability and consistency is guaranteed by complying with widely used international reporting standards (e.g. Greenhouse Gas Protocol).
Opportunities and risks are analysed by means of a comprehensive risk management system. Compliance with corporate guidelines as well as with relevant and recognised national and international industry standards is regarded as an essential part of corporate governance at HHLA.
Workfl ows and processes are structured in line with these regulations. External audits (including ISO 14001, ISO 9001 and CTQI [Container Terminal Quality Indicator]) confi rm compliance with recognised international standards.
In view of the extent of HHLA's activities, it is not possible to include the full details in this printed report. Additional information can be found at: www.hhla.de/en
| GRI indicator | Comments | Location of disclosure | Level of reporting |
|
|---|---|---|---|---|
| 1. | Strategy and Analysis | |||
| 1.1 | Statement by the organisation's most senior decision-maker |
Pages 6, 7, 10 – 12 | ||
| 1.2 | Description of key impacts, risks and opportunities |
Pages 6, 7, 73 – 75, 113 et seq., 123 et seq. http://hhla.de/en/investor-relations/ corporate-governance/compliance.html |
||
| 2. | Organisational Profi le | |||
| 2.1 | Name of the organisation | Page 71 | ||
| 2.2 | Primary brands, products and/or services | Pages 6, 7, 73 – 75 | ||
| 2.3 | Structure of the organisation | Pages 1, 4, 5, 70 – 72, 196 | ||
| 2.4 | Location of organisation's headquarters | Hamburg, Germany | ||
| 2.5 | Main countries where the organisation operates |
Page 196 | ||
| 2.6 | Nature of ownership and legal form | Pages 46, 146 et seq. | ||
| 2.7 | Markets served | Pages 73 – 75, 76 | ||
| 2.8 | Size of the organisation | U2 (table of key fi gures), pages 83, 96 et seq., 103 et seq. |
||
| 2.9 | Signifi cant changes during the reporting period regarding size, structure or ownership |
Pages 71, 95 et seq., 99 et seq. | ||
| 2.10 | Awards received in the reporting period | Pages 46, 92 | ||
| 3. | Report Parameters | |||
| 3.1 | Reporting period | Page 208 | ||
| 3.2 | Date of publication of most recent report | Page 208 | ||
| 3.3 | Reporting cycle | Page 208 | ||
| 3.4 | Contact point | Page 220 | ||
| 3.5 | Process for defi ning report content | Page 208 | ||
| 3.6 | Boundary of the report | Page 208 | ||
| 3.7 | Limitations on the scope of the report | Page 208 | ||
| 3.8 | Joint ventures, subsidiaries, outsourced operations |
Page 208 | ||
| 3.9 | Data measurement techniques and bases of calculation |
Page 208 | ||
| 3.10 | Changes in the presentation of information compared with earlier reports |
|||
| 3.11 | Changes in the scope, report boundaries or measuring techniques used |
|||
| 3.12 | GRI index | Pages 209 et seq. | ||
| 3.13 | External assurance of the report | Page 50 et seq. |
Level of reporting: Fully reported Partially reported Not reported or not relevant
Content: Black = primary indicator Grey = secondary indicator
| GRI indicator Comments |
Location of disclosure | Level of reporting |
||
|---|---|---|---|---|
| 4. | Governance, Commitments and Engagement |
|||
| 4.1 | Governance structure | Pages 48 et seq., 53 et seq. | ||
| 4.2 | Independence of the Chairman of the Supervisory Board |
Pages 48 et seq., 53 et seq., 62 | ||
| 4.3 | Independent members of the highest governance body |
Pages 48 et seq., 62 | ||
| 4.4 | Mechanisms for shareholders and employees to provide recommendations to the highest governance body |
Page 58 www.hhla.de/en/investor-relations/ ann-general-meeting.html |
||
| 4.5 | Linkage between compensation for members of the governance bodies and management of the company |
Pages 59 – 61 | ||
| 4.6 | Processes in place to avoid confl icts of interest |
Pages 36 et seq., 57 | ||
| 4.7 | Qualifi cation and expertise of members of the highest governance body in respect of sustainability issues |
Page 56 et seq. | ||
| 4.8 | Internally developed mission statements, codes of conduct and principles |
Pages 55 et seq., 76, 80 – 82, 85 et seq., 89 et seq. http://hhla.de/en/focus-on-people.html |
||
| 4.9 | Procedures of the highest governance body for overseeing the organisation's perform ance as regards sustainability |
Page 89 http://hhla.de/en/sustainability/ organization.html |
||
| 4.10 | Processes to evaluate the performance of the highest governance body in respect of sustainability |
Pages 53 et seq., 60 et seq. | ||
| 4.11 | Addressing the principle of precaution | Pages 79 et seq., 80 et seq. | ||
| 4.12 | Endorsement of externally developed agreements and principles |
Pages 55 et seq. http://hhla.de/en/investor-relations/ corporate-governance/declear-of compliance.html |
||
| 4.13 | Membership of associations | Zentralverband der deutschen Seehafen betriebe (ZDS) / Hafen Hamburg Marketing (HHM); Unternehmensverband Hafen Hamburg e.V. (UVHH) / Logistik-Initiative Hamburg; Industrieverband Hamburg (IVH) |
||
| 4.14 | Stakeholder groups engaged by the organisation |
HHLA is in regular contact with its stake holders from a wide range of different areas. Stakeholders include customers (e.g. shipping companies), customers' customers (e.g. forwarders), employees and their families, suppliers, the media, potential and existing shareholders, associations and institutions, research institutes, political decision-makers, local residents close to the terminal and inter ested members of the public. |
Page 208 | |
| 4.15 | Identifying stakeholders | In November 2012, the Sustainability Council evaluated and updated the exist ing stakeholder structure by means of internal interviews with external support. |
| GRI indicator | Comments | Location of disclosure | Level of reporting |
|
|---|---|---|---|---|
| 4.16 | Engaging stakeholders | The different stakeholders are engaged on a continual basis by means of numerous events and diverse communication chan nels, e.g. by means of regular meetings with residents on the subject of noise, events concerning the planned develop ment of the company with customers and shareholders, or guided tours of HHLA terminals. Existing and potential custom ers provide input for HHLA's sustainable development via key account manage ment. The same applies to potential and existing shareholders in the course of roadshows. |
Page 208 | |
| 4.17 | Topics and concerns raised by stakeholders | In the course of dialogue with neigh bouring residents of the port terminals, noise- reducing equipment was purchased, a hotline was opened and operating proc esses to minimise noise were introduced. Suggestions made by local residents are systematically statistically assessed and presented as part of the dialogue, which is conducted in a spirit of partnership. The issue of deepening the navigation channel of the river Elbe was accompa nied by information about the expected growth in ship size. We also report annual CO2 emissions per container handled, for instance, at the request of our stakehold ers. |
Page 192 | |
| Key Economic Performance Indicators | ||||
| Management Approach | Pages 55 et seq., 88 et seq., 90 et seq. http://hhla.de/en/sustainability/strategy.html http://hhla.de/en/sustainability/ecology.html |
|||
| EC1 | Direct economic value generated and distributed |
Pages 47, 92, 94 et seq., 132 et seq., 162 | ||
| EC2 | Financial implications due to climate change | Pages 87 et seq., 89 et seq., 121 | ||
| EC3 | Coverage of the organisation's defi ned benefi t plan obligations |
Page 162 | ||
| EC4 | Signifi cant fi nancial assistance received from government |
Page 157 | ||
| EC5 | Range of ratios of standard entry-level wage compared to local minimum wage |
|||
| EC6 | Locally based selection of suppliers | Page 85 et seq. http://hhla.de/en/sustainability/ecology.html |
||
| EC7 | Procedures for local hiring of employess | Pages 83, 92 | ||
| EC8 | Infrastructure investments provided primarily for public benefi t |
|||
| EC9 | Signifi cant indirect economic impacts |
Miscellaneous
| GRI indicator | Comments | Location of disclosure | Level of reporting |
|
|---|---|---|---|---|
| Key Environmental Performance Indicators | ||||
| Management Approach | Pages 55 et seq., 88 et seq., 90 et seq. http://hhla.de/en/sustainability/strategy.html http://hhla.de/en/sustainability/ecology.html |
|||
| EN1 | Materials used by weight or volume | The focus of HHLA's activities is on pro viding services at ports and in the fi eld of railway freight, which means that the input of material to produce goods is largely irrelevant. |
||
| EN2 | Proportion of materials used that are recycled input materials |
|||
| EN3 | Direct energy consumption | Page 90 | ||
| EN4 | Indirect energy consumption | Page 90 | ||
| EN5 | Energy saved due to conservation and effi ciency improvements |
Page 90 et seq. | ||
| EN6 | Initiatives to provide energy-effi cient or renewable energy-based products and services |
Pages 87 et seq., 90 et seq. | ||
| EN7 | Initiatives to reduce indirect energy consumption and reductions achieved |
Page 90 et seq. | ||
| EN8 | Total water withdrawal | Page 91 | ||
| EN9 | Water sources signifi cantly affected by the withdrawal of water |
Page 91 | ||
| EN10 | Proportion of water recycled and reused | |||
| EN11 Land in or adjacent to protected areas | HHLA does not have any land that is adjacent to protected areas. |
|||
| EN12 Impacts of activities in protected areas | HHLA's activities are not expected to have an impact of the biodiversity of protected areas. |
|||
| EN13 | Natural habitats protected or restored | |||
| EN14 | Strategies to protect biodiversity | |||
| EN15 | Impacts on endangered species | |||
| EN16 Total direct and indirect greenhouse gas emissions |
Page 90 | |||
| EN17 Other relevant greenhouse gas emissions | ||||
| EN18 | Initiatives to reduce greenhouse gas emissions |
Pages 87 et seq., 90 et seq. | ||
| EN19 Emissions of ozone-depleting substances | ||||
| EN20 NOx, SOx and other signifi cant air emissions | ||||
| EN21 Total water discharge | HHLA's consumption of fresh water equals the discharged wastewater plus rainwater. Rainwater is not measured. |
Page 91 | ||
| EN22 Total volume of waste by type and disposal method |
Page 91 |
| GRI indicator | Comments | Location of disclosure | Level of reporting |
|
|---|---|---|---|---|
| EN23 Total number and volume of signifi cant spills | Insofar as such spills occur, this informa tion is published in the risk and opportu nity report included in this annual report. |
|||
| EN24 | Transport of hazardous waste | Page 91 | ||
| EN25 | Impact of wastewater on biodiversity | |||
| EN26 Initiatives to mitigate environmental impacts of products and services |
Pages 87 et seq., 90 et seq. http://hhla.de/en/sustainability/ecology/ climate-protection.html |
|||
| EN27 Packaging materials that are reclaimed | EN1 | |||
| EN28 Fines for non-compliance with environmental laws and regulations |
||||
| EN29 Signifi cant environmental impacts of transporting products, goods and materials, and of employee mobility |
Page 88 et seq. http://hhla.de/en/sustainability/ecology/ transport-chains.html |
|||
| EN30 | Total environmental protection expenditures and investments |
|||
| Labour Practices and Decent Work | ||||
| Management Approach | Pages 32, 83 et seq., 92 http://hhla.de/en/focus-on-people.html http://hhla.de/en/sustainability/strategy. html#c25031 |
|||
| LA1 | Structure of total workforce | Page 83 | ||
| LA2 | Employee turnover | Page 83 | ||
| LA3 | Benefi ts provided to full-time employees | |||
| LA4 | Proportion of employees covered by labour agreements |
Page 83 | ||
| LA5 | Minimum notice period(s) regarding signifi cant operational changes |
Minimum notice periods as defi ned in the German Industrial Relations Act (Betriebs verfassungsgesetz) are observed. |
||
| LA6 | Proportion of total workforce represented in occupational safety committees |
Page 83 | ||
| LA7 | Occupational illnesses and accidents | Page 83 | ||
| LA8 | Training and prevention programmes regarding serious diseases |
Page 83 | ||
| LA9 | Health and safety topics covered in formal agreements with trade unions |
Page 83 | ||
| LA10 | Hours of training per employee | |||
| LA11 | Programmes for skills management and lifelong learning |
Page 84 et seq. | ||
| LA12 | Proportion of employees receiving regular performance and career development reviews |
|||
| LA13 | Composition of governing bodies | Pages 62 et seq., 83 et seq. | ||
| LA14 | Ratio of basic salary and remuneration of women to men |
The equal pay of male and female employees is provided for through labour agreements. |
||
| LA15 | Availment of parental leave by gender | Page 85 | ||
| GRI indicator | Comments | Location of disclosure | Level of reporting |
||
|---|---|---|---|---|---|
| Human Rights | |||||
| Management Approach | Pages 55 et seq., 83, 85 et seq., 104 et seq. http://hhla.de/en/investor-relations/ corporate-governance/compliance.html http://hhla.de/en/focus-on-people.html |
||||
| HR1 | Investment agreements that have undergone human rights screening |
HHLA performs most of its business ac tivities in Germany and Europe. Humans rights are protected here by law. When inviting tenders for services, care is taken that national and international laws and conventions are observed. This is legally reaffi rmed when the contract is signed. |
Page 55 et seq. | ||
| HR2 | Suppliers that have undergone human rights screening |
Over 95 percent of HHLA's suppliers come from the European Union, where human rights are enshrined in local and European laws and child labour is similarly prohibited. HHLA's own in-house purchasing guide lines, in combination with HHLA's externally applicable purchasing guidelines, also state the responsibility of every individual to comply with the provisions laid down by regulators, professional associations and the government, both within the company itself and in dealings with contractual partners. |
Page 55 et seq. | ||
| HR3 | Human rights training | ||||
| HR4 | Incidents of discrimination and corrective measures taken |
http://hhla.de/fi leadmin/download/ HHLA_513390_Verhaltenskodex.pdf |
|||
| HR5 | Restriction of the right to exercise freedom of association and corrective measures taken |
No restrictions were placed on the right to exercise freedom of association in the re porting period. HHLA actively encourages co-determination at work. The basis for this is set out in Germany by the Industrial Relations Act (BetrVG), among others. |
|||
| HR6 | Principles and measures to prevent child labour |
Page 55 et seq. http://hhla.de/de/investor-relations/ corporate-governance/compliance.html |
|||
| HR7 | Principles and measures to prevent forced labour |
Page 55 et seq. http://hhla.de/de/investor-relations/ corporate-governance/compliance.html |
|||
| HR8 | Training of security personnel | The security personnel used by HHLA have been trained in line with statutory requirements, including fundamental rights as set out in the German Constitu tion (Grund gesetz) and data protection provisions. |
http://hhla.de/de/kunden/sicherheit.html | ||
| HR9 | Violations involving the rights of indigenous people |
H10 |
| GRI indicator | Comments | Location of disclosure | Level of reporting |
|
|---|---|---|---|---|
| HR10 Business units subject to human rights reviews |
HHLA is primarily active in Hamburg. Compliance with basic constitutional law and the associated protection of human rights is of utmost importance to the HHLA Group. |
|||
| HR11 Number of grievances fi led related to human rights |
||||
| Society | ||||
| Management Approach | Pages 55 et seq., 89, 91 http://hhla.de/en/sustainability/strategy. html#c25032 http://hhla.de/en/ investor-relations/ corporate-governance/ compliance.html |
|||
| SO1 | Programmes to assess the impact of operations on the community |
Page 90 et seq. http://hhla.de/en/sustainability |
||
| SO2 | Business units analysed for risks related to corruption |
Page 55 et seq. http://hhla.de/en/investor-relations/ corporate-governance/compliance.html |
||
| SO3 | Proportion of employees trained in anti-corruption policies and procedures |
HHLA staff members receive regular train ing in anti-corruption guidelines. |
||
| SO4 | Actions taken in response to incidents of corruption |
Insofar as risks arising from legal disputes and proceedings regarding incidents of corruption exist, this information is pub lished in the risk and opportunity report included in this annual report. |
||
| SO5 | Public policy positioning and lobbying | HHLA's interests are represented by the German Association of Ports (Zentral verband der deutschen Seehafen betriebe e.V. or ZDS), among others. |
||
| SO6 | Gifts to political parties | HHLA does not make donations of any kind to political parties or politicians, nor does it conduct lobbying activities of any signifi cance. |
||
| SO7 | Legal actions as a result of anti-competitive behaviour |
|||
| SO8 | Fines and non-monetary sanctions for non-compliance with laws and regulations |
|||
| SO9 | Operations with signifi cant potential or actual negative impacts on local communities |
http://hhla.de/en/sustainability/ecology/ tracking-noise.html |
||
| SO10 Prevention and mitigation measures taken | Regular meetings to discuss noise protec tion are held with residents adjacent to the port terminals. Special low-noise handling equipment has been purchased to reduce noise. Operational processes are organised in a way to keep noise to a minimum. |
| GRI indicator | Comments | Location of disclosure | Level of reporting |
|
|---|---|---|---|---|
| Product Responsibility | ||||
| Management Approach | Pages 55 et seq., 80 http://hhla.de/en/customers/security.html http://hhla.de/en/sustainability/social/ safety.html http://hhla.de/en/investor-relations/ corporate-governance/compliance.html |
|||
| PR1 | Health and safety impacts along the product life cycle |
http://hhla.de/en/sustainability/social/ safety.html http://hhla.de/en/customers/security.html |
||
| PR2 | Non-compliance with regulations with regard to health and safety |
|||
| PR3 | Statutory information requirements for products and services |
HHLA's General Terms and Conditions for Container Handling and the Gen eral Terms of Business of Quay Terminal Operators contain stipulations concerning issues including safety at the terminals. |
http://hhla.de/fi leadmin/download/ kaibetriebsordnung_mai_2004.pdf http://hhla.de/fi leadmin/download/ Allgemeine_Umschlagsbedingungen_ AUB_01012013.pdf |
|
| PR4 | Non-compliance with regulations and voluntary codes concerning product and service information |
|||
| PR5 | Customer satisfaction including results of surveys |
|||
| PR6 | Programmes for adherence to laws, standards and voluntary codes related to advertising |
In its commercial communication, HHLA complies with the provisions of the German Advertising Standards Council (Deutscher Werberat), a body for volun tary self-regulation. As a result, we are committed to the generally accepted core values of the council and its standards of decency and morality. Commercial communication must always exhibit due respect for competitors and responsibility to society. In particular, advertising may not discriminate against particular people or groups. There were no sanctions, fi nes or warnings due to non-compliance with applicable provisions during the reporting year. |
||
| PR7 | Non-compliance with regulations and voluntary codes concerning marketing communications |
|||
| PR8 | Complaints associated with data protection | |||
| PR9 | Fines for non-compliance with law and regulations concerning the provision and use of products and services |
Fully automatic, driverless transport vehicle which carries containers back and forth between the container gantry cranes on the quayside and the block storage yard. HHLA uses AGVs at the Container Terminal Altenwerder.
Automated block storage facilities are used at the HHLA Container Terminal Altenwerder and Burchardkai as a compact means of stacking containers. Rail-Mounted Gantry Cranes are used to transport and stow the boxes.
A crane system used to load and discharge containerships. Container gantry cranes are classed as panamax, post-panamax or super post-panamax depending on the size of vessel they can handle.
Vessels which carry smaller numbers of containers to ports that are not served directly by container mega-ships. Feeders are used to transport boxes from Hamburg to the Baltic region, for instance.
Describes a port's catchment area.
A Terminal which serves as a handling hub. Container trains loaded with mixed cargo arrive at the hub terminal from various points of departure. At the hub, the freight is pooled and transshipped onto connecting trains to a target region or forwarded to the recipient by truck. HHLA's rail subsidiaries currently operate such hub terminals in Ceska Trebova, Dunajska Streda, Poznan and Prague.
Transportation via several modes of transport (rail, water, road) combining the specifi c advantages of the respective carriers.
North European international ports. In the broadest sense, the term refers to all large continental ports in Northern Europe from Le Havre to Hamburg and Gothenburg. The Hamburg-Antwerp Range is often used to denote a more specifi c geographic area consisting of Hamburg, the Bremen ports, Rotterdam and Antwerp.
See RMG
Crane units spanning their working area like a gantry, often operating on rails, hence the abbreviation RMG. If used in Block Storage, they are also called Storage Cranes, and in rail cargo handling they are called Rail Gantry Cranes.
Short for "roll on, roll off", RoRo is a means of loading wheeled cargo, such as cars, which can simply be rolled or driven onto a ship.
A train which travels back and forth on one route with the same arrangement of wagons, eliminating the need for time-consuming shunting. HHLA's rail subsidiaries operate shuttle trains between the sea ports and the Hub Terminals (Hinterland).
See TEU
See RMG
A long-legged vehicle used to transport containers at the terminals. The driver manoeuvres his straddle carrier into position above a container and lifts it up. The vehicles can stack containers up to four layers.
A highly effi cient Container Gantry Crane capable of discharging or loading two 40-foot containers or four 20-foot containers in a single movement. Also known as a Twin-Forty container crane.
In maritime logistics, a terminal is a facility where freight transported by various modes of transport is handled, such as a container terminal. Cargo can also be temporarily stored at a terminal prior to the next stage of its journey.
A TEU is a 20-foot standard container, used as a unit for measuring container volumes. A 20-foot standard container is 6.06 metres long, 2.44 metres wide and 2.59 metres high.
Added value is calculated on the basis of the value of production less input (costs of materials, depreciation, other costs). Added value is distributed to different interest groups in HHLA , such as employees, shareholders, partners or the state.
Average net non-current assets (intangible assets, property, plant and equipment, investment properties, associates accounted for using the equity method and fi nancial assets) + average net current assets (inventories + trade receivables less accounts payable) Assets held for sale are not part of the average operating assets.
Expenses that must be incurred to utilise fi nancial resources as equity or borrowed capital.
Performance-oriented pension obligations arising from the accrued and estimated pension rights of active and former members of staff as at settlement day, allowing for probable future changes in pensions and emoluments.
Financial instruments that are traditionally used to protect existing investments or obligations.
Earnings before interest and taxes.
Earnings before interest, taxes, depreciation and Amortisation.
Earnings before tax.
Law of economics according to which increases in production are accompanied by reductions in unit costs.
Equity / total assets
Interest income – interest expenses +/– result from participations – write-downs and losses on the disposal of fi nancial investments and of current securities – expense from loss adoption
Commercial debts / equity
International Accounting Standards
International Financial Reporting Standards
Impairment test as defi ned under IFRS
Payments for investments in tangible assets and investment property and for investments in intangible assets.
EBIT – taxes + amortisation and depreciation – writebacks +/– change of non-current provisions (excl. interest portion) +/– gains / losses on the disposal of property, plant and equipment + change of working capital
EBIT / average operating assets
Sales derived from selling, letting or leasing and from services provided by the Group, less sales deductions and turnover tax.
27 March 2013 Annual Report
14 May 2013 Interim Report January – March 2013
13 June 2013 Annual General Meeting
14 August 2013 Interim Report January – June 2013
13 November 2013 Interim Report January – September 2013
Hamburger Hafen und Logistik AG Bei St. Annen 1 20457 Hamburg Germany Phone: +49-40-3088-0 Fax: +49-40-3088-3355 [email protected] www.hhla.de
Investor Relations Phone: +49-40-3088-3100 Fax: +49-40-3088-55-3100 [email protected]
Corporate Communications Phone: +49-40-3088-3520 Fax: +49-40-3088-3355 [email protected]
Concept and Design Kirchhoff Consult AG
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The Hamburger Hafen und Logistik Aktiengesellschaft Annual Report 2012 is a translation of the original German Hamburger Hafen und Logistik Aktiengesellschaft Geschäftsbericht 2012. Please note that only the German version is legally binding.
| in € million | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 |
|---|---|---|---|---|---|---|
| Revenue | ||||||
| Port Logistics subgroup | 1,152.4 | 1,299.2 | 962.9 | 1,042.8 | 1,190.6 | 1,101.2 |
| Real Estate subgroup | 30.8 | 32.6 | 32.7 | 29.8 | 31.7 | 32.4 |
| Consolidation | - 3.2 | - 5.0 | - 4.9 | - 4.8 | - 5.0 | - 5.0 |
| HHLA Group | 1,180.0 | 1,326.8 | 990.7 | 1,067.81 | 1,217.3 | 1,128.5 |
| EBITDA | ||||||
| Port Logistics subgroup | 364.6 | 439.4 | 261.1 | 290.1 | 317.3 | 290.4 |
| Real Estate subgroup | 14.1 | 17.6 | 16.4 | 16.8 | 16.2 | 17.1 |
| Consolidation | 0 | - 0.2 | 0 | 0 | 0 | 0 |
| HHLA Group | 378.7 | 456.8 | 277.5 | 306.9 | 333.4 | 307.5 |
| EBITDA margin in % | 32.1 | 34.4 | 28.0 | 28.7 | 27.4 | 27.2 |
| EBIT | ||||||
| Port Logistics subgroup | 277.0 | 341.3 | 147.7 | 179.9 | 194.8 | 173.1 |
| Real Estate subgroup | 10.3 | 13.7 | 12.3 | 12.7 | 11.9 | 12.8 |
| Consolidation | 0.3 | 0.1 | 0.2 | 0.3 | 0.3 | 0.3 |
| HHLA Group | 287.6 | 355.12 | 160.22 | 192.92 | 207.0 | 186.3 |
| EBIT margin in % | 24.4 | 26.8 | 16.2 | 18.1 | 17.0 | 16.5 |
| Profit after tax | 152.0 | 217.5 | 89.1 | 113.9 | 118.8 | 111.8 |
| Profit after tax and minority interests | 111.3 | 160.4 | 53.0 | 76.2 | 89.3 | 72.4 |
| Cash Flow/Investments/Depreciation and Amortisation | ||||||
| Cash flow from operating activities | 246.7 | 341.9 | 193.2 | 206.9 | 266.1 | 210.5 |
| Cash flow from investing activities | - 174.7 | - 265.6 | - 157.3 | - 36.3 | - 138.0 | - 160.9 |
| Cash flow from financing activities | 131.9 | - 88.5 | - 88.6 | - 95.2 | - 45.9 | - 155.9 |
| Investments | 194.8 | 259.4 | 159.7 | 173.8 | 128.7 | 196.5 |
| Depreciation and amortisation | 91.0 | 101.8 | 117.3 | 114.0 | 126.4 | 121.2 |
| Assets and Liabilities | ||||||
| Non-current assets | 1,042.9 | 1,174.2 | 1,224.9 | 1,290.6 | 1,280.1 | 1,324.6 |
| Current assets | 440.9 | 438.3 | 365.6 | 424.5 | 531.5 | 443.9 |
| Equity | 569.5 | 682.6 | 637.0 | 567.0 | 644.7 | 562.0 |
| Equity ratio3 in % |
38.4 | 42.3 | 40.0 | 33.1 | 35.6 | 31.8 |
| Pension provisions | 312.4 | 300.7 | 325.1 | 331.1 | 313.7 | 384.2 |
| Other non-current assets | 342.4 | 350.3 | 385.5 | 518.8 | 563.9 | 495.8 |
| Current liabilities | 259.5 | 278.9 | 242.9 | 298.2 | 289.3 | 326.5 |
| Gearing ratio | 0.8 | 0.6 | 0.8 | 1.1 | 0.9 | 1.3 |
| Total assets | 1,483.8 | 1,612.5 | 1,590.5 | 1,715.1 | 1,811.5 | 1,768.5 |
| Employees | ||||||
| Employees as of 31.12. | 4,565 | 5,001 | 4,760 | 4,679 | 4,797 | 4,915 |
| Performance Data | ||||||
| Container throughput in million TEU | 7.2 | 7.3 | 4.9 | 5.8 | 7.1 | 7.2 |
| Container transport 4 in million TEU |
1.7 | 1.8 | 1.5 | 1.7 | 1.9 | 1.2 |
For the purposes of comparison, revenue has been restated due to the reclassification of incidental rental expenses
EBIT from continuing activities €190.7 million in 2010, €177.7 million in 2009 and €357.8 million in 2008
Equity ratio in 2010 after a reclassification from minority interests to financial liabilities
Transport volume was fully consolidated
Hamburger Hafen und Logistik Aktiengesellschaft Bei St. Annen 1, 20457 Hamburg, Germany, Phone: +49-40-3088-0, Fax: +49-40-3088-3355, www.hhla.de, [email protected]
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